FSC-Watch

An independent observer of the Forest Stewartship Council

FSC certified state forestry company 'rips-off' Ireland: officialTags: Ireland, Certifier conflict of interest, Soil Association Woodmark

Recent revelations in the Irish press have confirmed that, not only is the FSC-certified state forestry company, Coillte, responsible for massive environmental abuse but has also been ripping off the Irish state for tens of millions of euros.

The article below from the Irish Sunday Independent confirms that Coillte has also been guilty of the illegal use of European Commission grants, for which the irish State has been forced to re-pay millions of euros in fines.

The new revelations once again highlight the scandalous incompetence and negligence of Soil Association Woodmark, which has long known about Coillte's illegal use of EC funding, and has also clearly failed to ensure it complies with Criterion 1.2 requiring that certified companies pay "All applicable and legally prescribed fees, royalties, taxes and other charges".

Soil Association has made FSC a laughing stock in Ireland; it, and it's certification of Coillte, should immediately be removed from the FSC.

Coillte has made no payments to exchequer since 1989

Government orders State Forestry company to cough up dividends**

Enda Leahy

The State forestry company has been ordered by the Government to hand over some of its profits to the taxpayer after eight years of refusing to make payments.

The company and officials at the Department of Finance admitted last week that despite owning seven percent of the country and making over euros 200m in profits in the last seven years alone, Coillte Teoranta has never made a payment to the exchequer since it was set up in 1989.

Officials say that they believe it's the only state company which has never returned profit dividends to the Government.

The company claimed last week that its failure to make a single return in 19 years was because it has been "in development mode".

A senior official in Department of Finance said the company has now been told in no uncertain terms to begin making payments after almost a decade of requests, made directly and via Coillte's parent department, currently Agriculture and Food (DAF).

"Our position is well understood by the management, that dividends must be paid henceforth, that profits should be returned to the taxpayer", he said.

"It's been subject to discussion for the past eight years or so - at various stages we were trying to come up with dividend values and it was knocked on the head for one reason or another".

"It would have been put forward to agriculture and the company directly, in writing, verbally, by email, all types of communications".

Coillte was set up in 1989 as a State-owned private limited company with the Minister for Finance as the only shareholder.

It was given state ownership of the State's forests, about 376,000 hectares, or 1,500 square miles.

Estimates of how much the state could have collected, based on the 30 per cent profits returned to central funds by the ESB, amount to euros 60m since the year 2000. But officials say there are no plans to seek back payments from the company.

It has made significant profits for many years, including over euros 40m last year, but has been heavily criticised fort poor environmental policies and business strategy.

The company cost the taxpayer euros 8m in 2003 when the Government had to repay EU grants it [Coillte] had taken illegally for five years.

A recent Government-commissioned report concluded that the mistake had made the company unable to afford to plant trees.

Despite the failure to pay back fines or make any payment to the exchequer, Coillte's senior management has received performance bonuses of between euros 200,000 and euros 400,000 each year for nearly a decade.

A spokesman for Coillte explained the lack of payments.

"It is correct that we have not paid a dividend to date and that there have been requests for us to do so from Finance".

"Coillte's board and management have taken a view to date that as the company was in development mode any surplus cash was to be used for reinvestment in the business, for acquisition - such as Medite in 2006 - and to reduce group debt.

"We should have had discussions from time to time with Agriculture on the issues of a dividend and in recent months specific proposals have been put through by Coillte to the Department of Agriculture in relation to paying a dividend".

"It is hoped to reach a conclusion on the issue in the coming months".

There are currently 17 state-owned companies operating. Last year returns to the exchequer totalled over euros 84m. The ESB was the largest contributor with euros 63m.

Finance officials say no guidelines exist for calculating dividend payments each year and that it is done on a "case by case" basis.

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