Prishtina, April 4, 2018 – The President of the Republic of Kosovo, Hashim Thaçi, in support of Article 80 and Article 84 of the Constitution of the Republic of Kosovo, has taken the decision for the return to review of Law No. 06/L-016 on Business Organizations, adopted on March 15, 2018 in the Assembly of the Republic of Kosovo.
Article 34, sub-paragraphs 2.5.1, 2.5.2, 2.5.3. and 2.5.4 of Law No. 06/L-016 on Business Organizations is not in accordance with Article 7, Article 24 and Article 119 of the Constitution of the Republic of Kosovo, and with the Convention on the Elimination of all forms of discrimination against women, which pursuant to Article 22 of the Constitution applies directly to the Republic of Kosovo and has priority, in case of conflict, towards provisions of laws and other acts of public institutions.
The President of the Republic of Kosovo considers that the introduction of a gender-related quota only for the boards of directors of joint stock companies, as is done in Article 34 of Law No. 06/L-016 on Business Organizations, excluding other types of business organizations, through which economic activities in Kosovo can be developed, narrows the applicability of constitutional and legal guarantees to gender equality.
Neither the existence of legal provisions regulating the participation in the boards of directors of joint stock companies through gender quotas is a common practice.
Business Organizations are guided by the principles of credibility in order to maximize profits and they must have the freedom of choice in Managing Boards.
Consequently, the provisions as set out in Article 34 of Law No. 06/L-016 on Business Organizations do not create a favorable legal environment in the freedom of the economic activity of commercial companies (in this case of joint stock companies), and are not in compliance with Article 119 of the Constitution of the Republic of Kosovo, where it is defined that “The Republic of Kosovo provides a favorable legal environment for market economy, freedom of economic activity and security of public and private property”.
Moreover, the provision defined in Article 34, sub-paragraph 2.5.4, where it is defined that “the sanctions for non-compliance with this quota shall be determined by sub-legal acts deriving from this law”, creates uncertainty in the freedom of the economic activity of the commercial companies (joint stock companies), because it gives the right to the Government that with sub-legal act to impose sanctions on commercial companies, namely joint stock companies.
The Republic of Kosovo is committed to the market economy, where in Article 10 of the Constitution it is defined that “The market economy with free competition is the basis of economic regulation of the Republic of Kosovo”.
The intervention of the executive by a sub-legal act, through the imposition of sanctions, in case of the non-realization of the gender quotas of the members of the board of directors of the joint stock company, may create uncertainty in the freedom of the economic activity of joint stock companies.
The Assembly of the Republic of Kosovo, in accordance with the Constitution of the Republic of Kosovo, the Convention on the Elimination of all forms of discrimination against women and Law No. 05/L-020 on Gender Equality, should in Law No. 06/L-016 on Business Organizations, define norms that will ensure gender equality and equal opportunities for female and male participation in all types of business organizations and not through unilateral quotas.
Forms of achieving equal opportunities for women’s and men’s participation in business life for business organizations should be found, creating facilities for achieving gender equality and thus, in certain cases, achieving a gender quota but not interfering with the freedom of economic activity of commercial companies, but by stimulating them.