Michelle Mulherin (Fine Gael) | Oireachtas source

I welcome the witnesses. This is before us because we have received complaints about the partnership agreements Coillte has entered into post-1990. We have had a flavour of these exposed in the media, through the cases brought forward by the IFA and also individuals who have contacted myself and other members of the committee. Generally speaking, the issue is financial transparency and how the moneys to which people are entitled and actually receive are calculated, but there is also an issue of fairness in the terms and conditions of these contracts. Other complaints relate to the management or suggested mismanagement in places of the actual forestry itself. For example, I spoke to a man earlier today who complained that where trees overhang public roads or private roads over which there are rights of way to commonage, for example, Coillte refuses to cut them back. I understand in some cases that to take out thinned wood, Coillte employs contractors to enter the land who drive over fencing and so on and leave it, in the absence of fencing, first, insecure, and, second, to pose a danger to animals, including sheep and dogs, as well as to walkers. Often, these contractors enter the farmer’s land without any notice and there is no restoration or making good of any damage to the land when this is done. Another issue which I ask the witnesses to clarify is the suggestion that Coillte does not pay towards the installation, maintenance and upkeep of roads and that either the farmers or State grants have been obtained to provide them. Obviously, Coillte is bringing heavy machinery onto roads which are not reinstated to clear fell or thin out the forests. These are just some of the complaints.

While Mr. Murphy set out some global figures and provided the committee with case studies, I have details here of a 1994 partnership contract and one wonders why, on the face of it, any farmer who knew what he or she was doing would ever sign it. Under the contract, the farmer obtains a grant to buy, plant and maintain the trees for the four years to establish a forestry and signs the benefit of the grant over the Coillte. Up front, Coillte has no capital outlay on this asset. The farmer gets a premium for 20 years which comes from EU-Government funding and is not payable by Coillte. There is an annual payment, which I am told is called a "life pay", over the lifetime of the crop until it is clearfelled. Notwithstanding that, in this particular case the farmer gets no revenue from thinnings and on clear fell gets just 1% of the net profits. As has been mentioned, this farmer, as appears to be common case among landowners, will have to bear the entire cost of replanting to establish a new plantation after clearfelling. That is estimated at €3,000 per acre.Coillte is in a position to decide unilaterally when to clear fell and when to thin and there is no consultation with farmers. The witnesses may not have heard the IFA witnesses earlier, but it was clear that there are commercial concerns about Coillte’s methodology. If it thins or clearfells when wood is cheaper, that will impact on the price the farmer will get. I appreciate that Coillte has different types of contracts, but there is an impact there and Coillte is the ultimate beneficiaries of this raw material in the forestry itself.

That is a summary of the complaints. This particular farmer regrets very much getting into this at all and it seems there are a number of farmers in the same position. This is a lot more than just a failure to communicate or to be transparent. The bottom line is that on the face of it this looks like a very lop-sided partnership. It is not a partnership, which, as I stated earlier, is a misnomer. It appears to be a case of very hard-nosed commercial activity on the part of Coillte. I do not know what advice farmers got but this is the situation in which they find themselves now.

To shed light on some of the issues, would Coillte be prepared to bring material before the committee? We are told there are 630 contracts. In its presentation, Coillte said that only seven partners had expressed a signficant dissatisfaction. By the same token, I understand from what the witnesses have said today that the only thing people have been told is that there is a helpline. Coillte has not specifically reviewed things or written to those 630 farmers or landowners to ascertain what concerns there are or to enter into a dialogue with them. If it has, that has not been said to the comittee. Coillte has also pointed out that at this juncture 80% are still in a phase of drawing their grant premia. It may be that this problem is arising now because a lot of people are at the end of the life of the forest which is ready to be felled and farmers are wondering about money.

I understand that this problem is now arising for people because many forests are at the end of their lifetimes. The trees are ready to be felled and farmers are wondering about money. They have probably been doing so previously as well. The problem is being compounded by poor communication. Would the witnesses be prepared to give the committee the number of contracts involved on a county-by-county basis? I presume that we are not talking about partnership agreements in all cases, which are obviously legal contracts of a certain nature. Could the witnesses set out the different contracts that have been entered into with landowners in respect of the use of their land in this fashion?

Reference was made to the complications relating to probate in the case of the death of the person who originally entered into the contract with Coillte. The successor is not privy to that contract. In some cases, a contract does not seem to be available for the next of kin or the successor to see. I understand that difficulties may have been experienced by some landowners or successors in getting copies of contracts. Can the witnesses confirm that this will not be a problem, that there will be transparency and that the contracts will be furnished to whoever is going through the probate process in respect of an estate?

We have been told that there were seven original agreements, which morphed into approximately 35 variations. Have there been any addendums made to agreements afterwards in respect of which people have raised issues? Have there been cases in which an initial agreement was drawn up, problems arose and further or supplementary agreements were made?

The witnesses also stated that Coillte is prepared to consider people buying themselves or getting out of partnership agreements on commercial terms. How many landowners have been released from the terms of their partnership agreements? Has anybody actually been released and, to whatever extent the witnesses can tell me, on what terms?

On transparency in respect of money, it has been said that some people are having money put into their bank accounts yet they do not know the breakdown of it or if they are getting a fair amount. Coillte has retained KPMG, which may sign off and say that this is correct. Is the farmer or landowner going to get a chance to see the supporting documents that KPMG will have sight of, in order to try to ascertain for himself or herself that he or she is getting a fair price? Will that information be forthcoming or are we just going to get a few lines from KPMG to say that everything is fine and has been done in accordance with the terms of people's contracts?

In respect of Coillte's annual reports and accounts, to what extent can the profit or loss attributable to partnership agreements be gleaned from these documents? If I view Coillte's accounts, can I see where these partnership agreements are dealt with and where their profitability or otherwise is referred to? The witnesses provided some figures regarding payments out. Is there a place where I can see what profit and loss is attributable to each agreement on an annual basis?

While the witnesses said that people had the opportunity to avail of legal advice, it would seem that many of these contracts were entered into when it was not very prudent to do so on the part of the farmers. Indeed, it seems that if they pressed it, they could have got a better deal from Coillte. The fact that there have been variations to the contracts suggests that some people did and perhaps got a better deal. I am just making an assumption there. As I highlighted earlier, elderly farmers on a particular type of contract are in some cases getting 1% of clearfell profit. They are being asked to re-establish crops at a cost of €3,000 per hectare at their own expense, with no grant aid available. In some cases, as we have been told by the IFA today, people did not even realise they had to replant their forests. Do the witnesses from Coillte think that is fair? In effect, it is win-win for Coillte and no-win for farmers.

Another issue I mentioned earlier is the clause in the contract that allows Coillte to unilaterally clearfell when it feels it can do so, up to a period of 40 years. The other partner - I use that term loosely - really has no input. It has been suggested that this is an unfair term of contract and that it is unenforceable. I can guess what the witnesses' response will be but I am putting the point to them nonetheless.

I mentioned complaints earlier in respect of management and contractors going in and land, fencing and roads not being reinstated. Apparently, as I understand it, these are not express terms in most of the contracts. Would the witnesses accept that it should be an implied term and that these matters should be the responsibility of Coillte in the course of proper management of forestry? Would they agree that Coillte should be obliged in this manner? Perhaps they can clarify the situation in respect of the 630 contracts, given that they are aware of what is in them and we are not.

What I got from Coillte's presentation is that it is speaking to the issue of poor communication. It puts its hands up to that and maybe some transparency. I would like the witnesses to speak further to the issue of unfair terms of contract and the vulnerability of many of these farmers. Many of them are older now. Coillte is in a position to trade on and use as good currency the fact that it is a State company. It immediately endears itself to farmers for this reason, yet we have these complaints coming from people. It may not be the biggest number considering the number of farmers who are engaged in forestry. However, for a vulnerable elderly person, it is a difficult situation to be in. They are left in the dark and are wondering about when they are going to get money. A large number of them made this investment in the hope that they would have a nest egg or some income to mind themselves in old age and, perhaps, to look after bills, including those relating to funerals, when they are gone. That does not seem to have turned out to be the case for them. Despite the statement "We entered into commercial contracts", many contracts have been modified. That clearly means that the original contracts left something - or a lot - to be desired as regards landowners.

I hope the witnesses have had an opportunity to take down my questions, of which there were many. I have a note of them if anyone needs refreshing as we go along.