Olivia Mitchell (Dublin South, Fine Gael)

I recognise the urgency of this legislation and appreciate the Minister and those who support the Bill, which received unanimous support in the Seanad, do so with the best motivation and in the belief it is essential the State should take action in the manner proposed. I also appreciate the briefing I received from the Minister's Department. I have examined the record of the debate on the Bill in the other House and acknowledge the arguments that trade, tourism and aviation in general depend on the State providing the indemnity for aircraft hulls from 1 January and later for airports and so on, when and if they are damaged by a dirty bomb.

Those arguments are persuasive and may be correct. However, we cannot know that for certain because all we have at this stage is unsubstantiated opinion. The Bill is being rushed through in the last days of the session with only an hour and a half set aside for a debate. I am loath to support legislation with such important ramifications on the basis of opinion.

On 1 July, a private Irish carrier's hull insurance for dirty bomb damage will be withdrawn. This seems to be the nub of the matter. I have spoken to a number of people involved in aviation and it seems quite common to have exclusion clauses in insurance contracts. For example, radioactivity damage as a result of a nuclear explosion or similar is already excluded. This exclusion has not prevented aircraft from flying and the consequent benefits for thriving business and tourism interests.

The Minister states that insurance for dirty bomb damage is an EU requirement. This seems extraordinary because the insurance industry has decided it is an uninsurable risk, in other words, there is no premium that could persuade it to provide insurance against this type of risk. However, the Government, with no proper debate or scrutiny in the House and without an opportunity for real research, has decided the taxpayer must provide for the €9 billion indemnity risk which the insurance companies are not willing to carry.

Most taxpayers have no idea what is going on here this morning but if they did, they would like to believe it would give us some pause for thought. I appreciate the efforts of the Minister and his officials who have tried, in the restricted timeframe, to brief Members on the import of this legislation. However, questions remain unanswered. Given the magnitude of the exposure for the taxpayer, no questions must be left unanswered and there can be no ambiguity.

Council Regulations Nos. 2407/1992 and 785/2004 require carriers to have insurance. However, Article 55 of Regulation No. 785 states that "in exceptional cases of insurance market failure", which is the case in the current situation, "the Commission may determine, in accordance with procedure of Article 9, the appropriate measures of obligation of an air carrier to provide an insurance certificate". I do not accept the EU can require that an uninsurable risk be insured. If it can do so, the onus in on the Commission to determine the appropriate measures. It has clearly not done so in this case.

Why must we rush in such unseemly haste to provide indemnity? The case in question relates to a private carrier's hull insurance. Why is it essential that the State must provide this type of insurance to a private carrier? It is not the case that lives are at risk. Are other EU member states rushing forward with similar gratuitous indemnity provisions? In the limited time available, I have looked at the websites of other states' transport departments. There is no sign, for example, of Britain providing indemnity insurance. The Minister mentioned Spain's Iberia Airlines has already been affected by this and perhaps such protection was afforded in that case. There is little point in providing dirty bomb cover for an Irish aeroplane over Frankfurt if we do not receive reciprocal cover for a German aeroplane over Mullingar or Tallaght. In short, we are rushing to provide something which is not necessary. At least, I cannot be certain it is necessary or required by the EU. Even if it is necessary, is it affordable or reasonable to require the taxpayer to do it?

As may be read in the small print when one or one's luggage takes a flight, airlines are capable of altering their contracts to exclude cover for certain risks. They already exclude radioactive damage. Of course, should a calamitous event occur, the State would step in. If an aircraft was damaged by a bomb and people were injured or property or the airport damaged, the State would give every possible relief to those affected. That is a different matter to providing an insurance guarantee which is compensatory rather than consisting of the relief which would be given by any human being or the State to its citizens.

The cover is limited to €9 billion for any claim which, in itself, represents an enormous sum. We may pay €9 billion but, seven or eight months later, might be exposed to a further €9 billion when another dirty bomb causes damage. It is conceivable, though I hope it will never happen, that the taxpayer would have to stump up €9 billion repeatedly. I have to ask whether it is wise that we are exposed to these sums of money. Is compensation and airline protection the best way to use taxpayers' money in what would be catastrophic circumstances in terms of insurance and security? It would make sense in one event but would not if such events recurred. Is it the kind of action which is reasonable for the State to take? I am unsure whether it is and I am not even sure the possibility of recurrence has been considered.

My final objection arises from the absence of a fund. The Bill envisages that premia similar to those of commercial insurance companies would be charged by the Government. That is perfectly reasonable, even if some companies do not think them worth paying. If the scheme was to be established, it makes sense that they should pay for it. I realise it would be years before the fund would collect a sum approximating to €9 billion. Bizarrely, however, no provision is made in the Bill for any fund. Charges are simply to be swallowed by the Exchequer. My reading of it is that the money is to be used as the Minister for Finance sees fit. That is a flaw in the Bill. The Minister may not foresee the legislation remaining on the Statute Book forever but that Europe will take over the liability, as it should. That may be why a fund will not be established. I do not know that. It could be a result of the fact that, on the basis of a perceived rather than a real deadline, it is being rushed through without giving sufficient thought to the matter.

I do not want to be difficult on this issue because I am aware much effort has gone into it and a perceived need exists. The public does not have the slightest idea of what we are doing this morning and, I am sure, will not thank me for my comments on the matter, which may interfere with the legislative programme and cause inconvenience. However, the longer I considered this, the less choice I felt I had. I have to oppose it, at least to create time for its consideration. It represents, by any standard, a significant exposure to the State and deserves longer than an hour and a half of ill-informed scrutiny by this House. It is possible that I am being extremely cautious but we have a history of these matters. My memory is of rushed and largely misunderstand export credit insurance legislation. When that was rushed through, everybody considered it a great and essential idea. It came back to haunt us. That affair looms large and gives me pause for thought. For that reason, I want it noted that we made some attempt to give it the scrutiny required of the Opposition and by the House in general.

See this speech in context