The Czech Republic came significantly closer to publishing full texts of all contracts signed by the public sector last Friday when the lower house of the national parliament approved the Bill on the Repository of Contracts. According to this legislation, contracts that are not published in the Central Repository in due time will be regarded as invalid. This is a step forward for transparency and open data, giving Czech citizens the ability to better hold their government accountable.
The bill applies to most institutions in the public sector, including national-level government agencies, regional and municipal authorities, educational and medical institutions (e.g. universities, grant agencies, public hospitals and insurance companies), publicly owned companies, public media, and authorities responsible for redistribution of the EU funds.
Machine-readable (and thus easily searchable) texts of contracts together with at least four key types of metadata will be published in a central repository that already exists and where several institutions have been publishing contracts voluntarily.
The most important element of the bill is the provision which states that contracts not published in the repository within one year are regarded as invalid from the outset. This is the most effective mechanism of enforcement since it incentivizes self-policing.
The bill requires all contracts that can currently be requested under the Freedom of Information Act to be published in the repository. This excludes certain contracts containing things such as sensitive personal information. Other types of contracts are excluded as well, like contracts that are entered in verbally.
However, the effectiveness of the bill was reduced somewhat by amendments passed in Parliament. Most importantly, the largest national energy distributor, a publicly owned company called ČEZ, will not fall under the bill at all. This is a major loss not only because of the company’s enormous budget, but because it is frequently cited as one of the most corrupt organizations in the country. The bill will also not apply to Parliament, the Office of the President, municipalities with less than 50,000 people and several other key institutions — disappointing to say the least.
Moreover, contracts below 50,000 CZK (about $2,000 USD) will not be published. This creates a risk of cutting the contracts up to smaller pieces so that they fall below the required threshold. The bill originally required invoices and other related documents to be published as well, but this was also dropped. This is problematic since additional amendments can and often do drastically change the entire contract, including the final price.
The bill will now move to the Senate, where it must be addressed within 30 days. There is actually a chance that the Senate will block it by amending the legislation drastically in favor of greater transparency, so much so that it will be consequentially rejected by the lower house as being too unreasonable. This is a well-known strategy that has been used to prevent unwanted transparency policies in the Czech Republic for decades.
If the bill manages to complete the legislative process, it will only enter into force in July 2017. There is a risk that public officials will try to sign as many contracts as possible before the deadline since older contracts will not be required to be published. But more importantly, it is possible that the deadline will keep being pushed forward by consequent amendments of the bill in the future. There are transparency bills that have been obstructed from entering into force for over a decade this way.
Adoption of this bill has been advocated by the Reconstruction of the State project, a unique coalition including all major politics-oriented civil society organization in the country. The coalition systematically advocates for nine key laws that would significantly reduce boost anti-corruption efforts in the country. After several previous victories (e.g. limiting anonymous ownership of stock shares or a reform of the legislative process), this could be a key success since the repository of contracts is arguably the most important transparency policy on the list.
Although the final version of the Bill on the Repository of Contracts is far from perfect, its adoption will significantly increase transparency of public finances and decision-making, bringing the Czech Republic into a group of countries (including Slovakia and Georgia) where publishing contracts online has helped to create a more open government.
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