Brian Hayes (Dublin South West, Fine Gael)
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I thank Senator Sheahan for raising this matter. The Minister of State, Deputy Tom Hayes, is, unfortunately, unable to attend for which he send his apologies.

It is important to clarify what services are available to those affected and to set out what actions have been taken to date by the Department of Agriculture, Food and the Marine with regard to the damage caused by the February storm. Wind blow is not a new phenomenon to forestry and is one of the biggest problems facing plantations in this country. The risk of wind blow is influenced by soil type, height of the trees and altitude. Thinning, however, greatly increases the likelihood of wind blow. On certain more vulnerable soil types, such as those which are located in exposed high altitude sites, thinning will increase the risk of wind blow by up to 80%. It is accepted practice in some locations not to thin forests at all. Plantations are at risk of becoming unstable after thinning, as removing some of the crop removes the wind firm edge of the forest, making the plantation more vulnerable to being blown over.

The scale of the wind blow in the February storms was certainly unexpected. However, if we cast our minds back to the high winds and heavy rain we all experienced over the Christmas and into the new year, it would seem the winds of 12 February were the last straw for many forests. While the extent of the damage is estimated to be less than 1% nationally, the damage is extensive at local level. The south and parts of the midlands in particular have experienced significant damage where substantial quantities of timber have been blown over and entire forests in some cases have been completely levelled.

It is important that forest owners realise, however, that although their forests have suffered wind blow damage, there may well be significant value still to be realised from the plantation. Also owners must take care to make the right decision in keeping those trees that remain standing or to clearfell the entire site. This is not the time, therefore, to rush into making decisions on what to do next. Instead, private forest owners should consult with forestry professionals either in Teagasc or with their local professional forester who can help them take the right course of action.

A qualified forestry professional will meet owners on the ground and most importantly advise on health and safety issues when it comes to accessing the plantation and recovering the timber. It is also important for owners to look into the possibility of co-operating with adjacent forest owners. Lower recovery costs can be achieved and higher prices offered where forest owners achieve economies of scale by working together.
Events have also been organised by Teagasc and the Irish Timber Growers Association in conjunction with Coillte on wind-blow plantations. I believe the first of these happened in Kilkenny last week on 8 April attended by 200 people. Other events were organised in Castleisland in County Kerry and I know there was a significant amount of damage in north County Kerry and west County Limerick.
The Department of Agriculture, Food and Marine is facilitating those wishing to apply for felling licences to deal with the situation in the most appropriate manner. In this regard the Department has asked forest owners to make their applications at the time of storm damage to allow it to be prioritised by the Department. While direct funding is not being provided at present to those whose forests were destroyed in the storm, a task force chaired by the Minister of State, Deputy Tom Hayes, has been established to assess the damage nationally and to quickly identify the various issues arising as a result of this serious wind-blow event and to agree on a course of action to deal with these issues. The assessment of the damage will be carried out by Coillte staff. The forest industry, Coillte, the IFA and the Department of Agriculture, Food and Marine have all committed to jointly fund this assessment using high-resolution satellite imagery. The result of this assessment will give accurate maps of damaged areas and allow the Department to review all policies on wind blow.
The task force has issued a guidance note for forest owners laying down the steps to consider in safely harvesting and selling the fallen trees and giving advice on a range of other associated issues. The guidance note is also published on the Department's website. The Department also has set up a dedicated e-mail address, wind-blow@agriculture.gov.ie, for any queries on the issue. Any forestry premium payments that have not yet been paid for 2014 will be paid even if these forests have been affected by this wind-blow event.

Brian Hayes (Dublin South West, Fine Gael)
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As I said in my reply, a task force chaired by the Minister of State, Deputy Tom Hayes, has been established to review all these issues. Teagasc, the IDA and all industry representatives are involved. If there has to be movement on this as set out by the Senator, it would have to come from that task force. I will ensure that the Senator's contribution to this debate will be sent to the task force and it might reply directly to him as to whether it would consider direct compensation. There may be cases where people have insurance. At the very least a full assessment of the damage needs to be concluded as speedily as possible and the satellite images might help in that regard. The task force should look at the issue and I will ensure that the Minister of State, Deputy Tom Hayes, is made aware of the Senator's comments.

Brian Hayes (Dublin South West, Fine Gael)
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I thank the Senator for raising this issue. She is aware that the Government established the Commission on Credit Unions in May 2011. The Government also published an agreed final report in March 2012 and has accepted fully the commission's recommendations. Over 60 of its recommendations are being rolled out under the Credit Union and Co-operation with Overseas Regulators Act. The legislation contains measures which will reform and strengthen credit unions and deals with four broad areas, namely: prudential regulation; governance; restructuring, including the establishment of the credit union restructuring board called ReBo; and of course stabilisation.
During the passage of the Bill through the Houses of the Oireachtas there was extensive engagement and debate on the subject of credit union investments. Partly in response to the debate in this House, an amendment was made to the Bill to include a specific reference to credit unions investing in projects of a public nature. I recall, although I did not take it here, that I took Report Stage for the Minister for Finance in the other House and remember bringing forward the amendment myself, following the debate that occurred in this House.
The Commission on Credit Unions Implementation Group was set up to monitor progress on implementation of the recommendations. Membership of the group includes the credit union representative bodies and the Registrar of Credit Unions and it is chaired by the Department of Finance. The group reports to the Minister for Finance directly and quarterly on its progress.
As part of the implementation of the commission's report, investments in State projects for credit unions, which was raised by the Senator, was added to the agenda of the Commission on Credit Unions implementation group in the second half of 2013. That was due to the fact that when the commission was initiated this was not an issue. It was not raised as a result of the recommendations and only came about as a result of the debate in both Houses of the Oireachtas, and correctly as a result of that debate.
The Department of Finance invited credit union representative bodies to bring forward proposals for credit union investments in State projects. Proposals were received from the Irish League of Credit Unions and the Credit Union Development Association. The Department of Finance facilitated engagement between the Irish League of Credit Unions, the Credit Union Development Association, the Central Bank and the NTMA to see if the suggestion of a specific credit union bond could be progressed.
A number of issues were raised regarding the possibility of a credit union bond. They were as follows: that a bond would not be liquid, as credit unions would only be able to sell to other credit unions and, therefore, there would be a very limited market for disposals; it would not be optimal for the NTMA to structure bonds for separate areas of Government policy, for example housing and schools, rather than funding more generally because when we go to the market we go for a specific amount of money which we then use for specific purposes as against for purposes by themselves; and any proposal for a bond which would be callable before maturity date and would affect the total return on the bond with the yield reducing accordingly. A number of alternative approaches were explored as follows: investing in sovereign bonds for a long-term investments of say ten years; and using short-term products, for example Exchequer notes or similar, for short-term investment. These may have a very low rate of return but are callable at any time.
On foot of the NTMA engagement, credit union representative bodies were asked to reflect on the issues raised regarding a credit union bond. They have been invited to consider the next steps, including an alternative proposal under which credit unions could invest in State projects. Any such proposals would need to be approved by the Registrar of Credit Unions. In 2006 the Registrar of Credit Unions issued a guidance note on investment limits for credit unions investing in Irish and EMU State Securities as follows: maturity date shall not exceed ten years; not be more than 30% of holding shall be held in bonds maturing after seven years; and holding shall not exceed 70% of the total value of the credit union's investment portfolio. Most of the proposals would meet the criteria in these cases. Any proposals, therefore, will have to be in line with this guidance and considered in the context of the tiered regulatory approach.
The Commission on Credit Unions made recommendations for a tiered regulatory approach which could see some credit unions take on a more sophisticated business model with increased regulatory requirements. The Central Bank is proposing a two category approach to the introduction of a tiered regulatory approach for the credit union sector.
Under the proposals currently being considered category 1 credit unions would be limited to basic investments and Government bonds within specified limits. Credit unions that are capable of, and wish to undertake a wider range of activities and services, could apply to become a category 2 credit union. This category would allow for a wider range of investments with longer maturities and in Government bonds, along with the ability to offer certain additional services. Category 2 credit unions will be subject to additional regulatory requirements, as one would expect, given the fact that the risk would be higher.
The Central Bank held an informal consultation process with all credit union stakeholders on their proposal for a tiered regulatory approach. Consultation Paper CP76 was published on the Central Bank's website on 23 December 2013 and closing date for receipt of submissions was the end of March 2014. A further consultation and regulatory impact assessment is to follow later this year.
I wish to assure the Senator that both the Minister and his officials in the Department of Finance will continue to work with the representative bodies to explore and find alternative ways for credit unions to invest in State projects. I look forward to hearing from them in respect of alternative proposals that they may have on the matter.
Finally, I thank the House for giving me an opportunity to discuss this important issue and allowing me to put on record the work that has taken place behind the scenes with credit unions. This issue has not been left in abeyance. On the contrary, a lot of work has already occurred, as I think Senators will see from my remarks here this evening. We now have a broad proposal to make about two tiers of credit unions which could pitch for investments. What is required now is a wider engagement to see if we can tease out those issues through the various different bodies.

Brian Hayes (Dublin South West, Fine Gael)
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Lots of things have happened. The legislation has only gone through a while ago. As I said in my speech, we have already had two very substantial consultations and we have now reached broad agreement about the tiered approach required. There is absolute support in Government to make this a reality. The proof is the very lengthy and good discussions that we have had on the matter at all Stages in both Houses. It takes time to get a product into the field. There is absolute commitment to it from the Minister for Finance and his departmental officials because they report to him on a quarterly basis on the progress that has been made following the enactment of the legislation and the commission itself to see if we can make this happen.

I am confident that over the course of the next few months that we will get a more sophisticated and exacting proposal from the credit union sector. It could deal with the regulatory issues that have been set out by the NTMA and the Central Bank and the potential risk issue which is one of the reasons the commission first reported. I do not see this issue as something that will be left in abeyance and not followed up and reported. I think that we are going to make progress but it will take a little bit more time before the issue will be brought to fruition.

Brian Hayes (Dublin South West, Fine Gael)
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Absolutely.