Madam, – This year marks the 25th anniversary of the liquidation of Irish Shipping Ltd, a wholly State-owned deep-sea shipping company. The company was established in 1941, soon after the outbreak of the second World War with the object of providing the ships necessary to maintain imports of essential supplies in the absence of available foreign-owned tonnage. This objective was achieved through the courage and seamanship of the Irish seafarers who manned the company’s vessels from 1941 to 1945 when the war ended.
Two of the company's ships, the Irish Pineand Irish Oakwere torpedoed by German submarines in November, 1942 and May, 1943 respectively. The entire crew of 33 on the Irish Pinewere lost with their ship and the 33 crew members of the Irish Oakwere rescued from the sea by the Irish Shipping-owned Irish Planeand landed at Cobh.
Due to speculative chartering-in of vessels in 1984, heavy losses were sustained and a liquidator was appointed on November 14th of that year when the company’s liabilities exceeded its assets by £88 million. It was ironic that the company was obliged to have government approval for the purchase of a ship whereas the chartering-in of ships which involved far greater financial exposure did not require such approval.
A total of 273 shore-based and sea-going staff lost their jobs, many of whom had more than 35 years service with the company. To add insult to injury for the unfortunate employees of Irish Shipping, the government-appointed directors, who should have been aware of the chartering-in of vessels did nothing to prevent it. The Fine Gael/Labour government, led by Garret FitzGerald, refused to pay the employees more than the minimum statutory redundancy although, in the previous two years, over £9 million in redundancy payments had been provided by the government for the employees of Verolme Cork Dockyard, in which the State had a minority interest. It subsequently transpired that the liquidation of Irish Shipping Limited cost the exchequer more than £101 million.
In purely monetary terms, this was £13 million in excess of the cost of allowing the company to continue trading – apart altogether from the loss of the 273 jobs. It was also a fact that the government at that time rescued the AIB from the losses that could have resulted from the bank’s investment in the Insurance Corporation of Ireland.
There was well-founded suspicion in Irish Shipping Limited that the liquidation provided a very convenient smokescreen for the waste of taxpayers' money in financing the building of the Irish Spruceat Verolme Cork Dockyard ordered by government decision in June 1980 but which was not required by the company. This ship was financed through a leasing arrangement negotiated by the Department of Finance which cost the exchequer over £60 million. The ship was subsequently sold for £3 million.
In evidence provided by senior civil servants before the Oireachtas Committee which dealt with the Irish Shipping liquidation, it was claimed that it would cost the State £220 million to keep the company in operation, an obviously outlandish claim but one which was not questioned by the committee. An equally erroneous claim was made that the liquidation would cost less than £50 million whereas according to the auditor and comptroller general’s reports for 1984, 1985 and 1986 the cost to the exchequer was well in excess of £100 million.
Twenty-five years on it is still relevant to recall that no one from either the political or civil service establishment was ever called upon to answer for this abuse of power and for the inequitable treatment meted out to the employees of Irish Shipping Ltd who had a blameless record of service to the State. – Yours, etc,