Investment laws ‘dodgy’

Rules fail to hold foreign firms to account: report

AUSTRALIA’S rules governing foreign investment failed to ensure overseas companies moving into Tasmania had lived up to their promises, a Parliamentary report has found.

As part of an inquiry into foreign investment the Senate Economic Reference Committee looked into three local transactions.

A Tasmanian senator says the findings raise his concerns about the takeover of Huon Aquaculture by Brazilian meat giant JBS.

When Chinese company Moon Lake Investments bought the Van Diemen’s Land Company in 2016 for $280m it made a series of guarantees including local equity participation, $100m in capital expenditure and the development of new farms and a processing facility.

But the promises were not delivered in full or in part.

The committee said it might not be a bad idea if there was some way of enforcing promises made to secure clearance from the Foreign Investment Review Board (FIRB).

“It is important there be some requirement of an investor to genuinely follow through on the proposed activities,” the report says. “There is a danger foreign investment proposals are or will come to resemble works of fiction, crafted to pass the test, but discarded at the convenience of the investor.”

Conditions were also placed on the acquisition of Bellamy’s

Australia by China Mengniu Dairy Company — although some were kept secret.

And the report cited a $185m land development proposal at Musselroe Bay was backed by money allegedly obtained through fraud.

Greens Senator Peter Whish Wilson said there were “serious flaws in Australia’s foreign investment approval process”, which he described as “dodgy”.

“FIRB approval laws have failed Tasmania and the national interest. They simply haven’t been worth the paper they are written on,’’ he said.

“A key problem with FIRB approvals is that they largely occur in the dark and at the discretion of the Treasurer.

“This lack of transparency has created a system that is intrinsically politically biased, where a government may extract from foreign investors an arrangement, free from public

scrutiny, that suits its politi cal ends rather than the national interest.

“The sale of VDL to Moon Lake Investments is a perfect example of the failure of our FIRB process: a foreign political donor to the Liberal Party awarded the sale of an iconic Tasmanian property over a local consortium on the back of hollow promises that were never fulfilled. With internationally disgraced meat packaging company JBS now eyeing off Huon Aquaculture it is vital our FIRB laws are sorted out as a matter of priority.”