Crafar Farms Sale Approved – the Reasoning

The LINZ (Land Information New Zealand) website…plus every media outlet in the country….has reported the approval of the sale of the Crafar Farms to Milk New Zealand Holding Limited, a subsidiary of the Shanghai Pengxin Group Co. Limited, which was blocked earlier this year by an unfavourable judicial review in the High Court (covered by our sister blog here).

A decision summary can be found here, and the official press release from Maurice Williamson here.

Factors promoting the positive outcome include:

The introduction into New Zealand of NZ$12.5m from overseas for development purposes (s17(2)(a)(v));

The mechanisms for protecting or enhancing existing areas of significant indigenous vegetation, significant habitats of
indigenous fauna, and protected wildlife, including the
restoration of duneland and wetland areas, retirement of land from grazing, and the formal protection of areas, for example through the QEII National Trust (s17(2)(b)-(c));

The mechanisms for protecting or enhancing historic heritage within the relevant land, including the transfer of the Nga Herenga pa site to the Crown for no consideration, and the entry into the heritage covenant of the Te Ruaki pa site at Tiwhaiti (s17(2)(d));

The mechanisms for providing, protecting, or improving walking access over Benneydale 1, Benneydale 2 and Taharua (s17(2)(e));

Offer of riverbed to the Crown, including parts of the Waimiha Stream and the Te Kakaho Stream at Benneydale 1; the Mangemange Stream at Tiwhaiti; and the Taharua River at Taharua (s17(2)(f));

The consequential benefits flowing from the establishment of an on-farm training facility (r28(a));

The giving effect to or advancement of the NZ Inc China
Strategy (a significant Government strategy), one of the aims of which is to increase bilateral investment to levels that reflect New Zealand’s growing commercial relationship with China (r28(f)).

The actual OIO recommendation is a lengthy beast of 97 pages, and can be found here.

The OIO also provided a further briefing to the Ministers which concentrated on average spends by NZ farmers, so that, in terms of the High Court Decision, the Ministers could see which elements of the Shanghai-Penzing bid exceeded the norm.

Maurice Williamson advised in the official press release that:

“We have sought to apply the law in accordance with the provisions of the Overseas Investment Act and the guidance of the High Court. We have carefully considered the OIO’s new recommendation. The OIO sought advice from Crown Law and independent legal advice from David Goddard QC. The ministers also sought advice & clarification from Mr Goddard.
“We are satisfied that on even the most conservative approach this application meets the criteria set out in the act and is consistent with the High Court’s judgment.

No stone apparently left unturned…the original rejection must have been rather embarassing to the Government and, in particular, the Ministers involved.

If  it can pass muster under the stringent interpretation of conditions by the High Court decision, then it is hard to argue against, unless you are of the opinion that no land should be sold to foreigners ever.


About Ivan McIntosh

I am a partner of Carter Atmore Law...residing in City Road just off the busy thoroughfare of Symonds Street, Auckland, New Zealand....where we are specialist business & property development lawyers, working for both local and international clients. Proud husband to Joanna, and dad to two sons. Passionate rugby supporter. Email: Ph: 64 9 921 5026
This entry was posted in Business Law, Commercial Property, Constitutional Law, Farmland, Immigration Law, Politics, Property Law and tagged , , , , , . Bookmark the permalink.

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