Seanad debates

Thursday, 17 December 2009

Forestry (Amendment) Bill 2009: Committee and Remaining Stages


Section 1 agreed.


7:00 pm

Photo of Paul BradfordPaul Bradford (Fine Gael)
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I move amendment No. 1:

In page 3, before section 2, to insert the following new section:

"2.-Section 24(2) of the Forestry Act 1988 is amended:

(a ) by the insertion of the words "but shall not exceed €100,000,000, without receiving the express approval of Dáil Éireann" after "the consent of the Minister for Finance", and

(b ) by the insertion of a new paragraph in subsection (2) as follows:

"(a ) Monies borrowed temporarily at any point in the accounting year under this subsection shall be noted in the annual report of the company for that accounting year.".

The purpose of this amendment is to ensure the new borrowing powers being given to Coillte will be used in a careful and cautious fashion and, in particular, that the temporary borrowings which we accept are necessary can be used in a productive and innovative fashion, will be used sparingly and that the Oireachtas, acting on behalf of the taxpayer, will have a significant influence over those temporary borrowings.

The Bill proposes an increase in the borrowing power of Coillte to the new limit of €400 million. We accept that in this new commercial era, 21 years after Coillte was initiated, it is appropriate that new limits and new figures be put in place. The Minister of State's new limit is balanced and fair. The Fine Gael amendment seeks to ensure that an appropriate level of care and caution will be applied in respect of the borrowings and the suggestion of €100 million, that is, 25% of the maximum borrowing limit is not appropriate from the point of view of the taxpayer and from the point of view of public accountability.

Photo of Paudie CoffeyPaudie Coffey (Fine Gael)
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I second the amendment. Essentially it is a genuine attempt by Fine Gael to introduce an element of oversight in regard to what is quite a substantial figure of €400 million of temporary borrowing power to Coillte. We do not doubt the competency of Coillte. The Minister of State has outlined its competence in many areas. However, I have outlined one area where it may not have been competent. That is why it is important to have the appropriate checks and balances in the various powers we give to semi-State agencies. There is a need for the Dáil and the Minister to have a good oversight role. That was the reason for tabling the amendment.

The Minister of State explained briefly the reason the borrowing threshold has been increased. As the economy and companies develop there is a need to increase the threshold and we agree with it in principle. However, the amendment seeks to introduce an oversight role. I will be interested to hear further explanations on the reason the extra borrowing power was introduced.

Photo of Tony KilleenTony Killeen (Minister of State with special responsibility for Forestry, Fisheries and the Marine, Department of Agriculture, Fisheries and Food; Clare, Fianna Fail)
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I appreciate the sentiments underlying the proposed amendment. At the current rate, Coillte's borrowing will still be under €200 million. If this legislation is passed we will provide an additional €200 million which will enable Coillte to proceed with all its strategic plans. The provisions of section 24(2) of the 1988 Act will remain in place. I do not want to send out a signal to Coillte that in the short to medium term we will engage in the temporary borrowing facility. I would much prefer if, for the future, it operated within the provisions of section 24(1)(b) of the 1988 Act which is the ordinary borrowing requirement.

I remind Members that setting the limit at €400 million does not entitle Coillte to go out tomorrow and extend its borrowings to that level. For each piece of new infrastructure in respect of its borrowing it is required to make its case to the Department of Agriculture, Fisheries and Food in the first instance and, subsequently, to have it examined by the Department of Finance. There is a very strong set of balances in that regard. I am entirely satisfied with the checks and balances already in place but I do not wish to send out a signal that I am interested in hearing about any temporary borrowings from Coillte in the future.

When we come to debate the substantive Bill, about which I told Members earlier, if the Senator wishes to revisit this issue I would be happy to consider it in that context where I think it might be more appropriate. The second part of the amendment deals with accounting practices and how clearly they should be shown in the annual accounts. There is a requirement that the levels of borrowing at the beginning and end of the year be set out clearly in the annual report. Those of us who are not accountants sometimes do not see this clearly but we do have the facility to have it examined as we always do within the Department.

Senator Coffey mentioned the issue of oversight. My strong view is that the most appropriate and most effective method of oversight available to the Oireachtas is that bodies such as Coillte should appear before the Joint Committee on Agriculture Fisheries and Food, which it does every year or whenever it is invited, as it did last October. Some of my colleagues in the other House were of the view that the discussions which were engaged in in October 2009 could have been more open and issues such as this could have been flagged more clearly. Coillte did indicate that there were issues about its borrowings but, perhaps, it was not as clear as Members would have wished. I believe the oversight provisions in the Oireachtas committee system are by far the most practical and are solid in any event. Since in the accounting practices that apply to the annual report they are already provided for, the second part of the amendment is superfluous and I certainly do not want to go down the road of the first part of the amendment.

Photo of Paudie CoffeyPaudie Coffey (Fine Gael)
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I accept and understand where the Minister of State is coming from. I mentioned briefly one specific case for the reason of oversight. It is an obvious case in which Coillte was involved. It had a 150 year lease on almost 1,000 acres of prime forestry land since 1933 which would have taken it up to 2083. Unfortunately something was wrong because the lease was challenged by the private owner of those lands and it had to be broken. Coillte entered into a new agreement whereby it bought 400 acres of land at a cost of €3.7 million to the taxpayer and ended up giving back 500 acres of what was previously leased. It has the agreement of the landowner that it can harvest that land up to 2035 so there was some allowance back on those lands. This is the reason I seek an oversight role. Would Coillte have power to approve the purchase of those lands? I appreciate it is an agreement and is out of the court but would that require the approval of the Minister? The Minister of State did acknowledge that this is the place to ask the hard questions and I appreciate him saying that because too often hard questions are not answered, especially in Parliament. I do not expect an answer today but the Minister of State said he would come back to me with more detail and I accept that.

As regards an oversight role, I use this specific case as an example. Some €3.7 million, a substantial amount of money, was used to purchase lands which we already had on a long-term lease of 150 years and, due to inappropriate maintenance or whatever, the State was forced, though Coillte, to purchase these lands and give back almost half of the resource it had available to it. I hope the Minister of State understands where I am coming from. I have given a hard example of the reason oversight is important and the reason approval is required right up to the level of the Minister. That is why we are here. We are elected parliamentarians and should not give all the power to State agencies. We must have accountability and transparency right up to elected Members.

Photo of Tony KilleenTony Killeen (Minister of State with special responsibility for Forestry, Fisheries and the Marine, Department of Agriculture, Fisheries and Food; Clare, Fianna Fail)
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I appreciate the points made by Senator Coffey with regard to that case. As I said, I do not have sufficient detail here to answer all his points immediately. It is important to bear in mind that the acquisition of that estate dates back to 1933, which is 55 years before the setting up of Coillte, and I do not know how much of whatever ought to have been done ought to have been done in that particular period. I will find out all the details and will forward them to Senator Coffey.

In general terms, I also flagged that there are risks associated with almost any project on which one would engage on any lands, but also on public lands, if that were to be the issue of today. There are issues of landslides in some of the cases where there are wind farms - there have been two minor ones on the Garvagh Glebe site. My recollection is that in each case where an incident arises that has any implications, it is notified to the Department and is considered. Unfortunately, in cases like that and perhaps in some respects in this case, by the time one is getting information and by the time they may have the information, it may already be too late. Nevertheless, my experience has been that the reporting procedures are very robust. I have made it very clear to the chairman and the CEO that I would like those procedures to be strengthened. In fact, I have arranged for an engagement between Department officials and senior personnel in Coillte to ensure those lines of communication remain as robust as they ought to be.

Photo of David NorrisDavid Norris (Independent)
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I would like to say with overpowering irrelevance that I was charmed to be mentioned by Senator Ó Brolcháin in his earlier contribution. As Oscar Wilde said, the only thing worse than being talked about is not being talked about. However, I point out I have spoken passionately in earlier debates on the subject. My mother's family, the Mac Giolla Phádraig - Fitzpatrick - family planted all over the Slieve Bloom mountains and because of their obsession with trees turn up in James Joyce's Ulysses. I felt I had to restore the family name, however irrelevant it is.

Photo of Paddy BurkePaddy Burke (Fine Gael)
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It is not on the amendment in any case.

The Dail Divided:

For the motion: 14 (Ivana Bacik, Paul Bradford, Paddy Burke, Jerry Buttimer, Ciarán Cannon, Paudie Coffey, Paul Coghlan, Maurice Cummins, Frances Fitzgerald, Nicky McFadden, Rónán Mullen, David Norris, Joe O'Reilly, John Paul Phelan)

Against the motion: 27 (Dan Boyle, Martin Brady, Larry Butler, James Carroll, John Carty, Donie Cassidy, Maria Corrigan, Mark Daly, Déirdre de Búrca, John Ellis, Geraldine Feeney, Camillus Glynn, John Gerard Hanafin, Cecilia Keaveney, Terry Leyden, Marc MacSharry, Niall Ó Brolcháin, Brian Ó Domhnaill, Francis O'Brien, Denis O'Donovan, Fiona O'Malley, Ned O'Sullivan, Ann Ormonde, Kieran Phelan, Jim Walsh, Mary White, Diarmuid Wilson)

Tellers: Tá, Senators Paul Bradford and Paudie Coffey; Níl, Senators Camillus Glynn and Diarmuid Wilson.

Amendment declared lost.

Section 2 agreed to.

Title agreed to.

Bill reported without amendment, received for final consideration and passed.