By electing Ms. Vesna Medenica for the third time as President of the Supreme Court of Montenegro, the Judicial Council grossly violated the Constitution, which prohibits in Article 124 (5) the same person from being elected more than twice for the post (“The same person may be elected the president of the Supreme Court no more than two times”).
The Judicial Council elected the President of the Supreme Court without any reasoning regarding constitutionality of the candidacy, as would have a politburo in a one-party system, although 11 non-governmental organizations, law professors and other prominent lawyers from Montenegro and the region had publicly warned in due time and with reasoning that the candidacy of Ms. Medenica had been unconstitutional.
Caricature: Dušan Gađanski
By this decision, members of the Judicial Council acting with one voice and without explanation repealed the Constitution of Montenegro, aware that there would be no legal review against their decision, as there had been no other candidate for the same function who could file legal remedy.
We may only conclude that the Constitution had been abolished and to warn the public that instead of the rule of law what we have is rule of political power, overriding general interest for personal gain. The result is devastating for Montenegro, especially as it comes from those whose job is to secure the independence of the judiciary and provide for equal application of the Constitution and law to everyone.
The Judicial Council has definitely been compromised as a puppet body, while the post of the President of the Supreme Court is usurped. It is furthermore devastating that the candidate was unanimously proposed by the General Session of the Supreme Court (all 18 judges) without any explanation as to the constitutionality of the candidacy.
For those who still do not get it it, let us repeat: In July 2013, by an amendment that had immediately come into force, the Constitution of Montenegro prohibited the appointment of the same person more than twice as president of the Supreme Court. Thus, an important democratic institution was adopted in order to “prevent inappropriate concentration of power”, as explained by the Venice Commission. However, this universally accepted democratic custom will not apply to those of us living in Montenegro during the Vesna Medenica’s presidency, who by the end of her third term will be 17 years in the same post and who will have concentrated such personal power that should cause deepest concern for every reasonable and objective observer.
Human Rights Action (HRA), Tea Gorjanc Prelević, Executive Director
Network for Affirmation of NGO Sector MANS, lawyer Veselin Radulović, legal representative
Institute Alternative, Stevo Muk, President of the Managing Board
Committee of Lawyers for the Protection of Human Rights, lawyer Velija Murić, Executive Director
ANIMA – Centre for Women’s and Peace Education, Ervina Dabižinović, Coordinator
Adamas, Katarina Bošković, Executive Director
Center for Civil Liberties, Boris Marić, Director
Association for Protection and Promotion of Citizen’s Rights “Legal Representative”, Budislav Minić, executive legal representative
Media Centre, Goran Đurović, Director
Centre for Civic Education (CCE), Daliborka Uljarević, Executive Director
Center for Development of Non-Governmental Organizations, Ana Novaković, Executive Director
Public Procurement Report for 2018 on 46 pages (including attachments) which the Government adopted, confirms how right we were to doubt that the public procurement system will develop better and faster under the Ministry of Finance, stated Ana Đurnić from Institute Alternative for Daily Vijesti.
Đurnić claims that this year’s Report lacks many important data on public procurement, area which consumes significant amount of taxpayers’ money annually. The total value of public procurement expenditure for 2018 amounts 449,37 million euro.
“This year, the public remained deprived of numerous data that could have been found in the previous years’ reports prepared by the Public Procurement Administration. These reports included detailed data on procurement in the health and education sectors, list of companies with most valuable public procurement contracts concluded with the administration, list of contracting authorities which have not submitted their public procurement reports within the legal deadline or at all, as well as the list of contracting authorities with the largest difference between planned and contracted procurement…”, Đurnić stated.
For comparison, the last year’s Public Procurement Report was 167 pages long, and 113 pages of public procurement statistics.
For many years now, Institute Alternative has been advocating for shortening the narrative part of the report which was mainly focused on praising the Government and other competent institutions for their “achievements” in the public procurement area. We have been constantly pointing out the need for improving transparency of this part of public spending by improving and expanding the content of statistical part of the report. Thus, we achieved publishing of the annual overview of the concluded annexes to the contracts, more detailed analysis of procurement in the areas particularly vulnerable to corruption, list of contracting authorities with the greatest use of direct agreement, total number and list of all contracting authorities which did not submit the public procurement report within the legal deadline etc. However, this year’s report brought us at least five years back in terms of transparency of the public procurement system”, said Đurnić.
Đurnić reminded that besides detailed analysis of the procurement in the health and education, analysis of the public works contracts also lacks.
“This is another area particularly vulnerable to corruption, and the Public Procurement Administration has been promising for years to include it in the Report. In this year’s Public Procurement Report, the Ministry of Finance states that the highest contracted value for public works was recorded in 2018 – EUR 160.69 million euro, which is another argument for preparing detailed analysis of this particular area.”, Đurnić explains.
84. 59 million EUR spent on low value and urgent procurement
The Directorate for Public Procurement Policy within the Ministry of Finance notifies in the report “the greatest use of open procedure, which is the most transparent competitive. It also states that 79% of the total number of contracts were concluded through an open procedure in 2018.
However, Đurnić claims, it does not state that this is the lowest percentage of use of the open procedure in the past six years and that it is 6% lower compared to the previous year.
“On the other hand, through non-transparent and non- competitive procedures of low value and urgent procurement, contracting authorities concluded 96.840 contracts in 2018, with a total value of 84,59 million EUR”, Đurnić reminds.
“More than a half a billion euro is being spent on public procurement every year in our country, while the system is continuously sinking into increasing secrecy and space for corruption is expanding”, Đurnić concluded.
The article was originally published in Daily Vijesti and Portal Vijesti.
The Ministry of Public Administration rejected the petition asking for a change of policy on the publication of the report on the work of the Commissions in charge of distributing budgetary funds
E-petitions are only acceptable to the Government if that service is not used to uncover what is at the core of the monopoly and state secrets, including the privileged terms available to the officials and civil servants when purchasing flats or taking out home loans.
This was stated by the civil sector representatives after the Ministry of Public Administration (MPA) recently rejected the civil sector initiative for launching the petition “Our money, their flats and slush funds”.
Several NGOs submitted to the Ministry led by Minister Suzana Pribilovic the initiative to launch the petition, proposing a change of the Government policy on the publication of the report on the work of the Commission for Housing Policy and the Commission for Distribution of Budgetary Reserve Funds.
The petition proposed that all of the Commissions’ documents from 2006 to date be de-classified and published on the Government webpage. The civil sector also asked for a decision to make such documents available online going forward.
The supporting arguments provided were the following: “citizens are entitled to information concerning budget spending”, including “the budgetary reserve funds and funds intended for housing”.
The proposed petition read as follows:
The secrecy of the decisions of the two Commissions undermines the Government’s openness and integrity and the public trust in the lawful and sensible spending of public funds, and is contrary to the provisions of the Law on Free Access to Information, which provides that authorities are required to publish individual documents and agreements concerning the disposal of public revenue funds.
The Commission for e-Petitions, composed of representatives of the Government’s General Secretariat, Ministry of Justice and MPA, however, rejected this proposal of the civil sector.
The Commission’s rationale stated that “the regulatory framework on the transparency of work of state authorities in Montenegro, right to free access to information and restrictions of that right due to protection of public interest is clearly set up”.
Invoking the Constitution and the Law on Public Administration, they stated that “the work of state administration authorities is public”, that state authorities “are required to inform the public of their work”, and – in line with the Law on Free Access to Information – “enable public insight into their work”.
Following the host of definitions on guaranteeing publicity and transparency, the MPA further responded that there were instances when that right might be restricted and that the Government, on the basis of current regulations, “issues the decision on the level of classification of its own documents”, including the ones related to the work of the Commission for Housing Policy and the Commission for Distribution of Budgetary Reserve Funds.
The MPA added that “the guaranteed right to an appropriate legal remedy and supervision over implementation of regulations pertaining to free access to information are also mechanisms to indicate potential shortcomings in the implementation of the regulations in this field”.
To Stevo Muk from Institute Alternative (IA), this response of the relevant authorities “is an insult to common sense”.
“The Government has brutally closed the door for a civil petition just a couple of months after opening that door in a thunderous and seemingly sincere fashion. It turned out that the first petition that affected the core of the monopoly and secrets would not just be rejected, but that citizens would not even be granted the opportunity to sign and support it. The rationale provided by the Government insults common sense, as it instructs us to appeal to courts although the Government has a history of non-compliance with court decisions”, he said to Vijesti.
Muk said that the IA would continue to pursue all the alternative options to reveal “the Government’s best kept secret”.
“And despite the resistance from the Government led by Dusko Markovic, the day when citizens will be aware of how the budgetary reserve is spent and who is being allocated flats by the Governments is getting closer”, he said.
The Network for Affirmation of NGO Sector (MANS) reminded that during the time of the public debate on the Law on Data Secrecy they, on several occasions, provided specific examples of abuse of laws and regulations to conceal information of public relevance.
“This refers in particular to the expenditure of budgetary funds. In the well-regulated states there is no particular need to explain why any budgetary reserve outlays have to represent public information or why the taxpayers should have the information about the officials who obtained flats from the Government. Civil oversight of the work of the authorities is a most natural and necessary thing; by publishing such data the governments of developed countries communicate that such oversight is welcome and – even more importantly – feasible in practice”, Dejan Milovac, Director of MANS Research Center, told Vijesti.
He added that “it is not difficult to conclude what message the Government is sending across to its citizens when it conceals the information that should, due to its very nature, already be proactively published on the institutions’ websites”.
“The MPA is fully aware that the right to free access to information is largely restricted, not just due to the poor implementation of the Law on Free Access to Information and the fact that a growing number of state authorities are abusing the concept of secrecy to restrict access to data, but primarily due to complete absence of oversight over the work of state institutions concerning the most flagrant cases of abuse,” Milovac noted, adding that “coupled with complete absence of any sanctions imposed against the authorities and their managers for having breached the law, this has led to the situation where state institutions ignore even the court judgments that require them to make some information public”.
“In such a situation, reference to legal remedy and mechanisms of legal redress is hypocritical and does not indicate the slightest readiness to retain at least the few results achieved so far in the reform of the right to free access to information,” Milovac stated.
In his view, the proactive publication of information as proposed by the petitioners would show “the presence of political will, would relieve state institutions of the administrative procedures in the course of implementation of laws and, more importantly, would grant citizens faster and easier access to the information they are interested in”.
“Rejection of the initiative shows that the political will is still not there; unfortunately, with regard to the two Government Commissions, sufficient reasons still exist to protect certain individuals and companies by having their private interests override the right of the public to know”, he stated.
The project “Voice of Citizens – e-Petitions” (epeticije.gov.me) was developed in 2012 with the aim – in the words of the authorities – to enhance the transparency of the Government’s work i.e. implementation of civil initiatives… After the service remained inactive for years, it became available again a few months ago, when the Government decided to set the minimum of signatures needed to support a petition at 3,000 instead of 6,000.
The petition “Our money, their flats and slush funds” was proposed, in addition to IA and MANS, by the Media Center, Human Rights Action, Center for Development of NGOs, Civic Education Center, Center for Monitoring and Research, Politikon Network, Civil Freedoms Center and Center for Investigative Reporting.
No response still on the housing arrangements for the officials
The rationale reminded that these were documents issued on the basis of old legislation which were also “artificially kept alive” under the new legislation from 2018, which stipulated that the controversial provisions ‘remain in force after this law has come into force’.
It was further stated that the provisions were problematic also from the perspective of the Law on State Property, which provides the definition of a flat used for official purposes as a flat to accommodate elected and appointed officials during their term of office. The argument was that that constituted the precise definition of the purpose of “accommodation“ and the temporal restriction “during the term of office“. The Government’s practice of granting significantly more favourable terms for housing arrangements via the Commission rather than via public policies was deemed discriminatory – the Government implemented three rounds of the project titled “1000 +”, where, as the IA reminded, “40% of funds are intended for the beneficiaries where a household member is a public sector employee“.
The Government can have its way
In the rationale declining the NGOs’ petition, the MPA stated that the Law on Free Access to Information “fully regulates the issues of relevance for the method and procedure of exercising the right to free access to information, but also the instances when this right may be restricted, the method and procedure of determining the harm test… and the procedure for determining the prevailing public interest in accessing any information classified by the authority”.
The MPA Rationale stated, inter alia, the following:
On the basis of the current regulation on free access to information in the Governments’ possession and the right of the public to know, the Government, mindful of the respect for the other right enshrined in the Constitution – such as the right to personal data protection, right to protection of privacy – issues the decision on setting the level of classification of its own documents, including the documents of the Commission for Housing Policy and the Commission for Distribution of Budgetary Reserve Funds”.
Petition “Our money, their flats and secret funds” stopped in its tracks
The Government of Montenegro Ministry of Public Administration (MPA) did not approve the launch of the e-petition of ten NGOs asking the Government to publish, at last, the information concerning the expenditure of budgetary reserve funds and the flats allocated to officials.
In its response, the Ministry provides argumentation which lacks any legal basis. It refers to the opinion of the phantom Commission for e-Petitions, composed of representatives of the Government’s General Secretariat, Ministry of Justice and MPA. It would be interesting to learn the composition of this body – unknown up until recently, as well as whose secrets it is hiding from citizens.
In mid-June, ten NGOs submitted a joint e-petition proposing a change in the Government policy on the publication of the reports on the work of the Commission for Housing Policy and the Commission for Distribution of Budgetary Reserve Funds. The petition was backed by the Institute Alternative (IA), Center for Development of NGOs (CRNVO), Civic Education Center (CGO), Network for Affirmation of NGO sector (MANS), Center for Monitoring and Research (CEMI), Politikon Network, Human Rights Action (HRA), Civil Freedoms Center (CEGAS), Center for Investigative Reporting (CIN CG) and Media Center. These NGOs believe that citizens are entitled to information concerning the spending of budgetary funds, including budgetary reserve, and concerning the funds allocated by the Government to address the housing needs of public officials.
The secrecy of the Commissions’ decisions undermines the Government’s openness and integrity and the public trust in the lawful and sensible spending of public funds, and is contrary to the provisions of the Law on Free Access to Information, which provides that authorities are required to publish individual documents and agreements concerning the disposal of public revenue funds.
The petition intended to ask the Government to do the following:
– De-classify all of the documents of the Commissions (dated 2006– 2019) and proactively publish them on the Government of Montenegro webpage;
– Pass a decision stipulating proactive publication of the Commissions’ documents on the Government of Montenegro webpage going forward.
This year’s European Commission Report on Montenegro , in the section on public administration, stated also that “the legislative and policy making process continues to suffer from insufficient transparency and a lack of genuine inclusion of relevant stakeholders”. Also, following harsh criticism over concealing information, one of the three key EC recommendations stated that the Government should “improve citizens’ access to public information by further reducing administrative silence and reversing the trend of declaring public information as classified”. Slightly more than a month passed after the publication of the EC Report and this Government’s refusal to even have citizens state their views on the petition demonstrated that it was ready to go straight against the EC recommendations in order to keep the veil of secrecy over budgetary funds.
The ban on the launch of our petition represents the strongest confirmation of the merits of its theme and serves as an indicator of the irresponsibility and non-transparency of this Government towards its citizens and the EC.
At the same time, this Government decision also essentially discourages all other citizens from making use of e-petitions and the concept of open government which it seemingly advocates. We will therefore continue to insist upon it, as citizens have the right to know how the Government is spending their money and we all have the right to live in a country whose Government prioritizes the country’s credibility and honouring of international commitments over its own party or particular interests.
Stevo Muk, President of the Managing Board, Institute Alternative (IA) Ana Novakovic, Executive Director, Center for Development of NGOs (CRNVO) Daliborka Uljarevic, Executive Director, Civic Education Center (CGO) Vanja Calovic, Executive Director, Network for Affirmation of NGO Sector (MANS) Zlatko Vujovic, President of the Managing Board, Center for Monitoring and Research (CEMI) Jovana Marovic, Executive Director, Politikon Network Tea Gorjanc Prelevic, Executive Director, Human Rights Action (HRA) Boris Maric, Director, Civil Freedoms Center (CEGAS) Milka Tadic Mijovic, President, Center for Investigative Reporting (CIN) Goran Djurovic, Director, Media Center
The split views held by the establishment, led by the Democratic Party of Socialists (DPS), and the opposition on the environment for holding elections in Montenegro have caused a string of grave political crises which have had a devastating impact on the functioning of democracy, the work of the Parliament, the parliamentary oversight of the executive and the overall quality of governance in the country.
Though they have claimed for decades that the conditions for holding elections are unfair and challenged the results of all the parliamentary elections, the opposition parties lack a common position on the key challenges or an articulation of proposed solutions in the form of a common public document.
It seems, moreover, that the opposition parties are losing interest in changing the rules of the electoral game, while it is becoming less and less likely that major opposition parties will boycott the coming parliamentary election if the conditions remain unchanged.
The process of coming to an agreement concerning the key problems and solutions could rally the opposition parties around a common demand towards the parliamentary majority and the Government; subsequently, DPS would have to ensure adoption of the solutions that would secure the trust of all the stakeholders involved in the process. The time for dialogue and agreement is running out, with a little over a year remaining till the calling of the election for the Parliament of Montenegro in 2020.
Responsible opposition might accept the proposed forum for dialogue or propose an alternative one; still, wherever and however that dialogue takes place, the implication is that that opposition would, at the critical moment, take an active part in voting on the agreed decisions in the Parliament.
Absence of any common demands voiced by the opposition adds to the uncertainty of the political process, helps perpetuate the captured institutions, weakens the strength of democratic demands and prevents the dialogue on the electoral conditions from serving the purpose of essential and long-term system reforms, to the benefit of citizens and the public.
I do not believe in the supernatural powers of the concept of a caretaker government. The experience from 2016 were illustrative in that regard.
Still, a caretaker government that would be supported by the parliamentary majority and minority would be able to do more over a longer period of time; after a certain moment, though, it becomes purposeless, especially if it is not the result of a common endeavour of the opposition, does not include the most responsible politicians and endorses a number of legal and institutional constraints from 2016. Such caretaker government could not solve the problems that exceed its competences and require the involvement of the Parliament of Montenegro (amendments to some laws) and of some other institutions responsible for the implementation of legislation.
Agreeing to unchanged electoral conditions or cosmetic changes of the legislation on the election of MPs and political party finance would permanently strip the opposition parties of the right to object to the quality of the electoral process and the outcome of the coming election. Their potential retrospective objections, regardless of their merits, would no longer be accepted either by the international public or by the national opposition and democratic public.
It seems that friends’ assistance is required in the situation where we are unable to resolve these longstanding issues ourselves.
The European Union, as the international player enjoying the highest confidence of both sides of the political spectrum, might provide its own assessment of key governance issues that have direct and indirect impact on the electoral process, rather than rely solely on ex post OSCE ODIHR reports. While the monitoring missions have narrow focus and give soft recommendations, the environment for holding the election is a result of a much wider and longer process than just the campaign or the polling day. Fair and democratic elections are affected by numerous prolonged failures in improving the quality of governance, judiciary and freedom of expression.
The EU cannot achieve positive impact if it sticks to the business-as-usual approach (not only in Montenegro, but in other countries of the region that face similar political crises), as it is obvious that subsequent reactions, such as repeated requests in annual reports for the political and judicial epilogue of the “Recording” affair do not yield results. In this context, a mission like the one conducted by Mr. Reinhard Priebe in Macedonia in 2015 could provide clear and direct recommendations for a successful political dialogue. The European Commission 2018 Strategy foresees such expert missions; one such mission led by Mr. Priebe is currently ongoing in Bosnia and Herzegovina. In addition to the expert mission, the EU could foster dialogue, but also provide continuous expert support to the dialogue process. The failure of previous EU-led initiatives to establish dialogue must not become an obstacle to new efforts to that end.
By spending the money which they mostly raise thanks to their monopolistic position in the market, state-owned enterprises support sports associations and federations, cultural and musical events, and also pay one-off social assistance to legal entities and individuals.
State-owned enterprises, including those which have been incurring losses for years, spend millions of euros a year on donations, sponsorships and one-off social assistances, without clearly defined criteria and procedures for allocating money for these purposes.
Government, or Ministry of Finance, does not have control over spending taxpayer’s money. Enterprises have the power to decide on their own how much and to whom they will give money, and only a few of them publish such information on their websites.
By spending the money which they mostly raise thanks to their monopolistic position in the market, state-owned enterprises support sports associations and federations, cultural and musical events, and also pay one-off social assistance to legal entities and individuals.
This is done outside the national systems established for financial support to development of sports, culture, art as well as the welfare system.
Non-existent state control
Ministry of Finance, which has a special department in charge of state-owned enterprises, does not have a clear answer to ‘’Vijesti’s’’ question on whether they control state-owned enterprises. They also did not answer the questions on why many years loss-making enterprises continue to allocate money for donations, sponsorships and one-off social assistance, and whether would it be more rational that all of these expenditures were under state’s jurisdiction.
In their responses they say that ‘’according to the provisions of Company Law, state-owned enterprises have their own governing and managing bodies and thus are fully responsible for the policy of social responsibility which is related to the allocation of funds for donations, sponsorships and one-off social assistance’’.
State Audit Institution (SAI) warns that this area needs to be regulates as soon as possible and that the biggest problem is that there is no unified regulatory system for this type of budget allocation.
‘’SAI’s recommendation is that the Ministry of Finance should make guidelines, which would be binding for all of the ministries, municipalities, state-owned enterprises and local enterprises owned by the state, in order to solve at once the allocation issue from all these budgets. Then, unified information system must be created. This system would import all these data and we would know how much money is being allocated for which purpose. Thus, we would have a very visible transparency and minimize the possibility of abuse’’ said SAI’s Senate member Zoran Jelić.
He explained that this is important because it often happens that some individuals receive money from various addresses, and the state has no information about that.
Jelić stressed that state funds must have a regulated system, because discretionary rights are often left to more persons, and more discretionary rights also mean greater possibility of abuse.
Money allocated, information hidden
It is impossible to obtain accurate information on the amount of money on annual basis, as most of the enterprises does not want to publish these information, even though this is regulated by Law on Free Access of Information. Based on responses from 24 enterprises, from which we requested information based on this Law, it can be concluded that the whole documentation on how much money and to whom they gave, can be obtained only from those enterprises which gave the lowest amounts of money, such as Post of Montenegro and Marina Bar.
Major ‘’donors’’ are not as generous when it comes to information. Some of them allow insight into information (such as Elektroprivreda Crne Gore), others decline request based on free access to information, while some of them do not even respond to the request (Airports of Montenegro, Plantaže, Montenegro Airlines..).
Based on responses received from surveyed enterprises, it is not possible to conclude on the basis of which criteria they gave money.
All of them are state that these are ‘’socially responsible activities’’.
EPCG stated that they are recognized for their socially responsible activities and that international and regional practices in area of allocation of money for sponsorship and socially responsible activities show that these enterprises for these purposes allocate not less than 1 percent of revenues.
‘’In the previous period, EPCG allocated approximately 500 thousands of euros annually for sponsorships. All sponsorships and donations are allocated in accordance with the decisions of the Board of Directors and the Rulebook on allocation of sponsorships and donations.’’
EPCG did not disclose the Rulebook, and they are among the rare state-owned enterprises whose websites have a section devoted to ‘’donations and sponsorships’’.
Port of Bar spent 130.000 euros for these purposes during last year, and this is less than half of what it spent in 2017, when the amount of allocated money reached 375,000 euros. Money that enterprise ‘’JP Morsko dobro’’ gives for donations, sponsorships and one-off assistances is recorded as ‘’expenditures for humanitarian, health, educational and sports purposes’’, for which purposes 130,000 euros were allocated in 2017, and 110,000 in the last year.
Port of Kotor allocated 100,000 euros on the same basis in past few years. Largest amount of individually allocated money received FC Bokelj, which twice got 30,000 euros in 2017. Club received 7,000 euros from Port of Kotor during last year.
This enterprise delivered Rulebook on sponsorships and donations in which is stated, among other things, that they support humanitarian, social, cultural, scientific, educational and sport activities for which there is social interest, but which cannot be financed by commercial activities. Rulebook does not say based on which criteria they will decide to whom and how much money will be allocated.
Enterprise ‘’Montenegro Bonus’’ says that they gave one-off social assistances during last two years to their employees, and that in 2017 they allocated 13,000 euros for donations as well as 20,000 euros one year later. Most of the money was given to health care institutions, sport clubs and kindergartens.
‘’When it comes to sponsorships, Montenegro Bonus has sponsorship contract singed with Handball team ‘’Lovćen’’, for period from 2018 to 2020 amounting 10,000 euros per year, on condition of positive result accomplished at the end of the business year.’’
Warnings from the World Bank
NGO sector stresses that sponsorships and donations that state-owned enterprises allocate are illustration of how much that part of public sector is left without any oversight.
“World Bank warned back in 2013 that Montenegrin state-owned enterprises are least transparent part of the public sector, with most significant lack of information on public finances. Nothing has changed for better since then regarding practice and legal framework. Law on Public Companies was abolished almost a decade ago and not replaced by any other law that would account for specifics of the work of this type of enterprises’’ said Marko Sošić from Institute Alternative.
He also said that state-owned enterprises request to be treated as independent companies in the market competition, until they need state aid to save themselves.
‘’If a state-owned enterprise is incurring losses, then it must be helped by all of the citizens. On the other hand, if it makes a profit only the chosen ones can benefit from it, while the rest of the citizens are not allowed to know to whom and how much money has been paid.’’
Boris Marić, former minister in the Government of Electoral Trust who while he was on this position initiated this topic, said that state-owned enterprises have no legal obstacles to direct subsidies, donations, one-offs and it should not be limited, but this area must be regulated better.
‘’Many of these enterprises have internal rules for allocating money, but there is no connected system. The public policy of allocation of subsidies or one-off assistance is split into a number of subjects, starting with administrative bodies to various forms of state-owned enterprises. There is no single, planned public policy for subsidies and one-off’s, based on precise records, recognized needs and in accordance with the principles of fairness, equity and transparency. This area should be further standardized and the obligations regarding planning, method of distribution, record keeping and transparency of these funds.’’
SAI has the same opinion, especially when it comes to one-off assistances. As they say, within the final budget there is data on how much money has been allocated from budget reserve and these data are exact, but there is no evidence beyond that.
Jelić stresses that many subjects do not have regulated rulebook or an act based on which they are allocating money.
‘’We do not have limits, is it 50 or 25 percent of average salary in state. It is different from subject to subject. The limit on how much can be allocated must be defined.
Marić pointed out that the question whether the state-owned enterprises are obliged to submit information to the public was open a long time ago and, according to him, it is encouraged practice in these companies.
‘’There is no doubt that companies most often do not respect the obligation to be transparent, and that legal solutions must be made clear and definite. We generally have backslide in the area of free access to information, and therefore it is easier for companies to hide information regarding the use of funds provided for subsidies and one-off assistances’’ Marić said.
Montenegro Airlines – Generous Loss-Making Enterprise
Regulating this area is of a great importance when it comes to enterprises which have been loss-making for years and do not pay taxes to the state, but do not give up on ‘’social responsibility’’ in form of sponsorships and donations. Such is the case with Montenegro Airlines (MA). This loss-making enterprise did not respond to request for free access to information regarding data on sponsorships and donations for previous two years. Montenegro Airlines has not even published its financial statements for few previous years. According to data from the audit reports on donations and sponsorships in 2016 that enterprise allocated 83,000 euros for that purpose, as well as 22,000 euros in 2017.
Football club ‘’Zeta’’ had MA logo on their jerseys both this and the last year.
‘’The intention of SAI is to prevent the state-owned enterprises and local authorities which have recorded negative financial result in their financial statements to give aid, donations and grants. Also, subjects that have outstanding tax liabilities or have tax debt reprogramming cannot be allowed to spend money on any of these forms of assistance’’, said Jelić.
Marić stresses that this must be solved with caution, as negative balances in accounting terms may be treated differently.
‘’However, Montenegro Airlines, enterprise which has both legally and illegally received state aid in order to survive, should not even think about subsidies, donations, one-off assistances’’, Marić said.
Plantaže, enterprise which has ignored request for free access to information, does not have ‘’donations and sponsorships’’ item in financial statements. However, they often appear as sponsors for various sports, cultural and musical events. A few days ago it was published that they were general sponsors of this year’s ‘’Fashion Week 2019’’.
Montenegrin Airports also did not respond to the request for free access to information. It is known that they sponsor of Montenegrin Olympic Committee, which receive around 50,000 euros a year.
‘’Novi Duvanski Kombinat’’, ‘’Plodovi Crne Gore’’, ‘’Crnogorska Plovidba’’, ‘’Kastelo’’ and ‘’Radoje Dakić’’ also did not respond to the request for free access to information.
Monteput Gave BC Budućnost One Million in Two Years
One of the biggest donors in the Montenegrin market is Monteput, which refused to provide information with explanation that it ‘’requires creating of new information, which is defined as a basis for rejecting request for free access to information’’.
Data on Monteput’s donations and sponsorships cannot be found in financial statements. However, this company is known as very generous when it comes to Basketball Club Budućnost, which received one million euros in last two years. From 2017 profit, 604,000 euros were paid on the account owned by this club from Podgorica, and from the last year’s profit 400,000.
‘’Rudnik uglja’’ also rejected request for free access to information, but according to SAI’s data in 2016 there were no sponsorships, although it is known that this enterprise has been main sponsor of the women’s HC Budućnost for years, while 120,000 euros were spent on donations. In 2017, ‘’Rudnik uglja’’ allocated 36,000 euros and almost twice as much for donations – 204,000 euros.
It is not clear based on what principle this enterprise makes decisions on sponsorships, and why it keeps allocating money for years to Podgorica’s handball players, and there is no sense of ‘’social responsibility’’ towards sports club in their city, such as HC Rudar which recently announced that would be forced to quit national competition because of lack of money.
Basketball Association Receives Money From Various Addresses
Due to the fact that donations, sponsorships and one-off assistances are not regulated at state level, money from multiple addresses is being given to the same subjects.
Thus, we have a situation that Basketball Association of Montenegro, until recently headed by President Milo Đukanović, received 100,000 euros from the EPCG, 54,000 euros from Port of Bar and 715,000 euros from Ministry of Sport. It is similar with all major sport association that receive money from Ministry of Sport, but also from multiple state-owned enterprises.
This is also the case with sports teams.
Of special concern is the fact that most of these state-owned enterprises provide one-off assistance to persons outside the companies. These enterprises do not inform Ministry of Labor and Social Welfare on how much money, to how and how many times in year they allocated money, so it remains unknown how many of them are beneficiaries of social aid from the state.
Authors: Danijela Lasica and Marija Mirjačić
This article was prepared within the project ‘’Money Watch – Civil Society Guarding the Budget!’’ that is implemented in partnership with Institute of Public Finance from Zagreb and NGO New Horizon from Ulcinj. The project is financially supported by the European Union and co-financed by the Ministry of Public Administration of Montenegro.
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