The Union of Municipalities of Montenegro (ZOCG), at the request of several municipal presidents, is preparing an initiative to postpone the deadline for harmonization with the new Law on Business Companies (March 31) due to the numerous challenges faced by municipally owned companies on this occasion, said Secretary General Mišela Manojlović.
The ZOCG announced that Manojlović, during consultations with representatives of local governments regarding the content of the statutes of municipal companies, explained that the Government had prepared a draft of a special law on the management of companies founded by the state or municipality at the end of last year because it recognized their specificities and the necessity of regulating certain issues in a different way compared to other companies.
"Companies owned by the municipality, namely, perform tasks of public interest from their original local jurisdictions and are therefore an inseparable part of the overall local self-government system. Since a special law is still in the process of being drafted, and the deadline for harmonizing the statutes and overall operations of these and all other companies with the current law is less than two months, the attempt to prepare new statutes has pointed to numerous collisions between the current Law on Companies and the Law on Local Self-Government, the Law on Communal Activities, the Law on Labor, the Law on the Prevention of Corruption and numerous others," the ZOCG statement reads.
Therefore, as Manojlović assessed, it is impossible to draft new statutes without violating some of these laws, which in most cases threaten high fines for prescribed violations. This is especially true when it comes to single-member limited liability companies, which are most common in municipalities.
"In the Union of Municipalities, we have so far prepared four model statutes, with which we tried to offer the 'most painless' solutions for the profession and budgets of municipalities, which will be incorporated into the local self-government system. This, however, meant that we had to deviate from certain solutions of the Law on Business Companies. The alternative available to us was to apply the Law on Business Companies in these models and thereby violate the local self-government system, violate a number of other laws and thus the constitutional principle of the unity of the legal order," said Manojlović.
She stated as an example that if municipalities decided to have a board of directors, which they have had so far as an operational body necessary for a business company, that board would appoint a director who would have a dual role - as a director and at the same time as a member of the board of directors.
"This not only means a conflict of interest, but also a violation of the Law on Local Self-Government, according to which the director, as a management body, is appointed by the municipal assembly and not the board of directors, and this is done through a previously announced public competition, which is required by Article 24, paragraph 4 of the Labor Law. Such a public competition in this case would not be public because only one of the members of the board of directors could be elected through it," said the ZOCG.
The statement states that it is important to remember that every election and appointment automatically implies the status of a public official within the meaning of the Law on the Prevention of Corruption with all the obligations and restrictions prescribed by that law, including conflict of interest.
"This fact calls into question the validity of all decisions of the board of directors proposed by the director and for which he voted in his full capacity as a member of the board of directors, with unforeseeable consequences. If municipalities were to decide to have only an assembly and a director, without a board of directors, this would mean giving enormous powers to the director, which is risky for the public interest. The alternative is to reduce his powers to a reasonable extent, in which case they would be directly exercised by the municipal assembly. The problem in this situation, however, is the fact that the representative body of citizens is not an operational body that can efficiently and quickly make the necessary decisions, which can cause various consequences," said the ZOCG.
They state that one of the concerns is the issue of the continuity of the working status of the current directors and boards who are in office, because, as they said from ZOCG, in the case of labor and compensation disputes, there could be significant costs for the budgets of local governments.
"The community in this case takes the position that they must continue to perform their duties until the end of the term for which they were appointed, especially if the new statutes do not foresee any changes in the conditions for their appointment," the statement reads.
The ZOCG said that the president of the Association of Lawyers of Montenegro, Branislav Radulović, and commercial law expert Borjanka Vučeljić also participated in the consultations, and that a large number of employees in local governments and local companies attended the event.
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