Companies (No. 2) Bill, 1987: Report Stage.

Mr. J. Bruton

I move amendment No. 1:

In page 14, line 19, after "this Act" to insert the following:

"save that the Minister may not make such an order without also tabling a statement before both Houses of the Oireachtas to the effect that the relevant state agencies have sufficient resources to enforce the provisions being brought into effect".

During Committee Stage discussion concern was expressed by a number of Deputies on all sides that we have frequently passed legislation which we were subsequently unable to enforce effectively. Indeed, if you look at Irish legislation on almost any subject you will find it is quite modern by international standards, but unfortunately the reality is that we do not seem to be able to provide sufficient personnel or resources and sufficient training for the personnel involved to adequately enforce at least some of the legislation we pass. Legislation dealing with company fraud or what might be popularly described as white collar crime is particularly difficult to enforce without adequate personnel and adequate training for those personnel.

This Companies (No. 2) Bill makes a huge change in our company law. It creates a number of new criminal offences, particularly the offence of reckless trading. Obviously, to prove that somebody traded recklessly at a given time will require a detailed investigation, not just of the affairs of the company at the time the investigation is taking place but of the affairs of the company at the time a director, who may be the subject of the prosecution, failed for example to move for the company to be liquidated; in other words, one requires to be able to get information about a particular point in time in the past in addition to simply getting information that may be available now.

If the companies legislation is to be effectively enforced we must have a firm commitment from the Government that adequate resources will be provided. We have a very clear example of the inadequacy of the present resources in this general area when we contemplate the Merchant Banking collapse. In that case the institution had a branch — or associated companies at least — in Northern Ireland. They also had a branch, or associated companies, and their head-quarters on this side of the Border. Subsequent to the collapse, companies in the two jurisdictions were investigated. In this jurisdiction, although a report was produced by the liquidator which contained very serious allegations no action was taken in the court on foot of the allegations, arguably because the resources did not exist on this side of the Border, in the Fraud Squad or elsewhere, to assemble the evidence in such a way that a judge might be persuaded to accept that wrongdoing had taken place.

There has been no suggestion that the reason action was not taken on the report was that legislation here was inadequate. No explanation has been given for action not being taken. However, in Northern Ireland in respect of the same company, in respect of basically the same facts, a prosecution was taken and brought to finality in respect of a company whose major scene of operations was on this side of the Border. That clearly indicates that unless there was some interference with the freedom of action of the Fraud Squad or of the Director of Public Prosecutions there clearly was an inadequacy in the evidence-gathering capacity of the people concerned with the enforcement of the then company law, Central Bank legislation and so on in respect of which breaches were alleged.

This is one of the biggest Bills to go through the House in 20 years. It has required a huge amount of work by successive Ministers concerned, their officials and Deputies. However, all that work will be nothing more than an elaborate waste of time unless the resources exist to enforce it properly. If there is in legislative terms what one might describe as an Irish disease it is passing high sounding legislation, putting it on the Statute Book and failing to enforce it. Let us ensure in this House today that that will not happen in regard to the Companies Bill.

The proposal which Deputy Barrett and I are making is to require an amendment to section 2 of the Bill which provides for an order to be made by the Minister to bring various parts of the Bill into operation. He has discretion in this regard, he can bring some parts in at certain times and he can defer the introduction of parts of the Bill to a later date. We propose that the Minister may not make an order to bring this Bill into effect without also, at the same time, tabling a statement in his name before both Houses of the Oireachtas to the effect that the relevant State agencies, the Companies Office, the Fraud Squad, the DPP or whatever, have sufficient resources to enforce the provisions being brought into effect. If accepted by the House, that will require the Minister before he puts his signature to that order to address specifically the issue of ensuring that adequate resources are available to enforce the legislation.

It will force the Government to address that issue and it will considerably strengthen the Minister's hand in his negotiations with the Minister for Finance who is responsible for the public service in obtaining whatever staff are necessary to ensure the legislation is effective. If the Minister has to say he is putting his name to a formal statement lodged before the House that there are adequate resources, that solemn, statutory obligation placed on him will place a very significant weapon in his hand in any negotiations he has with the Minister for Finance with a view to getting whatever extra staff are necessary to enforce the legislation.

Far from causing a delay the amendment will provide the Minister with additional strength to get the staff necessary to ensure that this very important legislation is effectively enforced.

An Ceann Comhairle

I call Deputy Seán Barrett whose name is appended to this amendment.

Mr. S. Barrett

The amendment is in joint names. I will not go over the ground already covered by Deputy Bruton but I want to make additional points. We are all concerned at the lack of respect in some cases for certain institutions of the State. One example is in relation to the Office of Director of Consumer Affairs; every time a problem is discussed in relation to sale of goods, etc. the matter is referred to the Director of Consumer Affairs. Anyone who takes time to read the director's report will see in it an element of total frustration in so far as resources are just not available to that office to fully investigate the issues referred to the director.

As Deputy Bruton said, very strong measures are incorporated in the legislation which the members of the special committee and I agreed are there in the interests of proper order in our company law to protect the ordinary member of the public and those engaged in day-to-day business. There are measures which could have a serious effect on the reputations of some company directors. We had a good deal of discussion about this in the select committee. We discussed the fact that recordings of various events could be taken and unless subsequent evidence is produced to vindicate the person in question, records which could cause serious damage to the reputation of the individual concerned, would be kept. That is what Deputy Bruton and I are talking about here. We support the general principle of the Bill, we were involved in the long debate on it and we consider that it would be foolish to introduce some parts of this Bill without being entirely satisfied that we have the resources to pursue the measures incorporated in the legislation.

During the Committee Stage debate it became obvious that the Department of Industry and Commerce are totally understaffed both in trying to draft this legislation and, eventually, in terms of pursuing the provisions incorporated in it. Democracy is an expensive system and it can be cumbersome but if we are to have democracy it must work properly. We want certain things but we are not prepared to pay for what is necessary. In relation to the total review of the public service and to the various agencies under the control of the State we will have to make up our minds that if we are to have laws we will need people to assist us in preparing the legislation and in enforcing it.

We can pass legislation incorporating massive penalties to deal with directors who behave in a fraudulent fashion but ultimately the public will look to us to see to it that the legislation is implemented. Many public representatives have to agree with constituents that certain matters are covered by the legislation but have to say that because of cutbacks, shortage of staff or of Garda resources the law cannot be implemented. It is pointless to pass this legislation without having the relevant resources to pursue cases of obvious abuse.

In the past an amendment like this would be dropped if the Government of the day decided it was a bit of nonsense. I am asking all Members of the House to use this amendment to debate the real issues involved in all our legislation. We should consider whether we are protecting the democracy that has been handed to us and whether we are going to do anything about making sure resources are there to implement legislation. The evidence in relation to company legislation to date is that we do not have the necessary resources and that neither do we have an indication that the resources will be forthcoming in the immediate future.

If we are going to ask ordinary people doing their business in a proper fashion to spend large sums of money complying with this legislation, we must satisfy them that those who break the law will be brought before the courts. Without disrespect to the fraud squad, for instance, they do not at the moment have personnel in sufficient numbers nor people trained to investigate cases under this legislation. It is grand to have the laws, but will we have the people to implement them? It is fine to say that the courts will decide on various issues, as we do regularly in this legislation, but we have to get the people before the courts before the court can decide. At present we do not have the resources to bring people before the courts to protect the genuine business people working in accordance with the law but who are tarnished with the same brush as those who are blatantly in breach of the law. Can the Minister assure us that before parts of this legislation are passed he will be satisfied that he will have the necessary personnel in his Department, particularly in a specialised area like company law, to do this sort of work?

We spent many hours in the select committee working on this legislation and I now take the opportunity to compliment the officials who were beside whatever Minister was present throughout that debate. We were conscious that at times, in frustration, Members of the Opposition may have said things they should not have said at those times in that they could reflect on the two gentlemen who continued to be present, but we recognised that they were operating in intolerable circumstances. If my colleague, Deputy Rabbitte, was their trade union representative things might have been different. I doubt very much if anybody else would have put up with the abuse these people had to put up with without any prospect of change in the future. I use this opportunity to say that, and also to say that we should not have a Director of Consumer Affairs if he will not have the resources to do the things that are necessary to comply with the law.

I and others will continue to call for further changes through legislation under the control of the Minister for Industry and Commerce in the interests of the public. Those changes, if made, will give more work to the office of the Director of Consumer Affairs. This may appear to be an insignificant amendment to some but it is the kernel of the whole Bill. We want an assurance that before the Bill is passed we will be able to enforce its provisions.

Minister for Industry and Commerce (Mr. O'Malley)

While the Deputy's motives in tabling this amendment are very laudable, I cannot accept it for a number of reasons which I will instance now. To begin with, who is to say what "sufficient resources" are for the purposes outlined in the amendment?

Mr. S. Barrett

Commonsense.

Mr. O'Malley

I or my successor could easily make a statement to the effect that sufficient resources will be devoted to enforcement, but what benefit will that be to anyone? Who will prove the Minister right or wrong in his statement? To be frank, a Minister will not say that the resources to be made available for a specific area will not be sufficient, regardless of whether they will be sufficient.

The second reason I oppose the amendment arises from its reference to "the relevant State agencies". While there is no such thing as a "State agency" we normally refer to State companies or boards as agencies but, of course, none of these is really relevant to this Bill. What other "State agencies" could the amendment be referring to — in other words, what aspects of the State's machinery will have an enforcement role under the Bill? The posibilities are very wide. To begin with there is my Department, of course, and the Companies Registration Office. However, there is also the Director of Public Prosecutions, the Chief State Solicitor and the Department of Justice, not to mention the Garda Síochána, the Judiciary and court officials, the Central Bank and perhaps several others as well. Frankly, I think it is unrealistic and indeed unreasonable to expect any Minister to make a statement as sweeping in width as the amendment implies.

The amendment also fails to take into account the fact that, under some Parts of the Bill, the State has a relatively minor role from the point of view of enforcement, or no role at all. For example, under Part V, Insider Dealing, it will be the Stock Exchange that has the major role and, of course, that is not a State agency. To take another example, under Part X the Minister may require a recognised accountancy body to enforce a code of standards for their members. Yet, the amendment would prohibit the Minister from bringing the provisions into effect since he would not be in a position to say that "the relevant State agencies have sufficient resources to enforce the provisions" involved.

An even more fundamental problem arises with the concept of enforcement itself. I have concentrated in my remarks so far only on the enforcement of provisions the breach of which is a criminal offence, but what of the host of provisions in the Bill which are totally civil in character? Take one provision totally at random — civil liability for fraudulent or reckless trading under section 136. What enforcement role does the State have there? The answer is none. However, if this amendment were passed, section 136 and many many more like it, simply could not be brought into effect.

Mr. J. Bruton

That is not true.

Mr. O'Malley

I think this would be an absurd position to leave ourselves in.

Having said all this, and recording my opposition to the amendment, let me make a few general remarks to the House. First of all, it is, of course, certainly true that we are in the Bill creating many new offences of various linds. My general attitude is, however, that the law is there to be obeyed and we should expect the general population, including the general population of companies, to obey it — not for fear of being punished but because the Oireachtas has decided that the common good requires it. Thus, I would not expect the State to have to employ a cast of thousands to look over the shoulders of every company in the country to ensure that they are complying with this requirement or that requirement. At the same time, the penalties set out in the Bill are intended to act as a deterrent to contraventions and I, for one, will not hesitate to prosecute in proper circumstances. I am happy to give that assurance here and now.

The second general comment I want to make is that wherever possible in the Bill I have tried to provide civil remedies for parties who may be aggrieved by wrongdoing, including potential personal liability for a company's debts. This is in keeping with the philosophy that company law should, wherever possible, be self-enforcing to the greatest extent possible. In other words, the ideal would be to provide as many mechanisms as possible to allow the business community, in its widest sense, to sort out its own problems with a minimum of State interference.

Returning to the question of State enforcement of the Bill's provisions, however, no one can be in any doubt about my policy, intentions or bona fides in this area. I am extremely anxious — indeed some would say obsessed — with getting this Bill on the Statute Book and I am determined to see that it works. Let no one be in any doubt about that.

I suppose I should say at this stage in general terms, because it is the first amendment, that it is my anxiety and I am sure the anxiety of thousands of people that this Bill would be enacted at the earliest possible moment. I certainly hope we do not go into the Christmas recess without this final Stage having gone through this House and my being able to go to the Seanad with the amendments and asking it to accept them.

Some recent events to which reference has been made by the two Deputies who have spoken have highlighted the necessity for the speedy passage of this Bill. If there are imperfections in it — unquestionably in a Bill a long as this, 284 sections, there must be some imperfections — it is better that the Bill as a whole is enacted, even if it has some imperfections and falls short of the ideal in some respects, rather than let it go into what will be shortly its fifth year in the Oireachtas. I hope we can avoid that situation.

Without wishing to cause the debate to be too quick or too short or without wishing to cause amendments not to be fully debated, I hope that Members, especially the handful who will be involved, will share with me and many people anxiety to see this Bill enacted. For every day that it is not enacted there are all kinds of things going on that are not a breach of the law as it is at present. They should not be going on — I think we are all agreed on that — and we should make the law such that they can no longer go on. If we have to amend this Bill next year we will amend it but I ask the House to let it be enacted by the end of this year and we will make the amendments next year.

Mr. Rabbitte

I have a good deal of sympathy with the substance of this amendment for the reason that it is manifestly the case that we are grossly ineffectual in prosecuting white collar crime. It is also obvious that what is intended by the term "State agencies" in the amendment are completely under-resourced. For example, the origins of a great many actions which may now be contemplated under the new Bill spring from one's ability to establish certain information from the Companies Office. I raised this point with the Minister during the course of the special committee's deliberations and my memory is that he assured me things had certainly improved in the Companies Office. I am equally assured by trade union colleagues who have occasion to resort on a frequent basis to the Companies Office that some improvements have been put in train but the day is still a long way off when the kind of up-to-date information which is essential if, for example, the new measure is to function as intended will be available, that records are hopelessly out-of-date and simple and essential information is not available to anybody pursuing it.

Secondly, similar remarks may be made about the Fraud Squad. Without in any way seeking to reflect on the members of the Fraud Squad, there seem to be definite questions about their technical capacity and their general expertise to deal with some of the matters we have dealt with on Committee Stage of this Bill.

However, having said all that I must say I agree with the Minister that the absolute priority must be to enact this legislation as speedily as possible. Anything that might be construed as in any way delaying the bringing into effect of the provisions of Parts of the Bill would be regrettable. It seems the very vagueness the Minister spoke about in terms of adequate resources works to his benefit in the sense that he is free to make a judgment on that at any given time.

The overriding consideration must be that we have to admit that company law is hopelessly out of date. I doubt if there are many Members of this House who have the required expertise which would enable them to say that this Bill is perfect or is deficient in a major way; it is extraordinarily complex legislation and one requires multi-disciplinary skills which very few of us have before one can comment on it authoritatively. But what we do know is that the law is hopelessly out of date and as a former trade union official I have very frequently been left to pick up the pieces in situations where abuses and malpractices that ought to be illegal are not illegal at present and the trade union movement has been left grasping at straws sending deputations to the Minister and going through the motions in circumstances where there has been evident wrongdoing but it is not possible under the law as it stands to bring the wrongdoers to justice. Therefore this Bill is a major advance on that situation. It creates new offences and takes many of the practices that both Deputy Bell and I have personal experience of as trade union negotiators and makes them henceforth illegal. There may indeed be a couple of other areas that could be added to that list but the fact remains that major progress is being made in this Bill, that some of the outrageous conduct in the corporate area will now be made amenable and that owners and officers of companies will be or rather can be made accountable. I think that is major progress.

Instances have been given already of the kind of thing we all have in mind. A number of other outstanding examples could be given in support of the necessity for this legislation being enacted as speedily as possible——

An Leas-Cheann Comhairle

I ask the Deputy to bear with me but on Report Stage we do as far as possible confine ourselves to the amendment and obviously to the section to which it refers. Maybe in the interests of the expedition which the Deputy would wish for we might make more efficient headway if we confined discussion to the amendment and the section.

Mr. Rabbitte

Having regard to the restricted nature of the signal at present I did not think I was likely to sway much of the opinion watching this but if things have reached that stage in Fine Gael——

Amendment No. 1, please.

Mr. Rabbitte

I accept your strictures, a Leas-Cheann Comhairle, not to give the examples I intended giving but let me say this that in the electronic era the entire business we are dealing with is so complex, as evidenced for example, and I am not here imputing any illegal doing, by the case of the Goodman affair, that to follow the labyrinthine transactions requires a great deal of the resources which are available at present.

Has the Minister any view on the latest submission from the accountancy bodies on the bringing into operation of this Bill? Their view is that, if possible, the totality of the Bill should be brought into operation at the same time or at the very minimum the totality of a particular Part of the Bill should be brought into force at the one time rather than in a disjointed fashion having regard to the fact that many sections of the Bill interact with others.

I agree that the amendment properly highlights our inability to adequately monitor, enforce and police the new powers under the Bill, and I have given two examples of this. However, it is imperative that the Bill be enacted as speedily as possible and for that reason I will not be voting for the amendment.

Mr. Bell

First, lest my badge be misunderstood, it is an ONE badge — the Organisation of National Ex-servicemen. It is green, white and yellow. I do not know whether that has any significance.

I have some reservations about this amendment. I share the Minister's view that we should be moving speedily through this Bill because possibly more hours have been spent on it already than any other legislation. I should say that the credit for most of the amendments which were passed on Committee Stage should go to Deputy Bruton who made the major contribution on Committee Stage. By putting down amendments at this stage for the sake of it will only slow up the legislation and ensure that it will not be passed in this session and that it might never see the Statute Book. If this amendment is accepted it would mean that the Department would actually have to prove they had the resources in every section to deal with a specific situation. If that were to be incorporated into all legislation which is put before the Houses of the Oireachtas we might have no Social Welfare Bill, no local government Bill and, indeed, we might have very little legislation because of the fact that voluntary redundancy and early retirement schemes have been introduced into the public service. As a result of that and of the public service embargo it is well known that every section is under-staffed not alone in the Civil Service — the Departments of State — but in the semi-State sector. That has been corrected here and there but in virtually every section of the public service if that type of amendment were in operation we would get nothing done.

The main purpose should be to get this Bill enacted. The list of amendments which were passed on Committee Stage has been circulated. If this amendment is passed it will be virtually impossible to do anything under the terms of the Bill itself. The all-party committee dealt with this type of situation very effectively by employing on an advisory basis professional people who had the necessary qualifications to bring forward preliminary reports, in other words, to do the ground work for the committee. I do not see why that type of approach could not be adopted to deal initially with the type of investigation which might be required under the provisions of the Bill, investigate the collapse of a company or any fraud that may be alleged following the collapse of a company. I do not think the Fraud Squad will have the resources now, or in the immediate future, to be able to deal with this very comprehensive legislation. In my opinion they do not have the necessary staffing but that is a matter for the Minister for Justice and probably a number of other Departments. Equally, there are other agencies who will be involved and who will not have the resources initially to deal with it.

The amendment is very useful from the point of view that it allows us to highlight this situation which was generally known professionally, as well as politically, within the country. I respectfully suggest, that rather than delay further the enactment of this legislation, Deputy Bruton would consider withdrawing the amendment on the basis that we support the principal behind it but the practical enactment of that amendment would make the Bill or, indeed, any other legislation impossible to operate.

Mr. O'Dea

I agree with the Opposition speakers who have said there is not much point in having legislation on the Statute Book unless there are sufficient resources to ensure that that legislation is enforced. On balance I think the amendment is unnecessary and I would be opposed to it. Reference has been made to the Committee Stage of the Bill which was debated by a special committee of which I had the honour to be a member. Generally speaking, that committee worked well together. There were, of course, as is inevitable in any multi-party committee, differences of opinion, heated exchanges, allegations and accusations from time to time but despite that there was one thing which nobody on that committee from any side of the House sought to allege — nobody sought to allege that the present Minister is less than 100 per cent determined to have this legislation on the Statute Book and to see it enforced effectively. The Minister must be complimented on that. He has brought this legislation further than any of the three, four or five Ministers who have had the legislation on their desk. If we need further evidence of his determination in this regard we find it in the fact that the Report Stage of this Bill is the first item we have to deal with on the day the Dáil resumes.

Many of the changes mentioned by Deputy Rabbitte and Deputy Bell — welcome though they were — are changes which give people the right to take civil actions against certain other people arising out of the liquidation or collapse of companies. We all know that one of the main defects in Irish company law as it exists at present arises from the fact that people can set up companies, can incur debts and can walk away from their liabilities without any fear of being pursued. The Bill makes radical changes in that regard. It allows people who are blame-worthy to some extent not only to be prosecuted but to be sued civilly. The under-funding or otherwise of State agencies is totally irrelevant to that. It is a welcome and a necessary change and one that has been welcomed right across the board and right across the political spectrum.

The question of white collar crime — which Deputy Rabbitte and Deputy Bruton touched on — is a major problem that has to be taken on as a matter of urgency. As has been mentioned, it will need a specialised squad within the Garda and it will also need several other legal changes, such as changes in the laws of evidence. I am availing of this opportunity to impress upon the Government that this is an area that needs to be tackled urgently.

If the amendment is accepted it will impose on the Minister for Industry and Commerce — whoever that Minister may be — an obligation to come before the House and make a statement that he now had adequate resources to ensure that whatever part of the Bill he was enacting would be enforceable. As the Minister has said, that is an entirely subjective matter. A Minister can come to the House and state, with the utmost good faith, that he now has adequate resources and subsequently, for one reason or another, than may not turn out to be the case. No Minister wants to be caught in that position. Because of that I fear if this amendment is written into the Bill it would delay unduly the implementation of certain necessary reforms which everybody wants to see on the Statute Book. Writing in an amendment such as this into the legislation is unprecedented. That is not necessarily a fatal argument against it, but because of the context in which the Bill was introduced it is inappropriate in this case.

I have every confidence in the bona fides of the Minister in this regard. I understand what the Opposition are saying. I have some sympathy with their case but ultimately the amendment in this context is inappropriate.

Mr. J. Bruton

This amendment is designed to require the Minister to take formal responsibility in his own name for a statement that there are adequate resources available to enforce the legislation. There is common cause in this House that there is no point in enacting legislation if it is not enforced. Both Deputy Bell and Deputy Rabbitte have said that, as of this moment, the resources to enforce this legislation are not adequate. I am very surprised to hear two former trade union officials, Deputies Rabbitte and Bell, pass an opportunity of putting pressure on a Minister to ensure the adequacy of staffing. If this amendment is passed it places a lever in the hands of the trade unions representing officials in the Fraud Squad, the Companies Registration Office, the staff of the offices of the DPP and the Chief State Solicitor. All of them would be given by this amendment a lever whereby they would be able to say to the Minister that he must take political responsibility, before bringing the legislation into effect, to ensure that they have adequate staff to enforce it. I am surprised that two Deputies, who have such renowned practical experience — and I use those words advisedly and justly — of the problem of understaffing in the public service and of the phenomenon of passing empty legislation which cannot be enforced due to lack of staff, should fail to take an opportunity, not of stopping the legislation from being brought in since clearly the Minister, if he is determined, will give the certificate that there are adequate staff available, but of making him take political responsibility.

Mr. Bell

He must do that anyway.

Mr. J. Bruton

That is not so. The Minister for Industry and Commerce has no political responsibility currently for the DPP's Office or the Chief State Solicitor's office, for example. This amendment would require him before bringing this legislation into effect to get an assurance from other Ministers who are responsible for staffing the bodies charged with enforcing the legislation that the staff will be there to enforce it. It would give the Minister a lever to ensure that all resources were marshalled where required within the Governmental system to ensure that this legislation is effective.

The Minister asked who is to say whether the resources are adequate. The answer is that the Minister is to say the resources are adequate. How is he to know? By exercising his political judgment — that is why he is a Minister. He has been conferred with an office of responsibility requiring judgment. His judgment, and his political reputation, will be put on the line to ensure there are adeqate resources to enforce this legislation. I see nothing wrong with making the Minister take political responsibility for the adequacy of enforcement. That is why I am surprised that this amendment has not received more support from other Opposition parties. In a year or two we will hear from those parties that this or that fraud was not investigated adequately or that this or that prosecution was not being taken under this legislation. If they come forward with those arguments I will remind them that they had the opportunity of placing firm responsibility on the Minister to ensure before bringing the legislation into effect that the staff were there to obviate the possibility of any such failures.

The Minister advanced a number of arguments against this proposal. He referred to the fact that other bodies which are not State agencies are responsible for the enforcement of some of the legislation. That is not a problem. The Minister's certificate only relates to the adequacy of resources in State agencies. The Minister is not required by any possible construction of this amendment to make a certificate about the adequacy of arrangements for enforcement in those bodies which are not State agencies. The amendment relates only to State agencies. The Minister's argument is spurious.

The Minister referred to the fact that part of this legislation relates to civil proceedings that would have to be taken by individuals to enforce rights under the legislation. In so far as civil proceedings were being financed by private individuals the Minister would not be required under the amendment to make any certificate as to the adequacy of personal resources of any person who might at some stage take proceedings under this legislation. Such persons are not State agencies. The amendment does not refer to private individuals. There is no question of the Minister being required under this amendment to make any certificate in regard to civil proceedings taken by private individuals with their own resources. However, there is one area in which the Minister might have to make a certificate before the legislation could come into force. That is in regard to the availability of civil legal aid to private individuals who may have been wronged by the activities of a particular company and may as a result be impoverished or bankrupt, unable to afford to take civil actions themselves.

This House and this State stand condemned by the European Court of Human Rights for the inadequacy of our civil legal aid provisions. This Bill, in regard to civil actions to enforce its provisions, is a rich man's Bill. People without financial resources will not have the means to take advantage of any of the remedies contained in the Bill because we do not have civil legal aid on an adequate scale. The Civil Legal Aid Board are a State agency within the meaning of this amendment. The House is being given an opportunity in the amendment to say to the Minister that he must ensure before bringing the legislation into effect that adequate arrangements exist so that poor people who do not have sufficient resources of their own to finance expensive legal proceedings can get remedies under this Bill by virtue of having an adequate system of civil legal aid. This is something we have already been told in this House by the European Court in the Airey case. This amendment would put further pressure on the Government to bring in an adequate system of civil legal aid so that the civil remedies would be available not just to the rich but also to the poor who cannot afford the services of a lawyer. I would hope that on those arguments the amendment would be supported.

Deputy O'Dea spoke rightly, and the Minister spoke self-praisingly, of the Minister's commitment to this legislation. I have not questioned it but I do question the Minister's rather occasional involvement with this legislation and his tendency when he involved himself on Committee Stage to come in, preach a sermon about the delays of other Members in dealing with the legislation and then leave. That is a matter for himself.

This amendment is crucially important because there is a disease in this body politic of enacting legislation which we do not enforce. This amendment will not delay the legislation since I have no doubt the Minister will give the certificate, in view of his self-proclaimed commitment. The amendment would clearly place political responsibility on the Minister to ensure that resources exist adequately to enforce the legislation.

Amendment put.

The Dáil divided: Tá, 39; Níl, 63.

Tá

Ahearn, Therese.
Barnes, Monica.
Barrett, Seán.
Belton, Louis J.
Boylan, Andrew.
Bradford, Paul.
Browne, John (Carlow-Kilkenny).
Bruton, John.
Carey, Donal.
Connaughton, Paul.
Connor, John.
Creed, Michael.
Deasy, Austin.
Dukes, Alan.
Durkan, Bernard.
Enright, Thomas W.
Farrelly, John V.
Fennell, Nuala.
Finucane, Michael.
FitzGerald, Garret.
Flaherty, Mary.
Flanagan, Charles.
Harte, Paddy.
Higgins, Jim.
Hogan, Philip.
Kenny, Enda.
McCormack, Pádraic.
McGahon, Brendan.
McGinley, Dinny.
McGrath, Paul.
Mitchell, Gay.
Mitchell, Jim.
O'Brien, Fergus.
O'Keeffe, Jim.
Owen, Nora.
Reynolds, Gerry.
Shatter, Alan.
Timmins, Godfrey.
Yates, Ivan.

Níl

Ahern, Dermot.
Ahern, Michael.
Aylward, Liam.
Brady, Vincent.
Brennan, Mattie.
Brennan, Séamus.
Briscoe, Ben.
Browne, John (Wexford).
Burke, Raphael P.
Calleary, Seán.
Callely, Ivor.
Clohessy, Peadar.
Connolly, Ger. Cowen, Brian.
Cullimore, Séamus.
Daly, Brendan.
Davern, Noel.
Dempsey, Noel.
Dennehy, John.
Ellis, John.
Fahey, Frank.
Fitzgerald, Liam Joseph.
Fitzpatrick, Dermot.
Flood, Chris.
Flynn, Pádraig.
Gallagher, Pat the Cope.
Harney, Mary.
Haughey, Charles J.
Hillery, Brian.
Hilliard, Colm.
Jacob, Joe.
Kelly, Laurence.
Kenneally, Brendan.
Kirk, Séamus.
Kitt, Michael P.
Kitt, Tom.
Lawlor, Liam.
Lyons, Denis.
Martin, Micheál.
McCreevy, Charlie.
McDaid, Jim.
McEllistrim, Tom.
Morley, P.J.
Nolan, M.J.
Noonan, Michael J. (Limerick West).
O'Connell, John.
O'Dea, Willie.
O'Donoghue, John.
O'Keeffe, Ned.
O'Kennedy, Michael.
O'Leary, John.
O'Malley, Desmond J.
O'Toole, Martin Joe.
Power, Seán.
Quill, Máirín.
Reynolds, Albert.
Roche, Dick.
Stafford, John.
Treacy, Noel.
Tunney, Jim.
Wallace, Dan.
Woods, Michael.
Wyse, Pearse.

Tellers: Tá, Deputies J. Higgins and Boylan: Níl, Deputies V. Brady and Clohessy.

Amendment declared lost.

Mr. O'Malley

I move amendment No. 2:

In page 15, lines 9 to 13, and substitute the following:

"(2) (a) A recognised stock exchange for the purposes of any provision of the Companies Acts is an exchange prescribed by the Minister for the purposes of that section.

(b) The definition of ‘recognised stock exchange' in paragraph (a) is in substitution for the definition in section 2 (1) of the Principal Act."

The reason for this amendment is somewhat technical. In section 2 of the 1963 Act what is called a recognised stock exchange is defined as a "stock exchange prescribed by the Minister for the purposes of each provision in which those words appear". This meant that every time a Companies Bill containing references to a stock exchange was enacted, including the 1963 Act itself, the Minister had to make a new order prescribing which exchanges were recognised stock exchanges for the purpose of those provisions, and such orders were made in 1964 and 1975.

Under section 3 (2) of the present Bill, once the Minister prescribed the stock exchange it would no longer be necessary for him to make a further specific recognition order each time a new Companies Act containing a reference to a stock exchange was enacted. When this section was originally drafted, however, the only existing exchange in the State was the Irish Stock Exchange. Since then, of course, we have seen the establishment of the Irish Futures and Options Exchange (IFOE) which is entirely separate from the Irish Stock Exchange and other exchanges may emerge in future. In these circumstances I am satisfied that it will be necessary to retain the type of flexibility which the Minister had under the Principal Act so that different exchanges can be recognised for different provisions, and these proposed amendments will restore such flexibility.

The second subsection will ensure that nothing done up to now by a recognised stock exchange can be called into question.

Mr. J. Bruton

I understand that the actual recognition of a stock exchange is a matter for the Minister for Finance, not the Minister for Industry and Commerce, and that what we are talking about here is the recognition of that stock exchange secondarily, so to speak, for the purpose of the companies legislation. It is not the principal act of recognition, is that correct?

Mr. O'Malley

No, that is not correct. The only recognising authority for the stock exchange is the Minister for Industry and Commerce.

Mr. J. Bruton

I find it very difficult to do business with Deputy O'Malley because he becomes very arrogant in his approach to people who happen to serve on the Opposition. It is totally contrary to the image he tried to portray of a new open government when he was leading the Progressive Democrats and touring the country telling us that we were going to have a new style of politics. Deputy O'Malley is well aware of the fact that this Bill finished last July and that he, and his Department, had three-and-a-half months to table amendments to this Bill but he chose to table amendments on Friday last. He may say he has no resources available to him but he should see what we have. I find his arrogance quite disturbing, to say the least of it. It is nothing short of arrogance. We get lectures from him on a regular basis. One has only to look at the record of the Committee Stage debate on the Bill to see that the same Minister only appeared twice or three times and sent in his Minister of State to deal with most other amendments. The sooner he gives up this personal abuse of members of the Opposition the better for everybody concerned. It did not take him too long to become as arrogant as he used be once he got back into the bed he came from.

Mr. O'Malley

I do not think this type of debate is helpful to the business of the House.

Acting Chairman

I would ask Deputy Barrett to speak to the amendment.

Mr. S. Barrett

This amendment is quite simple. Deputy O'Malley should not need his officials to hold him by the hand on each occasion. All he has to do is read. It is quite simple. It provides that if the Minister wants to take this power to make regulations in relation to any matter referred to in this Act, copies of such regulations should be laid before each House of the Oireachtas and should not come into effect until a resolution approving them has been passed by each House.

I do not see what sort of advice the Minister needs to get from his Department on that or why it matters what time this amendment was put down. It simply asks that the Minister respect the Houses of the Oireachtas, whose Members were elected, when he is taking this extraordinary power to make regulations on anything connected with this legislation. I do not think a politician needs a lot of advice to understand the reasons behind that. It is quite simple. There is no basic objection to the Minister having this power but if he is taking such wide powers he should come before both Houses with his regulations to have them approved. I see nothing extraordinary about that and I ask my colleagues to support this amendment. We are elected representatives and if we are to stand over regulations made on our behalf by the Minister we should at least have the opportunity to look at them and, if necessary, debate them. If there is nothing extraordinary about any of the regulations then the wisdom of the House will prevail and they will pass through, on the nod if necessary. There may, however, be occasions when the House may wish to debate some of the regulations that the Minister will be making in relation to this legislation. I would therefore appeal to our colleagues on this side of the House to support the amendment in the names of Deputy John Bruton and myself.

Mr. Rabbitte

I am sorry I missed the exchange during the few minutes I was absent. I do not know if it was relevant. I am entirely in sympathy with the amendment in the names of Deputies Barrett and J. Bruton. It is the kind of amendment with which you will be familiar and which my party put down regularly on major legislation. Otherwise we would be handing over entirely to the Minister concerned the power to bring in regulations that are of major moment without an opportunity being given to either House to comment on them. I am prepared to accept the bona fides of the amendment in the terms expressed. I do not see it as intending to slow down the making of regulations in respect of this legislation; it is merely that the House would have the opportunity to consider whatever regulation the Minister wishes to introduce.

Let us recall that in the context of this enormous piece of legislation some regulations that can be contemplated under the Bill are very wide in their scope and very far-reaching in their effect. It is eminently reasonable to ask that they ought to be placed before the House and that the Members would have an opportunity to comment, not for any purpose of delaying the implementation or bringing into effect of any particular aspect of the Bill but that we would have the opportunity as elected Members of this House to comment on it. I certainly will be supporting the Fine Gael amendment.

Mr. Bell

Here again I do not disagree with the sentiments expressed in the resolution but there is a number of matters that would have to be clarified in relation to the actual wording of the amendment. I agree with my colleague in relation to the desire for this type of mechanism because there are quite a number of regulations being introduced. For example, we do not know what regulations are being introduced under social welfare legislation until somebody comes to our clinic to make a complaint about some new regulation that has been issued to managers in employment exchanges. That is just one example and I could give a number of others. This is a very important Bill and the regulations could have very wide ranging effects on how the legislation is implemented.

I have a certain amount of sympathy with the amendment. What does the Oireachtas do when a regulation is introduced in the House? It is tabled and circulated. Do we have anything other than the right to debate it? Does this amendment mean that every regulation that is enacted under any Bill would have to come before the House for formal debate and formal vote? What concerns me is the practical side, how it could possibly operate. We certainly would not want to be absent from the House for 14 weeks if that mechanism was in place. We would want to spend a fair portion of that 14 weeks discussing the dozens, maybe hundreds of regulations that are issued under various legislation.

While I agree with the sentiments expressed in the amendment and the desirability of having some form of input into the regulations, I do not see what we can do with those regulations under existing procedures other than talk about them. Under this amendment, if passed, we would have the right to put down a formal amendment to the regulations issued under the legislation. I would like a clear definition of that aspect.

Mr. J. Bruton

First, to answer Deputy Bell's point, the amendments proposed by Deputy Barrett are part of a long established form of order making. It requires an affirmative resolution to be introduced to approve the regulation and when that resolution has been passed the regulation comes into effect. There is no possibility of amendments to the regulations under that procedure; it is simply a case of approving or disapproving the regulations.

Mr. Bell

What happens when it is disapproved?

Mr. J. Bruton

The regulation is not made and the Minister has to come back and make a different regulation, or make no regulation at all, but it has to be approved. Deputy Barrett and I are concerned that the Minister could make substantive changes of policy that are not accountable to this House. Requiring that the regulation be approved here means the Minister has to come in and explain what he is doing and why. The other procedure which the Minister is providing in his amendment is simply that a regulation be lodged in the Library and as long as it is there for 21 sitting days, irrespective of whether it is discussed, whether anybody reads it, whether it is good, bad or indifferent, it becomes law. I recognise that if every regulation that is introduced has to be put to the floor of this House there would be some problems but there should be some system of political overseeing of regulations of this kind.

The Fine Gael proposals to amend the procedures of this House suggest that we establish three grand committees — an economic affairs committee, a social affairs committee and a general affairs committee. If there were to be discussions on particular regulations it would probably be more appropriate to do so in the normal course at a committee meeting of that kind without debate here. Pending the establishment of such committees the only way of having any political overseeing of the regulations the Minister might make is through the mechanism proposed by Deputy Barrett.

I believe the Minister could have circulated these amendments earlier. He is wrong to criticise the Opposition for responding. At least we put down this amendment to his amendment within three days of seeing his amendment. He had the entire summer to table his ministerial amendments but did not do so until four days, including a weekend, before the Bill was to be debated in this House. It is not just the Opposition who are inconvenienced by this. All the various professional bodies who were anxious to make submissions about improvements in the legislation were inconvenienced because they could not make their submissions until they saw the Minister's amendments. The position now is that we may well put through bad legislation. It is not as if the Minister did not have time; he had the entire summer to lodge these amendments if he so wished.

It is not a question of my — to use the Minister's term — legendary sensitivity in this matter. All I am sensitive about is giving this House an opportunity to do its job. I know when the Minister is in government he has a perspective of this House which may be different from that when he is in Opposition. When he is in Opposition he can see very clearly the need for parliamentary accountability; when in government however he can see administrative convenience as his guiding principle. If there is a balance to be struck, it is important that it be in favour of accountability. That is the purpose, and would be the consequence, of Deputy Barrett's amendment.

Mr. O'Malley

I am glad the House accepts the amendment I have put down.

Debate adjourned.

Dáil Éireann debate - Wednesday, 24 Oct 1990

Companies (No. 2) Bill, 1987: Report Stage.

Tá

Níl

Acting Chairman

Dáil Éireann debate -
Wednesday, 24 Oct 1990