Competition (Amendment) Bill, 1994: Committee Stage (Resumed).

NEW SECTION.
Debate resumed on amendment No 3:
In page 2, before section 2, to insert the following new section:
2.(1) In this section—
‘agreement', ‘decision' and ‘concerted practice' mean, respectively, an agreement, decision and concerted practice of a kind described in section 4 (1) of the Principal Act;
‘certificate' means a certificate under section 4 (4) of the Principal Act;
‘licence' means a licence under section 4 (2) of the Principal Act.
(2) (a) An undertaking shall not
(i) enter into, or implement, an agreement, or
(ii) make or implement a decision, or
(iii) engage in a concerted practice.
(b) An undertaking that contravenes this subsection shall be guilty of an offence.
(c) In proceedings for an offence under this subsection, it shall be a good defence to prove that—
(i) the defendant did not know, nor, in all the circumstances of the case, could the defendant be reasonably expected to have known, that the effect of the agreement, decision or concerted practice concerned would be the prevention, restriction or distortion of competition in trade alleged in the proceedings, or
(ii) at all material times a licence or certificate was in force in respect of the agreement, decision or concerted practice concerned and, in the case of a licence—
(I) the terms and conditions of the licence were at all material times being complied with by the defendant, or
(II) subject to subsection (3) of this section, in case any terms or conditions of the licence were not being so complied with—
(A) those terms or conditions are terms or conditions that had been amended, or inserted in the licence, under section 8 of the Principal Act,
(B) the defendant was complying with the terms and conditions of the licence immediately before the making of such amendments or insertions, and
(C) the defendant began to take, within 14 days after the date of publication, in accordance with the said section 8, of notice of the amendment or insertion of terms or conditions aforesaid, all reasonable steps for the purposes of complying with those terms or conditions and was proceeding with due expedition on the date on which the offence is alleged to have been committed with the completion of any step remaining for those purposes,
or
(iii) subject to subsections (3) and (4) of this section, in the case of an agreement, decision or concerted practice in respect of which a licence or certificate has been granted and such a licence has been revoked or suspended or, as the case may be, such a certificate has been revoked, the defendant began to take, within 14 days after—
(I) in the case of the revocation of a licence or certificate, the date of publication, in accordance with section 8 of the Principal Act, of notice of such revocation, or
(II) in the case of the suspension of a licence, the date of the order of the High Court or, as may be appropriate, the Supreme Court providing for such suspension,
all reasonable steps for the purposes of ensuring that any arrangements that had been made and which were necessary for the implementation of the agreement or decision or, as the case may be, which constituted the concerted practice were discontinued and was proceeding with due expedition on the date on which the offence is alleged to have been committed with the completion of any step remaining for those purposes.
(3) The defence provided for by subparagraph (ii) (II) or, as the case may be, subparagraph (iii) of subsection (2) (c) of this section shall not be available to a defendant if the date on which the offence concerned is alleged to have been committed is more than 2 months after the date of publication of the notice concerned referred to in subclause (C) of the said subparagraph (ii) (II) or, as the case may be, clause (I) of the said subparagraph (iii) or, where appropriate, the date of the order concerned referred to in clause (II) of the said subparagraph (iii).
(4) The defence provided for by subsection (2) (c) (iii) of this section shall not be available to a defendant the doing of any act or the making of any omission by whom constituted the grounds for the revocation of the licence or certificate concerned.
(5) (a) An undertaking that is a party to an agreement, decision or concerted practice in respect of which a licence is in force shall comply with the terms and conditions of the licence.
(b) An undertaking that contravenes this subsection shall be guilty of an offence.
(c) Subject to subsection (6) of this section, where, in proceedings for an offence under this subsection, the terms or conditions of the licence which it is alleged were not complied with are terms or conditions that had been amended, or inserted in the licence, under section 8 of the Principal Act, it shall be a good defence to prove that—
(i) the defendant was complying with the terms and conditions of the licence immediately before the making of such amendments or insertions, and
(ii) the defendant began to take within 14 days after the date of publication, in accordance with the said section 8, of notice of the amendment or insertion of terms or conditions aforesaid, all reasonable steps for the purposes of complying with those terms or conditions and was proceeding with due expedition on the date on which the offence is alleged to have been committed with the completion of any step remaining for those purposes.
(6) The defence provided for by subsection (5) of this section shall not be available to a defendant if the date on which the offence concerned is alleged to have been committed is more than 2 months after the date of publication of the notice concerned referred to in paragraph (c) (ii) of that subsection.
(7) (a) An undertaking that acts in a manner prohibited by section 5 (1) of the Principal Act or which contravenes an order under section 14 of that Act shall be guilty of an offence.
(b) In proceedings for an offence under this subsection (being an offence which consists of the doing of an act in a manner prohibited by section 5 (1) of the Principal Act), it shall be a good defence to prove that—
(i) the said act was done in compliance with the provisions of an order under section 14 of the said Act ('the first-mentioned order'), or
(ii) subject to subsection (8) of this section, in case any of those provisions were not being complied with
(I) those provisions are provisions that had been amended, or inserted in the first-mentioned order, by another order under the said section 14 (‘the second-mentioned order'),
(II) the defendant was complying with the provisions of the first-mentioned order immediately before the commencement of the second-mentioned order, and
(III) the defendant began to take, within 14 days after the commencement of the second-mentioned order, all reasonable steps for the purposes of complying with the provisions so amended or inserted and was proceeding with due expedition on the date on which the offence is alleged to have been committed with the completion of any step remaining for those purposes,
or
(iii) subject to subsection (8) of this section, in case an order under section 14 of the said Act prohibited the continuance of the act concerned except on conditions specified in that order and that order has been revoked by another order under the said section 14 (‘the second-mentioned order'), the defendant began to take, within 14 days after the commencement of the second-mentioned order, all reasonable steps for the purposes of discontinuing the act concerned and was proceeding with due expedition on the date on which the offence is alleged to have been committed with the completion of any step remaining for those purposes.
(c) Subject to subsection (8) of this section, where, in proceedings for an offence under this subsection (being an offence which consists of the contravention of an order under section 14 of the Principal Act (‘the first-mentioned order')), the provisions of that order which it is alleged were not complied with are provisions that had been amended, or inserted in that order, by another order under the said section 14 ('the second-mentioned order'), it shall be a good defence to prove that—
(i) the defendant was complying with the provisions of the first-mentioned order immediately before the commencement of the second-mentioned order, and
(ii) the defendant began to take, within 14 days after the commencement of the second-mentioned order, all reasonable steps for the purposes of complying with the provisions so amended or inserted and was proceeding with due expedition on the date on which the offence is alleged to have been committed with the completion of any step remaining for those purposes.
(8) The defence provided for by subparagraph (ii) or (iii) of paragraph (b), or, as the case may be, by paragraph (c), of subsection (7) of this section shall not be available to a defendant if the date on which the offence concerned is alleged to have been committed is more than 2 months after the commencement of the order concerned secondly referred to in the said subparagraph (ii) or (iii) or the said paragraph (c), as the case may be.".
—(Minister for Enterprise and Employment)

I welcome the Minister and his officials and wish him and his colleagues in the Department, the Members present and the staff of the Houses of the Oireachtas a very happy new year.

At the request of Members I adjourned twice to allow them study this complicated Bill. They should bear in mind that we have discussed amendment No. 3 and avoid repetition but in order to deal with further amendments to amendment No. 3 it is proposed to regroup the amendments with those already discussed in the last session and then take them individually after the discussion. It is proposed to group the following for discussion: amendment No. 3, amendments Nos. a1 and 1 to 5, inclusive, thereto, amendment No. 4 and amendments Nos. 1 to 5, inclusive, thereto; amendments Nos. 5a, 8a and 9a; the proposal to delete sections 2 and 8 and amendment No. 16; amendments 13, 14 and 15; amendments 17, 21 and 22. All amendments not grouped will be discussed individually provided they are in order. Given that there are additional amendments has the Minister anything further to add before I call Deputies O'Malley and O'Rourke in that order?

May I clear up a few points before we start? Is the Green amendment sheet dated 30 November the most up to date sheet of amendments as there is no reference in it to amendment No. a1.

Additional amendments printed on a white sheet have been circulated to Members. Members will appreciate that the list of additional amendments has further complicated matters.

I have a report of the debate of 30 November but the committee met again in December, 18 or 19 December, and I do not have a copy of that report.

Effectively, that was a private session and we did not discuss the Bill on that occasion.

Deputy O'Malley is requesting the report of an earlier meeting during which we had a rather vigorous discussion for one hour.

I have a report dated 30 November.

That is the last one.

There was a later meeting.

At which no business was conducted.

The last Official Report of business under this heading was that of 30 November 1995, which has been circulated. The meeting held on 19 December 1995 was a private session, of which there is no report, because it does not concern this Bill.

The chairman mentioned the 30 November 1995 green sheet of amendments and that there was an additional list.

They are all included in the list circulated to Members. Because there are amendments to amendments to amendments, it is somewhat complicated but we will endeavour to tease them out as we proceed. Has the Minister anything to add to his amendment?

The essence of my amendment has already been explained. It provides a good defence in circumstances in which, say, someone's licence was being changed. Its purpose is as I outlined on the previous occasion.

We have regrouped the amendments for the purpose of discussing ministerial amendment No. 3. Additional amendments have been tabled since our last meeting. I am leaving it to Members to discuss amendment No. 3, on the grouping basis, after which we shall take each one separately for the purposes of decision.

We have also received submissions from the Incorporated Law Society, circulated to us by the Secretariat, which have a considerable bearing on the overall purpose of the Bill.

I understand the clerk has circulated them to Members.

Therefore, we are dealing with amendment No. 3 and the amendments thereto.

Including those in your name, Deputy O'Malley.

The amendments I tabled yesterday are substitutes for two I had tabled earlier rather than additional ones; their effect will be the same but they are better drafted.

I have no objection to this amendment, or the principle of the sections proposed to be inserted proposing the creation of offences in respect of breaches of competition rules. It also proposes the deletion of the existing section 2, to which I have no objection either, in principle, because it constitutes the right approach.

While welcoming what the Minister is endeavouring to do, I have doubts about the method proposed, in particular, about the ability of the provisions of this proposed new section to lead to a successful prosecution. It is not sufficient simply to enumerate what is declared illegal or civilly wrong in the 1991 Act and stipulate that henceforth each of those shall constitute a crime. The whole concept of a civil wrong is so different from a criminal wrong, it will be impossible to convict somebody of a criminal offence if such criminal offence simply constitutes the criminalisation of what, to date, has been deemed to be merely a civil wrong.

The example I gave on the last occasion is valid, when I pointed out the civil wrong of negligence most often manifested in the case of motor car accidents. For example, if a person has been negligent, knocks somebody down and injures them, he or she will have to pay damages to the victim but the fact that you injure somebody in circumstances which amount to civil negligence does not render you guilty of a crime. You may or may not be guilty of an offence but, if and when you are, such offence would arise under the provisions of the Road Traffic Act when you could be summoned in separate proceedings for dangerous, careless driving or whatever else. That is a specific offence, with which you will be charged, when you will be found guilty or not guilty, whereas you could never be charged with the offence of negligence. One reason is it would be impossible to convict anybody, the concept of criminal liability being too vague.

I tabled my amendments in an endeavour to overcome that difficulty and at an earlier meeting quoted at length from a number of articles written in the competition journal, drawing attention to this problem, incidentally, written before the draft of this amendment became available but when its principle was known. Those articles sought to illustrate that it was not adequate merely to criminalise an existing civil wrong declared under the 1991 Act.

To render it explicit I tabled a number of amendments to the Minister's amendment No. 3, the latter proposing the insertion of two very long sections, much longer than the whole original Bill. In tabling my amendments I endeavoured to render the offence somewhat more specific.

My objective is not to interfere with the principle of the Minster's endeavours but rather to strengthen them because I am advised — I understand it is virtually the universal view of all those who deal with these matters — that the Minister's amendment, as it stands, will not lead to any conviction.

My efforts to tighten it up consist of endeavouring to give specific powers to what I might broadly describe "the authorities" in relation to how this would operate in practice, I am endeavouring to find the original amendments.

They are on the green sheet dated 30 November 1995.

There is a separate group on a white sheet.

There are two separate white sheets comprised of substitute and additional amendments.

It is on page 5 of the green sheet. I am sorry for the confusion, but there is so much paper that it is difficult to find things. They are the original amendments tabled by me to make it necessary for a defendant or a potential defendant, on whom notice has been served, to take steps to comply with the requirements. The phrase "began to take", which is repeated five times, would make it impossible to convict somebody because, no matter what he did, he could say that he had begun to take the necessary steps. I am suggesting that the words "began to take" be deleted and substituted by the word "took". Then, if a defendant did not take the actual steps he would be guilty of an offence. Anybody could argue that he began to take steps, and the process of beginning to take steps could, if necessary, take five years. In civil law that might be all right, but in criminal law it must be shown that the defendant did or did not take the steps. It cannot be left open to him to say that he began to take steps. We could all plead that we are beginning to reform our lives, but whether we actually do it is a different matter. Anybody defending somebody charged with an offence for which one of the defences is that he began to take steps to comply with the law is on an absolute winner because it would be almost impossible not to be able to show that one began to take steps — if one did anything at all one could claim to have begun to take steps.

In additional amendment No. 2 (2) (a), I tried to define not just the broad concept of entering into or implementing an agreement, making or implementing a decision, or engaging in a concerted practice but where any one of these would result in:

(I) the fixing of prices for any goods or services at the same or substantially the same level:

(II) the unlawful division of any relevant market between undertakings competing at the same price level or substantially the same price level: or

(III) the unlawful restriction of supplies in any goods or services.

That amendment seeks to try to particularise or make more specific the types of things which are forbidden under (2) (a). What is forbidden under (2) (a), which is taken directly out of the 1991 Act, is fine as far as the civil law is concerned, but it is far too broad as far as the criminal law is concerned. That is why I suggest not that we delete what is in 2 (a) but that we explain it in a more precise way. The three commonest things done that should amount to an offence are: the fixing of prices by different people at the same level; the unlawful dividing up of a relevant market between them at the same price levels — this is what happens where a cartel meets privately and agrees to supply goods at a certain price way above the normal commercial price with a fair profit and that one person can have 30 per cent of the market, another 30 per cent and another two 20 per cent between them. Because the four collude to divide the market in that way they keep up the price and rig the market. The unlawful restriction of supplies of any goods or services is also common and is not an offence at the moment but it should be — this is where it is agreed by a cartel that they will not supply certain people with certain goods. Newspapers did this and perhaps still do. It occurs in the concrete industry where if people are selling concrete products below a certain level they cannot get supplies. It happens in various other industries, particularly those related to farming and the distribution of fertiliser. This is a serious criminal offence in other countries, but not here. The examples I have instanced are not exhaustive. I could have listed more, but I picked out the three most blatant instances of this type of activity.

It would not be possible to convict somebody under 2 (a) because it is too vague. There is almost no way someone can be convicted of engaging in a concerted practice because that could cover an enormous variety of things. We must have something more specific. I have looked at the American, Canadian and Japanese laws in relation to this. They are all drafted differently but they have greater precision. The American law, in particular, on these matters is 106 years old. The original Act whereby these activities were made a criminal offence for the first time, was passed in 1890. They have amended it umpteen times since for different purposes. I am trying to come up with something that is based on what they have done successfully. When this country are looking for a legal precedent abroad, we tend to look to Great Britain, but Britain does not have such a law. Many of the continental countries have, but their formal law is so different from ours that it is not much good to us as a precedent. Those most relevant to us are the American and Canadian laws. The activities I mentioned are serious offences in these countries many people are in jail at any given time for committing them. However, that is not the case here. I have specified the three most blatant instances of anti-competitive activity and my amendment is more specific than the provisions in 2 (a). I am not suggesting that 2 (a) be deleted but that this be added. This would help greatly to secure convictions.

The amendment is framed differently on the second additional list of amendments dated 10 January 1996. There is no power of arrest in the section as it stands and I propose that such a power be inserted. Only the common law power of arrest would arise and since the maximum penalty is two years imprisonment there is no common law power of arrest and that is a fatal weakness. There is a power of arrest in other countries where this operates. There must also be a right to interrogate although that does not mean the individual concerned must or will answer the questions. That is provided for in the law relating to these matters in all relevant countries.

The amendment states:

4. After subsection (5) to insert the following subsection:

"(6) (a) Where an offence under section 2 of this Act is suspected to have occurred, the Authority or an authorised officer or the Minister may apply to a Judge of the District Court for a warrant for the arrest by a member of the Garda Síochána of a person so suspected named in the said warrant.

(b) Where a member of the Garda Síochána arrests a person pursuant to such a warrant, that person may be taken to and detained in a Garda Síochána station for such period as is authorised by this section if the member of the Garda Síochána in question has reasonable grounds for believing that his detention is necessary for the proper investigation of the said offence.

There is no way to prove the offence without interrogating the person.

(c) The provisions of sections 4, 5 and 6 of the Criminal Justice Act, 1984, shall apply to an arrest under this section.

These sections allow a general power of arrest for felonies and the person can be kept in custody for up to two days but can only be questioned at particular intervals and cannot be questioned between midnight and 8 a.m. The person must be given a rest period after six hours. The rules relating to interrogation are set out in those three sections. Paragraph (d) states:

(d) A member of the Authority may be present during the questioning at a Garda Síochána station of any person arrested under this section and may, if requested to do so by the member of the Garda Síochána then in charge of the station, question such person.".

I inserted that because the technicalities of it are such that it would be almost impossible for a garda of whatever rank to effectively question a person arrested under this section. A member of the authority should be allowed to take part in the questioning if the person in charge of the Garda station so requests.

I am told that amendment No. 5 on the list dated 19 December 1995 which states:

5. After subsection (6), to insert the following subsection:

"(7) For the general purpose of the criminal law, an offence under section 2 of this Act shall be regarded, and have effect, as a felony.".

is not well drafted and I have substituted the following amendment:

5. After subsection (6), to insert the following subsection:

"(7) It is hereby declared that an offence under section 2* of this Act shall be a felony.".

The Minister does not specify the type of offence. If it is not a felony the power of arrest falls and the right to question is interfered with. If it is a felony there is an obligation on those who become aware of the facts to report them to the authorities. In common law one is obliged to report a felony but not obliged and does not commit an offence if he does not report something that is less than a felony. That is why it is important in this instance that there should be an obligation on those who become aware of these matters to report them.

The other amendment is No. 5a on the list dated 19 December 1995 which seeks to insert a new section as follows:

"2. — All evidence obtained by an authorised officer under section 21 of the Principal Act shall be admissible in evidence in summary proceedings or in a trial on indictment brought in respect of an offence under section 2 of this Act.".

An authorised officer of the Minister can be appointed to obtain evidence from a civil point of view under section 21 of the 1991 Act and this amendment is to allow whatever evidence he obtains to be given in evidence in a criminal prosecution. That was not specified in the 1991 Act.

I also propose in amendment No. 8a to insert: "expert evidence shall be admissible in a summary prosecution or in a trial on indictment for an offence under section 2". At present expert evidence is given freely in the courts in civil cases. One can call a doctor, accountant, economist and so on to give an expert opinion on a matter. That is accepted as a matter of course in civil proceedings but it is not accepted in criminal proceedings unless the Act establishing the offence states it. In this kind of offence it is essential that evidence be admissible. The effect of this activity is incomprehensible to the ordinary person unless an expert explains what is being done and why it is being done. If I steal £10 from you it is obvious to everyone that I have damaged you by unlawfully taking £10 from you and I commit the offence of larceny. However, if I engaged in a concerted practice against you, which is foreign to the Irish psyche, it could have a detrimental effect and cost you millions of pounds. It would be necessary to have an expert witness explain to a jury or court that you lost that amount of money and why the activity was unlawful.

It may be a potential as well as an actual loss.

That may be so. My final amendment in that group states that any documents or other records, electronic or written, found in the possession or under the control of a company or of any of its advisers, shall be admissible in evidence in a summary prosecution against both the body corporate or any of its directors, managers, secretaries or other officers who are prosecuted and there shall be a rebuttable presumption — in other words, they can rebut it — against those in control of a body corporate that they authorised such anti-competitive or otherwise illegal activity disclosed by such documentary evidence. From experience in other countries, until the law was changed, such people could say that the documents show that the company was involved in activities in which it should not have been — in other words, colluded with people, rigged the market and fixed prices — but even though they were directors of the company they were not aware of this and, therefore, cannot be convicted. There should be a rebuttable presumption that unless such people can prove they were not aware of such activity, it shall be assumed they were and, therefore, it is necessary to insert a provision to this effect in the legislation. Otherwise, even though there may be strong documentary evidence of serious illegal anti-competitive practice, it will not be possible to convict an individual unless the legislation provides for such a presumption.

I agree with the principle of the Minister's amendment, but I was disturbed to hear him say on the last occasion we dealt with this that even if there are not many convictions — I think he said at one stage that even if there are not any — the fact that the law is in place will act as a deterrent. With the greatest respect to the Minister, the fact that the law is in place will not act as a deterrent to the people who become involved in such activities. They will cheerfully continue with their activities in the knowledge that they will not be convicted. Therefore, it is necessary to insert the measures I propose in the Bill.

That was a lengthy and worthwhile explanation of a group of amendments.

We listened with interest to what Deputy O'Malley said and I freely admit that, as the creator of the 1991 Act, he not only wishes to make this a worthwhile Bill but to fill some of the lacunae that have arisen in respect of its operation. What he has just said is of great interest to the committee.

I wish to speak in general rather than specific terms. We are dealing with an attempt by the Minister to give teeth to something that was toothless. While that is noble and a good argument for putting forward the Bill, it is wrong to do so when the Minister has initiated a review of activities under the various competition, merger and monopolies Acts. As this is included in the Programme for Government, I am sure the Minister will proceed with it. The ideological shifts on a daily basis between the three partners in Government mean that one must put forward one's bona fides if one is to survive in a rainbow Government and this appears to be one of the bona fides that must be put forward by the Minister for Enterprise and Employment. We dealt with that matter at length at our first meeting.

Are we seeking to give proper teeth to the legislation or is this merely a cosmetic exercise? While the Minister's amendments are worthwhile, they are mainly cosmetic in that word will quickly get around that a person cannot be prosecuted under this measure and can, therefore, carry on with his or her nefarious activities. Deputy O'Malley seeks to give greater clarity and precision to the Minister's amendments. I do not know if they are precise, if they will result in many prosecutions or if they will have the necessary effect, but they are more precise and detailed than the Minister's amendment. However, I doubt if the measures put forward by either the Minister or Deputy O'Malley will, in effect, result in a greater number of prosecutions or if the legislation will have the necessary teeth.

This is a technical Bill, but if we do not proceed in a proper manner it will have far reaching effects on ordinary people. Technicalities that may result in certain measures not being implemented or the lack of a proper corpus of legislation in this area will touch the lives of ordinary people.

During Christmas I was visited by two people, one of whom, with the assistance of his family and four employees, is endeavouring to run a small concrete making business. He outlined examples of — to use Minister Lowry's famous term — a cosy cartel that is adversely affecting his business. I am sure the Minister is aware of this matter because the person concerned told me he supplied the Department of Enterprise and Employment with exhaustive evidence on the matter. I cannot give the person's name, but I will supply the Minister with the details later. This person works to high specifications and standards, yet he is going out of business. The customer base, which he painstakingly built up, is being gradually whittled away because the cosy cartel is telling those customers not to deal with this man because he is not in their group. He supplied me with convincing evidence in this regard. If this Bill does not have proper teeth it will not have the necessary effect for ordinary people.

Another area of concern relates to the supply of fertilisers and feeding stuffs where similar procedures are being adopted. The two people who visited me during Christmas supplied the Department of Agriculture, Food and Forestry with convincing evidence in this regard, but nothing has happened. They are now of the view that the cosy cartel is extending to Government Departments, but because I have faith in the Civil Service I disabused them of that notion.

At the same time I was presented with convincing evidence that a deaf ear was being turned to the activities of a cosy cartel to block the introduction of competition in the market which the big guns wanted to retain for themselves. That brings me back to where I started.

The Bill must have teeth. We indicated on the last occasion that it was not possible to convert a civil wrong to a criminal wrong. In his amendments Deputy O'Malley is seeking precision so that a person may be indicted on various offences. The amendments relate to the classification of crime, Garda activity including questioning, giving evidence and the admissibility of documents in evidence to ensure that a person cannot plead ignorance of what is taking place within any organisation or firm under his control.

I am not sure, however, if Deputy O'Malley in his worthy attempts will be able to pin this matter down. I would prefer if the expert group were given an opportunity to peruse both it and the practice in other countries, particularly Japan, Brazil and the United States, to advise us on best practice elsewhere. As that cannot be done, we have to make the best of what we have. I, therefore, support the amendments in which Deputy O'Malley is seeking greater clarity and precision.

I ask the Minister to address the issues I raised, namely, the supply of concrete and concrete products and the supply of farmyard fertilisers and feeding stuffs.

I acknowledge the role played by Deputy O'Malley and my colleague, Deputy O'Rourke, in this matter. I would also prefer if the expert group were given an opportunity to present proper proposals based on the experience in other jurisdictions. In this connection I agree with Deputy O'Malley who has highlighted the need for precision and would like to hear what the Minister has to say.

I would also like the Minister to comment on the submission of the company and commercial law committee of the Law Society which has expressed concern about the provisions of the Bill relating to criminal liability and is seeking clarity. It states that, in order to be effective, criminal sanctions must be related to behaviour clearly defined in the relevant legislation. It admits that, given the nature of the competition law, it is difficult for expert lawyers and economists to decide whether a particular agreement or action involves an infringement of competition law. It, therefore, strongly recommends that only the more serious and definable infringements should be criminalised. These include price fixing, market sharing, bid rigging, predatory pricing and tying arrangements by dominant companies, all of which have been dealt with in other jurisdictions. I am anxious to hear the Minister's comments on this matter.

I support Deputy O'Malley's amendment to section 3 (3) relating to expert evidence and agree with him. The point has been well made that, unlike civil cases, expert evidence may not be given in criminal proceedings. The Minister should address this matter.

I agree with Deputy O'Rourke that this Bill is a product of the three head Government. An attempt is being made to put legislation on the Statute Book for the sake of it. I cannot understand the reasoning behind this. Much of it is the result of the painstaking work done by other parties in Government, including my own and that of Deputy O'Malley. The Government has an opportunity to bring this matter to fruition. We are all on the same track to ensure we have good law and there are deterrents, but, based on the examples given by Deputy O'Rourke, the Minister is out of touch with reality. He should not depend on the UK experience, but consider best practice in other jurisdictions to ensure we have effective and precise legislation. He should take note of the points which have been made.

Deputy O'Malley, who has more expertise than I, dealt with the nitty-gritty of the Bill. I have no intention of covering the same ground, but cannot help commenting on the remark by the previous speaker that legislation is being presented by the three head Government for the sake of it. That is hard to accept when for the past few months we have had to listen to complaints that no legislation was being presented. Now, when legislation has been presented, we are told it has been introduced for all the wrong reasons.

There has been reference to the activities of cosy cartels. The problems of the meat industry in which I was involved for some considerable time did not arise on the day the Government took office.

Until Michael Lowry came along.

Many companies have gone out of business because of the activities of cosy cartels. The Minister will have my full support in ensuring the introduction of competition and if the Bill can be improved, I know he will do so. It is good that someone is making an effort to come to grips with the problems confronting the fertiliser and cement industries.

This legislation, which is both comprehensive and complex, is above the heads of ordinary legislators, but I welcome it nonetheless. I agree with my party's spokesperson, Deputy O'Rourke, who highlighted the activities of cosy cartels which operate not only in the fertiliser and cement industries, but also in the paper manufacturing and feeding stuffs industries. These activities include price fixing, market sharing, bid rigging, predatory pricing and tying arrangements by dominant companies. In this regard they come close to being a monopoly. It is almost impossible to break into the feeding stuffs market. It comes down to a question of making fat profits.

These activities take place mainly in the corporate area. For this reason people are nervous and most are not prepared to bring the matter to anyone's attention or go to court. Few people in small business, including the cement industry, are prepared to take time off to raise the issue with a politician and make their views known.

This Bill has been introduced as a result of the efforts of Deputy O'Malley, with whom I often disagree, Deputy O'Rourke and other Ministers. I note that the Minister made further amendments to the Bill on the advice of the Government which proposed its introduction having discovered the existence of cosy cartels.

I welcome the Bill and the statements here. I am not familiar with some of its provisions, but I am familiar with the equality issues under discussion which are relevant to our economy and the development of our agricultural industry. This morning's newspapers report that more concrete roads should be built, but we cannot afford to build them because of price constraints because of lack of competition in that area. This Bill is welcome if it assists in that regard and I support the views expressed by my party.

I have every confidence that the Minister will address the problems in this area which have developed over a long period, about which nothing has been done. Coming from an agricultural background and having been involved with a major co-operative in the north east region, I am aware that small businesses find it difficult to secure supplies and make deliveries to many areas. As the Minister stated on a number of occasions, small businesses play a major role in providing competition in areas in which the big players are not interested. In general small businesses are more tightly run——

They provide a personal service.

——usually family owned and have personal contact which the big players would like to stamp out. Small businesses also play a major role in job creation. While we seek investment from multinationals and big businesses, small businesses also have a role to play. It is unfair that they are not given as much attention as the big players and that matter should be addressed.

It is unfair that small businesses, because they are unable to negotiate the necessary credit facilities with the lending institutions, cannot extend a similar level of credit to customers as large players. More favourable lending terms should be extended to small businesses. Small and large businesses should be treated equally and given a fair chance. It is nonsensical to suggest that this problem has arisen only during the past nine to 12 months. If we go down that road, we will not address those deep-rooted problems that have existed for the past ten years and have not been considered, but I have every confidence they will be addressed by the Minister.

This Bill was drafted by the previous Government.

I hope, as Deputy Boylan said, that those problems will be addressed but I have grave doubts. Problems have arisen in the cement, fertiliser and seeds industries, particularly in the cement industry which has suffered serious job losses over the years. I have accompanied deputations from that industry to the Department during the past ten to 15 years and on many occasions I was disappointed with the lack of interest they received given that they represent an industry with substantial job creation potential and in which great efforts were made to retain existing jobs. It is questionable whether we can avoid the implementation of some type of price controls in such industries. If I recall correctly, Deputy O'Malley was Minister when price controls were withdrawn and I expressed a view then that such a measure could lead to higher prices. I was told that the operation of market forces would reduce the prices of products but the opposite occurred. While competition is important, it is also important that the interests of smaller players are considered as they play an important role in job creation.

I welcome this Bill and noted with interest Deputy O'Malley's submission.

We have had a useful and lengthy debate on this set of amendments and I am sure the Minister has the solutions to all the problems raised by Members.

I thank Members for their submissions and overall support for what we are seeking to achieve here. Several Deputies, including Deputy O'Rourke, highlighted particular abuses in sectors such as the cement and fertiliser industries. The purpose of the Bill is to introduce enforcement of competition law. Its enforcement is envisaged in two ways. The independent Competition Authority which has expertise in this area will have the power to take civil actions under section 6 to enforce the law and deal with either abuses of dominant position of the type described by Deputy Boylan or cartels of the type described by Deputy O'Rourke. It will also have the option of taking the criminal route in cases where it considers that is the only way to proceed. It would make the choice between the two bearing in mind the much more stringent proof requirements involved in taking the criminal as opposed to the civil route, but it may take both approaches. It is generally believed it is important that those two approaches may be taken. The civil approach may be the more common taken by the Competition Authority, but in cases of serious abuse it is important it has the scope to take the criminal route and the authority to impose the penalty of a fine or imprisonment. That is the thrust of the Bill and there is broad-based support for it.

Amendment No. 3 deals with criminal offences. In Amendments Nos. 1 to 5 Deputy O'Malley argues that where an amendment has been made to a licence, a person should have to have taken action within 14 days to deal with it but I believe that proposal is too stringent a test. Instead in the legislation we require that the person must have begun to have taken action within 14 days and that he or she must be proceeding with due expedition, but we also provide that the defence of having begun to take action would not be available after two months have elapsed. We are providing more latitude as to when such a defence would collapse, namely two months as opposed to 14 days as envisaged by Deputy O'Malley. That is a reasonable approach and it is correct that businesses should be given a reasonable time to dismantle anti-competitive activity if changes of the sort envisaged in these sections are being introduced. It is not true that any argument can be presented suggesting people are beginning to take action because after two months that argument falls and that defence ceases to be available to them. The Attorney General's office indicated that the wording that refers to the two months period is designed to minimise difficulties relating to the constitutionality of the provision.

The other major issue raised by Deputy O'Malley relates to his amendment No. a1. He makes the case that a specific list of offences as opposed to a general offence is required. He has argued that it is not correct to import civil offences into the criminal law. I am advised by the Attorney General's office that there is nothing wrong with criminalising certain civil offences, as we are providing for here. It is interesting to note that in the US, where the law in the competition area is regarded as exemplary, there are not specific offences in legislation but a general prohibition of the type we envisage. A series of precedents has evolved from court cases over time——

Guidelines have evolved from certain court cases.

——and certain activities become illegalper se. It would not be right to import a list of specific itemsper se into Irish law. What we need is a general ban of the type envisaged by section 4 which sets out a series of examples which are not exhaustive nor are they intended to be exhaustive. Similarly, in the criminal sanction that will derive from this, we will not be seeking to set an exhaustive list. Deputy O’Malley’s amendment seeks to confine criminal cases to three specific items. In framing criminal offences the courts, the Competition Authority and the Director of Public Prosecutions will be conscious of specific serious offences but it is not correct to pin down a specific list of offences. While the Law Society suggests some general areas it has not set out specific offences within those areas. I understand what Deputy O’Malley’s amendment is seeking to do but where he is seeking to fix prices there could be problems.

Trying to specify offences in legislation is fraught with difficulty and we would be better served by a general provision whereby offences would evolve from court decisions. It is important for the committee to remember that the legislation we have abandoned, for the competition legislation, was the restrictive prices order approach where Ministers sought to set out in specific detail precise criminal offences. It was extremely cumbersome and was not effective in dealing with competition problems. The Government and Deputy O'Malley rightly abandoned that approach in favour of articles 85 and 86, derived from competition law. Our competition law is non-exhaustive in the offences it creates. That was a deliberate decision by Government and is generally supported. It abandoned the idea of setting out a limited number of specific offences in favour of a general provision. Having taken advice on it, I disagree with Deputy O'Malley. I am convinced that the criminal offences created by what we are doing are perfectly robust. To seek to tie them down to a specific list is wrong.

Will the Minister comment on the Law Society's proposal that only specified areas should be criminalised? Its submission, to which the Minister referred, deals with price fixing, market share and so on.

That is essentially the same as Deputy O'Malley's approach.

Does the Minister disagree with its approach?

Yes. We should create a general ban similar to the ban in US law. Over time, individual cases will seek——

There is a strong vein of individual criminal liability which enables them to be precise.

Specific decisions set precedents. Specific decisions taken by our courts will also set precedents. The Law Society, despite its great——

Sorry, Minister, I wish to interject on this point. I am reluctant to go down this road because we are getting into a discussion on a submission made to the committee, which has only come to hand in the last few days. It was not advertised and was for the benefit of members. It would set a dangerous precedent if we were to enter into a discussion on a written submission made by one organisation, when we have had quite a number of submissions. That submission was circulated for the information of members and I ask them to bear that in mind.

What is meant by advertising it?

At a previous meeting of which I was Chairman, a ruling was made on that which was upheld by the Committee on Procedure and Privileges. That matter is under consideration. I am only pointing out, for the information of members, that the question of submissions to the committee is a matter for consideration by a subcommittee of the Committee on Procedure and Privileges. I do not want to create a precedent by entering into a discussion on one document circulated for the information of members.

I beg to differ with you on this point. This directly conforms with what Deputy O'Malley, as a member of this committee, has presented at some length. This is different from the normal submissions which you rightly say, would be dealt with by the Committee on Procedure and Privileges. It is very much in line with what Deputy O'Malley has said. If we did not refer to it at this stage we would miss the opportunity to refer to a valuable submission.

I wish to clarify that point as the Deputy may not have been present at the meeting early last year where I had to take a decision on another subject which I will not rehash. I do not wish — this is a decision I am making at this stage — given that that subject matter is being considered by a sub-committee of the Committee on Procedure and Privileges, to enter into a discussion on one submission to this committee which was submitted for the information of the members. If we were to discuss one document we would then have to discuss other documents which were submitted previously.

There is a way round this. We can put forward those views, if we wish, as our own.

That is correct. It is only for procedural purposes that I am pointing this out.

As I said in respect of Deputy O'Malley's amendment, not only would it be extremely difficult to frame watertight and intelligent legal definitions but it would also be an incorrect approach. The correct approach is the one we are adopting of providing the general prohibition as set out in section 4 which gives examples but it not exhaustive and does not seek to be exhaustive.

On the point made by the Chairman, which surprised me somewhat, about the submission from the Law Society, I drafted an amendment, No. a1, in the sheet dated 19 December 1995. Apparently the Law Society commented in a document dated 22 December 1995. The Chairman said it was submitted for the information of members of the committee. I do not know whether or not it was because I did not get it until yesterday. It strikes me as odd that the Law Society take the trouble to do these things and do not give them to be used by the people concerned in the committee.

The fact that the Law Society put forward a suggested amendment similar to the one tabled by me three days previously is a coincidence. Maybe the society copied my amendment and extended it.

Plagiarism.

I would resent any attempt to prevent a discussion on my amendment simply because the Law Society decided to take it on board.

The Law Society is not the world's greatest organisation in terms of managing matters and we should not let it interfere with our procedures just because it has made submissions. On the other hand, if Members want to refer to something in its document I do not see how they can be precluded from doing so.

I do not think the Minister has a problem with it either.

I accept Deputy O'Malley's point but I am sure he understands my point. I have no problem with Members referring to anything contained in any document but I do not want a discussion on a document which has not been advertised when other organisations with an opposite view have not been given an opportunity to put it forward. I have no problem with Members referring to the subject matter of a document but I do not want a discussion on it.

We can say that a certain group, whose members sometimes wear wigs, is in agreement.

I did not hear the Minister say he would accept some of my amendments and I am disappointed that he seems to be opposed to all of them. I made a strenuous effort over a period of six weeks to try to devise amendments which would improve the Bill and make it workable. The Minister has made a virtue out of the vagueness of the Bill. He referred to the alleged vagueness of the American law. I have that law with me and as the Minister was speaking I looked through it and it is anything but vague.

It is very precise.

The Minister said we should let the law evolve through court decisions. I am sick of listening to judges in the Four Courts complaining bitterly at the top of their voices that "the Oireachtas is neglecting its duty, the Oireachtas will not legislate on this, that and the other, the Oireachtas has a duty to do it and it should not be done in the Four Courts and it is being forced on us by the inaction of the Oireachtas". Some Members of the committee are trying to legislate with some precision but the Minister is saying we will not legislate, we will introduce a vague framework and leave it to the courts to decide what the law should be. If we do this we will be ducking our responsibility. We have an obligation to set out the law and what is an offence. If we leave it to the courts to decide what the law should be they will take the view that this is criminal law and they will not convict anyone unless the person's conduct specifically comes within the prohibition laid down by the Oireachtas. However, no conduct will come specifically within the prohibition laid down by the Oireachtas because the Oireachtas will not have been sufficiently precise about the matter. This is wrong.

The Minister made a virtue out of being what he terms "non-specific". He went on to say that in the past some of the specific orders made under the old restrictive practices code were not satisfactory. However, the fact is that they were satisfactory, even through they were for a different period. Thousands of convictions were secured under the different aspects of that code, particularly in regard to pricing. They were specific and that is why the convictions were obtained, even as far back as the war.

If the Minister wants an example of what is regarded as one of the more successful aspects of competition law or anti-restrictive practices law I would remind him of the one order under the old regime which is still in force, the 1987 Groceries Order. That order is regarded by most people as satisfactory and that is why I did not repeal it under the 1991 Act which contains a special provision which preserves it for the time being.

There was constant pressure to repeal the order.

I did not repeal it as it seemed to be working well. I was afraid that the 1991 Act would take some years to become fully embedded and effective and I thought there would be chaos in the trade if I repealed it. The 1987 Groceries Order is very specific and that is one of the reasons it is successful. It states that there shall not be under cost selling. There have been numerous prosecutions and cases in regard to under cost selling, which is a specific issue. One can prove under cost selling by comparing the invoices a trader gets from his supplier and the price tags or receipts for purchases in his shop — if one is lower than the other then there is under cost selling, which is an offence. A person found guilty of this offence is convicted. The issue is precise and specific and that is why the order works well.

There is also a prohibition on "hello money". This is welcome as "hello money" is an undesirable practice which operates particularly harshly against smaller indigenous manufacturers and suppliers. If a person is forced to pay "hello money" then one can prove it — the person either paid it or did not pay for it or the multiple concerned either looked for it or did not look for it. This is a specific offence, it is not vague.

The Minister made improvements to the Bill and we should not lose sight of the broader picture. The criminal aspect is only one aspect and the most important provision is section 6 which introduces public enforcement of the civil actions for anti-competitive practices. However, the Minister led himself astray when he introduced the criminal element, not because it is wrong — it is right in principle — but because it will be unenforceable. The Minister was very frank in what he said; he was not, as sometimes happens, trying to conceal his real intent. He said we would be non-specific as a matter of policy and leave it to the court to decide. It will take ten to 20 years before a corpus of jurisprudence is built up and every time there is a doubt the defendant will have to get the benefit of it, it is not like a civil case.

That is why I say with certainty and confidence that there will not be convictions under the legislation. The people who engage in these practices will know perfectly well that there will not be convictions and they will continue to engage in these practices. There are too many defences open to them and no rules of evidence are being introduced. The Minister did not deal with all my proposals in regard to evidence but he should have. I am very disappointed that he seems to be ruling out all my amendments. This is wrong and he should rethink the matter.

He is wrong in principle to say we will be non-specific. If the Minister was non-specific in some other aspect of criminal law, Dáil Éireann would tell him he was mad because it would know he would never get a conviction. The Minister must be specific in terms of criminal offences in this and other areas.

Many crimes, particularly violent crimes, are committed by uneducated people and those who are not highly intelligent. On the other hand, the type of people who commit these crimes are extremely well educated, intelligent and have access to the best and most expensive lawyers in the country.

They can pay for any advice they want.

This Bill is a charter which allows them to do what they like. The Minister is trying to convey to the public that we are bringing in criminal sanctions in long sections to the Bill, but we are leaving them vague and non-specific. We are hoping everyone will obey their spirit, although we know we will not get many convictions. The type of people concerned are not like the average criminal, who does not study criminal law. Those who want to break this law will study it line by line and word by word and get the best advice on how to circumvent it. The law must, therefore, be stringent and specific to prevent them circumventing it. The prize for them if they successfully circumvent it is to enrich themselves by millions of pounds. That is recognised throughout the European Union, North America and other parts of the world. We now have the opportunity to rectify the situation and we should avail of it rather than running away from it, which is wrong.

Has the Minister anything further to say because we must also move amendment No. a1?

The Minister did not deal with some of the other points raised, including those about felonies.

He did not deal with those relating to evidence.

Are we taking the other amendments with amendment No. 3?

They are grouped together for discussion.

As regards offences, section 4 provides that all agreements, concerted practices, etc., that have as their object or effect the prevention, restriction or distortion of competition in trading in any goods or service in the State are prohibited and void, including in particular, without prejudice, the generality of this subsection, directly or indirectly fixing purchase or selling prices, limiting control of production markets and investments, sharing markets, etc. These are specific examples which will transfer into criminal law. Concerted practices as defined by that section will be criminal offences. Do we go beyond that and try to pin down legal detail on what those offences will be? I have received advice that we should not do that as it would be an impossible task and that we are taking the correct approach. The Bill deals with price fixing as an offence; we are not denying that price fixing is an offence or refusing to define concerted practices but we are not seeking to be exhaustive.

As regards powers of arrest, the Deputy is seeking to change the provisions of criminal law in one Bill. There is an argument for looking at different powers and rules of evidence in relation to certain criminal offences, not only in the competition area but across a range of areas. It would not be proper for a particular Bill to seek, via miscellaneous provisions, to provide this type of change in the rules of evidence and the provisions for arrest in respect of a broader agenda of reform.

I did it in the Consumer Credit Bill, 1994, and the then Attorney General did not object.

The difficulty is that if we are imprecise in defining the new approach to be taken, we will undermine the criminalisation of these offences. We put in place the changes in criminal law, but admissibility of evidence and other issues should be dealt with under criminal evidence legislation. Criminal evidence legislation was introduced in 1992 and further legislation can be brought in to deal with these general issues which apply across a range of possible criminal offences in many areas, not only in the areas of competition. It would not be correct to seek, via a series of miscellaneous provisions, to change all the rules of evidence in court. This must be done by those who take the ambit of criminal law and criminal enforcement rather than through a specific Bill.

The Minister is wrong in this regard. He was a robust advocate of various points on the Consumer Credit Bill which I introduced. I accepted amendments tabled by him and by Deputy Rabbitte at the time. One related to the powers which should be given in specific cases of negligence. I said that criminal law should address this point rather than providing for it in specific legislation. I was not satisfied with the brief prepared for me on that occasion and I sought advice from the then Attorney General. This enabled me to accept the amendment which sought to extend the powers which are now proposed under the amendment to this Bill.

I do not accept the point — it suggests that Departments are shrugging off their responsibility — that we should leave this issue until the criminal law legislation is amended. It does not matter if I am wrong because I am entitled to put forward my point of view. I do not like being told that I am right or wrong by civil servants. I am right when I say that Departments are shrugging off their responsibility by waiting until the Department of Justice introduces general measures in this regard which will apply to all Departments. Why can the Minister not take this step?

I am worried about this Bill. I do not doubt the Minister's sincerity. I worked with him in Opposition and in Government. He is assiduous and diligent. However, he is badly advised on this Bill. It is too general and the word is already out that it can be evaded and that it will not be possible to implement it. Not alone is it toothless, it does not have bite.

The Bill demands detailed, not general, provisions.

It is based on an EU directive. As Minister, when I received the consumer credit directive from Deputy O'Malley, rather than seeing it as an enabling measure I sought to give it teeth and precision and the legislation putting it into effect has turned out to be good. I sought and gladly accepted amendments when I thought the Bill could be improved.

The Minister should not throw out everything and wait for precedent to set the law. This is not good practice. The Judiciary will have enough of a task to establish, gather and run with the precedent. If this Bill is to have any meaning, it must contain precise detailed measures, not just with regard to enforceability, which the Minister is seeking, but to the designation of a felony, the Garda activity which may result from such a felony, items which will be admissible in evidence and preventing individuals within a firm from avoiding culpability; amendment No. 3 to amendment No. 4 deals with the last point.

One of the bedrocks of American legislation in this area is that it has made it possible to identify the culpability of individuals and recognises that the possibility of individual criminal liability is a key aspect of deterrent effect.

The weight of votes will tell its tale but surely the purpose of a committee system is to seek, in a non-adversarial way, to improve legislation through common sense, debate and amendments. However, this is not happening in the case of this Bill.

If the Minister wishes to respond he should do so now. We have not completed discussion of even one amendment. We have had two sessions on this Bill and a wide-ranging discussion.

We are taking ten amendments together, some of which are the most detailed of all the amendments.

That is why I am allowing the maximum amount of discussion. I hope we can bring your amendment to a conclusion by either the Minister accepting it or you moving it.

The Minister is either being mischievous — I do not think he is because that is not his style — or he does not understand the import of what is involved. I am profoundly disappointed because this means we will pass legislation which is wrong. He dealt in a most extraordinary way with the evidential amendments I tabled. He said it is not appropriate in a Bill like this — he described it as a miscellaneous provisions Bill but it only deals with competition — to change the rules of evidence in criminal cases. We are not asking him or the Oireachtas to do this. We are simply asking that these rules be not changed but established for the prosecution of these cases because it is far more difficult to achieve convictions in them than in cases involving offences such as dangerous driving, larceny or assault where the issues are relatively black and white, where defendants will not make a song and dance and be defended by a rake of specialist lawyers and where gains of hundreds of thousands or millions of pounds for them are not at stake.

We are not proposing that the general law of criminal evidence be changed. We are only proposing change with regard to offences under this Bill. I suggest that they be treated as a felonies but I am not proposing that we make every offence under the criminal law a felony. The concept of felony has existed for hundreds of years. It is necessary to apply it to these offences so that the consequences of them being serious are followed through. The Minister is mistaken if he believes we are trying to apply this concept to the whole criminal law.

We must provide for the power of arrest; we are wasting our time if we do not. Under the Bill as drafted there is no such power. A power of arrest is not imported into it by the general criminal law. Under the Criminal Justice Act, 1984, a power of arrest without warrant arises only if there is a penalty of five years or more. The Minister says I am seeking to import changes into the general criminal law through this amendment but I am doing the opposite. Amendment No. 4(c) states: "The provisions of sections 4, 5, and 6 of the Criminal Justice Act, 1984, shall apply to this section."

I am seeking to apply to this Bill specific powers which already exist in the general criminal law. Unless they are applied specifically by legislation, they apply only to offences carrying penalties of five years or more. To enable powers of arrest and questioning in the case of offences under this Bill we need to specifically provide for these powers. Under the amendment these powers would apply only to arrests under this section. They are already part of the general criminal law but need to be applied specifically to this section.

The Minister said we do not need provisions on procedure. I have two pages of a list of American Acts amending the Sherman Act, 1890. They nearly all dealt with procedure and evidence. The Anti-Trust Procedures and Penalties Act, 1974, which is known as the Tunney Act, is a long Act which deals only with procedures and penalties. The Anti-Trust Improvement Act was passed in 1976. Thus, only two years after the Tunney Act the procedures again had to be improved because people who were guilty were able to get away with offences. On 2 November 1994 another in a long line of these Acts was passed; this was the International Anti-Trust Enforcement Assistance Act, 1994. The law on procedure and penalties again had to be changed to ensure that people who commit these offences are caught and convicted. Nearly all the Acts amending the original Act dealt not with the substance of the law, which is clear, but with how procedures could be changed to ensure that offenders would not wriggle out of the law.

In the US and other countries the people who go to jail are those who engage in restrictive and anti-competitive practices, price and bid rigging and other activities. In this country those who engage in these practices are never imprisoned. However, their victims, who are cleaned out, go to jail. A man came to see me recently——

We all had these visitors over Christmas.

This is much more important than people think and those affected by it realise its importance. This man was put out of business three times his commercial career, each time by a cartel who refused to supply him.

He would not go away. One of the more respectable companies in this country offered him large sums of money to go away and he would not. There is now a warrant for his arrest because he is bankrupt and they want to put him in jail. In another country, it is not he who would be in jail but those who put him in that position. That is one of the reasons this country is so uncompetitive and has such unemployment problems.

I am satisfied the Minister is wrong. There is no party political bonus in this for me or, I am sure, for Deputy O'Rourke or anyone. We just want to get it right. This will not be right and we must get it right. I have now done what I can and I cannot push the matter any further.

I have sought to express what I felt in consumer terms at the beginning of this debate and I am glad that the technical expertise and the consumer issue have come together on one point, that it is the proverbial quintessential small man, who will be affected. If this Bill is a good one, he or she will be well served. If this Bill has no teeth and cannot be enforced, he or she will be ill served, the delay in breaking monopolies, cosy cartels, etc., will be longer and the chances of succeeding will be lessened.

Ireland is a small country and cosy cartels have a chance to flourish. Everybody knows everybody. Things are done and condoned and things happen which are addressed in a larger society. We can be precise in this Bill and we can have a chance to do it.

We are not seeking to be party political but the Bill would be better served by being precise. We are moving from a situation when all the price arrangements were left to the grocery orders. When all those other orders were demolished the idea was that the great open market would find its level and price rigging would disappear. That did not happen. We seek to bring back a precision whereby there can be a clear path for those who have been called to account for what they have done in the field of commercial activity rather than wait many years until precedent is created.

It struck me that the Minister was trying to make this a framework Bill when what we are seeking to do is to put all the pieces of the jigsaw into that framework which will enable the Bill to be enforceable. The terms do not suit framework legislation. The situation is crying out for precision while what we are getting is a broad framework.

This has been a useful discussion. I, too, have no doubt that the Minister is endeavouring to produce a good Bill and useful work by his predecessors has gone into it.

For a Government which has produced useful legislation with regard to parliamentarians, ethics in Government and good practice in society in general, such as freedom of information, compellability of witness and other Bills, this is an opportunity to ensure good practice in the business sector, fair play, the protection of the small business person, as Deputy O'Rourke said, and that monopolies do not dominate. It is a good Bill but it is clear the Minister's advice on this section is not adequate.

Deputy O'Malley and others made the point that the criminal law should apply to the cases referred to here. The Minister should not take the option of criminal evidence legislation, he appears to have said that we should fall back on a general mechanism. I ask him to go back to the Attorney General on this specific issue.

My experience of the committee system has been that Ministers listen to reasoned and reasonable arguments. The arguments today are reasoned and reasonable, they come from the same direction. I ask the Minister not to push his case at this time. He would be sending the wrong signal to the business community and the consumer and he clearly does not want to do that. From what I heard today, I am not convinced by what the Minister is putting forward, i.e. that we deal with this issue in a general way and be non-specific. That does not make sense. I ask the Minister, as suggested by Deputy O'Malley and others, to be specific and tie down what this whole area of criminal activity entails with regard to this Bill.

I have come this route in the same way as other Deputies seeking workable legislation. Achieving workability in criminal law in the competition area is notoriously difficult but I have taken careful advice, from internal and external legal advice to the Government, which is that we should not go the route of seeking to define limited offences in detail. Instead, we should have section 4 offences which include price fixing and the specific more limited list that Deputy O'Malley put forward. These are included as criminal offences under that section but we are not seeking to be exhaustive in the list.

The criminal offence we are creating here would be a misdemeanour, not a felony, as would apply in the case of murder, which Deputy O'Malley is putting forward. We are defining the criminal offence in relation to competition law as in other commercial law as a misdemeanour rather than a felony. I think that is a correct and defensible position.

To steal £1 is a felony.

The Deputy raises the issue as to whether the arrestability should be there. It must be borne in mind that these are powers of authorised officers and that under this legislation it is an offence not to co-operate with an authorised officer. That is an important point.

The Deputy also puts forward certain changes in rules in relation to admissible evidence, that certain evidence would be held against a person in this criminal case unless they succeeded in successfully rebutting it. That is a new approach which would be introduced to our criminal law and, in respect of this legislation, it would be a mistake to produce changes that are rightly common to many areas of criminal law. If we are to make changes to the rules of evidence in relation to criminal law, they should not be made only under competition but on the broader plain.

They relate only to competition law and there is no question of making them general.

We do not want to make them general. This is to shrug off departmental and individual ministerial responsibility.

I have sought legal advice on this from the Attorney General and have been advised that it would be wrong to approach it in this way and it could even risk the constitutionality of the criminal procedures that we will put in place if we took the route being suggested.

Before we adjourn will the Deputy formally move amendment No. a1?

I move amendment No. a1 to amendment No. 3:

In subsection (2) (a) (iii) after "practice" to insert the following:

", where this would result in —

(I) the fixing of prices for any goods or services at the same or substantially the same level:

(II) the unlawful division of any relevant market between undertakings competing at the same price level or substantially the same price level: or

(III) the unlawful restriction of supplies in any goods or services".

The first notification we received stated that if the committee had not completed its business today it would resume tomorrow.

That is an option.

I do not have that option.

We can decide on that later.

Sitting suspended at 1 o’clock and resumed at 2.30 p.m.

Is Deputy O'Malley pressing his amendment a1. to amendment No. 3?

Question, "That the amendment to the amendment be made", put.
The Select Committee divided: Tá, 9 ; Níl, 12.

Tá.

Byrne, Hugh.

Kitt, Tom.

Leonard, Jimmy.

Nolan, M.J.

Ó Cuiv, Éamon.

O'Keeffe, Ned.

O'Malley, Desmond J.

O'Rourke, Mary.

Power, Sean.

Níl.

Bell, Michael.

Crawford Seymour.

Boylan, Andrew.

Creed, Michael.

Broughan, Tommy.

McGinley, Dinny.

Bruton, Richard.

McGrath, Paul.

Byrne, Eric.

Penrose, Willie.

Costello, Joe.

Sheehan, P.J.

Question declared lost.

I move amendment No. 1 to amendment No. 3:

In subsection (2) (c) (iii), to delete "began to take" and substitute "took".

In moving this amendment, I express my regret that the Minister has not seen fit to make any effort to meet these points, even though the arguments are clearly overwhelming, not just on this amendment but on the last and on those that are to come. Some of the statements the Minister has made are erroneous, although I am sure he made them in good faith. If his amendment goes through in the form in which it is drafted without some effort to bring in rules of evidence relating to it, it simply will not work. I invite the Minister, even at this stage, to try to come some of the way towards accepting my amendment because it is clear that the argument is overwhelming.

We will get into a procedural wrangle if we go down this road. The amendments to the amendment were discussed as a group and we had adequate time to make all the points which have been well made.

But not heeded.

I must now ask the Deputy if he is pressing amendment No. 1.

Question, "That the amendment to the amendment be made," put.
The Select Committee divided: Tá, 10; Níl, 12.

Byrne, Hugh.

Ó Cuív, Éamon.

Fox, Mildred.

O'Keeffe, Ned.

Kitt, Tom.

O'Malley, Desmond J.

Leonard, Jimmy.

O'Rourke, Mary.

Nolan, M.J.

Power, Seán.

Níl

Bell, Michael.

Crawford, Seymour.

Boylan, Andrew.

Creed, Michael.

Broughan, Tommy.

McGinley, Dinny.

Bruton, Richard.

McGrath, Paul.

Byrne, Eric.

Penrose, Willie.

Costello, Joe.

Sheehan, P.J.

Question declared lost.

We will deal with amendment No. 2 in the name of Deputy O'Malley.

I move amendment No. 2 to amendment No. 3:

In subsection (5) (c) (ii), to delete "began to take" and substitute "took".

As this is exactly the same, in terms of wording, as the previous amendment, I do not propose to press it. However, it is very unsatisfactory that the Minister did not attempt to meet these amendments, in respect of which a detailed argument was made.

Amendment, by leave, withdrawn.
Amendments Nos. 3 to 5, inclusive, to amendment No. 3 not moved.
Amendment No 3 agreed to.
NEW SECTION.

I move amendment No. 4:

In page 2, before section 2, to insert the following new section:

3.— (1) An undertaking guilty of an offence under section 2* of this Act shall be liable—

(a) on summary conviction—

(i) to a fine not exceeding £1,500, or

(ii) in the case of an individual, to such a fine or, at the discretion of the court, to imprisonment for a term not exceeding 6 months or to both such fine and such imprisonment,

(b) on conviction on indictment —

(i) to a fine not exceeding whichever of the following amounts is the greater, namely, £1,000,000 or 10 per cent of the turnover of the undertaking in the financial year ending in the 12 months prior to the conviction, or

(ii) in the case of an individual, to a fine not exceeding whichever of the following amounts is the greater, namely, £1,000,000 or 10 per cent of the turnover of the individual in the financial year ending in the 12 months prior to the conviction or, at the discretion of the court, to imprisonment for a term not exceeding 2 years or to both such fine and such imprisonment.

(2) If the contravention in respect of which an undertaking is convicted in summary proceedings of an offence under section 2* of this Act is continued after the conviction, the undertaking shall be guilty of a further offence on every day on which the contravention continues and for each such offence the undertaking shall be liable, on summary conviction, to a fine not exceeding £1,500.

(3) (a) Where a court imposes a fine or affirms or varies a fine imposed by another court for an offence under section 2* of this Act in proceedings brought by the Authority, it shall, on the application of the Authority (made before the time of such imposition, affirmation or variation), provide by order for the payment of the amount of the fine to the Authority and such payment may be enforced by the Authority as if the payment were due to it on foot of a decree or order made by the court in civil proceedings.

(b) The amount of any fine paid to, or recovered by, the Authority under this subsection shall be disposed of by it in such manner as the Minister for Finance directs.

(4) (a) Where an offence under section 2* of this Act has been committed by a body corporate and is proved to have been committed with the consent or connivance of or to be attributable to any neglect on the part of a person being a director, manager, secretary or other similar officer of the body corporate, or a person who was purporting to act in any such capacity, that person as well as the body corporate shall be guilty of an offence and shall be liable to be proceeded against and punished as if he or she were guilty of the first-mentioned offence.

(b) Where the affairs of a body corporate are managed by its members, this subsection shall apply in relation to the acts or defaults of a member in connection with his or her functions of management as if he or she were a director of the body corporate.

(5) The Authority or an authorised officer appointed under section 20 of the Principal Act may carry out an investigation into any contravention of subsection (2), (5) or (7) of section 2* of this Act that the Authority or the authorised officer suspects has occurred or is occurring.

(6) (a) Summary proceedings for an offence under section 2 of this Act may be brought by the Minister or the Authority.

(b) An action under section 6 of the Principal Act may be brought whether or not there has been a prosecution for an offence under section 2* of this Act in relation to the matter concerned and such an action shall not prejudice the initiation of a prosecution for any such offence.

(7) In this section ‘turnover' does not include any payment in respect of value-added tax on sales or the provision of services or in respect of duty of excise.".

I move amendment No. 1 to amendment No. 4:

In subsection (1) (b) (i), to delete "£1,000,000 or 10 per cent" and substitute "£3,000,000" or 20 per cent".

This amendment proposes to delete from subsection (1) (b) (ii) of amendment No. 4 the figures "£1,000,000 or 10 per cent" of turnover for conviction on indictment. The penalties proposed are somewhat academic because I do not envisage anyone being convicted on indictment. I do not envisage a jury convicting a person under this or the previous section. However, if a person is convicted he or she should be open to a meaningful penalty and a penalty of £1 million or 10 per cent of turnover is not meaningful in this context. To the best of my knowledge, a fine has been imposed for anti-competitive practices on only one Irish company. The European Commission fined Cement Road-stone Holdings plc for certain activities in the cement market.

It would want to check up on it again.

That fine, which was imposed approximately two years ago, amounted to 3 million ecu, or £2 million to £2.5 million. It was regarded as derisory and was not an impediment to the company. The level of fine imposed within the European Union for such activities is usually much higher. For example, fines of 3 million and 350 million ecu have been imposed on an association of companies operating as a cartel and, when all the circumstances were taken into account, many doubted if those fines were adequate.

The Minister may say that £1 million is not the maximum fine because a fine of 10 per cent of turnover can be imposed. However, the legislation does not provide for the imposition of a fine of 10 per cent of the group's turnover, rather it provides for the imposition of a fine of 10 per cent of the turnover of the company — which may be a small company — within the group convicted of the offence.

The group could arrange its affairs, and often does, in other countries, to ensure that the offence is committed by a very small company, with a very small turnover, for which a figure of 10 per cent of turnover would be laughable. If a subsidiary is convicted, the fine should pertain to the turnover of the group as a whole and should not be confined to 10 per cent of the turnover of what may be a small company within the group. Neither should the fine be confined to the sum of £1 million.

When the amendment was tabled I proposed the substitution of a figure of £3 million or 20 per cent of turnover. However, having regard to what I have heard since then, I doubt if the figure of £3 million or 20 per cent of turnover is adequate, but it would be a major improvement on the figure proposed by the Minister. The figure of £1,500 for summary conviction is derisory, a joke, but nothing can be done about it because the District Court is adjudged not to have jurisdiction to impose a higher fine. That is ridiculous. It also includes the possibility of imprisonment for a period not exceeding six months. If a court has jurisdiction to imprison a person for six or 12 months, it is ridiculous that it cannot impose a fine of more than £1,500.

We are dealing with companies with a turnover of £600 million to £900 million and annual profits of £100 million. If they can make an additional £20 million to £30 million in a year, as some of them can, by engaging in anti-competitive practices, cartels or other illegal activities either in this country, elsewhere in the European Union or outside it, what skin is off their nose if they are fined £1 million? That is a derisory penalty; it is like saying to someone who steals £1 million, he will be prosecuted and fined £50,000 under the relevant section. He would make a profit of £950,000 each time he stole £1 million. There should not be a limit on the fine.

This is in contrast with the position in the United States where individuals tend to be sentenced to a term of imprisonment, up to five to six years, and where damages are assessed and multiplied by three as a punitive measure and to discourage this activity. By providing for such a small fine we are encouraging people to act improperly. This Bill is an indication to the companies and individuals who engage in these practices which are considered criminal in other parts of the world, that the official attitude in Ireland is that we have been forced by public opinion and some within the Oireachtas to criminalise their activities although we do not disapprove of them, that we will provide them with all the defences they want to ensure they will not be convicted and, if by some ill-chance they are convicted, the maximum penalties that may be imposed are minimal, will not cause them any inconvenience and amount to only a small fraction of their ill-gotten gains.

There is no point referring to the imprisonment provisions as they do not arise in the case of companies. In view of the defences provided for, it will be almost impossible to convict an individual. The Minister should, at the very least, accept the figures I am suggesting.

The third of this series of amendments suggests the insertion in subsection (1) (b) (ii) after the word "individual" where it secondly occurs in the fourth line the words "or of any body corporate or company he controls which is guilty of a corresponding offence under section 2". Its purpose is to cover the group as a whole; otherwise, the offence will be committed in a company specially formed for that purpose. The individual will ensure it is committed in a company with a low turnover.

The figure of 20 per cent should relate not only to the individual or company, but also to any body corporate or company which he controls which is guilty of a corresponding offence under section 2. The easiest way to do this is to state that the figure of 20 per cent relates to the group's turnover, but I am unable to draft the amendment in that way. The purpose is to ensure that the penalty relates to the group as a whole and not just one small company.

Or an invented company.

We are not talking here about a case where it is discovered a year or two later that an individual has committed an offence; this is an area where people set out to commit an offence. They plan for a year in advance with plenty of legal and financial advice and will form a company or companies for the purpose of committing it. That is the reason the imposition of the penalty needs to be broader than that envisaged in subsection (1) (b) (ii).

The second of this series of amendments is related to the first and proposes the same change in the second of the two subparagraphs where the figures are mentioned. The penalties are derisory. There is no point in instituting proceedings in the District Court where a fine of £1,500 only may be imposed.

I do not know whether the Minister realises this, but the offences envisaged entail improper profits of many millions of pounds. In several recent cases dealt with by the European Commission the profits which accrued as a result of the malpractices amounted to hundreds of millions of pounds. The profits in some of the cases involving Irish companies, I am sure, amounted to many millions of pounds.

The Minister seems to have a difficulty. He does not think these practices are wrong. That is his biggest problem. It has recently come to light that certain sectors in this country are full of what are known as fighting companies which are defined in competition law as companies in a particular sector owned and controlled by the dominant company in the sector, which nominally appear to be independent, but which are operating under the aegis and direction of the dominant company. There is one sector at least where it is doubtful if there is any independent company of any worthwhile size left. Each one of them has been taken over by the dominant company either legally and openly or, where it felt it had already acquired too much, as a fighting company.

Such companies do not appear nominally to be independent, but are owned and directed by the dominant companies. Where dominant companies control all such companies, particularly fighting companies, they are able to rig prices. When an individual competitor appears in a particular location, as happens from time to time, such dominant companies direct their subsidiaries and fighting companies to price the competitor out of the market by undercutting it so heavily for whatever period is necessary, thereby ensuring it does not survive.

I do not want to openly mention names at this committee, but if the Minister wishes I can give him details of this type of activity, of which I am sure he is aware. Decisions are pending in a number of cases relating to this type of activity which commenced under the Competition Act, 1991. A number of people have had the courage of their convictions and proceeded with these cases, but this happened only in the past 12 months. Some of them have been taken by people who have been destroyed and have nothing further to lose.

It would be unwise of the Minister not to take account of the background to such activity and realise that serious malpractices are taking place. As a result people trying to trade here have to buy in essential products and in one case this amounted to almost double the true price that would exist in a normal competitive environment, but such malpractices do not just affect private companies. The Minister should be aware, for example, that if people must pay almost twice as much as necessary for some of the fundamental inputs to the construction industry, the cost to the public Exchequer would be unnecessarily increased and substantially more work could be done for the same amount of money if the price-rigging racket in certain inputs to the construction industry were prohibited. In this amendment, and generally throughout the Bill, the Minister has an opportunity to show that the Government is determined to change this position or he can tell the people engaged in such practices, which are costing the economy and the Exchequer dearly, that we know what they are doing but we will let them continue. I invite him to tell them that they will not be allowed to continue with those practices. A halt should be put to their gallop. The same type of people who are regarded as semi-public heroes here and f�ted regularly would be behind bars, if they engaged in similar practices in the United States and certain other countries. We should begin to change public opinion to take account of this and realise the damage these practices cause.

If this Bill dealt with attacks on elderly people in their homes at night, stealing money from the elderly in rural areas or some other topical crime, we would be up in arms about how to strengthen it. Essentially this Bill seeks to deal with people who are stealing vast sums of money from the Exchequer and companies and who are depressing employment unnecessarily by their actions in order that they may maximise their profits. We should show the same concern for those activities as we would show for crimes directed in a more open and transparent way against individual members of society. If the attack is on society as a whole, it is no less reprehensible than if it were directed against elderly or defenceless members of society.

Before calling the Minister, I welcome Deputy Mildred Fox who is attending her first meeting of this committee. She was appointed in place of Deputy Gregory before Christmas.

I would like the Minister to reply to Deputy O'Malley's point and I will then call Deputy O'Rourke.

In respect of fines, the figure of 10 per cent of turnover is drawn from the EU basis on which fines are applied.

The Minister does not have to stick to that figure.

In many cases 10 per cent of turnover would be much greater than a fine of £1 million. Deputy O'Malley made the point that in some cases the fine may be too low. Before Report Stage I will consider whether the size of a fine should be higher, but I am reluctant to accept an increase in the fine of up to 20 per cent of turnover as that would be a dramatic change. The fines we are putting forward are drawn from the EU which base such fines on one million ecu or 10 per cent of turnover. We are proposing a fine of £1 million or 10 per cent of turnover which is higher in real terms. To double the turnover fine would be going too far, particularly bearing in mind that if a civil and criminal case were taken there would be an opportunity for exemplary damages to be obtained as well as the fine element. I consider that the balance struck here is correct.

As the Bill stands an individual, undertaking or both can be fined under subsection 4 (a). As I understand it, Deputy O'Malley's concern does not relate to whether the individual and the company can be fined, but to the fine an individual might face in the event of some form of financial engineering. I will give that issue further consideration and may accept it on Report Stage. As I understand it, Deputy O'Malley argued that the definition of an individual who might face such a fine is not adequate and he fears there may be some way of evading dodging the intention of paragraph (b) (ii). I will consider the issue in that context.

To increase the fine from 10 per cent to 20 per cent of turnover would go too far, a fine of 10 per cent is acceptable at this stage.

What about the £1 million?

I will withdraw the request in respect of the fine of 10 per cent of turnover if the Minister accepts the figure of £3 million in respect of the other crimes.

I will accept the figure of £3 million or 10 per cent of turnover and I will deal with No. 3 on Report Stage. My initial reaction to Deputy O'Malley's amendment was that it was unnecessary because subsection 4 (a) provides that the body corporate and the individual could be pursued. However, Deputy O'Malley is making a different argument in that there may be a way of riding a coach and four——

Domestic financial engineering.

——through paragraph (b) (ii). I will reflect on that and return to it on Report Stage.

We are dealing with amendments Nos. 1, 2 and 3 to amendment No. 4. The Minister said that he will agree to delete the figure of £1 million and substitute £3 million and that he will do likewise in respect of amendment No. 2.

As Deputy O'Malley had given a choice, so to speak, in his amendment, that would be agreeable. To use the words of the Minister, the "financial engineering", or rejigging, to put it plainly, which could be done by an individual within a company, part of a company or the formation of a new company, is potentially fruitful for a person who wishes to dodge. I welcome the fact that the Minister will look at this and come back on Report Stage.

While we are glad to get some crumbs from the Minister's table and the big fine will look good, I still think the debate we had this morning which proved the unenforceability of the Bill, as produced by the Minister, will be the over shadowing imprint rather than the large fines which have now been agreed to. The fines may appear horrendous but if the Bill cannot be enforced what is the point? Deputy O'Malley said if it was about a defenceless old person with their life savings under the bed we would all be up in arms and trying to frame suitable legislation to deal with the matter. There is not much of a remedial nature being done in that respect but that is beside the point.

Defenceless people, whose side I am on, will be put out of business if this Bill does not work. They are the people who suffer when schools, hospitals, sewage works, drainage schemes, local authority housing and all the public endeavours go out to tender. The price is unnaturally hyped up in many cases because of inner cartels dealing with the main component which will go into the construction of that building. There is a loss to the community at large and to the individual because he or she is not able to trade in a proper competitive environment and often goes to the wall despite much hard work.

Is Deputy O'Malley withdrawing his amendment in view of what the Minister indicated?

I am not, Sir. In amendments Nos. 1 and 2, I agreed to the deletion of the words "or 20 per cent" in each case. I understand the rest of the amendment is accepted. In view of what the Minister said, that he will look at the point I am trying to make in amendment 3, in relation to financial engineering, I will withdraw it, save to say to the Minister that an individual and an undertaking in the context of this proposed section are not necessarily different things as an undertaking can include an individual. It is not necessarily different — it is only different for penalty purposes. The imprisonment penalty cannot apply to an undertaking which is a body corporate but it can apply to an undertaking which is an individual. In practice individuals do not usually engage in illegal activities of this kind because they are too big for them.

The point I am making is that an action can be taken against both under subsection (4) (a).

It can be taken against both.

I wish to clarify the procedural arrangement. As I read it, the Minister is accepting a verbal amendment to an amendment of an amendment. To get the wording right I want to be sure what the Minister has agreed. Will the Minister indicate what he is accepting from Deputy O'Malley in relation to the amendment of the amendment to amendment No 4?

I have agreed to delete £1,000,000 and substitute £3,000,000.

Is that accepted by Deputy O'Malley as amending the amendment?

I take it the Minister is accepting the amendment, as verbally amended, by Deputy O'Malley?

We are clear now on what we have agreed. On the basis of that the Minister is accepting amendment No. 1 to amendment No. 4, in the name of Deputy O'Malley, which has been verbally amended. Is that agreed?

Amendment No. 1 to amendment No. 4, as amended, agreed to.

I move amendment No. 2 to amendment No. 4:

In subsection (1) (b) (ii), to delete "£1,000,000 or 10 per cent." and substitute "£3,000,000" or 20 per cent".

The same formula applies here.

Amendment No. 2 to amendment No. 4, as amended, agreed to.

I move amendment No. 3 to amendment No. 4:

In subsection (1) (b) (ii), after "individual" where it secondly occurs, to insert "or of any body corporate or company he controls which is guilty of a corresponding offence under section 2*".

As amendments Nos. 1 and 2 to amendment No. 4, as amended, have been accepted I will withdraw amendment No. 3 to amendment No. 4 on the understanding the Minister will examine it between now and Report Stage with a view to facilitating the point I am endeavouring to put across. In examining it he should seek to introduce a concept of the fine being introduced on the basis of a percentage of the group turnover. When he says that the Commission limits itself to 10 per cent that is right but it limits itself to 10 per cent of the group turnover. Because of the way the proposed section is drafted it would be 10 per cent of the undertaking. The undertaking is the operating company which might be a very small subsidiary of the group. For example, a large cement manufacturing company in Ireland might have 100 subsidiaries, some of which might have a turnover of £100,000 but the group itself has a turnover of £300 million or £400 million. Therefore, if the Minister confines himself to fining them 10 per cent of one of their small operating subsidiaries it is meaningless because the Commission imposes the fine on the group turnover.

I will certainly examine that. If we are talking about engaging in a concerted practice, it would not be done by a single undertaking of a very small scale. Each of the undertakings participating in the infringement, as in the EU, would be carried into our law. This bears out the point that if the undertakings are involved in a cartel, all members of the cartel would be involved, not just one individual.

That is not explicit in the Bill.

Any undertaking engaged in anti-competitive practice, which includes concerted practices or cartels, would be engaged in criminal activity and would be caught. It strikes me that Deputy O'Malley may be saying that a company engaged in the cement activity could be found guilty of a cartel in regard to cement but their clothing activities, which were not involved in any such irregularities, would be sucked into an action in which they were not directly involved or did not stand to benefit. That is the only issue in Deputy O'Malley's approach about which I would have misgivings. I will certainly look at it given that he has raised it.

Amendment, by leave, withdrawn.

I move substitute amendment No. 4 to amendment No. 4:

After subsection (5), to insert the following subsection:

(6) (a) Where an offence under section 2* of this Act is suspected to have occurred, the Authority or an authorised officer or the Minister may apply to a Judge of the District Court for a warrant for the arrest by a member of the Garda Síochána of a person so suspected named in the said warrant.

(b) Where a member of the Garda Síochána arrests a person pursuant to such a warrant, that person may be taken to and detained in a Garda Síochána station for such period as is authorised by this section if the member of the Garda Síochána in question has reasonable grounds for believing that his detention is necessary for the proper investigation of the said offence.

(c) The provisions of sections 4, 5 and 6 of the Criminal Justice Act, 1984, shall apply to an arrest under this section.

(d) A member of the Authority may be present during the questioning at a Garda Síochána station of any person arrested under this section and may, if requested to do so by the member of the Garda Síochána then in charge of the station, question such person.

This amendment seeks to insert a power of arrest in the Bill and proposes that it should be exercised by a member of the Garda Síochána on a warrant from a district justice and that the provisions of sections 4, 5 and 6 of the Criminal Justice Act, 1984, should apply to the arrest. In other words, a defendant can be detained for questioning for certain periods, rest periods are provided and a member of the authority may be present during the questioning and may, if requested to do so by the person in charge of the Garda station, question the defendant. This is what would normally happen as a member of the Garda Síochána is unlikely to be sufficiently versed in either the law or policy relating to competition to usefully question a defendant. The questioning needs to be carried out by someone who knows what is going on. I have not included a specific provision for dawn raids which are a very necessary part of the enforcement procedure.

They are already provided for in the Competition Act.

Under the 1991 Act there is provision for dawn raids by authorised officers for civil purposes. In the context of this amendment, which is essential, we should consider whether the kind of dawn raid which can be carried out by an authorised officer under the 1991 Act should be provided for in this Bill. I have tried to make provision for this power in amendment No. 5a. which deals with the evidence obtained under section 21 but it is not satisfactory.

The Bill will be unworkable without a power of arrest. Defendants will laugh at the Garda, the competition authority, the Minister and his authorised officers unless there is a power to arrest them on a warrant from a district justice and to question them. Without such a provision the Bill is pointless and I ask the Minister to accept my amendment.

My advice is that the powers of authorised officers under the criminal code will apply under the Bill. There is no problem in this regard.

What does that mean?

It means they can make dawn raids.

I understood that was the case.

Any interference in their activities will be a criminal offence. In that respect, I have dealt with this issue.

That deals with only one of the four paragraphs in the amendment.

They are not given the power under the Bill. Are they given it under one of the Minister's amendments? Section 12 states:

(1) This Act may be cited as the Competition (Amendment) Act, 1994.

(2) The Principal Act and, in so far as it amends the said Act, and this Act shall be construed together as one and may be cited together as the Competition Acts, 1991 and 1994.

I think the Minister was referring to section 21 of the 1991 Act which gives the authorisation for dawn raids. However, that power is not carried through into the Bill.

My advice is that the provision in section 12(2) under which the two Acts shall be construed as one, implies that the powers of authorised officers apply under the criminal code.

No, Sir, it does not.

Under the 1991 Act the powers apply under the civil code, not the criminal code.

That is the advice I received from the Attorney General but I am happy to check the matter again. The Attorney General's advice is that the provision in section 12(2) makes unnecessary the inclusion of a provision which states that the powers of the authorised officers apply under the criminal code.

Is it not the case that the 1991 Act did not follow the criminal route?

As the 1991 Act and this Bill will be construed as one, the powers of the authorised officers do not have to be specified in the Bill.

Yes, but they would have to be provided for.

The advice of the Attorney General is that is unnecessary but I will be happy to clarify the matter for the Deputies on Report Stage.

The powers will have to be explicitly stated in the Bill.

One cannot transpose the civil powers in the Act into criminal powers in the Bill simply by providing that the two Acts can be construed as one and cited together.

The powers of the authorised officers will be carried through into the Bill.

The powers of the authorised officers under section 21 of the 1991 Act are purely civil powers. One cannot transpose civil powers into criminal powers by providing that the two Acts may be construed as one and cited together. One would have to provide that those powers are for criminal purposes. I have tried to provide for this in my amendment No. 5a.

Section 21 of the 1991 Act states: "For the purposes of obtaining any information necessary for the exercise by the authority or the Minister of any of their functions under this Act, an authorised officer may, on production of a warrant issued by a Justice of the District Court expressly authorising him to do so...". We have been advised that the provision in section 12(2) is robust but I can clarify the position for the Deputies on Report Stage. Under section 12(2) and section 21 of the 1991 Act the transfer of the powers of the authorised officers is seen to have occurred.

Given that the 1991 Act did not follow the criminal route the Minister cannot suddenly transpose the powers under the 1991 Act into criminal powers. I am not a lawyer but commonsense tells me that he cannot do that. The people who will seek to avoid prosecution under the Bill will be able to hire top lawyers and will have the best legal advice available to them. This will be a tenuous position, at the very best.

I undertake to clarify the position in that regard. The Attorney General gave his advice on the basis that the 1991 Act and this Bill will be construed as one and cited together.

The 1991 Act does not follow the criminal route.

Under section 12(2) the powers of the authorised officers under the 1994 Act will be transposed into the Bill.

I still think the Minister should state this explicitly in the Bill.

Can I take it Deputy O'Malley is not pressing his amendment?

No. This is not part of the amendment, it is a subsidiary matter. The main issue with which the amendment deals is the power of arrest. There is no power of arrest and the Bill is illusory without it.

There is no power for a member of the Authority, for example, to question a defendant or suspect. The provisions of the Criminal Justice Act, 1984, do not apply unless they are made to do so. Does the Minister want to continue with this Bill without any power of arrest?

People in Garda stations will not know anything about the Competition Authority or the Bill, nor should they have to.

The authorised officers will have adequate powers. We are not proceeding on the basis of a felony or the approach suggested by Deputy O'Malley. I am happy to look at this issue because the Deputies are strongly arguing this point. I will consider the issue of arrest in combination with the authorised officers so that we can have a clear statement of the powers. The approach we are taking as regards the authorised officers is correct. It would be going too far at this stage in the development of our competition legislation to accept the powers of arrest and the other powers which Deputy O'Malley mentioned in relation to felony offences. We should go as far as provided for in this Bill. I will come back to this point because Deputies have raised issues of concern in relation to authorised officers. It is only fair to deal with their alternative version so that we can discuss these two issues together.

The authorised officers have no power of arrest under section 21 of the 1991 Act. To say they can operate in view of a power of arrest when they do not have one is a joke.

Failure to co-operate with them is a criminal offence.

We have discussed this point on three different occasions. Is the amendment being pressed?

The Minister said he would come back on this point.

He said he would take into consideration what Deputy O'Malley and Deputy O'Rourke said and that he would come back to it on Report Stage.

What miraculous intervention gives them powers? How do they have such powers without providing for them.

I have agreed to clarify this issue. Section 21 of the original Act gives them the power to enter and inspect premises, inspect copies or take extracts of documents, records, etc.

And to arrest?

No, they do not have the power to arrest.

How will they get such power?

They will not have the power to arrest.

They need such power.

Is Deputy O'Malley accepting the Minister's explanation?

He just explained what I told him a quarter of an hour ago, that the authorised officers have no power of arrest. This will not work without a power of arrest.

Failure to co-operate with them will be a criminal offence.

That is a different matter.

If a person is invited to go to a Garda station and they do not go, will that be regarded as a failure to co-operate? Failure to co-operate relates to providing documents and information, not to visiting a Garda station for questioning.

These are the basis on which the material of a case is put together.

This discussion is becoming repetitive. I want to make progress.

I will come back to this point on Report Stage because there is confusion about it.

The Minister is the only person who is confused.

Everyone is trying to find a solution to the problem. The amendment is either withdrawn or put to the committee. I cannot allow the discussion to continue indefinitely. Is the amendment being pressed?

It is difficult for me not to press the amendment because the Minister now agrees that there is no power of arrest unless it is conferred by this Bill. There must be a power of arrest.

There are some grey areas in the legislation. I do not want to intervene in the debate, but I must bring it to a conclusion.

They are not that grey.

Is the amendment being pressed?

Question, "That the amendment to the amendment by made," put.
The Select Committee divided: Tá, 10; Níl, 12.

Byrne, Hugh.

O'Malley, Desmond J.

Fox, Mildred.

Ó Cuív, Éamon.

Kitt, Tom.

O'Keeffe, Ned.

Leonard, Jimmy.

O'Rourke, Mary.

Nolan, M.J.

Power, Seán.

Níl.

Bell, Michael.

Crawford, Seymour.

Boylan, Andrew.

Creed, Michael.

Broughan, Tommy.

Kenny, Seán.

Bruton, Richard.

Penrose, Willie.

Byrne, Eric.

Ring, Michael.

Costello, Joe.

Sheehan, P. J.

Question declared lost.

The new division bells are a considerable improvement. However, they cannot be heard in the engineering block. I am not suggesting the Government is trying to prevent Fianna Fáil members from voting but we would like equity.

I will ask the technical staff to investigate this.

The bells can be heard in the bar.

While Labour Party Members are in the bar we are busy with constituency work.

Amendment No. 5 to amendment No. 4 has been discussed with amendment No. 3 to amendment No. 4.

I move amendment No. 5 to amendment No. 4:

After subsection (6), to insert the following subsection:

"(7) It is hereby declared that an offence under section 2 of this Act shall be a felony.".

Is the amendment being pressed?

We have discussed it. Apparently, the Minister is not prepared to accept it. If he does not accept it, it means none of the powers that go with an offence of this gravity applies and that is regrettable. He seems to think that a felony is a major crime of great gravity. He mentioned murder as being a felony. Any larceny is a felony. Even if the sum involved was only 50 pence, it is a felony.

Is the amendment No. 5 to amendment No. 4 being pressed?

No, but I will put down the same amendment on Report Stage.

Amendment No. 5 to amendment No. 4, by leave, withdrawn.
Amendment agreed to.
NEW SECTIONS.

I move amendment No. 5:

In page 2, before section 2, to insert the following new section:

"2.—For the purposes of the Act of 1978, the Principal Act and this Act, an enterprise involved in a merger or take-over shall, where it is a company, be deemed to include all other companies under common control with that company.".

This amendment inserts a section which states that for the purposes of the Act of 1978, which is the Mergers, Takeovers and Monopolies (Control) Act, 1978, the Principal Act, which is the Competition Act, 1991, and this Act, an enterprise involved in a merger or takeover shall, where it is a company, be deemed to include all other companies under common control with that company.

This is totally different to what we have been talking about up to now. The Minister's review body, as I understand it, seems to deal only with mergers. It does not seem to deal with other topics relating to competition. It was to deal in particular with the question of whether the Competition Authority should be precluded from looking simultaneously at a merger notified to the Minister orvisa versa so that——

They are not exclusively confined to that.

Can it deal with all matters related to competition or all matters related to mergers?

It can deal with all matters related to mergers and competition.

That is why I asked why go ahead with this Bill?

The reason is precisely the one Deputy O'Rourke outlined; the need to get to grips with certain activities for which there are no enforcement powers.

I submit that Deputy O'Malley's amendment should be considered by the review group under Mr. Cook.

This is an amendment which I put down to the original Bill in June 1994 before we had all these other amendments.

Having withdrawn those provisions, like Deputy O'Rourke, I feel that this refers essentially to mergers and it would be better dealt with it in the consolidation of mergers legislation which will be part of the remit of the review group.

The difficulty is that if one was to read it in the absence of section 2 of the Bill, and that is the section proposed to be deleted and would be taken immediately after the next amendment——

Since the blanket exemption of mergers is gone, I think Deputy O'Malley's amendment would rightly fall to be assessed by the review group examining the consolidation of mergers legislation.

Has that review group started work?

No. It will be appointed shortly.

Since this amendment was put down to the 1994 Bill as it was originally drafted before all these other amendments were made and before the Minister proposed to delete section 2, I do not think there is much point in my pursuing this particular amendment at present. What I am trying to ensure is that all associated companies under common control would be taken into account in arriving at the threshold figure for turnover or for assets but as I understand it the Minister will delete the section which would have lifted the threshold greatly. Is that correct?

Yes, section 2.

Is there not another section, other than section 2, that raises the threshold?

Yes, section 8 but it has gone as well.

That is in line with what the Minister said in Opposition.

In the light of the deletion of section 8 from the Bill, there is not the same necessity for this amendment. Perhaps the Minister would draw the attention of the review group to the points involved. On that basis I will withdraw my amendment.

Amendment, by leave, withdrawn.

Amendment No. 5a and amendments Nos. 8a and 9a are related; it is proposed, by agreement, to take amendments Nos. 5a, 8a and 9a together.

I move amendment No. 5a:

In page 2, before section 2, to insert the following new section:

"2.—All evidence obtained by an authorised officer under section 21 of the Principal Act shall be admissible in evidence in summary proceedings or in a trial on indictment brought in respect of an offence under section 2 of this Act.".

This is a different aspect of what the Minister and I have been discussing, that is, the evidence of authorised officers. At present authorised officers who are put in under section 21 of the principal Act are put in for the purpose only of getting evidence for civil proceedings. The amendments made to the Bill include provision for criminal prosecutions but the evidence that the authorised officers get under section 21 is not admissible in a criminal trial or prosecution unless specifically stated by law. Evidence got for civil purposes is not admissible. The Minister, discussing other amendments earlier this afternoon, laid great store on the fact that authorised officers have all sorts of powers under section 21 that can be used in connection with the criminal proceedings. He even went so far at one stage as to imply that they virtually had a power of arrest; he agreed later, that they did not have this power.

If the Minister is to rely on their investigations under section 21 in furtherance of a criminal prosecution, then this amendment is vital, otherwise they can collect evidence until they are blue in the face under section 21 but none of it can be used in a criminal prosecution. For that reason, irrespective of what advice he has got or hang-ups he might have — departmental or from that noted hotbed of wisdom, the Office of the Attorney General — I ask him to be sensible and to accept this amendment in order that the evidence the authorised officers obtain can be used in a criminal prosecution.

I am sure everybody on this committee wants to ensure the prosecutions are as successful as possible. The only people who will be able to gather evidence — because there is no power of arrest and the Garda Siochána cannot become involved — are the authorised officers who can gather it only under a section of a civil Act and they will have to be given this power specifically.

Since this amendment would give them the power to introduce it as criminal evidence, I hope the Minister will accept it.

We are discussing a group of three amendments and as there will be further discussion on all three, I propose, with the agreement of Members, that we adjourn until Thursday next. Agreed.

The Select Committee adjourned at 4.30 p.m. until Thursday, 18 January 1996.