Dáil debates

Tuesday, 23 April 2013

Ceisteanna - Questions - Priority Questions

EU Directives

2:20 pm

Photo of Maureen O'SullivanMaureen O'Sullivan (Dublin Central, Independent)
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To ask the Minister for Jobs, Enterprise and Innovation if he recognises the importance of the EU Accounting Directive as a game changer for the entire relationship between Europe and Africa; if he will push for the best possible standards of Chapter 9 of the Directive under the Irish EU Presidency; and if he will make a statement on the matter. [15825/13]

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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I am pleased to say that a preliminary first reading agreement was achieved on 9 April last by the Irish Presidency of the Council on the draft EU accounting directive, which we had set as a priority during the Irish Presidency and which is an important item of EU legislation. The EU Committee of Permanent Representatives approved this preliminary agreement at its meeting on 17 April, thus preparing the way for adoption of the accounting directive on the basis of the present text.

The directive is important in that it updates the EU's accounting legislation and provides for simplification and administrative burden reductions, in particular for small and medium enterprises. It is one of the final outstanding parts of the Single European Market. Also, under specific provisions of this directive, at chapter 9, information on the revenue streams which governments in resource-rich countries around the world receive from European companies active in the extractive industries and in the logging of primary forests, will require to be provided by the industries in question. As a consequence, the populations of these countries will have this information available to them. This acts as an accountability mechanism vis-à-vis the governments in question.

In the accounting directive, natural resource companies - large companies and public entities - will be required to report all payments in excess of €100,000 to governments and local authorities in the countries where they operate. This information will facilitate accountability of both companies and governments to citizens of mineral rich countries regarding the contracts that they undertake. It will increase transparency of the moneys that oil, gas, mining and forestry companies pay to governments and local authorities. Under the reforms, companies will need to publish total payments for each country in which they operate and for each project, taxes on profits or production, royalties, dividends, bonuses, related fees and payments for infrastructure improvements. There is no exemption for disclosing these details in countries where this may breach local laws.

The provisions of the accounting directive will take effect in the European Union two years, at the latest, after its adoption.

Photo of Maureen O'SullivanMaureen O'Sullivan (Dublin Central, Independent)
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My question was submitted just before that directive was signed. I acknowledge the work the Government and officials have done to support the accounting directive. This is something NGOs and civil society have been seeking for some time. The EU Commissioner, Michel Barnier, has said that local communities in resource-rich countries will finally be better informed about what their governments are being paid by multinationals etc. for exploiting oil and gas fields, mineral deposits and forests. This directive must mean more than that they will be better informed, because these communities are losing out big time. They should see the benefits of the resources in their countries.

Some $1 trillion disappears without trace from developing country, abetted in the main by multinational companies evading taxes. The disappearance of these moneys is also supported by corruption on the part of officials. This issue has been called the ugliest chapter in global economic affairs since slavery.

Will Ireland build on what has been achieved in the directive, particularly in chapter 9, to create and support greater transparency in country-by-country reporting?

2:30 pm

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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Absolutely. I thank the Deputy for her commendation of the officials in my Department, who have done a great deal of work. As she probably knows, painstaking work is required to get these things over the line. I will convey her remarks to my officials. It is clear that abuses have developed in this area. The NGOs have been extremely exercised about it, and rightly so. The directive creates a charter for transparency. I understand that similar provisions are included in the Dodd-Frank legislation in the US. We are beginning to see a commitment on a broad global basis to having more transparency in this area. I hope that reduces the sorts of abuse mentioned by the Deputy.

Photo of Maureen O'SullivanMaureen O'Sullivan (Dublin Central, Independent)
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An effort needs to be made at UN level to highlight the issue of tax justice and to tackle the illicit movement of taxes from particular countries. Did the Government support the inclusion in the review clause of additional sectors, such as telecommunications and construction, that could be included in the directive? While I accept what is being done with regard to oil, gas and mineral reserves, I think similar efforts could be made in other areas. It is interesting that at a recent climate change conference, President Higgins outlined some figures to demonstrate the extent to which multinational companies dominate particular sectors, such as the food sector, in the developing world. There is great scope for action to be taken in this huge area. There is great scope for Ireland, as a well-respected country, to do more to build on what has been done with regard to tax justice.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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I will have to get back to the Deputy on the wider sectors she mentioned. I understand there has been broad-based support from the Council, the Parliament and the NGOs for what has been achieved here. One always has to get all of one's supporters together in order to get an item such as this through. I know my Department was keen to deliver this and I congratulate those involved in getting it across the line. I will get back to the Deputy on her supplementary question.