The European Bank for Reconstruction and Development (EBRD) and the government of Ukraine launched a joint initiative to improve the corporate governance of state-owned enterprises, starting with a pilot programme to transform Ukravtodor, the state roads agency. According to a press release of EBRD, both parties signed a Memorandum of Understanding (MoU) where they commit to supporting efforts to enhance Ukravtodor’s procurement system and to strengthen its internal controls, policies and procedures that aim to prevent bribery and corruption.
Denys Shmyhal, Ukraine’s Prime Minister, said, “The partnership between Ukravtodor and the EBRD on corporate governance and anti-corruption practices is another indication that Ukraine has the political will to remove opportunities for any corruption. In addition, such cooperation with our partners will increase the efficiency of public investments in infrastructure projects. The government is continuing its corporate governance reform in line with OECD best practices and is considering the application of this reform in 15 state-owned enterprises in the near future.”
Matteo Patrone, EBRD Managing Director for Eastern Europe and the Caucasus, signed the agreement on behalf of the Bank and said, “This cooperation to strengthen anti-corruption measures in the road sector will serve as a pilot – and a litmus test – for a broader anti-corruption and good-governance programme backed by the EBRD and targeting all Ukrainian state-owned enterprises and public sector entities.”
As part of the MoU, Ukraine is committing to implementing the OECD Guidelines on Corporate Governance of State-Owned Enterprises and to adopting an overarching state ownership policy.
Work to promote good corporate governance in state enterprises and state agencies will include an overhaul of risk management systems, compliance and internal audit systems, and the replacement of existing structures with independent and qualified professionals. Staff will be trained to act ethically and with integrity. In the future, third parties such as contractors and suppliers will also have to commit to the same anti-corruption principles.
Denys Shmyhal and Matteo Patrone at the signing ceremony. Photo from the Ukrainian government portal.