Richard Bruton (Dublin North Central, Fine Gael)

In principle, I welcome the provisions of this Bill, which build on EU initiatives in this area. Clearly, it is important for public health and safety that there be a robust regulatory system. I understand the changes in the Bill are based on regulations pertaining to the same REACH provisions as those on which the principal Act were based, but it introduces obligations with regard to labelling and packaging. This will provide extra protection and is to be welcomed.

What surprises me is that there is no regulatory impact statement accompanying this Bill. I understood it was Government policy that such a regulatory impact statement would be introduced for any new regulation that imposed compliance costs on industry. The parent initiative, the original REACH directive, placed substantial obligations on Irish industry with an estimated cost of €450 million. It seems strange that the Minister of State would not advert to the cost to industry of this measure. Just because a measure is worthy does not mean the House should not be informed of its regulatory impact. We would not advocate the withdrawal of this Bill, but we have learned from past experience that Ireland, in its desire to be a good European citizen, introduces legislation in a way that is quite inflexible and imposes unnecessary costs on industries that must comply. At this time, when small and large businesses alike are struggling under the pressure of the recession to retain employment, we should be hearing assurances from the Government that the compliance cost and the effect of the implementation of the directive have been minimised. However, it seems the Government is not in this instance complying with its own principle of providing regulatory impact statements.

The Minister of State indicated that the implementation of the provisions would involve no cost to the Exchequer. If there are additional responsibilities involved, a zero cost estimate seems surprising to say the least. However, we must take it at face value that something else will make room for it, or that it will be done in co-ordination with other work.

The Minister of State rightly adverted to the need for co-operation across agencies to avoid the creation of significant compliance costs, and drew the attention of the House to a section 5 amendment that encourages such co-operation. However, as I read that section I see that this is not a new initiative but is very much the existing approach. We should go back and read the advice that has come to us from the National Competitiveness Council, a sister organisation of Forfás, to whose work the Minister of State referred glowingly. The Forfás report Driving Export Growth: Statement on Sectoral Competitiveness states:

There is a perception that the implementation in Ireland of EU legislation such as the REACH Directive goes beyond the standard requirements and places Irish based firms at a disadvantage. There is also a concern that Irish regulatory authorities may not always give sufficient recognition to the competitiveness implications of the legislation they develop and enforce.

It goes on to state:

Identifying best practice in the application of EU legislation (e.g. the REACH directive) by other member states will help ensure that the implementation of EU legislation in Ireland does not present a competitive disadvantage to Irish firms. The NCC recommends that relevant Government departments, agencies and sector representative groups monitor the application of EU legislation elsewhere to ensure that the Irish interpretation and implementation, while meeting the required standard, does not place an unnecessary or excessive burden on the Irish chemicals and pharmaceuticals sector.

The Minister of State did not mention in his speech the extent to which that recommendation is being acted upon, yet we have come to the House to propose additional burdens under this legislation, worthy though they may be. We have not heard any assertion from the Minister that this is the least costly approach or that other EU countries are not doing it in a different way. These are important principles at this time. The document to which I referred is an important one which identifies bottlenecks in Ireland that might prevent the development of key sectors, one of which, as the Minister knows, is the pharmaceutical industry.

I read in the Financial Times, apropos of the transposition of the REACH directive in the UK, that the Secretary of State for Business, Innovation and Skills, Vince Cable, in a letter to senior officials at the European Commission, has called for the phasing in of some aspects of the new rules to be postponed to avoid disruptive knock-on effects on large sections of industry. The Minister of State might comment in his response on whether we are being over-diligent European citizens, applying rules that some of our competitors and colleagues are taking the opportunity to drag their feet on. Some of these regulations have long transposition times, while others have shorter times. The Minister needs to be alerted to these issues.

The report from Forfás that I mentioned earlier expresses concern that regulation could hamper development in the pharmaceutical and medical devices sector. They are very critical of the obstacles placed in the way of research and development in these sectors in Ireland, by virtue of the very complicated system for operating clinical trials. They point out that significant delays are being experienced by companies in establishing clinical trials in Ireland for medical technology and pharmaceutical products. They state that the delays primarily arise from the need to obtain ethics approval from each participating centre in multi-centre clinical investigations and sequential review processes, whereby Irish Medicines Board approval can only be sought after approval is obtained from the relevant ethics, rather than in parallel. They state that this is a significant development opportunity where an Irish based plant can capture the development and pilot stage of new devices if we are in a strong position to apply the clinical trials and develop them.

Here we have recommendations to the Minister of State's Department about how we need to streamline processes and open up opportunities. While the Department pays lip service to the need to remove regulatory obstacles, and set a target three years ago valued at €500 million, it can only report progress on 4% of this target. The Department has to get its finger out. Is it serious about unnecessary regulatory burdens? Forfás has given us specific examples where this has held back opportunities. Deputy Penrose had an interesting presentation at his committee from some of those medical device companies, who spoke about this sort of problem.

This is probably a fairly pedestrian Bill, but we really have to wake up and smell the coffee. The reality is that we cannot rely on these sectors. They are in a very competitive environment and we have to make sure that we anticipate the pressures that will be put on. When bodies that study these sectors for opportunities and players in the sector tell us that we need to move on these things, we need to sound a red alert to those agencies involved. The Minister of State's Department has volunteered to champion the cause of reducing unnecessary burdens, but it is not producing the goods. There are many things the Department cannot influence, such as the state of economic growth, the state of external markets and so on. However, what I have outlined above are things that we can influence and the Minister of State has set out that he is determined to do so, but is not delivering.

The annual output statement would be one of those areas where the Minister of State might be looking for progress on last year. However, compliance burdens got no reference whatsoever in the statement. It was not even mentioned that the Government had made this commitment. What are we to make of a Department that claims in front of industry leaders that it will deliver on this big issue, but when setting its own internal targets, is entirely silent? It is a Department that has lost touch with what exactly are the pressures on business at the moment. The Minister of State and his Department have to regain that touch because we are in such dire straits that we have to sweat every asset in this time of crisis.

While I welcome this Bill, the Minister of State could be doing much more work to remove bottlenecks that hold back sectors in Ireland that other countries would give their proverbial right arm to have, such as the pharmaceutical and medical devices sectors. They are strong clusters. They provide great opportunities. They have difficulties in seeing the flow of new products coming forward for different reasons, and we need to position ourselves to make that an easier process. I ask the Minister of State to have a look at those issues that I have raised and see how his Department can become more engaged.

The new strategy statement to recognise new ministerial appointments was due in the middle of September, but I gather it has been held back to be checked out by other Departments, which may or may not be reasonable. I would like to see some hard statements saying that in the first year, the Government will be delivering €150 million of that €500 million in compliance cost reductions. The same is true for other areas where the Minister of State has taken responsibility upon himself to implement the competitiveness reform agenda. We need to see timelines and dates and people being made responsible for their performance against those targets. The public are sick of hearing that bonuses are being dished out even when targets are not being hit. We need to bring back those bonus payments, impose the cuts in pay that those senior officials should have taken, and let them go and earn their bonus payments by delivering on this agenda.

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