The procedure for registering and awarding free emission credits worth millions to operators of stationary plants in 2020 and 2021, the Electric Power Company of Montenegro, the company "Uniprom", which then managed the Aluminum Plant, and the company "Toščelik" was illegal, which led to a threat to the public interest, which indicates the existence of corruption.
This is stated in the opinion published yesterday by the Agency for the Prevention of Corruption (ASK).
“Uniprom”, owned by a businessman Veselin Pejović, later ceded its share of the emission that it received free of charge from the state to the state-owned Elektroprivreda for 17 million euros on account of reducing electricity costs, which was formalized in early 2021 before the new government took over this state-owned company.
Emission credits are a type of securities sold by the state Environmental Protection Fund, and polluters must purchase them in an amount corresponding to their emissions of harmful gases as compensation for damage, or the state grants them free of charge to those who have reduced pollution over a certain period.
The agency states that the registration and allocation of free broadcasts themselves, which were carried out during the government's Duško Marković, were contrary to several regulations at the time, namely that there was a "threat to the public interest that indicates the existence of corruption, which represents a violation of regulations and ethical rules" and "abuse of official, business, or social position or influence for the purpose of obtaining personal benefit or benefit for another."
ASK points out that this verification procedure was launched in July this year based on the initiative of the Deputy Prime Minister for the Political System, Judiciary and Anti-Corruption. Moma Koprivica.
First loans, then regulations
Emission credits are provided for by the Law on Protection from the Negative Impacts of Climate Change, which was adopted on December 23, 2019. The Environmental Protection Fund (Eco Fund), as the institution that should deal with the registration and allocation of these emissions, was registered, i.e. it began operating on March 3, 2020.
"From the submitted documentation and statement, it can be determined that free emission credits for operators of stationary plants for 2020 were entered into the register of emission credits of the Eco Fund on 21.02.2020, although the Eco Fund as a legal entity did not exist at that time because it was not registered in the CRPS, therefore the register of emission credits could not have existed either. It can also be concluded from the submitted information that there is no written record in the official archive of the Fund on the entry of emission credits into the register for 2020, while the Eco Fund entered emission credits for operators of stationary plants for 2021 on 01.01.2021. The Eco Fund settled the spent emission credits in the Register from 2020 for 2021, although the plants of Elektroprivreda Crne Gore AD Nikšić and 'Toščelik' did not submit verified reports on greenhouse gas emissions (GHG), "how the number of emission credits from the previous year was annulled for these facilities without a verified report on actual GHG emissions. 'Uniprom doo Nikšić' submitted two verified reports on GHG emissions for 2020 and 2021," the Agency's decision stated.
The ASK opinion also states that in order to allocate emission credits, it was necessary for the Regulation on activities that emit greenhouse gases to come into force, but it came into force the day after the free emission credits were entered into the Fund's register.
They point out that this regulation stipulates that the number of emission credits is determined as the arithmetic mean of the average emissions in the reference period and the product of the reference values of the corresponding emission factor. For 2020, “Uniprom” for the Aluminum Plant and EPCG for the Pljavlje Thermal Power Plant were awarded free emission credits in the amount of 1.020,840 t CO2 eq each, and Toščelik was awarded 5.800 t CO2 eq. ASK states that the emission credits for “Uniprom” and “Toščelik” were calculated contrary to the proposed methodology.
Against the law, without a control plan
The Agency also determined that the Regulation on the content of the greenhouse gas emissions monitoring plan from facilities, which was in force from 2020 to 2022, stipulated that it would apply from the date of Montenegro's accession to the EU, and not earlier.
"It follows from the above that free emission credits were awarded contrary to regulations, without a monitoring plan, procedure and methodology for monitoring greenhouse gas emissions from stationary installations, given that the aforementioned Regulation could not even be applied in the given period," the Agency stated.
ASK concludes that the procedure for registering and allocating free emission credits was carried out in violation of legal regulations and poses a high risk of corruption. Therefore, they have made recommendations that in the future this procedure be carried out in accordance with positive legal regulations, with full respect for the Law on Protection from the Negative Impacts of Climate Change and by-laws regulating this area.
"The Environmental Protection Fund and the Government of Montenegro are obliged to submit a report on the actions taken in relation to the above recommendation, in accordance with Article 59 of the Law on the Prevention of Corruption, within 30 days from the date of receipt of this opinion," the Agency warned the authorities.
The prosecution has been investigating since April 2021, arresting and then releasing two people
In April 2021, after the new management led by Milutin Đukanović took office, EPCG filed a criminal complaint with the Supreme State Prosecutor's Office. It includes former Prime Minister Duško Marković and former Minister of Economy Dragica Sekulić, owner of "Uniprom" Veselin Pejović, then-director of the Eco Fund Jovan Martinović, as well as members of the former Board of Directors of EPCG.
EPCG then claimed that "Uniprom" could not have received the free credit issue, that the amount of those credits was exaggerated, and that EPCG did not have to take that issue from "Uniprom".
Pejović's company stated at the time that KAP had reduced its emissions several times compared to the base year 1990 and had made a concrete contribution to fulfilling international obligations, meaning that they were entitled to free emissions.
In March 2023, Martinović and the company's employee Andrej Nedović were arrested by order of the Special State Prosecutor's Office. They were detained from mid-April to mid-July 2023 by decision of the investigating judge of the Higher Court, after which they were released.
The case is still active at the Higher State Prosecutor's Office, which took it over after amendments to the Law on the Special State Prosecutor's Office and the Law on Courts were made in June last year.
In April 2021, commenting on the criminal complaint against him, Martinović told CIN-CG that the Fund did not have public authority at the time, meaning that it had no influence on the distribution of free loans from the state.
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