Vol. 442 No. 6
12 Mr. Rabbitte asked the Minister for Tourism and Trade, in regard to the decision of the Government in October 1993 to provide export credit insurance for exports to Iran, the number of applications for cover received so far; the total value of the contracts in respect of which cover has been sought; the number of applications which have been approved; the value of the contracts in these cases; and if he will make a statement on the matter.
Since the Government's review of the provision of export credit insurance for Iran in October 1993 my Department has received a total of 19 applications for insurance cover. The total value of contracts in respect of which cover was sought significantly exceeded the limit for the market set by the Government. Some of these applications were not proceeded with by the companies concerned while others represent a number of applications from the same firms. Still others did not meet certain technical requirements.
Consequently just seven policies have been issued to date in respect of contracts with a total value of £16 million. The exposure on these contracts was £9.1 million. Four of the contracts involved the sale of beef to Iran. Three have been paid in full while the fourth has only recently been issued.
Our current exposure on this market, including exposure on policies issued prior to the Government's review, is £3.8 million.
I recently had the benefit of a briefing by the Iranian Embassy. Our most recent beef export figures are very healthy from the point of view of this economy. If Iran is considered a good credit risk, why is it necessary for us to persist with export credit insurance for such exports? Am I correct in saying it is because these are not insurable in the market that resort is had to the ECIS? Why is that necessary in the case of Iran? On whom is the benefit conferred? Is it conferred on the exporter rather than the national economy? Seven policies were issued valued at £16 million. Does the Minister consider that the exposure of £9.1 million is very high?
The Deputy is dealing with export credit insurance and the merits or otherwise of it. That can be debated another day. The export credit insurance scheme has operated for a long time. Since 1991 we have covered only political risk for any country. A commercial insurer will not insure against political risk. It will only be taken by export credit insurance agencies. The Government reviewed the position in October. I have stated the number of companies who availed of the scheme. The State might have insured a small amount of beef to Iran in the recent past. There have been problems in the beef industry, with consequential unemployment. The export credit insurance scheme is of benefit to the economy in that it helps to sustain jobs. Similar to insurance companies, my Department makes a commercial decision on the terms and conditions it applies to any particular policy.
I understand that Iran was not off cover but that the scheme was effectively discontinued for a period. Will the Minister outline the main beneficiaries of the scheme since the renewal decision, if one can put it that way, in October 1993?
As the Deputy correctly stated, Iran was never off cover. He should well remember when the Government made its decision to renew the scheme I replied to a matter raised by him on the Adjournment in that regard. As I said at that stage, like my predecessors it is not my policy to name the companies which avail of the export credit insurance scheme; it has never been the policy of anyone with responsibility for this scheme to name the companies which avail of it.
I do not wish to pursue the matter unduly as I do not believe an issue arises in the case of Iran, but will the Minister agree that more than one of his predecessors got into trouble for not giving answers in the House about the beneficiaries of the export credit insurance scheme? There does not seem to be an obvious commercial implication as to why we should not be told who avails of the export credit insurance scheme, which ought to be a transparent matter.
One can apply the same general rule to all Departments. The Department acts as an insurance underwriter in the case of the export credit insurance scheme. It is not the policy of any insurance underwriting company in Ireland or the United Kingdom to give details of the companies which have policies with them, and the Department should be able to guarantee the same degree of confidentiality to its clients. The names of the companies availing of the export credit insurance scheme is sensitive commercial information. As I am sure the Deputy is aware, some companies do not avail of this scheme; they are able to make their own commercial decisions. If companies knew that their competitors were availing of the export credit insurance scheme, which entails a cost, they would be in a better position to make a bid at that stage. It is not my policy to give the names of the companies availing of the scheme.
