A Senate Inquiry that investigated Foreign Investment Review Board (FIRB) approvals has used key Tasmanian case studies to blast the Federal Government and demonstrate why reform is desperately needed to restore public confidence in foreign investment.
The Senate Inquiry Report, released today, reveals serious flaws in Australia’s foreign investment approval process, and Australia's corporate transparency and anti-money laundering regime.
Three prominent foreign investment approvals in Tasmania were scrutinised by the Senate Inquiry: the Musselroe Bay Resort development busted as part of a money laundering scheme; the controversial takeover of Bellamy’s by Mengniu, and the shameful takeover of Van Diemen’s Land (VDL) dairy by Moon Lake Investments.
Greens Senator for Tasmania, Peter Whish-Wilson said:
“FIRB approval laws have failed Tasmania and the national interest. They simply haven’t been worth the paper they are written on.
“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 political 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.
“I question whether the lack of political will to fix this mess was because Moon Lake was a significant political donor to the Tasmanian Liberal Party, or whether it was because our laws are too weak and inflexible to allow remedy? Probably a bit of both, but it must be fixed.
“The Greens initiated this important inquiry to drive change, so Tasmanians could have confidence in the laws designed to protect our national and state interests.
“This long-standing inquiry has already pressured the Treasurer to improve our FIRB approvals, however there is still considerable work to be done.
“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.
“The Australian Greens urge the Government to adopt key recommendations listed in the Report."
The Greens also propose a set of recommendations to resolve three of the major flaws in Australia’s regulatory framework, namely:
Recommendation: The decision to grant proposed foreign investments a ‘no objection notification’ (approval) or an ‘exemption certificate’ should be made public, along with a statement of reasons, with an exemption from this publication requirement being available on national security grounds, along with a statement of reasons for the exemption.
Recommendation: All undertakings made public in respect of a proposed foreign investment, by either the purchaser or government bodies, are to be held to be a condition of any subsequent approval; with powers to issue a divestment order being available for the breach of any such conditions.
Recommendation: The annual statistical report contains information on the area, current value, tenure, beneficial owner, country of origin of beneficial owner, use and jurisdiction (state or territory) of all land in which there is a foreign interest.
Recommendation: That a public register of companies registered or operating in Australia be establishing providing detail on the ultimate beneficial owners.