As we have a quorum we will commence the meeting in public session. Apologies have been received from Deputy Maureen O'Sullivan, who is unfortunately unable to attend today's meeting. The draft minutes of the meeting of 6 February have been circulated to members. Are the minutes agreed? Agreed. Unless there are matters arising from the minutes, we will proceed with the main business.
Economic Recovery: Discussion with Chambers Ireland
I have added another Russian oil tycoon's name-----
We have correspondence on that and we will deal with it under that heading.
We are not talking about the same issue.
No, but there is correspondence on the matter.
I remind members, witnesses and those in the Gallery to ensure their mobile phones are switched off completely for the duration of the meeting as they cause interference to the recording equipment, even on silent mode. I will wait for the people in the Gallery to be seated before introducing the witnesses.
Before introducing witnesses from Chambers Ireland, I welcome the post-graduate students from University College, Cork, who are with us today. They are studying for a masters in business studies in international public policy and diplomacy of government. They are all welcome and it is good to see third level students coming to committee meetings in Leinster House.
We are here to discuss economic recovery, on which we are compiling a report. There will be a presentation from Chambers Ireland, and we are joined by Mr. Ian Talbot, chief executive; and Mr. Seán Murphy, deputy chief executive. I met Mr. Talbot and Mr. Murphy before in conjunction with Eurochambres. That was around October and I also met the secretary general of Eurochambres, Mr. Arnaldo Abruzzini, an Italian, on a short visit to Dublin.
Mr. Talbot and Mr. Murphy are here to offer the views of Chambers Ireland on trade promotion in the context of a series of meetings and other activities which the committee have been undertaking with regard to trade promotion and the role of the Department of Foreign Affairs and Trade in economic recovery. Chambers Ireland is well placed to communicate views on behalf of Irish business, as it represents Ireland's largest business network, with 60 member chambers, representing more than 13,000 businesses across the country. It is a significant number of businesses to represent.
The aim of the committee's examination is to prepare and publish a report on the strategy and response of the Department of Foreign Affairs and Trade to the economic crisis; the Department's newly recognised responsibilities in trade and promotion; the programme for Government in terms of trade promotion and economic and reputational recovery; and how well the Department is performing in these projects. I look forward to a good meeting here today with Chambers Ireland in that context.
Before I invite Mr. Talbot to make his presentation, I advise him and Mr. Murphy that they are protected by absolute privilege in respect of utterances at this committee meeting. However, if they are directed by the committee to cease making remarks on a particular matter and they continue to so do, they are entitled thereafter only to qualified privilege in respect of their remarks. They are directed that only comments and evidence in regard to the subject matter of this meeting are to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a Member of either House of the Oireachtas, a person outside the Houses or an official by name or in such a way as to make him or her identifiable.
I ask Mr. Talbot to commence and I thank the delegation for coming here this afternoon.
Mr. Ian Talbot
I thank the Chairman for his comprehensive introduction. I also welcome the students from Cork. We have a number of affiliated chambers in Cork. Last Monday we visited Cork and met Cork chamber board, Cobh and Harbour Chamber of Commerce and Mallow chamber so there is plenty of local interest.
I thank the Chairman for kindly outlining the first paragraph of my presentation and I shall move on. Chambers Ireland works to represent and promote Ireland and Irish businesses internationally through its membership of the International Chamber of Commerce, which is a global body, the World Chambers Federation, equally a global body, and Eurochambres, the European chambers of commerce network to which the Chairman referred earlier.
Chambers of commerce have always been and continue to be a vital link in the export chain for Irish companies. This is due to their internationally recognised role as trusted third parties in international trade. Members of our network assist Irish companies through their provision of trade missions and trade documentation services and the links they have built with chamber networks across the globe through out international connections. We feel that our involvement with international trade practice, from the local to the international level, makes Chambers Ireland uniquely placed to assist the Department of Foreign Affairs and Trade in assisting Ireland's recovery. We hope that today's presentation will provide the basis for continued dialogue and co-operation.
Looking at the Department's evolving role in Ireland's recovery, we have identified five areas in which we see potential for positive change: prioritising commercial diplomacy; prioritising targets; achieving a clear definition of roles and responsibilities; using the opportunity of St. Patrick's Day to support trade; and achieving cost savings and productivity gains via business process outsourcing, with the objective of recycling resources and the effort currently being put into process areas of commercial diplomacy and assisting in the creation of international trade opportunities. I shall discuss each area, starting with the prioritisation of diplomacy.
The Department has a strong record on economic diplomacy, particularly in the context of the decline in Ireland's global reputation in the wake of the economic collapse and the intervention of the troika. We note that the Department has played a crucial role in briefing international media and opinion formers on our progress to date and at all stages through the cycle of the past four or five years. We also note that Ireland's diplomatic network is one of the smallest within the European Union and that the Department works well to support businesses when required. However, changing times need new priorities, so the commercial work of the Department should be given renewed focus and an even higher priority. We recognise that much of the good work undertaken by Ireland's diplomatic community in support of business is intangible. We suggest that there be a more formal reallocation of workloads and resources to support the trade and commercial work undertaken by headquarters and diplomatic missions. Goals and targets should be identified and performance measured against them. The Department of Foreign Affairs and Trade works closely with the Department of Jobs, Enterprise and Innovation and Enterprise Ireland in facilitating an enhanced number of Minister-led trade missions out of Ireland, but we believe more can be done.
I shall outline a second point about prioritising targets. It is essential that departmental goals are prioritised. While Ireland maintains representation in countries traditionally considered of strategic importance, there may be a case to be made for focusing activities and resources on countries or regions that have the potential to be commercially important for Ireland. This will require even closer collaboration with representatives of industries in which Ireland has strong export potential and the identification of specific sectors, and in some instances specific buyers, internationally that can be focused on. Ideally a joint approach could be made using the good offices of the Department to open doors. Although it can take time to win a significant international contract, it should not be an open-ended process either. A timetable could and should be decided. If no progress is made in terms of increased commercial interaction between the exporter and importer then focus and resources can be switched to another potential trade relationship.
In terms of prioritisation of countries, we should not overemphasise the BRIC countries, which are Brazil, Russia, India and China. It has become almost a mantra that western economies should focus their energies on these countries. However, they are tough markets to crack. Exporting to China is difficult and exporting to Russia is possibly even more so. There are other current and potential markets which may not require so much toil to succeed or expand, may be more easily accessed and could produce better outcomes, particularly for Irish SMEs. We must recognise that Irish SMEs are a source for future potential growth of jobs in this economy. These include traditional markets where additional value can be achieved, such as the UK, and emerging markets where new relationships can be built. Diplomatic support should compliment the extension of the foreign earnings deduction to certain African countries in budget 2013. Countries such as Egypt, Ghana, Kenya, Senegal and Nigeria present many opportunities for Irish businesses. Furthermore, Turkey represents a huge market on the doorstep of the EU which should not be overlooked. It is important not to focus all our resources on the BRIC countries, where we will be competing with countries that have significant resources, such as the US, Japan, and Germany. It remains essential that the Department continue to support the attraction of foreign direct investment to Ireland.
I shall discuss the clear definition of roles and responsibilities. Although the Department of Foreign Affairs and Trade and the Department of Jobs, Enterprise and Innovation will likely broaden and deepen their areas of co-operation, it is important for businesses to be aware of the specific roles and responsibilities of each Department. There ought to be clear delineation and understanding between the roles and responsibilities of the Department of Foreign Affairs and Trade, the Department of the Taoiseach, the Department of Jobs, Enterprise and Innovation and so on. Such clarity will enable businesses to access the services they require and ensure accountability and accurate performance measurement.
A related point is that businesses would benefit from a one-stop website to provide information on the export or import process. At present an Irish SME will need to trawl through the websites of a number of different agencies and Departments. There is no single source to access information on the numerous requirements involved in an international trade. The United Kingdom Trade & Investment website is an example of best practice in this area. Ireland has introduced a one-stop website for small business in the area of business regulation, which is extremely good. We have the skills in a couple of Departments which we could build on to develop the same facility for trade.
Chambers Ireland would also advocate increased co-operation with the private sector. Increasingly, definitions of economic and commercial diplomacy take account of organisations in the private sector. Groups such as Chambers Ireland are well placed to support the work of the Department as it strives to make exporting and operating abroad easier. Chambers Ireland and the entire chamber network is already a key source of information and services for many businesses in Ireland. This is done via the Enterprise Europe Network of offices in five affiliated chambers in Cork, Dublin, Galway, Sligo and Waterford. Our members have the ability to leverage the networks of both Irish and national chambers of commerce globally. Plus there is Chambers Ireland's representation on the bodies that I have already mentioned, the International Chamber of Commerce, ICC, the World Chambers Federation and Eurochambres. In the context of trade, of particular relevance are the ICC committees on customs and trade and taxation, to which Chambers Ireland nominates representatives of key companies to represent Ireland Inc. at what are essentially global lobbying efforts on issues such as transfer pricing.
The fourth point is about using the opportunity of St. Patrick's Day to support trade. Ireland has a unique advantage in having a national day that is globally recognised. Every other country in the world would kill for an opportunity like St. Patrick's Day. While the Government had to pull back from related activities post-bust, this should not prevent the current Government from using the occasion to its full potential. For the record, Chambers Ireland supports and endorses the practice of Ministers going overseas to promote Ireland during St. Patrick's week. We see these endeavours as a positive investment that supports the restoration of our international reputation and will in turn support our economic recovery.
The last point is about achieving cost savings and productivity gains via business process outsourcing. We contend that finding savings within government and the public service is an essential part of reducing government debt, easing the deficit and getting the entire economy back onto a more sustainable and competitive footing. Generally, we believe that the Department carries out much of its good work on a tight budget. However, there are areas in which additional savings could be made. In our commentary on the Croke Park agreement, published in June 2012, we identified outsourcing of certain functions as one way that Government Departments can achieve considerable savings.
One area within the Department of Foreign Affairs and Trade where this might be feasible is passport processing. Considerable savings could be made not only from the wage bill but also due to reduced training costs, lower levels of investment in new technologies and lower consultancy bills. Were this process to be transferred to the private sector, the company, on foot of a tender process, becomes responsible for training of staff, investing in new technologies and so forth. This results in a considerable transfer of risk from the public to the private sector. Service level agreements would be vital. They would have to be negotiated as part of this outsourcing. It would ultimately eliminate the ever-present risk of queues building up at Molesworth Street and Members of the Oireachtas being persecuted to deliver passports to constituents.
Deputy Flanagan can tell the witness that things have changed since his day.
Mr. Ian Talbot
Outsourcing of non-core activities enables the public service to perform its core, front-line services while saving considerable amounts of money. Outsourcing has already been embraced by many in the private sector in Ireland. Furthermore, it is presented as an effective money-saving option in a number of documents produced by this and previous Governments in Ireland, which are listed in the document given to the members of the committee.
Outsourcing could also be extended to the authorisation of trade documents. There may be an opportunity to remove some of the administrative burden for the Department while streamlining the export process for companies. We would welcome the opportunity to explore the potential for the designation of Chambers Ireland and a number of our affiliated chambers as "competent authorities" under the Hague Convention for the issue of apostilles for commercial documentation. Currently, these can only be issued by the Department at its offices in Cork and Dublin, and very often it is a requirement that the documents are stamped in advance by a chamber of commerce or notary public as well. Allowing businesses to have an apostille applied at a chamber of commerce, which means a much greater geographic spread, would not only be good for the business, it would also ease administrative pressure on the Department and enable it to focus on its core responsibilities.
Chambers of commerce also have the capacity to electronically process other trade documents. For exporters this saves time and increases efficiencies. We hope to explore the possibility of greater use of electronic document processing in the future.
I thank the members for giving me the opportunity to make this presentation.
Thank you for a very interesting presentation on the role of Chambers Ireland and its perspective. One of the most interesting sentences in the statement was that changing times need new priorities. That is very important.
I will take questions from three members, Deputy Brendan Smith, Deputy Seán Crowe and Senator David Norris. I remind members to keep their contributions short and to the point, so we can get through more business.
I welcome Mr. Talbot's presentation. He made an interesting comment about less reliance on the possible potential in the BRIC countries. That commentary is gaining currency at present so perhaps he would elaborate on that. He mentioned other countries on which we should focus. I am surprised he omitted the Single Market in Europe.
As somebody who deals with business, he will know better than us about the need for currency stability. We saw what happened here in 2008 when sterling depreciated so much against the euro. A stable euro is critical for us. The more trading we can do within the eurozone, the more stability there will be for business planning and so forth. An area that has been mentioned as possibly having potential is north Africa. Mr. Talbot referred to some of the countries there. Earlier this morning President Obama spoke about the need to advance an EU-US trade agreement. Hopefully, that will happen. It will benefit trade for both trading blocs. Of course, the detail in that agreement will be critical for this country, as the protection of sensitive products, particularly food, beef and dairy products, is an important issue as well.
Mr. Talbot quite rightly mentioned the need to try to eliminate overlap and duplication between State agencies. That can be difficult as State and statutory agencies and Departments can be empire builders as well. The same should be done in the private sector. There is probably unnecessary overlap between Chambers Ireland and the Irish Exporters Association. I am sure there is room in both the private and public sectors to reduce costs and have a more effective targeting of resources.
I read a comment recently which I think was attributed to the Irish Exporters Association. Some difficulty had arisen in the British market in regard to our exports there during January. There was some movement in the currency. I am not familiar with what movement there was vis-à-vis the euro, but it was suggested that it is a matter we must watch. The stability in the values of the two currencies has, thankfully, helped the export market over the past few years. Mr. Talbot mentioned that the website of the British Department of Trade and Investment is an example of best practice. Will he comment on the effectiveness of that website?
Mr. Ian Talbot
They are interesting and relevant questions. The issue with the BRIC countries, particularly trying to focus on small businesses exporting into new markets, is that it is quite hard to trade in some of those countries. One must learn different cultural approaches. In the case of sales in China, for example, one does not show up with a good product, have one meeting, make a good presentation and sell. One must build up a relationship over an extended period of time. Exporting to Russia can be very complex. However, every time one reads the newspapers the news is all about the BRIC countries, their huge markets and so forth. We must play to our strengths as a small country with international connections everywhere. There might be other markets besides the BRIC countries where we could make an impact more easily, particularly for small business. That is our main thought in that regard.
On the Single Market and Europe, in some ways we think of the Single Market as a given. It is a vitally important market. However, we do such a good job already in our co-ordination with Europe that when we were putting the presentation together we were thinking of the Department of Foreign Affairs and Trade and how it could break into new markets outside Europe where there are embassies and offices of Enterprise Ireland, EI, the Industrial Development Authority, IDA, and so forth. Europe is very close to home but is also vitally important.
With regard to the EU-US trade agreement, in the documents we produced in advance of the Irish Presidency we stated that there was great potential for that agreement to make progress. Again, Ireland has a unique relationship with the US and this is a great opportunity. It was great to hear President Obama in his speech overnight specifically seeking to kick that process off.
On eliminating the overlap, there is always a balance. We like competition as well. One of the advantages Chambers Ireland has is that there is a chamber of commerce in virtually every town in the country. It gives us a great geographic spread and feel. How to resource that model is also a challenge for us. As members of the committee will be aware from their local chambers, the chambers of commerce have stripped their operations back from where they were five or six years ago. Chambers Ireland has reduced its staff from more than 20 to fewer than ten people. With regard to competition with other organisations, IBEC tends to be very industry-focused while we are geography-focused. There is a chamber in every town and that is vital to understanding what is happening in our communities, in local government, in the regions, as well to infrastructure building and so forth. While there is competition and probably small levels of overlap, we each provide a key service in the market.
I will ask Mark O'Mahoney to comment on the effectiveness of the UKTI website.
Mr. Mark O'Mahoney
The information that exporters and importers need is available, but the issue is that it comes from very disparate sources. Members can carry out an exercise at home tonight and try to find the information that an exporter, particularly a SME, would need to get their product off the island.
One must go to the Chambers Ireland website to learn about one element of trade documentation, the Revenue Commissioners to learn about customs information, the Department of Jobs, Enterprise and Innovation to find market access information, Enterprise Ireland to find about the potential of in-country markets, individual banking websites to find information on trade finance and separate private sector websites for information on potential trade risks. The UK website, ukti.gov.uk, is impartial in that it is not sponsored by a particular commercial entity and is one source which provides all of the information. A small company can access it and within half an hour have an idea of the process involved. "Process" is the key word because there is a sequential element to exporting. There is no point in finding out about the trade risk associated with a country without also finding out about market potential and whether there is access to finance. A number of steps need to be taken and someone dipping a toe in the export market needs to find out the correct sequence of steps before embarking on investing, hiring a freight forwarder or other elements of the trade process. There is no single source for that information. It does not need to be a hugely complex website, it just needs to aggregate the information already available on a simple site. Access from a single point is the key, not an all-singing, all-dancing, highly technical website.
Should that be done to help people to export?
Mr. Mark O'Mahoney
Absolutely and it would be relatively easy to do. It does not need to be a huge project. Every agency will happily provide the basic information and Chambers Ireland, the Revenue Commissioners and the Department of Jobs, Enterprise and Innovation can provide more detailed information on a particular aspect.
We will take that point on board when preparing our report. It is something about which everyone is concerned because this amounts to more red tape and it is cumbersome for those interested in coming here.
Trawling through so many websites sounds exhausting. Recently a witness at a committee made the point that such websites should be multilingual. Does Mr. O'Mahoney share that view? Perhaps it might be simpler for someone to go through the system. Is the UK site multilingual?
Mr. Mark O'Mahoney
Not as far as I know. Essentially, one is servicing the domestic market. There is not the same level of servicing foreign direct investment. Only a small cohort of exporters require multilingual functionality. Perhaps it is an idea. The process of foreign direct investment is far more nuanced and requires relationship building over a period of months or years. A website would be of less use in that respect.
I was talking about Government websites. The delegates referred to welcoming the opportunity to explore the potential of designating Chambers Ireland as a competent authority. Will Mr. O'Mahoney expand on that point? Where are the difficulties? Will there be difficulties with the Department of Justice and Equality or the Department of Foreign Affairs and Trade? Where else is this happening?
The delegates referred to St. Patrick's Day and we all know about brand Ireland. It happens over the course of a weekend, but then that is it. What do we need to do differently? Does Fáilte Ireland need to place a substantial number of advertisements on television? Should promotions be undertaken? Politicians are already travelling. Is there an added element required in the lead-up to St. Patrick's Day and on the day?
What is the relationship between Chambers Ireland and the Department since the latter took on the responsibility for trade promotion? How would Mr. O'Mahoney characterise the relationship?
Mr. O'Mahoney talked about having the smallest cohort of embassies. Where does he see development on this point? People talk about new markets and their importance, but we are also told embassies need to be linked with trade promotion. Given the volume of trade between the United States and Ireland and the importance of Silicon Valley, perhaps it would be more beneficial if we had four or five more people working in that area. What other countries is Mr. O'Mahoney looking to open up if he had the opportunity?
Mr. Ian Talbot
On the issue of competent authorities, there are certain activities the State has always and ought to engage in. In the example of apostille certification of commercial documentation, only two offices in the country, one in Dublin and the other in Cork, can do this task. It is a distraction from everyday work. Is authentication of a document something the State must do in 2013? There are other forms of documentation such as certificates of origin that chambers of commerce can authorise in several chambers offices around the country for companies looking to export outside the European Union to facilitate access and trade. It is a not-for-profit arrangement to provide a service. We have a network that is close to the companies that need documentation. If we do not put the issue on the table, no one will debate or think about it. I am not sure anyone has an issue with it, except for the fact that it has always been done in a certain place. Why should the State be producing certain documentation? It is about the process as much as anything else.
Mr. Seán Murphy
One cannot export to China without a certificate of origin. One of our stakeholders is Tipperary Crystal which had a crate of crystal ready for export to China to enter the market for the first time, but it could not get it out of Dublin Port without a certificate of origin which the Chinese demanded through faxes in very bad Chinglish. The flexibility of Chambers Ireland in stepping in and talking to the company, as a first-time exporter to the market, helped it to get it out the door. Chambers Ireland has flexibility in its opening hours that one may not have in other office functions. We can facilitate matters on the ground.
Mr. Ian Talbot
With so much media attention being given to Ministers and civil servants in spending money on events associated with St. Patrick's Day, there is a major focus on the level of activity involved. People are as concerned about the hotel in which they stayed appearing on the front page of a newspaper as they are about the task they were there to perform. We do not support flaithiúlach expenses, but it is welcome that the world stops for a few minutes on 17 March and thinks of Ireland in some way. We should have people in key markets who are not fearful of appearing in the newspapers because of the expenses incurred but expect to appear in the newspapers because of the meetings they have had because of the value they bring to the economy. We are doing the right thing and should not be afraid of doing more. There is grief associated with it, as well as a certain amount of management. However, we should be doing more, as no other country has anything remotely like it.
We have a very good and positive relationship with the Department, but it is challenged in merging two distinct sets of businesses. We get into concerns about how one manages the process of change and having an embassy in a country that also has an Enterprise Ireland and an IDA Ireland office and how these three bodies, with different skill sets, work together. We also get into concerns about how the budget is reallocated and how much money is allocated to the effort on trade versus diplomatic approaches. The Department is doing a great job, but many sections of the Civil Service and the public sector are being asked to change rapidly to meet our dramatically changing economic circumstances. Do they have the skill sets to manage the change process? Managing change is very difficult, whether one is in the public or private sector, and giving people the skills to manage change is an important part of the process.
That overlaps with the question of embassies, and making choices on which countries we should be focusing. We take the view that the issue is how to use the available resources in the best way possible. That brings us back to Enterprise Ireland, IDA Ireland and embassy in various countries in which we have representatives working together to deliver for business and for the economy.
Mr. Seán Murphy
Preferably working together in one building.
Mr. Ian Talbot
Absolutely - with all representatives working together in one building with the same management infrastructure and same resources and support. We fully recognise that managing that change can be difficult. What is at issue is how one deploys the resources as distinct from how many embassies one thinks we should have.
Senator Norris has a few more questions.
I welcome our three guests. Mr. O'Mahony demonstrated the importance of the contribution from the backbenches when he was suddenly called in to contribute.
This is the first time we have been provided with questions in our briefing. I never remember that happening before. There were some suggested questions. I looked through them with interest. It is a curious procedure but helpful in ways. The suggested question that I found interesting is whether there has been any reaction by the business sector to the closure of missions this year. Let me put that question and perhaps Mr. Talbot will respond to it.
I have been on this committee since it started and during the term of the previous Government there was a rebalancing of priorities in the direction of trade, which Chambers Ireland no doubt welcomes. I have no difficulty with that. It is important that we have a strong arm in terms of reaching out to foreign trade, but I am concerned about the possibility of human rights being downgraded, particularly when Chambers Ireland talks about the reallocation of workload and resources within the Department of Foreign Affairs and Trade. I am assuming it would not particularly bother the witnesses if that happened at the expense of human rights, because it must happen at the expense of some other area. If one is to rebalance and refocus the workload and resources, change must happen. I am against taking resources away from human rights, which are eternal.
I was very interested in the comments on China and Russia being difficult markets. I was glad that he isolated Africa and Turkey. Those are markets that have not been explored and we could do well there. I am horrified that we have surreptitiously altered, without reference to the Oireachtas, our position regarding China and Tibet, where there are human rights abuses. A considerable number of people are burning themselves to death to protest about this.
With regard to the one-stop website, I suggest to the Chairman that we endorse that unanimously. I would be interested to learn whether any of my colleagues object to it. It seems to be eminently sensible and practical. I do not see a need to provide the service in more than one language. The establishment of such a website would be simple, practical and easily achievable, and we should endorse that suggestion.
On the issue of Ministers going abroad, I am an Independent and since I was elected I have consistently supported Ministers from different parties in going abroad. It is absolutely essential. Under our Chairman, with all-party support from the Joint Committee on Foreign Affairs and Trade, we should show unity and support for Ministers going abroad. They are representing the entire nation and not just one party. It is not electioneering. I do not care if they stay in good hotels, if they get a good rest. I do not care if they have comfortable flights. I do not want them to be punished for working for this country. The amount of money involved is negligible. Such debate is generated by press hysteria and stupidity and we should be firm against it. The payback for that work is enormous. Other countries would give their right eyes to have something like St. Patrick's Day, the colour green and, dare I say it, James Joyce and Bloomsday. We should forget about apologising for these things.
My preceding colleagues raised a number of issues. I would not let the private sector near passports. I do not think chambers of commerce or anybody else should issue passports. It is a State matter that should stay within the State. I have never been ardent about outsourcing. We should make the Civil Service more efficient. Let us look at the bin collection service, which Dublin City Council outsourced. It is now a complete and utter mess. There is Mafia warfare between different companies, with the burning of vans, and there is rubbish all over the streets. It is an absolute disaster. We should not just accept inefficiencies but should hold the relevant bodies to account. We should not outsource public utilities or passports. That is my view, and I am a well known crank.
I do not think the outsourcing of passports will happen in the near future. There are major security concerns in respect of passports, particularly post-9/11. Around the time of the first meeting of the Joint Committee on Foreign Affairs and Trade, we visited the passport office in Balbriggan to see the operations for ourselves. There were some delays at that time but most of the delays have been dealt with and there are more efficiencies in the Passport Office. I compliment the staff there.
There were not many questions in Senator Norris's contribution, but perhaps Mr. Talbot would comment.
Mr. Ian Talbot
I will not be able to respond in the same manner as Senator Norris, but I will do my best. He asked for our reaction to the closure of missions. The private sector accepts that hard decisions needed to be taken.
There was not much trade with the Vatican.
Mr. Ian Talbot
On the rebalancing of work in the direction of trade versus human rights, Chambers Ireland is a full supporter of employment legislation. We think employment legislation, which is dealt with in approximately 45 different Acts that apply to Irish companies, should be consolidated and rationalised, but we are fully in support of adherence to employment legislation. Before the introduction of the minimum wage, we were one of the organisations that called for its introduction. We share the concerns of members to ensure that any rebalancing of workloads is done in a careful and understanding way and within the legislation.
I was thinking more in terms of extraordinary rendition. We had a committee established in the Seanad and it was destroyed as a result of commercial pressures from the Shannon area. The human rights aspect was got rid of.
Mr. Ian Talbot
I cannot comment on that.
I will not delay the proceedings other than to compliment our witnesses on their appraisal of the situation as they see it. Chambers Ireland has an important role to play in conjunction with the Government agencies, although I know it does some work in this area already. For example, I am thinking of other major festivals all over the country that affect the regions. There is an unique opportunity for Chambers Ireland to engage with visitors and business people visiting this country as a prelude to outgoing missions. We need to display the power of our economy by making presentations on the progress of Irish companies and multinational corporations based in Ireland. I do not agree with clichés such as punching above our weight. It is important to realise that we have a power that has not been recognised internationally. We know the importance of inward investment, but there are two sides to that argument.
I agree entirely with Senator Norris on the issuing of passports. I am not happy about the privatisation of certain utility services. I think the public sector can do the job better, and does not have to achieve anything other than efficient delivery of the service on time, every time, without waiting.
The waiting time is the issue that annoys everybody. It is within the ambit of the public service to deal with that issue itself, in its own interest and in the interest of the Irish people.
I see visa issues as being of considerable importance. Passports have been mentioned. That we are not in Schengen, for the obvious reasons of which we are all aware, it is hugely important to find a means of speeding up the process whereby a major business person visiting the neighbouring island or France, on a worldwide trip can, when it is brought to his or her attention, visit an adjoining country. It is only a short hop for them. It could mean a huge opportunity for employment provision here. I have dealt with several such cases, as everybody has, and we have all had the same problem. It is a question of time. As people who travel internationally do not have time, that is a factor that has to be dealt with. I am interested to hear how the witnesses can contribute to that area.
The Department of Foreign Affairs and Trade has expanded its role and has done so very successfully. I agree with the promotion of Ireland abroad as being important whether it be done by business people, Chambers Ireland, individual industrialists or politicians. It is hugely important that those going on the mission realise the seriousness of their mission. Their job is a serious one. There should be no deviation from that objective and that mission and if they do so repeatedly one will read about the results in the newspapers afterwards.
I wish to inform Chambers Ireland that officials will appear before the committee in respect of the business and the tourist visas in the near future, because we see that as a problem. Will Mr. Talbot comment on the visa position for Deputy Durkan before I hand over to Deputy Eric Byrne?
Mr. Ian Talbot
First, on the issue of visas, as we talked about visas before doing the presentation, we took the view that there was more imbedded in the Department of Justice and Equality than in the Department of Foreign Affairs and Trade so we did not actually focus on visas. That comes back to the issue of making sure there is clarity of roles and responsibilities. We have our own concerns about visas. Our sense is that a much more pragmatic approach has been taken of late for visas for incoming people but we, no less than Members, often get companies telephoning us saying they have a vitally important hirer they need to bring in from overseas and are having difficulty in getting a visa. We have found the Department of Justice and Equality very helpful in seeking to deal with those issues. That is the one that hit our desk, but what about those about which nobody thinks of contacting us or where the company is not a member? We are aware there are issues with visas and we need to ensure they are not from our perspective for the right skills and business sets coming into the country.
In regard to festivals and visitors, chambers of commerce around the country try to get involved. This year, with The Gathering, there is much more engagement. I hope that skills we learn during The Gathering endure. For example, on Monday, Cobh listed a festival for every year until 2017, the festival around the Lusitania being in 2017. Chambers is thinking hard about how to keep things moving beyond The Gathering.
There is the issue of passports being a State matter. In terms of the type of companies doing outsourcing of business processes, for example, some Irish companies such as Fexco and SWS in Munster are doing outstanding work in this area. Abtran and Arvato are doing some great work. I accept that there may well be security issues which it may be desirable for the State to hold on to in the passport area. I still think the process could potentially be split and certain functions outsourced to get better deployment of resources to help through the peaks and troughs.
Mr. Seán Murphy
The Department of Foreign Affairs and Trade attracts a certain kind of personality that may not be particularly process focused. They are diplomats focused on the softer diplomatic measures that are crucially important for the State. The issues we are seeking to improve are, effectively, plumbing issues, the processing of passports and the like. From our perspective, as a governmental agency, they have great difficulty staffing up, even on a part-time basis, for the peaks and troughs that appear before the summertime period for passports. That is where a private sector operator could staff up or staff down, depending on the peaks and troughs that would apply.
In terms of festivals, it is worth noting that we also work closely with local government. Our local government awards have a "Festival the Year" award each year; Cavan would have won in the past, as Deputy Brendan Smith may be aware. We will do that on the ground in terms of profiling those initiatives locally and also profiling the partnership between local businesses, be they multinational or local and the local authorities in developing those initiatives.
I welcome the delegation. The Joint Committee on Foreign Affairs has had trade added to it in the recent past. Perhaps, there is a maturing process to be engaged in. The witnesses have applauded the work of the Department of Foreign Affairs and Trade when they mentioned that it worked hard in reversing the status of Ireland internationally in light of the economic collapse. Some politicians in some political parties would deny that Ireland was damaged. The diligence engaged in, both politically and at diplomatic level, and our ability to renegotiate the promissory notes is an indication that our international diplomatic corp is working closely with the political agencies in pushing Ireland Inc. It is a tragedy, given the collapse of the economy that we have had to close embassies instead of opening them. Quite frankly, the three that were closed were not of great economic importance to us. I accept the point that we have to look afresh at the markets and where we recapitalise or intensify investment. In light of that, it is interesting that the witnesses have mentioned some African countries that we should target. We have a policy, an Africa strategy, and members may wish to comment as to whether they believe it is good. For example, Nigeria has a population of 160 million. In the past, the committee tended to look after the poor, the impoverished, the starving and those victims of earthquakes and natural disasters whereas since the trade portfolio has been added it requires a remoulding of the institution. We understand that the GDP of Africa is growing and that the rate of growth is 5% per annum. Therefore, there is great potential given the historical linkages of the missionaries.
The witnesses were somewhat critical of us targeting the BRIC countries. I congratulate Dublin Chamber of Commerce who came out with us when we forged the lonely path of establishing twining between Dublin and Beijing. We were very happy to be accompanied by delegates from the chamber of commerce. This very day, as we speak, in Beijing there will be 500,000 visitors to the spring festival in China, where Ireland is carrying the "Country of Honour" title. The Minister for Education and Skills is visiting China next month with, presumably, a trade delegation. There are different modui operandi in developing relations with various countries. China puts to bed the notion that we cannot compete with non-English speaking countries or that we are somehow inhibited. I see great potential in the area where we sell our education; it is a very lucrative area, bringing in international students from China and all over the world.
It is unfortunate that the witnesses have targeted the outsourcing of the Passport Office of the Department of Foreign Affairs and Trade of which we are collectively proud and understand the reason it should be retained within that Department. The Passport Office has grown in leaps and bounds. It has put in the machinery. It suffered from a flood setback and there were queues but those days are over. There is no queueing. Oliver J. Flanagan is dead and so is the politics of us, as politicians, running around with passports. We are not allowed do that. We cannot intervene even if we wanted to. Civil servants have become far more sophisticated. I have a difficulty about the suggestions regarding outsourcing but the troika will look after that because Coillte and Aer Lingus are to be privatised. I would argue that the witnesses picked a bummer when they selected the Passport Office as the area for outsourcing.
Mr. Ian Talbot
I do not want the interpretation to be taken that we were critical in any way of the effort in the BRIC countries. We were just saying we do not want to become obsessed with the BRIC countries. There are plenty of other opportunities and markets out there for us not to devote too many resources to one place. It is about bringing other people, such as the African nations, back to the table. There are great opportunities in areas such as agri-food and power. There are, for example, some Irish companies like PWC of Wicklow, doing great work in Nigeria. Guinness is also well-known there and education plays a significant role. There is a huge transfer of Nigerian people into the Irish education system. We see great opportunities in those regions. We are not critical of the work on the BRIC countries, but our comment meant we should not be obsessed by them.
With regard to China, the Dublin Chamber does great work in Beijing and Cork Chamber of Commerce, together with the two Cork councils and UCC, does great work in Shanghai and sends at least one trade mission a year there. As a network we are very focused on that. Only so many chambers in the country have the critical mass to engage in a big trade mission to China. We also try to look at SMEs.
We raised the issue of passport processing and we pushed for opportunities to look at outsourcing. If it does not work, we will accept that conclusion and move on. However, we would still like to challenge the consensus that just because it has always been done in the Passport Office and in the same way, it should continue to be done that way.
Sometimes NGOs are resented by certain people in the public service, as if they are interfering. Chambers Ireland has suggested that more could be done with regard to its work with the various institutions. Does Chambers Ireland, as an NGO, find there are barriers with regard to developing relationships?
Senator Norris raised a parochial point I also wish to raise. Chambers Ireland has Enterprise Europe Network offices in five affiliated chambers, but not in the mid-west. Limerick and Shannon are not bases for the European network offices although they are key industrial and NGO development areas. Some companies have gone out of business but there should be connectivity with smaller businesses, which are affected by what happens with larger companies. There is a network and a large NGO presence complementing the larger organisations, but they have the potential to develop their own markets also. However, there is no Enterprise Europe Network there. I would like to hear a comment on that.
Mr. Ian Talbot
The Enterprise Europe Network is a European wide network supported by EU funding. The Chambers Ireland network won a tendering process, but there was only funding available for five networks.
Mr. Seán Murphy
It is done in partnership with Enterprise Ireland. It is a subset of FP7/FP8. The scale provided for five locations. Chambers Ireland put a lot of effort into helping our five chambers win the tender, but we gained nothing from it because the administrative costs are borne at the local level in those five towns, which cover a proportion of the country. The Sligo network, for example, extends as far as Dundalk. It all depends on how it is structured.
Mr. Ian Talbot
Where were the five selected?
Mr. Seán Murphy
They were preselected for us. The tender went out with the five, did it not?
Mr. Ian Talbot
No, it was a second iteration of the contract. The first iteration included the IEA and Dublin ended up taking it for the Dublin region. There is a history to this, but what we are saying is that it covers a broad area. It is an EU mandated issue in terms of the scale. Clearly, we have a very strong chamber in Limerick and we have chambers in Shannon and Ennis. We would be very interested in supporting them where we can.
I am not sure I fully understand what Mr. Talbot has said there.
Mr. Ian Talbot
I am saying it was not our choice that there would be only five locations or of where they would be located.
Therefore, it was somebody else who decided Limerick and the mid-west should be excluded.
Mr. Ian Talbot
I am not sure anybody decided who should not be there, but somebody decided who should.
I am sure the chamber in Limerick made a play for it.
Mr. Ian Talbot
It goes back a few years. Unfortunately, I do not have the answer, but the programme is coming up for renewal within the next 12 months. We will take the Deputy's comment on board for future negotiation.
Being a mid-west Deputy, I would like to support Deputy Neville on that.
I would like to get Chambers Ireland's views on the Global Irish Economic Forum, which is a great initiative in terms of bringing people with an Irish heritage back to Ireland to discuss topics of interest to Ireland and our diaspora. In light of the fact we are coming up to the third such forum, what do the representatives of Chambers Ireland think of the fact there seem to be few tangible results from the forum? The investor visa programme, for example, has only produced one investor to date, with fewer than five in the pipeline. Countries like Cyprus, which holds seminars in London every week for people from the BRIC countries and gives them visas for Cyprus, is doing an outstanding job in getting investors. As a country where we have very little in the way of cash being supplied by banks to businesses, I am amazed we do not copy what other countries have done so successfully. We have the investor visa programme, but we do not seem to be able to roll it out effectively.
It was also announced at the Irish global economic forum that seed capital would be provided. What happened in that regard? I do not think the people who gave time and energy to the two previous fora will come to the third one if they do not see results. I am not convinced there have been any real results to date.
I would like the views of the witnesses on the effect of the changes being implemented by the Department of Public Expenditure and Reform and of the requirements for regulatory impact assessments to be carried out by various Departments. What is the view of Chambers Ireland on the fact that the Department of Public Expenditure and Reform has only carried out one regulatory impact assessment on legislation being introduced by it? It does not amount to significant reform, where a Department does not carry out an assessment as to the impact of legislation and regulations it is introducing, particularly where these will tie up businesses in significant bureaucracy.
At a parochial level, we did an assessment of red tape and government regulations in Valentia Island and we found out that between planning regulations stopping development and the government licensing requirements for foreshore development, which are as Byzantine as could be imagined in complexity - there is no clear path through and nobody knows how they work, not even the Department I am sure - it can take up to four years to get planning for developing an enterprise. I have heard that in Donegal it takes up to six years in some cases to get a foreshore licence. We discovered in Valentia that as a result of the red tape and despite the current economic crisis, the creation of 70 jobs was being prevented due to government regulation. What is the view of the witnesses on regulatory impact assessments?
On the issue of St. Patrick's Day, I agree with my colleagues. When Fianna Fáil was in government, it was hit from all sides, mostly by the media, on this issue. That is cheap journalism. Journalists would say that nobody wants to hear a good news story. When a country the size of Ireland is able to light up the Statue of Christ the Redeemer in Rio de Janeiro or Table Mountain in South Africa and all we get from the national media is cynicism and the worst form of journalism, that does not help the situation here at home.
In the week or month around St. Patrick's Day and in the period around March, our commitment should be doubled in terms of what we do abroad. I realise that given the economic situation the Government is not spending as much as it did but I believe it should be spending more because one could not buy the opportunities for Ireland that arise in the month of March in terms of what we could do with them. I welcome the fact that Chambers Ireland has spoken about it. The delegation will never hear anyone from the Opposition side berating members of the Government for going abroad. As many Ministers as possible should be sent on targeted missions to improve not only our image but trade with other countries.
I will bring in two other speakers, Senators Mullins and Walsh, who wish to contribute.
I welcome our visitors. I always admire how positive they are in most of their news releases. That is important, especially in these difficult times. This leads me to our global reputation. How does Chambers Ireland view it now? If the Government were to do three things to further enhance our global reputation, what would Chambers Ireland recommend? The delegation referred to trade missions, and I know there has been quite an increase in Minister-led trade missions. Chambers Ireland has said more could be done. What more does the delegation wish to see done? Should they be structured in a different way? The delegation referred to breaking into new markets and not relying totally on the BRIC group of countries. They also made reference to our nearest and traditional market, the United Kingdom. It surprises me that we are not exploiting it to its full potential. What do we need to do further in this area?
I agree with all my colleagues with regard to the St. Patrick's Day situation. I believe the people have moved beyond the pettiness of the Irish media in this regard. This is an opportunity afforded to no other country in the world. For one day we have a worldwide opportunity to maximise the exposure of the nation. I am keen to see scarce resources spent wisely but I believe that is happening and that we get a good bang for our buck, especially with The Gathering this year. It is a significant opportunity to maximise the St. Patrick's Day activity and to crank it up for all the centenary celebrations that will arise in the coming years.
I, too, am against the outsourcing of passport issuing. I see a good deal of merit in outsourcing some services that the State provides, but the private sector does not always get it right either. We have seen some examples of that. We should be careful about what we outsource; it is not always cost-effective. Some public services are currently being outsourced and I question whether we get good value for money from the process. The jury is out in this regard but I accept that we should examine the potential for outsourcing services that lend themselves to being done better than in the public service.
My comment relates to outsourcing. I have a different perspective from most of my colleagues, if not all of them. The phenomenon of global supply chains adds value in a considerable way to economies as well as businesses, and it is important. There have been some fine publications by the OECD on the topic which underwrite the benefits to business, industry and the countries concerned. The delegation has heard some of the reactions today. In general, they represent the reactions one would expect from public service unions and politicians in government and they probably reflect the opinions of the public service permanent Government. Anyway, let us consider the reports before us. They all recommend outsourcing but it has not happened to any significant degree. What does Chambers Ireland believe can be done? I agree with the delegation about the Passport Office; I stated several years back that it was an ideal candidate for outsourcing and that it could benefit from it. The criteria behind outsourcing in this area and the trade documentation mentioned should bring value for the consumer, but that is not a factor of any great significance in the provision of public services generally. What can be done to put in place what is taking place globally and what is seen as a good concept? How can we get over the mental reservations here about embracing this new approach? What efforts or initiatives could Chambers Ireland take on that side to convince people of the benefits? That is where we need to start.
The witnesses have heard from three members, each with a set of questions. Some of them are overlapping but I imagine the witnesses will answer them as well as they can.
Mr. Ian Talbot
Reference was made to the Global Irish Economic Forum. I was reminded of an old quote I use, boringly at times, from the Canadian ice hockey player Wayne Gretzky, who said "You miss 100% of the shots you don't take." If one does not try something then nothing will happen. We try at the Global Irish Economic Forum. This goes straight to the core of my presentation earlier. We need ventures such as the Global Irish Economic Forum and we need to set priorities, goals and performance indicators and measure against them and then decide whether to do it again. The key is to do that beforehand rather than agreeing that a given venture sounds like a good idea and therefore should be tried. Before we go into something we need to have clear goals with regard to what is expected and what we are anticipating and so on. Perhaps we are not doing enough of that. We have not been part of the Global Irish Economic Forum and I am unsure about the expectations of the people who go, what is expected of them in the room and what is expected of them when they leave Farmleigh and go back to their main roles. However, what matters is priorities and performance indicators and the measurement of and response to them.
I had not heard of the Cyprus idea before. There are many different ways of doing things. We must remain flexible. Although a given idea may seem good, we must ensure we can determine whether it is good.
I refer to another point in our presentation. Many things in foreign affairs can be intangible. For example, one should never underestimate the importance of organisations and companies such as Intel and Citibank and the importance of individual executives at a senior level in Ireland in those companies who are selling Ireland in New York to get more investment money from the parent companies back into Ireland. That is valuable and we need to continue to monitor how we do these things. It is difficult to get the tangible things. As I have stated already, we need to set goals and measure against them.
Reference was made to the Department of Public Expenditure and Reform regulatory impact assessments and specific reference was made to Valentia. Another well-known issue is that of the Corrib gas field. Our understanding is that the Department of the Environment, Community and Local Government has made significant advances in recent years in rationalising the process for foreshore and offshore licensing and so on. Progress is being made but there is always additional work to be done. We hear both views on regulatory impact assessments. We hear people say they wish they had done a RIA because a given problem would not have occurred, but on the other hand there is a view about the torture of going through a RIA. I do not have an answer for the committee to that question.
Senator Mullins asked about our global reputation now. I have been at meetings of the International Chamber of Commerce, a global organisation, and Eurochambres, based in Brussels, since January. Several people approached me and said it was great that the Irish problem was solved. It was phenomenal and almost worrying. If others believe Ireland's problem is solved, that is great from the perspective of our reputation and perception. It is great news. Our reputation has improved immeasurably. Yesterday in the Financial Times several eminent people, including Wolfgang Münchau, said a great job had been done by Ireland on the promissory note. Our reputation has improved significantly but we cannot allow that to take away from the fact that we know there is still work to be done at home. Anyway, the perception is improving abroad and that is what counts. That much is great.
What more could be done? What three things would I do? I had not realised I was here for a job interview. We have a great opportunity with the Presidency of the Council of the European Union to focus on delivering two or three key things in the area. Can we get an EU-US trade agreement done in four and a half months? I am unsure, but it would be great to have some landmark things to further embed the fact that we are deliverers and that we can implement and do things.
That is what we need to say to people. Our expertise is in getting things done and it may not be innovation or the smart economy. It is a case of setting goals and priorities and delivering them. That is more important than a pie in the sky, highfaluting idea which sounds good but which never gets delivered. We need to deliver on the Presidency.
We need to get the message out to copper-fasten the general global perception the Ireland is, yet again, a good place in which to do business. The Taoiseach's aim is for this country to be the best country in which to do business by 2016. We need to keep doing the right things. Once the troika leave, we do not want them back, whatever the circumstances. When they leave here, it is a one-way trip.
Mr. Seán Murphy
One other point on outsourcing is about levelling the playing field. There has to be better treatment of the VAT differential between governmental provision of services and private sector provision of services. There has to be some means by which the subsidy applying to pricing for a service delivered by a public service - VAT not paid - versus a service delivered by the private sector, is clawed back or balanced out. That 27% jump is a massive issue. For instance, we do not believe that the health service which employs more than 130,000 staff is not ripe for vast amounts of really well-targeted outsourcing. We cannot believe that is the case. Every investment in computing power in the health service would make a return in spades. We argue that the price differential between the use of private hospitals for standard operations such as hip replacements compared with the public sector counterparts is off the scale. These are areas in which we cannot afford to continue as we are. So long as Ireland is borrowing €1.5 billion a month, we are vulnerable to a twist in our reputation. We have to close that gap and we have to keep our feet to the fire, collectively, as a society.
Mr. Ian Talbot
The figure is €250 million a month.
I have a question for Mr. Talbot. Mr. Martin Murray from Asia Matters attended the committee recently to discuss the trade potential in Asia, in particular in some of the emerging markets. Yesterday afternoon, the Indonesian ambassador, who is based in London, paid a courtesy call. Has Mr. Talbot contacts with counterparts in chambers of commerce in Asia? What is his view on the emerging market of Indonesia where many multinational companies are based? There is the possibility that an Irish embassy may be established there.
Mr. Ian Talbot
We have contacts with overseas chambers of commerce. The Irish Chamber of Commerce in China is based in Shanghai. Indonesia has a population of 170 million and it is a very good potential market for Ireland. In the past there was no great reason for us to have an embassy in Indonesia but we need to revise that policy. That number of people, 170 million, is a lot of people. They are technology orientated. I agree it is worth considering.
Senator Jim Walsh asked a question about outsourcing and what can we do to make it happen. Effective outsourcing requires a certain process. The first point is that the process needs to be in reasonably good shape before it is outsourced. If the process is a mess, the outsourcer will not be able to solve it. I refer to PPARS as a good example. The delivery was essentially taking it as it was and doing it, but that did not work. A process would need to be re-engineered before being moved on. It needs to be a two-part process. Effective work is being done in the public service on the creation of shared service centres, which is a rationalisation of work being carried out in different organisations, such as payroll systems, HR services and so on. Once a process is in a shared service centre, there is a better opportunity to outsource it. However, once it is in a shared service centre, there may be a view that the job is done and that can be where it stays for the next 20 years.
There is an opportunity now to outsource some activities successfully compared with three or four years ago. I suggest that some converters should be asked to make it a success. The easy things should be done first as the more complicated things will take longer and the worse it will look.
There is an intractable problem that the disparity between public and private employment is probably in the order of 25% to 40%, depending on the area. It will be very difficult to persuade people who are well paid to work in similar positions in the private sector and this may prove an obstacle to movement. Should an effort be made to align public and private pay, which means lowering the cost of our public services?
Mr. Ian Talbot
That question opens up a brand new topic. In answer to that direct question, the direct answer is "yes", it would make sense. The private sector gives more opportunities for flexibility, productivity and technology. The private sector may be able to introduce more productivity in the work.
I thank the witnesses for a very useful discussion which saw good interaction between the members and the representatives of Chambers Ireland. The committee will certainly consider the views of the witnesses when preparing a report. I wish Chambers Ireland well in the future.