The Crafar farms investment bid received a high level of media attention.
Ever since the first people started to arrive in our country we have relied on investment, in many forms, from overseas to grow and prosper. In the early days capital flowed freely to where it was needed. With changing economic winds, inward investments have grown and diversified. Some investments have benefited our country, others have benefited outsiders at our expense.
From the current level of media interest and discussion around foreign investment it is clear that New Zealand is at a tipping point.
To survive and thrive in the new global economy we need to settle on our point of difference and stand out. Some say this will be through innovation and technology, others think we are best focusing on our primary industries. Whichever way we go, we need significant capital from overseas, either to get our innovations off the ground, or to bring in others' to improve our local productivity.
Not all New Zealanders will like this but I believe we need more overseas investment to prosper and I'm sure most will agree that as long as those with capital are committed to our success, then everyone will benefit. After all, that is why people take the risk to invest - to receive a return.
The question for me, however, is are we well placed to ensure we get the investment we need in such a way as to protect our future?
As an international mergers and acquisitions lawyer I have worked closely with many parties through the Overseas Investment Office (OIO) process. There are numerous investments made into New Zealand every year; however, the one that has received most media attention was when Chinese corporation Shanghai Pengxin was granted consent to buy the financially troubled Crafar farms.
This consent was challenged on the basis that the OIO was deemed to have misinterpreted the need for Shanghai Pengxin to have specific experience relevant to the target business. The second element of the challenge, which is equally important for both foreign investors and New Zealand Inc, was around how to assess the local benefits brought by the investor.
On the first point, the High Court deemed that general business expertise and a wide range of business skills may be relevant to a particular investment and need not be confined to a specific industry. The Court decided that as the OIO identifies "business experience and acumen" that is "relevant to" the investment, different levels and types of experience could be accepted depending on the investment. On the second point, the Court demanded an assessment as to whether the investment would result in benefits for New Zealand, considering the situation "with and without" the overseas investment. This means the OIO now looks at the likely alternative overseas or local buyer while giving equal importance to economic, social and local development factors that may be brought by them.
As any business person will tell you, where an investment comes from makes no difference if the investor is of good character and can show it will bring benefits.
The important point here is also an obvious one; no outside investment is going to make it through our procedures if it does not also stack up for the investor.
My overseas clients tell me New Zealand remains a competitive place to invest. Though our procedures can look daunting, they help ensure quality investors and sound business practices and result in good partners for New Zealand.
Cathy Quinn is the Chair of Minter Ellison Rudd Watts, she leads the firm's China Practice and is a member of the executive board of the New Zealand China Council.