Friday, 17 October 2014
Social Clauses in Public Procurement Bill 2013: Second Stage [Private Members]
I thank Deputy McDonald for introducing this proposal, which is both timely and relevant, because €9 billion in contracts represents perhaps the third biggest budget in the State after health and education. Therefore, Members should ensure that the best opportunities are contained within the aforementioned €9 billion for Irish businesses and people. The country has come from a collapse in its banking system and economy, which arose as a result of a lack of probity across the various sectors of the economy, mainly banking. While Members are now trying to infuse this into the public procurement area for the rebuilding of much infrastructure, predominantly in respect of housing, schools and universities, as well as some transport infrastructure, they may be missing other areas in which social and responsible probity is important. For example, the restructuring of the balance sheets of banks has been missed completely in this type of debate and discussion because the policy the so-called pillar banks have adopted in recent years actually has crushed many households and families, and that is not right. While I will not go into this, it demonstrates that one cannot simply compartmentalise serious parts of the nation's productive effort. We produce goods and services within sectors, and for today, Members are focusing on public procurement aspect.
I believe the framework the Deputy has suggested as a starting point is excellent. However, in the context of practice and pragmatics, I worked in Vilnius, Lithuania for 15 months on a contract for a start-up that involved a great deal of sending out tenders to get different companies of different sizes to submit tenders. I was actually befuddled by the bureaucracy and I thought it was so pathetic and so strangling that it crushed even the enthusiasm to do the task at hand. Consequently, one must be careful not to lose one's flexibility. I will offer a thought from outside the box of linear thinking, or that comes from left field. Each firm and business has its accountant, minimally, and its auditor. Companies must have auditors, and in order to allow this type of social awareness or social responsibility thinking to permeate the conduct of business in general in this country, I suggest that the auditor to each company should perform an annual social responsibility compliance or awareness testing of the entire conduct of the business. This would include small businesses, as each limited company must have an auditor, and the purpose would be to ascertain the conduct awareness in all transactions throughout the year. This would be akin to a general medical check as to the probity of the business that provides goods and services, regardless of whether they go to public procurement contracts or are delivered to the economy in general. Auditors have to date been more obsessed with ticking and bashing and doing the arithmetic of the accounts, rather than their substance. This has been evident, and it will be seen to emerge from the banking inquiry that while they are neurotic about where the lines on the football pitch are, there is a question mark over the conduct of, and the interaction between, the players in the conduct of business. One could be neurotically scrupulous about being obliged to do a debit here or there and making sure it was before a particular date, but the substance could be all wrong. While technically one may not have stolen something, in substance or morally, one has.
In the area of public procurement, large companies will be the lead contractors or tenderers, and there will be subtendering and subcontracting and all that sort of thing. This is where the update certificate from an auditor who carried out a probity of conduct compliance test would come in. It would include a review of whether there were new employees as well as whether there was training of apprentices - that is, those who are in the course of becoming qualified tradespeople. One would then have a better and far-reaching understanding of the responsibilities of people in business in doing their business. This would be a first fail-safe with regard to the acceptability of a tender. The question should be who was signing off, rather than just a specific algebraic presentation of a tender that traditionally and heretofore has been price-based in the main. However, one would now be adding qualitative or soft-issue considerations, and the soft issue would begin with asking who is the tenderer anyway and what have those concerned done for the past couple of years. It is similar to how one can get a picture each year of how fit an athlete is and of the athlete's body mass index. In this case one would have a corporate mass index. Moreover, this would be less of a bureaucratic burden or obstacle for small to medium-sized enterprises and would be more relevant to their capability and competence to do what they state they intend to do. Questions such as when a business started up, how many employees it has, how it faced into the recession and whether it was completely unsympathetic to its employees or supportive would be suitable for scoring. Moreover, there would be an evidenced audit trail.
Because Deputy Lawlor was trying to touch on this type of consideration in his contribution, I am sorry to have heard that he could not avoid throwing a punch at Sinn Féin. That is silly stuff, and he did not need to say it, because his contribution was good until he said that.
I advise the Minister of State to beware of rigidity, maintain flexibility and to try to get a profile picture of who the tenderers are from the lead tender down to the subcontractor tenderers. With regard to the idea of having an annual soft issues, quality assurance on social probity and social responsibility of every business, why should it only be related to the debits and credits, profit and loss account and balance sheet, tax computation and all of that? That is a clinical exercise. It is a pathology of the business rather than the psychology and physiology of it. Perhaps a working party could be set up to address those matters, but the framework is good. It shows that we are trying to rebuild the country with the expenditure of €9 billion for public procurement, which is a big allocation of the overall €145 billion GNP or approximately €170 billion GDP. It would create a social awareness across society that this is where the Government is able to have an infusion into the quality of what is happening in terms of the delivery of public procurement goods and services.
It is important to talk in the language we all use at home. The use of percentages in the budget announced earlier in the week is like saying "my daughter grew by 3% last year" but the question is what height is she? The opening figure should be that last year we produced these goods and services and that the MNC FDI companies accounted about €20 million which means that the indigenous GNP is the stated amount. We should explain that to the Peters, Susans, Joes and Marys. We should then say that out of the €146 billion of GNP this is what the Government's revenues are to provide services which cost so much and last year it was this amount and next year it will be that amount. It should be laid out on one sheet and it is possible to do that. That should be done instead or having this linear stuff of percentages and gobbledegook and the Government then trying to pat itself on the back. Our arms are not long enough to do that and that is reason it is not a good idea for the Government to do that. Those are a few of my thoughts. I hope they will be viewed as constructive and positive.