Noel Treacy (Galway East, Fianna Fail)

Is cúis áthais dom a bheith ar ais anseo arís chun Bille na gComhphobal Eorpach 2006 a chur faoi bhráid an tSeanaid. Tá mé ag súil go mbeidh spéis mhór sa díospóireacht an-tábhachtach seo. Le comh-oibriú na Seanadóirí, beimid in ann an Bille seo a chur i dlí na tíre.

I am pleased to bring the European Communities Bill 2006 before the Seanad. The Bill is short and technical but has an important national purpose. It is designed to enable us to discharge our European Union obligations in a proper manner. This is a necessity to which I am confident all Senators will subscribe.

The Bill contains just five sections which I will detail after I have provided the background to the Bill and its rationale. It has been drafted with a view to addressing the consequences of the Supreme Court judgments in two cases, known as Browne and Kennedy, heard in 2003 and 2005. The effect of the judgments has been to cast doubt on the mechanism used to give effect to European Community law where supporting domestic provisions are also required. As a result, doubt has been also cast on the validity of a range of statutory instruments adopted by successive Governments for the purpose of implementing EC law.

In light of the Browne and Kennedy judgments the prime purpose of the present Bill is to ensure an effective mechanism is available to transpose European Community measures which require domestic supporting provisions. The Bill will also validate a quantity of statutory instruments introduced since we became members of the European Communities in 1973. As part of its purpose in ensuring the effective implementation of EC law in Ireland, the Bill allows for the creation of indictable offences. Given the nature of the European Union, it is essential to be in a position to enforce Community law by introducing, where necessary, dissuasive penalties available only for indictable offences.

The effect of the Bill will be to improve the effectiveness and efficiency of the procedures we use to implement EC law. If Ireland is to retain its proud place at the heart of the European Union and avail of the full benefits of membership, it is imperative we fulfil our side of the bargain and implement EC laws to which we have committed ourselves on foot of decisions taken by the Council of Ministers and the European Parliament. These unique decision-making arrangements are provided for in the EU treaties to which we have subscribed and our people have approved by referendum on a number of occasions since 1972. It is only by all member states living up to their commitments that the wide-ranging and complex work of the European Union can continue to evolve and serve the interests of the Irish people and the people of Europe as a whole.

Let us take this opportunity to reflect on the advantages which EU membership has conferred on Ireland over a period of more than three decades. Senators will agree that membership of the European Union has been pivotal to our contemporary success. Looking back, the decision we took in 1972 to join the then European Economic Community can be regarded as a turning point in our modem history. It was unquestionably the right decision.

By acceding to the EEC, we expressed a vote of confidence in ourselves and our capacity to stand tall among the great nations of Europe. This decision has paid rich dividends. Not only have we shown ourselves capable of competing economically with our European neighbours but we have become genuine Europeans, contributing to the shaping of our continent and no longer typecast by others as history's perennial victims. Ireland is now widely viewed as a conspicuous European success story.

European involvement set this country firmly on the road to economic progress, unprecedented prosperity and full employment. It has helped banish the scourge of mass emigration and dispersed the clouds of under economic achievement that had been our lot for much of our independent history.

In 1973, we joined a community that was driven by the noble ideal of uniting Europe so as to prevent war and bring the people of our long-fractured continent closer together. In throwing in our lot with our European neighbours we also aspired to create better lives for our people by opening new markets for businesses, attracting foreign investment and securing improved living standards for farmers and workers alike. As we look around the Ireland of 2006, we can see that our European journey has been a highly productive and rewarding one. Europe has worked for Ireland by providing us with an economic and political framework within which we could thrive and prosper.

Ireland has been also good for Europe because nowhere else have the objectives of EU integration been so handsomely realised. On six separate occasions, Ireland has occupied the EU Presidency and thus given distinguished leadership to the Union. This has enhanced our international profile and enabled us to play an active role in world affairs in keeping with Ireland's national values and traditions.

In May 1972, the people of Ireland approved the third amendment to the Constitution, which stated, "No provision of this Constitution invalidates laws enacted, acts done, or measures adopted by the State necessitated by the obligations of membership of the Communities, or prevents laws enacted, acts done or measures adopted by the Communities or institutions thereof, from having the force of law in the State". The subsequent European Communities Act 1972 confirmed:

[T]he treaties governing the European Communities and the existing and future acts adopted by the institutions of those Communities shall be binding on the State and shall be part of the domestic law thereof under the conditions laid down in those treaties.

The clear intention of the constitutional amendment and the 1972 Act was that the State must fulfil those obligations necessitated by our EC membership.

From my perspective as Minister of State with responsibility for European Affairs, I can clearly see that there are two sides to the coin of EU membership. There are both opportunities and responsibilities. The opportunities of EU membership are manifold. Our key EU responsibility is to live up to our treaty obligations, notably by giving proper domestic effect to European Community law. Over the years, Ireland's success in Europe has gone hand in hand with a diligent and faithful approach to implementing our EU obligations and this is as it should be. Those statutory instruments whose validity has been called into question by the Supreme Court judgments were made under powers given to Ministers by the Oireachtas but which did not specify that those powers could be used for the purposes of giving effect to EC law. It was a simple omission. Those ministerial regulations were all drawn up and applied in good faith on the basis that they allowed us to give full effect to EC law.

The legal basis on which these statutory instruments were applied has, however, now been called into question. It is imperative that this situation be rectified by the Oireachtas so that any doubt surrounding the mechanisms for giving effect to EC law is removed. The present Bill will ensure this is done.

Successive Governments have given appropriate priority to the crucial task of implementing European Community law in Ireland. They have appreciated the imperative of meeting our obligations under the EU treaties. Not only is this a legal requirement, it is also highly desirable in its own right so that Ireland can reap the full benefits of the many positive legislative developments that have taken place within the European Union since 1973.

This Bill also provides for the creation of indictable offences. There may be those who will question the need for this. They may ask why it is necessary to give Ministers powers in 2006 to create such offences if indictable offences were not provided for in the 1972 Act. Much of the explanation stems from the extraordinary evolution of the European Union since 1972, a process from which Ireland has benefited enormously.

The European Union's development since Ireland joined in 1973 has had many landmarks. In terms of the evolution of EC law, perhaps the single most important milestone was the creation of the Single Market in 1992. This removed most of the remaining internal non-tariff barriers to trade within the European Union. The Single Market extended trade liberalisation from goods to services and capital, bringing sizeable and lasting benefits for Irish traders. Irish firms gained significant cost reductions through cheaper inputs, transport, insurance and packaging. The increased competition generated from improved market access across borders also brought about price reductions. In turn, this led to an increase in demand and output and boosted trade between EU member states.

The smooth operation of the Single Market has necessitated a significant amount of EC legislation which needs to be transposed domestically. It is worth noting that Ireland has implemented more than 2,700 internal market directives in our years of membership. Ireland has benefited directly from agricultural support, and social and regional development and cohesion funding since we joined the EEC, all of which derive from measures which we have shaped and agreed with our EU partners. The resulting financial transfers have been wisely invested by successive Governments in projects and programmes to tackle the problems of under-development, regional imbalances and peripherality which had held this country back for generations.

Within Ireland, cross-Border trade has also increased dramatically. The Single Market laid the basis for the elimination of the technical, administrative and indirect taxation barriers between North and South. These developments provided considerable stimulus for the expansion of North-South trade in addition to offering opportunities for increased economic co-operation across a wide range of areas. They also enhanced the work of the economic development agencies, the International Fund for Ireland and the various other bodies and groups that work together to improve the competitiveness of the economy of the island of Ireland.

Senators will recall that this House recently debated the Bill to give effect to the Special EU Programmes Body, which is the managing and paying authority for certain EU programmes in Northern Ireland and the Border counties. It is responsible for a budget of more than €1.2 billion encompassing almost 6,500 different projects. All this activity is ultimately dependent on EC law that we need to be able to implement properly.

The creation of the Single Market accelerated the internationalisation of our economy. A large number of Irish service firms in the banking, aviation and technology industries benefited from the opportunities that opened up to us in 1992. It is no coincidence that our economic revival can be dated from around the time when the Single Market came into being. Most of the increase in Irish employment during the 1990s was in this key services sector. The subsequent introduction of a single currency on 1 January 1999, further strengthened the cohesion of the Single Market to Ireland's great benefit as the only English-speaking eurozone economy. As a result, Ireland's economy is now firmly anchored in the skills and talents of our people and the unhindered access we enjoy to the world's most lucrative marketplace.

The creation of the Single Market has been one of the main factors behind the surge of foreign direct investment into Ireland during the 1990s. In 1972, a mere €16 million came into the economy from foreign investors. Thirty years later, with full access to European markets, we now measure foreign investment in billions of euro. Total investment has exceeded €30 billion and our economy has been transformed, with in excess of 128,000 people employed in more than 1,000 companies in the foreign-owned sector.

Irish consumers have also seen great benefits from EU membership. These changes have made travel abroad for thousands of Irish people simple, safe and relatively inexpensive. Not long ago, air travel was the preserve of the fortunate few. Today, popping over to London, Lisbon or Ljubljana is a widely accessible option. If we are unfortunate enough to fall ill when abroad, we can access free emergency care thanks to the European health insurance card. If our airline cancels our flight, we are entitled to compensation. The euro now means that we can buy breakfast in Ballinasloe, lunch in Lyon and dinner in Dusseldorf without ever having to change currency. These examples underline the extraordinary benefits that membership of the EU has brought to all the people of Ireland. These advantages did not come from thin air but are the product of EC law.

Irish people have endorsed major treaty changes at every stage of the Union's evolution and the Houses of the Oireachtas have been to the forefront of the legislative effort to align our national laws with EC requirements. European Union membership has involved almost every Minister of the Government bringing forward measures to give effect to European law with the many benefits it brings. Irish officials are deeply involved in the complex process which gives rise to EC law. It represents a unique pooling of sovereignty in which our interests are combined in a manner that benefits all.

European Community law is not something that is imposed on us from the outside. We are full and active participants in the elaboration of this unique body of law. It arises out of treaty provisions which the Irish people have endorsed at every step. Everything that is done in Brussels is treaty-based and we are at the heart of the decision-making process at all levels. The European Union itself has been on a journey of historic change over the past 33 years. It has been transformed from a small group of continental western European states into today's Union of peoples stretching from Galway to Nicosia, and from Stockholm to Seville. From an agricultural free trade bloc, the EU has evolved into an economic and monetary union with a Single Market and a Parliament elected by voters in 25 countries which will soon total 27 countries. The development of the Union's role is to be seen in its comprehensive legislative action across the range of its economic and social policies.

As Europe has changed, so too has Ireland's engagement with Europe. Thirty years on, our EU involvement has deepened, matured and, inevitably, become more complex. The process by which the Community enacts legislation is necessarily elaborate and complicated. Legislation in the Union's first pillar, which deals with economic and social matters, affects the work of most Departments. It has legislative implications for the work of those Departments who participate fully in the shaping of EC legislation in Brussels. It is worth noting that over recent years the number of new directives adopted has averaged around 55 per year.

The Union has been able to evolve and benefit Ireland because it is a rules-based environment. Small countries like ours have much to gain from such an environment, which provides protection for our interests. These are rules that must be implemented equally across all member states. Article 249 of the EC Treaty sets out the three different ways in which the Community makes its laws, namely, regulations, directives and decisions. Community regulations are binding on all member states and are directly applicable. Decisions are binding on the member states to which they are addressed. Directives on the other hand are binding as to the ends to be achieved but they leave member states some choice as to how those ends are to be achieved.

Members of the Oireachtas Sub-Committee on European Scrutiny, which was created in recent years in response to the EU's evolution, will be very familiar with these different instruments of EU law-making. I applaud the work of that sub-committee which has been in operation for nearly five years. The sub-committee scrutinises draft legislative proposals across the full range of the Union's activities as provided for in the Oireachtas Scrutiny Act 2002. Officials in all Departments are required to prepare scrutiny notes on draft legislative proposals within four weeks of their formal circulation. Ministers and officials are also required to be available to provide additional material and to brief committees of the Houses. Reports are produced every six months by Departments on developments within their policy areas in the European Union. My Government colleague, the Minister for Foreign Affairs, Deputy Dermot Ahern, and I brief the Joint Committee on European Union Affairs in advance of almost every General Affairs and External Relations Council meeting. This provides an invaluable opportunity for engagement with the Oireachtas on broad aspects of EU policy.

One of my responsibilities as Minister with responsibility for European affairs involves chairing the Government interdepartmental co-ordinating committee on European Union affairs. At our regular meetings, we review how Ireland is doing in transposing EC law and meeting our membership obligations. We are making satisfactory progress but it is undoubtedly the case that the increasing volume of European Community measures requires us to look in a strategic way at our procedures and at our capacity to meet our obligations fully and in a timely fashion.

The net point I want to make is that European Union affairs are very much a part of the day-to-day work of the Oireachtas and we have devised effective procedures for ensuring full Oireachtas involvement. The draft constitutional treaty will, when it is implemented, provide for a further enhancement of the role of national parliaments in European Union business. The Bill will significantly help to speed up the rate of Ireland's transposition of EU directives. This is an important national objective. Speedy and effective implementation will serve to enhance Ireland's standing within the Union.

When Ireland joined the European Communities, these Houses passed the European Communities Act 1972 as the principal legal instrument for implementing EC law. The Act provides that the treaties governing the European Community and the existing and future Acts adopted by the institutions of the Community shall be binding on this State and be part of domestic law. At the time of the passage of the 1972 Act, the scope of European Community law was relatively limited. Senators will be aware that section 3 of that Act provides that a Minister may make regulations enabling EC law to have full effect in domestic law. Such ministerial regulations may not, however, create an indictable offence.

The absence of such provisions in the 1972 Act has led to the practice of Ministers of successive Governments using regulation-making powers in purely domestic legislation, breach of which is an indictable offence, to ensure full effect was given to the EC instrument being transposed. In this Bill, the Minister will have only a limited power to make provision for indictable offences where necessary to meet our treaty obligations and the Minister, where it is necessary, will do so within the parameters set down by the Oireachtas in the terms of section 2 of this Bill.

In the cases of Browne and Kennedy, the Supreme Court found that regulations made under a domestic regulation-making power, which did not specify as one of its purposes that of giving effect to EC law, could not be used for the purpose of transposing EC measures. Accordingly, a statutory instrument to give effect to European Community law can validly be made only where the Oireachtas has specifically provided for this in relevant primary legislation. The Attorney General has advised that statutory instruments made under these types of procedures by Ministers of successive Governments since 1973 are susceptible to legal challenge. The Bill before us will confirm the validity of all such measures and will enable statutory instrument making powers under any Act of the Oireachtas to be used to implement European Community law.

No doubt some Members may be wondering why it is necessary for the Bill to give Ministers the power to create indictable offences under the 1972 Act. As is clear from my earlier remarks, European Community law has evolved greatly in the past 33 years. It now encompasses a much wider array of issues. As the Union evolves, there is a greater need for more stringent penalties in domestic measures to meet our obligations under the treaties. European Community instruments, which are implemented through domestic regulations, require the sanction for breaches to match the importance of the obligations being created. In many cases, the sanction available for summary offences does not meet the requirements of European Community law that sanctions be effective, proportionate and dissuasive.

I am convinced there is a need to be able to provide for enforcement by means of more rigorous penalties in regulations without having to resort in every such case to the introduction of primary legislation in the Houses of the Oireachtas. If the Government needs to resort to primary legislation on each occasion, this will inevitably slow the implementation of European Community law and potentially leave us in breach of our treaty obligations.

I will now take Senators through the main provisions of the Bill. They will have received the explanatory and financial memorandum attached to it. Section 2 will give Ministers the power to create indictable offences in regulations made pursuant to the 1972 Act where the Minister deems such a sanction necessary for more serious breaches of European Community law. The Bill provides for a maximum fine of €500,000 and a maximum term of imprisonment of three years. In some cases, it may be necessary to provide for stronger penalties than those available in this Bill. Ministers in these cases will have to provide for such penalties in other legislation, either existing legislation which already provides for such penalties or, if no such legislation exists, Ministers will have to propose new legislation which will be fully debated by the Oireachtas.

Section 3(1) will permit statutory instrument-making powers contained in existing primary legislation to be used to give effect to an EC law provided the European obligations imposed upon the State relate, in whole, to matters to which the statutory instrument making power relates. It will allow the regulation making power in any Act of the Oireachtas to be used for the purpose of implementing EC law as long as the domestic Act deals, in whole, with the policy area that the European Community measure covers. It is entirely appropriate that legislation intended for domestic purposes can be used for the additional purpose of giving effect to EC law also.

Section 3(2) takes account of the primacy of European Community law. It replicates the existing provision in the 1972 Act which allows regulations made for the purpose of giving effect to EC law to amend primary legislation. This provision must be replicated to allow statutory instruments made under the new dual purpose power under section 3(1) to amend primary legislation where this is necessary for the purposes of giving effect to European Community law. Without this section, statutory instruments made by Ministers and validated under section 4 of this Bill could not be subsequently amended or revoked except by primary legislation or regulations made under the Act of 1972.

Section 3(3) is intended to enhance transparency of the implementation of Community legislation into Irish law by requiring a statutory instrument that gives effect to an EC law to refer to that law. Put simply, the statutory instrument being used to give effect to a particular European Union measure must refer specifically to that EU measure.

Section 3(4) confines the exercise of the power to make statutory instruments to Ministers. Section 4 will confirm the validity of all regulations giving effect to European Community law made under a domestic regulations-making power. This confirmation shall not affect the constitutional rights of any individual.

My officials have consulted widely with Departments and, in particular, with the Office of the Attorney General in the preparation of the European Communities Bill 2006. I look forward to a positive and supportive debate on this important and much-needed change to the manner in which we implement European Community law in Ireland. This Bill represents an important updating of the 1972 Act for the purposes of responding to the relevant Supreme Court judgments and ensuring we are in a position to give proper and timely effect to European Community law. I, therefore, commend this Bill to the House.