Alice-Mary Higgins (Independent) | Oireachtas source

I move amendment No. 7:

In page 12, line 30, to delete "commercial" and substitute "financially, socially and environmentally sustainable".

Section 15(1) states:

The Agency shall hold or invest the assets of the ICN Fund on a commercial basis for the benefit of the ICN Fund, so as to seek to secure the optimal total financial return, as to both capital and income.

This amendment would amend the provision by inserting a requirement that the agency shall hold or invest the assets of the ICN fund on a "financially, socially and environmentally sustainable basis" for the benefit of the fund.Placing an onus on the fund to operate "on a commercial basis", with that becoming its pre-eminent and main point of delivery, means that we miss an opportunity to ensure that this fund - as with much of what we talked about in the debate we have just had on housing and everything else - is actually delivering what we want for the State in the widest sense and in the greatest sense of good. We want it to deliver value for money in the sense of the greatest benefit that can be delivered for the State. When we are looking at what the greatest benefit is, we need to look at the financial, social and environmental benefits of investment. When we fail to do that and instead look solely at the commercial returns, we risk having almost a siloed approach whereby the fund may make some money commercially, but may create problems for the State by failing and missing an opportunity to tackle problems which will cost the State far more money in the long run.

An example of a commercial mandate that is almost limiting the activities and the potential of the State to tackle a really significant and expensive problem is the Coillte mandate, which is operating the business of forestry on a commercial basis. The shareholder letter which the State sent to Coillte explicitly talks about it being cash-generative and needing to prioritise cash-generative activities. At the same time, incidentally, Coillte does not make a huge amount of money for the State. In the end, it makes quite a small amount of profit in the sense of what is actually there and available and goes back to the State. It gives reasonably small dividends but its priority has to be cash and short-term, commercial delivery of dividends. On the other side, that is 7% of the land of the State and of our national territory. Ireland is about to be and will be facing huge costs as we fail to meet our climate and environmental targets which could be delivered, socially and environmentally. This is dealt with in legislation I have introduced to try to ensure the mandate of Coillte becomes, again, economically, socially and environmentally sustainable and delivers for the State on those levels. Then we ensure it is not a matter of saying we do not make money but of saying the choices we make about how we make money are ones which will also deliver from an environmental and social perspective. That does not just mean avoiding harm and problems down the line; it also means seizing opportunities and having a joined-up approach rather than each fund or company operating in a silo where it just has to get itself back into the black. Rather than being about showing that it has delivered a dividend of some kind on some commercial basis, it is necessary to say that the value which one can deliver can be far more.

My amendment is not designed to say that I do not care about the financial aspect. I know we will get a note to say we need to make money so that we can pay for things, but here is the thing: I care about that too. You can make money in a way that reduces the cost you will have for things like redressing climate impacts or social inequalities. In such circumstances, you are basically lowering the costs because you are getting added co-benefits from how you are spending your money. There is a simple idea that you can make your money any old way, and then spend it in certain places later on, but we have seen the poor investment choices I have highlighted previously. I refer to choices like the State investing in vulture or investment funds that buy up blocks of housing and drive up the costs for local authorities that also need to get their money from the State. In this example, even if the State can make profits from the investment funds it chooses to invest in - real estate investment trusts, REITs, and all the rest - it ultimately costs us a huge amount of money because the cost of housing has been driven up when local authorities try to compete to access and purchase social housing.

We need a joined-up approach. We do not need a fund which is simply operating on a commercial basis as if it is just a company or a commercial entity because it is not a commercial entity solely. It is a vehicle for the ambition and investment of the State in the infrastructure, the climate and the nature we want for our future generations and, indeed, for those of us around now. If that is what the fund is trying to deliver, we need to ensure the core mandate reflects that. When we talk about infrastructure, climate and nature, the intention and the very naming of the fund is clearly supposed to be about delivering on a social and environmental level as well as a financial level. If we simply put the commercial basis top and centre, anything that operates on a commercial basis is actually and ultimately operating for the maximum profits it can make within its own terms and operations. It hamstrings what we could be hoping for and delivering from this fund. If we get the mandate right, we get far more down the road. That is why I believe we should be looking at a different kind of mandate from the beginning - a more holistic mandate that would lead to an agency that is empowered to make really good and interesting choices. It may be a long-term choice that involves investing in a particular way with a possible return over five, ten or 20 years. Crucially, in the case of the State, a major cost can be avoided by investing now. That is what is going to deliver more for the people, for the public and ultimately for the public purse, rather than asking where the quickest money is or where money can be made which will make us look good on a commercial basis next year.

Amendment No. 8 seeks to amend section 15(3) by removing the provision that the assets of the fund might be held outside of the State, while retaining the permission for them to be invested outside of the State. Again, it is important that our assets and funds be held within the State and that we do not find ourselves compromised by having Irish State money effectively located and grounded in assets located around the world rather than within our State. That does not mean we cannot have investment outside of the State, but if this fund is meant to be about Ireland's infrastructure, climate and nature fund, ultimately the assets of the fund should be held within the State. The issue of where one's assets are held and located is funny and is coming to the fore very much, as the House will be aware, in what is happening in west Africa, when one looks to France and asks the "where is the gold?" question. It matters where things and assets are located. We have seen that with regard to insurance issues internationally. The assets of insurance funds are being held in Europe and then there is a refusal to fully pay out, even to the actual holders of those insurance funds in the case of other countries which have experienced natural disasters, for example. Where assets are located can matter. I hope to hear the Minister of State's thoughts on this. My instinct is that these assets should be held within the State.

I do not fully see how these amendments are grouped but I am happy to accept this arrangement.