It has now been a couple of weeks since we found out that the Overseas Investment Office was not being as thorough in its background character checks on investors as some might have wanted.
Every day, I’ve been scanning the newspaper headlines, waiting for the other shoe to drop. Surely if character tests were important, and they weren’t being undertaken, and investors of bad character were let through, we’d have had more than a few exposés by now.
I had expected to find out that high country estates had been carved out of Canterbury and Otago and shipped off to China. Or that a Russian oligarch had absconded with a sensitive wilderness area. Or that an American investor had set up a tuatara safari park, allowing rich hunters to stalk and shoot some of New Zealand’s most dangerous-looking wildlife.
But the newspapers have been quiet. And so I wonder what the point of the character tests really was.
It seems foreign investors’ character carries a lot more political risk than real world risk. In a classic episode of Canadian sketch comedy show Kids in the Hall, a politician accidentally choosing an ex-convict’s jam at an A&P contest winds up losing office over it. He later blames his advisor for not warning him about the tasty, but politically risky, jam. The jam was fine, but its maker’s character was politically risky.
New Zealand does not ban ex-convicts from making jam. But the Overseas Investment Office could well ban a foreign-based investor with a spotty background from investing in a jam plant because the Overseas Investment Act requires investors to pass a character test.
The character test has always been a bit of a puzzle. Immigration restrictions keeping out foreign criminals can make sense. And ensuring that foreigners meet the same standard as locals can also make sense. But just what an overseas investor might do with sensitive land that a Kiwi would not do, when both are subject to consenting requirements on land use, is something of a mystery.
It turns out that foreign investors were not able to skip town with a high country estate when character tests were not particularly thorough. Maybe we should take this as an opportunity to reconsider some of this red tape, rather than seek to enforce it ever more diligently.