Putin backs business watchdogs
A team of prosecutors and an ombudsman will oversee entrepreneurial rights
Anna Sulimina - Moscow News - themoscownews.com - 5.28.12 - JRL 2012-98
The protection of business rights is to be given a higher profile in President Vladimir Putin's new administration with the creation of two watchdogs: a special department within the Prosecutor General's Office to oversee the protection of businesses' rights, and a Business Ombudsman's Office to take up entrepreneurs' complaints.
The Prosecutor General's Office department "will allow a reduction in the administrative burden on business... and guarantee the protection of rights of any entrepreneur if they are violated," prosecutors' spokeswoman Marina Gridneva was quoted by RIA Novosti as saying.
The move to have the Prosecutor General's Office guarantee entrepreneurs' rights may strike some investors as a little odd, as it has played a controversial role in many high-profile, politicized cases where arbitrary actions have been taken against investors.
In another twist, the department will be headed by First Deputy Prosecutor General Alexander Buksman, who played a prominent role in the Yukos case. As head of the Justice Ministry's administration, Buksman oversaw the sale by state auction of Yuganskneftegaz, Yukos' key production asset, in December 2004.
After being bought for a bargain price of $9.4 billion by a littleknown firm, Baikal Finance Group, the production unit was sold on a few days later to Rosneft.
The original idea for the new watchdogs came from outgoing President Dmitry Medvedev, who advocated that either a business ombudsman's office or a department within the Prosecutor General's Office should monitor business rights. Under Putin, however, both projects will go ahead simultaneously.
Nominations invited
Putin has asked business lobby groups to nominate two candidates each for the role of business ombudsman. The ombudsman's office, aimed at defending the rights of entrepreneurs, could be created by the fall, Deputy Prime Minister Arkady Dvorkovich said Friday.
The ombudsman is expected to come from a business background and be familiar with the work of officials and bureaucratic procedures.
"This person should be a public figure, but also have the authority to solve businessmen's problems and initiate court cases against officials and law enforcement bodies," said Ekaterina Shapochka, an expert with Medvedev's Open Government project and head of government and public sector services at PwC Russia. "Also, this person would communicate with the special department in the Prosecutor General's Office."
The move to protect business rights comes after Putin declared that improving the country's business climate was a top priority in his decrees published on the day of his inauguration. He has called for Russia to jump 100 places on the World Bank's Ease of Doing Business index, from 120th to 20th place, by 2018.
Nongovernmental anti-corruption watchdogs gave the proposals a mixed reception, however, saying they doubted that the creation of more official bodies would reduce bureaucracy and corruption.
"Reducing administrative barriers, the piles of required documents and inspections would bring down corruption and make life easier for business," said Ivan Ninenko, deputy director of anticorruption watchdog Transparency International. "This would be of more value for the investment climate in Russia than creation of another protecting body."
Russian businesspeople frequently complain of a multitude of bureaucratic procedures that make it easier to pay off officials or inspectors than to follow the law.
Problems with protection
"There already have been passed some laws reducing the number of inspections and banning [unjustified inspections], so businessmen can already go to the Prosecutor General's Office," said Kirill Kabanov, head of the National Anti-Corruption Committee. "But they are creating new mechanisms without making the old ones really work."
Kabanov said prosecutors were already empowered to take action to protect entrepreneurs, but in reality corrupt officials and businesspeople have powerful protection within the Interior Ministry that allows them to raid businesses.
The cases of imprisoned former Yukos chief Mikhail Khodorkovsky and the former owner of mobile retailer Yevroset, Yevgeny Chichvarkin, who fled from Russia after raiding attacks on his business, have significantly downgraded Russia's image as a country of business opportunities, experts said.
"The idea to boost investment in Russia and improve its global rating may be fulfilled," said Transparency International's Ninenko. But under Putin "there have been politically motivated economic cases, an inefficient justice system and unfair tenders," Ninenko said. "This only worsened the business climate over the last decade."
As evidence for his claim, Ninenko pointed to the 10 billion ruble ($330 million) contract recently awarded to build roads around the Skolkovo innovation hub near Moscow. The contract was handed to Arkady Rotenberg, a businessman with close ties to the Kremlin, without a tender being held, Ninenko said.
Keywords: Russia, Economy, Business, Investment, Trade - Russian News - Russia
The protection of business rights is to be given a higher profile in President Vladimir Putin's new administration with the creation of two watchdogs: a special department within the Prosecutor General's Office to oversee the protection of businesses' rights, and a Business Ombudsman's Office to take up entrepreneurs' complaints.
The Prosecutor General's Office department "will allow a reduction in the administrative burden on business... and guarantee the protection of rights of any entrepreneur if they are violated," prosecutors' spokeswoman Marina Gridneva was quoted by RIA Novosti as saying.
The move to have the Prosecutor General's Office guarantee entrepreneurs' rights may strike some investors as a little odd, as it has played a controversial role in many high-profile, politicized cases where arbitrary actions have been taken against investors.
In another twist, the department will be headed by First Deputy Prosecutor General Alexander Buksman, who played a prominent role in the Yukos case. As head of the Justice Ministry's administration, Buksman oversaw the sale by state auction of Yuganskneftegaz, Yukos' key production asset, in December 2004.
After being bought for a bargain price of $9.4 billion by a littleknown firm, Baikal Finance Group, the production unit was sold on a few days later to Rosneft.
The original idea for the new watchdogs came from outgoing President Dmitry Medvedev, who advocated that either a business ombudsman's office or a department within the Prosecutor General's Office should monitor business rights. Under Putin, however, both projects will go ahead simultaneously.
Nominations invited
Putin has asked business lobby groups to nominate two candidates each for the role of business ombudsman. The ombudsman's office, aimed at defending the rights of entrepreneurs, could be created by the fall, Deputy Prime Minister Arkady Dvorkovich said Friday.
The ombudsman is expected to come from a business background and be familiar with the work of officials and bureaucratic procedures.
"This person should be a public figure, but also have the authority to solve businessmen's problems and initiate court cases against officials and law enforcement bodies," said Ekaterina Shapochka, an expert with Medvedev's Open Government project and head of government and public sector services at PwC Russia. "Also, this person would communicate with the special department in the Prosecutor General's Office."
The move to protect business rights comes after Putin declared that improving the country's business climate was a top priority in his decrees published on the day of his inauguration. He has called for Russia to jump 100 places on the World Bank's Ease of Doing Business index, from 120th to 20th place, by 2018.
Nongovernmental anti-corruption watchdogs gave the proposals a mixed reception, however, saying they doubted that the creation of more official bodies would reduce bureaucracy and corruption.
"Reducing administrative barriers, the piles of required documents and inspections would bring down corruption and make life easier for business," said Ivan Ninenko, deputy director of anticorruption watchdog Transparency International. "This would be of more value for the investment climate in Russia than creation of another protecting body."
Russian businesspeople frequently complain of a multitude of bureaucratic procedures that make it easier to pay off officials or inspectors than to follow the law.
Problems with protection
"There already have been passed some laws reducing the number of inspections and banning [unjustified inspections], so businessmen can already go to the Prosecutor General's Office," said Kirill Kabanov, head of the National Anti-Corruption Committee. "But they are creating new mechanisms without making the old ones really work."
Kabanov said prosecutors were already empowered to take action to protect entrepreneurs, but in reality corrupt officials and businesspeople have powerful protection within the Interior Ministry that allows them to raid businesses.
The cases of imprisoned former Yukos chief Mikhail Khodorkovsky and the former owner of mobile retailer Yevroset, Yevgeny Chichvarkin, who fled from Russia after raiding attacks on his business, have significantly downgraded Russia's image as a country of business opportunities, experts said.
"The idea to boost investment in Russia and improve its global rating may be fulfilled," said Transparency International's Ninenko. But under Putin "there have been politically motivated economic cases, an inefficient justice system and unfair tenders," Ninenko said. "This only worsened the business climate over the last decade."
As evidence for his claim, Ninenko pointed to the 10 billion ruble ($330 million) contract recently awarded to build roads around the Skolkovo innovation hub near Moscow. The contract was handed to Arkady Rotenberg, a businessman with close ties to the Kremlin, without a tender being held, Ninenko said.