The Independent Anticorruption Committee (CCIA) released today, November 14, 2024, its fourth report "A Corruption Cleanse: Prescription for Moldova’s State-owned Enterprises".
In a major step towards improving transparency and reducing corruption in Moldova's state-owned enterprises (SOEs), CCIA launched today a comprehensive report on corruption in Moldova’s SOEs. The report, unveiled during a public event attended by representatives from state institutions, NGOs, the donor community and mass media, takes a hard look at the legal, regulatory and other conditions which open the door to fraud, waste and abuse in essential government-owned companies, and presents a series of recommendations aimed at strengthening countering corruption through changes in governance and management structures, among other areas, within these enterprises.
The primary objective of the report was to identify essential legal and regulatory reforms to enhance the governance of SOEs, particularly in terms of their management and control functions. The recommendations underscore the importance of introducing internal controls and anti-corruption compliance measures that align with international best practices. These measures are designed to reduce corruption risks and improve the overall functioning of SOEs, which are vital to Moldova's economy, employment sector, and for delivery of services to society at large.
The report also highlighted the need for structural improvements of the environment within which SOEs operate. Key recommendations include: merit-based appointments of independent and integrity-driven leaders to SOEs boards and management; stronger whistleblower protections to safeguard those who expose corruption; and reform of procurement laws to ensure fairness and transparency in tendering and bidding processes.
With SOEs operating in sectors critical to Moldova’s economy, such as energy, transport, and telecommunications, the report emphasizes the importance of reducing political interference and ensuring that these enterprises function efficiently, transparently, and in competition with private sector companies. Strengthening the governance of SOEs will not only contribute to Moldova’s economic stability but also help attract foreign investment from integer investors whose interests align with those of the Moldovan economy.
Moldova’s efforts to join the European Union have brought a renewed focus on anti-corruption reforms, with the European Commission highlighting the need for stronger institutional integrity and transparency. While legal reforms have been initiated in recent years, the report points to ongoing challenges, including inconsistent enforcement, political influence, and weak internal controls, which leave SOEs vulnerable to corruption.
"For Moldova to successfully tackle corruption and build a strong, competitive economy, it is crucial that state-owned enterprises to be aligned to the high integrity standards and to be led by professionals. This means ensuring they operate with transparency, meritocracy and free from political interference," said James Wasserstrom, CCIA co-chair. "The recommendations in this report provide a clear roadmap for improving governance and reducing corruption risks in SOEs, and we are calling on policymakers, including the government, specialized institutions and other relevant stakeholders to prioritize these reforms."
The report also highlights the challenges faced by Moldova’s Public Property Agency (PPA), which plays a key role in managing SOEs. It recommends strengthening the agency’s independence and clarifying its oversight responsibilities to better align with the current governance needs of SOEs. Civil servants should not play any role in running the companies they regulate. The report calls for a more harmonized and transparent framework for the management of state assets, with clearer boundaries between the roles of ministries and the PPA.
The full progress report can be accessed here.
