Time to split the Ministry of Finance?

Author: Peter van Keulen. This article appeared on Montesquieu Instituut on 19 May 2021.

There is a new housing shortage in the Netherlands. More houses need to be built and one of the problems is the lack of building sites. Municipalities are economising on their internal organisation – including spatial planning officials – and are subordinating the social problem of the housing shortage to their own (political) considerations. The savings made by the municipality of Amsterdam are an example of this. Remarkably, the 11 secretaries-general (SGs) did exactly the same in the lobbying letter they recently sent to the then informateur Herman Tjeenk Willink i. The SGs argue that departmental reorganisations are not the solution for solving social issues because civil servants “already work in teams across the boundaries of their own departments”.

The secretaries-general conveniently forget that the organisation of central government is a crucial factor in the attention given to a social issue. Spatial planning and housing production, for example, have fallen further out of the picture since they were brought under the Ministry of the Interior and Kingdom Relations (BZK). A new Ministry of Spatial Planning and Housing with its own Minister and State Secretary will accelerate housing construction, but also the energy transition that requires space. Such a new ministry also prevents internal discussions at the Ministry of the Interior from having to balance spatial planning and housing construction with other Ministry dossiers.

The fact that secretaries-general state that they are “used to working in teams across departmental boundaries” is not borne out by the example described: the benefits affair. It is precisely this affair that shows how no cooperation took place. Let alone “across borders”. The Ministry of Social Affairs and Employment, and the Ministry of Finance operated independently of each other while the Tax and Customs Administration had repeatedly pointed out the undesirable results of the harsh policy. It is a regrettable example that cooperation is not the norm in the compartmentalised work within and between the ministries. This does not seem to be recognised by the secretaries-general.

This is also the case at the Ministry of Finance, where the mismatch between social reality on the one hand and implementation logic on the other has become apparent. The Tax and Customs Administration has been in trouble for 15 years. This has to do with the way the Ministry of Finance manages the Tax Authority. It is impossible for a public organisation to have been in trouble for 15 years without the context and preconditions being the cause of it. Among other things, the inability to repair the problems with Toeslagen shows that the Ministry of Finance is not capable of changing this. It is precisely here that a departmental reorganisation could help: set up a Ministry of Taxation and Fiscal Affairs such as exists in many neighbouring countries. This new ministry would give taxation in the Netherlands the attention it needs to put its services in order. The remaining parts of the Ministry of Finance can then be transformed into a Ministry of National Budget and Financial Markets. Without creating compartmentalisation. As a consequence, the income side of the national budget (taxes) and expenditure side (departmental budgets) will be separated. This will benefit decision-making and political support: separate decision-making on the income and expenditure sides will give the States-General the opportunity to decide on the Tax Plan without time pressure. And not under high time pressure at the end of the year, as is currently the case. This also benefits the support base among businesses and citizens who, in the current situation, do not know until 1 January what their tax obligations will be in the new year. Incidentally, the Ministry of Finance is the only Hague ministry whose organisation and structure has never really changed since it was established in 1789.

It is a good thing that the administrative leadership of ministries openly intervenes in the administrative organisation of the country. However, their own internal concerns must be made subordinate to the social problems that must be tackled. So departmental reorganisations should not be ruled out at the outset: after all, the civil service organisation must adapt to the social issues and not the other way round.

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What is Accountability Day and what opportunities does it bring?

Public Matters Trainee Tessel Schouwink spoke with former Member of Parliament Pieter Duisenberg to answer these questions.

On the third Wednesday of May few people will be watching the television. Yet this day, also called Accountability Day, deserves more attention. It is the counterpart of Prinsjesdag (Little Prince Day), when politics does not look forward but back. Although this parliamentary moment has little flair, no golden carriages or throne speeches, in essence it is more important than Prinsjesdag. After all, what use are beautiful plans if the execution is not good?

First of all, it is important to outline what exactly happens on this day. On Accountability Day (this year on 19 May), the Minister of Finance presents the annual financial report of the State to the Lower House. Comparable to Prinsjesdag, this is done in a special case. In addition, the annual reports for each ministry are presented. These show what the government and the ministries have achieved, what they have done to achieve it and, finally, what it has cost. It is in fact a review of the past year.

“Accountability Day completes the circle of national policy”.

The annual reports are audited by the Court of Audit. The following questions are answered: have the desired policy goals been achieved? And: has the government complied with the legal rules? But the review also continues after Accountability Day. In mid-June, the House of Representatives will continue to debate the annual reports and the accompanying report by the Court of Audit. The result? The government can adjust or change its policy where necessary. And this comes up again on Prinsjesdag. This completes the circle of national policy.

Accountability is also political

As is often the case in the Lower House, it is not only about the annual accounts themselves. Current events, for example, also play a major role. For example, the debate on accountability in 2018 was mainly about the dividend tax. And so on Wednesday 19 May this year, it will largely be about the corona pandemic; what has the pandemic done to the figures? The Accountability Debate, following the annual financial statements, is therefore an opportunity for politicians to make their political points. For companies and organisations, it offers opportunities to bring forward important issues in their contacts with MPs, which can be reflected in the debate with the Minister of Finance.

We have to keep going

Politicians love to look ahead. From city council meetings to election campaigns, politics is largely about future policy. After all, a politician likes plans and outlooks. This can also explain the popularity of Budget Day compared to Accountability Day. Accountability Day, however, is a necessary step in learning from mistakes – in order to draw up the best possible new policy. This realisation is increasingly being felt in The Hague.

Duisenberg Method

Various politicians have tried to draw more attention to the ‘counterpart’ of Prinsjesdag. Former VVD (Conservative-Liberals) Member of Parliament Pieter Duisenberg plays an important role here. Together with Paul van Meenen (D66, Liberal-Democrats), he devised the so-called ‘Duisenberg method’, in which a standard method for monitoring the government was developed. According to Duisenberg, this is indispensable. “It ensures consistency in the constitutional task of Parliament, namely: to control the government.” He also points out the need for the inclusion of the method in the Rules of Procedure in the House of Representatives. “Accountability Day is not a sexy topic with which you as a member of parliament can get into the newspapers. In this way, a number of MPs are designated to be ‘obliged’ to carry out the method that year.”

“During Accountability Day, the constitutional task of the House of Representatives, to monitor the government, is greatly magnified.”

Not only has Duisenberg made a major impact in terms of content, he has also worked to give the day itself more cachet. For example, Accountability Day begins with what is known as an ‘accountability breakfast’, where politicians come together to discuss accountability. Every year, a speaker is also invited. In 2017, for example, Prince Constantijn spoke about accountability in start-ups. Duisenberg emphasises: “Accountability Day is not intended to drag the government through the mud. It is more intended as a great learning lesson: what can we learn from the past year?”

“Auditing is not meant to drag the government through the mud. It is more intended as a great learning lesson: what can we learn from the past year?”

In addition, Duisenberg introduced the ‘V100′, whereby citizens have the opportunity to ask critical questions about the annual reports. According to Duisenberg, this gives more nuance to the figures. For: “citizens’ experiences provide more insight into ‘how our country is really doing’. The Duisenberg method and the v100 therefore provide more factual insights into the state of the country. Something that he considers indispensable in his current position as chairman of VSNU (Association of Universities). “Discussions about, for example, money and services for certain sectors are becoming less of a yes/no debate based on a newspaper article. The debates are more evidence-based; we see better what sectors need.”

The latter is essential for your advocacy. After all, on the basis of hard figures, it is possible to see where additional resources are needed and whether money is being spent efficiently. It is therefore of great importance for companies and organisations to keep a close eye on the accounting documents. Of course Public Matters also scrutinises these documents extensively, and we can advise our clients about the content and the follow-up steps required on the basis of these documents.

Although Accountability Day does not (yet) have the grandeur of Prinsjesdag, in terms of its importance it is hardly inferior to the well-known third Tuesday in September.

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Sector organizations: are they making a comeback?

It seemed that many branches were slowly but surely losing relevance, members, and the mandate to engage with policymakers from a common standpoint. A lack of decisiveness and a stuffy image led, according to many, to an inevitable end of the trade association. As an industry representative, but also as a member of an industry association, it is useful to reflect on the positioning of associations, and to look for new ways of representation and positioning.

In this article, I provide an analysis of the resurgence of collective advocacy, self-reflection and innovation in trade associations, and offer advice on the added value of branches in the future.

The revival of the trade association

It is, of course, tempting (and easy) to explain the revival of trade associations solely on the basis of the coronacrisis: after all, a trade can bail its members out, and with a good lobby can mean the difference between forced closure and opening the store or the terrace. However, developments prior to the corona crisis are also important for the following reasons:

First, there are more and more advocates in political The Hague and Brussels. This while policymakers prefer to engage with a sector: after all, this gives an overall picture of the solutions needed for problems in business, and it also saves a lot of time. This requires that the sector acts as a reliable partner, and is willing to compromise. In order for a company to influence choices that are made about/for you, good advocacy is a must, and a sector with which the government can make agreements can help in this.

In addition, industry associations themselves have for some time now been focusing on added value for members. One sector does this by offering member services, and another has been lobbying the government for some time. A resounding example of this is VNO-NCW and MKB-Nederland with ‘a new (European) course’. This shows that these industry associations are committed to refreshment: an inclusive story in which sustainability, entrepreneurs, and inclusiveness are central.

What the corona crisis did unleash was further internal change at a number of trade associations. Whereas members often cannot agree on what a trade association can and cannot speak about to the outside world, there was broad agreement from the beginning of the corona crisis that the trade association could negotiate on behalf of its members on support measures, industry opening, and other issues. This gave many industries in, for example, retail, construction, and hospitality the broad mandate to engage and negotiate with ministries and politicians. For the government, there was also a one-stop shop where the conversation could be started with an entire sector. Many companies found out very quickly last year that the Ministry of Economic Affairs was willing to meet with sector directors on a weekly basis and not with individual companies. Although a trade association often takes the golden mean, membership opens many doors, and can therefore be interesting to join.

The future of the industry association

Trade associations will continue to be important in the future, provided they can demonstrate to (potential) members what the added value is, and position themselves as a reliable interlocutor on behalf of a sector.

For companies that are already members of a trade association or are hesitating to become a member, the following advice applies: membership implicitly includes a responsibility, become active and ask yourself what you want to get out of membership. Membership of a trade association can offer clear benefits, but active involvement is necessary.

How can your branch seek out and represent the common interest of members? Or do you want to establish a trade association? We like to think along with you! Please feel free to contact us for an introductory meeting.

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Number of talks with ministers says nothing about influence

The April 6 issue of Dutch newspaper NRC begins with a study by the Open State Foundation which concludes that “a small number of large corporations appear to have excessive access to Dutch ministers.” The article suggests that as a result, these companies have disproportionate amount of influence. This conclusion is both methodologically and practically incomplete.

Let’s start with the methodology. From a political point of view, both the verb to influence and the noun to influence, strictly speaking scientifically, mean by definition only an attempt to gain actual influence. If you want to measure actual influence, a before and after measurement should be carried out. Beforehand, the influence attempt(s) are investigated, and afterwards the result is measured. Such a research method is rarely used. Because it is expensive and takes a lot of time. Quite apart from the fact that not many advocacy organisations and the stakeholders with whom they have contact want to be surveyed. In the Netherlands, Professor Braam, a professor at Twente, did this in the 1970s. Research today is mainly focused on proxies such as reputation, access, budget and positions. They do not measure actual influence in any way. At most, they measure a possible chance of that happening.

Then there is the practical observation. In daily practice it appears that the contact between companies on the one hand and ministries and ministers on the other is more difficult than in the past. And in that same reality it turns out that when companies do have these contacts, the impact of that contact diminishes. In short: people are less and less open to each other’s points of view. This is also known as “the gap”. In addition, another fact which is not considered in the study or the NRC article: the yield of effective lobbying does not lie in the frequency or level of contact but in its result. In other words: rather one good lobbying meeting with a civil servant that leads to a change of position than 10 meetings with ministers in which only pleasantries are exchanged.

Of course it is important that contacts between policymakers and lobbying organisations (whether for-profit or not-for-profit) are carefully recorded. And this could be done better – as the research by the Open State Foundation shows. There is also room for understanding the journalistic angle of the representation of the research. After all, attempted influence is not news, influence results are. But let us continue to interpret and interpret “research” carefully: there is no question of excessive access in the Netherlands, let alone of excessive influence as a result.

The Netherlands on the move: transport and mobility in the upcoming coalition agreement

Today is election day and this means the drafting of a new coalition agreement is getting closer. Tomorrow we will know which parties are likely to participate in the formation and which themes will dominate the negotiations. One of the subjects that will undoubtedly be on the table is the development of public transport. The Corona crisis has disproportionally affected the public transport sector, and there is a good chance that public transport will continue to feel the impact of the crisis even after Corona. People will continue to partially work from home, fewer live meetings will be organized and there will be more out-of- rush-hour commutes to avoid congestion. Despite these developments, the political parties are confidently looking beyond the Corona crisis and concrete plans have been drawn up to maintain the mobility and accessibility of the Netherlands. In this article, Eef Brands and Nick Spier outline the four most notable developments in the mobility field.

1. From planes to trains

While international rail transport was only cautiously mentioned in a few election programs back in 2017, this year it turns out to be one of the most striking topics in the mobility field. The majority of parties declare that train transport is a viable alternative to short-haul flights. The parties do, however, differ in opinion on how this shift should be achieved. On the right, for instance, the Conservative Liberals (VVD) want to improve travel time, frequency and travel comfort in order to get people to take the train instead of the plane, while on the left Jesse Klaver’s party (the Greens) would prefer to completely stop short flights for which the train is a valid alternative. The parties also disagree on what is meant by “short distances”: The liberal democrats (D66) speak of short distances up to 700 km, while the Animal Party (PvdD) would prefer to add another 500 km to this. Despite the fact that the positions differ, it is clear that there is agreement on the use of more trains and fewer flights in a future coalition agreement.

2. No housing without accessibility

All parties agree that the realization of good public transport connections is necessary to open up new residential areas. The Liberal Democrats (D66), Greens (GroenLinks) and Conservative Christians (SGP) even consider it a requirement. The Liberal Democrats (D66) go the furthest in this respect, stating that new residential areas must be within a maximum distance of 10 minutes from a trainstation. Although the latter may not be realistic, the subject received broad consensus from the parties during recent election debates. As a result, concrete agreements on this issue in the coalition agreement seem very likely.

3. Accessibility of the regions

Parties on both sides of the spectrum want to promote regional accessibility. In particular, they want to offer good public transport facilities for the more remote areas. This can be done by rail, but also light rail is considered a suitable option. In addition, there is much talk of realizing ‘hubs’. The Conservative Liberals (VVD), Conservative Democrats (CDA), Animal Party (PvdD) and Christian Union (CU) all want so-called multimodal transfer points, where people can switch to other forms of (shared) transport to improve the region’s accessibility. The most striking point is the proposed high-speed connection between Lelystad and Groningen: the Lelylijn. Given the wide parliamentary support for building this connection as soon as possible, it seems almost certain to be included in the next coalition agreement. Furthermore, improving the overall accessibility of the North of the Netherlands is central to the mobility passages of almost all programs. This has been a successful lobby by the region, but now it is a matter of realizing this at the negotiating table.

4. Road pricing

Lastly, the principle of “Paying according to use” was discussed. The parties do not agree on this. The Conservative Liberals (VVD), and Conservative Democrats (CDA) want a car tax based on kilometers driven, which will also apply to emission-free and electric cars. This money should be used to maintain roads. They also do not wish to further burden the already contributing drivers. The Liberal Democrats (D66) and the Animal Party (PvdD), on the other hand, want a km charge based on CO2 emissions, location and time. The Christian Union (CU) also wants a km-based charge for passenger cars, but with a low basic price per km in order to spare regions with limited availability of public transport. The Labour Party (PvdA) adheres to the ‘polluter pays’ principle and would like to see a charge based on the number of km driven. The Greens (GroenLinks) want to introduce road pricing instead of motor vehicle taxation. The Conservative Democrats (CDA) and the Freedom Party (PVV) argue that if there are clear agreements on flexible work, road pricing is no longer necessary and even unfair, especially for people in contact professions.

Overall, there seems to be more than enough support to actually introduce a form of usage-based taxation after years of discussion. The question is, however, whether the parties will be able to reach an agreement this time, given the range of different preferences.

A ‘ballot agreement’ as a lobby tool?  

On 3 March 2020, the leaders of the three biggest left-wing parties SP (Socialist Party), PvdA (Social Democrats) and GroenLinks (Greens) stood on stage together facing a big crowd in cultural hub the Tolhuistuin in Amsterdam. They called for a left-wing cooperation during the parliamentary budget negotiations in the coming fall. Subsequently, GroenLinks and PvdA appeared to seriously consider entering the 2021 General Elections with a joint candidate for the premiership and several common goals. Would it come to a ballot agreement?

Not a crazy thought: this is how Joop den Uyl (former PM, PvdA) came to power through ‘Turning Point 72’. A ballot agreement by which PvdA, D66 (Liberal Democrats) and the PPR (a predecessor of GroenLinks) joined forces. The expectations for a new left-wing alliance were therefore raised high over the past year. But where GroenLinks-party leader Jesse Klaver explicitly reached out almost a year later to the PvdA, SP, and D66, they, on second thought, did not turn out to be so keen on a left-wing pact after all. SP-party leader Lilian Marijnissen was expressing willingness to work together with ChristenUnie (Christian Conservative) and CDA (Christian Democorats), D66-party leader Sigrid Kaag never intended to step in, and PvdA-party leader Lilianne Ploumen in turn didn’t want to cooperate with D66. Klaver’s call was ignored, and the silent hope of a great number of voters on a left-wing alliance was dashed.

But also on a smaller scale, political parties are calling for agreements on specific issues and interests. Leading up to the General Elections several initiatives were announced. D66 advocated for a ‘tiny-ballot agreement’ for a railroad connection between Groningen and Lelystad (the Lelylijn), and ChristenUnie pleaded for an agreement to buy up debts of young people. For the first time, the interests of an entire region were established in a ballot agreement: several members of the House of Representatives from the east of the Netherlands declared in the Akte van Oost (the Act of the East) to commit to economic growth in this region.

However, ballot agreements are not used only for cooperation between political parties. They can be used as a lobbytool too. To ensure that parties already commit to certain promises before the formation, for example. In the current election period the Digital Ballot Agreement came to pass, initiated by Amnesty International, Bits of Freedom, Open State Foundation and Waag. In this agreement parties promise to carry out stricter supervision on algorithms in response to the child benefits scandal, and insufficient resources for the Data Protection Authority to protect civilians. In addition, no less than 8 parties signed the Rainbow Ballot Agreement, in which they committed to concrete measures against discriminating violence against the LGBTQI-community and their acceptance at school. A group of development organizations also launched a ballot agreement for development aid. This calls for 0.7% of Gross National Product to be set aside annually in the state budget for development aid.

But how does such an agreement come about? We asked Mirthe de Boer from Cordaid, one of the initiators of the ballot agreement for development aid: “Four years ago we concluded a ballot agreement for the first time with the initiative ‘Turn the Trend’. The internationally agreed standard for development budget is 0.7% of GNP. The Netherlands adhered to this for a long time, but the trend was that this percentage was decreasing. All parties – except the VVD (Conservative Liberals) and right-wing parties – signed the initiative at the time.”

The question is whether such a ballot agreement leads to concrete results. De Boer: “In Cabinet Rutte III they did not reach the 0.7%, but they did add a net amount of budget. And during the budget debates several parties advocated for the standard to be met. This recent election period it was, therefore, again decided to launch a ballot agreement to really get to that 0.7% standard, after it turned out that many parties had also included it in their election programs. The signature is then mainly intended to commit parties to keeping their promise. The COVID-19 pandemic makes it harder to create momentum for such an agreement, because if you don’t have a physical moment, it feels more superficial. Fortunately, we still have the tweets.”

A ballot agreement works well as a lobby tool. Apart from the political and media-attention for a topic surrounding the launch and signing, political parties can be reminded and upheld to their election promises. In addition, it offers the possibility to continuously put issues and measures from the agreement on the agenda. Finally, the ballot agreement can serve as a starting point for actually implementing the proposed measures into policy. And so the signing of the agreement is not the end of the lobby, but rather the beginning.

Ambitions for a better waste policy should stem from the industry

Author: Pieter Walraven. This article appeared on Afvalonline on 22 February 2021 and on the Dutch magazine Afval in February 2021.

I see an eroding mutual understanding between politicians and corporate executives. Instead of dialogues, both parties seem to wallow in their own rightness. Misunderstanding then arises when one sees that the political debate is mainly hijacked by, for example, a container deposit discussion. The current politically fragmented landscape means that the subject of circular economy is often one of many spokespersonships for a politician. As a result, members of parliament have little room to immerse themselves in the subject matter. The focus is then on the political game. And in the political game there is little room for pats on the back for companies. The distance between government and business is therefore becoming increasingly visible in the political debate. Even the VVD is increasingly distancing itself from companies in its election manifesto. This also does not encourage talent and top business people to become more actively involved in the public debate.

 

Public relevance goes beyond employment

Many companies and industry organizations often interpret their impact in society with figures and facts about employment or the contribution to the gross domestic product. However, the impact of such figures is limited in the current times. Both the COVID-19 pandemic and the growing distance between government and business ensure that another narrative has become more important. Namely, the way a company interprets its public role and especially the way it collaborates with other parties.

For example: Dutch brewers supporting pubs despite the fact that they themselves were also heavily affected. Or parties from the manufacturing industry that started to produce face masks and disinfectants in collaboration with suppliers. The COVID-19 crisis served as a magnifying glass for the public role, because parties who have already structurally organized cooperation with their social partners can count on more support from policymakers in The Hague.

 

Stakeholder management promotes cooperation

That brings me to a subject that has become increasingly important in the work of a lobbyist in recent years. That is stakeholder management. Like lobbying, it is something that many claim to do, but which is often practiced ad hoc and from one’s own interest.

A good example of stakeholder management is the way the three Dutch major banks are managing the transition of Geldmaat’s ATM network. By involving representatives of the hospitality industry, senior citizens’ associations and municipalities at an early stage and on a structural basis, this process can count on a great deal of support.

Stakeholder management should be a structural part of the agenda for all parties in the waste sector. After all, it is a complex field in which cooperation between different governments, companies and public organizations is essential.

Stakeholder management is not about speaking and consulting with other parties. It’s a process where you delve into the interests of other parties rather than their viewpoints. You often see a focus on opposing views in public debates about sustainability. By setting up a stakeholder dialogue you organize structural cooperation based on shared interests. Often you also organize political support well before issues are on the political agenda. The banks started their stakeholder dialogue well before Geldmaat became publicly known. Parties like the Dutch Railways and the Port of Rotterdam Authority also invest heavily in stakeholder management. It requires a willingness to be transparent and it takes a lot of time. This is because it is not something that is done by top management and the lobbyist. It has to be carried broadly in the organization.

If I look at the waste sector, stakeholder management can add a lot. For example, in the collection of textiles. There are many commercial (H&M) and non-commercial (Salvation Army) initiatives in the market. In combination with the patchwork of municipal collection policies, this ensures that not all parties achieve the volumes that could be achieved. When you look at initiatives such as Pals Brust’s Upset, the right volumes of the right materials are essential to achieve circularity in the textile sector.

 

Political developments?

The fragmentation of the political landscape will not change after the upcoming elections. This means that, particularly in the field of sustainability, opportunities remain unused. Anyone who has followed the latest debates on the circular economy will see a lot of ‘politics with the small p’. A long-term vision on the future of recycling is often missing. This is a pity, because it means there is little attention for innovations in chemical recycling and post-separation of waste streams.

It also shows a trend that manifests itself in several policy areas. The fragmentation or merging of policies into action plans. You see it at several ministries, including Health, Welfare and Sport, Education, Culture and Science, and also at Infrastructure and Water Management. They are smoothly written, bursting with ambition and contain something for everyone. The positive thing is that the action plans contribute to cooperation, but they are often too non-committal in nature. Goals are not always formulated in concrete terms, which makes action plans less measurable. As far as I am concerned, they often show the powerlessness of a ministry. It seems that we mainly look at measures from Brussels, such as the Single Use Plastics Directive.

In election programmes, the ambitions of various political parties are somewhat disappointing compared to the words used in recent years. They either contain few concrete measures or refer mainly to well-known measures about litter. Even an official advisory document to the next cabinet had an ambitious title (‘Towards a waste-free economy’), but anyone reading further could discover few concrete measures. They were mainly various variations on existing policy.

It is noted that circular business models are difficult to get off the ground, but if you look at the calculations, you see no commitment to make more budget available.

How can the government ensure that circular production methods and innovations are driven and supported? I see two opportunities for this. A greater involvement of the Ministry of Economic Affairs and Climate can spur the power of innovation. It is unfortunate to see that circular production models receive little attention and budget within the Top Sectors policy. Waste policy is an integral part of this and should therefore be viewed through a more economic lens. There is a link with a second chance. Collection of household waste is now a patchwork of rules per municipality. Initiatives like the aforementioned Upset have an interest in larger volumes and thus a more uniform policy for waste collection. The different methods make circular models more difficult to scale and sometimes unnecessarily expensive.

 

More control by the central government?

The COVID-19 pandemic has meant that a more leading role is expected from the central government. In times of crisis, people again realize that a government must lead, fight and manage. This has come as quite a shock, since policy in recent years had been based on polder agreements or had been delegated to lower authorities. The latter is currently being named more and more critically and may also have implications for the waste sector.

The Dutch Social and Cultural Planning Office, for example, recently concluded that the high expectations for the decentralization of youth care have not been realized. The need for more guidance from the national government can also be seen in the National Environmental Vision (NOVI). Municipal waste policy is currently a patchwork. This impedes the effectiveness of measures and thus of innovations in the circular economy. Just look at the fact that more than two hundred municipalities work with some form of source separation. That is why another official opinion is special. It is called ‘Building blocks for a better tax system’ and deals, among other things, with giving more rights to municipalities to levy taxes themselves. Few parties pay attention to this in their election programs, but the subject will certainly be on the table when the relationship between central government and municipalities is reviewed.

 

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Why the maritime sector should emphasize its strategic interests

Pieter Walraven contributed in Maritiem Nederland with an op-ed on the positioning of the Dutch maritime sector. He elaborates on three elements that could improve the strategic relationship the sector has with Dutch policy makers.

  1. Emphasizing the strategic importance of the maritime sector.

The deteriorating relationship between business and politics has been a hot topic this year. In the recently presented party programmes for the upcoming elections, it becomes abundantly clear that the tone of voice in the industry policy paragraphs has changed drastically.

This warning signal should prompt sectors to demonstrate their social relevance in a different way. It is no longer sufficient for interest groups to rely on facts and figures concerning employment and their GDP-contribution alone. More than ever, it is key to organize a social dialogue with stakeholders. For the maritime sector this is challenging: the sector is not as visible as, for instance, the hospitality industry or public transport.

For instance, a great deal of work has been done in sustainability. Not only through the Maritime, Inland Waterways and Ports Green Deal of June 2019, but also in concrete projects. For example the development of the Porthos project, which might evolve into a landmark project. Or take the development of a ‘hydrogen hub’ mentioned in several party manifesto’s. This is clearly an opportunity for the port as a mainport and for the maritime sector as a strategic sector. What politicians often do not realize is the need for a strong maritime sector to be able to realize the political ambitions.

The importance of social dialogue goes beyond a commitment to sustainability. What does a strong maritime cluster mean for society? How many jobs are linked to it, and which other sectors benefit from it?

  1. Need for a new style of industrial policy.

A lack of government industry policy coordination became painfully clear during the ‘Oasis of the Seas’ case. An order for a massive maintenance assignment on this vessel ended in a huge fine from the Inspectorate of the Ministry of Social Affairs and Employment. Due to a lack of coordination between government departments the issue painfully lasted for years before eventually sorted out in court.

What is striking, however, is that the Dutch government seems to re-introduce industrial policy. This policy was left by the ministry for Economic Affairs in the late 90’s. It appears to realize that market failure and geopolitical competition require a more assertive approach. The maritime sector should respond to this by initiating more interdepartmental connections themselves. This might enable more coordination to secure the position of the maritime sector.

  1. Rebuilding the relationship between government and industry.

The deteriorating relationship between government and industry is currently unmistakable. A policy-review by the Confederation of Netherlands Industry and Employers (VNO-NCW) urges companies to make their social relevance more visible to the public and called for more transparency and a structural dialogue between business, politics, and society. More and more this dialogue showed a deteriorating level of mutual understanding. Most public affairs directors believe politicians, in particular MPs, lack understanding and awareness of the impact of certain policies on companies, a recent survey showed.

In Amsterdam this became even more visible. In the plans for the relocation of the Cruise Terminal on the IJ and the debates concerning a bridge across the IJ-river, the interests of the maritime sector are blatantly overlooked. What does not help is that few politicians have connections with the maritime sector or any business background whatsoever. This means interest groups will have to invest more than ever in relationships with the newly elected politicians. This starts with developing a level of mutual understanding.

This article appeared on the website of Maritiem Nederland.

How ‘Brussels’ wants to turn the digital services sector upside down with the Digital Services Act and Digital Markets Act.

On 15 December, EU Commissioners Margaret Vestager and Thierry Breton, on behalf of the European Commission (EC), published the long-awaited Digital Services Act (DSA) and the Digital Markets Act (DMA). In doing so, the Commission proposes future European internet and digitisation policies with the primary aim of protecting consumers and ensuring fair competition. At the same time, the EU hopes to set the standard for digital regulation at a global level. Because of their impact, these proposals have led to intense discussions on (i) the responsibilities of digital platforms and (ii) limiting market power of the largest platforms. It is therefore interesting to look ahead: what will happen now in Brussels and how can this be influenced by an interested party?

Ready?

The proposals are far from unexpected. The then newly installed Von der Leyen Commission already announced the proposals in its 2019-2024 guidelines. Moreover, the previous Commission had already hinted in the Digital Single Market Strategy (2015) that the 2000 e-Commerce Directive needed updating. Last spring, the current Commission eventually published its initiative, and several committees in the European Parliament (EP) started writing so-called own-initiative reports. These reports are not binding, but require action by the Commission and serve as a preliminary position paper in an attempt to influence the writing process of the Commission. In fact, such a report says: include these points in the legislative proposals, otherwise it will be difficult to reach an agreement with us. Last October, these three reports were adopted by the European Parliament and the public consultation (by the Commission) closed. After this, the Commission was able to officially start the drafting process, while several Member States communicated their positions drop by drop in non– and position papers. The Netherlands, for example, did this together with France: an unusual cooperation between The Hague and Paris.

The initial publication date of 2 December was postponed several times due to internal struggles (e.g. between Vestager and Breton). Although not an unusual practice in Brussels, this fight provided an interesting insight into both the individual ambitions of Vestager and Breton and the aims of various Commission Directorates-General. In the run-up to 15 December, several draft texts were leaked, and the Commission’s legal watchdog, the Regulatory Scrutiny Board, further hampered progress by questioning the legal basis of various components. For example, the most powerful variant of the planned ‘New Competition Tool’ (an instrument to remedy structural market failure) was dropped. In the last few weeks, therefore, people were still busy smoothing things over in advance.

Set?

On 15 December at 3 pm, politicians, the press, the business community and other interested parties stood ready to follow Vestager and Breton’s press statement. Cheered to early: the press moment was postponed for almost two hours because at the very last minute there was still some disagreement about the proposals. The weight of the proposals is more than obvious, but what exactly does it say?

Digital Services Act

The DSA is an update of the e-Commerce Directive from 2000 – when Facebook, for example, did not yet exist, and Google had just moved out of a garage for two years. The update aims to clarify the liability regime for digital platforms operating in the EU and to strengthen monitoring and enforcement. Digital service providers will have to take more responsibility for illegal and harmful content on their platforms, be more transparent about how their algorithms work and take various measures to empower consumers. The bigger the platform, the more obligations. To make this distinction in size, the Commission proposes to define ‘very large platforms’ as those that have more than 45 million active users on the European market. In order to guarantee all the new requirements, the DSA also provides for the designation of Digital Services Coordinators (DSCs) in each European Member State. These DSCs are responsible for compliance by tech platforms.

Digital Market Act

The DMA focuses on regulating competition in the digital market. This goal rests on two pillars. The first provides for ex ante (‘do’s and dont’s’) regulation in order to prevent digital service providers from acquiring a market dominant position that stifles competition in the same market. In concrete terms, this means a series of obligations and prohibitions relating to self-preference, interoperability, data-related practices and tying. The second pillar provides for the Market Investigation Tool: a weakened version of the previous New Competition Tool (see above), which allows market investigation of structural competition problems on a case-by-case basis. Who will be subject to these new rules? Some will apply to all online platforms, but the focus is on so-called gatekeepers of the digital market: large players who have such market power that medium-sized and small digital service providers have no way around them, and therefore no fair competition. This is not only disastrous for the entrepreneurial spirit, but also for consumers who see their options restricted. The Commission proposes to define these ‘gatekeeper platforms’ with three cumulative criteria relating to (i) their impact on the internal market, (ii) the number of consumers they provide access to with their platforms and (iii) the extent to which the first two criteria are met over time (anchoring of position).

GO!

At just before 5 pm, Vestager and Breton came to the podium and presented the DSA and DMA. Breton did this in quick French, with which he seemed to leave his Danish colleague in the blue. Internal struggles aside, the presentation paved the way for the ordinary legislative procedure by which the European Parliament and the Council of the European Union (‘the Council’), as legislators, decide on the proposals.

Portugal holds the rotating Presidency of the Council in the first half of 2021, succeeding Germany. The examination of the proposals will not be long in coming: on Wednesday 6 January, the DSA was already on the agenda of the Council’s Working Party Competitiveness and Growth (Internal Market). The DMA will be dealt with by the Working Party on Competition. France, which will take over the presidency from Slovenia in the first half of 2022, has already expressed its ambition to conclude the negotiations in its term. However, this does not seem realistic given the many different interests involved. A conclusion in 2023 or later is more in line with expectations with which Sweden, Spain or even Belgium could only give the final blow.

A battle has been raging in the European Parliament for a while now regarding the lead in the parliamentary process. The IMCO committee (Internal Market) is likely to take the lead on both proposals, and the Maltese MEP Agius Saliba (Social Democrats/S&D) and German MEP Andreas Schwab (Christian Democrats/EPP) have been named as potential candidates for the rapporteurship. Saliba was previously rapporteur for the IMCO committee’s above-mentioned own-initiative report on the DSA. Other MEPs are in favour of shared competence between the IMCO, JURI (Legal Affairs), LIBE (Civil Liberties), ITRE (Industry) and ECON (Economic Affairs) committees. The ITRE Committee had made an advance on this by already appointing a rapporteur for the DSA: the Finnish MEP Henna Virkkunnen (Christian Democrats/EPP). It is expected that other committees will either challenge IMCO leading the dossiers, or make clear that they to be associated. Then the Conference of Committee Chairs, made up of the chairs of the various committees, will take a decision on the final allocation of responsibilities presumably in January.

Once all the starting positions have been taken, debates, internal negotiations and the writing of report texts will begin in Brussels. Both the Council and the European Parliament will gradually work towards their own positions, as negotiating mandates for the trilogues (inter-institutional negotiations) between the Commission, Council and Parliament.

Throughout the decision-making process, there is ample room for interested companies and organisations to get involved, express their perspectives and exert influence. A strong narrative in Brussels and continuous presence in the midst of all stakeholders during the process will be badly needed to keep a grip on the global impact that the Digital Services Act and Digital Market Act will have.

Public Matters advises companies and other organisations that are active in the tech sector, or which are impacted by the DSA and/or DMA. See this page for more information.

Political influence is not for sale

According to former MEP Marietje Schaake , “lobby money” has an increasing impact in the voting booth (NRC, 13 November 2020). She underpins this with the example of Uber and Lyft spending a lot of campaign money in the state of California to influence a referendum outcome. Schaake also mentions the increased spending of “big tech” on lobbying efforts in the EU. Two examples which, in her view, lead to the conclusion that every dollar or euro spent on lobbying, is proportional to an increase in influence on the issue. In practice however, I have seen that this conclusion is simply not true. Although it may seem logical, it is an underestimation of the voter, the policy maker and the influence of the media.

In order to demonstrate this, one must acknowledge that a campaign for a certain political issue is something quite different from an advertisement for a particular product. While the first focusses on activation (“buy me”), the latter focusses on influencing an opinion (“support me”). Such messages lead to a different processing in the human brain – something behavioural scientists already demonstrated years ago.

Secondly, the impact of (social) media plays a crucial role in political influence. When newspapers, TV and online media pay attention to an issue, this influences opinions and policy making. Think of certain NGO’s that realise a high media reach with relatively few financial means. In doing so, they generate a lot of impact and counter-power, and, at the same time, no purchased advertising can withstand such influence.

A classic example in this context is that of a global oil company that, years ago, wanted to sink a depleted production platform into the deep sea. A non-governmental organisation fiercely resisted this. Although research showed that sinking the platform into the sea was the most environmentally friendly option – which was later admitted by the NGO involved – the oil company had to change its plans under great social and political pressure. This is some practical evidence that money and political influence are independent of each other, which was also scientifically confirmed recently. Researchers Frederik Stevens (University of Antwerp) and Iskander De Bruycker (University of Maastricht) showed that while wealthy lobbying organisations can have more influence on policy, this competitive advantage dissapears as soon as issues generate more media attention. Because of this media attention, certain civil organisations could be more powerful than resourceful and wealthy organisations. This is what makes democracy so strong and makes money play a secondary role in influencing the policymaking process.

In addition, Schaake’s article also assumes that only corporations lobby, which of course isn’t true. But it is a fact that higher regulation density leads to higher lobbying density. In heavily regulated sectors such as, for example, health care, pensions and the energy sector, this could be recognised with the lobbying activities of both commercial and non-commercial organisations for many years. From patient organisations to pension administrators, and from environmental organisations to grid managers. In the tech sector, this regulatory density has also increased considerably in recent years. With a logical and predictable result: more lobbying activities emerged from both companies as well as NGO’s. It’s a good thing is that these activities are well registered – in both Brussels and in the US – so we know exactly how much organisations spend on lobbying.

To conclude, Schaake undermines her own argument that one could buy influence: Mike Bloomberg who, with a billion dollars in his pocket, did not become president. But neither did the Democratic Party, which did not get into the presidency any easier with more financial resources at its disposal. Money may help to put an issue on the agenda, but it is no guarantee of influencing success. Fortunately, is still the policy maker, the voter or the media that do that.