Mr. Oliver Gilvarry:

I thank the committee for the invitation to assist it in carrying out the important process of pre-Committee Stage scrutiny of the Illegal Israeli Settlements Divestment Bill 2023. I will outline the current state of play in terms of actions taken in respect of this Private Members' Bill. I will also use the time to outline the legal and operational issues that arise in respect of the Bill as currently drafted.

I want to make clear that the Minister for Finance understands the motivation and intentions behind the Bill. During the Dáil Second Stage debate on 16 May 2023, he outlined a number of actions he was going to take.

These included writing to the CEO of the NTMA and the Chair of the Joint Oireachtas Committee on Foreign Affairs and Defence. As might be expected there has been internal consideration of the issues raised by the Bill within the Department and there has also been continuing engagement on the issue between the Department and the NTMA. There has also been engagement at official level with the Departments of Foreign Affairs and Enterprise Trade and Employment on the possible wider implications of the Bill. Advices were also sought and received from the Attorney General on the legal status of the Private Members' Bill. Officials participated in a closed session with the foreign affairs committee on 24 October last, including those Deputies involved with progressing the Bill. Following that, the committee prepared and submitted its report in January of this year. That report highlights that there was a range of views on the merits of placing the UN list on a legislative footing and there was no consensus on the best approach to advance the intention of the Bill. The report recommended further scrutiny by this committee and that further legal analysis be carried out prior to Committee Stage. I also note the future Ireland and infrastructure, climate and nature fund Bill has been approved by Cabinet today. It contains important environmental, social and governance provisions, which are relevant to this issue and similar issues going forward. In the pre-legislative scrutiny of that Bill, the NTMA’s investment in companies on the UN list was raised as an issue to be addressed.

All of these steps, including today’s pre-Committee Stage scrutiny engagement are helpful in informing the Minister, and ultimately the Government, on an approach to most effectively addressing the issues raised by this Bill. A number of issues were articulated in respect of the Bill during the Second Stage debate in the Dáil. These included that the UN list is not comprehensive and individual companies which are not on the list could continue to receive investment from ISIF even if they are active in the illegal Israeli settlements in the occupied Palestinian territories; the use of such a list is not appropriate in primary law since it does not respond quickly to changing circumstances; due to the structure and the inflexible nature of the list legal advice would be needed from Office of the Attorney General on the use of this or other lists. There were also issues to be addressed in respect of the type of financial instruments mentioned in the Bill, which would need clarification. There has been follow up on these issues, in particular with relevant legal advice being obtained, and the following points are pertinent in terms of analysis of the Bill.

The precise status of the UN database within the UN legal order is uncertain and it does not appear that the database was intended to have a particular legal status. It instead appears that the list can be seen as a non-binding instrument for the guidance of contracting states as the UN has not recommended its adoption. The State has a duty to ensure that constitutional rights are adequately protected, and it does not appear that placing unconditional reliance on the UN list can adequately protect entities affected, or insulate the State from legal challenge. The adoption of the full UN list in domestic legislation would make us an international outlier. To our knowledge no other State has adopted this list into primary law. The Bill would need to be amended so that the reference list to which investment exclusions are made is a list developed by the State. The cross reference to the UN list which is included in the Private Members' Bill would be insufficient. The State would have to develop its own investment and divestment list based on its own analysis. To ensure the framework proposed by the Bill operates with robust procedural safeguards would result in operational and resourcing implications for the Department of Finance and the NTMA, including ongoing engagement with firms included within the investment prohibition, and requiring a mechanism be provided so the affected firms can request their de-listing where appropriate. It also appears that amendments will be required to ensure the Bill is compatible with EU law, and other changes may also be required in the event they arise as part of the legislative drafting process. In our view, these amendments would be required to ensure the Bill could be operationalised and would be, as far as possible, constitutionally robust and protective of the constitutional rights involved. I also note that a second iteration of the list was published by the UN in June of last year, with some firms removed from the list, but it is unclear when and with what frequency the list will be updated in the future. I would welcome the committee’s views on these and other matters and I am open to any questions.