The decision to approve the sale of New Zealand farmland to foreign investors who had previously been prosecuted overseas for toxic pollution will be independently reviewed, the Government says.
The review would focus on the way the the Overseas Investment Office (OIO) applied the "good character" test to the Argentinian investors, Land Information Minister Louise Upston said.
The OIO is already reviewing its decision to grant consent to Panama-based company Ceol & Muir to buy Onetai Station in Taranaki in 2014.
Ms Upston said this morning that the approval process would also be independently reviewed.
"I do have some concerns about the processes that the office have around the good character test. So I have asked that a review be undertaken.
"It's not [about] the good character test per se. It's how the office undertakes the investigations, how that information is used. So there will be an independent review that the chief executive will lead because I want an assurance that the outcomes are as we would expect."
Ceol & Muir is owned by Argentinian brothers Rafael and Federico Grozovsky.
Labour MP David Cunliffe revealed on Friday that the brothers were found criminally responsible for discharging toxic chemicals into a river in Buenos Aires in 2011.
A day earlier, the the OIO had said it was satisfied with its decision to allow the company to buy New Zealand farmland.
It had reviewed the company's consent because of its links to Mossack Fonseca, the firm at the centre of the Panama Papers controversy.
After Mr Cunliffe publicised the prosecution of its owners, the OIO reopened its investigation.
"It is fair to say I am not happy about the position we are in," Ms Upston said.
The independent review was launched as Prime Minister John Key promoted the OIO process in a speech to the NZ Institute of International Affairs at Parliament today.
He said New Zealand's increasingly multi-cultural, global outlook did not mean it had no safeguards or restrictions.
"Take the Overseas Investment Office process," he said.
"Foreign buyers of sensitive land must go through a rigorous application process and prove they offer greater benefits to New Zealand than would be obtained through a domestic sale.
He added: "I believe we have the right balance between encouraging investment and ensuring that investment benefits New Zealand."
Land Information New Zealand chief Peter Mersi said information about the applicants' involvement in the pollution incident was not passed on to ministers when the sale was approved.
Mr Mersi described this as a "regrettable lapse" and said that he had apologised to the minister.
The OIO had a robust process for dealing with applications, he said, "but on this occasion it does not appear to have been followed".
"I have also given her an assurance there will be no repeat of this situation in future."
Mr Mersi said that if it was determined that the Argentinian applicants were no longer of good character or had provided misleading information, legal action would be considered.
