Dáil debates

Wednesday, 21 September 2022

Screening of Third Country Transactions Bill 2022: Second Stage

 

1:22 pm

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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I move: "That the Bill be now read a Second Time."

I am happy to bring the Bill before the House. It will empower the Minister for Enterprise, Trade and Employment to assess, investigate, authorise, condition or prohibit third-country investments based on a range of security or public order criteria. As well as equipping the State with the means to protect itself against threats arising from third-country investments, the implementation of a screening mechanism will also provide reassurance to key trading partners that Ireland is a responsible global player, cognisant of the threat posed by the strategic and potentially hostile state-backed investment strategies. International evidence suggests that the existence of a screening mechanism does not act as a deterrent to inward investment. The absence of such a mechanism, however, would do untold harm to Ireland's reputation among key investors.

The Bill was developed on foot of the adoption of the EU foreign direct investment, FDI, screening regulation. That regulation, which came into effect in October 2020, was, in turn, a response to the growing concerns among member states about the potential threat posed by unconstrained third-country investment, that is, investment from outside the EU and the European Economic Area, EEA. Notwithstanding the overwhelmingly positive impacts of foreign investment, there is growing appreciation globally that in some instances foreign investment can be used as a tool by hostile actors to achieve a range of goals inimical to the interests of the state. Such goals might include, for example, acquiring access to or control over strategic and sensitive assets or technologies that facilitate disruption to core activities of the state or that permit espionage. Likewise, investment that results in the export of critical, cutting-edge technologies back to the home of the investor may represent a very real threat to our security and public order.

The role played by third-country state-owned firms is of particular importance in this regard. To date, there has been no formal investment screening mechanism for foreign investment in Ireland. While Ireland is not alone in the EU in this regard, the absence of such a screening mechanism leaves Ireland ill-equipped to respond to threats to our security or public order arising from third-country investments. This screening Bill is designed to address this issue. Establishing a formal investment screening mechanism represents an opportunity to design and to tailor a system appropriate to Ireland's needs, and the approach set out in this Bill balances Ireland's long-standing foreign direct investment strategy while also acknowledging the challenge posed by potentially hostile investments. Risks may arise as a result of a wide variety of factors, for instance, based on the source of the investment or the characteristics of the party being acquired across a host of existing and emerging sectors or through a range of deal types, regardless of value.

Our mechanism, therefore, must be flexible enough to respond to such threats while simultaneously providing as much certainty as possible to the enterprise.

In response, the Bill defines the nature, scale, and type of investments that will be required to undergo investment screening and sets out the factors to be considered when applying screening to transactions. It is important to note that the screening mechanism will consider investments through a security and public order lens. This is not about competitive or public interest tests. Other tools are available to the State to address such concerns. It is vital to maintain this exclusive security focus to maximise the effectiveness of the screening mechanism.

Having provided the background and purpose of the Bill, I will now outline some of its main provisions. The Bill contains four Parts. Part 1 primarily deals with matters common to legislation, namely, commencement, interpretation, reporting obligations, and services of documents. However, also contained within Part 1 are provisions on connected persons, the applicable offences and penalties, as well as provisions on any incurred expenses.

Part 2 relates to the notification process and the manner in which applicable transactions are reviewed. The Bill consists of a mandatory element and a discretionary element. A mandatory notification will apply to investments from third countries relating to particular sectors and technologies. These are based on Article 4 of the EU regulation. A range of other criteria relating to ownership and deal-size thresholds also apply and these are expanded upon in the Bill. In addition, the Minister of the day will be able to initiate screening of other investments which do not require a mandatory notification but which the Minister deems, on reasonable grounds, to pose a risk to security or public order. This ensures that the screening system is flexible enough to adapt to changing economic and technological developments and allows the Minister to respond to deliberate attempts to circumvent the screening mechanism.

Section 9 outlines the type of transactions that must be notified to the Minister, while section 10 sets out the notification process itself. Section 12 sets out the requirement for the Minister to review both notified and non-notifiable transactions where he or she believes such a transaction may impact security or public order. Section 12(1)(b) provides the Minister with a safety net to review transactions that did not require a mandatory notification but may still pose a threat to security or public order, as previously mentioned. The applicable time periods during which the Minister can invoke such a provision are set out in the subsection.

Section 13 outlines the factors the Minister shall consider when reviewing the threat to security or public order posed by a particular transaction. In conducting such a review, the Minister must consider whether an investor is controlled by a third-country government; the extent to which parties to the transaction are involved in activities related to security or public order; any evidence of criminality among the parties; the likelihood of the transaction resulting in actions that are disruptive or destructive to people, assets, or undertakings in the State; the views of the European Commission and other EU member states; and the views of the investment screening advisory panel. Under this section, the Minister is also empowered to consult with other Ministers or relevant parties to inform the review process. The Minister also has the option to enter discussions with the parties to the transaction to mitigate any concerns relating to security or public order.

Sections 14 to 17, inclusive, relate to the issuing of a screening notice to parties, the process around the notification of the screening decision, and the limitation on transactions under review. Effectively, a transaction cannot be progressed once screening has commenced and until such point as the review has been completed. In general, the Minister has 90 days to complete the screening process as per section 16.

Section 18 outlines the decisions available to the Minister in respect of the outcome of a screening review. Under section 18(1), once it has been determined that a transaction impacts upon security or public order, the parties to the transaction are required to comply with the Ministers direction. Section 18(2) provides that where such a determination has been made the transaction cannot be completed other than in accordance with the Minister's direction. However, under section 18(3), where it is deemed that a transaction poses a threat to security or public order, the Minister may allow the transaction to proceed subject to certain conditions being fulfilled. Examples of such mitigation measures are set out in section 18(4). Where those mitigation measures are not sufficient, the Minister may prohibit the transaction. Under section 18(5), failure to comply with a ministerial screening decision is an offence.

Section 19 permits the Minister to request additional information from the parties involved in a transaction to assist with the screening review process. The section outlines the process the Minister is required to adhere to along with the prescribed timelines associated with such a request. Section 19(5) deals with the provision of false information or failure to comply with an information request, while section 19(6) addresses the issue of legal privilege.

Section 20 sets out how the timeline for the screening process can be paused upon a request for additional information from the Minister.

Section 21 enables the parties to a transaction to provide written submissions to the Minister.

Part 3 consists of four chapters and sets out the appeals mechanism open to the parties concerned. Significant thought has also gone into the development of these appeals procedures, balancing the need to ensure fair process with the security requirements of the State while also complying with recent case law.

Chapter 1 details the appointment and conduct of independent adjudicators. Section 22 outlines the process for the appointment of an independent adjudicator to hear an appeal against the Minister's decision. The subsequent subsections set out the establishment of an adjudication panel, the necessary qualification criteria, the prevention of conflict of interest, as well as the terms and conditions for appointed adjudicators. Sections 23 to 25, inclusive, provide for the revocation of appointment as adjudicators, the liability of adjudicators and rules concerning the conduct of appeals before adjudicators.

Chapter 2 sets out the procedure for appealing a screening decision. Section 26 provides the avenue for parties to a transaction to appeal a decision of the Ministry.

Section 27 sets out the procedure for initiating an appeal of a screening decision. Under this section, appellants must notify the Minister of his or her intention to submit an appeal against a screening decision within 30 days of being informed of such a decision. Pursuant to section 27(3), the Minister will appoint an adjudicator to hear the appeal once he or she has been made aware the appeal has been filed. The Minister must notify the appellant and provide the details of the designated adjudicator and set out the means by which the appellant may make his or her appeal. Thereafter, the appellant has 14 days to file an appeal. In line with section 27(4), the appellant must state the grounds under which the appeal is being submitted and must provide all documents and evidence upon which the appeal relies. Section 27(5) states that the Minister is the respondent to the appeal and most state the grounds upon which he or she intends to respond to the appeal, as well as the evidence upon which he or she will rely. A party to an appeal may not make written submissions to adjudicator other than submissions relating to the grounds stated for the appeal or related to evidence provided under previous sections. Section 27(9) confirms that an appeal to the adjudicator does not suspend the screening decision that is being appealed.

Section 28 provides that an appeal may be heard without an oral hearing unless such a hearing is deemed necessary by the adjudicator.

Section 29 sets out the powers of the adjudicator in the initial screening decision made by the Minister. The adjudicator may allow the appeal and remit it to the Minister for reconsideration, or the adjudicator may affirm the Minister's decision. This decision must be notified to the parties concerned as soon as is practicable.

Chapter 3 contains provisions on how sensitive material and evidence is handled. Section 30 deals with the ability of the Minister to provide sensitive evidence to the adjudicator in a manner that protects national security.

Section 31 provides that the Minister may determine that an appeal to the adjudicator can be held in public if it does not create a risk to the security or public order of the State. Section 32 addresses the need to maintain confidentiality around certain types of information obtained by a party via the appeals process. Section 33 outlines the grounds for the Minister to approve or designate certain legal representatives in sensitive cases.

Chapter 4 of Part 3 deals with appeals against the decision of an adjudicator. Section 34 provides parties to a transaction with the right of appeal to the courts against the finding of an adjudicator. Subsection (1) states that such an appeal be made by leave of the High Court on a point of law within 30 days of the adjudicator's finding. It should be noted that under subsection (5), the decision of the High Court is final.

Section 35 permits the appellant to ask the High Court to suspend a screening decision until such time as the appeal is determined. Otherwise the lodging of such an appeal does not suspend the initial effect of the screening decision. Section 36 deals with the issues of sensitive material in an appeal to the High Court. Subsection (1) provides limitations on the sharing of evidence where a risk to security or public order exists. Section 37 outlines who may attend an appeal to the High Court. Attendance is limited to persons deemed necessary given the potential sensitivity of the hearing.

The final part of the Bill, Part 4, provides for the establishment of an advisory panel to assist the Minister in the decision-making process. Section 39 looks at the establishment of a screening advisory panel and sets out the process for appointing members to the panel. It also contains provisions on the rules regarding the number of members of the panel as well as the functions applicable to the panel. Subsection (4) permits the panel to request assistance from experts as and when required, while subsection (5) allows the Minister to dissolve the panel at any time.

Section 40 outlines the level of officer to be appointed to the panel as well as the Departments to be represented on it. Section 41 sets out the various rules relating to the frequency of meetings, the associated quorums and the meeting procedures. Section 42 permits the panel to engage such consultants or advisers as necessary in the performance of its functions.

It is essential that we enact the Bill to provide the State with the powers necessary to deter or mitigate the impact from hostile actors acquiring ownership of, or influence over, businesses and assets in order to cause harm to the State. The mechanism that has been developed is tailored to suit Ireland's needs, ensuring that we remain an attractive location for foreign direct investment while being a safe and responsible location in which to do business. I commend the Bill to the House and look forward to engaging with Deputies on the matter.

1:37 pm

Photo of Louise O'ReillyLouise O'Reilly (Dublin Fingal, Sinn Fein)
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I welcome the newly appointed Minister of State, Deputy Calleary. I wish him all the very best in his role and I very much look forward to working constructively with him over the remaining period of government, although we all may wish different things for the duration of it. I wish him the very best.

I am grateful to have an opportunity to say a few words on this important Bill. It is extremely technical but it is also political in its nature in the context of geopolitics and ensuring the security and safety of the State and its citizens. Unlike many other EU member states, Ireland does not have a regime for screening foreign direct investment in key infrastructure. The Screening of Third Country Transactions Bill 2022 seeks to change this and give significant powers to the Minister for Enterprise, Trade and Employment. The Bill, which aims to provide the Government with powers to protect security or public order from hostile actors using ownership of, or influence over, businesses and assets to harm the State, introduces a foreign direct investment screening process. This will allow the Minister for Enterprise, Trade and Employment to assess, investigate, authorise, condition or prohibit third-country investments in key Irish industries and sectors.

On this point I want to establish from the Minister of State, if I could, that the definition of "third countries" captures investment in Ireland from Britain and the US. We have 893 IDA Ireland-backed US foreign direct investment companies in the State and 161 from Britain. For reference, there are only 267 from the rest of the world outside the EU. If it does include the US and Britain, and I believe all investments in strategic assets and sectors should be screened, the legislation will place a significant burden on the State compared with our European neighbours. If this is the case, I ask that ample resources be set aside to make sure the screening time is as quick as it possibly can be. I am sure that businesses would very much appreciate this certainty.

The Bill as it is drafted creates a mandatory notification obligation for parties to third-country transaction acquisitions, agreements or other activities with a value of €2 million or more in designated sectors or involving sensitive or strategic activities that result in a change of control of an asset or undertaking in the State. This is the point to which I will return later with regard to the current control of strategic assets and undertakings in the State.

As we know, the Bill forms part of a broader effort by the European Union to encourage co-operation and information exchanges between member states and the European Commission on foreign direct investment from third countries. Given the work of IDA Ireland in attracting foreign direct investment to the State, the legislation creates a change but one that can be of benefit. Nevertheless, it will place additional burdens on the State, the Department and businesses. For instance, when requested by other EU member states and-or the Commission, Ireland is obliged under the EU foreign direct investment screening regulation to provide information on any relevant transaction involving foreign direct investment, including details of the target's ownership structure, products, services and business operations. It is also obliged to declare to other EU member states where the target conducts relevant business operations.

At the core of the legislation, from a purely technical perspective, is the protection of security and public order from hostile actors who would seek to use ownership of, or influence over, businesses and assets to harm the State. It will empower the Minister to respond to threats to Ireland's security or public order posed by particular types of foreign investment and to prevent or mitigate such threats. While I understand the need for this, I ask for further clarification on the powers of the Minister to assess, investigate, authorise, condition or prohibit third-country investments based on a range of security and public order criteria. This is so that when the legislation is passed there is certainty on the part of investors and the State and we do not leave ourselves open to accusations of bias or of being used as a pawn in geopolitics. I say this because we should not forget where the EU regulation came from. It came about following a European Parliament resolution and a joint letter sent by three member states, namely, Italy, Germany and France, asking the Commission to adopt a new regulation on the screening of foreign direct investment.

The EU regulation comes in the middle of the crisis of the globalisation dogma being threatened by the commercial wars happening between the global powers. Anyone who reads over the speeches regarding this EU regulation in the European Parliament will see that the extreme neoliberal approach of the EU policies pursued, which make the EU the most open economy in the world, was rarely questioned and the real target of this EU legislation is most likely China.

With regard to the timeframes for screening decisions, the legislation states that a decision must be made by the Minister within 90 days from the date of notification and that this may be extended by a period of up to 135 days at the discretion of the Minister. Is the 90-day limit for extreme cases or is it the Minister of State's expectation that all cases will take 90 days? With regard to the allowance for Ministers to use discretion in this instance, but also to use national security as a reason not to give information for why an investment was rejected, I hope these powers are wielded with careful consideration. Security is absolutely important but so too are openness, transparency and trust.

To return to a broader political point on investment screening and who controls assets and infrastructure in the State, the housing crisis, the energy crisis and the Covid-19 pandemic have helped to highlight the need for certain assets and infrastructure in the State to be appropriately controlled. I do not think there is any doubt in this regard.

Investment and control of assets and infrastructure are not just a problem with hostile third-country actors. There is investment from within Europe and private entities that is problematic but is rarely spoken about. The EU forced liberalisation or sell-off agenda of strategic assets has seen energy, transport and telecommunications pass into the hands of private business.

What good has the privatisation of public transport done? We saw the difficulties this caused during Covid because of the sell-off of Aer Lingus, while every week I get emails from constituents with regard to the same bus routes operated by Go-Ahead, the 33A, 33B and 102. As we deal with the energy crisis, can anyone tell us what good the sell-off and privatisation of energy has done for Ireland or anywhere else in the EU?

Businesses and people are seeing their energy bills double and treble as energy companies pay out dividends to stakeholders. What has the response across Europe been? Many countries have suspended the liberalisation of energy. France has spent more than €9 billion and concluded a public takeover bid to completely nationalise Electricité de France and Germany is nearing the full nationalisation of gas giant, Uniper.

The State has had to step back in on the telecommunications front to roll out a national broadband programme because the private market simply will not do it. Where is the oversight of domestic, EU and third-party capital used to invest in both new and second-hand properties in the Irish housing market and which is having a significant impact on the housing sector? Only this weekend, in theBusiness Post, there was a story about British weapons dealer, BAE Systems, which made €2.4 million in profit by divesting itself of 43 second-hand Irish homes that it had only bought one year previously. Where was the screening of the sell-off of these strategic assets?

Will the legislation cover companies that have invested in assets and undertakings in the State and have egregious records on workers' rights and dubious records on the protection of human rights? I doubt it, especially when we have Ministers who go on trade missions to states that have no respect for human rights - never mind workers' rights - and are engaged in wars, either directly or by proxy, that are causing untold misery.

This Bill is a significant piece of work and it is necessary. We do not want to see our strategic assets fall into the hands of hostile actors and we must do all we can to protect against that. It is important that the State defends strategic sectors, sensitive technologies and infrastructure. Given the geopolitical character of the EU legislation underpinning this Bill, I hope it is not used as an instrument to pressure Ireland or any other small states on which FDI we can and cannot accept from our larger European neighbours. While I have my political differences with the Minister of State, I trust his judgment on what is best for this State over a minister from a state that does not have Ireland's interests at heart.

While we support this investment screening Bill, it must be said there is another way to protect critical assets and infrastructure, namely, through public control over critical sectors. As I said before, in what I hope will be some food for thought for the new Minister of State to take back to his Government colleagues, we do not want to see our strategic assets fall into the hands of hostile third countries but nor do we want them to fall into the hands of private interests who have no care for this State or the people in it. Strategic assets should be kept in the hands of the Irish State.

1:47 pm

Photo of Martin KennyMartin Kenny (Sligo-Leitrim, Sinn Fein)
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I welcome the Minister of State to his new post and wish him all the very best for the time ahead. This legislation is clearly necessary. We have had considerable direct investment into Ireland, the vast majority of which has been very successful. IDA Ireland has done an excellent job. International corporations have employed many people in many regions of the country and have not just generated income for people but also new skills that would not otherwise have been created. We have to recognise and understand. However, this legislation looks beyond that to the dangers that exist and we have to acknowledge that as well.

We recognise that our own homegrown criminal fraternity has spread its tentacles across the globe. Many of the criminal organisations that engage in drug and human trafficking and make substantial amounts of money use that money to invest in what would normally be considered to be legitimate enough business enterprises. They can do that in other countries and expand in their home regions where they may have started off and where, unfortunately, much of the misery they created can be seen. We understand that. It is important, therefore, that we have a mechanism in place to screen against that particular type of activity and against the rogue regimes in some parts of the world that engage in similar types of activities.

As my colleague, Deputy O'Reilly, pointed out, Ireland and most other European countries have free and open market economies and we invite investment in. We talk about Europe and the free movement of trade and people but the free movement of capital, more than anything else, is what has made Europe what it is. The free movement of capital is associated with great danger because it operates in an uncontrolled manner. In essence, the legislation seeks to do something about that and to understand that we must be very careful about where these investments come from, what end role they may have and how they can, at times, have a very negative effect on a country. One of the big issues, certainly for those of us on the left of politics, that causes us deep concern are the dangers associated with the privatisation of so many of the vital services provided to our people, for example, in health and transport.

The way in which the Russian invasion of Ukraine has unfolded has brought home to many of us not just the problems that arise from the point of view of international politics but also from the point of view of the bread-and-butter issues that ordinary people have to deal with. We see the price of everything going through the roof as a result. Much of that is because we do not have our own capital in place to provide services and energy here in Ireland or, at least, close to Ireland and over which we have control. They are controlled in these global spheres which are very dangerous. We have to understand that.

Criminal fraternities may also be involved in much of this type of activity. Ireland is unique because we developed the Criminal Assets Bureau, CAB. We were one of the first countries to develop such a body. The CAB has been copied in many countries around the world and is seen as an example of how to find and dispose of criminal assets. I have some concerns in this regard as I believe the capacity of the Criminal Assets Bureau is being withdrawn or closed down somewhat but I will raise that with the Minister for Justice when I get the chance.

We need to recognise that the problems we have around the globe exist mainly because globalisation has occurred. While globalisation has some positives, it has many negatives. There are many negatives from the point of view of the countries which produce much of the wealth. We are all very glad to get cheap commodities in the western world but we have to recognise that they come at a cost to unfortunate people in other parts of the world who are often exploited. Deputy O'Reilly spoke of trade missions to countries with poor records on human rights, but also on workers' rights, including the hours people work and the salaries they receive for the very hard work they put in. An ethics model is needed in all of this. It should not just be about the danger posed to Ireland but the danger that arises when these types of corporations exert their influence everywhere. That has a real human effect and cost.

That said, I hope the Bill will have a speedy passage through the Houses and will do its job and, I hope, more in order that we can make the world safer.

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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I congratulate the Minister of State, as my constituency colleague, on his new position. I look forward to working with him for the betterment of the people we are here to serve.

As has been stated, the Screening of Third Country Transactions Bill 2022 seeks to provide Ireland with screening of foreign direct investment in key infrastructure in strategic sectors. People might be shocked to learn that such a formal screening process is not already in place. We have seen substantial privatisation of infrastructure over the past 20 years. It is alarming that it has taken so long to bring forward legislation on screening FDI in the public interest.

The Bill has been produced in response to an EU regulation that aims to establish the EU-wide framework for screening FDI. The regulation aims to facilitate information sharing and co-operation between member states and non-EU foreign direct investment.

While the EU has competency for FDI in a number of areas, this is predominantly a national competency as it relates to national security and public order. The importance of this legislation cannot be overstated. It is long overdue and it is vital we work together to ensure robust protections are in place.

One aspect of the EU regulation relates to information on the ownership structure of companies. Beneficial owners should never be allowed to hide behind complex legal structures. We have far too little transparency when it comes to corporate ownership and finance in general. This has huge implications far beyond the scope of this Bill relating to our ability to govern and tax the private sector nationally and internationally. In this Bill it has a direct implication for our ability to effectively screen FDI in strategically important sectors. We need to be more ambitious in this legislation and go beyond the overly narrow definition of national security and public order envisaged by the EU.

The driving force behind this move at EU level was the investment in infrastructure by Chinese state companies in Europe. The former President of the European Commission, Jean-Claude Juncker, stated: "If a foreign, state-owned, company wants to purchase a European harbour, part of our energy infrastructure or a defence technology firm, this should only happen in transparency, with scrutiny and debate." That is a completely sensible proposal on the face of it. The then Commission President's statement related to the Port of Piraeus in Greece and a Portuguese electric company that were bought by Chinese state-affiliated companies. However, the irony was not lost on the Greeks and Portuguese as both countries were forced to privatise these important national assets by the troika under austerity.

Like its origins in the EU, the legislation before us has a very narrow focus on state actors. While this should no doubt form part of it, we need to also look at the potential risks related to private interests taking control of important national infrastructure or key sectors more broadly. We are currently suffering the consequences of the privatised electricity market. Our domestic gas asset, the Corrib field, which the Minister of State and I are very familiar with from our constituency, is completely in private ownership. In recent years, we have allowed a genomics company to collect DNA from 400,000 citizens without proper public debate or scrutiny. International property companies have also caused serious disruption to housing provision in this State.

In principle, Sinn Féin supports screening FDI to defend strategic sectors, sensitive technologies and infrastructures. However, this will always have a limited impact unless we look at a different approach to public control and governance over these sectors. Austerity policy and privatisation were a big driver in causing these problems across the EU and that needs to be recognised. This legislation is a step in the right direction but there is scope to strengthen the Bill to protect our citizens and our assets.

1:57 pm

Photo of Aodhán Ó RíordáinAodhán Ó Ríordáin (Dublin Bay North, Labour)
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I join others in congratulating the Minister of State on his recent appointment. We look forward to working closely with him in the coming period.

This Bill is about protection of the security or public order of the State. In a globalised world with complex technologies and equally complex supply chains it is clear that our day-to-day lives are acutely vulnerable to the malign actions of state or non-state actors which could seek to disrupt our lives for their own political, economic or simply criminal purposes. The true scale of our vulnerability was brought home by the hack of the HSE's data systems, which was an act of malice conducted by a group with evidence of informal links to Russian security services.

The current energy crisis exposes the vulnerability of the EU for its overreliance on entities that believe their strategic interests are fundamentally different from ours. Unfortunately, the world is still haunted by the spectre of totalitarianism. The hostility to the EU from authoritarian regimes and their supporters both inside and outside the EU poses a significant long-term threat to our economic well-being. It is in this strategic context that it is clear we need to pay more attention to who owns or controls key components of our societal infrastructure. We must acknowledge we are an open trading country where FDI is and has been the cornerstone of our industrial policy and we are uniquely dependent on external companies for our economic well-being. There is no doubt that any mechanism to scrutinise external transactions has the potential to place a comparatively larger burden on our economy than on others in Europe.

The purpose of the Bill is to put in place a legal mechanism to enable a Minister to review business deals and transactions to ensure they do not put the security or public order of the State at risk. It is being brought about as a direct result of the need for Ireland to implement Regulation (EU) 2019/452. In commentary on the Bill the Tánaiste has stated:

This new law is to give us the power to intervene if a non-EU actor is seeking to make an investment which would threaten our security or public order. I think it's an important safeguard, which I hope we never have to use.

I agree with him that this is an important safeguard. However, I am a little concerned that there may be some reluctance apparent on the Minister's part to use this legislation. I would be concerned if we ended up with a mechanism essentially rendered toothless by the political reluctance of Ministers to face down vested private interests. We should have no doubt that for every transaction sent for examination, there will undoubtedly be vested interests of business lobbying strongly for even the worst transaction to go through smoothly on the basis of their own economic interest. Therefore, it is just not good enough for a Minister for Enterprise, Trade and Employment to have the power; he or she must be prepared to use it, even in the face of political pressure from many sources for a deal to go through.

Ultimately though, this legislation alone will not be sufficient. It is increasingly clear to me and the Labour Party that one of the outcomes of the current energy crisis and the pandemic has been to restore the economic role of the democratic state as an actor in our economy, and this has vindicated many economists. The growth in public spending in Ireland is likely to result in a permanently higher level of public spending. We need a more prominent role for the State in the economy and this goes beyond just implementation of a single EU regulation. We need that more prominent role to protect ourselves from externally created security risks but we also need it in other areas. The cost and availability of housing, for example, are a chronic danger to our competitiveness but also fundamentally to almost all aspects of the functioning of our economic model. To address that high cost the existing developer-driven housing model needs to be radically disrupted.

The Labour Party supports the aims of this Bill. However, the challenge for everyone is to balance on one hand the risks of having essentially inactive or useless legislation and, on the other, the potential damage to FDI if the process becomes a disincentive or a drag on ordinary transactions. Ultimately, we need a complete review of our industrial strategy. To build a more robust domestic economy we must overcome the challenge of growing an internationally-traded sector comprised of medium and large Irish companies as well as a strong State sector to protect our strategic assets, while all the time standing up to the external threats, private and public. We look forward to working with the Minister of State on the progress of this Bill.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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Deputies Cathal Crowe and Patricia Ryan are not with us. I call Deputy Ó Cathasaigh.

Photo of Marc Ó CathasaighMarc Ó Cathasaigh (Waterford, Green Party)
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It is just as well I was in the Chamber and listening with interest. I join others in congratulating the Minister of State on his new position.

This is an important piece of work the Minister of State has brought before the House. If it was not as immediately and transparently important prior to Russia's illegal invasion of Ukraine, the need for this legislation is now clear and obvious to everybody. I very much agree with some of the points made by Deputy Ó Ríordáin on the primacy of the state in terms of acting in the best interests of the citizen. There was much in the speeches made by Deputies O'Reilly and Martin Kenny that I take issue with but the common factor is the idea that we need state actors - our State - to be involved in the protection of the strategic infrastructure that benefits our citizenry.

Much of this Bill is about the regulation of dark money. It is often said that sunlight is the best disinfectant.

Really what we are doing here is trying to make sure sunlight is cast on how money is spent within our economy. National borders have become ever more permeable. In capitalism, capital has always flowed but now increasingly, ever more regularly, information also flows. With information flows influence. We see this not just in terms of physical, strategic assets and the buying up of strategic infrastructure but also in the trading of information. Deputy Ó Ríordáin referred to the hacking of the IT systems in the HSE and the massive impact that had. It is vitally important for the protection of the interests of everybody in the State that we know where money is being spent and for what reason it is being spent.

The Higher Education Authority Bill 2022 was a significant piece of work that has passed through the Houses. I spoke to amendments on Committee Stage of that Bill about having transparency as to who is spending money within our third level education system. The State has a very large interest in that, a very clear and obvious interest in terms of the provision of education, but it also has a significant monetary stake. There are other people investing within our third level system and I am not sure we have the clarity or transparency about who is investing and exactly why.

The 2019 regulation was prescient in some ways but we have seen now a resource war within Europe, a war that is being fought with resources. We are seeing it playing out not just in our politics here in this House, where we saw it very clearly during Leaders' Questions today, but across Europe where the energy crisis and the weaponisation of energy are being used as weapons of war by a malign state actor. Increasingly as the climate crisis intensifies and deepens we are going to see resource wars waged across the western world, be that in terms of energy or water. We will see information wars waged as well. I think we would all welcome clarity about where the spend is going, particularly in respect of social media companies and the regulation of media. There is a need for clarity about how that level of information or disinformation, or the control of the flows of information, is having an impact on our democracies across the western world.

I refer to an article in The Irish Times from October 2021 about research work that was done as part of the Pandora papers. The Irish Timesestablished that an empty office in a service building on Fitzwilliam Street Lower in Dublin 2 was the registered address of more than 800 limited partnerships, a type of legal structure designed to allow investors to invest in businesses while limiting their exposure. That is all fine and well, as it is an entirely legal structure. In this case, we saw that the bulk of the limited partnerships registered at this address involved partners based in offshore jurisdictions, set up for clients from Russia, Ukraine and other former Soviet countries. The net effect is that the people using the partnerships control an entity that is based in an EU member state while their identity remains completely obscure. That was 800 companies out of one brass-plate office, funded from who knows where and for who knows what reason.

This Bill is a move in the right direction in terms of trying to provide for transparency, to make sure we know what that money is being spent on. I refer back to Article 4 of the EU regulation of 2019. Deputy O'Reilly's view on it was quite jaundiced and probably quite Eurosceptic. However, in some cases a little bit of scepticism about motivation is entirely warranted. I am interested to note that some of the critical infrastructure referred to in that regulation was around electoral infrastructure. We have certainly seen moneys spent in western economies by malign actors to push towards one outcome or another. We should in no way imagine ourselves to be immune from that kind of influence here in Ireland.

I also see critical inputs around energy and raw materials. That has become incredibly obvious to us over the last number of months. To take a forward-facing view, an area we may not pay quite enough attention to is domains around things like artificial intelligence, robotics, cybersecurity, aerospace, and moves towards quantum and nuclear technologies. All of these are very much going to shape our lives in the coming years and in a fairly short timeframe. Who would have thought that mobile phone technology would so completely revolutionise our lives in such a short space of time? We need to be taking actions now to protect ourselves from things like investment in artificial intelligence. There are certainly moves in that direction. I want to make sure that money spent on that type of technology within Ireland is done for the benefit of Irish citizens and the State. The Bill is a useful step in the right direction towards ensuring that transparency.

2:07 pm

Photo of Patricia RyanPatricia Ryan (Kildare South, Sinn Fein)
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I congratulate the Minister of State. Unlike many EU member states, Ireland does not currently have a regime for screening FDI in key infrastructure. The Bill aims to address this by providing the Government with powers to protect security or public order from hostile actors using ownership of or influence over businesses and assets to harm the State. It is quite a technical Bill but very relevant to the current global situation. It introduces a screening process which allows the Minister for Enterprise, Trade and Employment to regulate FDI from countries outside the EU and the EEA in key Irish industries and sectors. It creates a mandatory notification obligation for parties, third country transactions and other activities with a value of €2 million or more in designated sectors which result in a change of control of an asset or undertaking in Ireland. The Bill will provide the Government with the powers to protect security or public order from hostile actors using ownership of or influence over businesses and assets to harm the State. It will empower Ministers to respond to threats to Ireland's security or public order posed by particular types of foreign investment and to prevent or mitigate such threats.

One area that needs urgent attention is the lack of oversight of EU and foreign capital that is being used to invest in the Irish housing market. Unfortunately, the Government rolls out the red carpet for institutional investors to distort our housing market. Sinn Féin in government will prioritise ordinary workers, their families and our older people. We will take the red carpet from institutional investors and roll it out for the working poor and those who have to emigrate if they want to secure an affordable, rentable home under this Government, let alone the chance to own their own home. We cannot have a Government that cares more for tax-avoiding real estate investment trusts, REITs, than it does for the people who contact me daily, who languish at the bottom of housing lists with little hope of securing one of the two properties within the housing assistance payment, HAP, limits currently available in Kildare. There is a lack of oversight for investment from companies and countries that have extremely poor workers' rights or human rights records. Consumers are leading the way and the Government needs to follow.

Photo of Cathal BerryCathal Berry (Kildare South, Independent)
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I am the last man standing. I congratulate the Minister of State on his recent appointment. I very much look forward to working closely and constructively with him over the next couple of years. I also wish to compliment the Minister of State's staff. The format of his opening statement is excellent. It is the first time I have seen formatting like that. Whoever is involved, I hope we see more of it and that their lead will be followed across other Government Departments.

I welcome the Bill. It is long overdue and I look forward to supporting its passage through the Oireachtas. The Minister of State was 100% correct in referencing how important FDI is to this country. We have all lived through the 1980s and remember the mass unemployment, mass emigration and mass depression. The multinational sector was one of the factors - just one of them - that dragged us out of that dark period in Irish history. All we have to do is look at the corporation tax receipts. We have €6 billion of a surplus for the first time in 15 years. That is going to have a massive impact on the budget next Tuesday. However, it is not all just about corporation tax and the tax haul. Significant skills are passed on by the FDI sector as well. A lot of Irish people who work for those companies eventually go on to establish their own SMEs and contribute to the indigenous Irish economy. It is right that we should maintain an accommodating and supportive environment for multinationals in Ireland, within reason.

We should be able to provide a screening system so that the companies that are here or companies even considering coming here are aware that at least we have some basic screening tools to protect them from cyber, industrial and commercial espionage.

Second, I think most people in the country are very happy with how Ireland conducts its business internationally. We are an honest broker. We engage in good faith with other countries. To be fair, the vast majority of countries reciprocate and engage in good faith with us. However, it would be very naïve to think that every country does and will. The Irish public, over the past 12 months, got a sample of what other malign actors are out there geopolitically when they saw some of the behaviour and conduct of a very small number of embassies here in Dublin. It is very important that we are aware there is a threat and risk and that we have the appropriate structures and mechanisms in place.

Ireland is a great place to live; I would not want to live anywhere else. We do a lot of things very well and we do a lot of things very poorly. Of all the things we do very poorly, security is what we do most poorly of all. Whether it is energy, cyber or national security, we just do not seem to do security at all. This legislation will certainly help in that regard. At least it is a half step in the right direction.

Turning to the technical aspects of the Bill, it strikes the appropriate balance, and "balance" is the key word. It provides us with the opportunity at least to screen, to deter, to mitigate and to prohibit, if necessary, but it also allows for an accommodative posture as well.

I like a number of things in the Bill. I particularly like the appeals mechanism. I like that companies have recourse in the courts if necessary. What I like most about the Bill is the multidisciplinary aspect of the advisory panel. We talk about diversity a lot in boardrooms and organisations and that is generally interpreted as gender balance or age balance between the young and the old, which are import things for sure, but we rarely recognise the importance for skills diversity. To have input from defence, justice, foreign affairs, finance, transport and communications is a very good panel if it is implemented properly.

In summary, I am happy this Bill is before the House and I am happy to support it. I have one lasting thought. Most of the law that comes from the EU is good. Not all of it, but most of it is good. This is an example of good law that we need to transpose now into domestic law. The point I would like to leave the Minister of State with is that if it was not for the EU nudging and prodding us along this direction, I very much doubt we would be having this conversation today and that this Bill would be before the House. I am grateful in this instance that we are in the European Union. I look forward to supporting the passage of this Bill through the Oireachtas.

2:17 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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Can we give the remainder of the Deputy's time to who was here first, namely, Deputy Bruton?

Photo of Cathal BerryCathal Berry (Kildare South, Independent)
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Absolutely. I am happy to do so.

Photo of Richard BrutonRichard Bruton (Dublin Bay North, Fine Gael)
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First, I congratulate the Minister of State, Deputy Calleary, on his appointment, which is a great appointment. He has served in that Department before, so he will hit the ground running. I wish him every success.

I welcome this Bill. However, I would like to add some context. The record of foreign direct investment, FDI, in Ireland has been exemplary. That is something we should also stress in bringing in this sort of regulation. The professionalism of the Industrial Development Authority, IDA, is second to none. The quality of investment it has brought in is outstandingly high. I fear that some people in this House understate the contribution that FDI has made to the success of our economy and never miss the opportunity to attack our FDI sector, blaming it for an electricity shortage because of its investment in data centres or laying blame on it for alleged unfair work practices in other countries that are not directly linked to FDI in many cases. We need to value what has been achieved by the FDI sector.

Even since 2011, when I had the privilege to be appointed Minister, which was just ten years ago, there has been an 88% increase in employment in IDA companies. That is 130,000 extra people employed in those companies and an undisputed multiplier of more than one for one. This means there are 130,000 other jobs in the economy as a result of that. Their wage levels are €57,000 - exceptionally high - on average, which is much higher than the average wages in other sectors. They have also been very instrumental in modernising the approaches in our economy, in lifting the levels of training, management experience and start-ups and have created an environment that has been absolutely invaluable to the success of the Irish economic model. We should not lose sight of that.

Of course, it is necessary that we recognise that in a world where data is becoming the new source of wealth and the control of data is often hard to track, we need to be much more conscious of regulatory controls and the fear that it gets into wrong hands. The control for political purposes of strategic infrastructure is not an idle fear. We have seen it time and again, not only in aggressive and often criminal cyberattacks, but also through investment channels, which deserve scrutiny. Therefore, the intention of this Bill is welcome. I see it as copperfastening our confidence in the quality of our FDI infrastructure, rather than in any way casting some doubt on the quality of the work of the IDA or the type of investment that it has cultivated.

Looking at the experience in other countries where this type of instrument is in place, it shows that only 1% of transactions that have come under scrutiny have been blocked. Therefore, this is not a widespread practice. However, it is one that we need to move on early to prevent it taking hold by those who would seek to undermine the infrastructures that support democratic societies such as our own.

It deserves more thinking among the political class, and those who seek to regulate new industry, about the models we have developed and how they contrast with some other countries where there is complete political control of media, information flows and data among citizens. We need to value the type of environment that we have here, but not pretend that is devoid of threat. The significant flows of data and the lack of regulatory oversight in many cases of companies that control these and the rules and principles that they apply is something the regulators the world over in open democratic societies, such as our own, have to take more seriously. We do not want to see what I heard one political commentator describe as “political entrepreneurs” exploiting the nature of data management in democratic countries such as our own. Therefore, it is right that we are considering not only the investment by entities that might seek to distort the infrastructures that we depend on, but also think more strategically ourselves about those.

I have one last comment. Everyday in this House, I hear blame being applied to companies that seek to have data centres. Of 275,000 employees in IDA companies, 158,000 of those are in either ICT or business services. They depend on data centres to be the infrastructure that underpins them. Let us be blunt. The EU has consciously created an emissions trading system that promotes the location of those data centres in the countries where they are most efficient, and that is Ireland. We should not be pointing the finger at data centres for the failure of our energy system to meet the demand, which is an increased demand of 8% in five years.

In the case of commitments made to deliver additional power to our infrastructure, the failure is by the entities which contracted to deliver in auctions. It is all too easy for people to point fingers at others who invest in good faith in critical infrastructures that the EU recognises are efficiently delivered in Ireland and which do not fall onto the Irish inventory of carbon emissions. Our obligations do not relate to data centres because they are in the emissions trading system. We need a little more honesty in some of these debates about the role, importance and needs of multinational companies in Ireland.

2:27 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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Before I call Deputy Ó Murchú, I am going to break the habit of a lifetime. Deputy Murnane O'Connor has asked me to point out that there is a large delegation in the Gallery who have followed her all the way from - it is not Donegal anyway - County Carlow. We welcome the delegation. It is good to have them here.

Photo of Ruairi Ó MurchúRuairi Ó Murchú (Louth, Sinn Fein)
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I was about to give them a clap.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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Deputy Ó Murchú, who is from County Louth, has three minutes.

Photo of Ruairi Ó MurchúRuairi Ó Murchú (Louth, Sinn Fein)
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I was in deep trepidation there as I was not quite sure what the Ceann Comhairle was going to say. I am very glad it was not-----

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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I am not that unreliable, am I?

Photo of Ruairi Ó MurchúRuairi Ó Murchú (Louth, Sinn Fein)
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No, that was not it. It was more whether it related to me. In these circumstances, I generally work on the basis that I may have done something wrong.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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We have not found the Deputy doing anything wrong just yet.

Photo of Ruairi Ó MurchúRuairi Ó Murchú (Louth, Sinn Fein)
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That is all right then.

Photo of Cathal BerryCathal Berry (Kildare South, Independent)
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Not yet, anyway.

Photo of Ruairi Ó MurchúRuairi Ó Murchú (Louth, Sinn Fein)
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It is early in the day.

As I have said on numerous occasions previously, most of the good points have already been made and I will make them with less eloquence. We can break this down fairly straightforwardly. The idea of the Bill, albeit technical in nature, is to provide the Government with powers to protect security or public order from hostile actors using ownership of or influence over businesses and assets to harm the State. In this regard, we are talking about critical infrastructure companies. We all get that we are in a very different and dangerous world. On some level, maybe it is not too different. We believed we were in a safe and secure situation, particularly in Europe or the West. Obviously, that has gone out the window since the Russian invasion. In addition, we are aware of the states, state actors and even semi-contractor state actors that operate in a way that is not necessarily in accordance with the generally accepted rules of engagement. In light of the attacks on the HSE and whatever else, we are aware that it is vital to have some sort of screening process.

I echo the remarks of colleagues regarding the need to ensure that this is not used as negative leverage against the level of FDI in the State, that all the protections we have and are required are in place and that all the necessary due diligence is completed. I do not think anyone would operate on the basis that we need to ensure strategic autonomy, whether that is at European Union level or domestic level. Through the years, there have been certain core infrastructure companies that the State did not maintain when it ought to have done so, and we have paid the price for that. No matter where National Broadband Ireland, NBI, is in respect of the delivery of broadband, I think all Members accept that we would have started from a better place if Telecom Éireann had never been privatised. For multiple reasons, we need to make sure we have all the protections that are required.

In the 17 seconds I have remaining, I will do my best to deal with protections and the State. An article written by Joe Galvin and published in The Currencyrefers to a company with an address in north Dublin which has €20 million in spyware sales but pays no tax. The article is entitled "Inside the Predator's Irish lair". This is targeted spyware. Members may have previously heard of Pegasus spyware. In contrast to what happened to the HSE, this spyware facilitates those who may make a determination to take a run at a high-value target such as a journalist, a politician or whoever. Many of the sales of this spyware are located across the Middle East and other author-----

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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Authoritarian.

Photo of Ruairi Ó MurchúRuairi Ó Murchú (Louth, Sinn Fein)
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Authoritarian; that is it. Sorry. When you are down a hole, sometimes you just keep digging.

It is a specific problem. We have this within the State. It is something the Minister of State and the Government need to consider. We need to do a piece of work on it. We cannot have people who are operating within the State and putting-----

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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I am going to have to blow the whistle now. The Deputy is low on time.

Photo of Ruairi Ó MurchúRuairi Ó Murchú (Louth, Sinn Fein)
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I am. Unfortunately, I may have got tongue-tied. I apologise for that.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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It does not normally happen to the Deputy. Anyway, we are having a rather free and easy session. The Minister of State, Deputy Calleary, must be bringing out the best in us.

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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I try, a Cheann Comhairle.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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It must be his return that has us in such light-hearted form. Our next contributor is Deputy Richmond, to be followed by Deputies Mattie McGrath and Michael Healy-Rae.

Photo of Neale RichmondNeale Richmond (Dublin Rathdown, Fine Gael)
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Like other Members, I begin by congratulating the Minister of State on his recent appointment, or indeed reappointment, to a Department with which he has great familiarity, although it is some time since he was last there. We expect great things and I have no doubt that our expectation will be delivered upon.

There are many ways to approach this legislation. On Second Stage, we have relative liberty to approach it in any way we choose but the most important thing in respect of this matter is reputation. It is the reputation of Ireland Inc. and that of our economy. It is our reputation as an outward-looking country that thrives in the realm of export but, crucially, also in investment. By passing the Bill and, in turn, transposing the related directive we will further reinforce Ireland's reputation as a wonderful place to do business, invest and recruit top-quality staff. Obviously, this legislation is protecting the State, the European Union and the wider Single Market but it is also protecting our reputation. That is why I encourage the Minister of State and colleagues in this House and the Upper House to ensure the swift passage of the Bill and the swift transposition of the directive, as has been done already in other EU member states. Deputy Bruton made the point that it has only been used in 1% of flagged cases. This is the crucial importance of this legislation. There is a very small threat but if that threat is allowed to get into the ecosystem of the Single Market, it will cause untold damage not just to individual persons but to the reputation of the entire Single Market, the world's largest economic bloc.

The Bill allows and requires us to reflect on the importance of FDI in the State, going back to the early establishment of the IDA and the foresight of T.K. Whitaker. I am not going to lurch into a history lesson or offer my historical considerations on that point but I wish to underline that while we talk about the importance of FDI and cheer on great investments, huge job announcements, expansions, the recruitment of staff and diversification in the regions - of course, all Members welcome the fact that IDA Ireland and Enterprise Ireland activity is bringing job growth in every region of the country at this moment - we have to remember the fragility of the FDI model. These wonderful large or not so large companies from the US or outside the European Union that are prepared to come to Ireland and invest greatly should not be taken for granted. Their presence here is not accompanied by some sort of guarantee. We have to protect that model which has served the State so well for so long, particularly at this delicate point in global economic affairs. Since the election of this iteration of the Dáil, we have come through a global pandemic the likes of which had not been seen in more than a century, yet, in 2020 alone, Ireland welcomed €839 billion in FDI from America and €15 billion from the UK. When we were in the darkest point of the storm, FDI was there to ensure that people could continue to receive a salary. These companies were flexible and allowed people to work remotely. They were cautious and made sure they followed the public health advice but they kept the economic train going and that allowed the Government to provide the finest level of supports to the population and businesses of any developed country in the world, as noted by the OECD today.

That is never reflected on. There is great talk about doom and gloom and how big multinationals are forcing data centres to put a huge drain on our electricity supply and on our grid but when we reflect on the situation in other countries, be they close to home in the European Union or in less developed regions, we manage to get a great many things right in this State, collectively. This is not just praising the Government, but collectively across the entire House and most importantly our business sector. When we get things right, particularly our model of foreign direct investment, FDI, we have to be very careful to ensure we can maintain it. Those people who say we can simply lump loads of taxes on the big multinationals and they can pay for everything, must be wary that there are always alternatives. They are not simply coming to Ireland because we are a bit of craic. They come because we have a great model. At the heart of that model is a believe not only in the rule of law but a belief in our population, a highly educated, English speaking, outward looking population that welcomes FDI. This sort of legislation of course comes from the European Union with collective input from Ireland. This will strengthen the Single Market and Ireland's place within it. In the next couple of years coming out of the pandemic and facing the current global challenges that the war in Ukraine and so much else poses, this will place Ireland in as strong a position as is possible. It is a position that is the envy of most other countries in the European Union but a position that cannot be taken for granted. It is a reputation that cannot be taken for granted. My key closing point is to ensure that this legislation is passed swiftly, thoroughly and most importantly that it is transposed in due course.

2:37 pm

Photo of Mattie McGrathMattie McGrath (Tipperary, Independent)
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Ar an gcéad dul síos ba mhaith liom comhghairdeas a dhéanamh leis an Aire Stáit. We are delighted to see him back in harness. Whatever he does this time, I ask him not to let anyone try to attempt to take it off him. He was a capable and engaging Minister the previous time I dealt with him from 2007 to 2011 and since then, and I wish him well with the portfolio.

Regarding this legislation, the Screening of Third Country Transactions Bill 2022 from the Department of Enterprise, Trade and Employment, yes FDI has played a huge part in our country. I can go back to Merck Sharp & Dohme. It has longevity and is nearly there as long as myself. I remember I was a buachall óg when it came. It is a fabulous company. It is there 50 years or more, provides wonderful employment and is a wonderful company. There are huge numbers in FDI with huge employment and many plants. The Liebherr plant is one I know in the construction sector in Kerry, but I will leave it to the Healy-Raes to mention it, and many others that have done such gallant work.

It is interesting, as we see some people getting ready for government, that we no longer have the clamour to get rid of corporation tax from the parties of the left, on my right. Indeed we have other parties that clamour on a daily basis with outdated ideas that these are anathema and we should not have them. They bring in a huge amount of taxation. I will not get involved in any of that but obviously we have to have checks and balances as well. The perception with the data centres is a very sad one because when people face electricity outages the blame is being apportioned to them. They came in legally through our mechanisms. They were probably enticed in. The EU is happy to have them here for a number of reasons but we should not demonise them because we want more of them to come and to be able to stay here. However, as I said we have weak spots in legislation in many areas. Certainly any of the FDI companies I know of have good records. That is not to say they are all impeccable and we need to keep a close eye on them to make sure we are not a dumping ground for off finance and so forth.

I mentioned Merck Sharp & Dohme. I would like to mention many of employees I know both past and present. One very dedicated former employee who passed away recently was the late George Kelly of Cappagh White and Kilsheelan in Tiobraid Árann. George was a very active, engaged and well-respected member of the workforce in Merck Sharp & Dohme in Ballydine in Clonmel for years. In his retirement he made a huge contribution in the community in which he lived and in Kilsheelan Tidy Towns etc.

While we are passing the legislation there are senior Members of the Government and indeed the Taoiseach regularly going out to the World Economic Forums and to the Bilderberg conference. What is going on there? We have no legislation for it. People are getting worried about who we are serving, what master we are serving. I said this earlier even though the Ceann Comhairle thought I was being theatrical. It is fact. People see this. We are meant to look after our citizens in this country, not kowtowing to wealthy multibillion dollar people with huge resources and what they want the world to do for them and for us to be good boys and sign up to it. We need to look at legislation and keep a record of the travel engagements. I questioned the Taoiseach recently about what went on there. He did not tell me but he said sovereignty was not discussed or our neutrality.

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry, Independent)
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I thanked the Minister in a public forum the other day but I thank him again. On a personal basis I followed his political career for decades and always admired him. I always knew he was a person of great capability and I am delighted to see him where I like to see him. Enough about that.

At the outset I will tell a story of how FDI can work at its most practical level. In the town of Killarney was a great man, Macky Shea, who started a great business, M D O'Shea. He worked very hard. He started off cutting timber in a place call the High Wood and the Dark Wood outside Killarney. He drew that timber into Killarney town. He had a sawmill. He cut up the planks and sold them. That grew into a hardware shop which today is known as M D O'Shea and Sons. That man, Macky Shea as we called him, was friends with other business people in the town. A man came to Kerry wondering where to locate his business. He was thinking of going somewhere completely different from Killarney but he met Macky Shea and a couple of other people who took him for dinner. They explained what the town of Killarney had to offer. They took him out the following day to the Lakes of Killarney and showed him the beautiful scenery and let him see and feel what Killarney was going to be like. That man's name was Hans Liebherr. The result of that was Liebherr Cranes coming to Fossa in Killarney.

I thank God they are there but it would have made sense when importing and exporting much or all of the goods to be near deep water. That would be more beneficial but those great business people in Killarney at that time sold the location of Killarney. They sold the Kerry people on Hans Liebherr. My late father, Jackie Healy-Rae, in his time ensured that he got money for a link road in Killarney and that the name of the road is the Hans Liebherr Road. When we pass that link road we think of Hans Liebherr and the Liebherr family. We are so grateful to them for the work and the money they brought and the wealth they created. There are families in Killarney for many years who have the Liebherr family to thank for their gainful employment over the years. That is what you call foreign direct investment at its best.

This involved hundreds and thousands of people back over the years and to this present day being gainfully employed, doing excellent work in excellent working conditions. When people retired when they were tired and had served their time, they are generously treated by the Liebherr Group. We have to nurture that.

I hear some people in this House criticising people who are wealthy, for instance, Denis O’Brien or the Smurfits of the world, people who create work; and they are spoken about as if they are criminals or as if there is something wrong with them. The only thing that is wrong with those types of people is that there should be more of them so that we would have full employment and a lot more jobs. We would then have people with brains, the ability to create wealth, work, and have a positive environment for our people. That is what we want.

My whole point is that we want to ensure that through our tax regime and what people inside in this House say, we do not want people in other parts of the world to think that they will not be welcome in Ireland and that these people in this House are doing there is sitting in brown seats, jumping up and down, and talking about how everything should be for nothing, and that we do not want people who have money because we want to tax them to death, or keep them out of the place. That is not how the world works.

For us to work, we need to have people who create the jobs. We need to people like Hans Liebherr and the wealthy people of the world to come and to create jobs here. We have to make it attractive.

I could rely on a person like the Minister of State but there is a great number of people who leave a great deal to be desired because if people were thinking about coming here, they might think twice if they were listening to some the speeches. I will use my last couple of seconds to say this to the House. I hear people standing up inside here in the Dáil talking about the sooner that we get to the four-day working week. This comes from fellas who never got up in the morning and did a day’s work in their lives themselves at home, and who are lucky to be here because they would have no place else to work because they could not create a day’s work for themselves, never mind anyone else, and they never paid a man or a woman on a Friday, and never will. To hell with the four-day working week. Many of us would like to work seven days a week, if we could get it.

2:47 pm

Photo of Richard O'DonoghueRichard O'Donoghue (Limerick County, Independent)
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From a map that I have in front of me here, it looks obvious as a country that we stand out as having no screening mechanism in place when it comes to FDI. Figures released by the CSO in June 2022 show the FDI position in Ireland increased by approximately €16.9 billion in 2020 to €1.1 trillion. When compared to other OECD countries, Ireland is one of the most globalised economies in Europe, second only to Luxembourg.

The data also shows that the US is the biggest investor in Ireland and accounts for more than €830 billion, or 76%, of Irish inward FDI positions.

There were 258,558 people employed by IDA Ireland companies in the State in 2020. Some 275,384 were employed in 2021. Not everything in Ireland is attractive for FDI. Some of the more obvious downsides to attracting new businesses were housing affordability, general affordability and the cost of real estate.

On global connectivity in respect of ports and airports, the port in Belfast has been given the contract for the storage of gas in Ireland. Why is that? This is because none of our other ports were ready for it. I mentioned Foynes Port earlier today, which has had a planning application submitted for ten years to try to get storage permission for gas. We have now lost that facility to Belfast because none of our ports were ready. What does that tell us? That is a failure of Government and policy to ensure this investment will happen.

What would that have meant for Foynes and the county of Limerick? There would have been significant employment where people would start moving there and infrastructure would be built. We are talking about the Adare bypass and connecting Foynes Port by 2030 with the rail system from Limerick, but we lost a contract like that to Belfast. We talk then about investment coming into this country.

The other thing that was being looked at with regard to investors coming in to this country was the super-high cost and availability of electricity. I spoke about this issue again yesterday with regard to businesses coming in here and the excessive rates they are paying. Even though the Government reduced the VAT rate on electricity, it still took in €16.4 billion. The Exchequer is up €4.6 billion from this time last year, even though the VAT rate was reduced. How is the Government expected to get investors in to invest in this country? How are we supposed to have sustainable employment? Even the existing companies we have are running scared and are talking about reduced hours and shifts to make sure their industries will continue to work.

The new legislation aims “to provide for a process to allow for certain transactions that may present risks to the security or public order of the State to be reviewed by the Minister for Enterprise, Trade and Employment ... It will empower the Minister for Enterprise, Trade and Employment to access, investigate, authorise, condition or prohibit third country investment on a range of security and public order criteria.”

If anything has to happen in this country, it is that we need more investment and more people here, and we need security for our electricity supply and for the next generation of employers who wish to come in here. That responsibility stands steadily on the shoulders of the Government.

Photo of Michael CollinsMichael Collins (Cork South West, Independent)
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I wish Deputy Calleary the very best in his new role as Minister of State. I do no doubt his capabilities and he was an excellent choice.

The purpose of this Bill is "to provide for a process to allow for certain transactions that may present risks to the security or public order of the State to be reviewed by the Minister for Enterprise, Trade and Employment". IDA Ireland reported that 249 new investments were won in 2021. Of that, 161 were North American, 68 were European, and 21 were from countries classified as growth markets. In January 2021, IDA Ireland launched its new strategy: Driving Recovery and Sustainable Growth 2021-2024.

One of the pillars of the strategy relates to regions and IDA Ireland set out a target of having half of all investments, 400 of an 800 target from 2021 to 2024, going to regional locations. How will this be achieved? Are accountable mechanisms in place to ensure that half of all new projects are located in regional areas? If there is no accountability or follow-up, then this strategy will amount to nothing more than an empty target. Equally, it is important that real and substantive projects are located into regional areas, not merely the smaller or less attractive projects.

Based on the most recent data, 53% or 133 of the 249 new investments went to regional locations, with employment growth in every region, as shown in figure No. 4 in the strategy. The latest European Attractiveness Survey 2022 reported that Ireland was one of Europe’s top ten locations for FDI with a market share of 3% of all FDI investment in 2021, and that it attracts the highest number of projects per capita among the top ten.

We are talking a great deal about IDA Ireland and jobs but I want to ask about jobs in rural areas. In the past number of years we have seen the demise of the fishing industry. It will lead to a significant loss of jobs in my constituency. The attacks the Green Party has made on agriculture in this country, supported by Fianna Fáil and Fine Gael, will lead to a loss of jobs throughout rural Ireland. I was talking to a number of farmers at the National Ploughing Championships yesterday morning before I came up here and they have serious worries. Where are the jobs going to be and where are they going to get jobs in rural areas like Castletownbere, Mizen Head or Sheep’s Head? One does not have to go that far west; one only has to go as far as Bandon, down along the coastline to Timoleague, Barryroe and places like that.

They are finding it very difficult and have serious worries. They were gifted people at their jobs but I find that when IDA Ireland comes to town, it comes to a big town and does not come to rural communities that are losing jobs. I live in one of those rural communities where good jobs are hard to come by.

We look at the investment that has not been made by the Government in our roads. In recent years in west Cork, the Innishannon bypass has been ignored, the Bandon southern and northern relief road has been ignored and the Bantry relief road has received no money. We need to invest in infrastructure if we want to get the good quality jobs we are talking about and safeguard good jobs in our country. The problem is that we have shocking transport infrastructure. I will be talking tomorrow morning to the Minister, Deputy Ryan, about Connecting Ireland but I would call it “Disconnecting Ireland” because it has disconnected my constituency, which has little or no transport. It has the same as it had ten, 15 or 20 years ago.

These are all issues that feed into the labour market. If there is good transport and good quality roads, people and businesses are inclined to come into an area and invest in communities that are starved of investment. Unfortunately, we are losing jobs in rural communities for a number of reasons. Of course, transport and fuel costs are huge, as are electricity costs. Business owners are coming to me to talk about their doors closing because they do not see a future. I even see it with some of the hotels in west Cork, which are closing down nearly half of the week already, and we are only in September. Jobs are vital. I know people have come here with great ideas. They want to start a floating terminal in Cork for LNG, which is desperately needed in this country, but the Minister, Deputy Ryan, is kicking the can down the road and putting jobs in serious jeopardy. It is the same with the Barryroe drilling. We have potential for better jobs in rural communities but the Minister and the Government continue to ignore the facts, although the facts are there in black and white in front of them.

The Minister of State is a new man in the job and I wish him the very best. When IDA Ireland is talking about jobs, I ask him to make sure jobs are given in a geographical spread and that rural Ireland gets as much as urban Ireland, which is very important.

2:57 pm

Photo of Pádraig O'SullivanPádraig O'Sullivan (Cork North Central, Fianna Fail)
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I understand Deputy O’Donoghue wants to come back in.

Photo of Richard O'DonoghueRichard O'Donoghue (Limerick County, Independent)
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I want to wish the Minister of State the very best of luck in his new position as I forgot to mention it earlier. I have worked with him well in the past and I look forward to working with him in the future. Best of luck in the position.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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I am glad to have the opportunity to congratulate the Minister of State and wish him well. I hope we will assist him in every way possible to achieve the absolute success that he strives for.

I was tied up in committee meetings all day so I was not able to pay attention in the way that I would. I want to mention a couple of issues that come to mind. First, Britain is now a third country so we need to be careful as the number of third countries out there is growing, for one reason or another. It is important that, whatever screening is put in place, it is done in a way that is of assistance, that it protects the security and integrity of this jurisdiction and that it does not discourage FDI, or any kind of investment for that matter.

Deputy O'Donoghue mentioned that there was a gain for Belfast in recent investment; in fact, there was not. It is a gain for the island of Ireland. It so happens that Belfast was the only port available to facilitate the building of offshore electricity generation equipment. More will be required in every part of the country because that is fundamental to providing the alternative energy we have all been talking about. We have to strive towards that but we cannot achieve success in that area unless we have the basic facilities. We must have wind energy turbines, whether onshore or offshore, but we need to start on it quickly.

With regard to transactions, it is important to the integrity of the economy, North and South, that we screen in an effective way the transactions, wherever they come from or go to. It is also important that we do not impede industry and investment, or impede what is supposed to happen in the shortest possible time. I listened to somebody talk recently about objections to a public project on the basis that they had the right to object. Of course, they had the right to object but they do not have an obligation to object unless there is good reason, not just a whim. There are situations in this country where people on a whim have decided to jeopardise a project, and it is not an isolated situation and has happened on many occasions. It is not something that is going to be of assistance to us in a highly competitive workspace. We all know of instances of that.

I want to mention FDI and transactions from third countries. It is in our interest to facilitate what is going on as long as it meets whatever the statutory requirements are and as long as we are on a good footing. If we become regarded as a country that might be expected to slow down the process, people are not going to look at us a second time. They will move away and find some other place to invest and to have interaction with.

The problem is this. I know one of the things before An Bord Pleanála is the review taking place. I hope it is a worthwhile review and I am not in any way supporting light-touch arrangements, or whatever the case may be. What has to happen must happen, but it must happen with speed. We have to compete on a worldwide basis. We have to compete with whoever the people are in the marketplace. As I said the other day at a committee meeting, we must always ask who are our competitors now and with whom we compete when it comes to attracting FDI. Those are the things we have to look at. We have to ask how they are facilitating investors from third countries. Are they encouraging them, are they putting up obstacles or are they facilitating them?

I recall when we had difficulty filling the various industrial estates throughout the country, when maybe one or two tenants were tentatively approached. It was many years before we got to the situation we are in now. Hard work and endeavour brought that about, with forward planning, good solid thinking and the putting in place of whatever was required to encourage investment, business development and growth and, at the same time, ensure that investment, from the investors’ point of view and from Ireland's point of view, was on a solid footing and that we had nothing to worry about. We lost a number of investments in previous years, including powerful investments, and I brought this up at a meeting yesterday. Huge gaps were left in the local economy in Munster, Leinster and every other part of the country, and that has continued. From County Donegal all the way down the western seaboard and even in my constituency, we have had major losses. It was not always as good as it is now.

My philosophy would be to hold what we have and to encourage it. We must ensure that the highest standards apply, ensure the integrity of the systems in so far as we and the incoming investors are concerned, and try to make sure that we can compete with all of the others in the marketplace at the present time, of which there are many and growing. The tendency heretofore has been to move to low-wage economies. Mind you, as a previous speaker said, deciding we are only going to work three or four days a week does not impress me as being part of making a low-wage economy in this country. We either work or we do not work. If we do not want to work, nobody wants us and nobody will want to invest here either.

In conclusion, the proposal is genuine and will be beneficial as long as it does not backfire on ourselves, the fundamentals are retained and we can live with whatever it is we are now imposing by way of screening, and as long as the screening is effective and sufficient to meet the demands of the time.

3:07 pm

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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I thank the Deputies for their good wishes and I look forward to working with those involved in this sector. I am conscious of the old saying that there is very little difference between a pat on the back and a kick somewhere else but I nevertheless welcome colleagues' good wishes.

A lot of broader, enterprise-related issues were raised, to which we will come back. Some very interesting thoughts were expressed earlier in the debate about the direction of travel in regard to investments and so on, which definitely are worth pursuing. I join all my colleagues in thanking and acknowledging the huge and continuing work done by IDA Ireland in extremely difficult circumstances to secure investment. That investment does not just come; it comes because many things are done to secure it, one of the key elements being the dedication of IDA Ireland and its staff to pursuing it.

I will go through some of the issues that were raised regarding the Bill and offer clarification. Deputy O'Reilly asked whether the UK and US are included in the provisions, to which the answer is "Yes". I want to be absolutely clear on that. We recognise the importance of the US and, indeed, the UK as sources of investment. They have strengthened their regimes in each of the individual countries but the unit in the Department will be appropriately resourced to take on this work. I assure the Deputy I will follow up on that.

In regard to bias, this legislation is explicitly not targeting any particular country. It deals with risk-based issues and it is inevitable that investments from all countries will be affected. That is the direction of travel. The 90-day period is very much an outer boundary. Decisions will be made as quickly as possible, which is relevant to the resource issue the Deputy raised. The 90-day period really applies to transactions in respect of which risks are identified to give time to work through that particular process.

National security is a national competence and all decisions in that regard will be made by Ireland. There will not be EU input into that. Such decisions are made by Ireland only and the process is very clear in that regard.

Deputy Martin Kenny expressed concern about the whole area of criminality. The characteristics of each investor will be considered and captured by the screening process that is outlined. Our main focus is security and public order. We have a lot of other tools, including CAB, to deal with the issues he raised and to achieve the other goals. I will bring the issue relating to CAB to the attention of the Minister for Justice.

Deputy Conway-Walsh spoke about the delay in bringing through the legislation. We are one of the final countries to do it but, equally, we can learn from what has gone before us in the 18 other member states that have implemented the measures. We can take on board what they have learned in terms of roll-out and best practice. The Deputy was worried about the narrow definitions of security and public order. The Bill covers both public and private actors and includes a wide range and a relatively wide definition of sensitive assets and technologies.

Deputy Ó Ríordáin expressed concern about a reluctance to use the powers set out in the Bill. We are not putting those powers in place for decoration. They are not going up on the shelf just for the sake of it. There will be an exclusive and extensive focus on the security of the State and public order. The intent is to use those powers. The reality, however, is that the vast majority of investments do not pose a risk. This legislation covers the scenario akin to "in case of emergency, break glass". We need to keep that in mind. It will be rarely used and we still will be a very attractive destination for FDI. Certainly, there is no disincentive to FDI in the Bill.

Bhí an Teachta Ó Cathasaigh ag caint faoi chúrsaí oideachais agus infheistíocht san oideachas tríú leibhéal. Níl sé sin mar chuid den Bhille seo ach is pointe an-tábhachtach é. Tá sé tábhachtach go mbeidh comhrá againn faoi infheistiú i gcúrsaí oideachais.

Deputy Patricia Ryan voiced concern about human rights and workers' rights. As I said, the focus of the Bill is very much on security. There are other tools to drive a focus onto the issues she raised.

Deputy Durkan referred to the UK being a third country, as was the choice of its people. We did not ask them to do that. The system as laid out in the legislation is very efficient. It is clear that in the case of transactions in respect of which no risk is identified, the system is efficient and robust enough to identify that.

I thank all the Deputies for their comments. We will bring the Bill to Committee Stage and it is important that we get it passed and in place as quickly as possible. I thank the Acting Chairman and the Ceann Comhairle for facilitating the debate and the officials involved in helping to ensure, we hope, that the Bill secures universal acceptance. It is a technical Bill that took a lot of work on the part of the officials in my Department, for which I thank them.

Question put and agreed to.