Industrial Development (Enterprise Ireland) Bill, 1998 [Seanad]: Committee Stage.
I welcome the Minister for Enterprise, Trade and Employment, Deputy Harney. We have acknowledged that she was tied up with other business and was therefore unable to attend at 4.30 p.m. I also welcome her officials, Mr. Ned Costello, Mr. Seán Gorman and Mr. Bob Keane, to the meeting.
As we have a detailed Bill before us we should be practical and group amendments wherever possible. As a large number of amendments have been tabled, we may not be able to finish this Stage of the Bill in one sitting. I would like to complete the Bill tonight. I suggest therefore, that we sit until 7.30 p.m. and if we have not completed by then we could break for tea and return later. With co-operation from all sides this should be possible.
On a point of order, the Minister may want a five minute break because she, like me, has been in the Chamber since 2.30 p.m. without a break. I managed to have a drink on the way here, but the Minister may not have had time to do that.
We will pencil in 7.00 p.m. as a suitable time for a break and if it is deemed that we should break earlier, I will be happy to accommodate that. We could then continue our consideration of the Bill. Is that agreed? Agreed.
SECTION 1.
I move amendment No. 1:
In page 5, subsection (3), line 31, to delete "the" and substitute "this¾.
This is a technical amendment.
Amendment agreed to.
Amendments Nos. 2 and 3 are consequential and may be taken together by agreement. Is that agreed? Agreed.
I move amendment No. 2:
In page 5, subsection (4), line 34, to delete "The Metrology Act, 1996" and substitute "The Metrology Acts, 1980 to 1996".
These amendments are being tabled on the advice of the parliamentary draftsperson to correct an oversight in the earlier draft which simply referred to one of the metrology Acts. The second amendment is also on the advice of the parliamentary draftsperson to correct an oversight in the earlier drafting which referred to only one of the metrology Acts.
Amendment agreed to.
I move amendment No. 3:
In page 5, subsection (4), line 36, to delete "and¾ and substitute "to".
Amendment agreed to.
Section 1, as amended, agreed to.
Section 2 agreed to.
SECTION 3.
I move amendment No. 4:
In page 7, line 4, after "order" to insert ", made following consultation with recognised trade unions or staff associations representing staff affected by the making of the order,".
One of the key criticisms of the approach the Minister has adopted is the manner in which she seeks to introduce the new agency without, according to workers' trade union representatives, adequate preparatory work. I do not want to return to a Second Stage debate, but many members of the different bodies being brought together to form this organisation complained that there was little or no consultation.
The assurances given by the Minister on Second Stage have not taken place and groups of workers in Forbairt, ABT and FÁS are uncertain about their futures. It would be appropriate to include this wording on their behalf. The Minister has put the cart before the horse. She should have dealt with the industrial relations element of the project so that everything could move into a smooth new agency under the designated chief executive. Instead we are likely to have months of industrial relations difficulties because of the Minister's failure to sort them out over the past year. The Minister has not done the preparatory work and because this I would like her to accept this amendment.
I cannot accept this amendment. There has been widespread consultation on this matter. Many of the staff representatives I spoke to complimented the Department for the manner in which the workers and their representatives were consulted. There were consultations at every step along the road. We spent a year planning the establishment of Enterprise Ireland, since the Government took office at the end of last June. It is important to get on with it because we need certainty. Staff and management, the firms which will be helped and our overseas workers, particularly those who work for Forbairt and Enterprise Ireland, need to know with certainty what is or is not happening. The longer we delay it, the more difficulties could arise. I intend the establishment date to be some day in mid-July. It is important to move forward with speed and not to delay any longer.
There will be ongoing consultation, as there has been from the outset, with the workers and their representatives. I said on many occasions that nobody's conditions of employment will be disimproved. There will be no forced redundancies. We do not plan redundancies at this stage, but if there is duplication or need for redundancies, it will be on a voluntary basis. I have given that assurance and I repeat it here. For all those reasons, it would be wrong to delay the implementation or the establishment date beyond two or three weeks from now, when the Act is signed into law by the President.
There is grave uncertainty among many of the staff about their future. A number of people in Forbairt in Glasnevin have been told their future is uncertain. We are dealing with a group of workers who were reorganised within a few short years. There was a political dimension to it in that the Minister for Finance, Deputy McCreevy, refused to allow this project to develop when he was Minister in the Labour-Fianna Fáil coalition because his Department would disappear. The Labour Party believes there has not been adequate consultation with staff. I accept some of the Minister's comments but there is still grave uncertainty among people about moving to Enterprise Ireland. Many of the staff believe there has not been proper and adequate consultation and they are totally in the dark about their future. It is critical the Minister meets them and that there is proper consultation, which has not happened to date.
I cannot accept that. I was not around when the existing agencies were being established by my second last predecessor, but I understand there is no comparison between the level of consultation and partnership adopted during the process of establishing Enterprise Ireland and what happened before. As Deputy Broughan knows, nobody will be made redundant and nobody's conditions of employment will be changed or worsened. People will work for an organisation which has a different focus and name but their conditions of employment will not change. They will remain State employees and they will work in a more focused environment in the future. That will be good for staff and for staff morale.
It is important to get on with it and not to have further delays. The purpose of trying to get legislation through before the Houses of the Oireachtas break for the summer recess is to allow us to establish Enterprise Ireland. I appreciate the co-operation of Opposition Deputies because we will be doing things quickly towards the end of the session. I am sorry I cannot accede to the Deputy's request.
I am disappointed with the Minister's response because this is a modest amendment. It does not inhibit or prevent the Minister from proceeding as she sees fit, but it requires her to consult with either the recognised trade unions or staff associations. There is not a uniform welcome among staff for the Bill for reasons the Minister will understand. The scientific and professional technological staff, in particular, are not as clear about the new organisation and their role and the role of the services they provide in the new agency as the Minister would have us believe. It is surprising that a higher premium is not attached to the scientific, technological and innovatory role in the Bill generally. The Minister has, as an afterthought, inserted some recognition of this dimension in a later amendment in terms of the requirements imposed in respect of the annual report. This will be a valuable dimension of the new agency. Deputy Broughan's amendment is not unreasonable, requiring no more than consultation before the Minister proceeds.
The Minister made it clear in the Dáil that this is mainly an enabling Bill. She is dependent on the goodwill of the 1,200 staff who will form part of Enterprise Ireland. They will have to undergo a great deal of change in their lives. It may appear as if three organisations are being amalgamated but there are different ranks of people, such as technical officers, researchers, etc., whose titles may disappear from the system. People with technical qualifications might like to be called technical officers.
In sections 18, 19 and 39 the Minister has given a cursory nod to the role of the trade unions and staff associations. Deputy Broughan's amendment gives the Minister the best chance of a successful outcome to the discussions, although I would have had a problem if it stated that the Minister cannot set up Enterprise Ireland until she gets full and final agreement. The work starts after Enterprise Ireland is set up.
As I said on Second Stage, I am fearful that Enterprise Ireland's energies will be spent not on promoting trade, industry and small businesses abroad, but on sorting out staffing problems, such as the need for voluntary redundancies, etc. I thought the Minister would have been advised to amend the Bill slightly to ensure trade unions and staff associations would not be able to stop it being set up but that they would be consulted so that they would know the staffing complement would be sorted out within three or six months of its establishment.
If the Minister is not prepared to accept this amendment, I hope her openness and transparency will allow her to accept later amendments to ensure staff representation on the board. She will rue the day she denies staff input on the board. I hope she considers this amendment and, if necessary, strengthens it to ensure her hands are not tied.
The section proposed to be amended sets the establishment day and, therefore, the enactment of this legislation. There is adequate opportunity in other sections for consultation. I am not sure this is the place for this amendment and I am suggesting that it be withdrawn from this section.
The Minister has given a commitment to consult in the normal managerial manner in which one would consult with staff before changes. That is implicit in the Bill and it does not need to be made explicit by way of amendment. It is best practice for any organisation undergoing fundamental change to consult and I am sure this will happen. However, it is different to incorporate that in the legislation.
Many of the points made would be valid if there was no consultation. However, on average the staff and their representatives have been met every three weeks for the past six months. They have been very involved in the implementation process. It may seem reasonable to include the word "consultation" but I am advised that legally and de facto the word “consultation” implies agreement and gives people a veto. I cannot do that as there could be several legal interpretations as to what defines consultation and whether it has taken place. That is my difficulty. I do not want to be unreasonable. We have had umpteen consultations over the past six months. The staff has been involved, on average, every three weeks.
To negotiate positions for staff and deal with the sorts of arrangements referred to by Deputy Owen would require the establishment of the agency and the appointment of its management before negotiating with people about their conditions of employment. No one's conditions of employment will be disimproved - everyone will remain an employee of the State. I am not saying there will be redundancies as I do not know. There may be redundancies but they will be voluntary.
I am giving all these assurances but we cannot give anyone a veto or imply in some legal way that there will be a veto. There has been much legal action concerning the definition of consultation and I do not want to agree to any amendment which would delay the establishment of Enterprise Ireland. I want the agency in place and the issues concerning staff and their location resolved as quickly as possible. The majority of the staff, certainly those with whom I have had contact, are happy that they have been widely consulted - more so than on previous occasions.
Amendment put.
The Select Committee divided: Tá, 3; Níl, 8.
Tá
- Broughan, Thomas.
- Owen, Nora.
- Rabbitte, Pat.
Níl
- Ardagh, Seán.
- Callely, Ivor.
- Daly, Brendan.
- Harney, Mary.
- Lenihan, Conor.
- McGuinness, John.
- Moynihan, Michael.
- O’Flynn, Noel.
SECTION 6.
Amendment No. 59 is consequential on amendment No. 5 and they may be taken together. Is that agreed? Agreed.
I move amendment No. 5:
In page 7, subsection (1), line 16, after "as" to insert "Fiontraíocht Éireann or in the English language".
I am sure the Minister will wish to establish the new agency with a strong personality. The name of the agency should convey the functions outlined in section 7. The two agencies being subsumed had Irish names, which is a characteristic of many successful State bodies and creates a certain personality for them. This Bill will abolish Forbairt and An Bord Tráchtála in the creation of Enterprise Ireland. It was argued strongly in the Seanad that the Irish language version of the new agency's name, Fiontraíocht Éireann, should be provided for.
I noted from media reports that there is a possibility that the Small Firms' Association has patented the name "Enterprise Ireland" so perhaps we will have to name the agency Fiontraíocht Éireann. The Minister said in the Seanad that she may consider using the Irish title also. What is the status of the title "Enterprise Ireland"? Is it the property of a private organisation?
I did not give an assurance in the Seanad that I would change the title. I feel strongly on this point. It is important that the agency is understood by those who must deal with it, particularly those who deal with it overseas. I have just returned from a week long trip to the US with more than 21 Irish companies. Many of the Americans who spoke at some of the functions found it difficult to pronounce "Forbairt". An Bord Tráchtála operates abroad as the Trade Board. An executive in the IDA recalled an occasion when the chief executive of an American company went to visit Fitzwilton House, headquarters of the IDA. There is a sign outside which reads "Forfás, Forbairt, IDA Ireland" and he asked what it meant. The chief executive of the IDA jokingly told him it meant one hundred thousand welcomes to the IDA.
We must have a name which is clear so that those who deal with the agency understand it. It would be too cumbersome to have the English and Irish names. That would be tokenism to the Irish language. Calling such bodies by Irish names is not the way to promote the Irish language. The IIRS and the Environmental Protection Agency do not have Irish names. The title of the IDA is in English and everybody understands its functions.
I have discussed this matter with the Small Firms' Association and it was delighted that we would adopt the title. One cannot patent commonly used words such as "enterprise" and "Ireland". They do not belong to anybody and cannot be patented. We do not believe there are any such legal difficulties and that has been reinforced by our legal advice.
I cannot accept Deputy Broughan's amendment on the agency's name. It is important that it will have a clear title and that everybody knows what it will do. In particular, it will have an important overseas focus. The purpose of establishing Enterprise Ireland and bringing various component parts of Forbairt and the Trade Board together is to help Irish companies to grow in export markets, to help them become sustainable and competitive in an export market. It must be export focused because many of its dealings will be with foreign companies. It is important that as wide an audience as possible understands what it does and with whom it is dealing.
How stands the amendment?
I would like the Minister to consider it before Report Stage.
Amendment, by leave, withdrawn.
Question proposed: "That section 6 stand part of the Bill."
Why is it necessary to have a new agency for Forfás rather than a stand alone agency?
Following the publication of the Culliton report in the late 1980s and early 1990s, it was agreed there should be greater co-ordination between the different agencies working in the area of training, indigenous company development and inward investment. Forfás was established as an umbrella policy making organisation to bring together all these organisations. The chief executives of FÁS, the Trade Board, Forbairt and the IDA sit on the board of Forfás. Forfás is currently the employer of Forbairt and IDA staff. It has major delegation functions and it is important that it comes under the umbrella of Forfás. Forfás has done an outstanding job in the policy area and we want to make sure what is happening in the different agencies is co-ordinated and that everyone knows the agenda to which he or she is working. Forfás has published many reports on telecommunications competition and the economy generally. It has addressed many of these sectors from a policy perspective. Forbairt, the Trade Board, FÁS and the IDA have all had an input into policy making. The social partners are also represented on the board of Forfás. It is important that we keep this single policy focus if we are to ensure greater co-ordination between the different agencies in a similar field.
Question put and agreed to.
SECTION 7.
Amendments Nos. 6 and 8 to 11, inclusive, are related. Amendment No. 58 is consequential on amendment No. 9. The amendments will be taken together by agreement.
I move amendment No. 6:
In page 7, subsection (1), line 22, after "Agency" to insert "(which functions may be exercised in relation to the activities of Irish enterprises outside the State)".
In some respects section 7 might be regarded as the most important section in the Bill as it seeks to set out industrial policy. One of the weaknesses of the Bill is that it does not spell out clearly what the agency is designed to do. My amendment seeks to insert that its functions may be exercised in relation to the activities of Irish enterprises outside the State. As the Minister said, we are one of the great trading countries in the world and it is critical that we put the emphasis on the export function. This should be made clear from the outset. The rationale of the Bill is to give businesses advice and support and to take them through the Irish market and into international markets. It is on this basis that I ask the Minister to accept my amendment. I will press amendment No. 10 on assisting enterprises in the development of marketing programmes. There is a general feeling among exporters that we must be conscious of the new competition regime in the European Union. We could be challenged in relation to support for our exporters which is a hands-on approach. There must be a clear statement regarding the function of the agency such as the development of marketing programmes and trade promotion services to show that we comply with the new mode of operation of the EU.
Section 7 is the core of the Bill. I realise this is essentially an enabling section and that, as stated in her mission statement, the Minister will work to put flesh on the skeleton included in section 7. The purpose of setting up Enterprise Ireland is to replicate IDA Ireland in getting inward investment and to assist Irish companies to sell and market their products and services abroad. In her mission statement the Minister said that given the limited size of the domestic Irish market and its increasing openness in a globalised competitive environment significant growth in sales and employment can be achieved only through exporting.
The Minister spoke earlier about a willingness to trade internationally. However, I could not find the words "export" or "trade internationally" in the legislation. This is why I believe section 7(1)(a) is flawed where it states "to develop industry and enterprise in the State,". If the Minister can assure me that "in the State" also means outside of the State, there would be no need for my amendment No. 9. If she cannot assure me of this, and if a person wants a service under Enterprise Ireland to promote and develop industry or enterprise in another country, albeit an Irish company, he or she may be denied this because the legislation specifically states "to develop industry and enterprise in the State". The fear has been expressed to me that section 7(1)(b) which states "to promote, assist and develop the marketing of goods" might not comply with EU regulations which state that one cannot sell one's own product, there must be open competition. That is why I tabled amendment No. 9 which recommends the development of marketing programmes. It specifies the development of marketing programmes for goods and services inside and outside the State as opposed to just developing and assisting the marketing of Irish goods.
Amendment No. 11 seeks to insert "to provide trade promotion services to exporters of goods and services". It is essential that this is one of the functions of the agency. Trade promotion services generally are interpreted to mean market research, market intelligence, introductions to buyers, importers, agents and distributors. I do not know why it has been left out. Much emphasis was placed in the briefing material and mission statements we received on developing people's powers of export. I am surprised there is no reference to it here. Perhaps the Minister and the Department are tiring of trade fairs and exhibitions and feel trade promotion should be handled in a different way. I hope encouraging firms and the Government to take part in trade fairs will remain a function of the agency. I realise decisions and choices have to be made. My Government, when in office, had to make choices in that area also. I hope the Minister will accept the amendment to provide trade promotion services to exporters of goods and services lest they are denied them.
Amendment No. 58 seeks to insert the word "export" in the long title of the Bill. I am fearful that while the Minister may feel this title covers exports another Minister might decide that trade means trade within Ireland. If I manufacture a product in Dublin and sell it in Cork that is trade but if I manufacture a product in Dublin and I wish to sell it in Japan, Thailand or the Czech Republic I want to be sure Enterprise Ireland is available to help me develop that market. I am seeking that the Title read "An Act to make further provision for the development of Industry, Trade, Export and Enterprise". The whole purpose of this legislation is to help companies increase their exports. I am surprised at how vague the legislation is on that element. The accompanying document contains the spirit of exporting but it has not been transposed into the legislation. I hope the Minister can accept some of my amendments.
I can reassure Deputies in relation to exports because, clearly, this is a very small economy of 3.5 million people. Irish companies can only grow in the context of growing in export markets. We do not want displacement, where one takes business from another company. That happened before with re-equipment grants and the Telesis Report was very critical of that. There is no point in helping some companies to put other Irish companies out of business.
Because of some of the issues raised by Deputy Owen we have to draft this very carefully. One of the things prohibited under the State aids rules is subsidising exports. We could not include any phraseology or legislation that would promote Irish exports only or subsidise them. That would be seen as anti-competitive and a breach of the State aid rules. This section has been drafted bearing that in mind. We also cannot promote the idea of import substitution for similar reasons. We are seeking to help Irish companies under six different headings; the business development model referred to earlier which will help them to assess company strategy, deal with research and development, including market research, deal with production in operations and design, sales and marketing, human resources and finances. It is along that model that we want the new agency to help Irish companies to become sustainable and increase their exports, sales and employment.
Paragraphs (b) and (c) of section 7(1) are taken directly from the Bord Tráchtála (Trade and Marketing) Promotion Act, 1991, which has proved to be very flexible and appropriate in the Irish export context. We should keep to the same terms in this legislation as applied in the 1991 Act. For that reason and particularly in view of the State aid issue where we have to be careful that we are not in any way accused of being anti-competitive or seen to promote and subsidise Irish exports, or that we are seeking to promote import substitution, all of which are against the single market rules, this is the manner we have been advised is the best way to define the functions of the agency. I accept confusion remains and we intend, shortly, to publish a definitive policy statement on what the agency will do. Clearly, the purpose of bringing the export function together with the company development function is to ensure they are dealt with together.
I cannot give a commitment that every company will be helped because clearly some companies have the financial wherewithal and do not require State assistance. We cannot say every company should be assisted to open new markets abroad. That would be a waste of taxpayers' resources and clearly would not be appropriate for very large companies that have achieved very successful brand names in international markets. I am not saying we will not help them; if we can, we will, but we may charge for our assistance. We must have a flexible approach. Many of these issues can best be dealt with in the context of our policy statement.
Of the 21 companies that went to the United States, 18 of them were either software or electronics companies seeking to do business partnerships with American counterparts so they can access the American market without necessarily setting up a separate operation. It gives the American companies the opportunity to access the European market without necessarily setting up a duplicate operation in Europe and Irish companies can do that for them. That system has been very successful to date. More than 51 agreements have been reached between Irish and American companies. This began with President Clinton's investment conference for Ireland in 1995 and it has been extremely successful.
Six of the companies that came with me are companies that supply, in the main, the electronics industry. They are packaging and print companies that tried to meet procurement policy people in some of the larger multinational corporations so they could access the people who make the decisions with a view to having those people not just buy their products in Ireland where the multinationals are located - we visited Tricom, Del and Hewlitt Packard - but also get into the wider operation of those companies with a view to expanding their business. That is done in a very flexible way.
It is important that we maintain flexibility and deal with some of the issues that Deputies are concerned about. I am also concerned about them. This is about trying to improve performance for the Irish enterprise sector. It is about bringing things together; it is about much more focus and streamlining and about ensuring that, instead of having 45 different schemes, as we have at the moment, to help Irish industry across three Government agencies, we bring them all together and ensure those who need assistance most and those companies that have the greatest potential to grow and therefore create employment are helped in a very positive way.
I accept much of what the Minister said. She mentioned that some of the sections came from the Bord Tráchtála Act. If the words have been chosen so carefully perhaps it would be best to make some reference to activities outside the State, if we are to have a mission statement which stands up even in very brief form.
The Minister's expedition to America with SMEs could not be regarded as anti-competitive so why not make some gesture towards exporters in the central part of the Bill?
Having been on the other side of the House, I know one is often advised to tread carefully in subsidising Irish exporters for fear we breach the law. The mission statement of Enterprise Ireland as published reads: "to help client companies develop a sustainable, competitive advantage leading to increasing profitable sales, exports and employment". We have to be careful. Every other European country manages to ensure their products are promoted. One cannot tell me other European countries have not found a way of ensuring that when stocking shelves with a product the national products are promoted. Equally, when they go abroad, they assist people to sell French, German or whatever country's products. We have to be careful not to be too coy. This argument was made when we did away with the "Buy Irish" campaign. One can hardly mention that a product is Irish nowadays for fear of breaking some laws. I do not think there is sufficient emphasis that this enterprise agency is being set up to assist people outside the State. I will not push my amendment to a vote but, at the very least, the Minister could amend paragraph (a) to develop industry and enterprise in and out of the State, or have some reference to outside the State, as she has in the mission statement. It is all very well to issue a concise document, which the Minister said she would do, but I thought this mission statement was the concise document. If the Minister is to issue an even more refined one, it is a pity we did not have it before the Bill. I urge the Minister to re-examine it and make sure the concerns expressed to us by exporters will somehow be taken on board. They have real concerns which I know have been put to the Minister because one of her officials briefed us. They have heard all this. The Minister should look at this section to see if she can satisfy us with some minor amendment to make sure there will be no doubt that this will assist people working outside the State.
I would like to be helpful if I can. On the existing functions of the Trade Board, we took them word for word from the 1991 Act which states:
(b) to promote, assist and develop the marketing of goods, and
(c) to promote, assist and develop the marketing of service industries.
The Minister did not take (a) from that Act.
No, that is from the Forbairt brief. We are talking about the export function.
In relation to including matters outside the State, I am advised that if one did that, one would be obliged to consider assisting Irish companies that want to acquire overseas companies. Clearly, while that is good for the Irish companies, it is not necessarily something we want to grant aid or otherwise assist. Companies that have the capacity to make major acquisitions overseas - many of the food companies have been extremely successful in that - do not require State aid to do so. They do not require the assistance of an agency like this. Legal reasons concerning State aid rule out subsidisation of exports. I agree with Deputy Owen that everybody is out to promote their own country's goods. That is what I was doing last week and what I will continue to do. That is why we use words like "promote, assist and develop".
We cannot leave hostages to fortune and cannot in any sense imply that there will be subsidisation or import substitution in the legislation. If we did that we would be in breach of the rigid State aid rules. Deputy Owen knows that we have been under pressure in this area because of our success, particularly with foreign investment decisions where companies have left other EU member states to come to Ireland. That has put us under some pressure from our European counterparts. We are more vigorously watched and pursued than many other countries.
We have to take legal advice on this matter and must do what we want to do - promote, assist and develop the marketing of goods. We must do it in the way it has been done in the past by bringing things together in a more focused way. Clearly, the export functions of the Trade Board have been taken word for word from the 1991 Act. Because the board is being abolished and a new organisation is being established I can understand the concerns. The Deputy's amendments are fuelled by those concerns but I can assure her that they are concerns that in time will prove to have been unfounded because if we are not increasing exports we are not in the business of helping out companies.
Amendment put and declared lost.
Amendments Nos. 7 and 12 are related and may be discussed together.
I move amendment No. 7:
In page 7, subsection (1)(a), line 23, after "enterprise" to insert "at all levels".
This amendment relates to the overall fundamental function of the agency relating to the development of industry and enterprise in the State. We are proposing to insert the words "at all levels". This specifically relates to the rules the Minister has drawn up, as the basis for the formation of this agency, that micro business will not be facilitated again. I tabled the amendment to tease out the kind of facilities the Minister will put in place for businesses of fewer than ten employees.
Forbairt provides an important service to small businesses. When she was in Opposition, the Minister was vocal in her criticism of a multiplicity of agencies. There are still concerns, however, about the Estimates. Do the four Dublin county enterprise boards have the organisation, scientific technological skills or the overall ability to deliver the kind of support necessary for small business?
We have partnership companies, Leader schemes, and county enterprise and development schemes, but many people feel Forbairt contributed in a fundamental way towards giving critical advice on technology, testing new innovatory products and, in general, giving extremely important support to micro business. Very often in the hi-tech area micro businesses develop to become SMEs and larger companies.
What plans does the Minister have to develop a more coherent service for smaller companies with under ten employees? Does she believe the matter should be open ended in the Bill? Perhaps we should give Enterprise Ireland the remit to service all Irish business and not simply draw the line at those employing ten or fewer workers.
Amendment No. 12 seeks to enhance the functions the Minister envisaged in subsection 1(c). The 1986 Act would not constrain the ability to help service industries. The first amendment arises from a concern that the Minister does not have in place any significant new resources for county enterprise boards, or any other area of business support, to make up for what she is now taking away by pulling Enterprise Ireland out of the field of small or micro business.
The discussion document states that "Enterprise Ireland should not as a rule assist companies under ten employees". On Second Stage we all raised concerns that a small hi-tech software producer in the service industry may have only three or four employees. Nevertheless, it might be marketing £6 million or £7 million worth of business. Such firms must have access to all Enterprise Ireland's services. Can the Minister satisfy me that they will not be precluded from getting those services and that a judgment will be made? She indicated as much in her speech. There is no point in saying county enterprise boards could deal with a firm selling services worth £7 million. They are dealing with forms selling services worth between £50,000 and £200,000. Will the Minister assure us on that point, which is not in the Bill but is included in her mission statement?
With regard to whether amendment No. 12 is defined under the meaning of the 1986 Act, An Bord Tráchtála legislation included the provision of trade promotion services to the construction services sector. This is a big area and many construction companies are getting lucrative contracts abroad. As that has been repealed, I do not know whether subsection (c) still covers promotion, assistance, and development in the marketing of service industries. Does it include the construction industry? If so, it probably does not need an amendment such as No. 12. It is important that the construction industry should have this service.
I agree with Deputy Owen. Enterprise Ireland must help firms with fewer than ten employees. The county enterprise boards have a chief executive, perhaps two staff members and a voluntary board. They do not have sufficient resources to help many small companies of which there are many in the west. The allocation of £21 million for the 26 county enterprise boards is not sufficient.
Our purpose is to streamline the operation and avoid duplication. I accept what the Deputies are saying. There will be no hard and fast rules. Enterprise Ireland will help any company that has the potential to grow or is growing. It would not be acceptable, for example, for Enterprise Ireland to help someone establish a hairdressing salon or a nursing home - worthy as those areas of activity are. Forbairt - and in the future Enterprise Ireland - sit on the county enterprise boards and on the board which evaluates projects. There have been cases where companies with fewer than ten employees - particularly those with a technology and overseas focus and growth potential - have been helped by Forbairt. That will continue to be the case but it would not be appropriate to specify that in legislation. It will be dealt with by policy statements and flexible arrangements.
The construction services will be included. We will make a composite order to make sure the services provided by the Irish Trade Board will continue to be provided by Enterprise Ireland.
I welcome the Minister's assurances concerning the size of companies that will be helped.
Amendment, by leave, withdrawn.
I move amendment No. 8:
In page 7, subsection (1), between lines 23 and 24, to insert the following:
"(b) to provide trade promotion services to exporters of goods and services,".
Amendment put and declared lost.
I move amendment No. 9:
In page 7, subsection (1), line 24, to delete paragraph (b) and substitute the following:
"(b) to assist enterprises in the development of marketing programmes for goods and services in the State and outside the State,".
Amendment put and declared lost.
I move amendment No. 10:
In page 7, subsection (1), line 24, to delete paragraph (b) and substitute the following:
"(b) to assist enterprises in the development of marketing programmes,".
Amendment put and declared lost.
I move amendment No. 11:
In page 7, subsection (1), between lines 24 and 25, to insert the following:
"(c) to provide trade promotion services to exporters of goods and services,".
Amendment put and declared lost.
Amendment No. 12 not moved.
Amendments Nos. 13, 14, 15 and 16 are related and may be discussed together.
I move amendment No. 13:
In page 7, subsection (1)(e), line 28 after "to" to insert "assist business to".
I return to the point made by Deputy Rabbitte concerning the work provided for Irish business for many years by Forbairt, one of the agencies to be subsumed into Enterprise Ireland. The Minister has, to some extent, ignored the critical area of scientific and technological innovation. The legislation should clearly state the scientific role of the new agency. The Minister has taken an extremely narrow view of the scientific and technological support to be provided by Enterprise Ireland. During the Second Stage debate I referred to a recent visit I made to Forbairt. That agency is providing fundamental support for innovation and research to keep Irish industry to the forefront of innovation and technological development. It is essential that Enterprise Ireland continues that role.
Recent reports have shown that the amount of money spent on science and technology is significantly overestimated in Forfás reports. A recent report from an Irish company showed clearly that countries such as Denmark spend twice as much on science and technology per capita as we do. The Minister is trying to remove responsibility for science and technology from the new agency, abandon the achievements of Forbairt in this area and weaken Irish technical innovation. The Minister has distinguished between academic research and industrial innovation. We are not asking that Enterprise Ireland finance arcane research. The research done by Forbairt provided critical support for technical innovation. These amendments seek to have this important function restored to Enterprise Ireland. Deputy Rabbitte in Government tried to strengthen this area and we may be needlessly weakening this aspect of the new agency.
The former Irish Trade Board, Bord Tráchtála, had a specific brief for the promotion of industrial design. The word "industrial" has been dropped from this Bill. It is widely recognised that industrial design is the most economical way to increase competitiveness and the cheapest route to product innovation. I hope Enterprise Ireland would not set aside the need for assistance for industrial design. It is the critical link between science and technology and the marketplace.
Academic research is extremely important. If we want to use it or transfer the skills that have been identified by it, there is a need to ensure a direct link with the marketplace. I share Deputy Broughan's disappointment that the emphasis the previous Government placed on this area through the former Minister, Deputy Richard Bruton and the former Minister of State, Deputy Rabbitte, could be lessened. I do not want any rowing back on the hard headed approach taken by the previous Administration to ensure scientific research was advantageous to companies.
A small economy such as Ireland can gain from such an approach. We cannot match the scale of the large producing countries but we can make a mark in terms of industrial design and scientific and technological innovation. Will the industrial design function of the ITB, which will be transferred to the construction services area, be covered by the Minister's regulations? If so, I would be reassured that the Government is not reneging on the actions of the previous Administration.
Why is there no mention in section 7(1)(e) of technology transfer? The last report I read suggested that approximately 25 per cent of companies carry out research and development on a regular basis but approximately 42 per cent of innovatory companies or enterprises buy in technology services. Has it been omitted for a specific reason? It could not be argued that the words used generically include that aspect. I am interested in the Minister's views on this matter and also on how it relates to staff.
I do not question the Minister's comments on the frequency of meetings and the exchanges that have taken place. However, there is not uniform warmth among the spectrum of staff for this entire venture. The issue being addressed is relevant to a large section of the staff who have experienced more than one change in their lifetime. Not all the improvements were immediately obvious in terms of the changes made.
Regarding the venture capital scheme initiated by Forbairt which involved up to £500 million in various companies, has the Government any intention of making a cash call at any stage? Will Enterprise Ireland take over that fund?
The scheme did not involve £500 million, but the venture capital funds will continue. One of the schemes launched recently in conjunction with AIB and Forbairt is a new campus company fund. This will turn much of the research in third level institutions into business opportunities.
I understand the matter raised by Deputy Rabbitte is dealt with in the 1986 Act. It will be a delegated function from Forfás to Enterprise Ireland. This is the appropriate way to deal with the matter.
Is the position that, as in the 1986 Act, Forfás will delegate the execution of the statutory obligation to the new enterprise agency and its staff?
I understand it is covered under Forfás's powers in section 9 of the 1993 Act.
Regarding subsection (1)(e) which relates to functions, design was included in the context of innovation research and development. Deputy Broughan seeks to limit research and development to companies. Much valuable work is being done in this area. In Europe science pulls technology while in America and Japan technology pulls science. None of the top ten technology companies in the world is European. Everybody knows the stories about the inventor of the tape recorder. He could not get anybody in Europe to fund the idea so he went to the United States and the rest is history. There are many similar examples.
We want to ensure that technology pulls science and the technological capacity of companies is improved. Deputy Rabbitte is correct that over 50 per cent of Irish companies do not carry out any research and development. Only a tiny proportion allocate substantial sums, such as £100,000, to this area. If companies are not innovative or involved in research and development they will not be able to survive and sustain themselves in the competitive marketplace.
The definition of research and development is broader than simply within a company. The universities must also be involved. At present the universities have a programme in advanced technology with a view to increasing the technological capacity of companies. Much other research is done in third level institutions. I do not want to limit research and development. Deputy Broughan's intention is correct but the effect would be to limit science and technological research to the companies. Much of that work can take place in universities once it is focused on the need to develop the capacity of the companies in this area. We want to ensure that is borne in mind in so far as Enterprise Ireland is involved in this area. Basic research which is more relevant to education and science and third level education should go to that area.
Regarding Deputy Owen's query about industrial design in terms of the existing Trade Board and the 1991 Act, we did not want to include industrial design because there is also software design. Industrial design refers to product design. It is clearly focused on the manufacturing sector but there are other forms of design, such as software and packaging design, which are also important in the marketplace.
There is also fashion design in the clothing industry. Unless we are moving up the high value added chain with branded and better quality products in the textile and clothing area we will not be at the races because of the much lower cost base in many parts of the world. We use the broader definition of "design". It is not limited to product design which I am advised would only refer to the manufacturing industry and specific products.
I assure the Deputies that we want to keep as much of the budget currently spent on research and development by Forbairt in conjunction with many third level institutions focused on companies and their needs. It should not only be done in house but in conjunction with the universities. Therefore, it is important to use the broader definition which does not exclude universities and third level institutions or a role for Forbairt.
Forfás provides the secretariat for the Irish Science Council. Therefore, Forfás has a role in relation to science, research and technology. It is important to maintain that umbrella policy role and involvement of Forfás in this area. Deputy Rabbitte was involved in this area and knows more about it than I do. Much money is spent in this area, although not as much as in others because the resources are not available. Research can gobble up huge resources, therefore, we must focus it on the areas in which we can achieve better value added and greater potential for the country.
Many people consider that Forbairt is focused on scientific and technological work directly related to the service of industry. The Bill is more limiting than the amendments. As other speakers mentioned, 50 per cent of businesses do not carry out any research and development and there may be a danger that if Enterprise Ireland does not do it, nobody will.
Section 30 of the 1986 Act deals with technology acquisition and the delegated functions are contained in section 9 of the Industrial Development Act, 1993.
But we do not know that; it is not stated in the Bill. If we had not raised the point, the Minister would not have told us.
Amendment, by leave, withdrawn.
I move amendment No. 14:
In page 7, subsection 1(e), line 28, before "technological" to insert "the scientific and".
Amendment put and declared lost.
Amendment No. 15 not moved.
I move amendment No. 16:
In page 7, subsection (1)(f), line 31, after "the" to insert "scientific and technological".
Amendment put and declared lost.
Question proposed: "That section 7 stand part of the Bill".
The principle of subsidiarity is an EU tenet and I wish to see the functions of the agency included in the policy statement or report and carried out at local level near the client and made compatible with efficiency and effectiveness overall. It has been proven that the various bodies which operate at local level have been very effective and I wish to see Enterprise Ireland do the same.
There is exponential growth in E-commerce and President Clinton's guru on the subject visited Ireland last week. However, the Minister was in America and was not able to meet him. There are great opportunities and the idea has been mooted that America will use Ireland as an entrepot to Europe. Ireland is the only English speaking country involved in the euro and it is independent of the London financial markets which might be seen as a rival to the US. We must modernise. Is it possible to include in the policy statement “to develop industry, enterprise and E-commerce in the State”?
Will private funding be included in this area? Subsection (3) seems to be a recipe for confusion with the appointment of an individual to perform functions and another individual authorised by Forfás and agencies.
I refer to subsections (4) and (5). Subsection (4) says: "Nothing in this part of the Act shall be construed as affecting or limiting in any manner the existing functions of any Minister. . . ". Subsection (5) is a variation on the theme. Since when did we draft legislation that inhibits a Minister? Does some Minister want to travel abroad that we do not about? We should be told now that we are to curtail his ability to sell Ireland. Who does this cover?
What is the background to subsections (4) and (5)? Where does an agency such as Bord Bia come in? If the agency deals with the export of a certain product which is more relevant to another Minister, such as an educational service, it talks to that Minister. These subsections seem to suggest the Minister for Enterprise, Trade and Employment will not hog everything and will allow others to contribute. For instance, the Minister for Education and Science visited Prague recently to promote Irish educational services.
The subsections are taken from the Export Promotion Act, 1959, and the Trade and Marketing Promotion Act, 1991. The Minister for Agriculture and Food has responsibility for the food industry and plant and animal health, the Minister for Finance has responsibility for financial services and the Minister for Public Enterprise has responsibility for telecommunications. Those Ministers will retain responsibility for those areas.
I agree with Deputy Ardagh that business should be conducted at as local a level as possible. We will probably need to examine how we can co-ordinate the local organisation of the various agencies so that they marry together better because regional definitions tend to be different. I very much agree with his comments on the Internet. After four years the Internet has 55 million users. It took 38 years for radio to achieve the same number of listeners and 13 years for television to attract the same number of viewers. The Internet is impacting very rapidly on our lives and there is a great deal of new business involved which Ireland can access. That is one reason the Government has made certain decisions about telecommunications. We need more players to provide alternatives in the marketplace. Deputy Rabbitte was involved in the science park at Citywest. The Government is currently examining the possibility of establishing a digital park so that there are areas in the country which have the infrastructure to access many of these opportunities.
Question put and agreed to.
Sitting suspended at 6.45 p.m. and resumed at 6.55 p.m.
Section 8 agreed to.
SECTION 9.
Amendments Nos. 17, 18 and 21 are related and may be taken together. Is that agreed? Agreed.
I move amendment No. 17:
In page 8, subsection (2), line 41, after "members" to insert ", not less than four of whom shall be nominated for appointment by the Minister by I.B.E.C., I.C.T.U., the Exporters' Association and a staff representative respectively".
The legislation provides for a board consisting of 12 members but it is silent on where they shall come from. I am not being derogatory of this Minister or her successors, but the Minister of the day will be able to appoint whoever he or she likes to this board and there is a need to be more prescriptive in setting it up. I do not want to tie the Minister's hands because from time to time it will be good to have flexibility about who might belong to the board. My amendment endeavours to recognise some of the key sectors which will have an input into the new organisation, Enterprise Ireland. It provides that IBEC on behalf of businesses, the ICTU on behalf of the unions, the Exporters' Association who represent the vast number of companies that export their produce and a staff representative separate from the ICTU nominee should be nominated. The National Standards Authority of Ireland has at least one staff representative on its board. The Minister has not included one on this board. She should at least accept nominations to the board from those sectors. If she accepted my amendment she would have eight further places to fill which could include whatever skills, technology and gender she likes.
During the Seanad debate the Labour Party put a very strong case for having a good gender representation on the board in the context of our policies over the past number of years of attempting to have each gender represented by about 40 per cent of the membership. It would be important to do the same here because there is an ever increasing number of women involved in business - hopefully at the higher levels - and this needs to be reflected in the agency as well. The Minister should make a commitment to that.
I have examined Deputy Rabbitte's well worded amendment on staff representation and I support it. I also support Deputy Owen's amendment but there should be at least two staff members, selected by their colleagues, represented on the board. In the semi-State sector there has been a tradition of encouraging staff representation. We have seen recent developments in relation to staff ownership of bodies which are moving out of the State sector. It is critical for the success of the new agency that the workers would be a key component in its policy making, in other words, the board would be formed by the staff members; in this way, the workers on the shop floor could have an input.
In conclusion, it would be important that the executive of the new organisation would have a number of people with a strong technical or scientific background. Technical and scientific experience can be defined in a broad sense; for example, people with economic training could also be included, but it would be desirable if we could have a coherent view on innovation from the new agency and that this could be reflected in the board.
I will be disappointed if Deputy Owen's prescription is not followed by the Minister of the day. It would be very important to include members of the Exporters' Association, ICTU, etc. on the board, but I am not convinced by the argument that they ought to be there as representatives of these organisations. The Minister and her successors ought to ensure the areas prescribed by Deputy Owen are given seats on the board but not in a representative capacity. It is not a good idea to do this in a functioning board of this type.
Before I was sacked from my previous job and the people demonstrated such a lack of foresight, I had enshrined my amendment in the NSAI Bill which is now law. It does not seem to have caused the sky to fall on Grafton Street. There are workers on the NSAI board doing a splendid job and everybody acknowledges that. That move has not done the dreadful damage that was predicted in some quarters. The same would happen in this case. That particular formulation leaves open to the Minister the optimum discretion in terms of how she does it, etc., but it enables her, after consultation with the trade unions and staff associations, to select appropriate representation from the staff area. After all the agency is people oriented. People are critical to whether Enterprise Ireland does its job more energetically or imaginatively than the organisation that preceded it. The arguments opposing staff representation are outdated. This is only one example of it and it has worked well.
I sympathise with Deputy Rabbitte because he feels so hurt about losing his job. Now that he has more time on his hands to develop his love relationship with the Labour Party he might tell us his aspirations for the future. Perhaps he can give us his version in the future.
The Chairman's comments are very comforting.
If I were to accommodate all requests from Opposition Deputies we would have to expand the board substantially to deal with all of the different interests.
Some board members can be a number of things; they can be female, staff representatives and technologists, etc.
They could be mutually exclusive. First, in relation to the quota proposed by Deputy Broughan for female representation, there is nobody more committed than me to involving women in all aspects of our society, particularly decision making but I am not certain quotas achieve that. It is a bit like my attitude to change the name of the agency to an Irish one. Tokenism is no subject for clearly changing attitudes, practices and promoting the role of women.
The Minister has broken the glass ceiling.
That is true but political parties and the Oireachtas do not have quotas. Deputy Broughan's party, the Labour Party, has three female Deputies out of a possible 18. In the last Government there was only one female Cabinet Member out of a possible six Members from the Labour Party so that was not a 40 per cent quota.
That is a different issue. I sometimes think it is a bit much for those of us who do not have quotas in our own field of activity to seek to impose quotas on others. Recently I appointed new people. We want people with experience of different sized companies. We want people with expertise in exports; Senator Henry suggested someone who had worked abroad and who would have a wider perspective. I will take all those considerations into account. We want people with ideas and confidence who can help Irish business grow.
There are worker representatives on many commercial State bodies. However, I do not think what we are doing here can be compared with a commercial State body. It is right in a company whose ownership may change, where work practices may change, such as the contracting out of services - as has happened in many State bodies - or where State bodies may have to be open to the forces of competition or change their capitalisation, that the workers whose lives and futures are affected by those decisions, particularly those concerning employee numbers, are represented when those decisions are made.
However, we are not talking here about a commercial organisation. The executives and staff who will work for Enterprise Ireland will be dealing on a day to day basis with companies and will be making recommendations on grant aid and assistance for those companies and the board will have to decide whether that assistance should be given. It is not right, in that context, for those working in an executive capacity on a day to day basis with companies to also sit on the board which will be making those decisions. The whole purpose of having a board is to have an independent process to evaluate the packages being suggested or promoted by the staff working for the agency.
This is not an agency where it will be a case of us v. them, workers v. management or workers v. the board. An Bord Tráchtála and Forbairt have a very good history of management and staff relations. They have many sub-board structures, joint consultative councils and participative councils where issues of concern to both staff and management are resolved and dealt with. That is the appropriate way to deal with it in this case.
I do not want to impose artificial restrictions on who should or should not be on the board. We want the best board from the beginning so that the agency gets off to a good start. I was very pleased when the former chief executive of Bank of Ireland, Pat Molloy, agreed to serve as the chairman designate and is currently the chairman of Forbairt. He has had outstanding experience in his banking career in dealing with companies of all sizes. He has worked abroad with many of those companies and he understands the remit and purpose of this new agency. He is an outstanding person to chair the board in its infant years.
I am sorry I cannot agree to the various requests of the Deputies. It is right there should be the maximum amount of flexibility. The chief executive will sit on the board because it is right that the person responsible for running the organisation on a day to day basis should work very closely with the board and should be aware of its policy decisions and views on many matters.
The purpose of this organisation is to serve its consumers and client firms and respond to their needs so that the capacity of Irish companies can grow to improve their performance, employment numbers and competitive position. That must remain the focus. This organisation is not about employing people but about responding to the needs of this economy. It will have a very highly motivated workforce. It will bring people together. It will have a very clear focus and there will be no confusion and duplication between three different bodies - and particularly the two bodies which exist at the moment. Some 61 per cent of the companies helped by Forbairt were also being helped by An Bord Tráchtála and led to a great deal of confusion. It also made it difficult to assess agency performance because each agency claimed the assistance it gave to particular companies led to their success and blamed the inadequate response of the other agency for any failures. For that and other reasons I cannot accede to any of the amendments proposed by the Opposition.
Amendment, by leave, withdrawn.
I move amendment No. 18:
In page 8, subsection (2), line 41, after "members" to inset "with each gender represented by at least five members. There shall be four members elected by the staff of the agency. Not less than four members shall have had scientific and technological training or work experience".
Amendment put and declared lost.
Amendment No. 20 is related to amendment No. 19 and both may be taken together by agreement. Is that agreed? Agreed.
I move amendment No. 19:
In page 8, between lines 42 and 43, to insert the following subsection:
"(4) The Board of IDA (Ireland) and Enterprise Ireland shall include the chief executive of Forfas.".
The chief executives of Enterprise Ireland and IDA (Ireland) are on the board. Why is the chief executive of Forfás not on either board? It might be practical to include the chief executive of Forfás, who will be so involved with these two organisations, on the board as they will form a triumvirate. I have tabled this amendment to ensure there is the necessary liaison between Forfás, which is the parent agency, and the boards of IDA (Ireland) and Enterprise Ireland. Why has the Minister omitted the chief executive of Forfás in this instance?
I support Deputy Owen. This depends on what the future role of Forfás will be. We have had massive debates on this matter and the Minister's former colleague, Michael McDowell, used to make interesting comments about Forfás, which he wanted to obliterate as soon as possible and just have front line agencies. However, we have seen the role played by Forfás in research and it frequently produces very valuable reports which provide the Dáil with some interesting viewpoints on the economy and the development of Irish business.
It would be strange if this board did not have direct liaison with the chief executive officer of Forfás. Everyone knows the IDA has a very strong esprit de corps and a very successful track record. However, people have wondered whether it will have a different role as a stand alone agency. If we are serious about Forfás having a supervisory role, its chief executive should be on this board.
I support what has been said. I cannot figure out the extent to which I am influenced by the calibre of the present chief executive, who would make an immense contribution to getting this board up and running. I would support the amendment for that reason alone.
I agree with the last point made by Deputy Rabbitte about the present incumbent, John Travers, who does an outstanding job. I gave consideration to looking at the role of Forfás. It is essentially a policy making organisation. The Culliton report drew attention to the absence of policy making in the whole industrial policy area. One part of me felt we should take Forfás into the Department and keep it as a policy unit. However, what would happen to the policy unit when it made demands on the Department and its staff?
For a host of reasons it is right that Forfás should remain as a stand alone agency. It has come of age. Many of the decisions made by Government across Departments which affect industrial policy were made on foot of very fine reports from Forfás, for example, its outstanding report on telecommunications, the work it has done in the area of competitiveness and the skills issue and the services it has provided to many organisations. It is right to have a stand alone body which can stand apart from individual Departments and take a broad view of the needs of the economy, particularly from an industrial development perspective.
The reason the director of Forfás is not to be a member of the Board - a matter mentioned in the submission of the NSF union to Deputies - is that Mr. Travers's job is to run Forfás, which is a policy function. The agencies under Forfás, such as IDA Ireland and FÁS, must sit together on the board if we are to co-ordinate policy between them, but it does not follow that the chief executive of the umbrella body should be in all the agencies underneath.
Mr. Travers would do nothing apart from going to board meetings if he was involved with the boards of FÁS, IDA Ireland and Enterprise Ireland. It is right that he should stay chief executive of Forfás and be responsible for running the agency that has responsibility for co-ordination. I have not discussed this with him personally but I would be amazed if he wanted to be involved in the day to day running of any of these subsidiary organisations of Forfás, though that may not be the correct legal term. I know he is very busy at present but if he were on one board we would have to put him on the boards of the IDA and FÁS for consistency. I do not think that is necessary or practical.
Section 7(k) states ". . . to carry out such other functions as may, from time to time, be assigned to it by Forfás with the consent of the Minister . . ." My amendment is tabled not only because the NSF was anxious to know why Mr. Travers is not included, but because there is some merit if Forfás is the parent agency. If it is to have the power to hand over functions to Enterprise Ireland, does it not make sense to have that linkage in place so that Forfás will know what kind of functions might be appropriate to send? Forfás would also know what Enterprise Ireland is doing that might be relevant to it. The Minister is making Forfás the lead, but at some stage she may decide to make Enterprise Ireland the employing agency. If not the chief executive, the Minister may decide that someone from Forfás should be on the board in case Enterprise Ireland decides to do something only to discover that Forfás has already done it.
Forfás will have the power to delegate statutory or policy functions to the agencies affiliated to it. However, it does not have the power to delegate executive functions; its function relates to policy and it is right that it should concentrate on policy. Clearly the chief executive of Enterprise Ireland will be a member of Forfás and in that way there will be a link between them. However, I do not think it would be right to have the chief executive-
The chief executive of Enterprise Ireland will be on the board of Forfás?
Amendment, by leave, withdrawn.
Amendment No. 20 not moved.
I move amendment No. 21:
In page 8, between lines 42 and 43, to insert the following subsection:
"(4) The Minister, after consultation with any recognised trade unions or staff associations concerned, shall make such regulations as are considered necessary or desirable in order to provide for staff representation on the Board.".
If the Minister does not want to examine this matter for Report Stage I will be calling a vote on it. She says she wants the best board and that a representative of the staff is not incompatible with that objective. She also says that having an executive person on this board would be inappropriate, but the chief executive is on the board by explicit provision. I do not think these concepts are mutually incompatible.
Will the Minister return to this on Report Stage?
I will not give a false promise. I cannot concede this; the executives who deal with companies and grants, who make recommendations to the board, should not also be on the board. There is also the practical issue whether to have an overseas member of staff on the board. At what level does one include a member of staff? It is neither practical nor necessary. It is not an "us and them" organisation; it is not an organisation where conditions of employment will be adversely affected by the new arrangements. Present arrangements in Forbairt, the Trade Board and the joint participative councils work extremely well in resolving issues of mutual interest between staff and management.
Amendment put.
The Select Committee divided: Tá, 5; Níl, 8.
Tá
- Broughan, Tommy.
- Owen, Nora.
- Perry, John.
- Rabbitte, Pat.
- Stanton. David.
Níl
- Ardagh, Seán.
- Callely, Ivor.
- Daly, Brendan.
- Harney, Mary.
- Lenihan, Conor.
- McGuinness, John.
- Moynihan, Michael.
- O’Flynn. Noel.
I move amendment No. 22:
In page 9, between lines 20 and 21, to insert the following subsection:
"(10) A member of the Board (other than the chief executive officer) shall not serve for more than 10 consecutive years.".
This issue was raised in the Seanad by Senator Quinn, among others, who rightly made the point that two terms of office should be sufficient. I agree. It is important that nobody wouldserve on the board for more than two terms. Therefore, I have tabled this amendment accordingly.
Section 9(8) states:
On the third anniversary of the establishment day and thereafter on each anniversary of the establishment day, two of the members of the Board (other than the chairman and the chief executive officer) shall retire from office.
That implies that the term for some of the members is three years. The Minister is saying she does not want anybody to have more than two terms. In my maths, three plus three equals six. Yet, according to the Minister, three plus three is ten.
Maybe I am not reading it right. Is the Minister saying that they will all serve for a five year term, other than this unfortunate person who has to retire after the third anniversary?
In recent years - I think it first began when the former Minister for Finance, Deputy Quinn, was implementing the findings of the Culliton report - a provision was introduced into the legislation to allow for a rota system so that an entire board did not stand down after five years and there would be some continuity and uniformity. A provision was introduced in the legislation that after three years has passed - and clearly we do not want to start in year one, we want to give people an opportunity to be there for three years - at the end of the each year names go into a hat and two names are chosen, unless somebody wants to leave the board. Those names then offer to stand down and the matter goes to the Minister. The Minister of the day may choose to reappoint somebody. In the case of a vacancy that arose in An Bord Tráchtála I did reappoint one of the people who was due to leave the board.
The provision is to allow flexibility and uniformity. Somebody could be reappointed, they could come off after three years and could be put back on the board. Their names might not come out of the hat for another five years so they would have served eight years and could go back for two. This is to give us continuity and flexibility and ensures that we are not standing down an entire board after five years with a new board coming into operation. It is a good arrangement and it works well with the IDA, the outgoing boards of An Bord Tráchtála, Forbairt and Forfás.
At the end of each calendar year two people come off the board. The names go into a hat and if one is on the board for five years one automatically comes off. It is for the Minister of the day to decide whether to reappoint the person.
On a point of order, where does it say "five years". Section 9(7) says "Each member of the board shall hold office on such terms. . . ". Have I missed that section?
I have just moved amendmentNo. 22.
Yes, but that amendment says "shall not serve for more than 10 consecutive years". Where does it say that the appointment is for five years to start with?
Each board is for five years. What I mean is that nobody——
Where does it say that? I see no reference to five in any section.
After three years, two people will come off the board and after four years a further two will come off. It will be seven years before all members come off the board. Nobody can stay on the board for more than ten consecutive years, regardless of how they are appointed or when the join. A member could leave the board for a year or two and then rejoin.
The term of appointment is three years.
Two members will leave after three years.
Leaving aside the provision for members stepping down after three years, are members appointed for five years or on a wing and a promise of getting through the vote after the third year?
I am confused by the use of the word "consecutive". Is its inclusion necessary?
In most agencies people are appointed for five years. I understand that when board members of IDA Ireland, Forfás, Forbairt and An Bord Tráchtála have served two years, two names are drawn from a hat and forwarded to the Minister who decides on reappointment. The term of office for most boards is decided by the Minister to be five years. When recently reappointing the board of FÁS it was decided that the term of office should be three years. My intention is that the term of office of Enterprise Ireland will be five years. After three years, two board members will leave the board but may be reappointed. After four years two members will leave the board and after five years two further members will leave. The board will not serve beyond five years.
Ten years is being provided for.
People can be reappointed.
It is not clear how somebody can be appointed for five years if they have to leave the board after three years.
It will be necessary to guess. How is it possible to appoint somebody for five years and at the same time tell them they must leave the board after three years?
Perhaps the Deputy is correct. Perhaps we will not provide for a five year term. It should be possible to review membership of the board after five years in terms of requirements, etc. The chairman will remain in office for five years.
I agree with that provision, but I am not clear how somebody can be appointed for five years and told to leave the board after three years——
——because their name has been drawn from a hat.
I have come across boards where people are appointed on the clear premise that there will be rotation. I do not know if the Minister or the Department is considering something along these lines.
I have confused myself. Where there is rotation there is no need to specify a five year term. Some people could be members of the board for seven years but some will come off after three. The intention is that new people will join the boards and that nobody will be a member forever. It provides some opportunity for the Minister to appoint people on an annual basis to the different boards. Since taking office we have appointed two people to An Bord Tráchtála, two to Forbairt and two to the IDA. Each board had two vacancies arising at the end of last year.
I would not be happy to provide for the appointment of somebody for up to seven years. I did not understand that was the case.
Perhaps we can return to the matter. I agree with the Deputy. I do not think anybody should be appointed on a once off basis for more than five years. According to what I have said some people could be appointed for seven years.
I will examine this matter for Report Stage in the context of clarifying the matter. People would have to be reappointed - they could not simply remain. Under the initial Bill there was no limit - people could have been members for 20 years.
Section 9 (14) states that "a member of the Board whose period of membership expires by the effluxion of time shall be eligible for re-appointment as a member of the Board.". One could be effluxed after five or ten years. I assume the section will be qualified by the new section being inserted by the Minister.
Therefore effluxion will cease after ten years.
That is correct, unless the member has had a break from the board.
Why is the chief executive excluded from the provision for ten consecutive years having regard to practice in TLAC?
It is desirable that the chief executive be a member of the board. This is the general practice in all State companies and it is good. Difficulties arose when such provision did not exist. Chief executives have a contract of appointment. I think it is a five year term which can be renewed by the board which decides on the matter. A chief executive could be in place for ten years, something which is desirable. I think the limit is two terms, I will check this matter.
As they will be gone after ten years whatever happens, what is the point in excluding them in this provision?
The existing chief executive has been in office since 1993.
That is missing the point. The Minister's amendment says that a member of the board, other than the chief executive, shall not serve for more than ten consecutive years. In the light of current practice, why is the chief executive excluded? I agree that the chief executive ought to be a member of the board. However, why are we excluding him or her?
Perhaps it is the title of chief executive rather than the person who is being excluded.
TLAC arrangements do not apply to chief executives. As their appointment is for five years it can be renewed and I understand it can be renewed for more than one term. The outgoing chief executive of IDA Ireland will have served nine years when his current term comes to an end in the autumn. As everybody knows, he is not going forward for another term. However, in theory he could be appointed for another five years, giving a total of 14 years. It seems the restrictions do not apply to the agencies.
I am getting the uncomfortable feeling that, because this is the last week the Dáil is sitting before the recess and for some reason the Seanad is not sitting next week, the Minister feels constrained to get the Bill passed without changing a letter in it. I am aware of the position as outlined by the Minister and that chief executives are not excluded. Why not? The Minister is providing for the establishment of a new agency, namely, Enterprise Ireland, and it is her business to establish the parameters, including those relating to the chief executive. In my comments I am not referring to the present incumbent. If seven years is an adequate time in the context of those at the top of the public service, something that seems to have been a progressive change, why should ten years not be considered a sufficient period for a chief executive of an agency? It is a question of policy.
The Deputy is aware that the term in the context of the public service is seven years. At the end of those seven years, the secretary is guaranteed an equivalent job or certainly the same level of remuneration for the rest of their career, if that is necessary. There have been many cases in which we have had to try to slot people in. Many people move on and move out and it has been a good practice.
As regards the chief executive, after five years they would have to apply for their job back. If there is an outstanding chief executive, it is not desirable that we say their term of office should end after five or seven years. For example, if Kieran McGowan was willing to go forward again as chief executive of the IDA, we would be foolish not to reappoint him because he has done an outstanding job. Hard rules do not always make good law and we must be flexible. Flexibility exists in this regard and the appointment is for five years. The board, which observes the daily performance of the chief executive, can decide whether they should be reappointed for a further five years. In that context, the chief executive must apply for their job back. I understand there is a completely open procedure for the appointment of a chief executive after five years.
As regards the appointment of the chief executive designate, it was a totally open procedure and outside head-hunters were used. The board made the decision and I had no involvement, good, bad or indifferent. That is the way it should be and the way it will continue with all these agencies. We need the best people for the job. I am not sure we should exclude people because they have served for five or seven years.
On salaries for these positions, comparing like with like and the role of a chief executive of such an agency dealing with companies of various sizes and with global operations, it is not too easy to get people outside the wider public sector to even apply for these positions because the remuneration packages are not as attractive as many people believe they should be. If a chief executive has done a good job, they reapply for their job after five years and if the board is satisfied, I see no reason they should not be reappointed for a second or third term.
If a person is young and dynamic, we should not lose them simply because their term is up. I agree one could put forward arguments both ways. The TLAC system in the wider public sector is, by and large, working well because it has brought forward young people to secretary-general positions in Departments. I am thinking of the Department of Enterprise, Trade and Employment and many other Departments which have young secretaries-general. That would not have happened under the old system. The TLAC system has worked well but has not applied to the agencies.
First, nobody is arguing that the term of office of the chief executive should not be discontinued after five years. We are discussing an amendment tabled by the Minister which states that apart from the chief executive, members of the board may not serve for more than ten consecutive years. I am merely trying to tease out the thinking behind it. For the record, I did not insinuate the Minister had anything to do with the appointment of the present chief executive nor did I question his suitability for the post. I raise the wider policy question.
I do not know if the Minister wants it to stay on the record but I did not know we were having a job finding slots for ex-Department secretaries. I do not know who she has in mind and cannot remember how many are looking for slots as paper keepers in the Department in which they were secretaries. I do not believe there are too many as most have moved on. If the Minister was in my position she would strongly support my argument that it was a good progressive change to allow access to the top by young people and that they get out of there after seven years. Generally speaking, that has been the experience. Again, I raise the policy question of why that should not apply in the agencies.
I am anticipating what the Minister might say and I understand her point. If somebody of outstanding talent opts to work in what is essentially public sector employment at a low salary, everybody would agree that compared to the incentives and share options available in the private sector, Mr. McGowan, for example, was mad to work in this agency for the past few years. The salary and remuneration package does not reward in the same way as in the private sector. It is obvious that if somebody is singularly dedicated and wishes to opt for public service type employment in the IDA or elsewhere, they should be given the option to stay on and have security of tenure if the Minister, the board and others believe it would be positive. I have no problem with this issue which is entirely consistent. The Civil Service, however, is quite different.
Section 13 deals with whether the chief executive should remain on the board, which is a separate issue.
Am I right to say section 13(4) states: "The chief executive shall, for the duration of his or her appointment, become an ex officio member of the Board and Board of Forfás”? Is it not tautology or superfluous to include that because subsection (4) of the next section allows the chief executive to remain a member of the board until their term is up whether that is for 11, seven or nine years? Obviously, we do not want a situation where the chief executive runs out of time after ten years and is still the chief executive. Who do we appoint to the board if they are not allowed be a member? I understand why the Minister must leave it open and that the chief executive may remain beyond ten years. However, it may not need to be included in this section if it is stated in section 13(4) that they automatically continue on for 11, 12 or 15 years?
My earlier point was that this section relates to the lifespan of ordinary members other than the chief executive officer. There could be two or three chief executive officers over a short period or one for a considerable period. This relates more to the chief executive officer.
With due respect, the chairman is not sponsoring the legislation. I would like to hear this from the sponsor. If the chairman ever loses his present job, he is an ideal candidate for the board but until then I would like to hear the Minister state the position.
Thank you for your support.
Deputy Rabbitte spoke about slotting people in. I would like to emphasise that it is a good policy that there is greater mobility, that young people are given the opportunity to become secretaries and that people are not in those positions forever. An outgoing secretary in their early or mid-40s is guaranteed, as I understand it, an equivalent post at an equivalent level of remuneration for the rest of their working life in the public sector. Most people, however, move on. A young person who has been a Secretary-General is very mobile from an employment point of view. It may not be the wish of everybody in the public sector to move on. However, they do not have to walk away after seven years and are entitled to be offered an equivalent or senior position in the public sector. I am thinking of one example where somebody stayed on and moved into an alternative position.
On the chief executive's term of office, I did not consider the length of the term because I was happy to accept the arrangements made when IDA Ireland, Enterprise Ireland and Forfás were established. We do not want to worsen anybody's conditions of employment; this applies not only to ordinary staff members but equally to the chief executive. The conditions of employment of the existing chief executives were for a five year term. In the case of one of the outgoing chief executives, special contractual arrangements were entered into. In fact, contractual arrangements were entered into with all the chief executives. All would have been offered an equal position in terms of salary, remuneration and so on to that which they had in the outgoing organisation.
It would not be good to limit the chief executive's term to five or seven years and to ignore the quality of the contribution they have made. At the end of five years, a chief executive must stand down and reapply for their job. If they are not doing a satisfactory job in the eyes of the board, they will not be reappointed. We have a best case scenario here. I am not certain we would want somebody to go because they have served a specific number of years. The outgoing chief executive of the IDA has served for nine years, which is a long time. I agree he may be an exception, but we must look at exceptions. If there is an outstanding chief executive the board should have the option to reappoint him for an additional number of years.
The issue here is not the requirement on a chief executive not to go forward after five or seven years, rather it is the Minister's amendment, which provides that a member of the board other than the chief executive officer shall not serve for more than ten consecutive years. Why should that not encompass the chief executive of the day? The eminent performance of Mr. Kieran McGowan bears out my point. As a long serving chief executive of nine years he chose not to serve again. It is a matter that ought to be discussed, given our experience of the public sector and of public management generally. It is as likely a scenario as that outlined in the argument about retaining an extraordinary individual put forward by Deputy Lenihan and the Minister.
The Minister may find it desirable in terms of public policy to act with freedom and not be constrained by statutory obligations in terms of the tenure of office of a chief executive. I do not refer here to Dan Flinter. It is undesirable when the Government finds itself unable to do something about a chief executive because it would cost an arm and a leg.
Is it being suggested here that no member of the board shall serve more than ten consecutive years? If so, do we also agree that the chief executive officer should always remain a member of the board? Surely we do not want a board without a chief executive officer being a member?
That is not the position.
That is my understanding.
That is the Minister's interpretation.
I agree with Deputy Rabbitte's point on Kieran McGowan. However, he chose to stand down. The board would not have made such a decision, nor would I have suggested it because of his contribution, the regard in which he is held and the manner in which he has gone about the job. Equally, we may wish to hold on to a very good person, perhaps for ten, 12 or 15 years. The flexibility for that will be provided. After five years the board can decide not to reappoint somebody. This means that somebody could go in five years or stay on for ten or 15 years or as the case may be.
The legislation is silent on for how long the chief executive may be appointed.
It is a matter for the board.
Amendment agreed to.
Question proposed: "That section 9, as amended, stand part of the Bill."
While the section identifies the membership and details of the members of the board, it does not provide any information on the location of the agency. Where will it be located? Given the weakness of industry in the west, the headquarters should be based in a regional location. Section 9(15) deals with the representation of women on the board. Are there women on the board of Forfás?
There are no women on the board of Forfás. There was one woman, Ms Frances Ruane, but I believe she was replaced by Mr. Scally approximately a year ago, before the Government took office. We have a long way to go in reaching the 40 per cent threshold in this regard.
We want the agency to be as regionally focused as possible. I do not wish to disimprove the pay, conditions and location of the existing members of staff. We have given a guarantee to that effect. People become accustomed to their place of work and are entitled to attend a workplace close to them and not in another region. However, there are options. For example, many people would like to live close to their roots. Nevertheless, much of the focus of the agency will be overseas with many of the staff involved in the export side. Subject to these requirements we will have a strong regional focus. Forbairt and An Bord Tracthála already have one. We will want to continue with that because we want to develop the potential of the regions.
Question put and agreed to.
Sections 10 and 11 agreed to.
SECTION 12.
I move amendment No. 23:
In page 11, subsection (1), line 8, to delete paragraph (d).
Much of the legislation in the last Dáil dealing with the establishment of new State bodies provided for the inclusion of politicians. However, bankrupts and various other undesirable characters,——
such as insomniacs should be barred from State boards. I appreciate that Members of the Oireachtas and the European Parliament are very busy. Perhaps civil servants needlessly exclude members of the local authority. The Minister for the Environment and Local Government is attempting to reform local government. He has established strategic management committees at local level where business, local State agencies, etc., will be involved in the exercise of local government with the councillors.
Given the genuine talent among the approximately 1,000 local councillors in the country, should this kind of provision preclude them from serving on a State body like Enterprise Ireland? Local councillors with very good backgrounds in business or technology could be ideal candidates and perhaps should not be precluded.
I understand the point Deputy Broughan is making - it was also made by many Senators - but it is important that we separate the day-to-day operations of an agency which a board must oversee and the policy making aspects with which politicians at every level are involved. It would be difficult for local councillors from particular regions to separate their representational role if they sat on a board which decided whether to allocate money to different companies. That would put councillors in an impossible position and would cause difficulties for the board. We know controversy arose lately about whether a Minister instructed an agency to grant aid to a company. People were concerned that may have happened, but I emphasise that there is no evidence it did. One can imagine what would be said if a local politician became a member of the board and sat in on meetings which did the evaluation and was involved in an intimate way with decisions to grant aid or assist companies from there own region or companies with which they may have contact. For that reason I believe this is not desirable.
How would a local representative be chosen? He or she would invariably be a member of the party in Government at the time. This would lead to accusations that a board was partisan and operating to a political agenda, even if only one member was a public representative. I was interested in extending membership to local authority members. There are boards from which local authority members are not excluded, such as the board of FÁS which has at least two councillors on the board.
All legislation which comes from the Civil Service seems to make this exclusion. The point about conflict of interest could also apply to business people who operate in a particular area and might have to declare a conflict of interest and stay outside the room while decisions are being made. It does not apply to politicians only. Our colleagues in the public service seem to think we have questionable motives in these matters.
Amendment, by leave, withdrawn.
Section 12 agreed to.
Section 13 agreed to.
SECTION 14.
I move amendment No. 24:
In page 12, subsection (10), lines 9 to 11, to delete "by the Board save where the Board dispenses with the necessity for such confirmation".
We are giving the board power to set up committees. We are not prescribing the numbers on the committees and the legislation also allows for persons who are not members of the board or staff of the agency to be committee members. Subsection (10) states that the acts of a committee shall be subject to confirmation by the board save where the board dispenses with the necessity for such confirmation. The 12 members of the board will have to stand over any action taken and it is wrong to remove the necessity for final confirmation of a decision.
There could be a subcommittee comprised of three people, two of whom would not be board members and from outside the agency. They could make decisions without having to come back to the board. If people are under pressure the board may be inclined to use the power given here and dispense with the necessity for confirmation.
I would like to know the reasoning behind the subsection. If the Minister is intent on leaving it in place, she should be more specific about the make up of a committee because the Bill only states that a committee shall consist of such number of members as the board thinks proper. A committee could be made up of one person from within the agency and five members from outside and it could make decisions over which the board would have to stand. I would not like to be a board member with the power to give a subcommittee decision making powers over which I would have no say. Who would carry the can if the committee did something wrong?
Forbairt has 17 committees which meet once a week. The Trade Board and FÁS each have a number of committees. It is not a question of granting power to the committee and leaving it there. The board has to decide to assign particular powers to a committee. If everything had to be agreed by the board, it would have to meet at least once a week. It would be difficult to attract the kind of people we want on the board if we insisted that everything had to be ratified on a case by case basis.
The flexibility exists for reasons of practicality in that a committee could deal with technical matters or retail issues. If the board decided a committee comprised a consultant or expert in a particular area who could make decisions or recommendations in a particular area, that would be the most appropriate way to operate. The opposite approach would make it very difficult.
The Minister is delegating power. She is allowing the board to delegate to a committee any of its functions which in its opinion can be better and more conveniently exercised and performed by a committee. I would be happier if it were stated that a committee should consist of at least three members of the board and any other members the board may appoint. There has to be link. If there is a subcommittee with one board member and five outsiders who can make decisions, even if they are delegated by the board, to whom will that subcommittee be answerable?
The board will decide what to do on a committee by committee basis. It has to decide what committees to establish. Many of these will be in technical areas where members of the board may not have the expertise. The idea that members of the board would sit on every committee is unusual. That does not happen in the IDA, the Trade Board or Forbairt. There may be a case for an overseas committee to co-ordinate activities in a market such as the US. The idea that board members would have to travel to attend meetings of that committee or that the committee would have to return home to facilitate board members would not be practical. The manner in which this is done in the Bill - the Board can dispense with its power to deal with an issue and can delegate that issue to a committee - allows the board to make the decision about what can be decided by a particular committee. I envisage that will happen only in technical areas and areas to do with day-to-day business where it is more appropriate that smaller committees discuss issues.
The Public Accounts Committee sent a delegation to SFADCo which resulted in a significant report. The Comptroller and Auditor General was unhappy with the delegation of powers to a subcommittee which then made extraordinary decisions and cost the State millions of pounds.
I understand that SFADCo was a subsidiary company to which powers were delegated. It was not a committee established by the board.
I will take the Minister's word that this provision is in the Bill for a good reason. I hope I will not be saying "I told you so" in five years' time when a matter is delegated and nobody will take responsibility for it.
Amendment, by leave, withdrawn.
Section 14 agreed to.
Section 15 agreed to.
SECTION 16.
Question proposed: "That section 16 stand part of the Bill."
Many sections, including section 16, state that no information will be disclosed. I want to ensure this is in keeping with people's rights under the Freedom of Information Act.
Section 16 states: "Save as otherwise provided by law. . . . .". In other words, the Freedom of Information Act is the law and it supersedes that.
Question put and agreed to.
Sections 17 and 18 agreed to.
SECTION 19.
Amendment No. 26 is consequential on amendment No. 25 and amendment No. 27 is related. Amendments Nos. 25, 26 and 27 may be discussed together.
I move amendment No. 25:
In page 15, subsection (1), line 13, to delete "cease" and substitute "continue".
These amendments relate to staff members who will be placed at a significant disadvantage in terms of their work conditions and prospects as a result of the agency's establishment. They currently have the freedom to operate within Forfás with the benefits, salaries and other conditions that apply. However, the Minister's proposal will ensure they do not have that freedom in the future and that they will only be staff members of the agency. The Minister will probably say this does not constitute a diminution of conditions. However, if workers in Forfás do not have such freedom, they will be constrained to working in the agency. This amendment seeks to substitute the word "continue" for the word "cease" so that a person shall "continue to be a member of the staff of Forfás". Amendment No. 26 has a similar function.
Amendment No. 27 seeks to copperfasten the rights of employees who feel their conditions of employment are under serious threat as a result of this development. The amendment refers to the original Act which established the first agency in which many of the Forbairt staff were first employed. The Minister is restricting these employees to the new agency. In the past they had the freedom to belong to Forfás, although Forbairt existed, or to other agencies, such as IDA Ireland. Despite the clauses which state the opposite, the Minister is significantly changing their terms and conditions of employment. These amendments seek to stop that happening.
There is a misunderstanding here. Two arguments have been put forward on this issue. Some people claim we should maintain the single employer status, which we may do, while others argue that each of the agencies should be the employer of its own staff. We want to have flexibility. A number of difficulties have arisen in this area and there are a number of concerns. One of the staff concerns is in relation to mobility between the agencies. I want to ensure that continues and is strengthened because it is good for the agencies to have mobility between them.
An organisation should be able to respond to the needs of its staff without having to go to a separate organisation. I understand from my officials that it has been difficult to resolve certain issues over recent years. One such difficulty was in relation to a privilege day where different component parts of the Forfás organisation wanted a different response. It is important that agencies can respond at all times and that there is flexibility in terms of their clients' needs - in this case, the needs of Irish controlled companies. That must be the focus of the agency. We are trying to bring flexibility into this arrangement.
It may be necessary at a later date for the separate agencies to be the employer of their own staff. If that is the case, I give an assurance it will not affect mobility - if anything, that will be strengthened. It will not affect staff or pension rights, which will transfer automatically. What may be affected is the name of the organisation which employs them. This would only be done if we felt it was necessary to have a better working relationship between the staff and management and to respond to the individual needs of a particular agency.
The flexibility we have provided for in this Bill is necessary and desirable so that Enterprise Ireland has a clear focus, can respond to the consumer needs that will be required of it, has its own mission and ethos and can bring together all that is best in the corporate culture from the separate organisations being brought together. I know there are staff concerns but I want them to trust me on this issue. Their rights will not be affected.
I accept the Minister is prepared to sympathise with these concerns, but it does not lessen them. The legislation is explicit. The Minister may say there will be a possibility of movement between the agencies under Forfás, but who knows what will happen in the future under the Minister's successors or as the agency develops. There are concerns about flexibility in IDA Ireland, its modus operandi and the way it has developed. The Minister is, through this legislation, limiting the scope of Forfás employees to move and changing their conditions of work.
Amendment put and declared lost.
Amendment No. 26 not moved.
Question proposed: "That section 19 stand part of the Bill."
The Minister is determined that people moving from one agency to another or into the new agency will not suffer in any way. I do not have to remind her of what is happening in TEAM as a result of letters given to people who work there. Subsection (2) recognises trade unions, collective agreements and staff associations, but any discussion is predicated on subsection (1) which states that a worker "shall cease to be a member of the staff of Forfás and shall become a member of the staff of the Agency". It has been decided they would cease to be on the staff of Forfás and become members of the staff of the agency. They are already in the box before they start their discussions. The Minister has been open about how they will be allowed to have discussions and none of them will lose anything. Perhaps the straitjacket is on already and all the Minister is leaving them to decide is whether to tie the bow at the front or the back. This is a concern among the staff.
Will the Minister look at these amendments before Report Stage? We have referred to letters of comfort. Comforting words are all very well but perhaps they should be inserted in legislation.
I have read what some staff members have said about mobility and that seems a genuine concern. I will look at this matter before Report Stage as I am keen to ensure we strengthen mobility if possible. There has not been much mobility under the single employer organisation and that is a pity. Deputy Owen spoke about section 19(2). This was inserted at the request of the staff following consultations and it is right that it be included.
I will continue to give assurances to Deputies and the staff. We want an organisation which will function effectively. We want to motivate the staff, bring them with us and ensure that the full contribution they can make is appreciated from the start. If we do not get off to a good start the organisation will not recover. Everything we have done, including the consultations my officials had in recent months, has been with this objective in mind. That will continue to be our approach and I will look at the possibility of addressing the mobility issue before Report Stage.
Question put and agreed to.
Amendment No. 27 not moved.
Section 20 agreed to.
SECTION 21.
I move amendment No. 28:
In page 16, line 18, after "disposal." to insert "The Agency shall engage consultants and advisers in line with the recommendations of the Comptroller and Auditor General's Value for Money Report on Consultants (1998).".
I looked at the track record of previous consultants in this type of legislation and I wondered if it would have been useful to take on board the recent value for money audit carried out by the Comptroller and Auditor General. In that report he seems to question the value of engaging consultants. The Minister may be familiar with the scenario where a consultant who is asked for the time takes one's watch, tells the time and charges £100,000. Should the Bill include provision that the Comptroller's comments be borne in mind by State agencies and Departments?
This is a valid point. The report referred to is the 1998 report and the spirit of the Deputy's point is correct. We want to ensure that we do not engage consultants for the sake of it, that we get value for money and that there are appropriate tendering procedures etc. I will give an undertaking to achieve this through administrative arrangements or ministerial direction. That is more appropriate than writing one report on one set of circumstances into the legislation. I hope the Deputy will accept that assurance.
Amendment, by leave, withdrawn.
Section 21 agreed to.
SECTION 22.
Amendment No. 29 is in the name of the Minister. Amendments Nos. 30 and 31 are alternatives to amendment No. 29. Amendments Nos. 29, 30 and 31 may be taken together by agreement.
I move amendment No. 29:
In page 16, subsection (1), line 25, after "performance," to insert "research and development performance,".
This amendment is in response to the concerns expressed by Deputies Owen, Rabbitte and Broughan that the annual report of Enterprise Ireland is not specifically required to cover research and development. In this amendment I have specifically chosen the term "research and development" since business expenditure on this area is the key statistical indicator used in OECD countries. I share Deputy Rabbitte's views on the importance of innovation. However, innovation should be seen in its broadest context and in this regard it goes beyond pure technical innovation. Perhaps one of the best examples is the Sony walkman. The real innovation was not the miniaturisation of the components as the technology to achieve this already existed.
It is not how well the bear dances but the fact that it dances.
I accept the Minister's comments and this amendment is an improvement. I am a little surprised that it was excluded in the first place given the high calibre of some of her advisers. One could make the opposite point in terms of innovation. The White Paper on Science and Technology includes the following:
It is a common place that innovation, defined as the profitable and continuous exploitation of knowledge and techniques in new ways for fresh purposes in advance of the competition, is crucial to competitiveness and becoming increasingly so. Innovation includes R&D and the use of new technology, but it extends very much wider, covering every sector of manufacturing, not just high technology ones and incremental improvements as much as major changes.
Innovation is wider than R&D. However, it would have been helpful if there was an onus to report on the wider context of innovation.
That is a valid point and I will introduce an amendment on innovation on Report Stage.
Amendment agreed to.
Amendments Nos. 30 and 31 not moved.
Section 22, as amended, agreed to.
SECTION 23.
I move amendment No. 32:
In page 16, subsection (2), lines 42 and 44, to delete "with such information as Forfás may, from time to time, require for the purposes of its functions" and substitute "with regular detailed information and reports on their performance".
This amendment relates to the earlier discussion about the chief executive of Forfás and the future role of Forfás with regard to Enterprise Ireland. The Bill includes the phrase "such information as Forfás may, from time to time, require for the purposes of its functions" to give Forfás the cohesive role originally intended. When Forfás was established it seemed to envisage a role whereby it would have been controlled. We heard tributes to Kieran McGowan today. Would Forfás, IDA Ireland and Forbairt have had a different history if Mr. McGowan had been the chief executive of Forfás? Without wishing to cast aspersions on the current chief executive, would Forfás have operated in a manner similar to IDA Ireland and developed its own esprit de corps? Perhaps the Minister should consider the concept of Forfás receiving regular reports of Enterprise Ireland’s activities as this would give it a reasonable supervisory role. Otherwise, it would have to be asked if it would be better if Forfás was sidelined into being an economic research organisation with only a small role in the future functioning of the two agencies of Enterprise Ireland and IDA Ireland.
The supervisory role relating to how agencies perform is the responsibility of the line Department. Forfás is essentially a policy co-ordinating body and has worked extremely well in that regard. I have a high regard for the current chief executive whom I did not know before I came to the Department but who has since impressed me highly in terms of his calibre of intellect, his capacity for work and the manner in which he goes quietly about his work. He has done an outstanding job but it is one which impacts on Government in its entirety and not just on these agencies.
The supervisory role at the end of the day is a matter for the Department. I do not want Forfás duplicating what Enterprise Ireland or IDA Ireland should be doing. They have separate albeit complementary functions. Where they complement each other in terms of overall policy issues, they come together in Forfás. Deputy Broughan's amendment would be restrictive rather than achieving what he intends. It is better the line Department should act as the monitoring and supervisory body for the agencies under its remit.
While a whole section of the Bill is devoted to what should be included in the annual report, no such guidelines are given for the format in which such information as Forfás might require would be given. Could that be a problem? Will the Minister give an example of how she or Forfás might request information and in what form it would be? Why is it necessary to devote a section to the requesting of information by Forfás beyond that supplied in the annual report? I would have assumed it would have been supplied with information at any rate.
Forfás might require details from any of the agencies - IDA Ireland, Enterprise Ireland or the Irish Trade Board - of certain firms or sectors so that the performance of those firms or sectors during the year could be analysed. This information would not normally be contained in the annual report which tends to be very general and deals with overall performance. The agencies have an enormous amount of specific details about various sectors. IDA Ireland would be in a position to periodically assess emerging crises and pressure points. Forfás needs to be given the broadest possible capacity to collect whatever information it feels is required as a policy - co-ordinating, policy - formulating and policy advisory body and it should be able to decide what form that should take rather than it being stipulated in rigid form in this legislation.
I accept what the Minister says but one of the results of this and earlier legislation is that Forfás is left in a limbo which future Ministers may have to revisit.
Amendment, by leave, withdrawn.
Section 23 agreed to.
SECTION 24.
Amendments Nos. 33 and 34 are cognate and both may be discussed together by agreement. Is that agreed? Agreed.
I move amendment No. 33:
In page 16, subsection (1)(a), line 47, after "offices" to insert ", laboratories".
This amendment relates to our earlier discussion about innovation, science and technology. The section specifies offices and land and, given the historic role of Forbairt and its predecessors, there is no reason the scientific word "laboratories" should not be included. Much of the work relating to innovation and testing support services for frontline industry requires scientific expertise and skill. While I accept what the Minister said earlier, there will nonetheless have to be scientific expertise and this should be made plain.
Earlier, Deputy Daly spoke about the future location of the agency and there were rumours it would be located in the west or, alternatively, in west or south-west Dublin. Wherever the headquarters of the agency is located, it is important it includes a scientific expertise and base in the services it will provide.
I compliment Deputy Daly on his request that the headquarters be located in the west. It would be very welcome as it is much needed.
At the risk of going against my colleague, Deputy Perry, the Minister has repeatedly indicated that the conditions of employment of employees of the new agency would not be altered. I could understand relocation if it were a brand new agency but this is an amalgamation of three agencies. Much as I would like to support Deputies Perry and Daly in their request, it would be very difficult to replicate elsewhere the facilities available in Glasnevin. Therefore, if this agency is to be set up quickly, it will have to be located in Dublin because the other agencies are already located here.
Speaking as a science graduate, I notice the word "laboratory" and many other technical words have given way over the years to those used by economists and accountants. I would not mind if a little status was given to words such as "laboratory" because they are always being downgraded.
As bids are being made, I place mine. I would welcome an agency of this nature being located anywhere between Dublin port and airport as that is the constituency of Dublin North-Central.
There is no intention to move the agency to west or south-west Dublin. Deputy Rabbitte looks unhappy about that.
What is the point of having a Minister in that constituency?
I will accept the amendments. I am advised that the word "offices" includes laboratories but, to be helpful, I accept Deputy Broughan's amendments. Deputy Owen made a valid point on the matter.
Amendment agreed to.
I move amendment No. 34:
In page 16, subsection (1)(b), line 48, after "offices" to insert ", laboratories".
Amendment agreed to.
Question proposed: "That section 24, as amended, stand part of the Bill."
Does section 24(2) not also need to be amended to include laboratories as it mentions land, offices or premises held by the agency which it can sell?
Deputy Owen is correct. I will table an amendment to that effect.
Question put and agreed to.
Sections 25 and 26 agreed to.
SECTION 27.
Amendments Nos. 35, 51 and 57 are related and may be discussed together by agreement. Is that agreed? Agreed.
I move amendment No. 35:
In page 18, between lines 31 and 32, to insert the following subsection:
"(4) Nothing in the foregoing shall affect existing Forbairt functions and property including metrology services, which shall be and are hereby transferred to Forfás.".
This amendment relates to a confusion in the Bill regarding the transfer of legal metrology services to the National Standards Authority of Ireland. General metrology has been the responsibility of Forbairt. The Bill does not indicate clearly if it will be the responsibility of the Enterprise Ireland. My amendment seeks to do that.
I am advised that only legal metrology exists in law. General metrology does not exist in any statute and therefore cannot be transferred.
My amendments Nos. 51 and 57 cover the Deputy's point. Amendment No. 51 reads:
In page 27, subsection (2)(a), lines 26 and 27, to delete "Legal Metrology Service" and substitute "National Standards Authority of Ireland".
and amendment No. 57 reads:
In page 30, between lines 2 and 3, to insert the following:
"(a) in section 7(1)-
(i) by the substitution in paragraph (k) for 'standards'; and' of 'standards;',
(ii) by the substitution in paragraph (l) for 'conformity.' of 'conformity; and', and
(iii) the insertion after paragraph (l) of the following paragraph:
'(m) to promote the use and application of metrology in the State.'.".
There are metrology services which are to be carried out by Enterprise Ireland. This should have been specified in the Bill.
They operate under the general provisions of the Industrial Research and Standards Act but they are not defined in statute.
Amendment, by leave, withdrawn.
Section 27 agreed to.
Sections 28 to 32, inclusive, agreed to.
SECTION 33.
I move amendment No. 36:
In page 20, line 10, to delete "£2,000,000,000" and substitute "£1,000,000,000".
I am quite disturbed by the proposal that the limit of money made available for grant purposes be increased from £750,000 to £2 billion.
The existing figure is £750,000,000.
I beg the Minister's pardon. If parliamentary control is to mean anything an independent agency should not be granted this amount of discretion. It is not bad practice to require the Minister to come before the House to say that an additional allocation of money is required. It is understandable that agencies should be given discretion but this increase is excessive. There have been occasions in the recent past when we were very glad of statutory limits. A Government was found to be in breach of a statutory imposition. The proposed increase is neither wise nor necessary. I ask the Minister to rethink it.
I support Deputy Rabbitte. There seems to have been a sudden rush of blood to the heads of Department officials. The Explanatory and Financial Memorandum says "the increase is necessary because the bodies in question are now nearing the existing statutory limit in respect of the total amount of moneys which the Minister may grant to the bodies for the exercise of their functions." They have not reached their limit, yet the Minster proposes a greatly increased allocation. The increase is too large. My amendments to the next section also attempt to limit the financial allocation to Enterprise Ireland. Deputy Broughan's amendments do likewise and Deputy Rabbitte has opposed the entire section. I understand that with the effluxion of time allocations become outdated but the Department should not become carried away and the Minister might come to regret having such large sums of money available to her. In five years time when something has gone wrong she may regret having allowed herself such latitude. I advise her to move with caution.
I support the comments of Deputies Rabbitte and Owen. For the reasons outlined by them I would be happier with a lower limit on the allocations dealt with in section 34.
I am surprised by the reaction to this proposal. The agencies were established in 1994 and have already almost reached their spending threshold. If we accept Deputy Rabbitte's limit of £1 billion the threshold will be reached in the summer of 1999. The IDA is spending more than £100 million per year, Forbairt is spending between £50 million and £60 million per year and the Irish Trade Board approximately £40 million. The figure in the Bill is the legislative aggregate which can be spent. It does not give Enterprise Ireland a carte blanche. The House will decide annually whether to approve the estimate for the Department. If too small an amount is specified in the Bill we will be obliged to amend the legislation in two or three years time to allow for an increase in the aggregate spending. That would not be desirable. We have multi-annual budgets now and by the time the current multi-annual budget period is ended we will be close to the end of the period in which the £2 billion may be spent.
Deputy Owen's amendment is slightly different. It refers to the threshold which has not been changed since 1981. Inflation since then has been 120 per cent. To keep up with inflation would require a figure of £6 million. We have decided on £4 million. Referring to the Government to authorise every increase in spending would create an intolerable volume of work and a Cabinet agenda clogged with discussions of relatively small sums of money. That is why we propose to increase the £2.5 million threshold to £4 million. If we kept to the rate of inflation we would have had to increase it to £6 million. However, £4 million is a reasonable sum, being a compromise between what it would have been if it had moved with the consumer price index and what might otherwise be the case. There are Government controls, the control of the Committee of Public Accounts and the Estimate controls. In these circumstances £2 billion is not unreasonable.
The Minister sounds as if she has made up her mind. However, I do not think it is right. We live in extraordinarily propitious times. Deputy Owen drew attention to the explanatory memorandum which indicates that we are nearing the limit, even after four years with an extraordinary track record. I do not think we will reach it in the next 12 or 18 months but, if we do, what is wrong with going back to the Oireachtas?
The £750 million level will be reached in July and the £1 billion level will probably be reached in about 18 months. We do not want to continuously amend the legislation. The Estimates and other controls are there. We could compromise on £1.5 billion if Deputies agree and we can come back to the matter in three years or so. Anything less is unreasonable because we will hit the limit so soon. With multi-annual budgeting by the agencies we will be close to the £1.5 billion figure in three years if the recent record is sustained.
It is still being doubled. What is the need for that? Is there an unease that the Oireachtas should discuss it? Such legislation is one of the rare opportunities it has to discuss industrial policy. The Estimates process is as likely to be taken up discussing county enterprise boards or other matters trivial by comparison. When the Minister negotiates the Estimates she knows she will be put through the winger on every subhead except the one which relates to this area. There is a more benign approach to this sector because it is good for Ireland. If the IDA estimates that it will need a certain amount of money we will do our best to provide it.
The new agency is being given significant powers. It is no harm, therefore, that there should be parliamentary accountability and control through debating the issues periodically. I doubt if the new level will be reached as quickly as is forecast.
Is the lion's share of the increase to be taken by IDA Ireland to allow for the different emphasis in the new agency, which will have a different focus from the other agencies? Will it tie the hands of the new agency if we do not increase the sum? It is a good check to bring projects to the Government. Those who have served in Government will know that such projects do not take up much time at Cabinet but that the process allows the members of the Government to get a broad idea of the investments coming into the country or that are being made. It allows us to guard against there being a heavy preponderance in one sector and to spread the investment. It is a check on the Minister which I consider positive. It should not be seen as an annoyance, rather as a good discipline on the Department and the IDA to have to submit these projects to the Government.
The procedure which requires a memorandum to be brought to Cabinet for projects above a certain threshold is good. Predecessors of the Minister would have given their right arms to have had eight such items before the Cabinet. It is a good practice because it forces the system to think out and set out clearly why a particular project might pay more per job than the average, for example. The process does not take up much time at Cabinet; most such memoranda are nodded through.
I do not question the need to bring memoranda to Government but there must be a reasonable threshold. If £2.5 million was the threshold in 1981 and the CPI is now 120 per cent, the current equivalent is £6 million. Therefore it is not unreasonable to change the threshold in the light of changing circumstances so that cases where reasonable amounts are being allocated are dealt with.
We could carry the argument to either side with equally illogical conclusions. We could reduce the threshold so that almost everything the enterprise boards approve should go to Government. A line must be drawn. Given that the threshold was £2.5 million in 1981, £4 million is not unreasonable.
With regard to the aggregate sum, if I were not bringing forward this Bill we would have had to bring forward a Bill simply to increase the aggregate because we will hit the limit in July. I do not think we should have to go through that process each year. The Estimates is a part of the procedure where we can thrash out how the Oireachtas decides to spend public money each year. It is a good procedure which gives Deputies an opportunity to question spending and ensures the Government must account for spending. However, it is not necessary to bring forward legislation every 18 or 24 months to deal with the aggregate sum the agencies can spend.
Since 1994, the relevant sections of FÁS, the Trade Board, the IDA and Forbairt have spent £750 million. The figure proposed in the Bill is £2 billion but I am prepared to reduce that to be responsive to the concerns expressed. It is not unreasonable to double the figure so that four or five years from now I or my successor may bring forward legislation to increase the aggregate. It is not necessary to do so every two or three years. We need to adopt a four to five year horizon. If in four years this amount has been spent, another £750 million will be spent between three and four years from now.
I am prepared on Report Stage to amend the proposed amount to £1.5 billion, which is midway between the opposing views.
I will withdraw my amendment given the Minister's commitment to bring forward an amendment on Report Stage.
Amendment, by leave, withdrawn.
Section 33 agreed to.
SECTION 34.
Amendments Nos. 37 and 39 are cognate, amendments Nos. 38 and 40 form an alternative cognate proposal and they may be taken together. Is that agreed? Agreed.
I move amendment No. 37:
In page 20, subsection (1), line 18, to delete "£4,000,000" and substitute "£3,500,000".
Despite the fact that there has been no change since 1981, the reality is that there were a number of lean years when there was no possibility of reaching the £2.5 million aggregate figure. I am concerned that if it is increased too quickly the project will not come before Government and this would be a discipline on the Minister of the day and on the Department. These are vast sums of money and we know from experience where companies got vast sums of money and did a runner. The people who are putting forward projects where vast grants are being paid must be sure that they can stand over giving a grant of £5,000 or £11,000 per job on the basis of a new industry or investment coming into the country or, in this instance, helping people to export and develop their companies. I believe the Minister has gone too far. I was willing to go from £2.5 million to £3.5 million given the fluxion of time and Deputy Broughan is willing to go to £3 million; perhaps £3.5 million is a reasonable figure.
Like the Chairman, I do not have the advantage of being at the Cabinet table. The Minister has made a fair point in relation to how these matters should be handled and perhaps she might consider Deputy Owen's compromise amendment.
There is much misunderstanding about this matter. When the figure of £2.5 million was introduced in 1981 it was at a time of very high inflation. If the threshold was £4 million, during 1996-97 the number of cases that would not have come to Government would have been approximately 25. This is a very small proportion of cases and the value of the money involved is approximately 9 per cent. There is a very critical cost-benefit analysis done of all projects and parent companies must guarantee repayment of the grant if certain conditions are not met. In most cases if employment levels are not reached the grantaid is not paid. Just because matters go to Government does not mean the Government always gets it right. Seagate is the most recent example of a company that did not stay and announced closure after two years. However, that money has been repaid.
There has been only one example in the last decade when a company did not repay the grantaid and did not honour the conditions. These conditions are now underpinned by the parent company which means that even if the local company withdraws the guarantee is given by the parent company and taxpayers' money is secure. Increasing the sum from £2.5 million to £4 million would reduce the monetary amount the Government would approve by something like 9 per cent given the case history over 1996-7.
For practical reasons; this delays the implementation of what are relatively minor matters. A £2.5 million grant is a small sum and there are procedures in place to ensure cost-benefit analysis, board approval and consultation with Departments. I believe £4 million is a reasonable sum.
Amendment, by leave, withdrawn.
Amendments Nos. 38 to 40, inclusive, not moved.
Section 34 agreed to.
SECTION 35.
Question proposed: "That section 35 stand part of the Bill."
What money has been allocated to the Shannon Free Airport Development Company under sections 2 and 3 of the Bill?
I do not have that information at the moment but I will get it for the Deputy.
Section 35 is the only section which deals with SFADCo. The mission statement states that SFADCo would operate Enterprise Ireland but there is an indication that it might become part of Enterprise Ireland. On the one hand, I find it incongruous that the Minister speaks about bringing the various agencies under the umbrella of Enterprise Ireland and, on the other, she decides to leave SFADCo as the arm of Enterprise Ireland with a different name and covering only part of the country. I suspect this is for political reasons since no one wants to get rid of an agency that has such a concentration in the western counties. I understand this because the GDP of many western counties is below the rest of the country. I question what the Minister has in mind for SFADCo in the future. Could I have an assurance from the Minister, on behalf of my Fine Gael colleagues from the western counties, that nothing strange will happen to SFADCo given the fluxion of time?
As the Deputy knows, SFADCo is a tourism and development agency for the mid-west. It is not the case that per capita income in the mid-west is lower than the national average. The three areas in the country that have a lower per capita income are the Border counties, the west, which is not covered by SFADCo, and the midlands. SFADCo touches parts of Offaly but, generally speaking, the mid-west has a high per capita income. Section 44(4) provides that resources of Enterprise Ireland and the IDA can be transferred to each agency or SFADCo and it is envisaged that resources will be transferred to SFADCo.
The Minister is not being as generous to SFADCo as she is to the others.
Question put and agreed to.
SECTION 36
Amendments Nos. 41, 42 and 43 are taken together by agreement.
I move amendment No. 41:
In page 21, subsection (1), line 12, after "Finance" to insert and the board of Forfás".
This relates to my earlier comment about the future role of Forfás and the way Enterprise Ireland will operate independently. Looking at existing legislation one can see that the IDA might have had freedom of action that Forbairt did not have. What role does the Minister foresee for Forfás in the future? If we were to take a coherent overall view of Irish industrial policy - with which the Bill deals in part - we might refer the board of Forfás in each case to the Minister for Finance to give Forfás a role in important matters relating to staff numbers and remuneration. Our policy of inward investment has been very successful but there have been concerns about two parallel economies operating to some extent in relation to levels of income and what has been happening in the economy generally in the last number of years. Obviously the IDA is at the core of some of that development. Basically this is an attempt to strengthen the role of Forfás and to give a coherent overall vision to Irish industrial policy by bringing the IDA and Enterprise Ireland clearly within the remit of Forfás.
Clearly the role of Forfás is a policy role and many of the documents that Forfás was involved in publishing have not been adopted as Government policy. It has a wide policy role. It was never the intention that Forfás would simply become an operational day-to-day agency dealing with individual firms and allocation grants, and supervising staff of agencies and so on. If Deputy Broughan's amendment was to be accepted clearly he would be saying that the agency's staffing arrangements and grades would have to be controlled by Forfás but Forfás itself would have no control over its arrangements so it could literally do what it likes. The responsibility should lie with the Department or with the Department of Finance. We cannot hand over to Forfás all the matters relating to staff and relieve the Minister and the Government of the day of the responsibilities relating to this issue. They are issues relevant to Government policy, the Department of Finance and the Department of Trade and Employment.
There was a feeling that a coherent role for both inward investment and for the development of indigenous industry would be channelled through this mother board. Clearly that has not happened and this legislation further develops that approach. The Minister refers to policy making but the agency that makes the policy should be the agency that carries the can.
Amendment by leave, withdrawn.
Amendments Nos. 42 and 43 not moved.
Section 36 agreed to.
Sections 37 and 38 agreed to.
SECTION 39.
I move amendment No. 44:
In page 23, subsection (1), line 5, to delete "Forfás¾ and substitute "the Agency".
I am arguing against the general thesis I established earlier. There are very strong concerns among the staff of An Bord Tráchtála as to how their future role would develop and the fact that they would prefer to go to Enterprise Ireland and integrate their earlier role into the new agency from the beginning. This is what the amendment seeks to do.
Do you wish to pursue this or can we withdraw your amendment at this stage?
I would like to know how the Minister feels about this matter.
Was this not covered earlier?
It was to some extent but we are specifically talking about the marketing side.
I understand where the Deputy is coming from and that confirms what I said earlier. Some members from the existing agency, particularly the Trade Board want to be employed by Enterprise Ireland and some want to remain employed by Forfás. I was arguing in favour of flexibility so that we can try to find the most appropriate mechanism for employing the staff. As the Deputy acknowledges, this goes against what he said earlier but I understand his reasons. It is better that the flexibility we discussed earlier is maintained so that in time we can make a decision about who should or should not be the employer of all the staff of Enterprise Ireland. Clearly it would not be acceptable that some staff would be employed by Enterprise Ireland and other staff in the same organisation would be employed by Forfás. I do not think that anyone would desire that. It would be bad for human resource development, ethos in the organisation, staff management relationships and for inter-personal working relationships between different sections of the staff if they worked for a different employer. It is important that this be done in a flexible way.
Amendment, by leave, withdrawn.
Section 39 agreed to.
SECTION 40.
I move amendment No. 45:
In page 23, subsection (3), line 31, to delete "(3)" and substitute "(2)".
Amendment agreed to.
Question proposed: "That section 40, as amended, stand part of the Bill."
Am I right in saying that a very small proportion of the staff of FÁS as we know it, is coming in? It is not like the Forbairt or An Bord Tráchtála staff where there is an agency left. What are the rights of staff who prefer to remain under FÁS? Would they lose seniority or be victimised if they did not agree?
I hope it would be done on the basis of agreement and consultation. Consultation is ongoing at the moment. Deputy Owen in right in saying that a small proportion of staff, in the region of 60, is changing over.
The Minister has taken the minimal option in relation to what we were going to do with services to businesses.
There are many people involved in the training of certain areas of the service industries which will not be transferring over. One would hope that the staff changeover will be on a voluntary basis.
Except that the section is silent on staff numbers. It says "as so many or such". We should not limit it to those who are working in the services to business section or an equivalent number. One could trawl through FÁS and take people. I think this needs to be tightened up lest it be seen as a trawl. Is that the intention?
The intention is to take on people who have expertise in this area. We hope a sufficient number of people would want to transfer on a voluntary basis. Flexibility is required so that we can reach agreement. Negotiations are under way on this matter.
Question put and agreed to.
SECTION 41.
I move amendment No. 46:
In page 24, subsection (1)(d), line 20, after "executive" to insert "officer".
This amendment is tabled on the advice of the parliamentary draftsman.
Amendment agreed to.
Section 41, as amended, agreed to.
Sections 42 and 43 agreed to.
SECTION 44.
I move amendment No. 47:
In page 25, subsection (1)(b), line 25, before "Minister" to insert "the".
Amendment agreed to.
Section 44, as amended, agreed to.
SECTION 45.
Amendments Nos. 48, 49 and 50 are related and will be taken together by agreement. Agreed.
I move amendment No. 48:
In page 26, subsection (1)(a), line 8, after "industry", to insert "science and".
I tabled this amendment in the light of comments by Deputies Owen, Broughan and Rabbitte. I have also agreed to insert "innovation".
Amendment agreed to.
Amendments Nos. 49 and 50 not moved.
Section 45, as amended, agreed to.
Section 46 agreed to.
SECTION 47.
I move amendment No. 51:
In page 27, subsection (2)(a), lines 26 and 27, to delete "Legal Metrology Service" and substitute "National Standards Authority of Ireland".
Amendment agreed to.
I move amendment No. 52:
In page 27, subsection (2)(b), line 36, after "anything" to insert "previously".
Amendment agreed to.
Section 47, as amended, agreed to.
Section 48 agreed to.
SECTION 49.
I move amendment No. 53:
In page 29, subsection (1)(a), line 5, after "4(1)," to insert "7(4),".
Section 49(1)(a) contains a list of sections in the Metrology Act, 1996, where the National Standards Authority of Ireland is being substitute for Forbairt reflecting the transfer of functions from Forbairt to NSAI. Section 7(4) was inadvertently omitted from this list.
Amendment agreed to.
Amendments Nos. 54 and 55 are consequential on amendment No. 56 and may be taken together by agreement? Agreed.
I move amendment No. 54:
In page 29, subsection (1)(a), line 7, to delete "and".
Amendment No. 54 is merely a drafting amendment. Amendment No. 55 is a technical drafting amendment.
Amendment agreed to.
I move amendment No. 55:
In page 29, subsection (1)(b), line 10, to delete "accordingly.". ªand substitute 'accordingly.', and".
Amendment agreed to.
I move amendment No. 56:
In page 29, subsection (1), between lines 10 and 11, to insert the following:
"(c) in section 9(1)(a), after 'Forfás' by the insertion of 'or the National Standards Authority of Ireland'.".
Section 9(1)(a) of the Metrology Act, 1996, gives Forbairt the power to appoint inspectors for the purpose of that Act. This section provides that for this purpose Forbairt may appoint any person being an officer of Forfás. The effect of this amendment is to allow for the appointment of persons employed by NSAI as inspectors.
Amendment agreed to.
Section 49, as amended, agreed to.
SECTION 50.
Question proposed: "That section 50 stand part of the Bill."
I oppose this section. I have examined the NSAI Bill. There is a strong feeling among staff who are to transfer to the NSAI that this section is superfluous in that it weakens their rights, terms and conditions of employment. The comprehensive agreements which existed and were covered by clause 38 of the 1996 NSAI Act are, to a considerable extent, weakened by the introduction of this section. Why did the Minister not incorporate a clause such as clause 38 into this Bill rather than introduce effectively different terms and conditions for staff of Forfás on transfer to NSAI? Under the 1996 Act they have significant guarantees on their existing terms and conditions of employment than those being sought by the Minister. It seems the Minister is seeking to denigrate their terms and conditions of employment. Clause 38 is a very comprehensive series of enactments and if superseded by this section in relation to staff transferring from Forfás it will be a significant lowering of the terms and conditions negotiated by them in the past. I do not see why we need this section given the existence of clause 38.
We discussed this issue earlier in relation to the Metrology Service. The purpose of this section is to transfer staff from the Metrology Service to the National Standards Authority of Ireland. I understand from my officials that no reservations or objections have been raised with them by the relevant staff. Perhaps they were raised with the Deputy. We are transferring those matters that are no longer relevant to the company development function of Forbairt to a more appropriate body - the National Standards Authority of Ireland.
The Minister made an interesting statement in her Second Stage speech. She said that the public good or regulatory activities - that is how the Minister referred to them - were not being transferred to Enterprise Ireland. Has the Minister a proposal on who will provide such services? For example, a service was provided in Glasnevin on the levels of stress in concrete and it appears that will be done away with. I do not think the public will feel quite the same if you say this will all be taken up by private enterprise because they could be seen to have a vested interest in checking out things. I wonder what will happen to those public goods and services; will they no longer be provided?
As an addendum to the last point, there seems to be an indication that Forbairt would no longer be involved in at least one service it now provides. At the moment only one other company offers the service so it looks like the element of competition has been totally removed. In terms of costs and services to business it seems to be a bad development.
What we are doing here is the same as we have done in relation to the other members of staff. Clearly this would only come into operation if the Minister makes a ministerial order. So, to allow for a degree of flexibility, Forfás can second staff to NSAI. The arrangement we have in relation to Forfás remains the same as we discussed earlier in relation to other matters. We want Enterprise Ireland to concentrate on developing Irish controlled businesses. Anything that is not relevant to that should not belong to Enterprise Ireland. Part of the problem with Forbairt at the moment is that when the new arrangements were being made in 1993 many areas were transferred to Forbairt which do not belong there. They were transferred merely because no better home could be found for them. That is not good if one wants to have an organisation which has a clear focus to do the job we want it to do, which is helping client companies to develop their enterprise, particularly in an export context.
Some issues currently dealt with by Forbairt may well be dealt with by the private sector. They are more appropriate to the private sector and do not need to be dealt with by a State agency. Staff currently involved in those activities can clearly be involved in new activities. All this is about trying to create a very focused, streamlined organisation to assist companies to start in the first place, to establish themselves and subsequently to grow and develop. Anything that is not relevant to that should not belong to Enterprise Ireland. This is a provision to enable the Minister to have a degree of flexibility to do whatever is necessary in relation to the staff who are currently involved in the Metrology Service.
Question put and declared carried.
SECTION 51.
Amendment No. 57 has already been discussed with amendment No. 35.
I move amendment No. 57:
In page 30, between lines 2 and 3, to insert the following:
"(a) in section 7(1)-
(i) by the substitution in paragraph (k) for 'standards; and' of 'standards;',
(ii) by the substitution in paragraph (l) for 'conformity.' of 'conformity; and', and
(iii) the insertion after paragraph (l) of the following paragraph:
'(m) to promote the use and application of metrology in the State.'.".
Amendment agreed to.
Section 51, as amended, agreed to.
Schedule agreed to.
TITLE.
Amendment No. 58 cannot be moved as it was negatived by amendment No. 9.
How do you mean negatived, Chairman? Was it by the fact that amendment No. 9 was not carried?
That is a sneaky thing to do. May I ask a question on a technical point? I tabled that amendment to the Title which, in my book, is the very beginning of the legislation, not the end. Why is it taken at the very end? If I had been successful from the beginning in amending the Long Title to insert the word "export" we could have done away with many of the other amendments. Is that just the way it is handled?
I understand it is purely and simply procedure.
So I cannot call a vote on that?
No. Amendment No. 58 comes in under the Title rather than the Schedule which covered all the other amendments.
Technically speaking, amendment No. 58 was called with amendments Nos. 6, 8, 9, 10 and 11. You allowed a voice vote on all of those; but why not allow a voice vote on my last salvo - amendment No. 58?
I would like to allow the Deputy a final salvo, but I have been advised by the Clerk that as amendment No. 58 comes under the Title, it cannot be moved as amendment No. 9 was negatived. That is the advice available to me.
Amendment No. 58 not moved.
Amendment No. 59 cannot be moved as it was already discussed with amendment No. 5 which was withdrawn.
Perhaps the Minister will reconsider amendment No. 59 on Report Stage.
Amendment No. 59 not moved.
Title agreed to.
