Koprivica Cabinet: Emission credits were designed as a mechanism for enrichment, not environmental protection

The competent authorities have objectively and professionally recognized and confirmed the existence of serious irregularities that accompanied the process of awarding free emission credits, the Office of the Deputy Prime Minister for the Political System, Judiciary and Anti-Corruption, Momo Koprivica, announced.

"Regarding the decision of the Agency for the Prevention of Corruption (ASK) which determined that in the process of emission and procurement of CO₂ credits from the Electric Power Company (EPCG), through an agreement with the company Uniprom, damage was caused to the state-owned company in the amount of 17 million euros and that there was a threat to the public interest indicating the existence of corruption, we note that the competent authorities have objectively and professionally recognized and confirmed the existence of serious irregularities that accompanied this process, and this is the first strong step in definitively resolving this issue," the statement reads.

This decision, they said, represents an important step towards strengthening the institutional fight against corruption and also confirms the expediency of the work of the National Anti-Corruption Council, chaired by the Deputy Prime Minister for the Political System, Judiciary and Anti-Corruption, Momo Koprivica.

"Namely, the National Council, through a thorough analysis of this case and comprehensive discussions at two thematic sessions, as well as through the initiative submitted to the ASK, pointed out gross irregularities in this case, which once again confirmed the justification for a proactive approach in protecting the public interest and state resources," the statement added.

As they argue, this case, which reveals that emission credits were designed as a mechanism for enrichment, not environmental protection, is an indicator of high-level corruption, and a warning that climate policies were not there to express concern for the future, but to serve to improve the balance sheets of private companies.

In this regard, several gross irregularities that have endangered the public interest stand out.

"First, free emission credits were allocated for 2020 and 2021 despite the lack of emission permits, monitoring and reporting systems, and verified monitoring plans, all of which are legal prerequisites for emission credits. Therefore, the emission is without legal basis and outside the regulatory framework, which undermines the principles of legality, transparency, and equality of market entities," the Cabinet stated.

They also explained that the registration of emission credits in the Eco-Fund registry was carried out before the Eco-Fund was registered, which further demonstrates the blatant lawlessness in this case and suggests that the real goal was to provide urgent subsidies without coverage for a private company, and not general concern for the environment.

"Thirdly, there are serious shortcomings in the normative process, through violations of obligations arising from the procedure for adopting regulations, which leads to the conclusion that the regulations were written for the privileged to circumvent and that high-level corruption polluted the system, more than the environment itself. This is particularly serious considering that it is a collapse of the procedure for harmonization with EU legislation and the acquis communautaire," the Cabinet said.

They announced that free emission credits for two companies (KAP and Tosčelik) were calculated contrary to the established methodology, in favor of one and to the detriment of the other, so that the privileged company would be destined to conclude a lucrative deal with EPCG.

"In addition, the settlement of spent emission credits from 2020 and 2021 was carried out for EPCG without it submitting verified emission reports, and thus the number of credits from previous years was annulled, in order to create conditions for trading "missing" emission credits," the statement explained.

And finally, as the Cabinet claims, the agreement between the two companies itself has all the elements of not only a harmful deal, but also a void contract, both due to the manner of concluding and selecting the company from which emission credits are purchased, contrary to market rules, and the illegal subject matter of the contract, which led to the collapse of the principles of transparency, fairness and equal treatment of market entities.

"In this regard, further steps by institutions are particularly needed, because corruption does not stop when it is recognized, but when it is prosecuted, and the aforementioned initial positive epilogue in the form of the ASK decision based on the initiative of the National Anti-Corruption Council is very important," the statement states.

The Cabinet stated that in the fight against systemic corruption, every positive outcome of institutional cooperation is an encouragement to persevere in creating an environment in which accountability, transparency, and the rule of law will be the foundation of the management of state resources.

"The National Anti-Corruption Council remains committed to creating a system in which no case of abuse of public interest will go unanswered, and all actors who protect the public interest will receive full support in their independent, objective and professional work," the statement concludes.

"Vijesti" reported on October 8 that the opinion of the Agency for the Prevention of Corruption (ASK) published on October 7 stated that 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, indicating the existence of corruption.

"Uniprom", owned by businessman Veselin Pejović, later ceded its share of the emission 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.