As Land Information Minister I and the Associate Finance Minister are sometimes required to decide whether or not overseas persons, including overseas owned companies, can buy areas of rural land in New Zealand of more than five hectares.
The law which guides our decisions is the Overseas Investment Act 2005. It defines what New Zealand land is “sensitive” so that an overseas person must get the consent of the Overseas Investment Office (OIO) or Ministers before purchase. Section 16 of the Act sets out the criteria the OIO Ministers must take into account in considering such applications and section 17 sets out the factors to consider in deciding how and whether overseas person buying land here benefits New Zealand.
I and Associate Finance Minister David Clark recently agreed to an application by Chinese-owned company, Cresswell NZ Ltd to buy 6.2 ha of sensitive land near Whakatane in the Bay of Plenty. The site includes the existing Otakiri Springs water bottling plant.
Creswell NZ Ltd is wholly owned by Nongfu Spring Ltd, one of China’s leading bottled water suppliers. The company intends to invest over $42.5 million over the next four years to upgrade and expand the existing bottling plant and add two new bottling lines.
Some people might wonder why a Green MP who is a Minister has allowed such a land purchase involving a water bottling plant to go ahead.
Basically the law is clear about what Ministers can and cannot take into account. We had to consider “substantial and identifiable” benefits to New Zealand. That’s jobs, exports, greater productivity and additional capital investment for the country. The investment will result in the current eight jobs at the plant increasing significantly. There will be 32 full time jobs over two years reaching 60 new full-time jobs over four years once the expanded plant is fully operational.
Minister Clark and I made the consent conditional on Cresswell NZ Ltd delivering those promised jobs in an area which needs new employment. If they don’t eventuate the OIO can take enforcement action which includes the possibility of requiring the company to sell the investment. Budget 2018 provided the OIO with an extra $7 million in funding for its compliance and enforcement work.
The purchase of the land and bottling plant at Otakiri Springs is conditional on the company getting the water takes and other resource consents it needs from the Bay of Plenty Regional Council and the Whakatane District Council. If the regional council declines the company’s applications for an increased groundwater take, the company will not be able to buy the land.
The company has indicated that it would be willing to pay any water royalties that may be imposed in future if the law is changed.