Oireachtas Joint and Select Committees

Tuesday, 13 November 2012

Joint Oireachtas Committee on Environment, Culture and the Gaeltacht

Report of Pyrite Panel: Discussion with Minister for the Environment, Community and Local Government

3:30 pm

Photo of Michael McCarthyMichael McCarthy (Cork South West, Labour)
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We will now consider the report of the pyrite panel. I invite the Minister, Deputy Phil Hogan, to address the committee.

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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I welcome the opportunity to discuss the report with the committee and to provide an update to it on the progress being made on the implementation of the report's recommendations. Many homeowners affected by pyrite have been waiting for a considerable period and without success to date for a resolution. The purchase of a home is likely to be the largest investment most people make in their lives. One has a justifiable expectation that one's home will be a place of enjoyment for oneself and one's family for many years. If serious problems arise, they should be dealt with promptly and efficiently by those considered responsible, be they materials suppliers, builders, developers, guarantee companies or insurance companies. For homeowners affected by pyrite, living in their homes has not turned out to be the enjoyable experience they had hoped for. In many cases, they rightly feel let down by those parties whom they believed would provide effective solutions in the event of problems. Cognisant of the long period that many homeowners have been waiting for a solution and the lack of engagement by responsible parties in providing such solutions, I established the pyrite panel in September 2011, with the remit of exploring options for a solution to the problem of pyrite in private housing. The comprehensive report that the panel submitted to me in late June 2012 contains 24 interrelated recommendations and provides me and the stakeholders with the framework for a resolution to the pyrite problem.

I acknowledge the excellent work undertaken by the pyrite panel on producing a carefully researched and balanced report, which I understand has been generally well received. The recommendations fall into two broad categories, the first of which deals with current pyrite problems and the suggested immediate and comprehensive solutions. The second aims to ensure that the risk of similar problems will be minimised. A number of the recommendations in the report pointed to the need for constructive engagement by stakeholders in providing solutions for homeowners and to the important role of the State in driving this engagement. The panel expressed its disappointment that stakeholders had not, up to that point, engaged with homeowners in seeking a resolution to the pyrite problem. I agree with the view expressed by the panel that while the State is not responsible for the pyrite problem, it has a pivotal role in assisting and co-ordinating the provision of the necessary infrastructure that will provide the remediation of pyrite-damaged dwellings where no other option is available to homeowners.

When I published the report in July, I indicated that my preferred approach to dealing with the problem was for the stakeholders to work with me in finding solutions for affected homeowners. This included, in particular, sourcing the necessary funds to meet the cost of remediation works. However, I also made it clear at the time, and have reiterated on a number of occasions, that in the absence of buy-in from the stakeholders, I would impose a solution along the lines recommended in the report in regard to the establishment of a resolution board funded by a mandatory levy on the construction-quarrying sector and the related insurance sector.

Following the receipt of the pyrite report I met the Construction Industry Federation, the Irish Concrete Federation, HomeBond, the Irish Banking Federation and the Irish insurance Federation in early July. I outlined to them the key role I believe they should play in providing a resolution for homeowners. I encouraged them to engage with one another with a view to developing a collective response and I set a deadline, the end of September, for the submission of their proposals. All the stakeholders came back to me by the deadline with individual responses. While all of them outlined, in varying levels of detail, how they envisaged the pirate problem being resolved and, in some cases, how they might participate in a resolution process, they did not submit any definitive proposals at the time that individually or collectively would see stakeholders providing a voluntary solution for homeowners. While I was disappointed that the responses were not more positive, there were nevertheless some positive elements in the detailed responses. The offer to participation actively and engage in any structure that might be established to make progress on the pyrite issue was welcome. Conscious of the time for which homeowners have been awaiting a solution to the pirate problem, I asked my Department to finalise arrangements and terms of reference to permit the establishment of the proposed resolution board, as recommended by the pyrite panel. My preference is that all of the main stakeholders should engage with the proposed resolution board.

Building on the positive elements of the stakeholders' earlier responses and other positive soundings received, I again wrote to the organisations, on 31 October, enclosing the terms of reference for the proposed resolution board. I asked them to give further urgent consideration to their positions and to respond not later than 9 November. I have received responses from all the stakeholders. In addition, the Department met a number of the organisations over the past two weeks and further meetings are scheduled for this week. This continuing engagement is worthwhile and I would not continue with it if I believed otherwise. Everyone is now engaged for the first time with my officials with a view to achieving an agreed solution. However, if the discussions fail or prove unsuccessful in the coming days, I will proceed immediately to seek the permission of the Government to impose the levy. I intend that final decisions in regard to the proposed resolution board and its funding be made in the coming days.

I repeat I am conscious of the time that has been spent in bringing this matter to a successful and speedy conclusion. However, many homeowners have been obliged to endure living with the consequences of this problem for far too long and I am determined that there will be no unnecessary delays on my part in putting in place the structure and funding to provide for a resolution.

The focus of the pyrite debate is on providing solutions for homeowners who have no options open to them to get their homes remediated. However, it is important to acknowledge that a sizeable number of dwellings have been and continue to be remediated under various remediation processes. In a number of instances, responsible builders are directly undertaking remediation works. Moreover, remediation work is also being undertaken under structural defects insurance and other types of insurance, as well as on foot of arbitration and mediation processes. I welcome this progress and believe it is the route that should have been embraced long before now by other responsible stakeholders. In the preparation of this report, the panel consulted widely and met more than 40 groups from a broad range of backgrounds including homeowners, industry, academia, professional bodies, banks, insurance providers, local authorities and individuals who have a particular expertise in dealing with pyrite. It has also received a number of submissions from various groups, which I understand the panel also considered.

I now wish to address a number of issues in the pyrite report which have been the subject of some debate, including the perceived lack of adequate regulations on or knowledge of pyrite prior to 2007 and the number of suspected dwellings affected by pyrite, as well as the methodology recommended for the categorisation of dwellings to prioritise remediation works. The pyrite panel compared the guidance on hardcore materials in the building regulations in Ireland with those in the United Kingdom and Canada and concluded that the Irish building regulations compared favourably with those of the aforementioned two countries and that the guidance was reflective of the knowledge and experience in Ireland at that time. Some people have made the point that while the regulations may have been comparable with other jurisdictions, the lack of enforcement by building control authorities was a major contributory factor in the pyrite problem. The panel concluded that on balance, it would not have been reasonable to expect the unprecedented issue of pyrite in hardcore to be identified by building control officers during normal inspections. The extent of knowledge of pyrite in Ireland prior to 2007 has been raised by a number of people, who have suggested there was knowledge of the problem of pyrite since the 1970s, and a number of academic papers have been quoted to support this view. However, having considered the matter and consulted with various professional groups, the panel concluded there was only a limited knowledge of pyrite prior to 2007 and there was only passing reference to it in third-level engineering courses here in Ireland. Pyrite problems in Canada, which came to public attention there in the late 1990s, are often quoted as a reason there should have been awareness of the pyrite problem in Ireland. However, the Canadian problem only came to light here consequent to the manifestation of pyrite problems in Ireland. Damage to a hospital in Cardiff in the 1970s was also alluded to in discussions. However, this damage was a result of ground heaving. The natural bedrock had high concentrations of pyrite and once exposed, the pyrite began to oxidise and the associated expansion caused cracking and uplift of the hospital built thereon. In that case, the pyrite problems arose from pyrite in the bedrock itself and not in the infill, as is the case in Ireland.

The pyrite panel undertook a desktop study in conjunction with stakeholder consultation to establish facts in respect of the potential exposure to pyritic problems. The information was gathered from a number of sources including local authorities, structural guarantee providers, representatives of homeowners, private builders, construction professionals and public representatives. Moreover, it was cross-referenced to verify, as far as practicable, its validity. The estimated number of dwellings that may be affected by pyrite is significantly lower than the speculative figures in the public domain. No substantive basis of which I am aware has been put forward for the figures of 60,000 to 70,000 dwellings, which have been quoted by various sources as having been affected. The estimate of 74 estates with 12,250 ground-floor dwellings arrived at by the pyrite panel is supported by a robust methodology that has been set out clearly in the report. These figures represent the position as of March 2012 and based on the methodology used by the panel to arrive at the figures and taking account of the rate of presentation to date in Ireland, I am confident they represent a fairly good and accurate picture of potential future exposure. The figure of approximately 850 dwellings which the pyrite panel concluded are in need of immediate remediation is an indicative figure only. The panel used the information it had collected to give an estimate of the possible distribution of ground-floor dwellings across the three classifications of red, amber and green. However, it should be noted that the inclusion of a dwelling among the 850 I mentioned does not necessarily mean the dwelling has been confirmed as having reactive pyrite in the hardcore or as having pyritic heave, or both, and its inclusion will have no bearing on access to remediation.

I am aware there is some concern about the methodology recommended by the pyrite panel for the categorisation of dwellings to determine priorities for remediation works. However, I believe it would be unreasonable to expect dwellings not exhibiting damage to be remediated solely on the basis that there is pyrite in the hardcore. This position is supported in the High Court judgment of Mr. Justice Charleton in the case of James Elliott Construction Limited v.Irish Asphalt Limited, which now is under appeal to the Supreme Court. The remediation of dwellings is an expensive and disruptive process and I agree with the panel that it would be unreasonable to remediate dwellings if they are not exhibiting pyrite-related damage. However, the recommendation is made on the basis of a system being in place to repair such dwellings if and when they exhibit such damage in the future. I wish to assure affected homeowners that the waiting they have been obliged to endure for far too long is coming to an end. I have made substantial progress in recent days in respect of the financial institutions in particular and am determined that the structures and funding to provide for the remediation of pyrite-damaged dwellings will be put in place as quickly as possible.

3:40 pm

Photo of Michael McCarthyMichael McCarthy (Cork South West, Labour)
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I welcome, from the Department, Mr. Aidan O'Connor and Ms Marion Kiernan. I will lead off with two questions, the first of which is whether the Minister can envisage an estimated timeframe for a conclusion. Second, does the Minister believe the solution will be imposed by him, as opposed to being led by the sectors to which he referred?

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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Up to last week, I had expected I would be obliged to proceed immediately with the imposition of a solution - in other words, to bring forward the necessary legislation to introduce the levy on a mandatory basis. While I may still be so obliged, there has been substantial engagement by all stakeholders in recent days. We received a highly positive response and indication from the financial institutions as late as today, which leads me to believe there is now a window of opportunity - if the Construction Industry Federation, the Irish Concrete Federation, HomeBond and the insurance sector will avail of it - to deal with this problem which, through no fault of the homeowners, has been caused by the building sector. It is up to the latter to make sure they are in a position to meet the requirements for remediation of these houses. I would prefer a voluntary solution because I can set it up much more quickly through the pyrite resolution board, but if we must go down the road of forcing people to pay the necessary levy, we will do so. We will come to a conclusion, one way or the other, on this particular road in the next ten days or two weeks.

Photo of Michael McCarthyMichael McCarthy (Cork South West, Labour)
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I hope I have set a precedent by asking two clear and short questions. I will now take questions from members.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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I accept the reasoning behind that. The report has been available since June, the joint committee has held a debate on it and there was a special debate on the issue in the Dáil. While many members of course support its recommendations, I for one do not necessarily agree with the figures contained therein. Moreover, I believe the Minister must expand on the traffic light system it contains. It is only right and proper, if I am allowed to lead into the question-----

Photo of Michael McCarthyMichael McCarthy (Cork South West, Labour)
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The Deputy should ask the question so that we can move on to the other questioners.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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Will the Minister give credence to Fianna Fáil's proposals in the Statute of Limitations (Amendment) (Home Remediation-Pyrite) Bill 2012, which provide for the extension of the Statute of Limitations, thereby allowing for the remediation of those dwellings which might not yet show the effects of pyrite but which no doubt have it within their foundations, as the Minister himself noted, notwithstanding the extension of the green, amber and red system mentioned within the recommendations? Is the Minister following through on the recommendations for local authorities in respect of inspection models in the future? As for the resolution board mentioned by the Minister, what is its configuration and what are its terms of reference? How are members to be sure that what may be contained within the Minister's directions will suffice to address the issue?

Photo of Michael McCarthyMichael McCarthy (Cork South West, Labour)
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That amounts to five questions.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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I have a further question, if I may.

Photo of Michael McCarthyMichael McCarthy (Cork South West, Labour)
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One final question.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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This issue has gone on for long enough. The Minister gave a commitment-----

Photo of Michael McCarthyMichael McCarthy (Cork South West, Labour)
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Deputy, hold on a second.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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-----to the Dáil two weeks ago that he would come back within ten days.

Photo of Michael McCarthyMichael McCarthy (Cork South West, Labour)
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I understand that.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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He has extended on that, and therefore it is only right and proper-----

Photo of Michael McCarthyMichael McCarthy (Cork South West, Labour)
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Excuse me, Deputy; there are other questioners who wish to ask questions. We have gone over time because the Deputy took ten minutes in the first section of this meeting. Every other questioner was told to take the appropriate amount of time and to be fair to the other members, some of whom have been present since 2.15 p.m. I ask the Deputy just to ask the questions, as he has asked six. I am only trying to be fair to other elected members. Is that fair enough?

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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While I do not necessarily agree with that, I will conclude, in so far as I can, with one final question. The Minister stated there has been progress on the part of the financial institutions. He also stated there has not been similar progress with other stakeholders. I doubt that and I agree with the Minister, because I have received correspondence from other stakeholders seeking to meet me on this issue.

That in itself tells me that they are not prepared to enter into an agreement before discussing it with anyone else. The Minister told the Dáil that he would give them ten days to respond initially, so how long more will he give them? When will the Minister come forward with a proposal or an imposition?

3:50 pm

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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There is a meeting of the Construction Industry Federation tonight and a meeting of the Irish Concrete Federation tomorrow. They are considering proposals that I have brought to their attention today arising from my engagement with the financial institutions. The State does not have money to deal with this problem in the same way as we would have had in the good days. That is no use to the unfortunate people who are directly affected by pyrite. However, I am trying to provide the fund to do something for people for the first time. I cannot have an open-ended system or else we will not get the money from the financial institution. We have to provide the funds in some way - from the insurance, financial and construction sectors - in order to deal with this problem once and for all on behalf of the consumer.

I am telling the committee today - I thought it would be good news but maybe not for some people - that we have made progress with the financial institutions. They are now voluntarily prepared to participate in funding a scheme. The construction sector has not yet said so, but it will be considering those proposals over the next 24 hours.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Independent)
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Essentially, they were not given ten days because the report was in July. They gave the Minister the run around until we had that Dáil debate and the Minister specified-----

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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The Deputy will get no credit for what she is saying now. We are trying to solve this problem.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Independent)
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It has been specified that they were given a limit of ten days to come back. I acknowledge that it is their issue but the Minister has the power to put that levy scheme together. A stick needs to be waved at this stage because if I were in one of the 850 houses that are falling down I would want to know how the scheme will be funded, what the remediation process will be, how testing will be carried out, how the project will be managed, when the work will commence, whether a structural guarantee will be given, how multi-unit developments will be dealt with and, if fire safety and other issues are identified, how they will be dealt with. There are immediate concerns and other aspects that can be dealt with in time, although not too much time, in view of the Statute of Limitations. There is an expectation now, however, and I believe that in many cases these agencies have not stepped up to the mark. We are not in a position to force them to do so, but the Minister is. We need to know if the Minister is working on this levy scheme and if it will be front-loaded. In the event that these bodies do not step up to the mark, when will we see the machines rolling in to undertake the work? We need to deal with practicalities now because the houses will not stop disintegrating. We must stop talking and get some action on this. We are talking about days.

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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While Deputy Murphy was talking I was trying to do something about it. I am the first Minister to deal with this legacy issue in the Department and the first person to do something about it. I got to the root of the issue by bringing everybody together through the pyrite panel. Nobody had done anything about this until I became Minister. The Deputy talked about practicalities; I can impose a levy in the morning but it will take about six to eight months before it starts to accrue into any meaningful fund. I want to get a fund in place immediately to start work now. A substantial fund is required to get that under way. I want to get the people who are responsible for causing this problem for the homeowners affected to be part of the solution. I can impose a levy but I cannot legally force them to do anything like that. I have asked them to come forward voluntarily. I have made progress, which I am reporting to this committee, on providing an immediate fund and an operational plan that can do something for those affected, particularly the people who are very badly affected.

The Deputy also mentioned the testing protocol, which we will have by Christmas. It has to have the necessary oversight of the National Standards Authority of Ireland, otherwise it would not stand up in any legal process if legal action was taken in due course. We would not otherwise have the necessary people in place to sign off on the proper implementation of any remediation programme. I am doing what I can but I do not mind waiting another few days to get this right on a voluntary basis in order to make progress for those affected.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Independent)
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Is the Minister sure it will only take a few days? Can he give guarantees?

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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I am not addressing the Construction Industry Federation or the Irish Concrete Federation. I am not a member of either of those outfits; maybe Deputy Murphy is.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Independent)
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Hardly.

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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I have brought those organisations up to date on one side of the equation where I can get access to some funds, but I want them to participate in the process as well. Let us see what happens.

Photo of Dessie EllisDessie Ellis (Dublin North West, Sinn Fein)
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I thank the Minister for his comments and I know he accepts there is a real urgency involved. I hope we are putting real pressure on these organisations and that we will not have to wait two, three or four weeks. We should come to a solution as soon as possible. In all these negotiations, have we ruled out up-front Government funding? A levy will take a long time to be effective. Are the banks involved being pressed to front-load money? Is that the tactic we are employing?

I am also worried about future regulations. If we have to enact legislation, will it be retrospective? If someone presents next week with a problem that arose five years ago, will the legislation cover that? Do we have any idea how long it would take to put this legislation through? That may delay matters even further.

Have all the various industries to which the Minister referred now become engaged? Is it the case that each one of them is engaging positively at this stage? It is important for us to know that.

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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I was ready to go to Government at the appropriate time, which I indicated was ten days after the end of September. I got a call to indicate that there were possibilities of further engagement that would be worth exploring. I have put all the pressure I can on the stakeholders to ensure that will be the case. As of today, I am satisfied that one side of the equation - namely, the financial sector - is now prepared to look at putting some money up front. The levy would take time to accrue, which would not be of much help to the consumers - those directly affected - who are my foremost concern. However, the financial sector is now prepared to put some thought into how it can put some more money into the system earlier.

The levy will require legislation. One cannot impose a levy without legislation, which takes time. That is why I have asked, and have put as much pressure as I possibly can, on all the stakeholders in the financial and construction sectors to come up with a voluntary solution. There is a responsibility on, and a window of opportunity for, the Construction Industry Federation and the Irish Concrete Federation in the next 24 hours to respond to the proposals that have been put forward by the financial sector today.

Photo of Dessie EllisDessie Ellis (Dublin North West, Sinn Fein)
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As regards the time factor, will we be using emergency legislation? What way would that work?

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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I have to get approval from the Department of Finance and my Government colleagues. I can assure the Deputy, however, that I will not be wasting any time in putting a mandatory levy in place and will do so as quickly as I can.

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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In fairness, the Minister has wasted quite a bit of time already. This is not the first time we have heard the Minister say he is going to do that.

Photo of Michael McCarthyMichael McCarthy (Cork South West, Labour)
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That is not a question.

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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It is. What I heard earlier, I have heard twice before. I was patient on the two previous occasions, but now my patience is wearing thin.

Photo of Michael McCarthyMichael McCarthy (Cork South West, Labour)
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The Deputy has the indulgence of the committee to ask her questions.

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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Yes, I will. I would like to know why I should believe the Minister this time when I may have believed him the last time, although no progress seems to have been made. That is my first question.

Second, when the Minister says that the financial sector is now prepared to come in with an up-front kitty, or whatever, does that mean all the financial institutions? Can the Minister provide us with more substance on that proposal? Is the Government itself going to add to that kitty? The Minister said that a levy would require legislation.

We knew a levy would require legislation before the panel was established. Several aspects of the pyrite panel's report which were referred to in the opening statement have been disputed by others. The first one is the amber category which involves a significant number of households-----

4:00 pm

Photo of Michael McCarthyMichael McCarthy (Cork South West, Labour)
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Deputy, we are not going back over the report. The Deputy can ask questions based on the report.

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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Yes, I am. There are people whose houses are falling down and who are being denied-----

Photo of Michael McCarthyMichael McCarthy (Cork South West, Labour)
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I know that but will the Deputy ask the Minister a question? The Deputy is not a member of the committee. Instead, she has the indulgence of the committee to ask questions based on the Minister’s presentation. I said that in deference to the other speakers. The committee is already over time and we must deal with the Estimates after this meeting.

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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I know that. I am responding to the points the Minister made about the traffic light system and the amber category. As a result of the pyrite panel, we have homes which were being remediated by Premier Insurance but are not anymore because they are in the amber category. Those properties are not displaying enough proof of pyrite and are connected to timber framing. That is a negative outcome from the pyrite panel. What is the Department doing to address that?

The Minister referred to five quarries being affected but seven were mentioned by the pyrite panel. Will he elaborate on this? What is the Minister proposing to do with HomeBond? It had €25 million in the kitty prior to being covered by Allianz and becoming a proper insurance scheme. Those moneys will not be drawn upon by anything other than pyrite. What steps has the Minister taken to sequester that €25 million to be used as part of an immediate upfront fund to get the pyrite matter resolved? What is his adjudication on the property tax and whether pyrite-affected houses will be exempted? Can he give us a bit more substance with regard to the testing protocol?

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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I do not want to be as negative as Deputy Clare Daly on the prospects of doing something for home owners. She has been engaging with the pyrite panel herself and has had many opportunities to meet it to make her points. There was a positive engagement with the panel but now Deputy Clare Daly does not want to accept the outcome of its recommendations.

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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Here we are five months later-----

Photo of Michael McCarthyMichael McCarthy (Cork South West, Labour)
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The Minister, without interruption.

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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I was the first to do something about this when Deputy Clare Daly did not even make any representations to the previous Government. I inherited this particular problem and I am dealing with it. Deputy Clare Daly can make all the political comments she wishes but I am trying to solve the problems for the home owners. She claims no progress has been made; substantial progress has been made which I have just outlined. She will have to take my word on it. I know she does not have much time for my word but she needs to take it on this occasion.

The Government does not have the money to add to the funds but we are seeking to get them elsewhere through the financial sector and the stakeholders directly responsible for this problem. We are facilitating the rectification of this problem through an oversight process we will put in place for the pyrite resolution board. The number of houses affected is not 60,000, a figure that the Deputy has bandied around in the past.

I cannot confiscate the moneys from HomeBond, which the Deputy knows as well. I am involved in getting them to accept their responsibilities in this matter and to work with the Construction Industry Federation and the Irish Concrete Federation to present proposals that will help to resolve the problems for the home owners. This is another part of the equation in trying to find a final resolution for the home owners affected. The property tax is a matter for the Minister for Finance in the budget, but I am sympathetic to the point expressed by the Deputy.

Photo of Mick WallaceMick Wallace (Wexford, Independent)
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It would be great if the Minister could set up a fund in order that work could be done immediately. The affected home owners should not have to wait any longer. In case the Minister cannot set up the fund immediately, will he consider the Government accessing the money by making the stakeholders pay for it?

The Minister stated the regulations compare well with Britain and there is a bit of innocence on board here. I agree building regulations here are as good as anywhere. However, the manner in which the testing of hard-core stone was regulated was not as good. The Minister may claim knowledge about this was weak before 2007 but I was always told ignorance of the law was not an excuse. The Government has a responsibility in this regard to look after the home owner first. It must take the leading role and then access the moneys from the stakeholders.

The Minister does not see the logic, given the expense involved, of testing homes that have been proved to have pyrite. Would he consider setting up an agency that would core test homes in respect of which testing has been requested and make them pay for the remedial work, a bigger bill than testing?

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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As Deputy Wallace knows from direct experience, it is not an easy business to get people in the construction sector to agree collectively. I hope they will because they have caused the problem, not the home owners. The reputation of the industry is at stake. They have an opportunity to repair it and, more importantly, to remediate the dwellings of the unfortunate people who have been affected. There is a precedent in this with some members of the Construction Industry Federation carrying out work on houses affected by pyrite. We have existing models to see how much it will cost and how we can provide the remediation process. Perhaps Deputy Wallace could be of assistance to us in attending meetings on this matter tonight.

Photo of Mick WallaceMick Wallace (Wexford, Independent)
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I would love to talk to all involved but the chances of getting these guys to agree in the near future, however, are pretty slim. The Minister will end up having to impose it on them.

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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If I have to, I will impose it on them. I will know in the next few days if their bona fides are sound. I agree with the Deputy they have not shown it up to now. I am prepared to give it another couple of days.

The pyrite resolution board will be established in the next few days. It will be the oversight and supervisory authority on behalf of the consumer. It will deal with issues like the test. We have asked the standards authority to devise a test that will be robust in the event of any legal action taken in the future and a protocol to determine whether there is pyrite in a result.

The question of upfront money and getting on with the job as quickly as we can are the crucial points. It will take the mandatory levy some time to accrue some moneys into its fund. That is why I have made some progress with the financial institutions to provide some money for the pot to get it up and running while the levy is accruing, if we ultimately have to go down that road.

Photo of Brendan  RyanBrendan Ryan (Dublin North, Labour)
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I am not a member of the committee either but I welcome the opportunity to contribute to it. The Minister reported he has made significant progress in resolving this matter. We owe it to him to give him some space to allow him to bring it to a conclusion. However, I would urge that he not let it drag on because there are people waiting. I am pleased the pyrite resolution board will be established soon. Irrespective of the source of its funding, whether it is voluntary or through a levy, we will have to have such a board to implement it. Will the Minister be announcing the board’s membership in the next few days?

On the reference to some comfort from responsible builders and others who are progressing the matter, is the Minister aware that whereas Premier Insurance was progressing the matter and doing the remediation, it is beginning to play hardball with residents? Although its buildings have pyrite damage, the company is disputing the nature and level of the damage. I ask the Minister to engage with Premier again to see whether its position has shifted.

4:10 pm

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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I was made aware of that in recent times. I certainly will be prepared to engage with the company on that basis again to see whether its position has shifted. I can assure Deputy Ryan that we are in a position to proceed immediately with a pyrite resolution board. We have the terms of reference approved. However, I must go to Government on the matter of the mandatory level, if that is where I end up.

I assure Deputy Ryan that I will not waste any more time in waiting around for persons to make up their minds about this matter. I was asked because of those important meetings today in the construction side and I want to give them the necessary space between tonight and tomorrow to come to a resolution on these matters, which I hope they do.

Photo of Catherine MurphyCatherine Murphy (Kildare North, Independent)
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Does that mean the end of the week is the Minister's deadline?

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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Every time I make a deadline, the Deputy pulls me back and states I missed it by a couple of days. I will not give the Deputy any comfort on that.

Photo of Marcella Corcoran KennedyMarcella Corcoran Kennedy (Laois-Offaly, Fine Gael)
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I thank the Minister for bringing the report to us. It sounds as though at long last there is light at the end of the tunnel and I thank the Minister for his efforts in that regard. It has been a horrendous time for those involved. At the end of the day, it is a consumer protection issue and those who were responsible for solving this initially did not do so.

The research conducted has been extensive and it has given rise to all sorts of reasons that this occurred. What will the Minister do with that information to protect the consumer in the future? For example, deficiencies have been found in third level education, where particular geological information was not being given to students on particular courses. Will there be some sort of cross-sectoral linkage between the third level sector and, for example, the National Consumer Agency to ascertain where they could fill the gaps to ensure something like this never happens again?

My other question relates to the Buildings Regulation Advisory Board. When the board was before the committee recently, we were most concerned to discover that HomeBond held a position on it. Has the Minister considered the withdrawal of that position from HomeBond, as this committee recommended, because of HomeBond's disgraceful actions in this but also the fact the company would not come before the committee to account for itself?

Photo of Michael McCarthyMichael McCarthy (Cork South West, Labour)
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That was the question I was going to ask. A number of weeks ago the committee wrote to the Minister about a recommendation it made based on extensive discussion, that is, the reappointment of a person from HomeBond on the Buildings Regulation Advisory Board. It was the view of the committee, given the manner in which HomeBond approached the issue, specifically its absolute refusal to come before the committee, as a result of which members were quite correctly incensed, that we recommend HomeBond not be considered for reappointment to the board. HomeBond has almost added insult to injury. The Minister might consider that in the context of his reply to Deputy Corcoran Kennedy.

Photo of Phil HoganPhil Hogan (Minister, Department of Environment, Community and Local Government; Carlow-Kilkenny, Fine Gael)
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The Building Regulations Advisory Board was no more and no less than an advisory board, but the Government, on my recommendation, abolished it in recent days. The information matters that have arisen from this, from Priory Hall and other issues will form part of the solution in terms of future building regulations which I will bring to Government shortly. It is not acceptable that those who took money from consumers on the basis of a structural guarantee did not discharge their responsibilities, which is what HomeBond and Premier did. They were set up by the Construction Industry Federation to provide certainty to consumers about structural matters and they let everybody down in that regard. Professionals let people down. Unfortunately, those who were affected were the consumers. I am very much in the space of helping consumers to overcome the difficulties which were created through no fault of their own. I am pleased by the constructive approach of most members of the committee who are trying to find a resolution to this.

Photo of Michael McCarthyMichael McCarthy (Cork South West, Labour)
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I have here a piece of pyrite-affected stone. When one sees its colour, one would ask oneself how it ever left a quarry. Given the misery inflicted, it is beyond belief how quality control analysts ever allowed it to travel beyond the quarries.

I acknowledge the work the Minister, Deputy Hogan, has done in setting up that panel, producing this report and making progress. For some, the progress should have been made yesterday. Given the nature of it and the task ahead, his is quite an achievement. It deserves no less of us to recognise that. I thank the Minister and his two officials for their attendance.

I propose we suspend the sitting for five minutes to allow for the next instalment of the Estimates review.

Sitting suspended at 4.25 p.m. and resumed at 4.35 p.m.