The Ministers may issue directive letters to provide guidance to the OIO on the Government’s general policy approach to overseas investment in New Zealand sensitive assets. The Directive Letter applies to all new and existing applications at 15 December 2017. The OIO is currently reviewing its existing applications to determine those which are affected by the Directive Letter.
In obtaining consent to acquire sensitive land, overseas investors must demonstrate that the investment will benefit New Zealand. The Directive Letter makes clear that certain benefit factors should be given higher importance than others for investments in rural land (except forest land). These include:
The previous directive letter issued by Honourable Bill English dated 8 December 2010 is revoked. It provided that investors acquiring large areas of farm land (i.e. a farm which has a size ten times the average farm size for the relevant farm type) were required to demonstrate that New Zealand’s economic interests will be adequately protected. The new Directive Letter applies more broadly to all rural land (except forests), rather than specifically to large farms.
Sponsorship of community projects and donations
The Directive Letter makes clear, as the OIO has indicated previously, that sponsorship of community projects and donations is to be given low relative importance in assessing benefit to New Zealand.
The Directive Letter states that the Government recognises that investment in the forestry sector has the potential to add value to the New Zealand economy and environment. It provides that factors of high relative importance for applications relating to acquisitions of forest land are:
We acknowledge the assistance of Brittany Montague, Solicitor, in writing this Newsflash.