Priority Questions
1Deputy Niall Collins asked the Minister for Communications; Energy and Natural Resources if he will outline his liaisons with the Department of Jobs, Enterprise and Innovation regarding the media mergers aspect of the Consumer and Cormpetition Bill; his views on the fact that this Bill has been delayed several times; and if he will make a statement on the matter. [22130/12]
Amharc ar fhreagraIn July last year the Government approved the draft heads of a new consumer and competition Bill as submitted by the Minister for Jobs, Enterprise and Innovation. Part of that decision involved giving effect in legislation to the recommendations of the Report of the Advisory Group on Media Mergers and to transfer responsibility for public interest considerations relating to media mergers from the Minister of Jobs, Enterprise and Innovation to my Department. The existing legislative provisions governing these issues date from 2002, and the advisory group recommended a thorough revision of these in 2008.
Primary responsibility for promulgating the consumer and competition Bill 2012 rests with my colleague, the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton. He and I discussed this issue following the formation of this Government, following on from a series of discussions between officials, and agreed the transfer of responsibility in respect of the media mergers to this Department.
The consumer and competition Bill 2012 is one of a large number of Government Bills currently being drafted by the Attorney General's office, and I gather that it is likely to be later in the year before a draft Bill is ready to be published and brought before the Oireachtas. I would like to point out that the Bill has not been delayed a number of times; the entirety of the delay thus far has been due to the amount of legislation in train and the particular priority that has had to be given to certain legislation in the context of the commitments made to the troika.
The critical role of the media in our democracy, and the potentially harmful effects of an over concentration of media ownership, means this issue is a vitally important one. The Government remains committed to implementing a set of robust measures that allow for a transparent and objective assessment of the public good in media mergers cases, and to do so as quickly as possible. Officials from my Department are actively engaged in the drafting process, in consultation with the Department of Jobs, Enterprise and Innovation, with the objective of ensuring that my primary concerns around the preservation of plurality and diversity in media will be reflected in the draft Bill.
The Minister states in his reply that the Bill has not been delayed but on 14 September 2011 it was on the B list with a publication date of early 2012, on 11 January 2012 it was on the B list with a publication date of mid-2012 and on 17 April it was still on the B list with a publication date of late 2012. It is moving on but events outside this House are beginning to catch up with it. The functions are to be transferred to the Minister's Department. When will the Minister assume full responsibility for that element of it? Is there scope or a need for separate legislation or will it still come under the umbrella of the competition and consumer Bill on media mergers?
As the Deputy knows, broadcasting is currently the responsibility of this Department. After the Bill to which he refers is enacted, this Department will be also responsible for print media. In terms of how early that is likely to happen, it has to await the enactment of the major revision of competition law that is in the new competition and consumer Bill. It is a major Bill. The Deputy is correct. It has been dislocated, as have some other Bills, primarily because of the pressures on us from the troika to give priority to other pieces of legislation. I agree with the Deputy that this is an important Bill. Once the Bill is enacted, it is the responsibility of this Department and has no interaction with the other Department.
2Deputy Martin Ferris asked the Minister for Communications; Energy and Natural Resources his views on the report on offshore oil and gas exploration approved by the Joint Oireachtas Committee; and if he will make a statement on the matter. [22132/12]
Amharc ar fhreagraThe Deputy will be aware that neither I nor the Minister of State, Deputy Fergus O'Dowd, has received the report on offshore oil and gas exploration from the Joint Oireachtas Committee on Communications, Natural Resources and Agriculture. I understand the committee has engaged with the subject matter of this report for more than six months and over that time has invited a range of parties to give evidence before it. My Department made a presentation to the committee in September last and has provided additional material since then to assist the committee in its work.
I understand the committee's report is due to be published shortly and I look forward to receiving a copy as soon as it is available. I can assure the Deputy that I will be happy to discuss the report and its recommendations as soon as I have the opportunity to read and consider the report in detail.
I thank the Minister for the response. The report will be published next Wednesday. As the Minister stated in his response, in recent months the committee met representatives of different sectors in regard to offshore exploration. While my party may have a more radical view, the Minister will find there is an element of compromise in the report on the part of all concerned for the greater good. The report will be in advance of where we are now but it will be taken in the light of trying to get a better return for our resources. While many arguments were made in the past regarding incentives and so forth, we are at a stage now where the exploration project is in a far better place than it was some years ago. There is a good deal more interest, particularly in regard to security and so forth. Will the Minister give an undertaking that he will come back to the House and debate the report with us? Will he acknowledge that the report is an all-party report by a committee, the majority of whose members are Government TDs and Senators and that it was unanimously supported and adopted by the members of the committee?
I acknowledge that it is an all-party report. I acknowledge also the seriousness with which the members of the committee went about their work. I am aware of some of the submissions made to the committee. I understand from the Chairman that it is a report of some merit and if Deputy Ferris says it will be published next Wednesday, I welcome that. I assure the Deputy that it will be taken very seriously in this Department. If it is his wish that the Oireachtas committee report be debated in the House, I am happy to see that matter decided by the Whips. The Minister of State, Deputy O'Dowd, and myself will be glad to participate in that debate.
When the Minister was on this side of the House he would have known that many reports commissioned and produced by various committees were left on the shelf. I hope he will give an undertaking that once we debate this report he will proactively implement its recommendations.
I am happy to commit to having a debate on the report in the House as soon as such may be organised. The Deputy will have to appreciate that I have not yet received the report.
3Deputy Luke ‘Ming’ Flanagan asked the Minister for Communications; Energy and Natural Resources if he will consider the proposal (details supplied) which suggested that an offer of a half share of ownership be made to the Norwegian State in return for managing the natural resources in our territorial waters; and if he will make a statement on the matter. [22129/12]
Amharc ar fhreagraThe proposal to which the Deputy refers was made in a print media article that began with a statement that Ireland was about to sign away almost all of our resources on terms by far the worst in the developed world. In reply I pointed out that both claims were factually wrong and demonstrated that the fiscal terms applying to profits from oil and gas production in Ireland were pitched at a level comparable with that in other similar European countries. In addition, I explained that under the 2011 Atlantic margin licensing round, applications were only received for approximately 6% of the area on offer. While the number of applications received was positive in comparison to the number received in previous licensing rounds, it still means that for the vast majority of Ireland's offshore, no exploration work is taking place. Having established that the reasoning giving rise to the proposal was flawed, it follows that the proposal was without basis.
The challenge for Ireland is not how to manage its natural resources but how to attract a sufficient level of exploration investment to establish our offshore oil and gas potential. Even with our current fiscal regime which is deliberately aimed at attracting new investment, exploration levels remain very modest.
If Ireland were to hand over a half share of its oil and gas resources to another country, apart from being an entirely daft proposal, it follows that the potential return that could be offered to incentivise oil companies to invest in exploration here would have to be reduced significantly. At current levels, the incentive has delivered modest results. If it were to be more than halved, that could end all exploration efforts in our offshore which would not be in our interests.
While I would have liked to have tabled this question at the time the article in question was published, unfortunately, I did not have an opportunity to do so. However, the Minister's answer was interesting. I do not subscribe to the simple school of thought that there is a substantial amount of oil and gas in Irish waters from which we could make loads of money. The proposal which the Minister described as "daft" is an interesting one and should be explored. Given that the State receives only a minuscule amount of money from exploration companies which find oil and gas in Irish waters, it is difficult to ascertain what are the benefits of the current approach. Companies which find oil and gas in Irish waters are not required to land their finds in this country and may transport them elsewhere. In such circumstances, the benefits to Ireland are minimal. Would it not be worthwhile to discuss this issue with the Norwegian Government, given its extensive expertise and substantial investment in this area? Surely it would be worth a try.
I presume the report to which Deputy Martin Ferris referred will result in the House discussing many of the issues Deputy Luke ‘Ming' Flanagan raises. His question relates to the suggestion that "an offer of a half share of ownership be made to the Norwegian state in return for managing the natural resources in our territorial waters". If he looks at the Marine Institute map of Ireland, he will find that more of this country's territory lies offshore than onshore. I would not contemplate the notion of handing over half of our offshore natural resources to another country.
I am not sure what is the point of the proposal, given that our problem is one of finding oil rather than managing our resources. If we find oil, there is sufficient talent in the country to manage it. The problem, however, is that the strike rate since the 1970s has been very disappointing. We have had only three gas strikes, with one further strike in prospect, and no oil strikes. How Norway comes into the equation is beyond me. There are no similarities between Ireland and Norway in this regard, a view borne out by the submission the Norwegian ambassador made to the joint committee of which Deputy Ferris is a member. Norway has a strike rate of approximately one in four and a uniquely advantageous geology. Furthermore, the Norwegian Government refunds 78% of the cost of a dry well, so confident is it of strikes in its waters. This confidence is also reflected in the tax rate applied to oil and gas in Norway. If one drills dry wells, it does not matter whether the tax rate is 0%, 40% or 80% because it is still 0%, 40% or 80% of nothing. Our problem has been one of getting exploration activity offshore in the hope it will be possible to make a find. We do not need another country to do that for us.
The Minister makes a relevant point when he notes that 80% or 40% of nothing is still nothing. However, one can apply the same logic to the idea of giving a 50% share of something to Norway because, as matters stand, it would amount to 50% of nothing. We could use the expertise developed in Norway and adopt the Norwegian approach to offshore exploration. While I accept that Norwegian waters have more oil than Irish waters and that it is, therefore, easier to make finds in Norway, on the basis that a high percentage of nothing is nothing, why not explore the proposal and ascertain its potential? Having done so, the Minister would then be entitled to describe it as daft.
It is noteworthy that in the recent round of licensing which was, relatively speaking, more successful than previous rounds undertaken in the past decade, the Norwegian state oil company did not even submit a bid. It is not an issue of Norway having skills that are not otherwise applied here. The mistaken premise of the original article was that Norway and Ireland were comparable in terms of the potential for discovering hydrocarbons. The 13 companies to which we awarded licences a few months ago have the necessary skills. What we need is to get another 13 companies-----
Does the Minister disagree with the Frank Fahey analogy?
If one is drilling two wells per annum, the prospect of making finds can be compared to finding a needle in a haystack. It is not a question of handing over to another country something that has, I hope, valuable potential for the State but of trying to strike the right balance to persuade exploration companies to come here. We do not have the investment required to establish a State oil company which would engage in exploration and drilling.
4Deputy Niall Collins asked the Minister for Communications; Energy and Natural Resources if he has discussed with the Department of Public Expenditure and Reform whether the part-privatisation of Bord Gáis will be affected by the decision to establish Irish Water within its auspices; and if he will make a statement on the matter. [22131/12]
Amharc ar fhreagraAs part of the State assets disposal programme, the Government has decided with the troika on the sale of Bord Gáis Éireann's energy business. Bord Gáis Energy is a dynamic and successful part of the Bord Gáis Éireann's business which has delivered real benefits for consumers as it has invested and grown in power generation and energy supply. The sale of Bord Gáis Éireann's energy business will support the company and its employees to continue to grow, while enhancing competition in the energy market for the benefit of the economy and consumers.
The Government has reiterated its commitment to retaining the gas networks and interconnectors in State ownership as strategic infrastructure which is fundamental to Ireland's security of energy supply and the economy. Following the Government's decision on State asset disposals, a group comprising my Department, the Department of Public Expenditure and Reform and NewERA has been tasked with progressing all policy, regulatory, legislative and financial issues to be addressed prior to the disposal of Bord Gáis Energy. This work which is ongoing is taking full cognisance of the recent Government decision to establish Irish Water within the BGE group. The decision reflects the Government's confidence that BGE's strong experience and capacities can be quickly deployed in the successful establishment and operation of Irish Water.
My Department, NewERA and the Department of Public Expenditure and Reform, in co-operation with the Department of the Environment, Community and Local Government and BGE, will ensure the work of preparing Bord Gáis Energy for sale and establishing the water utility in State ownership within the BGE group are advanced in a fully complementary way and to schedule. My Government colleagues and I are confident that BGE has the capacity to sustain its ongoing oversight and management of the gas networks, as well as working with the Government on the sale of Bord Gáis Energy at the same time.
It is the Government's intention, agreed by the troika, that the asset disposal programme will be implemented in an orderly process over time in a way which will allow all policy regulatory and financial issues to be addressed in advance and ensures full value for the State. In that context, it is the Government's collective plan to ensure the smooth implementation of the decisions to sell Bord Gáis Energy and establish Irish Water as part of the BGE group.
The Minister has stated the Government has its asset disposal policy, of which we are aware. Will he give an undertaking that Irish Water, when established, will not form part of the Government's asset disposal programme any time in the future? What other organisations or entities were considered in tandem with Bord Gáis for the roll-out of the water supply and water metering programme? We do not have insider information on why Bord Gáis was selected by the Government. How many other similar organisations were considered by it for the roll-out of the programme? Can the Minister shed light on the process undertaken? We know that there was no formal tendering process, but we are operating in a vacuum in respect of the decision made.
There is no question of Irish Water being privatised. The decision brought to the Cabinet by the Minister for the Environment, Community and Local Government required the Government to make a choice between Bord na Móna and Bord Gáis. At that stage of the process the Minister had narrowed it down to these two bodies. The only decision the Government took was to select Bord Gáis and decide that there would be no privatisation of water services. Contrary to what is stated in a great deal of material I have been reading, that is the only decision the Government made.
5Deputy Martin Ferris asked the Minister for Communications; Energy and Natural Resources the position regarding the awarding of contracts by State companies to overseas firms; and if he will make a statement on the matter. [21704/12]
Amharc ar fhreagraThe awarding of contracts by State companies under the aegis of my Department is an operational matter for the individual companies in the first instance. I have no function in this regard. The code of practice for the governance of State bodies sets out clear procurement requirements. It is the responsibility of boards to satisfy themselves that these requirements are adhered to.
EU directives and national regulations impose legal obligations on public bodies in regard to advertising and the use of objective tendering procedures for awarding contracts above certain value thresholds. Even in the case of procurement which might not be subject to the full scope of EU directives such as certain non-priority services or service concessions, the European Commission and the European Court of Justice have ruled that EU treaty principles must be observed.
The implementation of national and European procurement requirements is an important element in the achievement of value for money in the State sector. Boards of State companies are obliged to ensure there is an appropriate focus on good practice in purchasing and that procedures are in place to ensure compliance with procurement policy and guidelines. More generally, public procurement legislation in the European Union is aimed at creating a common market by ensuring free movement of goods, persons, services and capital and promoting effective competition in the internal market. The essential treaty principles include non–discrimination, equal treatment, transparency, mutual recognition, proportionality, freedom to provide service and freedom of establishment. There is a strongly implied requirement to publicise contracts of significant value to a degree which allows parties in other member states the opportunity to express an interest or submit tenders.
Information on procurement policy and general guidance on procurement matters is published by the national public procurement policy unit. This can be viewed or downloaded from the national public procurement website.
I previously raised the issue of the awarding of a contract to Bord Gáis. I received a report from Bord Gáis and a letter from the Minister this morning on the issue. I thank him for his response, but my concerns remain. The wider point is that large lucrative contracts in several State companies have been awarded to firms overseas. I have no doubt that this will lead to significant job losses and the closure of long-standing Irish businesses dependant on these contracts. Does the Minister agree that there ought to be preferential treatment for Irish companies applying for these contracts? The current policy is definitely mitigating against the Government's stated objective of utilising existing public companies to maximise job creation opportunities. It does not make sense, therefore, that a big company should take over resources from State companies and brings in its own personnel. The consequence of such actions is that the dole queues are being added to.
I have raised with Bord Gáis more than once the matters raised by the Deputy in the House. This has caused the company to communicate directly with him. On the wider issue he raises, the fact remains that we are a member of the European Union. To do what he asks would run contrary to the law. Therefore, we cannot do what he suggests in terms of procurement. Even if any of the companies was minded to do it, it would not be free to do what he requests. Irish companies would suffer if this were to happen because they, too, are contending for and winning contracts outside Ireland. This includes State companies such as the ESB and Bord na Móna which are very successful in this area and have built a very interesting talent bank in engineering and other skills. Within EU law on freedom of movement it is not possible to restrict recruitment by such contractors to within this jurisdiction only.
I accept what the Minister is saying, but in the case I raised with him on two occasions and brought to the attention of the House about a company awarded a contract, I pointed to the past actions of the company and the convictions against it outside the State, yet it does not appear to have brought about a situation where it could be deemed unfit to carry out the contract awarded.
The Deputy is in possession of as much information as I am. This is a giant international company the services of which were procured in the normal way by Bord Gáis Éireann.
Bord Gáis Éireann has gone to considerable difficulty to persuade Deputy Ferris and myself that it did everything above board, which is not to say some of the matters Deputy Ferris brought to my attention are, and were, not of the utmost gravity. Most of the events happened some time ago. This is a giant multinational company and the service Bord Gáis Éireann was recruiting does not relate to the same territory, personnel or anything like that. Bord Gáis Éireann is convinced the company in question is professionally well equipped, has done a good job and was procured in accordance with procurement guidelines.
