Armenia

Armenia - Monitoring report

Date of the monitoring visit: from 26 to 28 October 2013
Report adopted on: 26 March 2014

This is the second report on the state of local democracy in Armenia.

 

It underlines the efforts made to implement the provisions of the Charter, in particular constitutional changes in 2005 and the passage of a new law in 2008. Progress has also been made concerning the legal status of municipal officials. The rapporteurs welcome the ratification of the Additional Protocol to the Charter on the right to participate in the affairs of a local authority and the passage of legislation to strengthen citizen participation. The report does, however, refer to various points of concern. Most local services are managed by the state and municipalities have limited service delivery capacity, mainly because of their small size. Moreover, local authorities play a limited role because powers are poorly delimited, they do not have full and exclusive powers and there is no formal mechanism for consultation with central government. The report highlights that financial and economic matters are supervised by the state, local authorities have limited own resources, there are no real local taxes and the implementation of the financial equalisation mechanism needs to be reviewed.

 

It is recommended that the Armenian authorities review the legislation for implementing the principle of subsidiarity. The Armenian authorities are urged to foster inter-municipal co-operation and increase the capacity of community councils. It is also recommended that they define and ensure the exercise of full and exclusive powers for local authorities. They are further urged to set up a formal consultation mechanism, limit administrative supervision to reviews of the legality of local authorities’ action and increase local authorities’ own resources. Lastly, it is recommended that the efficiency of the tax mechanism in municipalities be improved and the financial equalisation mechanism be reviewed so that the calculation criteria take closer account of the actual economic situation faced by local authorities and, in particular, that national associations of local authorities are involved in the calculation procedures.

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Article ratified Ratified with reservation Non ratified
Compliance Partial compliance Non compliance To be determined
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Article 2
Constitutional and legal foundation for local self government - Article ratified

The principle of local self government shall be recognised in domestic legislation, and where practicable in the constitution.


Article 2 of the Charter requires signatory countries to recognise the principle of local self-government in their domestic legislation.

 

The previous monitoring report made a number of proposals for the Armenian authorities to incorporate some legislative provisions as well as some new guarantees in the Constitution. The constitutional reform of 2005 complied with some of these recommendations. Regarding the principle and concept of local government, the most important change was the recognition of Yerevan as a community (local self-government), instead of its having marz (administrative region) status. In parallel with the establishment of the municipality of Yerevan, the 12 district communities of the capital lost their own local self-government status.

 

In spite of the very gradual transfer of some administrative functions to municipalities in recent years, local communities do not regulate and manage “a substantial share of public affairs under their own responsibility”. The most important and costly local public services are provided by the state. Local authorities take part in service delivery only to a limited extent. In many cases, they provide public services not under their own responsibility, but only as delegated competences.

 

It should also be noted that Recommendation 140 (2003) called for the term of office for local councillors and chiefs to be extended from three to four years, a measure which was taken by the constitutional reform of 2005.

Article 3.1
Concept of local self government - Article ratified

Local self-government denotes the right and the ability of local authorities, within the limits of the law, to regulate and manage a substantial share of public affairs under their own responsibility and in the interests of the local population.


Consult reply indicated at article 2

Article 3.2
Concept of local self government - Article ratified

This right shall be exercised by councils or assemblies composed of members freely elected by secret ballot on the basis of direct, equal, universal suffrage, and which may possess executive organs responsible to them. This provision shall in no way affect recourse to assemblies of citizens, referendums or any other form of direct citizen participation where it is permitted by statute.


Consult reply indicated at article 2

Article 4.1
Scope of local self government - Article ratified

The basic powers and responsibilities of local authorities shall be prescribed by the constitution or by statute. However, this provision shall not prevent the attribution to local authorities of powers and responsibilities for specific purposes in accordance with the law.


Recommendation 140 (2003), summarising the main findings of the previous monitoring report on Armenia, stated “notes that across Armenia as a whole, and especially in the rural communities, local government bodies have few substantial powers and that their autonomy is compromised by an unsatisfactory financial regime and by a lack of other resources, such as the absence of a strong local civil service”.

 

Since then, the Law on Local Self-Government has been modified, enumerating the powers and duties of the Council of Aldermen and the Chief of Community. Another development is the growing delegation of powers to local authorities, such as the transfer of certain social services to some urban communities and of many state functions to the municipality of Yerevan. Even the range of mandatory tasks and functions has been extended slightly. Nevertheless, there has been little change regarding the predominant role of central government and its regional authorities as compared with the local communities.

 

Although the Charter does not specify the kind of local public affairs to be regulated and managed by local authorities (municipalities in this particular case), the most important local matters that greatly affect the life of the local community should, as a general principle, be decided and managed at the local government level. In Armenia, the vast majority of local public services are delivered by the state administration. This division of powers and duties may lead to an ineffective local administration and, in the absence of local democratic scrutiny, may result in a serious democratic deficit.

 

For the majority of local public services, local communities do not have full and exclusive powers. Instead, they often perform functions under delegated powers, with local government bodies serving as agents of the central government, rather than autonomous actors of local public administration.

 

The Congress delegation found that “own” tasks and delegated powers often are not clearly separated, which has negative effects on both the accountability and the finance of local communities. It goes without saying that the scope of local autonomy is much wider when a function falls within the responsibility of local government, while the mere execution of a centrally delegated task places a local community in a subordinate position to the central authorities.

 

The current situation meets the Charter requirement concerning the right of local authorities to be consulted “in due time and in an appropriate way” on matters which concern them directly. There is no information available on the existence of an institutionalised and regular coordination between the central government and local communities guaranteed by law. Their contacts are based on person-to-person relationships and local authorities are informed about central government decisions on an ad hoc basis. The consultation mechanism is not properly regulated.

Article 4.2
Scope of local self government - Article ratified

Local authorities shall, within the limits of the law, have full discretion to exercise their initiative with regard to any matter which is not excluded from their competence nor assigned to any other authority.


Consult reply indicated at article 4.1

Article 4.3
Scope of local self government - Article ratified

Public responsibilities shall generally be exercised, in preference, by those authorities which are closest to the citizen. Allocation of responsibility to another authority should weigh up the extent and nature of the task and requirements of efficiency and economy.


Consult reply indicated at article 4.1

Article 4.4
Scope of local self government - Article ratified

Powers given to local authorities shall normally be full and exclusive. They may not be undermined or limited by another, central or regional, authority except as provided for by the law.


Consult reply indicated at article 4.1

Article 4.5
Scope of local self government - Article ratified

Where powers are delegated to them by a central or regional authority, local authorities shall, insofar as possible, be allowed discretion in adapting their exercise to local conditions.

 


Consult reply indicated at article 4.1

Article 4.6
Scope of local self government - Article ratified

Local authorities shall be consulted, insofar as possible, in due time and in an appropriate way in the planning and decision-making processes for all matters which concern them directly.

 


Consult reply indicated at article 4.1

Article 5
Protection of local authority boundaries - Non ratified

Changes in local authority boundaries shall not be made without prior consultation of the local communities concerned, possibly by means of a referendum where this is permitted by statute.

 


The Charter requires that local authority boundaries should not be changed without prior consultation with the local communities concerned, possibly by means of a referendum where this is permitted by statute.

 

The rapporteurs would point out that Armenia has not ratified Article 5 of the Charter. Consequently, the comments made below in paragraph 110 and the following paragraphs are merely indicative, as Armenia is not bound by this provision.

 

So far only small changes have taken place in the number of local communities. Since the amendment of the Law on Administrative and Territorial Division in 2006, a few rural communities have become urban communities and some others have been integrated into other municipalities. As discussed above, the administrative status of Yerevan was changed in 2008 when the capital city, formerly a marz, became a separate municipal self-government, while at the same time the 12 districts of Yerevan lose their own self-government rights. In the latter case, it is not clear, how the respective district communities were consulted before losing their right to local self-government.

 

The Constitution contains sufficient guarantees for local authorities to be consulted prior to any initiative for merging them, since it stipulates that, before submitting such a legislative proposal, the government must call local referendums in the respective communities, and the results of these popular votes must be appended to the legislative initiative.

Article 6.1
Appropriate administrative structures and resources for the tasks of local authorities - Non ratified

Without prejudice to more general statutory provisions, local authorities shall be able to determine their own internal administrative structures in order to adapt them to local needs and ensure effective management.


The rapporteurs would point out that Armenia has ratified neither Article 6 nor Article 7-2 of the Charter. Consequently, the comments made on these provisions are only indicative, as Armenia is not bound by them.

 

Local authorities have the right to determine their internal administrative structures and they should be able to adapt them to local needs and ensure effective management. Apparently, this organisational autonomy can be restricted only by law, in order to ensure the democratic operation of all local government units. The Charter requires that the conditions of office of local elected representatives must be such as to ensure the free exercise of their functions.

 

Since the monitoring report of 2003, Armenia has made some progress in ensuring appropriate administrative structures and conditions for local communities. Maybe the most significant step was the adoption of the Law on the Municipal Civil Service in 2004 and its amendments in 2008 and in 2013 which established the legislative basis for the legal status of public servants working for local authorities.

 

However, the progress has been made within a highly centralised system, under the auspices of the Ministry of Territorial Administration. The number of staff of local communities is set centrally, and the central authorities have great influence over the recruitment of local administrative staff. Having regard to the very limited financial and human resources of local communities, this may be inevitable. Nevertheless, such strong central control is hardly compatible with the requirements of Articles 6 and 7 of the Charter, which require a real possibility for local authorities to determine their own internal structures.

Article 6.2
Appropriate administrative structures and resources for the tasks of local authorities - Non ratified

The conditions of service of local government employees shall be such as to permit the recruitment of high-quality staff on the basis of merit and competence; to this end adequate training opportunities, remuneration and career prospects shall be provided.


Consult reply indicated at article 6.1

Article 7.1
Conditions under which responsibilities at local level are exercised - Article ratified

The conditions of office of local elected representatives shall provide for free exercise of their functions.


Consult reply indicated at article 6.1

Article 7.2
Conditions under which responsibilities at local level are exercised - Non ratified

They shall allow for appropriate financial compensation for expenses incurred in the exercise of the office in question as well as, where appropriate, compensation for loss of earnings or remuneration for work done and corresponding social welfare protection.


Consult reply indicated at article 6.1

Article 7.3
Conditions under which responsibilities at local level are exercised - Article ratified

Any functions and activities which are deemed incompatible with the holding of local elective office shall be determined by statute or fundamental legal principles.


Consult reply indicated at article 6.1

Article 8.1
Administrative supervision of local authorities' activities - Article ratified

Any administrative supervision of local authorities may only be exercised according to such procedures and in such cases as are provided for by the constitution or by statute.


Any administrative supervision of the activities of local authorities can only be aimed at ensuring compliance with the law and with constitutional principles. Administrative supervision may, however, be exercised with regard to expediency by higher-level authorities in respect of tasks the execution of which is delegated to local authorities.

 

Another important requirement deriving from the Charter’s provisions is that the law should determine precisely which administrative authorities are empowered to exercise legal supervision over municipalities.

 

Unfortunately, none of these requirements are met by the current Armenian legislation. The supervisory powers of central government extend not only to review of the legality of the local community's action, but also to the economic and financial aspects of local government matters. Although such central supervision can be exercised no more frequently than once a year, it does not seem in conformity with either Article 8 para. 2 of the Charter or Article 108.1 of the Armenian Constitution, which allows only “legal control” in order “[t]o ensure the lawfulness of the activities of the local self-government bodies”. As the Congress delegation was informed, the marzpets exercise effective oversight over the local communities, but the precise content and method of their supervision is not stipulated by law.

 

The government is entitled by law to dismiss the Chief of Community, a situation which departs from the usual practice in Council of Europe member states, where the elected officials of local authorities cannot normally be removed from office for political reasons. This principle seems to prevail in Armenia too, but if that is actually the case only the courts should be able to remove them from office and then only on legal grounds. The possibility for central government to dismiss elected local representatives raises concerns, as the mere existence of such a procedure can be a means of pressure on local leaders.

 

Furthermore, the legal status of the marzer is laid down by presidential decree, rather than a statute, which also raises concerns about the adequate protection of local autonomy.

Article 8.2
Administrative supervision of local authorities' activities - Article ratified

Any administrative supervision of the activities of the local authorities shall normally aim only at ensuring compliance with the law and with constitutional principles. Administrative supervision may however be exercised with regard to expediency by higher-level authorities in respect of tasks the execution of which is delegated to local authorities.


Consult reply indicated at article 8.1

Article 8.3
Administrative supervision of local authorities' activities - Article ratified

Administrative supervision of local authorities shall be exercised in such a way as to ensure that the intervention of the controlling authority is kept in proportion to the importance of the interests which it is intended to protect.


Consult reply indicated at article 8.1

Article 9.1
Financial resources of local authorities - Article ratified

Local authorities shall be entitled, within national economic policy, to adequate financial resources of their own, of which they may dispose freely within the framework of their powers.


Article 9 para. 1 of the Charter provides that local authorities must have adequate financial resources of their own, of which they may dispose freely within the framework of their powers. Financial autonomy is an essential component of the principle of local self-government and for the exercise of a wide range of responsibilities in the field of local public affairs. These elements are cumulative and not alternative, which means that all the conditions laid down in this provision of the Charter are mandatory.

 

Another basic principle requires that local authorities must have sufficient financial resources in proportion to the responsibilities assigned to them by law. On the basis of the available data and information, it is particularly difficult to assess how this requirement is met in Armenia. While some NGO’s claim that the insufficient fund prevents a lot of small communities to provide appropriate public services, others may argue that the principle of adequate finance seems to be more or less fulfilled in Armenia, but only because municipalities have extremely limited powers and responsibilities.

 

The Charter requires that at least a part of local revenues should come from local taxes. Article 9 para. 3 determines the nature of such taxes, providing that they are those for which local authorities, within the limits of the law, must be able to determine the rate. Moreover, local taxes are really “own” revenue sources solely where their imposition can be freely decided at local government level. Currently neither condition is met in Armenia. Local communities are obliged to collect both property and land taxes, and their rate is set by law. Community councils have solely been granted authority to determine the rate of the hotel tax, but in the absence of the relevant law they cannot impose this kind of tax.

 

It is clear that Armenian municipalities have only minimal financial resources, which is the main obstacle to their assuming a central role in local administration. Typically, one of the persons whom the delegation met described his community's local financial autonomy as being able to approve only a “survival budget”. In the absence of sufficient revenues, they are not able to play a more significant role in local democracy.

 

There are some indications that the principle of adequate financing does not prevail in every case. When delegating state administrative powers to local communities, central government sometimes does not provide sufficient financial resources for local authorities to carry out these tasks. This was the case when a law delegated powers in the area of defence to local communities in 2009. More generally, the central grants do not cover the cost of performance of mandatory tasks and functions. As the Congress delegation was informed directly by those concerned, rural communities frequently do not receive sufficient resources for maintaining their public service institutions. During the consultation process, the Armenian authorities provided the delegation of the following info: “For the purposes of addressing a number of urgent issues in the communities in 2013, the reserve fund of the government was used to allocate 7.4 bln drams to the marzes to implement capital investment projects (in 2011-2014 four urgent projects were implemented at the value of 40.1 bln drams). In 2013, incremental 1.3 bln drams were allocated to the marzpetarans to implement capital investment projects”.

Article 9.2
Financial resources of local authorities - Article ratified

Local authorities' financial resources shall be commensurate with the responsibilities provided for by the constitution and the law.


Consult reply indicated at article 9.1

Article 9.3
Financial resources of local authorities - Article ratified

Part at least of the financial resources of local authorities shall derive from local taxes and charges of which, within the limits of statute, they have the power to determine the rate.


Consult reply indicated at article 9.1

Article 9.4
Financial resources of local authorities - Article ratified

The financial systems on which resources available to local authorities are based shall be of a sufficiently diversified and buoyant nature to enable them to keep pace as far as practically possible with the real evolution of the cost of carrying out their tasks.


Consult reply indicated at article 9.1

Article 9.5
Financial resources of local authorities - Article ratified

The protection of financially weaker local authorities calls for the institution of financial equalisation procedures or equivalent measures which are designed to correct the effects of the unequal distribution of potential sources of finance and of the financial burden they must support. Such procedures or measures shall not diminish the discretion local authorities may exercise within their own sphere of responsibility.


Consult reply indicated at article 9.1

Article 9.6
Financial resources of local authorities - Article ratified

Local authorities shall be consulted, in an appropriate manner, on the way in which redistributed resources are to be allocated to them.


Consult reply indicated at article 9.1

Article 9.7
Financial resources of local authorities - Article ratified

As far as possible, grants to local authorities shall not be earmarked for the financing of specific projects. The provision of grants shall not remove the basic freedom of local authorities to exercise policy discretion within their own jurisdiction.


Consult reply indicated at article 9.1

Article 9.8
Financial resources of local authorities - Article ratified

For the purpose of borrowing for capital investment, local authorities shall have access to the national capital market within the limits of the law.


Consult reply indicated at article 9.1

Article 10.1
Local authorities' right to associate - Article ratified

Local authorities shall be entitled, in exercising their powers, to co-operate and, within the framework of the law, to form consortia with other local authorities in order to carry out tasks of common interest.


According to Article 10 para 1, the Charter requires signatory countries to establish an entitlement for local government entities to co‑operate and, within the framework of the law, to form consortia with other local authorities in order to carry out tasks of common interest. In this respect Article 78 of the Law on Local self-government provides the right to form inter-community unions and states that: “Local self-government bodies may form inter-community unions for the purposes of providing solution to some tasks faced by the communities and decrease of expenses. Inter-community unions shall have the status of legal person. Tasks and responsibilities of inter-community unions shall be defined by the law”. However, the rapporteur notes that no law defines tasks and responsibilities of inter-community unions which means that de facto inter-community unions would simply constitute empty shells.

 

According to Article 10 para.2, each member state has to recognise the entitlement of local authorities to belong to associations for the protection and promotion of their common interests and to join international associations of local authorities. Furthermore, local authorities must be consulted, as far as possible, in due time and in an appropriate way, in the course of the planning and decision-making processes for all matters that concern them directly.

 

Local communities in Armenia have the right to form associations both for joint fulfilment of one or more mandatory function(s) and for promoting their interests.

 

The relevant legislation establishes proper legal instruments for local authorities to protect and promote their rights and interests. Each local community is a legal entity, and may turn to the courts when its rights and interests are threatened. They are entitled to apply to the constitutional Court disputing the constitutionality of statutory regulations infringing the rights of the local self-government bodies. It may seek redress from the Constitutional Court for any infringement of its powers by law or regulations.

Article 10.2
Local authorities' right to associate - Article ratified

The entitlement of local authorities to belong to an association for the protection and promotion of their common interests and to belong to an international association of local authorities shall be recognised in each State.


Consult reply indicated at article 10.1

Article 10.3
Local authorities' right to associate - Non ratified

Local authorities shall be entitled, under such conditions as may be provided for by the law, to co-operate with their counterparts in other States.


The rapporteurs would point out that Armenia has not ratified Article 10-3 of the Charter. Consequently, the comments made below on this specific paragraph are merely indicative, as Armenia is not bound by this provision. 

Article 11
Legal protection of local selfgovernment - Article ratified

Local authorities shall have the right of recourse to a judicial remedy in order to secure free exercise of their powers and respect for such principles of local self-government as are enshrined in the constitution or domestic legislation.


Consult reply indicated at article 10.1

Article 12.1
Undertakings - Non ratified

Each Party undertakes to consider itself bound by at least twenty paragraphs of Part I of the Charter, at least ten of which shall be selected from among the following paragraphs:

 

– Article 2,

– Article 3, paragraphs 1 and 2,

– Article 4, paragraphs 1, 2 and 4,

– Article 5,

– Article 7, paragraph 1,

– Article 8, paragraph 2,

– Article 9, paragraphs 1, 2 and 3,

– Article 10, paragraph 1,

– Article 11.


As mentioned earlier, as permitted by Article 12 of the Charter, Armenia has made a number of declarations concerning the scope of the European Charter of Local Self-Government and stated that it does not consider itself bound by some articles. This non-ratification concerns Articles 5, 6, 7-2, and 10-3 of the Charter. 131. During the visit, the Congress delegation was pleased to note that the Armenian representatives all expressed a continuing desire to work with the Congress in maintaining and enhancing compliance with the Charter. 

ACCESSION

to the Council of Europe

RATIFICATION

of the European Charter of Local Self-Government

CONSTITUTION | NATIONAL LEGISLATION

The Constitution of Armenia recognises local self-government in a separate section (Section 7), from Article 104 to Article 110.



25Ratified provision(s)
0Provision(s) with reservation(s)
6 Non ratified articles
11Compliant Provision(s)
8Partially Compliant Articles
5Non-compliant Provision(s)