Willie Penrose (Longford-Westmeath, Labour)
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225. To ask the Minister for Environment, Community and Local Government in respect of directors of local community development companies that his Department is now insisting that such directors execute personal indemnity bonds, which are equivalent to guarantees and indemnities, arising from their membership of the board of directors, when that particular condition or stipulation arose or was insisted upon by his Department; and if he will make a statement on the matter. [55107/13]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Under the European Regulations governing the Rural Development Programme a Bond is required where any funds are made available in advance. Currently 21 of the 35 Local Development Companies (LDCs) who are contracted to deliver the LEADER elements of the RDP on behalf of my Department have such a Bond in place. My Department has no role in negotiating these Bonds and the umbrella organisation for the LDCs, ILDN, negotiated the current Bond on their behalf.

My Department understands that the bond underwriters require an indemnity from each director and the insurer to guarantee against actions which may "arise out of an act or acts of fraud or dishonesty in which said Board Member has been personally involved" in respect of the LEADER elements of the Rural Development Programme. I understand that this is standard practice in these situations and protects Board Members from being held "jointly and severally" responsible for actions of any one Board Member.