JOINT COMMITTEE ON COMMUNICATIONS, MARINE AND NATURAL RESOURCES debate -
Wednesday, 5 May 2004

Scrutiny of EU Proposals.

Chairman

Before I welcome the officials from the Department, I advise members that the various proposals have been grouped. It is proposed to discuss COM (2004) 76, COM (2003) 767 and COM (2003) 476 together, COM (2003) 739, COM (2003) 740 and COM (2003) 741 together and COM (2003) 451 separately. Is that agreed? Agreed.

I welcome Mr. Maurice Mullen and his officials who will take us through the first group of proposals. The format is for a presentation followed by a question and answer session. We are grateful for the information the Department submitted to the joint committee to allow us to read the brief. I ask Mr. Mullen, therefore, to summarise the brief rather than read it in its entirety.

I draw attention to the fact that members of this committee have absolute privilege but the same privilege does not apply to witnesses appearing before the committee. While it is generally accepted that witnesses should have qualified privilege, the committee cannot guarantee any level of privilege to witnesses appearing before it. Further, members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House or an official by name in such a way as to make him or her identifiable. I ask Mr. Mullen to introduce his officials.

Mr. Maurice Mullen

I am delighted to be before the joint committee again. We have three proposals on which we have sent the committee information we hope will be helpful. If we can provide further information, we will do so. Accompanying me are Ms Mary Lally, the principal officer in the Department responsible for maritime safety, Mr. Paul Vickers, a specialist on port security, Mr. Brian Hogan, the Department's chief maritime surveyor, Mr. David Taylor, a marine surveyor, and Mr. John McDermott from the Department of the Environment, Heritage and Local Government.

Of the three regulations under discussion, two directly affect our Department, while the third, on sulphur content, is a shared issue with the Department of the Environment, Heritage and Local Government. All three are very active issues with direct application to Ireland and we are steering them through working parties under Ireland's Presidency.

The first regulation is currently before a working group and is a proposal for the application of international safety management - ISM - code. These are guidelines for best practice in management on ships. Under the SOLAS agreements, the international agreements governing shipping, the ISN codes apply. The European Union is doing two things in this instance. It is embedding in EU legislation the provisions of the SOLAS Convention and taking the matter a step further by extending them to certain categories of passenger ships with the objective of enhancing safety. The EU's view, which is not an unreasonable one, is that passenger ship safety and domestic passenger ship movements benefit from the ISM code as well, because they are significant vessels. I have specialists with me who can discuss the detail.

We welcome this as a way of improving the general operational management of ships. In our case approximately six ships would be affected by the application of this directive. I refer in particular to the ships serving the Aran Islands and so forth, which are larger ships. We are confident those ships can comply with the directives in question. The directive is being processed through the working party under the Irish Presidency and we would hope to have agreement on it for the June Council.

The second proposal relates to port security. This is one of the most contentious issues currently on the maritime safety and security agenda. Arising from the 11 September tragedy in New York, the International Maritime Organisation considered measures to enhance port security generally. Agreement was reached in the International Maritime Organisation and the Community wished to incorporate new port security measures into Community law.

In simple terms this means that for every port that wishes to operate on an international basis, there must be security measures that involve an assessment of the security risk; an independent audit assessment of that risk; the preparation of security plans; the appointment of security officers and a regime to maintain security. A framework has been established by the Department in association with the Garda Síochána and the naval authorities for drawing up the security plans. Ireland has to meet the deadline for the introduction of this regime by 1 July, which we are in a position to do.

The proposal before the committee is an extension of the security regime. The one coming in on 1 July affects ships and will link ships and ports. COM (2003) 76 extends the security requirement to the total port. Again, a security plan, an assessment approved by the Department, security officers and a security programme are required. It also requires a significant amount of work to be undertaken by ports to meet international requirements. The bottom line in regard to this directive is that, similar to the one coming in on 1 July on the requirement to secure the whole port, if we do not reach the international standard we will not be able to trade with other countries. That would be relevant in terms of the United Kingdom with which we have a significant trade. Effectively, our ports must operate at the highest international standards. This directive is a good operational directive which will cover the whole port area when agreement is reached on it.

The Commission intends to go further back along the chain towards the producers that load containers. Proposals are not on the table at this stage, although there is a great deal of discussion in that regard. The directive before the committee relates only to the port area and its perimeter. We will see how far it will extend in the next round. Due to current concerns, there is much consensus on the issue. The proposal is moving well through the working party arrangement.

The final matter for consideration is a directive regarding the sulphur content of marine fuels. The European Union has been taking action for some time to reduce sulphur content in fuels generally as part of its overall environmental emissions control policies. This represents a significant move into the maritime sector. Most of the steps in this regard heretofore have been in the land-based sector. I am sure members are familiar with those. In this instance, targets have been set. This is quite a technical directive. It incorporates IMO agreements into European Community law, but is more stringent than the IMO position. In this case, the European Union's view is that the directive should be introduced, that vessels visiting its ports should be forced to operate to a tighter timeframe than others in regard to new low emission guidelines which are set out in the directive.

We welcome this proposal with which Irish shipping can live. Part of the concern of international shipping with these types of directives is that the introduction of low sulphur fuels will result in higher costs and, depending on the level of shipping within the European Union, this would result in an increase in international shipping costs. Our view is that this is a good measure for which there is wide support. They are the three codes and I have experts who can deal with any aspect thereof.

Chairman

On COM 767, is there a limit to the size of vessel to which it applies? Does it equally apply to 10 m and 5 m boats?

Mr. Brian Hogan

It will be for class B and class A passenger ships, which are the larger passenger ships, in addition to domestic cargo ships over 500 gross tonnes. We have six ships in the passenger ship category but no domestic cargo ships of that size.

Chairman

Regarding COM 76, we made an interesting visit to the port of Cork in January. To how many ports will this apply, and how will it impact on Cork, for example, with the quays at Tivoli and Ringaskiddy?

Mr. Paul Vickers

I was in Cork about a month ago when I visited each of the nine port facilities affected by the current EU regulation. I went around with the harbourmaster. We have received the port facility security plans for Cork and Ringaskiddy and are assessing those. The security plans will require three levels of security measures to be put in place. The normal level is security level one, the day-to-day operating procedures that currently pertain within the port facilities. Obviously with the new security regime, certain elements within the port will need to be examined in terms of fencing and CCTV. They are being examined in the context of the security assessment that was carried out and will be addressed in the security plans.

Chairman

Who bears the cost?

Mr. Vickers

The ports.

Chairman

Is there any State aid?

Mr. Vickers

No. All member states have approached the issue of costing in the same way.

Chairman

Given the vastness of the port - I am referring only to Cork Port and I am sure other members will have experience of others - will the implementation of the regulation be a burden? Will it result in increased charges for the services the port provides?

Mr. Vickers

A total of 49 port facilities have been identified as being affected by the EU regulation.

Chairman

Are they in Ireland?

Mr. Vickers

Yes, they are spread over 19 ports. The risk and threat pertaining to each of those have been assessed. The question of whether additional works have to be carried out on the ports is determined according to the assessment of risk and threat. Certain port facilities are very small and may only be taking in crushed stone or timber, perhaps five or six times per year, and therefore the risk pertaining to such ports is quite low, such that the additional measures these ports have to implement are commensurate with that risk.

Deputy Eamon Ryan

I am concerned about this issue. We recently visited Cork Port. It involves a significant length of the seafront, including Cork city centre, Tivoli, Ringaskiddy and, to a certain extent, Cobh Harbour.

We could well do with relocating Dublin Port from the city centre and putting the valuable land it covers to better use. However, one of the attractions of its being there is that it allows me to see the boats and gain access to it. To fence off the south or north quays or the port area in Dublin, Cork or elsewhere - I have less knowledge of the other ports - is a remarkable task that would have a serious effect on the landscape. I would be concerned if access were to be denied to the port areas in question.

Regarding Cork and Dublin ports, for example, are we talking about restricting access completely to the docks as part of this measure? Will Mr. Vickers outline the security concerns? I am trying to think in the manner of a likely terrorist and I presume we are talking about someone gaining control of a fuel tanker and seeking to wreck it, run it aground at a highly sensitive location or ignite a cargo by way of explosion. Are these the concerns people are talking about?

Mr. Vickers

I will take the second question first. We are talking about a vessel being used to ram into a quayside. The other scenarios would include someone carrying a dirty bomb or a weapon of mass destruction and bringing it up the quays in Cork, for example. The one point that comes across when dealing with the issue of security is that one can never second guess what a terrorist will do. There is an infinite number of ways in which a terrorist could operate. All one can do is take steps to minimise or reduce the risk.

On the question of fences, I will reiterate the answer I gave to the Chairman. It is very much a question of the risk and threat pertaining to a port. There are three security levels, as I intimated, and Ireland will be operating at security level 1 on 1 July. Security level 1 is pretty much the level in place as of today. Therefore, it is not envisaged that each port facility will have to construct large palisade fences, use guards with dogs or CCTV. It depends on the threat pertaining to an individual port. Tivoli, for example, is quite easy to regulate in that there is only one way in and out. One could have security checks, including ID checks, at the entrance to the Tivoli industrial estate, in which case the area behind the entrance would be pretty safe. The industrial estate has fences and banks all the way around and it is quite difficult to get in. Elements of it also have CCTV.

The city quays are more difficult to protect because there is only a three-foot barrier between the public right of way and where the ships come in. When approving the port facility security plans, we will be considering how the port facility can best be protected.

Deputy Eamon Ryan

Large fences around ports are fairly superfluous because ports, by their nature, admit access by rowing boat. I would imagine that CCTV and some sort of control presence would be far more effective than physical separating devices.

Mr. Mullen

The Deputy asked a very important question on how we are looking forward on this issue. We cannot guarantee that our security level will always obtain because if the UK, for example, raised its security status to level 2, those ports trading with the UK would have to match that security level. The process is one of identifying the risk within the category set out. Wherever there is a change in security status, both sides of the water highway must match it.

Another very important point is that there is considerable interaction between Mr. Paul Vickers and the port colleagues. Part of our approach is to ensure the port's ability to develop security officer skills and solutions that will be pragmatic on an ongoing basis. This is one of the priorities we have identified and are working on. If there is higher trade in certain areas of ports, these areas can be dealt with separately. Ports would have huge bills if they had to apply a very high security level everywhere rather than to specific areas under their control. It depends on the level of trade and on how they can confine certain areas on the basis of the anticipated security level. The process is an interactive one.

We certainly share the committee's view that long lines of palisade fencing all over the place are undesirable. We need to find practical working solutions.

Deputy Kehoe

In this job, we must stick to our constituencies. I have a very important port in mine, namely Rosslare. Mr. Vickers stated he visited ports in Cork and I am not sure if he has visited Rosslare. What are the consequences for Rosslare? How would he compare port security to airport security? Is he considering having similar security measures in ports and airports, including the use of scanning machines and the placing of bags on conveyor belts, for example?

When Mr. Vickers refers to security, is he referring to stopping terrorists? I am not trying to frighten people and I presume Mr. Vickers has thought long and hard about the issue, but what are his biggest fears in that regard? Is he referring to all ports across the country? They cannot all afford to spend huge money on security and some ports could face closure in years to come.

Mr. Vickers

I will answer the Deputy's last question first. This relates to all Irish ports engaged in international traffic - where vessels are of 500 gross tonnes or more, of which we have identified 19 or so. With regard to Rosslare, I have been in constant contact with the harbour master, Captain Aedan Jameson. I received the port facility security plan for Rosslare last Friday and I received the plans and schematics for the port yesterday. I will be looking at the measures they propose to put in place in coming weeks, working with them to finalise the security plan. The issue of Rosslare is similar to a number of other ports regarding what Mr. Mullen alluded to in respect of trading with the United Kingdom, in that it is a high profile passenger ro-ro ferry terminal. From the UK's point of view, it is the highest risk pertaining. Therefore, the measures put in place in Rosslare will have to be rigorous and stringent to ensure that they are according to best practice and, because they interact constantly with the UK, that they are up to standards prevailing there.

Airport security is in some respects easier than port security because in an airport environment one is dealing with people, small amounts of luggage and small packages which will fit on a freight airliner. When it comes to port security, one is dealing with something on a far larger scale. There are foot passengers with their luggage, which is the same, but one also has cars, caravans and lorries as well as containers, which make up the vast bulk of shipping. Some 90% of the world's trade is done by sea in containers. To screen and search all of that is a far bigger task than is the case in respect of aviation. It is possible, and it will be in place, particularly for the four port facilities which deal with the UK passenger ferries. Passenger screening will take place. Further along the road, there will also be an element of container screening. The customs service is purchasing a mobile container x-ray machine which allows officials to see what is inside a container. However, it is not something one can do in 20 seconds, rather it can take between half an hour and an hour to x-ray one container. Given that a cargo vessel could have 100 containers, there can only be a certain element which can be checked.

Chairman

What will they be checking the container for? Will it be for people?

Mr. Vickers

In this context, we are talking about terrorism.

Chairman

Will they check for people or explosives?

Mr. Vickers

Customs and Excise will be checking for drugs and so on as well as people. We have an interdepartmental group comprising our Department, the Department of Justice, Equality and Law Reform, the Department of Transport, the Garda Síochána, the Naval Service and the Customs Service, which works together to introduce the maritime security measures.

In regard to the approval of assessments and plans, we have a smaller project team comprising members of the Department, the Naval Service and the Garda intelligence units. In regard to the biggest dangers and threats, we rely very much on the Garda intelligence services to identify threats to Ireland coming from a maritime source.

Senator MacSharry

In regard to the working group's deliberations in Brussels, has it engaged with all the ports and shipping companies so that it is fully representative in terms of its work rather than just representing an idealistic view, as seen from an office, to create a Utopian secure scenario? If so, what is the estimate as to the total cost of essential improvements to shipping companies and ports to become fully compliant with what was already stated? Is it variable if the UK changed the goal posts? Would we have to change up a gear? There are two costs, namely, the cost to comply as is and the potential variable to comply with requirements in, say, the UK or Rotterdam. If the goal posts are changed I am sure changes would also have to be made here. Can Mr. Vickers offer some more information on the issue?

Mr. Mullen

In regard to the liaison arrangement, we are working very closely with the representatives of the member states, where the practical arrangements of the directives are being worked out, including their being drilled down. Linked to that, we have on-going dialogue with the ports as part of developing their own plans and as a way of assisting them and learning in terms of what is the best way of implementing these arrangements.

It is important to make the point that it is for each member state to design the best arrangements based on the guidelines in the directive. That underlines the importance of having security staff competencies developed in ports so that they can do the job as cheaply as possible and in a way that best suits the port. We have also had bilateral discussions with Britain about the modalities and fine detail of how it is addressing the issue. The authorities there are grappling with the same types of problems, such as the desire to see the many small ports as viable also.

At present we cannot answer the second key as to what the cost will be. It will very much depend on the fall-out of the plans which are being developed and the solutions which are being found. While a number of ports are high profile such as Dublin, Cork and Rosslare in regard to the amount of traffic they manage, the question was asked where the small ports stand. They have a limited trade and will be able to operate at security level 1 which will have the lowest level of costs, not much beyond current operating arrangements. The big issue will be for Dublin, Rosslare and Cork, which have to deal with significant international traffic, including ro-ro traffic, in which case they need to be able to handle whatever security status arises from time to time - not just security level 1.

Chairman

I have a final question and we will then move on as there is a heavy agenda. With regard to the directive on marine fuels, I presume a refining process is required to remove the sulphur. Who is the expert on that? Will the new reduced-sulphur fuel be cheaper or more expensive?

Mr. David Taylor

As one might imagine, removing sulphur from fuel is not an easy process, nor is it cheap. Low-sulphur fuels are more expensive than traditional high-sulphur fuels. However, the content of sulphur in a fuel is a function of how it comes out of the ground or the sea. Sulphur is in crude oil when it comes out of the well, so the removal of sulphur is a refining process to a certain extent, but can only be done economically to a certain level. If one starts off with a high-sulphur fuel it costs that much more to reduce the sulphur to 1% or 1.5%.

Chairman

Mr. Taylor did not answer my question. He told us about removing fuel from the ground, which is not his job or my job. Will fuel be cheaper or more expensive due to the introduction of this directive?

Mr. Taylor

It will be more expensive.

Deputy Eamon Ryan

Could Mr. Taylor outline the duties that apply to marine fuels at the moment? In terms of security and possible risks, it seems that city centre port facilities for storing gas, oil or other flammable materials are particularly sensitive. I have seen gas-containing vessels come right to the edge of the city centre in Galway, while in Dublin Port the oil-storage facilities are close to large population centres. Have we considered the risks and assessed the suitability of having such gas and oil storage facilities in these locations?

Mr. Mullen

The question of duties is a matter for the Revenue Commissioners.

Deputy Eamon Ryan

Are there any duties?

Deputy Broughan

There is no duty on airline fuels, for example.

Deputy Eamon Ryan

Due to the international nature of the industry, perhaps countries refuse to apply duty in case people decide to purchase fuel in a neighbouring jurisdiction. Is that the case?

Mr. Taylor

I am not aware of the duty arrangements, so I cannot answer that question. The directive applies equally to all EU states. If a ship is to buy fuel, it must buy it within EU waters.

Deputy Eamon Ryan

The point behind the question is that we can tailor fuel duties to achieve environmental benefits. On a broader environmental matter, there is real concern about over-fishing at the moment and one of the ways this could be addressed is to apply heavy duties on marine fuels. Local ports would benefit from this as it discourages long-distance sailing by fishing vessels. I will need to ask the Revenue Commissioners about this, however.

Mr. Mullen

Galway is in a unique situation and this must be reflected in the security plan. I am not pre-empting the plan but clearly this consideration must be to the fore in its construction.

Deputy Ryan

It is remarkable to see such vessels in the heart of the city centre. Are there international comparisons to be made or is this very unusual?

Mr. Vickers

The assessment for Galway stated that Galway was unique in the kinds of traffic it receives vis-à-vis the location of residents, shops and so on. The assessment has taken account of cargo and location and the procedures that are put into effect in Galway will need to reflect the risk pertaining.

Deputy Broughan

The cost of removing sulphur is not regarded as significant, but as an island nation most of our trading takes place through ships, so it is particularly significant for our open economy. Is that not the case?

Mr. Mullen

Anything affecting the cost of transportation is of priority to us. In terms of the size of our economy, however, we are not the biggest player in this area. The benefits to the Union, and to Ireland, are substantial in terms of the drive towards lower emissions. All shipping will be subject to the same ground rules, so we will not be singled out particularly.

Deputy Broughan

We are also discussing COM (2003) 767, which deals with the ISM code. Does that apply to marine workers? Health and safety issues have been raised by the International Transport Workers' Federation, of which SIPTU is a constituent part in Ireland, in the matter of various vessels, particularly flag of convenience vessels. Does it give workers any remit over health and safety matters as far as the individual national plan is concerned? Will it give them additional protection? Crews are particularly important in this area of transport.

Mr. Hogan

The history of the ISM code goes back to the International Maritime Organisation. It has been applicable to international trading vessels from 1998. The directive takes the IMO into EU domestic legislation, so that it has competence in this area, and extends it to domestic passenger ships.

Internationally, ISM is of benefit to crews because it gives the ship management company responsibility for the training and safety of the crew and ensures compliance with international conventions. This has been the case since 1998. The extension we are discussing is the effect on Irish domestic passenger ships. Here we are dealing with services to the Aran Islands, which are already covered by our domestic legislation. As far as I understand the IPS will be concerned with international ships.

There is no increase in the legislation that has been there since 1998, but the ISM puts the onus on the ship management company to look after crews, train them properly and make sure IMO conventions are complied with. The ISM is like the roof of the house - it forces shipping companies to comply with all regulations and conventions.

Deputy Broughan

The legislation does not take us any further. When a ship is on the high seas, for example, there is no possibility of inspection by the country whose territorial waters it is in. There is still no mechanism for further development of health and safety at the international level.

Mr. Hogan

The ISM is just one chapter of SOLAS, chapter 10. It is not a code in its own right but it has taken on a life of its own. All the ports controlling flag state provisions which are in SOLAS and the Paris MOU are also subject to ISM. When we inspect foreign flagships in Ireland we will do so under ISM and we will detain them if they do not comply with this. ISM is a powerful tool. When there is no hard issue to pick on we can deal with a soft issue and relate it back to ISM. That has been effective for us.

Deputy Broughan

Does COM (2003) 76 confer any additional rights or powers on local communities and local authorities? Local authorities are represented at the big ports, but is there any additional influence they can have when it comes to Galway Port, Clontarf or Sutton? Local authorities are represented in the development of the big ports but is there any other influence they might exercise vis-à-vis the type of issue raised about Galway or that we might raise for Clontarf or Sutton, if they are close to petrochemical installations and so on. The document refers to the security committee. Do we need domestic legislation in addition to this?

Mr. Vickers

The ISPS code of the EU regulation does not specify rights or powers of the local population. In the case of any incident in a port or port facility everyone will be guided by the Garda Síochána as to what procedures must be followed in the event of an incident. We are preparing a statutory instrument which will cover areas on which the EU regulations are silent, such as the focal point or the designated authority, with regard to COM 76. Secondary legislation will be necessary to implement the provisions of the port security directive.

Deputy Broughan

Is that on the clár at the moment?

Mr. Vickers

No.

Mr. Mullen

There will be no provision for the local authorities to influence port developments. One must take a different route to influence those issues.

Chairman

Does Mr. McDermott have any information to share from the Department of Environment, Heritage and Local Government on the reduction of the sulphur content in fuels? Are there any land vehicles or stationary engines using this and will it affect many mechanical engines in land use?

Mr. John McDermott

No, because the land-based activities are legislated for up to the hilt and this is a catch-up on the marine side. There is a raft of EU and national legislation applying to most land vehicles and marine fuel on sea-going ships is high sulphur, heavy fuel oil which is at the lowest end of the excise duty regime. Under this proposed directive when ships are at berth they must use oil of the same sulphur specification as home heating oil for which the excise duty regime is more lax than for road diesel. This is aimed at certain types of shipping because all land-based activities, for example, power plants, the fuels in our cars and trucks have a very low sulphur level. There is a requirement that from next year some element of sulphur-free fuels, petrol and diesel will be introduced for cars and this is only starting the process that will bring shipping down to the levels of land-based sulphur content.

Chairman

We thank Mr. McDermott, Mr. Mullen and their officials for appearing before the committee and answering our questions. We wish them every success with their endeavours. Could Mr. Finucane and his officials, and Mr. Glynn and Mr. Kelly, come forward please? We also welcome Mr. Brennan. We will take the three regulations together starting with COM (2003) 739.

I will ask Mr. Finucane to speak first and to introduce the officials accompanying him. I remind everyone that members of the committee have absolute privilege but this same privilege does not apply to witnesses appearing before the committee, and the same applies to Mr. Glynn and Mr. Kelly and their respective officials.

Mr. Martin Finucane

The first directive is a briefing on a proposal for a directive of the Parliament and of the Council 739 of 2003, entitled Proposal for a Regulation of the European Parliament and of the Council on Energy End-use Efficiency and Energy Services. The background is the high energy consumption in the EU which is considered to be 20% higher than necessary. That is equivalent to an estimated untapped energy saving of 200 million tonnes of oil per annum. The open market has failed to deliver energy efficiency at end use. The purpose of the directive is to enhance efficient use of energy mainly through removal of barriers to the development of an energy end use efficiency market to the establishment of targets for reduction in energy usage, with the overall aim of achieving a 6% reduction in energy usage by 2012.

The principal features involved are overall energy savings of 1% per annum for member states of which 1.5% per annum for the public sector is a subset of the 1% target. In other words, it is not additional to the 1%. It aims for the provision of energy services by third party providers of energy efficiency services. Retail suppliers and distributors will offer energy services to customers and allow for individual metering and more informed billing for end-users. Article 4 covers energy savings, sets out the 1% annual overall target, and the cumulative 6% target to 2012. In reaching that, the impacts of energy efficiency measures since 1991 can be included. The directive allows for an independent public sector body to be appointed to oversee the implementation of the directive and annexes to the directive provide for the methodology, measurement etc. of the energy usage.

Article 5 sets out the public sector targets, the 1.5% energy efficiency savings target which is a sub-target of the overall 1%. It is more ambitious because public purchasing decisions can be more aggregated and guidelines easier to administer on public service. It also promotes the power of aggregated public procurement as a means of increasing demand for energy efficient technologies.

Article 6 covers the energy distribution or retail sales companies and allows member states to remove barriers and ensure the presence of energy service providers. It allows for energy audits to be provided and in some instances for energy information to be provided free of charge. It allows companies to provide information to designated public authorities. Article 8 allows for qualification of energy service providers, and for member states to ensure technical competence of energy service providers and provide appropriate training and certification in energy efficiency measures. It also imposes an obligation on member states to report to the commission on the effectiveness of these programmes. Article 9 provides for the availability of third party financing, energy performance and similar instruments for model contracts. These are permissive rather than mandatory articles.

Article 10 allows for tariffs and regulations for net-bound energy; it requires regulating authorities of distribution networks to ensure that tariffs do not encourage increased energy usage and also allows distribution companies to recover costs by inclusion in tariffs, if appropriate and fair. Article 11 covers the financing of energy efficiency programmes which includes the use of such funds for the promotion of energy service companies and for higher transaction and high-risk sectors. Article 13 allows for metering and informative billing. Member states must ensure accurate metering which should reflect real time usage and actual consumption. Billing must be frequent and information on normalised use, environmental impacts and contact details for services must be provided. This will allow consumers to better regulate their energy usage. Article 14, the reporting requirements of the directive, requires member states to report on progress two years after the adoption of the directive and every three years thereafter to 2012.

The legal basis of the directive is contained in Article 175 on environmental protection. Voting is by QMV and 1 June 2006 is the transposition date of the directive. The directive was recently introduced by the Commission and has had four readings at the energy working group in Brussels. It has not yet been introduced to the European Parliament.

Mr. David Glynn

COM (2003) 741 is a proposed directive concerning measures to safeguard security of electricity supply and infrastructure investment. The background to this short directive of 12 sections lies in the recent blackouts in Europe, notably in Italy, Denmark and Sweden in September last. The directive aims to adopt a stable and regulatory framework to support investment, strengthen European energy networks and establish sufficient and diverse generation capacity. It essentially seeks to adopt a policy and a regulatory framework.

Article 3 on security supply policies and market players, provides for the roles and responsibilities of transmission system operators and suppliers to be defined. It requires that account be taken of cross-border co-operation, demand size measures and so forth, that unreasonable burdens will not be placed on new market entrants or small companies and cost impacts will be evaluated. Article 4 on network security requires that transmission system operators comply with minimum operational standards on network security. It also requires that regulators set and publish performance standards for transmission system operators and DSOs. Article 5 on the adequacy of generation provides that member states take and publish appropriate measures to ensure balance between supply and demand with an appropriate level of reserve capacity.

Article 6 on network investment provides for member states to ensure that when making network investment decisions, demand side management measures be prioritised to supplant the need for network generation investments and account be taken of the need for increased possibilities for connection of renewables and a range of other measures. Article 7 on interconnection construction, provides that the transmission system operators submit to the regulator for approval investment plans for interconnection. It also provides for consultation with the Commission on those plans and mechanisms for regulator intervention to deliver or speed up interconnection. The remaining articles are standard clauses. The envisaged transposition date is 1 January 2006 and Article 10 requires progress reports by the end of 2007 to both Council and Parliament.

Mr. Raphael Kelly

COM (2003) 741 deals with the proposed regulations by the European Parliament and the Council on conditions for access to gas transmission networks. The purpose of the directive is to follow on from the market liberalisation directive, COM (2003) 55, which was enacted in July 2003. It provides for the opening of the domestic natural gas market by July 2007 and the industrial and commercial market by 2005. It also repeals the former 1998 market directive. Commission monitoring of that directive led to the belief in the need for detailed regulation as matters were not moving in line within all member states, with possible distortions created in the market. The directive effectively enacts the Madrid forum guidelines. The Madrid forum is chaired by the Commission and comprises the member states, national regulators, industry and consumer representative bodies, meeting twice a year.

The guidelines developed by the forum for third party access were agreed by all participants in September 2003. This followed extensive consultations between forum members, pipeline operators and users and consumer organisations. The need for the guidelines was to clarify the roles of the various market players, ensure non-discrimination and facilitate cross-border trade and consumer choice, within or without national boundaries. These are good practice guidelines for the third party services that may be needed, for setting and applying the tariff structures, for charging for use and balancing the networks. Balancing means that the amount of gas put into the network must be equal to what is taken out. There are penalties for those who exceed the number of withdrawals or put too much in. In short, it is a matter of keeping contracts on an orderly basis. A common minimum set of services to include the duration of contracts offered, firm and interruptible contracts has been established.

In Ireland there will be no difference in practice as there will be no interruptions due to the capacity of the current networks. The directive would generally apply where there is no risk of interruption because the interruptible contracts will be at the same price to avoid distortion. To ensure a level playing field, the criteria for access charges must be agreed and applied universally throughout the EU. The rules establishing what is taken into account when these charges are determined and how they reflect the costs incurred in running networks are laid down in the directive. The same applies to how the network is balanced. Rules are also contained to ensure that contracts for the use of the system can be sold on if not used. This means that capacity will not be tied up or made unavailable to other players that may have a use for it. The regulation also sets out the principles for access charges, the provisions of third party services, the mechanisms for allocating capacity within the transmission system and network congestion management. The directive aims to ensure the whole system is operated in a transparent fashion, balancing provisions are in place and a clear basis for imbalance charges. It also ensures the selling on of capacity can be carried out in a strictly open fashion. The implementing measures are contained in the directive's annex. It has been proposed under Article 95 of the Internal Market that we operate on qualified majority voting going through the Council. Due to co-decision the European Parliament is also involved. We welcome it as a way of expanding the liberalisation of the market. It will help secure a level playing field, which will ensure the best prices for gas consumers in our State. It will ensure non-discrimination and transparency and should generally improve the Internal Market in natural gas, add to security of supply and minimise gas prices to users through the greatest level of competition being available.

Within the Council, some of the other member states are in agreement that such a regulation would be good, while others think the regulation is unnecessary, conflicts with the Internal Market directive, or that its scope should be limited. The views in the European Parliament are similar. The number of amendments proposed by the Parliament is now down to 42, and most of these appear to be acceptable to the Commission. The Commission would like to see a higher status assigned to the Madrid Forum process to allow it to be involved in the occasional modifications of the nitty-gritty contained in the annexes in order to ensure a proper connection with the marketplace. Implementation is to take place from 1 July 2005, which corresponds to the date within COM 2003 for full commercial and industrial market opening. Due to the European Parliament elections the regulation may not be fully adopted until later this year or early next year. As it is a regulation it has immediate action within Ireland, so it will not require specific transposition. The Commission for Energy Regulation is already sufficiently empowered to apply the conditions it specifies.

Chairman

Mr. Brennan, to say that we cannot continue to have policy neglect on consumption growth, unwillingness to construct new transmission systems or co-ordinate system operation, and unclear regulatory frameworks relating to supply and demand balance is surely a frightening statement and admission regarding European energy needs and this State's needs for electricity, gas and other energies. Have we any strategic planning process in place for the next 20 or 30 years? Are we encouraging any new competition and investment, or are we over-regulating in such a way that competition will not enter the marketplace?

I missed some of the committee discussions on energy modules because I was ill, but I know members listened very carefully to the presentations and asked a number of questions. We are currently in energy mode in this committee and will be looking at energy issues over the next few months. It is unlikely we will conclude until October 2004 and it is highly possible that next week there will be a motion before the committee to hire a consultant to advise the committee, help it form its own view and come to its own conclusions about Ireland's energy requirements over the next 20 to 30 years. We have completed our report on broadband, which was published a couple of weeks ago, and I know other officials in Mr. Brennan's Department found it helpful.

Does the insertion in this document of the references I have noted with regard to policy neglect worry Mr. Brennan as the Assistant Secretary of the Department in charge of energy?

Mr. Brennan

I welcome back the Chairman. It is good to see him looking so well. I am not so sure about the rules of engagement which apply in this situation, but I understand it is not for civil servants to comment on policy matters, and that we are here to answer regarding the directive. The statement referred to is a recitation of a Commission assessment which is a background to the proposals, and not a particular comment on the situation in any individual member state.

Chairman

We will certainly get the views of the Minister. Was this document prepared by Mr. Glynn?

Mr. Glynn

Yes. I take the blame for it.

Chairman

Can you explain it to the committee?

Mr. Glynn

It is in the context of European energy policy rather than Irish energy policy.

Chairman

We are relieved.

Mr. Glynn

I will give an example. Earlier I mentioned the blackout in Sweden and in eastern Denmark. The loss of supply in Sweden was 4,700 MW and in Denmark 1,850 MW. The loss affected 1.6 million people in Sweden and 2.4 million in Denmark, including people in its capital, Copenhagen. The losses affected regional and international airports. This was a huge blackout with major effects. Against that background, one could not argue with the statement in the Commission's assessment. However, one could argue strongly against it in the Irish context, as we have a well-developed energy policy and many recommendations in the directive are already implemented in Ireland.

Chairman

Has this country a strategic plan for the next 20 or 30 years?

Mr. Glynn

It depends on what one is talking about.

Chairman

I am talking of energy requirements. Do we forecast what these are in terms of our economy or usage?

Mr. Glynn

Absolutely. We have a generation adequacy report which is a statutory requirement under the Electricity Regulation Act 1999. This is produced annually by the Transmission System Operator, TSO, and is placed in the public domain. The CER oversees the necessary introduction of new capacity, short-term peak capacity and so on. Essentially we have a rolling programme. In addition we have a substantial investment in the networks in excess of €4 billion, as the Minister told the committee at an earlier consultation.

Chairman

Mr. Glynn might supply the committee with a copy of the generation adequacy report so we can examine it in the context of the other work we are doing.

Mr. Glynn

It is accessible on the website of the TSO. I will e-mail it to the committee Clerk.

Chairman

Thank you.

Deputy Eamon Ryan

How does Mr. Glynn define energy supplies? Are we concerned only about electricity generation or do we look in our energy policy at the energy used in heating buildings, transport and agriculture? Is the Department's concern solely with electricity generation and not its use, or has it a broader view of what energy use is?

Last week I attended a conference organised by the Environmental Protection Agency, where leading world scientists discussed key environment issues. One of the main subjects for discussion was global climate change. People like Professor John Schellnhuber from the Tyndall Institute, a world expert on climate change, presented some of the latest statistical and scientific analysis, which was frightening. It is frightening to hear such eminent scientists talking about a reasonable likelihood in our lifetimes of a switch in the Gulf Stream. We will certainly face energy issues and questions then, as we try to heat our houses when the icebergs come down from Kippure.

Deputy Broughan

Apparently we will be living in Antarctica. It will be our only habitation.

Deputy Eamon Ryan

The scientists are almost unanimous in saying that we need to start looking at reduction levels of 60% to 80% in our CO2 use. To say in this country, the worst in the European Union in terms of exceeding the Kyoto Protocol limits, that we are doing very well regarding energy use, and are ahead of the European requirements, is laughable. If the Department has made that claim, I question its thinking.

Given that scientific information and given that the German and British Governments are now starting to talk of reductions in the order of 60% to 80% in CO2 emissions, are we happy with a 1% reduction in energy use levels per annum? Do we consider that a sufficiently ambitious target, or will we be looking at further larger reductions at a later date, since scientific findings indicate we must reduce our CO2 emissions? This is a very important issue and I have other serious questions in this area.

Mr. Glynn may wish to correct me, but on reading the directive, it seems that when it comes to looking at the issue of securing energy supplies, it is not simply a question of balancing supply and demand. However, there is a very strong direction from the European Commission that the new supply must come from renewable energy resources and combined heat and power. How does policy in this country on restricting the amount of wind power on the grid to some 900 MW comply with such a directive? I will come back with other questions if I can.

Mr. Brennan

In the Department, Mr. Glynn deals with electricity liberalisation rather than energy conservation or efficiency, which is Mr. Finucane's part. Mr. Kelly deals with gas liberalisation, and there are a few others. That is why I am taking the floor first. We came here prepared to talk about three specific directives rather than a broad review of energy policy. That is my understanding, but it is ultimately up to the Chairman to rule on. However, if we are to get into a deeper discussion of energy policy, perhaps the Minister should be here, or perhaps we should be given notice. Having said that, it is fair to say that robust interdepartmental procedures are in place to examine such matters as Kyoto and emissions, but the drive for that——

Chairman

With all due respect, there are three directives before us. The members are entitled to ask questions. There might be areas on which witnesses might be infringing on policy. Mr. Brennan mentioned that. We will have another day to talk about the policy, when Mr. Brennan will be present with the Minister or whoever is the policy-maker at that time. Perhaps we can leave that, but there are several questions regarding the directive, and I ask Mr. Brennan to be as helpful as he can to the committee and perhaps clarify the issues. If he is not in a position to answer, he can find out what the policy is and come back to us on it.

Deputy Eamon Ryan

They are specific questions. Is our definition of a reduction in energy use purely electricity generation, or does it include heating, transport and other energy use? How does the directive recommendation that new power supplies come from renewable sectors marry with the current moratorium on renewable wind power? That was the second, detailed question in this regard. I cannot remember the third question now. However, those were detailed questions relating to the directive.

Mr. Brennan

I was going on to try to answer the questions as best I could, before the Chairman interrupted. I thank him for the clarification. The 1% target about which we are talking is the Commission's proposal for a directive for Europe. We have our own national policies and arrangements for dealing with energy conservation, renewable energy and so on. There is a separate State agency, relatively recently set up, with a specific remit in that area. Tomorrow the Minister will launch a renewable energy development group made up of interested parties to accelerate the renewable energy agenda.

Regarding the moratorium to which the Deputy refers, we have set up independent regulation and an independent transmission system operator. I understand that the latter recommended to the regulator on grounds of system stability and security that it was necessary to have a moratorium. No regulator could ignore that kind of advice coming from specialists in the subject. The Minister said here that, to a degree, what drove the need for the moratorium was an unforeseen acceleration of the construction of renewable energy projects. That happened because, as the AER process matured, AER V and AER VI were better programmes than their predecessors, where planning permission was required as an entry ticket. One could not join unless one had planning permission, and therefore one was eliminating the planning delay and so on. There was also a very rapid growth in the provision of wind-based energy, which was independent of the AER system and quicker than people might have anticipated. The TSO said that we should hold on and have a detailed look at it. There is no dispute in the industry that there was a need to do so, and the process is in train to move on quickly from there.

The interdepartmental lead regarding Kyoto is in the Department of the Environment, Heritage and Local Government. There is a robust interdepartmental consultation process in dealing with Kyoto, and we play an active part in that. The relationship between Kyoto and energy policy is that energy must deliver a great deal for what Ireland is doing with regard to Kyoto. However, the rate of our economic development and the fact that we are exceeding our bubble is why we are having an emissions-trading regime. I presume that the Department of the Environment, Heritage and Local Government's plan - my knowledge is obviously not as detailed as that of the Department itself - is designed to comply. The cost of non-compliance, which has not been finally settled, is so expensive that one would have to comply anyway. Europe is raising major issues regarding investment in energy efficiency in particular. The world will do better in outcomes on emissions if some of the investment takes place in the Soviet Union and elsewhere. To get the best environmental bang for one's buck, one should not always look at home.

Deputy Eamon Ryan

Is the energy reduction only in electricity generation, or does it include fuels, heating and other energy use?

Mr. Brennan

The 1% mentioned in Mr. Finucane's presentation is about energy efficiency across the sector.

Deputy Eamon Ryan

On transport, heating and so on.

Chairman

We will suspend for the vote. I ask the officials to remain until we return.

Sitting suspended at 3.55 p.m. and resumed at 4.15 p.m.

Chairman

Are there any unanswered questions?

Deputy Eamon Ryan

I want to speak on the issue of energy savings. Someone stated that we need to give the power back to consumers to regulate their own energy use. Will it be possible to do that on the basis of the marginal cost of electricity? Will a system evolve where the marginal cost increases dramatically because of the surge in demand at peak time? It is very expensive to get that additional capacity? Will future customers be able to use new technology to regulate their own use to avoid those high-cost peak electricity periods?

Mr. Finucane: Some of the electricity suppliers already offer a saver rate which is equivalent to the night rate. Part of it involves giving better information to the customer. Some customers are not aware at what time the rate goes from peak to off-peak. There is not just a technology requirement, but also an information provision requirement.

Deputy Eamon Ryan

I am looking for more detailed information on the short term marginal costs during the day or at certain periods.

Mr. Finucane

Some of the information on peak load management relates to major industrial users. As they have an effect on the system, the information provided allows us to switch them on and off. Whereas an individual householder does not necessarily have an impact on demand.

Deputy Eamon Ryan

Will the methods available to large industrial users be applied to domestic, small business, and public sector use?

Mr. Finucane

It should be applied to the small sized industrial user. Whether they will be applied to the individual user will depend on how the energy efficiency programmes develop.

Deputy Eamon Ryan

Can the witnesses explain what net metering means and how it might work in this area?

Mr. Brennan

Net metering is a concept that exists in some states in the US, where very small wind producers feed the grid when they do not use it themselves and only get billed for net use of electricity. It is one of the issues on our agenda.

I want to go back to the issue of the energy market and the small consumer. There are blocks of apartments in Europe where the consumer gets heat and electricity, the bill for the building is averaged and a service charge is paid. The directive is aimed at abolishing that concept so that every consumer is responsible for his or her own consumption. For the small consumer to obtain energy efficiency, the technicalities of the new market arrangements need to be discussed with the regulator. These include time-of-day pricing of electricity and will give greater incentive to suppliers to work on demand. That is a general explanation and the Deputy needs to speak to an expert to get a deeper explanation.

Deputy Eamon Ryan

The time-of-day pricing is the key to significant reductions. The real problem is the peak use and we will make massive savings, environmentally as well as economically, in using that kind of pricing.

Mr. Brennan

There is a growth of supply, or wholesale, between generators and customers. The supplier at that level will experience the fluctuations in price arising from the new market arrangements. That will give the supplier an incentive to manage customers better.

Deputy Eamon Ryan

I want to return to the issue of the development of renewable energy. This is the cornerstone of what we are talking about as it is the future supply. It seems to me that too much attention is being paid to wind generation, although there is huge potential for it, especially in the export area. The real long term necessity is to provide renewable baseload energy sources, be it from biomass, wind, wave, tidal or maybe from use of forest residue in existing power plants, using a percentage of wood chippings in Moneypoint or in the peat-fired power stations. There is a whole range of sources available in Ireland which we have not even started to look at, particularly biofuels from the agricultural sector. Other countries are rapidly progressing with technologies such as digesters. Have we started negotiations with the IFA and the Department of Agriculture and Food to look at those technologies? What about other baseload renewable energy, such as wave and tidal, which provide the back-up to wind energy? We are not pursuing an aggressive policy in this country on this issue.

Mr. Finucane

With regard to other developments in renewables, the Department established a bioenergy development group which had its first meeting in December. The group is interdepartmental and also has North-South links. It aims to produce a report before the end of the year. With regard to CHP and co-generation, the Department established a working group along similar lines, again with the aim of producing a report before the end of the year. It is intended that both reports will feed into the renewable development policy within the Department, which is now being developed following the consultation document which was published in December. There is also the renewable development group announced recently by the Minister, which will have its first meeting tomorrow. It is intended that work from both of the committees, and also feedback on the renewable consultation document, will be fed into the renewable development group as time progresses.

Deputy Eamon Ryan

The mid-term review by the ESRI of the national development plan showed an amazing under-spend by Sustainable Energy Ireland and the Department in regard to the funds available under the plan for energy saving projects. While I do not have exact figures, the under-spend was at an incredible level and only a fraction of the expected projects were delivered. Has there been a review in this area following the ESRI recommendations?

In terms of the development of the electricity market for a renewable future, the COM (2003) 740 proposal emphasises the nature of the development of the transmission and distribution grid. Does the Department believe we will move away from the large scale transmission and distribution system which services traditional large power plants such as Moneypoint, Huntstown and others towards investment in a more local energy generation and distribution model?

Mr. Brennan

The Department's strategy statement sets out the ambition in regard to the electricity grid. At the end of the current development programme, the grid would not constrain any policy option - either in regard to supply or demand. This gets to the heart of the Deputy's question on distributive generation. Certain funding arrangements are in place for grid development in support of renewable energy distributive generation. However, while the concepts are in place, they are only beginning to be implemented.

The question on the ESRI and the national development plan under-spend is a complex one which is a long way removed from the three directives we came here to discuss. While I do not want to snatch at the issue, there are interdepartmental and budgetary-——

Deputy Eamon Ryan

Will Mr. Brennan return to his first point? He said that the move to a distributive generation system is only beginning. I am not an expert but am told that the UK regulator is making very advanced moves in that direction and a number of other European countries are already quite far down the line. This is not such new technology.

Chairman

Before there is a reply to the Deputy, I point out the committee finishes shortly and I wish to add a question. How will the new regulations impact on emissions trading, for example, or on carbon tax?

Mr. Finucane

The energy efficiency directive would have a clear impact on the reduction of energy demand and the volume of emissions being generated. It would therefore help the Irish economy reach its Kyoto targets.

Chairman

Deputy Eamon Ryan asked a question.

Mr. Finucane

The main reason for the Sustainable Energy Ireland under-spend under the national development plan was in regard to the grid update programme for renewables and a lesser reason was the lack of matching funding available at one stage. In addition, a series of clusters which would possibly develop around the country were examined by the grid update group which was established. Some of the clusters that had been identified as early movers turned out not to be, for various reasons. Therefore, the expenditure on grid update was always going to be in the latter part of the national development plan, with very little in the first part.

Deputy Eamon Ryan

Which body was responsible for the lack of matching funding?

Mr. Finucane

Under the national development plan, matching funding comes from central funds.

Deputy Eamon Ryan

Therefore, central funding was not able to match European funding.

Mr. Finucane

An additional way of supplying the funding was reached with the aid of the energy regulator. It will now come from funding generated from the use of service charges.

Deputy Eamon Ryan

Is it the case that OFGEM and the UK authorities are moving towards this distributive generation system?

Mr. Finucane

As more and more wind generation goes on the bigger grid systems, they are tending to examine the micromanagement of the grid as opposed to the overall singular management as has traditionally been the case. While examining it is not quite the same thing as introducing it, it is being examined.

Chairman

I thank Mr. Brennan, Mr. Finucane, Mr. Kelly, Mr. Glynn and the other officials for appearing today. I welcome Dr. Beamish and Mr. O'Reilly of the Department of Communications, Marine and Natural Resources. We have read your presentation. Will you take us through it?

Dr. Cecil Beamish

Before us is COM (2003) 451, the proposal for a Council regulation laying down measures concerning incidental catches of cetaceans in fisheries, amending Regulation (EC) No. 88/98. This proposal was issued by the Commission in July 2003. Its purpose is to provide added protection for small cetaceans, mainly dolphins, porpoises and similar species.

While these species were already protected by the habitats directive, the Commission felt the various measures which were required to provide protection under this directive were not adequate in practical terms. There was particular concern about the rate of by-catch, especially of harbour porpoises in certain fisheries, mainly in the Baltic Sea and North Sea. The harbour porpoise in the North Sea is one of the most endangered cetacean species in the north-eastern Atlantic. Although the population density is now very low, it was felt that any by-catch of that population greatly added to the risks of sustaining the population of harbour porpoises in the Baltic Sea. Assessments also showed that several thousand harbour porpoises per year were caught in fishing gear in the North Sea. There is widespread general public concern in regard to such by-catches of cetaceans.

The proposal also reflects a wider move within the reformed Common Fisheries Policy of 2001-02 to absorb environmental concerns and environmental sustainability within the policy. Various scientific reports had improved the level of information and understanding in regard to the bycatch cetaceans in fishing gear in European waters, and there was also improved data collection from independent observers. This enabled the Commission to consider in what fisheries and in what ways greater protection could be given to the species and, in essence, the Commission decided on a three-pronged strategy.

First, in fisheries where information was not adequate or where easy remedies were not available, the Commission sought to bring in a structured system for observers whereby data could be collected and further initiatives taken down the road. Second, technological developments have allowed the development of acoustic deterrent devices, known as pingers, which emit a sound at a frequency which deters these small cetaceans from static fishing gears, and that allowed the possibility of taking an action which would give a greater degree of protection in those fisheries. Third, the Commission moved on the use of driftnets in the Baltic Sea to phase out those driftnets. In a sense, this was a follow-up action to actions which were taken in our own area, the western waters, in 1998 regarding tuna driftnets. At that time, an exemption had been made for the Baltic Sea and this was effectively a follow through on that exemption.

The elements of the Commission proposal were to place these pingers, or acoustic deterrent devices, on certain static fishnets, fishing gears, driftnets and bottom-set gillnets, which I can go into if required; observers to be placed on board other fishing vessels in other fisheries; and a ban to be placed on driftnets in the Baltic Sea from 2007. The acoustic deterrent devices are mainly effective where the fishing gear is lying static in the sea. They emit a sound at a frequency which deters the cetaceans but not the fish. There remain some issues which require further research on the reliability of these and their long-term impact on the cetacean populations they are intended to protect but the Commission felt there was enough evidence at this stage to move forward with requiring the inclusion of these on the fishing gears.

The application in the proposal was that they would cover bottom-set gillnets and entangling nets in the Baltic Sea, the North Sea and the Celtic Sea. Issues that arose related to the cost, particularly in respect of small vessels, and whether we are using small lengths of nets or had short fishing times. Another issue which arose was establishing a European requirement for this across all fisheries. When there are a limited number of suppliers of this technology issues arise regarding availability in the market.

In regard to observers, the Commission proposed that these would be placed on board the vessels to gather information on the bycatch levels and the overall population levels of these cetaceans. The information on that is quite patchy at the moment. Varying proportions of each fleet will be covered according to the fishery and the gear type. The issues here were of two kinds. The first related to practicality in terms of putting observers on board very small vessels, and the second related to coverage - observing where there are no cetacean populations and questions of that kind.

In regard to the Baltic Sea, which was one of the priority elements of this measure, the proposal was to have an immediate restriction to two and a half kilometres and a complete ban from 2007. The issues in that regard related to requests from the Baltic Sea fishermen for a gradual phasing out or for some degree of compensation. The proposal was made in July 2003. It did not advance during 2003. The Irish Presidency made it a high priority on taking up the Presidency, in line with its other initiatives on fast-tracking the development of environmentally friendly fishing methods. There were detailed negotiations early in the year and wide-ranging representations from industry and environmental groups. At the Council on 22 March a political agreement was reached on this proposal and the proposal was formally put through Council on 26 April as an A point and should be published shortly. The compromise on the proposal was reached following lengthy plenary and bilateral meetings with various member states and the political agreement was supported by all member states, with the exception of Spain and Italy.

In the regulation which has been adopted in respect of the pingers, the acoustic deterrent devices, the pingers will apply to vessels over 12 metres. Their application will be phased in from 2005 to 2007 according to the areas which are regarded as priority. In the case of Ireland they will apply in the Celtic Sea from January 2006.

Observers need to be placed on vessels over 50 metres. There is a general obligation to collect data on a pilot basis on smaller vessels. Observers are not required where the fisheries are required to have the acoustic deterrent devices on board. That seemed logical because if one has an acoustic deterrent device, there is no point in observing those fisheries. The objective is to get excellence of data collection and to have monitoring in regard to bycatches, and report annually to the Commission. This may lead to other follow-on actions in the future.

On the Baltic Sea driftnets, the ban was deferred for one year to 2008. The two and a half kilometre limit that had been proposed would have meant an immediate closure of the driftnet fisheries in the Baltic Sea where much longer lengths of driftnet are traditionally used. A phase-out was agreed, with 40% of the fishing vessels to disappear immediately from 2005 and to have it reduced by another 20% by 2006 and by another 20% by 2007. In effect, 60% of the current vessels will be there in 2005, 40% in 2006 and 20% in 2007. An additional requirement was that the acoustic deterrent devices would have to be placed on these driftnets in the interim period, and this would apply from 1 June 2005.

Regarding the impact on Ireland, the acoustic deterrent devices, or pingers, will apply in respect of vessels using bottom-set gillnets and entangling nets. These are mainly used in the Celtic Sea, and we estimate 20 to 30 Irish vessels over 12 metres are likely to be using them.

On the cost issues, the typical pinger cost per vessel could be of the order of €10,000. There was a Commission declaration, as part of the political agreement, that the Commission would amend the rules for financial support for the fisheries sector to allow the possibility of grant aid where people were applying these new devices. The Commission has now followed through on that declaration and has proposed an amendment to the financial instrument for fisheries guidance. The Presidency is hopeful that that amendment can be adopted at the next Council.

In regard to the impact on Ireland of observers, we estimate that in the pelagic fisheries approximately 30 vessels will require observers. Essentially, the cost of that will be borne by the State. There is a possibility in the final agreement that these observers can be multi-functional. They can examine issues like discards, species composition and other priority issues that we would be interested in having observers on board working on. The costs may include an additional cost on top of other observer programmes but the estimated costs would be of the order of €200,000 or €300,000 per annum.

The voting majority that was achieved appeared to be a good outcome given the diversity of views and interests that were affected by this measure. The outcome seems to be consistent with the scientific advice in that a precautionary approach is adopted by applying the pingers to the priority fisheries. There is a structured system for further data collection which will allow this to evolve. The regulation recognises that the technology may develop in regard to acoustic deterrent devices and provides for the development of such technology. There is a definitive phase out of drift nets and a banning of them in the Baltic. Initial steps have been taken and there is a foundation for further measures to be introduced in future years on foot of the observations and data collection.

Chairman

Before I call Deputy Eamon Ryan, I wish to ask Dr. Beamish a question. Will these proposals apply to all bycatches and can they be used as a model or a pilot programme?

Dr. Beamish

:The focus was on where dolphins and porpoises were getting caught in fishing gears. The technology is currently only useful on certain types of fishing gear. On towed fishing gear, trawls and so on, this technology does not seem to give the right result. It does not scare off the cetaceans. We are applying observer programmes to ascertain the bycatches in those fisheries and in time to establish what kinds of measures will be necessary to deal with that. In respect of each fishery and each type of fishing gear, it seems probable that there will have to be a different solution.

Deputy Eamon Ryan

I thank Dr. Beamish for his presentation. The Commission official has been keen to have this area addressed for a long time. I am glad we were able to accommodate the Commission and pass this proposal.

The concentration or emphasis on the Baltic Sea may detract from the fact that this is a serious issue in our waters. I have read research from the Irish Whale and Dolphin Group and others showing that even the effect of gillnets on our harbour porpoise and other dolphin populations in the Celtic Sea is such that these populations are no longer viable in the long run. This is not only an issue for the Baltic Sea, there is serious concern about the effect of bycatch on the populations in our waters and about the effect of our twin-tow trawling for tuna in the Bay of Biscay and other waters where there has been evidence of very large bycatch occurring in certain tows.

I am glad Dr. Beamish said that the efficacy of the pingers in trawling fisheries is debatable and as result it would be wrong to rely on them. It is surprising that the observer programme will not be applied on those gillnet and other fishery areas where pingers are used. One of the advantages of the observer programme - an important development is that we can start to have a scientific basis of knowledge as to what exactly is happening the level of bycatch and its location - is that it would be of great benefit to assess the effect or the efficacy of pingers even in those gillnet fisheries where there seems to be such confidence in their use, but I am not sure about that. From talking to the people involved environmental campaign groups involved in this area, I am aware that they do not share the certainty that we can subsequently not have observers in those fisheries. I am surprised and disappointed by that provision, which I had not realised was in this proposal. The observer status could be very important. It will lead down the line to us declaring that certain areas should be free of fishing for a period of time to allow fish populations recover. This development will evolve quite significantly.

Dr. Beamish mentioned that the observer status applies only to boats over 50 metres, which would apply to roughly 30 boats in Irish waters, but that there is a general obligation to move towards a monitoring system to apply to smaller boats. I would be interested to know what the Government proposes in terms of such a monitoring or observation system in respect of smaller boats. Is the Government moving in that direction? Why are we not considering the placing of observers on the demersal fleet? If I read Dr. Beamish's presentation correctly, we are considering putting observers only on the pelagic fleet. Are we not considering placing observers on the demersal fleet because that fleet will always be using the type of gillnets that would use pingers? I am not clear about that. Why are we exclusively placing observers on the pelagic fleet? I would like Dr. Beamish to answer those two questions and I might then ask him some other questions.

Dr. Beamish

This technology is evolving. A good deal of research has been sponsored by the Commission and others in the past five to eight years to try to come to a conclusion on whether these acoustic deterrent devices were effective or were effective in certain circumstances. The Commission's proposal was based on its conclusion from such research that in certain types of fisheries and in certain types of fishing gears these acoustic deterrent devices of the type specified in the regulation were effective. The Commission had drawn that conclusion. Such devices are quite an expensive additional cost for fishermen. There had to be some degree of confidence that this was a worthwhile technology. The initial conclusion, and this is also the view of observers, is that it is not a trouble free way of gathering information. It has its own problems.

The overall conclusions were that there were certain fisheries where acoustic deterrents are considered to work and where, because of bycatch levels, there was a requirement to mandatorily require their use. There were other fisheries which are regarded as priority fisheries for examination and observation with a view to taking further actions down the line. The requirements in regard to observers in the pilot regulation apply to pelagic trawls and single and pair trawls in area six and seven, which are our areas, where a specified level of observer coverage is required. All other fisheries of bottom-set gillnet fisheries and driftnets will also require an observer programme. These programmes have to be structured and there is a format set out in the regulation as to how this can be done, the type of report that is to be provided and so on.

In regard to smaller vessels, there is a requirement for alternative information gathering to be carried out by the member state. While these areas are excluded from the mandatory requirement of having an observer on board because of the practical problems in regard to the safety of having an additional person on board - there would be a safety concern in having an additional passenger on board many of our smaller vessels, particularly those under 30 foot - the member state has an obligation to provide alternative methods of gathering information in regard bycatch in those areas.

The Deputy mentioned work that has been done in regard to other fisheries in our areas. It is true that we have significant cetacean populations in our waters. Therefore, there will always be an interaction between fishing activity and those cetacean populations. Research has been done by the BIM and others in that regard.

I focused on the Baltic Sea because we are prohibiting and banning a traditional form of fishing. That is of a different order from requiring some adjustments to nets or adding some technology. That is where much of the focus of the debate was centred. We had a similar debate in regard to tuna driftnet fishing in our waters in the late 1990s, but it is clear that other types of fishing methods for any species that is also a prey species for cetaceans can give rise to interaction whereby there are bycatches of cetaceans. It is recognised by everybody that this is a beginning; we are gathering information, moving forward, addressing the priority areas and trying to advance from there.

Deputy Eamon Ryan

Dr. Beamish mentioned that certain fishing methods would require mandatory observation, driftnet fishing being one. Given that we are the only country driftnetting for salmon in the Atlantic, will we be monitoring the effect of such driftnetting on cetacean or other populations?

Dr. Beamish

The mandatory observer programmes relate to vessels of more than 15 metres in length. The salmon boats we are talking about are quite small; they are below the size category for the mandatory observer programmes. There are also issues concerning the size of driftnets, their location and the short season, which have not, to the best of my knowledge, given rise to large concern about cetacean catches.

Deputy Eamon Ryan

Will the information from the observation monitoring programme be made public immediately or in a fairly swift manner? What other alternative information gathering systems are provided if one does not have on-board observation? Perhaps Dr. Beamish could explain some of the difficulties involved. I can understand the difficulty in putting someone aboard a small half-decker, but what are the difficulties with the observation system to which Dr. Beamish alluded?

Dr. Beamish

There is a series of articles, which we can make available to the Deputy and which will be made public shortly, concerning the agreed regulation. It sets out both the requirements for at-sea observers, including, "that member states shall design and implement monitoring schemes for incidental catch certifications, using observers on board the vessels flying their flags with an overall length of 15 metres or over".

Under the conditions defined in one of the annexes to the regulation, it states that: "The monitoring scheme shall be designed to provide representative data of fisheries concerned. Member states shall take the necessary steps to collect scientific data on incidental catches of cetaceans for vessels with an overall length of less than 15 metres involved in the fisheries defined in the annexe, by means of appropriate scientific studies or pilot studies."

The regulation goes on to define the type of person whom the member states should employ as an observer, the tasks of those observers, - it is rather lengthy - the requirement for the observer to report and what the observer shall report. The regulation sets out obligations on member states to make annual reports to the European Commission on the implementation of all the relevant articles. It says that "on the basis of the observers' reports provided, according to the relevant articles and other appropriate data, including those on fishing data collected under a separate Council regulation, the report shall include estimates of the overall incidental catches of cetaceans in each of the fisheries concerned. The report shall include an assessment of the conclusions of the observers' reports and any other appropriate information, including any research conducted within the member states to reduce the incidental capture of cetaceans." It goes on to outline about what the member states shall ensure in the standards and design of the reports and in the observation programmes.

Deputy Eamon Ryan

I have a particular interest in this area having put forward a detailed amendment to a recent Bill, seeking some of the measures, which I am glad to see are now coming through. Can Dr. Beamish indicate what are the alternative information gathering mechanisms, which might be available where we do not have on-board observation?

Dr. Beamish

No. As I said, political agreement was only reached at the end of March and the measure has only been adopted in the last week. It has not yet been published. There is a time-frame for designing and structuring these systems, which is a task that will be carried out in the second half of this year.

Chairman

I thank Dr. Beamish and Mr. O'Reilly for having attended the committee, and I apologise for the suspension earlier. If there is no further business we shall adjourn.

The joint committee adjourned at 4.55 p.m., sine die.