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Legal and Institutional Situation Report 2011 second semester
 

Legal and Institutional Situation Report 2011 second semester

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The purpose of this Legal and Institutional Situation Report is to identify events that in the second semester of 2011 have impacted the legal and institutional systems as a continuation of previous ...

The purpose of this Legal and Institutional Situation Report is to identify events that in the second semester of 2011 have impacted the legal and institutional systems as a continuation of previous studies.

This report has been elaborated from the continuous and systematic monitoring and analysis of the group of facts, resolutions and situations that in our judgment have had the most influence in El Salvador’s legal framework, during the observed period.

The report is structured around the strategic themes that guide the work of the Legal Studies Department: 1. Rule of law and Institutionalism, 2. Legal Certainty and Public Safety, 3. Business Climate and Commerce Regulation, and 4. Transparency.

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    Legal and Institutional Situation Report 2011 second semester Legal and Institutional Situation Report 2011 second semester Document Transcript

    • LEGAL ANDINSTITUTIONALSITUATION REPORT Salvadoran Economic and Social Development Legal Studies Department Foundation
    • The elaboration of this Reportconcluded on December 31th, 2011ISSN 2218-6859Key title: Informe de coyuntura legal e institucionalAbbreviated key title: Inf. coyunt. legal inst.Salvadoran Economic andSocial Development FoundationFUSADESA publication ofLegal Studies DepartamentThe material in this publication is copyrighted.Copying portions or all of this work withoutpermission may be a violation of applicable law.
    • TABLE OF CONTENTS1. EXECUTIVE SUMMARY2. ACRONYMS3. INTRODUCTION 4. RULE OF LAW AND INSTITUTIONALISM4.1. Introduction4.2. Indicators4.3. Inter-organ relations4.4. Regulatory Activity4.5. Law enforcement4.6. Justice Administration4.7. Municipalities4.8. Electoral System4.9. Conclusions5. LEGAL CERTAINTY AND PUBLIC SAFETY5.1. Introduction5.2. Legal Certainty5.3. Public Safety5.4. Conclusions6. BUSINESS CLIMATE AND REGULATION6.1. Introduction6.2. Indicators6.3. Business Regulation6.4. State Modernization6.5. International Regulation6.6. Conclusions LEGAL AND INSTITUTIONAL SITUATION REPORT 3
    • TABLE OF CONTENTS 7. TRANSPARENCY 7.1. Introduction 7.2. Indicators 7.3. Regional Transparency 7.4. Developments in Access to Public Information 7.5. Transparency’s System Performance 7.6. Conclusions 8. FINAL CONSIDERATIONS 9. END NOTES4 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • EXECUTIVE SUMMARYRule of Law and InstitutionalismThis semester has been characterized by the adjustment of the Electoral Regulationsto the unconstitutionality rulings that have expanded to a certain extent, to the rightof suffrage. The first regulations issued by the Parliament in response to these rulingsdid not respect the interpretation given to the constitutional provisions; therefore,new unconstitutionality actions were filed against these regulatory changes, whichended in a second set of reforms to the Electoral Law, which finally, although withsome legal gaps, have guaranteed the right to run as a non-party candidate and to votefor a specific person in the legislative elections.Following on electoral matters, on the other hand, the uncertainty generated by thelack of clarity in the cancelation process for PDC and PCN as political parties, andthe unpunished beginning of political campaigns before the legal periods, has beennegative.Public opinion has criticized the delay in the election of some public officials such asthe Assistant Deputy Prosecutor which was appointed two years after the establisheddate, or the Chiefs of the Government Ethic Tribunal, whom at the closing of thisreport had two months overdue for their appointment which is against the obligationfrom the state on compliance to law aspects. Also a decision of Supreme ElectoralTribunal taken without legal quorum is included in these public reactions.Regarding the inter-organ relation and the separation of public powers, it can behighlighted as positive, the eminent derogation of decree 743, a regulation that annulledthe functionality of the Constitutional Chamber from the Supreme Court of Justice,by demanding all decisions in unconstitutionality matters were unanimous can behighlighted as positive. A determining factor for the annulment was the participationof civil society that defended the Constitution and became a decisive and importantfactor on this issue.Regarding inter-organ controls between the Executive and Legislative Bodies,there is still, comparing to other presidential period, a high number of vetoes andobservations; however, the use of these mechanisms has been done with complianceto the Constitution, and so there is no threat or damage against the Rule of Lawthrough this practice. There also haven’t been any systematic confrontations betweenthe two bodies in regards to their functioning.Finally, the legislative activity has had an important emphasis in electoral issueds,motivated partially by the unconstitutionality rulings on this matter. But it is relevantto point out the approval of several important laws such as the Multipurpose PortTerminal Specialized in Containers Concession Law, from Puerto de La UniónCentroamericana. LEGAL AND INSTITUTIONAL SITUATION REPORT 5
    • EXECUTIVE SUMMARY Legal Certainty and Public Safety On Legal Certainty matters, during this semester is noted the rulings issued by the Constitutional Chamber, are noted because they clarify that the law´s formation process is unconstitutional as long as it is debated in the General Legislative Assembly, even when it has been passed with a dispensation proceeding, meaning, whenever it hasn’t been previously discussed. On the other hand, for this period, the violence issued in El Salvador has maintained alarming levels. Homicides, which constitute mostly used indicator to measure crime, have accounted until December 31st, 2011: 4,354; 367 more than in 2010. The safety component in the Partnership for Growth Initiative subscribed between the United States and Salvadorean governments is a valuable opportunity to implement norms and strengthen public safety, and the commitments acquired, are the most concrete measures proposed by the government in the matter of safety. The situation of prisons is still alarming despite the efforts made in the electronic safety and the systematization of inmates information systems. Problems such as overcrowding and inside murders still persist. The penitentiary farms are a novelty and an interesting proposal in terms of rehabilitation, but the advances in the project are still very small. Business Climate and Commerce Regulation The setbacks of the competitiveness index and the constant insecurity and lack of suitable conditions for business characterized the business climate, partially explained by the existence of various risks, such as the legal and political uncertainty and the lack of public safety. However, the subscription of the Conjoint Action Plan from Partnership for Growth between the United States and Salvadorean governments, among other activities, generates an important opportunity to drive projects that establish clear rules for a bigger and sustained economic growth. During the semester, a positive highlight is the observation made by the President to the Credit Card System Law reforms that avoided the approval of an unconsulted regulation that would affect the consumer’s access to credit. On the other hand, there is a setback in the arbitration regulation, due to the Constitutional Chamber’s ruling that contradict the nature of the figure by allowing judicial participation through the appealing resource. Also, another negative sign to the business climate, is the approval of tax reforms on December 2011, without the extensive discussion needed and in absence of a fiscal pact to include public expense. Also, another negative aspect was the violation of the tax secret through the publication of confidential fiscal information from several taxpayers.6 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • EXECUTIVE SUMMARYIn the state modernization’s agenda, the approval of the Puerto de La UniónCentroamericana Concession Law and the end of the discussion in the Economic andSocial Council of the Public-Private Partnership Law, is noted as possitive because itestablishes clear rules and competences defined by the international public purchaseof the public infrastructure, expected to be discussed in Parliament next semester.TransparencyAdvances and setbacks in the state’s transparency agenda have characterized thissemester.In the setbacks, the unconsulted creation and issuing made by the Executive bodyof the Access to Public Information Law Regulation, a text with substantial errorsin content that may be considered as unconstitutional, specifically for the facultiesself-attributed by the Executive body: rejecting the list of candidates proposed by thecivil society for the election of the Access to Public Information Institute members;and, the ability to declare the reservation of public information on the basis of“political safety”, a broad and undetermined concept. These two inclusions can affectsubstantially the implementation of this law. These types of attributions are to beregulated exclusively by law in accordance to multiple precedents and rulings fromthe Constitutional Chamber from the Supreme Court of Justice of El Salvador andinternational standards.Another negative aspect observed during the semester was the lack of appointmentfrom Parliament of the Government Ethics Tribunal’s President, as well as theAudit Court’s, Public Ministry’s and Executive Body´s omission to appoint the threeremaining members of that same institution, being the SCJ the only one to appointthe official in time. At the closing of this report, the institution remains chief-lesssince November 1st, 2011, and there is no indication of an advance to come to aconsensus to elect the members over the basis of adequacy and independence.Within the positive advances projected this semester, is the creation of the new andstrengthened Government Ethics Law, since this is a tool that sets to establish formalproceedings of investigation and significant economic sanctions to public servers thatviolate ethic principles.Also, even if there have been substantial setbacks in the Access to Public InformationLaw, there is a noticeable interest from the Anti-corruption and Transparency sub-secretary and from the civil society in general. A hopeful expectation has rise from thefact that a company has been hired to audit the Audit Court. LEGAL AND INSTITUTIONAL SITUATION REPORT 7
    • ACRONYMS • APII: Access to Public Information Institute • APIL: Access to Public Information Law • ARENA: Nationalist Republican Alliance, political party* • CAP: Conjoint Action Plan in Partnership for Growth • CEL: Hydroelectric Executive Commission from Rio Lempa* • CPI: Corruption Perception Index • CS: Competition Superintendence • DR-CAFTA: Dominican Republic-Central America Free Trade Agreement • ESC: Economic and Social Council • FMLN: Farabundo Martí Front for National Liberation, political party* • FUSADES: Salvadorean Foundation for Social and Economic Development • GANA: National Unity Great Alliance, political party* • GEL: Government Ethics Law • GET: Government Ethics Tribunal • GOES: El Salvador’s Government* • IBD: Inter-American Bank of Development • IMF: International Monetary Fund • LACAP: Acquisitions and Contracting of the Public Administration Law* • MESICIC: Mechanism for follow-up on the Implementation of the Inter-American Convention against Corruption • NJC: National Judges Council • OAS: Organization of American States • PCN: National Conciliation Party, political party* • PDC: Christian Democrat Party, political party* • RIOE: Executive Organ Internal Regulation* • SBA: Salvadorean Banking Association • SCJ: Supreme Court of Justice • SET: Supreme Electoral Tribunal • SICA: Central American Integration System* • SPA: Sea Port Authority • TAS: Transparency and Anticorruption Subsecretariat • UNCAC: United Nations Convention Against Corruption • UNPD: United Nations Program for Development • USAID: United States Agency for International Development • WEF: World Economic Forum • WJP: World Justice Project • WTO: World Trade Organization *its acronym in spanish.8 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • INTRODUCTIONThe Legal and Institutional Situation Report from 2011’s second semester, has beenelaborated from the continuous and systematic monitoring and analysis of the groupof facts, resolutions and situations that in our judgment have had the most influencein El Salvador’s legal framework, during the observed period.The methodology is developed from an investigation based in the recollectionand monitoring of information from different trustworthy sources, that includeexternal sources such as media news and international indicators, among them:the Doing Business Report from the World Bank, the Economic Freedom Indexfrom the Heritage Foundation, the Global Competitiveness Index from the WorldEconomic Forum, the Rule of Law Index from the World Justice Project, theCorruption Perception Index from International Transparency, the Open BudgetIndex from the International Budget Partnership, among others, as well as referencesto FUSADES’ own production sources such as studies, reports and memorandumsfrom other departments like the Legal Studies Bulletin, Institutional Positions, andinformation from the Judicial and Legislative Observatories, property of the LegalStudies Department. Once obtained, this information is analyzed with the purpose ofdetermining its impact in the semester and compared with the data from the previoussemester.The report is structured in four chapters that contain the strategic topics that guidethe work from the Legal Studies Department at FUSADES: 1. Rule of Law andInstitutionalism, 2. Legal Certainty and Public Safety, 3. Business Climate andCommerce Regulation and 4. Transparency. In the development of each topic, thecontents are analyzed systematically, to compare them with the results in the report aswell as with previous studies from the Legal Studies Department, such as “DemocraticInstitutions in El Salvador: Performance Valuation and Strengthening Plan I and II”,elaborated jointly between FUSADES and the University of Salamanca, Spain. Thereport closes with the most relevant considerations to characterize the period. LEGAL AND INSTITUTIONAL SITUATION REPORT 9
    • 10 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • 1. INTRODUCTION An established Rule of Law and a strong sense of institutionalism are essential to a country’s development. This report analyses the national reality contrasted with the ideal of the Rule of Law and Institutionalism that El Salvador needs to move towards to; a critical judgment is made to evaluate if in the last six months there have been advances or backward steps in this path, and when pertinent, some suggestions are made to ensure the country is heading over that route. To that effect, Rule of Law will be understood as: “A social situation in which a society functions effectively by a self imposed regulation”. In other words, a state in which society, in an overwhelming majority, subjects itself to the established legal rules1. The concept of institutionalism on the other hand has a double dimension. From a legal point of view, it is understood as the group of constitutional organs in the state’s sovereign powers. Nowadays, these state fundamental organizations, its specific functions, its faculties and competences are stipulated in constitutional provisions, due both to their importance and the desire to establish immutability in time, which is supposed to be inherent to the concept. From the political science point of view, it is understood based on the studies of the “Democratic Institutions in El Salvador: a Performance Assessment and Strengthening Plan”2, which defines institutions as the game rule setters, creating incentives that structure behavior of democracy participants, constitute available choices and accept the elaboration of public policies by structuring the political election and determining the democratic performance. This report refers to legislative changes in the institution structure and their functioning in compliance of these dispositions.12 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • 2. INDICATORS2.1. Trust in institutions measured by the Latin-barometer 2011 ReportThe Institutionalism component in this section, presents the findings from 2011´sLatin-barometer Report, presented by the Latin-barometer Corporation3.Institutions are essential to democracy, because they build the rules to politicalcompetition, resolving collective problems and give structure to the exercise ofpower4. On the other hand, trust is essential to institutions, because it is the resultfrom the perception that citizens have in whether or not the institutions fulfil theirresponsibilities, the more trust, the more legitimate and respected they will be, whichin the long run, strengthens the system.Graphic 1 shows four state institutions and the church. Since 2010, all of these haveincreased their level of trust by citizens towards them.Graphic 1. Trust in institutions 2010 and 2011 Table 1. Assembly Da Trust in Institutions 104 of 07- 06-3 07-2011 201 2010 2011 106 of 07- 07-1 21-2011 201 100 % of “a lot” and “some” 90 113 of 09- 09-1 14-2011 201 80 70 62 64 60 118 of 10- 10-1 27-2011 201 50 38 40 31 28 30 34 121 of 11- 11-1 30 22 25 22 17-2011 201 20 124 of 12- 11-3 7-2011 201 10 0 126 of 12- 12-1 Judicial Power Parliament Political Police Church 20-2011 201 Parties InstitutionsSource: 2. Observations from 2011’s second semester Report. Table Elaborated with data from the Latin-barometer 2011 Assembly Date Observations Count Commentaries 116 of 09-29- Presidential Observations to the 1 Partially Reforms to Wages Law next year 1 10-06- 2011 reforms on the Penal Code, related to accepted on 0 2011 honor crimes. 11-9-2011’s Reforms to Budget Law next year 1 0 Assembly 1 Lifetime Pensions Concession 118 of 10-14- Presidential Observations to the 2 Pending 0 1 10-27- 2011 reforms on the Credit Card System Law. Burial Authorizations 0 2011 Official Positions Exoneration 2 0 119 of 10-27- Presidential Observations to the 3 Overruled on 1 Foreign troops and ships Authorization 11-3- 2011 transitory disposition referred to the 12-20-2011’s 0 0 2011 electoral propaganda authorization. Assembly Person Nationalization 1 10-28- Presidential Observations to the 4 Partially RIAL reforms 0 1 2011 Government Ethics Law. accepted on 2 Wages Law next year 11-17-2011’s 2 Assembly 2 Budget Law next year 2 124 of 12-2- Presidential Observations to the General 5 Pending Special Budgets 0 2 12-7- 2011 Youth Law. 1 2011 Public Official Election 2 3 Treaty Confirmation 3 10 Loan Authorization 4 2 Reforms to Wages Law 5 60 7 Loan or donation Agreement 5 54 “a lot ” plus “plenty” responses 4 State’s asset transfer authorization 6 50 44 44 6 42 Honorific mentions granted 39 39 10 40 37 5 34 Authorization to receive official awards 32 32 31 11 30 30 28 5 Permanent Laws 11 21 0 LEGAL AND INSTITUTIONAL SITUATION REPORT 20 19 19 19 16 12 Municipal Delimitations Tax Exemptions 13 10
    • 3. INTER ORGAN RELATIONS Democracy as a government system implies the coordinated functioning of institutions, so that they cooperate to promote the most convenient policies for the country. But it also implies inter organ controls such as the checks and balances system to help maintain the power leveled. 3.1. Vetoes and observations One of the indicators regarding the relation between the Executive and Legislative Organs is the vetoes and observations, meaning the control process between the powers that the President holds over legislative decrees, because it may highlight the lack of cooperation or confrontation between organs when the usage of this resource is excessive. This semester, as shown in tables 1 and 2, Parliament has received, 7 vetoed decrees and 5 observations from the President. Compared to last semester, there are 4 more vetoes, while 5 less observations. With these, the President now adds 23 vetoes and 41 observations in two years and a half of his administration. In this period, again, there is a high average of vetoes considering the elapsed time; if this pace remains, in 5 years there would be a total of 46 vetoes, which would be the second highest number in the last 5 administrations, only behind Francisco Flores’ administration, which had 59 vetoes. The comment made last semester about vetoes and observations was that this activity followed a normal course of the inter organ control use and the inexistence of a systematic confrontation is still valid. It’s worth highlighting that 5 from the 7 vetoes have been issued by reasons of inconvenience, which implies an inter organ control of political nature. With this, it can be said that the control has consisted in the President considering that the laws approved are inconvenient or untimely, but not contrary to the Constitution, with the exception of some reforms on the pro person vote. It is noted that the present Parliament has for the first time overruled a veto from President Funes, on the Tobacco Law. This is the same as saying that while the President considered some elements of the law inconvenient, a qualified majority in Parliament considered otherwise.14 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • INTER ORGAN RELATIONS Table 1. Vetoes from 2011’s second semester Table 1. Vetoes from 2011’s second semester Assembly Date Veto Count Reason 104 of 07- 06-30- Presidential Veto over the reform to 1 Inconvenience 07-2011 2011 the decree that contains the Special Law to facilitate the cancelation of agrarian and agricultural debts. 106 of 07- 07-18- President Mauricio Funes veto to the 2 Inconvenience. 21-2011 2011 Tobacco Control Law. Overruled 07-22- 2011 113 of 09- 09-13- Presidential Veto over the transitory 3 Inconvenience 14-2011 2011 dispositions of the Industrial Promotion National Bank and the Salvadorean 62 64 Investment Corporation Law. 118 of 10- 10-12- Presidential Veto over the reforms to 4 Inconvenience 27-2011 2011 the National Security Academy (NSA) Organic Law.30 34 121 of 11- 11-14- Presidential Veto over the reforms on 5 Unconstitutionality 17-2011 2011 the Electoral Law. 124 of 12- 11-30- Presidential Veto over the dispositions 6 Inconvenience 7-2011 2011 of payment options for people who obtained financing to acquire shares of private sugar production houses. 126 of 12- 12-19- Presidential Veto to the transitory reforms 7 UnconstitutionalityPolice Church 20-2011 2011 of the payment options contained in the special dispositions for people who obtained financing to acquire shares from the companies of sugar production houses, according to the established in the Sugar Production House and Alcohol Plants Law. Source: Elaborated with the Legislative Observatory Bulletin from n° 152 to n° 175 Reforms to Wages Law next year 1 0 Reforms to Budget Law next year 1 Regarding the observations, this semester, there were two observations overruled, 0 these were made last semester on the Territorial Order and Development Law and Lifetime Pensions Concession 1 0 the reforms on the Agriculture and Fishing Promotion General Order Law. With this, 1 Burial Authorizations 0 all the observations made last semester are settled5. In this subject Decrees published in the O Table 3. it is necessary to Official Positions Exoneration 2 remember that Parliament does not have a deadline established in the legal system to 0 1 decide over observations, but observations have been solved in a reasonable time. Foreign troops and ships Authorization 0 Institution Person Nationalization 0 Transitory decrees issued by the Pr 1 RIAL reforms 0 Reforms to Extraordinary Budget fo 1 Wages Law next year 2 Audit Court 2 2 Ministry of Education Budget Law next year 2 Tax Ministry 0 Special Budgets 2 Reforms to existing regulations and 1 Public Official Election 2 University of El Salvador Treaty Confirmation 3 Ministry of Economy 3 10 Ministry of Public Health and Socia Loan Authorization 4 2 Ministry of Agriculture and Farming Reforms to Wages Law 5 LEGAL AND INSTITUTIONAL SITUATION REPORT SIGET 15
    • Judicial Power Parliament Political Po Parties INTER ORGAN RELATIONS Institutions Table 2. Observations from 2011’s second semester Table 2. Observations from 2011’s second semester Assembly Date Observations Count Commentaries 116 of 09-29- Presidential Observations to the 1 Partially 10-06- 2011 reforms on the Penal Code, related to accepted on 2011 honor crimes. 11-9-2011’s Assembly 118 of 10-14- Presidential Observations to the 2 Pending 10-27- 2011 reforms on the Credit Card System Law. 2011 119 of 10-27- Presidential Observations to the 3 Overruled on 11-3- 2011 transitory disposition referred to the 12-20-2011’s 2011 electoral propaganda authorization. Assembly 10-28- Presidential Observations to the 4 Partially 2011 Government Ethics Law. accepted on 11-17-2011’s Assembly 124 of 12-2- Presidential Observations to the General 5 Pending 12-7- 2011 Youth Law. 2011 Source: Elaborated with the Legislative Observatory Bulletin from n° 152 to n° 175 60 54 Percentage “a lot ” plus “plenty” responses 50 44 44 42 39 39 40 37 34 32 32 31 30 30 28 21 19 19 19 20 16 12 10 0 Uruguay El Salvador Panamá Chile Rep. Dominicana Ecuador Brasil Honduras Costa Rica Venezuela Nicaragua Argentina Paraguay Colombia Guatemala México Bolivia Perú Latin America Country16 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • 2011 113 of 09- 09-13- Presidential Veto over the transitory 3 Inco 14-2011 2011 dispositions of the Industrial Promotion National Bank and the Salvadorean 62 64 Investment Corporation Law. 118 of 10- 10-12- Presidential Veto over the reforms to 4 Inco 27-2011 2011 the National Security Academy (NSA) 38 Organic Law. 25 22 28 30 34 4. REGULATORY ACTIVITY 121 of 11- 17-2011 11-14- 2011 Presidential Veto over the dispositions 6 124 of 12- 11-30- Presidential Veto over the reforms on 5 the Electoral Law. Unco Inco 7-2011 of payment options for people who 2011 4.1. Legislative Activity obtained financing to acquire shares of private sugar production houses.wer Parliament Political Police Church 20-2011 2011 of the follow up transitory reforms 7 Through the Legislative Observatory, there has been a dailypaymentto theon Parliament’s 126 of 12- 12-19- Presidential Veto options contained in Unco Activity. In regards to its production, there has been a special dispositionsdecrees issued the count on the for people who Parties during the semester, which have not necessarily turned into law. In total,acquire are 196 obtained financing to there shares from the companies of sugar decrees, classified according to various criteria, as shown in the following. Institutions production houses, according to the established in the Sugar Production House and Alcohol Plants Law. Graphic 2: Legislative Production 2011’s second semester vs. 2010’s second semester. from 2011’s second semester Count Commentariesbservations to the 1 Partially Reforms to Wages Law next year 1e Penal Code, related to accepted on 0 11-9-2011’s Reforms to Budget Law next year 1 0 Assembly 1 Lifetime Pensions Concession Observations to the 2 Pending 0 1e Credit Card System Law. Burial Authorizations 0 Table 3. Decr Official Positions Exoneration 2 0 Observations to the 3 Overruled on 1position referred to the 12-20-2011’s Foreign troops and ships Authorization 0 Institutionaganda authorization. Assembly Person Nationalization 0 Transitory d 1 Observations to the 4 Partially RIAL reforms 0 Reforms to E 1thics Law. accepted on 2 Audit Court Wages Law next year 11-17-2011’s 2 2 Ministry of E Assembly Budget Law next year 2bservations to the General 5 Pending Tax Ministry 0 Special Budgets 2 Reforms to e 1 Public Official Election 2 University o Treaty Confirmation 3 Ministry of E 3 10 Ministry of P Loan Authorization 4 2 Ministry of A Reforms to Wages Law 5 SIGET 7 Loan or donation Agreement 5 New regulati 4 State’s asset transfer authorization 6 Supreme Ele Honorific mentions granted 6 Permanent 10 5 Ministry of N34 Authorization to receive official awards 32 32 30 31 11 Ministry of E 28 5 Permanent Laws 11 Ministry of E 21 0 19 19 19 Municipal Delimitations 16 Ministry of L 16 12 29 Cultural Affa Tax Exemptions 25 16 Ministry of F Budget Law reforms 28 18 Civil Aviatio Transitory Laws and Law extensions 31Honduras Costa Rica Venezuela Nicaragua Argentina Paraguay Colombia Guatemala México Bolivia Perú Latin America 14 CONACYT Reforms to existing laws 31 FICAFE 0 5 10 15 20 25 30 35 Total Country Source: Elaborated with the Legislative Observatory Bulletin from n°. 152 to n° 175 Decrees issued were mostly legal reforms, transitory laws and law extensions. In this semester, there has been an emphasis on the reforms of electoralTable 7. Resolutions reac laws for the upcoming elections, especially to the regulations on independent candidates and unlocked lists. Category Disciplinary Function Judge Appointment Other Administrative decisio Jurisdictional decisions Last minutes approval and a modification LEGAL AND INSTITUTIONAL SITUATION REPORT Various 17 Total
    • agrarian and agricultural debts. Deputy General Prosecutor October 6th,07- 07-18- President Mauricio Funes veto to the 2 Inconvenience. Prosecutor (Art. 26 b) General1 2011 Tobacco Control Law. Overruled 07-22- Prosecution Organic 2011 Law)09-1 09-13- 2011 REGULATORY ACTIVITY Presidential Veto over the transitory dispositions of the Industrial Promotion 3 Inconvenience Two Members of National Parliament August 18t 2011 National Bank and the Salvadorean Judge Council Investment Corporation Law. Substitute Parliament August 18t10- 10-12- Presidential Veto over the reforms to 4 Inconvenience Magistrate 20111 2011 the National Security Academy (NSA) from the SCJ Organic Law. Member of the Supreme Court of November11- 11-14- Presidential Veto over the reforms on Following, there are the decrees to reform the 2011´s Budget Law Justice (SCJ) 5 Unconstitutionality Government and the exoneration 20111 2011 the Electoral Law. Ethics Tribunal of particular taxes. About the first, the amount of reforms is especially high due to Justice from loans. President November12- 11-30- Presidential Veto over the dispositions the addition of new institutions and new financing mainly 6 Inconvenience Minister 2011 2011 of payment options for people who obtained financing to acquire shares of Although in number, there are less new laws, the 11 decrees that contain the ones private sugar production houses. approved by Parliament are of great importance. Amongst them, we can highlight12- 12-19- Presidential Veto to the transitory reforms 7 Unconstitutionality Table 5: Positions identified as unresolved as to1 2011 of the payment options contained in the Salvadorean System for Quality and Productivity Creation Law, the Multipurpose the special dispositions for people who Port Terminal Specialized in Containers Concession Law,Official Puerto de La Unión Without Offici Public from Responsible obtained financing to acquire shares Centroamericana, the Financial System for Development Promotion Law and the of Appointment from the companies of sugar new Government Ethics Law. production houses, according to the President and - Parliament October 31s established in the Sugar Production 3 members of (President) period was du House and Alcohol Plants Law. Finally, Parliament approved five decrees to the ratify loans, - President up to positions. adding US$338,212,173.80 Government - Public Ministry Ethics Tribunal - Audit Court 4.2. Regulatory Activity The following classifies the regulations issued in 2011’s second semester. Table 3. Decrees published in the Official Gazette during 2011’s second semester Table 3. Decrees published in the Official Gazette during 2011’s second semester 2nd. Institution Semester Transitory decrees issued by the President 40 Reforms to Extraordinary Budget for Economic Reactivation 23 Audit Court 17 Ministry of Education 12 Tax Ministry 10 Reforms to existing regulations and decrees 8 University of El Salvador 8 Ministry of Economy 6 10 Ministry of Public Health and Social Assistance 6 Ministry of Agriculture and Farming 6 120.00% SIGET 6 New regulation issued by the President 4 100.00% Supreme Electoral Tribunal 4 10 Permanent Decrees issued by the President 3 outcome/entered cases % 80.00% Ministry of National Defense 2 11 Ministry of Environment 2 60.00% 11 Ministry of Environment (temporary bans) 2 16 Ministry of Labor and Social Prevision 2 40.00% 29 Cultural Affairs Secretary from Presidency 1 25 16 Ministry of Foreign Affairs 1 20.00% 28 18 Civil Aviation Authority 1 31 0.00% 14 CONACYT 1 31 FICAFE 10 15 20 25 30 35 Total 166 Source: Own Elaboration with basis on the Legislative Index of Roberto Vidales, investigator from the Legal Investigation Department of FUSADES. 18 Table 7. Resolutions reached by INSTITUTIONAL SITUATION REPORT LEGAL AND Full Court in 2011’s second semester Table
    • REGULATORY ACTIVITYThis semester remained with the tendency to decrease the number of regulationsissued by the President, and this function, is being delegated more with every timeto other Executive Body Organs, mainly ministries, but they don’t use the name ofregulations to refer to them, instead, they’re called policies, instructives, etc. Therehas been discussion over the fact that other organs from the Executive Body besidesthe President are issuing regulations, and thus clarity on this regulatory competenceis needed.6.It is significant that the Public Health and Social Assistence Ministry has issued andpublished in the Official Gazette, three policies7, which by their nature shouldn’tbe approved by a government act, as a decree, because they are political acts, thatuncover an action plan and in no case should contain regulations, a reason not to bepublished in the Official Gazette. In this case, in two out of three policies, meaningin the National Mental Health Policy and in the National Medicine Policy, thereare some plans to be followed by the government, but it also contains mandatoryregulations (applicable to the Ministry) of legal character, for example, regulationsover private health institutions and applicable dispositions to all health professionals,which shouldn’t be contained in a policy.Finally, it is worth highlighting that two regulations of important laws have beenissued, such as the Access to Public Information Law Regulation and the ProductionPromotion Law Regulation.4.3. Individual votes from Parliamentary Members matter and its lack ofadvancesDuring this semester, individual votes of Parliament Members are still not public.Publicity of individual votes would represent an advance in the transparency andaccountability of this Body, because it would allow citizens to follow the performanceof the legislators that represent them. LEGAL AND INSTITUTIONAL SITUATION REPORT 19
    • 5. LAW ENFORCEMENTemesterond semester 5.1. Appointment of Public Officials Table 4. PublicOfficialsmain Appointments from 2011’s second semester. Table 4. Public Officials main Appointments from 2011’s second semester. Table 4. Public Officials main Appointments from 2011’s second semester. Reason Reason Count 1 Inconvenienceconvenience Public Official Public Official Responsible of of Responsible Appointment Date ¿Delay? ¿Delay? Appointment Date Appointment Appointment Deputy General Prosecutor October 6th, 20118. Two years and 17 Deputy Prosecutor General Prosecutor (Art. 26 b) General October 6th, 20118. Two years and 17 days. 2 Inconvenience. convenience. Overruled 07-22- Prosecutor (Art. 26 b) General Prosecution Organic days.verruled2011 07-22- Prosecution Organic Law) 3 Inconvenience Two Members Parliament Law) August 18th, de 2 days011 convenience TwoNational of Members Parliament 2011 August 18th, de 2 days Judge Council ofSubstitute National Parliament 2011 August 18th, de No delay 4 Inconvenience Judge Council Magistrate 2011 SubstituteSCJ from the Parliament August 18th, de No delayconvenience Magistrate the Member of Supreme Court of November 2011 10th, No delay Government Justice (SCJ) 2011 5 Unconstitutionality from the SCJ Ethics Tribunal Member of the Justice President Court of Supreme November 22nd, 15 days afterdelay November 10th, No the 6 Inconvenience Government Justice (SCJ) 2011nconstitutionality Minister 2011 resigning of the Ethics Tribunal previous Minister Justice Own Elaboration. Source: President November 22nd, 15 days after theconvenience 7 Unconstitutionality Minister 5: Positions identified as unresolved as to December 16th, 2011. Table 2011 resigning of the To this date, the following appointments have been identified previous Minister Public Official Responsible Without Official since: as unresolved: Supplementary of Appointment Regulation due tonconstitutionality 16th, lack of appointment Table 5: Positions identified as OctoberDecember 2011 December 16th, 2011. Table 5: Positions identified as unresolved as to 2011. unresolved as to No regulation. President and - Parliament 31st, Public Official (President) 3 members of Responsible period was due for all Without Official since: Supplementary the - President positions. Government of Appointment - Public Ministry Regulation due to Ethics Tribunal - Audit Court lack of appointment President and - Parliament October 31st, 2011 No regulation. 3 members of (President) period was due for all the - President positions. Government - Public Ministry Ethics Tribunal - Audit Court 700 650 600 572 583 Source: Own Elaboration. 550Table 3. Decrees published in the Official Gazette during 2011’s second semester 500 450 It is observed that there is some Public Officials appointments still delayed which Cases 400 2nd. 350 307 Institution affect Rule Semester It must be remembered that this has repercussions on the of Law. 300 250 204 Transitory decrees issued by the President institutions without head officials, which function irregularly. It is necessary to respect 40 200 194 165 149 700 150 Reforms to Extraordinary Budget for Economic Reactivation established periods. the 23 650 100 55 572 583 50 600 Audit Court 17 0 nal 550 il ousecrees published in the Official Gazette duringThe most noted case is the one of the Assistant Deputy Prosecutor, for which 2011’s second semester utio Civ enti -50 -11 stit Con t Ministry of Education 12 500 -100 Con 450 Tax Ministry Parliament created 10 through a reform, sanctioning the Deputy Prosecutor with Cases 400 Chambers Reforms to existing regulations and decrees 2nd. 8 350 307n University of El Salvador destitution ifSemester comply with the obligation to appoint the offices. This ended he did not 300 8y decrees of Economy the President Ministry issued by in the appointment 6 this position after a two-year delay9. of 250 194 40 200 2° sem. 2011 150 1° sem. 2011 165 o Ministry of PublicBudgetand Social Assistance Extraordinary Health for Economic Reactivation 23 6 100 Ministry of Agriculture and Farming 5.1.1. Lack of appointment of members for the Government Ethics Tribunal 6 50 rt 17 120.00% 0 SIGET 6 101.92% -50 utio nal 104.86% -11 Civ il stitof New regulation issued by the President Education 412 -100 Con The President of the Government Ethics Tribunal concluded her election period 100.00%trySupreme Electoral Tribunal October 31st, 2011,410 there was no timely appointment for her successor. Although but 86.82% utcome/entered cases % o Permanent Decrees issued bydecrees existing regulations and the President 3 8 80.00% 86.17% Ministry of National Defense 2 63.19%y of El Salvador Ministry of Environment 2 8 73.04% 60.00%of Ministry of Environment (temporary bans) Economy 26 2° sem. 2011 1° sof MinistryHealth and SocialPrevision Public of Labor and Social Assistance 20 LEGAL AND INSTITUTIONAL SITUATION REPORT 26 40.00%
    • LAW ENFORCEMENTin the Parliament from November 3rd, there was an attempt to proceed with thiselection, at the end, the veredict left the agenda, and at this report’s closing date,the appointment was 50 days overdue. The same occurs with the appointments thePresident, the Public Ministry and the Audit Court must make.On its part, the Supreme Court of Justice, in November 10th’s session appointed theholding and substitute member that was its responsibility to assign. This appointmentwas performed in time, given that the SCJ representative function period finishedNovember 16th, 2011. Although there was a knowledge of interviews for applicants,these were not made public given that SCJ sessions are not open to public.It is important to guarantee the maximum transparency in the Public OfficialsAppointment Process in the different organs of state, and do these appointments ina timely manner.5.1.2. Appointment Process of Members for the National Judiciary CouncilAugust 18th, 2011, Parliament designated two members from the National JudiciaryCouncil (NJC) for the period to finish August 18th, 2016. The appointment was donefrom the list of three candidates proposed by the University of El Salvador andprivate universities.Unlike the appointment made in 2010, when the officials were named with 64 daysof delay, this time, there was only a two days delay, which means the non complianceto the law was minimum and had no significant effects over the institution’s work.In terms of procedure, it is worth mentioning that even though the candidates wereinterviewed in the Political Commission, the process did not have the necessaryopening to citizens. It wasn’t even as public as the election of the Audit Court’sMagistrates, where there was access to the curriculum vitae of the candidates andthere were, although very basic, public interviews to the applicants.5.2. Anticipated Electoral CampaignArt. 81 from the Constitution establishes that electoral propaganda will be allowedtwo months before the Parliament representatives’ elections and a month before inthe case of Municipal Majors, which is confirmed in Art. 230 Electoral Law (E.L.).Taking into consideration that the next elections are scheduled for March 11th, 2012,there shouldn’t be any candidates announced before January 11th or and in the caseof candidates for Major, before February 11th, 2012.Nonetheless, the promotion of candidates from different parties has begun severalmonths in advance, in a clear violation to the law and the Constitution, and theSupreme Electoral Tribunal, the authority that according to Art. 79 E.L, who isresponsible of enforcing the Constitution and the laws on his matter, hasn’t done aneffective job at this task.A known argument issued by the parties is that they haven’t asked for a vote, and so,they are not promoting it in any manner; however, this interpretation doesn’t have LEGAL AND INSTITUTIONAL SITUATION REPORT 21
    • 30 22 25 22 % of “a 20 LAW ENFORCEMENT 10 0 Judicial Power Parliament Political P Parties any legal basis, because in terms of reality, the disclosure of candidates and proposal towards the elections is actual propaganda. Institutions FUSADES has been issuing statements in the sense that propaganda is a right for political parties, and also for the independent candidates, but legal boundaries must be respected10; as long as the Electoral Supreme Tribunal sanctions its trespassers. Table 2. Observations from 2011’s second semester It is not convenient for society that uncertainty and confrontation generated during Assembly are extended for longer than the time the Constitution mandates. campaigns Date Observations Count Commentaries 116 of 09-29- Presidential Observations to the 1 Partially 5.3. Legality perception from the 2011 Latin-barometer Report 10-06- 2011 reforms on the Penal Code, related to accepted on 2011 honor crimes. 11-9-2011’s Law enforcement normally is studied from the Public Official’s points of Assembly view, whose actions are 10-14- to what the legal system allows to the 2 obligated to the 118 of limited Presidential Observations them and are Pending righteous fulfillment reforms on the Credit However, compliance to law also applies 10-27- 2011 of their attributions. Card System Law. to citizens, whom must refrain from what is prohibited and comply with what is 2011 mandatory. 10-27- Rule of Law requires the citizen’sto to comply with the law. on 119 of A solid Presidential Observations will the 3 Overruled 11-3- 2011 transitory disposition referred to the 12-20-2011’s Graphic 3 shows the legality propagandaamongst salvadoreans, as a percentage of 2011 electoral perception authorization. Assembly answers like 10-28- “more” and “plenty” to the question: “Would you say Partially “a lot”, Presidential Observations to the 4 salvadoreans comply to the law?” 44% of the polled perceived salvadoreans comply a accepted on 2011 Government Ethics Law. lot or plenty with the law. In international terms, it is not the second highest from Latin America, 11-17-2011’s although if the opposite reading is made, 56% of the polled perceive that Assembly salvadoreans comply very12-2- or not at all with the law. It can be concluded that in Latin America, 124 of little Presidential Observations to the General 5 Pending the generalized perception Law. people comply very little with the law, and so, the 12-7- 2011 Youth is that 2011 perceived in El Salvador is high, but still, requires much more civic culture to 44% promote Rule of Law. Graphic 3: Legality Perception in Latin America 60 54 Percentage “a lot ” plus “plenty” responses 50 44 44 42 39 39 40 37 34 32 32 31 30 30 28 21 19 19 19 20 16 12 10 0 Uruguay El Salvador Panamá Chile Rep. Dominicana Ecuador Brasil Honduras Costa Rica Venezuela Nicaragua Argentina Paraguay Colombia Guatemala México Bolivia Perú Latin America Country Source: Own elaboration with data from 2011 Latin-barometer Report22 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • 6. JUSTICE ADMINISTRATIONThe Judicial Body acts like an arbitrator between the political powers, as a control forthe organs of state and as a guarantee of citizens’ rights, which makes it vital for itsfunctioning to achieve a democratic republic.6.1. Upcoming Magistrate ElectionsFive new Supreme Court of Justice magistrates must be appointed before July 2012:one for the Constitutional Chamber, two for the Administrative Contentious Chamber,one for the Civil Chamber and one for the Criminal Chamber. This appointment isone of the most important events in the strengthening of a Constitutional Rule ofLaw State, as the SCJ is required to decide ultimately, over fundamental rights andtheir extent. The respect to this appointment process which is legally established andthe adequacy of the candidates, determine in good part, the quality of the protectiongiven to rights in the future. That is the responsibility invested upon Parliament innaming the magistrates for the SCJ.During this semester, the process has begun with the publication by the NJC withthe list of lawyers that comply with the requirements to be magistrates and theofficial call to representative Lawyer Associations from El Salvador to nominate andaccredit possible candidates. Citizens must be vigilant, auditing this process, to seethat it is carried out with the highest levels of transparency and compliance to theConstitution.In this sense, various civil society organizations11, amongst which FUSADES canbe found, have formed a Network for Judicial Independency, with the purposeof promoting actions that generate awareness in society and relevant participantsof the need to rely on an independent and with high technical standards SupremeCourt of Justice, and the imperative need for the election process to be executedwith the maximum transparency possible and with full compliance with constitutionalprovisions.On its part, FUSADES, the Legal Investigations Institute from José Simeón CañasUniversity and the Legal Investigations Institute from Dr. José Matías DelgadoUniversity, published the “Supreme Court of Justice’s Magistrate Selection ProcessStudy”12, as a contribution to improve the magistrate selection process. On the basisof this document, there were some legislation reforms proposed to Parliament13,which, if approved, would provide more transparency and efficiency to the selectionprocess, allowing to obtain a better prospect of magistrates based on their capacityand morality.The National Lawyer Unit for Justice and Democracy (UNAJUD) has also filed aproposal of reform to the National Judge Council Law on this topic, in the search ofbroadening the participation of lawyer associations in the process14. The initiave grantsmore attributions to NJC and less to El Salvador’s Lawyer Federation, for instance, itwould be the NJC who would issue the regulation to organize the candidate electionsthat the lawyers propose to Parliament to choose as magistrates. LEGAL AND INSTITUTIONAL SITUATION REPORT 23
    • P l Prosecutor October 6th, 20118. Two years and 17 B b) General days. JUSTICEution Organic ADMINISTRATION M 2 ent August 18th, de 2 days 2011 6.2. Decree 743 Derogation J ent August 18th, de No delay 2 2011 July 27th, 2011, Parliament derogated the controversial 743 Decree, giving back to the Constitutional Chamber the attribution to dictate resolutions on unconstitutionalityme Court of November 10th, No delay regulations or decrees, with a majority of four votes instead of requiring over laws, A (SCJ) 2011 its unanimity. 2 nt November 22nd, 15 days743, approved June 2nd, 2011, restricted Constitutional Chamber, because Decree after the J 2011 resigning resolutions to be provided unanimously, and was extendedly rejected by it required of the 2 different society sectors, as it was mentioned in the Legal and Institutional Situation previous Minister Report of 2011’s first semester . 15 After its derogation, the operation of the Constitutional Chamber has been respected J entified as unresolved as to December 16th, 2011. any other legal attempts to restrict their functions, which is and there haven’t been 2 onsible Without Official since: positive for institutionalism. Supplementary pointment Regulation due to A 6.3. Precedent Activity in the Supreme Court of Justice´s Chambers lack of appointment 2 iament October 31st, 2011 The regulation. No following presents a summary of the activity of SCJ’s chambers during 2011’sident) period was due for all second semester. The data covers from July 1st and November 30th 2011. The numbersident positions. of cases represents the sum of the cases provided in each chamber in any subject and lic Ministry instance of their competence; and in outcomes, all the cases finished by a definitive N it Court resolution or any normal process termination16. Graphic 4. Cases entered, outcome and accumulated by SCJ’s chambers in 2011’s second semester 700 650 600 572 583 550 er 500 450 N Cases 400 Entered 350 307 Outcome 300 Accumulated 250 204 194 200 165 149 150 100 55 50 0 N l s ona -11 Civ il tiou al -50 stit uti ont en Pen -100 Con C Chambers Source: Own Elaboration with data from the SCJ’s chambers. 2° sem. 2011 1° sem. 2011 J 120.00% 101.92% 104.86% 100.00% 86.82% F ses % 24 LEGAL AND INSTITUTIONAL SITUATION REPORT 2
    • 2005 Public Official Responsible Without Official since: Supplementary of Appointment Regulation due to August 30t lack of appointment 2006 JUSTICE ADMINISTRATION President and - Parliament October 31st, 2011 No regulation. 3 members of (President) period was due for all the - President positions. Government - Public Ministry No data Ethics Tribunal - Audit Court Graphic 4 shows the number of cases entered on each chamber, the number of cases solved, and the number of cases added or subtracted from their pending matters. 700 650 600 572 583hed in the Official Gazette during 2011’s second semester A negative value in the accumulated cases graphic implies the resolution of more 550 500 cases than the ones entered and therefore, a reduction in the pending cases. The No data 450 Cases 400 Entered 2nd. Semester Constitutional Chamber is the one that has solved the most cases, but is also the one 350 300 307 Outcome Accumulated d by the President 40 that has received the most, so the cases solved barely equal the cases entered. It is the 250 200 194 165 204 149 only chamber to solve more cases than the ones entered in the evaluated period. 150 y Budget for Economic Reactivation 23 100 55 50 No data 17 0 tion al -11 Civ il ntio us al -50 stitu te Pen Con 12 Con Graphic 5: Relation between outcome/entered cases from 2011’s second semester compared to 2011’s -100 10 Chambersulations and decrees 8 first semester 8 6 2° sem. 2011 1° sem. 2011h and Social Assistance 6and Farming July 6th, 20 6 120.00% 6 101.92% 104.86% y the President 4 100.00% nal 4 86.82% February 8 outcome/entered cases % ed by the President 3 80.00% 2010 86.17% 81.92% ense 2 63.19%t 2 73.04% 60.00%t (temporary bans) 2ocial Prevision 2 40.00% y from Presidency 1 rs 1 20.00% 1 0.00% 1 July 22nd, Constitutional Contentious Civil Criminal 2010 1 166 Chambers Source: Own Elaboration with data from the SCJ’s chambers Graphic 5 portrays a different way to reflect the data in graphic 4, expressing thell Court in 2011’s second semester resolved cases 8. Partidary candidates’ regulation vs. the one for non-partidary candidates Table as a percentage of the entered cases, which will be called effectiveness Total In Agenda but Total percentage, which will indicate only what Candidates Criteria Partidary is happeningNonterms of case accumulation in Partidary Candidates subjects in Votes to be inscribed in 3 out of 5 votes 3 out of 5 votesResolutions not resolved Agenda in the different chambers. This does not intend to measure efficiency, because it does Supreme Electoral Tribunal 14 14 28 not reflect the technical capacity in the chamber or the duration of the cases solved, (SET) Reelection Opportunity Allowed Allowed 6 6 12 or the different complexity levels and work quality for the job the calling for overall, Time to collect signatures Before the calling of Before performed; and 15 31 46 the number of cases entered will influence the effectiveness percentage. In summary, elections elections 17 39 56 the effectiveness will be known with certainty by solving the cases campaign but the Liability with third parties No bail needed Bail of 25% entered, bail budget needed. 30 3 33 indicator movementContributions have to be explained for each case. Campaign causes will They can contribute with They cannot contribute with 0 34 34 all they can for the more than 50% of the 82 127 209 In comparison to last semester, the Criminal Chamber campaign budget its effectiveness, campaign has improved Funds in case of candidate Not regulated Funds left will be transfered going from withdrawal 120%, while the ConstitutionaltoChamber has done it going 82% to SET. from 86% to 102%. be nominatedofAsthe wish Territory to The rest they chambers present awish As they reverse movement: the for Administrative Contentious Chamber from 87% to 73%; while the Civil Chamber reduced its efficiency form 105% to 63%. If all 2011 is considered (until November 30th), it is observed that the Constitutional Chamber accumulated 75 cases to their pending, ones the Criminal Chamber solved the same amount of cases as the ones entered, and by doing so, did not increase their LEGAL AND INSTITUTIONAL SITUATION REPORT 25
    • JUSTICE ADMINISTRATION pending; the Administrative Contentious accumulated 89 new cases and the Civil Chamber added 104 cases to their pending ones. 6.4. Unconstitutionality Rulings During the past six months, there have been the following unconstitutionality rulings17: Table 6: Unconstitutionality definitive rulings in 2011’s second semester 6.4. Unconstitutionality Rulingsmester. Process Ref. and Ruling Subject Ruling Process Duration Beginning Date March 21st, 37-2007 Unconstitutionality against Art. The alleged 4 years and 6 2007 accumulated 294 inc. 2° Penal Process Code, unconstitutionality months from, about punishment substitution on was non existent September certain crimes. 14th, 2011 June 2nd, 16-2005 from Unconstitutionality against Art. The alleged 6 years and 3 2005 September 1059 from Civil Code that allows unconstitutionality months 21st, 2011 conditioning an inheritance to was found existent marriage. April 25th, 10-2006 from Unconstitutionality against Art. The alleged 5 years and 5 2006 September 151, ord. 10° from Tax Code unconstitutionality months 29th, 2011 was non existent January 24th, 11-2007 Unconstitutionality against Art. 71 The alleged 4 years and 3 2007 accumulated, from the Drug Related Activities unconstitutionality months from October Regulation Law. was non existent 3rd, 2011 July 13th, 54-2005 of Unconstitutionality against Art. The alleged 6 years and 3 2005 October 5th, 214-b from Penal Code unconstitutionality months 2011 was non existent August 30th, 20-2006 from Unconstitutionality against Art. The alleged 5 years and one 2006 October 7th, 145 inc. 1° from The Organic unconstitutionality month 2011 Judicial Law for considering was non existent unconstitutional the practice of a notary qualification examination No data 10-2011 from Unconstitutionality against Arts. 2 The alleged No data October 24th, inc. 2º, 5 inc. 1º, 6, 8 letters c) and unconstitutionality 2011 d), 9 letters c) and d), 10 inc. 4º was found existent and 11 from Legislative Decree n° 555, from 12/16/2010, published in the Official Gazette n° 8, edition 390, from 1/12/2011 that contains provisions for the nomination of non-partidary candidates for the legislative elections. Entered No data 15-2011 Unconstitutionality against Arts, The alleged No data Outcome accumulated 11, 14 and 15 from the State’s unconstitutionality Accumulated from General Budget Law for the fiscal was found existent November 4th, exercise for the year of 2011. 2011 No data 57-2011 from Unconstitutionality against Arts. The alleged No data November 7th, 217 inc. 2°, 238 incs. 2º and 3º, 250 unconstitutionality 2011 inc. 3°, 253-C inc. 4° letters c) and was found existent d), and 262 inc. 1º letter f) numbers 1, 2, 3, 4, y 5 from the Electoral Code about partidary lists. July 6th, 2005 42-2005 from Unconstitutionality against Art. The alleged 6 years and 4 November 7th, 262 from the Electoral Code about unconstitutionality months 2011 the electoral system based in was non existent quotients and residues. February 8th, 11-2010 from Unconstitutionality against Art. 66- The alleged 1 year and 9 2010 November A from the Mediation, Conciliation unconstitutionality months 30th, 2011 and Arbitration Law, because it was non existent allows judicial appeal of arbitrations; and against Arts. 161 and 165 from the Public Acquisitions and Contracting Law for restricting state Arbitration to Law Arbitrations. 16-2010 Unconstitutionality against Art. The alleged July 22nd, accumulated 252 ord. 2º from the Civil and unconstitutionality 1 year and 5 2010 from Commercial Procedures Code. was found existent months December 14th, 2011 Source: Own Elaboration with data published by the SCJ’s Constitutional Chamber.y candidatesates 26 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • JUSTICE ADMINISTRATIONThe following presents the analysis on some unconstitutionality rulings to behighlighted and that have been extendedly discussed during the semester.6.4.1. Unconstitutionality against budgetary transfers between state brancheswithout legislative approvalOn November 4th, 2011, SCJ’s Constitutional Chamber declared unconstitutionalityover the Budget transfers from contingence expense provisions from one branch toanother, without legislative approval.The chamber stated that having a contigency expense provisions is not unconstitutional,but the transfer from one branch to another is a budget modification and thus, mustcount with parlamentary approval respecting the qualitative specialty from the budget,contained in Art. 131 ord. 8°, related to Arts. 86 inc. 1° and 167 ord. 3° paragraph 2°Constitution.This ruling follows the same logic than the one from 2010, in which the formerlyknown “secret provision” was declared unconstitutional. The resolution contributesto the maintenance of the separation of powers established in the Constitution,because it reserves to Parliament the attribution of modifying the budget, withoutallowing the Executive Organ to do so. It is important that the following budgetssubject to the criteria presented by the chamber on this matter, and this has happenedin 2012’s Budget Law, which ceases to allow transfers between state branches.6.4.2. Unconstitutionality against dispositions that prohibited the vote for aperson18On November 7th, 2011, the Constitutional Chamber declared unconstitutional aseries of legal dispositions that regulated the vote in closed and unblocked lists, forconsidering that it privileged the vote for a political party, affecting the constitutionalguaranteed quality, that the vote must be direct and free. Also, a disposition banningnon partidary candidates to be nominated for a territory different from their residencyor birth place was expelled from the legal system, for considering that since that wasnot required for partidary candidates, it affected the equality principle.Concretely, the Constitutional chamber declared unconstitutional to count the votesin favor a party flag when the mark was: a) on a flag or list and a candidate from thesame party or coalition, b) when the mark is in two or more candidates from a samelist, c) when the mark is in a flag and two or more candidates from a same party orcoalition. It was interpreted that this constitutes a violation of the free vote. It alsodeclared unconstitutional the equitable partition, where possible, of the votes for aparty flag between the first candidates on the list, because it affected the equality ofthe vote. With the reform, the assignment of a position is done taking into accountindividual marks. Thus, as far as candidates with individual marks don’t compete withcandidates that have marks made by flag, the equality of the vote is accomplished andthe ruling is fulfilled. LEGAL AND INSTITUTIONAL SITUATION REPORT 27
    • JUSTICE ADMINISTRATION It was also declared unconstitutional to require non-partidary candidates to be native or to reside in the territory they are nominated to, because it violates the equality right. In this sense, it declared over the impossibility to vote for more than one non- partidary candidate and established the possibility of elaborating structured lists. The reason behind the ruling was foreseeable, because it is congruent with the line that the Chamber has drafted in constitutional electoral matters, in which, regarding the free character of the vote, it has interpreted that people have the ability to affect the result of the final election; and regarding the non-partidary candidates, it has been inclined to allow them19. In this sense, it is not legally acceptable that parties have mechanism to impose people to be parliamentary members, going above the elector preferences, or that independent candidates compete in disadvantage with partidary candidates. The ruling however, took into account the importance of political parties by not declaring unconstitutional the vote for a flag, as long as that doesn’t turn into an advantage for some candidates above others from the list. 6.4.3. Unconstitutionality against the electoral system based in quotients and residues On November 7th, 2011 the Constitutional Chamber resolved a claim for unconstitutionality presented in 2005 in which Art. 262 from the Electoral Code was subjected for considering that the electoral formula to assign legislative positions based in quotients and residues affected the vote equality, because a representative assigned by quotient needed more votes than one assigned by residues. The Chamber provided that the system is not unconstitutional, because it preserves pluralism, minority representation and electoral diversity. The equality of vote established in Art. 79 from the Constitution does not requiere a rigorous arithmetic identity because it is impossible that the outcome doesn’t reflect the diversity of the electoral contenders. The interpretation in the ruling privileges the pluralism in respect to the equality of the vote. There is a spirit that even though less votes are needed to elect a candidate assigned by residue, this is a minor damage compared to the lack of representation that minorities would suffer otherwise, which actually have to have representation in a true Democratic State. 6.5. Administrative Activity 6.5.1. Full Court Sessions Through the Judicial Observatory, there has been a follow up to the Supreme Court of Justice’s Full Court’s activity, through the study of the minutes published in the institution’s official website20. In total 29 public minutes have been studied this semester, and they go from May 12th to November 10th, 2011. It’s worth mentioning that at least nine minutes were not made public, which implies only 76% were disclosed. Also, the minutes are published in a late manner, because at December 31st, 2011, the last minute available was the one from November 10th from that year. The study of28 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • 10 5 Ministry of National Defense 2 11 Ministry of Environment 2 5 Ministry of Environment (temporary bans) 2 JUSTICE ADMINISTRATION 11 0 Ministry of Labor and Social Prevision 16 2 29 Cultural Affairs Secretary from Presidency 1 25 16 Ministry of Foreign Affairs 1 28 18 Civil Aviation Authority 1 31 14 CONACYT 1 31 the work performed by the SCJ is important, which makes the timely publication of 1 FICAFE0 5 10 15 20 25 30 35 this information Total necessary. 166 It was also found that in the studied period 209 matters were entered into the agenda, of which 82 were resolved, which means only 37% of what was intended21. Table 7 shows the resolutions reached. Table 7.7. Resolutions reached by Fullin 2011’s second semester semester Table Resolutions reached by Full Court Court in 2011’s second Total Total In Agenda but Category subjects in Resolutions not resolved Agenda Disciplinary Function 14 14 28 Judge Appointment 6 6 12 Other Administrative decision 15 31 46 Jurisdictional decisions 17 39 56 Last minutes approval and agenda modification 30 3 33 Various 0 34 34 Total 82 127 209 Source: Own Elaboration with data from the SCJ’s chambers. It can be seen that the decision-making in this organ is still complicated, and in the meetings, the agendas are almost never finished. An example of this is that in none of the sessions the various subjects have been resolved. FUSADES has been suggesting some measures to solve this situation, such as the approval of a regulation of Full Court’s sessions, the adequate function of the comissions that present previous studies to the Court and that the sessions are made public. There is still no progress on these subjects. 6.5.1.1. Controversial Judge Depuration Judge Depuration has become a controversial topic in the SCJ. Evaluating the disciplinary files of this officials and solving is one of its attributions; however, the advances are not significant. The media has reported that in 20 months there have only been 19 cases discussed, and there is close to 900 pending cases22. In observing the delay, there is the doubt of whether this is due to inefficiency or lack of will. Beyond the real reasons for the delay, the issue is that while there are no sanctions for the judges who break the law, there will be no incentives to stop the practice. The SCJ must work harmonically and comply with their obligation, it must allow knowing the discussions held in Full Court so the reasons for the delay are known and there must be a search for a mechanism to facilitate these sessions, such as a regulation that at some point was discussed, but later abandoned. The strenghthening and efficiency of judge control mechanisms is a pending task, because it is fundamental to protect such an important function, remove those who should be removed and solve the pending cases that maintain several judges in uncertainty situation. LEGAL AND INSTITUTIONAL SITUATION REPORT 29
    • JUSTICE ADMINISTRATION 6.5.2. Claim against SCJ’s President On December 20th, 2011, the General Prosecutor sent Parliament a note forwarding the documents related to the investigation against SCJ’s President and other officials, for the alleged crime of arbitrary acts23. The claim was filed by the Judicial Organ Workers Union and the United Judicial Workers Union, for considering that the accused officials committed arbitrary acts by discounting union activists, the salary corresponding to the days they didn’t work in 2010 due to labor strikes. The General Prosecutor concluded that there was no evidence that the SCJ’s President intervened in the claimed acts and that the other officials acted according to the law, and so, he didn’t ask Parliament for the initiation of any trial against them. Parliament has not resolved over this matter, but since it is not a trial petition, there can be no trial opening, because the initiative is from the General Prosecutor, according to Art. 193 ord. 4º from the Constitution, Art. 20 Parliament’s Internal Regulation and Art. 421 Penal Procedures Code. 6.6. Appeals against the Supreme Court of Justice In this report, there has been a follow up to the conflict occurred in the cases in which the SCJ was sued in appeal before the Constitutional Chamber, and four magistrates from this last one, decided to solve as judges in the chamber, excusing themselves from being part of the Full Court as a sued organ. They stated that their judgment wasn’t impaired because they had not been a part of the Full Court that performed the acts in dispute. After the unfruitful conflict generated, there were 25 similar cases resolved this semester, the big majority by being declared non acceptable or declared inadmissible24. For the time being, that reason for conflict has disappeared, which is good for justice administration, but it is a subject that can surface in the future. The relations between Full Court and its chambers, and also the participation of magistrates in both Full Court and Chamber attribution, should be clearly specified in the law.30 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • 7. MUNICIPALITIES7.1. Municipal RegulationThis section accounts the municipal regulations published in the Official Gazette in2011’s second semester.The total of regulations was 272, of which 66 are permanent, 110 are transitory orextensions of transitory regulations and 99 are modifications to existent permanentregulations. This implies a 23% increase, compared to 2011’s first semester, wherethere was a total of 222.Regarding the subject, there is no big variation compared to previous semesters. Thesubject that regulations attain the most is interest and tax exemptions, and so 110 fromthe 272 issued regulations are refened to this topic. This practice reflects on one side,that municipalities are looking for alternatives to collect their taxes, which is necessary;but their way to do it doesn’t contribute to the promotion of a timely payment fromcitizens to municipalities as a culture, thus not promoting a legal culture.The other important matter on municipal regulation is that the regulations necessaryfor the implementation of new laws to impose obligations to municipalities have notbeen issued. For example, the Citizen Cohabitation and Administrative InfractionsMode Law is valid since October 28th, 2011, and from that date, municipalities have180 days to adequate their regulations to that law, and to December 31st, 2011, onlythe municipality of Antiguo Cuscatlán is known to have done so. There were noregulations to contain the transparency obligations imposed by the Access to PublicInformation observed either, and this should be done in a short-term period. LEGAL AND INSTITUTIONAL SITUATION REPORT 31
    • 8. ELECTORAL SYSTEM 8.1. Electoral Reform The most important advances in the electoral subject since the peace agreement have occurred in the last months. Finally the vote for a person in unblocked lists has been regulated, independent candidacy has been allowed and the parlamentary positions have been reformed to 2007’s census. 8.1.1. Reform to the independent candidates’ Regulation On December 16th, 2010 the Legislative Organ approved the “Dispositions for the nomination of Non Partidary Candidates to Legislative Elections”, related to the independent candidates that were allowed by the unconstitutionality ruling that eliminated the requirement of afilliation to a political party to be a candidate to Parliament. These regulations were disputed before the Constitutional Chamber25, for considering that they didn’t guarantee the right to nominate a candidate to Parliament without a political party, thus containing violations to equality, proportionality, free vote and population as a basis of the electoral system. On September 8th, 2011, Parliament anticipating to the ruling, approved a reform to the original regulation, making the requirements for independent candidates more flexible, but still left some elements constitutionally questionable. The resolution from October 24th, 2011 in the unconstitutionality process 10-2011 established that the impossibility of reelection for independent candidates was contrary to the Constitution because it violated the right to apply for public positions, unlike partidary candidates, who are permitted to be reelected. It was also declared unconstitutional the fact that the period for the collection of signatures was very short, because it means an unequal treatment to non-partidary candidates vs. partidary ones. The restriction of the contribution to its campaign, seemed to the chamber to protect the legitimate purpose of controlling the financing of them, and it contributes to avoid that the parlamentary member’s performance is compromised with the people who financed the campaign; although the chamber added that a similar legislation should be approved for partidary candidates. On the obligation of bail, the chamber determined that it is constitutional because it seeks to protect the economic interests of third parties, although it also established that the obligation should also exist for political parties. About the fact that in case of the withdrawal of independent candidates, the funds for the campaign left passed on to the SET, the chamber disregarded the analysis, for considering that according to the current regimes of parties and independent candidates, it wasn’t viable to make a comparison that lead to inequality. As a complement to ruling 10-2011, ruling 57-2011 from November 7th, 2011, declared unconstitutional the requirement that non-partidary candidates must be native or residents of the territory they are candidates from, for violating the right to32 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • 6 2° sem. 2011 1° sem. 2011 6 July 6 6 6 4 120.00% 101.92% ELECTORAL SYSTEM 104.86% 100.00% 4 86.82% Febru outcome/entered cases % 3 80.00% 2010 86.17% 81.92% 2 63.19% 2 60.00% 73.04% 2 equality and also expelled from the legal framework the impossibility to vote for more 2 40.00% one non-partidary candidates, making the existence of independent candidates than 1 structured list possible. This last matter has not had legislative development. 1 20.00% 1 In the end, the legal framework about independent candidates has been left in a very 1 leveled 0.00% situation compared to partidary candidates, related to the regulation originally July 1 approved; but at least in terms of bringing candidates to campaign, the settlement of a Constitutional Contentious Civil Criminal 2010 166 bail and the transfer of campaign funds to the SET due to candidate withdrawal, there Chambers is still work to be done. In the first two cases, because there is no legislation suggested by the chamber, so that parties have those controls as well, and in the third case, because there was no declaration made on equality26. The following table compares the partidary candidate’s regulation vs. the one for non-partidary candidates.d semester Table 8. 8. Partidarycandidates’ regulation vs. the one for non-partidary candidates Table Partidary candidates’ regulation vs. the one for non-partidary candidates Total Criteria Partidary Candidates Non Partidary Candidates t Votes to be inscribed in 3 out of 5 votes 3 out of 5 votes subjects ind Supreme Electoral Tribunal Agenda 28 (SET) 12 Reelection Opportunity Allowed Allowed Time to collect signatures Before the calling for Before the calling for 46 elections elections 56 Liability with third parties No bail needed Bail of 25% campaign bail budget needed. 33 Campaign Contributions They can contribute with They cannot contribute with 34 all they can for the more than 50% of the 209 campaign campaign budget Funds in case of candidate Not regulated Funds left will be transfered withdrawal to SET. Territory to be nominated As they wish As they wish for Source: Own Elaboration. 8.1.2. Vote for person Regulation The unconstitutionality process 57-2011 ruling that has been analyzed in the “Unconstitutionality Rulings” paragraph of this document, forced a reform in the electoral regulation to adequate it to the constitutional interpretation established in it, which was concreted through Legislative Decree from November 30th, 2011, which is transitory and only applicable to 2012’s elections. The ruling determined that is contrary to the Constitution to count votes in favor of a flag when the intention of the elector to choose individual candidates can be understood. In response, Legislative Decree 940 established that the position will be assigned taking into consideration the results from the highest to lowest mark quantities in favor of candidates, accounting the whole list, which fulfills the purpose of the ruling, since the vote has effect in the final result of the appointment, thus respecting the freedom of suffrage. LEGAL AND INSTITUTIONAL SITUATION REPORT 33
    • ELECTORAL SYSTEM The ruling also declares that it is contrary to the Constitution the distribution of votes for flag, between the first candidates of the list, because it affects the equality of the vote. Legislative Decree 940 doesn’t contain any disposition that mandates to distribute votes, and so in being no competition between candidates with individual marks vs. candidates that have marks distributed by flag votes, the vote’s equality is achieved, and thus, the ruling complied. Legislative Decree 940, however, establishes a subsidiary mechanism to assign positions, in cases where there are some left without assignation by individual marks, using partidary lists. Compliance to the 57-2011 ruling, regarding the unblocked lists, was in general terms, respected in Legislative Decree 940, but it can be considered that the partidary lists subsidiaries do not respect it fully27. Anyway, this legislation concretes the right to suffrage’s expansion, since elector can influence directly in the person who will occupy a position in Parliament. This is a process that must be preserved beyond 2012, and so, the transitory character of Legislative Decree 940 is unclear. 8.1.3. Adequation of parliamentary positions to 2007’s census Parliament reformed Art. 23 of the Electoral Code and adequated the number for representatives for each department to 2007’s census. In this reform a minimum of three representatives was preserved regardless of the number of habitants they have28. This is contrary to Art. 79 from the Constitution, which establishes population to be the basis of the electoral system. After the reform, Cabañas and San Vicente have three representatives, undermining the fact that according to population they should only have two, and thus, the inhabitants habitants of those departments will be overrepresented in Parliament29. It is important that in the distribution of positions for electoral territories, the principle of population as the basis of the electoral system (Art. 79 Cn) is respected. 8.1.4. PDC and PCN Cancelation In 2004, the Electoral Code established that if a political party didn’t reach 3% of the valid votes, they should disappear, and some parties didn’t reach that amount in the presidential elections of that year. Parliament issued in 2005 a decree establishing that the political parties that participated in 2004 would not be subject to the consequences of not reaching 3% of votes, meaning they could keep remain in existence. This disposition was appealed for considering it unconstitutional, regulating in retrospective, when law only has effects for the future. That is how the Constitutional Chamber understood it as well and through resolution from April 29th, 2011, in process 11-2005, declared it unconstitutional and ordered SET to begin the cancelation process.34 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • ELECTORAL SYSTEMOn July 1st, 2011 the SET canceled the inscription of PDC and PCN with 3 out of5 votes. PDC and PCN presented a revision recourse over this ruling. To solve thatappeal, 4 votes from SET were needed, according to Art. the Electoral Code, but lastSeptember 20th, SET solved the revision appeal with only 3 votes, contrary to thelegal disposition that required qualified majority.At this point, the legal situation was already complicated, as a result from consecutivelaw violations. The SET was in between the obligation of solving and the impossibilityto do so, because they didn’t count with the 4 votes needed to accept or deny therevision.Disregarding the fact that the legal system didn’t provide a solution for this situation,what is worrying is solving the appeal arguing that if the qualified majority is notreached, which is not unanimous, that the law is not operative. This situation establishesa negative precedent for Rule of Law and Legal Certainty, because it violates a clearand definitive disposition.Political parties appealed SET’s resolution before the Administrative ContentiousChamber, who notified the claim’s admission October 12th, 2011. With the admissionas a preventive measure, they declared the suspension of the effect of the cancelationprocess.Given this admission, SET solicited a claim against the Constitutional Chamber, forconsidering that it affected the legal sphere of the SET, because electoral mattersare an exclusive matter for the institution, and thus the Administrative ContentiousChamber had no competence over them. The Constitutional Chamber declaredthe appeal non-admissible30 because the acts in dispute are not definitive, so theaffectation is yet to be caused. The chamber did not discuss the possibility of a PublicEntity to have fundamental rights, because the appeal in course is a process to ensurefundamental rights as a last resource. In this case, the process has not finished yet.In relation to the same topic, the Constitutional Chamber solved a clarifying solicitudepresented by the President of the SET, regarding the ruling of April 29th, 2011 inthe unconstitutionality process 11-2005 that ordered the beginning of the cancelationprocess for PDC and PCN.The Constitutional Procedures Law establishes that there are no appeals for anunconstitutionality ruling (Art. 10) and that is confirmed in Art. 86 from the sameregulation. The Civil and Commerce Proceedings Code (Art. 225) may be subsidiaryapplied, but these regulation grants a period of two days to ask for a clarification, andin this case the petition was presented 6 months after the ruling. LEGAL AND INSTITUTIONAL SITUATION REPORT 35
    • ELECTORAL SYSTEM This review established that in the ruling in process 11-2055 there was an order to cancel the political parties, and that this was carried out July 1st, 2011 with the first resolution from SET. It also determines that the cancelation as an administrative act has immediate effects, and so the appeal does not suspend the effects of the resolution that cancels them. It also discusses broadly the value of the precedent from the Constitutional Chamber. It is considered that the Constitutional Chamber has overstepped its attributions in more than one way with this ruling, because it allows a non regulated consult, pronounces a verdict over aspects that were not requested, and decides over facts subsequent to a finished unconstitutionality process. Considering that there is a process still pending in the Administrative Contentious Chamber, the current legal situation is that both parties (PDC and PCN) are not canceled and remain subject to the verdict to be issued by that chamber.36 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • 9. CONCLUSIONS• The legislative concretion of the transformations in the electoral system promoted by the Constitutional Chamber’s rulings is one of the main advances in the matter of Rule of Law. This signifies a clear extension of the right to suffrage.• The derogatory of Legislative Decree 743 that ordered unanimous decisions in the Constitutional Chamber has been important in restoring it’s functioning. The active participation of civil society in defense of the Constitution represents a landmark in the civic conscience of society.• There have been some violations to the law that affect institutionalism, such as anticipated electoral propaganda and the lack of a timely appointment of Public Officials, and a decision from SET taken with a clear violation to the law.• Depuration must be carried out constantly in all entities related to safety. In the Judicial subject, judge control mechanisms must be strengthened. LEGAL AND INSTITUTIONAL SITUATION REPORT 37
    • 38 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • 1. INTRODUCTION Legal certainty is the certainty that Law gives to the actions carried out in accordance to it. This translates into the confidence of those affected positively or negatively by those acts that a “truth” has been established and protected by law, so that based on that law acts or omissions will be certainly supported by the state. In other words, the order, harmony and justice in a society, will rely on legal certainty. To the effects of this situation report, we will analyze the events that affect legal certainty, considered from the constitutional and legal provisions (legality principle/ powers separation), accessible and understandable laws and that international instruments are incorporated and implemented according to the legal system. On the other hand, Public Safety will be understood as “a democratic order that eliminates violence threats to the population and that allows the safe and peaceful cohabitation”. It implies, essentially, the effective protection of a broad spectrum of human rights, especially, the right to life, physical integrity and other rights inherent to the person quality (domicile inviolability, freedom of transit, etc.) and also the right to patrimony”1. This report starts from the situation of Crime and Public Insecurity that influences directly and indirectly in the strengthening of democratic institutions. From this perspective, we refer to the events occurred in the observed period that have an impact in the improvement or contrary, the deterioration of the situation. Thus, the facts affecting prevention, the fight against delinquency and the social reinsertion of the delinquent will be evaluated. There will also be monitoring of the regional efforts that the country participates in to establish a group of strategies to fight against crime.40 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • 2. Legal Certainty2.1. Accessible and Understandable LawsLegal certainty implies having clear rules. For this purpose, the first thing is theregulation’s availability, knowing the laws in their authentic form, because these arepresumed known by all citizens (Arts. 7 and 8 from the Civil Code), as well as thecompliance to the procedures established for their modification.2.1.1. Procedure waivers useEl Salvador’s Constitution from 1983, establishes a procedure to create a law, accordingto which drafts must be discussed2 and that is also the interpretation sustained by theConstitutional Chamber3. The mechanism to fulfill these requirements consists inprojects being discussed in a Commission, which presents a resolution that is laterdiscussed in the Full Parliament Session. However, there is an exception to the studyof the project in a commission, in case the law is urgent. The problem is that a lot oftimes this exception is used inappropriately to attempt against legal certainty, skippingthat stage in the law creation process, and surprising citizens with sudden regulations,without a reasonable motive.On this matter, the unconstitutionality ruling 11-2010 from November 30th, 20114,interpreted that the lack of a law’s discussion in a legislative commission does notgenerate unconstitutionality, as long as the law is discussed in the Full Court session.During this semester there were 62 procedure waivers, from which 49 have been fordecrees (the rest for agreements and declarations). This means that from the totalof 196 decrees issued, 25% have followed this mechanism. In comparison to lastsemester, where the proportion was 19% of the decrees, the percentage has increased6%.The waivers have been used, sometimes where the urgency required by theParliament’s Interior regulation was met, as it happened with the Disaster and PublicCalamity State Declaration in El Salvador, due to the rain storms in October, or theTax Exemption to donated goods for Disaster Victims Declaration. However, therehave also been some inappropriate uses of the mechanism, like the approval of anextension to the regulation that allows private companies to hire security serviceswithout following the lawfully established procedure, and the extension to the subsidyto public transportation, subjects that require a profound study and discussion5.2.1.2. Simultaneous sessionsThere is another resource in Parliament’s Internal Regulation that is based in urgency6.This is the verdict within the same parliamentary session, and it consists in a reunionof the commission during the Full Parliamentary Session to come up with a resolutionto be solved in that same session. However, not all verdicts in a simultaneous sessionimply that the process has been eluded, because there are some cases where the draftof the law project has been discussed before the verdict simultaneous to the session. LEGAL AND INSTITUTIONAL SITUATION REPORT 41
    • Legal Certainty In this semester, there have been 19 agreed decrees in a simultaneous session; 8 more than in 2011’s first semester. Amongst the most noted ones, we find the one that contains a transitory law to send assistance troops to Afghanistan, and Legislative Decree 940 that contains reforms to adequate electoral legislation to the Constitutional Chamber’s ruling to incorporate the vote for a person. In the second case, it was necessary to establish a clear legal framework; while in the first case, the topic could have been further discussed in a commission. In general, this mechanism has not been used to issue regulations without legislative discussion to surprise citizens. 2.1.3. Official Gazette One of the problems affecting the country’s legal certainty is the delay in publications of the Official Gazette, the organ in charge of communicating the government’s most important decisions, and specially laws, determining their authentic text and the beginning of its validity. This situation has been sustained and informed in the past two years since the execution of the Legal and Institutional Situation reports. Until December 31st, 2011, the last Official Gazette to circulate was the one from December 15th, 2011. The gazette had a delay of 16 days, which is a reflection of what happens constantly. At June 30th 2011, the same delay was of 10 days. 2.2. International Instruments in accordance to the legal system It is important to know the obligations acquired before other states, and within this, it is pertinent to respect the established procedures to integrate these obligations to the legal system, which is related to legal certainty, as long as those dispositions are not modified randomly. This semester, the international instruments have followed the formally established process. 2.2.1 Ratified Treaties and Agreements In 2011’s second semester the following treaties have been ratified: 1. Ratification of the Protocol related to International Civil Aviation, which extends the number of official translations from the International Civil Aviation Organization treaty. 2. Agreement on Privileges and Immunity of the Organization of American States (OAS). 3. Amendments to Arts. 1, 4, 5, 6, 7, 9, 14 y 22 of the Tourism World Organization Statutes. The Emend to the last paragraph of the Annexed Financing Rules, adopted in Dakar, Senegal, December 2nd, 2005; and the modification to paragraph 4 of the Annexed Financing Statutes, adapted in the General Assembly’s 14th Reunion, Seoul and Osaka, September 24th-29th, 2001.42 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • Legal Certainty2.2.2 Ratified Loans and DonationsIn 2011’s second semester the following loans and donations have been ratified: 1. Loan with the Inter-American Bank of Development (IBD) of $20 million, for the “Ciudad Mujer” project. 2. Loan with IBD of $70 millions to finance the “Housing and Wholesome Improvement of Precarious Urban Settings Program, Phase II”. 3. Loan with the Central American Bank for Economic Integration, CBEI, of US $48,212,173.80, to finance the “Road Infrastructure Connectivity for Development Program”. 4. Loan with the International Bank of Reconstruction and Promotion, IBRP, of $100,000,000, to finance the “Public Finance and Social Progress Development Policies Loan”. 5. Loan with IBD of $100 million, to finance a program to support the structural reforms of the energy sector. LEGAL AND INSTITUTIONAL SITUATION REPORT 43
    • 3. PUBLIC SAFETY Public insecurity can be one of the greatest obstacles to economic growth and human development. It is also one of the most complicated phenomenons with multiple spheres and subjects in charge of reducing it. This report analyzes the legal and institutional elements that influence the way to prevent and fight delinquency, as well as the punishment compliance and inmates social reinsertion. This semester has been characterized, in first place, by a critical crime situation that doesn’t seem to improve. Homicide, the indicator used in our country to illustrate delinquency, showed at the end of December, that there were 4,354 homicides; 367 more than occurred at the end of 20107. In second place and as a positive event in the matter of safety is the commitment acquired by the Government on this subject, in the subscription of the Partnership for Growth (PFG) with the United States of America. This document represents a cooperation effort with an innovative approach, where based on both countries fundamental axis, they design a group of concrete goals and actions to be reached; as well as including the duty to reform legislation and strengthen institutionality to achieve prevention and fight against crime objectives, as well as social reinsertion. Finally, the period has been characterized by the expectations generated by the changes made in the Safety and Justice Ministry, where some important operative changes have been announced. 3.1. Prevention 3.1.1. Institutionalism in the matter of prevention In El Salvador, violence prevention is the Safety and Justice Ministry’s responsibility through the Peace Culture and Prevention General Direction, but these activities are also carried out by the National Youth Council and municipalities. On October, the Safety and Justice Vice-Minister gave declarations about violence prevention and the need of strengthening and institutional coordination on this matter8. In this occasion, he expressed that there are still some disarticulated institutions and the prevention budgets are still low. The Vice-Minister talked about the need of coherence and integration from all the institutions working in the matter of prevention under one head, for which a political, economic and technical decision is required. Also, he spoke about the need to establish better communication channels with municipalities9. In terms of the municipal labor, in the issue of prevention, which is important, but doesn’t have a defined legal framework about its competences and attributions, and what mostly exists, are council leaders. The Municipal Code states amongst the municipal competences are a series of faculties, for example, a service of municipal police, and other services related indirectly to prevention, but there is no clear limit44 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • PUBLIC SAFETYof its attributions on the matter. There are some actions contemplated in the Modellaw for Citizen Cohabitation and Administrative Infractions, where there will also bea need for coordination.Given that responsibility is dispersed but the purpose is converged, it is essential thatinstitutions in charge of prevention unify and coordinate with municipalities, and inthat sense, the clear limits on their attributions with a country perspective would bea big contribution.3.1.2. Control over private security companiesDuring this year there have been numerous cases of crimes committed by privatesecurity guards10.The 2011’s Light Weapons Report from the International Studies and Developmentfrom Switzerland Institute shows that in El Salvador there are more private securityagents than policemen in a 1.26 ratio of private agents for each police11. Even thoughthe report does not include data up until 2008, it shows a tendency to turn to privatesecurity as an alternative.On October 13th, 2011, Parliament, without much legislative discussion and resolvingin a simultaneous session, approved a decree to allow for one more year privatecompanies to hire guards without them needing to take the private security processesand human right courses demanded by Art. 20 letter g) of the Private SecurityServices Law; and to allow public institutions to hire guards without them subjectingto a course and psycho-technical exams at the Public Safety National Academy, asdemanded in Art. 8 letter g) of State, Independent Institutions and Municipalities’Security Services Law. Also, the decree annuls the administrative processes filed forthe non –compliance to the above mentioned requirements. It is not the first time thatthe effects of these requirements are annulled; this is only an extension on previoussuspensions.As it can be observed, legislation is not consistent with reality, because the facts pointto the need to comply with the legal requirements to fulfill the role of private securityagents, and what is happening is the annulment of those lawful requirements. Tomake those requirements mandatory would be a very important step in prevention.The reason behind the legislator’s idea to establish them in a law is for them to becomplied with.3.1.3. National Youth Law ApprovalOn November 17th, 2011, parliament approved the National Youth Law, a tool thatestablishes the legal and institutional framework for the implementation of policiesoriented to making the development of young population effective, and to connectthem to the active participation in all the aspects of the nation’s life. The law foreseesthe National Youth Institute, as a decentralized entity from the Presidency to be in LEGAL AND INSTITUTIONAL SITUATION REPORT 45
    • PUBLIC SAFETY charge of the policies carried out in this matter. Nonetheless, on December 5th, 2011, the President observed this law, mainly regarding the institutionality, because instead of the above mentioned institute, they recommend it’s the Presidency who fulfills this role. It is also asked that the law come into force six months after its publication in the Official Gazette. This initiative, when well implemented, can contribute to violence prevention, because it would bring young people bigger opportunities for human development, taking them away from the risks of delinquency. In spite of that, it is still pending to define the way that a regulation such as this one is financed, because the creation of a new institution will demand a budget portion for the fulfillment of its attributions. 3.1.4. Weapons Ban The United Nations Program for Development in El Salvador informed on July 2011, that the bans on weapons contribute to reduce violence. According with this last statement, the Ministry of Security and Justice executed a ban on weapons in 27 municipalities between April and July 2011, achieving a reduction in homicides of 12%, injuries in 40% and robbery in 7.1%12, in comparison to the same period of the former year. Definitely, the lack of control on fire weapons in the country is a problem to be worked on; however, the above presented data, must be taken with caution, because the measurements are done based on the crimes reported to the Police, and it may be that what has been reduced are the claims and not the crimes per se, situation that occurs when citizens lose confidence in the institutions ability to solve the problem. 3.1.5. Security Cameras installed in San Salvador The National Police, within the emergency 911 systems, installed security cameras in San Salvador, this past August, with the purpose of preventing criminal actions13. The same was done in Santa Tecla, where the major inaugurated phase two of the city’s video surveillance project. These modernization projects contribute, by dissuasion, the reduction of the opportunity to commit crimes and can be useful for the investigation of those concreted, making a progress in public safety. These are efforts to be promoted. 3.1.6. Law Implementation of the Administrative Infringements On March 31st, 2011, Parliament approved with 75 votes from all legislative fractions, the Model Law for Citizen Cohabitation and Administrative Infringements, a regulation oriented to promote citizen cohabitation and violence prevention.46 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • PUBLIC SAFETYThis regulation came into force October 28th, 2011, after 180 days of its publicationin the Official Gazette14 and municipalities have 180 additional days from the comingin to force to adequate their regulations to the law. This means that municipalities thathave regulations containing administrative infractions must reform them and the onesthat don’t have any, must issue them in accordance to the law. There have been noadvances known in this matter.The coming into force doesn’t mean that the procedures turn the law’s abstract contentto operative, what this means is that the period has started so that municipalities andother institutions, make the necessary arranges to comply with it.It is necessary that municipalities work on reforming their regulations and making alltheir resources available to this law’s implementation, which would contribute to thepacific cohabitation and would sanction misdemeanors before they become crimes.3.2 Fight against CrimeThe fight against crime is the most visible aspect of a delinquency control strategy,because it is the one supposed to show results in a short-term period.3.2.1. Safety Elements in the Partnership for GrowthIt is considered one of the most important commitments carried out during thisperiod, the subscription of the Partnership for Growth between El Salvador and TheUnited States of America, an effort that intends to promote a quick expansion in theinclusive economic growth in El Salvador, under a deep commitment to democracyand human rights.According to this document15, in El Salvador, violence stops the national percapita production from growing between 4.8 and 10.8%, and that in the GlobalCompetitiveness Report, under the organized crime indicator, El Salvador is thelast of 142 countries evaluated. That is why one of the essential elements from thePartnership will be correcting this problem, where the Salvadorean Governmenthas acquired concrete commitments, and to that effect it must carry out determinedactions.The issues to be worked on, are the professionalization of the institutions in the justicesector, improvement of procedures and criminal justice practices, the reduction ofthe organized crime impact over small and medium businesses, protecting citizensthat use the public transportation system, eliminating the criminal associations assets,professionalization of the Public Administration, and increasing citizen confidenceon the government, promoting a national dialogue on how to improve public safety,tend to youth at risk, among others. LEGAL AND INSTITUTIONAL SITUATION REPORT 47
    • PUBLIC SAFETY Each of the numbered goals will be obtained through the joint work from the Salvadorean government with the support of The United States Government. This is a good opportunity to strengthen public safety and making real advances on the matter, and so the government must work hard and transparently. 3.2.3. Safety Regional Projects coordinated by SICA Presidents from SICA adopted the Central American Safety Strategy in 2007. Lately, the regional approach to fight delinquency has been strengthened and in June 2011, the Conference of Support to the Safety Strategy of Central America was celebrated, and it pursued the international support to carry out specific projects within the strategy. Table 1 shows the projects formulated. From these 22 projects, 8 have been given priority and would be the ones that they start with. The initial condition to execute the strategy is the financing. There have been talks about US$3,000 million for the first 8 projects, from which US$1,500 million would come from soft loans and US$500 million from cooperation16. The financing mechanism was approved on November 10th, in the meeting of the Central American Safety Commission, but it hasn’t been published yet. It is necessary to develop a regional safety strategy that contributes to the substantial improvement of Central American´s life conditions; however, it is acknowledged that this is a very challenging effort. One of the most important aspects is the need to strengthen regional institutionality which will allow the implementation of projects of this magnitude, and also, the distribution of projects in the different countries, where each one will have particular emphasis to privilege.48 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • PUBLIC SAFETYTable 1. Project Profiles in the subject of Safety Component Project Fight against controlled substance diversion in Central America 2 Legally registered and confiscated weapon control in Central America Intervention and Interception of international drug traffick and products derived from that 2 crime in Central America Inter-institutional and Regional Coordination for frontier safety in Central America 2 Criminal Investigation strengthening in Central America Fight Against Strengthening of the capacity to detect aerial, terrestrial and sea drug traffick and organized 2 Crime crime in the Central American region. Increase of mobility capacity for the aerial, terrestrial and sea intervention and interception in 2 the fight against crime in Central America. Increase in the communication capacity for the fight against crime in Central America 2 Technological platform for real time information exchange for the fight against crime in Central America 2 Violence against women prevention in Central America Violence and delinquency that affects youth social prevention 2 Wrongful drug use prevention, rehabilitation and reinsertion in Central America Violence Prevention Education and Training for Job Regional Project in Central America 2 Violence social prevention from local governments project in Central America Armed violence prevention Project in Central America 2 Penitentiary systems modernization in the region, (improvement in penitentiary management Rehabilitation, and formative processes). 2 reinsertion and Regional Penitentiary Infrastructure Improvement prison safety Social and Work reinsertion of imprisoned people in Central America Strengthening of Humanitarian Help and Rescue Units for disaster situation and a regional mechanism implementation. Police and entities related to justice and security nationally and internationally, professional Institutional and technical leverage. Strengthening Regional approach modernization of national institutions in charge of safety Strengthening of protection program for witnesses and other related subjects in criminal investigationSource: Own elaboration based in “Project Profiles” from SICA.3.2.4. Witness Protection Program Deficiencies Sentenced Temporary ArrestThe Executive Technical Unit (ETU) from the Coordinating Commission of theJustice Sector is in charge of administrating the Witness and Victim ProtectionProgram that seeks to bring safety to people who declare in a trial. However, theGeneral Prosecution Office and the tribunals are also related, because in the momentof declaring, the General Prosecution must request the appropriate measures ofwitness protection, and the attaining judge must grant them. 7003During this semester, the program´s effectiveness has been questioned, because thereare reports of cases in which the witnesses have not had the adequate measures, andthis has generated discrepancies between prosecutors and judges.Witnesses are essential evidence in criminal trials, and in order to protect andguarantee their safety, it is necessary that this program functions efficiently, workingin coordination with the General Prosecution Office, tribunals 18016ETU. and the LEGAL AND INSTITUTIONAL SITUATION REPORT 49
    • PUBLIC SAFETY 3.2.5. Activity from Public Actors in Public Safety. 3.2.5.1 Changes in the Justice and Safety Ministry and in the Security Plans The Justice and Safety Ministry is a fundamental actor in the safety of the inhabitation. Its institutional functioning becomes then essential. In this semester, there was a change in the Minister of this state´s branch, which was well received in some sectors and opposed in others, especially due to the quality of a retired Army member of this new Minister. It has to be pointed out that either the Constitution or the legal framework contains any prohibition to a former army member fulfilling this position. It is also important to establish that the adequacy or capacity of people is a key element in the institutional performance, but it does not depend only in one person, and the fight against crime is not an exclusive responsibility of an institution. The efforts to improve within the attribution of the Justice and Safety Ministry must be continued and improved by the new Minister, in an obligated coordination with the rest of public entities with competence on the subject, such as the General Prosecution Office, the Public Defense Office, the Army and the Judicial Organ. There are a lot of aspects to improve and there have been already some operative changes announced, such as the creation of an Anti-Gang Unit in the National Police17, as well as a better application of the Gang, Group, Associations and Organizations of Criminal Nature Proscription Law, in which the Minister has declared that presents implementation problems as it becomes hard to prove a person belongs to a gang18. It has also been declared the promotion of legal reforms, for example, the creation of a legal sub-system that contributes to fight against gangs19. Additionally, it must be taken into account that the new Minister has established as his goal, to reduce homicides in the country by 30% in a year, which is a concrete objective that can be used to evaluate his job20. 3.2.5.2. National Police By September 2011, 1,900 National Police agents were under investigation and 460 had been sanctioned. The constant process of police depuration is necessary and needs to be done, as long as the legally established procedures are respected and no fundamental rights are violated. A positive aspect in the National Police this semester is that they have signed an agreement with the Natural Persons National Registry, which allows them to access some data from the Identification Documents, birth and death certificates of Salvadoreans. This is a tool that can facilitate the investigation processes21. Nevertheless, the necessary measures must be taken to guarantee the privacy of the information that now more people can have access to.50 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • PUBLIC SAFETY3.2.5.3. General Prosecution OfficeThe first topic to bring out regarding the General Prosecution Office is that a year fromthe period in which the Telecommunication Intervention Center was supposed to startfunctioning, this institution has not been established. The Special TelecommunicationIntervention Law came into force March 24th, 2010 and six months were granted toinstall the Center, term that was due September 24th, 2011; but at the end of thisreport, the Project had not been implemented.On September 14th, 2011 Parliament approved US $420,620,000 from a loan withthe International Bank for Reconstruction and Promotion, to be used in the payrollfor the 88 people to work in the Telecommunication Intervention Center startingOctober 1st, 201122.It is important that the General Prosecution Office puts into function theTelecommunication Intervention Center as soon as possible, because it is a set upnecessary tool in the fight against crime.On other matters, the General Prosecution Office presented a report about thework performed during 2011, in which they highlighted the presentation of 29,765prosecution requirements, the prosecution of 5609 guilty sentences and the recoveryof US$ 5,284,314.7 derived with debts with the state23. It was important that theGeneral Prosecution Office presented this report and that they continue to do so,improving them with resource efficiency indicators.3.2.5.4. ArmyThe Army continues to perform their job in public safety affairs and also with ahigh level of approval from civil society. The poll on public opinion carried out byJBS in November, found that people feel safer when seeing a soldier instead of apoliceman, even if they consider that “the government doesn’t allow them to do theirjobs properly”24.In May 2011, the President extended for one more year the security labors of themilitary, which will make three years of this function. It is worth to remember onceagain that the public safety labors granted to the army, must be extraordinary (Art.168 ord. 12 from the Constitution) and along with them, there must be a plan sothat the National Police can fully retake the fulfillment of their attributions. Eventhe Constitution orders the President to file before Parliament a report of the laborsperformed by the Army no longer than 15 days after the extraordinary safety laborsare finished. In spite of the periods having finished and functions extended, there isno knowledge that this special report has been presented. LEGAL AND INSTITUTIONAL SITUATION REPORT 51
    • PUBLIC SAFETY It is important to strengthen the National Police so that in can fully comply with their attributions in the matter of public safety. 3.2.6. Need for indicators in the matter of Public Safety In the previous Legal and Institutional Situation reports, FUSADES has noted the scarcity of reliable indicators to express the reality on the public safety issue. Normally, the homicide rate has been used as an indicator on the violence situation, in spite of this being an indicator that only reflects a limited reality and on top of that it does it only in a very general manner. It´s necessary to know what happens in every aspect of public safety and moreover, to know and measure the efficiency of the investment made to solve the issue. In this semester, the World Bank in alliance with the Ministry of Justice and Security have begun the “Public Expense in Justice and Security Study”, which intends to measure the efficiency of the money invested against the results achieved through the security chain of value, and to that effect indicators that measure the efficiency in prevention and surveillance, crime investigation and prosecution, trial and sentence and imprisonment and reinsertion will be created. 3.3. Punishment Compliance and Rehabilitation This element is highly important in a public safety strategy, not only because inmates and penitentiary staff must be protected, but also because in El Salvador, 74.9% of the inmates are sentenced to a maximum of 20 years of prison and 74.2% of them are under 35 years old, which means that a big amount of these people will get out of jail and will have to be reincorporated into society25. Thus, rehabilitation and reinsertion programs ought to be in the country’s special interest. 3.3.1 Inmate Overcrowding Penitentiary overcrowding is a reality in El Salvador, and constitutes a constant source of danger, to the inmates, penitentiary staff and visitors’ health and integrity. According to the information provided by the Penitentiaries General Direction, the overpopulation in prisons doubles the world average, and it’s, until December 19th, 2011, 309% over the installed capacity that remains of 8,100 spaces26. It is noted that during this period, a reduction of 155 inmates compared to last semester was observed, mainly due to a significant reduction in the people imprisoned without conviction. This is explained because certain jails, by judicial order, haven’t been receiving more inmates due to overpopulation, and these have been placed in the National Police provisional jails. This is a delicate topic that is analyzed in the next section of this report.52 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • the fight against crime in Central America. Increase in the communication capacity for the fight against crime in Central America 24000 Technological platform for real time information exchange for the fight against crime in Central America 23700 Violence against women prevention in Central America 23400 Violence Violence and delinquency that affects youth social prevention PUBLIC SAFETY Wrongful drug use prevention, rehabilitation and reinsertion in Central America Prevention Education and Training for Job Regional Project in Central America 23100 Violence social prevention from local governments project in Central America Armed violence prevention Project in Central America 22800 Penitentiary systems modernization in the region, (improvement in penitentiary management Rehabilitation, and formative processes). Regional Penitentiary Infrastructure Improvement 22500 reinsertion and prison safety Social and Work reinsertion of imprisoned people in Central America 06-29- A way to reduce overpopulation is the increase of installed capacity. The Penitentiaries Strengthening of Humanitarian Help and Rescue Units for disaster situation and a regional mechanism implementation. General Direction is about to finish two penitentiary farms; this will imply the Police and entities related to justice and security nationally and internationally, professional Institutional and technical leverage. extension of 400 new spaces for inmates in a trust phase (half female, half male) with Strengthening Regional approach modernization of national institutions in charge of safety an important concept of rehabilitation. Strengthening of protection program for witnesses and other related subjects in criminal investigation Graphic 1: Total inmates until December 12th, 2011 Sentenced Temporary Arrest 7003 18016 Source: Own Elaboration with data from the Penitentiaries General Direction. Graphic 2: Reduction of precluded population: 155 inmates (0.62%) in the last six monthsProjectFight against controlled substance diversion in Central America 25500 25,174Legally registered and confiscated weapon control in Central AmericaIntervention and Interception of international drug traffick and products derived from that 25200crime in Central America 25,019Inter-institutional and Regional Coordination for frontier safety in Central America 24900Criminal Investigation strengthening in Central AmericaStrengthening of the capacity to detect aerial, terrestrial and sea drug traffick and organized 24600crime in the Central American region. 24300 24,449Increase of mobility capacity for the aerial, terrestrial and sea intervention and interception inthe fight against crime in Central America.Increase in the communication capacity for the fight against crime in Central America 24000Technological platform for real time information exchange for the fight against crime in CentralAmerica 23700Violence against women prevention in Central AmericaViolence and delinquency that affects youth social prevention 23400 23,465Wrongful drug use prevention, rehabilitation and reinsertion in Central AmericaEducation and Training for Job Regional Project in Central America 23100Violence social prevention from local governments project in Central AmericaArmed violence prevention Project in Central America 22800Penitentiary systems modernization in the region, (improvement in penitentiary managementand formative processes).Regional Penitentiary Infrastructure Improvement 22500Social and Work reinsertion of imprisoned people in Central America 06-29-2010 12-10-2010 06-30-2011 12-19-2011Strengthening of Humanitarian Help and Rescue Units for disaster situation and a regionalmechanism implementation.Police and entities related to justice and security nationally and internationally, professional Source: Own Elaboration with data from the Penitentiaries General Direction.and technical leverage.Regional approach modernization of national institutions in charge of safetyStrengthening of protection program for witnesses and other related subjects in criminalinvestigation Sentenced Temporary Arrest LEGAL AND INSTITUTIONAL SITUATION REPORT 53
    • PUBLIC SAFETY 3.3.1.1. National Police´s Provisional Jails Overcrowding Provisional jails in the National Police continue with a high level of overpopulation, and also fulfilling jail functions, which is something they are not designed for. A big amount of inmates to whom a provisional arrest has been declared, and thus belong in a jail, are still in the provisional ones because there is no space in penitentiaries. The penitentiaries in Jucuapa, Usulután and San Vicente can’t receive one more inmate if they don’t reduce the current overpopulation by 40%27. The penitentiary system suffers a deficit that has been transferred to the National Police. The Penitentiaries General Direction has some plans that will help to remedy the situation in a short term period, such as the penitentiary farms to be inaugurated soon, but if the policies that allow reinsertion of inmates or strategies to reduce the number of people in a closed regime are not supported, it doesn’t matter how many new spaces are habilitated in penitentiaries, they will always be crowded in time, increasing the risk that the state runs out of capacity of sanctioning law infractions, which is one ot its main obligations. 3.3.2. Technological control in Penitentiaries: Inmate information system and penitentiary video-surveillance system The Penitentiaries General Direction has continued to expand the capacity of its inmate information system, a very complete tool that is able to give information in real time, in judicial and personal information of inmates. It also allows monitoring if an inmate has left the penitentiary to go to the hospital or to attend a hearing, amongst other detailed data. For the multiple applications that this has in the design of penitentiary policies and the control over resources, this is a positive project to improve the penitentiary system. In the same manner, there have been some advances in the video-surveillance coverage in the main jails, which are monitored by a group of custodians graduated from penitentiary school. Even though the coverage hasn’t reached all jails, or the individual cell, it is important to uncover crimes. This is very important effort in this matter. 3.3.3. Penitentiary emergencies and custodian depuration The situation of insecurity continues in jails. This semester there were 3 deaths reported in a jail in Ciudad Barrios28, 4 in Quezaltepeque29, 1 in San Vicente30, and 4 in Chalatenango31, for a total of 9. These facts are the result of the different problems that the Penitentiaries General Direction as an entity is facing, such as the overcrowding and the parallel power structures inside jails. To bring safety to the inmates inside jails is the state’s responsibility and they must work towards that goal, fighting against the causes of this problem.54 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • PUBLIC SAFETYThe depuration of custodians is one of the necessary activities to prevent corruptionwithin penitentiaries. The Penitentiaries General Direction has been working on thismatter in two ways: training professional custodians graduated from PenitentiarySchool32 and the depuration of a153 custodians in total from January to December15th, 2011. LEGAL AND INSTITUTIONAL SITUATION REPORT 55
    • 4. CONCLUSIONS • El Salvador’s violence situation maintains alarming levels. The homicides, which are the most used measurement, have surpassed the number of homicides for 2010 in 367, closing the year with 4,35433. • The security component in the Partnership for Growth that El Salvador has subscribed with The United States of America is an important opportunity to advance in guaranteeing public safety. The commitments acquired are the most concrete measures in the subject of public safety proposed by the government. • The situation in Penitentiaries in spite of the efforts performed, is still worrying. Investment is needed in this matter, because from an adequate functioning of this system depends the conservation of the state’s coercive capacity regarding penal laws.56 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • 1. INTRODUCTION The business climate in a country is the reflection of different factors such as: potential to do business easily, market transparency, financial strenght, consensual public policies, and efficient institutions. The promotion for the private sector’s growth requires a regulation where good ideas no matter their origin, can be transformed into business and companies can invest and grow on more jobs generation1. In this semester, to measure the business climate performance, the indicators of global competitiveness and potential to do business easily will be used to identify the challenges in this subject. Also various polls and interviews are presented to tinge the business climate in El Salvador.58 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • 2. INDICATORSOn October 20th, 2011 the World Bank presented the report Doing Business 2012:Doing business in a more transparent world, an annually report that compares the businessregulation of the countries, and that has been evaluating El Salvador for five yearsnow2. The report highlights the importance of institutions and the transparency forthe adequate functioning of the market, for example, by providing the information ofrequirements for construction, importation and exportation.According to this report, the country is stuck in position 112 from 183 evaluatedcountries, noting as positive aspects, the property registry and contract execution,positions 54 and 66 respectively; on the other hand, the worst areas are investor’sprotection, in spite of the works executed, position 166, and the construction permitsgranting, position 144, element that has been criticized by business unions during thissemester3.On September 7th, 2011, the World Economic Forum (WEF) presented the GlobalCompetitiveness Report 2011-2012, an annual report that through the globalcompetitivity index compares the factores that influence in a country’s competitiveness,and that for several years now, has been evaluating El Salvador4. According to thisreport, the country continues a systematic descend, going down nine positionscompared to last year, and 35 positions compared to 2005. Nowadays, El Salvadorholds position 91 of a 142 evaluated countries, as a result of the absence of an agendaof competitiveness and its consecuences reflected in low levels of economic growth,investment attraction reduction and very little generation of new jobs.In analyzing the global competitiveness index, it is observed that the country’s mainstrenghts rely in the following aspects: infrastructure, financial system development,product market efficiency and labor regulation; while the weaknesses lie in: superioreducation, innovation, and public and private institutions, highlighting the aspect oforganize crime, which positions us in place 142 out of 142 countries.When observing both studies and making a comparison with the rest of CentralAmerican countries and Panama, El Salvador places in the last positions and presentsthe biggest descend in comparison in 2010-2011’s edition, Table 1. LEGAL AND INSTITUTIONAL SITUATION REPORT 59
    • INDICATORS Table 1. Central America and Panama, 2011-2012. Global Competitiveness Index Doing Business Countries 2011- 2010- Variation 2011- 2010- Variation 2012 2011 2012 2011 Panama 49 53 + 61 63 + Costa Rica 61 56 - 121 121 = Guatemala 84 78 - 97 93 - Honduras 86 91 + 128 130 + El Salvador 91 82 - 112 112 = Nicaragua 114 112 - 118 122 + Note: Global Competitiveness Index, elaborated by WEF, clasifies the best country as 1 and the Global Competitiveness Index Doing Business worst, 142; the Doing Business clasifies the best country with 1 as the worst, 183. Countries 2011- 2010- Variation and Doing Business Report 2012. Source: Global Competitiveness Report 2011-2012 2011- 2010- Variation Countries 2012 2011 Problem 1 Problem 2 Problem 3 2011 Problem 4 2012 Problem 5 Panama 49 53 + 61 63 + Panama Corruption Bureaucracy Work Force Work Safety From aRica Costa compared perspective, the executive poll 121 WEF shows that= problems in 61 56 - from Training 121 the Regulation Guatemala 84 78 - 97 93 - the Central America region share the same obstacles to do business: Regulation Safety Costa Rica Bureaucracy Infrastructure Access to Tax safety, corruption, Honduras 86 91 + 128 130 + financing bureaucracy, political instability and access to financing; and so, this regional problems El Salvador 91 82 - 112 112 = Guatemala require solutionsSafety same range, Table 2. Bureaucracy 122 Political Nicaragua 114 the 112 of Corruption - 118 + Work Force Instability Training Honduras Safety Corruption Bureaucracy Political Access to Table 2. Main problems to do business in Central America, 2011-2012. Instability financing Countries El Salvador Problem 1 Safety Problem 2 Political Problem 3 to Problem 4 Access Problem 5Corruption Bureaucracy Panama Corruption Bureaucracy Instability Work Force financing Work Safety Nicaragua Bureaucracy Political Training Corruption RegulationInfrastructure Access to Cour Costa Rica Bureaucracy Infrastructure Access to Instability Tax Regulation Safety financing financing Guatemala Safety Corruption Bureaucracy Political Work Force First I Regu Instability Training Honduras Safety Corruption Bureaucracy Political Access to Civil C Regu financing 2009 2010 2011 Instability Mino El Salvador Safety Political Access to Bureaucracy Corruption Regu 0 Instability financing Comm Nicaragua Bureaucracy Political Corruption Infrastructure Access to 1 Instability Crime financing Question: In your opinion, ¿what are the main problems to do business? Uncertainty 2 Source: Global Competitiveness Report 2011-2012. 3 Low Activity 2009 2010 2011 4 Other The0publication of polls related to business climate is highlighted, and amongst them, the 5 Dynamic Business Poll, carried out in trimestral basis by FUSADES since 1988, C 1 Crime which on the consult of the unfavorable aspects for investment climate, showed that F 6 Uncertainty crime was in the first place, and uncertainty in second place, maintaining the tendency 2 R observed for years, Graphic 1. 3 Low Activity C R 4 Other M R 5 C 660 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • Panama Corruption Bureaucracy Work Force Work Safety Training Regulation Courts Costa Rica Bureaucracy Infrastructure Access to Tax Regulation Safety financing Guatemala Safety Corruption Bureaucracy INDICATORS Political Instability Work Force Training First Ins Regulati Honduras Safety Corruption Bureaucracy Political Access to Civil Co Regulati Instability financing Minor C El Salvador Safety Political Access to Bureaucracy Corruption Regulati Instability financing Comme Nicaragua Bureaucracy Political Corruption Infrastructure Access to Instability financing Graphic 1. Factors for unfavorable climate, 2009-2011. 2009 2010 2011 0 Cou 1 Crime Firs 2 Uncertainty Reg 3 Low Activity Civ Reg 4 Other Min Reg 5 Com 6 Question: In your opinion, ¿what is the main factor for an unfavorable climate? Source: Dynamic Business Poll, FUSADES, 2009 – 2011. The poll executed by WEF annually to businessmen from the three biggest cities in the country, shows that one in four businessmen considers crime as the main obstacle to do business, followed by political instability and access to financing in second and third place, Graphic 2; and this same result is observed in opinion polls done in the whole population and also the opinion of credit risk rating agencies5. Graphic 2. Main problems to do business in El Salvador 2011-2012.ng Business Crime and Delinquency 2010- Variation Access to Financig 2011 Corruption 63 + 121 = Inadequate Work Training 93 - Tax Regulation 130 + Inadequate Infrastructure 112 = Deficient Public Health 122 + Monetary Regulation 0 5 10 15 20 25 30Problem 4 Problem 5 Question: In your opinion, What are the main problems to do business? Source: Global Competitiveness Report 2011-2012.Work Safety July -December 2010 January - JunRegulation Pending Pending Pending cases in Pending cases in Reactiv Courts Entered Reactivated Solved cases at Entered Solv ax Regulation Safety the the end Rate the ated beginning beginning olitical Work Force First InstanceCourts, Former Civil Regulation 4,012 2,918 373 4,118 3,185 79% 3,185 213 68 1nstability TrainingPolitical Access to Civil Courts, Former Civil Regulation 38,084 11,406 1,959 18,443 33,189 87% 33,189 580 566 9nstability financing Minor Courts, Former CivilBureaucracy Corruption Regulation 13,260 3,374 260 9,039 7,855 59% 7,855 29 800 3 CommerceCourts 13,337 3,110 247 4,103 12,591 94% 12,591 52 72 6nfrastructure Access to LEGAL AND INSTITUTIONAL SITUATION REPORT 61
    • INDICATORS Institutionality is negatively affected by insecurity influencing the business climate and the opportunity generation for citizens.Precisely facing this issue, the governments from El Salvador and The United States prepared the initiave for the Partnership for Growth, a proposal to solve the biggest restrictions to growth in El Salvador: violence and insecurtity and low production in the tradeable market as well as the civil service, tax simplification, excessive bureaucracy, respect to intelectual property rights and Puerto La Union’s concession, among others6. In this sense, November 2nd, 2011, these governments presentes a Conjoint Action Plan 2011-2015 (CAP) to overcome those obstacles, acknowledging the importance of a well functioning market economy and the fundamental role of the private sector in being a lider in economic development, while the government fulfills its essential purpose of establishing an institutional environment favorable to economic growth, facing the social breaches and investing in people, for whom amongst other elements, the Council for Growth was created, with the purpose of removing obstacles for growth through facilitating a trust climate, promoting communication and colaboration between public and private sectors, develop options to improve productivity, and monitor, evaluate and inform on the CAP’s progress7.62 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • 3. BUSINESS REGULATIONThe economic activity requires good rules that establish rights in a clear and preciseway, and that facilitates conflict resolution, and generates predictability in transactionsand protection against abuse.3.1. Commercial Area3.1.1. Commercial Legislation ProposalsDuring the semester there were various legal proposals, however, a law project withmore discussion was the new proposal from the Ministry of Economy about theElectronic Signature Law, and the Micro and Small business Law, this last one relatedto the simplification of procedures to create and incorporate entrepreneurs; and thefirst one, related to the regulation of Electronic Commerce8, and to that effect Table3 presents some recommendations about the best international practices9. As it wasmentioned since the Legal and Institutional Situation Report from 2010’s first semester,the competitiveness agenda to promote new legal initiatives is still pending.Table 3. Recommendations to elaborate an Electronic Signature Law. i. Manage a balance of interests between e-commerce development and e-government services. ii. Implement a certification and signature system that allows the signature and document exchange internationally, according to more advanced technological standards. iii. Guarantee data protection and consumer general protection. iv. Differentiate between signature and certification services as well as signature and encrypting services. v. Define the evidential value of the electronic document in judicial and administrative processes. vi. Strengthen the intervention in third instances such as service providers, and vii. Define the role of the State in the control and guarantee of services.Source: DR-CAFTA Regional Program.3.1.2. Current Situation on Civil and Commercial trialsThe Doing Business Report 2012 presented an indicator of the posibility to executecoercively a contract using the judicial system, named Contract Execution, whichmeasures the number of processes, days and judicial recovery costs. El Salvador isplaced in the 66th position out f 183 countries, by presenting 34 processes 786 daysand a cost of almost 20% of the amount claimed, and in comparison with 2011’sedition, it came down nine positions due ot the increase in processes for this activity,and its worrying stagnation since 200410. LEGAL AND INSTITUTIONAL SITUATION REPORT 63
    • Tax Regulation Inadequate Infrastructure BUSINESS REGULATION Deficient Public Health Monetary Regulation 0 5 10 15 20 25 30 blem 5ety July -December 2010 January - June 2011 Regarding the Civil and Commercial Procedures Code, valid since June 1st, 2010, Pending Pending Pending Pendingety Courts based in the data from the Supreme Courtthe in Justice, there Solvedmore finalized causes cases in the Entered Reactivated Solved cases at Pending cases Rate of Entered Reactiv are ated cases at Pending Rate during 2011 in comparison the end 2010, due to the increase in the resolution rate from beginning with beginning the endrk Force First InstanceCourts, Former Civil tribunals from 373 to 58%, Table 4; however,213 percentages can be improved 4,012 2,918 35% 4,118 3,185 79% 3,185 this 68 1,214 2,252 56% Regulationning through the incorporation of new practices of court management, new technologies,ess to Civil Courts, Former Civil Regulation administrative support, etc. 33,189 87% 33,189 580 38,084 11,406 1,959 18,443 566 9,989 24,346 64%ncing On one hand, according to the rate of pending cases there have been 56% finalizedruption Minor Courts, Former Civil Regulation from the total of the 9,039 and commercial claims29filed with the old Civil Procedures 13,260 3,374 260 civil 7,855 59% 7,855 800 3,048 5,636 43% Code, derogated June 1st, 2010, Table 4. The challenge is to finalize the 38,565 cases CommerceCourts 13,337 3,110 247 4,103 12,591 94% 12,591 52 72 6,384 6,331 47% ess to before June 1st 2012, and afterwards begin the reception of cases applying the new ncing Civil and Commerce Procedures Code11. Table 4. Case movement from the Civil and Commerce Procedures Code. July - December 2010 January - June 2011 Pending Pending Pending Pending cases in Pending cases in Reactiv Courts Entered Reactivated Solved cases at Entered Solved cases at PendingRate the Rate the ated the end the end beginning beginning First InstanceCourts, Former Civil 4,012 2,918 373 4,118 3,185 79% 3,185 213 68 1,214 2,252 56% Regulation Civil Courts, Former Civil Delinquency Crime and y Regulation 38,084 11,406 1,959 18,443 33,189 87% 33,189 580 566 9,989 24,346 64%tion Access to Financig Minor Courts, Former Civil 13,260 3,374 260 9,039 7,855 59% 7,855 29 800 3,048 5,636 43% Regulation Corruption CommerceInadequate Work Training Courts 13,337 3,110 247 4,103 12,591 94% 12,591 52 72 6,384 6,331 47% Tax Regulation The Civil and Commercial Procedures Code, is valid since June 1st, 2010, and derogated the Civil Inadequate Infrastructure Procedures Law. Resolution rate: number of finalized cases in relation to the number of cases entered during the Deficient Public Health analyzed picture. Source: Data base from the Statistic Bulletin data Monetary Regulation 0 5 10 15 20 25 30 Table 5. Case movement from the Civil Procedures Code. roblem 5afety July -December 2010 January - June 2011 Pending Pending Pending Pending cases in Pending cases in Reactiv Courts Entered Reactivated Solved cases at Entered Solved cases at Pending Rateafety the the end Rate the ated the end beginning beginningWork Force First InstanceCourts, Former Civil Regulation 4,012 2,918 373 4,118 3,185 79% 3,185 213 68 1,214 2,252 56% raining ccess to Civil Courts, Former Civil Regulation 38,084 11,406 1,959 18,443 33,189 87% 33,189 580 566 9,989 24,346 64% nancing Minor Courts, Former Civil orruption Regulation 13,260 3,374 260 9,039 7,855 59% 7,855 29 800 3,048 5,636 43% CommerceCourts 13,337 3,110 247 4,103 12,591 94% 12,591 52 72 6,384 6,331 47% ccess to nancing The Civil Procedures Code was derogated June 1st, 2011; however, it continues to be applied to all the cases filed according to this law, and following Legislative Decree 732, all these cases must be finalized before June 1st, 2012. Pending rates: number of cases pending resolution related to the number of cases until June 1st, 2010. Source: Database from the Statistical Bulletin from the Supreme Court of Justice. July - December 2010 January - June 2011 Pending Pending Pending Pending cases in Pending cases in Reactiv Courts Entered Reactivated Solved cases at Entered Solved cases at PendingRate the Rate the ated the end the end beginning beginning 64 LEGAL AND INSTITUTIONAL SITUATION REPORT First InstanceCourts, Former Civil
    • BUSINESS REGULATION3.1.3. Labor legislationSince July 2011, the Supreme Court of Justice, with the support from the InternationalWork Organization, presented the study “Status Situation of the Labor JusticeAdministration in El Salvador”, which has been used as a tool for the elaboration of adraft labor procedures law to modernize the legislation and guarantee more access tojustice12. On September 2011, a consult commission was created from these reforms,constituted by public sector representatives and civil society: universities, knowledgecenters, judges, union officials and former officials from the Executive Technical Unitof the Justice sector, the Public Defense Office and the Ministry of Work. Afterseveral meetings, the Commission will present the reforms before Parliament nextsemester13.On the other hand, the Supreme Court of Justice, (SCJ) and the USAID program for theStrengthening of Labor Justice for DR-CAFTA, in compliance with the commitmentswith the “White Book”, implemented the Labor Tribunal Management System, aproject executed in Guatemala, Honduras, Costa Rica and the Dominican Republic,that is modernizing the work inside the tribunals, for example, file management,hearing scheduling, task distribution, among others14, which has to reduce the defaultthat according to data from the SCJ until June 2011 in the nine courts specialized inthe labor matter, have 12, 621 cases pending to be solved15.3.1.4. Arbitration RegulationThe state must fulfill the commitment acquired by contract with any investor, nationalor foreign, and among them, the observance of arbitral awards is a key element thatbrings positive signs that strengthen legal and investment certainty. On July 2011,the International Chamber of Commerce, solved an arbitration between ENEL andthe Hydroelectric Executive Commission from Rio Lempa (CEL), obligating this lastentity to comply with certain actions; however, making use of its rights, CEL filed aclaim of annulment before the Appeal Chambers in Paris, and at the closing of thisreport, the resolution is still pending16. It must be clarified that the resolution fromthe Chamber will make the arbitral award firm and mandatory regardless of whomthis resolution favors, because this document has the force and validity of a judicialsentence with the authority of judged matter in El Salvador.On the other hand, in December 9th, 2011, the ruling from the ConstitutionalChamber, SCJ in process 11-2020, declared the constitutionality from Art. 66-AMediation, Conciliation and Arbitration Law. This ruling weakens the arbitrationconcept, because it allows judicial participation through an appeal, and it also allowsa forced arbitration in the legal system and in general, it eliminates the majority ofbenefits of this figure, such as, agility, probity, and specialty among others17. Thisinterpretation is not shared by FUSADES, because its implementation affects theright to terminate civil or commercial affairs by arbitration, which is a right establishedin Art. 23 of the Constitution. LEGAL AND INSTITUTIONAL SITUATION REPORT 65
    • BUSINESS REGULATION 3.1.5. Free Competition and Consumer’s Protection Law One of the highlights from this semester was the judicial confirmation of administrative decisions from the Consumer’s Defense Office and the Competition Superintendence (CS), as well as the recent resolutions from both institutions that allow establishing an interpretation line for law in commercial activities, for example, concentration requests in relevant economy sectors such as telecommunications or insurance18. During the semester the Administrative Contentious Chamber from the Supreme Court of Justice, declared the unlawfulness of the convicting resolutions from the CS Directive Council in three cases of competitor agreements and one for lack of cooperation in providing information, and that highlights the following aspects: i) CS’s Faculty to ask for information for market studies, ii) cartels are an anti-competition practice per se, iii) application of the Administrative Fine and Arrest Imposition Procedure Law, and, iv) the CS is obligated to publish final resolutions19. At the closing of this report, there are 14 pending cases of resolution from this chamber. The Constitutional Chamber on the other hand, dismissed a constitutional protection claim justified in the faculty of the Superintendence to require information to the subjects under investigation20. The Administrative Contentious Chamber declared the legality of the resolution from the Consumer’s Defense Office that convicted for improper fees, Art. 42 letter b from the Consumer Protection Law, to a financial provider21. Also, the discussion over the reforms to the Consumer’s Protection Law continued during this semester in Parliament, and it is to be noted that this discussion must respect the social market economy principles an tend to the following aspects: i. Highlight the importance of consumer and provider; ii. Incentive more information generation in the market; iii. Promote accountability and better institutional coordination; and iv. Incorporation to the country’s investment promotion policies 3.2. Financial Area The events in the financial matter can be analyzed in two big areas: on one hand, the institutional rules where the financial service providers and financial system’s supervising entities main faculties are established; and in the other hand, those rules that regulate the relationship between providers and consumers of financial services. 3.2.1. Financial System’s Supervision and Regulation Law and the Financial System to Promote Development Law On January 14th, 2011, the Financial System’s Supervision and Regulation Law was approved, which was one of the structural requirements from the Stand By Agreement with the International Monetary Fund (IMF), and came into force August 2nd, 201122. This law assigned the supervision of the financial system exclusively to the Financial System Superintendence (FSS), and the regulation faculties to the Central Bank of Reserve.66 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • BUSINESS REGULATIONOn April 13th, 2011 the President through his Treasury Minister presented beforeParliament a draft of the Financial System’s Law to promote development, and it wasapproved on September 22nd, 201123. This regulation creates the Development bankof El Salvador, the Economic Development Fund, and the Salvadorean GuaranteesFund, and so, a financial system to promote development to which some public entitiesare added, such as the Farming Promotion Bank, the Popular Housing National Fund,among others. In general terms, the law shares the banking system’s regulation and themain challenge is implementation as a part of a public policy with good managementand financial practices, to achieve better financing options to productive projects;however, the risk of discretionally granting them, still persists24. Also, other pendingaspects for implementation are: appointment of officials, adequate the technicalnorms of these sectors, and the institutional reorganization of the Multi-sectorialBank of Investments to the Development Bank, among others. The next report willfollow up the law application that will come to force in January 2012.On the other hand, in spite of the government’s commitment to approve theInvestment Funds Law during this year, the project is still being discussed in theExecutive Organ25. This project will facilitate the generation of new investmentsources by channeling savings into the securities market and it will also allow morefinancing sources to the productive sector. This initiative will be followed up during2012.3.2.2. Regulation between Consumer and Financial Services ProvidersDuring this semester, there were three regulations discussed concerning therelationship between financial services consumers and providers, such as personalloans and credit cards.The first one is the Credit Records History Information Services Regulation Lawthat came into force October 25th, 2011 after a 90-day period of vacation legis since itspublication in the Official Gazette, July 27th, 201126. The Law adds to the dispositionscontained in the Consumer’s Protection Law, and access to personal information.It is also noted, in the second regulation, the discussion about the reforms to the CreditCard System Law, approved on September 29th, 2011 by Parliament, who reformedArt. 19 establishing that no issuant or co-issuant can establish effective interest ratessuperior to eight times the pondered interest rate that banks pay to the public for aone-year deposit27. The Salvadorean Banking Association (SBA) and other experts onthe subject, manifested that the reform was not consulted and rushed, because thepublic and private actors that specialize in the subject were not heard; they also pointedout the affectation caused to loan granting28. Those precise aspects were revised ina timely manner by the President, who in October 14th, 2011 returned the decreewith observations, alleging among other issues: “the convenience of the beginningof respective consultations between all parts involved in the matter”, as well as thenegative effects to consumers, because the reform would deteriorate the access tocredit for the most part of consumers, creating a distortion that obligated them to rely LEGAL AND INSTITUTIONAL SITUATION REPORT 67
    • BUSINESS REGULATION on markets where the state doesn’t have the necessary tools to protect their rights29”. At this report’s closing, the reforms had not been approved by Parliament. Finally, the legislative discussion over the draft Law against Usury, restarted during this semester, and the Financial Commission continued the study of the usury crime determination and the regulation of this commercial figure, through a comparative analysis on international legislation30. On June 20th, 2011, SBA representatives and other financial services provider associations pointed out that this proposal could restrain the expansion of financial services to the public, and even, increase interest rates to users, and they consider the adequate solution is to protect the consumer through legal reforms and the promotion of transparency in the financial system; however, they presented a proposal based in the segmentation by type of products and the amount of credits31, a mechanism also recommended by the FSS. On the topic of interest rate regulation, international studies in microfinance from a global perspective, highlight El Salvador as “the first country in Central America and fifth place in the world ranking with a particularly solid regulatory structure”. However, the study continues by specifying “it is foreseen that in 2011-2012 there will be a Law against Usury approved for the entire financial system, which is arising in micro loaners that fear that some distortion will be introduced into interest rates”32. The state must act as a regulator to guarantee that the markets are complied with; and in so, to FUSADES, the interest rate situation is happening to accomplish a more efficient market, and proposes the following: i) promote more competition through clear and stable rules; ii) improve transparency so that the credit card holder can compare cost and conditions from providers; iii) strengthen institutions that protect the consumer; iv) expand financial education programs for the credit card holder33. 3.3. Taxation Area The country’s fiscal situation is critical and unsustainable, and requires a wholesome solution derived from a fiscal pact that involves institutionalism, transparency and the efficient use of public expenses, a topic that has been suggested by FUSADES and other actors for several semesters34. The CAP contains as a goal the fiscal recollection strengthening and transparency, acknowledging the low levels of recollection and the low fiscal recollection capacity, as well as reaffirming the essential character of a fiscal pact between the government and the private sector, and that the public expense system improves in transparency and shows clearly how the income is being utilized35. In this sense, according to the Doing Business Report 2012, in countries where tax payments are more complicated and expensive, a big part of the economy is transferred to the informal sector, where no taxes are paid and no contribution is made to infrastructure or public services;68 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • BUSINESS REGULATIONin this aspect, El Salvador is ranked 146 form 183 evaluated countries in the PayingTaxes indicator, that analyzes the complexity of payment through the amount ofproceedings, time and amount required in taxation36.During this semester, there were various actions towards strengthening public capacitywithin the tax sector, and improvement of public finances through administrative andlegal reforms, noting those related to the tax over income, (TOI), that were approvedon November 14th, 201137, and the main modifications are as it follows:i. Modification of the annual income exempt from the taxation table for a natural person, inheritances and domiciled trust funds from $2,514.29 to $4,064;ii. Increase from 25% to 30% of the tax rate for legal entities with taxed incomes over $150,000 and for non-domiciled natural person, inheritances and trust funds;iii. Increase of the aliquot from the anticipated payment to charges from 1.5% to1.75% of the tax over income;iv. Application of the TOI to the distribution of paid or credited earnings of legal entities or facto unions starting 2011, with a rate of 5%;v. Creation of a new mechanism of minimum payment of TOI to some contributors, which coexists with the current mechanism, and taxes net income with a rate of 1%;vi. Granting of new faculties to the Public Administration to require information from contributors affiliated to the Salvadorean Institute of Social Security, Pension Fund´s Administrators and the FSS.In these reforms there was little space for dialogue with the sectors and civil society,a situation contrary to the pursuit of consensus and understanding between the stateand society, as a mechanism that will help the recovery of a growing path, in benefitof all Salvadoreans, especially to those more needed38.Furthermore, during this semester, there was a warning about violation of thetax secrecy through the publication of reserved and erroneous information aboutvarious contributors during the Parliamentary session of December 14th, 201139,which constitutes an infraction to the Tax Code which in Art. 28 establishes: that “theinformation regarding taxable bases and the determination of taxes that are stated intax declarations and in other documents in the Public Administration’s power, willhave the character of reserved information”, this infraction was possibly generateddue to the lack of adequate controls of information or illegal behavior that should beinvestigated by the Transparency and Anti-Corruption Sub-secretary and the GeneralProsecution40. Also, there was another law project studied regarding the modificationof crimes related to Treasury and to give Parliament the faculty to know and requiretax information from contributors41. It is important to generate trust in contributorsfacing the tax legal framework. LEGAL AND INSTITUTIONAL SITUATION REPORT 69
    • 4. STATE MODERNIZATION 4.1. Reforms to the Public Purchase System On May 18th, 2011, parliament approved a group of legal reforms to the Acquisitions and Contracting of the Public Administration Law (LACAP) that constitute a setback in the Salvadorean purchase system, because it sets away from the transparency, competition and accountability principles, as an example, the incorporation of new exclusion causes within the same law, and the addition of new possible scenarios for a direct hiring, and also not attending to the public purchase issues that in some cases have generated cost increases and delivery delays, or a confrontation towards the operative challenge of incorporating small businesses in public purchases42. Since that date, there have been some new legal initiatives to reform LACAP presented by the Treasury Ministry and the legislative fraction from ARENA, which don’t actually solve the critiques from both public officials and purchase participants, because, for example, the maintain the exclusion set by law and the new possible scenarios for a direct hiring43. These reforms are still being discussed in Parliament and will be followed up in next semester. 4.2. Public Infrastructure Regulation This semester has been highlighted by the approval of the Puerto de La Unión Centroamericana Concession Decree and the government commitment with the Public-Private Partnership, with the objective of establishing rules that allow public infrastructure development. On May 23rd, 2011 the Treasury and Special of Budget Commission initiated the discussion of the draft law related to the Port, with the intention of approving the necessary legislation to begin the effective functioning of that infrastructure, avoiding the government extra maintenance expenses, which would round in about one million dollars a month; and generate a positive precedent for future projects from this public- private partnerships44. On September 8th, 2011, three years after the port’s construction, Parliament approved the Multipurpose Port Terminal Specialized in Containers Concession Law, Phase I, from the Puerto de La Unión Centroamericana, and it’s expected that in April 2012 begins the international public purchase to select the concessionary, given that September 21st, 2011, the President sanctioned this decree and it was published in the Official Gazette, October 3rd and 11th, due to printing errors45. This law fulfills the constitutional requirements and the challenge is actually the execution of such efficient and transparent international public purchase, with the intention to provide users the best service available, for which a professional, technical and multi- disciplinary staff is required, as well as institutional coordination, transparent and competitive procedures, and the decided political support46.70 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • STATE MODERNIZATIONA novelty in the legal system is that Art. 13 from the law gives Parliament the facultyto approve a contract between government and the winning concessionary, with theintention of providing more certainty to the investment; however, it will be essentialto maintain the discussion based on technical and economic criteria to create thefavorable conditions for this project and not put obstacles in the public purchasedue to party or sectorial interests47. It is also important to maintain the technicaland apolitical quality of the Sea Port Authority (SPA) and the Independent PortuaryExecutive Commission due to the importance of both entities in the concessionof Puerto La Unión, because the first one is in charge of issuing the concessionand contract approval, and the second one, the port’s concessionaire. Therefore,follow up will be given to the reform proposed for the SPA’s General Law, fromSeptember 8th, 2011, that seeks to modify the composition of the Directive Councilof that institution, expanding it from 5 to 7 members48, as well as the action from theIndependent Portuary Executive Commission’s President, appointed in December13th, 201149.On the other hand, on April 15th, 2011, the Executive Organ presented before theEconomic and Social Council (ESC) the “Draft for the Public-Private PartnershipLaw”, with the conceptual directions for the creation and operation of this investmentscheme50. Parting from the comments of some of civil societies that participate inthe ESC, the project was modified and on August 31st, 2011, the ESC issued a finalstatement approving this new regulation project, considering necessary to value theobservations pointed by international experts related to the institutional and regulatoryaspects of the regulation51.The promotion of this project is part of the commitments of El Salvador underCAP 2011-2015, as well as ensuring the institutional strengthening necessary for itsexecution52. At this report’s closing date, the project’s presentation before Parliamentis still pending, and thus, this is the timely moment to incorporate observationsfrom the ESC and approve this legal framework with more political support, andfurther promoting the construction of an investment agenda and infrastructuremodernization. It is also important to reiterate that ESC must be strengthened as adialogue space to allow the reaching of agreements in matters of national relevance.4.3. Procedures and BureaucracyDuring this semester, public and private participants have highlighted proceduresand bureaucracy as a key element in the implementation of public policies relatedto competitiveness. Different business unions have appointed as an obstacle in theircommercial activity the excessive procedures and bureaucracy53, the CAP 2011-2015incorporated excessive bureaucracy within the obstacles for growth and as a task forthe Council for Growth54, the Global Competitiveness Report 2011-2012 noted in thebureaucracy indicator, the setback in El Salvador, placing it in position 144 out of 183evaluated countries55. LEGAL AND INSTITUTIONAL SITUATION REPORT 71
    • STATE MODERNIZATION As an example, the Doing Business Report 2012 investigated the procedure to obtain a construction permit for a commercial office and discovered that in El Salvador it takes 157 days, 33 procedures, and an approximate cost of $2,570, data that places it in position 144 out of 183 evaluated countries56. In this sense, FUSADES warns the need of an efficient conception of State, that is a business activity facilitator and whose officials work under the philosophy of providing efficient and transparent services. On October 5th, 2011 the Salvadorean Association of Industrials and representatives from government presented the “Industrial Policy 2011-2024”, a document that acknowledges the current problems of the industrial sector, and to that effect identifies 21 institutions and 25 laws related directly to the economic activity, which have presented difficulties of coordination and direct dialogue, as well as proceedings and procedures excessively bureaucratic. Therefore, they propose the creation of an Industrial Committee and an Industrial Development Board, as well as the issuance of reforms for procedure simplification in the government sphere, amongst others57. On another note, given the importance of civil service in the implementation of public policies and the service provision to citizens, and to contribute with the maintenance of an environment that stimulates private investment and competition, the CAP 2011- 2015 incorporated the need to improve civil service in those areas that the Council for Growth considers necessary58. And so it is essential to harmonize the Civil Service Professionalization Program, from the Governability and State Modernization Sub- secretary, and promote the discussion of an Administrative Career Law, a regulation that will allow the evaluation of the official’s performance regarding their labor rights and human resources professionalization59. Both aspects were proposed by FUSADES in the “Economic, Social and Institutional Strategy 2009-2014”60, and that could avoid the strikes occurred during the semester that impeded the essential services provision and commercial activities61.72 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • 5. INTERNATIONAL LEGISLATION5.1. Commercial AgreementsEl Salvador has seven Free Trade Agreements (United States, Mexico, Chile, Panama,Dominican Republic, Colombia and Taiwan) and a free commerce zone in the formatof Central American Integration, which constitute the basic rules for taking advantagesin both the national and regional territory.Regarding the implementation of Dominican Republic-Central America Free TradeAgreement (DR-CAFTA), it is worth to mention that the Environment AffairsSecretary, responsible of receiving and investigating citizen claims on environmentalmatters currently works with two files and seven communications, among themCAALA/11/007 Agua Caliente River, on a case about El Salvador that began thissemester and in which there needs to be a verification of the compliance to theenvironmental legislation about the solid waste disposal and residual waters that arepoured into Agua Caliente river in Ciudad Arce62.The Association Agreement between the European Union and Central America is stillin review and approval process, on one side, on October 25th, 2011 it was approvedby the European Commission and will be presented to the European Union Councilfor its final approval; and on the other side, it’s expected to be presented to CentralAmerican congresses during 2012’s first semester. However, during this semester therewere some negotiations made about the distribution of exportation and importationquotas of products to the European Union, for example, sugar, rum, meat and tuna,among others63. The pending tasks are the overpowering of commercial barriers, bothcustoms as well as operative, and the promotion of a true customs union.On September 19th, 2011, the Partial Reach Agreement between El Salvador andCuba was subscribed, and will allow the free commerce of products and servicesagreed on the three negotiation rounds performed64. On November 22nd, 2011Guatemala, Honduras, El Salvador and Mexico signed a commercial treaty thatunified all the dispositions in the existent commercial agreements65. Also, El Salvadorcalled reaching out meetings with Ecuador, Bolivia, South Korea, Venezuela andthe Caribbean community66. In this sense, it is precise to fit these negotiations in anintegral commercial policy that maximizes their benefits, and that also includes thenegotiation as a block with the rest of Central American countries as a general rule.5.2. Exports Reactivation Law and Industrial and Commerce Free ZonesLawThe legal framework related to the industrial sector compiles the main laws thathave direct or indirect relation, with investment promotion as well as the differentprocedures and regulation connected to the sector’s functioning. LEGAL AND INSTITUTIONAL SITUATION REPORT 73
    • INTERNATIONAL LEGISLATION The Industrial Policy 2011-2024, presented by the Salvadorean Industrial Association and government representatives, compiles the commitment of the business, labor and government sectors, acknowledges current problems and proposes immediate actions with the objective of expanding and reconverting the productive tissue to contribute with the country’s economic growth. Some legal initiatives are the approval of the Personal Property Guarantees Law and the Electronic Signature Law, amongst other, and also, the proposal of other alternative strengthening measures for the institutions related to the sector, such as the Exports and Investments Promotion Agency of El Salvador. Ministry of Economy, etc., that also appears in CAP 2011-201567. The challenge is to go from the formulation stage to the effective implementation of these proposals68. An importan element in this policy is the free zone modernization policy, given that in order to fulfill the objective of complying with the dispositions set by the World Trade Organization (WTO), El Salvador must modify the current legal regime to relocate incentives conditioned to exports before December 31st, 2015. So this scenario presents the opportunity to modernize the free zone and active perfecting deposits’s structure, as it has been done in the rest of the countries in the region (Costa Rica, Guatemala, Panama, Dominican Republic, Mexico, Colombia and Peru)69. In this sense, on October 10th, 2011, Ministry of Economy representatives, and the Textile, Confection and Free Zones Industry Chamber (CAMTEX) presented a project to reform the Industrial and Commerce Free Zones Law, that modernizes the production incentives subject to investment levels system and job generation, and maintains a legal framework attractive to investments, which must be approved as briefly as possible70. On the other hand, on July 21st, 2011 Parliament approved the Salvadorean System for Quality Creation Law, that incorporates new regulation on the commerce and quality of products71, and on December 13th, the Ministry of Economy published the National Quality Policy 2010-2014, that intends to strengthen the institutional framework, promote quality education and culture , promoting consumer´s protection and support to the national productive capacity72. In general, the coordinated implementation of the institutions new faculties persists, so that it generates the due balance between quality and commerce, with the purpose of avoiding this matter to turn into a non-customary barrier. 5.3. Central American Integration Central American Integration transcends regional institutions and owes its reason for being to citizens, and in that way, its worth noting the creation of discussion spaces about the process of regional integration on the part of the General Secretary of the Central American Integration System (SICA), that allowed the debate between government representatives, scholastics, knowledge centers and international cooperation73.74 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • INTERNATIONAL LEGISLATIONIn this semester, El Salvador held the Pro Tempore Presidency of SICA, and organizeda Presidential Meeting of SICA, in the occasion of the weather emergency in theregion and it was agreed to request international cooperation to overcome the chaoticsituation. In the same manner, as the Pro Tempore President of the Central AmericanIntegration System, organized three meetings with the rest of the countries with theobjective of approving new customs regional regulation that harmonizes registrysystems, quality aspects and customs fees, and in general, promotes the regionaleconomic integration; also on November 25th, 2011, Central America presented acounterproposal to the Incorporation of Panama to the Subsystem Protocol andin January 2012 will be initiated the meeting of negotiation, during Honduras’s ProTempore Presidency74. However, the legal, commercial and political disputes amongsome of the Central American region countries still persist75.During this semester, and regarding the Customs Union, the government executeda consultation process about the Modification to the Customs Union between ElSalvador and Guatemala Model Agreement Protocol, which is now in ratificationprocess in Parliament76, a document that is congruent with the rest of the existingregional regulation and respects El Salvador’s Constitution; however, there are somedifficulties observed with the creation of a new institutionality and the implementationof its dispositions, in part due to the lack of discussion with civil society and productivesector, previous to the Protocol’s subscription.On a different note, the Central American Court of Justice, with the support ofcivil society’s organization, promoted the discussion over regulation to favor regionalintegration. On one side, the Central American Nationality Treaty, regulation thatintends to create a common nationality for all nationals from the countries part ofSICA, with the corresponding migratory benefits, for example, a common Passport;and on the other side the Central American Mortgage between de Guatemala, ElSalvador, Honduras, Nicaragua, Costa Rica, Panama and Dominican Republic Creationand Implementation Treaty, that will allow the use of a mortgage in a regional territory,and that is currently being discussed in Parliament77.5.4. International OrganismsThe World Trade Organization (WTO) takes care of world guidelines to rule commercebetween nations, and its main function is to oversee that commerce is executed in themost fluent, foreseeable and free way possible.Under this perspective, on October 19th, 2010, El Salvador requested the celebrationof a consultation with the Dominican Republic regarding the provisional and definitivesafeguard measures imposed by that country on Polypropylene Sacks and TubularTissue importation; and the later establishment of an Arbitral Panel to solve thatdispute. On November 23rd, 2011 the Arbitral Panel concluded that the DominicanRepublic acted in way non-compatible with its obligations towards the WTO in settingthis safeguard measure, and therefore, it has to be eliminated78. LEGAL AND INSTITUTIONAL SITUATION REPORT 75
    • 6. CONCLUSIONS • The international indicators appear to be stagnant and even some of them show a systematic setback in El Salvador’s business climate, due to the constant perception of crime and absence of political stability. • The violation of the tax secrecy in Parliament generated worries in taxpayers and affected the country’s institutionality, rule of law, and legal certainty that must reign in every nation. • The Constitutional Chamber’s ruling on arbitration regulation weakened that alternate conflict resolution mechanism by allowing judicial participation, a situation that affects directly the business climate and reduces the country’s competitiveness. • The approval of Puerto de La Unión Centroamericana Concession Decree constitutes the biggest breakthrough this semester, investment in public infrastructure, within the state’s modernization aspect, because it establishes clear rules to the international public purchase for the project’s concession to hire a world-class logistical operator. • The subscription to the Conjoint Action Plan for Growth between the Government of El Salvador and the United States of America that seeks among other aspects, to identify concrete solutions to the most urgent problems affecting the business climate.76 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • 1. INTRODUCTION Transparency in government institutions is the absence of restrictions to public knowledge on public affairs. Thus, it refers to a free Access to public information, but also, in a more extensive manner, to a way of behaving for public institutions towards citizens, in compliance with Rule of Law, being these accountable for their administration and according to public ethic rules. It is also the absence of a highly damaging phenomenon for societies: corruption. Transparency is instrumental to achieve the consolidation of a democratic state, which based on popular sovereignty, also implies the knowledge on how to exercise the delegated public power. It also requires the active participation from the population in the public affairs. Being that the subject is related to the quality of the public administration, transparency must be developed in all the state activities, from the formulation of the country’s general budget to the expenses of the smallest municipality. The effects are also extensive, because transparency on a higher or lower level to public investment, private investment, productivity, public service provision, and government stability. That is why transparency is considered to be a fundamental value to the democratization process in the country and that relies on a systematic vision for their success. The component will be approached from an international point of view, using indicators that allow comparing levels of transparency in El Salvador with other countries, and observing the advance in compliance with international treaties against corruption. Also, from a national point of view, where the report will take a glance at the performance of the institutions with the purpose of guaranteeing the transparency in public administration and the advance in the implementation of the Access to Public Information Law (APIL).78 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • contratistas y personal del ministerio. 100% 90% 80% Se encuentra en la 2. INDICATORSdoreño 70%ción fase de instrucción 60% en el 50% Juzgado Séptimo de The Corruption Perception Index (CPI) from International Transparency measures 40% Instrucción de San levels of corruption perception in the public sector in a scale of 0-10, in which the 30% Salvador. lower the number, the highest corruption perception. This measurement is formulated 20% from polls given to businessmen and experts on the subject. The results for 2010 10% reveal that El Salvador has obtained a mild increase in the corruption perception 0% from 3.6 in 2010 to a 3.4 in 2011, going back to the levels obtained in 20091. This * placed El Salvador in position 80 from 183 evaluated countries, a lower performance than position 73 of 178 countries obtained in 2010. El Salvador is still the 2nd place En la actualidad el in Central America and in 14th place compared to rest of the continent (32 countriesral de caso se encuentra en evaluated).restre la Cámarario de Tercera de lo Penal The score % declaraciones de toma de posesión the highest score obtained by El Salvador obtained is still pretty much below presentadas de la Primera Sección in the CPI of 4.2 from 2004 and 2005. Also, considering that the evaluation is based del Centro. in 10, it is % declaraciones patrimoniales de cese de funciones presentadas obvious that corruption perception is high. Graphic 1. The Corruption Perception Index, 2001- 2011. 6 5 4 El Salvador Guatemala 3 Costa Ricanvocante 2 Nicaraguade Economía (MINEC)de Gobernación (MIGOB) Honduras 1de Educación (MINED) de Comunicaciones de la 0 de la República (SECOP) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 de Trabajo y Previsión Social Source: Own Elaboration with data from International Transparency.nscritos LEGAL AND INSTITUTIONAL SITUATION REPORT 79
    • 3. Transparency on an International Level 3.1. Compliance Analysis of the United Nations Convention Against Corruption The evaluation mechanism for the application of the United Nations Convention Against Corruption (UNCAC) is in its first year of implementation. El Salvador has participated, as an evaluating country and it will be until the next period when it will be subject to this evaluation. The Methodology developed is based on a first phase of State self-evaluation using a especially designed software that contains the verification list for the compliance with certain UNCAC dispositions. Afterwards, experts from the evaluating states, who issue a report in which the good practices and challenges to the convention’s implementation are included, evaluate this information2. One weakness of this mechanism is that these reports remain confidential and the evaluated state is who decides whether or not to publish them. It is expected that El Salvador decides to disclose the process, as it has been done before in the case of the Mechanism for Follow-Up on the Implementation of the Inter-American Convention against Corruption (MESICIC), which is an inter-government instrument established by the OAS to supports states members, in the implementation of the Convention’s dispositions, through a process of mutual evaluations in equal conditions, where specific recommendations are formulated, related to areas where there are legal voids or that require further advances. Also, in the reference terms document from the UNCAC states are encouraged to disclose the report, as well as facilitating the participation of the potentially interested parties, including both public and private sectors, in a self evaluating process and also in the visit that assessing experts make to country3. Thus, it is expected that the government makes an effort to carry out an open and participative process. To begin the production of the report, there is an inter-government commission that was created to unite the Executive, Judicial and Legislative Organs, which are already holding monthly meetings, coordinated by the Transparency and Anticorruption Sub Secretariat (TAS). 3.2. Follow up to OAS’ Inter-American Convention Against Corruption Mechanism The expert’s commission was celebrated from September 12th to September 16th, 2011 its nineteenth meeting, in which the 3rd Analysis Round was successfully finalized, in these 27 countries were assessed, constructing a hemisphere report. Also, the decision to start a 4th round was made, in which the control organs destined to prevent, detect and sanction corruption acts will be fully analyzed. El Salvador voluntarily offered and was incorporated in the first group to be evaluated in 20125.80 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • Transparency on an International Level Law drafts are still a work in progress in the following matters: 1) Interest, incomes, assets, and debts from public officer´s positions declaration systems and 2) Reporting corruption acts and reporter and witness protection in relation to those acts. In September 2011, the OAS´General Secretariat, made the regulation proposal available to the member countries’ experts and from civil organizations registered in OAS, with the purpose of receiving comments, observations and suggestions to it6. 3.3 El Salvador subscribes to initiative from the Open Governments Society In the year 2010, a group of States agreed to form an alliance to design a series of directions towards an open government and “open data”7 . El Salvador was invited to participate in this initiative by complying with the minimum requirements of opening, placing itself within the 80 countries selected to participate. El Salvador scored 12 of 16 possible points, being its strengths the access to public information for having a law on the matter and citizen participation evaluated by the Democracy Index from The Economist Intelligence Unit its indicator of “Civil Liberties”. This report shows as weaknesses the lack of publication of audit reports and the confidentiality of patrimonial declaration from Public Officials and politicians8. On September 20th, 2011, the head of the Strategic Affairs Secretary, Hato Hasbún, representing President Mauricio Funes, subscribed the initiative, launched officially in New York, by the President of the United States of America, Barack Obama, and by the President of Brazil, Dilma Rouseff, in the event of the United Nations General Assembly from 20119. LEGAL AND INSTITUTIONAL SITUATION REPORT 81
    • 4. Advances in Access to Public Information Even when the APIL10 is valid since May 2011, it contains dispositions that begin to operate gradually. By the end of this semester, there have been four periods overdue: the issuance of a Commissioner Regulation, a General Law Regulation, Information Officers appointment and Commissioners appointment. The most crucial issue is due next semester, because the obligations for public and private institutions that handle public resources of receiving and processing information requirements, general interest information publication, and asset organization according to the law will come to force. The Access to Public Information Law Regulation (APILR)11, was published in the Official Gazette on September 2nd, 2011, and thus, the period established by law of no more than 120 days after law’s validity (Art. 109 APIL) was formally complied with. Nevertheless, it was until September 7th, 2011, that the Executive Body disclosed that the regulation elaboration process was finished, through a headline that appeared in a national circulation newspaper12. Despite the fact that the APIL Promotion Group and other civil society organizations requested it from the Executive Organ, the regulation elaboration process did not take into account civil participation and when the legal period was due, the regulation had not been disclosed to the population13. The APILR is a very complete legal body that fuses the content from both regulations the law referred to, which is technically valid. Even when the text is mostly clear, the regulation has certain provision that may difficult the law’s implementation, its principal weaknesses are: a. It doesn’t regulate some aspects that the law establishes, such as the regulation of assemblies by electing sectors, for the election of a commissioner, and the mandatory instructive to be elaborated to that effect. b. Through Art. 73 APILR, The President has self attributed competences that the law does not invest upon in the Access to Public Information commissioner’s election process, adding him the faculty to reject “under his criteria” the proposed candidates, which contradicts the legal provision and affects the rights of the proposing entities. In accordance with Art. 53 APIL, the President must choose the commissioner from the list of three candidates issued by the habilitated sectors, which does not give him the power to discretionally reject the lists which according to him don’t have fit candidates. Also, the APILR does not establish a defined process to present a new list of candidates or limits the times that the President can use this mechanism and the objective criteria to do so. c. Establishes as exceptions to Access to Public Information “the economic commercial interest of the country” (Art. 29 n. 3), and the concept of “political security” (Art. 29 n. 2). Both exceptions are not contained in the APIL within the reasons for the information reservation. Political Security is defined in Art. 2 of APILR as: “Every action or activity, direct or indirectly, performed by Public Officials of High Rank, intending to protect public order, the government and82 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • Advances in Access to Public Information its institutions’ political organization and any kind of activity with the purpose to rule or direct the state or the development of the government policies, including the activities destined to protect any legitimacy, acknowledgment and government authority threats that might unchain political instability, corruption and inability to rule, amongst others”. Such an extensive concept can annul every request and information disclosure from the subjects obligated under APIL. There is a risk that the exception, -secrecy,- becomes the general rule. This regulation may contain some unconstitutionality aspects, for example, in the cases pointed in letters b and c, by exceeding the regulatory attribution established in Art. 168 section 14 from the Constitution14. According to the rulings from the Constitutional Chamber of El Salvador: “a regulation cannot substitute or compliment the law when this last one does not exist, even when the President may consider it necessary to regulate a certain subject”15. Also, according to the international standards on the matter, the exceptions to access to public information in a topic reserved exclusively to a law and not a regulation16. Even when civil society has requested from the Executive Organ the reform regulation on that particular set of articles, the entity has not shown disposition to do so, which is a bad sign for the law’s implementation. And at the same time, this regulation might actually set obstacles to this law’s application. In terms of the appointment of Information Officers, where the legal period was due November 4th, 2011, the process is yet to be completed. According to the Art. 48 APIL, Information Officers are to be appointed by the “Chairman of the entity to direct the Access to Public Information Unit”. The Officer constitutes a new role within Public Administration and is a key element for law enforcement. Art. 49 APIL states “the Information Officer will be the connection between the obligated institution and the information solicitant”. Furthermore, they will have to carry out all necessary actions in the entity or dependency to facilitate access to information. On December 7th, 2011, in the occasion of Transparency Week, the Government took oath to 73 Information Officers, appointed to guarantee compliance to APIL within the Executive Organ. These Public Officials will oversee a total of 85 offices in the Executive Body. It is worth mentioning that at the closing of this report, there are still several entities for which the appointment is still pending. The subject is also complicated in the case of municipalities, where there is a lot of ignorance over APIL and its regulation, and thus, the appointment of officers has not been yet materialized. Finally, there are numerous activities taking place regarding the promotion and preparation of APIL’s implementation, such as: the promotion and awareness for 303 public official through four dates of extensive socialization of the law contents, workshops in 40 dependencies reaching 1,482 officials, a virtual forum for discussion, debate and consultation with approximately 196 people from the inter-institutional network; the expansion of the standardization project of websites and Transparency Portal as well as the design of software to manage information requests, in process amongst others. LEGAL AND INSTITUTIONAL SITUATION REPORT 83
    • 5. Transparency, Probity and Accountability System’s Performance Ensure transparency, promote accountability probity in the public administration, prevent and reprehend corruption, are attributions invested upon complementary activities of various state institutions. As illustrated in Figure 1, the institutions involved contribute to the Transparency Promotion System in controlling, ensuring access to information and punishing conducts that affect the state’s transparency. A lot of institutions participate in various phases of the cycle, others just in a specific role, and its performance depends one on another. That is the reason why it is so important to promote inter-institutional coordination, in a way that a harmonious work is accomplished in the name of public interest. Figure 1. Transparency, Probity and Accountability Systemception Index, 2001- 2011. Auditing Special Expert R Transparency Financia Promotion Control Infrastr El Salvador Auditing Guatemala Costa Rica Special Total Nicaragua Honduras Access to Sanction Information Rulings Rulings 2008 2009 2010 2011 Source: Own Elaboration 5.1 Audit Court On June 2011, new magistrates assumed charge over the Audit Court. Two of the three magistrates that finished their period received compensation in retiring from their office that in total amounted to US$133,000.00; the third magistrate didn´t accept the compensation17. This brought up generalized critics and even the Parliament issued a recommendation to the Audit Court’s President to have him not authorize the expensemes attributed Affected Institution Currentthose funds. This evolved 100% the magistrates returning the bonus and requesting of Situation into the Audit Court´s President to90%determine whether or not the bonus was legitimate18. trary acts, Ministry of Health The former minister 80%awful negotiations and 14 people 70% aggravated between contractors 60% d. and ministry staff 50% have been accused. 40% 84 LEGAL AND INSTITUTIONAL SITUATION REPORT 30%
    • Transparency, Probity and Accountability System’s Performance Nevertheless, by September 2011, the Audit Court didn´t have the funds available, because the matter hadn’t been solved. The argument portrayed by the former officials and even the legal team from the Audit Court was that the bonus is legal, based in the Internal Regulation for the Audit Court’s staff19, but in public opinion, the discussion has been centered around the practice from public officials of second rank to receive compensations for a “voluntary retirement”, when the position is supposed to have a determined duration. The following table lists the actions that the Audit Court informed in their labor memories from 2010, which in comparison with the data from previous periods show regularity in the level of work from the Audit Court. It is worth noticing that the Audit Court has not reported the observed amounts consistently, this data is only from 2008 and 2010. Also, it can be observed that the amount has decreased considerably, in approximately $13 million, a situation not explained in their report. Table 1. Control and Jurisdictional Actions from the Audit Court 2006- 2011. 2010 2009 2008 2007 2006 Control Actions Auditing 329 278 246 260 309 Special Exams 688 772 852 716 494 Expert Reports 117 75 59 95 56 Financial Statement Rulings 180 112 94 104 119 Infrastructure Projects Evaluations 936 1,054 1,152 1,143 - Observed Amounts Auditing $10,657,519.64 - $24,754,514.1 - - 2 Special Exams $8,331,929.31 - $6,539,025.79 - - Total $18,989,448.95 - $31,293,539.9 - - 1 Jurisdictional Actions Rulings in first instance 394 368 246 535 487 Rulings in second instance 69 63 51 33 74 Source: Own Elaboration based on the labor memoirs from the Audit Court of years 2006 – 2010 Sector Calling Entity Business Associations Ministry of Economy (MINEC) Professional Associations Ministry of Governance (MIGOV) Universities Ministry of Education (MINED) Press Associations Communication Secretary f Presidency (COSEP) Unions Ministry of Labor and Social Previ (MWSP) LEGAL AND INSTITUTIONAL SITUATION REPORT 85
    • Transparency, Probity and Accountability System’s Performance Auditing the Audit Court Even though one of the proposals from the new head of the Audit Court was precisely the disposition to begin an auditing process within his own institution, this process has been delayed over time. On November 25th, 2011 the public purchase for the auditing services on the entity was declared deserted. According to some declarations made by Parliament representatives, the motive behind this desertion declaration is that the companies participating have requested a higher payment than the one budgeted for that activity. Parliament has destined US $200,000.00. According to the Parliament’s President, in the first calling, there were 8 auditing companies participating20. On December 20th, Parliament´s President informed about the election of the firm in charge of performing the above mentioned auditing. The cost of this Audit will be of US $ 300,000.00 and it was assigned through direct hiring in favor of the firm Figueroa Jiménez y Cía., considering the two desertion declarations in the public purchase process21. However, it must be noted that audit period will be only for the year 2010, which modified the contract conditions22. 5.2. General Prosecution Office The Constitution invests the General Prosecution Office, the power to defend the state and society’s interests as well as the defense of legality. In this sense, the fight against corruption is an important attribution, mostly because this is the institution that must investigate and pursue these before tribunals cases. In their Labor Memories for 2010-2011, the General Prosecution Office, reported to have filed 6 cases of corruption in the period; however, amongst them it mentions the recovery of assets in the case of the fraud from the National Administration of Water ducts and Sewers, a case dated from 2007. The following table shows a summary of the mentioned cases.86 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • Transparency, Probity and Accountability System’s Performance Table 2. Corruption cases filed by the General Prosecution Case Crimes attributed Affected Institution Current Situation Public Purchase and Arbitrary acts, Ministry of Health The former minister irregular execution of unlawful negotiations and 14 people reconstruction and aggravated between contractors projects for seven fraud. and ministry staff hospitals from the have been accused. National Health Network (RHESSA Project). Adjudication of lots Arbitrary acts and Salvadorean Institute The case is in to SIAT employees, non-compliance to of Agrarian investigation phase in violating the duties. Transformation, SIAT. the Investigation established by law. Seventh Court House Also, the observations from San Salvador made by the Audit Court intending to solve the unlawfulness. Self-granting of public Arbitrary Acts. General Terrestrial Currently the case is transportation lines Transportation in the 3rd Penal in violation to Direction from the Chamber from the Legislative Decrees Vice Ministry of first center section 186 and 524, from Transportation the former Director and Technical Unit Manager. Source: Own elaboration with data from Labor Memoirs from the General Prosecution from years 2010-2011. However, the General Prosecution Office does not reveal with detail the amount of claims received, ongoing investigations, judicial processes and rulings obtained in cases related to corruption. When consulted General Prosecution Office, their response was that the information was confidential. 5.3. Probity Section from the SCJ The SCJ decided that the presentation of patrimonial declaration to the Probity Section was mandatory for magistrates, judges, secretaries and high officials from all the courts in the country23. According to the data published by the national press, from a total of 10,000 former public officials from the previous administration that had to submit the declaration, only 1,301 had done so. Until July 2010, 3,300 officials from the current administration hadn’t complied with this obligation either24. We had Access to the Report of the possession taking and cease of functions declarations for the period from January 1st, 2001 to December 15th, 2011, through the Information Officer from the Supreme Court of Justice. The following charts show the level of compliance of public officials in presenting their patrimonial LEGAL AND INSTITUTIONAL SITUATION REPORT 87
    • Transparency, Probity and Accountability System’s Performance- 2011. 2010 Control A Auditing 329 Special Exams 688 declarations, both in the beginning and in the end of their functions. There is a higher Expert Reports 117 Transparency Promotion declarations of possession taking (78%) in comparison to the ones from cease level of Control Financial Statement Rulings 180 Infrastructure Projects Evaluations 936 El Salvador of functions (70%), which means that the mechanisms to coerce former officials to Observed A Guatemala fulfill this obligation must be revised. Auditing $10,657,519.64 Costa Rica Special Exams $8,331,929.31 Total $18,989,448.95 Nicaragua An alarming non compliance to document from the presentation is observed Honduras Member of the Central American Parliament, where less than 20% have presented Access to Jurisdictiona Sanction declarations when assuming a position, and less than 10% when instance functions. Information Rulings in first ceasing Rulings in second instance 394 69 The independent institutions are the second largest group to breach the obligation of presenting declaration, amongst which we can mention the National Institute of Magistrate Wellness, the National Police and the Farming Promotion Bank. The results from the Presidency include the Secretary of Culture, the Social Inclusion Secretary and FOMILENIO. Sector Business Associations Regarding declarations from cease of functions, the institutions highlighted areAssociations Professional the General Prosecution Office and the Human Rights Prosecution, whoUniversities have presented Press Associations only 20% and 33% respectively. This statistics are worrying facing the lack of compliance from public servants towards the obligations established by law, which Unions affects Rule of Law. Graphic 2. Possession taking and cease of function declarations presentedected Institution Current Situation 100% 90%nistry of Health The former minister 80% and 14 people 70% between contractors 60% and ministry staff 50% have been accused. 40% 30% 20% 10%vadorean Institute The case is in 0% PARLACEN Independent EntitiesAgrarian investigation phase in Presidency Human Rights Prosecution General Prosecution Hospitals Ministries Audit Court Parliament Public Prosecution Supreme Electoral Tribunal Nacional Judge Council Judicial Organnsformation, SIAT. the Investigation Seventh Court House from San Salvador % posession taking declarationsneral Terrestrial Currently the case is %nsportation in the 3rd Penal Source: Compiled from information from the Report of the Declarations Takeover and Terminationection from the Chamber from the Functionse Ministry of first center sectionnsportation * Results of the Presidency consolidates data indicates that the Report to the Ministry of Culture, the Ministry of Social Inclusion, Fomilenio and the Presidency. Calling Entity Public Probity Law MWSP MINED MINEC The situation in the Probity Section has been revisited in a study that served as a basis in the elaboration of the draft for the Inter-AmericanMIGOV on patrimonial Law COSEP declarations. 88 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • Transparency, Probity and Accountability System’s Performance This report comments that in El Salvador “nowadays there are no precedents of a judging against a public official or public employee for ilegal enrichment, which is the reason why these constitutional and legal provisions have been harshly criticized because of their inefficiency”25. There has been knowledge through the Legislative Observatory, that on December 12th 2011, the Legislation and Constitutional Matters Commission from Parliament began studying the Draft for the Public Probity Law proposed by the Magistrates from the Supreme Court of Justice, which is intended to substitute the Unlawful Enrichment for Public Officials and Public Employees Law from 1959. Even though that day, the discussion didn’t get into the matter, the Parliament representatives agreed that the first sessions of work from 2012 will be dedicated to this subject, so that by the end of January or February, 2012 at the latest, this law can be taken to Parliamentary Session for their consideration and final approval26. We consider important to have an updated regulation on this issue. 5.4. Parliament Parliament has the attribution to demand account renditions to other public entities, especially through the reception of labor reports, according to Art. 168 of the Constitution and Art. 103 of the Internal Parliament Regulation. During the Session n. 106 from July 21st, 2011 the presentation of the Labor reports from the Public Administration (13 ministries) and Public Ministry to Parliament, from the period 2010-2011 took place27. Each official gave a presentation of about 15 minutes, highlighting the most important aspects in their administration; without any announcements of new relevant proposals in their agendas for 2011- 201228. Full Parliament received sixteen reports that were sent to the Legislative Commissions. Also, Parliament received reports from Independent Institutions such as the Securities Superintendence and the Government Ethics Tribunal, among others. There have been 9 reports approved in the period 2010-2011: • Labor Report from the Ministry of Tourism. • Labor Report from the Securities Superintendence. • Labor Report from the Government Ethics Tribunal. • Labor Report from Public Defense Office. • Labor Report from the Labor and Social Prevision Ministry. • Labor Report from the Ministry of Environment and Natural Resources. • Labor Report from the Ministry of Governance. • Labor Report from the Ministry of Justice and Public Safety. • Labor Report from de Human Rights Prosecution. • Labor Report from Ministry of National Defense. Parliament also has special investigation faculties to ensure transparency. In this semester, Full Parliament approved the First Report of the Special Commission to investigate the problematic of lead intoxication in Sitio del Niño. LEGAL AND INSTITUTIONAL SITUATION REPORT 89
    • Transparency, Probity and Accountability System’s Performance 5.5 Transparency and Anti-corruption Subsecretariat The Transparency and Anti-corruption Subsecretariat, TAS, has as a function the promotion of transparency practices within the Executive Body. It has had an important role in the law’s implementation. The TAS has been involved in the organization of the Access to Public Information Institute’s Commissioners appointment process, mainly because APILR mandates them to help all entities that call the elections of Commissioners for the Access to Public Information Institute. 2010 2009 2008 2007 2006 Control Actions Auditing 5.6. Access to Public Information Institute 329 278 246 260 309 Special Exams 688 772 852 716 494 Expert Reports 117 75 59 95 56 Financial Statement Rulings Process: Election 180 112 94 104 119 Infrastructure Projects Evaluations 936 1,054 1,152 1,143 - Observed Amounts Auditing APIL establishes in Art. 53, that the five $24,754,514.1 $10,657,519.64 - commissioners and their substitutes will be - - 2 Special Exams elected from a list $8,331,929.31 candidates proposed by five -sectors from civil society. of three - $6,539,025.79 - Total These lists will be$18,989,448.95 by general assemblies from each sector, -which will be selected - $31,293,539.9 - 1 organized by a calling entity. The following table shows a summary of the sectors and Jurisdictional Actionsn Rulings in first instance calling entities: their 394 368 246 535 487 Rulings in second instance 69 63 51 33 74 Table 3. Sector habilitated to appoint member from the Access to Public Information Institute and their calling entities. Sector Calling Entity Business Associations Ministry of Economy (MINEC) Professional Associations Ministry of Governance (MIGOV) Universities Ministry of Education (MINED) Press Associations Communication Secretary from Presidency (COSEP) Unions Ministry of Labor and Social Prevision (MWSP) Source: Own Elaboration. On the Access to Public Information Institute Commissioner’s election, there is still a lot of uncertainty. The TAS has carried out efforts such as the publishing of documents intended to facilitate and explain in a simple way the election process, it has called meetings to check the progress made with organized civil society; however, the uncertainty and lack of defined rules persisted on the matter. The APILR determined that each calling entity must issue an instructive to regulate the organization of assemblies by electing sector. The problem with this is that the law established September 5th, 2011 as the deadline for the issuing of this regulation, but also installed that date as the beginning of the Commissioner’s election process,Human Rights Prosecution General Prosecution Hospitals Ministries Audit Court Parliament Public Prosecution Supreme Electoral Tribunal Nacional Judge Council Judicial Organ without leaving sectors time to know the rules. This all meant a setback in the election process. % posession taking declarations % 90 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • (MWSP) Transparency, Probity and Accountability System’s Performance On November 22nd, 2011, the APIL Promotion Group issued a Press Release in which the importance of the Access to Public Information Law and the Commissioner’s election process were noted; also, it served as a wakeup call to all entities subjected to APIL, including municipalities, to appoint their Information Officer as brieflyIndependent Entities Presidency Human Rights Prosecution General Prosecution Hospitals Ministries Audit Court Parliament Public Prosecution Supreme Electoral Tribunal as possible; to present from the corresponding organizations before their calling Nacional Judge Council Judicial Organ entities the list of candidates and that these reunite all qualifications needed and the honorability to fulfill their position independently from any pressure; and so that in the 2012’s Budget being discussed in Parliament, a provision for the right functioning of the Access to Public Information Institute is included29. % posession taking declarations Despite these efforts, interest in the elections has been poor. At the end of the closing % date to subscribe candidates, November 25th, 2011, none of the calling entities had gathered the legal minimum of the six necessary candidates: Table 4. Registered candidate result for the IAIP until November 25 th, 2011 Calling Entity Registered Candidates MWSP 2 MINED 5 MINEC 5 MIGOV 5 COSEP 0 Source: TAS. On December 8th, 2011, the TAS issued a press release stating the impossibility to carry out the general assemblies for the election from candidate lists for the API Institute, due to the fact that the calling entities did not count with the total of candidates required by the APIL. They also informed the new date for the assemblies, delayed until January 28th, 2012, being that the last date to subscribe candidates is Monday January 23rd from the same month and year30. A worrying factor was the fact that the draft for 2012´s Budget presented by the Treasury Department to Parliament, didn´t contain a provision for the Institute, even when APIL, in its Art. 108, states “The General Budget of the nation will establish the corresponding budgetary provision for the installment, integration and operation of the Institute”. The APIL Promotion Group sent on November 15th, 2011 a letter directed to Parliament´s Treasury and Special Budget Commision, with the purpose of requiring an explanation regarding the provision. At this report´s closing date, no answer was received. LEGAL AND INSTITUTIONAL SITUATION REPORT 91
    • Transparency, Probity and Accountability System’s Performance 5.7. Government Ethics Tribunal Election process: The Government Ethics Tribunal (GET) celebrated its five years of existence in 2011, which meant the first five members ended their period during that year, and their successors must now be appointed. Parliament has the attribution to appoint the President of the Tribunal. To that effect Parliament made an official calling on August 11th so that those interested in the position presented their applications; till August 31st, 14 applications were received. In September, the Political Commission created a Sub-Commission to carry out the Tribunal’s President and its substitute election process. The Commission requested reports on the background of the applicants, so that all the law requirements to fill the position were verified; particularly, not being sanctioned for corruption acts or for infractions to the government ethics31. Until September 30th, 2011, date in which the new GET was supposed to be appointed, there had been no elections. At the end of this report, Parliament is still pending on its appointment, which is still in debate in this state organ. Thus, since October 31st, 2011, the GET Presidency has not been elected. The delay on the referred appointments and the lack of a chairman of the institution is reflected in a series of affectations to the Rule of Law. The accumulation of cases and the expiration of legal terms within initiated sanctioning processes are still happening and causing a paralysis of activities that compromises the country’s institutionalism32. New Government Ethics Law The Government Ethics Law (GEL) presented since its creation, some application problems in its implementation. For this reason, FUSADES has pointed out in the Legal and Institutional Situation reports some aspects that need to be improved in that said law, such as: the integration of the GET that guarantees independence in its officials; and the investment of legal tools to strengthen their functioning, among others. Also FUSADES published an Institutional Position regarding the advances and challenges with the new GEL33. The GET presented before Parliament a project of reforms to the law in November, 2009; this was studied by the Legislative and Constitutional Matters Commission, who determined that a new GEL must be issued. In the Assembly from October 13th, 2011, such regulation was approved with 76 signatures from all the legislative fractions, for then receiving observations from the President on October 31st, 2011. These observations were partially accepted by the Full Parliament34. The new GEL will come into force on January 1st, 2012.92 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • Transparency, Probity and Accountability System’s Performance The following are some commentaries and main changes of the GEL: • Application Field Delimitation: Some subjects of competence are eliminated from other entities, i.e.: “protecting the state’s patrimony” is suppressed, which is an attribution of the Audit Court. Also some subjects like former officials and people who manage public assets are included. • Clarity in Ethic principles, duties and obligations: Some vague dispositions are eliminated and some prohibitions are included for former officials in the year after cease of functions; bonuses and other incentives are regulated. • Institutional Reforms: New roles within the GET: the full tribunal, the general secretary and the instructor. Some new independence regulations are incorporated, such as: independent patrimony and independent budget. • Reforms to the Government Ethics Commissions (GEC): All states entities must count with a GEC, even municipalities. • Reforms to the Sanctioning Process: The GET may initiate processes on its own. The “notice” process, wich allows the anonymous claims to be presented is regulated. Claims will be able to be presented both verbally and in writing. The Instructor role is created to promote investigation. • Sanctions: A sole fine sanction is established between US$224.21 and US$8,968.40 that will be applied proportionally according to gravity of the infraction. The system based on incidences and established that even for grave infractions, for being the first offense, the GET could only sanction with a written notice, is eliminated. The sanction of firing without state’s liability is eliminated. A public record of sanctioned public officials is created. LEGAL AND INSTITUTIONAL SITUATION REPORT 93
    • 6. Freedom of Speech On September 24th, 2010, the Constitutional Chamber declared as unconstitutional the 3rd section of Art. 191 from the Criminal Code for considering that this part of the disposition established a difference in treatment that produced an unreasonable lack of protection to the rights to honor, personal and familiar intimacy and to self image, which generated a violation to the constitutional right of equality. This ruling promoted the revision of the freedom of speech regulation, including a renewed interest to legislate the right to response, guaranteed in section 5, Art. 6 of the Constitution. On September 8th, 2011, Parliament approved a series of reforms to title 5, book II from the Penal Code, which regulated crimes against honor. The President observed this first version of Decree 836. In the session from November 9th, Parliament approved the definitive version. As the most relevant aspect of this reform, it is necessary to mention that prison for “opinion” crimes was eliminated by substituting the prison sanction in cases like perjury, defamation and calumny for fine/days sanctions. Legislative Decree 836 was approved by the President and is valid since December 15th, 2011. To complete this, on September 2011, Parliament created an Ad hoc Commission to work in draft for a law that regulates the right to response. FMLN presented a project at the end of August, and a group of representatives from ARENA-PDC-PCN-CD presented an alternative project at the end of November. At the end of this report, the Ad hoc Commission was reviewing both projects.94 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • 7. CONCLUSIONS• The approval of the APILR regulates the commissioner elections and general law aspects; however, it contains dispositions contrary to the Constitution through exceeding regulatory power.• The Government Ethics Tribunal has been without a President since November 1st, 2011, due to the lack of appointment of its President and 3 of its members on account of Parliament, the President, the Audit Court and the Public Ministry. The SCJ is the only entity to have appointed their member in time.• The creation of the new Government Ethics Law constitutes a big advance in transparency, probity and accountability system, because it regulates the self- initiated investigation process and significant monetary sanctions.• Also, even with the delays occurred in the implementation of the APIL, there is a noted interest in following up the matter shown by the Transparency and Anti- corruption Subsecretariat and civil society in general. It is also promising the fact that the firm to audit the Audit Court has been finally hired.• In the matter of freedom of speech, it can be concluded that in this semester, there have been significant advances. On one hand, the prison punishments were eliminated for cases of perjury, calumny and defamation, thus strengthening the free diffusion of information in the country; and on the other hand, we have taken steps to a complete regulation on the subject, in working towards the approval of a law to regulate the right to response. LEGAL AND INSTITUTIONAL SITUATION REPORT 95
    • FINAL CONSIDERATIONS 1. The compliance to the SCJ’s rulings and the derogation of Decree 743 have been important to the check and balances system. Precedents and Legislation have contributed to broaden the right to suffrage; however, there are still some voids and a more complete reform of the electoral system and political parties still pending. 2. Some actions affecting the legality culture have been observed, such as: a SET’s ruling with a quorum different from the one legally established for the political parties cancelation process; anticipated electoral campaign; tax secrecy violation in disclosing contributors reserved information; and delay in the GET´s members election. 3. Homicides continue increasing, which affects quality of life, trust in institutions, competitiveness and opportunity generation of the country. The overcrowding in temporary jails as well as in penitentiaries is still an imperative problem. 4. The problems appointed by institutions related to public safety still persist and have not been resolved; such as the lack of inter-institutional coordination and depuration that must be permanent in all of them. The authority change in public safety and the modifications announced have generated positive expectations in citizens, and if they are implemented effectively, they may contribute to lower crime. 5. The Constitutional Chamber’s ruling confirms the constitutionality of the reforms to the Conciliation, Mediation and Arbitration Law, constitutes a setback by bringing judges into arbitration, affecting its characteristic of being an alternate conflict solution mechanism, which negatively influences among other aspects, the business climate. 6. Business climate indicators are still stagnant, and there are even some setbacks, as a result of the crime and lack of legality culture. The Partnership for Growth and Puerto La Unión Concession Law are opportunities to improve the country’s competitiveness and promotion of social and economic development. 7. The Access to Public Information Law Regulation contains dispositions that annul the effectiveness of a good law because it includes an excessive regulatory faculty, which is contrary to the Constitution. There has been uncertainty in the conformation process of the Access to Public Information Institute due to the delay and lack of clear rules in the election of its commissioners, and also the unknown budget provision. The issuance of a new Government Ethics Law has been a positive aspect, because it grants more investigation and sanctioning faculties to the Government Ethics Tribunal. 8. Freedom of speech is strengthened through the elimination of prison for crimes against honor, and also due to the legislative discussion over the right to response.96 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • endnotes RULE OF LAW AND INSTITUTIONALITY1 FUSADES. (2001). Three fundamental legal concepts. Legal Studies Bulletin N° 16. Consulted October 28th, 2011 at: http:// www.fusades.org/get.php?id=495&anchor=12 FUSADES. (2005). Democratic institutions in El Salvador: Performance Assesment and Streghtening Plan I and FUSADES. (2008). Democratic institutions in El Salvador: Performance Assesment and Streghtening Plan I. El Salvador.3 Latin-barometer Corporation is a nongovernmental organization based in Chile, which conducts a survey of perception in countries in Latin America.4 FUSADES. (2010). Democratic institutions in El Salvador II: Performance Assesment and Streghtening Plan. P. 20.5 Observations from the President to Legislative Decree 648 haven’t been overruled or accepted formally, but the topic they were intended for was resolved. What the President suggested in observations was included inmediately in Decree 698, published in the Official Gazette N° 85, Edition 391 from May 6th, 2011.6 Legislative Decree n° 871 from October 6th, 2011. Published in Official Gazette n° 199, Edition 393, from October 25th, 2011.7 Legislative Decree n° 871 from October 6th, 2011. Published in Official Gazette n° 199, Edition 393, from October 25th, 2011.8 Cabrera A. (October 22nd, 2011). Funes approves period to appoint Deputy Prosecutor. La Prensa Gráfica.Consulted October 28th, 2011 at: http://www.laprensagrafica.com/el-salvador/judicial/225668-funes-avala-plazos-para-nombrar-fiscal-adjunto. html9 Legislative Decree n° 871 from October 6th, 2011. Published in Official Gazette n° 199, Edition 393, from October 25th, 2011.10 Fusades. Institutional Position. (April 2008). Electoral Propaganda Period Regulation. Available at: www.fusades.org/get. php?id=475&anchor=111 The network is composed: American Institute of Constitutional Law, Jose Matias Delgado University, FUSADES, National Foundation for Development, National Association of Private Enterprise, ADESA, CREO, Evangelical University of El Salvador and the Technological University of El Salvador.12 Document available at: http://www.observatoriojudicial.org.sv/attachments/article/5673/fusa_selecc.pdf13 Reforms available at: http://www.observatoriojudicial.org.sv/attachments/article/5686/REFORMAS_ELECCION_ MAGISTRADOS_CSJ.pdf14 Morán, Otto. (October 27th, 2011). More protagonism for NJC asked by lawyer association. Diario La Página. Consulted December 20th, 2011 at: http://www.lapagina.com.sv/nacionales/57633/2011/10/26/Mas-protagonismo-para-el-Consejo-Nacional-de-la- Judicatura-pide-gremio-de-abogados15 FUSADES. (2011). Legal and Institutional Situation Report of the first semester of 2011. P. 38-40 LEGAL AND INSTITUTIONAL SITUATION REPORT 97
    • endnotes 16 The cases do not represent all the work performed by a chamber. In the Constitutional Chamber, are considered the unconstitutionality process, hábeas corpus and appeals; in the Civil Chamber, appeals in all instances in all its subjects; in the Administrative Contentious Chamber, all Administrative Contentious process and in the Criminal Chamber, all the appeals. 17 The ones refered are only those ended by definitive ruling and not the ones ended with alternative ways as non-procedence or oversights. 18 Constitutional Chamber from the Supreme Court of Justice. Ruling from November 7th, 2011. Unconstitutionality Process 57- 2011. 19 Constitutional Chamber from the Supreme Court of Justice. Ruling from July 29th, 2010. Unconstitutionality Process 61-2009. 20 Supreme Court of Justice. Full Court Minutes. Available at: http://www.csj.gob.sv/CORTE_PLENA/CP_041209.html 21 A matter can be in the agenda more than once if it is not resolved in the first session. This is counted again for being a matter in a new agenda. 22 La Prensa Gráfica. (September 21st, 2011). Magistrates have disscused 19 cases in 20 months. Consulted October 28th, 2011 at: http://www.laprensagrafica.com/el-salvador/judicial/219044-magistrados-han-discutido-19-casos-en-20-meses.html 23 Magaña, Y. (February 11th, 2011). Appeal against decree to stop candidates. El Mundo. Recovered February 12th, 2011, from: http://www.elmundo.com.sv/politica/7027-recurso-contra-reforma-que-frena-candidaturas.html 24 December 14th, 2011. Email consultation to Magistrate from the Constitutional Chamber, Rodolfo González. 25 Magaña, Y. (February 11th, 2011). Appeal against decree to stop candidates. El Mundo. Recovered February 12th, 2011, from: http://www.elmundo.com.sv/politica/7027-recurso-contra-reforma-que-frena-candidaturas.html 26 There haven’t really bee any reforms to adequate “Dispositions for the nomination of non partidary candidates in legislative elections” to unconstitutionality 10-2011; however, this does not generate inmediate problems, because both dispositions declared uncosntitutional-the prohibition for independent candidates reelections and time for signature collection- don’t apply for 2012’s election. For future elections the period for the collection of signatures should be regulated, but the reelection is already permitted in the Constitution. 27 FUSADES. (December 2011). New rules on the electoral process. Political Memorandum Nº 16. Consulted on January 10th. 2011 at: http://www.fusades.org./?art=2213&lang=es&title=Memor%E1ndum%20Pol%EDtico%20N%B0%2016; 28 Legislative Decree Nº 842, from September 22nd, 2011, published in the Official Gazette Nº 194, Edition Nº 393, from October 18th, 2011. 29 The Political Studies Departments makes these calculations in a very clear way. In summary, they say that San Vicente has the 2.74% of the national population, and Cabañas has the 2.63%. Meaning, that the first one would get 2.74% of the 84 members and the second 2.63% of them. By doing the operation, each gets two members. For more information: FUSADES. (September 2011). Civic Education Campaign is urgent. Political Memorandum Nº 12 page 6. Consulted on December 10th, 2011 at: http:// www.fusades.org/?Part=2260&lang=es&tile=Memor%E1ndum%20Pol%EDtico 30 Non-procedence ruling from November 23rd, 2011 in appeal process 509-2009. Available at: http://www.csj.gob.sv/ Comunicaciones/Boletin_informativo/2011/Noviembre_2011/Improcedencia%20509-2011.pdf98 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • endnotes LEGAL AND CITIZEN SECURITY1 UNPD. (2005). ¿How much does violence cost in El Salvador? Notebooks on human development. San Salvador: UNPD, page 1.2 El Salvador’s Constitution. Art. 135.3 Constitutional Chamber from the Supreme Court of Justice. Ruling from August 21st, 2009.Unconstitutionality Process 24-on 2003.4 Supreme Court of Justice. (November 30th, 2011). Ruling on unconstitutionality process 10-2011.5 Legislative Observatory. Mail piece approved available at: http://www.observatoriolegislativo.org.sv/attachments/article/1613/7a. pdf6 Art. 71.- Verdict in the same Full Parliament session. When the case’s urgency makes it neccesary and Parliament decides so, the respective commission will elaborate the corresponding resolution, during the session or recess, to be presented in that same session.7 Membreño, Tania y Pérez Ernesto. (December 2nd, 2011). Homicides in 2011 surpass the homicides committed last year. La Prensa Gráfica. Consulted December 19th, 2011 at: http://www.laprensagrafica.com/el-salvador/judicial/234538--homicidios- de-2011-superan-a-los-cometidos-el-ano-pasado.html8 Sánchez, Hugo y de Dios, Fernando. (October 23rd, 2011). Permanent Conflict of Interests. Contrapunto. Consulted December 15th, 2011 at: http://www.contrapunto.com.sv/politica-entrevistas/permanentemente-tenemos-una-lucha-de-intereses9 Ídem.10 Portillo, R. (September16th, 2011). Bank’s security guard kills a policeman. La Prensa Gráfica. Recovered October 14th, 2011, from: http://www.laprensagrafica.com/el-salvador/judicial/218096-vigilante-de-un-banco-mata-a-policia.html González, L. y Marroquín, M. (September 24th, de 2011). Santa Tecla: Security Guard kills workmate in a confusing event. La Prensa Gráfica. Recovered October 14th, 2011, from,:http://www.laprensagrafica.com/lo-del-dia-edi/219736-santa-tecla- vigilante-asesina-a-companero-en-hecho-confuso.html Redacción Diario La Página. (January 4th, 2011). Security guard sent to jail for killing a client inside the restaurant “Típicos Margoth”. La Página. Recovered October 14th, 2011, from: http://www.lapagina.com.sv/nacionales/45135/2011/01/04/A- prision-vigilante-que-mato-a-cliente-dentro-de-restaurante-Tipicos-Margoth11 Graduate Institute of International and Development Studies in Geneva. (2011). Small arms Survey 2011. Chapter 4. Pág. 104. Consulted on November17th, 2011 at: http://www.smallarmssurvey.org/fileadmin/docs/A-Yearbook/2011/en/Small-Arms- Survey-2011-Chapter-04-EN.pdf12 UNPD. (July 12th, 2011). The good experiences continue with the weapon band. Consulted on November17th, 2011 at: http:// www.pnud.org.sv/2007/sc/content/view/68/13 El Diario de Hoy. (Augst 14th, 2011). National Police also installs “ElectronicEyes”. Consulted November17th, 2011 at: http:// www.elsalvador.com/mwedh/nota/nota_completa.asp?idCat=6342&idArt=609075714 Official Gazette n° 80, Edition 391 from April 30th, 2011. LEGAL AND INSTITUTIONAL SITUATION REPORT 99
    • endnotes 15 Government of El Salvador (November, 2011).Partnership for Growth El Salvador-United States: Conjoint Action Plan 2011- 2015. Page 5. 16 La Prensa Gráfica. (November 14th, 2011) Central America requires 3,000 millions for security plans. Consulted November 28th, 2011 at: http://www.laprensagrafica.com/internacionales/centroamerica/230745-ca-requiere-3000-millones-para-planes- de-seguridad.html 17 García, Enrique. (December 13th, 2011). Changes in Anti-Gang plans. Diario El Mundo. Page 9. 18 Redaction. (December 13th, 2011). Reform to laws on fight against crime. Diario El Mundo. Page 4. 19 Fores, Ricardo. (December 20th, 2011). Legal changes to combat gangs. La Prensa Gráfica. Page. 2. 20 Contrapunto. Munguía promises to reduce crime by 30%. November 29th, 2011. Consulted December 21st, 2011, at: http:// www.contrapunto.com.sv/politica-nacionales/munguia-promete-bajar-crimen-en-30 21 Barberá, B. (September 19th,2011). National Police may access personal records. El Diario de Hoy. Consulted November16th, 2011 at: http://www.elsalvador.com/mwedh/nota/nota_completa.asp?idCat=47871&idArt=6208365 22 Legislative Observatory. (September 20th, 2011). Bulletin 161. Recovered October 14th, 2011from Legislative Observatory: http://www.observatoriolegislativo.org.sv/attachments/article/1573/BOL_OL_161.pdf 23 General Prosecution. (December 21st, 2011). General Prosecutor and Directors present balances from 2011. Press Release available at: http://www.observatoriojudicial.org.sv/index.php?option=com_content&view=article&id=5697:fiscal-general-y- directores-presentan-balance-de-2011&catid=9:noticias-revelantes&Itemid=10 19 24 El Diario de Hoy. (November 9th, 2011). There is more trust in the Army that in the National Police. Consulted November16th, 2011 at: http://www.elsalvador.com/mwedh/nota/nota_completa.asp?idCat=47673&idArt=6366511 25 Penitentiaries General Direction. (December 12th, 2011). Penitentiary Statistics. Consulted December 16th, 2011 at: http://www. dgcp.gob.sv/images/stories/Estadistica%20Penitenciaria/Estadistica_al_12_de_diciembre.pdf 26 Calculation based on the Penitentiaries General Direction’s data till December 12th, 2011, published at: http://www.dgcp.gob.sv/ images/stories/Estadistica%20Penitenciaria/Estadistica_al_12_de_diciembre.pdf 27 Personal Interview with Penitentiaries’ Sub. Director, Nelson Rauda. (December 8th, 2011). 28 Laxo, F. & Portillo, R. (October 30th, 2011). 3 inmates killed in Penitentiary of Ciudad Barrios. La Prensa Gráfica.Consulted November 17th, 2011 at: http://www.laprensagrafica.com/el-salvador/judicial/227454-matan-a-tres-reos-en-penal-ciudad- barrios.html 29 Bolaños, Mauricio y Henríquez, Estela. (November 29th, 2011). One dead and four injured in disturbance. La Prensa Gráfica. Consultado December16th, 2011 at: http://www.laprensagrafica.com/el-salvador/judicial/233863--un-fallecido-y-14-reos- heridos-en-disturbio.html 30 Ídem. 31 Alas, Liseth. (November 21st, 2011). Five inmates dead during weekend. El Diario de Hoy. Consulted December 16th, 2011 at: http://www.elsalvador.com/mwedh/nota/nota_completa.asp?idCat=47859&idArt=6400986 y Rodríguez, Carmen. (December 17th, 2011).Inmates killed in Chalatenango Penitentiary. Diario la Página. Consulted December 21st, 2011at: http://www.lapagina. com.sv/nacionales/59904/2011/12/16/Encuentran-tres-reos-muertos-en-penal-de-Chalatenango100 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • endnotes32 Personal Interview with Penitentiaries’ Sub. Director, Nelson Rauda. (December 8th, 2011).33 Marroquín, David. (January 1st, 2012). There were 4.354 homicides last year. Consulted on January 2nd, 2012 at: http://www. elsalvador.com/mwedh/nota/nota_completa.asp?idCat=47859&idArt=6517467 LEGAL AND INSTITUTIONAL SITUATION REPORT 101
    • endnotes BUSINESS CLIMATE AND BUSINESS LAW 1 World Bank (2011). Doing Business 2012: Doing Business in a More Transparent World. Washington D.C. p. 2 2 World Bank (2011). Doing Business 2012: Doing Business in a More Transparent World. Washington D.C. p. 93 3 World Economic Forum. (2011). Global Competitiveness Report 2011-2012. Switzerland p. 170 4 World Economic Forum. (2011). Global Competitiveness Report 2011-2012. Switzerland p. 170 5 University Public Opinion Institute (December 15th, 2011). Salvadoreans evaluate the country situation at the end of 2011 and express opinion about 2012 elections. Press bulletin year XXVI, N° 2. Universidad Centroamericana José Simeón Cañas. Consulted December 22nd, 2011 from: http://www.uca.edu.sv/publica/iudop/archivos/boletin2_2011.pdf, Standard and Poor’s confirms El Salvador’s ratings. New York. 6 United States Embassy in El Salvador (2011). Limitation Analysis. Consulted December 10th, 2011 from: http://spanish. sansalvador.usembassy.gov/pfg/analisis.html 7 El Salvador and the United States’ Government (November, 2011). Partnership for Growth El Salvador – United States: Conjoint Action Plan 2011-2015. Pages 4 and 19. 8 Ministry of Economy (September 30th, 2011). MINEC launches The Electronic Signature Draft Law. News. Consulted December 10th, 2011 from: http://www.minec.gob.sv/index.php?option=com_content&view=article&id=1654:anteproyecto&catid=1:n oticias-ciudadano&Itemid=77 Other proposals were: La Prensa Gráfica (September 2nd, 2011). New migration law reaches investors. Economy; El Diario de Hoy (September 12th, 2011). Government does not rush reforms for medium and small businesses. Business; La Prensa Gráfica (December 1st, 2011). Microbusiness law will include simplified regime. Economy. 9 Alfredo Chirino. Best Practices and international experience in the electronic signature law’s application: Aspects for a Regional Analysis. Regional Commerce Program DR-CAFTA. 10 World Bank (2011). Doing Business 2012 Country Profile: El Salvador. Washington D.C. p. 87 11 Supreme Court of Justice (2011). Statistic Bulletin from January to June 2011. Institutional Planning Direction – Statistics and Information Unit. More information: Villadiego, Carolina and others (2006). Comparative Study: Advance In The Civil Justice Reform for Latin America and the Caribbean. Chile. Consulted December 20th 2011 from: http://www.cejamericas.org/portal/ index.php/es/biblioteca/biblioteca-virtual/doc_details/3233-estudio-comparativo-avance-en-america-latina-y-el-caribe-de-la- reforma-a-la-justicia-civil 12 Supreme Court of Justice (September 23rd, 2011). SCJ and IWO representatives shared the floor of the National Judges Council to discuss the results on the study of the situation and the Labor Justice Administration. News. Consulted December 5th, 2011 at: http.//www.csj.gob.sv/communications/Septiembre/2011/noticias_septiembre_2011_10.html 13 Interview with the Commission’s Participants. 14 Supreme Court of Justice and the United States Agency for International Development (December 14th, 2011). Labor Courts Management System Inauguration (LCMS). USAID Program for the Strengthening of Justice Labor for DR-CAFTA. San Salvador. 15 Supreme Court of Justice (2011) Statistic Bulletin from January to June 2011. Institutional Planning Direction – Statistics and Information Unit.102 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • endnotes16 FUSADES (October 21st, 2011). Public Safety in Public Contract: a key element for the business climate. Institutional Position.17 Legal Studies Center (December 19th, 2011). Harsh blow to the Arbitral Institution. Editorial, La Prensa Gráfica. Also: Spanish Club of Arbitration (December 20th, 2011). The appeal resource in an Arbitration Process. San Salvador.18 Competition Superintendence. (2011) CS will file the concentration request from PUMA_ESSO/ CS will declare inadmissible the concentration between insurance companies/ More cases can be consulted at www.sc.gob.sv19 Competition Superintendence. (November 22th, 2011). CS presents first declarations from SCJ in favor of the competition, Press Release. Consulted December 10th, 2011 from: http://www.sc.gob.sv/pages.php?Id=1117 More information in: Administrative Contentious Chamber, definitive rulings 288-2007 from 02.11.2011 and 259-2007 from March 1st, 2011 and 464-2007 from September 17th, 2010.20 Constitutional Chamber. Supreme Court of Justice. Constitutional Protection 16-2009 Agreement from July 13th, 2011.21 Administrative Contentious Chamber, Supreme Court of Justice. Process 474-2007 form February 4th, 2011. For more information: Consumer’s Protection Office (July 29th, 2011). Administrative Contentious Chamber ratifies criteria from the Consumer´s Protection Office Sanctioning Tribunal. News. Consulted December 5th, 2011 from http://www.defensoria.gob.sv/ index.php?option=com_content&view=article&catid=1:not-con&id=883:sala-de-lo-contencioso-administrativo-avala-criterio- del-tribunal-sancionador-de-la-defensoria&Itemid=5722 Legislative Decree N° 592, January 14th, 2011, published in the Official Gazette N° 23, Edition N° 390, from February 2nd, 2011.23 Legislative Observatory (September 22nd, 2011). Approval of Financial System to promote Development Law.24 Economic and Social Council (March, 18th, 2011). Final Verdict to the Development Bank of El Salvador Organic Law. San Salvador. More information: El Diario de Hoy (October 5th, 2011). The Development Bank will begin operations in January. Cover.25 IMF. (September 30th, 2011). Stand By Agreement’s third revision. Country Report N° 11/306. Washington, D.C. p. 5.26 Legislative Decree N° 695, April 29th, 2011, Published in the Official Gazette N° 141, Edition N° 392, from July 27th, 2011.27 Legislative Observatory (September 29th, 2011). Approval to establish an interest rate limit to credit cards.28 La Prensa Gráfica (October 3rd, 2011). Press Release.29 Legislative Observatory (October 14th, 2011). Presidential Observations to Legislative Decree N° 853.30 Legislative Observatory (October 2011). Financial Commission’s Report. News.31 Legislative Observatory (June 22nd, 2011). Banking institutions warn that Law against Usury may cause more usury. News.32 Economist Intelligence Unit. (October 2011). Global Microscope over the business scenario for microfinances. 2011. The Economist.33 FUSADES. (October 2011). Limit to interest rates: Whom does it affect? Executive Memorandum 22. Legal Studies Department and Social and Economic Studies Department.34 FUSADES. (December 6th, 2011). A wholesome solution for a fiscal problem. Press Release published in La Prensa Gráfica; FUNDE. (September 6th, 2011). Fiscal Transparency Measures: El Salvador vs. the international experience. Discussion Forum with Juan Pablo Guerrero. San Salvador. LEGAL AND INSTITUTIONAL SITUATION REPORT 103
    • endnotes 35 El Salvador and the United States’ Government (November, 2011). Partnership for Growth El Salvador – United States: Conjoint Action Plan 2011-2015. Page 23. 36 World Bank. (2011). Doing Business 2012 Country Profile: El Salvador. Washington D.C. p. 73 37 Legislative Decree N° 957 y 958, December 14th, 2011, published in Official Gazette N° 235, Edition N° 393, December 15th, 2011. For information on other legal proposals: Interview with the Industry and Commerce Chamber of El Salvador, September, 2011, and ; Legislative Observatory, (November 15th, 2011). FMLN asks modifications to the Tax over Income Law. News.; and IMF, (September 30th, 2011) Stand By Agreement’s third revision. Country Report N° 11/306. Washington, D.C. p. 5. 38 The following press releases are proof of the lack of dialogue: PCN (December 14th, 2011). In response to the increase on taxes approved by FMLN, GANA, PCN and PDC, ANEP affirms; Parliament (December 19th, 2011). El Salvador’s Parliament’s Director’s Board clarifies; ARENA (December 19th, 2011). Parliamentary group rejects publication made by some of the Director’s Board members; FMLN (December 20th, 2011). Press Release. Consulted on December 2nd at: http://www.anep. org.sv/ and http://www.observatoriolegislativo.org.sv/index.php?option=com_content&view=article&id=1697:documentos- sobre-comunicado-de-la-asamblea-hacia-la-anep-en-tema-de-reformas-tributarias&catid=12:noticias&Itemid=3 39 El Faro. (December 15th, 2011). The poorest people in El Salvador pay 30% of their income in taxes, and the richest 11%. Nationals. Consulted December 20th, 2011 at: http://www.elfaro.net/es/201112/noticias/6898/; and El Faro. (December 19th, 2011). Tax Payers List in El Faro. Editorials. Consulted on December 20th, 2011 at: http://www.elfaro.net/es/201112/ opinion/6934/ 40 Ministry of Treasury. (December 22nd, 2011). Official Statement from the Ministry of Treasury published in La Prensa Gráfica. The Statement affirms: “The Ministry of Treasury has requested the Transparency and Anti-Corruption Subsecretariat to intervene to clarify this situation…”. Also the General Prosecution is competent to initiate the investigation based on Art. 234 from the Penal Code, and Art. 17 from the Penal Procedures Code. 41 Legislative Observatory. (December 20th, 2011). FMLN asks for modifications on Penal Legislation in taxation matters. News. 42 FUSADES. (July 2011). LACAP Reforms: a weakening in the Public Purchase System. Legal Studies Bulletin Nº 127, Legal Studies Department; Diario El Mundo. (October 27th, 2011). UACI’s consider small and medium businesses to be deficient. Economy. 43 Legislative Observatory. (July 12th, 2011). Pieces to entered to Commission Study. 44 FUSADES. (August 2011). Legal and Institutional Situation for 2011’s first semester. Legal Studies Department. p. 109. 45 Legislative Observatory. (September 8th, 2011). Puerto La Unión Concession Law’s Approval. News. More information at: Diario El Mundo. (October 14th, 2011). Puerto Cutuco’s public purchase in 2012.Economy; and, La Prensa Gráfica (July 26th, 2011). La Unión’s Adjudication in 2012’s first semester. Economy. Rosa María Pastrán. 46 FUSADES. (December 2011) Legal Considerations for Puerto de La Unión Centroamericana. Institutional Position nº 49. Legal Studies Department. 47 Idem. 48 Legislative Observatory. (September 13th, 2011). Bulletin Nº 160. FMLN’s parliamentary group Motion. More information at: El Faro. http://www.elfaro.net/es/201109/noticias/6042/ 49 Agreement Nº 577 from December 12th, 2011. Published in the Official Gazette Nº 234, Edition 393, from December 14th, 2011.104 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • endnotes50 FUSADES. (August 24th, 2011). Legal and Institutional Situation Report for 2011’s first semester. Legal Studies Department. p. 108. El Salvador.51 ESC. (August 30th, 2011). Final Verdict on Public-Private Partnership’s Law. San Salvador. For more information: ESC (August 17th, 2011). Public-Private Partnership Forum. San Salvador; Economic Integration Central American Bank & World Bank Institute. (July 22nd, 2011). Good Practices in Public-Private Partnership Financing and Challenges for Central America Conference from July 22nd, 2011. San Salvador, El Salvador.52 El Salvador and the United States’ Government (November, 2011). Partnership for Growth El Salvador – United States: Conjoint Action Plan 2011-2015. P. 20.53 Diario Latino. (September 19th, 2011). Industrials Salvadorean Association asks to eliminate obstacles and guarantee legal certainty. Business.; El Diario de Hoy. (July 21st, 2011). State’s lateness stops 17 international firms’ investment. National.54 El Salvador and the United States’ Government (November, 2011). Partnership for Growth El Salvador – United States: Conjoint Action Plan 2011-2015. p. 20 and 24.55 World Economic Forum (2011). Global Competitiveness Report 2011-2012. Switzerland p. 17056 World Bank. (2011). Doing Business 2012 Country Profile: El Salvador. Washington D.C. p. 24.57 Presidency’s Technical Secretary, Ministry of Economy, Ministry of Agriculture and Farming, Central Reserve Bank and the Industrials Salvadorean Association (October 2011). Industrial Policy 2011-2024. San Salvador. p. 33, 35 and 45.58 El Salvador and the United States’ Government (November, 2011). Partnership for Growth El Salvador – United States: Conjoint Action Plan 2011-2015. p. 20.59 El Salvador’s Presidency. (September 14th, 2011). SAE holds a discussion forum on Civil Service’s Professionalization. Strategic Affairs Secretary News. Consulted on December 5th, 2011 at: http://asuntosestrategicos.presidencia.gob.sv/novedades/noticias/ item/203-sae-realiza-conversatorio-sobre-profesionalizaci%C3%B3n-del-servicio-civil.html60 FUSADES. (December 2008). Economic, Social and Institutional Strategy 2009-2014: Democracy and Growth: Foundations for Development. San Salvador. p. 13.61 Diario El Mundo. (August 26th, 2011). Judicial Strike forces tribunal relocation. National. El Diario de Hoy. (August 26th, 2011). Negotiation between government and teachers stagnant. National.; El Diario de Hoy. (November 17th, 2011) Hasbún mediate labor conflict in flight terminal. Communities.; La Prensa Gráfica. (November 29th, 2011). Unions closed customs in frontiers. National.; Contrapunto. (September 14th, 2011). Unions in chain reaction. News. Consulted on December 5th, 2011 at: http:// www.contrapunto.com.sv/sociedadcivil/sindicatos-reacciona-en-cadena62 Environmental Affairs Secretary. (November 14th, 2011). CAALA/11/007 Río Agua Caliente ES. Environmental Communications. Consulted December 20th, 2011 at: http://www.saa-sem.org/63 Ministry of International Commerce. (October 25th, 2011). Commissary’s Collegiate Group approves agreement. Press Release. Consulted November 21st. 2011 at: http://www.comex.go.cr./prensa/Paginas/CP-1339.aspx; La Prensa Gráfica. (November 4th, 2011). AA with Commerce Quotas regulation. Economy.64 Ministry of Economy. (September 2011). El Salvador signs Partial Reach Agreement with Cuba. News. Consulted on November 21st, 2011 at: http://www.minec.gob.sv/index.php.?option=com_contemt&view=article&id=1769:tlc&catid=1:noicias- ciudadanos&Itemid=77 LEGAL AND INSTITUTIONAL SITUATION REPORT 105
    • endnotes 65 Ministry of Economy. (November 22nd, 2011). Free Trade Treaty between Mexico, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. News. Consulted on December 10th, 2011 at: http://www.minec.gob.sv/index.php?option=com_content&view =article&id=1769:tlc&catid=1:noticias-ciudadano&Itemid=77 66 Diario El Mundo. (December 29th, 2011). Country to negotiate a Free Trade Treaty with South Korea in 2012, and Agreements with Ecuador and Caricom are already in the commercial agenda. Economy. p. 20 and 21. 67 Presidency’s Technical Secretary, Ministry of Economy, Ministry of Agriculture and Farming, Central Reserve Bank and the Industrial Salvadorean Association (October 2011). Industrial Policy 2011-2024. San Salvador. P. 33, 35 and 45. More information: El Salvador and the United States’ Government (November, 2011). Partnership for Growth El Salvador – United States: Conjoint Action Plan 2011-2015. p. 34. 68 Diario El Mundo. (October 17th, 2011). Differences in the exportation strategy advances. Economy. 69 FUSADES. (August 2011). Free Zones on an international level: tendency to expand. Legal Studies Bulletin Nº 128. Legal Studies Department. 70 Presidency’s Technical Secretary. (October 10th, 2011). Government and private sector present reforms to the Free Zones Law. News. Consulted on October 18th, 2011 at: http://tecnica.presidencia.gob.sv/component/k2/item/310-gobierno-y-sector- privado-presentan-reformas-a-ley-de-zonas-francas.html 71 Legislative Decree N° 790, July 21st, 2011, published in Official Gazette No. 158, Edition Nº 392, from August 26th, 2011. 72 Ministry of Economy (December 13th, 2011). MINEC launches Quality National Policy. News. Consulted on December 15th, 2011 at: http://www.minec.gob.sv/index.php?option=com_content&view=article&id=1817%politica-calidad&catid=1%noticias- ciudadano&Itemid=77 73 FUSADES. (September 19th, 2011). SICA dialogue about regional integration. News. San Salvador. 74 Ministry of Economy (December 15th, 2011). Results Presentation 2011’s second semester. Commercial Policy. Some regulation to harmonize sanitary and fito-sanitary measures, the harmonized Central American custom was adequate to the 5th Amendment of the World Customs Organization, among others. For more information: Central American Economic Integration Secretary. (December 6th, 2011). Main Results from the XLI COMIECO Reunion. Informative Bulletin. Consulted on December 19th, 2011 at: http://www.sieca.int/site/VisorDocs.aspx?IDDOC=Cache/17990000004116/17990000004116.swf 75 El Diario de Hoy. (December 23rd, 2011). Managua: Nicaragua files lawsuit against Costa Rica in The Hague. News. 76 Meeting from August 22nd, 2011. Interview with a participant. 77 Central American Court of Justice, Central American Lawyer Association for Integration. Second Program for Central American Regional Integration Support and the Iberoamerican Constitutional Law Institute-ICLI-, El Salvador’s section. (September 29th, 2011). Central American Double Nationality and Central American Mortgage Workshop. San Salvador, El Salvador. 78 World Trade Organization. Conflict Solutions: Conflict DS418. Dominican Republic- safeguard measures on Polypropylene Sacks and Tubular Tissue importation. Consulted on October 27th, 2011 at: http://www.wto.org/spanish/tratop_s/dispu_s/cases_s/ ds418_s.htm106 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • endnotes TRANSPARENCY1 International Transparency (2011). 2011’s Corruption Perception Index. Recovered December 9th, 2011 from: http://cpi. transparency.org/cpi2011/2 United Nations’ Office against Drugs and Crime (2010). Application of the United Nations Convention against Corruption Exam Mechanism: Model Documents. Vienna. Recovered September 20th, 2011 from: http://www.unodc.org/documents/treaties/ UNCAC/Publications/ReviewMechanism-BasicDocuments/Mechanism_for_the_Review_of_Implementation_-_Spanish.pdf3 Idem.4 Legal Cooperation Department (October, 2011). Successful culmination of the third round from MESICIC and the beginning of fourth round that includes in site visits. Anti-Corruption Bulletin N° 75. Recovered October 12th, 2011 from: http://www.oas. org/juridico/newsletter/nl_sp.htm5 Legal Cooperation Department (September, 2011). El Salvador offers as a voluntary to be analyzed in the beginning of the 4th Anti- Corruption Mechanism from OAS. Anti-Corruption Bulletin N° 64. Recovered October 12th, 2011 from: http://www.oas. org/juridico/newsletter/nl_sp_64.htm6 Legal Cooperation Department (September, 2011). OAS advances in Anti-Corruption Model laws elaboration. Anti-Corruption Bulletin N° 74. Recovered October 12th, 2011 from: http://www.oas.org/juridico/newsletter/nl_sp_74.htm7 Open data, is the practice that intends certain data to be accessible to the whole world without control mechanisms such as patents and reserved rights.8 Open Government Partnership (2011). Eligibility: About. Recovered September 30th, 2011 from: http://www.opengovpartnership. org/eligibility9 Headline from Diario Colatino (September 21st, 2011). El Salvador subscribes “Open Governments” initiative in New York. Diario Colatino. Recovered September 30th, 2011 from: http://www.diariocolatino.com/es/20110921/nacionales/96824/El- Salvador-suscribe-iniciativa-%E2%80%9CGobiernos-Abiertos%E2%80%9D-en-Nueva-York.htm.10 Legislative Decree No. 534, from December 2nd, 2010, published in the Official Gazette No. 70, Edition No. 391, from April 8th, 2011.11 Executive Decree No. 136, from September 1st, 2011, published in the Official Gazette No. 163, Edition No. 392, from September 2nd, 2011.12 Magaña, Yolanda. (September 7th, 2011). Regulation to comply Information Law, ready. El Mundo. Recovered September 8th, 2011 from: http://www.elmundo.com.sv/politica/16608-listo-reglamento-para-cumplir-ley-de-informacion.html13 Orellana, Liset, (August 19th, 2011). Pressure so that APIL regulations are consulted. El Mundo. Recovered October 13th, 2011 from: http://www.elmundo.com.sv/politica/15594-presionan-para-que-reglamentos-laip-sean-consultados.html14 FUSADES (September, 2011). Unconstitutionality in the Access to Public Information Regulation. Institutional Position number 46. Antiguo Cuscatlan, FUSADES.15 Constitutional Chamber from the Supreme Court of Justice. Unconstitutionality Ruling 22-99, from April 8th, 2003. LEGAL AND INSTITUTIONAL SITUATION REPORT 107
    • endnotes 16 Legal and Political Matters Commission from OAS’s Permanent Council (April 23rd, 2010). Comments and Implementation Guide for the Access to Information Inter-American Model Law. OAS/Ser.G CP/CAJP-2841/10. 17 Lemus, Efrén. (September 19th, 2011). Audit Court’s President assures Hernán Contreras still hasn´t resigned to $66,0000 bonus. El Faro. Recovered October 14th, 2011 from: http://www.elfaro.net/es/201109/noticias/5903/ 18 Parliament. (June 30th, 2011). Summary of the events in Ordinary Session No. 103. Recovered October 13th, 2011 from: http:// www.asamblea.gob.sv/sesion-plenaria/seguimiento/legislatura-2009-2012/2011/no-103-30-jun-2010/resultado 19 Audit Court Decree No. 106, November 19th, 2007. Published in the Official Gazette No. 223, from November 29th, 2007. 20 Idem. 21 González, Luis (December 20th, 2011). Sigfrido Reyes: Audit Court’s auditing will cost $300,000. La Prensa Gráfica. Recovered December 20th, 2011from: http://www.laprensagrafica.com/el-salvador/politica/238443-sigfrido-reyes-auditoria-a-corte-de- cuentas-costara-300000.html 22 Soriano, Antonio (December 6th, 2011). Audit Court´s auditing goes complicated. Diario El Mundo. Recovered December 9th, 2011 from: http://elmundo.com.sv/demov3/?p=8911 23 Arauz, Sergio (October 13th, 2011). Supreme Court decides to force judges to make their patrimonies transparent. El Faro. Recovered October 13th, 2011 from: http://www.elfaro.net/es/201110/noticias/6247/ 24 Chávez Suchit (October 12th, 2011). SCJ: patrimonial declaration will be mandatory. La Prensa Gráfica. Recovered October 13th, 2011 from: http://www.laprensagrafica.com/el-salvador/judicial/223436-csj-sera-obligatoria-la-declaracion-patrimonial.html 25 Piza Rodríguez, Julio Roberto (2000). Declaration of Incomes, Expenses, Assets and Debts for who fulfill a public function Model Law. Recovered 30th, 2011 from: http://www.oas.org/juridico/spanish/ley_modelo_declaracion_activos.htm 26 Mailed pieces can be accessed at: http://www.observatoriolegislativo.org.sv/attachments/article/1684/prob_parte1.pdf; y http:// www.observatoriolegislativo.org.sv/attachments/article/1684/prob_parte2.pdf 27 Idem. 28 Legislative Observatory (July 26th, 2011). Bulletin No. 154. Recovered 28th, 2011from: http://www.observatoriolegislativo.org. sv/attachments/article/1479/BOL_OL_154.pdf 29 Promotion Group. (November 22nd, 2011). Press Release. Recovered December 30th, 2011 from: www.transparenciaelsalvador. org 30 Presidency’s Strategic Affairs Secretary. (December 8th, 2011). Press Release about the election of the lists for the Access to Public Information Institute. Recovered December 8th, 2011 from: http://www.elsalvador.com/mwedh/epaper/20111208/ EDH20111208NAC035P.PDF 31 Legislative Observatory (September 6th, 2011). Parliament will ask reports on GET’s President candidates. News. Legislative Observatory. Recovered September 30th, 2011 from: http://www.observatoriolegislativo.org.sv/index.php?option=com_conten t&view=article&id=1553:asamblea-pedira-informes-sobre-candidatos-a-presidencia-del-teg&catid=12:noticias&Itemid=3. 32 Cabrera, Amadeo (December 16th, 2011). GET has paralyzed the sanction application for not having a chairman. La Prensa Gráfica. Recovered December 16th, 2011 from: http://www.laprensagrafica.com/el-salvador/politica/237554-teg-ha-paralizado- aplicar-sanciones-por-estar-acefalo.html108 LEGAL AND INSTITUTIONAL SITUATION REPORT
    • endnotes33 FUSADES. (November 2011). New Government Ethic Tribunal Law. Institutional Position No. 48. Recovered November 29th, 2011 from: http://www.fusades.org/index.php?cat=1290&lang=es&title=Posici%F3n%20institucional34 Aguiluz, Nallely (November 17th, 2011). Executive observations to the Government Ethics Law partially approved. News. Parliament. Recovered November 18th, 2011 from: http://www.asamblea.gob.sv/noticias/archivo-de-noticias/aprueban- parcialmente-observaciones-del-ejecutivo-a-la-ley-de-etica-gubernamental LEGAL AND INSTITUTIONAL SITUATION REPORT 109
    • LEGAL STUDIES COMMISSIONCOORDINATORLuis Nelson SegoviaMEMBERSPedro Luis ApóstoloMaría Eugenia Brizuela de ÁvilaFidel Chávez MenaFrancisco de SolaAquiles DelgadoÁlvaro Ernesto GuatemalaElena María Lacayo de AlfaroPedro Alejandro Mendoza CalderónMario Enrique SáenzBenjamín ValdezClaudia Beatriz UmañaEDITORIAL STAFFLEGAL STUDIES DEPARTAMENTDIRECTORMANAGERLilliam Arrieta de CarsanaINVESTIGATIONS UNITDEMOCRATIC INSTITUTIONALISM AFFAIRSCOORDINATORRené A. Abrego LabbéANALYSTSCarmina Castro de VillamarionaOscar Alfredo PinedaINVESTMENT CLIMATE AFFAIRSCOORDINATORMarjorie ChorroANALYSTCarlos Alberto Guzmán
    • Legal Studies DepartmentSalvadoran Economic and Social Development FoundationBoulevard and Urbanization Santa Elena, Building FUSADESAntiguo Cuscatlán, La Libertad, El Salvador, Centroamérica. Post Office 01-278Phone No. (503) 2248-5600 (503) 2248-5671Fax: (503) 2248-5603