asked the Minister for Industry and Commerce if he will introduce rules of accountancy for oil companies.
Ceisteanna — Questions. Oral Answers. - Oil Company Accountancy.
20.
Details of the matters to which the annual accounts of companies must refer are contained in the sixth schedule to the Companies Act, 1963. The essential requirement of the Act is that the accounts must give a true and fair view of the state of affairs of the company. These requirements apply to all companies including oil companies. I do not intend to introduce any special rules of accountancy for the latter but I would add that a directive dealing with harmonisation of the format and content of balance sheets and profit and loss accounts is under consideration by the EEC.
May I ask the Minister if, having regard to the special circumstances which have arisen in relation to oil companies in recent times distinguishing them from other companies and what has come to light in regard to the method by which they account for their profits, he would consider the introduction of special rules in relation to oil companies?
There is a real difficulty here. We have all been exercised at the level of the published profits of oil companies in the most recent quarter for which they are available. I said in reply to a previous question on this subject that when these companies function on a world-wide basis and when they function all the way from the oil well to the petrol pump and are integrated in that way, and when they have extremely expert advisers who can recommend to them the optimum position on the path from oil well to petrol pump where they should take their profit and the best country in which to do so, the rules of any particular country can have very little effect in overcoming a problem of the earning of what are super-profits by these companies. This is one of the problems of the function of multinational companies which is very difficult for a small economy to cope with. One would like to say one could do something effective but the truth is that there is very little that we can effectively do in this country. As I think I said previously, the most recent account for one of the largest companies functioning within Ireland actually shows a loss. It is not an easy problem to tackle.
While I am acutely aware of the problem to which the Minister refers, I suggest he might examine the possibility of achieving, perhaps, a greater return from the companies operating within the State if different, separate and special rules were applied to the accounts of the oil companies operating within the State.
I think there is a real point here. The Deputy is vastly more expert in the matter of company law and accountancy than I am but I shall certainly direct the attention of my staff to this matter to see if the appropriate mechanism at the level of the Irish economy can be devised. I hope it can but I am a little sceptical. I think we would have to do it at Community level or even at greater level to be effective.
At international level.
Is there any Government agency on which there is an obligation to see that companies comply with the Act and, if so, how can they exercise the power to see that this is done?
There is a section of my Department which has this responsibility and discharges it satisfactorily within the laws, specifically the Companies Act, 1963 to which I referred. If the Deputy feels there is a falldown in this regard, I would be glad to investigate it but I think it is done satisfactorily.