This is a Seanad Bill which has been amended by the Dáil. In accordance with Standing Order 85, it is deemed to have passed its First, Second and Third Stages in the Seanad and is placed on the Order Paper for Report Stage. On the question, "That the Bill be received for final consideration", the Minister may explain the purpose of the amendments made by the Dáil. This is looked upon as the report of the Dáil amendments to the Seanad. Therefore, the only matters which may be discussed are the amendments made by the Dáil. For the convenience of Senators, I have arranged for the amendments to be printed and circulated. Members may speak only once.
Industrial Development (Enterprise Ireland) Bill, 1998 [ Seanad Bill amended by Dáil ]: Report and Final Stages.
Question proposed: "That the Bill be received for final consideration."
I will outline the purpose of the various amendments made in the Dáil since 16 June when the Seanad passed the Bill. A number of the amendments are of a technical nature and they have been introduced to improve the text of the Bill, address omissions and correct some minor drafting errors. However, some significant amendments have been made both in response to issues raised by Senators, which I undertook to consider, and to issues and concerns raised by Deputies in the Dáil. Sections 1, 17, 40, 41, 44, 47, 49 and 51 have all been amended for technical reasons and encompass amendments Nos. 1 to 4, 8, 13, 15 to 17, 20 to 22, 23 to 26 and No. 27.
The House will recall that there was considerable discussion about the membership of the board of the agency and the term of office of board members. The issues raised related specifically to the term of office of members and it was suggested that board members should not serve for more than ten consecutive years. I undertook to consider these matters before reporting back to the Seanad. I was also anxious, having heard the debate, to ensure that no member of the board would serve more than five years after initial appointment by the Minister.
Section 9 has been amended accordingly by amendments Nos. 5 and 6. Section 9(8) now provides for a simple rotation of board members whereby, on every anniversary of the establishment day, two members of the board retire. This new formula will ensure no member of the board will serve more than five years after initial appointment by the Minister, no board member will serve more than ten consecutive years as required by the new section 9(10), and the new rotational formula should avoid a situation where all members of the board retire on a common date thus ensuring continuity of experience on the board. I acknowledge the contributions of Senator Quinn and others on this issue. The principle of imposing a limitation on periods of service has also been applied to the chief executive officer of Enterprise Ireland whose term of appointment will be limited to a maximum of ten years. This is provided for by amendment No. 7 in Section 13.
Amendment No. 14 to section 33 provides for a new statutory, aggregate grant limit for Forfás, IDA Ireland and Enterprise Ireland of £1.5 billion. The Bill as passed by the Seanad set the aggregate limit at £2 billion. Concern was expressed at the select committee that the £2 billion threshold was too high and that a lower threshold, which would allow for earlier Oireachtas consideration of this and related industrial policy issues, would be more appropriate. Having considered the concerns raised in the Dáil I agreed to set the new threshold at a lower level of £1.5 billion. The aggregate at the moment is £750,000 and will be reached at the beginning of this month. Even if this Bill had not been introduced, it would have been necessary to introduce amending legislation to amend the aggregate sum. I estimate that this should be sufficient to provide for aggregate expenditure by the relevant agencies for about a three year period at current expenditure levels.
A number of concerns were raised by members of both Houses about the role of science and innovation. I fully share the views expressed about the importance of science technology and innovation. Product life cycles are constantly shortening and, more than ever, companies need to introduce new products and processes to survive. Technology and innovation in all its forms are major drivers of business success. Without innovation there is stagnation and, in business, those who stagnate rarely survive.
I have made a number of amendments to provide an increased emphasis on science and innovation. Section 22 deals with the annual report of the agency. I have introduced amendments Nos. 9 and 10 which provide that the annual report must now specifically comment on innovation and on research and development performance. In section 24 I have accepted amendments Nos. 11 and 12 from Deputy Broughan to include a reference to laboratories in this section which deals with the premises of the agency. While laboratories would be included in the overall term "premises", I was happy to accept this amendment as a further indication that Enterprise Ireland will have a strong technology function.
In section 45 I introduced amendments Nos. 18 and 19 which explicitly include science and innovation within the functions of Forfás. Forfás has a continuing significant role to play in the co-ordination of science and innovation policy. It provides the secretariat to the recently established Irish Council for Science, Technology and Innovation. It also plays a key role in co-ordinating Ireland's participation in international science and technology activities with particular reference to the EU framework programmes which provide one of the major sources of funding for Irish researchers — some 150 million ECU over the past four years. The Bill now fully acknowledges the role of Forfás in this area.
In both Houses a number of concerns were raised, especially by Senator Costello in this House and Deputies Owen, Broughan and Rabbitte in the other House, regarding the staff of the agency. In response I have given assurances that the terms and conditions of the staff involved will not be made less favourable due to the creation of Enterprise Ireland.
In speaking about my amendments in the area of science, technology and innovation, I spoke about the pace of change and the need to be responsive to it. Change is everywhere and the public service is not immune to it. The strategic management initiative is having a major impact in breaking down the barriers between the public and private sector. Increasingly there is a realisation that the public service must provide the same levels of excellence in customer service, innovation, flexibility and responsiveness as the best private sector organisations. Many public servants have welcomed the SMI and are using it as a vehicle to promote change and make their organisations a better place in which to work.
Customer service will be at the heart of Enterprise Ireland in line with the move from an agency supply driven approach to genuine response to the needs of client firms as outlined in my Second Stage speech. In the Bill I provided for flexibility in staffing structures, with the possibility of having Enterprise Ireland and IDA Ireland become employers of their own staff. I am aware that some Members expressed concern that this could have negative implications for staff, particularly in regard to the possibility that the opportunities for mobility of staff among the agencies, which currently exists in the single employer structure, could be lost if each agency was to employ its own staff. I have given assurances that this will not be the case. However, to place the matter beyond all doubt, I have specifically provided for mobility in a new Part IX — section 52. Amendment No. 28 provides that staff of Forfás, NSAI, IDA Ireland and Enterprise Ireland will have the right to apply for and be considered for vacancies in those organisations.
I welcome the initiative of the Minister in responding favourably to the concerns expressed by Members in both Houses. That she has accepted a number of the amendments is an indication of her openness to good and constructive proposals and her response today is a strong and firm indication of this.
Her acceptance of an amendment that the chief executive should not spend more than ten years in office is welcome. People who remain for too long in such positions can go stale whereas, if they move on with that experience behind them, they will be prime candidates for fine positions in other organisations. It is not an inhibition on nor should it restrict potential candidates for the position of chief executive of Enterprise Ireland.
It is a good idea not to allow board members remain members for more than ten consecutive years. That is a long time and change is so rapid, especially in the area of technology and industry, there is a need to appoint people with more recent and modern expertise and experience. This measure which has been introduced will enable future Ministers to respond to that. It is a wise and welcome amendment.
There was an extensive debate in the select committee on the aggregate grant limit of £2 billion as against £1.5 billion. I cannot argue with what was said but it is important the workings of the organisations should not be restricted. If there is an urgent need to introduce amending legislation that should be done quickly without major bureaucratic discussions within Departments which would inhibit development. If the current economic buoyancy continues, extra investment will be needed. The amendment will not be opposed on this side of the House.
The Minister has recognised the need for innovation, research and development. If Ireland is to attract investment we must pay close attention to research and development, particularly in the areas of science and technology. We have a skilled and highly educated workforce and it is important that we maintain this high standard. I am delighted that the Minister has decided that the annual report of Enterprise Ireland will include a section on innovation, research and development.
When semi-State bodies reorganise there is always a concern about staffing. The Minister has assured the House that the terms and conditions of staff will not be adversely affected by the changeover. It is important that the terms of the strategic management initiative are adhered to and that the public sector can compete with the private sector.
Semi-State organisations must focus on customer service. Leadership from organisations such as Enterprise Ireland is important if our current economic success is to continue. The combined skills of the public and private sectors can be a strong force.
The Department of Foreign Affairs can play a role in promoting the Irish economy. The Minister for Foreign Affairs might not agree, but the diplomatic work of our Embassies — in the EU, for example — is diminishing and the commercial role of our missions abroad could be expanded. The Minister for Enterprise, Trade and Employment might discuss this matter with the Minister for Foreign Affairs. All our representatives abroad, whether in the Diplomatic Service or semi-State companies, should work together for the betterment of Ireland.
Without reiterating what Senator Taylor-Quinn has said, I compliment the Minister on her openness in accepting amendments on all Stages of the Bill. It has been strengthened by them.
I understand the aggregate grant limit of £1.5 billion represents a compromise. I am sure the concerns expressed by Deputy Rabbitte in the Dáil are unfounded. When an organisation is given responsibility it is important that it is given ownership of its task and that a miserable limit is not placed on its budget. I do not suggest that a limit of £1.5 billion is miserable but a limit of £2 billion would have better reflected the current situation. I welcome the increased emphasis on research and development.
It is important that all staff feel that their needs are accommodated and that the reorganisation will not affect their career paths. An organisation which is concerned with initiative and innovation must encourage these qualities in its staff and allow them to move through agencies, to cross-train and to experience different parts of the organisation. The Minister has referred to a customer service focus, a bottom up approach and a client focused attitude. These are important. I compliment the Minister and her officials on the management of this legislation.
I join the previous speakers in complimenting the Minister on her willingness to accept suggestions from both Houses. The acceptance of a large number of amendments is an indication of that willingness and generosity. This legislation will perform an important task.
I am glad the Minister accepted the proposals for the structure of the board and the length of time each member would serve. A cap of ten years on the period in office of the chairman and chief executive and five years in the case of other members is worthwhile.
I am disappointed that my suggestion that four of the 12 board members would be women was not accepted.
Seven, surely.
Four members have been appointed and all are men. Eight places remain to be filled.
Senator, I must point out that we may only discuss the amendments made by the Dáil. We cannot discuss amendments which were not made.
We fought that fight very well last time.
I merely mention the matter in passing. Had I not been interrupted the matter would hardly have been noticed. That is peanuts in the international context, in terms of the amount of money required to put a country in a pole position with regard to science and technology. In a previous Seanad debate — I am not sure if it was on this legislation — I referred to the Eureka programme in which member states pool their resources to enable projects to be carried out for small business. Ireland contributes about £2 million to the fund and that contribution should be increased considerably.
A great deal more must also be done about research in Irish universities. The holder of a primary degree cannot benefit from any State grants to study for a masters degree or a doctorate. These are basic areas which must be examined again. There has been investment in certain areas of technology but unless it can be applied to higher degrees of research we cannot benefit properly from the resources currently in place. We must assist research at all levels.
I am delighted to see the inclusion of section 52 which will go a long way towards assuaging our concerns about the staffing arrangements. It states:
Where a vacancy arises for a position in the staff of Forfás, the Agency, IDA or the NSAI, a member of the staff of any of those bodies may make an application to fill the vacancy and his or her application shall be considered by the body in which the vacancy occurs.
That is extremely important. Applicants will be selected on the basis of what is required by the relevant agency. Staffing conditions have also been strengthened considerably. I was concerned there might be inadequate provision and that the manner in which the staffing arrangements were outlined was open to abuse or at least to perceived abuse.
This is important legislation. The aim of streamlining development and marketing is a good one which will contribute to the development and resourcing of indigenous industry. It will make us competitive in markets both at home and abroad. These are necessary developments and the Minister has gone about her business in the right way.
I hope the agency is a success and the end result is, for the first time, productive and successful indigenous industry. Most of our industry is bolstered by the multinational sector and while that is wonderful, it is vulnerable to the first wind of depression that might blow in other parts of the world. It is, therefore, extremely important that we have a firm and healthy foundation for industry and research at all levels. I am not unhappy with the reduction to £1.5 billion. It covers a three year period and there is an opportunity to review it. The sum can be changed if required as the occasion arises.
I congratulate the Minister and I hope the legislation works effectively.
I thank Senators for their contributions and for their support in speedily passing this legislation. It is significant that the legislation has been dealt with before the summer recess because we can now proceed to establish the agency.
I thank the staff in the office of the Attorney General and the parliamentary draftsmen for fast tracking this legislation. It is always difficult to get legislation drafted because of the high level of demand on the limited resources of that office, but the staff there worked extremely hard to produce the Bill and to assist us with the amendments.
Senator Costello referred to gender balance. Northern Ireland has a system in which one can declare oneself male, female or other. Two members of the board have been appointed, the chief executive designate, who will be an ex officio member, and the chairman designate, Mr. Pat Molloy. I have not made any other appointments so it is not true that there have been four appointments. Ten more appointments must be made by the Government in the next few weeks and we will take account of the comments made in these debates. We want to appoint people with relevant experience and an amendment to that effect has been included in the Bill.
Senator Cox expressed concern about the aggregate sum. It was decided to reduce it following the comments made in the Dáil. The comments were reasonable in the circumstances. The individual estimates for the different agencies form part of the Estimates process and the Oireachtas has an opportunity to discuss them each year. However, after a three year period it might be no harm for the Oireachtas to have the opportunity to discuss industrial policy and that is why I agreed to reduce the sum. When this Government is negotiating its programme for government for its next term, it will have to review industrial policy into the early part of the next century. I look forward to coming before the House again in some capacity during the term of office of that next Government, of which I intend to be a member.
This legislation is not just about setting up a new agency but about a new approach to industrial policy. I thank the Senators for the spirit in which they dealt with the Bill. They took it seriously and looked at the issues in depth. The Bill is the better of the consequent improvements that were made.
Officials do not like to be named so I will not name mine. I have had the privilege of working with a small but dynamic group of officials for the past year. Three of them are in the Chamber while the Assistant-Secretary could not be here. They have worked extremely hard to bring forward this legislation and I am deeply impressed by their commitment and the manner in which they went about this task. They have been negotiating with the unions involved once every three weeks for the past six months so they have left no stone unturned. I want them to know how much the Government and I appreciate the enormous efforts they have made to bring us to this point and I look forward to the continuation of our work when the agency is established.
It is intended to establish the agency within the next two weeks, assuming the President signs the legislation into law. I thank the Cathaoirleach and the Clerk of the Seanad for facilitating this debate today as I am aware the Seanad has a large agenda. I am also grateful for the opportunity to initiate the Bill in the Seanad. It was good that the Seanad had the first opportunity to review it.
Senator Taylor-Quinn made an important point about our diplomats with which I agree. The Government recently decided to upgrade the consulate offices in the United States. In doing that we have also given a commitment that all new staff at the level of consulate general who are sent to such offices will become involved with the industrial development agencies before taking up their positions. They will be very much involved in industrial development, trade and promotion.
In the context of the political problems in Northern Ireland hopefully being resolved, there will be a greater role for our consulate offices in the trade, promotion and industrial development areas. That decision was made recently and it was probably announced by the Minister for Foreign Affairs. I hope I am not gazumping his announcement. It is a significant development and the Senator's point was valid. We have very few people working for Ireland internationally. Our entire diplomatic service is smaller than the British Embassy in Washington in terms of its budget. We get great value from that service and the issue is to focus it in a way that will deliver the best possible result and give the best value for the tax-payer's money.
I look forward to returning to the House very soon with more legislation.
Question put and agreed to.
Question, "That the Bill do now pass", put and agreed to.