Dáil Éireann debate -
Thursday, 17 Dec 2009

Vol. 698 No. 5

Forestry (Amendment) Bill 2009: Committee and Remaining Stages.

Section 1 agreed to.

NEW SECTION.

Deputy Michael Creed

I move amendment No. 1:

1. In page 3, before section 2, to insert the following new section:

"2.—Section 24(2) of the Forestry Act 1988 is amended:

(a) by the insertion of the words “but shall not exceed €100,000,000, without receiving the express approval of Dáil Éireann” after “the consent of the Minister for Finance”, and

(b) by the insertion of a new paragraph in subsection (2) as follows:

"(a) Monies borrowed temporarily at any point in the accounting year under this subsection shall be noted in the annual report of the company for that accounting year.”.”.

Section 24 of the Forestry Act 1988 deals with Coillte's borrowing entitlements. Section 24(2) states:

The company may borrow money (including money in a currency other than the currency of the State) temporarily but the aggregate at any one time of such borrowings shall not exceed such amount as has been approved by the Minister with the consent of the Minister for Finance.

My amendment provides that any borrowings of Coillte's could not exceed 25% of its total borrowings capacity of €400 million without having the express approval of Dáil Éireann. If Coillte wanted to borrow in excess of €100 million, it could only do so with the express approval of the House through the Minister.

We are being asked to approve on the hoof a capacity for a semi-State company to borrow up to €400 million, four times its current permitted amount, without any satisfactory debate. It is important, therefore, to put in some system of checks and balances. It is imminently sensible, particularly as the appropriate level of scrutiny being afforded to us today is all the more important.

Why did Coillte attend an Oireachtas committee several weeks ago to discuss its annual report but never made a single reference to the fact it felt hamstrung by the current legislative arrangements for borrowing and was in negotiations with Departments of Agriculture, Fisheries and Food and Finance on the matter? It is an insult to the Oireachtas. As I said earlier on Second Stage, Coillte is not a Government or Fianna Fáil-Green Party sponsored body, it is a State-sponsored body. The Oireachtas Joint Committee on Agriculture, Fisheries and Food is the appropriate venue for Coillte to articulate its concerns. Without a rational explanation forthcoming, I am disappointed the committee was snubbed.

The Minister baulked at giving a response to my question on if Coillte was originally looking for more than €400 million. Is Coillte borrowing the moneys for capital purposes, day-to-day expenditure or to fill the black hole in its pensions fund? These are issues which the truncated Second Stage debate did not allow us to address properly and I hope the Minister of State will be able to do so now.

Deputy Seán Sherlock

The Bill seeks the permission of the House to afford to Coillte the opportunity to increase its statutory borrowing requirement from €101.5 million to €400 million. In his Second Stage speech, the Minister of State pointed out that inflation alone would allow an increase in the borrowing limit to €182.5 million. This is based on inflating the €101.5 million limit in 1988 by Ireland's inflation rate up to October 2009. Will the Minister of State give us a more detailed analysis of that assertion? Coillte's borrowings to the end of 1988 are €161.2 million and it has approval to borrow up to €260 million under sections 24(1) and (2) of the Forestry Act 1988.

The Minister of State gave a good overview of Coillte's workings, the direction it wants to take in corporate planning and the working groups established to review its operations. There was no mention, however, of the pensions deficit, a fundamental aspect of the company's operations, or the chief executive officer's and the board's remunerations. There are also questions surrounding a Forestry Stewardship Council report which indicted some aspects of Coillte's operations. The Labour Party would be reluctant to support any mechanism to allow for an increase in a company's borrowing requirements unless there is some degree of transparency in its operations. The Minister of State's Second Stage speech did not sufficiently address these matters.

The company's reports and accounts also do not address these issues. When Coillte attended the Joint Committee on Agriculture, Fisheries and Food in October, one got the impression everything was rosy in the garden. There were, however, some difficulties for ancillary firms such as Mediate and others with the downturn in the construction industry and this was reflected in their results. What is the future for these firms? I do not see enough reporting back to this House on how these operations will proceed and their individual financial positions. Is the new borrowing requirement to facilitate any of these offshoot companies? What will the nature of their financial position be as a result of this amending legislation? Before the House is requested to up Coillte's borrowing requirement, it requires more information as to how it does business.

People tend to look favourably on Coillte's operations because of the recreational and amenity value of its work. I have benefited from them myself in the Ballyhouras and there is a certain pride in how Coillte has developed amenities well. With the Copenhagen summit agenda, there is the political consideration of the role of forestry in reducing or offsetting CO2 emissions. Will the increase in permissible borrowing go towards facilitating this process? If so, will Coillte have a significant role in that process?

I would also like the Minister of State to address the issue of the role of the Forestry Stewardship Council. It is hoped, given the 2006 report and the audit under way, that there would be significant improvement in corporate social responsibility and the role of corporate governance in respect of how Coillte performs its functions. Fundamentally, we need a little more transparency in regard to the operations of Coillte. While we all believe that it is a force to do good, there are aspects of its operation which, from time to time, leave doubts in one's mind. Were the agency to be a little more transparent there would be a great deal more goodwill towards measures such as this.

Deputy P. J. Sheehan

I am disappointed that the Government has chosen to deal with the Forestry (Amendment) Bill 2009 with indecent haste. It is always said that rushed legislation is bad legislation. There are many Members of this House who would like to contribute to the debate on this Bill. However, this will not be possible given a guillotine has been applied to it. This emergency legislation was drafted last week and is set to pass all Stages within a few hours. This is not proper governance.

When was the need for this legislation notified to the Minister of State's Department and by whom? What is the need for this emergency legislation if Coillte has been compliant to date? Could the Minister of State not have waited for the proposed forestry Bill, promised for the past four or five years? Where is the fire? The Minister of State has told the House the purpose of the Bill is to reform and update the legislative framework relating to forestry to support the development of a modern forestry sector that enshrines the principles of sustainable forestry management and protection of the environment.

The Bill will also allow for change of land use from forestry to other sustainable uses and to provide a statutory basis for forest service guidelines and forest management plans. What is the point of the Bill if we do not have a legislative framework to support the development of a modern forestry sector? Where is the long promised forestry Bill? Does the tabling of this Bill also mean that it is unlikely the forestry Bill will be introduced during the lifetime of this Dáil? Can the Minister of State guarantee this House that all borrowings by Coillte during the past 10 years complied with existing legislation? I am suspicious about the timing and rushed nature of this Bill.

Coillte recently presented its 2008 annual report to the Joint Oireachtas Committee on Agriculture, Fisheries and Food and stated that it has been, since the middle of this year, in the process of restructuring its finances. My suspicion is that one of our hallowed financial institutions discovered, during the negotiations for this restructuring, a flaw in the statutory conditions under which Coillte operated. Hundreds of thousands of euro have been paid to auditors and legal advisers during the past 20 years. Did they ever raise this question and if not, why not? They have been paid professional fees to certify that the company's accounts are in compliance with the law and that taxpayers' money has been fully accounted for.

With regard to the deficit in the pension funds, has Coillte concluded negotiations about the deficit in the pension scheme? Are any of these increased borrowings being used to fund the deficit? I would like the Minister of State, in his reply, to state how the figure of €400 million was arrived at. Was this figure proposed by Coillte or decided by the Department?

Fine Gael has tabled the amendment that temporary borrowings should be limited to 25% of the statutory borrowing limit set out in the Bill. The fact that temporary borrowings amount to almost 70% of the statutory limit shows how this legislation was flouted. Fine Gael has also tabled an amendment that all temporary borrowings should be recorded in the annual report for that year to provide proper governance of Coillte and to ensure such irregular situations can never arise again and that all these agencies are within their statutory borrowing limits.

I note from the 2008 annual report that there has been no reduction in the directors' fees and emoluments. Will the Minister of State provide a guarantee to the House that a reduction will be reported in the 2009 report? I am concerned that employment levels in Coillte have remained fairly static in the past ten years. It employs approximately 1,200 people. Much contract work has been abandoned to the private sector and Coillte has taken a role in processing and manufacturing from the private sector. I want to see these increased borrowings targeted at creating sustainable employment.

Regarding the role of Coillte, I am reminded of what Mr. Nigel Henderson said: "The true meaning of life is to plant trees, under whose shade you do not expect to sit." I am concerned there is much about this Bill that is shady. If we do not have a proper debate on this Bill then these suspicions will remain. I would like to quote Professor Sara Ebenreck, an American writer on land use policy and values. She said: "Trees outstrip most people in the extent and depth of their work for the public good". I am not sure that the public good is being served by the enacting of this legislation here today in an hour and a half.

Deputy Michael Creed

Take note in Copenhagen.

Deputy Martin Ferris

An increase in the moneys available to Coillte is to be welcomed if this means Coillte will take a more proactive role in promoting forestry and the development of forestry based projects. Perhaps the Minister of State will clarify that point.

As was pointed out in last year's report of the Joint Oireachtas Committee on Agriculture, Fisheries and Food, there is considerable potential for the expansion of this sector in terms of alternative farm enterprises as part of the overall development of forestry based enterprises, which would benefit the rural economy and create jobs. There are ambitious targets for the expansion of this sector in the western counties. Under its wood energy strategy and action plan, the Western Development Commission forecasts a 300% growth in the wood energy sector during the next ten years, adding approximately €15 million annually to the region's income and create up to 900 full time jobs as well as saving 620,000 tonnes of CO2 emissions. When fully operative, it would be in demand from local farmers for 472,000 hectares of thinning which would be worth approximately €1.7 million annually.

Forestry provides an alternative source of income for farmers from land unsuited for stock or tillage. It can also be a source of input in the production of alternative energy, through biomass or directly through wood chips and thinnings. However, despite some efforts to encourage the growth of trees, the level of afforestation remains low. In 2002, approximately 724,000 hectares, 10% of the total land area, was under forest. This compares to an average of 42% in the EU 27. The one positive aspect was that 92% of forests was available for input into wood supply compared to the EU 27 average of 73%. A high proportion of Irish forestry is also in private ownership. Some 2,500 were directly employed in forestry in 2007, with a further 7,100 employed in wood processing. Net timber imports were valued at €375 million in 2007, representing a potential area of import substitution.

A more critical view of forestry would contend that the lack of planning in the siting of plantations has increased the isolation of some farms. There is also the perception that planting trees is a sign that one has accepted that farming, as it was traditionally conducted on the land, is no longer viable.

An Leas-Cheann Comhairle

I am reluctant to interrupt the Deputy, but I would like to have some interaction on Committee Stage and time is limited.

Deputy Martin Ferris

I will be approximately one minute.

An Leas-Cheann Comhairle

I thank the Deputy.

Deputy Martin Ferris

It has also been suggested that land capable of being used for food production not be allowed for the use of growing trees. That is a point that should be taken on board. There is good arable land being used for trees when there is ample marginal land that should be used.

Another matter related to Coillte I want once again to raise is that of Ballinaboy wood, which Coillte and its companies sold to the Corrib gas project. The wood, which was under the control of Coillte at the time, was sold to facilitate the terminal. Despite parliamentary questions and questions under the Freedom of Information Act, I and other Deputies cannot ascertain what was paid for that land. Perhaps the Minister of State, Deputy Tony Killeen, could clarify that point.

An Leas-Cheann Comhairle

I will give the same latitude to the Minister of State as other Deputies in this debate.

Minister of State at the Department of Agriculture, Fisheries and Food (Deputy Tony Killeen)

I will include the addressing of the amendment in my response.

An Leas-Cheann Comhairle

That would be helpful.

Deputy Tony Killeen

Deputy Creed raised the question of committee procedure and I will deal with that a little later. I will come to the amendment first. It is an important point and I will try to address it. The Deputy also asked about the level of afforestation, with which I will deal subsequently because it arises from what Deputy Ferris said.

Regarding Deputy Creed's key question, which was a question from almost everybody, the total sought by Coillte reflected the plans the company had in its draft strategic report for the next number of years. When it came into the Department, officials looked at it, and I looked at it in very considerable detail. For example, there were elements of the draft strategic plan that would have involved Coillte in, at one level, a welcome development in the wind energy sector. I looked at it in the context of concerns I had about the role of other Departments and other agencies. I was trying to ensure that Coillte's plans were properly in line with what everybody else was doing and also to ensure, frankly, that no particular risks were associated with Coillte's departure into the area of alternative energy. Such a departure by Coillte is hugely positive from a national point of view and, potentially, positive for the company in terms of its capacity to earn money in the future. At the same time, and returning to the point made by all of the Deputies who spoke, particularly Deputies Sheehan and Ferris, afforestation is a key element of Coillte's responsibility, although a person looking at the terms of reference for the setting up of the company in 1988 might well reach a slightly different conclusion. In any event, I was anxious that afforestation be seen as one of the key responsibilities of Coillte and I spoke strongly to the company in that regard.

There was quite a level of interaction between the company and the Department on the strategic plan. Ultimately, having considered all of the points made by the company and all our concerns, I concluded that €400 million was a reasonable level at this time to give the company the leeway to pursue various options and also to give us the kind of oversight that everybody in the House would wish.

Deputy Michael Creed

How much did the company look for?

Deputy Tony Killeen

To the best of my recollection, for a period of 40 years or some very long period, the company projected a necessity of €600 million or €700 million — some quite large amount — which would have reflected all of the projects which may be viable on Coillte property coming to fruition, almost exclusively financed by Coillte and into operation in a short time period.

When I examined the reality of the projects concerned, it was clear that a much longer timeframe is involved for the development of a considerable number of the projects. It was also clear that strategic partnerships with companies in the business, including another semi-State company, the ESB, removes some of the need for some of that borrowing by Coillte or its subsidiaries. In some instances, it was at least worth examining the option of realising the value of the site rather than investing directly in it. For a variety of reasons associated with that type of consideration, my view is that €400 million is sufficient in the immediate term.

Regarding section 24(2) of the Forestry Act 1988 and the amendment proposed by the Deputy, the position is that Coillte may borrow money temporarily with the approval of the two Ministers, as I stated. The proposal in the amendment is to limit the amount for which Coillte may seek approval under this provision and also require the express approval of Dáil Éireann.

If we were to amend section 24(1), it would, in fact, allow Coillte to seek approval to borrow up to €400 million. The amount of the increase received much consideration and it was concluded, as I explained, that €400 million would be an adequate level in the medium term. There was a certain amount of head room for contingencies and it is not envisaged that this proposed level would be sought in the immediate future. It is also envisaged that Coillte would not need recourse to temporary borrowings as the overall limit will have been increased.

Temporary borrowings under section 24(2) must be approved by the Minister, as I stated, with the consent of the Minister for Finance. If the purpose of the amendment is to impose controls on temporary borrowings, it should be noted that such approval would only be given on the basis of a sound business case submitted by Coillte, which would receive in-depth consideration in both Departments. The level of borrowing is monitored on an ongoing basis and it is notified to the two Departments on a monthly basis, which is probably more frequently than Deputies might realise.

In view of these controls, to require the express approval of the Dáil could be regarded as unnecessary as it was considered that commercial State bodies would manage the enterprise or business assigned to them with appropriate levels of control and oversight provided in governing legislation. This is strengthened, in my view, by the obligations in the code of practice, as amended earlier this year.

Deputy Michael Creed

I seek clarification on something I do not understand. The temporary borrowings are in addition to the €400 million, are they not?

An Leas-Cheann Comhairle

I want to let the Minister of State conclude and I will call the Deputy again.

Deputy Tony Killeen

I will be coming to that specific point in response to one of the points raised by Deputy Sherlock.

On the second aspect of the amendment, the moneys borrowed temporarily shall be noted in the annual report of the company for that accounting year. The annual report and accounts of the company already show the net debt at the beginning and end of each year on one of the notes in the financial statements, and as the statutory borrowing limit is as provided in the Act, it is clear for anyone calculating what are the amounts of temporary or long-term borrowings. That is already de facto in each of the annual reports.

On the additional points, Deputy Sherlock mentioned the inflation level, which, frankly, I thought should be bigger than that but which, on checking, appears to be correct. The current borrowing level, including the €100 million, is €188.9 million. This includes temporary and long-term borrowing. The Deputy is right that under the original legislation it might be possible to provide up to €260 million, but we have considerable concerns in that regard. In view of the fact that we were competing for resources at the level of the Parliamentary Counsel and the drafting offices, I decided to come forward with this and I will explain why.

Deputy Sherlock mentioned that in my speech — I only managed to deliver approximately half of it so he might not have seen all of the original text — that there was no reference to the pensions deficit. My reason for this is that it is not an immediate issue for 2010. It is more a medium-term issue to be addressed in the context of the strategic plan, and perhaps also in the context of the other legislation I mentioned.

I would also have liked to have gone into some detail, for example, on the voluntary early retirement scheme which Coillte introduced last year, but that was not possible in the time allowed. Regarding the remuneration of the board and the CEO, I understand that the 10% which is being applied to all boards has been applied in that regard. In the context of the overall borrowing requirement, the CEO's remuneration is obviously not very large. Although there is a case for considering the remuneration of CEO, it is not necessarily central to this Bill.

Deputy Sherlock mentioned the audit of the Coillte Forestry Stewardship Council. I take the stewardship council and its views very seriously. It is something that we raise on a regular basis with Coillte, more frequently, in fact, than in some of the standard meetings.

Returning to the original question raised by Deputy Creed, which was also raised by Deputy Sherlock, regarding the appearance of Coillte before the committee, I was not present but I read the entire proceedings of the meeting. That was a while ago and I do not remember the specific detail particularly well. Nevertheless, if the point being made by Deputies is that any company appearing before an Oireachtas committee ought to be open in respect of the procedure then I very much agree that should be the case. There is little I can do about it because I am not there on every occasion, except to confirm I would be pleased to appear before the committee on this and related issues. In addition, I would be pleased to appear before the committee when the review has been completed and to outline anything that may arise. Alternatively, if the committee seeks to have an input into that review I would be pleased to accommodate such a request if we can find a means to do so. There is a fundamental point at issue and I agree with the Deputies that the House has a role of scrutiny that should be accommodated. A space should be provided for it and if it cannot be done between companies and an Oireachtas committee, I would be pleased to facilitate such scrutiny for any of the companies for which I have responsibility.

Deputy Sherlock queried whether the extra borrowing allowed for carbon offsetting measures. This is a matter I seek to have addressed as part of the review. I have made it clear to Coillte that its afforestation remit must be considered not so much in the context of this borrowing requirement, but of its strategic plan.

Deputy Sheehan complained about the rushed legislation. There could have been well in excess of two hours for this debate had there not been daft votes on other procedural wrangles. In any case, none of us has any control over that.

Deputy Michael Creed

Is the legislation so urgent that it must be dealt with today?

Deputy Tony Killeen

I will inform the Deputy why I believe this is the case. He made the point that we could have waited for the Forestry (Amendment) Bill and that was my initial preference. He also asked when it was notified. There has been a concern for a long period that it would be better in this case to have the borrowing requirement in the normal sense rather than under the provision for temporary borrowings. This matter has be ongoing for the length of time to which Deputy Sheehan adverted, some five or six years or longer. I would have preferred to address it in the main Bill but I took the view there was an urgency.

There is another urgency related to the reality of the current situation in the banking sector. There are two issues for every company — access to borrowing and the cost of such access. I believe Coillte will be in a more robust position in its dealing with banks when this legislation is, hopefully, passed. Deputy Sheehan also queried whether the borrowings comply with legislation and my view is that they do so. He also raised an important point about land use policy, a matter central to one of the reviews under way. We can discuss that matter in the committee or here at that stage.

Deputy Ferris referred to the need for a more proactive role in afforestation by Coillte. To be fair to the company, there is a question of land availability and a major question regarding the price of land. There is also a question because Coillte does not benefit in the way farmers and companies involved in afforestation do with long-term premiums. It competes with people in a position of considerable financial advantage, something we should keep in mind. Deputy Ferris also referred to EU planting levels which are vast by comparison with ours. It is worth remembering that one century ago only 1% of the land surface of Ireland was covered in forestry. That figure is now 10.5% and there has been considerable State investment in that change, some of which has come from the State and some from Coillte. We have come along a good deal. There is a target of 17% and we must find ways to address it. There are environmental concerns and various land use issues which arise. Although these are not central to this legislation, we will deal with them in a subsequent debate. The Deputy also referred to issues of employment, import substitution, increased isolation and farming viability all of which are important issues but none of which are related to the borrowing requirement of Coillte, although they are related to afforestation.

Deputy Michael Creed

I thank the Minister for his reply. Let us be clear about the purpose of the amendment. If I walk into my bank and seek a temporary financial arrangement, it is because I have hit an unforeseen difficulty and I need money to tide me over that. It is not too great a leap to suggest if Coillte requires money on an temporary basis, it is because of some unforeseen or short-term financial difficulty. The purpose of the amendment is to restrict the degree to which it can dig in to its overall borrowing requirement or capacity, which we would prefer to be used for solid business investment, for such purposes as increased plantation and increased economic activity that will create jobs and profits for the company and a dividend for the State. The purpose of the amendment is to acknowledge that in any business there is a time when short-term emergency financial cover is needed, but that Coillte should not fritter away all of its borrowing requirement on that basis. There should be a sound strategic investment behind the vast majority of any borrowings. The amendment proposes that Coillte should only have temporary borrowings of up to 25% of the total maximum borrowings and that if the company wishes to exceed €100 million of temporary borrowings, it must have the express approval of Dáil Éireann. I believe this is a very sensible safeguard not least because we do not have time to tease out all the issues in this legislation, but equally it is a very solid, sensible business proposition because in any circumstances one should not dip into a potential capital fund for investment to deal with short-term or day-to-day financial difficulties, whether to meet incidental expenses on a daily, weekly or monthly basis or to deal with pension issues. The amendment is a solid proposal which the Minister should consider.

When I moved the original amendment I did not refer to the second part which states that money borrowed temporarily at any point in the accounting year should be noted in the annual report of the company for that accounting year. I do not accept the Minister of State's statement that the level of indebtedness and details to the effect that certain debt was used for purposes X, Y and Z are contained in the annual report. It does not indicate that €50 million was borrowed for new capital or timber extraction or that €5 million of the temporary borrowing requirement was used to shore up the pension fund. Such detail is not provided. I call on the Minister of State to reconsider his statement because such detail is not available in the annual report, although it should be because such safeguards would protect the public purse.

Deputy Seán Sherlock

I refer to the issue of inflation, the 1988 Act and the Minister's response to questions put. My understanding of the Forestry Act 1988 is that at any one time the aggregate borrowings of the company should not exceed £80 million or €101.5 million in today's money. The Minister of State stated borrowings had reached €182.5 million in October 2009 and that this is accounted for by inflation. Perhaps I misunderstood the legislation or I am naive but my understanding is the figures set out in the 1988 Act are finite and definitive and that there is no allowance for inflation within the 1988 Act. Perhaps my interpretation is wrong and, if so, I will stand corrected. If borrowings increased beyond the limit at any time between 1988 and 2009 there should have been an amendment to the 1988 Act to facilitate such a change long before now. The importance of the point is that if the Minister of State allowed for inflation or if such a measure were not in the 1988 Act, then the Government should have amended the legislation long before now and this raises a question over any borrowings in excess of €101.5 million in the intervening period. Will the Minister of State clarify this for my satisfaction and understanding?

I refer to the Fine Gael amendment, which is reasonable because the tone of the debate from the Opposition side of the House has been such to ensure Coillte is subjected to a greater degree of scrutiny. As we stated, Coillte was before the committee and there was no mention of potential for increasing its borrowing requirement at that stage. That throws up a question about the role of the Joint Committee on Agriculture, Fisheries and Food. When witnesses from the semi-State sector report to the committee, are they obliged, in the interests of transparency, to let members know what their strategic requirements are, particularly with regard to borrowing? I ask the Minister of State to respond to that.

Questions regarding the remuneration of the chief executive officer and other high-ranking staff were not answered adequately by the Minister of State. There is a question mark over whether the borrowings are for the purposes of remuneration or to meet deficits in the pension. I understand the Minister of State said this would be dealt with in further legislation but it is also pertinent to this Bill, in particular, to the amendment put down by Fine Gael and supported by the Labour Party.

Deputy Andrew Doyle

The aim in the programme for Government is to achieve 17% afforestation. Are we talking about a particular facility for the semi-State company, and have the Department of Agriculture, Fisheries and Food and the Department of the Environment, Heritage and Local Government been involved in drafting a management plan for Coillte's diverse role in the programme for Government for the future? If they have not, and the Minister of State attempts to give Coillte the facility to borrow this amount of money, it seems as if that body is being allowed to work independently. I agree with Deputy Sherlock's call for a greater level of accountability to the committee and the House.

Perhaps the Minister of State might update the House on the voluntary retirement scheme. Did Coillte get the numbers for which it had looked?

I refer to part of amendment No. 2 which states: "(a) Monies borrowed temporarily at any point in the accounting year under this subsection shall be noted in the annual report.” This is vital. We saw that two financial institutions, Anglo Irish Bank and Irish Nationwide, traded loans between one another during the year and the accounting figures at the end of the year showed no sign of it. By the time it was discovered it was far too late. We have the right to know about any loans that are borrowed temporarily and repaid during the accounting year. Perhaps amber or red lights should go up with regard to why this practice took place. It is common sense that this should be noted in the annual report. It is vital because there is no point discovering this after the event, when the damage is done.

Acting Chairman (Deputy Jan O’Sullivan)

The Minister of State has approximately half a minute to reply because I must put the question at 1.45 p.m.

Deputy Tony Killeen

With regard to temporary borrowing and short-term difficulty, as mentioned by Deputy Creed, I am not aware of any difficulty, if such exists. Headroom is allowed here to deal with a number of proposals under the strategic plan put forward by Coillte. For example, if one considers the two plants, considerable investment has been put in place already in Medite, with some more required. Something similar is required in Smartply to make it compatible with the kind of requirements in board quality that would make it capable of competing internationally in the export market. With regard to the €400 million, the main Bill will be published long before anything close to that is even reached.

I appreciate the point the Deputy made with regard to safeguards in the Bill but am concerned that the manner in which it is tabled in this amendment might cut across the requirement, in accounting practice terms, for companies to present their annual reports in a particular way.

Regarding the 1988 Act, raised by Deputy Sherlock, I understand the provision relied on is section 24(2) which states:

The company may borrow money (including money in a currency other than the currency of the State) temporarily but the aggregate at any one time of such borrowings shall not exceed such amount as has been approved by the Minister with the consent of the Minister for Finance.

That appears to me to sit separately from the requirement in section 24(1)(a) concerning the overall limit. They are parallel requirements. The overall limit is for the other borrowings and this is for the temporary borrowings. However, temporary became a little long-term and that is what I am trying to address.

Acting Chairman

As it is now 1.45 p.m. I am required to put the following question in accordance with an Order of the Dáil of this day: "That in respect of each of the sections undisposed of that the section is hereby agreed to in committee; the Title is hereby agreed to in committee, the Bill is accordingly reported to the House without amendment and Fourth Stage is hereby completed and the Bill is hereby passed."

Question put and agreed to.

Acting Chairman

The Bill will now be sent to the Seanad.