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Minister Humphreys publishes legislation to establish the ODCE as a stand-alone agency

• The new ‘Corporate Enforcement Authority’ will strengthen Ireland’s regulatory framework for the conduct of business.
• The move is a key action in the Government’s package of measures to tackle white collar crime.
• Minister also publishes account of Judge Aylmer’s findings on the investigative shortcomings in the ODCE investigation (2008-2012) leading to the trial of the DPP Vs Sean Fitzpatrick.

The Minister for Business, Enterprise and Innovation, Heather Humphreys TD, today (Tuesday, 4th December 2018) announced that Cabinet has approved the publication of draft legislation to establish the Office of the Director of Corporate Enforcement (the ODCE) as a stand-alone agency to be called the Corporate Enforcement Authority. The move is a key action in the Government’s package of measures to strengthen Ireland’s response to white collar crime.
Announcing the decision, the Minister said: “By establishing the ODCE as a stand-alone agency, it will be better equipped to investigate increasingly complex breaches of company law. The new Corporate Enforcement Authority will have more autonomy, particularly in terms of the ability to recruit specialist skills and expertise.

“Since 2012, the Director has introduced a number of reforms within the Office, especially in the area of staffing, which have proven to be very effective. In publishing this legislation, the Government is building on and strengthening these reforms.

“Our goal is to make sure we are doing everything we can when it comes to ensuring a robust regulatory framework for the conduct of business in this country.

“In this spirit, the Bill also assigns new powers and develops existing powers to tackle alleged breaches of company law.”

Highlighting the importance of the draft legislation to continued enterprise development, the Minister said:

“A solid and stable business environment is central to supporting our enterprise base and preserving our competitiveness. It is also fundamental to ensuring that Ireland retains its excellent reputation as a great place to invest.”

She concluded:

“I allocated an additional €1m to the ODCE in Budget 2019 to support its establishment as a stand-alone agency.”

Today Minister Humphreys also published ‘An account of the shortcomings identified by Judge Aylmer of the Circuit Court concerning an investigation by the Office of the Director of Corporate Enforcement’. The account deals specifically with the ODCE investigation that led to the trial of the DPP V Sean FitzPatrick, which ended with the acquittal of the defendant on all charges, on the direction of Judge Aylmer.

Commenting on the account, Minister Humphreys said:

“My aim in publishing this account is to set out the factors that led to the investigative shortcomings identified by Judge Aylmer so that we can learn from them and take measures to address them.

She continued:

“It is, however, important to remember that this is a historic investigation that took place between 2008 and 2012. Since then, the Director has made many changes in the Office, which address many of the issues outlined by Judge Aylmer.

“Nevertheless, as Minister, I want to be certain that the Office is in the best possible position to ensure that the mistakes made in that ODCE investigation never happen again. That is exactly what I am doing by publishing legislation to set up the new Corporate Enforcement Authority.”

Notes to Editor:

Background to the establishment of the ODCE as a stand-alone agency

The Government published a package of Measures to Enhance Ireland’s Corporate, Economic and Regulatory Framework in November 2017. One of those measures was to establish the Office of the Director of Corporate Enforcement (the ODCE) as a new “agency that is better equipped to investigate increasingly complex breaches of company law”. The Government approved a structure similar to a Commission, with a Chief Commissioner assisted by other Commissioners, who may have delegated responsibilities for other specific functions.

Therefore, the primary purpose of this General Scheme is to give effect to that decision by establishing the ODCE with a commission structure, to be called the Corporate Enforcement Authority.

The General Scheme invests the new Authority with all the same functions and powers that the Director of Corporate Enforcement has with some modifications to reflect the new commission structure. Head 9 (Membership of the Authority) provides for up to 3 full time Commissioners, and is designed to give the Authority the flexibility to structure itself to meet the differing demands of its remit, which includes investigation, prosecution, supervision, and advocacy, and along clear lines of responsibility. Head 11 (Staff of the Authority) gives the Authority the ability to appoint its own staff.

The Scheme also provides for new investigative tools, notably new search and entry powers to enhance the Authority’s ability to gather evidence that is held electronically.

The General Scheme, at Part 6, also makes miscellaneous amendments to the Companies Act 2014. These include technical provisions, such as replacing references in the 2014 Act to ODCE with the new Authority.

The Bill will be referred to as the Companies (Corporate Enforcement Authority) Bill 2018.

Background to the publication of the account of Judge Aylmer’s findings of investigative shortcomings

One of the most complex and largest investigations in the history of the State commenced in 2008 with the investigation into Anglo Irish Bank. This investigation involved multiple strands and resulted in several separate sets of charges.

The trial in the case of the DPP V Sean FitzPatrick ended on 23 May 2017, when Judge Aylmer directed the acquittal of the defendant on all charges. The then Minister for Jobs, Enterprise and Innovation requested a report from the Director of Corporate Enforcement on the investigative shortcomings that led to this result.

On advice received from the Attorney General, because of section 956 of the Companies Act 2014 the Minister is prohibited from publishing a report pursuant to Section 955 of the Companies Act 2014. The Minister for Business, Enterprise and Innovation has, however, committed to publishing an account of the investigative shortcomings identified by Judge Aylmer to ensure that there is an understanding of what happened in this case.

This is a historic investigation that took place between 2008 and 2012. Since then, the Director of Corporate Enforcement has implemented multiple reforms within the ODCE, which address many of the issues that led to the investigative shortcomings outlined by Judge Aylmer.

The draft legislation published today to establish the ODCE as a stand-alone agency will build on the organisational and procedural reforms that have already been implemented.

It is important that the account is in line with fair procedures, due process and natural justice. The advice of the Office of the Attorney General was sought on the content of the account and this advice was considered in the finalisation of the account.

Examples of reforms within the ODCE since 2012

There have been a lot of positive steps taken by the ODCE since this investigation took place. For example, in 2008 the ODCE had no forensic accountants or Digital Forensic expertise. Today they have 7 Forensic Accountants, a Digital Forensics Specialist and a Digital Forensics Laboratory.

In this particular investigation, it was Civilian staff in the ODCE who took the lead role in obtaining witness statements, none of whom had any training or experience in taking such statements.

Since then, specialised training has been provided in the Garda Training College Templemore for ODCE staff to assist with statement taking, interviewing of witnesses, preparation of files for the DPP, exhibits handling and disclosure.

Procedural changes have also taken place so that all criminal investigations are now led by members of An Garda Siochána assigned to the ODCE.

Publication of the account

The aim of publishing this account is to present the factors surrounding the investigative shortcomings identified by Judge Aylmer in relation to this particular trial, to learn from them and to take measures to address them. The account sets out the factors that led to these shortcomings, notes the measures already taken and identifies further appropriate steps to ensure that the Office of the Director of Corporate Enforcement (ODCE) is equipped to undertake large scale and complex investigations. The Government is committed to ensuring that Ireland continues to enjoy its well-deserved reputation as a good place in which to do business.

The account refers only to the role of the ODCE in this particular trial and does not cover other organisations involved in the trial, nor does it address other factors or shortcomings identified by Judge Aylmer which are not directly related to the role of the ODCE.

Ends

The Department of Business, Enterprise and Innovation (DBEI) plays a key role in implementing the Government’s policies of stimulating the productive capacity of the economy and creating an environment which supports job creation and maintenance. The Department also has a remit to promote fair competition in the marketplace, protect consumers and safeguard workers.
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