- “This is not exclusively a legal issue, but also a matter of the functioning of a system that provides services of importance for the daily life and work of citizens,” assessed Marija Kljajić, Assistant Secretary General of the Union of Municipalities of Montenegro.
Assistant Secretary General of the Union of Municipalities of Montenegro Marija Kljajić presented at the session of the Committee on Economy, Finance and Budget of the Parliament of Montenegro an initiative, previously submitted to the Ministry of Economic Development of Montenegro, to extend the deadline for aligning the organization and operations of companies with the Law on Business Companies until the end of September this year.
The Draft Law on Amendments to the Law on Business Companies, submitted by 46 Members of Parliament and considered at the session of the Committee, provides for this deadline to be extended until 15 June.
Marija Kljajić recalled that we are facing a conflict between several systemic laws that regulate the organization and operations of business companies in different ways, bearing in mind that companies founded by local self-governments are, in addition to the Law on Business Companies, also subject to the Law on Local Self-Government, the Labour Law, the Law on Prevention of Corruption, as well as the Law on State Property. She warned that this may lead to the initiation of proceedings before the Constitutional Court, the contesting of decisions made by management bodies, as well as problems during registration in the Central Register of Business Entities.
“This is not exclusively a legal issue, but also a matter of the functioning of a system that provides services of importance for the daily life and work of citizens, such as water supply, waste management, municipal infrastructure, public transport, and others,” said Marija Kljajić.
She pointed out that the Ministry of Finance of Montenegro recognized the issue and, at the end of last year, initiated the drafting of a new law on state-owned business companies.
“In this way, we are not postponing reforms, but enabling them to be implemented in a lawful and sustainable manner,” assessed Marija Kljajić.
As examples of the inability of municipal companies to align their operations simultaneously with the Law on Business Companies and other applicable regulations, she stated that, on the one hand, the new law requires the board of directors to appoint the executive director from among its members, which is in direct conflict with the systemic Law on Local Self-Government, according to which the director, as a governing body of a municipal company, is appointed by the municipal assembly and not by the board of directors. In addition, the appointment must be preceded by a public vacancy announcement, which the municipal assembly is obliged to conduct under the Labour Law. The solution whereby the director is simultaneously a member of the board of directors is also in direct conflict with the Law on Prevention of Corruption.
If municipalities were to opt for another governance model offered by the Law on Business Companies, namely only a shareholders’ assembly and a director, without a board of directors, this would mean granting extensive powers to the director. On the other hand, transferring decision-making authority for operational matters to the municipal assembly would hinder timely and efficient decision-making, as local parliaments are not operational bodies.
A particular problem is also the procedure of alignment with the law itself, as municipalities are required to adopt new statutes, harmonize their organization, and appoint new governing bodies, which requires more time, namely the organization and holding of at least three sessions of the municipal assembly.
