Transparent Public Procurement in Serbia

Transparent Public Procurement in Serbia

YEARS: 2011-2012
THEME: Procurement

Lack of transparency in public procurements related corruption is one of the biggest national level problems in Serbia. Corruption in public procurements, institutions and measures for fight against it are essential political and socioeconomic issue at all levels – from local, national to international level (due to their importance for Serbia’s on-going the European Union integration process). Public procurement, as specific source of corruption, is the most dangerous among central level institutions, thus the project Transparent Public Procurements for Less Corruption in Serbia was focused on national level in all phases of implementation (monitoring and advocacy). Serbia is highly centralized country, governed by extremely centralized political parties; all problems in performance of public procurement system are most vivid on a national level. Public sector, which is obliged to respect public procurement procedures, is enormously big in Serbia: more than one third of all employees work for some governmental institution, public enterprise or public service.

The Toplica Center for Democracy and Human Rights and other CSOs, members of the Coalition for Monitoring of Public Finances, persistently worked on awareness rising on importance of public procurements and its highest potential for corruption. As a result, our estimation that minimum of 10% to 20% of entire amount for public procurements is Serbia is lost in corruption become official, Governmental position they stated in the Parliament during debate about the new Law on Public Procurements in December 2012. Thus, we, and now the Government, are talking about a figure of approximately 600 million EUR (780 million USD) that could be saved every year in transparent public procurements without corruption, and used for socioeconomic development and alleviation of the deep problems that Serbia is facing.

Legal framework for fight against corruption is slowly improved, but independent anti-corruption institutions which should implement it remain weak, due to lack of commitment on the Governmental side and sometimes open obstacles (the fact that Serbia established the State Audit Institution as the last country in entire Europe, is a clear example of lack of understanding in the highest political level). Nevertheless, after years of troubled reforms anti-corruption institutional framework is there, institutions and independent regulatory and control bodies are established and urgently need public, political support and cooperation among themselves and civil society.

Prosecutors are still under decisive pressure of executive power, and still recognized as weakest link.  This is particularly evident in corruption in public procurement. Until recently (Fall 2012) prosecutor did not start a single investigation or criminal charge against ministries or any governmental officials, although there was enough evidence available in the media and independent reports produced by CSOs (among them reports of the Toplica Center and Coalition for Monitoring of Public Finances) and reports of independent institutions (even some of reports are, according to the law, submitted and accepted by the Parliament). This is slowly changing in recent months, some important corruption cases are started by the end of 2012, due to the change of government after elections in May 2012.

Although national documents (Anti-corruption Strategy and Action Plan, the Law on Anti-corruption Agency), and in 2005 ratified UN Anti-Corruption Convention of 2003 undoubtedly point CSOs as important stakeholder and actor, there was still a problem in acknowledgement of CSOs in anti-corruption policies and measures. This project particularly addressed issue of anti-corruption CSOs’ recognition by official anti-corruption institution. This was a reason why highly visible and consolidated citizens’ participation in anti-corruption policies and joint actions with anti-corruption institutions and prosecutors was so needed. It was particularly visible in legislative activities, related to resistance to the retrograde draft Law on Public Procurements, proposed by the previous Government, in the period December 2011–March 2012, and constructive participation in public discussion on much improved the new Law on Public Procurements, proposed by the new Government, during Autumn 2012, until its adoption by the Parliament on December 29, 2012.

To conclude, the project specifically dealt with CSOs contribution to the problem why existing institutional mechanism of public procurements produces such a big prospect for corruption, why it is so inefficient and how the performance of the system should be improved. Thus, the project purpose (specific objective) was focused on improvement of institutional mechanism, recognized on several levels:

  • The problem of lack of transparency and public monitoring of public procurements, and the problem of availability of information in various public sector institutions (thus this problem was explored in three representative cases: ministry, public enterprise and public services);
  • One of the main reasons for the scale of corruption in public procurements were legal solutions, namely laws which define procedure of procurements in public institutions, laws which protect transparency (availability of public information for CSOs and media, known as the Freedom of Information Act), and laws which regulate jurisdiction and performance of public institutions which are in-charge for good execution of public procurement procedures and for fight against corruption;
  • The problem of lack of implementation of existing legal solutions and performance of authorities, since many legal opportunities are already adopted and available, but there is no adequate utilization of existing instruments by relatively new independent institutions with (on a paper) great authority and power: The State Audit Institution,  – the Agency for Fight Against Corruption,  – the Public Procurement Office,  – the Commission for the Protection of Bidders’ Rights, , and  – the Office of Commissioner for Information of Public Importance;
  • The problem how institutions in charge react in a case when other public institution, CSOs or media identify and report about overspending for service or goods and potential corruption behind it;
  • The problem of performance of judiciary and particularly public prosecutors: how do they handle information about potential corruption in public procurements, how do they decide will they or not start investigation (for which they already have full jurisdiction) in cases where there is publicly reported overspending and serious violation of procedures for public procurements;
  • Lack of coordination and networking among independent anti-corruption institutions and public prosecutors on one side, and competent anti-corruption CSOs and media (which are ready and courageous to deal with corruption cases) on the other side.

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