Negligence in paying a long-overdue VAT refund, failure to fulfil state the financial obligations of state enterprises under a service contract, undue delay in issuing building permits: these are some examples of more than 500 complaints that Ukraine’s Business Ombudsman Council received in its first six months of operation. The establishment of the Business Ombudsman in May 2015 was a major step towards improving the investment climate in the country.
The Council is a key element of the investment climate reform agenda agreed between the Ukrainian government, international organisations – including the EBRD – and Ukrainian business associations. It is funded by the donors of the EBRD-Ukraine Stabilisation and Sustainable Growth Multi-Donor Account.
“We thoroughly investigate each matter to help Ukrainian entrepreneurs do business in a fair and transparent environment without being subjected to harassment, unfair business practices and corruption,” said incumbent Ombudsman Algirdas Šemeta, a former EU Commissioner for Taxation and Customs Union, Audit and Anti-Fraud.
Investment Climate and Good Governance Initiative
The Business Ombudsman is a prime example of how we support reform-minded governments and our corporate clients to improve the business environment in our region, through the EBRD’s Investment Climate and Governance Initiative.
Poor corporate and public governance are serious obstacles that hinder transition to market economies in many of our countries. Surveys such as the Business Environment and Enterprise Performance Survey (BEEPS) clearly show the impact of weak governance and corruption on starting, operating and expanding businesses, and on foreign investment.
To tackle this issue we focus on strengthening areas of economic governance that directly affect the private sector: business regulation, legal frameworks and judicial capacity, procurement policies and practices, and incentives to reduce corruption.
For instance, a well-coordinated dialogue between the public and private sectors is a vital ingredient for sustainable economic growth. That’s why the EBRD and its donors support independent investment councils – platforms for public-private dialogue where businesses and policymakers in six countries come together to tackle challenges related to the investment climate, in a results-oriented fashion. Last year Moldova and Tajikistan improved their ranking in the World Bank Group’s Doing Business survey; progress was seen in areas such as starting a business or trading across borders – both important topics among government policy-makers and business leaders in the councils.
And in 2015, the EBRD helped the Albanian and Georgian authorities to set up investment councils, supporting their independent secretariats with funding from Italy and the UK, respectively.
Through benchmarking and technical assistance, we also encourage best practice in procurement for public and private sector projects. Donors including the Central European Initiative, Italy, the Slovak Republic and the TaiwanBusiness-EBRD Technical Cooperation Fund sponsored a master’s degree in procurement management specifically designed for public-sector procurement officials from EBRD recipient countries. The course was developed by the EBRD and Tor Vergata University of Rome. It focuses on professional capacity, ethics, transparency and accountability. The class of 2015 will add new graduates to a total of 91 from 22 countries and 67 institutions. When these graduates return to their home countries, their knowledge will be directly transferrable into national policy development.
We also aim to enhance legal frameworks in our region by working with local authorities to improve economic regulations that govern competition, inspections and business registries. With dedicated technical cooperation activities, we bolster the capacity of judges to assess commercial law cases and enhance the role of the courts in adjudicating business disputes.
In 2015, for example, the EBRD rolled out its first legal courses in the southern and eastern Mediterranean (SEMED) region, under the auspices of Jordan’s Ministry of Justice. The pilot training, which involved 160 judges, is covering priority areas identified by the scientific committee of the Judicial Institute of Jordan: competition, intellectual property and the enforcement of arbitration awards. All three areas are important in a well-functioning market economy.
Policies and institutions matter; accountability, transparency, rule of law and effective bureaucracy are as vital as investments when it comes to re-energising transition. During 2015, donors such as Italy, Luxembourg, the SEMED Multi-Donor Account and the EBRD-Ukraine Stabilisation and Sustainable Growth Multi-Donor Account, as well as the EBRD Shareholder Special Fund, helped us make a difference in many of these areas.