New delegations introduced by the Ministerial Designation and Delegation Letter dated 8 April 2024 provide the Overseas Investment Office (‘OIO’) with greater autonomy to independently decide on overseas investment transactions that do not impact New Zealand’s national interest.  

Under the previous Government, a large number of applications involving sensitive assets required decisions to be made by the Ministers themselves. Decisions made by the Ministers ordinarily took a greater length of time to be processed than those within the delegated authority of the OIO. The current Government’s coalition arrangements advocate a reduction of Ministerial involvement in overseas investment consent processes, and the newly introduced delegations are a move to fulfil those commitments.

The new delegations create a recalibration of roles between the Ministers and the OIO. The changes strategically distance the Ministers from matters involving sensitive land, significant business assets and fishing quota, while confining their direct decision making involvement to matters of national interest—an area that, realistically, would likely affect a smaller number of overseas investment transactions. 

Effect of the new delegations 

The effect of the new delegations is that all decisions in relation to overseas investments under the Act (including all consent and exemption applications) will now be made by the OIO, except where a decision involves the national interest test or a ‘call-in’ transaction under the National Security and Public Order (NSPO) regime.  

The Ministers may still, on a case-by-case basis, elect to exercise the delegated powers and functions, but only expect to do so on ‘high-risk’ decisions, such as where a transaction raises matters of significant public interest, despite not being a transaction of national interest.  

Implications for investors 

The new delegations signify a material shift from the position under the previous Government, placing the vast majority of decisions in the hands of the OIO. It is hoped that by eliminating the need for most decisions to undergo Ministerial review, the OIO can process applications more efficiently and thereby reduce the time period for obtaining decisions under the Act.

Whether these efficiencies will be realised in practice will take time to determine, and will be dictated by the level of resources available to the OIO to handle its expanded scope and responsibilities.  Maintenance of adequate resources at the OIO, including funding and expertise, will be critical if the objectives of the new delegations are to bear fruit.