Competition (Amendment) Bill 2010: Report and Final Stages

Wednesday, 26 May 2010

Dáil Éireann Debate
Vol. 710 No. 2

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Deputy Leo Varadkar: Information on Leo Varadkar  Zoom on Leo Varadkar  I move amendment No. 1:

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This amendment, which was discussed on Committee Stage, relates to the proper Oireachtas scrutiny of appointments to the Competition Authority. The Minister of State, Deputy Áine Brady, may be aware that this Bill is necessary to fill some vacancies that have arisen on the Competition Authority. These are ordinarily filled through competition but, for various reasons, it is not possible to fill them in the ordinary way on this occasion. The appointments will be made by the Minister. It is very much a retrograde step that we are going back to direct ministerial appointments rather than a competition. My party believes that the appointments which are made by the Minister should initially be scrutinised by an Oireachtas committee.

If the committee does not accept any of the nominations for a legitimate reason, the Minister can then make two alternatives and the committee can choose from the two.

We have seen some progress in this regard. The positions on the FÁS board were advertised while there was some committee scrutiny of appointments to the board of the Broadcasting Authority of Ireland. This is the first example, however, of the Government going backwards, moving away from a competition to ministerial appointment and not allowing any scrutiny of it.

Deputy Willie Penrose: Information on Willie Penrose  Zoom on Willie Penrose  This was argued for some time on Committee Stage. While it is no use going back over old ground, it is important the principle of Deputy Leo Varadkar’s amendment is recognised by the Government. There is a half toe in the door, so to speak, regarding appointments to the boards of FÁS and the Broadcasting Authority of Ireland. While this should not be construed as over significant in scrutinising appointments, at least there was an implicit acknowledgement that this was the way to advance in this area.

The proposed scrutiny would not be a prurient charter to investigate into or invigilate upon an appointee’s background or activities. It would examine his or her qualifications and competence to do a particular job. Any news headline information regarding a person’s activities outside their qualifications or competences to function as board members as laid down in the legislation would be of no interest to a committee.

If four board members were to be appointed, it would make sense that seven to ten candidates would be put forward. As the legislation requires the board to cover many professional fields, it should be anticipated that there may be a significant number of candidates with professional experience in competition law. From an economic viewpoint, competition law is important in areas such as mergers and acquisitions. It is important, therefore, the agency’s board comprises members who have the professional background to deal with what is in effect an onerous job.

The Minister of State has indicated she will not accept this amendment. However, the amendment’s principle should be kept in mind. The recent appointments to the FÁS board were a first step in this direction and one which we would advocate building upon for the future.

Deputy Arthur Morgan: Information on Arthur Morgan  Zoom on Arthur Morgan  I support the principle of Deputy Leo Varadkar’s amendment. It is clear there is no glasnost in this area and certainly no Gorbachev to give leadership and open the doors to let some light into the process. As stated on Committee Stage, we are not looking for an interrogation or inquisition but some level of openness where questions can be aired in public, the questions that members of the public who send us to the Oireachtas would like us to ask. It would be a straightforward interview process.

Minister of State at the Department of Health and Children (Deputy Áine Brady): Information on Aine Brady  Zoom on Aine Brady  The Bill is addressing a specific issue that has arisen. Its purpose is to allow the Minister for Enterprise, [401]Trade and Innovation to fill immediate vacancies in the Competition Authority for the duration of the period when the Public Appointments Service competition is being held. Upcoming vacancies would have the effect of reducing membership of the authority below the statutory minimum requirement and impede its proper functioning.

The Minister, Deputy Batt O’Keeffe, is concerned that an improperly constituted authority would be unable to fulfil its statutory obligations and any decisions made by members in such circumstances would be open to legal challenge. Of particular concern are the functions specifically reserved by statute to the authority acting as a decision-making collective body. As he stated on Second Stage, and acknowledged by the Minister of State, Deputy Conor Lenihan, on Committee Stage, the Minister must ensure the authority can function with the requisite statutory membership for the duration of the period when the Public Appointments Service competition is being held. To ensure the persons appointed are suitable for the positions, the Bill, as drafted, provides that appointees to these temporary positions must, in the opinion of the Minister, possess sufficient expertise in or experience of at least law, economics, public administration, consumer affairs or business generally.

The amendment, proposing adding an Oireachtas scrutiny phase, would result in an additional new layer to the selection process and would have the potential to delay the temporary appointments, leaving any decisions made by the authority’s members in such circumstances open to legal challenge.

The Minister intends bringing the draft heads of the consumer and competition Bill to the Government in the forthcoming weeks for approval. The Bill is expected to be published in the autumn and will cater for the merging of the National Consumer Agency and the Competition Authority, including its structure. The amendment, therefore, is premature in that context.

For the reasons outlined, I will not accept the amendment.

Amendment put and declared lost.

Acting Chairman (Deputy Cyprian Brady): Information on Cyprian Brady  Zoom on Cyprian Brady  Amendments Nos. 2 to 4, inclusive, are related and may be discussed together.

Deputy Arthur Morgan: Information on Arthur Morgan  Zoom on Arthur Morgan  I move amendment No. 2:

The purpose of this amendment is to have the Minister nominate rather than appoint directors to the authority. This is appropriate as it facilitates the Minister’s say in making an appointment and the nomination can then be interviewed by the Oireachtas Committee on Enterprise, Trade and Employment. This would not be an interrogation or inquisition but a reasonable question and answer session between the elected representatives of the people and the interviewee. It is worth reiterating that there would be no need to infringe on any personal matters relating to the appointee. It would deal strictly with the competency, or otherwise, of the interviewee to carry out his or her functions in the authority.

This process for the Competition Authority would be a road-test for other public appointments. It is important to remember these appointments would be public interest directors, for want of a better term. The term arose from the Minister for Finance’s appointments to the various banks’ boards to supposedly represent public interest. Some questions arise as to whether this was effective. At least one of those directors in the case of Anglo Irish Bank signed off on the bank’s 2008 accounts in February 2009 which showed a profit of €784 million when months later it was revealed it had lost €12.7 billion.

[402]We need to ensure errors such as this do not happen again. Qualified and all as these appointees may be, there must be a question and answer session which will allow the Oireachtas Members, the representatives of the people of this State, to establish whether they have some level of competency and are willing to exercise it.

This would be an imminently fair and reasonable process, not an interrogation. The Oireachtas Committee on Enterprise, Trade and Employment would be suitable for such a process because under the stewardship of Deputy Willie Penrose and its broad membership it tends to be the least party political of the committees. The committee is very reasonable when it arrives at conclusions and, I believe, at all times it puts the greater good to the fore. On that basis, I call on the Minister of State to take this on board and disregard the notes she was given, which were clearly signed off by the senior Minister in the Department, and opt for the greater good in this instance and accept the amendments.

Deputy Leo Varadkar: Information on Leo Varadkar  Zoom on Leo Varadkar  The Minister of State could make history.

Deputy Willie Penrose: Information on Willie Penrose  Zoom on Willie Penrose  I broadly support Deputy Morgan’s amendments Nos. 2, 3 and 4. They are inter-related amendments in any event. I refer to the Competition Act. Competition is important in terms of the consumer and we all advocate the concept to ensure no cartels or concerted practices evolve in respect of business interests which could be detrimental to consumer interests. Nevertheless, one could have a person appointed who knows the price of everything and the value of nothing and, very often, that is what takes place. If everything in the country were reduced to bottom-line economics where profit is the only thing that matters, then the social and utility values of various matters would be disregarded and the country would be headed to a serious pass.

This is what happened with section 4 of the Competition Act 2002. We took umbrage at the section and it was a major source of disappointment that an amendment was not included in this Bill to address section 4 of the Competition Act 2002. Section 4 gave rise to consequences which were clearly unintended from the perspective of actors, musicians, artists and people deemed to be undertakings for the purpose of that Act. In that case, the Competition Authority was acting on foot of the board’s recommendations and that should not be the case. Someone must have made a recommendation. The director general or chairperson of the Competition Authority must have made a recommendation to the effect that the authority should go to court in respect of Equity, the actors union, at that time and argue that the union had no right to represent freelance actors.

There are some 5,500 of such people, including freelance journalists, actors and others. I believe an attempt was made to undermine their right to collective representation and to sweep the union aside in the name of competition according to that interpretation.

An amendment of section 4 of the Competition Act has been promised. As the Minister of State indicated, the proposed legislation will be a belt, braces and all embracing tranches of legislation. Why does the Competition Authority insist that artists, freelance journalists, musicians and others who, because of the nature of their occupation, do not enjoy collegiate employment are classified as undertakings and denied the right to be represented by a trade union? What was the ideological imperative that drove this agenda? Such questions are important. All these matters can be fleshed out in the context of Deputy Morgan’s contribution. This is about the views people hold. We are not in favour of the all-American approach either but, nevertheless, when appointments are being made sometimes the public there is very aware of the perspective and views held, articulated, promoted and promulgated by particular people [403]who are to be appointed. In the case of members of the US Judiciary and various other bodies, those appointed must go before a representative body.

I am the chairperson of the Joint Committee on Enterprise, Trade and Innovation and the Acting Chairman, Deputy Cyprian Brady, is the Vice Chairman of that committee. I can honestly state that neither Deputy Brady nor myself have ever taken a partisan approach on that committee while in the Chair. We would never allow it to happen because everyone has a view but, ultimately, we try to distil it down to a collective view which represents the best of everything. We all share that objective. We may have different ways of trying to get to the objective but we are all trying to help people, especially in the employment area. The Competition Act has an important role to play in this overall area. We acknowledge the Competition Authority has a very important role but I seek to ensure some of the past decisions taken by the Competition Authority are never again taken in the future.

Deputy Áine Brady: Information on Aine Brady  Zoom on Aine Brady  As I have already stated to Deputy Varadkar, the intent behind this targeted and focused Bill is to deal with a specific issue which has arisen, that is, to allow the Minister to fill immediate vacancies in the Competition Authority for the duration of the period while the Public Appointments Service completion is being held. Upcoming vacancies would have the effect of reducing membership of the authority to below the statutory minimum requirement and would impede the proper functioning of the authority. The Minister, Deputy Batt O’Keeffe, is concerned that an improperly constituted authority would be unable to fulfil its statutory obligations and that any decisions made by members in such circumstances could be open to legal challenge. Of particular concern are those functions specifically reserved by statute for the authority acting as a collective decision-making body.

However, it is important to understand that the temporary appointments provided for in the Bill are not appointments to the board of a public body. The Competition Authority does not have an external board. Rather it has members appointed pursuant to section 35 of the Competition Act 2002 following a Public Appointments Service competition. Given the potential consequences of a move to an Oireachtas scrutiny model for the appointment of members to a State body, it would be more appropriate, on the grounds of good governance, fairness, equity and transparency, that such proposals and any structures put in place are proposed for consideration in terms of their universal application for appointments in all State bodies. The concept should be properly researched and debated to determine if it is an appropriate model.

Deputy Penrose raised the issue of the Towards 2016 commitment in respect of certain classes of vulnerable workers, including voice-over actors, freelance journalists and session musicians, as well as the issue of exemptions from competition law for certain professions. This issue is being considered in the context of developing the consumer and competition Bill, which, it is hoped, will be published later this year. In all cases, any such exemption would have to be consistent with EU competition law. Therefore, I am unable to accept the proposed amendments.

Acting Chairman (Deputy Cyprian Brady): Information on Cyprian Brady  Zoom on Cyprian Brady  Is amendment No. 2 being pressed?

Deputy Arthur Morgan: Information on Arthur Morgan  Zoom on Arthur Morgan  I wish first to reply to the Minister of State. I fully understand why the Minister of State, who was probably asked at very short notice, would rely on the notes given by officials and I have no qualms with that. However, the reply appears to have been constructed by someone swotting over and trying to find gaps or a comma missing in the legislation and to come up with some excuse why the Department could not accept this level of public scrutiny for nominees or appointees. It is grasping at straws to suggest the proposal might not be legal and one could say that about anything. It would be perfectly legal if the [404]House adopted it as would the Fine Gael amendments. They would be within the bounds of the House were there a decision made to accept them.

The previous Minister of State, Deputy Conor Lenihan, stated on Committee Stage that at least he would be keen to vigorously contest the Competition Authority. I am keen for the Minister of State to vigorously contest it because the experience to date has been that the Competition Authority has some flaws. It is satisfied to go after the smaller fish while allowing the bigger people to swim freely. That is grossly unfair.

  1 o’clock

Our committee has spent significant amounts of time examining the retail sector. One British-based operation in particular seems to get away with riding a coach and ten through the legislation but the Competition Authority has not gone after that retailer. I do not say as much because it is British-based and I hold anti-British sentiment, but I say so objectively and that is the observation I have made in respect of our examination of the retail sector as a committee and vis-à-vis the Competition Authority’s unenthusiastic pursuit of that sector and some of the larger cartels we would have preferred it to go after.

I do not see much point in delaying the business of the House and I am aware from the Order of Business that there are a substantial number of pressing matters, not least the issue of children’s reports and the allocation of time to discuss those matters. I am not going to delay the House unnecessarily on the issue. I hold a very strong view on it but I also recognise that the Department and the Minister are not for turning in respect of these amendments. That is a huge missed opportunity for the Government to offer some kind of transparency and accountability in these matters. I withdraw the amendment.

Amendment, by leave, with drawn.

Deputy Arthur Morgan: Information on Arthur Morgan  Zoom on Arthur Morgan  I move amendment No. 3:

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Amendment put and declared lost.

Deputy Arthur Morgan: Information on Arthur Morgan  Zoom on Arthur Morgan  I move amendment No. 4:

Amendment put and declared lost.

Bill reported without amendment and received for final consideration.

Question proposed: “That the Bill do now pass.”

Minister of State at the Department of Health and Children (Deputy Áine Brady): Information on Aine Brady  Zoom on Aine Brady  It is important that this Bill be passed by the Oireachtas without undue delay so as to allow the Minister appoint members to the Competition Authority in sufficient time to address a reduction in membership levels below the statutory minimum requirement. I know the Minister is concerned that an improperly constituted authority would be unable to fulfil its statutory obligations and that any decision made would be open to legal challenge.

The Bill has a very specific purpose, as has been outlined. As indicated by my colleague, the Minister of State, Deputy Conor Lenihan, on Committee Stage and again today, the Minister for Social Protection intends to bring a new and comprehensive consumer and competition Bill to Government for publication in the autumn. The issues raised by Deputies Varadkar, Penrose and Morgan in the course of the debate of this Bill will be considered in that context. That Bill will, among other issues, cater for the merging of the National Consumer Agency and the Competition Authority and so, the amendments proposed again today are, perhaps, premature in that context.

Following publication of that Bill, Members will have the opportunity to make their views known and consideration will be given to such views at that stage.

Deputy Leo Varadkar: Information on Leo Varadkar  Zoom on Leo Varadkar  Notwithstanding the reservations we have about Oireachtas scrutiny, section 4 and some other matters related to the qualifications of the appointed members, we accept the necessity for the Bill. This is precisely because of the risk that decisions made by the Competition Authority could be challenged in the courts if these appointments are not made.

On that basis, we do not oppose the Bill. However, we look forward to a detailed, long and interesting discussion with, I hope, the relevant Minister when the full Bill is brought to the Dáil.

Question put and agreed to.


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