I am pleased to bring this Bill before the Seanad. I made a major statement on tourism to the House in recent weeks and do not propose to rehearse the same ground in what I have to say today. The Bill is tightly focused and its purpose is to provide a statutory basis for a new national tourism development authority. When the authority is established, Bord Fáilte and CERT will be dissolved and their functions transferred to the new body. The Bill also provides that certain provisions of the Tourist Traffic Acts will be repealed to take account of its provisions.
Tourism is one of the largest industries in the world and has been on a continuous growth track for years. That growth was somewhat derailed in 2001 for obvious reasons, but if we can surmount the current period of international political uncertainty, there is every likelihood that global tourism will resume its upward trend. Irish tourism has also performed strongly over the past ten years or so. For much of the 1990s it was one of the best performing tourism sectors in the OECD and a star performer among the northern European tourism destinations. Tourism is now one of our major economic sectors. Recent economic studies suggest that it accounts for approximately 5.4% of annual GNP. It generates approximately €4 billion in foreign earnings and approximately €1.2 billion from domestic tourism. The industry supports approximately one in every 12 jobs in the economy.
Tourism suffered a reversal in 2001 and is now facing considerable challenges. These, together with significant institutional changes arising form the Good Friday Agreement, are driving a reform of the institutional architecture which the State uses to support tourism development. The Bill is a vital part of this reform package.
Before considering the content of the Bill it will be useful to consider the role of the current State agencies dedicated to supporting tourism. Under the Good Friday Agreement, tourism was designated as an area of co-operation. In December 1998 the parties to the Agreement decided that a publicly owned limited company would be established jointly by Bord Fáilte and the Northern Ireland Tourist Board, commonly known as NITB, to promote tourism to the island of Ireland. That company, Tourism Ireland Limited, was incorporated in December 2000 and since January this year has taken over responsibility for the international marketing of the island of Ireland as a tourism destination.
In carrying out its international marketing remit Tourism Ireland Limited is undertaking a number of functions previously carried out by Bord Fáilte. These include ownership and management of Tourism Brand Ireland, strategic all-Ireland destination marketing in all markets outside the island of Ireland and responsibility for the entire overseas office network. The new company is also responsible for the international delivery of product and regional marketing programmes on behalf of Bord Fáilte and the NITB while the underlying products will continue to be developed by these two bodies.
Tourism Ireland Limited has a staff of 150. Its head office is located in Dublin and it has a regional office in Coleraine. In addition, it has offices in major overseas markets, such as Britain, France, Germany and the United States. It has a board which is mainly drawn from its founding agencies, Bord Fáilte and the NITB, and the tourism industry, North and South. It was an enormous challenge to launch a new international tourism marketing agency just three months after 11 September, but having observed the new company in action in the six months since my appointment as Minister, I can say it has done a remarkable job in meeting this challenge.
The longest established tourism agency in the country is Bord Fáilte Éireann. Currently, Bord Fáilte has 130 employees and its head office is in Dublin. As Bord Fáilte has been the State's primary tourism agency for decades, the major element of the Tourist Traffic Acts is concerned, in one way or another, with its functions or the functions of its predecessors.
Following the establishment of Tourism Ireland Limited, Bord Fáilte retains responsibility for product development, marketing of domestic tourism on the island of Ireland, research and strategic planning, niche/specialist product marketing and promotions, regional marketing, implementation of specific initiatives such as the sports tourism initiative, statutory functions for the registration/grading of certain tourist accommodation, co-ordination of activities of the regional tourism authorities and tourism and the environment.
These functions may relate to providing a range of supports to the tourism industry, including those concerned with building the business capability of the industry, improving the quality of product which the industry offers and enhancing its competitiveness. The six regional tourism authorities, RTAs, continue to operate under the aegis of Bord Fáilte.
In 1994, there was a major review of the operations of Bord Fáilte. The outcome of that review was a decision that the primary focus of Bord Fáilte should be on international marketing. Matters extraneous to that priority were to receive less attention. The increased focus of Bord Fáilte on international marketing led to greater efficacy in our international tourism marketing which has paid handsome dividends.
One consequence of that refocusing of Bord Fáilte's operations, however, was that a decreasing portion of its staff and resources have been devoted to other areas, for example, product development and the environment. These issues have taken on a greater prominence in recent years with a growing emphasis on competitiveness, quality and standards and the actual reality of the visitor experience. Bord Fáilte needs to focus, once again, on some of those areas to help preserve unique elements of the Irish tourism experience.
CERT Limited is the State's national tourism training agency. It was established, as a company limited by guarantee, by Bord Fáilte in 1963. CERT has some 90 employees and its head office is in Dublin. It has a number of training centres around the country. Currently, CERT provides education, recruitment and training services for the tourism industry. It has broadened its original role of training support for the hotel and catering sectors to include business development support for all tourism and hospitality businesses.
More recently, CERT has moved in the direction of a wider business development role. It helps to build industry capability by focusing on human resource management and improving cost competitiveness.
As far as labour supply is concerned, the focus has been on attracting and retaining school leavers, adults returning to work and skills development for workers. These services are delivered through development, provision and design of a range of education and training programmes, together with innovative delivery methods, to meet the needs of industry.
As far as industry competitiveness is concerned, the focus has been on enhancing productivity and performance, benchmarked against best international practice. Any business experiencing costs and pressure on margins has to look again at the way it is doing things to determine the efficiencies it can introduce into its purchasing, organisation of work, etc. Tourism businesses are not any different. If support is required, CERT has a range of experience and programmes upon which to draw, a process which I hope to see developed by the new authority.
Fundamental changes have occurred in the nature of the tourism industry both globally and in Ireland over the past decade and more. In the context of these changes there has been a growing realisation by the Irish tourism industry that there are other issues which are more important for the industry's future than just visitor numbers. Yield, regional and seasonal distribution and access are key issues on one side of the equation. On the other side of the equation, we have the quality, range and competitiveness of the facilities and products that the tourism industry here offers to its ever more discerning customers.
I have spoken in this House recently on the need for industry to maintain its competitive edge. If it does not do so, it will fail to reap the due reward for the massive investment of public and private funds in the sector over the past 12 years, an investment that some economists put at over €4 billion.
Another ingredient, the key to the successful development of tourism, is the quality and levels of service that the industry has to offer. It makes little sense to invest millions of euro in building state-of-the-art facilities unless the necessary steps are taken to ensure the quality and level of service are in accordance with what the customer wants and consistent with what that customer has been led to expect, or, to put it another way, excellence in the physical design and quality of tourism products and good investment planning must be matched with equally good operational planning and delivery of services. If operational standards do not match the physical quality of facilities, the market potential of these facilities, from both overseas and domestic markets, may not be realised.
In a nutshell, the future success of tourism is dependent on the industry developing and maintaining quality product and quality service which provide good value for money, supported by effective, consumer-led, marketing programmes and the enhancement of its overall business capability.
On this day 12 months ago the Government decided that there was a compelling case for streamlining and integrating the delivery at national level of the State's activities in supporting and promoting product marketing and development, human resource development and training in the tourism industry. It approved the creation of a new body for that purpose to encompass the existing range of functions of CERT and those remaining with Bord Fáilte following the establishment of Tourism Ireland Limited. Setting up this new body means that the tourism industry will be able to avail of support from a strong and well resourced agency which will have a clear mandate to take whatever actions are appropriate to help the industry in its efforts to enhance the quality of its products and services and to do so in a manner designed to help it hold and increase its market share in well defined market areas.
It will be essential that the closest possible links, teamwork and working arrangements are put in place and maintained between the new tourism development agency and Tourism Ireland Limited. Such linkage is critical to keeping the Irish tourism product closely in line with international consumer demand, and Tourism Ireland's marketing strategy and plans. Accordingly, the working and funding arrangements in place at present between Bord Fáilte and Tourism Ireland Limited will be maintained and strengthened.
I have mentioned a number of the key issues facing tourism. While the Bill is not about any of these factors in themselves, it is about putting in place a strong and well resourced body with a clear mandate to take whatever actions are appropriate to ensure these issues are properly and fully addressed. The integration of functions within this new agency should provide a better range of streamlined programmes and services to support the future development of the sector. This new body will be charting the future course of tourism and will build on the existing knowledge, skills and experience within Bord Fáilte and CERT.
I hope, however, that it will do more than this. We do not want a new organisation which just consists of two old organisations lightly tagged together and continuing to do exactly the same old thing in the same old way. We need a new dynamic, a clear vision and an organisational structure to deliver on this. A lot of work has already been done on the mapping out of that structure and vision by a joint Bord Fáilte-CERT group, under independent chairmanship, earlier in the year. I hope the result of all this work and the Bill before us will be a highly effective, highly regarded body for the development of tourism in Ireland in the years ahead.
There has been strong support for the principle of integration of the functions of Bord Fáilte and CERT from the two bodies, the Irish Tourist Industry Confederation and the staff trade unions. Building on this support I established an interim board on 4 July this year which is charged with the task of ensuring the new authority can be up and running in time for the 2003 tourist season. It has an independent chairman and includes the chairpersons and some existing members of the board of Bord Fáilte and the council of CERT as well as a departmental representative.
The interim board's arrangements for recruitment and appointment of a candidate to the position of chief executive officer designate are very well advanced. I take this opportunity to pay tribute to the work of the interim board to date and look forward to its successful conclusion.
I will now give a brief summary of some of the main provisions of the Bill. This is a tightly focused Bill primarily designed to provide the statutory basis for the new authority. On the establishment of the authority, Bord Fáilte Éireann and CERT Limited will be dissolved and their functions transferred to the new body.
The Bill contains three Parts. Part 1 contains a series of standard provisions regarding title, interpretation, expenses and the laying of orders made by the Minister before each House of the Oireachtas. Provision is also made for the repeal of some provisions of the Tourist Traffic Acts which relate to the corporate governance of Bord Fáilte. This is necessary because the governance provisions of the Bill will obviously replace the old provisions relating to Bord Fáilte.
For clarity, I should point out that CERT Limited, which is a limited company established by Bord Fáilte, is not a statutory body. There are, therefore, no provisions in the Tourist Traffic Acts which pertain to the corporate governance of CERT.
Part 2 is the core of the Bill and contains those provisions necessary for the authority to come into existence and to carry out the functions being ascribed to it. Section 6 allows me to set by order a day for the establishment of the authority. While the official name of the authority is the National Tourism Development Authority, section 7 allows the authority to describe itself as Fáilte Ireland for operational purposes.
Section 8 could be regarded as the key section in the Bill and it describes the authority's functions. The primary functions of the authority will be to encourage, promote and support the development of tourism traffic within and to the State and the development and marketing of tourist facilities and services within the State. Within that overall context, the authority will seek to develop the recruitment, training, education and development of persons to be employed in the tourism sector. The authority will engage in research and planning and may engage in advertising and publicity or provide advice, consultancy services, training or support, including financial support.
The authority will continue to exercise the powers currently exercised by Bord Fáilte relating to the registration and grading of certain types of tourist accommodation. These powers are spelled out in various provisions of the Tourist Traffic Acts which will remain in place. While the Tourist Traffic Acts incorporate the functions and powers in relation to registration, grading and listing of accommodation, they do not prescribe the particular criteria with which a premises has to comply in order to be registered. These are set out in regulations made, from time to time, by Bord Fáilte, with ministerial consent. That process has worked satisfactorily in the past and I propose that it continue under the new authority.
I also propose, as soon as the Statute Law (Restatement) Bill has been passed into law, to arrange with the Attorney General for the restatement of the remaining provisions of the Tourist Traffic Acts. That will create a single source of coherent and easily accessible legislation relating to the registration and grading functions transferring to the authority.
Section 9 is standard and allows me to confer additional functions on the authority. Section 10 gives the authority power to set up companies and to acquire interests in companies. Section 11 allows the authority, either at my direction or with my consent, to delegate certain of its functions and describes the types of body to which functions can be designated. One body specifically mentioned in that context is Tourism Ireland Limited. Tourism Ireland Limited has been constituted as a joint subsidiary of Bord Fáilte and the Northern Irish Tourist Board which is dedicated to the international marketing of the island of Ireland as a tourism destination.
It is timely, given the current challenges facing the peace process, that we insert,via this Bill, the first statutory recognition of Tourism Ireland Limited in the Tourist Traffic Acts. In this context, I understand that tomorrow, the House will be dealing with the British-Irish Agreement (Amendment) Bill, 2002. The agreement attached to that Bill has important implications for the functioning of Tourism Ireland Limited, as well as for the various implementation bodies under the British-Irish Agreement. I commend that Bill to the House also.
Section 12 provides that the authority may contract out certain of its registration, grading and inspection functions under the Tourist Traffic Acts and Schedule 2 lists the relevant provisions. This will allow for the continuation of the current practice whereby Bord Fáilte contracts out some of its inspection and grading functions to private contractors.
Section 13 allows me to give general policy directions to the authority as is currently the case with Bord Fáilte. Sections 14 to 22 are standard provisions governing membership and meetings of the authority and conflict of interests and disclosure of information by members or staff of the authority. The authority will consist of a chairman and 12 members. It is important that the authority can establish committees to help in the better performance of it functions and section 23 allows it so to do.
Section 24 is a standard provision which puts a cap on the aggregate level of advances which the authority, from moneys provided by the Oireachtas, can make for the purpose of supporting enterprises and projects relating to the development of tourist traffic and the development and marketing of tourist facilities and services. The cap is set at €65 million.
Section 25 allows the authority to provide financial aid in relation to the carrying out of its functions and to administer EU schemes. Throughout the 1990s, the administration of EU tourism development schemes was a major factor in the work of both Bord Fáilte and CERT. Although their significance has diminished in the current round of Structural Funds, Bord Fáilte is still involved with administering such schemes. It is important, therefore, that we ensure that the authority is empowered to undertake such work.
Sections 27 and 28 contain standard provisions in relation to the submission and auditing of audited accounts and annual reports. Section 29 provides for the application of the Freedom of Information Act to the authority. Section 30 is a standard provision allowing the authority to accept gifts on conditions consistent with its functions. Sections 31 to 33 contain some standard provisions relating to the chief executive of the authority. Section 34 is a standard provision for the appointment and remuneration of staff.
Section 35 provides for the transfer of the existing staff of Bord Fáilte Éireann and CERT Limited to the new authority, on the establishment day, on terms and conditions no less favourable than those to which they were subject immediately beforehand. This provision is designed to give a degree of comfort and security to staff of both organisations who will, naturally, have been subject to a certain degree of anxiety when faced with the prospect of a merger of both organisations. Management or Ministers can give guarantees to staff but from the staff perspective, the legislative guarantee gives the best security of all. When I recently met representatives of the Bord Fáilte and CERT unions I told them I would seek to underpin their position in legislation and I have delivered on that promise. Section 36 is a standard provision governing superannuation.
Part 3 contains standard transitional provisions concerning a range of items, including the dissolution of Bord Fáilte Éireann and CERT Limited, the vesting of property and the automatic transfer of the rights and liabilities of the two organisations to the authority.
Schedule 1 and Schedule 2 list provisions of the Tourist Traffic Acts, 1939 to 1998, that have been repealed, or may be contracted out, as a consequence of the provisions included in the Bill. Finally, I remind the House that I recently launched a process to review Irish tourism policy with a view to generating a new policy framework for the future. The outcome of that review will shape the policy environment for the new authority.
I commend the Bill to the House and look forward to hearing the views of Senators.