The National Agency on Corruption Prevention (NACP) has conducted a strategic analysis of corruption risks during the implementation of the pilot project approved by the Cabinet of Ministers of Ukraine Resolution No. 382 “On Implementation of the Pilot Project for Restoration of Settlements Affected by the Armed Aggression of the Russian Federation” of April 25, 2023. Taking into account the developed recommendations will help to make the restoration process accountable and transparent.
NACP identifies the area of restoration as one of the priorities and one that requires special attention. In general, the public procurement sector is one of the most corruption-risky. The pilot project was no exception.
NACP experts analyzed the relevant legal framework and materials of central executive authorities, their regional units, information from regional state (military) administrations and local governments. As a result, the most likely corruption risks were identified, and recommendations for their minimization or elimination were formulated.
The pilot project identified a number of corruption risks that may contribute to the commission of offenses, including corruption, namely risks that create preconditions for:
- Abuse in the selection of facilities to be restored;
- unreasonable increase in the cost of restoration of facilities and artificial overestimation of the cost of materials;
- discriminatory requirements for public procurement participants and a generally imperfect mechanism for selecting honest public procurement participants during the implementation of the pilot project;
- abuses in determining the types of construction of facilities and in the transfer of functions of the construction customer;
- inefficient use of the funds from the Fund for Elimination of the Consequences of Armed Aggression during the implementation of the pilot project.
Among the comprehensive recommendations developed by NACP are:
- Enshrining the requirements for prioritizing projects at the level of law, as well as the relevant methodology at the level of a bylaw approved by the Government;
- legislative consolidation of the procedure for calculating and criteria for determining the estimated/expected cost of implementing restoration projects;
- mandatory involvement of specialized specialists in determining the cost of restoration work among customers of restoration work;
- publishing detailed information on the cost of developing project documentation and construction materials for each order object in a unified form.
“Given today's security challenges, transparent legislation devoid of opportunities for abuse is a prerequisite for the effective implementation of projects to rebuild Ukrainian cities and villages affected by Russian aggression. Our strategic analysis of corruption risks has revealed a number of problematic issues. They need to be taken into account and corrected before Ukraine's large-scale post-war recovery begins. We have to approach this process responsibly, prepare in advance and create a legislative framework that would guarantee a fully transparent reconstruction process,” said Deputy Head of NACP Sergiy Gupiak.
The recommendations will be sent to the Ministry of Infrastructure of Ukraine, the State Agency for Infrastructure Restoration and Development, the Verkhovna Rada Committee on Organization of State Power, Local Self-Government, Regional Development and Urban Planning; regional state (military) administrations and local governments.
Implementation of the recommendations will help to adjust relevant decisions to prevent possible corruption schemes and negative reputational, social and economic consequences.
NACP emphasizes that only the active position of these authorities in implementing the recommendations will minimize possible corruption risks and make the country's recovery process fast, transparent and effective.
More information about the study “Top 10 Corruption Risks in the Implementation of the Pilot Project on the Restoration of Settlements Affected by the Armed Aggression of the Russian Federation” is available here.
Earlier, NACP carried out an anti-corruption expertise of the draft resolution of the Cabinet of Ministers of Ukraine “On Implementation of the Pilot Project for Restoration of Settlements Affected by the Armed Aggression of the Russian Federation”. The relevant conclusion of the anti-corruption expertise of the project dated 25.04.2023 contains a list of identified corruption factors and recommendations for their elimination. In particular, it was stated that these factors could lead to a biased and non-transparent determination of objects for reconstruction. In turn, the absence of a clear procurement mechanism for the Project may result in inefficient use of state budget funds. The conclusion states that the Resolution needs to be finalized with the recommendations provided.
After the Government made changes to the Project implementation procedure, NACP also conducted an anti-corruption expert review of the relevant Resolution. The conclusion of the anti-corruption expertise of the draft resolution of the Cabinet of Ministers of Ukraine “On Amendments to the Procedure for Implementing the Pilot Project for the Restoration of Settlements as a Result of the Armed Aggression of the Russian Federation” of 08.08.2024 states that the Resolution contains corruption factors that need to be eliminated. In particular, the National Agency has identified such corruption-prone factors as the absence of a procedure and criteria for selecting customers for works (services) to restore settlements and recipients of budget funds and the introduction of a non-transparent method of compiling lists of objects to be restored.
