Green party co-leader Russel Norman is questioning the impartiality of the Overseas Investment Office after it met with Chinese diplomats over the Crafar farms deal.
The Government may have to change foreign investment laws after a bombshell High Court decision overturning the sale of Crafar farms.
The ruling by Justice Forrest Miller yesterday sent the decision back to officials for a rethink.
In its original decision endorsing the Shanghai Pengxin bid, the OIO stated it had consulted with the Beijing embassy and China's Ministry of Public Security.
It said this was necessary make sure information given by bidders Shanghai Pengxin was accurate.
Land and Information minister Maurice Williamson said officials from the Treasury and the OIO met with Chinese political consul Cheng Li on August 8 last year, but did not discuss the Crafar deal.
''The purpose of the meeting was to provide Mr Li with an understanding of New Zealand's overseas investment laws,'' he told Parliament this afternoon.
He said would have expected to have been informed if Chinese officials had raised a specific bid.
''But given the briefing was just on our general overseas investment regime, so the Chinese delegate could be well versed in it, there is simply no need to be briefing anybody.''
Norman is questioning if the meetings should have taken place. He says they weren't disclosed to Williamson.
"The problem actually isn't with the Chinese government because they are just doing what's in their best interests. The problem is with the New Zealand government which isn't doing what's in New Zealand's best interest," Norman said.
"The Overseas Investment Office's job is to provide the best advice for New Zealand, instead they are meeting secretly with the Chinese government officials and then presenting this advice which we find out in court is legally, factually, completely incorrect.
"I think that we have to ask the question about the impartiality of the Overseas Investment Office when they are secretly meeting with the Chinese government officials and not even notifying their minister."
He said the officials didn't follow protocol.
"The proper approach if you are a government agency and approached by a Chinese diplomat while you are dealing with an application from a Chinese company would be to tell your minister you had been approached and seek approval whether you can meet them or not. Instead they went ahead and met them."
The OIO's original approval was soundly struck down by Justice Miller's ruling it will now have to reconsider its earlier approval of the Shanghai Pengxin bid for the 16 Crafar farms. The ruling said it had "materially overstated" the economic benefits of the Chinese bid.
Norman believed the green light to Shanghai Pengxin was politically motivated, aimed at keeping the Chinese gGovernment happy.
He said that "behind-the-scenes lobbying" from Chinese officials was one of the reasons the Government approved the deal.
"To some degree it is a commercial deal but, in another sense, for the Chinese government [it is] quite an important marker of whether they can get ahead in New Zealand.
"It's not in New Zealand's interest to let buy China buy land. It is the goose that lays the golden egg, we should keep hold of the goose."
He went on: "In the judicial review hearings the OIO lawyer actually referred to the New Zealand-China Free Trade Agreement and advancing policy. That was referred to in the judgment - paragraph 59 - so actually they are tied up together.
"It is a commercial application but it is also very intimately linked into government policy."
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