Batt O'Keeffe (Cork North West, Fianna Fail)

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

This is a targeted and focused Bill for the purpose of amending section 35 of the Competition Act 2002 to enable the Minister for Enterprise, Trade and Innovation appoint whole-time members, on a temporary basis, to fill current and upcoming vacancies in the Competition Authority. Upcoming vacancies would have the effect of reducing membership of the authority below the statutory minimum requirement and would impede the proper functioning of the authority. As a consequence of recent vacancies which have arisen in the authority, including the departure of the chairperson to take up another position, I have appointed an existing member as chairperson of the authority on a whole-time temporary basis. This appointment ensures that the authority is properly constituted in accordance with: the requirements of the Competition Act 2002 and can carry out all of its statutory functions. The amendment to section 35 of the Competition Act 2002 as provided for in this Bill and the subsequent appointment by me of temporary members will safeguard the integrity of the Competition Authority's workings and decision-making power.

I am concerned that an improperly constituted authority would be unable to fulfil its statutory obligations and that any decisions made by members in such circumstances would be open to legal challenge. Of particular concern are those functions specifically reserved by statute to the authority acting as a decision-making collective body. Those functions are as follows: making a declaration under section 4(3) of the Competition Act 2002 that a specified category of agreement, decision or concerted practice is not prohibited if it complies with the conditions set out in section 4(5); the power to initiate criminal proceedings for an offence relating to anti-competitive behaviour or practices under sections 6, 7 or 26, or for relief in civil proceedings under section 14 or 15C; the power to make a phase two merger determination under section 22; and functions relating to the authority's strategic plan, appointment of staff and annual reports.

Powers are also devolved from the EU to designated national competition bodies, which in Ireland's case is the Competition Authority. It is essential that the performance by the authority of its functions, for example making a decision to either approve or prohibit a merger, be made on a sound legal footing and not be subject to uncertainty as to validity.

Membership of the Competition Authority is currently governed by section 35(1) the Competition Act 2002, which provides that the authority shall consist of: a chairperson and between two and four other whole-time members, as may be determined and appointed by the Minister; a whole-time member appointed by the Minister to cover a period of temporary inability by a member to discharge his or her duties; and such number of part-time members as the Minister may determine and appoint.

Under the 2002 Act the appointment of a chairperson and a minimum of two other members satisfies the statutory minimum membership requirement. However, the appointment of a person to replace a member who is temporarily unable to discharge his or her function or the appointment of a part-time member, as provided for by sections 35(1)(b) and 35(1)(c), do not satisfy the minimum membership criteria.

The authority is currently operating at this minimum level, however upcoming vacancies taken together with some current vacancies, would have the combined effect of reducing the authority's membership below the statutory minimum. The authority has been carrying a vacancy at membership level since January 2009. More recently, the chairperson of the authority resigned with effect from mid-March 2010 to take up the position of Financial Services Ombudsman and two other whole-time members have indicated their intention to leave the authority during May 2010.

As I said previously and following legal advice from the office of the Attorney General, I have appointed an existing member of the authority to the position of authority chairperson. This appointment is for a period of just under six months, at which stage I expect that a chairperson will have been selected for appointment following an open Public Appointments Service competition.

The legal mechanism under the Competition Act 2002 in respect of replacing whole-time members is through the holding of a Public Appointments Service competition. The actual mechanics of advertising, interviewing and then taking into account the need for successful applicants to give some months notice to their current employers - possibly up to three months - means that the entire recruitment and selection process could take a number of months to conclude, during which period I must ensure that the authority can function with the requisite statutory membership.

This Bill will allow for the appointment of whole-time members for a short period to provide cover up to the point when whole-time members are appointed following the holding of a Public Appointments Service competition. The Bill provides that these temporary appointments will be made having regard to the competencies laid down by section 35(5) of the 2002 Act for appointment of members. That provision requires appointees to "have sufficient expertise in or experience of one or more of the following areas, namely - law, economics, public administration, consumer affairs or business generally", thereby ensuring that only suitably qualified and experienced people can be appointed to the authority, even on a temporary basis. The integrity of the authority's decision making power will continue to be protected both in terms of the number and quality of its members. The appointment of members under this legislation will be short term, for a defined period and will conclude when the whole-time members have been appointed under the open competition.

Following enactment of this Bill, I intend immediately to make two appointments to the authority. This will result in membership of the authority consisting of the chairperson and three whole-time members. This arrangement will prevail until successful candidates are appointed from the Public Appointments Service competitions that will be held.

I now wish to turn to the provisions of the Bill and explain what each is designed to achieve. Sections 1 and 3, definition and Short Title and citation, of the Bill are standard legislative provisions while section 2 is the core of the Bill.

Section 2 of the Bill provides for the amendment of section 35 of the Competition Act 2002 to allow for the appointment, on a whole-time basis, of temporary members, including a chairperson, to fill a vacancy occurring in the authority's membership arising from the death, retirement, resignation, disqualification or removal from office of a member. It is envisaged that these temporary appointments will be for a period of up to six months.

The Bill also provides that the Minister may extend this period of appointment for a period or periods up to a maximum of a further six months. It is intended that the provision allowing for an extension to the appointment would only be used in specific circumstances, for example, in the event that the recruitment and selection process is not finalised or the successful candidate is not in a position to take up his or her appointment within the initial six month time period.

As I said earlier, appointees to these temporary positions must, in the opinion of the Minister, possess sufficient expertise in or experience of one or more of the following areas - law, economics, public administration, consumer affairs or business generally.

The Bill will also provide that a temporary appointee remains eligible for appointment, through an open competition, as a whole-time member within the authority, unless he or she has been removed in accordance with the existing provisions of section 35(12) of the Act. That provision permits the removal of a member who has become incapable through ill health of performing his or her duties or whose removal appears to the Minister to be necessary in the interests of the effective and economical performance of the functions of the authority.

Following enactment of this Bill and the making of the necessary temporary appointments, my next legislative priority in this area will be the Bill to give effect to the amalgamation of the Competition Authority and the National Consumer Agency. Since being announced as part of the rationalisation plan for State agencies during the 2009 budget speech, my Department has been working with both bodies to ensure a smooth transition from the two separate entities to a single dual functioning body responsible for competition and consumer protection. As both bodies were established under statute, it is necessary to give effect to the newly merged body by way of primary legislation.

At the time the merger of the two bodies was announced, work on the review of the operation and implementation of the 2002 Competition Act was well under way. The submissions received following a public consultation process were being considered as was the report and recommendations of the advisory group on media mergers. Rather than give effect to the amalgamation of the authority and NCA in stand-alone legislation, to be followed in due course by legislation to amend, reform and update the 2002 Act, it was decided to introduce a single comprehensive Bill that will create the new consumer and competition body; update the existing competition law; strengthen the public interest test in respect of media mergers, in line with the report of the advisory group on media mergers; make some minor amendments to the consumer protection legislation; and give effect to the Government commitment under Towards 2016 regarding the exemption of certain specified categories of vulnerable workers from competition law.

While work on the draft legislation on this basis has been progressing, a number of other developments have arisen which have led to additional requirements in the Bill. The renewed programme for Government contains a specific commitment to implement a code of practice for doing business in the grocery goods sector to develop a fair trading relationship between retailers and their suppliers and to review progress of the code and, if necessary, to put in place a mandatory code. Provision to place a code for retailers and suppliers on a statutory basis will be included in the proposed Bill.

As the House may be aware, efforts are under way to explore with all the relevant stakeholders the possibilities of agreeing a voluntary code of conduct in the grocery goods sector which would respect the interests of all parties. This offers stakeholders the opportunity to develop a voluntary code most suited to the dynamics of the Irish grocery goods sector and which would form the basis is of any subsequent statutory code.

This all-encompassing approach to the draft legislation has to some extent delayed the legislation for rationalisation of the two bodies. I am, however, of the view that we will be better served in the long run by a single legislative measure that both establishes the new body and provides for a combined and updated consumer and competition code with appropriate enforcement provisions being given to the new body.

Work on the draft heads of this Bill is at an advanced stage and I intend to bring these draft heads to Cabinet within the coming weeks. Until the heads have been approved by Government, it would not be appropriate for me to comment further on the specifics contained in the draft heads. Deputies are awaiting its approval and subsequent publication, and indeed may seek to avail of the opportunity of this Bill before us to progress issues contained in the other Bill but I urge Deputies to wait. It is imperative that the Bill at hand be passed by the Oireachtas without undue delay so that I may appoint the members in sufficient time to avoid a reduction in membership levels below the statutory minimum. The matters to be included in the comprehensive consumer and competition Bill will be considered and debated in due course and no doubt in great detail, as is appropriate.

The Bill before us today is a short Bill but for all that an extremely important Bill. I look forward to working with Deputies on Committee and Report Stages and I will be happy to reply to any questions that arise. In the meantime, I commend the Bill to the House.

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