Seanad debates

Thursday, 20 July 2017

Asian Infrastructure Investment Bank Bill 2017: Committee and Remaining Stages

 

10:30 am

Photo of Michael D'ArcyMichael D'Arcy (Wexford, Fine Gael) | Oireachtas source

Unfortunately, I cannot accept this amendment. I do not consider its inclusion in legislation appropriate or necessary. I certainly agree that the issues raised by Senator O'Sullivan are clearly relevant to the operation of the bank and Ireland's involvement as a member should the Bill be passed. The State will be guided by established Government policy when acting as a member of the bank, in particular Ireland's policy on international development. The latest statement of this policy is the One World, One Future document published in 2013.

I do not believe it is necessary or appropriate to single out specific aspects of our approach in legislation. Many of the points which the Senator raised are already reflected in the policies and frameworks of the bank. I also look forward to the publication of the national plan on business and human rights by the Department of Foreign Affairs and Trade, which Senator O'Sullivan mentioned on Second Stage. The Department of Finance has worked closely with the Department of Foreign Affairs and Trade throughout our application for AIIB membership and its work in this area will inform the development of our policy at the bank.

In respect of the development of safeguards, the bank's environmental and social framework released in early 2013 recognises and makes provision for issues such as climate change, gender, biodiversity, resettlement, labour policies and indigenous peoples. These safeguards reflect best practice across multilateral development banks and were drawn up with the input of AIIB members and civil society. Of course, the true test of such a framework is its implementation but this comprehensive document provides a very good starting point for the AIIB.

The bank is in its early stages but a number of developments suggest it is well placed to maintain high standards in practice. In respect of climate change, the AIIB's recently released energy strategy fully embraces the goals of the Paris agreement. The bank has promised to uphold the agreement and will seek to assist its clients in meeting their targets. With regard to the development and implementation of effective remedies, the bank has launched an independent stakeholder consultation to establish a complaints handling mechanism. I understand this mechanism will go beyond compliance and seek to address the problems of any people adversely affected by any AIIB project. This is an important step for ensuring that safeguards are applied in practice.

In respect of responsible lending, the AIIB has drawn its procedures and policies from those of other multilateral development banks. The standards adopted have been broadly welcomed by non-governmental organisations and member countries alike. The bank's financing policy makes clear that lending will be carried out with due attention to the fiscal sustainability of the borrowing member and its ability to meet its obligations under the financing contract. If Ireland were to become a member of the AIIB we would use our influence, in co-ordination with other members, to ensure that these policies are implemented in practice. Finally, with regard to the suggestion of an annual report by the Minister to the Dáil, I am sure the Minister will give his full consideration to the views expressed both in Seanad Éireann and Dáil Éireann on Ireland's dealings with financial institutions generally through the reporting arrangements to the Oireachtas .

For the reasons outlined, I cannot accept the Senator's amendment. I want to put on the record of the House that this is not a Chinese bank. It is important to be clear that it is a Chinese initiative.The Chinese will hold 26% of the shareholding while Europe will hold 20%. It is not a European bank, but equally it is not a Chinese bank. I wish to put that on the record.

Regarding Senator O'Donnell's question about directors' posts, we are entitled to a post. There is a rotation agreement among the EU member states that are members of the AIIB. Ireland is party to the rotation agreement. However, the timing of our appointment of a director or alternate director will not be clear until after we are full members.

If the amendment is passed, we will have to revert to Dáil Éireann. Obviously, the Dáil is in recess so that cannot happen until September. Equally, it is important to inform the House that if the amendment is passed, in all likelihood we would not be accepted as a member of the AIIB. The AIIB has put its memorandum of understanding in place and feels it is appropriate. No other jurisdiction, to my knowledge, has attempted to put into legislation what the Senator is attempting to put into legislation. We feel the bank will be responsible with its corporate mandate. As I have said, this is part of the memorandum of understanding. I do not feel the amendment is appropriate. It is neither the right place nor the right method to deal with what the Senator is pursuing. I am not in any way disparaging her attempts to do so, but she must understand that if the amendment is pressed and passed, it will have consequences.

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