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Dáil Éireann debate -
Thursday, 26 May 1988

Vol. 381 No. 2

Forestry Bill, 1988: Second Stage (Resumed).

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

If we are serious about competing with imports we must strive for the highest possible quality of native timber. Because of the high moisture content it must be properly dried before being put on sale. Only four or five of our sawmills are equipped with proper kiln drying facilities. The IDA should co-operate with the ten principal sawmills in the development of proper drying facilities. Over 85 per cent of our timber is processed by ten sawmills and it would be very easy to raise standards if we were to ensure they had the proper equipment. We could then work down to the smaller sawmills.

I referred earlier to the importance of the pulpwood industry and the necessity to have our own pulpwood mill. I realise that we have not enough residue at present to sustain such a mill, but by 1993 the output from our forests will be increased by about 80 per cent and we should plan to have a pulpwood mill at that stage. Private investors would probably be interested if the supply was assured. At present over 50 per cent of each tree is not being utilised and we are losing much of the value added of our forests. Chips are being exported to Sweden and the Continent for about £15 per tonne and being brought back in a converted form at about ten times that price. I hope the new board will address this problem.

I understand the pruning programme has been more or less suspended due to the lack of manpower. Pruning is most important in ensuring the highest quality timber at a later stage. After the first thinnings there must be selected pruning in order to identify the final crop. This is to ensure knot-free timber which is essential if it is to reach the highest standard. I urge that the new board should concentrate resources on the extension of the pruning service, either by private contractors or by employees of the Forest and Wildlife Service.

Problems often arise due to uncertainty of supply caused by the tendering system as a result of which many processors cannot plan ahead. There is no guarantee they will have the necessary amount of timber to reach certain targets. The whole tendering system should be renewed by the new board and the possibility of substitution a contracting system might be considered. Sometimes processors have to travel considerable distances to get timber. It would be better if they could get their supplies locally and avoid the cost of transport and so on.

We must have proper standards of grading to ensure top quality timber. The lack of such standards means that our timber is not presented as it should be and it is very easy to get a name for bad quality. All timber must be graded before it is put on the market.

I now refer to the problem of land acquisition and the delay in transferring land from the farmer to the Forest and Wildlife Service. This process has been very cumbersome and prolonged and I hope the new board will speed it up by removing the bureaucratic delays.

A number of speakers have expressed concern about the composition of the proposed board. I urge the Minister to ensure that it will be broadly based and include representatives of growers, processors and users, as well as people involved in technological and developmental aspects of the industry. It should also include somebody to deal with the environmental aspect of growing trees. There has been widespread opposition to forestry plantations in the north of Scotland which have damaged the local wildlife habitat. I hope this will not happen here and that the board will be representative of all viewpoints across a broad spectrum.

The Bill contains no mention of research and development, but nevertheless I am sure the board will be concerned with this important matter. I would envisage a role here for Eolas. The Bill has not provided for the specific inclusion of a wood technology unit which is essential to the optimum utilisation of the timber produced by the State forests and the development of the timber industry. I am sure provision can be made for the forest products department on the new board. If we are to improve the quality of our timber it is very important that we have continuous research and development into new plant species, new methods of growing, planting and so on. Progress has been made but we can learn a lot from other countries regarding the future quality of our timber.

I wish to refer briefly to what has happened at ground level, especially in Kerry. The Minister mentioned in his Second Stage speech that he had succeeded in getting an increase in the allocation for rural development for forestry. In Kerry the budget for rural development this year has been cut back by 30 per cent and that will restrict the future development of forests in Kerry. The success of the Western Package as regards forestry has resulted in a proliferation of applications for grants and schemes. Unfortunately, there are not enough people to go out and investigate many of the applications and as a result people are becoming sceptical about the scheme. I know people who had intended to plant parts of their land but have changed their minds now because the service was not immediately available to them. I can see this becoming an increasing problem because of the cutbacks. I urge the Minister to ensure that the staffing arrangements on the new board will be such as to provide that applications are looked at as soon as possible and that there is no undue delay. I appreciate that the reason inspectors cannot get out and investigate private applications is because of the success of the scheme and the growing awareness of it. Nevertheless, it is important in order to keep confidence in the scheme that inspectors reach the farmer or the private individual as soon as possible.

I have already mentioned the whole aspect of wildlife. I asked the Minister what role the new board will play as regards wildlife. I understand that this aspect was taken from the Forest and Wildlife Service two years ago and is now under the Office of Public Works. I am sure this new board will have to play some role in the whole wildlife service. In a recent study in Scotland — I refer to that country because of the extensive planting that has been carried out there in the past ten years from which we can learn a lot — it was shown that there was a five-fold increase in the number and diversity of some bird species as a result of forestry development. Many species also vanished from the vast areas that were planted. We will have to look at the whole planting programme in the context of the damage that could be done to the flora and fauna of an area. We have to strive to strike the proper balance. Ecosystems that have been developing for millions of years could be destroyed by irresponsible planting, and this must be considered. The board will have to have responsibility to ensure that a proper balance is maintained. Forestry also provides refuge for various types of animal life. We must ensure that no form of animal life is interfered with because of extensive forestry planting. Forestry facilitates animal life probably more than bird life or even plant life.

There is much concentration now on activity holidays and this is an area that the new board can address. Forests should be developed with a view to providing future recreational facilities, especially for the tourist industry. Forests could be used for schools and for the use of joggers, orienteering, hunting, camping and several other purposes. In the context of tourism this new board will have to take this whole aspect into consideration.

I intervene to advise Deputy Deenihan that he now has four minutes left of the time allotted to him.

There is vast potential in our forests for the types of activities I have mentioned. As I have said, when forests are being planned the accessibility of them for joggers, orienteering, hunting and other purposes should be takem into consideration.

I welcome this Bill. There is a great future for this board because of the scarcity of timber in Europe and England and because of the vast amount of land that can be planted in this country. The board face a great challenge and I am sure they will succeed. However, certain improvements can be made in the Bill and I am sure the Minister and the spokespersons from each party will be considering this when we come to Committee Stage. I compliment the Minister on his initiative in this respect. I know from speaking to people in the timber industry that he has their respect.

As an adjunct to my comments on the detail of this Bill, firstly let me offer a word of welcome for it and a word of praise for the Minister, Deputy Smith, on its introduction. It is seldom I get the opportunity to praise him, particularly in Dublin. The Bill has as its objective the establishment of a State company for forestry which takes its development and commercial exploitation out of the hands of the Civil Service, a welcome pronouncement in the forestry debate. The Government have by the publication of this Bill recognised and followed through the major preparatory tasks in this regard, which were undertaken by my party in 1984, with the establishment of the Forestry Review Body, following the very genuine initiative taken by the forester staff in opening the debate.

My most major criticism of the Bill is its failure to identify in its objectives a requirement for acquisition and planting of land. This is indeed very peculiar and totally regrettable. I join with my colleagues in condemning this grevious omission. Surely a new company to deal with forestry should have plantation establishment listed as one of its main objectives. Not alone that, but the Government should ensure the adherence to a national planting target of not less than 10,000 hectares per annum as a priority for this country, which at present, with only 6 per cent of its land under trees, languishes far behind its European neighbours. I hope the recent upsurge in private planting will continue; but hopeful aspirations are, on their own, of no value when one is faced with planning Ireland's future in a forestry development programme. The omission of even the mention of a national planting target is a serious indictment of the Government's lack of a planning strategy.

How are we expected to increase from our current level of plantations at 340,000 hectares to a more realistic figure of 1.2 million hectares suggested by many in the past, including Government agencies such as An Foras Talúntais, as an immediate target in line with a realistic land use policy? In order to sustain our wood based industries and to provide guaranteed employment in all aspects of forestry, including downstream employment, to expand these industries in a planned manner and to reverse our balance of payments deficit, we must guarantee a sustained yield from our forests. This can only happen with the establishment and maintenance of a national planting target.

Running parallel with the publishing of this Bill is a very disturbing rumour that at present a committee under the aegis of the Department of Finance are working on the analysis of a proposal which would suggest that the State and consequently the new company, would abandon their planting programme entirely and hope that the private sector would take up the slack. The suggestion is that the Government are awaiting a final report from this group. Could it be that Fianna Fáil would be about to give the kiss of death to Coillte Teoranta even before it is established? The chief executive, the directors and staff of Coillte Teoranta, the forest industries sector and Dáil Éireann are entitled to know what is going on and I ask the Minister to clarify this in his response.

The Bill deals with the question of directors of the board and a chairman. It is unusual in this day and age that the Minister was not specific in his wording with regard to the appointment of worker directors. Surely he is well aware of this concept as a very valuable contributor to the question of harmonious relationships between management and staff, and is aware that it is now well established practice in other companies to have this sort of worker participation at the highest level of company management.

I hope also that the appointment of the chairman and directors will be in accordance with what is considered best for the company in terms of experience, expertise, forestry know-how and good commercial thinking and not, as too often happens, to the serious detriment of success because of political considerations. It is at a time like this that the national interest must take precedence over shortterm political gain.

One of my chief misgivings on the question of appointments to the new company is that much of what is contained in the Bill by way of reference back to the Minister and much of what is omitted from the proposed legislation militates seriously against attracting the type of person with the required entrepreneurial skills for the position. Not alone that, but because of the restrictive clause which limits the first term of appointment of a chief executive to three years, the legislation almost argues against the feasibility of such a post to a person who is already gainfully employed in a similar capacity.

Finally on this point, because of the non-implementation by the Government of the higher civil service pay award, it stands to reason that as the general trend is towards a move away from posts in this area to the private sector that the Government are swimming against the tide with regard to this key post. Seldom have I seen a position with such challenge and potential fraught with so many pitfalls, interference and lack of reward.

It is not clear from the legislation what functions will be ascribed to Coillte Teoranta. For instance, the Forestry Department have been very successful in their creation of natural amenities and public facilities. One need only mention Lough Key Forest Park in Boyle, County Roscommon, the Killykeen development in County Cavan or the John F. Kennedy arboretum in County Wexford as examples. How will Coillte Teoranta be expected to handle these developments? Will they be expected to run them on strictly commercial lines, or will there be some degree of public utility provided without charge? Will the company be expected, or maybe I should ask permitted, to involve themselves in further developments along those lines? Having regard to the many fine waterways, lakes and rivers which will be under the company's control, will they be expected or permitted to develop their obvious fishing potential, that is, of course, hoping we will have any fishermen left in the country after the rod licence debacle? What about shooting rights and hunting rights? All those are matters of staff interest and public interest and require clarification.

Obviously the functions ascribed to the new company as well as their specific authority with regard to grant administration, training, research and development, felling licences and so on, will determine the staff that will be transferred from the present Department of Energy to the company, and I note that the Minister is rather coy in stating that the staff to be transferred to the company will be those who are designated by him for transfer. The sooner the Minister clarifies these very important matters the better are the chances of establishing a successful company.

Following on this question of functions and authority of Coillte Teoranta, there are two very crucial questions that need to be addressed. First, in the terms of Irish forestry, will Coillte Teoranta be the forest authority of this country from the perspective of their position in the international scheme of things? Secondly, what will be the company's relationship with the EC in terms of their entitlement to grants? I trust that it will be the forest authority for the country and on the question of EC grants, I presume that the company should not have to operate at a disadvantage to the private sector.

While reading through the Bill and referring back to other earlier pronouncements by the Fianna Fáil Party in their last election manifesto and later having regard to the various comments they have made since coming into Government, particularly those listed in the Programme for National Recovery into which they entered as a peace plan with the other social partners, it is quite interesting now to make comparisons. For instance, in the Programme for National Recovery the Government said, and I quote “The new company should be launched early in the New Year (an interim board will be announced shortly).” What has happened since October 1987? We are now well into the new year, and while this legislation is before us the actual launching of the company which can only take place on vesting day is still unknown. More peculiar than that is the failure of the Government to announce the promised interim board. Can the Minister explain why this decision was reneged on?

The Programme for National Recovery also talked about employment creation in forestry. What has happened since? About 40 of their permanent Civil Service staff have opted for early retirement, and while I talk to you, I understand about 450 letters are about to issue to members of the industrial work force containing completed redundancy agreements. Therefore the Government would have to be in a position to identify at least 500 jobs to even prove that they had sustained employment at the October 1987 level.

I know the Minister can talk about increased planting in 1987 and 1988 and refer to an increase of 50,000 cubic metres of timber from our State forests, an increase, let me quickly point out that came about solely by way of annual increment increase in our crops and not because of any magic wand performance from the Government. Where are the newly created jobs? Can we have specific examples of the numbers and where they have been created? Any jobs created in additional planting are temporary and cannot be referred to as sustainable employment.

Also entered in the Programme for National Recovery page 22, clause 22, is the following:

Arrangements will be put into place to ensure that new jobs arising from the State's planting programme will not arise in the black economy.

And what might I ask has been done to put such arrangements in place? To my knowledge, absolutely nothing and despite this the matter does not even get a hint of acknowledgement in the legislation.

The question of the black economy operating in Irish forestry is obviously a matter of national concern. This is acknowledged by the inclusion I referred to in the Programme for National Recovery. To have merited such status, the matter must be out of hand, otherwise it could be dealt with in the normal course of events. My information is that it most certainly is out of hand. In fact, since the Programme for National Recovery was published, the matter appears to have worsened.

It gives me no joy whatsoever to place on the record of this House my certain contention that the black economy thrives in Ireland's forestry programme. Not alone that, but our own Forestry Service is an unwitting employer of black economy labour because their contracts for much of their work do not facilitate a proper check on the tax regime of those employed. How much worse that matter is in the private sector forestry one can gauge for oneself. It is true that contracts will state that the work must be carried out subject to the legitimate tax code of the State, but have the Government become so naive as to think that because they say something or write it down, that this provided instant solutions?

The losses accruing to the State from this reprehensible practice are a serious drain on our over-burdened economy. While it is difficult to gauge their true extent, we have the Forestry officials admitting it can happen under their very noses, while one private forestry contractor who operates in the legitimate economy, concedes that he cannot compete for jobs on a competitive basis with other outfits of the same size and scale who are able to take on contract jobs at 60 per cent of his price and still make a profit.

There is only one obvious way in which this can be done. The losses are enormous. Some of those people draw the dole while still working. They evade tax and social insurance payments and in the final analysis they keep legitimate operators out of jobs. At a time when work opportunities are scarce there is an evergrowing temptation to increase your competitiveness by any means possible and I fear that our growing forestry industry could become the growth area of Ireland's black economy. Why have the Government not moved to stop it? Why have they not made tax-paid receipts a mandatory stipulation for grant payments to the private sector? Why, having included a reference to this in the Programme for National Recovery have they not followed through with this in the Forestry Bill?

The general tone of this Bill has an amazing tendency to state that many of its major decisions can only be made following approval from the Minister and in many instances also the decisions require the prior approval of the Minister for Finance. The examples are so numerous, if one studies the proposed legislation, that it is obvious that the inclusion of any glaring examples would only serve to give the wrong idea because of the omission of other glaring examples.

I am not arguing against Government interest in matters of national concern, but I am most definitely arguing against Government interference. Surely the Government must be able to make up their mind about whether or not they wish to take forestry out of the hands of the Civil Service. Having agreed to do this, why then does the Minister have to introduce such debilitating restrictions in the operating of the company.

No one has spoken more often or more convincingly of the need to establish forestry as a commercial orientated, market-driven industry than our present Minister; and, while I must say I admired his conviction in this regard, I feel that the Bill does not reflect his enthusiasm in this respect. Could it be that he fell victim at the final hurdle to the bureaucratic overlords of the Civil Service who have more of a vested interest in the preservation of their own control over what happens than they have in commercial viability. Why could the Minister not act according to his own wishes and commitments and cut the strings and trappings to float a company with the freedom to take decisions as they saw appropriate?

This is not to say that there would not be accountability. Of course, there should be. Indeed, I would argue that section 31 of the proposed legislation should have been more specific in its requirement for an annual report. I feel that if such a report is to be relevant it should be specified that it be presented not later than three months after end of year. Also, the need for accountability could not be ignored, having regard to the requirement for central Exchequer funding which is so necessary. It is difficult to equate the funding provisions of the Bill with the most up-to-date Forestry Department figures; and I sincerely hope that what is a good decision in principle, that is, the establishment of Coillte Teoranta is not used as a money saving device for the Exchequer dressed in a deceptive respectable garb.

I am convinced that investment in forestry is not alone worthwhile, but essential for our economy, especially at a time when alternative farm enterprises are so important and when the EC looks so benignly on forestry development? The figures speak for themselves. Ireland imports over £300 million worth of timber and timber products annually. The EC is a net importer of timber to a degree that it is second only in scale to its energy bill. Surely nobody could quibble with continuing funding to build up our hectarage of forestry plantations to an acceptable national level.

My opening comments on this debate were ones of welcome. I have referred to what I perceive to be serious shortcomings. They can be rectified. My party are committed to positive, constructive opposition. We have already stated our intention to put down amendments to this Bill on Committee Stage. I hope that the Government will be magnanimous enough to acknowledge our genuine interest in the development of the forestry industry by showing their appreciation for our proposals. Let me conclude on a parochial note. The Minister, my esteemed Oireachtas colleague from North Tipperary, will be aware of the lack of investment leading to industrial stagnation and a severe lack of job opportunities in Thurles town and environs. I would formally request that, in line with Government policy on decentralisation, the administration headquarters of Coillte Teoranta be established in Thurles. There are a number of ideal locations within the town suitable for immediate start-up. Thurles is geographically well situated, with an excellent primary road and rail network. Regarding staffing, it has an abundance of accommodation and provides outstanding recreational and amenity facilities. As Minister with responsibility for the location of these offices, I earnestly, appeal to him and his Government to give some little recognition to Thurles, which to date has suffered seriously from the Government's adverse decisions and total neglect.

I shall be brief, as my colleagues are very anxious to avail of the time allowed. First, let me congratulate the Minister on introducing this Bill. We are entitled to be critical of any proposal, but certainly I would be inclined to adopt the attitude of giving time to see how the legislation works. The move is generally in the right direction. I would hope that, perhaps on Committee Stage, we could examine some worrying aspects — for instance, with regard to the appointment of the chief executive. I wonder why the three year element is there. The whole funding is quite vague, also the time factor. The Forestry Review Body were quite clear about the urgency of this matter. In a few short years we have come a long way. It is not so long since our entire forestry output was being shipped out for peanuts, as pit props and such like. We now have a very viable timber industry. Irish timber is now regarded as first class material for housing and general utilisation, something that was not heard of a few short years ago. It is not so long since a forester in my own area was the first person to use Irish timber in the construction of his bungalow. I think that everybody was expecting it to fall down overnight. For many hundreds of years all the stately mansions were built with native timber. Great credit is due to people like Woodfab who have survived many difficult periods and very tough competition on the timber scene. They have built up a reputation for themselves, not only for good quality but for price competitiveness and continuity of supply.

It is true that we still have only about 6 per cent of our country under trees, and certainly that must worry us. This whole business of acquisition should be speeded up. It seems very strange that there are imports into the EC worth many billions of pounds — a figure here has been mentioned of £200 million or £300 million. There are many areas in the country which are marginally suitable for cattle production because of the wet nature of the land and we are spending massive sums in trying to get that land into production. But if we are to have a "set aside" policy, I would have thought that this would have been an obvious area for the EC to consider with regard to such a policy, purely and simply because one of the great problems of a family going about afforestation is the question of survival in the meantime. It takes between 25 and 30 years for timber to mature, so how are they going to survive in the meantime? One way would be for the EC to agree to allow a farmer to plant 100 acres with the aid of EC grants and to receive a regular income of £70 per acre from the set-aside funds. I have already made that suggestion to the Minister for Agriculture and Food, Deputy O'Kennedy. There is so much marginal land in this country that many people would go into the planting of trees if such an incentive was provided. After all, we have the most suitable climate in the world for the growing of trees and to my mind we are not making full use of it.

We have been appealing to pension funds and the banks to get involved in the planting of trees. Small projects have been undertaken in some areas but in other areas they have been resisted. Appealing to the pension funds has not produced the desired result which is strange because I am told the returns from timber would be well up to the returns from most tillage operations which would not be saying much for some of them. After all, if a Dutch company can build Trabolgan at a cost of between £20 million and £30 million and can afford to wait for a return, surely, Irish insurance companies and Irish banks who have been investing abroad should hold consultations with Coillte Teoranta and get on with the task of planting in the vast acreages of marginal land?

Recently, the Minister visited a nursery of young forest trees in my own area of Cork. Such a small industry holds opportunities for a limited number of people. This is an entrepreneur who decided there was a profit to be made from such a project and instead of importing these young trees he decided to grow them himself. The Minister was very impressed by this project. However, what is crippling him and others like him — this goes for garden centres also — is the high rate of VAT on the seeds they import. It is ridiculous in a country where people are crying out for the planting of trees that another Department should clap on a very high rate of VAT on the seeds which are being imported to grow these young trees. I would like the Minister to take up this matter. I have already raised it with the Minister for Finance but it appears he has not listened to me and, therefore, I hope he will listen to the Minister.

I would like to thank the Minister for agreeing to visit Cork recently even though he had no great news to tell us with regard to Glenbower Lake which is one of the two lakes in east Cork. He pointed out that a lot of money would have to be spent but I would like to reassure him, as I did on that occasion, that in restoring the lake he would have the full support of the people of the area and they would do everything possible to help him in that project. We would co-operate with his Department in every way. Now that Coillte Teoranta have been established I hope it will be intermingled with the Forest and Wildlife Service. I do not see how the two can be separated. Glenbower Wood, with its wildlife, flora and fauna, combined with the lake, forms a major amenity in the area and I think that with goodwill on all sides we could restore that amenity fairly quickly.

I hope this new body will prove to be successful and that in the initial stages the priming funds will be made available. I hope also that they will liaise with other Departments and landowners to get the planting programme which is so badly needed underway fairly quickly. I have always believed that in areas where there is a demand for timber from farmers that we should set up auctions at specific locations in order to facilitate these farmers. Finally I thank the Minister for bringing this important legislation before the house.

At the outset I wish to say it struck me that it was very ungenerous of the Minister in his Second Stage speech not to put on record the enormous contribution which was made by the former Minister, Paddy O'Toole, in the formulation of this Bill before the House today. This Bill arose out of the recommendations of the Forestry Review Group which was set up by Paddy O'Toole when he was Minister in 1985. If others are not prepared to lay credit where it is due I certainly am. It behoves us all to look back and consider the contribution which was made by the former Minister during those years in bringing us to the present position where a full investigation into the commercial potential and the rational commercial exploitation of forestry has been set underway.

I welcome this Bill and what it intends to achieve. No one can be satisfied with the rate of progress in afforestation, both in the private and public sectors. We have fallen behind our counterparts in other European countries despite the fact that we have an eminently suitable climate and soil for the growing of trees. All of the various factors and functions of the equation for a healthy industry appear to be in place but somehow the catalyst has not been provided and we did not get the end product. Previous speakers have outlined the statistics in terms of what we import and how deficient the European Community is in timber production and in the production of timber products. I will not cover that ground but I accept that the Bill should seek to redress the gaps and difficulties in those areas.

There are aspects of the Bill which concern me greatly and I think I am right in saying that no other contributor has addressed himself to these points. Let me briefly highlight the environmental considerations and the concerns of the scientific community in relation to what is being proposed. In his Second Stage speech the Minister devoted half a sentence to the environment. I think that calls for an explanation from the Minister. It was an appalling omission on his part. I appreciate we are on Second Stage of this Bill but as I am addressing myself to an area which has not heretofore been addressed by the other contributors. I would like specifically to deal with section 13 of the Bill which relates to the general duties of Coillte Teoranta. Section 13 (1) (c) reads:

(c) to have due regard to the environmental and amenity consequences of its operations.

That is the only reference in the Bill to the environment and I think the Minister paraphrased that in the course of his remarks, also as his only reference to the environment. On this side of the House we will be circulating an amendment for Committee Stage asking that there be included in this section provision for consultation with the Minister for Finance in areas of scientific interest.

I am sure the Minister is aware of an excellent document produced recently by the UPTCS entitled Our National Heritage, A Policy for Nature Conservation in Ireland. If the Minister is not familiar with it I should like to draw his attention to it in some detail. It deals with various aspects of conservation. In particular the Land-Use Policy section, on page 5, explains the difficulties that have arisen through the mismatching of land and its use in this country. We need as much land planted and under trees as we possibly can. We have millions of hectares suitable for the planting of trees. We must be quite sure that we direct the attentions of the public and private sectors to land suitable for afforestation, so that in no way will the provisions of this Bill be a threat to any areas of scientific interest, from a flora and fauna point of view and their habitats, or indeed of geomorphological interest, or areas of high amenity value from the built heritage point of view.

The Bill does not address any of these aspects. I do not perceive development as a threat to conservation; nor should conservationists or those concerned with conservation be seen as the enemy of development. This is a developmental Bill. I welcome it wholeheartedly. In fact, I will go so far as to say we have been waiting far too long for this type of Bill and process to be debated in the House and implemented. But in doing so I must point out that the enormous omission of a reference to our environment, or of even a reference to protecting areas of scientific interest, cannot be let go unheeded. We will be pressing that aspect on Committee Stage.

In Ireland alone there are 80 sites which the International Union for the Conservation of Nature consider of international importance from the scientific point of view. We have hundreds of other sites classified of lesser importance but nonetheless vitally important from the local and national points of view.

In theory the provisions of this Bill could allow those who wish to plant to plant on all these essential scientific areas. Tree planting does not require planning permission in this country. There is no procedure in any law in this country whereby people can be prevented, or even dissuaded, from planting in areas of vital amenity or scientific value to the country. It may seem a small consideration in the overall scheme of things. The Minister may be viewing the provisions of this Bill from a purely developmental point of view. I welcome its provisions from a developmental point of view, but I cannot accept its provisions with this omission. We must resolve this problem and allow the disquiet that the provisions of this Bill have aroused in the environmental and conservation areas to be appeased.

This document of the UPTCS to which I have referred states at paragraph 2.4, Land-Use Policies:

At present we continue to plant trees on low-yielding blanket bogs of great conservation value in their natural state, to use drumlins for cattle-grazing for which they are ill-suited, and to develop land on the outskirts of towns and cities without regard to its agricultural or amenity value.

One of the great tragedies is the fact that we do not recognise the tourist, amenity and environmental values of our wetlands. Indeed, the bog in Ireland always has been synonymous with poverty and a hard way of life. It has taken Dutch concern to point up to us the enormous environmental and amenity value of some of our bogs, particularly our blanket bogs. There is no way, under the provisions of this Bill as they stand, that people can be prevented from developing our intact blanket bogs for afforestation. We cannot stand by and allow that to happen. At least we must decide selectively where we will and will not allow it to happen.

My concerns, if you like, to put brakes on certain areas of development for forestry must not be interpreted in any way as not supporting fully the ideals of this Bill. I and the Fine Gael Party recognise how important it is to get as much suitable land as possible under timber as quickly as possible. On Committee Stage, apart from the brief reference to the environment, I will be asking the Minister to pad that out and to ensure that there will be consultation with the relevant Ministers on different aspects. For example, when it comes to the National Monuments Acts it is the Minister of State at the Office of Public Works who must be consulted if there is any threat to our built heritage from afforestation. When it comes to areas of scientific interest I understand that we must consult the Minister for Finance himself. I will leave that to the present Minister and his advisers to detail that, if necessary. Of course, the Minister for the Environment would have an input on other aspects.

On 1 July next Ireland will have to implement the Environmental Impact Analysis Directive of the EC. I welcome the response I got yesterday from the Taoiseach, having raised the matter on the Order of Business on three occasions over the last three weeks. The Environmental Impact Analysis Directive will be a European watchdog on how we treat our environment in the future, particularly in relation to major construction projects or to any development in a green field area. In fact, afforestation on virgin land comes into Annex II of this directive. Annex I is mandatory. Annex II will be non-mandatory after 1 July. I very much welcome the fact that the Taoiseach assured me in a letter yesterday from which I might quote:

I would like to clarify that no indication has been given that Ireland intends to implement the Directive in respect of Annex I projects only. In fact, you will see from what I have said above that such an option is not open to us; the Directive requires us to have environmental impact assessments for those Annex II projects which we believe likely to significantly affect the environment.

This is most important in regard to what we are talking about here today. That is why on Committee Stage we will be tabling amendments to ensure consultation with the relevant Ministers in areas where there may be sensitivity from an environmental or scientific point of view or from the point of view of our built heritage.

We are talking about limited sites in our country which would not be suitable for afforestation. There is an enormous range of marginal land in this country crying out for afforestation which will be designated as a set aside consideration when it comes to European agricultural grants in the future. The question of whether we will be designating environmentally sensitive areas for particular protection and farming methods comes into this also. There are certain areas in the country we must protect in the future. We must insist that we do not mismatch land use with what we are intending under the provisions of this Bill.

The Minister said in the course of his remarks that he welcomed the fact that the Forestry Commissioner would visit Ireland in July next because it would give him a greater appreciation of our country, so that hopefully he would rattle the purse somewhat more generously as far as Ireland is concerned. I hate to tell the Minister that that has not been the experience in the fisheries sector when the Fisheries Commissioner, Cardosa E Cunha, came and was welcomed by me, the Minister and everyone else in July of last year. In fact, following his visit, for the first time ever, we got the lowest percentage funding from the FEOGA grants for aquaculture and marine projects generally. I do not want to wish the same on the Minister in the forestry area. I would ask him to please watch this space carefully. It does not follow, when one hosts a Commissioner to Ireland and shows him what we need, that he will deliver. In fact, the reverse happened in the fisheries area. We have been fighting an ongoing battle in relation to FEOGA grants ever since. I merely draw the Minister's attention to that fact. He made the statement as if having the Commissioner and hosting him to our lovely country would automatically indicate that matters had to improve. I would ask the Minister to please watch it carefully. He will have my support all the way in ensuring that the same does not happen in his portfolio as happened in fisheries. I know I am being slightly facetious in saying that. Nevertheless, I am making the point to the Minister for his careful consideration.

The Deputy does not want me to cancel the visit?

No, I think we should welcome him but watch him carefully and how he responds afterwards. The Bill before us uses the same template as was used to set up An Post and Bord Telecom Éireann with perhaps an anomaly or a difference that I do not understand and about which I would welcome an explanation from the Minister when he responds on Second Stage.

Section 17 allows the Minister for Finance to have the controlling interest in this company and the Minister for Forestry or Energy to have a minor shareholding. In An Post and Telecom Éireann it was the other way round; the Minister for Finance had a minority interest. Would the Minister please explain why he feels it necessary for the Minister for Finance to clutch to his bosom this particular bit of legislation and hold it there tightly rather than allowing the area concerned to have the major controlling interest? I await the Minister's explanation of that.

Generally my contribution in wholeheartedly welcoming the thrust of the Bill has been to bring to the Minister's attention my deep concerns about the lack of provision for protecting certain sensitive environmental amenity and scientific areas. I trust the Minister will suport our amendments or bring forward amendments of his own on Committee Stage to rectify this anomaly.

There is another point that concerns me also. When we questioned many of the aspects of this Bill we were told that they would be taken care of in the memorandum of association or articles of association. I would like the Minister to indicate before final acceptance of this Bill how different matters will be taken care of in the memorandum of association or the articles of association, as the Minister refers to them. For example, will this body be empowered to gift land that they perhaps do not need or have decided should not be planted on to other State or semi-State agencies for protection? For example, the management of forestry from a conservation point of view is quite different from the management of forestry from a developmental point of view. We need only look towards the beautiful oaklands of Glendalough which the forestry have now given back to the Office of Public Works for conservation. I welcome that as farsighted and in the spirit of what we are trying to achieve here this morning. But the two different types of management mean that this new body may find on their hands forestry developments of one kind or another which should be maintained for conservation and which they might want to gift to the wildlife section of the Office of Public Works or indeed any other State body. Will this Bill, or the heretofore unseen articles of association, allow this body to gift land for conservation or any other use when they deem it not necessary to their particular needs? I would like to know what the Minister intends to put in the articles of association before finally accepting this Bill, because that apparently can direct an awful lot in terms of the purchase and sale of land, the price that would be requested, whether land can be gifted etc. There is probably an awful lot in there that I am not aware of and would be concerned about if I were. Could we see or at least be told the bones of what the Minister intends to include in his articles of association before finally accepting this Bill?

Finally, I would like to say generally that afforestation cannot be in conflict with good conservation strategy and that public funds should never be applied for afforestation of sites or areas of scientific or conservation interest, especially in our blanket bogs, and I will not delay the House by going through all the many other areas. Will the Minister please assure us, before we wind up on Second Stage, that he accepts my views in this area and that he will be amenable to amendments putting in safeguards for these areas?

The integration of conservation and development policy must be right through all the legislation we pass in this House, from the planning Acts to the water, the air and the pollution Acts. All of this area, when we are touching on our environment and development, we must integrate right from scratch, right from the time the parliamentary draftsman starts off on a new Bill. We must integrate conservation strategy, into any development policy such as we have here today, and then we will be looking towards the long term economic benefit of our country and not just settling for short term monetary gain.

We have an opportunity now that we must not miss. I do not want to see us back in this House arguing and fighting across the House in the future about what Coillte Teoranta are doing or what areas they intend to plant, with the planning Acts not being able to prevent them. We may call for an environmental impact analysis, as we will be entitled to do at the time, but I would like these provisions in the Act so that there will be a procedure for consultation with the relevant Minister to ensure that difficulty and acrimony do not arise.

This Bill, thankfully, is about money growing on trees. We welcome it wholeheartedly with the few provisos I have mentioned. Forestry is indeed an excellent long term investment with low risk and generous tax advantages. The incentives in Ireland for tree planting at the moment include grants for planting and maintenance, free technological advisory service and a tax regime which is adapted to the needs of woodland ownership generally.

The Deputy has one minute left.

Thank you. We have the advantages which I outlined initially, in our climate, soil type, technical expertise and availability of land. The Minister has our general support on a Bill that was initiated by the former Minister, Mr. Paddy O'Toole. We are delighted with what it is trying to achieve. We will in no way hinder its objectives. The one area on which I am looking forward to a positive response from the Minister is in relation to provisions to protect our environment and to ensure there will be no mismatch of land use with afforestation. We have plenty of land and we want it planted. We do not want our sicentific areas of international, national and local importance interfered with by tree planting. We want the proper type of tree planting in the different areas. I would like to encourage broadleaf planting and I look forward to a very successful implementation of Coillte Teoranta.

I want to make three very quick points. There are about 20 staff employed in Eolas in the forest products division of what was formerly the IIRS. At present these people are mostly engaged in selling their services to the present forestry division of the Department of Forestry. Those people feel, and I think their management agrees with them, that they would be best located within the new company in that it is likely that if they are not brought into the company the company will develop its own in-house capacity to provide the sort of service that it is now buying from the forest products division of Eolas.

They certainly are worried that if that were to happen the relevance of their work in Eolas would diminish and the body of expertise that has been built up in forestry within Eolas would be dispersed and used perhaps for other purposes for which the people concerned have not been trained. I would like the Minister, when he replies, to give us some assurance in regard to the role of the forestry division of Eolas and I would hope he would be able to agree to the suggestion I am making that this division would be shifted from Eolas to the new company.

I have two other points. One concerns the objects of the company. I notice that in addition to carrying on the business of forestry and forest-related activities the company will be able to establish and carry on woodland industries. I would like to know what is the difference between forest-related activities and woodland activities, or is that just tautology? That is not a facetious question because it is important to know what the company may and may not do, and the interpretation is therefore important. However, it would appear that the new company will be able to extend themselves into areas that are quite a distance from the simple growing of trees. In so doing, as they will in their main activity, they will be entering into direct competition with private operators trying to do the same thing, with the advantage however that they will be selling the raw material to themselves or to their own subsidiaries and there is the possibility of preferential terms vis-à-vis the competitors operating woodland industries privately who would also have to buy from them.

It might make sense to have some system of fair trade practice rules laid down by the Fair Trade Commission to ensure that the forestry company do not compete unfairly or offer discriminatory terms or relatively more favourable provisions as to supply to its own subsidiaries engaged in the woodland industry against another company in the private sector engaging in the same type of woodland industry. With respect, assurances from the Minister on this point are not worth much. That is not a reflection on the present Minister, but ministerial assurances here in the Dáil carry no legal effect in a competitive situation. What is now needed is that the Minister and the Fair Trade Commission would agree under the powers which they have a set of fair practice rules which would govern both the new company and its private sector competitors. It is possible to have private and public sector activities operating side by side in an area such as this but it is important that they should do so on — to use the cliché — a level playing field.

I appreciate that I was allowed to speak out of turn by Deputy Jim Higgins. The final point which I wish to make, and I am sure it has been made by others, is the need to ensure — and this is certainly a public sector role — that broadleaf trees have a reasonable share of the overall plan in the country and that we do not go for quick growing Sitka or other type trees which are not the natural historic trees which are most prevalent in this country and that we preserve a reasonable mix of oak trees and other trees which have a much lower commercial return. I am sure the Minister will give attention to that matter. I am aware that grants are offered for the purpose; but, given the length of time in which it takes to get the money back, it requires very long sighted people to accept grants for the planting of oak trees. I am open to correction on that, as there may be some people who can see that far into the future. Perhaps the Minister would refer to that when replying. If this company are to be completely commercial in their activities they may well see that there is not any great commercial value, even for them, with their longer perspective than any individual, in becoming involved in this long range planting. Perhaps, the Minister would refer to that also in his reply.

I will be very brief because at this stage of the debate one notices that the arguments by and large, apart from rare exceptions are a regurgitation of previous arguments made on both sides of the House, or should I say on one side of the House? One of the strangest aspects of this debate is that for the past few hours nobody has offered from the Minister's side of the House. Are we to interpret this as a lack of interest on the Minister's side, that there is a lack of support for the legislation or that there is a bland acceptance of the legislation? No matter what interpretation you wish to put on the lack of offers by way of verbiage from the other side of the House, I think there is an obligation on both sides to contribute. No measure, irrespective of how well intentioned it may be or how meticulous the draftmanship may be, can be so perfect that it can gain the passive, bland, docile acceptance of each side of the House.

I welcome the measure but in doing so I want to stitch into the record of the House the point made by the two previous speakers, Deputy Avril Doyle and Deputy John Bruton, in relation to the contribution of our predecessors and in particular my predecessor in my constituency, former Minister for Fisheries and Forestry and Defence and the Gaeltacht, Deputy O'Toole, who together with his Minister of State, Deputy D'Arcy, took the initial steps for the legislation which is before the House today. He is somebody who did a lot of work and I can assure Deputy McCoy it is not just magnanimous for magnanimity sake. His ideals were good but, unfortunately, they did not bear fruition. Had they borne fruition perhaps Deputy O'Toole would be in this bench today and not I.

I pay tribute to the people over the years who got the forestry service under way from very small beginnings. They were pitifully slow at the outset because of lack of research, lack of confidence and lack of finance. In 1904 the State forest service was founded from very modest beginnings. From the year 1904 to 1922 a total of 1,300 hectares were planted. From 1922-34 the target was 1,200 hectacres per annum; from 1934-50 it was 2,800 hectacres per annum. The real growth and the real dynamism in relation to forestry — if it could be called such, because we never reached the level of achievement that was merited in this area — was in the period 1949-53 when we brought in the European recovery programme of Ireland's long term programme for strategy and development. This succeeded in bringing on stream an annual planting target of 10,000 hectacres.

I welcome Coillte Teoranta, but like many other people I bemoan the wasted years when we languished and wondered and planned and did not do much about it, the years when we looked to other resources, when we took the geography books as being a chapter in our past in terms of mineral exploitation and availability. Tynagh Mines came on stream and the whole concept, ideas and philosophy that we had no mine resources in this country were suddenly shattered. We had the oil crisis in 1974 when there was a massive growth and speculation in onshore development and everybody speculated and wondered about licensing terms. Everybody was hung up by ideologies as to what the State share should be and what the private investors cut of the loot should be. At the end of the day we still do not have a commercial oil field and still the speculation continues. We are now on the brink of another silly season in relation to licensing terms, exploration terms, tax revenue cuts etc. Every ideological hitch-hiker has his own idea of what each respective share should be.

During all this period we have been sitting on a blatantly obvious revenue source that has been lain wasted, underutilised and untapped. That is why I sincerely welcome this measure. I welcome the intention of the Minister, Deputy Smith, in this regard and the manner in which he has grasped the nettle and brought something tangible, realistic and feasible on stream — a proposal which, I hope, will provide the dynamics for the growth needed in this much neglected source of revenue over the years. There is no need for me to spell out the role of forestry as a resource to the economy. As has been said time and again, and when if anything has been over reported — the Minister was aware of this when we sat on the Joint Committee on the Secondary Legislation of the European Communities for four years, while we were in the Seanad and when we presided over a very worthwhile report — we all arrived at the conclusion that we had a cinderella growth area which badly needed exploitation, utilisation and development. In 1973-77 the time when we entered the European Community and the inception of the Common Agricultural Policy — we ran madly down the field of agricultural development in terms of creating mountains of beef, milk and other food resources. We created embarrassing gluts which we are now trying to redress by giving them away or by devising some disingenuous schemes for taking the top off those mountains.

We have neglected this massive indigenous resource which we have in Ireland. When one looks at the figures one will see that they are a stark reminder and indictment of our neglect of this particular area. At present Ireland has a mere 6 per cent of its land mass under afforestation. Britain has 9 per cent, France 27 per cent, Germany 29 per cent and Finland 71 per cent whereas it has been scientifically proven that in terms of productivity capacity we have the highest possible yield in the entire European land mass particularly for Sitka spruce and Lodgepole pine. I reiterate the point made by Deputy Bruton that we should not go away from the deciduous trees that are native and indigenous to this country, and I welcome the Minister's recent announcement about giving a higher element of grant for the promotion and encouragement of incentives in this area. The incentives of late have been excellent particularly for private afforestation. Under the western package we have a grant level of 85 per cent to a farmer to plant his land to give him a yield or crop that will be for his benefit as well as for the nation's benefit, and 70 per cent for others.

Unfortunately, and we have a consensus on this, the take-up has not been good. I welcomed the Minister's announcement some time ago of the introduction of headage payments by way of ad hoc payments while the crop is coming on-stream. The minimum wait period is 15 to 20 years before the thinnings come onstream and yield an income. While the concept is good, unfortunately I do not think it offers the level of income support either to small or big farmers to encourage them to devote their land to this type of crop investment. It is too long coming onstream and the amount of headage yield is negligible. Where you are talking about an exact quid pro quo, replacing a farmer's income that he got initially from headage payment by an equivalent amount for poor quality land, it is quite obvious that the amount of headage for cattle or sheep on poor quality land will have been minimal indeed. The Minister will have to look at some additional top-up mechanism or form of income support if we are to get the area of forestry we are seeking.

The grants are a considerable inducement in terms of capital investment but the unsolved problem is where we get an adequate support income for a farmer, his wife and family while they are waiting for the thinnings and for the crop to yield and bear fruit. As I have said, I bemoan the fact that we have not plugged into this sort of income earlier. Over the years we could have enhanced many a small farmer's income in the west in marginal land areas had we brought in a dynamic afforestation policy earlier. I ask the Minister what is going to happen to — on my estimation — the 40,000 acres of Land Commission land which was unallocated at the time of the decision to abolish the Land Commission. It would be well worth the Minister's while to look at the possibility of again having this land devoted to the new Coillte Teoranta concept.

The great fallacy that has helped to militate against afforestation up to now is that you had to think big, that unless a farmer was in a position to devote huge stretches or tracts of land to afforestation, there was no point in it. From the point of view of private afforestation, particularly where we have a land mix, rather than farmers being given considerable amounts of money to continue draining land which nature never intended for agricultural purposes, these farmers should be encouraged to devote small tracts of land — I know there is a threshold below which the new agency or the Minister cannot draw down or allocate grants for afforestation and that threshold is reasonable — called bottom land to afforestation rather than encourage them to use it for agricultural purposes thereby exacerbating the glut and the food mountains resulting from the oversupply of various foodstuffs.

The yield is considerable. We are talking about a minimum of £12,000 worth of timber per hectare, but we must get across to people the idea that in terms of income yield this is the figure, that it is a realistic and achievable target and that in yield forestry can now more than compete with other forms of land diversification and uses. We need a massive publicity drive initially to ensure that the scheme is launched on a positive note so that the level of take-up not alone anticipates but exceeds the targets. A massive advertising campaign is very important in this area.

Research has been referred to, particularly by Deputy Carey from this side of the House. Here there seem to be some omissions from the Bill, although the Minister may intend to fill in details or provide the necessary back-up service in this regard. Research is vital. It is a multifaceted area. We are talking about research in genetics, ground preparation, nutrition, weed control, thinning, spacing, entomology, conservation etc. It is a vast area and up to now, even though we have achieved a figure of 10,000 to 14,000 hectares per annum of late, operational research has been grossly neglected. Our commitment — or lack of it — in the area of wood technology was well underlined when in 1980 the grant for research in wood technology was withdrawn completely, thereby setting us into arrears in this area and underlining again our lack of commitment to the whole afforestation area.

Irish timber has the potential to be as good as the best but only provided we commit ourselves to its preparation, grading, drying and presentation. We will not push the importers off the market or elbow them aside or gain our import substitution segment of the market unless our timber is of quality. Bad presentation has ruined us and our reputation with people in the construction industry and the industrial field in general has suffered. Of all the areas of presentation nothing could be more important than grading. Marketing is enormously important. Up to now the Forestry and Wildlife Service have been involved in selling rather than marketing timber. In fairness to the people in the FWS they have not been trained in this. They have no experience or particular skill in it and no market research has been properly undertaken.

The matter of where the headquarters should be based has been well put for various parts of the country. I understand that Deputy Lowry had a strong case, of which the Minister of State would be very conscious, of the need to locate it in North Tipperary, and the Tipperary lobby who now have a Minister and two Ministers of State from the county will be making a very strong bid. I submit that some area that has a high element of marginal land, that has been proven as having a potential higher yield than even Finland, Norway and Sweden, a high incidence of marginal land which is of no benefit whatever for anything other than trees and can produce a higher level and quality of tree than anywhere else in northern Europe, should be considered. That is why I am convinced that had my predecessor, the man who initiated this measure, Paddy O'Toole——

That must be Leitrim.

——retained his seat and continued as Minister and had he managed to bring to fruition the legislative proposals from the review committee, Ballina would have been the headquarters of the new Coillte Teoranta. I cannot think of an area more central to Donegal, Leitrim, Sligo, Mayo, Galway and the entire coast, with excellent port facilities. I cannot think of an area that would better merit recognition as the ideal location for a headquarters than the town of Ballina.

The measure is good and positive and I commend the Minister on bringing it in. He has brought something onstream here which future generations will look upon and reflect that this House today in passing Second Stage did something really worthwhile to elevate what has been a Cinderella industry thus far to its proper status, rule and perspective in the national economy. It is an imaginative Bill, perhaps there is an element of gambling in it but, if it is tackled with vigour and determination, it is equipped to deal with the job.

I reiterate the sentiments of Deputy Carey in relation to the people who will be giving advice. The ACOT advisers have done an excellent job in their own field and have been involved in afforestation to a limited extent; they should also be involved in promotion and giving advice. I also share Deputy Carey's anxiety in relation to the failure by the Minister to properly quantify the valuation of the assets bequeathed by the State to the new organisation. It is important to put a realistic valuation on it so that when the targets are met, when the annual report is made and the figures published, we will not get an under-valuation or an over-valuation. It is an excellent idea to make them a private body but I hope we will not give it the independence of operation which we gave to An Post or Bord Telecom Éireann because this week a measure for consumer protection in relation to the activities of those two organisations had to be introduced by this side of the House.

I welcome the Bill and I urge the Minister to keep a watching brief on the organisation's activities. Their success should be monitored and, if they need to be revamped, updated or revitalised, he should have the necessary humility to come before the House if certain measures need to be amended or changed.

Time is at a premium and I will be brief. The Minister's proposal to set up a new State company to manage and develop our publicly owned forests is a welcome and innovative measure. The new company, to be known as Coillte Teoranta, will have, as their objective, the achievement of profit for the nation from a natural resource which has been grossly neglected and undermanaged in the past.

This is further evidence of the Government's utter commitment to forestry and afforestation which will result in an obvious benefit to the economy. This commitment was first portrayed by the Taoiseach's appointment of a Minister of State to take sole charge of forestry, thus giving it a whole new significance and profile and departing from the traditional method of tagging it on to some other Department or Departments. This was a major challenge to the appointee but few Deputies will disagree that Deputy Smith responded magnificently to the challenge. His grasp, knowledge of and flair for his subject is clearly recognised. This is evidenced by the tremendous progress made in the brief period since he took office.

Earlier this morning Deputy Doyle claimed credit for her former colleague in respect of progress made in forestry. We should all be grossly ashamed of the lack of progress in forestry until the Government and the Minister tackled the problem in a serious manner. This is the first progressive and serious approach to the whole issue. In 1987, for instance, the level of planting here was the highest in history, 11,000 hectacres, and all the signs are that 1988 will be another record year in this regard.

This new company will be set up on the same lines as An Post and Bord Telecom Éireann as the format in relation to them has been successful. The new board comprises nine members and chief executive, which is about right for optimum efficiency. I have no doubt that those appointed to the board will be of appropriate management calibre and expertise. The responsibility the board will assume is quite awesome. We are talking about taking over hundreds of millions of pounds worth of this country's assets which have taken many years to accumulate and for which the taxpayer has footed the bill. It is envisaged that the new company will handle the commercial aspect of forestry only and will be staffed by the transfer of people from the Forestry Service. The Minister will retain responsibility for non-commercial activities such as wildlife and forest parks, etc.

The Government have clearly recognised the potential of forestry as a major growth industry and are now taking the necessary action to ensure that such growth materialises.

Tourism is another industry which comes into the same category in terms of growth potential. It is very important that these two industries complement each other. They can — and must be — closely related. Haphazard planting without proper planning in terms of location, species and so on could seriously detract from tourism development into which the Government are putting so much effort and concentration. This is particularly relevant as far as my own county is concerned where we lean very heavily on both these industries in terms of the overall economy of the county. We have a wonderful, scenic countryside, much of which is attributable to the work of the forestry people over the years in relation to forest walks and the beautiful Avondale. It is very important for these two industries to work hand-in-hand. It is essential that planting is designed in such a way that the resulting forest will compliment and adorn the countryside instead of detracting from its beauty.

Our beauty spots and scenic areas cannot only be enhanced but expanded by careful attention to detail in this respect. In this context, the Forestry and Wildlife Service must be complimented and congratulated on their attention to date to forest location and design. The people involved deserve great credit. In my day-to-day activities, I have had occasion to meet and to get to know intimately many of the foresters over the years and they are dedicated people. Year after year qualified people have emerged from our forestry colleges, with the result that we can now boast of a wealth of experience and expertise in this whole area. The culpability for forestry not having developed commercially as it should, cannot be blamed on our foresters. The fault lies squarely on the shoulders of successive Governments who failed to recognise or regard forestry development as a serious commercial proposition.

It is vital that a concentrated, commercial approach is taken to this industry which has such a vast potential for wealth creation, long term perhaps, but that is the way we must think. Planting is important but the planting of particular species and the range, from a commercial point of view, is also very important. It is regrettable that negligible amounts of hardwood were planted in the past. Hardwood timber planting amounts to a mere 3 per cent of total planting and, apparently, one-third of that was ash for hurleys.

This takes us back to the necessity for a commercial approach which, had it been taken earlier, would have resulted in more substantial quantities of hardwood being available. Had that occurred we could be thinking of processing that type of timber in the manufacture of furniture for the home and export markets. We have allowed much of our hardwood forestry to be laid waste and there was no better example of that than in my own county of Wicklow. We saw the great oak woods of Coolattin being ravaged in a most indiscriminate way. The great oaks were felled and exported for personal profit and replanting, as stipulated in planning permissions granted, was not adhered to. To add insult to injury, some of that Irish timber which was exported to Europe was imported by us in the form of furniture. The consolation is that there still stands a section of those great woods in Wicklow in an area known as Tomnafinnoge woods. For that we must thank the Taoiseach who, with the Minister responsible for forestry, Deputy Michael Smith, visited the area last year. The resultant action brought to an end the destruction that was taking place. That type of destruction of our inheritance must never be allowed occur again anywhere in our country.

With the changes taking place in agriculture it is necessary that farmers look to new horizons and seek alternatives. In this context forestry is an obvious and realistic choice. The Government have taken positive action to encourage and promote private tree planting. It is also intended to extract from the EC greater financial incentives for the promotion and encouragement of private planting. That increased funding will materialise, I have no doubt, because the Europeans are only too aware of their own disadvantages and limitations in the matter of tree planting as compared with the wonderful God-given agronomic, climatic and environmental advantages we enjoy.

The measure before us is of great importance to County Wicklow which, percentage wise, has more of its area planted than any other county. In Wicklow forestry, and the timber business in general, play a big role in the economy. The industry, which provides in excess of 1,000 jobs, is the largest source of work in Wicklow. At this stage I am sure the Minister of State has been lobbied on many occasions about the siting of the headquarters of the new body and I should like to add my voice to that lobby.

Foynes is the place for the new headquarters.

There are many Deputies who would like to see the headquarters of the new company set up in their constituencies. I am no different and I have been pressing the Minister, and will continue to do so, to locate the headquarters of Coillte Teoranta in Wicklow which is the premier forestry county. In my view Wicklow has all the attributes and qualifications to accommodate the new company. Indeed, there is a need for the fillip which the locating of the headquarters would give to the economy of the county. In recent years the economy of Wicklow has been devastated by the run down of operations such as those in the fertiliser and pottery industries.

In order to acheive decentralisation it is not essential to transfer an operation 100 or 150 miles from Dublin. I hope the Minister will give favourable consideration to my invitation to site Coillte Teoranta in the garden county. Such a move would be welcomed in Wicklow. The Minister has been informed that there are people in Wicklow who are prepared to provide ideal office accommodation should it be deemed necessary or appropriate. In conclusion, I should like to wish the Minister continued success in his work and I wish the new board every success in the work that lies ahead.

I should like to thank Deputies for giving such a warm welcome to the Bill. It is clear that there is widespread support for the measure, even though we may differ in regard to some of the provisions. The support for the Bill is such that I am sure it will be passed very speedily. The Government decided to reorganise the Forest Service at a time when the industry is facing a most exciting but challenging and competitive future. New opportunities will continue to emerge for timber sales at home and abroad. We need to have in place an organisation that will ensure that such development takes place speedily and with benefits to the Irish taxpayer. We must ensure we are in a position to take up the opportunities as they arise.

The new company will assume responsibility for all our commercial forests. It will have an agreed capital structure and the power to borrow. I do not want to make light of the task that lies ahead of the new company. When legislation is introduced here some Members believe that is all that remains to be done. In this case there is a gigantic task ahead for the staff of the new company if they are to ensure that the opportunities at home in supplanting imports of wood and timber products and those developing in the Community and Worldwide are grasped.

In the past Governments have invested huge sums of money in forestry. We do not want to have for all time a subsidised forestry industry. We want it to be independent and the establishment of the new company will pave the way for that development. Our aim is to have an industry that is financially self-sufficient. Some Members have expressed a worry about the environment and so on and I should like to tell them that the only way we can guarantee we will be in a position to deal with such matters is to take the pressure off our taxpayers and have a self-sufficient industry.

This morning Deputy Doyle was worried about the absence of provisions to protect our environment. That is not so and I should like to refer her to section 13 (1) (c) which states that the company shall have:

... due regard to the environmental and amenity consequences of its operations.

Section 38 (1) (c) states:

The Minister may, with the consent of the Minister for Finance, issue directions in writing to the company requiring the company—

to maintain or use specified land or premises in the company's possession for a particular purpose.

They are worthwhile safeguards. Another provision enables the company to be refunded by the Minister for activities of a non-commercial nature which it carries out. The company will be required to operate in a commercial way and it is fair to say that without the provisions I have referred to environmental and non-commercial activities, such as those related to forest parks and so on, would be neglected. We have ensured that will not happen.

Since we assumed power we have not been depending solely on the provisions of this Bill to indicate our awareness of the necessity to make the public as a whole more conscious of the environment. Deputy Jacob referred to the desecration of Coolattin which was taking place when we came to power. The oak canopy which overhangs Tomnafinnoge wood is still there because of the action we took. We were not satisfied just to preserve a dwindling part of our oakwood inheritance. We introduced an increased level of grants for the private planting of broadleaf trees and ensured that the national planting programme will contain an increasing element of broadleaf plantation.

When will the Minister bring in the Bill promised last year?

We introduced a further measure relating to ash growing. The Forest Service has opened up the forests to the public, has provided forest parks and picnic sites and has transferred over a number of years vast tracts of land under the most generous terms to the Office of Public Works. If Deputies or organisations identify sites held by the Forest Service which are of a scientific, historical or other interest, we will have the same open policy of transferring those properties to the OPW. Deputy Doyle referred to the recent case at Glendalough. We do not have to go much further in indicating our awareness of the environmental matters which hinge on these provisions. We are not satisfied just to instal legal and statutory instruments. We have taken measures on the ground which have proved our concern not just to talk about these questions but to take action.

I do not want to diverge from the provisions of this Bill but I will respond to the question Deputy Kavanagh has raised regarding another Bill. A few weeks ago the Government cleared certain provisions which will be introduced as soon as possible to deal with a question he raised with regard to the compensatory features of the Local Government (Planning) Bill.

Several Deputies referred to the method used to value estates. Certainly we need to establish valuations at the earliest possible date. A great deal of work has already been done but there are many aspects to valuation, including forest, land and buildings. There is no difficulty in valuing buildings, roads, bridges and land but the valuation of a forest estate is a complex matter to which we are giving great attention. We hope before the final passage of this Bill to give a detailed indication of our forest valuation. I am aware of the points made by Deputy Carey and Deputy McCoy in regard to valuation and the implications for the balance sheet of the company. These points will be taken into consideration.

The figure of £1 billion for authorised share capital in section 10 (2) (a) is designed to cover immediate share issues relating to the value of the estate and also future equity funding in the medium term. It is not solely the value of the assets being transferred. I cannot understand the concern regarding the major or minor shareholding in this company. The shares are being held by the State, not for the gain of an individual Minister. The sections relating to the holding of shares are representative of normal shareholding provisions in other legislation. It is not inconsistent that the Minister who provides the finance should be the major shareholder.

Deputies also expressed the wish to see the opening balance sheet of the company. I have already referred to the valuation of assets and it is reasonable that the company should deal with all relevant matters in their first annual report which, under section 31, will be laid before the House in accordance with normal practice. I will deal with this point in more detail on Committee Stage. The points made by Deputies are relevant.

Deputy Carey is concerned to know where in the Bill performance indicators are covered. There are a number of sections which provide either for the setting of targets for the company or for eliciting information on performance. Section 38 (7) provides for the stipulation of financial and other targets to be achieved by the company. Section 14 provides for agreement on the annual programme of the company for land and timber sales. Section 31 provides for specific information to be included in the annual report of the company, apart from normal compliance with the provisions of the Companies Act. We will always have the right to deal appropriately with the directors if their performance is not up to scratch.

Deputy McCoy indicated that he saw no clear corporate purpose or commercial mandate for the company in the Bill. I refer him to sections 12 and 13 where it is clearly provided that the company will utilise the resources at its disposal in a commercial, cost-effective and efficient manner. Additional objectives will, of course, be provided by way of section 38 (7) and the targets to be set for the company.

Many Deputies referred to the problems relating to staff. Personnel management and the general regime must provide incentives and flexibility and the bottom line accountability which will unleash the energies of the staff in the Forest Service to meet the mandate laid down in this Bill. The clear message from the staff is that they accept the concept of transferring from the present service to company status and look forward to the new environment they expect this will create. They will be able to get on with the job in a more efficient way. It is clear that in the past they have often been frustrated by the difficulties of several imprecise and frequently contradictory goals. Only those staff engaged in the activities being transferred to the company will be designated for transfer and discussions are on-going with the trade unions and staff associations in that regard. It will be up to the company to develop manpower policies thereafter in accordance with their needs. While the pension liabilities of all retired staff may be transferred to the company, the Minister for Finance will be liable for the cost of those pensions and the pension entitlements of all staff up to vesting day.

Deputy Sherlock raised a point concerning guarantees to staff in regard to conditions of employment and felt there might be different treatment before, on or after vesting day. I can assure him they will not receive any different treatment. I will consider making the relevant references more explicit.

A number of other Deputies referred to the absence of marketing in the Bill. I think they will understand that that is really a matter for the company as they must evaluate current and emerging needs and plan to meet them. The whole underlying reason for the establishment of this company is to provide the organisation with the mechanics to be more market and business orientated. While references have been made in the past to the forest service marketing tactics, the tender system and so on, which were exaggerated and the criticisms unjustified, the forest service has made great strides in recent times in relation to its strategy and to the needs of the industry. In addition, all staff have received training in marketing techniques with an eye to the future needs of the company in this area.

In the past year and a half we have introduced a number of new types of sales. We have had a number of very successful national auctions——

Including Christmas trees.

——including Christmas trees, where we raised the income from £300,000 in the previous year to £700,000 without increasing the number of trees that were sold. We have also tried to improve the quota system. Quite a number of the processors now have advance notice of a certain percentage of availability of their supplies year in and year out. This has obviously provided much more stability to this situation. We intend to continue down the road of exploring new opportunities and new ways of developing that market. We stand open to suggestion. We are not solely depending on the tender system. Whenever there is an insufficiency of supply you have to adopt some system which limits sales. The tender system obviously is one way of disposing of supplies at a time when you are not able to supply all demands.

I do not think there is any relationship between the points which were made on marketing and the failure to sell off all the immature forests which were put up for sale in 1987. The fact that we did not sell all the immature tracts last year does not suggest any failure on our part. It would have been a failure on our part if we sold these properties for the bids that were offered. I said when they were put up for sale that we would not accept unacceptable bids. If the Opposition parties want the Government to sell for the sake of selling, to accept the prices that are offered——

To go about selling.

——we are not in the business of doing that.

Making an effort to sell.

As far as making an effort to sell is concerned, we did make an effort and there were plenty of people in the market who wanted to exploit that situation. When we decide to dispose of further immature tracts of forest in this way we will sell in the same way as we did last year——

You played into the hands of the financial cartel.

——by putting them on the open market here, but we will not be prepared to sell below value. Even though that presented an enormous financial problem for us last year, because we were obliged to raise £3 million through this source in order to have an extended advanced planting programme, we decided not to sell because the bids were not acceptable and we were short significant funds as a result. We still maintained the advanced programme of planting and generated finance from other savings and other sales including Christmas trees.

You did well from them.

It is one thing to criticise but it is another to come up with a proposition or a suggestion as to how they should be sold in different ways. As far as I am concerned, as long as I have the responsibility no properties will be sold unless I am happy that the correct value is paid for them. We should ensure that in the national interest, and in the interest of the taxpayer and the generations of people who have provided much money to make sure that these forests would be provided in the first place.

The Bill provides, under section 12 (1) (b), for the establishment of woodland industries, which includes any form of industry related to timber processing. Deputy Bruton seemed to have a problem this morning with definition. He wondered what this meant and what other forest activities meant. When we are talking about forest activities we are mainly talking about establishment and field work. This is intended to separate that from the processing area. It is not intended that the company should become immediately involved in this area, but the provision is there should suitable opportunities emerge in the future. We are giving the company the widest possible charter and I have no desire to restrict them in any way.

The new company will continue to work in a close and constructive way with the timber processing industry. Deputies referred to the necessity for further provision of kiln drying facilities and the use of the best and the newest technology in the development of timber products. The development of improved drying and treatment facilities for timber is high on the agenda of this Department and obviously will be high on the agenda of the new company. The IDA have grantaided several kiln drying facilities at sawmills. Recently Eolas, following many years work on mechanical stress grading, proposed a new Irish standard for construction timber. The success of these measures can be seen in the displacement of imported timber for use and construction by Irish timber which now supplies 50 per cent of that market. Our aim is that we would in the next number of years see the percentage of construction timber used on the domestic market transferred to native timber on a growing basis, rising to 80 per cent.

I accept the point made by Deputies that in the past there has been poor marketing. In some cases the treatment of the wood has not been anything like it should have been, but we have got over that problem now. In recent months a number of Irish processors have been able to gain a foothold in the UK market. Because the UK imports 90 per cent of its timber requirements, the opportunities for exports to the UK are phenomenal. We have to ensure that we get a particularly good product onto the market. The traditional attitude to Irish timber here at home, not to mind what it was abroad, was disastrous. Any failure on our part to take up the opportunities on the export front and to have the best available product would certainly jeopardise the potential development that is there for the future. It behoves the researchers, the processors, the forest service and the new company to ensure that no mistakes are made in this area.

The setting of annual planting targets was raised. Since assuming office we have, as I said on Second Stage, significantly increased planting both at State and private levels. I hope we have got to the stage where it will not be possible in the future ever to go back the road we travelled in the late seventies and the early eighties in terms of cutting back on national planting, both State and private. It is not, however, a matter to be laid down in legislation. For instance, we have seen private planting grow from a couple of hundred hectares a few years ago to 4,000 hectares this year. We need to continue to increase the opportunities that exist for private planting. A stage will come when a balance will be reached between what is an annual optimum possibility for private planting and what would be an agreed target in the same area for planting by the new company. It is not possible at this stage to specifically put into the Bill what the company should or should not plant, but it is clear from what we have been doing in the area of State planting that that is the road we want to travel.

In order to allay Deputies' fears so far as the capital being provided for the company is concerned, there would be no reason to make capital provision for the new company if they were not going to plant because it would be very easy for the new company to go on harvesting. Even before we increase the amount of timber — at present just under 1.5 million cubic metres to 2 million cubic metres in 1992 and to 3 million cubic metres by the end of the next decade — they would probably break even. The reason for making the financial provision is to have an even aged plantation. To be able to secure contracts and supply wood, sawlog and pulpwood to industry and to attract new investment and new industry, we have to have an even aged plantation, and that requires consistent annual planting over a prolonged period. About half our forests are still under 20 years old. To put that into perspective, if we stopped planting, in ten, 12 or 15 years' time, the pulp that would be required for Medite or any other new industry we would attract would not be available from our own resources.

No matter from what angle we look at this — the need for providing capital, which we are doing in this Bill, the fact that the company would be self-sufficient immediately if they did not have to plant, and the overriding requirement to get the balance between acceleration on the private planting side and having the proper mix with State——

I must ask the Minister to conclude. Each speaker is confined to 20 minutes under the order of the House.

The Minister has until 1.15 p.m.

I understood the Forestry Bill would conclude at 1.30 p.m. Obviously, I have to bow to the wishes of the House, but if I had been aware of the position I would not have gone into such detail when replying to the points raised by Deputies. I would like to continue down that road if I may. Is my time limited?

Acting Chairman

Every speech must be made within 20 minutes.

How long have I left?

Acting Chairman

You are in injury time.

As there is no replay, perhaps the Chair could be generous with injury time.

I, too, thought the Minister could use the time up to 1.15 p.m. There are one or two questions I wished to ask before Committee Stage, because Committee Stages are so truncated that we often do not reach a number of sections, as happened with the ESB legislation last night.

Acting Chairman

The Minister has two minutes.

I thank the Chair for his understanding, but I thought I had longer and wanted to deal with all the points raised.

This morning Deputy Lowry raised the question of the black economy. My Department have long worked with the Department of Social Welfare in giving information or facilities required to combat any black economy dealings in the forests. I can assure Deputy Lowry that all contractors engaged by my Department are contracted to employ legitimate workers who pay tax and PRSI and who do not collect dole. I cannot, however, vouch for the vast majority of contractors in forests who are not employed by my Department. My colleague, the Minister for Social Welfare, has initiated a campaign to track down these workers and great success is being achieved. My Department and Coillte Teoranta will continue to co-operate with all regulatory bodies and I am confident we can provide a healthy competitive environment for all legitimate contractors and eliminate the black economy.

Deputy Carey mentioned the conflict of interests in relation to private planting. Private planting management is retained by the Minister for Forestry and not in the new company to avoid this conflict, although he may require the company to provide services in this connection on an agency basis. Deputy Carey also mentioned the funding arrangements and the Bill suggested a break even position by 1992. The funds provided from the Bill essentially cover the next four or five years and, as is common practice in such matters, will enable the Dáil to assess the performance of the company over those years should it be necessary to amend those sections in due course. I am, of course, concerned to ensure that break even occurs at the earliest possible date and the company will have much to do to live up to the targets I will be setting for them in that regard.

Section 14 deals with the agreement of annual programmes. This section is not meant to constrain the company unduly but merely to protect the State's investment in their assets. I want to ensure that the company's policies in regard to the disposal of assets is consistent with good commercial principles and that no short term gains are made at the expense of long term stability of supplies. I can assure the House that I will not interfere with the normal commercial activities of the company but, on the contrary, will expect them to develop their own policies and manage their own affairs in accordance with the targets set. Nonetheless, I regard basic control as essential. We want the company to manage the farm, not sell off a field every year to cloak their inadequacies.

Or a cow.

What about the gift statute?

I have dealt with section 38, which deals with recoupment for non-commercial activities, in my reply to Deputy Doyle's question. A number of questions were raised in the context of using ACOT and Eolas. This Government have set their face against overlapping and we must avoid that at all costs in our planting scheme. I do not envisage at this stage any need to involve any other body to carry out the administration or the inspections under the planting grant scheme. I think it would be preferable, however, that Eolas should continue as an independent institute giving advice to and carrying out research for a variety of interests in the private and public sectors.

It will be for the new forestry company to decide what arrangements will exist between the company and Eolas, in the same way that private sector companies are free to take such decisions. Obviously, the new company will have to do research but it will be open to them to avail of the services of Eolas, which I expect they will. It will be going in the face of what have been new practices in relation to these matters when we avail of contracts. That, traditionally, has been the relationship between the forest service and Eolas.

Some Deputies misunderstood section 45 in regard to the use of the Office of Public Works. There is no obligation on the company to use the Office of Public Works. It is merely a facility which is available should they so desire.

In conclusion, I thank the Chair for his forebearance and the Deputies on all sides who supported this measure. I want to say that we have a unique opportunity to put in place legislation which will give a commercial mandate to forestry and achieve the growth and benefits we want for the country as a whole. I am still open to suggestion and I assure Deputies that we want to produce the best possible legislation. I will be glad to hear Deputies' contributions on Committee Stage. I am only sorry contributions were restricted today and that many Deputies who wanted to contribute, particularly on the Government side, did not have an opportunity to do so.

May I ask two questions, because the Minister did not reply to the points I raised?

Acting Chairman

This is unusual, but you may ask two brief questions.

There is no mention of worker directors in section 15. Will this be covered in the Schedule to the Bill being put through the House by the Minister for Labour?

Was there a second point that the Deputy wanted to raise?

Secondly, I found myself much in agreement with section 40 (3) which dealt with the vesting day and the taking over of the workers and employees of the present Department. There is a small phrase, "with effect from vesting day"; but, if this operation was not carried out on vesting day and all the people were not transferred, a number could lose out. The formula is not the same as in the Telecom or An Post Bills. There is a slight variation. Could the Minister look into that between now and Committee Stage?

I said during my concluding remarks, in reference to a point raised by Deputy Sherlock I think, that we would ensure that there was no difference between the treatment of staff on or before vesting day.

Or after?

Or after. Obviously, I shall be intent on ensuring that. We will have continued negotiations with the trade unions in that regard. On the question of worker directors, the position is that the decision has already been taken on the numbers that will be appointed to the board and each member of that board will be appointed in his or her capacity to carry out the mandate of running the forest service on a commercial basis. It is therefore not intended to have worker directors as such, although provision is in existing labour legislation at sub-board level. It will be open to any member at any level in the country, in the forest or otherwise, who has a capacity; and all we will be seeking is the capacity of the individual to carry out the mandate which we are laying down for the new forest service.

In other words, the Minister will be looking for working directors?


Presumably the Minister is excluding worker directors because the people who work in the service will still be able to do that service.

Question put and agreed to.
Committee Stage ordered for Tuesday, 7 June 1988.