nomad9

minute briefing: Bosnia-Hercegovina


The Republic of Bosnia-Hercegovina is climbing back from three years of bloody inter-ethnic war during 1992-95 between Bosnian Muslims, Croats and Serbs - part of the break-up of Yugoslavia.
The war left Bosnia's infrastructure and economy in tatters. Around two million people - about half the population - were displaced and unable to return to their homes in safety.

OVERVIEW


Just under a decade after the conflict ended, the United Nations announced that over a million of them had done so. Further progress has since been reported.

The NATO forces brought in to keep the peace were replaced in 2004 by a much smaller European Union-led peacekeeping force.

International administration has helped the country consolidate stability. Much of the war damage has been repaired and GDP has shown a steady rise. On the other hand, crime and corruption have continued to flourish. Unemployment remains very high and investment is slow.

The 1995 Dayton peace accord, which ended the Bosnian war, established the Office of the High Representative. The representative currently has wide-ranging powers to impose decisions in cases where the authorities are unable to agree, or where political and economic interests are considered to be at stake. Former German minister Christian Schwarz-Schilling took over the role from UK politician Paddy Ashdown in early 2006.

Dayton set up two separate entities, a Muslim/Croat Federation of Bosnia and Hercegovina, and the Bosnian Serb Republic, Republika Srpska, each with its own president, government, parliament, police and other bodies. Overarching these entities is a central Bosnian government and rotating presidency.

Critics of Dayton voiced fears that the two entities came too close to being states in their own right and that the arrangement reinforced separatism and nationalism at the expense of integration.

But the stability it brought enabled the country gradually to strengthen the role of central government and increase integration. There is now a single defence structure and intelligence service as well as a central judicial system and a single customs service.

A key breakthrough was achieved in late 2005 when agreement was reached on creating a unified multi-ethnic national police force which will replace the separate forces operated by the entities.

Underlining how far the country has come since Dayton, EU foreign ministers gave the go-ahead in late 2005 for talks on a Stabilisation and Association Agreement, the start of Bosnia's long journey towards possible membership.

The prospect of talks with the EU is likely to increase still further pressure for the capture of two key Bosnian Serb war crimes suspects, Radovan Karadzic and Ratko Mladic. Although some of those wanted by the Hague tribunal have been captured, the fact that these two key figures remain at large has given rise to widespread international condemnation.



FACTS
Population: 4.2 million (UN, 2005)
Capital: Sarajevo
Area: 51,129 sq km (19,741 sq miles)
Major languages: Bosnian, Croatian and Serbian
Major religions: Christianity, Islam
Life expectancy: 71 years (men), 77 years (women) (UN)
Monetary unit: 1 convertible marka = 100 convertible pfenniga
Main exports: Wood and paper, metal products
GNI per capita: US $2,040 (World Bank, 2005)
Internet domain: .ba
International dialling code: +387

LEADERS


President: The presidency of the republic currently rotates between a Serb, a Bosnian Muslim and a Croat: Borislav Paravac (Serb Democratic Party), Sulejman Tihic (Muslim Party of Democratic Action) and Ivo Miro Jovic (Croatian Democratic Union)

The responsibilities of the presidency lie largely in international affairs.

Ten years on from Dayton, the Muslim, Serb and Croatian leaders voiced commitment to constitutional reform by March 2006 aimed at streamlining the three-member presidency and parliament ahead of elections which are due the following autumn.

Adnan Terzic has set European integration as a priority

Parliamentary elections in October 2002 saw nationalist parties put up a strong showing overall in both the Bosnia-Hercegovina parliament and the assemblies of the entities. Many voters expressed disillusionment with what they saw as the failure of politicians to improve their economic lot and turnout was low.

The Bosnia-Hercegovina parliament approved a government dominated by nationalists with backing from moderate parties.

Prime Minister Terzic of the Muslim Party of Democratic Action pledged to introduce economic and social reforms intended to steer Bosnia towards integration with Europe. He listed growth and investment and fighting crime and corruption as his government's priorities and promised to work with the international community to achieve these goals.

Mr Terzic will be the first prime minister since the end of the war in 1995 to serve a full four-year term.

Previously the post was rotated between representatives of the three main ethnic communities.

Finance minister: Ljerka Maric
Foreign minister: Mladen Ivanic
Defence minister: Nikola Radovanovic


MEDIA


The war in Bosnia-Hercegovina turned most media into propaganda tools in the hands of authorities, armies and factions. Since the 1995 Dayton Peace Accord efforts have been made - with limited success - to develop media which bridge inter-entity boundaries.

The most influential broadcasters in Bosnia are the public radio and TV stations operated by the Bosnian Muslim-Croat and Serb entities. The Office of the High Representative (OHR), the leading international civilian agency in Bosnia, is overseeing the development of a national public broadcasting service.

The OHR and other international organisations have encouraged the development of media which support a civic rather than a nationalist approach.

The media are partially free, but outlets and journalists come under pressure from state bodies and political party structures in both the Bosnian Muslim-Croat and Serb entities.

More than 200 commercial radio and TV stations are on the air, but their development has been hampered by the weak state of the advertising market.

The press

Oslobodjenje - Sarajevo
Dnevni avaz - main Muslim daily
Dani - Sarajevo weekly
Slobodna Bosna - Sarajevo, magazine
Nezavisne novine - Banja Luka, daily
Reporter - Banja Luka, weekly


Television

Public Broadcasting Service of Bosnia-Hercegovina - state-wide public broadcaster, operates BHTV1 channel
Federation TV (FTV) - public TV service of Bosnian Muslim-Croat entity, operates two networks
Serb Republic Radio-TV (RTRS) - operates public TV service of Bosnian Serb entity
Mreza Plus - commercial, near-national coverage
Open Broadcast Network (OBN) - commercial, near-national coverage


Radio

Public Broadcasting Service of Bosnia-Hercegovina - state-wide public broadcaster, operates BH Radio 1
Radio FBiH - public radio service of Bosnian Muslim-Croat entity
Serb Republic Radio-TV (RTRS) - operates public radio service of Bosnian Serb entity
Bosnian Croat Mostar Radio
Bosanska Radio Mreza (BORAM) - private network
BM Radio - private, Zenica-based
Radio Stari Grad - private, Sarajevo-based


News agencies

Federation News Agency (Fena) - state-run, Sarajevo-based, English-language pages
SRNA - state-run Bosnian Serb agency
Onasa - private

edited by josé pascal da rocha, email:josepascaldarocha@mac.com

Mediation: Effective alternative to dispute resolution (short introduction)


Mediation is defined in Black's Law Dictionary as ``a private, informal dispute resolution process in which a neutral third party, the mediator, helps disputing parties to reach an agreement.''

In contrast, arbitration is a formal, quasi-judicial process where a neutral third party, `the arbitrator' renders a binding award on the basis of material placed before him. Arbitration proceedings closely mirror proceedings in a court of law.

In a voluntary effort, the mediator facilitates communication between parties and encourages settlement. There is, unlike in arbitration, considerable latitude available to the mediator, as he can privately discuss the merits of a dispute with each party individually -- unthinkable in the adversarial arbitration process.

In this context, there seems to be a considerable lack of clarity as to the scope of the words `mediation' and `conciliation'. There is, for example, no consistency in the use of these terms worldwide, and a number of ADR systems perceive them to be synonymous. The US and Australia use the term `mediation' while `conciliation' is commonly used in China, Japan, Thailand and Singapore.

Black's Law Dictionary also fails to resolve this distinction, if any, by defining the word `conciliation' as ``the adjustment and settlement of a dispute in a friendly, unantagonistic manner, used in courts with a view to avoiding trial and in labour disputes before arbitration.''

It is interesting that the United Nations Commission on International Trade Laws (UNCITRAL) has rules for conciliation and not for mediation, while the World Intellectual Property Organisation (WIPO) has rules for mediation but none for conciliation. Even the CPC (Amendment) Act incorporates, for the purposes of mediation and conciliation, the language used in the UNCITRAL Rules for Conciliation, thus perpetuating this verbal ambiguity. One is also, of course, tempted to ask why a reference to both conciliation and mediation is made in the CPC (Amendment) Act, if both are the same.

As the French arbitrator Professor Charles Jarrosson says, there is a subtle difference between mediation and conciliation -- one of degree rather than nature. Mediation is a more proactive form of conciliation, the latter being more passive in the sense that the conciliator has an evaluative role as opposed to the facilitative role of the mediator. Unlike a mediator, who has to be active and see that justice is done, the conciliator is a withdrawn neutral.

Why mediate?

The primary reason for mediation is always that litigation is time-consuming and expensive, and a litigant typically has little control over the litigation and the final orders passed. Mediation, by comparison, has certain inherent advantages that are particularly useful to a financial institution (FI).

First, the process can be slotted into a specific time period, as the FIs and banks may deem fit. Second, the conduct of a borrower in the mediation process is a good indicator of his conduct in future dealings. A promoter's reluctance to participate and co-operate in the mediation process or to repay dues, and his actions in the course of mediation, are indicative of his actions in future litigation and thus help chart the institution's future strategy, such as the timing of its recovery actions.

Moreover, the institution typically blocks up a portion of its resources to grant reliefs and concessions to its borrowers. Reschedulement of loans; waivers of compound interest and liquidated damages; and reduction in the rates of interest are extended to most defaulting borrowers. The conduct of the promoters in mediation helps identify the promoter/company to whom such concessions should justifiably be extended.

When to seek it

Ideally, mediation should be resorted to before litigation, when positions are more flexible and before substantial sums have been spent. Typically, there is a time difference between an account becoming irregular and recovery suits being filed against a company. It is in this period that mediation may be resorted to by companies between whom channels of communication have broken down.

It could be a handy tool to assess the promoters' commitment, preparedness to meet eventualities, capacity to bring in additional contribution or enhance security, before the company slips further and finally becomes a non-performing asset (NPA) or before a hostile atmosphere sets in.

Every FI has a certain component of defaulters whose businesses have failed or who are in distress on account of legitimate reasons. There is yet another class of wilful defaulters, who typically render their businesses sick after siphoning off funds from the company. Financial distress in these companies is induced. In both types of cases comes a stage when entreaties asking the companies to pay up no longer generates a satisfactory response. It is at this stage when the institution could consider inviting both sides to try mediation.

Mediation also proves useful when it is used to help sides take positions in complex financing arrangements. While negotiating structured financial deals, there could be times when mediators are required to assist the parties analyse competing positions. Given the fact that every representative can at best appreciate his own position, a mediator sometimes helps one side perceive the inherent logic in the opposite point of view.

Effectiveness

The success of mediation always depends on goodwill and a willingness to resolve disputes. Its voluntary and informal nature allows parties to evaluate the progress made in resolving their dispute and offers them the option to exit an unfruitful exercise; such freedom is not available to those involved in litigation or arbitration.

Despite the factors limiting the efficacy of mediation, it undoubtedly remains as a strong tool in the hands of participating institutions, to devise a mutually acceptable and workable reschedulement of debt in potentially stressful cases. By and large, mediation tends to succeed, and personal commitment and involvement in finding solutions could be more effective than Court orders.

Some Case studies

The Microsoft anti-trust case is a fascinating study of the mediation process (http://www.pcworld.com/news/article/0,aid,68407,00.asp, accessed Febr. 8th, 2006, 3:30 p.m. GMT, and for more on the case: http://www.mywiseowl.com/articles/Microsoft_antitrust_case, accessed Febr. 8th, 2006, 2:30 p.m. GMT).

Judge Thomas Penfield Jackson hearing the matter referred it for voluntary mediation to Justice Richard A. Posner, a sitting Federal US Judge, in November 1999. The entire process of mediation took four months as opposed to two- to three-year period it was likely to take in the courts. Expressing his disappointment at the failure of the process, Judge Posner made certain observations about the criticality of success in such matters and how the success of mediation would have been in national interest.

According to Justice Posner, almost twenty drafts of the consent decree were prepared in the matter, but disagreements, between the parties concerning the likely course, the outcome and consequences of continued litigation as well as the implications and ramifications of alternative terms of settlement, were too deep seated to be bridged (see: http://www.pbs.org/newshour/bb/cyberspace/jan-june00/posner_4-3.html, accessed Febr. 8th, 2006, 5:20 p.m. GMT)

The last word about the mediation came from Bill Gates himself who, while insisting that the details of the mediation were confidential, pointed out that ``it was unfortunate that a settlement wasn't possible. Microsoft had offered concessions beyond what a court would have requested, and mediation failed because of the difficulty in finding a common ground among so many parties.''

In 1999, Afro-American farmers filed what became the largest civil rights class action lawsuit in US history (http://usinfo.state.gov/journals/itdhr/1299/ijde/pitts.htm, accessed Febr. 8th, 2006, 2:00 p.m.).

The suit, namely, Black farmers v. The Department of Agriculture, alleged discrimination by US Dept. of Agriculture (USDA) in delaying or denying loans and withholding technical assistance crucial to the farmers' livelihoods. The parties agreed to mediation pending litigation, with the USDA taking the lead. Though in the early stages eight attempts failed, mediation finally succeeded, making it the largest recovery in a civil rights case in the history of the country and set a precedent, avoiding long and costly court proceedings in future civil cases. Asked why the Government agreed to such a large settlement, an official responded saying that as the USDA decided it could not win the suit in a court -- as there had been discrimination -- they thought it best to arrive at a settlement through mediation rather than pay the huge damages which a court order would have entailed.

by jose pascal da rocha, josepascal.darocha@proconsensus.org