Additional amendments Nos. 39a and 39b are related and may be discussed together. Is that agreed? Agreed.
Air Navigation and Transport (Amendment) Bill, 1997: Committee Stage (Resumed).
SECTION 24.
I move amendment No. 39a:
In page 19, subsection (1)(d), to delete line 1 and substitute the following:
"(d) to manage effectively, and with due consultation with airport users, operations within its airports.".
Arising out of last week's meeting, I received correspondence from the Irish Association of International Express Carriers. To give credit where it is due, they are the originators of these amendments, and I would ask the Minister to give them careful consideration.
It is a technical and not a political point. In relation to the role and functions of Aer Rianta as set out in sections 23 and 24, these people, who represent the DHL, FedEx, TNT, UPS, etc., have international customers, such as Intel, Dell and Iona Software Ltd., who have specialist requirements. The association says this Bill ignores the regulatory role of Aer Rianta. In other words, we looked at the ownership and management roles of Aer Rianta the last day, but not the regulatory role as it affects freight which is important. Therefore, the major point in amendment No. 39b is that the Minister should retain an independent regulatory role, that this Bill leaves a grey area of not explicitly clarifying whether it is Aer Rianta or the Minister who has the regulatory role. The association is afraid the specialist freight needs could be excluded from the Bill. For reasons of consistency and completeness, the association feels these two amendments would recognise those wider obligations in section 24.
I ask the Minister to respond favourably. I did not dream this up in the middle of the night. This has a real purpose in so far as people have genuine concerns about the issue.
I am sure Deputy Yates did not dream them up because he was well briefed on the matter. Indeed, I had an interesting meeting with that group.
The thrust and intent of the two amendments is quite correct, but different arrangements will be coming into place which will put into proper shape the points the Deputy is making.
Amendment 39a is subject to the ground handling directive is going through the Council of Transport Ministers at present, although I cannot quite remember the stage it has reached to date. What the Deputy seeks is actually what will come about in some form in the ground handling directive. If we inserted this in the Bill, we would have to change it when we came to the ground handling directive. Therefore, I would prefer to wait for the ground handling directive, which is at an advanced stage, to give effect to what is a proper point which has been put forward by Deputy Yates.
A users committee has been set up already by Aer Rianta to be ready for the terms of the ground handling directive. It is a matter currently before the Council because I am sure it will be on the agenda for the next meeting.
The Deputy's amendment on regulation is worthy, but legislation for the regulation of airports would require a substantial Bill in its own right. Having taken advice on the matter, the thrust of what I said to the association, certainly in regard to the ground handling issue if not the second issue of regulation, is that it would require legislation in its own right but it would not sit easily in this Bill as it would not be the proper vehicle for it.
I appreciate the points put forward by Deputy Yates. I had an informative meeting with the association, I noted its concerns about the ground handling directive, but I do not know whether we fully discussed the other matter. I particularly note its concern that its members' issues do not seem to be included in this Bill, but this Bill is simply a conversion of status for Aer Rianta.
The first of Deputy Yates amendments will run in tandem with the ground handling directive and the second, on regulation, would not sit easily at this point when there may well be a Bill to regulate airports in the future.
The Minister is right not to pre-empt the directive by putting the provision specifically into the Bill. In the meantime, Aer Rianta will effectively be the regulator under the watchful eye of the Minister, who is the legal holder of that power. Where there are a variety of operators and interests, regulation is required for freight and other things. The area of regulation between competitors on the ground and in the air at airports is being addressed in the first instance in the ground handling directive and elsewhere by the EU.
We need to look again at whether we retain a shareholding and, thereby, exclude the power of regulation or impose regulation, which would mean we must change the shareholding from its present status. I said that before and nobody took a blind bit of notice. I have a feeling that in the public interest it is more important for the Minister to have the power of regulation than to simply hold a fairly fallow shareholding. In the public interest it is more important to opt for regulation.
Successive Governments have taken a line that the Minister is the shareholder and, therefore, we must hive off the regulation. What will occur in due course is that we will have hived off the regulation and bit by bit, in one way or another, also hive off the shareholding. That is quite a radical departure from our traditional position where we always argued that we must maintain the shareholding in State ownership. I see that arising from the directives and the requirement for competition in European law that formula has become an empty shell.
It is important that plenty of thought be given within the Department and Government to these two roles, and to which is the most beneficial from the point of view of the public interest. I would come down strongly on the side of regulation.
Does the Deputy mean ministerial regulation or independent regulation?
Ministerial regulation. I would see the Minister as acting on behalf of the public as the regulator and being accountable. The democratic deficit we get with independent regulation would be wiped out by the Minister having to be accountable to the House and face the public on a regular basis, and by the Minister holding this extremely powerful position on behalf of the public. If we set up the regulatory system, as was intended, with a commission, that office will have more power than any Minister. That is not in the interests of serving the public and we should look at that very carefully. The Minister should take her time. She should look at this carefully and consult widely on it before a decision is made.
Arising from that, I suggest to my colleague, Deputy Yates, that inserting this into the Bill now would pre-empt that. When we discussed the gas Bill, the Minister retained the power of regulation.
That was the Energy (Miscellaneous) Act, 1995.
Yes. The Minister retained the power of regulation in that Bill in the interim and it is was correct to do so while awaiting an EU directive.
Two points were raised there. The precise point of regulation in this Bill and then the general issue of regulation. Since the matter was raised at a previous meeting, I have been giving thought to the issue of regulation to which Deputy Stagg referred. It seems to me that independent regulators will be appointed by the EU. Then there would be a system of independent regulators who, to a greater or lesser degree, would declare themselves accountable or not accountable. Even if they do their business it will be on a sporadic basis rather than in a structured way, because of their independence, in the same way that a Deputy, Senator or Minister is accountable to the Dáil or Seanad, as is proper.
The headlong rush for competition and liberalisation seems always to be accompanied by the appointment of an independent regulator. Previous Governments, as well as the current one, have gone down the path of making the regulatory function independent and outside the remit of the Dáil. If we continue this way, our system of utilities will have many people at the top of the pyramid with huge salaries, as I am sure is proper, but not regulated by anyone. It is now the gleam in someone's eye that we should have a super-regulator, to regulate the regulators. I do not know where the super-regulators will go for regulation.
It is a job for retired senior civil servants.
This is an important point and I intend to give some thought to the matter. We saw what happened in the UK - the utilities were madly privatised, regulators were brought in, fat cats emerged and consumers did not get decent services. In the case of the UK lottery the regulator has been disgraced and has gone so the lottery will be brought back under a Government Department. We are coming late to this and we should give it much thought.
The points have been well made. As the Minister and Deputy Stagg said, regulation should be dealt with in separate legislation. The best regulators are those who are answerable on a day to day basis before the Dáil and elected representatives. This country has gone mad. We have taken so much out of democratic control and answerability that we are becoming a technocratic state with no one answerable to anyone. The planning appeals board is a classic example - it can overturn the democratic will of the people as expressed in the development plan, but we are not here to discuss that, rather to talk about the principle of regulation.
As this pans out and the ground handling directive becomes available, it will be necessary to introduce regulation on a statutory basis and the Minister is the appropriate person to do that, not some quango or quasi-autonomous agency which is answerable to no one. There is a point of principle and I do not think that tagging regulations on ownership, structuring Aer Rianta's finances, and the financial relationship between the Minister and Aer Rianta is the proper way to deal with the issue of regulation. Deputy Yates has put an important marker down in these amendments but I assume he will not press them because the matter should be dealt with separately. I support everything said by Deputy Stagg - regulation means nothing if it is not accompanied by democratic answerability. The regulations by so-called independent regulators, both here and elsewhere, have displayed a huge democratic deficit.
I know the EU wants them - because Europe is organised in neat boxes. It has no time for the European Parliament and the Council of Ministers has little accountability.
We are being given more of the same.
It is a technocratic response with much superficial attractiveness, but when it comes to a citizen in France, Germany or Ireland getting a handle on regulation——
——or on their rights.
——or to helping a corporate or private citizen seeking to vindicate their rights, it cannot help. The Minister has as much of a classical background as I - she will remember the famous question in Juvenal, "Who will guard the guard?"
Quis custodiet ipsos custodes?
That is the issue which will arise here. As to the concept of a super-regulator, that should be the parliament which represents the people.
No, it will be a man or woman with a big hat saying "Super-regulator".
It is hugely insulting to those elected by the public to say that someone who is not elected is more likely to act fairly. That is the bedrock of the suggestion that this should be independent. Independence in this case means the independence from people who are elected, and this frightens me because it downgrades not only the Houses of the Oireachtas but the people who elect their representatives. The popular remark was that politicians could not be trusted and If we draft legislation to exclude politicians from decision and policy making, we will be concurring with that statement. I recognise the difficulty in being both a shareholder and a regulator and we must grapple with that.
It is to keep a share.
To facilitate progress I am happy to withdraw these amendments. I am glad the Minister is in dialogue with the association of express couriers, because it is an important component of this. There is an increasing specialisation in freight and their competitiveness ensures Ireland's competitiveness. Amendment No. 39a was intended to ensure consultation with airport users and the Minister has said there will be such consultations.
An airport users' council has been set up.
I hope the Minister ensures the IEC is represented there and I ask her to take a note of that. As to amendment No. 39b, I take the Minister's point that she will await the directive. Primary legislation in this area does not come often, as the Minister knows, so perhaps she could indicate whether this will be done by statutory instrument or if primary legislation is required.
We think it will be done by statutory instrument.
If it must wait for primary legislation it will take for ever, so that is fine. I hope the Minister and her officials will note that the explicit independence of the regulator is important - the committee is in favour of that being the Minister rather than an independent regulator, and that is fine - and that Aer Rianta, as owner and manager, must be separate from the regulator. The point is that this provision should not make Aer Rianta judge and jury but that is not stated explicitly in the Bill. I will withdraw both amendments but I ask the Minister to consider a provision similar to amendment No. 39b to make clear that Aer Rianta does not have a regulatory role. If that is already in the Bill, that is fine. This would be separate from implementing the ground handling directive.
Amendment, by leave, withdrawn.
Amendment No. 39b not moved.
I move amendment No. 40:
In page 19, lines 2 to 6, to delete subsection (2).
This provision would render much of the Bill meaningless if the meaning I have gathered from the subsection is what is intended. It provides that nothing in the memorandum shall make the company liable before a court. To take one example, if the company was precluded by its memorandum from making political contributions, this section would remove any possibility of a sanction for doing so. If something is prohibited by the memorandum, this subsection would make it impossible to do anything about a breach of the prohibition. I do not understand why it was felt necessary to include this provision, to make it impossible to bring them before a court for breaking the rules.
I see the angle Deputy Stagg has taken but it was not the intention of the provision. The subsection proposed for deletion is a standard safeguard provision used in legislation for all State bodies. It was included in the Harbours Act, 1996, which is the most recent example. The parliamentary draftsman has advised us that this is an important safeguard. The principal objectives set out in section 23 set out the full scope of the activities which may be legitimately undertaken by the company. This is aspirational, given its full scope. However, the company is not obliged to carry out any of those activities. If we removed the section, anyone could take a case to oblige the company to carry out one of those activities if, in that person's view, it did not fulfil the remit it conferred on it in the Bill. The Deputy should look on it as a safeguard for the company rather than anything else. I, also, wondered about it when reading through it. As it is in true parliamentary draftsman's language, the section is rather difficult to sort out. However, we have been told that if we deleted that it would mean that a company - in this case, Aer Rianta - could be open to all sorts of litigation.
If they do something they are not supposed to or are not allowed to do, this would seem to remove any possibility of sanction against them for so doing. The example I am giving is if the memorandum said they may not make contributions to political parties, yet they still gave the Labour Party £100,000 for Christmas, it would exclude any legal sanction against them for doing so. I am not suggesting they would do that, mind you.
The Deputy is approaching the matter from a negative rather than a positive point of view. It is inserted as such so that any one thing that fails to be done could not be seized upon by somebody who envisages taking litigation against it.
Amendment, by leave, withdrawn.
Amendment No. 41 not moved.
Question proposed: "That section 24 stand part of the Bill."
This section barely mentions the necessity to market airports, even though it is briefly covered in other sections. As the Minister is aware, there has been a joint committee in Shannon including the Shannon Development Company, Aer Rianta, the airlines, development projects and others to market and promote Shannon airport to ensure its continued development and expansion.
This section does not place sufficient emphasis on marketing. It refers to the general duties of the new company, but one of the major challenges of the new company will be to market airports. I am particularly concerned about Shannon, naturally, but I presume the same applies to other airports. While I do not wish to make a great issue of it now, maybe the Minister will give us some indication of how it is proposed to shape the future marketing role of the airports authority in such a way as to make it far more effective in attracting new business and in developing the links which have already been established, as well as securing additional revenue and employment.
Deputy Daly, who has a particular interest in Shannon referred to marketing in relation to section 24. However, section 23(1) states:
The principal objects of the company shall be, and shall be stated in its memorandum of association to be——
(a) to own, either in whole or in part, or manage, alone or in conjunction with other persons, airports whether within the State or not,
(b) to take all proper measures for the safety, security, management, control, regulation, operation, marketing and development of its airports,
(c) to provide such facilities, services, accommodation and lands at airports owned or managed by the company for aircraft, passengers, cargo and mail as it considers necessary,
(d) to promote investment at its airports,
(e) to engage in any business activity, either alone or in conjunction with other persons and either within or outside the State, that it considers to be advantageous to the development of the company, and
(f) to utilise, manage and develop the human and material resources available to it in a manner consistent with the objects aforesaid.
Paragraph (b) refers to the "regulation, operation, marketing and development of its airports", but the Deputy is looking for something more specific about marketing.
Yes, I am. In relation to co-ordinating the marketing drive, in most airports there are activities involving other agencies or Departments. These include, for example, industrial promotion and the customs free zone at Shannon, which to a large extent was motivated by the Shannon Free Airport Development Company. Aer Rianta, the county council, the regional authorities, SIPTU and SFADCo are involved in the marketing committee at Shannon, but I am not sure whether Shannon Development is. As the Minister is aware, there has been ongoing tension between the development agencies as to who is responsible for marketing the airport. When enacting a Bill like this one, it might be useful to examine a more specific requirement in the marketing area. Perhaps there could be some mechanism whereby marketing could be co-ordinated with overall guidance in both the management and direction of Aer Rianta, the airport authority. I will not labour it now but I think the Minister understands what I am trying to say. It might be useful to examine this area between now and the remaining stages because it is one in which there has been a marked absence of initiative and action. There is certainly a need for such action as the business becomes more competitive and as airline transactions change over the next few years.
Question put and agreed to.
Section 25 agreed to.
SECTION 26.
Amendments Nos. 42 and 43 are related and may be discussed together.
I move amendment No. 42:
In page 19, subsection (1), line 24, before "appropriate" to insert "temporarily".
It would be useful to have the word "temporarily" before "appropriate" to ensure there are proper controls. I cannot envisage a situation where it would be desirable not to have it temporarily.
This section provides a legal basis for the practice of allowing businesses to have concessions or leasing them space. By their very nature, all those leases would be temporary anyway because a lease is limited to whatever number of years applies. It is standard practice that a lease is temporary.
On a point of information, if one takes a lease on any commercial property over three years one has an automatic right to a 35 year lease. I have been involved in leasing. It is a lease forever and a day.
The wording of the Bill would effectively allow Aer Rianta to give permanent ownership, control or occupation of large spaces of its property to others, without any reference to the Minister. I appreciate that in practice leases are temporary in an airport. However, if the word "temporarily" was inserted there would be more protection.
What time span would the Deputy envisage in the word "temporarily"?
I am easy about that so long as it is not permanent.
The Deputy is putting forward the word "temporarily" as opposed to "permanent".
That is right.
No lease is permanent. Deputy Yates made the point that, in effect, one has permanency.
My wife has a few commercial leases. If a tenant has a lease for less than two years and nine months, they can walk away after that period. However, if a tenant has a lease for more than that period and the landlord and tenant fall out when it expires, the tenant can say he has a legal right which is enforceable in the High Court for a long-term lease equivalent to 35 years which can be extended for a further 35 years.
The word "appropriate" does not necessarily mean a lease. It would also protect the Minister's interest and shareholding by ensuring it cannot be hived off through this mechanism on a permanent basis. It is highly desirable that Aer Rianta is commercially active and gets as many customers as possible without that happening.
I do not see a difficulty with that but I will check it again. I discussed it with my officials and I thought a lease meant it was temporary. I can understand how a lease could become quasi-permanent.
One could sell the lease.
I will withdraw my amendment if the Minister considers it on Report Stage.
Amendment No. 43 seeks to insert "subject to the approval of the relevant planning authority". As airports are such large enterprises with many interests, they could from time to time come into conflict with other commercial interests, not necessarily related to the aircraft industry, when seeking to develop aspects of their own activities. The relevant local authority may wish to assess the impact of developments or activities at the airport on local businesses not directly related to the airport. I want to ensure the planning authority is involved.
A tenant would not be allowed to proceed with developments on land belonging to the State airport if it did not obtain planning permission. They would have to apply for and obtain planning permission for their proposed activity as a tenant of Aer Rianta. Aer Rianta must also apply for planning permission. It is not exempt except for minor changes which are already in place. If Aer Rianta decides to lease an area to a tenant, part of the conditions of the tenancy is that they must look for and get planning permission. Aer Rianta must also look for planning permission for developments.
I was concerned about the large scale of an airport and its wish to develop all aspects of its activities. I accept the Minister's assurance in this regard.
Amendment, by leave, withdrawn.
Amendment No. 43 not moved.
I move amendment No. 44:
In page 19, between lines 34 and 35, to insert the following subsection:
"(4) The company shall not alienate any interest in land comprising an airport vested in it pursuant to section 14.".
This hinges on whether there is existing power to prevent the sale of the core activity. This amendment seeks to ensure that the core activity, as described in section 14, cannot be alienated without the authority of the Minister or the Oireachtas.
We discussed this matter earlier.
This is a second bite of the cherry. On one of my earlier amendments which was related the Minister said she would look at the arguments made between now and Report Stage.
That argument was about shares. From time to time an airport might want to buy a field or sell part of a field. This amendment would spancel them.
I do not want a situation where Aer Rianta could decide to sell Cork Airport without authority from the shareholder. I am not satisfied the Bill would prevent it from doing that. Is the Minister satisfied there is authority elsewhere to prevent that happening?
We will revisit that on Report Stage.
Amendment, by leave, withdrawn.
Section 26 agreed to.
Section 27 agreed to.
SECTION 28.
I move amendment No. 45:
In page 20, subsection (3), line 20, before "the terms" to insert "section 36 and".
Amendment agreed to.
Amendment No. 46 not moved.
Question proposed: "That section 28, as amended, stand part of the Bill."
Does this mean the chairperson of a parent company can remove the chairperson of a subsidiary with the consent of the Minister? Does the board of directors have any say in that decision?
I am sure the Deputy noticed the big scéal in two Sunday newspapers about a certain person on the subsidiary of a particular State company. The chairperson usually writes to the Minister with the name of the person to be appointed. The Minister usually agrees because one has enough arguments with chairpersons without arguing about who they wish to appoint to subsidiary boards. I presume they also have the power to remove them. The Deputy is saying that the board of directors does not have a say in such a decision.
Yes and I am not sure that is wise. It may be that the chairperson has personal difficulties with the individual who is chairing the subsidiary which may be effective and efficient.
Perhaps we could insert in page 20, line 10, after the word "chairperson", "in consultation with the board" if the Minister is so disposed.
Or "with the consent of the Minister".
The Deputy is saying the board may have a role.
If the chairman does not have a right to go directly to the Minister, he or she would need the consent of the Minister.
This could lead to difficulties later.
Where a chairman might havea vendetta against a chairman of a subsidiary, the chairman of the prime body would have to write to the Minister to say he wished to remove the chairman of the subsidiary. In any such case the Minister would have to ask why this was being proposed.
Question put and agreed to.
SECTION 29.
Amendment No. 47 not moved.
Question proposed: "That section 29 stand part of the Bill."
I have a similar grievance about the chairman being removed by the directors. An excellent chairman could be removed because of a personality clash. There should be a provision in the legislation that the consent of the Minister would be necessary for that to happen.
There are court cases pending concerning matters such as this. People have been removed and the matter is now subject to litigation.
I had the experience where board members had a personal grievance against a chief executive and sought to remove him from office and they almost succeeded. I feel the legislation should not be left as loose as that.
Question put and agreed to.
NEW SECTIONS.
Amendment No. 48 not moved.
Amendments Nos. 49 and 50 are related and will be taken together by agreement.
I move amendment No. 49:
In page 20, before section 30, to insert the following new section:
30.-Not later than 6 months after the end of each accounting year of the company, the company shall make a report in writing to the Minister of its activities and those of its subsidiaries during that year and the Minister shall lay copies of the report before each House of the Oireachtas.".
This is an earth shattering matter. Rather than having a report from the chairperson to the Minister, it would be desirable to have a report from the board. That was originally included in the Bill. This is desirable for the reasons mentioned by Deputy Daly. Board members should not be bypassed.
Is Deputy Stagg saying that the chairman's report to the Minister should be lodged in the Library?
That is correct.
Why is it not possible for it to apply as it is written in the section, that the report be laid before the Dáil by the Minister within 30 days? It seems that the interest of the company would be well served if there was an element of public consultation, given that it depends on public goodwill. Perhaps if matters were to be seen as commercially sensitive that could be taken into account. There might be a need to consider some type of executive summary that could be laid before the Dáil. Does the Minister think that feasible?
To put the matter in context I would need to look at all the issues raised in the amendment. In 1992 the Department of Finance issued guidelines regarding remuneration for chief executives and directors' fees. At the time there was controversy about semi-State companies and the Department of Finance drew up a set of guidelines which state as follows:
Reporting arrangements and other contacts with Government Departments etc.
The chairman of each State body, at the same time as he or she submits the annual report and accounts of the body, should furnish separately to the appropriate Minister a comprehensive report outlining all significant developments affecting the body in the preceding year, including the establishment of subsidiaries and share acquisitions and major issues likely to arise in the short to medium term.
I probed the matter further and it is in that context that the chairman may have some items of commercial sensitivity which would not be suitable to open scrutiny. I accept that there is aninherent belief in all semi-State bodies that the chairman and Minister of the day should have a right to report and question one another. Otherwise there would not be a sense of trust in the chairm an.
Is the Minister saying that adequate reporting is already allowed for? How detailed would that be?
The annual reports contain a statement from the chairman which give an overview of the previous year as well as a review by the chief executive. This would consider the past and give an outline of the company's plans for the year ahead. I looked at the chairman's reports and the annual reports and I did not find a huge difference between them, but I have not seen reports for a full year. I accept there should be confidentiality between a chairman of a company and the Minister.
At present the chairman is required to report to the Minister. In my short-term as Minister I found it most useful and there was a lot of extras in the chairm
an's report that would not normally be in the annual report. What we are suggesting is that maybe the board should be involved in that report to the Minister and it should be laid before each House of the Oireachtas. The regular reports that have to be laid before each House of the Oireachtas——
The annual reports.
It is a regular occurrence that sensitive material is actually removed from reports whether they are annual or otherwise, and it is notified on the report before it is placed in the Library. Maybe this is more trouble than it is worth.
If there were two editions of the one report then everybody would hunt the thimble to find out what was deleted. In my short experience as Minister for Public Enterprise the effect of the chairman alerting you is valuable and I would ally to that the chairman's report to a Minister.
Amendment, by leave withdrawn.
Section 30 agreed to.
SECTION 31.
Amendment No. 50 not moved.
Section 31 agreed to.
SECTION 32.
Amendments Nos. 56a, 60 to 62, inclusive, are related; amendments Nos. 52 to 54, inclusive, are cognate and consequential on amendment No. 60 and amendment No. 59 is consequential on amendment No. 62. Amendments Nos. 51 to 54, inclusive, 56a and 59 to 62, inclusive, will be taken together. Is that agreed? Agreed.
I move amendment No. 51:
In page 22, between lines 20 and 21, to insert the following subsection:
"(2) On the vesting day of the company the existing full rights, benefits and entitlements of all existing employees of Aer Rianta shall be fully preserved and enhanced in any superannuation scheme established under this section.".
This is to ensure that the existing superannation retirement and sick pension entitlements of the existing staff of Aer Rianta are fully preserved and protected and that if there is any new superannuation scheme for whatever reason that people will not lose out, while they might get enhanced benefits but they could not lose out in any way. I feel it is minimal protection that the workers should have and it may well be covered in the existing Section 32 of the Bill. Given the nature of the draftsman wording I could not find where it says that the new scheme shall equal the old scheme.
I would like a commitment from the Minister to preserve all the existing benefits and that any alteration of any pension scheme would be discussed and agreed between the Aer Rianta group of unions and Aer Rianta management before there is any embarkation on any new scheme.
What I have endeavoured to do here is to copperfasten the scheme because it was one of the main issues the workers were worried about. I am assured that my amendments copperfasten what Deputy Yates wants.
Is it intended that there will be a new scheme or to continue the existing scheme?
It will continue the existing scheme but if a new scheme was put forward that there should be the fullest consultation with all the workers, I would agree with that.
I tabled amendment No. 56a arising from representations received from people who were concerned about matters such as the pensions fund and the superannuation scheme. By substituting "pensions board" for "Minister" seems to give a degree of independence. That is against the argument I was using earlier about the Minister being as good as anyone else and as independent as anyone else. It certainly would meet the case that was made by the people who wrote to me. The Minister might look at that.
We did look at it. The pensions board say that it would beyond their powers under the 1990 Act to be such an arbitrator.
I accept that.
I am withdrawing Amendment No. 51 on the basis that the Minister's assurances both that there will be consultation and that her amendments meet the point.
Why does amendment No. 61 exclude the Great Southern Hotels and Aer Rianta?
It includes them.
The words "other than" seem to exclude them.
Is the Deputy referring to the pensions?
Yes.
They are covered by the old scheme. It can be an existing one or the old scheme.
So why is this provision necessary?
I wondered about that too. I am not happy with the amendment No. 61. May I withdraw it?
Amendment, by leave, withdrawn.
I move amendment No. 52:
In page 22, subsection (5), lines 34 and 35, to substitute "an existing scheme" for "the old scheme".
Amendment agreed to.
I move amendment No. 53:
In page 22, subsection (6), line 36, to substitute "an existing scheme" for "the old scheme".
Amendment agreed to.
I move amendment No. 54:
In page 22, subsection (7)(a) lines 44 and 45 to substitute "an existing scheme" for "the old scheme".
Amendment agreed to.
I move amendment No. 55:
In page 22, subsection (8), line 50, to delete "administered" and substitute ", administered".
Amendment agreed to.
I moave amendment No. 56:
In page 23, subsection (8), line 1, to delete "company" and insert "company,".
Amendment agreed to.
Amendment No. 56a not moved.
I move Amendment No. 57
In page 23, subsection (13), lines 49 and 50, to delete "or the amount of" and substitute ", or the amount of".
Amendment agreed to.
I move Amendment No. 58:
In page 24, subsection (15), line 11, to delete "new scheme, subject" and substitute "new scheme but subject".
Amendment agreed to.
I move amendment No. 59:
In page 24, subsection (16), line 16, to delete "paragraph (c) of".
Amendment agreed to.
I move amendment No. 60:
In page 24, subsection (16), between lines 18 and 19, to insert the following:
" 'existing scheme' means-
(a) the old scheme, or
(b) a scheme for the granting of superannuation benefits to or in respect of any members of the staff of Aer Rianta International cuideachta phoiblí theoranta or Great Southern Hotels Limited, in operation at the commencement of this Act, and includes, where the context so admits, a reference to that scheme as amended by a scheme to which subsection (6) relates,
as may be appropriate;".
Amendment No. 61 not moved.
I move amendment No. 62:
In page 24, lines 27 to 38, to delete subsection (17) and substitute the following:
"(17) In this section, a reference to former members of the staff of the company or subsidiaries of the company, or deceased members, shall not include a reference to such former members or deceased members, as the case may be, who after ceasing to be members of the staff of the company or a subsidiary of the company became and were members of the staff of a company, other than the company or a subsidiary of the company, participating in the old scheme.".
Amendment agreed to.
Section 32, as amended, agreed to.
SECTION 33.
Amendments Nos. 88, 89 and 90 are related to amendment No. 63. Amendments Nos. 63, 88, 89 and 90 will be discussed together. Is that agreed? Agreed.
I move amendment No. 63:
In page 24, between lines 41 and 42, to insert the following subsection:
"(2) The rate of increase of any airport charges may not exceed the Consumer Price Index in a given year.".
The Minister is rewriting this section. She also proposes to delete many other sections.
They are due to be inserted elsewhere. It is a matter of sequence.
We have discussed at length the difficult financial circumstances that might prevail with the potential loss of duty free business to Aer Rianta and the fact that it will be required to pay vesting day moneys for the transfer of assets, an annual dividend, rates and corporation and other taxes. Aer Rianta might thus be tempted to increase airport charges. There has been a freeze on charges for some time——
Ten years.
——and I fear this legislation might be seen as an opportunity to release Aer Rianta from that.
A number of airlines have enjoyed considerable growth in their business and that growth is often attributed to increasing competitiveness in airport charges. The amendment seeks to ensure a fair level in airport charges - they will not be frozen for all time - by providing that increases will not exceed the consumer price index. It is a reasonable amendment. It imposes control, but not undue control, on the level of airport charges.
Because Ireland is an island and access transport competitiveness is vital for tourism, freight, industry and commerce, I hope the Minister will accept the amendment as the best means of providing a proper structure within which airport charges might be controlled in the future.
I have difficulty with this amendment as it seeks to tie the hands of Aer Rianta. The objective of the Bill is to put Aer Rianta on a commercial footing and, in order to sustain itself, Aer Rianta must be profitable. There might be circumstances in the future in which Aer Rianta might be obliged to impose increases which exceed the consumer price index because of a changed economic climate.
Market forces will determine whether the airports will continue to be successful. If they are to be successful, they must be economically attractive to their users. The insertion of this amendment would tie the company's hands and that is not the intention of this legislation. We are in the process of setting the company free to operate as a commercial entity and we want it to continue to be as successful as it has been in the past.
The intent of the amendment is good. However, there has not been a rise in airport charges for a decade. That is an amazing feat and the reasonable charges are one of the reasons the airports are so competitive.
The Council of Ministers is currently discussing a draft directive on airport charges to ensure that they will be transparent, open, cost related and non-discriminatory. I prefer to await the implementation of that directive by statutory instrument, which should take place reasonably soon, rather than tie the hands of the company in the Bill. I hope the company will not increase the charges, but to link the charges to the consumer price index when a relevant directive is being discussed by the Council of Ministers would be pre-emptive.
I feel strongly about this issue. It is not a matter of competition, as Deputy O'Flynn said. The airports operate a monopoly. There is no other place where airplanes can land in Dublin, Cork or Shannon other than Aer Rianta airports. Most regional airports cannot cater for jumbo jets or other aircraft of that size. What if it were sold? Ad hoc controls would not suffice.
The EU directive would be in force.
Yes. London has Stanstead, Heathrow and Gatwick Airports so there is competition.
There is also the city airport.
This country's size and population density mean there will not be airport competition here, and that must affect future ownership and regulation of the airports. The purpose of the EU directive is to ensure competitiveness and while that might apply to airports in cities such as Paris or London, it will not apply to the same extent in Ireland. There will also be other aspects to the directive.
I will withdraw the amendment in the interest of expediting debate but I will return to it on Report Stage. I accept there should be an adjustment of charges to take account of the past ten years but there should be a limit. I anticipated that the Minister would point out that the Minister of the day must give consent for an increase in airport charges.
The Minister has never had to do so.
The point is one could say that no Minister would agree to an exorbitant increase in charges. However, if a Government had the smash and grab attitude to which Deputy Stagg referred in the context of dividend policy, the company might be forced to impose such an increase and the Government might permit it. It would be possible to have a complicit Government which would be happy to increase charges because it would be the beneficiary of those charges. The Oireachtas should, therefore, impose some type of ceiling on the level of increase.
I withdraw the amendment but I intend to table it again on Report Stage.
If increases were fixed to the consumer price index it would be almost compulsory for the company to get that increase.
That is what I fear. I hope they will not be increased.
The trend in airport charges has been in the opposite direction, that is downwards. The Minister, as the effective regulator, has imposed pressure to reduce charges. As the volume of traffic grows, that is more possible and likely. However, an increase might be required. If the Minister's campaign to retain duty free shops, which I support, is not successful, substantial increases in airport charges might be necessary. We must be conscious of that.
It would be preferable if the charges wereindexed downwards. I would be concerned that the minimum increase would become a requirement.
I hope they will not go up.
The intention was to impose a ceiling, but I withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed: "That section 33 be deleted."
According to the parliamentary draftsman, sections 33 to 35, inclusive, are inappropriately located in Part IV and, consequently, I propose to delete the sections and reinsert them at the beginning of Part V, which deals with the regulation of airports.
Are amendments Nos. 88, 89 and 90 related?
Amendments Nos. 88, 89 and 90 are related.
Can we deal with these amendments which insert these sections in Part V now?
Yes.
Amendments Nos. 88, 89 and 90 are of a technical nature.
Question put and agreed to.
Sections 34 and 35 deleted.
SECTION 36.
Amendments Nos. 64 to 73, inclusive, amendments Nos. 75, 77 to 79, inclusive, and amendments Nos. 83 and 84 form a composite proposal and may be discussed together. Is that agreed? Agreed.
I move amendment No. 64:
In page 30, subsection (4), line 9 after "company" to insert "or a subsidiary of the company".
Amendment agreed to.
Section 36, as amended, agreed to.
SECTION 37.
I move amendment No. 65:
In page 30, subsection (1)(a), line 14, after "subsidiary" to insert "of the company".
Amendment agreed to.
I move amendment No. 66:
In page 30, subsection (1)(b), line 17, before "or" where it firstly occurs to insert "of the company".
The aim of this amendment is to tighten the language by using the more specific term "subsidiary of the company" as opposed to the vague term "subsidiary".
Amendment agreed to.
I move amendment No. 67:
In page 30, subsection (1)(c), line 18, after "subsidiary" to insert "of the company".
Amendment agreed to.
I move amendment No. 68:
In page 30, subsection (1)(d), line 22, after "subsidiary" to insert "of the company".
Amendment agreed to.
I move amendment No. 69:
In page 30, subsection (1), line 24, to delete "a subsidiary" and substitute "the first-mentioned subsidiary".
Amendment agreed to.
I move amendment No. 70:
In page 30, subsection (1)(i), line 28, after "or" to insert "first-mentioned".
Amendment agreed to.
I move amendment No. 71:
In page 30, subsection (3), line 43, before"a question" to insert "of the company".
Amendment agreed to.
I move amendment No. 72:
In page 30, subsection (3), line 44, after "subsidiary" to insert "of the company".
Amendment agreed to.
I move amendment No. 73:
In page 31, subsection (4), line 8, after "subsidiary" to insert "of the company".
Amendment agreed to.
I move amendment No. 74:
In page 31, subsection (5), line 9, to delete "1963, " and substitute "1963".
This amendment proposes to delete a comma.
Amendment agreed to.
I move amendment No. 75:
In page 31, subsection (5), line 10, after "subsidiary" to insert "of the company".
Amendment agreed to.
I move amendment No. 76:
In page 31, subsection (6), line 11, after "who" to insert "knowingly".
The amendment ensures that nobody would inadvertently or unknowingly commit a crime. I suggest we include the word "knowingly" to protect those concerned.
It is interesting to look at amendments to try to see the angle from which people are coming. The section, as drafted, requires directors who have a private interest in any matter before the board to say so and to remove themselves. The amendment would apply to directors only who knowingly had an interest. I would prefer to put this matter back on the director's desk and say he or she should know their business when they present at meetings. The word "knowingly" might give them an out.
I intended to give them an out if they inadvertently were in breach of the section. Members must comply with other legislation of which all of us could be in breach unwittingly or unknowingly and could go to jail. Because words such as "knowingly" are not included, a hard interpretation is being taken. Somebody may make a mistake like, for example, a farmer filling out an application form for a headage payment who states he has three bullocks and one heifer instead of two bullocks and two heifers and who does not get any money.
The Deputy would have to go to Deputy Yates about that.
Inadvertent mistakes should not lead to a criminal offence. The inclusion of the word "knowingly" would avoid that. I take the Minister's point that people sitting around the table should know. However, many people sitting around the table would not be expert on such regulation.
They should not become a director of a company unless they are aware of their duties.
There are worker directors and people doing a public duty who may not necessarily be au fait with aspects of the law concerning the enterprise in which they are involved and who could get caught out inadvertently. I do not want to give a blank sheet to anybody.
We are not trying to get recalcitrant, mischievous or corrupt people off the hook. If the chief executive officer of a bank was appointed to a board or somebody who had a connection with or equity in a bank, they might not know about every aspect of each investment. While a person might not have a direct or an executive role, it could happen in these supertransparent days they could be tripped up, although they might be a very useful board member.
I notice section 37(4) states: "Where the Minister is satisfied". That would allow an element of common sense if a person came to the Minister with a believable story that they did not know one of the bank's equity managers, for example, was involved in something. I see merit in both arguments. Perhaps if section 37(4) could be strengthened to say "the Minister is satisfied the person did so knowingly."
In these days of transparency, people should be quite clear about their interests and those of the company in which they propose to accept a directorship. I have discretion in this regard.
The dilemma is who decides what was done knowingly or otherwise. I agree it could be misinterpreted later for the wrong reasons, although proposed today for the right ones. The flexibility is too wide.
I will withdraw the amendment.
There was merit in the amendment.
Amendment, by leave, withdrawn.
Section 37, as amended, agreed to.
The Select Committee adjourned at 4.5 p.m.