We have a quorum. I welcome the Tánaiste and Minister for Enterprise, Trade and Employment and her officials, Ronald Long, assistant secretary, and Mary O'Donnell, executive officer. The Bill before us is short and I understand there are no amendments. We will, therefore, go through it section by section as is normal practice. Do Members wish me to go through the sections and ask the Tánaiste to comment or would they prefer if she commented on each individual section?
Nítrigin Éireann Teoranta Bill, 2000 - Committee Stage.
Fine Gael wants to facilitate the early passage of this legislation and we did not deem it necessary to table amendments to it. We would be satisfied if the Chairman went through it section by section. It is important to proceed with the enactment of the legislation as quickly as possible. Debate took place on Second Stage on a number of the issues involved and I believe that debate was dealt with by the Minister of State in whose constituency the main plant is situated. I am happy to facilitate the early passage of the Bill.
As Members are aware, the purpose of the Bill is to provide for the transfer of the State guaranteed debt of Nítrigin Éireann to the Minister for Finance. The current ministerial guarantee is £200 million, while the debt stands at £180 million. Perhaps we will ask the Tánaiste to make some opening remarks. In doing so, she might also perhaps deal with section 1 of the Bill. As Deputy Flanagan requested, we can then proceed to deal with it on a section by section basis.
SECTION 1.
Question proposed: "That section 1 stand part of the Bill."
I thank Deputy Flanagan and the other members of the committee for facilitating the taking of Committee Stage today.
This is a relatively short Bill - it contains only eight sections - which is essentially technical in nature. Its main purpose is to transfer NET's State guaranteed debt to the Minister for Finance. Existing legislation provides for NET to have a maximum of £200 million State guaranteed debt. The debt is currently in the region of £193 million and it is projected that it will stand at £189.7 million in September of this year.
The historic debt of £164 million of the manufacturing company was retained by NET in 1987 when it became the holding company for the State's 51% shareholding in Irish Fertiliser Industries under a joint venture with ICI. Both NET and ICI have over the past year made loans to IFI to assist it recover from not only poor market conditions of recent years but also from the impact of lost production due to the major plant overhauls and losses incurred as a result of the Iarnród Éireann train strike. At the conclusion of the Second Stage debate, the Dáil was informed about loans of £6.75 million each made by both NET and ICI last year to IFI on commercial terms which are repayable by October 2002. The recent foot and mouth crisis adversely affected fertiliser sales and in the circumstances further loans of £2 million each by NET and ICI, on commercial terms and to be repaid this year, are being negotiated.
The Bill also makes provision, by way of amendment to the First Schedule to the National Treasury Management Agency Act, 1990, for the Minister for Finance to delegate to the NTMA the functions conferred on him by this Bill in regard to the NET debt. It also enables the Minister for Enterprise, Trade and Employment to make orders at a future date which will repeal all previous NET legislation and which will remove the application to NET of the worker participation State enterprises legislation. Because NET is the holding company for the State's 51% shareholding in IFI, it is likely that these orders will only be made following disposal by the State of that shareholding.
Section 1 of the Bill provides for the standard interpretations and definitions.
Is NET on the market? Is it for sale? Is there a possibility that another State agency or Department might consider closing down NET because of the high emissions from its plants and because Passage West, Ringaskiddy and the surrounding localities have been declared no-go areas because of the emissions from the plant at Marino Point? Is it possible that the plant at Marino Point is outdated and poses a danger to members of the public who live in the area surrounding the lower harbour of Cork city? The Tánaiste was previously a Minister of State with responsibility for the EPA. Does she recollect any accidents occurring as a result of emissions from the plant? Is the State putting its share of the company on the market and trying to get rid of it in order to offload the difficulties which have been forecast and which may occur in the future?
NET is a holding company for a debt; it is not a company anyone would ever consider buying because they would merely be purchasing that debt. IFI manufactures fertiliser and NET holds the debt incurred on foot of IFI's manufacturing activities over a period of years. The Government owns 51% of IFI and ICI owns the balance. ICI is keen to dispose of IFI and consultants were appointed two years ago to consider the possibility of disposing of the plant. However, virtually no interest was shown because of the current state of the fertiliser market. The Government remains committed to the disposal of the two IFI production facilities in this jurisdiction and the one in Northern Ireland. This will happen as soon as we receive what we regard as a reasonable financial offer which would guarantee the future success and employment of those who work for IFI.
I wish to deal now with the other issue to which the Deputy referred, namely, the impact of the SEVESCO directive, which was signed into law in Ireland at the end of last year. One of the requirements of that directive means that the development of Passage West is under discussion. I have asked the Health and Safety Authority to carry out a further review of the health and safety implications and that will hopefully be completed as quickly as possible. I am aware that under the provisions of the directive, as currently interpreted, it would be impossible for the development plans that are proposed for Passage West, which were the subject of designated status, to be fulfilled. I know that is a matter of concern to the people who live in Passage West but also to the wider community. I hope that when the latest report from the Health and Safety Authority is received we will, perhaps, be in a position to see how we might move forward in relation to this particular area.
Is it possible that the plant might be closed down? Would the Government lose out as a result?
The problem is not the plant. Under the directive, certain activities that are in a three mile radius of residential areas are prohibited from some types of expansion. This is one of the processes that come under the provisions of the directive. It is the likelihood of risk rather than what is actually occurring. It is fair to say that the plant in Cork is well managed from an environmental perspective. It is not emissions that are causing the problem, it is the potential risk posed by the manufacturing process that brings it under the terms of the directive. That is where the difficulty has arisen. I do not envisage that the plant will be closed; that is not the intention. It is intended to keep the plant in production and to obtain the best possible future for it, the people who work in it and for the taxpayers. A considerable amount of taxpayers' money has been invested in IFI through NET in the past 15 to 16 years in particular. It is fair to say that the market for fertiliser was very different when certain decisions were made than it is today. That is most unfortunate.
I thank the Tánaiste for her reply.
May I ask a further question?
I will be happy to accommodate the Deputy. However, I draw his attention to the fact that we are dealing with a specific item of legislation which involves the transfer of liabilities relating to NET. It would be more appropriate to raise other issues, particularly those involving health and safety matters, at our Estimates meeting.
We are discussing the sale of the State's shareholding. I am inquiring about the legislation in terms of whether we will, for example, be responsible for upgrading the plant, whether there will be a charge on the Exchequer at that point and whether there will be further charges on the Exchequer for making the plant safe if the latest health and safety report indicates there might be some difficulties in relation to the running of the plant. For the information of the Chairman, the plant is situated in lower Cork harbour and 220,000 people live within a 12 mile radius of it. Passage West is not in my constituency of Cork South Central and I am sure the Minister is well acquainted with it and will have information about it in her possession.
There is a great deal of concern about this plant in Cork harbour. As the Government is a major shareholder, I believe I have a right, on behalf of the people of Cork, to raise the matter at this meeting or at any other forum.
Thank you, Deputy O'Flynn. I will see if the Tánaiste is in a position to respond.
I think I have responded. There is a misunderstanding about the implications of the directive. The directive has general application and it specifies that if certain activities are carried out within a three mile radius of a residential area, then no further development can take place within specific parameters. The Health and Safety Authority is carrying out a safety audit which we hope to have to hand soon. The interpretation of that is that Cork County Council seems to believe it cannot implement the plans it has for the upgrading, development and rejuvenation of Passage West, which is badly needed. Deputies from all parties have made representations to me on this matter. I am going to Passage West next Friday to meet some of the interests there. I do not think there is any suggestion that there are emissions coming from the plant which are causing environmental problems in the area. That is not the issue. This kind of activity is now covered by the directive and, given that the EU is implementing stricter environmental measures all the time, the view was taken that no further development should take place within a facility like this and in other facilities.
Is it possible that the plant will be closed down and that there will be a loss to the Exchequer? Would IFI turn around and close——
The Government has no intention of closing down the plant. That is not even under consideration. What I would like to do is see how we can marry the provisions of the directive to which we have signed. Although some people have criticised the fact we have signed the directive, we would be equally criticised if we had not signed it and we would be accused of putting the environment at risk. After the audit I hope we will be able to reconcile the different concerns. That is the ideal solution - if Passage West can develop in a way and to a level that makes the area more sustainable than I understand it is at the moment, certainly from a residential and economic point of view.
I am happy to wait until we get the result of this audit and then I am sure we will have further deliberations on it.
I thought you were going to invite the Tánaiste to meet some people in Passage West and surrounding areas when she is there next week.
I will let my southside colleagues join her on that occasion. I will be there for the lunch.
Great.
Question put and agreed to.
Sections 2 to 4, inclusive, agreed.
SECTION 5.
Question proposed: "That section 5 stand part of the Bill."
Deputy O'Flynn referred to environmental matters and environmental realities as far as his city is concerned. The enactment of this legislation will obviously transfer the liabilities but as far as the current workforce in the plants in Cork and Wicklow is concerned, what are the consequences, if any, of this legislation on the operations of the plants and the security of tenure the workforce has?
This is technical legislation to transfer debt to the Minister for Finance and on to the National Treasury Management Agency. It has no direct impact one way or the other on employment. The purpose of this provision, however, facilitates the Minister for Enterprise, Trade and Employment in making an order which will provide that the Worker Participation (State Enterprise) Acts, 1977 and 1988, will not apply to NET. This will have the effect of discontinuing the entitlement of four worker directors to be elected to the board of NET under section 15 of the Worker Participation (State Enterprises) Act, 1977. It is only intended to exercise this power in the event of the sale or disposal of NET's 51% shareholding in IFI. The four worker directors on the board of NET are employees of IFI so if the State were to dispose of its shareholding in IFI, there would no longer be any rationale for IFI employees to be elected to the board of NET. In any event, NET would be likely to be wound up shortly after the disposal of its shareholding.
Obviously, if the Government disposes of its shareholding, it will not be holding the company; therefore, the issue of having worker directors does not arise because the body will not exist. The four worker directors in question are also employees of IFI, so clearly they have a direct interest. I have met the worker representatives in the past and have undertaken to meet them again if there is any change in the Government's position. Nothing came out of the consultancy that was appointed to look at disposal possibilities. My officials have stayed in touch with worker representatives and it is my desire to continue with that process if any change occurs.
Question put and agreed to.
Sections 6 to 8, inclusive, agreed to.
Title agreed to.