Posted on 7-9-2004
Powerco
Over Powerless
The Campaign Against Foreign Control of Aotearoa (CAFCA) declares
our full
support for the Concerned Ratepayers group in its attempt to
get the
Overseas Investment Commission (OIC) to block the sale of (Taranaki-based)
Powerco to Australia’s Prime Infrastucture. But we fear
that they may be
pushing the old proverbial uphill. The OIC exists to facilitate
foreign
investment, not to regulate it, and certainly not to restrict
or stop it.
The law it operates under has no teeth and the OIC has no intention
of
getting any dentures fitted. We urge that the Concerned Ratepayers
and
other likeminded Taranaki people demand that the Government
toughen up its
foreign investment regime.
It has recently reviewed the current law and announced its intention
to,
very soon, introduce a new law to liberalise that regime even
further.
Details of what is proposed can be found at:
http://canterbury.cyberplace.co.nz/community/CAFCA/OICReview3.pdf
They
include:
... It will abolish the Overseas Investment Commission and will
transfer
its functions to a specialist unit within Land Information New
Zealand
(LINZ)
... The threshold for official approval for transnational corporations
to buy NZ companies will be increased from the current $50 million
up
to $100m.
... The recommendations cite NZ's obligations under the General
Agreements
on Trade in Services (GATS) and the free trade agreement with
Singapore as
inhibiting NZ's ability to set restrictions on foreign investment.
The
dangers of these free trade agreements are made glaringly obvious.
... To add insult to injury, the Government plans - "to
keep costs to the
taxpayer down" - to let the foreign investors be responsible
for
post-consent compliance and monitoring.
The removal of the OIC is no great tragedy in itself. Its job
could be
done by a monkey with a rubber stamp. But its replacement agency
will see
a significant weakening of any oversight. By definition, LINZ
is
experienced with land. Company takeovers are where the foreign
investment
action is, totalling in the billions per year. There is no proposal
for
any new agency with any expertise in that field to be involved.
Raising
that threshold for company takeovers will remove all but the
biggest of
them from any scrutiny. And remember - until just days before
the 1999
election, the threshhold for company takeovers was just $10m
(an increase
of 1,000% in less than five years). We lose the right to control
foreign
investment. We can expect many more Powerco situations in future.
Now is
the time to tell the Government to tighten, not loosen, the
foreign
investment regime.
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