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Croatia Bosnia and Herzegovina Republic of Serbia
Balkan Anti-corruption Civic Initiative
TITLE: BALKAN ANTI-CORRUPTION CIVIC INITIATIVE PARTNERSHIP FOR SOCIAL DEVELOPMENT, Zagreb, Croatia AUTHOR: Munir Podumljak PSD RESEARCH TEAM: Sandra Gajić, Ana Hećimović, Munir Podumljak, Elizabeta Švaljek TEAM OF INVESTIGATIVE JOURNALISTS: Ana Jelinić, Denis Latin, Domagoj Margetić OPEN SOCIETY FUND, Sarajevo, Bosnia and Herzegovina AUTHORS: Aleksandra Martinović, Mervan Miraščija, Renata Radić-Dragić RESEARCH TEAM: Aleksandra Martinović, Mervan Miraščija, Renata Radić-Dragić EDITORS: Aleksandra Martinović, Mervan Miraščija, Renata Radić-Dragić THE FUND FOR AN OPEN SOCIETY and CENTRE FOR DEVELOPMENT OF NON-PROFIT SECTOR, Belgrade, Serbia AUTHORS: Miodrag Milosavljević, Jasna Filipović, Ivana Stevanović, Nenad Portić, Rade Ðurić RESEARCH TEAM: Miodrag Milosavljević, Mihajlo Čolak, Nenad Portić, Jasna Filipović, Ivana Stevanović, Rade Ðurić EDITOR: Miodrag Milosavljević ACADEMIC RESEARCH CONSULTANTS: ROMANIAN ACADEMIC SOCIETY, Bucharest, Romania PUBLICATION OF THE PROJECT: IPA 2008 Programme- Support to Partnership Actions „Fight against Corruption, Organized Crime and Trafficking“ PUBLISHER: PARTNERSHIP FOR SOCIAL DEVELOPMENT, Zagreb, Lomnička 1, 2011. EDITOR: Munir Podumljak DESIGN: ACT Printlab d.o.o., Čakovec PRINT: ACT Printlab d.o.o., Čakovec COPIES: 1050 pcs
The content of this publication is the sole responsibility of Partnership for Social Development and can in no way be taken to reflect the views of the European Union.This project was financed by the European Union This publication has been produced with the assistance of the European Union. .
and partners in the project are Romanian Academic Society (Bucharest).Introduction BACCI Project was financed by the European Commission. City of Banja Luka and Community Trebinje. the subjects of analysis were the Ministry of Finance. and field research (interviews). Ministry of Administration. Ministry of Public Administration and Local Self-Government. this project aims at strengthening the role of the CSOs in the Western Balkans in design. It started in January 2010. In Bosnia and Herzegovina. In Serbia. the subjects of analysis were five cities in the Republic of Croatia (Čakovec. Osijek. Sisak. Ministry of Finance of Republika Srpska. Ministry of Health. Ministry of Finance of Sarajevo Canton. Open Society Fund (Sarajevo). court registry. etc. Split and Zagreb) and four ministries (Ministry of Finance. the subjects of analysis were the Ministry of Finance and Treasury of Bosnia and Herzegovina. the requirements of the Freedom of Access to Information. City of Novi Sad. 4 Balkan Anti-corruption Civic Initiative . and promotion of participatory democracy in the Western Balkans region. recruitment and appointment. within IPA 2008 Programme. The Fund for an Open Society (Belgrade) and Centre for Development of the Non-Profit Sector (Belgrade). implementation and monitoring of anti-corruption policies. Through BACCI. public procurement. based on CSO regional partnership as well as on the partnership and understanding among policy stakeholders. the state of conflict of interest in the region was researched and efficient mechanisms for combating conflict of interest were created. Furthermore. financial management (budget). Sarajevo Canton. City of Kragujevac. research and analysis of publicly available data (Internet. Ministry of Health and Social Welfare. Partnership for Social Development is the Project Manager. The research methodology included analysis of legal frameworks. Ministry of Finance of Federation of Bosnia and Herzegovina. and Ministry of the Interior). In Croatia. City of Užice and Community Pirot. and five municipal entities: Brčko District. promotion of partnership between Western Balkans regional CSOs and networking and exchange of anti-corruption expertise and experience between the Western Balkans countries and the EU.). The overall objective of the BACCI Project is to improve Western Balkans countries’ capacities to efficiently suppress corruption through design and implementation of innovative anti-corruption tools and approaches based on empirical and comparative data analysis. enhancement of citizen participation in decision making processes. media and civil society. target groups and beneficiaries of the action. and five municipalities: City of Belgrade. Topics analysed within the BACCI project were access to information. City of Mostar.
head of Directorate for Financial Transactions. Sandi Vidulić i Mak Jovanović Introduction 5 . City of Zagreb: President of the City Hall Morana Paliković Gruden. Stevo Tkalčec (Croatian Democratic Union). Joško Dvornik (Croatian People’s Party). Jozo Radoš (Croatian People’s Party). City of Čakovec: President of the City Hall Gordan Verbanec (Social Democratic Party). Journalists: Leo Nikolić.During the field research. Ivica Kruhoberec i Dražen Kovač. Journalists: Danijel Prerad. Department for Development and Human Resource Management. Damir Petranović. Journalists: Krunoslav Kartus i Drago Hedl. head of City Office for Economy. Zdravko Strižić i Mato Piškor. the following people were interviewed: Ministry of Health and Social Welfare: State Secretary Dražen Jurković. Secretary General Zlata Kedžo and Katja Matijević. Gabrijela Kramarić Eid (Croatian Social Liberal Party). Margareta Mađerić (Croatian Democratic Union). Davorko Vidović (Social Democratic Party). Business and Development Željka Kerum. Ministry of Finance: Vesna Pardon. City of Osijek: President of the City Hall Gordan Matković. Kristina Ikić Baniček (Social Democratic Party). Marija Ružić (Croatian Social Liberal Party). City of Split: City Hall Deputy President Darko Parić (Social Democratic Party). Tomislav Dovranić (Public relations office). Velimir Srića (Croatian Social Liberal Party) City of Sisak: Deputy Mayor Agan Velić. Miljenko Žamarija (Croatian Social Liberal Party). Journalists: Aleksandra Ličanin.
Croatian Context .
Croatian Context 7 . administrative or judicial system of a country. widespread networks of conflict of interest can create a fertile environment for the ‘capture’ of the political. still under the umbrella of the EU accession process. Often inevitable in exercising public duty. a first set of documents was adopted: the Freedom of Access to Information Act. it does confirm that there are additional efforts needed in this direction in order to successfully tackle the problem. During the first phase (2000 – 2004) mostly within the Stability Pact framework and initiatives of the Council of Europe. progress reports of the European Commission continue to state that conflict of interest „is not understood at all levels“. As with any problem. Why is conflict of interest the focus of research and analysis? Since the beginning of Croatian negotiations aimed at EU accession. has focused on gauging the efficiency and results of the systems established. and design and development of public procurement systems and laws related to financing of political parties and election campaigns. a precondition to finding a solution is to understand the size. The focus of joint country and multilateral efforts was further development and capacity building of the established institutions and further improvement of the initial set of laws. The third phase (2008 – ongoing). Recognition of corruption as the one of the most challenging problems to modern democratic society has led to design and adoption of a series of international treaties and tools to combat corruption. and the Council of Europe Convention Against Corruption. and a Parliamentary commission was established for the suppression of conflict of interest).Conflict of interest – the invisible strangler of democracy! A decade of fighting corruption In the last decade global and regional efforts in the fight against corruption have significantly increased. Adoption of these legal frameworks has been followed with the establishment of the first specialized state bodies (in Croatia. such as the United Nations Convention Against Corruption. creating benchmarks for accession countries. a specialized prosecution body was established. and that corruption is still widespread. if not properly addressed. the Suppression of Conflict of Interest Act. Conflict of interest is the foundation of corruption. although it should not be equated with corruption per se. shape and causes of the problem. Since the start of the new millennium the Western Balkan region has gone through three major stages of anti-corruption institutional and legal framework development. and on trying to analyse the results of a decade of combating corruption. In the second phase (2004 – 2008) the initiatives of Western Balkan countries hoping to join the European Union became the leading force in the further development of anti-corruption tools and institutions. USKOK. Such treaties have created a roadmap for countries and international organisations in designing frameworks to fight corruption and have resulted in intensive global institution building. Office for Suppression of Corruption and Organized Crime. Even though the general statement that „conflict of interest is not understood at all levels“ requires further elaboration and empirical data to fully delineate and comprehend the scope of the problem.
Therefore corruption rests on a substantiated conflict of interest whose outcome is that the private interest prevails over the public interest with the ensuing damage falling to the public office or to public affairs. wherein the less important or less principled interest(s) prevail(s) over the most important or most principled interest.Generally. Therefore. conflict of interest is defined as conflict between one or more interests in a certain undertaking. etc.) is that efforts have not resulted in significant improvement in general perception or in significant positive change in any of the empirical indicators. The more conflict of interest exists in a certain public body. And this situation is the same in all of the Western Balkan countries. thus inducing an inefficient or damaging outcome to an undertaking.g. SIGMA. the more likely that the environment for corruption is ripe. Transparency International’s Corruption Perception Index. World Bank indicators. the research that follows focuses on the most likely opportunities for corruption and this paradigm aided researchers in delineating objectives and methodology. It is indisputable that Croatia has invested significant efforts and resources into combating corruption. World Bank Corruption Ratings (1999-2010): 8 Balkan Anti-corruption Civic Initiative . and in selecting target institutions. However. corruption has been generally defined as „use of the office for private gain“. On the other hand. the general impression reflected in a variety of monitoring indices (e.
there is at least a five-year difference in the length of concerted EU agenda reform work. And each stage of accession (starting negotiation and signing the SAA to closing negotiations) is different in terms of the increasing obligation of the accession country and the expected increase in the level of resources invested in the accession process. and Bosnia is new to the process and at the stage of signing the Stabilisation and Association Agreement (SAA). is a condition for negotiating accession (corruption reform in particular was set as a more stringent condition after the accession of Bulgaria and Romania). the democracy scores (combined indicators of freedom of media.between Bosnia. and Serbia. In terms of the EU accession process. etc. Croatian Context 9 . Combating corruption. The fact that there is no significant difference in indicators among Western Balkan countries (especially Bosnia. as well as overall reforms in relevant legislation and institutional frameworks. civil society. meaning that improvement in one usually leads to improvement in the other and vice-versa.) generally correspond to corruption ratings. However. Serbia is early in the negotiation process. human rights. Croatia and Serbia) raises concern that investment in reforms under the EU negotiation process has not resulted in expected significant improvement. corruption indicators. It would therefore naturally be expected that Croatia. As expected. Croatia. would be far ahead in its progress relative to corruption and democracy indices in comparison to Serbia and Bosnia.World Bank Democracy Score (1999-2010): World Bank indicators show that after the first set of reforms (Phase I. 2000 – 2004) that resulted in significant improvement in all aspects of governance. rule of law. Croatia is closing negotiations and preparing for full membership. the current trend is general stagnation (or retrogression) based on indicators that continue to be monitored. property rights. this is not case. different countries are in a different stage . the first of these three in the accession regatta and the one furthest along in the process.
Arresting the former Prime Minister did not change the fact that the judiciary is still under a high level of political control. In the last decade. particular in light of the EU experience with Bulgaria and Romania. As a result. Even though in terms of Croatian institution building and legislative reform related to the fight against corruption there has been significant improvement. has not met the expectations of Croatian citizens. banners and videos saying that corruption is bad. with some supporting activities to build awareness. and airing video spots on national TV). What are the reasons for such negligible impact? As stipulated in this report. flyers. a fact that is evidenced in the statistics shown in all independent (non-national and non-government) indicators. that police are almost an exclusive tool in the hands of their minister. The focus of anti-corruption measures on prosecution and basic political and ideological propaganda has left a large part of the problem unscathed. and that there are no independent or objective media in Croatia because those that have tried to be independent have suffered political and personal fallout. Efforts to build and enhance political integrity and integrity of the public administration were left to other reform processes that obviously have not met the anticorruption objectives. the focus of the fight against corruption in targeted countries (as well as other Western Balkan countries) was to reform the criminal law framework. posters. solved with simplistic flyers. tried to convince international stakeholders and the people of Croatia that there were no ‘untouchables’ in Croatia’s efforts to clean up government and political life and prosecute corrupt political figures at the highest level. Large media campaigns. The lack of objective and independent research as well as a lack of indicators based on country specific problems was not likely to lead to a positive result. and lack of significant improvement among the countries lies in the way that reforms were imposed and the way they were implemented. Instead. This short-sighted process.One of the reasons behind the stalls. Motivated mostly by the external pressure of EU accession. and his Deputy Minister Damir Polančec. largely through typical information campaigns (distributing posters. retrogression. Judiciary and Fundamental Rights – has been closed. as reflected in the Corruption Perception Index and other indices. were aired to demonstrate that Croatia is winning the fight against corruption. national anti-corruption strategies and action plans have a singular objective – to satisfy the formal conditions and benchmarks set by the EU that are based on the experience of EU institutions. tools and institutions were designed by simple copy-paste techniques in their adoption of new laws and partial measures and institutions to suppress corruption. these campaigns have led to frustration and cynicism. Anti-corruption and human rights CSOs tried to warn the EC bodies about this situation but the concept of active consultation between CSOs and the EC is thwarted when the national government sees all of those who are critical of its actions as enemies of the country instead of partners in country development. 10 Balkan Anti-corruption Civic Initiative . Government institutions misunderstood prevention as the need for a simple communication strategy. prevention measures in particular have fallen short of the mark. and this lack of attention resulted in inefficient and anaemic measures that did not meet expectations of the general public. one of the most difficult chapters in negotiations – Chapter 23. designed largely without the participation of civil society and the general public. Rituals of massive arrests and even television spectacles showing charges being brought against former Prime Minister Ivo Sanader. such measures have had little or no impact on the scope and breadth of corruption. run mostly by expensive public relations agencies. National governments invested too few resources in efforts to objectively analyse the problems. implemented measures.
this research covers a variety of areas in national and municipal governance. such as trade in influence. the suspect quality of data published has effectively diminished the Croatian Context 11 . access to information and openness of the government is essential. and networking of interests are not being tackled or suppressed within current efforts. citizen oversight to check the work of government. have slowly taken over the centres of social power and now threaten the fundamental role of the state to protect the basic rights and fundamental freedoms of citizens. More complex forms of corruption. Thus. such is bribery. and basic declaration of assets information is available on the web page of the Parliamentary commission for the suppression of conflict of interest. to examine the full picture. and on the performance of state bodies or state representatives. Policies to prevent conflict of interest in the overall Croatian policy environment Effective prevention of corruption and conflict of interest is based on transparency in the work of political stakeholders and public bodies. All of the cases that have been prosecuted are related to direct or indirect receipt of money in exchange for a service. In light if these facts. In order for the public to adequately participate in implementing any conflict of interest policy. and in some cases with organized crime. In Croatia. Declaration of assets by public officials. and networks of influence that have captured the state in the interest of a small group of people close to government or in government itself. accessibility of data coupled with a possibility to distribute information to the general public by a variety of stakeholders for the purpose of creating public discussion and judgment on issues raised. declaration of interests and data on the performance of any public body must available to the public in order to enable citizens to form an authentic opinion about the actual behaviour of individuals who exercise their power in public office. it also examines the personal integrity of designated officials. career advancement. from budgetary policies to public procurement. political integrity. have exposed widespread networks of corruption. financing of civil society organizations and media. citizen participation in the political process. this research clearly demonstrates that many of the actions related to conflict of interests have not been tackled in overall anti-corruption efforts to date. appointment and employment procedures.Measures taken to date focused on the more simple forms of corruption. although they have targeted simple forms of corruption. It co-exists and depends on other relevant policies such as transparency. and the policies related to media and development of civil society. However. Conflict of interest as reflected in legislative references represents mostly a moral and disciplinary issue applied to public officials and state employees. Most of the criminal proceedings. decision or influence. Conflict of interest as a phenomenon requires analysis of overall governance and the political environment and cannot be eradicated by a single law or a single body in any society. But any research on conflict of interest must also look at the correlation between policies to address conflict of interest and other relevant policies such as Freedom of Access to Information or other policies that promote transparency. The phenomena of designing ‘clusters’ of interest formed by influential government and public administration officials together with certain businesses. such information is available to the public as part of the law on conflict of interest.
declaration of interests and sources of income. access to information was not possible.ability of the public. Somewhat better results were seen in the cities of Sisak. For 31% of the requests. as other laws oblige authorities to publish such documents. appointments and employment. financing of the media. The most frequently answered questions related to budgets. Split and Cakovec. state authorities handled only 40 requests (44%) in accordance with the law. Data published to date does not provide enough information on many issues. and financing of civil society organizations. a total of 91 requests for information were sent to four ministries and five municipalities. Zagreb and Osijek as well as the Ministry of Interior and Ministry of Public Administration had poor results. This research not only reveals challenges in suppressing conflict of interest and implementing existing legislation. especially on issues related to property (ways of acquiring property by the official). 12 Balkan Anti-corruption Civic Initiative . answering an average of only two out of 11 requests sent to each of the entities. The pattern of answers from authorities shows that the ‘sensitive’ areas (questions least frequently answered) related to public procurement contracts. media and civil society to reach accurate conclusions or properly exercise their public duty. Though the Law on Freedom of Access to Information has been in force for eight years. less than 50% of requests were answered properly by relevant state and municipal bodies. but also in providing interested citizens the information they need to participate in suppressing conflict of interest. and in 25% of requests the information did not correlate to the questions asked. standardized requests for information were simultaneously sent to relevant ministries and municipalities. In Croatia. Law on freedom of access to information For the purpose of this research. and from the Ministry of Health and Ministry of Finance. Broj poslanih zahtjeva 11 11 11 11 11 9 9 9 9 91 Odgovor Odgovor Zahtjev Bez potpun nepotpun odbijen odgovora 2 7 7 2 6 2 4 5 5 40 5 3 2 1 2 2 0 4 4 23 2 0 1 0 0 1 4 0 0 8 2 1 1 8 3 4 1 0 0 20 INSTITUCIJA/ GRAD Grad Zagreb Grad Split Grad Sisak Grad Osijek Grad Čakovec Ministarstvo unutarnjih poslova Ministarstvo uprave Ministarstvo zdravstva i socijalne skrbi Ministarstvo financija UKUPNO As seen from this chart.
Podumljak stating that „most of the questions will not be answered as they represent an official secret“. The responses resulting from the attempt to access information helped to establish a road map for the research team – to determine which categories would be looked at more carefully during the research. such as trade in influence and formation of interest-based informal clusters. which has proven to be a problem in detecting and suppressing conflict of interest. research on media articles.A particularly revealing response to legitimate requests for information came from the Ministry of the Interior. financing of NGOs. introduced in the Spring of 2011. the most recent change to the Freedom of Access to Information Law. Public procurement. relation to and oversight of the media. an official letter from the Minister was given to Mr. Croatian Context 13 . and appointment procedures became the main focal points for field research. the Minister sent an official note to the project leader. Most of the changes over the past eight years targeted enhancement of the sanctioning system and imposing discipline in reporting on property issues for public officials. These changes did not address burning issues related to more complex corruption-like behaviour. but also intentionally served to create pressure on the research team in getting access to data relevant for their research. Upon receiving the official request for access to information from PSD (organisation. Law on conflict of interest in the exercise of a public office The law on conflict of interest has been changed four times since its first adoption in 2003. and in conducting interviews with relevant stakeholders. However. Hopefully. with no further explanation. the insufficiency of responses to official inquiries led researchers to the conclusion that the first precondition for suppression of conflict of interest (access to data) is not functioning and therefore public participation in the suppression of conflict of interest is not possible in such a policy environment. even after the latest changes at the beginning of 2011. the implementation and monitoring of implementation of conflict of interest legislation may prove challenging in many of the cases. and changes to the Constitution declaring that access to information is one of the fundamental constitutional rights of all of citizens and foreigners in the Republic of Croatia. nor do the changes in the law address the issue of state capture by conflicting interests. Finally therefore. to immediately appear before the office of migration within the Ministry of Interior (the project leader is of foreign nationality with a legal permanent residence in the Republic of Croatia). PSD also conducted research on conflict of interest in 2007-2009. may jointly bring some positive changes in implementation of the law. Munir Podumljak. This is not only illegal and unconstitutional in Croatia. but results remain to be seen. BACCI project leader). the Law on Suppression of Conflict of Interest focuses on the property of officials rather than on the interests of officials. During the meeting at the police department for migrations. in which the negative correlation between transparency and conflict of interest was previously established (in all situations where information from the relevant body was denied some kind of conflict of interest in decision making or implementation of decisions was found). At the same time.
it is possible. Even simple analysis of the text of the law has raised several concerns expressed by civil society in Croatia. that officials will play with transfer of responsibilities to lower level management in order to avoid the scope of the law and to avoid possible consequences of the law. as has been the case so far. and therefore to control the decision making process. there were many problems at HRT. as well as other Western Balkan countries. 14 Balkan Anti-corruption Civic Initiative . the list of officials that are obliged to respect the law on the conflict of interest is still insufficient and does not reach as far as it should. and directly influence the way HRT will operate. are out of reach of the law. In this situation. Instead. and the Commission is no longer obligated to respond to the interested party (which is regulated by the administrative law in Croatia giving every citizen the right to initiate procedure and obliging the authority to respond to such request). the Commission can but does not have to initiate a procedure upon the request of an interested party. one of the key entities in protection of the public interest is the Croatian National Radio and TV Company (HRT). In all of the anti-corruption laws so far (Freedom of Access to Information being the best example) any situation in which the law says an agent of government “can but does not have to” in practice means “will not“. are not obligated under the law. when in fact it was too late for any further changes in the text of the law. This process allows government to choose so-called independent experts that will be appointed to the Commission. members of the supervisory boards (program and financial) are obligated under the law on conflict of interest. Most of the stakeholders are members of Parliament. In the new version of the law. the draft law was seen only in Parliament during the adoption procedure. and as practice has proven so far. especially at the municipal level. Parliament acts solely as a voting machine without any authentic willingness to question the work of government. with NGOs and experts that work in the field of anti-corruption). And in the last three years. and will be directed by the government and their parliamentary majority. Croatia. representing the majority as well as opposition. has a poor record of Parliamentary oversight of the work of government. Under the new law. as it would be logical that all persons participating in decision making or executing decisions related to the public interest should come under the law on conflict of interest. and they typically make decisions related to everyday work. with some outsiders that will be appointed by the Parliament on the recommendation of the government (that in turn hold a majority in the Parliament). executives of the HRT. and even expected. including political influence on informative programming that led to massive demonstrations by HRT’s own employees. For example.One of the problems lies in the fact that government promised to hold public consultations with relevant stakeholders on the latest changes in the conflict of interest law (for example. Therefore. In HRT. At the same time. program editors and managers. CSOs and interested members of the public have lost the right to initiate a procedure before the Commission to address perceived conflicts of interest. design plans and strategies. it is expected that procedures before the Commission will be used solely for the purpose of political battles. A second challenge in implementation of conflict of interest law is the procedure for appointing members of the Commission that decides on conflict of interest cases. At present. Many of the personnel.
limitations on participation in public procurement procedures. acceptance of gifts. Even though there were some changes in the part of the legal text covering sanctions. When this shortcoming is combined with the fact that the body deciding on conflict of interest cases is controlled by the political majority. even if this is proven. the law stipulates that the relevant body is not obliged to follow this suggestion. The law does not address the issues of both material and non-material advantages. employment and career advancement procedures are out of reach of the law. For example. there is still a lack of adequate measures in the law to protect the public interest or delineate payment of damages when public interest has been violated. only the amounts related to salary have changed. which in practice and in fact leaves the notion of conflict of interest outside the scope of the law. which again leaves many situations unregulated. these changes did not alter anything in terms of the principles of the law. It is also important to emphasize that the Commission can reach Croatian Context 15 . appointment. fees. Such obligation exists only in the field of public procurement. the impression left is that there are simply too many loopholes in the law that can and will be used by those in power. The amount of penalty is minor in comparison to the potential for private gain. For example. The most significant weakness in the sanctions provided by the law is that in fact sanctions can be imposed on the false disclosure of assets. Overall. Sanctions can be imposed for non-disclosure or false disclosure related to property. apparent and actual conflict of interest. and the obligation to declare source of income: Warning. suspension of the part of salary (total amount in range of approximately 300 to 5. Only in cases when an official refuses to implement the decision of the Commission related to the declaration of property. there is still no obligation to annul any legal acts or documents that were adopted or decided as the result of a conflict of interest situation. but it is more closely linked to the design of a new public procurement law than to the conflict of interest law itself. However. and sanctions are not linked to the size of the private gain. Such measures have proven to be insufficient to prevent any kind of conflict of interest.Changes in the law have not followed the recommendations of the Council of Europe and there is no clear differentiation between potential. which is one more dead end in the law’s attempt to sanction abuse and violations. These measures existed before. without any obligation to initiate a procedure upon the request of independent institutions and civil society. There is no sanction for potential non-material advantages for the official. This anomaly undercuts the very purpose of the law. the Commission can make a „proposal or suggestion“ to the relevant body to remove the official from office. but not on the false disclosure of interests. thus high-ranking officials can easily abuse the system to design networks and capture mechanisms that will serve their private or sometimes political party interests. and all of those that have been sanctioned are still in their offices (unless criminal charges on other issues were pressed against them). membership in supervisory boards in for-profit companies. focusing on property and not conflict of interest.500 EUR) on the maximum period of one year. and public disclosure of the opinion of the Commission on the situation. which means that many conflict of interest situations remain out of reach of the law.
and sanctions for such conduct. Such situations may significantly endanger these other policy making and policy execution processes as the speed of decision making can make a huge difference in the success of initiatives of the municipal or national government when officials are in fact trying to respect provisions in the law. a company appears on the procurement tender in another ministry.such a verdict only in a situation related to disclosure of property and notably not in situations of conflict of interest. to the extent they exist at all. do not know what to do in situations of potential or apparent conflict of interest. Such measures are simply shell games for those that see an opportunity to grow their business while they are politically active. have to wait for a meeting of the Commission (which is not an executive professional body but an assembly that meets in a certain rhythm but without a strict schedule). If an official is the owner of the company and he/she transfers rights to a third person. as CSOs and other relevant independent institutions cannot send a request to require the initiation of an investigation or decision. so-called soft measures are the only tools that the Commission has in its arsenal. those beyond the scope of the law (all officials that are not listed as those obligated by law). are minor and insufficient. Concurrently. The procedure simply does not make sense in terms of the suppression of conflict of interest. The team’s research also identified a highly sensitive area in the procedure of so-called „transfer of rights“ (transfer of ownership or shares owned in business entities) to a third person. which. It is obvious that mechanisms to manage conflict of interest in public administration and lower level management as well as at the municipal government level do not exist. in the context of poor ethics and nonexistent codes of conduct. 16 Balkan Anti-corruption Civic Initiative . it does not apply to other conflict of interest situations. The official. On the other hand. this applies only in situations where there is actual direct conflict of interest. conflict of interest is not avoided. only a direct conflict of interest is covered. for those that are obligated by law. and such clusters have been proven to create the most damage to the public interest and economic development. the case is not covered. for possible public procurement contracts). Therefore. in situations where they may need a prompt opinion from the Commission (e. this measure can only be imposed when an official fails to respect the decision of the Commission related to property. Conflict of interest is only regulated in public procurement. the Commission does not have to initiate any kind of procedure against the official. is a rather optimistic and unrealistic option. after his/her mandate is finished will simply regain their own rights over the company and any enrichment of the company during his/her mandate will be qualified as legal. clusters of connected interests (described earlier) cannot be addressed under existing laws. Illicit enrichment of officials is not regulated by the law to suppress conflict of interest. for any other situations there are no limitations. the Conflict of Interest Law is still focused on property and not on conflict of interest.g. but if. however. Lower level officials. The issue of conflict of interest is marginalized in the law. and at the same time. The other option in a similiar situation is for the Commission to request the official to resign. nor synchronized with other relevant laws (such as criminal proceeding and criminal law). if hypothetically an official is an important member of the ruling party. And even in those cases. for example. Any limitation on an official signing contracts as part of public procurement for such companies exist only in cases where the official gained shares or ownership up to two years prior to commencement of duty. And again.
the law on the suppression of conflict of interest does not address the practice and problems found in the Croatian context. they need only to be favored by the parliamentary majority. clusters of special interests will prevent it from being published in any mainstream media. The public is left out of the process in all aspects. It is based on a combination of measures seen in other EU member states. not all relevant data is available to the public. Situations of actual. Lack of measures to regulate and manage potential and apparent conflicts of interest and lack of appropriate investigative personnel may prove to be the most difficult burden of the law and of those that are supposed to implement it. Croatian Context 17 . neither the public nor CSOs can initiate any procedure before the Commission. without any regard for how such measures might work in the Croatian context. potential and apparent conflict of interest require a more efficient professional agency with educated personnel. Even if a CSO can potentially find and disclose the data. yet members of the Commission do not have to know anything about conflict of interest per se. And.In short. in monitoring the Declaration of Assets.
According to these declarations. Tomislav Karamarko. together with his cousins Karamarko. The sole former ownership of these companies is not questionable.. It is important to emphasize that the companies tied to Minister Karamarko are not obligated to adhere to the Public Procurement Law because they are all in the security business. near the delta Zrmanja.o. through the Marijan Hanžeković law office. This leads to serious questions about abuse of position and authority for the purpose of self-benefit. the local authority favored Minister Karamarko. Tomislav Karamarko. In the media. the Minister of Internal Affairs. deciding that this location would become a tourist zone (mark T2) in which building of apartments would be allowed.00 EUR). The following possibility comes to mind: the Minister was able to easily sell his shares in these companies. what is questionable is the fact that during the research conducted in the Court Register (based on requests to enter the files). the former spokeswoman in SOA (Central Inteligence Agency) confirmed that Minister Tomislav Karamarko has transferred his managing rights in Soboli d. This presents a serious question as to whether the Minister is a part owner of the concerned land. Minister Karamarko is often called an official with very modestly valued assets. Ippon security d.Case study. 2011. a Peugeot 206 (valued at around 4.000. Nevertheless.o. has not been published yet. Tomislav Karamarko. However..o. According to our research.o. submitted on May 4. During our research. This apartment was purchased through credit assignment in 1995. In fact. There is a similar problem on the other side of the cove of Meka Draga.o. it is also disputable that the local authority in Obrovac favored Minister Karamarko when reducing the building zone in all of Obrovac. or transfer his managing rights in these companies to someone else. during public discussion about the subject. we have not found adequate explanation of the current relationship between the Minister and earlier enumerated companies except that the Minister is no longer an owner of these companies. the land value to Minister Karamarko´s father has increased in multiple ways. submitted three Declarations of Assets during his official mandate since 2004. the local authority enlarged the building zone in the area where the land belonging to Minister Karamarko and his father are located. Tomislav Karamarko. Partnership for Social Development has come to the very opposite conclusion.o. Data on the assets of his wife shows that the couple also own a modest car. Minister of Interior According to data published on official web pages.o. thus. 18 Balkan Anti-corruption Civic Initiative . and Soboli d. Karamarko owns an apartment in Zagreb (105 square meters) with a value of about 180.. the Minister of the Interior. The data for Mr. Karamarko’s most recent Declaration of Assets. in which case that option would considerably impact whether he or these companies could enter into business relationships with the state. However.o. except in the area where the Minister’s land is located.o. Besides the fact that Minister Karamarko did not include this land in his Declaration of Assets. Doron net d. Again. submitted a land subdivision application regarding the land Ivankuša. was a co-owner of at least four companies in Croatia: Stabilis consultum d.o.00 EUR.500.
o. There is no epilogue in this case either.000. It is important to emphasize that licenses for security businesses are provided by the Ministry of Internal Affairs.o. The representative of President Group.60 kuna.735.o. Also. A notable fact about BC Zagreb is that the majority of people in the Assembly of this club are under investigations or suspected to be related to criminal acts. 150. at the time of investigation conducted within the “Spice” affair.635. all charges are still pending. According to the media.00 kuna toward the Hypo Leasing Croatia.o. Croatian Context 19 . Even though the company Podravka is not obligated under the Public Procurement Law. It was said they planned to build a printing house and employ local people. several City Councilors submitted criminal charges against City Major Ante Župan and City Secretary Slobodan Jurjević. which may point to money laundering rather than a legitimate American-Croatian project. The owner of Caballus will be investigated due to violation of the Building Law on the island of Brač. owner. It seems to reflect a suspicious money flow. In that moment. no actions were taken. Again. the situation in question can be considered as morally and ethically questionable considering that documentation which could explain this business between Podravka and Soboli d. 505. And. was also sold in Obrovac for 17 kuna per square metre and bought by a company called President Group.it is certain that all companies that Minister Karamarko will likely own again after his official mandate ends are doing high value business with public companies. company Soboli got contracts worth 18. is not available to the public. Furthermore. but it needs to be said that it is inappropriate for the Minister of Internal Affairs to be linked with a company whose owner will be under investigation. Dekaokto was in bank debits cca.o.o. Tomislav Karamarko was head of this company during the time when he was not an official. Pavić and a company he co-owns also show up in our research in Obrovac. was receiving consultancy contracts from Podravka worth over 3 million kuna. and are increasing their value. However. our research showed that Minister Tomislav Karamarko is also the Vice-President of Basketball Club Zagreb. Considering it to be a harmful contract for the City of Obrovac. Dekaokto was abolished and transferred to EPH in 2009. We believe it is a project that should be investigated by the authorized institutions in Croatia.o.o.000 square meters of land in Obrovac under very favourable conditions. According to public statements given by Caballus-net d.o. Soboli d. but as we have already concluded in earlier examples. There is as yet no epilogue to any of these investigations. The city printing house was never built. Caballus is connected to real estate businesses with Sole Orto d. There is nothing wrong with that. which leads to an unlawful acquisition of assets. Sigurnost Educa Agency became 100% the property of Soboli d. during the time of pre-investigation actions tied to the Croatian Highways (HAC) as well as during the investigation itself. that are known for their suspicious investments in relation to the Archdiocese of Maribor. a company that is publicly presented as an American investor in Croatia is Luka Jerić. Company Dekaokto purchased more than 20.000. 14 criminal procedures have been filed against Luka Jerić in connection with fraud at his failed Alpe Adria Bank. which undoubtedly represents a conflict of interest. During our research we came to the conclusion that according to official data President Group does not represent American investment in Croatia. Among others. According to data in the Court Register.o.000 square metres. Europa press holding co-owner Ninoslav Pavić is also on the board of this club. for which the bishop himself was deposed. Another piece of land.
Source: State Audit Office and Ministry of Finance The above chart shows that for the analysed ministries an average 3. The years 2008 and 2009 were used as the targeted timeframe as there is a delay in the official publishing of financial reports by institutions. financing of CSOs.61% of the overall budget is not visible to citizens.g. access to information. Ministry of the Public Administration. Ministry of Health and Social Care) as well as cities have been analyzed using the same standardized categories: transparency in reporting. Ministry of Finance. which is a significant improvement from the previous research when some of the ministries had up to 20% of expenditures under the budget item ‘other costs’. financial planning and reporting. In some of the ministries (e.g. and financing of media. Year-by-year trends were also analysed and in some categories compared to earlier research conducted during the period 2006 and 2007. 20 Balkan Anti-corruption Civic Initiative . or customs service in the Ministry of Finance). financial management. Financial reporting: Analysis of financial management covered several categories. taxation directorate. Such costs lack details that would be accessible if the expense was directly paid by the Ministry.Results of the research by category and entity in Croatia Ministry Level Analysis All of the ministries (Ministry of the Interior. with emphasis on the percentage of non-transparent reporting in overall financial reports. However. public procurement. Ministry of Finance and Ministry of Health and Social Care) a large part of the budget is being distributed to directorates and spent there (e. there is still space for improvement.
at least undetected by the public eye.47% of overall budgets of the targeted ministries. the second non-transparent budget item in reports was intellectual services. and their share was significant (sometimes over 3% of overall budgets). The trend of improvement therefore continues with respect to the previously ‘problematic’ budget items.this leaves space for undetected expenditure. Source: State Audit Office and Ministry of Finance In previous research. From the chart above it is visible that the share of intellectual services (not reported through either public procurement or budget reports) is 1. Source: State Audit Office and Ministry of Finance Croatian Context 21 . However. financial reporting by the national government and ministries has significantly improved in comparison to five years ago.
However.87% of overall public procurement contracts signed by targeted ministries. and/ or potential conflict of interest. apparent. Ministries: Public procurement – transparency. or donations can be distributed without any significant rules or procedures or control of the final beneficiary. 22 Balkan Anti-corruption Civic Initiative . qualitative analysis of media articles and interviews with the relevant policy stakeholders The chart above shows that the research team was able to link 56. Source: Quantitative data from the Directorate for Public Procurement of the Ministry of Labour. Work and Entrepreneurship. as there is a public procurement monitoring body in the Ministry of Labour. they may all be treated as actual conflict of interest (e. the lack of detailed reporting on donations is still a problem.57 million kuna (approximately 8 million EUR) was reported as donations with no further explanation. Research also covered large sets of data from other public sources such as the Official Gazette and general media articles. Given that the law does not define a clear difference between these types of conflicts of interest. the absence of procedure to avoid potential conflict of interest would likely lead to behaviour that would constitute actual conflict of interest). to some kind of actual. However. the overall trend in donations at the ministry level is still positive and non-reported items are diminishing. Although it does not appear as a large sum in comparison to the overall budget. especially as grant giving. accountability and conflict of interest in procurement procedures Relevant ministries have ignored or rejected most of the requests for information related to public procurement.g. this directorate provided the research team with all needed data for research on the contracts signed in 2008 and 2009 (following the principles of budget reporting).
124. as the chart above shows. The fact that access to information was denied in optaining contract data further confirms initial research results that indicate that conflict of interest in transactions has an inverse relationship to the level of transparency and freedom of access to information – where conflict of interest is high. and the other from the Directorate for Public Procurement in charge of monitoring public procurement. In previous research (2006 – 2007) the disproportions in published data by official sources was enormous.207. Such improvement will certainly have a positive impact on the ability to monitor public procurement processes in general. but it is anticipated that the level of conflict of interest is surely no better and probably worse among lower level management due to lack of control mechanisms or measures to prevent conflict of interest at the lower levels. kuna (approximately 3 million EUR) in 2009. Source: Ministry of Labour. Today. kuna (approximately 35 million EUR) was reduced to 21. there is an obvious positive trend in reporting on public procurement contracts. transparency and access to information are low. Directorate for Public Procurement and official web site of the State Audit The chart above shows the difference between the data on signed contracts related to different institutions. conflict of interest tends to dry up. before being too optimistic about trends in public procurement. sometimes as much as 70% of contracts were not reported by official sources. the sizable difference between reports from official sources in 2008 of 271.273. the situation has significantly improved.467. However. Croatian Context 23 .While analysing the data it is necessary to keep in mind that a large number of contracts signed by the relevant directorates and lower instance bodies cannot be monitored in this way. remember that approximately 57% of reported contracts may be connected to some kind of conflict of interest. and where transparency and access are enforced. Between the years 2008 and 2009. Both sets of data are official – with one set from the Office of the State Audit.
Nataša Škaričić. employment. Although that may be perfectly legal. called all of the editors of relevant media in the Republic of Croatia to attend a meeting in which a new ‘communication strategy’ was articulated on reform of the health care sector in Croatia. The Deputy Editor in Chief of the newspaper Slobodna Dalmacija. with two persons holding seats on the supervisory board currently serving as ministers in the Croatian government. warned the supervisory board about false financial reports. it was not legal that such a large operation started prior to signing of the contract. or the Ministry of Health that oversees the two directorates for social care and health as well as many hospitals. according to an interview with the former management of the postal service. The Croatian Post is a public company. In the contract given to the postal service. However. there was also an amount for an information campaign. care centers and other legal entities) are more prone to corruption and conflict of interest because many of the people having legal powers within those entities are not obligated by the law on suppression of conflict of interest. the following are two cases that typify and describe the way personal interests interfere with the everyday work of state run entities. Case 1 – Ministry of Finance The Ministry of Finance gave the Croatian National Postal Company the task to distribute the OIB (Personal Identification Number) to every citizen in the country without any tender or call for proposals. and appointment procedures are highly politicized and relegated to individuals in power (ministers) and that the same situation exists in all of the ministries. Darko Milinović. Research has also shown that ministries that also serve as umbrellas for different legal entities (such as the Ministry of Finance with its several directorates including the taxation office and customs service. According to former management of the Croatian National Post. this did not prevent the Director of the Croatian Post from firing a whistleblower who was merely upholding the law. Case 2 – Minister of Health The Minister of Health has been linked to several situations that evidence the misuse of other aspects of interconnected networks. When a member of senior management at the Croatian Post.Two Sample Cases at the Ministry Level Aside from the case described above concerning the Ministry of Interior. a company MASSOL was subcontracted to implement the information campaign. all of the people interviewed have concluded that recruitment. the somewhat less than transparent owner of MASSOL is Ratko Maček. The second problem is that the contract that was signed after-the-fact did not match the actual price of the work. 24 Balkan Anti-corruption Civic Initiative . Aside from the specific situation with the Minister of Interior (described earlier). the man who has run the latest election campaigns for the ruling party. reported that the Minister of the Health. owned by the state. According to the law every citizen is obliged to report illegal activities to the relevant authorities. she was terminated on the grounds that she shared damaging company information to unauthorized personnel. the leading public relations manager for the Croatian Government. According to the media. after conducting an internal audit of the company.
including one famous instance in which he donated 3. a first instance court ordered that she had a right to her job. and she was fired from a private newspaper for doing so. show how these networks operate: The Government (at the time under Prime Minister Sanader) gave an order to all public companies and other entities to concentrate their marketing capital in the agency called FIMI media. his daughter won first prize at that same music festival. A picture of the house is below: Croatian Context 25 .000.though of course the Ministry of Health has no logical correlation to music festivals. and that the source of investment funds is a bank loan of approximately 150. including the ex-Prime Minister himself. Then FIMI media distributed the money to design marketing campaigns in a way to create undue wealth to several individuals. The Minister of Health has also been accused personally several times for conflict of interest. No media firms could effectively reject this offer and survive. that is why Nataša Škaričić got fired from her position.marketing capital was made available to the media on the basis that they would not publish any serious criticism of the government.00 EUR from his ministry to a music festival . and most of them succumbed.The purpose of the meeting was actually to demand that no critical voices be raised in any information campaign of national and local media. Later. However. After mild criticism in the media. as the house is quite large. Journalists as well as professionals in the fight against corruption have disputed the size of the investment. who officially stated that he is building a new house. criminal cases such as FIMI media. or start any kind of disciplinary procedure. Nataša Škaričić reported to the public about this meeting. simply stating the facts. A larger property issue may prove to be a more serious problem for the Minister. Soon after. by accident or not.000 EUR. This case is still pending. However. no one from the government wanted to comment on this case. with a sauna. an even more damaging aspect of FIMI media also resulted . gym and other techological innovations that are quite expensive. and a legal battle is still ongoing. Although at first it may seem that there is no conflict of interest in this case.
The two cases above, as well as the case concerning the Minister of the Interior demonstrate how Croatian society functions, and how being connected to the right cluster of power can lead to wealth without scrutiny, a state of being ‘untouchable’. Investigations have been pusued only after powerful individuals have lost their political power, and mostly as a result of political battles among the ruling rival party. This situation is not promising and not appropriate given ongoing EU and alleged national concerns about corruption. And the new legislation has not served to address these particular issues and manifestations of conflict of interest.
City Level Analysis
As in the case of the ministries, cities were also analysed based on the same standardized categories: transparency in reporting, financial management, public procurement, access to information, financing of CSOs, and financing of the media. In the general overview, the data relates to the cities of Čakovec, Osijek, Sisak, Split and Zagreb. The choice of cities was based on geographic distribution throughout Croatia (and covering all of the main regions), as well as on previous research in order to be able to detect trends in these communities. Chart 6 - Budgets of the Cities: combined cities for the period 2008-2009; budget reports “non-visible expenditure”; budget item ‘other costs’
Source: State Audit Office and Ministry of Finance In the analysis combining five cities, the chart above shows that over 3 billion kuna (approximately 400 million EUR) went unreported as to the type of expenditure in the budget reports (spent from budget item ‘other costs’). This represents 16.29% of the overall budgets for these cities for the years 2008 and 2009. The results of this research show that financial reporting at the city level is far worse than financial reporting at the state level. In terms of trends compared to previous years, at almost all levels of categories analysed, cities had become less transparent over the last three years. One of the conclusions of the research team was that systemic corruption that involves material gain has moved to municipalities where control mechanisms are far more
Balkan Anti-corruption Civic Initiative
liberal or non-existent in the majority of conflict of interest related situations. Even the cities that had relatively good results in 2006 and 2007 (Čakovec and Sisak) have shown negative trends since. The only positive trend in budget reporting was noticed in the City of Split where unreported budget expenditure was around 5% of the overall budget. Chart 7 - Budgets of the Cities: combined cities for the period 2008-2009; budget reports “non-visible expenditure”; budget item ‘intellectual services’
Source: State Audit Office and Ministry of Finance Intellectual services in 2008 and 2009 (chart above) did not have significant impact on municipal expenditures and the non-visible portion was below the expected margin of 1.51% of total expenditure.
Chart 8 - Budgets of the Cities: combined cities for the period 2008-2009; budget reports “non-visible expenditure”; budget item ‘donations’
Source: State Audit Office and Ministry of Finance A total of nearly 1.4 billion kuna (almost 200 million EUR) has been paid from the city budget item listed under ‘donations’. Combining categories above, a total of 4,724,387,605.00 kuna (approximately 635 million EUR), or 25.24% of the overall budgets of five cities, was not reported in a way that allows the public to see and judge expenditures. Especially noting that over a billion kuna was spent as ‘donations’ alone, the combined totals demonstrate that reporting on expenditure is largely outside of the reach of appropriate control mechanisms and criteria for expenditure reporting is sorely lacking. This grey zone of municipal financial management represents the highest possible risk for corruption and corrupt behaviour by municipal governments.
Balkan Anti-corruption Civic Initiative
Although it is evident that the accuracy of reporting on public procurement has increased at the municipal level. Source: State Audit Office and Ministry of Labour – Directorate for Public Procurement Croatian Context 29 .Public procurement and conflict of interest at the municipal level The chart below indicates that in terms of reporting on public procurement there is a significant improvement and positive trend in the accuracy of data reported from different sources on signed public procurement contracts. The difference in figures reported by the Office of the State Audit and the Directorate for Public Procurement has decreased from almost a 70 million EUR difference in 2008. to approximately an 8 million EUR difference in 2009. it is still somewhat worse than the equivalent reporting on the national government level.
in Sisak and Osijek). As in the case of the ministries. That combined with the fact that Zagreb has almost 1 billion EUR of unregistered property as well as 400 million claims against local businesses creates ripe opportunities for corruption on a large scale. the fact is that all of the cities have non-transparent financing of local media. However.Sources of the data: Quantitative – MoL Directorate for Public Procurement. all of these cannot be elaborated further in this text. In the city of Zagreb. owning several large companies. researchers could connect approximately 43. In Split. Donations to civil society are likewise suspect. Favouritism in public procurement has been linked to the municipal origin of companies (in Čakovec over 80 percent of the total of all procurement was given to two local companies that have ties to the municipal government). a brother and sister control both parts of the municipal government – Željko Kerum as Mayor and his sister as Chair of the Municipal Council. In the chart above.. sometimes linked to conflicting interests (e. it seems obvious that the system to prevent conflicts of interest in municipalities simply does not work.1% of the overall amount of public procurement during 2008 and 2009 to some form of conflict of interest. That is how the law works and that is where the problem lies. Sample Cases at the City Level There are numerous cases of conflict of interest at the municipal level in all of the targeted cities. 30 Balkan Anti-corruption Civic Initiative . At the same time Željko Kerum is one of the richest persons in Croatia. Qualitative – interviews and analysis of media reports on companies and procurement. journalists know the ‘usual suspects’ will win any tender published by the municipal government.g.
At the local level in particular. The current system is simply inefficient and ineffective and should be reformed or perhaps fundamentally changed. captured by interests for financial. Situations where private interest prevails over public interest are the rule rather than the exception in all of the categories analysed and in all of the targeted entities. Particularly contentious content can be found in the chapters of the law related to the transfer of management rights or ownership (shares) to a third party. Public service media. leading to a possible (and expected) increase in trade by influence.Conclusion and Recommendations Public policies for the suppression of conflict of interest in the Republic of Croatia. as well as private media. allows the development of systemic corruption. Limited freedom of speech diminishes the effectiveness of public policies to prevent conflicts of interest. and gradually creates a society trapped in the tangle of financial policy interests without the possibility of active public participation in prevention of corruption. Conflict of interest has a stranglehold on Croatia’s budding democracy. which will not appear on the radar under the current law on suppression of conflict of interest. The data indicates explicitly that the situation in local government is significantly worse than at the national level. and it is choking the life out of Croatia’s economic development. This research clearly shows that due to the weaknesses of the legal and institutional framework in the Republic of Croatia. Aside from a shift towards limiting the influence of officials in public procurement. conflict of interest is legally and actually almost invisible and it is allowed to undermine the foundations and basic principles of democracy. clearly shows the weaknesses of the existing institutional and legal framework on suppression of the conflict of interest. despite the recent changes. The case of the Minister of Interior (see above). conflict of interest or other negative trends. Indicators of state level conflict of interest in Croatia. recruitment and appointments. for which there is currently no adequate solution. are largely trapped by political or marketing interests. budget reporting. a negative five-year trend was observed in most of categories access to information. have mostly failed to address the problem in practice and are not uniquely suited to a country specific framework for Croatia. which has led to significant restrictions on freedom of speech. Access to public information has not yet been secured. political or personal gain. as well as concrete examples. and conflicts of interest. It threatens to capture the state and all of its essential functions in a maze of narrow private interests. no actual progress in reform of the law on conflict of interest is evident. as well as other cases listed in this paper. and that adopted policies to prevent conflicts of interest and fight against corruption have not solved this growing problem. and opportunities to distribute information and eventually open public debate concerning the political accountability of officials are at their lowest levels in the last 10 years. Conflict of interest remains a grey zone of systemic corruption. Croatian Context 31 . economic. suggest that the majority of public state functions are held prisoner to private interests.
and 2) protection of the integrity and independence of journalists/authors. The work of CSOs and the relationship between public authorities and NGOs urgently needs to be regulated in terms of creating fair and a transparent market for proposed projects of civil society in the fight against corruption as well as in other arenas. Society as a whole should consider two key tools when reviewing and revising any anticorruption policy: 1) provision of criminal charges against illegal and political censorship (for officials who require or attempt to influence the content of information published in the media). and financed from independent comprehensive media funds (similar to the financing of CSOs).Concrete recommendations Given the premise that in order to prevent corruption and conflicts of interest free access to information is mandatory in addition to an effective legislative framework. it is necessary to introduce special instruments of protection. especially if one considers that public authorities ‘give’ billions of EUR at all levels in the form of donations each year. civil society activists and those who in good faith report corruption. including the obligation to institute proceedings before a civil servant tribunal for officers who violate the law. must be protected from illegal influence and repression by politicians and those that hold political power. The public media. is still subject to the Law of Obligations. nonprofit. particularly HRT. with no special regulations to ensure transparency in spending. private or public. it is therefore necessary to introduce measures to ensure respect for the freedom of the press and to guarantee the independence of media from any illegal or oppressive influence of politics. The fact that the funding of civil society organizations. At the local level. 32 Balkan Anti-corruption Civic Initiative . The Law on Freedom of Access to Information should be changed to strengthen individual responsibility in implementing the right of access to information. especially at the local level. It is indisputable that sanctions should be tightened against media owners that have abused the law on media (those that did not properly declare their individual ownership of the media). and to ensure the implementation of final court decisions relating to the Law on Freedom of Access to Information by introducing criminal prosecution of officials who do not respect the decision of the court or providing higher financial fines for those who do not respect court decisions. researchers. Public authorities must be obligated to publicly disclose any financing of the media. including compensation for damages incurred by repression from public authorities or officials. it is necessary to create new types of media for the future. so that information is available to the public and every citizen is able to assess the potential for conflict of interest in the relationship between government and media. is worrying. which would be independent. in order to avoid the direct influence of local politics in the editorial policies of local media. For journalists.
sports clubs. 3. The public should be able to initiate conflict of interest investigations before the Parliamentary Commission for deciding on conflicts of interest. perhaps the most important research recommendation. The possibility to initiate court procedures for compensation of damages resulting from a conflict of interest against private and legal persons who knowingly and wilfully participate in a conflict of interest should be introduced. and membership in secret societies. in addition to disciplinary sanctions. 4. 6. 9. conflict of interest at the highest level Croatian Context 33 . cultural and artistic projects. Such agency should make recommendations to public authorities in order to avoid or annul the conflict of interest or risk of corruption. 2. but also declare their interests as well as their membership in interest groups or associations of officials. In this model. The obligation of declaration of interests should be extended not only to a short list specified in current law. and in cases of malignant conflict of interests the Agency should transfer the case to the relevant authorities for criminal prosecution.Recommended changes to the Law on Suppression of Conflict of Interest The following changes would help strengthen the Law on Suppression of Conflict of Interest and should be examined and incorporated into the law: 1. is the establishment of an Integrity Audit Agency. but also to all those who participate in decisions related to the public interest. All of the data on the declaration forms should be available to the public. 10. The possibility of introducing legislation prohibiting performance of duties for officers found to have been in a conflict of interest situation (and not only for those who disobey the decision of the Commission on the declaration of assets) should be examined. The obligation to annul all administrative / legal acts resulting from a situation of conflict of interest (and not only public procurement contracts where direct conflict of interest has been found) should be introduced. this could be done through design of a unified code. Given the sluggishness of the Parliamentary Committee for Conflict of Interest and their limited capacity. Improved standardized forms for the declaration of assets would ensure that every official at his/her appointment to duty must not only declare property. The declaration of assets form should be declared as an official document and officials who falsely declare assets or interests or association. 8. should be criminally charged. 5. that would proactively investigate potential conflicts of interest and corruption risk in relevant bodies. 7. The law on public procurement contracts should ensure the ability to trace all decisions and all documents from budget to contract execution. with special emphasis on municipal level administration and governments.
with the obligation to launch an investigation in cases where public authorities ignored the recommendation of the Agency. 34 Balkan Anti-corruption Civic Initiative . while the Agency would be authorized to inspect all public administration bodies. All of the decisions of the agency should be public.would still be engaged through the Parliamentary Commission. The Integrity Audit Agency could deal with investigation of potential conflicts of interest at lower levels (similar to the authority of a state audit in financial terms). including local government.
Bosnia and Herzegovina .
have the greatest economic and broader social dimensions: employment. considered the world’s most credible measure of public sector corruption. Brčko District B&H. public procurement. This is a conclusion of reports from numerous domestic and international organizations and institutions. or encouraging. The 2010 European Commission Progress Report on B&H stated that corruption is widespread in B&H. Analysis of data provided through responses to the requests for free access to information. as a socially unacceptable phenomenon. institutions were selected at different levels of government – four ministries and five local communities (B&H Ministry of Finance and Treasury. Project activities are combined in two main directions: Research of the issues causing. public procurement and state funding for media companies and NGOs. Guatemala. appointment and promotion. II. It is focused on areas where conflicts of interest. Republika Srpska Ministry of Finance. Gambia. budgets and budget execution reports. City of Mostar. Although B&H has made progress in terms of formal adoption of the Law on Agency for Anti-Corruption Coordination and Fight against Corruption. ranked B&H as 91st to 97th out of 178 countries surveyed. audit reports) and websites of the Central Election Commission (biographies. Sarajevo Canton Ministry of Finance. conflicts of interest. and Trebinje Municipality). international and national public policies regulating or influencing prevention of conflicts of interest. BACCI project is aimed at establishing effective mechanisms for monitoring conflicts of interest (CoI) in public office at all levels in B&H. there were no expected results given that the Agency has actually not been established yet. B&H shares the position not with the European countries but with Djibouti. Overview of legal framework. B&H Federation’s Ministry of Finance. On a scale from 10 (highly clean) to 0 (highly corrupt). City of Banja Luka.Introduction Bosnia and Herzegovina (B&H) is known as a very corrupt country. regarding the level of corruption it is placed at the very top among the European countries. and Public Advocacy to change levels of political integrity in B&H and a Campaign for the same cause. The 2010 Transparency International (TI) Global Corruption Perception Index (CPI). For the purposes of researching the manifestations of CoI. Sarajevo Canton. and that existing anti-corruption mechanisms were not applied appropriately. thus acquiring the prerequisites for establishing the Anti-Corruption Agency. The observed period covered one electoral cycle – since 2006 until the 2010. The BACCI research in B&H is divided into two phases: I. appointments and promotions. Sri Lanka and Swaziland. Analysis of documents available for the public (official gazettes and public procurement notices. Sending Requests for Access to Information with questions related to recruitment procedures. Annual Financial Disclosure 36 Balkan Anti-corruption Civic Initiative . statutes and regulations. Kiribati. and budget financing of the media companies and non-govermental organisations (NGOs) in B&H.
the amount/value of the contracts. either through competitive procedure or directly. local NGOs . stating names of the media. In the area of NGO funding the following information has been requested: • List of all NGOs (civic associations and foundations) the targeted institutions had funded. the following information has been requested: • List of all partially or wholly owned media subsidiaries. amount of support (the amount of funding). with dates of their employment and their job titles/ functions. or within their area of responsibility In the area of public procurement the following information has been requested: • List of all public procurement contracts of the institutions targeted.. or similar positions. etc. in the areas of recruitment/appointment and promotion procedures. Verification of the preliminary conclusions of research through public discussions. • First and last names of members of Parliaments/Assemblies/Councils with information about their party affiliation • First and last names of all advisers. the period of time covered by the support. • Names of all members of agencies or commissions responsible for making decisions about public procurement contracts: are the names of members of these agencies or commissions available to the public? In the area of state funding of media houses. implementation of Law on Conflict of Interest) and the Commission for Public procurement. and date of contract signing. dates of contracts. Comparison of media reports with data research and the analysis performed. funding of various programs. professional associates and persons in similar posts • Employees’/elected or appointed representatives’/advisers’ membership in supervisory boards or governing councils. type of service / goods/works to which contacts apply. official gazette. of bodies/institutions/public or private trade companies • List of all administrative departments. Bosnia and Herzegovina 37 . TV. advertisment contracts). type of the media (newspapers. radio. institutions and other organizational units of the institutions surveyed.Statements. public tender). type of procurement (direct negotiation. the type of support/project title. with names and addresses of the companies with which the contract had been signed.. the following information has been requested: • First and last names of all employees. the amount of allocated funds (separately for each grant) and date of the Contract. contracts’ duration (contract execution deadline). stating names and addresses of organizations which had been given grants. On the basis of the Law on Freedom of Information. stating the type of support (purpose of allocated funds). website/web-portal. tendering by invitation.) and the name of the responsible person in the media • List of all the media which the observed institutions had funded in any way (awarding grants.
a journalist with the Center for B&H Investigative Journalism (B&H CIN). the BACCI research has once again confirmed that. is transparency and free access to information. Sarajevo Canton Ministry of Finance. public authorities very often set up various barriers.). mutual incompatibility of the laws and weak effects of their application. City of Mostar. Open Society Fund B&H Coordinator. 38 Balkan Anti-corruption Civic Initiative . the B&H Ministry of Finance and Treasury. but also their other staff. Brčko District B&H. Aleksandra Martinović. The segment of BACCI research conducted in four ministries and five local communities in Bosnia and Herzegovina (namely. Sri Lanka and Swaziland. Guatemala. Regardless of the full decade of promotion of Freedom of Information legislation at different administrative levels in Bosnia and Herzegovina. TI. showed that despite numerous and complex legislation dealing with various manifestations of conflict of interest and covering a significant number of public officials at all levels in B&H (from national to municipal). Republika Srpska Ministry of Finance. Venice commission. Delivery of requested information remains characterized by voluntarism of mostly the managers of the targeted institutions. B&H Federation’s Ministry of Finance. The 2010 European Commission Progress Report on B&H confirmes that corruption is widespread in B&H. Gambia. particularly in cases where disclosing (public) information could lead to uncovering corruption. which is also the main precondition for prevention and early detection of conflict of interest situations. as well as for the overall anti-coruption combat. while various situations of their potential and actual conflict of interests are elaborated throughout this publication. Another highly problematic area. a member of the Board of Directors of Transparency International B&H (TI B&H) and Renata Radić. sharing this position not with the European countries but with Djibouti. City of Banja Luka. lack of political will of the country’s leaders to improve this situation is rather chronical. Executive summary Bosnia and Herzegovina is placed at the very top among the European countries regarding the level of corruption. has proven that two main pillars of the successful anti-corruption combat: prevention and resolution of conflict of interest situations and transparency of public institutions (observed by their proper application of Freedome of information legislation). Respective laws on conflict of interest at state and entity level are full of deficiences. while inconsistencies in the enforcement of FOI legislation have occurred in certain monitoring bodies as well. etc. are far away from being strong enough.The BACCI research team of Bosnia and Herzegovina consisted of the following persons: Mervan Miraščija. and that existing anti-corruption mechanisms were not applied appropriately. Kiribati. its main features are its scarcity. Also. and Trebinje Municipality). the 2010 TI’s Global Corruption Perception Index (CPI). Analysis of the country’s system for prevention and resolving conflicts of interest. ranked B&H as 91st to 97th out of 178 countries surveyed. Sarajevo Canton. some of them constantly beeing mentioned in relevant reports on the country’s anti-corruption performances (GRECO. However. when it comes to proper implementation of FOI legislation.
• In particular institutions. which are not yet harmonized with the umbrella legislation – the state law – have shown a much weaker performance. although this differs amongst the targeted institutions. are those which are subjects to the FOI Act at the State level (Brčko District B&H and B&H Ministry of Finance and Treasury). It would therefore be vitally important to harmonise the laws of Republika Srpska and Federation of B&H with the Bosnia and Herzegovina Law regarding provisions on sanctions on public authorities and public officials for not complying with the requirements of the Law on Freedom of Access to Information. appointments and promotions which are not based on transparent procedures and absence of nepotism and other forms of improper (mainly political) affiliations. and to the Advocacy and Legal Advice Center of the B&H Transparency International. it was possible to get access only to the initial budget plans. as a socially unacceptable phenomenon. etc. or proclaiming the data deliverance to be out of competence of the very institution legally responsible for keeping the data requested (egg. to more subtle forms of circumvention of the law. The research team has forwarded the cases of flagrant violation of the current FOI legislation to the institution of the B&H Ombudsman for further action. All other institutions have more or less violated various provisions of the FOI Act. BACCI research in B&H further disclosed that the areas where conflicts of interest. Federation of B&H Ministry of Finance. indeed has the greatest economic and social consequences are: irresponsible disposal of public funds via inapropriete budget allocations to public procurement contractees. These results have also proven that the institutions which have acted in the most transparent way. the decisions on granting the land lease. but not to documentation about the revision and/or execution of the budget Bosnia and Herzegovina 39 . main findings regarding transparency of the budgeting process are as follows: • There is a lot of space for improvement of the transparency of the budgeting process (both generally and regarding particular stages of budget planning and execution). This is the only FOI Act with the provisions envisaging penalties for public bodies and their officials not abiding by the Act.). The manifested violations range from a complete disregard of the Law (egg. Government of Sarajevo Canton – 33%). City of Trebinje) or resorting to creation of the new documents omitting the very segments which might have indicated and detected various forms of conflict of interest (like leaving out important parts of public procurement contracts. only one local government unit (or 11% of the observed nine institutions). like selecting information to be delivered. over mocking the Law (the case of City of Banja Luka). which deals with violations of the right to access information. in terms of the FOIA. and budget financing of the media companies and non-govermental organisations.While the overal responsivnes of the targeted isntitutions is 59% (54 answeres received out of 91 sent). namely the Brčko District – has provided answers to all FOIA requests. While concrete examples of this kind of misconduct are illustrated further in the text. especially at the local level. All other institutions to which the Entities’ FOI acts apply. as well as to employments.
are either inappropriately recorded (missing or incomplete accounting entries) or exceed the approved amounts • Costs for salaries and fees. including sanctions for failure to submit information to the Public Procurement Agency • to complete the establishment of horizontal audits mechanisms • to work continuously on improving the harmonization of procurement procedures and budgeting processes • to introduce public monitoring mechanisms of all phases of the procurement process Particularly worrisome is the fact that the efficiency of the financial control system is still too weak to bring order into this area. it turned out that the reason for this had not been a diligent and realistic planning. Large sums of money have been allocated to non-governmental sector. but there has been in RS. In this area. especially in case of presenting gifts. for which exactly the Ministries of Finance are largely responsible. This area calls for immediate attention. but a desire to spend allocated funds at any cost. With regards to financing of Media and Non-govermental Organizations. Sarajevo Canton). the partial budget documentation and audit reports dealing with particular ministries were much better in masking irregularities.• In cases of the targeted Ministries of Finance. while the B&H Public Procurement Agency (PPA) has informed the research team that so far not a single participant in the tender processes had been disqualified due to a conflict of interest. particularly fees for work in various committees. the research team has discovered a number of situations of potential and actual CoI. with effect that media coverage of the RS Governement’s work has mainly been positive. regarding both the incidence of irregularities. it can be concluded that financing of media companies has been a greater issue in RS than in the B&H Federation. particularly the following: • to prepare and adopt a new law on public procurement. • Entertainment costs. which would provide for the relevant requirements of EU Directive and the UNCAC. are irrationally used and often exceed the framework limits. There has been no systemic funding of the media companies in the B&H Federation. The area of public procurement has emerged as a particularly important and relatively largest of the identified issues. mainly because of the issue of the independence of external auditors and constant politicial pressure exerted on them. they have no impact on public financial management. and incorporate the best public procurement practices from EU countries • to introduce stricter penalties for violations of various provisions of the PPL. • Even in cases where the budget was largely executed as planned. with no clearly defined criteria or established mechanisms for monitoring and control • There is a high limit on discretionary spending authority delegated to the Ministers and other Heads of institutions (egg. often entirely inappropriately • Current reserve funds are being used in a non-transparent manner. While the institutions of the external audits are performing well. A case has been noted in Mostar where substantial funds have been granted 40 Balkan Anti-corruption Civic Initiative . than in cases where analysis included a complete budget documentation of governments. although the B&H Law on Public Procurement (PPL) envisages that possibility. and the amount of financial resources. The B&H BACCI team has established that in many cases money goes to organizations led by party colleagues of Ministers whose Ministries grant the funds.
• to adopt codes of conduct for employees in all public institutions. • to continuously organize educational campaigns and public awareness campaigns on the harmful effects of corruption and the need to involve all segments of society in a comprehensive fight against corruption. In other institutions several situations have been recorded of hiring party colleagues as advisers who later on became civil servants.” Decreasement and resolution of all these corruption and conflict of interest related problems in Bosnia and Herzegovina is a long-term process which necessitates political will and active participation of all segments of the society. Meanwhile. procurement bodies. which are enlisted at the end of the Bosnia and Herzegovina section of this publication. which stated that „civil service remains highly politicised. appointments and promotions.to the organization whose representative is a member of the City Assembly. In addition. However. It is in need of transparent recruitment procedures based on merit. of the Agency for Prevention of Corruption and Coordination of the Fight against Corruption. would be a key issue. Similarly important is to increase the capacity of the B&H Central Electoral Commission and RS Commission for prevention of conflict of interest. as it would prevent further problems in its implementation. in overseeing the implementation of all anti-corruption laws and regulations. the first step requires dedicated efforts towards the improvement of the relevant legislation. particularly the laws on conflict of interest itself. and to train these individuals on the rights and the mechanisms available to them (TI B&H. These finding are confirmed in the 2010 EC progress report on B&H. with particularly elaborated ethical and anti-corruption principles. enterprises and public companies. it is also necessary: • to ensure political independence of all law enforcement agencies. Concerning the employments. prosecutors and others). an urgent harmonization of laws on conflict of interest at other administrative levels (especially in the RS) with the state one. a new Law on Prevention of Conflict of Interests in B&H seem to be a more efficient solution. including the repressive mechanisms. a system of modern career development and professionalisation. In Banja Luka there are several organizations whose representatives are members of either the ruling party or the City Council. as well as to ensure other competent authorities’ involvement (in particular the tax authorities. • to establish adequate procedures for reporting suspicions of corruption within public institutions and for protection of persons reporting irregularities (whistleblowers). GRECO). No progress has been made towards limiting the role played by political affiliation in public administration. • to ensure adequate engagement. situations were discovered where directors of public institutions had been required to employ members of the ruling party (Trebinje). Given the number of recommendations to be incorporated into the Law on conflict of interest. Bosnia and Herzegovina 41 . for monitoring commitments execution from ethical and conflict of interest viewpoint. • to establish ethics committees within all public bodies. as the laws eforceement agencies.
• The legislation does not include one of the most important sanctions for a proven conflict of interest: removal from office and. apart from the elected officials) are subject to this obligation. public procurement. given this deadline. as well as other complementary regulations – regulations on electoral process. political parties’ financing. especially in cases when a greater change in their assets occur (GRECO). executives and counselors at different administrative levels in B&H. • The deadline for starting the procedure (in situations of raised concern about a possible CoI) is four years. the main features of the system for prevention and resolving conflicts of interest in B&H are its scarcity. The basic inadequacies of the laws on conflict of interest are as follows: Law on Conflict of Interest in Governmental Institutions of Bosnia and Herzegovina: • Financial Disclosure Statements prescribed by the Electoral Law (applied on elected officials) are not included in the Law on Conflict of Interest and therefore not all the officials targeted by the CoI Law (executive office holders and advisors. Entities and Brčko District levels. • There is no mechanism for reporting personal financial stements during the officials’ time in office. The laws apply to the elected officials.Overview of the COI legislation A number of laws and other legal acts dealing with various manifestations of conflict of interest have been enacted in Bosnia and Herzegovina. return of illegally acquired assets. can be freely placed in a CoI situation during his entire term in office. the annulment of the act issued under a conflict of interests situation. The most important ones are the Laws on Conflict of Interest themselves. • There are no provisions for pantouflage i. • There are no administrative regulations to provide for checking the accuracy of the information included in the personal financial statements. nor for obligating other relevant bodies to assist the CEC in detecting false information (Venice Commission). The B&H Central Election Commission (B&H CEC) is in charge of implementation of these laws at the state. the Federation of B&H and the Brčko District levels. • There are no adequate sanctions for causing possible harm – gaining an illegitimate economic advantage. prevention of improper migration of civil servants from public to private sector (Venice Commission). • Declaration of assets.e. subsequently. which is utterly inadequate considering that an official. while Republika Srpska has entrusted implementation of the law to the RS Committee for Determining Conflicts of Interest. Among other significant relevant laws there are Laws on Civil Service/Administration/Civil Servants. 42 Balkan Anti-corruption Civic Initiative . incomes and interests are not made fully public (available online). Despite such numerous and complex legislation covering a significant number of public officials at all levels (from national to municipal). as well as ethical codes /codes of conduct. The laws exist at the state. • There are no adequate sanctions providing for false information on personal property (GRECO). mutual incompatibility of the laws and weak effects of their application. auditing. and other regulations.
the Public Procurement Agency. and is much more liberal in comparison: it excessively creates several different legal practices.) in the implementation of the Law. • There are less restrictions on providing personal services. • There is a shorter mandatory period (three vs. • There are fewer offices to which the Law applies. • There are fewer institutions in respect of which the officials could come into potential conflict of interest. cantonal and municipal (notwithstanding the level of responsibility. and privatization. • It is not harmonized with the Law on Enterprises of the Federation of B&H (“legal vacuum” of the cantonal governments.000 KM) CONSEQUENCES: Not a single case of conflict of interest has been identified or sanctioned in Republika Srpska since the establishment of the RS Commission The 2010 Europen Commission Progress Report for Bosnia and Herzegovina stated that the country “has made limited progress in tackling corruption. • While at other administrative levels there is a single stage of administrative proceedings. six months) before the commencement of the term of the second office. 200 KM). bringing confusion in law enforcement for officials at various levels (separating those under the RS Commission for Conflict of Interest jurisdiction and those under the B&H Central Election Commission jurisdiction). • There are no codes of conduct. etc. and fewer incompatible offices. here a two-tier system within the administrative procedure concerning the application of the Act is allowed: it is possible to appeal to the Appellate Chamber of the Court of B&H. • There are no formal obstacles for public officials’ membership in the governing bodies of associations or foundations funded from other sources. • Much lower penalties: 500 to 1. tax and customs administrations.000 to 10. • There are no control mechanisms for (not) reporting gifts. Law on Conflict of Interest in Governmental Institutions of Republika Srpska • The Law differs from the ones in other jurisdictions in some important issues. the potential for abuse and other relevant factors). municipal councils and mayors). affecting the judiciary. Law on Conflict of Interest in Governmental Institutions of Federation of Bosnia and Herzegovina • This is in large part a rewritten state law (there is a legal obligation to comply) and it takes on the good and bad sides of the umbrella legislation.” Bosnia and Herzegovina 43 . • It prescribes the same sanctions for officials at different levels of government – the entity.• There is not sufficient capacity of CEC B&H for law enforcement or adequate involvement of the competent authorities (tax administration. or ethics committees for all public authorities. public procurement. which is widespread throughout the public and private sectors. • The value of gifts allowed to the holders of public office is higher in comparison to other jurisdictions (300 KM vs. 1. • Formal independence of the RS Commission for Determining CoI is not secured. Prosecutor’s office.500 KM (vs. save for those funded from the RS budget.
• Asset declarations by political parties remain voluntary.pdf 44 Balkan Anti-corruption Civic Initiative . and at informing representatives of public authorities and institutions. 45/06. 102/09”). which stated that implementation of the Freedom of Access to Information Act remains insufficient. 1 2 B&H Law on Free Access to Information (Official Gazette B&H. Republika Srpska Law on Free Access to Information (“Official Gazette RS. No. even after the Ombudsman had issued a recommendation to provide access. • Country-wide implementation of the Law on Conflicts of Interest is uneven. regulating both prevention and detection of corruption.1 In the meantime. has not been adopted.delbih. which found one violation. Amendments to the code of conduct for civil servants in RS were adopted to regulate the movement of public officials to the private sector and to prevent conflict of interest. Federation of B&H Law on Free Access to Information (“ FB&H Official Gazette. This was confirmed by the latest EC Progress Report on Bosnia. the code of conduct for civil servants was amended to introduce priorities regarding the risk of corruption and the concept of ethics. when it comes to proper implementation of FOI legislation. In the twelve months to September 2010. including death threats. 20/01”). as well as the general public. numerous projects have been initiated in B&H. ”).ec. so far all these efforts have produced limited results. In the Federation.For the research performed within this project. Analysis of the FOIA (Freedom of Access to Information Acts) Freedom of Information Acts have been in force at different administrative levels in Bosnia and Herzegovina since 2000 and 2001. • Civil service remains highly politicised. • A State-level code of conduct for civil servants. 28/00. public authorities very often set up various barriers.eu/files/docs/2010progress2. particularly in cases where disclosing (public) information could lead to uncovering corruption.2 The BACCI research has once again confirmed that. No progress has been made towards limiting the role played by political affiliation in public administration. the following conclusions of the European Commission Report are the most relevant ones: • Regarding the report of the Group of States against Corruption (GRECO). mainly by international organizations and domestic civil society. It is in need of transparent recruitment procedures based on merit. available at: http://www. the CEC found two violations of the State Law on Conflict of Interest and 15 violations of the Federation Law. aimed at improving the quality and promoting the importance of these laws within the processes of democratization and prevention and detection of corruption. No. However. Republika Srpska has its own Commission for Determining Conflict of Interest. about the Laws’ proper implementation and use. four out of 16 recommendations have been addressed. In the meantime journalists who investigate corruption have been facing physical violence and intimidation.europa. 32/01”) Bosnia and Herzegovina 2010 Progress Report. a system of modern career development and professionalisation. No.
Some of the targeted institutions have requested additional explanations of some of the requests.50 KM per page. but in certain monitoring bodies as well. Sarajevo Canton and City of Banja Luka have not provided any answers Inconsistencies in the application of FOI legislation have occurred not only in the targeted institutions. Given the extensiveness of the required documentation. following the FOI request to provide electronic version data on civil servants recruitment procedures in the institutions under their jurisdiction. For example. to which the team responded by sending adequate written explanations. the Agency for Civil Service of the Federation of B&H has provided 10 pages of printed material. to which the research team has consented. Bosnia and Herzegovina 45 . Urgent FOI requests have been sent to the authorities from which no information was received after the extended deadline. out of which: • Complete answers 30 (33%) • Incomplete answers 24 (26%) • No answer /requests rejected 37 (41%) • Brčko Distrikt was the only one to submitt all information requested • B&H Federation Ministry of Finance. After all these actions of the research team. while informing us that other data would be provided upon payment of legally stipulated amount of 0. while RS Agency for Public Administration declared that providing this type of information is not within their competencies. of Requests 9 9 9 9 11 11 11 11 11 91 Complete answers provided 7 1 0 3 11 0 0 5 3 30 Incomplete answers provided 1 8 – 3 – – – 5 7 24 Request Rejected/ No answer provided 1 0 9 3 – 11 11 1 1 37 Institution B&H Ministry of Finance RS Ministry of Finance F B&H Ministry of Finance SC Ministry of Finance Brčko District Sarajevo Canton City of Banja Luka City of Mostar Trebinje Municipality UKUPNO A total of 91 queries under the Freedom of Information Act have been sent (nine to each of the Ministries of Finance and 11 to each of the other institutions observed). a total of 54 (59%) responses have been received. None of the institutions responded within the legal deadline (15 days).The following table demonstrates how the targeted institutions abode by the Freedom of Information Laws during the research: No. most of them sought an extension of the deadline and a possibility of partial provision of information. as well as to those who had submitted incomplete answers to some important questions.
and to the Advocacy and Legal Advice Center of the B&H Transparency International. it was possible to get access only to the initial budget plans. this was an issue with virtually all observed Institutions. 46 Balkan Anti-corruption Civic Initiative . especially in case of presenting gifts. B&H Ministry of Finance and Treasury. often entirely inappropriately (egg. B&H Federation Ministry of Finance. although this differs amongst the targeted institutions. • Even in cases where the budget was largely executed as planned. Sarajevo Canton). especially regarding certain budget items. • Current reserve funds are being used in a non-transparent manner. Trebinje Municipality). are either inappropriately recorded (missing or incomplete accounting entries) or exceed the approved amounts (egg. the following are the most flagrant ones: • There is a lot of space for improvement of the transparency of the budgeting process (both generally and regarding particular stages of budget planning and execution). regularly conducted by the four supreme audit offices in B&H (state. but a desire to spend allocated funds at any cost. for which exactly the Ministries of Finance (egg. with no clearly defined criteria or established mechanisms for monitoring and control (egg. • In particular institutions. Trebinje) • Costs for salaries and fees. RS Ministry of Finance) are largely responsible. is not satisfactory. it turned out that the reason for this had not been a diligent and realistic planning. are irrationally used and often exceed the framework limits. • Entertainment costs. • There is a high limit on discretionary spending authority delegated to the Ministers and other Heads of institutions (egg. but not to documentation about the revision and/or execution of the budget (egg. as well as on the most important control mechanisms in this area – audit reports about the budget and financial operations. Mostar) • In cases of the targeted Ministries of Finance. which deals with violations of the right to access information. revision and execution. Analysis of the Budget monitoring and public procurement The researchers’ opinions and conclusions on the budgeting policies of targeted institutions are based upon the submitted documentation on budget planning. particularly fees for work in various committees. two entities and Brčko District levels).The research team has forwarded the cases of flagrant violation of the current FOI legislation to the institution of the B&H Ombudsman for further action. Ministry of Finance of Canton Sarajevo. RS Ministry of Finance). especially at the local level. • The planning the total budget required for functioning of the targeted institutions. City of Banja Luka. the partial budget documentation and audit reports dealing with particular ministries were much better in masking irregularities than in cases where analysis included a complete budget documentation of governments. Among the most significant findings implying potential conflict of interest.
invoking the jurisdiction of the Public Procurement Agency. although the B&H Law on Public Procurement (PPL) envisages that possibility. Financial management and control systems need to be further developed. Basic issues identified regarding public procurement are: • Inadequate planning of resources for public procurement in the overall budgeting • Lack of transparency in public procurement procedures. This latest EC Progress Report on B&H has once again confirmed that the issues in the area of financial control and procurement procedures had not been met with an adequate institutional response: “Overall. and the data provided in other ways – through FOI requests. in the area of financial control Bosnia and Herzegovina has partly met its objectives regarding Public Internal Financial Control legislation. but its provisions for preventing or detecting irregularities are not applied consistently. The coordination mechanisms and administrative capacities of the main stakeholders need strengthening to improve the coherence of public procurement policy and to reduce corruption. even though the PPA is supposed to receive this information directly from the authorities • Inadequate reporting to the control authorities (there is a ubiquitous mismatch of data published by the B&H PPA based upon information submitted by the contracting agencies. selection of the bidder. preparations in the field of public procurement remain at an early stage. on web pages) • Excessive use of direct negotiation. The Public Procurement Law largely meets basic standards regarding transparency. Overall. contract deadlines) • Some authorities have declared that providing information on public procurement following FOI requests was not within their competencies. avoiding legal rules • Inadequate internal control and reporting mechanisms • Situations identified of political.The area of public procurement has emerged as a particularly important and relatively largest of the identified issues. the research team has discovered a number of situations of potential and actual CoI. In this area. The issue of the independence of external auditors remains to be addressed. and other favoritism (contracts allocated to political parties’ contributors or party colleagues) • Awarding contracts to suppliers who had not met the conditions of competition • Several Annexes to the contracts concluded irrespectively of the current legal norms. regulations and re-organisation. and the amount of financial resources. individual items of contracts concluded (contract value. while the B&H Public Procurement Agency (PPA) has informed the research team that so far not a single participant in the tender processes had been disqualified due to a conflict of interest. regarding both the incidence of irregularities.” Bosnia and Herzegovina 47 .
Findings for each of the targeted ministries and municipalities (7 in total) B&H Ministry of Finance and Treasury The B&H Ministry of Finance and Treasury is one of the nine ministries forming the B&H Government – the B&H Council of Ministers.00) 2009 – 85. Public Procurement Public Procurement Agency The Ministry Web-page ∑ No.405. No answer provided = 1.53 KM 48 Balkan Anti-corruption Civic Initiative .000.00) The budget execution rate improved with time. in 2008 it sligtly improved and in 2009 it impoved significantly.92 KM 25 829. of contracts ∑ cotracts value ∑ cotracts value 2008.056. Generally.00) 2008 – 77.255. In addition to the Law on Conflict of Interest and Law on Civil Service in Governmental Institutions of B&H. given that in 2007 it was very low.850. Transparency and Free Access to Information Total number of FOIA requests sent = 9. in respect to transparency and free access to information.79% execution of the planned budget (3.616. revisions and execution for 2007. 2008 and 2009. of contracts/ ∑ cotracts value 17 408.048.680.35 KM spent out of 7. further restrictions on the activities of public officials from which conflict of interest might arise are provided for by the Ministry of Finance and Treasury’s Rules on Expenditure Accounts and Gifts.34 KM spent out of 6. the Ministry has submitted a summary of expenditures by economic categories: 2007 – 59. the Index Register of the information owned by the Ministry.789. The Ministry’s website provides a Guide for Access to Information. Incomplete information provided = 1. this Ministry demonstrated better performance than most of the other targeted institutions.614.38% execution of the planned budget (6.377. The annual audit reports on this Ministry confirmed this statement.009. 6 3. Transparency of Budget Planning and Execution In response to FOI requests about the budget planning.37 KM spent out of 6. of contracts / ∑ No.336.557.22% execution of the planned budget (5. Yet. as well as the electronic form for requests for information. there is still a lot of space for improvement.512.72 KM x x Response to the FOI requests ∑ No. Complete information provided = 7. 4 418.806.727.26 KM x x 2009.
the HKDU „Seljačka sloga“ Trebižat from Čapljina was granted the amount of 10. According to the B&H Official Gazette it is evident that many individuals and institutions from Čapljina. the B&H Ministry of Finance and Treasury cannot be regarded as an example of good practice. 3 http://www. (Ltd. The fuel has usually been purchased from “Energopetrol” Sarajevo and “Rebac Benz”.000 KM.)” Široki Brijeg.186 KM has been spent for this purpose.578.000 KM. for the same purpose. is the founder of the King Tomislav Foundation.ba/bos/images/stories/ministarstvo/Procedure%20za%20tekucu%20rezervu%20 za%202010-bos. and to the budget user .o.gov. The Rebac Benz owners are from Trebižat near Čapljina. where the Finance Minister Dragan Vrankić also comes from. in 2006. have received grants from this institution’s current reserves.)” Sarajevo and “Boma d. The Ministry’s statement on all public procurement contracts concluded in 2008. (Ltd. The HKDU „Seljačka sloga“ Trebižat. Čapljina. a small town in Herzegovina. Among others. with headquarters in Čapljina. and to afterwards get them transferred to the civil service office. Regarding recruitment procedures and policies. as submitted in response to the FOI requests. After making a decision. on 27 February 2008 this Ministry signed a contract with Consortium “Twin Commerce d. given that advisory function is not a civil service office. and the data owned by the B&H Public Procurement Agency. including fuel procurement procedures for selection of the best supplier.200.o.pdf Bosnia and Herzegovina 49 . where the Minister Dragan Vrankić is from.There is an evident difference is the data this institution has submitted at the request of the researchers. however. together with Dragan Vrankić – the B&H Minister of Finance and Treasury – and several other individuals and cultural organizations. The usual practice is to initially employ party people as advisers. During the previous periods. 50. According to the B&H Public Procurement Agency (B&H PPA) data. for the purpose of organizing the 2009 Trebižat Folk Festival. and 2007. auditors had also had complaints on the manner this institution had conducted the procurement procedures. the Ministry hands the Decision to both the Ministry of Finance and Treasury for implementation. In 2009 the B&H Council of Ministers made a Decision about grants to nonprofit organizations and individuals for the current year and handed it to the B&H Ministry of Finance and Treasury for implementation. The Consortium’s offer of 2.o.applicant who had been granted funds from the current reserve. contains no information about the contract with this Consortium. In 2008 this Foundation had also received the funds amounting to 12 . The Contract regards the procurement of office furniture for the Building of Greece and B&H Friendship.trezorbih.o. this institution had not financed any association of citizens or non-governmental institution. The 2008 Audit Reports about the Ministry also contain comments on the public procurement procedures. on all grounds.88 KM had been accepted as the most favorable one.3 The B&H Council of Ministers is entitled decide on the use of the current budget reserves. given that a certain number of individuals had joined the Ministry on the basis of their party affiliation. According to the B&H Ministry of Finance and Treasury’s data.
058. budget execution: 268. Besides the B&H Federation current laws dealing with conflicts of interest of public officials and civil servants. the Ministry did not introduce an adequate system of reporting on the budget execution to the B&H Federation Government. of contracts / ∑ contract value 2008. The very fact opens up doubts about the reasons for such irregularities. the Audit Reports about the Ministry’s financial statements for the different years observed. the website of the Federal Ministry of Finance contains formal legal requirements for access to information – a Guide and Index Register of the information owned or controlled by the Ministry. No answer provided = 9 The B&H Federation Ministry of Finance of is one of the three targeted insitutions which has neither provided answers to any of the repeatedly sent requests for information. consistently indicate a lack of transparency in the budget spending.08%) 2009 – The total budget of 579. They have therefore breached the FOI Act on several grounds. 47 3 2 400 000 720 000 ∑ No. the way prescribed by the law. So in 2009. particularly when it comes to reports on their expenditure of the current reserves.425. there are no other regulations specifically addressing this issue within the Ministry. budget execution: 564. of contracts / ∑ contract value x x x x 50 Balkan Anti-corruption Civic Initiative .072.374. Transparency of Budget Planning and Execution 2007 – The total budget of 315. and suggests the possibility of pursuing the private interests over the public ones. On the other hand.657 KM.557 (85.The Federation of B&H Ministry of Finance The Ministry of Finance of the B&H Federation is one of the 16 ministries of the B&H Federation Government. Public procurement Public Procurement Agency The Ministry Web-page ∑ No. 2009. of contracts / ∑ contract value x x x x Response to the FOI requests ∑ No. nor sent a formal Denial of Access to Records in writing.481 KM. Transparency and Free Access to Information Total number of sent FOIA requests = 9.40%) Although the B&H Federation’s Ministry of Finance showed some improvement in terms of both realistic planning and the budget execution.473 (97. The research team was consequently forced to analyse this institution mainly relying on alternative sources of information/various control mechanisms.
the 2009 Audit Report warned that “On 25 August 2008 the Ministry concluded a contract with with the company ‘ORACLE B&H d. the Ministry and the company ‘ORACLE B&H d. that the funds for this procurement had already been allocated for the procurement of other goods.4 A flagrant example of this could be observed in the tender for Group Personal Accident Insurance for the Ministry employees.e.2.o. without publication of the procurement notice.)’ Sarajevo.”5 The same Audit Report found that in 2008 a selection procedure for the most successful bidder had been conducted neither in case of a supplier for services of printing duty stamps and bills of exchange. For example. Grude) and the Annex to this contract of 19 December 2007. In 2008 the expenditure incurred on this account amounted to a total of 68. a new procurement process was subsequently launched through a competitive 4 5 Public Procurement Agency B&H recorded procurement procedures within the B&H Federation Tax Administration as the Ministry of Finance’s procurement.saifbih. and other aspects of contract had been negotiated in order for the contracting authority to identify the most economically advantageous tenderer.)’ Sarajevo.” Sarajevo. Yet another case which could indicate a potential conflict of interest was found in the Audit Report about the Federal Ministry of Finance financial statements for 2008. The relevant documentation proving the justification given for the termination of the contract award procedure was not provided in accordance with Article 12 of the B&H PPL. godinu.910 KM including VAT). without any previous procedures conducted as prescribed by the B&H PPL.d.The total value of contracts published on the PPA site is difficult to calculate because some information on the procurement quote only the value per unit. for the period from 01 August 2008 to 31 July 2011. a Liability Only Car Insurance and the Ministry’s venue Insurance. claiming that the Ministry did not have the financial means needed i. After the procedures.579 KM including VAT) and the purchase of copiers (32. works and/or services.ba/javni-izvj/budzet/?cid=694. procedures had been conducted of a competitive tender with additional disclosure for the purchase of laptops (33. (Ltd. After examining the documentation presented.625 KM. It can be concluded that this segment shows how the Federation B&H Ministry of Finance is characterized by a chronic lack of transparency in reporting. following a negotiation procedure for Oracle software products technical support.o. The total value of the three-year contract is 326. but neither the value of the contract nor the amount offered are listed.o. the Minister issued the Decision on the annulment of the proceedings. until 31 December 2008.d. According to this Report.o. (Ltd. http://www. as prescribed by the B&H Law on Public Procurement (PPL). Moreover. legal. it could not be confirmed that economic. The tender was won by “Bosna Sunce Insurance d.823 KM.1 Bosnia and Herzegovina 51 . The bills of exchange and duty stamp printing services were instead provided on the basis of the contract concluded with the supplier in the previous period (Grafotisak d. It was also established that in 2008.e. Izvještaj o reviziji finansijskih izvještaja Federalno ministarstvo finansija za 2008. signed an Annex to their original Contract of 22 December 2004 on the functional support (engagement of consultants as necessary). Conflict of Interest Some of the tenders implemented by the Federation of B&H Ministry of Finance during this period were criticized by the Audit Office for the Institutions of the B&H Federation. The Annex included the item on the original Contract extension for another year i. s.
000KM6 On the grounds of the documentation available. as defined by the Ministry Rulebook on Internal Organization. therefore before the deadline expiration (of 15 days from the date the offerors had been notified on the results of the selection of the winning bidder). to be carried out in the manner prescribed by the B&H Federation Law on Civil Service and the Law on Employees in the Civil Service in the Federation of B&H. Complete information provided = 1. According to these findings it could not be confirmed that the selection of bidders was carried out pursuant to the provisions of the B&H Public Procurement Law. and the new process had been initiated before the notice of the cancellation procedure was published in the B&H Official Gazette. http://www. did not consistently comply with the provisions of the B&H Public Procurement Law. the 2009 Audit Report pointed out irregularities in the Ministry’s transfer of monies to the B&H Federation Foundation for Sustainable Development “Odraz” in the amount of 5.5 months after the total amount had been paid (on 9 January 2007). Republika Srpska Ministry of Finance The Republika Srpska Ministry of Finance is one of the 16 ministries forming the Republika Srpska Government.saifbih. The purchase of a passenger car. No answer provided =1 Republika Srpska Ministry of Finance has got a Public Relations Office. while the data register.650 KM.application without a notice. nor the modes of reporting and control over the use of the funds. Given that the Auditors have also found disputable the procurement procedures conducted in the previous years.)” Mostar. valued at 103. One of the recommendations of the 2009 Audit Report refers to the necessity for recruitment procedures for the posts. 6 Izvještaj o reviziji finansijskih izvještaja “Federalno ministarstvo finansija” za 2009.o. The Audit Reports also point to other instances of potential conflicts of interest within the Ministry.2.e.1 52 Balkan Anti-corruption Civic Initiative . which is all contrary to the B&H PPL. which is exactly why the supplier received the highest score according to the published criteria. There has been no Decision of the Minister to restart the process. Transparency and Free Access to Information Total number of sent FOIA requests = 9. When it comes to money transfer. Thus was the best bidder selected with whom the contract was signed.o. while the contract award notice was not published in the media at all. 2. purchased by the Ministry from “Jelić Auto d. particulatly to those regarding employment policies. the Auditors could not establish the purpose for which the funds had been allocated. this might indicate a problem of potential conflicts of interest.godinu.673. The contract with the supplier was signed on 27 December 2006. The delivery of the car occurred on 24 March 2007. or a Guide for Access to Information are not published on their website. i.ba/javni-izvj/budzet/?cid=786. while the delivery deadline offered was three days from the date of the total amount payment. Restrictions on the activities of the Ministry’s employees that may give rise to a conflict of interests are provided for by the Law on Prevention of Conflict of Interest in Republika Srpska Government Institutions and the Law on RS Civil Servants. Incomplete information provided = 7. (Ltd.
For example. or that there were more procurement contracts by direct agreement than stated in the Ministry’s response. It is disturbing to learn that the Agency has no data on public procurement contracts worth 826. of contracts / ∑ contract value 2008.493. over a two-year period the Ministry has spent 3.09 KM.638. Bosnia and Herzegovina 53 . the cost of specialization and education in 2009 were four times higher compared to 2008.195.117 KM.Transparency of Budget Planning and Execution Examination of the RS Ministry of Finance budget documenation and the Audit Reports on their financial statements. The Audit Reports on the procurement procedures as conducted by this Ministry also indicate multiple violations of the Law on Public Procurement.019. This could either mean that certain procurement processes are being carried out without notifying the public. Budget execution 88% – a total of 16.259.000 KM (a decrease of 12.59 KM8 Response to the FOI requests ∑ No. A similar situation was recorded in 2009.857.7 8 7 8 The term "public procurement procedure" is stated in the letter of the Ministry. It is not indicated whether this implies procurement procedures conducted by the Ministry only. In the period from January 2008 to December 2009 they had a total of 363 public procurement procedures. 16 13 1.175. Public Procurement Public Procurement Agency ∑ No. travel expenditures were twice as high. including public procurement conducted by the RS Tax Administration.4 million KM for the public procurement. Also.061 KM 2008 – Revised budget planned of 9. Budget execution 99% According to the Supreme Office for the Republika Srpska Public Sector Auditing reports. the contracted services costs by 21%. fuel costs increased by 87% the cost of insurance and banking services by 26%. by the staggering 878%.592.790. or the Ministry together with the institutions under its jurisdiction. 2009.341.675 KM (16% decrease of funds inicially requested). A review of the B&H Public Procurement Agency data has shown 29 contracts (20 tenders or procedures) worth about 2. 2008 and 2009 as follows: 2007– Revised budget planned of 18. Budget execution 98% 2009 – Revised budget planned of 8. This is the total value of the procedures performed during the period from January 2008 to December 2009.99 KM 806. with the most flagrant example of the projected budget overspend for the purchase of fixed assets in the form of copyrights.6 million. shows the budget plans and execution of the budget for 2007.51 KM The Ministry Web-page ∑ No. and office material costs by 21%. of contracts / ∑ contract value According to the data available. during the analyzed period the Ministry had a significant excess of certain budget items. in 2008. of contracts / ∑ contract value X X X X 3637 3.490.640 KM inicially requested).
has also been demonstrated by the Decision of the RS Governement from late 2009.0 TDI Quattro Tiptronic. The contract which Kojić’s company “Transjug” won with the RS Ministry of Finance in 2007. among other things. He has won 32 tenders for cars purchase or repair. “Nezavisne novine” have received a grant of 300. has been dealing with institutions in RS as well as those in Brčko District and those at the B&H state level. There have been cases where in tenders he appeared as the only bidder – through his three companies. His loyalty to the party has been awarded after the last B&H general elections and he is currently the main candidate for the new Prime Minister of RS. that there were only positive RS government current policies media mentions. youth. there were situations where grants have been awarded as support to various sport.362 texts published on the Internet. 5. 429 articles published in various periodicals. prior to the general election. Ðorđe Kojić. Several cases of potential conflict of interest were noted where grants had been awarded to organizations headed by individuals close to the ruling parties. In the tenders invited by public enterprises and state institutions at all governmental levels during the last four years. was concluded on 16 January 2008 for the total value of 118. nor the manner in which they would be awarded. of SNSD as well.Conflict of Interest Through his four companies: “Transjug L”. or similar organizations. Details of financial assistance to media in Republika Srpska may also be considered indicative of a potential conflict of interest. the head of this radio-station is Gavrilo Bobar of SNSD Party. without specifying neither the organizations nor the period the grants were intended for. the RS National Assembly member. Radio Bobar Bijeljina was awarded a grant in the amount of 16.000 KM.355 KM (the price included an Audi A6 2. meaning that the Ministry could relativize or even change the Audit Reports. The analysis showed.494. of the SNSD party like Kojić himself. by which the RS Ministry of Finance was instructed to arbitrate between the The Supreme Office for the Republika Srpska Public Sector Auditing and the auditees which were most likely to get unfavorable auditors’ opinion.2 million KM. They analyzed 4. The results of financial aid received were evident during the media monitoring the B&H journalists’ professional association “BH novinari” performed in September 2010. The way in which his Ministry served the purposes of the strongest political party in RS. the car insurance and the like. On the grounds of the Audit Report about the Ministry of Finance in 2008. “Brčko Gas Insurance” and “S-Auto”. and 1. the 54 Balkan Anti-corruption Civic Initiative . Specifically. The editor of “Nezavisne novine” is the daughter of the B&H Presidency member Nebojša Radmanović. manufactured in 1999) has been criticized by the the Supreme Office for the Republika Srpska Public Sector Auditing. thus creating the illusion of competition. “Brčko Gas”.422 general news items. For example.8.80 KM. Along with other public and private media which in 2009 received grants through the RS Ministry of Finance RS. The grants awarded to the NGO sector also raise the suspicion that there might have been some private interests behind these decisions. it could almost certainly be argued that many activities of public officials have given rise to a conflict of interest (primarily in the form of party affiliation) in the Ministry’s employment policy. Kojić has won contracts worth about 2. for the purchase of an AUDI A6 3. Minister of finance at that time was Aleksandar Džombić.805 articles published in daily newspapers.
036 KM(96.03%) 2008 – Planned budget – 9.597. Complete information provided = 3. budget exection – 9.100 KM. Transparency and Free Access to Information Total number of sent FOIA requests = 9. given the absence of specifications for the invoiced goods and services and the lack of documented business purpose for the account. Apparently .392.052. which is 82% more than in 2007.658 KM. Incomplete information provided = 3. the cause for this was implementation of a new law on salaries in the RS. among other things. Canton Sarajevo Ministry of finance The Canton Sarajevo Ministry of Finance is one of the 12 ministries of the Cantonal Governement. A similar trend was recorded in 2009 when there was an increase in gross salary by an additional 20%.600 KM. as well as a significant increase in number of employees (from 160 to 211).amount of total gross wages and benefits realized in 2008 was 4. All these reports can be found on the Ministry’s website.400 KM.245. concluded that the receipts upon which Ministry of Finance justified their expense accounts were quite messy. No answer provided = 3 The website of the Ministry of Finance of Canton Sarajevo does not contain a Guide and index register of the information owned or controlled by the Ministry.467. budget exection – 16. there are no other rules or laws which would provide restrictions regarding conflict of interest prevention within this Ministry.351. partly due to a new increase in the number of employees. Review plan and budget implementation in the observed years: 2007 – Planned budget – 19.492. The auditors. budget exection – 8. while the documentation for 2009 was subsequently downloaded from the Ministry’s website.86%) 2009 – Planned budget – 9.046 KM (84. Transparency of Budget Planning and Execution The Ministry has submitted the required budget reports for the entire Sarajevo Canton in 2007 and 2008. Besides the applicable entity laws.948 KM (91. Bosnia and Herzegovina 55 . therefore in this regard the transparency principle has formally been respected.80%) A conclusion which can be drawn from the control mechanisms review (Cantonal budgets Audit Reports for 2008) is that neither this Ministry was immune to corruption.
The report stated that in 2008 the Ministry engaged JKP (Public Enterprise) GRAS Sarajevo for duty stamps printing services. which is published in dailies “Dnevni Avaz” and “Oslobođenje”.Public Procurement Public Procurement Agency ∑ No. in accordance with the Decision of the Cantonal Government about the general allocation criteria for non-profit organizations and associations. The allocations show a certain number of organizations to which this Ministry granted funds on regular basis. of contracts/ ∑ contract value x x x x Response to the FOI requests ∑ No. Besides the Bosniak Intellectuals’ Council. President of the Bosniak Intellectuals’ Council in Sarajevo. Conflict of Interest According to the data submitted upon researchers’ request. is also a member of the SDA Advisory Group for Higher Education. acces to the requested information was denied and the research team was referred to the B&H Public Procurement Agency (stating that the public procurement procedures are not implemented by the Ministry but by the Joint Affairs Office). and 2005. PhD.gov. Neither their website contains any information on public procurement9. signed by the Minister Muhamed Kozarda. the Sarajevo “Association of Young Muslims”. The letter we received from the Ministry stated that the associations are financed by public call for financing and co-financing of associations.700 KM. “Women Association Minnet” from Sarajevo. without the previous tender procedure – which did not comply with the B&H Public Procurement Law. of contracts/ ∑ contract value x x x x The notices published by the B&H PPA do not contain any information on contracts awarded on the basis of tenders announced by the Sarajevo Canton Ministry of Finance. from 2006 to 2010 the Sarajevo Canton Ministry of Finance granted funds of 990.ks. the Sarajevo Canton Finance Minister. In the last four years they have received 293. of contracts / ∑ contract value 2008. the Islamic Community in Sarajevo.600 KM for financing civil society organizations. “Vijeće bošnjačkih intelektualaca” (Bosniak Intellectuals’ Council) from Sarajevo received more money than any other NGO from Sarajevo. Nedžad Mulabegović. 2004.ba/aktuelno/nabavke 56 Balkan Anti-corruption Civic Initiative . happens to be a member of the same party. Muhamed Kozarda. x x x x The Ministry Web-page ∑ No. the “Association of Muslim Women Sumejja” from Sarajevo. In the letter we received from the Ministry. and “Sumejja Association” from Sarajevo. The structure of NGOs which receive budgetary funds otherwise shows that most of them are orientated to working with Bosniak population only. 9 http://mf. on the grounds of the contracts signed in 2002. Prof. the “Ilmija Association”. regular budget users are also the “Sarajevo Association of Bosniaks originally from Sandžak”. 2009. The 2008 Audit Report about the Sarajevo Canton Ministry of Finance shows that this institution did not comply with the rules on public procurement.
the Chairman of the Canton Assembly.611. bad practices within the Canton have continued and the Canton even received a negative Audit Report. Assembly is consisted of one house. executed 94. Conflict of interest in the Canton is regulated by the said laws of the B&H Federation.343 KM) The Audit Reports’ findings indicate a non-transparent and irresponsible spending of public funds.9 KM11 The Ministry Web-page ∑ No.184.Canton Sarajevo Sarajevo Canton is a Federal unit that performs its responsibilities through the Assembly and the Government. However.473. 55 54 12. composed of 35 members. The adopted budget for 2007 planned current reserve in the amount of 420.269 KM) 2009 – planned 681.36 million KM).904. Transparency and Free Access to Information Total number of sent FOIA requests = 11. executed 98.967 . while the Cantonal Government is formed by the Prime Minister and twelve Ministers. of contracts / ∑ contract value N/A N/A 57 Bosnia and Herzegovina . on which they should quarterly report to the Government. and within the existing operational plans.56% (671.000 KM per month within the planned allocation in the respective divisions (a likely annual total might amount to 3.29% (712.087. The Sarajevo Canton officials not only failed to provide any of the requested documents after several repeated requests but. executed 96. of contracts / ∑ contract value Response to the FOI requests ∑ No.000 KM.162 KM. told the research team that they had no intention of sending any written Denial of Access to information. which was not used during the year. No answer provided = 11 The Canton Sarajevo Governement’s Website does not contain a Guide and index register of the information owned or controlled by the Ministry. by the Article 26 of the Law on Budget Execution in Sarajevo Canton in 2007.428. In 2008.231.429 KM ) 2008 – planned 820. Public procurement Public Procurement Agency ∑ No.252. in a telephone interview.000 KM. directly elected for a term of four years. Transparency of Budget Planning and Execution 2007 – amended budget 739.667.71% (777.4 KM10 11.076. the list of irregularities mentioned in the report pointed to a number of different manifestations of conflict of interest. of contracts / ∑ contract value 2008. 2009. the Canton Prime Minister and Ministers are entitled to make decisions on expenditures for up to 20.
)” 10 This is the amount obtained from the data on the amount of individual contracts. exploitation of natural resources in question. The problem of concession payments had already been stated in Audit Report for 2008.)” (a debt of 154. This does not include the value of seven contracts http://www. the researchers detected that a number of valuable contracts was awarded to the company “AC Quattro” owned by Bakir Alispahić. goods in general use or performing activities of general interest in the Sarajevo Canton area. despite the action taken by the Ministry of Economy during the audit period. issued on 1 December 2008.12 According to the first instance (Sarajevo Municipal) Court decision.837 KM).)” Ilidža had agreed to such terms of the Agreement.152 KM). launched lawsuits against the largest defaulters among concessionaires.pdf 11 12 58 Balkan Anti-corruption Civic Initiative . for exploitation of raw mineral materials in the 2009 period from 1 January to 31 December.o.o.o.)” (a debt of 125. (Ltd.o. “Kunovac Company d.o.o. The Ministry of Economy has sent the Agreement to the Ministry of Finance asking for their viewpoint. (Ltd. it has been established that on 23 March 2010 the Cantonal Prosecutor proposed an Agreement to the Ministry of Economy for their consideration.537 KM in debt for exploitation of raw mineral materials during the period from 1 May 2005 to 8 November 2007.o. and a man who has once been the B&H Federation Minister of the Interior.)” (a debt of 259. “Kunovac Company d. stating that “House Milos d.saifbih. (Ltd.According to data collected. “Kunovac Company d.10 11 Conflict of Interest Regarding conflict of interest the Canton has got issues in the area of concessions.o.o. Regarding a lawsuit filed against the “House Milos d.o. The lawsuits were filed against: “House Milos d. “Kunovac Company d.400 KM) and “Čolaktex d. (Ltd. The Audit stated that.o.)” Ilidža for 245. (Ltd. an SDA Party member. (Ltd. we consider it unreasonable to enable the payment of arrears in installments by the end of 2010. In a letter dated 25 May 2010. However.o.760 KM in debt.784 KM with the default interest. The Agreement proposed the payment of the overdue total in nine equal monthly installments with the statutory default interest until 31 December 2010. i. The Report from that period also stated that in 2008 the Cantonal Prosecutor’s Office. By the same Decision.o.)” Sarajevo was announced to pay down 118. according to data from the Sarajevo Canton Official Gazette of August 2010.e. based on information received from the Agency.)” Sarajevo was to pay the amount of 17. In such cases. while in some cases the value of single contracts were not stated. upon request of the Ministry of Justice. but for some contracts framework values were provided together with single contracts' values. contracts have not been concluded timely and in a manner prescribed by law with all the legal entities which have been using natural resources.” The Letter also stated that signing the Agreement was contrary to the Canton Assembly’s standpoint. the contract was recorded as such but its value does not figure in a total amount.o.o.285 KM.ba/javni-izvj/kanton/pdf/Izvj_Kanton_Sarajevo_za_2008_godinu. (Ltd. (Ltd. In their Report on financial statements of the Sarajevo Canton in 2009.o. contracts had been signed. the Auditors indicated that not all legal measures had been taken for concessions in the Sarajevo Canton to be fully charged and that on 31 December 2009 the total outstanding debt on the grounds of concession contracts awarded in this Canton amounted to 890. the Ministry of Finance responded that “given the requirements the members of the Assembly of the Canton highlighted during the debate on the concession contracts.
Executed – 194.13 Public officials of Brčko District B&H are subjects to the State and District Laws on Conflict of Interest.15%) 2008 – Planned – 223.29 KM (79. The water just comes and goes. in the “Zobova dol” aggregate deposit Ilidža. The concession has not been paid at any one time by Alija Budnjo.40 KM (75. “House Milos” export-import has been awarded a concession for exploitation of dolomite. self-governing administrative unit. as well as the international Supervisor for Brčko. on the contrary. Executed – 177. It is the same area that they had been previously using. Brčko District B&H Brčko district B&H (BD B&H) is a neutral. Transparency of Budget Planning and Execution 2007 – Planned – 258.49 KM. the District Government’s website does not contain a Guide and index register of the information owned or controlled by the District. The main governing bodies in the District are its Government and Assembly.967. the hotel “Ilidža” owner. According to a memo Budnjo sent in March 2010 he should not be paying for the concession at all. as well as to the Law on Civil Service in Administration of BD B&H. he considered that the government should give him a subsidy.661. institutions of Brčko District of B&H are the most transparent among public entities covered by the research.788. since it obviously has access to significant funds. The District would have to budget more realistically. which has also been noted by the Audit Office for Brčko District Government and Public Administration. Transparency and Free Access to Information Total number of sent FOIA requests = 11. “ Budnjo did not see any reason to pay for the concession.953. we do not stop the water in any way.319. He stated that he did not use thermal but sulfur water to heat the hotel. with total responsiveness of 100%.370.39%) The Brčko District budget planning evidently did not correlate with their planned business activities or clear budget users’ targets in the observed years.was awarded a concession contract for exploration of limestone in the “River Rača-Visojevići” aggregate deposit in Ilidža Municipality.24 KM. under the sovereignty of Bosnia and Herzegovina. again the area that they had previously been using. However. because the water is just cooling anyway. a member of the SDA and a member of the Municipal Council Ilidža. Complete information provided = 11 With regards to transparency and abiding by the Freedom of Information Act.178.523. “So Hotel Ilidža disposed of an active volcano. 13 Supervisor for Brčko District B&H is also the Principal Deputy High Representative for Bosnia and Herzegovina Bosnia and Herzegovina 59 . Public institutions from Brčko are subjects to the state level FOI Act.
Revicon had been founded by the SDP and then took over by their staff Marin Ivanišević. of contracts / ∑ contract value 2008. but the Law does not recognize a cause of action for the situation when an Assembly member has business deals with institutions outside RS. Kojić is a member of SNDS.059. including those in Brčko District.618 1. Kojić has once been a member of the Brčko District Assembly and the RS National Assembly.Public procurement Public Procurement Agency ∑ No.265.)” was one of the contributors to B&H HDZ (political party).ba/stranke/prikaz. Over a two-year period “Brčko Gas d.557. (Ltd. Kojić owns three companies: “Brčko Gas Insurance”.200. but the official legislation does not recognize it as such.9 million KM worth contracts.o. RS Entity and B&H State) over the last four years. 22/00 60 Balkan Anti-corruption Civic Initiative .)” Brčko won contracts amounting to 1. of contracts / ∑ contract value 1.php B&H Official Gazzete. the same political party the Brčko District Mayor Dragan Pejić belongs to. was awarded contacts worth more than 200.o. is that they track officials. but only in situations where the activities of local public officials give rise to a conflict of interest. but not the RS National Assembly representatives.o.323 74. a member of the Republika Srpska National Assembly. The B&H Law on Conflict of Interest in Government Institutions applies to the Brčko District.)”. he received a minimum of 3.o. within Brčko District.cin. won the tenders in the District worth at least 226. (Ltd. Doing business with institutions at all three administrative levels (Brčko District. “Transjug L” and “S-Auto”. Brčko. Explanation of the B&H Central Election Commission.o.3 Response to the FOI requests ∑ No. “Alcoop d. In 2008.000 KM. During the observed period the company “Alcoop d. «Brčko Gas Ltd. a RS Assembly member falls under the RS jurisdiction.013.000 KM. which is responsible for Brčko District.e. X X X X Web stranica Brčko ∑ No.o. Under the RS Conflict of Interest Law. Under the B&H Law on Contributions to Political Parties from 200015 «Private companies performing public services under contract with the government can not financially support political parties. (Ltd. i. 2009.5 63. Conflict of Interest Analysis of the Brčko District public procurement data shows a textbook example of conflict of interest.14 Yet another contributor to this party.» from Brčko. One more issue which is going to allow Kojić to remain outside the law is the fact that the RS Law on Conflict of Interest does not know clauses dealing with the situation 14 15 http://database.590. Precisely because “Revicon” was doing business with government institutions. Besides the aforementioned firm. It is owned by Ðorđe Kojić.» “Revicon” company received contracts valued at 1. the B&H Central Election Commission has removed Ivanišević as a member of the Sarajevo City Assembly.920 KM. of contracts / ∑ contract value Analysis of the published contracts evidently show that this institution has also had some controversial procurement procedures.52 KM. No.
Transparency and free access to information Total number of sent FOIA requests = 11.”17 After a repeated letter of June 2010. nor the register of information held by these bodies. is intended as as a service for journalists. As stated from the Mayor’s office. according to the information from their official website. Kojić is now a rich man. Transparency of Budget Planning and Execution 16 17 Annual Financial Disclosure Statements of political officials available from http://www.16 City of Banja Luka City of Banja Luka is the largest territorial political unit in Republika Srpska. with 54 local communities’ administative units. Using loopholes in the Law which he himself adopted. The Annual Financial Disclosure Statement he filed shortly before the 2010 elections. an oil terminal.092. Public bodies are required to provide public access to existing documents or other materials which contain answers to questions or information requested. ( USAID. The City Administration has got a Public Relations Department which. The website does not contain a Guide for citizens’ access to information. Kojić can therefore enter into tender contracts because he “only” owns the companies but he is not the companies’ legal representative. P 5) . Bosnia and Herzegovina 61 . In legal terms it is only important for Kojić not to be a member of the National or Steering Committees of his companies. and all of it within B&H. According to his June 2006 Annual Financial Disclosure Statement. asp?col=Izjave_Imovinski. Following this response we filed a complaint with the B&H Ombudsman for Human Rights. two family houses). August 2002.ba/default. The quote is an excerpt from “A Guide for public authorities”: “How to apply the Freedom of Access to Information “. No answer provided = 11 Almost two months after letters addressed to the City authorities had been dispatched.izbori. stated assets of value amounting to 20. The City Statute and the City Assembly Rules of Procedure do not define the situation of conflict of interest. the Chief of Staff responded: “The law does not require for public bodies to perform data analysis or to answer questions in writing.000 KM. information accessed on 17 November 2010. the RS Law on Conflict of Interest and the Law on Local Self-Government of RS are the only regulations providing for restrictions of activities which might arise conflict of interest in the City.. or the person authorized to legal representation of these companies. Kojić was a member of the RS National Assembly at the time the Law on Conflict of Interest in the institutions of the RS was adopted. two gas stations. BSc.where a National Assembly representative owns the company that wins tenders. we got the same response as the first time. his assets were worth 5 million KM (including two car-salons. in Political Science. The Chief of Staff is Mirjana Lukač.
of contracts / ∑ contract value X X X X According to the City of Banja Luka data on public procurement. 92 112 90. The Audit Report warned about the public procurement contract won by the company “Integral inženjering d. his wife. is also the owner and Banja (Spa) Laktaši in which stock holders are a former RS Prime Minister Milorad Dodik.)”. at least ten contracts have been awarded to “Kozaraputevi AD (shareholding company)”.50 KM Web stranica Grada ∑ No.500 KM. Some of these contracts have been criticized by the Supreme Office for the Republika Srpska Public Sector Auditing.713 KM. Milorad Dodik himself. The Budget Reserve.440. Slobodan Stanković. Banja Luka. at least five to “Batarcommerce d. Prijedor. In addition. because of doubts about the tender for the construction and equipping of the administrative headquarters of the RS Government.ba/ 62 Balkan Anti-corruption Civic Initiative . which the City of Banja Luka has signed with this company.o.19 During the period from January 2008 to December 2009 they additionally signed two contracts worth 615.424. of contracts / ∑ contract value 2008. for the reconstruction of the pool Incel.2.498.cin. “Integral Inženjering” concluded 13 contracts with the City of Banja Luka worth a total of approximately 28 million KM. Incidentally.512 KM. and executed in the amount of 1. Laktaši. in the expenditure item.940. his wife and their son have shares in Banja (Spa) Laktaši totaling 1500 KM.According to the Audit Report about the City of Banja Luka financial statements for the period of 1 January to 31 December 2007. the owner of “Integral”.o. The report stated that one of the the tender criteria had 18 19 20 According to his Annual Financial Disclosure Statement. planned as an item within a consumer unit noted as “Mayor”.o. given the records of the budget execution were not in full compliance with the prescribed budget classification. http://www.002. The 2007 Audit Report criticized the tender worth nearly 15 million KM.221 KM 40. has by relocation been increased to the amount of 2. vary from the actual budget execution.000 KM. Dragoljub Davidović. Over the period from 2001 to 2007. while the data as presented by the City of Banja Luka Administation itself show a budget of 145. (Ltd. the total budget was planned of 149. of contracts / ∑ contract value X X X X Response to the FOI requests ∑ No. the B&H Prosecutor’s Office is investigating the owner of the said company and the authorities in RS.000 KM. The procedures with clear criteria for budget reserve allocation and the usage of remitted funds have not been adopted. (Ltd. Public Procurement Public Procurement Agency ∑ No. 2009.208.ba/Stories/P18_PublicAdmin/?cid=862.20 Several of these contracts have been criticized by Auditors.o.18 The RS Prime Minister belongs to the same political party as the mayor of Banja Luka. It follows that the presented execution of the budget. in the amount of 1.497 KM. http://www.1 Data downloaded from the B&H Public Procurement Agency website.916. Banja Luka. and their son.500. and at least two by “Prijedorputevi AD (shareholding company)”.javnenabavke.)”.
The 2009 Audit Report about the RS Ministry of Family. Conflict of interest According to data published in the City of Banja Luka Official Gazette.455 KM. Youth and Sports stated that this Ministry had fully funded the boxing match “Night of World Champions” organized by the kick-boxing club “Draženko Ninić” on 28 June 2009. of SNSD. The reports on expenditures were not provided according to the form of reporting as established by the Ministry. this Ministry had allocated a total of 830.84 m2 in Banja Luka at Vojvoda Stepa Stepanović Street was put at disposal of the Mayor Dragoljub Davidović. This was a three-room apartment of 85. Yet another anomaly that may refer to a potential conflict of interest was found among the data provided by the 2007 City of Banja Luka Official Gazette.000 KM for that event. On 14 February 2008. Draženko Ninić is a member of the dominant SNSD party and has been the City Assembly member since 2008. Its total costs amounted to 450. insurance and travel expenses of the participants.gsr-rs.000 KM) and accommodation. The Decision about this grant was adopted by the City of Banja Luka Assembly at their meeting of 18 April 2008.21 In this way bidders with minor financial turnover were precluded from bidding. again procured from funds provided through the costs of land restructuring and intended for solving housing problems of local government staff. The funds. That same year.92 m2 in Banja Luka at Vojvoda Momčilo’s Street. on 26 February. The apartment had been procured from funds provided through the costs of land restructuring and for the purpose of solving housing of administrative services’ personnel.000 KM for the purpose of co-financing the costs of organization of the “Night of World Champions. the City Assembly made a Decision on the disposal of a three-room flat of 99.000 KM.30 m2 at Mišo Stupar Street.been that bidders must have an annual income of at least 15 million. Over the previous two years.000 KM to finance the cost of organizing kick-boxing match to defend the European title in 2008. and that with the reference list they must submit notarized bank statements showing over one million KM gain from the operations completed. in 2008 the kick-boxing club “Draženko Ninić” was granted 150. the concert (120. 21 http://www. had been spent on fees (286.” The Decision was adopted by the City of Banja Luka Assembly on 8 December 2008.850 KM). as reported by the club’s box-office. This club had previously got 30. According to the City Council’s Decision of 22 November 2007. The decision stated that Mayor Davidović was responsible of its implementation. this time amounting to 200. the Assembly reserved another apartment for the Mayor’s use.org/izvjestaji/2007/index. a three bedroom apartment of 62. which should have provided an insight on how and when the expenditures were realized.htm Bosnia and Herzegovina 63 .
it is not possible to compare these data with the PPA’s data.963. No Audit Reports have been found about the City of Mostar financial statements.012 1.012 Web stranica grada ∑ No. Complete information provided = 5. Due to submission of incomplete documentation on the City’s public procurement.22 Public procurement Public Procurement Agency ∑ No.93* 1.165. of contracts / ∑ contract value x x x x Response to the FOI requests ∑ contract value 707. 64 Balkan Anti-corruption Civic Initiative . Transparency and Free Access to Information Total number of sent FOIA requests = 11. reconstruction or improvement of roads. the research team was unable to search this data in the Mostar Official Gazettes.52** *. so it is not possible to assess the accuracy of the budget planning process. of contracts / ∑ contract value 2008.625. which contained only the budgets planned for 2008 and 2009. 42 14 21. as well as procurement of fuel or consumables. the Information Officer in the Mayor’s Office was extremely cooperative throught the research.5 million KM. so any assessment on this issue would not be based on objective indicators. No answer provided = 1 The Mostar City Council website does not contain a Guide and index register of the information owned or controlled by the City Administration. Incomplete information provided = 5. which only applies to purchases within the Secretariat of the Mayor.City of Mostar Insitutions of Mostar declared that conflict of interest situations in the City’s administration are regulated solely by the Conflict of Interest Law of Federation of B&H. 2009. and provided evidence that some of the Departments in the City Administration had held back the information delivery. buildings and water supply. ** Data obtained via FOIA reqest pertain only to the Secretariat of Major of Mostar According to data published by the B&H Public Procurement Agency on their official web site. the very fact that the City 22 Due to capacity constraints. without any revisions and reports on execution. However.715. over the period from January 2008 until December 2009 the City of Mostar had concluded 56 contracts worth more than 23. However. the researchers were referred to the City website. bridges. Transparency of Budget Planning and Execution Following the FOI request for the budget documentation.832. Contracts were signed for the construction.
which includes 18 local communities’ adminisrative units.The party with majority in the municipal Assembly (10 seats) is SNSD. in 2009 the “Hering” contributed 5.149 KM. in the amount of 24. Incomplete information provided = 7.473 KM.779 (102.829. Trebinje City of Trebinje is a RS local self-governing unit. The “Hering” has received contracts worth 1. No answer provided = 1 The Trebinje Municipality website includes a Guide and index register of the information owned or controlled by various municipal offices.500 KM to the Party of Democratic Action. Transparency of Budget Planning and Execution 2008 – Total budget 22. PhD.168.866. According to the 2002 Law on Financing Political Parties in B&H. According to the data the Mostar City Council has sent following our request. the company “Amitea” has won several contract in Mostar.806 KM (91. This party has got six seats in the Mostar City Council.has not provided an insight into the complete documentation required.305. Nedžad Mulabegović. Incidentally.8 million KM.000 KM.30%) Bosnia and Herzegovina 65 . it is evident that the Mostar branch-office of the Bosniak Intellectuals’ Council is among the non-profit organizations funded directly from the City of Mostar’s budget. budget execution – 17. Another supplier.35%) 2009 – Planned after budget amendment – 19. either alone or in consortium with other companies. President of the Bosniak Intellectuals’ Council is Prof. the leading RS political party. suggests that there must have been a reason for keeping these data a secret. Conflict of Interest “Hering” company is on the list of suppliers. a member of the SDA in which he was also a member of the High Education Advisory Group.578. Conflict of interest is regulated by the RS Conflict of Interest Law and the RS Law on Local Self-Government. budget execution – 22. Transparency and Free Access to Information Total number of sent FOIA requests = 11. Complete information provided = 3. in the value of 2. it has received two lots for the reconstruction of a building for collective housing. the SDA has got 12 seats in the Mostar City Council.000 KM to this political party. However. the financial data of the HDZ B&H. the “private companies performing public services under contract with the government can not financially support political parties”. In 2008 this company contributed the amount of 1.570.
in 2009 the town of Trebinje concluded at least six contracts worth about 230.499 KM without negotiating procedure and without publication of the procurement notice. of contracts / ∑ contract value 2008.25 3.195 KM. but an additional contract on additional works has been concluded amounting to 189.957 KM.427.According to the 2008 Audit Report on financial statements.98 Web stranica ∑ No. in 2008 this city signed 19 contracts in the amount of at least 3. The subsequent examination of Audit Reports established that the contract the Raifaisen Bank had been awarded stated only that the bank received 100 points in the tender worth 2. winning the contract of 370. 66 Balkan Anti-corruption Civic Initiative .97 236. Forestry and Water Management. 19 6 3. The works have not been completed within the deadline specified in the contract.547.o. in this case the town of Trebinje. The final amount of the procurement contracts could not be calculated on the basis of information from this source because the several notices about the contracts awarded did not state the value of the contracts. The Supreme Office for the Republika Srpska Public Sector Auditing has found certain irregularities in the Trebinje Municipality financial report for 2008: 1.692.3 million KM. Again the practice continued of giving notice about contracts awarded without specifying the value of the contract. together the evidence of the municipality’s violation of the Law on Conflict of Interest in Governmental Institutions of Bosnia and Herzegovina. The recommendation. But they actually published data showing contracts worth 1. where the contract was concluded with the supplier even though there had been insufficient number of bids. of contracts / ∑ contract value x x Response to the FOI requests ∑ No. The B&H Public Procurement Agency publishes information on contracts awarded solely on the basis of data obtained from the contracting authorities. procedures and criteria for ongoing assistance and budget reserve along with internal act defining powers.000 KM.o. or the unit price agreed.157.144. 2.278.2 million marks. of contracts / ∑ contract value 6. Bidder “Građevinar d.Election of the preferred bidder for the construction of sewers in the village of Vinogradi. point out the existence of phenomena of putting private profit over public interest. According to the same source. adopt rules. (Ltd. rules and limits on expense accounts.Trebinje was given recommendation to. 2009.)” Ljubinje thus won a contract worth 150. The additional works have been funded by the RS Ministry for Agriculture.380. For the reconstruction of local roads in the Municipality the company “Herzegovina putevi AD (shareholding company)” Trebinje was selected. Public procurement Public Procurement Agency ∑ No. among other things.000 KM.59 According to data published by the B&H PPA.738. Some of the contracts only showed the number of points the most successful bidder had got.
the working group held a meeting and established priorities for employment of certain individuals on the basis of their social vulnerability and their engagement within the Party. of the following content: “On the grounds of the Decision of the OU SNSD.216 KM. Sorajić is otherwise a psychiatrist in the Municipality of Trebinje and a representative of the NGO Sonata from Trebinje. The group put together a list which we attach for your consideration. and “Porobić d. out of loyalty to the party. A bidder Raiffeisen Bank d. a member of the Municipal Assembly Trebinje. although the number of acceptable bids had been less than three. We ask you to employ the people from this list.000 KM.)”. Dragan Sorajić.223.144.d.3.o. and there two contracts for additional works were signed for the amount of 27.gsr-rs. Dr. sent a letter to all directors of public companies in Trebinje. for the contract worth 1.o ( Ltd. 23 http://www. The contracts stated no end date of the contracts. tender documentation or the offer.23 The Auditors also had complaints regarding selection of a commercial bank for credit financing of the Municipality’s long-term capital projects.org/izvjestaji/2010/Opstine/RI061-09. who is also the President of the Municipal Board of SNSD Trebinje.000 KM has been concluded with “Herzegovina putevi AD (shareholding company)”. Trebinje. which would have ensured a competitive process. according to your needs and possibilities.pdf Bosnia and Herzegovina 67 . “Having examined the documentation presented.” The attached list contained full names of 25 people and their professions. Selection of the successful bidder for the reconstruction of urban roads. By the explanation provided. only three of them have higher education degrees and the rest have the secondary education degrees. Conflict of interest On 1 June 2010. B&H won a contract worth 2. Trebinje. we confirmed that works have been performed which had not been defined in the bill of quantities. the change occurred was necessary and the construction works have been made with the approval of the responsible persons from the Municipality.
given that the research was conducted by civil society organizations. The manifested violations range from a complete disregard of the Law (egg. the decisions on granting the land lease. are those which are subjects to the FOI Act at the State level (Brčko District B&H and B&H Ministry of Finance and Treasury). Regarding other aspects of abiding by Freedom of Information Act. Ombudsman. which B&H had undetaken to abide by (egg. etc. but also their other staff. the GRECO recommendations regarding conflict of interest. etc. namely the Brčko District – has provided answers to all FOIA requests.). or proclaiming the data deliverance to be out of competence of the very institution legally responsible for keeping the data requested (affirming not to have lists of their own employees. the Audit Office. within the country whose institutions have established a practice of complete disregard of the official control authorities (the Public Procurement Agency. City of Trebinje) or resorting to creation of the new documents omitting the very segments which might have indicated and detected various forms of conflict of interest (like leaving out important parts of public procurement contracts. Out of the nine institutions included in the BACCI research.). Federation of B&H Ministry of Finance. It should be noted that the state-level FOI Act is the only one with the provisions envisaging penalties for 68 Balkan Anti-corruption Civic Initiative . the officials’ abiding by the laws concerning FOI remains characterized by voluntarism of mostly the managers of the targeted institutions. to more subtle forms of circumvention of the law. Ministriy of Finanace of Federation of B&H and the Trebinje Municipality) had published the appropriate guides and registers of information on their respective websites. only one – a local government unit (or 11% of the observed institutions). only three out of nine observed institutions (B&H Ministry of Finance and Treasury. and that in terms of delivery of requested information. It can therefore be concluded that the institutions which have acted in the most transparent way. All other institutions have more or less violated various provisions of the FOI Act. which is a totally absurd claim – egg. and giving it precedence over the Freedom to Information Act. or recommendations of relevant international bodies. or declaring not to have information about party affiliation of city council members. etc.Conclusion and recommendation Transparency and Free Access to Information The research has confirmed that the the public authorities at almost all administrative levels in B&H mainly do not abide by the FOIA still. Such situations have not been entirely unexpected. like selecting information to be delivered.). Government of Sarajevo Canton – 33%). which is a lex specialis). over mocking the Law (the case of City of Banja Luka invoking the USAID Guide created to help local authorities in comprehending this type of legislation. in terms of the Freedom of Information Act. recommendation of the European Commission on harmonization of B&H legislation regarding public procurement with the pertinent EU Directives.
Given a lack of precise requirements in tender documentation and the fact that public procurement notices or reports on procurement are not published as due. at all governmental levels.public bodies and their officials not abiding by the Act.25 Therefore. as well as situations of potential and actual conflicts of interest. does not publish public procurement notices. that the majority of contracting authorities. it can be concluded that such procurement procedures from the very start do not to meet the basic criteria of transparency and effective spending of public funds. training on electronic procurement systems and other modern and transparent mechanisms. and incorporate the best public procurement practices from EU countries • to introduce stricter penalties for violations of various provisions of the PPL. that selected suppliers often deviate from the contract-defined conditions – the most common being the terms of payment. and that the contracting authorities do not calculate penalties for it. are described in the preceding sections of this report.24 The four B&H audit offices have concluded that the implementation of existing law on public procurement is not satisfactory. or reported to the the PPA as due. the objections constantly repeated regard the facts that one public procurement contract is often broken into a number of smaller ones (which suggests avoidance of the open procedure). • to request competent authorities to adopt all subordinate legislation • to prepare and adopt a new law on public procurement. including sanctions for failure to submit information to the Public Procurement Agency • to complete the establishment of horizontal audits mechanisms • to work continuously on improving the harmonization of procurement procedures and budgeting processes • to introduce public monitoring mechanisms of all phases of the procurement process 24 25 The greatest issues the research have found. Generally. It would therefore be vitally important to harmonise the laws of Republika Srpska and Federation of B&H with the Bosnia and Herzegovina Law regarding provisions on sanctions on public authorities and public officials for not complying with the requirements of the Law on Freedom of Access to Information. All other institutions to which the Entities’ FOI acts apply. publications. which would provide for the relevant requirements of EU Directive and the UNCAC. It is also necessary to provide mechanisms which would enable the applicants for access to information to access the requested information in the form most convenient to them (given that information requested is indeed in possession of the authorities). but it would particularly be necessary: • to enhance capacities of the PPA and Procurement Review Body and to provide material and technical conditions for the work of these institutions • to continuously improve human resources capacity in all institutions participating in the public procurement procedures in B&H. Public Procurement Analysis of the implementation of the Law on Public Procurement has shown that this area is still not adequately regulated and fully functional in either of the targeted institutions. all parts of public procurement process in B&H need constinuos improvement. through training programs. mostly for furniture and office stationery. which are not yet harmonized with the umbrella legislation – the state law – have shown a much weaker performance. 2010 Bosnia and Herzegovina 69 . Transparency International B&H: Monitoring of the implementation of Anti-corruption reforms in B&H.
In the Entities SAIs are not subject to administrative and civil service laws. the RS Supreme Audit Office is very much influenced by the Government and for that reason it would be necessary to immediately repeal the Guidelines the Republika Srpska Government had issued to RS public sector institutions. at this point we consider it appropriate to mention the efficiency of the financial control system. Large sums of money have been allocated to non-governmental sector. This primarily refers to external audits.Transparency of Budget Planning and Execution Given that the most frequent issues noted in the areas of budget planning and execution. with effect that media coverage of the RS Governement’s work has always been positive.” Although independent in terms of the Civil Service Law.” Financing of Media and Non-govermental Organizations Financing of media companies has been a greater issue in RS than in the B&H Federation. were presented in both the introductory section of the B&H chapter. There has been no systemic funding of the media companies in the B&H Federation. but there has been in RS. 70 Balkan Anti-corruption Civic Initiative . In fact. for acting upon audit reports containing criticism. the EC states that: “Laws on internal audit continued to be implemented at State and Entity level and the administrative capacity is slowly being strengthened to ensure sound management of public funds. but have no impact on public financial management. We have established that in many cases money goes to organizations led by party colleagues of Ministers whose Ministries grant the funds. However. Regarding internal audit. and through individual presentations of the targeted institutions in the country. In Banja Luka there are several organizations whose representatives are members of either the ruling party or the City Council. as confirmed by the 2010 EC Progress Report on B&H: “As regards external audits. Entities and Brčko District) are performing well. the number of skilled internal auditors remains very low. A case has been recorded of a grant to a media company whose owner is a member of the same party as the RS Prime Minister. as well as in transparency of these proceedings. The State-level SAI is not entirely independent from the Council of Ministers… The issue of the independence of external auditors remains to be addressed. the four supreme audit institutions (SAIs) (State. or the supreme audit institutions and their work. A case has been noted in Mostar where substantial funds have been granted to the organization whose representative is a member of the City Assembly. In other institutions several situations have been recorded of hiring party colleagues as advisers who later on became civil servants. Employment Situations were discovered where directors of public institutions had been required to employ members of the ruling party (Trebinje).
and ensure better coordination between the B&H CEC and other law enforcement agencies (PPA). • to introduce provisions on pantouflage and prevent improper migration officials from public to private sector (Venice Commission). prosecutors and others) elaborating on their role in the Law implementation. an urgent harmonization of laws on conflict of interest at other administrative levels (especially in the RS) with the state one. • The existing deadline for starting the procedure of four years is totally inadequate considering that the official. • to begin application of sanctions of forfeiture of property and other sanctions from the criminal law should any illegitimate economic advantage be determined • to introduce the sanction of removal from office and the subsequent annulment of the act issued under a proven CoI situation for all the persons falling within the scope of the Law. Bosnia and Herzegovina 71 . • to introduce legal regulations for the control of accuracy of information provided in the financial statements. an investigation on the origin of property should be automatically launched (Romanian model). • to introduce a control mechanism for (not) reporting gifts by officials for all public authorities. Also. and ensure other competent authorities’ involvement (in particular the tax authorities. as it would prevent further problems in its implementation. • to make public (available on the Internet) all personal statements of assets. a new Law on Prevention of Conflict of Interests in B&H seem to be a more efficient solution. the B&H CEC is given too much discretion in deciding which officials to punish timely. • to introduce a mechanism for reporting a greater change of assets while public officials are in the office (GRECO). can be freely placed in a conflict of interest during the entire term. • to introduce appropriate sanctions for providing false information about the property of officials and their close relatives (GRECO). income and interests. This is an additional incentive to public officials to exercise improper political influence on the work of the CEC – Legislation should regulate the obligation of the B&H CEC to initiate proceedings in due course so to be able to make a timely decision on the conflict of interest. • to increase the capacity of the B&H CEC for the CoI Law implementation.Conflict of Interest Regarding the state level Law on Conflict of Interest it would be necessary: • to introduce mandatory personal financial disclosure statements for all officials covered by the Conflict of Interest Law. aiming at prevention and early detection of conflicts CoI and unjust enrichment. as stipulated by the Law. and for the commitment of other relevant bodies in assisting the B&H CEC in detection of false information (Venice Commission). Meanwhile. Given the number of recommendations to be incorporated into the Law. Should economic advantage or benefit be proven to result from a situation of CoI. would be a key issue. under this term.
GRECO). • to establish ethics committees within all public bodies. in overseeing the implementation of all anti-corruption laws and regulations. • to adopt codes of conduct for employees in all public institutions. enterprises and public companies. of the Agency for Prevention of Corruption and Coordination of the Fight against Corruption. including the repressive mechanisms. • to continuously organize educational campaigns and public awareness campaigns on the harmful effects of corruption and the need to involve all segments of society in a comprehensive fight against corruption.In addition. and to train these individuals on the rights and the mechanisms available to them (TI B&H. • to establish adequate procedures for reporting suspicions of corruption within public institutions and for protection of persons reporting irregularities (whistleblowers). with particularly elaborated ethical and anti-corruption principles. it is also necessary: • to ensure political independence of all law enforcement agencies. 72 Balkan Anti-corruption Civic Initiative . for monitoring commitments execution from ethical and conflict of interest viewpoint. • to ensure adequate engagement.
Republic of Serbia .
This is corroborated by the fact that the Regional Anti-Corruption Platform is actually the first regional effort to come to grips with at least one major segment of corruption existing across the Western Balkans. through alliance of regional civil society organizations and partnerships and understanding among participants. This experience is shared by all states of the Western Balkan. director of the Fund for an Open Society. Bosnia and Herzegovina. The Progress Reports on Serbia in the process of European integration in the given period emphasize the problem of conflict of interest as a serious problem. organized by Transparency International. an anti-corruption expert. Marijana Trivunović. On the other hand. but such initiatives are most frequently taken in the form of laws or strategies implementation of which is entrusted to a specialized institution. It was established with an aim to improve capacities of Western Balkan countries to fight corruption by making use of innovative approaches and ways which enable empirical research and comparative data analysis. the Fund for an Open Society Serbia has initiated gathering of anticorruption organizations from the Western Balkans. 74 Balkan Anti-corruption Civic Initiative . exists in every society. Terese Sobjeski from European Commission. it should be added that regional civil society organizations are disinclined to deal with this problem. there is no political will to systematically monitor and sanction this phenomenon and narrow the room for its dissemination across all segments of society. even though corruption is a crucial threat to development of the Western Balkans. namely conflict of interest.Introduction Whatever definition of the term „corruption“ and whatever kind of historical perspective we may adopt to perceive corruption as a phenomenon. 26 The 13th International Anti-Corruption Conference (IACC) was held in October and November 2008 in Athens. Dejan Milovac. Croatia and Montenegro. Podgorica and Miodrag Milosavljević. Various states have attempted in various ways to control and/or suppress corruption. Despite an adopted set of anti-corruption laws and established „independent bodies“ (agencies and committees). as well as the European Union. director of the Partnership for Social Development from Zagreb. comes in many forms but its effects are always corrosive for state and citizens. the Fund for an Open Society Serbia organized a workshop on corruption in the Western Balkans. the number of organizations which deal with various segments of corruption is small and their capacities insufficient. in charge of stifling corruption and preventing conflict of interest. deputy director of MANS. The Regional Anti-Corruption Platform is an informal creation of civil society organizations from Serbia. we will be forced to draw one conclusion: corruption has a long history. The participants included Jadranka Jelinčić. target groups and citizens. capacities of states in this region to fight corruption are relatively weak. From a broader point of view. given enormity of the problem. which began to work in 2008 following a set of meetings held in Belgrade. As a part of preparations for The Thirteenth International Anti-Corruption Conference26 in Athens. As a part of this conference. Munir Podumljak. a committee or a similar body for the fight against corruption. The findings of organizations gathered around the Platform are used in making policy proposals and devising public advocacy and lobbying campaigns targeting national governments in the region. often an agency. The experiences of organizations participating in the Platform show that the European Union is often the only channel through which civil society organizations can disseminate their findings and drafts to national governments. a program coordinator at the Fund for an Open Society. Consequently.
the 2009 Report said that „There were cases of interference by government in the work of the judiciary and conflicts of interest“ adding that: ”Political party financing and conflicts of interest remain serious causes for concern. The interviews with local self-government representatives were conducted by the Fund for an Open Society team. The areas that were analyzed are employment. state officials and representatives of civil society organizations. The project entitled the Balkan Anti-Corruption Civic Imitative (BACCI). In addition to the Ministry of Finance.For example. which was also charged Republic of Serbia 75 . The most important criteria for selection of the said ministries were the number of citizens and institutions affected by the work of the ministries and regional comparability. Miodrag Milosavljević. However. journalists. Ministry of Public Administration and Local Self-Government and Ministry of Health. namely interviews with officials. Nenad Portić and Mihajlo Čolak. The team included Jasna Filipović. The interviews were conducted in all selected cities using unique questionnaire made in order to determine practices in addressing the problem of conflict of interest and mechanisms and procedures for solving it. Ivana Stevanović. is the Platform’s first project. media financing and financing of non-governmental organizations by selected ministries and local self-government units. The team in Serbia has also conducted the fourth set of activities. The project in Serbia was carried out by two Belgrade-based organizations – the Centre for the Development of the Non-Profit Sector (CRNPS) and the Fund for an Open Society Serbia. The CRNPS team was in charge of the part of the research which concerned public procurements. the findings of which are presented in this report. which were subjected to analysis in Serbia and Croatia (in Bosnia and Herzegovina sample was different due to the specific political system). Conflict of interest is the first chosen area which organizations participating in the Platform will deal with and which will be subject to continual regional monitoring. financing of media and civil society organizations. The methodological framework of research and comparative analysis of findings in all three countries are ensured through three sets of activities – an analysis of legal and institutional framework pertaining to conflict of interest. and in case of the municipality of Pirot slightly below the average. Kragujevac. research in Serbia also encompassed cities of Belgrade. 3 ministries and 5 cities be analyzed.“ There is no such concern expresses in the 2010 Report since the Agency for the Fight against Corruption started its work. the problem of conflict of interest in Serbia is far from being solved. Serbia and Bosnia and Herzegovina). The most important criteria for selection of local self-governments were the number of inhabitants and territorial spread. in case of the city of Belgrade well over the average. The unique methodological framework of the BACCI project envisages that in each of the three countries participating in project realization (Croatia. public procurements. Novi Sad. Rade Ðurić. Užice and municipality of Pirot. which was financed by the European Union. The sample for Serbia contained local self-governments with populations above average in Serbia. gathering of information that can indicate existence of conflict of interest in 5 towns and 3 ministries and an analysis of applied procedures.
ranging from serious delay by the Parliament to elect Committee members to jeopardizing financial and operative independence by cutting financial resources necessary for its work. An uninhibited conflict of interest is certainly one of the main causes of corruption. with all deficiencies of this Law and problems in its implementation. enumerating exceptions envisaged by the Law. Consequently. The joint conclusion. pertaining to Serbia. avoidance of the Government to ensure proper working conditions to disrespect of its recommendations by the highest state bodies. Croatia and Bosnia and Herzegovina. Executive summary To deal with the fight against corruption is to deal with its sources whenever they are possible to identify. Research results have been presented to the general public in all three states participating in the BACCI project. The Law envisaged ways of resolving conflict of public and private interest. an obligation was introduced for officials to report presents they receive in their official capacity. The Republic Committee was exposed to numerous obstructions in its work. regulated transference of management rights in private firms owned by public officials and setting up private firms by public officials while they hold public office. However. This fact enabled public officials who infringed the Law not to be subject to any formal sanction. The short history of adoption and implementation of regulations pertaining to conflict of interest in Serbia (since 2004) testifies about society’s need to tame abuses of power by public officials but even more about the strong resistance of public officials against imposing any limitations to their power. In terms of sanctions. that its baleful consequences do not have sufficient media attention and that in all three countries the role of the general public as one of main correctives for addressing the problem of conflict of interest is not sufficiently affirmed. 76 Balkan Anti-corruption Civic Initiative . is that broader public is not aware of conflict of interest as an important source and element of corruption. since in a general atmosphere of distrust in political parties and state institutions. The same Law envisaged establishment of the Republic Committee for Resolving Conflict of Interest as an independent body in charge of implementing the Law. practically there was nothing to lose anyway. It was the first time a law regulated conflict of interest problematic in detail. including cooperation with the Commissioner for Information of Public Importance and Personal Data Protection. the work of the Republic Committee has managed to ensure relatively high level of observance of formal obligations of submitting assets declarations and presents by public officials.with legal and institutional framework pertaining to conflict of interest and the Law on Free Access to Information of Public Importance. the only method the Republic Committee had at its disposal to sanction behaviour not in accordance with the Law were recommendations. Furthermore. but also missed to make those declarations public. prohibited accumulation of public functions. there was no threat of the loss of political support as a form of sanction. The first Law on Preventing Conflict of Interest in Discharge of Public Office was adopted by Parliament of the Republic of Serbia in 2004. making room for further improvements in the system of control and prevention of conflict of interests. obliged public officials to submit assets declarations.
it is possible to jeopardize their independence with such acts of abolishment and law amendment. Considering that many independent bodies in Serbia do not have constitutional treatment. An important tool for establishing public control over the work of public officials. the failure to report or false reporting of property has been criminalized. It is very clear that in this way all protection of independence of the Republic Committee was removed until it was abolished and that great damage was done when it comes to citizens’ trust in independent control and regulatory bodies. given that before it there are as much as 7. but it is not certain when the Constitutional Court would rule on the matter. Public information. establishing. Additionally. after only a few months. also as it pertains to conflict of interest. Instead. is information held by a public body. Republic of Serbia 77 . thus also introducing the possibility of including broader public in the task of preventing conflict of interest. in comparative cases. which. 2010 when the Law on the Agency was due to come into force and the Agency to begin its work. is free access to public information. Since the beginning of its work. it faced first significant resistance of ruling political parties. the Agency has placed emphasis on conflict of interest. the Agency focused on controlling the ban on accumulation of public offices. which was impermissible under the first version of the Law. In this regard.However. The Law envisages that the Republic Committee continue to operate until January 1. decision was made to abolish the Republic Committee for Resolving Conflict of Interest and to replace the Law on Preventing Conflict of Interest with the Law on the Agency for the Fight against Corruption. often proved to be the strongest mechanism of control. created in the work or in connection with the work of a public body. The Agency has filed request for assessing constitutionality of these amendments to the Constitutional Court of Serbia. including anonymous seekers of information. The right to free access to public information is entitlement of everyone. The Law on Free Access to Public Information (adopted for the first time in 2004) in Serbia is one of the most progressive laws of this kind in comparative practice and its implementation has ensured efficient access to information held by public authorities. which was not the case under the previous Law. register of property owned by public officials. in terms of this Law. Moreover. Considering that consistent implementation of the ban on accumulation of offices contravenes political interests of ruling political parties.000 unsolved cases currently piled up. after merely four months since the beginning of implementation of the Law on the Agency for the Fight against Corruption. after only a couple of months of its work. the Parliament adopted amendments to the Law enabling certain categories of public officials to hold several public offices at the same time. The Law on the Agency somewhat upgrades this area by introducing the Agency’s obligation to publish assets declarations submitted by public officials. The change introduced by implementation of this Law in the work practice of public authorities can practically be described as revolutionary. contained in a certain document and pertaining to something which is in the interest of the general public to know. The Agency for the Fight against Corruption has taken over area of jurisdiction of preventing and controlling conflict of interest in 2010. the legislator in Serbia did not opt for gradual and continual upgrading of the system of preventing and controlling conflict of interest.
the public has fully learned to exercise this right.28 Within our sample. Complete data-base on financing of NGOs from the budget of the Republic of Serbia in the period 2008-2010 can be found on website of the Centre for Development of Non-Profit Sector: http://www. or shortly after that deadline. delivering information within 15 days (sometimes grudgingly or unpleasantly expressed by the person in charge of dealing with requests for free access to public information. in the city of Belgrade). making it also popular among journalists and the general public. Without such reports on project realization. the greatest problem is inaccessibility of project reports by publicly financed civil society organizations (and often. Financing civil society organizations is another field of unrestricted conflict of interests. it is not possible to determine what effect allocated funds have achieved or what exactly they have been spent for. However. The institutions which received requests for free access to information of public importance within the BACCI project have mostly delivered requested information within legally envisaged deadlines. Almost all ministries at the national level. Almost seven years after the Law had been introduced. secretariats in AP Vojvodina Government and local self-governments have famous 481 budgetary line under which donations to civil society organizations are made. only the Ministry of State Administration and Local Self-Government did not have funds earmarked for financing work of civil society organizations.crnps. their inexistence). their disbursal is not subject to control to which direct budgetary allocations are subjected. Local self-governments were more efficient.The Law has established the Office of the Commissioner for Information of Public Importance and Personal Data Protection27 as the second instance of appeal. since funds are also allocated under the same budgetary line to upon the requests by NGOs. both narrative and financial. Once funds are received by sports clubs. this is not an exclusive method. Even when public announcements are made in accordance with transparent and clear procedure. which would save time and money in case somebody else requests the same documents. it was evident that public bodies do not have sufficient human and technical capacities to respond to requests which require sending large number of documents. The models in accordance with which funds are allocated to organizations differ from one body of government to another and are often combined.rs/nvobudzet Balkan Anti-corruption Civic Initiative 78 . because accessible information about the work of public bodies is insufficient and they are inefficient in placing scanned documents on their web sites. An efficient and dedicated work of the Commissioner and the team working in his Office has ensured high level of exercise and protection of the right to free access to public information. this collusion of sports and politics is still perceived by most citizens as a positive thing rather than as a source of major corruption. However. it is mostly very difficult to find connection between announcement propositions and goals which government wants to achieve through partnership with civil society organizations. which receive budgetary funds almost always without public announcements.g. Another important problem that has been noted is overlapping of political offices and positions of authority in sport clubs. e. This was also ensured by engagement of civil society organizations which have been intensely exercising this right since the very adoption of the Law. Unfortunately. However. 27 28 Since the Law on Personal Data Protection was adopted. his full title is the Commissioner for Information of Public Importance and Personal Data Protection. This is primarily because documents do not exist in an electronic format. Competitive announcements for financing of projects by civil society organizations are also often made. without clear criteria.org. while ministries delivered information within extended deadline of 40 rather than 15 days.
000 inhabitants of Serbia.e. Such practice enables using media for promotion of ruling parties. However. given that conflict of interest is systemically integrated into media financing from budgets of various levels of government. The media are often financed so that individual budgetary decisions of local self-governments name private media as recipients of public financing (which is not in accordance with the Budget System Law) as well as sums to be allocated to them. compared to full suspension of media independence. Republic of Serbia 79 . but also competent institutions that are supposed to oversee observance of the Law. the Autonomous Province of Vojvodina and local self-governments. Those commissioning public procurement are most to blame for this state of affairs. misuse of public funds. suspending any media independence. the State Audit Institution and budgetary inspectors and on the basis of imperative of protecting public interest. leaving the public procurement system without effective control. is. conflict of interests is extremely difficult to prove on the basis of publicly available information. members of members of steering boards and management (which is publicly accessible information). the Public Procurement Office and the Ministry of Finance. only on the basis of names of public officials and names of persons included in planning and realization of public procurement or names of bidders in public procurement procedures i. NGOs. their owners. the way it is defined under the Law on the Agency for the Fight against Corruption. Conclusions of analysis suggest that existing legislation in Serbia aimed at eliminating risk of conflict of interest in public procurement procedure is largely satisfactory and that the basic problem lies in implementation of legal provisions. public prosecutors. However. leaving also room for misuse of public funds. It showed that without insider information. Even though sums at the level of individual media are relatively small (especially at the local level) total public funding for media is significant allocation. it is very difficult to ascertain existence of conflict of interests and then measure effects or isolate consequences of conflict of interests in public procurement.031 media registered in Serbia means that there is one media per each 7. is thus pointless because the Law does not envisage such systemic conflict of interest and consequently does not sanction it. However. Therefore huge number of media in selected local self-governments are almost without exception financed from the budget of the Republic. other legal persons etc) from the list of those authorized to initiate proceedings for protection of public interest Researching conflict of interest in the field of public financing of media on the selected sample of ministries and local self-governments has proved to be rather futile. Researching conflict of interest. Law infringements and criminal acts should be sanctioned on the basis of proceedings initiated by competent prosecutors. which should be monitored by competent public attorneys. The numbers speak for themselves: 1. potential media audience in Serbia significantly dwindles. we dare say. When the number of real consumers of media contents is taken into account. Some contract provisions which we have had insight into practically prove that media editorial policy has been transferred to local self-government bodies. An important shortcoming of the existing Public Procurement Law is that it excludes subjects which are not bidders (natural persons.Conflict of interests is a good indicator that may indicate corruption in the field of public procurement. practice of making public announcements for media projects is also becoming increasingly frequent. All aforementioned perform this control function unenthusiastically and insufficiently. a lesser evil.
The problem to determine conflict of interest stems from inexistence of reliable data on the basis of which this conflict could be established. A much stronger finding to emerge from this report is the one indicating that conflict of interest is still a very unfamiliar category in Serbia.” This concept is transferred to Serbian legislation. despite all methodological difficulties. The Law obliged officials to discharge their public offices in a manner that will not subject public interest to their private interest and in a manner that will cause no conflict between them. These difficulties are not a result of weakness of applied methodology but the very nature of conflict of interest that was supposed to be researched. the impartial and objective performance of his or her official duties. For the first time in Serbia. In addition to unclear criteria for determining conflict of interest. 80 Balkan Anti-corruption Civic Initiative . For the first time. whereby public interest has not been defined by any legal act in Serbia. especially since the adoption of the Law on the Agency for the Fight against Corruption and the establishment of the Agency in 2010. 29 Official Gazette of the Republic of Serbia No.Monitoring conflict of interest in state and local self-government bodies has proved to be formidable task for civil society organizations. Definition of conflict of interest in Serbian legislation is in accordance with high standards of contemporary systems. Numerous cases of conflict of interest we have identified in our research and have reported here are telling in this regard. The officials slowly learn to recognize it. the problem is also unclear definitions of notions and institutions that should be used to identify conflict of interest. only a handful of officials are able to define it or enumerate key obligations stemming from segments of the Law regulating it. but is defined as a conflict of private and public interest. the Law defined (or attempted to define) conflict of private and public interest as the one which occurs when an official has a private interest that affects or can affect discharge of his public duties. Serbian legislation pertaining to conflict of interest is very recent. However. An important obstacle noted in this research is that public officials are obliged to report property but not to report interest. Analysis of legal and institutional framework in the field of conflict of interest BACCI project methodology departure point was the definition of the conflict of interest provided in the Recommendation R (2000) 10 by the Committee of Ministers of the Council of Europe saying that “Conflict of interest arises from a situation in which the public official has a private interest which is such as to influence. Even though provisions aimed at preventing conflict of interest have existed in regulations adopted earlier. the Law on Preventing Conflict of Interest in Discharge of Public Office29 (adopted in 2004) is the first piece of legislation that has systematically regulated this area. 43/2004. rights and obligations of public office holders in case of existence or possible existence of conflict of their private interest with the public interest have been specified. or appear to influence.
it is important to note that many officials have remained outside the purview of this Law. The Law on Preventing Conflict of Interest in Discharge of Public Office regulated when and in what manner a public official can discharge another public function. Republic of Serbia 81 . Moreover. enumerated individual situations in which a public official can be banned from exercising his public function to accomplish his private interest. public prosecutors and deputies of public prosecutors. at least on paper. and was among the first bodies set up during the new wave of setting up independent bodies after democratic changes in Serbia since 2000. misdemeanour judges. This regulation was aligned with all the standards of United Nations Convention Against Corruption. towns or the city of Belgrade. it did not regulate conflict of interest of officials named to posts in steering bodies of institutions and other organizations the founder of which was the Republic of Serbia. The idea of the legislator was to set limits to holding more than one public office. while financial independence was supposed to be ensured by providing financial means envisaged under the financial plan of the Republic Committee. institutions and other business entities. observance of international standards was facilitated by the fact that Serbia was among the last states in Europe to adopt legislation regulating conflict of interest and that international practice has already become well established.g. it proved to constitute a valid framework for the body in charge of implementing the Law to distinguish between public and private interest in concrete cases as well as to provide further specification of general rules. the autonomous province. municipalities.Even though provision on the basis of which public office holders and control bodies were supposed to identify conflict of interest was not very precise or detailed. obligation was introduced to report presents obtained in connection with holding public office as well as the rule prohibiting receipt of such presents except when they are protocolary and it was regulated that a present a public official can keep cannot be worth more than half of average monthly salary in the Republic. Personal independence was ensured primarily through the manner of electing Committee members and clear rules for their replacement. and operative independence was supposed to be ensured by complying with all technical and personnel requirements for unhampered work of the Committee. The Republic Committee had all attributes of independence. but avoided to make those reports public. the autonomous province. towns and the city of Belgrade. However. standards of the Council of Europe and other relevant international standards regarding regulation of conflict of interest. towns and the city of Belgrade and bodies of public enterprises the founder of which was the Republic of Serbia. The Law obliged officials to submit reports on property. The body in charge of implementing the Law on Preventing Conflict of Interest in Discharge of Public Office was the Republic Committee for Resolving Conflict of Interest – an independent body set up under this Law. The Law did not pertain to judges of the Constitutional Court. One deficiency is that it failed to regulate all forms of conflict of interest treated in these documents (e. employment of public officials in the private sector). regulated procedure when a public official has a private interest in adopting decisions. appointed and persons named to a post in the bodies of Republic of Serbia. the autonomous province. to judges in general. Furthermore. Although this definition encompassed the number of public officials that surpassed control capacities of the Republic Committee. municipalities. municipalities. except in cases stipulated by the Law. transferring management rights in private firms (co)-owned by public officials and participation of public officials in management and supervisory bodies of public enterprises. The Law contained definition of a public official which included elected.
issues such as party influence upon employment. In addition. its enhancement or reduction. The first regulation on preventing conflict of interest also had its obvious flaws. An official elected to public office directly by citizens could be sanctioned only by non-public warning and publication of a decision about infringement of the Law and in case an official was elected to his or her office by a body directly elected by citizens could be sanctioned by publication of a recommendation that he or she should resign. but not to declare their interests. needs permission of a body in charge of preventing conflict of interest). Numerous cases of full ignorance of measures meted out by the Republic Committee. Moreover. However. which persists to this day. In practice. although comparative practice has shown that this was the most important component of control. It has also introduced an obligation to submit assets declarations. rather than the relationship between private interest of an official and public interest he or she was entrusted to accomplish or protect. asset declarations have not been published so controlling role of the public was missing. It had at its disposal the possibility to mete out the measure of non-public warning and the measure of publication of a recommendation for dismissal in case Law provisions were violated by an official appointed to a post of performing public function. The most important observed shortcomings stem from two basic sources: negligence to regulate or deficient regulation of certain aspects of conflict of interest by the Law and lack of political will to implement rules about preventing conflict of interest. whereby it finally removed last vestiges of independence of the Republic Committee. the Government. Practically it was left to the Republic Committee to monitor the situation regarding property. the political will for its implementation has never existed. with the support of international organizations. financing of media and civil society organizations 82 Balkan Anti-corruption Civic Initiative . We have indicated some of them in this report given that it also covers the period when this Law was in effect. has announced that the Committee would be abolished and instead an Agency for the Fight against Corruption established. public procurement. particularly regarding resolving conflict between irreconcilable public office and performing kindred public and private functions have also been identified in this project. the Republic Committee’s powers were modest. warning numerous officials about situations in which they would be violating the Law on Preventing Conflict of Interest.Regarding the sanctioning practice. Despite all obstacles. An important shortcoming of the Law was that it omitted to introduce pantouflage (a period in which a public official is not allowed to perform certain activities closely related to the public office he holds or in order to do so. with all shortcomings of the Law itself. after less than full four years of the work of the Republic Committee for Resolving Conflict of Interest. the Republic Committee shared the fate of almost all newly set up independent bodies in Serbia: appointment of Committee members was seven months overdue. To seal the whole thing off. the Republic Committee has managed to become established as an institution that has introduced new culture in the way state bodies function. The Law obliged public officials to submit reports on their property. permanent offices and work conditions for the envisaged number of employees have never been provided and financial independence was jeopardized by serious amendments to financial plans the Committee had proposed. introduced by the publicity of property or interest cards.
R (2000) 10 and GRECO etc).(which was the object of our research) were fully out of reach of the Republic Committee. organization and manner of work of the new body – the Agency for the Fight against Corruption. legal position. No. a public official is “every elected. The Law defines corruption as „the relationship based on misuse of official i. Significantly better results could have been accomplished by upgrading areas of jurisdiction and capacities of the Republic Committee and observing its recommendations. in order to acquire personal benefit or benefit for another. 97/2008 and 53/2010. Had the political will for setting up the Agency for the Fight against Corruption really been that strong. As has already been mentioned. Republic of Serbia 83 .31 However. the Strategy has served as a basis for enactment of the Law on the Agency for the Fight against Corruption. e. can affect or seems to affect official’s acting in the capacity of a public official or line of duty. CoE recommendations. 2010.fosserbia. definition of public official in terms of this Law is also of importance. but this document certainly does not envisage infringement of independence of already established anti-corruption bodies. The National Strategy for the Fight against Corruption (2005) envisages setting up an independent and autonomous body as one of outposts of the fight against corruption in Serbia. Belgrade.“ The Law gives a definition of conflict of interest as: “a situation in which an official has a private interest which affects. institutions and other organizations the founder or member of which is the Republic of Serbia.g. which recommend establishment of one or several bodies for the fight against corruption. 2008. This Law regulates establishment.org. the Law on Preventing Conflict of Interest has been replaced with the Law on the Agency for the Fight against Corruption30 in 2008. a local self-government unit or other body elected by the Parliament. See more in: A Commentary on the Draft Law on the Agency for the Fight against Corruption. the autonomous province. the Fund for an Open Society. One of the novelties in terms of preventing conflict of interest introduced by the Law on the Agency (compared to the Law on Preventing Conflict of Interest in Discharge of Public Office) are clearer definitions and introduction of new criminal act related to conflict of interest – failure to submit assets declaration or false reporting of property. which is one of basic preconditions for its unhindered work. before its imminent disbandment. procedure and decision-making in cases of Law infringement and introduction of integrity plans. www. The Agency is also charged with controlling financing of political parties. even though these constitute some of the most important mechanisms of state capture. The lawmaker has relied on comparative practice and international anti-corruption documents (UNCAC. leaving to the Republic Committee. the autonomous province. social position or influence.“ For purposes of our research. However. in private and public sector. to deal with preventing and resolving conflict of interest for full year and a half.“ 30 31 Official Gazette of the Republic of Serbia No. this Law entered into force only on January 1. which was done in the case of the Republic Committee. rules regarding prevention of conflict of interest in holding public office and reports on property submitted by public officials. Namely. but this matter is regulated by a separate Law.e. local self-governments and bodies of public enterprises and companies. appointed or person named to a post in bodies of the Republic of Serbia. it could have entrusted to the newly formed Agency all other areas of jurisdiction envisaged under the current Law on the Agency and the Law on Financing of Political Parties. The Law on the Agency envisages high level of Agency’s independence. and area of jurisdiction. Serbia. in a way which jeopardizes public interest.
besides giving the public the chance to become informed about important issues in administering public affairs.000 unsolved initiatives and constitutional complaints have piled up for it to resolve. The „demonstrated“ political will to come to grips with corruption manifested in adoption of the Law and establishment of the Agency is mostly declarative and not present in real life. In order to ensure exercise of the right of access to public information under this Law. Analysis of the implementation of the Law on Free Access to Information of Public Importance The Law on Free Access to Public Information.000 Euros). independent in acting upon its area of jurisdiction. Thus for the first time in Serbian legislation criminal act of failure to submit assets declaration or giving false data on property has been introduced. specifying mostly fines of up to a million dinars (around 10. The Agency has filed the request to assess constitutionality of adopted amendments. the Parliament amended the Law.e. namely non-public and public warnings and.The Law envisages various sanctions in cases of its infringement. Thus only a few months after the Law on the Agency for the Fight against Corruption took effect. also ensures efficient control of work of public authorities and makes public officials and state employees accountable in discharging their duties. the most serious offence envisaged by the Law on the Agency. Furthermore. ban on holding public office in a specified period (up to 10 years). including a prison sentence but also a sanction of stepping down from public office i. introduced for the first time in Serbian legislation the right of citizens to free access to public information. sanctions are specified for legal persons if a public institution disobeys obligation of cooperating with the Agency. loss of employment. 84 Balkan Anti-corruption Civic Initiative . the Commissioner for Information of Public Importance has been set up as an autonomous state body. 54/2007. The legal consequences are also specified. which is its main advantage compared to previous legislation. given that at the moment some 7. 32 The Law on Free Access to Public Information („Offical Gazette of the Republic of Serbia“ no. The Law on the Agency for the Fight against Corruption has also kept so-called „soft“ sanctions. allowing certain categories of public officials to hold more than one public office. finally. from the very start the Agency has faced strong resistance of ruling parties towards consistent implementation of Law provisions. This right enables citizens to acquire information held by public authorities regardless of capacity of seeker of information or purpose of acquiring information. However. Free access to information. in accordance with the highest standards in this area. 104/2009 and 36/2010). but it is difficult to say when the Constitutional Court of Serbia would rule in this matter. 120/2004.32 adopted in early November 2004. reduces risk from abuse of official position and improves observance of human rights and freedoms.
the date of creation of information. electronic media etc).e. whether it is a body of public authority or some other person nor the manner in which information is preserved (paper. Recent changes and amendments to the Law have advanced mechanisms of imposed implementation of Commissioner’s decisions in order to enhance efficacy of exercise of the right to free access to public information. in cases they want to deny the right of access to public information have most often been shielded by the fact that sought information is not contained in one document but in several documents and that it was necessary to engage additional material and human resources in order to deliver the sought information. Such solution ensures favourable position for seekers of information since they are not obliged to know which document contains the sought information. If the request pertains to information that can be supposed to be important for protection of life or freedom of a person or jeopardizing or protecting health of population and environment. 15 days at the latest from the date it received the request. under the Law. The Law on Free Access to Public Information has avoided mistakes of some other models of access to information by distinguishing between information and document. the right to have information accessible by enabling an insight into the document containing the information. it is not important what is the source of information. in the given circumstances. Previous practice in the exercise of right to public information has shown that bodies of public authority. tape. fax. Thus seeker seeks information and a body of public authority provides all documents containing the information. to provide information to the seeker without delay. One of the most important is the Office of the Commissioner which. For information to be considered public information. The Law determines mechanisms which are at the disposal of the general public in order to exercise the right to access to information important for control of the work of a body of public authority in a democratic society. The Law envisages an obligation of state bodies to publish a bulletin about their work on the so-called proactive basis. in the best way ensures unhindered exercise of the right to free access to public information. to issue him a copy of that document 48 hours at the latest since the receipt of such request. film recording.The right to access information of public importance encompasses: the right of seeker of information to be told whether a public body possesses certain information. Such conduct is certainly not in accordance with the Law. thus making accessible a certain set of information. Public information. Only in exceptional cases. the Commissioner gives instructions according to which these bulletins should be made and published. The body of public authority is obliged. a public body has to inform the seeker about possession of such information and place the document containing such information at his disposal i. contained in a certain document. In connection with this. the right to a copy of the document and the right to be delivered the document per mail. the manner of obtaining information nor other similar characteristics of information. is information held by a body of public authority. in terms of this Law. electronic mail or in other ways. Republic of Serbia 85 . at least once a year. created in the work or in connection with the work of the body of public authority. a body of public authority can extend this deadline to 40 days. but then it has to inform seeker of information accordingly.
only the Ministry of State Administration and Local Self-Government has submitted all requested information within the set deadline in an electronic format and by mail (even though it was requested only in an electronic format). 2009 period. Ministry of State Administration and Local Self-Government and Ministry of Health. public procurement procedures. Special requests for access to information of public importance. in its response. Novi Sad. 2004 – December 31. as well as names and surnames of directors and members of steering and supervisory boards of the said legal persons. the other two Ministries and local 33 34 35 The selected ministries are: Ministry of Finance. Such response is not in accordance with the Law given that what was requested from the Ministry is not a concrete document. However. Official Gazette of the Republic of Serbia No. under the Law on Public Procurement. requests for access to public information have been sent to selected ministries33 and local self-government units34 in Serbia. This Ministry is in charge of control of implementation of the Law on Free Access to Public Information but also represents an example of good practice when it comes to acting upon requests for free access to information. in order to collect information that could indicate existence of conflict of interest. 116/2008 86 Balkan Anti-corruption Civic Initiative . attempted to avoid submitting requested information. Namely. have been made to the Public Procurement Office and content of the requests pertained to quarterly reports on conducted public procurements (which aforementioned bodies of public authority. charged with making state payments including payment of salaries to state administration employees. The selected local self-government units are cities of Belgrade. Kragujevac and municipality of Pirot. job descriptions within ministries and local self-governments and procedures of allocation of budgetary funds to media and civil society organizations made by selected ministries and local self-government units.Free Access to Information in the BACCI project As a part of the BACCI project. In addition to said information.“ It is important to note that the State Treasury operates within this Ministry. The Ministry of Health has also submitted all requested information by mail with an insignificant delay. in accordance with project methodology. The Ministry has failed to submit data about persons employed in the Ministry of Finance in the 2004-2008 period. but information. The content of requests pertained to employment procedures. on the other hand. This Ministry has only submitted information about job descriptions and the conducted public procurements. local self-government bodies were also requested to submit lists of legal persons (including media) founded by local self-governments. connected with conducted public procurements in selected ministries and local self-government units. The Ministry of Finance. Moreover. the Ministry responded that the request they had received was not specific enough and that it was necessary to make it more specific. Furthermore. this Ministry said that: „The Ministry of Finance does not possess a document containing list of all persons that have been employed at the Ministry of Finance in the January 1. offering an excuse that has already been mentioned as textbook example of a way to avoid acting upon the Law on Free Access to Public Information.35 are obliged to submit to the Public Procurement Office). Užice. The requests sent to ministries were met with timely responses that they needed the additional deadline of 40 days to submit the requested information.
AuthorityNumber of requests Complete answer Incomplete answer Refused/Not Answered Ministry of Finance431Ministry of State Administration and Local Self-Government44Ministry of Health44Belgrade22175Novi Sad2222Kragujevac2222Užice 2222Pirot222011Agency for Fight against Corruption1Public Procurement Office22TOTAL12511717Access to information in BACCI project Conflict of interest in employment practices The methodology at the disposal of civil society organizations for discovering conflict of interest in employment practices is very modest. Local self-government bodies in which the monitoring project has been carried out have shown high level of observance of the Law on Free Access to Information of Public Importance. In addition. but this has not happened. some local self-government bodies have submitted information which under the Law on Protection of Personal Data is considered personal data that should not be publicly accessible. The only information that has not been submitted concerned job descriptions in local self-government bodies in Pirot. The Republic Committee confirmed existence of conflict of interest in his case and called on Stevanović to resolve it.self-government bodies have not had any difficulty understanding the same request and have delivered the sought information. Thus Veroljub Stevanović. Consequently the methodology of the BACCI project applied in Serbia in this segment has not led to spectacular discoveries of conflict of interest at the sample of public authority bodies analyzed. Obviously. it is necessary and urgent to train officials in charge of acting upon Law on Free Access to Public Information about conduct with personal data. although all other documents have been submitted in an orderly manner. Firstly. cases of conflict of interest of highest public officials are notorious and do not represent exclusive information. Moreover. Local self-government bodies have shown greater urgency in forwarding sought information and confirmed the thesis about existence of well-established and functioning system of free access to public information in Serbia. There are at least two reasons for this. in their desire to submit the fullest possible documentation. This displays lack of both human and technical capacities of local self-governments to scan and forward documents in an electronic format. When acting upon requests for access to information only in one case an extended deadline has been requested. even though we have requested documents in an electronic format. Stevanović was in the conflict of interest situation as a part of the ruling majority at the Republic level in two Republic of Serbia 87 . the mayor of Kragujevac and Member of the National Assembly of the Republic of Serbia for several years has been breaching regulations about conflict of interest. This is all the more true because it concerns protection of data possible misuse of which could inflict infinite harm to persons whose personal data have been made public. Local self-government bodies have delivered sought documents exclusively in print format.
the public was also not too sensitive about infringement of rules in this area. More likely. We have been able to observe similar models of conduct in many transition countries. and effective implementation of sanctions for corruption would potentially endanger large segments of the electorate. These two models have enabled uncontrolled management of public affairs and have left room for political party-affiliated employment in government bodies.“ In coalition governments (and all government since introduction of multiparty system in Serbia have been coalition governments). in concrete case. whereby one party does not interfere in the affairs of the other political party and the work of the ministry that „belongs“ to it. Open competitions serve rather as a cover for conflict of interest and negative politicization of public sphere. it is important to note that besides inexistence of political will for fight against corruption or. especially in cases of transition laggards. 88 Balkan Anti-corruption Civic Initiative . or they reflect the coalition structure with predominating role of one political party in the particular ministry. However. Even in well-ordered democratic systems it is quite normal for political parties to compete with their programs for office and if they seize power. politicization of public sphere in Serbia has features of the so-called „state capture. public enterprises and institutions. preventing conflict of interest.terms in office. ministries are either „divided“ among coalition members. regardless of the fact that conflict of interest is most often „a hallway to corruption. the assumption being that know best how to implement the program that has won popular support at the elections. This pattern of behaviour and an ensuing system of „value“ implies deeply politicized state and society. As an illustration in the next table it could be seen that even organizing open competitions for appointment of managers of public enterprises is not guaranteeing depolitcization. public enterprises and institutions is employment that takes into account one’s party membership card – party cronyism.“ It is difficult to believe that citizens are not aware of potential damage in such situations and that this is the reason for a lack of political sanction for breaching the Law. what lies behind is systemic corruption which forces majority of citizens to corrupt behaviour. An important aspect of conflict of interest in employment practices in government bodies. to assume responsibility for managing public affairs by appointing people from their ranks to public office. distribution of public office (defined so under the Law on the Agency for the Fight against Corruption) as party spoils. without any control. However.
enabling public officials to legally (but not legitimately) benefit from potential services they had previously made to subjects from the private sector in their capacity of public officials or in some other way use information or advantages they have had at their disposal during their tenure. Bosnia and Herzegovina. Given that the said Law was valid throughout the period covered by our research. This type of conflict of interest has been identified in the analyzed sample. Guzjan potentially stands in the conflict of interest read that he “will be exclusively in charge of markets of Croatia. It is only with coming into force of the Law on the Agency for the Fight against Corruption that pantouflage was introduced (temporary ban to accept employment or enter business cooperation with private subjects operating in an area in which an official had held public office). which are excise goods in Serbia.Authority Ministry of Finance Ministry of State Administration and Local SelfGovernment Ministry of Health Belgrade Novi Sad Kragujevac Užice Pirot Agency for Fight against Corruption Public Procurement Office TOTAL Number of requests 4 4 4 22 22 22 22 22 1 2 125 Complete answer 3 4 4 17 22 22 22 20 Incomplete answer Refused/Not Answered 1 5 1 1 2 117 1 7 Another major aspect of conflict of interest in employment practices concerns public officials who go from public into private sector after they complete their career as public officials (possibly to run their own businesses). The ample data about the number of employees. took employment in late 2009 (shortly before the Law on the Agency came into force) in the company Philip Morris. The State Secretary in the Ministry of Finance in charge of Excise Tax. descriptions of their jobs and their names in the course of 6 years (2004-2009) Republic of Serbia 89 . Albania and Macedonia and will not be covering Serbia and Montenegro. This aspect of conflict of interest was not treated by the Law on Preventing Conflict of Interest in Discharge of Public Office. discovered cases of this nature were not illegal. Janko Guzjan.” In this segment one has to mention serious obstacles to identify conflict of interest in employment practices and limitations of the chosen methodology. The response of Philip Morris to objection that Mr. which produces and sells tobacco products.
journalists. The ruling political parties have on several occasions blocked proposals to introduce at least basic elements of that protection. Not even a popular initiative to amend the Law on Free Access to Information of Public Importance to introduce protection of whistleblowers. even ones made anonymously. Until whistleblowers obtain proper legal protection.“ and include human rights activists and various professional associations. religious communities. This situation is also mentioned in Recommendation No R (2000) 10 which states that most often. But things can also be viewed from a different perspective. lovers of classical music and all type of sports organizations. have different legal systems. and to assume responsibility for investigating conflict of interest and its consequences. 90 Balkan Anti-corruption Civic Initiative . The system of protection of whistleblowers does not exist in Serbia and this situation is a serious hindrance for advancing fight against corruption. as well as EU states. including conflict of interest. The documents delivered by monitored government bodies could be used to check this information and corroborate the arguments. This is not the case only in the Western Balkans. this topic is taken up by a very small number of non-government organizations. different systems of financial control. backed by 35. what criteria were employed to make hiring decisions etc.000 signatures collected by non-governmental organizations. And fight against corruption is one such goal and value that should be promoted. The reasons are numerous – Balkan states. However. an official who is in conflict of interest is the only person to know that. is an issue addressed by independent state institutions and it may seem that there is not much room for CSOs to engage in monitoring the work of these institutions. the greatest potential of Western Balkan countries are actually those heterogeneous groups of individuals which have come together in order to accomplish some common goals and promote (and protect) common values. but also in the EU. on the basis of this information it is not possible to conclude whether there was conflict of interest in employment practice of a given government body. the Agency for the Fight against Corruption will have to be more attentive to reports about conflict of interest. The information obtained provided a very interesting material that yielded a lot of other information and possible conclusions – ranging from whether number of employees rose or fell. has persuaded the ruling parties in the Parliament to adopt those provisions. Civil society organizations and conflict of interest Regardless of how broadly we may understand the very term „civil society. However. as well as cultural associations and artistic groups. what educational structure of the newly employed was. NGO or media representatives.obtained by the project team from selected monitored government bodies do not contain information or even a hint whether some of employees have been accorded their status on the basis of conflict of interest of human resource services of these government bodies. and perception of corruption is different from one country to another. Corruption. trade unions and media. associations of bee-keepers. The project team was able to acquire information about potential or existing conflict of interest only on the basis of interviews with insiders.
as well as human rights activists. as has already been mentioned. if we were to draw general conclusions on a topic NGOs and Conflict of Interests in Serbia. but it too referred to the region as a whole and not to individual states (three Balkan and one EU state were obligatory) and corruption was not the only topic. it is not to be expected that state will gladly finance organizations which engage in monitoring work of state bodies. but as one of numerous components of good governance. National Councils of National Minorities. namely that creators of calls for proposals do not have an idea about how CSOs could grapple with such a complex problem as corruption. it is easer (and more useful) to call on CSOs to cooperate with local authorities to build partnerships than invite them to „whistle blow“ and stir tensions in already confused and value-disoriented public). religious communities. not as the main goal. • The Law on Sports describes citizens’ needs in terms of sport for meeting of which funds are ensured by local self-governments (the old law). To make things more complicated. „other non-profit institutions. independent or not. the Red Cross. needs and interests of citizens in terms of sport are met using budgetary funds of local self-governments in accordance with the law (the new law). cultural institutions and organizations engaging in cultural activities. No less important is the fact that NGOs often orient their work towards donor announcements which almost never contain a program which prioritizes fight against corruption. the legal framework which regulates financing of NGOs in Serbia and non-awareness of the importance of conflict of interests as a source of corruption. very heterogeneous group including veteran associations. Republic of Serbia 91 . This type of activity is mostly subsumed under good governance. The legal framework regulating financing of NGOs in Serbia Non-governmental organizations in Serbia are. between CSOs themselves there is competition due to large number of NGOs and limited resources for financing their work. Therefore. we would have to repeat some conclusions which pertain to the relationship between the state and the civil society. environmental associations. namely. among media and among state structures at all levels.“ political parties. province and local level). On the other hand. What follows is a brief overview of legal grounds for financing civil society organizations in Serbia from budgets of various levels of government: • Provisions of the Law on Red Cross of Serbia stipulate that exercising areas of public jurisdiction with which the Red Cross is charged and carrying out programs of the Red Cross are financed from the budget of the Republic of Serbia. hunting and fishermen’s associations etc. women’s network organizations. „Our“ EU call for proposals was somewhat an exception. sports associations. activists for protection of consumer rights. but was coupled with fight against human trafficking and fight against organized crime.On the one hand. political parties are also financed from the same budget line as civil society organizations (line 481 at the Republic. organizations of the disabled. It is more acceptable to believe that distrust in CSOs is the reason for lack of anti-corruption programs than to consider a more likely reason. both among the general public. This illustrates lack of trust among donors in CSO contribution to the fight against corruption. budgets of autonomous provinces and local self-governments. However.
067. which is over 70 million Euros.“ This procedure is not centralized in the sense that a separate body deals only with civil society organizations. the funds are allocated in accordance with the „famous“ budgetary line 481 which bears precisely that name – „donations to non-governmental organizations. competent state and local self-government bodies can set aside budgetary funds to construct.366.“ • Finally. various secretariats of towns or budgetary resources of municipalities. the Law on Associations of October 2009 introduces call for proposals as an instrument for „allocation“ of funds „for supporting programs or missing resources for financing programs carried out by associations working in the public interest.“ incorporated in budgets of the Republic. • The Law on Culture envisages that amateur cultural and artistic associations have the status of cultural subjects and that their programs and projects be publicly co-financed.384. It is obvious that broad provisions of these laws and almost nonexistent control of budget disbursal and particularly no control of budgetary spending of civil society organizations leave ample room for conflict of interest.034. legal grounds for allocating funds to support NGOs offer a possibility to wide range of associations to expect or even to request budgetary support for carrying out their programs or projects.817. for NGOs. 92 Balkan Anti-corruption Civic Initiative . At the same time.00 dinars was allocated to NGOs from the Republic budget. it should be mentioned that in 2008 the Republic budget set aside 5. For years now.93 dinars. in accordance with needs and possibilities.• Under the Law on Churches and Religious Communities. • The Law on Financing of Political Parties envisages financing regular work of political parties and costs of election campaigns from public sources. And this would certainly also reduce the room for existence of conflict of interest. The problem of budgetary financing of NGOs is thus not small and simple.628. The influence of executive government on position of employees in state bodies excludes every possibility of establishing a valid system of internal control that would stop allocations which contradict regulations. • One area of jurisdiction of local self-government bodies envisaged by the Law on Local Self-Governments is „to help develop various forms of self-help and solidarity with persons with special needs as well as persons who are essentially in unequal position with other citizens and encourage activities and assist organizations of the disabled and other socialhumanitarian organizations at their territory. In order to gain a rough picture of what these amounts look like. a total of 4.“ As can be seen. The specificity of financing non-governmental organizations in Serbia is the fact that budgets of the Republic of Serbia. maintain and reconstruct religious objects. „churches and religious communities have the right to apply with jurisdictional state bodies and commissions for funds to carry out cultural and scientific programs under the same conditions as other legal and natural persons. In 2009. Autonomous Province of Vojvodina and budgets of towns and municipalities set aside annual allocations to „support non-governmental organizations.
2008 Vodovod Zelenilo Parking servis Gradska čistoća Ada Cinganlija Urbanistički zavod Gradsko stambeno Hipodrom Beograd Gradske pijace Beogradska tvrđava Beogradske elektrane GSP Sava centar Pogrebne usluge Infostan Beograd put TOB DP supported candidate DP supported candidate DP DP DP DP supported candidate G17 plus G17 plus G17 plus G17 plus SPS SPS SPS PUPS supported candidate LDP supported candidate LDP supported candidate LDP supported candidate Party affiliation (press article published before the completion of the competition and based on coalition agreement) Source: Press online. October 18. September 3. 2008 DP DP DP DP DP DP G17 plus G17 plus G17 plus G17 plus SPS SPS SPS PUPS (SPS Coalition partner) LDP LDP LDP Republic of Serbia 93 .Party affiliation (final competition results) Public Enterprise Source: Politika online.
Besides the fact that a lot of money is invested and spent in sports. What those organizations should do with allocated 200.000. one of cornerstones of organized and systemic corruption. politicians and media in awkward and unequal position. is present in financing of civil society organizations in Serbia since its earliest beginnings well before democratic changes in 2000. The most important example of such „usual“ conflict of interest can be seen in financing of sport organizations. It is often the case that regardless of existence or inexistence of call for proposals. Namely. Already in times of former Yugoslavia it was „normal“ for members of e. The grounds for allocating these funds is mostly request from an organization. is nobody’s concern.“ major NGOs which need substantially more resources to carry out their programs. town of Užice did issue call for proposals to finance NGOs in 2009. However. if after the call for proposals announced (if at all) by local self-government some budgetary funds remain. which is the most frequent round sum allocated from local budgets in 2008 and 2009. this way of fund allocation is unfavourable for NGOs themselves in terms of effectiveness and efficiency of their work (although this may not seem so at first sight) and is also completely irrational from standpoint of financial sustainability of CSOs. the disabled or parentless children.000 dinars each (around 2. are particularly often financed this way. Thus the aforementioned public.000 dinars to carry out project activities. and five funding requests arrive. recognized as a key corrective. the consequence of which is lack of public control over decision-making and work of public sector. the funds will be equally divided among all organizations that requested funding.000 when their 12-month project budget requires 800. but precisely the situation where it is not possible to distinguish potential from real conflict of interest makes both NGOs and local self-governments potential victims of „witch hunt“ (for example. Then as now. it should also be observed that the bulk of that money has poor visibility in public.g.Relationship of the state towards civil society through the prism of conflict of interests Conflict of interests. becomes the least promising future of the fight against conflict of interest. sportsmen were considered a sort of „national treasure“ or – a national brand. some local NGOs are allocated 200. 94 Balkan Anti-corruption Civic Initiative . around which a lot of money revolves. but also allocated funds when requested so by organizations). It is not quite easy to see where conflict of interest lies here. Unequal treatment and non-transparent allocation of budgetary funds to non-governmental organizations brings organizations. However. in order not to lose potentially valuable voices at local elections.000 Euros). while the allocated amount is a simple result of the number of requests and the remaining money for NGO donations in the local budget. The second example of potential conflict of interest is financing numerous local NGOs treating equally each and any one of them. especially football clubs. which is in the public eye and which is everybody’s concern. In this way organizations helping vulnerable groups of people or „well-known. this is a political decision to grant funding to some organization because the government does not want to be seen as one which does not support Roma. let’s say. 1.000 dinars. Federal Executive Council or party leaders of Republics and Provinces to sit on steering boards of sport.
budget. who has given the permission for such a thing and what are legal grounds for such financings is mostly impossible or at least is very difficult to find out.“ After budgetary funds have been allocated on the basis of call for proposal results. NGO and media donations (budget disbursal). At the same time. only on the basis of names of public officials and names of persons included in planning and realization of public procurement or names of bidders in public procurement procedures i. it is speculated that it equals roughly a billion Euros at the annual level in Serbia. why they are financed unrelated to any call for proposals. Even though it is impossible to talk about exact amount which end up as spoils of organizers of corruption arrangements. Public procurement is among the most important sources of corruption in Serbia and a segment of work of public authorities most exposed to corruption. the budget disbursal side shows outlay that for various reasons is not possible to identify in accordance with classifications they are subsumed under and the simplest thing is to subsume them under „other expenditures. tendering documentation.e. successful bidders and property data. pressures are exerted to ensure funds for co-financing or financing of new. The notion of public procurement implies implementation of procedure of acquiring goods. job descriptions. conflict of interests is extremely difficult to prove on the basis of publicly available information. requests or the planned amount of funds earmarked for „NGO donations.“ namely donations to non-governmental organizations. services which will be provided or tasks which are to be carried out for the lowest economic price (price of performing certain tasks. Public procurement has therefore also been subjected to the process of monitoring existence conflict of interest along with monitoring reported property of officials from selected ministries and local self-governments. This is the conclusion of both the general public and expert circles and one present in media almost every day. providing certain services or delivering certain goods) Republic of Serbia 95 . The purpose of public procurement is to acquire the best quality of goods which will be used. Conflict of interests is a good indicator that may indicate corruption in the field of public procurement.Another interesting example of possible existence of conflict of interest pertains to budgetary allocations to non-governmental organizations outside calls for proposals. completely unplanned projects and programs. items and services by legal persons – commissioners (budgetary beneficiaries) through procedures regulated by laws and by-laws which make up the public procurement system. their owners. It showed that without insider information. Whether these are really non-governmental organizations. However. Public procurement in the context of conflict of interests The system of public procurement is one of basic pillars of fight against corruption. it is very difficult to ascertain existence of conflict of interests and then measure effects or isolate consequences of conflict of interests in public procurement. We conducted monitoring of public procurement by checking the applied procedure. members of members of steering boards and management (which is publicly accessible information).
transparency and publicity of the process and equality of all bidders. should be monitored within such more broadly defined context because they make a unique system for preventing corruption. costs. in order to prepare grounds for empirical research involving selected ministries and local selfgovernments. delivery deadlines. In order to explore mutual effects of public procurement and conflict of interests in the best possible way. The Public Procurement Law and other anti-corruption rules incorporate provisions related to prevention of conflict of interests. but also in other segments of the procurement system which precede or follow the very public procurement procedure – from planning to completed realization of concluded agreements. we have made an analysis of laws regulating this area and identified points in the system which could potentially be most exposed to corruption and to which particular attention should be paid. protection of rights of citizens vis-à-vis public administration. Public procurement and prevention of conflict of interest. Those commissioning public procurement 96 Balkan Anti-corruption Civic Initiative . free access to information. Correct conducting of public procurement procedure implies acquisition of precisely needed goods or services through a formalized and regulated procedure which ensures protection of the principle of market economy. Precisely this is the basic link and proximity between public procurement system and prevention of conflict of interests. its goal is to obtain good result for tax-payers’ money as the end result. It is important to bear in mind that potential conflict of interest in public procurement procedures does not occur only in concrete selection of a bidder. This implies economic and efficient work. technological and technical advantages. competition among bidders. Public procurement must avoid „rigged“ procurement to associates. The public procurement system contains points at which its potentially positive effects can be jeopardized by existence of conflict of interests and those points have to be particularly protected.which is possible to attain. Therefore great hopes which some government bodies pin in combating corruption by appointing external control to witness opening of bids in public procurement procedures may prove to be illusory (it has become frequent lately that precisely representatives of non-governmental organizations are invited to perform this sort of control). primarily fair trade. including in public procurement procedures and represent good foundation for neutralizing negative effects of potential conflict of interest in the public procurement system. This does not mean that the goal of public procurement procedure is reduced to establishing best possible value-for-money relationship. guarantees. of course) which pertain to favourable conditions of payment. public and controlled financing of political parties. as well as transparent budget management. Conclusions of analysis suggest that existing legislation in Serbia aimed at eliminating risk of conflict of interest in public procurement procedure is largely satisfactory and that the basic problem lies in implementation of legal provisions. The public authorities are obliged to take into account benefits they can obtain (for public interest. subsequent obligations. friends or any other natural or legal persons which can be considered associated persons. functional characteristics etc. The Law on the Agency for the Fight against Corruption (and previous Law on Prevention of Conflict of Interest in Discharge of Public Office) regulate in much greater detail prevention of conflict of interest. The analysis and monitoring of these critical points enables much greater assurance about (ir)regularity of procurement process and reduces the possibility of existence of conflict of interest in practical implementation of the public procurement procedure.
other legal persons etc) from the list of those authorized to initiate proceedings for protection of public interest. the State Audit Institution and budgetary inspectors and on the basis of imperative of protecting public interest. necessity and other tasks in connection with envisaged or conducted public procurement can have interests that are associated with interests of those participating in other segments of the procedure e. This segment can also be jeopardized through conflict of interest. preparation of documentation etc in their capacity of members of public procurement commissions. The analysis of the Public Procurement Law has identified several sensitive points at which employees or other associated experts or persons involved in public procurement procedure might have interest affiliation with the bidders: • A pool of persons conducting public procurement – experts preparing and conducting public procurement procedures or other tasks under the area of jurisdiction of those commissioning the procurement.are most to blame for this state of affairs. individuals from other sectors within or outside the institution etc). decision to add item to the public procurement plan etc). A great shortcoming in public procurement plans is inexistence of a narrative part explaining why certain procurement has to be made. service or tasks to be carried out is not always clearly visible as well as the need to include them in public procurement plan for the coming year.g. which is illegal and represents a textbook example of conflict of interest. analysis of bids. procedure related to assessment of procurement necessary in the coming year (multiannual procurement plans are not made in the Republic of Serbia) and devising of the plan itself. studies of needs etc. An important shortcoming of the existing Public Procurement Law is that it excludes subjects which are not bidders (natural persons. NGOs. public procurement sectors. for example. Experts working for those commissioning the procurement or other natural or legal persons participating in making of studies. which should be monitored by competent public attorneys. feasibility studies. because the necessity for a certain good. papers and other documents that concern preparation.g. which. It is very important to pay attention to their possible association with bidders in the subsequent public procurement process. which is the legal basis for conducting the procedure. The making of the plan involves employees from the budgetary or finance sector as well as other necessary experts.e. may pertain to engaging natural and legal persons to carry out other tasks related to public procurement. public prosecutors. but also competent institutions that are supposed to oversee observance of the Law. As in the previous case. This also includes persons who participate in conducting the procedure. • Expert analyses. These tasks can also pertain to decisions and other legal acts which are a basis for conducting the procedure (e. which may involve either institution employees or other persons engaged in administrative or other tasks related to public procurement (special departments. other natural or legal persons engaged in making tender documentation for conducting public procurement procedure must not be associated with bidders in public procurement procedures. bidders. • Participation of employees and other persons engaged in conducting procurement procedure. feasibility. opening and scoring bids leaves room for Republic of Serbia 97 . leaving the public procurement system without effective control. the Public Procurement Office and the Ministry of Finance. Lack of public scrutiny of the process of gathering. Law infringements and criminal acts should be sanctioned on the basis of proceedings initiated by competent prosecutors. All aforementioned perform this control function unenthusiastically and insufficiently. • Preparation and making of tender documentation. • Making public procurement plans i. employees of the institution.
which attests that competition among bidders has not been ensured and that possibility of more personal negotiation and agreement has been open.“ An analysis of obtained data has shown several systemic shortcomings in the public procurement system that could indicate possible conflict of interest: • Ill-defined and incomplete public procurement plans which are presumably a consequence of „unexpected situations“ in commissioning institutions and urgency of necessary procurement. In accordance with analyzed segments of public procurement procedures and potential critical points in terms of conflict of interests. The requests were made to institutions covered by the project. a firm owned by a public official who has practically not transferred his ownership rights. • Situations in which Public Procurement Law is infringed and large procurement is „broken“ into several procurement procedures of smaller value. • Some persons and employees who reappear in procurement procedures for various items in several institutions and which might be affiliated in terms of interests with some bidders in those procedures or have participated in their business activities in the previous period. which led these institutions to resort to negotiations (the Law envisages this as extraordinary circumstances and unforeseen events). as well as procedures involving price negotiation for concrete procurement. conducted subsequently with announcements made only to some companies (The Law allows direct contact and announcement to be made to at least three bidders. In order to discover conflict of interest in this segment it is also important to scrutinize content of minutiae from the meeting at which bids were opened. which increase the possibility of „direct negotiation“ with a bidders who potentially have interest affiliation with the commissioning institution. the list of contracts etc. light bulbs contain elements that do not sufficiently eliminate the possibility of existence of conflict of interest in a concrete procedure (membership of steering board of a company with which the contract had been signed and participation of making technical specification of light bulbs) or acquisition of computer software and hardware from the most favourable bidder. we have used the right to free access to public information to make an analysis of public procurement in the context of conflict of interest in selected ministries and local self-governments. it would be important to enable bidders but also other subjects interested in regularity of procedure and meeting of professional standards (mostly anti-corruption NGOs and professional associations) to scrutinize the process. • Supervision of contract realization. the list of bidders and sub-contractors. In order to discover possible conflicts of interest in this segment of public procurement procedure. • Large number of public procurement of small value (over 35% of total conducted procedures) and very small number of bidders included in concrete tenders (the average is three. without clear explanation and grounds for employing them. • Some procedures such as public procurement of electrical material e. Members of supervising bodies (commissions.g. the list of bidders who have concluded contracts with the commissioning body (including data on their management structures). containing questions about the previously identified „critical points. the minimal allowed number under the Law). This legal possibility has been amply used). • Increased use of restricted procedures.subsequent modification of received offers by „losing“ parts of certain offers making them incomplete or through subsequent upgrading of offers of favoured bidders. boards etc) for controlling realization of contracted public procurement must not be affiliated in terms of interest with the selected suppliers in public procurement procedures. • Certain number of concluded contracts involves bidders which have the same owner and are at the list of suppliers as qualified companies for restricted procedures (those lists 98 Balkan Anti-corruption Civic Initiative .
with which tenders are conducted subsequently). are today lit by light bulbs equipped with special protection for docks. We have never obtained official confirmation of this information. Belgrade institutions. We addressed Minel Schroeder Company. Thorn. we have requested tendering documentation for procurement of light bulbs for street lighting. Several contracts contain names of Professor Kostić’s relatives as employees. defined so as to precisely fit a product produced by Minel Schroeder company. The fact is that this company is the only one which produces light bulbs that fit the technical specification of the procurement. namely the one in Bar. namely a team from the Electrical Engineering Faculty in Belgrade and one of its professors. companies bidding for the procurement (Siemens. • There are concrete cases that some potential procurement involves research and experiment needs and are conducted with the same bidders who are presented as the only experts. the Electrical Distribution Company Belgrade. which exceed market price several times. such as the Ethnographic Museum. without any changes. We managed to obtain them only after the intervention of the Commissioner for Information of Public Importance and Personal Data Protection and public exchange of accusations with professor Kostić in the media (Politika daily). we obtained contracts concluded between the Electrical Engineering Faculty. All studies and technical specifications describe precisely the light bulbs produced only by Minel Schroeder. Montenegro.contain three or four bidders at most. On several occasions in public procurement of electrical equipment. On the basis of the Law on Free Access to Public Information. Tracking down information we have obtained from various producers of electrical equipment who have been bidding for public procurement in 2008 and 2009. but we were not able to obtain information who members of company board were or whether they have been engaged in projects. • Some studies are used twice for conducting different procurement procedures for unrealistically large sums of money specified in the contracts (the Belgrade Secretariat for Utilities and Housing Services and the Electrical Engineering Faculty in Belgrade). Even more incredible is the fact that the same study. Mr. Republic of Serbia 99 . An example of identified conflict of interest in public procurement procedures involves City of Belgrade and acquisition of electrical equipment. From insider circles of Minel employees and rival companies we have been able to find out that professor Kostić was member of the Minel company Steering Board until 2005. At the same time. even though Museum building is one kilometre away from river Sava and around 660 kilometres away from the nearest dock. Miomir Kostić. On the basis of studies and specifications made in this way. and the City Administration) concerning making of expert studies that involved Professor Kostić. It is important to note that we have obtained only part of the sought contracts from the Electrical Engineering Faculty. has been used several times as a uniquely made research that has been commissioned. These contracts have been made without previously conducted public procurement procedures. Velmat) but which have not been selected have complained about too precise technical specification. the Directorate for Energy and the Electrical Engineering Faculty in Belgrade as the bidder). the city of Belgrade authorities and public enterprises (including the Directorate for Energy of the City of Belgrade. the same expert team has prepared technical specifications. For all procurement procedures. contracts have been concluded for unrealistically high sums. There is indication that there is affiliation in terms of interest between those bidders and the commissioning instance because these bidders appear too often as the only relevant experts and the agreed sums are several times higher than the market price of the same item (contracts between Electrical Distribution Company Belgrade. even though by their nature they ought to have been subjected to that procedure.
This unnatural relationship led media to a paradoxical situation where. opposition parties and their leaders have assumed power in towns and municipalities. this constitutes a situation which as such represents conflict of interests par excellence.“ they are actually increasingly swayed by political influences of local politicians who have the power to allocate local public funding. newly established local media actually played an activist role in the fight to topple down the regime of Slobodan Milošević. assisted by the stateowned radio and state-owned dailies Politika and Večernje novosti. Thus local media – mostly electronic ones – have begun to sprout all over Serbia and people got a chance to hear news different from the ones broadcast by Radio Television Belgrade. As allies of opposition parties and their leaders – who have now become municipality officials – they were financed from local budgets.5 million people. even though they have been established in order to „provide truthful and objective information. because a basic tenet in media profession is that media cannot objectively report about the work of the body financing it. gaining an opportunity to break out of the media blockade in which Milošević regime had been holding Serbia.031 media with the total number of 357. which means that one media „covers“ the needs of some 7.Conflict of interest in financing the media According to the Serbian Business Registers Agency and their April 2011 data. and consequently are dependent on those who make decisions about those funds. there are 1. Identifying conflict of interest in individual cases means only confirming that there is a systemic problem of conflict of interest in the very manner of financing media. If we compare the number of 1. namely as much as 6 media per town or municipality. in which professional and ethical criteria give way to the need stay afloat. Together with the new local authorities from the opposition parties.031 media serving the needs of 7. The conflict of interest in media financing from public sources in Serbia thus has to be perceived as a systemic problem. even 11 years after the democratic changes.031 registered media in Serbia.677 registered business entities in Serbia at the end of 2010. There are 1.300 citizens. Such hyper production has led to catastrophic economic position of the media. having won local elections. An attempt to introduce order into media sphere after democratic changes in 2000 by privatizing and commercializing media was stopped in 2008 in the face of protests of local media themselves. The motives for protest are clear: such number of commercial media in Serbia is economically unsustainable. That’s why local media. it is clear that several thousand readers or viewers cannot cover costs of production of any sort of media contents. still depend on budgetary funds for their subsistence. Even though opposition parties did not succeed in taking over reins of the state at the level of the Republic and the Federation. Whether we translate this number into print runs or viewership paying TV and radio subscription. From the point of view of journalistic profession. it also becomes clear that advertising cannot be the source of sustainable financing of this number of media. The greatest number of local media was established after the opposition won 1996 local elections. 100 Balkan Anti-corruption Civic Initiative .
e. through with media contents to be determined by the Pirot Municipality. situation regarding local media has not been essentially different. which obliges media to publish advertisements and greetings. The media is reduced to mere municipal bulletin or advertising board and left without a vestige of independence or professionalism.“ which. Even though most contracts also pertain to media coverage of activities of local self-government. for it obliges the media to: • „continually monitor the work of local self-government and municipal administration of Pirot and inform the public of Pirot municipality about it. The second paragraph leaves room for the municipality to determine the manner of presentation and contents of information about its work. which is telling enough.“ • The manner of reporting about the work of local authorities should be a matter of media editorial policy i. the contract does not concern advertising services with their concrete price. the city of Kragujevac also financed concrete media projects intended for the young. The Pirot municipality. but concerns „municipal contribution to media financing“ for a one-year period. because have an interest to be informed about decisions and activities of local authorities. from the point Republic of Serbia 101 . which should be calculated according to the existing media price list for concrete number of broadcasts/publications. The contracts concluded between the City of Kragujevac and media outlets stipulate that purpose of financing. In 2008 five media and in 2009 six media were financed from the budget of the city of Kragujevac. announcements and congratulations made by the Pirot Municipality. again. constitutes typical purchase of advertising space. however. It is clear that this however is not the case when the work of local authorities is concerned. If such editorial decisions observe professional standards.“ • „publish information about (these) issues when explicitly requested so by the Pirot Municipality with media contents determined by the Pirot Municipality. editorial assessment about media attractiveness of information or its importance to citizens. However. media contents devoted to culture etc. implies that media contents regulated by the contract are unattractive and would otherwise not be reported by the media and thus it is necessary to . with slightly less than 64. The same holds true for municipal announcements mentioned in paragraph three.000 inhabitants in 2008 and 2009 financed as much as five media. The content of contracts is interesting. is to ensure „media coverage of City activities regarding construction and maintenance of local infrastructure. among other things. which have great bearing on their everyday life. In a similar way media are financed by the city of Kragujevac. Media were financed on the basis of business-technical cooperation contracts. so it is necessary to buy media advertising space in order to deliver the message to citizens. the third paragraph. the media is expected to ensure its readership/viewership/audience. importance or urgency of information should require so.In five towns encompassed by the BACCI project. Finally. when the very nature.“ • “publish advertisements. otherwise they would have found their place in regular media reporting on their local community. This contract.
of view of editorial policy of any local media, is news par excellence published naturally by local media because such news ensures their readership/viewership/audience and should not be an object of public financing. Construction and maintenance of local infrastructure is also something about which objective reporting is absolutely necessary. However, apart from such contracts, the city of Kragujevac also concluded typical contracts to purchase advertising media space and produce advertising clips. The contracts of the city of Novi Sad that concern cooperation with the media, which we have been able to obtain on the basis of the Law on Free Access to Public Information, have not enabled us to conclude whether media financing pertained to special media projects (information in minority languages, information relevant for disabled persons, information pertaining to multicultural practices etc) or to regular reporting about the work of local authorities. All contracts pertain to „realization of projects“ without any detailed description of those projects or the obligations of parties to the contract. In some cases it was possible to conclude something on the basis of project titles or titles of shows the production of which was financed from public sources, but in other cases it was impossible to draw any conclusions about media contents. In 2008 and 2009 Novi Sad financed as much as 13 media on the basis of contracts for realization of activities, as well as the city television Apolo, financing of which is regulated by city budgetary decisions on the annual basis. On the other hand, the city of Belgrade, in which practically all „major“ national media are seated, paid only for broadcasts of advertising clips. The Belgrade city television Studio B has the status of public enterprise and is financed in accordance with the Law on Public Enterprises. In 2008 Belgrade bought advertising space at two and in 2009 at three television channels. It is interesting that the city of Belgrade has not concluded any contract with printed media. The City of Užice financed eight in 2008 and seven in 2009. It concluded typical contracts with all seven media in 2009. This type of contract concerns purchase of advertising television or radio shows lasting half an hour or an hour or certain number of columns during the entire calendar year in print media. The contracts do not specify number of purchased advertising slots or time of their broadcasting (otherwise the usual element of such contracts, because price list of advertising space varies depending on the broadcasting time or the number of the page in newspapers). With these contracts, the city acquired the right to deliver to electronic media monthly schedule of shows, which not only constitutes interference in editorial freedom of the media but also in the very program schedule of certain media. The provider of the service, namely media outlet, is obliged by these contracts to „produce, make and broadcast shows” and „publish advertisements delivered by the Information Service of the City of Užice.” In return, the city is obliged to „make monthly payments on the basis of monthly invoice containing the number of broadcast shows and advertisements.” The 2008 contracts specify more closely obligations of media: to report on the work and activities of the city in its news programmes; to report on protocolary and working visits to the city; to organize shows staging municipal and city officials; to broadcast information of interest for functioning of the city.
Balkan Anti-corruption Civic Initiative
These contracts also specify news contents that should normally belong to regular work of the media and constitute contents that ensure viewership/ readership/ audience of media i.e. are commercial in nature. Regular guest appearances of city officials on radio and TV shows should normally be occasioned by specific events rather than on a regular monthly basis. However in this case the occasion are propaganda needs of guests themselves and their need to be present in public rather than real needs of citizens to be informed. Apart from media themselves, the city of Užice also concluded in 2008 and 2009 the contract with the „ZOOM” Agency to shoot „video footage and reports on activities of city authorities” and ensure their broadcast on media with national coverage. This concerns propaganda material and it is not clear whether and how the material was indeed broadcast by national media, given that the price of advertising space in such media is very high and the contract with the Agency specifies a modest amount of 5,000 dinars (50 Euros) per footage in 2008 and 3,000 (30 Euros) per footage in 2009. These amounts are not nearly sufficient to cover expenses of video production let alone their broadcast on media with the national coverage.
Conclusions and recommendations
Monitoring conflict of interest in state and local self-government bodies has proved to be a very demanding task for civil society organizations. These difficulties are not a result of weakness of the applied methodology, but stem from the very nature of conflict of interest being analyzed. If we look back at the definition of conflict of interest which was the starting point of the conducted research, it is clear that the difficulties to identify concrete cases are very great, particularly in those concrete cases when it „seems“ that conflict of interest affects unbiased and objective discharge of public office. It is particularly difficult to claim with certainty that an official with a name and surname has really committed an offense against conflict of interest regulations. Apart from unclear criteria to determine conflict of interest, the problem also lies in unclear definitions of notions and institutions that are responsible for identifying existence or inexistence of conflict of interest. The definition of conflict of interest in Serbian legislation is in accordance with the highest standards of contemporary systems, but it is defined as conflict of private and public interest, whereby public interest has not been defined by any legal act in Serbia. Therefore in each individual case identifying conflict of interest implies prior definition of public interest in order to start identifying conflict of interest. This is a strong factor deterring all likely instances competent or willing to identify or prevent conflict of interest, be it state or local government institutions, civil society organizations or unorganized individuals, from doing so. Another major obstacle is inexistence of reliable data on the basis of which conflict of interest could be identified. At least in Serbia, this does not stem from deficient implementation of regulations ensuring free access to information of public importance. On the contrary, the findings of this research in Serbia suggest that government bodies, especially the ones at the local level, act upon requests for free access to information fully and within legally set deadlines.
Republic of Serbia
Moreover, insufficiently trained officials acting upon the Law on Free Access to Information of Public Importance also divulge information involving personal data that are protected and should not be given to seekers of information. However, the problem we would like to underline here is inadequate information that would enable identifying conflict of interest. For example, in Kragujevac, a mayor’s cousin has been appointed to the post of director of a local enterprise managed by the city of Kragujevac. The methodology of this project has not enabled us to determine this, although the project team has had information about appointment of directors to local public utility companies. It is possible to arrive at such findings by interviewing insiders, but even then it is very complicated to prove the connection, because this presupposes research on family relations and „digging through“ personal data, which is problematic from several points of view. The information that would indicate conflict of interest is also difficult to arrive at, due to specificity of the political system in Serbia. Namely, the proportional electoral system with a single electoral unit at parliamentary and local elections produces large number of lists which are able to win terms in office and therefore produces big coalitions. Since the unity of ruling coalitions always depends on all coalition partners, members of the ruling coalition are mostly not ready to initiate any proceedings that would prevent, disclose or resolve conflict of interest of officials who are members of parties belonging to the coalition. Therefore it is difficult to have whistleblowers among officials and ruling political parties, given that staying in power is what blackmails all of them not to act in this manner. The fourth important obstacle is that public officials are only obliged to submit reports on their property, but not on their interests. The property reports do not enable us to determine whether a public official has conflicting interests, except in cases when he owns a company or a share in companies that do business in an area which is within the purview of his public office. A much stronger finding than the previous ones is the one that suggests that conflict of interest is little known category in Serbia. The officials are slowly learning to recognize it, especially since the Law on the Agency for the Fight against Corruption was adopted and the Agency established in 2010. However, very few officials are able to define it or to enumerate key obligations stemming from segments of the Law regulating conflict of interest. Numerous cases of conflict of interests we were able to identify in our research and about which we have hereby reported – despite methodological difficulties – are telling in this regard. The key instrument for conducting research of this type is certainly free access to information. Even though this segment functions in Serbia somewhat better than is the case in Croatia and Bosnia and Herzegovina, there is room for improvement, especially in the segment of law implementation by public bodies. On the basis of research, we have arrived to the following recommendations: • In order to facilitate access to public information and save resources, public bodies should ensure technical conditions for scanning documents to be delivered to seekers of information electronically and to subsequently make them accessible through their Internet web sites. In all further cases when seekers of information seek information contained in the same documents, the authorities could refer them to the Internet web page rather than spend money and resources for copying and sending the documents.
Balkan Anti-corruption Civic Initiative
Lack of control of public procurement system invites large-scale corruption. ever since the public procurement system has been introduced in Serbia. This once again confirms aforementioned difficulties to identify conflict of interest and lack of capacities of bodies responsible for preventing conflict of interest to do their job. • Financing civil society organizations should be aimed at creating and implementing previously defined policies. prosecution offices and courts. • Further raise the level of transparency of public procurement procedures by introducing an obligation to publish details about small procurements and abolishing procurement procedures that bypass public announcements. primarily the State Audit Institution. Republic of Serbia 105 . regardless which branch of government they may belong to. given that around 30% of public procurement consists of small-scale procurement. This is also true of government bodies and local self-governments which formed a sample of this research. Taking into account that public procurement system in Serbia operates with some 4 billion Euros. • For establishment of an efficient system of preventing conflict of interest it is necessary that all control bodies. • It is necessary to advance capacities of the Agency for the Fight against Corruption to control conflict of interest in public procurement procedures and establish effective control as soon as possible. However. the Public Procurement Directorate. it is necessary to introduce several measures. This research has also confirmed existence of cases of public procurement which contain elements of conflict of interest. According to many conducted research so far. • The existence of prerequisites for systemic conflict of interest in the area of media financing should be alarming not only for the Agency for the Fight against Corruption.• It is necessary to train persons acting upon the Law on Free Access to Information of Public Importance to recognize and then in the legally proper way protect personal data they possess in order not to divulge such information to third parties and thus breach citizens’ rights. it is clear that it is urgent to improve prevention of conflict of interest in the area of public procurement. no public procurement has been declared null and void due to conflict of interest. Interior Ministry inspectors. begin to uphold norms concerning conflict of interest. • For preventing conflict of interest in financing civil society organizations. which would significantly narrow the room for lack of control of public procurement. • It is necessary to establish closer cooperation between the Agency for the Fight against Corruption and the Commission for Protecting Rights in Public Procurement Procedures in controlling conflict of interest in this domain. primarily: • Make civil society organization financing fully transparent. public procurement is an area of activity of public authorities which is most prone for illegal conduct and conduct that contravenes public interest and an area in which the largest amount of public funds are spent. • CSOs should be financed as a result of call for proposals announced by state and local government bodies on the basis of clear criteria. • Amendments to the Public Procurement Law should enable all legal and natural persons who have evidence that public interest has been violated in concrete public procurement procedures to initiate proceedings of protecting public interest before the Commission for Protecting Rights in Public Procurement Procedures. budgetary inspections.
106 Balkan Anti-corruption Civic Initiative . Therefore in the largest number of cases the quality of media contents produced by local media is questionable. as it presently is. • If media in Serbia are to assume their role of controlling the government. however. to say the least. The key danger. is insufficient for serious media production. as well as permanent avoiding of topics which are unpleasant for those who finance the media so that they can survive. informing and promoting topics and issues in the public interest. The money obtained by media from local budgets. educating. it is necessary to ban those provisions in contracts on media financing which reduce media to mere service of government bodies. • In order to establish independent and professional media. is the fact that by dragging media into such arrangements an atmosphere of despair is created. reducing media to government outposts. although regular. • Therefore it is necessary to determine clear and transparent conditions for allocation of public funds to finance media work. an atmosphere in which it seems that different behaviour is not possible. The consequence of unnatural relationship between media and local authorities that finance them is chronic lack of information by citizens about issues which are often of decisive importance for their local environment. if budgetary support of media is understood to be in the public interest. namely the local authorities. they should become financially independent from decision-makers and be trained to survive in commercial market conditions. The treatment of media by some of the local self-governments in our sample is such that it fully annihilates their independence and professionalism.but also for journalists’ and media associations.
Projekt financirala: Europska unija Projekt provodi: Partnerstvo za društveni razvoj .
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