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A year of more openness and a few shortcomings

THE GROUNDBREAKING 2010 measure was prompted by frustration over a series of murky state deals during the last government, like the below-market-value sale of Slovakia’s excess carbon-dioxide emissions quotas to the infamous (and now disappeared) Interblue Group, and the so-called bulletin-board tender awarded to a well-connected sole bidder via a rigged process. Since January 2011 all contracts involving public money and state bodies must be published on the internet in order to be valid.

THE GROUNDBREAKING 2010 measure was prompted by frustration over a series of murky state deals during the last government, like the below-market-value sale of Slovakia’s excess carbon-dioxide emissions quotas to the infamous (and now disappeared) Interblue Group, and the so-called bulletin-board tender awarded to a well-connected sole bidder via a rigged process. Since January 2011 all contracts involving public money and state bodies must be published on the internet in order to be valid.

In the measure’s first full year, the public have been given access to over 110,000 contracts.
But while transparency watchdogs applaud the practice of automatic publication of state contracts as a groundbreaking anti-corruption project, they also say that the system would be more effective if it were made more user-friendly.

“I am certain that the knowledge that every contract will be published and can be subjected to public criticism puts pressure on politicians as well as bureaucrats to be more careful about what contracts they sign,” said Justice Minister Lucia Žitňanská as she marked the first anniversary of the rule.

In addition to the 110,000 contracts published in the central registry, local and regional governments and state institutions publish contracts on their own websites. The official commercial bulletin has also published 4,500 contracts on behalf of local authorities that do not have their own websites, the SITA newswire reported.

According to Matej Kurian of the transparency watchdog Transparency International Slovensko, the practice of publishing contracts, orders and invoices is a fundamental change that could change the culture and probity of the public sector.

“With such a groundbreaking project, it would be a miracle if it was perfect from the beginning,” Peter Kunder, of political ethics watchdog Fair-Play Alliance, told The Slovak Spectator. He added that its first year in practice has shown up shortcomings that will have to be addressed.

Go online

The idea of publishing all public-sector contracts online, which Žitňanská considers to be a first in Europe, germinated back in 2009 in response to a series of shady deals that occurred under the last government, and the problems encountered during efforts to expose the contracts involved.

Žitňanská said that nowhere else in Europe was publicising contracts on the broad scale that now occurs in Slovakia, SITA reported. She added that such an approach does not require sanctions and fines because if a contract is not released within three months it automatically ceases to exist.

In 2009 a proposal to publish contracts failed to make it through parliament after it was blocked by the then-ruling coalition made up of Smer, the Slovak National Party (SNS) and the Movement for a Democratic Slovakia (HZDS). But under the government of Iveta Radičová, elected in June 2010, parliament approved the legislation on December 9, 2010. The Central Registry of Contracts was launched on January 1, 2011, and all institutions falling under the Freedom of Information Act were obliged to publish their contracts online.

Holes to mend

However, the process has not been entirely smooth. Kurian of Transparency International Slovensko says one weakness of the current system is that the contracts are dispersed across numerous websites. He adds that there are insufficient checks on whether state entities are meeting their obligations.

“While contracts for ministries and state administration bodies are published in one place, the regional governments and their budgetary organisations publish contracts on their own websites,” Kurian said. “This dispersal of the contracts fundamentally influences their comparability. A citizen who wants to compare how a similar product is purchased in different places would have to search laboriously for such information.”

According to Kurian, a solution would be to require that all contracts are published in one place, or to oblige the various entities to publish the required data in a format that is technically easy to compare.

“During a year of [the law in] practice, we do not know of a single body that has been penalised for a failure to publish information, though there are suspicions that [contraventions are] happening,” Kurian said. “At the same time, when the state obtains a huge volume of data from the publication of contracts, it would be a pity if it did not use it in a systematic way to monitor uneconomic activity.”

Some data 'blacked out'

The reason why publication of contracts was made compulsory was to make public control possible, said Kunder of Fair-Play Alliance, adding that “this is often not possible because the full text of the contracts is not published. Fundamental data are blacked out, for example with whom the contract is being signed or the price, or addenda forming an inseparable part of the contract are not attached”.

Accompanying information which would allow the contract to be searched is frequently missing, misleading or incomplete, Kunder said. Echoing Kurian, he pointed out that only some contracts are published in the central registry, with the rest spread across hundreds of other websites.

“The contracts are often formulated in a way that does not make it clear, what specifically is being paid for or who is paying, or if unit prices are indicated it is not clear how big the contract is,” Kunder explained.

If the contracts are to be published in several places, it is crucial that a single site is created with information on all the contracts and links to them, Kunder said, adding that then it would be appropriate to link the contracts to the Bulletin of Public Procurement so that information on competition conditions and other details are included.

“The central register of contracts is not user-friendly and lacks several functions that would be useful for people who wish to systematically work with the contracts,” said Kunder.

For instance, it does not allow contracts to be categorised based on different criteria, or comments to be made on them; nor does it allow users of the portal to flag possible mistakes, he added.

Open contracts

The OtvoreneZmluvy.sk project (meaning ‘open contracts’) launched by Transparency International Slovensko and the Fair-Play Alliance last October aspires to rectify some of these shortcomings and empower both citizens and journalists to exercise control over public spending.

The aim of the project is to gather details of all contracts in one place and provide interested parties with the tools to view and check the contracts effectively. For example, unlike in the Central Registry of Contracts, the website allows user to comment on or highlight items, and to receive automatic notifications about contracts they are interested in, said Kurian.

“It seems to us absolutely fine that it is not the state which has developed similar applications,” Kunder explained. “Non-governmental organisations are usually able to carry out such projects faster, cheaper and more flexibly. We would be happy if the state focuses on publishing additional data on how public issues are managed”.

Improving the system?

After its first six months in use the Justice Ministry revised the Freedom of Information Act on October 19, 2011. As of January 2012 only companies that are 100-percent state-owned are required to publish their contracts online.

Kunder said that narrowing the range of firms that must publish their contracts was a retrograde step. He points out that discussion of the ongoing Gorilla case shows that firms in which the state owns less than a 100-percent share can still play a significant role in embezzlement of public funds.

While Kurian agrees that introduction of new exemptions from the obligation to publish is a negative aspect, he notes that one positive change is the specification of groups of data which must be published. He also awards good marks to the simplification of publishing requirements for state-run companies so that “they do not suffer damage on the market, but the public can still control them”.

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