- Kreka Mine Management violated the law and divided a contract worth 950,000 KM by splitting it into direct agreements
- Prosecutor’s Office opened investigation, concluded that the law was violated, but that “management acted in the service’s interest”. Investigation suspension ordered
- TI BiH filed disciplinary complaint against prosecutor for failing to deliver decision to complainant
The Cantonal Prosecutor’s Office of Tuzla Canton has issued an order to suspend the investigation against the former management of Kreka Tuzla Mine which without tender distributed contracts worth nearly one million KM to companies Junuzović-Kopex, MHI KOMPANI and Cayenne company.
Transparency International in BiH filed a criminal complaint regarding this case back in 2019, as there were grounds for suspicion that mine managers avoided public procurement for renting mining machinery and awarded it to these companies by concluding 149 direct agreements.
Since at that time, according to the Law, only up to 6,000 KM per year could be spent through direct agreement for the same matter, and about 950,000 KM was spent, it was evidently an open violation of the law on a scale that TI BiH had not recorded before or since.
Following TI BiH’s complaint, the Tuzla Canton Prosecutor’s Office opened an investigation into this case in July 2022, but a year later issued an order to suspend the investigation, concluding that there were no elements of criminal offense because the mine managers “violated the law,” but it was “in the service’s interest”.
It is evident that the suspects acted contrary to the provisions of the Law on Public Procurement and the Public Procurement Rulebook, but that their actions were not contrary to the interests of the service, and precisely for this reason, although all other legal elements of the criminal offense of Abuse of Position or Authority are fulfilled, due to the absence of intent aimed at obtaining benefits for another and the fact that they did not act contrary to the interests of the service but rather in the interest of Kreka Mine, not all essential elements of the stated criminal offense are fully met, and it was therefore decided that the act committed by the suspects is not a criminal offense
Disciplinary complaint against prosecutor
What is particularly problematic is that the acting prosecutor in this case did not deliver the prosecution’s decision to TI BiH for a year, which they were obligated to deliver to the complainant within three days. This denied the complainant the possibility of filing an objection, and it is even more problematic that the decision was delivered only after several inquiries and TI BiH’s complaint about not receiving the information.
Subsequently, TI BiH filed a complaint with the Office of the Disciplinary Prosecutor of the High Judicial and Prosecutorial Council. TI BiH also filed an objection to the prosecutor’s decision with the Chief Prosecutor of the Tuzla Canton Prosecutor’s Office, as significant facts from the criminal complaint were ignored.
Namely, suspicion regarding the circumstances under which the management of this public enterprise, which is in a difficult financial situation, spent millions on renting machines from privileged private companies was also expressed by the Audit Office of the Federation of BiH Institutions.
In addition to confirming TI BiH’s allegations about illegal splitting of direct agreements, auditors also suspected that management was not acting in the company’s interest, as questions arise about the purpose of spending millions annually on renting others’ machines.
For services rendered by Junuzović Kopex alone (6,311,400 KM), the Company could have purchased a significant number of mining machines that were required by tender documentation and necessary for the Company’s regular operations. Given that the Company is in a very difficult financial situation on one hand, and the fact that it has 2,431 employees and should have its own mining machinery for regular operations, the justification and responsibility for engaging external machinery and workers is questionable,
They wrote off their own machines, spent millions on renting others’
Additional suspicion regarding the purpose of investing so much money in external machinery is raised by the Report of JP “Elektroprivreda BiH” Sarajevo Management from January 2021, which analyzed and determined potential responsibility in RMU “Kreka” for machines designated for write-off.
The report focuses on the fact that out of six purchased bulldozers from renowned manufacturer Liebherr, three were taken out of service immediately after the warranty period expired, which created additional need for renting external machinery.
The report further states that it is highly unlikely that these machines broke down just 10 days after the warranty expired, and that even during the warranty period there were significant breakdowns and many hours of downtime for bulldozers owned by the mine.
Due to all this, there was an even greater need for renting external machinery, which was procured, among other things, by directly violating the Public Procurement Law. Also ignored was the fact that one of the reported managers was already sentenced to a year and a half in prison specifically for cooperation with Junuzović-Kopex, for fictitiously reporting hours of operation for this company’s machines.
This is a company that has been doing business with mines within Elektroprivreda BiH for years, and at one time the director of RMU Đurđević was convicted specifically for disputed fuel procurement from this supplier. Due to all this, in TI BiH’s opinion, the prosecutor’s office should have considered these circumstances before concluding that the violation of the law was “in the service’s interest” additionally because no independent analysis was presented that could justify these claims.
