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Fletcher Challenge Reclassified As Foreign Company

FLETCHER CHALLENGE OFFICIALLY RECLASSIFIED AS FOREIGN COMPANY

The Overseas Investment Commission (OIC) maintains a list of companies that, although they are over the legal limit of 24.9% foreign shareholding, it exempts from being defined as foreign companies because they are “New Zealand controlled”, in the OIC’s opinion.

Fletcher Challenge Ltd (FCL) was a long time feature on this list. But Campaign Against Foreign Control of Aotearoa (CAFCA) has only recently discovered that, in an unpublicised move, the OIC reclassified FCL as a foreign company six months ago. FCL was removed from the exemption list by the Overseas Investment Exemption Amendment Notice 1999, which came into force on 16/7/99.

This continues the trend of more and more big New Zealand companies falling into foreign ownership (Brierley’s was the most high profile one to be previously reclassified by the OIC, in 1996). This reclassification of Fletcher Challenge means that, at the stroke of a pen, a huge chunk of the New Zealand economy is officially transferred to foreign ownership. When all four divisions of FCL are added together, it is the biggest company in the "Management" Top 200 1999 list (Fletcher Paper alone was number two on that list). FCL occupies a dominating place in paper production, building materials and construction, oil, gas and electricity production and distribution. It controls a significant part of NZ’s oil reserves. This decision means that we now have no NZ-owned petrol distributors: Challenge is now officially classified as foreign.

According to 1999 figures, FCL is the second largest owner of exotic plantation forests in NZ, with 288,000 hectares. This reclassification means that the five largest forest owners are now foreign-owned, and that nearly 60% of the country’s plantation forests are foreign-owned. Foreign purchasers of NZ rural land have to satisfy “national interest” criteria before being approved by the OIC. Did FCL meet these criteria when it was reclassified and became the foreign owner of hundreds of thousands of hectares of rural land?

The economic recolonisation continues at an increasing pace. We urge the Labour/Alliance government to give priority to rolling back New Zealand’s status as a mere branch office of transnational corporations. And we urge the media to stop calling Fletcher Challenge a New Zealand company. It isn’ t, and that’s official now.

Murray Horton Secretary/Organiser

Ph/fax (03) 3663988 day/night

CAFCA Campaign Against Foreign Control of Aotearoa PO Box 2258, Christchurch email: cafca@chch.planet.org.nz

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