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The criminogenic background of the establishment of GEOLP, a company of Elektroprivreda BiH: SIPA is investigating the case

elektroprivreda bih
Foto: D.B/ Fokus.ba
Elektroprivreda BiH, cijena struje ide gore?!

Fokus.ba collected information about the company that needs to take care of workers from FBiH mines. The unions hired lawyers. Behind the story are hidden relations with private companies such as Lager and the payment of huge sums for the purchase of coal

The State Agency for Investigation and Protection (SIPA) formed a case in which it investigates the events related to the formation of the company GEOLP, which is 100 per cent owned by Elektroprivreda BiH. As Fokus learns, the investigation was launched after information was presented about shady activities aimed at the circulation of huge amounts of money in the context of coal procurement.

Written by: A. DUČIĆ/Fokus.ba

SIPA stated for Fokus.ba that “respecting the fact of the secrecy of the work of police officers, concrete measures and actions cannot be disclosed to the public”.

Namely, Elektroprivreda BiH founded GEOLP on July 30, 2021, with a capital of 4.1 million KM, in order to take care of redundant workers in it, and as part of the restructuring process of coal mines operating within the Elektroprivreda BiH concern. Also, GEOLP was formed to take over a number of activities from the mine, such as laboratory tests.

Website of GEOLP / Sreenshot

However, this has not happened to date, and the background to everything is, to say the least, criminogenic. According to Fokus’ knowledge, SIPA officials visited Elektroprivreda BiH and several other entities last year and then found that this company has only one employee and that it does not have the necessary conditions to do what the adopted decision and statute require it to do. These are, among other things, geological research, laboratory research, design, training, protection, and rescue.

One of the key ones is the laboratory testing, and the decisions that were made with the aim of taking over the laboratory at the end of 2022, as our portal has learned, led to a rebellion among the miners, especially “Kreka” and “Kaknja”. These two mines have accredited laboratories for testing the quality of coal, which are now being moved to the new company GEOLP.

The Assembly of the “Kreka” Mine, as we have learned, brought changes to the Ordinance on Organization before the very New Year, on December 29, 2022, in which they delete or shut down a number of services in this mine, namely for technical and laboratory tests. Also, the new ordinance abolishes the service for design, as well as for exploratory drilling and drainage wells. So, we are talking about activities that are intended for GEOLP.

The amendment of the Ordinance would not have been so controversial if this decision had not been made without the knowledge of the trade union, which was bypassed in this case, which should not have happened for several reasons, especially when it comes to the systematization of jobs and taking care of redundant employees. On January 9, 2023, as confirmed to us, the Board of Directors of the Independent Union of Mine Workers of FBiH met. In the conclusions that were reached, among other things, it is indicated that the new subsidiaries of the concern (meaning GEOLP) are still a huge unknown to the workers, which is why, as stated, one gets the impression that the establishment of “imaginary companies is intended to carry out the final the devastation phase of brown coal mines”.

In the conclusions, it is also pointed out that the management of the EPBiH in the past period implements unilaterally determined decisions related to the labour law status of workers. Also, the trade union organization of the “Kreka” coal mine hired a lawyer to initiate a court case to protect the rights of workers. They state that the goal is to oppose the “illegal legal actions of the employer, the EPBiH, the director and the procurator of the ‘Kreka’ Coal Mine”.

The president of the “Kreka” Mine union, Zuhdija Tokić, tells Fokus.ba that the subsidiary company GEOLP is an absolute stranger to this union, and notes that the “Kreka” Mine Assembly, while completely ignoring the union, adopted changes to the Ordinance on Organization in which a number of services are extinguished.

– The fact that activities such as designing, laboratories and drilling, which are taken from the mine, are given to some kind of imaginary company, is devastating for the union. In the Collective Agreement that is in force, in Article 39, paragraph 2, it is said that the employer undertakes not to assign the tasks of the registered activity to other legal or natural persons whose assignment would cause the termination of the employment contract of the workers employed by the employer. This is a classic violation of the Collective Agreement”, states Tokić.

Conclusions of the Miners’ Union / Screenshot

He adds that the problem is not the subsidiaries, but the problem is that the acts that are in force are violated. He points out that the workers who need to go to these companies have no idea what kind of environment they are going to and under what kind of collective agreement.

– What will happen to their rights without a union? They have already sent the workers to declare whether they accept or not to be redistributed to that company. They have already started it. What will happen to the worker who refuses? When it comes to sampling, you have a negligible cost of coal in the mines. The average selling price that we placed on the thermal power plant is 50.15 KM, and the production costs us 83.50 KM. Imagine now when the taking of samples will be strictly in that dependent company GEOLP and when they will then start delivering us a negative bonus, so it will be in the millions, says Tokić for Fokus.ba.

He notes that neither the statute nor the regulations of GEOLP have been presented to the workers and that they have no insight into precisely defined rights and obligations.

– We are asking Novalić, Đindić, Andelia for official information, and an urgent meeting with all the mining unions. It concerns hundreds of workers who have families and children. We have no communication with the management of the “Kreka” Mine, which does not communicate with the union. We will sue them and win, but those who run EPBiH and the company will not be held accountable, but the mines and workers will bear all the damage”, he says.
As we have researched, the background of this story is also hidden in the relations of Elektroprivreda BiH with private companies both in Herzegovina and in the territory of the RS, headed by influential businessmen, to whom the state enterprise EPBiH has paid for coal, machinery and services in the past years in huge amounts. The goal of the new company is to expropriate the mines and enable even more efficient “cooperation” with private individuals.

This is also the information that was previously presented to SIPA officials, who, during their visit to Elektroprivreda, established that the newly formed company GEOLP, in addition to a number of deficiencies, does not even have adequate laboratories. It was for this reason, it was confirmed to us, that before the end of 2022, the management of Elektroprivreda BiH submitted requests to the BiH Accreditation Institute to place two accredited laboratories, those of RMU “Kreka” and “Kakanj”, under the authority of GEOLP.

This institute told us that, except for the information they publish publicly or in the case of an agreement between the accreditation body and the conformity assessment body, all other information obtained during the accreditation process is considered protected and must be treated as confidential, which is why they could not give us the information. They referred us to the list (http://www.bata.gov.ba/Akreditirana_tijela/Spisak-akreditiranih-tijela.pdf) of accredited bodies for compliance assessment, which was published on December 27, 2022. There is no GEOLP on it, but on the other hand, the laboratories in the “Kakanj” and “Kreka” mines are still on this list.

It is interesting that in the Elaboration of the techno-economic justification for the formation of GEOLP, obtained by Fokus, it is stated that “coal control can only be carried out by a company that meets the standards and that has the accreditation of a test laboratory and an inspection body of type A”. This is exactly not GEOLP, since the type A inspection body is an independent third party and only inspects others, and GEOLP is a subsidiary company 100 per cent owned by Elektoprivreda BiH, which owns the mines, and whose ores should GEOLP examine?!

Facsimile of the report: Who can be an inspection body

Taking all this into account, the question arises why the Management Board of Elektroprivreda BiH, headed by General Director Admir Andelia, makes a “back-and-forth” decision in order to train the new company GEOLP?

The answer to this question lies in the business cooperation between Elektroprivreda BiH and the company Lager from Posušje. Namely, the state-owned Elektroprivreda BiH has been paying fabulous sums for the purchase of coal to this private company, which has been burdened with numerous scandals for a long time. That's how EPBiH, according to Žurnal, for the procurement of 100 thousand tons coal in December 2021 paid 9.9 million KM.

Last year, on April 29, Lager was again paid 20.2 million KM for 150,000 tons of coal, and on October 7, 2022, EPBiH signed a contract with Lager for the supply of even 600,000 tons of coal! The work is worth 105.1 million KM (without VAT).

Facsimile of the procurement of Elektroprivreda BiH from October 7, 2022 with Lager

By the way, on December 30, 2022, the Croatian USKOK filed an indictment against the owner of Lager, Milenko Bašić, and eight other people in the case “Vjetroelektrane “. The first accused is the former mayor of Knin, Josipa Rimac. She is suspected of having agreed with Bašić and the director of that company, Dragan Stipić (who is also accused), that, using his position as secretary of state, he would ensure obtaining permits, certificates and concluding contracts for the construction, commissioning, production and sale of electricity for The Krš-Pađane wind farm, despite not meeting all the prescribed conditions.

Before EPBiH started buying huge quantities of coal for its mines from Lager, while at the same time, individual managers of brown coal mines were verbally ordered to reduce the amount of mining of this energy ore, this Posuška company was the main supplier of mechanization, but also a service to the EPBiH concern – mines.

According to the data from the Public Procurement Portal, Lager has repeatedly provided repair services, diagnostics, and various repairs to the “Kreka” mines, and delivered machinery, engine oil, spare parts for machinery, pneumatics, etc. Only in 2022, the EPBiH concern – mines signed contracts with Lager in the total amount of 125.9 million KM (without VAT)!

The Center for Investigative Journalism (CIN) published several studies in which the quality of the ores themselves as well as other goods supplied by Lager not only to the concern was called into question EPBiH – mines already throughout BiH.

However, apart from Lager, in the past years, Elektroprivreda BiH allocated tens of millions of KM for the purchase of coal from the concern Rudnik i thermoelektrana (RiTE) Stanari (RS) owned by Serbian businessman Vuk Hamović, under the pretext of a drop in production in mines in the FBiH (!).

The unions did not deny that there was a drop in production, but they pointed to the causes, namely insufficient investment in mechanization. They claim that with sufficient investments in the mechanisation of coal, there would be a boom.

– It is absolutely unacceptable that “Kreka”, as the largest producer of coal, knowingly puts itself in a position where it cannot meet the task, while at the same time buying coal from Lager or Tenants. If you have a mine with so many coal reserves, and it is 100 million tons, you come to a position where you have the production as you have and the investment in the mine is neglected, while at the same time machines are rented from these private companies – says Tokić.

In the document “Information of the Federal Ministry of Energy, Industry and Mining on the State of the Mines”, which was discussed in the Parliament of the Federation of Bosnia and Herzegovina, and which was adopted by the Government of FBiH on November 29, 2021, the intention of Elektroprivreda to deprive the mines of some of their activities are practically stated.

It is emphasized that “there is an evident delay of more than six months in the realization of restructuring caused by the non-application of the regulations on work and the regulations on work performance and the evaluation of difficult working conditions in subsidiary companies – coal mines”.

– JPEPBiH has already formed a subsidiary company for geological research, laboratory testing, design and protection, GEOLP d.o.o. Kakanj, but it cannot function because we do not have the new organization and systematization of coal mine workplaces in place. It is envisaged that the new subsidiaries will perform centralized tasks that are now performed individually by coal mines and thus create unnecessary costs – the document emphasizes.

However, as stated, the key acts, namely the regulations on organization, systematization of workplaces, work, work performance and evaluation of difficult working conditions, which have not been adopted or are not applied in coal mines, are the main reason why the restructuring process stopped.

In this whole story about the questionable management of substantial public funds of the Elektroprivreda BiH concern – mines, an important element is the determination of the calorific value of coal. It is the calorific value of coal that affects the purchase price of coal, and this is where there is the greatest scope for machinations, that is, spending money, including when it comes to purchasing coal from the aforementioned private individuals. If the caloric value is lower, penalties are paid, and an additional premium is paid if it is higher. For years, the miners’ union pointed out that the EPBiH in this matter was harming the mines themselves by writing off thousands of tons of coal.

Recently, for example, the workers from RMU “Breza” publicly stated that Elektroprivreda BiH was ripping them off regarding the “insufficient calorific value” of coal, so in two years they wrote off more than 40,000 tons of coal for which they did not pay. On the other hand, the question arises as to how it is possible that, for example, coal from Lager, which is purchased in huge quantities, meets the calorific value.

SIPA investigators, according to Fokus’ knowledge, questioned the determination of the calorific value of coal as part of the investigation into the company GEOLP. They are examining whether it is ultimately the intention of GEOLP to reduce the calorific value of the coal that comes from the mines within the concern and to increase the value of the coal from Lager in order to pay the premium. SIPA officials also addressed the Electricity Regulatory Agency (FERK) in connection with this issue, as confirmed to us.

It should be noted that in the large protests in front of the FBiH Government, held on November 23, 2021, the miners stated among their demands that they were looking for control of the methodology and method of determining the calorific value of the coal delivered from the coal mine.

Our portal addressed an official inquiry to Elektroprivreda BiH for a comment on all this, but we did not receive answers to our questions until the conclusion of this text. The position of Elektroprivreda BiH, if we receive it, will be published later.