Posted on

The Government Forgot About the State Property Inspection

The State Property Inspection has not conducted a single inspection in the past year, and in the meantime, the inspection body has been left without inspectors, as they have been reassigned to other positions or their mandates have expired.

The State Property Inspection has not been operational since October 2023. Following amendments to a government regulation in October 2023, this inspection body was placed under the jurisdiction of the Ministry of Spatial Planning, Urbanism, and State Property. Until then, since 2010, it operated under the Ministry of Finance in accordance with the Law on State Property. Changes in the organisation of the government did not take into account the Law on State Property, which stipulates that the Ministry of Finance is responsible for its enforcement. As a result, the inspection body remains caught between the law and the regulation, between two ministries, and inspectors are left without the authority to carry out their duties.

From October 2023 to June 2024, the government did not take measures to resolve the inconsistency between the provisions of the law and the regulation. Only in June did the government propose amendments to the Law on State Property to change the responsible ministry, aligning the law with the regulation. However, this proposal was not adopted by Parliament, as the majority of MPs opposed the government’s and ruling coalition’s amendment proposal.

As of October 2024, the State Property Inspection has no inspectors; two inspectors were reassigned, and the third’s mandate expired.

In January 2023, there were five state property inspectors within the Directorate for State Property Inspection. Inspections in 2023 were carried out by four inspectors, as one inspector continued working in the Municipality of Bar in February 2023. Since January 2024, the State Property Inspection has had no chief inspector, and inspections have been carried out by three inspectors.

The Directorate for State Property Inspection oversees the enforcement of the Law on State Property, the Regulation on the Sale and Lease of State Property, and the Regulation on the Record and Inventory of Movable and Immovable Property in State Ownership. The State Property Inspection monitors the management of state assets and other property belonging to Montenegro or local governments in ministries, other administrative bodies, government agencies, local government bodies, the Capital, the Royal Capital, and public institutions. The State Property Inspection also oversees the procedures, agreements, and conditions under which state-owned immovable property is leased or used.

In 2023, the State Property Inspection conducted 36 inspections. None of these inspections recorded any cases of state property being usurped. Apart from one inspection, in which inspectors visited four outpatient clinics at the Health Centre in Kotor, no inspections recorded the state of state-owned assets.

A Television Vijesti segment and commentary by our Dragana Jaćimović on this topic.

We monitor the work of inspections within the project “ Inspect to Protect: Turning Inspectorates Into Anti-Corruption Allies”, supported by the Embassy of the United States in Montenegro, the State Department’s Bureau for International Narcotics and Law Enforcement Affairs (INL). The content is the sole responsibility of Institute Alternative and does not necessarily reflect the views of the United States Government.

Posted on

Eight Months from Initiative to Hearing: The Committee Finally Reviewed the SAI Report on CEDIS

Eight months after submitting the initiative, the Committee for Economy, Finance, and Budget finally conducted a control hearing of the head of the Montenegrin Electric Distribution System (CEDIS), the Montenegrin Electric Power Company (EPCG), the Minister of Energy, and members of the Senate of the State Audit Institution (SAI) on the financial state and operations of CEDIS in the context of SAI’s negative findings.

Although it was an opposition proposal, utilising the parliamentary mechanism of a minority initiative that cannot be blocked, it took five months just to formally decide on the matter, and then an additional three months to actually implement it.

During the debate on the initiative, submitted on February 14th of this year, there was no consensus on whether a vote was needed or if a date should automatically be scheduled and participants for the hearing determined. In the continuation of the 11th session on March 1st, it was decided to consult the Assembly’s Collegium, which would provide guidance on how to proceed with this initiative. The opposition had invoked Article 75 of the Rules of Procedure of Parliament of Montenegro, which gave them the right to organise two control hearings during the regular session, independent of the political will of the parliamentary majority. This mechanism has been further weakened by this year’s amendments to the Rules of Procedure, which now allow for only one hearing each from both the opposition and the parliamentary majority, despite the fact that the majority controls all parliamentary committees.

The reconsideration of this initiative was delayed for another five months. Without mentioning the Collegium’s opinion, it was adopted on July 1st during the second continuation of the 11th session of the Committee. Then, at the 25th session held on July 16th, it was stated that they were awaiting responses from energy companies in order to schedule a hearing date. The following week, the Parliament’s website announced the date of the hearing—the session was scheduled for July 29th. In the following days, the session was canceled without explanation and without an announcement of when it would be rescheduled. Only on October 10th, a new date was posted on the Parliament’s website—October 15th.

We have repeatedly pointed out the inadequate consideration of so-called minority initiatives, a form of oversight mechanism that has been further limited by the amendments to the Rules of Procedure, adopted in May. The delay of this hearing is even more problematic given the Cooperation Protocol between the State Audit Institution (SAI) and the Parliament, which obliges the Parliament to hold hearings for audit subjects that received a negative opinion from the SAI. Therefore, this hearing was the Committee’s obligation, even without the opposition initiative, and represents the only hearing related to an audit report, even though nine audit reports with negative opinions were published this year.

We have previously highlighted the low success rate of opposition initiatives and the difficulties in implementing approved control hearings. The first session of this year was marked by the suppression of the Assembly’s oversight role, through questioning of oversight mechanisms and the rights of the parliamentary minority, as well as delays in implementing approved initiatives.

This infographic was prepared within the project „Parliament for Citizens: Accountability Redefined“ implemented by Institute Alternative and supported by the National Endowment for Democracy. The infographic is the sole responsiblity of its authors and does not reflect the views of the NED.

Posted on

IA’s Initiative For a Joint Hearing on Hold For Five Months

For nearly five months, we have been waiting for the parliamentary committees on economy and health to act on our initiative for holding a joint hearing on the topic of public procurement in healthcare. Despite the fact that the initiative, submitted by Institute Alternative on May 10th this year, was initially accepted by both parliamentary committees, the session has not yet been held, and there is no indication of when it will be scheduled or who will respond to the ongoing concerns about the dysfunction of the public procurement process for medicines due to the limited number of suppliers in Montenegro. We urge that a date and participants for the hearing be determined as soon as possible, which will open a broader discussion on this topic.

The initiative was first discussed at the 19th session of the Committee on Economy, Finance, and Budget on May 15th. On that occasion, it was stated that the MPs would familiarise themselves with our initiative and, in agreement with the Committee on Health, Labour, and Social Welfare, determine the manner of organising the session. Then, at the 25th session, two months later, it was unanimously supported that a thematic session be held based on our initiative, with the date to be determined later. During this period, the Committee on Health also gave its approval for a hearing on this issue.

Since the end of July, we have not received any feedback on whether the hearing will be scheduled and held. The issue of (non)scheduling and/or unnecessary delays has continuously followed the work of the 28th convocation of the Parliament, from the very beginning, which we have pointed out several times. By prolonging the scheduling of the hearing, the oversight function of the committees is being undermined, both because of the relevance of the topic that needs to be discussed and because, in this specific case, more than five months have passed without a clear date being set for the hearing.

More than a decade ago, a joint consultative hearing of these committees was held, but unfortunately, no conclusion was reached, nor was a joint report with recommendations for solving the problem issued. The importance of the topic is also highlighted by the fact that the International Monetary Fund (IMF), in its latest report on Montenegro, pointed to several issues in this area and emphasised the need to improve the efficiency of healthcare spending and limit pharmaceutical expenses, which in 2022 alone reached as much as 2.5% of GDP.

Institute Alternative calls on the Committee on Health, Labour, and Social Welfare and the Committee on Economy, Finance, and Budget to promptly define a date for the hearing, which will be followed by thorough preparation and a broad discussion, in order to articulate clear recommendations for changing policies, regulations, and practices in this area.

IA Team

Posted on

Parliamentary Dimension of the Berlin Process at the Bundestag

The German Bundestag hosted the event “Parliamentary Dimension of the Berlin Process,” held on October 9 in Berlin. The event, supported by the German Federal Foreign Office, was organised by the Institute for Democracy “Societas Civilis” from Skopje, in cooperation with Institute Alternative and other partner organisations from the region.

The event brought together MPs from the parliaments of the Western Balkans (WB) and the Bundestag, parliamentary administration, as well as representatives from think tank organisations to discuss their role within the Berlin Process. Our Dragana Jaćimović participated in the conference.

Dr. Anton Hofreiter, Chair of the EU Affairs Committee in the Bundestag, opened the event by emphasising the crucial role of parliamentary diplomacy in promoting this process.

Key Sessions Focused on Regional Cooperation and Sustainability

In the subsequent sessions, parliamentarians addressed the current progress in implementing the Action Plans of the Common Regional Market and the Green Agenda, with a specific focus on digitalisation and decarbonisation. These discussions were guided by the findings of monitoring reports that assess the current level of implementation of these action plans, policy alignment, and capacity-building across the Western Balkans.

Credits: Deutscher Bundestag/Inga Haar

Our Dragana Jaćimović presented findings from the monitoring report related to activities in the field of the digital economy and cybersecurity, highlighting the need to strengthen regional cooperation, particularly in activities related to the digital economy. Monitoring report findings were also presented by Anamarija Velinovska (IDSCS), Juliana Bilbilaj (Institute for Political Studies), Violeta Haxholli (Kosovo Democratic Institute), and Marija Stefanović (CRTA).

“The monitoring reports provide valuable insights into the progress made by the Western Balkan countries in the areas of digitalization and decarbonization, as outlined in the Action Plans for the Common Regional Market and the Green Agenda. While there are significant disparities in the levels of implementation across these countries, many initiatives are inherently regional and require cooperative efforts. It is crucial that parliaments leverage this information for effective oversight and monitoring. In doing so, they can hold institutions accountable for their commitments and ensure progress in both digitalisation and decarbonisation,” researchers stated in a joint declaration.

Joint Meeting of the EU Committees and Western Balkan Delegations

The EU Affairs Committee at the Bundestag organized a joint meeting of the EU Committees from the Western Balkans (WB6) and the Bundestag during the Parliamentary Dimension of the Berlin Process event. Representatives of the EU Committees discussed two key topics: EU Enlargement and Reforms and  The Future of Regional Cooperation and Connectivity in the Western Balkans.

Credits: IDSCS

Exchange of Best Practices Among Parliamentary Staff

A special event for parliamentary staff was organised, focusing on strengthening the capacities of Western Balkan parliaments within the Berlin Process. Representatives from the Bundestag, Jutta Schneider-Schill, Bettina Creaton, and Felix Arndt, from the Bundestag and Bürgerräte, shared best practices on how parliamentary administrations can better support legislative reforms and monitor action plans related to the Berlin Process.

The conference is part of the project “Parliamentary Diplomacy: Regional Cooperation through Enhanced Parliamentary Dialogue,” supported by the German Federal Government, which aims to showcase the benefits of the Berlin Process by strengthening parliamentary diplomacy and utilizing oversight mechanisms by the parliaments of the Western Balkans.

In addition to the Institute Alternative, our project partners in the region are the Institute for Democracy “Societas Civilis” (IDSCS) from Skopje, the Center for Research, Transparency, and Accountability (CRTA) from Belgrade, the Kosovo Democratic Institute (KDI) from Pristina, the Network of Progressive Initiatives (NPI) from Sarajevo, and the Institute for Political Studies (ISP) from Tirana.

Credits:Deutscher Bundestag/Inga Haar
Posted on

A Quarter of State-Owned Enterprises Hide Directors’ Contracts

Complex network of salaries, bonuses, and severance payments in other sectors

A quarter of state-owned enterprises did not respond to our request for access to the contracts of their executive directors, including some of the largest and most important public companies. The lack of transparency is further compounded by the failure to provide contract annexes.

The contracts we were able to obtain reveal varying practices regarding the definition of salaries, bonuses, and severance payments. The range of different calculation mechanisms, contractual definitions, and amounts indicates a web of non-transparent compensation, the absence of established standards for calculation, and the complexity of these roles.

To date, there have been no initiatives from the Government or Parliament to address these issues systematically and to permanently define standards for determining the elements of contracts for executive directors of state-owned enterprises.

Who is hiding the contracts?

As part of the comprehensive monitoring of these enterprises through the development of the portal “Whose Are Our Public Enterprises?”, we tried to obtain the contracts of the directors of state-owned companies. Out of 54 state-owned enterprises, we received contracts from 42.

The state-owned companies that did not provide the contracts of their directors include:
– Coal Mine,
– Airports,
– 13. jul Plantaže,
– Budvanska rivijera,
– H.T.P. Miločer,
– Montecargo,
– Montenegrin Shipping,
– EPCG-Solar Construction,
– Montepranzo,
– Zeta Energy,
– PIO DOO,
– ADA Sports Centre.

Some of these companies, such as Airports, Coal Mine, Plantaže, Budvanska rivijera, Montepranzo – Bokaprodukt, Zeta Energy, H.T.P Miločer, PIO DOO, EPCG-Solar Construction, and ADA Sports Centre, have been withholding not only the directors’ contracts but also all documentation regarding their operations for years—without any response from their boards of directors or the Government as the founder and owner.

A particular issue in terms of transparency of management compensation is the unavailability of contract annexes. Once signed, directors’ contracts are often amended, and annexes typically redefine salaries, work coefficients, and severance packages. In some cases, while we have access to the original contract, the annex has not been provided, or there is no confirmation that the contract has not been changed. Out of the 42 submitted contracts, 12 have signed annexes to their employment contracts, which were provided. Morsko dobro, Montenegroturist AD, and Ski Resorts of Montenegro did not respond to our inquiry about the existence of annexes.

How much do directors of state-owned companies earn?

Analysing the contracts we obtained, various amounts, measurement units, formulas, and coefficients are observed regarding the base salary of executive directors, as well as a network of additional and variable compensations. This reflects non-transparent compensation for executive directors of state-owned enterprises, the lack of established standards for calculation, and the complexity of these roles.

In most cases, directors’ base salaries are tied to the average salaries of employees in those enterprises. Typically, this involves three average salaries (EPCG, CEDIS, Regional Water Supply, Broadcasting Centre, Marina Bar, Morsko dobro…), with exceptions like the directors of CETI and the Montenegrin Solidarity Housing Construction Fund, who receive 2.5 times the average net salary in the company, and Bar Shipping with 2.2 average net salaries. In some cases, the basis for calculation is determined differently, such as using the average salary from the previous year or month (EPCG). In certain companies, the average net salary at the state level is used to determine the executive director’s salary (Montenegroturist – equal to one salary, BELEN – three average salaries, Castello Montenegro – from 1.5 to two average salaries).

On the other hand, the salaries of directors in many companies are calculated based on job complexity coefficients. These values vary across different enterprises, and in some cases, their calculation is determined by a collective agreement, while for others, it is determined by the Government (such as in the case of RTCG). The coefficient values vary significantly— the director of Luka Bar is calculated using a coefficient of 24, the director of the Regional Diving Centre 22, the director of RTCG 20.75, ŽPCG 20, ŽICG 19, National Parks 16.43, COTEE 13.3, and the director of the University Sports and Cultural Centre 7.6.

In a smaller number of companies, the director’s salary is set at a nominal amount (EPCG-Željezara Nikšić €2000, PROCON €1890, Monteput €1800, Institute for Black Metallurgy, Science and Technology Park €1600, IPC Tehnopolis €1678, Innovation Fund and Sveti Stefan Hotels €1500).

Bonuses

There is no uniform practice regarding the determination, calculation, payment conditions, or approval of bonuses.

According to the employment contracts we had access to, the directors of the Investment Development Fund (IRF), Morsko dobro, RTCG, the Innovation Fund, and the Science and Technology Park are entitled to bonuses. The executive director of RTCG can receive a bonus of up to two average net salaries in that public company. The directors of the IRF and Morsko dobro are entitled to bonuses “in accordance with positive business results.” The director of the Innovation Fund is entitled to cash rewards, but the contract does not specify the amount or conditions. For the director of the Science and Technology Park to receive a bonus, Government approval is required, which is not the case for other companies.

Severance payments and post-contract rights

Rights to severance compensation after premature termination of contracts for executive directors are also defined differently, while a smaller number of companies’ management contracts do not address severance or termination rights at all.

The amounts and methods of calculating severance vary. In most cases, it involves the right to a payout of 12 months’ gross salary, with both average and net salaries used as the measurement units.

In the event of dismissal, the director of the Electricity Company (Elektroprivreda) has the right to be reassigned to another position and to receive the salary he earned as a director for 12 months, after which he is entitled to two-thirds of his monthly salary until the end of his originally defined mandate. Similarly, the directors of CEDIS and Sveti Stefan Hotels have the right to be reassigned to a position with a minimum salary of two-thirds of their monthly salary until the end of their originally agreed term. In these cases, the contract does not specify whether the right to receive this amount applies if the former director declines reassignment.

In the event of dismissal, the directors of HTP Ulcinjska rivijera and IPC Tehnopolis will receive all remaining net salaries until the expiration of the originally set term, while the director of the Environmental Protection Fund is entitled to “two-thirds of six months’ salary.”

The severance payment for the director of Castello Montenegro is 12 of her average salaries, while the directors of Railway Transport and Railway Vehicle Maintenance are entitled to three average net salaries at the company level. The director of CETI has a severance payment of six net salaries, and the director of RTCG six gross salaries.

The Government is up next

It is necessary for the Government to establish clear guidelines through a new Law on Salaries of Public Sector Employees, which will regulate the manner of signing and amending contracts with executive directors of state-owned enterprises, set salary limits, introduce a unified calculation method, create bonus models that align with company performance, and address the issue of determining appropriate severance amounts in the event of contract termination.

Current legal solutions are incomplete and only apply to loss-making companies, which often ignore them, leading us to report over 60 state and local public enterprises to the Budget Inspectorate last year.

The current complex network of responsibilities and compensation calculations allows too much discretionary power to both boards of directors and the Government in arbitrarily determining coefficient values for individual enterprises. Neither the Government nor Parliament members have yet demonstrated a genuine willingness to address systemic problems in the operation of state-owned enterprises.

Text was created within the project “Civil Society for Healthy, Effective, Sustainable, and Transparent Public Enterprises (BEST SOEs),” supported by the European Union, with co-financing from the Ministry of Public Administration. The content of the text is the sole responsibility of Institute Alternative and does not necessarily reflect the views of the European Union and/or the Ministry of Public Administration.

Posted on

Meeting of NGO representatives with the Supreme State Prosecutor

A meeting between the Supreme State Prosecutor’s Office and representatives of non-governmental organisations was held today, with Dragana Jaćimović, a representative of Institute Alternative, participating.

The meeting was organised with the aim of establishing better, higher-quality, and more cooperative partnerships between the State Prosecutor’s Office and civil society.

Supreme State Prosecutor Milorad Marković informed the NGO sector representatives about the activities carried out by the State Prosecutor’s Office over the past eight months, as well as the plans for the upcoming period.

During the meeting, the representative of Institute Alternative raised questions about the procedures for determining the accountability of prosecutors, the functionality of the automatic data exchange system (interoperability), the working group’s progress in regulating the security of judicial institutions, and how the training system for prosecutors, especially regarding new criminal offences, will be changed.

The participants expressed their readiness for continuous and effective communication and joint actions that will contribute to the improvement of the rule of law in Montenegro.

The meeting with the NGO representatives was also attended by Deputy Supreme State Prosecutor Jelena Đaletić, the heads of the Special, Higher, and Basic State Prosecutor’s Offices in Podgorica, Vladimir Novović, Lepa Medenica, Duško Milanović, and the Secretary of the Prosecutorial Council Secretariat, Hermin Šabotić.