The Competition (Amendment) Bill 2010 is targeted and focused and has the purpose of amending section 35 of the Competition Act 2002 to enable the Minister for Enterprise, Trade and Innovation to appoint whole-time members, on a temporary basis, to fill current vacancies in the Competition Authority. A number of recent departures at Competition Authority member level, the most recent being last week, in addition to a vacancy being carried since January 2009, have resulted in the membership of the authority being reduced to below the statutory minimum requirement, giving rise to concerns regarding the proper functioning of the authority.
Following the departure of the authority's chairperson in March to take up another position, the Minister, Deputy Batt O'Keeffe, appointed an existing member as chairperson of the authority on a whole-time temporary basis. This appointment is for a period of just under six months, at which stage the Minister expects a chairperson will have been selected for appointment following an open Public Appointments Service competition. While creating a vacancy at ordinary member level, the appointment of the temporary chairperson ensured the authority was properly constituted, in accordance with the requirements of the Competition Act 2002, and able to carry out all of its statutory functions between the period from mid-March to the end of last week. The resignation of another member, effective from 30 May, has resulted in the membership of the authority being reduced to below the statutory minimum requirement.
The Minister is concerned that the current improperly constituted authority is, as matters stand, unable to fulfil its statutory obligations and that any decisions made by members in such circumstances could be the subject of a legal challenge. Of particular concern are those functions specifically reserved, by statute, to the authority acting as a decision-making collective body. These functions include the making of a declaration under section 4(3) of the Competition Act 2002 that a specified category of agreement, decision or concerted practice is not prohibited if it complies with the conditions set out in section 4(5); the power to initiate criminal proceedings for an offence relating to anti-competitive behaviour or practices under sections 6, 7 or 26 of the 2002 Act or for relief in civil proceedings under sections 14 and 15C of that Act; and the power to make a phase 2 merger determination under section 22 of the 2002 Act.
Powers are also devolved from the European Union to designated national competition bodies. In Ireland's case, the relevant body is the Competition Authority.
It is essential that the performance of the Competition Authority of its functions, for example, the making of a decision to either approve or prohibit a merger, be on a sound legal footing and not subject to uncertainty as to its validity. The amendment to section 35 of the Competition Act 2002, as provided for in the Bill, and the subsequent appointment by the Minister of temporary whole-time members will safeguard the integrity of the authority's workings and decision making power and will, following the making of the appointments, reinstate the membership level above the statutory minimum requirement.
Membership of the Competition Authority is governed by section 35(1) of the Competition Act 2002 which provides that the authority shall consist of a chairperson and between two and four other whole-time members, as may be determined and appointed by the Minister; a whole-time member appointed by the Minister to cover a period of temporary inability by a member to discharge his or her duties and; such number of part-time members as the Minister may determine and appoint. Under the 2002 Act, the appointment of a chairperson and a minimum of two other members satisfies the statutory minimum membership requirement. The appointment of a person to replace a member who is temporarily unable to discharge his or her functions, or the appointment of a part-time member, as provided for in section 35(1)(b) and (c), does not satisfy the minimum membership criteria.
The legal mechanism under the Competition Act 2002, in respect of replacing whole-time members, is through the holding of a Public Appointments Service competition. The actual mechanics of advertising, interviewing and then taking into account the need for successful applicants to give some months notice to their current employers — possibly up to three months in some cases — mean that the entire recruitment and selection process could take a number of months to conclude. The Minister has clearly stated he must ensure the Competition Authority can function with the requisite statutory membership during this period.
The Bill will allow for the appointment of whole-time members for the period to provide cover up to the time when whole-time members are appointed following the holding of a Public Appointments Service competition. It provides that these temporary appointments will be made having regard to the competencies laid down in section 35(5) of the 2002 Act for the appointment of members. That provision requires appointees to "have sufficient expertise in or experience of one or more of the following areas, namely, law, economics, public administration, consumer affairs or business generally", thereby ensuring only suitably qualified and experienced people can be appointed to the Competition Authority, even on a temporary basis. The integrity of the authority's decision making power will, therefore, continue to be protected, both in terms of the number and quality of its members.
The appointment of members under this legislation will be short-term, for a defined period and will conclude when the whole-time members have been appointed under the Public Appointments Service-run open competition. Immediately following enactment of the Bill, the Minister intends to make two appointments to the Competition Authority. This will result in membership of the authority consisting of the chairperson and three whole-time members. This arrangement will prevail until successful candidates are appointed from the Public Appointments Service competitions that will be held.
I turn to the provisions of the Bill and will explain what each is designed to achieve. Section 1, definition, and section 3, Short Title and citation, are standard legislative provisions, while section 2 is the core of the Bill. It provides for the amendment of section 35 of the Competition Act 2002 to allow for the appointment on a whole-time basis of temporary members, including a chairperson, to fill a vacancy occurring in the Competition Authority's membership arising from the death, retirement, resignation, disqualification or removal from office of a member. It is envisaged that these temporary appointments will be for a period of up to six months. The Bill also provides that the Minister may extend this period of appointment for a period or periods up to a maximum of a further six months. It is intended that the provision allowing for an extension of the appointment will only be used in specific circumstances, for example, in the event that the recruitment and selection process is not finalised or the successful candidate is not in a position to take up his or her appointment within the initial six-month time period. Appointees to these temporary positions must, in the opinion of the Minister, possess sufficient expertise in or experience of one or more of the following areas: law, economics, public administration, consumer affairs or business generally.
The Bill will also provide that a temporary appointee remains eligible for appointment, through an open competition, as a whole-time member within the Competition Authority, unless he or she has been removed in accordance with the existing provisions of section 35(12) of the Act. That provision permits the removal of a member who has become incapable through ill-health of performing his or her duties or whose removal appears to the Minister to be necessary in the interests of the effective and economical performance of the functions of the authority.
Following enactment of the Bill and the making of the necessary temporary appointments, my next legislative priority in this area will be the Bill to give effect to the amalgamation of the Competition Authority and the National Consumer Agency. Since being announced as part of the rationalisation plan for State agencies in the 2009 Budget Statement, the Minister's Department has been working with both bodies to ensure a smooth transition from the two separate entities to a single dual functioning body responsible for competition and consumer protection. As both bodies were established under statute, it is necessary to give effect to the newly merged body by way of primary legislation.
At the time the merger of the two bodies was announced, work on a review of the operation and implementation of the 2002 Competition Act was well under way. The submissions received following a public consultation process were being considered, as were the report and recommendations of the advisory group on media mergers. Rather than give effect to the amalgamation of the authority and the agency in stand-alone legislation, to be followed in due course by legislation to amend, reform and update the 2002 Act, it was decided to introduce a single comprehensive Bill that would create the new consumer and competition body; update existing competition law; strengthen the public interest test in respect of media mergers, in line with the report of the advisory group on media mergers; make some minor amendments to the consumer protection legislation; and give effect to the Government commitment under Towards 2016 regarding the exemption of certain specified categories of vulnerable workers from competition law.
While work on the draft legislation has been progressing on this basis, a number of other developments have arisen which have led to additional requirements in the Bill. The renewed programme for Government contains a specific commitment to "implement a code of practice for doing business in the grocery goods sector to develop a fair trading relationship between retailers and their suppliers" and "to review progress of the code and if necessary to put in place a mandatory code". A provision to place a code for retailers and suppliers on a statutory basis will be included in the proposed Bill. As the House may be aware, efforts are under way to explore with all the relevant stakeholders the possibilities of agreeing a voluntary code of conduct in the grocery goods sector which would respect the interests of all parties. In fact, Mr. John Travers has been appointed as a facilitator in this regard. This offers stakeholders the opportunity to develop a voluntary code most suited to the dynamics of the Irish grocery goods sector and which would form the basis of any subsequent statutory code.
This all-encompassing approach to the draft legislation has, to some extent, delayed the legislation for rationalisation of the two bodies. The Minister is, however, of the view that we will be better served in the long run by a single legislative measure that establishes the new body and provides for a combined and updated consumer and competition code, with appropriate enforcement provisions being given to the new body. Work on the draft heads of the Bill is at an advanced stage and the Minister intends to bring them to the Cabinet within the coming weeks. Until they have been approved by the Government, it would not be appropriate for me to comment further on the specifics contained therein. I know Senators are awaiting the approval and subsequent publication of the Bill and may seek to avail of this opportunity to progress issues contained in that Bill. During the debate on this Bill in the other House Deputies raised a number of competition related issues such as a possible exemption from competition law for certain categories of workers and professions, as well as the code of conduct for the grocery goods sector. In addition, proposals for possible Oireachtas scrutiny of ministerial nominations for appointment and follow-up action on recommendations made by the Competition Authority were also articulated during that debate. I urge Senators to await publication of that Bill. The Bill before us is focused and defined. It deals with the membership and make-up of the authority. It is imperative that it be passed by the Oireachtas without undue delay in order that the Minister can appoint the members in sufficient time to avoid a reduction in membership levels below the statutory minimum. The matters to be included in the comprehensive consumer and competition Bill, including many of the issues raised in the debate on this Bill to date, will in due course be considered and debated, no doubt in great detail, as appropriate.
While the Bill before us is a short one, for all that, it is extremely important. I look forward to working with Senators on Committee and Report Stages and will be happy to reply to any questions that arise. Substantial legislation on the amalgamation of the two agencies will soon be published and discussed in both Houses. The Competition (Amendment) Bill 2010 deals with membership of the Competition Authority and will ensure it is in line with statutory minimum requirements. I commend the Bill to the House.