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US Corporate Criminal Comes To NZ - Update

Recently we sent you material about the criminal record of American agribusiness transnational, Archer Daniels Midland (ADM), which has received Overseas Investment Commission (OIC) approval to be a 40% stakeholder in the joint venture (with a French company) which has bought the Canterbury Malting Co.

We also sent you a copy of the letter we sent to the OIC querying its decision to approve the "good character" of the people owning or exercising control of ADM. We have now received the OIC's decision.

And, guess what? The OIC doesn’t see anything to get worried about. Peter Hill, Assistant Secretary, replied (1/11/00):

“…I believe it does not raise any reasons for the Commission to reconsider our acceptance that the persons exercising control over International Malting Company LLC are of good character.

“The material you forwarded relates to offences that occurred prior to June 1995. The offences involved the bio products division of Archer Daniels Midland Company, not the malt or yeast products division, and the persons who were involved are no longer employed by (ADM).

“Please note that International Malting Company LLC owns International Malting Company New Zealand Limited, the acquirer of the Canterbury Malting Company business. The directors of International Malting Company New Zealand Limited are Geoffrey Peter O’Connor, Geoffrey Maccan, Maurice Lesaffre, and Patrick Lesaffre. The Commission has been advised that (ADM) exercises no control or influence over the directors.

“Thank you for bringing the matter to the Commission’s attention”.

Let’s briefly consider some of the reasons given by the OIC. We’re not sure what is the significance of the events “occurring before June 1995”. Appeals were still being resolved (and prison sentences increased) in September 2000. The Winebox Inquiry considered matters dating back to the 1980s; Dover Samuels lost his Cabinet post because of allegations dating back to the 80s and concealed offences dating back decades earlier; war criminals are still being actively sought and prosecuted for 1940s crimes against humanity. So that one is a bit of a puzzle. As is the reasoning that it involved the bio products division, not the malt or yeast division. Michael Andreas was the Executive Vice President, the son of the boss and heir apparent – the most senior management was in on this, not simply bosses from one division. It was the company that was fined $US100m, not one division. As far the persons concerned being no longer employed by ADM. No, because they’re in prison. Interesting reasoning. The OIC won’t do anything unless it’s proved in court. When it’s proved in court, the OIC will do nothing because those few bad apples are no longer in charge. It’s called turning a blind eye.

The fact of the matter is that NZ’s foreign investment law is, quite deliberately, extremely weak. The requirement that applicant investors be of good character is applied entirely in the breach, and is only applicable to the individuals owning or controlling the company, not to the character of the company itself. Even then, there is no limit to whom the OIC will approve – look no further than Tommy Suharto, the 1990s buyer of Lilybank. The OIC will go to any length to facilitate foreign investors – it sees its duty as being to them, not to the New Zealand people, nor even the Government. CAFCA has recently detailed the incredible lengths the OIC went to in seeking approval for all the prospective foreign buyers of Brierley’s stake in Sealord, despite the Ministry of Fisheries actually recommending to the Government that several of those buyers were not of good character. In every case, the OIC urged the Ministers of Finance and Fisheries to override those recommendations and accept the OIC’s word that the applicants were of good character. In the end the Government banned any offshore sale, but on the issue of national interest, not good character.

The point is, the OIC would approve anyone (maybe Slobodan Milosevic should come here, he’s probably got plenty of good old US dollars to invest). The Government needs to substantially tighten up the good character clause, give the OIC powers with real teeth to check out applicants, and if the present Commission won’t exercise those powers, then replace it with people who will. Alternatively, replace the Commission with a monkey with a rubber stamp – it could do the same job, and a damn sight cheaper.

Murray Horton Secretary/Organiser CAFCA Campaign Against Foreign Control of Aotearoa PO Box 2258, Christchurch email:

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