Corruption serious barrier to sustainable energy system in southeast Europe

30 June 2014, Energy Post

High-level corruption in the energy sector is seriously affecting countries in seven countries in South Eastern Europe, according to the study Winners and Losers: Who Benefits from High Level Corruption in the South East Europe Energy Sector?.

NGOs who authored the report, launched 24 June in Brussels during a High Level Policy Conference, call upon EU institutions to treat the reform of the energy sector in South East Europe as an urgent priority. “The EU needs to pay special attention to the goings-on in the energy sector including privatizations and tendering for new projects, as well as oversee governments plans for investments which often fail to reflect the needs for a sustainable energy future”, said Garret Tankosić-Kelly, principal of the NGO SEE Change Net, speaking ahead of the panel.

The analysis sums up high-level corruption cases hitting the energy sectors in Albania, Bosnia and Herzegovina, Croatia, Kosovo, Macedonia, Montenegro, Serbia and Albania, illustrating how corruption is a major obstacle to the sustainability of these countries’ energy systems. The report includes the case of former Croatian Prime Minister Ivo Sanader who was convicted for receiving a ten million euro bribe from Hungarian company MOL to favour them on the Croatian market, and the alleged mass corruption among the management of Serbian state company EPS which has effectively crippled the firm.

“High-level corruption and weak institutions are serious obstacles on the path to the sustainable energy future of South East Europe”, said Marko Prelec, Executive Director of Balkans Policy Research Group and lead author of the report.

Dejan Milovac, deputy executive director of anti-corruption CSO MANS from Montenegro, said: “We, as a society, don’t want to tolerate the theft of our future. Corruption in the energy sector completely changes the landscape of a country.”

Leila Bičakčić, executive director of Center for Investigative Journalism from BiH, stated that more investigative reports are needed about corruption in the energy sector. “We need to demand greater transparency from the government. That would make it harder for corruption to take place, because with increased transparency of documentation and decision making process it would be harder to be corrupt with so many eyes pointed towards you. The EU needs to put stronger conditionality of the governments of the region that are aspiring to be a part of the EU in the coming future.”

“Around 30 billion euros are planned to be spent in the energy sector in SEE by 2020. The region needs secure sources of power and its people need that power to be clean”, said Prelec. “The states of SEE need to implement these projects in a clean, transparent way, and if they do, the energy sector can be key to ‘de-Balkanising’ the region.”

Dirk Buschle, deputy director of the Energy Community, emphasized that the EU has a good set of laws for the energy sector which can contribute to fighting corruption. “We have transposed these laws at a very high level of compliance with EU standards. The last step on transposing legislation would be to apply it in an open and transparent manner which can prevent corruption and give the institutions an advantage to create trust and remove suspicions of corruption. In the region, institutions, courts and regulatory authorities for energy are weak and under increasing pressure.”

Buschle’s opinion is that a judicial neutral dispute resolution body for the region could be a solution, that could also include cases of corruption and transparency, as an essence of the EU’s experience and reliance on the rule of law.

The full report is available at SEE Change Net’s website at the following link: http://bit.ly/1m9QDoQ

See a map of the corruption cases described in the report here: https://bankwatch.org/SEE-energy-corruption

SEE SEP partner organizations:

SEE Change Net (Bosnia and Herzegovina)
Analytica (Macedonia)
Advocacy Training and Resource Center – ATRC (Kosovo)
CEKOR (Serbia)
Public Interest Advocacy Center (Bosnia and Herzegovina)
Center for Environment (Bosnia and Herzegovina)
DOOR (Croatia)
Environmental Center for Development, Education and Networking (Albania)
Ekolevizja (Albania)
Eko-Svest (Macedonia)
Forum for Freedom in Education – FSO (Croatia)
Fractal (Serbia)
Front 21/42 (Macedonia)
Green Home (Montenegro)
MANS (Montenegro)
CEE Bankwatch Network (Czech Republic)
WWF Mediterranean (Italy)