Procurements present greatest risk of corruption in the defense system of Serbia

According to Index’s results, recently presented by the Transparency International UK (TI UK), Serbia’s performance was given a grade „D+“, depicting how a „high corruption risk“ is threatening its defence system.

BCSP’s researchers, who have provided input on Serbia for the TI UK Index, stressed how, despite their best efforts, they haven’t been successful in identifying whether there is a system for managing Serbia’s defence industry; what is the exact character of confidential costs spent by Serbia’s security services or whether individuals who are making decisions on procurement are being regularly rotated (in light of a common anti-corruption measure).

What are the principal findings?

BCSP’s Executive Director Predrag Petrovic warned how in the Security-Information Agency as much as 95% of procurement is exercised through confidential procedure, excluding the public, which does not necessarily lead to corruption, but does represent a risk. MoD’s record in this regard is more favorable, with 15% of procurement handled through such procedures in 2011. 

Petrovic however stated that a grave risk of corruption is still contained in the unlawful „trade (exchange) of information“.

What faults lie in the new Law?

The new Public Procurement Law (PPL), to be in effect from April 1, 2013, brings more detailed regulation of procurement in defence. Some of its provisions, however, are deemed problematic „since their interpretation was left too broad“.

As Transparency Serbia’s Program Director Nemanja Nenadić explained, there are several universal exceptions to the upcoming PPL’s application. For instance, its provisions will not be applied to procurement agreed or based upon international agreements, which is, in his words, a „legally too broad“ provision. While it seems common sensical to exclude provision of goods and labour in international (peacekeeping) operations from the scope of the law, there is no real justification for the authority mandated to the Government of Serbia, to exclude from public all procedures it sees as „vital for national security“.

What are the key MoD objections?

In words of Milan S. Milutinovic, Adviser in the Serbian MoD, through recent Self-assessment which was implemented in partnership with NATO „Building Integrity“ initiative, several specific areas of risk have been identified: procurement, (military system, provision of) healthcare, and selection and admission of new cadre. In the second tier of risks are housing issues; rehabilitation after suffering combat related injuries; travel costs and management of resources (especially immobilities).

Principal objection of the MoD is that, in the course of research, data coming from only one organisation, media reports and different secondary sources of information were used, which „questions the validity of grade being given“.