Foreign Control Warning

Professor Kelsey warns about loss of sovereignty

University of Auckland law professor Jane Kelsey is warning New Zealanders  the Government could sign deals  handing over sovereignty of our resources to foreign corporations.

Professor Kelsey says that if the Government had declined the Shanghai Pengxin purchase of Crafar farms in the North Island, it could have faced an international law suit for breaching its free trade agreement with China.

And, says  Professor Kelsey: ‘The US is demanding much stronger protections for its would-be investors in the Trans-Pacific Partnership Agreement (TPPA ) than China secured and the Key government has apparently rolled over and agreed to them, unlike Australia.

‘The popular angst being channelled towards the Chinese needs to become a more principled opposition to deals that sign the sovereignty of our resources over to foreign corporations and who can sue the government in offshore courts if they don’t get their way.’
Warning from Chinese politicians

Professor Kelsey says: ‘When China’s politicians warned New Zealand politicians last year that the agreement was a two-way street, it is clear they were referring to their rights as foreign investors under the so-called “trade” treaty.’

That view was reiterated in Shanghai Pengxin’s application to the Overseas Investment Office (OIO).

The New Zealand China Free Trade Agreement was signed in 2008. The government cannot treat applications from Chinese investors differently from other countries’ investors under what is known as the ‘most-favoured-nation’ or MFN rule.

Shanghai Pengxin’s application pointed to numerous purchases of farmland by investors of other nationalities, and claimed that rejection of its otherwise well-founded application would amount to anti-Chinese discrimination.

Prime Minister John Key admitted on Campbell Live last week that the Free Trade Agreement ‘has in it the most-favoured-nation status that means we can’t discriminate.’

‘Contradicts Investment Office Advice

That contradicts paragraph 62 of the Investment Office  advice to ministers that there is no problem under the China FTA in a paragraph that does not address the MFN rule.

‘Presumably the Prime Minister got alternative advice from elsewhere’, Professor Kelsey says. And she is urging the government to release those documents.

She adds: ‘The government would have pulled out all the stops to avoid a Chinese investor supported by the Chinese State taking it to international arbitration for breaching the FTA, even if it felt it was on strong legal ground.

‘Such a dispute would have huge ramifications for New Zealand’s diplomatic and economic relationship with China.

‘It would also cast a spotlight on the even greater risks of the more extensive foreign investor rights proposed for the Trans-Pacific Partnership Agreement (TPPA), a debate that the government is desperate to avoid.’