Committee Reports > List of Committees > Joint > 1990 > Committee on Commercial State-Sponsored Bodies (6th Committee) > Report No. 02 - Irish National Petroleum Corporation Limited

REPORT

Operations of INPC

1.The Irish National Petroleum Corporation Limited (INPC) was established as a private company on 2 July, 1979 by the then Minister for Industry, Commerce and Energy. It acquires crude oil, refines it through its subsidiary, Irish Refining plc, and supplies petroleum products to the Irish market. The company’s other subsidiary, Bantry Terminals Limited, is involved in the care and maintenance of the Whiddy oil terminal.

2.The main rationale for the company’s activities is strategic. The security role includes the responsibility on behalf of Government for a proportion of Ireland’s oil supply and stocks. The security objective is to maintain operational capability and mechanisms for buying, shipping, processing and storing oils and in any crisis to ensure that oil supplies to the country are maximised.

Background

3.The present Joint Committee’s penultimate predecessor decided in October, 1983 to include the examination of the INPC in its programme of work but, arising out of the then High Court action brought by the Irish Independent Petroleum Association (IIPA) against the then Minister for Industry and Energy, the Attorney General and the INPC, decided to defer the examination as it did not wish gratuitously to prejudice the proceedings. The IIPA had claimed that the mandatory distribution system which had been implemented by the INPC under the Fuels (Control of Supplies) Order, 1982 was contrary to Clauses 30 and 31 of the Treaty of Rome and constituted, inter alia, a restraint on trade. At that time, the High Court sought the judgment of the European Court on certain issues relating to the proceedings.

4.In July, 1987 the subsequent Joint Committee decided to examine the INPC and, following correspondence with the then Minister for Energy and Communications and the Chairman, INPC, the Minister declined in February, 1989 to allow representatives of INPC to appear before the Joint Committee. The basis for the Minister’s decision was that a High Court case stood adjourned in which the legality of the mandatory oil uptake system relating to the Whitegate refinery was being questioned. The Joint Committee was informed that when the case had been determined there should be no problem in the Company appearing before the Joint Committee.

5.The previous Joint Committee went out of existence on the dissolution of the Dail on 25 May, 1989.

Present examination

6.The sequence of events since the present Joint Committee commenced its examination is set out in the substantive correspondence between the Joint Committee and the Minister for Energy (See Appendix).

7.The facts of the legal challenge to the mandatory regime are set out by the Minister for Energy in his letter of 25 May, 1990 and are repeated hereunder for convenience:

“The legality of the mandatory offtake regime was challenged by six minor independent companies in 1983. The companies sought an injunction to restrain the Minister for Energy from implementing the mandatory regime. The High Court refused an injunction but the companies then instituted proceedings in the High Court seeking a declaration that the Fuels Order was contrary to certain provisions of the Treaty of Rome. The High Court referred points of interpretation to the European Court.

On 10 July, 1984 the European Court gave its ruling on the questions referred to it by the High Court.

In effect, the ruling stated that while the mandatory regime amounted to a quantitive restriction on imports, an exemption from the prohibition was justifiable under Article 36 of the Treaty on grounds of public policy and public security, if certain conditions were fulfilled. Decision on the latter is a matter for the Irish High Court. Since that ruling no further action has been taken by the six companies to resume the High Court case. The EC Commission which had also challenged the Mandatory Regime withdrew their proceedings finally in May, 1987 in light of the European Court ruling.”

8.Conclusions

The Joint Committee has taken congnisance of the arguments of the present Minister for Energy in refusing to allow the INPC to appear before it. Nevertheless the Joint Committee is not totally convinced of the cogency of the Minister’s arguments in the light of

(i)the tenuousness of the Minister’s argument for advancing sub iudice considerations in the light of the specific and limited nature of the outstanding proceedings (in abeyance) in the High Court,

(ii)the Joint Committee’s assurances to the Minister that it would take account in its questioning of the INPC of the legal proceedings and of sub iudice practice in both Houses of the Oireachtas, and

(iii)the fact that sub iudice considerations have not precluded INPC from publishing its annual reports and accounts, including its operational achievements, in the intervening years.

In effect it appears to the Joint Committee that sub iudice considerations are being availed of in a somewhat artificial and unreasonable manner by the successive Ministers for Energy to thwart the Joint Committee in examining in a proper mode matters that are already in the public domain and clearly, unambiguously and strictly within the Joint Committee’s remit.

9.The Joint Committee realises that it would be both futile and unrealistic to proceed with its examination of the Reports and accounts and overall operational results of INPC without having the benefit of examining INPC representatives and has decided in the circumstances to draw the attention of the Houses to the situation that has arisen and to make recommendations in regard thereto.

10.The fact that prospectuses have been published and offers invited for the sale of INPC re-inforces the Joint Committee’s determination that the sub iudice aspect should be resolved as a matter of urgency. It is striking that the Minister’s recourse to the sub iudice aspect does not appear to have impeded in any way the planned sale of INPC and the Joint Committee cannot discern the basis for the dichotomy in the Minister’s approach.

11.The Joint Committee understands that the Committee on Procedure and Privileges of Dáil Éireann is reviewing the operation and application of the sub iudice practice in parliamentary proceedings. In that regard the Joint Committee wishes that its experience of the application of the practice to its proceedings be taken into account in the analysis and appraisal of the current practice. While not wishing to be acrimonious, the Joint Committee considers that a clearly defined practice should be established by both Houses of the Oireachtas as soon as possible which, inter alia, would delineate clearly the sub iudice criteria and more significantly establish that the arbiter of the sub iudice practice in the parliamentary process shall be, in cases such as the present, the Joint Committee.

(Signed) Dick Roche, T.D.,

Chairman of the Joint Committee

10th July, 1990.