HARBOURS BILL
EXPLANATORY AND FINANCIAL MEMORANDUM
INTRODUCTION
- This Explanatory and Financial Memorandum relates to the Harbours Bill. It has been prepared by the Department for Regional Development ("the Department") to assist the reader of the Bill and to help inform debate on it. The Memorandum does not form part of the Bill and has not been endorsed by the Assembly.
- The Memorandum should be read in conjunction with the Bill. It is not, and is not intended to be, a comprehensive description of the Bill. Where a clause or part of a clause does not seem to require explanation or comment, none is given.
- The primary purpose of the Bill is to improve the public accountability of the Northern Ireland trust ports, viz Belfast, Coleraine, Carlingford, Londonderry and Warrenpoint. The then Department of the Environment (NI) completed a major review of public trust ports in Northern Ireland in 1998, which paralleled a similar exercise undertaken in Great Britain. In recognising the strategic importance of trust ports to the Northern Ireland economy, the review identified a need to extend their powers and ease the financial controls under which they operate to enable them to compete more effectively. However, it also recommended the need for improvements in the public accountability of the harbour authorities.
- This objective has, in part, been achieved with the enactment of subordinate legislation in the form of three Harbour Orders for the ports of Belfast, Londonderry and Warrenpoint. These Orders have, inter alia, increased the number of council representatives on each of the Boards and ensured that the ports comply with the Memorandum of Understanding (MOU) which each harbour authority has concluded with the Department, and which governs any disposal of land, and in addition covers any change of use within the respective harbour estates.
- However, primary legislation is required to improve further public accountability within this sector. The need for this arises from the growing interest of the general public and elected representatives in the activities and future development plans of the individual harbour authorities.
- This short Bill is in three parts. The first relates to a power for the Department to issue directions to the harbour authorities. The second deals with the power for the Department to obtain information from the harbour authorities and the third relates to the power for the Department to issue Codes of Practice for the trust ports. The explanation for each of these is set out below.
- Clause 2 empowers the Department to give directions of a general, or specific character in relation to the functions of the harbour authorities. The Department requires this power to enable it, if necessary, to safeguard the public interest in relation to the activities of the trust ports. It is envisaged that this power would only be used after consultation with the harbour authorities and thus it would serve to underpin the Memoranda of Understanding between the respective harbour authorities and the Department. It is envisaged that this measure would be supported by a further provision imposing a duty on trust ports to comply with any direction given by the Department.
- Clause 3allows the Department to require a trust port to provide such information as may be necessary. Such a power might be used, for example, to enable the Department to gather certain information, details of a specific lease or contract, or information about preferential user arrangements. At present the Department does not have the power to require the harbour authorities to provide such information.
- Clauses 4&5will provide the Department with the power to enable it to introduce a Code of Practice for all NI trust ports, in line with a similar initiative in GB. Following the review of GB trust ports a major policy document: Modernising Trust Ports - A Guide to Good Governance, was published. This document provides a guide to national standards of accountability and is intended to act as a benchmark for good practice for the trust port sector in the future. Drawing on this source document and other best practice examples within the public sector, the Department has developed a draft Code of Practice for NI trust ports, and undertaken preliminary consultation on its content with the harbour authorities.
- The Department issued a consultation document on the legislative proposals on 12 October 2001. The consultation document was issued to the harbour authorities; the port users and their agents; the Regional Development Committee; district councils; bodies listed in the Department's Equality Scheme; the Department for Transport; Crown Estates Commissioners; Marine and Coastguard Agency; The Foyle, Carlingford and Irish Lights Commission and Waterways Ireland. A total of 21 responses were received mainly from the harbour authorities, district councils and industry representatives and the views expressed have been considered and, where appropriate, taken into account.
- The Department considered retaining the status quo with no change to the legislative framework for harbour authorities. However, this would have required the Department to rely solely on an increase in the number of district council representatives on each of the Harbour Boards, and the voluntary arrangements in respect of the Memoranda of Understanding and the Codes of Practice to deliver the desired improvements in public accountability. The Department, with the support of the Regional Development Committee, decided therefore that the public interest would best be served through the promotion by the Department of this Bill.
- The Bill contains seven clauses.
- It is not considered that the proposed Bill will have any direct cost implications for any government department, or other public or private body, or individual. Up until the present, public trust ports in Northern Ireland, as in Great Britain, have effectively been outside the public expenditure regime. This reflects the fact that they are independent autonomous bodies which are defined for PE purposes as public corporations, that is bodies owned or controlled by the public sector, deriving most of their income from fees and charges to customers and operating with a large measure of independence on day-to-day issues.
- A HM Treasury review of the classification and treatment of public trust ports has been ongoing for sometime. At national level the Department for Transport (DfT) continues to argue that trust ports should remain outside the public expenditure control regime and has strongly resisted Treasury's suggestion that they should be brought within it. Central to DfT's case is the fact that, apart from making appointments to the boards of some trust ports, government has no powers to require trust ports to provide financial information, or forecasts to enable it to monitor, let alone control their expenditure. If DfT succeeds and HMT abandons its proposal to bring the trust ports within the Public Expenditure (PE) system, the status quo will continue. Conversely, should HMT prevail, then all UK trust ports will require to be brought within the PE system. In advance of a resolution of this matter there is a slight risk that the proposed NI legislation may influence the outcome since it would alter the degree of influence, or control locally over NI trust ports. In these circumstances there is a possibility that trust ports might come within the scope of the public expenditure regime, though this should only effect Annually Managed Expenditure (AME) rather than the Departmental Expenditure Limit (DEL), thus avoiding any detrimental impact on the Department's public expenditure. In any case should HMT's view prevail the planned legislation will enable the Department to obtain the necessary financial information which is likely to be required for PE purposes.
- The Department has screened the proposed policies in line with the Guide published by the Equality Commission. We have not identified any adverse or differential impact in relation to any of the groups mentioned in Section 75 of the Northern Ireland Act 1998. A formal response from the Equality Commission was not provided.
- The Bill is considered to be compatible with Human Rights obligations.
- There is no evidence to suggest that the proposed legislation would advantage or disadvantage any groups identified in Section 75 of the Northern Ireland Act 1998, therefore, the Department considers that equality issues do not arise. Nothing was raised by any of the groups during the Consultation process.
- A full Regulatory Impact Assessment of the costs and benefits of the proposed measures is not considered necessary. It is not anticipated that they will give rise to significant additional costs, since the impact relates to the Department and the harbour authorities. The legislation should not affect businesses, charities or the voluntary sector.
- At Introduction the Minister for Regional Development had made the following statement under section 9 of the Northern Ireland Act 1998:
"In my view the Harbours Bill would be within the legislative competence of the Northern Ireland Assembly."
BACKGROUND AND POLICY OBJECTIVES
CONSULTATION
OPTIONS CONSIDERED
OVERVIEW
COMMENTARY ON CLAUSES
Clause 1: Designated harbour authorities
This clause designates certain harbour authorities and provides the Department with the power to amend the list following consultation with the harbour authority. It specifically excludes the designation of a fishery harbour, a district council owned harbour or a harbour owned by a company having share capital, or a body which is not a harbour authority.
Clause 2: Power of Department to issue directions
This clause provides the Department with the power to issue directions to a designated harbour authority in relation to the exercise of its functions and sets out the arrangements for doing so. The Department is required to consult with a designated harbour authority before giving any directions. A duty is placed on the designated harbour authority to comply with any directions given.
Clause 3: Power of Department to obtain information
This clause provides the Department with the power to obtain such information as it may reasonably require, from a designated harbour authority by the serving of a notice in writing. The clause creates an offence where any person in purported compliance with the notice knowingly or recklessly makes any statement or produces any document which is false. It allows for a person to be convicted on indictment and to be liable to a fine or to imprisonment or both. In addition it creates an offence with the same penalties, where any person without reasonable excuse fails to comply with a notice. The clause relates to information that has come into the possession of the designated harbour authority after the coming into effect of this legislation.
Clause 4: Code of practice
This clause provides the Department with the power to issue or amend codes of practice intended for the guidance of members of designated harbour authorities. It places a duty on the designated harbour authority to take account of the relevant provisions of the code when exercising its functions. The Department is required to publish the code.
Clause 5: Making and approval of code of practice
This clause requires the Department to prepare a draft of the code or amendment to the code and to consult with such persons as it thinks necessary. The Department will lay the code or the amendment to the code before the Assembly. The Department shall specify the day on which the code or amendment shall come into effect within the code or amendment.
Clause 6: Interpretation
This clause sets out the key definitions used in the Bill.
Clause 7: Short title
This clause provides for the Act to be called the Harbours Act (Northern Ireland) 2002.