Study into the consequences of a status change in relations to the EU

The website BES-Reporter pointed to a report from the University of Curacao that researched the consequences of a legal status change in relation to the European Union. Today, Bonaire, Sint Eustatius and Saba can rely on the legislative and executive capacity of the Netherlands in the event of a closer relationship with the European Union. But even then, sufficient local capacity will remain necessary to implement European rules, funds, and oversight in practice.

This conclusion is stated in a new study by the University of Curaçao on the choice between the current OCT status and a possible status as an outermost region, UPG. The Ministry of the Interior and Kingdom Relations commissioned this report. The report is in Dutch with a summary in English. The latter reads:

Executive summary (English)

The choice between the status of Overseas Countries and Territories (OCT) and the status of Outermost Region (OR) determines the legal, economic, and administrative relationship of Aruba, Bonaire, Saba, and Sint Eustatius with the European Union (EU). This choice presents both opportunities and obligations and requires a careful assessment of the consequences for governance, the economy, and society.

As Aruba, Bonaire, Saba, and Sint Eustatius currently hold OCT status, the evaluation of advantages and disadvantages is centered on whether to maintain this status or transition to OR status. From a legal perspective, OCT status entails limited applicability of EU law, whereas OR status implies that EU law generally applies in its entirety, subject to possibilities for specific derogations.

Both statuses are equally advantageous for an island.  The value of OCT or OR status depends on a combination of the policy objectives pursued by the Kingdom and the island concerned, the legal frameworks within which these objectives are realized, and the actual opportunities and constraints facing the island.

The assessment framework in this report focuses on the extent to which a chosen status contributes to an island’s effective capacity: the ability to effectively represent and safeguard the interests of its population within the prevailing legal, economic, and administrative circumstances.

Provided there is mutual agreement between an island and the Kingdom, a change of status is legally possible within the existing European and Kingdom legal frameworks. At the same time, a status change entails significant legal obligations regarding the introduction, implementation, and enforcement of regulations. The practical feasibility of a status change therefore depends largely on the implementation capacity available to an island, whether or not supplemented by support from the Kingdom (and the EU).

Consequently, a change of status involves transitional costs. These primarily concern the costs of adapting and implementing laws and regulations resulting from the scope of EU law. Furthermore, these costs include the necessary institutional and organizational adjustments within governments and implementing agencies, such as strengthening personnel capacity and expertise and establishing administrative systems for supervision, reporting, and data exchange.

The economic advantages and disadvantages of transitioning to OR status are highly dependent on the economic characteristics of the island concerned, including scale, economic diversification, and institutional capacity. It must be taken into account that while access to European funds  can  contribute to economic development, it does not in itself guarantee sustainable economic growth. Ultimately, the ability to translate opportunities offered by EU funds into structural economic progress depends on the island’s capacity to effectively apply for, utilize, and report on these resources. This is therefore contingent on the island’s implementation and absorption capacity.

The choice for or against a change of status is not exclusively a legal or economic decision but is, to a large extent, the result of a political and administrative assessment. Central to this assessment are the islands’ right to self-determination, the Kingdom’s responsibility for the enforcement of EU law, the possibility of making exceptions within European law, and the administrative feasibility of a change of status.

The social impact of a status change becomes apparent in the contrast between existing vulnerabilities in the island’s socio-economic situation and what the status change would concretely alter in the lives of residents, for example in the areas of employment, purchasing power, and public services. The magnitude of these effects depends, among other things, on how the new status is implemented and on the institutional capacity available to the governments involved.

The experiences of the French overseas territories Saint-Barthélemy and Mayotte demonstrate that a successful status change depends primarily on careful preparation, sufficient implementation capacity, and a proper alignment between the status and  the economic structure. An insufficiently prepared transition can lead to administrative and financial risks.

In essence, the choice between OCT and OR status constitutes a coherent set of strategic trade-offs. At the political and administrative level, it must be determined whether local political will leans toward further integration into the European legal order or toward greater autonomy to define and pursue independent economic, social, and cultural development. A corresponding choice must also be made at the Kingdom level. At the legal level, it must be assessed whether there is a willingness to establish a legal framework that guarantees compliance with EU law. At the social level, existing vulnerabilities within the population, such as poverty and aging, must be considered. At the economic level, various indicators must be used to assess whether a status change strengthens economic resilience and mitigates existing vulnerabilities.

University of Curacao