Mr. Pat Glennon:

Representatives of the Irish Timber Council have appeared before the committee previously with regard to the sale of Coillte forest assets. We represent the lion's share of the sawmilling sector on the island of Ireland. Approximately 95% of all the sawlogs in Ireland would be processed by our members.

I thank the committee for giving me the opportunity to address the committee on matters of such fundamental importance to Ireland's sawmilling sector. We have provided the committee with three separate but distinct submissions. What they all have in common is a plea for certainty about the future of our sector. In the absence of Government decisions, the forest and forest products sectors are operating in a total policy vacuum. As a consequence people are afraid to invest, jobs are at risk and there is no sense of a collaborative approach across the sector. A cloud of uncertainty hangs over one of the country's most promising indigenous sectors, one that has huge untapped potential.

Coillte has been the subject of internal and external reviews for the best part of four years. It is no wonder that, in the absence of a clear mandate, it is in a state of limbo. The proposed sale of its harvesting rights destabilised the timber processing sector for the best part of a year, due to continuing uncertainty about the Government's decision. Once the Government's decision on harvesting rights was announced, a merger of Coillte and Bord na Móna was mooted. More uncertainty has resulted as the Government has yet to pronounce on the recommendations of the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, and the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, nor has the long-awaited report of the forest policy review group been published.

The Irish Timber Council, ITC, finds it quite extraordinary that decisions are being taken behind closed doors with little or no regard to the views of the industry's stakeholders. For example, the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, will not meet with us on the proposed merger until after the Government's decision. The Minister for Agriculture, Food and the Marine, Deputy Coveney, has to date not accepted our repeated requests for a meeting to discuss the many issues facing the sawmill sector. The forest and forest products sectors and, indeed, individual companies have important views to communicate as interested parties regarding the proposed merger of Coillte and Bord na Móna, among other matters. We are especially appreciative of being given the opportunity of appearing before the committee today.

I will not go through the detail of our submissions as I and my colleagues can discuss any of the issues during the question and answer session and, indeed, on a one-to-one basis. However, I will highlight the main points of each submission and where we in the ITC believe the committee can assist us. Our views on the proposed merger of Coillte and Bord na Móna are, in summary, as follows. We believe Coillte should progressively divest itself of all non-core activities and assets, especially its board mills, and concentrate instead on delivering an aggressive afforestation programme as a national strategic priority. We want a strong, resourceful and well-managed Coillte to remain as a stand-alone State forest company with a clear commercial mandate to supply the timber processing sector with a sustainable supply of sawlog on the open market at transparent prices. We also believe there is no commercial justification for a public entity to engage in harvesting and associated haulage activity. Sawmills should be allowed to harvest and transport what they purchase from Coillte. On the other hand, Coillte will have a crucial and central role to play in the delivery of many of the recommendations set out in the draft report of the forest policy review group. The Government as a matter of top priority must give Coillte a clear mandate and redefine its remit in the context of the decisions taken in respect of the forest policy review group.

Should the Government approve a full or partial merger, we wish to see the evidence that justifies such a radical departure.

In particular, we want sight of the evidence on which the decision is based.

We have identified significant potential problems. For example, conflicts of interest as regards the supply of wood biomass to Bord na Móna’s bio-energy plants and the impact that a restricted supply of sawlog could have on prices. I hope the Government will publish the cost benefit analysis and regulatory impact assessment that forms the basis of the memorandum for Government. We also expect the Government to confirm that the sale of harvesting rights is off the table once and for all.

The extensive stakeholder consultations that have informed the preparation of the report of the forest policy review group all share a common theme - Ireland has the capacity to grow its forest and forest products sector. We all want additional afforestation. The ITC believes the proposed target of 15,000 hectares is not enough and there is sufficient land available to sustain much higher afforestation levels.

We also need to restore a level of trust in the sector. Coillte needs to realise that the current opaque practices of price determination must stop. We need transparency in the pricing of sawlog and pulpwood supplies that are our critical raw material.

The State’s forest company must above all else support its key customers for the common good and not work against their interests. A crucial issue for us is a clear policy statement that the use and diversion of Coillte’s wood biomass for bio-energy plants must not be at the expense of the security of supply for the sawmill sector. We also believe that an assessment needs to be carried out on the feasibility of establishing an independent regulator for the sector. In addition, the report should at least acknowledge the EU’s forest strategy and explain how Ireland’s proposed strategy fits with what is considered best practice at European level.

Once the report is published, and to give it credibility, I hope that the Minister will provide a detailed implementation plan with a clear allocation of responsibilities and budgets. A strategy document without a well resourced implementation plan is practically worthless. The Irish Timber Council wants to play a full part in securing the rapid delivery of the report of the forest policy review group and expects to have representation on the proposed forest council and all of the relevant sub-committees.

In the middle of all this uncertainty sits the Forestry Bill. Members of the committee have made significant statements about the Bill during the Second Stage debate. The ITC’s submission on the Bill was well received by the officials at the Department of Agriculture, Food and the Marine with whom we had an opportunity to meet a while back. We hope that the Minister will take on board the very many amendments that we have proposed. In particular, it needs to be better aligned to the decisions that will be taken in the context of the report of the forest policy review group. It needs to reflect whatever decision Government takes about Coillte. It also needs to take into account many important protections and safeguards that are provided in similar legislation enacted in other jurisdictions. Perhaps it major weakness is the absence of a regulatory impact assessment. As Deputies and Senators will be aware, Cabinet guidelines dating from 2006 require all Ministers to carry out a detailed study of the impacts of all proposed legislation and the administrative burdens that will be imposed on business.

I shall finish my contribution on a positive note. The Government wants companies to recruit and export more. The sawmill sector is willing and able to expand its output and has the track record to prove that we have done so. The Government attaches the highest importance to maintaining jobs in rural Ireland and the sawmill sector is one of the few indigenous sector capable of sustaining local employment. The sawmill section has the track record to prove it also. The Government wants a sustainable, competitive and modern forest and forest products sector. Again, the sawmill sector has a proven record to show that it has delivered on same. Provided that the right decisions are taken over the coming weeks, the sawmill sector for one is eager to engage with all of the stakeholders on what should be a clear and ambitious growth strategy for our businesses.

Finally, let there be no doubt that the two most important issues facing the sector at present are the proposed merger of Coillte and Bord na Móna and the log supply, both of which are inextricably linked. I thank members for their attention.