The Government is defending spending millions of dollars building an abattoir, woolshed and electronic weighing system on a Saudi Arabian businessman's farm.
It is developing an agribusiness hub on a farm owned by multi-millionaire Hamood Al Khalaf , who used to export live sheep from New Zealand to Saudi Arabia before the practice was banned 10 years ago.
On a recent trade trip to the Middle East, Prime Minister John Key said the treatment of Mr Khalaf at the time remained one of the barriers to a Free Trade Agreement with the Gulf States.
The Labour Party's trade spokesperson, David Parker, said claims made by Mr Khalaf's business partner that the hub was compensation, were concerning.
"One of the business associates of the recipient of some of these millions of dollars said the money was being paid to influence the concerns of the Saudi businessman, who was annoyed with New Zealand when we cancelled live sheep exports.
"It's not appropriate to buy influence in order to get a free trade agreement with the Gulf states on that basis, and so we've asked for some cast-iron guarantees from the Government to assure us that what this other person says isn't correct."
But the Government has dismissed these concerns.
Primary Industries Minister Nathan Guy said overseas investment like this was common, despite officials saying this is the only New Zealand Government agri-hub in the world.
"This is an opportunity to showcase 30 New Zealand companies.
"They've got a lot of abattoirs in Saudi that are very old, and we're going to be building an abattoir, woolshed and electronic weighing systems et cetera on this demonstration farm.
"When Saudi comes to upgrade their abattoirs, they'll have an opportunity to come and see what New Zealand has to offer, and we believe there is a huge potential to grow our agri-tech exports not only in this market but in other markets around the world."
The Government also spent $1.5 million flying 900 pregnant ewes to the farm.
