Thursday, 16 November 2006
Industrial Development Bill 2006: Second Stage
John Ellis (Sligo-Leitrim, Fianna Fail)
This Bill gives me an opportunity to raise some issues relating to the area I represent, particularly recent Glanbia decisions and the Green Isle food plant in Boyle. Glanbia, despite being a public company has totally abdicated its responsibilities with regard to the plant it took over from the Hanley family in Rooskey some years ago. Once the fire took place there and the decision was made not to rebuild it, Glanbia decided to take the proceeds of its insurance claim, to which it was entitled, and use them in its operations elsewhere in the country.
The final straw for the people in the area came this week when the cannery which had operated since the fire, and provided 85 jobs, was closed. We should examine the options that were open to Glanbia. It is a public company that operates in the agri-sector which means it should have some responsibility to people in rural Ireland. In the case of Rooskey, Glanbia had the opportunity to support a management buy-out that would have continued to run the plant as a going concern. The board decided it would not support this option and I would appreciate if it would give the details concerning how this decision was reached. The management buy-out was critical to the development of the business and I believe Glanbia has been trying to run down the business for the past 12 to 18 months. Questions must be answered as to why the buy-out was not supported and jobs saved.
In the wake of the fire at the Glanbia plant Rooskey saw the loss of 500 jobs leaving only 85 in the cannery. I feel the State agencies would have supported the management buy-out to develop the business but it is obvious Glanbia decided selling the property would be preferable to maintaining the business. I feel this is wrong because the project would have had a future if the buy-out, which was supported by a Dutch company, had received Glanbia's support. I suggest Glanbia make the site available to Enterprise Ireland to seek an alternative industry serving the people in the area. If it does not do so Glanbia must explain why it will not consider the management buy-out. I believe the option is still there and, if taken, could save 85 jobs.
Some might say 85 jobs is not a significant number. However, 85 jobs in Roscommon, Leitrim or anywhere in rural Ireland is probably equal to between 400 and 500 in one of our major cities. The effect of the loss of these jobs on the local economy is frightening and we have seen the effect of the fire which saw the loss of over 400 jobs. It is easy to say redundancy will be paid and other opportunities will arise but we are talking about people with skills relating to the meat industry, such as boners. Such skills may not be easily redeployed as new opportunities arise.
Boyle saw a similar situation recently when the Green Isle plant closed with the loss of 80 jobs. Despite the best efforts of all involved, nothing has been done regarding the provision of alternative employment. Enterprise Ireland, in conjunction with Roscommon County Council, the local chamber of commerce and other voluntary bodies in the town, is seeking an alternative industry for the area.
Both cases concern projects that received substantial State aid and it may be necessary to examine the period a company must remain in a region to qualify for such support. If a company decides to relocate, the State should recoup a larger amount than it currently does in such circumstances. If something is not done on this issue the agri-based industry in the country will suffer. The co-ops were producer friendly but the public limited companies, PLCs, in question nowadays are anti-producer and every reduction in price comes at the expense of the primary producer. The farming organisations and interest groups must remain vigilant to ensure primary producers receive a reasonable price.
The arrival of the PLCs has not been in the best interests of producers because they are driven solely by the profits they create for shareholders. I accept rationalisation must take place in certain industries but not with primary producers and workers bearing the brunt of cuts because they have always been the first to lose out as PLCs focus on the bottom line.
There is a need for balanced development. Major developments are taking place in cities and many areas of rural Ireland are finding their lifeblood drawn there. Some rural communities are suffering due to a lack of employment opportunities, particularly for graduates. Our rate of third level education is extremely high and we produce a large number of graduates every year who rarely return to the community from which they came. Graduates tend to join companies based in our large cities and towns. Enterprise Ireland and the Industrial Development Agency should seek projects, perhaps small ones in some cases, that can grow in rural areas. Most areas now have broadband and the necessary developments which allow businesses operate. Our infrastructure has improved a great deal and I can now safely drive from Dublin to Carrick-on-Shannon in less than two hours due to the new N4 road which bypasses several towns. In that context, there is no reason this region should not be considered as attractive to major industrialists deciding to locate here as our major cities. The area also has the advantage of being less than one hour from Sligo and Knock airports. Enterprise Ireland and the Industrial Development Agency are not pushing companies to locate in areas which are regarded as peripheral because they are more than one hour from an international airport. In the case of south Leitrim, however, Knock International Airport can be reached in only 50 minutes. Enterprise Ireland and the IDA must ensure they achieve regional balance in terms of the location of new jobs.
While we all accept the market for attracting inward investment has become much more competitive, Ireland still has considerable advantages over other countries as regards industrial development. Corporation tax rates are the lowest in Europe, the wage system is attractive and the personal tax system is the envy of many other countries. We should be able to encourage inward investors to locate in areas some distance from Dublin, Cork, Limerick or Galway.
In levelling criticism it is also important to applaud success. My constituency has successfully attracted a number of major companies. Masonite, for example, established operations near Carrick-on-Shannon in the mid-1990s. This was the first large investment in the area by a non-indigenous company in my lifetime. It has made a major contribution to the economy and workforce and should be complimented on the way in which it runs its business and on successfully expanding its operations.
In the past ten years, productivity has significantly increased. The recent Forfás report entitled, Overview of Ireland's Productivity Performance 1980-2005, would make good reading for many people. The report stresses the need to improve productivity and notes that Ireland has enjoyed substantial economic growth since 1990. It states that whereas growth in other OECD economies over the same period was driven more by increases in productivity than employment, Ireland's growth has been built on gains in both areas. Productivity increases, it argues, must be the key driver of future growth.
Upskilling will be required to deliver increases in productivity and incentives must be introduced to ensure people receive the necessary training to upgrade their skills on a continual basis. While the economy continues to achieve significant annual rates of growth, much of our employment continues to depend on the manufacturing sector, which is finding it increasingly difficult to compete with companies from eastern Europe and the Far East. For this reason, Enterprise Ireland and other State agencies must provide funding for upskilling. FÁS has done much good work in upskilling people but this issue must be examined in the context of future economic development.
The most significant recent industrial development in south Leitrim and north Roscommon was the decision by MBNA to locate in Carrick-on-Shannon. Recently acquired by the Bank of America, this credit card company employs approximately 1,100 people in a town with a population of approximately 4,500 people. It is, therefore, a major employer in Carrick-on-Shannon and the surrounding district. We must support efficient companies such as MBNA because they provide employment for our highly skilled young people. I appeal to Enterprise Ireland and the IDA to try to attract other companies offering similar employment to locate in the area. The region has the advantage of third level IT colleges in Sligo and Athlone and a number of smaller third level colleges elsewhere, all of which produce highly skilled graduates suited to this type of employment.
It has been suggested that MBNA plans to move into the insurance business. I appeal to the company to consider establishing its base in my region. Its experience in the area has been good and local people have been supportive of its efforts.
In discussing industrial development, we overlook another major sector, namely, tourism. It is argued that tourism is the main prospect for certain rural areas. Tourism Ireland, the Minister for Arts, Sport and Tourism, Deputy O'Donoghue, and others have done their utmost to support tourism programmes and promote projects. For example, the tax incentives available for the provision of hotel accommodation were welcome and made a significant contribution. In my constituency, however, tourism projects are facing a new problem. In Boyle alone, An Bord Pleanála has refused permission for four or five major tourism projects for minor reasons, including, in one case, the presence of bats. The proposed €250 million investment in question would have created major opportunities for Boyle and the Lough Key area. An Bord Pleanála's decisions send out the wrong signal to those who want to invest in tourism. They will result in additional investment in areas that are already over-subscribed in terms of tourist numbers and in which planning is not an issue. Tourism projects that would make a major contribution should be fully supported by all State agencies. As we are all aware, one individual can overturn the best laid plans for developing projects.
The problem of objectors also applies to industrial development. The not in my back yard — NIMBY — attitude has played a major part in many proposals for industrial development. The consultation process must be weighted against opponents of developments because we cannot afford to allow international or national companies seeking to expand their operations to be held to ransom by objectors using the planning process. In recent years, a number of major projects have been delayed by objections lodged with An Bord Pleanála, the national courts and the European Court of Justice. The most prominent of these was probably the repeated delays to the M3 motorway project. While the objectors finally raised the white flag, they did so only after they had added significant costs to the project. Delaying the construction of an infrastructure project by three years will probably double its cost. It is unfair that people can lodge objections and hold up progress without being required to make a contribution towards the cost of the delay they cause. This tactic has been used to delay other projects and prevent the development of infrastructure which will give opportunities to peripheral areas to develop and become attractive for industry. The Minister has taken an initiative in Glanbia in Rooskey but we still face the serious situation where many agri-based projects find the processing industry is controlled by PLCs, which is having an adverse effect.
We support the Minister's efforts in this Bill but the Departments, Enterprise Ireland and IDA Ireland must look at the regional areas that have suffered most due to population decline and a lack of industrial development. They must seek out projects to replace those indigenous projects that are vulnerable in the global economy today.