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2007 Assessment

Moldova: Integrity Indicators Scorecard

Moldova: Integrity Scorecard Report > Sub-Category: Business Licensing and Regulation
Indicators		Score
67	Are business licenses available to all citizens?	75
68	Are there transparent business regulatory requirements for basic health, environmental, and safety standards?	100
69	Does government effectively enforce basic health, environmental, and safety standards on businesses?	33

Indicator and sub-Indicator Details

Are business licenses available to all citizens?

67a: In law, anyone may apply for a business license.

Score:

YES

Comments: Art.6 of the law stipulates that the right to request a license can be attributed to any legal or physical person, including foreign ones, residing in RM, as subjects of entrepreneurship activities; other physical persons need a license according to the particular traits of their activities. Licenses are provided according to the law by specialized governmental bodies, such as regulatory agencies or ministries.

References: Decision of the Government of RM regarding the regulatory reform on the entrepreneurial activities (No.141 of 17.02.2004) Law on Licensing for some kinds of economic activities (No.332-XV of 26.03.1999)

Peer Review Comments: In fact, they may (and need to) apply for several!

67b: In law, a complaint mechanism exists if a business license request is denied.

Score:

YES

Comments: If an application for a license has been rejected by the specialized body (agencies or ministries), then this decision can be contested in a court of justice (art.13.-4).

References: Law on Licenses (1999)

67c: In practice, citizens can obtain any necessary business license (i.e. for a small import business) within a reasonable time period.

Score:

100

Comments: The regulatory framework was seen and it is still perceived as a burden/obstacle towards economic growth. With the aim to simplify the regulatory framework and ease up institutional development of business, a 'guillotine law' has been adopted since 2002, and important steps took place, although they are unsufficient. The regulatory reform presuposes optimization of the authorisations and licensing, implementation of the one-shop-stop system to the economic entities in order to simplify the financial reporting, etc.

References: Decision of the Government on the reform of the regulatory policy (No.141 of 17.02.2004) Enteprise Policy Performance Assessment - Moldova www.oecd.org/dataoeced -

Peer Review Comments: Given the ongoing regulatory reform, the license issue period has been reduced substantially. If a new draft law on licensing is adopted, that period woulb be cut down to 3 days. See [ LINK ]. Doing Business Report says Moldova has medium cost of business regulation. See www.doingbusiness.org.

67d: In practice, citizens can obtain any necessary business license (i.e. for a small import business) at a reasonable cost.

Score:

100

Comments: Moldova is assessed as a low-cost country on business regulation (Doing Business 2007), registering some pregresses in the last yeras according to the World Bank Assessments. The simplification and regulatory reform contributed a lot to this progress.

References: Law on the Revision and Optimization of the Regulatory Framework for Entrepreneurship (No.424-XV of 16.12.2004) Decision of the Government of RM regarding the registrar of authorisations, allowances and certificates, issued by the central administrative authorities and their subordinated organs on all physical and legal entities practicising entrepreneurship (No.920 of 30.08.2005) www.bizpro.md

Peer Review Comments: The author (and the World Bank study) relies on the results of the famous Guillotine Law which dramatically reduced the regulatory burden on businesses. HOWEVER, regulations have reappeared and there is much talk of a Gullotine II Law. I will concur with the reviewer of the entire period of review, however, if I were him, as of today, I would chose a 25 score.

Are there transparent business regulatory requirements for basic health, environmental, and safety standards?

68a: In law, basic business regulatory requirements for meeting public health standards are transparent and publicly available.

Score:

YES

Comments: Art.18 of the Law stipulates that all medical institutions and bodies of the national system of health are required to contribute to the public education of the population on health standards. Art.19 stipulates the right to be compensated for health prejudices because of the sanitary-epidemeologic conditions, hygienic conditions, etc., and every citizen can appeal to justice to receive compensations for the damages and prejudiced that he/she suffered. The law stipulates further (art.20) what kind of medical services they can receive from the state, and what is to be considered a minimum guaranteed package of medical services to the citizens, guaranteed medical vacations in case of desease of trauma, right to get informations about the health situation (art.25), as well as medical care for persons that have lost their full or partial working capabilities or are unemployed (art.37).

References: Constitution of RM (art.36) - The right to the protection of health is guaranteed. Mimumum of health insurance is guaranteed by the state. Law on Protection of Health (No.411-XIII of 28.03.1995)

Peer Review Comments: Like all Moldovan laws, the actual law itself it available, but not published in a way in which subjects of the law can easily read and understand (ie colourful posters or other materials).

68b: In law, basic business regulatory requirements for meeting public environmental standards are transparent and publicly available.

Score:

YES

Comments: The provisions of the law are clear and transparent, the practical implementation of the legislation meets serious obstacles generated by widespread corruption, lack of effective investments in the hospitals, primary medical care, high costs of medicines, and inconclusive medical education of the population.

References: Law on Protection of Health (No.411-XIII of 28.03.1995)

Peer Review Comments: Sources: Law on taxex for polution, Nr.1540-XIII from 25.02.98 Law on protection of the environment, nr.1515-XII from 16-6-1993 Law on environmental expertize and evaluation of impact on environment, nr.851-XIII from 29-5-1996 Policies for a Better Environment: Progress in Eastern Europe, Caucasus and Central Asia, on [ LINK ]" target="_blank">[ LINK ] Environmental Management in Eastern Europe, Caucasus and Central Asia, on http://www.oecd.org/ State of the environment in the Republic of Moldova, Report, 2004, on [ LINK ]. Making monitoring and assesment an effective tool in environmental policy, on www.unece.org

According to the international and national reports, regulations are not enforced, there is a limited access to international experience on environmental management and the environmental issues are given low priority on the political agenda.

Peer Review Comments: Again, like all Moldovan laws, the actual law itself it available, but not published in a way in which subjects of the law can easily read and understand (ie colourful posters or other materials).

68c: In law, basic business regulatory requirements for meeting public safety standards are transparent and publicly available.

Score:

YES

Comments: The law defines its scope as to ensure a system of measures, norms and means, technical, curative and profilactic in order to guarantee safety conditions for the workers, health protection and maintenance of the working capabilities of the population. The law makes compulsory the implementation of the working standards, norms, regulations, protection instructions within all state enterprises, organizations and private entities on what concerns the organization of the working process, security and hygenic conditions, safety of the working places. Specific obligations are assigned to the administrations that run business activities, to ensure safety standards and hygienic and tehnical conditions.

References: Law on Public Safety and Work Protection (No.625-XII of 02.07.1991) Constitution of RM (art.43) - Right to employment and safety in work. Employees have the right to be protected in terms of security and hygiene, gender non-descriminatory treatment, minimum level of the salary in economy, weekends, paid vacations, special working regime, as well as other specific situations. According to the constitution, the maximum duration of the working week is 40 hours. The employees have the right to negotiate their wages, while collective agreements on the wages paid by the business is guaranteed.

Peer Review Comments: Once again, Like all Moldovan laws, the actual law itself it available, but not published in a way in which subjects of the law can easily read and understand (ie colourful posters or other materials). In the letter of the question, this material is available. In the spirit of the question, its not really accessible.

Does government effectively enforce basic health, environmental, and safety standards on businesses?

69a: In practice, business inspections by government officials to ensure public health standards are being met are carried out in a uniform and even-handed manner.

Score:

100

Comments: A Labor Inspection was created in 2001 according to a specific law. The Inspectorate is the main instrument of the central public administration entitled to exercise control functions on behalf of the state over the implementation of the legislative and normative acts in the field of enterprises, institutions and organizations, irrespective of the type of ownership or legal form of organization, local and subnational authorities. Usually, the Labor Inspectorate oversee the issues connected to the existence of the individual or collective contracts, labor passports, work duration and resting time, payments and payroll, labor discipline, work provided to the juniors and women, other aspects related to the labor process. It may issue labor permits and impose penalties on those enterpises that have been conducting illegal activities.

References: Labor Code (No.154-XV of 28.03.2003) Law on the Labour Inspectorate (No.140-XV of 10.05.2001) Decision of the Government of RM (No.1481 of 27.12.2001 regarding the reorganization of the State Inspectorate for Labor Protection belonging to the Ministry of Labor and Social Protection);

Inspectia muncii nu este un monstru, ci un bun prieten No.1172 of 21.10.2006 www.moldova-suverana.md;

Cele mai multe accidente au loc in agricultura No. 144, Sept. 10, 2004, www.timpul.md;

Regulament privind modul de cercetare a accidentelor de munca - Monitorul Oficial No.74 anul 2002 www.cnas.md

Peer Review Comments: I must admit that I am relying mostly on complaints and stories I see in the press. However, even a drive down Stefen che Mare shows that health and safety standards are followed differently by diferent companies. Wide-spread reports of corruption in the enforcement of licencing leads me to be a bit more pessimistic than the reviewer.

69b: In practice, business inspections by government officials to ensure public environmental standards are being met are carried out in a uniform and even-handed manner.

Score:

100

Comments: Only in the first quarter of 2007, the Labor Inspectorate has conducted 1,446 controls on enterprises, institutions, organizations employing over 58,187 staff. They have registered 14,227 of violations of the existing legal acts. See www.social.moldova.org/stiri/rom.40789/

References: Regular business inspections are carried out by the Labor Inspectorate. Often these insepctions are suspected of aiming to corrupt or get corrupted.

Peer Review Comments: State Environmental Inspectorate is a department of the Ministry of Environment and Natural Resources. It carries out inspections, which are considered efficient and arbitrary.

69c: In practice, business inspections by government officials to ensure public safety standards are being met are carried out in a uniform and even-handed manner.

Score:

100

Comments: Only in the first quarter of 2007, the Labor Inspectorate has registered 28 working accidents, including 21 grave and seven deaths. Over 1,446 of controls have been implemented by the Labor Inspectorate, in which they found 14,227 of violations - see www.interlic.md/news/234-romhtml. In 2007, the Labor Inspectorate has been reduced dramatically by the Government. It received six times less than the budget that they had in 2006, and staffing will be reduced from 35 to 10 inspectors - see www.economie.moldova.org

References: Enterprise Public Policy Assessment - Moldova www.oecd.org

Peer Review Comments: The latest accidents involve the collapse of a residential building in Soroca town on 29 October 2007, with at least six persons being killed, and in August half a wall from a storey building fell on a private home, killing one baby. Chisinau Mayor Dorin Chirtoaca has ordered investigations into the construction industry in the capital, where illegal building work is flourishing, with safety rules oftenly ignored.