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2007 Assessment

Colombia: Integrity Indicators Scorecard

Colombia: Integrity Scorecard Report > Sub-Category: Privatization
Indicators		Score
50	Is the privatization process effective?	83
51	Can citizens access the terms and conditions of privatization bids?	90

Indicator and sub-Indicator Details

Is the privatization process effective?

50a: In law, all businesses are eligible to compete for privatized state assets.

Score:

YES

Comments: According to Law 226 of 1995, all individuals and enterprises can access all state stocks privatized by the state.

References: Ley 226 de 1995, Diario Oficial No. 42.159, de 21 de diciembre de 1995 "Por la cual se desarrolla el artículo 60 de la Constitución Política en cuanto a la enajenación de la propiedad accionaria estatal, se toman medidas para su democratización y se dictan otras disposiciones. " art. 2

50b: In law, there are regulations addressing conflicts of interest for government officials involved in privatization.

Score:

YES

Comments: There are no specific regulations for conflicts of interest in the privatization process, however there is a detailed regime trying to prevent conflicts of interests for public servants in general. This regime is applicable to privatization processes. The Law 734 of 2002, or Disciplinary Code for Civil Servants, states that a public servant cannot become creditor or debtor of someone interested in his office business and should recuse from policy decisions when there is a direct particular interests from himself, his relatives or his business partners. In general, public servants should recuse from policy decisions when there is a conflict between the particular and the general interest. Additionally, the Procurement Statute includes personal or economic interest as a reason for public servants to recuse from procurement decisions.

According to the Law employees in state enterprises which are being privatized have to be offered shares in the first place. The aim of this norm is democratize the property of public enterprises giving priority to general employees rather to directives in the process of selling the shares. As this process is public and the employees act in the process of buying shares in their own capacity as employees there are no conflicts of interests as such. These conflicts may arise when shares are sold to the general public, and the conflicts in this area can be covered through the general rules on conflicts of interest.

References: LEY 734 DE 2002. (febrero 5). por la cual se expide el Código Disciplinario Unico

Peer Review Comments: No specific, formal regulations exist to define and regulate conflicts of interest between the official public duties and the private interests of privatization officials.

50c: In practice, conflicts of interest regulations for government officials involved in privatization are enforced.

Score:

100

Comments: Regulations on conflicts of interest in privatization may not work sometimes, and there are usually controversies about the existence of conflicts in privatization process. For example, in 2006 Senator Jorge Robledo denounced that in the upcoming process ot privatization of the Petroleum Company (ECOPETROL) there could be a possible conflict of interest as the Minister of Mining and Energy had worked for a long time with private enterprises in the petroleum sector. It is reported that big economic groups with interest in privatization processes may exert undue influence on the functionaries conducting the process. However it is important to note that social control and the General Attorney´s office have increased their involvement in the oversight of privatization processes. In 2006, the General Attorney´s office accompanied and oversaw the privatization of the Gas company ECOGAS.

According to the Corporation Latinobarometro on its 2005 report, about 40% of surveyed citizens in Colombia consider that privatization processes have benefited the country, and this figure is above the same figure for most Latin American countries.

References: El nuevo ministro, un hombre de las trasnacionales La privatización de Ecopetrol, un gran negocio en contra del interés nacional (15 de agosto de 2006) 15 de agosto de 2006 Intervención del senador Jorge Enrique Robledo en el debate sobre la venta del veinte por ciento de Ecopetrol, Comisión Quinta del Senado

BANCO INTERAMERICANO DE DESARROLLO, CONFERENCIA SOBRE TRANSPARENCIA Y DESARROLLO EN AMÉRICA LATINA Y EL CARIBE LOS PACTOS DE INTEGRIDAD: UNA HERRAMIENTA PARA BUSCAR LIMPIEZA EN CONTRATACIONES DE INTERÉS PÚBLICO Rosa Inés Ospina Robledo Mayo 2000

Procuraduria General de la Nacion. 2007. Balance Social 2006.

Corporación Latinobarometro. Informe Latinobarómetro 2005.

Can citizens access the terms and conditions of privatization bids?

51a: In law, citizens can access privatization regulations.

Score:

YES

Comments: According to the Law 226 of 1995 all privatization processes should be widely publicized in order to guarantee the democratization of property (art. 2 and 9)

According to the Constitutional principle that guarantees the right to access information, all citizens can access regulations on privatization.

References: Law 226 of 1995, Diario Oficial No. 42.159, de 21 de diciembre de 1995 "Por la cual se desarrolla el artículo 60 de la Constitución Política en cuanto a la enajenación de la propiedad accionaria estatal, se toman medidas para su democratización y se dictan otras disposiciones. " art. 2

Constitución Política de Colombia 1991. art. 20

51b: In practice, privitizations are effectively advertised.

Score:

100

Comments: There is no formal process of advertising privatization processes, although through media major processes are known. There are sectors in which advertisement has functioned very well as in the case of electricity companies, which have also been an example in terms of democratizing the property while allowing an easy process for citizens to obtain a share. In 2007, the details on how to obtain a share in the electricity distribution company ISAGEN were widely advertised in mass media (printed, tv and radio). In other cases, as the financial sector, although the shares are initially offered to unions, retirees and employees, in practice general citizens have little access to information before the privatization is conducted.

References: 2007-07-10 - 11:32:00 - DJ Colombia Govt Sets Price For Stake In 5 Power Cos At COP946B DJ Colombia Govt Sets Price For Stake In 5 Power Cos At COP946B

51c: In law, the government is required to publicly announce the results of privatization decisions.

Score:

YES

Comments: According to the Law 226 of 1995 all privatization processes should be widely publicized in order to guarantee the democratization of property (art. 2 and 9), the results of the privatization processes conducted in 2006 are available at the web page of the Ministry of Finance.

Ministerio de Hacienda y Crédito Público. Resumen de procesos de privatización adelantados durante el 2006: 11-MAY-2007

51d: In practice, citizens can access privatization regulations within a reasonable time period.

Score:

100

Comments: According to law, all regulations on privatization should be widely publicized and easily accessible. However, the specifics of each privatization process may be more difficult to access or the access may be limited to the common citizen. According to Law 226 of 1995, specific privatization programs should be designed by the Minister of the respective sector and by the Finance Minister, then submitted to the cabinet and the Government for final approval, and then sent to be known by Congress.

51e: In practice, citizens can access privatization regulations at a reasonable cost.

Score:

100