Competition (Amendment) Bill 2010: Second Stage

Question proposed: "That the Bill be now read a Second Time."

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.

I welcome the Minister of State. He outlined the main purpose of the legislation, which is to enable the Competition Authority to continue its work. Fine Gael will not oppose the Bill on Second Stage but will seek to make a number amendments on Committee Stage. The authority is an important State agency and it has an important role. The limited implementation of reports it has produced and recommendations it has made by the Government during my time in politics has been remarkable. It raises a broader question about how the Oireachtas and the Government goes about implementing the contents of its reports.

The Minister of State mentioned the new system whereby the Minister for Enterprise, Trade and Innovation will appoint temporary members to the authority, which is the main thrust of the legislation. The provision dealing with appointments in the 2002 Act is vague. The Minister of State outlined the criteria appointees have to meet if they are selected. Section 35(5) states that for someone to be eligible for membership of the authority he or she must have "sufficient expertise in or experience of one or more of the following areas, namely, law, economics, public administration, consumer affairs or business generally". Any member of the population could qualify on that basis. We are all consumers and the Act does not go into detail to define what is "sufficient expertise". The system of appointing temporary members is vague and it is a far cry from what we were told would happen when the Government was formed. Subsequently, there were different pronouncements by Ministers regarding appointments to the boards of State agencies. They said they would have to be not just political friends of the appointing Minister and they would have to prove they had a vigorous and thorough understanding of the brief of the body to which they were being appointed. Fine Gael and other parties have consistently proposed that appointees to State bodies should be subject to questioning by the relevant Oireachtas committee. In this case, it is the Joint Committee on Enterprise, Trade and Employment and I will table an amendment in this regard on Committee Stage.

Much of the good work done by the Competition Authority over the past 12 years remains to be implemented. It has produced significant reports on a number of sheltered professions, in particular, and most, if not all, of the authority's recommendations relating to dentists, architects, barristers and other professional service providers have not been implemented by the Government. Where recommendations were implemented, no explanation was furnished by the Government as to why they were implemented while others were ignored. It is unsatisfactory that the Government would establish an agency with an important function and then proceed to ignore many of its recommendations without proffering an opinion as to why they were not being implemented. The Government may be correct in many cases not to introduce the changes recommended but, in the absence of an analysis or commentary on why certain decisions are made and others are not, the entire scenario is unsatisfactory. There needs to be a complete change in how Departments deal with the recommendations of the Competition Authority and other arms of Government. There needs to be much more transparency and clarity about why certain decisions are made and others are not. The Minister of State said the heads of the new competition Bill are being discussed and they are due before the Cabinet in the not too distant future. I hope that legislation, which will amalgamate the National Consumer Agency and the Competition Authority, will address the implementation of recommendations from the authority. The current scenario is highly unsatisfactory.

The role of the authority is narrow. It is completely focused on the relationship between the consumer and the retailer. I refer to the relationships between retailers and suppliers, which relates to my greatest criticism of the operation of the authority. Most of the work it has done is good but officials have never focused on the other aspect of competition, which is the relationship between the retailer and the supplier, whether the supplier is a farmer or a wholesaler who sells a product to put it on our shelves. Significant work must be done in this regard and I hope the new Bill later this year will give major powers to the new amalgamated body to examine this relationship. Members on all sides of the House and the enterprise committee have consistently raised the issue of the relationship between large multiples and their suppliers as well as consumers who buy the products at the end of the day.

Representatives of a body appeared before the enterprise committee recently. They referred to competition law and the role of the Competition Authority and whether the primary legislation needed to be amended to ensure a focus on other aspects of competition and not only on the relationship between the consumer and the person from whom he or she is buying a product or service. I hope when the legislation comes before the Oireachtas later this year the Minister of State will give an honest opinion on how he feels competition law should be implemented in future. We have focused primarily on the relationship with consumers and, while it is vital and is the most obvious aspect of competition, there is much more to competition than just the ultimate relationship between the supplier and purchaser of a service.

I will not oppose Second Stage but I will seek to make a number of amendments on Committee Stage to ensure the appointment of temporary members to the authority is done through a more transparent process, that these members will be subject to scrutiny by the Oireachtas before they are appointed and that the criteria relating to the qualifications they hold will be more stringent than the vague definition mentioned by the Minister of State. While I do not oppose the Bill, it is unsatisfactory that we have to rush it through to ensure the authority can continue to function. I do not know whether the primary legislation was too restrictive and did not allow for enough members to be appointed in the first place in the event of resignation and retirement but we have arrived at a position that emergency legislation has had to be introduced to ensure it maintains its role. I do not understand how the process laid down in the original legislation for the appointment of members could not have been set in train before now to ensure we did not arrive at this juncture and have to pass emergency legislation. For that reason it is somewhat unsatisfactory. Given the significant function of the authority, it is crucial this legislation should be passed to ensure it can continue its important work.

I welcome my good friend and colleague, the Minister of State, Deputy Billy Kelleher, to the House. I also welcome the opportunity to participate in the debate on the Competition (Amendment) Bill 2010 and very much appreciate the Minister of State's openness in the latter part of his contribution in which he indicated to the House what is coming. I support much of what the previous speaker said about the outline of that legislation. It will be very important and its title will be along the lines of the consumer and competition Bill. More importantly, the clarity of its content will be very significant. I gather, from inquires I have made with the Department, that it will be sizeable legislation. I understand that currently there are in the region of 140 sections, which means there will be a sizeable measure of detail. I look forward to participating in the debate when the Bill comes to the House.

It was useful that the Minister of State indicated to the House what was coming because it puts the legislation before the House into greater context. This is a very short Bill which is focused and narrow in its scope. One can now understand why that is so, especially after hearing what the Minister of State had to say about the current format of the Competition Authority, its board membership and so forth.

The Bill is prompted by a number of recent departures of members of the Competition Authority. The membership had dropped below its minimum permitted level and this situation warranted immediate correction. It is crucial that the authority, given its importance, is properly constituted in accordance with the Act. We all appreciate that the Competition Authority is very specialised in its work, dealing as it does with issues such as mergers, monopolies, cartels and so on. It is vital the performance and operation of the authority are not subject to any level of uncertainty. The amendment to section 35 of the Competition Act 2002, as provided by this Bill, will safeguard the authority's workings and its decision making. This is necessary since the current legislation does not properly provide for the situation that has arisen where a number of vacancies present at short notice. The Act states that all appointments at member level must by way of a Public Appointments Service, PAS, competition. It takes time to organise such a competition. I am not fully familiar with the methodology but I presume there are procedures in place and each step must be adhered to. None the less, I like to believe we can fast-track such procedures. Even if we do and the successful candidates are identified and are willing to serve, I presume they will have to undergo a procedure following the successful competition. They will also have to give notice arising from existing commitments and so forth. I certainly understand where the Minister of State is coming from when he says this could take some time to organise and that the Bill before us is required to accommodate events.

It is envisaged that the appointment of members under the legislation will be short-term, especially in light of the forthcoming Bill. This will be a complex legislation and I do not know when it will be passed. That means we do not know how long that piece of string will be just yet. The Minister for State said the appointment of members under the Bill before the House would be short-term, for a defined period and would conclude when whole-time members were appointed under the open PAS competition. There are not too many options in this regard and I presume this is the most appropriate way to go.

Why do we find ourselves in this position? We are learning every day, so if people either leave, become ill, die or whatever, vacancies will arise. I hope the new consumer and competition Bill will adequately provide in the event of issues arising. It is the common lot of humanity to learn from previous experience.

The proposed legislation provides for the amendment of section 35 of the Competition Act 2002 to allow for the appointment of the temporary members, including the chair, and to fill a vacancy in the authority's membership arising from death, retirement, resignation, disqualification and removal from office, as the Minister of State indicated. While the requirement to appoint a member, following the PAS competition, may be dispensed with to avoid any doubt, the Bill provides that the Minister, if he so desires, may continue to fill any such vacancy through the PAS recruitment process. I gather these temporary appointments are for a maximum period of six months which may be extended for a further six months. It is intended that the provision allowing for the extension of the appointment would be used only in specific circumstances. This would be where either the PAS recruitment or the selection process has not been finalised or the successful candidate is not in a position to take up the appointment within the defined period.

I gather from the information available that appointees to these temporary posts must possess sufficient expertise or experience of one or more of the following areas: law, economics, public administration, consumer affairs and business generally. The Bill also provides that a temporary appointee is eligible for appointment as a whole-time member within the authority unless he or she has been removed in accordance with the existing provision of section 35(12) of the Act.

This is a very focused and short Bill. It is something we would all sign into and I do not foresee any difficulty. We would all want to ensure the Competition Authority is able to perform its duties and that there is no question of any doubt in relation to challenges or any other issues of which we may not yet be aware.

I welcome what the Minister of State has done and I wish him well. I hope we shall pass this Bill quickly and move on. I look forward to the Minister of State coming back to the House with the new legislation he announced.

The Minister of State is welcome to the House, as is the Bill. I believe the Bill is necessary and that we must have it. I know it is temporary legislation until the main Bill is enacted, and I have read what the Minister of State has said.

In respect of this temporary legislation, we must take cognisance of one of the problems that has arisen in recently whereby nominees to various boards and committees have been accused of being unsuitable because very often they were political appointments. Let us ensure we do not have political appointments in this area. In 1979 the old Department of Posts and Telegraphs was divided between An Bord Telecom and An Bord Poist. Michael Smurfit and I were appointed chairmen, respectively, of the two boards. That was acceptable because it was clear these were not political appointments. In those days it was quite customary, and not unlikely, for appointments to be political.

The other thing that concerns me is that nowadays the best people are not necessarily willing to accept appointments to boards or authorities because of the onerous duties and responsibilities they must accept. We must be careful when establishing regulations that they do not deter the right people from accepting such positions. It is important that changes are made in the way we do business to make ourselves more competitive. I hope this short Bill will point us in that direction.

The only real way to create more jobs is through competition. We must avoid protectionism or going alone in certain areas. I have spoken before about the code of conduct for the grocery trade in Ireland, as mentioned by the Minister of State, which will deal only with the relationships between Irish retailers and Irish suppliers. Thus, it only applies — and can only apply — to Irish suppliers and retailers, which means it cannot be enforced for those whose headquarters are outside the State. We are now part of Europe, and if we pass laws that hinder the operation of Irish retailers and suppliers, we are handing a gift to competitors abroad. Those retailers and suppliers which are based in Britain, Germany or wherever are not affected by it and, no matter how much pressure we put on Irish suppliers in the future, it will work against their interests and therefore those of Irish consumers.

We must remember that there are much wider outside forces at work. We are part of the EU and we must try not to introduce more regulations that may hinder Irish businesses even more. Let us consider the example of the carbon tax. The French, after announcing that a carbon tax was to be introduced, decided against introducing it in the belief that it would hinder French businesses in competition with others. Instead, they are waiting for a more EU-wide implementation of such a tax, as they believe this would be a much fairer way of doing business and would give French businesses a chance to compete. Should we have pushed for the type of carbon tax we have when our competitors do not have such a tax?

I am glad we seem to be becoming more competitive in various ways. For example, fewer shoppers are crossing the Border to shop, not because of any regulations or rules but because we have managed to bring costs down and make ourselves more competitive. We need to recognise this more widely if we are to create jobs instead of merely concentrating on protecting existing jobs. We have much more to do. Certainly the drop in the euro compared with sterling has helped a little, but the costs of energy and rent are still outrageous. We are making ourselves uncompetitive. The Government cannot necessarily do everything in that area, but it can unravel some of the constraints we have.

The Minister for Enterprise, Trade and Innovation, Deputy Batt O'Keeffe, has indicated that following this Bill, his priority will be to provide for the amalgamation of the National Consumer Agency and the Competition Authority. I am concerned about the effect this may have on the retail sector. About 280,000 people are employed in retailing — not just grocery retailing but all retailing — and it must be borne in mind that these two bodies have different views on the code of conduct proposed for retailing. How can we reconcile these different views when it comes to amalgamation? One will have to prevail, and I hope it will be the view that we should not put more constraints on competition, as the National Consumer Agency would have preferred. We must try to reduce costs in this area. I urge the Minister to take these two opposing views into account, especially considering the massive benefit of the retail sector to this country.

The 280,000 jobs in the retail sector depend on competition and on the ability of one trader to be better than another — to persuade customers to drive past another shop and come to that trader's shop. It is a competitive marketplace. The good news, however, is that jobs are being created all the time. Retail Excellence Ireland has had three seminars in the past three weeks. I attended all three: one that finished yesterday in Cork, one the previous week in Limerick, and the first one in the Burlington Hotel. The organisation advertised and ran a free course in retailing to encourage people who are not working in retail to consider a career in this area. I met engineers and architects who had not even considered retail as a possible source of employment. They came along to these free courses in Dublin, Limerick and Cork and left, as far as I could see, with a great deal more confidence than they had before because they could do something about their situations.

I mention this because a number of retailers have said they need more workers. Retail Excellence Ireland reckons that 1,000 jobs will open up in the retail sector before the end of the year. This was an opportunity to give people who would not otherwise have considered a career in retail the opportunity to explore this area. Competition will encourage retailers and suppliers to flourish. The steps being taken by the Government are in the right direction. Let us ensure we encourage competition and that the country's retailers and suppliers, and especially consumers, get the benefit of that competition.

I welcome the Minister of State. I was slightly distracted from the main theme of the debate by Senator Quinn's comments on the carbon tax, to which I may return in a few minutes.

The Bill, which amends the Competition Act 2002, has been forced on us by circumstances, some of which were mentioned by Senator Quinn. There is difficulty in maintaining a board in these times when scrutiny is rightly of the highest order and when the responsibility that goes with holding such a position is of an onerous nature. We probably need a wider debate which would encompass the area of staffing of boards of authorities and State agencies.

What strikes me about this Bill is that the Competition Authority has powers that are devolved from those of the European Union and assigned to national competition bodies across the EU. Thus, there is a European perspective to this, namely, the imperative for us to have an authority that is in good standing should it be in a position in which it must use its powers to examine mergers or initiate criminal proceedings for offences relating to anti-competitive behaviour. If we were to initiate such criminal proceedings, only to find, on appeal, that our competition authority was not properly constituted, this would have major reverberations not only here but in terms of its effect on our good name in Europe, and would be acutely embarrassing. There is no question that the Bill is urgent.

I am not entirely clear about references to the 2002 Act not envisaging this situation. This is where we are and it is important we deal with the issue as quickly as possible. As the Minister of State said, it is in the context of a more substantial Bill that will be introduced later with a view to merging the National Consumer Agency and the Competition Authority.

The issue of appointments is a cause for public concern. I should declare that as a councillor, I was appointed by a Minister to the board of An Chomhairle Leabharlanna, so I have been a beneficiary of the system that exists.

As was the organisation a beneficiary of the Senator's appointment.

It is kind of the Minister to say so. Given the requirement for the highest level of public trust and transparency, it is wise that the new programme for Government envisages an examination of the process of appointment to all of these boards. This is an important commitment which was agreed between the Government parties and which ought to proceed even as we move to have the Bill, which will give the Minister power to make temporary appointments, enacted. Given the particular skill sets the appointees would need in the areas of law, economics, public administration and so on and the weakness of the authority should any such appointees leave, this certainly recommends itself to me. Moreover, it would be worthwhile, in time, to add to this to demonstrate to the public that not only are the people qualified but that they are chosen purely on the basis of qualification and that no hint of grace or favour is involved.

Unfortunately, Senator Quinn has left the Chamber. I wish to address the issue of carbon tax and competition. The Stern report on climate change identifies the latter as the greatest market failure in history. Essentially, we are externalising a cost on to the environment and it will cost us all far more than what the carbon tax currently constitutes. Fine Gael and the Labour Party recognise and agree with this and support the implementation of a carbon levy. The question is how one goes about it. Unlike countries such as France, Germany or Britain that have their own internal power sources, Ireland is 90% dependent on imported fossil fuels. This behaviour must be changed as a nation, as well as in respect of individual businesses and households and it is recognised that one methodology to so do is the introduction of levies that drive different choices regarding energy. As early responders to this issue, this will come to be seen as a measure that provided impetus and momentum to our economy becoming less energy dependent on imported fossil fuels, more self-sustaining and in the medium term, not even in the long term, becoming more energy efficient and therefore more competitive in respect of the output of its business community and manufacturing sectors.

There is an inherent logic to what has been done and it will make us more competitive although I do not disagree that it brings fair amounts of anger and discomfort. As the Minister of State is aware, I am in business and am grumbling too. At the same time however, I am examining the possibility of using the various schemes introduced by the Government to lessen my use of fuel and energy consumption and to negate the impact of a carbon tax while simultaneously making my business more competitive into the future. I wished to address that tangential issue that was introduced by Senator Quinn.

I refer to the issue of competition on this island between North and South. Great improvements in the competitiveness of the economy have been made on this side of the Border, which initially are becoming manifest in the retail sector, in which the position in towns along the Border is stabilising as price reductions of the order of 8% have stemmed the tide. Regrettably however, loss leaders still are being offered in the North, especially in the area of drink. Nevertheless, I believe that as the economy becomes more competitive, it also will become a more prosperous and productive place in which to do business.

The work of the authority must continue. I agree with Senator Phelan that its work in respect of suppliers and retailers is critical. Anecdotal evidence is legion regarding ways in which the supply chain is unfavourable to Ireland's smaller economy when compared with, for instance, that of our neighbour in Britain. I look forward to this authority, and the newly constituted authority that will emerge following its amalgamation with the National Consumer Agency, dealing with such issues in a vigorous manner.

I welcome the Minister of State, Deputy Kelleher, and his officials to the House to introduce this Bill. The Bill proposes to amend section 35 of the Competition Act 2002 to permit the appointment of temporary members to the Competition Authority. It will enable the Minister for Enterprise, Trade and Innovation to appoint temporary members to fill current and forthcoming vacancies, thereby ensuring that its membership exceeds the statutory minimum requirement to allow it to function properly. Obviously, if the validity of decisions made by the authority is never to be impugned, this is the correct thing to do. Therefore, the Labour Party will support this Bill in principle to ensure that the authority is properly constituted, thereby putting it in the position to carry out its important functions.

This is a short Bill and is quite specific in its intent. The Minister is concerned that an improperly constituted authority would be unable to fulfil its statutory obligations and that any decisions made by members in such circumstances would be open to legal challenge. Despite legal reservations the Labour Party might have in respect of the content of the Competition Act 2002 — I refer to section 4 in particular, which the Labour Party sought to amend with the Competition (Amendment) Bill 2007 — it is appropriate for all sides of the House to facilitate the Minister's efforts in this Bill to address the problems that have been identified. The Labour Party will support the Bill because of this. The Minister has promised the introduction of a comprehensive Bill later in the year and I look forward to debating it on behalf of the Labour Party. For that reason, I see no point in debating what is not in this Bill and simply will deal with its contents. However, as other Members have noted, it is astounding to have arrived at this impasse and this illustrates the failure of the Government to ensure that the Competition Authority had the appropriate membership level in the first place. The authority appears to have been carrying a vacancy in its membership since January 2009 or for almost 18 months.

One item that should be included in the legislation that has been promised for later in the year is a statutory code of practice to bring some sense of fair play to the relationship between suppliers and retailers to which Senator Phelan referred previously. A voluntary code of practice will not work because large retailers are used to being in the driving seat and will not voluntarily vacate it. In the main, power in such relationships rests with the bigger retailers, which constantly push out the boundaries and in many cases are driving small companies and growers over the edge and out of business. Under various guises, "hello money" has been demanded of suppliers by large retailers and I note that many suppliers operate in vulnerable areas of the economy. Many of those involved are not in a position to come forward about this matter, some because they fear being de-listed.

The Competition Authority stood idly by while this was taking place. Its excuse, when its representatives appeared before the Oireachtas Joint Committee on Enterprise, Trade and Employment, was that it had only received a small level of complaints on the matter. As a member of that joint committee, I asked whether, given the nature of relationships in this sector and the certainty that fear would prevent greater numbers of complaints, this should not have been a spur for action. Unfortunately, there has been no action and the authority continues to bury its head in the sand and such practices continue. Suppliers and representative bodies that appeared before the Oireachtas joint committee have indicated that unless action is taken now, there will be few suppliers because most of them will have been wiped out with ever increasing levels of unemployment. Ultimately, we all are consumers and shoppers, many of whom have sons, daughters, nieces and nephews who are employed by such suppliers.

In particular, I refer to the problems encountered by those who are involved in the horticultural industry, which is based to a great degree in my locality of north County Dublin. How can such growers be expected to continue in production when supermarkets are selling two cabbages for the price of one? Growers eventually will be wiped out because it is uneconomic to operate at the level to which I refer. It is important therefore that the Minister should examine this matter in detail and should opt for a statutory, and not a voluntary, code. Growers must be guaranteed a fair margin, as should all suppliers. As I noted previously, the Labour Party proposes that such a statutory code should be introduced and that an ombudsman be appointed to supervise it.

As for Senator Quinn's earlier comments on whether such a code would be applicable to companies the headquarters of which were located outside the country, this could be dealt with under Irish law. Is it Senator Quinn's argument that in trying to deal with unfair relationships, it must be open to Irish retailers to be unfair to suppliers in the same way as are retailers from outside the country? This issue can be dealt with and I do not accept this point. It also is important that multinational retailers are obliged to publish their operating margins for their business within this jurisdiction. At present, they only produce consolidated accounts, which do not afford the correct level of visibility. It will be important to have visibility in this regard, if we are to introduce fairness to supplier-retailer relationships.

We have done a good deal of work in that area in the joint committee and we will have produced a comprehensive report, with cross-party support, that is likely to be of assistance to the Minister as he prepares his more comprehensive legislation. In mentioning cross-party support I should say that Senator John Paul Phelan and Senator Ivor Callely are also members of the joint committee. I hope the Minister and his officials will reflect the findings of the joint committee in the proposed Bill.

The Labour Party supports this Bill in principle but will table one or two amendments on Committee Stage.

I join others in welcoming the Minister of State to the House. I welcome this Competition (Amendment) Bill 2010. As the Minister said in his contribution, it is short but important legislation to give the appropriate authority to the Minister to ensure the board of the Competition Authority has the adequate numbers to allow them continue their work.

At no time in our history is the issue of competition and our competitiveness as important as it is today. It is vital that all appropriate ministerial powers are in place to ensure the authority is in a position to continue its work and to do it effectively. In that respect, the Minister highlighted several areas of particular concern which, if this legislation is not expedited and passed through the Houses quickly, would impinge on the authority's ability to do its work and call into question some of the actions it may take, leaving it open to legal challenges and other risks.

The Minister also outlined a number of points on the forthcoming legislation to deal with the amalgamation of the authority and the National Consumer Agency. I would welcome a more full debate on those in the coming months when that legislation is brought forward.

A number of Members mentioned the area of retailing, and I am conscious of the renowned and respected expertise of Senator Quinn. We would always listen to his views but I am conscious that in the Border counties, with the proximity to Northern Ireland and a regime with a different minimum wage, a different taxation system and a lower value added tax regime, a level playing field does not exist. The Minister might reflect between now and bringing forward that legislation on whether measures could be put in place which would give the appropriate cognisance and attention to the clear disadvantage faced by retailers in that jurisdiction. We must have a level playing field and open competition in this jurisdiction but some people are more equal than others in the context of the difficulties the retailers in the six Border counties have had to contemplate and negotiate in these most difficult times.

I do not want to delay the House. As others have said, this is a short Bill. There is nothing to oppose within it. I commend the Bill to the House and look forward to Committee and Report Stages.

I thank Senators for their contributions in this area. As was pointed out, and to which most Senators referred, this legislation is quite specific in the context of ensuring we have the statutory requirement for the make-up of the Competition Authority.

To be honest and open, the position is that the original Act did not foresee the number of resignations from the authority at the one time. As to the reason an appointment was not made since January 2009, there was a proposal that there would be amalgamation of the Competition Authority and the National Consumer Agency. We had a chair plus three members but there have been two resignations since then and we now have a chair plus one member. Since Sunday, therefore, we only have a chair plus one member and it is critical that we get this legislation through the Houses and enacted as quickly as possible to make sure we can bring up the number to the statutory minimum requirement.

On the issue raised by Senator Feargal Quinn with regard to political appointments, whole-time members must go through the public competition recruitment system in place. There are provisions in the Act which stipulate that they must have competency in law, economics or a number of areas. The competencies required are clearly laid down in the Competition Act. Candidates must go through the public services appointment system. That is necessary and welcome.

There is also a commitment in the programme for Government in the context of appointments to these various agencies and authorities. The Oireachtas committees will have an input in making nominations to a panel for consideration and presentation to the Minister for appointment but there must also be democratic accountability. If Ministers make appointments they are democratically accountable in the Houses of the Oireachtas but the programme for Government has specific details on the way appointments are made and the relevant committees will have an opportunity to make nominations and suggestions to a panel of people with the required competencies for the particular agency or authority.

On the issue raised by Senator Phelan regarding the recommendations of the Competition Authority, in fairness, some of the recommendations have been acted upon. About 40% of the original recommendations have been implemented and approximately 9% or 10% are currently in the process but when we try to implement some of them there is some resistance. The recommendations are not always welcome across the spectrum of political opinion in these Houses. Most people acknowledge that governments decide on policy and the Competition Authority, or any such authority as constituted, makes recommendations and governments act upon them.

The Competition Authority has served and is serving a useful purpose in trying to highlight cases of anti-competitive measures or blockages to competition and ensuring there are opportunities for consumers to have access to goods and services at a reasonable rate.

An issue that needs a great deal of discussion across all sections of political opinion in the Houses of the Oireachtas and outside them in terms of stakeholders is the voluntary code of practice for the grocery sector. I have no doubt that if we did not have a code and there was a free for all, so to speak, it is possible that we would drive down the cost of groceries to the consumer but we are not running an economy. We are running a country. We have primary producers in agriculture, horticulture, fisheries and other related areas.

Does the Minister have a new chair? Commissioner Byrne refused the chair.

I mentioned that at the outset. Mr. John Travers has been appointed to facilitate the setting up of the voluntary code of practice. There will be a provision in the forthcoming legislation on the amalgamation of the Competition Authority and the National Consumer Agency to bring that into statutory effect but we must have balanced legislation that is fair and reasonable to all sides, from the primary producer to the consumer. People will have varying views depending on their area of interest or the organisations or areas of industry they represent. However, if we could have a broad debate and come to consensus in the Houses of the Oireachtas it would send out a strong signal in the context of where we see competition fitting into ensuring people get a fair reward for their day's work while ensuring that there are no anti-competitive measures in the supply chain from the primary producer to the consumer that do not allow a fair price to be passed on if there is a price reduction in the particular industry.

I refer to an issue we have raised on numerous occasions. I have met the Competition Authority on several occasions, and I have commented in the Houses of the Oireachtas previously on anti-competitive practices, "hello" money or other forms of what we call the anecdotal suggestions. The difficulty we have is that no one has come forward yet to the Competition Authority willing to present evidence——

They are afraid to come forward.

That may be, but I make the point that no one has come forward. I have asked the Competition Authority to be proactive in investigating that as opposed to waiting for a person to come forward and present evidence. If there is hearsay evidence, has the authority the competency to try to find evidence to highlight whether "hello" money is being used in the broader industry? I have travelled the country and met people from the primary producer up. Some people have clearly stated information to me but when I ask them if they would present that to the authority they say they will not. One would think at this stage that people who have left the business would now come forward. They may not have any material interest because they are no longer in the business but they could come forward and present evidence. I urge anybody who has evidence but who has no material interest or fear of presenting that evidence to come forward. To date that has not happened.

The consumer Bill, which will be published later, will be broad legislation. It is not only about the amalgamation of two agencies but restructuring them in their entirety, from competition right through to the consumer. The code of practice could be placed on a statutory basis in that Bill. We must try in that legislation to provide a balanced code which will be fair and reasonable to everyone and on which there will be genuine buy-in.

On the issues raised, I mentioned the recommendations from the Competition Authority, about 40% of which have been implemented. This Bill is quite specific. It is merely ensuring we have the statutory minimum requirements for the make-up of the authority. There were a few more issues raised by the Senators and I have covered most of them. We will have an interesting debate on the legislation that will be published later in the year.

Border counties were referred to and the issues raised in that context have been the cause of great distress to retailers along the Border. There are some issues that are completely outside our control such as sterling depreciating against the euro which creates a pull to the North. The opposite was the case previously and that was beneficial. We must ensure there is competitiveness in the economy. There are a few areas we need to address and the Competition Authority plays a key role in that. There is a broader Government policy on fuel and energy costs and other anti-competitiveness measures. There is the issue of retail planning guidelines and the size of stores. All these issues are key components in how we structure our economy in the area of retail. We are conscious of the significant pressure on retailers in Border counties and that has been highlighted continually by Senator MacSharry and other public representatives from the region. The Senator has been forceful in trying to come up with solutions to ensure there is no drag from local communities. He was involved in innovations such as encouraging people to stay local, something people should be conscious of. If people take money out of the economy it means that there is less in the economy to support services through taxation. It is a simple matter of arithmetic. If money is spent elsewhere and we are losing revenue, there is less in the Exchequer to spend on badly needed public services.

I look forward to taking Committee Stage quickly and to evaluating any amendments. It is critical that this authority has the competency because at times the EU also delegates some competencies to this authority. There could be a merger or an acquisition at any stage that would have to go before the authority and if it is not constituted, we could be left in a precarious position and there could be legal challenges.

I thank Senators for their broad support and look forward to Committee Stage. When the Bill is passed, I look forward to the publication of the competition and consumer Bill and there being a broad debate on it. I hope there is a consensus in the House in support of that Bill to ensure a system is in place that acknowledges the right of the primary producer to a fair price and ensures the consumer has access to competitive prices in the grocery and retail sectors.

Question put and agreed to.
Committee Stage ordered for Wednesday, 9 June 2010.
Sitting suspended at 1.15 p.m. and resumed at 3 p.m.