Civil society against corruption: Results of civic expert assessment of draft laws

06 Feb 2014

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Results of the civic expert assessment of draft laws, which were submitted to Verkhovna Rada of the seventh convocation, show that almost one third of the analyzed bills are tainted with corruption risks. The State budget for 2014 has received particular scrutiny by the experts.

The Civic Expert Council under the Parliamentary Committee on Combatting Corruption and Organized Crime summed up its work on conducting the civic expert assessment of draft laws, which were proposed to be put up for a vote during the third parliamentary session of Verkhovna Rada.

The Civic Expert Council, established in March 2013, has 28 members and was called to help the Committee implement its functions: launching anti-corruption regulatory initiatives, commissioning research, and preparing hearings, round tables and other activities aimed at discussing anti-corruption policies. The Council comprises representatives of civil society organizations and groups that most actively partake in corruption prevention initiatives, alongside independent civic experts.

The work of the Council was further expanded after the May 2013 amendments to the specialized law “On Preventing and Countering Corruption” tookeffect. This allowed the civil society to conduct expert assessments of draft regulations crafted by the members of parliament for possible corruption loopholes. Before the amendments were introduced, only draft laws originating with the executive branch were open for such an assessment. Stimulated by the change, the Expert Council decided to commence analysis of draft laws that would be submitted for possible consideration of the third parliamentary session. The methodology previously supported and tested with the assistance of UNDP in Ukraine in late 2012 through the beginning of 2013 was picked as the most appropriate tool for analysis. At the request of the Parliamentary Committee, 140 draft laws were processed between August - December 2013, and almost one third of those (27%) returned a positive result for corruption risk.

The assessment results, which were made public on the Committee website, show that some of the corruption-generating factors recur much more often than the others. For example, conflicts of laws, loopholes or instances of wide administrative discretion were spotted in 103 legislative norms. At the same time, imbalance of interest was found in 23 instances, excessive contacts between government agencies and business appeared in 5 clauses, and on 7 occasions a government body would be entrusted with both issuing the rules and regulating itself for adherence (thus violating the checks and balances).

During expert work, specialists found both single instances of corruption-related legal norms and cases of what could be termed a “nation-wide corruption scheme”. Draft law 2302(a), for instance, proposed to regulate the procedure for issuing permits for performing price evaluations for real estate. The permit-issuing authority would, according to the law, receive excessively wide and unclear powers in this regard.

At the same time, the draft state budget for 2014 and proposed relevant amendments turned out to be the most “versatile” in terms of corruption-generating factors.

As Viktor Chumak, Head of the Parliamentary Committee on Combatting Corruption and Organized Crime noted, “The closed-off manner that characterized the adoption of the state budget has already created extensive opportunities for dragging corrupt schemes through parliament. For example, the adopted Law on State Budget vests the Cabinet of Ministers with unclear, but rather wide authority as to regulating state-backed credits”. The MP believes that this may open avenues for favouritism aimed at commercial projects beneficial to a narrow circle of higher-up officials and parliamentarians, while shifting the weight of responsibility onto all taxpayers of Ukraine.

A similar situation may be observed with regards to the Ministry of Finance of Ukraine regarding the list of loans that are used to fill in the State Budget’s Special Fund. Systemic problems were also unearthed in connection to disproportionate allocation of subsidies to local budgets for the socio-economic development of certain regions within the framework of the State Fund for Regional development. The majority of such allocations (up to 93% according to experts’ estimates) are channelled to the single-member constituencies of parliamentarians from the ruling party and independent MPs.

As Viktor Taran, Head of the Centre for Political Studies and Analysis and Co-Chair of the Civic Expert Council notes, such trends in cost allocation may testify to “non-transparent manner of cost allocation and use of funds to strengthen the loyalties of voters”. Apart from that, the budget contains risks regarding cancellation of competitive bidding for some types of state procurement by automatically prolonging the agreements, signed in 2013.

While the presence of corruption risks does not automatically translate into criminal activities, such loopholes and conflicts create an enabling environment for all of the adverse consequences that characterize systemic corruption at all levels: syphoning of public funds through opaque procurement schemes, ultimate loss of trust towards state institutions, and the inability to protect one’s rights legitimately. Correction of such mistakes should take place consistently through the review of laws in their first reading.

The Civic Expert Council continues to conduct assessments of corruption risks and refine the mechanisms and tools used throughout the process of civic anti-corruption expert assessment. Amongst the most important issues currently on the agenda is the adoption of mechanisms for obligatory consideration of the expert assessment results before the final adoption of the regulation into action. At the same time, it is important to increase societal pressure in this sphere through more active cooperation between the journalist community and the civil society to bring about more effective awareness-raising for the media audience vis-à-vis those risks that exist when certain regulatory instruments are applied.