I welcome the Bill which repeals the Cement Acts of 1933 to 1962. There are many theories on why this legislation is being introduced at this time. However, what is important is that the Acts are being repealed. This will have an important impact on our building trade. It is interesting to look at the provisions of the first Act in 1933. The then Minister's private secretary sent a letter to Irish Cement Limited in 1936 informing it that it had been granted a licence and outlining its establishment and how it was to operate. It was set out that a licence would be awarded to only one company which could operate in two plants. Cement imports were banned to allow this company to expand. From the enactment of the 1933 Act it was almost another 30 years before there was a repeal of the ban in 1962. In that intervening 30 year period, Irish Cement Limited operated a monopoly on the supply of cement and controlled almost the entire market.
The letter from the Minister stated the company could expand if necessary although it was not to make enormous profits on the backs of the people. There were no criteria for these excessive profits or to establish if the price of the product was too high. No such measures were included in the legislation, regulations or subsequent correspondence with the Minister. This company was allowed establish in good faith and on trust. The company grew slowly at first but then gained momentum. It is now a huge private monopoly, known as CRH. Even at this stage, almost 70 years later, Irish Cement produces 80% of the cement used in this country, with a further 15%, approximately, coming from the Quinn Group in Fermanagh while about 5% is imported. This is a remarkable achievement for a company with humble beginnings. This demonstrates how the State gave this company the capacity to become a huge private monopoly in cement, sand and gravel, aggregates, blacktops, etc. It dominated the market until a small amount of competition emerged.
I recall, when I was relatively young, trying to build a house in the late 1960s. I remember the cement strikes in the 1970s when cement was unavailable. This arose because there was only one licence to provide cement. It was a mistake to grant a licence in such a manner. Deputy Joe Higgins asked an interesting question. At a time when the ESB, CIE and Bord na Móna were established under State control, why did the cement industry not become a State company? It would be an interesting subject for a thesis, to review the literature and debates of the time to discover why a State cement company was not established. How did the cement industry operate in other countries? I do not think the same monopoly applied. One can say Ireland is a relatively small country. However, it was a strange decision to take and it gave control of a vital industry to a small number of people.
It is interesting that Irish Cement received the licence in 1936 and the Constitution was passed in 1937. Article 45.2.ii states: "That the ownership and control of the material resources of the community may be so distributed amongst private individuals and the various classes as best to subserve the common good". Did anyone imagine we would look back at how the cement industry monopoly corresponds with our Constitution? Article 45.2.iii states: "That, especially, the operation of free competition shall not be allowed so to develop as to result in the concentration of commodities in a few individuals to the common detriment". This seems to contradict what was established a short time earlier. Why did no one point out that we were not operating within the boundaries of our Constitution and the position should be reviewed?
We must examine the operation of CRH, its monopoly and its controversial dealings. The purchase of Glen Ding from the State is an example. Many questions arose about how CRH was able to purchase it for £1 million when others were interested in it. It was handed over to one huge company for a small sum without going through a process of competition.
This company was very powerful. The members of its board were involved in every other sector of commerce. There were members who were also on the boards of the two major banks and directors of other companies; they had their fingers in many pies. This enhanced the situation for them and gave them a greater say in what was happening.
The Ansbacher bank was operating from within CRH's own company headquarters and it seems that many of the directors of the company were using the Ansbacher accounts illegally. It is no surprise that the published figures for CRH do not indicate the remuneration of the directors. There is a global figure for what they are paid but there is no detail of what each individual is paid. It is time that huge bodies, such as CRH, should be required to set out in detail what they pay their directors. In the Seanad debate, the Tánaiste said that she wanted to move down that road. I hope she will.
We must also look at how CRH spread its operations throughout the State. Many small fam ily businesses were gobbled up by the monopoly that grew around it, with many of the smaller quarries becoming part of this enormous group. That CRH had taken them over was, in many cases, concealed. That is a disgrace. The company was allowed to control the market, keeping prices for cement and various aggregates artificially high, and thus improved its profit potential. As Deputy Killeen pointed out, in 1997, even though only 11% of that company's trade took place in Ireland, 25% of its profits emanated from here. That fact raises questions.
The Competition Authority has not been able to investigate what went on because it did not have the resources. Why did the competition regulator resign? Was it because he did not have the resources to investigate CRH? I hope the answers to these questions will emerge in time.
The questions relating to cement, aggregates and quarries are contentious. There is much discussion about opening new quarries and granting planning permission. It should be noted, however, that there is a new generation of people coming into that industry. I recently visited a cement works and quarry in my own area. Having been a regular visitor there years ago, I was amazed to find the measures which had been taken at this plant to ensure environmental protection. A remarkable job had been done to make it aesthetically pleasing – difficult to do in a cement works. The way in which dust was controlled was extraordinary. There were plants around the quarry and pleasant lakes had been created. A new generation which cares for the environment is now producing these resources. The company involved is run by Shay Murtagh and his family in Raharney, County Westmeath. In the teeth of huge competition from the CRHs of this world, they managed to develop their own plant in the ready mix and aggregate business. They did that by sheer hard work and determination and now they are reaping the rewards. Fair play to them. Many other companies are developing along similar lines and the fact that these people are supplying the materials while looking after the environment and producing materials at reasonable prices will enhance the countryside.
That is not always the case and not all companies have a clean bill of health. Speakers have referred to the application made by Lagan Cement to open a cement works two miles from Kinnegad on the County Meath border. The company applied for planning permission to open a cement works. There was understandable concern on the part of some of the local people and a local action group was established. Its members were worried about pollution, particularly of the water supply, because many of them used their own wells and, if the plant drilled deeply into the ground, there was a strong possibility that they could lose their water supply. Planning permission, with stringent conditions, was granted by Meath County Council and Westmeath County Council. Those decisions were appealed to An Bord Pleanála and it recently granted permission for this plant to go ahead. Lagan Cement must secure an EPA licence and I hope that when the plant opens, it will be run in an environmentally sensitive manner while providing much needed employment. This is an area with many jobs for women in the catering industry, but very few jobs for men. The 200 jobs this plant will create will be a tremendous boost to the area. I hope the concerns of the action group will be met.
There was a major blot on the copybook, however. The objecting group was suddenly in a position to take extravagant court cases and to fight Lagan Cement tooth and nail. The case made it to the High Court. It subsequently emerged that a rival company, the Quinn Group, had provided at least £30,000 to this group, funding its campaign and feeding it with money through hidden accounts to keep Lagan Cement out of that area. That is disgraceful. Through the repeal of the Cement Act, the Minister should be able to build in a proviso that in such situations, companies like the Quinn Group could not have behaved in this manner.
The Quinn Group attempted by way of a High Court injunction to prevent An Bord Pleanála making a decision about the cement factory. Mr. Justice Quirke found that the Quinn Group had engaged in doubtful practices and conduct in relation to an open and lawful application by Lagan Cement for planning permission. A rival company operated that way to keep it out of the market. It is disgraceful that a rival company should behave like that. The judge also said that the Quinn Group made covert payments by way of surreptitious financial contributions to the group to fund its campaign. He noted that some of those payments had been made in assumed names. It is outrageous that a company should behave in that way and be allowed get away with it.
That company's behaviour delayed the setting up of a company in Kinnegad and its employment of 200 people and it prevented those people getting a weekly wage for a considerable number of months. It prevented that company coming into direct competition with the Quinn Group for the supply of cement. That was the only reason it was in that market and in the business of supplying money, which is outrageous.
I thank the Acting Chairman for the opportunity to speak on this debate. I welcome the repeal of the Cement Acts. The Minister of State in his capacity in the Department of Enterprise, Trade and Employment should examine what we can do to prevent those types of spurious objections that are blatantly made on the basis of competition.