Tuesday, 10 November 2009
National Asset Management Agency Bill 2009: Committee Stage (Resumed)
2.—(1) For the purposes of this Act, "the Oversight Committee" shall mean a committee of the Houses of the Oireachtas, or a sub-committee thereof so enjoined and appointed by a Resolution of the Houses, consisting of specified persons not being members of the Houses of the Oireachtas to report to the Houses of the Oireachtas every 30 days on the operation of this Act and the activities of NAMA.
Before we were helpfully interrupted before lunch, I was responding to a reasonable point Senator Norris had made about scrutiny and oversight. He was so impressed by the Minister's performance last night that he found it reassuring, although I am not suggesting he thought that satisfied the point. That is fair enough but oversight and scrutiny are not a sign of a Minister's performance. No matter how dedicated and well briefed a Minister is that does not avoid the need for proper public scrutiny and, in particular, information to be made available in order that the people can understand, appreciate and, as appropriate, support what is being done in their name. That is the basis on which we brought forward this amendment which would provide for an oversight committee.
The Minister has said the NAMA board is charged with oversight of the NAMA process. That rather spectacularly misses the point of the amendment because the NAMA board runs NAMA. Of course, that includes an element of oversight, as would be the case in any board, whether in the public or private sector. However, the people who engage in this are not necessarily the best ones to explain or answer the complex questions that might be asked about their actions.
There is always a sense of ownership of a decision. We must all accept this, no matter what walk of life we are in. While one may have a disagreement with colleagues about a decision, such as happens in the Cabinet or on the board of a company or school, once a decision is made, people rightly pull in behind it. We do not want to be told about a decision and the bald facts underlying it. This is particularly true of NAMA, in respect of which there is so much at stake. We want more information in order that the public can make its own judgment on the decisions being made on its behalf.
Senator O'Toole and the Minister have invoked sections 58 and 59 and stated they deal with this query but they do not adequately deal with the oversight that the Labour Party wants to see. The content of these sections does not represent an innovative approach to the dissemination of information and the possibility of real Oireachtas scrutiny. It is the tried and tested method which is useful in many cases but NAMA, the use of the people's money and the binding of future generations constitute a new ball game. We want the maximum possible level of transparency, oversight, scrutiny and information. There is not much in the Bill that creates an innovative or new level of scrutiny.
Part of this debate may be for another day, although it is relevant to this discussion, being about the level at which the Oireachtas can engage in meaningful scrutiny and examination of what is happening. It is important for politicians to equip themselves with expertise as best they can. They have a responsibility to research issues and ensure they increase their knowledge and expertise. However, their backgrounds and knowledge will not always be such that they can ferret out the information. Saving the presence of my Fine Gael colleagues, it will also get past the concern of being met with the answer "You did not ask me the correct question". The former Taoiseach, Mr. John Bruton, was not the only one who approached issues in such a way, as all Governments have tended to take that approach. The longer a party finds itself in government, the less enthusiastic it is to part with detailed information. Will the Minister reconsider his position on these amendments?
The Minister believes there should be an inquiry into developments in the banking system over past years but now is not the right time. I sighed when I heard that. Why not now? When does the Minister have one in mind? The notion that this is not the correct time is wrong. As the Minister pointed out, some of the major players are no longer active in banking and are, therefore available and could be made amenable to an inquiry. As Members will appreciate the longer one leaves complex issues to inquire into, the harder it is to get to the truth. Documentary evidence does not necessarily go missing but becomes less available. People's recall is less clear as the months and years pass by. I do not see any reason there should not be a full inquiry along the lines many, including Colm McCarthy, have suggested.
I welcome the Minister's response to my point about the French model of a credit mediator, saying he would examine it and review it under the relevant heading. The French Minister for the Economy, Industry and Employment, Christine Lagarde, described in January's Newsweek the credit mediator as:
... a sort of ombudsman, who receives complaints and investigates them. He can go to a bank and say, "Here's a situation you should really re-examine." He can finger-point publicly if necessary. And it's working.
Last weekend's The Guardian pointed out that in France up to "10,000 firms have been helped and banks that fail to extend credit lines to viable businesses are 'named and shamed'".
I am grateful the Minister will review the French model as a way of ensuring the flow of credit. I hope he will re-examine these Labour Party amendments to ensure greater scrutiny and oversight of the way the banks operate after the establishment of NAMA to ensure credit flows in the public interest.
We spoke about an Oireachtas oversight committee for NAMA on Second Stage yesterday. There is a sense that what has gone wrong with the banking system is due to a lack of regulation and governance. Subsequently, with NAMA we want to ensure oversight, transparency and accountability in its workings.
Bypassing the Houses of the Oireachtas on matters such as social partnership talks happens all the time. We do not get proper democratic accountability and scrutiny in the Houses. Setting up an Oireachtas committee would be an important oversight mechanism. The amounts of money involved, the large taxpayers' interest that needs to be protected and the Minister's powers in the legislation must be balanced by having an Oireachtas committee with particular responsibility for the agency.
The Minister said such a committee could be established at any time by the Houses of the Oireachtas. I would think it is more appropriate to set it up in the legislation. We have already said we can do without some of the committees in the House but this is one we should have. If NAMA has a particular timeframe around it, the Minister could bring an amendment to the Dáil on Thursday.
I accept there would be limitations to such a committee's oversight powers given the critical and confidential banking issues involved. However, within that I cannot see any other reason there should not be a specific committee to address the issues as outlined in the amendment.
This is also in line with Fine Gael's policy on the filling of vacancies on State boards. Fine Gael's public appointments Bill states that there should be an objective and transparent procedure in place for making appointments to key State boards, while nominees should appear before Dáil committees. If ever there was a time to establish such a committee, an agency such as NAMA with the amounts of money involved, the taxpayers' interest and it powers, provides the perfect opportunity.
Like Senator Alex White said, it has more to do with the detailed substance of the amendments rather than one's performance. That said, the Minister dealt in his first reply with quite a number of the points raised about these amendments.
When oversight, transparency and scrutiny are bundled together as one separate issue, they must be balanced against the real and important issue of ensuring the agency is allowed to work in an effective manner to achieve its aim and objective, which we as policy makers set out. Getting the balance right between these often competing objectives is where the skill lies in drafting this legislation.
I acknowledge Senator Alex White's point that no Member, not even Senator Ross I would venture to say, has experience or expertise at the cutting edge of banking, finance and the intricate detail that will be dealt with by the NAMA board. Our expertise is in policy making. We must ensure the board is fully equipped from a policy perspective to be able to carry out its aims and objectives. That is why in this endeavour we have to chose the correct people to do the job.
In this House, the Minister reiterated his offer to the Lower House that he will inform Opposition Members about his thinking about appointments to the board. The board will be charged with carrying out the executive functions of the agency and implementing the provisions of this legislation. It must ensure it protects the interests of the taxpayer and secures a proper return. As we are delegating these powers and functions, we must have trust in the people in question and accept their bona fides that they will do the job to the best of their ability commensurate with their skills and experience. That is the other side of the equation.
The question for this discussion is: when did we stray from one side into the other? When did the legislators become the Executive? While it is important to have oversight - I suggest the more correct word is "scrutiny" - to scrutinise the operation of the board, it is ultimately the function of the Oireachtas committee which will be set up under the Bill. The question, therefore, is whether that committee of the Houses will be properly equipped to make an informed and proper judgment and critique on whether the board is operating in a manner that it carries out its aims and functions and, more importantly, follows the policies and principles set out in the earlier part of the legislation. That is the key question and, in fairness, Senator White addressed the specific point.
I draw Senator White's attention to the relevant section on the production of quarterly reports. I think it was Senator Donohoe who asked whether the level of oversight would be more extensive than in the case of other agencies. I do not know of any other State agency which is required to report on a quarterly basis. I make the point to Labour Party Members that an amendment was tabled in the Lower House to the effect that the NAMA board would issue monthly reports to the Oireachtas committee. We strongly suggest that would stray across the boundary to which I referred. Is it the case that Oireachtas Members will be sitting in on board meetings? That is the line being taken. Quarterly reports containing important information is the key issue.
Let us examine the information that will be provided for Members. The first piece of information which will be granted is on the number of loans outstanding, their conditions and, most importantly, the way they are categorised as between performing and non-performing loans. That is an important issue in terms of confidentiality, about which we will speak later. The second piece of information is on non-performing loans, categorised as to the degree of default, distinguishing between capital and interest payments. This was a significant issue on Committee Stage in the Lower House. We must remember that this is a new amendment brought forward by the Minister in response, in fairness, to the concerns expressed and suggestions made in the Lower House. The third piece of information is on the number of loans being foreclosed and otherwise enforced during the relevant period of 90 days, another important issue. The fourth piece of information is on the number of cases in which liquidators and receivers have been appointed in the relevant quarter, while the fifth is on the list of all legal proceedings, except any proceedings to which a rule of law applies, which prohibit publication for whatever reason under the relevant provision of the Constitution - Article 34.1, if memory serves me correctly - and a list of all proceedings commenced by NAMA and each NAMA group entity in regard to bank assets during the quarter setting out the title of the proceedings, the parties and the reliefs sought by NAMA or the NAMA group entity concerned. The sixth piece of information is on a schedule of any finance raised by NAMA and each NAMA group entity in the relevant quarter, the sums recovered in regard to property sales, other income from interest bearing loans owned by NAMA and a bridged balance sheet of the assets and liabilities or any NAMA group entity, a complete schedule of the income and expenditure of NAMA and an updated schedule of all information subscribed to in sections and 2 and 3.
I am setting out in detail the nature and quality of the information which will be provided in the quarterly reports because short of giving the actual names of the relevant individuals or corporate entities covered by NAMA, it is virtually all of the qualitative information that would be available to the board. Senator White made the crucial point that the advice available to the board would be of the highest quality but that is the qualitative information necessary to make an informed judgment as to whether NAMA is carrying out its functions or otherwise. This is a new section introduced to the Bill arising from suggestions and proposals made primarily on Second Stage in the Lower House. It is a real addition to the Bill but whether we talk about oversight or scrutiny, it is the quality of the information provided that is the key issue.
I believe I have dealt with the issues raised since I arrived in the House. Senator Bacik welcomed the Minister's comments. I reiterate that the Minister is open to the suggestion made and has taken it on board. I believe the Senator was satisfied with this.
Senator Fitzgerald raised the question of whether there ought to be a statutory committee or a committee of the Houses. There should not be a huge difference between the two but the Government makes the point that to be consistent, it ought to be a normal committee of the Houses. This is extraordinary legislation but that does not mean a committee formed by the Houses, given appropriate powers and provisions, including the power of compellability, and the advice available to it, should not be able to perform the function in a lesser way than a statutory committee. We make that point strongly.
In addition, I suggest a statutory committee would be enshrined in the legislation and not capable of amendment unless further legislation was brought forward, whereas a committee of the Houses allows real flexibility to deal with issues of oversight or scrutiny which may emerge over time in what we all agree is an unfolding situation where circumstances are changing all the time. We should all anticipate that, particularly in regard to credit flow, an issue of real concern to Members of the House, it will change in terms of different classes of borrowers and sectors of society. The Government submits that a serious degree of flexibility must be built into the legislation to allow the Houses of the Oireachtas and the Minister to bring forward whatever mechanisms are necessary to deal with issues as they arise.