This afternoon a large number of documents were released by Foreign Minister Murray McCully's office. The New Zealand Herald is currently working through the documents.
Mr McCully has come under intense pressure over the deal he set-up, which saw millions of dollars spent on Saudi businessman Hmood Al Khalaf's private farm in Saudi Arabia.
Opposition parties have labelled a $4 million payment made to Mr Al Khalaf a bribe, and said the money was put up to clear away Saudi ill-feeling and ensure a regional free trade deal could be signed.
Official Information Act requests for documents relating to the deal have been delayed or refused, and after fielding complaints, including from the New Zealand Herald, the Office of the Ombudsman made enquiries and it was agreed that some documents would be released, although with redactions.
Mr Al Khalaf lost millions of dollars when New Zealand banned live exports of sheep for slaughter under the previous Labour Government, with the ban rolled-over under National.
In explaining why about $11.5 million was subsequently spent on Mr Al Khalaf's Saudi farm, Mr McCully has said it was partly done to diffuse a legal threat of up to $30 million.
It would also act as a demonstration farm to showcase Kiwi agribusiness, and remove a major obstacle, in the form of Saudi displeasure over the sheep ban, to a regional free trade agreement.
Cabinet documents show Mr Al Khalaf was frustrated with negotiations with both Labour and National, but Mr McCully has blamed Labour entirely for antagonising the businessman, saying former trade minister Phil Goff misled him about the prospect of exports resuming.
Labour's trade spokesman David Parker believes no proper advice was sought on Mr Al Khalaf's legal threat, that it was obviously hollow and cynically used by National to justify its deal.
The key question Mr Parker has sought to have answered was whether the legal threat was assessed by Crown Law.
Mr McCully and Brook Barrington, chief executive of the Ministry of Foreign Affairs, Defence and Trade, have declined to reveal whether Crown Law advice was sought, citing legal privilege.
Speaking before today's release of documents, Mr McCully said they would not reveal what legal advice was sought.
"The ministry has always had very clear view that they will not allow legal advice to be released. And I have respected that."
Mr McCully defended the time it had taken to release the documents, and said the ministry had to go through a process of consulting with other agencies to work out what could be made public.
Controversy over the deal had been noted by the Saudis, Mr McCully said, and "has not been very helpful". However, he maintained the farm deal was crucial in repairing the relationship.
"They have a very positive view of what we have done...that we have fronted up and dealt with some long-standing issues. And the sense I have is they have significant respect for the approach we have taken, and want to now let the past be put behind us."
In April, Prime Minister John Key toured the Gulf states in a bid to restart a stalled free trade deal with the six-member Gulf Cooperation Council.
Saudi Arabia is the powerhouse of the council, and its stance had been the hurdle in passing the trade deal. The Gulf Cooperation Council is New Zealand's fifth largest trading partner, with two-way trade totalling $4.8 billion.
THE SAUDI FARM - TIMELINE OF A DEAL
- In 2003, publicity around the treatment of live-sheep exports led to a voluntary moratorium.
- In 2007, the Labour Government banned the export of live animals for slaughter.
- In 2009, Agriculture Minister David Carter began negotiations with Saudi Arabia for a resumption of live-sheep exports.
- In 2010, the National Government extended the ban.
- February 2013, the Cabinet approved a proposal by Foreign Minister Murray McCully to pay $4 million to Mr Hmood Al Khalaf's business to secure it to run an agri-hub to promote New Zealand agriculture in Saudi Arabia and as a settlement of a long-running dispute over the ban on live-sheep exports, and $6 million to be paid to NZ businesses to deliver their services and help set-up the Saudi farm.
- The Government paid $1.5 million for 900 pregnant Awassi breeding ewes of Mr Al Khalaf's to be flown to the Saudi farm.
- May, 2015, after media reports on the deal, Mr McCully's office releases Cabinet papers that reveal the full cost of the deal, including the $4 million "facilitation payment" to Mr Al Khalaf. Previously, only the $6 million figure had been released.
- June, 2015, it is confirmed that lambs born on the Saudi farm suffered an extremely high death rate. The Government initially said a sand storm could be to blame, before Brownrigg Agriculture - a Hawkes Bay company that advocated on behalf of Mr Al Khalaf and later won a tender to set-up the farm - pointed to heavy rain and illnesses.
By Nicholas Jones of the New Zealand Herald
