Amendment No. 12 in the name of Deputy O'Rourke has been ruled out of order. We come to amendment No. 13 in the name of the Minister. Since amendments Nos. 14 and 15 are related I suggest that we discuss all three together by agreement.
SECTION 7.
I move amendment No. 13:
In page 4, to delete lines 20 to 28 and substitute the following:
"amended by the insertion after subparagraph (1) of the following subparagraph:
‘(1A) The Minister may assign to one permanent member of the Authority the title, "Director of Competition Enforcement", and such a member to whom the Minister assigns the said title shall, without prejudice to his membership of the Authority, have the following functions, namely—".
Essentially these amendments provide that the Minister may assign one permanent member of the Competition Authority who will be the Director of Competition Enforcement who shall have the specific functions specified in the original section. They are to carry out investigations, make recommendations and give advice to the Authority in relation to proceedings and to carry out such other duties as the Authority may from time to time assign to him.
Amendment No. 14 is an addition to the existing section in that it provides that not only can the Director of Competition Enforcement investigate a complaint in respect of a civil contravention of sections 4 and 5 but also in respect of the new criminal offences. Similarly, in making recommendations in respect of proceedings, there is another addition in that there will be the possibility of obtaining advice in respect of not only civil proceedings under section 6 but in respect of the criminal proceedings set out in section 3.
Is that agreed?
The Minister did not give us any reason for the proposal to appoint this person who will be known as the Director of Competition Enforcement. It is not clear how many members of the authority there will be now because the Minister proposes to delete section 7 (1) which reads:
The permanent members of the Authority shall consist of a chairman and not less than two and not more than four other members (including the member mentioned in subparagraph (1A) each of whom shall be appointed by the Minister.
However, he now says the Minister may assign to one permanent member of the Competition Authority the title of Director of Competition Enforcement who shall, without prejudice to his membership of the Authority, have the following functions, which are then specified.
What is contained in the amendment is quite different from the contents of the Bill, as drafted. At present there are three members of the Authority. Will one of those three become the Director of Competition Enforcement or will he be additional and, if so, then what will be the maximum number of members of the Competition Authority? As originally drafted, the Bill made clear what its membership would be whereas now it does not appear to be clear.
The position is that there will be an extra member, the existing membership being the chairman plus two. There will now be an extra member of the Authority who will be the Director of Competition Enforcement.
The manner in which it is drafted is very confusing. For example, the beginning of section 7, as originally drafted, reads: "Paragraph 1 of the Schedule to the Principal Act is hereby amended by the substitution of the following subparagraphs for subparagraph (1)" and then subparagraphs (1) and (1A) are set out, whereas now it is intended to say that the Schedule is amended by the insertion, after subparagraph (1) of the following subparagraph which then cites subparagraph (1A). I take it the existing subparagraph (1) stands.
No, the existing Schedule stands.
Unfortunately I do not have my copy of the 1991 Act.
The permanent members of the Authority shall consist of a chairman and not less than two and not more than four other members, each of whom shall be appointed by the Minister. What we are adding is that the Minister may assign to one permanent member of the Competition Authority the title Director of Competition Enforcement. Therefore, his appointment will be within the existing quota of three to five members within which there will be a new member who will be the Director of Competition Enforcement, the total maximum membership remaining at five.
Will he sit as an ordinary member of the Authority?
He will be a member of the Authority but he would not normally sit in respect of, say, notifications of agreements to the Authority. His task will be in relation to enforcement issues.
Is the director confined to enforcement only? As the heavily amended amendment now stands, there is nothing legally to stop him sitting as an ordinary member.
There is nothing statutorily to prevent him sitting in respect of a notification of agreement to the Authority, but it is clearly the intention that his area of operation will be the investigation of complaints and advice to the authority on the possibility of taking proceedings.
Does the Minister not think it necessary to set out what his relationship will be in more detail? I envisage instances where people will claim they are prejudiced if the Authority decides something or some aspect of something in respect of which the director has already taken enforcement proceedings. It is similar to having a prosecutor alternating as a judge now and again. It will give rise to complaints and efforts will be made in the courts to set cases aside because of that.
The duties of the enforcement director are to investigate any contravention and give advice on proceedings. The Deputy's fear is that a case would be prejudiced if the director was involved in an earlier notification which was withdrawn and it became necessary to take an enforcement action.
It is the other way around, if he had taken the action first. The Minister seems to think that the only function of the authority, as a body, is to decide on applications regarding agreements.
No. It decides on enforcement as well.
It can decide on various other issues, for example, mergers, abuse of dominant position and so on. If the member who happens to be the director of competition enforcement is sitting on the Authority in regard to a question raised about abuse of dominant position and if he has already instituted enforcement proceedings against the company concerned I am sure it will object to him being there. I know it was done in this way to avoid having two offices of enforcement but there is an overlap between the prosecution and judicial arm of the Authority as it will have both functions under this Bill. Would it not be better to specify that the director of enforcement is precluded from sitting on the authority in respect of anything else?
It does not have a judicial function in that the law is as it is. The function of the Authority is to look at whether a notified agreement can be certified as not being in breach of the law or even if it is in breach of the law to decide whether a licence will be given on technical grounds in relation to public advantage, efficiency and other issues set out in the Act and it has power to take enforcement action. I do not see a conflict between those. The Authority is an administrative body that will decide whether certain notified agreements can be certified as not being in breach of the Act. It will permit certain ones for particular reasons and will not permit others. It will enforce the law against certain activities. I do not see the danger of conflict because ultimately the court will resolve the issues.
One could see where the threat of enforcement resulted in an agreement being notified and a decision taken by the Authority but I cannot see that the threat of enforcement would have prejudiced a subsequent decision on the notified agreement. They are effectively acting to police this law in the way provided for in the Act. I do not see the problem raised by the Deputy but given that it is an issue on which we should have absolute assurance I will consider it and ensure on Report Stage that we are certain there is no problem in relation to it.
This is important but complex legislation. Will the director of competition enforcement be a member of the board or a paid executive?
He will be a member of the Authority and will be paid.
Will he be subservient to the chairman?
He will not be the chairman.
Will the position of chairman be part-time or full time?
The positions of the chairman and two members are existing full time positions. Under the Act we have power to extend the membership of the board from three to five members. It is proposed that one of those members will be the director of competition enforcement. In practical terms I will provide for four members of the authority one of whom will be the director of competition enforcement. It leaves open the option the increase to number to five at a later stage and look at other issues such as the possibility of temporary members.
There will be three new executive directors.
It requires three members to adjudicate on a licence or certification decision. They are paid executive members and must make those decisions.
Are they full time positions?
Yes.
The Minister said what the Authority does is not judicial and enforcement in the last resort is a matter for the court.
The decision on an enforcement action will be a matter for the courts.
I query those two statements. The Authority is called on virtually every day of the week to make quasi-judicial decisions. It decides whether a particular agreement, practice or activity is all right in terms of competition policy and law. It tries to decide between two conflicting views on a particular document, activity, agreement or practice. It is not correct to say enforcement is dependent on the courts.
The courts are involved only if a party affected decides it wishes to go to court. The Authority's decision stands if it is not challenged on legal grounds and in the majority of cases the court will not be involved. Courts are not suitable vehicles for making decisions on competition policy which is a matter for the Oireachtas to define and the Authority to implement. It is not, and should not, be a matter for the courts to decide what is or is not good economic or commercial competition policy.
As I understand it the Deputy fears that where the director of enforcement takes enforcement action and rather than face such action an agreement is notified to the Authority who must then make a decision on a certificate or licence, the process is in some way prejudiced by the initial involvement of the director of enforcement. I do not see how the decision would be prejudiced by such involvement. The Authority rightly deals with an agreement notified to it and it could not be said to be prejudiced because it had drawn attention to certain provisions of the Act and sought to require the person to notify the issue to it. I do not believe there is a threat of prejudice in that instance.
On the other hand I fear that if we create barriers between the director of enforcement and the Authority it could greatly reduce the effectiveness of the director of enforcement in that he would not have access, for instance, to an agreement notified and subsequently withdrawn. He would not have access to information which might be germane to advising ultimately whether there should be a prosecution or an action should be taken. I see advantages in this arrangement. I do not believe it will prejudice the case as the Deputy fears. I understand the argument he is making and will undertake on Report Stage to give the necessary assurances. I am confident that the section is robust in that regard.
We have dealt sufficiently with this matter and the points have been well made. The Minister indicated he will come back on Report Stage, taking into account the points raised. I ask Members to conclude on this matter because I want to make progress on the Bill.
Will the Minister say whether the director of competition enforcement will be separate from the Competition Authority?
One of the members will be assigned as director of enforcement.
The Minister already answered that question.
Will the Minister agree that one position should be independent of the other as is the case with the Garda and the DPP?
No.
What is the reason for that?
I outlined the reasons to Deputy O'Malley. Recognising the committee's concern, I will come back to this matter on Report Stage and give absolute assurances on it.
Amendment agreed to.
I move amendment No. 14:
In page 4, to delete line 32 and substitute the following:
", or subsection (2), (5) or (7) of section 2 of the Competition (Amendment) Act, 1995, that he suspects has occurred or may occur,".
Since it is now 1996 I propose that the title of the Act be changed to read "Competition (Amendment) Act, 1996".
I accept the Deputy's proposal.
Amendment agreed to.
I move amendment No. 15:
In page 4, to delete lines 35 to 37 and substitute the following:
"of proceedings under
(i) section 6 in relation to any matter, or
(ii) section 3 (6) of the Competition (Amendment) Act, 1995, in relation to an offence under subsection (2), (5) or (7) of section 2** of that Act, and the enforcement generally of the provisions of this Act, and".
I propose that the title of the Act be changed in this case also to read "Competition (Amendment) Act, 1996".
I accept that the title be changed in this case also.
Amendment agreed to.
Question proposed: "That section 7, as amended, stand part of the Bill."
At present there are no time limits within which the Competition Authority must give a decision — it may take months or even years for a decision to be made.
We dealt with that matter earlier. There will be no time limits but we are clearly working to speed up the time within which cases are dealt with. There was a huge backlog of cases when the Authority was established and it has been dealing with them. The possibility of cash free licences will speed up matters and eventually some time limit will be developed.
Is the Minister prepared to set down in law the time limits?
No, not at this stage. It will be done by way of regulation.
That question was asked earlier while the Deputy was absent from the room. The Minister is repeating what he already stated.
Question put and agreed to.