Something quite amazing happened yesterday evening in Zagreb. The Croatian police and the State Prosecutor announced that several people had been arrested on suspicion of a number of criminal corruption offences, abuse of office and peddling influence. Among the arrested were Zagreb Mayor Milan Bandic, Head of Zagreb Holding municipal company Slobodan Ljubicic, the head of the ZET public transport company Ivan Tolic, head and part-owner of the CIOS metal recycling company Petar Pripuza and around 15 more un-named people.

by Pippa Gallop, cross-posted from the Bankwatch blog

I say ‘amazing’, because it seemed like it would never happen. Ever since Milan Bandic came to power for a third term as Zagreb Mayor in 2005, NGOs including our member group Zelena akcija/Friends of the Earth Croatia and the Croatian media have been drawing attention to deals which excessively benefitted private companies at the expense of the public, raising questions about possible corruption. Some media reports suggested that the State Prosecutor had as many as 200 requests for investigations against Bandic waiting to be dealt with, but they never seemed to result in any action being taken.

Now, finally, of the deals questioned by Zelena akcija are now reportedly under scrutiny by police in connection with the arrests made, although this has not been officially confirmed.

Right at the beginning of Bandic’s first mandate he signed the contract for Zagreb’s EBRD-financed oversized and overpriced wastewater treatment plant public-private partnership.

Among the numerous problems with this plant is that it churns out waste sludge which is not sufficiently treated to be used for land reclamation or other purposes. This then gave Bandic and others an excuse to push the construction of a huge waste incinerator in Zagreb, which would burn the sludge along with household waste.

This omission in the wastewater plant’s technology at the very least plays into the hands of those pushing for an incinerator, and seeing as the incinerator was promoted by Novum, later part of EVN, which is one of the concessionaires for the wastewater plant, it seems likely it was done on purpose.

Nevertheless, although both the EBRD and EIB were both considering financing Zagreb’s incinerator, both of them wisely declined to proceed with the project, partly as a result of Zelena akcija’s arguments on the need to concentrate on waste prevention and recycling before constructing such a massive, expensive and inflexible facility.

However, in the absence of almost any measures to prevent, recycle and compost waste by the city authorities, the incinerator project rose from the dead again. Most recently Mayor Bandic blatantly abused his position in pushing Zagreb’s new waste management plan through a vote in the City Assembly. The plan was supposed to be voted on 25 September but seeing that he might not get enough votes due to some of his tame representatives being absent from the meeting, Bandic withdrew all the agenda points from the meeting just one day in advance, thereby forcing the head of the Assembly to re-schedule it.

Needless to say, on 9 October when the meeting was finally held, the Plan passed – although not without protests from NGOs and local residents – and both the largest political parties voting against the plan.

Yesterday’s arrests mean that the incinerator project is now standing on thinner ice than ever and any investors and financiers interested in it would be wise to keep their distance. But more broadly it also means that financing institutions like the EBRD and EIB need to take more care about who they do business with. Just a few years ago former Prime Minister Ivo Sanader was widely accepted by the international community as the person leading Croatia into the EU. Now he’s in prison for corruption. It looks like it’s going to be a similar story with Milan Bandic – one minute a partner for investors, the next minute, arrested for corruption. It’s high time for international bodies to stop trusting so much the stories told by politicians and taking more seriously warnings from civil society and the media.

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