Dáil Éireann debate -
Wednesday, 11 Oct 1995

Vol. 456 No. 7

Industrial Development Bill, 1995: Report and Final Stages.

Minister for Enterprise and Employment (Mr. R. Bruton)

I move amendment No. 1:

1. In page 4, between lines 28 and 29, to insert the following:

"(2) All land which, immediately before the commencement of this section, was vested in Forfás, and all rights, powers and privileges relating to or connected with such land shall, on such commencement, without any conveyance or assignment, stand vested in IDA for all the estate or interest for which it was vested in Forfás but subject to all trusts and equities affecting the land subsisting and capable of being performed.

(3) The powers and functions set out in section 16 of the Industrial Development Act, 1986, may be exercised by IDA notwithstanding anything to the contrary in subsection (1) of section 9 of the Act of 1993.

(4) Forfás and each Agency may sell, lease or otherwise dispose of land otherwise than in accordance with subsection (1) of section 16 of the Industrial Development Act, 1986, with the express consent of the Minister.".

The purpose of this amendment is to provide detail of the way in which the land and building currently in the ownership of Forfás will be handled in future. When the Industrial Development Bill, 1993 was passed the management and ownership of the land was left in the hands of Forfás. It was not intended that Forfás would be an operational agency but a policy orientated and co-ordinating body and it was not intended that it would have the mainstream handling of a property portfolio. However, both agencies needed time to identify the best way to handle the estate. An evaluation carried out by the evaluation committee set up under the industrial operation programme and an independent consultancy recommended the approach being taken, namely, that for the future the IDA would manage the industrial lands and buildings. The reason is there would be enormous procedural difficulty in trying to split estates and allocate them to different agencies but, more importantly, the IDA is the mainline user of sites and advance factories. The State has been traditionally involved in the provision of land and buildings in relation to incoming investment. Forfás was consulted about the proposed transfer and is happy about it.

I am determined that there will be proper guidelines for this operation and meetings were convened to ensure there will not be any practical difficulties.

The second major element of the amendment is in subsection (4) where we are providing that the agencies may sell, lease or dispose of land otherwise than in accordance with section 16 (1) of the Industrial Development Act, 1986, provided that they deal in land, sites or buildings solely for industrial use. Occasionally land was acquired that is no longer suitable to be maintained in the industrial land bank for various reasons. It is desirable and was recommended in the evaluations that a commercial and pragmatic approach should be taken to the management of land banks and other property. It will be open to the authority to dispose of land for non-industrial use should it be in accord with sensible commercial management and with its mandate.

There is a requirement that they do so with the express consent of the Minister. This is not included because the Minister will supervise every decision the IDA might undertake on a day to day basis, to ensure in legislation that the IDA does not have the mandate of a commercial property development company. Its activities in this regard would be commercial in approach but within the mandate of an industrial development agency.

Mr. E. O'Keeffe

I agree with many of the Minister's comments regarding the amendments to section 4. I am glad there is not more bureaucracy with various areas split between Forfás and Forbairt with regard to leasing, mapping, delays in new conglomeration staff and arguments within the company. The Minister recognises that the IDA is, in a way, the parent organisation of the other two. I realise the work which would be necessary and the arguments which would follow if there were changes in many industrial estates and areas in the country and if Forfás owned plants, machinery, buildings and land. On that basis the amendment is welcome.

The issue of land banks must be addressed. Land was disposed of over the last few years on the instruction of Government at times of difficulty in the economy. However, there is now a shortage of land in many areas for industrial development. Much of the disposal of land was not in the best interest of industrial development or job creation. The Minister should have greater power when sites are being disposed of. I am aware of areas where land was required but not available. Land was then purchased which did not have commercial value and was not suitable for industrial development. I am not completely happy with the disposal of land without some recognition of its importance or research on its future potential if it was retained by the IDA.

Mr. O'Malley

Has this amendment been recommitted or is it still being taken on Report Stage?

Mr. R. Bruton

It is a Report Stage amendment. Its introduction was flagged on Committee Stage.

Mr. O'Malley

Was it recommitted this morning? If not I may speak only once. It is very confusing and I wish to ask the Minister a number of questions about it. It is difficult to follow.

Acting Chairman (Mr. T. Foxe)

It has not been recommitted.

Mr. O'Malley

May I move to recommit it now so that we may have a normal discussion?

Mr. R. Bruton

I have no difficulty with that.

Bill recommitted in respect of amendment No. 1.

Mr. O'Malley

The difficulty is that it appears to be an amendment to section 3 and not, as Deputy O'Keeffe said, to section 4. The Minister will correct me if I am wrong.

Mr. R. Bruton

The Deputy is correct.

Mr. O'Malley

It is to section 3. If it is an amendment to section 3, there are two subsection (2)s. It is not proposed in the amendment to delete the subsection (2) which stands inserted by section 3.

Mr. R. Bruton

The Deputy has a point.

Mr. O'Malley

That is why it needs to be recommitted. As far as I can see, it is wrong. The subsections that section 3 with the proposed amendment are purporting to insert are subparagraphs of the First Schedule of the 1993 Act. However, there cannot be two subsection (2)s. They must be numbered differently and in any event, subsection (2) does not appear to stand with the proposed subsection (4).

Mr. R. Bruton

To clarify the position, all section 3 becomes subsection (1), that is paragraph (1) (2), and the amendment becomes subsections (2), (3) and (4).

Mr. O'Malley

That cannot be because section (3) includes the words: "The First Schedule to the Act of 1993 is hereby amended by the substitution, for paragraph (1) (2) thereof of the following..." The words "the Schedule is amended" cannot be inserted in the Schedule. Subject to my contribution later, it should read that what is now in section 3 should be called subsection (2) and what is contained in the amendment should be called subsections (3), (4) and (5).

Mr. R. Bruton

I will clarify that matter while the Deputy raises other points.

Mr. O'Malley

This problem is typical of the difficulties we seem to have encountered from 1993 onwards with regard to these matters. One of the main reasons for the Bill is that the 1993 Act is a mess. It has not been possible to operate it and it has added to the confusion and tension which exists between all the newly created and proliferate agencies. The introduction of this Bill was necessary for them to operate and to try to rectify some of the errors made in 1993.

The 1993 Act was introduced just before the summer recess. It was included in a long list of legislation which, the House was told, needed to be passed in a number of days. It was not properly examined and I warned about this aspect at the time. My warning has been borne out since all these amendments are necessary. The Bill was improved somewhat on Committee Stage in the Select Committee. However, we are in an awful mess now in terms of this amendment.

I am also disappointed that this is the only amendment in the Minister's name. From what he said in the Select Committee, I hoped he would deal with cartain other matters also. He accepted a number of my amendments on Committee Stage but other points, of which this is only one, have not been addressed. This is disappointing.

If this is enacted in a proper form, one of the effects of the amendment will be to turn the 1993 Act of its head. From reading the 1993 Act, it is clear the central holding agency or company was to be Forfás. Under the terms of this amendment, it appears Forfás will not hold anything. This is the direct opposite of what was enacted only two years ago. That seems to be very sloppy indeed. If it was right two years ago, why is it wrong now? Furthermore, if it is thought appropriate to take all property out of the ownership and control of Forfás, why does all property go to the ownership and control of the IDA? In the long term, the more important of the two line agencies from this country's point of view is Forbairt. It has the more difficult task and if it does not succeed, then the industrial development of this country does not succeed.

It is somewhat arbitrary that all the property vested since 1993 in Forfás is now to be vested in the IDA. If there is a difficulty between the two agencies it would be better to allow the land to continue to be vested in Forfás. If the Minister reads the speeches made by his predecessor in 1993 on the Bill, he will find that the idea was that there should be a holding company and that neither of the line agencies should be involved in the holding, ownership or management of property. Their job was to promote, not to be concerned with buying, selling, holding and managing property. That made sense if one was prepared to accept the overall logic of the argument, but that has now been turned on its head.

If in the future Forbairt, as the indigenous agency, wants to make land available to an Irish enterprise, it cannot do it itself nor can it go to its parent company, Forfás, to do it. It has to go to the other line agency, which in a limited sense is its rival, and ask it to provide land for an enterprise that it wishes to establish. There is a conflict of interest, as the Minister must appreciate, because while the system may work most of the time, it may well be that an indigenous company, which Forbairt is promoting, and an overseas company, which the IDA is promoting, both want the same piece of land. The IDA will be the owner of it and the IDA's instinct, a natural one, would be to transfer that land to the company it is promoting.

How is that conflict to be resolved? We have had some examples of it already. We have seen one example in Shannon this summer which causes me a great deal of concern. The IDA against the wishes of Forbairt and SFADCo promoted an overseas company that will have a very serious effect in a very limited market on an entirely Irish owned company which has become a successful world company. This problem will be more frequent when it comes to buying and selling land.

I do not know how section 3 (2) can stand with the other subsections. There is a general power in section 3 (2) to acquire, hold and dispose of land and other property or any interest therein, and then in the proposed section 3 (4), which at the very least, should be section 3 (5), it states that

Forfás and each Agency may sell, lease or otherwise dispose of land otherwise than in accordance with subsection (1) of section 16 of the Industrial Development Act, 1986, with the express consent of the Minister.

The Minister, explaining that, said cases had arisen where the IDA or Forfás should not be confined to selling land for industrial purposes. I agree. There are instances where pieces of the rather large amount of land they hold would from time to time have to be sold for non-industrial purposes. That would be perfectly valid, but if this power has to be put in here now, it implies that the IDA or Forfás did not have that power to sell for non-industrial purposes, although it has sold land for non-industrial purposes in the past.

The Minister may recall that in 1988 there was a big effort to get the IDA, then the sole agency, to dispose of land. It was under a great deal of pressure to do it. I remember at the time being opposed to selling land at Ballylongford, County Kerry, which I regarded as perhaps the most valuable potential industrial development land in Europe. It is flat land right beside 80 feet of water at low tide. I objected vociferously to the IDA selling that. It was to be sold in part to people who wanted to build a hotel there and in part to local farmers for agricultural purposes. My objections since prevailed and it was not sold in the end, but it sold other property at that time, some of it at quite a low price. If this amendment is necessary, that means the IDA had no power to sell that land. I question that because I believe it had power, but the latter part of this amendment implies it did not.

Section 3 (3) and section 3 (4) will make the conveying of State held property very difficult in future. All that is required is a simple straightforward statement, as there is in 3 (2), that

Forfás and each Agency shall have the power to acquire, hold and dispose of land and other property or any interest therein

without all these limitations in the other sections. If the Government is to overrule the other sections in the 1986 and 1993 Acts, the clear implication is that the IDA did not have power to sell in the past except for the purposes specified in the sections, and that is a very serious matter.

The Minister has not given any explanation of why it is proposed to transfer all the land from Forfás to the IDA two years after it had been transferred to it. He just says that Forbairt agrees with it. The Minister said the IDA is the main body involved in disposing of land or selling it to incoming companies, but Forbairt should be to the forefront of our thoughts and concerns in this House, because the future of Irish industrial development is bound up with whether it succeeds. I do not see why it should be put in a statutory position of playing second fiddle and allowing the IDA to decide everything. Forbairt can only have access to land or development sites if the IDA does not want them for overseas company purposes. That is wrong.

As regards the other amendments, the Minister, and his Department, were good enough to write to me recently on the question of vesting securities in trusts and making investments in trusts. That deals with one of the points I raised and an amendment I tabled on Committee Stage. I was given the name of a specific body, which I cannot recall, that was interested in this and wanted power to take these investments, which I accept. The Minister will recall that there were a number of other such amendments which have not reappeared. I had hoped they would, but I did not table the amendments again. I suppose I will have to have them tabled in the Seanad. It is a pity they were not dealt with.

As far as this is concerned, it is only adding to the confusion. I suggest to the Minister that subsection (3) (2) is enough and that he is only confusing the issue by bringing in these other points because they will raise considerable difficulties when it comes to the technicalities of conveyancing. Not only do they raise difficulties for the future but, by implication, they raise difficulties for the past. If it is thought necessary to include these provisions now, particularly those in subsections (3) and (4), a conveyancer would have to conclude that because the Oireachtas thought it necessary to include them, there was a problem before their inclusion. It is assumed the Oireachtas would not include something which is not necessary.

There have been many sales of land acquired for industrial purposes for non-industrial purposes. I could name such places — for example, Shannon Development sold land in the mid-west region. I recall instances of this coming before the Oireachtas Joint Committee on State-sponsored Bodies where land was sold off for housing in County Wicklow, County Wexford and other counties. It would be better if these three proposed subsections were not proceeded with because they will only cause enormous confusion.

If we must have three agencies, it is better that the holding company as envisaged in 1993 should continue to be that and it should not be done through one agency to the detriment of another. I am long enough dealing with such bodies to know that the worst thing we could have is to have two of these agencies at each other's throats. It is not fair to those involved in them that they will be forced into this situation. The Minister can give assurances in good faith, but he does not know as much about this as I do and the way some of these agencies react and interact with one another. If the IDA owns a choice piece of land, a Forbairt customer, no matter how worthy, will never see it. That is wrong and it should not happen. For that reason, I ask the Minister to withdraw these proposed subsections because they confuse the issue.

Mr. R. Bruton

I would like to clarify the pagination issue. If these amendments are accepted, section 3 will become section 3 (1) and the others will be subsections (2), (3) and (4) and (1) will become the First Schedule and so on.

Deputy O'Keeffe said the Minister should have greater powers to police decisions in relation to land being disposed. I suggest there should be broad agreement as to how the IDA would manage its property portfolio. I do not believe it would be appropriate or that the Minister would be qualified to get involved in every decision. Clearly, in instances where there is disagreement, it would be appropriate for the Minister to be involved if there was an issue to be overcome.

The reason for vesting the property portfolio in the IDA is that it would be extraordinarily cumbersome to pursue the alternative route suggested by Deputy O'Malley of leaving all the agencies with powers in relation to property and then proceeding to conveyance from Forfás on an individual case by case basis every item of land to each of the agencies. That would be a cumbersome approach to adopt. Instead, the approach being adopted is that we are proceeding by way of legislation to vest the property portfolio in the agency which has the prime interest and measure of industrial support to manage land and industrial estates.

We provide that the IDA can conveyance appropriately parts of that property back to the other agencies, but that would be a very small proportion of its overall portfolio compared to what is now being vested in the IDA. The reason the consultants and the evaluation unit in the Department identified this as the best approach is that the management of land banks and industrial property has not been in the mainstream a vehicle of support used by Forbairt. We have not taken the approach to indigenous industry that the type of support we would offer to it would be primarily by way of providing land or buildings. That approach has been essentially one for the IDA which is competing with other industrial agencies which often offer such provisions.

As the Deputy knows, there has been a correct tendency in recent years to downgrade the extent to which, even at IDA level, we get involved in managing land banks and providing advance factories as a means of industrial support. It continues to be an important vehicle for the IDA. That is the rationale behind this approach. The overall portfolio would be vested in the agency for whom it has the most value.

Forbairt is happy with this approach because it does not see this as imposing any limitations on its freedom of manoeuvre in respect of its portfolio of indigenous companies. The approach to the development of indigenous companies has, of course, been primarily on building the capabilities of Irish industry. That has focused not on land and building support but on capability within those companies. It will not be extremely cumbersome for the IDA to conveyance. One of the reasons for putting in subsection (3) of this amendment is to remove any ambiguity that either Forfás or ministerial consent might in some way be necessary before the IDA could proceed to deal or sell part of its portfolio. We have taken this opportunity to remove any such ambiguity that might make the opportunity for IDA to sell commercially excessively cumbersome or subject to some doubt.

The Deputy correctly indicated there have been occasions in the past when land has been sold for non-industrial purposes. There was an implicit power that the IDA, as it was then, could do that. However, because of the more active approach that will be taken in the future on foot of recommendations about the management of the industrial portfolio, there will be more selling of property where it is of less strategic value. It is important that the existence of this power is made explicit in the Act, that section 16 of the 1986 Act permits the IDA or the agencies to buy or sell land and build buildings, but only if it is for the promotion of industry. It is conditional that those activities are in the context of industrial promotion. At one reading, one could say that disposing of the land commercially was sensible and in the interests of industrial promotion. However, someone interpreting that law could say that it was a restriction and that it would not technically be in compliance with the Act if it was disposing of land for a non-industrial purpose. We have decided to insert subsection (4) to remove any ambiguity that might be there. I also assure the Deputy that each agency will not be in any way constrained in the handling of land vested in it. Equally, if land is conveyanced by the IDA to Forbairt, it will be in no way constrained in the selling of that land.

Mr. O'Malley

All I have learned from the Minister is that he apparently intends paragraphs (2), (3) and (4) in this amendment to be new subsections rather than paragraphs. Any Member reading this amendment could not but conclude that what was proposed were three new subparagraphs in paragraph (1) of the First Schedule to the 1993 Act. If the Minister wanted these to appear as new and separate subsections, he should have said "In page 4, between lines 28 and 29, to insert the following subsections".

Mr. R. Bruton

We were advised that the correct procedure was the one we followed. I agree with the Deputy that it would have been much easier to understand if this had been clarified. When the drafting took place, we were informed that it was more correct technically to do it in the way it was devised. However, I accept the point that the way it was drafted was confusing. It was not the way we approached it in our briefing, but that is the way it came out on the Order Paper. I accept what the Deputy said.

Mr. O'Malley

I am grateful to the Minister for that but it has caused unnecessary confusion and anxiety. This may get over some of the technicalities but not the principle. If the Minister looks back at the amendments put down on Committee Stage of this Bill, he will find that when it was proposed to add a subsection, it said "to insert the following subsection". Committee Stage took place in 17 July. The practices should not have changed that dramatically between then and October.

Mr. R. Bruton

When handling Bills previously, I have seen that when a section had no suggestions, it said "after this paragraph, to insert (2), (3) and (4)". It was implicit there that if they were accepted by the House, they would become "(2), (3) and (4)". There was not the explicit amendment saying that "(1)" would go in before "the". I have seen examples of this practice before in this House. Most Members would have also dealt with it in that fashion. The practice is not as uniform as the Deputy would like to think.

Mr. O'Malley

The instance in which the Minister speaks is, of course, when the amendment is being made to a normal subsection. However, this is not the case here. First, it is not numbered as a subsection, but more importantly, it inserts a subparagraph rather than subsection. If something is described as following immediately afterwards, it is not unreasonable to assume that what follows afterwards are further subparagraphs. However, we have discovered that they are not subparagraphs intended to be inserted in the First Schedule but are separate subsections to stand on their own in section 3 of the Bill.

The difficulty I have with their substance has not been allayed by what the Minister has said. He said that — I may not be quoting his words precisely but I am correct about the sense behind them — this amendment was being put in to avoid any doubt so that land can be sold for non-industrial purposes. I accept that this is the motivation, but that immediately implies that there was, and is, doubt over sales that took place which were not in accordance with section 16 of the 1986 Act or section 9 or the First Schedule to the 1993 Act. This is a serious matter, not a minor point. We are discussing this Bill because mistakes were made in 1993. My concern is that they may be repeated and there may have to be a 1996 or 1997 Bill to rectify what happened here.

A straightforward right to convey in all circumstances would have been adequate. The Minister is only creating doubt by putting in subsections (3) and (4). If they are necessary now, something must have been wrong before. If this is the case, much of the conveyancing that took place must have been wrong as well.

I do not follow the Minister's reasoning in regard to subsection (2). The reason everything should become vested in the IDA is not clear to me. Forbairt has at least equal claim. There will be conflicts of interest between the two agencies. They arose this summer and Deputy Harney and I wrote to the Minister about a clear case.

Mr. R. Bruton

That had nothing to do with land.

Mr. O'Malley

I am aware of that but there is a clear conflict of interest between the two agencies in terms of the promotion of a particular proposal. However, that will arise also in respect of land.

Forfás, pending the passing of the Bill, has thousands of acres of land across the country. Much of it is of marginal value or attractivness while some parts are valuable and attractive. People do not want the marginal, unattractive sites. They tend to concentrate on well located sites that are well serviced and so forth and into which they move immediately. If there are two conflicting applications for the same site, one from overseas and one that is indigenous, there will be a regrettable conflict. In passing subsection (2) this House is resolving that conflict of interest in favour of the overseas promoter every time. The land belongs to the IDA and the IDA can do with it as it wishes, as the Minister said. It does not have to transfer it to Forbairt or to Forbairt's customer or client; it can vest it in its own client.

It is wrong to have two agencies potentially in conflict. It is wrong that the House should resolve that dispute in advance in favour of the overseas promoter against the Irish promoter each time. Industrial development promotion within Ireland in the indigenous sector is fragile. It has not taken off in the way one would have wished or hoped. This will not be a great help to it. Great confusion will be caused by the two subsections.

Subsections (3) and (4) were only published last night. It is probable that nobody outside this House has seen them. I would like to show them to some firms of solicitors which carry out such conveyancing for these companies because they would be concerned about them. Usually, if there has been doubt and it must be resolved by legislation a preliminary phrase — for example, "For the avoidance of doubt"— is used and the provision is made retrospective. This is not made retrospective and will come into effect when the Bill is passed. It does not affect anything that happened post 1986 or post 1993. It means that what happens after October or November this year is correct but if it happened before then it is not. That is wrong.

The use of the phrases "with the express consent of the Minister" and "notwithstanding anything to the contrary in subsection (1) of section 9" and subsequently permitting the IDA to carry out these functions is somewhat reminiscent of what we heard about Horgan's Quay yesterday. Deals that can be done privately with the consent of the Minister are not advisable. If a public body here has the right to sell land, it can only have such right if it is given it by this House. If it is given that right it should be on specific terms. It should not be a case of: "you can sell it provided you comply with these conditions but if you do not comply with the conditions you can still sell it provided the Minister gives his consent". That principle is wrong.

We heard about the Horgan's Quay case yesterday and we should avoid the possibility of such cases arising again. These are the subsections that give rise to cases such as Horgan's Quay. If this House gives a body the right to sell land, it should set out that right in legislation; it should not be done in private, behind-the-scenes deals with Ministers giving their consent to something that would otherwise be illegal.

Mr. R. Bruton

We are not here today because mistakes were made. Contrary to what the Deputy said, it was always the intention that the property and security would be transferred from Forfás to the agencies. It was never the intention that Forfás would become the manager of large portfolios of securities, land or buildings. The Deputy is incorrect in suggesting that such was the approach or intention.

Clearly, time was required to assess how future management of the property portfolio would best be organised. That period has elapsed and careful study has been given to the intended approach. We have been assured by the best advice that this is the correct approach. It has been recommended by outside consultants and has been examined by legal personnel in the IDA and Forbairt who are satisfied that it is legally adequate to meet their requirements. It has gone to the board of Forbairt which is satisfied that its needs in relation to indigenous industry are catered for correctly. In the event of a conflict such as the Deputy envisages arising, we would, through the normal procedures of regular meetings between the chief executives of the two agencies and our liaison with them, ensure that there is no diminution of the efforts of Forbairt in this area.

The Government approach does not see the development of land banks or advance factory buildings as the main vehicle for support of indigenous industry. I doubt that it was the approach when the Deputy was a Minister. Indeed, the Deputy was keen that land banks should not be excessive to needs, that we should move to a point where land banks were the minimum required to support industrial development and that we concentrate instead on the capabilities of our industries. Our approach is entirely consistent with that.

The Deputy also raised the issue of uncertainty in the past as to the implications of section 16 which provides that for the purpose of providing or facilitating the provision of sites or premises for the establishment, development or maintenance of an industrial undertaking the authority may, among other things, acquire land, construct, adapt or maintain buildings, provide services and so forth if the authority considers that industrial development will or is likely to occur as a result. In the past, the Industrial Development Authority interpreted that section to mean that it could sell land for non-industrial uses where it was appropriate to the commercial management of its portfolio, even though the Act requires it to do these things only if it considers that industrial development will or is likely to occur as a result.

That was a legitimate interpretation of the section. The authority could say that it was managing a portfolio effectively and commercially to ensure that it had adequate resources for industrial development and if it had land that was not germane to that task it could rightly dispose of it. The authority was correct in that interpretation and we have taken the opportunity to provide a clarification in subsection (4) of this Bill to make it explicit that it has that right.

However, I have reserved the consent of the Minister. That is not to suggest, as the Deputy has, that there might be an effort to sell below cost. There is no such intention and if I engaged in any such activity I would be answerable to the Dáil and Deputies would be entirely correct to ask questions about how I exercise my right of consent. The purpose of providing for ministerial consent is simply to ensure that we do not go to the other extreme in relation to section 16 and find that we have an industrial agency in the commercial property market, so to speak, with a portfolio of property which does not have a bearing on its clear mandate of industrial development. The sole purpose of providing for ministerial consent is to ensure that the agency keeps its eye on its primary mandate as outlined in section 16, that is, industrial development.

The Deputy referred to conflicts of interest which can occur between the IDA and Forbairt in regard to specific properties. Yesterday the Deputy's party leader raised questions on this issue in the Dáil and we had a very worthwhile discussion on it. I outlined to the Deputy's colleague that the IDA and the other agencies operate under clear negotiating guidelines under which they must take into account the potential effect of a proposal on another industry. They must look at the overall markets in which the companies will play, they must satisfy themselves that there is scope for the two companies to satisfactorily develop in the market and look at other issues such as import substitution of the incoming company and whether it is likely to establish itself in another country, such as Northern Ireland, Wales or Scotland and compete directly with the other company. When drawing up grant approvals they must look at those issues and, if necessary, as happened in the case to which the Deputy referred, impose conditions to prevent damage to the established Irish company.

That is the procedure in place and in order to prevent any ambiguity I will communicate with the agencies to ensure there is proper consultation between them in the event of any such conflicts. There has been consultation between them to date. There was consultation in the case to which the Deputy referred and the final decision was arrived at following that consultation. The system in place is working well. I accept that the split between the agencies will give rise to a need for tighter procedures, which I am putting in place.

On the question of dealing in land, the conflicts to which the Deputy referred will not arise in practice. We have carefully gone through the legal and policy issues with the two agencies which are happy, as are those employed by Forfás, to assess the best way to manage a portfolio.

At the end of the day an industrial estate is a unit and it has to be managed as such. It cannot be managed by making three-quarters of it the responsibility of the IDA and the other quarter the responsibility of Forbairt or whatever other mix might emerge. There has to be coherent management of the estate but at the same time one has to ensure that the needs of Forbairt will be catered for if and when they arise. I am satisfied that Forbairt's needs will be catered for and it is happy with the procedures which have been put in place.

I think I can put to rest the Deputy's fears that we are creating a legal mine-field or that there will be difficulties in conveyancing. We have availed of the opportunity to remove any doubts which might arise about the speedy conveyancing of properties. We have also removed any doubt that the authorities might have been under some restriction in selling land for non-industrial purposes or that they might have to go back to Forfás or the Minister in regard to specific handling under subsection (3) of the original section 9 which may have given rise to possible confusion. In future land banks and the industrial portfolio will be managed much more commercially than they have been in the past and the main emphasis will be on the incoming investment. We do not regard the provision of land and buildings as a major vehicle for Forbairt but we envisage that this may occur and provision has been made to accommodate these needs when they arise. Forbairt is satisfied that the procedures are adequate to protect it.

Acting Chairman (Mr. Browne,

Carlow-Kilkenny): Before I call Deputy O'Keeffe I wish to point out that we have been discussing this issue for approximately three quarters of an hour. I accept that it is an important topic but perhaps we could bring the debate to a conclusion.

Mr. E. O'Keeffe

Having listened attentively to the points made by speakers on both sides of the House, it is obvious that our industrial development is nearing a crisis. The Culliton group was originally set up to bring about changes in the IDA. I agree that if the Minister breaks up the company it will lead to more confusion and argument. If Forfás wants to use an IDA site for a new development in future, will the site become the property of Forfás?

I have listened attentively to the reports of the conflict which has arisen between a town in my county and the western part of the country. I do not want to mention names but an objection was lodged by a firm against a development by a company from the North Atlantic area almost on the eve it announced its decision. The international firm has incurred major expenditure and its management has been investigated as a result of the objections raised by that firm. It is grossly unfair that this should have been allowed to drag on for so long. I do not want to interfere with the confidentiality aspect by mentioning names——

Acting Chairman

In fairness, it is not relevant to the amendment.

Mr. E. O'Keeffe

The Minister referred to this in the context of a priority question yesterday. Our job creating agencies are not doing very well abroad and this case will merely create further confusion and will not do anything to improve the image of the country. The people in that company have complained to me about what has gone on and I am very annoyed about what has happened. I do not want to sound parochial as a town in my constituency would have been the beneficiary of this development but my information from the parent company in the North Atlantic area is that a small minded firm in this country raised the objection. It will be unfortunate if the company decides to locate this development in Scotland or Wales which are very near to us, as can be seen from the fact that it is cheaper to fly from Manchester to Dublin than to fly from Cork to Dublin.

Mr. O'Malley

I do not wish to prolong the debate but the Minister does not seem to fully appreciate the significance of what he is doing in sections 3 and 4 from a purely conveyancing point of view. If he says there was some uncertainty in that regard and that we must rectify it, that uncertainty has not been rectified retrospectively. A great deal of land has been sold since 1986 with which I agree. I wish it could have sold more, particularly land that is useless. It does not appear to have had the power to sell it because, according to the amendment, it was relying on section 16 (1) of the 1986 Act. Subsection (1) sets out the circumstances in paragraphs (a) to (h) in which it can acquire and sell land but all those instances are governed by the words that it can do all those things if the authority (1) considers that industrial development will or is likely to occur as a result and (2) is satisfied that the undertaking conforms or will conform to the criteria set out in subsections (3) and (4) of section 21 or section 25 (2). That power could only have been exercised under the 1986 Act if the IDA, then called the Authority, considered that industrial development will or is likely to occur as a result of the sale of the land. If it were selling it for the purposes of building a hotel, farming or housing, three main purposes among others for which it did sell land, it could not be satisfied that industrial development will or is likely to occur as a result. In that sense it is right to rectify it but it highlights that a mistake was made. It must be rectified because in the past there was not just a doubt in that regard but a lack of power.

Section 9 (1) and (2) of the 1993 Act does not seem to change the fundamental position as set out in section 16 of the 1986 Act. I cannot put the case any stronger than that. I am concerned about the matter but we can only wait and see what will happen. I believe this issue will be raised at a later stage and will prove very expensive for somebody who will fight a case in court.

Mr. R. Bruton

Regarding the issue raised by Deputy O'Keeffe concerning the taking of space by a Forbairt company, if it were renting, it would be renting from the landlord which would be the IDA. If it decided to purchase, which would often be the case, it would purchase outright but the management of the estate would remain with the IDA.

I note the point Deputy O'Malley raised. He said that before my time as Minister and during his time as Minister property was disposed of. Section 16 could be interpreted incorrectly. On balance a reasonable view would be that the activity of selling land no longer worthwhile for industrial uses, where the agency decided that it would sell supernumerary land which did not fit into its plans in the interests of its overall mandate to promote industry, would comply with its general mandate of considering that industrial development will or is likely to occur as a result. It would be husbanding its resources wisely so that the money, the land bank, available to it would be accessible to support industrial development. It would be reasonable to argue that its selling of land that was redundant for industrial purposes and using the proceeds to acquire more suitable land or whatever would be viewed as the pursuit of its overall mandate.

I am not keen to do what the Deputy might suggest would be a solution — to delete the requirement that industrial development will or is likely to occur as a result. It would not be satisfactory if we deleted that requirement and the company were merely a commercial property management company. I have chosen to maintain a ministerial interest in this area to ensure that it continues to comply with its overall mandate of industrial development. It is appropriate that we would remove any doubt. In future agencies will be required to manage their portfolios more commercially than they have in the past. That has been the thrust of recommendations put forward. We are ensuring that they will be managed commercially and that there will not be an impediment to their commercial management. The legal advisers of the Department and agencies considered this, are pleased with our approach and it is on that basis I commend the Bill to the House.

Mr. O'Malley

They were happy in 1993 also. They made one big hames of it by not giving power to the agencies to hold or sell land.

Amendment put and declared carried.

Amendment reported.

Question: "That the Bill, as amended, be received for final consideration", put and agreed to.

Question proposed: "That the Bill, as amended, do now pass."

Mr. O'Malley

This is another Bill in the long saga of industrial development legislation. The proper context in which to look at it is that of the 1991 Culliton report, the principal attempt made in the State to get our industrial development activity on the right lines having accepted that it was not working as well as we would have wished up until then. It is regrettable that this legislation and the 1993 Act does not follow what Culliton recommended. It follows it in parts superficially but the whole thrust underlining the Culliton report is ignored and we are in an unhappy position at present. What was attempted in 1993 has not worked and instead of the central point of Culliton, that we should try to rationalise and get rid of the several agencies we then had, we have gone to the opposite extreme.

In the Schedule to this Bill, 37 quangos, in addition to the existing ones, have been given statutory authority. I gave an account of them on Second Stage in July and the figure was approaching 100, and I believe I said then that I was still counting. The numbers have not declined since. If the establishment of quangos solved our problem, we would not have 280,000 unemployed. We have more quangos for that purpose than any other country and recent unemployment figures do not give any indication that the problem is being solved.

Question put and agreed to.

Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.