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How to fix UkrOboronProm

27 December, 2017

Prime Minister Volodymyr Groysman’s decision on Dec. 27 to oust Roman Romanov as CEO of UkrOboronProm, Ukraine’s state weapons conglomerate with more than 100 companies and 80,000 employees, is only a first step.

Much more needs to be done to transform UOP in a way that improves state governance, reduces corruption and eradicates criminal schemes.

Here are some of them:

The Cabinet of Ministers must be solely responsible for the management of UOP, not the president. The next step should be to change the law to make the prime minister, not the president, responsible for the appointment of the CEO and for nominating all members to the UOP Supervisory Board. It’s an anti-constitutional holdover from the era of ex-President Viktor Yanukovych to have the president in charge of deciding who heads a defense industry concern.

In order to improve state governance, reduce corruption and eradicate the criminal schemes, Groysman and the Cabinet of Ministers should take the following steps:

1. Nominate a new CEO who is a professional person with principles, values, knowledge, not a person based on political agreements.

2. Complete the formation of the concern’s Supervisory Board, in which the majority of members must be independent (organize an open public discussion of candidates for the Supervisory Board).

3. Develop and approve a strategy of development of Ukraine’s military-industrial complex as stipulated in the concept of development of Ukraine’s security and defense sector, a document approved on March 14 by presidential decree. This strategy must serve as the guideline for reform and development of the country’s defense industry during the next 10 years at least.

4. Develop and publish a clear plan of reforming UOP, including responsible officials and implementation timeframes.

5. Create a Ministry of Defense industry inside the Cabinet of Ministers responsible for formation and implementation of the national military-industrial policy and oversight the military-industrial complex (reform, development, financing, control, everything).

6. Establish the position of UOP inspector general who will have all rights and access to monitor independently all spending and will be subordinated and report directly to the prime minister.

7. Defense procurement must be open and transparent.

8. The level of secrecy concerning procurement contracts and financing in security and defense sector must be lowered.