For the period from fall 2015 to spring 2020, the experts of the Better Regulation Delivery Office conducted 47 comprehensive market researches and developed 154 draft acts that formed the basis for decisions of the Parliament, the government and central executive bodies.
Among 154 initiatives developed by BRDO, there are decision packages for business approved by different governments, as well as 12 laws of Ukraine, including:
In addition, 1,209 ineffective or obsolete regulatory acts were abolished at the initiative of BRDO experts during our four-year work.
To simplify and increase the transparency and predictability of government and business interaction, the IT-staff of the Better Regulation Delivery Office developed and launched 4 unique online resources:
BRDO experts estimated that the economic impact of the decisions approved and the regulatory acts abolished would be around UAH 2.7 billion – as much as small and medium-sized businesses save annually dues to effective regulation.
As an independent analytical center, BRDO will continue to strive to create the better environment for small and medium-sized businesses, as well as combat inefficient, outdated, excessive and corrupt regulation. During our four-year work, BRDO experts have provided expertise and cooperated with the government of Arseniy Yatsenyuk, Volodymyr Groysman, Oleksiy Honcharuk, and are ready to continue working together with other governments, which key priorities include the effective system of state regulation serving the Ukrainian people.
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.
‘Labor inspectors’ are traditionally one of the worst ‘pains’ of Ukrainian business. The State Labor Service plans annually to conduct more than 15 thousand inspections taking the third place by their number among the supervision bodies. What’s wrong with them?
Historically, the State Labor Service is another hybrid body established during the so-called optimization of the number of state supervision (control) bodies in 2014. At that time, the government decided that the businesses were being inspected by too many inspection agencies and resolved the problem radically – simply by merging them. This is how the modern State Labor Service of Ukraine combining functions of control over employment, labor, workplace health and safety, observance of the rights of persons with disabilities in employment and mining supervision was established.
Similarly, the State Service of Ukraine for Food Safety and Consumer Protection inspecting enterprises in almost 20 areas, which are not always comparable to each other, was created. The labor and labor protection areas generate the biggest challenge for entrepreneurs: they cover virtually all entrepreneurs who have at least one employee. Moreover, there is the outdated and still Soviet legislation and almost no electronic administrative services in both areas. Let’s look at these two areas in more detail.
In Ukraine, employment relationships as a process look very simple: an employer enters into an employment contract with an employee and submits the relevant notification to the tax service (this can be done through the Taxpayer’s E-cabinet). However, more than 3 million people work illegally in Ukraine, and only 40% of them work in the ‘official’ sector of the economy, that is, in registered enterprises. All the others are doubly illegals. Why is this happening? There are several reasons.
The first and most important reason is the evasion of the payment of taxes and social contributions. Often, business owners simply do not understand what services they receive from the state in return and try to minimize the costs of their business activities.
The second reason is the combination of the outdated Labor Code and the attempts to implement the requirements of the International Labor Organization Conventions into the national legislation. On the one hand, the Code creates significant inconvenience for employers and, on the other, provides for the penalties for non-compliance, which are less costly to appeal to the courts for years than to comply with them. The requirements of international conventions, in turn, provide for a level of autonomy in decision-making for inspectors, which is unprecedented for Ukraine. But in the current environment, it is practically the same as arbitrariness and corruption of inspectors and catastrophic pressure on businesses.
Control over compliance with labor safety requirements extends to fewer businesses, but this area is still problematic. Entrepreneurs are most affected by outdated and excessive requirements and the need to obtain unnecessary expert opinions and permits in cases when it is sufficient to declare their compliance with legislative requirements. And, of course, it includes the amount of paper to be used.
The main document that creates these problems is the Procedure for granting permits for high-risk works and for the operation (use) of high-risk machines, mechanisms and equipment approved by the Resolution of the Cabinet of Ministers of Ukraine of October 26, 2011 No.1107. It covers everything: a list of works that require such permits and a list of machines, mechanisms and equipment that require a similar permit.
Such regulation creates a number of problems. First, not all works on this list really require such rigid regulation as a permit. Second, the procedure for obtaining such a permit involves the highest level of corruption.
The first problem can be resolved by reducing the lists requiring such permits and by introducing the possibility of performing high-risk works or using the relevant machines, mechanisms and equipment on a declarative basis (by submitting a declaration to the State Labor Service).
Changes to the above Procedure, developed with the help of BRDO experts, provide for reducing the list of high-risk works requiring a permit up to 8 types. Previously, entrepreneurs were required to obtain a permit for oil, hydrocarbon gas and condensate refining, but now they can start their business activity simply by submitting a declaration to the State Labor Service. At the same time, the full control of the State Labor Service over the compliance of entrepreneurs with the rules of labor protection legislation remains unchanged.
In addition to the list of works, the list of high-risk machines, mechanisms and equipment, the operation of which requires such permits, is reduced to 4 types. For example, entrepreneurs will be allowed to use hoisting cranes and devices, elevators, escalators, passenger conveyors, passenger cable railways, cable cars, aerial lifts and cradles on a declarative basis.
In such a way, self-declaration of dangerous works will allow to reduce the time for obtaining the appropriate permits for businesses. In addition, the next step should be to make such a declaration available online, following the example of a similar declaration in fire safety. This will help the State Labor Service to establish an electronic register of declarations, permits and enterprises carrying out high-risk works. At the same time, entrepreneurs will be able to correct declarations already submitted or even withdraw it in the course of works.
The Better Regulation Delivery Office has been supporting the transformation of the domestic system of state supervision (control) into a risk-oriented approach for several years. That is, to take into account the risk of certain hazards and not to try to control ‘everything’. Inspection plans should be formed solely on the basis of an assessment of the risk degree for each entity under competence of any given body. Thus, this will protect small businesses with little risks from excessive pressure and frequent inspections while focusing the inspections on businesses with more risks.
However, it was not yet possible to implement such an approach in this area, since the risk criteria in labor had not been approved. Therefore, planned (in fact, preventive) inspections were not conducted, and the State Labor Service considered the number of entrepreneurs ‘caught’ in violations and the amount of fines imposed as a key indicator of own efficiency.
From now on, under the new criteria, the agency will be able to integrate all the issues and requirements for entrepreneurs into a single logical scheme allowing to determine the risk degree of entities by all indicators at once (both in labor law and labor protection and employment). Such a step will make the process of inspections conducted by the State Labor Service transparent and predictable, and the inspections will cover all areas under the agency’s control while visits of inspectors to the enterprises will become less frequent.
Source: delo.ua
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.
Ukrainian fishing industry has enormous potential, but ineffective regulation in this sector doesn’t allow to realize it.
BRDO analyzes the status of implementation of the state fisheries policy with a view to improving it. We strive to create favorable conditions for the development of business potential in the area of aquaculture and industrial catches of bioresources, so we need an evaluation from market representatives.
We invite you to participate in the survey ▶ https://forms.gle/GHMSVYj4b1Nu4qi39
Your responses to the issues of industry regulation will allow us to create a comprehensive model that will provide business entities with equal access to the market of aquaculture and industrial catches of bioresources as well as effective mechanisms for the rational use, recovery and protection of bioresources.
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.
Last autumn, the Verkhovna Rada of Ukraine approved the draft law 1071 developed by BRDO experts and making space activities open for private businesses. This is a breakthrough for Ukraine, as it provides a strong impetus for developing the potential of our space industry and attracting investments.
The next stage for the implementation of the Law is the adoption of a series of by-laws. Yesterday, another step was taken. The Cabinet of Ministers of Ukraine adopted two relevant documents, for which BRDO experts have conducted the regulatory impact analysis and M-Tests:
“The Law abolishes the state monopoly on space activities, but it is necessary to develop and approve all relevant by-laws for its implementation. Then the private business will be able to fully realize its potential in the development of the space industry, creating new jobs and attracting investments in the industry. This will help to make Ukraine a strong and competitive player in the global space market,” Hanna Bashnyak, Control and Supervision Sector Head at BRDO, said.
For example, the Procedure determines the issuance of permits for the following types of activity:
Issuance and cancellation of permits will be carried out by the State Space Agency free of charge within 90 calendar days from the day of the application and the necessary documents. The application for such a permit and the relevant documents can be submitted both electronically and in paper form.
In addition, the Law provides for a declarative principle of access to the market for space activities when it comes to safe types of activity (space researches, development, production, repair and maintenance of space objects).
According to the approved Procedure, such declaration shall be submitted by business entities to the State Space Agency directly or through Administrative Services Centers (CNAP) in paper or electronic form not less than 5 working days before commencement of space activities. It is also free of charge.
We welcome these decisions and move on to the full implementation of the private space market.
Despite Ukraine’s wealth of natural resources, the inefficiency of the state management system in this area does not allow to fully realize its potential. There are high corruption risks when it comes to the distribution of natural resources, the lack of access to information about them, many cases of illegal use of natural resources, as well as the lack of mechanisms to monitor the origin of resources in the sector. As a result, we have the sector, which is non-transparent, inefficient and unattractive for investors.
With the purpose of establishing an effective system of control and management of natural resources, the Ministry of Energy and Environmental Protection of Ukraine, with the assistance of BRDO experts, developed the Concept of State Policy for the creation of an ECO Platform for natural resources management.
On February 26, 2020, a single ECO Platform project was presented with the participation of the Minister of Energy and Environmental Protection Oleksiy Orzhel, the Deputy Minister Volodymyr Holovatenko and the BRDO CEO Oleksiy Dorohan.
“The lack of systematic accounting and control over the use of natural resources belonging to the people of Ukraine leads to cases of their illegal use. For example, the losses of the state from illegal logging amounted to about 1 billion hryvnias over a period of 5 years. At the same time, losses from illegal fishing and illegal trade of aquaculture aquatic bioresources are over 1 billion hryvnias annually. In addition, there is a “bundle of papers”… Information on the subsoil use should be as convenient and transparent as possible, and we try to provide access to natural resources only through open auctions. We are now working on digitizing data so that every citizen can become a participant in the process and use the services provided by the state,” Oleksiy Orzhel commented on the innovation.
ECO Platform is an electronic communication system to manage natural resources. The purpose of the platform is to provide the effective communication between businesses and government authorities, and ensure equal access to natural resources sites along with access to environmental information. The ECO Platform will cover the management of subsoil use, forestry and fisheries and water resources.
“Today, information on shared limited resources is largely non-digital, non-generalized and not open to the public. The interaction between the state and businesses is inefficient and provokes corruption factors in the sector. Such a system of state management of natural resources leads to their inefficient use and losses in the sector. The ECO Platform aims to change that. Thanks to the electronic format of interaction, it will allow to save at least UAH 1.4 billion for business and significantly reduce the losses of the state – up to UAH 1.2 billion,” Hanna Bashnyak, Market Surveillance Sector Head at BRDO, said.
According to the agreed project, the Platform will consist of 7 active components:
By the way, the introduction of electronic services just in obtaining the right to industrial catch of aquatic bioresources will save more than 107 thousand hryvnias for business annually. In turn, electronic reporting for fisheries will reduce the annual expenses of business entities by 226 thousand hryvnias and by a record 905 thousand hryvnias when it comes to the water management sector!
As for the economic effect, the introduction of electronic traceability by origin of only aquatic bioresources will reduce the annual losses of the state from illegal fisheries by at least 839 million hryvnias and the losses from the illegal trade of aquaculture aquatic bioresources by 250 million hryvnias.
Therefore, there is an opportunity to learn more about the use of natural resources and data of eco-monitoring, participate in the auction for the right to use natural resources online or obtain permits on the single integrated ECO Platform. In addition, existing digital solutions developed by the BRDO, including the inspection portal providing access to information on inspections and their results, will be integrated into the ECO Platform.
Thus, the introduction of the ECO Platform will allow to gradually eliminate corruption in the sector, ensure equal access to shared limited resources and their efficient use and significantly improve Ukraine’s investment attractiveness in the future.
On Wednesday, February 26, 2020, the Minister of Energy and Environmental Protection Oleksiy Orzhel, the Deputy Minister of Energy and Environmental Protection Volodymyr Holovatenko and the CEO of the Better Regulation Delivery Office (BRDO) Oleksiy Dorohan will present a Single Ecological Platform “ECO Platform” project.
During the event, the speakers will talk about the Ministry’s planned steps to create the Single Ecological Platform “ECO Platform” as an electronic communication system for the interaction of society and executive authorities designed to promptly respond to public requests for the use of natural resources.
The system will allow business entities to have 24/7 access to information on shared limited resources and their use; select an object on the public electronic map and immediately apply for a permit or auction through a “single cabinet”; participate in the auction for the right of access to the natural resource; monitor the stages of obtaining the right to use the natural resource; obtain environmental monitoring data; respond to requests, receive, process, use and store information provided to citizens; submit information to environmental authorities; provide information on the legality of using natural resources and more.
The Single Ecological Platform concept was developed with the assistance of experts from the Better Regulation Delivery Office.
Venue: Ministry of Energy and Environmental Protection of Ukraine (4, Bohdana Khmelnitskogo St.)
The event will start at 14.00 on February 26.
Media accreditation: electronically till 18:00 on February 25
This Wednesday, the Cabinet of Ministers considered the draft Rules of Procedure developed with the assistance of experts from the Better Regulation Delivery Office (BRDO). For the first time, this document provides the basis for a systematic and consistent formation of public policy as a policy chosen by the state to solve certain social problems. At first glance, this document may seem to describe the current mechanism of ministry interaction. In fact, it is based on a new culture of governance, which is still little-known in Ukraine. Its name is a decision-making policy process that has been used by successful Western democracies for decades. I will list the key innovations that the Rules of Procedure 2020 will introduce once it is approved.
Strategic planning
How it was:
The Cabinet of Ministers planned to implement the Program of Activities by approving the annual Action Plan. This plan usually looked like a giant document listing the activities, deadlines and responsible authorities. In spite of the volume, it still lacked an important aspect – the logical connection of the measures with the goals set by the Government, and therefore with the problems that it should solve. At the same time, the way it was decided to carry out these measures instead of some other ones was the great mystery. Moreover, the approval of various plans seems to have been a very popular practice: the effectiveness of the work was measured by the number of activities completed and the tasks “closed” – a kind of governmental event agency. I don’t generalize, there were exceptions, but they still did not become a regular practice.
How it will be:
The new Rules of Procedure oblige the Government to explain the logic of its actions in a clear and structured manner. For this purpose, a special state policy document (a concept) will be developed for each of the priority goals determined in the Program of Activities. It will outline the problem to be addressed, the public group suffering from the problem, the group size, the problem relevance and the reasons for its occurrence, as well as the way, in which the state plans to address it.
The concept development will be preceded by serious analytical work, including studying the issues, comparing alternatives, consulting with stakeholders. Each concept will contain SMART public policy effectiveness indicators that will show the progress towards one goal or another. In parallel with the concept development, a policy implementation plan will be developed, since, obviously, any declaration touches on populism without a well-thought-out and well-grounded implementation plan.
Already, it is possible to learn more about the first ministries’ attempts to develop public policy concepts for the implementation of the Program of Activities. They are all collected at www.program.kmu.gov.ua. In the future, there will also be dashboards showing progress by indicators and an implementation roadmap containing the publicly available information on the acts that the Cabinet of Ministers plans to develop to achieve the goals. Such transparent planning available to the public will allow to monitor the quality of the Government’s work with no hassles, provide greater predictability of activities and contribute to systematic and sustainable public policy.
The real involvement of stakeholders
How it was:
Currently, the process of “public discussion” can be considered discredited. Basically, it all comes down to the promulgation of a draft act being developed on the drafter’s website (ministry or other body) to make it available for some time. The text of the draft act is available for as long as is allowed by law and then, as it should be, it is adopted. Only the drafter knows what the discussion results are, whether they were taken into account and whether the discussion took place at all. Some ministries have gone a bit further and use another form – they discussed certain draft acts during meetings of community councils at such ministries. But, unfortunately, it sometimes serves as a “cover” to avoid conducting public discussions. And very rarely, there are consultations with interested parties who are real representatives of social groups, whose interests are directly influenced by the adoption of the act.
How it will be:
The Rules of Procedure will now require mandatory stakeholder consultations: polls, focus groups, meetings, roundtables. They can choose the format, but it is impossible to avoid interaction. There is another side of the picture: not everyone is allowed to consult with. Obviously, the Government does not deal with holders of private interests, but protects the interests of the public. Therefore, consultations with representatives of interest-based public groups (NGOs, unions, associations) instead of with individuals will be held. This, in turn, will encourage the public to self-organize and unite for the sake of defending their interests in a civilized and effective way.
Forecast of impact of decisions
How it was:
In fact, predicting the impact of the decision being proposed is not a new concept. One way or another, the drafters indicated “it will have an impact on the market environment, regional development, public health” and so on in accompanying documents to the draft acts. More often, there was a short verdict: “it will have no impact”. The result is that a decision in one sector may badly affect another sector, a conflict may arise between different areas of public policy, or vice versa – there will be no synergy that could be strengthened or scaled between decisions.
The situation with the impact on stakeholders’ interests is similar. It would seem to be a simple requirement to describe what public groups will be affected by the adoption of the act: which position will improve and why, and which position will get worse. But there is also a barrier: it is difficult for a civil servant to understand the difference between the results of the act adoption and its consequences. While the first one implies the expected benefits, for which the act is being drafted, the second one is a kind of side-effect, or a “price” to be paid for the result. When a civil servant identifies a result with a consequence, he obviously won’t indicate that his act will have a negative impact. Only later does something else happen often – unexpected and unpredictable reactions that could be prevented but they simply were afraid or didn’t plan to mention them.
How it will be:
The new Rules of Procedure introduce a separate accompanying document to the draft act – a complex and comprehensive impact forecast, requiring serious analytics and work with data, the collection and accumulation of which begins today. Such an analytical document on a specific decision can be prepared by every ministry without exception. This approach will provide a comprehensive analysis and reduce the risk that an act adopted in the area of one ministry will be a surprise to another leading to unforeseen consequences.
Assessment of the public policy effectiveness and its review
How it was:
There was no assessment of the public policy effectiveness as such, because the public policy was an abstract category, which everyone understood in its own way. If there were some effectiveness reports, in most cases, they were based on the results of assessing the implementation of plans and strategies (as mentioned above).
It is also a bad practice that each new Government mainly begins to form the public policy from scratch. The system of the current regulation inventory is not yet fully established. There are now hundreds of valid planning documents of all kinds: government programs, policy concepts, strategies and doctrines. Unfortunately, there are rare cases when all these documents are revised and updated with the changes in the Government. And what’s worse, their number may increase, because more and more documents are added. This will result in chaos and fragmentariness. Sometimes, there are several similar documents at the same time to solve the same problem. It’s lucky if they at least do not contradict each other.
Such a selective and inconsistent approach to public policy assessment leads to the fact that acts are accumulated while being constantly changed. In fact, it is a real art to trace the logic of all changes, not to mention to understand whether all of these Government actions lead to the desired result and the problem solution.
How it will be:
In addition to the introduction of public policy documents that will at least systematize certain acts according to a single purpose and at most will give meaning to all Government actions, it is also planned to require reviewing all applicable program and strategic documents when adopting each new one in a particular area. Now we will putt the puzzle together and can see a complete picture. Moreover, there will be no changes in public policy without the prior assessment. Changes always imply amending the policy line. But we can change something effectively only if we understand the reason of the previous failure.
With the purpose of simplifying and accelerating all processes internally, the new Rules of Procedure are also cross-cutting with electronic systems and services for planning, forecasting, document flow and interaction between authorities.
Finally, it should be noted that the new Rules of Procedure of the Cabinet of Ministers have been “waiting” for political will to adopt it for many years. This document was constantly postponed for a reason. This is not a quick #win or a result that the Ukrainians will benefit from tomorrow and that can be stated loudly. Such conceptual changes require time and a lot of hard work, which is almost unnoticed at first glance, on a daily basis. Almost no one from outside the Government understands why they should pay so much attention to these seemingly internal rules of operation. And the civil service representatives, on the contrary, recognize the complexity and seriousness of new approaches and, obviously, are waiting for changes with fear. But it had to happen sooner or later. The impulsive-intuitive decision making model should be a thing of the past. Every decision should be so researched and discussed with the people who will be affected that, once adopted, it will work without any resistance as an indispensable element of a large and integrated mechanism of government control. This is out long road to rationality.
At a meeting on Wednesday, February 12, the Cabinet of Ministers of Ukraine approved several changes in agricultural and fisheries sectors developed by the Better Regulation Delivery Office (BRDO). How will these changes affect our lives?
A domestic register of producers of organic products certified to the Ukrainian standard will be developed for the first time in Ukraine. Previously, producers either registered such products according to international standards, or did not have such standardization at all compromising the consumers’ confidence in the “organic” label. With the introduction of open registers of producers of organic products, the information on organic producers certified according to national standards will be available online. A producer that fails to comply with organic standard rules will not receive certification and will be removed from public registers. From now on, only those producers that are certified to the Ukrainian standard while being included in the relevant registers will have the marking with the Ukrainian “organic” logo. “Organic” products without such certification should be removed from store shelves. In such a way, anyone can check any products labeled organic by using a special code in the open register and see whether the production of these products meets the organic standard rules or such marking is unfair advertising.
Experts from the Better Regulation Delivery Office (BRDO) proposed requiring business entities to equip vessels with remote control technologies – GPS sensors that will allow to monitor their movement through water areas. First and foremost, this initiative will protect responsible fishermen who suffer from unfair competition from poachers hiding the amount of fish caught due to the lack of control over the movement of fishing vessels. The sensor signals will be monitored by the appropriate authorities that will identify possible violations, such as illegal fishing. This is a fully European practice, according to which the liability for failure to install the technical equipment on ships is envisaged.
The fee for the special use of aquatic bioresources, which are our common wealth used by business for generating revenues, has not been revised for 10 years. Today, the fisherman has to pay only 116.72 hryvnias in the budget for industrial catch of one ton of red mullet, the market price of which is, on average, 160.000 hryvnias. BRDO experts suggested that the government should revise the fee considering the 10-year inflation rate and increase it by 3.4 times. Thus, catching one ton of red mullet fish will cost 396.85 hryvnias against 160.000 hryvnias of its market price.
In addition, BRDO experts believe that the funds received for the special use of aquatic bioresources should be used for the development and restoration of the fishing industry, for example, stocking of fish, aquaculture development and so on. This requires legislative changes.
In addition to the above initiatives, the government approved the criteria supported by BRDO experts, which assess the degree of risk of metrological enterprises and determine periodic scheduled state supervision (control) measures.
However, the Government has not yet adopted a resolution on the Strategy for the Development of the Fishing Industry in Ukraine as a comprehensive document that should shape government policy in the fisheries sector. What is proposed in the document?
Despite having access to the Black and Azov Seas and the extensive river and lake system, Ukraine imports up to 70% of all fish consumed. In 10 years, the catch rate has decreased by 60% and the illegal fishery volume is 43% higher than the legal one. These indicators are a result of the lack of a state fisheries development policy that should envisage funding for the restoration of bioresources, increased penalties for their illegal use as well as increased transparency of economic activities in the sector. These tasks formed the basis of the strategy for the development of the fishing industry drafted by the relevant government bodies such as the State Agency for Fisheries and the Ministry of Energy and Environment Protection with the support of the Food and Agriculture Organization of the United Nations and European Union through the project “Support to Agricultural and Food Policy Implementation” (SAFPI). Within a few months, the Better Regulation Delivery Office (BRDO) has advocated the implementation of the Strategy in the Ministry of Energy and Environment Protection and the Ministry of Economic Development and Trade and recommended its adoption by the Government.
The changes proposed by the document include combating illegal, unreported and uncontrolled fishing, in particular through the introduction of a traceability system for aquatic bioresources. This is an electronic service that will register all transaction with fish products from suppliers to distributors. This will help to make fisheries legal and strengthen responsibility for the illegal use of aquatic bioresources, if, for example, a batch of fish with no relevant information in the electronic service has been identified.
In addition, the draft resolution contains rules on the promotion of aquaculture in Ukraine – artificial fish cultivation. According to the Food and Agriculture Organization of the United Nations, in European countries, the volume of aquaculture exceeds the fishing volume (fishing in the rivers or the sea without pre-cultivation of fish) by 17%. In Ukraine, the fishing volume is three times higher than the volume of aquaculture.
The BRDO experts are convinced that it is necessary to impose higher fines for illegal fishing as the next step together with the introduction of the electronic system, because the amount of punishment is not proportional to the damage to aquatic resources. In particular, fines amounting to 5.8 million hryvnias, of which only 2.3 million hryvnias were paid, were imposed by fishery management authorities in 2018. At the same time, the state losses caused by poachers amounted to 27.9 million hryvnias, of which only 1.7 million hryvnias were paid.
The BRDO team encourages the Government to approve the Strategy for the Development of the Fishing Industry, thereby making a significant step towards the effective use of shared natural resources.
The telecom industry is very technological and dynamic. However, in Ukraine, it is still regulated by the legislation adopted over 15 years ago.
Such a regulatory burden hinders the development of telecom business and network engineering adversely affecting the quality of services and consumers.
The Draft Law on Electronic Communications is aimed at improving this situation.
It has been developed by the parliamentary committee on digital transformation under the leadership of the committee’s deputy chairman Oleksandr Fediyenko for several months.
The working group consisted of the representatives of operators, providers, associations and BRDO experts.
The reform is based on the latest developments in the EU – the European Code of Electronic Communications. The EU Member States should implement this document by the end of 2020. By adopting the document, Ukraine will get a chance to introduce new approaches in step with EU countries.
We have already talked about the benefits that mobile telecommunications consumers will receive if the draft law on electronic communications is adopted. Let’s consider the benefits that the draft law provides for businesses and network development.
It is the right of operators to use technologies without bureaucratic obstacles.
Different technologies such as 2G, 3G, 4G and 5G are used to provide mobile communications. Ukraine is one of the last countries in Europe to introduce3G and 4G technologies. The reason for that delay is the lack of technological neutrality: the state did not allow the three largest operators to use the latest technologies.
It took years of political struggle before the operators started to use them.
Technical neutrality gives access to new mobile communication technologies. If an operator wants to use some new technology to provide services, this is its right and an opportunity to grow its business. This will allow Ukrainians to access state-of-the-art communications technologies faster.
The telecommunications industry is very technological and dynamic. However, in Ukraine, it is still regulated by the legislation adopted over 15 years ago.
Such a regulatory burden hinders the development of telecom business and network engineering adversely affecting the quality of services and consumers.
The Draft Law on Electronic Communications is aimed at improving this situation.
It has been developed by the parliamentary committee on digital transformation under the leadership of the committee’s deputy chairman Oleksandr Fediyenko for several months.
The working group consisted of the representatives of operators, providers, associations and BRDO experts.
The reform is based on the latest developments in the EU – the European Code of Electronic Communications. EU Member States should implement this document by the end of 2020. By adopting the document, Ukraine will get a chance to introduce new approaches in step with EU countries.
We have already talked about the benefits that mobile telecommunications consumers will receive if the draft law on electronic communications is adopted. Let’s consider the benefits that the draft law provides for businesses and network development.
It is the right of operators to use technologies without bureaucratic obstacles.
Different technologies such as 2G, 3G, 4G and 5G are used to provide mobile communications. Ukraine is one of the last countries in Europe to introduce3G and 4G technologies. The reason for that delay is the lack of technological neutrality: the state did not allow the three largest operators to use the latest technologies.
It took years of political struggle before the operators started to use them.
Technical neutrality gives access to new mobile communication technologies. If an operator wants to use some new technology to provide services, this is its right and an opportunity to grow its business. This will allow Ukrainians to access state-of-the-art communications technologies faster.
The draft law is harmonized with the European regulation. This means that the game rules in the Ukrainian market will become clear to companies operating in the EU.
The requirements of Ukrainian legislation for providers and operators, including the permit system, as well as the regulator’s powers, will be in line with EU standard practices. That is, the Ukrainian electronic communications market will become more attractive to European investors.
The draft law on electronic communications sets out the mechanisms to reduce the cost of deploying fixed and mobile broadband Internet networks by facilitating operators’ access to the infrastructure.
In practice, this implies the obligation of physical infrastructure owners to provide the providers with access to it for network construction, a single information office on co-location and use of infrastructure elements and the resolution of infrastructure access disputes by the regulator (National Commission for the State Regulation of Communications and Informatization (NCCIR).
In such a way, the network engineering will be less expensive and competition will increase. This will encourage operators and providers to offer better services and expand their coverage.
The draft law proposes to allow operators to deploy low-power base stations under a simplified procedure without assigning radio frequencies to individual equipment.
This means the flexibility and no bureaucratic obstacles in the development of 5G networks.
The Radio Frequency Resource (RFR) as a component of the radio frequency spectrum suitable for transmitting and receiving electromagnetic energy by radio-electronic equipment is physically restricted. It is distributed between different operators.
Currently, the operators are prohibited from making their spectrum available to third parties. This does not allow the operators to be flexible and effective in using it. As a result, the RFR may “stand idle” or be not fully used. This has a negative impact on the quality of services for subscribers.
The draft law proposes to allow operators to transfer the spectrum for use to third parties – the so-called spectrum sharing practiced in EU countries. In Ukraine, this will be coordinated by the NCCIR. The reasons for refusal are described in the draft law.
Now, no government agency has complete information on Internet coverage (BBA) of the country. The draft law proposes to oblige the regulator to carry out geographic network overviews and update the data at least once a year.
This will allow the state to decide on the need to build networks in the regions where there are no networks. This will be the basis to bridge the digital divide.
The draft law provides for the possibility of full interaction of business and citizens with the regulator in electronic form. An electronic platform will be created for this purpose. It will provide administrative services along with access to registers and databases.
Special attention is paid to information in the format of open data. Anyone will be able to access public information in a convenient format and create services for citizens or businesses on its basis.
The draft law provides for comprehensive legislative changes and the introduction of new regulatory approaches (it contains more than 130 articles), so the market players may have questions about different aspects of the document.
Almost all of the fundamental contradictions were resolved within the working group that drafted the law. However, some market players still have some reservations.
In particular, concerning a significant increase in fines for violation of subscribers’ rights, a new approach to market analysis by the regulator and a change in the approach to defining and regulating universal services, to which the broadband access is referred.
Currently, much of the issues of operators and providers relate to technical aspects or fears about a broader interpretation of rules by the regulator. I am sure that they will be resolved during the consideration of the draft law by the parliamentarians.
I hope that the Parliament will support the long-awaited reform of the telecommunications market, which will promote the development of services, networks and protection of subscribers as well as bring Ukraine closer to the harmonization of the digital market with the EU.
Source: epravda.com.ua
Source: Mind.ua
Last year, the draft law on electronic communications was registered at least four times in the Verkhovna Rada, but each time it was sent for revision.
The day before, on February 5, a new draft law on e-communications No.3014 was registered in the Verkhovna Rada. However, the text of the document is not yet available.
Some of its initiators and drafters told the Mind portal about some of the new document’s innovations. For example, the IT and Telecom Sector Head at the Better Regulation Delivery Office (BRDO) Ihor Samokhodsky spoke, in particular, about how the document would protect the rights of subscribers.
According to the National Commission for the State Regulation of Communications and Informatization (NCCIR), there are 54 million active SIM-cards used by Ukrainians. According to various estimates, the population is between 37 and 42 million Ukrainians. It is easy to calculate that on average one subscriber has from 1.3 to 1.5 SIM-cards. It is safe to say that all or almost all Ukrainians use mobile communication services.
Although mobile communications affect almost everyone, subscribers are hardly protected due to the inadequate current legislation. Every day, people are faced with common annoying issues such as SMS spam, unreasonable charges, interruptions in Internet access and others.
To address these issues, experts from the Better Regulation Delivery Office (BRDO) have proposed changes that formed the basis for the draft law “On Electronic Communications” developed on the basis of the European Code of Electronic Communications. It gives special attention to the protection of subscribers.
Top 5 subscribers’ problems to be solved by the draft law:
Unwanted SMS-messages such as “Cheap Taxi” have long become an annoying thing. And spam calls to subscribers are used even in political campaigns. The current legislation does not provide for liability for unwanted mailings and does not establish any requirements to them.
The draft law introduces:
It is expensive and difficult for subscribers to defend their rights. In case of wrongful charges on mobile accounts, they need to go to court. The dispute amounts are usually small: tens or hundreds of hryvnias. But the costs, on the contrary, are high: they need to hire a lawyer, file a lawsuit and prepare for a lengthy litigation.
And such a subscriber will face with a professional team of operator’s lawyers with maximum resources because any loss for the operator is a negative precedent.
In such a situation, it is easier for subscribers to accept the violation of their rights than to defend them.
The draft law introduces:
This is a simple alternative to litigation. It will be enough to contact the National Commission for the State Regulation of Communications and Informatization (NCCIR) in electronic form to defend own rights. The NCCIR has the authority to consider the dispute and make a binding decision. And all this – within two months from the date of appeal.
Currently, it is not always possible to purchase a specific service. For example, a subscriber wants to pay only for minutes for calls. However, the operator offers just a “package” of services including the Internet, minutes and SMS. In such a way, even residents of villages with virtually no mobile Internet pays for the Internet access.
The draft law introduces:
That is, if you only need minutes for calls, you pay only for them.
Promo Internet speed of “up to 100 Mbp/s” provides subscribers with very little information.
Because both 1 Mbp/s and 99 Mbp/s are up to 100 Mbp/s.
The draft law introduces:
In such a way, when choosing a service provider, subscribers can expect the clear minimum speed of service instead of buying a pig in a poke.
The current amount of the fine for violation of subscribers’ rights is from 850 to 1,700 hryvnias (current Article 148-2 of the Code of Administrative Offences of Ukraine). This amount does not stimulate large market players.
The draft law introduces:
We expect that the new fines will serve an effective deterrent factor with regard to subscribers’ rights violation.
A working group established at the Committee on Digital Transformation of the Verkhovna Rada has worked on the draft law. It included, in particular, representatives of Ukrainian mobile operators, business associations and independent experts. Therefore, companies will also receive a lot of progressive standards: technological neutrality, online interaction with the regulator, transfer of rights to use the radio frequency spectrum and other benefits.
In such a way, the implementation of the E-Communications Code will benefit both all mobile subscribers and service providers, so we hope for a quick consideration of the legislative initiative in the Parliament and the urgent implementation of positive changes in the market.
Source: epravda.com.ua
On February 1, a government resolution launched a pilot project allowing to sell virtually all unprocessed timber traded in Ukraine through electronic auctions.
This change is the second integral component of making the Ukrainian timber market legal along with applying the electronic timber management system throughout the country.
Both changes are recommendations of the Better Regulation Delivery Office (BRDO), which experts have drafted relevant resolutions together with the State Forest Resources Agency and Prozorro.Sales.
The way it was before: some timber was sold by logging companies under so-called “direct contracts”.
This is when forestry directors directly agree with buyers to sell the timber they harvest without going through transparent electronic auctions, but at a price and volumes that they themselves agree to. There were many corruption schemes in this case.
For example, forestry directors offered buyers to purchase timber at a below-market price by using kick-back schemes.
Or, say, directors put up the timber for auction at an inflated price and then informally offered buyers to do without the auction, offering a lower price, but with a “kick-back”.
In these and other schemes, such purchase and sale transactions were not accounted for at fair value, and both the price and the volume of timber sold was not included in the electronic timber management system when sold by communal forestry farms.
As a result, the logging company did not receive the profit it would have received in the case of selling timber at the market price and with no corruption component and reduced its profitability.
As a result, all Ukrainian citizens lose money from such schemes in the form of forgone dividends and taxes to the state budget.
If we add the volume of the illegal timber market, which, according to experts, accounts for about 12,000 illegal sawmills, or 20% of the total market, the Ukrainians lost about 200 million hryvnias of state budget revenues annually from non-transparent activities and corruption in the timber market.
And that’s even not taking into account the fact that till now, the state did not have information about the sale of about 25% of the forest fund, since not all forest users introduced electronic timber management – counting and chipping of every fell tree, which should increase the risk of illegal logging. Therefore, this is a rough estimate of losses.
The way it will be now: all forest users are obliged to sell timber through electronic auctions and use the electronic timber management system to monitor the circulation of the available resource, i.e. the sales.
It will be impossible to do without the auction, as all timber transactions will be recorded in the electronic system.
If the resource “disappears” from the asset list of a certain forestry, the reason for this can be only the result of an open electronic auction. Otherwise, they will deal with law enforcement officers.
Auctions will be held on several marketplaces: Prozorro.Sales for large lots of large forestry companies with a volume of 150 cubic meters of timber or more than 200 thousand hryvnias (about 25% of all transactions in the timber market) and other electronic auction systems (such as the LIAC known for many forestry farms), if the volume is smaller.
Participation in auctions in the Prozorro.Sales system will cost the registration fee for participants (from 340 to 1,700 hryvnias).
In addition, auction participants should pay a guarantee fee of 5% of the starting price confirming their serious intentions.
The guarantee payment is refunded if the auction participant loses, or is included in the amount to pay for the lot.
In case of winning the lot, the participant should pay 1.5% of the lot price in the form of a service fee, which is distributed as follows: 30% of the amount for the Prozorro.Sales system operation and 70% – for marketplaces providing participants with technological, legal and other support in the auction.
According to the Prozorro.Sales calculations, the percentage of the service fee can be reduced by half in case of complete transition of all timber auctions to the Prozorro.Sales system.
However, the system needs to be upgraded for the further specialized work with large volumes of timber auctions.
Such changes introduce clear trade mechanisms with competitive but not “contractual” timber pricing, while leading to market unshadowing, systematic filling of the state budget instead of private pockets of administrators of the forest, which is our common exhaustive resource.
The transparent rules of the game will allow logging companies to sell timber at higher and competitive prices.
Since it is the pilot project, it will allow the government to currently eliminate the barriers to the activities of both honest forest users and transparent businesses.
What changes should be made. Objectively, we should not only increase the profitability of logging companies, but also systematically invest in restoration and protection of forests as our shared, vulnerable ad limited resource.
Our position is that the government and parliament should provide funding for the forest protection and restoration, including planting of forests on new lands, fire prevention, combating illegal logging and pests.
Such funding can be envisaged by resuming state targeted programs or reducing the rate on payment of state forestry dividends.
Conclusion. Obviously, those who made money from non-competitive timber sales and are not ready to compete on transparent rules with other market participants will oppose to fill the state budget with about a quarter of a million hryvnias annually.
Including competing with foreign entrepreneurs who are ready to pay a competitive price and fill the Ukrainian budget.
However, even under these conditions, domestic forest processing companies will not remain without timber, because they have a much better understanding of the domestic market.
And if there is the real opposition, it will be a sure signal that changes are working for the benefit of all citizens.
The digital divide doesn’t allow millions of Ukrainians to take advantage of high-quality digital services and modern educational opportunities as well as unlock entrepreneurial potential on a daily basis. BRDO aims to change this situation in e-communications.
On February 5, Ukrainian Parliament finally registered an innovative draft law No.3014, over which BRDO experts worked hard as part of a working group together with the relevant Parliament Committee and market participants.
The document lays the groundwork for the comprehensive reform in the sector for the years ahead and aims to better protect consumer rights, provide Internet access anywhere in the country and create more predictable and stable conditions for telecom operators.
In such a way, the main provisions of the draft law aimed at protecting service consumers are:
In addition, the draft law improves the operational environment for e-communication service providers. The proposed changes include:
The draft law also stipulates that the state will identify areas with no Internet access, in particular because it is economically unprofitable for operators to provide their services there. In such cases, the possibility of deploying electronic communications networks by providing providers with free access to state and municipal infrastructure and, consequently, by reducing the cost of network construction will be considered. The full information about the real broadband Internet coverage of Ukraine will allow to gradually provide consumers with access to universal services throughout the country in the most efficient way.
It is important that the adoption of the document will also be one of the major steps towards the EU digital single market. Ukraine is implementing the latest EU legislation in the field of electronic communications, as the draft law is based on the European Code of Electronic Communications 2018, which will provide legislative stability for the Ukrainian e-communications market.
We hope for the early consideration of the draft law by the Parliament.
Why do some entrepreneurs work in the shadow economy?
They fear the unpredictability of the state. Entrepreneurs cannot be sure that one day they will not be inspected and fined a million hryvnias or will not be urged to provide documents they have never known existed.
Some entrepreneurs think that they can be saved from such unpredictability by working in the shadow economy. However, the other side of the coin is that it is impossible to take out a loan or participate in a financing program to develop own business without formal business registration.
BRDO provides a better solution – the #StartBusinessChallenge service of step by step guide.
Oleksiy Dorohan spoke about this service during the presentation of the Government Program “Affordable Loans 5-7-9%” today. By using the SBS, you can get information about what documentation you need to do business as easy as one-two-three: what you need to register, where it can be done and how much it will cost.
There are now nearly 120 types of businesses with locations in 29 cities in the platform. Join at https://sbc.regulation.gov.ua
For information:
The Government Program “Affordable Loans 5-7-9%” was implemented at the initiative of the President of Ukraine and the Cabinet of Ministers of Ukraine to support investment projects of micro and small enterprises helping to create new workplaces, legalize and expand small businesses, ensure import substitution and return of migrant workers. On commission of the Government of Ukraine, the Program will be implemented by the Entrepreneurship Development Fund through partner banks that own the relevant technologies and actively lend to micro and small enterprises as the target group of the program.
Coal plays a significant role in the fuel balance of Ukraine. In 2018, its consumption volumes amounted to 54.8 million tons. Although there are about 3.3% of the world’s coal reserves on the territory of our country, only 61% of our domestic resource needs are met by domestic production. Compared to 1990, coal production in Ukraine has fallen five times and continues to decline. 39%, or 21.4 million tons, of coal required for the economy is met by import. This situation is caused not only by the fact that the Russian Federation occupied the main coal mining territories, but also by the ineffectiveness of current state policy in this area.
The government and business representatives worked on the ways of solving the industry’s problems during the Roundtable “Coal Industry Transformation: steps towards efficiency and greening” on January 30. The event was organized by the Better Regulation Delivery Office with the support of EU4Business/FORBIZ as part of the Public Dialogue #PRODialogue.
BRDO experts conducted a systematic analysis of the coal industry and concluded that the current regulation does not create the necessary environment for the industry’s development and restructuring and does not offer opportunities to replace coal with other energy resources. Moreover, one in five of 88 industry-specific legal acts that regulates the industry are illegal or irrelevant.
“It is necessary to change approaches significantly and restructure the coal industry to ensure the Ukraine’s energy independence. Now it is disappearing and can’t meet not only the domestic coal needs, but also requires huge government subsidies. In addition, coal mining enterprises have a significant negative impact on the environment. The decarbonisation and greening of production should be the focus of special government’s attention,” Anton Zorkin, Head of the BRDO Energy sector, said.
The shortage of coal of domestic production and the chronic industry’s unprofitability are explained by the fact that there are mostly non-profit mines with the highest cost of coal production in state property. At the same time, insufficient investments in new construction and renewal of fixed assets of such enterprises do not allow to modernize production and create additional operational and safety problems. It is worth noting that 96% of domestic mines have been operating without proper reconstruction for more than 20 years, and 2/3 of the existing equipment expired their service life.
Another layer of problems is the lack of effective regulatory solutions, including fiscal ones, to prevent further negative environmental impacts of coal enterprises. Currently, the rate of rent for coal is 20 times lower than the rate for the extraction of natural gas, while the environmental tax is not applied to the coal market players at all.
Another problematic aspect of the industry is the high level of market concentration. For example, over 80% of the coal market is currently controlled by the DTEK Energo private company.
Thus, there are currently 2 scenarios for the further development of the coal industry: either to continue the current ineffective policy with further aggravation of industry’s problems and increase of relevant subsidies; or to introduce a “new energy” – a more constructive approach that involves defining new short and long-term goals in the industry and developing a roadmap to achieve them.
Therefore, according to the BRDO Office, the following steps are necessary for systemic changes in the industry:
In addition, according to BRDO experts, shifting the economy to low-carbon development is an important task of the Government in the longer term. For this purpose, it is necessary to develop the Concept of decarbonization of the Ukrainian economy with targets for the gradual reduction of coal use for energy production.
The phasing-out of coal-fired TPP and CHP plants, increase of the share of RES in electricity to 25% by 2035 and implementation of European legislation in energy efficiency and climate protection are the steps that will help to reduce harmful emissions, protect the environment and health of citizens as well as reduce energy dependence of the country.
The event was also attended by Ivan Plachkov, Chairman of the All-Ukrainian Energy Assembly, Ihor Shumelyuk, Deputy Chairman of the State Labor Service of Ukraine, representatives of the Ministry of Energy and Environment Protection of Ukraine, energy companies, the public and the media.
For information:
The Ministry of Economic Development and Trade and the State Regulatory Service with the assistance of the BRDO Office are the initiators of the regulatory reform. The process is supported by the EU as part of the EU4Business/FORBIZ initiative.
BRDO is a leading independent expert-analytical center for regulatory policy in Ukraine.
The USAID’s Competitive Economy Program (CEP) and Better Regulation Delivery Office have developed the interface of the Interactive Platform for SMEs. The work on the public part of the Platform’s functionality is also on its final stages.
As of now, the Platform’s website is being updated with content in order to become fully functional during February. 200 regulatory acts were revised by the experts in the process. Thanks to that detaled analysis the information was systematically sorted for the users’ convenience.
According to the Deputy Head of CEP Olesia Zaluska, “The Interactive Platform for SMEs will become complex information resource where entrepreneurs could receive full information about planned state inspections, prepare for them, learn about the mechanisms of legal protection, and minimize risks.”
During the development of the Platform’s functionality, the inquiries of the future users of the resource, received during the entrepreneurial survey regarding state inspections:
The following sections of the Platform will be available to users once the Platform will be publicly presented:
1. Legislation including blocks “Regulatory acts” and “Specifics of control” grouped by the defined sectors.
2. Legal protection with recommendations about its instruments and procedures of reaction if state authorities are violating rules and conditions of an inspection.
3. Documents’ templates including “Typical documents” and “Documents for appeal” against violations of inspectors.
4. Explanations with videos, articles, infographics, and other clarifying materials about inspections.
5. Telegram Chatbot with which users will be able to go through the entire process of preparation, realization, and appeal of an inspection.
6. Helper which gives users the description of the sequence of actions to eliminate negative outcomes of inspections and their prevention and minimize the risks for entrepreneurs.
“We wanted to make the interface simple and comprehensive. Consice design actually provides wide and convenient functionality. Expert team has been carefully and selecting and processing the content in order to systematize it according to teh convenient sections. Our goal is to provide complex information assistance to users: from preparation to an inspection to legal protection instruments,” says BRDO expert Yana Horiunova.