Curaçao and St. Maarten may
seek country status separately
PHILIPSBURG--The ongoing disagreement on the resolution containing General Enactment AMvR regulating the temporary Financial Supervisory Committee CFT will lead soon to a discussion whether St. Maarten should continue the process of attaining country status on its own.
“I believe that’s something we will be discussing during the political consultation scheduled to take place in May,” Netherlands Antilles Prime Minister Emily de Jongh-Elhage told The Daily Herald.
The agreement made with the Dutch Government was that debt cancellation would start as soon as the financial supervisor was in place, which was scheduled to be some time in July. For the AMvR regulating the CFT to be in place, Curaçao and St. Maarten should have laws in place regulating corporate governance.
De Jongh-Elhage said that while the Central Government and Curaçao were ready to continue with the constitutional change process, St. Maarten had indicated that the topic of corporate governance was a breaking point for the island.
“The start of the debt cancellation too is a breaking point for the Central Government and Curaçao,” the Prime Minister said.
St. Maarten’s Executive Council has been invited to attend Wednesday’s Council of Ministers meeting, during which the position of St. Maarten on corporate governance also will be tabled.
This invitation was based on discussions that took place during Dutch Prime Minister Jan Peter Balkenende’s visit to St. Maarten on February 12. “In that meeting the St. Maarten Executive Council blamed the Central Government for the poor situation concerning Justice on the island, for not cooperating to establish a Reporting Centre for Unusual Transactions MOT, and for the financial problems with children’s homes,” De Jongh-Elhage said.
She added that the recent discussions with St. Maarten on regulations for good corporate governance should be viewed as part of the CFT; this issue too should be discussed during tomorrow’s meeting.
The problems with rules for corporate governance surfaced in March when members of the Project Group for Finance visited the Netherlands and hoped the last points of discussion on the topic would be ironed out during the trip.
In the January 22 meeting of the political steering group in the Belair Community Centre, it was agreed under the chapter of Finance that regarding the AMvR regulating the temporary CFT for Curaçao and St. Maarten, the entities would give an insight on their current regulations and, if necessary, develop new regulations in the area of corporate governance.
The new regulations should include procedures of acquiring and disposing of participation, guidelines for a policy on dividend payment, and procedures and demands concerning the appointment and retirement of administrators.
It was also agreed that the islands would have the new regulations for corporate governance anchored in a law by August 1 at the latest. If this is not the case, the CFT will advise the Kingdom Council of Ministers to offer instructions for the islands on corporate governance complying with the escalation model, which means that the island territories would be consulted first, then the Central Government and afterwards the Kingdom Council of Ministers.
It was agreed that the January 22 accord would be further worked out during a session of civil servants February 6-8 discussing corporate governance based on internationally accepted norms.
This meeting did not take place because of the February 16 political consultation in Curaçao, as the only topic discussed during that meeting was justice. The meeting of the technocrats on corporate governance was moved to March.
Constitutional Affairs Minister Roland Duncan first sounded the alarm, stating that the information he had received from the Netherlands was that the negotiations within the Project Group for Finance were not going well.
Duncan was quoted in the March 14 edition of The Daily Herald as saying he understood that a deadlock had occurred between St. Maarten and the Netherlands on principles of corporate governance.
Dutch State Secretary of Kingdom Relations Ank Bijleveld-Schouten has stated on several occasions since then that St. Maarten wants to go back on agreements made on corporate governance on January 22.
By “going back on agreements” she meant that St. Maarten had changed its position and did not want to discuss corporate governance anymore. During her last visit to Curaçao April 1-4, the State Secretary, when asked about her meetings with Commissioner of Constitutional Affairs Sarah Wescot-Williams, stated that St. Maarten knew what it should do and had to deal with those problems.
The Dutch Government stressed incorporating rules on corporate governance in the constitutional change process after the Island Council election on April 20, 2007. The reason was the appointment of former Curaçao Commissioner Ivar Asjes as Assistant Director of waste management in the company Selikor.
The appointment had been annulled by the Court on February 11, but the Dutch Government had insisted on its point of view of having corporate governance regulated by law in light of other concerns it had.
The appointment of the spouse of a St. Maarten commissioner to the board of directors of a government-owned company was reason for much dismay.
In an article published in the Dutch newspaper Spits of October 31, 2007, Bijleveld-Schouten said: “With good governance, I think also about corruption. You can see forms of political favouritism and corruption in the Netherlands Antilles. Some of the politicians over there (Netherlands Antilles) don’t have the correct sense of responsibility.”
The intention of the Dutch Government was that corporate governance should be regulated by an AMvR, a Kingdom Law and of higher order than a local ordinance. This will guarantee that principles of good governance will be adhered to.
Although the Netherlands Antilles has laws regulating financial accountability, creative financing through government-owned companies and even private construction companies, especially in St. Maarten, has shown that there is no compliance with these rules.
These types of pre-financing schemes take place outside the budget and government has to pay back loans with high interest rates.
The beautification of Philipsburg financed by the harbour and the construction of the new Government Building are two examples to which Dutch politicians constantly refer.
The fact that a St. Maarten politician is also involved in the harbour business makes the entire situation concerning corporate governance more untrustworthy for the Dutch.
Nevertheless, in the technical negotiations on corporate governance, Antillean advisors convinced their Dutch counterparts that it was not possible to regulate corporate governance in an AMvR, but that the new countries-to-be should regulate it in their own local laws.
This was also what the January 22 agreement stated, but according to Wescot-Williams, the problem is not St. Maarten going back on those discussions, but the Netherlands using the island as a scapegoat and wanting to change unilaterally agreements that were reached.
She stated during last week Wednesday’s Island Council meeting: “Since there is no agreement about corporate governance regulations as part of the tasks of the financial supervisor, but an agreement by parties to regulate corporate governance themselves, that is for St. Maarten the way it should be.
“And the other parties know this. And so St. Maarten refused to entertain that partners unilaterally want to deviate from previous agreements. The result finally was that the matter of corporate governance was taken out of the resolution for the financial supervisor in a political consultation of January 22.
“Mention was only made of the minimum issues of corporate governance to be regulated and what would happen if entities did not regulate corporate governance.”
While the situation is at a deadlock, as Duncan stated in March, Finance Minister Ersilia de Lannooy told The Daily Herald in an invited comment that both the Central Government and Curaçao were now stuck with a problem, because the debt cancellation could start at the earliest in November, knowing that it will take approximately six months before the AMvR regulating the CFT will be ready.
The Central Government calculated in its 2008 budget that the debt cancellation would start in July. “We have to bridge those months on our own,” the Minister said.
While Curaçao already has prepared an Island Ordinance to deal with the regulations for good corporate governance and the necessary steps have been taken to have it in place by August 1 as agreed, St. Maarten apparently has reneged on this agreement.
De Lannooy said it was true that good corporate governance was not part of the November 2 Final Accord, but that the Netherlands had tabled this matter in a later stage.
“Yes, the discussion on corporate governance was added to the process, but we cannot remain stuck on it; we have to continue. We negotiated that the islands would do it themselves. Curaçao has prepared a draft island ordinance regulating corporate governance that will be adopted by country Curaçao. The Central Government doesn’t need to implement such laws because it does not own any companies. We are ready to go,” she said.
Political leader and President of the PNP De Lannooy believes that neither St. Maarten nor Curaçao should obstruct the other in attaining country status. Therefore, Curaçao should be able to continue its process of attaining country status separately.
“When the Curaçao Island Council rejected the November 2, 2006 Final Accord, Article 26 of the Island Regulation of the Netherlands Antilles was invoked for the other islands to continue their negotiations with the Netherlands. I believe that Curaçao should be allowed to do the same. We don’t have a quarrel with St. Maarten. We will go our way. St. Maarten will look out for its own interests, and we will see where our paths cross each other again.”
In her October 31, 2007, interview Bijleveld-Schouten stated that it made no sense for the islands to apply delaying tactics. “Maybe the islands believe that if they negotiate long enough, the CFT will not be put in place,” she said.
The impression the Island Government of Curaçao, the Central Government and the Dutch Government have is that delaying the process is exactly what St. Maarten has been doing.
