I remind members of the usual citation. Mobile phones should be switched off, discarded or thrown away.
Habitats Directive: Discussion.
They could be thrown at you.
That is possible. It is for the sake of everybody's sanity. We have apologies from a number of members. They are Senators Paschal Donohoe and Feargal Quinn and Deputy Lucinda Creighton. The next item is a discussion with representative landowners in the All Saints Bog and Esker special area of conservation, SAC, in County Offaly regarding implementation of the habitats directive. The witnesses are Mr. Séan Canny, Mr. Liam Byrne, Mr. John Quinlan and Mr. Cronan Kelly. I ask Mr. Canny to make the presentation — the usual process is to have a presentation of ten or 15 minutes followed by questions and answers. The committee will then discuss the matter privately and will be in correspondence in the event of further developments.
I should also mention that as this meeting is in public, members of the committee have privilege but visiting speakers do not. I remind committee members not to identify public servants, one way or other, in a way that would reflect on their position or character.
Mr. Seán Canny
I thank members of the committee for affording us this opportunity to present our case today regarding All Saints Bog and its purchase by the National Parks and Wildlife Service. I am the consultant valuer with the farmer group and I have set out the case in the document distributed to members. It is a brief document but if I set out the case in its totality there would probably be 200 pages.
The first page sets out the 13 farmers currently in the group — two have pulled out since we started negotiations. In spring 2006 I was engaged to prepare and submit a valuation report on the boglands of the 15 owners included in the proposed SAC at All Saints Bog. The 2006 valuation report indicated——
I apologise for cutting across the witness, but do the witnesses wish to have the bogs taken over or do they want to continue harvesting the bogs?
Mr. Seán Canny
The people have entered into negotiations to sell the bogs.
I thank the witness and apologise for interrupting.
Mr. Seán Canny
The problem relates to price. The 2006 valuation report indicated that following research on comparative site values and the achievable returns available for the exploitation of the peat resource on this property in the absence of any designation, the bogland areas of this SAC would have a value in the region of €10,000 per acre.
On the progress of the claim to date, on 26 July 2006 there was a preliminary meeting between Eamonn Brennan, the then assistant director of the National Parks and Wildlife Service, NPWS, and Seán Canny, the valuer acting for the 15 bog owners. Mr. Brennan indicated that the NPWS was anxious to purchase the full freehold title to all the lands in this SAC because of the site's uniqueness and conservation status. Seán Canning indicated that the landowners he represented were prepared to enter into negotiations with the NPWS with regard to a sale of the bog areas but were not prepared to accept the compensation terms of the cessation of turf cutting compensation scheme agreed between the NPWS and the IFA in 2004, which was backdated to 1999.
The reasons for the refusal were as follows. This site was an exceptionally valuable bog from its moss and fuel peat potential. The landowners were losing the use of sizable areas of bogland, ranging from approximately four acres to over 30 acres, adjacent to their farms due to the designation. These areas were far greater than envisaged in the NPWS and IFA agreement. A landowner who is not part of this group had already received much higher compensation than that detailed in the agreement, although a substantial area of peat on the bog had been removed from the site. In addition, the cessation of turf cutting compensation scheme only related to purchase of turf banks suitable for domestic turf cutting and did not take into account the suitability of the bog for other purposes.
I have also set out the terms of the package in the document. The provision of an alternative bog area for use by the displaced landowners for domestic turf production was also raised by Mr. Canny. Mr. Brennan indicated that the NPWS could not provide alternative turbary as part of the compensation but it owned some surplus undesignated bog adjacent to this site which it intended to dispose of, and the group could make an offer for part of this area.
The issue of compensation was briefly discussed and Mr. Brennan indicated that the NPWS would engage OPW valuers to assess the valuation report and subsequently to negotiate a compensation figure with the landowners' value. The NPWS was also informed that seven of the bog owners did not receive notification of the inclusion of their lands on the candidate list pursuant to regulation 4(2) of the European Communities (Natural Habitats) Regulations 1997, despite their lands being registered in the Land Registry. Furthermore, no conservation officer made contact with them.
Two separate notifications are required by the 1997 regulations. Under regulation 4(2), the Minister shall notify every owner and occupier of the proposal to include their land in the candidate list and to transmit this list to the commission. A further notification is required under regulation 8, which requires the Minister, as soon as practicable after he has received notification from the commission that the site is being adopted, to notify every owner and occupier within the site that the site has been so adopted. None of the owners received the required second notification under regulation 8.
An alternative notification procedure is set out in Article 4(2)(b), where the address of any person to whom subparagraph (a) of this paragraph relates cannot be found after reasonable inquiry. In such circumstances, notices and maps shall be displayed in a conspicuous place, which includes Garda stations, local authority offices, local offices of the Departments of Social and Family Affairs and Agriculture, Fisheries and Food, and offices of Teagasc, which are located within or contiguous to the site, or within the vicinity of or closest to the site. Advertisements shall be broadcast on at least one radio station in the area of the site concerned and printed in at least one newspaper circulating in the area.
However, the alternative procedure only kicks in when the address of the owner or occupier cannot be found after reasonable inquiry. This alternative notification procedure should not have been required in this instance as these owners' lands were registered in the Land Registry and a search of the Land Registry is deemed to be the most reasonable inquiry relating to land ownership and the first place one would search.
It is worth noting that one of the seven owners not initially notified eventually received formal notification of the proposed SAC in 2008, almost four years after the European Commission adopted a list of sites of community importance which included All Saints Bog and Esker. It was Commission decision 2004/813/EC of 7 December 2004. In 2006 this owner became aware that all her lands were included in the proposed SAC. In August 2006 and January 2007, the NPWS was informed that this landowner objected to her grazing lands being included in the SAC but the NPWS refused to consider the objection on the basis that it was outside the time limit for raising objections to the designation. This landowner is most aggrieved as she had not received notification of the proposed designation until 2008 but in 2006 and 2007 was refused an opportunity to object to the inclusion of all her lands in the SAC.
On 28 August 2006 Mr. Seán Canny met Mr. Brennan and Mr. Eamon Coyle, the OPW valuer, and presented his valuation to them. Mr. Brennan indicated that he was to be transferred to another Department and any further communication should be addressed to his successor, Mr. William Culbert. Negotiations were initially with Mr. Eamon Coyle, the OPW valuer acting for the NPWS. In October 2006 there was a further meeting with Mr. Coyle with a follow-up letter seeking clarification of a number of issues. Negotiations were extremely tedious and slow.
On 12 December 2006 there was a meeting at the offices of the OPW at 51 St. Stephen's Green, chaired by Mr. Tom Parlon, then Minister of State at the Department of Finance. A National Parks and Wildlife Service, NPWS, team of William Culbert, Marguerite Ryan and Eamon Coyle was in attendance. The landowner group delegation included myself, John Quinlan, Liam Byrne and Cronan Kelly, who are here with me today. The issue of designation and valuation dates was discussed, but there was no agreement on the matter. As far as the landowner group was concerned, it was argued that the designation and valuation date should be the date when the Minister for the Environment, Heritage and Local Government made the designation order under regulation 9(1) of the European Communities (Natural Habitats) Regulations 1997.
The procedure for designation is set out in the European Communities (Natural Habitats) Regulations 1997. Under regulation 3(1), the Minister for the Environment, Heritage and Local Government must prepare a list of sites for the purpose of identifying sites of community importance for transposition to the European Commission. In accordance with the habitats directive, the Commission then, in agreement with each member state, produces a draft list of candidate sites based on the member states' lists. When the Commission has adopted the lists of sites under regulation 4(2) of the directive then, under regulation 9(1) of the 1997 regulations, the Minister shall, not later than six years from the date of adoption by the Commission, designate the site as an SAC.
Accordingly, the date of designation does not occur until the Minister formally makes a designation order under regulation 9(1). I, indicated I had requested this date from the National Parks and Wildlife Service, but up to the date of this meeting no response has been forthcoming. The farmer group accepted that the site was provisionally protected from the date the Minister for the Environment, Heritage and Local Government prepared a list of sites for the purpose of identifying sites of community importance for transposition to the Commission under regulation 3. However, this action was not the final designation, as regulations 4, 5, 8 and 9 form part of the designation procedure subsequent to regulation 3. In particular, regulation 5 allows a person on whom a notice is served under regulation 4(2), or any other person claiming to have or to be entitled to an interest in or over the land comprising the site or part thereof, to object to the Minister to the inclusion of a site on the candidate list of European sites.
William Culbert, assistant director of the NPWS, stated that the lands were protected when the proposed list was sent to Europe and not when the Minister makes the formal order designating the site as an SAC under regulation 9(1). He further stated that the Minister had not yet made the order designating the site as an SAC under regulation 9(1). He indicated that a notice in the press in March 1997 was proof of the protection, and referred to Article 14(1) of the regulation to support his case. On the basis of Article 14(1), both William Culbert and Eamon Coyle inferred that the valuation date occurs when the site becomes protected, that is when it is put on a list of candidate sites. There is no reference in the 1997 regulations relating to a valuation date where a purchase of the freehold is contemplated.
Regulation 14 (1) deals with restrictions on carrying out operations or activities. The wording provides:
A person shall not carry out, cause to be carried out or continue to carry out, on any land included in a special area of conservation or a site placed on a list in accordance with Chapter I of the Part an operation or activity mentioned in a notice issued under Regulation 4(2) ... unless certain conditions specified in that Regulation are fulfilled.
The National Parks and Wildlife Service appears to use this regulation as a basis for arguing that the valuation date should be the date from when the site becomes protected, namely, when included on the candidate list of sites. However, there is no mention in the provision of a valuation date or compensation. The regulation goes further than the provisions of Article 4(5) of the habitats directive, which provides for protection for special areas of conservation, SACs, under Articles 6(2), (3) and (4) of the directive, from the date of adoption as a site of community importance. The list sent to the Commission is a list of sites for the purpose of identifying sites of community importance. The Commission then, in agreement with each member state, produces a draft list of sites of community importance, based on the member states' lists. The Commission then must adopt the list of sites under Article 4(2) of the directive. It is obviously open to the Commission to reject a site included on a member state's list. Accordingly, any assessment of the valuation date should not be considered until after the Commission's approval, at the earliest, as up until that date a site has not been adopted as an SAC, and thus it would be premature.
Mr. Culbert's assertion regarding the designation date and, ultimately, the valuation date was not accepted by me. I asserted that the valuation date should be the current date as the lands were not yet formally designated as an SAC and as there is no provision in the 1997 regulations relating to the freehold purchase of the lands by the NPWS or a valuation date for this purpose. The issue of lack of notification was also discussed, but again William Culbert referred to the notice in the press as being adequate. The seven owners who did not receive notification of the proposed designation did not become aware of the details of the proposed designation until much later, when their right to object under regulation 5 had long expired. These landowners were thereby prejudiced in being deprived of their right under regulation 5 of the European Communities (Natural Habitats) Regulations 1997.
The issue of compensation was also discussed. Eamonn Coyle indicated that his valuation was at 1997 prices and indicated an offer of from €750 to €900 per acre, a rate much lower than the rates agreed in 2004 between the NPWS and the Irish Farmers Association, which were backdated to 1999. This derisory offer astounded and aggrieved the landowners present and was rejected without discussion. William Culbert then indicated that the rates set out in the IFA-NPWS agreement were available, but he would not entertain any reference to voluntary arbitration under this agreement. He also suggested that if the landowners did not accept this or Mr. Coyle's offer, the only course left open was to go to arbitration under the regulations and he indicated that each landowner would have to apply to have their individual case heard by the official arbitrator. This stance appears to be at odds with paragraphs 14 and 15 of the IFA-NPWS agreement on the implementation of the habitats regulations.
Paragraph 14 of this agreement states: "The Department agrees that a fair and proper level of compensation shall be paid for any costs or losses of income or value which result from restrictions on farming or other existing activities". In paragraph 15 of the agreement, it is stated that standard rates of compensation will be agreed where possible, but an individual who does not wish to accept these rates has the option of obtaining individually costed compensation for his own farm. It is further provided that informal arbitration will be used, where possible, to resolve disagreements.
On the specific issue of turf cutting, it is stated in paragraph 18, that where a farmer or landowner disputes the standard compensation rates, recourse to arbitration will be available. Provision is also made for capital compensation in paragraph 19. Such compensation is payable to the extent that it arises from restrictions on farming or another existing land use, and to the extent that it is not covered by ongoing compensation for income loss or extra costs. It is stated: "The compensation payable will be the difference between the pre-designation value and the post designation value". Again, recourse may be had to arbitration where there is a disagreement on the amount of this compensation.
The wording in paragraph 19 clearly refers to pre and post-designation values. As previously stated, the designation date is when a site is designated by the Minister, after approval of the list by the Commission. Furthermore, paragraph 14, dealing with compensation, states that the Department agrees to pay "Where designations are proceeding ...". This certainly indicates that the valuation date should be the designation date and not the date on which the site became part of the proposed list of sites being sent to Europe. Therefore, in these circumstances it is unfair and in contravention of the IFA agreement for the NPWS to suggest that the valuation-designation date is the date of inclusion on the candidate list.
This meeting was concluded without agreement on any issue. The fact that the NPWS was not prepared to take a conciliatory and compromising approach at this meeting seriously damaged any goodwill on the part of the farmer group side, which is the major stakeholder in the negotiations.
During the period from January to April 2007, negotiations commenced directly with William Culbert, assistant director of the National Parks and Wildlife Service. At this stage, following several meetings, the NPWS had made an offer of €5,100 per acre and had also conceded to sell approximately 50 acres of undesignated bog south of the designated lands to the claimants. At the end of April, Mr Culbert was transferred within the Department and Mr. James O'Connell succeeded him as assistant director of the NPWS. During this period, negotiations continued with Mr. O'Connell and towards the end of April, Ms Oonagh Buckley, principal officer in the planning section of the Department of the Environment, Heritage and Local Government and director of the NPWS, was approached to try and expedite matters.
At a meeting I had with Ms Oonagh Buckley and James O'Connell on 21 May 2007, a final offer of €5,500 per acre for the 14 landowners' freehold interest in All Saints Bog was made, together with an offer of 20.797 hectares, approximately 51 acres, of alternative bog to be purchased by the tenants as a group in one transaction for the sum of €154,000. This offer was conditional on it being accepted by the landowners by Friday of that week, 25 May 2007, or otherwise the offer would revert to the previous offer figure of €5,100 per acre for unencumbered freehold title and no alternative bog would be available for purchase by the landowners.
This offer was put to the tenants on 23 May 2007 and accepted by them as a group. On 24 May 2007, I had a further meeting with James O'Connell at which I confirmed that the NPWS offer of the 21 May 2007 was acceptable to the tenants. Mr. O'Connell indicated that the NPWS would pay the valuers' fees and that the legal fees re the transfer of the bog would be paid as set out in the 2004 IFA agreement.
Will we be able to hear from the landowners?
No. The Deputy has the document in front of her. Committee members will be asked to raise the issues themselves. Most members are familiar with the subject matter.
We are getting the key point.
Yes, we are getting the key point. That is why I want to remind——
Mr. Seán Canny
At my meeting with Mr. James O'Connell he accepted that the deal was on. I waited to get confirmation from Mr. O'Connell in writing on this matter. I had another meeting with him on 13 July 2007 on a few outstanding issues and I was assured I would get a response fairly quickly in writing. Nevertheless the matter continued throughout the summer and into the autumn. When I contacted Mr. O'Connell in September 2007 it appeared that, according to him, the case was reviewed at higher level in the Department and it would not abide by the earlier agreement entered into in May 2007.
On 22 October 2007 I received a letter from Mr. James O'Connell which reads:
I refer to the discussions which have taken place regarding the possible purchase of bogland at All Saints' Bog and Esker, Co. Offaly, and the rates of compensation to be paid to the landowners concerned. [I would have issue with the word "discussions". Negotiation and settlement proposals were agreed.]
As you are aware, the informal offer of compensation rates of €5,500 per acre has been reviewed in the context of developing policy on financial and other arrangements which are under consideration for compensating landowners of SAC bogs for ending all turf-cutting for domestic purposes in 2008. [There is no reference to the alternative arrangement either for the 51 acres for €154,000.]
This review came to the conclusion that, pending the outcome of this consideration of more generalised arrangements for ending turf cutting in SACs, no payment of rates above those at present available under the cessation of turf cutting scheme can be made unless awarded under the arbitration process provided for in the 2004 agreement with farming organisations. [At an earlier meeting we were refused a voluntary arbitration.]
Accordingly, it has been determined that, as a matter of policy, no offer can be made for purchase which exceeds the bog compensation scheme terms. The option of going to formal arbitration is open to your clients. I would emphasise that the Department is still interested in acquiring the turf-cutting rights of the land in question under the Cessation of Turf Cutting Scheme.
On behalf of the Department, I would like to apologise for the fact that this policy development came so late in the negotiating process. The negotiations were, however, conducted in good faith by the relevant officials in the Department.
We are now being virtually pushed into a formal arbitration which I do not really understand because there is no provision for formal arbitration in the regulations where an outright purchase of the lands is being considered. We were denied voluntary arbitration in December 2006. The farmer group was appalled at this having waited five months in the expectation that the deal would be confirmed, instead it was told it was not on. In all my experience of dealing with public authorities and that particular Department I had never come across that approach. I have worked for 40 years in this business. It is extremely strange that such an approach was adopted at this stage.
Thank you, Mr. Canny.
Mr. Seán Canny
In the last page of my presentation, I said there were compelling reasons for special consideration to be afforded to the claimants.
We will refer to that now. Before speaking I advise members to look at the bullet points on page 4 of Mr. Canny's presentation, to which he referred? Is that correct?
I welcome the delegation.
I call Deputy Paul Connaughton.
They are all waiting for the next delegation. They want to continue to use their turbary rights.
We shall continue.
I thank Mr. Canny for a very detailed presentation which is most helpful in assisting us to understand the background to this case. It was a pity we did not have a copy beforehand as we would be better versed to ask appropriate questions. Nonetheless, we will do the best we can. What amount of land is at stake for the 14 landowners concerned?
Mr. Seán Canny
Some 132 acres.
In return the landowners hoped to get access to about 50 acres.
Mr. Seán Canny
Yes. In fact, we would have settled for 20 acres. However, in the negotiation procedure the field staff in the National Parks and Wildlife Service said it had 50 acres and asked us not to leave it with 20 acres or 30 acres so we agreed to buy the 50 acres.
That this number of acres of bogland was involved in the discussion would indicate there was more than a discussion, there was negotiation.
Mr. Seán Canny
That is a good question.
It is not that the group had something to sell and there was a prospective buyer and the group was tossing around over money. The fact that the other side put forward a parcel of land would seem to indicate that there was a more detailed level of negotiation than that contained in the letters read out by Mr. Canny.
Mr. Seán Canny
By all means. There were several meetings in regard to that issue. A deal was done.
A deal was done. Am I right in saying that Mr. Canny has nothing in writing?
Mr. John Quinlan
In regard to the 51 acres, we had maps of it for each individual. The National Parks and Wildlife Service sent its local representatives to show us which part each one would get.
The group had got to the stage of apportioning——
Mr. John Quinlan
Exactly.
Did it provide each individual owner with a marked map?
Mr. John Quinlan
It provided a general marked map but we were to divide it out among ourselves.
Mr. Seán Canny
The map was of the lands being purchased by the tenants.
So it did provide documentation.
Mr. Seán Canny
Yes. At the last meeting I had with the National Parks and Wildlife Service on 25 May I gave it a breakdown of the values I had negotiated for each lot so that it would know exactly what each farmer was to get, based on——
The group had got beyond arguing about money and was down to apportioning the lands. That would seem to suggest the negotiations had gone beyond agreement in terms of money. It was down to who got what square or what parcel.
Mr. John Quinlan
The document shows all that. We agreed on, say, a Monday that we would come back to the landowners. Mr. Seán Canny was to go back to them on the Friday to say whether he accepted the deal. Mr. Canny went back to them and accepted the deal. We then got into the details of how we would buy it and so on. It was a very detailed process.
Something is missing here. Can the delegates help us? Obviously they have contacts and are talking to these people. Obviously something went wrong.
Mr. Seán Canny
It certainly did not go wrong on our end.
May I ask a few questions?
Yes. I will take a bunch of questions. The Deputy may go ahead.
A couple of people have pulled out of the deal. Do the witnesses have anything to say on that or is there any relevant information?
Mr. Seán Canny
Fear and frustration that the thing was——
Perhaps we can note the question and then the delegation can respond later. We will take a raft of questions together.
I welcome these good people. I thank them for coming and their detailed documentation will be of assistance to us in evaluating the situation given the current crisis which some of us have to face in dealing with this situation. Like Deputy Dooley I would like to know why Nos. 6 and 7 on the programme withdrew. Is the entire bog in the great faithful county of Offaly or does some of it stretch into the maroon and white of Galway? I note that Esker is mentioned.
Mr. Seán Canny
It is not our Esker.
Excellent. I worked in the same business as Mr. Canny but I might not have been as well qualified in a previous life. Our word is our bond if we agree a deal. My interpretation of what we have heard today is this has been very professionally negotiated with very willing and decent, positive people. A deal is a deal. Irrespective of the outcome in the future or what has been transacted in the past, the State is duty bound to execute the deal as agreed and this committee should recommend same.
The delegation is most welcome. I am at a disadvantage in that I am not a member of this committee——
The Deputy is welcome nevertheless.
I was not aware of this case but in a half an hour's time I will be well aware of another discussion happening in another place because I happen to be a bog owner and a bog cutter. A deal was made in good faith. Because the money ran out is no reason for not honouring this deal and they have decided to go down the burrow, as we say. In the circumstances, any normal person listening to Mr. Canny's view would believe that a proper deal made in good faith was actually broken. He has everything well documented.
I do not know if it is within the remit of this committee but in my view the people who should be sitting here at the next meeting should be those who entered into that contract and they should face serious questioning from the committee. I agree with my colleague, Deputy Treacy, that the deal should continue and should be honoured. There is very little this committee can do unless there is a better reason for breaking the contract than we are led to believe. I have been through this business of evaluation and turf banks and I could be here until 5 p.m. arguing that case. However, in this case a deal was made at a particular rate. If I go down to the fair to buy a cow and I pay a certain amount for that animal, there is not much point when someone tells me in the evening that I paid too much for her and that I can give the cow back. That was never done and cannot be done in this business. It is against that background I suggest that a deal was done and the high-ranking officials in that particular wildlife section should be sitting here some day and we should be given the opportunity to question them.
For the benefit of this meeting, this would not be the first time that this particular Department had reneged. I come from east Galway and I know several people who sold bog in the ordinary way and they are now three or four years waiting for their money. It is against that background that there should be close scrutiny and investigation of that Department.
Like other speakers I am concerned at developments as presented to us today. I have a question about Mr. O'Connell. What was his authority to speak to the delegation? This is an important question because he was assistant director and the delegation entered into negotiations with him in good faith. Even with the deal as presented to the delegates, they had four days in which to make their minds up. It would appear they had the support of the 13 landowners who were in agreement that this deal should go ahead and the delegates conveyed this support to Mr. O'Connell. For some reason he found himself unable to deliver on the agreement reached. Is it the belief of the delegation that he was not afraid of going ahead with the deal itself but it would have a knock-on effect and implications for other transactions and this created the difficulty? He agreed to pay the delegates something and this would in itself create a certain expectation that further deals would be looking for a similar type of arrangement. Is this the nub of the issue?
Mr. Seán Canny
It is difficult to gauge. To answer the Deputy's first question about Mr. O'Connell's authority, at no stage was I ever informed that Mr. O'Connell and his senior, Oonagh Buckley, the director, did not have authority to approve the deal. I would assume that people at that level would have the authority. I have past experience of dealing with those people. I did many a deal during my life and in my experience nobody ever went back on a concluded deal. I deal with and for local authorities and on behalf of farmers. I am 40 years working in land acquisition so I am pretty well versed. I have been in Bord na Móna for 30 years and I know exactly what goes on. I find it astounding that somebody in a State organisation would go back on their word.
I welcome the delegates and they have made a very interesting case. I have a few questions. In the letters written by Mr. O'Hagan and others, they admit to having made an informal offer but not a formal offer, that no contract exists and that no agreement was made in writing. These letters contain the view of the Chief State Solicitor's office. The correspondence invites the delegation to go to arbitration or else this would be a matter for a compulsory purchase order. The documentation from the Office of the Chief State Solicitor seems to make it implicit that agreement to go to arbitration would result in a lower price than is on the table now. It had reached the review stage, they were not in a position to proceed and they would go to arbitration on the matter. What is the problem with going to arbitration, in the view of the delegation? Is it implicit that arbitration must automatically result in a lesser deal?
Mr. Seán Canny
Our legal advice is there is no provision for arbitration where a sale is taking place. There is no statutory provision for that.
I refer to the letter of 15 October from the Office of the Chief State Solicitor which states "I note you confirm that no contract exists for the sale of land between your clients and the Minister." Has this sale been confirmed?
Mr. Seán Canny
There was initial correspondence between the solicitors. They may have confirmed it but I think it was on the basis that we had entered into a deal with these people.
If there is confirmation that no contract exists, that is fairly blunt.
I would like to comment in this regard.
Contracts take different forms.
This is the problem.
It does not have to be in writing. They are saying no contract exists in any form.
Mr. Seán Canny
I think that was in response to an earlier letter from the Chief State Solicitor's office, indicating that it was not in writing. I am pretty sure of this.
It just says that no contract exists. In a separate letter it states that in writing but in this letter it states, "I note you confirm that no contract exists for the sale of land between your clients and the Minister." This is the last item in the document from Mr. O'Hagan. It refers to the Minister for Education and Science but I do not know what he has to do with it. I would like confirmation on whether there was a contract. I refer to the last letter in the booklet, from Mr. David O'Hagan of the Office of the Chief State Solicitor to John Reedy, solicitors. It refers to a letter of 28 September, though the letter is not in the documentation.
The letter referred to is dated 26 September. It is from John Reedy and is on the third last page of the submission. It reads:
We acknowledge receipt of your letter of 4 July 2008.
We have to say that our clients have been treated in an appalling fashion by the Department.
That treatment and the content and tone of your letter has very much destroyed the previous goodwill shown by the landowners and their patience while negotiations took place between their representative Mr. Seán Canning and Department personnel over a lengthy period.
At this stage we have to say that clearly it appears that the Department engaged in negotiations but that there was never an intention to deliver on the agreement reached at the end of those negotiations.
As a result of the Department not honouring the agreement reached, the landlords simply have no trust in dealing with the Department.
It is intolerable that senior Department personnel allowed negotiations to proceed with Mr. Canny which culminated in an agreement being reached but that the Department is now seeking to avoid implementing the agreement, falling back on a legal tenet.
There is nothing in that letter, unless a page is missing.
I do not think a page is missing. We have read the documentation and listened to Mr. Canny's presentation, which was highly professional and extremely detailed. The Office of the Chief State Solicitor would not come into this situation until such time as a document was exchanged between Mr. Canny, on behalf of his clients, and the NPWS and a full and final agreement was reached, which was the case. Mr. Canny responded, not just orally but with documents showing the maps, the valuations and the compensation due to these men. There is no doubt that the oral agreement transcended to documentation and the Office of the Chief State Solicitor could not have looked for a contract because none was available. There was a bona fide expectation that an agreement was reached in good faith and discharged by negotiation with a professional person on behalf of a group of willing vendors but it has now been negated. It would be outrageous for the State to fail to honour what had been agreed. We have no option but to recommend that this matter be concluded immediately and without further procrastination.
There is nothing in the letter, even though the Office of the Chief State Solicitor confirms the non-existence of a contract. Maybe we are talking about a different letter.
The letter does not reflect what was in Mr. Canny's letter and seems to have interpreted more than was there. I agree with Deputy Treacy that the extended period of negotiation led to the belief that a contract would emerge. A line was then drawn, bluntly, when the process was declared over, though it was said that another process could begin. It would be no harm for this committee to recommend that negotiations, having stopped abruptly and unilaterally, be continued until a conclusion is reached, as both sides intended and expected.
I have a couple of other questions. Is there any precedent as regards the point at which negotiations terminated, the degree to which they had progressed prior to termination, or the grounds on which they were terminated? In particular, has there been any precedent for the extent to which verbal or written agreement was reached prior to an alleged agreement being implemented?
Mr. Canny suggested other lands on an adjoining site were purchased in 2002 for €8,500 per acre.
In that same area?
Yes.
Then the case is closed.
That was for 120 acres. Is the All Saints Bog a site of international importance?
Mr. Cronan Kelly
It is and it is described as such in some of the parks and wildlife literature.
Mr. Liam Byrne
We always put it forward as a special area.
Reference was made in the presentation to an agreement that the date of the designation order would be the date of the agreement in respect of the price.
Mr. Seán Canny
That is our contention. There is no provision in the legislation for fixing a date. During negotiations we take it that it takes place on the same day.
Is Mr. Canny aware of any other negotiations where the point at which the price was decided was an issue?
Mr. Seán Canny
I am not aware of any with respect to parks and wildlife.When one sits down to negotiate one hopes to come to a satisfactory settlement and such issues are very often not specified.
Was he given any indication by any of the members of the negotiating team with which he dealt as to any limitation on the extent to which they could deal with him in respect of the issue concerned?
Mr. Seán Canny
No. There was no indication that senior approval was needed. I always assume that a person with whom I am negotiating is trying to get the best deal. I came up with a valuation of €10,000 per acre, which I could stand over even at arbitration, but when we raised it to €5,500 we felt it was the best deal we could get. On that basis I recommended to them that they settle. The big bone of contention was the alternative bog but these people live in a fairly isolated community and the bog which adjoined virtually all their holdings was taken from them. The NPWS had purchased State bog and had facilitated other local people with alternative turbary. On that basis, it persisted in refusing to deal with us and insisted we buy the bog from it. The bog was rather remote, backward and pretty wet but, eventually, we agreed to buy it as a block from the NPWS for €154,000.
Mr. Canny agreed to take the total amount available rather than what he needed.
Mr. Seán Canny
Exactly.
So Mr. Canny was more than generous.
What is the gut feeling on this? Was it the implications of the knock-on effect of paying that price to the 13 landowners that was the difficulty, rather than the deal itself?
Mr. Seán Canny
Part of the feeling was that this would create precedent, even though I had tried to get across to them that this site is far more unique and far different to a fellow cutting a half acre of bog somewhere that is remote from his home and everywhere else. There was a moss peat producer on this site. I had estimated that on these farmers' lands there was the equivalent of more than 500,000 tonnes of moss peat, which would, if sold on the open market, yield a profit of approximately €2 million to these people. In fact, even taking into account a net discount, it would certainly yield more than €1 million. We were prepared to settle for much less. On top of that, fuel peat of approximately 100,000 tonnes would be available thereafter.
It was a very valuable resource and from my knowledge of the current marketplace, there is serious demand for peat land, both for moss peat production and for fuel peat, because virtually every reasonable site in the country has been designated either an SAC or an NHA.
I propose that we invite the NPWS to a meeting as quickly as possible. We would then be inclined to make a judgment based on what the delegates have said today. We have every sympathy with them but, to be fair, it is important that we listen to the other side. The way the delegates were treated sounds most unreasonable.
Mr. John Quinlan
Dúchas and the NPWS have always acknowledged that this is a unique bog which is well known internationally. This is why we availed of the opportunity to negotiate for it on our own behalf as a group.
What is the significance of the name?
Mr. John Quinlan
It was a little churchyard.
I would never have associated Offaly with saints.
Mr. John Quinlan
It is an odd one.
I do not know this bog specifically but I know the area generally, and know these people look across the River Shannon at my county and my constituency. As far as I know, there are four values to this property: its real value, its paper value, its economic value and its purchase value. If one was to pick any county where one could get these values fairly exact, it would be County Offaly, because there are many eminent bogs there, with Clara having one of the most important bogs in the world. Bord na Móna is the major semi-State player in the county, and Mr. Canny in particular is a long-recognised specialist, so they could tell the economic value of this situation. If I or any of my colleagues were called in to do a valuation, we would give the paper value. At the end of the day, however, there is the purchase value — the value which a willing purchaser is prepared to pay.
There were willing collaborators on both sides in this case and there was a willing professional in the middle, who negotiated with the State on behalf of both. We have reached a finale and it is outrageous that the matter is not concluded. I propose the committee would recommend that the matter be concluded, the contract be signed and these people be paid.
I second that.
I do not know whether the delegates can add anything further to what they have said.
I have a final question. Is there a danger that third party interference distorted this?
Mr. Seán Canny
I am not aware of it. There may well be. A committee member asked why the two people——
I asked that question. I cannot see why two would pull out.
Mr. Seán Canny
One of them pulled out, and there would be a connection with the IFA in that instance. I do not really know why that party pulled out but I believe it was that the person just did not want to part with the ownership of the bogland.
Mr. John Quinlan
This has been going on for ten years for the group trying to negotiate this. When we negotiated in May 2007 and told everyone we had a deal, everyone was happy. It then dragged on and everyone involved was looking for relocation bog. We lost credibility in October when we had no deal. The bottom line for many people was that we were going nowhere with this, and they might as well hold on to their bog and perhaps——
Were the two who withdrew within the totality of the original deal?
Mr. John Quinlan
Yes.
When did they withdraw?
Mr. John Quinlan
In October, roughly.
After the delegates considered the contract had been verbally agreed.
Mr. John Quinlan
Everyone thought they had a deal and everyone was happy. In October, we had to tell everyone there was no deal.
Mr. Seán Canny
It was out of sheer frustration. People were wondering when this would end and considered they had been wasting their time for the previous year and a half. I am not doing this job for nothing, so I assume those involved were concerned about costs. I had negotiated reasonable costs with the Department in that deal but the whole thing is now down the drain. To prepare this case and bring it to the stage I did involved me in approximately 75 man-days, which points to the extent of the work involved in researching ownership, undertaking a survey on the bog and undertaking a resource survey.
It is important that the landowners believe this rather than that we do.
We must conclude as the Order of Business will take place shortly. It has been agreed the relevant bodies will be brought before the committee and members will have an opportunity to raise questions using the documents presented by the witnesses as a means of generating questions. Is that satisfactory? I hope it is, as it is the best we can do.
Will the Chairman indicate when that meeting is likely to happen?
As soon as is practicable. If we leave it too long, the matter will become vague in the memory so we need to do it as quickly as possible. I thank the delegates for coming before the committee. I am anxious to get hold of the document to which Deputy Joe Costello referred, in which the delegates confirmed no contract exists for the sale of lands between their clients and the Minister for Education and Science. I do see where that admission is made, so I do not know what document is being referred to. It is an interesting question and I would like to see the document in which that inference is drawn. However, we will deal with that matter at another time.
I thank the delegates. We will be in touch with them in due course and will make the arrangements to proceed as indicated.
Mr. Seán Canny
I thank the Chairman and the committee.
The joint committee went into private session at 3.40 p.m. and adjourned at 3.55 p.m. until 11.30 a.m. on Wednesday, 25 November 2009.