In accordance with the order of the Cabinet of Ministers, the BRDO expert Volodymyr Holovatenko was appointed to the post of Deputy Minister of Energy and Environment Protection of Ukraine.
At BRDO, Volodymyr headed the Market Surveillance sector, where the team is engaged in comprehensive analysis of methods and tools of state regulation and development of conceptual documents on effective regulation. Under his leadership, a number of legal regulations, in particular, in licensing and permit systems, aimed at simplifying business activities were drafted.
In his new position, the expert will deal with public policy-making and establishing more effective interaction between the ministry and executive bodies responsible for implementing state policy on energy and environment.
We wish Volodymyr fruitful work in his new position and professional success for the benefit of the whole industry and the country!
Access to the Internet is already recognized by the UN as one of the fundamental human rights. It is absolutely justified, because the world is on the verge of the fourth industrial revolution, when it is moving mainly to the online and automated system of interaction due to the ICT development.
Today, as part of the International Forum “Digital Transformation 2019” organized by Huawei Ukraine in partnership with the Better Regulation Delivery Office, international informatization trends, innovations and the topical question of how to transform Ukraine effectively with the help of digital technologies were discussed.
The BRDO Head Oleksii Dorohan tried to find the answer during his speech.
The expert emphasized the importance of broadband access (BBA) to the Internet as a driver for the development of the Ukrainian economy and society.
Oleksii said that one of the goals of the newly created Ministry of Digital Transformation was to provide BBA to the Internet throughout Ukraine for the next 3 years. According to the BRDO Head, the implementation of such an ambitious plan requires:
The BRDO Office’s achievements for digital transformation of the country include:
Oleksii Dorohan spoke about the legislative initiative in more detail during the panel discussion “Opportunities and Challenges for FBB Development in Ukraine” as part of the forum.
“We are convinced that developing and adopting a good law is not enough. It is also necessary to provide an effective mechanism for its implementation. This is why, first and foremost, we need the Concept of State Policy in this area developed jointly with all stakeholders. This will allow to set targets with specific indicator, develop a clear plan for achieving them, define those responsible, and then we will be able to evaluate both quantitative and qualitative results achieved.”
BRDO Head Oleksiy Dorohan spoke about useful tools that would allow developing business activities in communities as part of the Conference of USAID Ukraine-USAID Ukraine DOBRE “Strategic Development and Investments” Program partners.
Oleksiy gave some useful tips for local government bodies during the panel “How to stimulate local small and medium-sized businesses and support entrepreneurship?”:
The Cabinet of Ministers adopted a resolution establishing a mechanism for implementing the decision introduced by recent amendments to the Law of Ukraine “On Plant Quarantine”. The Better Regulation Delivery Office has been actively involved in the drafting of both documents.
From now on, owners of cargo plant products will be able to choose between state and private laboratories, and the phytosanitary inspection procedure will be more flexible, quality and faster.
The system of control over objects of regulation will also be changed: a risk oriented approach, taking into account the selectivity criteria, will be used. This will increase the level of trust in regulatory authorities, minimize the number of contacts with government agencies and facilitate phytosanitary procedures when importing plants and plant products.
In addition, the decisions will harmonize Ukrainian legislation with the Council Directive 2000/29/EC, Regulations of the European Parliament and of the Council 2016/2031 and 625/2017.
Inspection reform is gaining momentum in Ukraine. In 2017, the Better Regulation Delivery Office, with the assistance of the State Regulatory Service of Ukraine and the MEDT, launched an Inspection Portal inspections.gov.ua as a tool to transform the inspection system into a risk-oriented approach. The task of inspection bodies is to evaluate the activities of economic entities in a transparent way and prevent risks instead of recording violations and imposing fines as it was during 99% of inspections recently conducted.
29 inspection bodies have already joined the portal. As of September 2019, information on 250,000 planned inspections and 300,000 results of inspections already conducted in 2018-2019 was published on the portal. As this information is publicly accessible now, entrepreneurs will know when and why they will be inspected.
The next step in the implementation of inspection reform is to develop an Interactive Platform for SMEs, which will allow each entrepreneur to manage their own risks and become a “single point of contact” for interaction of businesses and state supervision and control bodies. The resource is developed by BRDO with the support of the USAID’s Competitive Economy of Ukraine (CEU) program.
“Successful results of business inspections depend 50% on the better preparation for them as well as the awareness of own rights and the rights of inspectors. The interactive platform will provide 100% of this information 24/7, and this will reduce a potential for abuse significantly,” Yana Horyunova, BRDO expert, said.
“Inspections are a sore subject for every entrepreneur. As a rule, SMEs do not have qualified lawyers to prevent inspectors from abuse. To help small and medium-sized businesses to avoid being abused during inspections, we are involved in developing an interactive online platform that will greatly increase entrepreneurs’ access to the information they need,” Lubomyr Chorniy, team leader for improving business climate of USAID “Competitive Economy of Ukraine” Program, said.
The interactive platform will consist of an open section accessible to any visitor, as well as will offer a wider set of tools for registered users.
For example, the public section will include:
Registration and authorization on the platform will provide users with even more options:
In such a way, the Interactive Platform will boost the capacity of small and medium-sized businesses thorough practical tools to reduce the risk of business activity and protect the rights of entrepreneurs. Simplifying access to information, transparency and clarity of state requirements for SMEs will reduce corruption and increase accountability of inspection bodies.
The project implementation implies the development of a training manual for SMEs with the help of NGO “Easy Business”. To help regional businesses to be better informed of existing opportunities, a training event for Chernihiv entrepreneurs was held in partnership with the State Regulatory Service USAID’s CEU Program, BRDO and NGO “Easy Business” last week, and a similar event is planned for Zaporizhzhya this week.
As a reminder, the plan of comprehensive state control measures for 2020 was approved on November 15. You can find it on the Inspection Portal at the hyperlink.
For information:
BRDO is a leading independent expert-analytical center for regulatory policy in Ukraine.
The USAID “Competitive Economy of Ukraine” Program (USAID CEU) supports business startups and small and medium-sized enterprises (SME) in becoming more competitive in the domestic market of Ukraine and international markets, assists in creating a simplified and transparent business climate as well as helps to develop an effective trade policy to enable SMEs to take advantage of international trade.
Source: Unian
The Ukrainian construction market has been impacted by corruption and corrupt officials for many years. President Zelensky has set a task to reform the industry in two months. UNIAN was figuring out at what stages corruption risks arise and in what way the government plans to deal with them.
President of Ukraine Volodymyr Zelensky set another ambitious task: to eliminate total corruption in state architectural and construction control and urban planning by the end of 2019. The Head of State gave the appropriate instruction to the Minister of Development of Communities and Territories Olena Babak.
Zelensky emphasized the need to put the provision of administrative services in construction into electronic format and introduce automatic registration in the register of permits, as well as implement an exclusively judicial procedure to appeal against preparatory and construction works based on specified permits and cancel a declaration of facility readiness for operation.
The tasks assigned are related to activities of the State Architectural and Construction Inspectorate (DABI), which is responsible for architectural and construction control, permitting and registration functions and licensing.
Since its establishment, DABI has been recognized as one of the most corrupt government agencies.
According to Oleksiy Dorohan, CEO of the Better Regulation Delivery Office (BRDO), significant corruption risks arise at the stage of issuing documents that give the right to build.
“For example, as an entrepreneur, you need to get a permit to perform construction works. You submit your project that has already passed the examination to DABI. It is carried out only by experts who are certified by DABI itself. But this doesn’t prevent DABI from re-reading this project and looking for flaws. In many cases, it finds minor mistakes and refuses to issue permits,” he says.
According to Dorohan, the number of refusals to issue construction permits is almost half of all applications. For example, 46% of applications resulted in refusals in the first quarter of this year, and 34% – in the second quarter.
It is interesting is that, in the vast majority of cases, the justification for refusals contains formal grounds, and many of them are repeated in all refusals.
“For example, the composition of project documentation does not comply with some paragraph of the Order of the Ministry of Regional Development. Either the examination document submitted is not the original document, or the copy is not notarized in accordance with the established procedure. There are also many cases when even nationwide projects are rejected for these reasons. For example, construction of roads, reconstruction of hospitals,” Dorohan said.
Corruption tax
Of course, we can assume that there are mistakes in a certain number of applications. But, according to Dorohan, when the number of formal reasons is half of all refusals, it looks like creating conditions to extort bribes.
The BRDO CEO assures that developers are constantly complaining about corruption in DABI.
“It is impossible to provide the exact details of bribes. We have been collecting information for 2018, which we can’t verify, but on average, DABI corruption fees cost $4.5 per square meter,” he said.
Dorohan noted that a lack of public information on reasons for rejection fueled corruption. Thus, it is impossible to take into account other people’s mistakes when applying.
“This process is not transparent. A lot of permits are issued, but no one knows on what documents they are based. Thus, it is impossible to take into account even other people’s mistakes. That is, on the one hand, inspectors find mistakes in the documents, which have already passed the examination, in a non-transparent manner, and on the other hand, competitors can’t obtain information on successful documents,” the expert said.
As a result, developers need to re-submit documents. And they do it till their projects are perfect, or the mood of DABI employees is changed.
Read more at UNIAN
The reason is the inefficient use of energy resources by industrial enterprises, which is unacceptable in the context of high import dependence of the country.
How to change the situation? Today, BRDO experts presented their vision and the Green Paper “Encouraging Industrial Enterprises to Become More Energy-Efficient and Protect the Environment” during the roundtable on the subject.
They identified the main problems on the way to energy efficiency and their solutions:
“The approach of industrial enterprises to energy efficiency should be changed in an integrated manner: the state and businesses should work together to reduce energy consumption, and thus create comfortable conditions for technology development and environmental protection,” the BRDO Head Oleksii Dorohan said.
Join the dialogue!
The roundtable online broadcast video is available here: watch
Unfinished residential buildings are pretty common in Ukrainian realities. This means at least 200,000 families who have invested in construction but have not received any housing.
Why so? Because the legislative regulation of relations in this area has a number of gaps while being ineffective. Hence, it results in the lack of an effective system of guaranteeing the fulfillment of obligations to investors, the possibility of illegal construction, misuse of investor funds, improper control over activities of developers performed by supervisory and law-enforcement authorities and so on.
As a result, the rights of housing construction investors are virtually unprotected against the actions of unscrupulous real estate developers. Often, investors are neither able to obtain ownership of real estate units nor to repay the funds involved in such a construction project.
To address the problems of affected investors, parliamentary hearings with the participation of BRDO Head Oleksii Dorohan were held today. A few years ago, a law #7084 aimed at protecting investments in construction projects and preventing problematic real estate developments was drafted with the involvement of the BRDO Office.
In particular, it provides for:
• establishing an exclusive list of ways to attract funds from individuals and legal entities for residential real estate construction;
• introducing a mechanism of state registration of the ownership of objects under construction;
• uselessness of a contract of construction object purchase, if the ownership of this object is not registered in the State Register of Real Property Rights;
• regulating a procedure for conclusion, execution and termination of sale and purchase contracts for objects under construction;
• the need to agree significant changes to construction projects that directly affect investors’ rights and interests (change in the number of floors, total area, plan, etc.) with investors;
• transparency of information on construction and financing of projects (in particular, documents related to the construction, its status, planned date of commissioning, etc.).
We hope that the document will be finalized and submitted to the Parliament in the near future.
On October 28-30, 2019, a delegation of EU high-ranking officials visits Mariupol to participate in the RE:THINK Mariupol Investment Forum. Since the beginning of this year, the EU increased its support for the Azov region to help mitigate the impact of Russia’s destabilizing actions. A new specific step is the opening of the EU Projects Office in Mariupol, which was first announced during the EU-Ukraine Summit in July 2019, and became a special event during the Forum.
The European delegation is headed by Christian Danielsson, Director General for European Neighbourhood Policy and Enlargement Negotiations, who is accompanied by Peter Wagner, Head of the Support Group for Ukraine, Jean-Erik de Zagon, Head of the Permanent Representation of the European Investment Bank (EIB) in Ukraine, and the Ambassador Matti Maasikas, Head of EU Delegation to Ukraine.
Mr. Danielsson joined the opening of the RE:THINK Investment Forum in the morning and later took part in the launch of the EU Projects Office in Mariupol together with President Volodymyr Zelenskyy.
“The EU Projects Office ensures the physical presence of the European Union in Mariupol while being a contact point for residents of the Azov region. The Office will serve as a hub for EU events in the region and help transform Mariupol and the rest of this region of Ukraine into a better place to live, study or run a business,” Christian Danielsson said during the opening ceremony.
The EU Projects Office in Mariupol will present two EU flagship programmes: the U-LEAD with Europe: Ukraine Local Empowerment, Accountability and Development Programme co-funded by the EU and EU Member States such as Germany, Denmark, Poland, Sweden and Estonia, as well as the EU Anti-Corruption Initiative in Ukraine (EUACI). These programmes will further support and enhance the processes of decentralization and counteracting corruption in Mariupol and throughout the Azov region. This activity will be a tangible and constant signal of EU solidarity while strengthening the reform agenda in the country. Other EU programmes may be integrated into the Office work later.
A special event organized by the EU as part of the Mariupol Investment Forum was the Entrepreneurial Journey across EU4Business Programmes that brought together more than 130 regional start-up entrepreneurs to make them aware of business creation, development and support opportunities offered by the EU. This event is one of the key events taking place in the region during the European Entrepreneurship Week in Ukraine in 2019 and organized with the assistance of the Better Regulation Delivery Office (BRDO).
“The EU is committed to support entrepreneurship development and improvement of the business climate in Ukraine. Our EU4Business initiative also provides better access to information and funding for small and medium-sized enterprises – we want to make sure that existing and potential entrepreneurs in the Azov region are aware of these opportunities and benefit from them,” Ambassador Maasikas said.
During the event, participants were introduced to support opportunities at different stages of entrepreneurship development: how to start and register a business, improve professional skills, obtain financial resources and start exporting to the EU and world markets with the support of EU4Business programmes. The BRDO also presented #StartBusinessChallenge as a platform of step-by-step instructions to register own business.
“Our platform provides a simple and clear answer to the main question of entrepreneurs: what should I do to fulfill all the state requirements to start and run my own business and work in peace? We help SMEs to perform a ‘homework’ required to create a successful business,” the BRDO Head Oleksiy Dorohan noted, presenting the information service.
As part of their visit program, Prime Minister Oleksiy Honcharuk, Mr. Danielsson and Mr. de Zagon will also open the Mariupol Library renovated through the EIB Early Recovery Programme. The European Investment Bank (EIB), an EU banking institution, has provided a loan of 190,000 euros for the library reconstruction. In addition to the library, this space will accommodate a conference room and an IT hub that will be used by the SocialBoost non-grovernmental organization.
“A number of important infrastructure projects that we are currently implementing in Mariupol are aimed at addressing the most pressing challenges of the region – from connection to the Network to providing access to clean drinking water. The renovation of this library is equally important, and it is aimed at ensuring a prosperous and successful future of the region. This major renovation has transformed this institution into a modern electronic library with unlimited opportunities for the local community to access various sources of information, education and new knowledge,” Mr. Jean-Erik de Zagon said.
At the end of his visit on October 30, Mr. Danielsson will open a new Administrative Services Center (CNAP) in the village Komyshuvakha of Zaporizhzhya region. The Center was established with the support of the U-LEAD with Europe Programme funded by the EU. On the same day, Mr. Wagner will meet with students from Berdyansk State Pedagogical University, representatives of local authorities and civil society organizations.
Today, on October 23, the first deregulation meeting of the new Cabinet of Ministers was held.
About 20 important business decisions aimed at improving the country’s investment climate, removing outdated regulations and allowing to launch first “state in a smartphone” electronic services were approved. The overall monetary impact is estimated at more than 300 million hryvnias per year.
“Together with the MEDT, our BRDO Office has been involved in the IAS development and introduction from scratch, so we are particularly pleased that now the system will be fully operational for the further implementation of the inspection reform,” the BRDO Head Oleksiy Dorohan said.
In addition, the Government has also introduced updated risk criteria for two areas: road transport and veterinary drugs. These criteria for veterinary drugs are the compliance with the legislation requirements, production and sales volumes and import into the customs territory. As for road transport, they are related to the type of transport and the number of accidents/violations.
These decisions developed with the active involvement of the BRDO will make life easier for business and citizens, and our state will become more efficient and predictable.
Cryptocurrency assets are becoming a runaway hit in the world while having huge potential for economic growth. Leading states have already developed the legislation for the blockchain sector, which is now working for their economy, based on clear and transparent rules. Finally, Ukraine also has a chance to provide the legislative framework for development of this market.
BRDO, together with the Ministry of Digital Transformation and key blockchain associations, has developed relevant draft laws, which are available at http://bit.ly/blockchain_law. Developers, including representatives of the VRU Digital Transformation Committee, blockchain organizations and companies and crypto experts, invite everyone to discuss the draft laws and send their comments, remarks and suggestions to [email protected].
Advantages of the adoption of these draft laws:
After consideration and finalization of the proposals, draft laws will be submitted to the Parliament.
The Better Regulation Delivery Office conducted an analysis of the cryptocurrency market, the results of which are available at https://regulation.gov.ua/dialogue/it-i-telekom/40-rinok-kriptovalut
A plan of comprehensive measures of state control for 2020 will be approved as early as November 15. The draft plan can be found on the Inspection Portal here.
Government bodies are also actively drafting their annual plans that will be approved by December 1. Now these draft plans are available on the portal.
Timeliness and openness of planning is always a step towards greater efficiency and transparency of activities. However, the full implementation of such a process is hampered by some limitations.
For example, in 2018-2019, detailed risk criteria were approved in 72 areas of supervision. However, not all government bodies have detailed information on enterprises, so they may not always adequately assess a risk category of business entities. In such a way, the number of low-risk enterprises increased significantly in this year’s plans. However, there is a very realistic chance that the bodies will change these risk categories after conducting inspections and obtaining full information about these entities.
Some indicative data based on the currently available information
As in the previous year, the SES (State Emergency Service of Ukraine) takes a leading position in terms of the number of inspections scheduled for 2020. According to data for 2018-2019, this agency has the highest record of violations: this is a result of almost 100% of inspections.
As for the regions, Kharkiv and Dnipropetrovsk regions take leading positions. Almost 17% of all inspections are conducted in these regions. However, it should be noted that statistics take into account only those bodies providing plans by territorial departments, so it does not reflect the full picture.
Be ready for inspections and take advantage of the Inspection Portal.
Each year the state and society suffer millions of losses caused by illegal logging, and the illegal timber trafficking is one and a half times more than the legal sawmill activity.
The Better Regulation Delivery Office experts have repeatedly pointed out the need to address this issue.
The Head of the BRDO’s Agriculture sector Andriy Zablotskyi noted that society’s confidence in the forest industry is possible today only through the openness and transparency of logging data and the introduction of adequate timber trade.
That is why the initiatives of the BRDO Office have already been reflected in the decisions of the President of Ukraine, the Government, local authorities and the State Forestry Agency of Ukraine. In particular, on July 9, 2019, the President signed a Decree No.511/2019 “On Certain Measures for Forest Conservation and Rational Use of Forest Resources, and on July 17, the Government approved a Plan for the implementation of this Decree.
Yesterday the State Forestry Agency launched a pilot project of an e-register of timber harvesting and an online logging map. Residents of three regions of Ukraine (Chernihiv, Poltava and Rivne) can monitor the legality of timber cutting even today.
“With your phone, you can see the complete information about the type of logging performed nearby on the online map, as well as find a relevant permit for this logging (logging ticket) in a few clicks. And this is only the beginning of changes,” Andriy Zablotskyi said.
The timber market analysis conducted by BRDO experts is available here (in Ukrainian).
The work on the development and implementation of the Unified State Electronic System in construction has been a very important priority of the Better Regulation Delivery Office for more than a year. Today, the draft law 1081 providing the legislative basis for this step was adopted by 319 votes in the second reading.
The document provides for the long-awaited implementation of e-cabinets for construction project owners and other responsible persons in construction, as well as will allow:
The e-system will provide full electronic interaction of individuals and legal entities with state government bodies, local authorities and economic entities, which will allow to make all processes of providing construction services public.
Some provisions of the Law come into force on December 1, 2019, and this will allow to accelerate the introduction of positive changes in the industry. For example, as of December 2019:
On March 1, 2020, the following provisions will enter into force:
1) on establishing administrative responsibility for violation of the procedure of providing administrative services;
2) on the procedure for assigning addresses of real estate objects;
3) on the introduction of the institution of consulting engineers.
At the same time, certain provisions of the law are to be delayed, depending on the stages of implementation of the Unified State E-System in construction that will be implemented as of December 1, 2020.
Today, Oleksandr Shelest, IT&Telecom Sector analyst, was appointed as the Deputy Minister of Digital Transformation. (more…)