This meeting has been convened for the purpose of the consideration of the Control of Exports Bill 2007. I welcome the Minister of State at the Department of Enterprise, Trade and Employment with special responsibility for trade and commerce, Deputy McGuinness, and his officials.
SECTION 1.
I move amendment No. 1:
In page 4, to delete lines 4 to 7.
This amendment deletes the definition of "transfer by electronic means" by reference to Council Regulation No. 1334/2000 as it was considered that the term is commonly in use and does not require a specific definition. Given the fast pace of technological developments, it was also felt that to restrict the scope of the definition to what is currently understood to comprise electronic transmissions might exclude new methods which could emerge during the lifetime of the legislation.
Amendments Nos. 2 to 4, inclusive, will be discussed together.
I move amendment No. 2:
In page 4, before section 2, to insert the following new section:
2.--Every order or regulation under this Act, other than an order under section 12(2), shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the order or regulation is passed by either such House within the next 21 days on which that House has sat after the order or regulation is laid before it, the order or regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done under the order or regulation.".
Since the Control of Exports Bill was initiated, the European Communities Act has been enabled to permit relevant domestic legislation to be used to give effect to European Acts. As a result, it is not necessary to make a specific provision to that effect in this Bill. The Government amendment proposes the corresponding deletions from this section. While I am grateful to Deputy Penrose for his amendment which has the same purpose, I propose the committee accept the Government amendment as it also corrects the reference to the commencement order provided for in section 12(2).
The intent of amendments Nos. 3 and 4 which I have tabled is to reflect the passing of the European Communities Act 2007 which regulates the making of regulations to give effect to European law. We consider the special powers in section 2 are not appropriate. The Minister has pre-empted my amendment and I withdraw mine in favour of the Government amendment.
I move amendment No. 5:
In page 5, subsection (2)(b)(i), line 8, after “citizen” to insert “or resident”.
The Bill involves a significant number of issues. Certain aspects are defective, as we indicated on Second Stage. The Bill represents the bare minimum to deal with the bigger issues. A number of Deputy Morgan's amendments have that objective in mind. The Bill's approach is minimalist. The question that will exercise everybody's minds is whether the Bill will be effective and achieve its objectives. In this amendment we request that the words "or resident" be inserted after "citizen" in page 5, line 8, because it is discriminatory to exempt non-citizen Irish residents from regulations if Irish citizens are to be covered. It is in the interests of treating everyone equally before the law. I ask the Minister of State to consider the reason we have placed the amendment before him.
As drafted, this section enables Ireland to comply with the EU common position on brokering which encourages member states to impose extraterritorial controls on brokers of their nationality resident or established in their territory. While I thank the Deputy for his proposed amendment, which would have the effect of extending extraterritorial brokering controls to persons normally resident in Ireland as well as citizens of Ireland, a similar amendment was tabled by Senator Quinn in the Seanad last March. My predecessor, Deputy Michael Ahern, promised to examine the possibility of expanding the scope of the extraterritorial controls along these lines before the Bill reached the Dáil and, if legal advice proved favourable, to introduce a Government amendment. Since Committee Stage in the Seanad, my Department has sought and received advice from the Attorney General's office. As indicated in the Seanad debate, there are serious concerns about the lack of a single definition of a resident under Irish law. This contrasts with the position in other countries where there is a civil registration requirement for all residents. There is also the question of the extent to which the State can attempt to impose extraterritorial controls. It is possible the inclusion of such a provision could create the basis for a legal challenge to the Bill. This course of action could, for example, be taken by parties to whom we might wish to apply controls. I regret that, while desirable from a policy viewpoint, the legal considerations are such that this worthy amendment might create more problems than it would solve. For that reason, I cannot accept it.
I anticipated the Minister of State's reply and can see where the amendment would lead. Its objective is worthy but there is a question over how we can colour it to deal with the issue which is important and which will probably raise its head in some form. I appreciate what the Minister of State said, that if we insert it now it could be used to defeat its intent. I ask that a close eye be kept on the section to monitor whether it will be abused. If it is, I urge the Minister of State to return the Bill to the Oireachtas. It would not be a sign of weakness but of strength in the Department's personnel that they were keeping a close watch on the matter. In the spirit of the time of year, I will withdraw the amendment.
Amendments Nos. 6 and 8 will be discussed together.
I move amendment No. 6:
In page 5, before section 5, to insert the following new section:
5.--Whenever and so often as the Minister thinks appropriate, and subject to such exceptions (if any) as he or she thinks proper, the Minister may by order prohibit or regulate production overseas, except and in accordance with a license, of such class or classes of goods or technology as may be specified in the order.".
The Bill must control overseas licence production agreements undertaken by Irish companies. There is a precedent for this because the USA, for example, has tight control over its companies based overseas, and with good reason. Apache attack helicopters were used by Israel to attack civilians in Palestine. The Department of Foreign Affairs stated Irish airports should not be used by aircraft transporting weapons to Israel, yet components of those attack aircraft were manufactured using the dual use process in this State. It is essential that significant controls be put in place and this legislation presents the opportunity to do so. I hope the Minister of State will seriously consider the amendment.
I support this amendment. I raised this issue on Second Stage. Irish companies are involved in significant licensed production of military goods and services for export. We all know this is happening. The Minister's predecessor gave somewhat confused replies on the issue. How we deal with such licensed production by Irish companies is important. The concern is that after the Bill has been passed, we will be no closer to ascertaining the countries and end users to which the licensees are permitted to export the equipment produced. The nub of the matter is the criteria the Government will use to deal with the issue. The Minister of State will speak about confidentiality. If information is given to his Department in confidence, we must respect this. Nevertheless, why should we be too secretive as regards publishing broad figures on various matters which are available in other countries? We will insist that there be not just apparent control, but real, effective control. I urge the Minister of State to examine the amendments carefully in the name of Deputy Morgan.
Deputy Morgan's amendment proposes the creation of a new section to provide for controls on licensed production overseas, that is, where an Irish-based company enters into an agreement for a company in another country to produce goods it has designed. This is a longstanding demand by Amnesty International which called for it in its submission to the Forfás review on licensing. For the benefit of Deputies, I will recall the findings of that report which was prepared by experts commissioned by Forfás, including the reputable Stockholm International Peace Research Institute. It concluded that while control of licensed production overseas was legally feasible, it was not a priority concern in the context of the Irish industrial base. I agree with the findings of the report. My Department already controls such activity by issuing export licences for technology transfer where such agreements are entered into. This practice will continue under the new legislation.
Second, I remind the committee that the scope of the Bill is to provide for control on exports. Finally, there are very real concerns with regard to the extra-territorial aspects of the amendment and any attempt by Ireland to control the activities of a company based in a foreign jurisdiction. For these reasons I urge the committee to reject the amendment. Some of the comments made by Deputy Penrose relate to the annual reporting system. On the comparison with the US, we produce some components but the US produces the full range of heavy artillery. It is not comparing like with like.
It is disappointing to hear the Government is aiming for a minimalist control of exports in this legislation. We have an opportunity to deal comprehensively with an issue that warrants comprehensive attention.
The Minister of State referred to a couple of reports. I remind members of the briefing circulated by Rosalind McKenna, the advocacy officer of Amnesty International, which a number of members have brought with them today. If we are to reduce the scope of the legislation to exports only, we are leaving the gate wide open for all kinds of abuse. It does nothing to significantly control what type of product is developed, sold and shipped by Irish companies from another state. The Government should strive for a model law enforcement system, not a minimalist one, as the Minister of State described it. The criteria used by the Government for determining such approvals should be as stringent as they are for direct arms exports. That is a reasonable request and we are missing a great opportunity. Why are we going for a minimalist approach? Why do we not maximise the scope available to us?
There are many examples of what I am talking about and the Apache attack helicopter is probably as good as any. Why are we not dealing comprehensively with that in this legislation? What we are doing is not even equivalent to putting one's finger in the dyke - it amounts to opening the floodgates. Why do we not control all these things now?
It is not a minimalist approach. We are acting on the Forfás recommendations. Aside from them, this is a control of exports Bill so there are issues around licensing. The Department is active around the issuing and scrutiny of those licences. It has systems in place to ensure compliance with the licence and with EU regulations. It checks the product in terms of pre-shipment and satisfies itself as to the end user. We have technical specifications for what is shipped so it is not a minimalist approach. When one takes into account our actions, those of the EU, the licensing system, the checking system and the scrutiny of the end user, it is quite a robust approach to export control.
I am speaking at length to this amendment because my amendments, in general, are similar in intent. I am using this one to cover the points made in all of these amendments. I accept that the Bill deals with the control of exports but many Irish companies with bases elsewhere are exporting products from those bases and that is not covered by the Bill. There is no provision for those companies to be required to seek licences in that regard. Why not? What is the difference between a company exporting from Dublin, Limerick or Donegal and an Irish company exporting from a port in Spain or Germany? If it is an Irish export company it should be required to have a licence arrangement with the Department. The Department should make details of the export licences available to the Houses of the Oireachtas. Why does the Bill deal with the control of exports from this State only? Why does it not deal with the control of exports of Irish companies from anywhere?
There is control in regard to military products and military technology. The issue the Deputy raises is one I have already dealt with, namely, our jurisdiction in other countries. The control of exports, how we issue licences, how we inspect them and deal with the end user are all dealt with in the Bill. The Deputy says it is a minimalist approach but it is not. If he examines what the Department does beyond the Bill and how it functions, even at present, he will see there are serious controls. We are satisfied that we have control with regard to the information gathered in the course of issuing the licences and over the activities of companies in the State. The Deputy is asking us to exercise that control in another jurisdiction. There are EU-wide controls but we cannot do what he suggests.
The State has jurisdiction over companies established in this State so we can require them to have licences. Any company established in this State will have the tag of being an Irish company. The US, as I have already said, exercises its jurisdiction without any equivocation so there is a precedent for it to happen. Why would the Minister of State not exercise such control and jurisdiction? He does have the powers as they are exercised successfully by others, including the US. Licence applications should also be a matter for public scrutiny and be put on the public record.
The US does not have any qualms about jurisdiction elsewhere but US companies make products that can be used immediately, such as a gun or a tank. One cannot compare that to the Irish situation. We operate by principles of best international law. We control the technology transfer aspects of what is done in the State.
Is the amendment being pressed?
I want to tease the matter out further.
Very briefly.
I will be brief. The Minister says we cannot compare the production of a gun or a tank with some piece of equipment produced by an Irish company, such as a piece of software which will guide a missile. What is the difference between the two? They are all components of a product with the same end use. It is ridiculous to say they are not comparable.
I do not understand the Minister's point on the US. The US diligently controls US companies based abroad. It operates a strict licensing regime and will not allow companies to sell equipment to countries or states it regards as in any way hostile to US interests. The US has absolute control in that regard but the Minister of State says we cannot do the same. We can do it if the US does it, and there are other states which exercise the same level of control.
Just because the US does this it does not mean we should do it. Does the Deputy want us to have the same foreign policy as the US? We have to tailor our policy--
Look at Shannon.
--according to what is happening within industry here. We are not producing a gun or a tank in its finished product and exporting it, we are producing components and we have components that are of dual use. One must have consideration for the commercial aspects of that product and then look at how it might be used in the context of its capability as a dual purpose product.
Within this Bill we are catering for that particular aspect of its production. We are rigidly controlling it in the context of licences and so on, as a process within the Department where it is monitored and reported on. This forms an end of year report which is placed before the Dáil and debated and puts the information into the public domain. That is tailoring legislation relative to what is actually happening here, not what some other country is doing relative to its production, which is not compatible with ours. It is not a question of taking US policy and superimposing it on an Irish situation. One has to look at the Irish situation and determine what type of policy we want, the extent of that policy and the present policy. What we are doing in this Bill is controlling exports, adding to what we have already, presenting robust legislation relative to the situation in Ireland and what is happening abroad and the components produced here because we have a commercial operation to protect also. It is that balance we are reaching in the context of this Bill, not finding some piece of US legislation and imposing it here. That would not work. It simply does not compare with the Irish situation.
This Bill presented an opportunity for the State to do something constructive in terms of the control of our exports and, particularly, in respect of militarisation and various pieces of equipment. I see little point in debating the matter further because the Minister of State says we are not producing tanks and guns, which he thinks is fine, but we are producing the software to guide those missiles that will do whatever the weapon and the tank is going to do and he sees no correlation between the two. That is preposterous.
The Minister of State's description of protecting commercial interests is interesting. Surely to goodness we should be trying to protect all kinds of other issues, such as human rights, and take a constructive view in terms of the example of Israel attacking Palestinian civilians who have little more than stones to throw back at them when they are going in with all sorts of aircraft - MiG and F-5 fighters and so on. The Minister of State sees no correlation in any of that according to his contribution. It is a very shallow attempt by the Government to try to disguise this legislation as somehow progressive. It is far from progressive, it is extremely shallow and misses the opportunity. The Chairman is correct, I see no point in continuing this debate any further because the level of debate we have is ridiculous.
I am concerned about this aspect of the matter also because this is clearly a battle between commerce and ethics and there is only one winner, commerce. Issues that affect human rights appear to take little precedence in the overall evaluation of this issue. That is the reason we are concerned and the reason we support Deputy Morgan's amendment.
While I do not doubt the Minister of State's bona fides, his view will prove to be little more than cosmetic at the end of the day in respect of this aspect of the matter. That is why we in the Labour Party have a strong view on the matter.
Given the time of year I do not want to get into an in-depth argument with Deputy Morgan. I find what he has said in regard to the Bill and my comments being shallow,offensive, particularly coming from him.I do not say that lightly. I have made the best effort to put forward a Bill that I consider to be robust, having consulted with our partners in Government, Amnesty International and others. It is not a question of commerce winning out but of establishing a balance in the context of commerce, human rights, everything else and the arms trade. That is what this Bill is about. The Deputy might like me to shut down all the companies that are producing the software or hardware that has a dual purpose. One has to understand it has a dual purpose.
I am not suggesting that.
The Deputy is suggesting it.
No, I am not.
It is there in the fine print.
I am suggesting that there should be a licensing regime----
I do not accept what Deputy Morgan is saying. I have endeavoured in recent months, since I took up my position, to find a reasonable consensus around this issue and understanding for moving forward given that much of this is already in place. I want to put it into legislation and give the House the opportunity to debate the issue in the context of the annual report, which I am also amending. It is not something that is legislation forever but it deals with the current context.
If something should emerge I would be flexible, I would come back and change it. I am not afraid of U-turns, I do them most days in business to survive. I do them in politics likewise if it is for the purpose of providing better legislation and I am willing to come back and discuss it. I am willing to sit down with the Deputy, outside of this Bill, and discuss the matter. So far as I am concerned in framing and bringing legislation before the House, I am prepared to consult with Opposition parties, parties outside the House and with individuals and to listen to them. I have to frame the legislation in the context of what is actually happening, not on the basis of some television programme.
I do not like the comment that was made about commerce. It is not about protecting commerce at all costs. If there was something wrong out there I would deal with it. It is a balance that has to be struck in the context of the Irish situation and it is an evolving situation in terms of how these dual use goods are produced and, therefore, the legislation has to take that into consideration.
At this stage I have to put the question.
I am not one bit bothered about the Minister of State taking umbrage.
I am not bothered about the Deputy either.
I am not one bit bothered about the Minister of State taking umbrage.
Perhaps the Deputy knows more about this than I do.
I just want to clearly record that I have not sought to close down one company or one single job in relation to this. What I am asking for and what the import of this amendment is about is getting a licensing regime in place in order that the Minister of State has some awareness of what is going on. I have not--
We are going back over ground here. The question is--
Allow me to finish on a positive note. I do welcome the Minister of State's offer to meet with me privately to discuss this matter and I will take him up on it.
I move amendment No. 7:
In page 6, before section 6, to insert the following new section:
6.—In making orders under sections 3, 4 or 5 the Minister shall have regard to any principle or policy embodied in a provision of the treaties governing the European Communities (within the meaning of the European Communities Act 1972) or an act adopted by an institution of the European communities, and to any other international obligation of the State and any relevant matter of general Government policy.
I do not think this amendment will be as controversial as the previous amendment. Sections 3 to 5, inclusive, contain wide powers with no express principles or policies that would bring the sections within the constitutional requirement of a case that would be well known in the Minister of State's Department, namely, Cityview Press v AnCO. That case set out that principles and policies which are targeted or specific should be alluded to in the Act and, therefore, it is a corrective measure to ensure that a particular objective, which is set out in a well-known case which has significant constitutional import, would be achieved. It is in that context that I tabled the amendment.
I thank Deputy Penrose for this amendment, which proposes the insertion of a section setting out the general principles and policies with particular regard to the EU and other international organisations and, indeed, any other general Government policies. This is an interesting suggestion and I am disposed to give it serious consideration if not in a standalone section then, perhaps, by way of additional text in the section referred to. In this regard, I have sought the advice of the Office of the Attorney General and, with the committee's agreement, will come back to this amendment on Report Stage, by which time I expect to have received the legal advice and, therefore, be in a position to give a definitive reply.
I sincerely thank the Minister of State. It is obvious he has given much thought to the matter. I am not trying to be the smartest boy in the class but rather to help the legislation. I withdraw the amendment in that context.
Amendment No. 9 is in the name of Deputy Morgan. Amendments Nos. 13, 14 and 19 are related and may be discussed with amendment No. 9.
I move amendment No. 9:
In page 5, subsection (1), between lines 28 and 29, to insert the following:
"(a) it shall be a condition of granting of a license that licensees report to the Minister on:
(i) post-export delivery of goods or services to the end-user;
(ii) end-use of the goods or services by the end-user;
as stated in the license agreement.".
This amendment refers to reporting, an issue I have addressed at length. There is little point in rehashing the argument; suffice it to say it would be useful to have a reporting system in place and for it to have a public element. I look forward to hearing the Minister of State's reply.
I thank the Deputy for his proposed amendments to the section. However, I am firmly of the opinion that this level of specificity would not be appropriate to primary legislation and propose that the amendments be considered in the context of secondary legislation. It is my intention to consult widely with relevant stakeholders, including exporting companies, as well as this committee in drawing up the regulations.
The Minister of State is talking about secondary legislation. That might be a future subject for discussion by the committee, to which I look forward.
Amendment No. 10 is a Government amendment. Amendments Nos. 11, 12 and 15 are related. Therefore, amendments Nos. 10 to 12, inclusive, and 15 may be discussed together.
I move amendment No. 10:
In page 5, subsection (3), line 31, after "period" to insert "or, if earlier, until duly revoked".
Section 6 makes general provisions with regard to the refusal of licences. It will also enable regulations to be made governing licence application procedures which may include but are not confined to the form or manner of a licence application; provision for on-line applications; supporting documentation required; processing times; duration of a licence; revocation of a licence; record keeping requirements; and provision for an appeals procedure. The imposition of licensing fees is also provided for. However, I do not envisage their introduction at this time. I am committed to the introduction of published regulations and licensing procedures as a means of increasing transparency in the operation of the licensing system.
The first three Government amendments to this section, amendments Nos. 10, 11 and 12, are minor redrafting amendments and do not change the intent of the section. I propose the addition of a new subsection regarding the implementation by companies of internal compliance procedures in response to calls by various commentators for greater post-shipment controls. This will allow me to incorporate such provisions in the regulations. The implementation of appropriate internal compliance procedures will encourage responsible behaviour by exporters at all stages of the exporting process, from the initial contact with potential customers to post-shipment controls.
I particularly welcome this section. I am grateful to work with our coalition partners to ensure internal compliance procedures will be implemented by all licence holders, as provided for in amendment No. 15. The details required by the internal compliance procedures will be contained in the ministerial order and licence holders who breach this requirement will be subject to penalties. To be included in the procedures will be post-shipment checking, whereby a company will be required to check the end user to ensure validity. This will help the Department of Enterprise, Trade and Employment in assessing whether to continue licensing exports to particular end users. I am grateful we have had a good input into the matter.
I move amendment No. 11:
In page 5, between lines 31 and 32, to insert the following subsection:
"(4) A licence issued under section 3 of the Control of Exports Act 1983 shall be deemed to be a licence duly granted under subsection (1) and shall remain in force for the period specified in the licence, or, if earlier, until duly revoked.”.
I move amendment No. 12:
In page 5, lines 37 and 38, to delete subsection (5) and substitute the following:
"(5) The Minister may make regulations for the purposes of this section.".
I move amendment No. 13:
In page 6, subsection (6)(c), between lines 8 and 9, to insert the following:
"(i) including--
(I) countries to which equipment may be exported under the license,
(II) end-users to whom equipment may be exported under the license,
in the case of licensed production arrangements overseas for any equipment on Ireland's ‘military list', as defined in secondary legislation.".
I would like to hear the Minister of State's response to the amendment.
The amendment has already been discussed with amendment No. 9.
Can we deal with it in the context of our discussion?
Yes, we can. I am willing to discuss the matter again with Deputy Morgan or Deputy Penrose should they require me to do so.
I move amendment No. 15:
In page 6, subsection (6), between lines 24 and 25, to insert the following:
"(l) the implementation by licence holders of appropriate internal compliance procedures;”.
Amendment No. 16 is a Government amendment. Amendments Nos. 17 and 20 are related. Therefore, amendments Nos. 16, 17 and 20 may be discussed together.
I move amendment No. 16.
In page 9, subsection (11), line 12, to delete "on the sworn information" and substitute "by information on oath".
This is a minor technical amendment to section 7 which deals with the appointment of officers authorised to enforce the Bill and grants them necessary powers such as the right to enter premises, including vehicles, to inspect goods and technology and to require the production of documents and records. The section also allows for joint inspections with members of the Garda Síochána and Customs and Excise officers.
I move amendment No. 17:
In page 10, subsection (1), to delete lines 8 to 13 and substitute the following:
"(ii) on conviction on indictment--
(I) to a fine not exceeding the greater of €10,000,000 or, where relevant, 3 times the value of the goods or technology concerned in respect of which the offence was committed, or
(II) to imprisonment for a term not exceeding 5 years, or to both such fine and such imprisonment.".
This is a minor drafting amendment to section 8 which creates summary and indictable offences and significantly increases the financial penalties from a maximum of £12,700 under the 1983 Act up to €10 million and-or five years' imprisonment for breaches of the Bill.
I move amendment No. 18:
In page 10, line 32, to delete "31 December 2007" and substitute "31 December 2008".
This section introduces a provision for an annual report on the operation of the Bill to be prepared and laid before the Houses of the Oireachtas. This is in line with a key recommendation of the Forfás review of export licensing and responds to calls for greater transparency in export controls. I welcome the opportunity which will be provided by publication of the annual report to provide accurate information on the export of military and dual use goods from Ireland and to counter some of the misapprehension which results from sensationalist and misleading media coverage of this issue. Despite our best efforts, however, the Bill will not be enacted before the end of the year. I am, therefore, introducing a necessary Government amendment to provide that the first annual report to the Oireachtas on the operation of the Bill will be in respect of 2008. This is not to be regarded in any way as an attempt to delay the provision of information on our strategic exports but merely a technical issue. Until the Bill is enacted, I do not have a legal base on which to submit an annual report to the Oireachtas.
I look forward to debating the annual report when it comes before the committee. It will lead to increased scrutiny of the industry by the Oireachtas. I welcome also the ministerial orders which will follow the Bill, as they will provide an opportunity to regulate the export and brokerage of potential tools of torture.
This is an important amendment in the context of the earlier discussion. The need for the amendment is evident. It is practical and one could not take issue with it. I look forward to the report coming before the committee. It will be a meaty one in that it will contain substantive information, which is important. That may allay some of the fears expressed by Deputy Morgan in earlier contributions. I look forward to ensuring we will have a comprehensive debate on it.
I accept the need for this practical amendment and look forward to assessing the consequence - a level of scrutiny by the committee on an annual basis. I welcome the amendment.
I move amendment No. 20:
In page 11, subsection (2), line 4, to delete "or provisions" and substitute "or different provisions".
I thank the Minister of State and his officials for attending.
