Presentation by Island council member Sarah Wescot-Williams, August 20, 2009


Agenda point # 4. Corporate Governance

The request of government entails the "ratification of the resolution to amend the statutes of :


online casino

  1. Sint Maarten Telephone Holding Company NV 1)
  2. Sint Maarten laboratory Services NV
  3. Foundation "Kadaster en Hypotheekwezen" (cadastre and mortgages)

    1) In accordance with the draft amendment to the articles of incorporation of the Sint Maarten Telephone Holding Company, these articles are being amended "after prior approval of the island council of the island territory of Sint Maarten",

    In the case of the Sint Maarten Harbour Holding NV and the PJIA Holding NV the draft amendments to the articles of incorporation state that "the sole shareholder of the corporation mentioned herein has adopted a resolution in lieu of a general meeting of shareholders with due observance" etc. etc.

Corporate Governance is the manner in which corporations or companies are governed and regulated in general. Government-owned companies on Sint Maarten, such as the Harbor, Airport and Telem and others are limited liability companies and are governed by all regulations that govern "regular" limited liability companies.

In the case of government owned companies, the owner of these companies is the government/island territory in question. The government is therefore the shareholder.

In terms of who acts as shareholder, this can be the Executive Council or the Island Council.

In the case of Sint Maarten, the government-owned companies have undergone what we call operational audits. This is a review of how the company operates or does business. On the basis of the recommendations of these audits, changes have been made to the articles of incorporation and changes have been made to the internal operations of the companies.

It was also established that there was an urgent need to institute uniform policies for all companies owned by the island territory of Sint Maarten.

On the basis of the recommendations made in the operational audits, it was decided to expand the scope of corporate governance to include additional guidelines for the governance of government owned companies. Independent guidelines for all companies issued by the shareholder/island government were until then practically non-existent.

These guidelines and regulations for corporate governance have been developed by the government of Sint Maarten and include uniform policies for government-owned companies in the area of dividend declaration, appointment of directors, accountability, profiles of members of supervisory boards, contracting of work, hiring of consultants and external auditors and the institution of a regulatory body.

This package of corporate governance policies was presented to the Central Committee of the Island Council of Sint Maarten the first time for its deliberations on April 21st, 2008.

Directives by the shareholder to its companies must always be within the parameters of the laws governing limited liability companies.

Two points of interest remain in this respect, namely the position of the shareholder representative, which in the case of St. Maarten is the Lt. Governor, as he/she always represents the island territory, according to the Islands Regulation Netherlands Antilles.

In the case of companies owned by the Central Government, like e.g. Winair is, the shareholder (Central Government) usually authorizes a Minister to function as the shareholder’s representative.

Note also that corporate governance also applies to Foundations and in particular to government foundations. In this respect, several government foundations have undergone a similar process, with the articles of incorporation being amended to reflect better the legal requirements for foundations and government’s role in foundations.

Then there remains the tension between government’s role as a shareholder and the "political" responsibility that government has for these corporations. How often have we not heard politicians complain that while they have no formal role in the management of government owned companies, they are held politically accountable for the operations by these companies? Once people understand however how government-owned companies are supposed to be operated and who is responsible at what level, then it should be clear that companies cannot hide behind politicians, but they, the companies’ managements and boards are responsible, even personally responsible for their actions on behalf of government-owned companies. And it must be emphasized that these companies are accountable to the island council, ultimately. Like every other company is accountable to its shareholder. The reluctance we see from many government-owned companies to provide the island council with all information regarding their operations must become something of the past.

There is another huge difference between other corporations and those corporations belonging to government. Transparency in these operations must be practiced to the hilt and this transparency must be channeled to and through the shareholder, the island council. This body, the shareholder, through its shareholder rep. must be able and sufficiently knowledgeable to treat the information from its companies with the necessary prudency. But the companies must be accountable and not consider their owner, the island territory, a nuisance. It should not be so that I or my faction for example are left to wonder and ponder what a government-owned company is up to.

How this potential tension is managed, should not be left up to individual politicians, but should be channeled through the shareholder, again the executive or island council.

Now to several questions for the NA/Heyliger Executive Council:

What about the other Holdings? (SXM Harbor Holding Co. NV ; PJIA Holding (Houdster mij. ) NV

Do these Holding s not have to follow the same route as the Telephone Holding Co. and come to the island Council for ratification? If not, why not?

Is there a difference in the statutes of these companies or has this particular amendment already been ratified and incorporated in the Harbor Holding and the PJIA Holding?

What about the amendment to the articles of incorporation of the other companies and foundations of government not mentioned?

And now with respect to government-owned companies and foundations in general:

Can we receive a complete set of articles of incorporation of all government-owned companies and foundations? An up-to-date set?

When last have the companies and foundations of government submitted their reports to the shareholder? Can we get an overview of the status of these reports? What year and where the report is presently, with the ultimate goal of the island council receiving the reports of government-owned companies and foundations that we (the island council) have not yet received?

Can I ask of the government where matters stand currently with respect to the government-owned company Simpsonbay Lagoon Authority Corp? And at the same time may I suggest that the island council like it has done in the past again pick up the matter of the management of the S’Bay Lagoon in particular and the marine trade industry in particular with the view to settle some of the pending matters relating to this industry?

May I request the newly elected chairperson of the Central Committee to make this a matter of priority for the Central Committee?

Can the Executive Council inform the island council as to the position of the Kingdom government with respect to the agreement between them and the island government of Sint Maarten regarding corporate governance and the decisions of the island council of May 11, 2009?

How far did the executive council get with the enviro fund legislation , which for more than one month allegedly is at the Legal Affairs department? Can the island council be provided with a copy of this draft legislation, which according to a statement by the executive council on July 9th was "in the completion phase, but needed some fine tuning"?

What is the status of the recruitment of a managing director for the Sint Maarten Housing Development Foundation and who manages this foundation at this time?

Corporate governance as I mentioned before, included several presentations.

Due to the agreements made with the Kingdom partners and in particular the agreement to regulate at least 3 matters, viz the matters of board appointments, dividend payments and share acquisition/sale, these matters rightfully received priority.

However this island council has also dealt with the package of presentations relating to corporate governance to complete this matter.

The remaining included: appointment of directors; reporting to the shareholder; procedure for hiring external advisors; guidelines for bidding; guidelines concerning appointment and scope of services provided by external auditors; standard reporting formats.

In how far have these matters been incorporated in the "Code", and where such is not the case, when can we expect to finalize aforementioned items in the island council?