The Prime Minister Dr. Terepai Maoate has launched a full-scale review of foreign investment in the Cook Islands after a young local couple sparked widespread debate over unfair treatment and competition from a foreign-owned business operation.

The couple recently claimed their business plans to kick off a new venture were dashed by the efforts of a foreign company to expand into the same activity - photographic processing. The Development Investment Board (DIB) - the one stop agency responsible for vetting foreign investors and their business activities - failed to protect their business initiative, the couple said.

Concerns were raised in Parliament and Dr. Maoate took the issue to Cabinet, which endorsed the review and appointed a four-person committee to conduct the exercise. This is expected to take at least a month before recommendations are put back before Cabinet for consideration. In the meantime, all DIB operations and foreign investment applications have been put on hold.

Among the terms of reference, the review will look at the functions of the one stop agency. In doing so, the committee is tasked with reviewing the Act, investment code, policies, and decisions made by DIB over the past year.

The criticisms raised against DIB range from its lack of transparency to failures to cater for the interests of local business development. Also under fire is the authority granted to the agency to over-ride the Immigration Department in approving work permits to foreign workers.

Chairing the committee is former Chamber President Don Beer Jr. who is being assisted by Teariki Heather, Marjorie Crocombe, and Brian Mason. Mr. Beer has called for public submissions to be lodged by 12 September.

The terms of reference of the committee are as follows:

(A) To review:

(i) the Development Investment Act 1995-96 and, in particular, the objectives and functions of the Development Investment Board as prescribed by that Act;
(ii) the Investment Code;
(iii) the Investment Guide;
(iv) policies of the Development Investment Board;
(v) decisions of the Development Investment Board over the past year and to determine whether they accord with, and strike the appropriate balance between, government's objectives for foreign investment, and where they do not to recommend appropriate changes.

(B) Without limiting A above to review approvals for work permits given by the Development Investment Board over the past year and to:

(i) determine whether they accord with Government's immigration policy; and
(ii) recommend any changes, which would ensure consistency of decisions on work permits between the Ministry of Immigration and Foreign Affairs and the Development Investment Board.

(C) Without limiting A above to review the Development Investment Board's powers to grant concessions (import and levy) to investors and determine whether these concessions unfairly advantage foreign investors and, if so, recommend appropriate changes.