Phil Hogan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I am delighted to have this opportunity to introduce the Pyrite Resolution Bill 2013 to the House. It represents an important milestone in the quest to provide sustainable and practical solutions for home owners affected by pyritic damage, many of whom have had to endure the hardship of living in pyrite-damaged homes for some considerable time.

Developing the structures necessary to deliver a remediation scheme has proved particularly challenging and, regrettably, has taken much longer than I anticipated. Initially, I had hoped that those identified in the report of the pyrite panel, which was published in July 2012, as having direct or indirect responsibility for the pyrite problem would work with me to provide a voluntary industry-led solution, including appropriate funding arrangements. Despite protracted discussions, however, it did not prove possible to agree a voluntary scheme.

In the absence of such agreement, the Government approved the funding of a pyrite remediation scheme from the imposition of mandatory levies on the quarrying and insurance sectors, on which basis my Department commenced work on the development of a pyrite remediation Bill. Unfortunately, legal difficulties arose during the drafting process and it was not possible to proceed on the basis of the Government approval.

While the State is not responsible for the pyrite problem, a view supported by the independent pyrite panel, it would be unconscionable to leave affected home owners without a solution. Against this background and having regard to the exceptional nature of the pyrite problem and the circumstances in which it occurred, I asked my Department to explore alternative options for resolution. Despite a number of alternative options having been considered, the only sustainable and practical option was to provide Exchequer funding.

In spite of budgetary constraints, the Government recently approved initial funding of €10 million, with additional funding to be provided from a stimulus package to be agreed early in 2014. This will enable the homes identified as being most severely damaged to be remediated over a two-year period.

The main provisions of the Bill provide for the establishment of the pyrite resolution board on a statutory basis and the operation of the pyrite remediation scheme. Earlier this year, I set up the board on an administrative basis. The report of the independent pyrite panel provides the backdrop to the Bill. One of its key recommendations was the categorisation of dwellings as red, amber and green as a means of prioritising the remediation of affected dwellings. The Bill follows this approach. The Bill provides for a pyrite remediation scheme for dwellings affected by significant pyritic damage, having regard to the Irish Standard 398-1:2013 Reactive pyrite in sub-floor hardcore material - Part 1: Testing and categorisation protocol. This standard was developed and published by the National Standards Authority of Ireland, NSAI, in response to a recommendation in the pyrite report. This approach is practical and sensible. The remediation of dwellings is an expensive and disruptive process and it would be unreasonable to expect dwellings not exhibiting damage to be remediated. This approach is also supported in the High Court judgment of Mr. Justice Peter Charleton in the case of James Elliot Construction v. Irish Asphalt, which is now on appeal to the Supreme Court. In the judgment, Mr. Justice Charleton stated:

It is not yet reasonable to remove the infill ... solely because of the high sulfur content of the infill. That only established a possible danger into the future. Removing the infill because of actual heave is on the other hand entirely reasonable.

The principle behind the Bill is to provide a solution for a restricted group of home owners whose homes are affected by pyrite. The scheme is one of last resort and eligibility will be confined to one dwelling per owner, subject to specified exceptions. This scheme does not apply to housing provided on a commercial scale and dwellings owned by builders, developers or persons connected with them who constructed the said dwellings will be excluded from the scheme. The pyrite resolution board will establish priorities for remediation based on the severity of damage and the most economic arid effective use of resources. It may also group dwellings in need of remediation together for the purposes of achieving efficiency and cost effectiveness through economies of scale.

The scheme will apply to dwellings within the geographical areas identified in the pyrite report and where the home owners can establish to the satisfaction of the pyrite resolution board that they have no other practicable options to obtain redress other than under the scheme. However, it is not intended that the financial resources of individual applicants will be considered as part of the assessment of available options, although a number of other pertinent factors will be considered, including the extent of structural warranty cover or other forms of insurance cover available to the home owners or legal actions being pursued by or on behalf of the applicants.

This is not a compensation scheme. Home owners will not be able to seek the recoupment of costs associated with the remediation of a dwelling undertaken prior to the commencement of the scheme. Inclusion in the scheme is predicated, inter alia, on the dwelling being subject to significant damage attributable to pyritic heave and where this can be verified, having regard to the IS 398:1-2013 prior to works commencing. This is in line with how similar Government schemes operate or have operated in the past, where prior approval is a key eligibility requirement for a scheme. The Bill provides in exceptional circumstances that a dwelling that does not meet the eligibility criteria of the scheme in terms of either the severity of damage or on the grounds of ownership may be included in the scheme if it adjoins another dwelling being remediated and where the board considers that its exclusion may cause damage to either dwelling.

While the board will not directly employ staff, it will be supported by staff who will be assigned to it mainly from my Department, but also from the Housing Agency. This will enable the board to undertake its role efficiently and without the necessity for a separate and costly staffing structure. The Housing Agency will be responsible, inter alia, for the procurement of competent professionals and contractors, arranging for testing of dwellings, awarding contracts and making payments in respect of the remediation works and all other ancillary costs.

My preferred approach for dealing with the pyrite problem was for responsible parties to provide a voluntary solution. While this did not prove possible, the pyrite resolution board is continuing to engage with HomeBond with a view to agreeing a process within which the latter can contribute resources to the remediation process. I want to make it clear that any such agreement will be fully transparent.

The scheme provides for a two-tiered appeals process. Decisions made by staff of the board can be appealed to the board itself and decisions made by the board can be made to an independent appeals officer appointed by the Minister.

The initial phase of the remediation programme will deal with approximately 1,000 affected dwellings that it is understood are in need of repair. My Department and the pyrite resolution board are confident that this figure is credible and its validity is supported by a number of positive indicators, including the number of people who have registered an interest on the pyrite resolution board's website to receive an application when the scheme becomes operable, that being, some 850.

The board will be responsible for overseeing and directing the delivery of the pyrite remediation scheme and has already made significant progress on developing appropriate systems and procedures. It is finalising work on the proposed online application and processing system and is also working on developing other complementary systems, with appropriate checks arid balances, to ensure that effective and efficient programmes of remediation are delivered to affected home owners. Following the Bill's enactment, the board will prepare a draft scheme that will be submitted to me for my approval. When approved and made, it will be laid before the Houses of the Oireachtas. I understand that the board will be in a position to accept applications early in the new year.

I will table amendments on Committee Stage tomorrow evening, most of which will be of a minor drafting nature or for the purposes of clarity. However, one amendment will provide for the board to seek to recover damages or costs from any person who is deemed responsible for pyritic damage to the dwelling of the applicant who has consented to the board instituting civil proceedings.

I had hoped that the pyrite remediation process would be more advanced by now in terms of works having commenced, but the legal difficulties that arose with the drafting of the previous legislation has inevitably impacted on the anticipated timeline. The Bill provides a clearly defined legal framework for the delivery of practical and sustainable solutions to home owners within a reasonable timeframe. The scheme is fair and transparent and will restore the structural integrity of pyrite-damaged homes at minimum cost to the taxpayer and I hope that Senators on all sides will welcome this important piece of legislation. I commend the Bill to the House.