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The Appeal Commission: “Professionalisation” without merit

The Appeal Commission has a very important role in the civil service system, as it protects rights and interests of civil servants, state employees and candidates for state authorities. The Law on Civil Servants and State Employees from 2017 has enabled professionalisation of the Appeal Commission. At the same time, its competences have been expanded, and instead of separate local commission, the Commission now decides on appeals of local officials, employees and candidates for jobs in local government. However, the appointment and dismissal procedures were not sufficiently elaborated, which had negative impact on practice.

On October 2, 2021, the Government, by a decision and without holding a session, dismissed the entire Appeal Commission by telephone, referring to legal provisions that indicate unprofessional and negligent performance of duties. This dismissal, was conditioned by the fact that for almost three months, by the time of writing this brief at the end of December 2021, civil service system was left without a functional second-instance body for dealing with complaints. Moreover, it showed omissions on the legal framework that have long term consequences for the effectiveness of protection of employment rights, scheduling, rewarding, termination of employment, etc.

The goal of this analysis is to provide a critical review of the procedure for appointment, decision-making and dismissal of the Appeal Commission and to make lessons from month-long dysfunction of this body in order to prevent similar situations in the future.

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Transparency of the Public Investment Budget

Research of the transparency level, availability of information, as well as external communication and proactive approach to the citizens in key areas of public financial management in Montenegro, shows a lack of effort on the administrative part and significant problems. One of the key components of the state budget which is aimed at improving the life quality of citizens, is the capital budget. Considering the importance and differencies in the process of making and implementing in relation to the rest of the budget, in this report we point out some of the key problems regarding to openness, preparation and implementation of the capital budget, as well as bringing it close to citizens, with recommendations for improving the situation.

The capital budget represents a special part of annual budget which preparation is defined by the Law on Budget and Fiscal Responsibility, and further elaborated by the Decision on the capital budget preparation and determination and evaluation of criteria for the selection of capital projects.

The authors of the publication, Dragana Jaćimović and Marko Sošić, point out some of the key problems with regard to the openness of the capital budget, its preparation and implementation, as well as bringing it closer to citizens, with recommendations for improving the situation, bearing in mind its importance and differences in the drafting process and executions in relation to the rest of the budget.

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No progress towards the EU without the Parliament

It was necessary to consult the Parliament prior to drafting an Action Plan which aims to address key recommendations from the European Commission’s Report. The need for a comprehensive amendment of the Law on Prevention of Corruption goes beyond the scope of electoral reform.

This was pointed out today by Ana Đurnić, who on behalf of Institute Alternative (IA) participated in a joint session of the Committee on Political System, Judiciary and Administration and the Anti-Corruption Committee, which focused on meeting the political criteria for EU membership, in areas of judicial reform and the fight against corruption.

‘’We have previously pointed out that, although the Government must bear the Action Plan for addressing key recommendations of the European Commission, there is a need for a broader political, institutional and social consensus about this document’’, she said, stressing that not all of the participants of the meeting had access to that document.

She added that the resolution of the problematic situation in judiciary and prosecution is directly related to the Parliament, which is why the MPs must have been involved in preparing the document aimed at addressing the recommendations of the European Commission.

Đurnić emphasized that the much-needed amendments to the Law on Prevention of Corruption are artificially related to the reform of the electoral legislation, and that in terms of their scope and priorities, these amendments exceed the electoral reforms.

‘’The focus in further reforms and the work of the Agency for the Prevention of Corruption must be put on more adequate sanctioning of violations of the provisions of the Law, especially regarding income and property registration and conflict of interest”, she said and explained that these sanctions are currently not deterrent enough.

Ana also pointed out that public administration reform must keep its focus on the issue of depoliticization and optimisation of employment, not only in public administration, but in the entire public sector, with a special focus on public enterprises.

‘’Public procurement is an issue that has been largely neglected over the past year, due to the general positive assessments of the Law on Public Procurement and the eProcurement system. However, more important is the decision of the European Commission to place procurement in the cluster Fundamentals of the new Methodology, with chapters 23 and 24”, emphasized Đurnić and explained that this should be interpreted as the European Commission’s clear message that public procurement is an important anti-corruption issue, rather than merely a market issue.

IA Team

A recording of the session is available bellow:

 

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Members of the Government to show respect for their obligations to the Parliament

By not appearing yesterday at the control hearing in the Human Rights and Freedoms Committee, the Minister of Finance and Social Welfare, Milojko Spajić, avoided coming to the parliamentary hearing for the fifth time.

Although the ministers in the Government of Montenegro are obliged to respond to the invitation of the committees for control hearing, we are witnessing the increasing refusal of ministers to be accountable for their work and to answer the questions of the MPs in parliamentary working bodies. Since the constitution of the committees in the new parliamentary convocation, we have recorded eight cases in which ministers did not appear at the scheduled parliamentary hearing in the committees, out of which five are control and three are consultative hearings.

Article 75 of the Rules of Procedure of the Parliament regulated the control hearing conducted by the committees in Parliament, in order to exercise the control function of the Parliament, while the same article prescribes the duty of invited authorised representatives of state bodies to respond to the committee’s invitation. However, the Rules of Procedure did not prescribe further procedure in the cases in which invited persons are not responding to the invitations for control hearings.

Milojko Spajić, the Minister of Finance and Social Welfare, is leader when it comes to the number of cases in which he ignored the calls of the MPs for his parliamentary hearing. He did not respond to the Committee’s calls as many as five times, while he only attended one control hearing in the Committee on Economy, Finance and Budget. Minister Spajić did not appear at the control hearings organized by the Committee on Health, Labor and Social Welfare, the Committee on Gender Equality, the Committee on Security and Defense and the Committee on Human Rights and Freedoms.

We emphasize that the agenda of the parliamentary hearings at which the Minister did not appear included issues related to the current situation in the field of social policy, protection and support for women who were victims of violence, gender responsive budgeting, and the black market of cigarettes. The agenda of the session of the Committee for Human Rights and Freedoms planned for yesterday included a control hearing of Minister Spajić regarding the work of day care centres for children with disabilities and persons with disabilities, but he did not appear due to earlier commitments.

We appeal to the Government of Montenegro, ie the competent ministers, to ensure their presence at the control hearings in the committees, and thus do not block the exercise of the control function of the Parliament, which monitors the application of regulations and implementation of public policies through parliamentary hearings.

Nikoleta Pavićević
Institute Alternative

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Who owns our public enterprises in Montenegro?

A review of aspects of transparency and accountability of state-owned enterprises

There are (at least) 56 enterprises in Montenegro in which the state has majority ownership, which employ over 12 thousand people and spend almost 200 million a year on salaries. More than half a billion euro of loans given to state-owned enterprises are at present guaranteed by the state and they can at any moment become a burden on a budget. In the meantime, most of enterprises make losses, and out of the top 20 legal entities which are on the tax debtors blacklist, 11 are state-owned enterprises owing about 50 million based on taxes and employee contributions. At the same time, in the current year only, three new state-owned enterprises have been established, in spite of the fact that the Government has not yet produced a legal framework which would enable the state to have an insight into the state of affairs in its enterprises and give it authority to prevent or solve problems in their work.

This report provides an overview of burning issues in the field of supervision of state-owned enterprises, problems regarding financial audit and control mechanisms, insufficiently defined conditions for appointment of boards of directors and CEOs, lack of staff payment and human resources management policy, numerous fiscal risks and low level of information availability and transparency of state-owned enterprises. Finally, the report gives concrete recommendations, whose implementation would address the accumulated problems, the need for a new legal framework for state-owned enterprises and the establishment of a central body responsible for regulatory and supervisory policy in state-owned enterprises, being the most important ones.

As part of the work on this report, we collected a significant amount of documentation on individual state-owned enterprises (including documentation on staff numbers, salaries, sponsorships, donations, financial aid, severance pay, directors’ contracts, board of directors’ decisions), which we organised and made available to public through our website “Who owns our public enterprises”. 

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Interview for Vijesti: Behind Closed Doors and Without Public Debate, Once Again

Marko Sošić, Public Policy Researcher at NGO Institute Alternative for daily newspaper ‘’Vijesti’’, on the Government’s work and the budget proposal for 2022:

In terms of transparency, not much has changed in the past year – during the term of Prime Minister Zdravko Krivokapić; budget proposal for the next year does not show a will for cutting current expenses; project ‘’Montenegro Now’’ is a sum of mostly sketchy project ideas without key capital budget reforms, while ‘’Europe Now’’ lacks analysis, and the draft laws which follow this project were determined without public debate.

This was stated by Marko Sošić, a Public Policy Researcher at the NGO Institute Alternative, in his interview for ‘’Vijesti’’.

When it comes to the transparency, in this NGO they noticed the readiness of the Government to provide data on the work of the previous establishment, rather than data on the work of the current one.

Sošić said that IA immediately received data on how the budget reserve was spent till 2020, but when it comes to data on how the inner cabinet of the Government is allocating aid in this year – there is no answer for five months. He pointed out that the General Secretariat of the Government is ‘’frontrunner’’ in ignoring all their requests and rejecting the initiatives to achieve a minimum transparency of the materials which are listed at Government’s agenda.

Late Reports

‘’The draft law on the budget for 2022 does not show a trend of cutting current expenses and unproductive budget lines. Although the Minister of Finance, Milojko Spajić, constantly repeats that they managed to reduce the current spending by 10% during this year without specifying how those savings were made – the data show a significant increase in the following year. The entire current budget is larger for almost 60 million. Expenditures for business trips increased for 40 percent, for representation for 30 percent, as well as controversial item ‘’other costs’’ that we criticized over years for lack of transparency’’, said Sošić, recalling that one year state gave 3.6 million euros in aid to Montenegro Airlines, justifying this expense as ‘’other costs’’.

He pointed out that costs for consulting services are growing, as well for the work contacts, other personal incomes, rent – all that the new ministers were criticizing during the mandate of the previous Government.

‘’Where are the cuts which were promised? Where is in-depth analysis of the expenditures which should show lavishness of the previous Government, and belt-tightening of current Government? We do not have a budget inspection, or a property register, or capital budget reforms – all of which would be natural priorities of a technocratic, expert government’’, Sošić emphasized.

He pointed out that the program budget was emphasized as the key reform move of the current Government which led to greater budget transparency, but that the key question is what do we know now, that we did not know before.

‘’Almost nothing. It is formalistic division of the budget of the institutions into programs, sub-programs and activities, in 2,000 pages. In these countless sheets, there are semi-finished indicators and objectives which are not linked to the government’s strategic plans and exist ‘’on their own’’, just to satisfy the form. We do not know how these indicators are met and no report on the execution of the program budget has been published yet, although there is a legal obligation on quarterly reporting’’, Sošić said.

IA emphasizes that the non-adoption of the budget leads to temporary financing and another crisis period, and that they hope that everyone will have enough responsibility not to allow that to happen.

Government has further complicated things by linking the budget to the measures from ‘’Europe now’’ package, thus bringing the Parliament to a final act – if one out of 10 laws submitted with the budget is not adopted or amended, the balance of the entire budget will be disturbed. The laws proposed by the MPs are also a significant challenge, from compensation to mothers to larger allocations for pensioners, without precise cost estimates – and all of this can kick the budget out of balance’’, said Sošić.

PR Package – ‘’Montenegro Now’’

He believes that the ‘’Montenegro Now’’ program is essentially overcrowded capital budget for next year wrapped in a PR package to make it easier to swallow, and that a more appropriate title would be: sum of mostly sketchy project ideas, without substantial capital budgeting reforms.

‘’How we select projects and how long we work on them, how big the unforeseen costs are and how poorly prepared the projects are – was not a priority during the selection of the projects. In the next year, twice as many projects are planned than in 2021, which is a huge burden for the two administrations that had problems even with fewer projects. In the first nine months of 2021, only 45 percent of the planned capital budget was realized. How will twice as many projects going to be implemented and why we are not focusing on already started projects? Two thirds of the new projects scored 50 or less points, which means that they are only half or less ready to be implemented. Some of the projects which are selected have scored only 15 points’’, said Sošić.

He said for ‘’Vijesti’’ that it would be much better if Government decided to try to complete the already started projects, to initiate the reform of capital budgeting and implementation of the recommendations of the State Audit Institution (SAI) and the International Monetary Fund (IMF). For me, that would be an approach more suitable for an expert Government, and I am sorry that they decided to go with sensationalism and explanation about biggest ever number of projects’’, said Sošić.

According to Sošić, the ‘’Europe Now’’ project suffers from lack of analysis, consultations, impact assessment, and excess of superficial propaganda and simplification.

‘’The question is not whether you want to live better and receive a bigger salary, because this is not even a question, thus it is intentional simplification. The real issues that needed to be discussed are whether we want to change the way we finance health care, how to ensure taxation of profits, higher excise taxes, how to strengthen institutions so that they can tax undeclared profits and reduce the grey economy. There are many questions about the feasibility of the revenue side and we are worried by the optimism of the Government when answering well-founded questions about whether it is really realistic that next year we will have additional 50 million from excise revenues, that we will have additional 25 million from corporate income tax, not to mention completely abstract categories such as additional 15 million from the reduction of the grey economy and additional 20 million from the taxation of undeclared incomes’’, said Sošić.

He believes that it is a pity that Ministry did not even try to find an agreement with political parties, both in power and opposition, for such far-reaching reforms having in mind that such major issues require a social agreement.

‘’How we will finance our health care system is an issue that goes beyond not only current Government, but this generation as well. Therefore, it is a pity that the MPs also heard about the ‘’Europe Now’’ plan just two months ago, the same as the entire public. No public discussion had been held on any of the ten laws that were submitted to the Parliament together with the budget proposal in order to implement the ‘’Europe Now’’ program’’, Sošić concluded.

Government to explain why they rejected the proposal to limit salaries

Sošić said that he hoped that all the data published by the Ministry of Capital Investments on public enterprises would result in systemic changes, not only public outrage and political skirmishes.

‘’The Government must explain why it rejected the proposal to regulate salaries and management bonuses, and what is the plan. If they want to establish order in current chaos in state-owned enterprises, they must systematically address the accumulated issues, primarily through the new legal framework for the work of state-owned enterprises and the establishment of a central body responsible for regulatory and supervisory policy in state-owned enterprises’’, Sošić said. The ‘’Montenegro Works’’ experiment suffers from the same lack of impact assessment and consultations as the ‘’Europe Now’’ and ‘’Montenegro Now’’ programs.

Interview was originally published on December 4, 2021 in the daily newspaper ‘’Vijesti’’