Amendments Nos. 1 and 3 are related. It is suggested we debate them together and have separate decisions.
Bula Limited (Acquisition of Shares) Bill, 1977: Committee and Final Stages.
SECTION 1.
An Leas-Chathaoirleach
I move amendment No. 1:
In page 2, line 13, before "agreement" where that word secondly occurs, to insert "secret".
The purpose of this amendment is to make it clear to anybody reading the Act, if and when it becomes an Act, that the agreement around which the Act is built was a secret agreement and those discussing and debating the Bill were not aware, in fact, of what they were agreeing to. I think this is necessary for a number of reasons. It is only fair to those who oppose the Bill that it should be apparent that they opposed it because they did not know what they were being asked to agree to and, consequently, that their opposition to the Bill was not necessarily because of what is proposed to be done, which in general terms may be a good idea. But they were opposed to it because, not knowing exactly what the agreement was and not being willing to buy a pig in a poke, they could not find it possible to support the Bill because of the fact the agreement was not known to them.
It is only fair to those who are supporting this Bill as well as to those who are opposing it that it should be made clear that it was a secret agreement. If this transaction does not prove to be a successful one and if it proves to be entirely unsuccessful, which I hope will not be the case, then again it is only fair to those who supported this Bill that they will be able to say that they made an act of faith and supported this Bill but, in fact, they did not really know what they were voting for. They did not know what the agreement was, they did not know what the rights or the liabilities or limitations were in regard to the agreement.
From every point of view, it would be much better if the agreement was made available to the Members of the House. It should be made quite clear to anybody who has occasion to read the Act, if it becomes a matter of public debate and controversy in the future as to why this Bill was passed, that the Members of the House did not know what the agreement was or what they were agreeing to. In a few years' time somebody consulting this Bill would naturally assume in the ordinary way that the agreement around which the Bill is built was laid before the House or was made available in some way. They would naturally assume that that was the position. To save the time of practitioners or anybody else who may want to consult this Bill in the future it is only fair to make it apparent in the Bill that this is a secret agreement which was not available to the Members of the Oireachtas, not available to anybody when it was being debated, and consequently they will probably be wasting their time, just as we are to a very considerable extent, in trying to find out what was agreed to when this Bill was passed.
I have a second amendment down which is really saying the same thing in a different way and I would not mind which of the two is adopted by the Minister. If he would adopt one or the other it would serve the purpose I have outlined, which I believe is a very valid purpose and something which should be seriously considered and accepted by the Minister. The Minister has at great length, in the other House and in his opening speech here, emphasised the importance of keeping this agreement secret. He has emphasised the difficulties. He has made very strong and lengthy arguments about why this must be kept secret. While I do not agree with him about that, it seems to me that if he is convinced that it must be a secret agreement, then there is no reason why he should not stand over that and accept that it is a secret agreement and put that in the Bill.
The Minister cannot be ashamed of the fact that it is a secret agreement. In the future people looking it up may not be aware of that and may be surprised, but at present it has been discussed at considerable length in the other House and now here. It is quite clear to everybody that it is a secret agreement. It is clear to everybody that it has not been made available to the Houses. In the circumstances I cannot imagine why this should not be put into the Bill. If the Minister is not prepared to adopt amendment No. 2, in which I suggest that the agreement should be laid before each House— of course, that would be after the Bill has been passed but nevertheless it would be some help to know what we were talking about even afterwards— I can see no reason whatever why he should not say in the Bill that the agreement was secret or, alternatively, that the agreement was not made available to the Oireachtas, which is possibly a less extreme way of describing what I suggest should be done.
We are covering ground that we were over yesterday to some extent. I am happy to have the opportunity of saying again what the considerations are. I devoted time to it in my Second Reading speech and I appreciate the point of view that Senators who hold the opinions that Senator Eoin Ryan has just expressed. While I do not agree with them I understand them.
On closing yesterday I emphasised that the Bill will not in any way make the agreement referred to in section 1 law and that it is not correct to suggest that the Bill proposes to make the agreement the law of the land or that, indeed the Bill ratifies the agreement. It is necessary to be clear about that.
Secondly, I did not make any argument in relation to this agreement as such. I made the argument in general that one cannot pick out one at random. One cannot be arbitrary. This agreement belongs to a category of agreements which during the whole life of the State have been confidential. Their confidentiality has always been accepted and has been guarded with considerable care. I can think of no instance where, for example, there was even a request to see agreements made by the IDA to purchase shares in many firms. I will not name any of them but we all know firms in which the IDA have shares. I rested my argument on the category of agreements between the State and the private sector. I have indicated that I am not prepared to be arbitrary in regard to one firm nor am I prepared to disadvantage the State in its relationship to the private sector or to competing firms. Those seem to me good reasons.
Perhaps our debate will be useful in a long-term sense. I cannot accept the amendment but I said in the other chamber that I recognised that, from the point of view of the public and presentationally, I was in what I described as a no-win situation, that I would do damage and would be acting arbitrarily towards one company were I to reveal this agreement. On the other hand, my not doing so has been, and of course will continue to be, portrayed as a desire for secrecy because I had something to hide in this instance. No amount of repudiation of that second suggestion by me will stop it being said. I recognise that. I recognise that if I do make it public and lay it before the Houses of the Oireachtas I will do damage. I will not do it in what Senator Horgan called last night the framework of law and in an organised disciplined way. If I do not publish it I am at a disadvantage and if I do publish it I am at a disadvantage. Therefore, I urged, and I urge again and hope that it will commend itself to Senators, that we look to an expansion of the mechanism that we started to initiate in the Committee on the semi-State companies. What we started to do in that Oireachtas Committee is to reveal what is properly confidential but to members of that Committee. I was determined to act in this instance and I have acted in a way that has not been very tidy. I have taken some risks. I believe they are justified and as Ministers——
On a point of order, the Minister is now arguing why it is not being disclosed. These two amendments are merely asking the Minister to acknowledge that there is a secret agreement. Amendment No. 2 is asking the Minister to disclose the agreement, which is really what the Minister is talking about now.
I was not quite clear.
An Leas-Chathaoirleach
We are taking amendments Nos. 1 and 3 together.
I thought, in fact, Senator Eoin Ryan had made some references to amendment No. 2 and I thought we were taking all three together. However, I will confine myself because we will be coming on to No. 2.
In regard to the word "secret" it has, of course, in the moving of the amendment an argumentative point of view, one might say a propagandist purpose. It is a perfectly correct thing to do in an amendment but I think the Senator will see why I decline to accept it from its propagandist aspect. There is another aspect. The word "secret", especially in law and diplomacy, refers to something which is not known. I have had to exercise my discretion about this agreement because I could not bring the Bill to either House without telling the Oireachtas a great deal of what I intended to do. I did do so. A lot of that agreement is known. It has been a difficult exercise in discretion as to what should properly be known and what should not. I have also had to resist having it pulled out of me piece by piece in the course of Committee Stage. The word "secret" does not apply to it. It is a confidential agreement but, of course, it is known.
The other amendment is a less objectionable one if the Minister likes—"not being made available".
In regard to amendment No. 3, I think it has the same basic argumentative point. It is bad law to put arguments into the text of a Bill. Anyone at any future date— Senator Ryan made the point about people in the future—who, apart from reading debates which have gone on now for nearly two months, reads any Second Reading opening speech from myself, which perhaps after the Bill itself is the first place one would go, would see references to this. It is redundant, it is unnecessary and it is argumentative. While those things are pretty normal in debate they make bad law and I cannot accept that we should put them into the text of the Bill itself.
The Minister is, of course, entitled to his point of view about this being redundant. Nevertheless, he must recognise the fact that many Members of both Houses regard it as of very considerable importance. It is not a Bill dealing with all kinds of things, where possibly at some point there is mention of an agreement or schedule which is not of basic importance and which is not actually incorporated in the Bill. This is a Bill which, without the agreement, is meaningless. The whole kernel of the Bill is the agreement. The only thing in the Bill is that the Minister is asking the House to vote £9 million for certain rights and we do not know what the rights are or what he will in fact require. The agreement is such an important ingredient, such an important element in this Bill that I think it should be disclosed to the House. Some effort should have been made on the lines the Minister has mentioned but it is not of any great help to us in this particular Bill. If it is not to be disclosed, it is such an important integral part of the Bill that it should at least be made quite clear that it has not been disclosed to the House.
I think there is some validity in what the Minister says about the word "secret". It certainly has connotations which are perhaps too dramatic, but I can see no objection to adding that the agreement has not been made available to the Oireachtas. That is a neutral kind of phrase which does not say whether it should have been made available. It is not argumentative in any way, it merely states the fact that the agreement which is the kernel of this Bill has not been made available. It could still be assumed that there were good reasons for not making it available. What is important is to say that it has not been made available.
It is important for everybody concerned in this Bill—those who vote against as well as those who vote for— that it be made clear that the agreement was not available to the House. Those on the Minister's side of the House are making an act of faith. Those on the other side of the House might have accepted this Bill, given it full support and accepted it with enthusiasm if they had known exactly what the terms were. They are opposing it merely because they are not able to give it support and authorise the Minister to spend that amount of money without knowing what exactly what is in the agreement.
Whatever the arguments may be about whether this should, in fact, have been kept from the House, I cannot understand the reluctance of the Minister to state this fact, which is of very considerable significance and importance in explaining the way in which people discussed this Bill and voted for and against it. It may not be a very important point but it would be of great assistance in the future to people who have to refer to this Act and who would normally take it for granted that the agreement was somewhere or other and that it was available. It should be made clear to them that, in fact, it was not available.
I can see the Minister's point of view, and at least I can see that he has a point of view and one which can be argued, that the agreement should not be disclosed. I cannot understand the point of view that the Bill must not mention the fact that the agreement was not made available, as though this is something which the Minister does not want to get around, or something that he is not very happy about. The agreement was not made available to the House. That is crystal clear; it has been discussed for several months; it is a fact. I am sure that as far as the Minister is concerned he does not regard that as being anything that he is ashamed of or may have to apologise for. From his point of view there is absolutely no reason why he should not put into the Bill the simple statement of fact that the agreement which is the kernel of the Bill was not available to the House of the Oireachtas when the Bill was being discussed.
Amendment put.
The Committee divided: Tá, 7; Níl, 22.
Tá
- Browne, Patrick (Fad).
- Eachthéirn, Cáit Uí.
- Garrett, Jack.
- Keegan, Seán.
- Killilea, Mark.
- Ryan, Eoin.
- Ryan, William.
Níl
- Blennerhassett, John.
- Butler, Pierce.
- Codd, Patrick.
- Connolly, Roderic.
- Daly, Jack.
- Deasy, Austin.
- Ferris, Michael.
- Harte, John.
- Horgan, John S.
- Kerrigan, Patrick.
- Kilbride, Thomas.
- Lyons, Michael Dalgan.
- McCartin, John Joseph.
- McHugh, Vincent.
- Mannion, John M.
- Markey, Bernard.
- Moynihan, Michael.
- O'Brien, William.
- O'Toole, Patrick.
- Robinson, Mary.
- Sanfey, James W.
- Whyte, Liam.
Tellers: Tá, Senators W. Ryan and Garrett; Níl, Senators Sanfey and Harte.
Amendment declared lost.
I move amendment No. 2:
In page 2, line 16, to add "A copy of which Agreement shall forthwith be laid on the Table of each House of the Oireachtas".
This is not of any great use in present circumstances because a copy of the agreement would only be laid before the Table of the Houses when the Bill had been passed. That would really be too late to enable us to evaluate whether the agreement was a good one, what merits it had, and we would then be in a position to know whether we should support this Bill. However, it would suffer from the disadvantage that we would only know afterwards whether we were right or wrong in supporting or opposing this Bill. Nevertheless, it would be of some assistance even at that stage to know what was in this agreement. The whole question of whether the agreement should have been made public properly arises under this amendment.
The Minister has said that there are precedents for not making these things public. He has mentioned a number of precedents, none of which, in my view, is exactly in point. He refers, in particular, to the sums which are made available by the Industrial Development Authority. The position there is that the Houses of the Oireachtas did agree, and have agreed over many years, to make sums available so as to stimulate and encourage the setting up of new industries. It was undoubtedly a calculated risk. It is quite true to say that the Houses of the Oireachtas are not shown individual agreements. But it is a calculated risk that has stood the test of time. It can be looked at regularly when new sums are asked for. The proportion of success and the proportion of failures in regard to industries which have been helped by the Industrial Development Authority have been made available and the Houses of the Oireachtas can constantly decide whether, on balance, it is proper that the IDA should get further money and should be able to make agreements which are not subject to scrutiny by the Houses of the Oireachtas.
This is not the same kind of situation. The individual sums given to industries are not, with very few exceptions, anything like as big as the amount here. It is given as a grant. There is no situation whereby the Minister is going to be a shareholder. This is coming in in a few cases now but originally and for a long time this was not a major element in it. It is not the situation where the Minister in one particular case is going to invest that amount of money in a company where he is going to be holding 49 per cent of the shares and where the whole area, the whole matter which must be considered, is of paramount importance. Why is this amount of money being invested in this particular mine? What are the rights of the Minister, the State, in this situation, going to be in the future?
To say that this is the same situation as giving a grant to a factory, to a firm to build a factory or instal machinery or something like this is stretching the point very far indeed. The Minister has been called upon, asked again and again, to say where there was a precedent and, in my view, he has not satisfactorily produced a precedent which is, in point, valid which could be relied upon for justifying what he is doing on this occasion.
But even if he did have a perfect precedent that does not necessarily mean that it is the right thing to do. It is one of the things that is relied upon so very often when Bills are brought in, that if there is a precedent for it then it must be right, if there is a precedent then doing what is done in a particular Bill needs no further justification. That, in itself, is a very serious line to take and a very wrong one.
It is particularly so in present circumstances. I think I said yesterday that the trend is very much in the opposite direction. The trend is that in relation to companies more and more information should be given to the public, shareholders and everybody concerned in one way or another. In regard to this Bill literally everybody is concerned. Every citizen is in fact going to become a shareholder of this company through the Minister. Even if there was a precedent, and I do not accept that there is, it would not justify doing what is being done in this Bill. It would not justify moving against the tide of public opinion and opinion generally about disclosure of information. I think the Minister would be doing something far more desirable and he would get far more credit for being ahead of public opinion in this respect and insisting that virtually all, if possible, of the agreement be made available.
The issue of giving information about this agreement, disclosing what is in the agreement, is of vital importance and if this Bill is going to be passed in its present form and if it is going to become a precedent— I do not believe there is a precedent for it—I have no doubt whatsoever that an attempt will be made in the future to make it a precedent for doing the same thing again and again and giving less and less information to the citizens and to those who are concerned. It is an unfortunate precedent to create. It is particularly unfortunate in view of current thinking about this question of disclosure.
As I have said, this amendment would not really solve the problem because the agreement would only be disclosed afterwards. Nevertheless, even at that stage we would be aware of what we had voted for or against. We would know what was expected by the Minister when he proposes that this sum should be paid and we would have some opportunity of knowing as time went on whether the development of this mine, the rights and so on which are given to the Minister in this agreement, were matching up to his expectations in regard to this agreement and this Bill.
In proposing this amendment I am far from satisfied that it meets the real problem which this House has to face in debating this Bill but it would be of some assistance, even if it was only, in the future, to be able to study developments and to know whether the Bill was a good one which really means whether the agreement was a good one because the agreement is, of course, the whole kernel of the Bill.
The first thing that occurs to me to say is that even when I am disagreeing—as I am in this instance—with Senator Eoin Ryan I appreciate the balance and the fairness with which he puts his arguments. I was stopped on the previous amendment because I was getting on to this one. I was describing what I call the no-win situation. I had indicated yesterday that the series of events whereby a great national asset was locked into litigation was not of my making. I inherited it and it was necessary to act. I never pretended that this was tidy or that this was a perfect solution. It is not. I had, in talking about this no-win situation, indicated that if I were to disclose this agreement uniquely I would be acting incorrectly. If I was not to do so I laid myself open to the sort of charges that have been made and will be made. I had said that I hoped we would have a mechanism because the circumstances that I found myself in as a result of some bad law in the past, in a series of accidents and a series of court decisions, is nonetheless a circumstance that is going to arise in future and we are going to have time to consider it if we want to use that time. We are, with the great companies, going to have to make confidential agreements. They will really be confidential and the revealing of them would really damage the State's interest and our partners' interests because mining, like oil and gas, is a very tough and ruthless international business and the stakes are very high. That is a true description of it. We have to have confidentiality and yet we have to have the possibility of scrutiny which crosses party boundaries, which is genuinely neutral and fair.
Let me say in parenthesis that when people say, as Senator Ryan said today and Senator Horgan said yesterday, that I believe as passionately as they believe about openness in Government, I recognise the tendency towards openness that Senator Ryan talks about. I welcome it. I will help it to the extent that I have departmental responsibility for it. I have done things in Government in regard to openness that I never experienced in Opposition. As my party's spokesman in Industry and Commerce I was never invited to the Department in my Opposition time for a briefing. I have had the Opposition spokesman in, not to talk to me, to politicise it, but I have my staff available to him so that he would be better briefed on matters that were coming up. I believe in those things and I believe that what we have to do is to extend what we started doing about our Oireachtas Committee on semi-State bodies which is that even where there would not be a semi-State situation but the relationship of an agreement between the State and the private sector, the possibility of scrutiny exists simultaneously with the possibility of confidentiality which is commercially essential. We need both of those factors.
Senator Horgan used a phrase yesterday which struck me and which I noted. He said that it should be across the board, it should be orderly disclosure, it should be democratic, it should be done fairly. I believe in that but what I cannot believe in is the application of exceptional requirements of disclosure and exceptional treatment to a single company because no one who would read the whole of this debate fairly can believe for a moment that the principles of Bula had been treated properly or decently by the Opposition. They have been pilloried in all sorts of ways. In fairness, the treatment by the Opposition of this Bill in the other House would have indicated the desire for secrecy which is expressed by many civil servants on the basis of just making their work easy. It would have thrust them back into extra confidentiality rather than giving them the courage to come out into the open and reveal more.
I will not treat one—I called it a David company—small disadvantaged Irish company which has enormous and powerful adversaries uniquely or disadvantageously vis-á-vis the others. Senator Ryan to some extent made my IDA case. Grants are one matter. I did not base the case on grants. I based it on the taking of equity by the IDA. That is not unique or recent. It is in the 1969 Act and it was operated before I came to office and with large sums of money in certain instances. It is not unique and we have many agreements every year, not of grants but of share participation, shareholding, minority shareholding in public and private companies for which we are never asked for agreement. I will not treat one which is in this David situation uniquely from the others and I do not think I should be asked to do so. When that is affirmed I believe we would be doing a very useful job if we could at least reach a consensus but we have to have a mechanism whereby we can combine revelation to responsible people of the full details with commercial confidentiality. I think that is essential and I would welcome it. Were this agreement to be scrutinised by such a mechanism I would be absolutely confident in my vindication. I am not prepared to seek that vindication on the basis of revelation if it requires my treating one company exceptionally and the breaking of long-establised traditions in a disorderly and disorganised way.
I am glad that the Minister hopes and intends to try to rectify a situation which is extremely unsatisfactory. We are talking about a Bill here, a relatively short Bill, but we are talking also about a very large sum of money and we are talking about a deal. In fact, as far as the Minister is concerned, he knows exactly what is involved. I presume he is confident that he is right. As far as we are concerned in this House what the Minister is bringing before us is a proposition: "I have a bright idea, I think it would be a good thing for the State, please give me £9 million." That is the beginning and the end of it as far as we are concerned. That is what it amounts to. I think that in the circumstances it can be understood that we are extremely unhappy to be put in a situation where that is in fact the proposition that is put before us. Mining is a highly speculative form of activity. There are all kinds of things that can go wrong with it. There are all kinds of factors involved which may evolve either in the wrong way or in the right way. We know that the Minister is proposing something which is speculative by its very nature. We are given the minimum of information and it ends up that the Minister is saying "I have a mining proposal. I cannot tell you anything about it but I think it is a great idea and would you let me have a cheque?" Perhaps it is a great idea. I sincerely hope it is a great idea and some of the figures which have been mentioned suggest that it will in fact prove to be a great idea. It is, as far as we are concerned, doing what none of us would do in our private capacity if it were suggested by a stockbroker or somebody like that, that we would invest £100 or £1,000 in a mine but told that we could not be given any information about it but that it was a good tip. Some people are entitled to do that kind of thing in their private capacity but we are here in an entirely different capacity. We are representing the taxpayer. It is our duty and responsibility to ensure as far as possible State money is spent in a wise and responsible way but we are being asked to approve money without having the faintest idea of how it is to be spent or whether it is justified. It is an entirely unsatisfactory situation. The Minister has given his point of view. He has explained why he cannot and will not give any information about this agreement and he is justified in giving his point of view and explaining why he thinks he cannot do it. I think we are equally justified in saying that it is an intolerable position for us to be in when we know nothing about the agreement.
Amendment put and declared lost.
Amendment No. 3, by leave, withdrawn.
Section agreed to.
SECTION 2.
I move amendment No. 4:
In page 2, line 22, to delete "£9,540,000" and to substitute "£1,937,500".
This arises as a result of the same problem—the problem of knowing whether the amount in the Bill, £9,540,000, is the right sum, whether it is too much and what sum would be right. Because of lack of information about the agreement and about the project generally we are not in a position to say whether the sum is right. It could be £100 million, it could be £50 million, it could be any sum. The sum is absolutely meaningless. I have substituted a sum which is based on the only information or report of any consequence that is made available, that is, the report of Lazard Brothers. They came to the conclusion that the total value of the mine was £9 million odd, or £7 million when certain deductions were made. I have suggested a figure of a quarter of that which would on their basis seem to represent 25 per cent of the value of the mine.
I put it forward not indeed with any assurance, not with any conviction that that is in fact the right sum because I am totally unable to say with any conviction what the right sum is because of lack of information but I put it forward because as far as we are concerned it is the only figure that makes any sense. Lazard Brothers, in putting forward that figure, were very cautious and very hesitant because they made the point several times in their report that they had not been given the information they would like to have, that they had not had time to make inquiries, that they had not the time to get the expert opinions on which they would finally put a firm figure. Therefore, it is not a very reliable figure. It is not one that I could go out on a limb for and say that that should be the figure and that the Minister's figure is wrong. It merely represents some relevance in a situation where information is so dreadfully scarce.
It is important in the sense that if I am asked why I suggest that figure at least I am able to refer to a report from a reputable firm that says the value of the mine is about £7 million and this is a quarter of it. I am putting this forward merely to illustrate the desperate situation that exists in regard to information and the fact that we have to grasp at any straw, and the straw that is available to us is the Lazard report. Based on that, the figure should be £1,937,500 rather than the £9.54 million.
Lazard Brothers are very hesitant in what they say but they point out a number of important factors which nobody can deny. Some of them are merely matters of common sense, for example, the cost of diverting the river, the question of whether planning would be just as simple as was envisaged and various other more technical problems, like the price of ore in the future and the cost of extracting it, which they did not have time to go into more deeply. Even if they had gone more deeply into these matters I probably would not be able to understand. But in the land of the blind the one-eyed man is a god. In this situation where we have so little information, even a report which apologises for the fact that it really cannot mention any hard figure, in spite of its reservations and in spite of the fact that those who drew up the report were not given the information they wanted, it is the only thing we have. On that basis £1.9 million seems to be a more appropriate figure than £9.5 million.
I think I shall start at the end with the observation of Senator Ryan that the Lazard report, which I said yesterday was stolen and posted under plain wrapper to the newspapers, was the only information available. It would be very hard to find a commercial transaction in Ireland where there was more information available. Since 1971, immense amounts of information have been published. Most crucial of all is the scale, the grading and the configuration of the orebody because that is the asset that guarantees things. We know how big it is and the grid of boreholes in the sort of detail that is almost never available about a commercial undertaking. To suggest that, on the basis of estimates, the Lazard one is the only one available is not correct either. It was the one that received a great deal of publicity. Very substantial excerpts were published—I think I am right in saying they were published simultaneously— from other reports which were prepared for other people. The various reports that have been referred to which contain estimates of the value of the orebody were prepared for the two sides in the arbitration. They were submitted to the arbitration board and they were debated before it.
I gave some information yesterday but I will reiterate it. On the Bula side going to the arbitration board, stretching from May to October, estimates were produced by Bechtel which, in size and in status and acknowledged expertise, is one of the great companies in the world in this area. The Bechtel Report on Bula went to the arbitrators on 5th May. They had a number of other valuations and then they brought in a Mr. Alan Sykes, a consultant of great standing and expertise. Later on, in October, they brought in Professor Carlsberg, again an extremely distinguished person. There is nothing new in what I am telling the Seanad as it was all published.
I shall give the House some of the valuations I spoke about yesterday, Bechtel, Sykes and Carlsberg, because you can have a grid of valuations depending on selected discount rates, and other selected areas. The Bechtel estimate of May 5th was £94.36 million. The Sykes estimates ranged from £61.57 million to £63.1 million; Carlsberg from £82.58 million to £104.8 million. On our side I emphasise that there is no new information. It is all in the Dáil records, in the newspapers or in both. We had the Royal School of Mines, Mergers Limited, the Geological Survey, Economic Consultants Limited and Lazards. We had a range of valuations too and they are all known.
The Minister is talking about technical reports rather than the valuations.
No. Some of these contained technical reports but they did contain valuations. There are sums of money of exactly the same sort of standing as the Lazard sum of £7.75 million attached to the things I have given, Bechtel, Sykes and Carlsberg and the others. So, we have a range of valuations, not a single one, and they are not new and they are not concealed. About the sizing and grading of the orebody there is an enormous amount of information. It is very seldom that an investment is secured by a known and proven asset of this kind but in this instance it is. Then the matter was argued before the arbitrators. I said yesterday that I do not claim to know but this amendment purports, and Senator Ryan did not push it very hard, to have a valuation down to the last £500—£1,937,500. That is for experts, but the arbitrators were experts. That was their profession: they had a very high standing, at the peak of world reputation as arbitrators bringing a range of technological expertise, engineering, law, accountancy, and planning experience to bear on it. They went there and had a look. They argued the planning aspect at length. They argued the diversion of the Blackwater. They argued the technology of the mine at length and they came up with a figure.
I do not think it is prudent for any of us to try to be wiser than they are. I do not think it is surprising if I retained a number of consultants; I am not suggesting that any of these consultants were other than the best. I know the other side got the best and we tried to get the best and I think we got the best. Each side had very good people but it is interesting that all ours were below what the arbitrators decided on and all theirs were above. Nobody behaved improperly, but people made a valuation for the purpose of an arbitration, depending on which side they were on.
I made the comparison elsewhere of a court of law. You have two lots of barristers of high standing, not cheating and not distorting the law, and yet presenting the same events, with the same access to knowledge about those events available to each side, very differently, behaving quite correctly. Is it not our experience that that is what happens in a court of law? Is it surprising that it happens in an arbitration? Is it not the job of arbitrators in commercial life, as of judges in life in general, to resolve things so that things can continue and go ahead?
We had to have an arbitration because we had already been locked at great length into delays and litigations we were promised for all of it. It was very difficult to get agreement. We did not think it was possible that we would find agreement at all by negotiation. We had a mechanism that would resolve the difficulty which was normal and correct economic procedure. I do not think that it behoves any of us to try to be wiser than the arbitrators. Neither do I think it right for the Opposition to pick out £7.75 million from Lazards and divide that by four or to take 24 per cent of it, to be more precise still. It is no more correct for them to do that than for me to pick, for example, Carlsberg's lowest at £82.58 million and divide that and take 24 per cent of that. One is as good as the other, surely, and what the arbitrators did was to come down in the middle and I accept it. We cannot have an arbitration if we do not accept what comes out of it. The purpose of an arbitration is to get a neutral, middle point and to get on with things. The valuation was properly carried out. Valuations are made routinely in economic and business life when there are many variables. In fact, an arbitration is precisely concerned with circumstances where you cannot quantify exactly. When one is dealing with things five years, ten years or 15 years ahead be it mining, the price of zinc, selling toys, refining petrol or whatever it may be, nobody will give you precision in regard to the future as it would be impossible. Yet arbitrations must take place, and the more expert the people the better they can balance the different variables. There is no guarantee that they get it right, but they have a better chance than most people.
This was a proper arbitration, properly carried out. It enabled us to get on with things. To suggest that we should ignore the middle position that they took and pick out at random one of the estimates which was prepared for our side is unreasonable. I would not claim that I should have paid or sought to pay a quarter of Carlsberg, a quarter of Bechtel, a quarter of Sykes and, therefore, I do not consider it fair of the Opposition to say that we will pay a quarter of Lazards. Lazards' report got a spurious special publicity and was given a special position in all of this because it was stolen and circulated. It is not fair either that, once the Opposition is clear in that, they should go on perpetuating this spurious position. I think therefore we must reject the amendment.
Question "That the words proposed to be deleted stand" put and agreed to.
Amendment declared lost.
I move amendment No. 5:
In page 2, line 22, after "£9,540,000" to add "and the said shares so acquired shall rank pari passu with all other shares of the company for all purposes”.
This amendment is put in to ensure that the shares which the Minister is acquiring shall in fact have equal rights with those of the other shareholders. It may be unnecessary, but there are some good reasons for suspecting that the shares the Minister will acquire will be in some way different from the other shares in the company. In ordinary circumstances if he merely acquires ordinary shares then he would have the same rights as anybody else. But there is an agreement there which may vary that. We do not know the contents of it, but in the absence of that knowledge I think it is important that we should be sure that what the Minister is getting are shares exactly the same as the shares which will be held by other shareholders.
The Minister has at best a minority holding, a situation which is far from a happy or a desirable one, but at least we would like to be sure that his situation is no worse than the situation of a person who has 49 per cent of the shares. If the Minister were able to tell me that I am unwise in pressing this amendment because in fact the shares are in some way more advantageous than the ordinary shares, then I would certainly be very happy to withdraw it. I would like to be sure and, not knowing what is in the agreement, I do not know what the position is. I would like to be satisfied that the shares are the same as the other shares, that they are not deficient in the rights which the other shareholders will have, or that the Minister will not suffer in his position as a shareholder any more than a person in a minority position holding 49 per cent of the shares.
I think it is a reasonable suggestion and one which will reassure those who are worried about the fact that there is an agreement there which could affect this situation. Not being able to see the agreement is disturbing for many reasons, but if we could eliminate one possible source of worry, one area of uncertainty, it would be some assistance; it would be reassuring and it would be helpful against the context of the Bill generally.
I want to do two things. First, I wish to refer to the appropriate section of my Second Reading speech yesterday about this matter. I pointed out yesterday that the agreement was a freely negotiated one and it therefore has provisions which are designed to protect the legitimate interests of both parties. I then said that I am quite satisfied that it is a satisfactory agreement from the point of view of the State. It protects the fundamental interests of the State in a reasonable manner and in so far as special rights are concerned the balance is substantially in favour of the State. That was my Second Reading speech.
The amendment that is proposed relates to a section which authorises the acquisition of shares in Bula Limited. The effect of the amendment would be to provide by law for the rights which are attached to the shares to be acquired. I pointed out on a number of occasions that we are not in fact making the agreement the law of the land. We are not legislating the agreement. It is not appropriate that the rights of the Minister should be regulated in the manner proposed, because my rights as a shareholder have been safeguarded adequately in the agreement. It would therefore not be appropriate for me to put into law the rights I have as a shareholder. As I said, we are not making the agreement part of the law. It is understandable and by no means execptional that people who control the operation of a company should desire to ensure that the admission of a substantial minority should not result in their being deprived of the company's control. Operational control is not in this case an objective of participation by the State.
Subject to safeguards which I am satisfied are reasonable and adequate it is proper that such control should continue to be exercised by the existing private interests. I have said already, and I have quoted the passage from the Second Reading speech yesterday, that on the other hand the State has secured a considerable number of preferential rights, some of which are designed to ensure that the State's interest cannot be prejudiced in a fundamental way. Some of them have the objective of securing rights and powers of a kind which would be appropriate to a lease in respect of minerals the State owned. I am satisfied that the State's overall interests have been safeguarded. In so far as special rights are concerned, the balance lies in favour of the State. So I am unable to accept an amendment which purports to make provision by law in regard to rights which have been acquired under the agreement.
I think the Minister is putting words into my mouth when he suggests that I said this Bill was making the agreement the law of the land or something of that kind. I am not saying that. It is pushing it too far when the Minister says that the Bill cannot interfere with the ordinary company law and with the ordinary articles of association and so on of the company concerned. It might be inappropriate for this Bill to interfere with the rights of shareholders, the articles of association or anything else in regard to this company. What this Bill can do is say that the Minister may not expend the sum of £9,540,000 unless he is getting a deal which ensures that the shares which he gets will rank pari passu with those of the other shareholders. That is merely saying that this should be part of the bargain. It is not making the agreement the law of the land; it is not attempting in this Bill to interfere with the normal working of the Companies Act or with the articles of association of that company. It is merely saying that unless the agreement gives the Minister shares which rank pari passu then this House is not willing to give him the money he requires. It is merely a condition which would attach to the deal. It seems to me to be a very reasonable condition.
Of course it may be that there are other things in this agreement which are so attractive from the Minister's point of view that he came to the conclusion that it was worth taking shares that did not rank pari passu. That may be so; we do not know. As an important element in the proposal which the Minister is making to the House it does not seem to be unreasonable to suggest that the shares which he gets are not going to be shares with less than ordinary rights, shares that are in some way deficient or are not as good as the shares held by the other people holding shares. What is being obtained by the Minister for this large sum of money is shares. We cannot go into all the details of the agreement; we cannot go into any details of the agreement. What we are talking about is buying shares and it is not unreasonable to say; let us make sure that these are 100 per cent shares with full rights, shares that are just as good as the shares which will be held by the other shareholders.
The Minister, far from reassuring me, rather does the opposite because he will not give us—perhaps I am anticipating this—his reaction. I gather he will not accept the amendment and he will not give the assurance that the shares rank pari passu. He will say that the balance of interest is very much in favour of the State. I think we are entitiled to take from that in fact the shares are not going to rate pari passu, that the shares are not going to be as good as the shares held by the other shareholders, that these in some way will rank as inferior because of the powers which they carry or the rights to dividends or rights of some kind that they carry. The Minister is not saying: I can give you an assurance that these shares rank pari passu. I am only saying that on the balance of interest the State is doing well. We must assume that the shares are not going to rank pari passu but the Minister is nonetheless going to accept them because there is some other inducement in the agreement which makes it worth his while to accept shares which are less than good, having less rights than the other shares held by the other shareholders.
We are back in the same position once again where the Members of this House on the opposite side will have to make an act of faith and where the Members on this side are going to be even more worried than they were because we now know, or at least we have strong reasons for believing, that the shares being bought in this company are not ranking pari passu with the shares held by other shareholders. That adds to our concern about what is being done. The Minister says: “I assure you that from the State's point of view there is a balance of interest in favour of the State.” So, we make an act of faith or we do not. Once again we have to take the Minister's word that it is a good deal. The only tangible thing that we can really put our finger on in this deal is the shares. For the £9 million we are paying, are we getting the normal shares with normal rights, equal rights? It appears we are not. I am more concerned than ever about the way in which this deal has been done. I hope that the Minister's confidence in the advantageous nature of this agreement is well-formed. If the other attractions which apparently induced him to take shares which apparently are not pari passu prove to be illusory for one season or another, then it will certainly be most unfortunate that the shares are not as good as they might otherwise be.
I accept it is possible that the Minister was right and has very good reasons for accepting shares of this kind. It should have been possible for him without giving away too much information to give us some idea or explanation or reassurance in some way by saying why he considered in the circumstances there were other factors which make it worth while and showed that the balance of interest was in favour of the State.
Amendment put.
The Committee divided: Tá, 9; Níl, 23.
Tá
- Browne, Patrick (Fad).
- Dolan, Séamus.
- Eachthéirn, Cáit Uí.
- Garrett, Jack.
- Keegan, Seán.
- Killilea, Mark.
- McGowan, Patrick.
- Ryan, Eoin.
- Ryan, William.
Níl
- Blennerhassett, John.
- Butler, Pierce.
- Codd, Patrick.
- Connolly, Roderic.
- Daly, Jack.
- Deasy, Austin.
- Ferris, Michael.
- Harte, John.
- Horgan, John S.
- Kerrigan, Patrick.
- Kilbride, Thomas.
- Lyons, Michael Dalgan.
- McCartin, John Joseph.
- McHugh, Vincent.
- Mannion, John M.
- Markey, Bernard.
- Moynihan, Michael.
- O'Brien, William.
- O'Toole, Patrick.
- Quinn, Ruairí.
- Robinson, Mary.
- Sanfey, James W.
- Whyte, Liam.
Tellers: Tá, Senators W. Ryan and Garrett; Níl, Senators Sanfey and Harte.
Amendment declared lost.
Section agreed to.
SECTION 3.
Question proposed: "That section 3 stand part of the Bill."
I should like to ask the Minister in relation to subsection (1) why it is necessary that the Minister should specifically be given power to exercise all the rights and powers of a holder of such shares. It seems that if he is the holder of the shares he should normally have the power of rights of a shareholder. I am wondering why it should be necessary to say that specifically in the section.
I am informed—this may not be a very satisfactory answer— that it is something that the draftsman has inserted as a convention in Bills of this type, this empowering to do something which, in fact, he is empowered to do already. It is simply written into Bills and it is traditional to do it. There is nothing from the norm in this. I appreciate that that is not a very satisfactory answer but that apparently is the reason it is there.
Question put and agreed to.
SECTION 4.
I move amendment No. 6:
In page 3, line 14, after "Minister" to insert "and with the approval of both Houses of the Oireachtas".
Subsection (3) states that the Minister for Finance may, after consultation with the Minister, sell, transfer or otherwise dispose of any shares of the company held by him under this Act. I am suggesting the words "with approval of both Houses of the Oireachtas" be inserted so that it would read: "The Minister for Finance may, after consultation with the Minister, and with the approval of both Houses of the Oireactas, sell, transfer or otherwise dispose of any shares of the company held by him under this Act." This is a reasonable amendment. We are dealing with a very big proposition which, it would generally be agreed, even by the Minister and those supporting it, is of a speculative nature, but we are getting the minimum information about it.
The Minister is putting it to the House because he believes it is a good idea, a good deal and it is in the interest of the State to do it. I hope his confidence will prove well-founded. However, if for some reason, this does not develop as well as the Minister hopes, if changes take place, if the speculative nature of the proposal proves to be even more speculative than is envisaged and it is necessary to sell, transfer or otherwise dispose of the shares, it is an occasion upon which the Minister at the time should inform the Houses of the Oireachtas. He should tell the Houses "This is what we spent money on; this is what we hoped would be the result but it has gone wrong and we are proposing now to sell, transfer or otherwise dispose of the shares and we think it only fair to tell the House what has happened, how the position has developed, what we propose to do and why we propose to do it." This is necessary and fair as far as those who support the Bill are concerned. They are making an act of faith. They are hoping this will work out well, that the £9 million will be spent on something which will give a return to the State and will prove of benefit to the State in general and all those concerned in the operation. The least that should be done is that, if the situation does not develop satisfactorily and some kind of a compromise has to take place, if shares have to be sold for less than was paid for them or are to be transferred so as to try to prop up the situation by letting in some other company or something of that kind, the Houses of the Oireachtas be informed of what has happened. We should be told how the position has developed, what is now proposed, why it is proposed and exactly what the new arrangement will be from the financial point of view.
Maybe I am too pessimistic in my approach to this. Things may go so well that there would be an advantage in selling, transferring or otherwise disposing of the shares. In that case also the Minister for Finance, or the Minister involved, as the case may be, should consider it right and proper to tell the Houses of the Oireachtas what has happened and what he proposes to do. This is a big investment by any test and the mining operation involved is a big one. It will be of considerable significance in the economy of the State. We are all vitally concerned in it. We are all involved in it because we are involved in this Bill and are entitled to know when any changes take place and what the changes are.
It is too simple to say that the Minister for Finance may, after consultation with the Minister, sell all the shares. Sell them for what? I am not casting any reflection on the Minister because he may not be in office at the time. It may be another Minister. We do not know who may be involved at that time, who may be the holder of the shares. It would be too easy if this proposal, starting with great hopes and expectations, proved in fact, to be a disaster and that the State wanted to bury this disaster quietly and to sell the shares, transfer or otherwise dispose of them with the minimum of publicity and information.
This gets back to the inherently unsatisfactory nature of the Bill. The Minister has argued that he has good reasons for not giving us information about the agreement, but must this necessarily continue into the future? Are we to be told nothing now and be left in that position when passing this Bill even if the project is a disaster—"disaster" may be too dramatic a word—or proves a great disappointment—one of the views put forward by Lazards was that there is a trend for costs of mining to increase faster than the value of the mineral that is taken out of the ground—or, from the State's point of view, it is hardly worth while continuing to be associated with it? The Minister of the time may feel that he does not want the State to continue, that things may get even worse. He does not want to admit that the State made a mistake, made a bad investment, and the whole thing can be quietly disposed of without any information being made available.
The least that should be expected is that if a situation ever develops when the shares have to be disposed of the Minister should have to come before the House and say: "In spite of my high expectations" or "in spite of the high expectations of my predecessor, this has gone wrong; we will have to sell the shares, and what we are selling them for is, in all the circumstances, a reasonable price and we think it is the proper thing to do. We are sorry it worked out like this but in present circumstances this is what we think we should do." It is not too much to expect that. It would take some of the sour taste away if we were told by the Minister: "In spite of the fact that we cannot give very much information at present; in spite of the fact that I am convinced we are doing the right thing, nevertheless, if the thing goes wrong, the House will be told what happened, what the new arrangement is, and will be given—at that stage at least—some information and an opportunity of expressing a view about the second phase of this operation." That is peculiarly appropriate in such a situation because we are now being told to accept this as an act of faith. The Minister, and his advisers, and the Government, say: "We are convinced this is the right thing to do; take our word for it." If the Houses of the Oireachtas are convinced and persuaded to stay out of this at this stage and make an act of faith and if the Minister and his advisers are proved to be wrong—I hope they will not be— and there is a bit of mess, surely at that stage the House should be given an opportunity to express an informed view about what should happen next.
I find in this amendment the same sort of what I would call exceptionalism in regard to Bula that has animated a great deal of the debate, certainly from the Opposition side. If this were to be accepted it would be an example of the Oireachtas trying with its structures, which are evolved for debate, to do the executive business of the Executive. We have a practice that has gone on through the life of the State from administration to administration, without change when there was a change of Government, not to make the disposal of shares by the Minister for Finance subject to the approval of the Dáil. Indeed, it is not peculiar to shares. It is a long continuing general rule that when property of any kind—it is well to remember that the State possesses and disposes of many kinds of categories of property —has been acquired by the expenditure of funds voted by the Oireachtas the management, and, ultimately, the disposal of that property becomes a function of the Executive. We have had that traditional division. It is not peculiar to our Oireachtas; it is very fundamental and as old as Parliament, the division between the legislature and the Executive.
Of course there is accountability. That, again, if not as old as Parliament in its Viking or Magna Carta sort of origins, certainly has been there for many hundreds of years of our tradition of Parliament which comes down through Britain. Of course there are mechanisms for accountability. Indeed, in regard to matters like Private Members' Business the Standing Orders of the Dáil—I am not so familiar with those of the Seanad—permit greater freedom of debate, greater freedom to raise matters at short notice, greater freedom to have a detailed discussion of them, than existed when I was in Opposition. The protective mechanisms which are proper and necessary are there, long evolved and in existence. The accountability, the duty of accountability, the possibility of debate on the activities of Ministers, the regulation on the expenditures of moneys voted and so on, all exist.
What worries me, firstly, is the exceptionalism and, secondly, the teasing out of the ramifications and results of that exceptionalism in regard to Bula. It is not a frivolous debating point that I have been making when arguing that our natural resources policy are all of a piece. We are going out onto the Continental Shelf fast. We are going to have a lot of drilling this year. We have agreements with all the great oil companies of the world. The quantity of money here is nothing to the potential quantities of money in those agreements, it is much larger. We cannot be disadvantaged in our commercial practice.
I wanted to get this Bill into the House on the last Wednesday of January but I did not. I had to wait until the following Tuesday. It was circulated about 20th January. It has been on the go for two months now and it is not out of the Seanad yet. It then must go to the President. What happens if there is a commercial buyer who finds the whole thing trailed through the public, through the newspapers, subject to the sort of scrutiny, indeed, that Bula has been subjected to in the Dáil? By the time one would come to close a deal on that sort of basis the man would be long gone. Those in the Oireachtas know that one cannot conduct these sort of transactions on the basis of protracted and non-quantifiable delays. At one stage, Deputy O'Malley told me he would keep me in the Dáil for three months. If he had wanted to, technically, and if he had the stamina to do so, he could have done so. The time is non-quantifiable. The borrowings of Bula in this instance were recorded in the Companies Office and found themselves in the newspapers as revelations. The fact that a stud farm sold yearlings found itself in the newspapers as a revelation.
Either we do not have an exception for Bula and we do this for all the commercial transactions, which is impossible, or else we have an exception for Bula which is unjustifiable. We are caught in that fork. If this was applied to everyone it would be patently impossible and non-workable.
I would not have anything to do with trying to develop the Continental Shelf in competition with the multinational groups if every time I wanted to buy or sell I would have to come into the Oireachtas. I could not work like that. I am not going to treat one company differently from another. It seems to me we are caught in that. I have never pretended that we are in a situation that is neat or, in the long-term, satisfactory. I hope we will have much more coherent legislation like the IDA Bill. Indeed, if it is an IDA Bill no agreements are brought forward. They are not mentioned. The whole category of agreements is catered for in the one piece of legislation. They never come before the Oireachtas. If we have more comprehensive legislation this sort of thing will not arise. I do not pretend that it is neat, but with regret, I cannot accept the amendment.
Arising from what the Minister said, he is putting it in the same category as the Minister for Posts and Telegraphs who had a Broadcasting Bill in this House about eight months ago. He was the one person who told us that the accountability of Radio Telifís Éireann was the business of this House and was the business of the Oireachtas. It is nice to know that two Ministers of the same party differ in opinion.
Amendment, by leave, withdrawn.
Section agreed to.
Sections 5 to 8, inclusive, agreed to.
Title agreed to.
An Leas-Chathaoirleach
When is it proposed to take the next Stage?
Now.
We should have at least a week to consider the remaining Stages of this Bill. An attempt has been made to rush this Bill through the House with what I can only describe as indecent haste. Yesterday we discussed the question of when the Committee Stage should be taken. I reluctantly agreed to have the Committee Stage taken today because the Minister has some difficulty next week. My agreement was translated into a sitting at 1 o'clock today which was both unnecessary and extremely inconvenient for many people. I cannot understand why there should be such urgency about taking all the Stages of the Bill today and I do not believe that the Members of this House would allow themselves to be treated in that way. I must resist the proposal and oppose it in the hope the acting Leader of the House will realise that it is outrageous to suggest that all Stages of this Bill should be taken this afternoon. I understand the Minister has some difficulty next week. If that is so I see no reason why it should not be deferred for another week. I must resist the suggestion that we are going to take the remaining Stages within the next half hour.
I am sorry, I cannot accede to Senator Ryan's request. The Leader of the House made it clear this morning that we intended to deal with all Stages of this Bill today. I have no reason to alter that decision.
An Leas-Chathaoirleach
The question is: "That the remaining Stages be taken today."
The Seanad divided: Tá, 21; Níl, 10.
Tá
- Blennerhassett, John.
- Butler, Pierce.
- Codd, Patrick.
- Connolly, Roderic.
- Daly, Jack.
- Deasy, Austin.
- Ferris, Michael.
- Harte, John.
- Horgan, John S.
- Kerrigan, Patrick.
- McCartin, John Joseph.
- McHugh, Vincent.
- Mannion, John M.
- Markey, Bernard.
- Moynihan, Michael.
- O'Brien, William.
- O'Toole, Patrick.
- Quinn, Ruairí.
- Robinson, Mary.
- Sanfey, James W.
- Whyte, Liam.
Níl
- Browne, Patrick (Fad).
- Cowen, Bernard.
- Dolan, Séamus.
- Eachthéirn, Cáit Uí.
- Garrett, Jack.
- Keegan, Seán.
- Killilea, Mark.
- McGowan, Patrick.
- Ryan, Eoin.
- Ryan, William.
Tellers: Tá, Senators Sanfey and Harte; Níl, Senators W. Ryan and Garrett.
Question declared carried.
Bill reported without amendment, received for final consideration and passed.
Business suspended at 3.20 p.m. and resumed at 3.30 p.m.