Towards managing conflict of interest

17. June 2014.

Croatian conflict of interest system has numerous deficiencies that contribute to declining levels of citizens’ trust in public institutions. Media are quick to report on scandals arising from undeclared and non-managed conflict of interest, as it is embedded in an increasing number of corruption cases against persons in high politics. Croatian political elite is facing declining trust of citizens in politics, political actors and political processes in general that may result in the instability of the political system.

The current legal framework instead of treating all public functions deals with officials only, while at the same time is not altogether clear who is considered to be an official. International reports on Croatia indicate a necessity for a more proactive approach in the area of ethics, integrity and conflict of interest in state administration, public companies, local level of government, etc. Moreover, different categories of sensitive decision making processes are completely overlooked. These include legislative process, formulation of public policies, managing of public funds, etc. Relevant international analyses state that conflict of interest is still poorly understood in Croatia, and the Constitutional Court stated that the legislator developed a misguided, criminal outlook on the conflict of interest. Finally, the system for managing conflict of interest is lacking at the level of institutions, while the basic principles of managing conflict of interest are absent from work processes and internal procedures.

Recommendations presented in GONG's analysis (available on Croatian) arise from the detected deficiencies of the existing model combined with comparative analysis taking into account Croatian social and political context. The creation of a specialized ethics systems consisting of specialized codes of conduct implemented and monitored by specialized bodies would make it possible to include all public functions in the new model of managing conflict of interest. Specialized ethics systems are proposed for the following levels, branches and sectors of government: national level executive, national level legislative, local level (both executive and legislative), civil servants, public sector employees (in healthcare, science, education and sports), and judiciary. Minimum prerequisites for adequate functioning of specialized ethics systems include participatory process of drafting the codes of conduct and the presence of external non-institutional stakeholders in ethics bodies. Specialized systems would enable a well-balanced mix between regulation present in the act and self-regulation present in codes of conduct. Since institutions would be under the competence of respective specialized ethics bodies, it would enable the push of conflict of interest management towards the level of institutions. Self-regulation would enhance the internalisation of core values and competences by holders of public office, while introduction of conflict of interest management in internal procedures may contribute to the decriminalization of conflict of interest. Strong competences over specialized ethics systems development and implementation should be given to the Committee for deciding on conflict of interest, so as to enable strong quality assurance within the whole system.

Project „Reform of the Croatian Conflict of Interest System“ is funded by the Rule of Law Program South East Europe, Konrad-Adenauer-Stiftung. The content and views set out in this analysis do not necessarily reflect the opinion of the RLP SEE KAS. Responsibility for the information and views expressed in the analysis lies entirely with the authors.