Since May 2020, the Nederlandse Aardolie Maatschappij (NAM) has repeatedly pressured the government to reinforce fewer houses in Groningen than the government wants. The gas extraction company threatened on these occasions not to pay for houses that the government declares unsafe on the basis of “outdated standards” according to NAM. According to the NAM, hardly any homes need to be reinforced.
This is apparent from letters between NAM and central government that were requested on the basis of the Government Information (Public Access) Act.
It had already been known for a year that NAM did not pay the invoices from the government for the reinforcement operation in full. But the company publicly emphasizes that it is an accounting problem: according to the accountant of the NAM, the invoices are not detailed enough.
The dispute comes after the government took control of solving the problems caused by gas extraction in Groningen. In 2018, then Minister Wiebes (Economic Affairs, VVD) concluded an agreement with NAM to reduce gas production to zero. The government also became responsible for dealing with damage caused by earthquakes and for reinforcing unsafe houses. There was great dissatisfaction with how NAM handled the damage and reinforcement: not generous, legally and without an eye for the vulnerable position of concerned residents of Groningen.
The NAM was therefore put ‘at a distance’. The company, a joint venture of Shell and ExxonMobil, had to continue to pay for the damage and reinforcements. But the government would determine the damage caused by earthquakes, identify which homes are unsafe, and how they will be reinforced.
In a press release last month in which NAM announced arbitration over the invoices, the company emphasized this division of roles. “This dispute is not about government policy choices” […] As is known, NAM is remote and the company is not involved in these further choices for claims handling and the reinforcement approach.”
Outdated standards
It appears from the Wob documents that the NAM made choices in the reinforcement operation repeatedly discussed† In June 2020, the company writes: “Using outdated insights triggers reinforcements that are unnecessary from a security perspective. […] The costs of this cannot therefore be recovered from NAM.” In September 2020, NAM wrote: „The reinforcement operation […] is carried out on the basis of (strongly) outdated standards”, and she has “in recent years frequently and through various channels submitted this to the State […] brought to the attention.”
According to the NAM, the government does not keep to the agreements about how it designates and reinforces unsafe houses. It states that this is done with a methodology that “is based on the latest architectural and seismic insights and the latest insights into future gas extraction”, and that this methodology “will be regularly updated”. According to the NAM, this is not happening, causing “a significant number of houses to be reinforced on the basis of outdated standards” […] while reinforcement is no longer or only to a limited extent required for security.”
The company asks the minister to explain “friendly” and “with copies of the related (source) documentation” why he does not follow the instructions of the NAM about necessary adjustments to the methodology.
strong letter
In a according to an official “solid” letter On 13 August 2021, outgoing minister Stef Blok will set aside all objections from NAM. It is laid down in ‘binding agreements’ that ‘the Ministers of EZK and BZK decide how the reinforcement is carried out’ and that ‘as a result it is not (any longer) up to the NAM [is] to decide on the manner in which the reinforcement operation is to be carried out; including the choice […] which buildings qualify for reinforcement.” And that NAM must therefore pay the costs “regardless of the answer to the question whether NAM would have implemented the reinforcement operation in the same way.”
Complaints about the lack of information in the invoices are also dismissed. There have been ‘efforts’ to accommodate NAM, but ‘NAM must recognize that a consequence of transferring responsibility for the reinforcement […] is that NAM can no longer prescribe in detail how the administration should be set up.”
A version of this article also appeared in NRC in the morning of March 29, 2022