Thank you. We welcome the opportunity to help brief the committee on the nitrates directive and our nitrates action programme. I have some scripted remarks which I will circulate.
By way of background, the nitrates directive was adopted in 1991 with the objective of reducing water pollution caused or induced by nitrates from agricultural sources. Since 1991 we have been implementing the directive in a number of ways, particularly through extensive monitoring of nitrate levels in waters and jointly with the Department of Agriculture and Food by the development and dissemination in 1996 of a code of good agricultural practice to protect waters from pollution by nitrates. However, judgments by the European Court of Justice in the interim have clarified that the directive required member states to establish a first action programme not later than 19 December 1995.
On foot of proceedings taken by the European Commission, the European Court of Justice delivered a judgment on 11 March 2004 that Ireland is non-compliant with the directive. The main reason was that Ireland has not fulfilled its obligations under the directive by reason of its failure to establish and implement an action programme to protect water quality against pollution by farming.
Following extensive consultations with the main farming organisations and other interested parties and the services of Mr. Denis Brosnan in a mediating role, a nitrates action programme was finalised and submitted to the European Commission on 22 October 2004. We subsequently submitted our case for a derogation from the limit for organic nitrogen spreading set out in the directive.
On 22 December 2004 the European Commission responded to our action programme by way of letter of formal notice, referred to as Article 228 letter. This indicated the Commission did not regard the action programme as being complete or compliant with the judgment of the European Court of Justice. The Commission view is that the action programme needs to be strengthened in certain respects, mainly because the prohibited periods for spreading fertiliser must be extended by two to four weeks; the minimum storage capacities for livestock manure must be increased; clear rules must be established for nutrient management of nitrogen by reference to crop needs; and the programme failed to create binding rules for farmers in that the regulations have yet to be made.
The letter of formal notice represents a further serious step in terms of infringement proceedings against Ireland. Given the adverse judgment by the European Court of Justice last March for non-compliance with the directive, it is essential for Ireland to respond adequately to the letter before the set deadline of 22 March this year.
On 26 January the Ministers for the Environment, Heritage and Local Government and Agriculture and Food met the four main farming organisations to brief them on the situation arising from the Commission's response. On 31 January, officials from the Department of the Environment, Heritage and Local Government met officials from the Commission. The discussions served to clarify and elaborate the terms of the Article 228 letter.
Regarding our derogation application, the Government gave a commitment in Sustaining Progress to seek the approval of the European Commission for an organic nitrogen limit of up to 250 kg. per hectare per annum. In keeping with this commitment an application for a derogation was submitted to the Commission on 12 November 2004. The Commission has, however, indicated that the derogation application will not be considered by it until there is a compliant action programme in place. Therefore we must first do the programme.
With regard to further legal proceedings which may follow, the Commission has stated that if agreement cannot be reached on the terms of Ireland's action programme, Ireland faces proceedings at the European Court of Justice, culminating in the imposition of daily fines plus the possibility of a financial lump sum fine. A decision to issue a reasoned opinion, which is the next step in the proceedings, could be taken as early as June 2005. In any decision to proceed to court, the Commission would decide what level of fine to seek. Depending on the outcome of a case against France which is currently before the court, the Commission could also look for the imposition of a substantial lump sum penalty.
There are other aspects of the issue and important negotiations with the Commission are pending. In June 2005 Ireland will be seeking revision of measures under the CAP rural development plan, which covers the rural environment protection scheme, REPS, compensatory allowances, forestry and the early retirement scheme. Negotiations on the next round of rural development funding, 2007-13, will also begin later this year and in all these negotiations Ireland will face severe difficulty if the nitrates issue is not resolved.
My colleague from the Department of Agriculture and Food will elaborate on these issues, particularly agricultural negotiations. We will be glad to answer any of the committee's questions.