State accused of squandering lucrative seaweed sector

It may not be as lucrative as the rare whale dung known as ambergris used in perfumes, but there’s floating gold flourishing on Ireland’s 7,800km coastline, and it is expected to increase in value.

Seaweed was once used as fertiliser, or burnt for potash used in glass and soap and for iodine, but in the 1950s it was identified as a source for alginates in gelling and for pharmaceutical use.

More recently, its properties have been recognised in medical research, while its nutritional qualities have resulted in extensive demand in the Asian market .

So, the foundation of the State company Arramara Teo in 1947 could be seen as the visionary equivalent of setting up Bord na Móna, even if its purchase and drying of feamainn bhuí for shipment to Scotland didn't add much value.

In November 2000, a report published by academics and industry, and co-ordinated by Prof Michael Guiry of NUI Galway, extolled a “largely ignored and underdeveloped bonanza” on our coastline, then employing nearly 700 people seasonally and worth €10 million, but projected to be worth at least five times that if steps were taken to capitalise on it.

That report by the National Seaweed Industry Forum – established in 1999 by then marine minister Frank Fahey – recommended setting up a research institute to take full advantage of some of the 500 species found here.

Fourteen years later, the report was shelved by Government, and on May 7th, 2014, Arramara was sold to Canadian multinational Acadian Seaplants – with approval of Minister of State for the Gaeltacht Dinny McGinley and Minister for Public Expenditure Brendan Howlin – for an undisclosed sum.

Alarm bells

By then, State management of the firm had been transferred by former Gaeltacht minister Éamon Ó Cuív to

Údarás na Gaeltachta

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Before conclusion of the sale, Arramara applied for licences to harvest in 21 coastal areas from Belmullet,Co Mayo, to Ballyvaughan, Co Clare, covering about 20 per cent of that coastline for the very first time. Previously, it relied on traditional harvesters who had both formal and informal agreements for their activity under the 1933 Foreshore Act.

Alarm bells rang among the harvesters, who feared being squeezed out or having their hand forced by a new owner. Some Irish companies which had moved into developing seaweed were also concerned.

Among those calling for full disclosure of the deal and sale price, including whether it was contingent on harvesting rights, was former Arramara chief executive Tony Barrett who had tried unsuccessfully to buy it out in 2006 when Údarás na Gaeltachta took it over, and John T O’Sullivan, managing director of BioAtlantis Ltd, a biotechnology company founded in 2004 and based in Tralee, Co Kerry.

O'Sullivan, who worked in agri-food for Golden Vale and the Kerry Group, pointed out that his company sold in more than 30 countries, had grown at an average of 45 per cent annually since 2007, and was in collaborative research with 26 universities and research institutes in 18 countries.

‘Strategic partner’

It was one of Arramara Teo’s largest customers, but didn’t find out about the latter’s sale until August 2011 – 11 months after Údarás na Gaeltachta engaged the Farrell Grant Sparks consultancy to find a “potential strategic partner” for it.

O’Sullivan, formerly with Kerry Algae, had previous issues with Acadian in the Taiwanese market which he informed the Gaeltacht authority about. His company was eventually allowed to make a bid, but he believes the marking system was changed after his bid was submitted – a claim denied by the authority.

Speaking to The Irish Times, Údarás na Gaeltachta officials have said there was no requirement to publicly advertise the sale or seek Cabinet approval, and that the decision to sell outright, rather than engage with a partner who would invest in the company, was based on "legal advice" that a "put and call option", which would give 100 per cent ownership to Acadian, was preferential.

This would allow for 40 per cent to be clawed back by the Gaeltacht authority if the new owner didn’t meet its commitments, it says.

Údarás says the sale was not contingent on price only, nor on harvesting rights – which are a matter for the Department of the Environment – and that Acadian Seaplants’ track record in research would be beneficial in the long term.

It says part of the deal involves Acadian providing a community fund of €30,000 which might go towards educational initiatives.

Acadian representatives who attended an Oireachtas Environment Committee hearing on this issue in July stressed that they wanted to work with harvesters and the industry here, but did not believe unregulated harvesting was “sustainable”: in spite of the fact that cutting has been sustainable for decades. The firm did not respond to queries from this newspaper.

O’Sullivan believes the lack of transparency and lack of “patriotism” by Údarás na Gaeltachta is “frightening”.

“I can take a sale of a State company to a private concern,” he says. “What is not acceptable is that a Gaeltacht development agency with a remit to promote indigenous Irish industry can take, and seek to justify, actions that will effectively jeopardise access to the resource – thereby jeopardising the future of Irish companies.”