ANNUAL REPORT 2005
THE ANTI-CORRUPTION COUNCIL
OF THE GOVERNMENT OF THE REPUBLIC OF SERBIA
During 2005 the Anti-Corruption Council held 17 meetings, considering and adopting reports and initiatives it submitted to the Government and recommending measures for combating corruption.
During 2005 the Council did not accept new members, and the number of its members remained the same since October 2004. Presently the Council has ten members: Ms Verica Barac, President, Mr. Miroslav Milicevic, Vice-President, Ms Jelisaveta Vasilic, Ms Radmila Vasic, Mr. Milic Milovanovic, Mr. Danilo Sukovic, Mr. Stjepan Gredelj, Mr. Dusan Slijepcevic, Mr. Aleksandar Curcic, and Mr. Vladimir Goati.
The OSCE Mission to Serbia and Montenegro is an associated member of the Council, represented by Ms Svetlana Zorbic, who attends the meetings of the Council.
I REPORTS AND INITIATIVES SUBMITTED TO THE GOVERNMENT
During 2005 the Council adopted and submitted to the Government the following:
1.Opinion regarding the amendments to the Regulations of the Republic of Serbia in the field of Privatization recommended to the Government by the Ministry of Economy, recommending to the Government to rescind the recommendations made by the Ministry of Economy (4 February).
- On 9 February, the Ministry of Economy rendered its Expert’s Opinion considered by the Council, and answered on every item; The Council deems that the recommended amendments to the Law on Privatization shall not enhance combating corruption in privatization, instead, those amendments shall enable even greater corruption of this process, first of all because they contribute to the increase of the discretionary power of the public officials, which is contrary to the recommendations and international obligations assumed by our country; The Government did not accept the Council’s recommendations, moreover, without any further explanation it accepted the recommendation made by the Ministry of Economy.
2. The Report on the Company ‘’Dunav osiguranje’’, Joint Stock Company(4 February)
- During the preparation of the report consultations with the management of the company have been made, and additional data have been gathered, which definitely formed the opinion of the Council regarding the possible sources of corruption in this vital Insurance Company and also – in the insurance sector to the full; the Council received no feedback whether the Government considered the Report.
3. The Report on the Company ‘’Mobtel’’ (6 April), in which major aspects of the foundation of the Company, founding capital investments, awarding of a license, and the conclusion of the Annex to the Memorandum of Association of the Company, as well as the problem related to the business operations and distribution of the profit have been analyzed. At the end of the Report the Council gave its conclusions and recommendations to the Government, namely the one recommending the Government to rescind the Conclusion on the Adoption of the Report of the Inter-ministerial Working Group of 24 June 2004, taking into consideration that a key person in its preparation was a men dismissed from the office of the Deputy Minister by the Government due to an indisputable conflict of interest. The Council has not yet received the information whether the Government assessed the prospective damage incurred by the determined conflict of interest.
- We did not receive a feedback whether the Government considered the Report on ‘’Mobtel’’.
4. The third part of the Report on Sugar Exports to the European Union member states (15 April), in which the measures undertaken by the Government of Serbia and the relevant state authorities to resolve the ‘’ sugar affair’’, and revitalize the Serbian sugar industry from the consequences incurred to it by the sugar smuggle in the period between 2001 and 2003, and EU sanctions against sugar export have been analyzed. The Report dealt with the procedure of the privatization of the sugar industry in Serbia; the Council concluded that the activities of the Government and state authorities actually contributed to a further covering up of the ‘’sugar affair’’, and that the sugar industry in Serbia made no significant recovery after the EU sanctions were removed, because no procedures for establishing responsibility for the smuggle which led to the sanctions had been initiated, and that the privatization procedure of the sugar industry in Serbia led to the destruction of the two biggest Serbian sugar refineries in Belgrade and Zrenjanin.
- We did not receive feedback whether the Government considered the third part of the Report on Sugar Exports.
5. Conclusions from the meeting between the Council and the representatives of the Republic and District Public Prosecutor’s Office, recommending to the Government to undertake measures to improve the work of the Prosecutor’s Office and eliminate the obstacles in combating corruption (21 April).
- We did not receive feedback information whether the Government considered the Council’s recommendations.
6. Letter to the Prime Minister with recommendations concerning the alleged corruption of the Deputy Prime Minister, Mr. Miroljub Labus (26 April).
- This letter invoked certain misunderstandings, moreover, the Deputy Prime Minister; Mr. Labus gave a statement to a daily newspaper saying that he himself replied to the Prime Minister concerning the Council’s letter; however, the Office of the Prime Minister gave us an unwritten reply that Mr. Labus did not answer to the Prime Minister in connection with the Council’s letter. After this, we have requested a written statement on numerous occasions, but we have not yet received the written information from the Office of the Prime Minister.
7. Analysis of the Government’s Decree on Funds for Special Purposes, recommending to the Government to rescind this Decree (9 May), because of the inappropriate increase of discretionary powers of the Minister of the Internal Affairs, and factual abrogation of very important provisions of the Law on Public Procurement, which may incur further corruption in the country; on 12 May the Council turned to the Constitutional Court with the same request, in order to verify the accordance between the Decree on Funds for Special Purposes and the Law on Public Procurement.
- Bearing in mind that the Decree on Funds for Special Purposes has remained in force, the Council concluded that the Government did not accept the recommendation of the Council.
8. The Letter in connection with the changes made to the wording of the National Anti-Corruption Strategy adopted by the Working Team for the elaboration of the Strategy, and made arbitrarily by the Ministry of Justice, which later submitted the altered wording to the Government for adoption (25 May). The Council, nevertheless, took an active part in all phases of the elaboration of the National Anti-Corruption Strategy and approved the final version of the Draft Strategy. The Draft Strategy was, however, mysteriously changed in parts the Council deems of vital importance for combating corruption.
- We did not receive feedback information whether the Government considered the Council’s letter; the wording of the National Anti-Corruption Strategy with the changes made by the Ministry of Justice was, unfortunately, adopted.
9. Reminding the Government of the need to continue the work on the resolving of the ‘’sugar affair’’, and a meeting proposal in connection with the third part of the Council’s Report on Sugar Exports to the European Union member states (25 May).
- We did not receive information whether the Government considered this proposal.
10. The Initiative for the Government to take immediate actions within its jurisdiction to establish the rule of law in the Company ‘’ Keramika’’ in Kanjiza (12 August).
- We did not receive feedback information whether the Government considered this Initiative.
11. The Initiative for the Government to take necessary actions enforcing the political parties to fulfill their legal obligations, and submit the final statement for 2004 to the National Assembly’s Committee in charge for finance issues (17 October); at the same time, the Council addressed the Finance Committee with a meeting proposal in order to consider the problems in the implementation of the Law on Financing of Political Parties.
- We did not receive information from the Government, or the Finance Committee whether the recommendations of the Council were considered.
In 2005 the Council also planned to elaborate the report on the efficiency of the Privatization Agency, but due to the Agency’s lack of cooperation and refusal to render the Council the necessary documentation, this report has remained unfinished. Furthermore, the Council was unable to fulfill its full Agenda for 2005 because of constant problems with the funds foreseen for the work of the Council by the Law on Budget of the Republic of Serbia for 2005, which remained unresolved till the very end of this year.
On account of technical problems with the use of the budget funds foreseen for its work, and with two months delay, the Council published the second part of its book
‘’ Corruption, power, state’’ in August, publicizing the Council’s reports submitted to the Government following the publishing of the first part of the book.
II COOPERATION WITH THE GOVERNMENT
In 2005 the Council had only one meeting with the members of the Government, on 16 March, with the Prime Minister, and Minister of Finance, regarding the Report on the National Savings Bank. The meeting did not contribute to clarifying the important issues from the Council’s Report concerning the violation of law and procedure, which remained unsettled (e.g. privileged position of one bank only, by the order of the Governor, to repay the old foreign savings), and the opportunity to resolve some clashing issues in the way the Ministry of Finance and the Republic of Serbia’s Property Administration carried out the order of the Government of Serbia to sell the business premises of the former Money Transfer Service Office (ZOP), which also favored one bank only, namely the National Savings Bank, was missed. The Council proposed meetings to the Government regarding other Council’s reports as well, but we do not have the information whether the Government considered these proposals.
For the most of its reports and initiatives submitted to the Government, the Council did not receive feedback information whether the Government took them into consideration. On many occasions the Council, instead of a reply, had to consider public statements made by the government’s officials, which did not contribute to a better cooperation, or the mutual respect (e.g. the case of the alleged corruption of the Deputy Prime Minister, Mr. Miroljub Labus).
The Council informed the Government that the Ministry of Justice had made arbitrary changes of the wording of the Draft of the National Anti-Corruption Strategy, adopted by the Working Team for elaboration of this document, and by such violation of the procedure deprived of senses the work of the Working Team for the elaboration of the Strategy. The Government, nevertheless, adopted the wording of the National Strategy with the changes made by the Ministry of Justice.
By the Decision of the Commission for the Reform of the Administration of Justice on the establishment of the Working Group for the elaboration of the wording of the Law on Anti-Corruption Agency of 17 May, Ms Verica Barac and Ms Radmila Vasic have been appointed members of the Working Group for the elaboration of the Law on Anti-Corruption Agency.
During 2005 the Council had great difficulties in obtaining the necessary documentation from the Government bodies required for the elaboration of its reports. The Privatization Agency refused to render the contracts concluded with the buyers in the privatization procedure, as well as other documentation indispensable for the preparation of the report on the work of the Agency.
III COOPERATION WITH OTHER ORGANIZATIONS AND INSTITUITIONS
During 2005 the Council continued its cooperation with the OSCE Mission to Serbia and Montenegro, an associated member of the Council, as well as the cooperation with the Office of the Council of Europe in Belgrade established during the preparation of the National Anti-Corruption Strategy. The Council established cooperation with the Office of the UNDP in Belgrade, out of which serious results in 2006 are to be expected, taking into account that the UNDP expressed its interest to realize various anticorruption programs for Serbia together with the Council.
During this year, members of the Council have met on many occasions with the representatives of the international community in Belgrade, and participated in the work of the several international conferences regarding the subject of combating corruption:
1. Meeting with the experts of the Mission for the Elaboration of the Feasibility Study of Serbia and Montenegro organized by the Office of the World Bank in Serbia and Montenegro, held on 23 March in Belgrade;
2. PACO-IMPACT Program Conference, organized by the Council of Europe between 31 March and 1 April in Ohrid;
3. Meeting with Mr. Vladimir Pirosek, and Mr. Andrej Saliner, experts of the Transparency International from Slovakia, held on 6 April in Belgrade;
4. Meeting with the representatives of the embassies of the EU member states in Serbia and Montenegro, held on 4 May in Belgrade, and organized by the OECD Mission to Serbia and Montenegro;
5. Seminar on the elaboration of the Draft Law on State Audit Institution, organized by the OECD, and held on 18 May in Belgrade;
6. Meeting with the representatives of the European Bank for Reconstruction and Development held on 20 May in Belgrade;
7. Meeting with the Secretary of the Australian Embassy in Serbia and Montenegro held on 25 May in Belgrade;
8. Meeting with Mr. Panos Liberakos, Director of the UN Program for Social Development of the South-eastern Europe held on 25 May in Belgrade;
9. The sixth General meeting of the Anti-Corruption Network in the transitional countries (ANC), organized by the OECD between 30 and 31 May in Belgrade;
10. Meeting with the representative of the Monitoring Mission of the Council of Europe, Ms Klaudija Lucani held on 9 June in Belgrade;
11. Meeting with Ms Li Eleln Keli, Head of the Legal Department in the USA Embassy, and Ms Karen Martin, General Consul of the USA Embassy held on 6 July in Belgrade;
12. Meeting with the Vice-President of the European Parliament, Mr. Edvarad McMilan Scot, and the Ambassador of the OECD Mission to Serbia and Montenegro, Mr. Mauricio Massari held on 3 August in Belgrade;
13. Multilateral PACO-IMPACT Program meeting held between 30 and 31 August in Strasburg;
14. Meeting with the representatives of the Council of Europe’s GRECO Project regarding the issue of the evaluation of the anticorruption activities in Serbia held on 15 September in Belgrade;
15. OECD Conference on Implementation of Anti-corruption Measures in Serbia held between 20 and 21 September in Belgrade;
16. The Conference on Combating Corruption organized by the Council of Europe and OECD held between 18 and 19 November in Belgrade;
17. Meeting with the Ambassador of Switzerland in Serbia and Montenegro held on 15 November in Belgrade;
18. Meeting with the representatives of the Monitoring Mission of the Council of Europe held on 7 December in Belgrade;
19. Regional Forum of the Anti-Corruption Institutions of the Eastern Europe organized by the UNDP Regional Centre from Bratislava held between 12 and 14 December in Vienna.