It is proposed to take Questions Nos. 9 to 17, inclusive, together.
I was informed on 18 August 1990 by the Investment Bank of Ireland in their capacity as financial advisers to Goodman International that the financial situation at Goodman International was so serious that, in the absence of support from the State in a tangible form, it was very likely that the company's operations would have to be liquidated. They explained that, as a result of the Middle East crisis, bankers to the company had threatened to withdraw or refused to renew facilities available to the company; that some banks had advised that they would start proceedings for recovery of loans on the following Monday, and that there were no other available facilities to meet these demands.
The liquidation of Goodman International, particularly approaching the peak beef processing season, would have caused very serious losses in jobs, farm incomes and exports and would have gravely damaged the economy as a whole. I, therefore, immediately summoned a meeting of available relevant Ministers and senior officials to consider these grave implications for workers, farmers and the economy generally and whether there was any action the Government could properly and prudently take to alleviate the situation.
This group evaluated the situation as being one with wider implications for the beef industry than the problems of Goodman International. The high cyclical point being reached in Irish beef production, at a time when market outlets were affected by the Middle East crisis and the fall in consumption due to consumer concerns arising from the BSE problem in the UK, combined to create difficulties for all beef processors and seriously threatened employment in the industry and the incomes of farmers already faced with weak cattle prices.
It was decided that as a matter of principle the State should not provide any financial support or guarantee to Goodman International as had been asked for by the company's financial advisers.
The group also decided that the Government should increase their efforts to persuade the European Commission to improve the various market support measures, including intervention, in order to help overcome these temporary difficulties. Chief among these measures was the operation of the safety net intervention system which the Minister for Agriculture and Food had already negotiated with the Commission whereby, where certain market conditions apply in at least three regions, intervention offers for steer beef are automatically accepted in these regions. This automatic intervention system was applied to Ireland and has been extremely helpful in maintaining demand for cattle in the current difficult trading conditions. It was also noted that the efforts already in train by the Minister for Agriculture and Food to re-open the Iranian and Libyan markets could, if successful, also help in the current trading situation. As the House is aware, the Minister has since visited Iran and Libya and is confident that these markets will be re-opened to our trade.
The group also decided that additional resources be provided in the Department of Agriculture and Food to ensure that no bottlenecks existed in the release of securities in respect of intervention and export sales and that close liaison was maintained with all the firms concerned to ensure that documentation is presented in a way that facilitates the earliest possible release of securities. These measures have been of benefit to all major meat processors.
The group further decided that, in the current acute trading circumstances, it would be prudent and proper for the Government to seek to have the provisions of Part IX of the Companies Bill, which was at Report Stage in the Dáil, having been passed by the Seanad, enacted urgently as a separate piece of legislation in order to provide an alternative to liquidation or receivership in accordance with modern company law throughout the world.
I have outlined the only measures and actions taken by the Government which relate to the difficulties of Goodman International and to the trading difficulties generally in the beef industry. I should also mention that full details of the information available to the Government on the situation pertaining to the Goodman Group were given to the House by the Minister for Industry and Commerce in the special session of 28 August 1990, when the legislation was passed with the support of the entire House.
I believe the House can be satisfied that the enactment of the Companies (Amendment) Act, 1990 has enabled the beef processing jobs and the farm incomes dependent on Goodman International to be maintained pending the evaluation being made by the examiner appointed by the High Court as to whether the enterprise can be restored to viability. The House will also wish to note that two other companies have since applied to the High Court for the appointment of an examiner.
The actions taken by the Government were, therefore, of a nature to be of assistance to firms generally. No special aid or assistance was given to Goodman International. This contrasts with the fact that we have seen in this House very radical and specific State measures and actions taken by the Fine Gael/Labour Government to rescue important private sector companies. I refer to the PMPA and the ICI. I would like to remind the House that my party in Opposition facilitated the speedy passage of the necessary legislation in the national interest, and did not seek to turn those matters into party political issues. I may also point out that there is hardly a Deputy who has not, at some time or another, urged in this House, the Taoiseach, the Minister for Labour, the Minister for Industry and Commerce or other relevant Ministers to intervene, including the provision of financial support, to prevent enterprises in difficulties from closing down with serious loss of jobs and grave consequences for the national and local economies.
In my view the decision of this House to enact the Companies (Amendment) Act, 1990 has helped, temporarily at least, to maintain in operation a company which is of such importance for a large segment of our beef industry. In a report prepared for the Central Review Committee of the Programme for National Recovery, it is made clear that our beef industry is a £1.2 billion a year industry, representing 36 per cent of gross agricultural output, and directly employing nearly 4,500 persons in slaughtering and processing. It is an industry that has been developed in the past 20 years from a situation in which live cattle exports represented nearly half our exports to today's representation of only 11 per cent. Goodman International and other meat processors have been responsible for that profound economic and social transformation. We are uniquely dependent on our beef exports in that we export about 85 per cent of our production compared to about 10 to 15 per cent for the Community as a whole. These figures should bring home to everyone in this House, if they are not already familiar with them, how responsible and concerned we have to be to ensure that the developed state to which this industry has been brought is maintained and expanded.
As regards communications with Commissioner MacSharry in regard to the problems of the beef sector, I have explained that representations were made to him and his officials to ensure that the intervention mechanism already in place was made fully operational. I am glad to say that the Commission has been most helpful and efficient in operating that mechanism. Any other action that Commissioner MacSharry felt it beneficial to take because of his deep concern for the welfare, not just of Irish farmers but of all the farmers of the Community, and his responsibilities in relation to the EC beef sector in particular, was taken by him solely on the basis of the information available to him and his assessment of the critical situation that obtained. But I will say that, if any action of his resulted in Goodman International not being liquidated, he deserves the warmest congratulations from every responsible Deputy in this House and from the workers and farmers whose livelihoods and incomes were bound up with the viability of Goodman International. I would say further that any action taken by the Dutch Minister for Agriculture which was beneficial to our national interests is something for which we should be grateful.
In conclusion, I would commend to the House the statements made by the ICTU, the CII, the IFA and ICMSA expressing their grave concern at the difficulties facing Goodman International and their hope that with the co-operation of the financial institutions involved it would be possible to maintain the close to 2,000 jobs in the Goodman processing plants and to retain the market outlets for the thousands of farmers who supply these plants. The Government agree fully with these views of the social partners.