What is National Agency on Corruption Prevention silent about? Draft Law on Ports 9664.

11.01.2024

In the near future, the parliament may consider draft law No. 9664 proposed by the head of the Servant of the People parliamentary faction, Olena Shuliak, regarding regulations for construction on water. Interestingly, the initiative did not fall under the purview of the specialized Committee on Transport and Infrastructure; instead, it landed in the committee chaired by the project’s author, who had lobbied for the controversial urban planning “reform.”

While land misappropriation concerns Ukrainians more, pollution of marine waters, particularly due to corruption, is an equally significant issue for both us and the international community. Currently, the country is sustained and rebuilt at the expense of taxpayers from other nations.

When lawmakers, during times of war, cover corrupt schemes under the guise of the necessity to “organize ports for grain export” and simultaneously propose transferring the authority to allocate land for ports from the government to regional state administrations, it is nonsensical. Regional state administrations are not accountable to anyone, whereas the government’s actions are scrutinized by all.

We have previously discussed the reservations that environmentalists have regarding the construction along riverbanks and lakeshores. However, no one, not even the National Agency on Corruption Prevention (NACP), has analyzed the corruption risks of this project. Therefore, it is worth drawing the attention of society, MPs, and Ukraine’s partners to these risks before the parliamentary vote.

Why is the NACP silent?

In October, MP Oleg Dunda (Servant of the People) initiated a committee appeal to the NACP regarding draft law No. 9664. This body conducts anti-corruption expertise of initiatives according to a prescribed methodology. Initially, they monitor, and if corrupt provisions are identified, an expertise process is initiated.

Here is the response from the NACP to the committee chair.

A banal response: “Upon the identification of signs indicating the need for an anti-corruption examination, the Committee will be additionally informed.” However, there has been no additional information provided. Yet, if there is still no anti-corruption expertise of the draft law, does it mean that the NACP has not identified any signs necessitating such an examination?

Simultaneously, the anti-corruption committee of the Verkhovna Rada, despite giving a positive conclusion, did so with reservations, citing inconsistencies with the norms of other laws. This precisely constitutes a corruption-prone factor and, according to the NACP methodology, should be a basis for initiating an anti-corruption examination. Strangely, the NACP seems to have overlooked these concerns.

Where did the master’s hand hide corruption?

One needs to recall a more well-known project authored by Olena Shuliak — the urban planning “reform” (5655), which received critical responses from both the European Parliament and the European Commission. In the conclusions of the anti-corruption examination before the first reading, NACP recommended eliminating corruption-prone factors. Among them was the establishment of a new type of easement that allows the right to construct underground buildings and structures.

Easement – the right to use someone else’s land when you cannot otherwise use your own (for example, if you need access to your plot or utility connections to it). However, this can only be done through a neighboring plot of another owner. Then the problem is resolved through the establishment of an easement.

Given that the easement exists solely as a mechanism for resolving specific individuals’ issues, its establishment on a competitive basis is not envisaged.

Attention here! In draft law No. 5655, it was decided to allow not obtaining communal or state land for the construction of underground structures or facilities for which land auctions are mandatory, but simply to establish an easement. NACP reasonably saw risks in this — authorities could allocate land for the construction of underground shopping malls or parking lots to “their” people without a competition.

So, like the urban planning “reform,” the new “maritime” project envisages creating a new type of easement, but for the construction of not underground buildings and structures, but objects within the port waters.

Thus, we have two initiatives, both co-authored by Shuliak, both containing corruption-prone norms that, through the use of an easement, allow transferring communal or state land for construction without competition. However, in 2021, NACP saw these risks, but in 2023, it no longer notices them.

But we remember that the story with the anti-corruption examination of draft law No. 5655 also ended interestingly. The remarks of NACP regarding the new type of easement were ignored, and in 2022, the law was adopted with these corruption-prone norms. However, the head of the agency, Alexander Novikov, personally stated in an interview after the law was passed that the relevant parliamentary committee had fully taken into account the conclusions of the anti-corruption examination.

Unfortunately, the risks in draft law No. 9664 are not limited to just a new type of easement.

What else does NACP strangely not notice in 9664?

Firstly, the authors establish new principles of territorial planning and the water areas of seaports. Currently, construction takes place according to urban planning documentation approved by local self-government bodies. The project provides that ports should be built according to the Port Development Plan.

Essentially, these new Plans are analogous to detailed territorial plans (DPT). But they will be approved not by local councils, but by the Ministry of Infrastructure as a central executive authority responsible for forming state policy in the areas of maritime and inland water transport.

Of course, corruption during the development of urban planning documentation is common knowledge. Even NACP conducted a strategic risk analysis to identify and eliminate schemes. But conducting a monitoring of draft law No. 9664, it somehow did not notice that the risks during the development of the Port Development Plan increase even compared to existing ones during the development of DPTs, as the last control mechanism — public discussions — is removed.

At the same time, there are no procedures for conducting a competitive selection of the most appropriate projects for port development in the draft law, and proposals from interested parties can be considered or rejected manually. Then, whatever the Deputy Prime Minister for Reconstruction Alexander Kubrakov approves, that is what the selected companies will be able to build without competition.

Secondly, to avoid problems with obtaining land for construction not only in the port waters but also on the territory of the port itself, the authors of the project have provided a new exception in Article 134 of the Land Code.

It will be possible to obtain land for construction of objects of port infrastructure and other water transport facilities without land auctions within the maritime port for which such an object is present in the development plan of the relevant port.

The convenient scheme turns out: manually select developers, the Ministry of Infrastructure fixes all this in the plan, and then the selected persons should be provided with land for construction without competition either in easement in the port waters or lease on the territory of the port. But NACP does not see risks in this system of bypassing mandatory land auctions.

Thirdly, the story with providing initial data for design is also interesting. At first glance, everything is fine — automation, the use of data from the State Land Cadastre and the Unified State Electronic Construction System. Only the transitional provisions of the draft law provide for a period of two to three years until the necessary data is entered into the respective state electronic registers. And until this is done — either manual provision in the form of an electronic service, or an excellent opportunity for officials to earn on delays in introducing restrictions on land use into the cadastre so that these restrictions do not interfere with someone’s dream during construction.

By the way, for such cases, NACP has even defined a separate corruption-prone factor in the field of digitization procedures: “Establishing a requirement to obtain the results of providing public and administrative services in electronic form in the absence of digitized data necessary for their receipt.” But in draft law No. 9664, NACP also somehow did not want to notice this.

And these are far from all the corruption risks of the draft. For example, it also provides for the possibility of forming plots on the bottom of any water body, including rivers, lakes, and reservoirs. And this means extending existing schemes in land allocation to all lands of the water fund.

What did NAPC miss?

Petro Testov

Head of the Expert Department of the NGO

“Ukrainian Environmental Group” And for some reason, the NAPC was not even interested in the fact that the usually tolerant Ministry of Environment, in its official letter to the environmental committee of the Verkhovna Rada, quite sharply noted that the idea of the project to instruct the Regional State Administrations to allocate land plots of seas “will lead to chaos, abuses, and risks”.

Who and how undermines the principles of parliamentarism?

From the very beginning, the public has noticed the risks in this initiative. The bill actually envisaged construction not only at sea. Coastal areas of rivers and lakes could also be affected. All this could negatively impact even the judicial practice developed by the Grand Chamber of the Supreme Court, protecting citizens’ right to access water resources.

If we follow the norms of the draft law No. 9664, it would be possible to create an embankment near the coast and then attempt to privatize the land plot. It is worth noting that this project was not even supported by the Committee on Environmental Policy and Nature Management. The State Agency for Water Resources and the Ministry of Environment had significant objections.

Anna Bondar, the head of one of the subcommittees (“Servant of the People”), proposed creating a working group to consider both this project and the alternative one proposed by MP Yulia Klymenko (“Holos”). However, this proposal was not supported:

“It turned out that all parties involved in port construction do not agree with the provisions of the project. These include environmentalists, local self-government bodies, port associations, and planners. The only one who had no objections was the Ministry of Infrastructure. It’s strange. Therefore, a good way is to create a working group with representatives from all sides and develop healthy initiatives. And an anti-corruption expertise should be conducted to avoid risks in further processing.”

After the scandal in the media, attempts were made to rectify the situation during the committee meeting and minimize the negative impact of this initiative.

Yes, two MPs – Oleksandr Alixieichuk and Vitalii Bezhin (“Servant of the People”) – made their proposals. The first one regarding the exclusion of lakes, rivers, and reservoirs, and the second one regarding strengthening the role of local self-government. It was quite relevant to question how the Regional State Administrations could allocate land outside settlements and regions.

Thus, the committee supported the project taking these proposals into account (Article 116 of the Verkhovna Rada Regulations).

In theory, some of the problems could have been eliminated at the final discussion in the committee before the first reading. However, the project No. 9664, in violation of the Resolution of the Verkhovna Rada No. 2910-IX, for the implementation of which it was supposedly developed according to the explanatory note, was initially promoted with the breach. It should have been considered by the transport committee. However, it ended up in Shuliak’s committee because it is easier for her to gather votes here.

If one Verkhovna Rada resolution was violated without consequences, will they guaranteedly fulfill another resolution? Deputies’ votes can be gathered if necessary. For example, during the scandalous vote for 5655 last year, votes were secured thanks to representatives of the former OPZZH (Opposition Platform – For Life).

One can, of course, say, as was the case with the urban planning “reform”, let’s adopt it and then correct it. Today, in the conditions of the active stage of Russian aggression, the main thing is to develop ports as quickly as possible because we need to export grain…

But for the first reading, the project goes with corruption risks and without conclusions from NAPC. And the head of the relevant committee, Shuliak, takes advantage of the lack of anti-corruption expertise and announces that planning and construction procedures for seaports will become transparent.

How will this project help protect green zones?

Petro Testov

Head of the Expert Department, NGO “Ukrainian Nature Conservation Group”

“The lands of the water fund have been somehow protected from illegal development. But this project will introduce chaos, in which developers will find new opportunities for themselves. We have repeatedly encountered promises to consider the remarks of environmentalists at the second reading. But then it was “editorially” revised in the direction the authors of the projects needed. Therefore, it would be right to reject this initiative and develop in a working group something that will satisfy everyone, not just developers, authors of the project, and Oleksandr Kubrakov”.

Let’s note that currently the government, which talks about the problems with the ports, reports unprecedented successes in the operations on the Danube.

Indeed, the development of ports in this region is a priority because Odessa and other cities are more frequently targeted by shelling. However, the ports on the Danube are only nominally called maritime. So, if the legislative initiative No. 9664 removes its influence on lakes and rivers, then the proposed regulations for the Danube ports would be relevant perhaps only in a corrupt aspect.

At the moment, the issue is about creating facilities for storing grain, which is being intensively transported to this region. So here, the matter is about land, not the sea. That is, on land, it is possible to build grain storage facilities.

But when the project involves the creation and allocation of plots on the bottom of the water body, these are serious issues. Currently, the cadastre is closed, and after victory, it may turn out that we will find many private islands in the sea. And beyond the ports, hotels and yacht clubs may emerge. And, strangely enough, the owners might be “affiliated” with the lobbyists of the initiative.

Specially for “Mirror of the Week“.