The ‘omerta’ around CRH described in June’s Village extends to its liability for Mica

46 October/November 2023 October/November 2023 47

Government estimates that its ﬂawed

scheme will cost €2.7 billion or even as

much as €3.65 billion, a “staggering ﬁgure”

according to the Irish Times!

mid all the fanfare of CRH PLC’s move

to the NYSE, a dark shadow looms

over the company’s future

performance, in the form of the

potential long-term eect and cost of

Ireland’s deleterious minerals crisis on the

company’s earnings, its reputation and Ireland’s

reputation as a safe and reliable country to do

business in.

The crisis continues to spread, while the State’s

response has been a mixture of obfuscation,

failure to meaningfully engage, refusal to provide

100% Redress and systematic protection for the

perpetrators of the crisis - the CRH-dominated

construction materials sector. There is no denying

that victims of deleterious materials bear no

blame whatsoever for their plight.

But another set of victims has now emerged,

Ireland’s taxpayers, who again bear no

responsibility. This latter group are victims of ill-

judged government policy, which currently

provides protection for the perpetrators — the

cement/quarry/ concrete sector.

I raised the question of the potential liability of

CRH for the crisis at the company’s 2022 AGM.

CRH Chairman, Richie Boucher boldly responded,

stating that CRH had no liability for defective

concrete products but he failed to explain why.

There are thousands of victims of CRH and of

the irish Concrete Federation, which is mostly a

front for CRH, from 13 counties in the Republic of

Ireland, with some now emerging in Northern

Ireland also. The current hideously flawed

government ‘scheme’ covers only Donegal,

Mayo, Sligo and Clare but even at that, many

second homes (those not registered with the RTB

(Residential Tenancies Board), together with all

holiday homes, agricultural and commercial

buildings are excluded from the ‘enhanced

scheme’. These restrictions are wholly

discriminatory to those systemically excluded. A

defective block is a defective block, no matter

what type of structure it is used in.

Government estimates that its ﬂawed scheme

will cost €2.7 billion or even as much as €3.65

billion, a “staggering ﬁgure” according to the

Irish Times! However, these ﬁgures should be

viewed through the National Children’s Hospital

optic, you know, the one where the original

€400m projected cost is now careering towards

€2.4 billion (a ﬁve-fold increase).

The history of construction inﬂation is that the

cost of deleterious materials will be probably be

more like €15-20 billion and that doesn’t include

any allowance for compensation.

The crisis generates mixed feelings for most of

us. Let’s suppose that ten thousand of us bought

a model of motor vehicle that was totally

defective. Would we expect Government to

provide us all with brand new shiny replacement

cars? I think not. We would all chase our local

dealer and indeed the Irish distributor together

with the overall parent company. There is

precedent for this: the Volkswagen emissions

scandal.

The ‘omerta’ around CRH described in June’s

Village

extends to its liability for Mica

State aid is

deﬁned as an

advantage in any

form whatsoever

conferred by

national public

authorities to

undertakings on a

selective basis

By Séamus Maye

Notably for CRH, it was the US that ﬁrst called

out Dieselgate or Emissionsgate back in 2015.

Volkswagen has since paid out tens of billions of

Euro in a string of settlements around the world

and continues to do so. What should be worrying

for CRH is that the powerful SEC may take a dim

view of CRH’s behaviour in not at least ﬂagging

the signiﬁcant costs that might emerge for the

ﬁrm, arising from defective concrete products in

Ireland. The SEC, for precedent, sued Volkswagen,

claiming that the ﬁrm had “misled investors by

issuing billions of dollars’ worth of bonds and

securities, after making false and misleading

statements to investors and underwriters about

vehicle quality, environmental compliance and

VW’s ﬁnancial standing”. The SEC stated that

“issuers availing themselves of American capital

markets must provide investors with accurate

and complete information”.

Further, and equally worrying for CRH, is the

fact that in Europe (Germany), Volkswagen

shareholders (1650 in number, mainly

institutional shareholders) then brought a €10

billion case against Volkswagen, accusing the

carmaker of failing to inform investors about the

scope of the emissions scandal, in particular

before the US Environmental Protection Agency

(EPA) issued a Notice of Violation in September

2015.

POLITICS

46 October/November 2023 October/November 2023 47

CRH has been Ireland’s largest company for several decades and now ranks itself as the world’s

No. 2 in the construction materials sector. The company is synonymous with controversy going

back at least to the 1969 takeover of Irish Cement. Over the last decade,

Village

has described

many of its strategies as irregular, often criminal.

Politicians

Then Fianna Fáil leader, Jack Lynch, had intervened to ensure that Roadstone was the preferred

bidder for Irish Cement and former Taoiseach Seán Lemass was appointed as the ﬁrst Chairman

of the new Cement Roadstone Holdings (now CRH plc). The late Des Traynor, arguably Ireland’s

most corrupt business ﬁgure, also ﬁgured on the board of the newly created monster.

All the parties that have been in power since 1969 have kow-towed in the end.

Legislation

By 1973, Ireland was immersing itself in the EEC. It had to introduce several new laws and

regulations in order to make Irish Law compatible with EU Competition (Antitrust) and, later,

Money-Laundering, Laws.

Ireland brought in (on the face of it) strong competition law, starting with the 1991 Competition

Act, the successor to the Restrictive Practices Act 1972, which created the Competition Authority.

This was followed by the Company Law Enforcement Act 2001, which created the Oce of

Director of Corporate Enforcement.

Regulators

However, these regulators have proved chimerical. The lengths that they have gone to protect

CRH plc are staggering..

Courts

And legal action is ineectual. Three of a host of barriers to justice are: a) there are still no class

actions in Ireland, though representative actions are imminent; b) third-party funding is illegal;

and c) contingency fees are illegal.

Apart from the myriad anti-competitive complaints going back over 50 years, some will

remember the secret sale of Glen Ding Woods to CRH by the State, the Ansbacher Scandal, the

Moriarty Tribunal’s failure to investigate CRH, Judge Moriarty’s €500k shareholding in CRH, and

illegal dumping and quarrying. The DPP failed to prosecute CRH plc for illegal dumping adjacent

to Glen Ding in County Wicklow and CRH’s failed to comply with a High Court Order (in 1996) to

reinstate lands from which it had legally extracted 67,000 tonnes of material. Then there is the

ﬁnancial relationship between CRH plc, Des Traynor and Charles Haughey, former Taoiseach.

All of this and more was contained back in 2000 in a lengthy submission to the Moriarty Tribunal

by Philip Lee Solicitors, on behalf of the then Quarry and Concrete Family Alliance. Apart from

an eventual token look at Glen Ding, the submission was binned.

On 30 November 30, 1994, the EU Commission ﬁned CRH plc subsidiary, Irish Cement Eco,

€3.5 million for playing a lead role in the pan-European cement cartel. Notwithstanding the

extensive appeals process through the EU Court of First Instance and EU Court of Justice, the

ﬁndings and ﬁne were substantially upheld by the European Court of Justice.

Crash!

The State bailout of CRH and the concrete industry by paying Mica victims, without seeking redress

from the culprits, could constitute

State Aid and generate regulatory

problems in its new US home.

Most of the defective concrete that

generated the Mica crisis was

supplied by CRH and Irish Concrete

Federation members, most of whom

are controlled by CRH, but their

privileged position with government

and regulatory authorities have

insulated them from liability, or even

media queries.

CRH has massive exposure in the defective

concrete blocks scandal and, crucially, the

financial resources to provide full remedy

including compensation to all victims.

The State’s behaviour looks like illegal State

Aid through the back door. Competition is one of

the pillars of the European Union and State Aid is

controlled to facilitate it.

State aid is deﬁned as an advantage in any

form whatsoever conferred by national public

authorities to undertakings on a selective basis.

State aid requires these features:

a. there has been an intervention by the State or

through State resources which can take a

variety of forms (e.g., grants, interest and tax

reliefs, guarantees, providing goods and

services on preferential terms etc.);

the intervention gives an advantage on a

selective basis, for example to speciﬁed

companies or industry sectors, or to

companies located in speciﬁc regions;

c. as a result, competition has been or may be

distorted;

the intervention is likely to aect trade

between Member States.

The provision of such aid to bail CRH and the

concrete industry out of their obligations distorts

the EU Market for construction by providing

advantage to CRH and the concrete industry that

would not be given to other construction sectors

or indeed sectors generally.

In my letter to the Irish Concrete Federation

which represents CRH and other suppliers, I

stated:

“As it currently stands, it appears that the

State is determined to protect your sector by

imposing the costs of the deleterious

materials crisis on taxpayers and consumers.

This is wholly unacceptable to taxpayers and

future consumers alike, while reeking of

illegal State Aid to your sector.

The more feasible and fairer outcome for

all would see your sector providing the

funding, which is readily available, either

through cash-flow or divestment or a

combination of both. The problem for ICF is

how to unravel itself from the clutches of

CRH plc”.

The State in its obsessive protection of the

CRH family has cornered defective block

victims, made sure that they have no eective

avenue to justice while creating a whole new

set of victims in taxpayers. Meanwhile, CRH

decamps to the NYSE to be treated as the new

superheroes on the block by US media that may

still believe Ireland to be the land of saints and

scholars; and all without a bleat from Irish

media.

As it currently stands, it

appears that the State is

determined to protect your

sector by imposing the

costs of the deleterious

materials crisis on

taxpayers and consumers

Why is the State paying?