Tony Killeen (Clare, Fianna Fail)

The Ombudsman has submitted a special report to the Dáil and Seanad in accordance with section 6(5) and (7) of the Ombudsman Act 1980. The 1980 Act does not set out a procedure to be adopted by the Oireachtas in dealing with this matter. I am very pleased to have the opportunity to make this statement to the Seanad to set out my position on this matter.

As I have stated on a number of previous occasions, I hold the Ombudsman, her office and the work it does in the highest esteem. I have acknowledged in the Dáil that her investigation into this matter has been painstaking and extensive. I wish to take this further opportunity to record my sympathy with the family in question as well as the many other families who have lost loved ones to the sea.

The lost at sea scheme which is the subject of this report was conducted in 2001, initiated by the Department of Marine and Natural Resources. Responsibility subsequently moved to the Department of Communications, Marine and Natural Resources in 2002. The Department of Agriculture, Fisheries and Food assumed responsibility for sea fisheries related matters only in October 2007.

For the information of the House, I will set out a brief outline of the scheme, the context in which it was promulgated and the outcomes of the applications received and will then explain why the Department disagrees with the Ombudsman's findings and her recommendation that monetary compensation be paid in this case.

The lost at sea scheme was a limited scheme introduced in June 2001, with a closing date of 31 December 2001, whose objective was to enable qualifying applicants, who were otherwise unable to do so for financial or related reasons, to continue a family tradition of sea-fishing. It was targeted at people who had been employed in fishing and wanted to continue fishing. It was a bounded, time-limited scheme under which replacement capacity, expressed as gross tons and kilowatts, that would otherwise have had to be bought on the tonnage market, was provided free of charge to qualifying applicants. The eligible applicants were those who had lost a fishing vessel between 1980 and the establishment of the sea fishing boat register in 1990, but who had been unable to replace the fishing vessel for verified financial reasons. The scheme was intended to assist families in introducing a replacement for the lost vessel that would be owned and skippered by the applicant or by an immediate relation of the applicant. The objective of the scheme was to allow fishermen or their immediate families to get back to fishing, not to award any monetary benefit. I emphasise that the scheme was not introduced to provide a means for a party, who had, however tragically, lost family members at sea, to obtain payment from the State for this loss.

The terms of the scheme also specified further conditions relating to the use of the capacity once deemed eligible. For the information of the House, "capacity" is a term used to describe the gross tons, GTs, which is a measure of volume, and kilowatts, kWs, of power of a fishing vessel. The total capacity of the Irish fishing fleet is limited to 88,700 GTs and 244,834 kWs under EU Regulation 1438/2003.

When the new sea fishing boat register was introduced in 1990, all vessels registered at the time were awarded the capacity of their vessels, effectively free of charge. However, any vessel that had previously sunk or had otherwise been destroyed clearly could not be registered. Any such owner looking to return to fishing would have had to buy a replacement vessel and the necessary capacity. In time, despite the fact that it was awarded free of charge, capacity became a valuable commodity because the overall capacity of the Irish fleet was capped under EU fleet management rules, to which I referred. Although the Department had no role in the tonnage market that developed, there were indications that capacity was changing hands for up to IR £4,000 per gross ton at the time the scheme was introduced. By way of illustration, fishing vessels in the polyvalent general fleet segment, which is the largest segment in the Irish fleet, currently range up to over 500 gross tons. The need to source tonnage clearly would have been a significant additional financial burden on families wishing to replace their boats and continue fishing.

Records in the Department, made available to the Ombudsman, show a range of contacts, meetings and correspondence going back to March 1999, to and from interested parties in respect of this issue. These included public representatives, individual vessel owners, fishermen's representatives and producer organisations, POs. It was argued that there were a number of cases where the cost of purchasing replacement capacity was a factor in preventing families from getting back into fishing after losing a vessel. The records also show that there was both support for and opposition to such a scheme from within the industry. It is clear there was a view in some quarters that it would be unfair effectively to award free tonnage to some while by this time others had to pay a high price on the tonnage market. On the other hand, some supported the proposed scheme. The views of officials from the Department of the Marine and Natural Resources on the merits or otherwise of such a scheme and some of its conditions were also clearly recorded. The emphasis, from the administrative perspective, was on the importance of ensuring that any such scheme could be strictly limited to those who met the criteria of the scheme. Once the decision to have a scheme was made, the terms and conditions of the scheme that emerged from this process necessarily reflected the views of all the stakeholders as well as public policy considerations and EU and national legal requirements at the time.

Time constraints do not allow me to list all the published conditions of the lost at sea scheme, but I shall highlight two that I believe are central to the issue:

(1) The boat in question is shown, by reference to log sheet returns or other appropriate records, to have been in active and continuous use for a considerable period of years by the person concerned for sea fishing of a category now covered by the replacement policy rules, until its loss at sea.

(2) Applications under the scheme must be received by 31 December 2001.

These conditions were non-discretionary, objective and quite stringent and were intended to ensure that (a) only those who met the criteria in full were successful, (b) only the immediate family could benefit from any capacity awarded, (c) the benefit of the capacity would allow the family to return to fishing and (d) the capacity awarded could not be sold or turned into a monetary amount. The scheme was launched in June 2001 with a closing date of 31 December 2001. It was aimed at people and families who had a tradition in fishing, had been actively fishing and wanted, through the scheme, to return to fishing. Given those objectives, it was advertised widely in the major fishing trade papers in Ireland, the Marine Times, The Irish Skipper and the Fishing News, and the various fishing representative groups, including all of the producer organisations, were asked to assist in publicising the scheme.

The Department had knowledge of some 16 cases at the time where fishing vessels had been lost at sea during the relevant period, and the owners of those vessels received written notification of the new scheme and were invited to apply. Two of these cases were ultimately successful. The advertising was quite successful and the scheme, despite its tight restrictions, was well responded to. Apart from the 16 cited above, a further 37 letters and information issued to persons who contacted the Department directly looking for information after the scheme was publicised. There were 68 applications by the closing date, of which six were successful in meeting all of the conditions of the scheme and were awarded replacement capacity. A number of the 62 unsuccessful applications failed to meet more than one of the qualifying conditions.

I want to emphasize that the scheme did not provide for the purchase of a replacement fishing vessel itself. The capacity given, under the strict terms of the scheme, could not be sold on or otherwise traded or realised as a financial asset in the tonnage market. The scheme was launched in June 2001, ran for six months, and closed on 31 December 2001. The complaint that is the subject of the Ombudsman's special report was made by one additional applicant whose application for the lost at sea scheme was received in January 2003, over a year after the closing date. That application, received on 7 January 2003, was refused on the basis of being over a year outside the closing date of 31 December 2001 and that the lost vessel was not in active continuous service prior to its loss. For the purpose of the administration of the scheme, this was deemed to be two years minimum.

In November 2004, the son of the owner, who had been lost with the vessel, made a complaint to the Ombudsman that the decision to refuse his family's application was unfair on a number of grounds, principally that his family had not been made aware that the scheme existed and that their circumstances were such that they ought to have qualified under the scheme in the first instance. After extensive examination and correspondence between the various parties, the Ombudsman found for the complainant in her first draft report, and decided to award substantial monetary compensation to the family. The Ombudsman concluded that the particular family did not meet at least two of the conditions of the scheme and that it had been adversely affected by the failure of its application.

The Ombudsman's main criticisms of the scheme and her stated reason for recommending monetary compensation to the family involved were, essentially, that no element of discretion had been allowed for in its design and that it had not been adequately advertised. Her criticism of the advertising of the scheme is offered as the basis for disregarding the closing date in this instance. In her investigation report, she states that she has concluded that the way the scheme was advertised was too restrictive and could have been more comprehensive and targeted. This appears somewhat contradictory. The facts are that the scheme was well publicised, particularly within the fishing community which was its target audience. The family in question, although out of fishing for the previous 20 years, was still living in that fishing community. Some 16 known cases were written to and invited to apply for the scheme, of which only two were successful. Advertisements were placed in the three main fishing newspapers and fishermen's representative organisations were asked to help publicise it. Another 37 letters were issued to individuals who made enquiries either by letter or telephone but did not subsequently make an application. There is no certainty that an advertisement in the national newspapers would have been a better way to reach the target audience. While it would, perhaps, have been more comprehensive, it would have been much less targeted than publicity in the fishing journals and communities. I am satisfied, given that the scheme was aimed at people with a family tradition in fishing who had been active in fishing and who expressly wanted to return to fishing, that targeted advertising and using the communication channels most commonly used by the fishing industry and fishing communities were entirely appropriate ways to publicise the scheme. All told, a total of 68 applications were received by the closing date of which six were successful.

The Ombudsman has acknowledged that the family did not meet two of the conditions, but appears to suggest that if an element of discretion had been formally included, it would have been exercised in favour of the family with regard to both conditions. Normal administrative practices involve the exercise of a certain amount of discretion and common sense. Even if some form of discretion had been formally built into the scheme — I am not sure how that could have been done — it could surely not have been expected to be applied to an application received over a year after the closing date. Given that only six applications out of 68 met all of the qualifying conditions, it could equally be argued that all or many of those 62 unsuccessful applicants could have been successful if the application of the conditions was entirely flexible and discretionary.

I and the Department have consistently taken the view that this scheme, once decided upon, was properly and fairly administered by the Department of Communications, Marine and Natural Resources, which had responsibility for the scheme at the time. The Ombudsman has expressly acknowledged that she found no evidence to suggest that once the scheme was launched, it was not applied equitably. In coming to my view on the Ombudsman's report, I considered all relevant aspects and implications, including the legal aspects, and as a matter of course took legal advice which was considered and acted upon. I continue to believe that, in this case, there is no basis for payment in the amount proposed or any amount. In the first instance, the lost at sea scheme did not envisage any monetary awards. The capacity awarded to the successful applicants could not be traded, sold on or otherwise disposed of for financial gain. Furthermore, the successful applicants had to provide a replacement vessel from their own resources and cover for its running costs in order to be able to make use of the capacity awarded. In the case of the family in question, the lost vessel had not been replaced and no immediate family member had continued in fishing in the 20-year period between the accident and the inception of the scheme. That being the case, and given that the scheme was intended to allow families to continue a family tradition of sea fishing, the assertion that the family was disadvantaged by the failure of its application some 20 years later is difficult to stand over. In the exchange of correspondence, the Ombudsman contends that while the family had received a substantial insurance payout, this was not relevant to her investigation or to the scheme.

While holding the position that failure to meet both the closing date and another important condition of the scheme must rule out this or any application, I also want to take issue with the basis for the Ombudsman's proposed compensation figure of €245,570. In her special report, the Ombudsman outlines the basis on which she believes that the amount recommended is reasonable. The amount was arrived at by using the methodology and rates used in the 2008 decommissioning scheme, a completely separate and unrelated scheme which involved successful applicants being paid to give up a working active vessel and its capacity voluntarily, to pay to have it dismantled and to lose its future stream of income.

At the Ombudsman's request, the Department provided calculations on the basis of the decommissioning scheme rates and the tonnage of the lost vessel, on the understanding that this was a starting point in her consideration of an appropriate amount of compensation. The Ombudsman cites the average payments to the successful applicants under that scheme as being comparable. I do not believe that the situations are in any way comparable. In the case of the decommissioning scheme, the vessel owners had the expense of purchasing a vessel and maintaining it. The rates payable under that scheme were intended to incentivise and compensate those owners to decommission voluntarily their vessels entirely and forego the income they would get into the future from continuing to operate those vessels. The Ombudsman is not correct that successful applicants under the decommissioning scheme had the option of selling on their vessel. On the contrary, the decommissioned vessel had to be scrapped at the owner's expense and the tonnage could not be sold on or otherwise transferred. I reiterate my view that payment in the case investigated is not warranted in the amount specified or any amount in this case.

The Department remains concerned that the recommendation in this specific case would give rise to major financial liabilities arising from claims from others who were unsuccessful applicants under the scheme. The special report asserts that the recommendation relates to this case only, that the analysis, conclusions and findings flow from the particular circumstances of that case alone and have no implications for other unsuccessful applicants. Following full consideration and on foot of legal advice, I do not accept that this assertion is consistent or logical. The Ombudsman's finding was that the design of the scheme itself and the manner in which it was advertised were "contrary to fair and sound administration" and that the family concerned had been treated unfairly as a consequence. I do not accept this. The scheme as applied to this case was the same scheme as that applied -equitably as the Ombudsman has acknowledged — to all the other applications received. The considered legal advice given to the Minister contends that it is likely the Ombudsman's recommendation with regard to monetary payment may result in other unsuccessful applications for this scheme looking for the same consideration. I am not convinced that some or all of the unsuccessful applicants would not pursue cases if the recommendation was accepted. Furthermore, some of the successful applicants for the scheme, who could not take up the capacity awarded because of the strict conditions, might seek to use the precedent created by any change in the conditions of the scheme as a result of the Ombudsman's recommendations being acceded to. In addition those who contacted the Department in the year after the scheme had closed, of whom there were several, or those who might have applied in that period, could also seek to build a case on the basis of the Ombudsman's recommendation.

At this stage, it is impossible to estimate the financial outlay or potential liability that might be involved with any accuracy, but there is no doubt that it is likely to be substantial and have a serious financial impact at this time. More importantly, there are also implications for the operation of other administrative schemes across Government that have application deadlines. We are all familiar with schemes that operate to strict deadlines that are enforced and have a very direct effect on people's daily lives. Deadlines are a fundamental feature of most schemes and are strictly enforced and adhered to generally in accepting or rejecting applications. Totally discounting the deadline in this scheme and accepting the validity of an application that was over a year late, as the Ombudsman has recommended, could have very wide and probably incalculable financial and other implications for public administration in Ireland.

In summary, I reiterate that the complainants in this case did not apply for the scheme within the timeframe. They were over a year late in applying and they did not meet some of the criteria of the scheme. The Department maintains its position that the scheme was scrupulously and fairly administered, in that each applicant was treated fairly under the scheme within specific terms, rules and conditions. The Ombudsman has acknowledged as much. The scheme was advertised in a targeted way to the target audience — those with a family tradition of fishing and who would return to fishing if successful under the scheme. Administrative schemes must be operated and seen to be operated in an equitable and transparent manner. I suggest to the House that it is a relatively short step from flexible and discretionary to arbitrary. Accusations of the arbitrary application of the scheme and favouritism have been levelled already in regard to some of the successful applicants, suggestions I utterly reject. Accordingly, there is no basis for the award of payments in this case.

As I stated, I have the highest regard for the Ombudsman, her office and team. The issue investigated and reported on by her is a very difficult one. It has taken a lot of time and effort by the Ombudsman's office and the Department to deal with it. I have taken note of the points raised by the Ombudsman about the design of the lost at sea scheme. Relevant points will be taken into account in the design of any future schemes in the Department. I am satisfied that the principles of fair dealing in the design and administration of schemes are and will continue to be core tenets of the Department's customer service plan.