WHAT IS COHO?

     

EXPLAINING COHO

By: JJosephaNews
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WHAT IS COHO?

According to the site of the council, COHO entail the following:

By Cabinet Missive of November 10, 2020, no.2020002307, Your Majesty, on the recommendation of the State Secretary for the Interior and Kingdom Relations, submitted to the Advisory Division of the Council of State of the Kingdom for consideration the proposal of a Kingdom Act containing rules regarding the establishment of the Caribbean Body for Reform and Development (State Act Caribbean Body for Reform and Development), with explanatory memorandum.

The proposed Kingdom Act seeks to establish the Caribbean Body for Reform and Development (COHO). The aim of COHO is to promote the implementation of administrative reforms in Aruba, Curaçao and Sint Maarten, the realization of sustainable public finances and the strengthening of the resilience of the economy, including its constitutional embedding.

The proposal that the Division was previously presented for advice only applied to Curaçao. In a letter dated November 18, 2020, the State Secretary for the Interior and Kingdom Relations informed the Department that agreement had also been reached with the government of Aruba about joining the proposal. In addition, the State Secretary has indicated which changes will be made to the proposal and the explanatory notes in connection with this. In a letter dated January 5, 2021, the State Secretary announced that Sint Maarten had also joined and what changes had been made to the proposal. In the absence of a consolidated text, the Division will take the proposal as presented on 10 November 2020 as a starting point.

At the request of the government of Curaçao, supported by Aruba and Sint Maarten, the government submitted a number of questions to the Department. These questions will not be answered individually, but will be discussed in the advice below.

The Advisory Division of the Council of State appreciates the intentions expressed in this proposal to provide aid and assistance to the Caribbean countries. It endorses the need, on the one hand, to provide support to the countries and, on the other, to initiate necessary reforms that should lead to improvements in public finances, the economic structure, education and the functioning of the administration.

The proposal does not only focus on the nature and scope of the reforms, but also indicates the powers and means with which the reforms are to be implemented. The Division does not consider the way in which this approach has been elaborated in the proposal appropriate. COHO's positioning and package of tasks and its relationship with other actors lead to a lack of clarity about the division of responsibilities and powers between different actors. This weakens the countries' own responsibility and thus their commitment.

The Division does not consider it advisable to compensate for the countries' lack of implementation power by making COHO largely responsible for drawing up and implementing action plans. This does not strengthen the implementation power of the countries and makes phasing out the scheme more difficult. It must therefore be doubted whether, with the current set-up, it can reasonably be expected that a reform program will lead to successful results in the short and long term. Partly because of this, questions arise about the compatibility with the constitutional structure of the Kingdom laid down, among other things, in the Charter for the Kingdom of the Netherlands (hereinafter: the Charter), in which the autonomy and individual responsibility of the countries are important starting points.

On the basis of the information given in this advice, the Division is therefore of the opinion that the Kingdom Act proposal is inadequate. It concludes that the proposal should be further considered.

1. Content of the proposal and reading guide

a. Content of the proposal

Since April 2020, Aruba, Curaçao and Sint Maarten have received liquidity support from the Netherlands to limit the consequences of the COVID-19 pandemic for the population, business and employment in those countries. Since May 2020, this liquidity support, in the form of loans to the Caribbean countries, has been linked to conditions, the aim of which is to increase the countries' financial and economic resilience. (see note 1)

For the provision of the third and subsequent tranches of liquidity support to Aruba, Curaçao and Sint Maarten, the Kingdom Council of Ministers has made it a condition, among other things, that the countries agree to the Kingdom Act on the Caribbean Body for Reform and Development (State Act COHO), which proposal is now advice is presented. (see note 2)

The proposal aims at the establishment of COHO. The COHO aims to promote the implementation of administrative reforms in Aruba, Curaçao and Sint Maarten, the realization of sustainable public finances and the strengthening of the resilience of the economy, including its constitutional embedding. (see note 3) The reforms to achieve these goals are laid down in so-called country packages. These country packages are individually agreed upon by the Netherlands and the three Caribbean countries as mutual arrangements on the basis of Article 38, paragraph 1, of the Charter. In the country packages, the subjects, projects, programs and measures with which those goals are to be achieved are broadly formulated. (see note 4) The country packages are then elaborated into an implementation agenda by COHO and the Ministers of General Affairs of the country concerned. (see note 5) In the end, this will often result in concrete plans of approach, to be drawn up by COHO. (see note 6)

The proposal assigns four tasks to COHO. (see note 7) The first task is to support and monitor the development and implementation of projects, programs and measures by government bodies and public enterprises of the countries. The second task of COHO is to initiate and promote projects and programs related to the subjects defined in a country package. Third, COHO provides grants upon request to citizens and private legal entities, including public enterprises, and COHO itself may participate in the equity capital in private legal entities, including public enterprises. Finally, it is COHO's task to institute, if appropriate, enhanced financial supervision of part or all of the expenditure of the country concerned.

The proposal assigns various powers to COHO to carry out these tasks. For example, COHO can demand data and intelligence from government bodies and companies. (see note 8) It can provide financial resources, expertise and implementation capacity and screen governments and public companies. (see note 9) In addition, COHO may develop and manage projects and commission the provision of goods or services, as well as participate in equity capital. (see note 10)

If COHO is of the opinion that insufficient cooperation is being given to the reform measures, COHO may suspend support. (see note 11) It can also advise the Council of Ministers of the Kingdom to use a supervisory instrument - provided for in the Charter - if measures are not sufficiently implemented. (see note 12) In addition, it will be empowered to institute enhanced financial supervision in agreement with the Council of Ministers of the Kingdom if a country does not make sufficient efforts to comply with obligations under the COHO Kingdom Act, or the Curaçao and Sint Maarten Financial Supervision Act. to comply with the Aruba Financial Supervision Act (R(A)ft) respectively. (see note 13)

The Minister of the Interior and Kingdom Relations is empowered to issue instructions to COHO with regard to an action plan for the development and implementation of a project, program or measure by government bodies and with regard to the initiation, promotion and implementation of projects. (see note 14) In addition, the Minister of the Interior and Kingdom Relations can, on his own initiative, institute stricter financial supervision on part or all of the expenditure of one of the countries if this is required in an important interest. (see note 15)

b. Reading guide

In the following, the Division discusses the effectiveness of the proposal (point 2). The relationship between COHO and existing institutions (national administration, C(A)ft, Minister of the Interior and Kingdom Relations) is central here. The Division also discusses the need to arrive at clear conditions for the expiry of the Consensus Act. The Division then discusses the relationship between this proposal, taking into account the problems of effectiveness and proportionality, and the Statute (point 3). Thereafter, the Section discusses which elements are necessary for a credible and feasible approach to the necessary reforms (point 4). Finally, the Division makes a comment about the unclear legal framework regarding data processing (point 5).

2. Effectiveness

a. Introduction

The Division appreciates the intentions expressed in this proposal to provide aid and assistance to the Caribbean countries. This fulfills Article 36 of the Charter. The Department endorses the need, on the one hand, to provide support to the countries and, on the other, to initiate necessary reforms that should lead to improvements in public finances, the economic structure, education and the functioning of the administration. The Division also appreciates the positive fact that the proposal not only provides for the identification and prescription of reforms deemed necessary, but is also aimed at actually providing support to the countries in achieving them. Furthermore, the Division considers it appropriate in itself that the framework for this is laid down in consensus national legislation on the basis of Article 38, second paragraph, of the Statute. This expresses the fact that the Netherlands, Aruba, Curaçao and Sint Maarten endorse the desire and necessity to bring about reforms and to work together to achieve this.

The Division considers it self-evident that the liquidity support is linked to a reform programme. Financial support subject to conditions is in line with the international practice of, for example, the IMF and the European Union (see note 16), which is also characterized by lending under (strict) conditions, including the structural adjustment facilities aimed at structural reforms. The Division notes, however, that it is unclear which money flows will go through the COHO and which will take place directly between the Netherlands and the country concerned. It is also not clear to what extent there will be loans or gifts.

The proposal focuses not only on the nature and scope of the reforms, but also sets out the path with the powers and means through which the reforms are to be implemented. On this point, the proposal encounters several objections that could seriously undermine the effectiveness of the proposal. The Division notes the following in this regard.

b. Relationship between COHO and government

It is customary for countries to provide financial support with conditions, not only with a view to the proper use of the resources involved, but also with a view to achieving certain policy goals, such as improving public finances and strengthening the economic structure. In addition, forms of monitoring are usually also provided for. If the pre-agreed conditions are met, the country will receive the promised financial support.

In that usual approach, the conditions attached to the aid affect decision-making in the country concerned. After all, that decision-making is framed by the conditions that have been set. However, this does not interfere with domestic (constitutional) relationships. In other words, the granting of aid has no formal consequences for the tasks and powers of the domestic institutions concerned. This method has also been followed in the aid granted to countries of the Kingdom at various times to date. A recent example of this is the Growth Agreement with Curaçao in 2019.

A different approach has been chosen for the present proposal. The basis for the measures to be taken is formed by the so-called country packages. (see note 17) These country packages are still not very concrete in terms of the goals to be achieved. The country packages are then elaborated into an implementation agenda by COHO and the Ministers of General Affairs of the countries. (see note 18) This will ultimately often result in concrete plans of approach, to be drawn up and, in a number of cases, also implemented by COHO. (see note 19)

This means that aid provision is not based on a clear plan on which aid recipient countries are assessed. To that extent, there is an open commitment, whereby there is insufficient clarity beforehand as to what conditions are set for the granting of support. This carries the risk that countries will feel less responsible for meeting the conditions, which will lead to less achievement of the intended goals, or that new conditions will be imposed during the reform process in order to actually obtain the promised aid.

That risk is amplified by the combination of tasks assigned to COHO. (see note 20) The Division notes that COHO's tasks go further than supporting and supervising the implementation of the country packages by the country governments. COHO's powers also go beyond what is necessary for the performance of those tasks. For example, COHO has the task of establishing an implementation agenda with the national government. (see note 21)

It is then unclear whether the national government is still independently authorized to adopt such an agenda. In addition, COHO has the task of initiating, promoting and implementing projects and programs and can draw up action plans for this. Furthermore, COHO has the power to order the supply of goods or services and to participate in share capital, without the government concerned having control over this or having the means to prevent it. (see note 22) This also applies to granting and granting subsidies to citizens and participations in legal entities, even in the case of public companies. (see note 23)

In addition, COHO can cooperate with institutions and bodies of institutions of the European Union and other organizations under international law and with institutions and bodies of institutions of the Netherlands and other countries within the Kingdom with a development, financing, supervision or general administrative task. Where appropriate, COHO will draw up a cooperation protocol with the institution or organization concerned. In the alternative set-up that the Division outlines in point 4, in which more responsibility is left to the countries, it is obvious that they too could enter into such cooperation.

COHO thus has far-reaching powers that also belong to the national government. Thus competing responsibilities and powers arise. When it comes to drawing up the implementation agenda, a joint responsibility arises.

With the structure chosen in the proposal, it is insufficiently clear who is responsible for what. After all, both COHO and the national government are responsible and competent. The Division considers this to be problematic: COHO and the national government can thus get in each other's way, but a situation can also arise in which COHO and the national government start pointing at each other. This is all the more pressing now that COHO and the national government have to be accountable to various bodies. (see note 24) Moreover, a consequence of this design may be that the national government will experience less 'ownership', will feel less responsible for the implementation of the national package and will refer or refer to COHO in the event of any problems. That chance is further increased now that the countries have little influence on the composition of the COHO board.

These ambiguities and risks are not removed by the provision that, in the performance of its duties, COHO cannot exercise powers that are vested in a government body under the constitutional law of a country. (see note 25) The Division understands the intent of this regulation, but notes that it increases the lack of clarity identified above rather than removes it. After all, when it comes to powers relating to the realization of administrative or economic reforms, these are simply vested in (organs of) the land administration.

From this point of view, Article 4, second paragraph, means that COHO does not have any powers. This raises the question of when powers are vested in a government body. This uncertainty is certainly present where COHO's powers are concerned with subsidies and participations. A strict interpretation of this paragraph could mean that various powers that the proposal confers on COHO cannot be exercised by COHO at all. A flexible interpretation would quickly mean that Article 4, second paragraph, does not preclude the exercise of the powers given in the proposal, but that this paragraph then has no real meaning.

c. Relation to R(A)ft

One of the tasks assigned to COHO in the proposal is to institute stricter financial supervision of one of the countries, in agreement with the Council of Ministers of the Kingdom. This authority of COHO does not only apply if a country does not make sufficient efforts to comply with the obligations imposed on the country concerned by or pursuant to the proposed Kingdom Act, but also if, in the opinion of COHO, the country makes insufficient efforts to to fulfill the obligation under or pursuant to the R(A)ft. (see note 26) The enhanced supervision is exercised by the C(A)ft. If a compelling interest so requires, the Minister of the Interior and Kingdom Relations, in agreement with the Council of Ministers of the Kingdom and after the COHO and the Financial Supervision Board have been heard, may

In the R(A)ft, financial supervision is regulated by the Kingdom Council of Ministers on Aruba, Curaçao and Sint Maarten. The obligations for the countries are laid down in those Kingdom Acts. It also provides that the C(A)ft monitors compliance with obligations arising from the R(A)ft, applying the rules set by the R(A)ft for this purpose. (see note 27) One of the tasks of the C(A)ft is to assess whether a country is making sufficient efforts to comply with the obligations imposed by or pursuant to the R(A)ft. This raises the question of why it is necessary that COHO also has the power to assess whether the countries are making sufficient effort to fulfill their obligations under or under the R(A)ft. After all, the consequence of this is that two bodies supervise compliance with the standards in the R(A)ft,

In this regard, the Division further points out that assigning the same task to two bodies entails the risk of ambiguity and divergent judgments. It is unclear how the intensified supervision on the basis of the proposal and the issuing of an instruction on the basis of the R(A)ft relate to each other. Moreover, the independent position of the C(A)ft anchored in Article 7 R(A)ft and the division of responsibility as laid down in the R(A)ft with regard to the supervision of compliance with the budgetary standards.

These consequences are reinforced by the possibility for the Minister of the Interior and Kingdom Relations to institute stricter supervision in agreement with the Council of Ministers of the Kingdom. After all, in the R(A)ft it is up to the C(A)ft to assess whether there is a situation in which there is reason to issue an instruction and it is then up to the RMR to decide on the basis of an advice from the C(A)ft to decide to issue an instruction. These powers for the Minister of the Interior and Kingdom Relations interfere with the powers of the C(A)ft laid down in the R(A)ft.

Tightened financial supervision leads to an approval regime for all or part of the expenditure incurred by a country. (see note 28) According to the proposal, this approval regime does not have to be limited to expenditure incurred in the context of the implementation of the country packages, but can extend to all expenditure of a country. Moreover, the approval regime goes much further than the budget supervision regulated in the R(A)ft and relates to intended expenditure. On the basis of the R(A)ft, the C(A)ft only monitors the balance of government finances and thus allows the governments of the countries to choose which expenditure or income measures are taken.

Finally, the Division points out that countries will have to report to two authorities on virtually the same subject. In the view of the Division, this lays too heavy a claim on the countries' already limited implementation capacity.

The Division can imagine that it must be possible to take measures if problems arise during the implementation of the country packages. It is then obvious that COHO takes such measures. If there were separate grounds for the desire to increase the effectiveness of the R(A)ft, provisions should be made for this purpose in the R(A)ft itself, instead of mixing the two tracks currently proposed. .

d. Relationship COHO - Minister of BZK and government

According to the proposal, COHO appears to carry out its tasks with a high degree of independence. Large parts of the Framework Act for Independent Administrative Bodies have been declared applicable. (see note 29) This does not alter the fact that the proposal gives the Minister of the Interior and Kingdom Relations the authority on a number of important points to give instructions or to restrict or flesh out COHO's powers. For example, the Minister of the Interior and Kingdom Relations can determine how financial resources made available to COHO must be spent by COHO (see note 30) and the provision of resources can also be stopped or suspended if - in short - the Minister of the Interior and Kingdom Relations considers that the country concerned is making too little progress. (see note 31)

Furthermore, the Minister of the Interior and Kingdom Relations may, within the outlines described in a national package, after consultation with the relevant Ministers, give COHO an instruction regarding a plan of approach for the development and implementation of a project, program or measure by government bodies. , as well as provide guidance with regard to initiating, promoting and executing projects. (see note 32)

It appears from the above that COHO functions to a significant extent under the direction of the Minister of the Interior and Kingdom Relations. There are two restrictions in this regard: an obligation to consult with the relevant minister(s) of the country concerned, and the requirement that the minister must remain within the broad outlines described in a national package. The Department notes the following in this regard.

Although the Minister of the Interior and Kingdom Relations has an obligation to consult with the minister(s) concerned, he is not required to reach an agreement.

With regard to the country packages, it should be noted that they contain few or no concrete measures as yet. Nor are concrete objectives, for example in the area of ​​public finances, included. This means that the condition that the minister must remain within the outlines described in a national package also has little normative effect.

The foregoing means that the powers of the Minister of the Interior and Kingdom Relations are hardly limited. They cover the entire range of drawing up plans of approach, drafting, initiating and implementing projects, programs and measures, as well as their financing. This places the Minister of the Interior and Kingdom Relations not only above COHO, but also above the national administration of the country concerned. (see note 33) The powers assigned to the minister thus infringe the responsibilities and problem ownership of the countries.

e. Phasing out of the scheme

In principle, the law expires after 6 years. At the request of the Netherlands or one of the countries, this period can be extended by 2 years each time. (see note 34) The Netherlands and the countries can also agree that the law will expire earlier. However, neither the bill nor the explanatory memorandum address the question under which circumstances and on the basis of which facts an extension or early termination could be appropriate. This is relevant because the relationship between the Netherlands and the other countries was not always equally good during the preparation of this Bill of Rights and there seems to be a distrustful attitude on both sides. In such a situation it is all the more important to be clear on the grounds on which it will be decided that the objective of the proposal, namely to carry out reforms,

This question arises with this proposal because it differs from previous partnerships between the Caribbean countries and the Netherlands. (see note 35) In those cases, all responsibilities remained with the (national) government. In the proposal, however, a number of responsibilities are shifted to COHO and it must therefore be clear at what time these will be transferred back to the (national) government. (see note 36) Before this can be done, sufficiently concrete and tangible results must have been achieved. It is particularly important here that the living environment of the population of the three countries is structurally improved.

f. Conclusion

In the light of the foregoing, the Division considers the proposal in this form problematic. COHO's positioning and package of tasks and its relationship with other actors lead to a lack of clarity about the division of responsibilities and powers between different actors. The Division does not consider it advisable to compensate for the countries' lack of implementation power by making COHO (jointly) responsible for drawing up and implementing action plans. This does not strengthen the implementation power of the countries, weakens their commitment and personal responsibility and makes it more difficult to phase out the scheme. It must therefore be doubted whether it can reasonably be expected that a reform program will lead to success in the short and long term with the current set-up.

In the light of these comments, the Division recommends reconsidering the chosen set-up.

3. Relationship with the Staff Regulations

a. T er introduction

The Charter prescribes 'mutual consultation' when it comes to a Consensus Kingdom Act. (see note 37) The Division notes that these consultations have taken place and that the governments of Aruba, Curaçao and Sint Maarten have agreed to submit this proposal to the Division. The Division therefore assesses the proposal as it was presented to it, namely as a Consensus Act.

b. Statutory principles

As can be seen from the foregoing, the approach chosen by the government poses risks to the effectiveness of the reforms. This is partly due to the fact that the national institutions themselves bear only a limited degree of responsibility for carrying out the reforms. The powers of COHO overlap with the powers of the national governments. This undermines the effectiveness of the approach. In addition, COHO is largely under the direction of the Minister of the Interior and Kingdom Relations, who in a certain sense will be placed above the governments of the countries.

The above aspects are also relevant from the point of view of the Staff Regulations. The fact that in this specific case there is a consensus Act, and thus a political compromise, does not affect the principles underlying the constitutional structure of the Kingdom. The principle of the autonomy of the countries and in particular the restraint that the Kingdom government and the Netherlands as the largest country must exercise in limiting the countries' own responsibility is an important factor in this regard (see note 38).

In that light, the Division notes that it is insufficiently clear from the explanation why the limitations of that individual responsibility, as is now provided for, and the far-reaching influence of the Minister of the Interior and Kingdom Relations, are necessary and proportional in the light of the principles of the Statute. The Department's earlier observation is important in this regard that the powers of COHO go beyond what is necessary for the performance of its tasks.

The Division recommends further consideration of the bill on this point.

c. Binding to international economic and financial agreements

As described above, COHO may cooperate with institutions and bodies of institutions of the European Union and other organizations under international law. It does not appear from the proposal that any consultation with the country concerned will take place in this regard prior to the decision to enter into such cooperation. The Department realizes that, formally speaking, it is COHO, and not the country involved, that makes these agreements. In view of the tasks of COHO, however, it is obvious that the country concerned is also actually bound by these agreements. It is not clear from the explanation how this relates to the fact that the Caribbean countries can declare that they do not wish to be bound by an international economic and financial agreement. (see note 39)

The Division recommends that the above be discussed in the explanatory notes.

d. Powers of the governors

On the basis of the bill, COHO can in certain cases advise the Council of Ministers of the Kingdom to make a provision by virtue of the Charter. (see note 40) The explanatory statement rightly states that this proposal does not interfere with the powers of the governor on this point. After all, the governors have independent powers in the context of their task of supervising, among other things, compliance with Kingdom Acts, including a Kingdom Act such as a proposal to that effect. (see note 41) Given that the Governor will therefore also have to monitor compliance with this law, the powers of the Governor and COHO may overlap in this regard.

As noted above about the relationship between the C(A)ft and the COHO, such an overlap of powers entails the risk of ambiguities, overlapping powers and divergent judgments. In concrete terms, this can mean, for example, that the Governor adopts a national ordinance or national decree, and therefore does not use his authority not to adopt it because of conflict with higher law, while the COHO sees this national legislation as a reason to grant a provision by virtue of the Charter. to request.

The Division recommends that further attention be paid to this in the explanatory notes and that the proposal be amended if necessary.

4. What is the need for?

The points above discussed bottlenecks and possible undesirable consequences of the currently proposed approach that entail risks for its effectiveness. This raises the question of a different approach, which has less such risks, which could be a better approach. Below, the Department provides some information in this regard and outlines some contours.

a. Credible, feasible and flexible

It is a great advantage that the proposal aims to achieve the three goals (administrative reforms, sustainable public finances and strengthening the resilience of the economy) in conjunction. At the same time, it must be recognized that these goals can be at odds with each other and can (temporarily) frustrate each other. For example, strengthening economic resilience and implementing reforms, certainly in the shorter term, can lead to tension with the objective of achieving sustainable and sustainable public finances. Measurement and coordination are therefore necessary to arrive at a balanced approach. This requires flexibility.

The Division notes in this regard that the proposal does not provide for an adjustment of the budget standards in the Rft. (see note 42) This raises the question of whether sufficient flexibility has been built into the law to arrive at the required dimensions in practice. The Division deems it desirable from this point of view to look at all of the measures that will apply (in any case the liquidity support, the R(A)ft and the present proposal).

b. Ownership

Furthermore, the Division considers 'ownership' and commitment of the countries to be crucial for the success of this approach. This is the only way to achieve fruitful cooperation and achieve sustainable results that will last even after the program has ended. In recent decades, the implementation power has been problematic in the implementation of the various measures.

As discussed above, the Division does not consider it useful to try to compensate for this lack of implementation power by making COHO (partly) responsible for drawing up and implementing action plans. This does not strengthen the implementation power of the countries. The responsibility for drawing up and implementing their own action plans should lie with the countries themselves. This does justice to the individual responsibility of the countries. This is also in line with the practice and experiences of international organizations such as the IMF and the European Union's recovery instrument set up in connection with the corona crisis. Strengthening the implementation power of the countries themselves is one of the main goals of the measures to be taken,

This does not alter the fact that COHO has an important role to play in strengthening the administrative power of the Caribbean countries. It is therefore important that COHO can support the country governments in drawing up projects, programs and measures and in implementing the projects, programs and measures agreed by the countries. At the same time, this will require countries to be open to COHO's proposals and, where possible, to make the requested and necessary efforts to implement the necessary reforms and strengthen governance. This may also be asked of the countries where the financial resources for the projects concerned are also supplied via COHO.

Only if COHO can fulfill its important role and the Caribbean countries accept that role will a fruitful cooperation between COHO and the national governments be possible. Linking liquidity support and support in tranches to achieving the objectives to be achieved is an important incentive to actually achieve those objectives. If the implementation of projects, programs or measures is insufficient, COHO may suspend support. (see note 43) In the unlikely event that this does not lead to the intended results and it turns out that, despite this support and the appropriate use of the power to suspend, insufficient progress is made to increase the administrative power and to fulfill the responsibilities independently in the long run, ultimately more compelling measures, whether initiated by COHO or not, are unavoidable. (see note 44)

In view of this, the Division considers it appropriate that the following tasks be assigned to COHO:

a) Approve the implementation agenda and the plans of approach of the countries for the implementation of projects, programs or measures, with clear performance requirements to which the availability of financial resources are linked over time;

b) Monitoring the progress of implementation by the countries;

c) Technical and other assistance support, for which COHO has its own budget;

d) Supervising the achievement of performance requirements, enabling the provision of financial resources.

In this context, the composition and appointment of the COHO board also deserves attention. In view of the role of the Netherlands and the role of COHO, a heavy Dutch stamp on COHO is understandable. However, support, ownership and commitment from the countries as well as insight into the local situation can be increased by representation in the board of COHO that finds support among the Caribbean countries. The importance of support from the countries increases as the tasks of COHO overlap more with tasks that also belong to the national governments. Under the proposed regulation, one of the members of COHO will require demonstrable affinity with the Caribbean part of the Kingdom. The question is whether this sufficiently ensures the necessary support from the Caribbean countries.

c. Clear frameworks

Support in the manner outlined is, of course, not without obligation. It goes without saying that conditions are attached to (financial) support and that compliance with those conditions and the (progress of) implementation of the measures to be taken are closely monitored. In this respect, COHO has an important role to play in monitoring the progress of the plans and programmes, providing support in the form of technical assistance and releasing financial resources as the action plans are implemented.

But that does require a clear approach. The Section points to the practice in IMF credit programs as well as in the context of the European Union (see note 45) where extra financial support is linked to pre-agreed performance indicators. It must be prevented that countries have to focus on moving targets in order to obtain support and financial support. This risk is high with the approach now followed, in which the measures in the country packages are formulated in a very open manner and COHO has a lot of room to flesh out the details. This is further enhanced by the intervention options of the Minister of the Interior (whether or not in response to reactions from the States General).

With an approach as outlined above, the concurrence between the proposal and the R(A)ft, between COHO and Cft, as outlined in point 3b, can be avoided in a simple manner. COHO can then focus on monitoring and support through technical assistance and release of funding as action plans are implemented. The C(A)ft continues to focus on maintaining a balanced budget.

d. The importance of differentiation

The proposal concerns all three Caribbean countries of the Kingdom. Each of these countries has its own history and its own administrative culture. There are also differences with regard to, for example, the implementation capacity and reforms that have already been implemented, for example in response to the Growth Agreement (Curaçao), protocols on financial supervision (Aruba), liquidity support after Hurricane Irma (Sint Maarten) and the experiences with the reconstruction facility established in cooperation with the World Bank. The challenges are partly the same, but it is important to recognize that the reform agenda is different for each of the three countries. COHO will therefore have to be enabled to differentiate in the performance of its tasks.

As explained above, the submitted proposal only applies to Curaçao. No attention has been paid to the foregoing in the explanation. In the letter about the expansion to Aruba it is stated on this point that the backgrounds differ per country and that the explanation on this point will be supplemented, but that these adjustments will be minimal because the differentiation will mainly be discussed in the various country packages. This point is not mentioned at all in the letter about the connection of Sint Maarten. The Division considers it insufficient that the necessary differentiation is only considered fundamentally in the national packages.

5. Data Protection

Under the bill, all government bodies and public enterprises are obliged to provide, upon request, data and information that COHO needs to carry out its duties. (see note 46) It is not clear from the explanation whether this also concerns personal data. If this is the case, the processing of these personal data by COHO is subject to the GDPR. After all, it is established in the European part of the Netherlands and has legal personality under Dutch law.

In that light, the Division notes that provisions on data processing, including the appointment of a controller, are missing in the proposal. In addition, the explanation does not discuss the possible transfer of personal data by COHO to the Caribbean countries. If this is the case, the GDPR regime for transfers to third countries applies. (see note 47)

Since the European Commission has not taken an adequacy decision with regard to the Caribbean countries of the Kingdom, and the government has indicated that it cannot simply be assumed that such a level of protection can be offered in the Caribbean countries, the controller must provide appropriate safeguards. (see note 48) This requires data subjects to have enforceable rights and effective means.

The Division recommends discussing the processing and transfer of personal data in the explanation and adjusting the proposal where necessary.

6. Conclusion

The Department endorses the chosen approach of linking aid to the Caribbean countries with a reform program to make the economies and public finances of the countries sound, strengthen public administration and improve the conditions of the populations of Aruba, Curaçao and Sint Maarten. .

However, the Division does not consider the way in which this approach has been elaborated in the proposal appropriate. COHO's positioning and package of tasks and its relationship with other actors lead to a lack of clarity about the division of responsibilities and powers between different actors.

The Division does not consider it advisable to compensate for the countries' lack of implementation power by making COHO (jointly) responsible for drawing up and implementing action plans. This will not strengthen the implementation power of the countries, affect their own responsibility and ownership and make it more difficult to phase out the scheme.

It must therefore be doubted whether, with the current set-up, it can reasonably be expected that a reform program will lead to successful results in the short and long term. Partly because of this, questions also arise about the compatibility with the constitutional structure of the Kingdom laid down in, among other things, the Charter, in which the autonomy and individual responsibility of the countries are important starting points.

On the basis of the information given in this advice, the Division is therefore of the opinion that the Kingdom Act proposal is inadequate. It concludes that the bill must be reconsidered and therefore cannot be submitted in this form to the parliaments of the countries of the Kingdom.

The Advisory Division of the Council of State of the Kingdom has a number of comments on the draft Kingdom Act and advises not to submit the draft Kingdom Act to the House of Representatives of the States General, the States of Aruba, that of Curaçao and of Sint Maarten, unless it is modified.

The Vice-President of the Council of State of the Kingdom

Annex I: questions from Curaçao

The general question included in the request for advice has been further elaborated in the following specific questions:

1. Is Article 2, fourth paragraph, read in conjunction with Articles 22 and 23 of the Framework Act for Independent Administrative Bodies, and the lack of involvement on the part of Curaçao in that decision-making, with Article 37 and Article 38 of the Charter?

2. Is the composition and manner of appointment of the members of the Body as referred to in Article 7(1) in line with Articles 37 and 38 of the Statute?

3. Is Article 6 of the proposal related to Articles 24 to 28 of the Statute for the Kingdom?

4. Is Article 17, second paragraph, related to the budget law of the States of Curaçao with regard to the expenditure of liquidity support, referred to in Article 17, first paragraph, under b?

5. Is the lack of involvement on the part of Curaçao in the decision-making, as referred to in Article 22 and Article 27, related to Article 28 of the Constitution of Curaçao and in particular the third paragraph thereof (ministerial responsibility)?

6. Is the lack of provisions for the independent review of the decisions referred to in Article 17(4) and (5) and Article 23 in accordance with the principles of corporate governance as referred to in Article 43 of the Charter?

7. Do Article 4, first paragraph, under d, Article 24 and Article 33 of the proposal relate to the legal order for the Kingdom provided for:

a) Articles 50 and 51 of the Statute, in particular with regard to the granting of the authority rather than the Kingdom Government to decide on the use of an instrument of higher supervision; and

b. Articles 15, paragraph 1, 20 and 21 of the Regulations for the Governor.

8. Relationship:

a. Article 33, first paragraph, with regard to non-compliance with obligations under the Financial Supervision Act as a basis for considering the introduction of stricter financial supervision, and

b. the designation of Article 41, second paragraph, of the proposal as a lex specialis (see explanatory memorandum) in relation to the Financial Supervision Act, is based on the principle of consensus on a mutual arrangement as referred to in Article 38 of the Charter that is the basis is it due to the realization of the Kingdom Act on financial supervision? Is it advisable to apply Article 4, second paragraph, of the Financial Supervision Act instead of including Article 41 in the Kingdom Act proposal? As a result, a special instruction can be given to the Financial Supervision Board to hear the Body when assessing an application for a loan as referred to in Article 16 of the Financial Supervision Act.

Further report (reaction to the advice) of 7 February 2022

2. Effectiveness

a. I ntroduction

It is good to hear that the Division appreciates the intentions behind the present proposal and agrees with the legal basis on which it is based. I am also pleased that the Department considers it self-evident that financial support from the Netherlands is linked to a reform programme. This conditionality is indeed an important pillar of the proposal and is not at odds with Article 36 of the Staff Regulations.

The Division rightly notes that cash flows are unclear and the extent to which there will be loans or gifts. In response to this, I amended Article 18 (old) of the bill and paragraph 3.4 of the explanatory memorandum. The proposal explicitly mentions two financial flows: liquidity support directly to the country (loan) and financing COHO activities (gift). In addition, there is a financial flow that does not go to the countries via COHO, but directly from a Dutch departmental budget. This is the case, for example, in the context of the theme, in the country packages, 'Strengthening the rule of law'.

b. Ratio COHO - government

The Aruba Division and Advisory Council point out that the granting of aid is not based on a clear plan on which the aid to recipient countries is settled. I share the opinion that the country packages are indeed too little specific in parts. In response to this, I have placed greater emphasis on the role of the implementation agenda in the legislative proposal and explanatory memorandum. This is a joint agenda of COHO and the countries in which concrete results in the form of performance indicators (targeted results, as indicated in the implementation agenda) are agreed. The financial support is calculated on this basis. In that light, I do not accept the Department's recommendation to have the implementation agenda set unilaterally by the Minister of AZ of the country.

I share the opinion with the Division and the Advisory Councils that COHO has far-reaching powers. This creates competing and unclear responsibilities between COHO and the national government, making it insufficiently clear who is responsible for what. A consequence of this set-up may be that the democratic embedding of the reforms is insufficient and the national government experiences less ownership. In response to this criticism, I have limited COHO's tasks in Article 4 to supporting and monitoring the reform programme. The b and c tasks in Article 4 have therefore been dropped and have been included as supporting powers. COHO can only carry out projects if this has been agreed with the countries in the implementation agenda or included in the action plans. By limiting these tasks of the COHO, the need for having its own legal personality disappears in order to carry out private acts independently. Article 2 paragraph 3 has therefore been deleted. In addition, in Article 22 (new Article 26), I have adopted the Department's recommendation to have the national administration and not the COHO adopt the plans of approach. COHO only approves the action plans. In my view, these changes have strengthened the countries' ownership and responsibility for the reforms. In the implementation agenda, the countries make agreements with COHO about the concrete goals to be achieved and the results of the reforms. The elaboration and implementation thereof are the responsibility of the countries themselves.

c. Relation to R(A)ft

The Division makes several critical comments about COHO's task, in agreement with the Kingdom Council of Ministers, to be able to institute stricter financial supervision of a country where appropriate. The objections to this task and the associated procedural regime are, according to their advice on the COHO proposal, shared by the Advisory Councils of Aruba, Curaçao and Sint Maarten. Furthermore, there are also doubts about the enhanced financial supervision by the governments of the Caribbean countries and by the College (Aruba) financial supervision, the body designated in Article 35 (old) of the proposal to exercise the supervision in question. As a result of this, it was decided to drop the task of establishing stricter financial supervision and the accompanying regime. Article 4, first paragraph, under d, and Articles 35 to 41 (old) have therefore been deleted from the proposal. In line with this, Article 43 (loans) has also been removed from the proposal.

The relevant task of the COHO and the associated powers did meet a need: namely, to be able to guarantee that Aruba, Curaçao or Sint Maarten do not make or fail to spend, so that compliance with the reform agreements in the national package and the implementation agenda is structural or serious. is made more difficult. In order to achieve this goal, the Netherlands, Aruba, Curaçao and Sint Maarten have agreed, instead of the deleted stricter financial supervision, to extend the existing budget supervision to the Board (Aruba) financial supervision, as contained in the Kingdom Act on financial supervision Curaçao and Sint Maarten and the National Ordinance Aruba Financial Supervision, to be expanded or at least given further shape. A number of provisions are included in this draft Kingdom Act for this purpose.

These provisions are not yet reflected in the amended proposal. Now that a new path is being taken with this amendment, the four countries consider it wise to include it in a Memorandum of Amendment and to submit it to the Division for advice. The intention is to submit this memorandum of amendment to the House of Representatives and Parliament of Aruba, Curaçao and Sint Maarten at the same time as or soon after the proposal has been submitted.

d. Relationship COHO - Minister of BZK and government

In its advice, the Division concludes that in the proposal there is a field of tension between the independence of COHO on the one hand and the possibilities of the Minister of the Interior and Kingdom Relations to manage COHO on the other. According to the Division, these steering options - in particular the powers to designate in Articles 23 and 28 (old) of the proposal - not only affect the independence of COHO, but also the responsibilities and problem ownership of the Caribbean countries. The Advisory Councils of Aruba, Curaçao and Sint Maarten also express their doubts about this. In view of the principle of ministerial responsibility, the Advisory Council of Aruba argues,

During the talks between the governments of the four countries, the above concerns of the advisory boards were discussed in detail. In order to achieve the aim of the proposal, it is considered of great importance by the governments, and therefore also by me, that sufficient distance is built into the proposal between the Ministry of the Interior and Kingdom Relations on the one hand and COHO on the other. In concrete terms, the comments of the Division and the Advisory Councils have resulted in Articles 23 and 28 of the proposal being cancelled. This deletion also already followed from the amendments made to the proposal in response to the comments of the advisory bodies on the allocation of powers to COHO. Now that COHO no longer sets plans of action and no longer has the task of,

The powers to designate in Articles 23 and 28 (old) of the proposal have been replaced by another powers to designate. This authority gives the Minister of the Interior and Kingdom Relations the opportunity, after consultation with the Minister of General Affairs of the country, to adjust COHO if the latter does not comply with the agreements between the governments in a national package sufficiently or incorrectly. implementation agenda threatens to translate (Article 6(4)). The inserted power to designate thus has a framed character, which is strongly geared to legality, which, in addition to the Minister of the Interior and Kingdom Relations, must also provide assurance to the governments of the countries. After all, the national package is a joint upper limit. The Minister of the Interior and Kingdom Relations can only issue instructions after consultation with the Minister of General Affairs of the country concerned and before establishing the implementation agenda. In this way, the above recommendation of the Advisory Council of Aruba is partially followed.

e. Phasing out of the scheme

The Division has pointed out that it is insufficiently clear under what circumstances and on the basis of which facts an extension or early termination could be appropriate. Although I can well imagine the background of this recommendation, in this specific case, after weighing up the interests, it was decided not to follow the advice. Ultimately, the governments have found it desirable to leave open the political and administrative scope to opt for extension or early termination. It is, however, logical that such a choice is made, as the Division rightly points out, on the basis of whether the objective and agreements associated with the proposal have been achieved and complied with. The implementation report is an important indicator in this regard.

In this context, it is still relevant that an evaluation is issued after three years on the effectiveness and effects of the law. In such an evaluation, leads can be found for extending or premature termination of the Act. However, the basic principle remains that the law will cease to exist after six years. Incidentally, article 34 (new) of the proposal has been amended in the sense that, in addition to the premature termination of the law for the Netherlands and one or more Caribbean countries, its extension is also subject to the consent of the States General and the States. Extension no longer takes place by Royal Decree but by law and national ordinance.

f. Conclusion

It appears from the above reactions that I have let the critical comments of the Department and the Caribbean advisory boards on the foundation of this proposal take effect. In mutual agreement with the governments of Aruba, Curaçao and Sint Maarten, this has led to several major changes to the proposal. In summary, as a result of the aforementioned comments, the power structure of the proposal has been changed, the relationship between the Minister of the Interior and the COHO has been reshaped and the role of COHO in the context of financial supervision has been drastically weakened. Taken together, these changes should allow the Caribbean countries to show greater ownership of the reforms and make COHO better equipped than before to support and monitor the countries in doing so.

3. Relationship with the Staff Regulations

b. Statutory principles

In the view of the Section, the explanatory memorandum to the original proposal does not sufficiently reflect the dimension of the Statute. The Division rightly states that the principles in and under the Statute are also leading in consensus-rich legislation. The explanatory memorandum to the amended proposal therefore focuses more emphatically than before on the political context in which COHO will operate. For this, see paragraph 2 of the general part of the explanatory notes, and in particular paragraph 2.1.

c. Binding to international economic and financial agreements

The Division has advised that in the explanatory memorandum, consideration should be given to the relationships between the country concerned, COHO and the international institutions and bodies of international institutions with which it cooperates. The Advisory Councils of Aruba, Curaçao and Sint Maarten also pay attention to this, in view of the relevant provisions in the Charter. I can place this recommendation well. After all, it is not inconceivable that a Caribbean country already has contact with international and other external parties with whom COHO in turn wishes to collaborate. This advice has been incorporated in both the proposal and the explanation.

In line with the advice of the Division, it has been decided that it is indeed obvious that there should be contact between COHO and the country concerned prior to international cooperation. During these consultations, for example, the structure of the collaboration can be discussed, also with a view to mutual relationships. The legal text (article 8, first paragraph, new) now states that COHO can only enter into partnerships with international institutions and bodies after agreement with the country concerned. This guarantees that the possibility of entering into international cooperation is looked at with respect for everyone's position.

d. Powers of the governors

Article 25 of the original proposal stated that in certain cases COHO may advise the Council of Ministers to make a provision by virtue of the Charter. The Division, as well as the Advisory Council of Aruba, warns that this authority may cause an undesirable overlap with the powers of the Governors of the Caribbean countries under the Governor's Regulations. I recognize this risk. It has therefore been decided to delete the relevant provision.

4. What is the need for?

a. Credible, feasible and flexible

The Division is right that the proposal does not provide for an adjustment of the budget standards in the Rft. The Division therefore wonders whether sufficient flexibility has been built into the proposal to arrive at the required dimensions in practice. I believe that this is certainly possible. I opted for a realistic approach in the proposal for the Kingdom Act. Measures will be implemented step-by-step over the next six years, taking into account what is possible in practice. In that context, in the legislative proposal and the explanatory memorandum, I have placed strong emphasis on the role of the implementation agenda. In the implementation agenda, the measures are viewed in relation to each other and the dimensions are examined. In the implementation agenda, COHO and the national governments make agreements about which measures can be implemented first and which measures require more time or must be implemented less ambitiously, for example because of implementation capacity or financial constraints. In addition, strengthening tax collection and financial management in each country are important reform measures to free up more budget for other measures. Finally, the implementation agenda is periodically updated, precisely to take into account possible bottlenecks in implementation and other developments. In addition, strengthening tax collection and financial management in each country are important reform measures to free up more budget for other measures. Finally, the implementation agenda is periodically updated, precisely to take into account possible bottlenecks in implementation and other developments. In addition, strengthening tax collection and financial management in each country are important reform measures to free up more budget for other measures. Finally, the implementation agenda is periodically updated, precisely to take into account possible bottlenecks in implementation and other developments.

b. Ownership

In my response to points 2b and 2d, it has already been extensively discussed how the governments of the four countries have dealt with the different opinions of the Department and the Advisory Councils on the issue of ownership. For a response to the above, I therefore refer to these parts of the further report. However, I would like to comment here on the Department's comment regarding the composition and appointment of the COHO board. This is an understandable comment by the Department, which also finds much resonance in the advice of the Caribbean advisory boards.

I have taken note of these comments and, on behalf of the Dutch government, have declared myself prepared, in discussions with the Caribbean countries, to make radical changes to the composition and appointment method in the proposal. This has resulted in two largely new provisions: Articles 9 and 10 of the proposal. In these provisions, a balance has been sought between, on the one hand, the principle that COHO is a Dutch administrative body that is financed from Dutch resources, and, on the other hand, the principle that COHO is oriented in its activities to Aruba, Curaçao and Sint Maarten and therefore also on support there. must be able to calculate.

The amended procedure did not want to alter the Dutch wish to recruit board members via an open procedure. The proposal therefore does not go along with the recommendations of the Advisory Councils of Aruba and Sint Maarten to give the Caribbean countries their own representation in COHO and to expand the number of members to five. In view of the nature of the tasks of COHO and the independent position it occupies with regard to the authorities on both sides of the ocean, it is considered indispensable that COHO has no 'Caribbean' or 'Dutch' members, in the sense that these members are registered as representatives of the countries concerned. Only the appointment criteria laid down in Article 9, second paragraph, are decisive for an appointment to COHO. Representativeness is built into those criteria, because the provision requires that at least two members of COHO, including the chairman, have demonstrable affinity with the Caribbean part of the Kingdom. However, that affinity can also remain from years of relevant work experience of a person in the Caribbean, without immediately having roots in this area. At the same time, such roots can of course also be an advantage to be eligible for appointment.

The above balance has been further enhanced in the appointment procedure by introducing two different tracks, which provide that the nomination of two members, including the chairman, is preceded by a procedure in which the Netherlands takes the lead but the Caribbean countries have a decisive vote (article 9, fourth paragraph, under a) and on the nomination of a third paragraph, one in which the Caribbean countries have the lead but the Netherlands has a decisive vote (Article 9, fourth paragraph, under b).

In connection with the appointment of members of the COHO, the Advisory Council of Curaçao notes that certain requirements for this are missing. To this end, the regulation of incompatibilities in Article 13 (new) has been adjusted. It has been added to this that a member of COHO may not also be a children's ombudsman and may not be a spouse or relative by blood or marriage up to the second degree of a minister, state secretary, member of the States General or of the States of Aruba, Curaçao or St. Martin. Article 13 also provides that a former minister, state secretary, member of the States General or of the States of Aruba, Curaçao or Sint Maarten cannot be appointed as a member of COHO within five years after the termination of his term of office.

c. Clear frameworks

In its advice, the Division emphasizes the importance of clear frameworks within which the Caribbean countries implement the agreed reforms. She warns of the risk of moving targets, which countries would have to target in order to qualify for financial aid. The Advisory Councils also comment critically on the design of the central legal provision in this regard, Article 18 (old).

In the various discussions with the countries about the further report, as well as from the experience already gained in the context of the implementation of the country packages, it has become clear to me that these comments make sense. It has therefore been decided by mutual agreement to thoroughly review the relevant provision. The starting point in this new provision - Article 22 - is now the approach to which the Division refers in its advice, whereby financial support is linked to agreements made in advance. As explained in response 2b, these agreements are primarily included in the implementation agendas. The countries are therefore periodically assessed on this basis. This prevents the Netherlands from being able to set new conditions unilaterally. The joint implementation agenda of COHO and the national government is the guiding principle for assessing progress and allocating financial support. It is also important whether the government bodies and companies involved have provided the countries with the cooperation that is requested in Article 24. The implementation report plays an important role in assessing whether the countries have complied with the obligations they have entered into.

If a country complies with its periodically established agreements, the Netherlands is obliged, through the Minister of the Interior and Kingdom Relations, to provide pre-agreed financial resources. These resources can be provided, inter alia, in the form of liquidity support and in the form of financing from COHO, which can then deploy these resources in the context of the support it provides. Liquidity support will no longer be provided through COHO, but will go directly to the country concerned in the modified form of the proposal.

d. The importance of differentiation

I share the Department's view that there are major differences between the countries and that there should be room for differentiation. The Division considers it insufficient that the necessary differentiation is only discussed with the national packages. I take the Department's criticisms to heart in the following way. First of all, Article 6 paragraph 3 adds that an implementation agenda takes into account the specific circumstances of the country. Secondly, Article 8 has been amended that not one, but two of the three members of the COHO must have demonstrable affinity with the Caribbean part of the Kingdom. Also - as already explained in 2b - the countries' say in the appointment of members has been increased. Finally, in the explanatory memorandum in section 3.

5. Data Protection

The Division recommends clarifying in the explanatory memorandum whether the obligation in Article 24 (new) of the Kingdom Act proposal may also apply to personal data. I agree that this should be made clear in the explanation. The explanatory memorandum therefore states that this may indeed be the case (general part, paragraph 5). It also discussed the applicability of the General Data Protection Regulation, who the controller is and the possible situation in which COHO transfers personal data to countries. I do not consider it necessary to include this information in separate provisions in the proposal.

6. Conclusion

The Division's conclusion that the proposal requires reconsideration and cannot be submitted to the parliaments of the Kingdom in this form has been taken to heart and has resulted in the proposal being amended in several fundamental parts. I have explained these changes in detail above. They are the fruit of months of intensive government-level talks between the four countries of the Kingdom. Consensus has been reached with regard to the result. The proposal is now ready for submission.

7. Advices of the Advisory Council of Curaçao, Aruba and Sint Maarten

The opportunity was taken to explain what further changes have been made to the draft Act and the Explanatory Memorandum, mainly in response to the advice of the Advisory Council of Aruba, the Advisory Council of Curaçao and the Council of Advice from Sint Maarten. Where specific recommendations have been made by the Councils on the subjects mentioned that are not covered by the Council of State, these are listed below and it is explained what has been done with them. In addition, the various advices are discussed separately insofar as they concern subjects that have not been discussed in the advice of the Council of State.

a. Position States

The remarks of the Advisory Councils with regard to the role of the Parliament have led me to tighten up various aspects of the Kingdom Act proposal and the explanatory memorandum. For example, section 2.1 of the explanatory memorandum devotes more extensive attention to the political context in which COHO will operate. Although in a general sense it already applies that the scope of COHO's tasks and powers has been limited as a result of the advice of the Council of State and the Councils of Advice, I can imagine that active involvement of the States is still desirable. Some of the advice of the Advisory Councils is aimed at the national bodies themselves. In that context, I note that the power of States remains intact to ask their governments for information and to hold them accountable for what they do and fail to do with regard to COHO, the country packages, the implementation agenda and any plans of approach. The governments of the countries can also actively involve the States of their countries.

This does not alter the fact that the States can also be assigned a role in the Kingdom Act itself on crucial aspects. In the current proposal, this is provided for by the obligation for COHO - if the States of a country express the wish to do so - to provide information once every quarter in a meeting with the States concerned. The third paragraph of article 5 of the proposal introduces a mandatory prefix of the land packages to the States of Aruba, Curaçao and Sint Maarten. In the event of any amendments to the national packages, the Parliament concerned will therefore be given the opportunity to inform the relevant Minister of General Affairs and the Minister of the Interior and Kingdom Relations of wishes and objections.

b. Institution and setup COHO

The Advisory Council of Aruba recommends, with reference to the Instructions for Regulations, not to refer to Dutch legislation with regard to the establishment and organization of the COHO, but to lay down rules in the proposed Kingdom Act itself. This is because otherwise there is a risk that lower regulations (Dutch legislation) will also be amended by amending lower regulations (national legislation). I can place the recommendation of the Advisory Council of Aruba well. However, it was decided not to take her over. The practical advantage of being able to build on already existing provisions with regard to Dutch administrative bodies outweighs the rather theoretical risk that the legal position of COHO will be unilaterally changed by the Dutch legislator.

c. Annual report and implementation report

The Advisory Council of Curaçao has some comments on the provisions in the proposal regarding the annual report and the implementation report. The Council is right that the term 'management' is confusing. That is why the term has been changed to 'governments'. Moreover, now that COHO's legal personality has lapsed, the proposal no longer refers to 'management' but only to COHO.

In response to the comment of the Advisory Council of Curaçao about the lack of a term for expressing an opinion in Articles 16 and 17, I can answer that the explanation of these articles has been adjusted: it now states that COHO of General Affairs must set a reasonable term. If no opinion is given within this reasonable term, COHO can send the annual report or the implementation report.

By declaring that Article 18 of the Framework Act for Independent Administrative Bodies applies, the proposal ensures that the annual report is also sent to the States General. Furthermore, Article 16, first paragraph, itself provides that the document is also sent to the governments of the Caribbean countries.

d. Information exchange

The general part (section 5) as well as the explanation of Article 24 of the Kingdom Act proposal has been expanded partly in response to the comments of the Advisory Councils and Curaçao and Aruba. It discusses in more detail both the data and information that may be requested by COHO, as well as the limitations that apply to the obligation to provide the data and information. In addition, a second paragraph has been added to Article 24 of the Kingdom Act, about the obligation for COHO to observe the confidentiality provisions in the country concerned.

e.  Legal

protection The Advisory Councils of Aruba and Curaçao draw attention to the theme of legal protection. In the original proposal, this was only offered against COHO subsidy decisions and against the introduction of enhanced financial supervision by COHO. According to the Advisory Council of Aruba, this legal protection should be extended to other decisions of the COHO. This Advisory Council also recommends setting up a body or procedure that can mediate between parties about differences of opinion in the implementation of the national package and the implementation agendas. The Advisory Council of Curaçao considers some procedural aspects of the legal protection procedure in the context of subsidy granting and of the crown appeal procedure.

I agree with the Advisory Council of Aruba that it is desirable to extend the scope of legal protection to other decisions of COHO. Therefore, legal protection has now also been opened up at the Division in the event of disputes about COHO's decision-making in the sphere of supervision (Articles 26 and 27 of the proposal). However, now that stricter financial supervision has lapsed, it is no longer necessary to provide a provision for this in the proposal. The extended budget supervision, which will be added to the proposal by a memorandum of amendment, is in line with the legal protection contained in the Kingdom Act on financial supervision and the National Ordinance on Aruba Financial Supervision. In view of this, it has been decided to declare these provisions - Articles 26 and 27 and Articles 24 and 25 respectively - also applicable mutatis mutandis to disputes regarding the decision-making by COHO. This has been done in Article 28 of the proposal. The proposal does not provide any legal protection against decision-making by the Minister of the Interior and Kingdom Relations in the context of Article 22.

The recommendation of the Advisory Council to add a procedure for mediation or mediation to the proposal will not be adopted. I do not consider such a procedure appropriate for the type of dispute that may arise in the relationship between COHO and the country bodies involved in the reforms. In addition, the proposal provides for both parties to be heard in various places. This creates space to prevent disputes.

I understand the concerns of the Advisory Council of Curaçao about the lack of the possibility of objection in Article 32 (new). However, it was decided not to include this option. The need for legal protection is sufficiently met with the possibility of appeal to the Court of First Instance and to the Joint Court. It would not improve the effectiveness of the proposal if COHO, in addition to its existing tasks, also had to consider objections to subsidy decisions. Article 1 (new) of the proposal states that 'decision' must also be understood to mean the rejection thereof.

It is true that the explanatory notes incorrectly refer to an administrative appeal. This has been adjusted accordingly. This does not apply to the recommendation of the Advisory Council of Curaçao to opt for a procedure other than the crown appeal and in any case to extend the appeal period to 30 days. In the inter-administrative relationships within the Kingdom, the crown appeal has proved to be an adequate and satisfactory procedure for years, especially now that the Kingdom Council of Ministers cannot disregard the Division's judgments based on lawfulness. Finally, an appeal period of thirty days is not considered desirable in view of the limited duration of the Kingdom Act and the pace of reforms. Two weeks is a reasonable period for lodging an appeal.

f. Evaluation

It has been decided not to explicitly state in Article 33 (new) that the evaluation report is sent to the governments of the countries. Article 33(3) provides that the evaluation committee reports to the Kingdom Council of Ministers, which is formed by the four countries of the Kingdom.

The recommendation of the Advisory Council of Sint Maarten about increasing the number of members of the evaluation committee has been adopted. This committee now consists of five members, with separate representation for each of the three Caribbean countries and a chairman appointed by consensus.

g. Court of Audit

's comments In a letter dated 2 February, the Netherlands Court of Audit submitted a number of recommendations to me with regard to the proposal, as it was sent to the Advisory Division of the Council of State of the Kingdom. I request that you enclose a copy of this letter with the bill as it is sent to the States General and the States.

In brief, the Court of Audit draws attention to the following three issues with its recommendations: 1) the accountability and supervision arrangement in the proposal, or the lack thereof, where COHO tasks are funded from budgets other than the BZK budget; 2) the presence of checks and balances in COHO's internal governance; and 3) the investigative powers of the Court of Audit where COHO provides financial resources in the Caribbean countries. The explanatory memorandum to the bill has been amended and clarified on all these points. The recommendations have not led to an amendment to the proposal itself.

I request that you send the amended proposal for a Kingdom Act and the amended explanatory memorandum to the House of Representatives of the States General, the States of Aruba, the States of Curaçao, and the States of Sint Maarten.

The State Secretary for the Interior and Kingdom Relations, Digitization and Kingdom Relations

TRANSLATION: [Felicity: 20% - Fidelity: 80% ]

 

OVERALL TRANSLATION: FELICITY:20% / FIDELITY:80%

PAPIAMENTU/DUTCH : ENGLISH

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