John Lahart (Dublin South West, Fianna Fail)
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I advise members of the constitutional requirements that they must be physically present within the confines of the Leinster House complex in order to participate in public meetings. I will not permit a member to participate where he or she is not adhering to this constitutional requirement. In this regard, I ask any member participating via MS Teams to confirm that he or she is on the grounds of the Leinster House campus.

Members and witnesses are also reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity either by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory regarding an identifiable person or entity, they will be directed to discontinue their remarks and it is imperative that they comply with any such direction. As the witnesses will probably be aware, the committee will publish the opening statement on its website following the meeting.

I welcome our witness today for pre-legislative scrutiny of the Israeli settlements in the occupied Palestinian territory (prohibition of importation of goods) Bill 2025. As in yesterday's meeting, I am happy to hear the Bill referred to as simply "the Bill". With us today from IBEC, we have Mr. Fergal O'Brien, executive director, lobbying and influence. The format of the meeting is that we will hear his opening statement, followed by a question-and-answer session with members of the committee. I ask members to be concise in their questions in order to allow all members the opportunity to participate. Members have seven minutes each. We will probably have time for a second round, but those seven minutes include the time for answers as well. I ask Mr. O'Brien to keep an eye on the clock to allow members a bit of time. I also ask members to keep an eye on the clock in case they have a follow-up question, which Mr. O'Brien will need sufficient time to answer.

I welcome Mr. O'Brien. We look forward to hearing from him on this important legislation. I invite him to make his opening statement.

Mr. Fergal O'Brien:

I thank the committee for its letter inviting comments from IBEC on this Bill. We wish to provide some economic and business perspectives on its likely impact. We recognise, however, that these are only one aspect of what the committee and the Oireachtas need to consider in their pre-legislative scrutiny process.

First, I will talk about what we see as the direct business and economic impacts of the Bill. In the engagement with our members on this Bill, they report limited impacts on their supply chains or direct trading relationships. As of May 2023, EU importers of any products from Israel must declare a new code on import declarations to benefit from preferential tariffs and quotas under the EU-Israel association agreement.

This code indicates proof of origin, and products are therefore required by EU law to be clearly identifiable as originating from the postcode locations known as the occupied territories and thus covered by this Bill. EU imports from the occupied territories are currently not covered by the EU-Israel association agreement and, therefore, do not receive the preferential tariff treatment provided by that agreement. IBEC members have indicated to us that Irish customs authorities should, therefore, be readily able to identify and prevent import of any products or goods originating from these postcode areas.

Our members have also reported to us that the level of goods trade between the occupied territories and Ireland is miniscule. Official trade data produced by the Central Statistics Office based on customs declarations shows that in 2024, only €214,000 of goods were imported from the occupied territories. Total imports over the course of the past five years stand at only €685,000. Data from the European statistics agency Eurostat shows that Ireland accounted for around 0.5% of EU imports from the territories last year.

I am now going to comment on what we see as some of the indirect impacts of the Bill. IBEC supports the Government view that rather than Ireland advancing legislative measures with regard to the occupied territories in isolation, measures impacting trade and international economic relations should be developed as a collective EU response. We recently supported the EU economic sanctions against Russia following the invasion of Ukraine. While recognising that the EU has failed to agree on any response measures to date, we believe that ongoing efforts should be made to build an agreed EU position with regard to how the bloc should respond to the International Court of Justice 2024 opinion on trade and economic relations with the occupied territories.

The committee may be aware that the majority of US states have passed legislation to counter boycotting of Israel and similar laws are also in place at a federal level in the United States. Many of these laws require businesses looking to engage in public contracts to certify that they are not involved in any Israeli boycotting measures. Businesses operating in Ireland and impacted by a Bill of this nature could, therefore, potentially be excluded from public procurement contracts or other commercial opportunities in large parts of the US and also face other potential penalties through that legislation in the US.

While the US has long been one of Ireland’s most important trade and investment partners, and the two countries have long-standing deep cultural, social and economic ties, it is clear that this most important of economic and international relationships is in a period where views may increasingly diverge. Business recognises that our two Governments currently have different views and policies on several economic and international relations issues, but the fact remains that our economies are inextricably linked. Any deterioration in US trade and investment with Ireland would have material impacts for households and businesses. It is very difficult to quantify what the indirect costs and reputational impact of passing this Bill will be or what material impact they might have on economic relations with the US. It is also difficult to weigh these costs against the other issues the committee and the Oireachtas need to consider in the pre-legislative scrutiny process. It is important, however, that consideration of the merits of the Bill include a recognition that these reputational costs may impact on Irish workers, households and businesses.

IBEC recognises the context in which the Bill is being progressed and the cross-party political support for the Bill. We recommend that all potential impacts of the Bill, including economic and fiscal aspects, be considered as comprehensively as possible. I thank members very much for their attention.

John Lahart (Dublin South West, Fianna Fail)
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I thank Mr. O'Brien. We are grateful for his attendance and for his statement. We will go to the floor now. The first speaker is Senator Higgins, who has seven minutes.

Alice-Mary Higgins (Independent)
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I welcome Mr. O'Brien. I will begin with a couple of short questions. He seemed to suggest that under Irish, EU and international law, the Israeli settlements on occupied Palestinian territory are illegal and are built on occupied land and, as such, are not part of Israel. He implied that when he mentioned the association agreement, but perhaps he could confirm that is the case.

Mr. Fergal O'Brien:

I think questions-----

Alice-Mary Higgins (Independent)
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I am really looking for just a very short "Yes" or "No" answer.

John Lahart (Dublin South West, Fianna Fail)
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Is that Mr. O'Brien's understanding?

Alice-Mary Higgins (Independent)
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Is it Mr. O'Brien's understanding that these are illegal settlements on illegally occupied land and that, therefore, they are not part of Israel per se?

Mr. Fergal O'Brien:

I am not in the position to provide an informed view on that. I am here to talk about the implications for Irish business and the Irish economy. I am going to have to leave that opinion to others.

Alice-Mary Higgins (Independent)
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The reason I was asking is that is already the case under Irish law, under the Geneva Conventions Act 1962, which obliges us to abide by the Geneva Conventions, that the settlements are illegal in that context. That is also reflected in the business advisories the Government has given to business over a long period of time. I am sure Mr. O'Brien would be familiar with business advisories in terms of a number of contexts that have been very clear with regard to the potential breaches of both Irish and international law when we trade with such settlements. I am genuinely trying to bring it back into the business piece because this is what underpins the business advisories.

Mr. Fergal O'Brien:

Our trade relations are governed by EU law and, as far as we know, there are no legal issues that currently impact on trade with the occupied territories, apart from the labelling requirement of the European Union. That is our understanding of the trade issue.

Alice-Mary Higgins (Independent)
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However, while the labelling requirement does not come under the EU-Israel association agreement, which Mr. O'Brien mentioned, it is in place because the occupied territories are officially not part of Israel. Is that not the case?

Mr. Fergal O'Brien:

Our understanding on the trade aspect would be that there is no EU ban on trade between those areas and the European Union.

Alice-Mary Higgins (Independent)
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However, there is a different tariff rate. The key point I am coming to relates to the fact that Mr. O'Brien mentioned the US anti-boycott laws. The Taoiseach, Micheál Martin, has been very clear and I believe the Minister of State, Deputy Thomas Byrne, as recently as today said that this legislation relates to the occupied Palestinian territories and does not relate to Israel. In that context, the federal laws in the United States relate to boycotts of Israel, but this legislation relates to the occupied Palestinian territories. That is why this is very pertinent. Mr. O'Brien has spoken a lot about the potential impacts of those laws.

Mr. Fergal O'Brien:

I mentioned that it potentially is an issue and that is what we have heard from our members. There will be a lot of legal experts who will be looking at the legislation, when a Bill is finally published, to determine how significant that issue is. I think it is correct at this stage to raise it as a potential issue and risk.

Alice-Mary Higgins (Independent)
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However, it is not something on which IBEC has sought legal advice. That is fine, of course, but I just want to clarify.

Mr. Fergal O'Brien:

These are clearly US legal issues and it is not something on which we have sought advice.

Alice-Mary Higgins (Independent)
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As I said, my understanding of the laws, and it seems to be an understanding shared by the Taoiseach and the Minister of State, is that they are clear that this is not legislation in respect of a boycott of Israel. This is legislation in respect of ending trade with illegal settlements in illegally occupied territories.

I will come back to the question of the certifications Mr. O'Brien mentioned, regarding the signing of these certification forms and so forth. He acknowledged that our Governments may have very different views and policies in a lot of areas. Is Mr. O'Brien aware that the US Embassy and the US Department of State have also asked for companies and, indeed, all suppliers and service providers to the US Government, regardless of their nationality or the countries in which they are operating, to say that they will not run diversity, equality and inclusion programmes and give certification in respect of that?

Mr. O'Brien suggested a certification measure may affect things such as procurement. I presume IBEC would not support the idea that its members should not engage in diversity, equality and inclusion policies of any kind simply because of this overreach trying to affect how companies would operate here.

Mr. Fergal O'Brien:

I am very much aware of that issue. I am conscious of the challenges it has posed for many businesses in terms of its obligations to comply. We could have a situation where there is one set of legislation in Ireland and a set of legislation in the US that will present challenges for business.

Alice-Mary Higgins (Independent)
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The key point in that regard is that if one set of the national imperatives, such as those I put to Mr. O'Brien, is compatible with international law and another one is clearly not, that creates a somewhat different context.

Mr. Fergal O'Brien:

There will be lots of legal minds that will probably spend considerable time dissecting all of the details of this. It is important in the pre-legislative scrutiny stage that we are identifying these risks. Our members have identified this as a risk and a concern. Their lawyers will need time to view the full detail of the legislation before they can be definitive about the scale, challenge, cost or risk that would be involved.

Alice-Mary Higgins (Independent)
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Mr. O'Brien mentioned assessments. Do we also have a legal risk if companies act in a way that is incompatible with international law? The advisory opinion from the Government for a long time now has already been that companies should not be engaging in this trade. I will come back to that.

John Lahart (Dublin South West, Fianna Fail)
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Does Mr. O'Brien want to have a final word on that?

Mr. Fergal O'Brien:

We have addressed all the questions.

Shay Brennan (Dublin Rathdown, Fianna Fail)
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I will ask some broader questions. Mr. O'Brien mentioned Ireland's reputation. How will Ireland's reputation as a pro-business economy will be affected? In IBEC's opinion, what likely impacts would there be in the short, medium and long term to foreign direct investment, FDI, if we were to enact both trade and services as part of this legislation?

Mr. Fergal O'Brien:

The impacts on reputational risk are incredibly hard to quantify. We have seen this in previous challenges we have had in the Irish economy where we had international reputation risks. It is clear to us based on what we hear from our members and the degree to which this has been raised for Irish-owned and foreign direct investment companies in their international networks that there is a reputational risk here. The complications of extending legislation such as this to services would be substantially greater than for the goods issue. To the conversation we just had with Senator Higgins, there is an established labelling and coding mechanism for goods. That will not apply for services. Services are not labelled. It will be incredibly difficult for companies. We will have to tease through what we mean by a ban on services. Are we talking about imports, exports or what is the nature of any potential services restrictions? It would be substantially greater than the impact on cost. It will be incredibly difficult for corporates to identify what those services trades are. There will not be codes on their systems for the occupied territories, as an example.

We also have the whole challenge around where service value creation occurs, particularly in this modern world of remote working and hybrid working. We could have people living in one postcode area and working in a very different area. Where the value creation occurs will be incredibly difficult to determine. We do not know what the value in services trade is. Any assessment would depend on potential legislation, which we have not seen. However, the feedback we have got from members is that implementation challenges, the administrative and regulatory costs and the potential economic costs would be substantially greater than in relation to goods as set out in the heads of the Bill.

Shay Brennan (Dublin Rathdown, Fianna Fail)
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Mr. O'Brien referenced the feedback from IBEC's members. At this stage, I imagine IBEC has received a reasonable amount of feedback. What are their key concerns, whether founded or unfounded? Some might just be fears about things that will not come to pass, but some might be quite valid. What sectors of the economy are the concerns coming from?

Mr. Fergal O'Brien:

As trade in goods is so small, I do not see that being a material issue. There still is a concern as to what the reporting obligations would be for companies, from the anti-boycott legislation perspective in the US, for operating in a country even if there is a ban on goods. That remains to be determined. It is going to take legal expertise to work through that. The reputational costs are an issue that is now being discussed and debated in the media in the US. There are potentially misconceptions as to what the legislation will or will not do. Ireland is seen, from a reputational perspective, as taking an isolationist approach and operating outside of the competence of the European Union in relation to trade issues. We are the country that is by a distance more interlinked with the US in terms of economic relationships than other European country. With the companies I work with, they are being asked a lot of questions by their customers and within their corporate structures as to what Ireland is doing here, what it is seeking to achieve and why it is taking an approach that is perceived in many cases as being anti-Israeli.

Shay Brennan (Dublin Rathdown, Fianna Fail)
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Is IBEC detecting any support from its member businesses to proceed down this route?

Mr. Fergal O'Brien:

It is not something we have got feedback on. Of course, our members are very concerned and shocked by what they see in the human rights issues and the loss of life we have seen in the Middle East. Business is very concerned about that. As business, we understand and appreciate the challenge the Oireachtas committee has. The committee has got many issues to balance in its decisions. The purpose of me joining members is to ask them to identify and work through what the economic and fiscal implications would be because we believe there will be some. At this stage we cannot quantify them, but they are real and material.

Shay Brennan (Dublin Rathdown, Fianna Fail)
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The Bill is in its early stages and a lot of it has to be developed, particularly the detail. Are there any safeguards that IBEC's members would be keen to see included in a Bill such as this?

Mr. Fergal O'Brien:

A Bill that relates to goods trade where we have a classification system and an administrative system that business can adhere to if it comes into law will be what they will most appreciate. Extension to the legislation to very uncertain and complex grey areas, particularly in relation to services, would be really difficult for business to administer and implement. Business will adhere to law of the State, but if the Bill is in any way vague or unclear from a legal perspective, it will be really challenging.

Shay Brennan (Dublin Rathdown, Fianna Fail)
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Clarity and certainty.

Mr. Fergal O'Brien:

Yes, clarity and certainty.

Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I welcome Mr. O'Brien. The CEO of IBEC, Mr. Danny McCoy, in March said that he was opposed to passing the Bill, stating that it was a "high moral position ... but its practical implementation is probably zero, so it's kind of worthless to the people you are trying to benefit."

When the Government announced it would be progressing legislation it was described by the Palestinian ambassador as a very good and strong move. The committee heard yesterday from a Palestinian woman with family in Gaza who are suffering under the conditions created by the Israeli genocide. Deputy Brian Brennan also spoke of his experience with the NGOs on the ground last weekend, as to how everybody is aware and supportive of the Bill. Does IBEC believe it knows better than the Palestinian people? Does it have a higher moral ground? What does it believe at the moment?

Mr. Fergal O'Brien:

Our view is in the statement. We recognise the context in which this Bill is being advanced and the all-party support it has. We are happy to work with the committee on what we see as the business and economic implications of that, which we think will not be costless. We have so much sympathy for human suffering in conflicts everywhere in the world but our view, as the representative of business, is to talk to the business and economic implications of the Bill.

Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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To me that reads as IBEC being more concerned for business than it is for human life.

Mr. Fergal O'Brien:

That is not an accurate representation of our position. We are not in a position to assess all of the issues the committee needs to consider in its pre-legislative scrutiny. We can only comment on what we see as the economic, fiscal and business aspects of this Bill.

Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I understand IBEC was founded in the early 1990s following a merger of the Federation of Irish Employers and the Confederation of Irish Industry. Is that correct?

Mr. Fergal O'Brien:

That is correct.

Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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What position did these organisations take with regard to the ban on the import of produce from apartheid South Africa? Mr. O'Brien's organisation offers opinions on what is best for Palestine today. Does he think that historically the South Africa ban was as worthless as it believes this Bill will be?

Mr. Fergal O'Brien:

I have been with IBEC a while, but not that long. I am afraid I do not know what the position was at the time.

Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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The apartheid South Africa leader de Klerk lobbied the then Taoiseach, Charles Haughey, in 1993 advocating that the ban be lifted as it would benefit South Africans. A visit by Dr. de Klerk was opposed by the current President Michael D. Higgins on the basis that the apartheid system had not wholly been deconstructed and that South Africa was still under international sanction. Would Mr. O'Brien fall into the de Klerk or the Michael D. Higgins camp on lifting the ban against South Africa while apartheid was still in place?

Mr. Fergal O'Brien:

I do not have a view on that issue.

Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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No view.

John Lahart (Dublin South West, Fianna Fail)
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I am trying to be objective. Mr. O'Brien is here representing IBEC, which is a representative of business interests. That is his function, and his job is to represent its interests as best he can.

Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I am just looking for a comparison. What is interesting is that Ireland led the way in banning imports from apartheid South Africa. That is why I believe Ireland should be leading the way now as well. Other European countries would come along with us and do that also. The European Community at the time also followed. At the moment, the EU has not followed suit, but we hope that is what would happen if this Bill were passed. While Ireland is today the only EU state actively considering the legislation, though we are not there yet, facilitating this has made it into the EU's options paper. That is progress of sorts but it is shameful it is so little. A lot of people are writing off the value of the so-called symbolic gestures. Does Mr. O'Brien regret his chief executive officer's intervention at that time, describing the ban on trade with the illegal settlements as worthless? Does he think it is worthless that we would be trying to push this legislation through?

Mr. Fergal O'Brien:

Again, what we have reflected in our statement is that the level of trade is miniscule. We have observed that we do not think it will have any material impact in terms of direct goods trade. That remains our view.

Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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It is difficult for us because we have heard both sides of the story with Palestinians as well, and it is just horrendous what they are living through. Mr. O'Brien is also talking about miniscule amounts of money that would be lost with this Bill, and that the Bill is only symbolic. Trade will only lose €685,000. What about the services portion of the Bill we are trying to implement. Airbnb and those services are already moving in-----

John Lahart (Dublin South West, Fianna Fail)
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I know the Deputy did it inadvertently, but we cannot name entities here.

Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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I apologise. There are services such as-----.

Fiona O'Loughlin (Fianna Fail)
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Accommodation services.

Cathy Bennett (Cavan-Monaghan, Sinn Fein)
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Accommodation services are already moving in and making money. There is probably a lot more. If this Bill does not pass here, there will be a lot more money involved.

Mr. Fergal O'Brien:

We have no data on the volume of services. Our major concern would be that it would be extremely difficult and costly for Irish business to implement such a measure if it were to be proposed.

Garret Ahearn (Fine Gael)
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I thank Mr. O'Brien for coming this evening. It is important to clarify that we have had a lot of committee meetings on legal issues and civil society groups coming in from a humanitarian perspective. The reason Mr. O'Brien is here is to give us a broad overview of what impact this could have on businesses. It is nothing to do with personal views or anything like that. It is just so we as a committee can understand whether there will be an impact on Irish businesses. Mr. O'Brien stated that he has spoken to many businesses about their concerns. Will he go into detail? What exactly are their concerns? What are the main topics they bring up in terms of this Bill being brought forward?

Mr. Fergal O'Brien:

On this Bill with regard to goods, there are two main issues. One relates to Ireland's reputation internationally from an investment and trade perspective. Clearly, we have garnered a negative response to that internationally.

Garret Ahearn (Fine Gael)
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Is that response similar to the response we have seen politically from the United States? Is that happening within business?

Mr. Fergal O'Brien:

It is. We have been asked about this Bill for some time. Why is Ireland doing this? Why is Ireland taking such an approach? There is probably a lot of disinformation on the Bill as well. That is clearly a factor. Other businesses internationally would be concerned about Ireland operating outside the EU competency on trade. That would be a concern for business. As businesses trading either within the European Union or with third countries, that is our core framework.

Garret Ahearn (Fine Gael)
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Could that change following the statements from the EU last week with regard to countries having a unilateral decision on the occupied territories?

Mr. Fergal O'Brien:

I think that options paper is helpful, and it is our preference that this be co-ordinated at an EU level. The other issue, which I already addressed, was the issue of the anti-boycott legislation and the reporting requirements. Our members or anyone we have spoken to cannot at this stage be definitive as to what the issues or implications of that would be, even for a ban on goods. That remains a risk factor in our view. We have the reputational risk, and we have this reporting issue and risk. They are interconnected.

Garret Ahearn (Fine Gael)
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I understand the concerns businesses have. I remember they were there when the war in Ukraine started in terms of sanctions against Russia. We had a big company in Limerick run by a Russian oligarch. There were concerns that business would go and things like that. From past experience, when Mr. O'Brien sees things like this happen or political decisions being made where there are concerns within business, does it often materialise that it is as bad as or worse than predicted?

Does it ease off over time? Is this different?

Mr. Fergal O'Brien:

We have to take the issues that have been raised internationally regarding the potential impact on our reputation seriously. I would not exaggerate them. I am not in a position to put a cost on them. However, if it was a different public policy issue we were dealing with, if we were receiving this much attention internationally on it and if it could potentially have an impact on investment, jobs or the fiscal outlook, we would be doing our best to cost it and we would take the risk very seriously.

Garret Ahearn (Fine Gael)
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We heard from representatives of the Department of foreign affairs that lobbying was taking place in the political sphere and within the Department. Is that happening from a business perspective? Are big businesses lobbying IBEC or other organisations to try to influence a change in the Government's position?

Mr. Fergal O'Brien:

We have definitely got feedback from our members on the Bill. They are mainly raising concerns and risks. That has been from both Irish-owned businesses and the foreign direct investment sector. As a business representative group, we get lots of such feedback. We have definitely been getting feedback. I have no idea what individual businesses have been doing as regards direct engagement with Government.

Garret Ahearn (Fine Gael)
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Just so I understand, will Mr. O'Brien explain what he said about significant costs to businesses if services are included? We were briefed previously that trade coming into Ireland from the occupied territories is 30% goods and 70% services. The goods were worth €685,000. As Mr. O'Brien has said, that is miniscule in the grand scheme of things. That is 30% of it so it seems the other 70% would also be fairly miniscule. Where does this significant cost for business come in if the trade is so small on the services side? It may be double the value of the trade in goods, but it is still small in the grand scheme of things.

Mr. Fergal O'Brien:

I do not know where those figures have come from. As far as I know, it is not possible to know what the trade in services is because of the complexity of measuring the trade in services with the territories. The real issue and the real cost arises because every business that could potentially be covered by the Bill would have to look at its operations. The customers in the occupied territories these businesses are trading with will not be readily identifiable. It will not be systemised or coded on their systems. Based on what I hear from our members, I suspect those functions would be removed from Ireland. Those customers would be served from a different jurisdiction. If businesses have to look at their customer profiles to remove the teams servicing them, it will affect much more than just the occupied territories. As I mentioned, there is complexity as regards where service value creation happens in our world of blended work where people work from home or from offices. Based on what I hear from my members, I suspect the value extracted over the Irish operations would be much greater than the trade with the occupied territories alone. This could extend to the entire Middle Eastern function. That would then happen in another jurisdiction. Those customers will still be served. They will not be served out of Ireland. They will be served elsewhere.

Garret Ahearn (Fine Gael)
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I have one final question. I thank Mr. O'Brien for his comments. When the war happened in Ukraine, companies made a decision not to trade with Russia. There was a domino effect that continued with company after company. Is Mr. O'Brien aware of companies that have decided not to trade with Israel any more? If so, is the number of companies that have decided not to trade significant?

John Lahart (Dublin South West, Fianna Fail)
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A "Yes" or a "No" will do on this. We might come back to the Senator.

Mr. Fergal O'Brien:

I am not aware of that happening.

Fiona O'Loughlin (Fianna Fail)
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I thank Mr. O'Brien for being with us today. In his opening statement, he said that he recognises what he is representing is only one aspect of what the committee is looking at and will need to consider. He is correct. It is only one aspect but it is an important aspect that we need to consider because there is no doubt that we are navigating very complex moral, legal, diplomatic and economic terrain. We have to consider all in the balance of it. It is important to note that the Taoiseach has stated we should try not to disadvantage Ireland in the way we move forward.

With regard to the direct impacts Mr. O'Brien has spoken about, he has provided the value of the goods and has also said that he cannot give an amount with regard to services, were they to be included. Does he have any idea of the number of Irish or multinational companies that would be impacted? Rather than the financial amount, does he have any idea of the number of companies that would be impacted by measures on goods and the number impacted if services were to be included?

Mr. Fergal O'Brien:

I do not. Based on the feedback I have got, I suspect a much larger number of companies would be impacted by the addition of services than if goods alone were to be included. As we know, the trade in goods is very limited. The complexity raised by the services issue is substantially greater. Companies will not know the answer. If we asked companies today whether they were trading services with the occupied territories, they would not be able to tell us because it would not be readily identified on their systems by a geographical code. They would have to profile each customer and try to determine that information through very detailed analysis. Answering that question would be extremely difficult. How services are delivered and traded and how value is created is incredibly complex. From a business operations perspective, it is a whole different situation from that of goods trade.

Fiona O'Loughlin (Fianna Fail)
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Mr. O'Brien was clear about the labelling of goods and on the fact that services are not labelled. If services were to be included, does he have any idea how that could be implemented both in the legislation and in how businesses would comply?

Mr. Fergal O'Brien:

The legislation would be extremely complex. We have not received the kind of technical insight we would need from our members to determine that. I again go back to the challenge in our modern economy as regards the complexity of service value creation, the location where activity happens, the movement of people between work and home postcode locations and the realities of a colleague living in one of these postcode locations working on a giant project with colleagues in Ireland. It is extremely complex. The legislation would be really challenging.

Fiona O'Loughlin (Fianna Fail)
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I thank Mr. O'Brien for that. I am trying to figure out how supply chains might be disrupted. Does he have any views or insights in that regard?

Mr. Fergal O'Brien:

On the goods side, we do not see very material issues as regards the direct supply chain. The level of trade in goods is really small. Of course, there will be issues where those goods still come into the European Union or the UK. There would be all-island cross-Border issues. There are complexities there that are difficult to legislate for once we deviate from the European competency. On services, again, there is complexity where individuals on a large team are contributing to a particular project. There could be 50 people, one of whom may be living in one of these postcode locations. They could be contributing to very high-value activity. It is really difficult to pick that apart.

Fiona O'Loughlin (Fianna Fail)
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Over the last 20 hours in particular, we have seen a lot of racist comments coming from America. We have been accused of being antisemitic. Everybody here showed very genuine respect for all those who were to give their perspective. Some of the comments made were quite shocking and really quite saddening.

Yesterday, The Wall Street Journalhad a piece about the anti-boycott laws that were introduced with bipartisan support in 1977. We have to sit up and take note of such articles. There has been reference to the empathy we all share in relation to Palestine and the compassion the business community shares also. What does Mr. O'Brien think a realistic, humanitarian, value-driven business response to supporting Gaza, a stance that would not risk economic fall-out, would look like?

Mr. Fergal O'Brien:

I think the big challenge for Ireland is to be seen to be acting outside of the competency of the European Union. That is a really big challenge. We have to be conscious of the scale of our trading relationship with the US. Thankfully, Ireland is now a wealthy and prosperous country. Everything we can do in terms of foreign aid support, to help those who have been impacted by the dreadful conflict in the Middle East, is what we should be looking at.

Noel McCarthy (Cork East, Fine Gael)
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I thank Mr. O'Brien for coming in today. My questions will be on business and trade impacts. I think Mr. O'Brien might have answered some of them directly already. I will try not to be repetitive, but if he can help out I would appreciate it. What specific Irish business interest does IBEC believe would be directly impacted by the occupied territories Bill? Could Mr. O'Brien provide some examples?

Mr. Fergal O'Brien:

As I said earlier, we have got feedback on this Bill from Irish-owned exporters and internationally owned FDI companies. Those trading goods mainly talk to us around the international reputation aspect that they pick up in their global connections as they do business internationally. That clearly is a factor. The US companies are concerned about complying with anti-boycott legislation even in the context of goods. A whole range of companies are worried about the implementation realities if this legislation was to be extended to services. This affects a whole range of Irish and internationally owned companies because of the complexity of value creation and supply chains in the services sector.

Noel McCarthy (Cork East, Fine Gael)
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There are huge concerns within those companies about the Bill being passed based on those factors.

Mr. Fergal O'Brien:

If this Bill is passed, the main concern will relate to international reputation risk and the anti-boycott legislation obligations and requirements in the US. They would be the main implications if this Bill on goods is passed.

Noel McCarthy (Cork East, Fine Gael)
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Does Mr. O'Brien believe any existing or potential Irish exports would be jeopardised by compliance with international humanitarian law in trade policy?

Mr. Fergal O'Brien:

Again, we have not considered goods exports in the context of the Bill. We have been focusing predominantly on imports and the impact on the supply chain. We have not got any feedback on that issue in relation to the export of goods.

Noel McCarthy (Cork East, Fine Gael)
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How does IBEC assess the reputational risk to Irish companies of being linked directly or indirectly to settlements in occupied territories which are widely considered illegal under international law?

Mr. Fergal O'Brien:

I have not got any feedback from members in relation to that. I am not aware that businesses have quantified or communicated anything to us in this regard.

Noel McCarthy (Cork East, Fine Gael)
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IBEC has got no feedback on that.

Mr. Fergal O'Brien:

Not on that aspect.

Noel McCarthy (Cork East, Fine Gael)
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Does IBEC believe Ireland should refrain from enacting legislation in areas where it would lead the EU, even where such legislation is grounded in international law?

Mr. Fergal O'Brien:

We think it would be better if this legislation was co-ordinated at an EU level. We think it would significantly reduce the reputation and investor sentiment costs associated with the legislation it was co-ordinated at an EU-level.

Noel McCarthy (Cork East, Fine Gael)
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If it was an EU law?

Mr. Fergal O'Brien:

Yes.

John Lahart (Dublin South West, Fianna Fail)
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I am next. I thank Mr. O'Brien for getting IBEC to engage with its stakeholders and the companies. It is very helpful. We will not dwell on the last point, but is it the case that if we had the cover of other EU countries, IBEC's members would not have the anxieties that Mr. O'Brien seems to be expressing?

Mr. Fergal O'Brien:

In relation to goods, I think an EU co-ordinated response would significantly reduce the reputational risks, but-----

John Lahart (Dublin South West, Fianna Fail)
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That twin-track approach is the Government's position too. I have a couple of quick questions. Mr. O'Brien said that the key would be foreign aid support, but foreign aid support is sitting at the border for months and months. The international community has been sending incredibly significant volumes of humanitarian aid but it is just not getting through. That does not work. Every company has employees. As politicians, we have seen the impact in previous cases. We are not allowed to mention entities. Have any employers considered the downstream impacts with employees if they do not support such a measure? One of the things that escalated this issue for the committee was the manner in which the Netanyahu Government and the IDF descended into a place that is just beyond description, and beyond any so-called normal norms. That is why this has become such an issue. Companies have employees and employees have voices. Have IBEC's employee members considered that?

Mr. Fergal O'Brien:

They have indeed. CEOs have views as well. What we see is that they have to balance the views of employees with the reality in terms of the potential impact for their business and their employees' livelihoods. Generally, what we have seen is very few individual companies at a corporate level taking a position on this legislation.

John Lahart (Dublin South West, Fianna Fail)
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Some of my questions might seem contradictory. Mr. O'Brien mentioned that we had previous issues where Ireland's international reputation might have been at risk. Can he briefly name one of those?

Mr. Fergal O'Brien:

I would go back to the fiscal and banking crisis and the scale of it. It was very hard to quantify. We made a lot of policy decisions in this country that were based on international reputational impacts; for example in terms of how we funded banks and the contribution the State made to stabilise the banking system. Much of that was based on international and investment implications. It was a very material issue.

John Lahart (Dublin South West, Fianna Fail)
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This is a contradictory question. Let us say that this committee recommended in its report that a Bill be adopted that included services and that it found its way to the desk of President Trump. What does Mr. O'Brien think his reaction would be?

Mr. Fergal O'Brien:

Based on the feedback we have got from stakeholders, if the Bill was extended to services, the costs internationally, the costs for US business and our reputational costs would be substantially greater than would be the case with a goods-only Bill. We have no doubt about that. It is very clear based on the feedback we have got.

John Lahart (Dublin South West, Fianna Fail)
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We are already threatened with tariffs. It does not seem that the US is particularly concerned with Ireland's interests or the interests of the EU when it comes to tariffs. We are talking about tariffs of hundreds of percent being threatened. It does not seem to matter what we do or what we say with this US President. They are going to do what they are going to do.

What would be the reputational cost of Ireland resiling from making a decision on goods and services?

Mr. Fergal O'Brien:

We have challenges right now with tariffs and trade, given that one quarter of all our value of national income comes from exports to the US. That is five times any other country in Europe.

John Lahart (Dublin South West, Fianna Fail)
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One quarter.

Mr. Fergal O'Brien:

Yes; we have more skin in this game than any other member state or any other country in Europe. In my opening statement I said that despite the differences we have and our Governments have at present, our economies are inextricably linked. The cost to jobs, businesses and livelihoods of further accentuating some of the reputational relationship challenges we have cannot be ignored. These costs will be material.

John Lahart (Dublin South West, Fianna Fail)
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When American businesses raise with Mr. O'Brien's members why Ireland is doing this or that, would it assist companies if they had an answer, for example, if they were assisted by the Government in answering this? For example, this is not a boycott of Israeli goods; it is a boycott of goods emanating from the occupied territories. If services were included, it would not be a boycott of Israeli services; it would be a boycott of services emanating from the occupied territories. Would this be helpful?

Mr. Fergal O'Brien:

Clarity on the precise measures of the Bill would definitely be helpful. There are many misperceptions. We have seen ill-informed commentary. Correcting this more would be very important. Again, I stress that if the Bill were to be extended further to include services it would cause many headaches, complexities and complications for the businesses that must administer it. They would have to notify corporate headquarters in the case of international companies, and state that Ireland has implemented this legislation and they now need to adhere to it, and ask what they need to do in their structures and systems to adhere to it. It would be difficult, costly, disruptive and damaging.

Joe O'Reilly (Fine Gael)
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I thank Mr. O'Brien for coming before the committee. He is very welcome and it was a pleasure to chat with him outside for a moment also. Mr. O'Brien is more than aware that the EU is preparing a suite of measures that member states could take that would be acceptable to deal with the horror that is Gaza. Does it give us cover that there is a European-wide debate and discussion? Does this not give us a level of cover, from Mr. O'Brien's perspective? I have other related questions.

Mr. Fergal O'Brien:

Our view is that this issue is much better done, and all issues of trade and international-----

Joe O'Reilly (Fine Gael)
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Yes, but do the specifics of the initiative yesterday make it part of more global horror?

Mr. Fergal O'Brien:

This would probably have to be advanced further in terms of getting a formal opinion and formal decision at EU level on this. It looks like it is going in the right direction. It looks like there is a point there.

Joe O'Reilly (Fine Gael)
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It might make Irish businesses not seem different.

Mr. Fergal O'Brien:

That will help. It will help if Ireland is not taking an isolationist approach. It will not completely eliminate the risks and would still leave us with the same issue, as to how corporates will comply with anti-boycott legislation in the US.

Joe O'Reilly (Fine Gael)
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Mr. O'Brien said we have reputational damage from it. Is there any sense in which taking a moral stance and standing out in this way would give us a reputational advantage? Is there any way it is good for Ireland?

Mr. Fergal O'Brien:

Potentially it would be in some quarters. I cannot say I have picked it up from a business perspective.

Joe O'Reilly (Fine Gael)
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Are any of those quarters which the businesses would be connected to?

Mr. Fergal O'Brien:

It has not been reflected to me, I must admit. I am sure in some quarters it might but it is not something that has been reflected to me. The majority of the feedback we have received has been very much about concern and risk.

Joe O'Reilly (Fine Gael)
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Mr. O'Brien has said there are real and material concerns. Is this anecdotal? There are the classic discussions we hear after a budget in the local pub, and all sorts of exaggerated opinions. Is this anecdotal with regard to what people are saying? How sure is Mr. O'Brien that there is a soundness to his concerns? Is it people blowing off a bit of steam?

Mr. Fergal O'Brien:

If it was one or two people walking down the street, we would treat it as anecdotal. This has been fairly extensive in terms of feedback we have received. It is from a large number of companies and sectors, and from various jurisdictions also. It is from a number of countries internationally.

Joe O'Reilly (Fine Gael)
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With the biggest being America?

Mr. Fergal O'Brien:

The biggest and most significant trading economic relationships we have are with America, and it has got a lot of attention there. It is not just in the US. We have received the same feedback from other jurisdictions.

Joe O'Reilly (Fine Gael)
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Mr. O'Brien said the anti-boycotting laws in the individual states in America will present a problem with related Irish firms. Will Mr. O'Brien explain the working out of this and how it would work in practice?

Mr. Fergal O'Brien:

We would need to see the full legal text and details of the Bill. We have sought opinion from businesses in the US, and their lawyers have not been able to determine fully what the implications would be. They are reporting to us that even if a business does not have goods trade with the occupied territories, they would still need to report. The very event of the Bill being enacted in Ireland would mean those US companies would need to report. They would need to draw attention to the fact that Ireland essentially has this legislation.

Joe O'Reilly (Fine Gael)
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Is Mr. O'Brien suggesting they would be in trouble domestically in the United States for being linked?

Mr. Fergal O'Brien:

It could reflect negatively on them in various ways, yes.

Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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I thank Mr. O'Brien for being so succinct and pragmatic in his initial paper and his responses. It helps me to remind myself from time to time why we are here. We are here because of the catastrophe taking place. We are also here because the Irish people are insisting the Government, and ourselves in the Houses of the Oireachtas, are seen to do something. What they want us to do is enact a piece of legislation that covers goods. They are equally vociferous in insisting that services are covered. If we back away from this we will have reputational damage but the reputational damage will be here at home. I am minded of the old idea that it is never the wrong time to do the right thing. I am also conscious of the fact that many people have an unrealistic expectation of the impact of enacting this legislation. The impact at best will be the moral and symbolic effect it has in a broader sense.

I want to clarify some points with Mr. O'Brien. He said very clearly that enacting the legislation as far as goods is simple and straightforward, and no bother at all. It is very complex when it comes to services. Does Mr. O'Brien agree with what is being attributed to the Attorney General, that the difficulties there are not only in the working out of it but the complication of EU law?

Mr. Fergal O'Brien:

I have not seen the opinion of the Attorney General. I would have thought that legally, and I know the committee has heard from a range of legal experts, there are many grey areas and different opinions on this.

Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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Would business people accept that if this is enacted with services covered, there would need to be some sort of a State regime initially to assist businesses in processing the necessary documentation around the area of services? Is this something that could work or could assist?

Mr. Fergal O'Brien:

If this were to be extended to services, the need for clarity, certainty, great detail in the legislation and guidance would be incredibly important.

Irrespective of that, the complexity that will land on the desks of the businesses that have to implement it will be extreme, costly and challenging for them, irrespective of what the State will do to support them.

Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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One of the most upsetting aspects of the evidence we heard yesterday was that some people do not accept that the occupied territories are illegally occupied. From IBEC's dealings with American businesses and companies, does it think they will discriminate between Israel per se and the occupied territories?

Mr. Fergal O'Brien:

I do not know. No one has given me any opinions on that distinction. What we hear and see is their perception of what Ireland is doing.

Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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Mr. O'Brien has made clear that the real, big challenge is the anti-boycotting legislation in the United States. I am conscious that we are therefore not only talking about US jurisprudence; we are talking about the US judicial system that seems to be subject more than ever before to political influence. Does that bother IBEC? Would it see that coming into play or could it see this going beyond the US onto an international judicial platform?

Mr. Fergal O'Brien:

Clearly, there could be legal uncertainty at a European level. We will have to see how the legislation will be responded to at that level. We are at a time of great risk with regard to our relationship with the US and political measures could be taken that could be targeted at Ireland because of this legislation. We need to be conscious of that.

Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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Okay. Are we more likely to provoke reaction in the United States if services are included?

Mr. Fergal O'Brien:

There is no question but that the level of attention and focus that would be on the legislation if services are included would be much greater than if it just applies to goods. If this was just a goods Bill, most corporates would be able to deal with it quite quickly. If it applies to services, it will require a lot of internal work - data processing and systems work - to identify whether there is an exposure somewhere in the supply chain and they will have to raise the issue at a corporate level. They could answer the question tomorrow if they trade in goods. They could tell us straight away.

Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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Mr. O'Brien's organisation has a fine reputation and I congratulate him on that. If this legislation is enacted to include goods and services, can we be assured that the membership of IBEC will be supportive of the implementation of the legislation?

Mr. Fergal O'Brien:

As a representative organisation, we will always comply with the laws of the State and give our members guidance and support to do the same.

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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I thank Mr. O'Brien for his attendance. It is appreciated. I wish IBEC the best with its pre-budget launch, which I think is tomorrow. I am afraid I will not be able to attend as I have another commitment.

I have a series of questions, most of which are brief, so I ask Mr. O'Brien to be as concise as he can in answering.

Does IBEC accept that trade with the occupied territories is a wholly different thing legally and commercially from trade with the State of Israel?

Mr. Fergal O'Brien:

What we can comment on is that there is clearly a distinction in goods trade with the occupied territories and the State of Israel as identified in the EU law I referenced previously. That distinction is clearly there. I mentioned it with respect to the EU-Israel agreement.

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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I understood that the EU-Israel trade agreement distinguishes in terms of services. That is not IBEC's position.

Mr. Fergal O'Brien:

As we do not deal with tariffs on services and because of the challenges in identifying designation with services, I do not think it brings the same level of distinction. I will go back to the point I made that goods from the occupied territories are labelled. We have a clear system. We do not have the same system for designation or recognition of services.

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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Yes, except that in the midst of some the discussion today, there is a distinction to be made. This legislation foresees, if someone is engaged in such trade, that they would potentially face sanction. It is not necessarily the same as tax law or such matters. However, to some extent there is a conflation between whether something can be legislated for and how difficult it will be to prove a breach of that law. Many items on our criminal law statute books are difficult to prove at times. That is not the same thing. To some extent the point Mr. O'Brien is making is that it is difficult to ascertain for services. That does not mean that legally the EU or Ireland treat it differently or that it would not be possible to legislate for it. Is that not fair to say?

Mr. Fergal O'Brien:

It means the practical implications of implementing it at a business level will be substantially greater. That is the challenge we see and the issue our members are reflecting to us. It can potentially be legislated for. Can it be adequately monitored, enforced or implemented on a practical level by willing parties?

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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Mr. O'Brien said earlier that he thinks there is misinformation. Does he believe the nature of this Bill has been mischaracterised abroad?

Mr. Fergal O'Brien:

Some of the commentary I have seen internationally has definitely been negative and has probably misrepresented the Bill as set out. It has been unhelpful. Ireland's reputation has been impacted as a result of some of the commentary on the Bill.

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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Does Mr. O'Brien think there is a failure to recognise the distinction made in the Bill between the State of Israel and the occupied territories? Has that been lost?

Mr. Fergal O'Brien:

I have observed that lack of distinction in some of the commentary I have seen.

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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Some of the commentary has been that the Bill is antisemitic. Does Mr. O'Brien believe it is?

Mr. Fergal O'Brien:

I do not believe the Bill is antisemitic. Ireland should counter those accusations in the strongest possible way.

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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I agree. I thank Mr. O'Brien.

Does he also agree that the Irish Government over many decades has had significant differences with the US Government on many areas of foreign policy, whether it was Iraq, Western Sahara, the Middle East or a whole range of other areas. Can Mr. O'Brien recall any instance where that had any impact on the willingness of US companies to invest in Ireland?

Mr. Fergal O'Brien:

This issue is very different from any of those geopolitical issues the Deputy mentioned. If the Irish State chooses to erect trade barriers, essentially, for US businesses operating in Ireland and Europe, it will become a very tangible issue in our relationship with the US and I suspect that something such as this would be identified by the US trade representative as a material trade barrier in the European Union. We would be moving into a different sphere than the geopolitical issues the Deputy mentioned. This would be a direct US-Ireland trade barrier issue. It would be recognised as such in the US.

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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I do not want to dismiss that entirely, because it is some of the soft elements in trade but, on a related matter as regards legal instruments and hard policy, trade between the US and Ireland is not simply between the US and Ireland. It is between the US and the EU. Is that not fair to say? It is not possible, or there is no mechanism, for the US Government to levy tariffs against Ireland alone.

Mr. Fergal O'Brien:

Trade is one aspect of our economic relationship. Probably the more important aspect is the long-term investment aspect.

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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I get that and I do not dismiss it.

Mr. Fergal O'Brien:

If investment decisions turn negative for Ireland, we will all feel it.

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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I hear that.

Mr. Fergal O'Brien:

Employees will feel it and Irish households will feel it.

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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I hear that and I do not dismiss it at all, but I am asking a specific question. Is it the case that tariffs cannot be levied against Ireland alone, only against the EU?

Mr. Fergal O'Brien:

Yes, absolutely, a tariff impact would be done at an EU level.

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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I thank Mr. O'Brien. I do not dismiss the other points because I appreciate there is totality in the politics, relationships and so on.

I am not dismissing that. I understand that is important. I do not agree with all of Mr. O’Brien’s statements but they are sober, clear-sighted and rationally presented, and I appreciate the tone he has brought to this debate.

The Department of foreign affairs already offers advice to companies in respect of the occupied territories. If a member company of IBEC came to Mr. O’Brien or the management board and said that it intended to invest in the occupied territories – which I appreciate is probably an unlikely event – would Mr. O’Brien advise the company that there are considerable legal risks in making such an investment because of international law and existing Irish statue law?

Mr. Fergal O'Brien:

The issue has not arisen. If it did, we would direct the company to any guidance from the Department of foreign affairs.

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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Mr. O’Brien would accept that the guidance currently from the Department of foreign affairs is that there is considerable risk in making such an investment as it is not recognised as part of the State of Israel.

Mr. Fergal O'Brien:

As I said, in the very unlikely event that we were having that conversation with a member, we would direct it to that guidance.

Brian Brennan (Wicklow-Wexford, Fine Gael)
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I thank Mr. O’Brien for responding to our questions, most of which have been covered. I wish to pick up one point that I just do not understand. In Mr. O’Brien’s words, why is Ireland taking this role? Business leaders have asked him. I will not answer that question but I will let the people of Palestine and their representatives who sat in those very seats a few weeks ago do so. They want Ireland to continue to take the lead. I do not expect business leaders to fly over and see what is happening and the devastation on the ground. However, if they simply turn on their televisions, they will know exactly what is going on. I am asking a simple question. Is there no moral responsibility in this debate? We are talking about minuscule amounts of money. Even if this was €1, I have heard on the ground the effect this Bill will have on the people of Palestine. We are taking the lead. We are representing the Government and the people of Ireland, and that is the feedback we are getting. Is there no moral responsibility in this argument?

Mr. Fergal O'Brien:

All I can reflect to the Deputy is the business and economic aspects of this Bill. We have recognised coming in here today the cross-party support there is for the Bill as it is. Our request to the committee is that, in making its decisions - we recognise there are other non-economic, non-business and non-fiscal aspects members are looking at - members would also take the economic and fiscal issues into account.

Brian Brennan (Wicklow-Wexford, Fine Gael)
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With respect, that does not answer my question. Mr. O’Brien had his discussions and has his forums. Did any business leader come to him and ask if this was right? We are talking about a minuscule amount here.

Mr. Fergal O'Brien:

The business leaders we speak to think what is and has been happening in the Middle East is shocking, dreadful and deeply distressing. They are deeply-----

Brian Brennan (Wicklow-Wexford, Fine Gael)
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That is one thing we are all agreed on.

Mr. Fergal O'Brien:

-----distressed by it. With regard to measures related to trade, they would say that this would be much more effective if it is co-ordinated at an EU level.

Brian Brennan (Wicklow-Wexford, Fine Gael)
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We mentioned South Africa previously. It was the staff in Dunnes Stores who took the lead on it. That is what we are trying to do. I do not believe that there is not a willingness within the staff, management or owners of companies, as someone who was in business myself, especially – I keep repeating this – when there is so little money involved.

Moving on, regarding the services, the figure for services is not there. Is that minuscule as well, just for my record? This is the main debate we are having and no one is quite sure of what it is. How is that figure not there? I am not criticising; I am just asking the question.

Mr. Fergal O'Brien:

We have not seen any proposed legislation regarding what we are talking about on services. Is it imports, exports or all trade? I do not know. We would have to see the draft legislation. The real challenge with services is the complexity of the value chain. We could have one team member in a postcode designated to be covered by this Bill who could be working with 50 or 100 people on a company-wide research and development, or other, project. Their contribution to that work could potentially be impacted by a ban on services. It really depends on what that legislation would be. I suspect that the direct trade in terms of entity to entity and business entity to business entity is also very small. However, it is the complexity of how services are created in that value chain and the issues and challenges we now have with the location of where people live versus the location of where people work that would make this very complicated, as well as the fact that, unlike goods, we do not have a trade designation system or codification to identify the precise location where those services are coming from. It is much more challenging.

Brian Brennan (Wicklow-Wexford, Fine Gael)
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If we get this Bill passed, can it be implemented? That is the question.

Mr. Fergal O'Brien:

If this Bill is passed, with the regard to the goods elements of it, as I said in my statement, the implementation in terms of the customs issues on goods and boxes coming into the State can be implemented. Regarding services, I have no idea how we would implement it and the companies I have spoken to have no idea how it could be implemented.

Duncan Smith (Dublin Fingal East, Labour)
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I welcome Mr. O’Brien to the committee and thank him for his testimony so far. I accept the view of the Taoiseach and others that there is a separation between Israel and illegal Israeli settlements. If the anti-boycott laws in the US did not exist, would IBEC have any problem with this Bill?

Mr. Fergal O'Brien:

I assume the Deputy is referring to the goods aspect of the Bill, as proposed.

Duncan Smith (Dublin Fingal East, Labour)
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For the purposes of this question, yes.

Mr. Fergal O'Brien:

In the statement, we said we recognise there is cross-party support for the Bill. Our ask today is that members identify as best they can – we know how difficult it is – the costs involved. We think that, in addition to the compliance with anti-boycott legislation, there would be reputational impacts and costs associated with it. I cannot tell the Deputy the scale of those or how significant they would be. In our view, based on the feedback from business, there would be some costs, and that would concern us.

Duncan Smith (Dublin Fingal East, Labour)
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Mr. O’Brien mentioned earlier that his engagement with members, businesses and entities abroad has been extensive, yet he also said a number of times that it has been hard to quantify the impact. Is he surprised that some of IBEC’s members or some of the entities that he has been dealing with have been unable to quantify - whether in revenue loss, pulling out of Ireland, job losses and so on - the potential impact of the Bill?

Mr. Fergal O'Brien:

They have easily been able to identify and quantify direct impacts on goods trade but are challenged on if this if it were extended to services. What almost the majority of them said to me is that, as the Deputy raised the issue of compliance with the legislation, their first obligation will be to comply with the Irish legislation, which would mean moving the teams and functions that currently service occupied territories, but most likely wider areas because of the complexity that I have spoken to in terms of the geographical definition of value creation for services, out of Ireland.

Duncan Smith (Dublin Fingal East, Labour)
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If services were added.

Mr. Fergal O'Brien:

Those customers will still be served. Almost universally, the corporates have told me that they will still service those customers but they will not service them from Ireland because they will comply with the law of the State.

Duncan Smith (Dublin Fingal East, Labour)
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Have entities come before Mr. O’Brien and stated that they will pull out of Ireland? If so, have they quantified that in job loss numbers? As politicians, we hear from IBEC and from many different stakeholders about the potential impact of X, Y and Z.

We hear that a certain number of jobs will be lost, a certain amount of tax revenue will be lost or imports will be down. However, despite the unbelievable attention this Bill has had, we do not hear that from Mr. O’Brien’s side. To what extent does the concern he is articulating on behalf of his members reflect a genuine impact on the economy in terms of job losses, revenue loss or trade loss?

Mr. Fergal O'Brien:

The position has been communicated with me in very objective and almost practical language. I am not of the view that the companies in question would pull out of Ireland but business leaders have said to me that they would have to do an audit of their operations to identify where they could potentially be engaged in services trade with the occupied territories, given the complications I have already mentioned. Then they would have to carve out that element of their operations to outside this jurisdiction to comply with the law of the State. The activity would happen elsewhere. I do not know whether that would just be in relation to the occupied territories plus Israel or to the occupied territories, Israel and a Middle Eastern function. Many of the companies would have a Middle Eastern function. It could relate to an entire Middle Eastern team. I do not know and they do not know because, again, they have not been faced with the legislation. This is based on second-hand accounts. They have not seen anything that they can work with in terms of income tax-----

Duncan Smith (Dublin Fingal East, Labour)
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I do find it surprising that they would not know, given that we are dealing with postcodes and that we know where the settlements are. If the businesses or entities engaging with IBEC cannot quantify the impact in more articulate and detailed terms for our committee, I am encouraged from the point of view of supporting the Bill, which I do. There is some scaremongering and pressure being put on, but I am not seeing the detail behind it.

On the other engagement Mr. O’Brien has had, how much of the lobbying IBEC has had has been politically motivated, as opposed to economically motivated or business motivated?

Mr. Fergal O'Brien:

To be very clear again, our members have been able to identify where there is goods trade. They do not know from their systems, and do not have a code on a system that can identify, where their services trade might relate to areas whose postcodes are covered by the Bill. They do not have that on their systems and cannot know it. They would have to do a really extensive audit and business process examination to determine it. Right now, they do not know what they would be measuring that against. No legislation has been published. It has been mentioned in public discourse and that is the extent of it. They cannot go to their operations and legal teams and quantify something that has not in any way been firmed up in draft legislation.

Duncan Smith (Dublin Fingal East, Labour)
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Has any large entity or a large organisation gamed out a scenario, presented it to him and said it is the reason the legislation cannot happen? Alternatively, are they coming to him saying they would have to do an audit or something and that the legislation could have a huge impact? There is a gap here.

Mr. Fergal O'Brien:

They have been very clear. They have said they do not know and that, on first look, it is not knowable to them. Their sense is that it would be disruptive and complicated, and ultimately mean some functions would move outside Ireland. At this stage, that is all they have been able to say to us.

Duncan Smith (Dublin Fingal East, Labour)
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I thank Mr. O’Brien for his answers.

Patricia Stephenson (Social Democrats)
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I thank Mr. O’Brien. It is coming to the end of the meeting and I appreciate that this can be quite tiring.

Mr. O’Brien has just spoken about the inability to quantify the services dimension. I am just a bit confused about that in the context of the EU–Israel trade agreement. It is true that companies are obliged to make a distinction between goods and services trade in both the occupied territories and Israel. There is already an obligation to map it out for all types of trade, and that is because the settlements are not part of the EU–Israel trade agreement. Are IBEC members currently not making that distinction in their trade?

Mr. Fergal O'Brien:

All I can say to the Senator is that, based on the questions we have asked, they have not been able to readily identify that, and-----

Patricia Stephenson (Social Democrats)
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I would be deeply concerned about that. I am not saying anyone is in breach of anything but, basically, under the EU-Israel trade agreement as it stands, there is a specific distinction to be made between the occupied territories and Israel for all types of trade. It would be great to get a response to determine whether IBEC members are making the distinction, because it is required under EU law.

Mr. O’Brien has spoken about services measures being harder to implement. I wish to point to the 2014 invasion by Russia of Crimea and other now-occupied parts of Ukraine. At that stage, Ireland introduced a ban on trade in goods and services with the occupied territories in Crimea and slightly more broadly in the region. It prohibited Irish companies from exporting certain services to those territories. I assume that, in that context, IBEC members were able to comply with the law.

Mr. Fergal O'Brien:

I understand that they did. I do not have a record of them reporting significant issues regarding it.

Patricia Stephenson (Social Democrats)
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That is great.

Mr. Fergal O'Brien:

That does not mean we are not dealing with a more complex situation now, particularly regarding ways of working, which I have mentioned a number of times with respect to the distinction between place of work and place of residence in the creation of value. It is a new world.

Patricia Stephenson (Social Democrats)
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I do not think the world has moved on so much in a decade that it would not still apply. Does Mr. O’Brien accept that prohibiting companies from providing services to occupied territories is in fact doable if it was done in the case of the 2014 legislation on Crimea? What would be the various contexts? Mr. O’Brien has pointed to different ways of working but I would love the detail because I do not understand how the world has changed so much in a decade with regard to the way services are delivered.

Mr. Fergal O'Brien:

There is complexity in the economic relationships we are looking at between Ireland and Israel and bordering territories.

Patricia Stephenson (Social Democrats)
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My question is really on practical implementation.

Mr. Fergal O'Brien:

It is a different trading relationship, particularly in relation to our services. Then we have this challenge that would not-----

Patricia Stephenson (Social Democrats)
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What is the difference?

Mr. Fergal O'Brien:

The scale of trade, particularly in relation to services. Linkages between-----

Patricia Stephenson (Social Democrats)
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In the recent past, services trade with occupied territories has been prohibited under Irish law.

Mr. Fergal O'Brien:

What is the question?

Patricia Stephenson (Social Democrats)
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Would Mr. O’Brien agree with that?

Mr. Fergal O'Brien:

Our understanding is that businesses would struggle to identify where they have the value creation in their services structure-----

Patricia Stephenson (Social Democrats)
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I understand that, and that------

Mr. Fergal O'Brien:

-----in relation to where value creation is occurring.

Patricia Stephenson (Social Democrats)
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I understand the point on struggling. That comes back to my first point, on companies’ obligation under the EU–Israel trade agreement. Clarity on this is desperately required, just to make sure companies operating in Ireland are currently meeting the obligation under the EU–Israel trade agreement to make a distinction between trade of all sorts in Israel and that in the occupied territories. That is the basis of the----

John Lahart (Dublin South West, Fianna Fail)
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I know, but this is pre-legislative scrutiny of the Bill before the committee.

Patricia Stephenson (Social Democrats)
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Yes, but the context is that the companies should already be doing what is required, which should facilitate their doing so again under new legislation. That is the foundational aspect of my comment. I will move on from that point, having noted the Chair’s position.

We have talked about risk for small companies under existing US law should this Bill be passed. Does O’Brien accept that those same companies are also exposed to legal risk under existing Irish legislation: the Geneva Conventions Act 1962 and the International Criminal Court Act. All this legislation states the settlements are illegal. Would Mr. O’Brien accept that there would be a legal risk for companies if they continued to trade in all capacities with the illegal settlements?

Mr. Fergal O'Brien:

It is not a risk that our members have identified to me, so I am not aware of it being an identified risk.

Patricia Stephenson (Social Democrats)
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Would Mr. O’Brien hold that position in the context of the fact that we have legislation that we are beholden to, namely the Geneva Conventions Act and the International Criminal Court Act, that states we should not be trading with the illegal settlements?

Mr. Fergal O'Brien:

As I mentioned earlier, if those queries were posed to us by any of our members, we would refer them to the guidance of the Department of foreign affairs.

Patricia Stephenson (Social Democrats)
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I thank Mr. O’Brien. We heard from officials of the Department last week or maybe the week before – I do not remember – that under international law Ireland is legally obliged to end trade in both goods and services. They acknowledged that if we ended trade only in goods, we would be only partially compliant with the ICJ ruling. They said that, to be fully compliant, there would need to be an end to trade in both goods and services.

In Mr. O'Brien's view, should we be disregarding our obligations under international law to end trade in services? Would IBEC accept that we should be complying with international law?

Mr. Fergal O'Brien:

There are many grey areas in the legal opinions on this matter. We are not legal experts. We have observed the different opinions.

Patricia Stephenson (Social Democrats)
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We heard from the legal experts among the Department officials that if we only applied the legislation to goods and not services, we would be only partially compliant with the ICJ ruling. We have that legal advice. How does Mr. O'Brien feel about that information from the officials from the Department of foreign affairs?

Mr. Fergal O'Brien:

What we can say is that the cost of extending measures in this legislation to services would be substantially greater. We recognise there is a lot of legal complexity in the issue.

Patricia Stephenson (Social Democrats)
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Our obligations under international law, as a result of the ICJ ruling, include trade in services. Does IBEC feel we should be meeting those obligations?

Mr. Fergal O'Brien:

We will be looking to the State to adhere to all of its legal requirements at an EU level and to balance that-----

Patricia Stephenson (Social Democrats)
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At international level as well as EU level.

Mr. Fergal O'Brien:

-----against our international requirements. We must ensure that is balanced against the EU legal position.

Patricia Stephenson (Social Democrats)
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The EU and international level, in Mr. O'Brien's opinion. Both are required to suffice.

John Lahart (Dublin South West, Fianna Fail)
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We have finished the first round of questioning. We would appreciate it if Mr. O'Brien could stay with us for a short second round. We are conscious that he has come before the committee solo. If he would like to take a break for a few minutes, we would be happy to facilitate.

Mr. Fergal O'Brien:

I am happy to proceed with the session.

Alice-Mary Higgins (Independent)
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I want to follow up a little more. Mr. O'Brien said that companies would have to do audits. Should companies not already be doing audits? It is a fact that they are required to distinguish trade in both goods and services under the EU-Israel association agreement. The terms of the EU-Israel association agreement cannot be applied to trade in services originating from the occupied territories. Auditing should already be in place in that regard.

Mr. O'Brien will be aware that Ireland has signed up to the UN business and human rights principles. They require companies and businesses in Ireland to audit their human rights implications and compliance, and compliance with international human rights law. He will also be aware of the EU measures in respect of due diligence and so forth. Is it not already the case that companies should be doing due diligence and audits in the context of potential breaches of international law, and breaches of international law in certain circumstances?

John Lahart (Dublin South West, Fianna Fail)
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We are engaged in pre-legislative scrutiny of the heads of this Bill.

Alice-Mary Higgins (Independent)
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This is crucial. We have heard unchallenged at multiple points that there would have to be audits and that companies would have to do something new. My point, which I think is extremely relevant and I would like confirmed, is that companies should already be doing the kind of auditing that Mr. O'Brien has mentioned, including in respect of human rights. A failure to comply with international law would contribute to what have been described as human rights violations.

Mr. Fergal O'Brien:

The core issue that is being reflected to us is that were similar legislation to be extended to services, companies would have to do a piece of work to look at the requirements of that legislation. It is legislation that we have not seen and to which they cannot answer at the moment.

Alice-Mary Higgins (Independent)
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The companies are doing similar audits. Is Mr. O'Brien saying that IBEC's members are not already doing similar audits in other areas where their trade in services should be complying, for example, with EU law or the UN business and human rights principles? Is auditing not a part of what they should be doing generally?

Mr. Fergal O'Brien:

I would expect that those businesses are in compliance with EU law but they still have not been able to answer the question as to what the impact of a potential extension of legislation of this type to services, on the basis of legislation they have not seen, would mean for their business operations.

Alice-Mary Higgins (Independent)
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Auditing is not something new. It is ongoing.

Mr. Fergal O'Brien:

I have no doubt but that they are complying with the law as required-----

Alice-Mary Higgins (Independent)
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I am going to just-----

Mr. Fergal O'Brien:

-----but they have not been able to give me the clarity-----

Alice-Mary Higgins (Independent)
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Of course, one cannot implement-----

Mr. Fergal O'Brien:

-----as to what the implications will be.

Alice-Mary Higgins (Independent)
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One cannot implement a law that has not passed yet. The point is that those companies are regularly implementing and having to comply with other kinds of laws in respect of services at both UN and EU levels. This is simply a new law. Of course one does not comply with law that does not exist as yet.

We know that with respect to some of the kinds of businesses involved, including in the hospitality area, there is clear documentation and receipts have issued in respect of services that have been sold within the occupied territories.

John Lahart (Dublin South West, Fianna Fail)
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Time is up, Senator.

Alice-Mary Higgins (Independent)
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Some of these very large companies-----

John Lahart (Dublin South West, Fianna Fail)
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Does the Senator have a question?

Alice-Mary Higgins (Independent)
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Surely there is clear capacity in terms of compatibility for this. I might go back to the boycott law piece for a minute.

John Lahart (Dublin South West, Fianna Fail)
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Do so really quickly.

Alice-Mary Higgins (Independent)
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Mr. O'Brien has said he does not have legal advice in respect of that. We know that the federal laws are specifically framed by a boycott of Israel. Is that not the case?

John Lahart (Dublin South West, Fianna Fail)
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Thank you, Senator.

Alice-Mary Higgins (Independent)
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Lastly, my very-----

John Lahart (Dublin South West, Fianna Fail)
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No.

Alice-Mary Higgins (Independent)
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Sorry, Chair, I have a final point.

John Lahart (Dublin South West, Fianna Fail)
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No, you do not.

Alice-Mary Higgins (Independent)
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With respect-----

John Lahart (Dublin South West, Fianna Fail)
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No, you do not. I say that with the greatest of respect.

Alice-Mary Higgins (Independent)
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I know. One final point.

John Lahart (Dublin South West, Fianna Fail)
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No. Your final point came-----

Alice-Mary Higgins (Independent)
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It is just to clarify a comment.

John Lahart (Dublin South West, Fianna Fail)
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No.

Alice-Mary Higgins (Independent)
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To clarify a comment, I would like-----

John Lahart (Dublin South West, Fianna Fail)
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No.

Alice-Mary Higgins (Independent)
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Mr. O'Brien mentioned-----

John Lahart (Dublin South West, Fianna Fail)
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Senator, will you have some respect for the Chair?

Alice-Mary Higgins (Independent)
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Chair-----

John Lahart (Dublin South West, Fianna Fail)
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I have given the Senator significant latitude. Her time is over.

Alice-Mary Higgins (Independent)
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Okay. I had a point on a question that was asked earlier and I just wanted to get clarification.

John Lahart (Dublin South West, Fianna Fail)
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It is over to the witness.

Alice-Mary Higgins (Independent)
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If I may, I will come in at the end. It is a single sentence.

Mr. Fergal O'Brien:

The Senator asked about the designation of services. I would expect that under some business models it is easier to identify than under others. Perhaps where services are related directly to a particular geocode, it is easier to identify. Others are much more complex.

Shay Brennan (Dublin Rathdown, Fianna Fail)
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In recent weeks, we have heard from various legal experts. Some of them have told us that this Bill could be challenged. If there is a challenge, it is likely to come from one of two places. One is the EU. The second is an Irish company. I am not referring to a specific company but it would be a company that feels injured. Has there been any talk among the members of IBEC or has Mr. O'Brien heard anything to suggest that any of IBEC's members would think like that?

Mr. Fergal O'Brien:

It has not been suggested to us. I suspect that companies will look at the detail of the legislation, whatever it is, and seek to implement and adhere to it as best they can. No one has mentioned to us that they would be looking to advance a legal challenge in any way.

Shay Brennan (Dublin Rathdown, Fianna Fail)
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Does Mr. O'Brien have any knowledge of any IBEC members taking action against legislation because they felt injured by its introduction in the past?

Mr. Fergal O'Brien:

There probably are such instances but it is not something we see regularly. Generally, the approach of businesses is to work with the State, the legislation and the agencies of the State to implement the will of the Government and the Oireachtas. I have come here today very much in that spirit, while identifying to the committee that IBEC thinks this will have costs and implications. The intention of the vast majority of businesses would be to work with the State to implement in a practical way whatever is the decision of the Oireachtas.

Shay Brennan (Dublin Rathdown, Fianna Fail)
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That is fair. Mr. O'Brien has talked about businesses, particularly where services are involved, potentially moving a team or a piece of business abroad. We are talking about large businesses in those scenarios but some businesses are quite small and composed of a few people. They do not have the ability to move abroad. Has Mr. O'Brien heard of any business that is potentially threatened by the introduction of this legislation?

Mr. Fergal O'Brien:

Does the Deputy mean companies whose viability is threatened?

Shay Brennan (Dublin Rathdown, Fianna Fail)
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Yes.

Mr. Fergal O'Brien:

I cannot say I have. That definitely has not been reported to us.

I would be conscious for smaller businesses in these really complex value chain structures in the services sector. People may have some exposure they are not aware of. The detail of this legislation will bring new obligations for them.

Shay Brennan (Dublin Rathdown, Fianna Fail)
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I have a minute left, Chair. May I give it to Senator Higgins?

John Lahart (Dublin South West, Fianna Fail)
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Everyone wants to give their time to Senator Higgins. The other Deputy Brennan has offered as well but I will not allow both of them to give all this additional time to Senator Higgins. I am next.

As a businessman and from a business perspective, Mr. O'Brien says this is riddled with danger. Is he familiar with any effort to combat the misinformation?

Mr. Fergal O'Brien:

One of the things our members will appreciate and asked us to do was engage with the committee here today. Our members saw that as an important thing to do. We recognise this is a really challenging, sensitive and difficult issue for everyone involved, including the stakeholders who are coming here to engage.

John Lahart (Dublin South West, Fianna Fail)
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I do not mean to interrupt Mr. O'Brien but in the USA, is he familiar with business people asking why is Ireland adopting this stance? Is he aware of any efforts being made to combat that?

Mr. Fergal O'Brien:

One of the challenges I see in people I talk to every day - our members - is that they do not know what is involved with the legislation.

John Lahart (Dublin South West, Fianna Fail)
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I ask specifically about the USA. Who would Mr. O'Brien expect to combat that kind of misinformation?

Mr. Fergal O'Brien:

Government working with business will actually be important and we could do that collaboratively, in terms of communication and being clear about what is in this legislation.

John Lahart (Dublin South West, Fianna Fail)
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The impression I get is there seems to be a monumental failure to combat this misinformation. It is not just with this. Globally, misinformation is a big issue across a whole range of matters. I am not just isolating this but it seems to me that business people are asking legitimate questions and they are getting misinformed, disinformed and ill informed answers, and nobody seems to be filling that vacuum. Is that reasonably accurate?

Mr. Fergal O'Brien:

We are in a very challenging phase-----

John Lahart (Dublin South West, Fianna Fail)
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Is that reasonably accurate?

Mr. Fergal O'Brien:

It is accurate. We would like to support the committee with that, as we have done in the past on many international reputational issues.

John Lahart (Dublin South West, Fianna Fail)
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We get a lot of chain mails and I have a huge number of mails about this. We are all sent them in good faith, in fairness. I could not quantify it and I have no evidence but from interacting with some people who have sent emails out of concern, they talk about services and I sense some of them do not know what services are. In my 90 seconds that are left, will Mr. O'Brien talk to the public about what services are and what makes them so complicated? Is it the intangibility of them? What exactly is it? Will he give us examples of some services, please?

Mr. Fergal O'Brien:

It would all depend on how the legislation was framed but for technology services and financial services where a customer sits, it could be the contribution of team members to a larger corporate structure as part of a research and development team. It could be product development and technology. It could be something in relation to financial services.

John Lahart (Dublin South West, Fianna Fail)
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Tell us a brief story. Is Mr. O'Brien saying that some part of a team could be located somewhere and its members are not physically making a service but they are involved in the research and development of a service or something like that and suddenly, that counts?

Mr. Fergal O'Brien:

Yes. It is the reality of the ways of working and the type of technology and business we see in those regions of the world. That is a reality of what we are talking about here. We could have various technical experts, engineers, software engineers and a whole range of technical people working in global teams.

John Lahart (Dublin South West, Fianna Fail)
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Are we talking about tech? If we break down tech, is it hardware and software?

Mr. Fergal O'Brien:

It is predominantly software when speaking about services.

John Lahart (Dublin South West, Fianna Fail)
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What about financial services?

Mr. Fergal O'Brien:

Depending on how the legislation is framed, we could see issues with financial services as well.

John Lahart (Dublin South West, Fianna Fail)
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What about the pharmaceutical industry?

Mr. Fergal O'Brien:

Yes, from a research and development perspective. From a goods perspective, if we are putting something in a box, that is a very different designation and administrative process.

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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I will cover ground that has already been touched upon but I am still curious about it. The EU and countries across the EU announced sanctions against Russia for what happened in Crimea in 2014. I understand that is quite different to what is considered here because it was a cross-European approach. I am not talking about EU competency, but about the practical bit, which Mr. O'Brien is talking about. That covered goods and services.

Mr. O'Brien was with IBEC in 2014. I am not sure what role he was in. Perhaps it was the same role. Does he recall that period? Does he recall how IBEC's member organisations responded to the sanctions on services? How difficult or otherwise was it for them to ensure they did not have the presence of services in Crimea at that stage?

Mr. Fergal O'Brien:

I do not recall being over the detail of those issues. I think the situation is somewhat different on two grounds. The world of work is much more complicated now. The economic and trading relationships we have with those regions versus what we might have with Israel and the occupied territories pose a different challenge for us.

To answer the Deputy's question, it obviously makes it much more straightforward when these issues are implemented at an EU level in terms of European or international corporates responding to those challenges. I do not recall specific issues for our members on it.

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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I accept the world is different in several respects. The primary difference may be that the political considerations or the sensitivity of this issue are a bit different but it seems to be a few things. The world of work has changed, but I would say that is only to a degree. Most of the things that are possible now were possible then. They were just happening less frequently and at a smaller scale. Remote working was eminently possible in 2014 and happening to some extent. People working collaboratively across different locations was happening in 2014 to a lesser extent. That is obviously the case.

While Mr. O'Brien might not recall, would he accept that a competent leadership of a sizeable business would have considered it prudent to do due diligence at that stage as to whether the business had any exposure to Crimea? Would it have been adequate for the leadership to say, in a cursory sort of way, that the business had no presence in Crimea and the sanctions were not something for it to worry about? Would it have been wise and prudent for the leadership to audit the business' operations to see if it had any presence in Crimea?

Mr. Fergal O'Brien:

I have no doubt the leadership would have, but I will stress that the biggest change has been to the world of work. The remote and hybrid nature of work is radically different compared to a decade ago. We see this challenge every day with our members in terms of cross-Border worker challenges on the island of Ireland, which are much more acute than they were a decade ago. Work predominantly happened in the place and address of the employer. There are now very different circumstances. It is radically different from a decade ago.

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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If it is at all possible - it may not be - will Mr. O'Brien follow up with the committee in writing with a brief outline of what IBEC recommended to its member organisations at that stage in terms of what happened with those sanctions? If it is possible, that would be appreciated.

Mr. Fergal O'Brien:

I am very happy to review that for the Deputy.

Brian Brennan (Wicklow-Wexford, Fine Gael)
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I thank Mr. O'Brien for his opening statement and his replies. Is there an official IBEC stance on this Bill? I know IBEC is deeply embedded with its members. I have seen that at first hand. IBEC knows exactly what is happening on the ground. Has it an official stance that we can take away from tonight? Is it pro, is it against or is it leaving it to every individual business to decide?

Mr. Fergal O'Brien:

Our view is expressed as clearly as I could express it in our statement today. We recognise the cross-party support for the Bill as is and our members will comply with any legislative change that is going to be implemented but we think it would be better if it was done at an EU level. We think the costs to the State and to Irish business would be reduced if this was done at an EU level. Our preference would be for it to be done through EU co-operation.

Brian Brennan (Wicklow-Wexford, Fine Gael)
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The answer is that IBEC is against this Bill.

Mr. Fergal O'Brien:

We do not have a position to oppose this Bill. We recognise the cross-party support for it but we think it would be better if it was implemented at an EU level.

Brian Brennan (Wicklow-Wexford, Fine Gael)
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I want to touch on Russia again. I know it was ten or 12 years ago but in terms of the implementation, I am interested in why that cannot be done now in relation to the occupied territories in Russia.

Mr. Fergal O'Brien:

The main observation I have drawn on that is that we are looking at a different and more complex scenario in relation to the world of work and the ways of work, where value is created in the context of the services economy, and also in terms of the nature of the linkages between the geographic locations.

Alice-Mary Higgins (Independent)
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Just to be clear, it is still the case that one cannot trade in services with Crimea. That is still banned. This is not something from 2014. IBEC members should be applying that ban in the trade of services right now, last year, next year, during Covid. There was a suggestion that remote working was somehow a brand new thing but this is not brand new. IBEC members should currently be applying a ban on trade in services. I ask Mr. O'Brien to clarify if that is the case.

Mr. Fergal O'Brien:

My view is that if there is new legislation-----

Alice-Mary Higgins (Independent)
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I have limited time. Is it the case that they are doing so currently?

Mr. Fergal O'Brien:

I would expect that they are adhering to the laws currently.

Alice-Mary Higgins (Independent)
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So, they are already, as of 2025, applying a ban on services, despite the complex world that we live in.

Mr. Fergal O'Brien:

There are significant differences in relation to what could potentially be proposed under new legislation and it would be challenging for companies to be able to identify and restructure their operations as a result.

Alice-Mary Higgins (Independent)
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They would have to look to a new area again. We have been clear on the legal piece. Mr. O'Brien has talked about implementation. Legally, it is clearly already the case that they should be examining these issues. When we look to that business advisory we referenced, Mr. O'Brien mentioned that it had not come up as an instance. Is it not the case that we need to legislate in this area if we want to see action? Is it not the case that, without actual concrete measures such as legislation, we will not see a change? We will continue to see illegal settlements and violations. The idea that the EU may act together is not realistic. Nine countries agree with us and we hope they will act with us but there is currently no prospect of EU-wide action, even with ten new children losing one or two limbs every single day. The EU chose yesterday not to take collective action but our legal imperative under international law is to take leading action nationally, something that is recognised by the EU. We need to act legally if we realistically want to see anything change in relation to these illegal settlements, given that advisory opinions have apparently made no difference to IBEC members, as Mr. O'Brien has described it, over the last period. Those opinions have been in place for a decade.

John Lahart (Dublin South West, Fianna Fail)
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Senator Higgins has now exhausted the time. so I will go to Mr. O'Brien for an answer.

Mr. Fergal O'Brien:

Our members can only implement and respond to legislation that operates in the state in which they operate, and they will do that. We have to give them certainty about what we are asking them to do. If there is legislation requiring them to do something, they will implement and adhere to that legislation.

John Lahart (Dublin South West, Fianna Fail)
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The Senator has asked reasonable questions although, at first sight, they may appear to be outside the pre-legislative scrutiny process. We have not got full answers on how companies are operating in relation to what some committee members think is a parallel situation. Mr. O'Brien may not have been anticipating that question but if he could furnish us with a reply in writing afterwards, that would be good. If he could go back and find out some information on that, it would be welcome. As Cathaoirleach, I do not feel the response was adequate. If Mr. O'Brien wants to clarify, he may. Are companies complying right now with their obligations under EU law?

Mr. Fergal O'Brien:

The Cathaoirleach recognised the issue here in his own comments. We reached out to our members to come here to do pre-legislative scrutiny on what was to be impacting on goods trade-----

John Lahart (Dublin South West, Fianna Fail)
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I do not expect Mr. O'Brien to answer now but I am sure he takes my point.

Mr. Fergal O'Brien:

Given the timelines and the levels of complexity we are talking about, we have not been in a position to have all of those details at the ready.

John Lahart (Dublin South West, Fianna Fail)
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Yes, but Mr. O'Brien takes my point nonetheless.

Fiona O'Loughlin (Fianna Fail)
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To go back to the European situation, I have been shocked at the number of European countries that have steadily ignored the situation in Gaza. At the Council of Europe, only three or four countries stood up for the rights of Palestinians. Europe should be doing more. Mr. O'Brien will appreciate that we have decided that we need to have a twin-track approach. We have been trying, through the Taoiseach and Tánaiste in particular, to pursue a path towards European support. To be fair, they have shown great leadership and that is certainly recognised by the Palestinian people. I know this from a conversation I had with the Palestinian ambassador last week. We have decided to pursue a separate approach while we are waiting for the European approach. That is essentially what brings us all here.

I appreciate that there is a sense of ambiguity around services that come from the occupied territories or from Israel itself. Obviously, this legislation is purely about the occupied territories, the settlement areas. I come from Kildare, which has an interest in pharmaceuticals, technology and agriculture in the context of industry and exports. Which areas does Mr. O'Brien think could be impacted most? I mentioned three in particular but does Mr. O'Brien believe they could all be impacted equally?

John Lahart (Dublin South West, Fianna Fail)
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We covered that issue when Senator O'Loughlin was not here.

Fiona O'Loughlin (Fianna Fail)
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I am sorry.

John Lahart (Dublin South West, Fianna Fail)
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It is fine. The Senator was not to know that.

Mr. Fergal O'Brien:

In terms of reputational impact, it could have an effect on any sector of the economy and that is something that concerns us. Decisions on investment into Ireland can be subjective, qualitative or emotive and in some cases, they are not always fully evidence based. That is a risk for us. This is the intangible world we live in where relationships and sentiment matter. That is the reality of global investment. In the business of services, it is much more complex and complicated. It would be far more challenging in the services sector than in the goods sector but those sentiment and investor reputation issues could impact any sector of the economy.

Fiona O'Loughlin (Fianna Fail)
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Thanks.

John Lahart (Dublin South West, Fianna Fail)
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In the interests of helping the public to understand all of this, I will go back to when the officials presented the Bill to us. Goods was one heading. There were ten headings for services, with 150 subheadings, if memory serves me correctly.

Is there anybody who could populate that for us as a committee? It would be very helpful for us to do that because it illustrates and speaks to the complexity of it. It has been out there in the ether but if I remember correctly, there were 10 service headings and 120 or 150 subheadings. That was the piece. If someone could help us with that, it would be great.

Before I go to the final speaker, how many employees do IBEC-related or connected companies have, including subcontractors and associated service businesses?

Mr. Fergal O'Brien:

The breadth of our membership spans every sector of the economy and our members employ 70% of the private sector workforce. This is well north of 1.5 million employees. It is very extensive. We have indigenous and foreign-owned companies, with 39 different trade associations and sectoral groups in IBEC. We are very extensive.

John Lahart (Dublin South West, Fianna Fail)
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On the first question, does Mr. O'Brien think he could do this for us?

Mr. Fergal O'Brien:

Yes, we will absolutely do that. There were several questions asked which we will come back to the committee with but we will work with our teams to support the committee in any way we can.

John Lahart (Dublin South West, Fianna Fail)
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Last, but by no means least, we have Senator Stephenson next.

Patricia Stephenson (Social Democrats)
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I wish to follow up on what the Chair said. Mr. O'Brien has talked about the services having additional complexities, both in terms of the political and implementation pieces. On that implementation aspect, I emphasise again there is already a legal obligation for companies under current law to distinguish between trade in goods and services between Israel and the occupied territories because of the EU's free trade agreement. It is important to put on the record this is an existing obligation which all companies should be complying with.

Within the remit of not naming any specific companies - I always follow the rules - the UN maintains an updated public database of companies involved with or operating in the illegal Israeli settlements in Palestine. That is a publicly available database online. Does Mr. O'Brien know how many of IBEC's members- I think he said 7,500 - are on that list?

Mr. Fergal O'Brien:

I do not Senator. I do not have any figures on it.

Patricia Stephenson (Social Democrats)
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We could perhaps follow up on that ourselves but it is available online.

Mr. O'Brien also mentioned the number of employees linked to Ireland. Would he accept the vast majority of those companies and their employees have no involvement with the illegal settlements?

Mr. Fergal O'Brien:

Directly, I would say it is very small. As I have said throughout the conversation with the committee that in relation to goods, it is minuscule.

Patricia Stephenson (Social Democrats)
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Is that also services or just goods?

Mr. Fergal O'Brien:

Again, as I have said several times, the complexity of the value chain on goods is very different.

Patricia Stephenson (Social Democrats)
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Yes, but going back to that piece, they should be monitoring this.

Mr. O'Brien said before that many of IBEC's members - and perhaps all of its members - are horrified by what is happening in Gaza and probably the West Bank as well. With that in mind, there was a report from the UN human rights expert which talked about business activities in illegal settlements and how they enable the denial of self-determination and other structural violations, including occupation, annexation, apartheid and genocide. Many companies have recognised this. Irish companies - again I will not name names - have recognised this and have accepted that trade with settlements could contribute to human suffering. Someone else may have used this intervention earlier - I do not know if it was Mr. O'Brien - and have therefore decided themselves to donate the profits they have made from the illegal settlements to humanitarian activities. This is something we all applaud but of course, we would prefer for them to not engage in settlements in the first place.

Within that context, would IBEC agree trading with the illegal settlements leads to grave human rights violations?

Mr. Fergal O'Brien:

We have identified some companies have made the decision, as the Senator has laid out. We do not have a view on what trade with the occupied territories means regarding individual company decisions. That is not something we have a collective view on.

Patricia Stephenson (Social Democrats)
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When I talk about this whole thing of trading with the illegal occupied territories - illegal under international humanitarian law - where there are violations, an apartheid state and genocide ongoing, would IBEC not say it is enabling those states through any type of trade?

Mr. Fergal O'Brien:

Businesses will try to comply with the law of the state where that law is clear. Other companies make individual decisions for whatever reason.

Patricia Stephenson (Social Democrats)
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Would IBEC accept grave human rights violations are happening in those places?

Mr. Fergal O'Brien:

I joined the committee here today to discuss what we see as the business and economic impacts of the Bill. We are not in a position to give a view to the committee because I know it has heard from other witnesses as to what the human rights and other issues are in the occupied territories. It would not be appropriate for us to comment and give that view.

Patricia Stephenson (Social Democrats)
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Would IBEC's members also sign up to or align with the UN business and human rights principles?

Mr. Fergal O'Brien:

Yes, many of them do.

Patricia Stephenson (Social Democrats)
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I am out of time, thank you.

John Lahart (Dublin South West, Fianna Fail)
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Is there anything Mr. O'Brien did not get to say or does he wish to make any concluding remarks?

Mr. Fergal O'Brien:

No, but I thank the Chair and welcome the opportunity to have joined the committee this evening. As I said, we recognise this is a challenging and difficult issue. It is important, however, in addition to everything else the committee is considering, that it looks at the economic and potential employment implications of this and whatever legislation the Oireachtas aligns on, that it would be straightforward for businesses to implement.

John Lahart (Dublin South West, Fianna Fail)
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We have made a couple of requests of Mr. O'Brien and IBEC. He might bear in mind the reporting deadlines we face. If he could get that information to us as quickly as possible, we would really appreciate it.

Mr. Fergal O'Brien:

We will do our best, Chair.

John Lahart (Dublin South West, Fianna Fail)
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Thank you. As I said, Mr. O'Brien was the only solo witness we had and I thank him for his answers, presentation, frankness and overview of the challenges he sees.

To all the members, the clerk, all the committee-related staff, the facilities people who kept us all on mic and live and for those watching at home - in their thousands no doubt - this meeting is now adjourned sine die.