The NSW Labor Party claims an operational briefing document obtained under freedom of information laws, shows flaws in the administration of the new GO NSW Equity Fund, which backed the investment in Australia’s Oyster Coast along with superannuation company First State Super and private equity firm ROC Partners.

The document was signed by deputy premier John Barilaro on April 5 despite Labor claiming the minister had told a parliamentary hearing the process was at “arm’s length” of the government, and that he had denied the investment would require ministerial sign-off.

Labor said it will scrap the investment if elected.

Bega MP Andrew Constance said the government is investigating ways to “alleviate” the concerns of farmers feeling “disenfranchised” by the investment, including lease tenures and farm innovation grants.

“Whilst there are areas of concern, compromise can be found for farmers,” he said.

NSW Farmers Federation Oyster Committee chair Caroline Henry said in September she believes the decision breaches competitive neutrality principles.

In parliament on Thursday, NSW Labor MP John Graham claimed AOC had not met the fund’s “guiding criteria” for the investment, including “an enterprise value of at least $20million”, and an "established, proven and successful business model".

“Farmers on the South Coast have said their worry is that this public money will be used to compete against them, to buy out leases and to drive takeovers in the industry,” he said.

The document, containing Jobs for NSW Board recommendations, says the industry is “highly fragmented and lacks corporatisation”, and says the money will be used to “acquire oyster leases”, deploy “expensive” technology and investigate “an Asian growth strategy”.

Disease outbreaks, negative pricing pressure from increasing supply, securing high quality leases, yield amounts, and the lack of long-term customer and supplier contracts are listed as “key risks”.

AOC CEO Mark Allsopp said the company is being used as a “political football” in the lead up to next year’s election, and it has “incurred significant growth” since recording a net loss of $241,000 during the 2016-17 year.