OFFICE OF THE HIGH REPRESENTATIVE

EUROPEAN UNION SPECIAL REPRESENTATIVE FOR BIH

 Report to the European Parliament

 July – December 2001

The Work of the Office of the High Representative for Bosnia and Herzegovina, July-December 2001.

 End of year 2001 report for the European Parliament

Introduction

During the second half of 2001, the Office of the High Representative (OHR) continued its efforts to oversee the implementation of the civilian aspects of the 1995 Peace Agreement. This report covers highlights of OHR’s activities and key developments in BiH from July through December 2001.

During this period, the High Representative (HR) continued his work on the acceleration of peace implementation in the three key strategic areas identified by the Peace Implementation Council (PIC) in May 2000. These were: consolidation of the State institutions, economic reform, and refugee return. At the request of the EU General Affairs Council and as directed by the PIC Steering Board, OHR also began work on a plan to streamline the work of the civilian International Organizations (IOs) working in BiH. It is based on four Task Forces (on Economic Policy, Reconstruction and Return, Institution Building and Rule of Law). At the top of the structure there is Cabinet -chaired by the HR- that includes the main 10s.

European support, both bilaterally and through the EU, was essential to OHR’s work, especially in areas such as media reform, election law implementation, and judicial reform, and development of options for the follow-on police mission.

POLITICAL ISSUES

During the reporting period, efforts of the reform-oriented Alliance for Change to strengthen State institutions and structures provoked tensions with both Serb and Croat nationalist parties. However, the IC made progress in its efforts to deepen the partnership between domestic authorities, particularly the State institutions, and the IC. The most visible manifestation of that partnership was the creation of the Consultative Partnership Forum, which held its first meeting on 2 August 2001 and met twice more before the end of the year. Also, in recognition of the fact that civil society in BiH needs strengthening, HR held three sessions of the Civic Forum in Sarajevo and Banja Luka during the reporting period.

State level. The tragic events of 11 September in the US !eft their imprint on domestic affairs in BiH, particularly at the State level. Circumstances served to highlight the need for close cooperation and partnership between BiH and the International Community (IC). BiH authorities worked to establish the Coordination Team in the Fight Against Terrorism, review citizenship cases, develop a badly-needed package of anti-terrorism legislation, and pass the five pieces of framework legislation for the Citizens Identification Protection System (CIPS).

The BiH Parliamentary Assembly’s 23 August 2001 passage of the Election Law represented a major step forward for the country. It was the first major piece of legislation adopted after real political compromise by Bosnian politicians themselves and meets a major requirement of the EU Road Map. Unfortunately, implementation has been slow. In an effort to increase the pace of preparation for the general elections scheduled for 5 October 2002, as stipulated in the Election Law, HR appointed the three international members of the Election Commission on 27 September, followed by the four national members on 16 November.

Following the May 2001 adoption of the BiH Defence Policy, efforts continued to ensure that it is implemented, especially in terms of enhancing and developing the State level structures and procedures. OHR is also closely involved in working with the Standing Committee on Military Matters (SCMM) and its Secretariat to facilitate the development of the defence portion of the BiH Security Policy.

A number of high-level exchanges between BiH and its neighbours (the Croatian and Yugoslav Presidents, as well as parliamentary delegations from Croatia and the Federal Republic of Yugoslavia ­or FRY-) testified to the normalization of relations within the region. Most significantly, after nearly ten years of diplomatic blackout, BiH and the FRY exchanged Ambassadors in November 2001.

Entities and Brcko

By the end of 2001, implementation of the BiH Constitutional Court’s Constituent Peoples’ Decision was in a crucial phase. The establishment of fair representation of all constituent peoples in all public institutions, the definition of vital interest, and the vital interest protection mechanism were, and continue to be, the key questions in this process. This issue, which remained unresolved at the time of writing, influenced political developments in both Entities during and after the reporting period.

Federation At its 5 October Congress, HDZ, the main Croat nationalist party, reaffirmed its commitment to hard-line leadership. Ante Jelavic, whom HR had removed as President of the Party in March 2001 due to his participation in the Croat Self-Rule project, was re-elected to his position by acclamation. Nonetheless, developments including the imposition of a Provisional Administrator in Hercegovacka Banka, the loss of political support from Croatia, and the Alliance efforts to dismantle parallel institutions as much as possible contributed to a reduction in tensions over the Croat issue during the reporting period. Other events, such as the unification of the Federation Pension Fund, point to a slow but steady improvement in Croat/Bosniak relations in the Federation.

Republika Srpska (RS) The economic situation in the RS remained gloomy and ordinary people began to make their discontent known to the government during the reporting period. One party (DNS) left the coalition government, and the SDS and SPRS placed Prime Minister Ivanic in an awkward position by publicly distancing themselves and making future support conditional on economic improvements.

At the same time, the RS government has taken little action on the reconciliation process. The Reconciliation and Reform Committee, established after unrest in Banja Luka and Trebinje in May, has met only once. Although all internal preconditions were met by the passing of the RS Law on Cooperation with ICTY in September, the RS authorities themselves have apprehended not a single war criminal. RS deputies in the State PA also continued to obstruct important legislation, including the State Budget and the De-mining Law.

As part of ongoing efforts to ensure reconciliation and encourage return, a marker stone for the future memorial commemorating victims of the 1995 Srebrenica massacre was unveiled.

During the reporting period, OHR was actively engaged in the process of re-drafting annexes to the Special Parallel Relations Agreement between RS and FRY, in order to ensure that they fit BiH Constitution and the overall sustainability of the country.

Brcko District The reorganization of the Brcko District from the three post-war municipalities was completed by the end of 2001 with the hiring/rehiring of public employees in an open and competitive process. Unlike its Entity counterparts, the District Assembly passed its budget on 29 December, prior to the beginning of the fiscal year. Although the Entities and the State have maintained a cooperative attitude toward the District, there have been some tensions over issues such as privatisation, taxation, and customs policy.

ECONOMIC ISSUES

The BiH economy continued to expand at a moderate pace in the second half of 2001, remaining in the range of last year’s increase of 5%. The pace of economic revitalization, particularly in the RS, remains slow and unemployment is alarming (around 40%, according to official statistics). For the Entities, revenue collection in the latter part of 2001 improved, but fiscal balance remains precarious and highlights the need for improved tax policy and administration.

The prospect of EU accession remains a key driving force for BiH economic policy and reform efforts, and some progress has been made on the completion of Road Map requirements. One Law, the Law on

Competition, has entered into force. Others, including the laws on consumer protection, industrial ownership, and copyrights, were awaiting parliamentary approval at the end of the reporting period.

Broadcasting in BiH is an economic/commercial issue that also has important State-building implications. On 26 October 2001, the new Federation TV service was launched. Significant measures have been taken by the management to improve the signal coverage and develop the Croat component of this new service. Furthermore, the top managers for the State-level Public Broadcasting Service were appointed during the reporting period and OHR’s Media Development Department is working closely with them to create a financially viable and journalistically professional public broadcasting service for all of BiH.

RETURNS

In 2001, 92, 061 “minority” returns were registered with UNHCR. This is a substantial increase over 2000, which was deemed a breakthrough year but saw only 67, 445 people returning to their pre-war homes in areas controlled by another ethnic group. However, obstacles stemming from the failure of many local authorities to take full ownership of the process, as well as lack of funding for reconstruction, are still slowing down returns. OHR and UNHCR are working to support and facilitate inter-State agreements on refugee, DP, and return issues, and are also supporting the State’s efforts to facilitate an inter-Entity agreement.

As part of the efforts to create a sustainable environment for returns, on 17 July 2001, HR imposed harmonizing amendments to both Entity Laws on Privatisation of Socially Owned Apartments. These were followed, on 4 December, by thirteen Decisions comprehensively amending the property laws of both Entities, along with an Instruction on the purchase of apartments in the Federation. These changes reduce the possibility of manipulation and delay and allow for the speedier eviction of multiple occupants.

Some 25,000 Croatian Serbs in the western RS are still awaiting resolution of their status, creating a serious obstacle to Croat and Bosniac return to RS. OHR is working to improve the overall environment for property repossession in BiH, to increase cooperation and dialogue between FRY, BiH and Croatia on these matters. The Stability Pact’s adoption of an Agenda for Regional Action under its Regional Return Initiative will facilitate these efforts.

BiH AND EUROPE

The continued inability of the BiH PA to pass important legislation meant that the pace of the European integration process remained disappointing during the period under review. Although the August adoption of the Election Law fulfilled the most important criteria for admission to the Council of Europe (and the Parliamentary Assembly of the Council of Europe recommended BiH for membership on 22 January 2002), most RM conditions are still outstanding.

The Stability Pact provided a useful forum for regional collaboration, and BiH participated in the Second Regional Conference in Bucharest on 25-26 October. The country is expected to benefit directly from Euro 300 million of the Euro 2.4 billion worth of projects approved in principle at the Conference. BiH held the co-chairmanship of Working Table II for the second half of 2001.

At its 6 December 2001 meeting, the PIC Steering Board instructed OHR to develop options for the police mission that will take over from UNMiBH/IPTF when its mandate expires at the end of 2002. EU experts have been working closely with those of the OHR and OSCE on this issue.