This section contains information about the assessment of the likely benefit to New Zealand arising from the factor relating to increased processing of primary products.

Will the overseas investment result in, or is it likely to result in, the introduction into New Zealand of additional investment for development purposes (section 17(2)(a)(v))?

Key elements of this factor

There are four key elements to this factor:

  1. Processing of primary products must be likely to increase.
  2. The increased processing of primary products must occur in New Zealand.
  3. The increased processing must be of New Zealand’s primary products.
  4. The increased processing that is likely to result from the overseas investment must be additional to that which is likely to occur without the overseas investment.

New Zealand’s primary products

Primary products are natural raw materials that are “extracted” from the land or ocean. They include products of mining, agriculture, forestry and fisheries. Examples of primary products are:

  • logs;
  • fruit and vegetables;
  • fish and other seafood;
  • sheep and cattle; and
  • oil and gas.

New Zealand’s primary products are primary products extracted from the land or ocean within New Zealand and do not include products that have been imported into New Zealand.

Processing of primary products

"Processing" refers to the transformation of a primary product into a different product or the use of a primary product to make another product. Processing of a primary product will generally add value to the product.

Some examples of processing of primary products include:

  • transforming milk into butter;
  • transforming logs into timber or medium-density fibreboard (MDF); or
  • turning apples into apple juice or apple sauce.

Examples of activities that do not constitute processing of primary products include:

  • grading and packaging of products such as apples;
  • tending to crops in a field; or
  • harvesting of logs.

The increased processing must occur in New Zealand (this includes on board fishing vessels in the New Zealand Exclusive Economic Zone prior to export).

The increased processing may be carried out by another party (for example developing a new dairy farm may result in increased processing of milk products in New Zealand). The more direct the relationship between the overseas investment and the increase in processing, the more relevant this factor will be.

Making a claim

Provide the following information when making a claim under this factor:

  1. Method:
    How the overseas investment is likely to result in increased processing of New Zealand’s primary products.
  2. Primary products:
    Details of the primary products that are likely to be processed as a result of the overseas investment and the origin or source of these products.
  3. Processor:
    The identity or a description of the person who is likely to process the primary products.
  4. Amount:
    The amount of processing of New Zealand’s primary products that is likely to occur with the overseas investment (in dollar or volume terms).
  5. Location:
    Where the increased processing will occur.
  6. Timeframe:
    When the increase in processing of primary products is likely to occur. If the increased processing is likely to occur over a particular timeframe, specify the financial years over which the increased processing is likely to occur and the volume of increase in each of those financial years.
  7. Counterfactual:
    The amount of processing of primary products that is likely to occur in New Zealand without the overseas investment (using the same units as above).
  8. Uncertainties:
    Any preconditions that may prevent the increased processing of primary products (for example, resource consents).

This factor is of high relative importance for overseas investments in rural and forestry land (refer to the Ministerial Directive Letter).

Conditions of consent

All consents are granted subject to conditions. Consent conditions will generally require consent holders to deliver, and report on, the benefits claimed in their application. The OIO monitors all consents to ensure that conditions are complied with.

 

 

Last Updated: 4 December 2017