It is not true that inspection services in Serbia don’t work!
On the contrary, from year to year (as the state budget is getting thinner) inspectors are breaking all records. Last year they reached the maximum visiting national companies every two months, applying more than 80 laws and regulations (excluding internal guidelines), and charging an average fine of 2,100 euros.
Thousands of euros in fines were also paid for trivial mistakes and the intention of (state) inspectors to take the money at any cost is often very plain to see. This was proven by the case of a company from a location in central Banat which issued to its employees “the decision about the holidays” instead of “the solution” as required by regulations. For this “serious” paperwork mistake they had to pay the fine of 200,000 RSD. The inspector was able to issue a warning or simply advise the employer, but he chose not to.
The fact that such advisory practice did not “remain alive” in practice is confirmed with the figures from last year’s survey among businessmen. The aim of the survey was to serve as a basis for inspection reform strategy in the state. Although (as usual) the state established a working group for this job, the deadline for adoption of the strategy expired on March 31st, and there is still neither the strategy nor the discussion about its possible applications. Until this strategy gets adopted and applied, enraged businessmen face inspection services whose responsibilities overlap and the inspectors who stay in their companies for several months “hunting” the tiniest mistakes. The most drastic example that is often mentioned is the case of inspection that lasted for nine months each working day in a big foreign company (the name of this and all other companies that recount their experiences are known to the magazine, but they all asked for their names not to get mentioned).
The following example points to another problem in the work of inspection services. An entrepreneur has imported orange peel from Italy, which has (of course) passed the appropriate analysis in the European Union. The inspector came to conduct a control, opened his trunk to get out his dirty shovel and take a sample of the orange peel, and then put the same dirty shovel back in the same dirty bag. Of course, the result of the analysis was that the orange peel was unsuitable. The entrepreneur complained, insisted that inspectors come again to the field, but that he personally samples the orange peel with sterile instruments and to send that sample to the analysis. The inspector protested, but the entrepreneur’s request was accepted and the analysis gave a positive result. Of course, the entrepreneur had no one to complain for paying for both analyses and he belongs to a large group of businessmen (72 percent) who say that their biggest problem with inspection services is the impossibility of filing a complaint.
The businessmen survey also gave the following examples. “Only one of our sites inspectors visited 37 times in a year, ” said an employee at a large construction company in the capital. “They come to conduct a control and they are not even familiar with the paperwork, so we have to explain them everything on the spot, and the next step will probably be to write an elaborate. At the same time, we immediately pay mandatory fines because the site gets covered with posters during night. The inspectors just show up in the morning and write a fine. And all this is under the law, since the regulations say that we are obliged to keep the site clean. We would remove the posters, but one can be faster than them.” – says our source.
And it is indeed impossible, not only physically, but also in respect of miles of regulations that inspects cite. More than 1,000 laws and regulations refer to the work of inspection services, and only within the ministries of environment, mining and spatial planning a total of 19 laws and 238 regulations is being applied.
According to entrepreneurs’’ testimonies, it is not unusual for an inspector to openly say: “I have to punish you, so let’s find a solution together.” It is not even uncommon for employers to propose their own “failure to be fined” so that inspector could finish the job as soon as possible. There are instances when none of that happens and when an inspector does his job without a lot of talk, persistently and thoroughly. Such a “professional” came to visit a businessman who has been engaged in the production of wooden crates for eight years and is the predominant exporter. And the inspector came to conduct an environmental control.
“It was clear that they wanted to prevent me from doing my job. This woman asked me to measure the noise produced by my three axes and to submit written data about it every three days. She was tireless, she simply wanted to fine me at any cost. When I went on holiday, she made the decision and since I wasn’t there she just stuck it on the door and photographed it to have evidence that she delivered it. I was required to classify the waste raw material, although it is impossible to classify wood dust” – bitterly recounts the entrepreneur who, after several months of “being stocked”, seriously thought about paying all the fines and closing the company with 40 employees.
Along with the increased accuracy of inspectors, the number of firms moving into a gray zone is also rising (40 percent). Those who still follow the rules claim that their illegal colleagues chose the wrong side of law because of the state which is continuously controlling and punishing them by introducing new obligations to those who are trying to do business honestly.
“Pancevo has more than 400 unregistered van carriers. It has become an organized crime. Buses up to 50 seats don’t have registered timetables, no printed tickets, they are not paying the workers, have no VAT charges… How is it possible that carriers have higher fuel costs than the revenue? No one controls these things. And I have visits from financial control twice a month, although the first time everything was right. Someone has decided to conduct controls according to the industry code and we have to dance around inspectors who sit in our companies for ten days and to worry about how much of a fine we will have to pay”, recounts a truck driver from Serbian suburb.
The absolute record in number of visits of the same inspector is a company to which the same inspection service came 40 times in five years or every month and a half.
The amount of time they spend time in a company is a matter of inspector’s assessment. He is solely in charge of the decision whether to block the company’s account until the control is finished. If the subsequent results show that no failures were detected – then nothing. A businessman whose reputation was damaged because his account was blocked and his business partners were sent a message that he is insolvent, does not get any compensation for the damage, nor he has the right to demand that from anyone.
These types of inspections prevent micro companies from normal operation and 2,100 euros fines are great expense for them. In addition, not every other company can obtain the information about the required documents and ways to gather them in order not to re-pay the same penalty.
All business associations in Serbia, such as the Union of Employers, the Serbian Association of Managers and the Foreign Investors Council, along with the Serbian Chamber of Commerce and USAID’s projects for better business conditions are united in their appeal to urgently rectify these problems and fully transform inspection services. Their goal should not be the ruthless penalty of economy, but the partnership and the development of competitiveness.