House of Commons - Foreign Affairs

Select Committee on Foreign Affairs Third Report

6 Bosnia and Herzegovina

161. The international administration in Bosnia and Herzegovina (BiH) is now five years older than that in Kosovo, but has proved more successful than its younger neighbour. Its recent efforts have strengthened state institutions in Bosnia, and have brought Sarajevo further towards the EU, although the question of compliance with the Hague Tribunal threatens to undermine these positive efforts. For instance, the establishment of a state level Ministry of Defence and system of VAT are two major steps on the path to effective statehood. However, effective democracy in Bosnia has not matured at the same pace, partly because of the centralised nature of the international administration.

The Office of the High Representative (OHR)

162. Bosnia and Herzegovina is an international protectorate governed by the Office of the High Representative (OHR). The current High Representative (HR), Lord Ashdown, has made great efforts to strengthen the institutions of the Bosnian state and to fulfil the terms of his mandate, according to the 1995 Dayton Peace Agreement. These are to:

Monitor the implementation of the peace settlement;

Maintain close contact with the parties to the Dayton Agreement, to promote their full compliance with all civilian aspects of the Agreement;

Co-ordinate the activities of the civilian organisations and agencies in Bosnia and Herzegovina to ensure the efficient implementation of the civilian aspects of the peace settlement;

Facilitate, as the High Representative judges necessary, the resolution of any difficulties arising in connection with civilian implementation;

Participate in meetings of donor organisations;

Report periodically on progress to the United Nations, European Union, United States, Russian Federation and other interested governments, parties and organisations;

Provide guidance to the United Nations International Police Task Force (IPTF).[215]

163. The Peace Implementation Council (PIC), which comprises 55 countries and agencies that support the peace process in many different ways—by assisting it financially, providing troops for NATO's Stabilisation Force (SFOR), or directly running operations in Bosnia and Herzegovina—delegates powers to the HR; its meetings take place infrequently, leaving the HR a great deal of discretion to govern freely, given that the UN Security Council granted the HR use of the "Bonn Powers" in 1997. These give the High Representative the right to remove from office public officials who violate legal commitments and the Dayton Peace Agreement, and to impose laws if Bosnia and Herzegovina's legislative bodies fail to do so.[216] Lord Ashdown is also the EU's Special Representative (EUSR) in Bosnia. In this capacity he acts for the Council of the EU in BiH and controls the EU Police Mission. "The EUSR is tasked with maintaining an overview of the whole range of activities in the field of the Rule of Law and in this context with providing advice to the Secretary General of the Council of the EU and High Representative for the Common Foreign and Security Policy (SG/HR) and to the European Commission, as necessary."[217]

164. The OHR under Lord Ashdown has sought to establish a more effective central state in BiH, in line with the priorities in the OHR Mission Implementation Plan (MIP) 2004. Targets for reform include building up the rule of law in BiH, economic reform, contributing to a sense of responsibility in public office, the rationalisation of government and central control of the defence and intelligence sectors. These efforts mark an increasing impatience on the part of the international community to see BiH stand as a state in its own right.[218]

165. Giving evidence to our inquiry, Lord Ashdown outlined his vision for the OHR, saying that "shortly after I became High Representative I established a thing called a Mission Action Plan which identified the tasks I need to do and, as they were completed, closed down those portions of OHR in order to pass them across to the Bosnian authorities. We have been following an aggressive programme of reduction, of down sizing, 25 per cent this year."[219] However, Lord Ashdown went on to warn against an overly rapid reduction in the HR's role. He said: "I do not think anybody is talking, nor should they, of an ending so one day it is there; the next day it is gone…I think you are talking about a transition process. The road ahead of us is after Dayton and before Brussels. That is the watershed we are now approaching."[220]

166. However, the sheer scale of the Bonn powers has raised concerns about the HR's impact on BiH. For instance, the dismissal of 60 Serbian officials for obstructing the work of ICTY in June 2004 raised questions about the effective development of democracy in BiH. Dr David Chandler, Senior Lecturer in International Relations at the Centre for the Study of Democracy, University of Westminster, told us that the post of HR is problematic: "For every other country the EU is very keen to have democracy, human rights and rule of law, but in Bosnia there is a Special Representative with the power to sack elected officials, to take away people's bank accounts, to dismiss them without any court of appeal and to impose legislation. You can see there is a slight element of double standards there."[221]

167. Misha Glenny also raised concerns about the culture of political dependency in BiH. He told us: "Lord Ashdown has said that his aim is to try to divest himself as soon as he can of the Bonn powers and get out of Bosnia and Herzegovina. I think that is a very laudable aim. I think he is to some extent caught in the straitjacket of the office and the way the office was established and how it has developed, and the ad hominem attacks I do not think are valuable in any respect at all…[but] I am concerned when he used these powers to dismiss either elected officials or civil servants without any requirement to explain why."[222]

168. The Government supports the retention of the Bonn Powers for the moment. Ms Pierce told us: "In our view, the removal powers are likely to be necessary for quite a while, not least because that is a guarantee, if you like, that Bosnia can keep making progress forward. Notwithstanding that, there may be some circumstances about to arise in which the only way to get certain legislation through parliament might be imposition, particularly in respect of some of the economic legislation, but Lord Ashdown would use it sparingly and we would support that split between removals and imposition."[223] The use of the powers, however, is very controversial in BiH; for instance, their application to obstructive officials prompted the resignation of the Bosnian Serb Prime Minister in December 2004.[224]

169. Other concerns include the transferral of powers from the OHR to the EUSR. Lord Ashdown described how he sees the OHR's role changing over the next few years as BiH moves towards the EU and NATO. He told us: "The High Representative then becomes less—capital letters—High Representative; small letters eusr and more—capital letters—EUSR; small letters high representative. You may want to keep both hats in this process of transition but it becomes a far more European led process."[225]

170. Dr Chandler raised concerns about passing the OHR's powers onto a EUSR. He wrote in his submission: "There can be little doubt that there has been a transition from the ad hoc, unaccountable, and largely unfocused, rule of the Peace Implementation Council. Yet this has not been one towards Bosnian ownership. Even the EU recognises that 'BiH 'ownership' of reform remains limited' with international initiative, input and pressure guiding the process of transition….The BiH public have been excluded from the transition process and while there is general support for EU membership there has been little public discussion of the costs and benefits involved."[226] He went on: "The strengthening of executive power through the new institution of the DEI [Directorate for European Integration] has been an integral part of the transition to more direct EU involvement, which has necessitated the 'rebranding' of the 'anomalous' Bonn powers of the High Representative."[227]

171. We conclude that the hard work of Lord Ashdown in Bosnia and Herzegovina (BiH) is most commendable. However, we also conclude that plans to reduce the role of the High Representative are essential to the establishment of an effective non-dependent state in BiH and we have concerns about the impact of the Bonn Powers on the evolution of democracy in BiH. We recommend that the Government encourage its partners to speed the transfer of competencies to the BiH government at the same time as increasing EU involvement in BiH, in a manner conducive to the long term development of democratic standards.

Bosnia's constitution

172. The peculiar elements of the state of Bosnia and Herzegovina emerged from the Dayton Peace Agreement; Annex 4 of the Agreement set out the constitution, which is probably unparalleled in its complexity but reflected the realities on the ground in 1995. At the highest level the state has a three person rotating presidency, which represents the three ethnic groups in BiH, and a bicameral parliament which elects a Council of Ministers (CoM). A recent change to the Constitution has introduced the post of Chairman of the CoM. Below the state-level are the two entities—the majority Serb Republika Srbska (RS) and the Croat and Bosniak (Muslim speakers of Serbo-Croat) Federation of Bosnia-Herzegovina (FBiH). The district of Brcko is an internationally administered region subject to the Bosnian state. Republika Srbska's government then falls to local municipalities, but the Federation separates into ten almost ethnically homogeneous cantons populated by either Bosniaks or Croats before municipal government. The entities have different characters; Republika Srbska essentially carries out similar activities to an independent state, such as gathering taxes and administering hospitals. The Federation of Bosnia and Herzegovina, however, is a weak entity and many of its cantons govern without consulting Federation authorities. The Federation has a budget of KM 1.25 billion (300 million Euro approx) which is spent on two main tasks: financing the federation army and veterans' benefits. The cantons carry out most governmental work.[228]

173. However, the demands of state building have underlined the necessity of constitutional reform in Bosnia. Dr Eyal described the logic behind the shift from Dayton. He wrote in his submission: "In theory, the Dayton Accords concluded in 1995 govern the administration of Bosnia and the country's future. In practice, all the activities of the international community have been to move away from the Dayton agenda, which was based on the assumption that, before uniting the country, an effective separation must be accomplished. The last few years have been spent, naturally, on reunifying the entities and providing Bosnia with functioning central institutions, while safeguarding the rights of its various communities."[229]

174. The question of constitutional reform is disputed. Local politicians differ markedly over proposed constitutional changes while the international community is reluctant to tamper with Dayton.[230] Lord Ashdown told us: "The answer to your question, 'Does the constitution have to be reformed?' is self-evidently yes. It must be. You have a state in which there are far too many layers of government. You have a state which, depending on whether you are talking about the Federation or Republika Srbska, spends somewhere between 70 per cent, some argue, and around 50 per cent of the total taxpayers' money governing itself and only 30 per cent on its people…[But] let us very clearly say that if this constitution has to be changed it can only be changed by the people of BiH. It cannot be changed by the international community."[231] However, some constitutional changes have already taken place. Lord Ashdown described how the OHR amended Dayton to put the power to control the armed forces at the state level, to create a state wide VAT system and to create a state-wide governance and disciplinary body for the judiciary.[232]

175. The constitutional system in BiH stretches beyond the formal arena. Dr Chandler argued that constitutional reform in BiH has also taken place on an informal level. He told us:

A lot of people have argued that Dayton is so cumbersome that it is difficult to transform things, but in fact Dayton was a hugely flexible agreement. The only people who signed up to it were the neighbouring countries and the Bosnian government. Everyone else involved, the international institutions and international agencies, all wrote their own mandate and they are not bound by Dayton…No one imagined that the role of the Office of the High Representative would be transformed. No one imagined that ten years after Dayton was signed there would be a continual extension of mandates of international institutions. Dayton has been extremely flexible and even though there are 15 to 20 prime ministers and all this government, that is in a fictional world.[233]

176. We asked the Minister about constitutional reform in BiH. He told us: "Dayton was very complicated but let us also acknowledge that under Dayton Bosnia Herzegovina has been able to come to an increasing modus vivendi where, certainly under Lord Ashdown's leadership, we have seen a lot of progress. The killings are not happening, there is greater integration between the communities—much more with the Bosnia Croat community I accept than with the Serb community—and if there is political will in Bosnia Herzegovina right through the three communities then I think quite swift strides can be made."[234] As a reflection of the reality on the ground and as a tool to prevent conflict, then, the Dayton Agreement has proven effective. However, its constitutional structure is clumsy and could limit the future development of the Bosnian state, although movement towards the EU could precipitate some changes in the constitutional order.

177. We conclude that the international community should not impose a new constitutional structure from outside, but should nurture the state structures that could make constitutional reform easier. However, we also conclude that while the Dayton Agreement is a complex document, difficult to reform, some elements of the existing constitutional structure, such as the powers of the High Representative (HR), are more informal and flexible. We recommend that the Government work with its partners to ensure that the more informal elements of BiH's constitution are fully incorporated into the emerging state structures, in a democratic manner.

The political framework

178. Like the rest of the Balkans, Bosnian politics have lately seen a nationalist upsurge—most overtly in the elections of October 2003 but also in the local elections of 3 October 2004. These elections resulted in gains by nationalist politicians, although in Republika Srbska the more hard line Serbian Democratic Party (SDS), previously headed by war crimes indictee and former Bosnian Serb president, Radovan Karadzic, lost place to the Union of Independent Social Democrats.[235]

179. To date, Lord Ashdown has made clear his willingness to work with nationalist politicians in BiH, and some nationalists have proven happier than expected to support reform.[236] He told us: "My job is to work with those the ballot box elects. This is not called favouring the nationalist, it is called democracy…My rule of thumb with the Balkans has not been to judge a party by its name or its label but to judge a party by what it does. If they do good things, I work with them. If they seek to obstruct that progress, then I seek to provide them with reasons for not doing so."[237] He pointed to the range of reforms which the nationalist parties had pushed through, including the establishment of a state-wide system of VAT and a state-wide body for the judiciary.

180. However, Misha Glenny raised doubts about the health of the political system in BiH. He told us: "The lack of incentive for Bosnian politicians to act with any accountability or responsibility remains very high, in my opinion…As long as so much power is concentrated in the centre they are not having to address the concerns of their electorate, and this is a key problem in Bosnia."[238] Lord Ashdown conceded that dependency was a problem, when he told us: "I think the use of these [Bonn] powers which take a lot of oxygen from the system creates a degree of dependence."[239] We heard in Sarajevo that many politicians in BiH are unwilling to take difficult decisions and prefer the OHR to carry out controversial tasks.

181. An additional political problem is the poor standard of inter-communal relations. For instance, the reconstruction of the bridge at Mostar has done little to end the segregation of the Croat and Bosniak communities in the city, and the number of refugees who have returned to Republika Srbska is very low. While admissions of guilt by the Serb authorities, such as that made by Bosnian serb president Dragan Cavic in June 2004, are a most welcome contribution to a new communal spirit, greater efforts to reforge inter-communal trust and understanding are essential for BiH's future.[240]

182. We conclude that nationalist politics is a natural aspect of the democratisation process in Bosnia and Herzgovina. However, we also conclude that the centralisation of decision-making has resulted in a failure to accept responsibility by BiH's politicians. We recommend that the Government and its EU partners do more to counteract nationalism by fostering civil society in BiH and to increase the stake of the Bosnian people in the political process by encouraging the integration of Bosnian politicians into the European mainstream, by fostering exchanges and links with international parliamentary institutions. We also conclude that BiH's politicians must work harder to re-establish trust between the communities.

EUFOR

183. The European Union's EUFOR took over from NATO's SFOR on 2 December 2004, and will now provide security for BiH.[241] This marks a significant change in the US attitude to the European Security and Defence Policy (ESDP), and a significant challenge for the EU. Per Norheim-Martinsen, from the Centre of International Studies at the University of Cambridge, wrote: "The symbolic value of the take over is striking. It was the events that followed the break-up of the former Yugoslavia which so painfully revealed the shortcomings in Europe's military capabilities. Now, EUFOR will provide the first real test case for the European Security and Defence Policy (ESDP)."[242] We agree; this is a far more difficult operation than that in Macedonia. Officials in Brussels see the operation in Bosnia as crucial for the development of a European military capability and point to the package of EU development assistance combined with military strength as a 'carrot and stick' option unavailable to NATO. However, Per Norheim Martinsen added the proviso that the venture was bold, "since another European failure in the Balkans would probably bury the EU's military aspirations for good."[243] The grave doubts retained by the Bosniaks about Europe's will to act militarily, given their memories of the 1992-1995 UNPROFOR mission, still overshadow the operation.[244]

184. EUFOR consists of 7,000 troops, initially commanded by the United Kingdom's General David Leakey. The International Crisis Group said in a recent paper:

Things have changed in Bosnia and Herzegovina since 1995; the main security challenges now are weapons smuggling, the apprehension of war criminals, extremist religious groups, and border security, rather than the separation of combatants which was the main achievement of the NATO mission. The mandate of EUFOR should reflect that new reality. There need to be clear channels of communication with the other EU operations in Bosnia, in particular the EU Police Mission, and overlap must be avoided with the role of the NATO in-country headquarters or any separate US forces remaining on the basis of a bilateral agreement with BiH.[245]

Lord Ashdown described EUFOR's mandate. He told us: "There will be a slightly expanded mandate…so that EUFOR can get more easily involved in the whole business of organised crime. The mandate change…is so that EUFOR might look much more like KFOR… its gendarmerie element will be raised and it will have a capacity to get involved in tackling organised crime."[246]

185. Continued peace in BiH is essential for the development of the Western Balkans as a whole. We asked Lord Ashdown about the potential problems during the transition. He told us that people in BiH "will watch [the transition] with considerable care but I think increasingly, as they have seen the two operations work together, visibly work together, when delegations come out from NATO and delegations from the EU are integrated into it, I think they have been considerably reassured."[247] However, Per Norheim Martinsen pointed out that "other actors, most importantly NATO and the OSCE, will retain a strong presence, leaving Lord Ashdown with the unforgiving task of coordinating all activities."[248]

186. The division of labour between EUFOR and NATO is a source of some uncertainty, since UN Security Council Resolution 1575 leaves the separation of powers to the two organisations; we heard informally that areas of overlap with NATO include defence reform and the question of reserves. However, the number of British personnel involved at the highest level—since the United Kingdom provides the Deputy Commander of SFOR/NATO, the Commander of EUFOR and the High Representative—should improve co-ordination. Dr Whyte told us: "I think people are bending over backwards to try and prevent any such conflict and this is why the two officers in charge of it are British. This is an attempt to finesse the differences between the EU and NATO."[249]

187. Lord Ashdown told us: "The question is how this all [locks] together at the top level as between General Leakey, the British Commander designate, and General Schook, the remaining SFOR Commander/NATO Commander for the NATO office in BiH. There has to be very close liaison but I am very confident that that has happened. These two guys get on very well together; they have worked extremely closely together, including with me, so I am pretty confident that this changeover, difficult and important though it is, is going to go well."[250] Following separate meetings with General Schook and General Leakey we share their confidence—in part because had EUFOR not taken on the commitment at the current level of 7000 troops, SFOR had plans to halve the number—but good personal relations must lay the basis for effective protocols of understanding which would survive a change of personnel.

188. Other concerns include the number of national caveats and the structure of command within the EU, although we heard in Sarajevo that many of the caveats had been removed thanks to the hard work of Generals Schook and Leakey. Dr Whyte also told us that "the EU force will not just be an EU force; it will include at least…11 eleven other countries…I am a bit concerned about the lines of command and control…when you have Moroccan or Canadian or Turkish soldiers under EU command in an operation that is run by the Political and Security Committee in Brussels on which there are no Canadian, Moroccan or Turkish representatives, but there are indeed representatives of Denmark and Luxembourg, two countries which will not be participating."[251]

189. We conclude that the launch of EUFOR is of the greatest importance for BiH and for the credibility of a European security and defence policy. We also conclude that the United Kingdom has a special responsibility to ensure that the transition from SFOR to EUFOR is smooth because of the large number of senior British personnel involved. We recommend that the Government work to clarify the different responsibilities of NATO and EUFOR in BiH, and with military contributors outside the EU. We also recommend that the Government urge its military partners to continue their work to reduce the number of national caveats amongst EUFOR troops.

The Hague Tribunal

190. The ICTY is a major issue in BiH, since Radovan Karadzic, the former Bosnian Serb president, Ante Gotovina, a Croatian general, and Ratko Mladic, the Serb general, may at times be in hiding in the state. BiH's efforts to join the EU and NATO have stalled because of non-compliance with the Hague Tribunal.

191. Gabriel Partos told us "that General Mladic and Mr Karadzic are symbols of the utmost importance and for any kind of progress towards NATO or EU membership, or indeed the reforms which are bringing the different entities of Bosnia into a genuinely functioning state to succeed, it is essential that those symbols of the war in Bosnia, of the divisions and the ethnic cleansing are dealt with through the mechanisms of international justice."[252]

192. Locating the war criminals is not easy for the international community since they flit between Bosnia, Croatia, Montenegro and Serbia, and substantial elements within BiH support them. Lord Ashdown described the lack of co-operation on the ICTY from Banja Luka, saying: "If somebody wants to understand why SFOR has not arrested Karadzic and Mladic, one of the reasons is that [Republika Srbska] has provided zero cooperation…Twenty war criminals have been arrested on the territory of [Republika Srbska], all of them by SFOR troops, none of them by [Republika Srbska] authorities."[253] He went on to describe the difficulty of apprehending war criminals. He told us: "These guys are wandering over the wildest mountain vastnesses in south eastern Europe. I do not know whether Karadzic is there but let us presume he might be somewhere between the Zelegora and Dornberg, which is wildly mountainous. Tito hid 7,000 partisans from six German divisions. They did not catch them in that area. This is not an easy military task."[254] However, the military dimension is perhaps less important than encouraging local authorities to co-operate with the ICTY. Misha Glenny told us: "It is very difficult to see how to do that. Karadzic is very effectively hidden; nobody knows where he is; they have come close to getting him a few times. I cannot see any way to incentivise the local population; there are already huge rewards on these people's heads."[255]

193. Lord Ashdown has started to act in a more robust manner to tackle the indictees' support networks. For instance, on 1 July 2004 he sacked 60 prominent politicians in the Serbian Democrat Party (SDS) in the Republika Srbska for not co-operating with the ICTY, and increased his pressure for compliance with the removal of 9 Bosnian Serb officials in December 2004. He described his approach: "We were following the policy in which you shook the tree and you hoped the fruit would fall. Now we are beginning to attack the tree, its branches and its network. I am using my political powers to work against those who are supporting the war criminal support networks, freezing bank accounts, European visa bans, removals from time to time. We are not just going after the individuals. We are going after the whole support structure."[256] The Minister expressed support for Lord Ashdown's policies, and made clear that the entire of Bosnia and Herzegovina must fulfil the demands of the international community.[257] The policy appears to have produced results, with the delivery of the former commander of the Foca concentration camp, Savo Todovic, by the government of Republika Srbska.[258]

194. Some commentators, though, have concerns about such a robust policy. Dr Eyal told us that "it is a very tight, very difficult job to try on the one hand to encourage the country and, at the same time, not to hold them up to blackmail by Republika Srbska."[259] He added that the answer to the question lay in Belgrade. "I think that Bosnia, quite frankly, is a bystander to the process…[but] what we are engaged in is a very careful balancing act of reassuring the Serbs of Bosnia that they are not completely detached from Serbia…Any other policy will make the management of Bosnia's internal politics ten times worse."[260] The reaction of the Bosnian Serbs to Lord Ashdown's latest use of the removal powers—the resignation of Bosnian Prime Minister Dragan Mikerevic—demonstrates the political problems associated with the ICTY.[261] However, the answer to charges of authoritarianism on the part of the HR lies in part with local politicians who have declined to deliver.

195. One means to find a compromise might be the establishment of war crimes trials in Bosnia. Bosnia's Deputy Chief Prosecutor, John McNair, recently said in September 2004 that plans to transfer some more sensitive cases from The Hague to Sarajevo would take effect in January 2005; Bosnia's lower courts have already tackled some minor cases.[262] However, we heard informally on a visit to The Hague last year that ICTY officials harbour serious concerns for the safety of witnesses and the impartiality of trials.

196. Lord Ashdown described the work to transfer war crimes trials to the ground. He told us: "Bosnia and Herzegovina cannot be a stable state and a functional state unless it has the capacity to try its own war criminals. I give you a view; I do not think that will ever include the capacity to try somebody like Karadzic or Mladic, not in the foreseeable future. That is a job that will have to rest with the Hague for a bit."[263] He added that building the capacity is slow—for instance, BiH is still constructing a prison for war criminals.

197. We conclude that the policy of the High Representative to root out the support networks of the war criminals is sensible and a means to ensure thoroughgoing reform of BiH. However, we recommend that the Government seek to encourage co-operative elements in BiH, for instance by targeting development aid to those regions which have fulfilled the requirements of the ICTY and by encouraging the EU and its constituent states to do the same.

NATO, defence and police reform

198. Bosnia also seeks admission to NATO's Partnership for Peace (PfP) programme. However, at the June 2004 Istanbul summit, the existing members issued a communiqué saying:

We welcome Bosnia and Herzegovina's significant progress in defence reform, a key condition for PfP membership. We urge continued progress towards achieving a single military force. We have agreed to designate a Contact Point Embassy in Sarajevo to increase understanding of NATO. We are concerned that Bosnia and Herzegovina, particularly obstructionist elements in the Republika Srbska entity, has failed to live up to its obligation to cooperate fully with ICTY, including the arrest and transfer to the jurisdiction of the Tribunal of war crimes indictees, a fundamental requirement for the country to join PfP. We also look for systemic changes necessary to develop effective security and law enforcement structures.[264]

199. The United Kingdom delegation wrote: "Since 1996 NATO has conducted a Security Co-operation Programme with BiH to promote cooperation between the armed forces of the entities in BiH, contribute to stability in BiH and the region, and to assist in preparing BiH for eventual accession into Euro-Atlantic structures. The Programme has become a significant contributor to security sector reform in BiH and has contributed to the work of the Defence Reform Commission, through activities such as workshops and expert visits to BiH, and BiH participation in selected PfP activities, mainly NATO courses. The NATO headquarters which will be established in Sarajevo when SFOR completes its mission, will play a key role in implementing the cooperation programme."[265]

200. The OHR has worked hard towards defence and intelligence sector reform, which is one of its four top priorities. The key aims set out in its Mission Implementation Plan include establishing state level command structures; introducing BiH parliamentary oversight of the armed forces; and pursing a state level security policy.[266] Lord Ashdown described progress on defence reform: "By the end of this year [2004], the BiH state will have ticked all the boxes, in all probability, for defence reform. It will have met all the NATO PfP criteria, leaving aside co-operation with the ICTY…The area we have to pay attention to is when NATO takes over the lead of the defence reform process there must be no slowing down on the impetus for that…On the intelligence side, it is not easy to combine two Communist style intelligence services who spend more time spying on their people than spying on outside forces into a single, state-wide European standard intelligence structure accountable to parliament."[267]

Other security aspects include efforts to reform the police system. At present, the EU offers limited support for police reform in BiH. The FCO wrote in its submission: "The EU Police Mission to Bosnia (EUPM) took over from the UN's International Police Task Force at the beginning of 2003. It consists of around 474 police officers and 66 international civilians from EU member states and third country contributors. The UK currently contributes 56 officers and 11 civilians. The mission's aim is to establish sustainable policing arrangements under BiH ownership in accordance with best European and international practice…It has 4 strategic objectives; police independence and accountability; the fight against organised crime and corruption; financial viability and sustainability, and institution and capacity building at management level."[268]

203. However, Lord Ashdown's initiatives for policing might go further, for instance by uniting the police service of Bosnia and Herzegovina at the national level. Dr Whyte told us: "One specific security issue that we are facing in Bosnia in the next few months is the question of police reform. You may be aware that Lord Ashdown has set up a special commission to look at this. I would not be surprised, in fact I would welcome it, if his recommendation turns out to be a kind of nationalising of the Bosnian police, removing security responsibilities from the entities…One does find other countries where the main police force is national rather than local, particularly if, as there is in Bosnia, there is a problem with local competence, local corruption of the police force that happened to be on the ground. I think that could be a very interesting development and that could well be the crisis point where we see the EU's courage put to the test."[269]

204. We conclude that BiH has made real progress on defence reform, although more needs doing; Sarajevo must comply with demands from the ICTY before acceding to PfP. We recommend that the Government continue its efforts alongside its NATO allies to support defence reform in BiH. We also conclude that an effective police service would act as a crucial prop for the Bosnian state and we recommend that the Government provide expertise and financial support to the efforts to establish a national system of policing, and to prepare for potential problems arising from any response to police reform.

EU accession

205. Bosnia has aspirations to join the EU. Dr Anastasakis told us: "I think it is time for the EU to act in a much more broad way [in BiH] and deal not just with reconstruction or reconciliation, because I would say this has evolved in quiet a satisfactory way, but also with development issues, which are particularly acute in that part of the Western Balkans."[270] The Embassy of Bosnia and Herzegovina emphasised Sarajevo's determination to join the EU, and the EU will provide a strong incentive for improvements in local governance.[271]

206. BiH underwent a Feasibility Study in November 2003 as part of the SAp to assess its readiness for a SAA, but failed to fulfil the necessary criteria. The Feasibility Study stated: "BiH has not yet assumed full responsibility for government. It still needs to show through its own efforts that the High Representative's 'Bonn Powers' are no longer needed, particularly in areas to be covered by an SAA."[272]

207. The report outlined 16 priority areas of action, which were mainly economic. They were:

Compliance with the ICTY
More effective governance
More effective public administration
Full functioning of the Directorate for European Integration
Effective human rights provisions
Effective judiciary
Tackling crime, especially organised crime
Management of migration
Customs and tax reform
Introduction of budget legislation
Budget practice, such as accurate recording of information
Improving statistics
Establishment of a consistent trade policy
Restructuring of the electricity market
Harmonising economic practices across BiH
Legislation on public broadcasting[273]

208. We asked Lord Ashdown about progress towards the EU. He pointed us to a statement by the PIC on 22 September 2004, in which it "said that Bosnia and Herzegovina had made real progress on the 16 conditions. My Bonn powers have been used on none of these…The [European] Commission made it clear…that BiH had to do this themselves and I could not do it for them. It is also the Commission's view…that provided this progress continues there is no reason why negotiations for an SAA should not be commenced in the early months of about the spring of next year."[274] He pointed to the lack of a unified public broadcasting system as one particular problem for BiH's path towards EU accession.

209. Ultimately, two major obstacles stand in the way of BiH's path to the EU. Firstly, non-compliance with the ICTY prevents any progress along that path.[275] Secondly, the existing constitutional structure may not fit into the EU. The Minister told us: "I do not think the present constitution is as EU friendly or compatible as one should wish."[276] However, the constitution may not prevent BiH entering into some form of relationship with the EU, since the EU is able to accommodate a highly decentralised state such as Belgium.

210. The Minister made clear to us that BiH must enter the EU in entirety, and that the ICTY will remain a pressing issue even if only one of the entities refuses to comply with its terms. He told us: "I do not want to give any indication that there is any thought by the British Government of a kind of repartition of Bosnia-Herzegovina by separating the country into those that are EU compliant and those that are not. It is a state as a whole and the state must also accept its responsibilities."[277]

211. We conclude that the EU is the ultimate destination for BiH, but that certain obstacles such as the question of compliance with the ICTY and Bosnia's constitutional structure slow progress. We conclude that BiH must enter the EU as a whole, and we recommend that the United Kingdom provide support in certain technical areas, as defined by "market share" discussions at the EU level, to speed the process of integration.

Rule of law and the economy

212. The OHR's Mission Implementation Plan 2004 outlined the establishment of the rule of law as one of its four priorities in 2004, saying: "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 and Herzegovina cannot survive as a state, let alone integrate into Europe."[278] Its key priorities focus on: the establishment of new civil and criminal codes; the development of an independent prosecution service; the establishment of state level judicial institutions, such as a BiH State Court and Office of the Prosecutor; a restructuring of the court system; the domestic prosecution of war crimes; progress against corruption; removing obstructionist elements from key institutions; and reshaping the BiH criminal law enforcement institutions, by establishing the State Information and Protection Agency (SIPA).[279]

213. The International Crisis Group said in a paper in 2002 on the rule of law in BiH:

The law does not yet rule in Bosnia & Herzegovina. What prevail instead are nationally defined politics, inconsistency in the application of law, corrupt and incompetent courts, a fragmented judicial space, half-baked or half-implemented reforms, and sheer negligence. Bosnia is, in short, a land where respect for and confidence in the law and its defenders is weak.[280]

The EU also raised the rule of law in its November 2003 Feasibility Study of Bosnia and the SAp, saying: "Under a SAA the contracting parties [BiH and the EU] would attach particular importance to the consolidation of the rule of law and the reinforcement of institutions at all levels in the areas of administration in general and law enforcement and the machinery of justice in particular."[281]

214. We asked Lord Ashdown about his efforts to strengthen the rule of law in BiH. He made two points: "The first is that corruption, crime and criminality follows war like a dark shadow…It is hardly surprising that, in a war in which 250,000 were killed and half the population driven from their homes, criminality should be there. So, second point; this therefore needs to be priority number one when you move in after war. The very first thing you need to do is tackle the rule of law issue…If necessary, creating martial law. If you do not make it priority number one, everything else will be subverted by the process. You want to hold elections, the criminals will get elected. You want to have investment into the country, no will provide it…we took seven years to make rule of law priority number one, so it is hardly surprising that corruption is endemic in the system."[282] Lord Ashdown added that the OHR has removed large numbers of corrupt judges, changed the law, and set about tackling the problems of corruption and human trafficking. He then told us: "I am sure you can introduce proper rule of law functions without affecting democracy."[283]

215. We conclude that Lord Ashdown's efforts to establish the rule of law in BiH are commendable, although democratic accountability remains a serious concern. We recommend that the Government stress to its EU partners the importance of establishing an effective rule of law throughout BiH, and that it take the lead with them in strengthening the physical infrastructure and personnel to this end, including the training for judges and legal employees.

216. Another serious challenge is the state of BiH's economy. The devastation wrought by the war, which destroyed nearly half of all capital stock and left industry operating at 10% of capacity in 1996, and the social ownership system of Yugoslav communism, which makes privatisations very complex, have left Bosnia "grindingly poor".[284] By 2000, BiH's GDP was only 66% of its pre-war level, and much industry was loss making, indebted and increasingly illiquid, while agricultural plots were small and often unprofitable. Tax increases from the various levels of government placing a great burden on a weak economy have compounded the problem.[285]

217. The OHR's Mission Implementation plan emphasises that the revitalisation and harmonisation of BiH's economy is a priority, since differences between the economies of the Federation and RS are stark—both have separate tax codes, regulations and businesses.[286] The OHR Mission Implementation Plan says: "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)."[287] Lord Ashdown's initiatives include a Bulldozer committee comprising officials and prominent local businessmen, which will reduce obstacles to business in BiH, efforts to unify customs collection, and the implementation of a state-wide system of VAT, which would provide a secure revenue stream for the state institutions and strengthen their capacity to consolidate their position in relation to the entities and other levels of government.[288] Without such reforms foreign direct investment will inevitably not come to Bosnia.

218. We conclude that the economic development of BiH is central to the region's future stability and that external powers such as the United Kingdom and the EU can offer much in terms of aid. We recommend that the United Kingdom continue to support the reunification of the economy of Bosnia and Herzegovina through schemes such as the state wide system of VAT. We also recommend that the Government provide training in areas which would strengthen the economy, such as accounting and economic policing, second personnel with relevant technical expertise, and work with its EU partners to implement infrastructural projects which will integrate the BiH economy into the European mainstream.

Conclusion

219. We conclude that the international community must maintain its commitment to BiH, for fear that the good work to date be lost. Engagement by the United Kingdom and the EU with BiH is crucial for the success of the state building effort. We also conclude that the prominent role of British personnel in BiH makes success a particular concern and opportunity for the United Kingdom. However, we retain serious concerns about inter-ethnic relations, and the weakness of both democracy and the economy in Bosnia and Herzegovina.