Seanad Éireann - Volume 145 - 20 December, 1995

Harbours Bill, 1995: Report Stage.

An Cathaoirleach: I remind Senators that a Senator may speak only once on each amendment on Report Stage, except for the proposer of the amendment who may reply to the discussion on it. Each amendment must be seconded.

Government amendment No. 1:

In page 14, line 12, to delete “exclusive”.

Minister of State at the Department of the Marine (Mr. Gilmore): On Committee Stage Senators Lee and Norris [1792] expressed reservations in relation to section 11 (4) (b) which empowers a port company to “appropriate any part of its harbour to the exclusive use of any person for the purposes of any trade or profession, in consideration of the payment to it of such charges as the company considers reasonable.” The word “exclusive” was strongly objected to. I indicated that I would be prepared to delete the word and the amendment provides for this.

Amendment agreed to.

Government amendment No. 2:

In page 16, to delete lines 9 to 15, and substitute the following:

“(7) (a) A company may require—

(i) where the condition specified in paragraph (a) (i) or (b) of subsection (8) is satisfied, the owner or master of a ship, or

(ii) where the condition specified in paragraph (a) (ii) of subsection (8) is satisfied, the agent for a ship, being in either case a ship the navigation of which or the fact of its carrying goods or passengers or of any other circumstances referred to in subsection (1) that involve the ship will result, or results, in harbour charges being imposed by the company (whether on one or more than one occasion), to give to the company a bond, or such other type of security as the company specifies, for the payment of those charges.

(b) The amount of the bond or other security that a company may require to be given under this subsection (other than in relation to harbour charges imposed in respect of a ship referred to in subsection (8) (b) shall not exceed 25 per cent. of—

(i) if the company has imposed harbour charges on the [1793] owner, master or agent concerned (’the person concerned’) in each of two or more years prior to the making of the requirement, the average of the amount of harbour charges imposed by it on that person in such a year,

(ii) if the company has imposed harbour charges on the person concerned in only one such year, the amount of harbour charges imposed by it on that person in that year,

(iii) in any other case, the amount of harbour charges the company estimates it will impose on the person concerned in the period of 12 months commencing on the making of the requirement.

(8) The conditions referred to in subsection (7) are—

(a) that, before the making of the requirement referred to in that subsection—

(i) the owner or master concerned has failed to pay harbour charges imposed by the company or, on 2 or more occasions, has paid harbour charges imposed by the company to the company after the latest date stipulated by it for their payment, or

(ii) in the case of the agent concerned, he or she has failed to pay moneys to the company which he or she has received from a person on account of harbour charges imposed on that person by the company or, on 2 or more occasions, has paid moneys so received by him or her to the company after the latest date stipulated by it for the payment of the harbour charges concerned,

(b) that—

(i) the ship concerned has [1794] not entered the company's harbour on any previous occasion and the company does not regard it as likely that it will enter its harbour again in the period of 12 months commencing on the entry concerned, and

(ii) the owner or master of the said ship has not retained an agent to act on his or her behalf for the purpose of paying any harbour charges that may be imposed by the company in the circumstances concerned.”.

Mr. Gilmore: On Committee Stage Senator Fitzgerald agreed to withdraw his amendment seeking the deletion of section 13 (7) on the understanding that I would give further consideration to the bonding provision. Senators will recall the Irish Ship Agents' Association was of the view that the bonding provision as provided for in section 13 (7) contravened the law of agency and may also be contrary to EU competition rules. Advice from the Attorney General's office was to the effect that there was no valid legal basis to the objections raised by the association.

Notwithstanding this, I undertook to reconsider the matter with a view to ensuring equity in relation to the provision, for example, that ship owners, masters and agents are treated in the same manner and, to limiting the bonding provision to cases where difficulties are being encountered.

The amendments I propose — new subsections (7) and (8) — provide that where there is an unsatisfactory record, for example, where outstanding harbour dues are in arrears or where default in payment occurs, a company may require the owner, master of or the agent for a ship to give a bond or such other type of security as the company specifies, to the company for the payment of those charges. The amendments also provide that the bond or security as the case may be which may be sought by a port [1795] company shall not exceed 25 per cent of the annual harbour charges imposed by a company on the owner or master of a ship or the agent for a ship — that is under subsection (7) (b) (i) and (7) (b) (ii).

The amendments also provide that in the case of a ship calling to a port on a once off basis not operating through an agent, or where there is no record, a company may seek such security from the owner or master of the ship in question in relation to the payment of harbour dues as it deems necessary. I again confirm the majority of agents — in excess of 90 per cent — pay their principal's charges in full and on time and the amendments as proposed will not penalise or place any burdens on them for so long as they continue to pay in full and on time. The amendments protect the port companies in relation to late payments and defaulters.

I also emphasise, in case there is any doubt in the matter, that the new subsections 7 and 8 are not making ships' agents liable for their principal's charges. I draw particular attention to subsection (8) (a) (ii), under which where the owner has paid harbour charges to the agent and the agent is late in handing these over to the port company or defaults in paying them over, then in such circumstances and only in such circumstances the port company may seek a bond or security from the agent concerned. The majority of ships' agents will therefore not be affected by the new provisions. I commend the amendment to the House.

Mr. Fitzgerald: I agree with the Minister on the new subsection (8) (b) (ii) and I will not go back on my word. I said on Committee Stage that people who are in default should have a bond. If a shipping company pays an agent money which he has not handed over to the harbour authority, that is a ridiculous situation and no one could condone it.

[1796] Subsection (8) (b) (i) concerns the first time a ship enters the harbour and states:

has not entered the company's harbour on any previous occasion and the company does not regard it as likely that it will enter its harbour again in the period of 12 months commencing on the entry concerned.

I have no reason to ask the Minister to change this but he must bear in mind that new business is always welcome in a port and, as the subparagraph relates to new business, one should be careful in this respect. Does the Minister think a bond is needed in such a case, when a ship enters a harbour only once a year or perhaps once over a longer period? However, I agree with the rest of the amendment.

Mr. Gilmore: The new subsection (8) (b) (i) must be read with subsection (8) (b) (ii) because they go together. This provides for a situation where a ship enters a harbour only once and an agent has not been engaged. A port authority may then exercise its discretion to require a bond. It is an enabling provision and does not place an obligation on the port authority to look for a bond on each occasion. The authority may exercise its judgment as to whether a bond might be required. This enabling provision covers once-off situations where an agent has not been engaged.

Mr. Mooney: Given the Minister's wide experience of this legislation he may be able to clarify the following point. When Irish Shipping went into liquidation, some of its ships on the high seas made for the nearest port. I had a personal interest because the Irish Spruce made for Marseilles, where my brother was living, and for the next six months the captain and crew had to stay within the harbour. The ship was not allowed to leave and a document was placed on the mast of the ship because money was owed and the company had been placed in liquidation. In the context of bonds under this amendment, if [1797] a company goes into liquidation and its ship is in port or makes for the nearest harbour, what happens when a bond is not entered into and the harbour master is faced with the ship needing to enter the harbour? What are the financial consequences of that, if it is covered by this amendment?

Mr. Gilmore: A number of provisions cover that. The most effective is probably that whereby the port may take and sell the vessel in order to discharge whatever liabilities there are.

Mr. Mooney: I am grateful to the Minister.

Amendment agreed to.

An Cathaoirleach: Amendments Nos. 3 and 4 are related and may be discussed together.

Government amendment No. 3:

In page 16, line 24, after “harbour charges”, to insert “of an amount that, having regard to all the circumstances, is fair and equitable”.

Mr. Gilmore: The purpose of these amendments is essentially to enshrine in the Bill a mechanism whereby the local lights dispute between New Ross Harbour Commissioners and Waterford Harbour Commissioners can be dealt with to the satisfaction of both parties. I will again briefly outline the background to this dispute. Ships bound for New Ross Harbour must pass through the port of Waterford. At present these vessels are charged lights dues at the same rates as ships proceeding to Waterford. New Ross Harbour Commissioners claim the charges imposed are not related to the cost of providing the lights and are in their view excessive, making New Ross port uncompetitive. Waterford Harbour states, on the other hand, that the lights which New Ross bound ships avail of are sea lights and buoys and are consequently expensive to install and maintain.

[1798] Senators will recall that on Committee Stage I outlined details of efforts made to put an administrative arrangement in place to deal with this issue; those efforts were unsuccessful. I also advised Senators that I supported both the principle that the user or shipper pays for facilities provided and the New Ross view that charges of this nature should be fair and equitable and that there should be full transparency in relation to them.

The amendments now proposed provide that such charges shall be fair and equitable having regard to all the circumstances. They also provide that if the first mentioned harbour considers the charges so raised on ships proceeding to it are not fair and equitable, and in the absence of agreement on these matters with the company raising the charges, the matter shall if so required by either company be determined by an independent arbitrator nominated by the Minister. These amendments fully meet the demands of New Ross Harbour Commissioners and details of the proposed amendments were outlined to Waterford Harbour Commissioners who have raised no objections in the matter. I commend the amendments to the House.

Mr. Fitzgerald: On Committee Stage I tabled an amendment but I was slow to move it because I felt this argument was between New Ross and Waterford. I am glad to say there is now agreement on both sides. What will happen is that if New Ross is dissatisfied it can approach the Minister, who in turn will appoint an arbitrator. He will act as a judge and whatever he deems right will be paid.

Despite all the hassle and haggling of recent months, assuming New Ross and Waterford come to a prior agreement, for a certain charge over one year or a greater period, presumably this subsection will not come into play because there will be agreement. Will the Minister clarify that?

[1799] Mr. Neville: I too welcome the amendments. Having discussed the position with the New Ross commissioners I am aware of their concerns in this regard. It assists the matter in that the review group is looking into it also. The amendments also strengthen the Bill regardless of the difficulties between New Ross and Waterford. This general provision will apply to other ports which may in the future have differences, especially where ships travelling to a port must go through the jurisdiction of another port. To cite the example of Foynes and Limerick, if a difficulty on charges arises in future this provision can be used. I will be discussing hold ups through ports later as they do not relate to this amendment. It strengthens the Bill and caters for any difficulties that may arise in future between ports.

Mr. Dardis: As I said on Second Stage, this is a matter of some concern. The Minister made a reasonable effort to sort it out to everybody's satisfaction and is to be commended for this amendment. It is reasonable that people responsible for the installation and maintenance of lights should be able to levy charges. However, when there is a potential competitive element between the two, there is the potential for dissatisfaction on the part of one party.

The end of this amendment states that “either company may refer the matter” by way of an appeals system. Did the Minister at any stage consider intervening without reference to either company referring the matter? Obviously, the dissatisfied party will come to the Minister but I envisage circumstances in which it might be desirable for him to intervene at an early stage. I agree with Senator Neville. When a passage is shared, this does allow, not only in this circumstance but also in others where there might be potential for dispute, a procedure where that can be resolved.

Mr. Mooney: My question refers to “may refer”. In the event of a dispute, is it possible that the party in the [1800] ascendency — obviously there will always be an aggrieved party — could take a unilateral decision not to refer the matter and impose the charges anyway? Does the use of “may” rather than “shall” in this amendment allow it to do this?

Professor Lee: I had a similar question. The Minister handled this matter constructively and achieved a positive outcome that was difficult to envisage when all the representations were being made. Therefore, I have a lot of confidence in the Minister's judgment as to how the matter ought to be handled from now on.

Mr. Gilmore: I thank the Senators for their kind remarks. Senator Fitzgerald asked about the desirability of the ports concerned reaching agreement and I agree with him. The ports concerned should endeavour to reach agreement before triggering the arbitration process which, as provided for in the amendment, is intended as a fall back position if agreement is not reached. The two port companies should endeavour to reach agreement in the first instance.

Senator Dardis asked whether it is envisaged that the Minister would intervene. The whole thrust of this legislation is to take the Minister out of day to day matters in running the ports. There is a provision in the legislation where the Minister may make or issue policy guidelines. It is possible a Minister might decide to issue policy guidelines on charging but that would be of a general nature. It is not intended that the Minister would intervene or get involved in the detail of discussions between two ports. The onus would be on the ports to reach agreement and if they failed to do this, the Minister would then appoint an arbitrator to decide the matter.

Senator Mooney asked what would happen if either port decided to impose charges and did not want it referred to arbitration. The other port would, of course, be free to refer it to arbitration. The term “may refer” is governed by [1801] either company. It does not require the agreement of both companies. If one is dissatisfied, it may seek arbitration. That will obviously exercise its own discipline on both port companies.

Amendment agreed to.

Government amendment No. 4:

In page 16, between lines 26 and 27, to insert the following:

“(9) If the company established pursuant to section 7 in respect of the first-mentioned harbour in subsection (8) considers that the amount of any harbour charges referred to in the proviso to the said subsection that have been imposed is not, having regard to all the circumstances, fair and equitable, it may request the company which imposed the charges to cancel the imposition of the said charges and impose harbour charges of another amount or, as appropriate, re-imburse the payer of the said charges a portion of the said charges, and, if the said company fails or refuses to comply with such a request, either company may refer the matter to a person nominated by the Minister for his or her determination and the determination of that person in the matter shall be final.”

Amendment agreed to.

An Cathaoirleach: Amendment No. 11 is an alternative to amendment No. 5 and both may be discussed together.

Government amendment No. 5:

In page 21, between lines 34 and 35, to insert the following:

“(5) (a) Subject to paragraph (b), a harbour master may attend formal meetings of directors of the company by whom he or she is employed and may, if the directors, in their discretion, permit him or [1802] her to do so, take part in the deliberations by those directors of any matter arising at such a meeting.

(b) The directors of a company may, where they are of the opinion that the attendance by the harbour master at a particular meeting aforesaid or at a part of such a meeting would not be in the best interests of the proper and orderly conduct by them of business at that meeting or the administration of the company's affairs generally, require the harbour master not to exercise his or her right to attend that meeting or a specified part of that meeting and the harbour master shall comply with such a requirement.

(c) Nothing in this subsection shall be construed as conferring on a harbour master a right to cast a vote in respect of any matter arising at a meeting aforesaid.”

Mr. Gilmore: This amendment establishes clearly the principle that the harbour master has the general right to attend board meetings. In other words, the normal position will be that the harbour master may attend at his discretion. This, of course, will be solely in an observer and-or advisory capacity and he may participate in discussion at board meetings at the discretion of the board.

However, as I was at pains to point out on Committee Stage, there may be occasions where particularly sensitive issues may come up for discussion, such as for example, the assessment of the performance of senior staff, including the harbour master. In such circumstances, the board must, as an exception to the normal practice, have the right to discuss these matters in the absence of the harbour master. The amendment provides for this possibility in section 5 (b).

This amendment strikes a fair balance between the view that a harbour master shall have an unrestricted right to attend all board meetings and the contrary [1803] view that such attendance should, in all circumstances, be subject to the total discretion of the board.

I stress, however, that this qualification to the right of attendance would not allow a board to make a general decision to exclude the harbour master from all or particular parts of meetings, neither does it allow boards to generally prevent a harbour master from contributing to a discussion at a board meeting. I am satisfied this amendment will allow harbour masters to attend meetings and contribute to discussions while at the same time ensuring the board retains overall control of the conduct of its business.

Mr. Fitzgerald: I am grateful to the Minister for introducing this amendment. Like myself, Senator Neville also had talks with the harbour masters. They are a dedicated group of people. They not only run our ports and harbours during their normal working day, they are on call 24 hours a day, seven days a week and for that, we are deeply grateful.

I thank the Minister and his staff for giving us so much time and for bringing the matter to a successful conclusion. The harbour masters are satisfied with this amendment.

Mr. Dardis: I share Senator Fitzgerald's view. It would be ludicrous if the chief executive of any company could not attend board meetings. I am glad the Minister has taken that principle on board and that the harbour master can now attend. However, I am a little uncomfortable with section 5 (5) (b), which states: “The directors of a company may, where they are of the opinion that the attendance by the harbour master at a particular meeting aforesaid or at a part of such a meeting would not be in the best interests of the proper and orderly conduct by them of the business at that meeting...”. They may ask the harbour master not to exercise his right to attend. That gives a wide discretion to the board.

[1804] I fully understand this if matters such as the harbour master's competence is being discussed. In such cases, it would be appropriate that the person in question would be required to withdraw from the meeting. However, that gives wide discretion to allow the company to decide to exclude the harbour master on what might be spurious grounds and I am not altogether comfortable with that part of the amendment. I accept that being this specific is difficult to legislate for but I would not like it to be used as a device for exclusion and there is a possibility it could be used in that way.

Mr. Neville: I also welcome this amendment. I thank the Minister for listening to all sides of the House on Second and Committee Stages on this issue. Those of us who are on harbour boards, like Senator Fitzgerald and myself, are keenly aware of the need for this amendment and for the opportunity for harbour masters to be present at meetings. As I said on Committee Stage, 99.9 per cent of issues discussed at any harbour board meeting concern the harbour master.

Having looked at it in detail and having discussed it, I do not share Senator Dardis's worries. If it was used as a device it could be challenged in court because it would very soon be seen to be going against the spirit of this section of the Bill, which is that the harbour master should attend practically all meetings except where there are issues which are sensitive to his own position or person. Those are the only ones that he would be excluded from.

I welcome the Bill. I have discussed it with the harbour masters who convey their thanks to the Minister of State, Deputy Gilmore, and to the Minister, Deputy Barrett, for listening to them and seeing to it that an acceptable amendment was inserted.

Mr. Quinn: I also welcome this amendment which I look at from the point of view of good business practice. It seems to me very good business practice that the harbour master should not [1805] have the right to attend but normal business practice will be, as Senator Dardis said, that the harbour master will attend on every occasion. I was impressed by the fact that the harbour masters are pleased with this and, as far as I can understand, they were not seeking the right to attend. The harbour masters were certainly anxious to be able to attend but not as a statutory right. It is good business practice. Like Senator Neville, I do not have the concern that Senator Dardis has, although I can understand why he expressed it. It does seem a rather cumbersome term to use. The Minister has listened to the concerns and has found a suitable way round them which is worthy of support.

Ms Kelly: Is there an onus on directors to take the harbours masters' views into consideration when they are making their deliberations?

Professor Lee: I also welcome the Bill. If the harbour masters are happy with it then I have no problem. I have a slight quibble, however, although it is purely a semantic point. Given the general desire to have access to the harbour masters' advice and opinions, the phraseology “if the directors, in their discretion, permit him or her to do so” seems slightly grudging. To some extent it seems to go against the grain. Likewise, Senator Quinn referred to the phraseology in subsection (b), but I am happy with the substance so I will not linger unduly over that.

Mr. R. Kiely: I would also like to support the amendment. It is only fair that the harbour masters' views should be known at meetings. There is a clause in it whereby the directors can request the harbour master to leave if they think it is desirable. I welcome the amendment.

Mr. Gilmore: I thank Members for their generous remarks in relation to this amendment. I will start with Senator Lee's point. What we are doing here is slightly unusual in that we are making provision for an officer of the [1806] harbour company to attend meetings of that company and to be enabled to participate in the business of the company. As you will appreciate, the rules governing the participation of members of the harbour board — the actual directors — in harbour meetings are set down elsewhere. We have to write rules which provide for harbour masters to attend but do not confer on them rights over and above those of full directors of the board.

I appreciate what Senators have said. The language used is phrased in a negative way but it is not intended to be in any way grudging or unnecessarily restrictive. It is intended to ensure the board retains control of its business while at the same time harbour masters can participate.

To clear up a point raised by Senator Kelly, the board of a company will, of course, have to take account of advice given by a harbour master whether at a board meeting or not. There are a lot of provisions in this legislation which confer very important powers on the harbour master. There are several sections of this Bill where the harbour master may act without reference to the board under specific powers given to him or her. There are also provisions which require the board to take account of safety and navigational issues and environmental concerns which are matters under the harbour master's control. They will have to be taken account of.

The harbour master is not actually the chief executive of the harbour company. There is a separate chief executive. Subsection (b) is not designed to exclude. It states, “The directors of a company may, where they are of the opinion that the attendance by the harbour master at a particular meeting aforesaid or at a part of such a meeting...”. In other words, that exclusion relates solely to particular meetings or parts of meetings. It would not be open to a board to decide that they could exclude the harbour master from all the meetings from June to December or whenever. It relates only to particular meetings and obviously there would have to be good [1807] reason. I gave examples such as the fact that the harbour master's pay or performance might be up for discussion. The question of safety in the harbour, which might require a second opinion, might also be up for discussion. There are a number of circumstances of that type and it is not possible to anticipate all of them in the legislation. It is to provide for exceptional situations that the provision is included. It is not intended, nor can it be used, as a means of generally excluding harbour masters from meetings.

Amendment agreed to.

Government amendment No. 6:

In page 27, line 43, after “examination”, to insert “; such an examination and a report shall be completed by the said person within the period of 6 months from the date of his or her appointment”.

Mr. Gilmore: Senators will recall that on Committee Stage I indicated I was happy to accept Senator Fitzgerald's suggestion that there should be a time limit for the carrying out of performance audits. I sought time to reflect on whether it should be three months or longer. The amendment now provides that the performance audits shall be completed within a period of six months from the date of the appointment of the suitably qualified person to perform the audit. It is only reasonable that a period of six months should be allowed for performance audits at the bigger ports such as Cork and Dublin. I commend the amendment to the House.

Professor Lee: I meant to raise this observation at an earlier stage. Performance audits have become very fashionable and who can be against them in principle? However, I wonder how this will operate in practice. I agree with the time limit and have no problem with that.

[1808] If one is going to get a suitably qualified person to carry out a performance audit it has to be somebody who has a comparative perspective on the performance of ports so that they can have some criteria by which to assess efficiency and cost effectiveness. There cannot be some theoretical principle by which one could determine the efficiency and cost effectiveness of an individual port independently of circumstances elsewhere. Is it appropriate to ask if the Minister has a concept in mind of how this is intended to operate or if it is just in there as an enabling clause at this stage?

Mr. Gilmore: This is the first occasion that we have provided in legislation for performance audits. We have also included a new provision in relation to the reportage of these companies through a confidential report from the chairperson of a company to the Minister. It will be an additional annual report to the normal one. This Bill is providing two new measures — performance audits and the chairperson's report — for these semi-State companies which have not existed in previous legislation.

I take the point Senator Lee made that obviously the performance audit will need to relate to some criteria or targets established for the companies. There is provision in the Bill — I believe it is in section 44, but I could be wrong — that targets and standards for each of the ports may be set by the Minister. It will be against those targets that the performance audit would be evaluated.

Amendment agreed to.

Debate adjourned.