Under this Section, a company is set up with power to purchase lands. If my memory is correct, at the time of the handing over to the Department of Lands and the Department of Agriculture of some of the lands in Bangor Erris, which were in the possession of the former Min Fhéir Company, the owners were not paid for that land. At least, the land was acquired and, simply because the owners' title was not absolutely up to date, the owners were not paid at the time of the handing over to the two Departments I have named. The point I want to bring to the Minister's notice is that in those areas it is the very poorest and smallest farmers whose land is acquired. Even though it is only mountain or blanket bog would the Minister take steps to ensure that the new company will pay the owners or help them to clear up the title in the same way as the 1956 Forestry Act allows the Forestry Division to do? It creates very grave injustice when land is taken over and used by a company if the former owners are told that it is their fault that they are not paid, that their title is not up to date and that nothing can be done.
Committee on Finance. - Grass Meal (Production) Amendment Bill, 1959—Committee and Final Stages.
The lands in question being made available by Bórd na Móna are lands already acquired for other purposes which were not found to be useful for Bórd na Móna's purposes. The acquisition was achieved already and this is a sale of these lands to Min Fhéir Teoranta.
I agree but the point is that Bórd na Móna have extraordinary powers of acquisition for their purposes and Min Fhéir did get Bórd na Móna to use their powers to acquire the land suitable for them.
It was already acquired.
But not paid for to the owners by Bórd na Móna.
I am afraid I cannot answer for Bórd na Móna.
It hardly arises under this Section.
The company that is being formed under the Section will be using this land.
Do they owe the money?
I submit that they do.
Morally.
No. In fact.
No.
The fact that Bórd na Móna took over land from, say, John Walsh and does not pay John Walsh for it and then calmly hands it over to another company, does not clear the receiving company of the sin.
Obviously, we cannot try it here.
I thought it was a matter that should be brought to the notice of the Minister because it was not done heretofore and it is time that somebody did it.
If the people have not been paid, then they ought to be paid. That is perfectly clear. The Minister, doubtless, will say this much for it that, if he finds they have not been paid, he will query Bórd na Móna.
I certainly shall. It is the first I heard of it.
During the last period that I was Minister I was absolutely deluged with complaints by land owners whose land had been taken over by Bórd na Móna and who were not paid for it due to faulty title. I can understand the Bórd na Móna argument.
I may be of some assistance if the answer I get is the right one. Where is it proposed to set up this grass meal project? Is it at Glenamoy or Bangor Erris?
The intention is to give the new company freedom to select the most suitable site for their purposes. As the Deputy knows, they already selected a site which they thought was most suitable. There are certain other lands and the peatlands scheme is being carried on there. It is not proposed to interfere with that. It is hoped that, if not in the immediate vicinity, in the near vicinity, there will be land available.
The Minister will appreciate that the use of the geographical term "Bangor Erris" is misleading because Bangor Erris is a village at least eight miles away from the site of the present operations and where the former operations of Min Fhéir were conducted. In relation to Deputy Blowick's complaint, there are owners of land acquired by Bórd na Móna in the Bangor Erris immediate vicinity who have not been paid for their land and that may not apply to the land at Glenamoy.
I received at least one complaint about some of the land taken over formerly by Bórd na Móna and handed over to the former Min Fhéir at Glenamoy.
I understand the Minister to say that he will investigate the difficulty of people whose land has been acquired by Bórd na Móna and try to find a way out of it. I want to make a suggestion now. The Minister has said here that, in reviewing all the arguments, pro and con, in relation to this proposal the Government's mind is being profoundly influenced by the social aspects of this proposal and that, even if conviction were carried to his mind that its economics were not wholly sound, the social advantage to be served would still persuade him to persist in this enterprise. Very well.
Accepting that declaration, I want to make now a constructive proposal. You are going to have a board of directors, I understand, of local people. If this is largely a social development in this area for the benefit of people who otherwise could not get employment and who are in poor circumstances, is not it reasonable to suggest that the local directors will act in an honorary capacity? Would there not be something positively indecent in erecting a board of directors for what is notoriously a social service and then announcing that they are all to receive individually as fees an annual income for the rest of their days? There must be some limit to the indecency of individuals in association with a project of this kind.
If it is a social service they should no more consider accepting remuneration for it than would a member of a board of guardians or the St. Vincent de Paul Society. I suggest to the Minister that he should be able to find some responsible citizens who will be prepared to act in a voluntary, honorary capacity and that if he cannot appoint somebody like that he should appoint a board of two or three civil servants who will do their duties perfectly and with a deeper regard for the public purse than anybody else is likely to do.
In general it has been accepted that the payment of members of public boards by way of some small remuneration is justifiable to the extent that the Minister to whom that board is responsible will feel that he has some control over the activities of such members in order to ensure that they devote themselves to the purpose for which the board is set up. That seems to be the idea behind the payment of members of such boards who are paid small annual remuneration or fees. Having stated that, I shall have regard, in the setting up of this board, to what the Deputy has suggested and I can assure him that the type of board which will be set up will be the best possible to ensure the carrying out the purposes of the Bill.
Then the Board may be of a voluntary character?
I shall consider that.
I should like the Minister to consider this aspect of the matter on the general principle of the setting up of these companies because of something that came to my notice some little time ago. There is, as the Minister knows, in certain memoranda and articles of association a provision that the directors of a company cannot contract with the company. Sometimes that stipulation is waived in relation to private companies. I want to put a query to the Minister for Industry and Commerce, not specifically in relation to this company but in order to be within the rules of order, that there should be some such stipulation in State companies with, perhaps, the overriding provision, that in the event of its being essential for a director of one of these companies to contract directly or indirectly with the company, not merely would notice be given to the company, but also to the Minister, of that director's interests.
It would be highly undesirable, and the Minister will understand that I am arguing in this case for the purpose of arguing the principle, that any director of any State-sponsored company could be in the situation of being personally interested in the purchase of, say, machinery for the company of which he is a director without the full disclosure of that person's connection with the firm from which purchases are made being made to the Minister concerned. I do not suggest that there will not be occasions on which Director A may be associated with Firm X and perhaps Firm X tenders for work. It may be the best tender but before that tender is accepted by the Board of a State company the Minister, who is the real boss, should be informed and there should be the fullest disclosure.
The memorandum of articles of association of this company should have that provision. If that provision is not there then the honorarium by way of fee which the Minister is fixing, and which he fixes as being a reasonable figure in his judgment, may not be the real honorarium. It is vital in my view, as I said in relation to another Bill, that where a State-sponsored company gets a subsidy from the Minister, the Minister should be told what benefit the directors may get out of mat subsidy. It would be entirely illusory if the Minister were to fix the fee of a director at £X whereas, in fact, the fee was really £X plus Y because the person concerned was getting a commission in respect of the company's purchases. In a case like that the law is that there should be a full disclosure to the company. In the case of a State-sponsored company it should be a disclosure not to the company alone but to the responsible Minister.
Do I take it that when this company is formed the Minister will be answerable to the House for the expenditure by the company on his direction and for purchases made by the company and the source from which the purchases are made? Do I take it that that information will be available to Deputies?
There is the provision in the Bill setting up Córas Tráchtála as a statutory body requiring members of the board to disclose any activities they may have in connection with the board's operations. That provision could be made to apply with equal effect to the members of this proposed board by asking them, in their letter of appointment, to disclose any activities they might have. The fulfilment of that condition can be assured by close scrutiny of the annual returns.
As far as Deputy Lindsay's point is concerned, the Bill requires the company to make annual returns, and I do not think there is any facility there beyond those which obtain in other State companies to inquire too closely into the activities of the company. It will be open to the Minister to require from the company any additional information over and above what is disclosed in the annual report of the company to him. I think the Deputy can be assured that the activities of the company will be watched closely from that point of view. If there is any danger of anything happening such as the Deputy has in view it will be brought to light.
I want to refer to a point made by the Minister in reply to Deputy Sweetman or Deputy Dillon. The reason he gave for paying salaries or directors' fees was that it gave the Minister more control over the individuals concerned in that, if they were paid in such a way, they would have to perform a certain task. Is the Minister aware that in some of the State-sponsored bodies provision has been written in whereby a director must resign if directed to do so by the Minister? If a provision of that nature were included in this Bill, would it not be another reason for the directors not taking salaries, or taking salaries of a purely nominal value? We are discussing this as a social matter because there are no commercial arguments in favour of it.
Suppose at the end of a year after a considerable amount of this money had been spent and, after this close scrutiny promised by the Minister, it is discovered that a large amount of money has gone directly to a director, or to a corporate body of which he is a member, what will the Minister do then?
I am sorry. I was reading something. Would the Deputy repeat the question?
Suppose that in the course of the first year it becomes apparent, from this close scrutiny which the Minister promises, that a considerable amount of goods had been purchased from a firm owned by a director, or from a body of which a director is also a member, what does the Minister do, once the abuse has been noted?
In these matters one has to depend on the honour and integrity of the members of the Board. The Minister is not likely to appoint a person in whom he cannot have trust but, as I indicated to Deputy Sweetman, there should be in the letter of appointment a request asking for disclosure of any interest on the part of a director to be appointed. Beyond that I do not think it would be possible to anticipate any mal-practice that might occur. That is common to all countries.
I think the existing law provides the answer, provided the Minister applies it. The Minister can put in the memoranda and articles of association a provision that a director of a company may not engage, either directly in contracts with the company. or indirectly through an associate without disclosure, (a) to the company and (b) to the Minister. Then, if he does it, he is guilty of a criminal offence against the company law and criminal proceedings could be taken against him. Otherwise, in general parlance, the position would be that he would get away with the swag and the Minister could sack him but, if it is put in the articles and memoranda of association, it is a matter beyond question of criminal company law, and nobody is going to break that lightly.
That answers Deputy Lindsay.
The total amount that will be made available to the company is £200,000. In the Committee's Report on this project I notice it is estimated that the total costs will be £165,000. I think the Minister said during the discussion on Second Stage that the project would not be in production until after a period of five years. Is that correct?
After five years it should be in full production. That was according to the report.
On the basis of that, what number of men will be employed during that five year period, and out of what sums of money will those men be paid? There is no figure in this estimate to cover working capital.
If the Deputy would read on, he would find that there is provision in the next paragraph of £35,000.
I am allowing for that figure. I mentioned only the £165,000. Is that £35,000 intended to pay all outgoings and salaries of staff in the interim period of five years?
That is correct.
If £35,000 does that, they must anticipate employing a very small number of men. The Minister mentioned a minimum of 75 and a maximum of 150, but whether he intended that to apply at the end of five years I do not know. Could he give us some idea of what number will be employed up to the end of this five year period. If the answer is anything more than a handful of men I suggest that the £35,000—the difference between capital outlay for acquisition of factory buildings, etc., and £200,000 —will only be adequate to employ a small number of men over that period. Twenty men employed at £5 a week for five years will cost £25,000, and surely they are going to employ more than an average of 20 men a week?
They were employing 31 at the time they were wound up but, over that period of five years, the project will be in part production and it is reasonable to assume they will be able to earn money to supplement that £35,000.
That is assuming they make a profit.
It is assuming they can sell ther product.
On this Section 4, I want to be recorded as dissenting from subsection (2). Do you want to put the section, in order to record me as dissenting?
The Deputy can be recorded as dissenting.
I also wish to be recorded as dissenting. I also asked to be recorded as dissenting yesterday. I think it is very wrong.
I also wish to be recorded as dissenting from this subsection.
I think the Minister was wrong in saying 31 men. I thought it was 23.
Thirty-one is the figure I have.
That is what I am trying to check. I think the Minister was nearer right than I was. It was 30, not 31 nor 23.
My brief says 31.
On the 4th November, 1954, Mr. Scanlon attended in the Minister's office and stated 30. I am only commenting on what Mr. Scanlon said. I would not accept anything he said in contradiction to the Chairman of the company. May I ask the Minister when the memoranda and Articles of Association are formulated, would he put a copy in the Library?
Yes.