The Deputy Prime Minister for Political System, Judiciary, and Anti-Corruption, Momo Koprivica, declared today that the concession agreement for the small hydroelectric power plant (MHE) Bistrica, established with Blaž Đukanović, the son of the former Prime Minister and President of Montenegro, Milo Đukanović, is “entirely null and void and should not yield any further legal consequences.”

Koprivica emphasized in his statement that “void contracts must be removed from the legal framework,” describing this as “a strategy to combat corruption and safeguard the public interest.”

“Recently, we have witnessed the peak of the damage inflicted on the state and its citizens due to questionable concession agreements for small hydropower plant construction in Montenegro, which were made during the previous government. These agreements were initially designed to benefit a select few at the expense of the state,” Koprivica remarked.

He noted that while these contracts have been assessed in terms of energy, ecology, and spatial planning, they have not been scrutinized through the lens of anti-corruption laws.

“According to the anti-corruption scrutiny conducted publicly and by NGOs on the disputed concession agreement for the Bistrica small hydropower plant with BB Hidro, owned by the son of the former Prime Minister, it has been determined that this contract is unlawful and altogether null and void. On July 26, 2016, the Ministry of Economy issued an energy permit for BB Hidro for the construction of the small hydropower plant ‘Bistrica,’ which was projected to produce 3,154 GWh annually and was to be located in the Lipovska Bistrica land use plan in the Municipality of Kolašin. The Government session on October 6 made the decision to grant the concession for the Bistrica small hydropower plant. Ultimately, the Government of Montenegro, under then-Prime Minister Milo Đukanović, finalized a concession agreement with ‘BB Hidro,’ where his son, Blažo Đukanović, serves as co-founder, co-owner, and executive director,” explained Koprivica.

He further pointed out that Article 14, paragraph 3 of the Law on the Prevention of Corruption, which took effect on January 1, 2016, clearly states: “A government body where a public official holds office cannot engage in a contract with a company or other legal entity in which the official or a related person has a private interest.”

“In this instance, the government body is the Government of Montenegro, the grantor, and the public official fulfilling a public duty is its president, Milo Đukanović. As per the Law on State Property and the Law on Concessions, the Government is the sole contracting party and grantor, which is also outlined in the contract. The law specifies that a person related to a public official includes direct relatives, which in this case refers to the Prime Minister’s son,” Koprivica stated.

According to him, the private interest of a public official encompasses any ownership or material or immaterial interest belonging to the public official or connected individuals.

“In this scenario, it involves a 50% ownership stake in the company BB Hidro, owned by the former Prime Minister’s son, which is the concessionaire bound by the agreement. Thus, the factual situation fully aligns with the mandatory provision of the Law on the Prevention of Corruption, demonstrating that the involved parties, in their relentless pursuit of profit, have encountered a legal pitfall and violated this crucial provision, which is also recognized in comparative law and is included in the UN Convention against Corruption,” Koprivica asserted.

Moreover, he mentioned that the Law in Article 14, paragraph 4 states: “If a public official or government body acts contrary to paragraphs 1, 2, and 3 of this Article, the provisions of the Law on Obligations regarding contract nullity shall apply accordingly.”

“Thus, due to breaches of the prohibitions laid out by mandatory provisions, if a government body, where a public official performs a duty, engages in a contract with a company in which the official or a related individual has a private interest, that contract is deemed null and void. Therefore, the concession contract for the Bistrica SHPP, with Đukanović’s son’s company, is null and void. It is entirely without effect and should not lead to any further legal ramifications. According to the Law on Obligations, void contracts are those that contravene mandatory regulations or societal ethics. Such contracts cannot be valid, hold legal weight, or generate any legal effects. Nullity represents a more serious penalty for significant violations of legality, essential to the rule of law, which necessitates the removal of a legal act from the legal system and the eradication of any legal consequences it produced. Therefore, the provisions regarding public officials’ participation in discussions and decision-making due to conflicts of interest are not in question here. The ASK, in a bid to dilute accountability, has blatantly violated Article 14 of the Law, thus affirming contract nullity. This introduces a fresh dimension to this issue related to breaches of conflict of interest norms and corrupt behaviors,” Koprivica noted.

He added that numerous advantages were gained from such a null contract, the most significant being the guaranteed purchase of every megawatt produced, along with the stipulation that if the market proves more favorable for a given company, it can exit the contract and resume selling to the state.

“Today, I presented to the Government during a session the legal implications concerning the nullity of this contract, and tomorrow it will be discussed at the National Anti-Corruption Council’s thematic session focused on combating corruption in the area of natural resource exploitation and environmental protection. The relevant judicial authorities will also be informed, since the court monitors nullity ex officio, along with the state prosecutor’s office, which under the Law on Obligations can request a declaration of nullity, alongside the Protector of Property Interests and other competent authorities. This will initiate the process for declaring this contract null. Void contracts must be excluded from the legal system, and their effects must be abolished. This constitutes a pivotal step in the fight against corruption and conflicts of interest to uphold the public interest and protect the resources and budget of all citizens,” concluded Koprivica.

News