Accountability of GEBE Management

Table of Contents

Download the “landsverordening”

The public utility company GEBE has faced severe operational and financial issues, resulting in daily load shedding and economic disruption. These problems have been compounded by a significant hack that crippled the company’s ICT systems. This raises the question: can GEBE’s management be held accountable for this apparent mismanagement?

The National Ordinance amending Book 2 of the Civil Code of Sint Maarten, established on January 9, 2014, provides a clear framework for the liability of directors in cases of improper management. Specifically, Article 16 addresses this issue comprehensively.

1. Grossly Improper Management

Article 16 states that directors can be held jointly and severally liable for the deficit in the event of the company’s bankruptcy if there is grossly improper management. This management must be a significant cause of the bankruptcy. In the context of GEBE, the non-functioning of 3 out of 10 generators and the economic damage caused by daily load shedding can be considered grossly improper management.

2. Neglect of Obligations

The law requires the management of a legal entity to maintain proper records and prepare annual accounts in a timely manner (Article 15). If these obligations are not met, it is presumed that there has also been grossly improper management in other respects. GEBE’s failure to make timely investments in generators and the inadequacy of their ICT security point to a neglect of these obligations.

3. Joint and Several Liability

If it is proven that GEBE’s management has engaged in grossly improper management, the directors are jointly and severally liable for the deficit resulting from the economic damage and costs for replacing the generators and restoring ICT systems (Article 16, paragraph 1). This means that each board member can be held personally responsible for the financial damage.

4. Burden of Proof

The management can defend itself by proving that the improper management was not their fault and that they were not negligent in taking measures to avert the consequences (Article 16, paragraph 4). However, given the severe consequences of the mismanagement at GEBE, this would be a difficult defense to mount.

Critical Questions: Why Has the Management Never Been Held Accountable?

Despite the clear legal framework, the management of GEBE has never been held accountable for what appears to be significant mismanagement. This raises several critical questions:

  • Why has GEBE’s management never been held liable under Article 16 for the apparent gross mismanagement?
  • How has the continuous failure to maintain operational infrastructure, leading to daily load shedding, not triggered legal scrutiny and action?
  • What steps, if any, have been taken by regulatory bodies to investigate the neglect of obligations and the resulting economic impact on Sint Maarten?
  • Why has there been no legal action taken regarding the failure to secure ICT systems, which led to a crippling hack?
  • Has the government or relevant authorities reviewed the compliance of GEBE with its concession agreements, and if so, what were the findings?
  • What role have the supervisory and advisory boards played in addressing or ignoring these significant management failures?

These questions are crucial in understanding why there has been a lack of accountability and what systemic issues might be preventing proper governance and oversight.

Practical Implications for GEBE’s Management

The operational failures and the hack point to serious shortcomings in GEBE’s management. Here are some concrete points on which the management can be held accountable:

  • Preventive Maintenance and Investments: The failure to perform preventive maintenance and make timely investments in new generators indicates negligence.
  • ICT Security: The hack points to a lack of adequate ICT security and risk management. This is crucial for a utility company, given the reliance on IT systems for operational continuity.
  • Economic Disruption: The daily load shedding has a direct negative impact on the economy of Sint Maarten, further evidencing improper management.

Based on the legal grounds from the National Ordinance amending Book 2 of the Civil Code, GEBE’s management can be held accountable for the apparent mismanagement leading to the current crisis. By neglecting their obligations and failing to make essential investments and maintenance, GEBE’s directors have not acted as expected, paving the way for legal liability.

However, the persistent lack of accountability raises serious concerns. It is crucial that such matters are thoroughly investigated and, if necessary, that legal action is taken to ensure accountability and prevent recurrence. These measures are essential for restoring confidence in public services and the economic stability of Sint Maarten.