The Exported Live Stock (Insurance) Board was set up under statute in 1940 at the request of the Irish livestock trade. The Bill now before the House arises from a request from the trade and from the board itself to wind up the board because of the decline in live cattle exports to Britain. The basic legislation contained no provisions whereby the board might be dissolved and winding up, therefore, requires enabling legislation.
Under the Exported Live Stock (Insurance) Acts, 1940 to 1950, exporters of cattle, sheep and pigs are required to pay into an insurance fund a levy in respect of each animal exported direct, or via Northern Ireland, to Britain. The fund is administered by the Exported Live Stock (Insurance) Board, which is a statutory body set up under the Acts and appointed by the National Executive of the Irish Live Stock Trade. Payment of the levy entitles the exporter to compensation for damage to, or loss of, animals from the time of shipment, or from the time of entering Northern Ireland, until up to 84 hours after release from the landing place in Britain. These statutory insurance arrangements were set up at a time when livestock exports were almost exclusively to Britain and they were designed to be entirely self-financing.
In the past ten or 15 years there has been a sharp downturn in live cattle exports to Britain and in recent years disbursements, mainly administrative expenses, from the fund have exceeded receipts from the levy. In the forties exports of live cattle to Britain, and Northern Ireland, were running at 430,000 head per annum. In the late fifties they exceeded 700,000 head but by 1983 they had fallen below 24,000 head. Exports of live sheep and pigs to Britain over the years have not been significant.
The balance in the fund is presently less than £10,000 and consequently the board is operating under the threat of possible insolvency. The National Executive of the Irish Live Stock Trade and the board have indicated that the possibility of regaining a situation of financial viability either by extending the compulsory insurance arrangements to cover exports to all destinations or by increasing the rates of insurance levy would not be acceptable to the livestock trade generally. I think that is the crucial statement.
The current non-UK trade, which is mainly to North Africa, involves a much greater insurance risk and would call for very high premiums. The exporters involved in that trade prefer to make their own insurance arrangements, as would exporters to Britain if faced with substantially increased rates of levy. The National Executive and the board, therefore, see no option other than to wind up the activities of the board. Exporters of livestock to Britain will then have to make their own insurance arrangements in the same way as shippers of livestock to other destinations do at present. In view of the precarious state of its fund, the board has taken steps to have the risk of possible claims arising during the winding up process underwriting by a commercial insurance company.
In addition to the fund balance of under £10,000 the only capital asset which the board owns is an office at North Circular Road, Dublin, which was acquired in 1972. The Bill proposes that the disposal of these premises should be subject to my approval.
The board currently employs two officers who have service of 41 years each. Two other officers who had service of 39 years and 32 years were made redundant in March. The board has been contributing to a pension scheme with a pensions firm on behalf of the staff and the determination of final pension and other arrangements for the staff on the termination of their employment is a matter for agreement between them and the board management within the resources of the board. However, there is a provision in the Bill whereby the Minister for the Public Service will be the final arbitrator in the event of any dispute on pension or other terms between staff and management.
Finally, the Bill contains a provision whereby the disposal of any residue after all claims and liabilities have been discharged will be subject to my approval.
Because of the precarious financial state of the board it is important that the possibility of claims should cease as soon as possible. Dáil Éireann passed this Bill yesterday. I would like to thank this House for agreeing to deal with the matter quickly so that the winding-up process can be concluded as soon as possible.