What needs to be fixed in the proposal of the law on the management of state enterprises

Transparency Serbia sent the Government of Serbia, the Ministry of Economy and the Agency for the Prevention of Corruption a detailed analysis of corruption risks and other shortcomings in the draft law on managing business companies owned by the Republic of Serbia (SOE).

The proposal for a law on companies owned by Serbia was withdrawn from the parliamentary procedure at the beginning of June after numerous criticisms of the proposed text, among which were an initiative to parliamentarians and a statement issued by Transparency Serbia.

It is undoubtedly good that the law has been returned for consultation, but TS warns that it needs to be clarified to what extent the Government is willing to change the proposed norms. Namely, consultations started, but the text is still called a "proposal" and not a "draft" of the law. However, according to the Government Rules of Procedure, there is no possibility to change the proposed law once it has been adopted. Also, it was announced that the ministry's representatives would respond to the comments verbally at a public meeting. It means no written report will explain each accepted or rejected suggestion.

TS emphasized that the National Assembly is the only body that can eliminate some of the most significant corruption risks in the rules on the SEOs' management by repealing the authentic interpretation of the term "an official ", adopted on February 12 2021, or by amending the Law on Prevention of Corruption. Without it, state representatives in the shareholders' assembly, members of supervisory boards, directors and acting directors in SOEs would not have to submit asset reports at the beginning and end of their mandate and apply other rules from that law. It is already the case with members of the new Executive Board of EPS AD, as well as with the Executive Board members and the director of "Telekom Srbija".

TS also pointed to other weaknesses of the proposed law, such as insufficiently clear norms on the appointment of acting directors, insufficient rules to prevent abuses for the sake of party promotion or buying influence in the media, and the absence of penalties for violating specific rules.

In the past ten years, since the adoption of the first Law on Public Enterprises, which provided for the establishment of professional management and the selection of directors by competition, TS has launched many initiatives related to poor solutions in laws and by-laws, illegal practices in the appointment of directors and acting directors. Instead of solving these problems, which the Government of Serbia created by not applying or supplementing the existing regulations, it once again offered to pass a new law as a way out. At the same time, the fact that the Government has not mentioned these problems at all when explaining the proposed and then withdrawn law does not contribute to its credibility that it is willing to solve the current problems.

It is one of the main reasons why TS proposed a public hearing to be held in the National Assembly before the adoption of this law, in addition to the existing consultations. And thus, it could be seen whether it provides sufficient guarantees for the termination of lawlessness in the management of public enterprises, the waste of their resources and misuse for political promotion purposes.