Vol. 510 No. 2
9 Proinsias De Rossa asked the Tánaiste and Minister for Enterprise, Trade and Employment the plans, if any, she has to amend the Companies Act, 1990, to bring reports or materials obtained under sections 19 or 20 of the Act within the terms of the Freedom of Information Act, 1997, as sought by the Information Commissioner in a submission made by him to the Joint Committee on Finance and General Affairs; and if she will make a statement on the matter. [21988/99]
We do not intend to amend section 21 of the Companies Act, 1990, to permit the Information Commissioner to disclose confidential company information gathered under sections 19 or 20 of the Act. This matter was discussed at length by the House yesterday during the course of the Report Stage debate on the Companies (Amendment) (No. 2) Bill, 1999. As I explained then, our experience with the operation of section 19 examinations is that a wide prohibition on disclosure of information, relating to company books and documents is necessary in order that the company and its officers can be assured that the information gathered will have a high degree of protection from public disclosure.
If that assurance cannot be offered by our Department, the company concerned may well decide to resist the conduct of the examination either through the courts or otherwise. In particular, if a public interest test were to determine whether information were to be disclosed, every company, the subject of examination, would believe or would choose to argue that publication of its affairs would be the inevitable outcome of being subject to a section 19 examination.
Such a lack of co-operation by companies and their officers would entirely defeat the process of preliminary examination envisaged in section 19. It would also be counterproductive to the public interest of seeking to uncover corporate malpractice and of applying, in due course, the rigours of the law to those found to be in breach.
It is already our experience that the secrecy provision in section 21 is not enough to avoid recourse to the courts. Two companies have already gone to great lengths to question, in recent High Court proceedings, our bona fides in regard to compliance with the statutory duties of confidentiality imposed on us by this section. They are also seeking to argue before the Supreme Court that the existing ministerial powers, tight and all as they are, are unconstitutional, because they fail, inter alia, to have proper regard to a company's right to confidentiality and/or privacy. Our Supreme Court defence, which will uphold the value of the confidential preliminary examination would be damaged by accepting any amendment which would permit public disclosure of information relating to a company's affairs.
Does the Minister of State accept that it is to entirely misrepresent the Information Commissioner to present him as being required to put this information into the public domain? Is it not the case that the commissioner recommended that matters of privacy or issues of prejudice to investigations should be adjudicated by him? He is not suggesting that information should be automatically released into the public domain, rather, that ultimately he should be charged with deciding whether a case's merits warranted that. Does the Minister accept that the Information Commissioner is an independent office and that the commissioner would only be likely to respond responsibly?
I fully accept that the commissioner holds an independent office and is a man of the utmost integrity, as was his predecessor. We are dealing with serious matters here and one cannot judge the gravity of any investigation until such time as a preliminary investigation is concluded. An adjudication must then be made of what subsequent steps will be taken. From our experience of these inquiries over time, it is our opinion that the structure and system which exists is effective, inexpensive and in the best interests of ensuring the co-operation of the corporate sector in regard to investigations. In view of new legislative proposals which will result in the appointment of a director of corporate enforcement, we believe this is the road to go and that, in order to protect the integrity of the operations which exist, it is preferable to ensure the existence of an inexpensive system of initiating investigations.
Can I take it from that that the Minister of State, the Minister and their Department are ruling out the freedom of information implications advanced by the Information Commissioner?
This is not a normal freedom of information situation. The Information Commissioner has a specific legal brief to inquire into certain matters and to assist with the availability of information to the public at large. We are talking here about internal company investigations which are matters of grave seriousness. The system which exists is an effective one and we are confident that the proposals outlined represent the right way to proceed.
Would the Minister consider imposing a timescale on preliminary investigations which, I understand, are currently open-ended? Following the inquiry, as assessment could be made in regard to publication. It appears that huge powers are currently available under the Freedom of Information Act. If fraud is found after an initial inquiry into a company, a timescale should be put on the inquiry in the interests of those who are unaware of it.
It would be wonderful if we could put a timescale on an inquiry. We have to accept the judgment of the authorised officer or the inspector appointed to do a particular job. However, companies vary in size and have different types of operations, accounting systems, procedures and management structures. It is not possible to say an inquiry should be completed in a week, three weeks or three months. It depends on the company, its co-operation, attitude, ethics and so on. At the end of the day, that is what will decide the length of the inquiry. Once an inquiry is initiated, it is vital that it is not concluded until the maximum information is made available to the Department.
