The Secret Life of Public Services

The press reported that the Serbian constitutional court decided early this month to organize an expert debate on legal solutions regulating Serbia's public service companies. The decision said the debate would focus on the Serbian Electric power company (EPS) and Post office (PTT) because most complaints are about those two. The stands from that debate would be sent to parliament which, as the legislative body, has to regulate the behavior of public companies.

What's the essence of the problem? As one judge defined it, unofficially of course, public companies have practically taken on powers that don't belong to them, i.e. their management boards have allowed themselves to impose obligations and rights for the population. Those things should be regulated by law or at least by government decree. Legislators have given up much of their competencies and passed them to the government which passed them on to the management boards. Those boards are filled with people who are close to the authorities and they get enviable monthly salaries for their efforts. They operate as a classic example of what was once called "centers of economic power"

The Yugoslav constitutional court covered their position in a ruling which first quoted the constitution: "acts or operations that create or promote monopolies are unconstitutional". Later it said: "The federal constitutional court assesses that the Serbian Public Electricity Company is in a position to establish all the essential elements of contracts and that those elements do not depend on the will of consumers as a contractual party since the consumer, considering the importance of electricity for life, is forced to accept the conditions which the public company imposes. In those relations, the consumer of electricity can't in any way affect the content of the general conditions for the supply of electric power".

The level of power the electricity company has is obvious in some of its decisions the federal constitutional court disputed. That court assessed the constitutionality of parts of the decision on general conditions for the supply of electricity which regulate the competencies of the supplier: the supplier keeps track of consumption and delivers his bill, the supplier pays it at a set date. The supplier did not allow for the possibility of the consumer keeping track of his consumption and pay only for what he used but has to pay for his consumption in advance based on an assessment of consumption.

Soon, there'll probably be a debate on an initiative to assess the constitutionality of the tax on electric meters which is used to finance state TV. A judge said that isn't just. That tax is paid by everyone regardless of whether they have a TV or not. But what article of the constitution is that counter to?

The problem of the powers of public companies is much greater than the abilities of any one court. The law can only bring us closer to justice but the economically more powerful side dictates the conditions. So, how are those conditions dictated?

Public companies are 100% state owned. But, that isn't quite right under the letter of the law. Public means it works for a public interest and theoretically that can happen in any form of ownership ("Public companies can operate with funds from state, social, private or other forms of ownership," the Serbian law on companies says). The situation is quite different if you look at other regulations. "Natural resources and goods in public use, as resources of general interest, and city building land are state or socially owned", the Serbian constitution says. That constitution does not specify which funds from the previous system became state property but just declares its existence. But the constitutional law makes an even bigger mess. It says "natural resources, goods in public use and other socially owned goods used by public companies or services are state owned" which, legal experts said, means nationalization. Theoretically, a public company can sell 49% of its shares with government approval but that possibility is barely imaginable.

The state has completely taken over public companies out of ideological reasons and the power that comes with control over them. This means power over the population through manipulation of electricity prices prior to elections, power over the economy since the state proscribes who is going to pay how much and big inter-state deals and the money they bring.

The control mechanism is perfect: public companies are state owned; the government appoints their management boards; the decisions of those boards have to be verified by the government which hasn't disapproved once so far. A constitutional court judge said: "The management boards, with the approval of the government, implement Serbia's state policies. Serbia should take care of legality and social policy, i.e. the fact that half the population are paid from the budget and the government knows what those salaries are and when they're paid and what the real abilities of the population are in paying their bills."

The government isn't doing on or the other and economic experts add that it isn't taking care of the development of public companies and the quality of their services.

The government is allowing something else, something few people know about including constitutional experts. Article 67 of the SPS statute says: "All SPS members who are elected to representative posts or are appointed to state bodies, management boards of public companies and companies formed by the SPS are obliged to pay donations set by the SPS executive board. The party financial service will draw up a list of people who pay those donations and inform them. Funds from those party donations will be paid into the election fund and can not be used for other purposes".

An SPS member A gets member B onto a management board but B will have to pay party racketeers for the privilege.

The communists determined that no one should be trusted fully, the party will set the racketeering rates and to make things legal the statute covers it.

The only problem is that electricity prices include the salaries of power company management board members and the SPS donations. All consumers are financing not only the state TV but the SPS election campaign as well without being asked for donations.

Management Boards

Under a Serbian government decision, Mihajlo Milojevic was appointed to chair the power company management board. Milojevic is chairman of the Yugoslav economic chamber. The board members are: Dragan Kostic, Serbian mining and power minister, Milun Radunovic, JUGEL engineering, Uros Blazic, Beobank executive director, Branislav Uskokovic, a power company director, Milosav Filipovic, Minel director general, Petar Kostic, assistant power company director in Kosovo, Rade Mihajlovic, Obrenovac poower plant director, Milan Obradovic, Kolubara mine director, Stanisa Paunovic, Djerdap power facility director, Radovan Perovic, chairman of the power company union.

Nedeljko Sipovac, Agrobanka director, chairs the Serbia oil industry management board and its members are: Slobodan Babic, Serbian deputy prime minister, Jovan Radic, labour and social issues minister.

The PTT traffic management board are Filip Grujic, Progres deputy director, Ninoslav Cvetanovic Bor mining complex director, Bratislav Andjelic, a company director in cacak, Dusko Stojanovic, Lutra Vadum director, Slvko Popovic, an oil company engineer, Vlastimir Savic, Pancevo refinery, Stanoje Sasa Andjelkovic, FAM Krusevac director and Zivan Stanisavljevic, Serbian Oil Industry (NIS).

The PPT Serbian management Board is chaired by Radmila Andjelkovic and its members are: Aleksa Jokic, Serbian traffic minister, Milun Babic, minister without portfolio, Ilija Stojanovic, school of Electrical engineering professor, Milovan Stepanovic, Beobanka, Djordje Siradovic, Novkabl director general, Djordje Mitic, PTT Pirot director, Jovan Kukuras, Subotica PTT director and Slobodan Radonjic, PPT Serbia.

Early this year the Serbian government appointed a new RTS management board chaired by Nada Popovic-Perisisc, republic culture minister. Its members are: Dragan Babic, Radio Belgrade channel two editor in chief, Bogosav Bozic, a farmer, Gorica Gajovic (SPS), parliament member, Natasa Gacesa (SPS), parliament member, Zoran Zivkovic, home affairs editor in the RTS, Antonije Isakovic, academician, Miladin Jovic, editor in chief TV Pristina, Vukasin Jokanovic, federal parliament member, Dragan Jokic, assistant TV Novi Sad director, Svetozar Krstic, Serbian deputy prime minister, Nebojsa Maljkovic, Asi Bank management board chairman, Cedomir Mirkovic, Prosveta director general, Dragoslav Mladenovic, education minister, Bosko Perosevic, AP Vojvodina management board chairman, Jovan Ristic, assisstant RTS director general, Redzep Hoxha, assistant federal justice minister.

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