Phil Hogan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

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

I am delighted to have this opportunity to introduce the Pyrite Resolution Bill 2013 to the House. The Bill represents a very important step on the road to providing sustainable and workable solutions within a reasonable timeframe for home owners affected by pyritic damage, many of whom have had to endure the stress and practical difficulties of living in homes affected by pyritic damage for considerable periods of time.

Developing the structures necessary to provide for a remediation scheme has proved particularly difficult and, regrettably, has taken much longer than I anticipated. I have always been clear in my view that the parties identified in the report of the pyrite panel of July 2012 as having direct or indirect responsibility for the pyrite problem should contribute to its resolution. Following receipt of the pyrite report, I engaged in lengthy discussions with the identified parties to put in place a framework within which these parties could bring about a resolution of the issue, including an appropriate funding arrangement. I was disappointed that it was not possible to get the parties to agree a voluntary solution and, in the absence of such agreement, I sought and received Government approval for the funding of a pyrite remediation scheme from the imposition of mandatory levies on the quarrying and insurance sectors. Unfortunately, legal difficulties arose during the drafting of the required legislation and it was not possible to proceed on the basis of the Government approval.

While I have always said the State is not responsible for the pyrite problem, a view supported by the report of the independent panel, it would be unacceptable to leave affected home owners without a sustainable solution. Alternative funding options were considered, but for various reasons, none was adjudged to be workable. Having regard to the exceptional nature of the pyrite problem and the circumstances in which it occurred, a scheme funded by the Exchequer was the only sustainable and practical way to provide a solution for affected home owners. In spite of budgetary constraints, the Government recently approved initial funding of €10 million, with additional funding provided from a stimulus package to be agreed early in 2014. This will enable the homes identified as being most severely damaged to be remediated over a two year period.

The Bill before us was passed by the Seanad yesterday evening following a constructive and supportive debate. Deputies should note that the current version of the Bill contains some amendments to the Bill published last week. Many of these amendments are of a minor drafting nature, but I will refer to the more substantial ones. The main provisions of the Bill provide for the establishment of the Pyrite Resolution Board on a statutory basis and the operation of the pyrite remediation scheme. Earlier this year I set up the board on an administrative basis and following enactment and commencement of the Bill, it will be established on a statutory basis.

The report of the independent pyrite panel provides the backdrop for the Bill. The principle behind the Bill is to provide a solution for a restricted group of home owners whose homes are affected by pyrite. The scheme is one of last resort and eligibility will be confined to one dwelling per owner, subject to specified exceptions. The scheme does not apply to housing provided on a commercial scale and dwellings owned by builders or developers who constructed the said dwellings, or persons connected with them, will be excluded from the scheme. The Pyrite Resolution Board will establish priorities for remediation based on the severity of damage and the most economic and effective use of resources. It may also group dwellings in need of remediation together for the purposes of achieving efficiency and cost effectiveness through economies of scale.

One of the key recommendations made in the pyrite report was the categorisation of dwellings as red, amber and green as a means of prioritising the remediation of affected dwellings. The Bill follows this approach by providing for a pyrite remediation scheme for dwellings affected by significant pyritic damage having regard to Irish Standard 398-1:2013. This standard was developed and published by the National Standards Authority of Ireland in response to a recommendation made in the pyrite report. This approach is both practical and sensible. The remediation of dwellings is an expensive and disruptive process and it would be unrealistic to expect dwellings not exhibiting damage to be remediated.

Section 14 of the Bill sets out the detail to be provided in the terms and conditions of the remediation scheme and what the board shall have regard to in setting the eligibility criteria of the scheme. The terms and conditions of the scheme will cover such matters as requirements for compliance with the standard for testing and remediation, scope of works to be carried out and, importantly, the certification required when the works are complete. The scheme will apply to dwellings within the geographical areas identified in the pyrite report where the home owner can establish to the satisfaction of the Pyrite Resolution Board that he or she has no other practicable options to obtain redress other than under the scheme. It is not intended that the financial resources of individual applicants will be considered as part of the assessment of available options, although a number of other pertinent factors will be considered, including the extent of structural warranty cover or other form of insurance cover available to the home owner or legal actions being pursued by or on behalf of the applicant.

Provision is made in the Bill to enable the Pyrite Resolution Board to institute civil proceedings to recover damages or costs from a person whom it believes is responsible for pyritic damage to the dwelling of an applicant under the scheme on foot of any arrangement agreed between the board and the applicant. The Bill also contains a provision which requires a home owner who received compensation subsequent to the board completing remediation works or where remediation works have not commenced or have commenced but have not been completed to recoup to the board costs he or she has incurred under the pyrite remediation scheme in connection with that dwelling.

This is not a compensation scheme. home owners will not be able to seek the recoupment of costs associated with the remediation of a dwelling undertaken prior to the commencement of the scheme. Inclusion in the scheme is predicated, inter alia, on the dwelling being subject to significant damage attributable to pyritic heave and where this can be verified, having regard to IS 398:1-2013, prior to works commencing. This is in line with how similar Government schemes operate or have operated in the past, whereby prior approval is a key eligibility requirement for a scheme. The Bill provides that, in exceptional circumstances, a dwelling which does not meet the eligibility criteria of the scheme in terms of either the severity of damage or on the grounds of ownership may be included in the scheme if it adjoins another dwelling being remediated where the board considers that its exclusion may cause damage to either dwelling.

The scheme provides for a two-tier appeals process. Decisions made by staff of the Pyrite Resolution Board can be appealed to the board and the decisions made by the board can be appealed to an independent appeals officer appointed by the Minister. The initial phase of the remediation programme will deal with circa 1,000 affected dwellings in the red category which are understood to be in need of urgent remediation. My Department and the board are confident that this figure is credible and its validity is supported by a number of positive indicators, including the fact that approximately 850 people have registered an interest on the Pyrite Resolution Board's website to receive an application when the scheme becomes operable. The board will be responsible for overseeing and directing the delivery of the pyrite remediation scheme and it has already made significant progress on developing appropriate systems and procedures. It is finalising work on the proposed online application and processing system and also working on developing other complementary systems, with appropriate checks and balances, to ensure effective and efficient programmes of remediation are delivered to affected home owners. Following the Bill's enactment, the board will prepare a draft scheme which will be submitted to me for my approval and, when approved and made, laid before the Houses of the Oireachtas. I understand the board will be in a position to accept applications early in the new year.

While the Pyrite Resolution Board will not directly employ staff, it will be supported by staff from my Department and also from the Housing Agency. Using staff from both the Housing Agency and my Department will enable the board to undertake its role efficiently and without the necessity for a separate and costly staffing structure. The board will submit an annual report to me no later than 30 June each year. These reports will be laid before the Houses of the Oireachtas. The Housing Agency will be responsible, inter alia, for the procurement of competent professionals and contractors, arranging for the testing of dwellings, awarding contracts and making payments in respect of remediation works and all other ancillary costs. Procurement will be in accordance with EU and national procurement rules.

As I mentioned, my preferred approach in dealing with the pyrite problem was for responsible parties to provide a voluntary solution. While this did not prove possible, the Pyrite Resolution Board is continuing to engage with HomeBond with a view to agreeing a process within which it can contribute resources to the remediation process. I know that some people have concerns about the possible role HomeBond may play in the implementation of the remediation scheme, but I want to make it clear that any agreement on the provision of resources will be fully transparent and any role it may play will be under the supervision of the Pyrite Resolution Board and the Housing Agency. At the other end of the scale, some are suggesting that the Pyrite Resolution Board or I should confiscate the funds HomeBond holds under the terms of its structural warranty scheme. This is not possible because HomeBond is a private company and neither I nor the Pyrite Resolution Board have any legal basis to sequester its funds.

The Bill provides a clearly defined legal framework for the delivery of practical and sustainable solutions for home owners. The scheme is fair and transparent and will restore the structural integrity of pyrite damaged homes at minimum cost to the taxpayer. I hope Deputies on all sides of the House will support this important legislation. I commend the Bill to the House.

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