Dutch Chamber of Commerce incurring high costs for governments and companies

The lack of a modern digital Dutch Chamber of Commerce costs governments and businesses is a source of high costs and complications and restricts access to crucial government information such as the company register. This is evident from an initial analysis of recently published documents via a FOIA request, including the annual accounts of the Dutch Chamber of Commerce and overviews of the use of the company register by Dutch authorities.

Published documents through FIOA

Earlier this year, Open State Foundation filed a FOIA request about the costs of the company register held by the Dutch Chamber of Commerce. Access to company information costs governments and businesses unnecessarily millions of euros each year. The Dutch Chamber of Commerce derives income by selling the information of the company register. Governments also have to pay high costs for access to this public register, even though they make basic government information available free of charge to the Chamber of Commerce. Open State Foundation has advocated for a long time that the public company register should be fully publicly funded and that the data should be freely re-usable for everyone.

Unnecessarily expensive registration costs

Because the ‘gathering task’ (generic registration costs) in the cost structure of the company register is allocated to information products by means of unclear allocation keys, the lack of digitalisation, overdue maintenance and outdated ICT systems is charged to governments and businesses that only want digital access to data from the company register. The extent of this legacy takes a lot of time, money and effort, only became clear late, and was bigger than expected. Due to the unnecessarily expensive ‘gathering task’, governments and businesses who simply want access to information are obstructed and charged at high costs.

Governments in the Netherlands use €64 million of company register data

The demand for company register information has increased in recent years. In 2016, various Dutch governments used a total of €64 million in information products. That is a doubling compared to a year earlier. Municipalities bought €27 million worth of products from the company register, ministries for €20 million and waterboards for almost €15 million. Most of this was spent on the Company Register data service, a service that links data from the company register with an application from an organisation.

2016* Municipalities Ministries Provinces Waterboards ZBO Total
Adresses 172396,15 2591445,55 181517,16 36925,96 2982284,82
Business profile concernrelations 29242,75 184962,05 5045,6 14066,2 45,05 233361,65
Business profile annual account 41057,80 267599,90 6882,50 24150,65 70,25 339761,10
Business profile summary 146032,05 489900,25 8962,30 59985,40 174,90 705054,90
Concernrelations 7820,15 33053,45 2432,70 421,35 832,10 44559,75
Dataservices 23712918,15 12129853,35 2128709,60 13923214,95 51894696,05
Deposits 2316,55 35662,05 238,50 445,20 79,50 38741,80
Gewaarmerkte jaarrekening 105,00 562,50 7,50 675,00
History 19643,40 62312,25 469,05 11569,90 840,05 94834,65
In short 16662,00 34776,50 391,50 6376,50 50,50 58257,00
Annual accounts 2375,95 21697,70 2360,70 42,70 277,55 26754,60
KvK adresses internet 25856,57 1555,35 74,67 27486,59
Mutation subscriptions 1703697,85 2334937,23 109247,13 543775,37 1725,12 4693382,70
Other online 1489,35 25717,55 294,20 24,40 6,10 27531,60
Summary EGU 12292,50 15352,50 1567,50 1530,00 30742,50
Summary online (view) 717988,10 2032051,90 18534,10 225549,45 18300,90 3012424,45
VRIS 5746,35 9814,70 878,95 152,65 777,80 17370,45
Total 26617640,67 20271254,78 2467531,49 14848312,85 23179,82 64227919,61

The increase in government use is caused by the obligation of Dutch governments to connect to the company register. This increase is not without consequences. The published documents show that the increase in use by, for example, the North Sea Canal Environment Agency in 2015 temporarily led to limited availability of HR data services for other customers, including businesses. In addition to these services, governments also incur additional costs for taking custom work. For example, the conversion of a monthly to a weekly subscription, an activity that the Chamber of Commerce sees as custom work, costs a government organisation € 3,900 per conversion.

Unclear allocation

Out of a total of €116 million government grant to the Chamber of Commerce in 2017, €38 million was earmarked for the register task. The Chamber of Commerce received €39 million for its information task and €22 million for its innovation promotion task. However, this allocation per task is shady: some products and services contribute to multiple tasks. In addition, with the sale of data in 2017, almost €50 million was earned and the Chamber of Commerce received €12 million in registration fees. The Chamber of Commerce has had a net result of €114.9 million in the past three years.

Registration 2014 2015 2016 2017
Government Grant EZ 59,0 54,3 38,2 38,0
CR information products 46,2 50,4 49,5 49,9
Registration fee 9,9 12,1 12,4 12,7
Direct costs 51,8 69,1 65,9 72,5
Indirect costs 40,7 33,2 32,1 31,5

Evaluations ignore costs and efficiency

In 2016 KPMG evaluated the so-called input funding for government use. The documents reveal that the financing system was not supposed to be in question. In the evaluation of the Law on the Chamber of Commerce (PDF) in 2017 by Andersson Elffers Felix, whose purpose was to provide insight into the effectiveness and efficiency of the functioning of the Chamber of Commerce, the register task and access to the company register were not taken into account. Both evaluations show that the Chamber of Commerce is unable to adequately quantify the relationship between the costs of managing the register, the revenue and its use. The KPMG evaluation also showed that governments purchase more product features than is actually necessary.

Annual accounts Chamber of Commerce not public

The annual accounts of the Chamber of Commerce are usually not public. That is why Open State Foundation asked the Ministry of Economic Affairs to request public access to these documents by invoking the Public Access Act on 20 February 2018. In addition to the annual accounts, Open State Foundation also requested reports and documents from the Company Register’s User Council, including the ‘Evaluatie Inputfinanciering Overheidsgebruik HR’, which was commissioned by the Ministry of Economic Affairs, various memos and minutes. Rates lists and the costs for the use of governments have also been requested.

Total direct use data company register

Open data remains unspoken in the Company Register’s Users Council

Since 2015, the Reuse of Government Information Act has been in force. The trade register has been designated as an exception. According to the Ministry of Economic Affairs, the reason for the exception was the financing of the Chamber of Commerce. The input finance evaluation states that the Chamber of Commerce considers a ‘changing cost concept’, the integral costs (both gathering costs and provision costs) to be applicable, but that there are ‘differences of interpretation’ with regard to the applicability of the law and that this has not been legally tested. Although successive annual accounts view open data as a financial risk for the income of the Chamber of Commerce, the topic has not been discussed in the past three years during discussions of the Company Register’s Users Council. However, the annual accounts state that the ‘timely digitalisation of the services’ is important for the financial robustness of the organisation.

Independent research needed for efficiency of Company Register

The House of Representatives is currently discussing a legislative amendment to the Company Register Act (2007). For an informed debate on this Act, access to the actual costs of its implementation by the Chamber of Commerce is of crucial importance. Because the published documents do not adequately provide insight into the actual costs of registration and provision of information from the company register, Open State Foundation, calls upon the House of Representatives, to ensure that such an investigation, for example by the Netherlands Court of Audit, takes place before the treatment of this bill.