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Georgia

Openness and Accountability of State-Owned Enterprises (GE0080)

Overview

At-a-Glance

Action Plan: Georgia Action Plan 2018-2019

Action Plan Cycle: 2018

Status: Active

Institutions

Lead Institution: LEPL – National Agency of State Property (NASP); Ministry of Economy and Sustainable Development of Georgia

Support Institution(s): Institute for Development of Freedom of Information (IDFI); Georgian Young Lawyers Association (GYLA)

Policy Areas

E-Government, Legislation & Regulation, Legislative

IRM Review

IRM Report: Georgia Design Report 2018-2019

Starred: Pending IRM Review

Early Results: Pending IRM Review

Design i

Verifiable: Yes

Relevant to OGP Values: Access to Information

Potential Impact:

Implementation i

Completion: Pending IRM Review

Description

Commitment 15: Openness and accountability of state-owned enterprises

An important direction of the LEPL – National Agency of State Property (NASP) represents the management/disposal of state-owned enterprises (SOEs). The major objective of management of enterprises by the State is the effective implementation of the functions important for the State. Also, the State tries to develop business rather than act as its competitor. The NASP continues the policy of minimization in relation to state-owned enterrpises.

Such enterprises provoke a special public interest. Studies published by different organizations speak on lack of transparency of SOEs and on the necessity of introducing information accessibility standards therein. In this respect, of importance is the existence of information concerning the enterprises with 100% state sharing under the management of the NASP. At that, the enterprises were committed to proactively publish reports, including both the financial and conceptual parts.

For the purpose of increasing accountability and corporate responsibility of enterprises, it is important that the Agency would develop a corporate management guide, which will define the general enterprise management principles and directions. It is important that the Agency-developed guide would be based on the best relevant international practice.

Commitment 15: Openness and accountability of state-owned enterprises
Lead Agency LEPL – National Agency of State Property (NASP); Ministry of Economy and Sustainable Development of Georgia
Other Involved Actors Public Agency
Civil Society/ Private Sector /International organization Institute for Development of Freedom of Information (IDFI); Georgian Young Lawyers Association (GYLA)
Issues to be Addressed Studies published by different organizations speak on lack of transparency of SOEs and on the low quality of information accessibility standards. The SOEs provoke a special public interest; therefore, it is important that the stand ard of openness and accountability be improved.
Main Objective Increasing transparency of The SOEs activity and establishment of a unified corporate management standard.

OGP Principles Transparency Accountability Civil Participation Technology and Innovation
 
Milestones to Fulfill the Commitment New or ongoing commitment Start date End date
Development by the Agency for state-owned enterprises of a unified template containing the name of enterprise, contact data, information about its establishment, management, capital, activity, state share in its capital; at that, the template shall also indicate the financial standing and outcomes of the enterprise. Information shall be published on the Agency’s web-page nasp.gov.ge June 2018 October 2018
Drafting a state-owned enterprises corporate management guide September 2018 December 2019
Indicator Information about the state-owned enterprises under the unified template has been published on the Agency’s web-page; the corporate management guide for state-owned enterprises has been drfated.
Risks and Assumptions Enterprises failure to specify and audit annual financial plan and/or submit it on time. The project development/approval depends on the passing oth e Law on Entrepreneurs; accordingly, delayed passing of the Law will interfere with the guide drafting.

IRM Midterm Status Summary

Commitment 15: Openness and Accountability of State-Owned Enterprises

Language of the commitment as it appears in the action plan:

“An important direction of the LEPL — National Agency of State Property (NASP) represents the management/disposal of state-owned enterprises (SOEs). The major objective of management of enterprises by the State is the effective implementation of the functions important for the State. Also, the State tries to develop business rather than act as its competitor. The NASP continues the policy of minimization in relation to state-owned enterprises.

Such enterprises provoke a special public interest. Studies published by different organizations speak on lack of transparency of SOEs and on the necessity of introducing information accessibility standards therein. In this respect, of importance is the existence of information concerning the enterprises with 100% state sharing under the management of the NASP. At that, the enterprises were committed to proactively publish reports, including both the financial and conceptual parts.

For the purpose of increasing accountability and corporate responsibility of enterprises, it is important that the Agency would develop a corporate management guide, which will define the general enterprise management principles and directions. It is important that the Agency-developed guide would be based on the best relevant international practice”

Milestones: 

  1. Development by the Agency for state-owned enterprises of a unified template containing the name of enterprise, contact data, information about its establishment, management, capital, activity, state share in its capital; at that, the template shall also indicate the financial standing and outcomes of the enterprise. Information shall be published on the Agency’s web-page nasp.gov.ge
  2. Drafting a state-owned enterprises corporate management guide 

Start Date: June 2018

End Date: December 2019

Editorial note: For the full text of this commitment, please see https://www.opengovpartnership.org/documents/georgia-action-plan-2018-2019/.

Context and Objectives

This commitment aims to address the current lack of transparency related to state-owned enterprises (SOEs) in Georgia. Important information on SOEs—such as annual financial reports, audit reports, administrative expenses, procurement, management policies, and number of employees—is not available publicly. Moreover, according to civil society research from 2015, [78] Georgia lacks specific regulations for minimum transparency standards for SOEs in Georgia. Most SOEs either do not have a webpage or the information published is limited and outdated. SOEs operate under the general management of LEPL.

The National Agency of State Property (NASP) provides information limited to SOE titles, identification codes, fields of operation, equity shares, addresses, and director names. The 2019 updated list on the NASP webpage counts 92 SOEs, [79] while only 28 provide contact information for the person responsible.

According to Transparency International (TI) Georgia, the lack of transparency around SOEs poses challenges in fighting corruption. For example, the procedures for appointing SOE directors or board members are not transparent, and the legislation does not regulate the criteria or the legitimate goals for the establishment of SOEs. This absence of standards entails high risks of conflicts of interest, nepotism, and corruption, as well as decisions being motivated by personal and/or political interests. According to TI–Georgia, anti-corruption mechanisms must be strengthened through the introduction of transparency, accountability, and integrity standards for SOEs. [80] They suggest the introduction of mechanisms for proactive disclosure of various types of information and the extension of freedom of information standards to SOEs. [81] 

NASP aims to enhance transparency of SOEs (i.e., those established with 100 percent state contribution) by first creating a standard template with basic information about the enterprise. Such information would include data on the director, capital, projects, and more. NASP would publish this data on nasp.gov.ge. Secondly, NASP would draft a corporate management guide for such enterprises. Accordingly, this commitment is relevant to the OGP value of access to information. The main activities (the standards, SOE information, and corporate management guide) are verifiable.

If fully implemented as written, this commitment could represent a minor but important preliminary step toward improving transparency of SOEs. Namely, the introduction of unified standards could trigger disclosure of more detailed information that is currently not publicly available, such as administrative expenses, number of employees, and financial and audit reports. The commitment could also encourage more SOEs to publish information proactively.

According to stakeholders, this initiative is an important first step, as SOEs are perceived to be the “nest” for nepotism and corruption in Georgia. [82] However, this commitment is limited in scope, due to its encouraging nature. That is, it does not mandate disclosure of information that would be institutionalized by specific transparency and accountability legal norms. In addition, the commitment is limited in scale. It focuses only on 100 percent state sharing, which represents only 53 of 98 SOEs (54 percent). The state holds the control stock in 73 percent of SOEs. Thus, the commitment leaves out 19 percent of the enterprises with control stock owned by the state. [83]

Next steps

The IRM researcher recommends carrying this commitment forward to the next action plan, provided that disclosure of detailed and up-to-date information is institutionalized through relevant legal norms and will extend to all state-owned enterprises (SOEs). Furthermore, a future commitment could clarify if SOEs’ own procurement tenders will be made available.

[78] Institute for Development of Freedom of Information and Georgian Young Lawyers’ Association, Management Transparency and Accountability of State-Owned Enterprises in Georgia, 2016, https://bit.ly/2YTzcVk.

[79] National Agency of State Property, “List of State-Owned Enterprises,” https://bit.ly/30xTOTK.

[80] Ilia State University, Study: State-Owned Enterprises in Georgia, 2018, https://bit.ly/2NSmVj2.

[81] Transparency International–Georgia, State-Owned Enterprises in Georgia: Transparency, Accountability and Prevention of Corruption, 2016, https://bit.ly/2Y4rF95.

[82] IRM researcher’s focus group discussion with experts, researchers, and master’s students of public administration, 18 June 2019.

[83] National Agency of State Property, “List of State-Owned Enterprises,” https://bit.ly/30xTOTK.


Commitments

  1. Improved Public Services

    GE0066, 2018, Capacity Building

  2. Citizen Engagement Platform

    GE0067, 2018, Capacity Building

  3. Unified Authentication System

    GE0068, 2018, E-Government

  4. Economic Governance

    GE0069, 2018, E-Government

  5. Environment Portal

    GE0070, 2018, E-Government

  6. Strengthen Anti-Corruption Institutions

    GE0071, 2018, Anti-Corruption

  7. Monitor SDGs

    GE0072, 2018, Capacity Building

  8. Citizen Engagement Legislation

    GE0073, 2018, Legislation & Regulation

  9. Publish Court Decisions

    GE0074, 2018, E-Government

  10. Increasing Transparency of the Ministry of Internal Affairs

    GE0075, 2018, E-Government

  11. Citizen Participation in Public Finance

    GE0076, 2018, Anti-Corruption

  12. Transparent Public Funding System

    GE0077, 2018, Fiscal Openness

  13. Public Procurement Improvements

    GE0078, 2018, Access to Information

  14. Housing Policy Planning

    GE0079, 2018, Land Rights and Spatial Planning

  15. Openness and Accountability of State-Owned Enterprises

    GE0080, 2018, E-Government

  16. Transparency and Good Governance

    GE0081, 2018, Legislation & Regulation

  17. Open Data Collection and Publication

    GE0082, 2018, Access to Information

  18. Participation for Disabled Individuals

    GE0083, 2018, Infrastructure & Transport

  19. Participatory Budgeting

    GE0084, 2018, Capacity Building

  20. Your Idea for the Zugdidi Mayor

    GE0085, 2018, Capacity Building

  21. Electronic Services

    GE0086, 2018, E-Government

  22. I. Gov. Zugdidi

    GE0087, 2018, Capacity Building

  23. Service and Citizen Satisfaction Assessment

    GE0088, 2018, Capacity Building

  24. Promoting and Monitoring SDGs

    GE0089, 2018, Legislative

  25. Citizen Involvement in Budget

    GE0090, 2018, E-Government

  26. Technology for Transparency

    GE0091, 2018, E-Government

  27. Citizen Engagement Center

    GE0092, 2018, Capacity Building

  28. Raising Public Awareness About Parliamentary Democracy

    GE0093, 2018, E-Government

  29. Electronic Innovations for More Transparency and Efficiency of Public Procurement

    GE0056, 2016, Anti-Corruption

  30. Starred commitment Adoption of the Environmental Assessment Code

    GE0057, 2016, Anti-Corruption

  31. Introduction of a Mobile App as an Alternative Channel to Connect to “112”

    GE0058, 2016, E-Government

  32. Development of Local Councils for Crime Prevention

    GE0059, 2016, Justice

  33. Development of a Guidebook for Economic Agents

    GE0060, 2016, Capacity Building

  34. Development and Introduction of the Quality Control Program of Commercial Service

    GE0061, 2016, Capacity Building

  35. Presentation of Company Reports in an Electronic Form and Provision of Their Accessibility

    GE0062, 2016, Capacity Building

  36. Introduction of an Electronic Petition Portal and “Zugdidi-INFO” on the Webpage of Zugdidi Municipality Assembly

    GE0063, 2016, Capacity Building

  37. Transparency of Ozurgeti Municipality Assembly Meetings

    GE0064, 2016, Capacity Building

  38. Creation of Electronic Mechanism for Local Budget Planning in Kutaisi, Ozurgeti, Batumi and Akhaltsikhe

    GE0065, 2016, E-Government

  39. Adapting the Public Service Hall to the Needs of the People with Disabilities

    GE0042, 2016, Capacity Building

  40. Launch of the Unified Healthcare System Information Portal

    GE0043, 2016, Capacity Building

  41. Introduction of Electronic Licensing System in the Field of Natural Resources Application

    GE0044, 2016, Anti-Corruption

  42. Creation of Spatial (Geographic) Data Web-Portal for the Energy Sector

    GE0045, 2016, Capacity Building

  43. Creation of Innovation Ecosystem

    GE0046, 2016, Capacity Building

  44. Electronic Portal for Registering and Disposal of State Property – Customer’S Module

    GE0047, 2016, E-Government

  45. Development of the Freedom of Information Law

    GE0048, 2016, Access to Information

  46. Development of a Monitoring and Assessment System of the Government Policy and Legislative Acts

    GE0049, 2016, Capacity Building

  47. Starred commitment Introduction of the Public Officials’ Asset Declarations Monitoring System

    GE0050, 2016, Anti-Corruption

  48. Establishing Unified Regulations to Publish Court Decisions

    GE0051, 2016, Judiciary

  49. Development of Transparency and Integrity Strategy and Action Plan in the Field of Regional Development and Infrastructure

    GE0052, 2016, Capacity Building

  50. Improvement of the Database of the Convicted and Transfer of the Penitentiary Department Entirely Onto the Electronic Workflow Management

    GE0053, 2016, Capacity Building

  51. Publication of Phone Tapping Data According to the Nature of the Crime and Geographic Area

    GE0054, 2016, E-Government

  52. Starred commitment Increasing Citizen Participation in Supervision of Public Finances (Public Audit)

    GE0055, 2016, Capacity Building

  53. "Voice of the Consumer"

    GE0013, 2014, Public Participation

  54. JUSTdrive

    GE0014, 2014, Public Service Delivery

  55. Educational Services

    GE0015, 2014, Education

  56. Citizen's Portal (Www.Mygov.Ge)

    GE0016, 2014, Capacity Building

  57. Transformation of Public Libraries for Regional Development

    GE0017, 2014, Capacity Building

  58. Digital Signature and Online Authentication

    GE0018, 2014, E-Government

  59. Open Data Portal (Data.Gov.Ge)

    GE0019, 2014, Access to Information

  60. Freedom of Information Act (FOIA) Draft

    GE0020, 2014, Access to Information

  61. Georgia's OGP Forum

    GE0021, 2014, Public Participation

  62. I-Change.Ge

    GE0022, 2014, E-Government

  63. Transparency of Public Service Recruitment

    GE0023, 2014, E-Government

  64. Asset Declaration Monitoring System

    GE0024, 2014, Anti-Corruption

  65. Starred commitment Political Party Financial Declarations

    GE0025, 2014, Access to Information

  66. Accessibility of Ministry of Interior's Webpage to People with Special Needs

    GE0026, 2014, E-Government

  67. Starred commitment Proactive Publishing of Surveillance Data

    GE0027, 2014, Civic Space

  68. Public Awareness of the Electoral Process

    GE0028, 2014, Capacity Building

  69. Transparency of Budgetary Processes

    GE0029, 2014, E-Government

  70. Electronic System of Procurement

    GE0030, 2014, Anti-Corruption

  71. Digital Human Resource Management System

    GE0031, 2014, E-Government

  72. Digital Preservation System: E-Archive

    GE0032, 2014, E-Government

  73. Openness and Accessibility of National Archives

    GE0033, 2014, E-Government

  74. Electronic Catalogues of Ministry of Internal Affairs (MIA) Archives

    GE0034, 2014, E-Government

  75. Public Finance Management System

    GE0035, 2014, E-Government

  76. Alternative Channels to "112"

    GE0036, 2014, E-Government

  77. Interactive Statistics and Crime Mapping

    GE0037, 2014, E-Government

  78. Travel Insurance Services

    GE0038, 2014, Citizenship & Immigration

  79. State Property Registration

    GE0039, 2014, Public Service Delivery

  80. Development of Community Centers in Georgia

    GE0040, 2014, E-Government

  81. Introduction of e-Governance in Local Self-Governments

    GE0041, 2014, E-Government

  82. Public Service Hall-Hub of Public Services

    GE0001, 2012, Access to Justice

  83. e-Governance in Local Governments

    GE0002, 2012, E-Government

  84. Citizens’ Portal

    GE0003, 2012, E-Government

  85. Easily Accessible and Better Healthcare

    GE0004, 2012, E-Government

  86. Launch Ichange.Ge and Data.Gov.Ge

    GE0005, 2012, E-Government

  87. Platform for Participating in the Legislative Process

    GE0006, 2012, E-Government

  88. Citizens and Justice

    GE0007, 2012, Access to Justice

  89. Starred commitment Transparent Party Financing

    GE0008, 2012, Political Integrity

  90. Home-Grown Concept of E-Procurement

    GE0009, 2012, Anti-Corruption

  91. e-Declarations

    GE0010, 2012, Anti-Corruption

  92. Technology Cares for Safety: ICCMS, Crime Mapping, and Safety in Your Neighbourhood

    GE0011, 2012, E-Government

  93. NGO Forum

    GE0012, 2012, Capacity Building

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