Governments may want to retain control in strategic companies, but measures giving them special positions are under close scrutiny from the Court of Justice of the European Union (CoJEU). Only measures that are in conformity with the fundamental freedoms are allowed.

However, it remains to be seen whether or not absolute privatisation bans are allowed under the Treaties because of Article 345 TFEU. Exactly this question is at the core of a reference for a preliminary ruling from the Hoge Raad der Nederlanden (the Dutch Supreme Court). A recent opinion given by Advocate General Jaaskinen in these joint cases of the State of the Netherlands versus Essent NV and Essent Netherlands BV, Eneco Holding NV and Delta NV seems to leave room for absolute privatisation bans. The system as set out in Dutch law amounts to an absolute ban on privatisation: shares in companies that operate distribution networks of electricity and gas can be transferred only within the circle of public authorities. This absolute privatisation ban is accompanied by a group ban and a ban on secondary activities.

Jaaskinen – whilst discussing the conformity of the Dutch liberalisation measures of the strategic economic sectors of electricity and gas – takes a stance on the relationship between Articles 345 TFEU and 63 TFEU (free movement of capital). Jaaskinen states in paragraphs 42 and 43 that since Article 345 TFEU contains the principle of neutrality of property (either public or private) the fact that private investors cannot acquire shares in a company because they are reserved for public shareholders, cannot be considered as a restriction within the scope of the situations prohibited by the Treaty. This does not mean that ‘the restrictive effects, other than those directly and inevitably result from the regulation of public or private property’ are not subject to the fundamental freedoms enshrined in the Treaty. Jaaskinen however reasons that in this particular case, the other restrictive measures concerning a group ban and a ban on secondary activities would seem justifiable under the rules of free movement because they are appropriate to achieve the objective pursued and do not go beyond what is necessary. If the CoJEU were to follow the same reasoning put forward by  Advocate Jaaskinen, a long-lasting dispute between the Dutch government and the protesting electricity and gas sectors would be put to rest. And more importantly, the relationship between Articles 345 TFEU and the fundamental freedoms would be illuminated. To be continued…

Proponents of gender diversity and quotas claim that corporations need talented women to keep up with the competition. Gender diversity would pay off. However, economic arguments for more women on boards of directors are shaky, Christina Hoff Sommers argues in an article ‘Let’s Not Oversell the Financial Benefits of Having Women on Corporate Boards’ (Atlantic Montly, also covered by NRC Handelsblad).

Sommers’ observations are, in short, the following. First, several studies suggest negative effects of female board members on firm performance and firm value. While female directors attend meetings more often and are more active in monitoring their firm, gender diversity did not mean better performance. In addition, the companies that had a quota for the share of women did less well in terms of performance and value and had younger and less experienced boards. Finally, the studies that do show a positive correlation between female board members and corporate success cannot claim a causal relation between the two. While Sommers acknowledges the good intentions of promoting gender diversity, she states that ‘business and financial leaders are supposed to be coolly objective and focused on economic reality’. Therefore, as there are no economic benefits, there are no reasons for quotas or other forms of positive discrimination.

And there her article stops. Please allow me to finish it. First, following Sommers’ argument that correlation is not causation, the fact that women quotas result in younger and inexperienced boards means just that. Apparently there are not enough older and experienced female candidates, but if there were, this problem would be solved. It certainly does not prove that the share of women causes value decline.

Second, Sommers pays little attention to the finding that female board members are more active in monitoring their firm. From a criminological point of view, this is important. Wim Huisman, criminologist and expert on organisational crime, has suggested that as more women gain access to high-status jobs we may see less white-collar crime. That is, if indeed women bring certain qualities (less risky behaviour) or values to work that prevent criminal behaviour. If, on the other hand, these women behave just like their male colleagues, nothing changes. Time will tell. But perhaps we’ll see better businesses because of female board members.

Third, Sommers warns not to ‘oversell the financial benefits of gender diversity’. What strikes me is the uncritical reliance on financial benefits as the measure of corporate success. How about: let’s not oversell the financial benefits, period! If indeed the demand for endless growth and profits led to risky behaviour and corporate crimes, would it not benefit society if we halted the incentives for big corporations to commit crimes, thus preventing enormous financial damages for society? It is disappointing that the negative correlation between gender diversity and economic value is automatically labelled as a problem. Of course, we need to uncover what explains the negative correlation between women on boards and economic success. But this is not bad news.

My upcoming birthday might have something to do with my choice of subtitle for blog. It is also a rather fitting description of the intentions of employers using ‘payrolling’ in order to avoid employer’s obligations on the one hand, while having employees at their disposal on the other. Recent case law suggests that employers cannot have their cake and eat it too. Once you reap the benefits of having employees, you’re in for the costs and drawbacks as well. Payrolling involves three parties: a worker, a payroll agency and a principal. Under this 3-party contract the worker performs his job for, and under the supervision of the principal, just as any other employee of the principal. The worker and the principal have not, however, concluded a contract of employment. The worker is employed by the payroll agency, which posts the worker to the principal. The advantage of this construction for the principal is that the employer’s responsibilities and liabilities lie with the agency. The disadvantage for the worker involved is that the agency may apply its own (cheaper) labour conditions and that it is easier for the agency to terminate the contract of employment than it would have been for the principal. Basically, the agency just needs to show that, for whatever reason, the principal no longer wishes to make use of the services of the worker(s) posted to him.

Broadly speaking, payroll agencies are similar to temping agencies. By using  such agencies employers can outsource their workforce and the obligations it entails. A striking difference is that temping agencies hire their own staff and subsequently post them to their principals, whereas payroll agencies come into the process after an employee has been selected by the principal already. Worker and agency ‘merely’ sign a contract of employment, after the principal has decided that he wants the worker to work for him. Furthermore, temping agencies tend to provide temporary staff, whereas payrolling may be intended for a longer period of time. There have even been cases of employers terminating permanent contracts, offering their soon-to-be former employees a contract with a payroll agency.

Employers have increasingly made use of payrolling over the last five years or so. Several recent rulings given by Cantonal Judges (e.g. http://bit.ly/16ywVhv ) may put a stop to this trend. In those rulings it was held that the only purpose of payrolling contracts is to avoid employership of the principal. This wish of the principal is not to be respected. The contract of employment concluded with the payroll agency is just a piece of paper which does not reflect the real intentions of the parties involved. Since all the essentialia for a contract of employment are present– work under the principal’s authority in exchange for wages - such a contract is held to be concluded between principal and worker.

This relatively new phenomenon of payrolling has put difficult questions to scholars, practitioners and judges. Can employees ‘sign away’ their protection by means of entering a relationship with a payroll agency? As ever, the answer is not a straightforward no, but the recent case law reaffirms an important principle of labour law that it is the essence and not the appearance of a contract that is decisive.

Last week I had a meeting with 30 PhD candidates, on academic integrity. I asked them: Who is Ingrid Tieken? Only one had noticed she is the newly  appointed counsellor on academic integrity at Leiden University. None of them had ever read The Netherlands Code of Conduct for Scientific Practice (2004/2012), although it is referred to every month in the Leiden Law School PhD newsletter. On the one hand this doesn’t worry me too much, for my young colleagues turn out to have a good sense of what academic integrity is about. And, more importantly, they know what to do, once they experience the contrary. On the other hand, one should not take the rules and principles of academic integrity for granted. Common sense, important as it is, may not always suffice when one is confronted with a real case of dishonesty. In practice, questions concerning academic integrity do not always present themselves in a unequivocal way, and they may raise thorny dilemmas.

The importance of a trusted colleague, or Ingrid Tieken

Recently, the Dutch academic community has been confronted with a series of incidents involving plagiarism or the fabrication of research data. During the meeting with PhD candidates we wondered: what would you have done if it had been you who had discovered signs of plagiarism in the work of a colleague? Only two replies suffice: (1) Go to a trusted colleague and share your concerns, or (2) go to Ingrid Tieken, and share your concerns. Together, you will figure out what should be done with a view to academic integrity. And what would you do, in the event  your own work is questioned, either by yourself or somebody else? Again, go to a trusted colleague or Ingrid Tieken. In cases regarding yourself, you and yourself are not very good counsellors.

Share your concerns and doubts

Sharing concerns and doubts is not mentioned in The Netherlands Code of Conduct for Scientific Practice. It should be.

The ‘thin ice’ principle is coined by Andrew Ashworth, based on a quote by Lord Morris stating that “those who skate on thin ice can hardly expect to find a sign which will denote the precise spot where he [sic] will fall in.” It is used to argue – but not by Ashworth – that individuals who do not know whether their behaviour will be labelled as criminal but who nonetheless take the risk of prosecution, cannot escape liability by pointing at the vagueness of the law. If you knew the ice was thin, it was your own fault if you fell through it. If you didn’t know the ice was thin, by the way, it is still your own fault because you could have known. This is the reasoning followed by the European Court of Human Rights and it is one of the reasons complaints about the legality principle are hardly ever successful. Yet in my opinion,  the metaphor makes the mechanism sound more reasonable than it really is.

For why is the ice so thin? In the metaphor, thick or thin ice is a neutral, natural state of things, whereas a clear demarcation of what behaviour is tolerated and what not in society is not a random condition, but the responsibility of the legislator. Rules must be drafted that are clear enough to make the imposition of a sanction at least objectively foreseeable. Admittedly, demarcation problems cannot entirely be eradicated as the use of language comes with vagueness and ambiguities. But the individual bears no responsibility for legislation, nor can he exert direct influence on its formulation. If even with the help of lawyers, he is unable to determine whether certain conduct is forbidden under the law, the law cannot guide his conduct. Passing the risk of vagueness on to the citizen causes a chilling effect, as in cases of uncertainty he may not act. This may contribute to general deterrence, but it also reduces liberty more than is necessary. If the legislator creates thin ice, then there will be less room for skating.

It might be undesirable to state that all conduct of which it is uncertain whether it might lead to the imposition of a penalty, is permissible. If the first one to fall through the ice is rescued, i.e. is acquitted because of the lack of clear provision prohibiting the  behaviour, others will no longer be deterred by the law. Either it should be possible to obtain an authoritative interpretation of the provision from a court beforehand, or it should be possible to excuse the individual because of a mistake of law. The first one who falls through will be rescued, from there on there will be a sign denoting the exact spot where skaters will fall in.

The European Court of Justice might decide in its expected judgment in the Schenker case (C-681/11) whether such thin ice principle applies in EU competition law. Advocate General Kokott, always keen to take op some fundamental issues, argues in her conclusion for the acknowledgment of the principle of guilt in the context of competition law. Enterprises can make an excusable mistake of law. But, in the case where specialised lawyers, informed on all the relevant facts, giving a detailed legal advice cannot reach a conclusion whether conduct is permissible or not, the enterprise acts at its own risk. I hope that if the CJEU is to accept a guilt principle underlying competition law, it will show the virtue of self-restriction. Clear legislation is not an individual right that can be forfeited, a legal basis for the impositions of sanctions is no less than the core of the Rechtsstaat.

Recently the Dutch national newspaper Trouw reported that norms of the Muslim majority are beginning to take over in the Schilderswijk, a multi-ethnic area in the Hague. Following last month’s commotion, the Dutch Minister of Social Affairs, Lodewijk Asscher, and anti-Islam politician Geert Wilders (MP) both visited this disadvantaged neighbourhood in the Hague to have a look themselves at this example of unwanted informal social control. In the newspaper article, wearing short skirts and walking dogs were said to be among the unaccepted behaviour on the streets. If groups of orthodox inhabitants are dictating what other people should wear and how they should behave, this is of course very disturbing. On the other hand, the reports are been denied by police and politicians with local knowledge. An independent researcher De Jong, who recently spent months doing fieldwork in the same area, does also not recognize this picture as a dominant one. Yet, the central message and the powerful label of ‘Sharia Triangle’ will stick to this neighborhood for years to come.

Apparently, there is a huge demand for this type of newspaper reporting. For decades, the media has painted a grim picture of urban neighbourhoods that are becoming no-go areas, ghettos, spaces of street terror and now sharia. In a study conducted some years ago by Monique Koemans, 55 Master students of our Urban Criminology course conducted qualitative fieldwork in eleven so-called designated problem areas. Most students were surprised that these neighbourhoods paid very little resemblance to their expectations based on media coverage. They spoke to many people in the streets who did not ignore local problems of crime and disorder, but simultaneously stressed that they liked the liveliness and heterogeneity. There are many different realities in these neighbourhoods that never get any attention.

One of the themes that came up during the research was the anger among inhabitants concerning the media obsession with crime problems and negative reports about their neighbourhoods. Many media reports are viewed by inhabitants to be sensation seeking, reinforcing negative stereotypes of the neighbourhoods and even fuelling aggression which they can subsequently show on television or describe in newspapers. Scandals and stereotypes sell. I am not suggesting that all problems in these areas have been fabricated and should be neglected. But I do find it very frustrating that so much money and effort is put into making less well-to-do neighbourhoods safer places, with many successes as well, and all we hear about is the latest scandal. In this way, people tend to forget that disadvantaged neighbourhoods in Dutch cities are doing well in many respects. The media and their representatives should not be blamed for social problems, but neither can they keep on suggesting that they are neutral observers.

A second observation in several selected areas, was the predominance of men in public spaces, even during daytime. Although this was not something the research was actively aimed at and strong conclusions could not be drawn, this gendered public space was persistently noticed by our student researchers. This seemed to be an underestimated but potentially defining aspect of living in the selected neighbourhoods. To what extent this gendered presence had to do with fear of crime or with other reasons (such as potential social pressure) has not been discovered. This certainly deserves more attention by local policy makers and researchers. Streets should be for everyone, regardless of gender, age and other characteristics.

Creating one hype after another will not help in understanding and, where necessary, solving these issues. Neither will a highly mediatised tour through a neighbourhood following a media hype. It would be more useful if politicians and journalists visited these neighbourhoods more often and, moreover, were more open-minded. This also holds true for visitors to cities. So next time when visiting one of the larger Dutch cities, look a bit further. Go beyond the usual high street commercial areas, spend some time and maybe some money in neighbourhoods that are not as scary as they are often depicted.

In Dutch administrative law, he who seeks the annulment of an administrative decision has no standing unless he is considered an interested party. The addressee of a decision will generally be considered an interested party as, to an extent, will residents of an area where a large building project is to be executed. A competitor of the addressee of a decision may also be considered an interested party, provided that he is, or will imminently become active on the same product market and the same geographical market as the addressee. It may also be relevant whether the competitor will suffer damages.

Interest in State aid cases

The interest requirement is now, it appears, becoming very important in State aid cases before Dutch administrative courts. As I have written earlier in this blog, many of the cases concerning State aid law before Dutch courts may not actually be aimed at undoing the distortive effects on competition caused by the granting of illegal aid. Time to tighten the ropes on standing? Well, the Administrative Jurisdiction Division of the Council of State seems to think  so.

Tightening the ropes: the case of housing corporations

On January 6^th, the Administrative Jurisdiction Division ruled that a large number of housing corporations had no standing regarding subsidies granted to another large number of housing corporations (www.rechtspraak.nl, LJN BZ0794). The first hurdle was that most corporations are not active on the same geographical market as they carry out their activities in different parts of the Netherlands. The other corporations, however, also failed to meet the interest requirement. They had not demonstrated that the subsidies to other housing corporations would lead to loss of revenue on their part. No access to court, then.

National procedural autonomy and effectiveness

How does this result relate to the well-known Rewe case law? The corporations, as a final argument, claimed that the Administrative Jurisdiction Division’s reading of the interest requirement would make it effectively impossible to challenge the legality of the subsidies under State aid law. This argument was rejected. The Administrative Jurisdiction division ruled that this argument could only be made in cases where the applicants actually derived rights from EU law. As the interests of the applicants were not directly affected by the subsidies concerned, the argument that they could not challenge the subsidy decisions became effectively irrelevant from a point of view of EU law. As a side note: Please do feel free to comment if you find a way out of this circle.

Tightening the ropes part 2: the case of Dutch education abroad

Just last week, on May 29^th, the Administrative Jurisdiction confirmed that this development will be continued. In a case concerning subsidies to a foundation stimulating Dutch education abroad, two other undertakings providing education abroad were denied standing because they could not demonstrate that they were active on the same product market as the recipient of the subsidy.

Outlook and comments

It remains to be seen how this development will continue in practice. Let me just make one point: it seems quite odd that a person would, prior to the qualification of a potential aid measure, have to prove that he is an actual competitor of an aid recipient who suffers losses as a result of the alleged illegal State aid – when for the actual assessment of the aid measure it suffices that the contested measure threatens to distort competition. 

Children in high conflict divorce situations are often in need of support. Their strong loyalty towards both divorced or separated parents in combination with ongoing parental conflict often leads to stress and hardship. However, without the consent or willingness of parents to cooperate, professional support remains unfeasible. Indeed, when a parent decides to move abroad with his children without the other parent’s consent, or goes even further and  decides to end his children’s lives, professionals are left empty-handed.

Two young brothers, Ruben and Julian, 9 and 7 years of age, were missing in the Netherlands for about 2 weeks in May 2013 after their father had been found dead having committed suicide in a forest. After many days of intense police investigations and actions by volunteer civilians searching for the boys, they were found dead in the proximity of the place where their father had been found. Everything points to the father ending the lives of his two sons. Could this national tragedy have been avoided? Did child protection authorities fail in their duties to protect these children?

Media coverage has informed us about the ongoing conflict since the parents' divorce five years ago. Both parents retained parental responsibility after their separation which is common practice in the Netherlands, unless there is such a serious threat to the children involved that only the primary carer of the child is granted parental responsibility by court order. The parents agreed to a 50%-50% care arrangement for their sons. The mother had filed several reports about her suspicions of child abuse and the neglect of her sons while in their fathers’ care with the Youth Care Office and the police. This led to an investigation and risk assessment by the Child Protection Board of the boys' situation, which subsequently led to a formal request to the court for a child protection order. Both parents were offered the opportunity to give their reaction before the petition would be sent to court. The (re)scheduled meeting of the Child Protection officer with the father was meant to take place on the day of his disappearance with his sons.

In the media, the question was immediately raised whether the child protection authorities had failed. As much as we would like to believe that child homicide tragedies can always be prevented, nothing is further from the truth. Parents who want to harm their children will always find an occasion to do so, even when the children are in out-of-home or alternative care. What would have happened if a supervision order had been granted by the court for Ruben and Julian? The Youth Care Office – responsible for the supervision of the two boys – would then have embarked on a difficult and inoperable mission of mediating between two parents involved in an ongoing conflict and not open to supporting contact between their sons and the other parent. As long as parents have shared parental responsibility and remain legally responsible for their children after divorce or separation, conflicts will remain conflicts unless parents are willing to receive and consent to help, and no Youth Care Office ordered by the court to supervise children can change this. We therefore need a discussion about (legal) instruments for professionals to protect and support children in high conflict situations whose healthy development is in jeopardy. Although Ruben and Julian could not be saved, many other children can be helped. But efficient support cannot become a reality without fundamental legal changes for parents and children after separation or divorce.

As a criminologist and legal scholar I have always been more than averagely interested in the correctional system. Although I am not an expert in this field, a recent – professional – visit to San Quentin State Penitentiary in California inspired me to write this blog about the currently debated reorganisations in this field in the Netherlands. In the so-called “Masterplan Department of Correctional Institutions” the Secretary of State for Security and Justice announces several measures that are aimed to further tighten the prison regime and its conditions in order to save the government about roughly €340 million. Whereas the plan is presented as a necessary and almost positive step in a series of budget cuts previously announced by the government, experts are very concerned about its implications.

Some “highlights” of the Masterplan

As a result of the Masterplan, more than half of the inmates (about 5,712 individuals) will have to share their cell, without significant changes being made to the structure and outline of their cells. Inmates will be screened for their eligibility to share a cell, with the nature of their crime and mental or behavioural problems as important counter-indications. A large part of the inmate population (4,100 individuals) will also have to spend more time in their closed cells – 20 hours a day – with very limited possibilities for exercise or other activities. This is referred to as the “sober” standard prison regime: Spending as little time and money as possible on the inmates, by limiting their movement and activities. On top of this the programmes designed and aimed to gradually prepare an inmate for his or her release back into society are being terminated and replaced by electronic monitoring for those who qualify for this alternative. Yet, the electronic monitoring would not be embedded in a reintegration/re-entry oriented programme. This basically means that the ankle bracelet only serves the purpose to monitor the inmate’s whereabouts instead of actually enabling him or her to positively benefit from their relative freedom of movement. All in all, the various reforms that have been announced seem to indicate a new – harsher - phase in Dutch corrections.

“Mister Congressman, why can’t you understand?”

Looking at the proposed reorganisations, Johnny Cash’s lyrics on San Quentin automatically spring to  mind again. It seems hard to believe that the government truly thinks that these changes won’t have a negative effect upon the individual resocialisation of inmates and – as a result – not on recidivism rates as well? As previously mentioned in another blog post on the Leiden Law Blog as well as in many studies, the effects of incarceration can be devastating. With collective safety and security still being important spearheads of public and political debate, it seems fair to say that the proposed changes might benefit from some further reconsideration. In doing so, especially the effects of all this on the long haul need to be taken into account: both the effects for the individual inmate and  society as a whole. Thinking in advance about possible consequences and negative side-effects of new policies and regulatory changes – despite the often easily accessible broad international research in many policy areas – is often not what politicians and policy makers are best known for. The same holds true for drawing lessons from overseas developments, especially if these lessons are not in tune with the government’s current “Tough on Crime” perspective.

This brings us back to San Quentin. Despite being one of America’s most notorious prisons in terms of its population and having the largest death row in the United States, the prison is also known for its focus on rehabilitation. This may sound like a contradiction, but with programmes ranging from anger management training, to training in journalism through the production of  an in-prison newspaper and even a university programme, inmates are given a chance to better prepare themselves for their release, or – if they will be inside for life – to at least occupy their minds. It is hard to imagine what Dutch inmates will do to occupy their minds once the announced reforms are implemented.

Space debris is growing from being a nuisance to becoming a threat. In the past, states launched objects into outer space without consideration for environmental effects or collision risks. Today, there is more awareness that outer space must be kept safe and clean for future use, and technical and legal rules for debris mitigation and remediation are needed.

Satellites usually operate for 10-15 years and are then left in space. Currently, some 20,000 objects larger than 5 cm in diameter are being tracked. Eventually they will re-enter the earth’s atmosphere, but depending on the size of the object and the height of the orbit, this can take a very long time.

Spent satellites can cause damage on earth, as the Cosmos 954 crash in Canada in 1978 demonstrated. Article II of the 1972 Liability Convention provides that in such a case the liability of the launching state is absolute.

Non-manoeuvrable debris can also collide with active satellites while in space, as seen during a head-on collision in 2009. The ISS had to carry out several manoeuvres to avoid debris. Another (partial) collision took place on 23 May 2013 and incapacitated Ecuador’s first satellite. Article III of the Liability Convention provides for fault liability in such cases. This can be a challenge hundreds of kilometers up in space, which perhaps explains why there is no case law. Damage has to be caused by a space object (does that include an inactive satellite or a lost screw driver?) to a space object, persons or property of another state. Environmental damage to space does not seem to be covered, but Article IX of the 1967 Outer Space Treaty does require states to enter into consultations when harmful contamination may occur.

The UN and debris mitigation

In 2007 the UN adopted the Space Debris Mitigation Guidelines. These non-binding guidelines can become binding through incorporation into national law, and could become customary law with sufficient state practice and opinio iuris. Although ‘hard law’ protagonists will argue that a new treaty is needed, the prospects are not so good. The last UN space treaty dates back to 1979 and has only 15 state parties. Admittedly, that treaty addresses the controversial issue of commercial exploitation of space resources, and consensus on a space debris mitigation treaty might be easier. Of course a treaty would be the ideal solution in the long run. The term ‘space object’ must be clarified to include inactive satellites, which remain the responsibility of the state and may give rise to liability for damage, even if they cannot be controlled. Binding rules may provide an incentive for states to boost their satellites to higher (unused) orbits or to de-orbit them so they burn up.

Next step: debris remediation

Calculations indicate that if 5 large objects are removed each year, the cascading effect predicted by Kessler could be halted. To reverse the trend, 10 large objects need to be removed each year. Hence, ‘active debris removal’ (ADR) is the next step, and several technical solutions are on the drawing board of public and private entities. They include nets, harpoons, tethers and more (see this movie about a Swiss solution). Commercial, legal and policy issues are manifold. Students of Leiden University’s LLM programme in Air and Space Law recently visited Dutch Space, an EADS Astrium company, which is also active in this field. Technical and legal challenges of active debris removal were addressed. Legal issues include questions of ownership, prior permission, liability, payment, security, insurance and the like. An analogy with marine law, especially the salvage and wreck removal conventions of the International Maritime Organisation, as well as with international environmental law are of interest in this context. This confirms once more that space law is not an isolated field but must be seen in the broader context of many other legal disciplines.