Saudi sheep inquiry

The Auditor General has announced today that she will carry out an inquiry into the Saudi sheep deal. It’s good to see this. It should shed some lihgt on an issue that has some concerning aspects.

And it’s good to see opposition MPs pushing for accountability like this.

Auditor-General to inquire into the Saudi Arabia Food Security Partnership

The Auditor-General has received requests from James Shaw MP, Hon David Parker, the New Zealand Taxpayers’ Union, and in a petition to inquire into the Saudi Arabia Food Security Partnership. Our response to those who wrote to us is set out below.


Thank you for your letters of 28 May and 24 June 2015. I have been asked by you and another member of Parliament, the New Zealand Taxpayers’ Union, and in a petition from about 10,000 New Zealanders to inquire into the Saudi Arabia Food Security Partnership (the Partnership).

On 4 August 2015, the Ministry of Foreign Affairs and Trade (the Ministry) released documents that may have provided enough information for people to make their own assessment of some questions. But other questions remain; some of which I may be able to answer; some I cannot.

I have, therefore, decided to carry out an inquiry into the expenditure of public money on the Partnership.

Terms of reference for the inquiry

My inquiry under the Public Audit Act 2001 will look at the following:

  • the amount of public money budgeted and spent on this Partnership, how it has been used, and the outcomes achieved with it;
  • whether the expenditure on services was within the appropriations of Vote Foreign Affairs and Trade, as authorised by Parliament;
  • the procurement and contract management practices used by the Ministry and New Zealand Trade and Enterprise to purchase services relating to the Partnership;
  • whether the services received were in keeping with the business case and contract specifications; and
  • any other related matter that I consider it desirable to inquire into and report on.

Our work in 2013

In 2013, at the request of the Ministry, my Office carried out some work that involved commenting to the Ministry on the Indicative Business Case and the related appropriation for Vote Foreign Affairs and Trade. The letters setting out our comments have been released publicly. There have been significant developments in the execution of that business case since 2013, and the inquiry will focus mainly on that period.

Reporting publicly

I do not normally make any public comment on the substance or progress of an inquiry while our work is under way. I will report publicly on my findings once I have concluded the inquiry.

Yours sincerely

Lyn Provost
Controller and Auditor-General

NZ Herald reports on Murray McCully’s response in Inquiry to be held into Saudi sheep deal:

Foreign Minister Murray McCully said he welcomed the scrutiny by Mrs Provost.

“We have said from the outset that the Auditor-General is entitled to scrutinise any spending of public money, whenever she chooses, and we welcome her decision to carry out an inquiry into the Saudi Food Security Partnership,” Mr McCully said.

“The Government is comfortable with the process that was followed in relation to the Agrihub, and the wider Food Security Partnership, and relevant departments, including MFAT, will provide all necessary support to the inquiry.”

About $11.5 million has been spent on sending New Zealand sheep and equipment to businessman Hamood Al Khalaf’s farm in Saudi Arabia, with $6 million of that spent on establishing a farm, including equipment and technology.

Mr McCully has said it was partly done to appease Mr Al Khalaf, who lost millions of dollars during a New Zealand ban on live sheep exports.

His ill feeling was a major obstacle in the way of a free-trade deal in the region, Mr McCully said, and negotiations were now able to move on. The farm would also act as a demonstration base for New Zealand agribusiness, and remove the threat of legal action, he said.

Leave a comment


  1. David

     /  18th August 2015

    Perfect for everyone. The idiots in Labour who caused this mess get to smack National around using their media mates, McCully gets to keep quiet during the investigation and then it is a race to the finish in spinning what will be a typical crap report from the hopeless AG which is her usual non conclusion with enough sound bites to keep both sides happy.
    Everyone wins and the public learn nothing.

  2. Tom Sawyer

     /  18th August 2015

    Looks like that fence needs another coat…… 🙂

  3. An investigation by OAG…, brilliant for National as it can be spun out for a few months and deliver its report as parliament goes in to its summer recess and the report drops in to dead air, with most Kiwis enjoying Xmas pudding and thoughts of life on the beach…..

    the opposition have botched something, that on the face of it looks like standard middle eastern business practice but in an NZ context is more akin to corruption – basically a “goodwill” payment to smooth a shot at getting an FTA signed with the Gulf States. Labour and the Greens are just deadset useless….

  4. Mike C

     /  19th August 2015

    It’s bizarre that the Labour Party have the audacity to call for Murray McCullys head, when it was the Labour Party who stopped the live exports in the first place, causing a huge legal mess, which Murray McCully has done his best to clean up.

    If the Labour Party hadn’t stopped the live exports to Saudi Arabia, then we wouldn’t have had to spend $11.5 million dollars, and New Zealand would have made so many millions of dollars from the live exports over the past several years.

    Labour should have kept their traps shut, because this may very well come back and bite Little and Co on their arses 🙂


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