21 May 2006

An analysis of the IOSA-NL report: “At Home in Holland? How Staff Members of International Organisations View Life in The Netherlands”

By George Nielsen, former member of the ESTEC Staff Association
(ESTEC (European Space research and TEchnology Centre) is the technical centre of the European Space Agency. It is located in Noordwijk, South Holland, the Netherlands.)

Introduction

The above mentioned report, which can be seen on the URL http://iosa-nl.org/documents/Survey_Report.pdf, and which has been issued by the IOSA-NL (International Organisations Staff Associations of the Netherlands, URL: http://www.iosa-nl.org/) is a very interesting document, both with regards to the issues that were on the agenda twenty years ago and still are, the new issues that have appeared since then and the ones that no longer are mentioned. For example, health care in the Netherlands is now one of the major reasons for dissatisfaction with the country. Nobody voiced any complaints about the Dutch health service in staff morale reports during the eighties. On the other hand, in the above mentioned report no complaint was made at the fact that staffers at international organisations (IOs) are not able to vote for or stand for office at local elections, an issue which caused discontent to staffers at the time. Could it be because they have been enfranchised for local elections provided they have lived in the municipality for at least five years?

In the following I shall attempt to review several different points that have been raised, comment them and try to clarify them. The purpose of this is to provide a contribution to help IO staffers obtain a better quality of life in Holland.

Medical system

As mentioned previously, this seems to be a relatively new issue. During the eighties one heard few complaints about the Dutch medical system. Could it have deteriorated since then? It was not until the mid nineties that complaints about medical care started to be made by the staff association. Deteriorating medical services seems to be a worldwide trend, for demographic and economic reasons. Yet there is apparently no shortage of IO staffers who stated that they can obtain better medical treatment in other countries. Even people who in general had favourable things to say about Holland were critical of the country’s medial system. Some IO staffers wrote that even the British medical system is better than its Dutch counterpart.

It is difficult to imagine that the Dutch authorities can change the entire medical system of the country for the sake of IO staffers, even if they wanted to. A solution would be to introduce a two-tier medical system: one for IO staffers and one for the rest of the population.

Difficulties with the Host/Seat Agreement

The comments made on this subject are essentially the same as were made during the eighties. It seems as if little has changed in this respect since then. The following quotations will be commented:

“[name of IO deleted] staff have no access to most privileges as listed in the “Protocol Guide for International Organisations” issued by the Ministry of Foreign Affairs. The Protocol itself is NOT known by staff and we are denied –for no apparent reason-privileges like tax-free petrol which would make a considerable difference considering that we do not have access (as most of the population here) to subsidized housing or mortgages.”

The inability of IO staffers to offset mortgage payments with tax deductions has been mentioned in many different places in the report, on which more anon.

“In spite of the “Protocol Guide for International Organizations” of Dec. 2000 I feel that we are having less and less of the economic privileges foreseen for Staff of International Organizations of BO status. I refer to the fake exemption of BPM and BTW on cars (this exemption becomes real only if you keep the car for at least 25 YEARS), to the not applied exemptions from road taxes and fuel excises, to the extremely high local taxes we have to pay on houses, and so on.”

From what I understand staffers of several IOs are able to purchase one car tax-free, provided the chassis number is presented during the probation period. After that all cars must be purchased and registered like any other in the country. Is there any IO whose staffers get a refund on the BPM and BTW of cars after 25 years of ownership, as implied by this quotation?

“The reason for the discrepancy between benefits for [name of IO deleted] staff and staff of other International Organisations is unclear …”

I remember having been told that during the eighties staffers from the NATO STC (SHAPE Technical Centre) obtained the right to purchase tax free cars, fuel, alcohol and tobacco products. That was because American staffers already enjoyed these privileges thanks to the PX, and these privileges were subsequently extended to all staffers. The STC only had its offices in Holland and could easily relocate, I was told. Therefore the Dutch authorities had an incentive to give staffers of this organisation whatever they asked for, lest it move abroad. Organisations that have undertaken vast capital expenditures in Holland, like ESA, are hardly able to move. Therefore the Dutch authorities do not need to bend over backwards to satisfy their staffers. The fact that staffers of some IOs enjoy better conditions than those of others was the cause of a certain amount of discontent. I hope that the reason for this discrepancy has now become somewhat clearer. (Perhaps staff associations of IOs would be well advised to provide more information on such matters, to enlighten the people who elect them.)

“… From this point of view the diplomatic status needs to be granted including exemption from local/state taxes and Dutch legislation …”

Even during the eighties ESTEC staffers stated that they considered it their right to enjoy diplomatic status with respect to tax-free cars, fuel, cigarettes and tobacco. With respect to car taxes the logic behind the system is the following: IO staffers do not exist in the Dutch system as they are registered by the ministry of foreign affairs, not by their respective city halls. But their cars do exist, as they are registered like any other ones in the country, and therefore are subject to road and fuel tax.

“Local authorities seem not to appreciate the fact that international organisations provide benefits that have a positive impact in their community (providing jobs, real estate values have increased because of expat demands, car sales, etc.”

Indeed, it seems that the money of IO staffers chasing a limited amount of housing has had the effect of raising its cost Holland. How ungrateful of the natives for not appreciating this, as it has made housing more expensive for them, and thus pricing them out of this market or obliging them to settle for poorer quality or less housing. It is a good idea that quotations in this report are kept anonymous.

Tax system

The points mentioned here are basically similar to those made in the past.

“Lots of work needs to be done by the Dutch authorities to remove the wrong impression by the Dutch people that [name of IO deleted] salaries are tax free (indeed the internal tax we pay cannot even be balanced against mortgage payments as Dutch people can).”

“Regarding child care facilities; the Dutch childcare facilities are good, but even with a good salary it is difficult to be able to pay up to EURO 1000 per child and month for small children and up to EURO 500 per child and month for school children (after social clubs) without having any tax deductions like the Dutch.”

Both in this and under other headings there have been many complaints about the inability to benefit from deduction of mortgage payments from one’s income tax. Non IO staffers can reduce their taxes by taking up a mortgage. The problem is that if one’s income tax is zero, which is the case for many if not most IO staffers, then there is no room for any tax reductions, as one can hardly pay negative taxes.

A solution to this would be to register all IO expatriate staffers as other aliens, and non expats as any other citizens. Thus IO staffers will have to pay income tax. But then they will not only benefit from the ability to reduce taxes to offset mortgage payments and child care costs, they will also be able to profit from the Dutch social system, receive a Dutch pension, and in time even become eligible for Dutch citizenship. Many IO staffers may even become legible for the recently introduced Zorgtoeslag. Talk about killing several birds with one stone.

If the Dutch authorities refuse IO staffers the privilege of paying income tax, and thus the ability to deduct mortgage and child care expenses, then staffers could demand from their employer a reduction in the internal tax to offset such payments. But this is a matter between the IOs and their staffers and does not involve the Dutch authorities.

“… The car prices are also 60% higher than a normal country.”

I wonder which country is considered “normal” in this context. Switzerland? The United States of America? The Canadian Province of Alberta? All EU countries (with possible exceptions among the new ones) have a VAT rate of at least 15%.

“Road Taxes on cars and taxes on gasoline should be removed as for those working for international organisations.”

These arguments have also been mentioned under the heading Tax System. To implement such measures would require that cars be BN, GN or CD registered. CD (Corps Diplomatique) is normally used for embassy and consular staff, BN and GN (said to mean Geen Nederlander) is also a tax free registration and is meant for other categories of people, such as non-diplomatic embassy staff and foreign armed forces personnel.

“As I mentioned before as an EXPAT that I have left my country to work abroad I have no benefits apart from being able to buy one tax free car within the first 10 years of employment with [name of IO deleted]. After this – if I need to buy a new car I have to pay outrageously high BPM and VAT taxes which is almost 100% of the car price.”

I know of IOs which allow expats to buy a car within the first six to twelve months of employment. I wonder which one gives the possibility of getting one within the first ten years.

It would seem that the authors of the above three quotations do not come from Nordic countries, or have not spent much time there. In fact, BPM (45.2%) and VAT (19.0%) add between them 72.8% to the car price. For further information see
:
http://www.belastingdienst.nl/buitenland/download/38.html. (Perhaps IOs or their staff associations would be well advised to enlighten expat staffers on such matters as well.)

In the ESTEC Staff Association it used to be the consensus that tax free cars for staffers were a right which had been unfairly denied to them by the Dutch authorities. The fact that wages of A and L grades were at the time subject to a levy and those of B and C grades to an abatement exacerbated the situation, as it was believed that the Dutch authorities owed staffers tax free cars to compensate for the levy and the abatement. It was said that car taxes in the Netherlands were so high so as to make the purchase of a new car an all but unaffordable luxury for staffers – except for those who had just arrived and were still in their probation period, and who could only purchase one car tax free.

Cost of living

Although complaints about the cost of living in Holland are not new, they have not been as marked in the past as they are now. The introduction of the Euro seems to have caused a considerable increase in prices. But many other countries in Euroland have experienced the same phenomenon, so moving to one of them would presumably not solve this problem. Similarly, moving to an EU country which has not yet introduced the Euro, or to any potential EU country, would entail similar problems in the future.

As it does not seem possible for the Dutch authorities to reduce the rate of inflation for IO staffers, a solution to the problem of high prices following the introduction of the Euro would be to move overseas, to a place which faces little likelihood of ever joining the EU. Another solution would be to stay in Holland, as these price increases are a one-off. Moving to an EU country which has not introduced the Euro entails the risk of exposing staffers to such price increases for a second time.

“Most negative aspect of the Netherlands: Inability to claim mortgage relief thus leading to house prices being very expensive for us compared to local nationals.”

Once more, this complaint has been raised by others under different headings. It seems that taxing the income of IO staffers really would solve this problem, and would presumably make people happier. Provided, of course, that IO staffers also benefit from the same facilities to deduct mortgage and child care expenses and to receive Zorgtoeslag that other residents of the Netherlands enjoy.

Naturalisation

This issue has been on the agenda for a long time. During the eighties many ESTEC staffers expressed a desire to obtain Dutch citizenship.

“The major problem I have come across having children here is that they CANNOT become naturalized and these poses on them (almost Dutch now after more than 20 yrs of living here) insecurity and a discrimination vis-à-vis their Dutch friends and partners. Further, the question I pose is: what will happen to them (for their status in NL) when I reach my pension age and leave the country. Will they be forced to leave as well? As now they still have, like me, the special permit from the Buitenlands Zaken. I find this is unacceptable situation and very negative for my children future and status in this country.”

Registering IO expat staffers in the same system as other aliens would, as mentioned previously, solve this problem. On the basis of the IOSA-NL report it almost seems that it should be presented as a matter of urgency to the Dutch authorities to permit IO staffers to pay income tax and thus not only benefit from the possibility of deducting their mortgage payments from their taxes, but also be able to obtain permanent residence in the Netherlands and eventually Dutch citizenship.

Pollution

This seems to be a relatively new issue, as I do not recall any complaints about pollution in Holland in the past.

“Holland is one of the most polluted countries in Europe. See link here below, picture taken by Envisat in June.
http://esamultimedia.esa.int/images/EarthObservation/pollution_europe_hires.jpg.”

As I have in the past worked on an Envisat payload, as well as with the Meteosat radiometer and an MSG (Meteosat Second Generation) instrument, I found this link very interesting. I presume that it shows the NO2 concentration as recorded by the SCIAMACHY instrument.

It is not clear whether the picture is a worst case snapshot or whether it is an average for the whole month of June. It looks like a snapshot, with artificial colours to illustrate NO2 concentration. It is similarly not clear whether this June is typical, or whether the worst hit region suffered from a freak phenomenon, such as an inversion. Nor is it clear what year it is from. During several days in June 2005 many parts of Western Europe suffered from a heat wave. It would have been more revealing to show the average NO2 concentration over a period of several years, if possible over the entire lifetime of Envisat. In any case, such pictures are of little value unless they can be corroborated by measurements on the ground.

I assume that the ones who complain about pollution in Holland are not Athenians or have not spent much time in Athens. In any case, it is difficult for the Dutch authorities to reduce pollution only of the air that IO staffers come across. Holland suffers from bad weather during a certain part of the year, such as strong winds and rain, often at the same time. But this effect would seem to clear the air of pollution. I suppose that many people will have noticed how clean the air in Holland is when compared to numerous other places. In the 4 November 2005 issue of The Amsterdam Hague Times Alderman Ries Smits was quoted as saying that it is an “absolutely wrong impression” that Holland is one of the most polluted countries in Europe. He added: “The air in The Hague has never been as good as it is now, and we’re working to make it even better. Go out side and smell it.” I invite IO staffers to come to Athens and compare the air in this city with that of the Randstad.

Questionnaires for IOs in the NL

It would have been very interesting if the results of question “A1a: Yes, I would like to move to the following 3 countries, in order of preference:” were included, to see which countries are Holland’s greatest rivals in this field. It would also be nice if the results could be grouped by IO or by nationality of respondents, to see whether there is any distinct tendency.

According to the staff associations the replies in the survey revealed that the three preferred countries of IO staffers in the Netherlands were France, Spain and Italy, in that order. The climate in Spain and Italy and much of France is milder than that of Holland. (That of northern France, places like Lille, Calais and Dunkerque is very similar to that of Holland.) The cuisine of these countries is far superior to that of the Netherlands. But English is not widely spoken in any of these countries. They all use the Euro. And the price of housing has increased markedly in recent years in both France and Spain.

As for France, staffers of several IOs there, such as the European Synchrotron Research Laboratory in Grenoble, have to pay income tax on their salaries. But they do benefit from the French pension, social security and unemployment insurance system. That seems to offer IO staffes what they really want: to benefit as taxpayers both from the pension and social system of their host country and consequently to be able to deduct interest payments for mortgages from their income tax. Could that be an example for the Netherlands to follow in order to make IO staffers in the country happy?

Charts

The charts shown in the report were very interesting. However, if I may, I would like to show how they could have been made more illustrative and, in some cases, more concise. (Sorry for their being blurred in this blog. The originals are very sharp.)

The charts Reasons for Leaving and Reasons for Staying could be combined in one. In this one can compare the reasons in each category. It can be seen that there is no category in which the number of respondents who give it as a reason for staying outnumber those who give it as a reason for leaving. The numbers do not necessarily correspond to those of the IOSA-NL report, although I have tried to get them close.



In the following the information from the five pie charts in the IOSA-NL report has been combined in one bar chart. In it one can see at a glance that staffers of OPCW (Johan de Wittlaan 32, The Hague) and of EPO (Patentlaan 2, Rijswijk) show a greater than average desire to leave Holland, while staffers in NATO NC3A (Oude Waalsdorperweg 61, The Hague), ICTY (Johan de Wittlaan, The Hague) and even ESA/ESTEC (Keplerlaan 1, Noordwijk) are more satisfied with life in Holland than the average of IO staffers. The numbers have been taken from the IOSA-NL report.



Conclusion

The IOSA-NL report is very nice, interesting, well written and appropriate, and I thoroughly enjoyed reading it. It would also be interesting to show the results of similar reports from previous years, to see whether there is any trend. Besides that, it would be interesting to show the results of similar reports on IO staffers in other countries, to see what kind of problems they face, and to find out whether there is any country which is well suited for IO staffers.

It would have been useful if the IOSA-NL report could shed light on the host agreements of different IOs. For example, it could be explained which, if any IO refunds BPM and VAT of cars after 25 years of ownership, and which permits staffers to purchase a car tax free within the first ten years of employment. Thus it would be easier to understand the basis of staffers’ discontent.

In any case, I am looking forward to reading an improved Issue 2 of the IOSA-NL report.

It really is a challenge for IOSA-NL members to persuade the Dutch authorities to improve the conditions for IO staffers. If people refuse job offers by IOs in Holland and, worse yet, if IO staffers start to leave the country in droves, then this would have a much more powerful effect. As long as expats stay in Holland, and more keep coming, the Dutch authorities may see little urgency in improving their conditions. A report which shows an increasing trend of IO staffers leaving Holland, and including a survey in which staffers (both Dutch and expat) state that the reason why they make such a move, even though they are going to less interesting jobs at lower pay, is simply because they can no longer live with the conditions in Holland, may well galvanise the authorities into action. Quotations from the human resource departments of IOs stating that it is becoming increasingly difficult to recruit people as prospective employees are reluctant to put up with hardship in Holland would also have a strong effect on the Dutch authorities. (In fact, after reading the IOSA-NL report it does seem a wonder that IO staffers keep staying in Holland for so long.)

Dissatisfaction with the Dutch medical system has topped the list with around 20 quotations on this subject. Discontent with the general cost of living and with housing (cost and quality) was mentioned in five quotations, and dissatisfaction with the Euro was mentioned in two quotations. A way to solve these problems would be to establish housing estates for IO staffers. There it should be possible to purchase or rent high quality housing at reasonable prices. Shopping malls and medical facilities should be set up in such estates, thus enabling residents to find desired products and services at reasonable, preferably tax free prices. In fact, there is no reason why the Euro should be used in such estates. Instead prices can be denominated in U.S. Dollars, Pounds Sterling or whichever currency may be to the liking of residents. To realise this will require the cooperation of both the Dutch authorities and the IOs. The former will have to contribute by finding and providing suitable locations, as well as allocating funds, while the contribution of the latter will have to be mainly financial.

It may indeed prove possible to agree that such estates are given extra-territorial status, and thus will be outside the jurisdiction of Dutch law, and thereby out of bounds of the Dutch police and authorities. Instead they can be governed by the laws of one of the home countries of expats or, if possible, by laws similar to those of the United Nations headquarters in New York. Embassies and foreign military bases are not subject to the laws of their respective host countries either.

Between them complaints that mortgage payments and child care expenses cannot be deducted from taxes and problems with naturalisation and/or residence permits for family have been mentioned in eight quotations. Complaints about high car purchase taxes or prices have been mentioned in five quotations, complaints about fuel excises and road taxes have between them been mentioned five times, and complaints about pollution have been mentioned in three quotations. An obvious solution to the first problem would be to register IO staffers at their respective town halls, and thus enable the deduction of mortgage payments and childcare expenses from income tax. It would similarly be highly desirable to give IO staffers the right to purchase tax free cars and fuel and exonerate them from road taxes. A skilled negotiating team may be able to present these demands as a quid pro quo: to agree on the deduction of mortgage payments from taxes if the authorities allow the ownership and purchase of tax free cars and fuel respectively. If the ability to deduct mortgage payments from taxes results in increased home ownership by IO staffers, then they would be less inclined to leave Holland. That is something that the Dutch authorities would probably appreciate.

As for automotive taxes, IO staffers could be given the rights to use CD, BN or GN registration for their cars. It is not likely that the Dutch authorities will permit the use of AA registration by IO staffers.

Last, but no least, demands should be made that the Dutch authorities put up an official Website stating the details of the host agreements which they have negotiated with each IO, together with the contribution of each IO to the Netherlands, to Europe and to the world. In the IOSA-NL report there are three quotations stating that IO staffers are not liked or welcome by the local population and two quotations stating that the host agreements are not known by IO staffers. If the facts were put up in an official Website then not only would IO staffers be able to compare their conditions with those of staffers of other IOs, but also the attitude of the local population towards IO staffers would become more favourable. In fact, if Dutch citizens become familiar with the plight of IO staffers, instead displaying resentment, hostility and intolerance they might take pity on them. Especially when considering the hardship that IO staffers have to endure and the sacrifices they make in order to help to create Europe and to make the world a better place for all.
Links
General
International Organisations (numbers denote the percentage of staffers surveyed who want to stay in the Netherlands)
Dutch Ministries, Public Administrations, Municipalities
Dutch Political Parties