MIL OSI – Source: New Zealand Government – Saudi Dodgy Deal: McClay says Papers highlight Labour’s bad faith dealings

Newly-released Cabinet papers show the previous Labour Government acted in bad faith around the Saudi sheep issue and was repeatedly warned its actions carried legal, commercial and diplomatic risks, Acting Foreign Minister Todd McClay says.

The papers relate to the export of sheep to Saudi Arabia and were to be released shortly under the Official Information Act.

The documents show that live sheep exports for slaughter stopped in 2003 but in the following year Labour began to negotiate a bilateral agreement with Saudi Arabia to resume those exports.

“The papers show Labour knew it had a Saudi investor in New Zealand who was operating a breeding programme of sheep for export to Saudi Arabia, so it sought to address that by resuming live exports,” Mr McClay says.

“Labour started to negotiate a deal with Saudi Arabia to resume live exports ‘on a commercial basis’.

“Phil Goff travelled to Riyadh as Trade Minister in 2006 and told a Saudi Minister that New Zealand was happy with the deal and had no objections to its conclusion in the near future.

“However, Labour then changed its position and acted in bad faith.”

The papers show Labour reviewed settings around live exports and made a deliberate decision not to inform Saudi Arabia about the review until after it was completed.

“The Saudi investor continued to invest in his operation in New Zealand under the impression that a deal to resume exports was about to be concluded, while behind the scenes the reality was quite different,” Mr McClay says.

“The papers show Cabinet was warned there were risks in taking such an approach.

“While the detail of these legal risks have been redacted on the advice of officials, the papers do still clearly state there are “international legal, commercial and diplomatic risks”.

“Without revealing the details, it is fair to say Labour was warned legal action could be taken against its move.

“The papers demonstrate Labour gave good faith assurances to the Saudis about a deal to resume sheep exports on a commercial basis.”

Mr McClay says that instead of criticising the present Government for resolving the situation, Labour should be embarrassed by its actions.

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Selwyn Manning, BCS (Hons.) MCS (Hons.) is an investigative political journalist with 23 years media experience. He specializes in reportage and analysis of socioeconomics, politics, foreign affairs, and security/intelligence issues. Selwyn has extensive experience as a commentator and has provided live political analysis to a wide range of television and radio organizations broadcasting in New Zealand, Australia and globally including the BBC (Five Live, London) and BBC (World Service). He is currently a correspondent to Australia's FiveAA radio, and is a regular live-on-air panelist on Radio New Zealand's The Panel with broadcaster Jim Mora.