I would like to say at the outset that I am very unhappy with the way in which we are approaching this debate. We are essentially being asked to debate the future of Bord na Móna completely in a vacuum. The Minister's predecessor commissioned a consultancy report the findings of which were never made public. The feeling is that it has been committed to the wastepaper bin. In any case we certainly have not seen the proposals that those consultants were making for the future of Bord na Móna. Yet we are discussing today a major restructuring of the board.
We are also in a vacuum in that we do not know whether the Minister proposes that the existing divisions of Bord na Móna should be established as private companies. We do not know how the Minister will approach the need for capital restructuring within Bord na Móna which is going to become a very pressing problem. The Minister has not, as yet, sanctioned the publication of the board's annual report but the dogs in the street are reporting that the losses are of the order of £80 million to £90 million and that the board, after those reports are published, will, technically, not be able to meet their liabilities with their assets and will, therefore, face a serious crisis of some sort in which the Government must become involved. We do not know how the Government intend to deal with the restructuring needed and we do not know how each division of Bord na Móna is fareing.
We are approaching this Bill in a vacuum. Indeed, when this Bill was introduced in November, 1988 I made precisely these points, that we were in the dark as to where Bord na Móna were going and that we were being asked to approve a Bill involving the restructuring of the board without knowing what was in the Minister's mind. We are now in February 1990 and we still do not know what is in the Minister's mind, and that is a very unsatisfactory way to proceed. I am hoping that in the course of this debate we will not just see the Minister respond to the letter of the different amendments but that he give us some impression of the way he sees the board evolving with the help of this new Bill.
In moving amendment No. 2 to section 2 I am trying to sharpen the nature of the relationship between the proposed subsidiary boards that are to be established and the parent board, and the Minister in his response to this amendment last week suggested that they were introducing too many restrictions. I beg to differ, in paragraph 6 (a) of my amendment I am requiring that the board would no longer have to have the sanction of the Minister for Finance for investment of a limited extent in new companies and I set the figure at £10 million.
It is about time that we faced up to the situation that if we are to have commercial State bodies performing commercially they cannot be going back to the Minister for Energy and the Minister for Finance for sanction for every little thing they do. The Ceann Comhairle has extended the debate to other sections of the Bill on this proposed amendment. Some of the proposals in this Bill are ludicrous. We have a situation where if the board want to execute building works, if they want to embark on research of any kind whatsoever, they will have to get sanction not just from the Minister, which is ridiculous enough, but from the Minister here and the Minister for Finance. If one employs a dog, one should not do the barking oneself but under the proposed amendments here the Minister is requiring that both himself and the Minister for Finance would do the barking in respect of Bord na Móna. I cannot see the sense of that and I would like to hear the Minister's response.
Subsection (6) (b) of my amendment to section 2 suggests that there be fair trading rules. However, the Minister and Deputy Sherlock suggested this would be overly restrictive on Bord na Móna but the wording is that it only applies "if the Minister has reason to believe the proposed company might take a dominant position in the market liable to conspire against the public interest". This is enabling legislation and we do not know what the board intend to do when they enter new business. The ESB proposed entering the business of coal trading and have entered into the trade of brown goods. Both ventures provoked strong reaction and there were accusations that the ESB were adopting a dominant market position by entering these businesses. I am not convinced that the ESB are adopting a dominant position. Regrettably the ESB have not moved on the coal venture but they have been established in the brown goods trade market for some time, and eventually the Minister for Industry and Commerce referred the matter to the Fair Trade Commission for a ruling.
If we genuinely believe there is a danger of a dominant market position being adopted by a State board entering a new business, we should look at this at the outset and not wait for years — as has been the case in the ESB — and perhaps do serious damage to legitimate traders if the accusations hold up, and eventually find the matter referred to the Fair Trade Commission. All I am suggesting is that where the board are establishing a business and the Minister fears there may be a danger in this regard, it would be much simpler and cleaner at the outset to refer the matter to the Fair Trade Commissioner who would establish rules as to what constitutes fair trade. That would be better than waiting, as in the case of the ESB and then doing the same thing later.
Responding to subsection (6) (c) in my amendment the Minister said he could instruct such accounts to be published. That is fine, but in this House we will have only one chance to decide how we would like to see things done. The Minister has not in the past instructed Bord na Móna to publish separate accounts of the different divisions. We do not know how the milled peat division or the horticultural division are doing financially. I believe that is relevant information to which any Member of this House should have access. The Minister has not taken the trouble to instruct them about the manner in which they present their accounts so that we would have that clarity. I am not convinced by the Minister assuring us that he has these powers because he has not bothered to exercise them in a way I think would give us reasonable information. I still maintain that the board should publish separate accounts in respect of their separate ventures.
In subsection (6) (d) in the context of presenting accounts and the success of the different ventures, I am requiring that the board should do the same as is done in the planning field. At present each State board must have a five year plan projecting where they are going in the future. Equally, after five years trading, Bord na Móna should report to the Dáil on how those ventures are performing and where they see their future. It would be very useful where the board are entering into new joint ventures for them to provide a report on a regular basis, and this would be a new element of the five year planning cycle that is already there.
In subsection (5) of my amendment I am requiring that the relationship between the board and any subsidiary or joint venture that they establish, should be on a normal arms length basis, that the company can put equity into a new venture but they would not give preferential loans or continuing subsidies to the new venture. The Minister suggested that normal commercial companies would be involved in providing subsidies or preferential loans to their subsidiaries. I gravely doubt that, in the case of large companies which establish subsidiaries, it is the practice to give preferential loans to their subsidiary companies. I think they adopt at arms length attitude to those companies and that they require them to stand alone once the equity investment has been made.
The logic of what I am suggesting is that the relationship should be of that nature and that there would not be a continuing subsidisation from the parent company, either by way of preferential loans or any other way to a venture that is supposed to be profitable. In the long-term it would not be satisfactory if we found that the survival of the new ventures which State companies entered into was only guaranteed by preferential treatment from the parent company. That should be put into the Bill. If the parent company want to help a subsidiary, it should be by way of new equity investment and not by way of continuing subsidy.