Harbours Bill 2015: Report and Final Stages

I welcome the Minister for Transport, Tourism and Sport, Deputy Paschal Donohoe. Before we commence Report Stage, I remind Members that a Senator may speak only once on Report Stage, except the proposer of an amendment who may reply to the discussion on it. Each amendment on Report Stage must be seconded.

I move amendment No. 1:

In page 10, between lines 7 and 8, to insert the following:

“(4) The Minister shall, after consultation with the Minister for Jobs, Enterprise and Innovation, give a direction to a Port Company to report on the implementation of the Competition Authority Report on Competition in the Irish Ports Sector (2013) in particular in respect of the vital need for intra-port competition and shall report on these matters to both Houses of the Oireachtas.”.

I welcome the Minister. Before he arrived, the Cathaoirleach was dispensing seasonal goodwill and congratulating Senator Jillian van Turnhout on being politician of the year. I thank the Cathaoirleach, the Leas-Chathaoirleach and the Acting Chairmen and extend seasonal goodwill messages to the Minister who is very welcome on this day.

Amendment No. 1 arises from the debate we had the previous day. That debate was most useful and interesting, even if somewhat prolonged. We got through many of the issues the Minister faces in ensuring this vital part of the economy operates efficiently. It is in that context that amendment No. 1 is proposed. It deals with ministerial directives. My concern is that the general powers of direction of the Minister should include a power to address the matters raised by the Competition Authority. My fear is that this will not happen unless the Minister makes it happen in view of his overall responsibility for the efficient and economical operation of ports. People who have protections and restrictive practices get settled in their ways and are unlikely to agree to give them up. I have in mind the previous system in which airlines used to operate in Europe. It was a nice cartel in which they charged the same fares and had no new entrants. It took pressure from the outside to change this.

I took from the website the Minister's correspondence with the chairperson of the Competition Authority dated 11 August 2014 addressing the leasing and licensing of Dublin lo-lo terminals and the recommendation on stevedore licensing.

On the first matter, the Minister said, "It is not one in which I as Minister have any role." Over the page and on the second matter, the Minister stated, "The statutory functions of port companies are not areas in which I as Minister have any role." The purpose of the amendment is that he would have a role, in view of the importance of the matter, because dealing with these restrictive practices, including long leases, lack of competition between competing terminals and the difficulties of entering the stevedoring business, requires a push from the Minister. The purpose is to strengthen the Minister's hand in ensuring we have a port sector that operates efficiently. As the Minister knows, the Competition Authority found there was not much scope for inter-port competition between different ports, but it felt we had neglected the issue of competition within a port. That is the purpose of amendment No. 1.

I second the amendment. I extend to the Minister and my colleagues my best wishes for the season. I thank the Chathaoirleach and others who have sat in the Chair who have been kind enough to give me speaking time when perhaps I was not entitled to it because I did not belong to a group. I thank them for their generosity in that regard.

Nobody wants the Senator.

As the Senator is the one person who did not give me speaking time-----

That is what I am saying.

-----he is not getting any thanks.

There is nothing more I can add to what Senator Sean D. Barrett said. I believe the arguments he has made are robust. While it might mean the Minister's colleagues would have to come back next Monday, it would be noble to include that section in the Bill.

I thank the Senators for the amendment and the arguments they have offered in favour of it. I am not accepting the amendment because I am confident that the Minister of the day already has sufficient powers to deal with the issues to which the Senators have referred. I anchor this in the report from the Competition Authority which has broadly endorsed the policy being delivered through the Bill and through the overall national ports policy.

On the issuing of directions, I must recognise at all times that the boards of directors of the ports and the local authorities are autonomous units, particularly for those ports that are transitioned into the local authorities. As companies they will still have boards of directors who will have commercial duties. As Minister, it is not my role to issue directions to get involved in the commercial operation of a port. That said, I believe I have sufficient power to deal with the matters Senators Sean D. Barrett and Gerard P. Craughwell have outlined. My departmental officials may at any time require or request information from ports about the implementation of the recommendations of the Competition Authority's report. In addition, section 40 of the Bill introduces a new statutory power requiring the port companies to be accountable to the Oireachtas joint committee with responsibility for transport policy. The committee members will be able to play a role in investigating the implementation of the Competition Authority's policy. For those two reasons, I believe there is sufficient power in place to deal with the implementation of the report. As I said at the beginning, the Competition Authority has endorsed the policy enshrined in this legislation.

I thank the Minister for his reply. I will not be pressing the amendment.

It has to be referred somewhere - perhaps to the Economic Management Council of the four senior Ministers. I do not envisage these reforms being made unless there is pressure somewhere else. I used to serve as a Government representative on the National Economic and Social Council; I wonder if it can do anything. I am not satisfied about how Competition Authority recommendations are being set aside. It is more than ten years since it recommended the abolition of the conveyancing monopoly, yet that is still there and it has survived the recent Legal Services Bill that was before the House. The problem at those ports is that the insiders are quite happy and it needs an outsider to shake them up in some way. I would be delighted to think the Oireachtas committees could instruct Dublin Port and the other ports that have these restrictive practices to get their act together. They were not allowed because of the Stock Exchange takeover rules, but they never properly discussed the IAG takeover of Aer Lingus, which results in a monopoly over the 1.6 million passengers on the Dublin to Heathrow route. There was universal scepticism at the Oireachtas Joint Committee on Transport and Communications about postcodes and our view was endorsed by the Comptroller and Auditor General, given that €38 million was spent on a postcode system that hardly anybody uses. The committee was unanimous in its opposition, but we are not allowed to take votes. I do not share the Minister's optimism. There is no evidence that people take a blind bit of notice of the views of the Oireachtas Joint Committee on Transport and Communications. On two important issues it proved to be toothless. In one it was not allowed any say at all and in the other it was right but the policy proceeded and €38 million was spent.

I do not envisage operators of restrictive practices coming out with their hands up and saying, "The Competition Authority report is quite right. We must give up the hoary old restrictive practices." It will be an agenda item for the next Government and the next Oireachtas. How do we reform institutions? This one was obviously dominated by getting the finances into order. That has been a success and everybody commends the Government for it. However, many of the institutions of the permanent government are not working and need prodding by the elected representatives.

I thank the Minister for his reply. I will look at alternative ways to secure these reforms.

Amendment, by leave, withdrawn.

Amendments Nos. 2 and 3 are related and will be discussed together.

I move amendment No. 2:

In page 10, line 35, to delete “may” and substitute “shall”.

When the Minister was in the House the other day, he advised me that he had consulted wisely and widely on the Bill. Senator Sean D. Barrett had originally asked him to change the wording of section 13(3)(a) by replacing "may" with "shall". Amendment No. 3 proposes the deletion of paragraphs (b) and (c), which would no longer be required.

As the Minister did, I have taken the time to consult on this issue. I have consulted a number of harbour masters around the country. They are not happy that they are being excluded from the board. Depending on the board, in some cases the word "may" has been interpreted as meaning that they can attend all board meetings, save those board meetings that discuss their terms and conditions of employment, pay, etc. However, it is totally unacceptable to have a harbour board or, as Senator Sean D. Barrett put it, a group of landlubbers meeting in a room while the mariner sits outside the door with his cap in his hand waiting to be called in. In one case in Foynes, the harbour master could have saved the State €2 million. The Minister will recall that in Foynes the chief executive officer advised the port authority - his board - that he needed a vessel on standby as a pilot.

The board agreed and the boat in question was his own boat. This boat was leased to the authority, costing €51,667.50 in the first year, and the payments went on and on. It ended in the chief executive officer being suspended from office. Ultimately, the case went to the courts and the State footed a bill of €2 million, comprising severance for the chief executive, his legal costs and the State's legal costs. Had the harbour master been at that meeting, he would have been able to tell the board the port already had a second pilot ship and did not need a third one.

We cannot have a situation where the harbour master, the person who is statutorily charged and has statutory duties similar only to those found in the Attorney General, firemen and other such important offices, is excluded from the decision-making process that takes place in every harbour around the country. There are harbour masters watching this debate today and they are deeply concerned. Some of the harbour masters we have in this country are strong personalities who ensure they attend every single meeting of the board. Others, who may not be so strong in the future or who are appointed by some chief executive officer may in some way feel subservient and that they cannot exercise their right to attend.

If the Minister is not going to accept the amendment, will he give the House the same assurances given by Deputy Eamon Gilmore when he brought forward the 1996 Act? They were that under this section of the Act, "may" means they can attend every board meeting, save those meetings that deal with their salary and conditions of employment. It is unthinkable that a harbour board would meet without having the expert advice of the chief mariner of the location. It is totally unacceptable not to have "shall" in the section but if the Minister is not going to accept that, will he at least give the assurance that the harbour master can attend all meetings, save those that deal with his terms and conditions of employment?

I disagree with what Senator Gerard P. Craughwell stated. It should be at the discretion of the board whether it wants the harbour master-----

Is there a seconder for the amendment?

I second the amendment and will let the Leader speak before me.

It should be at the discretion of the board whether the harbour master attends a board meeting. It is not necessary for the harbour master to attend the vast majority of meetings that take place in a port company. The harbour master is there for the navigational duties laid down under his or her contract and it is not necessary on many occasions for the harbour master to be present at such meetings. It would be a very poor and ill-advised board that, if it were dealing with matters that would require the attendance of the harbour master, would not invite the harbour master to such a meeting. There is no necessity to change the wording in this section to "shall". The current wording of "may" should suffice. As I said, it would be a very poor board that, if it were dealing with navigational matters and matters over which the harbour master would have jurisdiction, would not have the harbour master attend such a board meeting. It is a waste of time if a harbour master had to sit at meetings at which there was no reference to his duties. The wording of "may" covers the point within the legislation.

I formally second Senator Gerard P. Craughwell's amendment and thank the Leader for giving us his experience in this regard. There are a number of angles on this issue. The idea of worker directors was that people who actually did the work would have a seat on the board. These are State organisations. I do not know how it fell through the holes in the system that there is no such provision. The fear is that the eight people appointed by the county manager would have no experience of running the harbour. It is important on any board that people who actually do the work should have an input. I agree with the Leader that it would be a poor board that would not have that experience brought in for the purposes of board meetings. How can we ensure that will happen? We have mentioned before that the classic case must be "H.M.S. Pinafore", with the line "Stick close to your desks and never go to sea, And you all may be rulers of the Queen's Navee!" If there is such experience, do not give all responsibility to landlubbers. In the case of "H.M.S. Pinafore", the posts on the board were reserved for aristocracy-----

I thought the Senator was going to sing to us.

Who are the harbour masters and what could they bring to the board? This is redundant as far as the Leader is concerned, but for the rest of us, I will quote from the website of the International Harbour Masters Association:

Harbour Masters require a variety of skills as well as specialised knowledge and understanding. Traditionally Harbour Masters have a marine background and have usually served in a senior capacity at sea. Many have a STCW Master’s certificate of competency and many have served as master of a ship. Further, Harbour Masters may also develop skills around the management of personnel, environmental management, business development and others as part of their continuous professional development.

Harbour Masters will also be involved in monitoring the training and qualifications of their employees and other service providers in the port, and play a vital role in developing the next generation of port professionals including their deputies.

Another section of the website states:

Today’s Harbour Master is increasingly involved in the day to day management of port operations beyond the technical and statutory role of the Harbour Master. Increased involvement and greater responsibility in the operational and commercial business of a port, beyond the pure maritime elements, is another area of activity for many Harbour Masters.

This is a valuable person to have around. It is in the tradition of worker directors. We are going to move ports under the control of county councils, which will, in many cases, know very little about running a port, which is a pretty specialised business, as we have seen. We highlighted the last day the success of business in the four major ports, namely, Foynes, Cork, Dublin, the dominant one, and Rosslare. The next layer of ports makes a profit of approximately €500,000 per year. We are pretty good at these businesses. Let us keep the expertise there in the new structure. There is much merit in what Senator Gerard P. Craughwell has proposed and in the Leader's response. It echoes many of the useful elements of the debate on Committee Stage. In that context, I am happy to second the amendment.

In terms of this amendment, the Leader's words summed it all up - the word "may" will suffice. The Department and the Minister have got it right. Senator Gerard P. Craughwell is painting a picture that the harbour master who is employed through the board at some stage might live in outer Mongolia or somewhere and is not available at certain times to come to a meeting. If the board which is charged with running the harbour needs the harbour master's expertise in the meeting, it may request the harbour master's presence, as the Leader pointed out. An example of such a procedure was that José Mourinho was until yesterday employed by the board of Chelsea Football Club. If it needed him to come to discuss team matters, that was it - he came to the meeting. The board has to make a decision. There may be a conflict of interest if the harbour master is a sitting member of the board. The Minister has got it right. It is not like the harbour master would live in outer Mongolia.

Also, Senator Sean D. Barrett spoke, in relation to the CEO, about appointing landlubbers to run one. For most of these harbours, the elected members are all from around that area; therefore, they should have a little expertise on and knowledge of their local area. They would not be landlubbers. Many families may even have worked around the harbour areas at different stages. The word "may" suffices and the amendment should not be accepted.

I can see where Senator Gerard P. Craughwell is coming from, but if the word "shall" was included in the section, it would mean that the harbour master would have to be present on all occasions.

They would not even be able to excuse themselves if and when a conflict of interest arose. The word "may" is probably much better in such circumstances because there are occasions when a harbour master may have a conflict of interest and he or she may not be able to attend on all occasions.

There is a facility for the appointment of two temporary board members until 2018. Is it at the discretion of the chief executive of the local authority to bring them on board in the interim? The board would revert to eight people when the new system is up and running. We currently have very competent local authority councillors on the board in the likes of Dún Laoghaire and various other places. What would be their position? There are legal, accountancy and other qualifications and those competencies are available in the council chamber through councillors. What is the position of councillors? The councillors have brought in those competencies. Senator Pat O'Neill spoke about how local knowledge is so important and I agree with him. When we are elected as public representatives, we do not grow horns. We still have competencies in the chamber.

Local councillors are not barred from local enterprise offices, LEOs, which deal with every enterprise in the various counties. The ports are an enterprise and we are missing the boat big time by barring local councillors from the boards of harbours. We have seen good ideas coming from local councillors on the boards of the ports that they sat on previously. Why are they being barred now? Is there any way that the Minister can change this? Perhaps he can allow them to apply in the public process, the same as everybody else. There are competencies in councils, including legal and accountancy skills, as somebody wrote in The Irish Times last week and there has been major change as a result. Local knowledge is a major competency also, even by itself.

I mentioned this on the previous occasion. There are examples of locally elected public representatives with vast experience of working and living around ports and dealing with customs clearance. Many of them would have more expertise than the chief executives who would appoint the members to a board. We are losing quite a number of councillors with vast experience. Some of these individuals worked all their lives for companies operating out of ports. It is wrong to exclude them and where there is expertise, these councillors should be considered to be members of a board. I ask the Minister to reconsider.

Two separate matters arise and I am very happy to respond on both of them. There is the matter that Senators Gerard P. Craughwell and Sean D. Barrett raised about the role of harbour masters which is what the amendment concerns and the separate point about councillors and their role on the boards of ports. I suggest we deal with the issue of councillors when we reach the appropriate section.

It was dealt with on Committee Stage.

Indeed. I would be very happy to get into it at the appropriate point again. With respect to harbour masters, I will begin by outlining where I agree with the two Senators and, conversely, where I disagree with them. I agree on the points regarding the expertise and knowledge that harbour masters have. I have seen this when I visited many ports and in meeting the boards of ports. I completely disagree with the Senators on the description offered, perhaps flippantly, in describing the boards of ports as "landlubbers". They are anything but. Engaging with the boards of port companies in the way that I have, I know it may be true to say that some members may not have the maritime experience that the chief executive or other directors might have. The reason for that is the broader set of skills relating to financial or governance matters that boards of directors must have. We must have a broad set of skills and experiences represented on the board. I stated when I met the board of the Drogheda port last Monday that the collective experience on the board has a deep appreciation of all the maritime issues that a port might be facing and all the trading and operational matters that are relevant to the future of the port.

The Senators made the point about the importance of harbour masters and I have stated I agree with that point. The key point on the amendment is that there is nothing in the Bill changing the current status of harbour masters and their relationship with the board. We are not changing that at all. The role that harbour masters currently have vis-à-vis the board of directors is unchanged in any way with the passage of this Bill. Notably, section 37 of the 1996 Act, which requires every company to employ a harbour master, and section 17 of the Act, which allows for their attendance at board meetings, are unchanged by the passage of the Bill.

I would have been open to accepting the amendment if anything in the Bill changed the current relationship between harbour masters and boards. If any change was proposed or could happen in the Bill, there would be a case for looking at the amendment. I accept that the participation of harbour masters in board meetings is very valuable. When I met boards of port companies, in many cases the harbour masters were there and took part in our discussions. There is nothing in this Bill that changes the relationship about which the Senator is concerned and that is the reason I am not in a position to accept the amendment.

The current relationship between harbour masters and boards works well and appears to be successful in allowing ports to trade successfully. As a result and because the relationship is underpinned by current law, which is in no way changed by the passage of the Bill, I accept the strong and positive intention behind the amendment, but it would not improve the operation of ports. It is for these reasons that I do not propose to accept the amendment.

I thank the Minister for his reply, but I ask him to clarify one or two points. First and foremost, the role of harbour masters is unique in that they are an arm of the State. They are charged with the protection of the State's assets and particularly with respect to the environment and the security of shipping lanes under their control. In addition, I wonder if there is any impediment to appointing the harbour master as a worker director to the board. The Minister pointed out the excellent example of the County Louth port where the harbour master attends all the board meetings. One could also have mentioned the Limerick harbour board; as far as I recall, in the past the harbour master was specifically instructed not to attend board meetings.

It would be no harm if the Minister said that, as a general rule, it would be preferable to have the harbour master in the room for board meetings. I do not ask for him or her to be a voting member, but will the Minister accept the principle that he or she should be in the room for board meetings?

The Senator asked three questions. On the first, I accept that they have a unique and important role to play in the operation of ports, particularly in respect of navigational safety and maintenance of the ports themselves. Second, there is no impediment to their appointment as worker directors.

On the third question about whether it would be preferable for the harbour master to be present in the room for board meetings, I am not in a position to offer direction or guidance to the directors of ports companies on what they should do on this matter, although I fully respect where the Senator is coming from on this. If I as Minister, or the local authority when it takes over my role in this regard, appoint directors to companies, we have to allow them to do their work. We have to accept they are independent directors of companies that are recognised in company law as independent. While it makes sense that the harbour masters should be present for discussions on the operation and safety of the port, my experience is that they are present. I cannot recall a discussion I have had with a port company about matters such as infrastructure or safety from which the harbour master was in any way excluded. In many cases, he or she has participated as strongly in the discussion as the chief executive officer of the port company, because he or she has such appreciation of what goes on in the port.

I accept how fundamental harbour masters are to the operation of ports, but if I say a board of directors has to be in place because the company still exists, I have to respect their independence, which I do. We all know the difficulty we get into when we begin to interfere with their work and, for these reasons, it is, therefore, difficult for me to issue a directive to them regarding what they should do on any operational matter. I have the ability to issue directives to them on national ports policy and on any matter I am advised by my Department might jeopardise the ability of the port to deal with operational safety or navigational matters. Those are the main powers open to me. While it is important that the harbour master be present for discussions relevant to the operation of the harbour, I have to respect the independence of the board of directors and allow them to make judgments as they see fit.

Is the amendment being pressed?

It is, with some reservation.

Amendment put:
The Seanad divided: Tá, 4; Níl, 13.

  • Barrett, Sean D.
  • Craughwell, Gerard P.
  • Leyden, Terry.
  • Wilson, Diarmuid.

Níl

  • Brennan, Terry.
  • Cahill, Máiría.
  • Coghlan, Eamonn.
  • Coghlan, Paul.
  • Cummins, Maurice.
  • Gilroy, John.
  • Hayden, Aideen.
  • Henry, Imelda.
  • Keane, Cáit.
  • Mullins, Michael.
  • O'Neill, Pat.
  • Sheahan, Tom.
  • van Turnhout, Jillian.
Tellers: Tá, Senators Sean D. Barrett and Gerard P. Craughwell; Níl, Senators Paul Coghlan and Aideen Hayden.
Amendment declared lost.
Amendment No. 3 not moved.

I move amendment No. 4:

In page 16, line 18, after “executive” where it secondly occurs to insert the following:

“in accordance with the guidelines on appointments to public boards published by the Department of Public Expenditure and Reform”.

The formulation of amendment No. 4 contains the words of the Minister when he was in the House on Committee Stage. We also referred to the Howlin reforms. As it stands, the Bill provides that, "The directors of a transferred company ... other than the chief executive, shall be appointed by the local authority chief executive." On the previous occasion, we were concerned that this was a draconian power. The Minister's formulation, as provided here, suggests how the power would be exercised. Is it useful for the Minister to have it in the Bill given his response to concerns we expressed on Committee Stage? The purpose of the amendment is to put context in the Bill in respect of what are fairly sweeping powers for one person to appoint eight people to a board.

I second the amendment.

I thank Senator Sean D. Barrett for tabling this amendment. This is provided for in section 22(8) of the Bill and means that the local authority must appoint people in accordance with the public appointments process laid down by the Department of Public Expenditure and Reform. Given that we achieve the same objective in a different part of the Bill, I am not in a position to accept the Senator's amendment. I assure him, however, that the process and the objective he hopes to deliver is being achieved but in a different part of the Bill.

I thank the Minister for his reply. As we are ad idem, I will withdraw the amendment with leave of the House.

Amendment, by leave, withdrawn.

As it is now 11 a.m., I am required to put the following question in accordance with an order of the Seanad of 17 December 2015: "That Fourth Stage is hereby completed; that the Bill is hereby received for final consideration, and that the Bill is hereby passed."

Question put:
The Seanad divided: Tá, 15; Níl, 7.

  • Brennan, Terry.
  • Burke, Colm.
  • Cahill, Máiría.
  • Coghlan, Eamonn.
  • Coghlan, Paul.
  • Conway, Martin.
  • Cullinane, David.
  • Cummins, Maurice.
  • Gilroy, John.
  • Hayden, Aideen.
  • Henry, Imelda.
  • Keane, Cáit.
  • Mullins, Michael.
  • O'Neill, Pat.
  • Sheahan, Tom.

Níl

  • Barrett, Sean D.
  • Craughwell, Gerard P.
  • Daly, Mark.
  • Leyden, Terry.
  • van Turnhout, Jillian.
  • White, Mary M.
  • Wilson, Diarmuid.
Tellers: Tá, Senators Paul Coghlan and Aideen Hayden; Níl, Senators Sean D. Barrett and Gerard P. Craughwell.
Question declared carried.