Adjournment Debate.

Consumer Protection.

Dr. Upton

I thank the Ceann Comhairle for allowing me to raise this matter, especially since I had to do a little toing and froing to find a home for this debate. It is often difficult to assign departmental responsibility to matters relating to children. While the Minister of State with responsibility for children is attached to the Department of Health and Children, matters affecting children cross over many Departments.

I refer to the problem of young people and children inadvertently agreeing to contracts for services with ringtone providers. I hope the Minister for Enterprise, Trade and Employment can clarify what obligations rest with such service providers to ensure subscribers are aware of age restrictions. I received a complaint from a constituent whose son, aged ten, received a new Nokia polyphonic mobile phone for Christmas with €60 free credit. Like many young people, this boy was attracted by a glossy advertisement in a football magazine to the services of Jamster, a provider of ringtones, mobile phone wallpaper and games. The ten year old was able to join one of the Jamster clubs, thereby agreeing to a contract with the provider. This club entitles a subscriber to a number of new ringtones and wallpaper per month. The boy was not aware as he joined the club that he was agreeing to a contract. He was not asked his age nor did the company stipulate that a subscriber must be at least 16 years.

One can download the contract agreed by subscribers at www.jamster.ie. This outlines that a contract agreed with a person under 16 is void. This is the current statement of the legal position. However, the ringtone provider should also inform all potential subscribers that they must be at least 16 to agree to a contract. I joined the same Jamster club over the Internet and at no stage was I asked to confirm that I was over 16 or informed that I was agreeing to a contract.

Jamster is owned by the iLove company based in Berlin, Germany. The company provides different mobile phone accessory services aimed at different customers. Jamster is aimed at children and the latest pop songs are offered as ringtones, as well as the well known "Crazy Frog" ringtone. Jamster offers colour cartoon wallpaper and games and its services are marketed to children. Advertisements are placed in magazines heavily bought by children and teenagers. Jamster earns a great deal of its revenue from illegal contracts with children and young people who are completely unaware they have agreed to them.

The subscriber pays a fee on joining a Jamster club. This is €8 per month, for example, for the polyphonic ringtone club or the super games club. This allows the subscriber to one free ringtone and an entitlement to download further ringtones. However, a subscriber pays more than €8 to avail of the club. A sum of €1.65 is charged for every text alert received. This charge is levied when the subscriber uploads the GPRS connection on a text alert received. My constituent's son spent most of his €60 free credit on uploading such text alerts, which comprised new ringtones. A subscriber is sent text alerts on ordering a new ringtone and he or she can also receive unsolicited messages.

I contacted Jamster at the 1890 number provided but its representative was unwilling to provide clarification on its pricing structure. I was referred to the mobile phone provider, Vodafone, which I contacted, but it was unable to offer assistance. The corporate blurb on Jamster's website boasts of its ability to reap financial rewards from its customer base and of the free ringtone offer as a great teaser to derive response. It also boasts of what it calls high conversion and high payouts, listed as €2 for every sale.

I would be grateful if the Minister and relevant State agencies would look into the pricing structure of this service. This company is preying on the attraction of young people and children to their mobile phones, especially their ringtones, logos and games.

Jamster is aimed at young people. It induces young people to sign subscription contracts without letting them know that they must be 16 or that they are even signing a contract. The pricing policy is unclear, but from the information I have it appears to be exploitative. I urge the Minister to bring in guidelines to protect children and young people availing of the new mobile phone technology. It is often the case that parents are not aware of the cost of such contracts and downloads.

Minister for Enterprise, Trade and Employment (Mr. Martin)

I thank the Deputy for raising this issue. Her contribution and complaint have enlightened me and the House about the nature of the case. A number of Departments wondered which Department should take up this concern. Eventually we looked at it under the issue of company law and have drawn up the following reply. I ask the Deputy to discuss the issue further with my officials in terms of the details she has ascertained.

The Deputy refers to a telecommunications service whereby mobile phone customers can purchase and download ringtones for their handset. She is concerned, and rightly so if it is true, about the high incidence of children using this service and paying high prices for the product in question. This is not a matter about which I had knowledge prior to today and my officials have had a limited amount of time to research the matter.

I understand that the service works as follows. The customer makes a call or a series of calls on his or her mobile phone as a result of which a website address is sent by text message to the phone. The customer can then download the ringtone required from the website in question and load it on to his or her mobile phone handset. Payment for this service is levied by means of a charge on the customer's mobile phone bill or, in the case of pre-paid customers, by a deduction from their available call credit.

One of the Deputy's concerns is that at no point in the transaction is any indication given of the price which will be charged for downloading the ringtone. There is at least one company providing this service and I expect that there may be others. It appears, on the basis of the research conducted by my officials this afternoon, that this is a matter which raises a number of complex legal issues that merit further investigation. The Deputy will appreciate that I may not be able to give definitive answers to some of her questions this evening. However, I would be pleased to receive whatever detailed information the Deputy might have on the matter that might assist my Department in its inquiries. If the Deputy has such information or if I have misunderstood her concerns on this matter in any way, she should communicate directly with my office.

My Department is responsible, through the Director of Consumer Affairs, for the administration and enforcement of the distance selling directive, which is basically an EU law governing what are called distance contracts or contracts concluded, for example, by telephone, over the Internet or by mail order. In the case of such contracts there are legal obligations on the supplier of the product or service in question to indicate to the purchaser in advance the terms and conditions, including in particular the price applying to the purchase. In certain circumstances, there are also provisions for what is known as a cooling-off period, whereby customers may cancel the contract without penalty if they change their mind. At this point I cannot say whether the type of service to which the Deputy refers constitutes a distance contract within the meaning of this directive. I will, however, make further inquiries to establish the precise position. These inquiries may involve seeking legal advice in the matter.

My Department has participated in negotiations in Brussels on a new unfair commercial practices directive, which is currently before the European Parliament and has not yet been adopted by the European Council of Ministers. The draft directive, which will in due course be an important addition to our body of consumer law, purports to outlaw a wide range of activities which are regarded as constituting unfair, misleading or aggressive sales practices. I have also asked my officials to examine the terms of this draft directive to ascertain whether the practice of concern to the Deputy is comprehended by its terms.

There may also be a possibility that the service in question is a premium rate telecommunications service. While this is not a matter for me or my Department, I am advised that such services are the subject of a code of practice administered by Regtel, an independent, not-for-profit limited company which is financed by means of a levy on the telecommunications industry. Regtel operates through a strict code of practice which must be observed by all companies or individuals offering premium rate services in Ireland. Again, however, I will have to make further inquiries to establish if Regtel has any function in this matter. I will also raise the matter with my colleague, the Minister for Communications, Marine and Natural Resources, to establish if any responsibility arises under his remit.

This matter appears to raise issues of contract law and perhaps even common law in so far as it might apply to the conclusion of contracts involving minors. I confirm again that I have asked my officials to make further inquiries and I will certainly communicate with the Deputy in the matter at an early date. No doubt we can facilitate an exchange of information between the Deputy and my officials.

Industrial Disputes.

Mr. Durkan

I thank the Ceann Comhairle for the opportunity to raise this issue. This issue began just a few weeks ago with a simple boardroom dispute which has now escalated. I do not want to get into the details of the dispute, but its escalation will have serious consequences for the ESB, its consumers, both industrial and domestic, and the economy. What may have seemed like a simple disagreement initially has taken on far more serious proportions and is in danger of expanding into unofficial, or perhaps official, industrial action which will have serious consequences throughout the country.

I also raise this issue for another reason. There have been a number of "accidents", for want of a better description, in State companies in recent times where what seemed a simple issue initially turned into a major issue later. In one or two cases the issue caused both sides to go to the brink of industrial action. In the case of Aer Lingus it led to even more serious consequences.

I am concerned that what is happening with the ESB, small as it may have been initially, has the propensity to escalate into a larger and wider issue with significant consequences for the ESB. This is a particularly sensitive time because of deregulation. I urge the responsible Minister to take immediate steps to ensure that whatever difficulties that have arisen are made known to all parties concerned. The difficulties must be resolved and the ESB must discharge its responsibilities to the public and to the domestic and industrial consumer with due regard to the need to protect the economy.

Minister of State at the Department of Foreign Affairs (Mr. C. Lenihan)

I am addressing this issue on behalf of my colleague the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey.

The Minister has asked me to make two specific points at the outset. First, he does not have primary responsibility within the Government for industrial relations issues. Second, the situation currently pertaining at board level in the ESB is an internal matter for the board. I should also preface the remainder of this speech by saying that the Minister is in receipt of legal correspondence in this matter and I must take cognisance of that in what can be said here tonight.

The current boardroom issue has added another dimension to the already complex industrial relations environment in the ESB. The Minister understands that unofficial industrial action has been threatened by ESB shop stewards in the business unit network distribution with effect from Friday, 18 February. It is understood that formal notification of such action has not been served on the ESB in accordance with normal industrial relations procedures.

This is clearly in breach of the spirit of partnership and the commitments regarding industrial peace entered into by all parties under the Sustaining Progress agreement. If the country or any customer was to be left without electricity because of a procedural disagreement at board level it is fair to say that such a development would not be welcomed by the public or the Government.

The Minister understands that the boardroom situation has arisen over the procedure for chairing the meetings of the board in the absence of the chairman. During the course of the last board meeting in January, it appears the chairman had to absent himself for a part of the meeting. A board member, other than the deputy chairman, was selected by the board to chair the meeting during the chairman's absence. The Minister understands the board relied on the regulations of the board in reaching this arrangement and account was also taken of corporate governance independence criteria.

The July 2003 combined code on corporate governance sets out the principles of good governance and a code of best practice. Companies listed on the Stock Exchange are required to report on compliance with all the provisions of the code. While ESB is not explicitly bound by the code, the company supports its principles and provisions and endeavours to adhere to best practice in the area of corporate governance while continuing to comply with its other accountability obligations to the Minister and Government. This is clearly stated in the company's 2003 annual report. The ESB intends to make a further report on its compliance with the combined code in its annual report for 2004, which will be due for publication later this year.

The combined code provides that a chairman should meet independence criteria. Criteria cited as compromising independence are if the chairman has been an employee of the company within the last five years, if the person is a member of the company's pension scheme and if the person has served on the board for more than nine years from the date of his or her first election to it. In light of this, the deputy chairman does not meet these criteria given his long service in the employment of ESB and his membership on the board for over 20 years. The independence of the chairman is critical if the board is to function properly. The Minister understands that the chairman took full account of the criteria from the combined code in reaching his recommendation as to who should act in his place in his absence.

The Minister also understands that the chairman was of the view that the recent newsletter issued by the deputy chairman may have compromised the deputy chairman's independence in the chair. The deputy chairman had expounded his views in public on matters which had not yet been discussed by the board.

Some media sources reported that the deputy chairman was "removed" or "dismissed" from his position. This would appear to put a particular negative angle on the procedural arrangements followed by the board when selecting an acting chairman during the January meeting. The current deputy chairman was appointed to that position by the Minister's predecessor. The Minister has not rescinded that appointment and so the usage of such terminology as "removed" or "dismissed" is not accurate. There would appear to be a clear and urgent case for the parties concerned to focus on a solution to avoid any unnecessary disruption to power supplies.

Offshore Exploration.

Dr. Cowley

I am grateful for the opportunity to raise this important matter on the Adjournment. I received representation from constituents in the Rossport area who are concerned about the onshore pipe bringing the gas from the Atlantic Ocean to a terminal which has yet to be constructed. These people are concerned about their health and safety. On their behalf, I am demanding more answers from Government as to whether it should take more steps to ensure the health and safety concerns of residents are adequately addressed. I do not believe that is the case at present.

Serious questions need to be answered before I am satisfied that residents are being taken seriously. When I sought answers from the Department of Communications, Marine and Natural Resources, I was told a quantified risk assessment had been carried out. I refer to the Andrew Johnson report of 28 March 2002. I was also informed that the Department had employed an independent UK consultant to examine the study and independently assess it. I was further informed the Department was happy with the situation. I met the Shell company today. I had been anxious that the company would meet with the residents of the area but because a judicial review is pending, Shell stated it was not in a position to meet them.

I tabled a parliamentary question to the Minister, Deputy Noel Dempsey, and I am less than happy with the reply I received. The reply states that a QRA was carried out but does not provide any details. It also made great play of the fact that nobody would be closer than 70 m to the pipeline, in other words that they would be safe in their homes. However, that begs the question of how safe would be a person working on his or her farm at a distance closer than 70 m to the pipeline, or a passer-by or car driver. The Minister stated the risk is very small but it is my contention that a risk exists.

Residents are also concerned about pressure in the pipes. The Minister stated the design is up to 345 bar and that the pressure in the pipeline would be initially 150 bar, reducing over the life of the gas field to less than that. However, that is cold comfort to the local people who are concerned about pressure in the pipeline.

The Andrew Johnson report gives rise to questions. I have serious doubts that this is a QRA because it refers to recommendations that should be included in a QRA and identifies shortcomings that still need to be addressed such as an adequate leakage system. To date no information has come forward relating to a leakage detection system which would be essential. All design recommendations must be included, and if they are not included, which according to the report is the case, then safety cannot be guaranteed.

The report is quite confusing. It refers to a separate QRA which implies that the report in question is not a QRA. The report states that the risk is acceptable provided that certain design recommendations are implemented, but page 19 of the report states that the majority of the design recommendations have been incorporated which implies that some recommendations have not been incorporated. How can this be taken as a complete resolution of the matter? The Government has not addressed the issue properly. Local people deserve to have their fears properly allayed. I question if a QRA has been carried out. I do not accept that the Andrew Johnson report is a QRA. I hope the Minister will answer this question for me.

Mr. C. Lenihan

I am addressing this matter this evening on behalf of my colleague, the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey. On the question of the quantified risk assessment referred to by the Minister in a reply to a parliamentary question raised by Deputy Cowley and answered on 9 February last, the assessment to which he was referring was not the Johnson report which the Deputy understood it to be. It was a quantified risk assessment report commissioned by the then developers in 2001, namely, Enterprise Energy Ireland Limited, on the onshore pipeline.

A risk is an expression which combines the probability of an event and the consequences of that event. The qualified risk assessment looks at the specifics of the pipeline and of the area the pipeline goes through using statistical data to determine the risks associated with failure. The quantified risk assessment addresses the risks present during the operational phase of the onshore section of the pipeline, that is, the section of the pipeline between the mean low water mark and the first isolation valve upstream of the pig trap in the onshore terminal.

As regards the Minister being satisfied that a quantified risk assessment has been carried out on the onshore sections of the Corrib gas pipeline, that is the case and a copy has been made available to the Department. The quantified risk assessment undertaken for the onshore section of the pipeline, which was intended to identify and assess all risks associated with the operation of the onshore section of the pipeline, included a detailed analysis of the risk of damage to the pipeline and consequences of any such damage.

The report makes recommendations for risk reduction where appropriate and will seek to demonstrate that the residual risks associated with the operation of the onshore pipeline have been reduced to tolerable levels. It showed that even in the worst case of the pipeline being ruptured and the gas being ignited, the occupants of a building 70 m away would be safe. The design of the pipeline means that the risk of such an event or any other type of gas escape is infinitesimally small.

Following receipt of the developers' pipeline consent to construct application, the Minister's predecessor commissioned a pipeline expert, Mr. Andrew Johnson, to carry out a further independent technical evaluation on the information supplied by the developers. Mr. Johnson's report suggested certain updating of the company's quantified risk assessment and the developers duly agreed to carry this out.

Mr. Johnson's report was entitled Report on the Evaluation of the On-shore Pipeline Design Code, and makes a number of recommendations for risk reduction where appropriate. Mr. Johnson's study addressed design, methodology, operating conditions, pipeline commission, public safety, welding and testing, pipeline material and quality and protection from interference. He stated that the onshore pipeline design code had been selected in accordance with best public safety considerations and is appropriate for the pipeline operating conditions.

He further advised that subject to the developer undertaking to comply with a number of conditions to be laid down in approvals and consents granted, the design is generally in accordance with best international industry practice and that the pipeline is considered to meet public safety requirements. In addition, Mr. Johnson recommended that the pipeline should be laid a minimum of 70 m away from houses and this was included as part of the conditions of the pipeline consent given.

Consent to construct gives the developers the assurance that the pipe can be designed and manufactured to the codes and standards agreed and for the specific route agreed. However, the subsequent installation and commissioning operation for the flow of first gas will be subject to separate approval by the Minister. This will ensure that specific installation operations will be subject to whatever logistical conditions are considered appropriate by the relevant regulatory bodies, in accordance with national and international statutory and other requirements and regulations. The operation of the lines will only be approved — consent for first gas — when the Minister has assurances that the lines, as constructed and installed, are fit for the purpose and have complied with the verification process included in the plan of development approval.

I hope this answers some of the issues raised by the Deputy.

The Dáil adjourned at 9.15 p.m. until 10.30 a.m. on Thursday, 17 February 2005.

Dáil Éireann debate - Wednesday, 16 Feb 2005