Amendments Nos. 1 and 2 in the name of Deputy John Bruton. I observe that amendments Nos. 1 and 2 are alternatives and I am suggesting therefore, that they be debated together by agreement. Is that agreed? Agreed.
Restrictive Practices (Amendment) Bill, 1987 [Seanad]: Committee Stage.
Sections 1 to 4, inclusive, agreed to.
NEW SECTIONS.
I move amendment No. 1:
In page 5, before section 5, to insert the following new sections:
"5.—(1) The following shall be prohibited as incompatible with the law: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States or within this State and which have as their object or effect the prevention, restriction or distortion of competition, and in particular those which:
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
(b) limit or control production, markets, technical development, or investment;
(c) share markets or sources of supply;
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
(2) Any agreements or decisions prohibited pursuant to this section shall be automatically void and shall be an offence under this Act.
(3) The Commission may declare the provisions of subsection (1) to be inapplicable in the case of:
—any agreement or category of agreements between undertakings;
—any decision or category of decisions by associations of undertakings;
—any concerted practice or category of concerted practices;
which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not—
(a) impose on the undertaking concerned restrictions which are not indispensable to the attainment of these objectives;
(b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.
6.—(1) Any abuse by one or more undertakings of a dominant position within the State or in a substantial part of it is prohibited and shall be an offence under this Act.
(2) Such abuse referred to in subsection (1) of this section may, in particular, consist in—
(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
(b) limiting production, markets or technical development to the prejudice of consumers;
(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
7.—Any act which is contrary to the terms of section 5 and section 6 of this Act shall be a wrong within the terms of the Civil Liability Act, 1961 and it shall be open to a court to grant damages to any person injured by such a wrong in accordance with the provisions of the Civil Liability Act, 1961.".
I have some written remarks which can be circulated to any Member who wants a copy. The purpose of these amendments is to radically change Irish competition law. Instead of relying on cumbersome investigative procedures to deal with individual abuses, the new provisions would ban abuse outright from the beginning. Irish consumers pay higher prices for groceries than consumers in Northern Ireland. This has been the finding of a recent ESRI study.
Our industrial costs are also out of line with those of our competitors. It is generally accepted that, this being the case, more competition is the best way to deal with the problem and bring down prices. The high prices that exist in Ireland compared with other countries, in particular Northern Ireland, are evidence that the Irish law to promote competition is not working. I expect this will be borne out when the Minister eventually publishes the Restrictive Practices Commission report on price differentials which, I believe, he has had in his possession for some weeks now. The reason that our competition law is a failure is not hard to find. Irish competition law, largely unreformed since the late fifties, is based on very cumbersome procedures. It takes a very long time, indeed, for action to be taken against an anti-competitive practice, such as price fixing.
First, there must be a complaint from an individual or association. Then there is a lengthy investigation by the examiner, or soon to be the Director of Consumer Affairs. This investigation is quite substantial and the matter is then referred to the commission which conducts an investigation which is very similar to a court proceeding. That having been considered, a report is prepared and presented to the Minister. The Minister does not announce any decision on the matter until that report is printed, and the printing can frequently take six weeks or more. If the Minister decides to go ahead with the matter, an order must be drafted and that can take a number of months. Finally, when the order is drafted, it must be approved by both the Dáil and the Seanad. Particularly in the case of the Dáil it can take quite a number of months before time is found for the debate in the Dáil on the order.
The investigation by the commission can frequently take up to six months. The examination of the matter by the Minister between the printing and other consideration of the issue can take a further three or four months. The drafting of the order can take another three or four months and finding time to have the matter debated in the Dáil can take a further three or four months or six months. This process alone can take up to three years from the time a complaint is made to action being taken to outlaw it. Meanwhile, throughout the three year period, the practice complained of continues without hindrance.
Even when this long process has been gone through there can still be other hitches. For instance, in April 1982 the Restrictive Practices Commission recommended the removal of the restriction on conveyancing and advertising by solicitors. That is more than five years ago. The Attorney General advised that these matters could not be dealt with by the Minister for Industry and Commerce by an order under the Restrictive Practices Act because they affected the Solicitors Act and required an amendment to the Solicitors Act. The Attorney's advice was that it would have to be dealt with by the Minister for Justice who is responsible for the Solicitors Act.
The recommendation made in April 1982 in regard to conveyancing has now joined the very long queue in the Department of Justice for legislation awaiting the attention of the legal services in that Department. Of course, competition policy is not a departmental priority for the Department of Justice. It is a departmental priority for the Minister for Industry and Commerce and his Department. The Restrictive Practices Commission report of 1982 on this matter is a virtual dead letter because another Department have to deal with the recommendation rather than the Department of Industry and Commerce. I have another amendment which will attempt to address that problem.
There is another defect. The orders, when eventually made, have too narrow a focus. Even when an order is made it applies only to the limited sector or trade about which the original complaint was made. Action on similar or analogous practices in other trades which have not been the subject of the specific investigation initiated by the complaint necessitates going through the entire cumbersome process all over again with a view to making further specific orders in regard to that other trade or activity.
There is a fourth defect. The law in regard to competition is unpredictable. In theory a practice may be banned simply because it is "unfair". This is essentially a political and not a legal concept. What is unfair today might have been perfectly fair 50 or ten years ago or might be regarded as fair ten years from now. Nobody can, therefore, predict with certainty what the Restrictive Practices Commission or the Minister might decide to be unfair in particular circumstances. This unpredictability is bad for business, as well as being bad for the consumer. It is bad for business because unless people can predict exactly where they will stand on the basis of legal advice they cannot make investment decisions. If having made investment decisions thinking a particular practice would not be banned as being unfair and subsequently it is banned on that basis — the Minister has complete freedom to do so because "unfairness" is such a flexible concept — the investment made can be set at nought. This amendment proposes that we should have a definite set of rules applying to all sectors which can be interpreted by lawyers or by officialdom on the basis of exemptions, so that people in any given area will know exactly where they stand in regard to certain arrangements on which they base investment decisions.
My amendments are designed to remove from competition law those four defects, namely, the cumbersome nature of the process, the fact that the orders can only be made in respect of issues directly within the Minister's own remit and not other areas, the limited nature of the orders when eventually made in terms of sectors and the unpredictability of the criteria applying to the law.
Although we have had restrictive practices legislation since the late fifties, only a tiny proportion of our economy has been subjected to any investigation under it. Groceries and motor spirits are the only sectors upon which orders have been made in the past 15 years which are still in force. Competition law is little more than an expensive sham. The present Bill improves matters slightly in that it simplifies somewhat the administrative procedures for investigations but the four basic defects I outlined remain almost the same as ever.
There is a need for a more radical approach. I argue, and my amendments provide, that the best route to follow would be the precedent set by two other small European countries, Greece and Portugal. They decided that rather than go to the trouble of devising unique national competition laws banning certain practices they would introduce the strong, effective and well-tried competition rules of the Treaty of Rome directly into Greek and Portuguese law. This is exactly what my amendments would do here. The text of my amendments follows word for word, with minor adaptations, the provisions of Articles 85 and 86 of the Treaty of Rome. Here in Ireland, as in the rest of the EC, the Treaty of Rome rules apply only to trade between one state and another. In trading between Ireland and Britain, for example, one cannot engage in a restrictive practice without being in contravention of EC rules on competition. That does not apply to trade or transactions within Ireland. In Greece and Portugal, on the other hand, the EC rules apply not only to commerce between those countries and others but within those countries themselves. I should add that France is following a similar procedure in its new competition law.
I believe this approach followed in full by Greece and Portugal, and partly by France, is better than the one we now have. This is because the Treaty of Rome, unlike Irish law, imposes a general ban on specified restrictive or anticompetitive practices in whatever sector they are. There is no need for investigations of particular sectors before a particular practice becomes illegal. The rules apply uniformly to all sectors from the outset. There is a procedure for exemptions for particular procedures or practices which can be shown to be of benefit to the consumer but these exemptions have to be individually granted. That is the exact reverse of the Irish position where all restrictive practices continue to be legal until they are individually banned. Under EC rules all restrictive practices are banned until individually exempted.
The change I am proposing is relatively simple. Basically all that is needed is to incorporate the terms of Articles 85 and 86 of the Treaty of Rome, as is done in my amendments. If my amendments are accepted we will then have the benefit not only of these well-tested Articles but also of the large body of European case law elaborating their meaning in practical situations. It would bring much needed certainty to our law. Irish business would then be subject to the same rules in its domestic transactions as it already faces on export markets. Resources currently devoted to lengthy inquiries and to the drafting of individual orders for individual sectors could then be diverted to the enforcement — this is what is lacking in Ireland — of a well established body of law. Businessmen, rather than having to wonder whether a particular practice was going to be deemed "fair" or "unfair", would then know where they stood.
Essentially, the new law would then ban all arrangements to fix prices, to control the supply of goods or services, to share markets or to discriminate disproportionately between customers. These are all practices which push up prices. An outright ban along the lines of the Treaty of Rome and the lines of my amendment is the only way, in my view, to deal with these problems. An objection may be raised that the administration of the exemption of certain arrangements under subsection (3) of my amendment would require an army of officials to scrutinise a mound of applications for exemption. This has not proved to be a problem in Europe. The Commissioners responsible for competition policy, formerly Commissioner Andreissan, and now Commissioner Sutherland, have introduced two specific procedures to get around these difficulties. I would recommend such procedures here to those responsible if these amendments are accepted.
They have introduced a system of block exemptions for certain categories of agreement. This removes a lot of paperwork. Commissioner Sutherland has for instance used this technique to exempt agreements concerned with or indeed cooperation, between firms. He has also, I understand, exempted out of the block exemption procedure, agreements concerned with patents, know-how licensing and franchise agreements. I understand that the block exemption procedure has been used quite effectively to remove any unnecessary paperwork in regard to categories of agreement which can ab initio be deemed not to be ones likely to be in conflict with the public interest. That is one process whereby unnecessary paperwork, unnecessary scrutinising of exemption applications, can be removed by simply saying there is no need to apply if you come within the terms of a specified block exemption.
By introducing rules which people would have to find out whether they were contravening in some fashion; either by seeking legal advice, getting an exemption from the Minister or failing to get an exemption from the Minister — in which case they would know they had to modify the practice — there would be the fear that this would take a lot of time. The fear would be that businessmen would be waiting and would be uncertain on what their position would be until the bureaucratic wheels had ground to their conclusion. To counter that problem the Commission have introduced a system of negative clearance. If a firm applies to have a particular agreement or decision exempted there is a procedure whereby if they have no reply from the Commission within a given period — two months is the period they use — the agreement or decision is thereby automatically exempted.
I understand also from inquiries I have made that the staff involved in the Commission, considering the size of the Community with which they are dealing, is at present proportionately no larger than the staff we have in competition policy, very ineffectively not because of the individuals concerned but because of the law in Ireland. There are about 150 officials in the Commission dealing with the entire Community of 300 million people. The number of officials dealing with competition policy here — dealing with the problems of three million people — would probably be larger proportionately than the Commission's staff. I do not see that as being a particular difficulty if there is a will to overcome it. I have indicated in the two recommendations I have made — one the system of negative clearance and the other the system of block exemptions — that any fears for the business community as to uncertainty or for the administration as to cost can be set at nought.
In the context of an amendment like this we must look at the overall public interest and the interest of our economy. If the Irish economy is to grow, it must become more competitive. Being competitive means having more and better competition. Comfortable and cosy arrangements, whether in the services or in trade, that push up costs should be outlawed if we want our economy to grow. If we want job creation in Ireland we must get out costs down, we must promote an atmosphere of survival in difficult conditions rather than of attempting to create cosy conditions by pushing up costs for others. The protectionist mentality of traditional Irish industry and services must be eliminated. These amendments, unlike the existing law, would do just that. They are a radical attempt to improve the competitiveness of the Irish economy and, therefore, are of central importance in the battle for job creation in Ireland. I hope these amendments will have the support of the House.
I wish to explain why there are two amendments rather than one. One of the amendments provides that to engage in the practices listed would be both a criminal and a civil wrong. In other words, there would be the possibility of the Minister or the enforcement authorities prosecuting a person for it and if it was done to the detriment of somebody else in the different dentists.
The other amendment soley provides for it to be a civil wrong and does not provide for any criminal remedies.
I would prefer, and probably the Minister would prefer the first approach, the one which provides for both civil and criminal sanctions to apply, or perhaps he might prefer only criminal remedies to apply, with no civil remedies at all. I am not dogmatic about that matter. I am not unduly concerned about which would be the appropriate one. The Minister in this debate may be able to enlighten us from the expertise available to him in regard to enforcement whether it should be a combined criminal or legal sanction, solely criminal or solely civil. The important thing is that certain practices should be banned ab initio in order that we can make our economy a great deal more competitive and our job creation drive a great deal more successful than it has been in the past.
I support my colleague Deputy Bruton in relation to amendments Nos. 1 and 2. They signal a proposed new departure in relation to competition policy. In my contribution on Second Stage I pointed out a number of areas where I was dissatisfied with current consumer practices in Ireland on the basis that consumer protection had developed primarily on EC directives or case law and that the effectiveness of some of the legislation at present was limited.
One area I mentioned as being of greatest concern to me is that relating to professions. As Deputy Bruton outlined in some detail, if one wants to change the process relating to existing areas where the Restrictive Practices Commission have conducted a study, such as the advertising ban by solicitors, one finds that it is an extremely slow and cumbersome process. Surely there is a strong case for uniform treatment of the professions, whether it be architects, accountants, solicitors, or in the medical field, opticians, dentists, chiropodists or whoever. Surely there should be some basic consumer rights. First there should be some method by which the public would be entitled to elicit information to enable them to compare different levels of fees, some level of information in order to determine which was the most qualitative service.
Subparagraphs (a) to (e) of amendment No. 1 clearly outline some of the practices being engaged in in these professions. For example the subparagraph reads:
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
Effectively they have a cartel in terms of fees. In some areas it is unethical to charge more than a certain rate. Certainly it is unethical to reveal publicly how much one is charging.
Subparagraph (b) reads:
limit or control production, markets, technical development, or investment;
It is true that, in most cases, if one examines the third level educational requirements of some of these professions, one finds that they are in some way regulated by the profession itself.
One of the difficulties at present being encountered is that there is a myriad of different bureaucracies, Departments, dealing with these different professions. Each of them goes in for special pleading. Each can produce very eloquent, articulate, cases to defend their particular restrictive practice. The unarguable case is that 3.5 million consumers — on the basis of the lowest common denominator — have certain rights from these professions. What Deputy Bruton is trying to ensure here is the best way to go about this. If this House were to take, in a piecemeal fashion, each profession, each idiosyncrasy, each exemption, we would make no progress whatsoever. I see no difference between one profession and another. There is a basic right to information in relation to fees and services. This would mean that if I wanted to have a tooth extracted, or a filling done by a dentist. I could compare the price and service available between four or five trade, they could sue and get damages.
Deputy Bruton referred to a very important aspect which is that, if we raise competition standards in professions, and right across industry generally, it will improve our export potential. One of the major changes taking place is the potential export of the professions, particularly, architecture, quantity-surveying and so on, because of the advances made in information technology whereby, over a telephone line and a facsimile machine, one can relay the tendering for professional services right across the world. There is an unarguable case that, if Ireland is to participate in the opening up of export market potential in the professions, we should have some competitive basis on which to operate at home.
I do not wish to detain the House unduly because there will be cross dialogue in relation to these amendments. However, I should like to develop further the last point to which Deputy Bruton referred, that is, whether it should be the civil or criminal law which should be invoked. I would have a strong preference for the civil law being the process through which this could be pursued. Whether it be Muriel Scorer in the building societies, or in another area where someone wants to ensure fair play, a new entrant to a particular profession, it should be left to individuals, through case law, to find their own level of dissatisfaction and subsequent enforcement through the courts. What I am saying is that, because of the current restrictions — and recently I had parliamentary questions down about staffing levels for the previous offices of the Director of Consumer Affairs and the Examiner of Restrictive Practices, and that of the new office — I am satisfied that there are not adequate resources available to ensure proper staffing. As was the case under the provisions of the Supply of Services and Sale of Goods Act, 1980, what this House passed is great in theory but, in practice, can be limited enough. If people have recourse to the civil law to get fair competition, fair trading, to get adequate levels of information in relation to these professions, that represents the best way to proceed. Therefore, I support this amendment with that particular emphasis.
Deputy Keating, who spoke on Second Stage, is unable to be here today so I am taking over for him temporarily.
Amendments Nos. 1 and 2 seem to me to reflect very much the thinking on which Deputy Keating elaborated on on Second Stage and also that of the Progressive Democrats on this issue. It seems to me to be a mistake, a missed opportunity, to go ahead with this Bill without giving serious consideration to the incorporation of a prohibition principle, as opposed to control of abuse, seeing that it is the principle which is invoked almost entirely throughout Europe.
On the system as it stands, and that proposed under the terms of the Bill, I would contend that it has an over-dependence on complaints being made; certainly to date it had that dependence. It definitely was a cumbersome procedure, very slow, with many problems being encountered along the way, abuses and restrictions being removed only because of the complaints, if any, that are lodged. I realise that, under the terms of this Bill, the powers of the commission and of the director are being widened to enable them to make inquiries on their own behalf. I would still contend that it is tinkering with the essence of consumer law here. In terms of consumer rights it is fairer to put the onus on the undertaking or business concerned to ensure that they are not putting the consumer at a disadvantage. I do not see why that onus should be put on the consumer. The consumer is an individual and has very little strength compared with the cartels, businesses and professions who get together and incorporate restrictive practices into their respective activities.
In the Second Stage debate the Minister referred to what is now being proposed by Deputy Bruton, and to which Deputy Keating referred in the course of that debate, as being a more costly procedure. He left it at that without giving any further explanation. I should like to hear the Minister elaborate on exactly how much more costly it would be and whether, in the long run, it would not be more cost-effective. What was said by Deputy Bruton about the fact that the staff would be involved in enforcement rather than inquiry could make quite a difference to the effectiveness of the provisions of this Bill. I see no point in putting more legislation on the books that is almost impossible to police and enforce.
It is important also to have regard to our relationship with Europe which is changing amd moving towards closer harmony after the Single European Act. In particular, we are moving towards 1992 when we are supposed to have total harmony in many areas. I see it as a retrograde step to single out this consumer legislation for keeping us apart from the mainstream in Europe. I realise that Britain has a system which is akin to the one suggested here and that we have been operating to a certain extent. But even they insist that any restrictive agreements be registered and the vast majority of them are, in fact, disallowed. So it seems to me that they have gone some way towards implementing a prohibition approach.
We need a fundamental, radical change in our approach. We have been given an opportunity here with new legislation being introduced. If this amendment is not allowed, we will have lost that opportunity for a considerable length of time. It will mean that the onus is put on the consumer and on the director and the commission who simply cannot keep up with the amount of work involved in pinpointing every different area of abuse.
Tinkering with the system also leaves a huge amount of uncertainty for business, trade, industry and consumers. It simply is detrimental to consumer legislation. It encourages it to be ineffective. The kind of restrictive practices such as price fixing, withholding of supplies, market sharing etc. which we have seen here are to the detriment of the consumer. One example which comes to mind immediately in the circumstances we see surrounding the B & I debacle is the cartel that operated on the Irish Sea for so long. That simply would be outlawed if this amendment were introduced and, as a result, the consumer would have basic protection afforded to him. The companies involved, if they found it too onerous or if they felt that it was detrimental to trade, would have it open to them to make an application.
There simply will never be a real change in approach to the rights of consumers if we do not switch to at least some element of the prohibition approach. Some of the areas have already been mentioned here today — professions, trade, business of any kind, each having its restrictive practices operating. The director and the commission will never get around to examining them all and reporting on them all. It would be far simpler to implement a prohibition approach.
Finally, I would like to say a word on the alternative amendments which are being offered. The first is to involve both civil and criminal law. While I note what Deputy Yates says about confining it to the civil law, I think it could well be important to keep both the civil and criminal law possibilities there because, whereas the consumer is entitled to find his own level and to establish what his rights are under the civil law, the ultimate sanction should be there for the Minister, for the commission and the director to stamp the common good on the implementation of this legislation so that if somebody is blatantly entering into restrictive practices which are outlawed under this amendment, the full sanction of the criminal law will be there if it is necessary to use it. I have not given a lot of thought to it but I believe instinctively that that would be the right thing to do.
First, let me say that I welcome the contributions on these amendments. Just in case the impression might be created that the acceptance of these two amendments will solve our uncompetitive situation in the Irish economy and reduce the cost differences between North and South, let me say that is far from reality. If it were as simple as that and we could solve all the uncompetitive aspects of this economy by passing just two amendments into legislation, the Government would be only too delighted to do it. It is not as simple as that.
Basically, there is a vast differential in taxation and indirect taxation between North and South which contributes to a fair extent to the differential in price which causes disadvantages in operating in the Irish economy as against in the North of Ireland economy. There have been many ad hoc surveys done, not indepth surveys, as to what the cost differentials are. A more recent one on RTE was not comparing like with like. It compared a small cash and carry in northwest Donegal with a major cash and carry in Belfast. The report Deputy Bruton referred to is at the printers and it will be published soon, and it will not show these vast differentials; it will show a survey which spreads over a wide number of items, not hand picking certain items. There is a cost differential and it will not be solved by the acceptance of two amendments here.
The basic argument is between the advantages and disadvantages of the prohibition system and the control of abuse system. Let me say at the outset that I have looked at this. It was mentioned on Second Stage here by Deputy Bruton. As I see it, the disadvantages attaching to the prohibition system are that it is inflexible and costly to administer. I will go into details as I go through it. It requires specialist staff to administer, and this has been the experience in Europe where we took a look at it in the short time since Second Stage. There is no question in my mind whatsoever but that, rather than creating a better environment for industry and business, it creates uncertainty. The backlog of applications which has been experienced in Europe shows that it causes great uncertainty and business does not thrive in an uncertain climate. There is no question but that they want to get on with their business.
The effect of this amendment would be to change the whole basis of competition legislation in Ireland. It is a fundamental, basic change that is being asked for here from the control of abuse system which we currently have to the prohibition system. Under the existing system of competition policy in Ireland there is no outright prohibition on restrictive practices. Rather, the Restrictive Practices Act, 1972, provides a schedule of unfair practices to which the Examiner of Restrictive Practices and the Restrictive Practices Commission must have regard in carrying out investigations. The commission may recommend to the Minister that he should make an order prohibiting certain practices relating to an area where they held a public inquiry.
The orders made under the Restrictive Practices Act, 1972, are therefore confined at present to areas that have been examined by the commission. It should be noted, however, that under section 8 of this Bill the Minister will in future have power to make restrictive practices orders on his own initiative, subject to consultation with the Fair Trade Commission and with any other Minister concerned. I would remind the House that rather than take on board the suggestion that it takes three years to do so, in February this year there was a report on below cost selling and the banning of "hello-money". I signed the order in May. Rather than looking at the Restrictive Practices Commission, we should look at this House. The confirmation legislation did not pass here until last week; yet this order was signed on 27 May. Rather than point the finger elsewhere, we should look at ourselves in this House to see if we can improve the situation. Here in this House only last Friday, Deputy Bruton made a suggestion to me in relation to streamlining that system, and we will have an interesting discussion on that later on. Anything that can help to streamline it and make it more effective will be very welcome.
The wording used in the proposed amendment is taken basically from Articles 85 and 86 of the Treaty of Rome. They generally prohibit all agreements or concerted practices which are likely to distort competition in trade between member states, unless the restrictive elements in these agreements or practices are offset by results beneficial in the long run to the consumer. Article 86 prohibits the improper exploitation of a dominant position in the market place. These rules apply generally to trade although special provisions apply in certain areas such as agriculture and transport.
While the prohibition system may be more desirable in principle than our own control of abuse system, in practice it has many disadvantages attached to it. Under the EC system companies must seek clearance for any agreement or undertakings which they enter into with others because of the blanket ban on all restrictive practices. The huge volume of agreements notified to the EC Commission for clearance has meant there are long delays in dealing with individual cases.
This has resulted in temporary negative clearances, or letters of comfort being granted to the companies involved.
Letters of comfort are temporary, informal approvals which have no legal standing. If this system is to be introduced here, the same problems may be anticipated. In times of scarce resources it is difficult to justify the extra funding which would be required to police such a system. Experience has shown that the inflexibility inherent in the prohibition system can be a major disadvantage in economic terms whereas the control of abuse system, properly streamlined — and this Bill sets out to bring this about — can be more satisfactory using existing resources and having regard to particular priority areas at any given point in time.
I take on board the point made in relation to the professions. I would remind the House that a report was published recently in relation to the accountancy profession, that one in relation to the engineering profession is almost completed and that at present an investigation is going on into the legal profession. I know that Deputy Bruton referred to changes in the Solicitors' Act but that would be more appropriate to the Department of Justice. I would not disagree with him in his views, but this is not the appropriate place in which to discuss the matter.
The control of abuse system is much less onerous in terms of policing and deployment of resources. If the Minister feels that unfair practices exist in any area, he may require the Restrictive Practices Commission to carry out an inquiry and on foot of their recommendations any unfair practices which are found to exist may be outlawed. Twenty six restrictive practices orders have been made since the first legislation in this area was passed in 1953. These orders outlaw a number of restrictive practices and cover a whole range of sectors within the commercial field. It is worth nothing that failure to comply with the restrictive practices order will make a person liable, not only to criminal sanctions, but also to civil sanctions. Besides the criminal offences provided for in the legislation which are at present prosecuted by the Minister and will in future be prosecuted by the Director of Consumer Affairs and Fair Trade, the 1972 Restrictive Practices Act also provided for a right of civil action by any person. Under section 19 of that Act any person can apply to the High Court for an order to enforce compliance with the restrictive practices order.
The first suggestion that Irish law should be changed from the control of abuse system to a prohibition basis is not new. Indeed, it was made by the Restrictive Practices Commission in a 1977 study, a study and analysis of the legislation and competition policy in Ireland in the light of economic and social changes taking place in the economy. This suggestion was considered at the time but it felt that a prohibition system would be much more costly in terms of staff required to enforce it, particularly if it were to be accompanied, as suggested, by a mandatory notification procedure.
Article 85 on which this amendment is modelled is so widely worded that it can be applied to horizontal agreements, price fixing and market sharing and vertical agreements concerning distribution, licensing and franchise. It provides for the automatic nullity of all agreements which it prohibits. There is a danger that its application could deprive of validity a vast number of agreements which are completely innocent in the sense that the restrictions they impose on the parties are not anti-competitive and may even be in the interest of competition. The process of notifying agreements to the Commission with request for exemption from prohibition has resulted in great delays in establishing whether agreements are in breach of Articles 85 and 86.
Critics of the system have complained that while an estimated over 30,000 agreements had been notified at one stage, only 22 or so had been given negative clearances, less than 40 had got individual exemptions and most of the rest were in a sort of legal limbo. Since then, criticism of the inflexibility of the EC system, particularly from the representative body for industry in the Community, has, if anything, increased. In response to this criticism, the Commission have in recent years embarked on a course of exempting whole sectors from the scope of the general prohibition by means of, first, special regulations which have been adopted in respect of inter alia exclusive purchasing agreements, exclusive distribution agreements, specialisation agreements and motor dealerships and, secondly, issuing comfort letters in individual cases giving provisional sanction to agreements, although it has been pointed out by the representative body for industry in the Community that these letters have no legal basis and are therefore of little practical use to the company concerned. Anybody would appreciate that the uncertainty of this legal limbo is not an atmosphere in which any business can thrive. It is not conducive to a good business environment.
Articles 85 and 86 of the Treaty are in any case already binding in this country by virtue of our membership of the EC. In general, the concern of the Commission would be to ensure free competition between member states. Articles 85 and 86 would also have application in a domestic context. The EC Commission would be entitled to intervene if it felt that arrangements existed in Ireland which were contrary to the Treaty. For example, Article 85 refers to agreements which may affect trade between member states. If the Commission were of the opinion that an agreement which existed here should have an adverse effect on Community trade generally, they could take action under Article 85. In addition, a private individual or a business enterprise would be entitled to take a court action for a breach of EC rules and the Irish courts would have to have regard to Articles 85 and 86 when coming to a decision in relation to any purported restrictive trade practice or abuse of a dominant position.
Deputy Bruton referred on Second Stage to the competition laws of Greece which are modelled on Articles 85 and 86 of the Treaty of Rome and recommended that we should follow Greece's example, or at least examine it. Some research has been carried out in the Department into the Greek system although, as I am sure the Deputy would appreciate, this has not been a very detailed examination because of the short time available. Information obtained from the Greek authorities shows that a highly specialised staff are required to administer this legislation and that, in fact, the person largely responsible for implementing the legislation in Greece is on secondment from the EC Commission. Apparently, although the laws have been in force since 1977, they have not been used on more than a dozen occasions per year, largely because lawyers were unaware of their implications.
The new measures being introduced under this Bill should speed up the investigatory process and thus make the legislation more efficient and effective, which is the basic thrust behind this legislation. I would remind the House that I did not draft this legislation. I took it on board when I came into office. I certainly have not lost any time in the interests of consumers in taking any action that was open to me. If I had not been held up so much in this House as I have been, I might have been able to achieve more. The sooner this Bill gets on to the Statute Book, the better. There are many complaints in relation to banking charges, professions and so on and the sooner I can deal with the exemptions which have been in the existing legislation the sooner I shall be able to take action.
The beneficial results of increasing the membership of the Restrictive Practices Commission to three full time members is reflected in the fact that five reports of investigations have been received from them over the past 15 months. In particular, the commission's report of the inquiry into the accountancy profession has been published in the last few weeks and in addition, a report on the commission's inquiry into the engineering profession will be published in the next two to three weeks. Finally, when the Director of Consumer Affairs and Fair Trade gets the power of prosecution under competition legislation and the scope of competition legislation is extended to include electricity, banking and communications, many areas will be investigated and the control of abuse system will be seen to be far more efficient than it has been up to this.
Would the Minister be prepared to exercise his powers under section 12 of the principal Act to have the Restrictive Practices Commission carry out an investigation of the case for and against the introduction of an amendment along the lines I have proposed?
Yes, I am prepared to do that.
Would he request the commission to do so straight away, or as quickly as possible?
I shall do that.
I thank the Minister. That is most satisfactory. I trust that the commission will take account of the statements that have been made by Deputies Colley, Yates and myself and, of course, by the Minister on the other side of the argument in this debate. It is fair to say that the debate on both sides has been a very good one. The Minister has raised a number of valuable points to which I should like to respond.
As I said originally, the commission have been conscious of the difficulties that might arise in regard to delays. They have deliberately introduced procedures to overcome the difficulties in question. I refer to the negative clearance procedure and the procedure of block exemptions. I might suggest that in the event that the commission decide to recommend in favour of a prohibition system, or even decide to recommend against it, but want to deal with the prohibition system as giving the Minister the option to go for that system, they might, as part of the study the Minister has indicated will be undertaken at his request, look at what would be the appropriate block exemptions. In this way the Minister would get a package containing a recommendation for the incorporation of Articles 85 and 86 into Irish law, plus a package of block exemptions so that a number of practices would be exempted ab initio rather than have the Minister having to come in subsequently and say that he has made certain other exemptions. That may not get over all of the difficulties but it could get over some of the difficulties to which the Minister referred in his reply.
The other question relates to the highly specialised staff and the size of the staff. My contacts in Brussels have given me slightly different impressions to the ones given by the Minister. As I have said the number of professional staff in the Commission, who deal with this matter for the entire Community as distinct from the logistical support, amounts to 150. I accept that is not directly comparable with Ireland in the sense that one deals with very big cases in the Commission whereas here one would be dealing with individual agreements, for instance, between publicans in one town, that they would all put up their prices on a particular day. I have to concede to the Minister that there are differences of scale. A staff of 150 is not a large staff to deal with a population of 300 million in Europe. In fact, it is quite small. I accept the point which the Minister made that it is highly undesirable that business agreements should be in a form of legal limbo and before one could adopt an amendment along the lines I am proposing one would have to be satisfied that that difficulty could be overcome. Perhaps the Minister could ask the Commission to look at that aspect of it. There appears to have been a very strong objection made on his behalf in regard to it. Nobody wishes to create uncertainty.
There is always a case for saying that the best is sometimes the enemy of the good. There is no doubt that if one seeks absolute perfection and no difficulties in the administration of this legislation one would probably never introduce it. On the other hand, one must remember that there are many cosy arrangements and excesses charging in the Irish economy which are going to continue despite the improvements which have been referred to and despite the willingness of the Minister to take action quickly in regard to any matter which may be brought to his attention simply because, as Deputy Colley rightly pointed out, of a lack of information. At present somebody has to go out to find the abuse, report on it and then go through this process of dealing with it. That puts the onus on the Minister, his officials and agencies, with the aid of the public, to find the abuse.
The proposal in this amendment would put the onus on the people who are engaged in business arrangements to make sure that they comply with the law. That would mean that many practices which one may be completely unaware of at present which are effectively putting up prices would be eliminated simply by the publication of this Bill as people would take evasive action to put themselves on the right side of the law without it ever coming to the attention of anybody, be they the Minister or his officials. One of the advantages of the prohibition system is that it has a pervasive effect, some of which is invisible in terms of commercial practice. I ask that the commission in looking at this issue, as the Minister has agreed, not simply to concentrate on the disadvantages but rather at the big picture and the very substantial advantages which will flow from an arrangement along these lines.
I will not comment in detail on the Greek system. The Minister made a case that could conceivably be seen as being a little bit contradictory, although I do not think it is, in that he said it took a large staff to deal with this matter but then said there was only one person from the Commission dealing with this matter in Greece. Admittedly, he did qualify that by saying that there was not very much happening. Perhaps that is because the Greek public have changed their practices and the Minister the next time he is in that part of the world on business might personally investigate the matter.
Greece is Greece.
Portugal is Portugal and they are equally attractive. As I have said, the French are doing it and, as the Minister probably knows, the British operate a notification procedure through their Office of Fair Trading, where certain categories of agreements have to be notified. That is not based on exactly the same principle as this but it is similar.
I welcome the commitment the Minister has given to ask the Restrictive Practices Commission to conduct an inquiry into this subject. This debate has, therefore, served a very useful purpose. I do not think realistically one could expect the Minister in a debate such as this — even if he was entirely happy with the purposes of this amendment which he is not as yet — simply to accept the amendment and put it into law without some further inquiry. The Minister in agreeing to ask the Restrictive Practices Commission to conduct an inquiry, which I can assure him I will follow with interest, has been quite forthcoming in response to the amendments. I am glad of that and, therefore, I do not wish to press the amendments.
I would like to make a few brief comments in regard to the Minister's reply. I also appreciate the fact that he has committed himself to requesting the Restrictive Practices Commission, soon to be known as the Fair Trade Commission, to investigate the possibilities of incorporating one of these amendments or something like it in legislation. I note the points he made about the difficulties involved, certainly in the initial stages, when a change is made in such a drastic way to the prohibition principle. I suggest that these delays are part of the settingup procedure and that they need not necessarily continue once it has been set up. Those difficulties could be suitably addressed if one did decide to switch to the prohibition principle.
One of the elements which could help would be to provide block exemptions, to which Deputy Bruton referred. I see some possibilities in that. The Minister also referred to delays in introducing legislation. On a party political point, I would like to draw the Minister's attention to the fact that this House only sat until 26 June and then adjourned until 14 October. There was no necessity for that to happen. If legislation is on the stocks I will be very happy to sit further into the summer to continue the work we were elected to do. I know there is a very heavy legislative schedule for this week and next week and I would encourage the Minister and the Government to enable the Dáil to deal with that in a more businesslike fashion.
In recognising what the Minister said about uncertainty in business, about making things rather difficult for business interests to carry on their trade or manufacturing business, I would like to draw the attention of the House to the fact that this is consumer protection legislation. There is no doubt that there is a difficulty in one Minister having responsibility for both the encouragement of industry and the protection of consumers. Whereas I think the Minister is not necessarily at fault, I would see that in principle there is a difficulty. This came out very particularly here. I have to ask which is the priority in the Minister's mind in this legislation. Is it the protection of the consumer or the protection of business interests? I say that it should be the protection of the consumer. While there are changes being made in this legislation which will make the procedures more effective and faster to implement, which will make it easier all round, the basic underlying fact is that it will still be nibbling at the edges. It will not tackle the basic rights that consumers are entitled to. I suggest that it would be very difficult for the Minister for Industry and Commerce to go about providing that. I ask the Minister to consider that and the other difficulties that are involved and to acknowledge them and perhaps ask another Minister to take responsibility for consumer interests. I do not know which Department might be more appropriate but there is a difficulty here and it should be addressed.
There are some points about which I feel very strongly but I shall not labour them. Basically, the Minister said he was against prohibition because it would lead to uncertainty, that it would be costly and excessively bureaucratic. Perhaps I should preface my remarks by saying that I very much welcome the fact that the Restrictive Practices Commission are going to look into the whole area of competition, regulations and framework superstructure. Perhaps they will look at the Official Report in this regard.
I am totally dissatisfied with the situation at present. The Minister alluded to the quick response he made in this House in dealing with the ban on below cost selling. I would contrast that with the report of the RPC in April 1982 on advertising by solicitors and on the restrictions on conveyancing. It irked me no end to hear the Minister say that that is a matter for the Department of Justice, that it has nothing to do with him. The Minister has responsibility for consumer affairs and consumer protection.
I will come to that in later amendments. That is why I did not proceed any further.
I strongly believe that Deputy Colley is right in saying that it is not appropriate that any Department should have responsibilities other than for consumer affairs. I said on Second Stage that there is a strong case for the establishment for a limited period in political terms of the office of a Minister of State at the Department of the Taoiseach with responsibility for consumer affairs, a Minister who would go through each Department, whether it be the Department of Health who deal with dentists and opticians or the Department of Justice — in whom I have no confidence because of the quick way they would bring forward legislation — who deal with solicitors. It is vital that someone be given a task force job with an inter departmental brief to bring this forward and to get a new deal for consumers. It is no good for the Minister to come in and say that the RPC have made a recommendation about accountants and that there is one on engineering on the way because those reports tend to gather dust.
They do not gather dust in my time; they might have when you were there.
Only last Sunday I spoke to someone who talked in terms of business being choked by the uncertainty and extra bureaucracy which Deputy Bruton's amendment would bring into being. To put the matter in perspective, I spoke to someone the other day who is setting up a retail business. He has had to pay £250 to an architect to apply for change of use for planning permission. He will have to pay between £500 and £1,000 a year to an accountant to comply with State requirements and he has had to pay another £500 to a solicitor for contracts of employment to oversee a lease on the property etc. Therefore, people incur expenditure of thousands of pounds when they set up small businesses that may have a very limited turnover. They have to pay grossly excessive fees because of a lack of proper competition. I am not saying that this applies universally, that everybody is over-charging. What I am saying is that the public have a basic right to two factors. First, there should be no cartel in a local town or county area whereby there would be insufficient numbers of doctors, dentists, architects or solicitors and no proper competition. Secondly, they should be able to shop around and get quotations and in certain cases displays of prices should be available. Until such time as that is the case we will not have satisfaction in this area.
I ask the Minister when he is replying to the section — and I am sure we will not be dealing with it for too much longer in view of his commitment to set up an RPC investigation into it — to say if he considers he has any responsibility for the implementation of RPC reports. He has responsibility for consumer protection even though the legislation, as this House operates, may be the responsibility of the Minister for Justice under the Solicitors Act or the Minister for Health under the Dental Act.
We will deal with that in later amendments but not in this one. I will tell the Deputy what I feel about that when I come to them.
I feel very strongly that the expediting of this process would be greatly facilitated by this amendment and I hope that the RPC will recommend the uniform changes which Deputy Bruton is seeking.
I want to make a few quick comments in relation to the points made. Nobody should have any doubt as to where I stand in relation to the consumer. I have set out specifically and made it my priority to get a better deal for the consumer and I will continue to do so. I hope I will get the full support of this House in that regard.
I do not see a conflict of interest by being the Minister for Industry and Commerce and having responsibility for consumer affairs. This Bill is complete because the two autonomous bodies — Director of Consumer Affairs and the Fair Trades Commissioner — will be totally independent and removed from the Minister and they will be able to carry on their business in that fashion. I was not in any way referring to the protection of business interests when I spoke in this debate. I am interested in an efficient industrial base, a competitive Irish economy and I have to be concerned about anything that adversely affects that. My information is that the delays in Europe are on the increase, not on the decrease. However, I have already given a commitment to the House that I will refer the matter to the Examiner to have a look at it. I do not think it should be dealt with here by way of amendment, it is too fundamental for that. It will be referred immediately for examination and we can debate it further in the future.
With regard to the other points raised by Deputy Yates, I have a responsibility to ensure the best deal for everybody and I will certainly do everything I can in that respect but I cannot overturn every piece of legislation, as we will find later when we deal with other amendments. I will certainly improve legislation in any way I can in the interests of the consumer.
I do not want to lengthen the discussion but I should like to give one or two quotations from Commissioner Sutherland, who is responsible for competition policy in Brussels, and which are relevant to this. The exemption procedures are quite new and, therefore, it would be wrong to come to the conclusion that they will not deal with the backlog until they have been in operation for some time. I want to quote from a speech made by Commissioner Sutherland on 21 May this year when he said:
In September 1986, the Commission adopted a new notice on agreements of minor importance, the purpose of which is to indicate to undertakings which agreements the Commission considers, by virtue of their impact on competition within the common market and on trade between Member States, not to fall within the scope of Article 85 (1). The new notice, will relieve many small and medium enterprises of the burden of notifying their agreements and will facilitate cooperation between them. More importantly still, it will give them legal security in the conduct of their operations.
I believe that the process outlined by the Commissioner can be followed here if we go along the lines of the amendment.
In the same speech Commissioner Sutherland said in regard to the desirability of incorporating EC rules into domestic law which my amendment also proposes:
...I have on various occasions emphasised, as I do again today, both my personal commitment and that of the Commission as a whole to encourage more frequent ... application of Articles 85 and 86 by national courts. Several reasons underline this policy: (1) a more frequent application of the competition rules on a national level would lead to a greater awareness of the Community rules on the part of the citizen of the Community; (2) given the physical and psychological proximity of national courts, decentralised application would often provide a quicker and more efficient solution in cases where the competition rules apply; (3) a further desirable consequence of decentralised application is that the Commission's workload would no longer include cases which do not pose any particular complicated or novel legal or economic issues ...
It looks as if the Commission want us to move in that direction. A further difficulty was raised by Commissioner Sutherland in a speech on 17 October last year. In the course of that he said:
Cases involving Community competition law do not appear to involve any special or unusual obstacles over and above those inherent in any commercial legislation. However, it is possible that litigants might encounter difficulties in gathering evidence outside the jurisdiction. Proof of interstate trade might also prove a problem.
If my amendment was adopted we would not have to prove interstate trade, it would apply to internal transactions. One of the obstacles in the way of enforcing existing Community law would be removed in that the interstate trade requirement would no longer apply. Not only would my amendment make our competition law more effective, it would also make EC competition law more effective within our jurisdiction because the interstate trade test would not apply. I hope the Restrictive Practices Commission will take account of those arguments when considering the matter. In view of the Minister's assurance that this will be investigated by that body I will withdraw my amendment.
Amendment, by leave, withdrawn.
Amendment No. 2 not moved.
Sections 5 to 7, inclusive, agreed to.
SECTION 8.
Question proposed: "That section 8 stand part of the Bill."
I have an aversion to sloppy terms which can be interpreted by anybody to ban almost anything to suit themselves, depending on the mood at the moment. While I accept that our present procedures are so cumbersome that nobody is going to do anything overnight there is this element of uncertainty contained in the law. I acknowledge that this is simply a rewriting of legislation that is in existence and that there is nothing new in it but that does not mean we should not debate the provision to see if it is right. If the law is to become more active, as we hope it will, then deficiencies that might have laid at the heart of the legislation for years and cause no problem could become a problem. For instance, in subsection (b) it should be sufficient to say "prohibit unfair methods of competition (whether or not relating to price)". I do not think there is any need for the words "unfair practices or". If they do not involve competition, what sort of unfairness are we pursuing?
It could be argued that one business is more efficient than another because the owner of one spends all his time communing with nature, thinking of the finer things of life and developing other aspects of his personality while the other owner is a workaholic. It could be argued that it is unfair that one should succeed to the detriment of the other. I accept that that is not what the Commission will look at but if we put in unfairness, which is almost a moral concept, we are getting into an area where God only knows what is going to be decided. I do not think that is very good.
I have a similar difficulty with subsection (c) under which the Minister is entitled to make any provision he thinks necessary to ensure the equitable treatment of all persons in regard to the supply or distribution of goods or the provision of services. I know what the Minister intends by that but what is "equitable"? We are all for such terms as social justice and so on at election time but what do they mean in practice? How can any businessman predict what Deputy Reynolds will consider equitable as against what Deputy Colley will consider equitable? Nobody knows in advance and that is the difficulty about the uncertainty of that law. I am all for equity and social justice but we are talking about creating criminal offences if certain actions are not deemed to be in accordance with the Minister's interpretation of what equitable means. In my view we should aim to be more precise and say exactly what we are getting at. It should be related to unfair competition which has the effect of pushing up costs to the consumer or creating a monopoly by oppressive practices which need not in the medium term lead to higher prices for the consumer. That would allow a ban on below-cost selling, although it would not indirectly affect prices in that it could be argued that in the long term below-cost selling restricts competition by getting rid of others and allowing a concentration to arise. Ultimately, the latter will lead to higher prices for the consumer.
My argument is that the provision in section 8 should be more narrowly and specifically focused on practices which lead to higher prices now or at some foreseeable time if they are allowed to continue rather than a reference to unfair practices, equity and so on which gives the Minister carte blanche to do what he likes. I do not think the Minister should be given carte blanche in any matter and I am not so sure he would want that. In my view he would prefer to be operating within more precise rules.
Omitting "unfair" could limit the application of the legislation.
I am aware of that.
The normal interpretation of "equitable" is treating like with like. We could argue all day what the definition should be but we must ensure that the legislation is not limited in its application. On the other hand, "unfair" is a word that has become synonymous with competition legislation here. In the Third Schedule to the Restrictive Practices Act, 1972, under the heading "unfair practices" there is a long definition of what to take into account in determining what is unfair. That basically is the reason for the inclusion of it. We will come to it later.
The Third Schedule does not provide any guide. One of the provisions in the Third Schedule is that if practices "in any other respect operate against the common good or are not in accordance with the principles of social justice". That is what the Schedule says. That could be deemed to be unfair. It gives such a wide area of possible legislation by the Minister that people in trade have no means of predicting what way the cat is going to jump, so to speak, and if they are making investments they should have. There is a problem in that area which the Minister might look at.
I will.
I seek the Minister's guidance. This Bill gives for the first time powers to the new authority dealing with banking, electricity and communications. What sections are appropriate to that?
Sections 10 and 22.
I intend to move an amendment to this section on Report Stage.
Question put and agreed to.
SECTION 9.
Question proposed: "That section 9 stand part of the Bill."
This section introduces for the first time the area of competition going into industrial relations. Hitherto it was impossible for the Restrictive Practices Commission in any circumstances to examine a service provided under a contract of employment. Obviously, one does not want to have competition investigations taking place willy-nilly independently of the Government's overall industrial relations policy in regard to uncompetitive practices which might exist in one place which would have the effect of increasing prices and costs. There is a safeguard in this section which provides that such an inquiry would be undertaken only with the consent of the Minister for Labour. However, I hope the Minister would judicially and carefully, in consultation with the Minister for Labour, allow the powers of this section to be used to supplement any industrial relations reforms brought forward by the Government.
Not every circumstance of industrial relations can be envisaged in any legislation that the Government might bring forward. Therefore, the possibility of an independent investigation such as this would be useful to look at particular issues where there is a dispute between one side and the other as to whether a practice is contrary to the interests of the consumer and the public at large. At the moment it might be argued that the Labour Court perform that function. In fact, they do not. As far as I can see the Labour Court's function is a simple one of splitting the difference. It is a conciliation service, not a court. They do not really look at things in an objective way of looking at the public interest. Their concern is with settling the issues between the parties before them, almost with the public interest excluded. The Labour Court in their operations as a result of legislation put through in, I think, the early sixties no longer take account of the Government's financial situation in their recommendations. That is because of a rather unwise amendment made to previous legislation at that time. I cannot remember the date.
Services provided under contract of employment can be just as frequently a cause of uncompetitive practices and high costs as services provided on a free sale basis. Therefore, there is a case for using this with due consultation between the Minister and the Minister for Labour. I hope the Government will not simply allow section 9 to be a sort of dead letter but will use it actively as part of their industrial relations policy to improve the efficiency of the economy.
I will.
Question put and agreed to.
SECTION 10
Question proposed: "That section 10 stand part of the Bill."
This is one of the sections the Minister named in his reply to me. He said sections 10 and 22 deal with the inclusion of banking and so on. Now that they have new powers I ask the Minister to see that this new office looks specifically at the profit margins of what I call plastic money. I understand that the profit margins of Access, Visa and other such cards are extremely high. I am aware also of a degree of takeovers in the last number of years and different cards are now amalgamated into one card. In the UK there are currently many calls for an examination into this area. I hope that can be followed up. No body are higher in the league of arrogance than the ESB in the way they deal with the public.
Patrick Moriarty would not like to hear the Deputy say that.
Mr. Moriarty and I do not agree on many things. It is disgraceful that if anyone gets any installation of electricity into a house, business, mobile home or whatever and queries the capital cost of it, that person is invariably told that the matter will not be altered and if he does not accept the terms within three or six months it will be increased. That is disgraceful, and there is nowhere for such people to turn to. They waste time writing to the Minister for Energy, or the secretary of the company, or anybody. Those people cannot go to another company and they cannot afford a generator. That aspect of the ESB's operations indicates that: (a) they should be asked to give a full explanation as to how the costings were arrived at; and (b) people should have some right to write to Jim Murray or somebody to query if it is fair. I believe the ESB are shifting around some of their cost into this area, and that is totally unfair.
As section 10 deals with this matter I suggest to the Minister that those two areas should be the first items taken up by the new office under these new powers. I have other views about the extension of this area to other State services, local authorities, health boards, BTE, An Post and so on. With the Ombudsman's office under financial restrictions, greater uniformity should be aimed at here. I will leave that for another day but I would like plastic money and the capital quoted by the ESB for installations to be the first items on the agenda to be taken up under these new powers.
Despite my facetious intervention I support strongly what Deputy Yates said about the ESB. I have similar experience of people being quoted large sums of money for the cost of installing electricity and it is virtually impossible to find out the basis upon which these are calculated. The ESB will not tell you the breakdown between labour and materials and, as Deputy Yates says, because the ESB are a monopoly you cannot buy your electricity from somebody else so you more or less have to accept their terms for installation. Let it be said that the same applies to BTE who have a monopoly and can do the same.
This section will ensure that the Fair Trade Commission can now investigate the operation of banks, the ESB, any transport service provided or operated by CIE or their subsidiary companies, any air service in or out of the country if restrictive practices are operating there, any transport service provided by a private operator which was previously exempt, any shipping service and the service of any harbour authority. For the first time, as a result of this legislation, which I am proud to have steered through the previous Government and which the present Minister has brought forward now, there is an enormous field for investigation by the commission.
I would particularly like the commission to look at the treatment of private suppliers of electricity who sell electricity into the ESB grid. At the moment the ESB pay a price to private suppliers of electricity which is designed almost to discourage private electricity generation. This is something which was commented on by the Jakobsen committee who asked that the ESB change their practice in that regard. If that is not done, the powers in this legislation should be used. However, I see a problem in regard to this. If something has to be done as a result of a recommendation by the Restrictive Practices Commission, will the Minister have to refer this to the Minister for Energy who will have to introduce a special Bill to amend the Electricity Supply Acts? If so, nothing will happen.
This argues the case for some of the amendments I will be putting forward later, that the Minister for Industry and Commerce, with the consent of the Government and this House, should have the power to make amendments to other legislation by means of the order making powers under this legislation rather than passing the ball to somebody else, in this case the Minister for Energy who is the principal shareholder in the ESB and who will not be quite as enthusiastic about consumer rights as the Minister for Industry and Commerce.
Similarly, for the first time this legislation will allow the commission to examine restrictive practices in the shipping services. For instance, if there is a cosy arrangement on the Irish Sea between shipping companies to keep prices up by restricting the number of sailings, then it will be possible under this section for that to be investigated, and I hope it will be.
I have some worries about the exemptions in section 10 for services provided by the local authorities. It is fair to say — and this was part of the Fianna Fáil platform during the last local elections — that local authorities should become more involved in promoting employment. If that is so, they may become more involved in the provision of economic services of one kind or another. They are involved in refuse collections which are done on a commercial basis. Let us assume that there is a possibility that a service which is provided by a local authority could be provided by somebody else on a competitive basis, but the local authority say they want to maintain a monopoly of that service. If it is a refuse collection service and the local authority refuse to give the competitor access to the pithead, for example, in that type of commercial operation it is possible for the local authorities to engage in unfair competition. I do not understand why the Minister has come to the conclusion that local authorities should be exempt because, as I understand it, this exemption of local authorities was not contained in the original Bill but was introduced by means of an amendment.
It is in the original Bill.
I stand corrected. There is a strong argument for not exempting local authorities as is proposed here. All in all, I welcome the section and the Minister should use it to deal with the subject matter raised by Deputy Yates.
In regard to transport services, there should be the possibility of individual routes or packages of routes operated by CIE being made available on a competitive basis for other contractors. I recognise that some of the services are loss-making and are provided as a social service, but that problem could be overcome if CIE were to put up for tender a package of routes, some of which were loss-making and some of which were profit-making, telling the people who tender that they must operate all the routes according to the schedules they had determined, including the loss-making route. If they can provide this service at a lower cost and still make a profit, that is fine as long as the frequency and standard of service are maintained. It should be possible to do this.
In the interests of the consumer and of competition, I hope the Fair Trade Commission will be asked to look at the efficiency and competitiveness of our public transport services to see if there are areas where we could put these routes out to tender. There is a need for a public service body such as CIE to hold the reins and ensure that certain standards are maintained, that costs are not excessive and that vulnerable groups in society do not lose services simply because the profit motive alone determines what service should be provided. I accept that fully, but subject to guidelines laid down by CIE, there are many possibilities for private enterprises to be introduced into the provision of public transport on conditions that are fair in regard to the maintenance of socially as well as commercially viable services. The only thing that is stopping this happening is that CIE have some difficulty in operating an accounting process which distributes cost and evaluates the actual cost of individual routes. This is an intellectual exercise which would appear to be beyond CIE, but it should not be. There is no reason why a change along the lines I have mentioned could not be made. I ask the Minister to have the commission look at that aspect, too.
The only substantive objection I have to this section is the exemption to local authorities. If the Minister is concerned one could introduce an amendment which said "... local authorities, within the meaning of section 2 of the Local Government Act, where they are providing a service which is not being charged for...". If the local authority are providing a service which is being charged for, then they should be subject to the competition law. I would contemplate introducing an amendment to that effect on Report Stage.
I have one point to make on this section. As a new Deputy I have noticed that the accountability of all our State bodies is almost nil. I have found it quite unbelievable that when State bodies are being set up they are not made accountable to this House. They are not accountable in any real way to the public or to public representatives. I see this Bill as a move in the right direction to make them accountable to a much greater degree through the Fair Trade Commission and the director for the service they provide to the public at large. I would encourage the Minister in this direction because it is disgraceful that bodies like the ESB, Dublin Gas, CIE and many others, whose activities affect the daily lives of our citizens, should not be accountable in any real way.
I did not expect much opposition to this section although it caused confusion on Second Stage because when the Bill was first circulated these exemptions were removed by including them in Part I of the Second Schedule to the Bill which lists the amendments to be repealed. However, in the interest of clarity and after consultation with the Attorney General's office, it was decided to devote the full section in the Bill to the removal of these exclusions which, as I said, caused confusion on Second Stage. This was done by way of amendment on Committee Stage in the Seanad. It is now catered for in section 10 of the Bill which will be welcomed by everybody because, for the first time, it takes away the exclusions and brings under the scope of consumer legislation services such as banking, electricity, supply and transport. I need not name them all as Deputy Bruton listed them. I assure the House that the powers now vested in this section will be used immediately. There is widespread concern in relation to the level of banking charges, the ESB and other areas and if there is a cosy relationship in regard to the Irish Sea we can look into it.
Deputy Bruton's question in relation to CIE is really a matter for transport legislation, I cannot bring up the monopoly of CIE. Local authorities are not a new inclusion and the services provided by them within the meaning of the Local Government Act will continue to be excluded. They are so clearly regulated by the local authority and by the Department of the Environment that they have been excluded. It may well be that in future there will be a development along those lines but not at present. I will be looking at all the aspects that now bring into consumer legislation for the first time areas causing grievous concern to the public who are waiting for this Bill to be passed to enable them to take action.
On the question of the exemption of local authorities, there is a case for saying that where they provide a refuse collection service for which they charge a fee, there should be a possibility that any unfair practices that exist in the provision of that commercial service could be the subject of investigation. Likewise, local authorities provide a repair service for their tenants as part of their responsibilities as a landlord. Other landlords are — and always have been — subject to investigation if they are engaged in unfair practices or overcharging but local authorities are not as a result of this exemption. There are suggestions in Britain, for example, that local authority tenants should be able to opt for an alternative landlord, that somebody else could provide the repair service in relation to their flat or house. Perhaps another landlord could provide a repair and maintenance service more cheaply. I hope that this possibility will be looked at in Ireland. These are all arguments for saying that in regard to services provided by the local authorities which are charged for or commercially free standing, there should be the possibility of competition policy examination. I do not expect the Minister to agree to that off the top of his head but I give him notice that I intend to move an amendment along those lines on Report Stage which would exempt genuine local authority services being provided free in the public interest which are not capable of being commercially charged for. They would include local authority services which were analogous to commercial services. Perhaps the Minister could comment briefly on that possibility.
I see the Deputy's point. The practice is not very widespread at the moment but it may progress and develop. However, I will look at it between now and Report Stage.
Question put and agreed to.
Section 11 agreed to.
SECTION 12.
Question proposed: "That section 12 stand part of the Bill."
I will not go over all the arguments which were made on section 8. Subsections (1) and (2) allow an investigation into conditions which obtain in regard to the supply and distribution of any goods or to one or more aspects of the supply and distribution of any kind of goods. This could relate to things that have nothing to do with competition, for instance, it could allow the Minister to introduce censorship of publications in regard to the sale of books. The commission could decide that they wanted to ban certain types of prurient material in books. I do not think that is what is intended but perhaps the legislation should be more precisely drafted to make it relate to prices and competition rather than almost anything one likes to mention. This is something that has run through our legislation but I simply wish to make the point, I do not want to make a meal of it.
The 1972 Act has never been interpreted in that way. The only change we are making is that the commission can carry out investigations on their own initiative. There is no fear it will be used to ban books.
You can justify it on the basis of the Schedule to the 1972 Act which includes social justice and all sorts of things.
Question put and agreed to.
Section 13 agreed to.
NEW SECTIONS.
I move amendment No. 3:
In page 8, before section 14, to insert the following new section:
"14.—Section 8 of the Principal Act is amended by the insertion of a new subsection (5):
`(5) Where the Commission relies on paragraph (b) of subsection (1) of this section as a basis for recommending the making of an order under this section it shall in its report to the Minister include a definition of the term "unfair" used by it in coming to its conclusion.'.".
This is an important amendment as it deals with the subject that has been just referred to. Where the commission make a recommendation on the basis that a practice is unfair, they should be specific in saying what they mean by "unfair" in this context. It tends to get away from the possibility of the type of wide, unstructured and unpredictable interpretation of the law which could occur from a literal reading of the provisions of the Bill. To avoid that, the commission, if relying on the use of the term "unfair" rather than a specific competitor matter, should say how it is interpreting "unfair" in this context.
I understand that in practice the commission give some such indication in that in the report of the inquiry they must give the reasons for the conclusions stated in the report. This amendment, by simply asking the commission to go a little further in saying what they mean by "unfair" in the context in which it is being applied, would remove from my mind many of my worries about the unduly wide nature of the possible interpretation of the legislation. I hope the Minister can accept an amendment along these lines which would remove the necessity to amend the legislation to eliminate all these rather loose terms by simply requiring the commission to say how they are interpreting them in a particular case. That discipline would establish a line of precedence which would tend to keep the legislation within reasonable rails, so to speak.
This amendment proposes the insertion of a new section in the Bill the purpose of which is to amend section 8 of the Restrictive Practices Act, 1972. Section 8 of the 1972 Act deals with the making of restrictive practices orders by the Minister, on the basis of a report of the commission. The purpose of the amendment is to require the commission, where they consider that the conditions obtaining in relation to the supply of goods or the provision of services involve "unfair practices", to include in their report a definition of "unfair".
It should be noted that the Act already contains considerable clarification of what is meant by unfair practices. Section 3 of the Act provides that the commission and the examiner, in the exercise of their functions under the Act, must have regard to the unfair practices listed in the Third Schedule to the Act. Therefore, when the commission hold an inquiry under section 5 of the Act, into conditions which obtain in relation to the supply of goods or services, or into the operation of an order under section 8, they must have regard to the long list of unfair practices set out in the Third Schedule.
Section 7 of the Act requires the commission to include reference to a number of matters in any report made by them of an inquiry under section 5. In particular, the report must state whether, in the opinion of the commission, any interference with competition or trade or with the provision of services is unfair or operates against the common good and also whether, in the opinion of the commission, any of those conditions involve practices which are unfair or operate against the common good. By virtue of section 3, any consideration by the commission of these matters must be made in the context of the criteria in relation to unfair practices set out in the Third Schedule. It is only at this stage that the Minister may decide to make an order prohibiting unfair practices and as this would be based on the commission's report, here again any order made prohibiting unfair practices — section 8 (1) (b) — would be in the context of the criteria set out in the Third Schedule.
The criteria in relation to unfair practices set out in the Third Schedule essentially constitute a definition of what is unfair. The criteria are, however, necessarily general because they are intended for global application. In practice, in an inquiry, or review, by the commission, the general criteria are converted into specific recommendations on which the Minister of the day must make a judgement based on, in the words of the Act, "the exigencies of the common good".
In the commission's report of inquiry of 1982 into the effects on competition of the restrictions on conveyancing and on advertising by solicitors the commission identified what they considered to be serious restrictions of free competition— paragraph (a) of the Third Schedule— and went on to consider whether these restrictions could be justified on the basis that they were necessary to preserve interests of even greater importance.
In relation to the restrictions on conveyancing, the commission concluded that they did not see that there were any such interests which would justify prohibiting a vendor from employing a non-solicitor as his conveyancer. They did, however, find reasons of the public interest why a purchaser should be prohibited from doing so. In relation to advertising, the commission established that the prohibition on advertising by solicitors was an "unnecessary restriction on the freedom to communicate", and recommended accordingly.
Similarly, in their report of inquiry of 1984 into the travel trade, the commission stated that they were satisfied that there were two widespread practices in the travel trade, namely, discrimination in trading and price maintenance, which were objectionable from the competition point of view and which in the opinion of the commission did not result in any significant benefit for the consumer. They considered that the rule of ITAA that a travel agent member was prohibited from dealing with a tour operator in another country unless he was a member of a national association recognised by the ITAA was restrictive and anti-competitive in nature. They considered it to be an interference with the provision of services in a manner which was unfair and which operated against the common good within the meaning of the 1972 Act.
The commission stated that they had in mind in particular those provisions relating to the prevention or restriction of competition, paragraph (a); restraint on the provision of services, paragraph (f); unjust elimination of a competitor, paragraph (c); restriction on the exercise by a person of his freedom of choice as to the supply of services, paragraph (g); and the exclusion of new entrants to a trade or business, paragraph (i).
Again, in the commission's report of inquiry of 1985 into policies of building societies in regard to insurance related mortgage properties and valuation reports on properties the commission stated that they must have regard to the unfair practices listed in the Third Schedule to the 1972 Act. The most relevant of these in that context was in the opinion of the commission, related to measures which have or are likely to have the effect of unreasonably limiting or restraining free and fair competition, paragraph (a); which without just cause prohibit or restrict the provision of services to any person, paragraph (f); which involved unjust or unreasonable conditions in regard to the provision of services, paragraph (h); which without good reason exclude or are likely to exclude new entrants to an industry or business, paragraph (i); or which in any other respect operate against the common good, paragraph (k). There is a very clear demonstration there that the commission have to take into account in relation to the Third Schedule what is fair and what is unfair. I hope the Deputy is satisfied with that reply.
Reasonably so.
Amendment, by leave, withdrawn.
I move amendment No. 4:
In page 8, before section 14, to insert the following new section:
"14.—Section 8 of the Principal Act is hereby amended by the insertion in subsection (1) of the following paragraph:
(e) amended any legislation, whether that be the responsibility of the Minister or of any other Minister, if this is necessary to give effect to the recommendations of the Commission.".
This is an important amendment. We have been discussing in this debate the new extension of the commission's remit into areas such as the provision of electricity, road transport, air transport, sea transport, banking and so on. All those areas are governed by legislation operated by the Ministers other than the Minister for Industry and Commerce. The recommendations emanating from the Restrictive Practices Commission Reports and the decision of the Minister will be ineffective because at present it is not possible for the Minister, by an order under the Restrictive Practices Act, to make any changes in the law affecting banking because that is a matter for the Minister for Finance, air transport or other transport services because they are matters for the Minister for Tourism and Transport, electricity supply because that is a matter for the Minister for Energy, the legal profession because that is a matter for the Minister for Justice and possibly a number of other professions or activities which have not yet been covered by inquiries in this area because the principal legislation is a matter for another Minister.
Building societies are a further example. The legislation there is a matter for the Minister for the Environment and it cannot be dealt with by the Minister by an order under this Act. This Act only allows for an investigation and a report. There is no provision for enforcement or for dealing with the problem which must be passed to another Minister. That is a recipe for long-term inaction.
There is evidence to show how this can happen. For instance, the recommendation in regard to solicitors concerning conveyancing and advertising has not been dealt with although the report was made in April 1982, because it was a matter for the Minister for Justice and that Minister has not yet done anything about it. That is not satisfactory. Another example relates to the inquiry into the restriction on the provision of dentures. This was to be dealt with by an order or by another method but the commission recommendation whereby members of the public should have the right to choose who they wanted to provide dentures was not accepted by the Department of Health and that was the end of the matter. All the commission inquiries into that matter as far as that aspect was concerned came to nought because the Department of Health said "No". If competition policy is to work there should not be this possibility of veto.
A similar situation applied with regard to a report presented in regard to tour operations. The Attorney General advised me, as Minister, that the proposed order which I had prepared was ultra vires and that this came within the definition of air services and that the Minister could not proceed by order until The Restrictive Practices Act, 1987, was amended to include air services. The Act is now being amended to include air services, but will the Minister now be told he cannot act on that order because air services are a matter for the Minister for Transport? I am afraid that will happen, notwithstanding the reply that the Minister gave me in the Dáil some time ago.
We had the same situation with regard to the inquiry into the policies of building societies relating to insurance-related mortgage properties and the valuation reports on properties. The order that was recommended was deemed to be ultra vires the Minister's powers because it related to building societies which were regarded as coming within the terms of banking services for the purposes of the Restrictive Practices Act. The Minister was then advised that he could not proceed with the order until the Restrictive Practices Act was amended to include banking business. It is being amended to include banking businesses but will the Minister be able to act on an order under his powers to deal with building society matters in future or will he have to wait for the Minister for the Environment to introduce legislation?
The overwhelming majority of activities in society, whether they be in the private or public sector are regulated in some form or another by some Minister. Even the most free of free services has some measure of regulation. I am afraid this legislation will be totally ineffective because the other Ministers responsible will say it is a matter for them, that another Minister cannot act by order under the Restrictive Practices Act and the legislation will join the queue of legislation lying in the Departments or will be rejected outright, and nothing will happen. The whole costly investigation of the matter by the Fair Trade Commission will be an utter frustrated waste of time and money.
My amendment is designed to change that situation by saying that any legislation whether it be the responsibility of the Minister or any other Minister, if this is necessary, can be amended by the Minister by order to give effect to the recommendations of the commission. I know that difficulties can be raised with regard to the amendment of principal legislation by means of an order and it could be argued that giving the Minister for Industry and Commerce the right to make orders which have the effect of amending an Act which is the responsibility of another Minister, even if the Cabinet had agreed and even if the Dáil had agreed, as it would because it has to pass an affirmative order with regard to orders under this Act, is going beyond the proper function of an order. I understand that in the case of Cityview Press v. AnCO a decision was made by the courts to the effect that orders could not amend statute. That is an academic point. In both cases the Dáil will be consenting.
In the case of an order made under this Bill the Dáil must pass an affirmative resolution. I do not propose to change the procedure with regard to orders under this Bill. The Dáil would have to decide that. However, if we leave things as they are there will be a lot of high profile investigations into the ESB, into banking and into other areas and they will all come to nothing because at the end of the day a recommendation will be made to the Minister and he will be unable to act on it because if the Minister does not accept this amendment, it will be passed to another Minister and it will be buried in the sort of incinerator that Departments have for recommendations they do not like.
The public service tends to give a poor reception to an idea thought of by another Department. I know this to be the case from intimate and continuous knowledge of the way the system works. If, on the other hand, the Department in question thought of it first it is an entirely different matter. That is human nature. It is not peculiar to Ireland or to the public service. I am sure it exists just as much in the private sector, this attitude of wanting to be the apparent master of one's own destiny. Unless the Minister has the power which I propose he should be given, he will not be able to act on orders.
If necessary a special section should be put into this Bill to clarify the legal position arising from case of Cityview Press v. AnCO. It seems to me the Dáil has the power by statute to say that that case is overturned, because statute law can overcome a court decision in that manner. There is not a constitutional issue involved here. But whether my amendment serves to solve the problem, I hope the Minister will acknowledge that there is a potentially enormous problem in getting results because of the absence of a power to amend legislation affecting other Departments. Certainly, it was my experience when I was Minister that in the case of two reports which I have already referred to that road block stopped anything being done, because the matter had to be passed over to somebody else who had not initiated the inquiry and probably their State agencies were doing their best to stop it ever happening.
If the Minister asked the Restrictive Practices Commission to do a wholesale inquiry into the ESB there would be discreet or indiscreet representations made to him on the lines that there was no need for that, as the Minister for Energy had already commissioned a report, that the Jakobsen report had already been published, that the matter was being investigated and most actively considered, that the ESB board were extremely interested in doing something about it and that it would be a total waste of time. All this comment would be poured on top of the Minister to try to prevent him from carrying out the inquiry. Persistent man as he is, I know he would, once he has made his decision, ignore such representations and go ahead and produce his report six months later or whatever. We will not argue about the length of time. It would be a radical report and the Minister would want to act on it but his colleague, and it could be himself if he were in a different job, would say "hold on, you can do none of that, that requires an amendment to the Electricity Supply Act, 1927, and subsequent amendments thereto and that is a matter for me. You have got your publicity out of the inquiry into the ESB, you have done a good job for yourself but I am not going to allow any action to be taken on this report". That would be the end of it. I know the Minister will come back and say, and I have heard it before, that things do not happen like that in a Government like his. I do not believe that human frailty has been abolished in Fianna Fáil any more than in any other political party. It exists in all parties and will continue to the end of time. It is for those of us who make rules in the House to try to envisage what will happen, indeed envisage some of the silly things we might get up to ourselves in certain circumstances and ensure that we are not allowed to do it. The amendment I am proposing will greatly enchance the Minister's power——
I doubt it.
—— in a direction necessary to give him the ability to deal with a genuine problem. Let us remember it only gives him power to make amendments on the basis of orders which have arisen from an independent investigation, which orders have been approved by the Cabinet, collectively responsible — and all the orders have to be approved by the Cabinet — and which orders have subsequently been approved by both Houses of the Oireachtas. It is only with these three preconditions being fulfilled that this would take effect in amending any antecedent statute. Those safeguards are more than adequate for anybody and I hope the Minister will seek to implement them. Otherwise I fear that unless the Minister goes over to the prohibition approach which was urged in my original amendments, Nos. 1 and 2, which would sweep all of these problems out of the way from the outset, he will not be able to deal with the problems as they arise.
In conclusion might I say there is another possibility the Minister might consider if he does not want to accept this amendment, that is, to give him power to introduce legislation to amend other legislation, the responsibility of other Ministers, if that is something recommended in a report of the Restrictive Practices Commission. The Minister would do it on the basis of an amendment to the Restrictive Practices Act rather than relying on, say, the Minister for Justice to introduce an amendment to the Solicitors Act. If the Minister says that the use of an order to amend a statute is a diriment impediment to accepting this amendment, which I do not accept but he may be able to argue that point, why should he not take the power in regard to any matter, that is the subject matter of a report from the Restrictive Practices Commission, to be able to introduce legislation to give effect to the recommendations of that order himself, with the agreement of the Cabinet, rather than simply relying on another Minister to do it by amending his own legislation?
One road or another this problem has to be solved because I do not see how we are to have an active competition policy without it, that is, unless we go over to the prohibition approach that I was urging earlier in the day.
The thrust of this amendment is validly based. I can see very good reason for introducing some mechanism whereby the Minister for Industry and Commerce is empowered to give real effect to the mounds of work, that will be done by Restrictive Practices Commission or the Fair Trade Commission. This begs the question of what is the real role of the Restrictive Practices Commission. Is it merely to be what we might term a talking shop or is it to be a body, appointed by legislation, appointed by the Government, and appointed by the Minister for Industry and Commerce to investigate any given restrictive practice? When recommending changes is it to be given the authority to suggest changes in legislation, which can be fairly expected to be put into effect? After all we are talking about legislation relating only to consumer protection, which by right is within the ambit of the Minister for Industry and Commerce. It should not come within the ambit of any other Government Minister, if it relates particularly to consumer protection. I ask the Minister to consider what level of opposition he would think is acceptable from a Department against the efforts of the commission? If the commission draft a report, present it to the Minister and the Minister accepts it and it is stymied at that point because it cannot get on the floor of the House except through another Minister, how strongly must that other Department oppose it, must they merely say "no, we will not have it" or must they put up reasoned arguments——
That means ignored.
I am taking the more positive view. They could say just a blunt no, they could ignore it, or they could argue the case reasonably, which would certainly be acceptable, as between their Department and the Department of Industry and Commerce. In the end who has the final say? If it is a matter relating to consumer protection, I say that the Minister for Industry and Commerce should have that final say. I am sure the Minister would agree with me.
For the time being.
I would draw the Minister's attention to a parallel which may be of use, which exists in the United Kingdom, relating to the value for money reports which are drawn up by the National Audit Office there. They have entered into a fairly new procedure but essentially the comptroller and auditor general and the National Audit Office decide, somewhat like the Fair Trade Commission will, to investigate certain matters and they draw up reports. The great difference between that and what we are proposing here is that it is an agreed report with the Department concerned. Before the Minister rushes to say, "here comes another whitewash", that is not what happens. Extreme pressure is put on the Department concerned to acknowledge that they have made mistakes and to suggest ways of overcoming them. It seems that it might be a useful vehicle for us here, where the commission draws up a report on some aspect, let us say, the solicitors legislation, and in doing so get the agreement of the Department concerned for the final report. Therefore there can be no objection to the implementation of that final report by the Minister for Industry and Commerce. The report would not have to wait in the long line of legislation in other Departments. I submit that point for the Minister's consideration because if he is serious about wanting to have the final say regarding consumer protection legislation, he should be doing all in his power to ensure that the reports are implemented. It is a method which might allow that to be the case.
I am serious all right.
Let us see the evidence.
The proposed amendment would give wide ranging powers to the Minister for Industry and Commerce. I am glad Deputy Bruton acknowledges that that is a very busy Department. I would like to see more action coming from other Departments on some of the other reports that have been made but it is not all one sided. I have noticed an incident recently where the Minister for the Environment included most of the commission's recommendations in the building societies regulations. Some Departments may be worse than others in that regard.
The Deputy's proposed amendment is very far-reaching and it is considered much too far-reaching in the present context. Indeed, besides any administrative or practical questions which may arise, the amendment raises the question of whether such a provision would be in accordance with the Constitution and we have sought advice on this.
Article 15.2.1 of the Constitution provides that "the sole and exclusive power of making laws for the State is hereby vested in the Oireachtas: no other legislative authority has power to make laws for the State". The question must, therefore, arise as to whether a power of the Minister to amend primary legislation by order is an usurpation of the power of the legislature. There have been a number of court cases on this subject where the constitutionality of such legislative powers has been questioned. In general, it has been held that the delegation of statutory powers is permissible only with certain fairly narrow criteria. In particular, the Supreme Court, in the case of Cityview Press v. An Comhairle Oiliúna (AnCO), in 1979, stated:
the exclusive authority of the National Parliament in the field of law making should not be eroded by a delegation of power neither contemplated nor permitted by the Constitution.
The court then formulated the general test it would apply to subordinate rule making activities:
The test, in the view of this Court, is whether what is challenged as an unauthorised delegation of Parliamentary power is more than a mere giving effect to principles and policies which are contained in the Statute itself. If it be, then it is not authorised, for such would constitute a purported exercise of legislative power by an authority which is not permitted to do so under the Constitution. On the other hand, if it be within the permitted limits — if the law is laid down in the Statute and details only filled in and completed by the designated Minister or subordinate body — there is no unauthorised delegation of legislative power.
The above had been confirmed to me informally by the Attorney General's office. I recognise this would be very useful power for the Minister for Industry and Commerce but nevertheless he is only one Minister in the Cabinet. If a report comes out and the Minister for Industry and Commerce wants certain action taken by a certain Department he takes it to Cabinet and the Cabinet decide. If what the Cabinet decides is against the Constitution, we all know the reality in that situation.
It is recognised that a power to amend primary legislation has been conferred on a Minister of State under a number of statutes. These powers, however, relate to very specific circumstances and are by no means as general in nature as the present proposal would seem to indicate. For example, under the Companies Act, 1963, the Minister for Industry and Commerce is empowered by order to alter or add to the requirements of the Act as to the matters to be stated in a company's accounts. It will be seen that this is a very specific power and relates solely to a matter — the contents of accounts — already decided on by the Legislature.
Section 24 of the Companies (Amendment) Act, 1986 gives the Minister a somewhat broader power by allowing him by order to alter or add to the provisions of the Act in so far as it relates to the balance sheet and profit and loss account of a company and the notes and documents to be attached to such a balance sheet or profit and loss account. Here again, however, the actual format and contents of the accounts, and the notes to the accounts, are set out in the statute itself. Furthermore, in this case, the statute in question implemented the Fourth EEC Company Law Directive and, thus, the Minister's power to amend the 1986 Act would always be subject to compatability with the contents of that directive.
Section 8 (2) of the Postal and Telecommunications Service Act, 1983, provides that the Minister for Communications for the purpose of giving full effect to the assignment of functions under the Act may, by order, adapt any enactment, with the consent of any other Minister responsible for the administration of that enactment. Here again, the Minister's power is carefully restricted to being within the scope of what has already been approved by the Oireachtas.
In the proposal made by Deputy Bruton, however, the only restriction on the Minister's power is that any amendment which he would make should be "necessary to give effect to the recommendations of the Commission". This is much wider than any existing legislative provision and goes far beyond what is being authorised by the Oireachtas in the Bill generally.
There is no doubt that a power such as that proposed by Deputy Bruton would be very useful for a Minister to have. It would certainly help to ensure that recommendations made by the Fair Trade Commission could be implemented without undue delay. There would, however, be practical difficulties. The Minister might, on the basis of recommendations from the commission, consider it desirable that a piece of legislation which is the responsibility of another Minister should be amended. The Minister would, of necessity, be considering this in the context of his own responsibilities, namely, competition policy in particular. It is considered that even a requirement for consultation with another Minister would not be sufficient to ensure that all relevant factors were taken into consideration.
It seems, therefore, that while the facility being proposed by Deputy Bruton may, on first sight, be a very desirable one, it is not right that the Minister should have the power to amend by order legislation in areas which are properly within the peculiar knowledge or competence of another Minister. Thus, the practical advantages of saving time and allowing Ministers to effect recommendations made by the commission would be overridden by the more fundamental considerations of, first of all, constitutionality and, secondly, proper public administration.
I listened closely to the Minister and as far as I can see the heart of his objection is in the Cityview Press v. An Comhairle Oiliúna court case where the judge decided the basic rules governing the making of delegated legislation. I have not recently consulted the said judgment, although I will do so before Report Stage. Having listened to the extract read by the Minister, it does not seem to me what I am proposing is impossible or unconstitutional. I recollect his saying that the delegated legislation must be no more than a mere giving effect to the statute itself. Were those the words the Minister used?
Giving effect to what is contemplated within the statute.
The Minister will be making the order under the Restrictive Practices Act. I have been arguing that what is contemplated in that Act is so wide that it covers almost anything and gives the Minister the necessary constitutional protection. I would contend that there is not a constitutional problem here. If he were acting, for instance, under another Act which was rather more narrowly drafted, then perhaps it would be inappropriate to use delegated legislation but given that he is acting under the Restrictive Practices Act and the very wide principles contained in that legislation, there is no doubt whatever that he would have the power and that nothing he would do in implementation of this amendment would be contrary to the Constitution, at least as interpreted in the Cityview Press v. An Comhairle Oiliúna case.
The objections the Minister is making are not really related to the Constitution. They are more related to the good order of Government business. I should like to push this a bit further because it is worth the time. I wonder if my amendment were to be altered to include words to amend this legislation, whether it be the responsibility of the Minister or of any other Minister, "after consultation with the Minister concerned and with the approval of the Government" if it is necessary to give effect to the recommendation of the Commission. It is obviously important that the Government must consider the matter if the Minister is doing something of that kind. In practice the Government do but it should be explicit in the Act. If the Minister is introducing legislation, or if another Minister is introducing legislation, that has to go to Cabinet under Cabinet procedure instructions.
There is an accepted practice — I am speaking from memory — that the making of an order does not have to go to Cabinet. It is important to remember that any orders made under this Bill must be confirmed by an Act. There is not the same objection in that case because it is not a normal order. It is an order that must be confirmed by an Act and it cannot take effect until the Act confirms it. In effect, the Minister is amending the statute with another statute. The only difference is that the House does not have the possibility to introduce amendments which it does in respect of ordinary legislation. All the stages that go on here in regard to any statute must be gone through in respect of an order under this Act. The only difference is that it is an Act confirming an order rather than the Act doing it. I hope the Minister may be able to consider this between now and Report Stage because it would be an immense advance in competition law and would remove some of the necessity for the much more radical change in the introduction of the prohibition principle for which I have argued earlier if we could get speedier action on this new area.
I suggest that the Minister should look at whether: (a) the Cityview Press does not apply in the sense that the criterion in this Act is so wide that it allows you to say it is within it; and (b) we should include within my amendment a reference to the consultation with the other Minister, to which the Minister referred, and "with the approval of the Cabinet" or "the Government", whatever the appropriate terminology is. If that were done perhaps the Minister could accept this and it would bring us a long way. As I have introduced a number of new arguments which I did not advance on Second Stage, I would prefer not to press the matter on Committee Stage but to introduce an amendment on Report Stage. I hope the Minister will be able to accept it at that point or, if not, bring forward his own amendment.
I will have a further look at it but my advice from the Attorney General's office is that it would be unconstitutional. I should like to make a few quick points. It is the Oireachtas that passes the laws, not the Government. There might be a slight difference of interpretation there. I recognise the point the Deputy is making. Between now and Report Stage we will have another look at it in relation to the points raised but I will certainly consider the points raised.
Can I ask the Minister to put to the Attorney General the idea that the criteria contained in the Restrictive Practices Act are so wide that they allow one to get around the Cityview Press v. AnCO case. The only objections then are those concerning the Government's own business that the Government do not want Ministers annulling other people's legislation.
That is not the case.
That can be got over by putting in the necessary safeguards for consultation.
Amendment, by leave, withdrawn.
Section 14 agreed to.
SECTION 15.
Question proposed: "That section 15 stand part of the Bill."
In subsection (3) there is provision for an offence being created. Is the provision for penalties contained in the Principal Act?
It is contained in the 1972 Act.
Question put and agreed to.
Section 16 agreed to.
SECTION 17.
Question proposed: "That section 17 stand part of the Bill."
Do records include — I presume they do — computerised data?
We are taking it to include computerised data.
Has there been any problem there?
There has never been a problem there.
Question put and agreed to.
NEW SECTION.
I move amendment No. 5:
In page 10, before section 18, to insert the following new section:
"18.—Section 18 of the Principal Act is hereby amended by the insertion in subsection (1) of the following after `section 10':
`within fourteen days of its receipt by him'.".
This amendment requires the Minister to act within 14 days of receiving a report. Where the Minister has a report made to him at present he does not have to lay that report before the House within a specified time limit so he can sit on it for as long as he wishes. He may not sit on it as long as he wishes; that would be contrary to the spirit of the law, but there is no time limit. My amendment suggests that the Minister should be required to lay the report before the House within 14 days. He would not necessarily need to have made a decision within 14 days. He would only be required to lay the report before the House to make it public.
I realise that Ministers like to announce their decision at the same time as they are publishing the report in case somebody might dissuade them from their decision. Therefore, it is frequently convenient for Ministers to withhold the publication of a report until they have made up their mind. I am not sure if that is good. It is not undesirable that a report should be in the public domain for a while before the Minister makes up his mind. If time is available for this purpose I do not think there is any great inconvenience for the Minister in laying a report before the House and saying: "I will make up my mind within the next month and act then." That is my recommendation.
I know there are problems with the printing of reports. There is a big queue at the Stationery Office to have Government publications printed. It is possible that a report might be received by the Minister in stencil form which would not be in a printed form that he could publish or lay before the House within 14 days. On the other hand, many documents have been laid before this House in stencil form without any great disaster befalling the country. We do not have to wait to have them printed.
This is fairly normal practice with the Book of Estimates which is the most important document we ever receive. For many years that was laid before us in stencil form initially and a fully printed up version was produced later. There is nothing wrong with a stencilled report being sent within 14 days. We do not have to wait for the printers to produce a beautifully bound copy. I think this amendment is reasonable. If the Minister cannot accept a time limit of 14 days perhaps he would accept some time limit to provide against the possibility that some less industrious successor might sit on a report for more than two or three months. There is a case for putting in a time limit to act as a long stop against something being buried. I suggest that the Minister might accept not this amendment but a time limit with which he could agree.
Progress reported; Committee to sit again.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.