Big changes in state-owned enterprises, we learn new rules: 'Cheating grandmother devil'

The recent developments surrounding the restructuring of state-owned enterprises in Croatia have sparked significant debate among political figures and analysts alike. At the center of this controversy is the claim made by Ivana Marković, a member of the Social Democratic Party (SDP), who has criticized the government's approach to personnel changes within these entities. During a press conference held in the Croatian Parliament, she highlighted the growing number of state companies where new management teams have been appointed behind closed doors, suggesting that these appointments are more about political maneuvering than genuine reform.

Marković listed several state-owned companies affected by these changes, including ACI, Hrvatske šume, Odašiljači i veze, APN, Agencija za ugljikovodike, HŽ infrastruktura, Hrvatska lutrija, and Croatia Airlines. She emphasized that the pattern of appointment has remained consistent—each time, the government proposes new management for six months, which then becomes permanent, all based solely on the prime minister’s discretion. This process, according to her, lacks transparency and accountability.

The situation began last year when there was a large-scale replacement of representatives in the boards of directors and supervisory councils of these companies, coinciding with the arrest of Andrija Mikulić, the chief state inspector. Marković pointed out that the prime minister had initially dismissed any connection between Mikulić's arrest over alleged corruption related to waste disposal and the broader restructuring efforts. Instead, the government framed these changes as part of a necessary reform aligned with OECD standards.

However, Marković argued that the reforms were merely a public relations tactic, noting that the government had promised to introduce criteria for selecting the best candidates, emphasizing independence, good reputation, and professional knowledge. Despite these promises, she claimed that the selection process continued to favor individuals with questionable reputations, such as David Sopta, who was previously involved in the Jadrolinija scandal, and Nediljka Dujić, whose past actions led to accusations against Hrvatske šume being a haven for criminal activity.

She further questioned the integrity of Zlatko Mateša, who was implicated in the disappearance of millions of euros under his management, and Ante Đapić, now a member of the board of Hrvatska lutrija, whose appointment she linked to political interests aimed at maintaining dominance in local assemblies. According to Marković, these appointments suggest that the government continues to prioritize political loyalty over merit and ethical standards, undermining the credibility of the reforms.

The introduction of new rules for selecting top executives in state-owned companies aims to bring them closer to market practices. These guidelines include criteria such as previous work experience, education, proficiency in a foreign language, absence of conflicts of interest, and gender quotas in committees. However, critics argue that the implementation of these rules has been selective, often overlooking the importance of good conduct and independence.

Matej Bule, a state secretary at the Ministry of Finance, explained that the new regulations emphasize the need for managers to meet specific goals set by the state, with particular attention given to resolving issues arising from non-compliance. He noted that while the criteria for selection now include considerations of good conduct and independence, previous appointments did not adhere to these principles, citing examples such as Sopta and Dujić.

Despite these changes, concerns remain about the practical application of the new rules. Sanja Brkić, a career advisor for managers, expressed skepticism about whether these reforms would genuinely shift focus away from political lobbying towards business results. Meanwhile, Ante Kujundžić likened the situation to a proverbial “devil’s bargain,” suggesting that allowing political affiliations in candidate selections could undermine the intended reforms.

As the government moves forward with its restructuring plans, the challenge lies in ensuring that these changes translate into meaningful improvements in governance and corporate performance. The effectiveness of these reforms will ultimately depend on their consistent application and the commitment of all stakeholders to uphold the principles of transparency and accountability.