Foreign investment in the time of the telegram

Published on Food Crisis and the Global Land Grab, by COLIN BETTLES, April 25, 2012.

AUSTRALIA’S foreign investments legislation was written when the telegram was a mainstream communication tool and needs a radical overhaul driven by an updated understanding of sovereign risk and national interest, with a strategic view, according to NSW Liberal Senator Bill Heffernan.    

Speaking to Fairfax Agricultural Publishing last week, Senator Heffernan expressed overwhelming frustration at the current debate’s exaggerated focus on the Foreign Investment Review Board’s (FIRB) $244 million review trigger … //

… “If we allow foreign companies that have smart accountants with connections to the Cayman Islands or the Virgin Islands and have financial facilities which in some cases are interest free, from a sovereign find, and the purpose of the company is to acquire productive capacity to secure the nation’s interests, as opposed to getting a return on their money, we will lose control of our own destiny,” says Senator Bill Heffernan … //

… Senator Heffernan said under the current national interest test agriculture “just gets the flick pass”.

He said none of the proposals hit the $244 million threshold and “there are no touch and feel guidelines”.

“The test now is, ‘is there any risk in this for the minister or the government?’ and they ask five or six interested parties and if they have no issues they give it a tick,” he said.

“These things are not sexy and they should not be political.

“But too many people in the debate are only thinking about how they can get a political edge or a political definition.

“I’m only prepared to deal with the facts and that is, if you allow other sovereign nations unfettered access with a cheque book to acquire your assets and then they deny you access to the production from those assets, it changes the game.

“I’ve had a yarn to (Trade Minister) Craig Emerson about this issue and would like to think he did not put me in the Hanson-ite, xenophobic league because he understood these are serious, serious issues and I’m afraid we’re not addressing them.

“The global food task is an enormous thing.

“By 2050 it’s predicted that two thirds of the world’s population will live in Asia and they will have lost 30 percent of their productive capacity.

“They are obviously planning for that future but we’re not.

“There are too many unregulated issues.

“I’m afraid you can’t blame the farmer getting out who gets four or five times the value of their farm.

“But the national interest test ought to say, ‘where’s this going to take us?’ and find out what’s happening now because we simply don’t know.

“Australia has to work out where we are; model where it’s going to take us in the future; and decide if we want to go there.

“And that will include a new definition of sovereignty.

“And that is not me being xenophobic; it’s just facing the facts.

“If we allow foreign companies that have smart accountants with connections to the Cayman Islands or the Virgin Islands and have financial facilities which in some cases are interest free, from a sovereign find, and the purpose of the company is to acquire productive capacity to secure the nation’s interests, as opposed to getting a return on their money, we will lose control of our own destiny.

“I think it’s quite a serious issue but a whole lot of dry thinkers are saying let the market flow.” (full text).

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