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Westland Milk sale judicial review not successful - Chris Leitch

Fuseworks Media
Fuseworks Media

The High Court judgment on Social Credit’s judicial review of last year’s Overseas Investment Office decision to approve the sale of Westland Milk Products to Hong Kong Jingang, a company wholly owned by Chinese conglomerate Inner Mongolian Yili, which is itself partly owned by the Chinese government, has been released.

The case was heard before Justice Dobson in early September. His Honour rejected Social Credit’s four grounds of challenge to the Overseas Investment Office decision.

The judicial review challenged the basis on which the Overseas Investment Office made its decision last year to approve the sale.

"Given the role of OIO as the ‘gatekeeper’ to acquisition of New Zealand assets by overseas entities, our aim was to ensure that it applies the proper legal test, that it has sufficient information to determine which test should be applied to a particular application for consent, and that all necessary matters are taken into consideration when it assesses applications."

"Our view was that the OIO failed to properly take all necessary matters into consideration when it consented to the Westland Milk takeover, hence our application for a judicial review."

"We contended that, in the context of a dairy farming operation, "agricultural purposes" under the Act extends to both the milking of the cows and the necessary processing of their milk so that the privilege of overseas persons acquiring sensitive New Zealand dairy assets is tested in appropriately wide circumstances. "

"Therefore the link between the production of milk and its immediate processing into saleable forms requires all land used for both aspects of that process to be treated as being used for agricultural purposes, and therefore sensitive under the Act. "

"The basis for dismissing our four grounds of challenge came down to whether land primarily used for agricultural purposes should be understood as limited to the dairy farm or should include the land used to house the milk processing facilities." "The Court decided that the narrower interpretation applied rather than wider view which we advanced."

"As Westland Milk was already an efficient processor with good export markets and wide ownership of New Zealand farmers through its cooperative structure, we don’t think the benefits of the sale were ‘genuinely substantial and identifiable’."

However, if, as this decision would indicate, the Overseas Investment Office has the power to approve the sale of New Zealand’s second largest dairy processor to an overseas company without applying the benefit to New Zealand test to the assets involved in that sale, then the legislation is woefully inadequate."

"We are considering all our options following the High Court judgment."

Social Credit has a long standing policy of opposing foreign takeover of land and businesses by overseas buyers and would seek to reinstate New Zealand ownership of strategic assets.

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