Dáil Éireann debate -
Wednesday, 12 Dec 2001

Vol. 546 No. 4

Air Navigation and Transport (Indemnities) Bill, 2001: Report and Final Stages.

Mr. Higgins

(Mayo): I move amendment No. 1:

In page 4, line 21, to delete "making" and substitute "commencement".

This matter was vigorously debated on Committee Stage by my colleague, Deputy Stanton, and, therefore, I will not delay the House. I know the Minister is anxious to attend this evening's party and also to introduce the Bill in the Seanad. I am reluctant to stand in the way of either ambition.

The consequences of 11 September are so enormous, all-embracing and far-reaching that, this evening alone, the House has debated motions on extradition and combating terrorism and is now dealing with this Bill which is designed to provide indemnity in relation to insurance claims for airlines and aviation services. The matter in question here is when the order will come into effect. On Committee Stage, Deputy Stanton argued vigorously in favour of substituting the word "commencement" for "making". I accept that the Transport Council and ECOFIN have authorised the scheme until March and I know the word "making" provides retrospection for a period of six months. I will not press the amendment, I merely wish to hear the Minister's reply.

Minister for Public Enterprise (Mrs. O'Rourke)

I thank Deputy Jim Higgins for his implied co-operation this evening. Tonight's party is not really important, what is vital is that the Bill should proceed to the Seanad. This is an important Bill because it enables the State to continue to underpin the operations of the airlines, airports and those who provide services at airports and ensure they are indemnified.

Before replying to the amendment tabled by Deputies Jim Higgins and Stanton, I am sure the House will be glad to know that a framework agreement has been signed this evening by the unions, the Government and those involved in the partnership programme. This agreement will now be put to the employees of Aer Lingus and they will vote on whether to accept it. I thank all of those who worked on the framework agreement – union leaders, politicians and officials from the Departments of the Taoiseach, Finance and Public Enterprise.

Despite the emergence of the agreement there is no doubt that there are many challenges and difficulties ahead. I have no doubts whatever about the sincerity and depth of work and feeling which went into reaching the agreement. I understand fully the difficulties encountered in attempting draw it up. I hope the agreement will carry within it the seeds of hope for Aer Lingus, the 4,000 employees and our country and will lead to future growth on the part of the company.

Mr. Higgins

(Mayo): I wish to congratulate another body which the Minister may have inadvertently omitted to mention, namely, the Labour Relations Commission, which did a great deal of work in trying to obtain an acceptable package.

I wish to ask four or five questions to clarify the position. First, is there any indication with regard to how long the interim measure in relation to providing indemnity for airlines and aviation services will remain in place? In other words, has any indication been received from the insurance industry about whether its position has changed? Second, have all companies withdrawn indemnification for airlines and aviation services? Third, I know until now the insurance industry has insisted on insurance being provided on an itemised basis – for example, every aeroplane had to be individually covered. Will collective cover be provided under the interim measure for all aeroplanes, equipment, etc.? Fourth, the Government will recoup from the airlines the costs for providing indemnification. How much money is the Government accruing in that regard and how much are the insurance companies forfeiting? Fifth, which airlines, aviation service providers and airports are being indemnified?

Mrs. O'Rourke

We do not know how long the interim measure will remain in place. The EU keeps extending it by three months and it will remain in place until at least the end of March 2002. It may be extended again in February or March. In my opinion the reasons for this lie in the uncertain position vis-à-vis the war and the fact that there appears to be no end in sight. One company has come forward and offered to provide insurance indemnity, at highly expensive rates. Cover is being provided on a collective basis. The Government is currently taking in approximately £1 million per month from the airlines and this is being lodged with the Exchequer. Under the Government aviation insurance scheme, cover is being given to nine airports, the Irish Aviation Authority, eight ground handling companies, one aircraft cleaning service provider, two fuel suppliers, two aircraft maintenance service providers and nine airlines.

I will now deal with the amendment. I understand that Deputy Stanton is unable to be here owing to a death in the family. With regard to the amendment, if an order were to apply for six months from the date of commencement, it would have to be renewed before 24 March, only three months after it was made. The Bill, as drafted, provides that the first order will be made on 22 December and will run until 21 June. We do not know when this will end. It is hoped that it will end sooner than we are allowing for.

Amendment, by leave, withdrawn.

Mrs. O'Rourke

I move amendment No. 2:

In page 4, line 42, to delete "Act" and substitute "section".

This is a technical drafting amendment. The provisions of section 2(7) should apply only to orders under section 2.

Amendment agreed to.

Mr. Higgins

(Mayo): I move amendment No. 3:

In page 6, between lines 45 and 46, to insert the following:

"(f2>d) the financial circumstances of the Air Navigation Undertaking concerned at the time and its ability to pay any such premiums.".

It is felt that ability to pay should be a factor. Mr. Michael O'Leary will probably go through the roof at the thought. However, it is obvious that Aer Lingus would have difficulty in paying whereas Ryanair seems to be in an extraordinarily buoyant and healthy financial state—

Mrs. O'Rourke

And wanting more.

Mr. Higgins (Mayo): —and seems to have the ability to pay. What we want to achieve here is some kind of pro rata amount related to the ability of the airline to fend for or fund itself. That is the rationale behind this. The Minister will probably say there should be equality of treatment for all.

Mrs. O'Rourke

I understand the spirit in which the amendment is put forward. It sounds just. However, it would require me and the Department to make judgments as to who can and cannot pay. One can imagine the number of appeals to which this would give rise. On Committee Stage, Deputies were interested in the amount that would be charged for the indemnities. That will be based on the guidelines laid down by the ad hoc EU committee and it is being worked out for us by Coyle Hamilton, the brokers.

On the amendment, I do not underestimate the sense of fair play inherent within it. However, it would involve the Department in some sort of benchmarking in relation to airline companies and in judgments as to which would or would not have the ability to pay. That is not our function. We are working with the EU on it, as are all countries. I cannot, therefore, accept the amendment, despite the good intentions behind it.

Mr. Higgins

(Mayo): Is this uniform across all EU countries?

Mrs. O'Rourke

Yes. It has set out guidelines which all countries are encouraged to follow. I asked whether any country had adopted the discriminatory practice of judging what companies might be able to pay, but no country has done that.

Amendment, by leave, withdrawn.

Mrs. O'Rourke

I move amendment No. 4:

In page 8, line 12, to delete "delay or default" and substitute "reasonable delay".

This amendment is a response to Deputy Stagg's concern on Committee Stage that section 12(4) gave protection to the Minister of the day in the event of an unreasonable delay or default in dealing with applications for indemnities. I can understand that concern. It is proposed to amend section 12(4) by deleting the words "delay or default" and substituting the words "reasonable delay". This would allow the Minister to have a reasonable delay while the matter is more carefully considered or more information obtained. However, it will not excuse the Minister from tardiness, which is the thrust of Deputies' concerns.

Amendment agreed to.

An Leas-Cheann Comhairle

We now come to amendment No. 5 in the name of the Minister. Amendment No. 6 is related. Is it agreed to discuss amendments Nos. 5 and 6 together? Agreed.

Mrs. O'Rourke

I move amendment No. 5:

In page 8, to delete lines 18 to 21 and substitute the following:

"suspend or terminate, with effect from a time and date specified, the operation of a Ministerial indemnity.".

This amendment removes the provision for immediate termination or suspension of indemnities. It inserts a new subsection that provides for termination or suspension to take effect either one hour after notification is issued or when it is received, if that is earlier. Amendments Nos. 5 and 6 are a response to concerns expressed on Committee Stage by Deputies Stanton and Stagg that a notice of termination would take effect only when it was received. This amendment provides that a notice of termination would take effect from a time and date specified.

Amendment No. 6 is consequent upon that. It gives certainty as to timing in terms of the termination of an indemnity.

Mr. Higgins

(Mayo): I support both amendments. Amendment No. 6 is a response to the possibility that it could be argued that the notice was not received.

Amendment agreed to.

Mrs. O'Rourke

I move amendment No. 6:

In page 8, between lines 39 and 40, to insert the following:

"(6) Suspension or termination of a Ministerial indemnity shall not take effect earlier than—

(f2>a) 1 hour after notice of termination or suspension is issued by the Minister, or

(f2>b) the time such notice is received by the air navigation undertaking concerned, whichever shall occur first.".

Amendment agreed to.

Bill, as amended, received for final consideration and passed.