While the general principles of our enforcement policy still underpin the work that we do, there are some additional considerations we will be taking into account due to the COVID-19 pandemic.
We use our strategic priorities to guide what matters we will investigate and how we carry out our enforcement work. They outline the factors the Overseas Investment Office (OIO) will consider when prioritising use of its resources and to in making sure its actions are targeted at the issues that present the greatest risk of harm to its purpose.
Our strategic priorities will not change in light of the COVID-19 pandemic. However, the circumstances may dictate a slightly different approach to the items listed at (b) and (d) which provide that we are likely to prioritise matters for investigation and enforcement action where we think:
“(b) a benefit that was an important factor in the decision to allow the investment has not been delivered” or
“(d) the breach involves an asset of particular significance to New Zealand and New Zealanders – for example, because it has high cultural, historic, social or environmental value or it represents a material part of the productive economy or of a particular industry or sector”.
We will still be prioritising these matters for investigation. However, in considering what enforcement action is most appropriate, we will be paying special attention to whether there are matters:
- affecting primary production or other essential services, and
- relevant to the re-bounding of the NZ economy e.g. the continuation of jobs, and secondary business relationships (contractors, supply chains etc).
When these circumstances arise, we will consider the impact any enforcement action might have on business continuity. Where it is feasible, we will make decisions that enable business continuity and ongoing employment. However, this will always be subject to our statutory purpose and our obligation to maintain our regulatory role.
Please see below for how our decision-making process will operate under this Policy.
1. Emergency Legislation
Some of our statutory provisions may be amended while Emergency Legislation is in place. This page will be updated with relevant links if that occurs.
Other emergency measures may also be relevant, including restrictions on termination of tenancies (which impact on Forestry standard conditions) and restrictions on international travel (which impact on Residential conditions).
2. Breaches of conditions
As a general rule, we will exercise leniency where there is a breach of a condition that relates directly or indirectly to impacts of the COVID-19 pandemic and the government’s response (e.g. inability to employ overseas seasonal workers or key construction unable to take place during lock down period).
Options we can consider include:
- Pausing or/deferring investigations where there are COVID-19 related reasons for the breach and resuming them at a later point. This could be suitable for situations where the breach relates to matters like outstanding walking access conditions or easement registrations which might be seen as lower priority in a time of reduced public movement/access.
- Notifying consent holders that we consider a breach has occurred, but advising that in light of the current environment, we will defer taking any action for a period of time to enable them to either comply or apply for a variation.
- Acknowledging there has been a breach but, in context (being COVID-19 and the additional burden that has created), it is of low consequence, and as the investor is still achieving key benefits, we will take no further action.
We acknowledge that breaches may occur due to longer term factors, such as the economic downturn. We will maintain discretion to consider one of the above strategies after the COVID 19 restrictions are lifted. In doing so we will adopt a principle of trying to ensure business continuity where it has identifiable public interest elements, such as preserving jobs, supporting local (NZ) businesses, contractors, and communities, where it is feasible to do so. In all cases our decisions will be underpinned by our strategic priorities and balanced against the need to ensure proper enforcement and maintenance of the law.
3. One Home to Live In 183-day requirement and other residency conditions in consent decisions
We recognise that under the One Home to Live in pathway it may be more difficult for people to fulfil the183 days in New Zealand requirement in the current environment. Where there have been genuine COVID-19 related reasons for this, the OIO may look to use its waiver power. A waiver policy is currently being developed.
Until this is confirmed, we will continue to triage cases, but will defer issuing notices for the moment.
We will also exercise leniency where there are COVID-19 related reasons impacting consent holders in other pathways from obtaining residency requirements.
4. Failure to obtain consent
During the pandemic, the OIO will continue to work with applicants to help facilitate the processing of applications.
The requirement to obtain consent remains important, particularly in circumstances when there are opportunities for malicious actors to maximise opportunities due to perceived weaknesses of takeover targets or the regulatory environment.
Having said that, it is possible that there may be more inadvertent breaches arising from (for example), difficulties in accessing specialist advisory services. These things can be considered on a case by case basis, bearing in mind the general principles outlined above, and in the underlying Enforcement Policy.
In circumstances where we see an application for retrospective consent as being a potential resolution, we will be reasonable in terms of giving timeframes for making such applications, and mindful of other pressures - especially in the provision of essential services, and to maintain business continuity where jobs are impacted etc. The period will depend upon what is reasonable in the circumstances but in the initial period, we would see 6 months as an appropriate starting point.
5. Section 41 Notices and other requests for information
In accordance with the principles outlined above, we will consider whether it is appropriate to be making a request for information now. If the matter is currently one we have identified as being of lower priority, then we will consider deferring our request until the restrictions are lifted.
We will also consider the type of enquiry we are making, and the capacity of the target of such request to be able to respond. We may need to adjust the timeframe or reconsider the form in which that information is held. For example:
- Some agencies will be at the forefront of the Government’s response to COVID-19 and may have limited capacity to respond. If this is the case, then a longer than usual timeframe may be considered (e.g. 3 months)
- Some information may only exist in physical form and may be difficult to access during restricted access to places of work – if this is the case, we will consider whether there are alternative ways of seeking the same or similar information.
In cases where a notice was issued prior to the lockdown, and there are difficulties meeting the original timeframe, we will consider requests for extensions. Recipients of notices should talk to the OIO staff member named in the notice. The staff member will then seek approval from the Manager, Enforcement and respond to the notice recipient as soon as possible.
6. Site Visits
Until further notice, the site visit programme is suspended.
At the time of writing there had been no relaxation of the limitation rules. We will continue (subject to any reassessment of priority arising out of the pandemic) to keep working on files that have been tagged as likely to require litigation so that they can briefed to counsel, and proceedings filed.
8. Recording extensions and other concessions given as a result of the COVID-19 interm Policy
We will be keeping a record of actions we are taking as part of the COVID-19 Enforcement Policy. This will enable us to ensure that we have the right information for reporting purposes, and to enable consistency in approach across the office. For example, any changes to condition timeframes will need to be properly documented so that the Monitoring Team can factor that in to their work.
9. Media Releases
We will not be putting out any pro-active media releases during the lockdown. However, given the importance of transparency, we will continue to publish enforcement outcomes on our website.
Given the evolving nature of the COVID-19 situation, this document is subject to change and may be updated without notice. Please ensure you refer to the most recent version.
While all breaches of the Rules are important to us, we cannot take every case or pursue every breach of the Rules. Nor would it be in the public interest for us to do so. We have therefore identified 8 strategic priorities to guide what and how we carry out our enforcement work. These priority areas are important as they impact on public confidence in the overseas investment process.
We are likely to prioritise matters for investigation and enforcement action where we think:
- the overseas person has acquired a sensitive New Zealand asset without consent
- a benefit that was an important factor in the decision to allow the investment has not been delivered
- a person has deliberately or recklessly broken the Rules, or has tried to disguise their behaviour
- the breach involves an asset of particular significance to New Zealand and New Zealanders – for example, because it has high cultural, historic, social or environmental value or it represents a material part of the productive economy or of a particular industry or sector
- an investment made without consent would not have been approved if the person had applied
- an overseas person has made, or will make, a significant gain from an asset acquired in breach (property speculation and land-banking do not benefit New Zealand)
- where the Rules or conditions have been broken and the investor’s conduct creates public harm, indicating that they are not fit to hold the asset- this might be because the person has breached environmental or animal welfare laws and these are relevant to the type of investment they hold
- the person has provided us with information that turns out not to be accurate or complete in a material way.
This list of strategic priorities is not exhaustive and we may change it at any time.