COROMANDEL WATCHDOG OF HAURAKI (INCORPORATED) v MINISTER OF FINANCE AND ASSOCIATE MINISTER OF FINANCE [2020] NZHC 2345

COROMANDEL WATCHDOG OF HAURAKI (INCORPORATED) v MINISTER OF FINANCE ANDASSOCIATE MINISTER OF FINANCE [2020] NZHC 2345 [9 September 2020]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2020-404-0138[2020] NZHC 2345UNDER the Judicial Procedure Act 2016IN THE MATTER of the Overseas Investment Act 2005BETWEEN COROMANDEL WATCHDOG OFHAURAKI (INCORPORATED)ApplicantAND MINISTER OF FINANCE ANDASSOCIATE MINISTER OF FINANCEFirst RespondentsOCEANA GOLD (NEW ZEALAND)LIMITEDSecond RespondentHearing: 8 and 9 June 2020Appearances: B O'Callahan, R B Enright and H Z L Krebs for ApplicantJ B M Smith QC, K Anderson and K G Stephen for FirstRespondentsJ E Hodder QC, S V McKechnie and F J Thorp for SecondRespondentJudgment: 9 September 2020JUDGMENT OF CLARK JIntroduction[1] Overseas investment in sensitive New Zealand assets requires prior consentunder the Overseas Investment Act 2005 (the Act).1[2] One of the criteria to be met before consent for an overseas investment insensitive land is given is that the overseas investment will, or is likely to, benefitNew Zealand. In October 2019 the Minister of Finance and Associate Minister ofFinance (the Ministers) each consented to Oceana Gold's application to acquire threeparcels of rural land totalling approximately 178 hectares near Waihi.[3] Coromandel Watchdog of Hauraki (Incorporated) (the Society) challenges thedecision on the broad ground that Ministers assessed the "benefit to New Zealand"without having regard to the detrimental effects associated with Oceana Gold'sacquisition of rural land for a tailings dam. The issue at the heart of the Society'schallenge is whether, in assessing benefit to New Zealand, the relevant Ministers musthave regard to detrimental effects as well as the benefits of the proposed investment.Statutory framework[4] I turn immediately to the legislative framework because the relevant facts aremore readily understood against the legislative backdrop.Purpose[5] The purpose of the Act is set out at s 3:(1) The purpose of this Act is to acknowledge that it is a privilege foroverseas persons to own or control sensitive New Zealand assets by—(a) requiring overseas investments in those assets, before being made, tomeet criteria for consent; and1 The Act was amended in 2018 by the Overseas Investment Amendment Act 2018. In particular,the very provisions with which this proceeding is concerned, namely those governing the criteriafor consent and the factors which Ministers must consider in assessing benefit, were amended.Pursuant to sch 1AA, however, the amendments made by the 2018 Amendment Act apply only totransactions entered into on or after its commencement. In this case the relevant transactions wereentered into before the 2018 Amendment Act and therefore the pre-amended Act applies. Therewas no dispute about this point.(b) imposing conditions on those overseas investments.Consent regime[6] A transaction requires consent under the Act if the transaction results in anoverseas investment in sensitive land or in significant business assets.2 An overseasinvestment in sensitive land is the acquisition by an overseas person, or an associateof an overseas person, of (relevantly) land that is sensitive under pt 1 of sch 1.3 In thiscase, the land is sensitive because it is non-urban land exceeding the threshold of fivehectares.4Criteria for consent[7] In considering whether or not to grant consent to an overseas investmenttransaction Ministers "must have regard to only the criteria and factors that apply tothe relevant category of overseas investment".5 Ministers must grant consent ifsatisfied that all of the criteria in ss 16 or 18 (as the case may be) are met and mustdecline to grant consent if not satisfied that all of the criteria are met.[8] The criteria for consent are all of the criteria in s 16 which provides:16 Criteria for consent for overseas investments in sensitive land(1) The criteria for an overseas investment in sensitive land are allof the following:(a) the relevant overseas person has, or (if that person isnot an individual) the individuals with control of therelevant overseas person collectively have, businessexperience and acumen relevant to that overseasinvestment:(b) the relevant overseas person has demonstratedfinancial commitment to the overseas investment:(c) the relevant overseas person is, or (if that person isnot an individual) all the individuals with control ofthe relevant overseas person are, of good character:2 Section 10(1).3 Section 12.4 Schedule 1, pt 1.5 Section 14(1)(a).(d) the relevant overseas person is not, or (if that personis not an individual) each individual with control ofthe relevant overseas person is not, an individual of akind referred to in section 15 or 16 of the ImmigrationAct 2009 (which sections list certain persons noteligible for visas or entry permission under that Act):(e) either subparagraph (i) is met or subparagraph (ii) and(if applicable) subparagraph (iii) are met:(i) the relevant overseas person is, or (if that personis not an individual) all the individuals withcontrol of the relevant overseas person are,New Zealand citizens, ordinarily resident inNew Zealand, or intending to reside inNew Zealand indefinitely:(ii) the overseas investment will, or is likely to,benefit New Zealand (or any part of it or groupof New Zealanders), as determined by therelevant Ministers under section 17:(iii) if the relevant land includes non-urban land that,in area (either alone or together with anyassociated land) exceeds 5 hectares, the relevantMinisters determine that that benefit will be, oris likely to be, substantial and identifiable:[9] The criteria in subs (a)–(d) are colloquially referred to as the "investor test".The Society does not challenge the Ministers' decision that these criteria were met. Inthis proceeding, s 16(1)(e)(ii) applies. Where s 16(1)(e)(ii) applies Ministers mustconsider all the factors in s 17(2):17 Factors for assessing benefit of overseas investments in sensitiveland(1) If section 16(1)(e)(ii) applies, the relevant Ministers—(a) must consider all the factors in subsection (2) to determinewhich factor or factors (or parts of them) are relevant to theoverseas investment; and(b) must determine whether the criteria in section 16(1)(e)(ii) and(iii) are met after having regard to those relevant factors; and(c) may, in doing so, determine the relative importance to begiven to each relevant factor (or part).(2) The factors are the following:(a) whether the overseas investment will, or is likely to, resultin—(i) the creation of new job opportunities in New Zealandor the retention of existing jobs in New Zealand thatwould or might otherwise be lost; or(ii) the introduction into New Zealand of new technologyor business skills; or(iii) increased export receipts for New Zealand exporters;or(iv) added market competition, greater efficiency orproductivity, or enhanced domestic services, inNew Zealand; or(v) the introduction into New Zealand of additionalinvestment for development purposes; or(vi) increased processing in New Zealand of NewZealand's primary products:(b) whether there are or will be adequate mechanisms in place forprotecting or enhancing existing areas of significantindigenous vegetation and significant habitats of indigenousfauna, for example, any 1 or more of the following:(i) conditions as to pest control, fencing, fire control,erosion control, or riparian planting:(ii) covenants over the land:(c) whether there are or will be adequate mechanisms in placefor—(i) protecting or enhancing existing areas of significanthabitats or trout, salmon, wildlife protected undersection 3 of the Wildlife Act 1953, and game asdefined in sections 2(1) of that Act (for example, any1 or more of the mechanisms referred to in paragraph(b)(i) and (ii)); and(ii) providing, protecting, or improving walking access tothose habitats by the public or any section of thepublic:(d) whether there are or will be adequate mechanisms in place forprotecting or enhancing historic heritage within the relevantland, for example, any 1 or more of the following:(i) conditions for conservation (including maintenanceand restoration) and access:(ii) agreement to support the entry on the New ZealandHeritage List/ Rārangi Kōrero of any historic place,historic area, wahi tapu, or wahi tapu area under theHeritage New Zealand Pouhere Taonga Act 2014:(iii) agreement to execute a heritage covenant:(iv) compliance with existing covenants:(e) whether there are or will be adequate mechanisms in place forproviding, protecting, or improving walking access over therelevant land or a relevant part of that land by the public orany section of the public:(f) if the relevant land is or includes foreshore, seabed, or a bedof a river or lake, whether that foreshore, seabed, riverbed, orlakebed has been offered to the Crown in accordance withregulations:(g) any other factors set out in regulations.[10] The "other factors" referred to in s 17(2)(g) (for assessing whether an overseasinvestment in sensitive land will, or is likely to, benefit New Zealand6) are set out inreg 28 of the Overseas Investment Regulations 2005 (the Regulations). Of particularrelevance to the Society's case is reg 28(f):28 Other factors for assessing benefit of overseas investment insensitive landThe other factors that are referred to in section 17(2)(g) of the Act forassessing whether an overseas investment in sensitive land will, or islikely to, benefit New Zealand are as follows:(f) whether the overseas investment will, or is likely to, giveeffect to or advance a significant Government policy orstrategy.[11] Section 24 specifies which Ministers must decide particular applications.Oceana Gold's application involved a land decision. Therefore, its application was tobe decided by the Ministers of Finance and the Minister for Land Information.7 In thiscase the Hon David Parker exercised the decision-making role of the Minister for Land6 Reflecting the test in s 16(1)(e)(ii).7 See s 12 and definitions of "land decision" and "relevant Minister or Ministers" in s 6, theinterpretation provision.Information following a transfer of her responsibility under s 7 of the Constitution Act1986.[12] A consent under the Act may be refused or granted in whole or in part,retrospectively, unconditionally "or subject to the conditions that the relevant Ministeror Ministers think appropriate".8[13] Under s 34 the Minister of Finance may direct the regulator by a "Ministerialdirective letter" about a number of matters including:9(a) the Government's general policy approach to overseas investment insensitive New Zealand assets, including the relative importance ofdifferent criteria or factors in relation to particular assets.Oceana Gold's applications for consent[14] Oceana Gold's applications for consent total approximately 1000 pages. Thefollowing description of its purpose in making the applications is, necessarily, broad-brush and is taken from the assessment report prepared for the Ministers by theOverseas Investment Office (OIO).10[15] Oceana Gold is a fully owned subsidiary of Oceana Gold Corporation, aCanadian gold mining company. Oceana Gold owns and operates mines inNew Zealand. Its applications relate to its mining activities at its Waihi mine site.Specifically, the applications are for consent to acquire three areas of farm landtotalling 178 ha outside Waihi. The areas would not be mined but are to enable thedevelopment of a new tailings pond.118 Section 25(1).9 Section 34(3)(a).10 Oceana Gold's two applications, dated 13 and 14 August 2019, were assessed in a singleassessment report prepared by the OIO for Ministers.11 Tailings are the material remaining once gold has been extracted from ore. Tailings generated bymining activity may contain traces of chemicals and must therefore be kept in secure ponds in ageologically stable area to avoid contamination of ground water. The acquisition and placementof tailings storage ponds is an important consideration in any mining expansion because they mustbe safely disposed of to protect the surrounding environment. Safe disposal of tailings is a keyissue in any mine expansion and must be addressed at the outset. Where there is no workablesolution to the issue of safe disposal of tailings, the viability of all stages of the mining expansionis put in doubt.[16] No suitable locations for additional tailing storage exist on the land OceanaGold holds in and around the Waihi mines as part of its existing operations. Itsproposed tailings storage facility necessitated the acquisition of more land.[17] The land in respect of which Oceana Gold seeks consents is said to be essentialfor its plans to extend the commercial life of the mines for a further nine years duringwhich time Oceana Gold expects to employ some 340 'full-time equivalent' staff andgenerate export receipts of approximately $2 billion.Ministers' decisions[18] Oceana Gold's application was actually declined in May 2019 by the Ministerfor Land Information, the Hon Eugenie Sage. The Minister of Finance approved theapplication but Ms Sage did not. Oceana Gold commenced judicial reviewproceedings. The proceedings were resolved and Oceana Gold submitted a second setof applications. Under the Act such applications must be decided by the Ministerresponsible for the administration of the Act.[19] Both Ministers12 decided to grant consent to the investment on the basis theywere satisfied the criteria for consent in s 16 were met and the overseas investmentwould, or was likely to, benefit New Zealand (or any part of it or group ofNew Zealanders) and the benefit would be, or was likely to be, substantial andidentifiable.[20] The consent is in tabular form setting out first the total number of hectares andthe timeframes within with the purchases of particular parcels of land are to becompleted. In addition to standard conditions, special conditions were imposed withtimeframes within which the condition is required to be met. For example, allapplications for consent under the Resource Management Act 1991 affecting theconstruction of the tailings pond on the land are to be lodged with the appropriateconsent authority by 31 December 2021.[21] The following statement heads the table of conditions:12 See above at [11].Special ConditionsYou must comply with the following special conditions. These applyspecifically to this Consent and were considerations that particularlyinfluenced us to give consent.[22] The Ministers' decisions themselves did not contain any further reasoningbeyond that they were each satisfied the necessary statutory conditions had been met.The Ministers were, however, provided with the substantial assessment reportprepared by the OIO. In accordance with the test formulated by the High Court inTiroa E and Tehape B Trusts v Chief Executive of Land (to which I return) the OIO'sanalysis considered a counterfactual in relation to each relevant statutory factor.13 Thatis, the OIO considered what would be likely to happen without the investment. Theimportant point that emerges from Tiroa is that when Ministers consider the factors ins 17(2)(a), the Act requires that they do so by assessing what would happen 'with andwithout' the overseas investment they are being asked to approve rather than applyinga 'before and after' test.14 In this case the OIO considered the most likelycounterfactual was the status quo, that is, the land would continue to be owned by thecurrent vendors.[23] In its assessment overview the OIO assessed as either 'strong', 'moderate', or'weak' the relative strengths of each of the s 17(2) and reg 28 factors against thecounterfactual, that is, the position without the investment.[24] The OIO concluded that Oceana Gold met the benefits test: when examinedtogether the benefits of the investment were likely to be substantial and identifiabletaking into account the size and nature of the land to be acquired.[25] In reaching their decisions Ministers accepted the OIO's recommendation togrant consent subject to Oceana Gold complying with specified conditions.1513 Tiroa E and Tehape B Trusts v Chief Executive of Land [2012] NZHC 147, (2012) 10 NZBLC 99-703.14 At [35] and [44].15 One of the OIO's statutory functions is to consider applications and advise Ministers as to howthe application should be determined: Overseas Investment Act, s 31(a).The application for judicial review: parties' respective positionsApplicant's position[26] The Society maintains that the Ministers assessed benefits without havingregard to detrimental effects attaching to Oceana Gold's application and engaged in alimited evaluation of the economic benefits and disbenefits of the proposal. TheSociety believes environmental impacts are to be considered as part of a "holisticassessment" of the benefits and disbenefits of overseas investment in sensitive land.In the Society's view, given the current situation and policy direction of the presentgovernment, the considerations must include climate change.[27] The Society has a 40 year history of advocacy towards protecting theenvironment in the Hauraki/Coromandel region. Catherine Delahunty, a member ofthe Society, filed affidavits in support of the application for judicial review. TheSociety is said to be concerned that Ministers: did not consider relevant environment risks of soil contamination ortailings dump collapse, long term economic costs to the region and the waythe proposal will contribute to increased greenhouse gas emissions during acritical time period for emission reduction if Government targets are to be met.[28] Ms Delahunty deposed to the Society's belief that:(a) The creation of a new toxic waste dump to store waste from proposednew mining activity will inevitably result in increases in greenhousegas emissions from those activities.(b) 178 hectares of productive land will be contaminated in perpetuity bywaste from gold mining activities which includes large quantities oftoxic heavy metals such as arsenic, mercury, zinc, cadmium, lead,copper and cobalt.[29] Approximately 15 hectares of native vegetation on part of the land, being anunprotected terrestrial ecosystem with regional significance, forms part of a significantnatural area under the Hauraki District Plan. Construction of the proposed tailingsdam would result in removal of approximately 5 hectares of this land.[30] The Society pleads that, in assessing the benefit to New Zealand by referenceto the factors set out in s 17(2) of the Act and reg 28 of the Regulations, the Ministerstook an approach that assessed actual or likely benefits to New Zealand withoutweighing them against actual or likely detriments to New Zealand. For example,detrimental effects would be relevant to meeting the target for emissions reduction setout in s 5Q of the Climate Change Response Act 2002. The Society also pleads thatdetrimental effects would be relevant to a consideration of whether there are adequatemechanisms in place for protecting or enhancing significant areas of indigenousvegetation or protecting or enhancing the land.[31] On the Society's case detrimental effects are also relevant to whetherNew Zealand's key economic capacity would be improved and whether the proposedacquisition concerned activities that are environmentally sustainable and are likely tocreate positive and long-lasting environmental benefits and provide economic,environmental, social and cultural benefits.[32] The Society seeks orders setting aside the decisions and requiringreconsideration of the applications in light of the Court's findings.First respondents' position[33] The position of the first respondents, the Minister of Finance and AssociateMinister of Finance, is that the Act does not permit a holistic assessment of the likelyeffects of an overseas investment. In deciding whether an overseas investment willlikely be of "benefit to New Zealand", decision-makers can only consider the factorsin s 17(2) of the Act and in reg 28. The Crown says the statutory factors are "positivelyfocused on possible benefits of an overseas investment and not potential detrimentaleffects".Second respondent's position[34] Oceana Gold submits the applicant's case is profoundly flawed in that itmisunderstands the purposes of the Act and the test to be applied. In determiningwhether an investment is both likely to benefit New Zealand and that the benefits are"substantial and identifiable" Ministers are not engaged in a weighing exercise but athreshold exercise. In particular, concerns beyond the focus of the Act are not relevantto a decision under the Act because whether the concerns are employment, orenvironmental, they will be addressed within the domestic legal framework.Discussion[35] The Society says the Ministers erred in law by either applying the wrong legaltest or by failing to consider the adverse effects arising from Oceana Gold's proposedacquisition. Those detriments include the effects of climate change, the inherentunsustainability of extractive mining processes, and the permanent conversion ofproductive land to a toxic waste dump.[36] In support of the Society's contention that the Ministers assessed benefitwithout having regard to "one mandatory half of the equation — namely thedetrimental effects attaching to Oceana Gold's acquisition of rural land for a tailingsdam (and related mining purposes)", Mr O'Callahan helpfully surveyed the legislativehistory and predecessor legislation.16[37] In short, Mr O'Callahan sought to demonstrate that there has been nolegislative intention to abandon what he described as a "previous overall judgmentapproach" whereby an overall net approach was taken to determining overseasinvestment applications.[38] The Society's key point is that the assessment of whether an investment is ofbenefit to New Zealand, one that is substantial and identifiable, necessarily involves abroad judgment at a high policy level; an assessment of the pros and cons of anoverseas investment in terms of the s 17 factors. A failure to assess the disbenefits, orto discount them as irrelevant "creates a false overall assessment of the benefit toNew Zealand". Mr O'Callahan added it would be strange if a test that required anassessment of benefit to New Zealand was to be performed by omitting to balancebenefits against detriments, particularly in the context of an Act designed to protectsensitive New Zealand assets from foreign investments that do not benefitNew Zealand.16 Land Settlement Promotion and Land Acquisition Act 1968 and the Overseas Investment Act1973.[39] The Society is essentially asking the Court to read into the Act a mandatoryrelevant consideration, namely the potential detriments of an overseas investment. Iam unable to accept the Society's position because it is unsupported by the Act itself.[40] The consent and conditions regime in Part 2 of the Act is not only clear butunusually prescriptive. The nature of the (mandatory) criteria in s 16, and the natureof the (mandatory) factors in s 17, require of the relevant Ministers an identificationof benefits. The criteria and with one exception, the factors, are, as Mr Smith QC putit, exclusively focussed on the possible benefits of an overseas investment.17 There isno reference to detriments or anything of that kind.[41] In a sense the Society's case is redolent of the plaintiffs' claim in CREEDNZInc v Governor-General.18 In CREEDNZ the plaintiffs alleged a wide range of factorswere relevant to whether works proposed to be carried out in relation to an aluminiumsmelter were in the national interest.19 The plaintiffs adduced a body of evidencedrawing on the expertise of economists and academics involved in project evaluationstudies, particularly those involving significant production or consumption of energy.The plaintiffs were aiming to prove certain pleaded contentions, for example, that thenet economic effects of the proposed works was that the people of New Zealand wouldsuffer a "minimum absolute loss of $43 million per annum"; that the cost of creatingpermanent jobs in the economy was so great it was economically unjustifiable and amisuse of resources; and that the effect of the works on the New Zealand economywould be to accelerate inflation contrary to the national interest — to describe butthree of the plaintiffs' seven asserted relevant considerations. The plaintiffs then askedthe Court to infer that these considerations could not have been taken into accountbecause if they had been Ministers could not have concluded the proposed works werein the national interest.[42] Cooke J addressed the plaintiffs' claim that relevant matters were notconsidered:2017 The factor in reg 28(c) of the Regulations focuses on whether refusing consent will, or is likely to"adversely affect New Zealand's image overseas " or result in New Zealand breaching any ofits international obligations.18 CREEDNZ Inc v Governor-General [1981] 1 NZLR 172 (CA).19 At 180.20 At 183.What has to be emphasised is that it is only when the statute expressly orimpliedly identifies considerations required to be taken into account by theauthority as a matter of legal obligation that the Court holds a decision invalidon the ground now invoked. It is not enough that a consideration is one thatmay properly be taken into account, nor even that it is one which many people,including the Court itself, would have taken into account if they had to makethe decision.[43] Similarly, the Society in this case must demonstrate that the matters which itsays Ministers failed to consider, were mandatory relevant considerations. TheSociety has identified no basis for engrafting on to the Act a requirement that Ministersmust consider any factor or criterion beyond those that Parliament has strictlyprescribed. The point is put beyond doubt by s 14(1)(a) which directs that thespecified statutory criteria and factors (applicable to the relevant category of overseasinvestment) are the only matters able to be considered.[44] As was the case with Oceana Gold's applications, not all of the statutorycriteria or factors will be relevant. Those that are not will be disregarded. An observermay think that a proposed overseas investment might bring benefits that the legislaturehas not thought to include in s 17(2). But neither the OIO, nor relevant Ministers, mayconsider any such benefit — just as it is impermissible to consider detriments (unlessthey are included in the s 17(2) factors). To do so would render the decision legallyvulnerable on the basis irrelevant considerations were taken into account.[45] Mr O'Callahan argued that the counterfactual test involves assessing theposition with the investment, and without the investment, and that the concept of thecounterfactual would make little sense if it were to be applied without considering thedownside of an investment. Mr O'Callahan further argued that a properly constructedcost-benefit appraisal would involve "forward-looking estimated streams ofquantifiable costs and benefits for the proposed project and the counterfactual wouldthen discount these streams to a present-value, and would then compare the twopresent values to determine which project is to be preferred in the absence ofunquantifiable effects."[46] In relation to assessments, and decisions, to be made under the Act I think theposition is straightforward. Unlike other statutory contexts on which the applicantrelies, the Act is highly prescriptive as to the criteria and factors not simply able to betaken into account but which the relevant Ministers "must consider". Contrary to theapplicant's argument that the purpose of the Act is to protect sensitive New Zealandassets from foreign investment that do not benefit New Zealand, the Act bothfacilitates and regulates overseas investment in New Zealand assets. The most thatmight be said is that there is "something of a tension between Parliament'sdescription of overseas investment in New Zealand as a privilege and giving overseasinvestors an entitlement to consent where they meet the relevant criteria".21 Unders 14(1)(c) an applicant must be granted consent if relevant Ministers are satisfied thatall of the relevant criteria are met.[47] In applying the benefit test in s 16(1)(e)(ii) — that is, in assessing the likelybenefit to New Zealand from the overseas investment — the counterfactualassessment required since the High Court decision in Tiroa E and Tehape B Trustsengages, in relation to each claimed benefit, a consideration of the likely consequencesof the investment not proceeding. In Miller J's opinion:22 the statute contemplates for several reasons that the economic factors ins 17(2)(a) may be accounted benefits only if they will not or might not happenabsent the overseas investment.[48] Thus, any negative, or detrimental, aspects to the investment will be consideredas part of the assessment of the particular benefit. Mr Smith gave as an example ofthe counterfactual assessment, an overseas investment proposal resulting in 50 peoplebeing employed as against a counterfactual of 30 people continuing to be employed.The result of the counterfactual assessment is that only 20 new job opportunities flowfrom the investment.23 In the same way, negative consequences of the investment areconsidered as part of this "intra-factor" assessment. What are not permissibleconsiderations are "inter-factors"; factors unrelated to s 17(2) or reg 28.24[49] The statement of purpose in s 3 does not simply acknowledge that it is aprivilege for an overseas person to own or control sensitive New Zealand assets but21 Tiroa E and Tehape B Trusts v CE Land Information New Zealand [2012] NZCA 355, [2012]3 NZLR 808 at [41].22 Tiroa E and Tehape B Trusts v Chief Executive of Land Information, above n 13, at [35].23 One of the mandatory factors for consideration under s 17(2) is whether the overseas investmentis likely to result in the creation of new job opportunities or the retention of existing jobs inNew Zealand that might otherwise be lost.24 The "inter"/"intra" nomenclature is attributed to the submissions on behalf of the first respondents.does so by incorporating into the statutory purpose a methodology. Significantly, therequirement that an overseas investor must meet the statutory criteria for consent isincorporated into the statutory purpose as is the other limb of the methodology — theimposition of conditions on those overseas investments.[50] Meeting the criteria and meeting the conditions are in a sense the 'price' forthe privilege, as Mr Smith characterised these limbs of the statutory purpose. The keypoint is that meeting the criteria and imposing conditions go hand in hand. When onehas regard to the four criteria comprising the "investor test" it is apparent there is asearch for benefits. The same may be said of the criteria in subs 16(1)(e). Thatsuccessive governments have actively sought foreign investment is borne outsomewhat by the observations of the Hon Dr Michael Cullen who, as Minister ofFinance at the time, moved the first reading of the Overseas Investment Bill. Thereview of the 30 year-old Overseas Investment Act had two purposes:(a) to ensure New Zealand's approach to the regulation of foreigninvestment focused on assets that really mattered to New Zealand suchas sensitive land, fisheries and assets with historical or culturalsignificance; and(b) to ensure potential overseas investors did not face unnecessarycompliance costs and that foreign investment that could make a positivecontribution to the economy was to be encouraged.[51] The stated intention of the Bill was to ensure overseas investors who sought toacquire sensitive New Zealand assets complied with purchase conditions thatadvanced New Zealand's interest. In this way, the Bill aimed at balancing the need toprotect sensitive New Zealand assets while recognising the positive contribution to theeconomy made by overseas investment.[52] How then, are Ministers to give effect to reg 28(f) which is made relevant bythe s 17(2)(g) obligation on Ministers to consider "any other factors set out inregulations". And the factor in the regulations said to be relevant to this proceedingis reg 28(f): "whether the overseas investment will, or is likely to, give effect to oradvance a significant Government policy or strategy". The applicant's case is that thecorrect approach to determining benefits was stated in the Ministerial directive letter,which required the relevant Ministers to have regard to whether the proposedacquisition was environmentally sustainable and minimise adverse impacts on thenatural environments and would provide economic, environmental, social and culturalbenefits to regional communities.[53] The relevant Ministerial directive letter was issued on 28 November 2017 bythe Minister for Finance, the Hon Grant Robertson. The purpose of the letter is todirect Land Information New Zealand, as the regulator, on the Government's generalpolicy approach to overseas investment; the relative importance of different factors ins 17(2) and factors in reg 28; and other matters not relevant to this proceeding. In hisletter the Minister stated that:(a) the Government welcomed high quality overseas investment that(amongst other things) is environmentally sustainable, minimisingadverse impacts on the natural environment, and is likely to createpositive and long lasting environmental benefits;(b) the Government also recognise that while economic goals areimportant, so too are environmental, social and cultural goals.[54] The Minister also:(c) provided direction in relation to the relative importance of the variousstatutory criteria and factors regarding particular assets; and(d) directed the regulator that certain factors would be of "high relativeimportance" in relation to particular acquisitions.[55] The applicant says these statements support its argument that, in effect,environmental sustainability is a relevant factor under s 17(2) or reg 28. But it issimply not the case that any Ministerial directive letter supplants the legislative criteriain ss 16 and 17(2) and reg 28. As the Court of Appeal commented in Tiroa E andTehape B Trusts "the Act is drafted so as to accommodate different governmentalpolicies in relation to foreign investment in New Zealand" but:25 while the responsible Minister has the power to give directions to the OIOabout (among other things) 'the relative importance of different criteria orfactors in relation to particular [sensitive New Zealand] assets' he or she hasno power to dispense with the requirement that the statutory criteria be met.[56] The applicant's reliance on the Ministerial directive as introducing"environmental" factors as mandatory relevant considerations under s 17(2) or reg 28is misconceived. The directive does not introduce a new factor but signals theimportance to Government of an overseas investment that meets the environmentalgoals contained in the directive.[57] The provisions enacting the factors and criteria that are relevant to aconsideration of an overseas investment application are not only highly prescriptive,they are limiting. There is no 'catch-all' provision enabling Ministers to consider "anyother matters" the Ministers consider to be relevant. The legislature has left no suchdiscretion to the relevant Ministers. Unlike, for example, the "benefit to the public"test in s 67(3)(b) of the Commerce Act 1986, which is framed more generally andallows decision-makers considerably more scope to take into account a greater arrayof factors,26 the Act's "benefit to New Zealand" test is heavily circumscribed. Itconstrains decision-makers to a greater extent than similar tests in other statutorycontexts.[58] There is, however, scope for conditions to be imposed under s 25(1)(c) of theAct. The Act's structured approach enables concerns that lie beyond the statutorycriteria — such as environmental concerns — to be accommodated, in the usual way,under other domestic legislation such as the Resource Management Act. That isprecisely what took place in relation to Oceana Gold's two applications. For example,one of the seven special conditions imposed requires Oceana Gold to lodge allapplications for consents under the RMA by 31 December 2021. If the necessary25 Tiroa E and Tehape B Trusts, above n 13 at [41] and [48].26 See for example the Court of Appeal's discussion in NZME Limited v Commerce Commission[2018] NZCA 389 at [81].consents are not acquired by 31 December 2026, Ministers may require Oceana Goldto dispose of the land.[59] A further special condition was imposed to offset damage to a "significantnatural area". Oceana Gold is required to "offer to accept resource consent conditionswhich mitigate the environmental effects of the removal of any part of the significantnatural area ". Mr O'Connor submits that the condition assists the Society'sapproach to the benefit test. I do not agree. By the time conditions are imposed, thesubstantial and identifiable likely benefit has already been assessed by reference to thepermissible criteria and factors. The threshold determination having been reached, itwas then available to Ministers to impose, as they did, conditions of consent unders 28. One cannot work backwards from a condition to argue that the nature of thecondition shows a prior step — the "benefit to New Zealand" assessment — was inerror.Result[60] The applicant has not established that Ministers failed to take relevantconsiderations into account when granting Oceana Gold's applications for consent.Nor did Ministers apply a wrong legal test. It follows that the application for judicialreview must be dismissed.[61] As costs follow the event, the applicant is liable to pay the respondents' costs.I would expect costs to be able to be agreed but failing agreement, the parties may filebrief memoranda in accordance with the following directions. Memoranda should notexceed five pages. Any memoranda from the respondents is to be filed and servedwithin 15 working days of this judgment. The applicant's memorandum is to be filedand served 10 working days afterwards and the respondents may file reply memorandafive working days following._____________________________Karen Clark JSolicitors:K3 Legal Ltd, Auckland for ApplicantCrown Law Office, Wellington for First RespondentsSimpson Grierson, Wellington for Second Respondent