STRENGTHENING THE PPD PLATFORM IN PARLIAMENT FINAL REPORT
USAID GOVERNING FOR GROWTH (G4G) IN GEORGIA
28 March 2019 This publication was produced for review by the United States Agency for International Development. It was prepared by Deloitte Consulting LLP. The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.
STRENGTHENING THE PPD PLATFORM IN PARLIAMENT FINAL REPORT
USAID GOVERNING FOR GROWTH (G4G) IN GEORGIA CONTRACT NUMBER: AID- 114- C-14-00007 DELOITTE CONSULTING LLP USAID | GEORGIA USAID CONTRACTING OFFICER’S REPRESENTATIVE: PHILLIP GREENE AUTHOR(S): BUSINESS AND ECONOMIC CENTRE (BEC) PUBLIC-PRIVATE DIALOGUE: 5500 LANGUAGE: ENGLISH
28 MARCH 2019
DISCLAIMER: This publication was produced for review by the United States Agency for International Development. It was prepared by Deloitte Consulting LLP. The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.
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DATA
Reviewed by: Tamar Buadze, GoG Capacity Strengthening Component Lead Tamar Kapianidze, Public-Private Dialogue Component Lead Nino Chokheli, Deputy Chief of Party Michael Martley, Communications Team Lead
Project Component: Strengthening Public-Private Dialogue Component
Practice Area: Strengthening Public-Private Dialogue
Key Words: PPD, Public Sector, Private Sector, Parliament of Georgia, PPD Platform, MPs, EU Integration, Insolvency Reform, Transport and Logistics, Pension Reform, Water Resource Management, Energy Policy, E-commerce Reform, RIA System Institutionalization in Georgia, Traffic Safety Reform, Economic Barometer for MPs, Annual Award Ceremony
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ACRONYMS
ACCESS Advancing CSO Capacities and Engaging Society for Sustainability ADB Asian Development Bank AFD l'Agence française de développement/French Development Agency AFG Association of Freight Forwarders of Georgia ALFG Association of Law Firms of Georgia AmCham American Chamber of Commerce in Georgia AYEG Association of young Economists of Georgia BAG Business Association of Georgia BEC Business and Economic Centre BOG Bank of Georgia BSOs Business support organizations CSOs Civil society organizations DISA Diaspora Investments Support Association EBA European Business Association EBRD European Bank for Reconstruction and Development EIEC Environmental Information and Education Centre of MEPA EPDI Enterprise and Parliament Dialogue International ESCO Electricity market operator EU European Union EWMI East West Management Institute FTSE Financial Times Stock Exchange GCCI Georgian Chamber of Commerce and Industry GDBA Georgian Distributors Business Association GEA Georgian Employers’ Association GEO Georgia's Environmental Outlook GFA Georgian Farmers’ Association GGI Good Governance Initiative of USAID GIA Georgian Insurance Association GIEC Georgian International Energy Corporation GIG Georgian Industrial Group GIPA Georgian Institute of Public Affairs Die Deutsche Gesellschaft für Internationale Zusammenarbeit (German Society for GIZ International Cooperation) GNCC Georgian National Communications Commission GNERC Georgian National Energy and Water Supply Regulatory Commission GoG Government of Georgia GOGC Georgian Oil and Gas Corporation GPF Georgian Producers’ Federation GREDA Georgian Renewable Energy Development Association GSE Georgian State Electrosystem GSMEA Georgian Small and Medium Enterprises Association GTU Georgian Technical University GTUC Georgian Trade Unions Confederation GWP Georgian Water and Power GYLA Georgian Young Lawyers’ Association G&T Galt and Taggart G4G Governing for Growth in Georgia
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ICS Investors Council of Georgia IDFI Institute for Development of Freedom of Information IMF International Monetary Fund IPT Industry and Parliament Trust ISET-PI Policy Institute of the International School of Economics at TSU ISU Ilia State University MEPA Ministry of Environment Protection and Agriculture of Georgia MFA Ministry of Foreign Affairs of Georgia MIA Ministry of Internal Affairs of Georgia MoESD Ministry of Economy and Sustainable Development of Georgia MoF Ministry of Finance of Georgia MPs Members of Parliament MRDI Ministry of Regional Development and Infrastructure of Georgia NBG National Bank of Georgia NCDC National Center for Disease Control and Public Health NGOs Nongovernmental organizations OSCE Organization for Security and Co-operation in Europe PDPI Personal data protection inspector PPD Public-private dialogue PMCG Policy and Management Consulting Group TPU Tax Payers Union RIA Regulatory impact assessment Swiss Agency for Development and Cooperation/Swiss Cooperation Office in Tbilisi SDC (Georgia) SMEs Small and medium enterprises TBC TBC Bank TCRC Transport Corridor Research Center TIG Transparency International Georgia TOA Small and Medium Telecom Operations Association of Georgia TSU Tbilisi I. Javakhishvili State University UK United Kingdom UNDP United Nations Development Programme US United States USAID United States Agency for International Development WB World Bank WEG World Experience for Georgia
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CONTENTS
1. A SUMMARY OF THE ACTIVITY OBJECTIVES AND ACHIEVEMENTS ...... 7
2. A SUMMARY OF THE ACTIVITY IMPLEMENTATION PROCESS ...... 8
3. DESCRIPTION OF PROJECT IMPACT AND RESULTS, LESSONS LEARNED, NEXT STEPS10 A. PROJECT RESULTS ...... 10 B. LESSONS LEARNED ...... 11 C. NEXT STEPS ...... 13
4. APPENDIXES ...... 14 APPENDIX A – List of the Participants of the Project Activities ...... 14 APPENDIX B – General Statistics and Outcome Indicators ...... 20 APPENDIX C – The Activity Implementation Process ...... 21 APPENDIX D – Stakeholders’ Perspectives on the PPD Platform ...... 46 APPENDIX E – Project Impact ...... 47 APPENDIX F – Media Coverage of the Project Activities ...... 49
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1. A SUMMARY OF THE ACTIVITY OBJECTIVES AND ACHIEVEMENTS
Structured public-private dialogue (PPD) is a reality in the Parliament Georgia today, which contributes to the broader process of policy development in the country. The current situation is the result of the United States Agency for International Development (USAID) project Governing for Growth in Georgia (G4G) to establish a formal mechanism for strengthening PPD and engaging the business community in the policy- making process.
Parliament is the supreme representative body of Georgia, and exercises legislative power and sets the main directions of the country’s domestic and foreign policy; considering this, in its second year, G4G initiated a grant program to work with the Parliament of Georgia to facilitate dialogue between Parliament and the private sector on selected policy reforms.
This report summarizes activities that the Business and Economic Center (BEC) carried out as part of the grant project titled “Strengthening PPD Platform in Parliament,” funded by the G4G project. The report includes information on objectives of the activity, methodology, and all major achievements; it describes the project’s role in the process of public policy formulation, overcoming existing challenges, and improving initiated policies; furthermore, the report describes the improvement of the quality and culture of PPD in the Parliament of Georgia.
The grant aimed to strengthen the PPD platform within the Parliament; in particular, it strived to achieve the following: (1) inform and educate the members of Parliament (MPs) on selected policy reforms, and (2) facilitate the dialogue between the legislators and business community on those reforms.
To achieve the activity objectives, G4G and BEC selected six policy reforms from the G4G reform portfolio, identified MPs and staff members from different committees and factions who were interested in selected policy area, and facilitated structured dialogue between the public and private sectors.
Through the grant, G4G and BEC identified instruments, mechanisms, and specific activities focused on active inclusion of the broader public, especially the business community, in the legislative process, and established an adequate infrastructure for sustainability.
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2. A SUMMARY OF THE ACTIVITY IMPLEMENTATION PROCESS
To achieve the highest level of involvement and contribution, all the activities BEC implemented in the framework of the project were based on the Code of Principles1, which the European Union (EU) and the Organization for Security and Cooperation in Europe (OSCE) Parliamentary Assembly recognize as the benchmarks in facilitating constructive dialogue and a transparent, noncorrupt relationship between MPs and their stakeholders. BEC used the methodology that Enterprise and Parliamentary Dialogue International (EPDI) developed, which is backed by 40 years of international experience and best practices, beginning with the Westminster Parliament and FTSE-100 companies based in London through the Industry and Parliament Trust (IPT). BEC’s technical approach is based on the Charter of Good Practice in Using Public-Private Dialogue for Private Sector Development and Inclusive Growth (the “PPD Charter”)2; the practitioner-to- practitioner approach—facilitating the exchange of information, ideas, and experiences to mutual benefit; and on 10 core principles to achieve sustainable outcomes, in particular:
1. Neutral facilitation, providing a nonpartisan and nonlobbying policy forum; 2. Provide informed, structured, result-oriented, and inclusive dialogue; 3. Work with all sectors of the economy and all sizes of enterprises; 4. Work with a broad range of stakeholders and ultimate beneficiaries; 5. Cooperate with the relevant Parliamentary committees and reform author ministries; 6. Coordinate efforts and capacity of donors, the private sector, civil society organizations (CSOs), and subject-matter experts through multistakeholder PPDs; 7. Inform policy makers before PPDs to enable evidence-based decision-making; 8. Offer a process by which all parties reach a common understanding of issues and consequences; 9. Facilitate country-specific solutions without favor to special interests; and 10. Use the most appropriate risk mitigation strategies for the given circumstances. To accomplish the activity objectives effectively, BEC combined the following three best practices: 1. Expert and stakeholder workshops—Enabled stakeholders to work cooperatively, improved their advocacy efforts, and facilitated their engagement in the dialogue with policy makers. The workshops provided a venue for a wide variety of actors, including the private sector, CSOs, academia, think tanks, donors, and independent experts, to exchange ideas and opinions on selected policy areas prior to the PPDs, as well as to identify and agree on problems and policy suggestions to improve policy initiatives or draft laws. Workshops came prior to the Standard Notes to ensure that MPs were well-informed while participating in PPD. 2. Standard Notes for MPs/brief policy papers—Integrated with the PPDs, Standard Notes were intended for all members and officials of the Parliament of Georgia with an impartial analysis of the selected policy issue. The brief policy papers were prepared based on G4G and other research documents, EU directives, studies, and analyses existing for the relevant area; they included expert and stakeholder opinions and answered the following questions: o What is the problem? o What is the main objective of the reform? o What will be the impact of the new policy? o What could be the potential obstacles for policy implementation? o What are the necessary changes in the reform concept/draft law to improve the policy?
1 “Code of Principles,” Business and Economic Centre, accessed March 26, 2019, http://www.bec.ge/en/about-us/code-of-principles.html. 2 http://www.publicprivatedialogue.org/charter/New%202015%20PPD%20Charter%20of%20Good%20Practice.pdf
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The workshop participants could contribute with the content, but it was up to BEC to compile a final document that met the criteria of quality and impartiality. Standard Notes were prepared using the multiresearch methodologies that BEC piloted. 3. Public discussions/PPDs—Trusted and open in-depth debate between policy makers and workshop participants on selected policy issues to assess problems, generate insights, set policy priorities, discuss, and agree on policy recommendations and legislation solutions. Through the discussions, policy makers, private sector representatives, and experts could more accurately determine the better criteria for policy development. The PPDs contributed to improving the quality of particular reform efforts. BEC identified six principal risks and applied the following strategies to mitigate the risks of PPD: Risks Mitigation Strategies
Reinforcing . Be open and transparent and ensure inclusion of all relevant parties—supporters vested interest or opponents. . Ensure an atmosphere where no topics are off-limits for discussion. . Engage all parties in the process of selecting PPD participants/keynote speakers, as well as topics for PPDs. . Make all decisions on a neutral and cross-party basis. Over- and Ensure equal, balanced representation: under- . Ensure an atmosphere where small and medium enterprises (SMEs) are not representation dominated by big businesses. . Cooperate with business support organizations (BSOs), representing the interests of SMEs and genuinely speak for them. . Enhance gender equality and youth participation across project activities. Sustainability . Prepare a clear agenda for each event and communicate it well in advance. issues/ . Manage expectations in private conversations beforehand. degenerate into . Support experts and representatives of the private sector, CSOs, and academia a talking shop3 to exchange opinions on the issues before the PPDs; identify proper keynote speakers and main topics for discussions. One-person . Foster bottom-up support. shows . Do not build the PPD too closely around a particular individual; select several champions from each sector for each PPD. Political risks . Depoliticize the process through a cross-factional approach. . Be open and transparent and ensure the inclusion of all relevant parties. . Before PPDs occur, inform the media and present outlets with carefully prepared informative handouts and press releases. Institutional . Use technical staff of committees, factions, and targeted ministries. misalignment . Ensure that donors working for the policy reforms are actively participating.
In order to assess the validity of stakeholders’ recommendations, ensure the reliability of the policy papers and support policy makers’ (BEC-involved subject-matter experts who were selected in coordination with G4G) informed judgments. The experts supervised the research efforts of BEC, developed brief policy papers, and guided the process of designing, implementing, and reporting the workshops and PPDs.
3 “Talking shop” is a phrase that recurs often in the literature about PPD. It refers to when discussions are long and unfocused, no concrete results are achieved, people lose interest, and attendance declines.
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3. DESCRIPTION OF PROJECT IMPACT AND RESULTS, LESSONS LEARNED, NEXT STEPS
A. PROJECT RESULTS
G4G and BEC selected six policy reforms from G4G’s reform portfolio that were addressed through the platform from February 22, 2017, to December 31, 2018: insolvency, transport and logistics, pension reform, water resource management, energy policy, and e-commerce. To organize structured and multistakeholder dialogues on selected policy reforms and mitigate principal risks of PPD, BEC performed the following tasks: 1. Identified MPs and staff members from different committees and factions who were interested in the selected policy reform area 2. Created like-minded informal groups of MPs—legislative platforms—in each selected policy area (with 7 to 10 prominent MPs and 5 to 7 staff members in each group) 3. Conducted stakeholder investigation and analysis, and identified experts and stakeholders for each policy area 4. Arranged six expert and stakeholder workshops 5. Prepared six Standard Notes for MPs and familiarized Parliamentarians with brief policy papers before the PPDs 6. Arranged six PPDs with MPs, experts, and stakeholders Prior to the PPDs, BEC held preparatory expert and stakeholder workshops, involving independent subject- matter experts and representatives of the private sector, CSOs, academia, and donors working on selected policy issues. To guarantee active participation and the performance quality of policy makers in the dialogue process, as well as to create a sense of ownership and encourage them to take more responsibility for the dialogue results, all PPDs were held at the Parliament of Georgia and were designed and implemented by BEC in cooperation with the targeted Parliamentary committees and government bodies. Participants of the PPDs included MPs; staff of the Parliamentary committees and factions; representatives of the Government of Georgia (GoG)—ministries and agencies working on selected policy reforms; practitioners from relevant business sectors; BSOs, including business associations and chambers of commerce; experts and representatives of NGOs; think tanks; academia; and donors working on selected policy issues. As a result: Forty-one MPs from nine committees and 11 factions, and 45 members of the Parliamentary staff gained insight on selected policy areas through brief policy papers and PPDs (see Appendix A – List of the Participants of the Project Activities and Appendix B – General Statistics and Outcome Indicators). The informed dialogues on selected policy reforms were facilitated at the Parliament of Georgia through enhanced participation of key stakeholders in diagnostics and solution design (see Appendix C – The Activity Implementation Process). By building consensus and a common understanding between the public and private sector representatives, through (1) facilitating evidence-based decision-making and (2) enhanced policy consultation between legislators, policy makers, and those affected by the policy, each PPD had an immediate effect on improving the quality of particular reform efforts (see Appendix C). MPs and stakeholder representatives attending the dialogues emphasized the importance of the Parliamentary PPD platform and positively evaluated the grant activity, as well as the quality of BEC’s performance (see Appendix D – Stakeholders’ Perspectives on the PPD Platform). The high-quality performance of BEC and tremendous support of the USAID G4G project lead to the following:
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In 2017, the Parliamentary PPD platform was officially launched and welcomed by the Chairman of Parliament and chairmen of relevant committees and factions. In 2017, BEC returned to its office space in the building of the Parliament in Tbilisi, under the patronage of the Chairman of Parliament. PPDs were applied to promote better governance practices and address other large-scale reforms or policy issues, beyond the scope of the grant activity, in particular, PPDs were conducted on: Macroeconomic Trends and Forecasts of Georgia with the support of Crystal Fund. (2017) Regulatory Impact Assessment (RIA) System Institutionalization in Georgia with support of G4G project. (2017) PPD on the Gaps of the Insolvency System in Georgia and the Reform Need (2017) PPD on Transport and Logistics in Georgia: Main Challenges and Development Perspectives (2017) PPD on Draft Law of Georgia on Pension Savings: Pros and Cons (2018) PPD on the Draft Law of Georgia on Water Resource Management (2018) PPD on the Draft Law of Georgia on Energy: Pros and Cons (2018) PPD on the Draft Law of Georgia on E-commerce (2018) Traffic Safety Reform in cooperation with the local NGO Georgian Alliance for Safe Roads, in the framework of the US Embassy funded project titled “Child Car Seats Save Lives” (see Appendix E – Project Impact). (2018) The annual awards ceremony, dedicated to the enhanced legislative dialogue in Georgia, was established by the UK-based International Association–Enterprise and Parliamentary Dialogue International (EPDI), in cooperation with BEC and Crystal Fund, to honor outstanding supporters, partners, and participants of BEC’s PPD activities (see Appendix E). (2017) The grant activity contributed to evidence-informed decision-making, promoted the multistakeholder dialogue and the Parliamentary PPD platform, and raised awareness of selected policy reforms through an intensive media outreach strategy. BEC developed a strong partnership with the official website of the Parliament as well as the business broadcasting media in Georgia on a daily basis. In addition, BEC distributed press releases and informative handouts before and after PPDs and achieved successful media coverage of all activities implemented within the Parliamentary PPD platform (see Appendix F – Media Coverage of the Project Activities). As a result, BEC implemented the project successfully and achieved its overall objectives of the grant activity—creating an independent PPD platform within the Parliament of Georgia to inform and educate MPs on different economic policy reforms, and improving the dialogue between legislators and the business community.
B. LESSONS LEARNED
The grant has raised the importance and culture around PPD, generated successful examples, and led to positive changes. However, the activity implementation process revealed cases when the quality and impact of PPD were inconsistent and varied based on the sector and type of reform. Stakeholders’ engagement remained challenging on many levels, especially on the initial stages of policy formulation, before formal initiation in the Parliament took place. The absence of inclusive consultation at relevant stages of public policy development, as well as the need for dialogue with the private sector for informed and consensus-based decision-making, were emphasized several times by Roman Kakulia, Chairman of the Sector Economy and Economic Policy Committee (which hosted four of the seven PPDs): “Our legislative practice and culture need to be improved greatly. We have heard the word ‘engagement’ for many years but not much effort has been made for its implementation. BEC PPD platform is a very effective cooperation and engagement format.’’ “I think the Parliament should have its format for consultations with the private sector. There is no legislative initiative where private and public interests are not crossed and confronted. When there is a confrontation, it means that any party should compromise and the
USAID | GOVERNING FOR GROWTH (G4G) IN GEORGIA STRENGTHENING THE PPD PLATFORM IN PARLIAMENT 11 logic of the compromise should be visible and understandable to everyone. This exactly is the Parliamentary involvement,’’ he mentioned. As for PPD methodology, BEC learned the following valuable lessons through the implementation of the grant activity: Because lead committees hosted the event, a high level participation was achieved, and the ministries responsible for elaborating strategies or draft laws actively engaged in the PPDs; furthermore, the PPDs were held at the Parliament of Georgia and the chairmen of the lead comittees hosted and organized them in coordination with the reform authors, which resulted in decision makers from other ministries and state agencies being fully engaged. Due to the close coordination with the reform authors, the PPDs were constructive and result- oriented, which ensured the effectiveness and success of the process. Due to the constructive, unbiased, and multistakeholder dialogue, the BEC achieved openness between the reform authors and lead committees, leading to cooperation between key stakeholders and experts in the policy-making process. Donor support was a critical success factor for establishing and strengthening the PPD platform at the Parliament. The fact that the dialogue platform was initiated and funded by an international organization, such as USAID, raised its credence and, consequently, its effectiveness. The high level of engagement of all decision-makers from all key ministries, committees, as well as the multistakeholder approach, enhanced advocacy and an effective outreach strategy, ensuring that the PPDs resulted in effective policy development. The lessons mentioned above prove that BEC’s technical approach and methodology, core principals, and risk management strategy are effective to have a balanced and effective PPD to ensure a participatory legislative process, generate mutual understanding, and achieve sustainable outcomes. Our experience of working with MPs showed that they are more engaged, effectively communicate their position, and are result-oriented when equipped with detailed information. Furthermore, engagement of a broad range of stakeholders in the PPDs ensured that MPs are proactive to participate in the dialogue. Experts and representatives of key interest groups, who are prepared and better coordinated before PPDs through the workshops, are stronger in advocating their interests and providing recommendations in the short time given during the discussions. Therefore, the little time allocated for PPD is more productive and the participants leave the meeting not only with a better understanding of the issue, but also with intention to improve a policy initiative. The following factors led to a successful PPD platform: The Parliament being the center of the activity, which is itself a gathering point for different political views and opinions and, therefore, a place where a political consensus is achieved. A donor organization financed the activity rather than some particular stakeholders or political actors. The presence of facilitation body that is a nonpartisan and nonlobbying organization motivated to establish a transparent bridge of understanding between policy makers and their stakeholders, to enable evidence-informed decision-making and to facilitate country-specific solutions, by using a multistakeholder and empowering approach. As a result, it became possible to have a constructive, informed, result-oriented, and unbiased dialogue between stakeholders with opposing interests, independent experts, MPs from different committees and factions, and executive government representatives. This was a key factor to achieving inclusiveness and constructiveness of the process, building consensus and common understanding between public and private sector representatives, and reaching a high-level political agreement on a reform agenda or the proper development of the suggested policy solutions. The MPs and stakeholders also emphasized the need for holding additional discussions in a similar PPD format, on disputable and controversial issues of reforms identified during the PPDs. Therefore, the main recommendation for the Parliamentary PPD platform’s development is to ensure the full cycle of structured dialogue and address the PPD sustainability issues, to guarantee a similar high-quality consultation on every stage of the policy-making process. The Parliamentary dialogue should be held during the initiation process, and the series of PPD activities should be implemented focused on one specific policy reform until the policy/draft law is officially adopted.
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C. NEXT STEPS
BEC has designed the next series of PPDs to address the following large-scale reforms/policy issues in 2019 through the Parliamentary PPD platform: green economy and sustainable development in Georgia, air pollution regulation and air quality governance infrastructure in Georgia, green transportation and technical inspection reform, and intercity passenger transportation system reform. The PPDs mentioned above will be held at the Parliament together with the Sector Economy and Economic Policy and Environmental Protection and Natural Resources Committees, in cooperation with the USAID- funded EWMI ACCESS project, Crystal Fund, Georgian Alliance for Safe Roads, and the Ministry of Economy and Sustainable Development of Georgia (MoESD). Except for the issue-based dialogues, PPDs and the various capacity-development activities will occur to promote better governance practices and strengthen the Parliament as an institution of democracy and accountability; in particular, BEC strives to achieve the following: . Follow the newly established format to develop a PPD in the Parliament—Economic Barometer for MPs—in cooperation with the Sector Economy and Economic Policy and Budget and Finance Committees, with support of Crystal Fund, to establish a strong tradition of discussing the main macroeconomic trends and forecasts, as well as the positives and negatives of the economic, fiscal, and monetary policies of Georgia at the Parliament on a quarterly basis. . Follow the newly established format to develop a PPD in the Parliament—Company Attachments—in cooperation with targeted Parliamentary committees and the private sector representatives. The new program is designed to provide MPs and senior parliamentary staff with a unique, first-hand insight into business and industry, and includes a series of sector-based visits of cross-party groups of parliamentarians to private companies to become familiarized with the peculiarities of different sectors and business operations. The first activity will occur in Spring 2019 and will cover water resource management in cooperation with the Environmental Protection and Natural Resources Committee and a private company, Natakhtari. In May 2019, EPDI, in cooperation with BEC and Crystal Fund, will hold the next annual awards ceremony to honor outstanding supporters, partners, and participants of BEC’s PPD 2018 activities. Seven representatives of Parliament, the GoG, business sector, and civil society will be awarded appreciation awards and certificates of appreciation in recognition of gracious contribution toward the development of a PPD platform at the Parliament of Georgia, for outstanding and dedicated cooperation with BEC in PPD activities at the Parliament, and for outstanding and dedicated participation in PPD activities of BEC at the Parliament.
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4. APPENDIXES
APPENDIX A – LIST OF THE PARTICIPANTS OF THE PROJECT ACTIVITIES
Members of Parliament
1. Irakli Kobakhidze, chairman of Parliament, “The Georgian Dream” faction member 2. Irakli Abuseridze, Sector Economy and Economic Policy Committee member, “The Georgian Dream for Powerful Georgia” faction member 3. Revaz Arveladze, Sector Economy and Economic Policy Committee deputy chairman, “The Georgian Dream” faction member 4. Giorgi Begadze, Sector Economy and Economic Policy Committee first deputy chairman, “Georgian Dream – Greens” faction member 5. Irakli – Dachi Beraia, Budget and Finance Committee deputy chairman, “The Georgian Dream” faction member 6. Eka Beselia, Legal Issues Committee chairperson, “The Georgian Dream” faction member 7. Levan Gogichaishvili, Legal Issues Committee member, “The Georgian Dream for Powerful Georgia” faction secretary 8. Roman Gotsiridze, Budget and Finance Committee deputy chairman, “National Movement” faction chairman 9. Isko Daseni, Sector Economy and Economic Policy Committee member, “The Georgian Dream” faction member 10. Akaki Zoidze, Healthcare and Social Issues Committee chairman, “The Georgian Dream” faction member 11. Archil Talakvadze, Parliamentary Majority, Budget and Finance Committee leader, “The Georgian Dream” faction member 12. Rati Ionatamishvili, Human Rights and Civil Integration Committee deputy chairman, “The Georgian Dream” faction member 13. Roman Kakulia, Sector Economy and Economic Policy Committee chairman, “The Georgian Dream” faction member 14. Paata Kvijinadze, Budget and Finance Committee first deputy chairman, “The Georgian Dream – Conservatives” faction member 15. Levan Koberidze, Healthcare and Social Issues Committee deputy chairman, “The Georgian Dream” faction member 16. Irakli Kovzanadze, Budget and Finance Committee chairman, “The Georgian Dream” faction member 17. Kakhaber Kuchava, Environmental Protection and Natural Recources Committee chairman, “The Georgian Dream” faction member 18. Teimuraz Kokhreidze, Sector Economy and Economic Policy Committee member, “The Georgian Dream – Entrepreneurs” faction member 19. Koba Lursmanashvili, Environmental Protection and Natural Resources Committee member, “The Georgian Dream for Development of Regions” faction member 20. Davit Matikashvili, Legal Issues Committee deputy chairman, “The Georgian Dream” faction deputy chairman
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21. Guguli Magradze, Education, Science and Culture Committee deputy chairperson, “The Georgian Dream” faction member 22. Endzela Machavariani, Environmental Protection and Natural Resources Committee deputy chairperson, “The Georgian Dream” faction member 23. Beka Natsvlishvili, Committee on European Integration deputy chairman, “The Georgian Dream – Social-Democrats” faction deputy chairman 24. Beka Odisharia, Regional Policy and Self - Government Committee member, “The Georgian Dream” faction deputy chairman 25. Gia Jorjoliani, Education, Science and Culture Committee member, “The Georgian Dream – Social- Democrats” faction chairman 26. Gela Samkharauli, Agrarian Issues Committee first deputy chairman, “The Georgian Dream” faction member 27. Davit Songulashvili, Regional Policy and Self - Government Committee member, “The Georgian Dream” faction member 28. Giorgi Tugushi, Human Rights and Civil Integration Committee deputy chairman, “European Georgia – Movement for Freedom” faction member 29. Gedevan Popkhadze, Human Rights and Civil Integration Committee member, “The Georgian Dream” faction member 30. Irina Pruidze, Committee On European Integration first deputy chairperson, “The Georgian Dream” faction member 31. Zakaria Kutsnashvili, Regional Policy and Self - Government Committee member, “The Georgian Dream” faction member 32. Nino Tsilosani, Sector Economy and Economic Policy Committee member, “The Georgian Dream” faction secretary 33. Zurab Tchiaberashvili, Healthcare and Social Issues Committee deputy chairman, “European Georgia – Regions” faction member 34. Davit Chichinadze, Sector Economy and Economic Policy Committee deputy chairman, “Patriots of Georgia” faction member 35. Giorgi Khatidze, Legal Issues Committee member, “The Georgian Dream” faction member 36. Tamar Khulordava, Committee on European Integration chairperson, “The Georgian Dream” faction member 37. Dimitri Khundadze, Healthcare and Social Issues Committee first deputy chairman, “The Georgian Dream” faction member 38. Zaza Khutsishvili, Environmental Protection and Natural Resources Committee first deputy chairman, “The Georgian Dream” faction member 39. Giorgi Gachechiladze, Environmental Protection and Natural Resources Committee member, “Georgian Dream – Greens” faction chairman 40. Mamuka Mdinaradze, Legal Issues Committee member, “The Georgian Dream” faction chairman 41. Nato Chkheidze, Sector Economy and Economic Policy Committee member, “Patriots of Georgia” faction deputy chairperson
Members of the Staff of the Committees and Factions - Managerial Positions
1. Tamila Shabashvili, head of the staff of the Sector Economy and Economic Policy Committee
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2. Tamar Khintibidze, head of the staff of the Committee on European Integration 3. Irina Khasaia, head of the staff of the Healthcare and Social Issues Committee 4. Irina Lomia, head of the staff of the Budget and Finance Committee 5. Valeri Tatunashvili, head of the staff of the Human Rights and Civil Integration Committee 6. Tatia Khetaguri, head of the Parliamentary Budget Office 7. Davit Magradze, head of the staff of the chairman of the Parliament 8. Zurab Dekanoidze, head of the staff of the Legal Issues Committee 9. Iveri Akhalbedashvili, head of the staff of the Agrarian Issues Committee
Specialists of Different Committees and Factions
1. Teona Mdivani 19. Nino Terenashvili 2. Natalia Tavadze 20. Maia Esebua 3. Maia Berdzenishvili 21. Elene Jorjoladze 4. Irine Chkhenkeli 22. Tamaz Todradze 5. Natia Suarishvili 23. Irakli Tsimintia 6. Nestan Gaprindashvili 24. Salome Kurasbediani 7. Vakhtang Chalapeikrishvili 25. Tamaz Kraveishvili 8. Natalia Kumelashvili 26. Vazha Karumidze 9. Giorgi Razmadze 27. Giorgi Siradze 10. Nana Megrelishvili 28. Tamar Japaridze 11. Jaba Urotadze 29. Elene Tskhomelidze 12. Irina Khutsishvili 30. Ana Kutaladze 13. Tamar Nadibaidze 31. Irine Sukhishvili 14. Raul Gogsadze 32. Ilia Shamugia 15. Nino Mangaladze 33. Ketevan Lepsveridze 16. Neli Gautishvili 34. Natia Sharikadze 17. Giorgi Kacharava 35. Elene Jimsheleishvili 18. Marina Metreveli 36. Davit Kupreishvili
Deputy Ministries and Heads of Departments and Divisions
1. Nikoloz Gagua, deputy minister of finance 2. Nino Javakhadze, deputy minister of internal Affairs, former deputy minister of economy and sustainable development 3. Mikheil Sarjveladze, deputy minister of justice 4. Ekaterine MIkabadze, deputy minister of economy and sustainable development 5. Nino Tandilashvili, deputy minister of environmental protection and agriculture
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6. Merab Narmania, Analytical Department of the MoF 7. Nino Tkhilava, Environment and Climate Change Department of MEPA 8. Lasha Inauri, EU Integration Department of MEPA 9. Mariam Makarova, Water Resource Management Division of MEPA 10. Tamar Aladashvili, director of the Environmental Information and Education Centre of MEPA 11. Eka Kubusidze, Communications, Information and Modern Technologies Department of the MoESD 12. Giorgi Dapkviashvili, Communications, Information and Modern Technologies Division of the MoESD 13. David Sharikadze, Energy Policy Department of the MoESD 14. Zaza Chikhradze, Department of the Energy Reforms and Projects of the MoESD 15. Giorgi Chichinadze, head of the Capital Market Development Division of the MoESD 16. Vakhtang Tsintsadze, Department of the Energy Reforms and Projects of the MoESD 17. Tea Loladze, Economic Policy and RIA Division of MoESD 18. Shalva Tadumadze, Parliamentary secretary of the GoG 19. Natia MIkeladze, Parliamentary secretary of the GoG 20. Zurab Dznelashvili, deputy business ombudsman of Georgia 21. Archil Mestvirishvili, vice governor of the NBG 22. Manana Pruidze, acting chairperson of the National Intellectual Property Center of Georgia Sakpatenti 23. Nikoloz Gagnidze, chairman of the Data Exchange Agency of the Ministry of Justice 24. Giorgi Chikovani, CEO of the Georgian Energy Development Fund 25. Irina Milorava, chair of the Georgian National Energy and Water Supply Regulatory Commission 26. David Narmania, commissioner at the GNERC 27. Maia Melikidze, commissioner at the GNERC 28. Giorgi Pangani, commissioner at the GNERC 29. Irakli Galdava, director of the Natural Gas Department of the GNERC 30. Nugzar Beridze, director of the Electricity Department of the GNERC 31. Zviad Gabisonia, CEO of Shota Rustaveli National Science Foundation
Private Companies
1. BLC Law Office 1. Energo-Pro Georgia 2. VBAT Law Firm 2. Electricity Market Operator (ESCO) 3. Kordzakhia Jgenti Law Firm 3. Gross Energy Group 4. Chargeishvili Law Inn 4. Georgian Oil and Gas Corporation (GOGC) 5. Policy and Management Consulting Group (PMCG) 5. Telasi 6. JSC MFO Krystal/akido.ge 6. Gas Transportation Company 7. Anaklia City 7. SGI Frontier Capital 8. Anaklia Development Consortium 8. Clean Energy Group 9. Trans Caucasus Logistics 9. Georgian International Energy Corporation
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10. Georgian Post 10. Silknet 11. DHL 11. Geocell 12. TNT/FedEx 12. Allmarket.ge 13. CaucasTransExpress 13. Beeline 14. Globalink, 14. Mymobile 15. Wilhelmsen Ships Service Georgia, 15. Chichiko Goletiani 16. Georgian Railway 16. New Net 17. JSC Georgian State Electrosystem (GSE) 17. Hotsale.ge 18. Aldagi 18. Premium Web Solusions 19. Galt and Taggart (G&T) 19. Magticom 20. KPMG 20. Allwine.ge 21. TBC 21. Proservice 22. Bank of Georgia (BoG) 22. ITDC 23. Ehgurhesi, 23. My.ge 24. Efess Georgia 24. LTD Akhali kselebi 25. Georgian Water and Power (GWP) 25. Amazon Export Hub 26. Socar Energy Georgia
List of BSOs
1. Association of Freight Forwarders of Georgia 2. Association of Law Firms of Georgia 3. American Chamber of Commerce in Georgia 4. Business Association of Georgia 5. Georgian Employers’ Association 6. Georgian Insurance Association 7. Georgian Trade Unions Confederation 8. Tax Payers Union 9. European Business Association 10. Georgian Small and Medium Enterprises Association 11. Georgian Renewable Energy Development Association 12. Investors Council of Georgia 13. Georgian Distributors Business Association 14. Georgian Producers’ Federation 15. Association of young Economists of Georgia 16. Georgian Chamber of Commerce and Industry 17. Georgian Industrial Group 18. Georgian Farmers’ Association 19. Small and Medium Telecom Operations Association of Georgia
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20. Diaspora Investments Support Association
List of International Organizations
1. German Society for International Cooperation (GIZ) 2. European Bank for Reconstruction and Development (EBRD) 3. Asian Development Bank (ADB) 4. World Bank (WB) 5. Swiss Cooperation Office in Georgia 6. International Monetary Fund (IMF) 7. United Nations Development Programme (UNDP)
List of Georgian Universities/Think Tanks
1. International School of Economics at Tbilisi State University-Policy Institute (ISET-PI) 2. Tbilisi I. Javakhishvili State University (TSU) 3. Georgian Technical University (GTU) 4. Georgian Institute of Public Affairs (GIPA) 5. Ilia State University (ISU) 6. New Economic School - Georgia
International and Local NGOs
1. Institute for Development of Freedom of Information (IDFI) 2. Georgian Young Lawyers’ Association (GYLA) 3. Transparency International Georgia (TIG) 4. Transport Corridor Research Center (TCRC) 5. Hub Georgia 6. Centre for Competition 7. Greens Movement of Georgia/Friends of the Earth 8. Georgia's Environmental Outlook (GEO) 9. World Experience for Georgia (WEG) 10. Green Alternative 11. Energy Efficiency Foundation
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APPENDIX B – GENERAL STATISTICS AND OUTCOME INDICATORS
The following outcome indicators outline grant activity achievements: (1) Forty-one MPs from nine committees and 11 factions (including seven females [17 percent4] and 29 in leadership positions [71 percent]), and 45 members of the Parliamentary staff (including 28 females and nine in managerial positions) were informed and educated through brief policy papers and PPDs on selected policy areas (see Appendix A). (2) Six informed, structured, and inclusive PPDs on selected policy reforms were facilitated at the Parliament of Georgia, through enhanced participation of key stakeholders in diagnostics and solution design; in particular, the following: The PPD on Insolvency Reform: Attended by 54 participants (including 28 females) from the public and private sectors, civil society, and academia, including seven MPs and nine staff members. Ten stakeholder representatives (among them three female) declared their positions. One-hundred percent of MPs who attended the PPD asked questions and made comments on the policy issue during the PPD.
The PPD on Transport and Logistics: Attended by 43 participants (among them 15 females) from the public and private sectors, civil society, and academia, including nine MPs and three staff members. Eight stakeholder representatives (among them two females) declared their positions. Eight MPs who attended the PPD (90 percent) asked questions and made comments on the policy issue during the PPD.
The PPD on Pension Reform: Attended by 75 participants (including 29 females) from the public and private sectors, civil society, and academia, including nine MPs and 16 staff members. Thirteen stakeholder representatives (among them two females) declared their positions. Five MPs who attended the PPD (60 percent) asked questions and made comments on the policy issue during the PPD.
The PPD on Water Resources Management: Attended by 50 participants (among them 26 females) from the public and private sectors, civil society, and academia, including four MPs and five staff members. Seven stakeholder representatives (among them two females) declared their positions. Three MPs who attended the PPD (75 percent) asked questions and made comments on the policy issue during the PPD.
The PPD on Energy Policy: . Attended by 80 participants (among them 26 females) from the public and private sectors, civil society, and academia, including seven MPs and six staff members.
4 In the reporting period, the number of female MPs in the Parliament of Georgia (23) was 15 percent of the total number of all (150) members of Parliament.
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. Seven stakeholder representatives (among them one female) declared their positions. . Five MPs who attended the PPD (70 percent) asked questions and made comments on the policy issue during the PPD.
The PPD on E-commerce Reform: . Attended by 56 participants (including 31 females) from the public and private sectors, civil society, and academia, including six MPs and nine staff members. . Eight stakeholder representatives (among them five females) declared their positions. . Four MPs who attended the PPD (70 percent) asked questions and made comments on the policy issue during the PPD.
To summarize: . Five deputy ministers, 27 heads of departments/divisions, and more than 15 specialists from the following 18 ministries and state agencies were actively involved in BEC’s PPD activities: Administration of the GoG, MoESD, MoF, MoJ, MEPA, MIA, MFA, NBG, GNERC, Georgian National Communications Commission, EIEC, National Intellectual Property Center of Georgia – Sakpatenti, Data Exchange Agency (DEA), Office of the Business Ombudsman, Office of the Personal Data Protection Inspector, Competition Agency, Georgian Energy Development Fund, and Shota Rustaveli National Science Foundation (see Appendix A).
. Twenty BSOs, 52 private companies, nine international organizations, six Georgian universities/think tanks, and 11 international and local NGOs were involved in workshops and PPD activities, including EU delegation to Georgia; UNDP; WB; IMF; EBRD; AFD; GIZ; AmCham; BAG; EBA; GSMEA; GFA; ISET-PI; TSU; Ilia State University; GIPA; IDFI; GYLA; TIG; MPCG; G&T; KPMG; Anaklia Development Consortium; TBC Bank, BoG; Magticom; Geocell; TOA; Georgian Railway; GWP; Energo-Pro Georgia; Georgian Post; DHL; TNT/FedEx; JSC MFO Krystal; and more (see Appendix A).
. Forty-one MPs from nine committees and 11 factions were involved in PPD activities, from which 29 MPs (71 percent) were in leading positions, in particular: Chairman of the Parliament and head of the Parliamentary majority; Six chairmen, seven first deputy chairmen, and 10 deputy chairmen of the following committees: Agrarian Issues Committee; Budget and Finance Committee; Committee on European Integration; Education, Science and Culture Committee; Environmental Protection and Natural Resources Committee; Healthcare and Social Issues Committee; Human Rights and Civil Integration Committee; Legal Issues Committee; and Sector Economy and Economic Policy Committee. Four chairmen and two deputy chairmen of the following factions: “The Georgian Dream”; “The Georgian Dream – Social-Democrats”; “The Georgian Dream – Greens and The National Movement.” The members of the factions included in the Parliamentary majority: “The Georgian Dream – Conservatives”; “The Georgian Dream – Entrepreneurs”; “The Georgian Dream – for Development of Regions”; “The Georgian Dream – for Powerful Georgia.” The members of the factions included in the Parliamentary minority: “The European Georgia – Movement for Freedom”; “The European Georgia – Regions.”
APPENDIX C – THE ACTIVITY IMPLEMENTATION PROCESS
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The following legislative platforms were created within the grant activity, each of them in close cooperation with the relevant Parliamentary committees to address the selected policy issues systemically, arrange PPD activities at the Parliament of Georgia, and ensure that MPs actively participated in public discussions: 1. Insolvency reform 2. Transport and logistics 3. Pension reform 4. Water resource management 5. Energy policy 6. E-commerce reform
BEC involved the following subject-matter experts in the project activities: 1. Nana Amisulashvili, insolvency expert 2. Irakli Danelia, transport and logistics expert 3. Marina Guledani, capital markets expert 4. Eliso Barnovi, water resource management expert 5. Murman Margvelashvili, energy policy expert 6. Zviad Gabisonia, e-commerce expert
LEGISLATIVE PLATFORM ON INSOLVENCY REFORM
The Legislative Platform on Insolvency Reform was established, and the activities of the platform were arranged in cooperation with the Sector Economy and Economic Policy Committee of Parliament. BEC performed the following activities within the grant activity on the selected policy issue: 1. Conducted the expert and stakeholder workshop “Gaps of the Insolvency System in Georgia and the Need for Reform” on April 20, 2017.5 The purpose of the working meeting was to exchange opinions on the gaps of the insolvency system in Georgia and reform perspectives between experts and stakeholders; based on the discussion, BEC prepared the agenda and identified content for keynote speakers’ speeches for the PPD, scheduled for April 28, 2017, at the Parliament of Georgia. Twenty-three participants from the private sector, CSOs, and academia attended the workshop, including Investors Council of Georgia, AmCham, GCCI, ALFG, Georgian Producers’ Federation (GPF), the Office of the Business Ombudsman of Georgia, ISET-PI, AYEG, BLC Law Office; and VBAT Law Firm. Based on the discussion, BEC drafted the PPD’s agenda6 and identified seven keynote speakers for PPD to share the private sector’s perspective with MPs. 2. Delivered and sent the brief policy paper Gaps of the Insolvency System in Georgia and the Need for Reform to targeted MPs on April 24, 2017, to ensure well-informed participation of MPs in the dialogue. The policy paper was prepared based on G4G and other research, studies, and analysis existing in the relevant area, as well as on the results of the expert and stakeholder workshop. The paper addressed the following topics: a brief overview of the insolvency system in Georgia, gaps of the existing insolvency system and the factors deterring to use the insolvency law, problems related with secured and unsecured creditors, challenges related to the transitional period of insolvency proceedings, challenges related to the existing procedures of property realization, international best practice, stakeholders opinions on the gaps of the insolvency system in Georgia, and expected results of the insolvency reform.
5 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10154348497121078. 6 http://www.parliament.ge/uploads/other/61/61762.pdf.
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3. Held the PPD on the Gaps of the Insolvency System in Georgia and the Need for Reform on April 28, 2017, organized with and hosted by the Sector Economy and Economic Policy Committee of the Parliament of Georgia, in coordination with the MoJ.7 The purpose of the event was to discuss the gaps of the insolvency system in Georgia, reform perspectives, and ongoing process with respect to the drafting of a new insolvency law; to enhance stakeholders’ involvement in the regulation improvement efforts and to encourage more-informed participation of legislators in the process of drafting legislative changes; and to improve the draft legislation by gathering all different stakeholders together, among them, business practitioners, business associations, and executive government representatives. The Sector Economy and Economic Policy Committee of the Parliament of Georgia, Roman Kakulia, and the executive director of BEC, Natia Katsiashvili, chaired the PPD. Fifty-four participants attended from the public and private sectors, civil society, and academia, including the Parliament of Georgia, MoESD, MoF, MoJ, National Bureau of Enforcement (NBE), Business Ombudsman of Georgia, German Society for International Cooperation (GIZ), AmCham, BAG, Tax Payers Union (TPU), Centre for Competition, ALFG, Investors Council of Georgia, Georgian Distributors Business Association (GDBA), GPF, ISET-PI, IDFI, BLC Law Office, Kordzakhia Jgenti Law Firm, and Chargeishvili Law Inn. Roman Kakulia, Natia Katsiashvili, Natalia Beruashvili, chief of party, USAID G4G, and Mikheil Sarjveladze, deputy minister of Justice of Georgia, delivered opening remarks. Roman Kakulia underlined the importance of the insolvency reform to create a better business environment and economic recovery. He emphasized the shortcomings of the existing legislative framework for insolvency, and the importance of providing rehabilitation opportunities for businesses to have a survival perspective and creating a predictable environment for creditors. Kakulia positively assessed the actions the government has taken in this area, and he highlighted the importance of PPD for effective policy making: “Perfect work by the government will be performed when everyone who may have a competent opinion regarding the topic is heard. A healthy and comprehensive legislative framework can be developed only based on their opinions,” the chairman said before thanking USAID G4G and BEC— the dialogue organizers. Natia Katsiashvili highlighted the openness of the Parliament of Georgia and the Sector Economy and Economic Policy Committee and the high level of cooperation with the project. She introduced the essence and aims of the PPD platform in Parliament, the workflow of the “Strengthening PPD Platform in Parliament” project, and the main principles and procedures of informed and constructive dialogue. She discussed the importance of increasing business participation in the policy-making process to achieve a common goal—the development of improved, effective, and predictable economic legislation—and she urged the participants to actively engage in dialogue.
Natalia Beruashvili thanked the Sector Economy and Economic Policy Committee and BEC for arranging the dialogue and discussed the importance of insolvency reform, which will contribute to the development of the capital market and encourage the creation of innovative businesses, start-ups, and the attraction of foreign investments to the country. She also discussed the active role of USAID G4G in developing insolvency reform, including through strengthening PPD: “It is crucial to carry out a reform in this area. A consensus has been reached, although specific steps and decisions should be reviewed. The purpose of the project is to ensure a PPD that will facilitate the identification of the needs and consensus decision-making,” Beruashvili mentioned.
Mikheil Sarjveladze highlighted the support of USAID G4G and GIZ provided to the Ministry at the early stage of the reform. USAID invited a foreign expert, and Sarjveladze underlined their contribution to the development of the reform concept. He also thanked local experts of the reform working group for “their colossal intellectual labor.” The deputy minister emphasized the effectiveness of the ongoing dialogue format for proper development of the reform, and thanked the organizers. “I don’t think it would be exaggerating to say that conducting a meeting in such a format is no less important than any activity,” Sarjveladze said.
7 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10154376253596078.
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Insolvency experts Nana Amisulashvili and Ketevan Bashinuridze presented the importance of an effective insolvency system and the best practices. Nana Amisulashvili discussed the importance of an efficient insolvency system as “a hospital for sick business” to save business and emphasized the significance of the ongoing dialogue: “It is a very exciting moment for me to see that all segments, which decide the fate of the reform—the government, the Parliament of Georgia, private sector and international community, and CSOs, are sitting around the table.” The expert highlighted the flaws of the current insolvency system and the need for the reform. She mentioned the unfavorable position of Georgia in the WB’s Ease of Doing Business ranking (106th place) and the necessity of improving this result. To illustrate insolvency as a positive phenomenon, she provided the attendees with examples of international best practices, according to which an effective insolvency system helped businesses improve upon unsuccessful experiences (e.g., Ford Motor Company, The Walt Disney Company, Heinz). As Amisulashvili noted, the persons engaged in the reform process should conduct their efforts to (1) make the insolvency process in Georgia faster, inexpensive (of a reasonable price), and effective; (2) ensure that saving business is the starting point of this process; and (3) distribute property among creditors in a fair, organized, and calm environment in the case of bankruptcy. Ketevan Bashinuridze shared international best practices on unsecured creditors with the dialogue participants. She gave examples of German, US, and English legal systems and provided a comparative analysis. Bashinuridze outlined the practice of calling a meeting of creditors and discussed the opportunities for Georgia to adopt this practice. Nino Tsagareishvili, legal adviser at GIZ, provided the dialogue participants with information about the process of working on the insolvency reform within the EU project, as well as GIZ’s contributions. She also mentioned that, within the project, not only was the text of the draft law developed, but it was also planned to conduct training sessions for persons involved in insolvency processes. An RIA was scheduled for the draft law to study the social, economic, and financial impacts of the reforms for further improvement of the document. Private sector perspectives on the gaps of the insolvency system were presented by Tamta Ivanishvili, representative of ALFG and BLC Law Office; Iva Chkonia, president of the Georgian Distributors Business Association (GDBA); Levan Silagava, president of the Georgian Producers’ Federation; Lasha Nodia, representative of the Georgian Business Association (BAG); and George Jugeli, legal expert at Investors Council Georgia, PhD in law. Tamta Ivanishvili discussed flaws in the current insolvency system and legislation and the rare practice of using the insolvency regime and late appeal as a result of it. She stated that dissatisfaction of both parties with insolvency processes in most cases indicates that there is a problem with the system. The aforementioned is triggered by ineffective procedures envisaged by the law, for secured as well as unsecured creditors, and the high costs of the process. Consequently, she emphasized the need for a comprehensive and complex reform to ensure an efficient and transparent insolvency system, predictable insolvency management process, and procedures oriented on saving businesses. Iva Chkonia underlined the peculiarity of the distribution sector “whose 95 percent represent unsecured creditors in the business relations” and noted that the “Georgian Distributors Business Association would not exist if there were no problems regarding insolvency.” Consequently, he talked about problems concerning unsecured creditors caused by flaws in the law and its enforcement. As Chkonia mentioned, “There exists a reasonable doubt that some companies [e.g., retail network companies] become insolvent deliberately to avoid debt obligations. The state structures do not investigate such cases and punish the offenders, which is a bad practice.” He provided a detailed review of the specific regulations in the law, which requires transformation, including the procedure for calling a meeting of creditors to introduce effective insolvency management procedure into practice. He called for the legislators not only ensure timely reform of the system but also at the same time improve the quality of enforcement of the law, which is no less important. Levan Silagava reviewed the difficulty to start insolvency as a “shameful process” from the prospect of Georgian Producers Federation and GEA and the related public stigma. He discussed the importance of starting a business and its liquidation opportunities and, therefore, emphasized the need for timely reform of insolvency law. Silagava emphasized the problems related to the transitional period of insolvency, ineffectiveness, and inefficiency of the role of guardian. Consequently, the need for effective regulation of the activities implemented by the NBE in this process is apparent. Lasha Nodia underlined the importance of active participation in the dialogue process and mentioned, “I believe that we are doing a great job for our country because the fact that the insolvency law is not an ordinary law, it is a very important law, which in fact does not work in Georgia today.” He discussed
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insolvency principles and procedures and the importance of an effective law from the perspectives of various actors—debtors, creditors, and contractors—also investors directly related to him and his legal company, for whom the simplicity of closing the business is one of the priority factors in investment decision-making. He emphasized the existence of an ineffective nonregulatory framework for all parties and important shortcomings in law enforcement. Like the previous speakers, he underlined the need for effective and complex reform. “The law should envisage clear and transparent procedures that will allow us to differentiate between sustainable and unsustainable enterprises. If an enterprise can survive, the law should support its survival. This process must be fast, simple and inexpensive,” he summarized. George Jugeli discussed the insolvency problems on the agenda of the Georgia Investors Council and put an equal emphasis on the protection of creditors’ rights and the goal of saving entrepreneurs. “Empirical studies suggest that in the countries where special attention is paid to creditors’ rights (it is noteworthy to mention the UK legislation in this area), the rehabilitation coefficient is much higher compared to those countries where the insolvency law is more debtor-biased,” he said. Jugeli also shared the results of empirical observations on the economic impact of the reform with the legislators, which suggest that “a good insolvency law has a positive effect at both micro and macro levels. For example, it is understood that it has an impact on both GDP growth and GDP per capita growth.” He supported the implementation of insolvency reform in the country from the perspective of a business law practitioner and as a member of the Investors Council. The GoG’s positions concerning the necessity of the reform were presented by George Khatidze, PhD (law), member of the Legal Issues Committee of the Parliament of Georgia; Nikoloz Gagua, deputy minister of finance; and Nino Javakhadze, deputy minister of economy and sustainable development. Public sector speakers emphasized the importance of the existence of an efficient and effective insolvency system taking into consideration the economic growth of the country and expressed their support for the implementation of timely system reform. George Khatidze highlighted the openness of the Parliament of Georgia and its readiness to cooperate with the private sector in policy-making activities. He stressed the need for ensuring a balanced insolvency law and its effective implementation. Niko Gagua stated “The fact that the law does not work is triggered by the law’s inefficiency. Moreover, according to the applicable law, the judiciary is overloaded; the court should be unloaded based on the international practice. A new law should allow enterprises to have more chance of rehabilitation. We mentioned the Ease of Doing Business ranking where we are not holding leading positions, although the importance of an effective insolvency law is broader. Many empirical studies suggest that it accelerates the GDP growth by approximately 1.5 percent. It is also crucial for the capital market development, decreases interest rates in the country, etc.’’ Nino Javakhadze emphasized the importance of taking into consideration the law and its introduction into practice in terms of the “doing business” methodology. Respectively, she underlined the necessity for improvement of the whole insolvency management system and not only the law. The discussion comprised active participation of public and private sector representatives. Members of Parliament—Revaz Arveladze, David Chichinadze, Isko Dasen, Zurab Chiaberashvili, and Roman Gotsiridze—assessed the ongoing reform process positively and asked questions about the causes of the unfavorable position of Georgia in the WB Ease of Doing Business ranking and the methodology for ranking development. The MPs expressed their interest in international practices, specifically how the insolvency law affected the business rehabilitation process implemented by unsuccessful businesspeople in other countries. The MPs also discussed the gaps in the property assessment practice in Georgia. Mikheil Sarjveladze, Nino Javakhadze, and Nana Amisulashvili provided detailed explanations of the important role of the legislative framework in promoting a successful insolvency practice and the peculiarity of the methodology for the WB Ease of Doing Business ranking development. Akaki Chargeishvili, managing partner of Chargeishvili Law Inn, mentioned that “the issues related to the insolvency law are very important, and this is the very format for raising issues and providing answers. However, the discussion showed that it is also crucial to envisage these problems correctly in the neighboring law.” Alexandre Ratishvili, president of the Taxpayers Union of Georgia, talked from the perspective of distributors, trade representatives, as well as producers, and highlighted the necessity of implementation of a complex reform. However, he stressed the problem of accessing funds, namely the lack of alternative sources of financing aside from banks; therefore, he asked for more active involvement from the committee in terms of capital market development, which is considered the main problem for business development in Georgia.
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Archil Bakuradze, chairman of the BEC, underlined the importance of improving the neighboring law for the development of a unified, effective system, including the issue of regulation of the responsibility and good faith of directors in the laws of Georgia on entrepreneurship, and asked the question about business entities covered by the planned reforms—whether the reform concerns only legal entities or natural persons as well, since “the concept of limited liability in Georgia is not widely used and usually ends with human responsibility.” In response to the questions, Mikheil Sarjveladze explained that the government was considering that it may also apply natural persons while protecting creditors’ interests to ensure that all cases of insolvency are balanced and fairly regulated in the country. He mentioned Henry Ford’s case as an example and expressed the desire to have more opportunities for rehabilitation in Georgia, which helped H. Ford to get out of bankruptcy. The deputy minister summed up the results of the meeting: “The issues raised today are very complex, and, due to this fact, we wanted to develop a complex reform from the very beginning when we started working on this draft law. However, we do not expect the reform to solve all the problems, but we have an ambitious plan to solve as many problems as possible,” including through sharing positions and ideas of interest groups within this and similar formats. “All problems are equally relevant and every opinion expressed here is crucial to ensure proper development of processes. Therefore, I hope that all of you will be actively involved in the next phase of discussions and we will cooperate productively, including in the implementation process,” Sarjveladze said. He also hoped that in the new law, “we will find solutions for all the aforementioned problems because it cannot be otherwise.’’ Roman Kakulia, chairman of the The Sector Economy and Economic Policy Committee, expressed his readiness to hold individual meetings with the attending interest groups to ensure in-depth discussion of their concerns and opinions.
LEGISLATIVE PLATFORM ON TRANSPORT AND LOGISTICS
The chairman of the Sector Economy and Economic Policy Committee requested the transport and logistics topic, while the other themes of PPDs fell upon G4G and private sector recommendations. In the initial list of the project topics, “Capital Market Reform” was replaced by “Transport and Logistics” in agreement with G4G. Therefore, the legislative platform on transport and logistics was established and the following activities of the platform were arranged in cooperation with the Sector Economy and Economic Policy Committee: 1. The BEC held the expert and stakeholder workshop “Transport and Logistics in Georgia: Main Challenges and Development Perspectives” on December 11, 2017.8 The purpose of the working meeting was to exchange opinions on the challenges and development perspectives of the transport and logistics system in Georgia; based on the discussion, the BEC prepared the agenda and identified the content of the keynote speakers’ speeches for the PPD scheduled for December 25, 2017, at the Parliament. Nineteen participants attended the workshop from the private sector, CSOs, and academia, including the Association of Freight Forwarders of Georgia (AFFG), Anaklia City, Transport Corridor Research Center, Hub Georgia, Trans Caucasus Logistics, TSU, TSU Analysis and Forecast Center, Georgian Post, DHL, and TNT/FedEx. Based on the discussion, the BEC drafted the PPD agenda9 and identified seven keynote speakers for PPD to share the private sector’s perspective with MPs. 2. The brief policy paper, Transport and Logistics in Georgia: Main Challenges and Development Perspectives, was delivered and sent to the targeted MPs on December 22, 2017, to ensure well-informed participation of MPs in the dialogue. The policy paper was prepared based on research conducted by G4G and other studies and analyses existing in the relevant area, as well as on the results of the expert and stakeholder workshop. The paper addressed the following topics: transit function, geoeconomic context and international positioning of Georgia, the overview of the transport and logistics system in Georgia, ongoing and planned
8 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10154990723206078. 9 Parliament of Georgia, Press release and agenda, PPD on Transport and Logistics in Georgia: Main Challenges and Development Perspectives, December 25, 2017, http://www.parliament.ge/ge/saparlamento-saqmianoba/komitetebi/dargobrivi-ekonomikisa-da- ekonomikuri-politikis-komiteti/anonsi/25-dekemberi- anonsi20171.page?fbclid=IwAR12JYCj4o8VYt7RHNEVlRttU8vNajDorXmH99Pq33lpfLdZ7PGZJKYvahs.
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transport sector development projects in Georgia, main problems of transport and logistics system in Georgia, and stakeholders’ opinions and possible solutions. 3. The BEC, together with the Sector Economy and Economic Policy Committee of the Parliament of Georgia, ordanized the PPD on Transport and Logistics in Georgia: Main Challenges and Development Perspectives, held on December 25, 2017.10 The purpose of the event was to (1) analyze Georgia’s transit potential to improve the competitiveness of the country, for effective integration in the modern world economy, and (2) develop the relevant policy recommendations and legislative solutions for transport and logistics development in Georgia, with active involvement of interest groups. The PPD was chaired by the chairman of the Sector Economy and Economic Policy Committee of the Parliament of Georgia, Roman Kakulia, and the executive director of the BEC, Natia Katsiashvili. The event was attended by 43 participants from the public and private sectors, civil society, and academia, including: The Parliament of Georgia; G4G; Georgian Railway; Anaklia Development Consortium; Transport Corridor Research Center (TCRC); Hub Georgia; AFFG; Trans Caucasus Logistics; CaucasTransExpress; Globalink, Wilhelmsen Ships Service Georgia; Georgian Post; DHL; TNT/FedEx; TSU; and TSU Analysis and Forecast Centre. Opening remarks were delivered by Roman Kakulia, Natia Katsiashvili, and Natalia Beruashvili. Roman Kakulia discussed the reasons for choosing “Transport and Logistics” as the subject for the BEC’s dialogue format and underlined the importance of studying and analyzing Georgia’s transit potential and development of the transport and logistics system, to improve the competitiveness of the country and effectively integrate into the modern world economy. “Our main challenge is to maintain consistency for all of our initiatives. We want our activities to be more systematic and ensure that our priorities are in compliance with the legislative initiatives. If we say that our priorities are Georgia’s transit function, the challenges associated with it, turning Georgia into a logistical hub and its further integration with international logistics centers, this topic should be a priority for the Government and our legislative initiatives,” Kakulia said. In his appreciation speech for the PPD organizers, the chairman of the The Sector Economy and Economic Policy Committee emphasized the importance of further development of the PPD tradition established at the Parliament of Georgia with the support of USAID’s G4G project and in cooperation with the BEC and enhancement of the supervisory function of the Parliament of Georgia: “I think we are today at the stage when in case of correct coordination the following will be achieved: consequence, identification of all the main challenges that may exist, and finding ways to resolve those challenges in order to fulfill our function successfully… For this purpose and taking into consideration that it is impossible to ensure successful and effective decision-making without engagement of all target groups and intensive consultations with them, we want to improve the tradition in the Parliament of Georgia and focus on several key issues next year, which will be outlined at the meeting,” Kakulia said, with hope that cooperation would continue in the future. Natalia Beruashvili introduced the G4G project objectives to the participants and overviewed G4G and BEC efforts to develop a paper on the potential of Georgia’s transit corridor. “The dialogue platform between the Parliament of Georgia and business is the important platform supported by us, within which several discussions have already been held, and today’s meeting is also being held within the mentioned platform. The study carried out within our project will enable us to better understand the challenges and perspectives and important steps to be taken towards this direction,” she noted and underlined the main factors required for realizing this potential and successfully completing the main ongoing projects in the country. Natia Katsiashvili emphasized the importance of fruitful cooperation with the Committee on Sector Economy and Economic Policy and active engagement of the parties. “As you know, BEC’s independent platform for legislative dialogue was established in the Parliament of Georgia in 2004 with the support of the European Commission, although the success and activity of this platform depends, on the one hand, on the active involvement of MPs in the platform activities and, on the other hand, the active involvement of the private sector. Therefore, we are happy that after this platform has become more active with the support of the USAID G4G, engagement of both parties in our activities is higher, and consequently, the activities are always efficient and effective,” she said. Katsiashvili also talked about the proposal for joint work of the committee for the enhancement of Georgia’s competitiveness, thanked the donor for
10 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10155108821341078.
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supporting this process, introduced the Standard Note to the MPs, and expressed hope that the dialogue would make a significant contribution to responding challenges in the field of transport and logistics. Irakli Danelia presented the geoeconomic context and international positioning of Georgia. He discussed Georgia as a new geoeconomic center between Europe and Asia, Russia, and the Middle East, and reviewed the growing interest in this center, both in the regional and international arenas, as well as advantages and disadvantages of competitive transit corridors. “Even though consignments have recently become significantly active in the so-called transit corridor ‘New Silk Road,’ the potential capacity of the corridor has not yet been fully utilized. The full realization of this potential is closely related to the efficient solution of the institutional, structural and strategic issues due to which the transit corridor ‘New Silk Road’ is less competitive compared to alternative corridors,” he said. To illustrate Georgia’s international positioning, he widely reviewed the World Economic Forum (WEF) Global Competitiveness Index and Georgia’s ranking indicators compared with other countries. He also reviewed the WB’s Logistics Provision Index (LPI) and the dynamics of Georgia’s points in its main criteria (customs, infrastructure, international shipments, logistics competence and quality, tracking and tracing, and timeliness). According to the expert’s assessment: “Favorable geographical location allows Georgia to perform a key function in the transit corridor, to ensure deeper integration of its transport and logistics system into international logistics systems, thus contributing to the overall economic development of the country. However, there is no specific action plan, which will ensure implementation of priorities determined by the state strategy and there are no relevant public agencies responsible for specific strategic directions.” The expert stressed the topicality of the dialogue format: “It is important to ensure that Georgia’s transit function is well understood by the public and private sectors and the public policy on a number of issues is developed as a result of reconciliation of opinions,” Danelia said. The PPD included two panels—Panel I: Transport and Logistics System in Georgia: Current Situation and Development Perspectives, and Panel II: Main Challenges of Transport and Logistics in Georgia and Possible Solutions. Findings of the USAID G4G Competitiveness Analysis of the Caucasus Transit Corridor were presented by the G4G customs and trade adviser, Bondo Bolkvadze. He provided a detailed review of the role and importance of the transit corridor, results of the corridor capacity analysis, alternative routes, uncertain/problematic corridor rings, and critical factors, among them tracking problems in the so-called cargo management, the problem of improving confidence toward the corridor, and the need to optimize transportation time. The speaker also presented a list of activities to be implemented to enhance the competitiveness of the corridor, including improvement of professional skills and raising awareness of the individuals employed in the transport and logistics system, and, “besides pure transportation service,” the opportunities for the creation of additional value/additional services by the Georgian side with regards to goods in transit. Development prospects of the Georgian Railway were presented by the head of the marketing division of the Georgian Railway, Rati Devadze. He reviewed Georgia’s transit potential and the role of Georgian Railway in the “New Silk Road” within Chinese president Xi Jinping’s “One Belt, One Road” initiative, discussed Georgia’s middle corridor route (China – Kazakhstan – Caspian Sea – Azerbaijan – Georgia – European Countries), and emphasized the growing interest of the Chinese side in this corridor. The speaker focused on the advantages of the middle corridor compared with the peculiarities of the three northern corridors, such as the shorter distance and less time. Devadze also reviewed the south-west route, established with the participation of Iran-Georgia-Azerbaijan-Ukraine-Polish Railways. He talked about the opportunities of attracting cargo from Mumbai Port, India, and highlighted the challenges in these directions and the active engagement of Georgian Railway to overcome challenges. Lawmakers David Chichinadze, Levan Gogichaishvili, Nino Tsilosani, and Revaz Arveladze underlined the importance of the information the speakers shared and asked questions about foreign policy threats to the development of the sector, the transit policy of the neighboring countries, Turkey’s competitive advantages, opportunities to develop transit potential in terms of Abkhazia, deadlines and expected specific outcomes of the planned projects, reforms of the Georgian Railway, and the strategy to secure the country from wrong decisions made by certain actors (such as railways) in the transport sector, which will help us avoid losing cargo. Taking into consideration the current competition, the interests of the intraregional and international players, and the external threats—as well as unfavorable positioning of Georgia in international rankings and unfavorable situation regarding field experts’ competence in Georgia—Chichinadze expressed “skeptical expectations” for the perspectives of port development in Georgia and opportunities for attracting cargo and noted that the aforementioned factors “do not provide the grounds for optimism.” Gogichaishvili also stressed the importance of the risks related to external threats and political conflicts. He agreed with Chichinadze, who mentioned the need for an in-depth study of external factors, transit
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policies of neighboring countries, the potential of ongoing projects in Georgia by experts, and sharing those results with legislators. Danelia, Bolkvadze, and Devadze provided detailed answers to the questions MPs. A decisive competitive advantage of Georgia compared with the neighboring countries was underlined—that Georgia is an open and small economy with flexible legislation. The director of the Anaklia Development Consortium, Levan Akhvlediani, presented the general plan and vision to develop the Anaklia Deep Sea Port. He discussed Georgia’s transit potential, which is confirmed by multiple studies by the Anaklia Development Consortium and stipulates volumetric investments. To illustrate the potential of Georgia, he emphasized the interest of China and investments made by it in the development of the alternative transport corridor with Europe. “China has moved their accent to the Middle Corridor and is heading in this direction,” he said, which, in his opinion, is important for balancing Russia’s interests. Therefore, he presented the existing foreign political context as an opportunity rather than a threat to Georgia. Akhvlediani introduced the history of elaboration of the Anaklia Port project and development vision to the PPD participants. He reviewed the perspectives of attracting cargo by Anaklia Port in comparison with conditions of competing ports and also taking into consideration the volume of China-Europe trade and container carriage, and the expected impact of the port on the economy of Georgia. Meanwhile, he underlined the need to develop other infrastructure—railway, road infrastructure, and soft infrastructure—in conjunction. “This potential cannot be utilized without infrastructure development; the approach ‘cargo first and then infrastructure’ does not work in this area. We should develop infrastructure to show the main actors that we are an effective, transparent, trustworthy, and attractive party/partner,” he said. Lawmakers Zurab Chiaberashvili and Roman Gotsiridze underlined the strategic importance of the deep-sea port for Georgia and asked questions regarding Anaklia Port development; in particular, the feasibility of attracting investments within the planned time frame, the impact of competition between the Poti Port and the Anaklia Port, and the government’s role in the development of Anaklia Port. Akhvlediani provided detailed answers to the legislators’ questions and noted that the majority of the investment required for construction of the port has been acquired. In addition, negotiations with IFIs to apply for a loan are to be finalized in the near future. He also discussed the peculiarity of Poti Port and Batumi Port as competitors, as well as the main details of the GoG’s participation and agreement in the development of Anaklia. Nino Papachashvili, assoicate professor of international economics at TSU, presented the “New Silk Road” as the focus of international scientific discussions and challenges of Georgia. She emphasized the problem of Georgia’s recognition and noted that very little is mentioned about Georgia in large-scale scientific studies of the “Silk Road.” Therefore, the professor underlined the importance of resolving the problem of promoting Georgia and provided several proposals with this regard, namely using economic attachés of Georgia and supporting Georgian academic circles to present reports on the international arena. Papachashvili also discussed the perspectives of partnership with China and agreed with the point mentioned by Akhvlediani, that China is interested in an alternate transport corridor. She noted that “we should cling to the idea of development of this alternative route and focus on less time factor and just in time cargo transportation.” She also emphasized the importance of focusing on cumulative investments to ensure that “Georgia does not stay a transit hub and it becomes an economic hub in the future.” She stressed the need to develop a unified electronic platform to improve coordination and cooperation, where comprehensive information about the middle corridor actors, opportunities, and services will be collected. Beka Natsvlishvili, MP, underlined Papachashvili’s “remarkable report, which threw light on many issues and comprehensively showed the disputable issue.” He also emphasized the importance of cumulative investments and cargoes, the creation of a “chain of other values” with cargo handling, and improving cooperation. Paata Tsagareishvili, the founder of the Transport Corridor Research Centre, presented perspectives of attracting cargo through the transport corridor crossing Georgia. Tsagareishvili underlined the efforts for development of Georgia’s Transport Policy Document and Action Plan made in 2014-2015 with the support of ADB, which failed. “A kind of scrap paper was developed as a summary of experts’ opinions that do not offer anything specific, for example, in relation to the opportunities, sources, and volume … despite the fact that the country paid $750,000 for this paper; nowadays, we have no strategy for the development of the field,” the expert stated. He reviewed the strategic planning practices of Kazakhstan, Ukraine, Azerbaijan, and the Baltic States for this area and highlighted the necessity of developing a transport strategy for Georgia to ensure economic development of the country. He reviewed cargo handling data and tendencies in the ports of the Black Sea basin countries, railroad transportation data, and tendencies of corridor countries and underlined the fact of significant loss of consignments in
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Georgia. He also noted that changes in the railway policy, including tariffs, do not have significant impacts on the process and increase the state participation in bilateral and multilateral formats of negotiators. “The engagement of the government must be increased in the bilateral or multilateral formats of negotiations. I think that negotiations on cargo should be carried more in a country-to-country format to attract strategic cargo,” he said. The expert also discussed the necessity of creating additional capacities for ferry transportation, the importance of reversal cargo through the China – Europe – China route, and the role of a competitive tariff policy for shipping oil products. The expert emphasized the ineffectiveness of Transport Corridor Europe Caucasus Asia Initiative (TRACECA) performance and underlined the possibility of Georgia effectively using existing institutional mechanisms. The expert presented the shortcomings of the transport corridor infrastructure crossing Georgia and said, “It is important to ensure that the increase in the attraction of cargo and infrastructure development is a coincidental process.” He summarized the activities to increase the competitiveness of the transport corridor crossing Georgia, among them to “revise unfulfilled commitments related to attracting cargoes to the ports of Georgia and arranging infrastructure under the agreement, provide a detailed review of the current transport paper, and determine the reasonability of drafting a law on transit promotion.” The executive director of Hub Georgia, Vaso Urushadze, presented perspectives of the transport and logistics hub in Georgia. He focused on the “fundamental problem, which is the source of many challenges,” in particular, institutional and administrative problems and uncoordinated transport policy. “There is no political official responsible for the unified transport policy in Georgia. Even the Ministry of Transportation of Georgia has no strategic development vision for the transport sector and an action plan,’‘ he stated. He widely reviewed the problems related to the functioning and coordination of the MoESD and the Ministry of Regional Development and Infrastructure of Georgia (MRDI). He also presented a detailed vision of the elimination of these institutional and administrative problems. The speaker underlined the importance of multimodal development of the Georgian transport system and noted that it is equally important not only to give the rail and marine transport a development policy, but also aviation, road, and pipeline transport. Moreover, “it’s important to know what we want: to be the only transport corridor handling cargo, or do we also want to be a regional transport and logistics hub?” he asked. Urushadze and Giorgi Kodua, HUB Georgia board member, discussed development potential and perspectives of Georgia as a regional hub and presented a comprehensive vision of achieving this goal, including the necessity of reform of Georgian Railway and the opportunities and importance of developing Georgian aviation. Urushadze concluded that “if the state interest exists, if the goal—to become a regional transport and logistics hub—is a priority at the governmental level, we will be able to eliminate problems existing in the field.” The manager of AFFG, Zurab Shengelia, presented the peculiarities of taxation of nonresident taxpayers engaged in international transportation business and issues related to customs procedures. He named the main challenges for the freight forwarders, including the practice of taxing nonresident taxpayers, decrease in efficiency of the registration economic zones, and hoped that AFFG would have an opportunity to discuss these problems in detail in the format of a working meeting with the committee. The director of TNT/FedEx, Nino Menteshashvili, presented prospects for development of postal logistics centers and the regulatory environment. She agreed with the concept of development of Georgia as a regional hub. She discussed development perspectives for mail and logistics centers, peculiarities of competitiveness of the Georgian Post with the rest of the sector players, and underlined the necessity of establishing a stable institutional environment. As a result of the PPD, at the initiative of the committee, the following steps were agreed upon: To develop a joint action plan for the committee and the BEC with the support of the latter, to determine the further process of PPD development and plan a series of PPDs on transport and logistics in order to make relevant policy decisions, to develop a package of the relevant legislative amendments to successfully overcome the challenges of Georgia’s transportation and logistics potential, and to promote the development of the transport and logistics system.
LEGISLATIVE PLATFORM ON PENSION REFORM
The legislative platform on pension reform was established, and the activities of the platform were arranged in cooperation with the Healthcare and Social Issues Committee of Parliament. The BEC performed the following activities within the grant activity on the selected policy issue:
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1. The BEC held the expert and stakeholder workshop “The Draft Law of Georgia on Accumulative Pensions: Pros and Cons,” on February 9, 2018.11 The purpose of the meeting was to exchange opinions on the draft law of Georgia on accumulative pensions and discuss argued policy issues prior to the Parliamentary hearings of the draft law. Based on the discussion, prepare the brief policy paper, agenda, and identify the content of the keynote speakers’ speeches for the PPD, scheduled for February 16, 2017, at the Parliament of Georgia. Twenty-one participants attended the workshop from the private sector, civil society, and academia, including AmCham, BAG, GEA, ISET-PI, Georgian Stock Exchange, Aldagi, Galt & Taggart, Policy and Management Consulting Group (PMCG), KPMG, European Business Association (EBA), TBC, Swiss Cooperation Office in Tbilisi, Georgian Trade Unions Confederation (GTUC), TSU, Ilia State University, Transparency International Georgia (TIG), and Georgian Young Lawyers' Association (GYLA). Based on the discussion, the PPD agenda12 was drafted and six keynote speakers for the PPD were identified to share the private sector’s perspective with MPs. 2. The brief policy paper The Draft Law of Georgia on Accumulative Pensions: Pros and Cons, was delivered and sent to the targeted MPs on February 13, 2018, to ensure well-informed participation of MPs in the dialogue. The policy paper was prepared based on main policy solutions/regulations analysis envisaged by the draft law on accumulative pensions, as well as on the analysis of the best international practices on targeted policy issue, public attitudes survey, research reports, and results of the expert and stakeholder workshop. The paper addressed the following topics: Current demographic situation and necessity of the adoption of the law on accumulative pensions, overview of general trends and international best practices, survey findings on public attitudes toward the pension reform in Georgia, overview of regulations envisaged by the draft law on accumulative pensions, stakeholders’ opinions, and suggested recommendations. 3. The PPD on the Draft Law of Georgia on Accumulative Pensions: Pros and Cons was held on February 16, 2018, organized by BEC together with and hosted by the Healthcare and Social Issues and the Budget and Finance Committees of the Parliament of Georgia, in coordination with the MoESD.13 The purpose of the event was to (1) discuss pros and cons of the draft law of Georgia on accumulative pensions, and (2) come to an agreement on the major components of the proposed pension savings framework, as well as to enhance MPs’ more informed participation and involvement while adopting the legislative package on the reform. The PPD was co-chaired and the discussion was moderated by the chairman of the Healthcare and Social Issues Committee, Akaki Zoidze, and the chairman of the Budget and Finance Committee, Irakli Kovzanadze. Seventy-five participants attended the event from the public and private sectors, civil society, and academia, including Parliament of Georgia; G4G; MoESD; MoF; Ministry of Labor, Health and Social affairs (MoHLSA); NBG; International Monetary Fund (IMF); WB; ADB; United Nations Development Programme (UNDP); GEA; ISET-PI; Aldagi; Galt & Taggart; PMCG; KPMG; EBA; TBC; GTUC; TSU; TIG; GYLA; AmCham; Bank of Georgia (BOG); Ilia State University; and New Economic School – Georgia. Akaki Zoidze, Irakli Kovzanadze, Natalia Beruashvili, and Natia Katsiashvili delivered opening remarks. Akaki Zoidze emphasized the importance of organizing the PPD on the main institutional decisions regarding the pension reform. He also reviewed the ongoing process at the Parliament of Georgia related to the draft law of Georgia on pension reform and mentioned that the committee hearings would be scheduled taking into consideration the ongoing PPD results. “In essence, the reform has economic and financial significance and meanwhile it has a huge social responsibility. Therefore, if we want to develop a sustainable pension model, so-called ‘Second Pillar’ had no alternative. But how should an accumulative pension system be arranged? How should the elements be combined, to reduce risks and ensure safe investments and balanced inflation outcomes? We will discuss all these issues today with a broad range of stakeholders, which will help us to identify our position regarding the draft law,” said Zoidze.
11 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10155139771886078. 12 Parliament of Georgia, Agenda, PPD on the Draft Law of Georgia on Pension Savings: Pros and Cons, February 16, 2018, http://www.parliament.ge/uploads/other/85/85811.pdf. 13 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10155140005161078.
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Irakli Kovzanadze underlined the importance of the ongoing pension reform for Georgia. “I think it’s a vital reform. Taking into consideration the demographic and economic situation in the country, it is crucial to carry out the pension reform. The adoption of this draft law, implementation of a proper accumulative pension scheme will be an important step in terms of the financial reform to be implemented in Georgia,” he said. Meanwhile, he stressed the importance of successful international experience and taking into consideration successful or unsuccessful examples of pension reform in the process of review or implementation of the reform and underlined the necessity of provision of correct information to the population. “I think that the society is less informed and does not understand the importance of the reform. Therefore, the population has so many questions regarding the reform. I also have a lot of questions about the financial model, and I hope we will answer these questions jointly in the process of dialogue that starts today. I want to thank the PPD organizers because this process begins with such engagement of the society,” the chairman of the Committee noted. Natalia Beruashvili discussed the importance of the Parliamentary PPD platform and highlighted the BEC’s expertise in PPD: “It is very important that the BEC organizes the PPD on the basis of the British methodology, which includes cooperation with all stakeholders and experts, preparation of analytical materials and holding an informed discussion on the basis of it.‘’ Beruashvili also talked about topics and results of the previous discussions. “Many interesting ideas are generated as a result of the aforementioned discussions. It is also important that different opinions are heard and taken into consideration, which serves as the basis for determination of objective reality,” she said. Natia Katsiashvili shared information about BEC pension reform activities implemented since 2016 with participants. She also discussed BEC’s PPD platform methodology and principles based on 40 years of international experience. She presented the Standard Note the BEC developed based on the methodology about the reform, which includes experts’ position papers and references to research papers developed by interest groups. “Members of Parliament often express their need and willingness to conduct similar PPDs on important draft laws and not only on economic reforms. Unfortunately, our resources are limited, although the legislatures’ interest is still important for us and therefore, we do our best to stay active beyond the project. I would like to thank the USAID G4G who assisted us in the restoration and strengthening of this dialogue platform in the Parliament and our partner committees for productive cooperation and their openness,” Katsiashvili said. The deputy minister of economy and sustainable development of Georgia, Ekaterine Mikabadze, presented the draft law of Georgia on accumulative pensions. Head of the Institute of Social Studies and Analysis, Iago Kachkachishvili, presented the survey findings of the public attitudes toward the pension reform in Georgia. Ekaterine Mikabadze reviewed the regulations provided for the draft law on accumulative pensions and conceptual issues of the reforn—in particular, the need for pension reform, the scope of the reform, the definition of the “pension scheme participant” and “procedure of enrollment in the scheme,” the amount of pension contributions, and the process of making the contributions; administration of contributions, the structure of the Pension Agency; the model of investing pension assets envisaged by the draft law, and procedures and conditions of granting pensions. “Pension reform is a major reform in Georgia’s reality. The economy of Georgia is ready to implement this reform today,” Mikabadze summarized, and expressed her readiness for the discussion and responding to all questions. Iago Kachkachihvili discussed the public perception survey and methodology and underlined several key findings, including the following: . Low level of awareness of the population on the ongoing pension reform. . Understanding the need for change in the existing pension system. He noted that “at least half (54.2 percent) of the respondents think that the current pension system requires fundamental changes and a significant part of the respondents (41.1 percent) support certain amendments.” . Positive attitude toward the accumulative pension fund. He noted that “respondents, in general, expressed a positive attitude to the reformist idea, that besides basic pensions funded from the state budget there should be an accumulative pension fund that will give citizens the opportunity to accumulate certain amount of money to provide their own pensions (38.4 percent totally agree, 23.7 percent agrees more (almost one-quarter), [and] one-fifth of respondents are against it, among them 12.1 percent are categorically against it).’’ According to the survey, the majority of Georgian citizens think that participation in the accumulative pension scheme should be voluntary. “Majority of the respondents (64.4 percent) who are not categorically against the accumulative pension fund (88 percent) agree with the idea of voluntary participation in the accumulative pension scheme. The compromise option, which includes mandatory
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participation in the accumulative pension scheme for people up to 40 years and voluntary participation for people over 40, is supported only by a small portion of respondents (9.2 percent)”, he said. Opinions of public and private stakeholders were presented by Archil Bakuradze, chairman of the BEC, chairman of the supervisory board of MFO Crystal; Francois Painchaud, IMF resident representative in Georgia; Joseph Melitauri, acting head of the regional office of the WB; Nikoloz Gagua, deputy minister of finance of Georgia; Archil Mestvirishvili, vice governor of the NBG; Giorgi Paresishvili, CEO of Georgian Stock Exchange; Irakli Kirtava, general director of Galt & Taggart; Aleksi Aleksishvili, chairman of the board and CEO at Policy and Management Consulting Group (PMCG); Irakli Petriashvili, chairman of the Georgian Trade Union Confederation; and Devi Khechinashvili, president of the Georgian Insurance Association. Archil Bakuradze, a financial product consumer, highlighted the importance of the pension reform for improving the financial market in the country and the increasing the level of financial literacy among the population. He generally assessed the introduction of a retirement savings tool in the society: “People need different savings and investment tools, although the developer, the supplier or the regulator of this product has the responsibility to create the environment where consumer rights will be protected. Consumers of financial products will benefit from this reform. The fact that we do not have a wealthy country, we have a low-income population, we have no strong institutions does not make a ground for refusal to the reform. We should look forward and move forward,” he said. Francois Painchaud expressed the IMF’s support for pension reform in Georgia and evaluated the expected positive consequences of the reform on the country’s economy: ‘’First, as you know, Georgia has a large current account deficit, which reflects a difference between savings and investments. So, by supporting the domestic savings pension reform could help reduce external vulnerabilities by reducing the current account deficit. The second reason why we support pension reform is that over time it will increase the replacement rate and so it will help future retirees to maintain income levels and standards of living. Third, pension reform could help develop the local capital market. It will enhance the role of pension funds as institutional investors increasing the demand for long-term Lari instruments and promote access to long-term Lari financing for businesses. The development of long-term Lari instruments could also reduce dollarization in the economy making the economy more resilient to exchange rate fluctuations. Fourth, pension reform will help diversify savings of Georgians, so in addition to bank deposits and real estate, Georgians will now have easier access to other savings instruments such as domestic and foreign corporate bonds and equity as well as government bonds. And in a more diversified portfolio of instruments for investment could make retirement savings more resilient to shocks including from housing market shocks. Fifth, the low private retirement savings could generate pressure for higher public spending on basic pension in the future; supporting private retirement savings may reduce future fiscal risks. But it will be critical to the pension system to build a strong reputation and credibility over time. If the benefits are perceived as uncertain and the contribution is perhaps seen as taxes rather than savings because it is a saving scheme, this could negatively affect pension contributions but as well to labor market outcomes.’’ Joseph Melitauri expressed the WB’s full support for pension reform and stated the readiness of the WB to assist the GoG to successfully implement the reform. Nikoloz Gagua evaluated pension reform as one of the most important and large-scale reforms in the history of Georgia and discussed its goals and expected outcomes, including the importance of a multipillar system for achieving dignity pension and a replacement ratio close to international standards “where all these pillars strengthen and complement each other and do not present alternatives for each other.” Gagua also emphasized the fact that the GoG understood the challenges and risks for the reform: “When we are evaluating this reform positively, we should not imagine that we do not understand the risks and the challenges for this reform. Because it is a large-scale reform, challenges are quite large and there are many questions, for example, how reliable will the investing process be? We can discuss all these details additionally and give answers to all questions to ensure that the system is not associated with losses and the investment process is effective and well regulated. Moreover, it is crucial to ensure that the reform is well understood and the population involved in the system considers pension contributions as savings and guarantee for social protection and not as a tax, which will likely largely depend on us—the government. The population survey also suggests that and today’s dialogue also serves this purpose.” Archil Mestvirishvili expressed the NBG‘s support for pension reform, “which is important from the macroeconomic perspective as well as in terms of the capital market development.” “The reform is complex. However, the most important principle that investing should be based on the best interests of the pension scheme participants is envisaged by the law. We were fully involved in drafting the law in this direction, and it is noteworthy that all main remarks regarding the draft law made by the National Bank of Georgia are reflected in the draft law.” Mestvirishvili also discussed the procedure of making investment
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decisions by the investment board and the role of the GoG and the NBG in this process. Moreover, he emphasized the importance of proper assessment of the transparency and risks in this process and expressed his hope that “the investment board will be staffed with individuals with high confidence and international experience.” Giorgi Faresishvili expressed full support of the reform on behalf of capital market participants, “who are vitally interested in the implementation of pension reform in the country because we all agree that this will directly promote the development of the capital market. Access to the capital is the main challenge for the Georgian economy,” he said. He also discussed the need for pension reform taking into consideration social factors such as negative demographic trends and injustice of the current pension system. While discussing the advantages of the proposed reform, he focused on a small amount of a pension contribution, the benefits offered by the reform and the mandatory nature of the system as “the world practice has shown that voluntary accumulation system has not worked anywhere. The second pillar does not work if contributions are voluntary; on the other hand, there is no carefree old age in the country where there is no second pillar.” He also emphasized the “low savings culture” in Georgia. Irakli Kirtava expressed general support for the reform and congratulated the PPD participants with “the first discussion of pension reform at the Parliament.” He positively assessed the results of the survey presented by Kachkachishvili and discussed the problem of the lack of awareness amongst the population. “The reform that has enormous importance should have an awareness component. We must not discuss serious issues without taking into consideration analytics, international practice and public awareness. Everyone will be afraid of entering into the dark room,” he said, and stressed the necessity of providing comprehensive information to the population and interest groups. The speaker also noted that one report published by the Pension Agency once a year was not enough and suggested to increase the accountability of the agency to provide the public with information about activities of the Pension Agency. Aleksi Aleksishvili discussed potential negative consequences of pension reform. He reviewed high economic, fiscal, and political risks, from which it is not reasonable to implement the proposed pension reform, including the fact that Georgia is a poor country, the population’s dislike of the compulsory accumulative pension scheme, and the old-fashioned compulsory accumulative model, cycling economy, and crisis periods. He also reviewed negative examples from international experience (Poland and Hungary) where the aforementioned scheme failed. He mentioned the developed countries where compulsory pension schemes are not implemented (United States, Japan, Switzerland, Germany, Singapore, and Hong Kong) and urged the decision-makers to take international experience into consideration and ensure that economic calculations are provided by an independent expert to ensure more public as well as government trust. Irakli Petriashvili expressed his support for the reform despite different views on a number of issues concerning the trade union and noted that a compromise for the concept of the reform was made between the GoG and the trade union, including the obligation to make pension contributions as well as the opportunities for self-employed individuals to engage in the scheme. Also, he underlined the verbal agreement with the GoG regarding indexation of basic pension and talked about the need to involve representatives of employees and employers in the pension fund board, named as a precondition for increasing confidence in the pension fund. Devi Khechinashvili highlighted the prospects of participation of private insurance companies in the proposed pension scheme: “Today the Government of Georgia has recognized that it is good to save, savings should be promoted, and it has a great stimulus for this purpose. But we must not introduce a model that will expel private businesses operating for 20 years from the scene,” he mentioned. He also recommended to allow citizens to choose in which pension scheme to enroll and where to make their contributions—pension funds of private companies or the Pension Agency and to ensure that “other procedures and framework, including in terms of investment” proposed by the model are similar in both cases to avoid discrimination of private schemes. Legislators and representatives of the NGO and academic circles participating in the PPD expressed their views and asked questions regarding the regulations under the reform, specifically: Zurab Chiaberashvili, MP agreed with Aleksishvili’s critical assessments and emphasized the choice of the majority of the population to have a voluntary pension scheme, also the need for the analytical data for the reform: “We know that the Government of Georgia ordered an RIA for this draft law that has not been publicized. We wonder what are the grounds for the government’s evaluation that this reform will be successful? In addition to the general description of the draft law, RIA or more detailed analysis should be submitted to evaluate the risks associated with the reform,” the legislator said.
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. Roman Gotsiridze, MP, fully agreed with Aleksishvili’s opinion: “Our faction will not support the draft law. The main remark is that the scheme will not work because contributions are very small—maximum 6 percent, and a pension received from these contributions will be very low,” he mentioned. However, he provided several recommendations: Encourage citizens with annual income of more than 60,000 GEL to participate in the pension scheme; provide citizens with the opportunity to choose between private funds and the Pension Agency; and to promote the development of private pension funds. . Beka Natsvlishvili, MP, stressed the importance of the ongoing discussion and expressed his support for pension reform: “We are having a very important discussion today, and we should think about amending the Constitution based on the issues raised today because it’s a necessary reform,” he said. However, he emphasized a number of problematic issues: The difficulty to identify the work performed by a large number of self-employed and the impossibility of their enrollment in the pension scheme, taking into consideration the principle of solidarity together with fairness. However, he also stressed the necessity of compulsory pension contributions. . Gia Jandieri, vice president of the New Economic School Georgia, focused on the following issues: the nature of a compulsory pension contribution as a “tax,” “seizing the choice from the citizens to decide what to do in the future,” and the “disputable right” of the government—to carry out “risky activities in an open market.” He mentioned that there was no need to introduce the proposed model, and that there was no public and political consensus on the reform that would, therefore, be sufficient to “launch the third pillar of the pension system.” . Sophie Charelli, parliamentary secretary of GYLA, gave special thanks to the PPD organizers and underlined the need for the implementation of reforms to increase social pensions. She also emphasized the legal aspects of the proposed model, in particular the nature of a compulsory pension contribution as a “tax” and noncompliance with Article 94 of the Constitution. Also, she stressed the need for the existence of the risk management mechanism for “unsuccessful activities” of the persons who will be responsible for the investment activities. Giorgi Papava, associate professor of economics at Ilia State University, stressed that “the reform is hasty” because there was no assessment of economic benefits of the reform. He considered the policy of maintaining the status quo as one of the alternatives: “In a 15-year perspective in case of planned 5 percent economic growth, which will increase real GDP by 80 percent, the current pay-as-you-go system will be enough to support pensioners increased by 30 percent and will not create significant fiscal problems. Therefore, there is no need to start implementation of the reform today,” he said. He also considered an increase in the level of financial literacy of the population as one of the alternatives, “to encourage and not force the people to make savings.” Nikoloz Gagua, Akaki Zoidze, and Marina Guledan answered the questions. Zoidze asked the speakers who made critical speeches to offer alternative models besides criticism. Marina Guledani, the BEC expert in pension reform, emphasized several important factors influencing the success of the reform: (1) “Taking into consideration the accumulation culture, the level of financial literacy of the population, and economies of scale in Georgia. The scheme will not work if it is not compulsory due to the fact that it is crucial to accumulate critical mass of the financial resources, which is needed to be effectively invested. It is noteworthy that the voluntary private accumulation scheme has not worked so far;” (2) the investment process should be managed by experts who should “make all efforts to” protect the interests of the scheme’s participants; and (3) subsidizing investment services for the individuals with higher than average income—above 60,000 GEL, will not be fair. Also, “if the accumulative pension scheme works well and becomes sustainable, the circle of the recipients of the social pension may be limited to only a vulnerable category,” Guledani said. Gagua provided comprehensive answers to the critical views of all the speakers and asked the PPD participants to share additional questions in writing. He reviewed the results of economic calculations conducted by the MoESD. He mentioned that the third pillar reform and social pension indexation mechanism are being developed and these issues will also be discussed through dialogue with the private sector. He emphasized the importance of timely implementation of the capital market reform. Meanwhile, he evaluated the RIA performance standards conducted by ISET-PI as incompatible with the requirements of the ministry. However, Maka Chitanava, senior researcher at the Energy and Environment Policy Research Center of ISET-PI, emphasized the unconvincing critics of the RIA quality criteria prepared by ISET-PI and noted that it meets all the accepted standards of the RIA. “Today, everyone has had an opportunity for input and to express their opinions, and I think that the authors of the reform, as well as the PPD organizers, answered all questions. Certain obstacles to the draft law are revealed, but today’s event will enable us to take into consideration certain opinions and
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improve the draft law. Leading and compulsory conclusion committees will actively participate in this process,” Irakli Kovzanadze summarized.
LEGISLATIVE PLATFORM ON WATER RESOURCE MANAGEMENT
The legislative platform on water resource management was established, and the activities of the platform were arranged in cooperation with the Environmental Protection and Natural Resources Committee of the Parliament of Georgia. BEC performed the following activities within the grant activity on the selected policy issue: 1. The public discussion “Draft Law of Georgia on Water Resources Management” was held by BEC on September 5, 2018, in collaboration with MEPA and EIEC.14 The purpose of the discussion was to exchange opinions on the draft law of Georgia on water resource management in order to resolve all argued policy issues prior to the draft reform package being presented for the Parliamentary hearings; and based on the discussion to prepare the brief policy paper, agenda, and identify the content of the keynote speakers’ speeches for the PPD scheduled on September 18, 2018, at the Parliament of Georgia. The public discussion was attended by 59 participants from the public and private sectors, CSOs, and academia, including G4G, MEPA, EIEC, ISET, World Experience for Georgia (WEG), Georgian Water and Power (GWP), CENN, TSU, Rustavi Metallurgical Plant, Ilia State University, Georgian Technical University (GTU), Centre of Earth Study, MRDI, Tbilisi City Hall, Georgian National Energy and Water Supply Regulatory Commission (GNERC), Ministry of Internal Affairs of Georgia (MIA), Ministry of Foreign Affairs of Georgia (MFA), National Center for Disease Control and Public Health (NCDC), EVEX, and Greens Movement of Georgia. Based on the discussion, the PPD agenda15 was drafted, and seven keynote speakers for the PPD were identified to share stakeholders’ perspectives with MPs. 2. The brief policy paper, The Draft Law of Georgia on Water Resources Management, was delivered and sent to the targeted MPs on September 12, 2018, to ensure informed participation of MPs in the dialogue. The policy paper was prepared based on policy solutions/regulations analysis envisaged by the draft law on water resource management, as well as on the analysis of the priorities envisaged by EU directives on water resources management framework and RIA recommendations on the targeted policy issue, stakeholder research reports, and results of the public discussion. The paper addressed the following topics: Georgian context, existing legislative framework on water resource management and importance of the regulatory system reform in Georgia, priorities envisaged by EU directives on water resource management framework, overview of regulations envisaged by the draft law on water resource management, and stakeholders’ opinions and recommendations. 3. The PPD on the draft law on water resource management was held on September 18, 2018, organized by BEC in cooperation with the Environmental Protection and Natural Resources Committee of the Parliament of Georgia, and in coordination with MEPA.16 The purpose of the event was to (1) discuss the draft law of Georgia on water resource management, and (2) come to an agreement on the major institutional decisions and regulatory norms of the proposed water resource management framework, and enhance more informed participation and involvement of MPs while adopting the legislative package. The PPD was moderated by the chairman of the Environmental Protection and Natural Resources Committee, Kakhaber Kuchava. Fifty participants attended the event from the public and private sectors, civil society, and academia, including Parliament of Georgia, MEPA, USAID/Georgia, G4G, ISET- PI, WEG, GNERC, IDFI, GWP, TSU, GTU, GFA, Trans Electrica Georgia, Georgian Renewable Energy
14 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10155601827696078. 15 Parliament of Georgia, Agenda, PPD on the Draft Law on Water Resources Management, September 18, 2018, http://www.parliament.ge/uploads/other/102/102196.pdf. 16 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10155602850236078.
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Development Association (GREDA), Greens Movement of Georgia, Georgia’s Environmental Outlook, Engurhesi, Efess Georgia/Natakhtari, and Georgian Farmers’ Association. Opening remarks were presented by Kakhaber Kuchava; Veronica Lee, director of the Office of Economic Growth, USAID/Georgia; and Natia Katsiashvili, executive Director of the BEC. Kakhaber Kuchava emphasized the importance of dialogue in terms of making key institutional decisions related to the reform and thanked the PPD organizers. He also underlined a great significance of activities implemented by USAID/Georgia, including the support provided for implementation of economic reforms. Kuchava also stressed the importance of the need for the implementation of the water resources management reform in accordance with international standards and the support for the rational use of water resources and expressed the readiness of the government and the Parliament to ensure that transparency standards are adhered to in institutional decision-making process. “For the first time, we gathered in this format to begin public discussions on the important issue of water resources management. The Parliament of Georgia pays a great deal of attention at involving all the stakeholders in discussions of such draft laws and we’ll be very open to your remarks and suggestions in order to adopt a law that will enable us to manage one of our greatest treasures—water—more rationally and efficiently in order to avoid the damage that, unfortunately, was caused during the past decades,” Kuchava stated. Veronica Lee underlined Georgia’s loaded package of reforms to be implemented under the EU - Georgia association agreement (EU-Georgia AA), and wished participants successful and fruitful dialogue in the decision-making process for economic reforms: ‘’I have been here for four years coming right after the signing the association agreement and at that time I was shocked at the tremendous tasks that Georgia had to approximate to the very strict standards of the European Union, especially environmental regulations. I want to say congratulations to all of you who have come this far. It is to your credit, the government of Georgia, civil society and the private sector, who have helped to already advanced reforms in such a short time. I trust that the deadlines that you are talking about will be met. Georgia right now because of the association agreement sits at the crossroads. You have the opportunity not only to take on the tremendous tasks of approximating but also do it in a way that is consultative, transparent and brings all stakeholders together. The events like this PPD show how the approximation process and economic reform process can and should continue in the future.” Natia Katsiashvili highlighted the complexity of the reform and the potential effects of the reform on the broad spectrum of interest groups. Consequently, she emphasized the importance of active and constructive participation of stakeholders in the policy development process and the key role of the Parliament in the development of such participation platform and the implementation of PPD: “The analysis of current status confirms that the water resources management system of Georgia doesn’t provide sustainable and efficient management of water resources and the involvement of the public in the process. Problems are complex and relate to a number of sectors, stakeholders and enterprises. Parliament is the place where the inclusive and participatory PPD should be held to discuss the new draft law on water resources management.” Nino Tandilashvili, deputy minister at MEPA, presented the draft law of Georgia on water resource management. She introduced the regulations envisaged by the draft law to the attendees. The speaker reviewed the applicable water resource management laws and problems in Georgia, including issues such as water pollution and inefficient use of water resources. “Most of the legal norms are currently purely nominal, and the issues related to water resource management and usage are not regulated. The law of Georgia on water mainly envisages only aspects of surface waters (water quality, pollution prevention) and the issues related to the state of underground water and coastal waters are not regulated,” the deputy minister noted. She indicated the need to implement the reform. This obligation is also envisaged under the EU-Georgia AA. The speaker reviewed the EU directives in this regard and discussed the objectives of the new draft law and main innovations offered under it such as the division of the competences of the authorized bodies; establishment of the basin management system; prioritization of water use; and restoration of the permit system and restoration of fees. The deputy minister underlined the “paid use of natural resources” and “polluter pays” principles and also reviewed the final outcomes of the planned reform and its benefits for the state, the population, the business sector, including the reduction of risks of degradation of water objects caused by incorrect planning; provision of conditions for safe water consumption by the population; prevention of conflicts related to water use between sectors and water consumers and ensuring the legally protected rights of entrepreneurs for use of water. “Eventually all these activities will be implemented to improve the qualitative characteristics of our surface waters and most importantly, ensure the rational use of water,” Tandilashvili said. Levan Pavlenishvili, deputy head of the Energy and Environment Policy Research Center, ISET-PI, introduced the results of the RIA on the draft law on water resource management developed within the USAID G4G project. Pavlenishvili reviewed the current problem, including legal and institutional gaps, and
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reviewed and compared different alternatives of public policy. The researcher presented a qualitative assessment of the impact of the reform, in particular: Results of the assessment of economic, social, and environmental impacts, impact on the labor market, and impact on SMEs for the proposed regulation. He also presented the results of cost-benefit analysis and multicriteria analysis and research conclusion that total net profit is higher than other alternatives for the proposed reform. The overall economic cost of the reform is significantly higher than expected expenses. “In any case, this reform should be implemented because the Georgian law must comply with the draft water directive. According to the proposed option of the reform, the expenses to be incurred by the government and private sector are far less than the benefit of the reform for the society. Therefore, we can say that the reform has been positively assessed,” Pavlenishvili concluded. The legislators asked questions regarding the RIA methodology and the implementation of regulations within the reform, including the opportunities of water quality improvement; the volume of financial resources needed for the implementation of the reform; and the presence of the mentioned resource in the state budget according to the established terms. The legislators also expressed their interest to receive comprehensive and detailed information about the RIA developed for the reform. Nino Chkhobadze, chairman of Green Movement of Georgia – Friends of the Earth, emphasized the importance of the regulation of the land of the Water State Fund and stressed the significance of “integrated resource management,” which includes not only water resources but also land/soil resources, and underlined the need to clarify the definition of the draft laws on “common water use” and “commercial water use.” Khatuna Gogoladze, founder of GEO, underlined the importance and necessity of holding the current PPD. She mentioned the need for timely adoption of the reform and stressed the importance of protection of the water consumers’ rights. She also recommended the author of the draft law to separate groundwater and surface water regulations. Levan Vepkhvadze, chairman of GREDA, emphasized the importance of protecting private sector interests in the process of reform development to prevent further problems. “Business is very vulnerable to similar types of regulations if these regulations worsen their condition. It is very important to implement the permit system and classify rivers in order to know where specific waters can be extracted but on the other hand, as a business representative we think that we should be careful to ensure that new types of regulations do not hinder existing businesses, do not make the existing hydropower plant operation expensive and do not set up additional barriers to new hydropower plants during the project implementation,’’ he said. Vepkhvadze wanted to learn if the MoESD was involved in the reform development process and asked questions about the calculation of water consumption charge and the RIA methodology. Also, he stressed the importance of secondary legislation: “The draft law does not yet show what effects new regulations will have on the existing hydropower plants,” he said. Consequently, it is no less important for business operators how subordinate normative acts adopted after laws will affect business entities, including hydro-power plants”. David Mirtskhulava, professor and energy expert at Trans Electrica Georgia, agreed with the previous speakers’ recommendations. Moreover, he underlined the importance of the availability of and adherence to safety standards for construction of hydropower plants and the need to envisage regulation of the issuance of integrated water use permits in the draft law to allow private consumers to obtain integrated water permits to ensure both water use and irrigation for different types of activities. Giorgi Tskhadadze, CEO of GWP, presented the activities and water resources utilized by the company and assessed the most important novelties envisaged by the draft law, such as the introduction of the basin management principle and creation and determination of sanitary protection zones. He made the following recommendations to the legislators to improve the draft law: . Article 13—Differentiate between the use of underground water safe to drink self-extracted by the entrepreneurial entity for production purposes and the use of groundwater safe to drink by the water supply operator; . Resolution of the government of Georgia No. 431 as of August 20, 2018 (“Technical Regulations on Discharging and Acceptance of Waste Waters in the Sewage System and Maximum Permissible Concentrations of Harmful Substances”), should be maintained or be reflected in the new normative act. Tskhadadze also discussed economic mechanisms for sustainable use and protection of water, including the water bill, envisaged by Article 39 of the draft law, and underlined issues related to the increase of water consumption tariffs and the consequently worsening socioeconomic background. He also
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emphasized the importance of timely delivery of information on specific terms for adoption and implementation of the subordinate acts to businesses during the implementation of the reform. Nicholoz Khundzakishvili, corporate affairs director at Natakhtari, discussed a modern water treatment facility used by the company. He stressed the need for the government to support (for example, in the form of “green loan”’) companies who decide to install water treatment plants in accordance with modern standards. He also offered the legislators a tour to see the water treatment plant in the company. David Narmania, commissioner at GNERC, presented the position of the independent regulatory body. GNERC supported implementation of the reform and expressed readiness to participate in the reform implementation process to ensure that the cost of consumed water resources is at a reasonable tariff level set by the regulatory body. Nino Tandilashvili responded to the questions asked by the attendees via a summary report and expressed her readiness and willingness to continue further cooperation with the PPD participants to ensure that all disputable regulations are specified before the draft law is initiated in the Parliament. In response to Khundzakishvili’s offer, Katsiashvili provided information about BEC’s new program— Company Attachments for MPs, which includes sector-based visits of MPs to private companies to get familiarized with the peculiarities of different sectors and business operations. She offered the private sector representatives to implement the first activity of this program, including a visit to Natakhtari. Kuchava and Khundzakishvili approved the mentioned initiative and agreed on its implementation for 2019.
LEGISLATIVE PLATFORM ON ENERGY POLICY
The legislative platform on energy policy was established, and the activities of the platform were arranged in cooperation with the Sector Economy and Economic Policy Committee of the Parliament of Georgia. The BEC performed the following activities within the grant activity on the selected policy issue: 1. The expert and stakeholder workshop “The Draft Law of Georgia on Energy” was held by BEC on October 19, 2018, in collaboration with GNERC.17 The purpose of the event was to have a detailed discussion on the concept of the energy reform in Georgia; to exchange opinions between the experts, stakeholders, and regulatory body representatives on main deliverables of the reform; and to ensure a transparent, effective, and coherent legislative framework; and based on the discussion, to prepare an agenda for the keynote speakers of the PPD. The workshop was attended by 40 participants from the public and private sectors, civil society, and academia, including USAID Energy Program, G4G, World Bank (WB), GNERC, Greens Movement of Georgia, Socar Energy Georgia, Energo-Pro Georgia, Galt & Taggart, European Bank for Reconstruction and Development (EBRD), Electricity Market Operator (ESCO), Gross Energy Group, Georgian Oil and Gaz Corporation (GOGC), Telasi, Georgian State Electrosystem (GSE), Georgian Industrial Group (GIG), Gas Transportation Company, SGI Frontier Capital, GREDA, and Clean Energy Group. Based on the discussion, the PPD agenda18 was drafted, and five keynote speakers for PPD were identified, to share the private sector’s perspective with MPs. 2. The brief policy paper, The Draft Law of Georgia on Energy and the Stakeholders’ Opinions, was delivered and sent to the targeted MPs on October 17, 2018, to ensure informed participation of MPs in the dialogue. The policy paper was prepared based on the analysis of the policy solutions/regulations envisaged by the draft law of Georgia on energy, as well as on the analysis of the priorities envisaged by EU directives on energy and results of the expert and stakeholder workshop. The paper addressed the following topics: Georgian context; existing legislative framework on energy and importance of the regulatory system reform in Georgia; priorities envisaged by EU directives on energy framework; overview of regulations envisaged by the draft law on energy; and stakeholders’ opinions and recommendations.
17 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10155697038456078. 18 Parliament of Georgia, Agenda, PPD on the Draft Law of Georgia on Energy, October 23, 2018, http://www.parliament.ge/uploads/other/104/104556.pdf.
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3. The PPD on the Draft Law of Georgia on Energy was held on October 23, 2018, organized by the BEC in cooperation with Sector Economy and Economic Policy Committee of the Parliament of Georgia and the MoESD.19 The purpose of the event was to (1) discuss the draft law of Georgia on energy, and (2) come to an agreement on the institutional decisions and regulatory norms of the proposed energy framework and enhance more informed participation and involvement of MPs while adopting the legislative package on the reform. The chair of the Sector Economy and Economic Policy Committee, Roman Kakulia, moderated the PPD. The event was attended by 80 participants from the public and private sectors, civil society, and academia, including Parliament of Georgia, MoESD, GNERC, USAID/Georgia, G4G, USAID Energy Program, World Bank, BAG, AmCham, EBA, Greens Movement of Georgia, Socar Energy Georgia, Energo-Pro Georgia, Galt & Taggart, EBRD, ESCO, Gross Energy Group, GOGC, Telasi, GSE, GIG, Gas Transportation Company, SGI Frontier Capital, GREDA, Clean Energy Group, Trans Electrica Georgia, and WEG. Roman Kakulia; Revaz Arveladze, deputy chair of the Sector Economy and Economic Policy Committee of the Parliament; Veronica Lee; and Natia Katsiashvili, executive director of BEC, delivered the opening remarks. Roman Kakulia emphasized the importance of organizing the PPD on energy reform and long-term institutional visions: “The purpose of today’s meeting is to ensure a comprehensive legislative process, which includes the highest level of engagement of stakeholders before the draft law is submitted to the Parliament. The format of such representative dialogue is a way to implement the aforementioned level of engagement, and we would like to thank the USAID G4G and BEC for organizing today’s meeting. The participation of BEC experts and researchers in this process and elaboration of a research paper was also crucial.” Kakulia informed the participants of the establishment of a Scientific Advisory Council working on energy issues within the committee, asked the PPD participants to provide written feedback and proposals to the committee, and announced the decision to continue PPD on problematic issues raised as a result of the ongoing dialogue in the format of the Scientific Advisory Council. Revaz Arveladze thanked USAID and the EU delegation representations, European energy community, international organizations, and donors for their theoretical and practical assistance provided to Georgia for energy sector development and underlined the importance of PPD at the prelegislative stage: “I think it is very important that the discussion of the draft law in the Parliament begins right now before it is officially submitted by the government. This will allow the MPs, staff of the Parliament of Georgia to thoroughly familiarize with it, critically review it and prepare questions, suggestions, and proposals within their competence,” Arveladze mentioned. Also, he discussed the institutional decisions taken in the energy sector after Georgia gained its independence. He listed sector management problems, evaluated the importance of the reform, and highlighted the importance of a qualified decision-making process at the stage of reform implementation. Veronica Lee discussed the progress achieved in organizing PPDs on institutional reforms in Georgia and evaluated institutional changes implemented in Georgia’s energy sector as successful examples of reform at the international level: ‘’Thank you for having me at this PPD. This is an exceptional opportunity for me to be here and I think it is also a wonderful opportunity to bring all of the stakeholders in the room together and hear all of the concerns, all of the changes, all of the impacts of this new law. USAID has been working with the energy sector in Georgia for about 25 years. We have provided about a billion dollars assistance to Georgia much of which has been gone to the energy sector. USAID’s new focus for assistance throughout the world is about helping countries to commit to their development journey.” Natia Katsiahvili discussed the significance of stakeholders’ cooperation with the PPD platform and thanked the MoESD and private sector for active engagement at the PPD planning and implementation stages: “We try to provide more opportunities for interest groups to be actively engaged in the process of policy development, and for the legislators—in order to be the real leaders of the process not only at the stage of discussion of the initiated law, but also at the stages of the development of key public policy areas and the draft law. I think that after today’s meeting where all interest groups are presented, the draft law will be more comprehensive, and as a result of this joint effort, the law will be more effective to be enforced. However, the text and work are quite volumetric. Of course, we as always confirm our readiness to assist the committee in organizing further discussions or focused dialogues, “Katsiashvili said. Also, she provided information about the RIA on ETM presentation, planned in the near future with the help of the BEC at the Parliament of Georgia.
19 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10155707860531078.
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Giorgi Chikovani, CEO of GEDF, and former deputy minister of economy and sustainable development, and Irina Milorava, chair of GNERC, presented the draft law of Georgia on energy. Chikovani and Milorava introduced the regulations envisaged by the draft law on energy to the attendees and highlighted the great importance of the ongoing dialogue for all the actors. The speakers reviewed the obligations to harmonize the domestic law with relevant EU directives and regulations. They discussed the perspectives of energy sector development, the importance of effective and transparent market structure in this area, and reviewed the process of drafting the law. They also discussed the goals of the reform and main principles provided for in the draft reform in accordance with the EU Third Energy Package directives, including energy market tools, market openness and tariff regulation, target segment protection tools, differentiation of transmission and distribution activities, and strengthening the functions of the regulatory commission. Milorava also provided lawmakers and other PPD participants with information on further steps to adopt the law, in particular: (1) development of a market concept; (2) establishment of organized markets; (3) adoption of relevant subordinate acts; and (4) deepening cooperation with international partners to share experience. Legislators Levan Koberidze, Davit Chichinadze, Tamar Khulordava, and Revaz Arveladze asked questions about the following issues: current tariff policy; potential impact of the reform on the consumer tariffs and the environment; the readiness of the government for opening the market and the steps to be taken in this area; the level of readiness of the sector to implement institutional decisions within the reform; the need to increase the powers of the Competition Agency of Georgia in the energy sector; protection of safety standards in the process of construction of hydro-power plants; and envisioning safety requirements in the draft law. Milorava and Chikovani provided detailed answers to the questions asked by the lawmakers. They concurred on a number of issues, including tariff policy, safety standards, and agreed to conduct additional PPDs. Opinions of private stakeholders and CSOs were presented by Murman Margvelashvili, director of WEG, BEC’s expert in energy policy; Nikoloz Giligashvili, legal manager of the JSC ENERGO-PRO Georgia; Levan Vephkvadze, chairman of GREDA, CEO of the Georgian International Energy Corporation (GIEC); David Mirtskhulava, professor, energy expert at Trans Electrica Georgia; and Mariam Valishvili, adviser of SOCAR Energy Georgia, and former deputy minister of energy of Georgia. David Mirtskhulava stressed the importance of Georgia’s energy security and noted that “Due to the fact that this reform will shape Georgia’s development for many years, its political and geopolitical situation, ecological and institutional problems and infrastructure should be taken into consideration in the whole draft law, almost in all articles, chapters and in any decision and when selecting a market model, its possible risks should be taken into account.’’ He also underlined the generation facility security issue, talked about potential threats, and stressed the importance of setting technical safety norms and the introduction of early warning systems in practice. Murman Margvelashvili emphasized the need for the reform and the importance of the ongoing dialogue. “I am very glad we have had the business discussion today because we should have started it a long time ago. It is very nice that we are raising the issues today addressed in papers and discussed for many years. For example, are the government intervention and the prices and tariffs agreed under the memorandums signed with the hydro-power plants the most optimal? Also, long-term agreements concluded with foreign companies—an agreement signed with Telasi, SOCAR raise a lot of questions because they are not transparent and we have no access to the texts of the agreements. It should be noted that when tenders are not transparent, the trade is not competitive and the interests of the parties are not transparent, prices and tariffs may be higher than in case of the transparent process,” Margvelashvili noted. The expert agreed with Revaz Arveladze’s proposal to make the general name of the draft law more specific because the law does not concern the entire energy sector. He also introduced the proposal for an addendum to the draft law to the attendees, in particular, the definition of “energy poverty” should be added to Article 7 (2) (Energy Policy) of the draft law, and it should determine the government’s responsibility to elaborate the strategy for the elimination of energy poverty. The expert also talked widely about the necessity of using such a dialogue format in the further decision-making process: “A number of specific, essential decisions should be made, including the ones on the market model, on the compliance of memorandums and long-term agreements with the new market principles. However, the workshop of the experts and interest groups held within this project has suggested that there is a lack of information, there is no ongoing active discussion and opinions and views are not exchanged that would have led us to adopt this law within the set timeframe. Adoption of the law is not self-aim. If the market participants are not involved in the decision-making process to ensure that the decisions are implementable, the law would lead us to the worst results,” Margvelashvili stated.
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Nikoloz Giligashvili, as a representative of a European subsidiary company, expressed support of ENERGO-PRO Georgia for the sector’s reform and harmonization of the national legislation with European regulations. He discussed the regulations for ENERGO-PRO Georgia about generation as well distribution and electricity sales and underlined the importance for setting a reasonable timeframe for implementation of regulations to ensure that the company does not have a limited time to fulfill its commitments undertaken under the law and to predict additional investments. He also expressed his hope that further process of policy development would also be so participatory and the company would be actively involved in this process. Levan Vepkhvadze discussed the necessity of the reform from the perspective of GIEC and GREDA. He emphasized the lack of a “correct market price” in the country, which is “a signal for investors, and determines the activity or inactivity of investments.” He discussed the peculiarity of tariffs of subsidized thermal power plants and regulated hydro-power plants compared to other generation facilities, flaws in current subsidy policy, the tendency towards an increase in energy consumption and its causes. He stressed the need for more generation facilities; however, he also underlined the difficulty to predict a return on investment for investors. Consequently, he mentioned that it was more crucial to adopt market rules and develop a long-term governmental vision of the market model than the discussed draft law and hoped that the ongoing dialogue on these issues would continue “to avoid deadlocks when we have a law, but we do not have investments. If we do not have investments, we will not have generation facilities. Therefore, it is crucial for investors to see what the government is going to do in respect of secondary legislation.” Mariam Valishvili underlined the topicality of the discussion against the background of ongoing sector development. The speaker expressed “skeptical expectations‘” for perfect competition in the gas supply market in Georgia because currently only Azerbaijan supplies gas to Georgia and “Georgia will not have many alternative natural gas suppliers in the near future due to its geographical location.” She discussed peculiarities of SOCAR Energy Georgia’s operations in terms of supply as well as the distribution of natural gas and noted that the draft law did not restrict traditional business opportunities for the SOCAR Group companies; therefore, SOCAR would very actively participate in sales—at wholesale and retail levels, as well as distribution. Other representatives of interest groups expressed their opinions about the novelties envisaged by the draft law and the current process: . Vakhtan Zarkua, chairman of the Energy Efficiency Foundation, asked a question about the need for more generation facilities and evaluated the proposed procedure for the selection of the GNERC members. He thinks that the GoG should not participate in the GNERC member selection process to ensure that the decisions are made independently by the regulatory authority. . Temur Chichinadze, energy expert, underlined the nonfulfillment of obligations by companies and stressed the importance of consumers’ rights in parallel with the protection of the interests of investors. . David Chipashvili, representative of Green Alternative, emphasized the need for timely sharing of the completed final draft law to enable field experts and interest groups to timely develop and submit proposals to the Parliament of Georgia. Roman Kakulia, Irina Milorava, Giorgi Chikovani, and David Chikhradze, head of the Energy Reforms and Projects Department of the MoESD, answered questions asked by the attendees. The authors of the draft law and the chair of the Committee on Sector Economy and Economic Policy expressed their readiness and willingness to continue further cooperation with the PPD participants to clarify all controversial regulations in the reform draft before the draft law is initiated in the Parliament of Georgia. “We are facing many different challenges today, but first of all, we need to identify the problems and recognize what we are dealing with. Otherwise we cannot take any effective steps forward. The current tendencies in Turkey regarding energy make it essential for us to have a long-term strategy because all climate and political changes that appear on the horizon are directly linked to the decisions we need to make with a long-term vision. All of these should be properly reflected into the forthcoming law on energy, and this was the main purpose for today’s meeting,” Kakulia summarized.
LEGISLATIVE PLATFORM ON E-COMMERCE REFORM
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The legislative platform on e-commerce reform was established, and the activities of the platform were arranged in cooperation with the Sector Economy and Economic Policy Committee of the Parliament of Georgia. The BEC performed the following activities within the grant activity on the selected policy issue: 1. The expert and stakeholder workshop “The Law of Georgia on E-commerce” was held by BEC on December 12, 2018, in coordination with the MoESD.20 The purpose of the event was to discuss the reform on e-commerce market regulation; to exchange opinions between the experts, stakeholders, and regulatory body representatives on main deliverables of the reform to ensure a transparent, effective and coherent legislative framework; and based on the discussion to prepare the agenda of the Parliamentary PPD and identify keynote speakers. The workshop was attended by 29 participants from the public and private sectors, civil society, and academia, including G4G; Georgian National Communications Commission (GNCC), EU delegation to Georgia, Data Exchange Agency, Silknet, Geocell, Personal Data Protection Inspector (PDPI), Small and Medium Telecom Operations Association of Georgia (TOA), MFO Crystal, Akhali Kselebi, My.ge, Amazon Export Hub, allmarket.ge, BOG, ITDC, Competition Agency, Sakpatenti, and AmCham. Based on the discussion, the PPD agenda21 was drafted, and five keynote speakers for the PPD were identified to share stakeholders’ perspectives with MPs. 2. The brief policy paper The Draft Law of Georgia on E-Commerce and the Stakeholders Opinions was delivered and sent to the targeted MPs on December 18, 2018, to ensure well-informed participation of MPs in the dialogue. The policy paper was prepared based on the analysis of the main policy solutions/regulations envisaged by the draft law of Georgia on e-commerce, as well as on the analysis of the priorities envisaged by EU directives on e-commerce and results of the expert and stakeholder workshop. The paper addressed the following topics: concept on the e-commerce reform in Georgia, Georgian context, existing legislative framework for e-commerce regulation, necessities of the draft law, priorities envisaged by EU directives on e-commerce framework, main deliverables of the reform, and stakeholders’ opinions and recommendations. 3. The PPD on the Draft Law of Georgia on E-Commerce was held on December 20, 2018, organized by BEC together with and hosted by the Sector Economy and Economic Policy Committee of the Parliament of Georgia, in coordination with the MoESD.22 The purpose of the event was to discuss e- commerce market reform together with MPs as well as executive government representatives. The event also aimed to come to an agreement on the major institutional decisions and regulatory norms of the proposed draft law on e-commerce and to enhance more informed participation and involvement of MPs while adopting the legislative package. The chair of the Sector Economy and Economic Policy Committee, Roman Kakulia, and the executive director of the BEC, Natia Katsiashvili, moderated the PPD. Fifty-six participants from the public and private sectors, civil society, and academia attended, including the Parliament of Georgia; MoESD; G4G, GNCC; Parliamentary Budget Office; Competition Agency; Data Exchange Agency; NBG; BAG; Sakpatenti; MFO Cristal/akido.ge; TNT/FedEx; Magticom; GIPA; Georgian Post; TOA; and Office of the Business Ombudsman. Opening remarks were presented by Roman Kakulia, Natalia Beruashvili, and Eka Kubusidze, head of the Communications, Information, and Modern Technologies Department of the MoESD. Roman Kakulia talked about the role of BEC in the process of preparation of the ongoing PPD and emphasized the importance of active cooperation of the MoESD in the process, broad engagement of interest groups in the PPD before initiating the draft law in the Parliament of Georgia, and the importance of “joint understanding” of the main provisions of the reform “to ensure preliminary review of problematic issues and informed decisions of MPs.” Natalia Beruashvili discussed the PPDs held by BEC within the G4G project at the Parliament of Georgia. Beruashvili discussed the process of the reform concept development and the involvement of a foreign expert. She highlighted the main directions of the reform concept, such as protection of consumer
20 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10155770528396078. 21 Parliament of Georgia, Agenda, PPD on the Draft Law of Georgia on E-Commerce, December 20, 2018, http://www.parliament.ge/uploads/other/107/107801.pdf. 22 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10155783143816078.
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rights in the field of e-commerce in parallel to the field’s development. She also underlined the commitment undertaken by Georgia under the EU-Georgia AA to determine the legal basis for e- commerce and principles of regulation. Eka Kubusidze underlined the importance of improvement of e-commerce regulatory norms for the Ministry. She emphasized the EU directive on electronic commerce in the internal market and discussed the main goals of the draft law to protect consumer rights and to determine the rights and responsibilities of the interim service providers (ISP). Tamar Buadze, GoG capacity strengthening component lead at USAID G4G, and Malkhaz Nikolaishvili, performance data advisor at USAID G4G, presented the draft law of Georgia on e-Commerce. Buadze provided a detailed review of the process of drafting the law, the situation regarding the regulation of e-commerce in Georgia, and the importance of adopting this draft law for the field’s development. She reviewed the following: the main goals and scope of the draft law, practices in EU countries concerning field regulation as well as the title of the law, and the criteria/requirements that must be satisfied by any service considered as e-commerce. Nikolaishvili introduced the scope of regulation of the draft law on the examples of specific services (Amazon, Google, YouTube) to the PPD participants. He also discussed the exceptions that do not belong to e-commerce such as TV broadcasting. Moreover, he stressed the role of the practice of the EU Court of Justice in determining precedents following the emergence of new services. He discussed the intermediary services and provided specific examples such as information conduit and caching and hosting services. He explained the responsibilities of ISPs and cases when they are exempt from liabilities. He also discussed the administrative sanctions and responsibilities of the competent regulatory authority provided for by the draft law in case of violation of the law. The committee members, Zurab Chiaberashvili, Levan Koberidze, Revaz Arveladze, and other PPD participants (Nino Chokheli, deputy chief of party at USAID G4G, and Irakli Sharabidze, representative of Magticom), asked questions regarding the regulations provided for by the reform, in particular, the following: Clarification of the scope of regulation of the draft law by giving practical examples (e.g., Can advertisements on personal blogs or online services [online lecture, online manual] provided by the university as LEPL be considered e-commerce? Will public services be covered under the scope of regulation of the draft law? Will the activities regulated by the specific laws (e.g., banking services, internet banking) be exempt from the scope of regulation of this law? Why was it decided to adopt a separate law? Why was not it considered reasonable to make relevant amendments to certain laws (taking into consideration that the EU directive does not oblige Georgia to adopt a separate law)? Did the Ministry discuss the opportunity for scattering e-commerce regulations among the applicable laws and what was the opinion of the USAID expert regarding this issue? The question was also asked about the difficulties in enforcing the law, such as responding to to illegal content delivery by hosting services. Eka Kubusidze, Tamar Buadze, Malkhaz Nikolashvili, and Manana Pruidze, acting chairperson of the National Intellectual Property Center of Georgia - Sakpatenti, answered the questions asked by MPs and other interest groups. Also, by giving specific examples, they explained the scope of regulation of the law on e-commerce and three main criteria—“upon individual request,” “in return for payment,” and “remote” —which should be met by services to be considered as e-commerce. Also, they explained the international legislative practices (including examples of Estonia, Latvia, and Lithuania) to justify the need for drafting the law, which supports adoption of a separate law to regulate the field. They discussed e- commerce as a rapidly growing and volumetric field, the difficulty in scattering e-commerce regulations among applicable laws in terms of complicated legislative techniques, and also inefficiency of this decision. They emphasized the advantages of a separate law, namely clear understanding of the united regulatory norms; encouragement of the field development; effective protection of consumers’ rights; effective online copyright protection; adequate stipulation of ISP’s rights and responsibilities due to the fact that it was impossible to harmonically integrate rights; and responsibilities in this segment in any of the applicable law. It was also noted that the USAID expert also recommended adoption of a separate law for the regulation of the field; however, it was underlined that all unregulated E-commerce relationships should have been regulated at the legislation level regardless of the legislature’s decision in terms of legislative techniques. The opinions of private stakeholders and CSOs were presented by Zviad Gabisonia, professor and BEC’s expert on e-commerce, CEO of Shota Rustaveli National Science Foundation; Ucha Seturi, Small and Medium Telecom Operations Association of Georgia; Ekaterine Chakhrakia, representative of the Georgian National Communications Commission; Manana Pruidze; and Nikoloz Gagnidze, chairman of the DEA.
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Manana Pruidze discussed “the difficult situation in Georgia in terms of infringement of intellectual property rights on the Internet, which is so obvious that it annuls all the positive tendencies in other areas.” She discussed the commitments undertaken by Georgia in this regard and the legislative initiative developed by Sakpatenti. Also, she underlined the fact that the draft law on intellectual property rights protection on the Internet is bound to and should be followed after the law on e-commerce. She also mentioned that the lack of an effective regulatory framework for the protection of these rights makes it difficult to ensure the protection of these rights because long-term judicial disputes are frequent. Therefore, she emphasized the importance of timely adoption of the law on e-commerce. Pruidze also explained the proven mechanisms for enforcement of the law on e-commerce and peculiarity of the response to illegal content distribution. However, taking the questions asked into consideration, she stressed the need for additional consultations about the goals of the draft law and its enforcement mechanisms with the private sector, which will ensure prevention of potential complications in the enforcement of the law. Zviad Gabisonia supported the name of the law and the decision to adopt a separate independent law considering several arguments: “E-commerce is a huge regulation sphere worldwide and not only in the European Union. This area is growing annually, and it requires regulation. Also, the world agrees that Internet and e-commerce law is already an independent branch of law and requires separate regulations … Therefore, it is necessary to have law on e-commerce in Georgia!” he mentioned. He also proposed for the PPD participants to shift administrative offenses and penalties/chapters of the draft law to the Code of Administrative Offenses Georgia. Ucha Setur underlined the special need and importance of the law on the Georgian market from the perspective of small and medium telecommunication operators to ensure that all rights and responsibilities of all actors of the market are clear and guaranteed by the law and ISPs are exempt from responsibility. He shared the experience of the United States—the flagship country in regulating this field, emphasized the importance of self-regulation by the business actors, and offered the PPD participants the next topic related to the law for discussion—“Ensure more free space in the law for the players of the market for self- regulation.” In addition, the speaker agreed with Pruidze’s point regarding the need for additional consultations with the private sector to improve the draft law and highlighted the necessity to adopt e- commerce regulations as a separate law “due to the fact that it is a big, different, step forward, for the development of the Georgian online market and everyone’s benefit—customers, providers, or service providers,” he summarized. Ekaterine Chakhrakia emphasized the importance of the draft law and highlighted the regulation of communication service providers under the regulator’s competence. “It is principally important for us to ensure that the aforementioned draft law is clear and predictable. Our position is to determine clearly what kind of services the law applies to, especially when the EU directive on electronic commerce allows it. However, a list of services may not be comprehensive,” the speaker mentioned. Nikoloz Gagnidze introduced a different position of the agency regarding the adoption of a separate law on e-commerce. He drew parallels with the health care and education regulatory acts and noted that there was no need for adoption of a separate law to regulate e-health and e-education. Therefore, in the speaker’s opinion, it would be more reasonable to reflect e-commerce regulatory norms in the applicable laws. In case of a separate law, he proposed to add a preamble to the draft law clearly stating its purpose and scope. Sophio Momtsemlidze, representative of the Competition Agency of Georgia, also emphasized the need to further specify the regulations envisaged by the draft law with the involvement of the Competition Agency of Georgia due to the fact that according to the reform concept, the Competition Agency of Georgia will exercise control of the fulfillment of the obligations assumed under the law. Mariam Chokhonelidze, representative of MFO Crystal/Akido.ge, explained: “It is important for our company and generally for all businesses areas to adopt this law because whole world, including Georgia, is moving in this direction. This law sets quite good standards for regulation of e-commerce or a number of important issues related to the Internet, and most importantly, with fewer restrictions.” The Ministry, as the author of the draft law, the committee, and BEC as organizers of the PPD, expressed their readiness and willingness to continue the PPD process. Moreover, Kakulia asked the PPD participants to provide written recommendations to BEC or the committee for further review of the draft law before initiating it in Parliament of Georgia.
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APPENDIX D – STAKEHOLDERS’ PERSPECTIVES ON THE PPD PLATFORM
MPs and stakeholder representatives attending the PPD activities emphasized the importance of the Parliamentary PPD and positively evaluated the grant activity as well as the quality of performance of BEC: Irakli Kobakhidze, chairman of the Parliament of Georgia, at the launch ceremony of the Parliamentary PPD platform: “The project helps us implement one of the most important priorities— economic reforms, and I would like to note that the project will facilitate capacity building of the Parliament, which is one of our primary tasks. The first phase of the project [establishing PPD platform in Parliament, 2016] was very successful. The project covered various directions, including improvement of skills of MPs and Staff members and encouragement of cooperation between MPs and private sector representatives. The new project aims to continue this process, and I believe that the second phase will be successful as well. The project will ensure informed dialogue between the parties for an effective legislative process.” Kakhaber Kuchava, chairman of the Environmental Protection and Natural Resources Committee, at the launch ceremony of the Parliamentary PPD platform: ‘’If we consider ambitious and result- oriented plans of the government, we will realize the importance to understand the companies, to hear their voice. I would like to thank the organizers of the platform as it is the guarantee to ensure the result we strive for—a strong economy and rapid development. There are lots of issues to be further developed. Before the adoption of any of the laws, we shall have the correct communication with the private sector with all the players able to engage. The ninth term will be intensively participating in this activity to achieve the outlined goal.’’ Mikheil Sarjveladze, deputy minister of Justice of Georgia, at the PPD on Insolvency Reform: “Today, opinions will be exchanged through a very important and timely format, which will, of course, serve as a guarantee for proper development of the reform and achieving goals as a result of the implementation of this reform. I should mention that a broad representation is a precondition for the legislature to see all possible prospects to ensure comprehensive, fair legislation that equally protects interests, which is the overall purpose of the insolvency law. Therefore, I don't think it would be exaggerating to say that conducting a meeting in such a format is no less important than any other activity.” Roman Kakulia, chairman of the Sector Economy and Economic Policy Committee, at the PPD on Transport and Logistics: “The dialogue was very important and valuable because competent and experienced input is a major influence in the lawmaking process. One thing is clear, and once again I became convinced that generally deadlines for the review of legislative acts in parliament should be extended because the current deadlines do not respond to today's challenges in terms of the quality of private sector engagement. Our legislative practice and culture need to be improved greatly. We have heard the word 'engagement' for many years but many efforts have not been made for its implementation, and this should be acknowledged. BEC’s PPD is a clear example of this because it is very good cooperation and engagement format." Vaso Urushadze, executive director of Hub Georgia, at the PPD on Transport and Logistics: "We welcome the fact that such an important dialogue is dedicated to the field, such as transport and logistics." Akaki Zoidze, chairman of the Healthcare and Social Issues Committee, at the PPD on Pension Reform: "Today we are having a very important discussion in a PPD format. It is an excellent tradition that was started by the USAID G4G and BEC. Such PPDs are organized on a number of important reforms. Today this event is attended by a majority of the interest groups, for whom the planned reform is vital. Today we, Members of Parliament, will listen what the authors of the draft law, as well as their opponents and supporters, think about the problematic issues and will have the opportunity to participate in the discussion, which will help us to identify our position regarding the draft law." Sophie Charelli, parliamentary secretary of GYLA, at the PPD on Pension Reform: "It was informative and helpful to hear different arguments and the results of the sociological survey because this is a novelty for us, the lawyers.” Nikoloz Gagnidze, chairman of the DEA, at the PPD on E-Commerce Reform: "During the discussion, the speakers asked different questions and focused on various aspects, and I personally better understood the scope of the draft law. I had a number of questions, which were answered and it was
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useful for me." He mentioned and put forward an initiative to hold additional discussions on disputable and controversial issues of the draft law in a similar PPD format. Mariam Kuchuloria, eeputy CEO of EBA, at the PPD on E-commerce: “Constructive and result- oriented PPD, always all professionals and stakeholders involved in the discussions. only BEC and G4G can organize such an effective and interesting PPD.’’ Irakli Kovzanadze, chairman of the Budget and Finance Committee, at the PPD on Pension Reform: "I would like to reiterate that the PPD organizers have done a great job and we managed to have a preparatory discussion of the issue, because I feel that we will have a difficult committee meeting regarding the draft law on accumulative pensions next week. Today everyone has had an opportunity to provide their input and express their opinions, and I think that the authors of the reform, as well as the PPD organizers, answered all questions. Certain obstacles to the draft law have been revealed and today's event will enable us to improve articles of the draft law." Milorava, chair of GNERC, at the PPD on Energy Policy: ‘’This meeting has a very important format especially for the discussion of the initial version of the draft law. I think we are at the initial stage of a very serious and important reform, there is a risk and that we will make mistakes and the higher the engagement of the sector participants and the expert circles the more we will minimize risk." Mariam Valishvili, adviser of SOCAR Energy Georgia: "There are many interests intersected with the government, including the commercial interests to carry out optimal investments to ensure optimal return. Therefore, we think that the ongoing dialogue is a very important format; the company can show the risks we see every day through intensive engagement in this process." Irakli Kovzanadze, chairman of the Budget and Finance Committee, at the Economic Barometer for MPs: ‘’Open and business-oriented PPD is very important and relevant especially when it deals with the economic issues, challenges and perspectives of the country, macroeconomic analysis, assessments, and prognosis.’’ Archil Bakuradze, chairman of the BEC, chairman of the supervisory board of MFO Crystal, PPD on Pension Reform: "The British format of the dialogue has been recently improved and works so well that I think it has already become Georgian thanks to the Parliament of Georgia and the USAID. I welcome such a wide representation around the PPD table and pluralism, and I think that the differences of opinions will enable the MPs to take the decision that our society needs.”
APPENDIX E – PROJECT IMPACT
Due to the high-quality performance of BEC and tremendous support of the USAID G4G project, the grant activity contributed to additional considerable achievements of BEC, in particular: In 2017, the Parliamentary PPD platform was officially launched and welcomed by the chairman of the Parliament and chairmen of relevant committees and factions; the launch ceremony was held on March 7, 2017, at the Parliament of Georgia, attended by approximately 90 representatives of the public and private sectors, CSOs, and international organizations, among them four chairmen of the Parliamentary committees and factions: Mamuka Mdinaradze, Kakhaber Kuchava, Irakli Kovzanadze, and Giorgi Gachechiladze.23 Welcome speeches were given by the chairman of the Parliament H.E. Irakli Kobakhidze, USAID deputy mission director Thomas Morris; G4G chief of party, Natalia Beruashvili; chairman of BEC, Archil Bakuradze; general manager for BP in Georgia, Christopher D. Schlueter; chairman of the Environmental Protection and Natural Resources Committee of the Parliament of Georgia, Kakhaber Kuchava; and the deputy minister of Economy and Sustainable Development of Georgia, Nino Javakhadze. The grant activity, “Strengthening PPD Platform in Parliament,” was presented by the project manager and executive director of the BEC, Natia Katsiashvili. PPD was applied to promote better governance practices and address other large-scale reforms/policy issues, beyond the scope of the grant activity, in particular:
23 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10154236181056078.
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Macroeconomic Trends and Forecasts of Georgia: On May 29, 2017,the BEC initiated a new program, Economic Barometer for MPs, in cooperation with Sector Economy and Budget and Finance Committees and with the support of Crystal Fund, to discuss the main macroeconomic trends and forecasts of Georgia in the PPD format. The PPD was co-chaired by the chairman of the Budget and Finance Committee, Irakli Kovzanadze and chairman of the Sector Economy and Economic Policy Committee, Roman Kakulia. Private sector perspectives on the main macroeconomic trends and forecasts of Georgia were presented by BAG, AmCham, Galt & Taggart, MFO Crystal, MoESD, MoF, NBG, GEOSTAT, and the Parliamentary Budget Office. Business and consumer indexes, as well as the USAID G4G funded ReforMeter results—the GoG’s progress in implementing promised reforms—were presented by ISET-PI.24 RIA System Institutionalization in Georgia: The PPD activity on RIA System Institutionalization in Georgia was held on April 26, 2017, at the Parliament in cooperation with the Committee on European Integration and the Sector Economy and Economic Policy Committee of the Parliament, the USAID G4G project, the EU delegation to Georgia, and the administration of the government of Georgia; it was attended by 77 participants, among them 15 MPs and 16 staff members of the Parliamentary committees and factions. The purpose of the PPD was to ensure dialogue of legislators with the executive branch of the GoG, stakeholders, experts and other interested parties on recommendations on RIA national framework prepared by the USAID G4G; to agree key steps of the RIA system institutionalization process, and support informed participation of legislators in the policy and legislation development process.25 Traffic Safety Reform: In May 2018, BEC established a dialogue platform on the traffic safety reform, to improve road safety in Georgia and advocate the goals of the US Embassy- funded project, “Child Car Seats Save Lives,” in cooperation with the Legal Issues Committee of the Parliament and the local NGO Georgia Alliance for Safe Roads. An expert research and analysis for MPs was conducted, three stakeholder and expert workshops were held, and two wider-format PPDs were organized on (1) the Traffic Safety Reform in Georgia - Results and Development Perspectives held on May 10, 2018, at the Parliament of Georgia, co-chaired by the chair of the Legal Issues Committee, Eka Beselia, and the head of the Parliamentary majority, Archil Talakvadze;26 and (2) on the Child Car Seats Save Lives: Opportunities for Legal Regulation and Challenges held on July 31, 2018, chaired by the chair of the Legal Issues Committee, Eka Beselia,27 followed by drafting the amendments on the compulsory use of car seats to the law of Georgia on traffic. In 2017, the annual awards ceremony was established by the UK-based international association, Enterprise and Parliamentary Dialogue International (EPDI), in cooperation with the BEC and Crystal Fund, to honor outstanding supporters, partners, and participants of BEC’s PPD activities. Seven representatives of the Parliament, GoG, business, and civil society sectors were awarded appreciation awards and certificates of appreciation: (1) Irakli Kobakhidze, chairman of the Parliament of Georgia, Giorgi Volski, deputy chairman, and Natalia Beruashvili, chief of party of USAID G4G, were awarded in recognition of their gracious contribution towards the development of a PPD Platform at the Parliament of Georgia; (2) Roman Kakulia, chairman of the Sector Economy and Economic Policy Committee, Nikoloz Gagua, deputy minister of finance of Georgia (former deputy minister of economic and sustainable development), and Zurab Tchiaberashvili, MP, member of the faction European Georgia – Regions, were awarded for their outstanding and dedicated cooperation with the BEC in PPD activities at the Parliament; and (3) BAG was awarded for its outstanding and dedicated participation in PPD activities of the BEC at the Parliament. The ceremony was attended by approximately 60 representatives of Parliament, GoG, CSOs, the private sector, international organizations, academia, and media. 28
24 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10154455968686078. 25 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10154367763511078. 26 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10155323680881078. 27 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10155494157666078. 28 Business and Economic Centre Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/Business-and-Economic- Centre-195891261077/photos/?tab=album&album_id=10154701020411078. USAID | GOVERNING FOR GROWTH (G4G) IN GEORGIA STRENGTHENING THE PPD PLATFORM IN PARLIAMENT 48
The launch of the BEC’s new PPD format – Company Attachments for MPs was arranged in cooperation with targeted Parliamentary committees, secretary general of the Parliament, Givi MIkanadze, and private sector representatives. The new program includes sector-based visits of MPs to private companies to get familiarized with the peculiarities of different sectors and business operations. The executive director of the BEC, Natia Katsiashvili, was actively involved in experience shearing activities arranged by IDFI in the framework of the USAID G4G project “PPD Quality Tracking in Georgia” to share the methodology and the achievements of the Parliamentary PPD Platform with public and private sector representatives; in particular, Katsiashvili, as an invited speaker, participated in: (1) The discussion held on July 12, 2017, on the Importance of PPD in the process of Legislation Drafting;29 and (2) the discussions held on April 3, 2017, in cooperation with EU Project East Invest 2 and Centre for Competition, to identify challenges of implementing a PPD, putting forth the issues the business community has with the public sector, and creating a plan for future interactions between the public and private sectors.30
APPENDIX F – MEDIA COVERAGE OF THE PROJECT ACTIVITIES
1. The press release and the agenda of the launch ceremony of the Parliamentary PPD platform, held on March 7, 2017, were published on the official website of the Parliament of Georgia, before the PPD: http://www.parliament.ge/uploads/other/57/57251.pdf (press release) http://www.parliament.ge/uploads/other/57/57252.pdf (agenda) The news about the launch ceremony was published on the following outlets: 1. Official website of the Parliament of Georgia: http://www.parliament.ge/en/parlamentarebi/chairman/chairmannews/saqartvelos-parlamentshi- proeqt-sadjaro-da-kerdzo-seqtorebs-shoris-dialogis-platformis-gadzliereba-saqartvelos- parlamentshi-prezentacia-gaimarta.page 2. Official YouTube Channel of the Parliament of Georgia: https://www.youtube.com/watch?v=7SjJpdrJGoQ The following media outlets covered the event: 1. TV Imedi: https://www.youtube.com/watch?v=Z38UIAV3Q60 2. First Chanel (Georgian public broadcaster): https://www.youtube.com/watch?v=nkcIXyv0zOc
Natia Katsiashvili was invited to participate in the popular TV program Women’s Narratives on TV Pirveli Channel to promote the Parliamentary PPD platform and share her experience with other women in Georgia: https://www.youtube.com/watch?v=fuiqcfpxo8E&feature=youtu.be 2. The press release and the agenda of the PPD on the RIA System Institutionalization in Georgia, held on April 26, 2017, were published on the official website of the Parliament of Georgia, before the public discussion: http://www.parliament.ge/uploads/other/61/61279.pdf (press release) http://www.parliament.ge/uploads/other/61/61280.pdf (agenda) The importance of the policy reform was also emphasized by Natia Kutivadze on Iberia TV (Businesscode), before the PPD: https://www.facebook.com/iberiatvbusinesscode/videos/1530406993637132/UzpfSTE5NTg5MTI2MTA3N zoxMDE1NDI5NTMxMjQ3MTA3OA/
29 Institute for Development of Freedom of Information Facebook page, accessed March 26, 2019, https://www.facebook.com/pg/IDFI.official/photos/?tab=album&album_id=1487022071354898. 30 Public Private Dialogue Network Georgia / PPD Network Georgia Facebook post, last modified April 3, 2017, https://www.facebook.com/PPDGEO/photos/a.1804589339863278.1073741842.1762416257413920/1804589559863256/?type.
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The news about the process and results of the PPD was published on the official website of the Parliament of Georgia: http://parliament.ge/en/saparlamento-saqmianoba/komitetebi/evropastan- integraciis-komiteti-143/axali-ambebi1910/sadjaro-da-kerdzo-seqtorebs-shoris-dialogi-regulaciebis- gavlenis-shefasebis-ria-sistemis-danergva-saqartveloshi.page The following media outlets covered the event: 1. Maestro TV: https://www.youtube.com/watch?v=7ee0AXuSNwM 2. TV Pirveli: https://www.youtube.com/watch?v=SKoCGwbQbyA&t=61s 3. Iberia TV: https://www.youtube.com/watch?v=8L2C3_Ngwy4 3. The press release and the agenda of the PPD on the Gaps of the Insolvency System in Georgia and the Necessity of Reform, held on April 28, 2017, were published on the official website of the Parliament of Georgia, before the public discussion: http://www.parliament.ge/uploads/other/61/61761.pdf (press release) http://www.parliament.ge/uploads/other/61/61762.pdf (agenda) The news about the process and results of the PPD was also published on the official website of the Parliament: http://www.parliament.ge/en/saparlamento-saqmianoba/komitetebi/dargobrivi-ekonomikisa- da-ekonomikuri-politikis-komiteti/axali-ambebi-dargobrivi/sadjaro-da-kerdzo-seqtorebs-shoris-dialogi- saqartveloshi-gadaxdisuunarobis-sistemis-xarvezebi-da-reformis-sachiroeba.page The following media outlets covered the event: 1. GHN (Georgian News Agency): http://ghn.ge/com/news/view/174781 2. InterPressNews (news agency): http://www.interpressnews.ge/ge/politika/429859-sajaro-da- kerdzo-seqtorebs-shoris-dialogi-gaimartha.html?ar=A 3. NewsDay Georgia (news agency): http://newsday.ge/new/index.php/en/component/k2/item/32478-the-dialogue-between-public- and-private-sectors-gaps-of-insolvency-system-in-georgia-and-necessity-of-reforming 4. Akhaliambebi.com (online newspaper): http://akhaliambebi.com/sajaro-da-kerdzo-seqtorebs- shoris-dialogi-gaimartha/ 4. The press release and the agenda of the PPD Economic Barometer for MPs, held on May 29, 2017, were published on the official website of the Parliament of Georgia, before the public discussion: http://www.parliament.ge/uploads/other/64/64904.pdf (press release) http://www.parliament.ge/uploads/other/64/64903.pdf (agenda) The news about the process and results of the PPD was also published on the official website of the Parliament: http://www.parliament.ge/ge/media/axali-ambebi/saqartvelos-parlamentshi-sadjaro-da-kerdzo- seqtorebs-shoris-dialogi-kvartaluri-ekonomikuri-barometri- gaimarta.page?fbclid=IwAR0k0JWAhqPaPMWqeBQGTbQOkDQe7cpT23cCUvZV77PplapNCAmlRu0v_k 8 The following media outlets covered the events: 1. TV Pirveli: http://www.bm.ge/ka/video/kvartaluri-ekonomikuri- barometri/4400?fbclid=IwAR02fj74qj2iDcyT-m8XeSp3S0Y1lGeR-oQ_hcG0MSibpeU8z- dqOwv15wA 2. Georgian Business Consulting: http://gbc.ge/index.php?m=home&newsid=94349&lang=geo&fbclid=IwAR3AI4r0plIMfixuK_BZg CSDNAOiS_ViOvcaExulzG8_j4cQPqnuM34PoSo 5. The press release of the of annual award ceremony, held on August 10, 2017, in cooperation with EPDI, was published on the official website of the Parliament of Georgia, before the event: http://www.parliament.ge/uploads/other/72/72527.pdf The news about the event was published on the following outlets: 1. Official website of the Parliament of Georgia: http://parliament.ge/ge/parlamentarebi/chairman/chairmannews/irakli-kobaxidzes-sadjaro-da- kerdzo-seqtorebs-shoris-dialogis-saparlamento-platformis-ganvitarebashi-shetanili-wvlilistvis- djildo-
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gadasces.page?fbclid=IwAR0FOvXod24I8bNghIMTckXkDBu0Bv5Nw5qKBbh21xTVlqg5A7gBA _yELS4 2. Official YouTube Channel of the Parliament: https://www.youtube.com/watch?v=_PE6dCLS-4I TV Imedi covered the event: https://www.youtube.com/watch?v=kEsupB0I2oE&feature=youtu.be&fbclid=IwAR06ewGy5UvczKjIl9ykjCv C9TxQV_pfPe1YMobfDoWD4j-3lP-vxjNxbT4 6. The press release and the agenda of the PPD on Transport and Logistics in Georgia: Main Challenges and Development Perspectives, held on December 25, 2017, were published on the official website of the Parliament of Georgia before the public discussion: http://www.parliament.ge/ge/saparlamento-saqmianoba/komitetebi/dargobrivi-ekonomikisa-da- ekonomikuri-politikis-komiteti/anonsi/25-dekemberi- anonsi20171.page?fbclid=IwAR12JYCj4o8VYt7RHNEVlRttU8vNajDorXmH99Pq33lpfLdZ7PGZJKYvahs The news about the process and results of the PPD was also published on the official website of the Parliament of Georgia: http://www.parliament.ge/ge/saparlamento-saqmianoba/komitetebi/dargobrivi- ekonomikisa-da-ekonomikuri-politikis-komiteti/axali-ambebi-dargobrivi/parlamentshi-sadjaro-da-kerdzo- seqtorebs-shoris-dialogi-saqartvelos-satransporto-lodjistikuri-dargis-dziritadi-gamowvevebi-da- ganvitarebis-perspeqtivebi-gaimarta.page The following media outlets covered the event: 1. TV Pirveli: https://www.facebook.com/www.bm.ge/videos/1406942939415225/?hc_ref=ARQw- f77Fzo7OqmdySa3wnQZuEol83GpULVgr_AsSk17B9VYVbxqRPPbdiEHgCZ7ukk 2. TV Pirveli: https://www.youtube.com/watch?v=DUhTlzBZXTY 3. Commersant.ge: https://commersant.ge/ge/post/parlamentshi-sadjaro-da-kerdzo-seqtorebs- shoris-dialogi-saqartvelos-satransporto-lodjistikuri-dargis-dziritadi-gamowvevebi-da- ganvitarebis-perspeqtivebi-gaimarta 7. The press release and the agenda of the PPD on the Draft Law of Georgia on Pension Savings: Pros and Cons, held on February 16, 2018, were published on the official website of the Parliament of Georgia before the public discussion: 1. http://www.parliament.ge/uploads/other/85/85842.pdf (press release) 2. http://www.parliament.ge/uploads/other/85/85811.pdf (agenda) The news about the process and results of the PPD was also published on the following outlets: 1. Official website of the Parliament of Georgia: http://parliament.ge/ge/saparlamento- saqmianoba/komitetebi/djanmrtelobis-dacvisa-da-socialur-sakitxta-komiteti-149/axali-ambebi- jandacva/dagrovebiti-pensiis-shesaxeb-kanonproeqtze-sadjaro-da-kerdzo-seqtorebis- warmomadgenlebs-shoris-parlamentshi-shexvedra-gaimarta.page 2. Official website of the Ministry of Economy and Sustainable Development of Georgia: http://www.economy.ge/?page=news&nw=569 3. Official Facebook page of the Ministry of Economy and Sustainable Development of Georgia: https://www.facebook.com/economygovge/videos/1651889201567399/ The following media outlets covered the event and policy reform: 1. Rustavi 2 TV: http://rustavi2.ge/ka/news/96891 2. Rustavi 2 TV: http://rustavi2.ge/ka/news/96918 3. TV Maestro: https://www.youtube.com/watch?v=TMViGNAhQCU&fbclid=IwAR3CnwiOs5KeA82cfss3MPK4D sQs3MgBbGhe2NW7_JcbCy60UYy0ukz_ZjQ 4. TV Pirveli: https://www.facebook.com/www.bm.ge/videos/1465836383525880/UzpfSTE5NTg5MTI2MTA3N zoxMDE1NTE0Nzg0ODUzNjA3OA/ 5. TV Pirveli: https://www.facebook.com/www.bm.ge/videos/1465826500193535/UzpfSTE5NTg5MTI2MTA3N zoxMDE1NTE0Nzg2ODkxMTA3OA/
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6. First Chanel (Georgian public broadcaster): https://1tv.ge/news/sajaro-da-kerdzo-seqtorebs- shoris-temaze-sapensio-reformis-sakitkhze-shekhvedra-mimdinareobs/ 7. Imedinews.ge: https://imedinews.ge/ge/saqartvelo/48782/parlamentshi-dagrovebiti-pensiis- kanonproeqtze-msjeloben 8. Radio Tavisupleba: https://www.radiotavisupleba.ge/a/29043989.html 9. Commersant.ge: https://commersant.ge/ge/post/irakli-kovzanadze-chven-gvchirdeba-swrafi-da- fundamenturi-reformebi-da-ert-erti-asetia-sapensio-reforma 10. News.ge: https://news.ge/dagrovebiti-pensiis-sesaxeb-kanonproeqtze-sajaro-da-kerzo- seqtorebis-warmomadgenlebs-soris-parlamentsi-sexvedra-gaimarta/ 11. The News Agency Accent: http://accent.com.ge/ge/news/details/47141 8. The press release and the agenda of the PPD on the Traffic Safety Reform in Georgia - Results and Development Perspectives, held on May 10, 2018, were published on the official website of the Parliament of Georgia before the public discussion: 1. http://www.parliament.ge/uploads/other/92/92895.pdf (press release) 2. http://www.parliament.ge/uploads/other/92/92810.pdf (agenda) The news about the process and results of the PPD was also published on the official website of the Parliament of Georgia: http://parliament.ge/ge/saparlamento-saqmianoba/komitetebi/iuridiul-sakitxta- komiteti-146/axali-ambebi-iuridiuli/parlamentma-sagzao-modzraobis-usafrtxoebis-reformaze-sadjaro-da- kerdzo-seqtorebs-shoris-dialogis-formatshi-shexvedras- umaspindzla.page?fbclid=IwAR3t67wznVq5Dwk7L5abuThUPJ40ro2c0S4nB7FFREbxZJDGEKf7groeQR A
The following media outlets covered the event: 1. Rustavi 2 TV: https://www.youtube.com/watch?v=- ci7gfTHV4s&fbclid=IwAR1WqPtnR6mJ76i5DFltepgnEonfzhfi75J8gNQZxtalQjFu7EPkj4QPim8 2. TV Pirveli: https://www.youtube.com/watch?v=1vrZQgdtXiU&fbclid=IwAR08T2XPU69GZxsroP8hPYWWU Ov6iQ3LV9TXh4a030ay4WWWRGxGny2z9Pc 9. The press release and the agenda of the PPD on the Child Car Seats Save Lives: Opportunities for Legal Regulation and Challenges, held on July 31, 2018, were published on the official website of the Parliament of Georgia before the public discussion: 1. http://www.parliament.ge/uploads/other/100/100505.pdf (press release) 2. http://www.parliament.ge/uploads/other/100/100507.pdf (agenda) The news about the process and results of the PPD was also published on the official website of the Parliament of Georgia: http://www.parliament.ge/ge/saparlamento-saqmianoba/komitetebi/iuridiul-sakitxta- komiteti-146/axali-ambebi-iuridiuli/iuridiul-sakitxta-komiteti-sabavshvo-samgzavro-savardzlebis- gamoyenebis-samartlebrivi-regulirebis-sakitxebze-mushaobas- ganagrdzobs.page?fbclid=IwAR3LeXH71GlEIItoqg_e0cAUp_O5oZm_yH_KT7TUeuYgKzcxOWwhAlVmu p0 TV Imedi covered the event: 1. https://www.facebook.com/112684375486993/videos/1811813708907376/ 2. https://www.facebook.com/112684375486993/videos/1810477549040992/ 10. The press release and the agenda of the PPD on the Draft Law on Water Resources Management, held on September 18, 2018, were published on the official website of the Parliament of Georgia before the public discussion: 1. http://www.parliament.ge/uploads/other/102/102251.pdf (press release) 2. http://www.parliament.ge/uploads/other/102/102196.pdf (agenda) The news about the process and results of the PPD was also published on the official website of the Parliament of Georgia: http://www.parliament.ge/en/saparlamento-saqmianoba/komitetebi/garemos-
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dacvisa-da-bunebrivi-resursebis-komiteti/gonisdziebebi/gonisdziebebi1/axali-ambebi-garemo/kaxa- kuchava-mtavari-mizani-yvelas-erti-gvaqvs-mivigot-wylis-shesaxeb-iseti-kanoni-romelic-iqneba-efeqturi- agsulebis-kutxit-da-masshi-yvelas-interesi-iqneba-racionalurad-gatvaliswinebuli.page The following media outlets covered the event and policy reform: 1. Maestro TV: https://www.youtube.com/watch?v=chAhIHfRsGc 2. Stu Net: https://www.youtube.com/watch?v=ji--MiuFda0 11. The press release and the agenda of the PPD on the Draft Law of Georgia on Energy, held on October 23, 2018, were published on the official website of the Parliament of Georgia before the public discussion: 1. http://www.parliament.ge/uploads/other/104/104579.pdf (press release) 2. http://www.parliament.ge/uploads/other/104/104556.pdf (agenda) The news about the process and results of the PPD was also published on the official website of the Parliament of Georgia: http://www.parliament.ge/en/saparlamento-saqmianoba/komitetebi/dargobrivi- ekonomikisa-da-ekonomikuri-politikis-komiteti/axali-ambebi-dargobrivi/parlamentshi-energetikis-shesaxeb- kanonproeqttan-dakavshirebit-sadjaro-da-kerdzo-seqtorebs-shoris-dialogi-gaimarta.page
The following media outlets covered the event: 1. Imedinews.ge: https://imedinews.ge/ge/ekonomika/82430/eleqtroenergetikuli-da-bunebrivi- gazis-seqtorebis-reporma-igegmeba?fbclid=IwAR2T- HFa9f6OvGXb5aqlRMcDvEv59Rlcu0_ClPDgy7145fAHF2fCV4ZPZ8Y 2. First Chanel (Georgian public broadcaster): https://1tv.ge/news/energetikis-shesakheb- kanonproeqttan-dakavshirebit-sajaro-da-kerdzo-seqtorebs-shoris-dialogi- gaimarta/?fbclid=IwAR31mWlbmTaEieTXCXk2jO89O95KXOc1hyepxP4Qkr5o9bGTNYu9xtfCHr w 3. Ipress.ge: https://ipress.ge/new/parlamentshi-energetikis-shesakheb-kanonproeqttan- dakavshirebit-sajaro-da-kerdzo-seqtorebs-shoris-dialogi- gaimarta/?fbclid=IwAR2rdW0Tmp83oZQOZXdskuEJW1O23EGgK_iuzhRAAJsU5BVv3Teze616 M20 4. Ccommersant.ge: https://commersant.ge/ge/post/chvens-winashe-dgas-gamowvevebi- romelsac-pirvel-rigshi-saxelis-darqmeva-da-agiareba-unda
12. The press release and the agenda of the PPD on the Draft Law of Georgia on E-Commerce, held on December 20, 2018, were published on the official website of the Parliament of Georgia before the public discussion: 1. http://www.parliament.ge/uploads/other/107/107787.pdf (press release) 2. http://www.parliament.ge/uploads/other/107/107801.pdf (agenda) The press release was also published on Interpressnews.ge: https://www.interpressnews.ge/ka/article/526079-anonsi-20-dekemberi/?fbclid=IwAR0Mj8Zi- c3W87LmfecgOZaW8rdkx-0_5RmY_hQ-tcoQeTGgNb44xi3dbI0 The news about the process and results of the PPD was published on the official website of the Parliament of Georgia: http://parliament.ge/en/saparlamento-saqmianoba/komitetebi/dargobrivi- ekonomikisa-da-ekonomikuri-politikis-komiteti/axali-ambebi-dargobrivi/dargobrivi-ekonomikisa-da- ekonomikuri-politikis-komitetshi-sadjaro-da-kerdzo-seqtorebs-shoris-dialogis-formatshi-eleqtronuli- komerciis-shesaxeb-kanonis-proeqtze-imsdjeles.page Commersant.ge covered the event: https://commersant.ge/ge/post/dargobrivi-ekonomikis-komitetshi- eleqtronuli-komerciis-shesaxeb-kanonis-proeqtze-imsdjeles
USAID | GOVERNING FOR GROWTH (G4G) IN GEORGIA STRENGTHENING THE PPD PLATFORM IN PARLIAMENT 53
USAID Governing for Growth (G4G) in Georgia Deloitte Consulting Overseas Projects LLP Address: 5 L. Mikeladze Street, Tbilisi Phone: +995 322 240115 / 16 Email: [email protected]