Dáil Éireann debate -
Tuesday, 21 Apr 1998

Vol. 489 No. 6

Adjournment Debate. - Coillte Acquisition.

Mr. U. Burke

Under legislation Coillte is mandated to carry out the business of forestry and related activities on a commercial basis. This is its primary objective. The Minister for Enterprise, Trade and Employment has recently decided to prevent Coillte buying 80 per cent of Balcas, a sawmilling firm in Enniskillen with interests in counties Leitrim and Kildare. I tabled this matter before the Easter recess but the Minister made her decision on 9 April. I had hoped to speak on the matter before she had done so but I can now only make a statement in the context of her prohibition of that purchase. This I regret as much as her decision.

The interests of Irish forestry and the economic interests of the country would have been better served if Coillte had been allowed to proceed with the purchase. From replies to questions addressed to the Minister for the Marine and Natural Resources, Deputy Woods, I understand that the policy document "Growing for the Future" is still the statement of Government policy on forestry. The Minister of State, Deputy Byrne, also indicated this in a recent advertisement placed in the weekend newspapers. That document was a considered evaluation of all factors relevant to forestry and it supported Coillte's involvement in sawmilling. It also refers to the need to develop export markets for timber. If that is Government policy as communicated to Coillte, how is it that at the first opportunity when the company proposed to involve itself in sawmilling the Minister decided it is not good to do so?

The Competition Authority decided in a majority report that there were aspects of Coillte's sales systems which concerned it. A new sales system, which was advocated by "Growing for the Future" with the involvement of the Irish Timber Council, was referred to the Competition Authority in September last. It has not yet been considered. Surely something is wrong. The Government had approved Coillte's purchase of Balcas last December and suggested that some amendments be made to the sales system to take account of the concerns of the existing sawmillers. The Minister did not consider any such amendments and she was not bound by the Competition Authority. I cannot understand it.

Balcas is involved in exporting sawn timber to the UK — the very business that Government policy considers essential for the future of Irish forestry. I heard the Minister say on radio that she did not think it good for the sawmillers. She has changed Government policy and decided that the taxpayers are less important than a small group of sawmillers. I understand that almost £1 billion in public funds has been invested in forestry over the past 80 years. The entire value of the sawmilling sector is no more than £25 million, yet it calls the tune. It is wrong.

How did the Minister arrive at her decision? Where does Government policy on forestry stand now? It is ironic that today the House has debated the North-South institutions and cross-Border co-operation, but the Minister has turned down this cross-Border link. This is an embarrassment for the Government. The legislation under which Coillte was established has been turned on its head. The commercial directives given to it have been withdrawn. The Minister has prevented the expansion of this company and it cannot now diversify into its natural activity. The Irish Timber Council has won out. A vibrant commercial semi-State company has been sacrificed and told to stick to its knitting.

Coillte must be allowed to develop. It has the capacity to contribute to the national economy and its future development could contribute to improved prosperity in poorer regions. Political expediency seems to have been more important to the Minister than regional prosperity.

Tánaiste and Minister for Enterprise, Trade and Employment (Miss Harney)

I am astonished at the Deputy's comments. He seeks to have me expedite my decision yet I made my decision on 9 April. He tells us that he heard my comments on the radio so he should have been aware that I have made my decision. That decision was made on the basis of competition policy. The Government decided to approve the Coillte proposal to take over Balcas, subject to its being referred to the Competition Authority. I referred it to the Competition Authority which reported to me on 6 March. Its majority report indicated that Coillte was in a dominant position and that there was a danger it could abuse that dominant position.

As the only supplier of timber in the country Coillte is in a dominant position and it is in the interests of the economy that we have competition throughout it. It would not have been right if the State company in a dominant position was allowed to acquire Balcas. This has nothing to do with North-South relations. It is not an all-island issue, it is a competition policy issue. I took the advice of the expert authority appointed to look at competition issues, an authority strengthened by my predecessor, Deputy Richard Bruton. I considered carefully the advice given and I consulted the affected parties and the Minister for the Marine and Natural Resources.

It is regrettable that the Deputy considers that I have asked Coillte to "return to its knitting". I have done no such thing. I salute the management and board and the direction that Coillte has taken in many respects.

As Minister for Enterprise, Trade and Employment, I have wider responsibilities to ensure that, as far possible and subject to my powers, competition exists in the Irish economy. In the context of our forthcoming entry to EMU — when this country will have relatively few weapons left to influence interest rates and other matters — one way we can control inflation is by competition. Competition brings about change faster than anything else. It is good for business, for commerce, for keeping inflation low and for the economy. Taking account of the advice from the Competition Authority I decided to accept its three to one majority recommendation and I announced my decision on 9 April.