The Irish Forestry Contractors Association will make a presentation on its concerns about the forestry sector. I welcome Mr. Christy Nolan and Mr. Michael Ryan. Before I call Mr. Nolan to make his presentation, I draw everyone's attention to the fact that while members of the joint committee have absolute privilege, the same does not apply to witnesses appearing before the committee. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable. I call Mr. Nolan to make his presentation.
Forestry Sector: Discussion with Irish Forestry Contractors.
Mr. Christy Nolan
I thank the Acting Chairman and members of the joint committee. We are delighted to have the opportunity to appear before them. We represent forestry contractors who are going through tough times. Some are in a dire financial condition. I will make the presentation, following which we will take questions.
The Irish Forestry Contractors Association, IFCA, thanks the committee for giving it the opportunity to express its fears for the future of the ailing forestry industry. Coillte Teoranta was formed under the Forestry Act 1988, section 12 of which states:
The principal objects of the company shall be stated in its memorandum of association to be
(a) to carry on the business of forestry and related activities on a commercial basis and in accordance with efficient silvicultural practices,
(b) to establish and carry on woodland industries,
(c) to participate with others in forestry and related activities consistent with its objects, designed to enhance the effective and profitable operation of the company...
Section 13 states the general duty of the company shall be:
(a) to conduct its affairs so as to ensure that revenues of the company are not less than sufficient to—
(i) meet all charges properly chargeable to revenue account (including depreciation of assets and proper allocation to general reserve) taking one year with another...
(iii) remunerate capital and repay borrowings.
The staff of Coillte were transferred from the Forest Service. Some stayed with the Forest Service, while others transferred to Coillte. This meant Coillte was in control of the national asset while being regulated by colleagues in the Forest Service, which is as close to self-regulation as one will get. This was the first mistake. Coillte was allowed to sell off the profitable clearfells of timber. The Forest Service allowed this to happen, as it gave Coillte the felling licence. The Forest Service allowed felling licences for premature clearfells. This caused the thinning programmes to be neglected and as we all know, if thinning is not carried out in time, the crop does not develop at the required growth rate. As a result, we now have a shortage of timber.
Coillte acquired approximately 1 million acres of State land, to manage and enhance on behalf of the people. It is now in dire financial difficulty. It lost sight of its obligations and became involved in land development, house building, machine sales and so on. As a matter of fact, most ventures it became involved in failed. It is now trying to gain control of the private forestry sector and offering partnership deals with farmers. This is to gain control of the crop and manage, sell and buy it at Coillte's price and on its conditions. As contractors, we know it will be on its conditions only. We have proved its national average system to be very unfair.
I refer to the last paragraph of Coillte's submission to the joint committee, "The big challenge is to bring the produce of these privately owned forests to market and we believe Coillte has a role in that regard". However, this will be on its conditions and at its price. That would be a disaster. We need a new body to oversee the future of forestry and ensure any available funds are used to expand the national asset, not put into a hole to support more losses and misadventures and misguided priorities.
The reduction of staff numbers in Coillte is also having an effect. There is a certification problem. Coillte cannot manage the assets it has, given the depletion of the workforce. It has reduced staff numbers by offering packages to a level which is unsustainable. At last count, the total number of Coillte staff was about 1,100. A package to get rid of approximately 90 front-line staff of ground workers has since been implemented. These were the people who dealt with the day-to-day operations of forestry development and were following the certification process. They should have been allowed to retire in low release order to avoid the loss of such local knowledge which is critical for sustainable forestry management. Coillte cannot be allowed to gain control of the new forestry development programmes because it has depleted its workforce to such a level that it cannot manage the estates it already controls.
Our contractors have made a huge investment in specialised machines which are of no value other than for forestry purposes and have heavy financial commitments. One unit which consists of a harvester and forager costs approximately €750,000. This is an enormous commitment when we are faced with a monopoly player which dictates terms.
The unsustainable financial condition of Coillte is a major concern. The company has a massive debt and loan base. It signed up to certification as a company which was trading in a sustainable manner and, as a result of its massive debt, may lose certification, as sustainability is one of the conditions of certification. It has lost direction and strayed from the management and enhancement of a valuable State asset. Its judgment, in getting involved in venture companies such as Griffner homes, machine sales and tree surgery, has been less than acceptable. Almost every venture started by it has failed. It now intends to become involved in nursing home development but with no research into the damage this will cause to the forest base. It applied for planning permission for six nursing homes just before the deadline for the tax incentive expired. It stated the company had no plans for this development and did not know if it would operate the homes, would do so with a partnership or sell them. These are the people who are in charge of our valuable State asset. They have no direction.
When Coillte applied for certification, it stated the annual growth rate would exceed the volume of timber it would take out of the forest. We now have a shortage of clearfells. Obviously, Coillte depleted the crop for short-term monetary gain and long-term disaster. It also stated other countries were diverting lands for purposes other than forestry. As such, it was not sustainable and should not qualify for certification. It is close to losing certification on this basis.
Contractors are forced to assume responsibility for the management of the forest estate as a result of dubious packages to reduce staff numbers and charged with multi-functional duties. Coillte manipulates the tender system to force mill contractors into its tender system. It put up timber standing for mills. The mills have their own contractors who harvest that timber. Coillte Teoranta, which has a harvest of approximately 48%, like us also employs contractors on a tender basis, which is unfair. However, we can deal with that issue on another occasion.
In regard to the 2010 ratio of standing sales, Coillte wants to take over most of the standing sales and is only putting up 40% of timber for standing sale to the mills' contractors and is taking over more of the harvesting sales, which amounts to approximately 53%. This will force the mill contractors to tender against Coillte contractors who are already in dire straits. We have been informed by the mills that Coillte has taken up to 100,000 cu. m off the system for optimisation, which we believe is another means of its getting control of more of the harvesting on its conditions.
The mill contractors are paid on a negotiated payment system. Coillte Teoranta is now forcing these contractors to tender against its contractors which will put more pressure on ailing contractors to reduce prices further and is in our opinion an abuse by the State company monopoly. Irish forestry contractors are concerned about the culture within Coillte Teoranta, namely, hear no evil, speak no evil, see no evil. It does not listen to anything we say. It refuses to reply to e-mails, engages in practices which are questionable, has made enormous profits during recent years, has made no return to the State and continues for some reason not do so. We do not know where all this profit went. No one knows why when it made such enormous profit, it is now in debt and seeking further moneys. The profits were not invested in the asset given it is depleted. The whole forestry infrastructure is collapsing. Coillte did not invest its profits there. It is questionable where this money went.
Heavy borrowings on the asset, which is heavily depleted, will affect our credibility in meeting our greenhouse target and acquiring European funding to put in place procedures to deal with global warming. Surely, this warrants investigation. The Irish Forestry Contractors Association commissioned a review of practices and procedures in the timber raw material supply chain section of Irish industry. This brought to light all the questionable practices by the State company — all of which are on record, a copy of which I am informed has been supplied to members of the committee — and the dire financial conditions of contractors. Mr. Bacon referred to this report in his review of forestry commissioned by Government.
We would welcome an audit of contractors to verify the critical financial position of contractors lest people believe we are making this up. We believe the forestry industry is unsustainable as a result of the reckless misadventures of Coillte Teoranta. We propose that if Coillte is more interested in speculation and questionable development, the valuable State asset should be taken from it and a dedicated body be charged with enhancing and developing it for the good of the country and not to support questionable gambles.
Greenhouse credits will cost the country millions. Rather than depleting our forestry sector we must put together a programme to ensure 17% of land is dedicated to forestry as set out in the programme for forestry development. A new body is required to deal with this development. The old system has failed. The relationship between Coillte and the private forestry company needs to be investigated. Coillte has been switching and transferring land and timber to this company. AIB and others are involved. We are not sure what the relationship is in this regard. There is a high concentration of Coillte staff on the board and management committee of the company concerned. I have been unable to obtain information from either organisation.
The area of private planting requires immediate attention as the annual planting programme has collapsed. As a result, we cannot meet our targets. The private planting in place is fragmented and in some cases there is no excess. This must be addressed. Forestry contractors need to have a representative on the board of Coillte as contractors are now charged with the responsibility of forestry development.
I thank Mr. Nolan for his presentation. I call on Mr. Michael Ryan to make his presentation.
Mr. Michael Ryan
I support all that has been said by Mr. Nolan. I also welcome the opportunity to air my concerns. My main concern is unemployment in the sector. As Mr. Nolan stated, Coillte Teoranta has implemented several redundancy schemes down through the years, which is worrying. The technical or silvicultural experts at the top level in Coillte say it is being managed in a sustainable way, but their judgment is far too concentrated on the economic aspect of sustainability and neglects the environmental and social aspects. Forestry is failing in its commitment to jobs and rural development. Deputy Aylward and others will remember the significant employment forestry used to generate in rural parishes such as Lukeswell or Castlegannon or similar areas.
Mr. Ryan knows his country well, fair play to him.
Mr. Michael Ryan
That is all gone, which is a shame. I would like to see forestry return to that position and contribute more to reducing high unemployment.
We will take questions now.
I welcome the deputation whose visit is long overdue. Mr. Ryan's presentation is a shocking indictment of Coillte Teoranta's failure to meet the practical requirements for the development of forestry. I appreciate the information he has provided. It is interesting to see how Coillte carries out its business and to realise that it is more interested in projects other than forestry or its development. We have the lowest rate of forestry in the European Union as a result of mismanagement over past years. We should have at least 17% to 20% of our total land area under forestry. Our climatic conditions are ideal for forestry and there is no reason the industry cannot be built up. We should ensure a firm forestry policy is inaugurated as soon as possible to keep timber production going.
I received an e-mail from a man very interested in this area who informed me about logs harvested by Christy Nolan, a timber harvesting contractor who is present and is chairman of the Irish Forestry Contractors Association, for delivery to Coillte's timber processing mills in either Clonmel or Bellview in Waterford. Mr. Nolan owns two expensive timber harvesting machines which cost approximately €750,000. Is that the price for each one or the price of the two of them together?
Mr. Christy Nolan
People harvesting timber must have two units, a harvester to cut the tree and a unit to bring it from the forest out to the road to be collected and taken to Bellview.
I take it the machinery is an investment of €750,000.
Mr. Christy Nolan
Not alone that, the interest on that would be approximately €70,000 or €75,000 over a five-year period while the loan is being repaid. It is very expensive. We have a great environment for timber production and have a "three" rotation as against the European "one" rotation. We also have a fair amount of citrus trees, but not everyone likes them. The trees are a high retainer of carbon.
To keep some order on this meeting, could the members put their questions and then we will take the responses? We will come back to the deputation after we take questions from two or three speakers.
The author of the e-mail stated that if the logs were removed from the forest today for delivery to Grainger's sawmill in Inniskeen, near my part of the country, they would be measured in accordance with standard procedures for the measurement of round timber prior to being converted from green tonnes to volume. He suggests it is practically certain that the measurement and conversion process would work out at a rate of 1:1.3 to determine payment for the logs by Grainger's sawmill to Coillte. However, the logs are not weighed by Coillte. When they are delivered to the Coillte owned timber processing mills in Clonmel or Bellview, Waterford, a much lower conversion rate is arbitrarily applied by Coillte to determine payment to people such as Mr. Nolan and Mr. Ryan, which results in a loss of income for all concerned.
The plans outlined by the delegation are very valuable for the formation and progressing of the forestry industry in this country. We should invite representatives of Coillte Teoranta to come to this committee to discuss this matter because unless they tackle the problem of forestry, we will end up with an industry in complete collapse. This would be a loss to the economy and would have an effect with regard to greenhouse gas emissions, which is a most important consideration. I propose that the committee invite Coillte to attend as soon as possible to discuss the points outlined today. This has been a dramatic address but it brings home in no uncertain terms the necessity to approach forestry in a practical fashion and not in a piecemeal fashion as has been the case for the past three decades. The time is ripe to put the situation in order. The information we have heard is very welcome.
Representatives from Coillte appeared before the committee just before Christmas. We will discuss this in private session when the presentation has concluded.
I thank Mr. Nolan and Mr. Ryan for appearing before the committee today. Their submission is hard-hitting and they do not pull any punches with regard to their views on Coillte. This is an issue which the committee needs to consider seriously. The submission states that the witnesses believe the forestry industry is unsustainable as a result of the reckless misadventures of Coillte. If this is being said by the contractors' association who are at the coalface, so to speak, this needs to be investigated. I support the views of Deputy Sheehan in that regard. I would also argue that perhaps we need to discuss this with the new Minister.
Just before Christmas, the Oireachtas passed a Bill which gave Coillte a re-financing facility of approximately €400 million. In my view, this measure is very opaque, with more unknowns about this facility than there are knowns, so to speak. The manner in which that procedure was rushed through the Dáil raised a number of questions, some of which are now coming forward in this submission. There is a corporate governance issue with regard to Coillte. There is no question but that its own standing staff quota has been reduced significantly over the years and no question but that Coillte took a punt on other avenues of business which have not borne fruit. I realise it went into the construction industry at the height of the game and invested in ventures such as Medite and so on and these have not borne fruit. However, if the forestry contractors are questioning issues with regard to machinery sales and the investment or diversification into nursing homes and if this is at a price of the quality of wood being grown and the management of the forestry, then we need to raise these issues with Coillte.
I have a couple of questions on the submission. I want to increase my understanding of the manner in which contractors are forced to take responsibility for the forest estate. Can the witnesses elaborate on the ratio between standing sales and harvested sales? As I understand it, Coillte seems to be shifting the goalposts. If I am not mistaken, mills are having to compete with the contractors on management and on harvesting. If that is the case, I wonder if we are setting a dangerous precedent. I would like the delegates to elaborate on that.
I would also like to ask about the percentage of land that is forested. Does the Irish Forestry Contractors Association have any ideas on growing the number of trees needed to reach the 17% target? I am also concerned about the issue of whether contractors and other stakeholders in the industry should be represented on the board of Coillte. Would that help to address the whole issue of corporate governance? If contractors are treated as major stakeholders, at least they will have some sort of say at the table when decisions are made about what is happening on the ground.
I am most familiar with the Ballyhoura region. I have seen at first hand the value of the amenities, including the bicycle trails, which have been developed there. More and more, however, I am witnessing problems with Coillte's forestry management. I look at forestry as a layman, as I do not have an expert view on it. Every time I walk around the Ballyhoura Mountains, I can see the amount of dumping that is taking place. I am sure this is replicated throughout the country. When I was in the Ballyhoura region last Sunday, I thought the amount of dumping was absolutely scandalous. I get a sense that the number of standing staff has been reduced to the extent that those who work to manage or monitor the forest resource are contractors, rather than permanent staff. I suggest, from a layman's perspective, that the quality of wood may have diminished somewhat as well. There was a time when between 25 and 30 men would have been working in an area like the Skahanagh and Castlepook region. I realise that the mechanisation and modernisation of machinery has supplanted many of those men. There was a time when those present on the ground were able to monitor what was going on. It seems to me that Coillte has completely and utterly shifted its ethos towards a kind of outsourcing. It is now trying to bring its outsourcing down to the lowest common denominator, by beginning to squeeze the contractors who are working at the coalface.
I am glad we have received this submission today. To a certain extent, it has opened our eyes to what is going on. I would like the delegates to elaborate on the current pricing mechanisms for the contractors. Where do they envisage that the future growth in their industry will take place? Can we get some sort of elaboration on how they see that being addressed? How can we assist that process?
I will allow one more contribution before we return to Mr. Nolan.
I welcome Mr. Nolan and Mr. Ryan, who have given us a great deal of food for thought. Much of what they said was quite frightening. I was not aware of some of it and I am sure other members were not aware of it either. I fully agree with what Deputies Sheehan and Sherlock said. I will not be repetitive. I do not think this information was available to us at our meeting with Coillte.
No.
Perhaps we will have to arrange a joint meeting with representatives from the Department of Communications, Energy and Natural Resources, officials from Coillte and the new Minister. I am alarmed by some of what has been outlined to us today. We have to go into this in more depth. There is no reason to doubt what has been presented to us but if only half of it is true it is very serious. I will leave it at that. We must have another meeting with Coillte on the matter. I will leave it to the Chairman and clerk to decide whether to invite representatives of the Department of Communications, Energy and Natural Resources. That might also be important.
We will discuss that when the deputation has left and decide what to do then. I invite Mr. Nolan to respond to the three questions.
Mr. Christy Nolan
To take Deputy Sheehan's point about the conversion of the weight-volume of the timber, when Coillte sells timber to the mills it goes in on a weight basis. When the timber goes into Graingers it is weighed in the mill but Coillte does not accept that payment. It takes a sample from every seventh load that comes in out of a particular SP; if there was 3,000 m every seventh load that is weighed and a weight-volume conversion is carried out. That is where the 1.3 m comes in. A formula is used where it converts from 1 tonne to that 1.3 m. Coillte charges the mill then at the rate of the weight of the timber multiplied by 1.3. It charges Grainger's for the timber at a ratio of 1:1.3.
If a contractor harvests that same timber, the commercial timber goes to Graingers and the end of the tree goes to Coillte's own mills. Coillte puts an arbitrary figure on it of 1.04 or 1.05 depending on what it says it is. The contractor could lose one fifth. We got one fifth of one load and we got an ex-Coillte research forester to do a calculation. I have the details. He would not mind but it would be unfair to name him. Based on the arbitrary system used by Coillte that we consider unfair and unacceptable he lost €18,000 on one sale of 3,000 m of timber, which is quite a small sale. We have determined that Coillte owes contractors between €3 million and €4 million for abuse of the system, to which we object. Last year Coillte tried to change the system. We discussed the matter with Coillte but we could not get any details. The new system was supposed to be implemented but none of Coillte's staff has been notified about it. No information is forthcoming.
Coillte has been toggling between State, semi-State and private. I met the previous Minister for Agriculture, Fisheries and Food, Deputy Coughlan. I also met the former Ministers of State, Deputy Killeen and Deputy Browne. They could not determine whether Coillte was a public body, a State body, a semi-State or a private company. The European Court of Justice ruled clearly that it is a State company. If Coillte is a State company why does the Government not have a representative on the board? That is the minimum it should have to ensure some control. When Ms Emily O'Reilly, the Ombudsman, decided to take Coillte to task for refusing to give information it objected on the basis that it was a private company but when it is trying to get farmers involved in partnerships it refers in its publications to the fact that the partnership is with Coillte, a State company. Coillte tries to have it every which way, which is totally unacceptable. It has been getting away with it for a considerable time and that is why it can do all those little things. No one takes Coillte on. The company does whatever it likes and no one seems to be able to do anything about it.
Deputy Sherlock referred to Ballyhoura. The one thing he failed to see, or perhaps he did see it, was the frightening amount of timber that has been removed. It is like world war three up there because all the timber is gone. If Coillte had done what it said under certification, that it would take out less than the growth rate, we should have timber all over the place in Ballyhoura. The whole place is derelict. One will see the same thing in other places around the country. Clear fells are evident everywhere. The thinnings were never done so no thinnings are coming on-stream. We are short of timber. Coillte has told the mills that this year alone it will be short 200,000 cu. m of timber. That is a fact we can prove. It said one mill would be put out of business on that basis.
Can the committee take it then that because the forest-scapes are currently so sparse, replanting is not occurring?
Mr. Christy Nolan
The valuable clear fells were taken out to generate money.
Was there any replanting?
Mr. Christy Nolan
They should not have taken out as much as they did. What was taken out should have been less than the growth rate. Committee members may recall when Coillte tried to take over Balcas, it claimed the mill would not be able to cope with the amount of timber coming on stream. A study conducted then stated that by 2015, Ireland would have 5 million cu. m of wood flow coming on stream. This year's wood flow has been reduced because the timber has been cleaned out and the mills cannot get enough of it. Coillte is getting the highest price it ever got for timber; the price has gone through the roof. The mills cannot get enough timber now and they claim they will have run out of supplies by July and August.
Mr. Ryan and I have been up and down the country on behalf of the forestry sector for the past ten years, paying our own expenses and doing it in our own time. This means we have no agenda other than ensuring the future of forestry. Everyone else involved in the sector such as Coillte staff have their expenses covered.
There is a great future for forestry in Ireland. A minimum of 18% of land use should be given over to forestry. When I met with Mr. Denis Byrne on this matter, I pleaded with him to go to Europe to get funding to develop forestry here as a way of tackling greenhouse gas emissions. Funding from Europe is the only way one can get the farmers into forestry. However, I could get no one to go with me.
Deputy Sherlock raised the matter of machine sales. We have proof that Coillte was selling forestry machinery by taking over an agency responsible for it. We nearly lost all our agricultural grants because of practices in this area. I never say anything that I cannot stand over. The Department had to visit and plead with an individual on this matter because it would lose all the grants if this practice of selling machines came to light. I will pass on the information to any committee member who wants it. I also have categorical proof of other practices which are highly questionable.
Is Mr. Nolan referring to the Department of Agriculture, Fisheries and Food?
Mr. Christy Nolan
It was the forestry service in the Department of Agriculture, Fisheries and Food. The officials claimed the Department gets all its forestry grants from the EU.
Is it possible that a branch of Coillte went down to this individual?
Mr. Christy Nolan
It was definitely the Department. I will stand over that.
To clarify, is Mr. Nolan claiming Coillte diversified into selling forestry machinery but this was in breach of EU guidelines and the Department was afraid it would lose funding as a result?
Mr. Christy Nolan
The grant aid from the EU was supplied on the basis of it being used for forestry.
There are certain things we can say under parliamentary privilege which Mr. Nolan cannot.
Mr. Christy Nolan
Yes, I cannot say them.
I appreciate his position. The committee, however, can ask Coillte about an issue raised by Mr. Nolan concerning forestry machinery which he feels should be investigated.
Mr. Christy Nolan
I have other practices of which I have categorical proof but cannot raise because I do not have parliamentary privilege.
I note from a forestry contracting publication in October 2006 that Mr. Nolan is pictured at the official opening of the Powder Mill nursing home and care centre in Ballincollig, County Cork.
Looking well.
He was. At the time was he in favour of Coillte diversifying its activities?
Coillte does not own that nursing home.
Is it the case that Coillte does not own it?
Mr. Christy Nolan
I have no problem in answering that question. Actually, a friend of mine in the timber——
We wish to avoid criss-crossing to keep the proceedings moving.
Mr. Christy Nolan
I will be clear in my answer. A friend of mine, Mr. Joe Peters, had a nursing home in Ballincollig. He asked me to attend because he was a past chairman of the Irish Forestry Contractors Association. To clarify, I am a safety officer and monitor safety procedures in nursing homes. That is why I am so afraid of Coillte becoming involved in nursing homes because it is a disaster. I have dealt with all aspects of safety for it. There is a new regulatory body in place and I can confidently assert that Coillte will lose everything it has if it becomes involved in nursing homes. It knows nothing about this enterprise or does not know whether it should become involved fully in running them or take a partnership approach. My advice is that it should keep away from this enterprise because it would take up to ten years to earn accreditation from the HSE as regards referrals and so on.
We must be careful, as we are diversifying into a dangerous area. Mr. Nolan does not have the same privilege as members of the committee.
Mr. Christy Nolan
I should be afraid in that regard.
I, too, welcome our guests. I am alarmed but not surprised at some of the information they have given to us, since I have some experience in the sector, both as a contractor and an ordinary layman.
It was a source of pride that Forest Service had plantations and other interests. I believe it was Deputy Sherlock who indicated that it had at least 20 to 25 men working in each area. It appears Coillte has lost sight of its raison d’être and literally run amok. I have had difficulties with it during the years, on behalf of constituents, where it just cleared everything away beside roadways and on scenic drives, even though it was clearly obliged to provide for appropriate screening. These are public roadways, but it just ran amok and the real reason is that there is no control locally. I have to compliment, however, some of the forestry personnel with whom I deal. I must mention Mr. Dan Lynch, in particular, in my area. They have to cover half a province and the system is just not workable. The same is true of Eircom workers who have to travel from my area to New Ross. The area is just too big to cover.
Returning to the matter in hand, I have questioned the board and the CEO who is on an enormous salary, a matter I have raised before. He is paid much more than the Taoiseach; for what? They have raped a good organisation – I hate using the word, but that is what they have done – and the countryside, created a mess and will not deal with farmers. The organisation will not even fence its property anymore; as a result, if one's sheep go into the forest, that is one's tough luck. It fenced its property up to eight or ten years ago, but then it was a case of bye bye blackbird. They are regarding the people with disdain; in this they are worse than the British who were run out of the country.
I see Coillte has become involved in many areas. I must emphasise that there are some good people working for it, but I am aware of some of the practices at the machinery end. They are just cowboys. We have to get its representatives back before the committee. Allegations were made to the effect that not even the Minister was able to tell whether some of the ventures in which it was involved were State-owned. That is a symptom of what is happening in the country, that quangos, essentially, can work at arm's length from the Government. Its representatives might not even come here to answer these questions, but in the event that they do, will they tell us the truth?
I would welcome regulation in some of the areas mentioned because the current situation is an abomination. A good industry has been plundered and it is appalling that no planting is taking place. As one can see in any forest, the trees have been removed and areas have been left barren. It is a desolate sight. There is also the enormous problem of dumping. In the Knockmealdowns there is a monument to a national hero, Liam Lynch, where, admittedly, Coillte has been helpful. However, overall, while I accept that there are problems with boy racers, dumping of cars, and so on, it has not been keeping its house in order. It has taken its eye off the ball and got away with blue murder. It needs to be brought back into line and to show a proper sense of decency and respect for the countryside and its paymasters.
The delegation raised some valid points. I am from Wicklow, so I am well aware of the input by Coillte in Newtownmountkennedy and Avondale. I had dealings with staff there who were almost put on short time last summer but were later offered a redundancy package when there were significant profits in other parts of the company. I take the point made about representatives from the association on the board. Much of this boils down to the way Coillte is structured at the moment. It is a semi-State company charged with the responsibility of returning a profit. Apart from nursing homes, it has got involved in joint developments in places like Annacurragh, where ten or 12 houses were built, and it used famous eco-architects to develop projects which did not materialise elsewhere in Wicklow.
I know the Irish Forestry Contractors Association consists of 66 self-employed persons who plant, cut and transport trees. What is the relationship with the likes of Green Belt? Reference was made to the fact that Coillte seems to be offering itself for joint ventures on plantations. I planted eight or nine hectares 18 years ago and I contracted Green Belt to do it using the grant scheme that was in existence at the time. What is the delegation's opinion on the current lack of grant aid to forestry development? There is an idea that forestry can be used as a carbon sink for carbon emissions, and I hope this will be addressed in the ongoing negotiations.
The delegation's main concern is with the company's massive debt and loan base and the point was also made that Coillte seems to be making massive profits. I am a little bit confused by that part of the contribution. It was said in the presentation that Coillte made no contribution to the State by way of a dividend yield. That was one of the points we raised when representatives of the company attended a committee meeting in December.
I am interested in the relationship between the companies as opposed to just the contractors who plant the trees. Some of the companies involved use contractors on a subcontracting basis.
There is a big forestry area in my constituency. I remember 30 and 40 people working in that area, but today there is only one forester and no worker. My own brother was a forester and I have been told that planting was carried out, but because there was no maintenance and tilling, all the planted trees have been lost. I have no proof of this but I have been told that the planted trees have been lost to Coillte because they were not sprayed, there was no proper fencing off and no tending time. Many acres have been lost and will never be redeemed again. They are down in the books as timber to be harvested in 20 years but in fact many acres of these trees are dead. I would like to hear the delegates comment on that.
Illegal dumping is a serious concern and while I know it has nothing to do with the Irish Forestry Contractors Association, the contractors must come across it in the forests. Will the delegates comment on that also?
Our national target would be to get back up to 10,000 hectares of planting per year but, at present, we are at approximately 6,000 hectares between private and Coillte planting. How do we get back up to 10,000 hectares? Will it be through grant aid, increased funding or better selling of the product?
Mr. Christy Nolan
Education is the big problem. We went into the schools but we had a major problem getting packs from the forest service to take to schools. We went to the schools in places like Kildorrery and asked to speak to the young people. When I spoke to them, I found they were very negative about forestry and thought it was awful and a bad word. I spent two hours with those young people and when I finished, although it was difficult to believe, they all wanted to go out to the forests. There is no education. The forest service is doing nothing to educate people, although it is the only way forward. As Mr. Ryan is a planting contractor, he will deal with the other issues.
Mr. Michael Ryan
With regard to the planting programme, Coillte does reforest all its clear fells — that is under commitment. We would be happier if it diverted some of its profits into the maintenance and care of that reforestation. As the Chair said, it is probably not up to the standard it should be. However, while Coillte reforests its area, that does not generate any increase in the forestry estate and is still only re-planting what has been clear felled. Any increase in the forestry estate is generated through private sector forestry. There was quite a generous commitment to forestry in this year's programme for Government and it is one of the few areas that held its ground in regard to commitment for financing. However, for some reason, that is not converting into acreage in forestry, although there is significant interest.
There are two aspects of the scheme which the Government might consider. One of the biggest impediments is the commitment of land to forestry for infinity. Once a person plants a field, it is forest forever. That is a big decision for a farmer to make and is one of the things that stops farmers from going the whole way. I have no doubt that if a farmer does plant the field, he will leave it in forestry forever, because forestry is something that gets into a person's blood. However, to commit legally to forestry forever is a big say on a farmer's behalf. This is one aspect of the scheme that could be examined.
The other point is that the premium which was promised to farmers for a period of 20 years was jiggled a bit last year.
There was an 8% cut.
Mr. Michael Ryan
Exactly. That went right through the sector and created a lack of confidence in the scheme because people believed there might be another 8% cut this year. Planting has slowed down, perhaps to 5,000 acres, and it is certainly well off-stream in regard to the Government programme. This needs to be re-examined.
We have yet to deal with Deputy Doyle's questions.
Mr. Christy Nolan
This concerned our relationship with Coillte. Private contractors do all the work, even for the private companies. Those private companies have no staff of their own dealing with that work. It is contractors who are enforcing all the regulations relative to certification. We do everything because Coillte has no staff. In the Ballyhoura Mountains, the forester has no foreman on the site because he was made redundant. The people who need to be on the site are gone, for some unknown reason. Coillte is incapable of looking after certification and will lose certification if it is not careful and does not do something to address this.
This is related to the dumping issue. There is dumping everywhere and, whether Coillte likes it, under environmental law it is obliged to clear up the dumping on its sites. That is the bottom line. It is doing nothing about it, however, and the rubbish is left there. It could put up cameras and carry out spot checks but it will not do so. We have a major problem with the timber we harvest being stolen and our hearts are broken trying to get Coillte to do something.
Can I clarify this point? Does Coillte have an obligation to clear this up?
Mr. Michael Ryan
Yes.
Mr. Christy Nolan
Yes, under environmental law.
Even though it is dumped illegally, the onus is on Coillte. My brother, who was an inspector, was involved in this. If cars are abandoned or rubbish is dumped, the onus is on Coillte to clean it up.
Mr. Christy Nolan
Coillte staff are so thin on the ground, they do not know what is happening. Contractors are obliged to take all the responsibility. The Acting Chairman knows that Coillte staff spend three years in Shelton Abbey being trained but they force contractors to do these things without any training or with a day's training. Under a measure we have objected to in environmental law, Coillte is forcing contractors to take out timber from sites and cut tracks across the mountain that will destabilise it. Under environmental law, one must get soil mechanics to test the stability of the soil but Coillte, as the landowner, is abdicating its duty and telling the contractor to dig the track if he wants to get out the timber. Coillte holds the contractor responsible if anything happens. These tracks should not be allowed under any circumstances because they will result in slides. Contractors are digging tracks all over the place rather than Coillte paying the rate to get out timber correctly in an environmental and economic way.
Deputy Mattie McGrath referred to walks. Fáilte Ireland spent €6 million on the Ballyhoura cycle track and this is being done not out of a sense of duty but because grant money is being paid. Coillte does nothing and is depleting its staff. I was up in the Ballyhoura area recently and I met a man with a chainsaw. I asked who he was and he told me he was from UCG. When I asked him what he was doing with a chainsaw he said he was cutting paths into the area. I asked him on what basis he was doing so and he replied that he was receiving grant aid to cut the paths. Coillte is getting rid of its staff and is getting grant aid to bring in staff to do this under the guise of research. Coillte does very little without getting some kind of grant aid. Fáilte Ireland is contributing a lot of money towards those tracks and walks. We think Coillte is not doing it out of a sense of responsibility.
Regarding certification, under the grant scheme does a departmental official visit and approve the fencing and planting? Normally this is done again after the second or third year and the final tranche of the grant is not paid until the fourth year. Mr. Ryan made the point that to replant clear fell does not increase the estate, nor does it guarantee that the replanting will be done to the same quality unless certified. If Coillte, as a semi-State company at arm's length from the State, is charged with public lands and its core business is timber production, does it not have a role so that self-certification is not permitted? It would be far better if those trained in the Department of Agriculture, Fisheries and Food continue to monitor the quality of the plantations as they grow so that quality is maintained to a standard where it will be commercially viable afterwards.
I refer to the structure of Coillte. It is between two stools and we do not know whether it is public or private. Is it a semi-State, semi-private company operating on public lands? As I understand it, the land is still publicly owned. Therein lies the problem.
Mr. Christy Nolan
There has been a change of ethos and Coillte is trying to appeal to farmers by stating that it is a State-owned company, not semi-State or semi-private, operating in forestry and land-based industry.
For clarification, Coillte Teoranta is a private limited company which operates in forestry and related activities on a commercial basis. The company is co-owned by the Ministers for Finance and Agriculture, Fisheries and Food. It was established under the Forestry Act 1998 which sets out its objectives and duties.
Mr. Christy Nolan
No, the European Court of Justice ruled that it is a State company. I have the ruling with me. It was clearly stated that——
It is a State company.
Mr. Christy Nolan
Yes.
It is co-owned by the Minister of the day.
Notwithstanding that fact, if a State company or State lands are involved, the State has a duty to ensure the company charged with managing that land and product, which is timber, does it properly.
Mr. Christy Nolan
Yes.
It is about inspection and ongoing monitoring throughout the lifetime of the plantation by the Department. We give out enough about farm inspections. One cannot move in conventional farming without having to comply with an EU rule, inspection or scheme. Surely a company that is profitable and can go in a couple of different directions with commercial timber, by-products and walks that have a commercial aspect must have accountability.
We should discuss the decision later with the Minister. It is not a matter for the witnesses. It is for the Minister to answer on the role of inspection. The witnesses are here to look after their own interests.
Mr. Christy Nolan
The only concern we have, which I have voiced through the years, is the close relationship between the forest service and Coillte. They both came from the forest service which was split in two. They are great colleagues against which it is very difficult to rule. This probably allowed a certain flexibility. A dedicated body overseeing forestry in the future is the only way it will work.
The discussion with Deputy Sherlock on dumping was interesting. The stealing of timber was mentioned in passing. What is the scale of theft?
Mr. Christy Nolan
It is very high and is a major problem. We have met Coillte to discuss this on several occasions and for years we found it very difficult. There were cases where we could prove timber was taken without proper documentation. We took it up with Coillte and it tried everything to state this was not the case. Eventually, we brought in an independent consultant. Coillte's auditors told us the loads were fully accounted for in their records. However, when we checked they were nowhere on their computers. They then sent a letter stating they were fully accounted for but the next line stated they were removed without proper authorisation, after we had the matter checked out by an independent person. They seem to have a tolerance for this because they get timber hauled very cheaply on a tender basis. They seem to turn a blind eye to a share of it because the State does not lose much money. The contractor loses all the money because he or she has the cost of the machinery and staff. The value of the timber pulp to Coillte would be only €1 so it is not a big loss. It is not a big priority to root it out.
Excuse my ignorance but when Mr. Nolan speaks about stealing timber he does not mean someone driving up and taking off with one log.
Mr. Christy Nolan
No.
Does he mean full loads being deliberately removed?
Mr. Christy Nolan
Lorry loads of it. There is no check on people coming out of the forest. For at least five years, nobody checked whether the right procedures were in place. It is all very clear but to this day it has not been solved.
I thank Mr. Nolan and Mr. Ryan for their presentations and I think we gave them a fair hearing. Their proposals will be discussed further at our next meeting, which is our normal procedure, and we will decide whether to invite Coillte and the Minister to meet us again. From what members have said today, it appears we will be going that route.
Mr. Christy Nolan
We thank the Chairman and members of the committee. If our discussions help forestry in the future, we will have had a positive outcome.