BELFAST - The United States has become involved in a dispute between the British and Irish governments over a collapsed subsidiary of international chemicals manufacturer Imperial Chemical Industries PLC, which entered bankruptcy late last year and left a £15 million ($23.25 million) deficit in its defined benefit staff pension scheme.
The subsidiary, Richardsons Ltd., Belfast, was owned by Irish Fertilizer Industries Ltd., Dublin, a company jointly owned by London-based ICI and the Irish government.
The creditors, primarily the two major shareholders, voted to place the company into liquidation - the equivalent of Chapter 7 bankruptcy protection - in November after agreeing not to finance further company losses.
In the year ended Sept. 30, Richardsons racked up net losses of e30 million ($31 million).
Following the bankruptcy announcement, workers were told they wouldn't receive their entitled redundancy payments unless they waived their right to take legal action against ICI and the Irish Republic.
In December, the 206 Richardsons workers were told they would receive only 40% of their pension entitlements because of the £15 million deficit.
The liquidator, Ray Jackson, an associate at KPMG, Dublin, said that full assessment of the Richardsons pension scheme's assets had not been received from the trustees yet.
U.S. investigation
The furor over the Belfast workers' pensions drew in the United States when several senior politicians involved in the Northern Ireland peace process, including Monica McWilliams, a member of the Northern Ireland Regional Assembly, and Sinn Fein's Gerry Adams, requested President Bush's special envoy, Richard Haass, to investigate the matter.
"Some of the workers have worked there their whole lives and now find themselves with hardly any pensions," said Ms. McWilliams, a member of the Northern Ireland Regional Assembly, the body that oversees the British region of Northern Ireland under a devolution arrangement.
The situation has intensified pressure on British Prime Minister Tony Blair and his advisers to introduce measures aimed at protecting the pension benefits of workers whose companies go bankrupt.
His administration recently published its long-awaited Green Paper on pensions, but the document made no proposals on boosting protection for members.
A spokesman for the U.S. State Department said Mr. Haass was unable to comment on any official involvement in the dispute.
However, Ms. McWilliams, who speaks regularly with Mr. Haass, said he was primarily concerned that similar events could occur in the United States. ICI has a large subsidiary in New Jersey. It is believed Mr. Haass will make a report to Commerce Secretary Don Evans.
No further obligation
Representatives of both ICI and the Irish government said they have no further obligation to the Belfast workers.
Mary Harney, Irish deputy prime minister, told the Irish Parliament in Dublin in December: "I am not aware of any obligations on my part or on the part of ICI, the other shareholder in IFI, in relation to the pension funds (of the Belfast workers)."
The Irish government acquired its share of the company in 1987, when ICI took over the operations as part of a privatization program.
There have been a number of cases in Britain in which companies have followed the rules for winding up defined benefit schemes and have found they only need to pay a certain percentage of benefits to members.
In Ireland, defined benefit pension schemes are underwritten by a special state reserve. Had Richardsons been incorporated in Ireland, the shortfall would have been made up by the government rather than leaving workers out of pocket.
