A number of statements and acts concerning the activity of the inspection bodies made and done by senior state officials had been broadly reported on at the end of last month. President Vladimir Voronin asked the Government to work out and implement a legislative and institutional action plan for immediately reorganizing the inspection system. He stressed the opportunity of reassessing and restructuring the 61 state bodies empowered with inspection and supervision functions by liquidating, merging or reorganizing them, according to their importance and necessity. The Government took immediate action and made a decision under which the personnel of a number of inspection subdivisions of the central public administration will be cut by 10%. The decision applies to the personnel of the Ministry of Internal Affairs, the Centre for Combating Corruption and Economic Crime, the Construction Inspectorate, the Standardization and Metrology Service, the Fiscal Inspectorate, the Ecological Inspectorate. The General Prosecutor’s Office and the Audit Office, which are not under the Government’s administration, were recommended to consider the possibility of reducing their personnel by 10%. Both Vladimir Voronin and Premier Vasile Tarlev levelled criticism at the inspection bodies, trenchantly pointing to the problem of abusive and inefficient controls to which the economic entities are subjected. The head of state invoked a joint stock company that he visited recently. He said that the company had been inspected 14 times over the past two years, 13 times this year alone. According to the authorities, such a state of affairs is due to the extremely large number of inspection bodies and of their employees who carry out too many inspections. Experts say that the circumstances must be examined thoroughly and consistent steps must be taken in order to really rectify the situation. [Analyst Igor Gutan] says that at least two important conditions must be respected for the purpose: the state should change its attitude towards the economic entities and the doubling in inspection functions, which is typical of the present situation, should be eliminated. [Economic entities are labelled as offenders before caught red-handed] The state authorities are probably sure when they say that the many cases of abuses and illegalities committed by the employees of the inspection institutions prove the inefficiency of the existent inspection system that generates “doublings of functions and corruption”. It seems to be true that the excessive zeal manifested by the inspection bodies reveals interests that have nothing to do with the duties of the mentioned institutions. But the inspection institutions and their employees do nothing but reflect the state’s attitude towards the business sector. For instance, it is known that a number of inspection institution heads force their employees to carry out as many inspections as possible because the fines in Moldova are included as division in the State Budget. This means that the State already knows the size of the fines that will be levied. Practically, the economic operators as well as the individuals are considered guilty of committing offences beforehand, when the budget law is being adopted. The State Budget for 2007 envisages fines of 86 million lei, while the budget for 2006 included fines of about 92 million lei. The largest part of the fines is levied from entrepreneurs. In practice, this means presumption if innocence legalized at the highest level. [Exaggerated number of inspections as a result of doubling in functions] Currently, the businesses regard the excessive control on the part of the State as one of the most serious problems that they have to face in Moldova, says Igor Gutan. The state control has different forms, ranging from planned and unexpected inspections to controls over the way in which the permits, certificates, authorizations and licenses are issued, and coordination of different activities. The “Cost of Business Regulation” study reveals an average of 24.1 inspections in 2006 and 21.8 inspections in 2007 at the enterprises subjected to controls. The average per country was 8.7 inspections in 2006 and 10.3 inspections in 2005. According to the same study, the Fiscal Inspectorate, the Department for Emergencies (Firefighters Service), the State Sanitary-Epidemiological Service and the police carry out the largest number of inspections. According to Igor Gutan, the large number of inspections is generated not by the large number of employees in inspection bodies, but rather by the numerous doublings in their functions and by the lack of clear rules for carrying out inspections. In the meantime, officials of the central public administration and the subdivisions took over different functions, through Government Decisions or through laws that they formulated, without taking into account the fact that similar functions are held by other authorities, or without being able to fulfill them. The Prosecutor’s Office and the Centre for Combating Corruption and Economic Crimes, the police and the Fiscal Inspectorate, the police and the State Construction Inspectorate or the District Centres of Preventive Medicine, the Prosecutor’s Office and the police have similar functions. In Moldova, there are about 60 public authorities and state companies administrated by the public authorities that directly or indirectly inspect the entrepreneurs. [Are there chances and political will to change the state of affairs?] State authorities’ concerns and wish to reorganize the inspection bodies can be explained. Igor Gutan considers that there are not many chances of outing the intentions into practice, especially for the immediate future. The authorities made attempts to liquidate, merge or redefine the functions of the inspection bodies earlier, both while implementing the Regulatory Reform and the Reform of the Central Public Administration, but with not much success. Any related initiative met and continues to meet with resistance on the part of representatives of inspection bodies. The confrontation is tough, especially when it concerns the issuing of licenses, authorizations and other documents that total over 1,000 at present. For example, to erect something in the municipality of Chisinau, the investor must collect about 35 documents. This process can take the ordinary citizen at least one year an a half For these reasons and not only, the attempts to solve the given problems failed. In fact, this is the third attempt of the current government… [The first two unsuccessful attempts] In 2004, the Government tried to solve the problems of controls on the entrepreneurs by adopting the Decision No. 862 regarding the improvement of the specialized state inspection system. The decision, which is still in force, says that the number of inspections must be reduced to at most two per year. Moreover, the unexpected inspection can be carried out only in the following cases: - if emergencies of natural or technical character that endanger the life and health of the population occur at the economic entity or in the region where it operates; - if the decision makers of the inspection authority possess veridical information obtained in the supervision process that shows that the economic entity’s actions can be regarded as offence or administrative contravention; - if there are compulsory requirements for carrying out inspections at intervals of less than a year to see if the stages of the technological production process are observed; - if the law enforcement bodies ask for an inspection. Until then, the Government made one more attempt by adopting the Decision No. 395 of 1 April 2003 regarding the regulation of inspections. In compliance with point 1 of the Decision, the inspection bodies have the right to check the entrepreneurs: - at most once in two calendar years to examine the results of the economic-financial activity; - at most once during a calendar year to examine how the producing companies observe the norms and technical, technological, hygienic, sanitary, organizational and other conditions. Now the two decisions are not observed and have been never observed since adopted. The already mentioned study “Cost of Business Regulation” identified such causes as the fact that the entrepreneurs do not know the legislation, the non-observance of the law by the inspection bodies, but also the inclusion of the fines in the State Budget Law. But we must not forget that the presumption of innocence is an obligatory instrument of a democratic state. [Inappropriate solutions and outdated solutions] Considering the fixed 10% staff cutback, the Ministry of Internal Affairs will experience the larges reduction in personnel, of over 1,800 places. A number of 2,500 posts overall will be cut in all the public inspection bodies mentioned. Igor Gutan says that the reductions will not solve the problem. Firstly, because the 10% cutback seems arbitrary and secondly, because the layoffs will not reach 10% as there will be cut first of all or only the vacant jobs. This does not mean that the reductions are not necessary. But the reductions as well as any other solution for the problem of inspections must be well-founded and based on the results of thorough studies. Late last year, the Government received the reports forming part of the second stage of the functional analysis carried out as part of the Reform of the Central Public Administration. This means that there are solutions that can change the situation and the Government has them at the disposal. The expert says that the immediate reorganization of the inspection bodies would not be very successful. The Government will not be able to carry out such transformations owing to the tight schedule and to the lack of necessary experience. The reorganization proposals must be pit forward not by representatives of the inspection bodies but by independent experts so as to exclude the conflicts of interest. The Government must focus not only on the liquidation or reorganization of the inspection bodies and on the redefinition of their functions, but also on the creation of public-private partnerships in the given area. First of all, this fact will lead to the reduction in the budgetary expenses and to the rise in the salaries of the personnel. [General context] According to the National Bureau of Statistics, as many as 57,600 people worked in public administration at the end of 2006. This is one unit per 58 places. Experts consider that such a figure is exaggerated for such a small country as Moldova. Moreover, the activity of the public authorities is in many cases inefficient. The reform of the central public administration is needed in Moldova. Though it was launched in 2005, it is implemented slowly. There are a number of divisions at central level whose existence is also in question. [Instead of epilogue] The experienced people ask themselves weather the present reform of the inspection bodies was initiated with the aim of being implemented or constitutes an impulse for them to be more obedient?