VAN DER VLIESISTOTER/LUBACH traded on a monopoly market, because the infrastructure was technically too less ophisticated to allow competition (E.E. ten Heuvehof, a.o. ). Nowadays infrastructures with regard to electricity allow competition without losing the availa bility of electricity for everybody. This makes privatisation feasible In theory social welfare might be privatised, with substantal financial support of the govemment. It is however not predictable that such a transfomation will favour find. uy and efficiency. In situations like that a good reason to privatise is hard to find; the challenge is not in the decision to privatise or not, but to be sought in finding a good institutional frame for management of the product 5 Private corporations with public tasks 5.1 Introduction Some forms of privatisation do not imply a total rejection by the government of the tasks which were fomerly carried out by organs of the govemment themselves. The bjective of privatisation of these tasks, which are still regarded as mportant in the general interest of society, is not as much to get rid of any govemment influence. market conform, The motives of privatisation are dealt withun more efficient c Being privatised, the form in which these tasks are carried out is those of priva legal bodies, mainly public com panies limited by shares(NV)or private companies with limited liability(BV). Sometimes the fomm of a foundation(stichting)is used These three legal persons are regulated in chapter 2 of the Civil Code(Bw) Hereafter we will focus on the two types of companies and leave the foundation In a considerable amount of cases the govemment wants to maintain a certain degree of influence in the way these tasks with a general interest and therewith a public character are carried out by a private organisation In Dutch law organisations with a mixed character, such as in France le societe d economie mixte, are not developed. And apart from the public organisa tor govemed by legislation prescribed in the Constitution, general rules on organisations with a public law characterare underdeveloped Of course there are a lot of so-called independent adm inistrative bodies(=elfstandige bestuursorganen)more or les form can only be a legal body accordingto private law WTi comparable with administrative agencies. But when we privatisation is at stake the This implies inherently a certain tension between the private fom of the legal body and the more or less public content of the tasks that havet be executed In general this has to do with the relation between private and public law in the Dutch While preparng this chapter we heavily relied on the study of C.A. Schreuder, Publiekrechtelijke taken, privaatrechtelijke rechtspersonen, Kluwer, Deventer 1994 The terms public and private are used here in a different sense than n the dstnction between pubhc and private law. Both the Nv and the Bv are legal persons accord ing to private law Public here has t do with openness or transparancy private with the closed structure of the
VAN DER VLIES/STOTER/LUBACH 6 traded on a monopoly market, because the infrastructure was technically too less sophisticated to allow competition (E.E. ten Heuvelhof, a.o.). Nowadays infrastructures with regard to electricity allow competition without losing the availability of electricity for everybody. This makes privatisation feasible. In theory social welfare might be privatised, with substantial financial support of the government. It is however not predictable that such a transformation will favour efficacy and efficiency. In situations like that a good reason to privatise is hard to find; the challenge is not in the decision to privatise or not, but to be sought in finding a good institutional frame for management of the product. 5 Private corporations with public tasks1 5.1 Introduction Some forms of privatisation do not imply a total rejection by the government of the tasks which were formerly carried out by organs of the government themselves. The objective of privatisation of these tasks, which are still regarded as important in the general interest of society, is not as much to get rid of any governement influence, but mainly to carry out these tasks in a way that is supposed to be more efficient or market conform . The motives of privatisation are dealt with in chapter 1. Being privatised, the form in which these tasks are carried out is those of private legal bodies, mainly public2 companies limited by shares (NV) or private companies with limited liability (BV). Sometimes the form of a foundation (stichting) is used. These three legal persons are regulated in chapter 2 of the Civil Code (BW). Hereafter we will focus on the two types of companies and leave the foundation aside. In a considerable amount of cases the government wants to maintain a certain degree of influence in the way these tasks with a general interest and therewith a public character are carried out by a private organisation. In Dutch law organisations with a mixed character, such as in France le societe d economie mixte, are not developed. And apart from the public organisa tions governed by legislation prescribed in the Constitution, general rules on organisations with a public law character are underdeveloped. Of course there are a lot of so-called independent administrative bodies (zelfstandige bestuursorganen) more or les comparable with administrative agencies. But when we privatisation is at stake the form can only be a legal body according to private law. This implies inherently a certain tension between the private form of the legal body and the more or less public content of the tasks that have te be executed. In general this has to do with the relation between private and public law in the Dutch 1 While preparing this chapter we heavily relied on the study of C.A. Schreuder, Publiekrechtelijke taken, privaatrechtelijke rechtspersonen, Kluwer, Deventer 1994 2 The terms public and private are used here in a different sense than in the distinction between public and private law. Both the NV and the BV are legal persons according to private law. Public here has to do with openness or transparancy , private with the closed structure of the BV
APPLICATIONOF ADMINISTRATIVELAW TOPRIVATZATIONS legal system. Departing from the viewpoint that government can use private aw to execute public tasks, the important notion is developed over the last decades in both case law and legislation, that when adm inistrative authorities do so, a mix of private and public law is applicable In this respect and not the least for the subject of this paper it is important that e discem between two major fields of private aw I. e contract law in general and the law governing private legal bodies Regarding contract law we have to keep in mind that in Dutch law we do not ve public contract law to speak of For Dutch lawyers a contract is a private contract. Connected with the notion we just mentioned, this does not mean that a govemment contract is governed by public law only On the contrary, when a pu bl authority uses a contract the applicable law is very often a mix of private and public law. Being a flexible instrument a contract very easily absorbs public law. To a great extend one can, so to speak, colour (pre)contractual relations with elements of public law or in another metaphor fill contracts with a public content In this respect the law concerning private legal bodies is different. This has to do with the structure of this part of aw. Law conceming organisations has an intemal structure. It has to deal with the different competences of the different organs of the organisation. In most cases the legal provisions bring about a certan balance of owers. Public rules can easily interfere with this balance and disturb it. Another spect is that a private company has a specific interest, that cannot be equal with the general interest public authorities always have to keep in mind. We will elaborate on that point lateron For now it is sufficient to make clear that law regarding private organisations is vulnera ble for alien influences To use one other metaphor: one can compare contract law with a balloon, it is empty inside, you can fill it with different contents and only when the pressure becomes too high it will burst. Law on organisations you can compare with a honeycomb, it has an nternal structure which can be damaged very easily So, com ing back to our subject, it is probable that there are inherent legal limits the way and extend to which public authorities are allowed to influence private corporations. And that goes also for private corporations executing tasks regarded for the In the following paragraphs we will discuss the possiblities(par 5.2)and the limits(par. 5.)of govermment influence in private hw companies. In par 5. 4 we will give some attention to thethe influence of public law on the output of these companies In par 5.5 we conclude with some conclusions 5.2 Possibilities of government influence in public and private companies In general public authorities with a regulatory competence can exercise influence on public and private companies in two different ways a. by using the instruments of private law. b. by means of specific public law regulation Ad a Strictly the use of prive lw in exercising influence on privatised organisations
APPLICATION OF ADMINISTRATIVE LAW TO PRIVATIZATIONS 7 legal system. Departing from the viewpoint that government can use private law to execute public tasks, the important notion is developed over the last decades in both case law and legislation, that when administrative authorities do so, a mix of private and public law is applicable. In this respect and not the least for the subject of this paper it is important that we discern between two major fields of private law. I.e contract law in general and the law governing private legal bodies. Regarding contract law we have to keep in mind that in Dutch law we do not have public contract law to speak of. For Dutch lawyers a contract is a private contract. Connected with the notion we just mentioned, this does not mean that a government contract is governed by public law only. On the contrary,when a public authority uses a contract the applicable law is very often a mix of private and public law. Being a flexible instrument a contract very easily absorbs public law. To a great extend one can, so to speak, colour (pre) contractual relations with elements of public law or in another metaphor fill contracts with a public content. In this respect the law concerning private legal bodies is different. This has to do with the structure of this part of law. Law concerning organisations has an internal structure. It has to deal with the different competences of the different organs of the organisation. In most cases the legal provisions bring about a certain balance of powers. Public rules can easily interfere with this balance and disturb it. Another aspect is that a private company has a specific interest, that cannot be equal with the general interest public authorities always have to keep in mind. We will elaborate on that point later on. For now it is sufficient to make clear that law regarding private organisations is vulnerable for alien influences. To use one other metaphor: one can compare contract law with a balloon, it is empty inside, you can fill it with different contents and only when the pressure becomes too high it will burst. Law on organisations you can compare with a honeycomb, it has an internal structure which can be damaged very easily. So, coming back to our subject, it is problable that there are inherent legal limits to the way and extend to which public authorities are allowed to influence private corporations. And that goes also for private corporations executing tasks regarded important for the general interest. In the following paragraphs we will discuss the possiblities (par 5.2) and the limits (par. 5.3) of government influence in private law companies. In par 5.4 we will give some attention to the the influence of public law on the output of these companies.In par 5.5 we conclude with some conclusions. 5.2 Possibilities of government influence in public and private companies In general public authorities with a regulatory competence can exercise influence on public and private companies in two different ways: a. by using the instruments of private law. b. by means of specific public law regulation Ad.a Strictly the use of prive law in exercising influence on privatised organisations