OHR Mission Implementation Plan 2006-2007 and Work Plan Overview

The Mission Implementation Plan (MIP) sets out the core tasks remaining for OHR.  Introduced in 2003 to focus OHR efforts on outstanding priorities and is updated annually to reflect the progress made by the authorities in BiH. 

The 2006/7 MIP was approved by the Peace Implementation Council ( PIC) on March 15, 2006 in Vienna .  Consistent with efforts to transfer responsibility for running the country to the BiH authorities, no new reforms have been added to the OHR MIP for 2006/7.  However, the MIP has been and remains an important tool for OHR to assess the pace and effectiveness of progress in peace implementation.

A great deal of progress has been made in BiH since the MIP was first introduced.  In the past year alone, BiH began its negotiations with the European Commission for a Stabilisation and Association Agreement ( SAA ) as a result of meeting the requirements of the EU’s Feasibility Study including the introduction of VAT, legislation for a Public Broadcasting System, and acceptance of European standards for policing, among others.  OHR’s MIP contains items on all these Feasibility Study requirements. The establishment of a State-level Ministry of Defence and BiH armed forces is also of great significance and represents a major step towards BiH’s eventual membership of PfP/NATO.

In the next 12 months, presumably its last, OHR’s task is to help BiH build upon the progress achieved thus far. It will increasingly be for BiH, its institutions, politicians, and citizens to take the lead.

OHR's Workplan

The 2006 MIP is integrated as the first point into a wider Work plan for the tenure of the High Representative, which consists of five areas:

1. The MIP itself (see above);
2. Support for SAp: OHR will continue to provide support to the Stabilisation and Association process, as agreed with the European Commission. Many of the critical items are covered in the MIP, but some are not, such as banking supervision reform, regulation of state property, and the State Law on Higher Education;
3. Coordinating the International Community and Ongoing Assistance: The OHR has a key role to play as coordinator of civilian peace implementation. The IC is committed to working together to assist BiH in its efforts to progress towards Euro-Atlantic integration. This also refers to a number of areas in which legislation has been enacted and MIP items fulfilled, but where on-going assistance to the BiH authorities remains crucial, e.g. defence reform and refugee returns;
4. Preparing for OHR/EUSR transition;
5. Promoting BiH, in particular its economic potential. 

2006-2007 Mission Implementation Plan

Thirty-one items from the 2005 MIP remain to be completed. These cover a wide range of issues: intelligence reform; police restructuring; key economic reforms including internal debt settlement, direct tax legislation and a state law on obligations; municipal reform; public administration reform; Brcko District and public broadcasting reform. The document that follows lists all of these, grouped according to three Core Tasks.  It also lists the achievements of OHR in the past four years.

While no new issues have been added to the 2006-2007 MIP, a number of changes have been made to reflect progress made and/or different circumstances since the document was first drafted. The most notable proposed change to the MIP has been a revision of the items covering police restructuring, an ongoing process that will certainly extend through next year and into 2008, beyond the lifespan of OHR.  It will be one of the most important issues for the EUSR Office, and others to tackle.

BiH has made great strides since the war, and is nearing the point where the international community can comfortably step back and change the way it assists the country to achieve full Euro-Atlantic integration. 

MISSION IMPLEMENTATION PLAN 2006-2007

The rule of law and equality before the law are prerequisites to the establishment of a viable democratic state. Without the rule of law, Bosnia & Herzegovina cannot survive as a state, let alone integrate into Europe. The rule of law requires the application of a modern legal code and criminal procedures that protect the rights of the innocent while facilitating the pursuit of the guilty. It requires qualified judges and prosecutors who are independent. It requires skilled and dedicated police. It requires a well-trained legal profession that maintains high standards of professional conduct and integrity. All these players must be adequately equipped with laws, regulations and other tools – as well as properly funded – if they are to do their jobs. Every citizen must have equal access to a fair and unbiased justice system, and one in which the decisions of the courts are recognised and enforced throughout BiH. Peace will not be secure if extreme nationalists, including indicted war criminals and their helpmates in the ranks of organised crime, retain sufficient influence to destroy it. The grip of organised crime and political extremism on wide swathes of the economy and administration in BiH must be broken through consistent application of the rule of law. The continuum from investigation to incarceration needs to be credible and visible if the threats posed by politicised criminal networks are not to undermine BiH’s stability and preclude it from becoming a reliable partner in the global fight against both terrorism and organised crime.

1.7 Programme:  Reshape BiH Criminal Law Enforcement Landscape

a. Description:  By expanding State competency and capability through SIPA, and achieving the legal restructuring and downsizing of entity forces into local community police, BiH will have a coherent criminal law enforcement structure capable of addressing the domestic and international threats of organized crime, international terrorism, and illegal migration.

b. Transition Point:  State-level BiH authorities are investigating and prosecuting violators of state crimes and performing effectively in regional and international efforts to combat organised crime, international terrorism and illegal migration.

Economic wellbeing both creates and reinforces political stability. To be stable and secure as a state, BiH needs an economy that promotes legitimate enterprise within its borders, attracts direct investment from without, and progressively raises the living standards of its citizens. Substantial free market reform is required. BiH must consolidate the establishment of a single domestic market, do away with needless bureaucratic barriers, tackle its internal debt, and put a business-friendly tax regime in place if its citizens are eventually to prosper.  More immediately, the country needs to undertake the rapid fiscal, trade, budgetary, and statistical reforms required by the European Union’s Stabilisation and Association Process (SAP).

2.1 Programme:  Create a business environment capable of attracting investment and generating jobs

a. Description:  A package of measures needs to be implemented to attract investment and support private enterprise (especially small and medium-sized enterprises).  This package consists of the adoption and implementation of a set of new laws, in particular commercial laws, which meet the requirements of businesses in a modern market economy. Furthermore, the measures are designed to remove barriers to business through the locally led Bulldozer Initiative, reform the land ownership registry to promote confidence in ownership, and revitalise the privatisation process.

b. Transition Point:  Legal barriers to the flow of goods, capital, labour, and services between the Entities have been removed, while investment, commerce, small business generation, and job creation are increasing.

2.2 Programme: Tax Reform – customs reform and indirect tax reform (e.g., repeal of sales taxes and introduction of State-level VAT and direct [profit] tax reform)

a. Description: The indirect tax system inside BiH requires major reform. The tax rates and structures must be the same legally and equally enforced and applied across the whole of BiH, regardless of Entity of location. Fiscal co-ordination and planning between the Entity and State governments must be significantly strengthened so that those who take decisions on the spending of public revenues work directly with those who set tax and customs rates.

The Indirect Taxation Authority (ITA) will become the single State-level Customs Administration and will also become the agency responsible for the introduction and implementation of Value Added Tax (VAT). The Governing Board of the ITA will be the sole responsible body in BiH for setting and making indirect taxation policy (including customs).

The current direct taxation system means that, for profit tax purposes, companies that do business in both Entities must operate and conduct tax planning as though they were operating in two different countries (three if the Brcko District is taken into account).  This is not consistent with the goal of achieving a single economic space.  Continuing with this type of existing profit tax system places businesses and companies at a major disadvantage to all the other countries in the region and provides a major disincentive to investors. Reform of direct tax is central to stimulating investment and promoting privatisation. It also represents a major step in building a single economic space in BiH.

b. Transition Point: Full development of the ITA after implementation of the reorganisation plan and the successful introduction of VAT.  Indirect tax policy is made at the State level through the Governing Board, and indirect tax collection, administration and implementation are successfully carried out by the ITA.

The profit tax system for companies operating inside BiH is the same across BiH.  Companies are only required to report their entire profit tax liability to one administration, once in each fiscal/calendar year.

2.3 Programme:  Internal debt resolution

a. Description: Internal debt emerged as a significant threat to BiH’s economic stability and sustainability.  Its main components include frozen foreign currency deposits; claims on material and non-material damage that Entity governments acknowledged as legitimate; and budgetary arrears for the period from 1996 until the end of 2002.  These claims are estimated at KM 8.4 billion (approximately €4 billion), a level that Bosnia ’s economy cannot sustain along with its foreign debt of KM 4.4 billion.

b. Transition Point: Adoption and initial implementation of legislation regulating internal debt.

2.4 Programme: Public utilities

a. Description: Public utilities that provide affordable services of a high standard are a precondition for sustainable economic growth and a requirement for serious consideration of investment by foreign or domestic firms and entrepreneurs.  The focus must be on restructuring to improve competitiveness and efficiency and to exploit fully BiH’s favourable situation in the electricity sector, allowing for modernisation and expansion of infrastructures through private finance.

b. Transition Point: Basic elements of sector restructuring have been achieved and the current market fragmentation is significantly reduced.

A sustainable BiH must have institutions capable of meeting the country’s domestic and international obligations, including the requirements of the SAP , NATO’s PfP, and the Dayton-Paris Peace Accords.  The authorities in BiH now have a legal and institutional framework through which to deliver on Annex VII of the latter.  They must take the lead in assuring that all refugees and displaced persons who seek to return to their pre-war homes are able to do so. 

BiH likewise requires administrations that work effectively to deliver the services that taxpayers expect and citizens deserve.  To achieve this, central institutions need to function as such.  In particular, the Council of Ministers (CoM) must increase its capacity and improve its effectiveness.  Weak institutions and multiple layers of government have served in the past to blur lines of official responsibility, inhibit accountability, and undermine the state’s capacity to combat crime.  The deficiencies identified by the EC Feasibility Study need to be corrected, not least by integrating and streamlining all levels of government, including the city of Mostar.  The aim must be to put in place an affordable, effective and professional public administration – and one which is efficient, honest, and secure – to interface with the public when issuing identity documents, licences, and the like.  Toward this end, an Intergovernmental Task Force on Public Administration Reform (IGTF) was set up through the PIC in March 2003, taking over work begun by the Institution Building Task Force (IBTF) established a year before and formally discontinued in early 2004.

3.1 Programme: Reform of the Council of Ministers (CoM)

a. Description: The CoM needs to develop the capacity to fulfil its responsibilities and to enable BiH to proceed within the EU’s SAP, a pre-requisite for which is an effective interlocutor for EU institutions at State level.  Substantive reform, including an end to rotation of office and a professional secretariat and policy planning staff to support the Chair, are crucial to ensuring enhanced capacities and an effective CoM.

b. Transition Point: The CoM has essential ministries, is formulating government policy, and is supported by an integrated, civil service-based secretariat.

3.2 Programme:  Accountability of elected officials

a. Description: High standards must prevail in public life.  A mechanism must be put into operation that ensures parliamentarians respect conflict of interest standards and a code of ethics.  Standards for immunity of elected officials are required that prevent rather than promote abuse of public office.  Audit agencies should be fully enabled to exercise their watchdog functions.

b. Transition Point: A functioning domestic system ensuring that elected officials are held accountable for abuse of office.

3.3 Programme:  Reform of public administration

a. Description: Public administration in BiH must be streamlined to affordable levels in line with a comprehensive national strategy.  Civil service laws need to be implemented to promote apolitical, merit-based appointments and promotions, as well as to prevent politically motivated dismissals.  Professional standards need to be developed and enforced to ensure that institutions function efficiently, openly and accountably.

b. Transition Point: Civil service agencies are functioning effectively at state and entity levels.  Public administration is beginning to be streamlined to affordable European levels and is progressively applying professional administrative practices.

3.4 Programme:  Consolidating the self-governing status of Brcko District

a. Description: Implementation of the Dayton International Arbitral Tribunal Awards for Brcko can be considered complete when the Supervisor can report to the Tribunal, with the approval of the High Representative, that: (1) the District’s multiethnic institutions of democratic self-government are working both “effectively and apparently permanently” without challenge by the Entities; (2) that the IEBL is no longer of significance in the District; (3) that the District’s economic revitalisation is self-sustaining; and (4) that the Entities and BiH State-level institutions have demonstrated both willingness to accept the self-governing status of Brcko District as defined in the Arbitral Awards and capacity to cooperate with the District to solidify its status as a permanent unit of self-governance under the sovereignty of BiH.

The fourth goal can perhaps be most effectively achieved, first, by State-level legislation that confirms Entity and State acceptance that the Brcko International Arbitral Awards are an integral part of the Dayton Peace Accords and are binding on all parties; and, secondly, by the establishment of appropriate mechanisms for Brcko District to be effectively represented in BiH institutions.  Ways and means of achieving this goal should be considered carefully and expeditiously.  In mid-2005, we should assess progress on these fundamental requirements and prospects for achieving full implementation of the Arbitral Awards by the end of 2005.

b. Transition Point:  Before concluding the mandate of the Brcko Supervisor and ending the supervisory regime, the Supervisor, with the approval of the High Representative, must report to the Arbitral Tribunal that the Awards have been fully implemented.  Many of the Award’s specific requirements, such as refugee return, property restitution, repair of infrastructure, establishment of executive and legislative bodies, an independent judiciary and police, a multiethnic school system, and holding elections have been implemented in the District.  Sustainable economic revitalization, completing the reform and harmonization of legislation within the District and thus abolishing the IEBL, ensuring that the District’s multiethnic and democratic institutions of government are “functioning effectively and permanently” and that the Entities as well as BiH institutions fully accept the District’s status as a self-governing unit of administration remain to be completed.  The Supervisor must be confident that District and State institutions can ensure the viability of the District’s self-governing status and its ability to resolve any future conflicts or contentious issues in a way that respects the status of the District under the Final Award.  This process would be greatly facilitated and expedited to the extent that Entity and BiH institutions accept and respect the Brcko Final Award as part of the structure of rule of law in BiH.

3.7  Programme: Municipal reform

a. Description:  As part of the process to reform public administration and to improve local self-governance and the cost-efficiency of public services, municipal reform is essential.  It will enhance the ability of local authorities to regulate and manage a substantial share of public affairs under their own responsibility and, in the interests of the local population, to deliver basic public services closest to the citizen in an effective manner and in line with available resources.

b. Transition Point:  State and Entity legislation is harmonised with the European Charter on Local Self Government.  Funding and responsibilities of municipalities have been harmonised.  All layers of government in BiH are cooperating on issues of local self-government and key sectoral legislation is in place that strengthens service delivery at the level of government closest to citizens – the municipal level. 

3.9 Programme:  Reform of the Public Broadcasting System

a. Description:  The objective standing before the BiH authorities is to build a genuinely public, professional, financially sustainable and politically independent public broadcasting system of BiH. To meet this objective, the BiH authorities will need to adopt new legislation that ensures the establishment of a functional, properly regulated system, made up of three broadcasters and shared infrastructure. Progress in this sector is an integral element of BiH’s progress within the EU’s Stabilisation and Association process.  OHR shall carry out its activities in close cooperation with the EC, in support of the EC Feasibility Study action items.

b.  Transition Point: PBS established as a viable, financially and editorially independent public broadcasting system. In practise this will mean the new laws on the public broadcasting system are in place, are being implemented in particular with regard to governance and funding mechanisms, and the initial phase of costs cutting and elimination of duplication is complete. 

3.10 Programme:  Intelligence Reform: Establishing the Intelligence and Security Agency

a. Description:  Establishing a single, reformed, efficient and non-political State-level intelligence agency (OSA) in place of the existing Entity-based intelligence services.

b. Transition Point:  OSA is gathering and disseminating reliable intelligence on threats to the security of BiH and the wider region, including sharing intelligence with law enforcement agencies and intelligence partners on organised crime, international terrorism and illegal migration.

1.1 Programme: Reform key laws, regulations, and measures

√     Support continued drafting of minor offence procedure laws in both Entities, dependent on the recommendations from Minor Offence Restructuring Project expected in January 2004.

1.2  Programme:  Development of an Independent and Effective Judicial and Prosecutorial Service

√     Ensure office location, staffing, and funding single HJPC, including selection of initial members and training.

1.3  Programme:  Build State-level Criminal Justice Institutions

√     Oversee implementation of a Witness Protection Program, including adoption of law and recruitment, staffing, and operation of program.

√     Coordinate institution building of bodies responsible for prevention of money laundering, with emphasis on the Financial Intelligence Unit.

√     Strengthen the capacity of the Special Organized Crime, Economic Crime, and Corruption Panels and Department in the Court and Prosecutor’s Office of BiH by recruiting additional international judges and prosecutors and support staff as required.

1.4  Programme:  Restructuring of Courts and Prosecutors Offices

√     Ensure Law on Courts in both Entities and possible repeal of cantonal laws on courts enacted.

√     Continue political interventions, particularly in the RS, to secure the identification and legal transfer of buildings for use by the Prosecutor’s Offices.  Following the allocation of international funds to renovation projects, identify funding gaps for the remaining renovation projects and present these to the national authorities for implementation.

1.5  Programme:  Anti-crime and Corruption Assistance 

√     Strengthen the contacts both regionally and internationally (between institutions such as SEEPAG, EUROJUST, and other EU frameworks and organisations, Interpol, SECI Anti-Crime Centre and SIPA) in the field of international legal assistance and both prosecutorial and law enforcement inter-agency cooperation with those states most affected or related to criminal networks and terrorism networks in BiH.

√     Maintain continued ACCU oversight of strategic cases with appropriate resources, working toward a complete graduated handover of casework to State Prosecutor’s Office.

√     Ongoing assistance to local and international bodies, in particular ICTY, engaged in bringing ICTY indictees to justice.

√     Ensure complete responsibility for hand-over of strategic cases to State Prosecutor’s Office, or the appropriate prosecutor’s office as determined by law.

√     Complete the handover of all IC investigative oversight responsibilities to EUPM.

2.1 Programme:  Create a Business Environment Capable of Attracting Investment and Generating Jobs

√     Facilitate adoption of RS and FBiH Law on Public Enterprises.

√     Promote adoption of Entity Laws on Investment of Public Funds.

√     Promote adoption of State Insurance Laws and harmonised entity laws.

√     Promote establishment of separate BiH institutes for Standards, Metrology, and Intellectual Property.

√     Ongoing facilitation of the implementation of the Law on Statistics to establish a single and efficient BiH statistics service in accordance with international standards that meets the statistics needs of the state and entities.

√     Coordinate establishment of BiH Agency for Plant Health Protection by providing assistance to MOFTER and Phytosanitary Commission.

√     Facilitate the adoption and the implementation of new Business Registration Laws.

√     Ongoing monitoring of implementation of the Law on Public Procurement.

2.2 Programme:  Tax Reform: Customs Reform and Indirect Tax Reform (e.g., repeal of sales taxes and introduction of State Level VAT and Direct [profit] tax reform)

√     Assist Governing Board to draft the following draft laws: Law on the single account and payment method into the single account; Law on the allocation and distribution of indirect revenues; Revised Customs Policy Laws; and Rights and duties of employees of the ITA.

√     Lobby for the adoption of the Law on the single account and payment method into the single account, Law on the allocation and distribution of indirect revenues, revised customs policy Law, and Law on rights and duties of employees of the ITA.

√     Facilitate and lobby for the adoption and preparation for implementation of all relevant VAT legislation.

2.4 Programme:  Public Utilities

√     Facilitate completion of energy sector reform through support of the unbundling process.

3.1 Programme:  Reform of the Council of Ministers (CoM)

√     Culmination of lobbying for the establishment of all BiH institutions as required according to Feasibility Study Report.

√     Lobby for the recruitment and review of civil servants to staff new Ministries and restructured CoM Secretariat positions.

3.2 Programme:  Accountability of Elected Officials

√     Encourage, as a member of the Election Commission, appropriate restructuring of the Election Commission to allow for effective and timely implementation of the Conflict of Interest Law, especially the investigative function.

√     Ongoing identification outstanding impediments to compliance with decisions of the Election Commission and parliaments, and ongoing lobbying of government to create the necessary conditions to ensure compliance. 

√     Conclude OHR’s membership of the BiH Election Commission.

3.3 Programme:  Reform of Public Administration

√     Ensure timely implementation (establishment of internal structures, adoption of by-laws and recruitment of staff in accordance with the law)of the existing civil service legislation.

√     Oversee the drafting and adoption of a Federation Law on Administration.  

√     Oversee the establishment of the Federation Civil Service Agency.

3.4 Programme:  Consolidating the Self-governing Status of the Brcko

√    Assist the District Election Commission to develop additional codes of conduct for elected officials in Brcko District.

√    Privatise the majority of strategic companiesand, as Supervisor, hand over responsibility over privatisation of enterprises under the Final Award to the District.

√   Delegate authority over privatisation of apartments under the Final Award to   the District Government.

√   Assist the Brcko District institutions get technical assistance needed to develop the capacity of the District Government and Assembly to review, draft and harmonize legislation.

√   Monitor transits of Entities’ military forces through the District until such time as the State-level MoD assumes full control over Entity components of the Armed Forces of BiH.

√   Monitor the integration of the District in the process of BiH tax reform.

3.5 Programme:  Promoting Regional Stability and Co-operation

√   Monitor the transfer of the BiH State Border Commission’s mandate to the competent BiH institution(s).

3.6 Programme:  Reform of Mostar

√  Assist and oversee to complete the implementation by the City and city-municipal authorities of all steps necessary to facilitate the establishment of the new City authorities and administration following the 5 October elections.

√  Ongoing monitoring and assistance to establish the Administration of the City of Mostar.

3.7 Programme:  Municipal Reform

√   Lobby for adoption of legislation regulating the use of construction land, concessions, and other related issues at municipal level.

3.8 Programme:  Refugee Return

√   Continue to intervene to facilitate enforcement of the New Strategic Direction on Property Repossession Laws, as necessary, to expedite non-discriminatory resolution of claims.

√   Monitor and confirm the final PLIP completion and certification of all municipalities and, if necessary, coordinate IC intervention.

√   Monitor legislation relating to return issues.

3.9 Programme:  Reform of the Public Broadcasting System

√  Provide advice, as required, on amendments to the draft PBS legislation.