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Incomplete and unpublished international agreements are a huge problem in Serbia

Transparency – Serbia (official chapter of Transparency International), on the occasion of announcement of gas pipe-line “South Stream” construction delay,  emphasizes that incompleteness and secrecy of international agreements represents serious problem to protection of state and civil interests, which is not only the mistake of politicians in the past, but also the continuing practice.

News on possible delay of construction of gas pipe-line „Southern Stream“ are a good occasion to perceive damaging effects when signing incomplete contracts and agreements. During signing of oil-gas agreement between Serbia and Russia[1], behind clearly unfavorable part of arrangement to Serbian party in regards to conditions of exploitation of oil and gas and conditions for sales of share in NIS company, thesis that Serbia will have greater benefits when this main gas-pipeline starts to function, appeared. However, agreement doesn’t state that share of NIS is sold below the market price, nor that the reason for awarding preferential treatment for using domestic oil and gas is this expected benefit. Therefore, clauses that register what will happen if this part of the agreement is not implemented don’t exist. If incomplete, international agreement, that on this base ground has more legal power than domestic laws, problem becomes far greater. So there is a possibly, if there was no international agreement, share in NIS would have to be sold to most favorable bidder in public tender procedure, and right to use domestic oil and gas to concessionaire with best offer, which would make things clear, at least in economic terms.

Good reason to raise this issue is the fact that oil-gas arrangement adopted in 2008 is not a unique case. On the contrary, current Government implements largest projects on the basis of international, political agreements, with clauses insufficiently known to public, avoiding principles of market competition with respect of sever procedure of public procurements and public-private partnerships. To make the problem even greater, unlike oil-gas arrangement with Russia, debated before the Parliament and available to public, for recent investment arrangements (like construction of "Belgrade on water"[2] and agreement on establishing of company "Air Serbia"[3]) many important information aren’t available – Parliament adopts general international agreements on joint projects in widely defined areas, and specific contracts and their publishing are only being announced.

Transparency – Serbia

Belgrade, 11 June 2014

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