LOBBYING LANDSCAPE IN CROATIA

Lobbying is not regulated in Croatia. There is no obligation for lobbyists to be registered and no transparency standards are set in this field. Although over time there has been some reflection at government level on the possible regulation of lobbying, no legislative initiative has materialised to date. Some ad-hoc initiatives are being implemented, such as that of the Croatian Society of Lobbyists consisting of 80 members, which has taken steps to promote ethics and transparency in lobbying activities, including the setting-up of a voluntary registration system

In Croatia, lobbying is considered as ”selling influence” and this causes lots of problems in the not-yet-defined lobbyist profession.

Implementation of a lobbying regulatory framework would enable the profession to develop, protect Croatian lobbyists and their clients, and inform the public about who lobbies, why and for whom.

The Croatian Lobbyist Association (since 2008) is one of the strongest advocates for the adoption of a lobbying law and calling for

• A mandatory registration of everyone who wants to influence government bodies;
• Accreditation of interest representatives – in the form of an entry clearance for the Parliament;
• Sanctions for those who want to influence public policy and government decisions but do not want to register.

Doing business without a specific law on a profession as important as lobbying, is very risky in societies that are still struggling to grasp the concept of lobbying. Regulation of lobbying in Croatia would lead to greater transparency as it would eliminate shadow lobbying in various industries. Political will in Croatia is what is missing at this time. It should be understood that a lobbying law would be a strong anti-corruption tool.

A number of safeguards are in place (e.g. code of ethics for civil servants, hotlines to report corruption, internal control mechanisms in most of the public administration bodies) to ensure integrity within the Croatian public administration. Still, bribery and the use of connections is often the easiest way to obtain certain public services in Croatia . With the appointment of each new government, systematic reshuffles of public officials in mid-management positions create a climate of instability and contribute to the perception of favouritism in the public administration.

As regards state-owned companies, while public officials covered by the Conflict of Interest Prevention Act cannot be members of these supervisory boards, members of their political parties can. Some general criteria apply to the background of the nominees for such position, but these do not relate to expertise in that particular field or experience on similar boards. It is not entirely clear how ex ante and ex post integrity checks are carried out for these appointments or how actual, potential or apparent conflicts of interests are checked before and after the appointment. Moreover, the state-owned companies have discretionary rights to make donations or grant sponsorships without following transparent and competitive procedures. It should be noted that there is a total ban on state-owned companies making donations to political parties or to politicians.

Ethics in politics remains an outstanding issue with high-level corruption at both central and local level. A the local level (i.e. mayors, heads of municipalities),corrupt practices can be found at the interface between politicians and businesses, notably in areas such as urban planning, land acquisition, exchange of land, construction and the granting of loans.

Currently there are no codes of conduct for elected officials at central and local level. Such codes of conduct, accompanied by regulatory provisions on sanctions applicable in case of breaches of ethical rules, would enhance integrity and accountability standards and ensure a wider range of non-criminal sanctioning of unethical behaviour to the detriment of the public interest. Given the particularities of non-criminal sanctions applicable to elected officials as compared with other categories of public official (i.e. appointed officials, civil servants, etc), it would also ensure more effective implementation of integrity rules through self-regulation.

Although an Electoral Code of Ethics has been in force since 2007, research shows that vote buying is not yet eradicated in Croatia. The practice of offering goods, favours and money to attract voters was in evidence during the last local and national elections.

In March 2013, a web portal and public procurement electronic database was launched by a local NGO as a result of an EU-funded project. The database consolidates information on the implementation of public procurement procedures and companies involved and is available to the public free of charge. It also contains information on the assets and interests of public officials, in line with asset disclosure rules. Such aggregated data allow the carrying out of cross-checks. The impact of corruption-related offences on public procurement in Croatia has been estimated at 10 to 15% of the value of public contracts. Croatian businesses consider that corruption is widespread in public procurement managed by national authorities and that the following practices are widespread in public procurement procedures: specifications tailor-made for particular companies; abuse of negotiated procedures ; conflicts of interests in the evaluation of the bids ; collusive bidding ; unclear selection or evaluation criteria ; abuse of emergency grounds to avoid competitive procedures ; and amendments of contractual terms after conclusion of contract. Tailor-made specifications targeting certain companies appear to be one of the most frequent irregularities associated with public procurement in Croatia. These indicators, while not necessarily directly related to corruption, illustrate risk factors that increase vulnerabilities to corruption in public procurement procedures.

The ex ante and ex post control mechanisms for public procurement procedures and the implementation of public contracts could be further improved. Sound risk assessment tools are not being systematically used, in particular at local level. There appears to be no prioritising of vulnerable sectors where corruption risks are more prominent. There is no systematic publication by (central or local) administrative entities of annual accounts and balance sheets, including details on costs of public works and contracted services. In order to address some of these shortcomings, the Ministry of Justice has started monitoring the level of transparency of local governments, including on issues relating to public procurement.

FUTURE STEPS

Croatia has made considerable efforts to improve the anti-corruption framework, although implementation has still to demonstrate sustainable results. In the field of law enforcement, the Bureau for Combating Corruption and Organised Crime (USKOK) is carrying out important high-level corruption investigations. There appears to be more emphasis on repression of corruption than on prevention, and the overall sanctions applied, with the exception of some notable high-level cases, appear to be insufficient deterrents. Favouritism and politicising of the public administration, as well as integrity standards in politics, remain causes for concern. More steps need to be taken to strengthen anti-corruption safeguards concerning state-owned companies. Further key issues include: the verification mechanisms for conflicts of interest and asset disclosure of public officials; risk control in public procurement; the protection of whistleblowers; and the need to address effectively corruption risks in the healthcare sector.

The following points require further attention:

• Carrying out substantial checks of the asset declarations and conflict of interests of public officials at central and local levels, ensuring prioritisation of checks, improved methods and techniques of verification, including use of electronic tools, access to relevant information, cooperation with other authorities and accessibility of public interest information in a user-friendly format.
• Ensuring that the Conflict of Interest Commission has sufficient powers to impose deterrent sanctions.
• Ensuring a fully professional and merit-based recruitment, promotion and dismissal system for public officials at mid-management and lower levels.
• Developing comprehensive codes of conduct for elected officials at central and local level and ensuring corresponding accountability tools and dissuasive sanctions for potential violations of such codes.
• Establishing an effective mechanism for prevention of corruption in state-owned and state-controlled companies, including aspects relating to donations and sponsorships. Ensuring implementation of effective anti-corruption action plans within state-owned and state-controlled companies to promote comprehensive prevention policies, effective reporting mechanisms and high accountability standards. Ensuring access to public interest information relating to these companies presented in a user-friendly format.
• Implementing a comprehensive strategic approach to preventing and reducing corruption risks in public procurement at both central and local levels, including effective monitoring of the implementation of transparency and access to public information rules, systematic risk assessments, prioritisation of controls in vulnerable sectors and procedures, enhanced checks on compliance with public procurement rules and on the implementation of public contracts. Ensuring effective control mechanisms in the healthcare sector, including public procurement aspects.
• Implementing effective protection mechanisms and raising awareness in both the public and private sectors for whistleblowers who report corruption and malpractice.