After a flurry of speculation last week, the rumoured Chinese play for BHP last week has fallen off the radar. But that still leaves Chinalco’s “courtesy” application for approval of its London purchase of a slice of Rio Tinto, as well as other, smaller Chinese investments, still awaiting the Government’s approval.

The Financial Times once complained about Australia’s FATA requirements that few countries “operate regimes that are more opaque, unaccountable or open to political and bureaucratic manipulation.” That’s dead right. The notion of “national interest” on which the whole process hinges is deliberately left undefined, to give decision-makers maximum freedom in handling applications. And the process itself is secretive: the Treasurer receives a recommendation from the Foreign Investment Review Board (John Phillips, Lynn Wood, Chris Miles and Patrick Colmer), which is itself supported by a dedicated area of Treasury.

However the decision is the Treasurer’s alone, and he may or may not accept, or partially accept, FIRB’s recommendations – all behind closed doors. That’s why the Airline Partners Australia consortium hired Crosby/Textor to explain to Peter Costello why he should tick off on the acquisition of Qantas, and why Chinalco has hired Hawker Britton to try to smooth the way for its Rio Tinto purchase.

The handling of foreign investment applications evolved significantly under the Howard Government. Outright rejection of foreign investment applications of any kind became rare, primarily because conditional approval became the Government’s tool of choice, allowing it to impose conditions on acquisitions that addressed national interest, or political, issues raised by an acquisition. But one significant change has already occurred under Labor: the key decision-maker is no longer a man obsessed with the Prime Ministership. FIRB bureaucrats complained under the previous Government that Peter Costello viewed all major FIRB decisions through the prism of his leadership hopes.

But at the moment, nothing is happening. Chinalco applied in early February. FIRB is required to decide on an application within thirty days, but this can be extended by a further ninety days, although old FIRB hands say that FIRB prefers to ask applicants to withdraw and re-submit applications rather than seek an extension, which requires gazettal. In any event, Chinalco’s application is a voluntary one, and not subject to the usual timing requirements. But Ian McCubbin of Deacon’s complained to The Australian last week that a number of other, smaller investment applications had also been held up by FIRB.

Almost certainly, the delay is because this is the first decision under the Government’s new Foreign Government Investment guidelines and will, unless it is an outright rejection, crystallise the Government’s thinking on issues such as independence from foreign governments and how national security is affected, in the form of the conditions imposed on the deal.

For this reason, as well as the extraordinary sensitivity of investment in the resource sector, the decision is unlikely to be significantly influenced by lobbyists. Indeed, there are suggestions that even Hawker Britton has struggled to get access to the Treasurer and the Prime Minister on the issue. In any event, nothing would have been decided until after the Prime Minister’s meetings with the Chinese leadership on investment. Simon Crean has also left today for a five-day trip to China.

But according to a veteran lobbyist, Rudd and Swan are also likely to closely consider the purpose – or what they think is the purpose – of the acquisition. Obtaining even a substantial shareholding of a major mining company doesn’t provide control of prices, or even preferential treatment in the quest for resource security. Only a majority stake confers that sort of control, and would be totally unacceptable. A theory offered by one observer about the Chinalco acquisition is that it would provide Chinalco with a seat at the table in the event that competition authorities here or elsewhere require a BHP-Rio merger to dispose of assets in overly-concentrated segments of its combined markets.

In the end, however, all this is speculation and tea-leaf reading. There is no transparency about the foreign investment process in Australia, and therefore no certainty for either investors or for the community, whose interests the process is intended to protect. Lobbyists may or may not play a key role, as may the Treasurer’s long-term political ambitions, or what Kevin Rudd agreed to in his talks with Wen Jiabao. We don’t know.

Given how obsessed this Government is with reviews, perhaps it should consider one about how to make foreign investment regulation more open and transparent.