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 Header Item Business of Dáil (Continued)
 Header Item Commission of Investigation (Irish Bank Resolution Corporation) Bill 2016: Order for Second Stage
 Header Item Commission of Investigation (Irish Bank Resolution Corporation) Bill 2016: Second Stage

Friday, 8 July 2016

Dáil Éireann Debate
Vol. 917 No. 2

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An Ceann Comhairle: Information on Seán Ó Fearghaíl Zoom on Seán Ó Fearghaíl Before we proceed to the legislation, we have had a pretty unprecedented event this morning given the failure to present a quorum at the appropriate time. Some Members need to be aware of the responsibilities they have to be here in the Chamber when legislation is to be debated. I would say to those who look for more time to discuss legislation to be conscious of the fact that when the time is provided there is a responsibility on those people to be present, but there is a particular responsibility on those who have the formal responsibility of ensuring attendance that they see that attendance actually happens.

We will proceed to the Commission of Investigation (Irish Bank Resolution Corporation) Bill 2016. I call the Minister of State, Deputy Stanton.

Commission of Investigation (Irish Bank Resolution Corporation) Bill 2016: Order for Second Stage

   Bill entitled an Act to make additional provision in relation to the commission of investigation established by the Commission of Investigation (Irish Bank Resolution Corporation) Order 2015 (S.I. No. 253 of 2015); for that purpose to amend the Commissions of Investigation Act 2004 and the Irish Bank Resolution Corporation Act 2013; and to provide for matters connected therewith.

Minister of State at the Department of Justice and Equality (Deputy David Stanton): Information on David Stanton Zoom on David Stanton I move: "That Second Stage be taken now."

  Question put and agreed to.

Commission of Investigation (Irish Bank Resolution Corporation) Bill 2016: Second Stage

Minister of State at the Department of Justice and Equality (Deputy David Stanton): Information on David Stanton Zoom on David Stanton I move: "That the Bill be now read a Second Time."

As the Members of the House are aware, this Bill is being brought forward today to give additional powers to the Commission of Investigation into the Irish Bank Resolution Corporation, IBRC. These provisions are necessary, given the nature of the investigation involved, to ensure that the commission can effectively perform its functions. I am presenting this Bill today on behalf of the Tánaiste and Minister for Justice and Equality who has responsibility for the Commissions of Investigation Act 2004 under which the IBRC commission of investigation was established.

At the outset, I want to reiterate that the Government shares with the rest of this House a desire to ensure that there is an effective, efficient and timely investigation into the issues of significant public concern which have been raised in respect of IBRC. This shared determination across the Oireachtas has underpinned the extensive consultation at all stages with the Opposition initially by the Minister for Finance, and subsequently with the Taoiseach.

Before I outline the provisions of the Bill, I will set out the background to this particular commission of investigation and also mention some of the issues raised in the determinations and interim reports of that commission which have given rise to this Bill. The Commission of Investigation into the Irish Bank Resolution Corporation was established in June 2015 following the approval of a draft order by both Houses of the Oireachtas. The commission is charged with investigating matters which are considered by the Government, and affirmed by the Houses, to be of significant public concern in respect of IBRC and to make any reports required under the Commissions of Investigation Act 2004 in regard to its investigation.

In accordance with its terms of reference, the commission is required to investigate certain transactions, activities and management decisions which occurred at the IBRC between 21 January 2009, being the date of the nationalisation of IBRC, and 7 February 2013, being the date of the appointment of the special liquidators to IBRC and which either resulted in a capital loss to IBRC of at least €10 million during that period, whether by consequence of a single transaction or of a series of transactions relating to the same borrower or entities controlled by the same borrower, or are specifically identified by the commission as giving rise or likely to give rise to potential public concern in respect of the ultimate returns to the taxpayer.

In November 2015, the sole member of the commission submitted an interim report. That report sets out in detail the substantial work undertaken by the commission up to that point and the outcome of the interaction between the commission and the special liquidators, the Department of Finance, the directors of IBRC, the Central Bank of Ireland and the Irish Stock Exchange. It is evident from those interactions, as detailed in the report, that a number of significant issues arose in the course of the commission’s work, in particular issues regarding the ability of the commission to obtain and admit certain information and documents into evidence.

In light of those concerns, the Taoiseach engaged with the leaders and representatives of the Opposition and, on behalf of the Taoiseach and the Tánaiste, I would like to thank those Members for their observations and contributions during that consultation. On foot of those consultations, a legislative solution was proposed and it was agreed, again with Members from the Opposition, to further consult with the sole member of the commission on the proposed legislative response. Following those consultations, the Taoiseach and the Opposition agreed on 2 June to proceed with the drafting of urgent legislation to address the matters raised by the commission. This is the Bill before the House today.

As I have said, the first interim report of the commission from November 2015 outlined a number of significant issues which had arisen in the course of the commission’s work including the commission’s view that the issue of confidentiality precluded it from admitting certain documents into evidence; the commission’s view that the issue of legal professional privilege precluded it from admitting certain documents into evidence; the commission’s view that the duty of professional secrecy under section 118 of the Companies Act 1990 precluded it from receiving certain documents held by the Irish Stock Exchange; and the need to address matters relating to potential conflicts of interest and the management of the workload of the commission. These are all issues which are now being addressed, to the greatest extent possible, in the Bill before the House today. As I have said, there has been close consultation with the commission in the development of these provisions.

The approach adopted in this Bill is to introduce a bespoke piece of legislation which effectively applies the Commissions of Investigation Act 2004 with specific provisions relating to the IBRC Commission. The Bill contains nine sections. Of these, sections 2, 3, 4, 6 and 7 provide for additional powers to be assigned to the IBRC commission of investigation which were identified as lacking under the Commissions of Investigation Act 2004 and which consequently impeded the commission in performing its functions under that Act. The investigation into the transactions and other acts undertaken by the IBRC during the specified period is of a nature which warrants these additional powers being given to the commission. All of the provisions in this Bill, therefore, provide for the IBRC commission of investigation solely and do not extend or in any way alter the application of the 2004 Act to other commissions of investigation, ongoing or otherwise. Sections 5 and 8 of the Bill make provision to assist the management of the workload of the commission and to ensure any potential conflicts of interest are avoided.

Turning to the individual sections, section 2 addresses certain powers of the commission. Subsection (1) confirms that the commission may make such orders and determinations, and give such directions, as is necessary for the performance of its functions and for that purpose the commission shall have all such powers, rights and privileges as are vested in the High Court or a judge of that court. The need for such an amendment is set out in the determinations published by the commission, for instance, sections 7.90 to 7.94 of determination one. Similar provision is also available to tribunals of inquiry under the Tribunals of Inquiry (Evidence) Act 1921, as amended. One issue which arose during consultations and the drafting of the Bill is the extent to which this would draw this commission closer to the tribunals of inquiry model. However, the commission format remains distinct in terms of regular review and report back to Government.

Subsection (2) addresses the finding of the commission of investigation set out in its determinations and in chapter 6 of the first interim report to the effect that the commission lacked the necessary statutory powers under the Commissions of Investigation Act 2004 to engage in a balancing of interests which may trigger the public interest exception to what is otherwise a duty of confidentiality. This arose as the relevant section of the 2004 Act, section 21, expressly states that nothing in that Act shall compel any person to disclose information or documents over which a duty of confidentiality is asserted and found by the commission to apply. Section 2(2) of this Bill, therefore, confirms that the commission may admit documents in regard to which a duty of confidentiality is claimed.

Paragraph (b) of subsection (2) refers to Article 27 of the EU market abuse regulation. Article 27 provides for the non-disclosure, on grounds of professional secrecy, of information received pursuant to that regulation. This would apply to information received by the Irish Stock Exchange and is similar to the obligation of professional secrecy under section 118 of the Companies Act 1990 and which is to be disapplied in respect of the disclosure of information by the Stock Exchange under section 7 of the Bill. The sole member of the commission has confirmed that there may be circumstances where he may request information which may fall under the provisions of the EU regulation. Again, I would like to reiterate that these provisions are introduced solely for the purpose of this investigation and the particular circumstances which have been identified by the commission. Without the introduction of these provisions, the commission is clear that its ability to carry out its work would be severely limited. A definition of "document" is introduced in section 2(3) so as to include tapes, discs and sound recordings as well as written material. Again, this is to ensure that the commission has access to all information needed to effectively conduct the investigation.

Sections 3 and 4 of the Bill are introduced to ensure that the commission may seek the directions of the High Court or refer any question of law to that court regarding the performance of its functions. It is clear from the determinations published by the commission that the commission had considered seeking the directions of the courts in respect of certain matters but that the 2004 Act does not provide any mechanism for a commission to seek such directions. Sections 3 and 4 make the necessary provisions.

Section 5 is an important section and will address two concerns identified by the commission. The first relates to the efficient management of the workload of the commission. As the House is aware, one aspect of the terms of reference for this commission is the investigation of transactions during the relevant period which involved capital losses to IBRC of more than €10 million. As noted in the interim report, 38 such transactions have been identified by the special liquidators to IBRC. Effectively, this would involve up to 38 investigations. I understand that it has been agreed, in consultation with the Opposition, that the terms of reference for the commission will be amended so as to adopt a modular approach to these investigations.

However, in light of the potential for a large number of investigations, the commission has recommended, and it would certainly appear prudent, the appointment of additional members to the commission. While the appointment of more than one member to the commission is possible under the 2004 Act, that Act does not permit those members to operate in divisions or panels, rather the members operate together as a single commission. This section of the Bill proposes, therefore, that where an additional member or members are appointed to the commission, they can operate in divisions and, importantly, the report and findings of any single division will be a report and finding of the commission as a whole. While it is not intended to appoint an additional member at this stage, this recognises and responds to the range of transactions potentially to be investigated by this commission.


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