Air Navigation and Transport (Amendment) Bill, 1997: Committee and Remaining Stages.

Friday, 26 June 1998

Seanad Éireann Debate
Vol. 156 No. 6

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Sections 1 to 8, inclusive, agreed to.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  I move amendment No. 1:

In page 10, after line 51, to insert the following new subsections:

“(3) The company may, subject to subsection (4), issue shares from time to time as part of one or more employee profit sharing schemes subject to such terms and conditions as may be approved by the Minister with the consent of the Minister for Finance.

[398] (4) The aggregate amount of the shares of the company standing issued at any one time as part of one or more profit sharing schemes shall not exceed 15 per cent. of the total issued share capital of the company.”.

The legislation has been introduced to prepare for the sell off of Aer Rianta. Aer Rianta is one of our more successful semi-State operations and we are putting it on a statutory commercial basis; but, of course, it has operated for a long time on such a basis. It is one of our profitable multinationals because it has very successful operations all over the world. We should look at a type of structure whereby we would ensure that we could achieve maximum benefit to the State and the employees of all State companies. There is nothing in the legislation to prevent the Minister and the Minister for Finance from disposing of this valuable asset in the future.

In such circumstances the first issue that needs to be addressed is the protection of employees and to look at new concepts. The Minister is thinking in this direction, whereby the semi-State sector will be examined in terms of how we go forward, and a future model will be put in place, one of the key elements of which will be employee profit sharing. Telecom Éireann is an example of this with a maximum of 15 per cent allowed. I envisage many other elements such as worker-directors in terms of how the company will operate. The legislation should plan for a broad commercial enterprise with full protection for the State's assets and its employees. We should not think in terms of any disposal. The purpose of the amendment is to divide Aer Rianta into a retention company and look at it on an operational basis so that we would always retain the family silver but make use of its current assets while retaining its capital assets. However, in this instance we would ensure the element of employee profit sharing would be determined in terms of the issue of all shares and would be stated at a maximum of 15 per cent.

Minister for Public Enterprise (Mrs. O'Rourke): Information on Mary O'Rourke  Zoom on Mary O'Rourke  I note all the amendments tabled by Senator Costello and two of his colleagues. He was not here yesterday — I know he was busy with other matters — when we discussed on Second Stage how many distinctive and substantial amendments were tabled by Deputies Yates and Stagg and myself to the Bill in the Dáil. It was quite an altered Bill which finally emerged, thanks to very fine amendments made.

We had a good discussion on ESOPs on Committee Stage at the select committee and on Report Stage in the Dáil. Our Government brought in the Telecom Éireann ESOP, which the previous Government failed to do. Some work had been done on the matter but it was not ready when I entered office and it took us several [399] months to get a proper handle on it and do it correctly.

I am certainly in favour of ESOPs but this Bill is not the vehicle for it. It is clearly the way forward for State bodies but this is not the way to introduce an ESOP. I would encourage the unions to talk to management about such arrangements when the Bill is passed and signed by the President. There is no logical coherence and it would be wrong to decide to include share ownership in the Bill and then talk about it. It took the previous Government two years to address ESOPs, and it did not half finish the issue in regard to Telecom Éireann. It took me nine months to do it. I got a satisfactory conclusion because everyone put their backs into it. I pay tribute to all concerned.

I am in favour of employee share ownership. The way to ensure a company is successful is to give its workers a stake in it because they will want to work to ensure their return and their dividend. I will greatly encourage that, once the Bill is passed and the negotiations start between all concerned — unions, management, the Department and myself.

The Deputy said we were bringing this in because we were preparing to sell off the company. We had quite a long and constructive discussion on that matter on Second Stage yesterday. I explained yesterday that the Bill has been in gestation for 30 years since 1969. That cannot seriously be called a headlong rush.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  I am glad to hear the Minister is in favour of providing employee profit sharing for the semi-State sector. However, it is not good enough to simply say one is in favour of it——

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  I have shown I am.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  ——if one does not implement it at every available opportunity.

The Bill has been 30 years in gestation and the Minister is a newcomer to the Department. I am sure she expects to spend a good four years in that ministry and another six months would not stand in the way of negotiations taking place with the company and the unions. The Minister's success in this regard in Telecom Éireann is much to her credit.

This element could be built into the legislation as a role model and flagship approach for doing business in the semi-State sector. It would be better to insert it in the terms we have proposed because we are not making it mandatory but are saying the company may provide for employee profit sharing. That would be an incentive to get a good, commercial, profitable company such as Aer Rianta thinking in that direction.

[400]Mr. Ross: Information on Shane Peter Nathaniel Ross  Zoom on Shane Peter Nathaniel Ross  I wish to stiffen the Minister's resolve to resist this amendment. I have different views to her, but it is absurd to suggest employees have an automatic right to 15 per cent of a company's shares because it is a semi-State company.

There is a world of difference between profit sharing and equity. The principle of giving workers a share in the profits of these companies is a very good one because it gives them an identity with and pride in the company and an incentive to meet targets. I do not believe any other European country has gone as far as we have in saying we should automatically hand over 15 per cent of the equity and any negotiating rights to these companies when we bring them into the private sector, or even into the semi-State sector as a move towards the private sector. It would be mad to do so. It would involve handing over a very valuable asset rather than a share in future profits.

The Minister is perfectly right to say that if the figure 15 per cent is written down it will become automatic. I should know the figures for the rest of Europe but I did not realise this amendment had been tabled. However, I think the norm for workers in utilities in the rest of Europe is about 2 per cent, although I am open to correction.

It is crazy to say the workers should be handed 15 per cent of the ownership of the company without question. I know Senator Costello proposed that the figure should “not exceed 15 per cent” but once that figure is written down in legislation it will be 15 per cent. It would mean giving away State assets without any need to.

Let us have profit sharing and give workers in all companies the incentive to work. However, let us not negotiate or hand over our leverage and the assets of the Government, the people and the taxpayers in the legislation. I am opposed to this amendment and to any automatic handing over of 15 per cent to workers, management or anyone else.

Mr. Walsh: Information on Jim Walsh  Zoom on Jim Walsh  My view varies slightly from that of Senator Ross. Many well known Irish business people, including Michael Smurfit, have said that having an equity stake is equivalent to blood running through the veins, with which I agree. The Minister's approach to Telecom Éireann was enlightened. When employees take a stake in the company they have a common interest with the other shareholders for the future and that is the way forward. However, it would be very wrong to specify in legislation that there is an automatic entitlement to a specific percentage because it would create an expectation that might not be able to be fulfilled.

Senator Costello has said several times in this House that anyone who fails to pay their proper taxes is affecting compliant taxpayers, with which I agree. There is a parallel with that in this [401] instance in that every taxpayer has a stake in our public companies. It is important that the proper value of that stake is realised at a time when employees or anybody else invests in shares. Free shares should not be conferred on people in a way that disadvantages those who have already contributed by their taxes to ensuring that these companies function.

Mr. O'Dowd: Information on Fergus O'Dowd  Zoom on Fergus O'Dowd  I support the amendment. There is a strong principle involved, which I also support. In this modern world the old traditional ways of running companies and not involving the full participation of workers is outdated. We need a modern dynamic company, which Aer Rianta is. If and when the workers in that company have a full share and ownership in the company it will lead to a healthy involvement of the workforce. It gives them an extra interest in the affairs of the company. The more successful it is the more those shares will be valued, generating greater income.

A cement company in Drogheda has a share ownership scheme entailing payment in kind in shares, which makes a big difference to the workers. They feel much more a part of what is happening and are not separated from the administration of the company. The amendment provides that such schemes “shall not exceed 15 per cent of the total issued share capital of the company”. An acceptable figure could be negotiated. I see nothing wrong with providing for this in legislation. It is an entitlement which workers ought to have and which a positive, constructive business will want. It gives a proper role to workers and a proper recognition of their right to such role.

Mr. L. Fitzgerald: Information on Liam Fitzgerald  Zoom on Liam Fitzgerald  Nobody disagrees with the principle of issuing shares to employees. The Minister has rightly said it is not the principle that is at issue but the manner in which the amendment presents a case for legislating for the issuing of shares. That is a recipe for chaos. I caution Senator Costello and urge him to think again with regard to the manner in which he proposes the Minister should proceed. She has said she is in favour of the principle and that when the company moves forward after the enactment of the legislation she will encourage negotiation along these lines. There is a compact for constructive participation, so it is not as if the company's management and employees lack positive and progressive dialogue. It is a core feature of the way in which the company has moved forward.

I was disappointed the Labour Party did not make a significant contribution to the Bill on Second Stage. I would have thought the party, by definition, would have availed of a Second Stage debate to elucidate its views on the role of a very significant company in the semi-State sector. However, for reasons best known to itself — I [402] am sure it was busy with other matters, such as the leadership — it was unavailable to participate.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  Senator Fitzgerald said we did not participate in the debate on Second Stage. Our slot for speaking is tenth. The debate on the Bill lasted for approximately one hour.

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  It was longer than that.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  When Senator Quinn spoke I waited for the next speaker from the other side of the House. There was nobody on this side.

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  They had spoken.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  The Labour Party——

An Cathaoirleach: Information on Brian Mullooly  Zoom on Brian Mullooly  We are discussing amendment No. 1.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  Senator Fitzgerald raised the matter. Apart from Senator Ross, Senators on both sides recognise that employees in semi-State companies should participate in some element of profit sharing.

Mr. Ross: Information on Shane Peter Nathaniel Ross  Zoom on Shane Peter Nathaniel Ross  I said that was fine.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  I am pleased the Senator agrees with the amendment. The amendment states: “. The company may, subject to subsection (4), issue shares from time to time as part of one or more employee profit sharing schemes.”.

Mr. Ross: Information on Shane Peter Nathaniel Ross  Zoom on Shane Peter Nathaniel Ross  The Senator should learn the difference between profit sharing and shares.

An Cathaoirleach: Information on Brian Mullooly  Zoom on Brian Mullooly  Senator Costello without interruption.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  We are interested in both profit sharing and shares in equity and shares in the company. My preference is to protect the assets in the first instance with a holding company and to then proceed with an operational company. However, we do not have a plan and we are operating in an ad hoc manner. There is a different approach to every company. We should have a model which contains fundamental principles on the way we will deal with the semi-State sector.

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  I do not intend to have a plan because that is Stalinist. I do not intend to specify that companies must behave in the same way. That approach is daft.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  What about principles and guidelines?

[403]Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  Each company has strengths and weaknesses, different markets, types of employment and outlook. Some are better than others, some are more protected and some are subject to EU directives and legislation. To devise a plan specifying that companies must be treated in the same way goes back beyond Seán Lemass, who had a pragmatic approach to the way in which semi-State bodies should be conceived and run.

I am broadly in favour of the kind of proposal set out in the amendment. The previous Government was unable to agree the share scheme at Telecom Éireann. The Senator is entitled to put down an amendment but he is not entitled to pretend I am unfriendly to this idea; I am not. However, this is not the vehicle for it. There is a fine compact for constructive participation in Aer Rianta. In due course talks will proceed and a case will be made to management and to my Department.

What is meant by the stipulation of 15 per cent? Workers at Telecom Éireann got 5 per cent for constructive changes and for the lowering of employee numbers. They then purchased their remaining shares. There may be an argument that they got them at too low or too high a price. The company had a pension to sell. The employees were civil servants which meant they did not contribute to their pension. There was an item to sell which contributed to the balance of 10 per cent. I will not accept the amendment.

Mr. L. Fitzgerald: Information on Liam Fitzgerald  Zoom on Liam Fitzgerald  The prescription put forward by Senator Costello is nothing more than that of an ideologue.

Amendment put and declared lost.

Section 9 agreed to.

An Cathaoirleach: Information on Brian Mullooly  Zoom on Brian Mullooly  Amendment Nos. 2 and 3 are related and may be discussed together. Is that agreed? Agreed.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  I move amendment No. 2:

In page 11, between lines 22 and 23, to insert the following new subsection:

“(4) Save as authorised by the following subsection, the Minster shall not transfer or alienate any of his or her shares in the company.”.

I am concerned that we are preparing the fatted calf for sale. The Minister, as it stands, may transfer or alienate shares from the company without referring to the Oireachtas. I am concerned that this could happen without discussion and without any of the items to which I have referred being [404] incorporated into any new structures when the company would be disposed of. The employees' and taxpayers' interests would not be sufficiently protected. This amendment seeks to prevent the sale of shares without the matter being referred to the Oireachtas. The situation would be the same for Aer Rianta and any subsidiary company.

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  We discussed this before and I noted the point the Senator is making. We approached the Attorney General for legal advice on this issue as it provoked a great deal of debate on Committee Stage. The advice we received is that the level of State control imposed through this Bill is such that amendments would be necessary before any purchaser would be willing to buy the shares from the Minister for Finance, as was the case when Telecom Éireann sought a strategic partner in 1996 when Deputy Stagg was Minister. The matter would have to come before the Oireachtas in the form of amending legislation. The amendment is therefore unnecessary.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  Is the Minister saying the Bill is sufficiently broad to ensure that any change in the shareholding or any disposal by the Minister for Finance would have to be referred to the Oireachtas for approval?

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  It would have to be referred to the Oireachtas so the legislation could be amended or a new Bill initiated.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  I am satisfied with that.

Amendment, by leave, withdrawn.

Section 10 agreed to.

Section 11 agreed to.

Amendment No. 3 not moved.

Sections 12 to 15, inclusive, agreed to.

Question proposed: “That section 16 stand part of the Bill.”

Mr. Ross: Information on Shane Peter Nathaniel Ross  Zoom on Shane Peter Nathaniel Ross  Will the Minister enlighten me on the issue I raised yesterday — the Bank of Ireland monopoly at the airport? Will she instruct Aer Rianta to open up the airport to competition?

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  I asked about that this morning. There was a competition between the banks and the Bank of Ireland was chosen. The Competition [405] Authority agreed to the Bank of Ireland having a monopoly. The concession was awarded in 1993 when Dublin Airport was handling 6 million passengers. The concession comes up for renewal in 2000 and it will be granted following an open competition. It is timely that the issue was raised as I had not realised the bank was in such a position.

Mr. Ross: Information on Shane Peter Nathaniel Ross  Zoom on Shane Peter Nathaniel Ross  Could the Minster ensure that the terms are changed so that Aer Rianta does not hold what it calls an open competition and then grants a monopoly? That is an inherent contradiction — the company holds a competition and then grants sole rights to the bank which wins.

I would like to see Aer Rianta agree to have at least two banks in the airport. The problem which currently exists is the margin charged at the airport for buying and selling foreign exchange. The Bank of Ireland is on its own there with 13 million people passing its desk every year with nowhere else to go. It can charge what it likes. Many people go to the airport with no currency so they have to go to the only place which offers them foreign exchange facilities. Any bank which is in that position will fleece its customers. That is the nature of banks and monopolies.

I would like the Minister to give an assurance that she will insist that it is not just a single bank offering this facility at the airport. Tourists complain time and again that they go to the airport and get rates which do not compete with those offered down town. If there were two banks at the airport in competition with each other the tourists would not be fleeced. I am asking for the terms of the competition to be changed so that the rates will be competitive. Something must be done to stop this monopoly and it will not be addressed by having the same tender system in 2000. Will the Minister consider allowing for two banks at the airport?

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  As the number of passengers has doubled since the first tender in 1993, I would be open to discussing the matter with the Minister, Deputy Harney, as the Competition Authority is within her area of responsibility. Also the bank has a captive audience. In the changing circumstances there should be a much more robust competition. I would go further than allowing for two banks and I will talk to Aer Rianta about it.

Mr. Walsh: Information on Jim Walsh  Zoom on Jim Walsh  I concur with Senator Ross. I understand why the Minister would want to insert an enabling section so Aer Rianta can develop other airports. It would be preferable for the economy if those other airports were established independently of Aer Rianta thus generating competition. Public utilities of that nature are monopolies and lack the discipline which competition [406] imposes on companies. The emergence of Ryanair changed the face of air travel in this State. People may have reservations regarding the management style of Ryanair but it has made air transport accessible to a wider range of the public than was the case previously. The same lesson can be learned in relation to the management of airports. Ryanair has been particularly critical of the management of the airports. They are not as cost efficient as they might be. As legislators we should bear that in mind.

Mr. Cassidy: Information on Donie Cassidy  Zoom on Donie Cassidy  I bow to Senator Ross' expertise in financial matters. He has returned to this point having raised it yesterday; he must have done his homework. Last evening I checked out the situation at the airport and I understand that Bank of Ireland charges a flat rate of £2.50 for transactions. That seems reasonable considering that it gives a service from 6 a.m. to 3 a.m. the following day. As I said yesterday during the Second Stage debate, these charges are necessary because of the rates which must be paid to staff for working unsociable hours seven days a week. A flat rate of £2.50 is reasonable to change £600 or £1,000 into another currency, given what other bureaux de change charge.

When the single European currency comes into force, Bank of Ireland will lose a lot of the business it has transacted at the airport since 1973. This facility is necessary. Bank of Ireland is not there for the good of its health, but to make a profit. It is not a crime to make a profit in Ireland; it should be encouraged.

The Government has been extremely accommodating to the Labour Party considering that it is not large enough to form a group in the House as it has only three Members. Yesterday was the third occasion on which the Labour Party did not attend for the Second Stage of a Bill in the past five or six weeks.

An Cathaoirleach: Information on Brian Mullooly  Zoom on Brian Mullooly  That is not relevant to the section.

Mr. Cassidy: Information on Donie Cassidy  Zoom on Donie Cassidy  I would not have pointed this out only that the Opposition groupings decided which parties would speak. I welcome the fact that Senator Costello is here this morning because it would have been dreadful if the Labour Party was not represented during the debate on this important legislation.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  I am delighted that Senator Cassidy is concerned about the Labour Party. I remind him that we won the last two by-elections.

Mr. Cassidy: Information on Donie Cassidy  Zoom on Donie Cassidy  The Senator's party lost the election last week.

[407]An Cathaoirleach: Information on Brian Mullooly  Zoom on Brian Mullooly  That has nothing to do with the section.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  I thought I made it clear why I was unable to be in the House yesterday.

I commend Senator Ross for raising this matter. He is always right when he speaks about competition, particularly in financial institutions. It is outrageous that Bank of Ireland, which has a monopoly, charges a £2.50 flat rate. Most of the business at the airport is transacted by families going on holidays who have relatively small amounts of money. There is a bank branch at the entrance to the airport and at the duty free shops and there is also an ATM. Many people coming back from holidays change pesetas, drachmas or liras at the airport where they are charged £2.50. That is unacceptable. This would not happen if there was competition. I am in favour of having a second bank at the airport if the opportunity arises in the year 2000. The Minister was right when she said the numbers have doubled since the last concession was given. There should be competition at the airport.

Mr. O'Dowd: Information on Fergus O'Dowd  Zoom on Fergus O'Dowd  I congratulate Senator Ross for bringing to our attention the fact that Bank of Ireland is the only bank at the airport with access by the public. I welcome the Minister's statement that she favours competition. Banks are in business to make a profit. Bank of Ireland has offices throughout the country and it should not charge any more than the market rate in any of them. I do not have any sympathy for Bank of Ireland, unlike Senator Cassidy. It is exploiting people who have no choice. Many people who go to the airport are in a hurry, so they have no choice but to change money there.

Banks, such as National Irish Bank, have not behaved well. People do not have confidence in their activities, which have been hidden up to now. In future it will be possible for anyone who has a bank card to get foreign currency in the ATM at the airport. The same charges should apply there as apply in branches in the main street. I hope this situation changes in the year 2000.

Mr. Ross: Information on Shane Peter Nathaniel Ross  Zoom on Shane Peter Nathaniel Ross  I apologise for speaking again but I have to correct some of the things Senator Cassidy said. He referred to the £2.50 commission, but that is not the point. The point is the margins which are charged between the buying and selling price. There should not be any commission. Bank of Ireland's profit is made in the margins between the rates at which it buys and sells the dollar, the yen and the pound. The £2.50 commission is a rip off and an outrage. It is an additional piece of cream on the cake. It is outrageous that there is any commission because it is making adequate profit. However, no one can stop it because it is there on its own.

[408] Bank of Ireland does not open from 6 a.m. to 3 a.m. 364 days a year, or it did not the last time I inquired about it.

Mr. Cassidy: Information on Donie Cassidy  Zoom on Donie Cassidy  I said from 6 a.m. to 3 a.m. the following day.

Mr. Ross: Information on Shane Peter Nathaniel Ross  Zoom on Shane Peter Nathaniel Ross  It stays open until the last flight, which is not always at 3 a.m., and it is not open 364 days a year. We should not exaggerate the amount of work it does. It opens when there are large numbers of passengers passing through, which is reasonable.

To say that the average person is changing £600 and £1,000 is absurd. People do not travel with that amount of cash but with travellers cheques, Euro cheques and Visa cards. The average amount changed is much smaller than that. The £2.50 commission is proportionately more as the amount decreases. I carried out an experiment, although I cannot remember the exact result, where I changed a small amount of money at the airport into sterling and then I changed it back into Irish pounds. The margin the bank made on that, in addition to charging me £2.50 each time I changed it, was horrific. This happened because there was no competition. The £2.50 is relevant for people changing small amounts of money. We are not all plutocrats. We do not all change £1,000 every time we leave or enter the country. Many of us depart and return the same day and change £50 or less. Therefore, it is important.

To say it will all change when the euro is introduced is misleading. It will change for some currencies but it will not change for the dollar where the margin is huge. It was 8-9 per cent the last time I looked at it and American tourism is so important. It will not change for sterling because sterling will not be part of the euro, and it will not change for yen. It will not change for the three largest currencies in the world, two of which are the currencies of countries which are Ireland's greatest source of tourism.

I do not know whether the Minister is in a position to answer my final question and I am sure she cannot answer it off the top of her head. However, this information should be available to the public. How much does Aer Rianta charge Bank of Ireland for this facility? How much is the bank prepared to pay for it? What is this monopoly position worth to the bank?

Mr. L. Fitzgerald: Information on Liam Fitzgerald  Zoom on Liam Fitzgerald  The last question the Senator posed was the first I was going to ask. The £2.50 charge is relevant but whether or not the discrepancy in the rates charged at the airport and down town can be justified is the most significant element. I encourage the Minister when she is conducting a review of this matter — she is obviously interested in ensuring one will be carried out in consultation with her colleague, [409] the Tánaiste — to have the Competition Authority examine whether the discrepancy in rates is justified, given the unsocial hours which must be worked to provide this day and night service, to which Senator Cassidy referred. She might also see if there is an international comparison. I am not saying that will justify it, but all aspects of the discrepancy in charges should be investigated.

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  The discrepancy in charges, if it exists, is not my business but the Senator was right to bring it to my attention so that it would be addressed. The point Senator Ross made yesterday was timely. My official thinks I may not have to consult the Tánaiste or the Competition Authority, but I will do so out of courtesy. Over the weekend I will arrange a meeting with the chairman of Aer Rianta. I will put to him the views which have been expressed here and ask that there be competition on the ground in banking facilities at Dublin Airport in view of, and even if there had not been, a huge increase in numbers. I know that a competition was held at which Bank of Ireland was chosen but that was a competition for entry, which is a normal procedure and which I am sure was done properly. However, competition for entry is not the same as competition in situ. One bank has a monopoly. I am not being critical of the bank; I am just saying that one bank has a monopoly of captive customers. The Senator's point is a good one.

With regard to what Aer Rianta is charging for it, I will have that figure before the debate ends. I have sent for it.

I will raise the matter with the chairman as early as possible next week and I will write to Senator Ross and make known the outcome to the other Members. I will ask the chairman to ensure that whatever mechanism for entry competition is used on the next occasion more than one bank will be offering services.

Mr. Ross: Information on Shane Peter Nathaniel Ross  Zoom on Shane Peter Nathaniel Ross  I thank the Minister. That is an extremely positive and constructive response.

Question put and agreed to.

Sections 17 to 23, inclusive, agreed to.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  I move amendment No. 4:

In page 19, lines 7 to 11, to delete subsection (2).

It seems that this subsection would render much of the Bill meaningless in that it states:

Nothing in section 23, this section or the memorandum of association of the company shall be construed as imposing on the company, [410] either directly or indirectly, any form of duty or liability enforceable by proceedings before the court. .

It seems to suggest that nothing whatsoever in the memorandum, the section or the subsection shall make the company liable before the courts. If that is the interpretation of it, then there are no sanctions to be imposed irrespective of the type of activity which might be prohibited under the terms of the memorandum or the section. There is a wide range of business activities, etc., which are being engaged in either by the company or in conjunction with other parties. It is a strange subsection to include and I wonder why the Minister has provided for it. Would it not be better to delete it so that it will be clear that every activity of the new company will be subject to the full force and sanction of the law?

Mr. Walsh: Information on Jim Walsh  Zoom on Jim Walsh  The Senator may be misconstruing the meaning of that section. Section 23 deals with the objects of the company and it does not mean that the company is, in fact, removed from any responsibility in regard to matters which might be taken to court. It just means that it cannot be taken to court on those particular issues.

I want to deal with one other aspect of section 24. I commend the Minister——

An Cathaoirleach: Information on Brian Mullooly  Zoom on Brian Mullooly  We are dealing with Senator Costello's amendment at present. When we have disposed of the amendment, we will then deal with the section.

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  We had a fair debate on this matter on Committee Stage in the select committee. Senator Costello wants to delete the subsection. Section 24(2) prevents anybody taking the company to court for not pursuing the many objectives listed in section 23. Of course it does not mean that the company cannot be pursued in the normal manner through the courts for damages, injuries, debts, etc., but the articles do not say that it must do any of those things.

I would draw Senator Costello's attention to one of the company's aspirations which is laid out in section 23(1)(e), which states: “to engage in any business activity, either alone or in conjunction with other persons and either within or outside the State, that it considers to be advantageous to the development of the company .”. If one takes that particular aspiration, the company could be taken to court on the basis that it did not make a satisfactory effort to get business inside or outside the State. While the objectives of the company are aspirational, if one were to delete those it would seriously undermine the Bill.

Amendment put and declared lost.

[411] Question proposed: “That section 24 stand part of the Bill.”

Mr. Walsh: Information on Jim Walsh  Zoom on Jim Walsh  I commend the Minister for including in the duties of the company the fact that it must conduct its affairs in a cost-effective manner. That is essential. Ireland is a trading nature. More and more people must travel for business purposes. Business travel in Ireland is far too expensive. From what I remember of the United States a couple years ago, one can travel almost anywhere for $99 because of liberalisation. It is important that we inject that into the system here.

It will be more important if duty free sales are discontinued. I know efforts are being made to ensure that will not happen, but were the abolition of duty free facilities to take effect it would impact seriously on Aer Rianta. It would be imperative that the company would be duty bound to operate cost effectively. The Minister might consider an efficiency audit of the company in advance of that so that best practices are applied and to ensure that if duty free shopping is discontinued — or even it if is not — the cost of running our airports is reduced and the consumers get value for money.

Question put and agreed to.

Section 25 agreed to.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  I move amendment No. 5:

In page 19, between lines 39 and 40, to insert the following new subsection:

“(4) The company shall not alienate any interest in land comprising an airport vested in or owned or managed by it.”.

The purpose of this amendment is to ensure that there shall be no permanent disposal of the company's assets or property. Section 26 allows the company to “appropriate any part of an airport vested in it by section 14 or owned or managed by the company in accordance with section 16 to the use of any person for the purposes of any trade, profession or other activity in consideration of the payment to it of such charges and in accordance with such conditions as the company may consider reasonable”.

The section makes no provision for any permanent disposal of property. I wish to ensure that that continues to be the case. The legislation appears to leave the Minister free to go beyond that and, as the sole shareholder, to alienate the company or one of its subsidiaries. The amendment will prevent the permanent disposal of any airport property.

[412]Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  A key purpose of the Bill is to normalise Aer Rianta's position as a stand alone commercial semi-State company. This amendment would prevent or limit Aer Rianta's scope for normal commercial action. The Bill gives the company a commercial mandate to own and manage airports. This may from time to time involve the purchase of additional plots of land or the sale of land which may no longer be required. The amendment would not allow the company the freedom to do normal commercial business which it should be able to do. It would also have the very harmful effect of preventing the company from disposing of airports it has acquired abroad as it may wish to do. If the amendment were passed the company could neither purchase nor dispose of property. No one wishes to see Aer Rianta limited in its commercial activities.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  The Minister is saying the airport will operate on a purely market basis and the company will be free to alienate or dispose of any part of its property on a permanent basis. What constraints does she envisage the Minister having on such developments and what monitoring does she propose of such disposals of property? The Minister will continue to be the main shareholder in the company. How will he or she ensure that any disposal of assets will be in the best interests of the company and of the taxpayer on whose behalf the Minister's shareholding is held?

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  Sometimes I am accused of being too intrusive in the business of semi-State companies. On other occasions I am told I am too distant from them. I know that in politics one cannot please all the people all of the time.

The Senator is asking how the Minister keeps track of the activities of semi-State companies. I hold regular meetings with the chairmen or chairwomen of all semi-State companies at least once a month. I also meet them at various other occasions and the chairmen and chairwomen often ask to come to see me. That has been the practice of all Ministers over the years and is a very good mechanism for keeping in touch with the progress of the companies. Aer Rianta has a commercial remit and may need to purchase or dispose of land. The companies would consult the Department if any sale or purchase of a major nature was being considered but I would not dream of intruding in normal daily business activity.

Amendment put and declared lost.

Sections 26 and 27 agreed to.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  I move amendment No. 6:

In page 20, between lines 31 and 32, to insert the following new subsection:

“(5) Not less than one-third of the directors of any subsidiary shall be persons appointed to be directors of the company under the Worker Participation (State Enterprises) Acts, 1977 to 1993, who are willing to accept office, and every person who is appointed to be a director of a subsidiary under this subsection shall hold office as such director for such period as may be determined by the company with the approval of the Minister at the time of the appointment.”.

This amendment, like the others I have tabled, seeks to influence the direction in which semi-State companies develop as they are released from the control of the State. It is desirable that workers' representation be included in the legislaton. I understand the Minister looked favouraby on this proposal when the Bill was debated in the Dáil and I wonder what her view is now.

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  Senator Costello is correct. When this point was discussed on Report Stage in the Dáil, I undertook to speak to the Minister for Enterprise, Trade and Employment and report to the Seanad. The amendment seeks to provide that worker-directors are appointed to the subsidiaries of the company. I would be happy to facilitate such a change in response to a request from the staff of the company. Legislation requires that a request first come from the staff. Consideration of this matter need not be linked to this Bill and can arise at any time. It is for the Minister for Enterprise, Trade and Employment to adapt and amend the Schedules of the Worker Participation (State Enterprises) Acts and it is a matter to be considered under that industrial relations legislation. Under the legislation a request for an addition to the Schedules could only be made by me, as Minister, following a joint submission to me by Aer Rianta staff and management seeking this change. I have not received such a request but I have spoken to the Minister for Enterprise, Trade and Employment and she has confirmed that she would gladly agree to such a request. If a wish is expressed that the company be added to the First Schedule of the Worker Participation Act, I will support that request, as would the management, and the necessary order would be made by my colleague the Minister for Enterprise, Trade and Employment. Such orders were made when, for example, IFI took over the core operating functions of its parent company, NET and in the case of TEAM Aer Lingus. A further change is also [414] proposed under the new Turf Development Bill. The Minister for Enterprise, Trade and Employment has advised that at present no subsidiaries or State enterprises are included under the Second Schedule but I await a formal request by the employees and management which I will pass to the Minister for Enterprise, Trade and Employment.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  I am pleased with the Minister's response. She says that on the request of the staff of the company she will look favourably on——

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  I said I have spoken to the Minister for Enterprise, Trade and Employment and she has confirmed that she would gladly agree to such a request.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  What timescale is involved? Have the staff and management been informed of that option?

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  I am sure we will inform them. The request must come from them and I will pass it on to the Minister for Enterprise, Trade and Employment. We will ensure they are aware of the mechanism. It can be done by an order under the Worker Participation (State Enterprises) Act. If I get such a request I will not delay with it. We debated the matter in the Dáil and I indicated that I would return to the point in the Seanad.

Amendment, by leave, withdrawn.

Sections 28 and 29 agreed to.

Acting Chairman (Dr. Henry): Information on Mary E.F. Henry  Zoom on Mary E.F. Henry  Amendment No. 8 is an alternative to amendment No. 7 and they may be discussed together. Is that agreed? Agreed.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  I move amendment No. 7:

In page 21, before section 30, to insert the following new section:

“30.—Not later than 6 months after the end of each accounting year of the company, the company shall make a report in writing to the Minister of its activities and those of its subsidiaries during that year and the Minister shall lay copies of the report before each House of the Oireachtas.”.

It should be normal practice that a report is made to the Minister in the interests of accountability and transparency and so that the Minister will be informed. The report should also be made available to the Oireachtas. If there is an issue of sensitive [415] information which the chairman of the company may wish to exclude, I am sure arrangements could be made to facilitate that. A report is essential. It should be presented regularly and made available to the Minister and to the Oireachtas. It is a certain way of ensuring that everyone knows what is going on.

Mr. Ross: Information on Shane Peter Nathaniel Ross  Zoom on Shane Peter Nathaniel Ross  Senator Quinn's amendment No. 8 reads:

In page 21, subsection (2), line 19, after “Oireachtas” to insert “not later than three months after the end of the financial year”.

Aer Rianta is not a culprit in this regard because it issues its annual reports in good time. Its last annual report was out well within the six month period referred to. However, there are other semi-State bodies which are serious sinners in this regard. It can do no harm to have a legislative requirement such as that proposed in the amendment.

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  Section 30 provides for the submission of the company's annual report to the Minister and that it would be laid before the Houses of the Oireachtas for the information of Members. The proposals in the amendments that the report would be submitted within six or three months from the end of the financial year mirror a debate in progress on the revision of the Government guidelines for State-sponsored bodies, whether we should make a further provision in law for the time allowed and how long that time should be.

The matter is already dealt with under the Companies Act which requires companies to report within nine months from the end of their financial year and Stock Exchange regulations for quoted companies impose a six month period. The current Government guidelines specify a six month period. A proposed revision of those guidelines will go to the Government shortly. The Departments responsible for semi-State bodies have been asked to submit ideas. It would seem a shorter time will be proposed. If the proposal is agreed the semi-State bodies will be required to be six months ahead of private companies and three months ahead of Stock Exchange quoted companies. I note that Mr. Ron Bolger launched the Telecom Éireann report yesterday which I brought to Cabinet about a month ago. Its financial year ended in April giving, therefore, a two month period to its publication.

Changes are being considered and it may well be that a shorter time span will emerge from that consideration. The provisions proposed by Senator Costello already exist. There are changes being proposed to the guidelines and we are making contributions. The length of time for the [416] issuing and the publication of the report is under discussion. It is an ongoing matter and I cannot say much more on it. I would favour it being made available earlier.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  We wanted a time specified in the legislation because it is a problem if reports and financial statements arrive later than they should. If a time is specified in legislation it may focus minds. The legislation should specify a time period.

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  As it is being discussed at present it would be incorrect for me to put the matter into legislation. I understand the Senators' point. I took office a year ago today and there was a report from a semi-State body that had been with the Minister for some months and had not been brought to Cabinet. When I make my submission to Cabinet on this issue I will seek earlier production of reports.

Amendment, by leave, withdrawn.

Amendment No. 8 not moved.

Section 30 agreed to.

Sections 31 to 47, inclusive, agreed to.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  I move amendment No. 9:

In page 36, before section 48, to insert the following new section:

“48.—(1) Whenever the Irish Aviation Authority is of opinion that the unrestricted use of a particular area of land in the vicinity of an airport owned or managed by the company would interfere with the efficient operation or development of that airport, it may by order prohibit any person, save under and in accordance with a permit granted by the company, from erecting or adding to any building on the land specified in that order.

(2) The Minister shall make regulations to enable this section to have full effect.”.

This amendment relates to the debate in the Dáil on the need for personnel to ensure that developments do not interfere with or restrict the activity of an airport. This section deals with authorised officers who have specific functions in the company. During the debate in the Dáil, the Minister said she had reservations about the company being responsible for this area. This amendment proposes that the Irish Aviation Authority should be responsible for dealing with unrestricted use of areas of land in the vicinity of [417] an airport. Some power is necessary to restrict developments which could be hazardous.

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  Aer Rianta obviously has regard for safety but the Irish Aviation Authority is charged with implementing safety measures at airports and has statutory responsibility for the regulation of air safety in Ireland. There is an overlap between the powers in each body. Following the debate in the Dáil, officials are conducting a detailed examination of the regulatory regime for aviation safety. This will clarify where the final responsibility for the making of protected area orders rests.

Over 40 Government and Opposition amendments to this Bill were accepted on Committee Stage in the Dáil, including one from Deputy Sargent. The similar amendment to this one and one relating to worker participation were not accepted. However, they did give rise to further examination of issues, including the regulatory regime for aviation safety. When that examination is concluded, we hope the matter will be returned to in the broader context of an amendment to or a revision of the Irish Aviation Authority legislation. I will keep the Deputy informed.

Amendment, by leave, withdrawn.

Sections 48 to 64, inclusive, agreed to.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  I move amendment No. 10:

In page 42, after line 18, to insert the following new subsections:

“(5) Section 6 of the Defence (Amendment) Act, 1987 shall apply with any necessary modifications to a person who the captain of any aircraft reasonably believes to be committing an offence under this section.

(6) For the purpose of determining the venue for the institution of proceedings, an offence under this section may be prosecuted in the District Court Area in which the aircraft concerned arrives into or departs from the State.

(7) For the purposes of this section an act done during a flight originating of terminating in the State shall be deemed to have been done in the State.”.

This amendment strengthens the role of the captain on a flight. It provides for the meting out of almost immediate justice if a passenger is unruly on a plane. A District Court can deal with the matter in the area from where the flight departs or where it arrives. If someone behaves in a criminal or unruly fashion on an aircraft, it [418] can be hazardous for the passengers and airline staff. This amendment provides for the imposition of sanctions when a plane lands.

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  Deputy Yates proposed a similar amendment to this one on Committee Stage in the Dáil. We brought it to the parliamentary draftsman who redrafted it in more legal terms. The amendment addresses the growing problem of unruly behaviour on board aircraft in flight. Unruly behaviour in a closed space where there is nowhere to go is more serious in intent and more horrendous in effect than such behaviour at a soccer match.

We inserted a new section in the Bill to deal with this and I consulted the Attorney General and the Minister for Justice, Equality and Law Reform on it. I was told that any new provision would be best as an insertion in the overall framework of the Air Navigation and Transport Act, 1973, which was passed to apply the Tokyo Convention on offences committed on board aircraft.

Deputy Costello's amendment has the same intention and specifies the Defence (Amendment) Act, 1987, which is an adaptation of the relevant sections of the 1973 Act. The 1987 Act extends restraining powers to captain and crew of military aircraft that may have civilian passengers on board. However, it does not specify arrest or prosecution procedures. The language in that Act is the same as that used in the 1973 Act. The Senator's amendment, which is valid, is covered by the amendment included on Report Stage in the Dáil following acceptance of Deputy Yates's amendment on Committee Stage.

Amendment, by leave, withdrawn.

Section 65 agreed to.

First and Second Schedules agreed to.

Title agreed to.

Bill reported without amendment and received for final consideration.

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

Mr. Cassidy: Information on Donie Cassidy  Zoom on Donie Cassidy  I congratulate the Minister for bringing this legislation before the House. As stated on Second Stage, 30 years ago her predecessor, Erskine Childers, a former President, had it in mind to introduce legislation of this sort. I congratulate the Minister for introducing the Bill so soon after she took office. The Bill represents an encouragement to Aer Rianta, which is a successful company. I hope all Irish companies will exhibit the same outlook, determination, energy [419] and efforts displayed by the chief executive, the chairman and the employees of Aer Rianta.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  Like Senator Cassidy, I congratulate the Minister and I welcome the passing of the Bill with the caveats to which she referred included. The amendments put forward in this House sought to improve the legislation further. I also congratulate the Minister on her first year in office.

Minister for Public Enterprise (Mrs. O'Rourke): Information on Mary O'Rourke  Zoom on Mary O'Rourke  I thank Senator Costello for his remarks. He and I once fought on different turf.

Mr. Costello: Information on Joe Costello  Zoom on Joe Costello  I am sure we will do so again. The Minister is doing a good job in coming to terms with her brief. I congratulate her and her staff for the manner in which they dealt with the legislation.

Mr. O'Dowd: Information on Fergus O'Dowd  Zoom on Fergus O'Dowd  I wish to be associated with the remarks of the previous speakers. This is the first Bill in which I have been involved as my party's spokesperson on Public Enterprise. I look forward to the introduction of further legislation in this area because, like the Minister, I prefer to be busy.

Minister for Public Enterprise (Mrs. O'Rourke): Information on Mary O'Rourke  Zoom on Mary O'Rourke  I thank Members for a fruitful debate on the Bill. It was interesting to listen to the various points of view expressed. Like the Leader of the House, Senators Liam Fitzgerald, Costello, O'Dowd and others I also prefer to be busy. I hope we will be busy for some time to come.

I recognise that Senator Costello is diligent and the amendments he tabled were carried over from the Committee and Report Stage debates in the Lower House where they could not be taken. His amendments dealing with worker participation and air safety have provoked action and I believe both will come to fruition.

This has been a useful debate and I thank my officials for their diligence in preparing me for it. Above all, I am glad to be in the Seanad because the atmosphere in this House allows for reflective and combative, but not contentious, debate.

In his own way, Senator Ross contributed strongly to the debate. Senator Henry referred to the need for Aer Rianta staff to be conversant in foreign languages and I am sure the management of the company will note her comments. Senator Ross raised the issue of the banks which is extremely important. Senators Quinn and Costello referred to the earlier production of accounts to be laid before the Houses of the Oireachtas and Senator O'Dowd displayed an in-depth knowledge of the workings of Aer [420] Rianta. I am very satisfied with the outcome of the debate.

Question put and agreed to.

Acting Chairman (Mr. Finneran): Information on Michael Finneran  Zoom on Michael Finneran  When is it proposed to sit again?

Mr. Cassidy: Information on Donie Cassidy  Zoom on Donie Cassidy  At 12 noon on Tuesday next.


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