I am pleased to have the opportunity to commence Second Stage. I look forward to engaging with Senators on the substance of the Bill and I hope to secure the broad support of the House for this important legislation. The Bill was not amended in any way during its passage through the Dáil and that, in itself, is clearly indicative and reflective of the broad support it has attracted on all Stages thus far. I would, therefore, like to express my gratitude to my colleagues in the Dáil for their support and positive engagement. In particular, I thank the Select Committee on Business, Enterprise and Innovation for its timely consideration of the legislation.
This is a short but technical Bill that addresses the implications of a 2015 Supreme Court judgment and aims to ensure that the IDA can continue to purchase property for the purposes of industrial development. I would like to be crystal clear at the outset that the purpose of this Bill is not to change how the IDA carries out its property functions; it is to ensure the IDA can carry on doing what it has done successfully for many years. The ability to provide property solutions to its clients is an essential tool that the agency uses to attract foreign direct investment, FDI, to Ireland. It is particularly important in order to attract FDI to the regions, which is an issue close to many Senators' hearts. It is, therefore, important that we enable the IDA to continue to do this in to facilitate the authority in its work and generate jobs in all regions.
I would like to explain the need for this legislation. In 2011, the IDA sought to acquire land in County Kildare by compulsory purchase order, CPO, for industrial development purposes. It is important to note that this was the first and only time the IDA had ever sought to purchase property compulsorily and, in doing so, the agency relied on the existing compulsory purchase powers set out in the Industrial Development Acts. However, the landowner concerned successfully challenged the CPO after the Supreme Court found in his favour.
In setting aside the order, the court's judgment highlighted two key findings. First, the court found that the IDA had acted ultra vires as section 16 of the Industrial Development Act 1986, on which the IDA relied, did not allow the agency to acquire property for future, as opposed to immediate, use. Equally, the court ruled that the IDA did not identify a specific company for which the property was being acquired and this was again outside the terms of the legislation. The court also made clear that both of those determinations would apply when property was being acquired by agreement. Therefore, the court’s judgment had wider implications for the IDA’s purchasing powers.
Second, the judgment was clear that an independent body such as An Bord Pleanála should be designated in legislation to either confirm a proposed CPO or to adjudicate on any objections to such an order.
I want to clarify again that the sole aim of this Bill is to address in full the issues raised in the Supreme Court judgment. The Bill does not equip the IDA with strengthened or additional powers. The aim is simply to put in place an updated and modernised process, incorporating a full role for An Bord Pleanála, so that the IDA retains its current industrial development property purchasing powers. The Bill does not represent a policy shift in the IDA’s approach to purchasing property and there is no intention to increase the authority’s use of compulsory purchases on foot of this legislation.
I will give a brief overview of the content and structure of the Bill itself. Its aim is to address the Court’s judgment in the 2015 case. With that in mind, the draft Bill ensures the IDA will continue to have the capacity to compulsorily acquire property on an exceptional basis, in limited circumstances and subject to strict requirements. I stress that any future compulsory purchases will be subject to tighter controls and more rigorous requirements than are set out in current legislation. The amended legislation is clear that the land must be for immediate industrial development use and that the IDA will need to have a specific client in mind for the property.
In addition, as per the terms of the Supreme Court judgment, the Bill provides that An Bord Pleanála will undertake a full adjudicatory role in the process, a role that is very much aligned to its existing role in compulsory purchases carried out by other State bodies. Second, the Bill will ensure the IDA can continue purchasing property by agreement and with the full consent of the vendor, even when it is for future use and a specific company has not been identified as the beneficiary. In more detailed terms, the Bill amends section 16 and the Second Schedule to the 1986 Industrial Development Act and also applies certain provisions of the Housing Act 1966 in relation to compulsory purchases, and certain provisions of the Planning and Development Act 2000 in respect of the role of An Bord Pleanála.
Sections 3 and 4 amend section 16 of the Industrial Development Act 1986 and make it clear that the IDA can continue to acquire property by agreement in circumstances where the property is not for immediate use, and whether a specific industrial undertaking has been identified in advance. This is how the agency has always operated when purchasing land by agreement with landowners, so this does not represent a new approach or a policy change.
Sections 5 and 6 provide that the IDA will be permitted to purchase land compulsorily only in circumstances where it is required for immediate, as opposed to future use, and a specific undertaking has been identified. They also provide that the compulsory purchase powers are to be used in accordance with the existing and well-established compulsory purchase processes set out in the Housing Act 1966. Under this legislation, compulsorily acquired land can only be leased, as opposed to sold, by the IDA to an industrial undertaking. This important safeguard serves to ensure that land that has been compulsorily purchased is put to immediate industrial development use, but remain in State ownership.
Section 7 applies certain existing provisions of the Planning and Development Act 2000 to provide for a full role for An Bord Pleanála as an independent body to affirm any CPOs made by the IDA. In addition, the Bill provides for An Bord Pleanála to take on an adjudication role with regard to objections to a compulsory acquisition. I reiterate that the role assigned to An Bord Pleanála in future IDA compulsory purchase closely mirrors its existing role in compulsory purchases carried out by a wide range of other State bodies.
I draw the attention of the House again to the fact that the Bill was not amended during its passage through the Dáil and it remains as originally published. This reflects the broad support that it has attracted thus far, for which I am grateful. During the debate in the Dáil and in the Select Committee on Business, Enterprise and Innovation, it was suggested that, in the case of a compulsory purchase, the IDA should be required to demonstrate that no other viable alternative sites could be acquired by agreement. This consideration of alternatives, however, forms a core part of An Bord Pleanála’s deliberations when adjudicating on an objection to a compulsory purchase. It is also the case that a compulsory purchase should only be envisaged as a last resort in a truly exceptional circumstance where all other viable options have been exhausted. After all, it is abundantly clear that a compulsory purchase would not be pursued unless it was necessary, and clearly that would not be the case if there was a suitable alternative.
It was also suggested that the Bill should include a buy-back provision, whereby any land purchased compulsorily should be offered for sale back to the original landowner in the event that the planned investment does not proceed for whatever reason. We have considered this issue, but it is not a matter for this legislation on the basis that such a situation is not expected to arise. As has been explained on various Stages in the Dáil, it is only intended to resort to a compulsory purchase as a truly exceptional measure, once all other viable options have been exhausted.
The Bill also makes it explicitly clear, even in the very unlikely event of a compulsory purchase in the future, that land cannot be sold by the IDA to an investor and can only be leased to a company. The availability of suitable property solutions is proven as a key driver in attracting FDI and winning job-rich investment for the regions. It is a core element of Ireland’s value proposition presented to prospective IDA clients. With that in mind, I think we would all agree that the IDA carries out critically important work trying to support regional development and attract as many jobs as possible to regional locations. It is essential, therefore that no legal uncertainty, no matter how small, attaches to its property purchasing powers. Otherwise, we risk diminishing the IDA's capacity to attract further foreign direct investment and generate new employment opportunities across the country.
A vital aspect of the IDA’s work remains, as has been the case for many years, connecting those firms with property solutions. To do that effectively, the IDA needs continued capacity to purchase properties so that they can be offered to potential investors. This means that the IDA must have the capacity to buy property for the purposes of industrial development in situations where it may not be required for immediate use and where a specific company has not yet been identified as the ultimate beneficiary. I am sure we are all aware of how important this is to support the IDA’s work to increase foreign direct investment in rural and regional locations, given that the vast majority of IDA property purchases are outside main urban areas.
I would like to be very clear again that while the IDA very rarely employs its compulsory acquisition powers - it has only ever done so once - it is important that it retains its statutory power to do so. Without compulsory purchase powers, the IDA could potentially miss out in the future on extremely significant investment opportunities that could have a transformative impact or effect on a local community by bringing job-rich investment. I reiterate something I mentioned, namely, that this is a short and technical Bill.
Echoing some of my earlier comments on the Bill, I reassure Members that there is no intention here to change how the IDA goes about its property functions or to increase its use of CPOs. The IDA does not rely on compulsory purchases as a means of acquiring land and the Kildare case was the first and only time the agency had attempted to use its current powers. In fact, I would not expect any change in practice in how the IDA fulfils its property functions on foot of this legislation. The aim of this Bill is to ensure that the IDA can carry on doing what it has been doing so successfully for many years - attracting job-rich investment right across the country. That is the purpose of the Bill and that is why I am asking for Senators' support. I commend the Bill to the House.