By Nick Kochan

The 250,000 protesters on the streets of Bucharest yesterday will not welcome it, but Romania’s new government are to be congratulated for reversing what has become a national obsession with corruption.

The announcement that they are planning to decriminalise some forms of official misconduct, pardon some 3,000 people convicted of minor acts of graft –the legal measure covers those who stole less than $50,000 from the state – and release them from jail not only frees up the prisons but sounds a warning to its over-zealous National Anti-Corruption Directorate (DNA).

Some of course will expect the decriminalisation measure to be abused by politicians facing corruption charges of their own. But this would be a highly visible abuse of power that would be self-defeating. In fact, the measure allows the recently elected government to revise its approach to probity in public office, under an international spotlight.

Romania’s newly appointed prime minister, Sorin Grindeanu, of the Social Democratic party is well placed to adopt a more radical approach to dealing with public and business practice by allowing the marketplace to raise standards of ethics and governance rather than a heavy handed state prosecutor. International companies – many bruised by widespread corruption in the country – will freeze out Romanian companies and government officials who fail to play by the proper rules.

The EU is not best pleased by the decision to pardon some people with corruption convictions. An official from the European Commission claimed that the new measure “could affect the legal framework for corruption and the results of the fight against corruption”. It has warned the government against backtracking on its much-vaunted drive against graft.

This has, by some standards, had remarkable results. In 2015, 1,250 people were indicted by the DNA. Targets of the agency included a Prime Minister, five ministers and 21 parliamentarians. The validity of many of these convictions has, however, raised question-marks about the processes used to obtain a rate of convictions that is among the world’s highest. Some 92 per cent of cases brought by the DNA end in convictions.

The EU’s recently published Co-ordination and Verification Mechanism, which assesses the state of the country’s judicial and political institutions, pinpointed problems with the independence of the judiciary. The EU’s monitor said it was keeping Romania’s anti-corruption institutions under scrutiny for a further review at the end of the year.

In addition to a compromised judiciary, the extent of cooperation between the DNA, and the Romanian Secret Service is another concern of international bodies.

A recently published report entitled, ‘Fighting corruption with con tricks: Romania’s assault on the rule of law’ issued by the authoritative London-based Henry Jackson Society, noted that, ‘The Romanian Intelligence Service (SRI), the successor to the feared communist-era Securitate, plays a significant and largely undisclosed role in directing anti-corruption prosecutions.

It carries out 20,000 telephone intercepts on behalf of the DNA every year, initiates DNA investigations and, in its own words, regards the judicial system as a “tactical field” of operations.‘

The real beneficiary of a liberalised approach to graft and inefficiency are the many corporations, untouched by corruption, who are in legal fights with Romania’s government over state contracts and privatization deals. In many instances, lack of transparency in negotiations and corruption have brought the Romanian government and the private company into head-to-head disputes.

The furore surrounding the country’s largest energy producer, KMGI, the Kazakh energy producer is a case in point. This company saw most its assets frozen in 2016, just days after announcing a deal with a Chinese company. Corruption charges inevitably followed the freezing of the assets as the Romanian government moved against former politicians allegedly involved in deals that took place long before the Kazakh company was active in Romania.

Other large international companies inadvertently caught up in Romania’s corruption drive include CEZ, ENEL, E.on and Raiffeissen Bank. All have taken the country to international arbitration disputes. The Romanian government appears to relish contesting and losing battles with some of the largest investors.

International investors are looking for the new Romanian government to adopt more systemic and radical measures to improve the quality of ethics and practice around state procurement and party funding. What few doubt is that the practice of the international market will have a much greater impact on local professionalism and ethics than a heavy handed and questionable local prosecutor. That will show to the market that Romania is serious in dealing with a reputation for corruption that damages its appeal to business and the international community.

Nick Kochan is a UK based writer and journalist and his work may be seen at www.kochan.co.uk. Kochan is writing a book a book on the politics of oil and development.

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