Data is the lifeblood of economic development. It is the basis for many new products and services, driving productivity and resource efficiency gains across all sectors of the economy, allowing for more personalised products and services and enabling better policy making and upgrading government services. It is an essential resource for start-ups and small and medium-sized enterprises (SMEs) in developing products and services. The availability of data is essential for training artificial intelligence systems, with products and services rapidly moving from pattern recognition and insight generation to more sophisticated forecasting techniques and, thus, better decisions.
Addressing the challenges and attempting to capture the enormous potential benefits data-driven innovation can bring, Ukraine in 2015 enacted the Ukrainian Open Data Legislation (Law 319-VIII, 9 April 2015). The Law was in many ways ahead of EU Public Source Information “PSI” Directive (2003/98) and set the approaches provided in EU later by Open Data and the Reuse of Public Sector Information EU Directive (2019/1024). The Law provides an umbrella legal framework in Ukraine for all government-held data (public sector information) while at the same time enhancing the three key regulatory reform pillars in Ukraine: transparency, efficiency and fair competition.
Following the EU Directive principles, the Law further authorises public sector bodies to make as much information available for re-use as possible. The Law sanctions access to open data material held at national, regional and local levels, such as ministries, state agencies and municipalities, as well as organisations funded mostly by or under the control of public authorities. Open data must be available free of charge.
However, this advanced legislative instrument in Ukraine lacks as of today a necessary set of implementing mechanisms that would make the execution of the Law clearly beneficial for the suppliers of data (public sectors), as well as, to the end consumers (private sector). The Law does not address the key implementing issues, (i) lack administrative mechanisms framework governing the availability of data (absence of control oversight and technical support system), (ii) inadequate level of disciplinary measures against public authorities for non-compliance with release requirements); (iii) full public access to high-value data that currently remain unattainable in open data; (iv) addressing PSI data lock-in; (v) eliminating the use of exceptions that allow public sector bodies to charge a fee for access to PSI;
BRDO, utilizing its well developed regulatory enhancement mechanism that includes its internationally acclaimed public consultation process, in conjunction with its internal regulatory evaluation that incorporated the best international and especially EU practices, in order to improve the utility of the open data concept for business while at the same time eliminating barriers that still prevent the full re-use of public sector information, BRDO recommends the following set of regulatory enhancements:
Amending current legislation with the following corrections:
[1] Under present, undefined charge environment, several public sector bodies continue to charge well above what is needed to cover legitimate costs. Such unregulated and inflated charges constitute in effect a market barrier for Small and Medium-sized Enterprises (SMEs). Getting rid of charges typically results in a surge in demand for public sector data, which translates into more innovation, more business growth and, ultimately, higher budget revenues (via taxes) for the public sector.
The Green Paper on open data policy is available in Ukrainian at regulation.gov.ua
This material is prepared by the Better Regulation Delivery Office (BRDO), an independent expert and analytical center funded by the European Union under the FORBIZ project and within the framework of EU4Business Initiative.
On April 13, Ukrainian Parliament approved the draft law No.2370 “On National Infrastructure of Geospatial Data” in the second reading. The Construction Sector experts from the Better Regulation Delivery Office participated in the drafting of this law. (more…)
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BRDO lawyers have prepared a list of frequently asked questions and answers that we are often asked by our Facebook readers. (more…)
Better Regulation Delivery Office (BRDO) calls on international, national and regional construction companies to participate in a survey on the reform of state architectural and construction control, its consequences for business and expected changes. (more…)
In Ukraine, the epidemic and the economic crisis have been marked by the struggle for access to the service of the enterprise which is responsible for 66% of the total cargo traffic of the country. It is about Ukrzaliznytsia (UZ, Ukrainian Railways). This state-owned giant has an impact on profits of any business related to the export of goods by rail. However, sometimes it has a negative impact.
The company’s Supervisory and Management Boards are obliged to ensure the enterprise’s break-even operation. The tools for this are chosen at the discretion of the management. The easiest way is to increase profits and minimize cost of repairing railway tracks and rolling stock by any means through the limitation of transportation volumes. The Ukrzaliznytsia’s top management that has been running the company since 2016 took this approach.
Indeed, increasing profits by reducing the actual cost of repairing railway tracks and rolling stock is a sure way to show high company profit figures. However, such approach led to restrictions on the speed of movement, the deterioration of locomotives and the mass dismissal of employees. In turn, this led to a decline in both transportation volumes and the company’s revenue. That is why the Management Board came up with a scheme under which the UZ will be able to collect additional charges from cargo shippers and demand payments from the state without increasing the transportation volume. This is how the term “low-active station” was born.
Ukrzaliznytsia prescribed that no less than “x” boxcars with cargo should be dispatched from each station per day in a given period. If the average number of boxcars dispatched from a particular station is less than the specified level, then such a station is considered low-active.
Railways tracks and rolling stock are depreciated 90%, and Ukrzaliznytsia repeatedly postponed scheduled repairs
What does it mean in practice? Ukrzaliznytsia proposes to local governments to pay extra fee for the functioning of “low-active” stations and to entrepreneurs that use railways to carry cargo to pay for such transportation at a higher rate. However, the number of boxcars dispatched from a particular station is different than the volume of cargo available for transportation: the cargo is being transported at the exact amount as Ukrzaliznytsia takes.
For example, a no-name enterprise currently has 10 boxcars of grain. The UZ examines its rolling stock and track condition and states that it will take only 1 grain boxcar per day. Bang! According to the UZ instructions, the station of the sender-company becomes “low-active”, and therefore the cost of transportation increases. After that the UZ can take out all 10 cars, but at a higher rate.
If local authority refuses to pay for the station’s operation or an entrepreneur does not want to pay for the cargo transportation only because the station, located nearby, was artificially recognized as “low-active”, the Ukrzaliznytsia may decide to close its service.
One may wonder why the monopolist should take such measures while it is possible to make more profit by carrying all the cargo offered. The answer is prosaic: railways tracks and rolling stock are depreciated by 90% and Ukrzaliznytsia repeatedly postponed scheduled repairs. That is why the company has decided to use a “low-active station” tool to reduce the number of traffic and generate additional revenues. Involving entrepreneurs that use highways proactively into the rail transportation is not even discussed. Probably, this is only about a land tax that the Ukrzaliznytsia pays to local authorities and plans to pay back in the form of “extra charges” for “low activity”.
Having saved on repairs, the company really showed maximum profits. However, savings on repairs will result in the situation when there is nothing with and to transport in the long run. Thus, the state-owned company, which is supposed to provide mobility and development of Ukrainian business of any size and geographical location, obviously hampers this. This is the method of killing any rail-export related business simply by referring to the “low activity” of its shipping station.
The only possible cure for the “low activity” disease is to demonopolize the rail transportation, i.e. to involve private companies. This is one of Ukraine’s obligations under the Association Agreement with the EU. The launch of a pilot project on private rail transportation is already planned. The next stage is the division of the UZ into infrastructure, cargo, and passenger operators, of which only the infrastructure operator should remain 100% state-owned. Given the economic crisis and the projected 20-30% decline of annual revenue, the UZ reform issue is actually urgent.
Source: Novoye Vremya
This material is prepared by the Better Regulation Delivery Office (BRDO), an independent expert and analytical center, funded by the European Union under the FORBIZ project and within the framework of EU4Business Initiative.
We, think tank experts, open data experts and IT developers of both genders, call on local governments of cities to open and provide continuous real-time access to data on public transport locations. (more…)
Better Regulation Delivery Office collected answers to the most frequently asked questions of entrepreneurs regarding the labor law, force majeure circumstances, taxes, and the consequences of emergency declaration. (more…)
Better Regulation Delivery Office analyzes the main areas and markets of the Ukrainian economy, so we have grouped the impact assessments of the emerging crisis by sector. (more…)
Ukraine is a small open economy that will be severely affected by the crisis caused by the coronavirus pandemic and other factors.
The main specific feature of this crisis is the temporary nature of the shock caused by the pandemic. Ukraine does not have resources or capabilities to overcome this crisis through the huge volumes of financial inflows.
The main thing the country can do is to accelerate the time required to go through this crisis, and therefore, the economy should be as mobile as possible during this period.
It is necessary to roughly divide this situation into two crises: a short-term economic shock related to the quarantine and a medium-term global financial and economic crisis.
These two crises require different responses and the most efficient use of the limited resources available in Ukraine: to keep businesses afloat and protect jobs during the quarantine, and then – to stimulate the re(launch) of the economy.
This text is about the first step in supporting the most vulnerable businesses and employees.
The practice of hidden unemployment has been common in the 1990s. This is when businesses did not have money, so they forced people to interrupt their work and go on leave with no pay while considering their payments as wage arrears or not paying them at all.
Now such a situation is likely to happen again.
During the quarantine and the related economic instability, many employees from the most seriously affected companies will face the choice of leaving the company without money and without the right to unemployment benefits or quitting the job and queuing to register at the job center, which is one of the most crowded areas, during the pandemic.
In practice, the entrepreneur-initiated termination also requires money and time, which the inactive business does not have. That is, a person is faced with the choice of either empty pockets or the risk of contracting coronavirus.
We have analyzed international practice and dozens of new articles, statements and columns of by Ukrainian authors on how to deal with the coming crisis.
The main problem almost all experts say nothing about is that the quarantine will last not for several weeks, but for several months, which causes hundreds of thousands of Ukrainians to be out of their job or businesses to be on the brink of bankruptcy.
China has 442.47 million employed people. Data show that about 4.67 million people lost their jobs during the coronavirus outbreak in January-February 2020. In other words, 1.06% of the Chinese were out of a job.
If we transpose this figure to Ukraine, where 12.5 million employees were insured in 2019, it turns out that 132 thousand Ukrainians are at risk of losing their jobs in the coming months.
However, China is a state-controlled economy, which the second largest in the world, and therefore it has much more capabilities to overcome the effects of the crisis. China has taken unprecedented measures and allocated hundreds of billions of dollars for loss compensation.
Ukraine does not have such capabilities.
Analytics indicate that Western countries either compensated for the losses of entrepreneurs or simplified the staff redundancy mechanisms and provided the unemployed with state aid to save businesses.
Given Ukrainian realities, can we allocate money as state aid or credits to all businesses to avoid the reduction of the employees and termination of operations?
Can we afford to simplify the staff redundancy procedure to save some of our employees and companies from bankruptcy, but leave the rest of our employees without money in our epidemic situation?
Obviously, both answers are negative. However, we do see a way to combine benefits for employees and businesses in both scenarios. What do we offer?
In our opinion, it is necessary to create a special procedure, under which employers will become entitled to send workers in quarantine (self-isolation) while simultaneously submitting online documents to the State Social Security Fund in case of Unemployment for unemployment allowances due to the quarantine (self-isolation).
There is a procedure for assigning partial unemployment allowances in similar cases in the Employment Law. We can improve this procedure or establish a new one.
The main goal is to enable non-paying companies to provide employees with unemployment benefits due to the business interruption during the quarantine on the first day of self-isolation without loss of employment.
In doing this, such companies should be exempted from the obligation to pay wages to employees who are idle and receive unemployment allowances.
Thus, enterprises that will have to suspend their activity due to the pandemic can avoid dismissing their staff, while the employees will be guaranteed to receive payments from the state during this business interruption.
As soon as the quarantine is over, businesses will resume their activities while their employees will be able to return to their positions. In such a way, we will avoid situations where companies need to look for new employees again instead of keeping a team that has been working for many years while people suffer from unemployment.
At the same time, the law should provide for a mechanism that will make it impossible to receive the same assistance again after getting the unemployment allowance under this special procedure in the case of dismissal.
As for helping people in the so-called shadow segment, we can consider direct targeted monetary assistance. But this and further measures to combat the financial and economic crisis require additional funds.
In this case, we can obtain the support of the IMF, which announced its readiness to lend up to $1 trillion to other countries to overcome the economic effects of the coronavirus on Monday, March 16.
Getting help from large businesses does not seem like the worst idea either.
If the government officials agree, the experts are ready to get involved in the development of this mechanism as soon as possible.
The Better Regulation Delivery Office prepares proposals for short- and medium-term counter-cyclical measures to support the economy during the epidemiological and global economic crisis.
Source: Ekonomichna Pravda
BRDO is an independent regulatory policy advising institution in Ukraine, funded by the European Union under the FORBIZ project and within the framework of EU4Business Initiative.
Better Regulation Delivery Office systematized the changes introduced by the Law “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine to support tax payers for the period of the implementation of measures aimed at prevention of emergence and spread of coronavirus disease (COVID-19)” for the convenience of readers. The Law will enter into force the day after its publication in the parliamentary newspaper Holos Ukrainy. (more…)
The COVID-19 pandemic represents a major shock to the global and European economy. It is the first time that the world economies are facing an economic and financial crisis that was not caused by an underlaying distortion of market mechanisms but rather as a direct result of health-related economic slowdown. (more…)
Let’s imagine the State Architectural and Construction Inspection (hereinafter – DABI) of our dream.
Construction of a small garage near your private house can be registered with just a few mouse clicks.
A 3D project is displayed on the online maps for public discussion and control before the construction of the object, which doesn’t comply with construction standards, and consequently, it is impossible to build monster houses.
The reconstruction of the Hostynnyi Dvir ends with a DABI’s inspection, which is controlled by Ukrainians, watching a video and a checklist of the decision to issue a certificate filled out by inspectors online.
Previously, the system was transparent only to corrupt officials who waited for the applications of those who plan construction projects and demanded bribes.
Now the system will be transparent and public for all Ukrainians.
It is no longer possible to “plant” documents for approval of design documents for construction from specialists without their permission, as now construction contractors confirm their relationship to each object in their electronic cabinet.
Architects take care of every detail of the project, because they are responsible for their work not only on paper.
What do we need to do to achieve this goal and does a package of decisions to reform DABI developed by the Schmygal government help to achieve our dreams?
Experts from the Better Regulation Delivery Office (BRDO) have analyzed the proposals of government officials and stated their position here.
In short, DABI of our dream is impossible without a few key changes.
Separation of service and control functions. The inspection is now empowered to both grant construction permits and licenses and control the sector, and this opens up unlimited opportunities for corruption pressure on business.
Bringing administrative services online. For this purpose, the law provides for the launch of a Unified state electronic system in construction.
At the same time, it is necessary to provide both an opportunity to submit documents to the regulator in electronic form for construction projects of all consequence (importance) classes and to open full access to all decisions of the regulator (permits, refusals, licenses, etc.).
Approval of unified forms of decisions on granting or refusing permits to perform construction works, certificates on putting completed facilities into operation, licenses for construction of objects with medium (CC2) and significant (CC3) consequence classes.
Simply put, an exhaustive list of requirements to be fulfilled by construction project owners or licensees should be formed and enriched in law.
If construction project owners or licensees fulfill these requirements, the architectural and construction control body will have no reason to refuse to grant them such a permit, certificate or license.
In addition, the issuance of construction permits and certificates on putting completed facilities into operation should be decentralized when it comes to CC2 and CC3 objects.
It is necessary to grant such right to the executive committees of local governments and introduce a mechanism for pre-trial appeals against refusals to issue permits and certificates, which will speed up the dispute resolution.
To reduce the corruption component during inspections, it is necessary to:
Consider delegating construction control powers to the private sector.
Transfer DABI’s functions of market surveillance of construction products to the State Service on Food Safety and Consumers Protection.
For example, in the UK, construction control functions may be performed by government agencies, private companies or individuals who meet certain qualifications, have been inspected and registered with the Construction Industry Council.
In New Zealand (ranked 7th in the World Bank’s Doing Business rating in the category “Obtaining a construction permit”), both government agencies and individuals who have received appropriate accreditation can perform the construction control functions.
Upgrade qualifications of control and supervisory authorities
For example, voluntary accreditation of local construction departments and other regulatory and supervisory agencies and organizations has been introduced in the United States.
Such a procedure improves the quality of the work of construction control and supervisory authorities, as it establishes requirements to the level of qualification of employees as well as helps to identify and eliminate performance shortcomings.
Record inspections using the DVR by the example of recording the work of patrol officers.
What increases the risk that the DABI will be unreformed:
Formal replacement of the previous State Architectural and Construction Inspectorate (DABI) with a new one (or with several new bodies) without actual reform of administrative services provision.
Blocking the operation of electronic services (construction project owner’s electronic cabinet) and the introduction of the Unified state electronic system in construction.
Reforming the DABI at the level of the resolution of the Cabinet of Ministers of Ukraine that contradicts the law and “adjust” its requirements.
Such “reform” can be easily “reversed” through judicial procedures or based on political expediency. The changes should be clearly registered by the Parliament in the form of a law.
Dreams of convenient and transparent services and predictable state control are supposed to come true already.
Legally, Ukrainians have the right to register the construction of any object online and without bribes. It would be good to finally secure this right.
Source: Ekonomichna Pravda
BRDO is an independent regulatory policy advising institution in Ukraine, funded by the European Union under the FORBIZ project and within the framework of EU4Business Initiative.
The Construction sector experts of the Better Regulation Delivery Office (BRDO) have analyzed draft resolutions of the Cabinet of Ministers of Ukraine “On Optimization of State Architectural and Construction Control and Supervision” and “On Liquidation of the State Architectural and Construction Inspectorate of Ukraine and Amendments to Certain Resolutions of the Cabinet of Ministers of Ukraine” and prepared risk assessment of adopting both draft resolutions on the sector regulation.
In particular, experts warn against:
The following changes are needed to really reform DABI:
Authors of the analysis: Taisiia Baryngolts, Construction Sector Head, and Andriy Bilenko, Construction Sector Senior Expert.
BRDO is an independent regulatory policy advising institution in Ukraine, funded by the European Union under the FORBIZ project and within the framework of EU4Business Initiative.
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