Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 59: To ask the Minister for Enterprise, Trade and Innovation when he will introduce legislation to protect all small building subcontractors that have been denied payments from bigger companies; if this legislation will be supplementary to the Construction Contracts Bill 2010 or if it will replace same; and if he will make a statement on the matter. [5869/11]

Richard Bruton (Dublin North Central, Fine Gael)
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The Government has published a comprehensive programme setting out its goals over the full range of policy concerns. The Government will address this programme over its term of office in a measured and prioritised way. In accordance with the Programme, consideration will be given to the introduction of new legislation to protect all small building contractors that have been denied payments from bigger companies.

The Deputy will be aware that the Construction Contracts Bill 2010 which was introduced by Senator Feargal Quinn passed Committee and Remaining Stages in the Seanad on 8 March. I understand that the Seanad debate highlighted a number of matters relating to the Bill that require further consideration. It would also be imperative that the full regulatory impact of such a piece of legislation be fully assessed. The Minister for Finance will now be examining the Bill and will then decide how best to proceed. It is important that a solution to this problem must not place an unnecessary regulatory or cost burden on the parties to the dispute, other parties involved in the project, or the State.

Payment terms in commercial transactions are determined by the parties concerned and the responsibility for the collection of those payments and general credit control rests with the selling enterprise, in the first instance. Legislation relating to prompt payments is within my responsibility. The issue of late payments in respect of contractors and sub-contractors is addressed by the European Communities (Late Payment in Commercial Transactions) Regulations 2002 (S.I. No. 388 of 2002). Regulation (2)(1) of the Regulations defines a "purchaser" as follows: "(a) an undertaking which contracts with a supplier for the supply of goods or services to or on the directions of the undertaking, or (b) an undertaking ("the main contractor") - (i) which obtains goods or services from another undertaking to supply to, or (ii) contracts with another undertaking for that undertaking to provide goods or services on behalf of the main contractor to an undertaking;"

In accordance with these Regulations, it is an implied term of every commercial transaction that where a purchaser does not pay for goods or services by the relevant payment date, the supplier shall be entitled to interest ("late payment interest") on the amount outstanding. Interest shall apply until such time, as payment is made by the purchaser. The current interest rate applicable is 8% per annum or 0.022% per day. This rate is set as at 1st January and 1st July each year at a rate of 7 percentage points above the European Central Bank interest rate on its most recent main refinancing operation.

In the absence of any agreed payment date between the parties, late payment interest falls due after 30 days has elapsed. The 2002 Regulations also provide for compensation for debt recovery costs. Greater use of these provisions would assist in achieving earlier payments. The enforcement of contractual rights, including any rights and obligations provided for by the Regulations, is a matter for individual suppliers. The Regulations do not provide for any enforcement role for my Department in respect of these matters.