Peace Palace

Renovation of the Peace Palace


The Minister of Foreign Affairs of the Netherlands Mr. Blok informed the Dutch Parliament in July of the stalemate that has arisen over renovation of the Peace Palace. The matter recently had some coverage in Dutch media. Indeed, a stalemate arose over the proposed renovation of the Peace Palace as a result of the demand made by the Dutch government in return for the renovation, which is that the ownership of the Peace Palace must be handed over to the State, a condition the Carnegie Foundation cannot meet. Against this background, the Foundation feels the need to clarify its position.

The Peace Palace

The Peace Palace currently houses the International Court of Justice of the United Nations, the Permanent Court of Arbitration and The Hague Academy of International Law. These institutions are supported by the Peace Palace Library. The Peace Palace was established over a century ago (in 1913) thanks to a donation by Andrew Carnegie to create a “Temple of Peace” – as he called it – in order to contribute to the peaceful settlement of international conflicts. The Peace Palace has successfully performed that task ever since, and in doing so, has evolved as a courthouse into what it is today: a worldwide symbol of “Peace through Law.” This is why the United Nations expressly elected The Hague, via the UN Charter, as the seat for the International Court of Justice. The Peace Palace is therefore of eminent importance for the image of The Hague, “the international City of Peace and Justice.” Thanks to this image, many other legal institutions have chosen the Netherlands and The Hague as their headquarters.

The Role of the Carnegie Foundation

At the founding of the Peace Palace, the then Netherlands government and Andrew Carnegie agreed to create an independent, public foundation that would be responsible in perpetuity for the ownership and management of the Peace Palace and the Library: the Carnegie Foundation. The idea that the government would not be directly involved in matters of the Court and that the Peace Palace would offer an impartial setting later proved to be a crucial premise in guaranteeing the independence of the Courts housed in the Peace Palace. The Dutch government reconfirmed this and even decided to take a further step back a number of years ago.

Financial context

Upon its establishment, the Peace Palace did not receive any endowment funding of its own. Andrew Carnegie firmly believed that the willingness of the member states to contribute to the management and maintenance costs of the Peace Palace should bear witness to the Court’s lasting social value and significance. The Carnegie Foundation basically has no income sources other than the contributions by the Courts for their housing, the contribution from the host country provided by the Dutch government, rent from The Hague Academy of International law, which has been in the Peace Palace for over a century, and revenue through incidental rent of accommodation.

The Netherlands is the host country for the international institutions housed in the Peace Palace, which contribute greatly to both the international standing of the Netherlands and to the economy of The Hague. Within the framework of its host country function the Dutch state is responsible for housing the courts, including related services. Various audits conducted at the government’s request in the past 20 years, have shown that this contribution by the Netherlands as host country is too low to cover the actual costs of housing the Courts and maintaining the buildings. The contribution by the Dutch state (€4.4 million) has not been adjusted for inflation since 2004. A number of years ago, it was even reduced, leading to a current financial gap of over €2 million between the amount necessary to fulfill the key duties and the amount that is actually allocated.

The Foundation furthermore recently had to inform the Minister of Foreign Affairs that due to suspension of activities such as rental of accommodation in the Peace Palace and ensuing loss of income, the shortfall in the state’s contribution threatens to compromise the housing and servicing of the Courts. So far, the most pressing problems resulting from the shortfall in the state’s contribution were solved by generating extra revenue, but with COVID-19, this is no longer the case.

The need for renovation

Insufficient contributions by the Dutch State have led to a situation where maintenance of the Peace Palace is overdue and structural improvements and modernization of certain facilities, such as fire safety, cannot take place. A further problem is the presence of asbestos, used when constructing the Peace Palace. Temporary measures in order to contain the asbestos were already undertaken in 2015. Since then, periodic measurements have shown there has been no exposure to asbestos and no health risks for the people working at the Peace Palace. Nevertheless, a structural solution remains necessary and urgent. In order to structurally remove the asbestos, the Carnegie Foundation sought funding in 2016 from the Minister for Foreign Affairs, however to date no budget for asbestos removal has been allocated.

Ownership of Peace Palace

Last year, the Dutch government decided that given the overdue maintenance, the asbestos issue and the need to modernize facilities, a larger renovation of the Peace Palace was necessary and that, as host country, the Netherlands must take on that responsibility. However, as a condition of the financing of the renovation, the government demanded that the ownership of the Peace Palace should be transferred to the State. The reason being, that this is necessary for the loan facility envisaged by the state.

It is of course gratifying to the Carnegie Foundation that the government acknowledges the need for a thorough renovation and that it aims to meet its obligations, the cost of which the government estimated at €150 million. The Carnegie Foundation however is unable to meet the condition of expropriation of the Peace Palace. Not only would it harm the functioning and image of the Peace Palace, but also the Foundation is legally not authorized to do so, based on its bylaws and Andrew Carnegie’s Deed, whereby the Peace Palace was established. The Board of the Foundation is puzzled that the Netherlands, in order to meet its host country obligations, should suddenly, after a century, require ownership and management of the Peace Palace, whereas so far, the government has always strived to stay out of such affairs. Nonetheless, the Foundation has repeatedly indicated its readiness to manage the costs of renovation and to involve the Ministry of Foreign Affairs in Board matters. The Foundation has put forward proposals to that effect. Given the mutual interest in keeping the international institutions in the Peace Palace, the Carnegie Foundation trusts a solution will be found which honors the constitution of the Peace Palace as well as the legitimate interests of the Dutch state.

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