I welcome the Minister of State at the Department of Agriculture, Food and Rural Development, Deputy Ó Cuív, to the meeting today to consider the International Coffee Agreement, 2001, a copy of which Deputies should have received. This motion has been referred to the committee in accordance with paragraph 1(a)(iii) of the committee's orders of reference. I apologise for the delay in commencing the meeting. I understand the Minister of State must attend the Seanad at 6 p.m.
International Coffee Agreement.
Ba mhaith liom buíochas a ghlacadh as ucht na deise a thabhairt dom labhairt faoin gconradh tábhachtach seo. The International Coffee Agreement, 2001, was laid before the Dáil in accordance with Article 29.5.2° of Bunreacht na hÉireann on 6 February 2002. This article requires that in cases where Ireland's participation in an international agreement involves a charge on Exchequer funds, a motion of approval is necessary before our membership thereof can be ratified. Ireland signed the agreement in September last but, as stated, a Dáil motion of approval is necessary before ratification can be finalised. Ratification must be completed by 30 June 2002. Article 45(2) of the agreement enables member countries to apply the agreement provisionally pending ratification.
The International Coffee Organisation, ICO, is an intergovernmental organisation comprising 63 coffee producing and consuming countries. It operates under the auspices of the United Nations and functions through the International Coffee Council, the Executive Board, the Private Sector Consultative Board and the executive director and secretariat. The council is the highest authority of the organisation and is composed of representatives of each member country. The executive board consists of 16 members - eight exporting and eight importing - who oversee the day-to-day operations, particularly the approval of projects. Members are elected annually and may be re-elected. It is responsible to, and works under the general direction of the council which has delegated to it all its powers other than those reserved to the council by the agreement. The powers delegated to the board include those necessary to regulate the day-to-day operation of the agreement.
As a general rule, all matters referred to the council are first examined by the board to expedite the work of the organisation and to facilitate that of the council. Other specialist committees such as the finance committee and the promotion committee meet on a regular basis to look at key areas of work, and their chairpersons report to the board or council. The Private Sector Consultative Board which comprises 16 leading industry representatives from producing and consuming countries acts in a consultative and advisory capacity to the ICO executive board and council on matters of concern to the world coffee industry.
Ireland has been a member of the International Coffee Organisation since 1975, consequent on our membership of the European Union. Article 133 of the treaty establishing the European Community requires that member states become members of international organisations of which the EU is a member. Our membership of the International Coffee Organisation is therefore necessary in accordance with this article.
The International Coffee Agreement is the vehicle by which the International Coffee Organisation operates. The 2001 agreement is the sixth such agreement and will be the fifth agreement to which Ireland is a party. Such agreements have generally lasted for a period of five years but have on occasion been extended for a further two to seven years. The 2001 agreement has a duration of six years with the possibility of being extended for a further two years. The main objectives of the International Coffee Agreement, 2001, are: to promote international co-operation on coffee matters; to encourage members to develop a sustainable coffee economy; to promote coffee consumption; to promote quality; to provide a forum for the private sector through the establishment of a private sector consultative board; to promote training and information programmes designed to assist the transfer of technology relevant to member countries; and to analyse and advise on the preparation of projects to the benefit of the world coffee economy.
Signatories to the agreement are required, among other things, to pursue tariff reductions on coffee or to take other action to remove obstacles to trade, to give due consideration to improve the living standards and working conditions of people engaged in the coffee sector and to dispense with regulations requiring the addition of products other than coffee for commercial resale as coffee and to endeavour to prohibit the sale and advertisement of products under the name of coffee if such products contain less than the equivalent of 95% green coffee as the basic raw material. It is perhaps worthwhile to note that in keeping with the latter, there is in the European Union a harmonised directive on coffee which prohibits the sale of coffee not meeting a minimum standard.
The administrative expenses of the International Coffee Organisation, in its operation of the agreement, are met by annual contributions by members based on their number of votes. Each member has five basic votes and the additional votes are in turn based on the amount of coffee exports or imports in the previous four years. Ireland, with nine votes, is required to contribute €11,542 for the year 2001-02.
Unlike previous agreements, which fell within shared competence - competence shared between the Commission and the member states - the 2001 agreement does not contain economic clauses in which the Commission has exclusive competence. This is in keeping with legal precedents, determined since the last coffee agreement was signed in 1994, and is similar to the arrangement under which the WTO operates. Normally, it would also mean that the Union could sign and ratify the agreement on behalf of the member states. However, because of practical difficulties in relation to apportionment of votes - with exclusive competence the Union could not hold more than 400 votes, while the member states' votes together amount to 840 - and uncertainty about whether the Union could be construed as a Government within the terms of the agreement, the European Council agreed, under Decision 2001 /877/EC, that, notwithstanding exclusive Union competence under the EC treaty, member states could also sign and ratify the agreement. This was a pragmatic solution to enable changes to be made to the agreement to facilitate Union membership without loss of voting power etc. The intention is that once the necessary changes are made to the agreement - member states are required under the terms of the Council decision to ensure that the provisions of the agreement which create operational difficulties for sole Union membership are amended within a year - member states will withdraw from membership to facilitate sole community membership. This would also mean in effect that the European Commission would bear the full costs of membership and member states would not be required to contribute.
Irish imports of coffee are small compared to other consumer member countries. Imports in 1999 were valued at £124.7 million, €31.3 million, with 48% in soluble form, 28% as raw coffee and 24% roasted. Our imports of soluble coffee come mainly from the United Kingdom, France, Germany and the Netherlands while our imports of raw coffee come mainly from Colombia, Papua New Guinea, Honduras, Costa Rica and Indonesia. In terms of employment, the coffee industry is not a significant employer in Ireland.
Membership of the International Coffee Agreement, 2001, affords Ireland the opportunity to demonstrate its readiness to support international measures to stabilise primary commodity prices and to reaffirm the importance which it attaches to eliminating the economic imbalance between developed and developing countries.
As an enthusiastic coffee consumer, I have a great interest in this agreement, particularly as it is my one true addiction that remains untainted by political correctness. I have no doubt there are killjoys around who will some day tell us that coffee is bad for us.
It is.
In addition to problems with nicotine these politically correct killjoys will try to stop me having caffeine also. I would become a very bad humoured person if that ever happened.
We must agree with the Minister of State on this issue. I am very interested to hear from the Minister of State a little more detail about the company's operations. For example, the Minister of State said that membership of this agreement "affords Ireland the opportunity to demonstrate its readiness to support international measures to stabilise primary commodity prices and to reaffirm the importance which it attaches to eliminating the economic imbalance between developed and developing countries." That is perfectly respectable. I note that Article 38 of the agreement deals with the question of established coffee trade channels and takes due account of the legitimate interests of the coffee trading industry. Article 39 requires member states to give due consideration to the sustainable management of coffee resources and processing. Article 40 requires member states to consider improving the standard of living and working conditions of populations engaged in the coffee sector.
Will the Minister circulate to the committee a report on what, if anything, the ICO has done over the past five years to have a measurable effect on the sustainability of the coffee economy and on the standards of living and working conditions of those involved? I ask the question on account of my interests in the campaign for fair and equitable trade and in sustainability in environmental policy. Coffee is a product within the ambit of those concerns. In a number of the producing countries party to this agreement coffee production forms a substantial sector of the economy. The way the sector is organised has an important influence on the complex issues we normally have in mind when we talk about environmental sustainability.
I know the Minister has another appointment so I will not ask him to expand on these issues now but I would appreciate it if he could circulate some report on what the countries of the agreement are doing in the coffee sector about established coffee trade channels, sustainability in the coffee economies and the standard of living and working conditions of people involved in the sector.
I welcome the Minister and am glad to see his interest in the food industry. What quantities of raw, processed and roasted coffee do we import? Will the Minister inform us on the human rights and political situations in the countries involved, Columbia, Papua New Guinea, Honduras, Costa Rica and Indonesia? Many of the countries involved are not democracies and they may be in breach of international agreements which we are signing on human rights. Those breaches are not in our interest as a democracy. The Opposition is in favour of signing the agreement but what are the advantages of signing it and what would be the consequence of our not signing it?
On the general issue of trade we have to decide whether particular Governments are satisfactory. We must recognise that even when unsatisfactory, the countries still have to trade if they are to feed their people. Sanctions have a role and we have enforced sanctions against certain countries, but their indiscriminate use can hurt those who most need help and they should be used sparingly. I agree that the question of commodity prices has become an issue between consumers and producers.
I will give a brief reply to some issues raised by Deputies Dukes and O'Keeffe and will provide a more detailed reply in writing. A study of this area showed that $11 million, about €11 million, was going into sea currencies. There have been four programmes in the sector. One was a study on coffee marketing systems and policies. That project evaluated marketing systems and policies and identified factors important for effective marketing, helping to guide developing countries in improving the marketing of their coffee. Those countries were Angola, Cameroon, the Congo, Ethiopia, Ghana, Guatemala, India, Madagascar and Togo. That programme was completed.
There are two programmes dealing with insects, pests and disease in coffee. These programmes are important to the growing countries because if disease or insect infestation cannot be controlled there will be no product. The fourth programme is the rehabilitation of the coffee sector in Honduras and Nicaragua. Following severe destruction by hurricane Mitch this project will help rebuild the coffee sector through replacing wet-processing capacity and damage or loss with cleaner technologies which are environmentally friendly and which will reduce water contamination. That project will cost $6.8 million.
I will provide a more comprehensive written reply. We should keep in mind that we are only contributing €11,000, less than £10,000, not exactly a fortune. If we are being asked to be sparing with cash we should not expect this particular agreement to change the world.
Is the Government happy with the human rights situation in those countries?
No, definitely not, but should we suspend all trade with countries whose human rights record we are not happy with? We would not have traded with the Soviet block if that was the case.
I asked about the advantages and disadvantages.
The Minister of State will send a written reply.
A written reply is no good to me.
Out of respect for the Minister and the realisation that he has another appointment, I will not break into an internal wrangle between the Government parties. It is fascinating.
I thank the Minister of State, his officials and the members who attended the meeting today.
I assure Deputy O'Keeffe that I would have given him more comprehensive answers if we had been able to start on time.
I take it the Minister is happy with the human rights situation in Connemara.