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Who cares about regulations?

Ko još mari za propiseIntroduction of legal obligation to organise public discussions on all laws, as well as calls of invitations for participation for interested parties in working groups dealing with the preparation of these regulations, represent a progress in regulating normative framework for public consultations in Montenegro. This is so because in 2010 the European Commission has , in the context of the priority of starting the accession negotiations, recommended to the Government: you can join the European Union only if you establish an efficient framework for active participation of the civil society in public policy making process.

Today, five years later, this framework as well as a round of progress have come to an end by going back to where we started and to the practice of including interested parties when, as much and the way the Government wants it. And when deviations happen from what is expected by legal obligations in this area, the reasoning behind it is based on the necessity of an urgent procedure adoption, or most often it is at the level of providing null reasons. In other words, do we need better argument than force?! We base this estimation on the preparation process of several important regulations throughout 2015. However, let’s start from the beginning.

In March, after several years of delay, the public has had the opportunity to be introduced to the Draft Law on Public-Private Partnership (PPP). The Ministry of Finance (MF) has predicted that this law should be ‘’publicly discussed’’ for 20 days, ignoring the fact that the Regulation states it should be double as long. The time framework has been prolonged shortly after the Institute Alternative publicly pointed out this issue. The discussion was closed to the public, meaning that only those who got an invitation got to participate. After this document was harshly criticised by experts, the civil sector, local self-governments, the Parliament, the State Audit Institution, as well as the European Commission itself, the public got no feedback on incoming proposals, nor any information on the stage of preparation of this law. The European Commission’s opinion on this draft is not available to the public, just as their opinions were not available for any other draft in the law-making process so far. And while the ‘’gullible’’ thought that there is work ahead of us regarding this document in the making where any support is welcome, a few days ago an announcement of the vice president Vujica Lazović appeared in the newspapers, stating that the Government will be discussing the draft Law on PPP by the end of the year. A few years of being behind the schedule with finalising the draft, a complete silence since March, only for a last-minute rush for determining the draft law during the very last week of December.

After the deadline for the previous strategic framework for Public Procurement System Development has expired, the MF has formed a working group for developing a new strategy in June. In November, the interested public was invited to be included in a range of public consultation via social networks. The announcement was not published on the websites of the Public Procurement Administration and the MF. Furthermore, during these events the draft version of the strategy was not available to the public but could be found later on the website of the municipality of Berane, which leads us to ask what has been happening and in what way the interested parties could have contributed if they did not have access to the document that was being on the agenda. In addition, after these ‘’public consultations’’ the competent authority is not obliged to make any kind of report on subsequently received suggestions, given that this was not a discussion defined by the regulation.

Unlike the case of the Public Procurement Strategy, there were several public events organised regarding the central document for the Public Administration Reform. For now, there was no significant progress when it comes to the quality of this document. After the first ‘’round’’ of consultations, the Ministry of Interior included only ‘’likeable’’ proposals in the report without justifications as to why the other incoming suggestions have not been be accepted.

The NGO sector has been invited to present the Draft Programme of Accession of Montenegro to the European Union for the period 2016 – 2018 during the third week of December. When asked why the document has not been published before the presentation, the answer was that it was finalised just before presentation. When an open discussion needs to be avoided the precision of doing things at the very last minute comes in handy.

Finally, the most picturesque explanation of the essence of the problem and the progress directions has been given at the latest conference organised by the Centre for Development of Non-Governmental Organisations. When asked how could the representative of NGOs in the negotiation working groups contribute to the negotiation process regarding Chapters 23 and 24 if the Council for the Rule of Law sessions, that determine the direction for advancing the issue in these areas, are closed for public, vice president Duško Marković said: ‘’It is a political collegium at the ministry level, there is no room for NGO there’’. And there you have it: you cannot take part simply because you cannot take part. Full stop.

Jovana MAROVIĆ
Research Coordinator and member of the Working group for the Chapter 23

Text originally published in the section ,,Forum” of Daily Vijesti

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Should the fact that the former Special Prosecutors had dozen of subjects lying in their desks be forgotten?

The activities and results of the Chief Special Prosecutor Milivoje Katnić and his team seem encouraging so far. Although I would gladly avoid saying ‘’but’’, it is not the easiest thing to do. The previously disappointing court procedures, particularly those related to the area of organised crime have taught us not to rejoice too soon. It is not over until everything is over: and that is the definite conviction at the highest court instance where illegally obtained property is taken away.

The special prosecution of 8 prosecutors (and two additional) has formed 384 subjects and launched 7 investigations in the first five months. The most of the material they are building their subjects on had already been there, in the former Department for anti-corruption and organized crime collecting dust.

However, the beginning looks promising. The Special Prosecutor’s Office (SPO) of 8 prosecutors (and two additional) has formed 384 subjects and started 7 investigations. However, what does all that say?

The most of the material the subjects are being built on has already been there, in the former Department for anti-corruption and organized crime collecting dust. No matter how willing they are to do their demanding part, they couldn’t have achieved this much by themselves in an incomplete institutional framework without forming a Special Police Unit . And if they did, another question arises with regards to how did they achieve more in just a few months than their colleagues did in several years?

At the moment when the Special prosecutors took over the department, only one subject has been under investigation out of 159 in total. And that is not a benign situation: is someone responsible – criminally, disciplinary, ethically – since the actors who are now officially, and have for years unofficially, been charged for millions – worth of financial abuse are not prosecuted and the evidence was definitely in possession of prosecution?

These questions do not stem from the need to criticize of what the situation was before, but from the need to point out that all reforms conducted in the past few years have not guaranteed that only those who demonstrate results are employed at the State Prosecutor’s ’s Office, but that even after all the implemented law reforms those who did not have any objective credit can work and make progress at the Prosecutor’s Office. In that manner, a couple of former Special Prosecutors are now officially hierarchically put on the position of Prosecutors in the Supreme State Court.

In the long run, until a just system of evaluation and progress according to merits is not established, the State Prosecutor’s Office will inevitably be facing staff issues and issues related to functionality.

The issue of old staff, those who cannot cope with different times and new tasks, was supposed to resolve the general issue of reelection of State Prosecutors, which in line with the Law on State Prosecutor’s Office was supposed to be done by 1st of July this year. The last publicly available information is that in July a public announcement for election of 78 state prosecutors has been made, with which the Prosecutor’s Council began the election procedures. The reelection happens, or happened, in total silence – which might be a sign of missed chance for a more thorough staff reform.

However, the Prosecutor’s Office is not the only body that has an issue with old staff who are not completely ready for an uncompromising fight against organised crime and high-level corruption. The existence of clans and confronting streams within the police has been marked with the inability to reach an agreement on appointing a Head of the Special Police Unit for months.

And the fact that despite the international and internal pressure the one trustworthy person that would be appealing to both the Director of the Police and the Chief Special Prosecutor could not be found, best explains how relevant and important the Special Police Unit (SPU) is and how much all the new subjects depend on it.

After appointing the Chief of the Police Department and filling vacancies, particularly expert seats in SPO and SPU , it is necessary for future success of the Special Prosecutor’s Office to secure the availability of database of other bodies, as well as speed up the work on a new judicial information system and a new case-management system at the Prosecutor’s Office.

The final law reforms have not entirely resolved the issues of cooperation of the Police and the Prosecutor’s Office in the context of the implementation of the new Law on Criminal Procedures (LCP). The new Montenegro Report 2015 of the European Commission points out these issues as well. Besides the technical aspect of the issue of cooperation and communication, a key problems is the divided responsibility and a clause that enables both the Prosecutor’s Office and the Police to have the initiative, which in a number of cases and particularly at a local level leads to passivity of both, while they are waiting for the other party to do or suggest something.

It is not less important to start working on the preparation of the Strategy of development of the State Prosecutor’s office for the interested public, in order for all the actors to be able to contribute to defining strategic questions that will be dealt with in the future. Finally, further improvement of the transparency of the work for the Prosecutor’s Office and the Police regarding the subjects of corruption and organized crime is a precondition for building trust between the Prosecutor’s Office and the public.

Dina Bajramspahić
Public policy researcher

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2016 Budget proposal – Our remarks

Our remarks on the Draft Law on the Budget of Montenegro for 2016, presented at the session of the Committee for economy, finances and budget

Budget as a moving target

Although the Government respected the legal deadline this year by submitting the Budget Proposal to the Parliament on time, it has actually continued working on it. The budget proposal that the members of the Parliament are deliberating is a ‘’moving target’’ – at the moment, the changes are being prepared at the Ministry of Finances, new negotiations with expenditure units are being held and the Draft Law on Wages of the Public Sector Employees, the previous version of which was the basis for the planned Budget, is being deliberated in the Parliament. Also, the budget was planned relying on the adoption of the changes of the Excise Tax Law, but also based on the Law Proposal on Amendments of the Law on Public Broadcasting Services (according to which RTCG has a budget of 0.3% GDP).

Current expenditure in growth

This budget proposal is within current expenditure marked with 10 % growth when compared to the last year plan, which represents some 50 million. If we follow the argument of the Ministry of Finance that the implementation of the Law on Income in planning the budget brings about 13 million of fiscal burden, it means that we still have some 37 million of increase in other items of the budget – material expenses, service expenses, maintenance and other expenses.

The rulebook on budget classification (…) the expenditure marked as ‘’other’’ makes room for various other expenditures that in fact include the categories with the highest budget allocations (other personal income, other material expenses, services, and ‘’other’’ within the rest of costs.

In comparison with the 2015 plan, a certain growth of 5% of expenses based on service contracts payments is also noted, where the growth was 15% higher than in 2014 – all of which does not go in line with the recommendation of the SAI that this form of employment should be reduced – which means stopping the illegal practice of using service contracts for the national competent authority positions.

Reallocations hampering the proposal

It should be noted that throughout this year, there were 52 reallocations among the expenditure units worth 5 million.. Also, in the first half of the year (deemed more ‘’quiet’’ in this respect), 400 reallocations within the expenditure units took place; worth around 8 million. According to our first analysis, a great deal of these allocations was supposed to increase the income of the operating budget, aiming for budget parts that are targeted for reduction, from business trips, representations to various ‘’other’’ expenditures.

The multiannual planning fails after a few months

The draft proposal of the law breaches the limits defined by Directives of macro-economic and fiscal policy for multiple expenditure areas, by which Article 22 of the Law on Budget and Fiscal Responsibility was breached as well. Out of 39 first-level spending units for which the limits are defined, 21 of those contain breaches of those limits (meaning more than a half), and that violation is in some cases highly significant in percentages (Ministry of Defence, NSA, Judiciary…).

In March 2015, the Government has adopted the Directives of macro- economic and fiscal policy which, among other things, set the limits of the first level budget spending-units users for the next three years. These limits from the Directives are obligatory and must be respected for the following year, while for the following two years they are only indicative. If we cannot precisely predict the limits in March this year for next year, how can we then talk about multiannual planning and what are the consequences of such breach of law?

An increase of budget happened among almost all expenditure units. This increase is in most cases significant in percentage, but there are more extreme cases (State Electoral Commission 1262%, Council for Privatisation and Capital Projects 113%, Commission for the Control of Public Procurement 58%, Official Gazette 526%, Ministry of Health 110%, etc.).

Out of 101 spending units that are in the organisational classification, among 11 the budget is the same as in the 2015 plan and among 9 a decrease of budget took place. Among those 9, State aid Control Commission can be found for which the State Audit Institution (SAI), among other things, after recommending a revision of state guaranties also recommended strengthening the capacity in the sense of organisation and expertise.

What can be done?

As to this budget proposal, we are facing a fait accompli – there are no significant changes that can be done. The only thing that can be done is to make the next budget better. It is necessary to find a version of a so called ‘’deep analysis of budget line expenditures’’, done by a team of experts whose main goal would be to set up a precise system of financial reporting on specific, overly general expenditure budget lines, as well as to recognise irrational expenditures and saving opportunities.

The role of the Parliament in budget adoption is not spell-checking

Today is December the 17th, and there is still not a single budget amendment submitted, besides those that the proposer accepted at the Legislative Committee which only touches upon spell-check. The opinions that the working groups delivered are mostly loci communes and general phrases.

We have delivered to the members of the parliament our study ‘’Montenegro’s 2015 Budget at the Parliament – the analysis of the budget adoption process’’. We have presented some systemic issues of the deliberation process and budget amendments by the members of the parliament.

The next budget proposal should not be considered without a specialised expert service for budget analysis (regardless of the working groups’ structure). The members of the Parliament are replaceable and depend on the election results, and parliamentary service should be the permanent expert core that would be able to do a budget analysis and contribute to a functional supervision of its implementation.

The Parliament must be involved in tracking the implementation of the Public Financial Management Reform Programme which involves various areas crucial for the budget cycle, from planning to its implementation, further development of programme budget, capital budget, public procurement, transparency, etc.

The Committee for Economy, Finance and Budget must demand a report on the work of financial inspection of the Ministry of Finance, which should provide the data on noted, reported and sanctioned breaches.

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(Un)disclosed discussions on local budgets and excluded citizens

A quarter of municipalities have not yet held a public discussion on budgets, and even those that have done so, have not informed the public in the timely manner thus not including citizens in the process.

The municipalities that still have not announced public discussions on budgets are Herceg Novi, Kolašin, Andrijevica, Cetinje, Plav and Gusinje.

Although in most of municipalities public discussions on planned budget for 2016 are ongoing, again this year the discussions were not finalized by the beginning of December which is the deadline stipulated by the Law on Local Self-Government Financing.

This dire and customary practice of untimely held public discussions additionally endangers the lack of participants.

Local self-governments often do not provide all the necessary information in order to generate a more numerous and substantial participation of citizens.

Certain local self-governments only publish the draft budget with no information on the programme of the public dispute, while in some cases the programmes of public discussions are published without the draft budget or an annexed explanation. There are very few municipalities that publish the Ministry of Finance’s opinion on the draft budget, which has only been done by the municipality of Plužine this year.

The websites of the municipalities are in most cases the only communication channel with the citizens in terms of determining the priority of expenses of the local self-governments. Besides the websites, municipalities mostly use bulletin boards in municipality premises, while only a small number use the media or social networks.

Institute Alternative is intensively dealing with monitoring of the local self-government budgets in Montenegro on a daily basis within the framework of public finances programme and web portal Moj Grad. This portal has been created in order to make the budget data that is significant for the public, visually interesting for the citizens, such as the final budget statement of local self-governments, the unemployment rate, total incomes and expenses, as well as the debts of our municipalities, starting from 2009.

Ivana BOGOJEVIĆ
Public Policy Researcher

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Comments on the Public Finance Management Reform Programme

Institute Alternative is the only participant of public discussion on the Public Finance Management Programme for the period of 2016-2020, which is organized by the Ministry of Finance.

We have delivered comments for this document that define the key reform plans in different areas related to the management of public finance – from the budget planning to its execution, further development of the programme budget, capital budget, public procurement, transparency, etc. The programme relates to the new Strategy of public management reform, the draft of which is being publicly discussed and which integrally overtakes its part related to public finances.

Our eight proposals relate to the transparency of the budget, the accessibility of the budget data (the overall transparency of the capital cycle) as well as the strengthening of the State Audit Institution (SAI) capacity and strengthening the monitoring mechanisms of the compliance with the recommendations of the SAI.

In the following period, IA will monitor the implementation of the activities foreseen with this plan, through research and verification of allegations from official reports on implementation, as well as through analysis of the influence of the implementation of these measures on the consolidation of the public finance.

Check out our comments to the Programme

Take a look at the adopted Public Finance Management Programme for the period of 2016-2020