Dáil Éireann - Volume 452 - 16 May, 1995

Ceisteanna—Questions. Oral Answers. - Irregularities in Beef Industry.

18. Miss M. Wallace asked the Minister for Agriculture, Food and Forestry the person from whom he is taking legal advice in respect of the EU Commission attempt to impose fines on Ireland regarding irregularities in the beef industry in view of the fact that the Attorney General will not be advising him in the matter. [8805/95]

43. Mr. N. Treacy asked the Minister for Agriculture, Food and Forestry the progress, if any, that has been made regarding his Department's defence against the fine being sought to be imposed by the EU Commission in respect of irregularities alleged in the beef industry. [8809/95]

Mr. Yates: I propose to take Questions Nos. 18 and 43 together.

The Commission Service notified my Department in March of their proposal to disallow £74.5 million arising from an inquiry into the operation of beef intervention in 1990 and 1991. This inquiry also covered a number of other member states and the Commission Services have proposed disallowances for France, Italy and the UK. The disallowances are proposed in the context of the clearance of accounts for 1992.

My Department disputes the proposed disallowance on a number of technical grounds and on the basis that the disallowance is disproportionate. I have outlined the basis for our disagreement with the proposal made by the Commission Services to Commissioner Fischler and the Secretary and other senior officials of my Department have also delivered the same message to their equivalent Commission officials.

The next stage of the process is to [1716] submit the case to the conciliation process which is now an established part of the procedure for clearance of accounts. This process involves presenting in detail to the conciliation body the grounds on which the Irish authorities disagree with the basis upon which the Commission Services have made their proposal for disallowances. The preparation of the case to be made to the conciliation body is well advanced and is being overseen by a committee of senior officials of my Department.

The Attorney General has nominated an officer from his office to work on this dossier and there will be close co-operation between my Department and this senior officer in the preparation of the case to be presented to the conciliation body. Should it be necessary then or at a later stage to seek further legal or other professional assistance, including the instruction of counsel at the appropriate time, this will be done.

Mr. M. McDowell: Does the Minister agree that the European Commission might be more impressed if those responsible for the irregularities in question in respect of which disallowances have been made were made liable to reimburse either the Commission or the State? In that context, is he aware that I have written to the Taoiseach, the Minister for Enterprise and Employment, Deputy Bruton, the Attorney General and the Director of Public Prosecutions asking whether proceedings are to be brought in the High Court to disqualify any of the directors named on page 336 of the beef tribunal report as having been responsible for the tax fraud from having any part in the management of any company in the foreseeable future? Does the Minister not think it strange that he welcomed the resumption of autonomy in respect of one of the companies involved in this matter without at any stage requiring those responsible for the decisions which have cost this country so much to make some contribution to pay back the cost?

Mr. Yates: On the principle of [1717] recoverability of whatever fines may be involved, it is my policy, and the Government's view, that those responsible for any general disallowance should be held culpable and that the issues of recoverability and culpability should be integrated. Once we have negotiated and made representations to secure the lowest possible fine, I envisage that the group which has been established to work on this matter will be focused in that direction.

I have also taken steps to ensure that FEOGA grant-aid to companies which may have contributed to the fines will be suspended pending the outcome of this process. Both matters show my clear determination to ensure that the taxpayer will not be held responsible. It would be premature to say what point those issues have reached, in terms of recoverability, other than to indicate my determination to pursue them.

In relation to the formation of Irish Food Processors, the situation is very simple. I am not involved in the business of personalities. If six new investors invest in the largest beef processing capacity in the country and remove the uncertainty which exists for farmers, customers and everyone else connected with the beef industry, not to speak of jobs, this is something I have to welcome. I was very surprised at the coverage it received in so far as that the real story is that the previous main incumbent has been spancilled and is very much a minority shareholder. There will be no favouritism or special relationship while I am Minister. If there was major investment from an outside source in the beef processing industry, which is worth billions of pounds to this country, I should be seen to act fairly and properly and in a developmental way.

Mr. Cowen: When can we expect this issue to be brought to a conclusion?

Mr. Yates: In terms of the level of fine and so on, I hope by the end of this year. There are five fines involved. [1718] Therefore there will be different time-scales. The clearance of accounts for 1992 will have to be completed by the end of this year. I therefore expect this issue to be brought to a conclusion some time between September and December.

Mr. M. McDowell: Does the Minister accept that I do not want to get involved in the business of personalities either? This House established an expensive tribunal which cost £30 million. One of its major findings is set out in chapter 9 of its report——

An Leas-Cheann Comhairle: We do not want to debate the beef tribunal report. Let us not go beyond the bounds of these questions which are limited.

Mr. M. McDowell: I appreciate that. One of the findings was that the companies in question engaged in major tax fraud and that top management — the phrase used in the tribunal's report — was aware of and organised this. Is the Minister willing to say that the Government will use its legal powers to apply to the courts to ensure that directors and managers of a company which engaged in the largest single fraud in the State will be disqualified from acting as directors and managers? Will the Minister indicate whether this will happen?

Mr. Yates: The Deputy knows full well that that issue does not come within my area of responsibility. If there is a particular delay in obtaining a reply from my colleagues with whom he corresponded I can assist in that regard. I have no function in relation to the Companies Act in this regard. It would be improper of me to state anything other than that the Government is anxious to implement the recommendations of the beef tribunal report, some of which are being discussed in another fora at present. This is causing the Deputy difficulty. The Government wants to apply the highest standards of integrity, accountability and transparency.