Opinion & Commentary
More inscrutable than the Chinese
On September 24 last year, the Foreign Investment Review Board’s Patrick Colmer rose to speak to the Australia-China Investment Forum in Sydney. It is unlikely he intended his speech to be anything more than a straight-forward exposition of Australia’s approach to regulating foreign investment. But that’s not how his audience of foreign investment professionals and media heard it.
Colmer said that the Australian government ‘was much more comfortable when we see investments which are below 50% for greenfields projects and around 15% for major producers’. He also noted ‘there are examples where we have accepted quite readily different arrangements to that’.
These remarks threw the foreign investment community into a spin. The Australian’s Matthew Stevens even coined the phrase ‘the Colmer doctrine’ to describe what appeared to be a far more explicit statement of the government’s policy than had previously been articulated by Wayne Swan.
With the speech having seemingly announced new policy, investment bankers, lawyers and the media descended on the FIRB’s website in the reasonable expectation they might obtain a copy of the speech, but none was forthcoming. Journalists’ requests to FIRB for copies of the speech were ignored or denied.
This led to speculation Colmer had gone off the range in his characterisation of government policy, adding more confusion to an already incoherent policy on foreign direct investment.
Sharing the foreign investment community’s frustration, I sought access to the speech under Freedom of Information legislation. As part of the application, I sought a remission of fees under section 30A of the act, on the grounds that release of the speech would be of public interest and benefit.
The fee remission was denied by Colmer, who was also the decision-maker for the application, on the grounds that ‘mere curiosity on the part of a person or a substantial section of the public will generally not constitute a public interest ground. I am not satisfied there is a public interest sufficient to warrant the waiver of the $30 application fee in this case’. This is an extraordinarily narrow reading of the public interest and public benefit given the reaction to the speech.
Having paid the fee, I received a letter from Colmer enclosing a transcript of the speech. The speech is still not available from the FIRB, but I have posted a copy on my website (www. institutional-economics.com) for the benefit of the many foreign investment professionals and journalists who also suffer from ‘mere curiosity’.
It goes without saying that it should not take an FOI request to obtain a copy of a public speech given by a senior public servant that was designed to explicate government policy. But it is consistent with the FIRB’s reputation for secrecy and inscrutability.
It is perversely appropriate that the rest of Colmer’s speech to the forum was an appeal for greater secrecy and discretion. Colmer said that ‘while the foreign investment review system is enshrined in legislation, the fundamental issues at the end of the day are much more policy issues rather than legal issues’. He suggested that the media and lawyers were best left out of the process. Prospective foreign investors were effectively told to quietly cut deals with the FIRB.
It is an approach to foreign investment more appropriate to a country like China than Australia.
Treasurer Swan has since announced the FIRB will release ‘an easy-to-read version of the foreign investment review framework’ to be made available in Chinese, Japanese and Indonesian. But the government’s policy on foreign investment is not going to be any less confusing in a foreign language than it already is in English. Foreign investors cannot be expected to understand a policy that the government itself cannot properly articulate.
Dr Stephen Kirchner is a Research Fellow with The Centre for Independent Studies.
