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Controversy and delayed competitions for directors of public enterprises

Transparency Serbia (official chapter of the Transparency International) warns that in addition to "breaching" the deadlines for implementing the competition for directors of public enterprises, there are unresolved and potentially controversial issues related to the cancellation of the competitions that were announced earlier.

After three years of the disastrous impact of the Law on Public Enterprises (LPE) from 2012, in terms of depoliticization and professionalization of management, the government early last year decided to change the law rather than to implement it fully. However, not even the long deadlines from the new law are being respected - not only that directors were not elected during 12 months in the majority of public enterprises, but until the expiration of deadline to finalize competitions, March 3, 2017, in some companies they weren’t even announced!

Only at the end of February and beginning of March, they announced a competition for the election of 20 directors, with no explanation of what is (not) done in the period from February 2016. According to information from the media, the Government on March 20 adopted a decision on the implementation of three competitions - for directors of EPS, Resavica and Srbijašume. This announcement, however, in addition to delay, is disputable on other grounds. Specifically, calls for the directors of the three companies have already been announced. According to LPE, calls can be resolved in one of two ways - government can appoint the director that is first on the list created by the Commission (Article 41 and 42), or that Commission determines that no candidate meets the requirements (Article 45). We haven’t found information about suspending of competitions in the "Official Gazette" as well as on the websites of the Government, the Ministry of Economy and of these two enterprises. While there is no duty to disclose such a decision, it would be important to do so, because it is questionable whether the legal requirements were met. In May 2016 media uncontested claims that the competition for director of EPS will be canceled, as well as comment of the qualifications of applicants for this position. However, no one was there to consider the expertise of the candidates on legally prescribed manner, since the formation of the Government Commission for the election of directors of public enterprises only began in December 2016. On 7 December Government appointed the president and two members, two weeks later, a parliamentary committee appointed the fourth, while the fifth member should be appointed in each of the enterprises for the election of directors. The nomination of the fifth member of the Commission are made just on 20th this month and only for 8 out of 20 vacancies open. However, since selection of the members of the selection committee for "EPS" and "Resavica" was not completed, it remained unclear who was able to determine that no candidate meets the requirements, which could possibly be the legal basis for the annulment of the competition in March 2016.

Our organization has requested information from the Government on whether the Commission was in session, when it considered the application, and the document on annuling the competition. In addition, we believe that it is necessary to clarify whether the previous contest was duly carried out, and if not, who will bear the responsibility for that. It is certain that canceling public competitions without explanations may encourage speculation that new political agreement is waiting and application of directors that would have the political support or to discourage those good candidates who do not have such support. Transparency Serbia will continue to monitor the most important aspects of the implementation of the Law on Public Enterprises, and the findings will be presented at a press conference in May this year.

Transparency Serbia

Belgrade, 23 March 2017.