State's policy on beef fines still defies reality

VERY soon, unless the Government decides to act, something very nasty is going to happen to the Irish taxpayer. The mission of the European Union is going to take a lot of money, perhaps as much ash £95 million, from our pockets.

It is money we can ill afford to lose, money that could do a lot of good to a lot of ordinary people. But unless the Government wakes up very soon, we are going to lose, at the very best, a large proportion of it. And the dreadful thing is that, even at this stage, no one seems to be willing to do very much about it.

The money relates, as most people probably know by now, to the behaviour of the beef industry, and, more specifically, to the failure of the Department of Agriculture and Food to control that behaviour in 1990 and 1991, the years for which the Commission is imposing penalties.

That behaviour and that failure, appalling as they were, cannot now be undone. What is truly terrible is that the Department is continuing that failure in the way it has dealt with the task of trying to persuade the Commission to reduce the penalties.

To figure out what should have happened when the State discovered it was facing major penalties, you have only to look at the relevant EU regulations, which have the force of law, not just in Brussels but also in Ireland. In the first place, the Department of Agriculture should not have accepted into intervention storage any beef which wasn't deboned according to the regulations. It should have withheld payment from the factories involved, and charged them for all the beef at the highest price. This is the law. The Department didn't follow it.

Given this failure, what should happen when it becomes clear that the State has a major mess on its hands? The answer in the regulations is very clear. The State as a whole not just the Department has a legal duty, according to regulation 729/70, to recover sums lost as a result of irregularities". And it should go the Commission and inform it of the judicial procedures" it has taken to get the money back. In other words, the Government should have taken the meat companies to court the minute it became clear, from the beef tribunal and from the EU's own investigations, that the regulations had been broken.

THIS didn't happen. The only attempt to recover money from the beef companies so far is that the Department has started proceedings to recover a little over

£900,000 from Goodman International, a tiny amount in the context.

The really galling thing is that even if the State had tried to get the money from the companies and failed, it could have made a huge difference to its case in Brussels. The regulation says "In the absence of total recovery, the financial consequences of irregularities or negligence shall be borne by the Community with the exception of the consequences of irregularities or negligence attributable to administrative authorities or other bodies of the member states."

Borne by the Community" means that Brussels, not the Irish taxpayer, pays up. Admittedly, the Commission could claim, with obvious justification, that at least some of the losses did result from administrative failures by the Irish authorities. But had the Department even tried to put the squeeze on the meat companies, a large part of the losses would have been borne by the EU budget. Instead, the Government has merely established a group of officials to "examine" the question of recovering the money from the companies.

What has happened is that the Department, astonishingly, has chosen to base its case in Brussels on a defence of the Irish beef industry. The proposed penalties are being, as Mr Ivan Yates told the Dail on January 30th, "vigorously contested on the grounds that they are not soundly, supported by the facts".

"The facts" in question relate to a technical but, vital issue, that of the yield of meat that can be obtained from the deboning of a carcass that is to be placed in intervention storage.

The Department of Agriculture has argued in Brussels that there is really nothing wrong with the way Irish factories deboned intervention beef. It commissioned a report from a British consultancy, SGS, to show that the yield returned in 1990 and 1991 by the Irish factories the absolute minimum 68 per cent was perfectly reasonable.

This is a bizarre approach for one very obvious reason Goodman International admitted to the beef tribunal not only that it regularly got more than 68 per cent meat from intervention deboning operations, but that it was company policy to keep the extra meat and sell it to private customers.

The beef tribunal report found there was "no doubt whatsoever" but that this was the "deliberate practice and policy" of the management of the Goodman group. Effectively, this State's attempts to stave off a huge financial loss seem to be based on the assumption that no one in Brussels can read English.

AT the same time, the Department has been refusing to accept that it breached regulations itself, again in direct defiance of the evidence of the beef tribunal.

On January 30th, in reply to a Dail question from"Mr Des O'Malley, Mr Yates said "I do not accept that there were significant departmental breaches of intervention regulations and certainly none which would justify penalties of the magnitude proposed. I do not believe (that) the overall conclusions of the tribunal report provide such a justification."

But, in fact, the tribunal report actually lists in detail numerous breaches of the EU regulations by the Department.

Just last week, indeed, in its report on the 1993 accounts, the Public Accounts Committee of the Dail expressed its "criticism of the Department in the most trenchant terms for allowing a situation to arise which could result in over £100 million falling to be met by Irish taxpayers. The Committee... finds it difficult to accept that control procedures were being operated satisfactorily at the time."

Instead of doing what EU law requires it to do try to recover the money and in the process making a good case for avoiding huge penalties, the Department seems to have been more concerned to protect the beef companies and to protect itself.

Not surprisingly, this policy has been a disaster. The only significant result of nearly two years of lobbying and negotiation by the Department is that the largest component of the EU fines the one that directly relates to intervention deboning has been doubled from £37.1 million to £74.2 million.

A final decision on the size of the penalties is expected on March 4th. This means there is still some time for the Government to try a change of tack. It could, even now, stop making a pathetic case that the problems never really existed and start making it clear that they did exist and that it will do everything it can to ensure that those responsible for them will pay the price.