Corruption serious barrier to sustainable energy system in southeast Europe, says new report

June 24, Brussels, Belgium – High-level corruption in the energy sector is affecting countries in South Eastern Europe, with tens of millions of euros being lost over the last decades in seven countries from the region[1] Winners and Losers: Who Benefits from High Level Corruption in the South East Europe Energy Sector? launched today in Brussels during the High Level Policy Conference[2] of EU Sustainable Energy Week 2014[3].

NGOs authoring the corruption report call upon the EU institutions to treat the reform of energy sector in South East Europe as an urgent priority. “The EU needs to pay special attention to the goings-on in the energy sector including privatizations and tendering for new projects, as well as oversee governments plans for investments which often fail to reflect the needs for a sustainable energy future”, said Garret Tankosić-Kelly, principal of SEE Change Net, speaking ahead of the panel.

The analysis sums up high-level corruption cases hitting the energy sectors in countries from the former Yugoslavia plus Albania, illustrating how corruption is a major obstacle to the sustainability of these countries’ energy systems. The report includes the case of former Croatian Prime Minister Ivo Sanader who was convicted for receiving a ten million euro bribe from Hungarian company MOL to favour them on the Croatian market, or the alleged mass corruption among the management of Serbian state company EPS which has effectively crippled the firm.
“High-level corruption and weak institutions are serious obstacles on the path to the sustainable energy future of South East Europe”, said Marko Prelec, Executive Director of Balkans Policy Research Group and lead author of the report.

Speaking about the content of the report, Dejan Milovac, deputy executive director of anti-corruption CSO MANS from Montenegro, said: “We, as a society, don’t want to tolerate the theft of our future. Corruption in the energy sector completely changes the landscape of a country.”
Leila Bičakčić, executive director of Center for Investigative Journalism from BiH, stated that more investigative reports are needed about corruption in the energy sector. “We need to demand greater transparency from the government. That would make it harder for corruption to take place, because with increased transparency of documentation and decision making process it would be harder to be corrupt with so many eyes pointed towards you. The EU needs to put stronger conditionality of the governments of the region that are aspiring to be a part of the EU in the coming future.”

“Around 30 billion euros are planned to be spent in the energy sector in SEE by 2020. The region Needs secure sources of power and its people need that power to be clean”, said Prelec. “The states of SEE need to implement these projects in a clean, transparent way, and if they do, the energy sector can be key to ‘de-Balkanising’ the region.”

Dirk Buschle, deputy director of Energy Community, emphasized that the EU has a good set of laws for the energy sector which can contribute to fighting corruption. “We have transposed these laws at a very high level of compliance with EU standards. The last step on transposing legislation would be to apply it in an open and transparent manner which can prevent corruption and give the institutions an advantage to create trust and remove suspicions of corruption. In the region, institutions, courts and regulatory authorities for energy are weak and under increasing pressure.”

Buschle’s opinion is that a judicial neutral dispute resolution body for the region could be a solution, that could also include cases of corruption and transparency, as an essence of the EU’s experience and reliance on the rule of law.

Press release is available for download below. Click here for full report.