The Netherlands has many different supervisory authorities, including the General Inspection Service, the Health and Safety Inspectorate, the Netherlands Authority for the Financial Markets, the Netherlands Consumer Authority, De Nederlandsche Bank (the Dutch central bank), the Health Care Inspectorate, the Netherlands Competition Authority, and the Inspection Department of the Ministry of Housing, Spatial Planning and the Environment.
Supervision is aimed at influencing the behaviour of supervised parties. This can be done by providing information, giving instructions, offering compliance assistance and/or imposing compulsory measures. Many supervisory authorities are authorised to use enforcement instruments, such as withdrawing a permit, imposing an order subject to a penalty or imposing an administrative penalty, sometimes in combination with the publication of the enforcement measures in question.
Administrative supervisory authorities may, furthermore, work together with judicial authorities. For example, supervisory authorities can pass on to investigating officers much of the information obtained during the supervision. Those investigating officers can use the information obtained, where appropriate, in criminal investigations against the supervised party. This is all the more reason to give some thought to the role and position of supervisory authorities, and the parties supervised by them.
Supervisory authorities supervise compliance with legislation and regulations. This involves all activities that are performed to verify whether regulations are being observed. A distinction is often made in the supervisory authority’s policy between preventive and repressive supervision. Preventive supervision means the regular supervision of the applicable rules without there being any reason to suspect that the rules are being violated. The emphasis here is on providing information and advice to promote compliance with the legislation and regulations. If a supervisory authority establishes a breach of the rules, it will urge the offender to put an end to it. If the offender appears to be uncooperative, the supervisory authority may exercise its enforcement powers. Repressive supervision means that the investigation by the supervisory authority is aimed at investigating offences. The supervisory authority may have indications that a certain person, company and/or sector appears to be violating the rules. The supervisory authority will then specifically investigate whether or not the rules are being correctly observed. If an offence is established, enforcement measures will often be taken.
Supervisory authorities usually have very broad powers to investigate whether a supervised party is observing the rules. Their standard instruments include the authority to enter premises, demand information, inspect and make copies of business records and documents, inspect and take samples of goods, and search vehicles and their cargo. Supervisory authorities may furthermore require companies – and, incidentally, public authorities that develop business activities – to report certain information to a supervisory authority. In addition to these powers, they may also be awarded extra powers under a special act. However, those powers may be exercised only if it is reasonably necessary to perform the supervisory task. Also, the least onerous method must be used. The party involved may be forced to comply, since everyone is required to provide, within the stipulated term, all the co-operation that the supervisory authority may reasonably demand in exercising its powers. Failure to comply is a criminal offence.
It should be noted that companies may be subject to the supervision of several supervisory authorities. For example, in the case of an accident, supervising authorities may often be authorised to investigate the incident in question, which they may do either jointly or individually. To ensure that the investigation is performed properly and to avoid a great deal of extra or unnecessary work, it may be important to establish as soon as possible what each party will be investigating, what the possible consequences may be and how they can best be handled. Supervisory authorities can consult among themselves as to which of them will principally perform the investigation, supplemented by other supervisory authorities on the basis of their specific expertise. In that case it is important to carefully determine what powers may be or will be exercised by each authority as part of the investigation. This can give rise to conflicts between supervisory authorities, as is clearly apparent, for example, in the event of incidents in the aviation sector. In that sector the question frequently arises as to who has the disposal of the black box: the Safety Board and/or the Aviation Inspection Service and/or the Public Prosecution Service. This type of conflict may also occur in other sectors involving other supervisory authorities.
If offences are established, a supervisory authority may take enforcement measures using the enforcement instruments available to it, in addition to requesting or ordering the offender immediately to put an end to the offence. The available instruments are regulated by law. They may be reparatory sanctions, such as an order subject to a penalty or administrative enforcement, or punitive sanctions, such as withdrawing a favorable decision or imposing an administrative penalty. Administrative penalties, which have been regulated under the Algemene wet bestuursrecht (General Administrative Law Act) since 1 July 2009, benefit the administrative body that imposed the sanction, unless otherwise provided by law. In practice, these penalties may be quite substantial and it is up to the offender to demonstrate that the administrative penalty imposed is too high in light of the special circumstances involved.
Several supervisory authorities have developed specific policies as to which enforcement instruments they will use in particular situations. However, practice often proves to be more complicated than theory and discussions therefore regularly arise as to whether and, if so, what action must be taken against the offender.
ADMINISTRATIVE OFFENCE AND/OR CRIMINAL OFFENCE
If a supervisory authority establishes that an offence has been committed, a criminal investigation may also be involved, because violation of the rule in question is often a criminal offence. This may give rise to very complicated questions, such as questions pertaining to the co-operation between supervising authorities and the penal authorities, and the basis of the authority of supervising authorities.
For example, a supervisory authority may inform criminal investigators of its findings. That may even be standard policy. The Public Prosecution Service, for example, is often informed if an order is imposed regarding an environmental offence. The information gathered during supervision is then handed over to, for example, the environmental police, which may use the information as part of its criminal investigation. It is therefore possible that information that a company has handed over to a supervisory authority is used against it in a criminal proceeding.
This is not the case when a supervisory authority has officially demanded a statement from a person with a view to imposing a sanction. The supervisory authority must then inform this person that they have the legal right not to make a statement. Nevertheless, if they do, the statement given may be used against the offender.
Aside from acting as a person governed by public law, a supervising authority may also act as a special investigating officer under criminal law, should criminal law be applicable. In such a case, the supervising authority may use the authority and powers given to it by criminal law. That often leads to confusion for the offender, because the offender may not be aware that they are dealing with a criminal investigating officer rather than a supervisory authority. The consequences are often difficult to foresee. The confusion is often due to the fact that one and the same person is involved but holding two different positions. The offender or company in question often has no or little experience with enforcement action. It is essential that a company dealing with a supervisory authority that establishes an offence inquires, if necessary, into what powers the officer is exercising.
The information gathered during an investigation can be used either for administrative enforcement or for criminal enforcement. Companies are regularly confronted with, for example, an order subject to a penalty from the administrative body aimed at putting an end to the offence, and a transaction from the Public Prosecution Service for the same violation. That is indeed permitted. This is not the case, however, if both an administrative penalty and a criminal sanction are imposed (or about to be imposed), and a choice will have to be made. This is also often a matter of policy, but is not always conclusive.
All in all, the supervision of a company can be a tricky business. Particularly if offences are or may be established, a careful approach is advisable. If optimal choices are made at the earliest possible stage, a great deal of extra work and frustration can often be avoided.