OIO responds to land sales critics

As more and more valuable and picturesque land is sold to overseas buyers, the organisation responsible for approving the sales, the Overseas Investment Office, is often in the firing line from critics.  Wanaka reporter Tim Miller talked to the OIO acting deputy chief executive Lesley Haines before she steps down from the role next week.

Straddling the northern shores of Lake Hawea, the Hunter Valley Station is a gateway into the Hawea Conservation Park and the Hunter Valley itself.

When it was announced earlier this year American television presenter Matt Lauer and his wife Annette had purchased the lease to the 10,759ha  station, there was hope walking access through the farm would be increased.

In its decision to approve purchase, the Overseas Investment Office (OIO) said the Lauers’ willingness to improve public access through the station to important conservation land such as the Hawea Conservation Park was one of the beneficial outcomes of the purchase.

Not long after the sale was announced, some of the groups, such as the Federated Mountain Clubs and Fish and Game, which had taken part in talks with the Lauers’ representatives, started criticising the decision for not securing better access.

OIO acting deputy chief executive Lesley Haines, who will step down from the role next week, said looking back there were ways the Hunter Valley Station decision could have been handled differently.

In retrospect, it would have been better to have a representative from the OIO or Land Information New Zealand (Linz) at those meetings to better manage expectations of those groups about access, Mrs Haines said.

"We are now giving more resource to the more complex decisions such as Hunter Valley and  we would now look to have a representative at those type of meetings to manage those expectations."

Part of the decision to grant the sale was access to Kidds Bush and to Sentinel Peak would be formalised and access through the farm, when reasonable, would continue.

"I’m aware there were others who wanted quite a lot more than that."

Doubling the number of stock on the farm as well as investing $1.2 million in farming operations over the next five years, was the main benefit on which the decision the approval was made, Mrs Haines said.

"Our judgement around that was that would not have happened if the station had been sold to a New Zealand buyer."

The leasing back of the station to the Cochrane family was also taken into consideration during the process, she said.

As the station was a pastoral lease, it needed to continue to be used for farming, which meant access through the land was not always applicable.

Despite the criticism of the OIO by those groups, Mrs Haines said she could understand where they were coming from.

During her year at the head of the organisation, the Hunter Valley Station was just one of 182 sales to overseas investors approved.

Other decisions included approving the merger of Sky Television and Vodafone, which ultimately did not go ahead, and approval for Progressive Enterprises Ltd to build a Fresh Choice supermarket in Cromwell.

One of the biggest critics of the Hunter Valley Station sale and the OIO process is Federated Mountain Club president Peter Wilson.

But even he said he was sad to see Mrs Haines would not be staying as the head of the OIO.

"Lesley Haines was a breath of fresh air into the stale old Overseas Investment Office.

"However, I fear that her time there was too short. FMC has felt that for a long time that the OIO has paid lip-service only to the public interest in overseas land sales."

Mr Wilson said a number of the changes Mrs Haines had made during her time at the OIO were very positive, including ensuring consultation and direct involvement in overseas land sales for affected parties.

Despite the positive moves, Mr Wilson said there was still a high mountain to climb before the OIO regained the public’s trust.

It has been criticised on many fronts, but particularly on the lack of transparency in its decision making and its lack of ability to enforce conditions set on the purchase.

Mrs Haines said the OIO had worked hard in the past year to improve its performance, particularly in communicating decisions.

"There will be some cases where we can’t release any information, but our default will be to release all the information when we can."

For commercial reasons, information about the progress of a sale or who the potential buyer was could not be realised until the decision had been issued.

Getting information out in plain English and in a more informative way was something still being worked on, she said.

Enforcement was another area that had been "beefed up" in the past year.

A separate enforcement team with eight staff and a manager had been set up at the OIO to ensure investors were sticking to the conditions of their sale and also ensure overseas investors were not working around the Overseas Investment Act.

"Our bottom line is we are wanting to make sure in the case of sensitive land we get benefits for New Zealand, and when people are not even applying for consent, then that process and those benefits don’t even happen."

It was hard to know how common it was for overseas buyers to bypass the OIO process, but since December about 80 allegations had been investigated, and of those, about 20 were still being investigated.

Two breaches of the Overseas Investment Act cases were in the court system and there had been three cases where the land was taken off the overseas investor.

To people outside the process, it could seem the OIO was just a "tick box" exercise, but that was not the case, despite only two applications being turned down last year, Mrs Haines said.

"On the face of it, when there has been about two a year declined, it pretty much looks like a tick box."

From the outset of the OIO process, the applicants were very aware of what was required for a sale to be approved, which meant in most cases only those which met the criteria would be submitted.

"There is a bunch of lawyers who do this work and we’ve made really big efforts in the last year to get information out to the advising community."

Many applications were also rejected when they were first submitted.

"About 10% of those did not apply again.

"We can’t tell you all the reasons why some applications are withdrawn because we don’t always know, but some of them are because we have proposed declining and gone back to the applicants who have decided not to go any further."

Mrs Haines said it was important for people to realise that at the heart of the Act was the idea that it was a privilege for non-citizens to be allowed to invest in New Zealand assets.

"We are about ensuring that quality investments in valued and sensitive assets benefit New Zealand."

Mrs Haines will step down as the acting deputy chief executive on July 8 and Lisa Barrett will take over in a permanent role.

tim.miller@odt.co.nz