In the reporting period, my priority has been to accelerate peace implementation in the three key strategic areas identified by the Peace Implementation Council (PIC) in May 2000: economic reform, refugee return and the consolidation of the State institutions. Special attention has been directed at tackling the Croat nationalist challenge to the constitutional order and to the worrying situation in RS, as well as at the implementation of the crucial decision of the BiH Constitutional Court commonly known as the "Constituent Peoples Case".

1. The new non-nationalistic authorities at the State and Federation level, as well as the IC, faced serious challenges from the forces that dominated BiH life in the last 10 years:

1. On 5 March RS and FRY signed an agreement on Special Parallel Relations (SPR), as provided for in the General Framework Agreement for Peace (GFAP). I ensured that the agreement’s text and spirit fully respect BiH’s sovereignty and territorial integrity. My Office has a supervisory role in the agreement’s implementation and will be involved in the drafting of its annexes
2. The Communications Regulatory Agency (CRA) –merging IMC and TRA- started to work in March. The CRA is a state-level regulator for the media and the telecommunications sectors.
3. The Independent Judicial Commission (IJC) - successor to UNMIBH's JSAP and tasked with overseeing reform of the BiH judiciary – had significantly increased its staffing by the end of April, including deployment of its field teams.
4. Following my Decision in February imposing binding arbitration over the delineation of the Inter Entity Boundary Line (IEBL) in Dobrinja (a Sarajevo suburb), the special Arbitrator issued his Award on 24 April. Its implementation has been carried out satisfactorily.
5. On 7 May Radio PBS (Public Broadcasting Service) started broadcasts for the whole of BiH. For the first time since the disintegration of the former Yugoslavia, BiH has a statewide broadcasting capability
6. Following the BiH Constitutional Court’s decision on the "Constituent Peoples Case", the process of constitutional reform progressed steadily in both Entities. These constitutional changes will have a decisive impact on the future outlook of BiH’s social and political life.
7. Under my separate mandate for the succession of the Socialist Federal Republic of Yugoslavia (SFRY), I mediated the final round of the negotiations in Vienna, together with the Special Negotiator, Sir Arthur Watts. On 25 May, the five successor states initialed an agreement that provided for the distribution of its rights, obligations, assets and liabilities.

1. State Institutions

1. On 27 March the BiH House of Representatives (HoR) elected Beriz Belkic (SBiH) and Jozo Krizanovic (SDP) as the Bosniak and Croat members of the BiH Presidency respectively. The House of Peoples (HoP) confirmed this election on 30 March.
2. Following its formation on 22 February, the new CoM, under the chairmanship of Mr. Bozidar Matic, began working in an efficient manner. The CoM adopted its Work Programme in March and has made some progress in its implementation since. However, legislative activities and the implementation process are regularly challenged and obstructed by RS authorities, on the grounds that the CoM’s legislative agenda invades the RS competencies. I have demanded the RS authorities to clarify their objections constructively and cooperate with CoM, for the benefit of RS’s viability and BiH’s normalization, especially in view of its participation in the European integration processes.
3. In order to ensure the effective functioning of the State institutions, the new State authorities and my Office have started investigating various other means of financing the State Budget, as it is currently almost entirely dependent on contributions from the Entities. We expect to find independent sources of income for the State in the nearby future, and will work to this end in close cooperation with local authorities and international financial institutions.

4. Progress in the BiH Parliamentary Assembly, however, has been less satisfactory. The Alliance, a fragile coalition with a very tight majority of 22 out of 42 delegates in the HoR, is proving increasingly difficult to hold together. The BiH Parliamentary Assembly has not passed any new legislation of major importance to date. One positive development is that the HDZ delegates in the HoR, after a boycott of State institutions that lasted several months, are pursuing their goals from their elected seats once again. They have been especially active during the debate over the BiH’s Election Law.

   2. The Entities and Brcko

   a) Republika Srpska (RS)

5. Since February, several positive developments have occurred in the RS. Prime Minister Ivanic managed to stabilize the social-economic situation, by increasing the efficiency of tax collection and, to some degree, improving fiscal discipline. Important progress on constitutional changes was made in April as the re-shaped Constitutional Commission agreed on draft amendments to the RS Constitution.
6. On the negative side, the effort to reconstruct religious sites demolished during the last war was set back when mosque cornerstone laying ceremonies in Trebinje and Banja Luka were disrupted in May by violent protests (which resulted in one death and several injuries) and had to be postponed. Following these events, my goal has been to ensure that the RS handles the fallout from these crises in a robust and comprehensive manner. I immediately demanded an investigation into the violence; immediate changes of leadership in the Ministry of Interior; public condemnation and an apology by top RS officials; repetition of the ceremonies and the establishment of a multi-ethnic Reform and Reconciliation Committee under the auspices of the RS President. Even though they have complied with most of these demands, I am following closely the RS authorities’ performance on all these issues.
7. The agreement on SPR between RS and the Federal Republic of Yugoslavia (FRY) was signed on 5 March and ratified on 7 June. Although the concept of "special" relations between an Entity and a neighboring country is an outdated concept, such an agreement is a right of the Entities, in conformity with the GFAP. The strong reference to the GFAP and to the BiH Constitution in the preamble of the agreement is the basis for subsequent annexes, which will elaborate the scope of the co-operation.
8. Some Bosniac and Croat members of the RS Constitutional Commission opposed the ratification of the agreement on SPR claiming that it violated their vital national interest. In their opinion, an agreement between BiH and FRY was required and not one between the RS and FRY, which –they believed- violates the BiH Constitution. In my official response to their claim, I stated that the contents of the agreement did not violate their national interests and that it was in complete conformity with the BiH Constitution.
9. In the text of the agreement, my Office has been guaranteed a supervisory/ monitoring role and will be involved in the drafting of the annexes. However, I attach crucial importance to more intensive state-to-state relations. Some of the problems which are important for the RS and its residents can only be solved at the State level (citizenship, border regime, etc) and not at the Entity level.

   b) Federation

10. Nearly four months after the November 2000 elections, the Federation of BiH got its first non-nationalist government on 12 March. It was formed by the "Alliance for Changes". However, this new Government was challenged by the HDZ leadership and the so-called ‘Croat National Assembly (HNS),’ which on 3 March voted to establish an unconstitutional ‘Croat self-rule in BiH’. In late March HDZ radicals in Mostar moved to oust that city's Mayor, Mr. Tomic (a moderate HDZ member). These attempts failed due to a lack of the necessary votes in the Municipal Council. However, HDZ hard-liners continue to pressure Mr. Tomic, who they see as an obstacle to the establishment of a separate Croat entity. ‘HNS’ officials also instructed Croats and their legally elected representatives to reject the newly elected Federation Government. On 13 March, HDZ officials ordered the disbanding of the Croat component of the Federation Army, followed on 28 March by a walkout of Croat officers and soldiers from their barracks.

11. The efforts of this illegal "Croat Self-Rule" to control the Federation financial institutions (mainly, the customs offices) in the Croat-majority areas has failed, thanks to the firm attitude of the Federation government.

12. On 16 May, Federation Defense Minister Anic and some BiH Croat Generals brokered a tentative agreement which allowed Croat soldiers one month to renew their contracts with the Defense Ministry and return to their barracks. As the time period for this report expired, the official agreement broke down, but a significant number of Croat soldiers -- particularly from Central Bosnia and from the northern region of Posavina -- had reportedly renewed their contracts.

    c) Brcko

13. I continue to be satisfied with developments in the Brcko District (BD). One year after its establishment, progress continued in particular in the areas of:

• Return: Both entities and the BD Government are enacting a joint program for Displaced Persons’ (DPs) housing reconstruction worth 6 million KM (1 KM = $ 0.5 approx.), which should result in 500 housing resolutions in the current year. The BD continues to be in the top 5% of municipalities in the Property Law Implementation Program (PLIP), with an average of over 100 properties reinstated each month.
• Judicial system: A modern judicial system -consisting of a basic court, an appellate court, a legal aid center and a judicial commission- was established on 1 April and is functioning well under a set of progressive District laws.
• Budget: A transparent budget was adopted in April and the District is financially self-sustainable, a result of the District Government’s efforts to collect all revenues to which it is entitled.

5. Civil Information Management and Documents

18. My Office turned over the completed package of five State laws dealing with the implementation of civil registries and issuance of common identification cards and drivers licenses to the Ministry of Civil Affairs and Communications (MCAC) in April 2001. This package also included a State law on data protection that secures the rights of individuals regarding the government use of the data, which meets the Council of Europe standards.
19. The MCAC introduced these laws for governmental approval in May 2001 and on 9 June the CoM adopted the laws and forwarded them to the Parliamentary Assembly. Technical preparations with relevant State and Entity ministers are nearly complete.

6. BiH in the European Integration Process

• Courses in "Human Rights and Civic education" will replace "Civil Defense";
• Classes devoted to the literature of the other constituent peoples of BiH and language modules focusing on their common linguistic heritage and linguistic diversity today are to be prepared for February 2002;

• The subject "Culture of Religions" is to be introduced in September 2002;
• Teaching of the two alphabets is obligatory in both entities as from the second semester of the current school year 2001 (from grade 2 of primary school);
• Textbooks imported from Belgrade and Zagreb, which do not refer to BiH, will be phased out by September 2002;
• A majority of the Federation Cantons are now willing to devolve part of their responsibilities and powers to the Federation Ministry of Education in order to facilitate strategic education planning in the future;
• The inter-entity Educational Standards and Assessment Agency, established by the World Bank, has finally been operationalised.

1. The International Chief Executive of the CRA, who started his mandate in mid-February, has successfully combined the staff and business operations of the CRA's two predecessor organizations, IMC and TRA. Additionally, CRA is continuing the merit-based long-term broadcast licensing process begun by the IMC. Although problems with implementation cannot be ruled out as the licensing process moves into more politically volatile areas, the process has started well, with 100% compliance in the first region covered. The BiH Communications Law, which will provide a legal basis and structural foundation for the CRA, was presented to the CoM on 24 April for consideration.
2. The restructuring of the Public Broadcasting System (PBS) in BiH continues with the simultaneous launch on 7 May of both PBS radio (broadcasting across the whole territory of BiH) and Federation radio. For the first time since the disintegration of the former Yugoslavia, BiH has a statewide broadcasting capability. The citizens of BiH now have a forum available to all, irrespective of ethnicity, to debate crucial issues of the day, free from political subversion and distortion. Currently the PBS radio signal is accessible to approximately 72% of the population. Work to extend the coverage to 85% of the population will continue during autumn 2001, subject to available donor funding.
3. The Federation Parliament adopted in June the Draft Defamation Act. I expect the final vote to be taken at the Parliament’s next session in July. In the RS, the Proposed Defamation Act should be considered in the very near future. Following adoption, it will forward the Proposed Act to the RS National Assembly for the final vote.
4. The draft Law on Freedom of Access to Information, prepared by an expert group in coordination with the OSCE and OHR in October 2000, was adopted at the State level, as well as by both the Federation and RS Governments.

1. On 14 March, I issued a decision providing the Independent Judicial Commission (IJC) with a comprehensive mandate embracing matters regarding the promotion of the rule of law and judicial reform. I followed this with an internal directive clarifying the scope of administrative competencies and powers as between my Office and the IJC. Thus, the basic framework for the IJC is now set. During this period, the IJC has significantly increased its staffing and has been able to begin working on the various issues that fall within its mandate. The Director took up office on 2 April. The IJC is now established in its own headquarters in Sarajevo and in four field offices (Banja Luka, Mostar, Sarajevo, and Tuzla). I expect the fifth office in Bihac to open soon.
2. The IJC has started the implementation of its strategic plan for the next twelve months and has identified some areas or particular importance to the strengthening of the rule of law in BiH: review of the laws on appointment of judges and prosecutors, criminal and civil procedure reform, review of legislation on enforcement of civil judgements and court administration and management.
3. During the period, there was some progress in these areas, especially with the increased activity of local working groups on law reform issues. I am encouraged to see that there is an acknowledged recognition by the Ministers of Justice of each Entity of the benefits of harmonizing their legislation in key areas, such as procedural laws, and of the need for some problems to be resolved at State-level.
4. The IJC has been monitoring and guiding the work of the national commissions and councils established to improve the process of recruitment of judges and prosecutors and to carry out a comprehensive review of all serving judges and prosecutors. However, political obstruction in certain areas has continued to impede the appointment of prosecutors.

1. Human Rights institutions

1. The Mostar "Liska Street" incident of February 1997 -denounced by the UN SG-, in which a Bosniac was killed and twenty were injured during a visit to a cemetery for the Bajram, is now under criminal investigation by Mostar judicial authorities, pursuant to recommendations contained in a Special Report of the BiH Ombudsman.

   b) Entity Ombudsman Institutions

2. In annual reports released during the reporting period, the RS and Federation institutions highlighted that the top two issues about which individuals register complaints concerned failures to be able to repossess one's pre-war housing, and ethnic discrimination concerning employment.

   c) Human Rights Chamber

3. The implementation rate for the decisions of the Human Rights Chamber (HRC) has increased and now stands at 75%, up from 33% at the end of 1999. Similar increases have also been seen with reports of the BiH Human Rights Ombudsman.
4. In order to properly implement the HRC decision demanding the reconstruction of the Ferhadija mosque in Banja Luka, the "urban permit" (originally issued on 22 November 2000) was amended by the local authorities in March 2001.

2. Social, Economic and Gender Rights

1. My Office is developing policies and strategies aimed at remedying the current discriminatory practices in healthcare, access to utilities and employment. It has continued to monitor the implementation of the Entity Labour Laws regarding possible re-employment or compensation for those who were dismissed during the war, and continues to present the principle of conditionality to donor agencies in an effort to establish an equitable employment market. My Office has helped facilitate a system of pension transfer, whereby returnee pensioners can receive their pensions in the place of return, thus facilitating sustainable return all over BiH.
2. As the trafficking of persons in and through BiH persists, my Office continues to participate in the Working Group to Combat Trafficking in Human Beings. It has drafted a BiH Plan of Action to Combat Trafficking in Human Beings, which is pending before the Parliamentary Assembly of BiH.
3. My Office is participating in the review of draft legislation pertaining to the rights of national minorities and gender equality. Members of my staff participate in the recently established Roma Coordination Group, with members from the IC and the Roma community, in an effort to address the widespread discrimination of this often over-looked minority.

3. ICTY

1. My Office has continued to cooperate closely with ICTY, in order to assist with the facilitation of its mandate. In particular, it has worked with ICTY in commenting on the RS Draft Law on Co-operation with ICTY and the BiH Draft Law on the Truth and Reconciliation Commission. Additionally, it has continued to attract investors to support the activities of ICTY’s Rules of the Road Unit, principally their proposal for a lecture series involving legal training for members of the BiH judiciary and police force involved in the prosecution of alleged war criminals.
2. It has continued to monitor compliance with the Rules of the Road Agreement and domestic war-crimes trials.

4. Missing persons and Potocari (Srebrenica) memorial site

1. The specific boundaries of the Potocari site, which I designated in October 2000 for the burial and commemoration of the victims of the 1995 Srebrenica massacre, were identified and eventually marked in March.
2. In order to organise and focus the development of the site, the Foundation for the Srebrenica/Potocari Memorial and Cemetery was created and registered. In anticipation of the 6th anniversary of the massacre, the Foundation has agreed on a design and location for a stone to mark the site.

1. State Institutions: Civil Service and State Court

1. My Office, in collaboration with the EU, is seeking adoption by the CoM of the draft Law on the Civil Service. In order to ensure the effective implementation of such legislation, an Agency for Civil Service will be established. This administrative authority will actively contribute to a professional and standardized recruitment and dismissal process of the civil servants.
2. The Court of BiH, put into law by my Decision of last November, has not yet become operative, because of RS litigation before the BiH Constitutional Court on its constitutionality.

2. Issues Related to the BiH Constitutional Court’s Decisions

1. On 23 March, the BiH Constitutional Court found itself competent to review the constitutionality of the legislation that I imposed. It found the Law on Travel Documents -providing for a single BiH passport- that I imposed on 29 September 2000 to be consistent with the BiH Constitution.
2. The Constitutional Commissions in both Entities are progressing in the preparation of proposals for the amendments of the Entity constitutions in accordance with last year’s Constituent People’s Decision of the BiH Constitutional Court. Although OHR observers are present at commission meetings, the process is very much left to their own responsibility at this stage. Both Commissions have come to agreements on most issues. In RS, the constituent peoples’ vital interest will probably be protected by a Commission. In the Federation, the Constitutional Commission has left options for the Federation Parliament on sensitive issues such as the new parliamentary structure, including any "vital interest" protection mechanism.
3. The process in the Federation has been considerably delayed by the general attitude of the HDZ. Although I invited this party on numerous occasions to participate in the work of the Constitutional Commissions, it refused the invitation, following its pattern of anti-constitutional behaviour. Eventually, I was forced to appoint Croat members from other political parties.

3. Other legal issues

1. In February I issued a Decision imposing binding arbitration on the RS and the Federation aimed at finally resolving the long standing dispute over the precise delineation of the IEBL in the Dobrinja suburb of Sarajevo. The appointed Arbitrator finalized the arbitration process and the Award was issued on 24 April. The resolution of this issue will not only have a positive impact on the return of former Dobrinja residents to their homes, but will also create a positive environment for the full implementation of Annex 7 to the GFAP.
2. I am pleased to report that BiH is reforming the legal aspects of public water management in accordance with European Union directives and principles of international law.
3. My Office is currently pressing for the adoption of the Federation Law on Citizenship by the Federation Parliament. It is now for review under an urgent procedure. Its adoption is indeed crucial, since many former citizens of the SFRY who took up permanent residence in BiH before 1998 became eligible for BiH citizenship as of 1 January 2000 and are unable to do so in the absence of a Federation Citizenship Law.
4. Under my separate mandate for SFRY succession, I mediated the final round of the negotiations on succession to the SFRY, together with the Special Negotiator, Sir Arthur Watts. On 25 May, the five successor states (BiH, Croatia, FYR of Macedonia, Slovenia, and FRY) initialed an agreement that provided for the distribution of the SFRY’s rights, obligations, assets and liabilities.

1. Defence and Military Reform; Development of a State-level Defence Institution

1. Although I still consider the overall process towards BiH armed forces integration and the building of a State level security and defence identity too slow, a significant step was taken on 11 May when the BiH Presidency adopted a BiH Defence Policy (DP). Its adoption has clearly strengthened the authority of the Presidency in the area of defence and security. This in turn is expected to strengthen the position and authority of the Standing Committee on Military Matters (SCMM) and its Secretariat.

   2. Re-structuring of the Entity Armed Forces

2. Under the lead of SFOR, both Entities’ armed forces have now achieved the necessary 15% reduction in size. The re-structuring work is now being taken forward under the guidance of the Joint Military Commission, which engages representatives from both BiH and the IC.

   3. De-mining

3. Following the publication on 23 March of the Federation Finance Police report into corruption within the de-mining operations, confidence has started to return among donors. Some pledges have been received, notably from Germany, USA, Canada, Sweden and Slovenia, which will provide for over half of the required 2001 budget. However, more funds are required and other donor nations would like to see a greater contribution from within BiH to show a commitment equal to that of the IC. Furthermore, some pledges have not yet been converted to actual funding. Joint Chairs of the Boards of Donors have written to the MCAC offering advice on how both of these problems may be addressed.
4. The Demining Commission is pushing ahead with the drafting of a De-mining Law to streamline the structure of the de-mining organization (something that the IC is keen to see), avoid redundancies and create a legal basis for de-mining activities within BiH.

   4. Civil Aviation

5. The new CoM accepted the advice of my Office, SFOR and ICAO and established a CoM Working Group (WG) for Civil Aviation. At the 14 June session of the International Standing Committee for BiH in Sarajevo, following considerable effort from my Office and ICAO to provide technical and political advice to the CoM, the recommendations of the WG for the transfer of authority from SFOR to civil aviation in BiH, were approved. In essence, it was agreed that:

• BiH should join the Central European Air Traffic Services (CEATS) for the provision of air traffic services in the upper air space;
• Provision of air traffic services in middle and lower airspace should temporarily be contracted to a single service provider, Croatia Control Limited (CCL), for as long as NATO controls operational military flights in that airspace.