Dáil Éireann díospóireacht -
Wednesday, 16 Nov 1983

Vol. 345 No. 12

Control of Exports Bill, 1983: Second Stage.

Minister for Trade, Commerce and Tourism (Mr. Cluskey)

I move: "That the Bill be now read a Second Time".

The purpose of this Bill is to continue in force, on a permanent basis, the statutory powers in the Control of Exports (Temporary Provisions) Act, 1956, as renewed from time to time; to provide that orders made under the legislation may be of permanent duration; to extend the time limit within which proceedings for summary offences may be brought, and to provide for increased penalties for offences.

The Control of Exports (Temporary Provisions) Act, 1956 was enacted originally for a period of three years. As the need for the legislation has continued to exist the Act has been renewed under various continuance Acts. The most recent of these was the Control of Exports (Temporary Provisions) Act, 1956 (Continuance) Act, 1982 which extended the operation of the 1956 Act for a period of one year until 31 December 1983. That measure was the eighth renewal of the Act.

The Act empowers the Minister for Trade, Commerce and Tourism to prohibit, by order, the export of industrial goods of any description save under licence issued by him. In accordance with the Act such orders have a life of 12 months only and may be annulled by a resolution of either House of the Oireachtas at any time during that period. Control is at present exercised on a range of goods under the Control of Exports Order, 1982, copies of which were presented to the House in December 1982.

I wish to inform Deputies that I am satisfied that there is a continuing need for this legislation for four main reasons. Firstly, it enables us to comply with our obligations under European Economic Community law to restrict the export of essential materials to third countries where such action is necessary and for the benefit of Irish and Community processors generally. At present these obligations require the exercise of restrictions on the export of certain scarce scrap metals to conserve supplies and to maintain conditions of comparative price stability in the Community market.

Secondly, it provides the Government with the legislative authority necessary to ensure that strategic materials are not exported from or through this country to destinations where they could be used for undesirable purposes. Export control on material classified as strategic is not operated at Community level. By arrangement members of the European Economic Community and some other countries control the export of such materials under their national legislation. This Bill will enable this country to continue to do likewise. Our participation in this international strategic control is based on this country's need to import certain high technology industrial materials and components required by more sophisticated industries which in latter years have been established here and which contribute significantly to our exports. Since the movement of these materials to Ireland is contingent on our participation in the strategic control arrangements it is essential that the Minister should continue to control the export of materials of a strategic character to ensure continued access to the materials and components concerned to the extent that they are needed and thereby ensure that employment is maintained in the industries which use them.

Thirdly, Deputies will agree that it is only prudent for any Government to have immediately available to them a means of dealing quickly with any emergency which might deprive the country of essential materials during any period which might be required before corrective legislation could be enacted. For example, excessive export trade which would leave Irish industry short of basic raw materials, such as scrap metals and certain kinds of timber, might, in the broad national interest, need to be curbed at short notice.

Finally, it is essential to have the authority to control exports to any country if such action were required by our foreign or other policy considerations.

As I have said, this legislation has been renewed by the House on eight occasions. It has now been in operation for over 26 years. I am satisfied that the reasons for its retention which I have just outlined will continue for the foreseeable future. As no practical difficulties have arisen during the entire period of its operation I consider that the time has come to make the legislation permanent and, in addition, to provide that orders made under it are also permanent. My proposal should also appeal to Deputies for the reason that permanent legislation will remove the need to take up the time of the House with future routine renewals.

In addition to making the legislation permanent, I would now like to draw the attention of Deputies to two other changes in the existing legislation which are included in the Bill. The changes concern penalties for offences and the time limit on institution of summary proceedings. The present maximum penalty, which was fixed in 1977, for making a false or misleading statement in order to obtain an export licence is £500. I consider that this is not an adequate penalty because of the fall in the value of money since then. In addition I believe that a more effective deterrent is needed by way of imprisonment and value related fines to discourage misrepresentations particularly in the area of high technology. The value of such goods can often be very substantial and unauthorised exports of strategic goods could put Irish industry, and employment in jeopardy. High technology sales abroad are now making a major contribution to the growth in our exports and the seriousness of any act which would put this contribution at risk cannot be overstated. In the circumstances I consider that the penalties outlined in section 3 of the Bill will be effective and at the same time be fair in that they are not excessive in the light of the considerations involved. I should specify that these penalties are:

For summary conviction a fine not exceeding £800 or imprisonment for a term not exceeding six months or both the fine and the imprisonment; and for conviction on indictment a fine not exceeding £10,000 or three times the value of the goods for which the licence is sought, whichever is the greater or imprisonment for a term not exceeding two years or both the fine and the imprisonment.

With regard to summary proceedings, experience has shown that the normal six month period allowed under the Petty Sessions (Ireland) Act, 1851, for the initiation of such proceedings and which has operated in the legislation up to now is inadequate. In the area of export control there can be a considerable time lapse between the date of commission of an offence and its discovery and completion of an investigation. For that reason it is proposed in section 3 (9) that summary proceedings may be commenced at any time within two years of the date of an offence.

Apart from the changes to which I have referred, this Bill is the same as the export legislation which has been in force for many years and for the reasons which I have outlined I commend it to the favourable consideration of Dáil Éireann.

Mr. Flynn

Ba maith liom cuidiú leis an Aire i leith an Bhille seo. Ní reacht conspóideach é agus is féidir liom glacadh leis an méid atá ráite ag an Aire ar chuid de mhíreanna an Bhille. Ba mhaith liom ceisteanna a chur air níos deánaí maidir leis sin, ach níl mé ag cur in aghaidh an Bhille in a iomlán.

This is not controversial legislation. This matter has been considered many times in the past 26 years. Having a brief look at former speeches made by different Ministers under various Administrations, this Minister's speech today is more or less a rephrasing of those speeches, apart from the changes in the latter part of his speech concerning new penalties that will be imposed.

Despite the fact that this is non-controversial legislation, it has a certain importance; and that importance is increasing rather than diminishing. Since 1956 there has been a considerable change in the industrial environment of this country. What might not have been of serious consequence in 1956 has developed and is now a matter of major concern to the industrial development and growth of our economy. In the intervening period our industrial base has developed and our sophistication in industrial development has improved considerably. We have now reached the technological age and the major part of our worthwhile industry is based on technology. Consequently there is a greater predominance of effect so far as this legislation is concerned.

Those involved in the 1956 legislation had a certain amount of foresight. It is important to point out that this legislation does not affect agricultural products or fishery products because they are covered under other legislation but this Bill covers all other exports. It is well to put it on the record that all exports, irrespective of the form they take, can be covered by this legislation and can be subjected to licence issued by the Minister.

It is reasonable to expect that today, 26 years later, we need a definitive measure to deal with exports at this level. Our experience has shown that there has been no undue difficulty with any of the licences issued, and it is not anticipated that there will be, but that is not to say that there has not always been a need for the most careful consideration of certain types of exports. That, I understand, is the basis for this legislation.

The national interest has to be protected, particularly as far as strategic metals are concerned. While people do not normally regard scrap or waste metal as of strategic importance it can very well be so, particularly in an emergency. For that reason it is important to have under our control the means to maintain in our own jurisdiction basic raw materials for industry. Previously the mention of strategic goods would have led to the question of arms and why we do not have any manufacturing capacity in arms production. Some people felt this was an area in which we could have been very gainfully employed. Should we ever get involved in the area of arms, this legislation would be of particular relevance. I presume this would also cover ammunition. I do not think we have any manufacturing capacity in that area, apart from commercial explosives, and I presume they are covered here too.

Electronic and precision instruments come under the heading of high technology and industries based on electronic and precision instruments have been the fundamental base of our industrial strength over the past few years. The Minister may smile when I say this, but former Administrations, particularly the party to which I belong, can take heart from the fact that they provided considerable funding for the development of this type of technological industry, which is the mainstay of our present industrial base. It is important that we encourage the development of these products and that we would not place in their way anything that would deter them from increasing their development and exports. I am sure the Minister does not have in mind using this legislation to inhibit the development of these high technology industries. The practice has not been to do so. I take it that the control of strategic metals would be used to protect this technological development.

The Minister referred to needs, which have not changed, and the question of our EEC obligations in this area. It is important that we maintain price stability at home. I imagine there would be a great tendency for exporters to get involved in exporting waste and scrap metals to third countries where there is a ready market for these products. Those countries are at the stage we were at in 1956. It is important that this legislation be used judiciously to maintain a price structure that will enable our technical advance to continue unhindered.

There is a special reference in this legislation to the export of strategic materials from or through this country. I am particularly anxious about the trans-shipment of certain materials through the country and, on Committee Stage, I will be asking the Minister precisely what means he has of monitoring trans-shipment as against something that might be produced here for export. A great deal of the waste materials referred to could be utilised for undesirable purposes should they get into the wrong hands. I take it the Minister will be able to satisfy me about this matter.

While there is no EEC direct legislation on a global basis to deal with these kinds of exports, there is quid pro quo between the various interested governments and I presume that ours takes it on the basis that for our technology industries to increase their output and to improve their situation in world markets it is necessary for us to import technical material and particular metals and materials of high technology to maintain and develop our technology industries. I can well understand that if we are allowed to import from other countries the kind of technology and materials that we require for our industries it would be only normal to expect that we would have to control our exports to the suppliers' satisfaction. However, I warn in that regard that, while we might require materials and components for the use of our high technology industries, at the same time I would not like to feel that the Minister was over-anxious to placate the desires or demands of those countries exporting to us what would be imports for our high technology so as to restrain us as to where the exports might go. I ask the Minister to keep in mind in allowing the licences, that as long as the third countries to which our exports would be going would not have an undesirable purpose in mind, he should be generous enough with the licences in that regard.

The main reason for introducing this legislation is the emergency situation and that we could very well have shortages here that we might not be able to deal with in the absence of this legislation. It is interesting and a little disturbing to note the mention of the word "timber" as suggested in the Minister's statement. It is not acceptable to me or, I think, to the Irish people that the thinnings, which could be regarded loosely as the waste part of timber, the waste section of the industry, can be exported at £1 a tonne, I presume under licence. But if so, I would like to think that the day is fast approaching when the Government will take direct action to see to it that it is a strategic material as far as we are concerned. It is alarming that we can be exporting timber at £1 per tonne in any form and that we cannot maintain a viable production unit here to utilise that strategic raw material that we ourselves are growing. It has been going on for some time and these arrangements had been entered into with another Department, but the Minister could well look to it to see that this export is not abused and if a licence is required to export it the most stringent regulations should be attached to it. Timber will be a major issue in this and other economies in the next ten years. I see it as a strategic material and the time should be approaching when no licence will be issued for the export of any of that product.

Section 2 (2) of the legislation is in regard to our foreign policy requirements, which should have a great bearing on several of the licences that the Minister might be asked to recommend. However, as the question of exports is under discussion and is very topical now, it might be no harm this morning to refer to other exports and to the need for increased exports and their importance in the economy at present. The Bill is headed "Control of Exports" and we have other legislation to deal with the development of exports, but the label "Control of Imports" might much more appropriately be attached to it.

Mr. Cluskey

It has not got that theme.

Mr. Flynn

The figures outlined in a recent report dealing with a whole range of exports-imports of this country indicate that our exports are up about 19 per cent in value for the first nine months of this year and our imports are up 3.5 per cent in that nine months. However, bearing in mind that retail sales have been down 5 per cent in the first six months, it is only when the whole thing is taken in a packet that we realise that while the balance of payments might look well on paper it is no indication of the health of the economy when consumer spending is dropping through the floor. The figures might look well in the short term but there is no doubt that if there is ever to be an upturn in this economy imports will increase greatly and that will bring us to a situation worse than we have had already.

I am trying to make it obvious that the Minister should not take comfort from these figures. He can take comfort in the export figure, as we all can, and we hope that that trend continues; but it is only in a particular area of activity, the area of activity that this Bill will in the main apply to, the question of high technology industries. It is the only area of exports that is really making a significant impact on the balance of payments now. We read today reports about an economic turn-about in the economy nationally and internationally, but there is no indication in many of these reports of the strength or duration and it is quite unclear as to whether there will be any duration in that initial turn-around in the world economy. It is well to put the general public on notice that whatever turn-about in the world economy exists now is unlikely to affect Ireland in the short term and, I take it, in the medium and long term, that is up to two years.

An Ceann Comhairle

The Chair does not think that this Bill presents a proper forum for a general economic debate.

Mr. Flynn

I agree, and I made that reference because I understand that an opportunity concerning the increased export promotion drives may be given to us in the very near future. At the same time, when one refers to control of exports——

An Ceann Comhairle

A passing reference is all right but not a general in-depth debate.

Mr. Flynn

We would not like the general public to be led astray in thinking that now we have such an export position that we must control it. I am pointing out to the Minister that statements which are somewhat misleading are appearing in the public press and they would lead people to believe that there will be increased spending power in the economy for the individual in the next financial year, particularly with reference to those who have a job. I would like to think that the general public would recognise that what is required of the Government now is some action of the Government to prevent further unemployment and a further reduction in the living standards of the Irish people by generating increased exports under a whole range of headings. If the only attitude we get from the Government at this time is that there is to be serious capital expenditure reduction next year this will have an enormously damaging effect on the whole economy.

An Ceann Comhairle

I am satisfied now that the Deputy is getting into a fully fledged economic debate, which is not in order on this Bill.

Mr. Flynn

I had not intended to do so. I take it there will be an opportunity for that.

An Ceann Comhairle

One sometimes drifts into things that one does not intend to drift into.

Mr. Flynn

You are being very observant this morning, A Cheann Comhairle. There is a sharpness in your attitude and in your observance of the rules that is not always visible at this hour of the morning. However, you are quite right. Export promotion and the whole question of an economic debate is not suitable to this Bill and I do not intend to prolong this except to draw attention to recent reports in the newspapers that there is an upturn and that we can expect improved standards of living next year. I notice that is not so, unless what the Government have in mind is another serious attack on the disposable incomes of the general public by way of cutbacks in services and in capital expenditure next year, something which will have the most disastrous effects on job creation in the building industry in particular. The Minister, as a member of the Government, must create an environment which will entice investment and increase our exports. That is what this whole discussion is about.

Mr. Cluskey

I take it I will have the same latitude when replying to the Deputy.

Mr. Flynn

The Minister interrupts in the hope, he says, that he will get the same latitude. That is something at the discretion of the Ceann Comhairle.

An Ceann Comhairle

Perhaps the Deputy would come back to the Bill now.

Mr. Flynn

The Minister knows full well with the magnificent latitude——

An Ceann Comhairle

I would direct the Deputy back to the Bill now.

Mr. Flynn

Not a morning passed but the Minister took the most magnificent latitude on every Order of Business while he was in Opposition. However, I am not one to follow that example and take that latitude and I hope the Minister will bear that in mind. I would like to think this Bill would be disposed of without any undue difficulty. There are some matters I shall raise on Committee Stage, some aspects on which I should like more information. I wish to thank the Minister for introducing the Bill in order to have a definitive measure put on the Statute Book.

Minister for Industry, Commerce and Tourism (Mr. Cluskey)

I came in with what would appear to be a simple, limited Bill and ended up with an Adjournment Debate. A number of points were raised, some of which did not bear very much relationship to the Bill. However, I shall try to answer those that did.

I welcome Deputy Flynn's approach in so far as he spoke to the Bill. He recognised the desirability of having permanent legislation giving the Government legislative authority to control exports and ensure that our industry has the protection that authority would afford. As I said in my opening statement, the Bill is in fact only confirming on a permanent basis what has been in operation and has worked well for the past 26 years. The exception in the Bill is the review of the penalties for anyone who seeks to obtain a licence for export on the basis of misleading information. The question of people trying to use trans-shipment to this country is, in fact, covered in existing legislation. Section 1 covers definitions only. "Exportation" is defined to include trans-shipment as it is particularly desirable to have power to control trans-shipment because of the danger that this country might be made a base to which strategic goods might be trans-shipped to undesirable destinations. That is covered in the Bill. It is an important aspect of the Bill and I welcome Deputy Flynn's drawing attention to it.

He raised the question of growth in attracting industry engaged in high technology and the contribution that has made to our exports over the last number of years. I assure the Deputy the purpose of the Bill is to ensure that the contribution high technology has made to our exports continues because, if we were not in a position to control exports, many of these high technology industries which are dependent on importing certain materials would be adversely affected and employment in these industries would be cut very seriously indeed. Unless we comply with the requirements of this Bill we would be putting high technology industry at serious risk. Instead of hindering industry this Bill is to ensure its continuance and, indeed, its growth. All possible assistance, and I am sure Deputy Flynn will agree with this, will be given to ensure that our exports continue. The only restriction on that would, of course, be our own interest from the point of view of the retention of raw materials here essential for our own use and compliant with our international obligations.

The question of exports was raised and also the question of living standards. I take it Deputy Flynn was there referring to a report by the ERSI published this morning.

Mr. Flynn

Is this relevant?

Mr. Cluskey

I think it would be most discourteous not to give the Deputy the information he was apparently seeking.

Mr. Flynn

It would be most discourteous not to obey the Chair.

An Ceann Comhairle

The Chair tried to keep speakers to the Bill but he did not altogether succeed and, therefore, the Chair considers the Minister is entitled to reply to the remarks made.

Mr. Cluskey

I shall not go into great detail. The matter was raised in regard to exports and I think it is only right to put the record straight. This year our exports are likely to reach a figure of £6,850 million. That is almost £200 million more than was expected at the beginning of the year. That figure speaks for itself. If the economy is to recover——

An Ceann Comhairle

If hope the Minister is not going to go into the economic situation.

Mr. Cluskey

A great deal of this high technology industry, as the Deputy is aware, was attracted to this country between 1973 and 1977 — not all of it, but a great deal of it.

Mr. Flynn

Very little.

Mr. Cluskey

Irrespective of who attracted it, the important thing is that it is contributing very substantially indeed to our exports and there is no doubt, if we are to achieve economic recovery, the thrust of that must be in the field of exports. Also, the importance of our general exports, not only in relation to job creation but to job retention, is not always recognised by the general public.

To comply with the wish of the Chair that I should not go into any great detail on some points raised by Deputy Flynn, I do not intend to elaborate any further. However, it is fair to say that when a Minister comes into the House on the basis of a very limited Bill and any Member of the House seeks to widen that very considerably indeed and in such a way as to use it as a vehicle for scoring political points, it is incumbent on the Minister taking the Bill to ensure that those points — some of which are totally inaccurate or distorted on many occasions — should be countered. In order to facilitate the Chair, it is not my intention to do so on this occasion; but when a limited Bill is used as a vehicle for a full economic debate the latitude which I requested should definitely be forthcoming. It would be my intention on further occasions to avail of that latitude to reply to Deputies, which latitude I am sure the Chair will afford me.

In conclusion, I thank Deputy Flynn for his contribution on those aspects which relate to the Bill.

Mr. Flynn

Will the Minister give me notice when he will deal with the rest on another occasion?

Mr. Cluskey

I look forward to the full passage of the Bill during the coming week. I hope that the issues referred to by Deputy Flynn will then be dealt with satisfactorily.

Mr. Flynn

The Minister's notion as to what a full scale economic debate is leaves a lot to be desired. I can assure him that when that economic debate comes the Minister will have to withstand a heavier barrage than that.

An Ceann Comhairle

I am sorry, Deputy. The Chair will have to be firm.

Question put and agreed to.

An Ceann Comhairle

When is it proposed to take Committee Stage?

Mr. Cluskey

Next Tuesday, subject to agreement.

Committee Stage ordered for Tuesday, 22 November 1983.