Entrepreneurs to government: The state is behaving in bad faith towards business partners

The Estonian Chamber of Commerce and Industry and the Estonian Employers' Confederation turned to the government with indignation, as the trust of entrepreneurs in the government is decreasing, as the promises made by the state are often not fulfilled or turn out to be fictitious.

Entrepreneurs are concerned that recently there have been cases where the government of the Republic and various public sector organizations have not acted in accordance with the principle of good faith towards entrepreneurs. Such cases include, for example, failure to make price changes in government procurements in conditions of exceptional inflation, as well as related to the construction of an LNG berth. As a result of this behaviour, the understanding is spreading in the business community that the promises made by the state are not fulfilled, and this reduces the confidence of entrepreneurs in the state.

Mait Palts, Director General of the Estonian Chamber of Commerce and Industry, said that in a situation of unforeseen high price increases, the state seems to have taken the position that all extraordinary expenses must be covered by the entrepreneur. This is despite the fact that the law allows entrepreneurs to respond and everyone seems to understand the need for it, but real actions are not reached. "The question arises as to why an entrepreneur should take the risk of cooperating with a partner who, by ordering long-term and large-scale works or services, refuses to share the risks in an emergency situation?" and added that it is not a question of the profits of the entrepreneurs, but of ensuring that the work is done and that the companies have a chance to survive. Paradoxically, there is much more understanding of the situation in the private sector today, because both sides understand the seriousness of the situation and want to reach a solution, unfortunately, in most cases this cannot be said about the public sector.

The head of the Estonian Employers' Confederation Arto Aas pointed out that the energy of entrepreneurs is currently spent on several crises at once. "There is uncertainty about the autumn-winter period, preparations are being made for the cooling of the economy and in some sectors also for a crisis," Aas explained. "In such circumstances, stability is especially important, keeping the agreements made and not creating new crises ourselves." The rapid rise in prices also hurts, for example, public transport companies, which also expect reliable and reasonable behaviour from the state as a partner.

In their appeal, the organizations point out that as a result of the state's bad faith behaviour in procurement, a situation may arise where existing procurement contracts are cancelled as a result of companies not agreeing to a price increase proposal, and new contracts are significantly more expensive than, for example, changing old contracts. There is also a risk that some companies will go bankrupt and competition in certain sectors will decrease, which in turn will have a negative impact on the state regarding the prices of future procurement contracts.

Another example where, according to organizations, the state has not acted in accordance with the principle of good faith is related to the construction of the LNG berth. With this final solution, private companies' trust in the state has decreased, but in addition, Estonia's energy security in general is also at risk.