International Finance Agreements Amendment Bill

I understand that this Bill is intended to amend the International Finance Agreements Act of 1961, so that New Zealand can become a member of the Multilateral Investment Guarantee Agency, and to ratify the Convention Establishing the Multilateral Investment Guarantee Agency signed by this Labour government in Seoul on 6 September 2005, which links this Agency to others referred to in that Act, including the World Bank, IMF and the International Finance Corporation.

The Multilateral Investment Guarantee Agency is one of five agencies making up the World Bank group. It has 170 members including New Zealand, and its stated mission is to enhance the flow of foreign investment to developing countries by providing insurance for member countries against both sovereign and political risk;

Protection against an inability to transfer local currency outside of the country caused by the host government’s actions;
Protection against the loss of an insured investment as a result of acts by the host government that may reduce or eliminate ownership of, or rights to, an investment;
Protection against the host government breaching a contract; and
Protection against loss/destruction of assets caused by politically motivated acts of war or civil disturbance in the host country.


The risk insurance is provided for terms of up to twenty years for investments, investment loans, and deals where the investor’s return comes from the revenues or production of the investment.



Now that’s the official spin Mr Speaker, but the history of foreign investment paints a much different and far darker picture.

Foreign capital has always played a big role in the New Zealand economy, right from back in the colonial days, when the settler government first attracted British investment by promising them land that had been stolen from Maori, then calling for further investment to bankroll the war against Maori whose lands had been stolen.

But despite all this, up till 1950, foreign investment was still only about 11%.



Then in 1984, government lifted restrictions on New Zealand companies investing overseas, and taking advantage of cheap overseas labour, which of course led to the loss of New Zealand jobs to offshore manufacturing.

Unfortunately for New Zealand, government’s response was not to protect jobs, but to start reducing restrictions on foreign investment into Aotearoa, which led to the privatisation and sale of some of the country’s largest companies beginning in 1988, and giving foreign investment a real boost.

Indeed sales were structured to make overseas participation inevitable, many companies were sold cheaply in a depressed market, and by the mid-1990s, most of New Zealand’s top companies were between 30-100% foreign owned.

And the reality of all that investment is that rather than investing in New Zealand – extending production and creating jobs – foreign investors basically took over existing companies, stripped them of their assets, laid off thousands of workers, and took their massive profits back offshore with them.

And then, as if that wasn’t enough, in 1995 government amended the Overseas Investment Act to make it even easier for foreign investment in the New Zealand economy, including the lifting of restrictions on the purchase of New Zealand land, even though a National Business Review poll (1995) clearly showed that more than half of all Kiwis did not want land sold to foreigners, and in fact said that they would support a law to ban foreign ownership of New Zealand land.



Maori have been particularly hard hit by much of this privatization and sale of New Zealand’s assets, through the sale of huge Maori workplaces like the forestry, the railroad, telecom, and the break-up and sale of many of the country’s freezing works.

Government was also selling off resources subject to treaty claims; resources which were hard enough to recover when held by Crown – but would become nigh on impossible to get back once ownership moved offshore.

It all culminated in 1997, when government wanted to sign up to the OECD’s Multilateral Agreement on Investment (MAI) which aimed to remove virtually all restrictions on foreign investment, giving multi-billion-dollar foreign raiders an open season on assets in Aotearoa.

A massive campaign against MAI brought together Maori, activist unions, students, anti-free trade groups, local mayors, grey power, Alliance and NZ First (Labour sat on the fence), which eventually forced government to abandon MAI negotiations in late 1998.

So the history of foreign investment in this country has never been particularly pleasant for Maori, and there’s no reason to believe much has changed with the advent of the new, more powerful World Bank / IMF rape and pillage brigade.



Today the Labour government continues to negotiate and sign an increasing number of trade agreements which give rights to large corporations over the very resources that Maori have claim to.

And now they want us to amend the International Finance Agreements Act 1961 to lock New Zealand into this Multilateral Investment Guarantee Agency.

Well Mr Speaker, no way will the Maori Party support any plans to continue the rape and pillage of this nation’s assets, nor will we support the stupidity of our having to put up insurance so that the rapists get compensation if they can’t have their dastardly way.



And here’s where we see the hypocrisy in all this, because while this Labour government is planning to insure the rape of our land by foreigners, they haven’t even got the decency to support a watered-down Declaration on the Rights of Indigenous Peoples, which is due to go before the United Nations General Assembly for ratification in a few days time.

In fact, not only will New Zealand not be supporting the Declaration, they have been internationally credited with leading the charge against it, ably backed up by Canada, Australia and again, the good ol’ US of A.

And I draw the House’s attention to the recommendation from Professor Rodolfo Stavenhagen, the United Nation’s Special Rapporteur on the Human Rights Council on the situation of human rights and fundamental freedoms of indigenous peoples, who said:

“One of the new trends that has been reinforced in recent years is the continuous loss of indigenous lands and territories, including their loss of control over natural resources ….intensified as a result of economic globalization, especially with increased exploitation of energy and water resources”.

And here we are, being asked to support a Bill to insure foreign investment in Aotearoa, when the rules haven’t even been determined by us, but by international financial institutions whose SOLE purpose is to break down trade barriers to enable trans-nationals to not only dominate economic development, but also political development by using international trade agreements which overrule national decision-making, and national sovereignty.

All in the interest Mr Speaker of globalisation, and yet the evidence is already clearly showing the failings of that philosophy.

Poor countries, and poor people in richer countries, simply do not get the promised gains from globalization. In fact the World Bank itself concedes that predictions of substantial poverty reduction from the Doha round were based on a ‘fanciful scenario’ and suggests that even big cuts in tariffs and subsidies would benefit less than 1% of people living below the poverty line;

So-called ‘trade’ agreements extend far beyond trade in goods, and in fact restrict the choice of laws and policies available to governments to regulate international investment, provision of services, and intellectual property. They restrict the choices, ability, and the right of governments to regulate in the national interest. Indeed it is their function do so;

The world’s major economic powers don’t even adhere to these policies themselves. In fact, they unashamedly promote their corporations’ interests above all else, and our being dragged into these international agreements is leaving us more and more vulnerable in a grossly unequal global economy, while giving away the very sovereignty that protects our interests.



Mr Speaker, I am aghast at the lengths to which this government will stoop to keep on-side with the World Bank and the IMF.

It’s almost like a rapist is flying into the country and is going to come into your house, and has an international agreement that he can rape your sister, and now we’re about to insure the guy so that if the sister should say no, heaven forbid, then we’ll give him our other sister.

Mr Speaker, Maori rights are under constant threat, but these international financial agreements threaten the sovereignty of every New Zealander, and our fundamental right to determine our own futures is being compromised by the Labour government’s actions.

In the interests of Maori sovereignty, indeed in the interests of New Zealand sovereignty, the Maori Party will be opposing this Bill.