New Zealand Trade and Enterprise: Administration of the Visiting Investor Programme.


The Visiting Investor Programme (VIP) is a managed visit programme for companies and individuals who are considering New Zealand as a location for establishing all or part of their operations. Investors are brought to New Zealand to meet with local business leaders, Ministers, central and local government executives, and service providers such as commercial real estate companies.

Established in 1998, the VIP was originally administered by Trade New Zealand. Responsibility for administering the VIP was transferred to Investment New Zealand (then a business unit within Industry New Zealand) from 1 July 2002. Investment New Zealand became a business unit within New Zealand Trade and Enterprise (NZTE) from 1 July 2003, and continued to administer the VIP.

The Commerce Committee of the House of Representatives asked the Auditor-General to examine the VIP, because the Committee was concerned about the use of public money allocated to the VIP.

We examined the files for 23 visits in 2002-03, and the files for 18 visits in 2003-04. We were unable to include visits in earlier years because of poor record-keeping by Trade New Zealand.

What did we find?

Investment New Zealand did not have comprehensive and clearly established policies and procedures for administering the VIP. It had a 3-page document describing its general policy for administering the VIP, a one-page document for visiting investors, and an expenditure request form for Investment Managers to complete.

We expected there to be a standard selection process for all visiting investors. Between 1 July 2002 and 30 June 2003, when Investment New Zealand was part of Industry New Zealand, no such process existed. From 1 July 2003, Investment New Zealand created an expenditure request form and required the form to be authorised.

We expected there to be a standard assessment process to determine whether an investor should be brought to New Zealand under the VIP. Between 1 July 2002 and 30 June 2003, there was no standard assessment and approvals process. From 1 July 2003, the Director New Zealand authorised the expenditure request forms.

We expected the Director who authorised the form to follow a clearly defined decision-making process, including a set of guidelines against which decisions would be made. We found no such process or guidelines.

We expected that all expenditure incurred under the VIP would comply with appropriate policies, be well documented, and be approved by the relevant authority. However, there were no policies governing what types and levels of expenditure were appropriate under the VIP as a whole, and no procedures for applying the policies when preparing itineraries for specific visits.

We also expected Investment New Zealand to effectively monitor the visits and to record the investment outcomes. Only 4 of the 23 files in the 2002-03 year contained information describing what had occurred or the outcomes of the visit. The files for the 2003-04 year were better; 14 of the 18 files we examined contained information describing what had occurred or the outcomes of the visit.

Operation of the Visiting Investor Programme

The length of visits varied, from a single day of meetings to visits lasting more than a week.

The visiting investors generally spent their time in meetings. Of the 41 visits we examined, 16 visits involved no additional recreational activities, 4 had 2 days of organised recreational activities, and the recreational time for the remainder ranged from half a day to one and a half days.

Spending under the VIP – for international flights, accommodation, meals, recreational activities, and transport within New Zealand – varied considerably for each visit, from a few hundred dollars to more than $20,000.

There were invoices or receipts for all expenditure during the 2 years we examined. However, some of the invoices were insufficiently detailed for us to ascertain the purpose of the spending, or to determine whether it was consistent with the purpose of the visit.

For those visits where the supporting documentation was clear, the expenditure we saw was appropriate, given the nature of the VIP and the standing of the visitors involved.

The main evaluation of the VIP to date has been a joint Ministry of Economic Development and Ministry of Foreign Affairs and Trade review of Investment New Zealand. The review, The Evaluation of the Implementation of Investment New Zealand, briefly considered the VIP, and noted that a full review was scheduled for December 2006.

Our recommendations

Our recommendations focus on the need to establish robust policies and processes for the administration of the VIP, in order to minimise the risk of inappropriate expenditure, ensure adequate record keeping, and improve transparency.

  1. We recommend that Investment New Zealand require an expenditure request form to be completed for all visits, before an invitation to visit is extended. All forms must be completed in full, explicitly assess the likelihood of investment in New Zealand, and include sufficient information for an informed decision to be made.
  2. We recommend that Investment New Zealand establish clear and transparent assessment processes for all proposed visits under the Visiting Investor Programme, and document all decisions with reference to established guidelines.
  3. We recommend that New Zealand Trade and Enterprise create guidance that sets out clearly the types and levels of expenditure acceptable under the Visiting Investor Programme, and enable expenditure to be incurred on a basis that is appropriate in each particular case, having regard to the purpose of the visit and the desired investment outcome. Such guidance should also specify the appropriate expenditure for officials when accompanying visiting investors.
  4. We recommend that New Zealand Trade and Enterprise require all expenditure under the Visiting Investor Programme to be supported by documentation that shows the nature of the expenditure, and how it relates to the purpose of the visit as identified in the approved expenditure request form.
  5. We recommend that Investment New Zealand require the Investment Manager to always write a comprehensive report at the end of a visit, describing:
    • what occurred during the course of the visit;
    • the follow-up actions that are likely to occur as a result of the visit;
    • an assessment of the likely investment possibilities; and
    • the further steps needed to realise such possibilities.
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