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Declaration of the Peace Implementation Council
Brussels, 23/24 May 2000
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We, the members of the Peace Implementation Council (PIC) and the leaders of
Bosnia and Herzegovina (BiH), met in Brussels on 23/24 May 2000, to review
progress in the implementation of the General Framework Agreement for Peace
(GFAP) in BiH and to set priorities for a new accelerated phase of peace
implementation. We reconfirm our strong commitment to the GFAP as the basis
of freedom and democracy in BiH. The Council underscores that much has been
accomplished and the building of the State of BiH has begun:
- The security situation has stabilised
- Major reconstruction is completed
- The return of refugees and displaced persons is accelerating
- The Brcko District is established
- Political pluralism as reflected in successive elections is gaining
strength
These achievements are largely the result of intensive international
efforts. The Council expresses its dissatisfaction with the slow pace of
domestic peace implementation since its Madrid meeting in 1998. The
responsibility for this insufficient progress lies squarely with
obstructionist political parties and their allies, both within and outside
of BiH. Narrow nationalistic and sectarian political interests have impeded
everything from refugee returns to economic reform to the functioning of
government institutions. The Council urges the High Representative to use
his authority in accordance with his mandate to ensure full and accelerated
implementation in all sectors of civilian implementation, including removing
obstacles that stand in the way of economic reform.
We agreed on future steps to accelerate implementation of the GFAP in the
period up to the next scheduled BiH presidential elections in 2002. We will
focus on three key strategic areas:
- Deepening economic reform and creating the conditions for
self-sustaining market-driven economic growth to avoid an economic crisis as
BiH makes the transition from a donor dependent economy.
- Accelerating return of displaced persons and refugees with a
particular emphasis on enabling citizens to exercise their property rights.
- Fostering functional and democratically accountable common
institutions supported by an effective, merit-based civil service and a
sound financial basis, based on the Rule of Law.
Since we last met, the Stability Pact and the EU's Stabilisation and
Association Process have been established. The Council reaffirms its
commitment to BiH integration into European structures and expects the
officials and citizens of BiH to show the same commitment. As such the
Council expects the authorities in BiH to meet the conditions set by the
Council of Europe and by the EU for the Stabilisation and Association
Process in its Road-map, including the adoption of an Election Law, and to
play an active role in the Stability Pact. In this respect, the Council
notes the importance of BiH's place within Euro-Atlantic structures.
The Council states its readiness to continue to assist BiH in this period
through both a civilian and military presence. We welcome the continuing
contribution of SFOR, including the Multinational Specialised Unit, to
security and stability in BiH through, in particular, support for the return
of displaced persons and refugees, support in combating corruption and
organised crime and support to ICTY. The Council believes that SFOR's
current degree of active engagement is essential to successful peace
implementation.
We expect all authorities in BiH and relevant countries to co-operate with
the ICTY fully and unambiguously in order to bring to justice all political
or military leaders indicted for war crimes be they still holding office or
not as well as all other indictees.
The Council notes the encouraging regional developments, in particular the
election of a new government in Croatia committed to full implementation of
the GFAP and regional co-operation. We expect the citizens of BiH to build
on this, to continue to vote and work for changes, and step by step assume
full ownership of their country's future. BiH must now do more for itself by
itself.
Economic Reform
This year marks the end of the large-scale, post-war reconstruction period.
BiH has been one of the most highly assisted countries in the world. The
people of BiH are now in a decisive phase for accomplishing the reforms
essential to long term self-sustaining stability. Major internationally
financed reconstruction has taken place in the infrastructure sector, and
has driven economic growth. As this assistance will decline significantly
over the coming years, the economy of BiH faces the challenge of realising
self-sustaining growth. In order to achieve this objective, the BiH
authorities must accelerate substantially the pace of structural economic
reforms in support of private sector led development. The Council urges
donors to continue to condition their assistance upon the implementation of
concrete and specific reforms.
The following economic reforms are critical:
- Creating a single economic space: BiH cannot afford a divided
economic landscape. We call on the BiH authorities to enforce the
constitutional provisions for an internal market and to maximise economic
coordination between the State and the Entities and between the Entities. To
increase efficiency and economies of scale, there should be a harmonised,
country-wide approach in a number of areas, including: taxes, competition,
public procurement, financial services, standards and regulations, banking,
public utilities, electric power, telecommunications and transport/railways.
The reform of the customs system must continue. These steps are
preconditions for BiH's integration into Europe. These reforms should become
building blocks for a single economic space; all international community
policies should support these reforms.
The Council accordingly calls on the High Representative to ensure
rapid development of State-level regulatory mechanisms for
telecommunications, energy, transport, and media and to ensure that there
are no duplicative or conflicting regulatory competences at any level of
government. Establishment of a functioning State Treasury during this year
is essential to strengthen the financial basis of the State institutions.
The Council calls on the State authorities, in consultation with the High
Representative, to identify and establish adequate domestic funding sources
for the State budget.
- Enabling private sector growth: To succeed economically and attract
private capital to sustain growth, BiH needs an attractive business
environment. Barriers to investment such as discriminatory utility fees,
lack of clarity on land titles and cumbersome tax systems must be rapidly
removed and the basic legal structures of a modern market economy
instituted. The Council urges BiH authorities to remove promptly the
barriers obstructing the development of the private sector and to establish
simplified procedures for foreign and domestic investors. The Council urges
the authorities to proceed with broad-based reform of the taxation and
customs systems, labour legislation, the social security system, the banking
system, the unaffordable military structures and the unsustainable
governmental bureaucracy at all levels. The Council calls for adherence to
the current timetable to dismantle the payment bureaux system completely by
December 2000. The Council strongly supports immediate reform in the area of
public utilities, with an emphasis on telecommunications and energy. It
urges BiH to develop its digital and Internet technology capacities crucial
for economic growth. It calls for the separation of economic and political
powers through liberalisation and privatisation.
- Privatisation: A substantial number of publicly owned enterprises
must be privatised expeditiously, and the process of privatisation must be
seen to be transparent and in the interest of the citizens of BiH. The
Council encourages greater emphasis be placed on tender privatisation that
encourages the injection of new management and capital. Direct intervention
by the High Representative may be necessary in strategic industries and in
cases where the privatisation process is suspect. The Council welcomes the
involvement of international experts, as necessary, to ensure that the
privatisation process moves forward quickly and in the interest of the
people of BiH. The OHR, via the Economic Task Force, will ensure
co-ordination and monitoring of the privatisation process, in particular,
through the International Advisory Group on Privatisation, and report to the
Steering Board.
- Fight against corruption: The Council remains deeply concerned over
ingrained corruption in BiH which undermines democratic governance, wastes
public resources and hinders the development of the market economy. The OHR
comprehensive Anti-corruption Strategy is the solid basis for the fight
against corruption. All public officials are expected to give their active
and unreserved support to this Strategy and to the institutions which are
implementing it. The Council urges measures for improved transparency in
public budgets and institutional capacity-building required to end the
systemic nature of corruption. The Council endorses the joint initiative of
all parties represented in the BiH House of Representatives aimed at
introducing a draft law on party financing without delay. We urge competent
BiH authorities to regulate party financing and conflict of interests
through legislation.
A self-sustainable market-orientated economy cannot be built in an
environment where the principles of economic logic are overruled by the
objectives of maintaining political control. Vestiges of the old economic
system exemplified by the payment bureaux and the politically motivated
allocation of real estate and other economic resources, must be eliminated.
During this crucial period of economic reform, co-ordination among the
various international donors and agencies is especially important. The
Council urges the BiH authorities to closely collaborate with the
International Financial Institutions and other donors in the design and
implementation of economic reforms. International Financial Institutions are
encouraged to unequivocally apply conditionality. The Council recognises the
crucial role that the High Representative plays in co-ordinating the
international donor community's efforts for BiH and it supports the High
Representative in the use of his mandate to remove obstacles that choke
economic growth and deprive the citizens of jobs and a fruitful economic
life.
The Return of Displaced Persons and Refugees
The return of refugees and displaced persons remains a real test of
commitment to the peace process. The Council notes that significant progress
has been made recently, particularly in rural areas. However, the clear will
of citizens to return to their pre-war homes has not been matched by
authorities at all levels, many of whom continue to lack the necessary
political will and even obstruct returns because of their personal vested
interest. The slow progress in urban return reflects unwillingness by all
sides to implement property legislation and to enforce the legal rights of
all citizens. Those continuing cases of occupation of contested properties
by Bosnians prominent in public life are totally unacceptable; the Council
urges the High Representative to take appropriate action against such
individuals.
The Council endorses the four pillars of the Reconstruction and Return Task
Force (RRTF) program to accelerate the pace of return and welcomes the
proactive engagement of the High Representative in support of it.
- Combining the Property Legislation Implementation Plan (PLIP), which
began with the harmonisation of property legislation in the two Entities
with a vigorous drive by OHR, OSCE, UNHCR and UNMIBH to ensure respect for
and understanding of individual rights to return and the establishment of
the Rule of Law.
- Targeting increased efforts on housing reconstruction and
infrastructure assistance, including low-cost self-help schemes, to
breakthrough areas in support of both spontaneous and organised return
movements.
- Increasing returns between BiH and Croatia using all appropriate
mechanisms, including the Stability Pact.
- Facilitating sustainable return through the careful targeting of
appropriate donor activities, inter alia in fostering economic, educational
and labour market opportunities for returnees and renewing efforts in
demining.
In addition, the Council insists that the BiH authorities accept their
personal responsibilities for accelerating the return process and welcomes
the progress made by the RRTF in this regard.
The Council also welcomes the work done by OHR, UNHCR, CRPC and others on
the reform of the property market in BiH. It urges all concerned to develop
a detailed implementation plan for a real estate market, in the interest of
all citizens of BiH and as a core requirement of a market economy.
Fostering and Consolidating Institutions
Effectively functioning State institutions are a prerequisite for a modern
European State and for progress towards BiH's entry into European and
Euro-Atlantic structures. Ensuring that BiH has such institutions remains a
key strategic priority for the Council. Many public institutions at all
levels, but in particular State institutions, continue to fail the citizens
of BiH, due to lack of political will on the part of the ruling political
parties and the continued existence of parallel institutions. The Council
supports the High Representative's efforts to ensure that State institutions
are empowered, efficient and adequately financed through dedicated revenue
sources. State institutions need their own independent funding. The Council
requests the donor community to funnel its assistance to BiH directly
through State institutions. The Presidency and the Parliamentary Assembly
must re-establish the Council of Ministers and assure adequate funding for
State-level ministries.
We expect State institutions to adopt and implement the State Laws included
in the work program for 1999-2000 approved by the Council of Ministers. We
welcome the self-committing decision by the Presidency supported by the
House of Representatives on the "Program of Measures and Activities for the
Implementation of Reforms in BiH". For the implementation of both programs
substantial progress on the establishment of a professional civil service is
urgently needed.
A democratically accountable police and independent judiciary are
prerequisites for the Rule of Law and the full protection of human rights.
The Council notes with displeasure the limited progress in judicial reform.
Officials have sought to sustain their power bases rather than empowering
citizens. The Rule of Law, not the rule of men, must govern citizens'
relations with the State.
We call for a truly independent and impartial judiciary that will ensure the
Rule of Law in all criminal, civil and commercial matters. In this context
the Council considers the strengthening of the Constitutional Court and the
establishment of a State court to be major priorities. The Council notes the
continued need for an international oversight institution for judicial
reform pending OHR's solution of the Judicial Reform programme and supports
the continuing efforts of the High Representative to lead the Judicial
Reform effort and co-ordinate the efforts of the international community on
this issue.
We expect Entity institutions to implement legislation to remove all
political influence from the judicial branch and ensure merit based
appointments to the judiciary, to establish judicial training institutes and
ensure adequate funding, and greater budgetary independence, of the
judiciary.
The Council notes its dissatisfaction with the failure of the BiH
Parliamentary Assembly to adopt the Law on the Border Service, which had to
be brought into force by the High Representative. We expect the Law to be
adopted and the State Border Service established in full. The Council
requests the authorities in co-ordination with UNMIBH to accelerate
deployment of the State Border Service. The Council insists that the
authorities complete the police restructuring process with the assistance of
the UN IPTF without delay. The Council expresses its appreciation for the
work done by UN IPTF.
The Council reaffirms its support for the Annex 6 and 7 institutions of the
GFAP and expects the authorities in BiH to provide increased support for
these institutions and implement in full their decisions and
recommendations. We support the continued operation of these institutions,
following the expiry of the transitional period in December 2000. The
Council endorses the April 2000 Venice Commission recommendations on the
merger of the Human Rights Chamber with the Constitutional Court of BiH in
due course. This merger should take place following both BiH ratification of
the European Convention on Human Rights and the adoption of BiH legislation
on the merger. The Council calls upon the High Representative to co-ordinate
implementation of these recommendations with BiH authorities.
Effectively functioning institutions alone are not enough. The citizens and
officials of BiH must begin to take ownership of their future. The citizens
of BiH themselves must insist on transparency and the accountability of
their elected officials. Limited progress has been made in reducing the
climate of fear which citizens have felt in their relations with government.
Civil society built on an active citizenry lies at the heart of BiH's future
as a democratic and prosperous State.
The Council endorses the decision to hold general elections in BiH on 11
November 2000. The Council notes its dissatisfaction with the failure of the
BiH authorities to adopt an Election Law. Owing to this failure, these
elections will be conducted and supervised by the OSCE. We request the High
Representative and the OSCE Head of Mission to ensure that all parties,
candidates and officials are in full conformity with provisions of the Peace
Agreement and OSCE rules and regulations. No candidate will be permitted to
stand for office who is not in full compliance with the GFAP and all OSCE
rules and regulations. In this regard, the Council requests OSCE to
incorporate the provisions of the draft Election Law, including open lists,
multi-member constituencies and preferential voting, in the "provisional
rules and regulations" as the basis for the conduct of the general
elections. BiH authorities must adopt and implement an Election Law
consistent with the standards laid out in previous PIC declarations.
Citizens must be well informed to be active participants in shaping their
country. A public service broadcasting sector with strong and viable private
competitors will help to ensure the public's right to know and stimulate
vigorous public debate and a culture where public opinion serves as a check
and balance on institutions. The regulatory role of an evolving Independent
Media Commission under international supervision remains an essential tool
to check the continued attempts by political elements to control the
broadcast media. The Council deplores any and all attempts to intimidate
representatives of the independent media and insists that they be given the
ability to operate freely throughout BiH.
BiH now must think about its place in wider European security. If the BiH
authorities are to make progress towards their objective of Euro-Atlantic
integration, there must be fundamental changes, the current high levels of
defence spending cannot be sustained. BiH needs to have armed forces with a
unified command and control capable of joint deployment and action under
international and regional security organisations. The Council urges BiH
authorities to put intelligence services under democratic control and to
consolidate them.
We urge the authorities of BiH to develop the Standing Committee on Military
Matters (SCMM) into a State defence structure. The SCMM should develop and
oversee a common security policy for BiH. It should co-operate with the
international community in implementing fundamental force restructuring by
both Entities with the aim of creating transparent defence budgets, and
sustainable and affordable force structures consistent with the long term
security needs of BiH. SFOR, in co-ordination with the international
community, will provide advice and guidance on the restructuring of the
Entity armed forces. We welcome the commitment of the authorities to further
reduce military expenditure by 15% in 2000, to include budget, personnel,
equipment and structure. Further steps thereafter should be co-ordinated by
the SCMM consistent with regional needs. The Council applauds the recent
agreement between Croatia and the Federation to channel reduced military
assistance through the SCMM. The Council expects the SCMM and all external
donors to ensure transparency of external military assistance to the Entity
armed forces. In the framework of providing overall security the Council
expresses particular appreciation for the work accomplished by the
Multinational Specialised Unit (MSU).
We commend the High Representative for his continued efforts to streamline
co-ordination of the international community in BiH and accelerate peace
implementation for the good of the citizens of BiH. The Council calls on its
members to meet their financial and human resource commitments as agreed.
The State authorities of BiH shall report to the Steering Board every six
months on the implementation of the programme set out in this Declaration
and Annex. The first report will be made to the Steering Board on 1 October
2000.
We welcome the Parties' affirmation of their commitment fully to implement
the programme set out in this Declaration and Annex.
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