Big construction companies are involved in a "scam" to avoid paying sub-contractors what they are owed, Green Party leader Trevor Sargent claimed.
Demanding reform of the law, he said that over the past month he had received deputations from representatives of 10 small and medium-sized indigenous companies operating in the construction sector who had alerted him to a widespread scam.
"A construction company, in this case Glenman Corporation, in Galway, won a Government contract to build council housing in Fortunestown and in Ballymun, Dublin. It hired sub-contractors to do most of its work," he said.
"When the work was completed and the sub-contractors presented invoices, in one case for €374,000 and €254,000 in another, some fault was found in the documentation or the work.
"They were told they would not be paid. When the sub-contractors threatened legal proceedings, they were told it would take three years to get to court and by then they would be bankrupt. Instead, they were made an offer of approximately half of what they were owed to take or leave."
Mr Sargent said that the prompt payment legislation should be reformed to include all business transactions and reform legal structures to make it affordable for all sectors of society.
"Most of all, however, I appeal that we examine the way in which we award Government contracts so that unscrupulous companies no longer have the power effectively to drive small companies to ruin."
They all knew, sometimes from bitter experience, said Mr Sargent, that the law favoured the rich and that justice delayed was justice denied.
"A small contractor will have little choice but to risk going into further debt if he or she decides to take on a larger contractor. The scam also works because we have no effective prompt payments legislation."
Mr Sargent said a plant hire company is owed €180,000, a site security company €10,000, and a haulage company €206,000.
"This is Government money not reaching people who work on Government projects.
"I spoke to one man who owes €400,000 to the people he hired to carry out this work. His apartment has been ransacked - we suspect by the creditors - his wife and children have been obliged to move out of the family home and he has not slept there for four weeks because he fears for his life," said Mr Sargent.
Minister of State for Enterprise, Trade and Employment Tony Killeen said he had been advised by the Department of the Environment that neither they, nor the local authorities concerned, had any prior knowledge or difficulties with the payment of suppliers or sub-contractors by the company referred to.
Outlining current regulations, he said that compensation could be claimed for the recovery costs of a debt, if such costs arose, and the basis on which this might be done was also laid down.
