Competition (Amendment) Bill, 1994: Committee Stage.

I would like, on behalf of the Select Committee, to welcome the Minister and his officials for consideration of the Competition (Amendment) Bill, 1994.

The Bill has two principal aims, the introduction of public enforcement of the Competition Act, 1991 and the removal of all merger or take over agreements from section 4 of the Competition Act. The Bill also incorporates a limited number of technical amendments to existing legislation and empowers the Minister to fix fees for merger notifications. The primary method of enforcement of the 1991 Act up to now has been through private civil actions in the courts. The Competition Authority has no right of action under the 1991 Act. These enforcement provisions have proved to be less than fully effective. Aggrieved parties have been reluctant to go to court, largely because of the expense and the uncertainty involved.

The Bill proposes to strengthen the enforcement of the law by giving the Competition Authority the power to take court actions either on its own initiative or following complaints made by third parties. The Bill provides that the Minister may appoint a member to the Authority, to be known as the director of competition enforcement, who will have specific responsibility for enforcement matters on a day to day basis. The Bill also removes all mergers and takeovers from the scope of section 4 of the 1991 Act.

A system of control already exists for large scale merger and take over agreements which are notifiable to the Minister under the Mergers, Takeovers and Monopolies Control Act, 1978, as amended. In practice the 1991 Act had the effect of creating a system of dual notification, once to the Minister and once to the Authority, for the same transaction. This dual system has given rise to uncertainty. The Bill now removes that uncertainty and allows one stop shop clearance by the Minister. In addition, small scale mergers will no longer be notifiable to the Competition Authority under the 1991 Act.

While merger agreements will be removed from section 4 of the 1991 Act, a system of checks and controls has been retained in this area to safeguard competition. First, only the mergers agreement per se will be exempt from section 4. Any ancillary agreements which are not indispensable to the actual merger will still be subject to section 4. Secondly, the mergers will not be excluded from section 5 of the 1991 Act. Section 5 prohibits the abuse of a dominant position.

Large scale mergers will continue to be subject to approval by the Minister under separate mergers legislation. In the Bill, the Minister is also proposing to introduce fees for merger notifications. This is already the case for notifications to the Competition Authority. Finally, there are a number of sections which are intended to tidy up and clarify the 1978 Mergers Act and aspects of the 1991 Act.

Before we proceed we should agree on a schedule of business for today. I propose that we continue until 12.45 p.m., have a sos until 2 p.m. and resume until 4 p.m. Some Members may have some difficulty with that and if what is proposed is not suitable I will be flexible.

This meeting starts at 11 a.m. and another committee of which a number of us are Members is meeting at 11 a.m. I have made many requests that the two committees would not clash. You fixed this meeting for exactly the same time as the Committee of Public Accounts. I received a notice this morning saying that you have fixed a meeting of this committee to consider another Bill for 2.30 p.m. next Tuesday which is exactly the time when the Oireachtas Committee on Commercial State-sponsored Bodies meets, as it does every week at that time.

The Committee of Public Accounts and Oireachtas Committee on Commercial State-sponsored Bodies generally meet at a fixed time on a fixed day each week and, with the greatest respect, it is entirely unsatisfactory that this committee would choose to meet at exactly the same time on exactly the same days. Some of us have to try to service all of these committees, because we do not have enough Members. It is all right for very large parties where there is some overlapping, I see Members of those committees here, but it is impossible for a small party to service all committees. Deputy Rabbitte and I are on all three of those committees because our parties cannot arrange otherwise.

This Bill is complicated, it is not as simple and straightforward as the prepared statement which the Chairman has read out which, curiously, advocates support for the Bill where his position is surely a neutral one. There are many complications in it. I finally succeeded in getting hold of the Minister's amendments at about 6.45 p.m. last night after the greatest difficulty. There is no post in the morning now until a late hour so this is the first I have seen of the complete list of 55 amendments. Many of them are from the Minister. The list of amendments he put in is nearly as long as the Bill. There are four pages of amendments which are produced only weeks after the Bill was published. This shows clearly that the Minister and the Department are of the view that quite significant changes and additions need to be made. It is very hard for us to deal with these at very short notice.

We only saw the complete list 15 minutes ago so I urge that no effort be made to facilitate any kind of guillotine on this Bill. If it is not fully discussed, it will create more problems and there are some fundamental points at issue here.

The Second Stage debate was very unsatisfactory because it went on for about two hours and happened to coincide with a very important sporting event. There were few contributors and it was not possible to hold a division. It was not satisfactory, it is a Bill that needs much more consideration than it was possible to give it. I hope this debate will be open ended and that it will be able to go in to all these matters in detail. The early amendments are the more fundamental ones and will be much slower. The later ones are less important and I would urge that the fullest consideration be given particularly to the first 15 or so amendments.

Deputies Rabbitte and Burke have indicated that they wish to contribute. Could we have agreement on the time for today before we proceed? I will then try to respond to some of the points raised by Deputy O'Malley. I propose that we continue up to 12.45 p.m. and resume at 2 p.m. until 4 p.m. Is that agreed? Agreed.

On some of the points raised by Deputy O'Malley, in the setting up of the committee the position he mentioned was anticipated and for that reason provision was made for substitution. All parties on all sides of the House have used this to the full extent, putting in substitutes to represent them when the party spokesperson is not available. Unfortunately, the timing of a meeting depends on the availability of a suitable room and the availability of the Minister. If I were to wait until such time as everybody was in agreement we would never have consideration of any legislation. It is as simple as that.

In regard to my opening statement, this came about by agreement among the Whips that a statement should be read by the Chairman at the opening of each session. That is precisely what I have done. The Deputy can be sure that I will remain impartial during the course of this debate, as I have on previous occasions. Nobody can say that I have been partisan in my approach to consideration of any legislation. I am prepared to stand on my independent position. In regard to the guillotine, the consideration is whether or not the Whips will see fit. Legislation is referred to us and the ultimate decision as to whether or not a guillotine is to be applied will rest with the Whips. I have no intention of applying a guillotine unless I am instructed to do so and informed by the Whips office that business will have to be terminated. From my point of view I am prepared to give as much time as is required, any day of the week, including Sunday if necessary.

I have been requested to attend the meeting of the Committee of Public Accounts in order to make up a quorum, although amendment No. 1 to this Bill is in my name. The Committee of Public Accounts is the longest established committee of the House and it has met at a fixed time every week the last three Dáila. Following the establishment of the committee system, Members have requested before both the Committee of Public Accounts and other committees some kind of liaison regarding the scheduling of committee meetings. To date nothing has happened.

The Whip's office considers it a matter for the committees to arrange their business and that the Chairpersons should liaise with Members regarding scheduling arrangements. The situation today is made all the more outrageous given the appeal from the Committee of Public Accounts to Members of this committee to attend for the purposes of making up a quorum.

During consideration of the Ethics in Public Office Bill yesterday the Minister of State at the Department of Finance implied that there was an unwillingness on the part of Members to meet again today on the Bill, despite the fact that two other committees, involving an overlap of Members, are sitting. It was implied that Members were not prepared to work on the Bill today, although Members had commitments to the Competition (Amendment) Bill, 1994 being dealt with by this committee and to the Committee of Public Accounts.

Some action is required on this matter. It is not possible for those who are Members of a number of committees to continue to respond to the work load given the clash of fixtures between committees. I ask the Chairman to intervene in an attempt to improve the situation as there is little point in passing the buck to the Whip's office. The Whips have decided that given that committees are now in place, it is a matter for them to timetable their meetings. There must be liaison between the Chairpersons of the committees if the situation is not to be repeated.

I appreciate the Deputy's point. However, every sitting day the Dáil goes through a ritualistic dance on the Order of Business on the processing of legislation. Members ask on a daily basis when Bills will be circulated. We have been afforded an opportunity through the committee system to deal with Bills.

Matters have changed so much since the establishment of the Committee of Public Accounts that there must be flexibility on the part of all committees. In this respect it is not in order that due to seniority the Committee of Public Accounts has priority regarding Thursday sittings. Without wishing to become involved in a row between the Members of the committees, the issues of precedence must be resolved between the legislative committees and the Committee of Public Accounts.

I will endeavour to accommodate Members of the Committee of Public Accounts when possible. However, much also depends on the availability of the relevant Minister. Members must ask themselves if they want the legislation to proceed, and if not what is the point of requesting the introduction of legislation on a daily basis if, when it is presented, Members are not prepared to consider it?

Moving beyond the housekeeping arrangements of the committee and turning to the Bill I question the wisdom of proceeding, especially with the first 15 amendments or so, which are fundamental to the Bill, in view of representations Members have received from the Irish Small and Medium Enterprises Association, a body which represents companies directly affected by this legislation. The ISMEA believes that there are fundamental flaws in the legislation, and in the spirit of openness and consensus it would be wise from the viewpoint of the Department and the Minister to consult with the ISMEA prior to consideration of the Committee Stage of the Bill.

As a result of such consultations fundamental changes may have to be made to the legislation by the Minister. If the committee is attempting to produce the best legislation to help the economy, irrespective of party view, develop in a way which all Members wish, the widest discussion possible should take place on the legislation. In this respect the matter should be discussed in detail with the ISMEA and its members, as it is the group intimately involved in the legislation and directly affected by it, before we proceed.

Is that a proposal, Chairman?

It is not a proposal and I call on the Minister.

It is a matter for the committee to regulate its affairs. I am at its disposal and will make myself available when possible.

Some of the amendments I have tabled follow a case in the High Court on 24 June 1994 when the Attorney General suggested that some additional amendments be incorporated in the legislation. I mention this by way of indicating that my Department has not been tardy in bringing forward amendments. The Opposition has tabled 40 amendments. My Department has tabled 14 amendments, many of them of a drafting kind. There are 54 amendments and the breakdown is self evident from a perusal of the list.

I have spoken directly to Mr. Hynes and there has been a consultation between Mr. Hynes, Mr. Mulcahy and officials in my Department. On the issue of how fast the committee wishes to proceed with Committee Stage, I have no proposals for a guillotine or speedy processing of the legislation. It cannot be enacted until the Dáil resumes in the autumn. I am anxious to ensure that the committee deliberates in a constructive and positive manner and that there is no sense of haste in this debate.

The letter which Members of the committee received this morning from Mr. Hynes makes no reference to any discussions. It raises a number of questions regarding a small business impact assessment and whether this was undertaken, as recommended by the Task Force on small firms. The letter raises a number of points, with which the Minister is familiar, and indicates that the group requires them to be answered in a detailed way, rather than in any general type of discussion which the Minster may have had with Mr. Hynes and Mr. Mulcahy.

While the intention behind the legislation is good, there is a growing awareness that sections of the Bill will have an impact far beyond what was intended in its drafting. There may not be a guillotine and no intended rush, yet decisions will be made on specific amendments without having the global picture or the kind of briefing I received from the Irish Small and Medium Enterprises Association.

This is the first time so many people are coming in with last-minute comments and observations on a Bill, most of which are fundamental. One wonders whether, in the preparation stage, the Minister and his Department consulted with the trade unions, business organisations and others who would have an input to make. The intention to reform the Competition Act was flagged long ago, but it is extraordinary that key players in the competition area now have such fundamental points to make. Many of the points are persuasive.

The approach being adopted by the Minister in section 2, exempting mergers below a certain threshold from any vetting, is a pretty fundamental change in any person's language, and not to have consulted widely on it is surprising. This underlines the problem that this committee cannot call witnesses. It would be sensible at this stage to bring in some outside experts and hear why some of these proposals are causing difficulties, but that does not seem to be within our brief for some strange reason.

I raised this question with the Minister on Second Stage in reference to his statement as reported in column 978 of the Official Report of 28 June, where he said:

I very much welcome the positive reception the Bill has received from various representative bodies and from those involved in the operation of the legislation. I consider we have achieved a well balanced approach and improved on the existing legislation both in terms of policy direction and in terms of the practical operation of the law.

In column 999 of the Official Report of the same day I queried whether the Minister could tell us who were the outside bodies who had welcomed the Bill. The Minister did not deal with the point.

I made a suggestion.

From memory, Deputy O'Malley did suggest that the Ardee Chamber of Commerce may well have been to the forefront in welcoming the terms of the Bill. I concurred with that at the time but, with all due respect to the Ardee Chamber of Commerce, I do not regard it as being widely representative of the number of organisations which, as Deputy Bruton said, have put last minute submissions to us. I received the ISME submission this morning. I received a submission from the Incorporated Law Society which complained that it had only been given 24 hours to prepare its response. I have also received a submission from IBEC, and others from a number of individuals who are concerned with the issue.

While I am not imputing any lack of neutrality to the Chairman, the well prepared promotion for the Bill that he read into the record at the outset would not seem to be the widely held view outside. For that reason we should make haste slowly. If the Small and Medium Enterprises Association is so concerned about the impact of this Bill in the wider economy, we should pause for thought about some of the proposals in the Bill. As I understand it, the Minister was motivated by a wish to get on with the appointment of a director of enforcement. That was his main consideration and probably everybody would share it. However, there are other matters in the Bill that are of fairly major import, so I would like to see time for wider consultation.

On the point raised by Deputy Bruton, granted we cannot summon witnesses, but as part of our remit we can employ consultants. There is, however, a procedural difficulty about which there are differing opinions. If the committee wishes to adjourn until we clarify whether or not we can hear expert advice, I would be prepared to do so for 20 minutes. We should not be flippant about this. Deputy Bruton has raised a serious matter and while some Deputies may find it amusing, it is a serious business. I am taking it seriously and, for that reason, I am prepared to seek the necessary advice. If it is as important as members say, I do not see any point in being jocular about it.

I agree with the Chairman that it is a serious Bill so it is important that we get the balance right. I, also received documentation, including submissions, from various bodies. I received one from the ISME this morning but only read it hastily. I do not know how well-based are the complaints about lack of time. That submission makes about six different points in the first page. Whether they are genuine or not, I am not qualified to say. Some of them might be. The Minister might respond to that.

I would not want to rush the Bill through in an undemocratic way. Everybody should have an opportunity to make their case to us and to the Minister. At the same time, we cannot be obstructed in doing our business by any vocational association. Our job is to legislate and to consult as widely as possible. If an organisation has a genuine complaint I would support it, but if it does not then let us get on with the business. The Minister is in the best position to reply to my question.

It is unlikely that we will complete Committee Stage today but there will be ample opportunity for consultations in the interim before Report Stage. There will also be an opportunity for consultation on Report Stage by which time that sporting event will have concluded and so we will not have as many distractions. I would prefer to proceed at this point and I intend to do so.

In respect of the role of the Oireachtas, whether one is in Government or in Opposition, a Front Bencher or a back bencher, the principle is well established that as legislators we take submissions and lobbying from all types of groups but that on Committee Stage we proceed exclusively as legislators. The idea of witnesses participating on Committee Stage would be a major change in the constitutional structures within which this State has done business since 1922. I can understand why a committee would like to have access to expert witnesses. In that context, expert representation has frequently been made to the Joint Committee on European Union legislation.

As far as representations from ISME are concerned, I must inform Deputies that following the conversations I had by phone with Mr. Hynes, both Mr. Hynes and Mr. Mulcahy, at my suggestion, promised a detailed written submission would be sent to the Department for detailed discussion with officials. This was, in fact, not submitted but a short letter was received on 11 July 1994. The Bill was published and debated three to four weeks prior to that. There was a discussion subsequently on 12 July, the day after the letter was received, during which seven issues of concern were raised by ISME. I stress that I am under no pressure to fast-forward this legislation. I am entirely in the hands of the Chairman as to how to proceed. If the committee feels it should take extra time — the legislation cannot be enacted until the autumn — I am under no pressure to make speed either today or next week.

As Deputy Rabbitte rightly said, I consulted informally with Opposition spokespersons and told them, subject to their agreement, I would like to have all Stages completed solely so that we could have the enforcement member of the competition authority appointed. That did not meet with favour, and I fully respect the decision of the Opposition Deputies. If it is of any assistance to Members or to the Chairman, I am entirely at the disposal of the committee as to how quickly or slowly we should proceed with this legislation.