Dáil Éireann debate -
Thursday, 9 May 1996

Vol. 465 No. 2

Private Members' Business. - National Standards Authority of Ireland Bill, 1996: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Minister of State at the Department of Enterprise and Employment (Mr. Rabbitte)

The object of these negotiations, to which I have referred already, is to agree terms for mutual recognition in relation to technical specifications laid down in the respective markets of each country and to accept the common testing, certification and marking of products. This will reduce the need for, and cost of, duplicate testing and certification, will open up those markets and facilitate trade growth between the countries in question.

The NSAI has responded to this increasing role for standardisation. As indicated, it has established 14 consultative committees bringing together interests in various industrial sectors with the objective of monitoring worldwide standards work continuously, identifying projects relevant to Ireland and developing Irish positions relating to them. The NSAI is also represented on the three European standardisation bodies — CEN — European Committee for General Standardisation; CENELEC — European Committee for Electrical and Electronic Standards; and ETSI — the European Telecommunications Standards Institute.

Each of these bodies has up to 5,000 standards projects under review at any one time. The NSAI is also represented on the two international standards organisations, the International Standards Organisation (ISO) and International Electronics Commission (IEC). While the Authority develops national standards as required, the emphasis of its workload relates to the implementation of European and international standards. In addition, NSAI publishes and distributes a wide range of Irish and international standards, guidebooks and catalogues. It also published an annual guide to products and processes certified by NSAI during the year in question. It provides an information and education service for industry relating to standards and regulations applying in various export markets.

As a result of extensive consultation and planning by the European Commission, a more clearly defined European structure for testing and certification is evolving. European standards setting out operating criteria for laboratories, certification-inspection bodies and accreditation bodies have been published as the EN 45000 series under European rules these must be transposed into national standards in each member state.

In addition, the relevant Council of Minister has adopted a resolution endorsing the key issues of the Commission's document on a global approach to testing and certification. These issues include the development of national accreditation structures, the promotion of the EN 29000 and EN 45000 series of standards, relating to quality assurance systems and the operating criteria for laboratories and certification bodies respectively, and the establishment of the European Organisation for Testing and Certification — EOTC.

Accreditation involves giving national authorities the responsibility of assessing the abilities of test laboratories and certification bodies to properly carry out their tasks. It formally recognises competence by means of third party expert technical assessment against agreed criteria. It also involves regular surveillance and periodic reassessment. Accreditation in Ireland is carried out by Forfás through another autonomous committee, the National Accreditation Board, established under section 10 of the Industrial Development Act, 1993.

A consequence of developments at European level is that national accreditation systems must comply with requirements for the establishment of "notified bodies". These are testing laboratories and certification-inspection bodies which are specifically designated by member states and notified to the European Commission to carry out the conformity assessment requirements as set out in the relevant directives.

A number of different conformity assessment procedures are set out in the directives. They vary from simple product certification to product design, manufacturing procedures and quality system certification for complex products used, for example, in the medical field.

A key requirement of notified bodies is that, apart from having the necessary technical competence, they should operate independently and impartially and have a separate legal identity. They are expected to conform to operating, including organisational, criteria laid down in the EN 45000 series of standards.

In our case this requires that testing laboratories operated by Forbairt and NASI certification procedures, and those of other bodies be accredited within an independent and impartial system. Only in this way can they comply with the EN 45000 series of standards. This also requires that the bodies concerned have a separate legal identity.

In summary, the objectives of the EN 45000 series of standards require that accreditation functions and certification functions be carried out by authorities which are absolutely independent of one another. Accordingly, under present structures, the National Accreditation Board and the National Standards Authority of Ireland — both of which now operate as committees of Forfás — do not meet the key operating and assessment criteria required by the EN 45000 series of standards for such bodies.

The National Accreditation Board cannot, in the present circumstances, accredit NSAI as a certification body and the integrity of NSAI certificates, including the one thousand ISO 9000 certificates already issued by them, could potentially be called into question in the continued absence of conformity with legal requirements related to operational independence of agencies.

Bearing in mind the necessity for accreditation, I have had a number of different approaches examined, including a number put forward by the staff interests in NSAI. I consulted my legal advisers, the NSAI itself, the National Accreditation Board, the European Organisation for Tests and Certifications and officials in Directorate — General III of the European Commission. The advice I received was that the setting up of an independent national standards body was necessary.

I am therefore, proposing, that responsibility for the accreditation of laboratories, certification bodies and inspection bodies should remain with Forfás but that Forfás's responsibility for standardisation/certification matters, at present delegated to the NSAI as a committee of Forfás, should be transferred to the NSAI as an independent statutory body under the responsibility of the Minister for Enterprise and Employment.

Provision for the welfare in all its aspects of existing NSAI staff has been a central concern of mine in drafting this Bill. Section 38 provides for the staffing of the new authority. It requires that staff currently carrying out functions related to standardisation within Forfás should transfer to NSAI.

It guarantees them the same rights which they currently enjoy within Forfás in relation to pay, pensions and equality with similar grades in other agencies. It particularly guarantees staff members the right to apply also for any promotional opportunities which are advertised in Forbairt, IDA Ireland and Forfás. The provisions of the Bill as they relate to staff matters are such as to allay any fears that personnel in the NSAI would be disadvantaged in any way when, on the passage of this Bill, the agency is established as an autonomous legal entity and is functional separate from Forfás.

The Bill also provides the Minister with the right to appoint not more than 13 members to the board of the new authority. The Bill follows the common international approach in requiring that only those persons who are already directly interested and involved in the standardisation process should be considered for representation on the board. It requires that the board should comprise the widest range of interests possible without any one section predominating. It will thus be possible to ensure that consumer interests as well as safety experts will be represented, together with a range of interests of manufacturers and industrialists. The chief executive officer will automatically become a member of the board.

The autonomous establishment of the NSAI is a significant development. It involves a necessary change in the structure and status of the organisation. That change will enhance its role and ensure that an awareness of the importance of standards and their certification is further profiled nationally and internationally. It will bring the best out of the organisation and ensure its future prosperity through the most effective delivery of its important national task.

As the responsible Minister, I can also understand how change in any organisation can give rise to concerns on the part of its employees. In my view there is no basis for such concerns by reference to the provisions of the Bill. I believe however, that the fullest involvement of staff at all levels will enhance morale and increase efficiency. Workers should be facilitated in making the fullest contribution to the operations of the NSAI and be directly involved in its decision-making processes.

Accordingly, I intend to propose an amendment to paragraph 2 of the First Schedule, on Committee Stage, to make specific provision for representation of worker representatives on the board of the NSAI so that they have the influence and authority to inform decisions, be they of an operational or policy nature.

Provision for such worker representation has not been a feature of the NSAI board to date. My commitment to provide for it now should give all employees the confidence to approach the organisational change which is in prospect with renewed assurance and the expectation of an even better working environment characterising the newly constituted NSAI.

I have outlined the main provisions of this Bill and the rationale which gave rise to its introduction. It is not contentious legislation but one which is informed by an increasing focus on the part of the European Union and international agencies on the importance of establishing and achieving product and process standards. That importance reflects the role which agreed and recognised standards now play in facilitating trade growth, economic development and employment creation.

The legislation, when enacted, will reinforce the independence of the National Standards Authority of Ireland by making its certification and standards development services totally independent of other agencies which are charged with delivering different tasks.

The importance of standards and their certification is central to the whole process of economic development. This legislation will put the NSAI on a very sound legal and administrative footing. It is important to do this quickly. I commend the Bill to the House and look forward to constructive and informative debate on its provisions.

Mrs. O'Rourke

I move amendment No. 1:

To delete "now" and add at the end of the motion the following words:

"this day six months, in order to ensure that the concerns of the staff of NSAI to the proposed changes be fully addressed".

Fianna Fáil has taken the unusual step of proposing an amendment to the Second Reading of this Bill because of the serious concern of the staff of Forfás in relation to this legislation. Our party believes that there has not been a sufficient attempt to take on board the concerns of the staff and we believe a six month break is necessary to thrash out the issues and determine what changes are required.

The background to this Bill is significant in the reason for our amendment. The Bill was first suggested when Fianna Fáil and Labour were in Government. My colleague, Deputy Séamus Brennan, had gone a long way down the road of meeting with people and talking over the format of the Bill. There was a specific reason for its proposal then. At the time, Forfás could not appoint subsidiaries as the legislation establishing the body did not allow for this. Therefore, the NSAI could not be set up as a subsidiary. The position was well outlined in a letter written by the chairman of the NSAI, Mr. John Donlon, who stated:

The reason for the change in Government policy in February 1994 to establish NSAI as an autonomous body arose from the recognition that it was impossible for Forfás to implement the arrangement for NSAI, together with ICLAB, to be made subsidiaries under section 10 of the Industrial Development Act, 1993. This arose from a legal opinion obtained by Forfás from senior counsel in December 1993.

The chairman made clear in the letter that this inability to appoint subsidiaries was the Government motivation at the time. Last year, under the Industrial Development Bill, 1995, specific powers were given to Forfás and its agencies to appoint subsidiaries. In fact, bar some matters relating to county enterprise boards, this was the sole purpose of the Bill.

In the Second Stage debate on the Industrial Development Bill on Friday, 7 July 1995, the Minister, Deputy Richard Bruton, said in relation to subsidiaries as reported in volume 455, column 1690, of the Official Report:

there are areas of activity, particularly in relation to Forbairt that may in future be considered more appropriate to be carried on outside the mainstream of the agency concerned.

On Committee Stage, the Minister in fact suggested that the matters before us today might be in mind for a subsidiary, as can be seen from the Official Report. He suggested that functions from the Eolas brief, which was where the NSAI was before the three new agencies were established, would be suitable for the subsidiaries. There is a necessity for the Minister to explain what he had in mind when he sought the powers to establish subsidiaries under the Industrial Development Bill. Based on the letter of the NSAI chairman, it would appear that the Industrial Development Bill solved all the problems and was the way forward.

In my view, these facts require that a fundamental rethink takes place on the legislation before us. The staff of the NSAI deserve explanations as to what is going on. They believe the whole situation has been contrived by the executives of the NSAI. The staff believe the management have their eyes on big jobs and big money and the only way this can be achieved is with a separate agency. The staff also claim that the main investigation and review of the options for the NSAI have been done by its own management. The staff accused the management of sitting in closed judgment and of having gone to the EU and made the case for the establishment of the agency as a separate entity. By the time the Department of Enterprise and Employment got to review the matter the deal was done. The staff also say the management advised the EU of potential conflicts of interest and in this way advanced their own case for separate agencies.

These are serious charges that must be answered. For some time, I have been calling for a halt to be put to the turf wars between agencies and for a rationalisation of the agencies. I do not want Members to accuse me of shedding crocodile tears. We were in Government when what I now consider to have been a very grevious mistake was made on the break-up of agencies. I admit to what happened to them. It was decided by Cabinet, of which I was not a member, but I clearly implemented the spirit of it because I was a Minister of State in the Department and spoke in the Dáil and Seanad as a follow-up to Deputy Ruairí Quinn on it.

There is no doubt that the proliferation of agencies at that time sent out a signal that it was open season for more and more agencies and rather than having agencies which are leaner, fitter or meaner — whatever is the appropriate adjective — there is an almighty turf war going on between the various agencies to such an extent that in some regional offices of IDA/Forbairt there is internal fighting as to who answers the telephone and to what manager that query should be addressed, whether it be IDA inward investment, Forbairt or an amalgamation of the two. It has led to a mess. Instead of the energies of people in those agencies being devoted to getting jobs domestically or internationally for Ireland, a great part of their energies is used in putting ringfences around their own areas of responsibility. I have domestic knowledge of the matter.

Mr. Rabbitte

Which ones would the Deputy have cut out?

Mrs. O'Rourke

I will come to that. As part of our election manifesto, which will be published shortly, I will be detailing what I intend to do in that regard. As well as all the bureaucracy, there is also a question of double and treble costs for the same functions. The establishment of this separate agency is likely to cost approximately £1 million per annum. Need that cost be incurred?

The NSAI traces its history to the Institute for Industrial Research and Standards Act, 1961. It has operated as a division of IIRS, later as part of its successor body, EOLAS and latterly as Forfás. There have been many signposts along the road. In its different formats it appeared to deliver a good service in developing, publishing and promoting standards for products and services to ensure they meet market requirements and are safe.

Since Ireland joined the European Union, with its increasing emphasis on a common market for goods and services, NSAI has played a vital role in ensuring that the necessary new standards to support this movement met Ireland's needs. NSAI also provides a certification service to manufacturing-service companies. That service has certified more than 1,400 companies to the quality system standard ISO 9000. Ireland now ranks among the top three countries in the world in terms of the number of companies certified to this standard compared to the size of its industrial base. This certification service is self-financing.

The stated reason for setting up the NSAI as an autonomous body is to bring it into line with similar moves in other European countries. It is also claimed that the move is necessary to ensure that NSAI could operate as an impartial certification body in accordance with European standards which govern the operation of this type of body. However, there is no mention of any EU directive in this Bill or any legal or mandatory obligation on us to change. I note the Minister referred to the requirements of the European Commission, yet he made no direct reference to any directive that requires the establishment of another State agency.

Two observations must be made to the claims that the change is driven from Europe. We checked the position with the European office and other agencies, but were told there is no set pattern across Europe on certifying bodies. The European Accreditation Council does not require the certifying body to be separate. All that is required under guidelines EN 45012, to which the Minister referred, is that if the certification activities are carried out by a legal entity which is part of a larger organisation, the links with other parts of that organisation should be clearly and definitively laid down.

These guidelines are voluntary standards, subject to ongoing change. The European Accreditation Council is a voluntary organisation. The Minister acknowledged that when he said that the European situation is evolving rather than having evolved. Therefore, why are voluntary codes and voluntary bodies driving the legislative schedule here? Could any necessary change not be achieved with a subsidiary of Forfás. I would go further than that. I have said on other occasions that the proliferation of agencies has reached farcical proportions. The time has come for rationalisation. The integration of Forfás back into the Department of Enterprise and Employment should be considered in consultation with the staff of Forfás, the other agencies and the Department. It does not make sense that two units are developing policy. If Forfás was integrated back into the Department, two separate policy groups could be established, one for small business and one for big business. If that was done together with staff consultations, bodies such as the NSAI could become subsidiaries of Forbairt. That would prevent a mass of new State agencies. The other technical matters handled by Forbairt could also be established as separate subsidiaries.

That way forward would be preferable to another stand-alone agency. At present, there must be 200 State agencies dealing with enterprise matters. They include Forfás, Forbairt, IDA Ireland, An Bord Tráchtála, the Crafts Council, 35 enterprise boards, 35 area partnership boards, 36 Leader groups, grant aid from 50 funds, the FÁS back-to-work scheme, social welfare payments for those who work a certain number of hours a week and Údarás na Gaeltachta schemes available to people who live in designated areas. An interesting map of a county setting out the number of agencies offering a plethora of supports and guidance to would-be business people was sent to me recently. The would-be business person who sent me that map said he was perplexed about the number and proliferation of agencies and that he would apply to all of them for fear that he might lose out.

The only group in the Forfás-Forbairt mix that may require a stand-alone structure is the Irish National Accreditation Board. From my experience as Minister for Education and taking account of the training provided by FAS, I consider this particularly relevant. It is untenable to have the NSAI and the Irish National Accreditation Board in such close quarters as that board makes decisions on standards and awards. That much smaller accreditation board could easily be established in its own right without any major cost. Has the Minister examined this proposal? He should do so as much emphasis has been placed on that in education and training circles. TEASTAS, an education-industry training body, will set standards and make awards. The National Accreditation Board, a small grouping, will decide if an ISO standard should be awarded and the standards to be attained for such awards. From an educational standards point of view, it makes sense that the accreditation board should be established in its own right. I do not make that point as a browbeating measure, but that body should be properly distanced from the other to enable it to set proper standards and ensure they are rigorously met. Will the Minister consider making the accreditation board a subsidiary of Forfás while making the NSAI a subsidiary of Forbairt? That would set a distance between the functions of accreditation and certification which should be properly distanced. Has the Minister investigated that matter with the EU? Did he establish that subsidiary status for the NSAI would not be appropriate and, if so, will he lay before the Oireachtas correspondence in that regard?

If the proposal to separate the NSAI from Forfás proceeds, what does it mean for other State agencies which have certifying bodies within them? Must they also be set up as autonomous agencies? Will all the accreditation activities be passed to new semi-State agencies? There is a danger that we will have another raft of State agencies dealing with enterprise. If that happens, and it would appear inevitable if we are to accept the logic for the establishment of the autonomous NSAI, there will be major cost implications. Already, costly and complex structures are in place with Forfás, IDA Ireland and Forbairt.

The Culliton report never envisaged such a hierarchy or that by replacing two agencies we should create three. If this proposal proceeds, we will have four and it will also spawn life in other areas. In a few months there will be more empire building. I trust that the Minister's common sense makes him aware that inherent in many proposals put forward is a strong element of empire building, not so much among the Indians as among the chiefs. When I was a Minister I remember getting files proposing developmental advances and making decisions on them. Following up the developments years later, one inevitably finds that the beneficiaries are not consumers or taxpayers but empire builders who see opportunities for their own good.

The cost of establishing the NSAI as an independent agency could be £1 million. There will be a new chief executive and support staff, extra administration costs and greater overlap with other agencies. Not all the work of the NSAI is self-financing. As part of Forfás, the NSAI has access to specialists outside its own areas. There is considerable interaction between specialists in the larger agency which will be lost if there is to be a separation.

The amendment to the motion specifically refers to staff concerns. The staff do not favour the separation of the NSAI from Forfás or the reassignment of their contracts of employment to a new State body. The result of a staff survey highlight the level of concern. In a poll answered by 77 of the 103 staff in the NSAI, 61 did not agree with the proposal to separate the NSAI's functions from Forfás, 13 favoured the change and three votes were spoiled. Of those polled, 62 said they would not willingly transfer employment from Forfás to an independent NSAI agency. Of the respondents, 70 said that staff should have a choice about transferring and 65 said that staff should have the option to return to Forfás within two years of the creation of the NSAI.

The staff also have concerns about the deterioration in staff conditions in a new agency. Their conditions already appear to be less than satisfactory. About 66 per cent of the staff are curently on contract and some of the staff have been in that position for seven years. In a smaller agency staff will have fewer promotion opportunities. The Minister of State indicated that NSAI staff will continue to be able to compete for promotional opportunities in IDA Ireland, Forbairt and Forfás. Has this been agreed with the unions in those organisations? Has management in those organisations indicated to the Minister of State how many vacancies will go to NSAI staff? It would appear most unlikely that agencies will give promotions to staff from outside their organisations. If they had such remarkable generosity of spirit, would that not cause internal industrial relations difficulties?

Section 15 gives the new authority the power to establish subsidiaries. There are already fears that contract staff may be told their jobs have been transferred to the US, for example, and they may take it or leave it. Forbairt staff are also concerned about the Bill because section 8 states that all functions related to standardisation, harmonisation or inspection invested in Forfás will only be exercised by the new authority. Technical work is carried out on assignment from Forbairt. This measure could have implications for Forbairt's technical staff. Will they become part of an autonomous agency? In principle I welcome the proposal that worker directors should be appointed to the board and that consumers should be represented on the NSAI — the Minister of State intends to propose that as an amendment.

I seek a six month delay to see if the problems can be worked out. The staff I have met seem reasonable and innovative in the solutions they have put forward. They have proposed a new format for the certification activities of the NSAI and this struck a chord with me in terms of the integrity of the accreditation process and the need for distance to be established. However, this has not been considered but has been summarily dismissed. The staff believe that the management of the NSAI are going through the motions and the deal is done. I would be surprised if the Minister of State, Deputy Rabbitte, continued to condone such industrial relations practices. The ideas behind the Bill are good. However, I propose this amendment in order that the process should be correct. While the ideas are good in theory, their development and the motives behind them need to be more thoroughly examined. That could be done in the extended period referred to in the amendment. The amendment is proposed to take into account the staff concerns and I hope many of the issues could be addressed more completely in the six-month period.

Ms Keogh

The Minister of State said he did not consider this Bill contentious. I was inclined to agree with him until I heard Deputy O'Rourke's concerns. In the context of concerns about State agencies I support the views expressed in the Culliton report. However, this Bill does not concern an agency which deals directly with jobs or investment. We are dealing with the establishment of an independent statutory body where before such an agency did not exist. I welcome the Bill from that point of view.

The establishment of the NSAI as an independent statutory body reflects a greater recognition of the need for quality management standards in Irish industry and business. A growing number of companies have received the ISO 9000 quality system standard which is a testament to the progress made. I agree with the Minister of State that the NSAI's certification service has had a dramatic impact in Ireland over the past five years. Companies have come to realise that such standard marks are not just an optional extra, rather they are a must if they hope to survive in the competitive international business environment. These standards are quoted extensively by specifiers in public and private purchasing requirements. Certification by the NSAI complies with international standards. It is recognised world wide as conveying an assurance of quality and conformity to recognised performance requirements.

The establishment of the NSAI as an independent statutory body strengthens its role in helping industry to understand and to meet the technical quality and safety requirements of European and international standards in the domestic and overseas markets. With the advent of the single market, its role in ensuring compliance with stringent European standards on the quality and safety of products should not be underestimated. With the NSAI's access to the latest information on the development of standards in more than 90 countries, it plays a key global role which will be enhanced with the new independent status.

Given the expert advice and assistance it provides to industry, it is interesting to note that the National Standards Authority does not fulfil the requirements of ISO 9000. It is by no means an exception in the public service in this regard. Any agency such as the NSAI should operate to high standards. It may prove a challenge to the new statutory authority to pursue the type of standards adopted by other companies and agencies.

The public service has quite a distance to travel in terms of quality and standards. Some semi-State companies have faced up to the challenge of achieving higher standards of service but the same cannot be said of the Civil Service and public service in general. Taxpayers will pay the Government more than £12 billion in 1996 to provide a range of public services. However, ideas of quality assurance and customer service do not feature high on the agenda of Government Departments and Offices. The National Standards Authority catalogue lists more than 1,500 Irish-based holders of the ISO 9000 standard. Less than 2 per cent of these are State organisations, despite the fact that the State employs one in four people in the workforce. This is clear statistical evidence that there is a quality management deficit in the public sector and we have paid a high price as a result. If the Blood Transfusion Service Board had operated a quality management system, would the horrendous problems that arose with regard to hepatitis C have occurred? One must only consider the plight of the hundreds of women who contracted this disease to assess the scale of those deficiencies.

ISO certificates are held by semi-State companies such as Aer Lingus, Aer Rianta, Bord na Móna, the ESB and Telecom Éireann. In many cases the certificates only cover certain aspects of the companies' operations. When some agencies proudly state they have achieved a standard, they may only be referring to certain divisions of their organisations having achieved a standard. It is not acceptable that more than 90 per cent of public servants work in organisations which have not attained a recognised international quality standard. It is vital that political pressure be exerted to ensure that this quality deficit disappears.

A major opportunity to tackle this problem was presented in the form of the strategic management initiative launched by the Government last week. A specific time frame should be set to achieve these standards. Perhaps the year 2000 might be the deadline for change. Alternatively, the Government could develop a quality regime along the lines of the citizens' charter recently implemented in the United Kingdom. In Northern Ireland, the passengers' charter sets out standards to which Northern Ireland Railways must operate in punctuality, reliability, cleanliness, etc.

Irish people may not be aware of increasing international pressure for high quality standards and standards of excellence. There are two ways in which the benefits of setting a standard may be seen. Companies will have objective measures against which they can benchmark their activities and performance. This is increasingly important in global markets, particularly for Irish companies dealing with their counterparts in the United States where "benchmarking" is a buzz word. The Irish standard has been set for the past five years and this provides enormous help to companies attempting to do business abroad against the odds. It also gives customers and consumers a certainty so that consumers of a service can see that there is an objective measurement of a company with which they wish to do business, which is extremely important.

One of the difficulties experienced by Irish exporters is in reassuring prospective customers. Irish companies entering foreign markets will be questioned about their identities and required to give assurance in relation to the service or product on offer. It is important that there be some way to provide a benchmark. This is where quality marks and the ISO come in. They provide comfort and reassurance to receivers of a service or purchasers of a product. This gives an extra lever to Irish business.

On funding I understand the basic cost of establishing the new statutory agency will be £1 million but it is expected that the agency will be self-financing to a large extent. It is important that the service provided by this agency be competitively priced so that companies will be attracted and will feel it is something they must actively pursue and which is very worthwhile.

I recognise the concerns expressed by staff with regard to the establishment of a separate agency. Those concerns must be addressed. However, in terms of quality, there must be seen to be autonomy within such an organisation. I welcome the statement of the Minister of State that it is intended to have a worker-director on the board. This may go some way toward allaying the fears of the people already involved. It should be possible to ensure that the new agency is established within a specified time frame as it is a necessary development. I cannot emphasise enough how important it is that the agency be seen to be independent and autonomous.

Mr. S. Ryan

I welcome the opportunity to contribute to the Second Stage debate on the National Standards Authority of Ireland Bill. Its purpose is to enable the Minister for Enterprise and Employment to provide for the establishment of the NSAI as an independent statutory body and to transfer to it from Forfás those functions relating to standards and certification.

The NSAI dates back to the Industrial Research and Standards Act, 1961. Since then it has operated as a division of the IIRS and Eolas. Most recently the NSAI operated as a division of Forfás when that body was established by the Industrial Development Act, 1993. The NSAI develops and publishes national standards and provides a comprehensive management system and certification service for industry and commence. In the environmental area, the NSAI work programme is based on its environmental standards consultative committee — the ESCC — which was established in 1992 to bring together all interested parties concerned with the development of environmental standards. The work of this committee resulted in the publication of a specific standard for environmental management systems IS 310 in 1994. ISO 310 provides manufacturers with a certifiable environmental standard similar to ISO 9000 in the area of quality management systems to cover the increasingly important area of environmental management. It is expected that ISO 310 will be replaced by a new ISO standard to give industrial firms here access to a recognised world standard. With the exception of the British standard, in the past the IIRS and Eolas had little or no competition in this country. We live and operate in a global economy and at least three companies are now competing for this kind of work. I am satisfied that the necessary commitment is available among the staff of Forfás to meet this competition. However, an assurance must be given that the legislation we put in place will improve the position and will not impede their ability to compete.

Since we joined the European Union, with its emphasis on a common market for goods and services, the NSAI and its staff have played a significant role in ensuring that we have the necessary new standards to support this movement and meet Ireland's needs. The NSAI also provides a certification service for manufacturing service companies which demonstrate that the product-service they provide meets the published standards. It is important to point out that the certification service has certified more than 1,400 companies to the quality assurance systems standard ISO 9000 and that Ireland ranks among the top three countries in the world in terms of the number of companies certified to this standard. Given the size of our industrial base this is a significant achievement.

The staff of Forfás have asked why this change is necessary. When the then Minister with responsibility for science and technology, Deputy Brennan, announced in February 1994 his intention to set up the NSAI as an autonomous semi-State body the staff considererd this move to be ill-advised as it would add substantially to the cost of the operation without adding to its effectiveness. It is claimed that this move is necessary to ensure that the NSAI can operate as an impartial certification body in accordance with European standards governing the operation of this type of body, for example, the EN 45012. I have been informed by the staff that the European Accreditation Council has published guidelines on the application of EN 45012 which makes specific allowances for the certifying body to be part of a larger organisation with the following qualifications: "If the certification activities are carried out by a legal entity which is part of a larger organisation the link with the other part of the operation should be clearly laid down. Relevant information on activities performed by the other part of the organisation should be given by the certification body." The 1993 Act under which it was established permits Forfás to set up the NSAI as a certifying body with clearly laid down links so as to preserve its impartiality. It has been suggested that the Irish National Accreditation Board should be made independent of Forfás and perhaps set up under the Department of Enterprise and Employment. I ask the Minister to respond to these points in his reply.

The justification for the setting up of the new body as outlined in the Bill poses questions regarding another division of Forfás, Forbairt. The main focus of Forbairt is to support companies through a wide-ranging series of activities, including education, promotion, research, consultancy and standards. Will the new structure not give rise to a similar situation for Forbairt, some of whose sections include accreditation activities such as metrology, the National Laboratory and the National Electrical Test Centre? Will it be necessary for these sections to be independent of Forfás and will this require the introduction of legislation similar to that before us today?

The NSAI staff have a vested interest in these proposals as it is they who have built up the organisation to what it is today. The organisation is held in high esteem at European and international level. Section 38 (1) states:

The Authority shall accept into its employment with effect from the establishment day, in accordance with the terms of this Act, every person who immediately before that day was a member of the staff of Forfás and whose principal duties relate to a function vested in the Authority under this Act.

Section 38 (2) states:

The terms and conditions relating to tenure which are granted by the Authority in relation to a person accepted into its employment under subsection (1) shall not, while the person is in the employment of the Authority, be less favourable to the person than those prevailing immediately before that person's acceptance into such employment save in accordance with a collective agreement negotiated with any recognised trade unions or staff associations concerned; and if a dispute arises between the Authority and any such person as to the terms and conditions prevailing immediately before that acceptance into the employment of the Authority, the matter shall be determined by the Minister for Finance after consultation with the Minister.

I welcome this section which preserves the existing conditions of employment but I wish to address the increasing use of part-time and contract workers by Forfás. This is a major issue as contract workers have no pension rights and find it difficult to secure mortgages. It is estimated that the ratio of contract to permanent staff in the certification and inspection department of the NSAI is 3:1. As a Labour Deputy I am deeply concerned about these figures not only as regards Forfás but also in the context of the developing trend nationwide to employ contract staff. Such casualisation of a work force would not be tolerated by the IDA in securing a potential employer. I understand it has been the policy of the personnel section in Forfás to review the posts of contract workers in Forbairt and its other agencies after a two-year period. In the past such positions were made permanent but recently a contract employee received his third contract. There are 43 contract employees in the NSAI and this does not include nine SIPTU clerical workers who are also engaged on contract work.

Debate adjourned.