Dáil Éireann díospóireacht -
Tuesday, 27 Nov 2018

Vol. 975 No. 5

African Development (Bank and Fund) Bill 2018: Instruction to Committee

Minister of State at the Department of Housing, Planning and Local Government (Deputy John Paul Phelan)

I move:

"That it be an instruction to the Select Committee on Finance, Public Expenditure and Reform, and Taoiseach, in relation to the African Development (Bank and Fund) Bill 2018, that:

(a) Standing Order 154 is modified as outlined in Standing Order 200 to provide that the Committee has power to make amendments to the Bill which are outside the existing subject matter of the Bill, in relation to sections 1 and 2 of the International Finance Corporation Act 1958, in order to allow for proposed changes in the International Finance Corporation's Articles of Agreement to be approved by way of Dáil Resolution rather than by primary legislation; and

(b) pursuant to Standing Order 154, the Committee has power to make amendments to the Bill which are outside the scope of the existing provisions of the Bill, in relation to section 851A of the Taxes Consolidation Act 1997 and the confidentiality of taxpayer information, in order to allow for this information to be disclosed by the Department of Finance when authorised by the Freedom of Information Act;

and that it has power to make other consequential amendments required to take account of the changes above."

The purpose of my remarks is to explain to Members the background to, and the need for, amendments to the International Finance Corporation Act 1958 and the Taxes Consolidation Act 1997, respectively, and to explain why they are being tabled by the Minister for Finance to the African Development (Bank and Fund) Bill 2018.

As Members will recall during his Second Stage speech on the Bill the Minister of State, Deputy D’Arcy, outlined that we were considering introducing a number of amendments on Committee Stage. While these amendments do not directly relate to the original intentions behind the Bill, which as Members will be aware serves to facilitate Ireland’s membership of the African Development Bank and African Development Fund, both amendments are of a time-sensitive nature, with the African Development (Bank and Fund) Bill considered an appropriate vehicle to address them.

I will now provide further details. Although outside the scope of the Bill as published on 25 September, the first proposed amendment relates to an issue that is relevant to Ireland’s relationship with development banks generally, through amending the International Finance Corporation Act 1958 which provides for Ireland’s relationship with the International Finance Corporation, IFC. The IFC is a sister organisation of the World Bank and member of the World Bank Group. Its focus is to encourage private sector development in developing countries. Ireland has been asked to vote in respect of a proposed change to the IFC articles of agreement before the voting deadline of September 2019. The proposed legislative amendment seeks to alleviate the legislative burden associated with Ireland’s participation in the IFC through allowing for changes in the IFC’s articles of agreement to be approved by way of Dáil resolution rather than by primary legislation.

As Members may be aware the International Finance Corporation Act provides for the approval of the IFC’s articles of agreement and allows for the Minister to make payments related to this agreement. This is in line with Article 29.5.2° of the Constitution which provides that the State shall not be bound by an international agreement, including any amendments, which involves a charge upon public funds unless the terms of the agreement have been approved by Dáil Éireann.

The proposed amendments to the International Finance Corporation Act will enable changes in the articles of agreement to be approved by way of resolution of the Dáil. Currently, as has been advised by the Office of the Attorney General, approval of changes to the IFC articles of agreement would require primary legislation. In the case of Ireland's membership of other international financial institutions, the Development Banks Act 2005 provides that such changes may be approved by means of a Dáil resolution. This approach has reduced the administrative and legislative burden associated with our membership of these institutions, while still allowing for full Dáil oversight via a resolution.

In summary the proposed legislative amendment seeks to replicate this provision in the case of the IFC legislation through amending the definitions within sections 1 and 2 of the Act. This would bring it in line with the legislation governing Ireland’s membership of other international financial institutions.

The second amendment proposes to amend section 851A of the Taxes Consolidation Act 1997 which provides the basis for confidentiality of taxpayer information. Section 851A also provides the basis for the circumstances in which such information can be disclosed by the Revenue Commissioners, including the limited circumstances in which such information can be disclosed to the Department of Finance.

The proposed amendment will address a conflict between the legislative provisions of section 851A of the Taxes Consolidation Act and those of the Freedom of Information Act, which currently prevents the Department of Finance from providing records to the Office of the Information Commissioner, even when it is statutorily required to do so in the context of the operation of freedom of information legislation.

Deputy Michael McGrath

Fianna Fáil supports this instruction to committee motion. In effect what the House is deciding is to enable the Minister to introduce the amendments which will be considered in the normal way on Committee Stage of the Bill.

I thank the Department for providing some background notes in advance so that we are aware of the substantive nature of the amendments, in particular the first amendment relating to the International Finance Corporation, which the Minister of State has addressed in his remarks. The second amendment will enable the operation of the freedom of information, FOI, legislation in the context of a particular decision. The third amendment changes the Short Title and Long Title of the Bill.

We will engage in respect of the details of these amendments along with any other amendments introduced on Committee Stage, which is to be taken on 4 December.

Deputy Pearse Doherty

Tá dhá pháirt leis an rún seo agus ba mhaith liom tús a chur leis an aitheasc agus dul go dtí Acht na Cánach, is é sin chun deireadh a chur leis an coimhlint idir na rialacha ó thaobh faisnéise idir an FOI, agus dlíthe na gcánacha.

I do not object to the motion which covers two amendments. The second seeks to resolve the conflict between the FOI rules and the tax Acts. We will discuss the matter in more detail in committee. I have no problem with allowing it to proceed. It is interesting to consider the balance between taxpayer confidentiality and the right of the public to access information deemed by them to be important. I understand this change will allow the Office of the Information Commissioner to access and assess information that is confidential under tax laws. That is a necessary change, but it is limited to the Information Commissioner, which is worthy.

I have had freedom of information requests refused when I sought records related to the Department of Finance, for example, regarding its meetings with Apple at a time when the House was discussing changing our tax code, a change which actually favoured the company and others to the tune of billions of euro. Private meetings which result in potential changes to the country's GDP are of public interest and the influence of big businesses in a small country means that their business becomes our business. That discussion may be appropriate for another day when the amendment is discussed in committee. The motion should open up a wider conversation about how in very limited circumstances freedom of information and the notion of taxpayer confidentiality can coexist.

I do not object to the first amendment the Minister of State mentioned, as it will still require Dáil resolution. In light of recent legislation, including the Asian Infrastructure Investment Bank Act and this Bill, vigilance is needed to ensure that expenses related to the development banks are always democratically assessed and approved.

I support the motion.

Deputy Joan Burton

I hope we will have an opportunity to discuss the amendments in greater detail. This is in the context of the relationship with the International Finance Corporation which is a sister organisation of the World Bank. I recommend the Minister of State read some of the recent statements by Dr. Kim, the president of the World Bank who comes from South Korea, in which he points to the error in the approach of organisations such as the World Bank which over many decades has just really been about big dams and other very large infrastructural projects, which in many cases did not particularly benefit local communities and may have moved them off their lands in parts of Asia and Africa.

Dr. Kim has suggested we should now have a focus on investment in people, particularly in education and in meeting the millennium development goals. Ireland's commitment to the African Development Bank is relatively modest and will take place over a lengthy period. As a new contributor to the bank, we need to ensure that our contribution reflects this welcome change of heart on behalf of institutions such as the World Bank, which, of course, in Africa and Asia is very influential in the projects that get the international funding.

The proposed concentration on investment in people, education and the millennium development goals would mean that post Ireland joining the African Development Bank the focus would be more people centred than simply, as we have very often seen, very rich western bidders for contracts walking away with most of the money spent in Africa and local people benefiting very little. Among these local people I include women and children who by and large are the people who suffer most from poverty in Africa.

Women, by and large, are the people responsible for carrying out the bulk of subsistence farming. In the context of farmers, women, by and large, are the small business people who are not necessarily part of the modern money economy. However, many parts of Africa are now advancing. I welcome that EU countries generally are beginning to have a fresher and deeper relationship with African countries because Africa is a vibrant continent with a huge population. The millennium development goals have helped reduce infant mortality, increase girls' access to education and generally widened the scope of third level education.

In terms of Ireland's participation in the African Development Bank, if we can be assured that it will meet the millennium development goals requirements, I would have no difficulty in supporting it. However, if this is about mostly men driving around in massive Land Rovers to very poor parts of Africa and spending working people's tax payments in Europe and the rest of the world in a way that simply aggrandises the people in certain types of development agencies and leaves little or nothing behind, I will not welcome it.

It will be for the Minister, and this Government, to answer how they propose to address that because as a country we spend well over €0.5 billion every year on development in our contributions. The African Development Bank commitment will be approximately an extra €8 million per year over the coming period. That is not a major sum in the scale of things but it is important that our development programme should be a quality programme aimed at enhancing the lives of the people who are very poor, particularly women and children, but also enhancing the capacity of African countries across the continent to make provision in a full way for their own people and lead to that period which many African writers and intellectuals have spoken and written about of an African renaissance that we would see in this decade.

Minister of State at the Department of Housing, Planning and Local Government (Deputy John Paul Phelan)

To conclude the comments I made at the outset on the second amendment to which the Deputies referred, the change in the law this amendment speaks to is necessitated by a specific issue that arose during the course of a review of a freedom of information decision by the Information Commissioner, which in part involved records that are taxpayer confidential. Under the current provisions of section 851A, officials in the Department of Finance are precluded from providing these records to the Information Commissioner as to do so could constitute a criminal offence. On the other hand, however, under the Freedom of Information Act there is a statutory requirement to furnish this information to the Information Commissioner and failure to comply may constitute a criminal offence. That has resulted in a highly unsatisfactory legal position with the conflicting legislative provisions, and prevents the Department providing the records to the Information Commissioner as it wishes to do. That is the purpose of it.

On the broader discussion about specific amendments, those will be matters for debate on Committee Stage. Regarding our role in the future with development funds and banks, particularly in Africa and Asia, I am very familiar with the Asian Development Bank and the efforts it is making. Earlier this year, I was in Manila, Kuala Lumpur and Singapore for a few days. We have a permanent member on the Asian Development Bank, Mr. Gibbons, who happens to be from Kilkenny also but of a famous name, and he explained to me some of the issues Deputy Burton spoke about such as moving away from the big bang infrastructural projects to more people-based projects. In terms of some of the forms of agriculture, the production in Malaysia of palm, which is something I was not very aware of but is a highly sought after product, has led to a conflict between that industry and environmental issues. I am aware the Asian Development Bank is examining ways of ensuring that Malaysian farmers will have alternative sources of income and activity into the future. I agree with the Deputy on that but, ultimately, those will be matters for discussion on Committee Stage.

Question put and agreed to.