EXECUTIVE SUMMARY

State Owned Companies: state capture, clientelism and corruption in Italy

State Owned Enterprises (SOEs) in Italy had experienced major changes in the last three decades as the major enterprises have been privatized and then listed in the stock exchange. These changes are rigorously interwoven with the introduction of both EU and national sector regulations, which diversified markets for services. Privatizations resulted in the retreat of the State from crucial sectors as major players were listed (e.g Enel, Eni, Finmeccanica, Snam, Terna) and more recently, in 2014, the Italian Postal Service ( most important operation across Europe in that year).

However, Italy still poses a large number of SOEs, especially in the local communities.  According to the latest available data, there are about 562 (4.4%) enterprises owned by the State or other Central Administrations, while Local Administrations (Regions, Provinces, municipalities and other local authorities) own about 8,386 enterprises – therefore, the vast majority.

In the last years, the Italian government continued the effort to better regulate the SOEs and enacted legislative decrees aimed at reforming the public owned enterprises or SOEs, making them more efficient, by better controlling and streamlining them.

In contrast to national SOEs, the local and inter-regional companies have been characterized by a significant number of inefficient companies. In 2016 and 2017 the Parliament have approved a legislation aimed at rationalizing the public ownership in these companies. The main rules refer to i) Justification of public ownership, ii) Procedures by which public administrations can establish, acquire or participate in SOEs, iii) introducing new criteria for corporate governance and remuneration or iv)  map and report all the owned companies by local administration.

The legal framework on anti-corruption has also evolved in recent times with SOEs obliged to appoint a compliance officer, adoption of an anti-corruption plan and code of conduct for the employees, incompatibility criteria or the adoption of measures to protect any whistle-blowers.

However, according both to the experts interviewed and deployed online survey, we can underline some conclusions: 13% consider the legal framework well adjusted and implemented, while 32% believe that the quality is good, but the enforcement is limited to some cases. . As regards the legal anti-corruption framework, 58% believe that quality is high, but the implementation is limited to certain situations. Political interference is perceived as very significant (32%) and significant (38%) by the vast majority of the interviewee.

With the novelties and measures taken in the last years, Italy managed to improve certain aspects of the SOEs (legislative framework, anti corruption plan, mapping local SOEs), but further measures need to be tackled in order to produce effects on the long run:  

i)overlapping ownership has proved to be effective in balancing the political influence, in particular in the sector where a natural monopoly exists; the anti-corruption plan represents a tool that oblige the companies to provide information on crimes occurred in the company and disciplinary action taken towards employee along several other issues;

ii)the anti-corruption plan together with the other measures impose on the company could result into a huge amount of paper work that do not change the company approach;

iii) the transparency measure are making companies more accountable to the general public, but a proper accountability mechanism towards the final beneficiaries (i.e. citizens) is far from being reached.

Full report is available here. 

About the authors:

Valeria Ferraris is Senior Researcher at Amapola. She has a degree in Law and a PhD in Criminology and is the author of several research reports and essays on immigration and crime, trafficking in human beings, urban security and human rights.

Giovanna Spolti is a Senior Researcher at Ampola. She has a degree in Political Science and is an expert in data processing and quantitative research. She is a consultant for CERVED in the field of business analysis.

Pier Paolo Maza is the Ceo of Patrimonio and SAT two local public owned enterprises.

This report is part of the “State-Owned Companies – Preventing Corruption and State Capture” project, implemented by the Romanian Center for European Policies, Expert Forum, Freedom House, Amapola Progetti (Italy), Risk Monitor (Bulgaria and Candole Partners (Czech Republic). The project is financed through Economic and Financial Crime, Corruption, Environmental Crime Programme,  DG Migration and Home Affairs, European Commission and co-financed by Open Society Foundation. 

The contents of this report does not necessarily reflect the official position of the DG Migration and Home Affairs or Open Society Foundation. Liability regarding the accuracy and coherence of the information within lies with the partners of the project  and with the author(s) of the report. 

For additional information, please go to www.statecapture.ro

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