asked the Minister for Energy if the failure of Tara Mines Limited to pay any royalties to the State has been referred to an arbitrator; if so, if he has yet delivered his report; if, in view of the fact that Tara Mines has now been in operation for ten years and has paid neither tax nor royalties, he intends to seek a revision of the lease under which they operate; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Tara Mines.
16.
Agreement has been reached on the selection of the arbitrator who is to adjudicate on the questions at issue in relation to computation of the company's profits for royalty purposes. The matter has not yet been referred to the arbitrator, however, because certain preparatory aspects require attention, including finalisation of consultations with legal advisers.
As regards the question of revision of the lease as raised by the Deputy, the position is that the lease is an agreement binding on both parties and its provisions must be complied with. The lease provides that matters in dispute must be settled by artibration.
Taxation matters are outside the scope of the lease.
I am sure the Minister would agree that it is outrageous that for ten years very little tax and no royalties have been paid by this company. Let me correct something which I said earlier in regard to the export of ores. The figure I gave was the value of ore exported but the figure I should have given for the export of zinc was 3.5 million tonnes which is an average of 350,000 tonnes per year and a total value in ten years of £626 million. I am sure the Minister will agree it is outrageous that this State while not alone losing its ore is not getting any royalties from the company. The Minister has said in his reply that an arbitrator has now been agreed on. Does this mean that the arbitrator will decide on a figure, rather than on the actual figure which should be given? Is he saying that the arbitrator will decide what is to be paid?
Yes.
Surely that is outside the terms of the agreement which was made with this company which stipulated that the company would have to pay so much in royalties. If the arbitrator makes a decision that would surely be outside the terms of the agreement.
Under the provisions of the State mining lease held by Tara Mines Limited royalties are payable to the State on the basis of 4.5 per cent of the profits of the company as calculated by the Revenue Commissioners in accordance with the law relating to corporation profits tax as it existed on 6 April 1974. A number of complex issues arose in the computation of Tara's profits for royalty purposes, such as the question of the carrying forward of trading losses from year to year, allowability of deductions against profits realised, unrealised, exchange losses, treatment of capital allowances, treatment of interest on Tara's bank loans, and the question on the acceptability of Tara's accounts for some years in dollars rather than in punts. The position of the Revenue Commissioners on all of these matters has been disputed by Tara. Because of the dispute we have now called for arbitration as stipulated under the particular case. An arbitrator has at last been agreed and it is now a question of going through the legal procedures. I agree with the Deputy that this situation is not acceptable and the sooner it is brought to an end the better.
You are the Minister. If there is a problem this is the place to bring in the appropriate legislation to sort it out. Surely that should have been done by now. This House can legislate so as to ensure we get the money we are entitled to. If there is a legislative problem, can we not have it sorted out here?
As I have already indicated to the Deputy, since coming into Government I have taken action on this matter and have brought it to the stage which it is now at. The Deputy can be assured that I will continue to press this matter.
Can the Minister tell us whether, if he is not satisfied with the arbitrator, he will introduce the appropriate legislation?
As I have said, the arbitrator is there and the question of legislation does not arise. The arbitrator is part of the procedures and we want to operate the procedures.