Foreign Affairs: Bad governance

With the discovery of oil in Cambodia and the potential for rags or riches, one can only reflect on how nice it is that we have good governance at home who would never compromise the good of the country. Yeah right. Hat tip to Mark.

Political Fact Sheet “An Act of Economic Treason”

In 1975 Justin Keating's terms for oil exploration included a provision for the state to require a 50% stake in any commercial find. There was also between 8%-16% production bonuses and a standard corporation tax of 50%.

Keating was basing his policy on the Norwegian model. The Norwegians offered direct assistance to their Irish counterparts to set up a state oil company and offered them direct involvement in the commercial development of the North Sea Fields.

Between 1975-87 Minister Dick Spring introduced a sliding scale of state participation on marginal fields. This was to attract further investment however the interests of the Irish state were still maintained.

In 1987 Charles Haughey appointed Ray Burke as the Minister for Energy. Burke began negotiating with the oil companies, meeting directly with executives on occasion against the advice and in the absence of his department officials. He introduced radical new terms, which included.
Abolishing state royalties.
Abolishing any state participation in oil and gas exploration.
Abolishing any state stake hold on commercial finds.

In a Dáil speech during the same month Dick Spring called this “An act of Economic Treason”

Both Ray Burke and Charles Haughey have since faced criminal charges by the Mahon “Payments to politicians” tribunal. The tribunal investigated a payment of €30,000, which Burke received from Mr Robert Rennicks a director of a company owned by Mr Tony O’Reilly.

Coincidentally Mr O’Reilly is a 45% stakeholder in Providence resources, a major oil and gas exploration company. Providence has several prospects in the porcupine basin just of Irelands west coast. The company claims to have identified 25 trillion cubic feet of gas and 4 billion barrels of oil in the Dunquin prospect in the porcupine basin. This is estimated to be worth about 50 billion in monetary terms.

O’Reilly also happens to be the chief executive of independent newspapers, consisting of The Irish Independent, The Daily Star, The Sunday independent, The Sunday World and The Evening Herald. The question is independent newspapers really independent when it comes to the Corrib gas issue?

In April 1992, Bertie Ahern further improved terms for the oil and gas companies by needlessly reducing the corporation tax from 50% to 25%(lowest rate in the worldwide). Recent investigations uncovered that he had no bank account during this period as Minister for finance i.e. no records of his personal finances for this period.

In June 1992, the government introduced new licensing terms, which permitted oil and gas producers to sell their products at market prices.

This was a step away from the previous arrangement with marathon oil, which had sold gas to Bord Gáis from the Kinsale Field at a bulk discount for many years. This means that Bord Gáis must now pay full market prices for any gas purchased on behalf of the Irish public.

Bertie Ahern gives Bord Gáis permission for a pipeline to be built from Galway to Bellanaboy . By giving this permission Bertie unfairly influenced the planning process for the refinery by exerting political pressure on planning officials prior to their decision.

In 2002 the government introduced legislation, which allowed a private company (Shell) to place Compulsory Acquisition Orders on the land of Erris farmers. This is the first time in the history of the state that this has occurred. The legislation allowed the government to purchase the land for Shell without the permission of the farmers.

Astonishingly the current Minister for Communications, Marine and Natural resources Noel Dempsey in 2005(when the Rossport 5 were in prison) and as recently as November 2006 continues to grant exploration licences under the same overly generous terms and conditions to oil and gas companies. (Source)