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LEGAL AND
INSTITUTIONAL
SITUATION REPORT




        Salvadoran Economic
        and Social Development   Legal Studies Department
        Foundation
The elaboration of this Report
concluded on December 31th, 2011

ISSN 2218-6859
Key title: Informe de coyuntura legal e institucional
Abbreviated key title: Inf. coyunt. legal inst.

Salvadoran Economic and
Social Development Foundation
FUSADES

A publication of
Legal Studies Departament




The material in this publication is copyrighted.
Copying portions or all of this work without
permission may be a violation of applicable law.
TABLE OF CONTENTS
1.	     EXECUTIVE SUMMARY


2.	     ACRONYMS


3.	     INTRODUCTION	


4.	     RULE OF LAW AND INSTITUTIONALISM

4.1.	    Introduction
4.2.	    Indicators
4.3.	    Inter-organ relations
4.4.	    Regulatory Activity
4.5.	    Law enforcement
4.6.	    Justice Administration
4.7.	    Municipalities
4.8.	    Electoral System
4.9.	    Conclusions

5.	     LEGAL CERTAINTY AND PUBLIC SAFETY

5.1.	    Introduction
5.2.	    Legal Certainty
5.3.	    Public Safety
5.4.	    Conclusions

6.	     BUSINESS CLIMATE AND REGULATION

6.1.	    Introduction
6.2.	    Indicators
6.3.	    Business Regulation
6.4.	    State Modernization
6.5.	    International Regulation
6.6.	    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 NOTES




4                LEGAL AND INSTITUTIONAL SITUATION REPORT
EXECUTIVE SUMMARY
Rule of Law and Institutionalism

This semester has been characterized by the adjustment of the Electoral Regulations
to the unconstitutionality rulings that have expanded to a certain extent, to the right
of suffrage. The first regulations issued by the Parliament in response to these rulings
did not respect the interpretation given to the constitutional provisions; therefore,
new unconstitutionality actions were filed against these regulatory changes, which
ended in a second set of reforms to the Electoral Law, which finally, although with
some legal gaps, have guaranteed the right to run as a non-party candidate and to vote
for a specific person in the legislative elections.

Following on electoral matters, on the other hand, the uncertainty generated by the
lack of clarity in the cancelation process for PDC and PCN as political parties, and
the unpunished beginning of political campaigns before the legal periods, has been
negative.

Public opinion has criticized the delay in the election of some public officials such as
the Assistant Deputy Prosecutor which was appointed two years after the established
date, or the Chiefs of the Government Ethic Tribunal, whom at the closing of this
report had two months overdue for their appointment which is against the obligation
from the state on compliance to law aspects. Also a decision of Supreme Electoral
Tribunal taken without legal quorum is included in these public reactions.

Regarding the inter-organ relation and the separation of public powers, it can be
highlighted as positive, the eminent derogation of decree 743, a regulation that annulled
the functionality of the Constitutional Chamber from the Supreme Court of Justice,
by demanding all decisions in unconstitutionality matters were unanimous can be
highlighted as positive. A determining factor for the annulment was the participation
of civil society that defended the Constitution and became a decisive and important
factor 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 and
observations; however, the use of these mechanisms has been done with compliance
to the Constitution, and so there is no threat or damage against the Rule of Law
through this practice. There also haven’t been any systematic confrontations between
the 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 relevant
to point out the approval of several important laws such as the Multipurpose Port
Terminal Specialized in Containers Concession Law, from Puerto de La Unión
Centroamericana.




   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 SUMMARY

In the state modernization’s agenda, the approval of the Puerto de La Unión
Centroamericana Concession Law and the end of the discussion in the Economic and
Social Council of the Public-Private Partnership Law, is noted as possitive because it
establishes clear rules and competences defined by the international public purchase
of the public infrastructure, expected to be discussed in Parliament next semester.

Transparency

Advances and setbacks in the state’s transparency agenda have characterized this
semester.

In the setbacks, the unconsulted creation and issuing made by the Executive body
of the Access to Public Information Law Regulation, a text with substantial errors
in content that may be considered as unconstitutional, specifically for the faculties
self-attributed by the Executive body: rejecting the list of candidates proposed by the
civil 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 affect
substantially the implementation of this law. These types of attributions are to be
regulated exclusively by law in accordance to multiple precedents and rulings from
the Constitutional Chamber from the Supreme Court of Justice of El Salvador and
international standards.

Another negative aspect observed during the semester was the lack of appointment
from Parliament of the Government Ethics Tribunal’s President, as well as the
Audit Court’s, Public Ministry’s and Executive Body´s omission to appoint the three
remaining members of that same institution, being the SCJ the only one to appoint
the official in time. At the closing of this report, the institution remains chief-less
since November 1st, 2011, and there is no indication of an advance to come to a
consensus to elect the members over the basis of adequacy and independence.

Within the positive advances projected this semester, is the creation of the new and
strengthened Government Ethics Law, since this is a tool that sets to establish formal
proceedings of investigation and significant economic sanctions to public servers that
violate ethic principles.

Also, even if there have been substantial setbacks in the Access to Public Information
Law, 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 the
fact 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
INTRODUCTION
The Legal and Institutional Situation Report from 2011’s second semester, 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 methodology is developed from an investigation based in the recollection
and monitoring of information from different trustworthy sources, that include
external sources such as media news and international indicators, among them:
the Doing Business Report from the World Bank, the Economic Freedom Index
from the Heritage Foundation, the Global Competitiveness Index from the World
Economic Forum, the Rule of Law Index from the World Justice Project, the
Corruption Perception Index from International Transparency, the Open Budget
Index from the International Budget Partnership, among others, as well as references
to FUSADES’ own production sources such as studies, reports and memorandums
from other departments like the Legal Studies Bulletin, Institutional Positions, and
information from the Judicial and Legislative Observatories, property of the Legal
Studies Department. Once obtained, this information is analyzed with the purpose of
determining its impact in the semester and compared with the data from the previous
semester.

The report is structured in four chapters that contain the strategic topics that guide
the work from the Legal Studies Department at FUSADES: 1. Rule of Law and
Institutionalism, 2. Legal Certainty and Public Safety, 3. Business Climate and
Commerce Regulation and 4. Transparency. In the development of each topic, the
contents are analyzed systematically, to compare them with the results in the report as
well as with previous studies from the Legal Studies Department, such as “Democratic
Institutions in El Salvador: Performance Valuation and Strengthening Plan I and II”,
elaborated jointly between FUSADES and the University of Salamanca, Spain. The
report 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. INDICATORS
2.1. Trust in institutions measured by the Latin-barometer 2011 Report

The Institutionalism component in this section, presents the findings from 2011´s
Latin-barometer Report, presented by the Latin-barometer Corporation3.

Institutions are essential to democracy, because they build the rules to political
competition, resolving collective problems and give structure to the exercise of
power4. On the other hand, trust is essential to institutions, because it is the result
from the perception that citizens have in whether or not the institutions fulfil their
responsibilities, the more trust, the more legitimate and respected they will be, which
in the long run, strengthens the system.

Graphic 1 shows four state institutions and the church. Since 2010, all of these have
increased 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

                                                                                                                    Institutions

Source: 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        Unconstitutionality
Police                   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




                                                                                                                                                                   Country




16                    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                   Commentaries
bservations to the                                                                               1                       Partially
                                                                                                                                                              Reforms to Wages Law next year               1
e 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
                                                                                                                                                                                                           1
e Credit Card System Law.                                                                                                                                                 Burial Authorizations
                                                                                                                                                                                                       0                                                                                                 Table 3. Decr
                                                                                                                                                                 Official Positions Exoneration                  2
                                                                                                                                                                                                       0
 Observations to the 3                                                                                                   Overruled on                                                                      1
position referred to the                                                                                                 12-20-2011’s
                                                                                                                                                        Foreign troops and ships Authorization
                                                                                                                                                                                                       0                                                                                                   Institution
aganda authorization.                                                                                                    Assembly                                       Person Nationalization         0                                                                                                   Transitory d
                                                                                                                                                                                                           1
 Observations to the 4                                                                                                   Partially                                                RIAL reforms         0                                                                                                   Reforms to E
                                                                                                                                                                                                           1
thics Law.                                                                                                               accepted on                                                                           2                                                                                           Audit Court
                                                                                                                                                                          Wages Law next year
                                                                                                                         11-17-2011’s                                                                          2
                                                                                                                                                                                                               2                                                                                           Ministry of E
                                                                                                                         Assembly                                        Budget Law next year
                                                                                                                                                                                                               2
bservations 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 N
34                                                                                                                                                      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                                                                                             31
Honduras
            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 minute's approval and a
                                                                                                                                                                                                                                                                                           modification
                                                                                                                                                      LEGAL AND INSTITUTIONAL SITUATION REPORT                                                                                             Various
                                                                                                                                                                                                                                                                                                                17
                                                                                                                                                                                                                                                                                           Total
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester
Legal and Institutional Situation Report 2011 second semester

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Legal and Institutional Situation Report 2011 second semester

  • 1. LEGAL AND INSTITUTIONAL SITUATION REPORT Salvadoran Economic and Social Development Legal Studies Department Foundation
  • 2. The elaboration of this Report concluded on December 31th, 2011 ISSN 2218-6859 Key title: Informe de coyuntura legal e institucional Abbreviated key title: Inf. coyunt. legal inst. Salvadoran Economic and Social Development Foundation FUSADES A publication of Legal Studies Departament The material in this publication is copyrighted. Copying portions or all of this work without permission may be a violation of applicable law.
  • 3. TABLE OF CONTENTS 1. EXECUTIVE SUMMARY 2. ACRONYMS 3. INTRODUCTION 4. RULE OF LAW AND INSTITUTIONALISM 4.1. Introduction 4.2. Indicators 4.3. Inter-organ relations 4.4. Regulatory Activity 4.5. Law enforcement 4.6. Justice Administration 4.7. Municipalities 4.8. Electoral System 4.9. Conclusions 5. LEGAL CERTAINTY AND PUBLIC SAFETY 5.1. Introduction 5.2. Legal Certainty 5.3. Public Safety 5.4. Conclusions 6. BUSINESS CLIMATE AND REGULATION 6.1. Introduction 6.2. Indicators 6.3. Business Regulation 6.4. State Modernization 6.5. International Regulation 6.6. Conclusions LEGAL AND INSTITUTIONAL SITUATION REPORT 3
  • 4. 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 NOTES 4 LEGAL AND INSTITUTIONAL SITUATION REPORT
  • 5. EXECUTIVE SUMMARY Rule of Law and Institutionalism This semester has been characterized by the adjustment of the Electoral Regulations to the unconstitutionality rulings that have expanded to a certain extent, to the right of suffrage. The first regulations issued by the Parliament in response to these rulings did not respect the interpretation given to the constitutional provisions; therefore, new unconstitutionality actions were filed against these regulatory changes, which ended in a second set of reforms to the Electoral Law, which finally, although with some legal gaps, have guaranteed the right to run as a non-party candidate and to vote for a specific person in the legislative elections. Following on electoral matters, on the other hand, the uncertainty generated by the lack of clarity in the cancelation process for PDC and PCN as political parties, and the unpunished beginning of political campaigns before the legal periods, has been negative. Public opinion has criticized the delay in the election of some public officials such as the Assistant Deputy Prosecutor which was appointed two years after the established date, or the Chiefs of the Government Ethic Tribunal, whom at the closing of this report had two months overdue for their appointment which is against the obligation from the state on compliance to law aspects. Also a decision of Supreme Electoral Tribunal taken without legal quorum is included in these public reactions. Regarding the inter-organ relation and the separation of public powers, it can be highlighted as positive, the eminent derogation of decree 743, a regulation that annulled the functionality of the Constitutional Chamber from the Supreme Court of Justice, by demanding all decisions in unconstitutionality matters were unanimous can be highlighted as positive. A determining factor for the annulment was the participation of civil society that defended the Constitution and became a decisive and important factor 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 and observations; however, the use of these mechanisms has been done with compliance to the Constitution, and so there is no threat or damage against the Rule of Law through this practice. There also haven’t been any systematic confrontations between the 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 relevant to point out the approval of several important laws such as the Multipurpose Port Terminal Specialized in Containers Concession Law, from Puerto de La Unión Centroamericana. LEGAL AND INSTITUTIONAL SITUATION REPORT 5
  • 6. 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
  • 7. EXECUTIVE SUMMARY In the state modernization’s agenda, the approval of the Puerto de La Unión Centroamericana Concession Law and the end of the discussion in the Economic and Social Council of the Public-Private Partnership Law, is noted as possitive because it establishes clear rules and competences defined by the international public purchase of the public infrastructure, expected to be discussed in Parliament next semester. Transparency Advances and setbacks in the state’s transparency agenda have characterized this semester. In the setbacks, the unconsulted creation and issuing made by the Executive body of the Access to Public Information Law Regulation, a text with substantial errors in content that may be considered as unconstitutional, specifically for the faculties self-attributed by the Executive body: rejecting the list of candidates proposed by the civil 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 affect substantially the implementation of this law. These types of attributions are to be regulated exclusively by law in accordance to multiple precedents and rulings from the Constitutional Chamber from the Supreme Court of Justice of El Salvador and international standards. Another negative aspect observed during the semester was the lack of appointment from Parliament of the Government Ethics Tribunal’s President, as well as the Audit Court’s, Public Ministry’s and Executive Body´s omission to appoint the three remaining members of that same institution, being the SCJ the only one to appoint the official in time. At the closing of this report, the institution remains chief-less since November 1st, 2011, and there is no indication of an advance to come to a consensus to elect the members over the basis of adequacy and independence. Within the positive advances projected this semester, is the creation of the new and strengthened Government Ethics Law, since this is a tool that sets to establish formal proceedings of investigation and significant economic sanctions to public servers that violate ethic principles. Also, even if there have been substantial setbacks in the Access to Public Information Law, 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 the fact that a company has been hired to audit the Audit Court. LEGAL AND INSTITUTIONAL SITUATION REPORT 7
  • 8. 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
  • 9. INTRODUCTION The Legal and Institutional Situation Report from 2011’s second semester, 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 methodology is developed from an investigation based in the recollection and monitoring of information from different trustworthy sources, that include external sources such as media news and international indicators, among them: the Doing Business Report from the World Bank, the Economic Freedom Index from the Heritage Foundation, the Global Competitiveness Index from the World Economic Forum, the Rule of Law Index from the World Justice Project, the Corruption Perception Index from International Transparency, the Open Budget Index from the International Budget Partnership, among others, as well as references to FUSADES’ own production sources such as studies, reports and memorandums from other departments like the Legal Studies Bulletin, Institutional Positions, and information from the Judicial and Legislative Observatories, property of the Legal Studies Department. Once obtained, this information is analyzed with the purpose of determining its impact in the semester and compared with the data from the previous semester. The report is structured in four chapters that contain the strategic topics that guide the work from the Legal Studies Department at FUSADES: 1. Rule of Law and Institutionalism, 2. Legal Certainty and Public Safety, 3. Business Climate and Commerce Regulation and 4. Transparency. In the development of each topic, the contents are analyzed systematically, to compare them with the results in the report as well as with previous studies from the Legal Studies Department, such as “Democratic Institutions in El Salvador: Performance Valuation and Strengthening Plan I and II”, elaborated jointly between FUSADES and the University of Salamanca, Spain. The report closes with the most relevant considerations to characterize the period. LEGAL AND INSTITUTIONAL SITUATION REPORT 9
  • 10. 10 LEGAL AND INSTITUTIONAL SITUATION REPORT
  • 11.
  • 12. 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
  • 13. 2. INDICATORS 2.1. Trust in institutions measured by the Latin-barometer 2011 Report The Institutionalism component in this section, presents the findings from 2011´s Latin-barometer Report, presented by the Latin-barometer Corporation3. Institutions are essential to democracy, because they build the rules to political competition, resolving collective problems and give structure to the exercise of power4. On the other hand, trust is essential to institutions, because it is the result from the perception that citizens have in whether or not the institutions fulfil their responsibilities, the more trust, the more legitimate and respected they will be, which in the long run, strengthens the system. Graphic 1 shows four state institutions and the church. Since 2010, all of these have increased 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 Institutions Source: 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
  • 14. 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
  • 15. 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 Unconstitutionality Police 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
  • 16. 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 Country 16 LEGAL AND INSTITUTIONAL SITUATION REPORT
  • 17. 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 Commentaries bservations to the 1 Partially Reforms to Wages Law next year 1 e 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 1 e Credit Card System Law. Burial Authorizations 0 Table 3. Decr Official Positions Exoneration 2 0 Observations to the 3 Overruled on 1 position referred to the 12-20-2011’s Foreign troops and ships Authorization 0 Institution aganda authorization. Assembly Person Nationalization 0 Transitory d 1 Observations to the 4 Partially RIAL reforms 0 Reforms to E 1 thics Law. accepted on 2 Audit Court Wages Law next year 11-17-2011’s 2 2 Ministry of E Assembly Budget Law next year 2 bservations 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 N 34 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 31 Honduras 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 minute's approval and a modification LEGAL AND INSTITUTIONAL SITUATION REPORT Various 17 Total