DAIL DEBATES

Irish National Petroleum Corp Bill 2001 Second Stage

Sitting Time
Sitting Date
21:20
20 June 2001
Text:
[Mr. Sheehan continuing]

I have met the company officials and feel that they are honest, active and very proficient industrialists with an enormous amount of experience in the industry. But we are handing over a State jewel. INPC in its wisdom and the Government were very mindful of the development that could ensure that single point mooring be put into operation in the bay. For that I say thank you. It was the first step in attracting this giant American conglomerate into the bay.
I ask the Minister to give an assurance in this House that she will not sign any deal without having perfect knowledge of all aspects of it. I am not doubting the Minister's capacity, I know her to be fit and able to rise to the occasion, but I ask that the same mistake as was made with Gulf Oil is not made again.

Mr. Kelleher: In time to come there will be another statue next to St.
Brendan looking out into the Atlantic, a tribute to Deputy Sheehan and his
efforts on behalf of west Cork.

Mrs. O'Rourke: A statue to P.J.

Mr. J. O'Keeffe: Cast in bronze.

Mr. Sheehan: No, cast in gold.

Mr. Kelleher: I welcome the opportunity to discuss the issue of Irish National Petroleum Company, the Whitegate Oil Refinery, its future and that of its workers. The Government had to make a decision whether investment would come from the Exchequer or to sell it off to a company willing to invest and develop the refinery. I know that the Government spoke to various parties and was prepared to approve the investment in the programme. However, it was concerned at the costs involved in upgrading the refinery to allow it to continue to function. A decision had to be made and I welcome it. It is a deal which is progressive and one which gives the workers their pension rights and all the other aspects which will be addressed in this issue. More importantly, we will have employment and an oil refinery in Whitegate for the next 15 years.
I have a small concern which I hope can be addressed. In a national emergency, or in the event of outbreak of war or any problems associated to the supply of petrol to this country, the Minister has stated that she has a provision whereby she can more or less take over the running of the refinery but I am not sure if that is the case. I know Tosco has given commitments to run the refinery and the oil terminal for at least 15 years on a fully commercial basis without the support from the mandatory regime and there is a further undertaking to maintain existing jobs and conditions of employment. That sounds very good in 2001 but I am concerned about the state of the facilities in 2016. Will we have a dilapidated, run-down oil refinery? The company may fulfil its commitments over the 15 years but is there a continuing programme of reinvestment provided for in the agreement? I would be a sad if in 15 years' time we had an oil refinery that is completely out of date, has been ran into the ground and has no investment forthcoming.
Effectively, we would have storage depots in Whiddy with the ability to store oil for 90 days but no manufacturing facility. I am hopeful that there is something in the contracts - which will be published when this Bill is passed and the deal signed - whereby there will be some form of investment to ensure that we have an oil refinery in the event of an emergency. Suppose something happens in 2014. Tosco will have almost completed its term of commitment but if there was a national emergency we could be taking over something that is non-operational or not able to carry out the function we expect of it. I hope the Minister can clarify that issue.
INPC, as a small stand-alone company, is certainly exposed to the
various changes in the international oil markets. Being taken over by a large company does protect it to a certain extent. The mandatory regime will not be in operation for the support of the refinery. We like to look at the free market and ensure that all projects stand alone. However, if we are willing as a nation to fund Whitegate refinery to the mandatory regime, it would be a pity if, in 2008 or 2009, Tosco were to say it could not honour the commitments made in 2001 or that it found it impossible to operate profitably. We would then have two choices. It could leave and offer compensation or we could introduce a mandatory regime to support the
refinery, then at least we would have something when the fifteenth year is up. I raise that because I believe it is important for an island nation to have a certain level of security which allows it to refine its own crude oil. We have the 90 day storage and the area of interconnectors and dependence on gas is all very fine, but refining our own oil is something we should look at in the overall context.
The National Oil Reserves Agency, NORA, maintains strategic 90 day
stocks in compliance with international obligations. Although currently a subsidiary of INPC, NORA is not included in the transaction and will continue to operate in the State sector. That is very important but, as I pointed out, if there is no refinery to refine the reserves, we are back to square one. It is something I would like the Minister to clarify in her summing up. Tosco has indicated an intention to establish its new European headquarters in Dublin and to invest in Whitegate and Whiddy on a commercial basis. We all welcome that. If, as things change, there is no commercial basis for investment, we will find that there will be no investment forthcoming. It is something I would also like to have clarified. Having spoken with some of the workers, I believe the commitments the Minister has made and the commitments Tosco is willing to enter into in regard to the workers and their entitlements are welcome.
Section to follow:
Sitting Time
Sitting Date
21:30
20 June 2001
Text:
[Mr. Kelleher continuing]
There is always great concern when we talk of selling off a State
asset. The first fear expressed is protection of the rights of the
workers. There is concern regarding the ISPAT plant. A good redundancy package was offered to workers on the sale of Irish Steel to ISPAT, but in the event of the closure of ISPAT the workers who stayed on with that private company for those extra five years out of a loyalty to the company or for whatever other reason will not receive the generous redundancy packages that were given by many State companies. I hope all those issues will be tied down in the meat and bone of the small print of the contract. I could draft something similar to this script, the contents of which are welcome, but it is vague. It is important to ensure that the protection of workers' rights, including pension entitlements, is covered in the small print. Such rights have not been protected in some instances, the position of workers in the ISPAT plant being a case in point.
Another issue of concern is the impact of the implementation of the
Seveso directive, which comes under the brief of another Minister. I am not sure whether the oil refinery comes under that directive. The impact of that directive is something of which we should always be aware. It is not the case at present, but in the event of the downgrading or lack of investment in the oil refinery the implementation of that directive would become an issue. The implementation of that directive in regard to Whitegate oil refinery would have a major impact on the stagnation of development in and around the harbour area. I would welcome clarification on those issues. Tosco must be obligated to ensure that at no stage, because of inadequate investment or changes in policies in regard to the
oil refinery, the Seveso directive is implemented in its fullest form as it would stagnate development in Whitegate right across the harbour and down as far as Midleton. When drawing up this contract the officials should examine this issue. Tosco should be obliged to ensure the highest safety standards apply at all times over and above what may be required in terms of normal practice in oil refineries and, more importantly, to ensure that the Seveso directive is not implemented in that area.
I congratulate the Minister and her officials on the negotiations. I hope she will take on board my concerns regarding those issues,
particularly the latter one, as I am sure the others are obvious and would be considered in any event. I wish the workers concerned years of oil refining and that in year 2016 there will still be a functioning oil refinery in Whitegate.