Joe O'Toole (Independent)

These issues change with the public mood. The provenance of this legislation is simple. As Tánaiste and Minister for Enterprise, Trade and Employment, the Minister's predecessor would deal with this issue very quickly. When she was in front of the Committee of Public Accounts in 2002 discussing the issue of offshore accounts, she said we would never again have to listen to the argument that people did not know about something. This was reiterated throughout her speech and that was the reason the 2003 Bill was published, namely to deal with the "We didn't know" issue.

We do not want people to be thrown into jail for something of which they are not guilty or something about which they could have no knowledge. We must be reasonable and decide whether they should or could have known about it. We could not possibly find somebody guilty of something they could not have known about. When the 2003 legislation was passing through the House, a colleague who was in the House then but who is not here any more - a director of Independent News and Media - asked how he as a director could be held responsible for something that went on in the back offices of the South African part of the company. That is not what is implied here, but all these things tie in together.

When we come to the amendment I have proposed, I will remind the Minister about what she said about the Director of Corporate Enforcement. I will also remind her it is about materiality. Did people have the structures in place to ensure compliance? Perhaps the Minister will tell us about the contravention of section 31 in her response and how it might arise. Perhaps she will tell us the kind of decisions that would need to be taken before we get into it.

My colleagues keep talking about this being a country where we must make it easier to do business. I support that idea. I have spent months in Government Buildings over the years negotiating national agreements to ensure this. It is, for example, about finding balance between the Virgin Islands and France. It is trying to find the in-between position where people act reasonably and responsibly and within the law. I do not want to overstate the situation, but over the weekend I listened to discussion about Burma and how it deals with people who cannot meet their liabilities or who act in contravention of financial regulation etc. They are dealt with quite summarily.

I do not want to go into a history lesson, but it is important to recognise how we got to this position. All these things operate on the basis of trust and confidence. Before we had companies' legislation, people shook hands on their agreements. Documents were not signed in the stock market until recent decades, because the day one defaulted was the day one went out of business and nobody would deal with one anymore. From where did this practice come? It came from the middle ages and the question of how to deal with finance, beginning in places like Genoa and Barcelona where trading between nations began. The people in these areas often relied on the Jewish community with regard to how business was conducted, because the Jewish community was allowed to deal with money when Christians were not. Under the Christian code of conduct at the time usury was not allowed. However, I assure Members that Christians found ways around that.

The issue then was that if people could not meet their liabilities, it was a capital offence and they were hanged outside the door of their business. That kind of uncivilised behaviour is not acceptable at any level now, but it is important to remember that was how they dealt with the issue. How do we deal with it? We dealt with it by saying that people must be able to do business. They must be able to take reasonable risks in trade and to operate in an unencumbered way. Therefore, we introduced the concept of limited liability. I asked the Minister about this on Second Stage. Limited liability is a gift the Minister hands out to entrepreneurs, business people and others. It is a gift, a privilege and a function of democracy. It is something we give out and value and must be acted upon in a responsible way.

What we need to do with this legislation is find balance. How does somebody come to contravene section 31? Is it reasonable to say the structure should be in place so an officer of a company would have to know about something? That is the question. If an officer of the company could set up a structure in such a way that he or she was not required to be told, informed, made aware of or sign off on something, but then could claim two months later that he or she did not know about it, we are making fools of ourselves. This is what we must examine in order to move things forward. It has all to do with the structures, compliance, being reasonable and acting within the spirit of the legislation.

We must bear in mind at all times what Senators Quinn and Cannon have said about not burdening people unnecessarily. In doing that, we also want to ensure they have put in place the structures within their companies that will ensure nobody loses out. I do not want to mention particular issues, but that is what happened recently. I thought I would never hear it again, but we heard it last month. Here in the House people were asking if other directors knew about loans. People were saying: "Your man was chief executive and a director and then became chairman, so he had to know". We were back wondering who knew and how they knew. We all know they should have known. Therefore, the structures should be in place to ensure that if somebody breaches section 31, he or she can only do that by breaching the controls within the company. If somebody does that, it is fraud. That is a different issue altogether and somebody else cannot be held responsible for it. This issue goes to the core of what we are talking about.