15^th Plenary Session of the Congress, 27-29 May 2008

Wednesday 28^th May

Speech of Mr Antun Palarić

Development of local and regional self-government in the Republic of Croatia and the process of decentralisation

Honourable Mr. President,

I would like to thank you for the opportunity to inform you about the situation of local and regional self-government in the Republic of Croatia, and the progress achieved in Croatia since the last Report in 1997, when I had the honour to state the opinion on  recommendations on behalf of the Republic of Croatia. I would especially like to thank you for a fair Report on the situation in the Republic of Croatia after the monitoring carried out in 2007.

The local self-government system in the Republic of Croatia was established in 1992 with the adoption of the Act on Local Self-Government and Administration, the Act on the Election of Members of Representative Bodies of Local and Regional Self-Government Units, and the Act on the Territories of Counties, Towns and Municipalities in the Republic of Croatia. When these Acts were adopted, the Croatian Parliament pledged to comply with all principles of the European Charter of Local Self-Government.

As a member State of the Council of Europe, the Republic of Croatia has ratified the European Charter of Local Self-Government. The Croatian Parliament adopted on 19 September 1997 the Act on Ratification of the European Charter of Local Self-Government. At the time, the Charter was not ratified in full, but in accordance with its Article 12, with the ratification, Croatia as a Party to the Charter obliged to observe 20 Articles.

Having regard to a successful development of the local self-government system in the Republic of Croatia, Croatia has decided to ratify the European Charter of Local Self-government in full, and we have notified thereon the experts of the Council of Europe. Our intention was noted in the Monitoring Report and the Congress specified it as one of the recommendations. Ladies and Gentlemen, it is my pleasure to inform you that the Republic of Croatia has completely ratified the European Charter of Local Self-Government and that the Croatian Parliament reached consensus on that matter.

Local and regional self-government are continuously developing, and with constitutional amendments in 2000, the presuppositions were created for the commencement of a wider decentralisation process, which was implemented by adopting a new Act on Local and Regional Self-Government in 2001. This Act clarified the position of counties which were up to then state administration units as well as regional self-government, however from then on, counties  became exclusively regional self-government, while the state administration tasks are carried out by special offices. Further development of the local self-government proceeded in three directions:

  a) strengthening of local and regional self-government functions;

  b) development of the election system at the local self-government level ;

 c) education of local servants.

New local self-government units were established under the 2005 Act – Large Towns (these are the towns where county seats are and towns with more than 35 000 inhabitants) – as a presupposition for further decentralisation. As regards decentralisation, the transfer of powers to issue all building-related permits has to be emphasised. In the electoral legislation we solved the issue of resignation and replacement of members of representative bodies, which presented quite a problem in practice, while one of the most important new development is the introduction of the system of direct elections of county prefects, mayors and municipal prefects. This Act was in preparation for a long time and it was adopted after the conclusion of monitoring in October 2007.

As regards the developments in the electoral system, I would like to point out the Act on the Financing of Political Parties, Independent Lists and Candidates which regulates the manner and conditions for obtaining the resources for the financing of political parties transparency of the recourses of finance and expenses of political parties, and the supervision of financial transactions, thus providing for efficient mechanisms for the strengthening of financial discipline of political parties and reducing the possibility for corruption.

The application of the Act on the Right of Access to Information has been ensured, and the Government submits to the Croatian Parliament an annual report on the implementation of this Act which, inter alia, relates to the system of local self-government. The Act on the Prevention of Conflicts of Interest in the Exercise of Public Office includes all local officials, which contributes to the fight against corruption.

As a special Croatian characteristic related to the local self-government, I would like to point out the adoption of the Constitutional Act on the Rights of National Minorities and its full implementation through the adoption of the Act on the Election of Members of Representative Bodies of Local and Regional Self-Government Units, and the Act on Direct Elections of Mayors and County Prefects in Local and Regional Self-Government Units. In practice, this Act is implemented in full, and the representation of the members of national minorities in all local and regional self-government bodies has been ensured.

Very significant progress for the local self-government has been achieved this year when the Croatian Parliament adopted the Administrative Inspection Act whereby the presuppositions have been created for a more efficient supervision of the legality of work in local and regional self-government units.

I will take the liberty of informing you that last week at its session, the Croatian Government has adopted the Proposal of the Act on Labour Relations of Servants and Employees in Local Self-Government Units, and I expect that this Act will be adopted at the beginning of June whereby the rights and obligations of local servants will be regulated in a quality manner.

In the area of decentralisation, the Government in its last term of office established the Decentralisation Commission that will continue to consist of state officials and the representatives of the local and regional self-government.

In December 2006 the Act on Amendments to the Act on the Financing of Local and Regional Self-Government Units was adopted (Official Gazette 132/06), which entered into force on 1 January 2007. It lays down that the units no longer participate in the distribution of tax revenue; however, the share of tax revenue belonging to the local and regional self-government units was increased. Joint taxes include revenue tax divided between the state, municipality, town and county, and property trading tax which is divided among the state, municipality and town. The Act regulates the percentages of shares in the foregoing taxes and it establishes, inter alia, that a municipality, town, county and the City of Zagreb which, under a special act, finances a decentralised function, is entitled to an additional share in the tax revenue. Apart from this, considering that each decentralised function has to be accompanied by the decentralisation of resources, the Proposal of the National Strategy for Functional and Fiscal Decentralisation has been drafted.

On 22 May 2005, the implementation of the project “Capacity strengthening for Administrative Decentralisation” under the CARDS 2003 Programme began and it will finish in May 2008.

The main purpose of the project was to provide support to the decentralisation process in the Republic of Croatia, in accordance with the European Union standards and the best practises of the European Union Member States. In that sense, the project strived to enhance the overall institutional and legal framework for decentralisation, and to improve the entire coordination and supervision of decentralisation process. The project tried to establish the ways to strengthen administrative abilities of local servants employed in the local or regional self-government (that is the reason why the Local Democracy Academy was established).  

After the analysis of functional competence was carried out by the CARDS experts, it was established that the competence of towns and municipalities in the Republic of Croatia complies with the best European practices, while the role of counties needs to be strengthened.

The newly established Ministry of Regional Development will have an important role in the process of strengthening the role of counties, and the Proposal for the Decentralisation Strategy will be realised in cooperation with this Ministry.

 With a view of establishing a system of permanent training the Government, together with the Union of the Association of Towns and the Association of Municipalities, and the Association of Counties, established the Local Democracy Academy, while the Training Strategy for Local Self-Government was drafted and discussed with the local self government units. The strategy will be adopted by the Government during the following one month period.

The Croatian Government supports the development of the civil society and all forms of association, including the associations of local and regional units. More than 34 000 associations are active in the Republic of Croatia, meaning that there are no obstacles for local and regional units to establish different types of associations. I would like to emphasise that with the active help of the Central State Office for Administration, the Association of Adriatic Counties was registered, thus we contributed to the creation of the Adriatic Euroregion.

In the process of drafting the acts, the central state government consults with the local and regional units, and the best example of this is the activity of the Central State Office for Administration, which submits all legislative proposals to the local self-government units, it organises public discussions, and only afterwards the Office sends them to legislative procedure.

Ladies and Gentlemen, 

The local self-government system in the Republic of Croatia is, in our judgement, efficient and functional. Through the strengthening of local self-government we have managed to restore the areas that were devastated in the War, we succeeded in peaceful re-integration of temporarily occupied areas, and in the upcoming years we expect that the local and regional self-government units will be competent participants in the uniform development of the Republic of Croatia. All adopted acts, in particular the Act on Direct Election of Municipal Prefects, Mayors and County Prefects, will restore the trust of the citizens in politics, and will encourage them to participate more actively in the process of resolving local and regional issues.

Thank you for your attention!