THE
RECONSTRUCTION OF
ST. MARTIN AND
ST. BARTHELEMY
AFTER THE PASSAGE
OF
HURRICANE IRMA
Thematic public report
July 2021
Summary
Procedures and methods
..............................................................................
5
Deliberate
.......................................................................................................
7
Summary
........................................................................................................
9
Summary of recommendations
...................................................................
12
Introduction
..................................................................................................
13
Chapter I Different choices regarding the methods of State
intervention for the two islands of Saint-Martin and Saint-
Barthélemy
...................................................................................................
17
I - The characteristics of the two islands
........................................................
17
A - Two special bodies within the meaning of Article 74 of the
Constitution
..........................................................................................................
17
B - Different levels of economic development on both islands
............................
19
II - Different levels of state intervention on the two islands
..........................
22
A - A fully controlled reconstruction by the community of Saint-
Barthélemy
...........................................................................................................
23
B - Reconstruction dependent on financing and strong state support in
Saint
—
Martin
......................................................................................................
23
C - Reconstruction financed by the Dutch State through the World Bank in
Sint Maarten
.........................................................................................................
24
Chapter II Constrated rhythms of reconstruction and results
...............
27
I - Cooperation between the State and the two local authorities
....................
27
A - Exceptional and plural financial support
........................................................
28
B - An ambitious goal of reconstruction in St. Martin, to be contractualised
with the State
........................................................................................................
32
II - A near-complete reconstruction in Saint-Barthélemy
..............................
37
A - An organised reconstruction of Community facilities and buildings
..............
37
B - A quasi-neutral cost to the community
...........................................................
38
C - Lessons learned by the community
.................................................................
38
III - A reconstruction far from being completed in Saint-Martin
...................
39
A - Almost half of buildings and facilities rebuilt
................................................
39
B - A rebuilding of services only committed
........................................................
41
C - A development plan to be concretely declined
...............................................
41
D - Cooperation with the Dutch to rekindle
..........................................................
43
Chapter III
Completion of Saint Martin’s reconstruction
facing
important challenges
....................................................................................
47
I - An ambitious development and reconstruction plan still to be
carried out
......................................................................................................
47
The reconstruction of St.Martin and St. Barthélémy after the passage of Hurricane Irma - July 2021
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A - Strengthening local capacity for contracting authorities and public
order
.....................................................................................................................
47
B - Complete urban planning and prevention plan against natural hazards
..........
49
C - Provide the community with rules of law to resolve the issue of
abandoned property
..............................................................................................
50
II - A multiannual investment plan still unfunded
.........................................
50
A - Mobilising the necessary tax revenues
...........................................................
51
B - Securing a balanced fiscal and financial trajectory
.........................................
53
III - The vital continuation of technical support from the State
.....................
53
A - Adapt and modernise as a matter of priority a tax recovery delegated to
the State
................................................................................................................
54
B - Assess and adapt the partnership between the State and the community
to maintain an effective collaboration
...................................................................
55
General conclusion
.......................................................................................
59
List of abbreviations
....................................................................................
61
Annexes
.........................................................................................................
63
Replies from the administrations and bodies involved
.............................
67
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The reconstruction of St.Martin and St. Barthélémy after the passage of Hurricane Irma - July 2021
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Procedures and methods
In accordance with Article L. 143-6 of the Code of Financial
Jurisdictions, the Court of Accounts publishes an annual public report and
thematic public reports each year.
These works and their annexes are carried out by one of the six
chambers of the Court or by a formation involving several chambers and/or
regional or territorial Chambers of Accounts.
Three fundamental principles govern the organisation and activity of
the Court and the regional and territorial Chambers of Accounts, thus both
the execution of their controls and investigations and the preparation of
public reports: independence, contradiction and collegiality.
The institutional independence
of the financial courts and the
statutory independence of their members ensure that checks carried out and
conclusions drawn are free of discretion.
The contradiction
implies that all findings and assessments made
during a control or investigation, as well as all subsequent observations and
recommendations, are systematically submitted to the heads of the
administrations or bodies concerned; they may be made final only after
taking into account the replies received and, when appropriate, after hearing
the officials concerned.
Except for reports produced at the request of Parliament or the
Government, the publication of a report is necessarily preceded by the
communication of the draft text, which the Court intends to publish, to the
ministers and officials of the bodies concerned, as well as to other legal or
natural persons directly concerned. In the published report, their replies are
set out in the appendix of the text of the Court.
Collegiality
comes as a conclusion of the main stages of the control
and publication procedures. Any control or investigation shall be entrusted
to one or more rapporteurs. The investigation report, as well as subsequent
drafts of observations and recommendations, provisional and final, shall be
considered and deliberated in a collegial manner by a panel of at least three
magistrates. One of the magistrates acts as a counter-rapporteur and ensures
the quality of the checks.
The present investigation was conducted by an inter
—
jurisdictional
panel involving the Fifth Chamber of the Court of Accounts and the
Territorial Chambers of the Accounts of Saint Martin and Saint-Barthélemy.
The Fourth Chamber of the Court, under its competency in civil security
matters, was also associated.
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Investigation has involved many actors at regional, local, but also
national level. At the territorial level, the main actors involved are the
communities of Saint-Martin and Saint-Barthélemy, as well as their
different bodies, the prefecture of the Guadeloupe region, the prefecture of
Saint-Martin and Saint-Barthélemy and the attached state services, the three
social donors present in the territory (SIG, SIKOA and SEMSAMAR), the
company operating the airport of Grand'Case and the hospital centre of
Saint-Martin. The financial courts also worked close to the public
prosecutor of Basse-Terre. At the national level, the former interministerial
delegate for the reconstruction of Saint Martin and Saint-Barthélemy, the
interministerial delegate to major risks overseas, the Overseas Directorate-
General,
the
Directorate-General
for
Public
Finance,
the
French
Development Agency and the Caisse des dépôts et consignations were
requested.
The field survey carried out in the autumn of 2020 was supplemented
with exchanges with magistrates of the
Algemene
Rekenkamer,
the Dutch
Higher Supervisory Institution, which investigated the situation in Sint
Maarten and whose findings supported the observations of the present
report.
The draft report submitted for adoption to the Chamber of Council
was prepared and then deliberated on 9
th
of April 2021 by the inter-
jurisdictional formation, chaired by Mr Terrien, President of Chamber and
composed of Mr Colcombet, Senior Counsellor and Head of territorial
Chambers of Account, Mr Hayez, Mr Berthomier, Mr Saudubray, Senior
Counsellors, Mrs Toraille, Senior Counsellor, as rapporteurs, Mr Bouvier,
Senior Counsellor in Extraordinary Service, Mr Beauviche, Junior
Counsellor, Mrs Venera, Auditor as counter-rapporteur, Mr Cabourdin,
Senior Counsellor.
It was examined and approved on the 4
th
of May 2021 by the public
reports and program Committee of the Court of Accounts, composed of Mr
Moscovici, First President, Mrs Camby, rapporteur-general of the
Committee, Mr Morin, Mr Andréani and Mr Terrien, Mrs Podeur, Mr
Charpy and Mr Gautier, Presiding Officers, Mrs Hirsch, the Prosecutor
General, heard in her opinions.
The Court of Accounts
’ public reports are available online on the
website of the Court and the Regional and Territorial Chambers of
Accounts:
www.ccomptes.fr.
They are distributed by La Documentation Française.
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Deliberate
The Court of Accounts, deliberating in the Council Chamber in
ordinary formation, adopted the report entitled
The reconstruction of St.
Martin and St. Barthélémy after the passage of Hurricane Irma
.
It adopted its positions on the basis of the draft communicated in
advance to the Prime Minister, the bodies and local authorities concerned
and the replies sent back to the Court. Copies were sent, for information,
to the Minister of Economy, Finance and Recovery, to the Minister for
Territorial Cohesion and Relations with Local Authorities and to the
Overseas Minister.
The responses are published at the end of the report. They bear the
sole responsibility of their authors.
Participated in the deliberations: Mr Morin, Dean of the Presidents
of the Chambers, replacing the First President, Mr Andréani, Mr Terrien,
Mrs Podeur, Mr Charpy, Mr Gautier, Mrs Camby, Presidents of the
Chambers, Mrs Moati, maintained President of the Chamber, Mrs
Darragon, Mr Metzger, Mrs carrère-Gée, Mr Glimet Mr Berthomier, Mr
Bouzanne des Mazery, Mr Appia, Mr Homé, Mrs Toraille, Mrs Mazières,
Mr Seiller, Mrs Mercereau, Mr Mairal, Mr Duguépéroux, Mr Champomier,
Mrs Lignot-Leloup, Senior Counsellors, Mr Richier, Mr Autran, Senior
Counsellors in Extraordinary Service, Mr Diringer, Mr Serre, presidents of
regional Chambers of Account.
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The following were heard:
-
In his presentation, Mr Terrien, Chairman of the interjurisdictional
panel responsible for the work on which the views of the Court are
based and the preparation of the report;
-
in her report, Mrs Camby, rapporteur-general, rapporteur of the draft
before the Chamber of Council, assisted by Mr Bouvier, Senior
Counsellor
in
Extraordinary
Service,
Mr
Beauviche,
Junior
Counsellor, Ms Venera, Auditor, Rapporteurs before the inter-
jurisdictional formation responsible for preparing it, and Mr
Cabourdin, Senior Counsellor, counter-rapporteur before the same
formation.
-
in her oral observations, without taking part in the deliberations, Ms.
Hirsch, Attorney General, accompanied by Mr. Luprich, General
Deputy.
Mr. Thornary, General Secretary, served as the secretariat of the
Chamber of Council.
Done at the Court, 29 June 2021.
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Summary
In 2017, three hurricanes of exceptional violence hit the islands of
Saint-Martin and Saint-Barthélemy, 250 kilometres north-west of
Guadeloupe. The most devastating of them, Irma, caused considerable
damage to both territories.
Following emergency management, a phase of gradual re-
establishment of networks, organisation of access to care and re-opening
of schools has taken place for the benefit of the 50,000 residents of both
islands. It was at the end of these first two stages that the reconstruction
itself truly began. The French President of the Republic had announced
during his visit to the country on 28 October 2017 that it ought to be
sustainable and exemplary.
In March 2018, the State’s financial assistance
was estimated at more than EUR500 million at the inter-ministerial
meeting, two-thirds of which related to the reconstruction phase
1
. Part of
this a
mount has yet to contribute to the financing of the State’s participation
in the convergence and transformation contract signed with the community
of Saint-Martin in 2020, supporting part of its multi-annual investment
plan. If the Court recommends that the Overseas Ministry carries out a
precise and regular follow-up of the public funds mobilised for the
reconstruction of Saint Martin, an exact measure of the State’s financial
support for reconstruction should be presented only after the complete
implementation of this plan.
1
In addition to the financing of the State resources’ mobilisation in the emergency
phase estimated at EUR163 million, the State’s financial assistance included both
economic support to businesses, individuals and two local authorities to the total sum
of EUR140 million, as well as the mobilisation of EUR46 million from the solidarity
fund of the European Union, the financing of State property projects for the relocation
of its services for an amount of EUR18.2 million, the possibility for the Saint-Martin
community to subscribe for a EUR60 million subsidized loan, and the exceptional
participation of the State and its operators to the investment of the Saint-Martin
community up to EUR66.4 million.
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Different choices in the two islands, as regards to the methods of
reconstruction and the degree of State intervention
The difference in the methods of reconstruction and the degree of
State intervention is first explained by the characteristics of the two islands:
Although both enjoyed broad autonomy, in particular with regards to
taxation, Saint-Martin had not yet completed the establishment and
organisation of institutions resulting from the legislative reform of 2007.
The expertise and management capacities of the young community remain
inadequate. Moreover, its level of economic development remains lower
than that of Saint-Barthélémy, thus it does not offer it the same leverage.
In addition, the damage was significantly greater in St. Martin than
on the neighbouring island. In Saint-Barthélémy, the lower share of
precarious habitat and stricter compliance with construction rules in risk
areas may account for the slightest damage.
In this context, the community of Saint-Barthélémy supervised and
assumed responsibility for its reconstruction, with the State acting only on
an ad hoc basis to ensure financial continuity.
On the other hand, the community of Saint-Martin has received
significant support from the State and its operators, both in terms of
funding and strengthening of its human resources in management and
engineering. This collaboration was formalised in two agreements
concluded on 6 and 21 November 2017. Given the fragility of its
administrative and technical organisation and the complexity of the
operations to be carried out, it appears a
posteriori
that a direct
administration by the State of the reconstruction could have been justified.
However, the latter did not want a recently created community to be
divested of its competences, especially since it had expressed its
willingness to discard this possibility.
A near-complete reconstruction for Saint-Barthélémy
The community of Saint-Barthélemy, having learned from previous
climatic events and with technical services available and suited to these
circumstances, was able, without substantial external public support, to
quickly restore the continuity of public services essential to everyday life
and population displacement. The reconstruction of its destroyed heritage
is now well advanced. It is accompanied by a major effort to adapt
buildings and equipment in order to learn from the experience of Irma.
An unfinished reconstruction facing
major challenges in Saint-Martin
Despite the adoption of an ambitious EUR230 million development
plan agreed by the community in 2018, the restoration of buildings
The reconstruction of St.Martin and St. Barthélémy after the passage of Hurricane Irma - July 2021
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destroyed in Saint-Martin is still very partial: less than half of the building
stock and equipment is being rebuilt, with the exception of schools and
high schools that are now almost all upgraded. The restructuring and
strengthening of services are under way, but far from being completed. The
weak management base of the community led it to be able to obtain only
EUR25 million out of the EUR46 million allocated by the European Union
Solidarity Fund (EUSF) and to rely on a failed sytem of public orders. It is
true that the partition of the island with Sint Maarten, its Dutch side, has
made the mission of the French local authorities more complex, while
closer cooperation could foster a common development.
Thus, the completion of the reconstruction of Saint-Martin requires
that several challenges, that rely above all upon the community, the State
and operators, are met. It is first of prime importance that the development
plan materialised, by strengthening the local capacity of contracting bodies
and public order, by implementing the plan for prevention against natural
hazards and by ensuring that one complies with construction rules the same
way it is done at Saint-Martin, in order to reduce the risk of repetition of
the impacts of this type of disaster. Secondly, the necessary funding needs
to be sustained, in particular by mobilising the community’s tax resou
rces
to the best purpose. Finally, the State technical support will be maintained
and will continue to be decisive for management and expertise, but it will
have to be regularly evaluated and adapted to support the community of
Saint-Martin until it is able to exercise its powers on its own. This
necessary strengthening of collaboration concerns in particular taxation
and modernisation of tax collection.
The method of reconstruction chosen for Saint-Martin, balancing
community support and exercise of its own responsibility, has not yet made
it possible, almost four years after the hurricane, to complete an exemplary
and sustainable reconstruction. The experience gained by the State and the
communities affected by Irma is worth, in the future, sharing with other
ultramarine communities that are exposed to the same risks.
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Summary of recommendations
1.
Complete the updating of urban planning and intensify the
implementation of the administrative police of urban planning
(
community of Saint-Martin
).
2.
Extend and adapt the legislation on property in state of manifest
abandonment as stated in Articles L. 2243-1 to L. 2243-4 of the CGCT
in Saint-Martin
(Ministry of Overseas Territories, Ministry of
Territorial Cohesion and Relations with Local Authorities)
.
3.
Follow up on public funds mobilised for the reconstruction of Saint
Martin (
Ministry of Overseas Territories
).
4.
Formalise and implement a public order policy with the necessary
tools (
community of Saint-Martin
).
5.
Adopt a medium-term financial trajectory compatible with the
financing of the development and reconstruction plan (
Saint-Martin
community
).
6.
Carry out an impact study of the future tax reform (
community of Saint-
Martin
).
7.
Establish an effective collaboration between DRFiP and the
community of Saint-Martin (
Ministry of Economy, Finance and
Recovery and Community of Saint-Martin
).
8.
Take stock at the end of 2021 of the contributions and technical
support provided by the State and the AFD to the project of services
for the community (
Ministry of Overseas Territories, AFD, Saint-
Martin community
).
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Introduction
On August 30, 2017, off Cape Verde, the tropical storm Irma was
forming, and got bigger on August 31 to finally become a hurricane of
Category 2 and then 3 on the Saffir-Simpson scale. With gusts of wind
exceeding 300 km/h leading to heavy submersions on the coasts, the
hurricane Irma hit the French Antilles and devastated the so-called
Northern Islands during the night of September 5 to 6, 2017.
Map no. 1 :
geographical location
Source: Court of Accounts
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After the emergency management phase, a
“back to normal” phase
for the 50,000 residents began, with three imperatives: re-establishing
networks, organising access to care and reopening schools. To this end, in
order to coordinate the action of the ministries, a special inter-ministerial
delegation for the reconstruction of the islands of St. Barthélémy and St.
Martin was set up on 14 September 2017.
Despite the violent and exceptional nature of this hurricane, its
impact on equipment and materials has been contrasted. The analysis
carried out by the Directorate-General for Civil Security and Crisis
Management on behalf of the Overseas Territories Ministry in July 2018
found profound disparities between the two islands
2
. With nearly 56 % of
its infrastructure moderately to severely damaged or even destroyed, Saint
Martin had a damage rate three times higher than Saint-Barthélémy, where
only 18 % of the infrastructure was damaged. Another notable fact is that
in St. Martin almost 70 per cent of the damage involved buildings that had
been built in a risk zone.
With a different status and economic weight, the two local
communities also did not have the same capacity for reconstruction.
Saint-Barthélémy rapidly took charge of its reconstruction on its
own, with limited support from the State and, by the end of 2018, was able
to welcome tourists again, an important resource of its economy.
For its part, the community of Saint-Martin was engaged before the
hurricane in a process of restoring a severely degraded financial situation.
It set up reconstruction within the framework of an ambitious development
project. This project required a strengthening of its internal management
capacity, be it only for absorbing the large financial assistance announced
by the State at the end of the inter-ministerial committee of 12 March 2018,
estimated at around EUR500 million, one third of which was dedicated to
emergency measures and two-thirds to support the economy and
reconstruction.
2
However, these results must be nuanced, in the absence of a possible distinction by
satellite images between undamaged and slightly damaged buildings (both categories
were merged).
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As pointed out by the French Development Agency (AFD) for Saint-
Martin, "in the
face of a crisis of this magnitude, local institutions have had
great difficulties in reacting effectively. In fact, Irma has highlighted and
exacerbated structural weaknesses, both financially and organizationally
speaking, already identified by the local authority itself, as well as by the
State departments and the AFD
“
3
. This fragility may explain that, more
than three years after the hurricane, the reconstruction of Saint-Martin has
only started while it is almost completed in Saint-Barthélémy. While letting
the community, and at its request, organising reconstruction and carrying
out its own development project, the State has nevertheless committed
itself to strong support. An ambitious partnership was created, based on a
contractual approach and aimed at building an exemplary island for
sustainable development, while drawing lessons from the past and in
particular from Irma.
The two northern islands suffered the same cataclysm, but each was
subject to different methods and modalities of reconstruction, taking into
account their institutional and developmental characteristics. While the
reconstruction is now almost completed in Saint-Barthélémy, Saint-Martin
is still facing important challenges, even without mentioning the specificity
of
the
island,
divided
between
France
and
the
Netherlands.
While many reports have been released on crisis management, the
Court of Accounts has initiated an investigation into the reconstruction of
these two French islands. It was particularly interested in the
modus
operandi
chosen for the reconstruction of Saint-Martin, in that case a
complex system based on strong support from the State and AFD, as well
as an active engagement of the community. Before it could be
implemented, this
modus operandi
required that several preliminary steps
had to be taken, namely organizational audits, the mobilisation of technical
experts as well as the gradual strengthening of the decentralised services of
the State and the administrative capacity of the community. The
intervention of the financial courts, within a sufficient time after the start
of the reconstruction, allowed them to assess the first results and the
relevance of the chosen method.
3
Agence française de développement,
Note to the Ministry of Overseas Territories on
the system of accompaniment of the community of Saint-Martin
, April 2019.
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The reconstruction of St.Martin and St. Barthélémy after the passage of Hurricane Irma - July 2021
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Chapter I
Different choices
regarding the intervention modalities of
the State for the two islands of Saint-
Martin and Saint-Barthélémy
I -
The characteristics of the two islands
A -
Two special bodies within the
meaning of Article 74 of the Constitution
1 -
Communities with a wide range of competences
In the light of the constitutional revision of March 2003, Act No.
2007-223 of 21 February 2007 and Act No. 2007-224 of 21 February 2007
laying down statutory and institutional provisions relating to the overseas
territories established, instead of the communes of Saint-Barthélémy and
Saint-Martin, two new overseas communities governed by Article 74 of the
Constitution. Since 2008, these communities have exercised the powers
previously vested in the commune, department and region of Guadeloupe,
as well as those transferred to them by the State, including in the field of
law.
Thus, they have fiscal autonomy and important competences vis-à-
vis communities governed by common law, particularly in the areas of
urban planning and economic development. In addition to this are road
transport, maritime services of territorial interest, roads, the environment,
access to work for foreigners, energy and tourism within the field of
competency of these two communities.
In other domains where laws and regulations apply automatically,
they may be adapted to the particular organisation of these overseas
communities.
Moreover, the creation of the two communities was accompanied by
a strengthening of the presence of the State with the institution of a deputy
Prefect. The Prefect of Guadeloupe remains the representative of the State
in Saint-Martin and Saint-Barthélémy, but the deputy Prefect ensures the
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effective direction of the local government services. The prefecture is
located in Saint-Martin and a counter is located in Saint-Barthélemy.
Regarding the relationship with the European Union, on the 1
st
of
January 2012 Saint-Barthélemy acceded to the status of Overseas Country
and Territory (OCT). If the OCTs have customs competence and are
associated with the European Union, they are not subject to the application
of Community law. This status helps facilitate trade with the United
States
4
.
On the other hand, the community of Saint-Martin made a different
choice, becoming an outermost region (OR)
5
. It thus remains eligible for
Community funds.
In accordance with this method of fiscal autonomy, the tax revenue
of the taxpayers of Saint-Barthélémy and Saint-Martin is a full and
complete revenue for each community. No national tax is therefore levied.
Communities also have the power to determine their own fiscal policy. In
Saint-Martin, however, the community came to an agreement with the
State to manage the tax recovery.
2 -
An assimilation of the new institutional construction not fully
completed for Saint-Martin
The hurricane hit in 2017, when the community had not yet
overcome the challenges associated with its institutional transformation of
the years 2007-2008. Its urban planning was committed but not yet
completed, its stock of equipment and building was aging and not suitable
to resist to the violence of a climatic cataclysm of such a magnitude. For
example, the multimedia library, which had just been completed, was
destroyed by Irma.
The community’s very limited capacity for action was still
unsuitable to deal with the multiple and complex challenges of its very
broad field of competence. As of December 31, 2015, the community had
a proportion of managers (category A) 25% lower than the national average
(6.7 % against 9.3 %). The direct and indirect consequences of the under-
administration that had prevailed up to the institutional change were far
from being overcome.
In order to help Saint-Martin continue to adapt and strengthen its
services, the State had formally placed itself in the position of a partner and
support of the community, within a contractual framework. AFD was also
mobilised. However, the services of the State, in particular those of the
Directorate for the Environment, Planning and Housing (DEAL in French),
had not yet the sufficent resources for their full exercise. The information
system, allowing tax recovery carried out by the Department of Public Finance
4
The status of OCT is based on an association scheme. The territories concerned are
considered foreign territories where only part of Community law applies.
5
The OR regime is the one in force in the overseas departments and regions. It allows
for the applicability in principle of the whole Community law, original and derived.
Some adaptations may nevertheless be justified by the “economic and social
deve
lopment of these regions”. The
ORs territory is an integral part of the European
Union.
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(DDFiP) of Guadeloupe, was not fully adapted to the specificities of local tax
provisions.
3 -
Sint Maarten and Saint Martin, the need for
concerted action
The dual nationality of the island of Saint Martin, without a proper
border between the French and Dutch parts, is at the heart of its economic
and social balance.
The Dutch territory of the West Indies having
the status of “country”
Sint Maarten enjoys a high degree of internal autonomy. The Constitution of
Sint Maarten was adopted on 21 July 2010. The Territory has a
democratically elected Parliament and its own Government responsible for
drafting legislation on internal affairs. Sint Maarten has his own Ministry of
Justice and a common central bank with Curaçao, the monetary unit being
the Caribbean Florin. In addition, like Saint Bartholélémy, Sint Maarten
adopted the statute of OCT.
The Executive of the Kingdom of the Netherlands is represented by
a Governor. At his or her side, there is a representative of the Netherlands
where all Dutch Ministries are represented, the exception being Defence
and Foreign affairs, areas
which remain within the Kingdom’s competence.
The Netherlands cooperates with the Sint Maarten authorities for Justice,
fight against corruption and international crime, as well as to ensure public
order.
The coexistence of two communities with different nationalities and
European statutes on the same island territory, but with the free movement
of the inhabitants, requires a much closer cooperation. The differences of
status and the instability of the governments of Sint Maarten (ten
governments in ten years) made this cooperation difficult. Today, this
cooperation is not commensurate with these challenges.
B -
Different levels of economic development on both
islands
1 -
The economic situation of Saint-Barthélémy
With an area of 21 km², Saint-Barthélémy is a dry island, where
water is produced by desalination. It has a tropical maritime climate.
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Map no. 2 :
the island of Saint-Barthélémy
Source: Court of Accounts
In 2016, the date of the last census, Saint-Barthélémy had a population
of 9,793 inhabitants, a stable population since 2013. It is a population with a
large majority of European origin. The foreign community (also mainly
European) accounts for only 12 % of the population. Until the middle of the
XX
th
century
, the island’s economy was
based on agriculture, fishing and free
port activity. Since the acquisition in 1957 of a property by David Rockefeller,
the business has resolutely turned into high-end tourism (villas rentals, hotels,
pleasure-boating, cruises) mainly for a North American clientele (70 %). The
economic sector is oriented towards services related to the construction of hotel
facilities while remaining strongly supported by public order.
Saint-Barthélémy is prosperous, with a gross domestic product (GDP)
estimated at EUR 35,700 per capita in 2014 and a low unemployment rate (4.3
% in 2015). However, this favourable situation relies on the island of St. Martin
and, in particular, the port and airport infrastructure of Sin Maarten.
Relationships between the two islands are numerous in particular in terms of
tourist links and freight traffic.
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2 -
The economic situation of Saint Martin
Map no. 3 :
the island of Saint-Martin
Source: Court of Accounts
In 2016, Saint-Martin had 35,746 inhabitants, that is to say 695
inhabitants/km². During the 1980s, the territory went through an
unprecedented population growth in France, withSaint-Martin seeing its
population multiplied by 3.5 in less than ten years. The foreign community
was estimated at 35 % of the population, almost half of which are Haitian;
The illegal population was estimated at 8,000.
The economy of Saint-Martin has been resolutely oriented towards
tourism, thanks in particular to the incentives for tax exemption as
enshrined in the “Pons” Act of 1986. This development
model has led to
excessive investments in some specific sectors, destabilising the economic
sector as a whole, without correcting the developmental weaknesses of the
territory. This sector mainly consists of services, trade and construction
companies. Agriculture, salt marsh exploitation and fishing are now
marginal activities.
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Saint Martin is a territory suffering from multiple imbalances, with a
young, low-skilled population marked by high precariousness and high
unemployment and a large informal economy. Activities are, by and large,
related to meeting the needs of locals and tourists.
On the other hand, as in other French ultramarine territories, Saint-
Martin is in competition with its Dutch neighbour, where regulation is
more liberal, taxation and social policies less favourable and operating
costs lower. In a context of free movement, these differences put Saint
Martin in a difficult situation
6
. GDP per capita, which is lower than that of
Saint Barthélémy and the Dutch part, is estimated at EUR 16,572 per
inhabitant (2014 data). The unemployment rate stood at 33.9 % in 2017.
II -
Different levels of state intervention on the
two islands
In addition to these distinctions between the two islands in terms of
institutional and administrative organisation and level of economic
development, the importance of destruction and its impact have also been
different.
In general, while the violence of the hurricane was similar across the
three territories of the Northern Islands, the impact of the hurricane varied
according to the types of buildings, their design, the quality of the
structures and their location.
Table No. 1 :
identification of the state of the buildings of Saint-
Barthélémy by satellite (2017)
Destroyed
buildings
Severely
damaged
buildings
Moderately
damaged
buildings
Little or no
damaged
buildings
206 buildings
(3 % of the
stock)
157 buildings
(2 % of the
stock)
832 buildings
(11 % of the
stock)
6,389 buildings
(84 % of the
stock)
Source: Saint Martin’s
DEAL based on data from the Copernicus programme
Table No. 2 :
identification of the state of the buildings of Saint-
Martin by
satellite (2017)
Destroyed
buildings
Severely
damaged
buildings
Moderately
damaged
buildings
Little or no
damaged
buildings
2,525 buildings
(20 % of the
park)
1,350 buildings
(11 % of the
park)
3,000 buildings
(23 % of the
park)
6,824 buildings
(47 % of the
park)
6
Sint Maarten has the only international airport and deep-water port to accommodate
cruise ships (1.67 million cruise passengers in 2016).
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Source: Saint Martin’s DEAL
based on data from the Copernicus programme
Saint Martin experienced a much larger amount of destruction. The
share of undamaged or low-damaged property is 47 %, while in Saint-
Barthélémy, it is of 84 %. Destroyed buildings account for 3 % of the
building stock in Saint-Barthélémy compared to 20 % in Saint-Martin. The
lower proportion of precarious habitat and stricter compliance with the
rules limiting construction in areas at risk contribute to the slightest damage
in Saint-Barthélémy. One can notice that nearly 70 % of the damage to the
island of Saint-Martin has affected buildings located in a risky area, and
the community of Sint Maarten reports a level of destruction as high as its
French neighbour.
Thus, Saint Martin suffered the most from extensive destruction and
damage.
These differences have led to a different solicitation of the State by
these communities for the reconstruction of their territory. In both cases, the
method used differs from that used in the Dutch part by the Dutch State, which
preferred acting through the World Bank.
In order to carry out its work and coordinate that of the ministries, on
14 September 2017 the French Government set up an interministerial
delegation for the reconstruction of the North Islands and an inter-ministerial
committee for the reconstruction of Saint Martin was set up in November 2017.
Still formally in force, although it has not met since September 2018, it is
chaired by the Prime Minister, assisted by the ministers and board of directors
involved.
A -
A fully controlled reconstruction by
the community of Saint-Barthélémy
The reconstruction of public facilities in Saint-Barthélémy was
almost entirely overseen, financed and supported by the community, with
the State acting occasionally to ensure financial continuity.
B -
A reconstruction dependent on
the financing and strong
State support in Saint-Martin
From the outbreak of the crisis, the Government wanted to learn
fully from Irma and accompany exemplary reconstruction, taking into
account all dimensions of sustainable development and the most successful
environmental standards. Crisis management highlighted straight away the
long-standing fragilities of the administrative and technical organisation of
the community. To compensate for these, the State had to put in place
significant administrative and technical support, coming from metropolitan
France and neighbouring departments, which was not compatible with the
statutory autonomy stated in article 74 of the Constitution.
The hypothesis of direct administration by the State for the
reconstruction based on the provisions of Article L.O. 6321-35 of the
General Code of Local Authorities (CGCT) could have been considered.
Pursuant to these laws, the State representative has exceptional powers in
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the event of malfunctioning of the territorial institutions. The Government
has not opted for this possibility. In view of the complexity of the
reconstruction process in Saint-Martin, of a unfinished establishment of the
new institutions and of the weaknesses of its administration, the decision
may be surprising. But the State, although organising significant support,
did not want the community, ten years after its creation and while an
electoral renewal had taken place shortly before the hurricane, to be
divested, even temporarily, of its powers. The community had not
considered it, showing for the beginning the willingness to take control of
its future.
The form of State support to the community emerged this way and
was formalised in the two agreements of 6 and 21 November 2017.
C -
A reconstruction financed
by the Dutch State through the World
Bank in Sint Maarten
For the reconstruction of the Dutch part of the island, the Dutch
Government decided to use an investment fund handled by the World
Bank. This trust fund is endowed with EUR470 million out of the EUR550
million of public funding dedicated to the reconstruction of the island. Its
operation required the approval of the projects by both the Netherlands and
the community of Sint Maarten.
This reconstruction modality turned out to be difficult to implement.
In its initial findings
7
,
the
Algemene
Rekenkamer,
the Dutch Supreme Audit
Institution, noticed that these procedures took a long time and can
potentially lead to delays. As a result, repairement works of electricity
networks and water storage systems remained on hold for a long time, as
long as the body responsible for it was not using the tendering procedure
as required by the World Bank.
In particular, the SAI noticed that the main obstacle to rapid
reconstruction was the lack of labour force and expertise on the island. It
pinpointed the dilemma between the need to act with caution with regard
to the law, and the need for a rapid reconstruction of the infrastructures.
Caution prevailed, and a large share of the funds was spent on the planning
and financing of existing plans. This situation has temporarily deprived the
population of Sint Maarten of tangible results regarding reconstruction
projects financed by the investment fund. By spring 2019, though, more
than half of the Dutch contribution had already been paid.
7
Algemene Rekenkamer
,
Focus on the Dutch contribution to the reconstruction of Sint
Maarten,
2018.
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CONCLUSION
The hurricane Irma, of exceptional violence, hit two French
overseas communities in September 2017, whose special status acquired in
2007 granted them with great autonomy, particularly in terms of taxation.
In terms of economic development, the situation in Saint-Barthélémy is
much more favourable than that of Saint Martin.
With regards to these different contexts, plus heavier damage in
Saint-
Martin, the State’s support to both communities, as well as the
methods chosen for the governance of their reconstruction, have been
different. The moderate level of State support to a reconstruction fully
controlled by the community in Saint-Barthélémy contrasts with the
extensive and protracted support it is giving to Saint-Martin for
reconstruction based on close collaboration between the State and the
community. To this end, the Government did not wish to temporarily put
Saint-Martin under the direct administration of the State or to divest it of
its powers, even though the complexity of the reconstruction and the under-
administration of the community could have allowed it. The arrangements
chosen by the Netherlands for the territory of Sint Maarten, very different
from those adopted by France, do not, to this date, represent a convincing
alternative.
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Chapter II
Contrasted rhythms of reconstruction
and results
While both communities benefited from the support and cooperation
of the State, the technical and financial support provided to Saint Martin
was significantly greater, taking into account the resources of its
administration, its economic situation and the extent of the damage
suffered.
These differences in the situation between the two communities also
explain that they are now experiencing contrasting situations concerning
their reconstruction: while it is almost completed in Saint-Barthélémy, it is
far from being completed in Saint-Martin.
I -
Cooperation between the State
and the two local authorities
In order to carry out the reconstruction, the State found itself in a
position of support very different from what it usually encounters for such
disasters. It had to take a three-fold action to ensure the financial and
budgetary viability of the two communities, relocate its services to meet
the needs of the population and provide Saint-Martin with a demanding
and innovative support, so that the community could fully take part to the
reconstruction.
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A -
Exceptional and plural financial support
The State has endeavoured to ensure the financial continuity of both
communities by adapting its interventions to their particular institutional
situations and needs. While for Saint-Barthélémy this support was only for
one financial year, it was set up in a multiannual perspective for Saint-
Martin. To this institutional solidarity were added those of civil society,
several local and regional authorities and the European Union.
1 -
Saint-Barthélémy benefited in 2018 from an exceptional relief
of burdens by the State
The community was enjoying a favourable financial situation at the
time of the hurricane. The State, taking into account the consequences of
the temporary cessation of economic activity on the community’s
resources, including the reduction in tax revenues, cancelled the
contribution that the community should have made as part of its overall
negative compensation allocation for that exercise. The community of
Saint-Barthélémy, a net contributor to the State budget, benefited from a
reduction in charges of EUR2.88 million in 2017. This measure was
accompanied by specific business reliefs, eased access to the part-time
work
activity scheme and a moratorium on employers’ social security
contributions.
2 -
The State compensated for Saint Martin’s loss of revenue
In Saint-
Martin, the State’s financial support was aimed at offsetting
the loss of tax revenues due to the fall in economic activity.
The balance of the endowments for 2017 (EUR10 million) and the
compensation for 2017 of the property tax relief (EUR12.1 million) were
very quickly paid. An exceptional operating allocation has been allocated.
Emblematic of the national solidarity effort, this allocation was made up of
tax drains on other compensatory allocations.
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29
In accordance with the protocol signed between the State and the
community as early as October 2017, this exceptional allocation was
determined on the basis of a joint analysis of the community’s financial
situation, its own resources and the trajectory of economic recovery. In
practice, the amount of the endowment was paid in reference to the amount
of the community’s tax revenues. For example, the State paid an
endowment of EUR25 million in 2018. As at 31 December 2018, the level
of total revenue amounted to EUR110 million (EUR85 million in tax
revenues collected, plus EUR25 million in endowment), which represents
an increase of 28.1 %
8
compared to 2017.
In 2019, the application of the exceptional clauses for payment
resulted in diverging interpretation between the State and the community.
The readability
of the community’s financial situation has
indeed
got more complex with the unilateral repayment of EUR17 million by the
community of its Supplementary Welfare Allowance (RSA in French) debt
to the Benefits Office (CAF
9
in French) and the budgeting of its entire
investment programme. This payment deteriorated the treasury situation of
the community without being part of a protocol for the resolution of cross-
debts between the community and the CAF, which owed EUR17 million
to the community. This situation led to the determination of new payment
dispositions.
The protocol has therefore been amended and the community
committed itself to increasing its operating revenues, controlling the
evolution of its operating costs, improving the rate of implementation of its
multiannual investment programme (MIP) and adopting a charter for the
prevention of corruption. In return, the State provided an endowment of
EUR16.1 million to finance investment expenditure incurred in 2019 under
the PPI.
8
In 2016, the amount of tax revenue was EUR97.46 million, the highest amount since
the creation of the community. This amount was EUR73.4 million in 2017.
9
The community has a significant and long-standing debt vis-à-vis CAF and the CAF
also has a smaller debt vis-à-vis the community related to the resource levy imposed by
the community on the RSA.
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30
Table No. 3 :
exceptional payments from the State to the Community
of Saint-Martin
2017
2018
2019
Compensation for the
reduction of property taxes
EUR12.1
MILLION
Exceptional
operating allocation
EUR25.0
MILLION
Exceptional investment
allocation
EUR16.1
MILLION
Total
EUR53.2 MILLION
Source: DGOM
–
Community of Saint-Martin
These payments (EUR53.2 million between 2017 and 2019) allowed
the community to maintain the cash flow needed to meet its expenses, without
compromising its operating financial balances
10
.
The State also supported the reconstruction of social housing by
contributing EUR6 million
11
to social donors.
3 -
Both communities have benefited from national solidarity
Beyond budgetary efforts, national solidarity has also resulted in
multiple donations from local authorities and the private sector (companies,
associations, individuals). Saint-Barthélémy and Saint-Martin received
EUR0.66 million and EUR1.62 million respectively between 2017 and
2018.
12
10
Taking as a reference the level recorded in 2016 (EUR97.5 million), the tax revenue
loss between 2017 and 2020 is estimated at EUR47.2 million.
11
During the contradiction phase, the local authority clarified that the development
company SEMSAMAR, of which it is the main shareholder, did not pay dividends to
its shareholders in return for the aid obtained, which would amount to a loss of profits,
estimated, according to its figures, at EUR 3 million.
12
In addition, according to the Saint-Martin community, donations from the private
sector (mainly individuals) that passed through the Fondation de France should be
added: By the end of August 2020, EUR10.31 million had been earmarked for projects
in Saint-Martin and EUR0.43 million for projects in Saint-Barthélémy, for a total of
EUR10.74 million.
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31
4 -
The mobilisation of the European
Union Solidarity Fund has been limited
European solidarity expressed itself through the mobilisation of the
European Union Solidarity Fund (EUSF) and the adjustment of the
European Structural and Investment Funds for the territory of St. Martin
13
.
In accordance with the EUSF rules, on 11 July 2018 the European
Commission granted EUR46 million in financial assistance for the
reconstruction of Saint Martin, provided that the use of the fund took place
within 24 months of the payment of the contribution to France. These funds
included a priority right granted to the community by the State, applicable
until December 31, 2018. This right has been postponed twice, to 31 March
and 30 September 2019, in order to take account of delays in credit
consumption and to enable the community to make the most of this
European financial support.
Given the difficulties in submitting invoices by the community and
in order not to lose the balance of funds available, the reallocation of the
credits to Ministries that reported extra-expenditures in the context of crisis
management was considered. In total, of the EUR20.59 million eligible for
this repayment, EUR19.61 million
14
had been effectively covered by the
EUSF at 31 December 2019.
Even though the funds
’ credits
have been fully committed, the
community did not benefit as much as it would have been possible because
it was unable to submit the corresponding invoices. Together with its
departments, it received EUR25.4 million in repayments (payments in the
form of advances and deposits) from the EUSF. However, these
reimbursements are less than the EUR38.5 million of invoices submitted
in the 14 implementation reports and sent to the prefecture of Guadeloupe
between March 2018 and September 2019. This difference is due to
invoices that have been discarded for non-compliance of public order rules.
The community has extensively applied the concept of emergency
situation. However, State services have considered that the emergency
situation rhetoric could not be called upon by the community beyond
October 9, 2017, the estimated date of
“back to normal life” o
n the territory.
The Court notes, however, that this deadline, set by the prefect of
the Guadeloupe region, was formally communicated to the community
13
Operational programme ESF-State and ERDF-ESF Saint Martin 2014-2020.
14
Some ministries did not, however, complete the reallocation procedure, while
others received a transfer order only in 2020 (for a total amount of EUR0.92 million).
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32
only on 19 August 2019 with a retroactive effect over almost two years. As
a result, the community have issued many orders since the end of 2017,
without knowing formally that the emergency situation had come to an end.
The application of emergency situation in post-Irma public
procurement
The imperative situation is circumscribed to external phenomena,
unpredictable and irresistible for the buyer. The occurrence of such a disaster
could therefore justify the application of Article 30 of the 2016 Public
Procurement Code, offering the possibility of derogating from the rules of
public order. However, the use of contracts granted without advertising or
competition must be explicitly justified and strictly limited to the services
required to cope with the imperative nature of this urgency. Thus, as the date
of the occurrence of the phenomenon moves away, resorting to this procedure
progressively loses its legitimacy.
Even in the absence of a formal decision on the end of this
emergency period, this out-of-common-law scheme did not exempt the
community from respecting the fundamental principles of public control,
namely the principles of equal treatment of candidates, freedom of access
and transparency of procedures.
B -
An ambitious goal of reconstruction in St. Martin, to
be contractualised with the State
1 -
A very ambitious reconstruction committed stance
The objective of the State was to provide the necessary financial
support and mobilise its services and bodies that could potentially provide
technical support to the community. It pledged to strengthen its
decentralised services on the territory, so that it could focus and consolidate
more its mission of controlling compliance with the law and tax recovery.
For the community, it was more a matter of committing itself to
implementing the reconstruction, respecting a financial trajectory
guaranteeing its financial balances. This commitment essentially concerns
its ability to act in a sustainable way within its field of competence, through
the acquisition or strengthening of planning and programming methods, as
well as by optimising the financial, human and organizational resources
that this requires.
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33
In accordance with the desire of the President of the Republic to
seize the opportunity to build an exemplary island in terms of sustainable
development
15
, this partnership has set very ambitious perspectives
However, they rapidly turned out to be particularly difficult to implement,
even though the objectives set were not specified and the steps to be taken
were not clearly sequenced.
2 -
An unprecedented mobilisation of support to help the
community carry its reconstruction out
As previously pointed out, in 2017, the administrative and technical
potential of the community was characterised by under-management and
limited capacity of the contracting authorities.
As part of its partnership with the State, and in order to enable the
definition and implementation of a large-scale reconstruction plan, the
community made a number of commitments in the different agreements
concluded: production of a treasury plan, carrying out a full audit of its
finances, drawing up a plan to optimise operating expenditure and a
multiannual investment programme (MIP), and conducting various actions
in the field of urban planning. To achieve these commitments, the
community needed to strengthen its management capacity. To help it in
this task, the State pledged to mobilise its operators.
With this in mind, the partnership provided for the involvement of
AFD (
Agence française de
Développement
) in support of the community.
The State, in addition to financing the intervention of this operator, has also
mobilised the
Caisse des dépôts et consignations
(CDC) and its support
services.
a)
Innovative and decisive mobilisation of AFD
The support of AFD for the benefit of the community of Saint-
Martin had two objectives: structurally strengthen the technical and
financial skills of the community and facilitate the implementation of its
investment program. To this end, AFD articulated its intervention in three
phases.
On the basis of the findings made during the first phase of the
financial and organizational expertise, a technical assistance programme
15
Speech delivered in Cayenne on October 28, 2017.
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34
was drawn up during the period 2018-2019. Then, during the second phase,
four technical assistants were mobilised from September 2018 to June
2019, including a coordinator of the Executive and the General Directorate
of Community Services. From September 2018 to April 2020, a Technical
Coordinator was put in support of the Technical Services Directorate. Two
sectoral experts intervened to the Human Resources and Water
Management Department. The scheme included sectoral support in
finance, public order management and urban development. The AFD also
led a mission with Atout France to support the community in the
development of its tourism strategy. A third phase, launched in 2020,
extended the expertise regarding public order management and
engineering.
Fully financed by the Overseas Territories Ministry, the overall cost
of this scheme at this stage is up to EUR1.66 million.
b)
A strong State support for community services
In addition to its support to the community, reinforced by the
increase in the number of the workforce in the deconcentrated services and
the mobilisation of its operators and bodies, the State also provided human
support and expertise.
During 2018, the Ministry of National Education assigned a civilian
administrator to the Vice-Rector, made available to the community to
support the reconstruction of school facilities. This support, still effective
today, has been conducted in close coordination with the
project managers’
reinforcement organised by AFD.
In the area of urban planning, the Ministry of Housing has developed
a workshop-approach so that residents, elected officials and administrative
officials jointly elaborate on a local development strategy.
Initiated in the course of 2019, this approach, aimed at facilitating
the conduct of urban planning projects, was interrupted due to tensions
between the State and the community in September 2019 regarding the
adoption of the Natural Hazard Prevention Plan (NHPP). It ought to be
relaunched soon.
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35
The State had also pledged that several general ministerial
inspections would conduct an economic audit of the territory. The report
“
What strategy for economic and social development for Saint
—
Martin and Saint-Barthélémy?
”
recommends
16
strengthening a tourism
strategy oriented towards a high-end public. This would require an
upgrading of facilities, a tax simplification and the development of sectoral
schemes for other economic activities (fishing, agriculture, ship
repairement trade). In addition, the report calls for strict management of
social benefits not to foster a suffered immigration.
While the community did not agree with all of these proposals, it
nevertheless shares the strategic direction on tourism and has already
embarked on some reforms, such as taxation.
Other inspection missions were carried out, including with the
Water Service, and a mission on joint-ownership was planned in the fall of
202. However, it has not been achieved yet due to the sanitary crisis.
c)
An involvement of the Caisse des dépôts et consignations
In early 2018, the Bank of the Territories supported several
initiatives funding the expertise and state of digital infrastructure. It co-
financed the updating of the plan for digital development and the
development
of
the
“Tintamarre”
project
for
the
burial
of
telecommunications networks. Within the framework of this project, it
undertook to finance the creation, with its own funds, the supporting body
of the community and operators.
3 -
Strengthening of the State support and control mission
The strengthening of the permanent representation of State services
in Saint-Martin was already undergoing in 2017 before the hurricane
occurred. The March 2018 report, cited
above,
notes that the upgrade plan
drawn up by the Prefect Delegate in 2007 was still not fully implemented.
This upgrade is now under way with the establishment of territorial units
(Directorate of Environment, Planning and Housing, Directorate of
Enterprises, Competition, Consumption, Labour and Employment,
Directorate for Youth, Sports and Social Cohesion, Directorate of Food,
Agriculture and Forestry) whose workforce increased from 17 to 29 Full-
16
IGF-IGAS-CGEIET,
Quel stratégie de développement économique et social à
Saint-Martin et Saint-Barthélémy?
, March 2018.
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Time Equivalents (FTEs). Reinforcements were also provided to the
Prefecture, with the number of agents increasing from 33 to 38 FTEs.
Despite these reinforcements, the prefecture of Saint-Barthélémy and
Saint-Martin does not have the resources of a full-fledged prefecture, as
wished by the President of the Republic on his speech for the inauguration
of the provisional buildings of the State, during his second on-site visit on
30 September 2018.
On judicial grounds, a local court was established in Marigot in May
2019.
The community recognises these achievements, but underlines the
absence of representations from other administrations (Departmental
Directorate for Competition, Consumer Affairs and Fraud Control, the
Directorate-General for Civil Aviation), and still regrets the issue accessing
certain services by the Commercial Court and the Labour Council or access
to the law (aid to victims, violence against women, etc.) because of
remoteness. The community considers that the limited representation of
certain institutions, such as the CAF, the Overseas Departments’ Emission
Institute, the General Social Security Fund (CGSS in French), the Banque
Postale, harms potential users and contributes to the non-use of social
benefits in Saint-Martin
17
.
This assessment deserves being put in perspective in view of the
existence of two public service houses, located in the two priority
neighbourhoods (Sandy Ground and Quartier d’Orléans). These facilities
have been the subject of constitutive agreements in partnership with Pôle
emploi, the CGSS, the CAF, to which are added the Ministry of Justice
(point of access to rights), the Association France Victimes and the
Association pour le droit à l’initiative économique, and have received
funding from the State.
17
In 2018, Saint-Martin was one of the poorest communities in France in terms of
GDP/inhabitant, after Mayotte (EUR8,552), Wallis and Futuna (EUR10,100 in 2005),
at a level close to that of Guiana (EUR15,765).
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II -
A near-complete reconstruction in
Saint-Barthélemy
The reconstruction of the building stock was carried out in accordance
with the procedures of the common law for urban planning and construction,
using simplified authorisation procedures to speed up its processing. The
community intervened only in areas within its field of competency and
provided support to people in precarious situations facing with the
degradation of their habitat.
For the public building stock, several community facilities (music
school, airport, church tower) suffered significant damage. Almost all of
the street lighting equipment and green spaces, but also two sections of the
road and the water treatment plant of Gustavia that had been utterly, were
quickly rebuilt.
A -
An organised reconstruction of communal facilities
and buildings
The reconstruction of communal infrastructure and buildings was
done in a sequenced way. In the immediate post-crisis period, work was
mainly devoted to securing roads, buildings and electrical and telephone
networks. They were then initiated in order of priority on the basis of the
provisions of Article 30 of Decree No. 2016-360 of 25 March 2016, allowing
the use of public contracts negotiated without prior advertising or
competition in the event of an emergency situation
18
. Finally, as of the end
of November 2017, a reconstruction phase began and the community got
back to common law public control. In this context, the Gustavia water
treatment plant was renovated and rehabilitated in April 2018.
An initial programme for the reconstruction of electricity networks
over a four-year period was developed in consultation with EDF. The
reconstruction of communal facilities and buildings in Saint-Barthélémy is
now completed. To prevent the possible consequences of similar events,
precautions have been taken to secure public buildings. The new equipment
is now designed in a way that takes into account cyclonic and submersion
risks.
18
The prices applied having been based on reference markets.
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B -
A quasi-neutral cost for the community
The community’
s financial situation was not heavily affected by the
hurricane and it maintained its fiscal and budgetary balances. Limiting the
impact of the decline of management outputs in 2018, the Government
cancelled, as indicated, the payment of the overall negative compensation
allocation for that year. It also supported businesses by facilitating the
initiation of a part-time activity scheme and proposing a moratorium on
empl
oyers’ social security contributions.
The level of tax resources has now exceeded the highest amount of
the pre-cyclonic period in 2019. Management costs remained contained.
Self-financing capacity stabilised on an upward trend and the community
did not use borrowing, thus remaining without long-term indebtedness.
C -
Lessons learned by the community
1 -
In the field of urban planning and construction law
The community has not changed its urban planning rules
consequently to Irma and only published a set of guidelines regarding
construction. Reflections are under way on the obligation to develop a secure
room for each dwelling, on the creation of a shelter level in flooded areas and
on the need to impose protection of openings.
2 -
The specific equipment projects in debate
The hurricane highlighted the vulnerability of electricity and
communication networks, despite the efforts already undertaken to make
them more resilient. A three-year programme for the burial of all lines and
protection of transformer posts was launched in partnership with EDF,
which the Fonds d'
amortisation des charges d’électrification (FACÉ) co
-
financed to the tune of EUR9.7 million. A new water tank with a capacity
of 800 m³ was delivered in the second half of 2020 and another is planned
to double the overall storage capacity of drinking water.
In Gustavia, the development of a 150-seater underground car park
located in the heights of the city is envisaged with the possibility of using it as
a safe shelter for the population and for public utilities vehicles.
A study was launched for the design of a submersion protection
structure of the main access road to the city. Pooled and protected units for
the storage of technical equipment are also considered.
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The construction of a second waste incineration plant, scheduled for
2021 at an estimated cost of EUR15 million, aims at strengthening the
capacity of the existing plant, which failed to absorb the entire waste
production following the post-Irma reconstruction.
In the long
term, the island’s connec
tion to a third submarine cable, as
well as the c
ommunity’s control of highly strategic spots
and the management
of antennas of the public system or delegated are under consideration.
Finally, to warn the population, the deployment on the territory of
loudspeakers connected to a fibre network is underway. Studies are also
being conducted to design an alert system broadcasted via all mobile
phones.
III -
A reconstruction far from being completed
in
Saint-Martin
A -
Almost half of the building and
equipment stock rebuilt
In St. Martin’s territory, reconstruction is not the result of a
comprehensive approach. Its
achievements’ level
is only known from the
satellite data of the European space programme Copernicus and the census
carried out among the contractors or their delegates. According to data
obtained in July 2019, only 20 per cent of the buildings destroyed had been
rebuilt. This rate is increased to 55 % for severely damaged buildings, but
40-49 % of the entire altered stock has not yet been rebuilt.
Data on private building stock is incorporated into this analysis. Its
reconstruction is mainly linked to the conditions of insurance compensation,
being specified that 3/5th
of
the population were not insured. The French
Insurance Federation estimated the amount of damage to be EUR1.13 billion
for 17,110 claims. By the end of June 2019, EUR926 million had been paid.
Besides, the entire social housing stock has been rebuilt.
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Table No. 4 :
data on Saint-Martin social donors reconstruction
Donors
SIG
SEMSAMAR
SIKOA
Fleet/number of
dwellings
485
1 085
132
Degradation
90 % roofs and 50 % carpentry
Deterioration due to flooding
Estimated amount of
work
EUR22.9
MILLION
EUR 50
MILLION
EUR8.3
MILLION
Financing
Own funds
EUR2.8
MILLION
EUR 11
MILLION
EUR0.1
MILLION
CDC borrowing
EUR7.8
MILLION
EUR2.4
MILLION
Single Housing Fund
EUR1.7
MILLION
EUR3.4
MILLION
EUR0.48
MILLION
Insurance
EUR18.4
MILLION
EUR 30
MILLION
EUR5.2
MILLION
Source: Data collected from the social housing organisations cited above
A major effort has been devoted to the reconstruction of school
facilities and sports facilities. The completion of the upgrading of first-
level public schools recorded in the summer 2020. The reconstruction and
renovation of high schools is completed or near to be. As far as the
multimedi
a library, the nautical centre and the “college 900”
project are
concerned, engineering studies are still under way. For example, out of
EUR44.9 million in capital expenditure in 2018 and 2019, EUR16.9
million had been spent on school infrastructure.
As regards to the hospital, the damage was estimated by insurance
experts and technical services from French metropolitan hospitals at
EUR9.4 million, including EUR1 million in operating losses. The hospital
received an insurance allowance of around EUR7.89 million and the work
is now completed. These costs include a higher-level rehabilitation to
reduce the vulnerability of structures, taking into account the lessons
learned from the hurricane.
With regard to the Bethany Home Ehpad (care home) in Saint-
Martin, repair works were carried out by SIG, the owner, with the same
objective of reducing vulnerability.
Regarding networks, the electricity network has been quickly put
back into operation. A major project for the burial of the electricity lines
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has been initiated. The grounding of the network is now completed up to
80% and is expected to be fully-completed by the end of 2021. The
electrical connection is 60 % completed and is also expected to be
completed this year. This work totalling EUR23 million was delegated and
managed by EDF and financed up to 80 % by the FACÉ and 20 % by EDF.
The water system was re-established in a few weeks, with the
exception of the revival of the water treatment plant, which was much more
difficult to put back in service. 8,000 water meters have been renewed over
a longer period of time. A network modernisation plan is now integrated
into the community’s MIP (Multiannual Investment Programme)
.
With regard to other public buildings and facilities, now housed in
temporary structures, the establishment of an administrative agency
comprising all the decentralised services of the State and a new prefecture
is planned.
The reconstruction of State and communal facilities and public
buildings has been carried out by constantly arbitrating between
“like with
like”
reconstruction and renovation and modernization actions.
B -
A refounding of the services only committed
Thanks to the diverse help received, in 2019 the community was
able to adopt a new organizational chart incorporating the reorganisation
of its services and the recomposition of its upper-management. Since
September 2019, the head management of the community has been
organised into five poles. A consulting firm has been mobilised to help
with the establishment of this new organisation, strengthen its
restructuration capacity and promote a management culture within the
services.
In
the
area
of
human
resources
management,
important
regularisation and organizational work has been carried out since 2018,
with the support of the
AFD’s experti
se, as part of a comprehensive service
project.
C -
A development plan to be put into practice
1 -
An ambitious multiannual investment programme
In 2018, the community established a MIP for the period 2019-2023,
for a total amount of EUR230 million (including EUR63 million planned
for 2020).
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Graph no. 1 :
thematic distribution of MIP projects
Source: Report on the presentation of the 2020 budget orientation debate of the community of Saint-
Martin
Reconstruction work accounts for almost 53 % of this programme
(EUR121 million) and new projects for 47 %.
According to the Introduction Report to the Budget Guidance
Debate for 2020, EUR98 million was to be spent over the years 2019 to
2021, which corresponds to 81 % of the planned reconstruction projects.
The MIP, from 2021 to 2023, presented at the Territorial Council of 31
March 2021 and which provides EUR145 million in investments over
three years, is now a shared document within the community’s services
19
.
After a very strong increase in investment expenditure in 2020 and 2021
(from EUR34 million in 2019 to EUR63 million in 2020 and EUR45
million in 2021), a decrease in 2022 and 2023 is observed, as it
traditionally is towards the end of programming
20
. The implementation
19
Its update and follow-up are organised. Each actor in the community is able to refer to
it: the executive to arbitrate and set priorities; the Directorate-General to prepare the work of
the executive; technical services to implement the objectives; and financial services to ensure
cash flow and funding needs.
20
At the Territorial Council on April 12, 2021, the MIP was refined over the period
2021-2023: presented for the first time in AP and CP, for
the three years concerned, it
will amount to EUR153.3 million, of which EUR37.3 million will be invested in 2021.
The greater deployment of the scheme is expected to materialise in 2022, with nearly
EUR67 million in payment appropriations planned for next year.
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of the MIP is conditional on the payment of the financing provided in the
Convergence and Transformation Contract (CTC)
21
.
2 -
A financing framework, agreed in a contract,
to be implemented
The funding commitments were reflected in the signing of a CTC in
June 2020 that links the State and the community during the period 2019-
2022.
The State has committed EUR47.2 million and the community
EUR31.4 million. EUR42.2 million in national credits, EUR6 million in
deconcentrated credits and EUR23.8 million in regional credits from
European funds are also available for financing the projects identified.
The CTC is reflected in an operational plan of action that
incorporates the 17 Sustainable Development Goals established by the
United Nations and reflected in the Paris Agreement, as well as the specific
needs of persons with disabilities and the integrated approach to equality
between women and men.
Beyond this CTC, in December 2020, the community and the
prefecture negotiated additional funding under the French economic
recovery plan and the REACT-EU plan (in their ultramarine component).
D -
Cooperation with the Dutch side to
revive
As mentioned
above
, cooperation with Sint Maarten suffers from a
weakness in its implementation and in its scope. While at the time of
Hurricane Irma, cooperation projects were underdeveloped, they were
clearly committed in 2018. A quadripartite meeting, bringing together the
Netherlands, France, Sint Maarten and Saint Martin, concluded with a
roadmap and the creation of intermediate technical groups to facilitate its
implementation.
In this context, a crisis management agreement, drawing lessons
from Irma’s experience
, was signed in October 2019. Several other
agreements have made it possible to strengthen cooperation in the areas of
21
The CTC of St. Martin represents the budgetary translation for the territory of the
ambitions set out in the Blue Book of the Overseas and the declination of the
convergence plan. This contract replaces the 2014-2020 development contract.
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security (e.g. exchange of market data, harmonisation of ship safety issues,
etc.).
Although this momentum came to an end in the autumn of 2019 with
the fall of the Sint Maarten government, many consultations were
nevertheless carried out during the health crisis. The last hurricane season
also gave rise to regular exchanges, without, however, systematically
leading to joint measures concerning the closure of enterprises or public
services. It should be noted, however, that the Dutch meteorological
services and Météo France have harmonised their warning systems.
In December 2020, the new government of Sint Maarten declared
that it wanted to initiate a process of quadripartite meetings on the issue of
immigration.
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CONCLUSION
The differences in situations between the two French authorities,
being administrative, institutional, economic, or caused by the variable
intensity of the suffered, logically led to differences in the speed and
effectiveness of the reconstruction.
In Saint-Barthélémy, the reconstruction can be considered as almost
completed.
In Saint-Martin, on the other hand, despite the conception of an
ambitious development plan, the rebuilt building stock is still limited and
the restructuring and strengthening of services, if committed, remain
poorly advanced.
Important challenges remain to be met if the reconstruction of the
territory is to be completed, even though the exemplarity for this
reconstruction is not acknowledged today.
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Chapter III
Completion of
Saint Martin’s reconstruction facing
important challenges
The reconstruction in Saint-Martin was part of an ambitious and
complex framework. It aimed at rebuilding quickly, while simultaneously
allowing the community to carry out operations and contribute to their
funding. The State provided this funding and technically supported the
community, but the reconstruction, if committed, has still not been
completed. To bring it to an end, the community of Saint-Martin continues
to face several challenges and will not be able to meet them without the
continued support of the State.
I -
An ambitious development and
reconstruction plan still to be carried out
A -
Strengthening local capacity for public ownership
and commissioning
1 -
Strengthening of the management of works
While the community, strongly supported by external technical
expertise, has well started the reconstruction of the equipment, the
management of programming and engineering does not yet have the
number of qualified officers required to pilot the entire MIP.
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According to the AFD, given the number of projects to be carried
out, management should consist of three to four technical Category A
executives, in addition to the director of the department, whereas today
only one executive is present. This team should also be multidisciplinary
to cover all the technical specificities linked to roads, buildings and
development. An architect and an urban planner would coordinate and
supervise the multiple studies and consultations undertaken in the field of
construction and development in order to ensure unity of view and long-
term coherence of all this work.
This organisation is necessary, even if the community wishes to
subcontract some of these tasks to the mixed economy society
SEMSAMAR.
2 -
Control of the risks inherent to the procurement function
In terms of public ordering, reconstruction normally leads to a large
volume of public purchases. However, it appeared that the services were
physically unable to formalise appropriate procedures. Within the
community, the practice of public procurement suffers from a severe lack of
legal competence, a lack of adaptability and technical expertise. For
example, many malfunctions have led to several judicial proceedings since
the end of 2017.
This lack of control of the rules of public order does not allow the
community to properly incur its expenses and leads to numerous rejections
of mandates sent to the public accountant. In the 2019-2020 period alone,
1,113 mandates were rejected for a total amount of EUR23.3 million
22
.
This cumulative amount amounted to EUR33 million as at 31 December
2020.
The reorganisation initiated by the community in 2020 is only the
first step in a much-needed redevelopment of the procurement function
with the deployment of important measures for the rationalization of the
process. The training of agents and the awareness of elected officials and
suppliers of public procurement should also contribute to the deployment
of a culture that respects these rules in Saint-Martin.
22
This amount does not take into account a significant input error over the period, of
more than EUR9 million. In addition, these data should be relativised. Indeed, a number
of rejections of warrants, for identical amounts and suppliers, presented on different
dates, can be interpreted as double submissions. A reliable study would have required
all mandates to be pointed one by one, identifying the corresponding invoices, in order
to verify that they had not been rejected several times.
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B -
Complete urban planning and
prevention plan against natural hazards
By the end of December 2020, the updating of land use planning
documents had not yet been completed. Started in 2017 after several
previous failures, it evolved only very slowly. If the health crisis does not
facilitate its implementation, this reform, which could create new
constraints on the establishment or reconstruction of buildings, is a source
of tension in a territory where the available land is limited. An event of the
magnitude of Irma required to draw the consequences and update this
document
23
dating back to 2011. The slow updating of the Natural Hazard
Prevention Plan (NRPP in French) is indicative of the challenges faced by
the community. This is mainly due to the fact that it will provide with
certainty a ban on building in areas at risk.
This plan is now one of the key instruments of the State’s action to
prevent natural hazards and reduce the vulnerability of people and
property. In September 2018, the President of the Republic recalled its
importance and called for the adoption of an updated plan before the end
of 2019. Government services worked to meet these deadlines and a draft
version of the NRPP was produced in the summer of 2019, but it resulted
in a strong social challenge and an unfavourable public opinion from the
community with respect to its adoption.
The preparation of this document has since taken place in a
conflicting context, leading the administrative court to rule on the various
disputes relating to actions taken on both sides.
However, a potential solution emerged as a result of the joint
mission of the General Inspectorate of Administration and the General
Council for the Environment and Sustainable Development in December
2019 and January 2020.
As far as land law is concerned, the community-based urban
planning police has not yet been implemented satisfactorily. Only one
person is sworn in and his action is not followed by sufficient effects. On
the basis of about 100 findings drawn up between October 2017 and the
23
The NRPP, established by the Act of 2 February 1995, is defined by articles L. 562-
1 et seq. of the Environmental Code and must be carried out within three years from the
date of limitation. This period may be extended by 18 months only once. The NRPP
may be amended or revised. The NRPPh is a public utility servitude associated with
criminal sanctions for non-compliance with its requirements and consequences in terms
of compensation for natural disasters.
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end of 2019, 36 minutes were drawn up but only ten were transmitted to
the judicial authority. The commissioning of DEAL officers for the
exercise of environmental and urban planning polices has helped to
maintain a high level of reporting to the Public Prosecutor’s Office. It is
important that the community significantly strengthen its action as part of
this monitoring mission.
C -
Provide the community with rules of
law to resolve the issue of abandoned property
In
addition
to
temporary
arrangements
to
facilitate
the
reconstruction of houses and buildings, the community has introduced a
requirement for a secure room in any new housing building.
Henceforth remains the need to provide the community with the
legal framework enabling to deal with degraded and abandoned private
property. Most of the destroyed building stock though, in particular the old
hotels resulting from the 1990s’ tax exemption
measures, is still not rebuilt.
It poses risks safety for people and undermines the quality of the landscape,
essential to the development of tourism.
With this in mind, the procedure for property in a state of manifest
abandonment, provided in Articles L. 2243-1 to L. 2243-4 of the CGCT,
should soon be extended and adapted to Saint-Martin.
II -
A multiannual investment plan
still unfunded
The forecast investment program is a strong financial requirement
for the community. In addition to external financing of the convergence
contract and recovery plans, the community will have to provide the
required share of self-financing. It will also have to maintain a sufficient
level of cash flow for its daily activity.
This mobilisation of funding requires therefore that a rigorous, clear
and precise financial trajectory is established and maintained.
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A -
Mobilising the necessary tax revenues
1 -
An investment programme with a high budgetary
and financial impact
During the 2020 budget policy debate, the MIP (Multiannual
Investment Plan) was estimated to be EUR230 million for the period 2019-
2023 and durin the same debate in 2021, at EUR145 million from 2021 to
2023. These financial perspectives, because of their volume, are
inconclusive with what the community has assumed so far. In the financial
years 2013 to 2018, the annual amount of investment expenditure realised
was EUR25 million on average. The new programme involves an average
level of expenditure of EUR46 million per year, almost doubled.
At the same overall volume and taking into account the delays, the
annual budget average from 2013 to 2018 should therefore almost tripled
from 2021 to 2023.
For the financing of this MIP, the community had planned to
mobilise EUR136.7 million of external resources (convergence contract,
remaining development contract, European ERDF funds
,
etc.) in early
2020, which led to a remaining EUR93.3 million for the community. This
contribution will necessarily be readjusted with the expenditure and
revenues of recovery plans. In order to mobilise its internal resources, the
community will need to integrate the constraints inherent of the local
finances framework (Cahors contracts
24
) and its commitments from the
2017 protocol updated in 2019
25
.
24
The approach of contractualisation between the State and local authorities, initiated
in 2017 in Cahors, aims at developping a partnership for the regulation of local
expenditure. In return for the effort to reduce operating costs required to the
communities, the State guarantees the predictability and stability of its financial
assistance, renouncing the reductions in the overall operating allocations implemented
from 2014 to 2017.
25
An evolution of 10 points on the remains to be recovered, a recovery rate of rolling
taxes which must exceed 80 %, a recovery rate of so-
called “pocket” revenues (urban
planning tax, DSP, farm, AOT) which must evolve upwards with a target of 90 % from
2020, on the basis of an increase in securities issued by the community.
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2 -
A financial contribution from the community heavily
dependent on its tax revenues
Tax revenues, which account for 71 % of the community’s operating
revenues, after declining in 2017, gradually resumed their upward trend in
2018 (initially committed in 2012).
Table No.5: Evolution of the Community’s tax products (in
EUR)
Taxes
2014
2015
2016
2017
2018
Total tax proceeds
73 917 763
89 280 146
97 464 821
73 446 718
74 640 399
Compensation State
0
0
0
12 120 000
25 000 000
Total
73 917 763
89 280 146
97 464 821
85 566 718
109 640 399
Source: Directorate General of Public Finance
–
Saint-Martin Public Finance Centre
In 2019, the Community’s tax revenues of EUR109.6 million
exceeded the average for the period prior to 2017 (equivalent to EUR101
million per year). This trend is mainly due to the growth of indirect taxes,
linked to the increase in reconstruction operations in 2019. This trend was
affected by the health crisis in 2020.
For the future, the potential for tax revenue development will
depend on the prospects for the implementation of the tax reform, the draft
legal transcription being finalised in December 2020. This tax reform,
which has a focus on tourism-related activities, is structured around three
pillars (consumption, income, wealth). It aims at simplifying and deploying
indirect taxation.
The community links this reform to the need for a modernised tax
management and strengthened tax control. These objectives must be quickly
taken into account by the public accountant responsible for the recovery, in
particular by adapting the IT application.
The importance of the revenue concern must lead to coordinated
action by the community, which institutionally decides on the tax, and of
the State which, by convention, collects it.
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B -
Securing a balanced fiscal and financial trajectory
The community has strengthened its financial management
capacity. This initiative illustrates the awareness of the budgetary, financial
and accounting management requirements attached to the implementation
of an important development plan.
The community must now anticipate how it intends to fund its
contribution to the forecast investment programme and assess the
consequences of its future trade-offs between self-financing and long-term
debt. While the correlation between budget planning, the MIP and project
selection is now underway, this is not yet the case for the determination of
a sound financial trajectory.
Beyond progress in the programming of unrecovered debt clearance,
it is important, in order to determine this trajectory, to improve the
reliability of accounts and to establish a
strategy to clear the community’s
stock of debt towards its suppliers.
At the end of the third quarter of 2020, the community’s treasury
stood at EUR43.5 million, but at the same time the stock of debt owed to
suppliers amounted to EUR34.7 million.
At the end of 2020 prospects were emerging to deal with the numerous
rejections of payment orders by the accountant. On the other hand, the cross-
debt with the CAF, managing the RSA (Supplementary Welfare Allowance)
on behalf of the community, which amounted to EUR18.7 million, was still
not subject to a resolution plan
26
.
III -
The indispensable continuation of technical
support from the State
The ambitious reconstruction plan selected in 2017 involved, in fact,
a strong State support to the community, which alone could not meet these
challenges.
26
The constant growth in social security contributions inherent in the RSA since 2012,
if it has been contained, has led to the creation of a 30 % levy from beneficiaries of the
RSA, established by the local authority in 2014 and applicable since 2015 as a result of
its fiscal autonomy. This levy placed the CAF in a position of collector of a tax on the
RSA, which the XAG does not recognise for reasons of principle. In addition, it cannot
technically repay this tax to the community because of its nationally organised IT
system.
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54
A -
Adapt and modernise as a matter of priority a tax
recovery delegated to the State
1 -
Modernisation of tax recovery
While in recent years the Regional Directorate for Public Finance
(DRFiP) has carried out several actions aimed at optimising the collection
of tax revenues, too often the latter still faces strong limits: an address issue
that falls within the competence of the community, but also a non-
modernised IT accounting system, consisting of non-integrated tools,
particularly in the area of control, which is the responsibility of the State
as a result of the agreement on tax collection concluded with the
community.
The evolution of the community’s tax system must henceforth lead
the state services to make important adjustments to this information system
(tele-reporting and electronic payment, tax account accessible online, etc.).
For its part, the community must deploy a comprehensive addressing
system as soon as possible, so as to allow for the calculation and collection
of tax.
2 -
The need for concerted action between the community
and local tax services
The shared competencies between the DRFiP and the community
regarding tax collection are highly intertwined and interdependent. Given
the stakes, the multiple issues to be overcome are a source of tension. The
litigation path that was chosen in 2020 may be long and appears unsuitable.
In addition to the 2008 partnership protocol, the DRFiP must take
full account of the provisions of the Protocol of 6 November 2017 aimed
at streng
thening Saint Martin’s fiscal autonomy. This partnership is the
foundation for the financing of reconstruction and is therefore a condition
for its success.
This commitment of the State echoes the observations already made
in December 2017 by the Court in the context of its investigation into the
action and interventions of the State in Saint-Barthélemy and Saint-Martin
:
While
it is necessary to update the 2008 Management Convention in order
to take account of the role now played by the community in the field of tax
information systems, it is nevertheless up to the tax administration to
provide it with the human and technical assistance necessary for the
development of applicative tools suited to its taxes, with partial payment of
their development costs, otherwise the provisions of the above-mentioned
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55
organic law would be emptied of their meaning and the effectiveness of the
tax autonomy of the community harmed.
27
The Court regrets that this recommendation has still not been
implemented. The mobilisation of a joint project manager, as permitted by
the CGCT and stated in the State-community partnership of 2017, would
constitute a working modality that would facilitate dialogue. The community
indicated in the contradiction phase to be receptive to this perspective.
B -
Assess and adapt the partnership between the State
and the community to maintain an effective
collaboration
The partnership with the community in 2017 led the State to provide
very important support. It also showed a willingness on both sides to
resolve all disputes and deadlocks arising after the institutional transition
from 2007 to 2012. In 2021, however, several commitments, with no direct
impact on reconstruction, have not been followed up today.
1 -
Review unfulfilled commitments to strengthen
the partnership
a)
Definitively close the institutional transition of 2008
The 2017 partnership intended to revert to two points related to the
institutional
transition
of
2007/2008
and,
in
particular,
to
the
implementation of a catch-up plan and the arrangements for fixing the
allocation of compensation for some delegated responsibilities.
The adoption of a catch-up plan is an old claim of the community
attached to the terms of its creation in 2007. It is referred to in article L.O.
6345-3 of the CGCT and has not been realized yet.
There was also no working group meeting to review the modalities
for assessing the responsibilities delegated to the benefit of the community.
The Court observes that the claim of this catch-up plan must now be
assessed on the basis of the investment programme contained in the
convergence contract concluded between the State and the community.
27
Court of Accounts, reference to
State action and intervention in Saint
—
Barthélemy
and Saint-Martin,
22 December 2017, https://www.ccomptes.fr
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56
As regards to the modalities to compensate the community for the
responsibilities delegated, it is now important that, in the absence of such
a commitment, the State should take into account the reasons underlying
the request of the community, in particular the difficulties inherent in the
management of the RSA and its financial consequences. The community,
which has made significant efforts to control the RSA burdens, and the
State must find a solution. The indeterminacy of cross-debt settlement with
the CAF also has a significant impact on the quality of the community’s
budget and financial management.
b)
The reconstruction process needs to be monitored more regularly
and documented.
The protocol’s commitments have been achieved
with mixed
results. While initiatives have been taken, several commitments have not
been implemented, or have only been partially implemented.
A quarterly review of the implementation of the protocol was
presented at the meetings of the Inter-Ministerial Committee on
reconstruction, which were held up to September 2018. Keep issuing these
balance sheets would have helped improve management and follow up on
mutual commitments.
As regards the commitment to statistical production, the INSEE has
started methodological works to determine whether available sources
would allow a reliable calculation of an annual GDP of Saint Martin. It
proposes to provide a one-time methodological support about its
competences. For its part, the community has created a statistical unit that
has moved closer to the statistical department of Sint Maarten.
Finally, the State’s action in St. Martin should be more clearly
reflected in the budgetary documents. The Government is expected to
present annually, on the occasion of the consideration of each finance bill,
a review of the reconstruction operations to the Overseas Delegations of
the National Assembly and the Senate. This commitment, which has not
been kept to date, must now be implemented.
2 -
Adjust the necessary expertise support from a more strategic
perspective
Reconstruction poses multiple challenges to professional actors,
whether they are in the areas of administrative management, construction
or civil engineering. The capitalisation on their experiences was well
planned as part of the partnership between the State and the community.
While, in this context, a guide to good practices in reconstruction for
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architects and civil engineering professionals has been drawn up, the
international colloquium scheduled for July 2018 in Saint-Martin or in
metropolitan France (Montpellier) did not eventually take place because of
its cost.
However, it would be necessary for communities that have faced the
same climatic phenomenon to be able to benefit from the experience and
lessons learned.
The important project for improving management and contracting ,
led by AFD and an agent from the Ministry of National Education,
contributed to the capitalisation of this experience. This support was
essential to the commitment to the reconstruction of school facilities.
In view of the important strengthening of the community’s
management capacity, it is now important that the evolution of its
organisation keeps being as transparent as possible. It ought also to be part
of a change involving all agents and joint bodies.
With this in mind, it would be useful to realise an inventory of the
community’s internal management capabilities and then to develop a
service project and a human resources forecasting scheme.
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58
CONCLUSION AND RECOMMENDATIONS
To achieve the reconstruction of Saint Martin, the community must
take up several challenges: develop the legal expertise and tools necessary
to carry out its ambitious development plan; mobilise the required
funding; ensure the technical support of the State in both management and
expertise.
In this regard, the next few months will make it possible to better
assess whether the method chosen and the means used remain the most
appropriate to the specific status, situation and difficulties of this overseas
community.
Accordingly, the Court makes the following recommendations:
1.
complete the updating of urban planning and intensify the
implementation of the administrative police of urban planning
(community of Sait Martin);
2.
extend and adapt the legislation on property in a state of manifest
abandonment provided for in Articles L. 2243-1 to L. 2243-4 of the
CGCT in Saint-Martin (Ministry of Overseas, Ministry of Territorial
Cohesion and Relations with Local Authorities);
3.
follow up on public funds mobilised for the reconstruction of Saint
Martin (Overseas Ministry);
4.
formalise and implement a procurement policy with the necessary
tools (community of Saint-Martin);
5.
adopt a medium-term financial trajectory consistent with the financing
of
the
development
and
reconstruction
plan
(Saint-Martin
community);
6.
carry out an impact study of the future tax reform (community of Saint-
Martin);
7.
establish effective collaboration between DRFiP and the community
of Saint-Martin (Ministry of Economy, Finance and Recovery and
Community of Saint-Martin);
8.
take stock at the end of 2021 of the contributions and technical support
provided by the State and AFD to the community service project
(Ministry of Overseas, AFD, Saint-Martin community).
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General conclusion
Unlike
St.
Barthélémy,
the
reconstruction
of
Saint-Martin, four years after the passage of the hurricane Irma in
September 2017, was not yet completed in the summer of 2021 whereas
the territory has barely 40,000 inhabitants. Beyond the massive amount of
material damage, the twofold choice made right after the disaster not to
rebuild like-with-like and to rely on the community leadership explains the
delay that affects the residents and the activity of the island.
Over the past three years, the framework for community action and,
to a lesser extent, that of the State, have been strengthened in order to
integrate the reconstruction effort into an ambitious development project.
Its realisation remains limited and the construction of the equipment
planned remains insufficiently advanced and perceptible. In addition, the
health crisis in 2020 weakened this process by imposing additional
constraints.
The diversity of the reconstruction arrangements envisaged by
France and the Netherlands illustrates the complexity of the responsibilities
between a State called upon to provide exceptional financial support in the
name of national solidarity and a community with a large fiscal and
management autonomy. The State, which remains the guarantor of last
resort, must uphold strict principles of the use of public funds and
maximise their impact, without compromising the autonomy of the
community.
The issue is all the more complex given that the climate event has
been of exceptional gravity, causing considerable damage, striking a small
isolated ultramarine community, largely deprived of the expertise and
administrative resources necessary and economically fragile.
It is important that, in the coming months, with the support of the
State, the community overcomes the challenges and completes its
reconstruction, which is intended to be sustainable and exemplary, and
ensuring,
inter alia
, that the rules of risk prevention are respected.
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60
It is essential to learn all the lessons for the future of the passage of
the hurricane Irma, in order to develop prevention and also to improve the
capacity to respond to climate events of this magnitude, be it emergency
management or reconstruction. These lessons concern Saint-Martin but,
more broadly, many ultramarine communities with similar geographical
characteristics and vulnerabilities.
To a significant extent, the response to these challenges is based on
the strength of local public actors, State support and national solidarity, and
also on strengthening regional cooperation.
This necessary integration into a regional system goes beyond
relations between the French territories alone. It also implies, as the
example of Saint Martin and Sint Maarten illustrates, the development of
cooperation with neighbouring States for the security and prosperity of the
inhabitants of these territories.
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61
List of abbreviations
AFD
....................
French Development Agency
CAF
....................
Family allowance fund
CDC
...................
Caisse des dépôts et consignations
CGCT
.................
General Code of Local and Regional Authorities
CGEIET
.............
General
Council
on
Economics,
Industry,
Energy
and
Technology
CGSS
.................
General Social Security Fund
CJF
.....................
Code of Financial Jurisdictions
DEAL
..................
Directorate of Environment, Planning and Housing
DRFIP
................
Regional Directorate of Public Finance
DSP
....................
Delegation of public service
EHPAD
..............
Accommodation facility for dependent elderly people
FTES
..................
Full-time equivalent
FACÉ
.................
Depreciation fund of electrification expenses
ERDF
.................
European Regional Development Fund
ESF
.....................
European Social Fund
FSUE
..................
European Union Solidarity Fund
IGAS
..................
General Inspectorate of Social Affairs
INSEE
................
National Institute of Statistics and Economic Studies
GDP
....................
Gross domestic product
PPI
......................
Multiannual Investment Programme
PPRN
..................
Plan for the prevention of natural hazards
OCT
....................
Overseas country and territory
REACT-EU
........
Recovery assistance for cohesion and the territories of Europe
RSA
....................
Income from active solidarity
RUP
....................
Outermost region
SEMSAMAR
.....
S
ociété d’économie mixte de Saint
-Martin
GIS
.....................
Société immobilière de la Guadeloupe
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Annexes
Annex No. 1: Controls carried out by the Algemene64the Dutch Higher
Audit Institution for Public Finance (ISC)64
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Annex No. 1 :
Controls carried out by the
Algemene
Rekenkamer,
the Dutch Supreme Audit
Institution of Public Finance (SAI)
According to the procedures of this supervisory institution, a first
assessment work took place as early as 2018, one year after the event. It
has been supplemented by a regular update, carried out as part of the annual
Dutch overseas assessments.
The World Bank is the main operator chosen by the Netherlands to
lead the reconstruction project. In its initial report of 2018, the
Algemene
Rekenkamer
noted that
a year after the disaster, few aid funds had been
spent on Sint Maarten. Beyond the difficulty of massively mobilising the
funds granted because of the multiple guarantees required by the operator,
the reconstruction also faced a lack of local staff and expertise. This
situation required the deployment of technical assistance. In 2019, the
Dutch SA
I noted, citing the World Bank’s 2019 Progress Report, that two
important causes were impeding successful reconstruction: firstly, the
peculiar political situation in Sint Maarten, particularly in the last quarter
of 2019, delayed the preparation of various reconstruction projects;
secondly, there was limited local implementation capacity.
In its latest update in May 2021 concerning the year 2020, the
Algemene
Rekenkamer
highlighted slow progress in the reconstruction of
Sint Maarten. Out of 379 housing units to be restored, only 44 % have
actually been. As for the 19 schools damaged, the work was completed for
only three of them at the beginning of 2021.
It is estimated that the costs of repairing infrastructure and utilities
will exceed the original forecast by almost EUR60 million. The remaining
EUR101.1 million, which the Netherlands has set aside for the
reconstruction of Sint Maarten, is unlikely to be sufficient to carry out all
the projects.
The
Algemen
e
Rekenkamer
therefore recommends
to the Minister
for the Interior and Relations with the Kingdom not to schedule new
projects and to give precise instructions to the representative of the
Netherlands in the Financial steering Group. Priority should be given to the
completion of ongoing projects.
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Algemene
Rekenkamer’s
publications on the reconstruction
of Sint Maarten
1)
Focus on the Dutch contribution to the reconstruction of Sint-
Maarten
Focus op de Nederlandse bijdrage aan de Wederopbouw vanSint
—
Maarten Report
13-12-2018
2) Reconstruction of Sint-Maarten: one year after the disaster,
few aid funds spent on Sint Maarten
Wederopbouw Sint-Maarten:Jaar na ramp: Nog weinig hulpgeld op
Sint-Maarten besteed nieuwsbericht
13-12-2018
3) Reconstruction of Sint-Maarten: Giving priority to the
restoration of houses and schools
Wederopbouw Sint-Maarten: Geef prioriteit aan het Herstel van
huizen en scholen nieuwsbericht
20-05-2020
4) Reconstruction of Sint-Maarten: no new projects completed
in advance
Wederopbouw Sint-Maarten: Geen nieuwe projecten, eerst afronden
nieuwsbericht
19-05-2021
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Replies from the administrations
and bodies concerned
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Summary
Prime Minister’s Response
Erreur ! Signet non défini.
Response of the Chairman of the Territorial Council of Saint-Martin74
Response of the Director-General of the French
Development Agency (AFD)81
Addressee with no observation
Mr. President of the Territorial Council of Saint-Barthélémy
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RESPONSE OF THE PRIME MINISTER
On the night of September 5-6, 2017, the hurricane IRMA hit the
islands of Saint-Martin and Saint Barthélémy. Classified as a Category 5,
IRMA is to date the most powerful cyclone ever seen in the Lesser Antilles.
Facing this major disaster, the State mobilised nearly EUR500 million to
support the two islands and their populations: EUR 163 million for
emergency measures during the crisis and EUR 330 million to support the
local economy, individuals and reconstruction of both communities.
The then Prime Minister established an interministerial committee
to lead public action for the two islands and, on 14 September 2017,
appointed an interministerial delegate for their reconstruction. Supported
by a small team, the interministeria
l delegate’s role was to design and
coordinate, in close liaison with communities, the set of public policies
necessary for the reconstruction and development of the two islands, as
well as their resilience to natural hazards and climate change.
On the occasion of the interministerial committee of 21 November
2017, the interministerial delegate for reconstruction submitted to the
Government his report on reconstruction. As a true road map for
exemplary and sustainable reconstruction for the State, this report helped
designing a partnership protocol between the State and the community of
Saint-Martin.
It lists the reciprocal commitments of each party in terms of
objectives and resources, and provides for the implementation of some
twenty concrete actions, which are based on five main tracks:
strengthen the means of the prefecture of Saint-Barthélémy and Saint-
Martin to ensure effective legal control and a better presence of the State
services on the spot;
better manage the transition period by ensuring optimal security,
supporting local businesses, including cash flow measures and ensuring
that reconstruction targets them first;
launch a responsible and controlled urban planning policy by
establishing a precise diagnosis of the land, reviewing local urban
planning documents, establishing a joint strategy to combat illegal
construction and an urban planning police, or by strengthening local
engineering capacities;
initiate a reflection on the tourism model of the two islands in the long
term;
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rebalance relationships between the French and Dutch parties in Saint-
Martin by strengthening bilateral cooperation, for example through the
launch of joint infrastructure projects and the relaunch of the so-called
“Q4”
forum dialogue, which brings together the French and Dutch
governments, the Saint-Martin community and the Sint Maarten
government.
To date, the reconstruction work in Saint Barthélémy has almost
been completed. Those in St. Martin require additional delays.
The Court’s recommendations will enable the
State services and the
community of Saint-Martin to make some administrative procedures more
operational, organise the skills upgrading and strengthen the monitoring
of the reconstruction funding. However, some of the recommandations
addressed to the State call for some comments.
•
Property in a state of manifest abandonment (Recommendation
No. 2)
The Court found that after the passage of the hurricane IRMA in
Saint-Barthélémy and Saint-Martin, the housing stock included a large
number of degraded private property, whether abandoned or not. If the
phenomenon is not new, the hurricane intensified it.
However, the procedure for property in a state of manifest
abandonment provided for in articles L. 2243-1 to L. 2243-4 of the General
Code of Local Authorities (CGCT), which allows in particular to compel
an owner to act and to renovate his property and which gives in the event
of inaction the capacity of the public authority to intervene, is not currently
applicable to Saint-Barthélémy and Saint-Martin.
The Court therefore recommends an extension of this provision.
I am in favour of this recommendation and that is why a provision
has been included in the bill on differentiation and decentralization to this
end. It also includes various measures to simplify local public action,
currently being considered in Parliament.
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RESPONSES OF THE ADMINISTRATIONS AND BODIES CONCERNED 72
• Monitoring of
the public funds mobilised for reconstruction
(recommendation No. 3)
The report emphasises that the action of the State should be more
clearly reflected in the budgetary documents, in order to give concrete
expression to the overseas delegations of the National Assembly and the
Senate of the review of reconstruction operations during the examination
of the finance law. This point is reflected in recommendation No. 3 of the
report: carry out a follow-up of public funds mobilised for the
reconstruction of Saint Martin.
The Government will follow up on this recommendation in the
framework of the 2022 Overseas Transversal Policy Document (DPT), which
has just been initiated by the Ministry of Overseas.
The various DPT contributors were asked to provide the DPT with the
amount of funds mobilised for the reconstruction of Saint-Martin, from the
2017 to the 2021 financial year. This information will be presented in a specific
DPT annex.
•
Establish effective collaboration between the DRFiP and the
community of Saint-Martin (Recommendation No.7)
This effective cooperation which the Court calls for has, in fact,
never ceased. The DRFiP of Guadeloupe has consistently implemented the
powers granted by the law.
The latter provided for a division of tax jurisdiction between the
local authority, which lays down the rules applicable within the framework
of its financial autonomy, and the State, which is responsible for the
operation of the base, control and collection of local taxes and duties,
under the conditions laid down by an agreement concluded between the
State and the community.
This convention, dating from 2008 and having expired in 2016, is
now obsolete and therefore needs to be renewed in order to take account
of the changes in taxation since then. The Director General of Public
Finance accepted by a letter dated March 26, 2021 addressed to the
president of the community the principle of the development of a new
agreement for tax management.
Working meetings have already been held. They must enable the
community to clarify its intentions regarding the tax reform it plans to
implement and, for the DGFiP, to accurately measure its full impact on the
taxation applicable to Saint Martin, as w
ell as on the community’s tax
information system. The DGFiP will then be able to adapt the scope and
content of its action.
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RESPONSES OF THE ADMINISTRATIONS AND BODIES CONCERNED 73
In the field of IT, the information system deployed at national level
for the management of more than 38 million tax households is not adapted,
neither in terms of costs nor in terms of functionality, to taxation which has
gradually diverged from national taxation within the framework of St.
Martin’s fiscal autonomy
which is only applicable to a small number of tax
households.
This is the reason why the tax information system of the community
already consists mainly of specific applications. This does not detract from
the fact that DGFiP support it for tax management, as it has been
consistently assured.
• Limited mobilisation of the
European Union Solidarity Fund and
application of imperative urgency in post-IRMA public procurement
Finally, I return to two points raised by the Court concerning the
limited mobilisation of the European Union Solidarity Fund and the
application of the emergency situation for post-IRMA public procurement.
Under the European Union Solidarity Fund (EUSF), the European
Commission allocated a total amount of EUR 48,906,025, of which EUR46
million was allocated as a priority to the community of Saint-Martin by the
Interministerial Committee for Reconstruction of 12 March 2018.
Credits consumption was to take place within 18 months of the
European Commission’s decision to pay (taken on 25 July 2018), i.e.
before 25 January 2020.
As indicated in the Court’s report
, the community of Saint Martin
has not been able, despite the deadlines granted, to produce invoices
eligible for all the credits provided, which led to the redirecting of some
credits for the reimbursement of expenditure incurred by several ministries
linked to the crisis management.
One of the difficulties encountered by the community of Saint-
Martin was an extensive application of the concept of emergency situation
to purchase realised outside the normal framework of public order rules.
The community itself should have stopped the use of emergency
procedures without any notification by the State being required as soon as
October 9, 2017, the date on which it considered to be back to a normal
functioning.
These rules were recalled by the Director General of Overseas to
the Prefect of Guadeloupe, by two letters dated 10 September 2018 and 9
August 2019, both communicated to the community.
The notion of emergency situation, of case-law essence, does not
always allow public officials to determine in a precise and certain way the
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RESPONSES OF THE ADMINISTRATIONS AND BODIES CONCERNED 74
period during which they can act by derogating from common law rules.
That is why I hope that the law will create an exceptional case for overseas
natural disasters.
The draft law on combating climate change and strengthening
resilience defines the cumulative conditions for the declaration of this
state: a major natural hazard, a breach of the normal functioning of
institutions and an imminent serious danger.
The declaration of this state adjourns administrative deadlines and
allows for the implementation of derogatory procedures to ensure the
permanence of the institutions. The bill provides for a five-year trial,
limited to overseas territories.
This will result in a clear legal framework for overseas public
officials facing natural exceptional circumstances.
RESPONSE OF THE CHAIRMAN OF THE TERRITORIAL
COUNCIL OF
SAINT-MARTIN
1- General comments
The Overseas Community (COM) of Saint-Martin takes note of the
report sent by the Court. It shares most of the findings contained in the
document, and agrees with the recommendation. Most of these
recommendations are already being implemented in the context of the
reorganisation of the COM and the greater deployment, both qualitatively
and quantitatively, of its services.
At this stage, and as part of the required response format, the report
informs the COM: (i) two reasons for satisfaction, (ii) two regrets, and (iii)
an expectation.
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RESPONSES OF THE ADMINISTRATIONS AND BODIES CONCERNED 75
(i) The two main reasons for satisfaction are:
—
The Court acknowledges that the interests of the COM have been
adversely affected, in particular as regards the duration of the emergency
situation, fixed unilaterally and retroactively by the Prefect of Guadeloupe
to a little more than a month (9 October 2017). The community of Saint-
Barthélémy was six times less impacted by the cyclone (the share of
buildings destroyed or severely damaged amounted to 5 % of the building
stock in Saint-Barthélémy whereas it amounted to 31% in Saint-Martin,
according to COPERNICUS). However, the community of Saint-
Barthélémy benefited of this more flexible special regime for public
procurements two months longer (end of November 2017).
—
The present report recognises a perfectable involvement of the
State and its decentralised services, particularly in the field of taxation.
Recalling the relevant conclusions of its note
of 22 December 2017 (“
If
it
is necessary to update the Management Convention of 2008, in order to
take account of the role now played by the community in the field of tax
information systems, it is nevertheless for the tax administration to provide
human and technical assistance required for the implementation of its
taxes, with a partial payment of their development costs. Otherwise, the
provisions of the above mentioned organic law would be meaningless and
the app
lication of the Community’s
fiscal autonomy eroded”),
the Court
calls for a decent cooperation of the DRFiP of Guadeloupe. Without it, the
implementation of the fiscal reform decided in 2018 by the COM would
rapidly get obsolete and ineffective, thus relegating the inhabitants of
Saint-
Martin to “second
-
class citizens” taxpayers…
(ii) The two main regrets are as follows:
—
The COM would have liked to have had, even briefly, a
calculation, to date, of public credits intended for the reconstruction of
Saint Martin and actually consumed.
—
The report could have placed greater emphasis on the
Government’s failure to comply with the commitments made in November
2017 regarding the review of the compensation for the burdens badly
(2008) or non (2012) balanced. The COM would have liked the reopening
and follow-up of this dossier to constitute a recommendation of the Court,
thus allowing, from a consensual and constructive perspective, to
“eventually
close the institutional transition of 2008”.
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RESPONSES OF THE ADMINISTRATIONS AND BODIES CONCERNED 76
(iii) Finally, the COM formulates an expectation for the future:
—
The publication of a thematic report on the State’s action and
interventions in Saint-Martin would make sense by 2023-2024
–
that is, at
the end of the Recovery Plan currently being implemented. Such a report
had, of course, been planned and partially drafted in 2015-2016 but it was
finally replaced in December 2017 ("
While
it is necessary to update the
2008 Management Convention to take account of the role now played by
the community in the field of tax information systems, it is nevertheless up
to the tax administration to provide the human and technical assistance
necessary for the implementation of itss taxes, with partial payment of their
development costs. Otherwise, the provisions of the above mentioned
organic law would be meaningless
and the application of the Community’s
fiscal autonomy eroded”)
by the 7-pages note mentioned above.
The
drafting of such a report, dedicated to assessing the effectiveness of
recommendations n°2, 3, 7 and 8, would allow, a little more than fifteen
years after the
community’s
accession to the status of Overseas
Communities governed by Article 74 of the Constitution, to verify whether
the commitments made by the Head of State in September 2017 and
September 2018 with regard to the inhabitants of Saint-Martin were
fulfilled.
2- Detailed comments
—
The first visit of the President of the Republic to Saint Martin took
place on 10-11 September 2017 (not 28 October).
—
As of December 31, 2015, the community had a proportion of
managers (category A) below the national average of 25 % (6.7 % against
9.3 %)
. The COM would like to clarify that, as a result of a proactive action
that takes into account the conclusions and requirements of the Territorial
Court of Accounts report of July 2018 (on management 2007-2016), this
proportion has experienced an upward trend. It was already 7.2 % at the
end of 2018 and is expected to exceed 8 % by the end of 2021.
—
The COM wishes to insist, in contrast to the situation in Sint
Maarten (ten governments in ten years), on the stability of the institutions
of the French part of Saint Martin, with an average executive every 3.5
years (March 2012-March 2022). This political stability, which was
confirmed after 2017, is a decisive asset for both consolidating post-IRMA
reconstruction in the coming years and succeeding in post-Covid recovery.
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RESPONSES OF THE ADMINISTRATIONS AND BODIES CONCERNED 77
—
“
By spring 2019, more than half of the Dutch contribution had
already been paid
”
. The COM would also like to know the proportion of
public funds announced in March 2018 (EUR494.8 million) actually paid
to the territory of Saint-Martin by spring 2019.
—
With regard to the exceptional allocation, the COM would like to
duly remind that the State/COM Protocol of 6 November 2017 provided for
annual payments of EUR50 million over three financial years: 2018, 2019
and 2020.
—
“
These payments (EUR53.2 million) between 2017 and 2019
allowed the community to always have the cash flow needed to meet its
expenses, without compromising its operating financial balances
”
. This
statement is correct. However, no payments were made for the 2020
financial year. However, in view of the health crisis, which was added in
this case to the post-IRMA difficulties, the community suffered a loss of
revenue of EUR14.9 million which, unlike the other communities of the
Republic, has not been the subject of any compensation from the State (the
COM wishes, in this regard, to emphasise the inadequacy and
ineffectiveness of the provisions of Art. 24 of the LFR of 30 July 2020. The
amending Finance Act specifies that the amount of the allocation paid is
equal to the difference, if positive, between the average amount of revenue
received between 2017 and 2019 and the amount of the same revenue
received in 2020. However, the reference period was at considerable
disadvantage in Saint-Martin, as revenue received in 2017 and 2018 had
been particularly affected by the consequences of cyclone IRMA.
Paradoxically, this tax income (consumption tax on petroleum products
(TCPP)) are therefore expected to be lower in 2020 (EUR11.6 million)
than in 2019 (EUR12.7 million) while remaining below the average
revenue in 2017-2018-2019 (EUR11 million). In this case, the COM would
ultimately receive nothing under the planned allocation: it should even, in
a few weeks’ time,
pay the down payment of EUR 0.3 million back (0.3 %
of the tax revenues of the year: EUR94 million) collected at the beginning
of December 2020).
—
“...
the State services considered that the urgent need could not
be invoked by the community beyond 9 October 2017, the estimated date
of "back to normal life in
the territory
“. The COM would
like to recall that
the “back
to normal life” did not really take place until mid
-December
2017, with access to drinking water for all inhabitants, and the departure
of the remaining Civil Security staff (17 December). Furthermore, the
Government’s press release of 17 September
2018 explicitly mentions that
“
the reconstruction process was actually able to begin in mid-November
[2017] in Saint-Barthélémy and early March [2018] in Saint-Martin
”
: The
end of the emergency situation period therefore corresponded to the reality
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RESPONSES OF THE ADMINISTRATIONS AND BODIES CONCERNED 78
of the situation in Saint-Barthélémy (end of November 2017), but not in
Saint Martin.
—
“
A third phase, launched in 2020, extended the expertise on
public order management and engineering
”
. The COM wishes to clarify
and deplore, that this third phase has not yet entered into force, having
been blocked, in extremis, by the Director of Cabinet of the Overseas
Terriotires Minister.
—
“
Regarding judicial means,
a
local court was set up in Marigot in
May 2019
”
. The COM would like to know, in the context of this report, the
increase in the staffing of the Department of Justice (FTE) as a result of
this timely structural reform.
—
“
(...)
and contributes to the non-use of social benefits in Saint-
Martin
”
. The COM would like to emphasise in particular the extent of these
non-uses
, in particular with regard to the “
old age minimum pension
”
(ASPA) and the Activity Allowance.
—
“
In 2018, Saint-Martin was one of the poorest communities in
France in terms of GDP/inhabitant, after Mayotte (EUR8,552), Wallis-et-
Futuna
(EUR10,100
in
2005),
almost
ex
aequo
with
Guyana
(EUR15,765)
”
. These data date back to 2014 (the GDP of Saint Martin
was calculated in 2018 under the CEROM scheme). The COM points out
that, since then, and in view of the succession of crises affecting the
Territory, the level of GDP/inhabitant has not changed significantly,
despite the decline in the population in recent years (i.e.
–
1,042
inhabitants between 2014 [35,107 inhabitants] and 2018 [34,065
inhabitants]).
—
“
The French Insurance Federation estimated the amount of
damage to be EUR1.13 billion for 17,110 claims. By the end of June 2019,
EUR926 million had been paid
”
.
At that time, almost EUR200 million
remained to be paid (a third of the Territory’s estimated GDP). In the
context of the final report, the COM would like to have updated data from
the FFA at the end of September 2020 and at the end of March 2021.
With regard to the FUL (Housing Emergency Fund, or EUR6
million awarded on a request from the COM (February 2018) of EUR12.9
million), the COM would like to point out that, with regard to SEMSAMAR,
payments made at the end of January 2020 represent only 6.8 % of the
estimated EUR50 million of work.
—
“
This cumulative amount was up to EUR33 million on 31
December 2020
”
. The COM would like to point out that at national level,
this amount would be about EUR130 billion not injected into the economy.
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RESPONSES OF THE ADMINISTRATIONS AND BODIES CONCERNED 79
—
The COM would like to emphasise its low debt situation (the ratio
[debt stock/RRF] went down from 40 % in 2015 to 31 % in 2017 and then
to 26 % in 2019. That same year, the COM’s
debt reduction capacity was
2.6 years; equivalent to hhalf of the level recorded for the average of
French local authorities (5 years). A fortiori, it can only deplore that the
State has never followed its own proposal of March 2018, namely to
propose a “Great Borrow” of E
UR60 million at zero rates (interest rates
being destined to be borne by the State).
—
“
There was also no working group meeting to review the
modalities for assessing burdens transferred to the benefit of the
community
”
. The COM wishes to provide the following details on this
important subject. Indeed, the burdens relating to competences transferred
in 2012 have never been assessed.
This unprecedented situation, which was highly detrimental to the
community of Saint-Martin, had been recalled, highlighted and denounced
by the Territorial Chamber of Accounts in its interim report (17 January
2017) on the management of the COM between 2007 and 2016. Point 2.1.7
of that report led to a recommendation that was entirely relevant, a fortiori
in the post-IRMA context (Recommendation No. 2: To assess, even
a
posteriori
, the amount of the expenditure relating to powers transferred in
2012. It was duly pointed out that, with regard to the second wave of
transfer of powers (1 April 2012) relating to the areas of urban planning,
construction, housing, and energy, the procedure laid down in the CGCT
had not been complied with, as no decree (comparable to that of April
2011, that had also underestimated the costs transferred according to thee
CTC) which had not fixed the amount of the charges and the right to
compensation
transferred
to
Saint
Martin.
The
CTC
therefore
recommended the following measure:
“
In the absence of an
priori
compensation calculation, a more reliable calculation is possible
a
posteriori
; It should be established by the community in case a reopening
of a dialogue with the State becomes possible
”
. While the reopening of
such discussions with the State had just been initiated by the signing,
respectively by the Prime Minister and the Minister of Overseas
Territories, of the two protocols in November 2017, the sudden
disappearance, in the body of the final report (13 April 2018), of this point
2.1.7 and, above all, of the corresponding recommendation, made the
position of the COM in its negotiations with the State in 2018 particularly
complicated. The community was expecting a lot from the publication of
this report, which was supposed to trigger the establishment of the ad hoc
working group. The report intended, in accordance with the provisions of
the State/COM Protocols of 6 November 2017 (see point II, paragraph 7:
An ad hoc working group, including the community, will be set up as soon
as the final reports of the Territorial Chamber of Accounts and the Court
of Accounts are published. This working group will examine all the
recommendations made by the magistrates, including the review of
compensation not received or underestimated in connection with the
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RESPONSES OF THE ADMINISTRATIONS AND BODIES CONCERNED 80
transfer of powers established between 2007 and 2012, as a result of the
change in the status of the community of Saint-Martin ") and 21 November
2017 (see paragraphs 1 to 3 of point 4: In conjunction with the
Interdepartmental Delegation for the Reconstruction of Saint-Martin, the
community will propose, by March 31, 2018, a multi-year investment and
catch-up plan, covering the period 2018-2023, and prioritising projects
according to the needs of Saint Martin’s populat
ions and economy. This
Plan will take into account the provisions of Article L.O 6345-3 of the
CGCT to establish a catch-up plan for the renovation and construction of
structural equipment to enable economic and tourism development and to
assess the respective financial commitments of the State and the
community. Following the conclusions of the Working Group referred to
in paragraph 2 of Protocol No. 1, it could, with an amendment to the
Development Agreement 2017-2020, remedy all or part of the deficiencies
found in the area of financial compensation for the transferred expenses"),
to study the review of underestimated compensation (2007) or non-
collection (2012) in connection with established transfers of powers. This
situation, which is still pending, can only contradict or even thwart the
objective of catching up, although duly recognised, in 2017, by the State at
the highest level.
—
As regards statistical production, the COM points out that,
despite regular and reassuring assertions by INSEE over the past three
years, it is still in a “dead corner” of national public statistics. The absence
of a price index, for example, was detrimental after IRMA, preventing the
COM from assessing inflationary and anti-competitive excesses. Finally,
the creation of a statistical unit (the Statistical Institute of French
Polynesia (ISPF) cannot be an example to follow in full, if only by the size
of the budgetary and human resources required, corresponding to the
realities of a COM eight times more populated and nine times richer (in
terms of GDP) than Saint-Martin) can only be conceived as a complement
to a real commitment of the INSEE.
In conclusion, the COM endorses the eight recommendations made,
of which ¾ are entirely or partly within its responsibility. Recommendation
No. 2 (“Strengthening and adapting legislation on
property in a state of
manifest abandonment provided for in articles L. 243-1 to L. 2243-4 of the
CGCT in Saint-
Martin”) requires a thorough and benevolent review,
particularly in the context of the so-
called “4 D” bill. Finally, the COM
expects a great deal from Recommendation No. 3 (“Monitoring public
funds mobilised for the reconstruction of Saint Martin”), which could,
moreover, be part of an improvement of the transversal policy documents
annexed t
o the PLFs: The latter, in fact, only partially reflect the State’s
annual budgetary effort towards Saint-Martin.
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RESPONSES OF THE ADMINISTRATIONS AND BODIES CONCERNED 81
RESPONSE OF THE DIRECTOR-GENERAL OF THE FRENCH
DEVELOPMENT AGENCY (AFD)
Your well-documented report accurately traces the role of all the
key players involved in the reconstruction of these overseas territories of
the Republic. As you may have noticed, the French Development Agency
(AFD) was able to mobilise quickly, at the request and alongside the State,
to work towards this reconstruction and it shares in every respect the
findings made by the Court.
It also seems important to me that we should be able to mobilise
resources from the Overseas Territories Ministry in order to take stock of
this exceptional arrangement, both in the volume of financial resources
mobilised and the innovative technical assistance scheme put in place by
the AFD, in order to draw operational lessons. The latter could also inform
the implementation of other government-designed schemes, in particular
the Overseas Communities Recovery Contracts (Corom), which are
currently being deployed.
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