Decision-making

Despite all the rhetoric about the withdrawal of the state in neoliberal capitalism, state actors and modes of regulation continue to play a major role in the expansion of global investment chains. Institutional landscapes emerge from the capital-state nexus. The state and its associated institutions still act as the major clearing house for capital. The state should hereby not be imagined as a homogeneous enabler for foreign capital, but rather as a contested terrain of a multiscalar land rush regime. Investors and public pressure alike play a role in this terrain. Additionally, it is a political choice whether or not to make these flows of money public and visible. Many states around the world have decided not to allow the public to make foreign investment flows into strategic sectors of the economy visible. Interestingly, Aotearoa New Zealand, “a country built on foreign capital” (as many of my interviewees would say), has been a major exception.

(Ouma 2020: 90f.)

A central role in the regulation in Aotearoa New Zealand is taken by the Overseas Investment Office (OIO). Established via the Overseas Investment Act of 2005, it approves or declines all foreign investors in the country. As you can explore here, it provides data about those decisions that we can use as an empirical entry point for capturing the state’s role in the forming of institutional landscapes.

The OIO does not cover every land purchase but scrutinizes especially the purchase of so-called sensitive New Zealand assets, which means sensitive land, significant business assets valued at more than NZD$100 million as well as a fishing quota.

(Ouma 2020: 73)

So how does the OIO make its decisions? Two factors must be considered when scrutinizing the gate-keeping operations of the OIO:

• It has changed the format of how its decisions are being published several times over the years and sometimes withheld individual data items that became available at a later time (Klinge 2020: 4). In the same vein, investors might ask for data to be removed from the base.
• Since the adoption of the Overseas Investment Act in 2005, there have been 14 renewed versions of the Act, including 12 amendments incorporated in these versions (status as of April 2021).

Key facts of the Overseas Investment Act (2005, reprinted as of 1 December 2020):

• Regardless of the type of land, the investor test must be met (section 16 1a).
• This test must show that the overseas investment will benefit New Zealand (section 16A 1a); this test is also met when the acquired land will be used nearly exclusively for forestry activities (section 16A 4a).
• The factors for assessing the benefits of overseas investments in sensitive land are the following (section 17 2 a-g):
  • • The targeted investment will result in job opportunities, new technology or business skills, more market competition, higher productivity of enhanced domestic services, more primary products being processed within the country.
    • The investor provides adequate mechanisms to protect vegetation and fauna, conserve wildlife areas, provide public walking access and protect historic heritage.
    • Parts of the aspired land that are special land (foreshore, seabed, bed of a river or lake) can be offered to the Crown.
• Furthermore, if significant business assets are to be acquired, the overseas person is obliged to demonstrate (18 1 a-e):
  • • Relevant business experience to that investment.
    • Financial commitment to the investment.
    • His/her/their good character (thus has not committed any offences or contraventions of the law, 19 1a).
    • Entry permission/eligibility for visa.
• Transactions of national interest need furthermore the Minister’s consent (in the earlier days this included the Minister of Finance, but later joined by the Minister of Land Information).