Corruption is one of the Main Business Obstacles in Armenia

Corruption and ineffective governance is one of the main business obstacles in Armenia which hinders the development of enterprises. Results of the Comprehensive survey conducted by the Republican Union of Employers of Armenia (RUEA) in cooperation with the International Labor Organization (ILO). The questioning and analysis in the scope of the survey has been carried out among 300 companies.

Today, the International Labor Organization and the Republican Union of Employers of Armenia organized a conference “Favorable Business Environment for Sustainable Enterprises.” Mr. Vache Gabrielyan, the RA Vice Prime Minister, Mr. Vladimir Kurovic and Mr. John Bleak, Experts of the Moscow Office of ILO, held opening speeches. Mr. Gagik Makaryan, President of RUEA presented the results of the survey.

During the conference MP, the former Prime Minister of the RA, Doctor of Economy Hrant Bagratyan referred to the corruption problems and noted that at present, it is developing rapidly around the world and even economic superpowers apply economic manipulations. In his speech, referring to the offshore zones, Hrant Bagratyan said that superpowers are fighting not only against them, but also are creating offshore zones within their borders. “Offshores are the shame of the world,” he said.

Ms Marine Zhamkochyan, the Vice President of RUEA refered to the Government created Anti-Corruption Council, which is headed by the Prime Minister of the RA and has Ministers in its structure and where only two seats are provided to the NGO representatives. “I have a question, whether these two NGOs can have their voice heard?” She also mentioned that the sectors of the local government, state procurements and custom relations with EEU, which include corruption risks but have not been included in the target sectors of the anti-corruption strategy.

Mr. Karen Zadoyan, Coordinator of the CSO’s Anti-Corruption Coalition Secretariat, President of Armenian Lawyers’ Association, informed that the CSOs’ Coalition has been created to with the objective to increase the efficiency of public control over the government’s anti-corruption reforms, to promote the creation and development of effective anti-corruption mechanisms, to provide legal assistance to persons affected by the phenomena of corruption, and to increase effective CSO oversight of the government’s anti-corruption reforms and justice reforms strategy. Since its inception the Coalition has submitted proposals to the Government about the Anti-Corruption Council, including those referring to increase of the number of NGO representatives in the Council as well as the anti-corruption strategy and action plan. In particular, it was proposed to create an independent anti-corruption body (such obligation has been stipulated by the international legal documents as well).

Karen Zadoyan noted that the CSOs’ Anti-Corruption Coalition has yet refrained from joining the Anti-Corruption Council, but on 23 September 2015, the RA Ministry of Justice and the CSOs’ Anti-Corruption Coalition have signed a joint statement on the Establishment of the Anti-Corruption Working Platform and the Anti-Corruption Working Groups. Currently, two working groups have been established, the first will discuss the models of independent and effective anti-corruption body and will offer its optimal option.
The second working group will conduct activities aimed at criminalization of illicit enrichment. Karen Zadoyan gave an example where the official may become rich by corruption means, and not be called to liability for corruption offenses during that term. And one day he will be able to freely buy property or invest that money abroad as the illicit enrichment is not criminalized and punished in Armenia. However, K. Zadoyan also said that on the proposal of the Coalition this corpus delicti is already included in the New Draft Criminal Code.

Referring to corruption in the business sector, K. Zadoyan noted that last year in cooperation with the Ministry of Justice and the partner organizations a workshop “The Business Sector in Armenia: Corruption Risks and Integrity Issues” for the representatives of businesses. As a result of discussions it became clear that most often the representatives of business do not speak out about corruption in the sector: there is a lack of knowledge about rights, there are no mechanisms to protect the violated rights.

It is necessary to conduct a sustainable and productive partnership dialogue with the government aimed to raise the corruption risks and problems that exist in the sector directed to implementation of legislative reforms (especially in the customs, taxation, antitrust, public procurement, conflict of interest of the officials, the expanding the range of affiliated persons in institute of declarations on assets and funds and a number of other areas).

The discussions resulted in elaboration of proposals that the series of discussions CSOs-Business Community-Government should be continued, transferring the work of the platform to the regions, actively involve the business associations in the activities of CSOs’ Anti-Corruption Coalition, create a section providing legal support to the businesses, which will elaborate suggestions and recommendations on legislative reforms and submit to the Government.

It is also planned to organize anti-corruption and integrity trainings (integrity includes ethics, accountability and competence) for public servants and business representatives, public monitoring to control the sector, conduct investigations of public procurements, alienation of state property, monopolies and other areas, introduce the institute of business ombudsman, and also to develop steps to enhance the integrity element among the public servants.

Deputy Minister of Justice Surn Krmoyan introduced reforms and anti-corruption activities of the government, highlighted participation of CSOs and opposition political forces in the Anti-Corruption Council. He also referred to the cooperation of the CSOs’ Anti-Corruption Council and the Ministry of Justice and the working anti-corruption platform which has been formed as a result of such cooperation as well as a number of joint events organized in the scope of this cooperation.