FAQ: Information requests from supervisory authorities

As a result of the Coalition Agreement of 2017, EUR 50 million will be made available for (supervision and) enforcement by the SAEI. There is an expectation that SAEI supervisors will carry out more and more intensive inspections. It is possible that other supervisory organizations – such as the Human Environment and Transport Inspectorate – will follow the same approach as the SAEI. An important question in this development is how companies should deal with requests or claims from supervisors. In this blog we provide a number of tools with regard to this question.

This blog therefore focuses on the various ways in which supervisors can request information. They can do this in a number of  ways: in writing or verbally, formally or informally, etc. How companies respond to a request for information from a supervisor depends on the way the request is presented.

Competence to request information and its limitations

Who: Supervisors under administrative law are defined in section 5:11 of the General Administrative Law Act (GALA). In short, supervisors are the natural persons who, on the basis of a statutory regulation, are charged with supervising certain statutory rules. For example, some SAEI officials are designated as supervisors for compliance with, for instance, the Foreign Nationals (Employment) Act, Minimum Wage and Minimum Holiday Allowance Act and the  Working Conditions Act.

What: Supervisors may use certain legal powers in the exercise of their supervisory duties. On the basis of section 5:16 GALA, supervisors are authorized to request information. Supervisors are also authorized to request access to certain information or documents under section 5:17 GALA. In short, this means that supervisors may take and copy company documents for the investigation.

Obligation of cooperation

Upon the grounds of section 5:20 GALA, a data subject is in principle obliged to cooperate in the exercise of supervisory powers by supervisors. A person can be fined or even face a criminal sanction for failing to cooperate.

The obligation to cooperate does not apply to persons who are subject to a duty of confidentiality (section 5:20 paragraph 2 GALA). Furthermore, the obligation to cooperate only applies to ‘claims’ in the sense of the GALA and not to informal requests. The importance of this observation is discussed separately below.

Limitations

It is important to note that a supervisor can only formally use his powers if this is ‘reasonably necessary for the performance of his duties’. Section 5:13 GALA prescribes that supervisors must observe the principle of proportionality in the exercise of their powers.

This means, among other things, that a supervisor must exercise his powers in the least inconvenient manner for the person in question. For example, a supervisor should check whether he can view and copy the business records of a company on the company premises before deciding to take the records away. Another example is that a supervisor will first have to check whether the person concerned wants to cooperate voluntarily in a company visit before taking further action such as a dawn raid (Parliamentary Documents II 1993/94, 23 700, 3, p.142).

In the exercise of his powers, a supervisor must also inform the parties involved of the reasons for exercising his powers (Parliamentary Papers II 1993/94, 23 700, 3, page 141). In accordance with the principle of proportionality and section 5:17 GALA, a supervisor may only request those documents relating to the statutory regulation to which the supervision relates when demanding access to certain documents (Parliamentary Documents II 1993/94, 23 700, 3, p.141).

Companies do not have to automatically provide all information when asked. The authority to request information only applies to facts and not to opinions (Section 5:16 GALA). In addition, supervisors will have to substantiate their claims to a certain extent. When a supervisor’s claim is too general or abstract, a supervisor may be asked to elaborate or clarify his request. Finally, a supervisor could also be required to motivate his claim and to state the legal basis (Parliamentary Papers II 2004/05, 29708, 7, p.11).

Informal information requests versus requirements as defined in the GALA

Not all information requests from supervisors qualify as a requirement under section 5:16 or section 5:17 GALA. A supervisor can informally request certain information during a company visit for example. Such a request will not necessarily be a ‘claim’ within the meaning of section 5:16 or 5:17 GALA (see Acts II January 31, 1996, page 3664), particularly if the supervisor does not motivate and set out the legal basis of the request. Written requests do not always qualify as a ‘claim’ either  under the GALA. The wording of the written request may show that this is an informal (friendly) request from the supervisor in question.

The obligation to cooperate under section 5:20 GALA applies only to requirements in the sense of the GALA. Therefore, there is no obligation to cooperate with informal requests for information from a formal point of view. However, failure to cooperate with a requirement within the meaning of the GALA may involve the risk of a fine or even a criminal sanction. Furthermore, in cases of formal claims supervisors are in principle obliged to deal with the information provided confidentially, which is not automatically the case with informal requests.

In many cases, supervisors may change an informal information request into a formal requirement, in which case the company must cooperate (in principle). In addition, companies mainly prefer to maintain a good relationship with the regulators. In practice this often means that a company will rarely refuse to cooperate with an informal request. Whether a company decides to cooperate with an informal request from a regulator ultimately depends on the specific situation but it is important to remember that they do have a choice in this process.

In short: it is essential for companies to determine whether they are dealing with a formal claim in accordance with the GALA or with an informal request from a supervisor. The company in question will mainly have to rely on the wording of the regulator. The chosen wording may show that it is a formal claim (e.g. by  reference  to a legal competence) or that it is an informal request (e.g. the supervisor requests ‘information without obligation’). Companies in doubt would do well to ask the supervisor whether he uses a legal compentence and, if a supervisor indeed is using his powers, to ask what kind of legal competence he uses.

In practice

This FAQ sets out the following tips on how to deal with  (information) requests – formal or informal- from supervisory authorities:

• If it is not clear whether the request for information is formal or informal, or if it is not clear which (legal) authority a supervisor uses, this can be clarified by checking with the relevant supervisor.
• If a company receives a request for providing information that is too general, it should ask the supervisor for further details or an explanation.
• If a supervisor does not explain the use of its supervisory powers, a company can ask the supervisor for reasons.
• If a supervisor wants to take company documents, the company can suggest the documents are inspected and copied on the company premises.

This FAQ only provides a general outline. The response to an information request (or claim) will vary each time and depends on the nature of the investigation.