I move: "That the Bill be now read a Second Time."
I am pleased to move the motion that this Bill be brought to Second Stage and that we would have a debate on it in the Chamber. I am also pleased that the Minister of State, Deputy Eoghan Murphy, is present to respond to it, and I understand he has an interest in this area.
That is very helpful. I look forward to the Bill passing Second Stage and ultimately moving on to Committee Stage.
People will wonder what this Bill is about and if this is an anti-smoking issue. It is not; it is a more moral issue. It is about whether the Irish people should seek to make profits out of the tobacco industry. Everybody would be unanimous in the view that we should not seek to make profits out of the tobacco industry or from investments in that industry.
The purpose of this Bill is to prohibit investment of public moneys directly or indirectly in equity debt securities issued by tobacco companies. The Bill will end once and for all the practice of the State holding investments in tobacco companies. Everyone will agree it would be immoral for the State to make a profit on the sale of cigarettes and that it should not be allowed to happen. This is a policy issue for the Oireachtas which must be addressed by the Oireachtas because legislation is required to introduce this prohibition on the investment in the tobacco industry.
This is a health issue as well as a public investment issue. The fact that smoking remains a huge cause of preventable deaths and disease in Ireland is accepted by everybody. Tobacco-related illnesses cost the State more than €1.5 billion in health care costs and loss of productivity each year. It kills 6,000 people per annum. I know that people who are vigorously campaigning to reduce the incidence of cancer in the country will support this issue. We know the high incidence of cancer among smokers. Allowing for the fact that we are doing a great deal to encourage people to stop smoking, on the other hand it is incongruous that the State should be investing in the tobacco industry to make money out of the industry.
An average of 16 people die each day from the effects of smoking, tobacco-related cancer or other illnesses. More than 81,000 hospital bed days are taken up treating people with preventable cancer arising specifically from smoking. It is an issue everybody takes seriously and I am very pleased that Ireland has a very strong tradition in this area. Many years ago, when my party leader, Deputy Micheál Martin, was the Minister for Health and Children, he introduced a ban on smoking in public areas and many workplaces. That is a measure many countries throughout the world have introduced and have followed Ireland's course. I would consider the passing of this Bill an extension of long-established practice in Ireland.
I will explain the reason I am introducing this Bill. I have been Chairman of the Committee of Public Accounts since last July, and I took this view when I saw something at the Committee of Public Accounts that required changing by way of a legislative measure. On 26 July 2016, the National Treasury Management Agency, NTMA, and the Ireland Strategic Investment Fund appeared before the Committee of Public Accounts to deal with the normal work in respect of which they appear before the committee. Towards the end of the meeting, I specifically asked the representatives about their ethical and social responsibility policies and they wrote to me shortly afterwards stating that ethical investment and other issues focus on aligning investors' social objectives or values with their investment portfolios. They stated that they look at issues such as alcohol, tobacco, gambling and ethically compromised companies such as weapons manufacturers. We have legislation in place which prohibits investment in the cluster munitions and anti-personnel mines industry. It was introduced in 2008. This is the only line of investment from which the Ireland Strategic Investment Fund and the NTMA are prohibited from investing in by law. I want to extend the legislation we introduced banning investments by the State in the cluster munitions and anti-personnel mining industry to the tobacco industry. That is the reason I am introducing this legislation in the House.
The NTMA and the Ireland Strategic Investment Fund are legally obliged to get the best return for the Irish taxpayer. If there is profit to be made in an area, they cannot willy-nilly decide not to do it because they do not like it. They need a legislative framework to make such strategic decisions and sometimes that has to be backed up by primary legislation passed in this House. It is important that we give a lead in this area. I am aware there have been many other calls to limit investment in the fossil fuel and many other industries.
They are bigger, broader and have far more profound impacts on our entire quality of life and what people do, whether it is driving cars or heating homes, factories, offices and workplaces, including even a building such as this. I accept that Bills on these issues may be introduced as well, and they would merit serious consideration, but this is a niche Bill on a specific, narrow area. I think people will appreciate it should not be confused with the broader issue. It is part of a broader debate, but I think we can, in the meantime, isolate the issue of investments in tobacco and deal with it individually.
As I said, I was pleased to receive correspondence from the NTMA via the Committee of Public Accounts, in light of my questions to the NTMA's representatives last July, stating that it would examine this area. I have with me the letter I received from the NTMA on 16 September. It covers many issues, among which, as I mentioned, the fact that it was due to examine this area in light of the fact that we raised it with the NTMA's representatives in the Committee of Public Accounts. I have no doubt but that it was already in their minds. They said they were reviewing their investment policy decisions. I am very pleased they had an open mind and was also very pleased with the open response we received from them.
I also acknowledge my colleague, Senator Keith Swanick, who raised this issue in the Seanad by way of a Commencement Matter some months ago. Being a doctor, he came at the topic from a health point of view. We all come at it from that point of view, but he has a particular interest in health matters. I thank him for raising the matter in the Seanad. It is important to highlight the matter in both Houses. He made it clear:
We know from the NTMA's most recent annual report that the State held more than €7.2 million in quoted equity and debt instruments for Philip Morris, British American Tobacco and other major tobacco firms. This is incredible [but] is [a small portion] of [the] €35 million of taxpayers' money invested in the alcohol, tobacco, aerospace and defence industries.
Again, the key point I am making is that we want to isolate this investment in tobacco and I think we can do it.
I was working on the Bill over the autumn when I got the response from the NTMA. I worked on producing a Private Members' Bill towards the end of last year and sought to introduce it here last December but the Christmas break came. It was the first week of January before I got to introduce it. I was delighted to see on 21 December a press announcement that the Ireland Strategic Investment Fund had sold off its stake in tobacco companies. When I came into the House to introduce the Bill, I acknowledged that the Ireland Strategic Investment Fund had made the practical efforts to do so. I was very pleased that it did so and was being proactive, and it was very important that it did so. Given that the divestment is voluntary, this policy decision could be reversed by the NTMA and the Ireland Strategic Investment Fund at a future date if the financial return from the industry was to change. Therefore, it is important we put into legislation what is now their policy so there will be a legislative provision in place preventing anyone with a key role in the NTMA or the Ireland Stategic Investment Fund who may not have the same view of this matter as some of us do from reinvesting in these industries at a future date. I want to make sure this can never happen. The legislation acknowledges the position as adopted and implemented by the Ireland Strategic Investment Fund. We are on the one track on this. We all agree with the need to divest; I just want to go that step further by copper-fastening it in legislation.
I understand the Minister of State at the Department of Finance will support the Bill. I hope he will. I will be honest and say I read the 2008 legislation banning cluster munitions, and the wording of this Bill is almost a mirror image of that Bill. I have taken out the references to armaments and cluster munitions and substituted references to the tobacco industry. I accept I am no parliamentary draughtsman, but the essence of the Bill and the way in which it has been drafted must in substance be very good because it is a mirror image of legislation the House has passed on a previous occasion, bar a few words. I took this approach in order to make the passage of the legislation through the House easier. Rather than having to break new ground by drafting new legislation, I told myself I would work on legislation that has already been approved by the Oireachtas and make the minimal changes to achieve my aims in respect of the tobacco industry, and that is what I have done. I do not know whether the Bill requires pre-legislative scrutiny. I do not know the exact procedure in that regard. If it does, well and good - I think there will be agreement on it - but it should be passed through the Houses easily. I know there is a large backlog of legislation moving from Second Stage to Committee Stage but I hope this Bill can be progressed.
I wish to make a few specific points about the Bill itself. It is very short legislation. Section 1 deals with the definitions of "investor", "Minister", "public moneys" and "tobacco companies". Section 2 deals with the duty of investors to avoid investment in tobacco companies, and this refers to the Minister for Finance and, through him, the Ireland Strategic Investment Fund and the National Treasury Management Agency. Section 3 deals with direct investment in a tobacco company and investments in a company which the Ireland Strategic Investment Fund may be involved in. If that company goes on ultimately to acquire an interest in the tobacco industry, after the State has purchased shares in the company, it is provided that the company must divest itself of that investment. Section 4 deals with indirect investment in the tobacco company. This is to deal with various financial products that might not directly constitute shares. We want to cover those issues in those companies as well. Section 5 deals with the same issue in the case of derivatives based on a financial index. In other words, section 5 proposes: "Nothing in this Act shall prevent an investor [as in, the Irish State] from contracting derivative financial instruments based on a financial index." Many investments will involve spreading an investment over a group of companies based on a financial index. That index may include some companies that have investments in the tobacco industry. Specifically not to make a provision for investment on a financial index might inadvertently prevent the Ireland Strategic Investment Fund investing in a financial index in which it might otherwise wish to invest, so it is important that we allow that to happen. However, this is really to stop specific investment in those companies. Finally, section 6 is the Short Title and commencement, and the idea is that whenever the Bill might pass through the Oireachtas, the Minister would then introduce a commencement date.
I commend the Bill to the House and I hope it will receive support across all parties and Deputies in the House and that it will progress through Committee Stage and pass through the Oireachtas fully this coming year.