I move: "That the Bill be now read a Second Time."
I am very pleased to bring this Bill before the Dáil. The Bill was initiated in the Seanad where we had a useful debate. The Bill's sole purpose is to provide a statutory basis for a new national tourism development authority. When the authority is established, Bord Fáilte Éireann and CERT will be dissolved and their functions transferred to the new body. The Bill also provides that certain provisions of the Tourist Traffic Acts will be repealed to take account of the provisions of this Bill.
The Bill is concerned with the establishment of a major tourism development agency. I wish to make it clear at the outset that the Bill is a tightly focused one. It is not about setting new parameters for tourism policy. As the House will be aware, I have launched a comprehensive review of our national tourism policy. The review group, which I appointed to carry out this exercise, has begun its work. It had its inaugural meeting on 28 January last. The review will tackle some of the key issues facing Irish tourism.
The group's main priorities will include an assessment of the performance and potential of the tourism sector and the identification of the key elements of a strategy, both industry-led and Government-led, for the continued development of tourism in Ireland. While I expect to get the group's final report by summer, I have asked the group to report to me, with initial views, by the end of April, if possible.
We have embarked on a major review of tourism policy. With this Bill, we are setting up a major new tourism development agency. We have recently set in place a new structure for international tourism marketing. Why are we doing this? Tourism, which is one of our major economic sectors, has reached a critical point in its development.
Irish tourism has come a long way over the past 15 years. Tourism generates about €4 billion in foreign earnings and about €1.2 billion from domestic tourism. Recent economic studies suggest that it accounts for about 5% of annual GNP. Tourism supports about one in every 12 jobs in the economy. Over the past two years, Irish tourism has had to face a number of serious chal lenges. In 2001, its pattern of unbroken growth was disrupted. Last year, 2002, was a very challenging year but the projected outcome, with a return to modest growth, is encouraging. We certainly did not experience the doomsday scenario predicted by many commentators.
As for 2003, it is very early to make predictions particularly given the late booking pattern, which has been an increasing trend in recent years, and the uncertain situation in the Gulf. Nevertheless, I understand that advance bookings are good, with a healthy trend in the US fuelled by Tourism Ireland's kick-start campaign last December. This situation could change significantly were there to be an outbreak of hostilities.
The crises which we have faced over the past two years have accelerated certain changes which were already happening in the marketplace. They have also thrown into sharper focus some important issues around quality and value for money. The challenges now facing the industry, together with significant institutional changes arising from the Good Friday Agreement, are driving reform of the institutional architecture which the State uses to support tourism development. The Bill before the House is a vital part of that reform package.
Before we have a general look at the contents of the Bill, it might be useful to look at the current national State agencies which are dedicated to supporting tourism. The three agencies are; Tourism Ireland Limited, Bord Fáilte Éireann and CERT.
Tourism Ireland Limited is a publicly-owned, limited company established jointly by Bord Fáilte and the Northern Ireland Tourist Board, commonly known as NITB. It was incorporated in December 2000. Its board is drawn mainly from its founding agencies, Bord Fáilte and NITB, and the tourism industry North and South. Its purpose is to market the island of Ireland as a tourism destination.
Tourism was identified as an area of co-operation under the Good Friday Agreement. Tourism Ireland Limited was established as an expression of that co-operation. It has now completed its first 12 months with full operational responsibility for the international marketing of the island of Ireland. In the North, Tourism Ireland falls under the aegis of the Department of Enterprise, Trade and Investment, while here it falls under the aegis of my Department, the Department of Arts, Sport and Tourism.
Tourism Ireland has taken over a number of the functions previously carried out by Bord Fáilte. It is responsible for the international marketing function. That includes responsibility for the ownership and management of tourism brand Ireland, strategic all-island destination marketing in all markets outside the island of Ireland and responsibility for the entire overseas office network. Tourism Ireland also delivers product-regional marketing programmes on behalf of Bord Fáilte and NITB in international markets. Bord Fáilte and NITB retain responsibility in relation to tourism product development. Tourism Ireland's head office is in Dublin. It has a regional office in Coleraine and it has offices in our major overseas markets, Britain, France, Germany and the USA with an overall staff complement of about 150 people.
Tourism Ireland has established a number of tourism marketing partnerships in the Republic, the North and key markets. These partnerships, which include representatives of the tourism industry, are a valuable mechanism through which the tourism industry itself can directly influence and give feedback on Tourism Ireland's strategies and marketing plans. Tourism Ireland took over operational responsibility for the international marketing of the island of Ireland as a tourism destination less than three months after September 11. It has been a baptism of fire but the projected outturn for 2002 shows that it has done a good job in helping to maintain a high level of business and, indeed, some modest growth in the face of very difficult circumstances.
For Irish people, Bord Fáilte Éireann has, of course, been synonymous with tourism. It has for decades been the State's primary tourism agency. It has 130 employees and its head office is in Dublin. Following the establishment of Tourism Ireland Limited, Bord Fáilte will retain responsibility for product development; marketing of domestic tourism on the island of Ireland; research and strategic planning; niche-specialist product marketing and promotions; regional marketing; implementation of specific initiatives such as the sports tourism initiative; statutory functions for the registration-grading of certain tourist accommodation; co-ordination of activities of the regional tourism authorities; and tourism and the environment.
These functions mainly relate to providing a range of supports to the tourism industry, including those concerned with building business capability, improving the quality of product which the industry offers and enhancing its competitiveness.
In 1994, there was a major review of the operations of Bord Fáilte. The outcome of that review was a decision that the primary focus of Bord Fáilte should be on international marketing. Bord Fáilte was re-focused accordingly. The result was a greater efficacy in our international tourism marketing which has paid handsome dividends.
The 1994 review recommended that matters extraneous to the international marketing function were to receive less attention. However, one consequence of that re-focusing of Bord Fáilte's operations was that a decreasing portion of its staff and resources have been devoted to other areas like, for example, product development and the environment. We need to reverse that trend. We need to focus, once again, on some of those areas in order to help preserve unique elements of the Irish tourism experience. We have shown that we can get the people here but we also need to look again at what happens when they get here.
Because Bord Fáilte has been the premier tourism agency over the past 50 years, the major element of the Tourist Traffic Acts is concerned, in one way or another, with its functions or those of its predecessors. The Acts do not mention the other main agencies, Tourism Ireland and CERT.
C.E.R.T. Limited is the State's national tourism training agency. It was established, as a company limited by guarantee in 1963. CERT's head office is in Dublin, it has some 90 employees and has a number of training centres around the country. At present, CERT provides education, recruitment and training services for the tourism industry. As the industry has evolved, CERT has moved in the direction of a wider business development role. It helps to build industry capability by focusing on human resource management and improving cost competitiveness.
Rapid economic growth and record growth in tourism has created pressure on labour supply for the tourism industry. This has been a major focus for CERT. The focus has been on attracting and retaining school leavers, on adults returning to work and on skills development for workers. These services are delivered through development, provision and design of a range of education and training programmes to meet industry needs.
As far as industry competitiveness is concerned, the focus has been on enhancing productivity and performance, benchmarked against best international practice. The competitiveness of our tourism product has been the object of much discussion of late. The focus on competitiveness has been heightened by the price transparency associated with the euro. It is important, however, to remember that competitiveness is not just about price. It is about value. We are not a cheap destination but we need to ensure that we deliver value.
Any enterprise that is experiencing rising costs and pressure on margins has to take a fresh, hard look at how it is doing its business. It has to see how it can make better and more efficient use of its staff and resources. Business consultants tell us that, in areas like labour, energy and purchasing there can be significant scope for greater efficiencies. CERT has developed a range of experience and programmes to help businesses in this regard and I hope the new authority will work even more closely with businesses to improve efficiency and effectiveness.
In addition to the national tourism agencies, we have also a regional tourism structure. Our six regional tourism authorities continue to operate under the aegis of Bord Fáilte while Shannon Development, which is responsible for tourism in the mid-west, is an independent State agency. Once we have bedded down the National Tourism Development Authority, we will then look at the regional issues. The Bill before the House confines itself to national structures.
Fundamental changes have occurred in the nature of the tourism industry both globally and in Ireland over the past decade and more. In the context of these changes there has, for example, been a growing realisation by the Irish tourism industry that there are other issues which are more important for the industry's future than just visitor numbers.
Yield, regional and seasonal distribution and access are key issues on one side of the equation. On the other side of the equation, we have the quality, range and competitiveness of the facilities and products that the tourism industry in Ireland offers to its ever more discerning customers. Since assuming responsibility for this portfolio, I have spoken of the need for the industry to maintain its competitive edge. If it does not do so, it will fail to reap the due reward for the massive investment of public and private funds in the sector over the past 12 years, an investment that some economists put at more than €4 billion.
Another ingredient, key to the successful development of tourism, is the quality and levels of service that the industry has to offer. It makes little sense to invest millions of euros in building facilities, unless the necessary steps are taken to ensure that the quality and level of service is in accordance with what the customer wants and consistent with what that customer has been led to expect.
If we build high standard physical facilities, we must also deliver appropriately high quality services. If the operational standards do not match the physical quality of facilities, then the market potential of these facilities may not be realised. The future success of Irish tourism is dependent on the industry developing and maintaining quality product and quality service which provides good value for money, supported by effective, consumer-led, marketing programmes and the enhancement of its overall business capability.
About 15 months ago, the Government decided there was a compelling case for streamlining and integrating the delivery, at national level, of the State's activities in supporting and promoting product marketing and development, human resource development and training in the tourism industry. To that end, it approved the creation of a new authority which would take over the range of functions exercised by CERT and those remaining with Bord Fáilte. The authority will have a clear mandate to take whatever actions are appropriate to help industry in its efforts to enhance the quality of its products and services and to do so in a manner designed to help it hold and increase its market share in well defined market areas.
It will be essential that the closest possible links, teamwork and working arrangements are put in place and maintained between the new tourism development agency and Tourism Ireland Limited. Tourism Ireland will focus on getting people here. A major focus of the new authority will be on the experience of visitors when they get here. If we are to ensure that our tourism product evolves in line with international consumer demand, there will have to be an effective partnership between the two organisations. There is already a close working relationship between Bord Fáilte and Tourism Ireland Limited. Exchequer funds flow to Tourism Ireland via Bord Fáilte. These relationships will be maintained and strengthened in the context of establishing the new authority.
The intention behind this Bill is to put in place a strong and well resourced body with a clear mandate to address some of the key issues facing the tourism industry. It is important, at this juncture, to have a tourism development agency that can work with operators in the tourism sector and offer them a better range of streamlined programmes and services to support their future development. We are creating a new organisation out of two existing organisations which have given good service and developed good skills over the years. While the authority will build on existing skills, I hope it will do more than that. We need a new dynamic in tourism development. We need a vision and a new structure to deliver on that.
We will not wait until this Bill is passed to start work. Much work has already been done to lay the groundwork for the new organisation. That work will result in the body being able to hit the ground running and to develop rapidly into a highly effective, highly regarded body for the development of tourism here.
There has been strong support for the principle of integration of CERT and Bord Fáilte. The Irish Tourist Industry Confederation and the staff trade unions have also given their support. Building on this support, I established an interim board on 4 July of last year, which is charged with the task of ensuring that the new authority can be up and running in time for the 2003 tourism season. It has an independent chairman and includes the chairpersons and some existing members of the board of Bord Fáilte and the council of CERT as well as a representative from my Department. I take this opportunity to thank the interim board for its work to date.
I will now give a brief summary of some of the main provisions of the Bill. The Bill contains three Parts. Part 1 contains a series of standard provisions regarding title, interpretation, expenses and the laying of orders made by the Minister before each House of the Oireachtas. Provision is also made for the repeal of some provisions of the Tourist Traffic Acts which relate to the corporate governance of Bord Fáilte. This is necessary because the governance provisions of the Bill will obviously replace the old provisions relating to Bord Fáilte. For clarity, CERT, which is a limited company established at Bord Fáilte's initiative, is not a statutory body. There are, therefore, no provisions in the Tourist Traffic Acts which pertain to the corporate governance of CERT.
Part 2 constitutes the bulk of the Bill and contains those provisions necessary for the authority to come into existence and to carry out the functions ascribed to it.
Section 6 allows me to set, by order, a day for the establishment of the authority. On that date, the authority will come into being and Bord Fáilte and CERT will cease to exist. Their functions will automatically transfer to the authority. While the official name of the authority is the National Tourism Development Authority, section 7 allows the authority to describe itself as Fáilte Ireland for operational purposes.
Section 8 sets out the authority's functions. The over-arching function of the authority will be to encourage, promote and support the development of tourist traffic within and to the State and the development and marketing of tourist facilities and services within the State. Within that overall context, the authority will seek to develop the recruitment, training and education and development of persons to be employed in the tourism sector. The authority will engage in research and planning. It may engage in advertising or publicity, or provide advice, consultancy services, training or support, including financial support. The authority will continue to exercise the powers currently exercised by Bord Fáilte relating to the registration and grading of certain types of tourist accommodation. These powers are spelled out in various provisions of the Tourist Traffic Acts which will remain in place.
It is important to understand that the Tourist Traffic Acts do not prescribe the particular criteria with which a premises has to comply in order to be registered. The Acts merely set out the functions and powers in relation to registration, grading and listing of accommodation. The actual criteria are set out in regulations made from time to time by Bord Fáilte, with ministerial consent. That process has worked satisfactorily in the past and I propose that it continue under the new authority.
I also propose to arrange with the Attorney General for the restatement of the remaining provisions of the Tourist Traffic Acts under the mechanisms provided by the Statute Law (Restatement) Act. That will create a single source of coherent and easily accessible legislation relating to the registration and grading functions transferring to the authority.
Section 9 is standard and allows me to confer additional functions on the authority. Section 10 gives the authority power to set up companies and to acquire interests in companies. Section 11 allows the authority, either at my direction or with my consent, to delegate certain of its functions and describes the types of bodies to which functions can be delegated. One body, which is specifically mentioned in that context, is Tourism Ireland Limited to which I have referred. This is the first recognition of Tourism Ireland Limited in the Tourist Traffic Acts.
Section 12 provides that the authority may contract out certain of its registration, grading and inspection functions under the Tourist Traffic Acts and Schedule 2 lists the relevant provisions. This will allow for the continuation of the current practice whereby Bord Fáilte contracts out some of its inspection and grading functions to private contractors. Section 13 requires the authority to comply with policy directions. It is a standard provision and is found in legislation governing several agencies.
Sections 14 to 22 are standard provisions governing membership and meetings of the authority and conflicts of interest and disclosure of information by members or staff of the authority. The authority will consist of a chairman and 12 members. Section 23 allows the authority to establish committees. These will be useful in helping it to better perform its functions.
Section 24 is a standard provision which puts a cap on the aggregate level of advances which the authority, from moneys provided by the Oireachtas, can make for the purpose of supporting enterprises and projects relating to the development of tourist traffic and the development and marketing of tourist facilities and services. The cap is set at €65 million.
Section 25 allows the authority to provide financial aid in relation to the carrying out of its functions and to administer EU schemes. Throughout the 1990s, the administration of EU tourism development schemes was a major component of the work of both Bord Fáilte and CERT. Even though their significance has diminished in the current round of Structural Funds, Bord Fáilte is still involved with administering such schemes. It is important, therefore, that we ensure that the authority is empowered to undertake such work. The section gives the generic power to grant financial aid. Detailed criteria governing qualification for such aid will be laid down, as is current practice, in the conditions of various schemes and initiatives.
Sections 27 and 28 contain standard provisions in relation to the submission and auditing of audited accounts and annual reports. Section 29 provides for the application of the Freedom of Information Act to the authority. Section 30 is a standard provision allowing the authority to accept gifts on conditions consistent with its functions. Sections 31 to 33 deal with the position of chief executive.
Section 31 provides for the appointment of a chief executive. Under this section, I am empowered to designate a person as first chief executive of the authority upon its establishment. Following the outcome of an open competition, held under the aegis of the interim board of the authority, I recently announced my intention of appointing Mr. Shaun Quinn as the chief executive of the new organisation once it is formally established.
Section 32 deals with the accountability of the chief executive to the Committee of Public Accounts and reflects the rules governing that committee. Section 34 is a standard provision for the appointment and remuneration of staff.
Section 35 provides for the transfer of the existing staff of Bord Fáilte Éireann and CERT to the new authority. Staff will automatically transfer, on the establishment day, on terms and con ditions no less favourable than those to which they were subject immediately beforehand. Any merger will give rise to an understandable anxiety on the part of the staff affected. This provision is a powerful guarantee which delivers a very high level of security to those involved and reflects a promise which I made to union representatives when I met them late last year.
Section 36 is a standard provision governing superannuation. It protects the rights of existing staff and pensioners of both organisations.
Part 3 contains standard transitional provisions concerning a range of items, including the dissolution of Bord Fáilte Éireann and CERT, the vesting of property and the automatic transfer of the rights and liabilities of the two organisations to the authority.
Schedules 1 and 2 list provisions of the Tourist Traffic Acts 1939 to 1998 that have been repealed, or may be contracted out, as a consequence of the provisions included in the Bill.
The purpose of this Bill, when enacted, will be to allow us to establish a new National Tourism Development Authority. Wider issues of tourism policy will be considered in the context of the review, which is now under way, and I expect there will be opportunities for members of the Oireachtas to input to that review, if they so wish, and to debate the outcome of the review in due course. The outcome will, of course, shape the policy environment for the authority.
I commend the Bill to the House and I look forward to hearing the views of Deputies.