On a procedural point, from where did the idea come to divide the time between Committee and Report Stages? I did not see anything in the order and certainly did not agree anything with the other Whips on it.
Irish National Petroleum Corporation Limited Bill, 2001: Report and Final Stages.
Acting Chairman
I understand it was agreed yesterday.
(Dublin West): On a point of order – a point of explanation, if one likes – the way in which this Bill is being rushed through the House is quite outrageous and does not allow for a proper explanation. The Whips of the Labour Party and Fine Gael agreed to this yesterday and now do not even know to what they agreed.
Acting Chairman
We are just obeying an order of the House. Amendment No. 1 is in the names of Deputies Stanton and Higgins.
I move amendment No. 1:
In page 3, line 12, after "SUBSIDIARIES" to insert "AND TO PROVIDE THAT THE MINISTER MAY GUARANTEE CERTAIN OBLIGATIONS OF THE CORPORATION, PURSUANT TO THE SALE AND PURCHASE AGREEMENT".
I understand I may only speak once at this time.
Acting Chairman
The Deputy will have a second chance.
I thank the Chair. That is very useful. I am a little annoyed that all this is happening in one go, Second, Committee and Report Stages. It is not the best way to deal with legislation.
A number of Deputies have alluded to the fact that a sale and purchase agreement has actually been entered into and that the purpose of this legislation, as I said on Committee Stage, is to put it into effect. We have not seen this agreement. Tonight and last night and in the joint committee certain issues have come to our notice of which we were not previously aware. There may be others about which we do not know. As Deputies and public representatives, we should know about them.
This amendment seeks to change the Title of the Bill to give equal weight to what the Minister and we are doing to provide that the Minister may guarantee certain obligations of the corporation pursuant to the sale and purchase agreement. The Minister has alluded to the fact that some of them go on forever. We are tying the State into obligations that will last saecula saeculorum . Perhaps further legislation will be drafted in years to come in order to change this. As matters stand tonight, that is the situation. I wanted to draw attention to this by putting it in the Title and saying to the Minister that we should have seen the sale and purchase agreement on which we should have been briefed in greater detail. I do not say this to be critical but rather by way of information because in some ways the House is becoming a rubber-stamp. More time is needed for critical examination and comment. This amendment would not change the content of the Bill in any way or make any major difference to it, except to highlight this particular situation.
I accept the amendment.
Amendment agreed to.
Acting Chairman
Amendments Nos. 2, 9, 10 and 11 are related and may be discussed together.
I move amendment No. 2:
In page 3, between lines 23 and 24, to insert the following:
"‘current market prices' means the current price at which the product is offered by a refining company to a customer and is based on an appropriate international index for the calculation of petroleum product prices;".
We discussed this amendment on Committee Stage when we thrashed it out in detail. It has to do with smaller companies. There are two reasons the mandatory regime was imposed. One was that when the major companies decided that they were going to walk away and not purchase, the Government of the time had to compel them to purchase in order to keep the refinery going. The second was to raise funds in order to subsidise, for want of a better word, the operation of the refinery. If the major companies were to decide to do the same thing again, to bypass the refinery and not purchase from it under this new regime, where would that leave it? What could the Government do to keep it in operation? If a new owner was to decide that there were no customers for the product, where would that leave the refinery? I am sure the Government has addressed this question but it is one I would like to see addressed. The smaller companies would be very vulnerable if that turned out to be the case. There are facilities at Whitegate, including a very valuable road loading facility which means that ships can come inshore and the product can be distributed through the refinery into tankers. It is a very important facility which – the Minister can correct me if I am wrong – could be unique. It is a sort of monopoly and very valuable. Would companies continue to use it in the future?
I remember being responsible for the INPC in the brief I held in the Department. I remember agreeing to provide funding to extend the road loading facilities at the request of the companies which were buying the product. It is not a case of a product coming from a ship to this facility, it is to pipe the facility from the large tanks. Lorries can drive in and load from it. It is from the product created by the manufacture of oil and petrol by the refinery itself. It comes directly from ships. My understanding is that what comes from ships is crude which is refined.
The amendments tabled are those we discussed on Committee Stage. The comments made then appertain now, that is, that it would be a commercial operation and would seek to operate commercially, to make money and to provide a service if it was viable to do so. The Deputy asked what happens if it does not deal with a particular company. The normal rules of commerce and trade would apply in such instances. Deputy Stanton asked also in the event that Tosco refused to deal with a particular company if the State would have any say on what on it should do. The State would not have any say in that because it would have become a fully commercial company.
I am taking a second bite at this. In regard to large companies deciding to bypass the refinery, the Minister said this has happened in the past where they decided not to purchase from Whitegate.
That has changed.
Perhaps at the time price was an issue. Deputy O'Malley said tonight that he had some falling out at the time. I am not sure what happened.
To which he contributed himself. That is what he said.
Exactly. If after the sale Tosco decide not to purchase, where does that leave the refinery? Could it be downgraded? In that case the smaller companies which are purchasing from the refinery would not have anywhere to source their product. With fewer companies in the market competition could be affected.
Tosco's purpose is to make money and not to run down the facility. If it is operate commercially and economically it will do the business. In a market economy that is the regime in which we live. I am sure it will want to do the business and will want to deal with the firms in question or any others that come on stream. I can give no other answer because that is the actual position. There are rules of competition here as well as rules of commerce and business and consumer protection, all of which are law so that people would have recourse to directives and legislation.
(Dublin West): What would happen if it decided it was not making enough profit?
Close down.
We are living in the real world, the commercial world.
The Minister has not addressed the issue of the major companies deciding, as they did in the past, not to take product from the refinery. The four major companies mentioned – Esso, Texaco, Statoil—
It is a probability.
It is a possibility and I understand it happened in the past. Where stands the refinery in that case? Is the Minister saying it would be Tosco's problem?
We have the National Oil Reserves Agency. Tosco is a commercial operation. There is no further answer I can give. The State would not have a role in it. However the State does have a role in keeping strategic stocks. That is the reason NORA is being kept as a stand alone or joined up semi-State company so that the country can be assured of having strategic stocks.
It is highly unlikely that the major companies will continue to buy from this refinery. Tosco is a large distributor and I presume it will have its own distribution system. There are a large number of small users that the refinery will continue to suit. It does not suit the larger companies and they are unlikely to use it when the mandatory regime goes.
Amendment, by leave, withdrawn.
Amendment No. 3 not moved.
Acting Chairman
Amendments Nos. 4, 5 and 6 are related and may be discussed together by agreement.
I move amendment No. 4:
In page 6, line 10, to delete "Subject to paragraph (b), the” and substitute “The”.
This amendment relates to the matter we were discussing when we were stopped on Committee Stage. It is about the guarantee for the future. We were anxious that a time limit would be put on it where the State was concerned. It has been mentioned on a number of occasions that the State will be responsible for the jetty in saecula saeculorum. Why is that the case? We were in the middle of getting an explanation from the Minister on what exactly the environmental problems would be at Whitegate. The Minister mentioned, if I recall correctly, that the purpose of Auto Oil I and II was to upgrade the refinery. My understanding is that this particular environmental guarantee that the State is entering into relates to events that occurred prior to the takeover of the refinery by Tosco and anything that happens from now on such as the Auto Oil II project will be Tosco's problem. What exactly are the problems covered by this guarantee? Will the Minister be specific about it? With all due respect, to say it is environmental problems is vague.
The environmental problems are the normal problems associated with a refinery. I would not have the precise knowledge but I know enough, as would the Deputy who comes from the area, to know that there would always be environmental concerns wherever there had been or continues to be an oil refinery. It is to the credit of INPC that it has managed the environment extraordinarily well and that the concerns of residents and those who work in the industry have been well met and managed. By its nature an oil refinery could have environmental hazards associated with it which are not yet apparent. If and when they become apparent the State is liable for the amelioration of those hazards prior to the date of purchase and sale. If those hazards can be shown to have been couched in a prior time Tosco would be liable for them.
That is extremely clear. We know exactly what the Minister is talking about but we still have not got a specific description of what any one of these hazards might be. I will not go any further with it but it is unsatisfactory that the Minister says what any one of these things might be and yet the State is asked to guarantee up to $75 million. As Deputy Stagg asked, why is the figure in dollars?
It might not be used and might not be needed. The hazards might not materialise but the very nature of the business should show that.
The chairman advises me that it will take out a capping insurance that will render it liable to a certain amount. We are taking the extreme view in this. Those hazards may not come to pass.
The Minister said earlier that tests were carried out to determine these hazards. Is $75 million plucked from the air?
No it is not plucked from the air.
We are all conscious of the exchange rate. Where did the $75 million come from?
It came from the advisers who in turn hired professional people such as surveyors and environmental experts. They came up with that figure. However, that figure may not be used. I remember answering a question from Deputy Stanton last October and I told him that the environment was the major issue and that we were determined that the environment would be addressed correctly because this will affect the whole neighbourhood and the people for generations. It is only right that it be properly provided for.
May I speak?
How many contributions did you make, Deputy Stagg?
None on this amendment.
You are entitled to make a contribution, but the Minister is not entitled to reply. The Minister has made three contributions already.
I am only helping the Minister, as Deputy Joe Higgins said earlier.
(Dublin West): There is anarchy in here, not just in the economic policy but in the running of the Dáil.
The Deputy might even get us closer to that at some time in the future. There is a good reason to have an insurance policy of a certain amount of money such as this. There are rules of thumb for arriving at it for old sites that might have a hidden environmental problem that might not be immediately apparent. For example the site where the old gasometer was in Dublin was found to be peppered with mercury from the operation of the gasometer. There was a huge environmental cost arising from the need to seal that site. That was not apparent until they dug up that site. I presume this is there, given that this is an old site that has been operating for a long time. I have a painting in my office of the site before there was a refinery there at all. It was painted by the daughter of the previous owner and there was a lovely house on it.
Amendment, by leave, withdrawn.
Amendments Nos. 5 and 6 not moved.
I move amendment No. 7:
In page 6, between lines 28 and 29, to insert the following:
"(5) The corporation shall, with the consent of the Minister, enter into an agreement with an insurance company in order to insure against the environmental risks covered by the guarantee.".
This has been mentioned on a number of occasions. The $75 million is an insurance against anything that might happen in the future. What we are looking for here is for the State to be insured. The Minister said last night that an insurance policy could be taken out. This amendment just puts into the legislation what the Minister has already said should apply. It helps to cover the State against this environmental risk that could occur.
When the chairman came to see me some weeks ago, we spoke about this and he was seeking the best deals available in such a policy from various insurance companies, including Coyles and others. He told me on the telephone this morning that he thought he had sourced such an advantageous insurance deal. The intent of this amendment is in line with what the company plans to do. We need to check the wording of this amendment, but we accept it in principle.
We need the exact wording.
I am sure the corporation will do as it says, but it would be useful to have it in the legislation just to assist the corporation in what it is doing and to ensure that it does happen. Perhaps the amendment could be accepted now and further amended in the Seanad if necessary.
If it is amended in the Seanad, it has to come back here again and that is the difficulty because there may not be time for that.
I can understand the difficulty about it having to come back from the Seanad. If the Minister is saying she accepts the principle and the thrust of the amendment as drafted, then I will be happy if she undertakes to suggest this amendment in the Seanad.
It would then need to come back here.
That shows the real problem with telescoping legislation. This would have been a very useful guarantee to put in. I do not see anything wrong with it.
Amendments must be checked legally.
Why not let it come back in here again?
I do not know if that would be possible time-wise.
It is a pity the Minister agrees with this important and useful amendment, but because of the legislative programme and the way we have gone about our business we cannot deal with it. If this was a vital amendment, we would be in trouble. With all due respect, this shows the farce of having Second Stage, Committee Stage and Report Stage taken together. That should not happen.
When I was in opposition I dealt with Irish Steel in one hour, as I was told to do. We have given this matter every attention. The chairman told me four weeks ago that this was his intention and this morning he informed me that the company had sourced a good insurance arrangement. That is the word from the chairman which, in good faith, I am putting on the record of the House.
Is the amendment being pressed?
I expect the Minister will report in the Seanad on any progress.
Yes, I can certainly do that.
On that basis, I am not pressing the amendment.
Amendment, by leave, withdrawn.
NEW SECTIONS.
I move amendment No. 8:
In page 7, between lines 16 and 17, to insert the following new section:
"8.–The purchaser shall provide to third parties, on a non discriminatory basis and on reasonable commercial terms, jetty facilities at Whitegate and Whiddy Island in so far as such facilities are not reasonably needed for the purchaser's activities at any time.".
I am informed that this is important because of the monopoly situation in regard to the road loading and jetty facilities in Whitegate in the absence of any other similar facility in the country. This facility is currently controlled by a semi-State company. I understand that it is possible to bring in refined product, although I am not totally sure of that. Perhaps the Minister will comment.
The use of the facilities at Whiddy is very important for local people. As the Minister is aware, a ferry was purchased with a view to facilitating local people travelling to and from the island. A small pier was also provided to facilitate the loading of cattle onto the boat owned by the terminal. I am, of course, referring to Whiddy rather than Whitegate. This may be a small part of the agreement but it is very important to local people. Quite a head of steam built up on the issue at one stage and the then chief executive, Fergus Cahill, resolved it by providing the ferry to which I have referred.
My difficulty with amendment No. 8 is that it would tie the hands of the incoming operator. One can assume that if an incoming company wants to remain on good terms with its neighbours, it would deal with them reasonably in relation to the existing facilities. However, I would not like to tie the company's hands in advance of the deal.
I understand there are some families living on Whiddy and there are other issues involved. At other locations where property has been purchased between the foreshore and the public road, new owners have sometimes restricted access to beaches and the foreshore. Similar issues may arise in the situation we are discussing, but in the absence of sight of the purchase and sale agreement, we are not sure what it contains. Those are important issues for people living in Whiddy and for current commercial users of both jetties and terminals. Can the Minister do anything about this, or has the issue been considered? I understand the Minister's comment that we cannot tie the hands of the new owners, but can we exclude people or are there rights of way for residents? Is there a possibility of a long legal wrangle on this issue? I am simply looking at the worst case scenario.
With regard to the jetty and road loading facilities at Whitegate, my amendment would allow third parties to use them on reasonable commercial terms. I am conscious of the possibility that people from Tosco and others are watching and noting what we are saying. I take the Minister's point that the new owners will want to be good neighbours, as INPC has been for a long time. I am not sure of the best way to proceed. I understand the need to avoid tying the hands of a new owner through this legislation but, at the same time, there are issues which the Minister may have to revisit. There is merit in dealing with this kind of issue in Committee in the Dáil. Perhaps we should make more use of committees to tease out such issues.
Deputy Joe Higgins, before the Minister replies.
The Chair seems determined to stop me from speaking.
(Dublin West): Standing Orders. The Minister now has some idea of what it feels like for those of us to whom the Taoiseach denied the right to speak on the Gothenburg Summit.
I believe the Government should accept amendment No. 8 in the names of Deputy Stanton and Deputy Jim Higgins. I am really amazed at the depth of generosity with which the Government feels that this multinational company can be credited. I wonder why the Minister is extending all the latitude to the oil corporation purchaser and not to the local people. She does not want to tie the hands of Tosco Corporation and therefore she is prepared to leave the local people to the vagaries of what Tosco may or may not decide in that regard. The residents who need those facilities should have their access guaranteed. Once they are controlled by Tosco Corporation, if this shameful deal goes through, the local people will be at a disadvantage. If Tosco decides not to be generous, all the nice words from the Minister, or from anybody else, are worth nothing.
This is not a hostile take-over bid. This firm is coming in to do business in this neighbourhood. The idea that it would not want to be on good neighbour terms with the people who work with it, and whose families live in the locality, is very farfetched. I do not believe that will happen. I do not have the right to tie an incoming firm's hands as to how they should deal with other firms or with their neighbours.
(Dublin West): What did the Minister say to ISPAT?
I did not deal with ISPAT.
(Dublin West): They came in on the same basis.
The future of the INPC facilities is far more assured now than it was under the mandatory regime, which was a yearly event and was subject to vagaries of whatever Government or Minister or regime was in place. It had no certainty beyond the year-on-year roll on, which itself had no certainty. There is now a far better opportunity for those who will work with the new firm. The employees will have a guarantee of employment. The INPC gave sterling service to the neighbourhood and its employees. It worked with might and main to bring its refinery up to decent standards. It had very good accommo dation and access for its neighbours and the families who live nearby. The atmosphere was one of good work, cordiality and good relationships. That will continue because the same people will be running the company and working in it.
(Dublin West): The same people will not run the company. A multinational corporation will run it.
I am almost certain what the Minister said is true, but there have been a number of cases where this has not happened and where people have purchased property and others have been excluded. Will the Minister have another look at this to see if there are people who are affected and to see if they can be helped in some way. Maybe she could bring it up with the new owners.
Amendment, by leave, withdrawn.
Amendments Nos. 9 to 11, inclusive, not moved.
I move amendment No. 12:
In page 7, between lines 41 and 42, to insert the following new section:
"12.–(1) In the event that the purchaser or a future owner deciding to cease the refining of oil products at the Whitegate Oil Refinery then the owner at that time will offer to the State the full control and ownership of the facility.
(2) With reference to subsection (1) if the Minister declines an offer made then the owner will, within 12 months, work to revert the site to a green field situation to the satisfaction of the Minister.
If the new owner, or any owner in the future, decides to close the refinery and not to continue using it as an oil refinery, two things could happen. For the past number of years the oil refinery has been quite an important strategic facility for the State. If an owner decided to close the refinery, as happened a number of years ago, there should be some provision where the State would have the option to regain control and ownership of the facility. Suppose the majors, as Deputy Stagg said, decided not to take refined products from the refinery and the small companies were not around, we would be in trouble if the oil refinery was to close. If this happened in the future – we hope it never happens – there should be provision in the legislation where the company would turn the whole shooting match over to the State.
The second part of the amendment relates to a situation where the Minister declines to take it on board because we no longer need it and have some form of solar, bio or other energy that we can use instead—
Hot air.
The Minister knows a great deal about hot air but I would not know much about that. If the Minister decides to decline the offer made by the owner, the owner would return it to a green field site and the whole refinery would be dismantled and cleaned up. I understand that provision is in place in similar facilities. If the company walks away, rather than have the State come in and clean it up, the onus would be on the owner to close it down, dismantle it and return it to a green field site.
We are at a disadvantage in so far as we do not know what is in the heads of the agreement. Does the Minister know if the two items covered in this amendment are included in the heads of the agreement?
(Dublin West): I would like to know if the agreement will come before Dáil Éireann for approval in the event of this legislation being passed. Will the Minister tell us that? In regard to the secret agreement with Tosco Oil, it is quite outrageous that the supposed representatives of the people do not know under what conditions it has been agreed to dispose of this vital facility to a multinational corporation. We are supposed to agree that the legislation be put through the House. I agree with amendment No. 12. It is quite clear the Government, in the event of the multinationals deciding to go to more profitable fields elsewhere because their plans and strategy change, should have the possibility of having control over what is an important resource. We hope in the future energy will move on to much cleaner and more environmentally friendly means than oil but, nevertheless, at this time, the economy and society are quite dependent on oil. What the Government is doing is quite reckless and the main Opposition parties are agreeing with it to give complete control of this vital section of the economy to a multinational. When will the secret deal be revealed and must it come before the Dáil for approval?
There is no secret deal. I strongly resent what Deputy Higgins has said.
(Dublin West): Which—
Let me speak. Nobody ever interrupts Deputy Higgins.
(Dublin West): What does the Minister strongly resent?
The chairman and the chief executive officer of the company and the Secretary General of and officials from the Department went to a public Oireachtas committee. Is that correct?
Yes.
It was a committee to which anybody, or all parties could go if one was an elected Member. They gave chapter and verse in so far as they could without upsetting the commercial privacy which at this point appertains. Regarding the idea that this was done behind closed doors, everybody at that committee was free to ask questions, and I presume they did. Everybody was free to ask questions during this Dáil debate. This was not a secret deal done behind closed doors. There are commercial matters and we will open a data room and all the matters connected with this sale will be available for anybody to see. The Bill to authorise the sale of INPC to Tosco is that which we are discussing, and have discussed since 7 o'clock this evening. The idea that people disappeared into a room and closed the door is not correct. The employees were very much involved and they came to see me in February. They had also been in early in the autumn. In February, they asked for much more precise information. We telephoned the chief executive officer and chairman and asked that they receive as much information as possible, and they did.
In regard to amendment No. 12, Tosco has agreed to 15 years. It would not be legally possible for me to place that condition upon the sale, that is, that I would ask the company to give the refinery back to the State. Is that what the Deputy is asking?
Yes.
The full control and ownership of the facility.
Minister, your time has concluded. As it is now 10 p.m. I am required to put the following question in accordance with an order of the Dáil of this day: "That the Fourth Stage is hereby completed and the Bill is hereby passed."
Question put and declared carried.