Published On: Thu, Mar 25th, 2021

COHO draft law triggers questions about compatibility with Kingdom Charter

THE HAGUE — An earlier report on dossierkoninkrijksrelaties.nl about the advice concerning the draft kingdom law Caribbean Reform and Development Entity (COHO) stated incorrectly that the Kingdom Council of State considers the proposal to be a violation of the Kingdom Charter. Instead, the Council merely notes that the draft law triggers questions about its compatibility with the kingdom’s constitutional structure, as established in the Kingdom Charter. Autonomy and own responsibility are important points of departure in this context.

The Council of State published its integral advice on its website on March 24. You can find it here: raadvanstate.nl/adviezen/@123232/w04-20-0408.

In its conclusion, the Council remarks that the draft law cannot be submitted to the parliaments of the Netherlands, St. Maarten Aruba and Curacao in its present form. The advice points to a number of weaknesses that need to be addressed first. But overall, the Council supports the approach whereby support for the Caribbean countries is linked to a reform program that aims to make the economies and the public finances healthy, to strengthen the local governments and to improve the conditions for the population.

The advice states however that the chosen approach in the draft law is “inappropriate” because responsibilities and authorities are unclear. “This weakens the own responsibility of the countries.” Making the COHO responsible for writing and executing plans of approach does nothing to strengthen the implementation capability of the countries (meaning: St. Maarten, Curacao and Aruba) the advice states. It is also unclear under which circumstances the law can be extended or terminated. This leads the Council to conclude that the draft law “falls short.”

The Council of State notes that providing liquidity support in combination with a reform program, and offering financial support with conditions attached is “in line with the international practice of the International Monetary Fund and the European Union.” It remains however unclear which funding will be provided via the COHO and which funding will come directly from the Netherlands. It is also unclear whether funding consists of loans or gifts.

A more fundamental objection against the draft law concerns the conditions the countries have to meet. “There is no clear plan as a basis for providing support,” the advice states. Instead, the countries have an “open commitment” whereby it remains unclear which conditions they have to meet to obtain support. “This creates the risk that the countries feel less responsibility and that they will be continuously confronted with new conditions.”

The advice furthermore points out that the authorities the draft law extends to the COHO are more far-reaching than necessary and that they overlap with authorities that belong to the local governments. As an example, the advice mentions that the COHO writes implementation agendas together with the local governments. “It is unclear whether the countries are authorized to write these agendas on their own and it is also unclear who is authorized to do what.”

Another sore point is the COHO’s authority to impose stricter financial supervision because this is basically the responsibility of financial supervisor Cft. The draft gives the Minister of Home Affairs and Kingdom Relations the same authority.”This interferes with the authorities of the Cft.” The Council advises establishing rules for stricter financial supervision in the relevant consensus kingdom law (Rft). “The proposal does not address the adjustment of budget-requirements.”

The advice points out that the COHO will function under the direction of the Minister of Home Affairs and Kingdom Relations: the minister can give instructions to the COHO, determine how funding is spent and give instructions related to the country packages. The minister is obliged to consult with the local governments, but he does not have to reach agreements with them. “This places the minister above the COHO and above the local governments,” the advice states.

In this context, the Council of State labels the draft law as “problematic” and notes that it is insufficiently clear “why limiting the countries’ responsibilities and the far-reaching authorities of the Minister of Home Affairs and Kingdom Relations are necessary and proportionate considering the principles of the Kingdom Charter.”

The Council is of the opinion that “ownership and commitment of the countries are crucial for success.” It states therefore that writing and executing of plans must be the responsibility of the countries. “Strengthening the implementation capabilities is one of the most important objectives but the role of the COHO frustrates this.”

The advice suggests limiting the role of the COHO to four major tasks: approving implementation agendas and plans of approach with clear performance requirements; monitoring progress; providing technical and other assistance from its own budget; and supervision how the countries meet their performance-requirements.


Related articles:
Opinion piece: “Dead or alive”
Council of State criticizes COHO draft law, but supports its objectives
Raad van State: Rijkswet COHO strijdig met statuut
Review of the advice of the Raad van State (in Dutch)
Emmanuel on COHO: I told you so
Press statement Pro Soualiga Foundation