West's new Minister finds issues on his doorstep

The west's new Cabinet member may not be allowed much honeymooning as he adjusts to life in the Department of the Marine and Natural Resources. Frank Fahey, who visited Galway lifeboat station at the weekend, inherits several "challenging" issues from his predecessor, Michael Woods, and several of these are on his very doorstep.

Even as the Cabinet reshuffle was being finalised last week, the Irish Small and Medium Enterprises' Association (ISME) was demanding an "urgent review" of the legislation relating to mineral exploration off the coast.

It has called on the Government to set up a review body to "take account of the changing circumstances and changing technology" of deep-sea exploration off the Porcupine Bank and elsewhere off the west coast. "In 1992, the tax rate applying to offshore activity was reduced from 35 per cent to 25 per cent, one of the lowest rates in the world, and the oil and gas companies were given a 100 per cent write-off against development and recovery costs. Royalties were also abolished.

"There was some logic for this policy at this time," ISME said. "However, technology has advanced, and the geological picture has changed. If there is no review, not only will Ireland's tax take from its offshore discoveries be minimal, but the spin-off in terms of onshore servicing work will bypass this State."

Within the industry, it is estimated that 12 jobs can be created onshore for every one offshore. Consequently, a rig of 100 staff could result in over 1,000 jobs on land. "In a very few years, there could be as many as 30 rigs operating off the west coast, giving rise to as many as 30,000 jobs along the west coast from Donegal to Foynes." It won't happen by accident, ISME says, and it won't happen if left exclusively to the oil and gas industry, given that the sector has developed "traditional" links with Scotland.

ISME points out that the Irish Offshore Operators' Association (IOAA) highlighted past benefits to the economy in its report on the sector published last November.

The main thrust of the report was directed at making the case for a competitive environment, however. Carried out for the IOAA by Dr Barry Brunt and Dr Richard Moloney of UCC, it said that Irish suppliers should not be disadvantaged in competing for business opportunities in the Irish offshore sector.

The study estimated that total expenditure by the oil and gas industry since 1970 on exploration and appraisal was £642.5 million - equivalent to £1,375.6 million in 1998 terms - with only Kinsale yielding confirmed commercial results.

It said that direct expenditure in Ireland was £392.3 million, rising to £976.8 million when indirect impact is allowed for (both figures in 1998 terms). The average annual employment offshore was some 60 full-time equivalent jobs, with total average annual employment being equivalent to 247 full-time jobs.

However, SIPTU's national oil and gas offshore committee has since questioned some of the figures, and has claimed that the direct benefit of exploration to date to the Irish economy is of far less value than stated. The report's "pessimistic outlook" also has to be seen in terms of negotiations on production licences, it says.

"It was on the basis of such a gloomy outlook that licensing terms were amended to allow for a very lenient tax deal in 1992," Mr Padraig Campbell, SIPTU's offshore representative, maintains.

He had called on the previous marine minister, Dr Woods, to "grasp the nettle" in terms of Enterprise Oil, specifically, and its refusal to use Irish goods, services and labour in any meaningful way. Enterprise Oil has been involved in a dispute with SIPTU over use of Irish labour.

As for another form of "liquid gold" - the wild salmon - Mr Fahey will have to tackle some distinctly unfinished business. "I don't like to wear old clothes," was how the former minister is said to have described his commitment to a task force report on salmon management which had been commissioned and published by the previous government.

The task force, chaired by Prof Noel Wilkins of NUI Galway, had engaged in widespread consultation and managed to persuade warring parties to sign up to a document which aimed to guarantee the rights of coastal communities while also conserving the stock and developing angling tourism. Yet in spite of successive promises, the commission charged with delivering on the initiative had not been established by the time the energetic Dr Woods left office last week. It is regarded as one of his few weak points in an otherwise impressive performance.

There are genuine fears that the goodwill established with the commercial salmon sector, and the consensus achieved, will now be lost. As several informed observers have noted, if Ireland cannot manage its own salmon stock, it can hardly moan too much in Brussels when reform of the EU Common Fisheries Policy is on the agenda.