Committee Reports > List of Committees > Joint > 1980 > Committee on Commercial State-Sponsored Bodies > Report No. 08 - Bord na Móna

APPENDIX 3

MEMORANDUM FROM THE FEDERATED WORKERS’ UNION OF IRELAND-RURAL WORKERS GROUP

Introduction:

1. The Federated Workers’ Union of Ireland (formerly the Federation of Rural Workers and the Workers’ Union of Ireland) represents the vast majority of the general operative grades (non-craftsmen) in Bord na Móna. This Union is a member of the Bord na Móna Group of Unions, I.C.T.U.

2. The Union has represented manual workers in Bord na Móna since Bord na Móna was established under the Turf Development Act, 1946. The Union has also represented workers employed by the former Turf Development Board. Members of the Union are engaged in a variety of activities in the drainage, development and exploitation of peat resources together with the processing and transportation of peat products including sod peat, milled peat, peat moss, peat briquettes, the manufacture of drainage pipes and the construction and maintenance of railways. Members of the Union also assist in the maintenance of machinery and equipment in the Workshops.

3. Our members are affected by legislation enacted by the Oireachtas as follows:

Turf Development Act, 1946, as amended.

Turf Development Act, 1953, as amended.

Superannuation Scheme, 1963, (S.I. 10/1963), as amended.

Worker Participation Act, 1977.

4. The Board of Directors of Bord na Móna includes three members of the Union viz., the General Secretary, Mr. Paddy Cardiff, who is an appointed member, and Messrs. Thomas Browne and John Molloy, elected members. The Union is also represented on the Superannuation Committee.

General Objectives:

5. As well as promoting the interests of the membership in Bord na Móna the Union has also endeavoured, with considerable success, to promote industrial peace in the industry. The indications are, however, that the interference of Government Departments in the field of industrial relations is making it very difficult for the union to pursue its objectives in an atmosphere of industrial peace.

6.1 The Union is aware that Bord na Móna, a commercial industry, which is not grant aided, has been floated on a hidden and very real levy on wages. This payroll tax has enabled Bord na Móna to finance the purchase of the boglands, repay loans advanced by the Exchequer or Finance Houses for the purpose of draining and developing bogs, the provision of factories, workshops, railways, locomotives, machinery and bridges not to mention the provision of a substantial subsidy to the E.S.B. and other users of peat products. Unlike private industry or agriculture, Bord na Móna is not supported by Government grants or grants from the Industrial Development Authority for development, factory construction or the provision or renewal of machinery. In simple terms this means that the development programme in Bord na Móna, including the 3rd Development Programme, now in progress, is domestically financed. Essentially the Board’s activities are financed by means of a payroll tax which is depressing wage levels below the average for semi-State industry in general and the energy industries in particular. Productivity in Bord na Móna, which has been in orbit for many years, is the source of internal investment.

6.2 The Board’s accounts for 1977/78 reveal that the annual loan charges are being continued after loans have been repaid or assets fully written off. In contrast with private industry, which cannot be developed or survive without industrial grants, Bord na Móna forges ahead without grants and appears to be in a position to carry the burden of double loan charges.

7.1 It is difficult to believe that the Board of a commercial enterprise would voluntarily manage its business with the object of surviving as an industrial pauper. We do not believe that the Management of Bord na Móna are free agents in the formation and development of what appears to be a policy of industrial prodigality through the disposal of energy to the E.S.B. and to other consumers below market value.

7.2 Indeed, the Board of Directors have invited attention to the fact that they are conscious that “competitive market forces are not being allowed to operate in the energy field”—Page 6 of the 1977/78 Report. It would appear that in the sensitive field of energy Bord na Móna is expected to operate as an industrial pauper in perpetuity.

7.3 The average fuel cost per unit of electricity generated by the E.S.B. before transmission on the Grid is as follows:

8. In our opinion Bord na Móna and such other authorities as are involved in the direction of the Board’s industrial policy, are behaving in an imprudent manner if it is believed that the workforce will continue to carry the burden of financing an industry while their pay and conditions of employment, and pensions, do not compare favourably with other industries. There is no Widows’ Pension Scheme in Bord na Móna.

9.1 The activities of Bord na Móna are summarised in the Report for 1976/77, as follows:

“Bord na Móna was established in 1946 by an Act of the Oireachtas to develop the country’s peat resources. It produces peat fuel for use in the Electricity Supply Board’s peat-burning power stations, and machine turf and briquettes for general industrial and domestic use. It also produces horticultural moss peat for a world-wide market.

The planned investment in the Board’s present development programmes is £60 million. Most of the capital to date has been provided by the State by way of fully repayable advances. £35¼ million has already been advanced of which over £11 million has been repaid.

Bord na Móna operates on a commercial basis and receives no subsidy or tariff protection. The Board has established 22 production centres covering 130,000 acres of bog. The total number of employees at present is over 4,300 rising at the peak of the harvesting season to 5,400. The present Development Programme will cover an additional 47,000 acres of bog and have an employment content of 1,500 rising to about 1,800 at peak. Somewhat more than 67% of the acreage involved in this programme has been acquired and survey and development planning of the areas acquired during 1976-77 are on schedule.”

9.2 Other activities include experiments in the development of bog lands for agriculture, forestry and in the cultivation of bush wood now known as bio-mass.

10.1 It appears from the Report and Accounts of Bord na Móna and the Electricity Supply Board and the Industrial Development Authority that, not only is Bord na Móna producing energy and developing primary sources of energy at no cost to the Exchequer, it is subsidising the production of electricity and is also subsidising the energy needs of industry and consumers generally.

10.2 Taken together the Accounts of Bord na Móna and the E.S.B. reveal that the assets of Bord na Móna are being transferred to the E.S.B. in cut price fuel supplied for the generation of electricity. (See Paragraph 7.3)

11.1 When the Accounts of Bord na Móna and the Reports of the Industrial Development Authority are taken together, it appears that grants are not given by the I.D.A. towards the massive development in Bord na Móna including the 3rd Development Programme. And grants are not paid either in aid of the replacement of machinery and equipment although the wear and tear on engines and machinery engaged in peat production and processing is significantly greater than that associated with stationary plant on the factory floor or on firm ground. Equipment in Bord na Móna includes railways, bridges (including high level bridges, which span the Shannon at a level which does not impede navigation), factory machinery, and machinery for drainage, development, harvesting and transport, the development of cut-a-way bogs and structures required for agricultural experiments. Most of the machinery has had to be developed by Bord na Móna and this adds to the cost of providing equipment which has no general commercial use.

11.2 The provision of machinery and equipment for the activities of Bord na Móna is more costly than that to manufacturing industry mainly because the Board has to carry almost the entire cost of experiments and development.

12.1 It appears that not only are boglands purchased, drained and developed and that factories, machinery, railways, locomotives, rolling stock, bridges and equipment are provided and renewed by the industry, but, in addition, energy resources and profits are transferred to the E.S.B. and other consumers of energy. This is the achievement of the supermen of public enterprise and the measure of productivity and effort of the men who work, day and night, in inclement weather on the bogs and under the pressures of production in the factories.

12.2 It is indefensible that the surplus revenue of Bord na Móna should be distributed in aid of other industries while wages, conditions of employment and superannuation in Bord na Móna are substantially worse than the conditions in the industries which are being subsidised by the workforce in the peat industry.

13.1 What are the reasons for the sustained success of the self-supporting non-grant aided public enterprise which has subsidised public and private enterprise industries and services and consumers of energy generally for many years? And what policies and measures are needed in an energy conscious age to promote and sustain the exploitation of the peat resources and the potential of the industry without exploiting a co-operative workforce (or the widows of the industry) or imposing improper pressures on industrial relations? These are serious and fundamental questions of primary importance to those employed and desiring to be employed in the industry as well as to consumers of electricity and other consumers of peat products generally.

13.2 The formula for continued success of Bord na Móna is to be found in equal pay, reward for productivity and industrial peace, which would guarantee production for the industry and no loss in wages or markets due to industrial strife.

14.1 Apart from financing the Development Programmes in the normal way through loan charges on loans and advances, new accounting policies have been introduced and internal development levies have been charged to revenues or deducted from the trading surplus, including—

(a) the total cost of new machinery and equipment for established bogs,

(b) development expenditure on agriculture,

(c) the development of new bog areas (£705,000 in 1978 alone),

(d) double or inflated depreciation (including loan charges on fully repaid loans).

14.2 The so-called net trading surplus of £531,000 in the 1978 Accounts is little short of fiction. However, the financing of new bog development (£705,000) from revenue in 1978 is an investment in the industry—unlike the disposal of peat to the E.S.B. below market price of fuel.

14.3 The inability of the E.S.B.’s power stations to take delivery of turf in 1972/3 in accordance with the Joint Programme of the two bodies which had an adverse effect on the finances of Bord na Móna, was a cause of growing concern, according to the Board’s Report (March, 1973). In that year the E.S.B. did not want peat. Last year Bord na Móna delivered 3,347,000 tonnes of peat to the E.S.B. below the market price. Either way the finances of Bord na Móna have been adversely affected by institutional measures.

Accounting Policies:

15.1 The Accounting Policy of 1976 is not appropriate in an industry where members of the Board of Directors are elected by the workforce every three years. These Accounting Policies, if not modified immediately, would quickly undermine the confidence of the industrial electorate in their elected representatives. The elected members of the Board are, in practice, obliged to give the industrial electorate in over 20 centres of activity opportunities for consultation. The elected members of the Board may be questioned in relation to the Board’s System of Accounts and on the industrial policy—not to mention the future use of cut-a-way bogs. And the elected members may be asked to explain the incomprehensible figures in the published Report and Accounts—should the 1979 Accounts be presented in the form of the Accounts published since 1976.

15.2 The Accounting System in Bord na Móna should be modified, inter alia, in order to show—

(a) the loan charges on loans or advances which have not been repaid in full,

(b) the loan charges on loans or advances which have been continued although the loans have been fully repaid,

(c) the cost of new machinery, equipment, or buildings (and location) charged (i) to capital and (ii) to revenue,

(d) the expenditure on Research from (i) capital and (ii) revenue,

(e) the expenditure on new bog or factory development from (i) capital, (ii) revenue,

(f) the grants received from the Industrial Development Authority, the European Social Fund, or the Regional Fund, etc.,

(g) the interest on loans received from the European Investment Bank,

(h) a description of the projects for which application for grants were made to the Industrial Development Authority, the European Social Fund and the Regional Fund,

(i) the estimated loss in revenue arising from the delivery of peat to the E.S.B. below the competitive market price for fuel (by reference to the E.S.B. Accounts),

(j) the estimated loss in revenue arising from the disposal of peat fuel to public institutions and other consumers below the competitive market price of energy,

(k) the estimated “charge” on revenue attributable to the absence of Development Grants from the Industrial Development Authority, by reference to the criteria applicable to Grant Aided Industry,

(l) the estimated “charge” on revenue attributable to the absence of grants from the European Social Funds, etc., by reference to the grants approved and paid to other public authorities and industries.

The 3rd Development Programme:

16.1 This programme, in common with the first and second programmes, is being financed internally by the industry without grants. Any employment generated by this programme is also being financed by the industry and in particular by the workforce in the industry, arising from the sustained yield of what is known as “creeping” productivity.

16.2 It would be a mistake to believe that the “new” jobs in the bog development areas (other than the proposed jobs in the new factories) are additional jobs. Employment levels have been declining and the production seasons have been compressed significantly. So far job creation in the development areas is by no means sufficient to off-set productivity and shorter production seasons in man hours.

16.3 The indications are that the established centres of production are carrying the cost of the nearby new development or a significant part of it.

Future Developments:

17.1 The Union is by no means satisfied with development objectives which are limited in scope and which do not match the needs of the community in relation to energy, or the continuity of supply of agricultural or horticultural produce, especially where energy is wasted and not harnessed for space heating whether for domestic or commercial purposes. The rural peat fired power stations appear to be capable of facilitating vast horticultural activities. Energy should not be wasted when it could be harnessed for greenhouses. This would involve the planned maintenance of the power stations in mid-Summer. In addition to the provision of new briquette factories, the principal objectives of Bord na Móna should continue to be in the field of energy; the exploitation of the peat areas and the eventual development of cut-a-way bogs and blanket bog areas for fuel production whether for bio-mass or forestry.

17.2 Some of the cut-a-way bogs will undoubtedly be found suitable for intensive agricultural development, with or without expenditure on micro-climatology. Planned production of agricultural and horticultural produce appears to be a necessity for consumer protection and also to maintain supplies to the food processing factories. Shortages of produce occur from time to time due to weather or market conditions. These could be minimised by planned production in association with the food processing industries.

17.3 It must not be overlooked that cut-a-way bogs generally would not be suitable for individual agricultural activities—if only because of the necessity for pumped drainage in some areas.

17.4 Moreover, the bog areas have been purchased and developed from the internal resources of Bord na Móna. The workforce who have not had the financial advantages of parity in pay with the energy industries and other industries which they have subsidised, could reasonably claim that the purchase and development of the boglands was financed by means of a levy on pay and that the workers in Bord na Móna and not the State have invested heavily in the industry. On the other hand the State has subsidised the purchase of agricultural land under the Land Acts and has given enormous grants for land drainage and land improvement generally while no grants or subsidies were given to Bord na Móna.

The Superannuation Scheme, 1963:

18.1 The Superannuation Scheme in Bord na Móna is governed by the Act of 1953 which provides for a 50-50 employer/employee contribution to a Superannuation Fund. The 50-50 employer/employee contribution together with the subsequent 10 year delay in the commencement of the Scheme for the manual employeees and the restricted scope of the initial Scheme seriously retarded the provision of superannuation benefits and deprived the Fund of contribution income. Apart from service in the former Turf Development Board, Bord na Móna was operating for 17 years before manual workers were permitted to enter a Superannuation Scheme and contributors were obliged to pay for prior non-contributory service or accept half-service under the 50-50 contribution rule.

18.2 There is no objection in principle to a 50-50 contribution for beneficial service following the commencement of the 1963 Scheme, as amended, but the view is strongly held that Bord na Móna should carry the full cost of pre-Scheme service. There was no justification for delaying the 1963 Scheme for 10 years and regular (non-permanent) employees should have been admitted to the initial Scheme.

18.3 At present the Bord na Móna Superannuation Scheme for manual workers is substantially out of line with the benefits generally applicable to Industrial Civil Servants and Servants of Local Authorities, viz.,

(a) the maximum retiring gratuity has not been increased from a year’s pay (to 1½ years’ pay),

(b) the pension benefit period has not been reduced from 10 years (to 5 years),

(c) there is no provision for “added service” where ill health causes premature retirement,

(d) there is no provision for appeals to an independent body—as in other schemes.

Worker Participation Act, 1977:

19. In view of the contribution which the work force has made towards the development of the industry in productivity, and in industrial peace, at least half of the Directors should be elected by the labour force. The present and recent policies of the management of Bord na Móna (which appears to be influenced by other authorities) are detrimental to the financial stability of the industry. These policies have put jobs at risk and are likely to provoke industrial unrest where industrial peace should be a major objective in the industry.

Industrial Relations:

20.1 The members of the Federated Workers’ Union of Ireland (in harmony with Union policy objectives) have contributed in large measure, in effort, productivity and industrial peace, towards the success of the enterprise. This Union earned the right to have a say in the formation of industrial policy in Bord na Móna. Our members’ jobs are, at times, at stake and their jobs and their standards of living are at risk, when the management of Bord na Móna seeks to impose unacceptable policies in relation to promotion or conditions of employment by means of planned suspensions, secondary suspensions and lay-offs.

20.2 Stoppages of work have been provoked by suspensions without pay as an instrument of managerial policy, with utter disregard for an export industry, or the customers or the workforce. Over 100 production workers (including drivers) were suspended or laid-off at Kilberry Peat Moss Factory and the Kilberry bogs between 5th March and 5th April, 1979. Local objections to a managerial decision which limited promotional opportunities were disregarded. According to the Department of Social Welfare, Bord na Móna decided to suspend key workers in order “to bring a dispute to a head”. The workers on lay-off were refused Unemployment Benefit. Jobs at the Peat Moss Factory were put in peril because of a managerial decision which is now in limbo.

20.3 The last major dispute in Bord na Móna commenced (unofficially) on 16th November, 1967 as a protest against the Board’s policy on Saturday work. The underlying cause of the strike was dissatisfaction with pay levels at a time when publicity was given to profits in the industry. This was followed by an official strike for six weeks from 8th February, 1968. The last offer made by Bord na Móna before the strike started was approximately 33 shillings per week. The Union advised that the dispute could be settled for about five shillings more and it was eventually settled for four shillings—a total increase of 37 shillings a week.

20.4 The production workers in Bord na Móna have not promoted any significant or prolonged stoppage of work during the past 10 years. Drivers and other production workers were laid-off (on two days’ notice) for about four weeks at the end of June, 1976 due to a strike of craftsmen. The Board refused to pay any compensation or retention allowance to the production workers.

21.1 The Union wishes to pursue its policy and objectives in an atmosphere of industrial peace and in conditions in which the workforce would have reasonable confidence that Union policy would ensure that pay, conditions of employment and retiring benefits would not fall behind the standards in the commercial or industrial Public Service, so that the ability of the industry to pay the going rates of pay would not be inhibited by a loss of production and that the workforce would not be at a loss in wages due to industrial conflict.

21.2 The industry can afford to pay the going rates of pay and there should be no logical reason for industrial unrest in Bord na Móna.

21.3 Unfortunately, the interference of Government Departments in labour relations and as “Liquidators” of the assets of the enterprise is paving a road to unrest in an industry which provides up to 25% of the electrical energy of the country.

21.4 There are more than straws in the wind to indicate that “Overlords” or “Official Liquidators” have been distributing the fruits of productivity in Bord na Móna in the hope that parity pay claims may be discouraged through Balance Sheet poverty.

21.5 Although Bord na Móna is not in receipt of a grant or subvention from the Exchequer, nevertheless, the Department of the Public Service exercises the same control over industrial relations as applies in the Civil Service or in the service occupations in local authorities. This control was notified to the unions by the management of Bord na Móna.

22.1 The trade unions in Bord na Móna and the workforce have contributed substantially to the success of the development programme. For many years Bord na Móna has had the benefit of reasonably good labour relations, and the co-operation of the production workers. Indeed, labour relations have been much better than what is normally to be expected in an energy industry in an energy conscious age.

22.2 It is clearly in the interest of the community and the industry that Bord na Móna should not ignore or disregard clear signs of discontent which invariably occur when the labour force believes that it is being exploited and that the reward for co-operation and productivity is exploitation. It should be understood that Bord na Móna is taking an imprudent risk in relation to the supply of energy by expecting those who produce energy to accept pay levels which are significantly lower than the prevailing rates in other energy industries and in the Public Service industries. Work on development production, harvesting and transportation has to be carried on in all conditions of weather. The work is heavy and unpleasant in Winter, especially at night. Harvesting in Summer frequently occurs in storms of dust, service railways have to be laid in very bad weather conditions, night and day, in order to maintain supplies to power stations. Many of the Board’s employees travel up to 30 to 40 to 50 miles to work.

1 November 1979