Vol. 445 No. 6
53 Mr. Rabbitte asked the Minister for Tourism and Trade the changes, if any, he intends to make in regard to the operation of the export credit insurance scheme arising from the report of the Tribunal of Inquiry into the Beef Processing Industry; if he will give details of the other recommendations of the report that fall to his Department for implementation; if he will give the proposed timescale for these; and if he will make a statement on the matter. [691/94]
62 Mr. O'Malley asked the Minister for Tourism and Trade the proposals, if any, he has to introduce any further changes in the export credit insurance scheme in addition to those implemented in 1991 arising out of the publication of the Hamilton report; and if he will make a statement on the matter. [702/94]
357 Mr. Deenihan asked the Minister for Tourism and Trade if he intends to put in place Justice Hamiliton's recommendations on export credit insurance in view of the difficulties being experienced by exporters in obtaining insurance cover. [862/94]
I propose to take Questions Nos. 53, 62 and 357 together.
The Government has committed itself to the full implementation of all the recommendations of the tribunal of inquiry into the beef industry. A substantial restructuring of the export credit insurance scheme took place in 1991. Since then the State scheme has provided cover directly — without the use of an agent — only for short-term political risks and medium-term risks. Under the revised scheme, the Department's practices correspond with the recommendations of the beef tribunal in relation to applications for cover.
It is my intention in all future cases to seek the consent of the Minister for Finance where cover in excess of £3 million is proposed, as recommended by the tribunal. No other changes in the operation of the scheme, or otherwise, fall for implementation by me arising from the tribunal recommendations.
As I understand it, the Minister is saying that the only recommendation of the tribunal he proposes to implement is the last one concerning a ceiling of £3 million, which will be transferred to the Minister for Finance. How does the Minister reconcile that with his commitment and that of the Government to implement all the recommendations on this aspect of Mr. Justice Hamilton's report? Where does he stand on the question of the requirement stipulated by Mr. Justice Hamilton concerning the sourcing of the product? Can I take it he would agree that a Minister who is negligent enough to insure a product sourced outside this jurisdiction would not be worthy to hold office? What does the Minister propose to do about that?
As I tried to explain in my reply and on other occasions when this question was asked, a substantive restructuring of the export credit insurance scheme took place in November and December 1991 under the then Minister for Industry and Commerce, Deputy O'Malley. The majority of the matters alluded to in Mr. Justice Hamilton's report have been covered by changes which took place at that time and under which I have operated. Regarding the Deputy's specific question — for fear he might be confused about the Minister for Finance — Mr. Justice Hamilton's second recommendation states that amounts in excess of £3 million should be approved by the Minister only in consultation and with the specific consent of the Minister for Finance. We will ensure that recommendation is carried out.
My question referred to the sourcing of the product.
The matter of sourcing has become a standard question put to applicants for export credit since November 1991. The Deputy will recall this happening late last year when we dealt with the question of export credit to Iran in respect of beef exports. All other matters referred to in Mr. Justice Hamilton's report have been overtaken by events. Since November 1991 the State is in the business of insuring only against political risks. I have operated under the changes made in November 1991, but we will take into account the second recommendation of Mr. Justice Hamilton, namely, that the consent of the Minister for Finance should be sought for amounts in excess of £3 million.
Is the Minister assuring the House that the position which obtained whereby the Taoiseach, then Minister for Industry and Commerce, put at risk more than £100 million of taxpayers' money to insure a product that was not sourced within the jurisdiction will not be repeated under the restructuring he states took place when Deputy O'Malley was Minister for Industry and Commerce? In regard to Mr. Justice Hamilton's recommendation concerning the assessment of risk, are there new procedures in place to assess the risk?
Yes.
Will the simple courteous requirement stipulated by Mr. Justice Hamilton, that an unsuccessful applicant be advised that he was unsuccessful and the reason, be adhered to in the future?
That is the case and there is no mystery about it. When the changes were made in 1991 a press release was issued in which all those matters were alluded to. Since then countries have been divided into categories and limits set in respect of the amount of risk by an advisory group comprising officials of various Departments. Apart from the £3 million clause to which I referred, all the other matters have been taken into account and form part of the way the export credit insurance scheme has operated while I have been Minister for Tourism and Trade. Deputy Rabbitte may have heard the recent criticism that the manner in which the Department operates the scheme is too restrictive, but changes have taken place and account has been taken of all the matters raised by the Deputy.
Surely the Minister will agree that people will be astonished there are not to be any published changes to the regulations covering the scheme since Mr. Justice Hamilton's report and that the only changes are those put into effect when Deputy O'Malley was Minister, before Mr. Justice Hamilton concluded his deliberations. It is most unsatisfactory if the Minister is satisfied that there should not be published changes to the regulations and I will have to return to the matter on another occasion.
I will deal with the matter if the Deputy raises it again. Page 276 sets out Mr. Justice Hamilton's recommendations on export credit insurance. They have been taken into account and are in place in the Department. Events have overtaken the matters to which Deputy Molloy referred. Mr. Justice Hamilton's second recommendation covering risks in excess of £3 million had not been taken into account and we have now taken it on board. Deputy Molloy was not the Minister responsible for the Department when those changes were made but if he checks with his colleague he will learn that, with the exception of recommendation No. 2 which has now been dealt with, the other recommendations had been accepted before Mr. Justice Hamilton's report of July 1994.
Is the Minister aware that the United Kingdom Government actively supports exporters who take up export credit insurance and not because we have made such a mess of our scheme it is almost invisible to a large number of exporters? Some feel that scheme is inaccessible and we are losing vital markets and jobs because we cannot compete with our British neighbours.
I made that point in reply to Deputy Rabbitte. An article by Mr. Colm McDonnell, chief executive of the Irish Exporters Association carries the heading, "Export Credit Insurance — Beware of Excessive Zeal". He says that the United Kingdom has gone on the attack in respect of export credit insurance and intends to increase its exposure to £3.2 billion by 1995. Mr. McDonnell says that we are too restrictive in regard to export credit insurance. I do not wish to make a political point on this matter, but Members on this side were abused from all sides——
Because they abused it.
——regarding export credit insurance. It is a matter of debate whether the State should be responsible for export credit insurance. The British Government is using it as an aggressive political tool to sell UK exports abroad and it has a very high exposure at present. During my term as Minister for Tourism and Trade and for some time earlier we operated a selective and restrictive policy and that has been the wish of the majority of Members opposite, but Ministers have been abused for such decisions. We cannot have it both ways.
Nobody is asking for that.
I am not asking for it.
It is contradictory to make the case for liberal export credit insurance policies like those in the United Kingdom. For some time our approach has been restrictive and the accusation has been made that it is extremely difficult to secure export credit insurance from my Department. A balance must be struck between protecting the taxpayer and having export credit insurance policies in place that allow people to export goods. Striving to achieve that balance has bedevilled previous Ministers.
There is a slight pagination problem. The Minister does not appear to be reading from the same hymn sheet that I have. He has read from the one on which the Taoiseach based his premature statement. Page 235 of the more recent edition of the beef tribunal report deals with the recommendations. The Minister is working from the report issued at midnight on 29 July.
I merely read from that page.
The Minister decried the restrictions in the recent operation of the export credit insurance scheme. Does he not agree that those restrictions stem from the fact that the scheme was abused in the past, when the entire portfolio was used up for exporting one product to one country? Will the Minister indicate his view on Mr. Justice Hamilton's first recommendation conerning whether the application should be made directly to the Insurance Corporation of Ireland or to the Department, having regard to the fact that those exporters who applied to the then Minister for Industry and Commerce managed to get cover and those who applied to the ICI did not? Will he indicate his attitude to involving the Minister for Agriculture, Food and Forestry in the matter of dairy and food products, having regard to the fact that when the then Minister, Deputy Burke, took over that portfolio he sought to put in place that matter as it had not been provided for until then? The then Minister for Agriculture did not take responsibility for the matter and the then Minister for Industry and Commerce seemed happy to keep it that way. What does the Minister purport to do on that matter? Is a breakdown still not available of how the portfolio is allocated in respect of products, countries and so on?
I have not decried the absence of export credit insurance for all markets. I explained the difficulty which arises from adopting a liberal approach, which creates difficulties and in the long term is an expense on taxpayers, while encouraging exports. Mr. Colm McDonnell, chief executive of the Irish Exporters Association, makes the point that a more liberal scheme should be adopted and as the Minister responsible I am seeking to strike a balance between the liberal expansion of the scheme and the restrictions in place now. On Deputy Rabbitte's point in respect of Mr. Justice Hamilton's first recommendation, as a result of the Government's decision of November 1991 applications for political risk cover are now made only to the Department of Tourism and Trade. We are no longer in the business of short term commercial risk insurance and, consequently, a differentiation does not apply.
It is now only a decision of the Minister.
That matter is set down in the guidelines issued at that time. An independent consultant's report was commissioned and it brought forward recommendations which were implemented en bloc at that time.
That is not what Mr. Justice Hamilton says.
Those recommendations were taken into account at that time. The Insurance Corporation of Ireland does not act as agent any more on behalf of the Minister. We deal with political risk insurance only, and we deal with it directly. Therefore that recommendation no longer applies.
How does the Minister reconcile that——
I am calling Deputy Deenihan for a final question.
The Ceann Comhairle said clearly, when the Taoiseach refused to take questions on this matter, that we would have an opportunity to discuss it with the relevant Ministers.
The Deputy knows that the Chair has discretion with regard to the duration of questions, and there is quite a number of questions. I will allow the Deputy ask a brief question.
I will be brief. I accept your difficulty.
I want to accommodate other Members.
The point is that the Minister has said that he alone makes decisions on applications under the national interest account.
There is no national interest account. There is no differentiation any more and there has not been since 1991.
So the Minister now makes all decisions?
Let us take a simple case. If an exporter wants export credit insurance for a transaction in connection with a commercial risk, he goes to an insurance company inside or outside the State — some companies are going outside the State to insurance companies in the UK, France and other places. The Minister for Tourism and Trade no longer underwrites policy having to do with commercial risk. An exporter can go to the Insurance Corporation of Ireland and get cover in the normal way as thousands do.
I am talking about the No. 2 account, the national interest account.
There is no such thing any more, nor has there been since 1991 when changes were made by the Minister for Industry and Commerce at the time. The recommendations made by Mr. Justice Hamilton, apart from No. 2 which I have now implemented, have already been taken on board and were announced in a press release on foot of the report of independent consultants which was commissioned earlier that year. Consequently this problem no longer exists. This is all public knowledge.
The Minister will forgive me if I am not up to date on current affairs. It is difficult to stay abreast of these matters. Is the Minister telling the House that the No. 2 account, the socalled national interest account, the purpose of which was to cover products being exported from this country for which no commercial insurance was available in the marketplace, has been terminated? Is he saying that the recent insurance for products being exported to Iran is not under the national interest account, and is he saying that he has no intention of renewing the national interest account along the lines mentioned by Deputy Deenihan where political risk is deemed to be involved? I do not believe it is common knowledge that the No. 2 account has been shut down.
I have answered this question on previous occasions, as has my predecessor. The decision of 1991 set the business of export credit insurance on a new footing. What we cover now is political risk, if we cover it at all.
The political risk relates to the No. 2 account.
The export of beef to Iran later last year would come under the heading of political risk and applications will be made to my Department.
That is the No. 2 account. That is the national interest account.
There is just one account.
But it is the national interest account.
It is political risk insurance that we are now covering, call it what you wish.
This is the one Mr. Justice Hamilton was talking about.
That has been the situation since that time. I have answered questions, as has my predecessor, explaining that. Maybe there was not as much emphasis as there should have been at that time but my predecessor issued an elaborate press release announcing a Government decision which was made on foot of a consultant's report and there was considerable talk about it at the time. I have also answered questions in this House about the matter.
Deputy Deenihan for a final question on this issue.
The picture is exactly the opposite.
I am sorry, Deputy Rabbitte, this question has been more than adequately dealt with.
We are about to clarify the point.
I would ask you now, Deputy Rabbitte——
I would beg your indulgence because we are about to clarify the point. We are at cross purposes. What the Minister is saying is that the commercial risk account no longer exists, but the account we are talking about and which was the subject of the tribunal, does very much exist and the Minister is saying that the Minister and only the Minister makes decisions on it. I want to know how that can be reconciled with Mr. Justice Hamilton's recommendation, No. 1, having regard to the fact that the Minister said the Government committed itself to implementing Mr. Justice Hamilton's recommendations. The national interest account is very much alive and well and it is the one administered by the Minister. I want an answer to the question.
I am calling Deputy Deenihan for a final question.
Deputy Rabbitte rose.
I would ask you, Deputy Rabbitte, to resume your seat. You have had more than adequate time to question on this issue.
We are not here. Sir, to put on a theatrical performance: we are here to elicit information. I want to hear what the Minister has to say.
I am calling Deputy Deenihan if he wishes to put a question.
A Leas-Cheann Comhairle—
I will ask the Deputy once more to resume his seat so that I can proceed.
This is completely unfair.
We all want an answer.
Absolutely not, Deputy. This has been more than adequately dealt with.
We are asking a pertinent question and everybody in the House wants to know the answer.
Is the Minister aware of the concern among exporters about the non-transparency of this scheme as it now operates? Let me remind the Minister that it was his own Taoiseach who damaged the credibility of this scheme. Can the Minister guarantee that all information regarding export insurance will be relayed to all exporters and, more important. will the Minister assure us that if an exporter is refused export credit insurance such exporter will have an opportunity to seek the reasons and to put his case to the Minister again as recommended by Mr. Justice Hamilton?
As I said in reply to an earlier question that is now done.
It is not.
The Deputy asked that an applicant be given the reasons when he is refused. He is given the reasons.
Publish the regulations.
I can publish them again. It was a Government decision of 1991 which set up the new procedures. I can republish the regulations which Deputy O'Malley published by way of a press release. Deputy O'Malley did not keep them a secret. He got a report, he announced a Government decision and published it and all the regulations, which he implemented and which have been implemented since that day.
In regard to what Deputy Rabbitte said earlier we are somewhat at cross purposes. There is political risk insurance which operates under very strict criteria since that decision in 1991. Mr. Justice Hamilton's recommendation No. 2 has now been implemented. I will make available to the Deputy at my office or in correspondence all the changes that were made in 1991 and perhaps that will resolve the matter. We have been at cross purposes and I would not like to see Deputy Rabbitte getting his blood pressure too high.
A Leas-Cheann Comhairle I want to clarify——
I am sorry Deputy.
This happens to be an important matter.
Deputy Rabbitte, can you just accept that we have spent 25 minutes on this issue? I ask the Minister to respond to Question No. 54.
A Leas-Cheann Comhairle: I want to put one final point of clarification.
I have called the final question long since.
On a point of clarification——
I have given the Deputy a good deal of latitude and I believe he is being disorderly now.
I undertake to be very brief because it is important that the question be clarified. The Minister said that political risk insurance was dead. Can I put it to the Minister——
I have asked the Deputy to resume his seat and I have been very reasonable and patient.
This is an important issue.
I will ask the Deputy once to resume his seat so that we may proceed with Question Time.
It really does not matter that much how quickly we proceed to other questions. This is an important question which everybody wants clarified.
I have given the Deputy an ultra long time to deal with this. He will resume his seat now or I will ask him to leave the Chamber which I am very loath to do.
You do not appreciate the significance of the issue.
