WILLEMSTAD/ PHILIPSBURG:--- The CBCS has finally moved towards criminal prosecution in the Ennia case. Anyone who deliberately drains a pension and insurance institution must answer to the criminal court. But anyone who believes the matter ends there misses the essence of the governance problem of which Ennia is only the most visible expression. In a state governed by the rule of law, that rule of law applies to everyone – including the central bank.
The uncomfortable truth is this: Ennia could only derail on such a scale because supervision failed for many years. That supervision had a name and an address: the Central Bank of Curaçao and Sint Maarten (CBCS). The issue is therefore not only the criminal acts of the former owner and directors, but also the governance neglect of the institution that was supposed to prevent tens of thousands of policyholders and pensioners from ending up in the danger zone, and avoid that the state ends up paying the bill.
Criminal law is necessary, but not enough
Public debate now focuses on whether or not there will be prosecution. That is understandable – it speaks to justice, to the feeling that “the big players” get away too often.
But criminal law looks at individual guilt and provable criminal acts. It does not answer the broader questions: how could it be that signals about solvency, risky investments, and conflicts of interest failed for years to trigger effective interventions? What choices were made – or not made – within CBCS when it became clear that Ennia was a systemic risk? What role did the governments of Curaçao and St. Maarten play as shareholders of CBCS? And how did the internal organs, such as the executive and supervisory boards (incl audit cmt) perform ? Did Kingdom institutions knew that the situation at Ennia had been fragile for years?
Without answers to these questions, we are left with the image that we “catch the crook” but leave the gatekeeper untouched. That is disastrous for trust in the system.
Why an internal evaluation is not enough
It is being suggested that CBCS will draw lessons and conduct an internal review of what can be improved. That sounds sympathetic, but it is exactly what should not happen. An institution that failed to correct itself for years cannot credibly investigate its own neglect, behind closed doors, with a report that the public may never see in full.
Ennia is not about an accounting error; it is a systemic crisis in supervision, governance, and political responsibility. That calls for an independent, public review, comparable to what was done in the past at Aqualectra. In that case, it was evident that public ownership and public losses justified an in depth public inquiry. In the Ennia case, that public dimension is many times greater: here, not just tariffs are at stake, but life long pensions, taxpayers’ money, and trust in the financial system.
All organs in the governance chain under scrutiny
A serious evaluation therefore cannot stop at “CBCS had a difficult task.” We need a clear picture of the role of all organs in the governance chain:
Within CBCS: how were warning signals assessed, which interventions were considered, and why was the heaviest instrument – the emergency measure – applied so late?
In the governments and parliaments of Curaçao and St. Maarten: what information did they have, how did they fulfil their role as shareholder and legislator, and where did they look away?
At Kingdom level: how were repeated warnings about the vulnerability of supervision and financial stability in the Caribbean parts of the Kingdom handled? Were there such warnings ?
Only when these questions are answered publicly and factually can citizens and policyholders judge whether the institutions “above them” are living up to their responsibilities.
Time for an Ennia report on CBCS
If we want to use the Ennia crisis to improve the system holistically instead of merely punishing a few perpetrators, one step is unavoidable: an independent, public inquiry into the functioning of CBCS and the wider governance chain around Ennia. Not to destroy the Bank, but to develop it as a mature public institution that can be corrected.
Criminal prosecution is necessary, but not sufficient. In a state governed by the rule of law, that rule of law applies to everyone, including the central bank: bringing full clarity about what went wrong inside CBCS and which organs played a role in that is at least as important as the criminal prosecution of those who bled Ennia dry. Precisely the consistent application of the rule of law to all holders of power is essential to maintain and strengthen trust in our democratic constitutional state.
Mike Willem, BaEcon, MBA
Former Minister of the Netherlands Antilles and former Commissioner of Curacao
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