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Seanad Éireann debate -
Tuesday, 28 Jun 1988

Vol. 120 No. 9

Forestry Bill, 1988: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

In beginning my consideration of the Forestry Bill it is important to put on the record the response of the Irish Congress of Trade Unions to it. I will be putting their view into context later in what I have to say on the Programme for National Recovery. Congress welcomed the decision of the Government to bring on this legislation but said, in their statement that, first, the Government should give sufficient resources to the new State company to increase tree planting and to develop a forest product industry; secondly, that action should be taken quickly to create the 2,000 jobs promised in the national programme in planting and in downstream wood industries and, thirdly, to seek more money from the European Economic Community for forestry. That was the bones of the guarded welcome from the Irish Congress of Trade Unions. That immediately raises a point which worries me in my reading of this legislation, and it is in regard to funding which is available from Europe.

It saddens me to look at the statistics quoted by the Minister in his presentation this morning, about the disproportionate funding for private as opposed to public sector afforestation. The imbalance is unacceptable. The facts mentioned by the Minister stand out at a level which we cannot put up with. I would like to hear from the Minister an explanation as to what fight the Government have put up in Europe to get more funding for the State afforestation plan. There seems to be some semblance of negligence in that area and, perhaps, the Minister will explain it to us. The Minister referred to it in his speech but did not actually explain it. I know what the problem is. The problem is of course, that the EC budget only extends as a support of the private sector, private afforestation but what I want to know is what efforts we have made to change from that position. That is my first question and much of what follows will depend on the answer to it.

The Bill, as we are well aware, commits us to a further £200 million over the next four or five years, or whatever period of time is mentioned in the Bill. If some of that money could come from Europe there would be an immediate saving to our budget. First, I want to know if we are pushing for that money. What is the plan to get money out of Europe to support the afforestation policy? Secondly, if we do get money from Europe, out of which budget is it likely to come? In other words, is it out of the agricultural Vote? It seems to me that this might be the problem and that there is a nettle which the Government lack the political will to grasp in this case. The money is available in Europe but I believe it is only available through the agricultural Vote. I believe that the agricultural lobby here in strong enough, and is too strong, to prevent the Government channelling some of the money from the agricultural Vote of Europe towards afforestation. In other words, it is going down the line of least resistance as it were towards those groups who are pressurising the Government for the money. I would appreciate if the Minister would deal with that in some detail when replying.

In the legislation we are looking at £1 billion of the State's resources being transferred. It is very hard to put a figure like £1 billion in context. All the cuts last year, and all the cuts the Minister for Finance and the Government are looking for this year plus almost half as much again would just about make up the amount of State resources we are transferring to the company in this legislation It is very serious when we are talking about £1 billion worth of the resources of the State and we had better do this right. Not only is there £1,000 million involved but, additionally, the Bill allows for a further £200 million to be added to further support the setting up of the forestry board over the next four years. That amounts to £1,200 million and because it is not the kind of money a worker, trade unionist or ordinary person going about his or her business can easily grapple with. I just think again about the greed buds of the capitalists who will look upon this money as easy pickings somewhere down the road.

We are taking £1,200 million that is at the moment controlled and owned by the State and putting it into a semi-State commercial company in such a way — I will refer to this later — that the Minister for Finance and the Minister for Energy between them can decide to sell or move out of. In other words, this £1,200 million worth which belongs to all of us, we all have a share in it however small, can be sold off to the private sector in a number of years time.

What kind of people are interested? There are hundreds of millions of pounds managed by the managers of, for instance, pension funds particularly. Those managers are not interested in a quick profit on their investment this year; they are interested in putting their money into a secure area with sound and continuous capital growth. Nothing would better describe afforestation than capital growth. Those people would be quite ready, willing and able to buy into these companies in two, three or four years time and would not be looking for a quick return on their money because a tree planted today is not worth a shilling as timber for 30 or 40 years. I will refer to other things such as biomass on which there is a quicker return later. In general terms, afforestation is a 30 or 40 year investment.

I want it clarified for me the kind of protections that are built into this legislation to stop any attempt by the State to give away this major resource to the private sector because it could be easily sold to fund managers who would buy into it. Every year a tree grows another foot and the forest increases in value. There are hundreds of thousands of cubic metres of timber growing each year and, therefore, the capital investment is appreciating and, at the same time, moving into profitability. This could also wreck the total afforestation plan. In the Minister's presentation this morning he referred at some length to the fact that what we are doing today is continuing the work of those people who had planned afforestation before us and sowing the seeds of a greater afforestation policy in the future. That is fine as long as we do not sell out to the quick-buck merchants in four or five years time who may sell off these trees, sapplings or half-grown trees at a profit and, therefore, denude us of afforestation again.

Those things would only happen if the company was to sell out. In other words, I would not be a bit worried if everything was as is provided for in the Bill. The only part of the Bill I am referring to is section 21 which allows the Minister to sell shares, in other words to dispose of the company. I want to know how we are guarding against that. I do not believe we are. We are leaving ourselves wide open. I believe that forestry could be in profitability within six years. The fact that in his presentation the Minister was talking about supporting it at the level of approximately £50 million a year for the next four years on average means that he probably also sees that it would be moving into profitability in about five or six years time. I would like to have that responded to. I will be putting forward amendments on Committee Stage to address the problems created by that.

On the question of the sale of land, let me say first of all that I welcome the improvement in this section as opposed to that in the initiated Bill which did not allow for the acquisition of land, or at least it seemed not to allow the acquisition of land. This has now been corrected and I welcome that. In welcoming it, let me say I am not opposed to the selling of land. I have said consistently that in these areas there is no point in hanging millstones around the neck of the State or semi-State Bodies. The company should be commercial. For instance, if the board have a small number of pockets of land which they would be better off disposing of, if they have a number of stands of wood which they could sell off to buy a larger attractive piece of land in order — in terms of economies of scale — to get something that would be more economically viable, that is the way they should operate. I am not objecting to the sale of land on that basis. I would object, of course, to the selling out, to the total liquidising of assets. I think as well that that has been a strengthening part of the Bill, the part that allows them to do those two things.

In terms of the objectives outlined in the Bill in section 12, I find them very narrow. I looked carefully at what the Minister said this morning. I wonder where it ties in, for instance, in the development of the tourism industry, where it ties into the enhancement of the environment. That should actually be an objective. O.K., so it is not very sexy for these commercial companies to want to enhance the environment, as it were; but I certainly believe that this should be tied straight into their objectives, that whatever they do should enhance the natural beauty of the countryside in one way or another. I feel that that should have been written into the objectives of the Bill in section 12. "To establish and carry on the woodland industries"— I have some idea what is envisaged by that but I would welcome a fuller interpretation or a broadening out of that particular objective.

We are back again, in section 15, to the old chestnut of the appointments to the board. I will be speaking at some length on the question of worker-directors shortly, but I will come back and deal with that separately. But this reads "jobs for the boys", I know it is painful, Minister. Of course, it is painful. Reality jars. It says "The Chairman"— I presume that is bi-sexual in its interpretation and I will be putting down a proposal that that should be replaced by "Cathaoirleach" or "Chairperson"— and other directors shall be appointed and may be removed from office by the Minister with the consent of the Minister for Finance. What does that mean? Let me protect the Minister by saying that leaving it there leaves you wide open to political pressure. They will all be on to you.

The Chairman and other directors may be appointed and may be removed from office by the Minister with the consent of the Minister for Finance." That is who will appoint.

Whom do you want to appoint the chairman?

I can tell you what I want written into it. I have no difficulty with the person who creates the appointments, but I want criteria laid down, I want disclosures built into it and I want protections. That bald statement would not be acceptable in the UK, in the US or in any country which already has things like Disclosure of Information Acts, etc. That is the point about it. What I am saying to the Minister, is that this type of appointment should be above suspicion. That is all I am saying. There are two reasons for saying that: first, because it is written there. Sombody is going to be reading that in a cumann somewhere and they will say, "That will be a nice job now for somebody" and will begin to put pressure on a Minister. This is not a reflection on the Minister now at this point. This is the nature of political life. People feel that they should be rewarded for their loyalty or whatever. Therefore, the pressure is put on a Minister to make certain appointments. As this Bill is written the Minister is going to have to say "no" or "yes". If we had written into it certain criteria of the type of background a person might have to have, the type of experience they must have, the fact that they would have to represent the workers and be elected — if we had things like that built into it, it would mean, first of all that Ministers and the Government would be removed from the political pressure; and, secondly, it would also make sure that we got a stronger board. Last week here with the Broadcasting Bill the same discussion took place. I am not discussing that Act——

The only thing is that you are going into such detail and you will be repeating yourself on Committee Stage is the same section. I am only protecting you from yourself now.

Indeed, I am sure I often need protection from myself. It is nice that somebody cares about me so much as to protect me from myself, particularly from the worst excesses of myself.

The detail you are going into. Senator O'Toole, is really Committee Stage detail.

I think you are probably right. It is just that the Minister seemed somewhat bemused by my opening points so I felt it incumbent on me to expand somewhat on my views on it. I will be expanding much further on it when we come to it at Committee Stage. I am sure you will look forward with some interest to that.

Maybe the Minister will expand?

If this thing were in operation and people were on the board, people would say I was pointing the finger at the Minister because those fine men and women who would be on the board at that stuge would be all thrown into the milieu of suspicion and political graft and thank yous and pay-offs and all the rest of it. Here we are now in a green field situation, or in a green forest situation, or whatever it happens to be. It is before we start. I am saying: let us build these things into it. Let us take away the temptation, as it were. I am not saying for one second that the Minister here present would in any way give in to that kind of temptation or whatever. The Cathaoirleach knows herself that everybody is human and people could be put under pressure. It could actually cost people politically. Everyone is going to be looking for a place on the board and there is only room for nine members. Every disappointed customer is a vote less or whatever — I do not know. We will be developing that, as the Cathaoirleach would say herself, in some more detail on Committee Stage. I notice that the Minister is getting restless on the issue. I am sure he will also have much to say to it at that point.

At least he will be in a position to answer you and then you can have the chat between each other.

Indeed, that should be nice and cosy at that stage. Section 23 of the Bill, which is the section which deals with the payment of dividends, etc., into the Exchequer, states:

All amounts representing dividends or other money received by the Minister for Finance in respect of shares in the company and all amounts representing repayment of or interest on repayable advances received or recovered by him from the company shall be paid into or disposed of for the benefit of the Exchequer in such manner as he may direct.

All I can say to that is "Hem, hem" and about time. I am sick and tired of seeing semi-State companies being set up in some sense away out there without any benefit to the State. Semi-State companies should be helping the Exchequer, not a drain on the Exchequer. People, particularly in the Fine Gael benches, normally look around when I make that statement, that this should not be coming from the socialists or Left side of the House. People mistake State intervention and State industry for handouts. That is never what is in mind. They should be profitable — perhaps not all the time in the sense that this would not be profitable for the next four years, but they should be paying into the State.

The reason I want to make some comment on that is that the only way we can deal with it is to show the analogy of what does and what does not happen. Compare what is proposed by that Bill with what happens with some company like Irish Life, which would also be under the control of the State. Irish Life would be considered to be a very profitable company. The private sector cannot wait to get their fingers on it. What is happening there, in fact, is that it is very profitable. Its funds have been the greatest growth areas in managed funds or unit trusts in either the UK or Ireland over the last ten years. If you compare the Irish Life managed funds or unit trusts with those anywhere in the UK or the rest of Ireland you find that in general they come out on top. The reason they are coming out on top is that their profits are paid back into the fund. Despite the fact that the Minister for Finance is the major shareholder, he is not taking his profits.

That is disgraceful. I think it is insupportable. There is profit there which should be paid into the Exchequer funds and it is not. In other words, the State is not getting out of Irish Life what it is entitled to, what a normal shareholder would be entitled to. If it is privatised, I can assure you that the people who buy it are not going to be content to buy it, and pay £200 million or whatever it is they will pay for it, and then allow no profits to accrue to them over the period of years after. They will insist on their profits. Of course, what is happening — and this is what gives the semi-State sector a bad name — is that this company should be paying millions of pounds into our Exchequer every year but it is not because the main shareholder, the Minister for Finance, is not looking to be paid. The danger about that is that section 23 manages to circumvent that because it is demanding that the dividends which will accrue to the Minister for Finance will come back into the Exchequer. There was purpose in my rambling there for a second. That is why I welcome that, and I will certainly oppose anybody who tries to weaken the commitment of the Government to take the share that the State is entitled to out of it.

I would be afraid if that were to be changed or if it were not to be done. For instance — and perhaps the Minister can come back to me on this one — under section 23 the Minister shall make sure that all the amounts representing dividends and so on shall be disposed of for the benefit of the Exchequer. Would that allow the Minister for Finance to say "I do not want any pay-out of the shares this year; let it go back into the company"? That would be a very bad habit. I would prefer in fact that the Minister would take his shares or dividends, put them into the Exchequer and pay it back as grants if that is what he wanted to do. I think it would be extremely bad practice to allow any sort of thing to develop where the State did not take its money out of it. What happens then is that, if the State does not take its money out of the afforestation plan, the profits accrue inside and it becomes very attractive to private industry to move in and walk off with the accumulated profits of years. That is one area which I would be watching with great interest, Skibbereen Eagle-ish as it were. I would like the Minister to comment on that.

In terms of forestry in general, I would like to see in the Bill some sort of recognition of the importance of the forest areas of Ireland as amenities, as a leisure base, as a base on which to build the tourism industry. I would like to see a very close connection between the development of tourism, for instance, and afforestation. I had an argument two years ago with the then Minister with responsibility for forests. I said to him "If you did nothing else except build picnic sites everwhere that a road goes through a forest, you would enhance the environment, the countryside and make the country more attractive". There is nothing as attractive as a woodland picnic site, caravan site or whatever. Lough Key Forest Park is a perfect example of the kind of thing that can be developed. There should be more of that. Let me say immediately this is a profit making and a commercially viable idea that I have here. I would ask the Minister, in relation to the question I asked for an expansion of section 12 for woodland industries, would that type of industry be envisaged? I suspect it would not.

All these things must "gel" together. I have said previously that I think tourism is something that can increase ten-fold in terms of its contribution to the Exchequer and job creation here. I would ask anybody who drives on continental Europe to look at the position there. After every ten or 15 miles of motorway in France they would have a kind of layby, very often in a forest area. It just adds to people's enjoyment of the countryside, the pure enjoyment of it. Maybe that sounds a bit soft in terms of us discussing a very hard commercial industry here. I would say to you that I would see, as part of the commitment and as part of the objectives of this new company we are forming, that they should work hand in hand with the tourism industry, not on a hand-out basis but in a commercially viable way in order to provide things like picnic stops, camping and caravaning sites, parks, the development of walks, which has already been done very successfully by the Government Departments at the moment, and the development of nature study bases and areas, also research and development based on forestry. I would like to have that whole area spelled out in detail in the Minister's response.

I was looking recently at how little we invest or re-invest in research and development. I looked at the European figures recently, the second last in the league was Belgium. Ireland, to our shame, was the last. Not only were we the last, we were badly last. In terms of per capita investment we were only 50 per cent of what Belgium, the second last in the league, was. Therefore, when setting up commercially viable things, particularly something like this which is not going to run into profitability for a number of years, we should certainly consider research and development in order to make sure that we can extract from our natural resources all that we can, whether it be through tourism, the development of by-products of wood or whatever.

That is one particular area. Taking that a bit further, I want to develop the question of natural woodland, the natural environment, the natural habitat for animals etc. I want to refer to that wonderful report by the Union of Professional and Technical Civil Servants, Our Natural Heritage, which we discussed at some length recently. I want to quote from it. It was discussed fairly well in detail by other Senators here today. Obviously, on the question of where you plant trees — I would certainly hope that we do not need to be talking in this Chamber about the most productive use of land — they hardly plant trees in any place where they would tend not to grow. This report points out: “Drumlin soils with forest yield potential five times those of Scandanavian countries could be planted with trees.” At present we continue to plant trees on low yielding blanket bogs. This is one of the reasons I mentioned earlier that there is a very good case for allowing the new board actually to sell land. If they have wood growing on low yielding blanket bogs when they should perhaps be buying into high, at least potentially high, yield drumlin soils, then that is where we should have them. If we then have a situation where we have the soil that will grow five times the amount of wood and if we have the best climate in Europe for the development of a wood industry that surely puts us in a very strong position, a very strong competitive position in terms of yield and return. I certainly agree for that reason that the question of the acquisition and the sale of land is something that we should be quite flexible on. It hurts me to have to say that I would in any sense agree with the selling off of any part of our natural resources, but I think that this is a perfect example of where hard commercial decisions must be made on behalf of the common good so that the State can take its resources and see a profit on them for the use of the ordinary people.

In terms of forestry development, in the same report there is a reference — I think it has been fairly well travelled during the day — to the fact that less than 5 per cent of our land is forested and it is the lowest proportion in the EC. I think we are all well aware of that at this stage. I heard talk today about 1 per cent and 5 per cent and all the rest of it. The general principle is that we do not have enough. Where I come from, west Kerry, growing up we hardly saw a tree. The programme of afforestation has now meant growth in that area of growth, if you will excuse the pun. The only thing that worries me about this whole question of development of wood is that we are losing out on our own natural woodland. If you asked me where do you see the natural forests, maybe you might see them in Glenveigh or in Killarney or some place like that where they have been allowed to develop over a period of years. I wonder could you tell me what we are doing in terms of planting oak, for instance. Do we plant deciduous trees? Where are we going in that area in terms of the balance? I would like to hear that in the Minister's response. I think it is important to know that that will continue. I am sorry that my colleague, Senator Éamon de Buitléar, is not here because I would have looked forward to his contribution on the question of natural habitat. I am quoting here from the report: "The fact is that established forests, geared primarily to commercial objectives, can be valuable wildlife habitats if sensitively managed." That is a sure case for the board having access to expect advice in that particular area. There is not that much of it around.

In the management of trees for profit we are also concerned about the protection and the cultivation of the habitat and the environment in which we plant and put those trees. "As the forest area increases, the contribution and the conservation should grow unless excessive commercial demands are imposed". That is where we need to put the brakes on. I am quoting again from the report: "By drawing on the best forest management practices from other countries high productivity can be achieved in Irish forests without sacrificing wildlife values, at least on lands well suited to afforestation in the first place." That means we can get the balance right, and we need to get the balance right, between conservation and commerciality. People are now fairly well aware of the difficulty created by felling natural woodland and replacing it with conifer plantations. That does not happen lightly any more. That is something they will have to look at and look at very closely. We lack a general policy in that whole area. I would ask the Minister to respond on that general area as well, that is, the area of the natural environment and the natural habitat. I am grateful to the contribution of the Union of Professional and Technical Civil Servants for their report, which broadens the debate on this area.

One thing which is not referred to — its omission does not weaken the Bill in any way — is the question of biomass. To go back to the "quick buck" merchants who might get involved in this area, is there a danger that the growth of saplings and the cutting of saplings purely for biomass use, for energy use, for burning to produce electricity or heat or whatever, could lead to a denuding of the forest lands? Is there a way that we can guard against that? I know there is a certain amount of culling that has to take place while a forest is growing. Most of that is done around Christmas time for Christmas trees, where they knock off the tops which is commercially viable. Where it has to be thinned out a lot of it is sold for household wood. On one or two occasions I bought from some of the forests quite young trees that had to be felled in order to create light and space for other trees to develop. That is the natural scheme of things.

I am talking about the total culling and denuding of forest or woodland areas just for the use of burning. As far as I know, there is a successfully operating power station in south Kerry which is based on this biomass principle. I know the ESB were doing a lot of research into it and I know that certain European countries, particularly the Scandinavian countries, were looking at the commercial viability of energy from biomass. I want to get a response on that particular area.

Senator Norris today quoted the verse from the poem Cill Chais: "Cad a dhéanfaimid feasta gan adhmad?" Despite the fact that the poets were aware of it a couple of hundred years ago, nothing was done about it until a very short time ago. I hope there is no danger that we could all be singing a song here that the setting up of this biomass would not lead to somebody just cutting away what we had put together and carefully fostered over the last number of years. One of the people we most hated coming into this country, Cromwell, left the worst reputation, but he planted this country with ash trees right along the roadside. The fact that he wanted them because they were the proper shape for the stocks of guns, is neither here nor there, because he was not around to cut them. Later, the GAA, found them very useful for the making of camáns, particularly the run of the grain from those growing out of the sides of ditches. The planters, when they built their big houses and their avenues, imported the sycamore tree from Canada and used them to line their driveways. Much of the development of trees over the ages did not come from us at all.

As a race we have a very poor record in the whole area of forestry. I see it happening to this day. I know a place close to where I live where a landowner cuts a tree every winter. I have lived there for 17 years now. That is 17 trees gone — fine, clean, strong, fully matured, 50 or 60 year old beech trees — and not being replaced. Is that illegal? I thought farmers were expected to replace trees. There should be some sort of policing built into this Bill. Some parts of it, I said, increased the penalties for the cutting of land, but I do not think it actually addresses that particular point of the tree being cut. In fairness to them, farmers have a very pragmatic approach to land: it is what they can get out of it rather than what they can put into it. That sounds almost racist in its generality. There has always been this habit of cutting rather than planting.

A disposition not peculiar to farmers.

Yes. I hope that goes on the record.

I want to deal now with the question of the Programme for National Recovery as negotiated with the trade union movement last year and where that ties into this particular document. The Irish Congress of Trade Unions produced a fine policy document on forestry and the development of forestry about three years ago. I know it was discussed at length with the appropriate Departments. It certainly was a landmark in the sense of raising the awareness of ordinary workers to the value of our forests and to the value of developing our forests. I am glad it has developed along the way.

Similarly, in the Programme for National Recovery the trade union movement insisted that forestry would be one of the areas of development for new jobs programmes and so on. The main elements of that particular programme included — I know you referred to these in your own speech this morning, Minister — the appointment of a Minister of State with specific responsibility for forestry. You are welcome here, Minister, because the trade union movement has generally welcomed that this is now a specific area of responsibility.

Another element was the setting up of a State-sponsored company to operate State-owned forestry on a commercial basis and that that company should be launched early in the new year. This was written last October. I am glad to see the Government meeting their commitments on these two areas as well. It is important to put that on the record. This Government lack credibility. We do not believe the Government. I am not apportioning blame when I make that statement. That is purely a statement of fact. As somebody who has been negotiating with them for the last couple of months and then trying to tell members of my own union what the Government said is not a good way to win an argument. Therefore, it is important that we should put the little pluses into it as well. It is good that these two things have been done.

The third thing I found very interesting in the Programme for National Recovery was that farmers will be encouraged to avail fully of the available incentives to expand into forestry. To expand into forestry came after a parenthesis. I almost stopped before I came to it. I said nobody needed to encourage farmers to avail fully of the available incentives. It is good to see them moving into forestry.

The targets were important. I remember discussing these last October and addressing them at a public meeting. It took a fair bit of courage at that stage, from both sides of the table, to write down stated and numerical targets, that for 1987 there should be 11,000 hectares and in 1988 13,000 hectares. The Irish Congress of Trade Unions must certainly take a bow here. I have to say that because everybody else will stand up and thank the Government and thank the forestry people. I think it was the partnership that has produced the targets.

The praise which many Senators gave today to the forestry workers is certainly well deserved. I wish the media would take on board the success stories of the semi-State companies. The target has not only been reached but has been surpassed. We look forward in 1988 to 14,000 hectares being planted.

The other thing I referred to at the beginning of my speech is the major drive to increase substantially the level of EC funding for forestry.

Since it is now 8 o'clock I must ask Senator O'Toole to move the adjournment of the debate.

I did not realise we had reached that stage of the debate. We are adjourning the debate until another date. We are still on Second Stage.

Acting Chairman

We will resume on it when Item No. 3 has been dealt with.

Have we a time for that debate?

Acting Chairman

In accordance with the Order of Business which was agreed this morning, I must call Item No. 3 at 8 o'clock.

At the conclusion of Item No. 3 we will be going back to Item No. 4 to continue until 10 p.m. Is this correct?

Acting Chairman

That is as I understand it.

Debate adjourned.