I move: "That the Bill be now read a Second Time."
I am pleased to bring the Industrial Development (Amendment) Bill 2018 before the Dáil. This short, but important Bill addresses the implications of a 2015 Supreme Court judgment and will ensure that IDA Ireland can continue to purchase property for the purposes of industrial development. This is essential if the agency is to have the continued capacity to provide the property solutions to companies that will help attract future investments to Ireland, particularly to the regions, and therefore generate jobs throughout the country.
I intend to begin by explaining how the need for this Bill has arisen, then describe its provisions in more detail, and finally provide further context as to why the legislative amendments are important to IDA Ireland's ongoing work to increase foreign direct investment in Ireland. Let me start by explaining the genesis of the Bill. In 2011, IDA Ireland sought to acquire land in County Kildare, by compulsory purchase, for industrial development purposes. It is important to note that this was the first and only time IDA Ireland had ever sought to purchase property compulsorily and, in doing so, the agency relied on the existing compulsory purchase powers it had been furnished with in legislation. The landowner concerned, however, successfully challenged the compulsory purchase order by way of judicial review.
There were two key findings in the Supreme Court judgment. First, the Supreme Court determined that the agency had acted ultra vires because the legislative provision on which it relied in this instance, namely, section 16 of the 1986 Industrial Development Act, does not empower IDA Ireland to acquire property for future, as opposed to immediate, use. The court also set aside the compulsory order because IDA Ireland did not, as per the terms of that legislative provision, identify a specific company for which the property was being acquired. The court made clear that both of those determinations would apply equally to instances where property was being acquired by agreement. While the facts of the case concerned a compulsory acquisition, the court's judgment also, therefore, had implications for IDA Ireland's purchasing-by-agreement powers. Second, the court determined that current legislation does not provide for an independent body, such as An Bord Pleanála, either to affirm any proposed compulsory purchase order or to adjudicate on any objections to such an order. It followed from the judgment, therefore, that it is necessary that an appropriate independent body be legislatively designated to fulfil that particular role.
The Industrial Development (Amendment) Bill 2018 that I present to the House addresses each of those issues in full, as I will shortly explain in more detail. I want to be clear as well, before moving on, that while this Bill addresses those issues raised by the court, it does not equip IDA Ireland with strengthened powers. The aim is simply to put in place an updated and modernised process that incorporates a full role for An Bord Pleanála in compulsory acquisitions so that IDA Ireland retains its current industrial development property purchasing powers. This Bill's provisions do not, therefore, represent a policy shift in terms of IDA Ireland's approach to purchasing property.
I will now give an overview of the Bill to the House, bearing in mind that I have already explained that this is a relatively short and technical Bill. First, the Bill ensures that IDA Ireland will continue to have the capacity to acquire property compulsorily on an exceptional basis in very limited circumstances and subject to strict requirements. Any such compulsory purchase will be subject to far more stringent requirements than those for standard purchase by agreement, namely, that it must be for immediate industrial development use and that IDA Ireland will need to have a specific client in mind to use the property.
As per the terms of the Supreme Court judgment, provision has been also made in the Bill for an independent body, which is An Bord Pleanála, to undertake a full adjudicatory role in the process, a role that is very much aligned to its existing role in compulsory purchases carried out by other State bodies. Second, the draft bill will ensure that IDA Ireland can continue purchasing property by agreement, even when it is for future use and no specific company has been identified as the beneficiary of that acquisition.
I will now describe how these amendments will function in more detail. In summary terms, the Bill amends section 16 and the Second Schedule to the 1986 Industrial Development Act and also applies certain provisions of the Housing Act 1966 in relation to compulsory purchases, and certain provisions of the Planning and Development Act 2000 in respect of the role of An Bord Pleanála. Sections 3 and 4 of the Bill amend section 16 of the Industrial Development Act 1986 and make it very clear, for the avoidance of doubt, that IDA Ireland can continue to acquire property by agreement, that is, not compulsorily, in circumstances where the property is not for immediate use, and whether or not a specific industrial undertaking has been identified in advance. Many Members will be aware that the agency has always operated on this basis when purchasing land by agreement with landowners, so this does not represent a change or a new departure in any respect. Sections 5 and 6 of the Bill provide that IDA Ireland will only be permitted to purchase land compulsorily in circumstances where it is required for immediate, as opposed to future use, and a specific undertaking has been identified. Section 6 provides that the compulsory purchase powers are to be used in accordance with the existing and well-established compulsory purchase processes set out in the Housing Act 1966. The Bill also provides that compulsorily acquired land can only be leased, as opposed to sold, by IDA Ireland to an industrial undertaking. This important safeguard serves to ensure that land that has been compulsorily purchased is put to immediate industrial development use, whilst ultimately remaining in State ownership. Section 7 of the Bill applies some of the existing provisions of the Planning and Development Act 2000 as it provides for a full role for An Bord Pleanála as an independent body to affirm compulsory purchase orders made by IDA Ireland. In addition, the legislation provides an adjudication role to An Bord Pleanála with regard to objections related to a compulsory acquisition. As I emphasised earlier, the role assigned to An Bord Pleanála in any future IDA Ireland compulsory purchase closely mirrors its existing role in compulsory purchases earned out by a wide range of other State bodies.
I will now finally expand further on the policy and operational context to the Bill. Given the critically important work IDA Ireland carries out, particularly in terms of trying to support regional development, it is essential that no legal uncertainty, no matter how small, attaches to its property purchasing powers. Otherwise we risk diminishing the agency’s capacity to attract further foreign direct investment and generate new employment opportunities across the country. The availability of industrial property in suitable locations is, of course, a key factor in encouraging multinational companies to locate here. A vital aspect of IDA Ireland’s work therefore remains, as has been the case for many years, connecting those firms with property solutions. To be able to do that effectively, IDA Ireland needs the continued capacity to purchase properties so that they can be offered to potential investors. This means that IDA Ireland must have the capacity to buy property, for the purposes of industrial development, in situations where it may not be required for immediate use and where a specific company has not yet been identified as the ultimate beneficiary. This is especially important in the context of the agency’s work to increase foreign direct investment in rural and regional locations, given that the vast majority of IDA Ireland property purchases are outside of the country’s main urban areas.
As regards the compulsory purchase element, while IDA Ireland very rarely employs its compulsory acquisition powers - as I mentioned earlier, it has only ever done so once - it is important that it retains its statutory power to do so if the agency is to be able to meet its mandate. Without compulsory purchase powers, IDA Ireland could potentially miss out in the future on extremely significant investment opportunities that could have a transformative impact or effect on a local community in terms of jobs created.
I will close by emphasising again that regional development is one of the key priorities of this Government, of my Department and of IDA Ireland. We are committed to doing everything we can to both sustain and create employment opportunities all over Ireland and IDA Ireland has a huge role to play in that work. That is why this Bill is particularly important and I am therefore asking this House to support this legislation.