Amendment No. 1 is in the name of Deputy Durkan. Amendments Nos. 2, 3 and 16 are related. Amendments Nos. 1 to 3, inclusive, and 16 will be discussed together. Is that agreed? Agreed.
National Oil Reserves Agency Bill 2006: Committee Stage.
Section 1 agreed to.
SECTION 2.
I move amendment No. 1:
In page 6, line 4, to delete "as".
This is a technical amendment.
Amendment No. 1 is not necessary and I do not accept the amendment.
In amendment No. 2, in my name, I seek in page 6, to delete lines 10 to 14 and substitute another definition of "Council Directive". This is necessary as a consequence of the replacement in July 2006 of EU directives on oil stockholding by Directive 2006/67/EC. As part of the European Commission's policy of making legislation more user friendly, all stockholding legislation was codified in July 2006. Oil stocktaking legislation is now encapsulated in one directive, Council Directive 2006/67/EC of 24 July 2006. Consequently the definition of the Council directive as set out in the Bill as published needs to be amended.
A later amendment in the name of Deputy Durkan relates to biofuels and biofuel oil. Is this area governed by European legislation? I cannot speak for Deputy Durkan but I thought his later amendment was a good one. Would the Minister see any merit in including a measure regarding biofuels, even at this stage?
Not at this stage because we are talking about the current oil stockholding. Biofuels would be dealt with under the heading of renewable energy.
Does the Minister wish to discuss amendment No. 16?
That amendment merely provides for the insertion of a comma which was inadvertently omitted in the Bill as published.
Amendment, by leave, withdrawn.
I move amendment No. 2:
In page 6, to delete lines 10 to 14 and substitute the following:
" "Council Directive" means Council Directive 2006/67/EC of 24 July 20061 imposing an obligation on Member States to maintain stocks of crude oil and/or petroleum products;".
Amendment agreed to.
I move amendment No. 3:
In page 7, line 3, to delete ", that" and substitute "that".
Amendment agreed to.
I move amendment No. 4:
In page 7, line 9, to delete "1,000" and substitute "500".
This amendment relates to the number of tonnes of petroleum products allowed exclusively for a person's own consumption, not for resale or disposal to a third party. It proposes to reduce this amount from 1,000 to 500 tonnes. What is the difference in benefit between allowances of, for example, 1,000 tonnes and 2,000 tonnes? The lower the threshold the more inclusive the measure. How does this affect the overall intention of the Bill? The Bill defines an oil consumer as any person who, in the preceding calendar year, (a) imported into the State, (b) acquired, by purchase or otherwise, from an oil company in the State or (c) held in storage in the State, 1,000 or more tonnes of petroleum products exclusively for the person’s own use and not for resale or disposal to a third party. Reducing the figure from 1,000 to 500 tonnes would make the section more inclusive. If there are cogent or compelling reasons the amendment cannot be accepted, I would like to hear them.
I am not inclined to accept the amendment. I see what the Deputy is trying to achieve but the effect of his amendment may be contrary to his intention. The Bill defines an oil consumer as a person who, in the preceding calendar year, imported into the State, acquired from an oil company in the State or held in storage in the State 1,000 or more tonnes of petroleum products exclusively for his or her own consumption. I propose to leave the amount of 1,000 tonnes unchanged. The Deputy's amendment would reduce the amount to 500 tonnes.
The levy has applied since 1995 to oil companies and major consumers of petroleum products. The proposed legislation provides that oil consumers may claim an exemption from the levy if they hold, on an ongoing basis, more than 55 days of petroleum products, based on consumption in the previous year. A decrease in the threshold would impact on smaller users who would be liable to pay the National Oil Reserves Agency, NORA, levy, and also make it difficult for such users to claim an exemption, as it is unlikely they would be in a position to construct the necessary storage tanks to hold 55 days of their operating requirement. The amendment would affect the smaller user.
Amendment, by leave, withdrawn.
I move amendment No. 5:
In page 7, line 17, after "oils" to insert", including oils derived from bio fuels".
This amendment was tabled for obvious reasons, namely, to include oils derived from biofuels. In the descriptions of oils to be kept under storage, the section lists:
(a) motor spirit and aviation fuel (that is to say, jet fuel of the gasoline type and aviation spirit);
(b) gas oil, diesel oil and kerosene (including jet fuel of the kerosene type);
(c) fuel oils.
Given the emphasis now required regarding alternative energy sources and the necessity for all companies and big consumers, in particular, to consider using alternative oils, of which there are a number, it might be inclusive and useful in this regard to mention biofuels which can be used for a multiplicity of purposes. For instance, they can be used easily for home and factory heating purposes, as the octane level is not as high as that in jet fuel. It would be much easier to supply the market from biofuels under that heading. The failure to mention biofuels in this respect sends a bad signal to those outside the House. From the perspective of consumers, the mere mention of biofuels could be taken as a positive sign. While all other oils are described under paragraphs (a), (b) and (c), biofuels come under the heading of fuel oils and should be included.
I support Deputy Durkan's amendment which would be useful when one considers the role being assigned to the National Oil Reserves Agency, NORA, to manage the strategic reserve, as well as ongoing discussions. I refer to the recent announcements made by the Minister, Bioverda and the Port of Cork, as well as various other exciting developments. I understand a Cabinet committee meets across various portfolios on this issue owing to its national importance. In the context of NORA, the existence of blends of biofuels means it would be useful to add them to the list outlined in the Bill in order that they could be included under the heading of petroleum products as some petroleum would be contained in any mix.
I am unsure whether members are aware of the potential effect of the proposed amendment. By way of background, the provisions of the Bill constitute the transposition into national law of EU legislation regarding our stockholding obligations. The Bill will also allow for the continuation of a levy placed on petroleum products since 1995. The definition of "petroleum products" as set out in the Bill derives from EU and International Energy Agency, IEA, requirements to report on petroleum products, as defined in the Bill, on a monthly basis. International stockholding obligations do not currently extend to the holding of biofuel reserves.
While I understand what the Deputy is trying to achieve, in this instance it would be perverse to include a reference to biofuels. If accepted, the amendment would result in the application of the levy to biofuels, thereby adding to their cost. This would be contrary to the current policy to encourage biofuels that has been supported by all parties in the House. I refer to the existing scheme, whereby excise relief for biofuels to the value of more than €200 million will be provided over a five year period. As Deputy Broughan rightly noted, a ministerial task force on bio-energy is in place to provide for a co-ordinated approach in this respect. While I understand what the Deputies are trying to achieve in moving this amendment, it would have the opposite effect to that which they seek and result in the imposition of a levy on biofuels.
I accept that it could lead to the inclusion of biofuels in the levy but I presume this can be provided because another amendment anticipates that. Exclusion in respect of duty on biofuels could be specifically provided for. I know the Minister is referring to the transposition of European law into Irish law. Some of the experiments we have carried out in this area in the not too distant past have not always worked out the way we anticipated. However, I would like to run this one past the Minister. For example, could he not provide for a specific reference to the exclusion of duty from its application to the biofuel sector under this heading?
My point stands. We should not include biofuels in here in order to——
Should they be included in different legislation?
They should be dealt with in different legislation in respect of biofuels and we have already done so.
Amendment, by leave, withdrawn.
Amendments Nos. 6, 22, 24 to 30, inclusive, 33, 39, 45, 50, 51, 54, 57, 59 to 65, inclusive, 76 and 80 are related and will be discussed together. All of the amendments, with the exception of amendment No. 80, are in the name of Deputy Durkan and all of them deal with requiring the approval of Dáil Éireann, so we might have a general debate on all of them. I call on Deputy Durkan to move amendment No. 6 and discuss in general terms what he is attempting to achieve.
I move amendment No. 6:
In page 7, line 20, after "section 5” to insert “, subject to the approval of Dáil Éireann”.
What I am attempting to achieve with this amendment is well known. I am attempting to introduce a requirement for the approval of Dáil Éireann in this area and a number of other related areas because apart from having the approval of the Minister for Communications, Marine and Natural Resources and the Minister for Finance, the House should also be consulted about changes that may and must take place. There is a tendency to bypass the House, which is not necessarily a good thing. It would allow for much greater protection of the House and the Ministers for Communication, Marine and Natural Resources and Finance if a change of any nature, particularly a change of this nature, carried the approval of Dáil Éireann. Any parliament is the supreme authority in terms of debating legislation. When legislation has been passed into law, situations have often changed or Ministers have made orders, statutory instruments and guidelines. I am not attacking Ministers because all of them tend to do it. It turns the intent of a change in a particular area on its head and I moved these amendments to try to reverse this trend.
The Chairman will recall, being a good Cork man, the introduction of the Postal and Telecommunications Services Bill 1982 slightly before he arrived in the House. This Bill ordained that all employees of An Post would always qualify for the same pension and entitlements as civil servants once they transferred. It so happened that this has not been the case. I am using this case as an example because it never came before the House. Statutory instruments and ministerial orders were made but not by the Minister. For all I know, they may have been made by one of my colleagues. At that stage, the public may complain to us that it is included in the legislation. Of course, it is, but it is subject to regulations or statutory instruments. That is where the problem arises. It would be of great benefit to introduce connectivity — to use the buzz-word in energy — whereby a Government or Minister would be obliged to refer an important change to the Oireachtas and not have it noted, discussed and debated only by the Minister concerned and the Minister for Finance. Such referral to the Oireachtas should not be noted "Without debate".
Our well intentioned clerk, or whoever grouped the amendments together, did not understand the ultimate impact of each amendment because they all refer to different matters. The three of us attending this meeting have long experience as company directors, while the Minister has long Executive experience. A dynamic State company must have reasonable flexibility to do its job. Some of Deputy Durkan's suggestions are entirely proper. However, having to go to the Oireachtas on other matters would hamstring the chief executive and the board while they carry out day-to-day basic tasks.
Amendment No. 22 refers to property, joint ventures and partnerships. Although I understand Deputy Durkan's point, I must ask whether such matters should be brought to Dáil Éireann. Amendments Nos. 24 to 30, inclusive, deal with selling property and entering into commercial agreements, matters in which a normal, dynamic and successful company carrying out a major national task would be involved. Do we want Dáil Éireann to scrutinise every action and not ensure the company has reasonable flexibility?
Deputy Durkan's point in amendment No. 33 is valid. It refers to Dáil Éireann approval for the appointment of the directors. Amendment No. 39 deals with another matter, as it refers to remuneration for board members. Again, one could state in a general sense that Deputy Durkan is correct and perhaps it should apply.
Amendment No. 50 deals with subsidiaries. Should the board come to us every time it wants to establish a subsidiary? I put forward a proposal that the National Oil Reserves Agency establish an exploration company. Perhaps it would be small but it would be dedicated. We must move beyond the PAD, an issue to which I will return. Amendments Nos. 51 and 54 refer to the same matter as amendment No. 50. Amendment No. 59 deals with the functions of the chief executive, while amendment No. 60 refers to staff matters such as superannuation. Traditionally, we left such matters to the remit of the board and the chief executive. Amendment No. 76 deals with temporary borrowings and may be valid.
These amendments should not be grouped together. Some clearly relate to the daily and weekly operations of an agency or a company. We do not want Dáil Éireann constantly looking over people's shoulders. In a general sense, the agency must be accountable because it is our company and we speak for the people. Perhaps Deputy Durkan has a valid point in half of the amendments. However, if we were to accept the other half, we would intrude into the operations of the company.
We need to consider these amendments separately. Grouping them in this manner is not helpful. Amendment No. 80 proposes that the agency provide an annual account of the levy, which is a small tax on business amounting to 0.04%. It is proper that the Comptroller and Auditor General, in his constitutional function, should be involved. Section 31(1) states that the chief executive of the agency will "examine and report to Dáil Éireann on the appropriation accounts and reports of the Comptroller and Auditor General", but I suggest that the Committee of Public Accounts be mentioned in the legislation because it is a taxation issue. I was proud to be a member of that committee when I was first elected. It would be difficult for the company to operate if these amendments would constrain the company by instructing it, as a public company, to report back to this House constantly. However, in some cases it should have to report to this House. We cannot treat these 25 amendments in one grouping because they are not the same.
I am inclined to agree with much of what Deputy Broughan has said. I understand that Deputy Durkan is attempting to ensure that people should be as accountable to the House as possible. In this case, the Legislature has its say on legislation and then the Executive carries out the wishes of the Dáil. In some cases the Government may delegate power to third parties. Most of these amendments seek that the Dáil should run the National Oil Reserves Agency, NORA, and make decisions for the company. The problem with many of these amendments has been identified by Deputy Broughan. The Dáil will decide that the share transfer will take place. It is then left to the Executive to carry it out. The Dáil does not need to be involved in the minor details once it has agreed to the principle.
Amendment No. 22 proposes Dáil approval for commercial arrangements. How could one do business if this was the case? The company must make commercial decisions and the board of directors and managers are responsible for this. If they are to be second guessed by the House, no director would agree to take up a position on the board.
Regarding the appointment of directors, there is a well worn argument about the appointment of directors to various State and semi-State companies. Parties in opposition feel that it should be done in a particular way and in government the same parties will do it in the same manner as the previous Government. I do not foresee major changes in this area.
Deputy Durkan attempts to instil the maximum level of accountability but the accountability proposed by his amendments would make nonsense of the situation. It goes too far.
I am not inclined to accept Deputy Broughan's amendment No. 80. Although I favour the concept of people being answerable to this House and its committees, including the PAC, it is already provided for under section 29 which provides for the submission of annual accounts for audit by the Comptroller and Auditor General. All those accounts, which meet some of the points in Deputy Durkan's amendments, include details of income and expenditure. Accounts audited by the Comptroller and Auditor General are presented to the Minister. Copies of the accounts are then laid before the Houses of the Oireachtas and can then be examined by the PAC.
Section 31 allows the PAC to examine the CEO of NORA on all matters related to NORA's expenditure. The only revenue generated by NORA relates to the levy. It will be a private limited company governed by the Companies Act regarding the format in which accounts are submitted and any additional requirements a Minister might put down. Annual accounts have been published by NORA since 1995 and they include the kind of data the Deputy seeks. On enactment of the National Oil Reserves Agency Act NORA will be obliged to lay its annual accounts before the Houses of the Oireachtas and these will continue to provide details of NORA's income and expenditure. Some of the points made by the Deputy go too far and would interfere with the day-to-day running of NORA. The principles of some others are already catered for in the legislation.
While I note the Minister's comments, we should go through the amendments. A long time ago, approximately 1990, I spent three or four months on Committee Stage of the Companies Act. Despite our best efforts and the time and the energy we expended, flaws and reasons we should re-examine the legislation were quickly found. Although it dealt with public and private companies across the board there were still flaws and we spent much time on it. It was a large Bill and the input of time, between three and six months, was soul destroying. The Minister was here at the time. I recall that as an example of how we can never get legislation absolutely as we want it.
I can think of other legislation, the formation of other companies providing services such as manufacturing and processing, that we released from the fold. They proceeded to do what was in their interests to make a profit, which is important. Profit is not very important in this context. The important issue is whether the reserves are maintained and bought and sold at the right price. It would be strange if they paid over the odds while the product was free in the world market. I do not want to go over last week's debate. I ask the Minister to pardon my sensitivity over these matters. I tend to remember them, especially over a short period of time. My short-term memory is working well. For example, in recent times, to be undiplomatic, somebody decided we should increase the price of oil products such as gas and electricity and energy generally. That was done at a time when the international trend was downwards. I do not know if such a thing could happen in this case but I suspect it could. The same rationale as applied in the face of international trends a couple of weeks ago could well apply again to negative effect, notwithstanding the fact that the Minister is in control or that the Minister for Finance oversees the legislation. Notwithstanding the magnitude of the task of converting EU law into Irish law, a mechanism should be included to show the rationale behind proposals before they are adopted. This would be a good time to do so.
I do not want to interfere in the day-to-day operations of the company but it will have responsibilities that could have a substantial bearing on our daily lives, depending on how it does its job. It may not be necessary to accept all the amendments but I ask the Minister to include one or two of them. With that in mind, we might go through them briefly.
I will finish with the point I made at the beginning. The Minister can tell me if I am wrong but legislation often develops a mind of its own and goes off at a tangent. I remember a court case in which a considerable amount of time was spent determining what the legislators had in mind when they came up with particular legislation. Wise counsel on both sides argued for days about what the legislators had intended. The legislator should clearly indicate what is in his or her mind. It is equally important that legislators are aware of any deviations from what they intended at the time of enactment, because circumstances change as necessary. It would be in the interests of protection, accountability and transparency if a couple of the proposed amendments were accepted, including Deputy Broughan's.
If the Chairman does not mind, I would prefer to go through them briefly one by one.
That is the best thing to do. If we deal with them as we reach them, we will have the relevant section of the Bill in our minds.
We are discussing them now.
There are some six or seven aspects. This is not the way to do the people's business.
I am governed by the document in front of me.
Who grouped the amendments?
The Bills Office.
Then it has not read the legislation and does not know what we are talking about.
The Deputy can discuss any amendment he wishes; I have already listed them.
I know that. We are trying to discuss aspects of the operation of the company. It is very difficult to deal with a group of amendments and go back to the beginning again.
I am governed by what is in front of me and advised I cannot go outside the set format. If the Minister wants to consider any of Deputy Durkan's proposals on Report Stage, he can certainly do so. Deputy Broughan has already spoken on the amendments.
The Chair is delaying the committee because it will only take a minute or so to look at each amendment in the context of the section to which it refers. It is ridiculous to skim over the whole Bill and then go back through each amendment.
We are on section 2, the subject of amendment No. 6. Deputies have discussed all the other amendments in the group. If the Deputy wants more time——
The person who grouped the amendments did not understand the legislation.
Would the Deputy like to see the way the amendments are grouped?
I have seen the way they are grouped and do not agree with it.
I cannot do anything about the matter.
The Chairman has the power to do something about it.
I cannot. I am governed by the way the amendments are laid out by the Bills Office.
The Bills Office does not run this committee — we do.
This is the format that has been used since I took this job.
On this occasion those responsible for grouping the amendments do not understand the Bill. We are discussing intricate, detailed and important business here.
The Deputy is more than welcome to speak on any of the amendments that are before him.
We will have to go through them as they are now, through each section.
The Deputy will not do that. He will speak to each amendment as it is set down here.
I will start now and go through each and every one of them, up to amendment No. 80. If that is the way the Chairman wishes to do business, that is the way we will do it. We have discussed amendment No. 6, so let us move on to amendment No. 22.
This amendment states "In page 9, subsection (3)(g), line 29, after “Finance,” to insert “and with the approval of Dáil Éireann,”. This refers to the objects and functions of the agency. It concerns giving the Dáil a role in invigilating the company when it enters into “joint ventures, partnerships or other commercial arrangements with other persons to construct, acquire, maintain and develop in the State or elsewhere works, plant, equipment,”. I can understand Deputy Durkan’s point in this amendment, given the history of various companies that we have invigilated, but in this case I do not agree with the amendment because it would restrict the role of the company executive, and would tie the company down too much.
Amendment No. 24 proposes that the Dáil should approve the company's decision to sell oil stocks as it sees fit. This would not be appropriate because this is the core business of the agency. Oil tickets were not defined when the committee discussed this subject previously with the Minister or on Second Stage. The first time NORA came before the committee we discussed what oil tickets could mean and the extent to which they might apply to oil that we have in Wales or further afield on the east coast of England. Should we have defined them in the context of NORA?
Amendment No. 25 refers to subsection (3)(i) which covers selling “all or part of any other property of the Agency for such consideration as the Agency thinks fit”. I would have some sympathy for Deputy Durkan’s premise in this amendment because in the past the Port and Docks Company tried to do a deal on the national convention centre about which many Members felt the House should have been informed. By contrast, CIE went ahead and did the same deal which will provide the convention centre and everyone seemed to think that was all right.
Deputy Durkan's point in this amendment may be valid if there are major movements of property in this company which will have significant property holdings to house oil stocks. In local government, for example, councillors, for reasons I do not understand, have never been allowed to sanction the buying of property but must always sanction its sale. This amendment should be reconsidered.
Amendment No. 26 refers to subsection (j) which covers entering “into any commercial agreement with a third party in the State or elsewhere”. I do not support that amendment because it is necessary to provide flexibility. The chief executive and officials must have the authority to do their normal business. The subsection however should not cover a mega-deal with Russia or something similar, which I presume would be a state-to-state arrangement.
I will move on to amendment No. 27. This is quite confusing because we are going through the whole Bill, thanks to the——
That is no problem whatsoever. I can be here on Thursday at 12 p.m.
That is fine.
I see some merit to amendment No. 27, which deals with the granting of additional functions to the agency. Could the petroleum affairs division and the technical committee established by the Minister to deal with the difficult Corrib situation be hived off? This is a matter to which the Dáil should give its approval.
The Minister has already addressed amendment No. 28, on the determination of the shared capital of the agency. The Minister and the Minister for Finance should be the key players in this area, keeping an eye on developments, rather than the matter being dragged before the committee. Amendment No. 29 is a similar amendment.
Deputy Durkan's amendment No. 30, on the agency's memorandum and articles of association, is valid. This is critical to the efficient running of the company. If some fundamental changes will be made to NORA, other than what is proposed in the Bill, it should be approved by the Oireachtas, not just the Ministers in question.
Amendment No. 33 addresses who determines the appointments of the directors to the agency's board, an old chestnut. If all the opinion polls are wrong and one of the Opposition Members is sitting in the Minister's chair next year, he or she will want the power to appoint directors to State boards. The ideal system would be for directors to be appointed by an agency, independent of the Government. The Scottish Executive under Mr. Jack McConnell, MSP, although not yet a full independent government, took an initiative by establishing an independent appointing agency. Former and current civil servants, public servants and entrepreneurs with particular talents are selected for the agency and political leanings do not have to be considered. Deputy Durkan's amendment has some merits in this regard.
The Minister often calls for transparent and accountable government. Taking State board appointments out of the political arena is a good proposal. After the recent controversy, it would prevent claims that such-and-such a punter was appointed to a State board because he made such-and-such a contribution to a politician. An independent panel should make appointments of talented men and women that would be available for service in our great State agencies. I will table an amendment on this on Report Stage.
Amendment No. 39 deals with the approval of expenses for the board's directors. I do not agree with Deputy Durkan on this matter. This should be left to the board as most State boards tend to get this right. There was a controversy about the remuneration for the chairperson of An Post. The Minister decided her income should be doubled because she was spending half the week full-time at her job. It was discussed by the committee, although it had no control over it. I do not believe the House should be discussing these types of mundane matters.
I support amendment No. 45, in the name of Deputy Durkan, which relates to the strategy statement. I have no wish for the House to be sitting on the board's shoulder but there is no reason strategy statements should not be approved by the Dáil, perhaps following a short debate. We are all aware this is an issue that is becoming increasingly important, without going into all the issues to do with topping up. It is interesting to look at websites such as those of Chevron or BP and see the estimates for the quantity of oil left and so on. The Dáil should be allowed to discuss what is public business.
Amendment No. 50 relates to the power to establish subsidiaries, as set out in section 16. As I said, one of the subsidiaries I envisage is some type of exploration agency, similar to the Danish exploration agency, which would acquire expertise in this area. Whether one agrees or disagrees with the protestors in Corrib, we must consider what action should be taken in regard to the vast resources that almost certainly are to be found in our hostile seas. Deputy Durkan has a good point in seeking a debate on this issue in the House.
Amendment No. 51 relates to the memorandum and articles of association. If the Minister agrees to the establishment of a subsidiary company, the memorandum and articles should be approved by the House, given the role of the company in question. Amendment No. 54 is related. Deputy Durkan has a strong case for the proposals in regard to subsidiary companies.
Amendment No. 59 relates to the functions of the chief executive officer.
Amendment No. 57 is also being discussed as part of this group of amendments.
I missed that one. I thank the Chairman for entering so fully into the spirit of the proceedings. Where are the representatives of the Progressive Democrats, the Green Party, Sinn Féin and the Independents? We are getting down to the nitty gritty, the most important business of the Dáil. I appreciate the Chairman's role in this regard
I am totally committed to my role and will abide by its rules. I understand Deputy Broughan must do his job also. I remind him that if we do not finish by lunchtime on Thursday, I am prepared to return to Committee Stage next week. That is the commitment I have to this legislation.
I always knew that was the case.
That is the tradition.
People from Cork are always committed.
It is up to the Deputies.
Amendment No. 57 relates to the appointment and term of office of the chief executive officer. My comments regarding the board of directors could also apply in this case. Given that the chief executive officer is appointed by the board of directors, there may not be a need for Dáil approval in this instance.
It is always interesting to discover the process by which chief executive officers are appointed. Yesterday, for example, the director of services for planning and property for Fingal County Council was appointed. Several high profile county managers applied for the job. It is a role that is crucial for the 300,000 residents of Fingal, the fastest growing political county. People are always interested to know how decisions are made in regard to great jobs such as that and whether the best person is always appointed and so on. I am not particularly exercised on this amendment; perhaps Deputy Durkan will make the case later.
Amendment No. 59 relates to the functions of the chief executive officer, as set out in section 20. Subsection (7) stipulates that he or she shall not "hold any other office or position or carry on any business, trade or profession without the consent of the directors". Perhaps that is reasonable enough given that it is such an important role. I am not sure if there have been examples of that recently. There were certainly people on super contracts who seemed to be doing two or three major projects at the same time. I do not know what the job of a Minister entails but I imagine it is, at times, a 24 hours a day, seven days a week type job. The job of a Deputy is somewhat similar. Perhaps it is a 24 hours a day, six and a half days a week job. Is it not therefore a reasonable request that this would apply?
Amendments Nos. 60 to 65, inclusive, relate to staff. As I said, perhaps the chief executive and the board should have the final say. The superannuation scheme, retirement and related matters are included. Usually and properly, all those matters are dealt with by the board of a company. The Minister's initial comments would very much apply to them.
Amendment No. 76 relates to temporary borrowing. Dáil Éireann has been added on. Obviously, the approval of the Minister is the key issue here. Last week in the House we spoke about the famous occasion when the Minister's predecessor got an awful shock when he found the ESB had gone to New York to negotiate very good terms. Being a great State company and part of the general national debt, it was able to get very good rates. The former Minister, Deputy Dermot Ahern, was really upset about it. At least we have a fall back here. I am not sure if there was such a requirement in the ESB legislation but I believe there probably was. However, most people believed the ESB did the right thing because it was operating as a progressive, dynamic company. I am flexible whether we should include this here.
I refer to amendment No. 80 in my name. The Committee of Public Accounts is the only committee of the Dáil mentioned in the Constitution, so I do not know why it is referred to in this rigmarole. The 12-member committee and the Comptroller and Auditor General are mentioned in the Constitution and they both have constitutional roles. Those of us who enjoyed membership of the Committee of Public Accounts — I believe the Minister was a member at one stage — will know people cannot ramble in and out of meetings and talk about a subject for which the committee is responsible.
Last week the clerk to the committee and the Chairman organised a meeting with Bord Gáis Éireann and the ESB in regard to prices. However, a committee dealing with State companies has a different type of experience than the Committee of Public Accounts. Will this committee exist in the next Dáil? The Department will have a corresponding committee but, almost certainly, there will be a different type of Department. I have always believed that in the case of this Department, there are two and a half Departments in one yet there are Mickey Mouse Departments which do not have one tenth of the business of this one and which have Ministers at the Cabinet table. This Department may not continue to exist in its current format.
The committees do not seem to have sufficient powers to invigilate the semi-State bodies. Since I have been a member of this committee I believe Bord na Móna has appeared before it only once. Bord Gáis Éireann and the ESB have appeared before it three or four times. The regulators and others have also appeared before it. It is difficult for us to have detailed discussions on the annual reports of the semi-State bodies. The committee has limited powers and the only time we had such a detailed discussion, as used to happen at the Committee of Public Accounts, was in the case of An Post. We certainly rattled An Post at various times regarding accounts, turnover and performance in the same way as the Comptroller and Auditor General and the Committee of Public Accounts, going line by line through its achievements and aspirations and what money remained outstanding. We have not really had that opportunity with the other bodies. When they attend the committee, we discuss strategy, plans and the company's function, but we do not invigilate its financial performance. That was the genesis of my amendment. The Minister may remember that there was once a Joint Committee on State-Sponsored Bodies with a significant role, scrutinising the accounts of each semi-State body or agency. That was my starting point.
My general point is that regarding the day to day business of approximately ten such bodies, one would have to allow them to function as formal agencies in as proactive and dynamic a manner as possible on behalf of the nation. One cannot make every decision for them. On amendments Nos. 60 to 65, inclusive, I do not agree with the Dáil interfering in such bodies, but there are three or four others where we might have a role, especially regarding appointments.
Amendment, by leave, withdrawn.
Amendments Nos. 7 and 77 are related and may be discussed together.
I move amendment No. 7:
In page 7, between lines 20 and 21, to insert the following:
" "Standards in Public Office Commission" means the commission established by section 21 of the Ethics in Public Office Act 1995 (as amended by the Standards in Public Office Act 2001);".
This may not be the best or most economic means of imposing standards, but there must be some degree of responsibility, accountability and transparency for decisions made by the directors of companies. I speak not of this company in particular but of any accorded a specific authority or role fundamental to the country's economy and the daily lives of its people. This company will have such an impact — or none, depending on the legislation, but we always hope for the best. The reference to the Standards in Public Office Commission is particularly important because several things could happen. I do not want to anticipate worst-case scenarios, but, with all due respect to the Minister for Communications, Marine and Natural Resources and the Minister for Finance, a decision might be taken that seems fine to them but extraordinary when laid before the Dáil for approval. The reference is to focus attention.
Amendment No. 77 deals with exactly the same matter. It means that the standards applicable to the operation of a company or board should be aligned with those that apply to Ministers and Deputies regarding ethics in public office and the discharge of their respective duties. I mention the Dáil in this area to remove sole responsibility from Ministers. It would be to their advantage to be able to say that the matter was laid before and approved by the Dáil, even if it is discussed for only 20 or 30 minutes. I can think of decisions made by boards during my time in this House regarding which retrospective approval would not have been granted. Other controversial decisions may well be made, even from here on. I do not want to anticipate what may happen, but it is important that the standards that apply to Ministers and Members of the Oireachtas should be applicable to members of a board.
I support Deputy Durkan. Directors carry out key public functions and being a director of a State-sponsored body or semi-State company has important requirements in terms of accountability, transparency, etc. After the general election every Deputy will have to produce a tax clearance certificate. Are the standards applied to Ministers and Members of the Oireachtas applied across the semi-State and State agency sector? Would it not be worthwhile to give the Standards in Public Office Commission a role in this area so that interests will be made known? Every January we must list our interests and bring the list to the commission in Leeson Street. This has been the practice for approximately ten years. It is right that we who choose to make legislation should provide a tax clearance certificate, have our tax affairs in order and provide a list of our interests. Is it not fair that we should require members of this company's administration to be subject to the Standards in Public Office Commission in this regard?
What both of these amendments try to do is to add another layer onto the fairly stringent standards laid down for companies and directors of companies. A company like the one we intend to set up is set up under the Companies Act and is bound by all the legislation relating to that Act. In addition, with regard to anybody becoming a board member, the companies make written declarations that there is no conflict of interest. There are rules and regulations in place for State bodies and these mirror what is in the Ethics in Public Office Act. Regulations under that Act are prescriptive regarding public bodies, designated directorships and positions in public bodies. The 2005 regulations cover all these areas.
The Deputies' objective is laudable, but the situation should not cause confusion, no more than for Ministers and Deputies. We get into a panic every year trying to ensure we have forgotten nothing when completing our form to comply with the Ethics in Public Office Act. Some years ago, former Minister for Finance, Charlie McCreevy, streamlined the process for us so that we would not have to make four or five different declarations. What the Deputies suggest here would mean that as well as having to comply with company law, and under the Act there are regulations and codes of governance the Minister must approve with the consent of the Minister for Finance, we would add another layer for them to comply with. This would not be wise. Apart from anything else, it would cause confusion. I am not inclined to accept the amendment.
Amendment, by leave, withdrawn.
Section 2, as amended, agreed to.
Section 3 agreed to.
SECTION 4.
Amendments Nos. 8 and 9 form a composite proposal. Amendment No. 11 is related and will be discussed with amendments Nos. 8 and 9.
I move amendment No. 8:
In page 8, line 6, after "transfer" to insert "to him or her".
I await the Minister's comment.
My comment will be short. The amendment is a technical one which, if accepted, would not add to or change the meaning of the section in any way.
It would be more inclusive.
No. The words "him or her" are understood in the meaning.
Not always. I used to share that thinking until I saw legislation before the House in which the term "he or she" was mentioned specifically. In achieving optimum requirements and the interests of equality, modern thinking, transparency, expansiveness and so on, the amendment would do no harm.
The amendment is unnecessary.
Amendment put and declared lost.
I move amendment No. 9:
In page 8, line 8, to delete "to the Minister".
Amendment put and declared lost.
Section 4 agreed to.
SECTION 5.
I move amendment No. 10:
In page 8, line 12, after "which" to insert "the".
This is a technical amendment providing for the inclusion of the word "the", which was omitted in the published text.
Amendment agreed to.
I move amendment No. 11:
In page 8, lines 12 to 14, to delete all words from and including "transfers" in line 12 down to and including "Minister" in line 14 and substitute the following:
"shall transfer to the Minister, the share owned by it in the National Oil Reserves Agency Limited".
I would like to hear the Minister's comments.
He has spoken on this matter. We discussed amendments Nos. 8, 9 and 11 together.
The Minister did not refer to this amendment specifically.
We have debated the amendment.
I will examine the amendment before Report Stage, but it would not change anything one way or another.
It was tabled for insurance purposes.
Amendment put and declared lost.
Section 5, as amended, agreed to.
Sections 6 and 7 agreed to.
SECTION 8.
Amendments Nos. 12 and 13 form a composite proposal. Amendment No. 14 is related and will be discussed with amendments Nos. 12 and 13.
I move amendment No. 12:
In page 8, subsection (1)(a), line 34, to delete “maintaining” and substitute “maintaining,”.
Amendments Nos. 12 and 13 are technical ones that the Minister may or may not accept. Regarding amendment No. 14, the phrase "reflecting energy situations" would be an important addition because dramatically different circumstances may arise from time to time. For example, we have spent much time in recent years talking about stocks sufficient to get by in emergencies. Different issues may affect that to a considerable extent. The energy situation may change from time to time. Obviously it may be beneficial to plan, but if worldwide energy stocks and elements like refining facilities which can affect stocks decline, there will be a need to reflect that in energy provision. The phraseology in the amendment might not be the best, but what is intended is that the Bill would include a provision whereby action could be taken on the basis of prevailing stocks which would in turn trigger action of perhaps a different kind.
Does Deputy Broughan wish to contribute on those three amendments?
I support Deputy Durkan.
As Deputy Durkan stated, amendments Nos. 12 and 13 are technical. It just depends on whether one likes commas in different places. The Bill is all right as it is. I do not propose to accept those amendments.
On amendment No. 14, no doubt Deputy Durkan will be pleased to note that we anticipated his desires and in section 32 we provide for a direction by the Minister to the National Oil Reserves Agency, NORA, to hold oil reserves at a higher level should the Minister so direct. That would meet what Deputy Durkan seeks if there was a sudden change in energy provision generally, oil disruptions or anything else. The power is already contained in the Bill, at section 32.
I compliment the Minister on his foresight and vision, without which our time here would be wasted. He has given an undertaking that amendment No. 14 is incorporated in a subsequent section.
Amendment, by leave, withdrawn.
Amendments Nos. 13 and 14 not moved.
Amendment No. 15 is in the name of Deputy Broughan. Amendments Nos. 21, 23 and 79 are related. Amendments Nos. 15, 21, 23 and 79 will be discussed together.
I move amendment No. 15:
In page 9, subsection (1), between lines 5 and 6, to insert the following:
"(f) monitoring the Irish oil industry and market and work in conjunction with the Commission for Energy Regulation and the Competition Authority to ensure an open, competitive and transparent market.”.
This is an attempt to insert an amendment into the objects and functions of the agency relating to information, guidance, the holding of oil stocks, the levy and so on. My amendment, to be inserted after subparagraph (e), provides that an objective of the agency should be inserted as outlined in the amendment.
This obviously relates to the savage increases at the petrol station forecourt following on the massive increases over the three years since 2003. I suppose we are now delighted that the price of unleaded petrol has been reduced to €1, €1.02 or €1.03 per litre, but we experienced that era when it hovered at €1.20 and looked set to increase further. In addition, Ireland was incapable of mounting a response similar, for example, to that of the American Government whereby President Bush released stock held by his national oil reserve and major oil companies.
Significant numbers of filling stations, particularly in urban areas, have closed in recent years. Seven have closed in a relatively small area in the eastern half of my constituency. This has left some people six or seven miles from a filling station. The Competition Authority has a fundamental role to play in the increases. Media commentators correctly questioned why increases on the oil markets had translated ruthlessly into major increases at filling stations and heating oil companies and so on for domestic consumers and whether the State should play a more significant role in this regard. We heard from the authority but there was a dearth of information. Very few know how the liquid fuels market operates, while many of us know a great deal about the electricity and gas markets.
Last week the Competition Authority missed the deadline for making a decision on the Topaz takeover of the Statoil network. That is an extraordinary failure by a Government agency which would have resulted in heads rolling all over the place in the private sector because it was a fundamental mistake. The concentration of the oil market in a number of companies has been permitted without any invigilation whatsoever and there is no role for NORA in this. Amendment No. 15 provides that with the Minister it would begin to acquire a detailed knowledge of the oil and liquid fuels market generally, especially given the impending diversification into biofuels and so on. The CER would also have a role. In the other Bill we will discuss tomorrow, I tried to do the reverse and give the CER a role in the regulation of oil products and liquid fuels generally, with NORA having a broad interest in examining how oil products are performing in the market. It could be one of the agencies to warn us if serious price gouging and profiteering take place.
The Competition Authority did its job regarding a number of cartels in the west and mid-west. People have been taken to court to face fines and jail for entering into price rigging agreements for heating oil. However, it is extraordinary, as I pointed out on Second Stage which was taken shortly after the Labour Party conference in Donegal, how the price of petrol is the same everywhere between Donegal and Dublin and how there is not much local competition. The Bill provides that a key function and object of NORA should be to provide, on its own initiative, information or guidance and that it should generally monitor the entire industry and be prepared to alert the CER and the Competition Authority to what is happening. That is why the market is not competitive and open, as it should be. The Minister will probably not support my proposal tomorrow.
The other amendments are related to this amendment. Amendment No. 21 proposes the insertion of a paragraph between lines 26 and 27 of the section. The first part of the section deals with the powers of the agency in carrying out its functions. It will be a busy agency that will require a major physical presence in ports and other areas. Amendment No. 21 proposes the insertion of paragraph (f) to provide that the agency has power “to co-operate in conjunction with the Commission for Energy Regulation and the Competition Authority in monitoring the Irish oil industry and market”. In other words, it provides that the agency would have such a monitoring role. While the Minister might reject this amendment, I ask him to reflect on the role of the agency in holding stocks and the impact the holding of stocks could have on the market in terms of companies that hold stocks for us here or abroad. It is appropriate that amendments along these lines should be made.
Amendment No. 23 proposes in subsection (3)(h) after the words “to sell, as the Agency thinks fit,” the insertion of the words “and after taking full account of the maintenance of the optimum level of stocks so as to ensure the security of oil supply”. We discussed this issue at the start of our consideration of the Bill and the Minister said we had 115 days supply of oil. I am aware of the 90-day rule and I said that, according to the latest EU target, member states were requested to hold 120 days supply of oil at that time. I do not believe we had 120 days supply at that time. Is the Minister aware of the number of days supply of oil we have today? If the agency was to dispose of stocks, it must carefully consider maintaining an optimum level of stocks for security, as that is its primary role and the reason we are setting it up in the first instance. Therefore, I thought it would be useful to insert the words proposed in amendment No. 23 to ensure that the chief executive, board and staff of the agency would always be aware of this requirement.
Amendment No. 79 to section 30 relates to the provision of information to the Minister. This section provides that the agency shall make information available to the Minister on the industry and market on matters such as the performance of its functions, strategy accounts, economy and efficiency in the use of resources, policy activities and so on. My amendment proposes that one matter on which the agency should report to the Minister is key information on the Irish oil industry and market and to make this information available when necessary to the Competition Authority and to the CER, as I will propose tomorrow when we deal with the other Bill. Although this matter is a different ball game, it is equally as important as the area of communications. I believe the Minister has accepted the Labour Party proposal that ComReg and the Competition Authority will have co-competition powers, but this provision is equally important.
I received — I am not sure if the Minister did — ferocious complaints about the cost of home heating oil not to mention the financial pain experienced by motorists at the petrol pumps. Many people who work in the vicinity of this House commute from areas throughout Leinster, the Minister's constituency and north of that area. People found the price of fuel financially painful at that time. The burden was particularly heavily on senior citizens throughout the country, particularly in terms of the cost of their home heating oil bills, of which they normally have two during the winter. In that respect, many households in the city are lucky in having gas heating, although the cost of gas is now dearer than oil. At the time to which I refer the cost of heating oil made matters horrendously difficult for people.
VAT is also charged on the price of oil. I hope VAT charges on oil, gas and electricity will be reviewed in the forthcoming budget. Perhaps the CER should be involved in this area and it would indicate what the position is. Policymakers such as the Minister have an executive function, while we in the Opposition try to advise him and propose that if we were in his position we would do X, Y and Z. There is a dearth of information in this area.
I pointed out how the oil or liquid fuel market works. At the time of the Fisheries Bill, one of the key problems we had to deal with was a lack of information. Six months on we no longer have distinguished journalists attending our committee meetings, but when they were here they were laying down the law. However, neither the journalists, Opposition members nor the Minister knew what the true story was in areas of the fishing industry. In that context, we should make it our business to ensure the Minister is kept fully informed of the performance of oil flows, stocks and markets. The Minister might argue that will happen anyway but perhaps he will consider specifically inserting such a provision, by involving the CER.
We are all acutely aware of recent oil shocks. We also regularly receive information from Mr. Campbell and his colleagues concerning peak oil. They argue that we will reach peak oil the year after next. Therefore, whatever the shape of the next Government, it will be historic because it will govern at a time when oil supplies have peaked. At that point oil discoveries will decrease and we will have to deal with an ever diminishing stock of same. Chevron has argued that it will happen in 2037. I hope we will still be around then, reflecting on our lives in politics. It is a long way into the future and the Minister will probably have written his memoirs by then. It will be interesting to read his opinion on events in recent weeks.
We need to know what is happening in the world of oil and should make that clear to NORA, as it sets sail in the guise of our enforcement oil stocks company.
.
I ask the Minister to respond to amendments Nos. 15, 21, 23 and 79.
Deputy Broughan's amendments, while wonderful, are not appropriate to this Bill. The function of NORA is to maintain strategic oils stocks, in line with Ireland's international stockholding obligations. While it is a commercial body, its core business is not to trade in oil or interfere in the oil market. The stores that are held by NORA are there to provide for disruption of oil supplies so that if somethinggoes badly wrong, we have stocks that can be used——
Would NORA not know precisely what stocks oil companies such as Topaz or Shell have? Would it know how old the oil stocks are? Under section 8(1)(b) one of NORA’s objects is that of “providing, on its own initiative or at the request of the Minister, advice, information or guidance to the Minister on any matter relating to the holding of oil stocks”. By definition, is NORA not in a unique position to provide the Minister with that kind of information? Why not share that information with the Competition Authority to bring transparency to the oil business?
It is not the business of NORA to interfere in the oil market in such a way as to influence oil prices. Its role is to hold strategic oil stocks. NORA is aware of the stocks that are available in the country because the levy is calculated on that basis. There are also pretty extensive powers in Acts for the Minister to "take control of stocks" in the event of major disruptions or otherwise. There is fairly extensive legislation in that regard to protect the national interest.
From that point of view, this is NORA business. The Irish oil industry is fully privatised, liberalised and deregulated. There is free entry into the market. It would not be appropriate for the role of NORA to be extended to monitoring the Irish oil market in the manner suggested by the Deputy. It will know what is happening, what is available and what is not.
The Deputy rightly points out that all, or quite a bit, of the area he spoke about is a matter for the Competition Authority. With regard to some of the points raised by the Deputy, the powers of the Competition Authority extend to the examination of acquisitions and mergers. It is a statutory independent body with a specific role to enforce Irish competition law. The role of the authority is to ensure competition works well for the benefit of customers throughout the economy.
I am not sure how often it has happened, but in that role it can, from time to time, seek specific information from public bodies. I assure the Deputy that if it had looked for information on oil stocks or anything else, or if it might need that context from NORA, that agency will more than willingly give the information, as it is legally obliged to provide it. I do not believe it appropriate for the CER to be involved in the oil industry, to be honest, as the CER is involved in the electricity and gas sector. There is quite a distinct difference.
With regard to the holding of stocks, we are legally obliged to have 90 days of stocks. That is all we are legally obliged to have, and it is the stipulation in Europe, from the IEA and so on. There are slight differences between the IEA calculations. We have more than 90 days anyway. The Deputy asked a question, and as of today we have about 107 days of supply available. When we speak of 107 days of supply, it is the equivalent of 107 days of supply. Clearly if there was a major shock or emergency, and rationing or controls had to be introduced, the 107 days could be extended quite considerably.
There is no obligation anywhere on anybody to have 120 days. The Deputy mentioned Mr. Bush being in a position at some stage to release some oil, and there was a particular difficulty. It might be of interest to the committee to note that when Mr. Bush was in difficulty after Hurricane Katrina, there was a call for the release of stocks through the IEA. Stocks were released, and we released some in that context. We actually helped Mr. Bush and the United States out of their difficulties at that time.
Amendment, by leave, withdrawn.
I move amendment No. 16:
In page 9, subsection (3), line 10, to delete "the" and substitute ", the".
Amendment agreed to.
I seek a suspension of business as it is 4.15 p.m.
That is what we agreed.
We have discussed about two thirds of the amendments at this stage.
At what time will we resume?
At 5.15 p.m.?
Is that agreed? The Minister has a difficulty.
I have an appointment at 5.30 p.m. It is a matter for the committee but I understood we would finish around 5.30 p.m.
We can resume as soon as the Order of Business begins in the Dáil. We could resume at 5 p.m.
I am in the hands of the committee. We discussed this before the Minister arrived. I must be advised.
We can come back at 5 p.m. for half an hour if Deputy Durkan can be contacted.
Will Deputy Broughan take it upon himself to make sure Deputy Durkan is contacted?
The key part of the Order of Business should be over by then.
Is the Deputy's party fighting about anything today?
There are always issues.
Sitting suspended at 4.15 p.m. and resumed at 5.05 p.m.
I move amendment No. 17:
In page 9, subsection (3)(a), line 15, after “oil” to insert “, in accordance with market indicators”.
Will the Minister comment? He has been resting.
Does Deputy Durkan want to speak first?
I will speak in a moment when I regain my breath.
I will give the Deputy a chance.
Amendment No. 17 is similar to a previous amendment.
Yes. The primary objective of the NORA is to maintain oil reserves for the purpose of meeting Ireland's international oil stockholding obligations. The acquisition of oil stocks by the NORA must take account of its financial resources and costs and best value for money. The Bill proposes that the NORA will continue to have the responsibility for holding and maintaining oil reserves to allow Ireland to meet its international obligations. To achieve this objective, the NORA will continue to build its oil stocks.
A basic tenet of the NORA's policy and actions is to ensure that it is getting value for money when purchasing oil, but this amendment would fetter the NORA in how it would make its purchases. While the Deputy's intention was to help the NORA, his amendment might inhibit it. For this reason, I will not accept the amendment.
I am saddened that the Minister will not accept my amendment. I am about to burst into tears, but he will excuse me if I do not.
It might be a good idea to include a similar provision somewhere in the Bill. For example, the National Treasury Management Agency is given specific responsibilities relating to the market in respect of other issues. The agency can buy and sell in the market, negotiate, renegotiate and so on regarding the national debt and has been doing so effectively. Recently, the agency was given other responsibilities, which indicates that it has been successful.
Section 8 might not be the right part of the Bill in which to interpose my amendment, but acquiring, purchasing or otherwise holding, storing, importing, exporting, transporting or exchanging oil is essentially the same as the work of the National Treasury Management Agency in respect of another product. It might not be a bad idea to have a "saver" whereby the agency would be expected to do this. The other legislation is more specific and the provision is stated more clearly. The agency is doing a wonderful job and if the NORA had a similar vision, it could be beneficial for everyone.
I will examine the Bill in general to determine whether there is a place for the amendment. It might be more appropriate to the articles of association.
I will withdraw the amendment in anticipation of the Minister's magnanimity.
Amendment, by leave, withdrawn.
Amendments Nos. 18 and 19 form a composite proposal, while amendment No. 20 is related. Therefore, amendments Nos. 18 to 20, inclusive, will be discussed together.
I move amendment No. 18:
In page 9, subsection (3)(c), line 19, to delete “develop” and substitute “develop,”.
These are technical amendments.
What the Deputy is trying to achieve is already covered in the Bill. One of the amendments involves the insertion of a comma, about which we can argue one way or the other. It may satisfy him to hear that in a number of cases I think he is correct grammatically, but I am told by the Parliamentary Counsel that the Bill is correct legally. The Parliamentary Counsel seems to use a different language. I will go by the advice of the Parliamentary Counsel because it is always safer to do so in such cases.
Amendment No. 20 proposes that appropriate ships, vehicles and other means of transportation be engaged by NORA. I am not in favour of inserting extra words which are superfluous into sentences. It must be appropriate or they will not be used.
Amendment put and declared lost.
I move amendment No. 19:
In page 9, subsection (3)(c), line 20, after “elsewhere” to insert “, appropriate”.
Amendment put and declared lost.
I move amendment No. 20:
In page 9, subsection (3)(d), line 22, after “engage” to insert “appropriate”.
Amendment put and declared lost.
I move amendment No. 21:
In page 9, subsection (3), between lines 26 and 27, to insert the following:
"(f) to co-operate in conjunction with the Commission for Energy Regulation and the Competition Authority in monitoring the Irish oil industry and market.”.
Amendment put and declared lost.
I move amendment No. 22:
In page 9, subsection (3)(g), line 29, after “Finance,” to insert “and with the approval of Dáil Éireann,”.
Amendment put and declared lost.
I move amendment No. 23:
In page 9, subsection (3)(h), line 35, after “fit” to insert the following:
"and after taking full account of the maintenance of the optimum level of stocks so as to ensure the security of oil supply".
Amendment put and declared lost.
Amendment No. 24 not moved.
I move amendment No. 25:
In page 9, subsection (3)(i), line 38, after “Finance,” to insert “and the approval of Dáil Éireann”.
Amendment put and declared lost.
Amendment No. 26 not moved.
Section 8, as amended, agreed to.
SECTION 9.
I move amendment No. 27:
In page 10, line 6, after "Finance" to insert "and Dáil Éireann,".
Amendment put and declared lost.
Section 9 agreed to.
SECTION 10.
I move amendment No. 28:
In page 10, line 15, after "Minister" where it secondly occurs to insert ", and approved by Dáil Éireann".
Amendment put and declared lost.
Section 10 agreed to.
Amendment No. 29 not moved.
Section 11 agreed to.
Section 12 agreed to.
Amendment No. 30 not moved.
Section 13 agreed to.
SECTION 14.
I have confirmed with the Bills Office and the Ceann Comhairle's office that the procedure used by the Bills Office in drawing up the amendments was correct.
It is difficult for Bills Office staff when they have not drafted legislation and they know nothing about it.
The Deputy should bring the matter to the attention of his party's Whip and, perhaps, the commission or another committee of the House could deal with changes.
The commission will not do that. The Chairman could have made a name for himself. I regret that he did not.
Absolutely.
Amendments Nos. 32, 34, 35 and 44 are related to amendment No. 31 and all will be discussed together.
I move amendment No. 31:
In page 10, subsection (1), lines 34 to 37, to delete all words from and including "of—" in line 34 down to and including "director." in line 37 and substitute the following:
"of not more than 5 directors (including the chairperson).".
This amendment refers to the deletion of Part B. The issue of whether the chief executive is a director has been discussed widely in recent days in the context of a voluntary organisation which, like political organisations, includes a top level professional group. It is a better system of corporate governance where the chief executive reports to the board. It is standard practice in the community and voluntary sector for the chief executive to withdraw, with the board ultimately making decisions. Is the director general of RTE the equivalent of a chief executive? Is he a member of the RTE authority? Many companies have managing directors but in the past two decades the chief executive of most companies has been in total operational control. A number of private sector organisations appoint an executive chairperson and some responsibilities do not fall to the chief executive officer. The chief executive of the Football Association of Ireland is also a director and the Genesis report on the association required that the chief executive not be a director for the best governance of that body. Would it not be better if the board of the agency had day-to-day control with the chief executive officer reporting to it?
The section provides that a person appointed shall be a person who, in the Minister's opinion, has experience and competence in one or more of the following areas: oil or oil related industries; chemical or chemical related industries; finance; economics; legal matters, which relates to our earlier discussion; and energy production and supply industries. Amendment No. 34 proposes the insertion of the words "but notwithstanding any involvement which may cause a conflict of interest to arise when carrying out their duties as a NORA director". A person appointed should not be actively involved in the oil market or hold stocks of oil. I presume such a person would not be appointed. I wanted to clarify that to guard against the possibility of a conflict of interest. Allegations have been made down the years that a director could be compromised or a person would be required to withdraw from a meeting and so on. Therefore, is it not preferable to include the provision proposed in the legislation?
The Bills Office tends to include in legislation an amendment similar to amendment No. 44 at the start of a section dealing with a board of directors. Amendment No. 44 seeks to insert a new subsection (11) to provide that "The Minister shall ensure that not less than 40 per cent of members of the board shall be women and not less than 40 per cent shall be men". This amendment requires gender equality in the membership of the board of directors. It is important that this provision be included in the Bill, as I do not believe it will be governed by other legislation.
The inclusion of such a gender equality requirement in legislation was introduced when the Minister was Chief Whip in the then Fianna Fáil-Labour Party Government, which laid down the marker that we would strive for gender equality in the membership of boards. Due to the famous glass ceiling and so on that operates against women occupying the highest positions in companies throughout the economy, it was agreed that we would set a high standard in terms of gender representation right from the outset in the companies to which we had access. A recent survey showed that a bias very much in favour of men still exists in appointments to such positions. Accordingly, it was agreed that a 40% rule in terms of gender legislation would be definitely stated in legislation. It is a good rule.
Approximately one third of the membership of my political party comprises women. In the time in which I have been involved in politics, my party has adopted a gender equality approach to the number of candidates selected, namely a ratio of 40 men to 40 women. The result is that proportionately, given the size of our party, we have a high number of female Deputies. Such gender equality should operate at all levels. Therefore, I have proposed the inclusion of this provision in the legislation.
The first part of amendment No. 35 is technical and I thought it would be beneficial to insert the proposed paragraph (g). The section provides that “A person appointed as a director under subsection (2) shall be a person who, in the Minister’s opinion, has experience and competence in one or more of the following areas”. I agree with the areas listed, namely, oil or oil related industries; chemical or chemical related industries; finance; economics; legal matters; and energy production and supply industries. It would be beneficial to also include experience in the stock market.
This relates to what I said about a previous submitted amendment, namely that the expertise of the board could be enhanced by a member of it having expertise in the stock market. While it can be said that under the financial and economic headings, that can be catered for, it might be beneficial if a director had experience in one or more of the areas listed. He or she could have experience in two, three or more areas.
It is an omission that it is not proposed that the stock market is one of the areas in which a person appointed may have experience because in recent times the energy industry has been subject to the whims of the market. It moves up and down like mercury, according to the whims of the market. One needs someone there who has market experience and who has traded in stocks and shares, with a view to ensuring that at least he or she can read what is coming down the tracks. I ask the Minister to consider the matter.
The first amendment we are dealing with proposes that the CEO should not be a member of the board. The Bill, as published, proposes that the NORA board should comprise six persons, including the chief executive. This is a debate that applies to many State boards and the Deputy asked me specifically about RTE. The director general of that organisation is not a member of the RTE authority. However, the authority is different in nature to what we are discussing here. The RTE authority is the regulatory authority for RTE rather than being the board of a company. When RTE becomes a public limited company, or PLC, there will be nothing to stop the director general from being ——
Is Mr. McManus on the ESB board?
Yes. The ESB, Bord na Móna, Bord Gáis, Eirgrid, Sustainable Energy Ireland and the digital hub all have executives on their boards. The issue has been debated for some time but it is appropriate in this particular case because we are not dealing with a regulatory function but with a company working with a chief executive who has experience and expertise. That would be of assistance to a board. The safeguard in this is that the CEO will be one member of a board that comprises six people. The five other board members will be able to hold him or her to account.
Amendments Nos. 32 and 44 deal with gender balance on the board. I do not disagree with the spirit of the provision. At various times since I was Chief Whip and the 40% rule was introduced, I have adhered to it as closely as possible, as I believe the record will show. There are some boards — this may be one of them — where, because of a lack of female participation in the industry in question, it can be difficult to arrive at the 40:40 split. I wish to assure members that if it is possible I will do it, but in this case it would be foolish to tie our hands legally in this manner. Whatever Minister is appointing the board will have to have regard to Government policy in this area and try to achieve the 40:40 balance but it might not be possible. In those circumstances, one could end up damaging the board by not being able to appoint directors as a result of this requirement. For that reason, I do not intend to accept those amendments.
What about amendment No. 34, which deals with conflict of interest?
The conflict of interest is dealt with by provisions in regard to unauthorised disclosure of confidential information as set out in section 24. Provision is made for a code of conduct in section 25. In addition, the ethics in public office regulations also apply. The sections to which I referred cover the Deputy's point.
With regard to amendment No. 35, sections 14 (c) and (d) deal with the issue of a person with experience in the stock market. There is no need to mention the stock market specifically.
Amendment put and declared lost.
I move amendment No. 32:
In page 10, subsection (1), between lines 35 and 36, to insert the following:
"(b) 40 per cent of whom should be male and 40 per cent to be female.”.
Amendment put and declared lost.
I move amendment No. 33:
In page 10, subsection (2), line 39, after "Minister" where it firstly occurs to insert "on the approval of Dáil Éireann".
Amendment put and declared lost.
Amendment No. 34 not moved.
I move amendment No. 35:
In page 11, subsection (3)(f), line 6, to delete “industries” and substitute the following:
"industries;
(g) the stock market”.
The first part of this amendment is technical in nature. The Minister did not refer to it, although he referred to the stock market. I will withdraw the stock market reference and press the other part.
I am advised that the Deputy must withdraw the amendment in full or press it in full.
I thought there should have been two amendments to that. Is the Chairman sure about that?
I am. I can check it again with the Ceann Comhairle's office if required.
Is that related?
Surely the two——
It is one amendment.
The stock market is the key point.
It is a separate amendment.
Is the amendment withdrawn?
Yes.
Amendment, by leave, withdrawn.
Amendments Nos. 36 and 37 form a composite proposal and will be discussed together.
I move amendment No. 36:
In page 11, subsection (6), line 12, to delete "may" and substitute "may,".
I would like to speak all day about these, but it does not give even me sufficient scope. It is highly technical and necessary. It is very laudable and intricate and it is an integral and important part of the Bill.
We are back to the previous discussion we had about parsing and analysing. I will not accept the amendment.
How could the Minister pass up an opportunity like that?
Amendment put and declared lost.
Amendment No. 37 not moved.
I move amendment No. 38:
In page 11, subsection (6)(a), line 15, after “opinion” to insert the following:
"and subject to confirmation by a medical practitioner".
I thought the Minister would take upon himself the prowess of a medical practitioner. The section states:
The Minister with the consent of the Minister for Finance may at any time remove from office a director appointed under subsection (2) if—
(a) in the Minister’s opinion, the director has become incapable through ill-health of performing his or her functions,
Without any disrespect to the Minister and the Minister for Finance to determine health, functional capability or otherwise, I respectfully suggest that it may not be at all a bad thing if a reference was included to the opinion of a medical practitioner. I suspect that would be expected.
I recall in the not too distant past where somebody was being asked to vacate office on medical grounds, and the person in question had determined that he or she was in no such way affected. There was no medical evidence to prove incapacity. I ask the Minister to bear that in mind.
If the Minister for Communications, Marine and Natural Resources told me I was incapable of doing a job I had been doing for the past 12 or 14 years because of health problems I would ask from where he got the inspiration to make such a judgment. If he replied to the effect that he had spoken with the Minister for Finance, who had confirmed his opinion, I, being a simple citizen, would ask which of these two wise men was a doctor and on what basis did they reach their conclusion. I would be very aggrieved it the Minister and the Minister for Finance had arrogated to themselves the right to make judgments that belonged to the medical arena.
This amendment will be useful for whoever is in Government in the next couple of years.
The Deputy's eloquence on this amendment leads me to think we may need to clarify it on Report Stage. We do not want a series of conflicting medical views either and I take the points made by the Deputy.
Amendment, by leave, withdrawn.
Amendment No. 39 not moved.
Amendments Nos. 40, 43, 47 and 52 are related and may be discussed together.
I move amendment No. 40:
In page 11, subsection (9), line 34, after "director" to insert ", subject to the Act as amended,".
I am sorry but I have an appointment and must leave, though I will return later. I ask the permission of the select committee to allow the Minister of State, Deputy Browne, to deputise.
I welcome the Minister of State. We are discussing amendments Nos. 41, 43, 47 and 52 together, in the name of Deputy Durkan.
Section 14(10) states: "In this section "applicable provision of the Ethics in Public Office Act 1995", in relation to a director appointed under subsection (2), means a provision of that Act that by virtue of a regulation under section 3 of that Act applies to that director." My proposal is to insert ", subject to the Act as amended,". I am dealing with amendment No. 40, though the Chairman seems to have moved onto amendment No. 41.
What about amendment No. 43?
Amendment No. 41 is a technical amendment. I am not sure whether the Minister of State, who hails from Wexford, will be any more amenable to technical amendments than his senior colleague from County Meath. We can always lay down a carpet of collegiality on occasions like this. Perhaps we will encourage the Wexford man along that path. Amendment No. 42 is——
Amendment No. 47 is next.
I thought it was amendment No. 42. Yes, I see it is amendment No. 47.
Amendment No. 52 is in the same grouping.
Amendments Nos. 40, 43, 47 and 52 are together.
The section 15(2) states "Each strategy statement shall be prepared in such form and manner as the Minister may direct". My amendment inserts the phrase "subject to legislation" at the end of the sentence because all such situations should be subject to legislation. There have been instances in the past when we have had to return to the House with various amendments in respect of Bills which we have had to rush through, with the best intentions in the world. The inclusion of "subject to legislation" or "subject to amending legislation" might be beneficial.
The same applies in respect of amendment No. 52. The only extra inclusion is a reference to "the common good" which should be borne in mind at all times. Naturally in such circumstances the Minister will bear it in mind but there could be the odd aberration when a person could take his or her eye off the ball and say later that it was a pity he or she did not take full account of all necessary considerations, of which the common good is one. The common good works in many directions because it refers to the individual as well as the group.
I made a mistake.
I thought so.
The Deputy was quite correct to say amendments Nos. 40, 43, 47 and 52 were to be discussed together. I apologise for my error.
The Chairman confused me and I should not have allowed myself be confused, even by the Chairman.
I do not think it is easy to confuse Deputy Durkan. Amendment No. 40 is not accepted because it is superfluous. I am satisfied that the directors of the NORA board at the time of commencement of section 14 of the Bill should continue in office on the terms upon which they were appointed. I am anxious that on commencement of section 14 the expertise of board members remain available to the agency as it moves to the status of an independent State body on enactment of the NORA Act.
Amendment No. 43 is not accepted. Any amendment in regard to the legislation referred to in the Ethics in Public Office Act 1995 are appropriate to that legislation and not to the NORA Bill. Amendment No. 47 is also not accepted. Its inclusion is not warranted. The legislation as drafted will allow ministerial directions to be given to the NORA in regard to the form and manner in which a strategy statement should be prepared and will take into account any legislative provisions underpinning the provision of such documents.
Amendment No. 52 is not accepted. The amendment proposes that the agency shall ensure compliance by any of its subsidiaries with directions by the Minister in regard to the subsidiary, that the agency shall ensure compliance "provided that the direction is in accordance with legislation or the common good". As directions given by the Minister will be in accordance with legislation, and have regard to the common good, the amendment is considered unnecessary.
Amendment, by leave, withdrawn.
I move amendment No. 41:
In page 11, subsection (10), line 39, to delete "that" where it secondly occurs and substitute "that,".
Although this amendment has already been discussed, the Minister did not comment on it. I laboured through the night drafting these highly tensile amendments.
These are erudite amendments.
The elasticity of some of these amendments is unbelievable. I would like some comment from the Minister of State in recognition of my labours burning the midnight oil.
This is a technical amendment that proposes the insertion of a comma. I will accept it.
Surprise, surprise. I will withdraw it.
Amendment, by leave, withdrawn.
I move amendment No. 42:
In page 11, subsection (10), line 40, to delete "Act" and substitute "Act,".
This is a technical amendment concerning commas.
Is this being withdrawn?
No.
That comma depends on the other commas which act as a parenthesis. Deputy Durkan is correct and the Minister of State should accept his commas.
His commas or his comments?
We can elucidate further on the rest of them.
I can accept this amendment.
I am so overwhelmed I will have to take time to recover. The acceptance of this amendment has floored me.
Amendment agreed to.
We accept amendments Nos. 41 and 42.
Amendment No. 41 has been withdrawn and I cannot go back, so the Deputy might table that on Report Stage.
Amendment No. 43 not moved.
I move amendment No. 44:
In page 11, between lines 40 and 41, to insert the following subsection:
"(11) The Minister shall ensure that not less than 40 per cent of members of the board shall be women and not less than 40 per cent shall be men.".
Amendment put and declared lost.
Section 14, as amended, agreed to.
SECTION 15.
Amendment No. 45 not moved.
Amendments Nos. 46, 48 and 49 are related and will be discussed together.
I move amendment No. 46:
In page 12, subsection (1), lines 3 and 4, to delete paragraph (b) and substitute the following:
"(b) thenceforth no later than every three years a statement of strategy must be brought before the Houses of the Oireachtas for approval.”.
Amendment No. 46 relates to the strategy statement for the company. Section 15(1) provides for an initial statement and, after a five-year period, subsequent strategy statements as specified by the Minister. I understand a three year rule, ensuring more frequent strategy statements, is included in legislation relating to other State and local government bodies and agencies. Given the fast-changing nature of the oil market and the difficult era that may be ahead, a provision to provide a strategy statement every three years is suitable. The recent Green Paper provides for a revised energy strategy every five years at the latest but a more regular review might be useful in this case. A longer-term plan, akin to the national development plan, spanning five, six or seven years might also be in place, but a three-year plan is a reasonable timeframe in which to sketch out shorter-term objectives.
Amendment No. 48 provides that the Minister should seek the approval of the Oireachtas for the draft strategy statement. Section 15(4) states "As soon as practicable after approving a strategy statement, the Minister shall cause a copy of the statement to be laid before each House of the Oireachtas". My amendment seeks to strengthen this by requiring the approval of the Oireachtas for the strategy statement. Under current rules, reports such as these are kept in the Oireachtas Library for 21 days during which time they may be raised for discussion by Members in the House. In the context of our earlier debate on the imminence of peak oil and so on, we should specify that the Oireachtas must approve the statements definitively, perhaps following a debate.
Amendment No. 49 is similar to Deputy Broughan's amendment No. 48 and follows the principle we have been discussing for some time. The amendment proposes that after approving the draft strategy statement, the Minister "shall arrange for a short debate thereon". The purpose of this exercise is to bring to the attention of the House all of the paraphernalia referred to by my colleague, Deputy Broughan, and any changes that might take place, from time to time that could have a fundamental impact on the activities of the company in the context of what the legislation intended to do. I envisage a short debate. In regard to such a sensitive issue, it is desirable to include such a provision here or elsewhere in the Bill.
Amendment No. 46 is not accepted. The section as published provides for the submission of an initial strategy statement to the Minister covering a five year period. In the case of subsequent strategy statements, the Bill does not specify the period to be covered by such statements. This will be specified by the Minister in due course. This flexible approach in regard to the period to be covered by the second and subsequent strategy statements by the National Oil Reserves Agency, NORA, will allow the Minister to prescribe the period to be covered according to demand.
I will not accept amendment No. 48. The text of the Bill as published provides that the finalised documents relating to a NORA strategy statement will be laid before the Houses of the Oireachtas. Section 31 provides for the examination of the chief executive officer of NORA by the Committee of Public Accounts and other Oireachtas committees. I am satisfied that adequate provision is made in the Bill for debate on NORA's strategy statements.
What of amendment No. 49?
That includes amendment No. 49.
How stands amendment No. 46?
I will press the amendment.
Amendment put and declared lost.
I move amendment No. 47:
In page 12, subsection (2), line 6, after "direct" to insert ", subject to legislation".
I will not press the amendment due to the advice provided by the Minister of State that the matter is already provided for.
Amendment, by leave, withdrawn.
I move amendment No. 48:
In page 12, lines 18 to 20, to delete subsection (4) and substitute the following:
"(4) As soon as practicable the Minister shall lay the draft strategy statement before the Houses of Oireachtas for approval.".
Amendment put and declared lost.
I move amendment No. 49:
In page 12, subsection (4), line 20, after "Oireachtas" to insert the following:
", and he or she shall arrange for a short debate thereon".
I want to explain my thoughts on amendment No. 49. Having regard to what the Minister of State said in response to my colleague, the strategy is one the Committee of Public Accounts has the right to examine afterwards. The amendment relates to the period beforehand.
I do not want to upset the Deputy but I am advised we have already discussed this amendment. I must press on with the decision.
That is not entirely the case. We had a discussion. However, the proposer of the amendment is entitled to raise the matter once or twice, or can speak to the section independently. I do not stand corrected in this regard.
I want to make the point with regard to the future. The debate should take place beforehand as to the strategy to be followed. There is no point having a debate about it afterwards because the Committee of Public Accounts will deal with it at that stage. The strategy deserves debate. With the permission of the Chair, I will press the amendment.
Amendment put and declared lost.
Section 15 agreed to.
SECTION 16.
Unfortunately, I have another engagement. With the permission of the committee, I ask Deputy Broughan to move amendments Nos. 73, 81 and 86 in my absence.
I am advised the Standing Orders allow for that. Is that agreed? Agreed.
I move amendment No. 50:
In page 12, subsection (2)(a), line 26, before “acquire,” to insert “subject to the approval of Dáil Éireann,”.
This amendment is similar to many others. I intend to vote on one but do not know which one.
We will wait to see.
We might vote on this amendment.
The Deputy might consider it. I intended to compliment him. I was reflecting on his powers of pronunciation and punctuation, not to mention his intimate knowledge of English grammar.
Not to mention his forensic ability
It reminds me of the book by Lynne Truss, Eats, Shoots and Leaves, which specialises in grammar. I wanted to compliment the Deputy in that regard. I hope he will save his vote until the end.
No, I will call a division now.
Amendment put.
The Committee divided: Tá, 3; Níl, 7.
Tá
- Broughan, Thomas P.
- Durkan, Bernard.
- McEntee, Shane.
Níl
- Browne, John.
- Fitzpatrick, Dermot.
- Haughey, Seán.
- Kelly, Peter.
- O’Donovan, Denis.
- O’Flynn, Noel.
- O’Malley, Fiona.
Amendment declared lost.
I move amendment No. 51:
In page 12, subsection (4), line 35, after "Minister" where it firstly occurs to insert ", Dáil Éireann".
This amendment involves the same issue.
Amendment put and declared lost.
I move amendment No. 52:
In page 12, subsection (6), line 42, after "direction" to insert the following:
", provided that the direction is in accordance with legislation or the common good".
We discussed this amendment previously and the Minister gave an assurance that the provision as set out in the amendment was already contained in the Bill.
Amendment, by leave, withdrawn.
I move amendment No. 53:
In page 13, subsection (7), line 3, after "Finance" to insert "subject to conditions pertaining at that time".
This amendment returns to the theme I have addressed repeatedly during the course of the debate. Conditions may vary from time to time. The insertion of the phrase "subject to conditions pertaining at that time" could have a relevance which the Minister might take into account. In view of the fact we have discussed a similar amendment this might not be a bad amendment for the Minister of State to take on board. With the acceptance of this amendment, section 16(7) would read, "A direction that relates to the disposal of any assets or surpluses of a subsidiary may only be given with the consent of the Minister for Finance subject to conditions pertaining at that time". It would be a useful addition and I ask the Minister of State to incorporate it.
This amendment is not accepted. If it was, the amendment would provide that any direction to NORA by the Minister for Communications, Marine and Natural Resources, given with the consent of the Minister for Finance, would be subject to conditions pertaining at the time. I am satisfied the amendment is unnecessary, as any direction which might be given by the Minister would take into account a range of factors, including the conditions pertaining at the time.
I want to return to this point. In the 1980s decisions were taken to dispose of assets in CIE, the IDA and various other companies. Not long afterwards it was felt in hindsight that the decision was a bad one and should have been taken more strategically. The Bill states any disposal of assets or surpluses of a subsidiary may only be made with the consent of the Minister for Finance. That should be subject to conditions pertaining at the time because a situation could arise whereby a subsidiary in a different location could decide to dispose of assets with the approval of the Minister for Finance who is not necessarily on site and may make a wrong decision. I ask the Minister of State to bear this in mind. It is like the difference between Wexford and Donegal. It does not necessarily follow that the Minister for Finance is the ultimate and absolute authority. It is not a reflection on the Minister for Finance.
Would the Chairman like another vote?
I would not because we would win.
Amendment put and declared lost.
Amendment No. 54 not moved.
I move amendment No. 55:
In page 13, between lines 25 and 26, to insert the following subsection:
"(14) The Minister shall establish a subsidiary oil exploration agency so as to facilitate a holistic approach to Ireland's oil and energy security."
This proposes to amend the section dealing with subsidiaries. I am proposing that the Minister shall establish a subsidiary oil exploration agency so as to facilitate a holistic approach to Ireland's oil and energy security. This originates from the debates on the Corrib gas field and the pathetic history of exploration in our country over the past 35 years. The ongoing Corrib protests show how quickly the debate moves from Corrib in particular to the extent the State has been exposed for its lack of expertise in establishing its reserves and setting out fair licensing, taxation and returns regimes.
The Corrib incident shows the dearth of information on our offshore oil and gas resources. I met the petroleum affairs division and the technical division established by the Minister at the Department when the men were in prison in the summer of 2005. It was acknowledged that we did not have sufficient expertise in the Department to invigilate Shell's activities. This led to workers' folklore about major discoveries being capped and left in reserve.
I have spoken many times on energy Bills and during Question Time in the Dáil. The comparison is always drawn with Denmark, Norway, the UK, the Canadian provinces, the Faroe Island and the local government in the Shetland Islands, Scotland. The Norwegian example is the most pertinent but these states made a determined effort to discover information on their resources and could then deal with the major oil companies from a position of strength.
Nowadays, Total and Shell are discussing the island of Sakhalin in the eastern part of the Russian Federation. Significant resources may exist there and even powerful semi-private companies in Russia, such as Gazprom, find it difficult to keep tabs on the major oil companies and speak to them as equals. The chief purpose of this agency is concerned with oil stocks but perhaps we should follow the example of Denmark. The Danish company Dong was initially responsible for stocks but developed expertise in exploration. We should not be afraid of this.
The Minister has ordered a review of licensing terms and conditions. There are discussions at this committee and major controversy in the media every time major blocks are licensed. Most people believe we have extensive oil and gas resources off the coast. The terrain and topography are extremely difficult and we must also consider when it becomes profitable to bring that oil and gas ashore. I will remember the Corrib era for how much we found out about the development of oil since 1996.
In this amendment I suggest that while there is a power to establish subsidiaries, one of the subsidiaries should be involved in exploration. Prominent media commentators recently said it was striking that when we gave tranches of the Dunquin prospect to a number of companies, those companies did a deal with the major oil companies, in that case with ExxonMobil, to bring what are said to be extensive reserves ashore. It seems we operated in the dark to some extent, not through the fault of departmental officials, none of whom I would criticise, but because we lacked the resources. We now have the Irish Marine Institute and the Geological Survey of Ireland. We should think along these lines. We met the Norwegians during those crisis days, as did the then Minister of State, Deputy Gallagher. The current Minister was in another Department. It was impressive looking back. In 1968 they asked companies such as Shell and BP to teach them what they knew before they would grant them licences. I have heard no better advice than that which Statoil and the Norwegian Labour Party gave me in this matter. Now that we have a strategic agency we should encourage it to examine the situation offshore, where the resources probably lie.
We should move forward with this. It would be helpful in the general debate. The Corrib gas field is interesting, not because of the rights and wrongs of the pipeline or the refinery, but because people are interested in what resources the State and its territorial seas holds, how those resources can be used as interim fuels as we move towards a renewable energy culture and how they are managed. The people I have met through our youth party and various young constituents aged between 15 and 25 years are profoundly interested in this issue. Since we have not specified it in legislation, could this happen or would NORA be told to mind its own business? The fact that three or four civil servants were desperately trying to keep tabs on a company such as Shell with its incredible history demonstrates that we should try to enable our public service, through this new State company, to carry out some of these functions.
I urge the Minister of State to adopt this amendment or review it on Report Stage. It would demonstrate that this country was becoming serious about exploration and its resources, and be helpful in finally resolving the discontent in north-west Mayo.
This amendment is not being accepted. The functions of NORA as proposed in the Bill are to establish the agency as an independent body specifically responsible for the maintenance of oil reserves in accordance with international obligations and for use by Ireland in times of physical disruption of oil supplies. Oil exploration functions do not come within the remit of NORA, nor do I have any intention that they should. Therefore, it is not appropriate or legally possible for a subsidiary of the agency to be given responsibility for oil exploration functions. I have heard the Deputy make this point about an agency for oil exploration a number of times. Although today is not the day for it, I might not be totally against some of his ideas. The Minister is reviewing the licensing regime. That might be the time to push the concept of an agency a step further. Today NORA is an oil stockholding agency only and is not in a position to get involved in oil exploration.
I am not supposed to say anything but I find myself in agreement with some of the ideas expressed.
I do too. It might be no harm to discuss this issue for a minute, despite the time constraints and exigencies within which we must operate.
I am not certain this would be the correct time to do this. The Geological Survey of Ireland Bill was withdrawn from the Order Paper some time ago. I would have thought that Bill would have been brought forward earlier because it could have an impact on this area.
Deputy Broughan made very interesting comparisons. I hope we have resources far in excess of those about which we know. That may well be possible. We hear rumours but the way to find out is by providing for exploration and assessment. Technology is available nowadays. Geological surveys can produce many results, as can marine surveys. This is an area we have not fully explored.
We may well have as many resources as Norway but it knew what it had to start with; in other words, it had the information. That is why it is important to focus on this amendment now. Norway also knows it has somewhere in the region of seven times the world's known coal reserves under the sea which remain untapped. It has many untapped resources in the same location. It did not have to drill too far to reach them. We may have to drill further in the Atlantic, which would result in heavy expenditure. We need exploration companies to carry out exploration at our request. I would not like to see the Minister from County Meath or the Minister of State from County Wexford on an oil rig drilling in the Atlantic Ocean, although on the second thoughts I might like this.
On the Saltee Islands.
The Minister was out on the rigs and knows the story.
Of course, he was.
It would be very difficult to risk State money on such exploration, despite the fact that the people from County Donegal who appeared before the committee propose to explore for oil or gas and give 30% back to the community.
We could do so on a no foal, no fee basis. It does not need to cost us money.
Could we get back to the discussion, please?
The no foal, no fee concept is interesting and could be used. In theory, it was used in the past but nothing was found. The problem is that to ensure the maximum level of exploration, we need to do a little more than this. I met some of the exploration companies recently and they are happy to have the regime reviewed. I am not making a political point but we are stuck with arrangements entered into previously. However, that does not mean we have to stick to them forever.
Is the amendment being pressed?
Does the Minister of State have anything to add?
I would not be totally opposed to some of the Deputy's suggestions. The Minister has no power under the Bill to set up an agency. In fairness to him and as Deputy Durkan pointed out, there has been no review of the licensing system for oil and natural resources exploration for years, but that is now being done. When the report is complete, it might be the time to consider this.
That is more appropriate.
If we change the text of the amendment slightly, perhaps the Minister of State will reconsider it on Report Stage.
Amendment, by leave, withdrawn.
Section 16 agreed to.
Section 17 agreed to.
SECTION 18.
As amendment No. 58 is related to amendment No. 56 in the name of Deputy Durkan, they may be discussed together.
I move amendment No. 56:
In page 13, subsection (1), line 33, after "functions" to insert ", subject to the approval of the Minister".
I wish to stress the importance of the Minister for a change. The amended text would read, "The Agency may engage such consultants or advisers as it considers necessary for performing its functions, subject to the approval of the Minister". I thought that it might be both useful and necessary. It may well happen that from time to time the agency decides to engage consultants. The Chairman will know how much we like consultants who, in the normal course, are the bane of our lives. Interposing that provision would mean that if unelected consultants were appointed left, right and centre, those elected to public office would know what they were about.
There is no need to accept the amendment. The recruitment of consultants is an operational matter for the State body concerned and, as such, does not require the Minister's approval. The amendment proposed by the Deputy is not consistent with standard corporate governance requirements imposed on similar bodies. No other body is subject to such ministerial interference.
I am not sure I agree. There are considerable grounds to ask ourselves the question in the course of our daily inquisitorial role in the House. Consultants have been appointed to State and semi-State boards, bodies, agencies and companies and enjoyed access to public funds, but we might have had second thoughts if we had known what they would do. I do not wish to be totally insensitive and mention those cases that immediately come to mind, but if I were a natural-born son of a gun, I would do so; I would not have to think long.
If the Minister instructed an agency to engage a specific consultant, the Deputy would criticise him on the basis that it amounted to political interference.
No. The Minister of State should know this. If I were the Minister and some body, agency or group decided to appoint consultants without my knowing of it, I would be concerned.
Has the Deputy finished with amendment No. 58?
I have not touched on it yet.
Can we discuss it?
I want to move it first.
We are discussing amendments Nos. 56 and 58 together.
I felt the phrase ", as determined from time to time by the Minister" might be a useful inclusion after "The remuneration and allowances determined under subsection (3) and any superannuation benefits payable to or in respect of the chief executive shall be paid by the Agency out of the levy”.
I am satisfied that the text of the Bill, as initiated, should remain unchanged, since it provides that the CEO's salary be paid from the levy. I do not consider it necessary to include the additional phrase. Therefore, I cannot accept the amendment.
Amendment put and declared lost.
Section 18 agreed to.
SECTION 19.
Amendment No. 57 not moved.
I move amendment No. 58:
In page 13, subsection (4), line 46, after "levy" to insert ", as determined from time to time by the Minister".
The phrase in question can readily be found in several Acts. I remind the Chairman and the Minister of State of its reliability.
Amendment, by leave, withdrawn.
Section 19 agreed to.
SECTION 20.
I move amendment No. 59:
In page 14, subsection (7), line 28, to delete "the directors" and substitute the following:
"(a) the directors,
(b) the Minister,
(c) the Minister for Finance, and
(d) Dáil Éireann”.
Amendment put and declared lost.
Section 20 agreed to.
Amendments Nos. 60 and 61 not moved.
Section 21 agreed to.
SECTION 22.
Amendment Nos. 62 to 64, inclusive, not moved.
I move amendment No. 65:
In page 15, subsection (5), line 23, after "Minister" where it firstly occurs to insert "and Dáil Éireann,".
Amendment put and declared lost.
Amendment Nos. 66 and 67 are related and will be discussed together.
I move amendment No. 66:
In page 15, subsection (7), line 31, to delete "after" and substitute "before".
This subsection provides: "The Minister shall ensure that a superannuation scheme approved under this section, including an amendment of a scheme, is laid before each House of the Oireachtas as soon as practicable after it is approved".
I suggest it would be a good idea to submit the proposal rather than wait until after it is approved. This would allow greater debate and involvement and might favour the employees. It would mean there would be some discussion in the Oireachtas beforehand rather than after the event. Most of what we do in the Oireachtas is after an event. This amendment would put the horse before the cart in the normal way.
It is not appropriate that pension schemes should be laid before the Houses in draft form. They are merely laid before the Houses for information rather than for approval. The Oireachtas has no role in approving them and I do not propose to change long-standing practice in that regard.
Amendment No. 67 tries to get us involved again in corporate governance requirements imposed on bodies such as the National Oil Reserves Agency, NORA. Superannuation schemes in respect of State bodies are subject to the approval of the Minister for Finance and require his approval in addition to the approval of the parent Department. This process ensures that the provision of any superannuation scheme for the public sector is in line with legislation. It is not as if the schemes are plucked out of the sky. They are based on legislation or good practice. There is no need for the amendment.
Amendment, by leave, withdrawn.
I move amendment No. 67:
In page 15, subsection (10), line 44, after "section" to insert "subject to review by the Pensions Board".
Recently, did the Pensions Board not warn the trustees of a pension scheme in respect of Aer Lingus? The board would have a role, so the amendment would be superfluous.
The board has a role in all pension schemes.
I will not press the amendment because I presume that this matter has been provided for. In recent years, we have witnessed a number of situations where pensions were raided, for want of a better description. While I am not suggesting that such will happen in this or any other case, it behoves us to remember those situations.
Amendment, by leave, withdrawn.
Section 22 agreed to.
Section 23 agreed to.
SECTION 24.
I move amendment No. 68:
In page 16, subsection (1), between lines 36 and 37, to insert the following:
"(d) an authorised officer,”.
Amendment agreed to.
Section 24, as amended, agreed to.
SECTION 25.
I move amendment No. 69:
In page 17, between lines 24 and 25, to insert the following subsection:
"(3) A code of conduct drawn up under this section shall require records of interests of persons to whom the code applies, and records of conflict of interest, to be maintained and to be opened to public scrutiny during office hours.".
This amendment relates to the agency's code of conduct for the director, committee, chief executive and so on. It seeks full transparency and that records of interest and conflicts of interest be maintained and made available to the public, which is the ultimate employer of everyone in the agency.
While I know what the Deputy is trying to ensure, the provision in the amendment is met adequately. Section 25 provides for the drafting of a code of conduct in respect of standards of integrity and concern for the public interest that will apply to the directors, chief executive officer, employees, consultants and advisers engaged by NORA and employees of such consultants and advisers. This provision is in addition to the requirement placed on NORA's directors under the Ethics in Public Office Act 1995. The directors are prescribed as designated directorships under that Act and must make annual returns. The manager, financial controller and operations manager must also make returns under the Act. Quite a number of people must do so and the matter is dealt with adequately.
Some officers in local authorities must open their disclosures to public scrutiny for specific reasons under the Local Government Act 2001, but it is not a general requirement. The provision in the Bill is normal for State bodies.
In previous careers, we were used to dealing with the considerable powers of local officials in respect of planning. I do not know how similar NORA's powers will be, but would those involved in making choices about companies, emergency or holding stocks or whatever be covered by the Ethics in Public Office Act 1995?
Yes. They would need to declare interests and so on.
Amendment, by leave, withdrawn.
Section 25 agreed to.
SECTION 26.
I move amendment No. 70:
In page 17, subsection (2), line 30, after "billion" to insert "unless otherwise provided for".
The aggregate amount of money raised or borrowed at any time under this section shall not exceed €1 billion. I propose to insert, after "billion", the words "unless otherwise provided for". I am not certain whether it is necessary, but it looked in passing that there may be a need to raise or lower the amount in particular circumstances. If the Minister accepts the amendment, a Minister will not need to return to the House to look for further elasticity in the Bill. I suggest that such might be provided there.
Earlier we had the discussion looking for us all to go back into the House for a variety of matters and Deputy Durkan seems to be implying the opposite in this case. What he sought in the case of previous matters is more fitting than this.
The level, at €1 billion, is reasonable. We do not anticipate needing to increase it. If we had to increase this sizeable sum, it would be right that we should go back to the House to look for approval. I will not accept the amendment. It is better that we would have that scrutiny.
Amendment, by leave, withdrawn.
Amendments Nos. 71, 72, 74 and 75 are related and will be discussed together.
I move amendment No. 71:
In page 17, subsection (3), line 32, to delete "consent" and substitute "approval".
The text of the Bill as published provided that money could be borrowed by NORA with the prior consent of the Minister for Communications, Marine and Natural Resources given with the approval of the Minister for Finance.
Are amendments Nos. 72, 74 and 75 similar?
I addressed amendments Nos. 71 and 72.
Has the Minister addressed amendments Nos. 74 and 75? Are they drafting changes?
Yes.
Returning to amendment No. 71, which is a key one, why would the Minister remove the word "consent"? Will the Bill now state "the prior approval of the Minister given with the approval of the Minister for Finance"?
Yes. It must be "approval".
Further down, in amendment No. 75, the Minister is removing "approval" and substituting "consent".
It is a matter of swapping. We are putting them in reverse order. I do not know why. It is merely a matter of switching them around.
Is it that the Bill will state "consent" and "consent" in one case and "approval" and "approval" in the other?
Yes.
All right.
Amendment agreed to.
I move amendment No. 72:
In page 17, subsection (3), line 32, to delete "approval" and substitute "consent".
Amendment agreed to.
I move amendment No. 73:
In page 18, subsection (6), line 7, after "subsection (2)” to insert “including temporary borrowing”.
I was always a "green" with a small "g" and it is a pleasure to be able to move this amendment for my Green Party colleague. In this country we are all greens with a small "g" because of our rural background.
Deputy Ryan, in amendment No. 73, seeks that NORA's limit on borrowings of €1 billion provided for under subsection (2) would also include temporary borrowing.
What the Deputy is trying to achieve is provided for in section 27 and it is not necessary to make provision here.
Does this section cover it?
Section 26 does not deal with temporary borrowings by the NORA because it is not appropriate and, therefore, they are provided for under section 27. They require the prior approval of the Minister and the Minister for Finance.
The Minister will have emergency powers under the other Bill. What will happen if the agency breached the limit?
The Minister will have to go back to the Dáil.
Amendment, by leave, withdrawn.
Section 26, as amended, agreed to.
SECTION 27.
I move amendment No. 74:
In page 18, line 10, to delete "consent" and substitute "approval".
Amendment agreed to.
I move amendment No. 75:
In page 18, line 11, to delete "approval" and substitute "consent".
Amendment agreed to.
I move amendment No. 76:
In page 18, line 11, after "Finance" to insert "and Dáil Éireann".
Amendment, by leave, withdrawn.
Section 27, as amended, agreed to.
Section 28 agreed to.
SECTION 29.
I move amendment No. 77:
In page 18, subsection (1), line 26, after "Minister" to insert "and the Standards in Public Office Commission".
Amendment, by leave, withdrawn.
Section 29 agreed to.
SECTION 30.
I move amendment No. 78:
In page 19, subsection (1)(g), line 13, after “activities” where it firstly occurs to insert the following:
"save where such activities are deemed to affect policy".
Section 30 (1) states:
If required by the Minister, the Agency shall provide the Minister with information in relation to such matters as he or she may specify concerning or relating to—
(a) the performance of its functions (including those performed through a subsidiary),
(b) its plans for the future performance of its functions,
(c) any strategy statement that has been laid before each House of the Oireachtas under section 15,
(d) any report or account prepared by it under sections 28 or 29,
(e) the economy and efficiency of use of the Agency in the use of its resources,
(f) the systems, procedures and practices employed by the Agency for the purpose of evaluating the effectiveness of its operations, or
(g) the policy and activities, other than day-to-day activities, of the Agency and of any subsidiaries.
I propose the insertion of the phrase "save where such activities are deemed to affect policy". The separation of policy and day-to-day activities has caused concern in the House. I was seeking a suitable section in which to insert this amendment and it may not necessarily be in the appropriate section but it has merit. The Opposition cannot table questions relating to an agency, body and so on because if it relates allegedly to its day-to-day running, the Ceann Comhairle will rule it out of order. It is particularly frustrating that questions to which replies were provided six months previously are ruled out of order when they are resubmitted, even though there was no change in policy in the meantime. The amendment should be made to help everybody.
I do not accept the amendment, as section 30(1)(g) adequately deals with the issue.
Amendment, by leave, withdrawn.
I move amendment No. 79;
In page 19, subsection (1), between lines 14 and 15, to insert the following:
"(h) key information on the Irish oil industry and market and to make this information available when necessary to the Competition Authority and the Commission for Energy Regulation.”.
Amendment put and declared lost.
Section 30 agreed to.
SECTION 31.
I move amendment No. 80:
In page 19, between lines 28 and 29, to insert the following subsection:
"(3) The Agency must provide an annual account of the levy and all its revenue-raising activities to the Public Accounts Committee of Dáil Éireann.".
Amendment put and declared lost.
Section 31 agreed to.
SECTION 32.
Amendment No. 81 is in Deputy Eamon Ryan's name and Deputy Broughan will move it on his behalf. Amendments Nos. 82 to 84, inclusive, are related. Therefore, amendments Nos. 81 to 84, inclusive, may be discussed together.
I move amendment No. 81:
In page 19, subsection (1), lines 34 and 35, to delete paragraph (a) and substitute the following:
"(a) at a minimum level of 120 days of emergency stocks, or”.
The amendment in Deputy Ryan's name is linked to the earlier discussion when the Minister said we had 107 days of oil stocks either here or abroad. Another amendment in my name also relates to this matter. In this amendment Deputy Ryan seeks to pitch these stocks at the highest level. Our current reserves are equivalent to 24 million or 24.5 million barrels of oil, either in stock or on tickets. I believe I heard Mr. Andris Piebalgs, the Energy Commissioner, refer to the inclusion in an energy plan of a target of a minimum level of 120 days of oil. Deputy Ryan must have heard the same reference. It is a reasonable target at which to aim. It is beneficial that we have reserves of 107 days of oil stocks and that, as the Minister said, in a dire emergency this could be stretched to maintain and safeguard the economy and society. Perhaps we should aim to push the boat out on this measure, given that we have received an admonition from the highest level of the European Union that this target should be the minimum level.
I take it that those comments apply to amendment No. 82 also.
Yes, it deals with the same matter.
I take it that such comments also apply to amendment No. 84.
Amendment No. 84 is slightly different.
Returning to amendment No. 82, the Minister said we were required to only have reserves of 90 days oil stocks. It would be preferable to hold the highest possible level, given the oil price fluctuations in recent months which could occur again, given the correlation between current oil stocks, our failure to develop biofuels and the difficult political situation in many oil exporting countries. One need only think of Iraq with its enormous oil reserves and geopolitical instability. The amendment which proposes that stocks should be retained at the highest level required by the European Union seconds amendment No. 81 in Deputy Ryan's name.
Amendment No. 84 deals with an aspect in which there was considerable interest when we debated the predecessor to this legislation in committee. The amendment proposes that the agency should maintain "a sufficient internal-external holding ratio so as to ensure there are enough stocks physically held within the jurisdiction of the state if a crisis situation arises". If we have 107 days of oil stocks, equivalent to 20 million plus barrels of oil, how much of the oil is held on this island? Is the balance held in Fishguard, elsewhere along the Welsh coast or further afield? The ideal position from the point of view of the Minister and the new agency would be to have 107 days of oil stocks in situ in depots throughout the country. Major developments would be necessary in this regard, to some of which the Minister referred in replies to parliamentary questions. In a crisis the ideal position would be to have the highest possible level of oil stocks. I would be interested to hear the Minister’s response. What oil stocks are currently held here?
Amendment No. 83 in my name is similar. I support the previous amendments with which we are dealing.
It would be advisable to specify the requirements at a given time because the situation can change dramatically in the space of a few days. For example, an international event could take place that would instantly cause an oil and gas crisis. In those circumstances, we have the stocks as provided for. However, it would be better to explicitly state the requirements, as in the amendment referred to by my colleague, Deputy Broughan, or in the manner proposed in these amendments.
I ask the Minister to respond to amendments Nos. 81 to 84, inclusive.
The best assurance I can give the Deputies on this is that under EU rules we have an obligation to hold 90 days of oil reserves, based on the previous years' consumption. The IEA obligations are the same. NORA has held more than that in reserve for some considerable period. We do not need to insert a requirement in legislation that NORA should be wise in the way it conducts its business and should not simply aim for the minimum level of reserves. NORA has proved in the past that it adopts a very prudent approach to this issue. The section has been drafted in such a way as to allow for future increases or decreases in the international stockholding obligations that we have under EU or IEA rules. The reserves can rise or fall, as per our international obligations. The section also allows the Minister to direct NORA to hold levels of oil reserves higher than any international obligations. Currently 90 days is the requirement under international obligations but we have 107 days of oil reserves. I am satisfied that the section as drafted allows Ireland to meet its current obligations.
The other side of the coin is that if one puts particularly onerous obligations on NORA, over and above the international norms, it will cost money. Furthermore, if we do not have the required storage space available and are forced to buy storage capacity, people could start playing games with us in terms of the cost of such storage and so forth. Maximum flexibility is needed. We are setting up the company. There are people who are experts in this area and we should let them get on with their business.
I have had discussions with the chairman and chief executive of NORA on the point both Deputies have made, with which I strongly concur, regarding having as much of the oil stock as possible available in Ireland. That concern is reflected in the recent green paper on energy. At the moment we have 72 days stock in Ireland, which is a relatively normal level. We must bear in mind that NORA does not own any storage facilities in Ireland. If we committed ourselves to having all of the reserves on the island of Ireland, we would leave ourselves open to exploitation through people pushing up the price of storage. If I directed NORA to store all of the reserves in Ireland, it would be forced to act as a price taker. We have storage facilities that have worked very well for us in the United Kingdom, the Netherlands and Denmark.
We have achieved the correct balance in the legislation. The company has been doing very well in this area and for that reason the amendments are unnecessary.
Given the size of the national fleet and despite the beginnings of energy efficiency efforts, petroleum consumption here is growing as the economy grows. The Central Bank has forecast 5.5% growth next year. In that context, would it not be wise even to very quietly get NORA to increase the figure of 107 days of oil supplies? It could even be said that 120 days is an indicative level which could be aimed for. That could be the target, with 80 or 85 days of supplies being held in Ireland, given the growth of our vehicle fleet.
I do not think I need to tell NORA that. I do not disagree with the Deputy's comments. NORA keeps an eye on consumption and what is happening and tries to anticipate as much as it can. The absolute minimum level is based on consumption last year. As can be seen, the level is now 107 days of supply. Clearly, NORA must also keep an eye on the markets. With the price of petrol and oil falling, or at least lower now than it might be in six months, it might make a strategic decision to buy a quantity of oil at this stage at a lower price. This may minimise the cost and ensure oil will not be bought when the market price is high. NORA does all of these things and is skilled in doing so.
By way of clarification, the Deputy got the target figure of 120 days from a Commission proposal which was unanimously voted down by everybody concerned. It was considered that a supply of 90 days was enough. The reality is that NORA is a professional body which is doing its job well. As such we do not need to make this provision.
Amendment, by leave, withdrawn.
Amendments Nos. 82 to 84, inclusive, not moved.
Section 32 agreed to.
SECTION 33.
I move amendment No. 85:
In page 20, subsection (4), lines 16 and 17, to delete all words from and including "including" in line 16 down to and including "State" in line 17 and substitute the following:
"taking particular account of the necessity of holding sufficient stocks within the jurisdiction of the state".
To what extent does NORA and the major oil companies involved in Ireland such as the new company Topaz use hedging, about which we hear the whole time? This is my point with regard to information on the market. We hear about it constantly from the great Michael O'Leary. He has hedged kerosene for six and nine months and contrasts this with what Aer Lingus has done. In that context, how would hedging play a role? We saw it in the gas market, an issue Deputy Durkan raised last week. We all read about it and it was fascinating. Gas is transported from Norway so well and freely in the short market that there is negative pricing. They wanted people to take gas supplies. I realise the position on oil stocks would be different. I presume this is an area in which NORA must have expertise.
Clearly, the markets must be watched. Section 33(1) of the Bill defines a commercial contract between NORA and a third party to hold stocks either in the State or abroad as a holding contract which may cover stocks owned by NORA or stock ticket contracts. In that sense there are stocks which are bought at a particular price level to meet our obligations. Clearly, the body will try to do this at the best possible time, but I may stand corrected by officials.
Stocks do run out. At various times one would not want to be left holding them because over a period they would no longer be of any use. It must be mindful of the fact that they deteriorate.
Trading takes place all the time. As the Deputy rightly assumes, NORA tries to buy at the best possible price and sell at the best possible price. It received a very good price for the stocks it sold for Hurricane Katrina because the price was high at the time.
Amendment, by leave, withdrawn.
Section 33 agreed to.
SECTION 34.
I move amendment No. 86:
In page 20, subsection (1), line 18, to delete "The Minister" and substitute "The Commission for Energy Regulation".
This relates to the Minister's duties. Deputy Eamon Ryan takes a slightly different line from me on this. However, the Commission for Energy Regulation, CER, should be given responsibility for energy derived from oil. Oil plays a huge role in the economy, amounting, according to the Minister's figures, to approximately 58% of primary energy, which is incredible.
The Minister has overall responsibility but Deputy Eamon Ryan clearly felt this was a role the CER could fulfil and it would be useful for it to have such a role. When the CER came before this committee a couple of weeks ago, there was blood on the tracks and its representatives nearly had to be carried out because of our anxiety and annoyance. Despite all the goodies in the budget in a month's time, this issue will haunt the present Administration when it faces its employers in March, April or June.
Or December.
It could be December and we would literally have an election budget. We are very upset at some of the things the CER has done. I have read all its documents, as has everybody who is seriously interested in energy. We do not agree with how it arrived at a figure of 34%. Having said that, given the incredible and varied role oil plays in such areas as air travel, maybe there should be a role for the energy regulator. Deputy Eamon Ryan wanted the CER to play a role at that level, rather than the Minister, who has given up all pretence of doing so. In terms of gas and electricity, he is just a bemused bystander.
Will the Deputy withdraw the amendment to allow Deputy Eamon Ryan to table it on Report Stage?
Will the Minister declare that he will be either radical or redundant?
He will seize power.
This is a classic example of being damned if you do, damned if you do not. The Opposition has reprimanded me for the fact that the CER has the powers it has. This Bill now proposes that I retain them and the Opposition wants me to give them to the CER. It is not very consistent.
We did not all want to do that. I just wanted to put down a marker.
Amendment, by leave, withdrawn.
Section 34 agreed to.
SECTION 35.
I move amendment No. 87:
In page 20, subsection (2), line 37, after "Agency" to insert the following:
"and in accordance with the terms of the national emergency contingency plan".
The Minister will have significant emergency powers over NORA by virtue of this section. When he gives this directive to NORA it should be within the terms of an emergency contingency plan he will have drawn up, so that he cannot act unilaterally. Does the Minister accept the amendment?
No. I can act only in an emergency. I do not have the power to declare the emergencies without consulting colleagues in Government so it would not be a unilateral act.
Amendment, by leave, withdrawn.
Section 35 agreed to.
SECTION 36.
I move amendment No. 88:
In page 21, between lines 21 and 22, to insert the following:
"(i) the repayment of principal borrowed under section 26 or 27 to purchase oil or to do anything specified in section 8(3)(a), (b), (c) or (f);”.
Amendment agreed to.
Section 36, as amended, agreed to.
Section 37 agreed to.
SECTION 38.
Amendments Nos. 89 to 91, inclusive, are related and will be taken together by agreement. These are technical amendments.
I move amendment No. 89:
In page 22, subsection (1), line 6, to delete "No" and substitute "Subject to subsection (2), no".
Amendment agreed to.
I move amendment No. 90:
In page 22, subsection (1), line 8, after "products" to insert "owned by it".
Amendment agreed to.
I move amendment No. 91:
In page 22, between lines 14 and 15, to insert the following subsection:
"(2) In calculating for the purposes of this section stocks of petroleum products held throughout the preceding month by an oil consumer, the Minister shall not take into account any volume of petroleum products held within the State on behalf of the oil consumer under a contract between the oil consumer and another person, unless—
(a) the contract is one specified in section 60(2)(b), and
(b) before the contract was entered into, the contract proposals were submitted to and approved by the Minister in accordance with section 60.”.
Will the Minister explain the rationale behind amendment No. 91?
It sets out the criteria by which an oil consumer company may gain an exemption from the levy payment on the basis of an oil storage contract between an oil consumer and a third party for the purposes of oil stock holding. The criteria or conditions are that the Minister must approve the oil storage contract between the parties before the contract is signed between them, and that the contract must be one between the oil consumer and the third party, by which the third party undertakes to hold oil stocks in the State on behalf of the oil consumer for the purpose of claiming the levy exemption.
The proposed amendment will strengthen the Minister's powers in regard to the assessment of applications by consumer companies for levy exemptions on the basis of oil stocks held by third parties on behalf of the oil consumer. The amendment requires that oil consumers receive the approval of the Minister in advance of entering into a contract with a third party for the purpose of holding stocks on behalf of the oil consumer in order that the oil consumer may avail of special exemption. It is an effort to strengthen the Minister's power to ensure that any deals done that give rise to an exemption from the levy are used legitimately and are subject to scrutiny.
Amendment agreed to.
Section 38, as amended, agreed to.
Sections 39 to 46, inclusive, agreed to.
SECTION 47.
I move amendment No. 92:
In page 27, between lines 5 and 6, to insert the following subsection:
"(2) Documents subject to legal professional privilege shall not be liable to production under this section.".
This will add to the various functions assigned to the authorised officers, such as entering premises and inspecting books and so on. The amendment proposes that documents that might have been designated privileged should not be accessed. Our legal advisers inform me that this provision should appear in similar sections in every Bill. As the Taoiseach says in his many explanations, for completeness, this would be a useful subsection to add to section 92.
I appreciate the rationale behind this amendment but there are several legal and drafting issues to be considered before it could be included in the Bill. If the Deputy is happy to withdraw the amendment, I will reflect further on it and introduce a similar amendment on Report Stage. It is a valid point and requires further consideration.
Amendment, by leave, withdrawn.
Section 47 agreed to.
Section 48 agreed to.
NEW SECTION.
I move amendment No. 93:
In page 27, before section 49, to insert the following new section:
"49.—(1) An authorised officer who, after entering premises under section 47 or under the authority of a warrant issued under section 48, forms the opinion in the course of exercising his or her powers under section 47 that—
(a) a relevant activity has been or is being carried on by any person at the premises otherwise than in compliance with a regulatory provision, or
(b) there is a risk to the health, safety or welfare of any employees at work on the premises,
shall report the matter to the appropriate authority.
(2) In this section—
"appropriate authority" means—
(a) a member of the Garda Síochána,
(b) the Health and Safety Authority,
(c) the Environmental Protection Agency,
(d) the local authority in whose administrative area the premises are located,
or
(e) the Revenue Commissioners;
"regulatory provision" means—
(a) any provision that is contained in or made under an enactment passed for the protection of employees, the protection of the environment or the regulation of planning and development, or
(b) any provision of Chapter 1 of Part 2 of the Finance Act 1999 or of a regulation made under section 104 of that Act.”.
Amendment agreed to.
Sections 49 and 50 agreed to.
NEW SECTION.
I move amendment No. 94:
In page 28, before section 51, but in Part 6, to insert the following new section:
51.—The new Agency must establish a timeframe for the conclusion of all outstanding issues relating to the Irish National Petroleum Corporation and Whitegate.".
This amendment addresses the old chestnut of the outstanding matter of the Irish National Petroleum Corporation. In 1979 the corporation bought the Whitegate oil refinery on behalf of the State after its then owners, Esso, Shell, Texaco and BP, decided to pull out. The State had to become involved in a public enterprise because of the failure of private companies. On 16 July 2001 the Whiddy Island oil terminal and other corporation related assets were sold to the Tosco Corporation. The State's involvement with the operational aspects of the oil industry was concluded. The Irish National Petroleum Corporation Limited Act 2001 facilitated this. This was a period of deep State involvement with the oil industry.
The then Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern, informed me the State expected a return of €120 million for the assets. So far it has only received €20 million. The current Minister informed me the total net return to the State from the sale would only be €30 million. Some €90 million of State assets have disappeared. I have asked many times for a timetable for the final payment of these moneys. The departmental website lists the Irish National Petroleum Corporation's activities as including "meeting the requirements from its role as parent company to its remaining subsidiary NORA, which did not form part of the 2001 transaction".
Today on Leaders' Questions the Labour Party leader, Deputy Rabbitte, again raised the issue of the large waste of money from the indemnity deal made by the State at the dissolution of the 28th Dáil. The outstanding moneys to the Irish National Petroleum Corporation are another thorny outstanding issue. It is appropriate, given the relationship with NORA's predecessor, that definite closure be brought to the matter. The outstanding moneys owed to the State, approximately €90 million, seem to have disappeared into the ether.
The proposals contained in the Bill relate to the establishment of NORA as an independent agency in place of its current status as a subsidiary of the Irish National Petroleum Corporation, INPC. On its establishment as an independent body, it will have no relationship with the INPC. The amendment is unnecessary because the agency will have no function in regard to the Deputy's proposal that it must establish a timeframe for the conclusion of all outstanding issues in regard to the INPC and the Whitegate refinery.
There are no outstanding issues in this regard. The Deputy is incorrect in his assumption that there was a loss to the State of $80 million or $100 million. The headline sale price of $100 million included a debt of $80 million that had to be paid off. Some $20 million was to come to the State but it is likely we will have received some IR£30 million. In addition, we got the company to operate the facility for 15 years. This was a good deal.
Will Deputy Broughan withdraw the amendment?
I will do so reluctantly. This is the latest in a long line of disastrous dealings. What is the situation with regard to the INPC? Is it winding down?
We are reviewing the INPC's structure and future management. We must meet certain rights and obligations under the sale and purchase agreement associated with the 2001 transaction and are in discussions with legal advisers to see how this can be done. Effectively, however, there is no operation.
What outfit will remain? Will it be one man and a dog?
We must wait and see.
Amendment, by leave, withdrawn.
Sections 51 to 55, inclusive, agreed to.
NEW SECTION.
I move amendment No. 95:
In page 29, before section 56, but in Part 8, to insert the following new section:
56.—The power to make regulations under this Act includes the power to make provision in such regulations to give effect to—
(a) a provision of the European Communities, or
(b) an act adopted by an institution of those Communities.”.
Amendment agreed to.
Sections 56 and 57 agreed to.
SECTION 58.
I bring to the attention of members an error in the published list of amendments. The sponsors of amendments Nos. 96 and 97 are listed as "An tAire Stáit ag an Roinn Cumarsáide, Mara agus Acmhainní Nádúrtha, Thomas Broughan". This should read "An tAire Stáit ag an Roinn Cumarsáide, Mara agus Acmhainní Nádúrtha and Thomas Broughan". Amendment No. 97 is consequential on amendment No. 96 and they will be discussed together.
I move amendment No. 96:
In page 30, subsection (1), lines 14 and 15, to delete "(other than an order under section 1(2), 4 or 5)”.
These are technical amendments.
Amendment agreed to.
I move amendment No. 97:
In page 30, subsection (2), line 18, after "order" to insert the following:
"(other than an order under section 1(2), 4 or 5)”.
Amendment agreed to.
Section 58, as amended, agreed to.
Section 59 agreed to.
NEW SECTION.
I move amendment No. 98:
In page 30, before section 60, to insert the following new section:
60.—(1) An oil company or oil consumer shall submit the contract proposals to the Minister before it enters into a contract with a person (other than the Agency) by which the oil company, the oil consumer or that person undertakes to hold in the State an agreed volume of oil stocks or petroleum products on behalf of the other party to the contract.
(2) The Minister shall withhold approval of proposals submitted under this section unless they are for—
(a) a contract between an oil company and a person (other than the Agency) by which the oil company undertakes to hold in the State, in accordance with a bilateral agreement, an agreed volume of oil stocks, or
(b) a contract between an oil consumer and a person (other than the Agency) by which that person undertakes to hold in the State, on behalf of the oil consumer for the purpose of it claiming an exemption under section 38, an agreed volume of petroleum products owned by the oil consumer.
(3) Before deciding whether to give or withhold approval of proposals for a contract specified in subsection (2), the Minister shall consult with the Agency and shall have regard to such factors as he or she considers appropriate, including the level of national oil reserves and the availability of adequate holding facilities in the State for the purpose of meeting the State’s stockholding obligations.”.
This section provides that for the purposes of oil stockholding, an oil company or oil consumer must submit details of contracts entered into with third parties other than NORA to hold oil on its behalf. The objective of the amendment is to strengthen the Department's position in the approval of proposals by oil companies to store oil stocks in Ireland on behalf of other member states. There are two categories of contract under subsection (2). The first is a contract between an oil company in Ireland and an oil company outside Ireland by which the oil company based in Ireland stores in Ireland stock owned by it or stock tickets on its behalf in order that the oil company outside Ireland may fulfil stockholding obligations imposed on it by its own national authority. The provision constitutes a reversal of the position where NORA has to do it.
Is there much oil in Ireland on that basis?
No. The provision provides for this possibility. It would not make much sense for a member state to store a great deal of oil here as it would incur transportation costs.
The second category provides for a contract between an oil consumer located in Ireland and a third party located in Ireland by which the third party contracts to hold in Ireland oil owned by the oil consumer in order that the oil consumer may avail of the levy exemption. It is the same thing. Subsection (3) provides that before the Minister decides to grant or withhold permission on the proposed contracts relating to oil stocktaking, he or she shall consult NORA and take account of factors such as the level of national oil reserves and the availability of adequate holding facilities in the State for holding national reserves. The provision gives the Minister the power to withhold permission where a proposal to hold a significant volume of oil here would affect the national stockholding.
Amendment agreed to.
Sections 60 to 64, inclusive, agreed to.
Title agreed to.
Bill reported with amendments.
I thank the Minister and his officials for attending today's session and Opposition members for their co-operation and constructive views.