I move: "That the Bill be now read a Second Time."
The purpose of the Bill is to make more effective provision for the development in the national interest of the mineral resources of the State.
Briefly, the Bill provides for:
—the vesting in the Minister for Industry, Commerce and Energy of the exclusive right of working minerals,
—the granting by the Minister of a lease or licence to any person giving that person the exclusive right to work minerals in respect of which rights are vested in the Minister,
—the payment of compensation to persons entitled to any estate or interest in the minerals the mining rights of which are vested in the Minister and
—the making of certain amendments to the Minerals Development Act, 1940 which experience has shown to be desirable as well as a number of repeals in consequence of proposals in the Bill.
Rights to work mines and minerals being lawfully worked or being planned for working at the date of the initiation of the Bill in the Dáil, that is, 15 December 1978, are specifically excepted from vesting in the Minister on the passing of the Act. Other exclusions from the scope of the Bill are stone, gravel, sand or clay, and petroleum as defined in the Petroleum and Other Minerals Development Act, 1960.
Basically, the reason for this Bill is that the provisions in the Minerals Development Act, 1940 for the compulsory acquisition of unworked privately-owned minerals are of uncertain legal validity and can no longer be operated with safety. The House is generally aware of the background to this circumstance. Briefly, what happened was that in 1970 the discovery of a significant lead/zinc deposit in a prospecting licence area at Nevinstown, County Meath, was announced. Subsequently, detailed investigations showed that the deposit extended to other townlands and as ownership of the minerals in the area was mixed, including those at Nevinstown which were privately-owned, the then Minister made a Minerals Acquisition Order on 15 March 1971 covering all unworked minerals except, of course, State minerals in the area concerned. Some few days after the making of the order a third party effected purchase of the surface lands and mineral rights of a farm at Nevinstown within the area of the then known deposit and challenged in the High Court the validity of the acquisition order and the constitutionality of the 1940 Act.
In a reserved judgement delivered in April 1973 the President of the High Court held that the order was invalid. The then Minister, my immediate predecessor, appealed the High Court's decision but the Supreme Court in a reserved judgement delivered in March 1974 upheld the decision of the High Court.
The grounds in both cases were that the order did not specify with reasonable particularity the nature, situation and extent of the minerals being acquired, which the court held was required under section 14 of the Minerals Development Act, 1940 under which the order was made. In the circumstances, the court found it unnecessary to rule on other grounds on which the acquisition order had been challenged including whether in section 14—which makes no reference to the giving of prior notice by the Minister—there is an implied obligation arising from the requirements of natural justice that such notice be given, the constitutionality of the acquisition provisions under that section and of the provisions for compensation.
Subsequent advice by counsel, however, was to the effect that the acquisition provisions of section 14 of the 1940 Act, if applied in future, would almost certainly be challenged on grounds of validity and again raise the question of the constitutional validity of the Act. Accordingly, it is now the position that there are no effective means readily available to secure the development of unworked minerals in private ownership in appropriate cases.
It is desirable in the national interest to ensure that companies doing exploration work here should have reasonable assurance that, if they discover a deposit and produce development plans which are acceptable to the State and other appropriate authorities, they will not be prevented from proceeding with those plans because of legal problems on the ownership issue. It will be appreciated that any effective remedy to the existing situation must of necessity affect the rights of ownership of property. It has been necessary to seek an equitable and acceptable way of dealing with this difficult problem and for that reason the Bill has not been an easy one to prepare.
The Constitution acknowledges the right to private ownership and prohibits any law attempting to abolish this right. It also provides that the exercise of this right ought to be regulated by the principles of social justice and that the State may, as occasion requires, delimit by law the exercise of these rights with a view to reconciling their exercise with the exigencies of the common good.
Thus, the solution proposed in the Bill is to vest the exclusive right of working minerals in the Minister. I am satisfied that the vesting proposal comes within what might be called the Constitutional dispensation to which I have referred and from the economic and practical point of view the exigencies of the common good require, or at least justify, control by the State of all unworked minerals in the State in the manner provided in the Bill.
The memorandum circulated with the Bills explains its purpose and that of the various provisions. Accordingly, in dealing with it now I intend to concentrate only on the principal features of the Bill.
Part I of the Bill deals with matters of a preliminary and general nature. The Bill, when enacted, will be construed with the Minerals Development Acts, 1940 and 1960, which constitute our basic mining laws. Section 4 provides for a change in the composition of the Mining Board by requiring that henceforth both ordinary members shall be property arbitrators. Under the existing legislation one of the ordinary members is an officer of the Minister. In view of the changes being made by the Bill, and in particular changes in the role of the board, it is important that the board should be seen to be an independent body.
Section 6 provides that the interest of persons under disability or unascertained will be represented in proceedings before the Mining Board or the court. In the context of the problems associated with the determination of title to minerals ownership and of tracing owners a provision of this nature is seen as highly desirable.
Section 7 provides for the appointment of assessors to assist the court in any proceedings under the Bill. This will enable the court to have technical advice readily available to it throughout the proceedings.
Section 11 provides for repeals. The repeal of section 70 of the 1940 Act ensures that an aggrieved party will have a right of appeal to the High Court on a question of fact as well as of law. In the main, the other repeals listed in the Schedule to the Bill are as a consequence of proposals in the Bill.
Part II of the Bill contains provisions for the vesting of the exclusive right of working minerals in the Minister, subject to a number of exceptions under section 13 which I detailed at the outset, namely, minerals being lawfully worked or where they are planned for working on the date of the initiation of the Bill in Dáil Éireann, which was 15 December 1978. The Bill specifies the process by which exceptions on these grounds can be formally registered with the Mining Board. Other exclusions from the scope of the Bill are stone, gravel, sand or clay, and petroleum as defined in the Petroleum and Other Minerals Development Act, 1960.
Section 15 empowers the Minister to apply to the Mining Board to have the registration of minerals as excepted minerals cancelled where it appears to him that they are not being worked. Again, as in the case of section 14, the ultimate jurisdiction of the superior courts is preserved and there is provision for the serving of notice by the Mining Board on such persons as may appear to the board to have an interest in the proceedings.
Section 16 empowers the Minister to grant a licence to any person to work State minerals, which by definition include exclusive mining rights vested in the Minister under the Bill. The Minister already has the power to grant a lease in respect of State minerals under Part IV of the 1940 Act. Subsection (2) of the section is a drafting clarification of the term "demise". Part IV of the 1940 Act refers to a demise of State minerals. The term "State minerals" includes, as I have already said, exclusive mining rights over minerals as well as minerals in full State ownership. The purpose of the subsection is to make it abundantly clear that a "demise" of minerals includes the grant by lease of a mining right and to remove any verbal ambiguity. In future cases, therefore, the Minister will have power to grant either a lease or a licence to enable minerals to be worked, depending on whatever instrument is most appropriate to the particular case.
It is also provided in this section that the Minister, with the concurrence of the Minister for Finance, may take a participating interest in the working of the minerals and that he may so provide in the conditions attaching to a lease or licence. This is an enabling provision designed to ensure that the Minister would be in a position to specify State participation as a condition of a lease or licence. It is not necessary, nor do I think it is desirable, to attempt to formulate the precise policy lines which would apply to State participation. The State has the duty, in the national interest to ensure that a reasonable and equitable share of the profits from the development of a deposit accrues to the Exchequer.
Furthermore the State must, again in the national interest, have the power to ensure that the development plans are drawn up and implemented in an optimum way. The extent, if any, to which participation by the State may be desirable for the purpose of achieving one or both of these objectives cannot be determined on a theoretical basis but on the basis of the circumstances peculiar to each individual deposit of minerals.
Section 17 provides for the giving of prior notice by the Minister where he proposes to work minerals or to grant, or give an undertaking to grant, a lease or licence to work them. It is also provided in this section that, as far as practicable, individual notice would be given to persons who appear to the Minister to have an estate or interest in the minerals and that such persons will be given a reasonable opportunity of making representations to the Minister in the matter. Similarly, it is provided that the Minister may refer the representations to the Mining Board and, indeed, must do so where the person making the representations so requires by application to the Minister. The board's consideration of the representations will take the form of an inquiry.
Section 18 provides for the publication of a notice by the Minister where he commences to work or grants a lease or a licence to work any minerals which are State minerals by virtue of this Bill. The object is to alert those entitled to any estate or interest in the minerals to these facts. Compensation claims will be indicative of title and at this point the pattern of ownership will begin to emerge. As in the case of notices under section 17, there is also provision here for individual notices to persons who have claimed to be entitled to any estate or interest in the minerals.
Part III deals exclusively with the arrangements for compensating those with title to minerals the mining rights of which are vested in the Minister under the Bill.
Section 19 establishes the right to compensation of every person with title to the minerals immediately preceding the date of the enactment of the Bill. It is envisaged that the compensation will, in the normal way, be related to the commercial potential of the minerals, and will accrue as and when the minerals are being developed.
Section 20 states that compensation will be paid by the Minister. This is in line with the position in the 1940 Act relating to compensation for State acquired minerals. There will be no change in the existing procedure whereby the Minister will recoup compensation payments from the lessee of the minerals.
It is provided in section 21 that in default of agreement any question arising as to the entitlement of any person to compensation or as to the amount will be settled by the Mining Board. It is also provided in this section that where the Minister, or the claimant for compensation, is dissatisfied with the board's findings there will be a right to apply to the court to settle the matter. There is also provision for the revision of an award in the event of a change in circumstances not foreseen at the time of the original award. I think the reasons for this provision are obvious and further elaboration is hardly necessary.
Section 22 states the basis for the assessment of compensation, which is to be fair and reasonable having regard to all the circumstances of the case. Though the section does not place any restriction on the form the compensation should take, it indicates however what would be the usual basis of a compensation award of this kind, namely, that it would be based on such proportion of the net profits arising in consequence of the working of the minerals as is attributable to the minerals as they existed in their natural condition prior to such working.
Essentially, this would take account of the pre-extraction value of the minerals in terms of their contribution to the mining operation. It is further provided that where it appears to the Mining Board or the court that compensation in the form of periodical payments would not of itself be appropriate, then the board or the court may, in their discretion, award compensation in the form of a lump sum payment or partly in that form and partly in the form of periodical payments.
The scheme of compensation has had to be designed to ensure, on the one hand, that awards will not be such as to frustrate economic mining and, on the other hand, that the owner will receive reasonable and equitable compensation for his minerals. I am satisfied that the proposals in the Bill make adequate provision for the achievement of these very essential objectives.
I believe that the proposals in this Bill will substantially eliminate the difficulties which have arisen with regard to minerals development. It should enable the State and the mining companies to deal with this in a practical way and in a manner which is equitable for people who have clear title to mineral rights. However, technically, it will not settle the rather complicated position of ownership of mineral rights. As Deputies will be aware, the legal position is that some mineral rights are clearly owned by the State, some can be legally established as in private ownership, and there is a grey area where ownership cannot be established in a definitive way.
In an earlier draft of the Bill I had set out to secure clarification of this position by a process of compulsory registration of title. The scheme I had in mind was that the area of a minerals deposit would be designated as one in respect of which the mineral rights would have to be registered. Persons claiming to own mineral rights in the area would be given a period of time within which to secure registration of their title and an appeals procedure was provided for. These proposals envisaged that, when the period for registration had expired and subject to the results of any consequential appeals, all minerals in the area which had not been registered as privately-owned minerals would automatically become the property of the State. These proposals were considered by a number of legal experts and the consensus of their opinions was that such a scheme would present very considerable difficulties. It became clear that if it were to incorporate the safeguards necessary to overcome these difficulties then the improvement on the existing situation would, if any, be marginal.
I must, of course, accept the views of these legal experts and, for that reason, I decided not to include anything in the Bill dealing with this particular matter. I should, however, say that I have not abandoned the idea that some further improvement in this direction may be possible and I intend to have the position considered. While the proposals which I had in mind, or some modification of them, would be a desirable supplement to the provisions of the existing Bill, they are not by any means as important to a resolution of the existing problems as are the provisions of the Bill. For that reason I felt it was desirable to press ahead with the Bill as now drafted because I am satisfied that it will provide substantial resolution of the difficulties which have existed since the court proceedings to which I have referred.
The Bill is, therefore, an important measure. It is largely also a technical measure and it does not provide for, or envisage, any major departure from the existing policy in promotion of minerals exploration and development. It will continue to be my policy to encourage the widest possible spread of exploration by mining interests and to create a climate where there can be confidence in the future of mining in this country. The provisions of the Bill are important in this respect.
There have been calls from certain quarters that the State should adopt a more active role in minerals exploration and development. It is legitimate to express such views, but the proposition needs to be critically considered.
Although I have not reached firm conclusions on this issue, I believe that such a critical examination might identify an appropriate role for the State in this area. In so far as exploration is concerned, there is, for obvious reasons, a substantial identity of interests between the State and private mining interests. Though this identity of interests is very substantial it is not total and, for this reason, I would not, at least without considerable further examination, rule out the possibility that the State would have a role in relation to exploration. I would not at this stage rule out the possibility of involvement by a State body at the development stage also but, here again, I am satisfied that this possibility needs a good deal of further study.
These ideas are at present at a somewhat embryonic stage, because I attached first priority to preparation of the measures contained in the present Bill. I mention the question of a possible State role because, whatever views one may take about it, I think most of us would agree that it would be unrealistic, and in my view undesirable, to link the problems which this Bill seeks to resolve with ideas about the role of the State in the minerals sector. I might add that the resolution of the ownership problem is important no matter what role is adopted by the State in exploring for and developing mineral resources. It is important not only in the overall national interest but also in the interest of individual owners of minerals since the very existence of these minerals may never come to the light of day unless a suitable regime for the carrying out of exploration work can be established.
I commend this Bill to the House as a measure to substantially resolve the difficulties which have arisen in relation to minerals ownership and to act as an incentive towards continuing and committed involvement by mining interests in exploration and development of our mineral resources.