Dáil Éireann debate -
Thursday, 5 Nov 1959

Vol. 177 No. 6

Petroleum and Other Minerals Development Bill, 1959—Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Dillon

I must say that what Deputy Norton said in connection with this Bill requires to be borne in mind. It is a fact that with the introduction of the Petroleum and other Minerals Development Bill, a wholly false impression could easily be given unwittingly in the country. So far as we are concerned, we are quite satisfied that a Bill of this character should be enacted but we do not want to make its enactment the occasion for suggesting to the public that we or anybody else in this House expect gushers to break forth all over the country.

There are, however, one or two points made by Deputy Mulcahy and Deputy Esmonde which I wish to underline. The whole question of petroleum and mineral royalties is a very complex one and this is a highly technical Bill with which the Minister was good enough to furnish an explanatory memorandum to assist us in following its provisions.

I should like to refer to two minor matters, though really there are three. The first is the question of royalties, and I want to speak rather as the representative of the ordinary country people amongst whom I live and have my living. Owing to the particular form of land tenure in this country, the mineral rights have been in many cases—50 per cent. of all cases according to the Minister for Industry and Commerce—reserved to the Land Commission, and remain in respect of the other 50 per cent. in the owners of the land. I should like to support what Deputy Mulcahy has said, that consideration might be given, when compensation is being determined in the event of oil being found on anybody's land, to allowing that compensation to take the form, in part at least, of some royalties on the continuing produce of any oil deposit that might be found under the land owner's holding.

I think it would be hard if any citizen of this State were fortunate enough to discover his land contained an oil deposit that the only result, as far as he was concerned, would be that he would get an eviction notice and a lump sum of money. I think he ought to have the right to feel that, as is the case in most countries, such a development would redound to his advantage so long as the company conducting the exploration, and the State, were deriving advantage from the oil deposit which had been disclosed.

The second point I want to mention is that in the Minerals Bill, that is the existing minerals legislation, there is provision that the Minister can give a man a prospecting licence, and that man has a right to produce that prospecting licence to me, or to any other citizen, and on foot of it can enter my land and carry out certain works there. In the course of carrying out those works he naturally does a good deal of damage. Let us say that the amount of damage done is agreed to be £1,000. He walks out and simply says, "I have no money." As I understand the position at the present time, the landholder applies to the Mining Board but, in the last analysis, the Mining Board will tell the landowner his remedy is against the man who did the damage.

If that man has no property, if he has gone bankrupt, then the landholder has recourse to nobody, and nobody seems to remember that, in the first instance, the landholder was compelled to admit the explorer by the fiat of the Minister for Industry and Commerce, given under the mining code. It seems to me an obvious injustice that any man should be put in the position that he is required by statute to let someone in on his land to do damage, and then be left in the position that the man he was forced to admit on his land has now no property, and he has nobody to turn to to compensate him for the damage done.

I would suggest to the Minister that that be investigated and some kind of security fund established to provide against such a contingency. In the particular case which came to my notice, fortunately I believe that though at first there was a difficulty in recovering the compensation, subsequently agreement was arrived at and the licensee produced the money and the case was equitably settled. It struck me at the time I was investigating the matter, if we had not been able to arrange it, the fate of the unfortunate land owner would be very unjust.

The last minor matter to which I want to refer is one mentioned by the Minister. He said he proposed in the Bill to amend the law—that under existing law when he issued a licence, every individual landholder in the area in respect of which the licence was issued shall be notified by registered post—but now he proposes to substitute for that a notice in the paper which would contain a declaration that there was a map available for examination in the Geological Survey Office. Does the Minister think that is sufficient notification? Is it enough to tell a small farmer in Bangor-Erris, by a notice in the Western People, that a large area has been scheduled, and that if he wants to find out if his holding is upon it, he can go to the Geological Survey Office in Hume Street? I doubt if that is sufficient notification.

I think there ought to be accessible in the Garda barracks in the area, or in some readily available place, copies of the map to which the landholder might refer. I think we are taking a good deal away from him when we take away his right to be notified by registered post, and I am doubtful if we should take that right away. I admit it is a nuisance to have to do it, but people whose rights are being interfered with are entitled to serious consideration. But, if we do decide to take away this existing right I urge upon the Minister that we have an obligation to make the relevant information available in a more convenient form than is suggested in this Bill.

I could imagine a map being deposited in each Garda station. I could even imagine a map being deposited with the secretary of a county council, but I should like to see it available at a place to which a country person would have access, and in the custody of the kind of person to whom country people can talk, so that if a man went in there and said he wanted to find out if his farm was affected— that is if he went into a county council office or a Garda station—he would meet there the kind of people who would understand what his anxiety was, and would be able to give him an answer.

I yield to none in my admiration of the staff in the Geological Survey Office in Hume Street, but I could imagine a neighbour of mine from Ballaghaderreen, by the time he gets to the brass plate on the office door in Hume Street, would be so alarmed by the dignity of the surroundings that he would find it extremely difficult to formulate his inquiry in a way to extract the information that would satisfy him and, if that information were vouched in such surroundings, in nine cases out of ten he would come back to Ballaghaderreen and say he did not know what the man said to him. Therefore, I suggest that some more careful way of notifying these people should be adopted if we decide to suspend the existing arrangement.

I am glad, and I am sure every Deputy in the House is glad, that this company is coming forward to bore for oil in Ireland. I am sure we all hope they will find oil to our mutual prosperity but, at the same time, I am sure the Minister will join with myself and Deputy Norton in sounding a note of prudent caution that while hope is a legitimate virtue, prudence is also a virtue which should be observed.

Mr. J. Lynch

I am glad that the Bill was received in the manner suggested by both Deputy Dillon and Deputy Norton that is in a sober manner and without any undue hopes or expectation. I, like the Deputies who spoke, do not expect to see gushers appearing all over the country but it is at least of some advantage to us that we have a company prepared, at their own expense—I should like to emphasise that to Deputy Esmonde—to prospect for oil throughout the country.

Deputy Norton asked why we gave this company exclusive rights over the entire country. In the first place, oil exploring companies and people who develop oil deposits are accustomed to work in territories of much greater size than the entire area under our jurisdiction. Secondly, it was part of the agreement that they would get such exclusive rights and unless they were given them, it was probable— possibly almost certain—that they would not have entered into the agreement. There was no other proposition of a nature that would warrant dividing the territory between this company and other companies. In the long run, the fact that we have a company capable of carrying out a systematic exploratory undertaking over the entire country is a better arrangement than having a number of people who would possibly overlap and might even get in one another's way. The best agreement possible was reached and that envisaged rights extending, in the first instance, at any rate, over the entire country.

A number of questions were asked and many were of a nature that would perhaps best be dealt with on the Committee Stage, but there are some that I should advert to before concluding. Quite rightly, Deputy Mulcahy asked that care should be taken to cause the minimum damage in any entry on a person's land. I should like to assure the Deputy that there are provisions in the Bill, as he will have seen, which enable the Minister to ensure that work is carried out in a reasonable manner. On the compensation side, if it appears that the amenity being acquired or destroyed outweighs the advantage of compensation, the Minister will have power to deny the granting of such facility or the conveyance to the exploring company of such an amenity. He will have power to prevent such an activity.

In the event of the exploration being too slow, as Deputy Mulcahy put it, or being concentrated in an area which, perhaps, might not have the same potential as another area, the Minister has no power to ensure that the exploration should be stepped up, but there is, in the agreement provided for under this Bill and there will be in any other agreement that may be entered into by a subsequent company, sufficient inducement and sufficient safeguard, in my opinion, to ensure that the development will take place as expeditiously as possible, particularly having regard to the financial commitments into which the company in this case have entered and into which other companies who might acquire rights under the legislation will be required to enter.

The rate of development, therefore, will be largely determined by the rate of expenditure required and, in the long run, there is sufficient safeguard to ensure, even from the narrow business point of view, that the company will expend as much money as they are required to expend.

As far as the precedents which might exist for this form of agreement, to which Deputy Mulcahy referred also, the Ambassador Oil Company at the outset indicated the type of agreement they required. In doing so, they indicated that this is the type of agreement they would make if they were doing similar work in America and is in fact the type of agreement they did enter into when undertaking similar work in the United States. I can assure the Deputy that the pattern of their work here will follow closely the pattern they have followed in similar ventures in the United States.

Deputy Dillon asked whether in a case where the surface owner was not the owner of the mineral rights compensation by way of royalties, a continuing sum of money, should be paid if oil is produced in commercial quantities. I think the existing provisions for adequate compensation for the surface owner would be sufficient and that it is only right that royalties should be paid as a continuing compensation to the person who, in fact, possesses the mineral rights. I can appreciate the concern the Deputy has for the surface owner who is entitled to, or declared to be entitled to, compensation having to have recourse to a man of straw. At this stage, I can only say that in the giving of licences, the Minister must naturally have regard to the strength of the resources of the applicant and in general, such a licence would not be given to people or organisations who would appear to be unable to meet their compensation commitments when such arose. I do not say offhand whether or not it is possible to establish a fund such as the Deputy had in mind, but at least it is a suggestion that merits consideration.

Mr. Dillon

It might be possible for them to deposit some kind of bond, if they did not want to put down money.

Mr. J. Lynch

That is a matter that can be considered between now and the committee Stage, or even on the Committee Stage.

So far as the publishing of notices and the depositing of maps is concerned, I think that, apart altogether from publishing the notice of intention to give a licence to any operator, there would be an obligation to display the notice in a public place, such as a post office to which the surface owner would have access. If it is not in the Bill already that the map should also be deposited in a public place I can assure the Deputy that I shall arrange for that to be done.

Deputy Esmonde expressed some concern about the powers of the Mining Board to give adequate compensation. I should like to assure him that the Mining Board is a body which has been in existence for some time. It is composed of people who have the special qualifications for determining these matters. They will, in effect, be a strictly neutral body as between the person who suffers damage and who would be looking for compensation and the person who does the damage. As far as they are concerned, they will act as arbitrators. I can assure the Deputy that in every case they will have full regard to the extent of the damage and the commercial value of the property. In the case of the acquisition of property, the Deputy will see that in the Bill there is a provision that compensation will be fixed on the basis of what a willing purchaser would give to a willing vendor. I think no more extensive provision could be inserted in the compensation clauses of the Bill than this.

Sir Anthony Esmonde

There is an appeal?

Mr. J. Lynch

There is no appeal on question of fact but in regard to any matter where the aggrieved person thinks a question of law is involved, if the Mining Board do not state a case to the High Court, he may direct the court to state such a case. It may appear on the face of it that it is an involved procedure. On the other hand, in order to ensure that no frivolous matters are presented by way of case stated to the High Court and so hinder or delay any necessary development, I think the provisions contained in the Bill are adequate and are a reasonable safeguard to ensure that no bona fide owner of a right, whether it be an easement or on the surface of the land in which the operations are being undertaken, will be unduly denied proper recourse to compensation or unduly denied a fair hearing of any case he has to make.

Sir Anthony Esmonde

Both need not accept the findings of the Court.

Mr. J. Lynch

In a matter of a case stated, the High Court will be asked to determine what the legal position is. The board will have no alternative but to accept, as a result of the case stated to the High Court, the interpretation of the legal position. The Mining Board will not have any need to refuse to accept what the state of the law——

Sir Anthony Esmonde

Therefore, it is an appeal?

Mr. J. Lynch

It is a form of an appeal, yes. I should have dealt with the question whether the 40 per cent. of the net profits in connection with the disposal of the oil, once it is commercially produced, includes such items as rates, rents, or any other obligations. The 40 per cent. is, in fact, exclusive of all these charges. In other words, it is the net profit of the company. I think it is a reasonable standard——

General Mulcahy

Does it include customs duties paid on any of their imports?

Mr. Dillon

That is a six mark question.

Mr. J. Lynch

Sin ceist eile. As a result of a whisper I hear, I can say it does not.

General Mulcahy

Or excise duty paid on home-produced oil?

Mr. J. Lynch

I understand, no. I think I have answered, to a large extent at any rate, some of the questions put to me. Deputies will appreciate that it is a complicated Bill. The Committee Stage will give us an ample opportunity of examining it in more detail and any points I have not answered today can be gone into in more detail on that stage. I should like to endorse what most of the Deputies who spoke to the Bill said. This Bill is not being presented as something that is going to produce oil all over the country. As I said, it is a highly speculative investigation. If this company does, in fact, succeed in finding oil, then, as Deputy Dillon said, it will be to our mutual advantage. We can only hope that the advice given by our own Director of the Geological Survey will be proved incorrect and that oil will be found. We should all be glad.

Sir Anthony Esmonde

If the Land Commission annuities are not paid and if sufficient money is not paid to discharge the annuities, has the landowner then any rights or does the Land Commission retain all the rights?

Mr. J. Lynch

Many of these annuities may be discharged subject to equities which might include a reservation in the Land Commission of narrow rights. These matters will be determined by the title deeds in respect of each parcel of land. These details are fully covered in the folio as a rule.

Question put and agreed to.

Committee Stage ordered for Tuesday, 24th November, 1959.