(1) incorporation and expansion of activities of the institutions for development; (2) enhanced efficiency of the state programs implementation and government functions performance, and (3) transformation of some public authority structures in order to address the strategic objectives comprehensively, (4) expanding the range of authoritites, involved in the long-term public policy.
2. The Choice of a public corporation as the legal form of incorporation is determined to a large extent by the opportunities to: (1) simplify and accelerate the process of restructuring and consolidation of public ownership in some sectors of the economy, (2) enhance the flexibility of mechanisms for funding, identify potential areas for investment, to fund long-term programs, and (3) ensure “pin-point” adjustments in public administrative system.
Along with those challenging incentives, there took place an important factor of time constraints and the desire to overcome the slow-down in addressing a number of key issues. In view of that, the establishment of public corporations in 2007 has been largely a preliminary (framework) tool of setting up individual institutional priorities in the implementation of government policy and delegation of responsibilities for performance thereof. The performance is ensured by the legal status of each corporation and supported by significant monetary assets, provided to them for rather long-term perspective, and their high position in the administrative hierarchy.
3. It is extremely difficult to make a precise assessment of the overall effect from established public corporations at this opoint, in view of great diversity in their types, and with regard to the fact, that their principles and procedures of functioning are still being developed.
However, in any cases, the creation of public corporations seems questionable: in some cases, significant doubts arise as to the need for incorporation as the new entity for public policy, in other cases the purpose of establishment in the form of public corporation seems unreasonable.
Along with the new opportunities, there are significant risks: expansion of the process of creating new public corporations, “blurring” of the RF government powers due to unclear allocation of powers, abused relationship between the corporations and business, using their status to gain extended authority and resources, non-transparent process of negotiating and adoption the important decisions in corporations, insufficient quality of management resources, in the background of inadequate accountability to the government and civil society. It Section Institutional Problems is worth noting, that the establishment of public corporations have set up a new, higher level for corporate and personal ambitions.
4. Accelerated adoption of laws on public corporations establishment in 2007, in particular due to involvement of the top political level, enables to form a kind of proactive range of authority and capacity (potential) to address a number of strategic objectives of socioeconomic development in Russia. However, at present time, a critical question arises how efficiently and expediently this potential will be realized: practically any corporation needs significantly extended political and administrative resources to ensure its effective functioning, accountability should be ensured in terms of implementation of the set tasks, the risks of “opportunistic” behavior of the corporations and negative impact on market economy development should be reduced.
In general, one could say that the high status and extensive resources of public corporations are not adequately compensated by comprehensive, clear and transparent institutional requirements to their activities. In this regard, the balance of strengths and weaknesses is more like negative: the problems are already visible, but the advantages are still expected to be seen.
5. In our view, to ensure positive results of public corporations activity and to reduce risks, it would be expedient:
– clearly define the role and authority of each corporation in the implementation of government policy, set up restritions in terms of irrational expansion of their responsibilities;
– develop individual strategies and programs of their development, evaluation procedures to assess their effectiveness and expediency;
– ensure the balance between flexibility in expenditures and transparency in decisionmaking process, procedures of government and public control, transparency of performance;
– implement the factor of personal responsibility of the corporations’ managers for the results of their activities;
– in view of public nature of the corporations’ objectives, expand the supervisory board with the popular and reputable representatives, who are not the staff members of any state power authorities or management structures of public companies;
– arrange regular public (independent) audit of the corporations performance results and submit relevant reports to the RF President, RF Federal Assembly and the RF government;
– provide more clearl definitions of the terms and objectives of the public corporations establishment at the level of federal law;
– prior to any corporation establishment, set up as a mandatory requirement to provide the strategy for its activities, justification of inability to meet the targets by other means, risk assessments and propose mechanisms of their reduction;
– basing on the best practice, substantially expand and introduce detailed provisions in the articles of the Law on Non-Profit Organizations, related to the public corporations, paying special attention to the issues of corporate decision-making, control functions over other business entities, interaction with public authorities, accountability and transparency of activities, corporations’ management responsibility for performance results, procedures on reorganization and liquidation.
RUSSIAN ECONOMY IN trends and outlooks 5.3. Seizure and Reserving of Land Plots by the State The problem of compulsory seizure, by the State, of land plots73 from their owners, possessors and leasers – private persons is presently one of the most acute, in view of the growing number of big public and private projects requiring the attraction of additional resources, including land.
It is rather obvious that the necessary precondition for the State’s successful activity in this sphere is the existence of an adequate balance between public and private interests, which can be achieved only in the presence of the following conditions:
- transparency of the State regulation of the grounds for and procedures of seizure;
- a limited list of grounds for seizure of land, and their concrete character;
- true opportunities for receiving, within a minimum period of time, of compensation for a seized land plot and the losses thus incurred, calculated on the basis of property’s market value;
- true opportunities for recalling the unlawful decisions and provisions adopted by officials;
- efficient administrative control, with bringing the officials making decisions in the domain of seizures of land plots to responsibility for their violations and misdeeds.
Today there exists quite an impressive number of legal and other problems associated with seizures of land by the State, which hinder the realization of public interests with due regard for the rights and interests of private persons, as well as for the land market’s development and its participants, while at the same time being conducive to an increasing number of violations in the domain of granting and seizing of land plots.
5. 3. 1. Vagueness of the Rights of the State and the Rights of Owners, Possessors and Leasers of Land Plots in the Domain of Seizures of Land Plots for State or Municipal Needs, and Reserving of Land The practices of arbitration in respect of seizure of land for public or municipal needs cannot as yet be regarded as widespread. However, the high percentage of disputable legal relations arising in connection with this issue in Moscow is quite noteworthy, which has been largely associated with the high concentration of capital and high profits from the use of land there, as well as better developed land and urban development regulations and the availability of “shadow services market”. Most of these factors are also operative in Sochi, where the preparations for the Olympic Games are currently under way.
The existing vagueness of law in the domain of seizure of land for state and municipal needs has been induced by several factors. The currently adopted version of the RF Land Code envisages a whole range of circumstances to serve as the grounds for seizure of land for state or municipal needs. These can be the land plots needed for the fulfillment of RF international obligations (Item 1 of Article 49 of the RF LC), for the construction of various objects: the federal power supply system, transport systems, municipal systems for the supply of electric energy, gas and water, motor roads, bridges and other transport engineering structures, etc.
Seizure of land in this case in understood as enforced termination of both property rights and the right of permanent (or in perpetuity) use of a land plot, the right of its inheritable possession for life, the right of lease, and the right of uncompensated fixed-term use of a land plot.
Section Institutional Problems (Item 2 of Article 49 RF LC). It would be impossible to dispute the necessity of placing such objects and the associated seizure of land plots; however, in order to protect the rights of owners and possessors of land, it seems equally necessary that the responsibility of RF bodies of state authority and of those of RF subjects to publish no later than one year in advance their decisions and plans in respect of seizure of land should be legislatively consolidated. The owners and possessors of land plots should be endowed with the right to dispute such decisions not only in connection with their disagreement and the size of compensation to be paid, but also with the absence, in their opinion, of the necessity to adopt a specific decision resulting in the termination of the rights to a land plot. Such suits (or complaints) can be collective.
One should also note here the possibility to seize land in cases connected with “other circumstances” which, depending on land being federal or municipal property, or property of a RF subject, can be established by federal laws or laws of RF subjects (Item 3 of Article 49 of the RF LC). In fact, this means that the State has virtually unlimited opportunities for introducing any new grounds for seizure of land, if this decision is going to be consolidated by a federal law or a law of a RF subject. This situation is contrary to the conditions consolidated by those same lawmakers in Part 1 of Article 49 of the RF LC, which stipulates that seizure of a land plot for state or municipal needs represents an exception, that is, under a general rule such seizures should be avoided.
Similar legal norms, which envisage as the grounds for seizure of land “other cases envisaged by federal laws”, are consolidated as the grounds for compulsory termination of the rights to land (Subitem 7 of Item 2 of Article 45 of the RF LC) and the termination of the rights of lease on a lessor’s initiative (Subitem 7 of Item 2 of Article 46 of the RF LC), and have been introduced by Federal Law of 18 December 200, No 232-FZ. Thereby extremely comfortable conditions have been created for finding solutions to the problems faced by the State at different levels. However this vagueness, no doubt, is generally conducive to a lower degree of protection of the rights of owners, possessors and leasers of land plots, because it makes their position highly vulnerable and dependent on officials, who presently only rarely are brought to responsibility for violations committed in the domain of land’s granting and seizure.
The grounds envisaged for seizure of lands for state or municipal needs, from May onward, have become identical to those for reserving land plots being owned or utilized by physical or juridical persons74. Federal Law No 69-FZ on reserving, adopted as of 10 May 200775. does not contain any of the provisions regulating the order and procedure for reserving land plots, which were suggested by the RF Ministry of Economic Development and Trade.
This Law simply stipulates the possibility, per se, of limiting some of the rights of owners, users, possessors, and leasers of land plots (the right to erect dwellings, production, culturaldomestic, and other buildings, as well as the right to conduct irrigation, drainage, cropengineering, and other soil conservation work, construct ponds and other similar objects (Subitem 2.3 of Article 56.1, and Article 40 of the RF LC), and consolidates several fundamental provisions concerning the reserving of land. Thus, the reserving of a land plot can serve as the grounds for a refusal to grant land to the ownership of persons (Item 4 of Article For the lands in state or municipal ownership, which are not used by any persons, a broader list of grounds for the reserving of lands and a longer period of reserving are envisaged.
Federal Law “On introducing changes into individual legislative acts of the RF in the part of establishing the procedure for reserving lands for state or municipal needs”.
RUSSIAN ECONOMY IN trends and outlooks 28 of the RF LC). The maximum period of reserving cannot exceed 7 years in respect of lands being in state or municipal ownership and not granted to citizens and juridical persons; in certain cases, the 20-year period of reserving is applied (Item 3 of Article 70.1 of the RF LC).
Besides, the reserving of lands is allowed in the zones of planned placement of capital construction objects for state or municipal needs (Item 2 of Article 70.1 of the RF LC). For example, in Moscow the possibility of this type of reserving of land (including with subsequent seizure) with the purpose of placing capital construction objects has been introduced by the City Government’s Decree from April 2007, in connection with acute shortage of construction sites76. The possessors of land plots will be offered a compensation; its size, however, will be determined by experts appointed by government officials.
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