Report of the Joint Committee on the Secondary Legislation of the European Communities: Motion.

Mr. Alexis FitzGerald

I move:

That Seanad Éireann pursuant to the Order of the Seanad of 18 February, 1981, takes note of the Report of the Joint Committee on the Secondary Legislation of the European Communities on Implementation of Council Directives which was laid before the Seanad on 11th March, 1981 and which contains a request for a debate thereon.

Despite the time of day and the number of Senators here to listen to the debate, this motion is a singularly important one. Effectively, what we are debating is whether it is proper that two EEC schemes, in respect of the administration of a sum of £57.5 million according to the Estimates for Public Services for the year ending 31 December 1980, more than a quarter of the total agriculture Vote, should be administered by the Minister without any legislation justifying or controlling his expenditure of these moneys. Perhaps I should put it a little further.

This report is not merely dealing with expenditure of the order I have mentioned, that is to say in excess of one quarter of the total Vote for the Department. It is also dealing with the expenditure of moneys from the European Community, the expenditure of a sum which I cannot tell the House but which the Minister will know.

I do not know whether this is the first time the Minister has come here but I should very much like to welcome him, and most particularly to welcome him to a debate on a report of the Joint Committee of which he was a very active member and, indeed, the chairman of a very active sub-committee. He knows a good deal, therefore, about the Joint Committee's view on this. No doubt he knows a good deal about the view of the Minister for Agriculture on it.

From the very first days of the Joint Committee we have been at issue with the Department of Agriculture on this matter. The first report drawing attention to it was signed by no less a person than the present Taoiseach on 28 April 1974. A further report, again signed by the then Deputy Haughey, was made on 2 July 1975 and, apart from the present report, I reported earlier on 19 December 1979.

Two important questions arise. The first is as to whether from the point of view of expenditure there is appropriate justifying legislation in existence. More important for my purpose as Chairman of the Joint Committee is whether there is adequate parliamentary scrutiny of two Acts of the European Community. These Acts relate to the disadvantaged areas scheme and the farm modernisation scheme, both of which have very significant political, social and economic consequences.

Perhaps the best way to introduce the House to this is to remind the House of the legislation governing this matter. The European Communities Act, 1972, which is the principal Act, provided that from 1 January 1973 the treaties governing the Communities and the existing and future acts adopted by the institutions shall be binding on the State and shall be part of the domestic law thereof under the conditions laid down in those treaties. Section 3 provides that a Minister of State may make regulations for enabling section 2 to have full effect. Section 4, which was introduced by the amending Act of 1973, provided that regulations made under section 3 should have statutory effect and should be capable of annulment if the Joint Committee, of which I am the present chairman, should recommend to the House that such regulations should be annulled.

The scheme of the code contemplated that there would be an Act of Parliament enacting as domestic legislation what did not become domestic legislation by virtue of the Treaty of Rome or, failing an Act of Parliament, that the appropriate Minister would make regulations giving effect to the Act and, by regulation, make it part of the domestic law. Such an order was to be subject to the scrutiny of the Joint Committee. This is referred to in section 4, introduced by section 1 of the amending Act. It was to be subject to scrutiny of such a kind that, if the regulations made by the Minister did not seem to be right, if the manner in which he was choosing to give effect in domestic law to the act of the institutions did not meet with the approval of the committee as the parliamentary scrutineer, the order containing such regulations and introducing such domestic law could be annulled, or there would be a debate about its annulment in this House and in the other.

The Department of Agriculture, the Minister, his colleagues and his predecessors have from the beginning claimed to be entitled to administer these schemes without any legislation other than such support there may be for what they are doing as may be found in the terms of the Appropriation Act with which I will have to deal in a moment. In the report of the Joint Committee of 28 April 1976, the Joint Committee drew attention to the concept of direct applicability of Community secondary legislation and pointed out that:

where such legislation is not directly applicable, it cannot give rise to individual rights and obligations in Irish municipal law without the enactment of domestic implementing legislation. In the case of a scheme initiated by a Council Directive which is not directly applicable, as is usually the case

and is the case here both in relation to the disadvantaged areas scheme and in relation to the farm modernisation scheme—

the question arises as to what domestic legislation is sufficient if the scheme is financed partly from Community and partly from national funds. The Joint Committee doubts if Members of the Oireachtas appreciate that if the Houses, by passing the annual Appropriation Bill, appropriate money to a particular scheme which is not founded on other legislation, they are deemed to be giving the Minister concerned carte blanche to administer the scheme as he sees fit. Nevertheless, this seems to be the effect of a Supreme Court decision, [Latchford and Sons Ltd. v. Minister for Industry and Commerce (1950) IR 33]. Although it is not at all clear to the Joint Committee that this decision is applicable to schemes financed partly from Community and partly from national resources, it may be that a different view is held in some Government Departments. The Joint Committee believes that the Houses in setting up the Joint Committee considered that they were establishing machinery to monitor Community secondary legislation at all stages from its inception as a proposal to its final implementation in Irish law. In particular, it is of opinion the Houses intended to control the detailed application of Community secondary legislation in so far as it requires domestic law to give it full effect. In the Joint Committee's view this objective is frustrated when the terms of schemes such as the Disadvantaged Areas Scheme are embodied neither in a statutory instrument, which is subject to the scrutiny of the Joint Committee, nor in a Bill, which can be considered by the Houses themselves.

That has been the consistent view expressed by the Joint Committee, both in the report signed by Deputy Haughey and in the subsequent reports which I was directed by the Joint Committee to sign. I do not think it is possible to contend that the scheme of the European Communities Act contemplated that there would be acts which would give rise to expenditures of such an order and which would involve receipts of matching expenditures of such an order that the Minister would claim that by virtue of the existing controls of public expenditure there was no need for him to make an order which would give rise to an examination by the Joint Committee.

Section 3 of the European Communities Act reads:

A Minister of State may make regulations for enabling section 2 of this Act to have full effect.

I will read section 2 again:

From the 1st day of January, 1973, the treaties governing the European Communities and the existing and future acts adopted by the institutions of those Communities shall be binding on the State and shall be part of the domestic law thereof under the conditions laid down in those treaties.

Then as I have said, section 3 says that a Minister of State may make regulations enabling section 2 to have full effect.

Article 189 of the Treaty talks about regulations and directives. It says:

A regulation shall have general application. It shall be binding in its entirety and directly applicable to all Member States.

Then it says about directives:

A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods.

In both of these cases the Minister for Agriculture has clearly identified himself as the national authority to give effect in domestic law to these provisions.

I will draw the House's attention to the particular directives because I do not think we can debate this in a satisfactory way without reference to them. In the Farm Modernisation Scheme there is a requirement in Article 3.1. that:

Member States shall for the purpose of this Directive define what is meant by the expression ‘a farmer practising farming as his main occupation'. Definitions shall, in the case of a natural person, at least include the condition that the proportion of income from farming be not less than 50 per cent of the farmer's total income and that the working time devoted to non-farming activities be less than half of the farmer's total working time.

And in Article 3.2 that:

In addition, Member States shall lay down the criteria for assessing the occupational skill and competence of the farmer.

If one is engaged in the matter of defining what expressions mean, if one is involved in the matter of laying down what are criteria, one is in fact engaged in the business of laying down rules, making orders, providing for rights, deciding who falls within the ambit of the definition, who lies outside it, who achieves the criteria, who does not. But the Constitution provides at Article 15.2.1 that "the sole and exclusive power of making laws for the State is hereby vested in the Oireachtas". No other legislative authority has power to make laws for the State. No other authority, which includes the Minister for Agriculture, has power to make definitions which amount to laws, to lay down criteria which amount to laws. I would draw the House's attention to the fact that it is perfectly open to the Houses of the Oireachtas to delegate to the Minister the power to make these definitions. It is perfectly open to the Houses to delegate to the Minister the power to act at his complete discretion as to who comes within the definition, to act at his complete discretion as to what the criteria are to be. But the Houses have not done so. The Minister could have made an order, pursuant to the Disadvantaged Areas Scheme Directive or the Farm Modernisation Scheme Directive, providing that the definitions shall be as the Minister may from time to time determine, that the criteria shall be such as the Minister may from time to time determine. He could make an order of that kind. We could have a debate as to whether or not it is appropriate to administer the two schemes involved by giving to the Minister the power which, in fact, the Minister is claiming to have. If the Houses were satisfied with that we could give him such power. He could then go ahead and engage in the administration of the substantial sums involved by virtue of the discretionary power thus given to him. But no discretionary power of that kind has been proposed to this House to be given to the Minister for Agriculture. In the absence of the delegation by the Houses of the Oireachtas of the power of legislation, the power of legislation is still retained within these Houses.

There has been some argument which is referred to in the report on the matter of the Appropriation Act. With regard to that, the Appropriation Act, 1980 — to take the one that we passed without recommendation and which was duly enacted on 24 December — provides only with regard to this matter, at Vote No. 39, for the Salaries and Expenses of the Office of the Minister for Agriculture, including certain services administered by that office and for payment of certain subsidies and sundry grants in aid. The Book of Estimates for that year provides, in Part 1, a total estimated expenditure of £140,041,000 which was exceeded by the usual Supplementary Estimates. Then under subhead M these two schemes are separately provided for.

I would draw the House's attention to a publication entitled An Outline of Irish Financial Procedures, which was issued after the enactment of the Central Fund (Permanent Provisions) Act, 1965 and which I must say I found exceedingly helpful in understanding how this matter operates. In paragraph 18 it says with regard to the Appropriation Act:

The Act does not give legal effect to the various subheads....

In other words, in this particular case, the farm modernisation scheme or the disadvantaged areas scheme referred to in the different items under subheads M.I. and M.3. An Outline of Irish Financial Procedures goes on to say:

...To do so

in other words, the Appropriation Act did not give legal effect to the various subheads which are to be contained in Part II of the Vote —

would almost certainly result in considerable over-estimation and would disrupt the smooth working of the present financial system. Accordingly, the Minister for Finance has discretion to vary the allocation for each Vote between its constituent subheads.

This is known as virement.

Virement requires the sanction of the Minister for Finance in every case.

Virement is an application, under the specific authority of the Minister for Finance, of savings on one or more subheads to meet excess expenditure on another subhead, or subheads, in the same Vote, including any new subhead opened during the course of the year. This is not particularly a matter of the farm modernisation scheme or the disadvantaged areas scheme but rather generally of the treatment of expenditures which are comprised in Part II of the Estimates and which have been the subject of considerable exchanges between the Committee of Public Accounts and the Minister for Finance.

On 21 April 1977 the Committee of Public Accounts, referring to an earlier report of that committee, repeated that they did not accept the view that the Appropriation Act constituted the further legislation which they considered should be enacted to validate the issue out of voted moneys of grants in excess of the limits laid down in existing legislation. In that same report of 21 April 1977 that Committee had this to say:

It is clear to the Committee that the efforts made in the past to justify, by reference to the Appropriation Act, the making of payments in excess of amounts specifically provided for in particular legislation has now led to the situation in which, as in the case of the housing reconstruction grants, statutory limits are being ignored and parliamentary control is no longer evident.

On the general principle involved the Committee made a number of points:

The Appropriation Act appropriates moneys voted by Dáil Eireann for services described in Part I, the ambit, of each estimate.

which, in this case, is an estimated expenditure of £140 million, which ambit has been extended by additional supplies during the year.

The Committee commented further about the Appropriation Act that:

It makes no reference to the subheads and therefore gives no legal standing to the subheads.

Therefore, in the view of the Committee of Public Accounts there is no legal standing to the appropriation of moneys to the farm modernisation scheme and aids to farmers in certain less favoured areas, to give the full title of the disadvantaged areas scheme. In that particular report the Committee pointed out that there was no reference in the long title or in the text of the Appropriation Act—and that is correct—to the amendment of the Transport Acts. They continued to say:

If it is being held that the Appropriation Act constitutes amending legislation by virtue of what is contained in the subheads of particular estimates the subheads themselves then assume a statutory significance which is at variance with recognised principles of Government accounting. It would call in question immediately the practice of virement

which is referred to in An Outline of Irish Financial Procedures—

under which by the specific authority of the Minister for Finance, savings on one or more subheads can be applied to meet excess expenditure on another subhead or subheads in the same Vote.

Therefore, the Committee concluded that: Virement would be in breach of the Appropriation Act if the subheads had any statutory significance.

That Committee of Public Accounts referred to how successive Committee of Public Accounts had expressed themselves.

Subsequently there was a cross-examination—if that is a correct description of what goes on in the Committee of Public Accounts; I could not say that it is; it appears to me to be a very light crossexamination—by Deputy Vivion de Valera of Mr. O Cofaigh. After that the Committee of Public Accounts went on—because Deputy de Valera is very hot, much hotter than I am, on this subject of the subheads—about the legal significance of these subheads and of the Appropriation Act with regard to them. In a correct reference which I have read—because I have a copy of the interview with the Secretary here—the Committee was assured by the Secretary of the Department of Finance that a particular submission that had been made to the Attorney General was merely an internal, administrative document given to the Committee for their information, that it had no significance as a precedent or an interpretation that should be regarded as a precedent and that it did not rank in status with the minute of the Minister for Finance. The Committee wished to record their acceptance of this assurance. The Committee concluded, on this particular point, that the debate had gone on for a number of years and the Committee trusted that the principle which they sought to have established had now been unequivocally accepted and that they would never again have occasion to raise this matter.

The Committee, clearly, will have occasion again to raise the matter, but that is for the Committee of Public Accounts; that is not my particular concern. My particular concern is that our Committee do not have an opportunity to study, on behalf of Parliament, the schemes which have been decided upon administratively by the Minister for Agriculture, have not been able to express our view on the advantages or disadvantages of either of the schemes. Our Committee have not been able to make any report to Parliament as to whether the Minister has made the right decision in determining the type of scheme that he has produced. Incidentally, we have had every opportunity to do this with regard to the farm retirement scheme, which has been amended very many times because of the money factor. But we have had no opportunity, in these much more important schemes, to express any view to Parliament as to whether or not the schemes have been well designed.

The European Communities Act quite clearly contemplated that the method to be adopted would be a method of ministerial order, that the ministerial order could be annulled, that the Joint Committee, which is referred to in the Act of Parliament, would be able to scrutinise the order made by the Minister in determining the type of scheme, to give effect to this Act, and the Houses would then be given an opportunity to decide whether or not they liked the schemes.

There is a further important point, that is that there are cases where directives may be directly applicable, as regulations always are. These are both cases where there is no question of the directives being directly applicable. If the Minister made an order determining the scheme the question would arise of the rights which farmers might have under the schemes. In our domestic law they would have rights, which they do not have, because of the way in which this has been done.

I might draw the House's attention again to the wording of Article 189 of the Treaty:

A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods.

The national authority for legislating, giving effect to schemes of this order, is clearly under the Constitution, the Houses of Parliament. It is not any Minister, it is not the Cabinet, it is not the Executive, save to the extent that Ministers may have such legislative power delegated to them. and no such legislative power has been given. Legislative power in this case it would seem to me is clearly necessary. I would submit to the House it is clearly necessary and has not been given.

Section 2 of the European Communities Act, 1972, said:

The condition laid down in the Treaty in regard to the directive is that the national authority should choose the form and methods. Under the Constitution the national authority for making legislation is the Houses of the Oireachtas.

Section 3 says:

A Minister of State may make regulations for enabling Section 2 of this Act to have full effect.

I would submit very strongly to the House that the word "may" here in section 3 means "shall"—A Minister of State "shall" make regulations for enabling section 2 of this Act to have full effect. Section 2 of this Act, which refers to the acts of the institution, which refers to a directive, requires regulations because of the language used by the Treaty itself with regard to directives, that they shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authority the choice of form and methods.

I would argue on two grounds, what is appropriate legislation and what is proper parliamentary scrutiny, that, as this report I was directed to sign recommends, we should have these schemes dealt with by ministerial regulation rather than, as the Department of Agriculture have contended, it must be said without dissent from any particular Minister, from the beginning, administratively.

Dr. Whitaker

I would like to make a brief contribution to this debate because the principle on which the Joint Committee takes its stand is an important one in relation to preserving adequate parliamentary control over public expenditure. It is a principle that extends of course generally and, therefore, not just to the two schemes, the Farm Modernisation Scheme and Disadvantaged Areas Scheme mentioned in the particular directives.

Senator FitzGerald has taken us through the debate or altercation—whatever one might call it—which has been going on for years between the Committee of Public Accounts and the Minister for Finance about the adequacy of the Appropriation Act to authorise expenditure. It is not necessary for me to cover that ground again. The Joint Committee, in paragraphs 6 and 7 of the present report, recites briefly what the Committee of Public Accounts considers very firmly to be the position. That committee considers that the Appropriation Act, merely by authorising the payment of money under Vote, does not give legal standing to the subheads of that Vote and cannot therefore be held to provide statutory validity for payments set out in a subhead to a Vote. The particular form in which the principle is expressed here is that the Appropriation Act provides no statutory cover for payments in excess of the limits laid down by particular Statutes. But, if there is some lack of propriety, some derogation from parliamentary control, involved in exceeding an existing statutory provision by way of a subhead of a Vote covered by the Appropriation Act, there must also be a derogation of authority over expenditure involved in using the Appropriation Act, or purporting to use the Appropriation Act to authorise payments which were not authorised at all by any existing legislation, and even more so, to use the Appropriation Act purportedly to authorise payments which are implicitly forbidden or at least for which liability is expressly disclaimed in existing legislation.

Without going into any detail about the particular instance, may I just use as an illustration of what I am saying a major instance in recent years of what seems to me to be the unjustifiable resort to the Appropriation Act to cover expenditure? The Appropriation Act, simply because it lists and covers the Miscellaneous Expenses Vote, has been thought to give authority for a very large reimbursement of money from public funds, to the extent of some £2 million, to the depositors of the Irish Trust Bank. Apart from that altogether, in that same case, a payment of almost £1 million has been arranged to be made by the Central Bank to the same depositors to complete their reimbursement in full, although there is an express provision in the Central Bank Act of 1971 declaring that no liability rests on the Central Bank in such circumstances. I do not want to go into detail on this case; I am citing purely for illustration. But it does reveal, I think, what is wrong with purporting to use the Appropriation Act as a means of authorising various forms of public expenditure which are not delimited in some way in express legislation. What is at fault really is that, without the legislation, there is no genuine discussion of the principle on which the payments are being made. There is no Second Reading in either House to decide whether this is a principle which ought to be authorised. Further than that there is no discussion, no laying down of the conditions which ought to limit the acceptance of this principle in particular cases. No legislation has been through either House providing an opportunity to discuss either the principle of the payments or any limitations or qualifications which, in the public interest, should be imposed on the making of such payments. In the particular instance I have mentioned, the Central Bank, no doubt, made the payment on the basis of an assurance from the Government that at least in relation to what the Central Bank was paying, there would be covering legislative authority. No such authority has yet been obtained. Years have gone by and no legislation is yet in sight. There is here quite an important principle in which, not only the Public Accounts Committee but all of us should take an interest because of its implica- tions for adequate parliamentary control of expenditure.

Mr. McDonald

I should like to support very strongly the case made by Senator FitzGerald. In his brilliant statement of the case he gave us the legal position from the point of view of our Constitution and from the point of view of the citizen and indeed of the areas where the Oireachtas was being short-changed. He explained fully the history of this problem and the attitude of successive Ministers to it.

The clarity with which the Senator argued this case leaves very little for anyone else to say. Nevertheless, I recall the case being argued when this matter was going to the Joint Committee first in 1975. It could be said then in the early years of our membership that the Department should have had the easy way out but there is not, now, that kind of excuse for this abuse of our Constitution. The Oireachtas must have their perogative as the legislative arm of our Republic. If these schemes are implemented by Act or by statutory instrument, it has been said that the Houses of the Oireachtas—the spokesman of the people—will have the opportunity of discussing them and commenting on them. That is exactly what the Treaty of Rome has laid down: that these directives should be implemented by national legislation. To take as an example the administration of the disadvantaged areas scheme, it certainly leaves too many questions unanswered. The current Estimates show a reduction of £17,500,000 for that scheme.

Yet, we find that in the middle of January the Minister extended the designated areas by 105 electoral divisions or parts thereof. This is confusing. In addition, the Government have introduced a new system whereby they designate areas for special high grants of 70 per cent for drainage alone. The ordinary farmers think that they are part of a designated scheme, that they come under the European grant. This creates a lot of confusion to the point where people do not know what they are entitled to.

The Government have broken up the disadvantaged areas scheme and have given parts of the scheme to one area and other benefits to another. This is not what was indended. The selection of those areas conformed to no particular specification. Certainly, it is not based on the national soil survey; neither is it based on elevation because, we find, even within parishes, that the higher, mountainous areas are excluded whereas lower and better land is included. Nor is selection based on fertility. The boglands are not even considered. You have areas where one side of a river can be designated, and the other bank, such as the Offaly side of the Shannon, only falls into a national scheme.

It is in this area that clear legislation is needed so that people will know and appreciate what they are entitled to from public expenditure. In addition, on the latest 105 electoral divisions even ACOT refused any input into the selection of the schemes. The most extraordinary thing is that the Department have not made maps available indicating what areas have been included. They will not produce such maps. The administration of this scheme is most unsatisfactory from the citizen's point of view. This has to stem from the fact that there is nothing clear-cut laid down in legislation.

The Minister will recall that towards the end of January I wrote to him asking him for a map of the areas included in the scheme. I have not received one and I do not believe that one is available. It is not good enough that we should have a grace-and-favour situation for the handing out of almost one-quarter of the finance coming under the Department of Agriculture. The Joint Committee—and I can only speak for the committee of which I was a member in 1975 — lay it down quite clearly and, as Senator FitzGerald has said, the situation has not changed. In their recommendations of 2 July 1975 the Joint Committee stated that they could not accept that the Appropriation Act does any more than sanction the total national expenditure required for a community scheme and that in the case of the disadvantaged areas scheme, they believe that the prescribing of the detailed provisions of the scheme is a legislative act and as such is reserved for the Oireachtas alone under the Constitution. The Treaty of Rome, while it may be vague, envisages that the administration should be carried out by the national parliaments in the various countries. This is what is happening in the other eight member states of the Community as I understand the situation to be. I cannot speak for the newest member, Greece. The volume of legal opinion has been in favour of the regularisation of this situation. This view has been consistent since 1974-1975 and it is the unanimous view of the committees who have considered it. Since, in practice, the administration of these schemes leaves so much to be desired, it is time the problem was rectified.

I would join with those who have spoken in imploring the Minister to comply with the wishes of the Joint Committee and thereby to ensure that the EEC schemes that are operated under those directives and the national schemes not only are but are seen to be open and honest and that they treat all citizens, whom they are designed to assist, impartially and equally. In this disadvantaged areas scheme the least the Department can do is to have a map showing clearly the areas that are included. As it is, it is becoming a joke. It is difficult to find people who know whether they are in or out of the schemes. How is anyone to know which parts come into the grace-and-favour section?

Minister of State at the Department of Agriculture (Mr. Smith)

First, I should like to thank Senator FitzGerald for his words of welcome and to say that I am sorry that on this occasion I cannot be more accommodating to his view. The Seanad is asked this evening to take note of that part of the Joint Committee's report which deals with the implementation of certain directives of the EEC and expresses reservations about the manner of their implementation. The main import of the committee's conclusions relates to three separate points: firstly, that the absence of statutory instruments for the implementation of certain directives frustrates the control which the Houses of the Oireachtas intended to exercise over the implementation of Community secondary legislation; secondly, that if the implementation of a directive requires legislation only the Oireachtas can so legislate although it may delegate that power, and thirdly, that the Appropriation Act does not provide "statutory validation for payments".

Before I deal with these individual aspects, I want to make a few general points. For a start, there is nothing, anywhere, no provision in the Treaty of Rome or in the Treaty of Accession, and no provision that I am aware of in our domestic legislation which lays down that an EEC directive shall be implemented only by statute or by statutory instrument. This needs to be said in case the public should get the impression that some doubtful practice or something underhand is being or has been done. There is no question of even attempting to circumvent any law.

Indeed the definitions in Article 189 of the Rome Treaty itself allow for flexibility in the manner of implementation of directives. That Article—and I note that the committee have referred to it from time to time—enables the EEC Council and the Commission (a) to make regulations, (b) to issue directives, (c) to take decisions and (d) to make recommendations or deliver opinions.

Regulations apply generally and are binding in their entirety in all member states. That is clear and precise. Directives are binding only as to the result to be achieved but the form and methods of achieving the result are left to each member state. There options are allowed. Decisions are binding in their entirety. Again this is very clear and definite. Recommendations and opinions are not of course binding.

It is evident therefore that directives were intended to leave discretion to the member state as to the manner of their implementation.

As well as that, the directives that we are now talking about themselves allow for different ways of implementing them. Directive 159 for example requires member states to submit to the Commission the laws, regulations or administrative provisions they intend to apply in pursuance of the directive. In some cases we chose to use administrative provisions rather than regulations.

I want to make just two more points. One is that there is as far as I can judge no suggestion either by the Joint Committee or by this House that the schemes which have been introduced—the farm modernisation scheme and the disadvantaged areas scheme—do not fulfil the requirements of the directive. I am glad if that is so because, of course, we had in fact to satisfy not only the EEC Commission itself but also our fellow members meeting in standing committee that what we were doing or were proposing to do, did fulfil any obligations imposed by the directives. Any criticism on this score in the past has, however, been more inclined to the view that in reality we are over-scrupulous in fulfilling our obligations rather than lax in doing so.

The other general point relates to the position of Directive 160 of 1972 which has been implemented by way of statutory instrument. Why should this be so for that directive and not for the others—a legitimate question posed by the Joint Committee? Directive 160 involves the surrender of land by farmers, the fixing of a market price for it, and its redistribution to others. That is the essence of it, with of course financial provisions added on. Suppose this activity was being carried on otherwise than under an EEC umbrella, what would the position be? I think the House could agree that that particular kind of activity would have to be backed by statute just as all Land Commission work is. For that reason, that particular case of Directive 160 does not in my view establish the case for using statutory instruments as an invariable practice.

I should say that when I was looking into the background to this question, I came across a rather interesting earlier discussion on the subject. It took place at a meeting of the then Joint Committee on 2 July 1975 and it is reported in Volume 1, No. 15 of the debates, columns 423 to 434. I would suggest to any Members of the House who may not have done so already that they might with advantage read the contribution made by the then Deputy John Esmonde during that discussion. His observations made with commendable insight and clarity at the time seem to me to deserve closer attention than they received then and to be entirely relevant still.

I return now to the particular aspects of this issue that seem to be of concern to the Joint Committee. The first of these was that failure to use the statutory instrument procedure frustrates the control which the Houses of the Oireachtas are intended to have over EEC Secondary legislation. That would certainly be valid if examination by the Joint Committee was the only measure of control open to the Oireachtas. But that is not the case. Indeed I note that in the debate I have just referred to the then Deputy Esmonde dealt very forcibly with this particular question pointing out that our Parliament has a variety of means open to it under Standing Orders if it wants to get to grips with a particular issue. These include motions of censure, notice of motion and even the parliamentary question procedure. Besides, the Joint Committee now have a full opportunity to examine EEC proposals for regulations or directives at the draft stage and can make appropriate recommendations at that stage. I agree that Directive 159 is different in that regard because it was there before the Joint Committee was established. But that is the exception. On a general plane the argument that absence of a statutory instrument frustrates control does not stand up. Indeed, the implementation of Directive 159 in the guise of the farm modernisation scheme was debated in the Seanad as far back as May 1974 and aspects of it have been the subject of debate here on other occasions since then.

The second reservation of the committee, as I interpret it at any rate, is that if and when legislation is required, its enactment is a function of the Oireachtas. That certainly is an accepted principle. But as I said already, the question really is whether or not directives have to entail specific statutory instruments or statutes for their implementation. There is nothing that says it must be so. The question of whether a directive should be implemented by legislative action is therefore left to the judgment of the member state in each case. It so happens that in many cases a statutory instrument will be appropriate. In others it will be less so. Take Directive 159 for example. Only part of that directive is in fact obligatory on the member states. Other parts of it are permissive especially Article 14.2(a) which allows for national aids to farmers. The disadvantaged areas directive is essentially an enabling directive and a member state if it so chose, could decline to implement it at all.

Amendments of a non-substantial nature have arisen in both cases. These arose in the main from the green £ changes which led in turn to adjustments in figures specified in the directives. These changes were occurring so often a few years ago that, if we were then operating on the basis of statutory provisions, amending orders would be cropping up with almost ludicrous frequency. So, in the first place, there is no requirement which says absolutely that directives must be implemented statutorily and in no other way and there will always be cases where non-statutory action will be the more appropriate.

Coming to the role of the Appropriation Act, I have read very carefully the views of the Committee of Public Accounts quoted in the report. The conclusion reached by the Committee is that the Appropriation Act does not of itself confer any authority for payments which are in excess of limits laid down in other statutes. That makes sense. Let us take a hypothetical example. Suppose the Diseases of Animals Act lays down a limit of £500 for compensation for an animal slaughtered because of some disease. If the Minister for Agriculture wanted to pay £600, he would have no authority to do so and could not rely on the Appropriation Act to authorise such a payment. The proper course would, of course, be to amend the specific legislation first. That, however, is a far cry from saying that the Appropriation Act confers no authority at all. Many schemes down through the years—the farm building scheme, the calved heifer scheme, the land project, lime and fertiliser subsidies and many others did not have specific statutory backing. It is hardly being suggested now that those were not legal. The Appropriation Act may not authorise payments which are in excess of statutory limits but it does authorise legitimate payments. Besides, of course, the Estimate for each Department is examined and debated in the Dáil each year and each subhead is open to scrutiny at that time. The views of the Committee of Public Accounts on the Appropriation Act which are quoted in the report must be looked at on the basis I have outlined. There has been no attempt to exceed any limits imposed by the basic directives. Indeed, the committee have not suggested that there was any attempt of this kind. Authority for the expenditure does not therefore seem to be at issue. The fact that Community money may be involved does not alter that. The Exchequer has to spend the money first from its own resources and then receive recoupment. As well as that all the payments are subject to audit both by our own Comptroller and Auditor General and by EEC auditors. There cannot be any scope for abuse.

In sum, the position as I see it is that there is not necessarily any single unique "best" way of applying EEC directives. The method adopted will depend on a variety of considerations. In the ultimate, however, no matter what method is used, there are adequate safeguards to ensure that no abuse is possible and furthermore adequate means of supervision and control remain open to the Oireachtas.

There are one or two comments I want to make in relation to points that have been made during the debate. The point that the Appropriation Act does not give legal effect to expenditure under subheads and the general questioning regarding expenditure that has been made traditionally down through the years under this Act seems to be one of the points with which both Senator FitzGerald and Senator Whitaker take issue. As far back as 1946 the then Minister for Industry and Commerce had an action involving the Latchford bakers. This arose because, under a discretionary clause he proposed to withhold a subsidy which was then payable to that bakery. A Supreme Court case ensued which decided in favour of the plaintiff, Latchford. The status of the Appropriation Act, even though there was no statute, was quoted in the course of the court's judgment as authority for payment. That is a long time ago but it established the rights of an individual to secure whatever benefits are available under a State scheme, even though the scheme has no specific statutory basis, once a person complies with the conditions. Nobody can suggest that any farmer would arbitrarily be denied benefits from the Farm Modernisation Scheme or the Disadvantaged Areas Scheme because the actual scheme had no statutory basis.

In relation to the points made by Senator Whitaker, if he questions the Appropriation Act in the way in which he does, it probably is a matter which will have to be debated elsewhere. As the Senator will know from his own experience, payments down through the years have been made on a variety of schemes, subsidies and other kinds, under that particular Act and if it is now being suggested that these were inappropriate on some legal grounds, it has very little to do with the question of the responsibility of this joint committee on secondary legislation and is one which may have to be decided more appropriately elsewhere.

I was surprised at the tenor of Senator McDonald's remarks in relation to the disadvantaged areas scheme and the claim that designation of areas in this country are by grace and favour. It is an extraordinary statement and it is clear from it that the Senator would want to have a closer look at the whole system as to how areas are designated. I would not have proposed normally to deal at any great length with that particular matter here as it is not relevant but because of the unfounded charges that are made I must say a few brief words about it.

The directive under which areas are designated sets out the most rigid criteria. For areas to be designated they have to come up to certain standards in relation to a decline in population, low productivity and a series of other criteria with which only areas which are fairly deprived can comply. These proposals are compiled through the ACOT services, through the Department of Agriculture and are negotiated through the structures committees in the EEC over a very protracted period. Long and exhaustive discussions have gone on between the different agencies in relation to the designation of areas in this country. It would be far from the wish of the majority of Members of this House to cast reflection on those men serving in the ACOT services, in the Department of Agriculture and in the structures committees in Brussels, some of whom have been extraordinary helpful to this country in getting an extension to those schemes.

It must be clear to everyone that the soil survey is not yet completed and in recent times the people in An Foras Talúntais have given the number of years it will take to complete it thoroughly. At no stage was it envisaged, though there has been contact with An Foras Talúntais in relation to that soil map, that that would be the only method of deciding what areas would qualify. While a soil analysis deals with the soil, I would hope that any Government worth their salt in relation to this matter would be more concerned with people and what can be done for them. As far back as 1976 the former Minister for Agriculture, Deputy Mark Clinton, said that would be the last extension that would be made. Since then we have been able, by getting the total agriculture area for the country increased, to get a further extension.

In relation to these extensions, maps are available. District electoral division maps giving all the townlands are available and have been publicised in the national newspapers and the local papers. They are available to anybody who wants to find out precisely what areas are included. There is ample information as to the townlands and everything else available in the local authorities without even coming to the Department of Agriculture, though we would be glad to assist anybody to find out whether they are in or not.

The position is that this extension, the last one or indeed any future one, has to be negotiated under very strict criteria. You can only succeed if the scheme of proposals is satisfactory to the structural committee in Brussels. You have only to look at the record in the last two years, during which no other country except Ireland succeeded in getting any extension at all, to understand how difficult it is to meet the criteria. Any suggestions that areas have been designated because of grace and favour is so far away from the reality of the situation that I do not want to say more about them.

In relation to the whole general situation, I should like to add that there has been a case where a person in this country who felt a grievance in relation to implementation of the farm modernisation scheme was able to have his case taken to the European Court. As you know, under the general system of common law here we allow the greatest flexibility to citizens to pursue their rights. In the Houses of the Oireachtas the Minister must satisfy the Houses. There are different procedures available to anybody who feels that he or she has a grievance to follow it through the normal course. We have to satisfy the EEC Commission in regard to how we implement these schemes. But at every level the opportunity is there for people who think otherwise to have it examined.

In the course of my short experience in the Department of Agriculture, I would say that up to 75 per cent of the questions being asked at Question Time in the Dáil in relation to the areas that have been assigned to me have been in relation to these schemes. At no stage have I had a question from a Deputy suggesting that there was any improvising on matters of that kind by my Department. That will continue to be the position.

Mr. Mulcahy

I have not much to contribute on this report. As I am a member of the committee and have been in on the discussions, I think it is right that I should say a few words. I have not got a legal mind and I find it difficult at times to wrap my brain around some of these issues. A few thoughts struck me as we were going through it. Remember that this motion is asking the Seanad to note the report. It seems to me that there is an issue here. It came up before the previous Joint Committee and it has come up again.

I would like to congratulate the Minister for dealing with the matter very thoroughly and answering the points raised by the Leas-Chathaoirleach. I could not help feeling that even the Coalition would have done something about it if they were that worried about grace and favour. The Minister has dealt with it and we can leave the small politics and the big politics of the matter aside.

As far as the problem is concerned, it occurred to me that this question of the form is to be decided by the member state. I assume that Senator FitzGerald covered this, but, just to give my own perspective on it, it comes down to an understanding of what "member state" means. Who decides the form? Is it the Government, the Minister, the Department officials or the Oireachtas in all of its meanings?

If some of the provisions of the directives are to be legitimised perhaps enabling legislation, which provides for flexibility, once-off legislation, might get over the problem. The Department would then be in a position to make whatever adjustments have to be made in relation to green £ adjustments or adjustments in relation to designated areas. Some umbrella enabling legislation, which could be periodically adjusted the same way as we adjust legislation in terms of, say capital, limits applied to the borrowing power of Aer Lingus or a semi-State body, might get over the problem. Perhaps that is too naive a view of it, but I throw it out as a contribution to the debate.

The whole question of the relationship between EEC legislation and national legislation worries me a little bit at the moment because of the discussion that is taking place, for instance, about how far can the EEC go in relation to contentious issues like divorce, abortion and so forth. That debate took place in Brussels earlier this month. It was brought to my attention recently, when discussing the operation of the Equality Acts and Unfair Dismissals Acts, that the terms of the Third Amendment to the Constitution seem to give the EEC legislation overriding powers in relation to our Acts. I am referring here to Part II of the Third Amendment to the Constitution Act, 1972, where it says:

No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the Communities or institutions thereof, from having the force of law in the State.

An Leas-Chathaoirleach

The Chair would like to interrupt the Senator to remind him that there are eight minutes only left in the debate and the Chair is anxious that the mover of the motion should have a few minutes to conclude.

Mr. Mulcahy

I have made my point, so I will not cut too much into the summing up of the Chairman of the Joint Committee. I would like to read that into our discussion. I do not fully understand the degree to which that holds. If it does, it means that things can happen in Brussels which are super-ordinate to our Constitution. That raises a question mark for me.

Séamus de Brún

Before Senator FitzGerald replies, I would like to make a point in regard to the maps mentioned by Senator McDonald. These have been in circulation for some time and I have one of them in my possession which I read weeks ago. I want to put that on the record of the House to endorse what the Minister said.

Mr. Alexis FitzGerald

I do not know if I was meant to hear what the Senator has just said. I did not hear it so I hope I do not have to deal with it. I am not going to do any summing up on this debate. I am thankful to the Minister for what he said. I will just concentrate on one point. The Minister for Agriculture is wrong on this. If I may concentrate on one matter, section 2 of the European Communities Act says that: Acts of the Institution to the Communities should be binding on the State and should be part of the domestic law thereof under the conditions laid down in the treaties. Article 89, which is the relevant one, specifies with regard to directives that it shall be binding as to the result to be achieved, but shall leave to the national authorities the choice of form and method. Senator Mulcahy is entirely right. It is a question of who are the national authorities.

Section 3 of the European Communities Act says very clearly that a Minister of State may make regulations for enabling section 2 of this Act to have full effect. The Minister of State is given the power, if chosen as the national authority, to choose the form and the method for implementing these two directives. He is clearly chosen as the person to determine the form and the method. He has a choice to make; as the Minister said in regard to one of them "it is enabling only".

The section goes on to indicate the manner in which the Minister must make his choice. The Minister of State may make regulations for enabling section 2 to have full effect, that is to say, to choose the form and the method by ministerial orders, whereby the directive has sole effect to constitute the importance of domestic law.

Section 3 says, "to enable section 2 of this Act to have full effect". Section 2 says that these Acts shall be part of the domestic law. It does not leave that optional. It says these Acts shall be part of the domestic law. They cannot be part of our domestic law unless the Minister makes an order under section 3. By making an order under section 3 he makes them part of the domestic law, unless, and until, following a report of the Joint Committee, this House and the other House, annul his order.

The Minister for Agriculture has this power and he must exercise it to make the directive part of our domestic law. This is so specified in the Act and it is not a question of the Treaty depriving us of this choice. The treaty, with regard to directives, gives us the choice. It gives our national authorities the choice and form of the method. Our national authorities are the Oireachtas, enabling Ministers to make orders and regulations subject to the approval of the Oireachtas. I will not follow the Minister or Senator Whitaker on the other question of the Appropriation Act. I think the Minister is incorrect on that. This is the more important aspect of the matter. I would like to end the debate by inviting the Minister to consider again the legal position of the Minister for Agriculture with regard to this. These directives provide for rules. They refer to criteria; they indicate decisions which will mean some people are in and some people are out. That is a matter or regulation, order and law. If the Minister wishes to do it, it is open to him to make an order saying: "I hereby declare that anything that occurs to me after Tuesday next is part of this directive" and to try to collect from the Houses of the Oireachtas the full power that he is purporting at present to exercise. It is open to the Oireachtas to decide whether to give it to him or not. At the moment it has not been given to him. There is not an order in existence which has the effect of complying with the requirement of section 3 to make regulations to enable section 2 to have full effect. Section 2 has not full effect with regard to these two directives, because there is not an order under section 3.

Question put and agreed to.

An Leas-Chathaoirleach

Before I call the matter on the Adjournment would the Leader of the House indicate when it is proposed to sit again?

Mr. W. Ryan

Next Wednesday at 2.30 p.m.

Seanad Éireann debate - Wednesday, 25 Mar 1981