Vol. 467 No. 7
1 Mr. S. Brennan asked the Minister for Transport, Energy and Communications if he will make a statement on the crisis at Bord na Móna; the reason his 1995 consultancy study of controls in State companies did not report any problem at Bord na Móna; and whether he has received a response from the chief executives of other State companies arising from his inquiries. [14478/96]
3 Mr. Molloy asked the Minister for Transport, Energy and Communications the steps, if any, he has taken to establish whether chairmen and chief executives of State companies, operating under the aegis of his Department, are complying with Government guidelines in regard to pay, conditions and other terms of their appointments; whether he has satisfied himself in all cases with the explanations given; and if he will make a statement on the matter. [14483/96]
5 Mr. N. Treacy asked the Minister for Transport, Energy and Communications the date on which the Government appointed the current Chairman of Bord na Móna; the instructions given to the Chairman on his appointment; and if he will make a statement on the matter. [14482/96]
9 Mr. Clohessy asked the Minister for Transport, Energy and Communications if he will report on the discussions, if any, he has had with the Chairman of Bord na Móna. [14157/96]
32 Mr. Clohessy asked the Minister for Transport, Energy and Communications whether he intends to carry out an inquiry into the leaking of confidential information pertaining to the business of Bord na Móna; and if he will make a statement on the matter. [14158/96]
405 Mr. S. Brennan asked the Minister for Transport, Energy and Communications the plans, if any, he has to intervene in the ongoing crisis at the board of Bord na Móna; the reason it was necessary for him to give an indemnity to the directors of Bord na Móna; and if he will make a statement on the matter. [14484/96]
420 Mr. Molloy asked the Minister for Transport, Energy and Communications if he will report on the ongoing investigation into possible breaches of the pay and remuneration guidelines in the semi-State sector; and if he will make a statement on the matter. [14229/96]
426 Mr. J. Walsh asked the Minister for Transport, Energy and Communications if his attention has been drawn to a recent breach of confidentiality at Bord na Móna, which is under the aegis of his Department; and the consequent action, if any, he proposes to take in this regard. [14259/96]
I propose to take Questions Nos. 1, 3, 5, 9, 32, 405, 420 and 426 together.
I have not been involved in the situation affecting the managing director of Bord na Móna. I have consciously avoided involvement lest such involvement might be seen as political interference and prejudgment of the outcome to this affair.
The issues surrounding this matter fall to be considered by the board of Bord na Móna. The board has had to proceed in a considered manner and has afforded the managing director every opportunity and the necessary time to respond to all the questions which have arisen in relation to his position.
I share the regret of Deputies that the matter has proved to be prolonged. This is having an effect on the morale of the workforce of Bord na Móna; a workforce whose sacrifices more than anything else have laid the basis for the turnaround in Bord na Móna's fortunes and performance.
The chairman of Bord na Móna, Mr. Pat Dineen, was appointed by the Government in September of last year. He was given a general mandate and asked to concentrate all the energies of the board and management on confronting the risks and challenges facing the company.
Today I received a copy of the following resolution adopted last night by the board.
Having considered the statement of the Managing Director to the Board at the Board meeting on 1st July, in response to the Board's request for explanations relating to the issues which were brought to the Board's attention by Price-Waterhouse Reports, the Board has decided to advise the Minister for Transport, Energy and Communications, that on the basis of the evidence available to the Board, the Board is of the opinion that Government guidelines relating to the Managing Director's remuneration would appear to have been breached during the period of its review of the Managing Director's remuneration arrangements since his appointment in 1987 to 1995.
The board has further decided to advise the Minister that these remuneration arrangements which were originally entered into between the former chairman and the managing director were not disclosed to the board or its remuneration committee.
The issues arising concern more than simple breach of pay guidelines. There are also matters of corporate governance and standards of integrity and behaviour which would be addressed by any board of any company. I, therefore, consider the communication I received this morning from the board to be unsatisfactory in that I would have expected the board to have advised me of its findings in relation to the following question among others. Did the board have the power to deviate from the Government's pay guidelines? Did it have power to delegate its functions in relation to pay to the chairman and for him to carry them out in a confidential manner? Why was there not a formal budget line in Bord na Móna for public affairs? Why was cash handed to the managing director to cover unvouched expenses? What are the fiduciary duties of the managing director and chairman to the board? I have now asked the chairman to address these questions urgently. I will advise my Government colleagues later this afternoon of the position and the Government will decide what further immediate action is called for.
In relation to Government guidelines on pay of chief executives, the following is the position. In Report No. 35 of the Review Body it was stated that the recommended rates of remuneration were intended to include salary and all other benefits apart from superannuation and expenses approximating to those applying in the Civil Service which they took as the norm. If additional benefits are provided the actual salary paid should be reduced by the value of those benefits below the remuneration rate recommended. These conditions were accepted by the managing director in writing. On 12 November 1993, 7 July 1994 and 6 July 1995 the former chairman affirmed to the then Minister, Deputy Cowen and to me that Government guidelines on the pay of the managing director were being complied with. Clearly this was not so. I am adamant that there has to be the highest standards of corporate governance and behaviour in all State companies under my aegis.
The issue of indemnification arose following receipt by members of the board of a letter from the managing director drawing attention to their potential personal liability. The Attorney General advised that there was no objection to the board indemnifying its members against a court action where they carried out their lawful duties as board members. The board members were so advised. Contrary to the impression given in the media, I did not, as Minister, provide any indemnification to the members of the board.
The 1995 report into State bodies under my aegis dealt mainly with public procurement and asset disposal and its terms of reference did not cover the remuneration of chief executives as this was not deemed necessary as the chairpersons reported annually to the Minister on this matter.
The leaking of information to the media in relation to this case has been the subject of much comment. I cannot condone such leaks. However, I do not believe that an inquiry would serve any useful purpose and would most likely prove a futile exercise. I confirm that one copy of the draft Price-Waterhouse report was received by the Secretary of my Department, it was not copied and at all stages was kept confidential. The same is true of the final Price-Waterhouse report. Indeed at no stage have I had possession, or even sight of, the draft report, the final report or any appended information. Of course, I have been kept informed of developments by the secretary and as appropriate by the chairman of Bord na Móna.
I recently received written confirmation from the chairpersons of eight of the State companies under the aegis of my Department that the basic salary of their chief executives is in conformity with the levels stipulated in the review body's most recent report.
In the case of two of the State companies under my aegis, the chief executives are on personal rates, negotiated as part of their service contracts agreed by the Government, which are above the rates set out by the review body. These rates are confidential. It should be noted, however, that in the event of either chief executive leaving his post, his successor would be paid the rate set by the review body for the post, unless specifically authorised otherwise by Government.
The level of expenses and other non-pay elements of chief executives' employment contracts have been examined by officials in my Department. A summary of their review has been forwarded to the Department of Finance and will form part of a report currently being prepared for Government on this matter.
This review did not include Bord na Móna, which is being dealt with as a separate issue and has been covered elsewhere.
It appears, not for the first time, that the Minister has declared war on the board of a State company. He plans to take on the board of Bord na Móna and tell it why it did not do its job properly by giving it a list of reasons. This declaration of war on Bord na Móna is interesting. Why did the Minister allow the matter to drag on for ten weeks? He could have posed these questions nine or ten weeks ago and got the answers he required. Why did he allow the directors to behave in this manner for so long, causing damage to the company and its employees? Also, will he clarify whether the former chairman, Mr. Halligan, was authorised by the board to agree the remuneration package of Dr. O'Connor? Does the Minister consider that the wording and spirit of the resolution passed early this morning contain any censure of the managing director, Dr. O'Connor, or does he consider it a neutral decision?
Let us not forget the time factor for dealing with priority questions.
Neither I nor any member of the Government have declared war on a semi-State body, including Bord na Móna. I am concerned at the damage being caused to the company while the dispute rages. The chairman and members of the board have been cautious and prudent in their approach to the matter. They have given the chief executive of the company every opportunity to answer the questions raised in the Price-Waterhouse report. I am satisfied that the issues raised in the report were dealt with in a fair, impartial and objective fashion by the chairman and members of the board. I accept there were delays, but they were not entirely the fault of the members of the board. The Deputy will recall that the chief executive was not in a position to give answers or to co-operate with the board on a number of occasions. Having taken advice he proceeded to answer a number of questions that had been put to him.
I understand that when the former chairman of the board met the board on 19 June 1996 he made a detailed statement about his involvement in the approval of the remuneration package. As I stated previously, this report was given in confidence to the board. I am not aware of the full detail of what he said, but it is my understanding he stated at that time that he had made a verbal agreement with the chief executive in respect of a package. I also understand that there is nothing signed in writing on the minutes or otherwise of the board's record in this regard.
I met the chairman of Bord na Móna at lunchtime and he advised me of the happenings at the board meeting last night.
Which he did not attend.
I will communicate his report to my Cabinet colleagues later this evening at a Cabinet meeting and we will then make the necessary decisions. We are attempting to establish the facts and address the issues raised in a satisfactory manner so that Bord na Móna can get back to doing what it should be doing, addressing its business without the distraction of an internal debate about the remuneration package of the chief executive of the company.
I take it the Minister will agree that specific requirements are laid down in the terms of appointment and guidelines issued to chief executives and chairmen of State companies. The board has reported to the Minister that these have been breached, but he outlined a number of questions he is putting to the board. Has the chairman of Bord na Móna a duty to report to the Minister and not the Secretary of the Department? On what date did the Department receive the Price-Waterhouse report? Why did the Minister state it was given to the Secretary and that he did not see it? Does he agree the questions he posed today were answered in the Price-Waterhouse report?
As the board does not have a hire and fire role in relation to the managing director of Bord na Móna, who has responsibility to deal with any major breach of the terms of contract under which that person holds office? Does the Minister have to take action, if such is required, because the board did not make the appointment, it was made by the Government?
The Secretary of the Department is the Accounting Officer who usually deals with any financial or other matters relating to pay and remuneration and for that reason the report was forwarded to him. The board is responsible for the managing director of the company who reports to the membership of the board. In the first instance, responsibility rests with the membership of Bord na Móna.
How?
In all respects.
The board cannot fire anyone.
No. In the event of a board making a decision regarding the future of the managing director, that is then reported to the Minister and the final decision rests with the Government because, as the Deputy correctly states, the chief executive of the company is appointed by the Government of the day.
I seek your guidance, a Cheann Comhairle, as I am in a dilemma in that the question I asked, Question No. 5, has not been answered by the Minister. I wish to ask a number of supplementaries based on that question in regard to the date of appointment and the instructions.
In respect of the appointment of the chief executive, the conditions of appointment of Dr. O'Connor——
The appointment of the chairman.
I am talking about the chairman. I asked the date the Government appointed the chairman and the instructions given to him on his appointment.
I am just about to give the Deputy a response if he will allow me do so.
Let us hear the Minister's reply.
The conditions of appointment of Dr. O'Connor specified his remuneration as managing director and his fee as a member of the board. The conditions also stated that the allowance for expenses to be paid to him as a member of the board should be the amount of the actual travelling expenses reasonably and necessarily incurred by him and subsistence allowances as are usually given to a civil servant of the highest grade.
That is not the question I asked.
I am coming to the Deputy's point.
Let us hear the Minister out without any further interruptions, please.
The Minister should answer the question.
The conditions further specified that no other remuneration was to be payable in respect of any other services rendered by him for or on behalf of the board in his capacity as a board member, save with concurrence and the concurrence of the Minister for Finance. Dr. O'Connor confirmed acceptance of his appointment on these conditions on 22 July 1992.
That was not an answer to the question.
I am totally baffled. There is not much point in asking questions of this Minister if he constantly tries to evade them. I wanted to know the date of appointment of the chairman, not the chief executive — that date is pertinent — and the instructions given to him.
I beg the Deputy's pardon. The chairman of the company was appointed in September of last year, as I have already outlined.
What date in September?
I do not have the precise date but I will forward it to the Deputy.
That is important.
His terms and conditions of appointment, and the mandate he received, were, as I stated, to concentrate all the board's and management's energies on confronting the risks and challenges facing the company.
Did the Minister both personally and politically sponsor the appointment of Mr. Dineen as chairman of Bord na Móna? Is the Minister aware that on the date of his appointment at a private dinner in Dublin, the Tánaiste, Deputy Spring, announced to an international gathering which was seeking his support for the second mobile phone licence that he had secured the appointment of Mr. Dineen on that day as chairman of Bord na Móna? In his responding remarks at that dinner, Mr. Dineen stated that he would deal with the chief executive. I want to know what instructions he was given. Did the Minister or the Tánaiste sponsor him? It is well know that while Dr. O'Connor would have supporters in Cabinet — the Minister would not be numbered among them — Mr. Dineen has a number of supporters there too. We want to know the exact situation. Whose agenda is being played out? What instructions were being given and why is this situation being created by the Government? Is it to achieve the removal of the chief executive, to destroy the board or to destroy the company? The Minister should clarify the matter for the House as it is important.
Let us deal with the facts.
Deputy Treacy's comments are so outrageous and outlandish that they do not merit a response.
They are de facto.
They are too close to the bone.
The appointment of Mr. Pat Dineen as chairman was in accordance with normal procedures. As Minister I sponsored his name to Cabinet and received Government approval for his appointment. The chief executive of the company was informed of the appointment of Mr. Dineen in the normal course of events. I can state categorically that there was no hidden agenda. Mr. Dineen, who has an exceptionally good track record in business, was appointed as chairman of the board with one specific task, to ensure that the company would continue to develop, expand, become financially sound and to report back to Government — as all chairman do — on the progress being made.
The Minister did not respond to my question as to whether he saw any censure in the resolution last night from the board of Bord na Móna. Did the Minister interpret any censure in the resolution he read to the House or did he regard it as neutral reporting of its current opinion? Why has it taken ten weeks to check the matter of £66,000 unvouched expenses? Why could the Minister, his Department or the Department of Finance not have checked that out sometime during those ten weeks? We are no wiser today.
From what the Minister said today it is not clear whether that situation is correct. Ten weeks down the road we are no wiser as to whether there was cause for concern. What was the Minister's interpretation of the motion of censure? That is the kernel of the matter, yet the Minister is not guiding us in any way on that central point. In fact, the Minister seems to be dodging the issue completely.
The Deputy spent three years mulling over it with the result that the company was almost bankrupt.
The Minister of State should confine his comments to the islands.
Where do we go from here? Given that the Minister has not provided information about the expenses or the delay, and nothing about whether this is a motion of censure, what happens when he receives the new report from the board embroiling the Cabinet and the supporters in Cabinet of the different players? Are we heading for yet another fully fledged row around the Cabinet table about the future of Bord na Móna? The Minister seems to be preparing for another pre-emptive strike and to get rid of another board.
Another own goal.
The motion speaks for itself. I will not attempt to lead a Deputy who is not anxious to be led. The Deputy can take his own interpretation from the motion.
That is not good enough.
After ten weeks of deliberation I would have expected that the board would be more precise and decisive in its response to the analysis of that period.
The Minister should have met the board ten weeks ago and told its members that.
The board has been conscious at all times that due procedure had to be followed. At all times both the chairman and the members of the board were extremely anxious to ensure that every opportunity was afforded to the chief executive to answer the questions raised, and that this would be dealt with in a fair and impartial fashion.
It will take ten more weeks. The Minister should have put a stop to this ten weeks ago.
Had I interfered, the Deputy would be the first on the airwaves to accuse me of interference.
Sour grapes; always roaring and shouting.
Does the Minister agree with the terms of the board's motion forwarded to him this morning which states that the managing director of Bord na Móna has been in breach of the terms of his appointment? Based on the evidence in the Price Waterhouse reports, does the Minister agree there was a breach and, if so, what is the next step?
I have the motion from the board and I met the chairman. At 5 p.m. this evening I will report to my Cabinet colleagues and in due course the Members will be informed of the latest facts.
The Minister has sought to put some blame on the board, as if he were playing a game of ping pong. Surely the board has completed its duties. It has had comprehensive professional reports carried out and presented them to the Minister who is the appointing officer on behalf of the Government. The Minister should exercise his responsibilities in regard to the steps to be taken. From what we heard from him today, he seems to be reluctant to make a decision and is passing the matter back to the board, which does not have that role because it did not make the appointment.
At this evening's Cabinet meeting all views will be taken into account, including the verbal discussion I had today with the chairman of the company and particularly the content of the motion passed by the board last night, and a decision will be made on the matter.
What is the Minister's opinion? He has had the report for weeks and he has a duty to the House in the matter.
The Minister should be allowed to reply without interruption.
I will convey my views this evening to my Cabinet colleagues.
How can the Minister be satisfied with a briefing from a chairman who is compromised and had to absent himself from last night's meeting? Is the onus not on the Minister to tell the House the consequences of the motion he received? Is he not obliged in the interests of natural justice to ensure he gets a full, accurate report of the entire position from all board members, excluding the chairman?
The chairman of the company, who acted in a very competent, efficient, reasonable and impartial manner, absented himself last night to ensure he is in a position to adjudicate in a fair and balanced way.
Now that the Minister has posed new questions, the matter will go on for another nine or ten weeks. Could he not have dealt with this matter nine or ten weeks ago, without involving the Cabinet, by simply making a decision on it? Even at this late stage, instead of starting another merry-go-round of headlines as a result of indecision on his part, the Minister should make a decision on last night's resolution.
What would the Deputy's decision be?
What is the Minister's view of last night's resolution?
Many of the questions posed have already been put. After weeks of prolonged debate internally at Bord na Móna I have a resolution and I have been briefed on it by the chairman.
What does the Minister think of it?
I will communicate my views in due course to my Cabinet colleagues and Members will be aware of the results of those deliberations.
More Cabinet meetings and more board meetings.
If I heard the Minister correctly, he said he has some questions for the board. Is that correct? He is asking the board to reply to questions——
A brief succinct question, please.
I find it difficult to understand the Minister's intentions. If he is raising questions with the board when does he expect answers? How can he bring the matter before the Government this evening if he does not have the answers to the questions he posed? When will a decision be made? It is not fair to the people involved that the matter is dragged on unnecessarily.
Questions are being put in omnibus form.
It is time for the Government to make a decision on the matter because people's careers and reputations are at stake. The Minister has a duty to act on behalf of the taxpayers. This is Parliament where we should get answers, but we are not getting them.
How long was the Deputy in Government?
The chairman has done an outstanding job and should be complimented on fulfilling his duties.
Deputy Molloy should allow Question Time to proceed in an orderly fashion.
I said I had expected that the board, in its communication to me, would give a clear and specific response to the questions raised. I am quite satisfied I have sufficient information to address some of the questions I posed.
The time available for dealing with priority questions is exhausted. I can, however, take the reply to No. 4 in the name of Deputy Batt O'Keeffe in ordinary time. I further advise the House that it is intended to reply to Priority Question No. 2 with Question No. 10 and when dealing with No. 10 we can take No. 2 also.
