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Harmful and unexplained amendments to the Statute of ”JP Elektroprivreda Srbije”

Amendments to the articles of founding act and the Statute of ”JP Elektroprivreda Srbije” will have very harmful consequences on the implementation of anti-corruption laws in the largest Serbian public company, Transparency Serbia warns. In addition, the key reasons for changes are not explained and the legal basis is disputed.

The decisions of the Supervisory Board of ”EPS” dated 4/4/2023[1], which amend the Founding Act and the Statute, when they come into force, will result in EPS no longer being subject to the Law on Public Enterprises.

In the future, neither the director nor the members of the ”EPS” Supervisory Board will have the status of public officials, which means that they will not be obliged to submit reports on assets and income, even though they will have public funds of very high value (365,105,090,000 dinars, i.e. about 3.1 billion euros, according to data from the amended founding act). There will no longer be an obligation to select the director through a competition. The Government of Serbia has not respected this legal obligation even in the past 9 years (after the dismissal of Aleksandar Obradović).[2] Otherwise, the change in the status of the company was not an obstacle for the obligation to conduct the competition to be prescribed by the new Statute.

When it comes to public procurements, EPS will lose the status of "public contracting authority", so it will not have a general obligation to carry out procurements based on the law, but only in connection with certain activities. EPS will no longer be subject to the supervision of the Ministry of Economy or any other ministry. Transparency will also decrease, because EPS will no longer publish the business program and quarterly reports on their implementation. Also, EPS will no longer have restrictions on spending funds for donations and sponsorships, which opens up new channels for politically directed waste of public resources.

It is important to note that such a transformation of EPS is legally possible only if it is established beyond doubt that the company "does not perform activities of general interest". The Energy Law[3], which determines activities of general interest in this area, was adopted back in 2014, and was last amended in 2021, so it remains unclear on what legal basis and for what reasons the changes, if they are based on that law, are made only in April 2023. Furthermore, as can be seen from the report from the meeting of the Supervisory Board, EPS expert services stated that EPS is still obliged to apply the Law on Public Enterprises.