Report on Local and Regional Democracy in the Czech Republic - CG (7) 4 rev Part II

Rapporteurs: Llibert CUATRECASAS (Spain) and Michel GUEGAN (France)

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EXPLANATORY MEMORANDUM

SUMMARY

This document contains a draft report on local and regional democracy in the Czech Republic. It is made up of an introduction, two numbered sections and conclusions and recommendations. An outline of the fact-finding mission is given in the appendix. The present characteristics of local and regional democracy in the Czech Republic are described, together with the problems identified, in section I. The section II contains an analysis of the reform projects under way. The conclusions and recommendations deal with the problems which might arise in relation to the European Charter of Local Self-Government and the draft European Charter of Regional Self-Government.

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INTRODUCTION

This explanatory memorandum was written after a mission to the Czech Republic on behalf of the Congress of Local and Regional Authorities of Europe, under instructions from the CLRAE Bureau on 3 September 1999 to draw up a report on local and regional democracy in the Czech Republic. The report will be submitted to the Congress for adoption at its plenary session in May 2000.

SECTION I. PRESENT SITUATION REGARDING LOCAL AND REGIONAL DEMOCRACY

1. LOCAL DEMOCRACY

1.1. Legal basis

The Czech Republic signed the European Charter of Local Self-Government on 28 May 1998, and ratified it on 7 May 1999, with a declaration that the Czech Republic considered itself bound by 24 paragraphs in Part I of the Charter. Thirteen of these are paragraphs requested in Article 12 (1) of the Charter. However, the Czech Republic does not consider itself bound by the following provisions: Article 4 (5) (delegation of powers by a central or regional authority); Article 6 (2) (conditions of service of local-government employees); Article 7 (2) (financial compensation for local elected representatives); and Article 9 (3) (local taxes), Article 9 (5) (financial equalisation) and Article 9 (6) (consultation on the manner of allocation of redistributed resources). The Czech ratification is therefore a very recent one, with a quite a few large gaps, and this has to be borne in mind in assessing the situation regarding local self-government in this country.

As regards domestic law, the basic legal framework of local and regional democracy comprises various articles in the Czech Constitution of 16 December 1992. Article 1 lays down that the Czech Republic is a unified state, but Article 8, which is part of the “basic provisions”, states that the autonomy of units of territorial self-administration is guaranteed. In addition, Chapter 7 of the Constitution (Articles 99 to 105) is wholly devoted to “territorial self-administration”, lending it considerable importance. The Constitution refers to “the units of territorial self-administration” (of which the regions constitute the upper tier, under Article 99), which are defined as communities of citizens living within a given area and having the right to self-administration (Article 100). Under Article 101 units of territorial self-administration are public corporations which may have their own property and which manage their own budgets. Lastly, under Article 87 of the Constitution, the functions of the Constitutional Court include dealing with complaints by self-governing territorial units concerning unlawful interference by the state. In the light of these provisions of the Constitution, the requirements of Article 2 of the European Charter of Local Self-Government are met.

The main legislation governing the municipalities is: (a) Law 367/1990 (dating from before the Constitution and several times amended), which lays down the rules on the status and sphere of activities of municipalities; (b) Law 298/1992 on municipal elections and local referendums; (c) Law 418/1990, amended, concerning the city of Prague; (d) Law 200/1990 on levies and charges collectable by local authorities; (e) Law 576/1990 on the budget rules governing municipalities.

1.2. Structure and functioning: general description

The main features of the present structure and functioning of local democracy in the Czech Republic are apparent from these various pieces of legislation. They are as follows1.

The municipal (or town) council, which is the deliberative and decision-making body, is directly elected by the population. It in turn elects the executive organs: the municipal (or town) committee, the mayor and deputy mayors. The mayor reports to the council, which to a large extent decides the mayor’s responsibilities. Responsibility for administrative matters in the largest municipalities lies with the municipal secretary, who is appointed by the municipal committee with the agreement of the head of the district Office.

Citizen participation takes the form of local referendums to decide any matters which are own responsibilities of the municipality insofar as the law does not provide otherwise. There are other forms of direct citizen participation, such as ongoing information supply to the community, consultation of the community on certain issues, establishment of neighbourhood committees or assemblies, a right of petition, involvement of private individuals in operating certain services, and so on. People’s right to take part in management of public affairs, direct or by free election of their representatives, is laid down in the Charter of Human Rights and Freedoms (Article 21).

Local elections (held every four years) are governed by Law 298/1992 on election of municipal councils and local referendums. There are obvious incompatibilities between the position of local elected representative and that of public servant (and, indeed, with certain positions in the private sector), but not with other elective offices. Elected representatives are granted long-term leave from their normal place of work and are entitled to remuneration paid by the municipality or to compensation for loss of wages.

Municipalities have own responsibilities (laid down in Law 367/1990) in the following fields: local development, management of municipal assets and the local budget, social work, public order and the municipal police (who collaborate with the state police), water supply, local public services, etc.

The main responsibilities delegated by central government to the municipalities are: agriculture, primary education, housing, transport, the population register, power supply and culture. Municipalities may establish intermunicipal bodies on a voluntary basis to perform functions of common interest in the fields of education, social assistance, health, culture, sanitation, roads, refuse collection and removal, etc.

In addition to the general rules, under Law 367/1990 (Article 3) there are thirteen cities with special status -meaning that each is empowered to issue its own statute determining its own sub-municipal divisions (districts, neighbourhoods, etc). In addition, four of them (Brno, Ostrava, Plzen and of course Prague) are treated as districts (for these administrative units see section 1.3.1). In these four cities the powers of the district Offices are vested in the municipal authorities, and the mayor is simultaneously head of district.

The special regulations applying to Prague are laid down in Decree 418/1990 on the status of the national capital.

1.3 Present problems of local democracy

In the light of changes in local democracy in the Czech Republic between 1990 and 2000, it was possible to identify the following matters of concern:

1.3.1 Insufficient local autonomy, the existence of districts and the lack of real intermediate level of local self-government

The main administrative units in the Czech Republic are the 77 districts, deconcentrated state authorities subordinate to the government and more specifically - subject to the demarcations of responsibility laid down in law - to the different ministries. The districts (for which there is no provision in the Constitution) have general responsibilities. They were set up in 1990 (under Law 425/1990 on district Offices) after the former national committees were done away with. They do not have any administrative autonomy, receiving instructions from general government services.

In terms of local democracy, an important point is that the district office can suspend execution of decisions which municipal councils have taken under powers which the municipalities independently exercise. Suspension is on grounds of illegality and has effect for a thirty-day period running from the date of issue of the suspension order. It is then reviewed by the Constitutional Court. Where a municipality is not properly exercising powers delegated to it, the districts may decide that those powers will be exercised by municipal services given a special remit for that purpose (Law 367/90, Article 23.1). In their role as supervisors of the exercise of delegated powers, the districts can cancel municipal decisions.

Each district has an assembly composed of representatives designated by each of the municipal councils in the district. The number of members depends on the number of municipalities and the size of the district population.

The main figure in the district, however, is the head of district, who operates mutatis mutandis rather like a Prefect. The head of district is appointed by the government, on a proposal from the Minister for Internal Affairs.

The districts directly exercise powers many of which, if the principle of subsidiarity applied, should fall to the municipalities: power supply, regional/spatial planning, firefighting, nature protection, statistics, social security, agriculture, hunting and fishing, forestry and water, health, secondary education, culture and tourism. Deconcentrated administration at district level in the various sectors also has responsibilities delegated to it by the relevant ministries.

In addition, districts have supervisory powers over the municipalities: this can consist either in review of legality of municipalities' exercise of own powers or in review of the expediency of municipalities' activities under delegated powers. Among other things the districts can challenge decisions which municipalities have taken under the powers delegated to them by central government.

The simultaneous existence of districts, outlying components of central administration and a large number of municipalities (6 244), most of them small, highlights undoubted centralisation in Czech administrative system. The insufficiency of municipal autonomy is not offset by the existence of any local or regional authority that might have developed an intermediate role. All there is the district assembly, but that body is of only minor importance and in addition has limited budget powers. The existence of district-like cities with their own statutes must be seen as a centralising device rather than a decentralisation measure, for the district-cities have the status of deconcentrated state organs.

In short, from the standpoint of the principles of the European Charter of Local Self-Government, the situation in the Czech Republic has to be viewed in a somewhat negative light. Local authorities are not granted the right "to regulate and manage a substantial share of public affairs under their own responsibility" as Article 3 (1) of the charter requires. That assessment must, however, be qualified in that the Czech Republic has recently ratified, if not fully, the European Charter.

1.3.2 Powers delegated to municipalities

A large number of municipalities have powers delegated by central government. This delegation is governed by efficiency criteria set by central administrative authorities, either at district or ministerial level. This results in complex and diverse hierarchical relationships between municipalities and the various tiers of central government.

In any event, measures and regulations adopted by municipalities in matters falling under the delegated powers can be annulled by state organs. Usually this power of annulment lies with the district Office. Transfers of powers from central government are not always accompanied by appropriate transfers of funding.

This unduly extensive use of delegation of powers to local authorities seems contrary to Article 4 (4) of the charter, which states that "powers given to local authorities shall normally be full and exclusive". While the charter provides for delegated powers (Article 4 (5)), it does so in connection with tasks responsibility for which falls to supra-local authorities. Delegation is not intended to allow central government to supervise functions performed at the local level.

1.3.3 Staff conditions of service

The larger municipalities (having a broader range of delegated powers) have the post of administrative secretary. He or she is appointed by the municipal council with the approval of the head of the district Office. The secretary is the superior of all employees of the municipality and organises their work. In the exercise of own powers, the secretary is accountable to the mayor and the municipal committee; in the exercise of delegated powers, the secretary is accountable only to the mayor. He/she is entitled to attend sessions of the municipal council and meetings of the municipal committee in an advisory capacity.

The law applicable to local-authority staff is the labour code. There is no system of staff recruitment, promotion or dismissal according to any set of public-service principles.

It is difficult to reconcile the staff system with the requirements of the European Charter of Local Self-Government. Under Article 3.2 of the charter, the right of local self-government "shall be exercised by councils or assemblies composed of members freely elected … and which may possess executive organs responsible to them". Under the charter, therefore, elected organs should have the right to appoint, discipline or dismiss local-authority staff. These rights are not guaranteed in a system in which a secretary appointed with central-government approval oversees local authority staff.

It should be pointed out that the charter does not grant elected representatives any discretionary powers in staff matters. On the contrary Article 6.2 of the charter states that "the conditions of service of local-government employees shall be such as to permit the recruitment of high-quality staff on the basis of merit and competence". Consequently the rights of elected bodies with regard to appointment, discipline and dismissal of public servants and local-government employees have to be exercised within a framework of guarantees laid down in law in respect of both staff responsibilities and the method of staff recruitment. In the Czech Republic there are no guarantees concerning any of these matters.

Technically there is no civil or public service within the meaning of that term as used in some western European countries. Most of those who work in public administration have no special or exceptional status: their duties are governed simply by labour law. In addition, the duality inherent in municipal administration (which deals with "municipal" matters in its capacity as a municipal authority but also performs functions as a state administrative service) further blurs the dividing line between municipal public service and state public service.

On its second visit, the delegation learned of draft legislation on public service on which the government was still working.

1.3.4 Training

It is recognised at all levels that there is a major training requirement for both local-authority elected representatives and staff to ensure that they can perform their responsibilities appropriately. The competent government services, the elected representatives themselves and non-governmental organisations active in this field all point to significant delay in this connection and a lack of financial and human resources. Lack of training and the need to bring the system into line with modern European working methods and standards would appear to be one of the main features of Czech administration as a whole, whether at central or local/regional level.

Not only is the current situation of concern from this standpoint, it may also affect future developments in local and regional democracy in the Czech Republic. This is because most people working in public administration (by the state or in an elected capacity) and who will also be working for the departments responsible for devolution, are public servants used to centralisation and to the rules of a heavily centralised system. Among them are no doubt some of the future members of the elected regional councils. Hence the urgency of taking steps to provide training at all levels of administration. The relevant department of the Ministry for Internal Affairs is aware of this and genuine modernisation of administration is one of its priorities. Both Ministry for Internal Affairs services and an NGO active in this field – the Foundation for Assistance to Local Administration in the Czech Republic (FALA) – have assured us of their availability for co-operation with the Congress.

1.3.5 Associations of local authorities

Genuine awareness of the importance of decentralisation needs to be reflected in more determined action by associations of local authorities. The Union of Towns and Municipalities (SMO) and has inherited the fruits of a great deal of effort by municipal associations, is the only national representative association at present. Some 2 100 municipalities are members of it (30% of municipalities but 70% of the population). It seems to have the will to take action and be a key partner to the central authorities in the reform process. However, the results of its action do not always seem in keeping with its ambitions.

Further, there is no provision of law which requires central government to consult local authorities' associations. In practice, there would appear to be consultation. Nonetheless there is no legal guarantee of consultation, and nor are there any co-operation arrangements applying at all times other than the 1990 Municipalities Act. Under the 1990 act, municipalities may, on the basis of a voluntary agreement, set up bodies to carry out tasks that fall within their responsibilities (education, social assistance, health care, culture, environment protection, refuse collection, etc).

1.3.6 Cross-border co-operation

Cross-border co-operation is a subject on which the authorities we met did not give very detailed answers. Under the Municipalities Act (Law 367/1990) municipalities can co-operate with municipalities or associations of municipalities in other countries. In addition, on 20 December 1999, the Czech Republic ratified the Outline Convention on Transfrontier Co-operation between Territorial Communities or Authorities. Cross-border co-operation is an area that is fast developing, and local elected representatives in the Czech Republic appreciate it very much.

There are already several Euroregions, a large number of partnerships or twinnings with regions or municipalities in France, Germany, Austria, Poland and Slovakia mainly under European Union programmes (PHARE, CREDO). The Franco-Czech Conference on Towns and Regions illustrates the development of this form of co-operation between Czech municipalities and municipalities in another country.

1.3.7 Finance

Local financial resources include, in addition to non-fiscal resources, wholly local taxes and taxes which the municipalities and central government share2. In particular the municipalities have: (a) the tax on economic activity; (b) a proportion of revenue from income tax; (c) the property tax; (d) a proportion (20%) of revenue from capital gains tax. Taxes are collected by the national tax authorities and the tax rates are set by legislation.

Central-government grants are an important source of municipal finance. The grants system provides an element of vertical financial equalisation but there is no system of horizontal financial equalisation (financial contributions from some municipalities for the benefit of others). Borrowing from banks is supervised by central government (the Ministry of the Economy).

As regards the adequacy of financial resources, information is contradictory. While some local elected representatives speaking at the Franco-Czech conference thought that resources were not equal to needs, the impression from our actual fact-finding was that the position is generally satisfactory. At all events, the bulk of resources comes from the national budget, and that mechanism is reinforced in the new legislation currently under discussion (see section II.1.3 below).

It should be noted that the Czech Republic is not bound by a number of paragraphs in Article 9 of the European Charter of Local Self Government dealing with local finance.

1.3.8 Large numbers of small municipalities

The number of municipalities dropped from around 10 000 in 1950 to around 4 000 in 1960. In the Czech Republic at present there are 6 244 municipalities, most of which (over 80%) have fewer than 1 000 inhabitants. This unduly large number of small municipalities is very much an issue, solutions to which are being sought. So far, however, no consensus has been achieved on a formula for grouping them into larger units.

2. REGIONAL DEMOCRACY

Throughout its history the Czech Republic has been divided into supra-municipal units. In the communist period there were 8 regions ("kraje"). They were abolished in the 1990s but there was no move to replace them with regions established on a decentralised basis or in line with the principles of the draft European Charter of Regional Self-Government, in particular the requirement to have democratically elected regional councils. A regional level is nonetheless regarded as necessary, as an institution capable of allowing wide citizen participation and greater pluralism in the geographical apportionment of the political and economic power.

Setting up this tier of self-government capable of taking on the responsibilities which still fall to the devolved administrative services was recognised as a positive step. The 1997 constitutional reform introducing this sub-national level was necessary to end centralisation of the Czech system and remedy the proven inability of municipalities to co-operate constructively. It also met the need to gradually adapt the administrative map of the country to the requirements of European Union regional policy.

Establishment of regions was decided in Constitutional Law 347 of 1997, which was scheduled to come into force on 1 January 2000. It is a short piece of legislation but one of great importance. Article 1 states that in the Czech Republic there are to be 14 "higher, self-governing territorial units" ("kraje", or regions), which the legislation itself lists (they include Plzen, Brno and the capital, Prague). Article 2 states that regional boundaries can be altered only by legislation, and this meets the requirements of the draft European Charter of Regional Self-Government. Article 4 makes two amendments to the 1993 Czech constitution: Article 99 is amended to state that "the Czech Republic shall be divided into municipalities, which are the basic unit of territorial self-administration, and regions, which are the higher units of territorial self-administration". Article 103 is deleted.

Although Article 5 states that the law is to come into force on 1 January 2000, it should be pointed out that the law will not operate until the regional councils have been set up: that is, until regional elections have been held (they may take place in autumn 2000). The date specified in Article 5 of the law has been de facto put back to 1 January 2001.

SECTION II. CURRENT REFORMS

The state of affairs described above should change significantly as a result of the reforms which have been going on for some years in the Czech Republic. Progress speeded up in the last quarter of 1999 and the first quarter of 2000, and on its second visit the delegation noted the many innovations which had come in since the first visit.

The second visit coincided with a crucial point in the reform process. On the very first day of the Franco-Czech conference the Chamber of Deputies approved various pieces of legislation on decentralisation and administrative reform which should alter the picture as just presented: the Municipalities Act, the Regions and Regional Councils Act, the Capital City of Prague Act, the Regional Elections Act and the Regional Powers Act.

It should be noted that these new laws are not isolated pieces of legislation but form part of a much more ambitious process (including over 20 laws) bringing in a total overhaul of public administration (at all levels and in all sectors). A special department has been created within the Ministry for Internal Affairs to co-ordinate the process and conduct the entire reform of public administration.

Parliamentary debate of this complex matter has been more complicated and lengthier than foreseen on account of particular features of the present party-political balance of power in the Czech Republic. It nonetheless began bearing fruit in March 2000.

The CLRAE delegation was not able to study all the pieces of legislation approved by the Chamber of Deputies in March 2000 as they were actually in the approval stage during the visit and final versions did not seem to be available. The Czech authorities did, however, give the delegation very advanced versions of the Municipalities Act and the Regions Act. Observations on other acts – the Capital City of Prague Act and the Local Finance Bill, for instance - were made during the talks.

1. REFORMS PLANNED IN LOCAL DEMOCRACY

1.1. The new Municipalities Act

a. Summary

The Municipalities Act3 approved by the Chamber of Deputies is a comprehensive new set of rules on municipal administration, ending the system laid down in Law 367/1990, which has governed nearly every aspect of municipal life in the Czech Republic since the Velvet Revolution.

The act is a veritable municipal code of over 150 articles which lays down in great detail the legal rules governing and the organisation, powers and responsibilities of the municipalities, as well as arrangements for supervising them and for co-operation between them. The act does not apply to Prague, which is governed by special legislation we shall discuss below.

Under the act the municipality is the basic administrative division forming one indivisible unit within its boundaries. From the legal standpoint the municipality is a public-law corporation possessing assets of its own and having the right to self-govern (General Provisions, Part 1 of the act). The act contains provisions on the extent of the municipality and changes to its boundaries, and makes specific provision (to remedy the problem of having a very large number of small municipalities) for amalgamation of municipalities.

The municipalities have powers and responsibilities of their own or can have powers and responsibilities delegated to them by other tiers of government. Interestingly, and in accordance with the subsidiarity principle and the requirements of the European Charter of Local Self-Government, the act includes among municipalities' own powers administration of all matters of municipal concern which are not legally the responsibility of the regions (Chapter II). For carrying out delegated responsibilities the act provides that the municipalities are to receive a transfer of funds from the national budget.

The new act lays down detailed rules on administration of municipal assets and municipal financial management.

It explicitly allows co-operation between municipalities, which can be established through a co-operation contract a detailed model for which is provided. Another possibility is an association arrangement between municipalities. Cross-border co-operation is explicitly allowed.

The institutional structure of the municipality comprises the municipal assembly, the municipal council, the mayor, the municipal assembly's committees and the mayor's office, comprising the mayor, the mayor's deputies and the municipal secretary. The size of the assembly (the supreme municipal body) depends on the size of the municipality's population (there are 5 members in municipalities with populations under 500 and 55 members in municipalities whose populations exceed 150 000), and the assembly is elected democratically. The act lays down the assembly's responsibilities, which consist in taking the main decisions affecting the municipality as a whole (approving the land-use plan and budget; setting up municipal bodies and municipal commercial companies; making municipal by-laws; electing the mayor and other members of the municipal council, etc). The act also lays down detailed rules on internal functioning and on remuneration of members of the municipal assembly.

The municipal council is the municipality's executive body as regards own responsibilities of the municipality, reporting to the assembly. The council is made up of the mayor, the deputy mayors and other members as specified in the act (between 5 and 11, depending on the size of the population). All council members are elected and dismissed by the municipal assembly. The council prepares the proposals and papers submitted to the assembly for deliberation and is responsible for carrying out the decisions which the assembly takes.

The mayor is elected by the assembly from among its members. He/she is the co-ordinating head of the council, with powers as specified in the act. In his/her absence, a deputy stands in for him/her. The new act devotes a number of sections to the mayor's office, which in effect is the municipal administrative authority headed by the secretary to the mayor, who reports to the mayor on matters entrusted to the mayor's office.

Finally the act lays down special rules on the cities which have their own statutes, of which there are 14, listed by name. Among these, the cities of Brno, Ostrava and Plzen have even more specific rules.

To guard against a proliferation of small municipalities, the new act requires that any new municipality have a population of at least 1 000.

As regards controls, the version of the act supplied to the CLRAE delegation referred to state "supervision", consisting solely in subsequent review, by the district administrative services, of the legality of decisions. However, in talks with representatives of the various parliamentary committees, the CLRAE delegation was informed that the final version made no reference to districts, given the plans to do away with them. Review, apparently, will be by the regional level and will consist in subsequent review of the lawfulness of measures taken by municipal authorities. Review may lead to suspension of the municipal measure, though the suspension, in any event, will not be definitive, being subject to judicial review (by the Constitutional Court). Dual review is rejected in favour of single review at regional level.

b. Global evaluation

In general terms the Union of Czech Towns and Municipalities approves, and has expressed agreement with, the final text of the Municipalities Act as approved by the Chamber of Deputies, particularly as regards abolishing the districts. Local elected representatives take the view that the 1990 Municipalities Act was valid in its day, meeting the immediate expectations of municipalities. Now, local democracy feels the need to go further. The year-2000 legislation (modelled on the European Charter of Local Self-Government) remedies the weaknesses which showed up in implementation of the 1990 act. It gives the municipalities more powers, widens their sphere of activity and increases citizen participation.

As regards municipality involvement in drafting and discussing the Municipalities Act, local elected representatives state that they were not given a real opportunity to express their views at the governmental stage but that their observations were heeded in the parliamentary debate. For example, the bill did not contain any provision for association agreements between municipalities, which is required by the European Charter, but following comments from the national association (the SMO) this was included in the text approved by the Chamber of Deputies. The original governmental draft would thus appear to have been radically amended so as to take into account criticisms and observations from local elected representatives.

1.2 The new City of Prague Act

Drafting the new City of Prague Act began in March 1999. To begin with the ministry set a two-year period for approving it, which turned out to be unnecessarily generous. Prague elected representatives were neither involved in nor consulted in proper time on preparation of the bill. By the time they were informed, the bill was ready. In November 1999 Prague townhall nonetheless reacted to the situation by putting forward detailed comments on the capital-city bill, insisting in particular that the capital should continue to have a statute allowing it, among other things, to decide itself how the city was divided up into lower-level units.

The government tabled the bill in parliament on 4 January 2000 without giving the city of Prague a chance to put forward its final remarks. The parliamentary committee in charge of the legislation was more sensitive to the case put by the city, however.

In the talks which the CLRAE delegation had with representatives of Prague townhall, the representatives seemed, in the main, satisfied with the final text approved by the Chamber of Deputies, which considerably amended the government bill. The great remaining concern is the impact which the forthcoming Local Finance Act will have on Prague’s budget and activities. If the act is ultimately adopted in its present form, the capital could lose a large proportion of the resources which it enjoys under the present system. In addition the ministries provide no financial help for services the city of Prague provides which benefit the whole of the country (tourism, an international image, etc).

Finally, there will be no regional elections in Prague in 2000. Prague is simultaneously a city, a district (for the time being), and a NUTS II and NUTS III region. Prague local elected representatives will continue in office until 2002 and as from the regional elections in autumn 2000 they will also be acting as a regional council.

1.3 The Local Finance Act

This is one of the legislative measures which lend substance to the administrative reform. According to the information gathered during our talks, under the municipal finance bill all taxes are to be collected at central level and the proceeds allocated among municipalities on the basis of size of population. In addition there is to be a type of equalisation fund. The changes in the offing are therefore considerable.

The bill has been severely criticised by local elected representatives. They see their financial resources coming direct from the state budget, blunting the spirit of initiative of the most energetic municipalities, which have shown themselves capable of attracting productive resources. One of the local elected representatives we met saw the impact of the measure in a different light: for coming on for 4 0000 municipalities the financial situation will improve, whereas for the rest it will less advantageous.

2. REFORMS PLANNED IN REGIONAL DEMOCRACY

2.1 The new Regions Act

a. Summary

The new act (which is the outcome of extremely complicated parliamentary debate) lays down detailed legal rules on regional organisation and powers, supervision of the regions, the regions’ dealings with the ministries and co-operation between regions4.

Under the act the region is a territorial community having the right to decentralised administration. It is a public-law entity concerned with development within its boundaries and to meet the needs of its citizens. It possesses assets, which it manages independently. The regional assembly can issue legal measures concerning matters of state administration entrusted to it (“regional regulations”) and these a region must publish in its own gazette. In addition the act empowers regions to impose fines.

The act establishes a kind of regional citizenship – a legal status composed of political rights (to consultation, participation and so on).

The regions have their own assets: they manage these and protect them from unauthorised interference.

As regards powers/responsibilities, the regions can exercise either those delegated by national ministries or powers/responsibilities of their own (which, however, are neither listed in nor even identifiable from the text of the act). The CLRAE delegation was informed of the existence of an act on transfer of powers/responsibilities, comprising 56 articles which specify, ministry by ministry, what powers are to be transferred to the regions. The system will be symmetrical: all the regions will have the same powers and responsibilities and the same degree of autonomy. Regions will not have any legislative powers, only executive ones. They will nonetheless be able to make legislation proposals to parliament.

The act explicitly allows co-operation between regions, to engage in which regions can enter into a co-operation contract, a detailed model of which is provided.

The region’s bodies are: the regional assembly, the regional council, the president of the regional assembly, the regional assembly’s committees and the regional administrative services.

The size of the assembly (the region’s supreme body) depends on the region’s population and the members are democratically elected. The act specifies the assembly’s powers (which include submitting draft legislation to the national Chamber of Deputies), the rules governing internal functioning, and remuneration of assembly members.

The regional council is the region’s executive body as regards the region’s own powers, and it reports to the assembly. The council is composed of the president, vice-president and other members as specified in the act (between 7 and 11, depending on the size of the region’s population). All council members are elected and dismissed by the regional assembly. The council draws up proposals and documents for the assembly meetings and carries out the decisions which the assembly takes. The president of the council is elected by the assembly from among its members. He/she heads the council and has the powers lay down in law. In his/her absence the vice-president deputises.

The act also contains various articles on the regional administration service and lays down a number of basic rules about the regional public service: required qualifications, examination requirements, selection procedure, etc.

The version of the act supplied to the CLRAE delegation referred to “supervision” by the state, relating solely to subsequent review of lawfulness by a “delegate of the government”, a new figure appearing in this legislation. During talks, however, the CLRAE delegation was informed that the reference to the post of government delegate had been deleted in the final version approved by the Chamber of Deputies.

After the districts have been abolished, review of the legality of regions’ decisions would be carried out by the Ministry for Internal Affairs, through an official who would be empowered to suspend, though not to cancel, the regions’ decisions. The last word would be with the administrative courts. There are none at the moment, but the government is to submit appropriate draft legislation by July 2000.

Under the act the region’s management each year is audited, the cost of the audit being met from the region’s budget.

b. Global evaluation

Members of the relevant parliamentary committees assured the CLRAE delegation that the legislation on regions is modelled on the draft of the European Charter of Regional Self-Government. The regional autonomy it provides for apparently has the two key features of elected councils and exercise of own powers, and central government will not have any extraordinary powers of interference with regional affairs: in particular it will have no say in the composition of the regional council or any powers to dissolve a council or remove elected representatives from office. Supervision will be confined to review of legality.

The 14 regions established are the outcome of a process which has taken quite a few years. In addition, the debate about the number of regions has been fuelled and complicated by the constraints of joining the European Union and the requirement to have institutions in the Czech Republic which qualify for structural funding. The whole process of regionalisation seems to have been influenced by European Union regional policy: the criteria for dividing up the country, the number of regions, the characteristics of the regions (surface area, size of population), etc. The criteria applied in dividing up the country into regions are mainly technocratic ones, influenced to a large extent by the terminology and statistics of European Union social-cohesion policy. Thus the regions created are NUTS III-type regions. Apparently they will later be grouped together - solely for regional-policy purposes - into eight larger regions, of NUTS II type.

With regard to the creation of regions, it would seem that the preliminary discussions did not take sufficient account of the "tradition" factor. Similarly, the 14 regions thus defined do not seem to be ideal from the point of view of meeting economic-development needs, and there seem to be serious disparities between them.

As regards regions’ financial resources, it remains to be seen what version the reform process will produce. The feeling is nonetheless that revenue should cover at least exercise of self-government responsibilities. In addition, the state would help meet the cost of delegated responsibilities. Legislation is on the drawing board on financial flows between the centre and the regions. Under it, special taxes such as the tax on wine, beer and spirits would reportedly be transferred to the regions. Taxes collected by the state would be redistributed to the regions in accordance with population size.

2.2 The districts’ future

This - in the light of the administrative reform and the decentralisation process - is a burning issue whose outcome is extremely uncertain. Under the latest legislative developments the plan is that the districts will disappear and their powers/responsibilities be transferred either to the regions or the municipalities. What is unclear is the precise timetable and the technicalities which abolishing the districts will involve. The power of district heads, past inertia and the difficulty of foreseeing how the process of administrative reform will evolve seem to be the main reasons for the uncertainty.

One of the delegation’s interlocutors in parliament informed it that the final text of the Municipalities Act provides for phasing out the districts in three stages: (a) 2001: creation of regions and reorganisation of municipalities; (b) around 2002: transfer of districts’ powers to the regions or towns; (c) towards 2003: abolition of the districts and final transfer of their staff. However, other people we spoke to saw the process as taking longer - three or even five years.

2.3 Immediate schedule

The Chamber of Deputies approved the Municipalities Act and Regions Act in March 2000. Under the Czech Constitution each of these acts must now go to the Senate, where they will be debated and possibly amended. They then go to the Presidency of the Republic, which can either approve them or veto them. If it vetoes them, they are sent back to parliament, which can override the presidential veto with a two-thirds majority vote.

Our information from the discussions we had is that the acts will probably not be much amended and are likely to be approved by the Presidency. As elections to regional assemblies must be called three months in advance, it would not seem possible to hold regional elections (which would be the start of actually setting up the regions) before October or November 2000. If the elections take place in autumn 2000, the regions could be established on 1 January 2001. This would be a year later than originally provided for in the relevant institutional act (Law 347 of 3 December 1997).

CONCLUSIONS AND RECOMMENDATIONS

a. Conclusions

For some years the Czech Republic has been engaged in a huge, comprehensive reform of public administration, of which the decentralisation process is a key part. This comprehensive reform is aimed at setting up a structure composed of: (a) central government; (b) the regions; (c) the municipalities.

These internal efforts follow progress made internationally in the field of local and regional democracy, in particular within the Council of Europe: the Czech Republic signed the European Charter of Local Self-Government on 28 May 1998 and ratified it on 7 May 1999. It has also ratified the Outline Convention on Transfrontier Co-operation between Territorial Communities or Authorities (on 20 December 1999).

This very delicate and complex process bore its first legislative fruit in March 2000, with the start of what promises to be frenetic legislative activity carried, for the time being, on a consensus between the main forces in the Czech Parliament.

If we consider the historical and political context of the Czech Republic, there is no doubt at all that the process (which according to the delegation’s information is generally satisfactory to the municipalities) must be judged largely positive.

b. Recommendations

The Czech authorities deserve encouragement in their efforts to carry through successful reforms consolidating local and regional democracy. The priority aims could be as follows.

a. Continue the legislative effort, aiming at soundly constituted regions with real powers, and through regional elections establish the elected organs essential to their operation.

b. Search for solutions in order to, along with the abolition of the districts, rationalise the ministries’ delegation of powers to the lower levels.

c. Increase the municipalities’ own powers, in order to reduce the dependence resulting from the delegated powers.

d. Recognise municipalities’ full responsibility for staff matters, under an agreed set of conditions of service for public servants.

e. Set up administrative courts, which would review the lawfulness of municipalities’ and regions’ activities.

f. Reform local finance, taking care not to penalise or discourage those municipalities which have been most energetic in seeking to attract and economic and productive resources. Criteria for the apportionment of tax revenue should be set in the light of other objective criteria, and not just size of population.

g. The Czech Republic should step up its efforts as regards training of territorial authority staff, given that the success of any decentralisation depends to a great extent on the professionalism and efficiency of territorial authority officers.

h. Lastly, the Czech Republic should be encouraged to reduce the scope of the declaration which it lodged in ratifying the European Charter of Local Self-Government.

APPENDIX 1

CZECH REPUBLIC (ratification of the European Charter of Local Self-Government)

Declaration appended to the instrument of ratification deposited on 7 May 1999 - Or. Engl.

In the meaning of Article 12, paragraph 1, of the Charter, the Czech Republic considers itself bound by 24 (twenty-four) paragraphs of Part I of the Charter, of which 13 (thirteen) paragraphs are named in Article 12, paragraph 1, thereof.

The Czech Republic does not consider itself bound by the following provisions:

Article 4, paragraph 5; Article 6, paragraph 2; Article 7, paragraph 2; Article 9, paragraphs 3, 5 and 6.

APPENDIX 2

1. First visit

1.1. Colloquy

1.2. Fact-finding

2. Second visit

2.1. Franco-Czech conference

2.2. Fact-finding

1. First visit

Two visits were made to the Czech Republic. The first, from 8 to 11 November 1999, comprised a colloquy and the actual fact-finding.

1.1. Colloquy

The colloquy, on regionalisation in the Czech Republic, took place in Prague on 8 and 9 November 1999, at the Czech Senate. It was attended by Mr Llibert Cuatrecasas and Mr Kieres (members of the Congress), Mr Günter Mudrich (administrative officer in charge of the Chamber of Regions secretariat), Ms Artemiza Chisca (administrative officer, Congress secretariat), and Mr Bernd Semmelroggen, Mr Philippe de Bruycker and Mr Fernando López-Ramón (consultants to the Congress).

The Czechs were represented at the colloquy by Mr Frantisek Dohnal (the Czech Union of Towns and Municipalities), Mr Evzen Tosenovsky (President of the Union), Mr Ivan Cerny (mayor of Uvaly), Mr Marek (director general, Ministry for Internal Affairs), Mr Josef Postranecky (director general, Ministry for Regional Development) and Mr Vladimir Sourek (Department of Transborder Co-operation, Ministry for Regional Development).

1.2. Fact-finding

The fact-finding part of the visit was conducted in Prague on 10 and 11 November 1999 by Mr Llibert Cuatrecasas, Mr Michel Guégan (Congress members), Mr Günter Mudrich, Ms Artemiza Chisca (Congress Secretariat) and Mr Fernando López-Ramón (consultant to the Congress).

The fact-finding team met: the Czech delegation to the Congress of Local and Regional Authorities and representatives of the Czech Union of Towns and Municipalities; Mr Michael Illner (Director of the Institute of Sociology at the Czech Academy of Sciences) and Mr Per Dotal (Department of Political and Social Geography, Charles University); Ms Marie Bednárová (Director of the Czech Foundation for Assistance to Local Authorities); Ms Yvonne Strecková (Deputy Minister for Internal Affairs); Mr Petr Mares (member of Parliament, representing the Freedom Union); Mr Jaroslav Zverina (Chair of the Committee on European Integration, Chamber of Deputies), Mr Vladimir Lastuvka (vice-chair of the same committee) and Mr Miroslav Benes (Chair of the Committee on Administration, Regional Development and Environment, Chamber of Deputies); Mr Jan Kasl (mayor of Prague) and Ms Eva Ferrarova (head of protocol, City of Prague); Mr Andrej Sulitka (head of secretariat, Government Council for National Minorities) and various members of that council; Mr Philippe Vergne and Mr Thomas Bazin (French Embassy, Prague); and Mr Petr Uhl (the Czech Government’s human rights commissioner).

After this first visit, Professor López Ramón wrote a draft report which was the basis for the first part of the present document.

2. Second visit

The second visit was conducted from 9 to 15 March 2000 and enabled the delegation to attend the Franco-Czech Conference of Towns and Regions and carry out further fact-finding.

2.1. Attendance at the Franco-Czech conference

The Franco-Czech Conference of Towns and Regions took place in Prague on 9 and 10 March 2000. It gave the delegation a first-hand glimpse of the present situation regarding local and regional democracy in the Czech Republic, together with a picture of reform plans, hopes and obstacles to administrative reform.

2.2. Fact-finding

This was carried out from 12 to 15 March 2000 by a delegation composed of: Mr Llibert Cuatrecasas and Mr Michel Guégan (CLRAE members), Mr Günter Mudrich and Ms Artemiza Chisca (Congress Secretariat) and Mr Angel-Manuel Moreno Molina (consultant to the Congress). The delegation had various meetings and talks in Prague and at Hlobuka nad Vltava, with the representatives of the executive, of the Parliament, of the Presidency and of course of the territorial authorities. Apart from the personalities met during the first mission, the rapporteurs had exchanges of views with : Mr Tomas Jirsa, Mayor of Hlobuka nad Vltava and President of the Czech delegation to the Congrès, Mr Jindrich Schmitschleger, Head of the Control Bureau and Mr Cyril Nemec, Head of the Department for Regional Development of the District Office of Ceske Budejovice, Ms Pavla Konopova, Mr Vladimir Vacha, Agency for the Development of the North Bohemia, Mr Ivo Silhavy, Ms Petra Zilinova, Mr Jaroslav Safarik, Department of Political Affairs – Cabinet of the President of the Czech Republic, Mr Vaclav Kupka, Deputy-Minister for Regional Development, Ms Jitka Cenkova, Director, Department for transfrontier co-operation, Mr Tomas Kotrly, Mr Miloslav Hanus, Ms Videmanova, Ministry for Regional Department, Mr Jiri Patocka, Vice-Rector of the Economic University of Prague, Mr Jiri Vlach, Representative of the Union of Freedom, Mr Miroslav Ouzky, Vice-President of the Czech Parliamentary Delegation in the Parliamentary Assembly of the Council of Europe, Mr Miroslav Wolf, member of the Czech Parliamentary Delegation in the Parliamentary Assembly of the Council of Europe, Mr Jan Tomcik, Counsellor for the relations with other municipalities, Ms Vlasta Stepova, President of the Czech Parliamentary Delegation in the Parliamentary Assembly of the Council of Europe as well as several representatives of the Union of Czech towns and municipalities and/or members of the Czech delegation to the Congrès (Ms Jana Fischerova, Ms Marie Paukejova, Mr Jan Mrazeck, Ms Petr Vanek, Mr Jaromir Jech, , Mr Joseph Pavel, Mr Petr Pilat).

 

1 For a more detailed treatment of the subject, see Structure and operation of local and regional democracy. Czech Republic, situation in 1997. Council of Europe Publications, 1998.

2 For more details on the present structure of local finances in the Czech Republic, see Structure and operation of local and regional democracy. Czech Republic, situation in 1997. Council of Europe Publications, pages 16 to 19.

3 The following lines were written on the basis of the provisional texts which the Czech Authorities made available to the delegation while parliamentary procedure was still going on. Thus it is possible that the final texts as published in the official gazette of the Czech Republic will differ in some respects from the description given here.

4 What follows was written on the basis of provisional legislative texts made available to the delegation by the Czech authorities while parliamentary procedure was still going on. It is thus possible that the final text as published in the official gazette of the Czech Republic will differ here and there from the description above.



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