Watchdog on foreign investments too much like a friendly pet?

Press, 3 September 1986, Page 17

Watchdog on foreign investments too much like a friendly pet?

By

GARRY ARTHUR

•‘Who watches the watchdog?”

That is the question being asked by the Campaign Against Foreign Control of Aotearoa (C.A.F.C.A.) about the Overseas Investment Commission, the body set up by Parliament to regulate foreign investment and foreign take-overs of New Zealand businesses.

This is the organisation which has just approved the entry of Ansett, with its New Zealand* partners, into the domestic airline business.

Try as it will — and it has been trying for 18 months — C.A.F.C.A. cannot get the 0.1. C. to release anything more than summary statistics about its work. Concerned about the rapidly rising tide of foreign investment in New Zealand, C.A.F.C.A. wants 0.1. C. to tell it — and the public — the broad details of all the applications it considers before it makes its decisions, so that people will know what is going on and have the chance to voice their opinions. But the 0.1. C. is an extremely secretive body, publishing no annual account of its activities — only occasional statistical summaries of applications received to start businesses or take over businesses, and the results.

The last such summary was seven years ago and showed that the commission approved the vast majority of all applications received.

C.A.F.C.A.’s initial request for a regular monthly account of details of all applications, and the outcome, was declined on several grounds — that the request was too general and not particular enough; that the 0.1. C. was not required under the Official Information Act to release information that might come to hand at some time in the future (only information actually in hand could be called “official”); and that the information in the commission’s possession was often supplied with a request for confidence.

“In all cases there is an implied undertaking by the Commission (and sometimes an exKpress one) that commercial C = material will not be released,” ’said the commission’s secretary 'at that time, Mr C. B. Rampton. “In addition, worth-while overseas investment brings sighi- ■ ficant benefits to New Zealand in

the form of employment, lower, prices, the introduction of new skills, import substitution, and exports. The public interest is best served if similar information to that which we have in hand, or information from the same source, should continue to be supplied. “It would not be in the public interest if worth-while investment proposals did not eventuate because the promoters were reluctant to proceed through fear that confidential commercial information could be released.”

Mr Rampton said the commission realised that some of the information in its possession was not confidential and could not be withheld under the Act — “but the difficulty is that we are unable to identify this material with certainty, even after close examination.” Much of the information requested, including details of company restructuring, applications by overseas companies to carry on business in New Zealand, take-overs, and the registration of new overseas-owned companies, was already publicly available, or soon would be, with the Registrar of Companies.

The commission’s final reason for declining the request was that identifying the relevant material would involve substantial collation and research. The charge would be quite substantial. “For example, we have recently released information relating to two files, and the costs incurred were $320 and $340 respectively," Mr Rampton added.

C.A.F.C.A. then complained to the Ombudsman, who investigated the matter and concluded that, although the amount of information currently prepared by the Commission for publication is “minimal,” it would be unreasonable for it to have to do

the substantial collation and research needed to meet C.A.F.C.A.’s requests. Mr Lester Castle, the Chief Ombudsman, said the commission had told him it would cost $39,000 a year to extract a full set of data along the lines requested. He noted that it was clear that the Official Information Act imposed no obligation on the commission to generate or to publish any information.

(Neither does the Overseas Investment Commission’s em-. powering Act, the Overseas Investment Act, 1973. It sets out the commission’s functions — including determining whether overseas investment proposals are in the national interest — but does not require the commission to report to Parliament, the Minister of Finance, or anyone else.)

Mr Castle >, said that after C.A.F.C.A.’s complaint, the commission agreed to consider the possibility of increasing the amount of information which it makes publicly available concerning its decisions.

But “... the commission has decided against increased publication, although the commission will continue to publish aggregated statistical information, and the secretary is to review the overseas investment data base in the hope that up-to-date statistics will become available on a more regular basis.” The Chief Ombudsman said he had suggested to the commission that it consider providing C.A.F.C.A. with broad details of each investment application, and leave it to C.A.F.C.A. to request further details of those applications in which it had a particular interest.

“Information concerning each application is, as I understand it, extracted and collated by the secretariat for consideration by the commission’s members, and although this form might not exactly fit your request, it could provide a basis on which it could be considered,” said the Chief Ombudsman.

C.A.F.C.A. took up this suggestion and asked the commission to send it that information on a

monthly basis. The present secretary of the commission, Mr L. M. Brackley, replied that summaries were not made for commission members in all cases — only when considered necessary to facilitate the consideration of a case by its members. “Therefore, the information requested by you is not in the readily accessible form of a summary. For this reason cost estimates for accessing information requested by you in this form will take into account the substantial collation involved.”

He added that C.A.F.C.A.’s amended request was still considered to be of a very general and non-specific nature, and did not meet the Official Information Act’s requirement of “due particularity.” Mr Brackley said that “there are undoubtedly ways of obtaining information, the nature and extent of which would be satisfactory to you, and the cost of which might well be very much

less than in the costings previously given to you.” Again C.A.F.C.A. complained to the Ombudsman, pointing out that it would not have had to approach the commission under the Official Information Act if the commission had produced a regular newsletter or bulletin, as is done by the Reserve Bank and the Statistics Department. The Ombudsman’s reply suggested that C.A.F.C.A. clarify to the commission its request for “details of all applications.” C.A.F.C.A. did so, saying it wanted to know the names, nationalities, value, and purpose of all applications, the number and type of shares involved, the sources of finance, and the commission’s decisions. It added that other Government departments published journals making public their work and decisions, and the commission should also do so as a matter of public duty. C.A.F.C.A. was prepared to pay the equivalent of a reasonable journal subscription for the information sought. The public had a right to know the facts sought in the application, C.A.F.C.A. said — “The very existence of an 0.1. C. act implies a special concern at the consequences of foreign investment. To be meaningful, this concern implies a right of the public to, at least, knowledge of proposals, and more to the point, a right to

comment on proposals before they become fait accompli," wrote its secretary, Murray Horton/

This seemed to cut no ice with the commission. It confirmed its earlier view that much of the information sought was protected in.the public interest, and for the preservation of personal (including company) privacy.

If it released information that caused damage, it could be sued for damages by the supplier of that information, added the secretary.

In exasperation, C.A.F.C.A. took a different tack, appealing instead to the Minister of Finance, Mr Douglas, because of his espousal of the virtues of economic deregulation. “Let’s have some publicly available basic deregulated economic information,” Murray Horton urged. Mr Douglas was a little help, but not much. He replied that he understood the commission was prepared to release to C.A.F.C.A. information detailing the number, type, and country of origin of the applications considered, together with the number of applications for which consent

had been given. Statistics only. “Difficulties arise, however, if your organisation requires specific details of particular cases considered by the commission,” Mr Douglas went on. “Much of the information held by it is supplied in confidence, and to release such details would breach that confidence and prejudice the supply of similar information in the future. It is my view that such confidences should be respected.” C.A.F.C.A. has not given up. It relies heavily on the Official Information Act to winkle something useful out of the 0.1. C. “Our purpose is to obtain timely information on the individual applications made to the Commission,” says Bill Rosenberg of C.A.F.C.A. in a recent letter to the Chief Ombudsman. “Without such information, purpose 4(a) of the Official Information Act cannot be satisfied. “Without such information, the ‘people of New Zealand’ cannot 'effectively participate in the administration di laws and policies’ — in this case, the laws and policies concerning the overseeing of foreign ownership of New Zealand assets.

“How can the public comment on (let alone participate in) such applications if they are not made public?" He says that mere summary statistics do not allow for accountability except at the most general level.

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