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Seanad Éireann debate -
Wednesday, 6 Jun 1990

Vol. 125 No. 6

Turf Development Bill, 1988: Second Stage (Resumed).

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

I want to welcome this Bill and I am delighted to be able to make a contribution on it here today. We all know that Bord na Móna has a yearly turnover of over £120 million and employs close to 4,000 people. While in 1988 it had an operating profit of £15 million, it had increased payments of £17.7 million. The board's difficulty is that it is saddled with huge long-term borrowing of £174 million and does not have share capital. Until this issue is solved Bord na Móna can never attain its true potential. This is the underlying problem the board has to face. The future of this debt must be addressed. It has to be either converted into share capital or written off by the Government. Unless this is done the board will stumble on from year to year unable to address its future developments in a commercial way.

The board faces difficult years ahead, as it is in urgent need of major funds to capitalise on the development of new products which have passed the research and development stage and are now on the commercial market. The first of these is the Puraflow septic tank effluent treatment system using peat fibres and the second is the Biofar odour removal system, again using peat fibre. Already the latter has been installed by 15 major companies in Ireland. It has other products still in the research and development stage but it is unable to develop the potential of these because of the lack of finance.

The Minister for Science and Technology announced the boards new peat research centre at Newbridge and that £2 million would be given over a three-year period to further the board's research. This, in itself, shows the depth of the Department of Industry and Commerce's confidence in the future of the peat industry. The board's scientists have had a major breakthrough in producing a wide variety of activated carbon grades made from peat. They are at present looking for a partner to bring these products onto the market place. However, it seems that even if they do succeed they may be forced to take minor shareholding in the new company because of lack of funds.

As peat is one of our natural resources, it does not take much imagination to see that the board's products are 100 per cent Irish. This compares with a 20 per cent Irish input into the electronics industry and other multinational companies' products manufactured in Ireland. Apart from the board's debts, the other issue that must be addressed is the future of the board's cutaway peatlands. These can be a major source of income if the board is allowed to obtain full market for these lands as they become available over the next 40 years. Bord na Móna have acquired 220,000 acres of peatlands for peat extraction, 200,000 of these being the raised bog type, all situated in the midlands. Of these only 2,000 to 3,000 acres are still virgin bog; the rest are at various stages of cutting. The remaining 22,000 acres is made up as follows: 20,000 acres of blanket peatland in Mayo, which is used for ESB generating stations, and 2,000 acres of peatland.

To date the board have sold off, or leased, their cutaway bogs. Because of consecutive Governments' insistence 7,500 acres had to be leased over 60 years to the Forestry Department for the sum of £16 annually. Bord na Móna, in other words, is acting as banker for forestry. Grasslands of 1,200 acres have been sold for £1 million, or £850 per acre. The conversion costs of an acre of cutaway peatland to grassland is between £350 and £450 per acre, leaving an average net profit of £430 for the board. The Minister for Energy has amended the new Bord na Móna Bill so that the board will not be forced to sell or lease all their cutaway bogs for forestry.

The main thrust of the Turf Development Bill is good because it will give a new lease of life to Bord na Móna. We all know that morale in the company has been at a very low ebb and there have been very many redundancies. There was no great sign of expansion and workers were very unsure of the future. Many of the employees wondered if there was any future for Bord na Móna and whether they should get out now.

I welcome this Bill. It is a breath of fresh air, a midland breeze perfumed by the heathers, as the song says. The Bill can only be helpful for the future of Bord na Móna. I do not mean that as a criticism of the old Bord na Móna or their predecessors in the forties, the Turf Development Board. I would like to pay tribute to the pioneers of Bord na Móna who cut the first drains in our bogs and worked hard to make a success of a farsighted enterprise. I had members on both my mother's and father's side of the family who started in Bord na Móna in Coolnagun in 1946 and it is for that very reason I am extremely familiar with the day-to-day running of that type of industry. They filled our fuel needs when we had no other fuels and they brought prosperity to the midlands. They were the people who changed the term "bogman" from meaning Yeti or the Abominable Snowman to a term of endearment which we now associate with the haunting music of the Marino Waltz.

That is all in the past, Senator.

You cannot carry out the future without having a strong tradition. Offaly people were exceptional; they won All-Irelands when they had very little tradition, and I only wish we in Westmeath could do the same. Senator McDonald has a habit of interrupting a good speech. Many of the early Bord na Móna workers have retired, were made redundant or have gone to their eternal reward. I want to pay tribute to them for their toil and effort. They built the railways, mechanised turf production and their engineering expertise designed and produced the type of machine best suited to out terrain. They branched out into the production of turf briquettes and machine won turf, peat moss, horticulture and agriculture and they even undertook pilot schemes despite the restrictions which were placed on them under the old Act. It gives me great pleasure coming from north Westmeath, to highly commend the great contribution that Bord na Móna made, particularly in the Coolnagun area, to the social and economic welfare of the people of north Westmeath. We in north Westmeath from the villages of Coole, Castletown, Finea, Multyfarnham, Rathowen, Street, Boherquill, Ballinacargy, Ballinglach, Ballinafid, Fore, Collinstown, Crooked Wood, Delvin, the town of Castlepollard and the town of——

And do not forget Offaly.

(Interruptions.)

I wish to be allowed to continue. I am looking for the protection of the Chair.

You will get it, Senator.

Thank you. Those parts of north Westmeath are experiencing high emigration because Bord na Móna have closed down their bog in Coolnagun. I am making a plea today to the Minister. The commitment given by the people since 1946 has been 100 per cent. Bord na Móna employed up to 50 per cent of the people in those little towns or villages in north Westmeath. If you take the village of Tyrellspass, where they employed 80 per cent of the workforce, you can see how devastated we are in Westmeath since the closure of the bog in that part of the country. We have 3,000 to 4,000 acres of virgin bog untouched in Melcana and I do not know why, with all their research and expertise, something cannot be done to create jobs in that part of Westmeath. I remember as a very young boy seeing 50 or 60 lorries, tractors and trailers passing my door from 5.30 a.m. and queuing in Coolnagun for the sod turf that was produced there.

Bord na Móna were a tremendous employer but we must remember the dedicated workforce who often worked two shifts for 14 or 16 hours a day and continued to keep that bog and that part of the country going down through the years. I want to pay tribute to those people who have gone before us, who went out in all kinds of weather and often stood to their waist in water cutting the drains in those early days. In north Westmeath we have very high emigration and the board have an obligation to the people of the area. They cannot just close a bog down and walk away, especially when there is so much land there ideally suited for peat moss production. There are almost 4,000 acres and I would ask the Minister to come down and inspect this fantastic resource. In one parish in the Castletown-Finea end there was 22 per cent emigration in two and a half years. It gives me no pleasure to stand up here today to make a plea on behalf of the people of that parish, in which I myself live.

I welcome the Bill. I look forward to making another contribution on Committee Stage and on behalf of the people of north Westmeath I sincerely hope there is something in it to create jobs in that part of Ireland.

I have a few more remarks to make regarding——

In the circumstances, Senator, I cannot allow you because you were in possession when we concluded on the last occasion. If you had been present you could have continued but you cannot speak twice. That is the position.

I appreciate the position but I sat through most of the Minister's and other speakers' contributions on the previous item. I understand that the Minister, Deputy Molloy, would be coming in. I was outside the Chamber awaiting the Minister——

The fact is that you cannot speak twice and in the circumstances I have to move on to Senator Mullooly.

I was not asking to speak twice. I was asking to conclude the remarks that I had been making.

I am sorry, Senator. You can interpret it any way you like but you cannot address Second Stage twice.

I bow to the ruling of the Chair but I think it is most unfair to be treated in this way.

I am bound by the Standing Orders which you have subscribed to.

I welcome the opportunity to make a contribution to the debate on this Bill. During the course of this debate many tributes have been paid to Bord na Móna but a certain amount of criticism has also been levelled at the company. I believe that much of this criticism is justified but I also believe that the board should be given credit where credit is due. For that reason I would like to be associated with the tributes paid to Bord na Móna for the contribution the company has made to the economic and social development of the country, especially in the midlands region, since it was set up in 1946.

Those of us who come from the midlands region have seen this contribution at first hand. When Bord na Móna were set up, their functions were restricted essentially to the extraction and sale of turf. In the early days, this was very labour intensive work which provided mainly seasonal employment but it provided employment for great numbers of workers because much of the work in those days had to be done by hand and on a piece-work basis. It was not unusual to see whole families employed in the bogs saving the turf. All this changed as machinery was developed to do this work.

Over the years since their establishment, the board embarked on a number of development programmes but in the main these programmes were aimed at expanding the main revenue generating activities of the board, namely, the production and sale of mill peat, sod peat, peat briquettes and moss peat. During the seventies, as a result of the various fuel crises and the rapidly escalating costs of imported energy, there was a major expansion in mill peat production for electricity generation and for industrial and commercial use. Bord na Móna were now a major industry directly employing over 6,000 people throughout the year as well as generating a considerable amount of spin-off employment in areas such as engineering, construction and allied industries.

The consequent effect of this employment on the economy in the catchment areas of the boards enterprises was substantial. Many of these areas did not have the potential for attracting other types of industry or providing alternative employment. In these areas the farms were mainly small and the land for the most part was marginal but, because of the cashflow generated by Bord na Móna pay packets, population levels in these areas were maintained. The off-farm income provided by Bord na Móna kept the people in these rural areas. The small towns and villages prospered. Schools remained viable. Emigration was the exception rather than the rule.

Bord na Móna underpinned the social and economic structure of these communities so it is fitting, therefore, that tributes should be paid to the board for the way in which they fulfilled their social obligations and for the enormous contribution which they made to the economy of the regions in which their operations were based. That contribution has continued over the past 40 years. Unfortunately, however, from the seventies onwards there was a serious and steady deterioration in the financial situation of Bord na Móna.

I know the Minister said in his speech that because the issue of the board's financial position is being comprehensively reviewed at present it was not his intention to comment on the matter during the course of this debate. In view of that statement by the Minister I will not dwell on the matter in any great detail but there are a few comments which should be made because it is sometimes implied that all the board's financial difficulties were the result of incompetence, inefficiency or bad management on the part of the board and that no-one else was in any way responsible for the difficult financial situation in which the board now find themselves.

It should be pointed out that the largescale development operations which the board became involved in required considerable expenditure. These development operations were undertaken at the request of successive Governments and in response to the public demand for greater use of indigenous energy resources.

During the development stage of a bog there is little or no financial return and between land acquisition, drainage and other development work many years can elapse between the time a Bord na Móna scheme is initiated and the stage at which the bog begins to yield revenue. The board had to meet expenditure on their development programmes and related capital charges mainly from borrowing. High interest rates added to the difficulties as did the Government price controls to which the board's products were subject. In addition, the difficulties were exacerbated by a succession of some very bad years from a weather point of view. The point I am endeavouring to make is that it should be accepted that the present financial situation in which Bord na Móna now find themselves was brought about by a combination of factors some of which the board had very little control over. Of course, I accept their marketing strategies also left a lot to be desired. I do hope, however, that the review to which the Minister referred will result in steps being taken to ensure that these financial difficulties can be dealt with in such a way that they will not inhibit the board's capacity to exploit the new opportunities which this Bill will open up. These opportunities will be many and varied. The board will be permitted to promote, form, take part in or acquire companies either within the State or abroad and to enter into joint ventures.

The Bill enables the board to undertake engineering and building works and other activities not strictly related to peat and also to engage in the provision of consultancy, advisory and training services. The Bill will ensure also that the board will have a major role to play in the development of cutaway bogs. New opportunities will be opened up at home and abroad for the board as a result of this legislation and this is to be welcomed. The board will be judged in the future on the degree of success achieved in exploiting these new business opportunities.

In order to enable the board to speed up the decision-making process within the company and also to enable a more thorough examination of specific areas of their activities to be undertaken, the Bill provides for the establishment of sub-boards and the delegation to these sub-boards of certain functions of the main board. This provision is also to be welcomed and is in line with the procedures which operate in most successful businesses.

During the course of his speech, the Minister referred to the initiatives which have been taken in recent times by Bord na Móna to reduce costs. These measures included the introduction of a voluntary redundancy scheme and the phasing in of a contract or piece work system as an alternative to the direct labour system which was the norm in Bord na Móna in the past. Some of these changes and developments were not what many of the workers would have wished but I believe it is a tribute to the dedication and the realism of the workers that these changes were accepted as being necessary to ensure the future of Bord na Móna.

During earlier contributions a number of Senators, particularly Senators Hussey and Finneran, referred to the briquette factory which was proposed for Ballyforan some years ago and to the group of bogs in that area of south Roscommon and east Galway. I would also like to refer to the situation that developed there. There is approximately 10,000 acres of bogland in that area and up to the early eighties most of that bogland was in the ownership of hundreds of small farmers in the south Roscommon and Galway area. These bogs were acquired by Bord na Móna, and indeed in most cases the owners of the bogs sold them to Bord na Móna at very nominal prices on the understanding that the bog was required for the development of a briquette factory at Ballyforan. We were all told that between the bog and the factory there would be between 400 and 500 workers employed there for the next 40 years. A clear commitment was given to the development of the Derryfada group of bogs as they are known and to the establishment of that briquette factory.

Senator Finneran went into great detail in relation to what transpired subsequently but, in any event, having spent between £5 million and £5.5 million on the development of these bogs a decision was taken not to proceed with the setting up of the briquette factory. It is very understandable that there was great disappointment in that area at the decision. I have a letter which I received from the then Minister for Energy in 1988 assuring me that the board would review the Ballyforan briquette factory position each time the question of increasing capacity arose and he also stated in the letter that the board were carrying out research and development work in peat fibre extraction and activated carbon manufacture from peat and if a commercial venture arose from this work they would consider the suitability of Ballyforan.

I join with Senators Hussey and Finneran in appealing to the Minister to request Bord na Móna to bring forward proposals as a matter of urgency for the development of these bogs so that at least some of the employment which was promised to that area will materialise. I hope that the opportunity provided by this legislation to Bord na Móna to diversify and develop new products and to seek new markets will ensure that the pattern of diminishing employment which we have seen in recent times will be reversed and that once again Bord na Móna will provide an increasing number of jobs in rural Ireland. In the belief and in the hope that this will happen, I welcome the Bill.

I intend to make brief comments on this Bill. I am pleased the Minister of State at the Department of Tourism and Transport is in the House representing the Minister for Energy mainly because the two areas I have an interest in and would like to comment on are the tourism aspect of the decision that will be taken allowing Bord na Móna to set up separate companies and take equity in other companies. The Minister of State in replying to Second Stage might expand a litle on that aspect of the legislation which will allow Bord na Móna to dispose of cutaway bogs.

In the speech the Minister for Energy made to the House he referred to the future use of cutaway bogs — these are bogs which have been substantially cleared of turf — and quite correctly stated that it is of great importance to Bord na Móna because some 2,500 acres of cutaway bog will become available for the board's operations each year over the next decade. It is not just of importance to Bord na Móna; it is of national importance. Obviously any proposals that will increase our tourist potential must be welcomed and although the Minister does not go any further in his speech, he indicates his thinking about cutaway bogs by saying he recently established an independent expert committee to examine in depth the potential use or uses of cutaway bog and to recommend measures to ensure that the land is put to the best possible use. The particular terms of reference require that the committee examine the competing demands of forestry and agriculture/horticulture and amenity uses of the cutaway bogs. It is in that context I would be interested in the Minister's thoughts on the matter both in the context of his reply for Energy and wearing his other hat as Minister of State at the Department of Tourism and Transport.

I come from a part of the country which has not, sad to say, had a tradition of Bord na Móna employment although we are surrounded by it in several counties. My colleague, Senator Mullooly, referred in great detail to the tradition that Bord na Móna built up in my neighbouring County of Roscommon and Longford has also had a high Bord na Móna input from an industrial employment point of view. It does, however, give me an opportunity to ask the rhetorical question: what benefits will accrue from this legislation to those areas of the country where Bord na Móna have traditionally provided employment?

The Electricity Supply Board have a tradition of creating employment in County Leitrim and North Roscommon but, sad to say, as we speak in this House decisions are being taken in Fitzwilliam Square which will impact very severely on the economy of that whole region. Having said that, no proposals of any substance have emerged from the Electricity Supply Board in relation to jobs and the legacy they should leave when they close down their coal-burning station at Lough Allen. It is the parallel question I ask; once given the powers in this Bill, will Bord na Móna decide to pull out of areas of the country where they have traditionally given employment and become involved in non-energy operations? The Electricity Supply Board are involved in consultancy operations and with computer companies yet, according to their annual report, they have not been seen to have provided employment in those areas where they traditionally provided it. Perhaps it is a little premature to ask why because it is only over the next decade that the ESB and Bord an Móna will be rationalising their activities but rationalisation, sadly, inevitably means closure and loss of jobs.

The Senator will still have asbestos.

We have very clean air in County Leitrim and we would like to keep it that way. I approach the proposals in this legislation with a certain degree of caution. It is all very well to put in place legislation which, in theory, sounds good and reads good. For example, the Bill will allow Bord na Móna to engage in joint ventures in relation to business as extended and defined in the Bill both in the State and abroad. Yet, the experience of the ESB to date has shown that while they are engaging in joint ventures, the one non-energy activity that they are involved in which is fish farming on the west coast and Poulnaphouca——

An Leas-Chathaoirleach

I would remind the Senator not to stray off the bog road.

I appreciate the Leas-Cathaoirleach's comments. I hope the Minister will understand that the only experience this House has of legislation of this sort is that which was implemented allowing the ESB to do precisely what it is proposed to allow Bord na Móna to do. I am suggesting that while perhaps the legislation in theory may be welcome, the reality is different; in other words, actions speak louder than words.

I suggest that when Bord na Móna are given these powers they involve themselves in the local communities. The closure of some bogs and the subsequent loss of jobs will make the situation more acute, as has been pointed out by several of my colleagues on all sides of the House, particularly in the midlands and the lower midlands area where Bord na Móna have traditionally provided employment. The experience to date of other semi-State bodies does not inspire a great deal of confidence in Bord na Móna once they are given this power creating the type of long-term viable alternative industries that will be needed to stabilise the communities, particularly rural communities where there has not been a tradition of industrial development or where perhaps infrastructure is poor. It is in that context and spirit that I refer to the obligation on semi-State bodies such as Bord na Móna and the ESB to provide alternative long-term employment.

Overall, this is unique legislation. It is allowing yet another semi-State body to involve itself in the marketplace with the minimum of restriction. One can only welcome this initiative from the Government and hope that Bord na Móna, as they have in the past with the exception of recent years when they experienced some financial trading difficulties, will rise to the occasion and that the provisions in the Bill will enable them to provide the type of employment this country needs to keep its sons and daughters at home.

Cuirim fáilte roimh an mBille agus roimh an Aire Stáit anseo. Bhí caint an lá faoi dheireadh faoi ainm an Bhille seo, ar cheart "Turf Development" nó "Peat Development" a thabhairt air. Maidir liomsa níl fadhb ar bith ann, Bille Forbartha na Móna atá ann domsa agus níl ach an t-aon fhocal amháin sa Ghaeilge ar an bhfocal sin. Is dóigh liom go bhfuil an-tábhacht leis an mBille agus leis an díospóireacht seo, go mór mhór do na ceantair lár tíre. Ó cuireadh Bord na Móna ar bun tá go leor fostaíochta cruthaithe aige, agus tá go leor den phobal i lár na tíre ag brath ar an bhfostaíocht sin chun iad féin a choinneáil beo.

Is dóigh faoi cheann fiche bliain go mbeidh deireadh ag teacht le ré na bportach, mar atá eolas againn orthu, i lár na tíre agus beidh orainn féachaint chuige nach gcuirfidh sé sin deireadh leis na daoine atá sna ceantair sin.

I would like to welcome this Bill, in particular the opportunity to discuss the implications of the Bill and the changes that are taking place due to the limited nature of our bogs. The first aspect we have to look at is the effect on people. We have to look on the communities whose economies over the last 30 or 40 years have revolved around the midland bogs particularly, and who now look to us to provide in the future alternatives that will allow those communities to continue to flourish and develop.

Secondly, although we are told all the time that energy prices are stable and are likely to remain so, we must keep in mind, that it is only over 20 years ago when we also thought that was so. Therefore, the idea of maintaining as long as possible an indigenous alternative energy resource in active use is very important from a national point of view. The role that Bord na Móna play in providing us with indigenous energy should not be underestimated. It should be maintained as the core business of the board in the foreseeable future.

When we come to examine Bord na Móna it is important to look at the whole question of the vibrancy of State companies. Every time I travel through the midlands, particularly through the bog areas, it gives me a sense of pride to see those cooling towers and buildings. They are a tribute to the vision and the belief the people who founded Bord na Móna had in the possibility of using indigenous resources and of creating employment in areas which had not, up to that, had industrial development. It also belies the belief that people in rural areas can neither handle technology nor industry because in a very hostile environment Bord na Móna created an industry that gave employment and also an innovation that stood as a model.

However, we have to question what went wrong with some of our flagship State companies in the past 20 or 30 years, what went wrong that the spirit of enterprise and development they exhibited in their early years might not have been exhibited in such form later on. To remain viable in the modern world one has to go forward. One of the dangers I see is that after a while when something is successful a certain complacency builds up and the old ways become permanent even though the world around is changing. Therefore, it is very important when we are discussing this Bill to consider, in a totally new way, what forms and structures most suit the requirements of the 1990s and of the next century.

There is provision in the Bill to widen the remit of Bord na Móna. I have always believed that company articles of association and, similarly, the powers of a company or a State board like Bord na Móna should in their essence be as wide as possible to allow flexibility in approach. I have always believed it is unsuitable for a board of any company to be hamstrung by very limited terms of reference.

There is mention in the Bill regarding the setting up of sub-boards. I will go further and say that totally new structures should be considered in the case of Bord na Móna, that in the changed world with improved education and communications perhaps certain parts of that company, certain geographic areas within the remit of Bord na Móna, should be given more autonomy in the running of their own part of the business. I have seen from my own experience an infinite number of possibilities; for example, the idea that you would have separate production units in the different areas in the different bogs with common marketing facilities is something worth considering. We should never accept because something is there it always has to remain as it is.

Reference has been made to the financial difficulties of Bord na Móna. I accept that they are great. When we look at State companies we have to clear our minds as to how this arose; particularly we have to compare like with like. If Bord na Móna were an ordinary private company investing in the type of development they did they would have been eligible for considerable grants from the grant-aiding authorities but because they were a State board obviously this was not so. Furthermore, due to circumstances at the time, in lieu of the grants that would have been given to private enterprise the share capital was not provided. Instead, most of their cash requirement and capital requirement was funded out of borrowing and this put them at an unfair disadvantage. When the financial performance of the board at present or in the past is being considered, the fact that Bord na Móna's capital development was either funded from own resources or from borrowing primarily has to be taken into account and also the continuing employment they have given.

On that issue of organisational administration, I have always felt it is a great pity that the headquarters of Bord na Móna, something that is based in rural Ireland, are situated in this city. If ever there was a case for decentralisation it is there in this case. I see no good reason why the headquarters of an organisation would not be basically situated in the main area of activity of that organisation.

The bogs and the cutaway bogs, if we use our imagination will become an asset we could develop to maintain the employment and development of those areas now dependent on turf production. I am not convinced that all this development should take place necessarily under the aegis of one centralised State board. Our experience has been that, when a board like this get too many components it is very hard to maintain centralised and efficient control. Therefore, irrespective of what form the various agencies, boards, companies or whatever take, it should be remembered that the development of cutaway bogs is done by people and agencies who specialise in the various uses to which cutaway bogs could be put. The other contributors to this debate have dealt with the possible uses that could be made of cutaway bogs in some detail. I do not intend to cover this aspect here except to say that our aim must be at all times to maintain the energy, development and the communities that have been based on the work of Bord na Móna and which, as the bogs become exhausted, will have to be based on new developments in these areas.

On an issue that is not central to this Bill but is related to the whole question of bog development, the bog development grants of a few years ago which enable people in rural areas to build roads and access to small bogs should be reinstated. In many parts of the country there is a considerable extent of bog, which is not the type of commercial bog that would be of interest to Bord na Móna. Nevertheless these bogs have provided fuel and income to small farmers over a long period and will, if used wisely, continue to do so in the future. The opening up for limited use of these bogs should be encouraged. I have no doubt that this can be done in a way that is also in keeping with the best environmental uses that could be made of them.

Senator Norris referred to the environment, particularly to the possible conflict between development in the case of Clifden and the preservation of peatland for conservation reasons. This is a live issue for the people of Connemara. I would like to put it on the record of the House that the ordinary people of that area are as concerned as anybody to preserve the environment, to use it to its best effect and also to use it as a tourist resort. However, there will always be a conflict between legitimate development and conservation. We are striving to strike the right balance. There is common consensus in Connemara for banning the use of the so-called sausage machine in small bogs because of the environmental damage it causes and because of the damage it does to bogs in rural areas. The question remains as to whether we will go so far along the road of the protection of the environment that we will stop all development and in this way we will probably damage the most unique part of our environment in that part of the country, that is, we will damage the livelihoods of people and at the end of the day we will find we will have preservation orders to preserve the people of that part of the country from extinction. These are the real problems I face every day on the ground when dealing with these matters.

On certain issues the people are unanimous in favour of the environment. On other issues they are in favour of limited development where they see that the advantages of development outweigh any minimal damage that might be caused to the environment in these areas. When we talk about protection of the environment, alternative uses in tourism and so on, it is incumbent on the people, who promote these ideas to ensure that the developments they talk about so blithely are actually carried out and that the alternative employment that will have to be provided is provided and does not just remain a matter of rhetoric and a good arguing point for a debating chamber. When we are discussing these issues we are discussing the livelihood of ordinary people.

To cut with a sleán the bog they own or have access to is for many people a very important part of their life. This is not only so for older people but many young people with good jobs would feel very aggrieved if their right to cut a turf bank in their own area, which is worth quite a bit of money to them, was denied to them. The possible environmental damage caused by such work is so minimal as to be negligible and the traditional rights of people who have been carrying out this practice and which does not cause any appreciable damage to the environmental, will have to be protected.

Mar a dúirt mé ag an tús, ba mhaith liom fáilte mhór a chur roimh an mBille seo, ní amháin faoin méid atá ann ach faoin deis a thugann sé anois tabhairt faoi athnuachan iomlán a dhéanamh ar Bhord na Móna agus ar na ceantair sin atá ag brath ar an mbord sin le 40 nó 50 de bhlianta. Tugann sé deis dúinn anois tabhairt faoi na hacmhainní nádúrtha atá sna ceantair seo a fhorbairt ar bhealach nua, ar bhealach atá feiliúnach do na nóchaidí agus don chéad seo chugainn agus a chinnteoidh go mairfidh na pobail sna ceantair sin amach anseo.

I would like to compliment Senator Ó Cuív on what I regard as a comprehensive and thoughtful contribution. I agree with most of what he said particularly in regard to Bord na Móna, the lack of capital investment in terms of equity from the State as distinct from borrowing from the banks which has turned the whole operation into a sort of millstone around Bord na Móna's neck and made it very difficult for them to make progress in present circumstances.

In relation to the decentralisation of the headquarters, it is most appropriate for the headquarters of a rural-based organisation like Bord na Móna to be located in the country, particularly in the midlands where most of their activities take place. It certainly is an anomalous situation that such a headquarters be based in Dublin.

In relation to bog development grants, coming from a small rural area in County Sligo, I spent many a day on the bog. I appreciate what could be done in relation to roads and access to small bogs to enable the ordinary small farmer to have ready access to an indigenous fuel supply.

The environment certainly has had a low priority in all of this debate and there is no provision made in relation to that in the Bill. It is becoming increasingly a major issue in relation to the destruction of our natural habitat in all areas of the countryside. I give a very guarded response to this Bill. It is like the old curate's egg, it looks good in some parts and looks bad in other parts. I fear there may very well be hidden in the Bill provision for the break-up of Bord na Móna and, indeed, provision for what I would describe as creeping privatisation in that sector.

The purpose of the Bill, as stated in the explanatory memorandum is to update and amend the Turf Development Acts 1946 to 1983, to allow the board to promote, form, take part in or acquire companies — which sounds very acceptable — to delegate some of the functions of the board to sub-boards, which, on the surface, looks very desirable, and to engage in activities not strictly related to peat. It is very desirable that there is diversification in the operations of Bord na Móna.

When I look back on the establishment of Bord na Móna in 1946 and look at the context in which so much semi-State industry was established in the first half of this century, I see the type of rationale, thinking and principles that were brought to bear on it — Bord na Móna were very much a central part of that thinking — that the State would get involved in the development of indigenous industry and that it would seek to provide necessary capital because there was very little private capital around. This was a very desirable approach to industrial development and to the use of natural resources. We were quite right in the early days of this State to have that approach. It was a combined approach; economic development on the one hand and social concern on the other. There were major problems of unemployment throughout the country, major problems of emigration and Bord na Móna, like so many other semi-State industries, were established for that dual purpose, to provide employment but also to ensure that the worst aspects of the poverty in the country would be alleviated and some steps taken to prevent emigration. Those were very desirable objectives of the founding fathers of the State even though it was not until 1946 that the board were established under the Act.

Bord na Móna have been a success for very many years. Despite the criticism that has come in recent times from the private sector about all the lame ducks in the public sector, it was imaginative. I listened to Brendan O'Regan talking about the development of Shannon and the amount of imagination and vision that went into that by Irish business people, initiatives that had not been developed elsewhere. The same thing took place in many ways in the early days in Bord na Móna. Bord na Móna were to the fore in the development and manufacture of machinery and equipment that was sold worldwide. Bord na Móna were concerned with research and development, which is very much lacking in the private sector at present. We have the worst research and development record of any country in the EC in the private sector. Bord na Móna were to the fore in that area and were to the fore in their products. It was not simply turf that was produced: Bord na Móna produced briquettes, milled peat, peat moss, peat fibre, all the horticultural products that have been sold internationally as well as at home.

One of the most serious developments which took place was in the seventies when we had the oil crisis and, in a panic situation, a decision was taken at that time to try to get Bord na Móna to expand their activity, their production, and in the process vast borrowings resulted. From that point, Bord na Móna became a large debtor to the private banking institutions. The result is that we have huge annual losses and interest of £20 million per annum due to the banks. We have this major problem where not having State equity the board went into the area of private borrowing and, thereby, incurred the type of debts that have taken place since. That was fuelled by some very bad harvests because of bad weather, with the result that there were a lot of redundancies and the workforce has been halved throughout the eighties. While productivity and efficiency have improved, nevertheless the workforce has declined either through voluntary redundancy or simply being shed over the years.

The Government thought that by having a massive development of peat as an alternative source of energy, progress would be made in that area. However, the end result was counter-productive. Now with prices falling the State have moved into a different arena of energy. The ESB, for example, are now concentrating entirely in Moneypoint with indigenous resources of coal in Arigna and peat in the midlands being put at risk. The State shifts from one priority to another without sufficient concern for the implications of what they are doing. In the eighties, four peat works were closed down in Donegal, Galway, Westmeath and Offaly and Arigna is about to close in July. I have no doubt that Ferbane will be threatened next from what I regard as shortsighted energy policies.

This Bill certainly looks like a desirable development Bill on the surface. However, I have a number of questions in relation to what the actual implications of some of the sections are and whether the implications are compatible with the principles and objectives of the Principal Act of 1946. For example, section 2 enables the board to participate in companies and provides for consultations with other Ministers before such participation. What is covered here is the promotion, formation and taking part in or acquisition of other companies. Does that mean, effectively, that Bord na Móna will degenerate into a series of segmented fragments and become a number of companies as distinct from a coherent unit? Is it a means to weaken the semi-State body by reducing it to a conglomeration of sub-companies thereby giving rise to privatisation on the one hand, and to redundancies on the other? The task force of 1987 recommended that Bord na Móna should be broken up and new companies formed. Is this the purpose behind the section? Will the Bill streamline the activities of Bord na Móna through delegation of authority and functions, or will it simply establish a conglomeration of fragmented elements that will spell the death-knell of Bord na Móna? I would like the Minister to address that point. In other words, is there a hidden agenda behind that section?

Section 3 is a continuation of section 2 in that it makes provision for the establishment of sub-boards. What is the purpose of these sub-boards? Will they be new bureaucratic layers of authority or will they have a function in streamlining the operations of the board? What exactly are their functions? Is the work being allocated to the sub-boards not capable of being done within Bord na Móna itself? Is the structure necessary? What is the role of the Minister in this structure? I fear that both are tied up in terms of new companies and boards and that there will be a hiving-off of the functions and the role of Bord na Móna into fragmented sectors leading to privatisation.

I welcome section 4. That the board may engage outside the State in marketing of turf and turf products, production of turf and its products, fostering the production, acquisition of bogs and other lands and so on, are very desirable developments. That is the type of diversification that can give dynamism to an organisation and to a company. The fact that they are not restricted in terms of their production, marketing, or in any fashion, is a desirable component of the new Bill.

Section 7 is the continuation of section 4 and is welcome in that it makes provision for manufacture of plants, erecting buildings, entering into contracts, operating shops and showrooms, consultancy service, engaging in same, advisory service and the training of personnel. All that is an adjunct to the diversification about which we are talking and a very welcome provision. I note, however, that there is no reference to investment. What investment capital will be provided? Whence will it be forthcoming? As Senator Ó Cuív stated, one of the major problems has been the entire aspect of the capital development, where the investment capital came from and the fact that in recent times it was seen as having been borrowed from private banking institutions, rather than an independent State equity in the development. We will perhaps end up with a profit-making company but they could have more debts than profits. If Bord na Móna are going into new ventures they need all this research and development; the last thing they need is another millstone of a major debt around their neck.

I have some concern in relation to section 9. I note that in recent legislation in relation to CIE and the ESB there were no restrictions in regard to pay and conditions for their staff. Therefore, why, in relation to remuneration of the officers and servants of Bord na Móna, should there be a need for ministerial and Government interference?

My major criticism is in relation to the question of financing the company. How will Bord na Móna make progress if they are under-financed and there is no provision for new structures, developments and ventures on which they are to embark? The existing debt still remains. Will the Government convert the outstanding debts into Government equity rather than continuing with their lending policy? Will there be an injection of new State equity into the company?

The environment is not covered in the Bill; there is no provision for protection of the environment. Great sections of our country are now being taken over either in terms of cutaway bogs or afforestation. This is happening on a large scale at present, not to talk of the developments that are taking place in Clifden in relation to conservation. These matters are not being addressed at present and future legislation dealing with rural development should address aspects of conservation.

Finally, legislation that deals with a company of this nature deals with the livelihood, employment and conditions of the people, and is central to it. Will this Bill improve employment prospects or will it increase redundancies? Those questions are central to the issue. Is the Bill in accordance with the principles of the 1946 legislation which took on board economic and social factors? What is the Minister's vision of the development of Bord na Móna? I believe that there is a hidden agenda in this legislation which may cause the destruction of Bord na Móna as a company and as a unit in their own right and may lead to privatisation, fragmentation and redundancies. I ask the Minister to address those points.

I welcome the Bill to the House. I would like to pay tribute to the great men who set up Bord na Móna over 40 years ago. They were men of vision and at the time the valuable employment that was provided here was much needed and appreciated. The staff who worked in Bord na Móna down through the years worked under very difficult conditions until Bord na Móna modernised their equipment. Those men should be complimented also because the conditions under which they worked were very severe. I am well aware of this because even though some people may think to the contrary, Bord na Móna did not develop only in some areas. In my own county we have a very modern briquette factory in Littleton which is much appreciated by the people who work there. They have an excellent staff and their employment is appreciated by the people in the area. I am somewhat disappointed with their lack of activities in other areas, particularly in connection with the sale, promotion and presentation of briquettes. For example, picture an old age pensioner on a wet evening trying to handle a bale of briquettes. That person might have to take it up to the end of the town or bring it even farther afield. It is a very awkward article to handle. In this modern age Bord na Móna should wake up and provide a more modern way of presenting the simple bale of briquettes, if only to make it more convenient for old people.

Up to recently there was a monopoly in the sale of briquettes and turf. Until very recently turf and briquettes were not distributed. Is it any wonder that people turned away from using turf and briquettes? That is sad when we are trying to create jobs and make the people already employed in these areas secure. I am pleased that that barrier is broken. The presentation of briquettes leaves a lot to be desired and I hope the Minister will look into that.

We hear a great deal about smog. Thank God we do not have it down the country but it is a problem in Dublin and Bord na Móna fell down badly over the last year or two in not promoting the advantages of using briquettes. They failed miserably. They should make a greater effort in the coming winter to encourage people to use briquettes.

This Bill will help to develop and create new opportunities for our younger workforce in the nineties and in the years ahead to develop new products. I have faith in the Minister, he made some welcome changes in the Bill and I wish it every success. However, I again harp back to the antiquated system of the promotion, sale and distribution of briquettes. I would appeal to the Minister to get the people concerned off their backsides and to sell a more attractive product which is easier, particularly for old people, to handle. It is difficult for a very fit person, never mind an old age pensioner, to handle the binding on a bale of briquettes.

A restructuring of the State enterprise sector has been a fundamental part of every programme for economic development in Europe in the last decade. The radically different approaches taken in such countries as the Soviet Union, Britain and France, illustrate the importance of this sector to economic development. In our own case, our State-sponsored companies continue to be of major economic importance and it is immensely encouraging to see the emergence of major success stories in this area.

The Turf Development Bill is part of the restructuring and energising of the State sector which has been both a major point of policy and a major success of this Government and their predecessors. The debate over what is commonly called "privatisation" has obscured a much more important debate on the role of companies which remain in the State sector and of how to structure them so that they are economically successful. Commercial State companies should operate commercially and the Bill addresses this point.

Bord na Móna is a statutory corporation and, as a matter of law, this means that they may do only what is expressly authorised under their statutory provisions. When Bord na Móna sought to restructure and reform themselves as a commercial organisation the Government faced the fact that many of the changes needed to carry out their development proposals were not legally permitted under their founding legislation and subsequent amendments. In particular, the company had no power to engage in any activity not strictly related to turf — even when this was related to its core business — such as engage in joint ventures, set up subsidiary bodies or companies, develop cutaway bogs commercially, engage in building or engineering works not directly related to bog development or carry out consultancy work. I would like to deal briefly with each of these areas.

As legislation stands, it prohibits the company from engaging in any activity not in the strictest terms related to turf or bogs. When, for example, customers demand that the company, like their competitors in the horticultural industry, supply a range of garden products with its moss peat, it is technically illegal for them to do so. Another example is that the company have developed the production of activated carbon to a point near to commercialisation but if at any stage they wish, as part of their product range, to use the same equipment to produce activated carbon from products other than peat, it would be technically illegal for them to do so. Section 3 of this Bill corrects this and allows the company to compete commercially.

The company have developed a number of products and businesses in the environmental control area where joint ventures with other companies were unlikely to be essential to full commercial development. It is also likely that progress in moss peat markets in such countries as the Netherlands and Italy will depend, at least to some extent, on joint ventures, and this necessary power is contained in the Bill.

The structure of the company has been monolithic and out of keeping both with modern technology and contemporary business organisations. I was surprised to hear Senator Costello talking about one of the things he was worried about. He obviously has not been very attentive to what is happening in eastern Europe and the Soviet Union when one of the reasons they are having problems at the moment is because they have huge State and semi-State organisations which are devoid of any kind of modern business practice and where one side does not know whether it is making or losing money. Generally the whole structure there is old and needs to be broken down. I am glad the Bill allows for the break-up of Bord na Móna and that they can specialise in certain areas. They need to restructure into autonomous divisions and business units making each product area responsible and answerable for profitability. In some areas limited liability statute will be appropriate. The necessary powers for restructuring are contained in sections 2 and 3 of the Bill.

I agree with Senator Byrne's remarks in relation to briquettes. Bord na Móna have not been great at developing the briquette market, in Dublin especially. One reason for this is because they are awkward to carry. There is a huge market in Dublin for briquettes, especially with the problem of smog and the willingness of the consumer to use smokeless fuel. This is an area that Bord na Móna should develop.

Over the coming years substantial areas of cutaway bogs will become available as older production bogs become worked out. By the year 2000, approximately 20,000 acres of cutaway bog will have become available for commercial and amenity development as forestry, grassland and lay country. Section 8 (a) of the Bill gives statutory power for these areas to be developed. Recently the Minister for Energy set up a committee to advise him on the use of cutaway bogs in the context of the provision of this Bill and this initiative is to be warmly welcomed.

In section 8 of the Bill the company is given the power to engage in engineering and building works, not necessarily directly related to bog development. The Government's Programme for National Recovery states that the development of a strong indigenous component of the mechanical engineering industry is essential to the development of the manufacturing sector generally because of the industrial support services. The document goes on to refer to a number of State companies, including Bord na Móna, as having particular expertise and specialist knowledge in this sector. The Programme for National Recovery also sets a target for achieving a threefold expansion in turnover in consultancy work by State bodies over five years. The company have frequently been asked to quote for overseas bog development projects on a consultancy basis but currently they have no authorisation whatsoever to do so. The Bill will enable a company to participate in this activity both in the developing and in the developed world.

There are two sectional requirements for State companies to be commercially successful. The first is for each to have the necessary structures and powers and the second is for the State, as shareholders, to provide the same capital investment as the private sector. The Bill provides the first of these requirements. In regard to the provision of adequate capital investment, I am sure the Government will show the same dynamism which they have shown in bringing this excellent Bill before the House. The Bill, in the context of the Government's Programme for National Recovery, is providing Bord na Móna with the necessary legislative authorisation to enable them to expand their existing activities and diversify into other profitable employment-creating activities. The Bill is part of the Government's implementation of their commitment in paragraph 8 of the programme which states that State-sponsored bodies will be actively encouraged to develop and diversify their economic employment-creating activities and where new legislation is required to achieve this it will be brought forward.

Finally, I would like to congratulate the Minister on bringing this Bill forward so promptly after taking up office and in steering it successfully through the Dáil. I would also like to congratulate his two predecessors, Minister Ray Burke and Minister Michael Smith, on their involvement with the Bill. Great credit is due to all three and I thoroughly recommend the Bill to the House.

Ba mhaith liom buíochas a ghabháil leis na Seanadóirí as ucht a gcuid tuairimí suimiúla i dtaobh an Bhille seo agus i dtaobh Bord na Móna go ginearálta. Is léir ón méid a dúradh gur mór an meas atá agaibh ar an méid atá déanta ag an mBord agus a lucht oibre ó bunaíodh an comhlucht breis agus daichead bliain ó shin.

I would like to thank Senators for their extensive and interesting comments on this Bill and on what has been said about Bord na Móna in general. There is obviously a widespread appreciation of the valuable contribution which the board and staff of Bord na Móna have made to the Irish economy since their foundation.

It is also fair to say that everyone understands and accepts the need for change to ensure the future of the company. Change is an essential feature of everyone's lives these days and the energy market has proved to be particularly vulnerable to change.

During the debate, some Senators wondered how many years of peat production lie ahead of Bord na Móna. No one knows the exact answer to this any more than to the question of how much longer world oil reserves will last. A long life for peat production is expected but this will depend particularly on world energy prices and Bord na Móna's production costs. World energy prices may be outside our control but it seems reasonable to suppose that they will rise over the next few decades.

In any event, there is clearly scope for every organisation to influence their own cost levels. To that extent, the future of peat production lies partly within Bord na Móna's own control. There is certainly no question of making plans for the rundown of the peat industry.

I indicated in my opening address that I am considering the various economic issues facing Bord na Móna at present with a view to an early decision on the matter. The constructive comments which Senators have made in the course of this debate will be given careful consideration when arriving at these important decisions.

As I said at the outset, this is an enabling Bill. It is mainly intended to extend Bord na Móna's powers so that they can operate outside the State and also to extend their functions to enable them to take a broader view of the commercial opportunities provided by peat and by the expertise which has been built up in the company over the years.

Some concern has been expressed at the wide-ranging powers being given to Bord na Móna on the one hand and, on the other hand, at the restrictions being imposed due to the need to get the approval of the Ministers for Energy and for Finance.

I would like to assure Senators that it is not the Government's intention that Bord na Móna obliterate any private sector activity in areas such as manufacturing plant or erecting buildings. Neither is it the intention to obstruct viable initiatives by Bord na Móna by requiring every action to have prior ministerial approval.

The types of powers, functions and controls which are proposed in this Bill already apply to other semi-State companies such as Bord Gáis and the ESB and there has been no difficulty in their practical application.

A number of issues were raised in the course of this debate which can be dealt with in greater detail on Committee Stage. It would, however, be useful to respond briefly to a few of the main points mentioned.

Senator O'Toole suggested that there is a conflict between sections 4 and 5 of the Bill. This is not the case. Section 4 is designed to allow Bord na Móna to expand their operations outside the State. This is essential if the company are to make full use of the opportunities which are open to them. The expansion of the horticulture business is especially dependent on Bord na Móna having access to foreign markets not just as a supplier of low-grade raw material but as a supplier of high value-added products for specific markets.

It is common for semi-State bodies to be required to get approval from Ministers for specific activities. Ministers and Government act on behalf of the shareholder in these cases and it is perfectly reasonable for shareholders to have a significant influence in a company's affairs.

Section 5 on the other hand, permits the board to engage in ancillary activities. It does not conflict with section 4 because the ancillary activities must be those which "arise out of" or can be conducted "in conjunction with" any function of the board.

Reference was also made to section 10, concerning pay and remuneration for the staff of Bord na Móna. This section is included in order to ensure that Bord na Móna, in common with other semi-State bodies, adheres to existing Government pay policy and any directives which may be issued from time to time. It gives statutory power to the Minister to intervene when normal consultation procedures fail.

This type of residual pay control provision first appeared in the Gas Act, 1976 which established Bord Gáis Éireann and since then successive Governments have extended the provision to other semi-State bodies.

Many Senators referred at length to the question of cutaway bogs. I mentioned when opening this debate that the independent expert committee which I have established will be reporting to me before the end of the year. That committee have wide-ranging terms of reference which encompass the concerns and views expressed by the Senators and I will ensure that these will be brought to the attention of the committee.

A few Senators expressed concern at the introduction of sub-boards, suggesting that this is simply being introduced to facilitate the privatisation of Bord na Móna. This is not the intention. It is simply a necessary modification to the arrangements provided in the 1946 Act so that decisions within Bord na Móna can be made in a less cumbersome manner.

Senators have repeatedly mentioned the importance of Bord na Móna to the midlands and mid-west, in particular, and the need to ensure that the board continue to provide viable and sustainable employment in these regions. This Bill is designed to assist the board to achieve that aim and to manage their activities in a profitable and economic manner.

I commend the Bill to the House.

Question put and agreed to.
Committee Stage ordered for Wednesday, 13 June 1990.
Sitting suspended at 5 p.m. and resumed at 5.30 p.m.
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