Brendan Howlin (Wexford, Labour) | Oireachtas source

One cannot sell trees annually. They do not grow miraculously or pop up overnight. The issue then is whether we should sell them in an incremental way or sell them in advance to get the money the country desperately needs right now. These are the considerations we examined, which is quite proper and appropriate. There would be appropriate conditions attaching, including in regard to the continued public amenity, which is hugely important to every Deputy in the House, guaranteed access to the forests - we will not be keeping out the birds, obviously - replanting obligations, and commitments to minimum and maximum annual harvesting volumes and to ensuring continuity of supply to the timber processing sector. These are all legitimate and real concerns that had to be addressed individually. The Government accordingly agreed in principle, in June of last year, to the sale of the harvesting rights to Coillte forests as the best means of extracting value from Coillte in the short to medium term.

The Government has since continued that process and we have advanced with very great caution in regard to this option. We have undertaken further detailed analysis, carried out by the NewERA entity we have created, which has proven to be a very valuable new oversight body, in conjunction with Coillte itself, the Department of Agriculture, Food and the Marine and my Department to identify the forestry assets involved, determine their value and consider all the range of issues associated with the sale of the harvesting rights.

In addition, a number of detailed financial, technical and other specialist reports have also been prepared for Coillte by external specialist consultancy bodies in full consultation with the board of Coillte and its executive management. Coillte has been integral to this process through the provision of data and relevant background information. As the House is aware, Coillte is a commercial company trading in a competitive environment, so matters relating to the performance of its various businesses and its portfolio are commercially sensitive, and it is, therefore, not appropriate to comment publicly on the analysis taken to date.

The Government is fully conscious of the concerns that have been raised not only by Deputies opposite, although I acknowledge them and accept they are real, but by the general public, recreational groups, the timber processing sector and trade unions. NewERA, the Department of Agriculture, Food and the Marine and my Department are fully aware of the findings of the report by Peter Bacon and Associates, commissioned by IMPACT, containing the "Assessment of the Consequences of the Proposed Sale of Coillte's Timber Harvesting Rights", which was published on 10 January this year. However, the authors of the IMPACT-commissioned report have not had the opportunity to consider the very detailed information available to the State on foot of our due diligence, and its analysis of the potential costs and proceeds from a harvesting rights transaction appears to be based on historical, publicly available information, as well as a number of assumptions in regard to transactional structure and sale conditions that are not necessarily in line with the proposals the Government is currently developing.

This process is complex and I want to assure the House that the Government will continue to proceed with caution. I have already assured the House, in regard to the sale of other State assets, that the Government will ensure that all of the implications of each asset disposal will be very carefully considered with a view to mitigating any potential negative impacts associated with any disposal. In the context of Coillte, this will include the need to ensure the stability of the entire timber industry, which is very important for the jobs associated with the industry, maximising the recreational and biodiversity value of Ireland's forests, where there is greater potential than is currently being exploited, and ensuring the continuity of access to the forests as a public amenity. As with all State asset sales, this sale will only proceed if it makes economic and strategic sense for the Irish people. I give the House that commitment tonight.

I would also like to remind the House of the use to which the proceeds of such asset sales may be put, as provided for under the revised programme the Government has now agreed. As agreed with the troika, half of the proceeds will be available to the Government to fund employment enhancing projects of a commercial nature, with the other half, while destined eventually to pay down debt, also being available in the first instance to constitute a fund to underpin additional lending into Ireland. This is to fund our infrastructure and a stimulus package and to create jobs, and is a creative way of using money.

I have concentrated thus far on the background to, and status of, the State assets disposal programme as it relates to Coillte. However, I am, as is the Government, also cognisant of the importance of the forestry sector to the economy, society and the environment. The motion by the Technical Group highlights some aspects of this contribution, including the numbers employed in the sector, the value of exports by the sector and the job creation potential. I also know that Irish sawmillers have worked hard in recent years to develop new products and markets, and it is encouraging that their efforts, along with those of all of the stakeholders in the sector, have resulted in a vibrant and export-oriented forest production sector.

The State has also been involved in this process as it has made a significant investment in the development of forestry over the last number of decades, primarily through the provision of funding for the afforestation grant and premium schemes and other support schemes operated by the Department of Agriculture, Food and the Marine. This Government has maintained the level of funding for the development of forestry in recent years despite all the economic pressures, which shows a strong ongoing commitment to forestry in Ireland. The outcome of the investment in forestry to date has been increased participation of private landowners in forestry. I understand there is a significant amount of privately owned forestry now approaching first thinning, and in the years ahead more privately owned timber will become available to the market. Thus, the mobilisation of privately owned timber in itself creates opportunities, which the industry, in conjunction with Teagasc, is seeking to maximise.

While Coillte is currently the main supplier of timber to the timber processing sector, it should not be overlooked that the privately owned timber resource will be becoming available over the next number of years. I appreciate that this will be a gradual development but, in time, it should contribute to competitiveness in the supply of timber. My colleague, the Minister for Agriculture, Food and the Marine, in a reply to a parliamentary question last December, stated clearly that the Government will not do anything that will undermine or significantly damage the timber or sawmill sectors in Ireland, and this remains the position.

Another important consideration, which was also mentioned by the Deputies in their motion, is the level of forestry cover in this country. The State, through its funding of an afforestation programme, has facilitated a sizeable increase over the past number of years. In this regard, it should be noted that it is a demand-led scheme, so the planting level each year is determined primarily by landowners and their selection of forestry as an enterprise in which they wish to participate. While afforestation is promoted on an ongoing basis, it is also essential to maintain the existing level of forestry. In order to preserve the forest estate and protect the considerable State investment in forestry to date, it is the policy of the Department of Agriculture, Food and the Marine that forestry plantations must be replanted after clear fell has taken place. On this basis, only general felling licences are issued for normal commercial forestry operations, and under the Forestry Act 1946 such licences carry a compulsory replanting condition. This has resulted in an increase in forest cover from a disastrously low level to 11% at present. I acknowledge that this is still low by European standards, but it reflects a greatly increased level of forestry cover in the past 20 years.

The maintenance and increase of forestry cover in Ireland is also essential for climate change mitigation purposes. Forests play a significant role in mitigating climate change by removing carbon dioxide from the atmosphere and converting it to carbon, which is then stored in the wood and vegetation of trees. In 2008, 2009 and 2010, the net contribution of Ireland's Kyoto-eligible forests amounted to about 8.6 million tonnes of CO2 over the three years. Assuming a carbon cost of €14 per tonne, this represented a significant saving to the Exchequer in carbon credit purchases avoided.

Forests also play a role in reducing Ireland's carbon emissions from the combustion of fossil fuels. The increased use of indigenous wood fuel also offers significant opportunities to reduce Ireland's dependence on imported fossil fuels and contribute to national fuel security. I am mentioning these aspects to illustrate that the Government is very much aware of the economic contribution that forestry makes to our community, both directly and indirectly. The implications of any proposed transaction, whether immediate or in the long term, are being thoroughly considered in that overall context.

The Government is also highly aware of the concerns expressed about possible implications for recreational access to State forests. Given the current emphasis on pursuing a healthy lifestyle and the importance of exercise, it is encouraging to note that significant numbers of the population avail of these facilities and are prepared to bring their concerns to our attention. I reiterate that it is the harvesting rights alone which are being considered for sale and that work has been undertaken to identify potential forests for such a transaction. The level of recreational use is one consideration that must be integral to that selection process. It is the Government's firm intention that appropriate provisions be included in any sale of Coillte harvesting rights to allow for the maintenance of the company's current open forest policy. I underscore that this will be maintained.

In conclusion, I welcome this debate as it gives the Government an opportunity to outline the basis for the decision to consider selling the harvesting rights of Coillte, to give an update on the status of that consideration and to reassure the House and the general public that the Government is fully aware of the concerns and all the issues surrounding such a proposed transaction. I reiterate that the Government will proceed with great caution in respect of this matter and any final decision will take full account of all of the legitimate concerns expressed by the Deputies opposite.

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