Mr. Paschal Hayes:

As members know, the European Commission, DG MARE, has launched a public consultation on its draft new guidelines for the examination of state aid to the fishery and aquaculture sector. The consultation runs until 20 January 2015. The objective of the consultation is to collect stakeholder views on the draft guidelines. The Commission has previously sought member states' views on state aid earlier this autumn through its advisory committee, on which the Department of Agriculture, Food and Marine was represented.
The new guidelines are intended to replace the present guidelines of the same title, which have been in force since 2007. Under the treaties, the Commission is responsible for considering state aid notifications and, as such, the Commission will make the final decision on the wording of these guidelines and on how they will perform that task. The new guidelines will set out the principles that the Commission will apply when assessing whether proposed aid to the fishery and aquaculture sector can be considered to be compatible with the internal market. The guidelines apply to all state aid granted by member states to the fishery and aquaculture sector that has been notified, or should have been notified, to the Commission in accordance with the treaties. The Commission is moving to update the current guidelines in order to regularise references to legal acts mentioned in the guidelines, thereby aligning them with the Commission's state aid modernisation initiative, the reformed Common Fisheries Policy and the European Maritime and Fisheries Fund regulation.
State aid rules for the fisheries and aquaculture sector differ from the rules applying generally to other areas of the food industry. The Commission's proposed new guidelines should be viewed as part of a broader legal framework for state aid to the fisheries and aquaculture sector. That broader legal framework includes four elements: the European Maritime and Fisheries Fund regulation; the de minimisregulation for the fisheries and aquaculture sector; the fisheries block exemption regulation; and these guidelines for the examination of state aid to the fishery and aquaculture sector. It is important to note that these are essentially a form of cascade where a proposed support measures for the seafood sector will generally only be notified to the Commission through a state aid notification if it is not possible legally to implement that measure through one of the other three options.By way of example, during the last EU funding round from 2007 to the present, it has not been necessary to submit a state aid notification to the Commission for any of the many schemes implemented in Ireland to support the development of the seafood sector. The guidelines come into play only when it is necessary to submit a state aid notification.
I will very briefly explain the nature of each of the four instruments. The European Maritime and Fisheries Fund, EMFF, regulation is undoubtedly the most important. The EMFF is one of the four European structural and investment funds together with the European Regional Development Fund, the European Social Fund and the European Agricultural Fund for Rural Development. Together, these European Structural and Investment Funds are intended to support measures to address the EU 2020 strategy. The EMFF is intended in particular to support the new Common Fisheries Policy, CFP, and is considered the financial instrument of the CFP.
The EMFF is solely concerned with measures that are co-funded by the EU. It does not have anything to say about measures funded solely by the Irish Exchequer. The majority of measures implemented through the EMFF do not require state aid notification. They are considered to automatically comply with state aid rules. There are two exceptions which are not covered by this exemption: support to fishery local action groups and supports under the Integrated Maritime Policy both of which are provided for in the EMFF regulation. These two measures are excluded from the state aid notification exemption that generally applies to EMFF measures as they are outside the CFP. However, they may potentially be covered by non-fisheries block exemptions. That remains to be examined but in any case those measures are also outside the scope of these guidelines, again for the same reason they are not covered by the CFP.
The Minister is preparing a new seafood development programme, SDP, for the period 2014 to 2020 to implement investment in the seafood sector with co-funding from the EMFF. The committee will have seen previous announcements from the Minister as part of budget 2015 announcing that the new SDP will have total funds of €241 million, of which €146.7 million is from EU funds and €93.9 million is from the Irish Exchequer. The new SDP will include a range of investment measures to encourage and foster the further sustainable development and growth of our seafood industry, including aquaculture, processing, the fishing fleet and coastal communities. Some €142 million of the SDP funds will go towards this core sectoral development purpose, which is more than twice the €66 million available under the previous programme, which was the European Fisheries Fund. The SDP will also directly fund €46 million in new investments to support our capacity to enforce the rules of the CFP and a further €41 million to fund the science that supports our fisheries management together with €11 million for implementation of the new EU Integrated Maritime Policy and €1.3 million for storage aid supports. The Government has made available €15 million in 2015 to commence investment measures under the new SDP and this will rise significantly in following years as the programme is fully rolled out.
The second measure is the de minimisregulation. A new de minimisregulation for the seafood sector was adopted by the Commission in June 2014. The so-called fisheries de minimisregulation is concerned solely with measures funded by the Exchequer. Measures implemented through de minimisare not considered state aid. The fisheries de minimisregulation provides wide scope to member states to provide nationally funded supports to enterprises in the seafood sector up to a maximum of €30,000 per beneficiary and up to €20.8 million nationally over a rolling three-year period and subject to certain exclusions specified in the regulation. While the €30,000 cap restricts its usefulness somewhat, it is a very useful instrument for smaller interventions that are not permitted under instruments such as the EMFF or the fisheries block exemption regulation.
BIM implements its fleet safety grants through de minimisas these are not eligible under the EMFF or its predecessor, the European Fisheries Fund, nor under the block exemption. BIM also implemented the pot replacement scheme earlier this year through de minimis, while Enterprise Ireland uses it to implement its marketing assistance programme for seafood companies. A separate general de minimisregulation applies to the food sector generally, excluding seafood, and this has a significantly higher cap of €200,000 per beneficiary. The significant difference in the cap applying to food companies in different sectors has been highlighted by Enterprise Ireland and Bord Bia as a difficulty. However, the Commission is not open to increases in the cap on the fisheries de minimis.
The third regulation is the fisheries block exemption regulation. The fisheries block exemption regulation or so-called FIBER is concerned solely with measures funded by the Exchequer.

Like the guidelines at present and the fisheries de minimisregulation earlier this year, the fisheries block exemption regulation, FIBER, is being revised by the Commission and the new instrument is expected to be adopted before the end of 2014. The new FIBER closely mirrors the European maritime and fisheries fund, EMFF, regulation. It allows member states to provide supports to the seafood sector based on the measures included in the EMFF and subject to the rules specified in the EMFF, without EU co-funding. This is useful where a member state wishes to implement particular EMFF measures, but has insufficient EU co-funding to cover all of the measures it may wish to implement. Measures implemented through FIBER generally do not require state aid notification. I say generally because there is an exception where aid exceeds €1 million to an individual beneficiary.
In a departure from the previous FIBER, the draft new FIBER allows block exemption of measures to assist the seafood sector with the impacts of natural disasters. The draft regulation defines "natural disaster", inter alia, as floods, tornadoes and hurricanes. The Commission’s definition is taken from the existing EU legal definition of natural disasters, so while it is a useful addition, it is questionable whether it would have applied to the storm events we experienced earlier this year.However, the draft FIBER mirrors the EMFF provision which allows for a state contribution to a mutual fund for adverse climatic events. That provision is broad in nature and would cover similar storm events as we experienced this year.
Fourth, I will deal with the guidelines for the examination of state aid to the fishery and the aquaculture sector. It is when a proposed measure is not covered by the other three instruments that a state aid notification is required. Only in that situation do we need to have regard to the new proposed Commission guidelines in designing a proposed new scheme and in drafting the state aid notification for it. The guidelines set out the principles by which the Commission will assess such state aid notifications. While the guidelines are quite detailed, they can be summarised as setting out certain principles that are common to all economic sectors and additional principles that are specific to the seafood sector. The general principles common to all sectors include: contribution to a well-defined objective of common interest; need for state intervention; appropriateness of the aid measure; incentive effect; proportionality of the aid; avoidance of undue negative effects on competition and trade between member states; and transparency of the aid. The additional principles specific to the seafood sector relate to the Common Fisheries Policy and the EMFF. These include: exclusion of operators who have infringed CFP rules, a similar rule exists in the EMFF regulation; a Commission delegated act will specify the waiting periods appropriate to particular types of infringements; a requirement to repay aid if an infringement of the Common Fisheries Policy rules happens after payment of aid; any aid measure similar to one described in the EMFF regulation must comply with the rules applying under the EMFF; measures ineligible under the EMFF regulation will not be permitted; and a proposed aid measure must identify how exactly it will contribute to the general and specific objectives of the Common Fisheries Policy.
Aside from these principles, which are the core of the guidelines document, the remaining notable element of the proposed new guidelines is the specific recognition they give to natural disasters, to so-called "exceptional occurrences" and to so-called "adverse climatic events". Natural disasters or exceptional occurrences must have been formally recognised as such by the member state. Natural disasters are defined somewhat to include exceptionally severe storms and floods, tornadoes and hurricanes among other things. Exceptional occurrences are defined somewhat to include war, internal disturbances, strikes, major industrial and nuclear accidents, and fires resulting in widespread loss. A very widespread outbreak of a new animal disease may be accepted by the Commission as an exceptional occurrence. Aid related to these natural disasters or exceptional occurrences must relate to the costs of the damage incurred to assets or loss of income arising from destruction of production or means of production. Separately, the guidelines indicate that the Commission may accept as compatible with the treaties aid to make good the damage caused by "adverse climatic events". This separate classification is somewhat defined as including storms, gusts of wind causing exceptionally high waves, heavy and persistent rainfall, floods, and elevated water temperatures over a long period. The bar is set higher in relation to these types of events in terms of eligible costs. The damage caused must amount to more than 30% of the average annual turnover of the operator concerned in the preceding three years. These provisions appear to be useful, particularlythose relating to adverse climatic events. Given our experiences earlier this year with a series of exceptionally severe storms, we may potentially need to make use of them in the future.
With regard to the next steps, the Commission proposes to apply the new guidelines from 1 April 2015. The Commission will be requesting that each member state adapt its existing aid schemes to these guidelines by 30 September 2015 and to give its agreement to this adaptation process within two months of the publication of these guidelines. At present we cannot foresee any difficulty with giving such an agreement, or in adapting our schemes to the guidelines. All existing measures are covered by either the European fisheries fund regulation, the fisheries de minimisregulation or the FIBER. The EMFF, de minimisand FIBER regulations provide sufficient scope for foreseen future measures, with the exception of the measures concerning fisheries local action groups, FLAGs, and the integrated maritime policy, IMP, to which I alluded earlier. We will be examining the state aid situations of measures relating to the FLAGs and the IMP in the coming months with regard to other non-fisheries block exemptions and, if necessary, we will submit a state aid notification. We do not foresee those measures having any difficulty in securing Commission state aid approval, given that they are provided for in the EMFF regulation and will likely be implemented in all member states.