Pat Gallagher (Donegal South West, Fianna Fail)

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:

"—notes that Ireland has in place a full body of employment rights legislation which covers the workplace relationships between employers and employees;

—notes there is no question of employment rights being in free-fall as they have a sound legislative foundation, active compliance systems and robust institutions for adjudication on rights and resolving disputes together with broad social support;

—notes with concern the initial reluctance of Irish Ferries to engage with the industrial relations machinery of the State and reminds the parties that our dispute settlement system is based on engagement with, and respect for, our adjudication and dispute settlement bodies — to do otherwise only exacerbates the situation;

—notes that the institutions of social partnership will continue to contribute to the attainment of agreed goals and that they played a role in ensuring engagement with the Labour Court and the Labour Relations Commission — a process which the Government would urge all parties to participate in fully;

—endorses the actions taken by Government to date in supporting the Irish maritime sector;

—calls on Irish Ferries to reconsider its proposal to outsource employment on its Irish Sea routes and to examine alternative viability options for these routes;

—notes the applicability of national and international maritime law in the area of ship registration and the Government's current consultation on ship registration legislation;

—recognises the importance of shipping in the handling of Ireland's imports and exports and the high cost to the economy of any interference with our strategic shipping services; and

—notes the Government's intention to request the Irish Maritime Development Office to carry out a thorough evaluation of the results of existing strategies to promote the Irish maritime sector, including the successes achieved to date and the issues to be addressed going forward, particularly in the light of recent developments, and to make recommendations accordingly for consideration by the Government.

Molaim an leasú thar ceann an Aire Fiontair, Trádála agus Fostaíochta, an Teachta Micheál Martin. I wish to share time with my colleague the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Killeen.

I wish to reiterate my serious concern at the current action being taken by Irish Ferries. The company's proposal to make 543 of its seafarers redundant, or have them operate under reduced pay and conditions, is undoubtedly very distressing for all the workers concerned and their families.

I am delighted that SIPTU, the Seamen's Union of Ireland and the company, are in talks under the auspices of the Labour Court. I would not want anything said in the House this evening to in any way prejudice these discussions.

It should not be forgotten that there are two sides to this dispute. From briefings provided to me by the sector's statutory development body, the Irish Maritime Development Office, I am aware of the commercial pressures on all shipping companies to reduce their costs and streamline their operations. It is not for me to seek to determine an independent shipping company's business strategy. My goal is to get Irish ship operators the best possible operating environment to support the company and its employees.

Maintaining and increasing Irish seafarer employment has been a focus of the Government. We established the Irish Maritime Development Office to provide our shipping and shipping services sector with a dedicated, statutory development office. The IMDO operates like a mini IDA and helps my Department to make a case to Government on the sector's behalf.

The Government has also set up a new €51 million national maritime college to train our merchant marine and Irish Naval Service cadets. Students pursuing careers at sea can now obtain qualifications or degrees in Europe's most modern nautical college. Together with the National College of Ireland's International Maritime Studies Institute, which opened in 2004, and which is based in the Irish Financial Services Centre in Dublin, the new maritime college will help Ireland to develop as a choice location for shore-based maritime activity. In that regard, the European Commission is taking an increased interest in boosting employment in the Community's maritime sector. The Commission recognises that professional mariners often progress from active sea service to shore-based jobs that require maritime experience.

In recent years, the Government has introduced a competitive tonnage tax and relief in the income tax and social insurance areas to make it easier for ship operators to employ Irish seafarers, and to increase the take home pay of seafarers working at sea for more than 161 days a year.

Some Deputies are aware that one of our relief schemes, the employers' of seafarers PRSI refund scheme, ended on 31 December 2003. The scheme refunded employers of such seafarers their PRSI contribution for each of its seagoing employees. The reintroduction of the scheme required the agreement of the Ministers for Social and Family Affairs and Finance and the co-operation of the Department's mercantile marine office.

In December 2004 agreement was reached that the scheme should be reintroduced with effect from 1 January 2004, for a period of seven years. Commission approval for the reintroduction of the scheme, under the 2004 Community guidelines on State aid to maritime transport, is expected to be received in the next few days. I am confident we will receive that approval given that the European Commission is anxious to ensure a European seafaring sector and advocates such schemes. Accordingly, there will be no break in the scheme's application from the end of December 2003 for a further seven years.

I have asked the Minister for Finance to consider the introduction of additional State aids for the sector. I recognise the limitations of such aids in making ferry operations more competitive. State aids in the income tax and social insurance areas do not address on board work practices or manning requirements. They do not remove competition from low-fare airlines or prevent a reduction in passenger and car traffic. In recent times the ferry sector has been particularly hard hit by the loss of duty free sales; these sales cushioned the sector against operating cost increases and reduced business.

We all recognise how essential it is that Ireland has modern quality ferries to service our key trading routes, particularly the Irish Sea routes and the routes to the Continent. Given that more than 95% of our trade is carried in ships, we are particularly vulnerable if those shipping services are curtailed. It would be regrettable if any form of industrial action were to jeopardise the economy by hindering our imports and exports.

Where ships are registered is less important than in the past. Ireland's marine survey office regularly inspects ships calling at our ports to ensure their compliance with applicable international safety standards. That addresses the point raised by Deputy Ryan. The marine survey office supports State control and inspects ships without fear or favour irrespective of which flag they are flying.

The living and working conditions of seafarers on those ships are regularly inspected by our port State control officers. These officers check, inter alia, that the ships they inspect are in compliance with the current main international labour organisation conventions, covering such matters as the provision of food supplies; cleanliness of galley and storage spaces; arrangements for holding, making and storing water; catering arrangements; accommodation spaces; ventilation, heating and lighting; sanitary facilities; that hospital accommodation is adequate, if required; medical certification; shipboard working arrangements; and seafarers' hours of work.

There is no question of sub-standard shipping being allowed to operate into and out of Irish ports. The Irish Maritime Development Office has estimated that the shipping services sector in Ireland has more than 8,000 employees, and contributed about €1.45 billion to the economy in 2004.

The sector covers not just the activities of our ship operators, but supports onshore activities in such areas as freight forwarding, ship broking, insurance, financial and legal services.

In recent days the possibility of an EU initiative being used to address the current seafarer pay and employment issue was mentioned. There is no EU directive on the manning of regular passenger and ferry services operating in and between member states currently in force or being considered at present by member states. If the Commission was to initiate such a proposal, I would have no difficulty with that and would give it careful consideration.

In 1998, there was an EU Commission proposal, COM/98/0251, concerning a Commission communication on a common policy on manning regular passenger and ferry services operating in and between member states. A key provision of the Commission's draft directive was its Article 2.2 which states that if the vessel used is not registered in a member state, the terms and conditions referred to shall be those applicable to the residents of one of the member states between whose ports the service is provided and with which the service has the closest connection and that the closest connection shall be determined on the basis of the place from which the service is effectively managed.

The European Parliament approved the proposal in March 1999. The Commission issued a revised proposal in 2000, COM/2000/0437. However, no final agreement was reached in the Council of Ministers on the matter and the Commission formally withdrew the proposal in August 2004.

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