Vol. 898 No. 2
1. Deputy Dara Calleary asked the Minister for Jobs, Enterprise and Innovation the actions he is taking to increase Irish competitiveness levels given the increased competition from the United Kingdom as a location to establish a business compared to Ireland; and if he will make a statement on the matter. [41849/15]
Will the Minister for Jobs, Enterprise and Employment discuss the actions he is taking to increase our competitiveness in light of the competition coming from the UK, particularly in respect of non-taxation matters but also in the context of the decision to reduce corporation tax in Northern Ireland to our level?
Some of the taxation matters could probably be directed to the Minister for Finance but I will endeavour to answer the question as best as I can. Ireland suffered a sustained decline in competitiveness from about 2002 which contributed in major part to the depth of the economic crash and job loss. Reversing these trends has been a central challenge in our Action Plan for Jobs. That plan has addressed the full range of policy areas. Sustained improvement has been achieved in all key areas: the support for start-ups; the ease of doing business; the tax environment; access to finance for start-ups and small business; access to new markets; and critical skills. We have improved our ranking but there is no reason for complacency and we actively watch what other countries are doing, including our nearest neighbour in the UK.
In respect of start-ups, last year, I launched Ireland first ever national strategy for entrepreneurship, which we are more implementing through the Action Plan for Jobs
process. Specifically, we have reformed how we provide supports for enterprise through the establishment of the local enterprise offices providing a first stop shop for entrepreneurs and small businesses in every county in the country. We have launched Ireland's Best Young Entrepreneur, IBYE, competition. Enterprise Ireland has increased supports for high-potential start-ups and launched a number of competitive funding calls, focusing in particular on encouraging female entrepreneurship. We have reformed how we support commercialisation and spin-outs from our third-level institutions with the establishment of Knowledge Transfer Ireland with the central focus on making it easier for entrepreneurs and enterprises to develop new products and services and to create jobs and impact for the investments being made.
We have continued to improve the attractiveness of the tax environment for start-ups and entrepreneurs as part of budget 2016. The start-up refund for entrepreneurs scheme was announced in 2016, the rate of capital gains tax for entrepreneurs was reduced to 20% for the first €1 million of gains and the exemption from corporate tax for the first three years of a business was also extended. We have improved access to finance through a range of initiatives including the establishment of Microfinance Ireland, the introduction of the credit guarantee scheme and, more recently, the launch of a range of funding initiatives by the Strategic Banking Corporation of Ireland.
There are encouraging signs of strong growth in start-ups. Entrants to the IBYE competition are up by 40% this year. The number of self-employed people with employees has increased by 13% in the past four years. The number of companies establishing for the first time has increased by 29% in the past four years. These results, along with the very positive job numbers in general, encourage us in our conviction that we have the right policy mix to support strong jobs growth into the future. The challenges involves continuing to improve that environment and not losing that mix or drifting off course.
Let us try something different here and let us try to get an answer to the question. That is the cut-and-paste answer that is the Minister's standard speech on start-ups. What I want to focus on is the challenge we face from the Six Counties and Great Britain in respect of their competitiveness for start-ups, the package and offering they have put together and their agencies' hunger to get start-ups to locate there. All the factors the Minister mentioned are correct. People are actually starting up companies here but they are making the decision to expand them outside the jurisdiction because of the range of supports that are available. Taxation is a matter for another Minister, but taxation in the context of the corporation tax rate is something the Minister needs to be on top of and very aware of. A very significant step relating to corporation tax on this island, to which our Government has been a signatory, has been taken and will take effect in the next number of years. It will now impact on decisions by people who are making long-term business decisions. What is the Department of Jobs, Enterprise and Innovation doing in respect of this?
If the Deputy wants a different answer, he should ask a different question. He asked if I would discuss the actions the Government is taking to increase Ireland's competitiveness levels so he-----
Given the increased competition from the UK.
The Deputy asked a two-sided question, which I answered. If the Deputy wants to change his questions, he has a right to do so. I welcome the move by Northern Ireland to have a low corporate tax rate. I think it will benefit both parts of the island. We stand to gain from a more competitive offering in Northern Ireland. Of course, we will face competition for mobile projects but that has always been a feature. We have faced competition from the UK, Switzerland, Belgium and Luxembourg all of the time. The record will show that we are doing well in any competitive assessment of how we fare in winning investment.
There is no doubt that the UK has offered a tax environment that is favourable to start-ups. As the Deputy will see, this year, the Minister for Finance received a discussion paper on entrepreneurship and the tax code. In response to that, he has started a process of reform. This year, he reduced capital gains tax for entrepreneurs as well as making other changes such as those for the self-employed.
Is there a group or focus within the Department of Jobs, Enterprise and Innovation on the competitiveness of Great Britain and the Six Counties and their impact on our potential to grow jobs? Has any work been done in the Department on the potential consequences of the change in corporation tax in the Six Counties?
We have a group. The strategic policy group deals with all issues involved in preparing for the Action Plan for Jobs. The National Competitiveness Council assesses all aspects of competitive challenge for Ireland. I do not see a move by Northern Ireland to have a lower corporation tax rate as something that we should be worried or concerned about. I see it as a natural development. A stronger offering in Northern Ireland can benefit both parts of the island. We will continue to compete for projects with Invest Northern Ireland or whatever other programme exists. We continually review our effectiveness and competitiveness. IDA Ireland has been very successful at horizon scanning and positioning ourselves in skills, tax, the business environment and different ways to respond to the challenges as they emerge.
2. Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation if he has read the report "Modelling Irish Unification" by KLC Vancouver, British Columbia, Canada; and if he agrees with the projected potential growth boost to the Irish economy of €35 billion of gross domestic product that could be provided by the realisation of an all-island economy. [41848/15]
It is not like me to complain and the Ceann Comhairle knows that I have been a very co-operative Deputy over the past five years but I just want to draw attention to the method of dealing with Parliamentary Questions to the Minister for Jobs, Enterprise and Innovation. In 2012, as the spokesperson on enterprise in the second largest Opposition party, I was afforded the opportunity to ask 31 questions relating to enterprise. So far this year, I have only been afforded the opportunity to ask seven. Obviously, this has reduced my ability to hold the Minister to account on this issue. Could the Ceann Comhairle take the fact that there has been a fall in the number of questions I have been given the opportunity to ask from 31 in 2012 to seven in total this year into consideration? It has had a significant effect on my ability to hold the Government to account on enterprise.
The Government promised-----
This is a matter that should be discussed between the Whips.
I understand the Whip has already raised it at the Committee on Procedure and Privileges. I wanted to raise the issue here but will leave it at that.
I thank the Deputy.
A significant body of work has been carried out by Professor Hübner. This work has stated that there is an opportunity with regard to economic integration in the North for €35 billion in extra GDP to be created over eight years if the two economies were to integrate properly. My question simply asks if the Minister has read the report and, if so, if he will carry out the actions in the report.
I welcome the publication of this interesting report which gives considerable food for thought by undertaking some economic analysis of issues arising in the event of the unification of Ireland.
It is very difficult to say whether the conclusions of the report in relation to the potential growth boost to the Irish economy would be borne out in practice. I note that the report’s conclusions are based on an economic model and on significant assumptions in that regard. The economies of the Republic and Northern Ireland have developed in very different directions in the past 90 years. There is a significant range of different legal, administrative, regulatory, and financial systems in place and Northern Ireland is an integral part of the much larger United Kingdom economy.
Regardless of the political structures in place on the island, there is an overwhelming economic case to be made for more economic engagement. I emphasise that this Government is fully committed to the Good Friday Agreement, to the principle of consent and to the institutions that were established at that time. The need to address economic business development matters on the whole island was recognised and resulted in the establishment of InterTrade Ireland, the cross-Border trade and development body. At that time there was very limited interaction between business North and South, relatively low levels of trade between both jurisdictions and untapped potential for better engagement. To combat this disadvantage and to seek to drive enhanced levels of business activity, InterTrade Ireland has, in the intervening years, operated a range of programmes and initiatives to develop economic linkages between businesses on both sides of the Border. This work has represented a modest but positive start to the process of developing an “all island” economy, regardless of political structures.
The model measures a number of outcomes and steps that would be taken with regard to harmonisation of tax. We see some of that harmonisation in the adoption of common currency, convergence in productivity across the island and the eradication of parallel government structures. It states that €35 billion would be created if the economy in the South were to integrate with the Northern economy, that is, €1,497 per person in the first year of that integration, and €5,650,000 of extra GDP per person, man, woman and child on the island of Ireland in the eight years. That is a massive amount. It states that the two economies are interlinked and interdependent but it also states that there is a massive economic gap and that hundreds of thousands of people, right through the island and especially along the Border corridor, are falling through that economic gap every year. As Deputy Dara Calleary said, the Minister does not answer questions. The simple question is whether the Minister has read the document.
I have read the document in considerable part and, as I said in the reply, it is based on a number of assumptions. It is up to people to read it and evaluate them. They are assuming an immediate devaluation in Northern Ireland which would mean a reduction in the average value of wages within the Northern Ireland economy. There are issues around that. It assumes the immediate harmonisation of taxes, North and South. It assumes that the Republic of Ireland would take up a considerable part of the deficit within the Northern Irish economy that is currently supported by the UK and a whole lot of other assumptions about the way in which the economies would converge and how this would evolve. As an economic exercise, it is a very valuable contribution to the discussion. It shows the opportunity for significant gains but it does not call for action by me, as the Deputy suggested. It is an evaluation, it is an economic modelling exercise and it is a very valuable contribution.
It is startling that the Minister said it does not call for actions. If €35 billion could be gained following economic integration, then €35 billion is the cost of doing nothing and standing over a policy inaction or inertia with regard to not getting involved. The Minister of State at the Department of Arts, Heritage and the Gaeltacht, Deputy Jimmy Deenihan, appeared on a BBC programme a couple of weeks ago and was asked a very important question about the costing of an all-Ireland economy and, gormlessly, he answered by saying he did not know. The report stated that there is a dearth of research on this issue across the world. That the report was commissioned and carried out in the US says something shocking with regard to this issue. Blissful ignorance is not an opportunity for the Government or the people of Ireland to do nothing. Will the Minister carry out research on best case scenarios and take elements of the report - without full unification which would take political decisions - that could be implemented purely under the Good Friday Agreement and do a cost-benefit analysis of those?
Certainly I am in favour of lower trade barriers. The work of InterTrade Ireland is to do just that, to reduce trade barriers; both North and South, as export economies, favour the reduction of trade barriers in every way possible. Obviously, the more immediate concern of the Government would be with the possibility of the reverse happening, that there would be an increase in trade barriers between North and South should the British people take certain decisions. There are issues here that are worthy of keeping under consideration. What I said was that this report does not call for specific action from me but it is a worthy contribution. The Deputy is right. As I said to Deputy Dara Calleary, I welcome the move in Northern Ireland to adopt a lower rate of corporate tax. I think that will be good for the all-island economy. I welcome any efforts to reduce trade barriers. I welcome and support actively through my budget InterTrade Ireland which supports North-South activity but some of the wider issues, such as whether Northern Ireland would adopt the euro, are clearly not for me to consider. There are other issues. It is a worthwhile debate and it is a worthwhile report. It is worthy of consideration, and I read it on foot of the Deputy's recommendation.
In large part.
3. Deputy Paul Murphy asked the Minister for Jobs, Enterprise and Innovation if he will report on measures he has taken in monitoring compliance with workplace legislation in the fishing industry, with particular reference to migrant labour; and if he will make a statement on the matter. [41851/15]
I am sure the Minister is aware of the cases of gross exploitation and slave-like conditions of undocumented migrant workers in the fishing industry in Ireland, exposed by The Guardian. The Minister was asked about this issue almost two and half years ago by Deputy Joe Higgins. He referred to it as a contention and the International Transport Federation has done much work on it. What action will the Government take to end the gross exploitation that is taking place to ensure these workers are afforded the full protection of the law?
Concerns about exploitation of vulnerable migrant workers in this sector are global in nature. In order to address the complex array of issues facing the State in monitoring compliance with workplace legislation in the fishing industry, the Government established a task force a few weeks ago on allegations regarding the treatment of workers on Irish fishing trawlers. Arising out of the conclusion of the task force’s work last week, we now have a scheme in Ireland to assist such workers.
I welcome the agreement reached by members of the task force, which saw all Government and State agencies involved in the sector coming together to come up with a solution. This cross-departmental approach makes the scheme robust and fair, as well as helping to reduce the potential for migrant workers in this sector to be abused by unscrupulous employers. That is the aim of the scheme. The agreement provides that non-EEA nationals will enter into a new employment relationship with an employer in the State, as opposed to being share fishermen, which has been the predominant model in the sector. As such, they will be guaranteed all appropriate employment rights and protections during their period of employment and the WRC will have a remit in respect of compliance with employment rights legislation and enforcing these workers’ rights. Inspections regarding enforcement of legislation relating to the rest periods and maximum working time of seafarers and fishing vessel crews will continue to be undertaken by marine surveyors of the Department of Transport, Tourism and Sport.
Complementary to the new scheme, the powers of the inspection service of the Workplace Relations Commission, WRC, have been broadened under the recently enacted Workplace Relations Act to empower WRC inspectors to board vessels to enforce the full suite of employment rights legislation for non-EEA workers who will be employees under this scheme.
It is the Government's stated intention to see a memorandum of understanding put in place by the relevant State enforcement bodies to provide for a rigorous and effective cross-agency inspection scheme. I am chairing a sub-group of the relevant enforcement agencies in order to ensure that this memorandum is in place before the commencement of the scheme. The sub-group will hold its first meeting shortly. Strong enforcement and inspection is absolutely essential to the success of this new regime.
Why did the Government do nothing about this matter two and a half years ago when it was first raised in the Dáil? At that time, the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, referred to the allegations as "a contention" and added that the former Minister for Justice and Equality, Deputy Shatter, had pointed out that "because a person may elect not to abide by the rules does not imply that the onus is on the State to regularise - far from it". Both Ministers adopted an extremely callous attitude to what we now know was gross exploitation. That exploitation included the withholding of pay and the holding of workers' passports-----
Sorry, this is Question Time. The Deputy should ask questions.
-----by owners. The question is clear. Why did the Government not do anything about this two and a half years ago? Why did it sit on it when workers were denied freedom of movement, subjected to sleep deprivation, exposed to dangerous work practices and so forth?
The point is that the Government is acting now. In a very short period we have brought the relevant Departments and agencies together to address this egregious issue. We now have a system in place in which everyone can have confidence. I compliment the members of the task force from a range of Departments who were involved in this for their efficacy and for the delivery of this outcome in such a short timeframe. As I said, I will be chairing a sub-group of the relevant enforcement agencies because inspection and enforcement is absolutely critical to the success of the scheme.
We must put the position of the non-EEA workers at the very centre of our concerns and we have done that. We have now, for the first time, established that all non-EEA workers who are operating on a permit under the new system will enjoy all of the protections of an employee. Their terms and conditions will come under the remit of the relevant inspection agencies in my Department.
The Government should be ashamed of the fact that it did not do something about this sooner. In terms of the task force, why was the International Transport Workers Federation, ITF, not involved, given that it has been doing work on this issue for years? Mr. Ken Fleming, in particular, has been trying to expose these practices for a long time. The Departments involved in the task force are, unfortunately, the same ones that played a role in the system that has obtained up until now. Does the Minister of State agree that the workers in question should be afforded an amnesty equivalent to that offered to workers who have been trafficked here for the sex trade?
We are providing an opportunity to a considerable number of non-EEA workers who are engaged in this system to be considered employees. The new permit scheme will be very robust. The State will hold a central depository of relevant permits that are in play at any given moment. The Deputy will be aware that the number of permits in the scheme has been set at 500. For the first few months of the operation of the new scheme, we want to work towards a system whereby those who are here already have the opportunity to regularise their situation.
We have been working with the ITF and with the Migrant Rights Centre Ireland, MRCI. I insisted that both organisations would be consulted and engaged with in the context of the development of the new scheme. I respect and acknowledge the work that the ITF has been doing - and Mr. Ken Fleming in particular - on this issue for a considerable number of years. The State has responded in a very effective way to this very egregious situation to protect the interests of extremely vulnerable workers who have been exploited. We will have the full range of employment protections in place under this scheme to protect people at work. They will be paid at the bare minimum, that is, at the national minimum wage rate. We will establish for them an employee employer relationship. I hope that Deputy Murphy will recognise that this is significant progress in the context of where we have come from.
4. Deputy Dara Calleary asked the Minister for Jobs, Enterprise and Innovation his views on the current regional spread of jobs and on Industrial Development Agency Ireland site visits; and if he will make a statement on the matter. [41757/15]
The various regional jobs action plans are being rolled out around the country but I am seeking specific information. All of the plans contain commitments to increase the number of new IDA Ireland investments, as opposed to existing employment. Many of these commitments are similar, with the targets for the mid-west, south west and the west set at 30% to 40%. I ask the Minister to detail the specific actions that will be taken by IDA Ireland to drive these figures, particularly in the context of the poor performance in recent years.
I am encouraged by the overall strong recovery in employment, with a net 135,000 extra people back at work in enterprises right across the country. While every region has seen employment expansion in its IDA Ireland-supported base, we have not experienced equal recovery in all sectors which is why I have launched the regional Action Plan for Jobs. I would point out to the Deputy that the plan is not confined to IDA Ireland developments because almost 90% of the enterprise base in the regions is Irish owned. Indeed, since the launch of the Action Plan for Jobs, approximately 90% of the additional jobs created have come from Irish-owned companies in the regions. It is important to recognise the contribution and ingenuity of Irish enterprise.
Foreign direct investment, FDI, is a key part of IDA Ireland's strategy to improve its performance in the regions. The agency has set a target of between 30% and 40% in new investment won in each region. It has strengthened its regional office network and that network's connection into its overseas network of offices. The agency is committed to a new programme of advance facilities and other priority property initiatives in the regions. Site visits, to which the Deputy referred, are not an accurate reflection of regional progress. IDA Ireland-supported companies have provided over 10,000 net new jobs outside Dublin since the launch of the Action Plan for Jobs. It is encouraging to see that the regional spread has been improving every year.
Work on the Action Plan for Jobs is now entering the implementation phase. We will be sitting down with regional interests in the monitoring group to oversee the implementation of the strategy. All of the agencies within my Department are wholly committed to the delivery of this approach.
I accept that there are many more elements to the Action Plan for Jobs than IDA Ireland, although I pay tribute to the agency for the work it does. The Action Plan for Jobs for the west has a very specific target. It refers to 92 additional projects from IDA Ireland within the lifetime of the plan. However, between 2013 and the end of September 2015, 561 IDA Ireland site visits were to Dublin and a full 71% of them were to sites in the greater Dublin area. I am trying to work out how we will move on from this situation when the majority of site visits are to the Dublin area. The Minister has said that site visits are not the be all and end all but unless we bring potential investors to a location, they will not invest in that location. Given the disparity in terms of putting the bait out to catch the fish, how are we going to entice investors into the regions when we are not bringing them there? The Minister is long enough in politics to know that the investment cycle, in terms of a decision to invest, starts years out in advance.
I thank the Deputy for his comments. It is important to bear in mind that 70% of the wins by IDA Ireland in terms of job expansion come from the existing base of companies. Deputy Calleary will know that the west of Ireland has had a very strong performance in the last four years, with a net increase in the numbers working in IDA Ireland companies of 27%. Indeed, all counties have experienced a significant increase but we believe that we can do better. We propose to create magnets within the regions through the construction of advance facilities. This approach has not been used for some time. We have deliberately sought to locate those facilities close to significant labour pools within the regions so that we have a strong offering to encourage investment.
Apart from the advance facilities, IDA Ireland will look to build on the strength of its offering in the regions as well as the more effective sale of the region and better co-ordination of regional actors in promoting the area and supporting the agency's marketing efforts. All those can contribute and that is why a multi-stakeholder approach to this is being adopted in the regional plan.
I agree with the Minister about the existing workforce and I would direct those commentators, particularly in the US, who have commented on the Allergan takeover this week, which I welcome, to the quality of the 1,000 strong workforce in Westport. The Minister made a specific commitment in the Action Plan on Jobs to provide 92 additional new projects to give new opportunities to a talented workforce to show its stuff and I am not convinced based on building two advance units in Galway and one in Castlebar and improved promotion, measures we have been asking the Minister to take for four years, that there is a roadmap. I am trying to get from him how specifically we will go from such a low base of new projects to 92 over the next few years but I will not get that this morning.
The Deputy is welcome to examine IDA Ireland's strategy and talk to IDA Ireland officials as well. They have been successful in targeting, for example, emerging companies that are making their first move, particularly from the US, to a European base and attracting these high-growth companies. Where we have a win such as Uber in Limerick, a high-growth company expanding rapidly, those wins can be significant. To get such companies into a region sets the region up not only for that project, but it is also a reference sale on which we can build.
I do not deny this is an ambitious programme but we are putting in place solid actions for this year on which we will build in the effort to deliver these projects. I welcome the Deputy's support for it. We can do better if we get all the actors in the regions working to these common goals and that is what I intend to do.
5. Deputy Paul Murphy asked the Minister for Jobs, Enterprise and Innovation the progress of the Comprehensive Economic and Trade Agreement, CETA, between the European Union and Canada; the status of the agreement's investor state dispute settlement, ISDS, mechanism; if the mechanism will threaten the right of European governments to regulate in the interests of workers, consumers, and the environment; and if he will make a statement on the matter. [41852/15]
What is the status of the CETA agreement between the EU and Canada? In particular, I would like to ask about the ISDS within the agreement. I refer the Minister to his comments a few weeks ago when he assured us that the Transatlantic Trade and Investment Partnership, TTIP, agreement will not contain a similar ISDS. Is it not the case that US corporations will be able to use the ISDS under CETA as a back door to sue European governments, including the Irish Government, that interfere in any way with their right to profit?
Increased exports have played a major part in Ireland’s economic recovery. Of the approximately 135,000 people back at work, it is estimated that close to 50% have come directly from export earnings. Agreements that improve the access to markets for Irish enterprises are strongly supported, therefore, by Ireland.
With regard to the Canadian agreement, political agreement on the key elements was announced in October 2013, and the conclusion of negotiations were announced at the EU-Canada Summit on 26 September 2014. The agreement covers virtually every aspect of economic activity, and it is extremely important for Ireland. It offers significant opportunities for growth in trade with Canada.
The agreement is currently at the legal scrubbing stage. Once this phase is completed, it will have to be ratified by the parties involved, including all 28 EU member states. In Ireland’s case, this will mean a decision of the Houses of the Oireachtas. The ISDS mechanism in the Canadian agreement provides that the mechanism can only be invoked where there is a breach of fair and equitable treatment, meaning one of the following: denial of justice in criminal, civil or administrative proceedings; a fundamental breach of due process, including a fundamental breach of transparency, in judicial and administrative proceedings; manifest arbitrariness; targeted discrimination on manifestly wrongful grounds, such as gender, race or religious belief; and abusive treatment of investors, such as coercion, duress and harassment.
The Canadian agreement also makes clear that legitimate public policy measures taken to protect health, safety or the environment do not constitute indirect expropriation. Indirect expropriation can only occur when the investor is substantially deprived of the fundamental attributes of property. In Ireland, private property is protected by virtue of Article 43 of our Constitution. The Commission has confirmed that it is considering whether aspects of the EU-US trade agreement investment protection proposals could be incorporated into the EU-Canada agreement as part of the legal scrubbing process. However, any changes to the investment protection provisions would require the agreement of both the EU and Canada. A committee to be established under the investment chapter of CETA can consider whether and, if so, under what conditions, an appellate mechanism could be created under the agreement.
Does the Minister agree the ISDS under CETA is more expansive than that proposed under TTIP, presuming that deal is concluded? Does he further agree it is at least as expansive, if not more expansive, than that under the North American Free Trade Agreement, NAFTA? Does he acknowledge that NAFTA and the ISDS mechanism have made Canada the most sued state in the world, resulting in damages of almost $200 million being paid over the past number of years to foreign investors? Why on earth do corporations need a separate justice mechanism? Why can they not operate under the law like everybody else where people's rights are protected instead of being given specific rights which are protected by separate court processes? Would the Minister at least admit that if CETA goes through, any US corporation with a subsidiary in Canada will be able to sue the Government under these mechanisms?
The Deputy asked why these are in place. He should consider a small Irish enterprise trading in the US. There are 50 different states in which a legal action might be taken to establish its rights under a trade agreement. In many cases, those states do not incorporate into their laws the specific elements of these agreements. The investor dispute mechanism is, therefore, a way of trying to facilitate the capacity to go to one location to establish entitlements under the agreement. It is similar for US companies dealing with 28 different member states in the EU. The difficulty of pursuing cases in different countries has been acknowledged. That is the reason ISDS mechanisms have been developed.
The Deputy is correct that there has been criticism of past agreements. However, the Canadian agreement and the current EU-US agreement are not more expansive in that the same provisions in respect of what can be invoked still apply in both agreements. The changes proposed under the EU-US agreement relate to the process such as the selection of judges who would adjudicate on disputes, the transparency of the procedure and the availability of an appeals mechanism. The EU is considering the possibility of applying those additional procedural protections to the Canadian agreement.
The ISDS is in place to defend the right of corporations to profit and to say that any interference with that right to profit under the expansive fair and equitable treatment and legitimate expectations provisions constitutes something that they can then sue a state for huge amounts. That can be workers' rights such as in the case of Veolia suing Egypt for increasing the minimum wage; environmental regulation such as in the case of Canadian subsidiary of Lone Pine Resources based in the US suing Canada over a moratorium on fracking or Vattenfall suing Germany over a moratorium on nuclear power; or consumer rights such as in the case of the pharmaceutical giant, Eli Lilly, suing Canada for €500 million under NAFTA. There are repeated examples under NAFTA of corporations suing states that try to defend the interests of their citizens as opposed to corporate entities. Does the Minister agree this represents a serious danger and that the Government should not go along with it?
No, the Deputy is misinformed on this. The agreement does not allow companies to contest interference in respect of legitimate expectations. The range of cases that can be taken is narrow. These include denial of justice in criminal, civil or administrative proceedings; a fundamental breach of due process, manifest arbitrariness; and abusive treatment of investors. The agreement explicitly excludes workers' rights, environmental rights, health and safety regulations or similar public policy measures.
They cannot be the basis of any such challenge, so the Deputy is incorrect. Bad investor dispute settlement agreements have been negotiated in the past and the EU is seeking to introduce a new model which will be robust and inspire confidence in citizens and companies alike. That is why the changes introduced in this agreement, which were introduced in the Canadian agreement and are being further evolved in the US agreement, are being put in place.
