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EBRD-supported reform will shape up business inspections
If you ask an average Serbian entrepreneur their opinion on business inspections, the chances are that you will get a rather pessimistic answer. Overlap of different inspections, changing regulations and difficulties in accessing information are the reasons why entrepreneurs often label inspections a burden.
On the other side, the role of inspections is omnipresent. They control everything: from the quality of the air we breathe, food we eat, and the electronic appliances we use in our daily lives. Provided they are efficient, inspections are crucial for enforcement and compliance mechanisms and for fostering a secure business environment. The efficiency of inspections affects the image of an economy, and can increase or decrease its attractiveness as an investment destination.
Things are now changing in Serbia thanks to a comprehensive business inspections reform conducted by the Ministry of Public Administration and Local Governments, with the support of the EBRD.
“We believe that functioning business inspections play a crucial role in securing a healthy business environment. We support the creation of a system which will provide for greater respect of rule of law and security for Serbian citizens and businesses,” said Zsuzsanna Hargitai, EBRD Regional Head of Western Balkans.
Step by step
The reform has been running for over three years now, and has focused on three key areas: streamlining regulations, merging smaller inspections, and modernising work with the introduction of digital tools.
The process was based on dialogue with all relevant stakeholders – government, inspectors and the business community, accompanied by a key ingredient in the form of strong political will.
The Minister of Public Administration and Local Government, Branko Ružić, recognised the reform as pivotal in the fight against the informal economy.
“Inspection reform is also important for creating a better, more predictable business environment, which is key for private sector development, job creation and a higher budget for Serbia.”
However, despite strong political will, implementation was not so smooth.
“In the beginning, inspectors didn’t welcome the reform. Most of the current inspectors have been in their jobs for years, often even decades, and they are used to a certain methodology. As with any reform, people usually resist changes, but once they start experiencing benefits, they shift their perceptions,” said Dragan Pušara, Head of Coordination Commission for Inspections Oversight, a body created to implement the reform.
Expected results
Currently, 43 different business inspections exist in Serbia. By the time the reform is completed, this number should drop to 15. In addition to streamlining the organisation, the reform has already made good progress in modernising inspectors’ work.
Until recently, inspectors were logging all their work on paper, but from now on they will use the software “eInspector” which will harmonise their work, improve coordination and create a database of Serbian businesses.
“I expect this reform will bring transparent and coordinated work of inspectors, especially thanks to eInspector, but also time savings in the future planning of inspection visits. I hope we will achieve coordination with other relevant bodies in the interests of businesses and citizens,” said Olivera Topalov, Head of Industry Department, at the Inspection for Environment Protection.
The reform enjoys the strong support of the Prime Minister of Serbia, Ana Brnabić, who is an ardent believer in the digitalisation of public administration.
“The inspectors are now paying fewer visits to businesses, nurturing their advisory role towards loyal businesses, and the inspectors finally have adequate working conditions,” said the prime minister.
“Digitalisation is important in all areas of public administration, indicating that the new system eInspector will bring an essential benefit for every business – a coordinated and transparent supervision”.
Next steps
The immediate next step in the reform will be hiring more inspectors and ensuring better working conditions, as announced by the Minister of Public Administration and Local Government, Branko Ružić. Serbia, in fact, has 2.5 times fewer inspectors per capita compared with the EU average and their average age is 54 years.
Inspectors will in future benefit from continuous professional development to help them learn new regulations and tools, but also help improve the image of inspections.
This improvement will go in parallel with the decrease of single inspections. The current number of 43 different inspections has proved to be too many and too complex to coordinate.
Additional benefits
The second phase of the reform envisages the creation of a centralised contact centre, where citizens and businesses will be able to report problems and irregularities. Instead of running from one office to another and submitting complaints in convoluted paper files, citizens will in future be able to report irregularities in a much quicker and simpler way.
The idea is that this centre will serve as an easy-to-use communication channel which fosters interaction between citizens and the state, giving citizens an active role and ownership in solving problems in their society.
It is expected that it should significantly help in fighting the shadow economy, as experience shows that the biggest number of such entities are discovered after they have been reported by either citizens or other legally run businesses.
The set-up and operations of this contact centre will be supported by the EBRD and funding is expected to be secured through EBRD donors.