Dáil Éireann debate -
Wednesday, 20 Feb 1974

Vol. 270 No. 7

Control of Exports (Temporary Provisions) Act, 1956 (Continuance) Bill, 1974: Second Stage.

Minister for Industry and Commerce (Mr. Keating)

I move: "That the Bill be now read a Second Time."

The Control of Exports (Temporary Provisions) Act, 1956, which was enacted for a period of three years and has been renewed at the end of each three-year period, will expire on 31st March, 1974.

The purpose of this Bill is to continue the 1956 Act in force until 31st December, 1977.

The Act empowers the Minister for Industry and Commerce to prohibit by order, the export of industrial goods save under a licence issued by him. Such orders have a life of 12 months only and may be annulled by resolution of either House of the Oireachtas at any time during that period. Control is at present in force on a range of goods under the Control of Exports (No. 2) Order, 1973, and the Control of Exports (Southern Rhodesia) Order, 1973.

On Ireland's accession to the European Communities it became necessary to harmonise our legislation relating to export controls with that of the Community subject to the concessions relating to specific commodities which had been negotiated for Ireland in the Treaty of Accession. In effect, this resulted in a continuance of our existing export controls with a single exception, horns and hooves, and a control on the export of pure copper waste and scrap was added in order to comply with the Community export control on this scrap.

As a member State of the EEC, Ireland is, of course, obliged to comply with the requirements of Community law in the context of trade in ferrous and non-ferrous waste and scrap to Third Countries. Since the supplies of iron and steel scrap and of waste and scrap of aluminium, lead, zinc and copper alloy arising in this country are essential to the needs of Irish users, it is in our interest to apply the Community controls on the shipment of these scrap metals to Third Countries. As regards trade in them to the Community markets we are entitled to maintain our controls on scrap of non-ferrous metals until 1st July, 1975, and on iron and steel scrap until 31st December, 1977.

For the following reasons, therefore, I consider it necessary to have continuing powers to maintain the existing export controls and to enact the appropriate legislation for the purpose:

(a) to conserve supplies of scarce raw materials, e.g., scrap metals, for the benefit of home industry;

(b) to ensure that strategic materials are not exported from this country to undesirable destinations, or that this country is not used as a base for such trade from elsewhere;

(c) to comply with the mandatory resolution adopted by the United Nations Security Council requiring member States to prevent the export of goods to Southern Rhodesia;

(d) to have immediately available a means of dealing with any emergency which might denude the country of essential materials before corrective legislation could be enacted and to impose such new export controls as may be required in the interest of Irish and Community users up to 31st December, 1977.

For the reasons mentioned I commend this Bill to the favourable consideration of Dáil Éireann.

Mr. Brennan

I agree with the necessity to have this legislation continued. I note what the Minister states about the termination of the legislation. I thought, since it is a Bill which enables the Minister to make orders of various kinds in relation to various products and materials, the actual termination of the legislation, as such, was not important; that it might be necessary to retain it indefinitely. One can always foresee the possibility of controls being needed in many directions.

The Minister did not state—but he will confirm, I am sure, to the House —whether these controls include, at any stage, the export of timber grown in this country, whether from our new forests or old standing timber. I always have a sort of grievance about this because we have been exporting a considerable quantity of forest timber for some time and have left ourselves in a position where we have not sufficient raw material either for a pulp industry or an expansion of the chipboard industry. Some time ago, when the Minister was in Opposition we had proposals for the erection of a chipboard industry in the north west of Ireland—perhaps in my own county, or convenient to it—and the forestry people continually advised us that the raw materials were not sufficient to support a third chipboard industry. Indeed, so much was the stockpiling with the existing two industries at the time that everything would so indicate and, I believe, was contrived to so indicate at the time. In the meantime, exports of forest thinnings, which would have been admirably suitable for either pulp or chipboard, continued at a very high rate. I am not happy that the controls we exercised were sufficient. I say that because it is the first opportunity I have had of referring to legislation which embodies restrictive controls on exports.

I understand that hides, skins and pelts, as well as scrap metals, were some of the things which were controlled originally by separate legislation but after 1956 the Minister was enabled to make orders to control them. I think it essential that we have legislation of this kind in perpetuity. I am not too clear on the Minister's terminal date of 1977. Is this to comply with an EEC regulation which precludes us having legislation such as this or are we restricted from controlling exports to Third Countries after 1977? Will we continue to have the power to impose restrictions? Will there be a prohibition of exports of any material after 1977 to any country? The public are looking for an answer to mineral resources. I sought to have a question raised today which is of urgent public importance——

An Ceann Comhairle

The Chair has communicated with the Deputy. He may not raise that matter now.

Mr. Brennan

I should like to voice my disapproval——

An Ceann Comhairle

The Deputy may not refer to it at all. If he feels aggrieved, he may discuss the matter in my office but he must not raise it here.

Mr. Brennan

In relation to the control of exports which will be exercised by orders made under this legislation, we are in need of legislation which will monitor monopolies, mergers and take-overs. This is a matter of urgent public importance. Irrespective of decisions made officially or otherwise, it is relevant to refer to the need for legislation when dealing with the restriction of exports. This would go further than the powers conferred on the Minister in this Bill. This legislation would not be suitable for the type of exercise the Minister might have to perform in relation to mineral resources or to take action to prevent what is happening or threatening to happen.

As I have already stated, it is of grave concern that legislation be introduced to deal with monopolies, mergers and take-overs. This is a weapon which should be in the hands of the Minister. It could be used to the best purpose in accordance with each situation as it presents itself. The Minister might take the opportunity, when replying, to make a statement on this. That statement would be welcomed by the House and the country generally.

I have no objections to the continuance of the powers provided in the Control of Exports (Temporary Provisions) Act, 1956. Will the Minister tell us whether, after 1977, which is the terminal date in this two-section Bill, he will have retained any powers to deal with exports to countries, whether member countries of the EEC or Third Countries?

The scope of the Bill does not enable me to extend the debate, if my contribution is to be relevant. I am sorry that the Ceann Comhairle did not permit me to discuss the question which I sought to raise today. While I disagree, I must comply with his ruling. I will raise the matter on a more appropriate occasion.

Our exports are varied, complicated and important. So far as home production is concerned, raw materials are very important. Because of inflation which we cannot control, the price of imported raw materials is increasing. For that reason it is necessary that we reserve as far as possible our natural resources of raw materials.

I should like the Minister when introducing this Bill to have given an outline of the variety of products which were controlled in the past. If he has a list available, the House would be interested to have it in his reply. To what extent will these controls be necessary in the future?

Dr. O'Connell

Deputy Brennan mentioned sheepskins and hides. There is a restriction on the export of sheepskins and licences are required. Vested interests are responsible for this restrictive practice. How does the Minister view this? To protect these vested interests his predecessor restricted export licences. It was argued at that time that sheepskins were necessary and vital to Irish industry, whereas hides were equally, if not more, essential. I could never understand the logic of this argument put forward on every occasion by the Department of Industry and Commerce because this was a restrictive practice and served no purpose in protecting Irish industry. Will the Minister have this investigated or have our regulations been changed to come into line with the EEC regulations?

The Minister said we must:

...comply with the mandatory resolution adopted by the United Nations Security Council requiring member States to prevent the export of goods to Southern Rhodesia.

I support this. Does the Department get reports as to how the other member States of the United Nations are complying with this regulation? It appears to me that they are not. We, as a Government who are complying with the regulation, should insist that the other members comply too. There is evasion. We support the policy which denounces the regime in Southern Rhodesia.

I should like to refer to the scarcity of raw materials, especially scrap metal. The Minister said that it would be necessary:

to have immediately available a means of dealing with any emergency which might denude the country of essential materials before corrective legislation could be enacted and to impose such new export controls as may be required in the interest of Irish and Community users up to 31st December, 1977.

An interesting aspect of this is, would this not give us power to prevent the export of the actual raw material, the mineral resources of our country, before the necessary legislation comes into effect? As was pointed out recently, we are in the same position as the Arabs are at present in that they have an essential raw material and they are imposing restrictions on its export. We will now be given power, with the aid of these regulations and before the necessary legislation comes into effect, to deal with this. This aspect should be borne in mind by the Minister. We can restrict the export of the mineral resources of our country and this is very important.

I was delighted to hear Deputy Brennan state he was going to support the Minister in any action he proposes to take to prevent the loss of our valuable mineral resources. Deputy Brennan stated that he wanted to see proper legislation introduced to protect these mineral resources and that we must see that the people benefit from these. It is great to hear such a responsible statement from Deputy Brennan. From the response of the Minister it was obvious he appreciated it. It is important that we look at this, and to the vast wealth that is in our country, to ensure that we protect this wealth and that the people benefit from this wealth.

It has been admitted, not so much by ourselves but by experts abroad, that we are, perhaps, one of the wealthiest countries in Europe at present. However, it will be a sad state of affairs if foreigners can gain control over our mineral resources to such an extent that we are powerless. The only way we can do something about that is by the application of the Control of Exports (Temporary Provisions) Act, 1956 (Continuance) Bill, 1974. We should use this, if necessary, to ensure that our mineral resources are preserved and reserved for the benefit of the people. I hope the Minister will take speedy action to ensure that the interests of the Irish people are safeguarded in protecting our mineral resources.

Mr. Crowley

Like the other speakers I welcome this Bill. Any Bill that will conserve supplies of raw materials, particularly at this time, is welcome. The Fianna Fáil spokesman on Industry and Commerce, Deputy Brennan, mentioned the question of timber. At present we are involved in the export, to a considerable extent, of another very scarce raw material, oil. I believe 95,000 tons per annum is being exported in various forms. Would the Minister not consider it desirable that in present circumstances he should invoke the clauses in this Bill to ensure that we have this very valuable basic commodity kept at home?

A lot of our people are unable to go ahead in manufacturing industries, in agriculture and in the economic life of this country because there are restrictions on the sale of and allocation of oil but, at the same time, we are exporting in the region of 95,000 tons of oil per annum. If this Bill was brought into operation in this case it would be complying exactly with the terms of conserving supplies of any scarce raw materials.

I should like the Minister to let us know what consultations he has had with industrialists in relation to what are scarce raw materials. The obvious ones are there for all of us to see but there may be other materials that are not so obvious. Industrialists may not be aware that when this legislation is in operation they can appeal to the Minister to use his powers under it. I believe it is appropriate that we have this opportunity of discussing at this time the question of conserving our raw materials, the great mineral wealth we now seem to have in the country. We should see to it that that mineral wealth is not eroded by a few unscrupulous capitalists.

The Minister, even in this very tame Bill, has the power to spike their guns for them. He is the man responsible for issuing licences of any description for the export of any minerals or raw materials. It might be no harm if the Minister barked loudly at present and pointed out to those who are endeavouring to take over our mineral resources that it is not going to be plain sailing.

An Ceann Comhairle

That is hardly relevant on this Bill. I allowed Deputies to make brief reference to it in so far as raw materials could be related to exports but to go into the matter in any depth is not in order.

Mr. Crowley

In my view it is relevant because section 3 of the Bill states that the Minister may issue or refuse a licence at his discretion.

Dr. O'Connell

Would this come under No. 7 in the Minister's speech? It says:

To have immediately available a means of dealing with any emergency which might denude the country of essential materials before corrective legislation could be enacted.

An Ceann Comhairle

The Chair allowed latitude in that regard but the Chair wishes to dissuade Members from going into any great detail in respect of our mineral resources.

Mr. Crowley

I understand that the Chair is in a difficulty having refused the question from Deputy Brennan which he considered of importance.

An Ceann Comhairle

That should be left aside altogether.

Mr. Crowley

Deputy Brennan considered this question to be of national importance and I do not think we should be restricted in our debate by the fact that that was refused. In my view it is directly relevant. The Minister may easily refuse to grant licences to those people. If he does that they cannot export the goods. The Minister would be taking a step in the right direction in relation to any monopolies, mergers or take-overs that might be in the pipeline if he did that.

We all resent this blatant act of capitalism that is being performed at this time. That is not to say I am anticapitalist but I am against this blatant display of manipulation of money. More important, I am against the manipulation of the resources of the people. It is that which we are concerned about on this side of the House and we are going to ensure that the resources of the people are kept for the people.

The reason I have mentioned this is because this Bill, even in its limited scale, could certainly confine it. The Minister is as aware as anyone of how important this issue is and of the powers available to him. If necessary, he should bring in immediate legislation to control our mineral wealth. There were no problems while we had simply holes in the ground. We were not too concerned, in fact we were not even aware of the vast potential under the ground, but now that we are and now that we know its value and that there is such a world scarcity in these materials we must enact legislation necessary to conserve them.

There is a reference that we must comply with the mandatory resolution adopted by the United Nations requiring member States to prevent the exportation of goods to Southern Rhodesia. Deputy O'Connell raised the question of how other members are complying with this. Why is Southern Rhodesia alone picked out for this treatment? It is not that any of us condone what is going on there; we could make a much stronger case against Russia, which country raped Czechoslovakia, Yugoslavia and other countries. It is my opinion that we should invoke any clauses in this Bill to ensure that none of the strategic materials goes to countries like Russia.

When we are a party to these agreements do we really know they are being effectively kept? What kind of monitoring or checking do we have? Are we the only country involved in this kind of exercise? I know there are other countries who are party to this agreement but who are getting around it and who are supplying Southern Rhodesia, to our detriment I might add.

Dr. O'Connell

To the detriment of the principles of the United Nations.

Mr. Crowley

And also to the detriment of industries that may be involved. When we sign these agreements we incur a certain amount of industrial and financial loss but we do so because of our belief in a more basic fundamental principle. It should apply equally to all people who are parties to the agreements. There are countries who are blatantly contravening this agreement. They may not be doing it openly but may operate through second or third countries.

In this Bill we have power to restrict the shipment of scrap metals to Third Countries. If we decide some material should not be sent to Rhodesia, how do we know it does not reach that country? While some of these principles may be very laudable in their concept they are not so practical in their operation. Of much more practical concern to us is the preservation and conservation of our own raw materials and our mineral wealth. This reinforces the tremendous argument there must be for the establishment and erection of a smelter in this country because it is only by operating a smelter that we will be able to have full benefit from our mineral wealth. With the other speakers I welcome the Bill. I would urge the Minister to deal effectively with what is happening at present in relation to Tara Mines.

Minister for Industry and Commerce (Mr. Keating)

We have strayed a little but that is quite proper. To try to make some order in what I wish to say in reply I shall being, as Deputy Brennan asked me, by listing the materials controlled. If he would like it on the record of the House, I shall read out some sections of Parts I and II of the Schedule to the Order. I shall not list all items but will give a broad outline of what is controlled.

Mr. Crowley

Is there any other way of getting it on the record without reading it out?

Mr. Keating

I understand the Order is available but it will make sense of our debate and what I shall say later if I make clear the scope of the Bill. The Order states:

PART I.

Articles the export of which is controlled to all places.

Aluminium waste and scrap.

Articles manufactured for use as fertilisers of the soil.

Copper waste and scrap and alloys thereof.

Ash and residues of copper and alloys thereof.

Fissile materials and products.

Waste and scrap metal of iron and steel.

Lead and manufactures thereof...

Zinc waste and scrap, zinc-base alloy scrap and zinc ashes.

PART II.

Articles the export of which is controlled to places other than Northern Ireland and Great Britain.

Aircraft and parts thereof.

Arms, ammunition and military and naval stores and equipment.

Chemicals and petroleum products and plant and equipment for the production, processing, transportation or storage thereof.

Electrical goods and apparatus and parts thereof.

Electronic and precision instruments and parts thereof.

Graphite, artificial.

Iron and steel and manufactures thereof.

Machinery and parts.

Non-ferrous ores, metals and manufactures thereof.

Synthetic film for dielectric use...

Synthetic rubber.

Scientific instruments and apparatus... and parts thereof.

Ships and parts thereof.

Vehicles (including tractors) and parts thereof.

Most of that second section relates to strategic materials and to the embargo on arms or what might help a potential aggressor.

I find myself in agreement with many of the sentiments expressed by Members opposite and I welcome the support I shall derive in the coming months from those expressions of opinions regarding our natural resources. One of the fundamental principles of the EEC, now with nine countries and with a population of ¼ billion, is the free movement of goods. It is a central freedom in the Community. We are retaining certain controls for as long as we can but these powers will run out at certain dates, some of which were given in my opening speech as the middle of 1975 or the end of 1977.

Deputy Brennan raised the question of indefinite retention. My attitude to the Community is a matter of record. My recognition of the overwhelming desire of the Irish people, including Members opposite, to participate is also a matter of record. We are in a situation where I will use every mechanism that remains to me for as long as I can in defence of what I conceive to be the national interest and the protection of our natural resources. However, there is a profound and vigorous drive on the part of the Community towards the complete freeing of the movement of goods inside the Community and towards the application of all restrictions for trade outside the Community, not by individual members but by the Community institutions. That is the direction in which we are moving. I am in no hurry along that road but we are bound by the Treaty of Accession which we negotiated and there is a fairly rigorous time-table in regard to that.

Mr. Crowley

Even though we are a developing country?

Mr. Keating

We will think of every possible item—what was negotiated in the Treaty where there was some protection for a certain time and everything else we can think of. Of course, the best protection is to strengthen our home base in these areas. That is the reality of the situation.

With regard to timber exports, timber is separately controlled by another Act, the Agricultural and Fishery Produce (Regulation of Export) Act, 1947. It is a control exercised by my Department.

Mr. J. Brennan

Without interrupting the Minister's train of thought, could this not be applied to the control of timber exports?

Mr. Keating

I understand that there is some regulation on timber exports. In regard to timber in the rough: exports permitted of rough timber not exceeding eight inches in diameter. In regard to sawn material: exports permitted of timber not exceeding five inches in thickness but without regard to length.

I should point out also that this restriction and the operation of the Act, I understand, will expire on 1st July, 1975. That is part of our Accession Treaty and it is something we cannot get out of. There is a real conflict of interest between a nascent timber-processing industry and the desires of exporters to purchase here, probably strengthening the home industry so that they can compete, and this is the best protection which remains to us. We have this power. We use it to some extent currently. We will not be able to retain it.

I do not want to dodge the issue of monopolies, mergers and take-over legislation. I think it fair to make the point—and I will not anticipate answers to Parliamentary questions or other debates or the discussion on the Bill—that where an effort is being made by a foreign company to take over another foreign company in a foreign country our legislation and our actions have no bearing on that. Secondly, where the company being bid for does not in any sense enjoy a monopoly position in the country there is no bearing of monopoly legislation on that. I just wanted to make those two observations.

I agree entirely with the need for monopolies, mergers and take-over legislation. I first looked at the Bill carefully about two months after coming into office. We came into office in the middle of March. We were very busy so it was mid-May before I looked at it. I glanced at it then and when I examined it I thought it needed strengthening. To be reasonable that involves a good deal of consultation. As people who were Ministers will well appreciate, there are delays not of Ministers' making and if you are to draft good legislation which will stand up in a sensitive area, the draftsmen must have time to get it right and you have to talk to people. I do not think it is unreasonable that it is not yet enacted but I agree entirely on its importance and urgency. That is really an aside.

Rhodesia was also mentioned and the prohibition on exports to Rhodesia. For the sake of clarity. I should say that the resolution of the United Nations under which we are acting is a mandatory resolution. One has, of course, the option of not carrying out the mandate but in regard to the United Nations we try to behave meticulously and well. Down the years our record in regard to United Nations resolutions is a good one and our standing in that organisation is very high, which it would not be if we did not behave as we are doing in this area and many other areas.

It is mandatory. They are not saying: "Please do it. Please do not sell exports to Rhodesia." They are saying: "Do it and you are in violation of a mandatory resolution if you do not." The point is correctly made that there is evasion. I share the expression of disapproval of the Rhodesian regime which has come from the other side of the House. There is, indeed, evasion. It is a matter of regret to me, but there are two things to be said about it. One must go on doing something which is both mandatory and morally right even if not everybody else is doing the same. One might say in regard to upholding a law: "Many people are breaking it and why should I not?" It is an individual judgment for each nation.

I am pleased that we are behaving well. It may cost us a little but Rhodesia is not an enormous market anyway. It is not costing us a huge amount. My morals might get weaker if we were doing it at a huge cost but if it is a slight cost it is nice to behave well.

Mr. Haughey

Which is it: size or morality?

Mr. Keating

In politics, as the Deputy is aware, morality is not always that simple. I am pleased that it is small because it does not put my desire for Ireland to behave well under any pressure. We are not losing very much by behaving well and we are doing something we are called on to do by the United Nations. Other countries are cheating. That is a pity but I do not think that should weaken us. The mechanism of cheating is largely, I understand, through South Africa which is not amenable to pressure from countries like ours. I am glad we are doing it and I hope we will go on doing it.

Since it came up I want to make a point about the export of oil. Deputy Crowley said we were exporting 95,000 tons of oil a year. In a sense, yes but, of course, we are huge net importers because we do not get any oil out of the ground. We depend entirely on what comes in for our requirements. There is some net re-export. In terms of our total consumption we import every bit of it. In regard to that 95,000 tons of oil the Minister for Transport and Power—I am poaching of course—could say that we cannot send it out. That is perfectly possible but it would be silly because a large number of companies could say: "Very well. If that particular 95,000 tons cannot go out there will be many other 95,000 tons that will not come in so thank you very much." In fact, we are importers of every ton, every gallon, every barrel, that we use so we cannot increase our supply except once in regard to a small amount by imposing any resriction on re-export. We would be disrupting a system of which we may have criticisms but which is not working too badly at the moment.

I am glad the matter was raised about consultation with industry on scarce raw materials. I am pleased to say that two agencies, not directly part of the Department of Industry and Commerce but responsible to it, are performing very well in this instance. Immediately shortages started to emerge I had personal consultation with CII and we have been in touch steadily. The Industrial Development Authority and Coras Tráchtála through their network of offices overseas and through the good offices of CII, internally CII have arranged a mechanism by which firms with shortages, or who fear that they may run into a shortage situation, can channel their requests to CII who send it to the IDA/CTT network worldwide and we are in a position to scour supplying countries for scarce materials. While there is worldwide worry about scarcities already this mechanism has worked well, has got us over some difficulties and has enabled the continuation of employment in exports and production. I am unable to compliment them wholeheartedly because they are not directly my responsibility but CII, the IDA and CTT are co-operating very well on this and that is an important point.

I have tried to deal with most of the questions raised and, although some of them were a little bit diverse, they touched on some real topics. Deputy Brennan correctly referred to this as a little Bill. Essentially it is continuing something for a bit longer and there is no contention about it.

Mr. Haughey

It is a filler.

Mr. Keating

I should like to urge that the Second Reading be approved.

Mr. J. Brennan

Before the Minister concludes, I was not quite satisfied with his explanation on the question of oil exports. We import all the oil but we send the exports into totally different countries. How could they affect our imports? Is it not due to agreements which the people doing the refining have already entered into that we must export?

Mr. Keating

We are not a long way off but I am quite happy to amplify what I said if that is in order. There are two separate things. One is that there is a major tank farm in Bantry. I understand that all the oil that comes in there goes out again. That one is, therefore, irrelevant although it is a matter of huge exports if we wanted to count them as exports. There is also the matter of the refinery in Cork which is owned in consortium by three of the majors. They supply some of the Irish market and some of the overseas market from it and they supply some of the overseas market and some of the Irish market from other refineries of which they are proprietors also. We are treated in regard to price and distribution as part of a larger market. I suggest that in delicate current circumstances any major interference with this system, which is not disadvantageous to us vis-á-vis larger markets, should not be contemplated at this time. There is no net export figure. We are importers of all our needs. There is a significant export out of the Cork refinery but there are inputs to Dublin from other refineries. It is something that balances out, as I understand it. I am now invading the field of my colleague the Minister for Transport and Power and I do not want to do so any further.

Question put and agreed to.

Agreed to take remaining Stages today.