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.