Noel Treacy (Galway East, Fianna Fail)

I move: "That the Bill be now read a Second Time."

I am pleased to bring the European Communities Bill 2006 before the Dáil. It is a short and technical Bill in one sense, but it has an important national purpose. It will ensure the arrangements which we use to transpose EC law are effective and fit for the purpose in a changing Europe. I am sure all Members will agree it is vital we meet our EC treaty obligations. That is the only way we can continue to deliver to the Irish people the full benefits that derive from EU membership of the European Union. The Bill passed all Stages in the Seanad before the Christmas recess. I thank Senators for their contributions and co-operation in those important debates and look forward to discussing the Bill with my colleagues in Dáil Éireann.

The Bill arises from the serious implications of two Supreme Court judgments, Browne v. Attorney General and Kennedy v. Attorney General. In both these cases the Supreme Court found that a statutory instrument to give effect to European Community law can only be validly made where the Oireachtas has specifically provided for this in the relevant primary legislation.

The Attorney General has since advised that new legislation is needed to change the manner in which we have been transposing European Community law using secondary legislation. The Supreme Court judgments mean that some of this body of legislation built up since 1973 is susceptible to legal challenge. This means that hundreds of statutory instruments made in the best faith over three decades by dozens of Ministers from the Fianna Fáil, Fine Gael, Labour and Progressive Democrats parties under powers given to them by Acts of the Oireachtas may be in doubt. The Attorney General has advised the Government that there is a need to address the circumstances in which we find ourselves arising from the two Supreme Court judgments.

Since 1973, the European Community treaty has obliged Irish Governments to transpose Community regulations, directives and decisions to translate Community law into Irish law. Where major policy changes have been required by Community membership, we have used primary legislation which has been debated and passed by the Oireachtas. However, the bulk of the routine transposition work has been implemented by Ministers and their Departments using powers to make statutory instruments which are set out in domestic legislation. The Supreme Court has ruled that if the domestic legislation did not contain specific powers to make these European Community related statutory instruments, the relevant instruments are open to challenge.

In light of the Attorney General's advice to the Government, we need to remove any doubt surrounding the manner in which the Government gives effect to EC law via secondary legislation. The Government needs to validate, as necessary, those statutory instruments, introduced by all Governments to transpose Community law since 1973, which are affected by the two judgments to which I have referred. We need to act with the support of the Oireachtas to ensure we can transpose EC measures via secondary legislation in a manner that is consistent with the court's judgments. It is only fair to citizens that we get this important process right and have a transparent and effective procedure in place to meet our Community obligations.

Before discussing further the reasons for the Bill, I will set out its six key provisions in order that Deputies can see precisely what we are dealing with. Section 1 sets out the relevant definitions. I will table a minor clarifying amendment to this section on Committee Stage. The amendment is necessary to clarify that the definition of the words "European Act" includes not only entire directives and regulations but also individual provisions of such directives or regulations.

Section 2 will give Ministers of the Government the power to create indictable offences in regulations made pursuant to the 1972 European Communities Act, where the Minister deems such a sanction to be necessary to fully implement the Community instruments being transposed. The Bill provides for a maximum fine of €500,000 and maximum term of imprisonment of three years. I underline that these maximum penalties will be imposed only after due process has taken its course in the prosecution of an offence.

Section 3, the core of the Bill, is in four Parts. Section 3(1) will permit statutory instrument-making powers contained in existing primary legislation to be used to give effect to a European Community law in this jurisdiction. Specifically, the provision will allow the regulation making power in any Act of the Oireachtas to be used for the purpose of implementing Community law provided the domestic Act deals with the policy area covered by the Community obligation in question. I am sure the House will agree that it is entirely sensible that legislation passed for domestic purposes can also be used for the additional purpose of giving effect to Community law in the same policy area governed by the Act.

Section 3(2) takes account of the primacy of European Community law which the people of Ireland endorsed when we decided to join the European Economic Community in 1972. The section repeats the existing provision in the 1972 Act, which allows regulations made for the purpose of giving effect to Community law to amend primary legislation where this is necessary to give full effect to the Community measure. The Attorney General has advised that this provision must be replicated to allow statutory instruments made under the new dual purpose power, which I have outlined, to amend primary legislation, where this is required by the EC instrument being implemented.

Section 3(3) will enhance the transparency of the implementation of Community legislation into Irish law by requiring a statutory instrument which gives effect to a Community law to refer specifically to the Community law in question. In other words, the statutory instrument being used to give effect to a particular Community measure must refer specifically to the measure in question. We hear a great deal about better regulation and transparency. This approach is a sensible way of clarifying the purpose of the legislation and the manner in which the Irish law relates to the European Community legislation.

Section 3(4) confines the regulation-making powers contained in the Bill to Ministers of the Government. This is a further important safeguard to ensure these powers will only be used, where necessary, by members of the Cabinet and not by officials without Government oversight.

Section 4 will confirm the validity of the many regulations giving effect to Community law, which have been already made under a domestic regulations-making power. The section protects the body of Community law introduced through secondary legislation upon which doubt has been cast by the two Supreme Court judgments to which I have referred. I assure the House that this confirmation shall not affect the constitutional rights of any individual.

As Minister of State with responsibility for European affairs, I will comment on the benefits of the Bill which will significantly modernise our method of transposing our Community obligations into Irish law. Following the historic decision of the people of Ireland in the referendum of 10 May 1972, the Houses passed the European Communities Act of 1972, the principal legal instrument for implementing Community law. In a fundamental change to our legal system the Act provides that the treaties governing the European Communities and existing and future Acts adopted by the institutions of the Community shall be binding on the State and part of domestic law.

The European Union of 27 member states is radically different from the Common Market of six countries which Ireland, the United Kingdom and Denmark joined on 1 January 1973. At the time of the passage of the 1972 Act the scope of EC law was relatively limited. Let us recall that this was a time before the Internal Market when key sectors of the modern European economy, such as information technology and financial services barely existed. In the intervening years the European Union has evolved into a unique political organisation governed by European law, which brings significant economic and social benefits to people in the newly united Europe.

We are all aware of the positive impact of European Union membership on Ireland. The country has changed for the better during the past 34 years. We can all agree that Europe has been a key factor in our tremendous development as an economy and a modern nation. However, the European Union can only work if member states implement Community law and decisions in a reliable and consistent manner. The rules must be the same for everyone.

Last week, Commissioner Charlie McCreevy made an interesting point on this very issue when he stated the Single Market is a joint venture between the European Union and its member states and it is the job of the latter to translate Single Market rules into national law. The Commissioner pointed out that member states do not legislate in response to some arbitrary deadline or target set by the European Commission but agree Single Market laws among themselves alongside timetables for putting laws into practice domestically. These comments accurately summarise the equal responsibilities on all member states to make Community law work on a daily basis in national jurisdictions.

The European Union is a rules based organisation acting for the common good. Small countries such as Ireland have much to gain from such an environment, which provides protection for our interests over and above what we could ever have achieved acting alone. The treaties require us to uphold the rules at national level and to provide sanctions against breaches of those rules here in Ireland. The Browne and Kennedy judgments, however, create a significant gap in our current procedures for doing so. As it now stands, we do not have adequate provisions for the creation of sufficiently strong penalties for breaches of EC law in secondary legislation. We could use primary legislation in each case but this would tie up the resources of the House on routine EC issues, leading to unimaginable delays and increasing the risk of exposing the State to significant fines.

We need to be able to continue to use statutory instruments to transpose EC law, as we have done since 1973. However, we must do so in line with the Supreme Court judgments and in an effective and transparent manner. Therefore, the Bill before the House provides for the creation of indictable offences through secondary legislation where necessary. There will be people of good faith who will question the need for this move. They may ask the reasons indictable offences were not provided for in the European Communities Act 1972 and whether it is now really necessary to give Ministers powers to create such offences in 2007. The answer is crystal clear. The Supreme Court judgments mean that the current arrangements can no longer continue. Specifically, we can no longer use domestic legislation, which creates indictable offences for breach of regulations to give effect to EC laws, unless that domestic legislation permits us to do so. Therefore, the gap in the 1972 Act needs to be addressed so that Ministers can create appropriate penalties, where necessary, without recourse to primary legislation on every occasion.

Regarding the penalties provided for in this legislation, a Minister will only have a limited power, in regulations made under the 1972 Act, to make provision for indictable offences, where necessary, to meet our treaty obligations. Only where this is necessary, the Minister must operate within the parameters set down in section 2 of the Bill, which provides for a maximum fine of €500,000 and a maximum term of imprisonment of three years. These are by no means the most severe penalties the Houses of the Oireachtas have created by way of statutory instrument. They are reasonable and proportionate.

These penalties are the maximum ones which apply on conviction in the Circuit Court. Anyone indicted on foot of secondary legislation arising out of this Bill will be entitled to due process under the Constitution, with all the normal legal safeguards. Secondary legislation adopted under the Bill will be carefully calibrated, in the same way as all of our legislation. That is to say, the level of penalty in regulations passed to transpose EC measures will have to be proportionate and commensurate with the seriousness of the offence, clearly fulfilling the principle of subsidiarity. Serious penalties would only be provided for where these are necessary. In practice, most breaches of EC law would continue to be covered by summary offences.

The Bill relates to the implementation of routine Community directives and day-to-day regulations into Irish law through secondary legislation. It is worth noting that Ireland has implemented over 2,700 Internal Market directives during our membership of the European Union. There are likely to be thousands of such routine pieces of legislation as the Internal Market develops further. I assure the House, however, that any major and fundamental changes in Irish law arising from our EU obligations will continue to be effected through primary legislation passed by the Dáil and Seanad. This is the way we have always done business since joining the European Union and there is no intention to change that situation now.

In some cases, EC law deals with important areas of policy, such as agriculture, customs and excise, financial services and banking, which have a direct impact on the common good. The treaties require proportionate, effective and dissuasive penalties for serious breaches of European law in such areas. It is only right that we safeguard the common good and provide deterrents against breaking laws from which Irish people benefit so significantly. Were we, however, to use primary legislation in all cases, this House would have to sit 365 days a year and debate nothing else but EC laws to implement the wide range of our EU obligations.

Since the Seanad debate, some public comments seem to suggest that EC law is imposed on us from the outside. Nothing could be further from the truth.

See this speech in context