Dáil Éireann díospóireacht -
Thursday, 8 Oct 1998

Vol. 494 No. 6

Written Answers. - Beef Industry Irregularities.

Desmond J. O'Malley

Ceist:

80 Mr. O'Malley asked the Minister for Agriculture and Food the steps, if any, he proposes to take to recover the amounts lost through irregularities, including the larceny of beef, from those processors who benefited by these irregularities in respect of which Ireland was fined for the failure by his Department to administer the regulations in view of the dismissal by the European Court of Justice in Luxembourg of his appeal against the fines of £70 million imposed on Ireland for breaches by his Department of the relevant regulations relating to intervention beef and multi-layered tendering; and the plans, if any, he has to allow these beef processors to retain the sums they improperly and irregularly obtained. [19009/98]

Minister for Agriculture and Food (Mr. Walsh)

On 4 April 1995, shortly after the notification of the proposed disallowances by the European Commission in respect of beef storage and multiple tendering, the Government established a group to examine the question of recoverability of the proposed disallowances. The terms of reference required the group to examine all options of recoverability of disallowances with a view to having proposals ready for implementation when the final decision would be made by the Commission. The group consisted of senior officials from the Departments of Agriculture and Food and Finance and the Office of Attorney General. A senior counsel served as independent legal adviser to the group. The then Attorney General, had ruled himself out of having any involvement with the group or with its findings, given that he had represented the Goodman Group at the Beef Tribunal.

Following the formal disallowance decision in March 1996, the group reported to the Ministers for Finance and Agriculture and Food. The legal advice obtained by the group, and endorsed by it, was that the disallowances levied on Ireland did not of themselves give an entitlement to the Minister for Agriculture and Food to recover any part of the disallowances from companies which may have featured in the case made against Ireland by the European Commission.

The group examined the options of imposing a general levy on the beef industry or a levy on those companies against which there was evidence of wrong doing during the period — 1990-92 — in respect of which the disallowances were made. It concluded that neither option would be legally sustainable. This conclusion drew on a European Court judgment on an Italian case —— Frutticoltori — case C — 197/91 judgment 25/3/93 — which had rejected a proposal from the Italian Government to impose a levy on the fruit and vegetable industry following a disallowance imposed on Italy. The other major option considered was for specific recoveries based on proven irregularities. In this respect, the group concluded that any proceedings must be based on a recognised cause of action in Irish law and be proven in accordance with the applicable rules of evidence in civil proceedings.

Arising from that principle, the group noted that proceedings had issued against AIBP for the recovery of damages in respect of irregularities found at AIBP Rathkeale. Further proceedings were then in preparation for issue against AIBP in respect of irregularities at Shannon Meats. Both proceedings have yet to come to a court hearing. Some £1.8 million is being sought in recoveries in respect of these cases. Allegations had been presented to the Beef Tribunal about the non-declaration of de-boning yields which, under the Regulations, are the property of the Intervention Agency. This matter has been the subject of a recent Government discussion arising out of which it was decided to serve summonses on AIBP. These summonses were served on Tuesday afternoon. As these proceedings are pending, I would not like to say anything which might prejudice their outcome.