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Alternative Dispute Resolution Project in Bosnia and Herzegovina Presented by: Lada Busevac, ADR Project Manager Bosnia and Herzegovina Washington D.C.,

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Presentation on theme: "Alternative Dispute Resolution Project in Bosnia and Herzegovina Presented by: Lada Busevac, ADR Project Manager Bosnia and Herzegovina Washington D.C.,"— Presentation transcript:

1 Alternative Dispute Resolution Project in Bosnia and Herzegovina Presented by: Lada Busevac, ADR Project Manager Bosnia and Herzegovina Washington D.C., April 2006

2 2 IFC PEP SE background IFC: Active portfolio in the country, $106m invested IFC PEP SE – Private Enterprise Partnership Southeast Europe Established on July 1, 2005 IFC managed two large TA programs in the Balkans: SEED and PEPSE Mandate: strengthen the private sectors in the Balkans (Albania, Bosnia and Herzegovina, Macedonia and Serbia and Montenegro) PEP SE projects in the areas of: Access to Finance Business Enabling Environment and Access to Markets Supply Chain Linkages Pipeline: Housing Finance, Microfinance, Registration

3 3 PEP Southeast Europe: Guiding Principles Focused and integrated approach to PSD in the region that emphasizes: a. Facilitation –Capacity building and utilizing local resources –Local implementation and ownership b. Mobilization –Coordinating donors, harnessing external resources –Working in partnerships c. Sustainability –Focus on local cost recovery –Building local markets

4 4 Export Between 3 and 5 times harder to export with 9 documents and 15 signatures neededBetween 3 and 5 times harder to export with 9 documents and 15 signatures needed Protecting Investors Companies 50% less transparent than the region and shareholders amongst the weakest in the regionCompanies 50% less transparent than the region and shareholders amongst the weakest in the region Contract Enforcement It takes 36 steps and 330 days to enforce contracts and the cost of enforcing contracts is 19.6% of debtIt takes 36 steps and 330 days to enforce contracts and the cost of enforcing contracts is 19.6% of debt IFCs target areas:

5 5 ADR Project Background Needs identified in Bosnia and Herzegovina 1 million backlogged cases in 64 courts 1 430 days to collect debt through court 2 21 pending cases with a cumulative value of EUR 120.000 in Sarajevo region 3 Project objective region wide Assist judicial reform underway, support introduction of commercial mediation and allow better access to justice and finance for businesses 1 - High Judicial and Prosecutorial Council, Annual report 2004 2 - World Banks Doing Business Report 2006 3 – Finding of the Sarajevo Canton Chamber of Commerce

6 6 Alternative Dispute Resolution Program Activities (region wide) Establish legal framework for mediation Establish regional network of 10 mediation centers Develop a pool of well trained mediators Support the development of local counterparts and foster their financial sustainability Raise awareness on mediation among businesses

7 7 IFCs Alternative Dispute Resolution Program Duration Three years (2005 –2008) Continuation of SEEDs ADR project started in 2003 Budget $ 3,1 million Donors Government of Canada through the Canadian International Development Agency September 2003- March 2006 Government of the Netherlands January 2006 – June 2008

8 8 Code on Civil procedure allows use of mediation Law on Mediation enacted in Bosnia and Herzegovina in August 2004 Law on transfer of mediation competencies to the Association of Mediators in BH enacted in July 2005 By-laws enacted in March 2006 Laws harmonized with EU recommendations and UNCITRAL model law Mediation Law allows for legal and non-legal professionals to become mediators Mediation agreement – executive title Legal framework

9 9 Aim to test effectiveness of mediation in terms of: reducing backlog, improving courts performance and allowing businesses better access to justice and finance Mediations taking place in mediation centers co- managed by IFC and Association of Mediators Working towards mediation self-sustainability by charging (subsidized) fees for mediation services Custom-made monitoring and evaluation methods used to measure effectivnes facilitate use of lessons learned Court-Referred Mediation Pilot Projects

10 10 Why Court Referred Mediation? Moving cases out of the court - reducing backlog – creating pipeline Positive judicial attitude towards mediation ensuring buy-in from parties Does not put additional burden on the judges Retaining legal protection offered by court decision/enforceable document Minimizing lawyers opposition Can eventually lead to a norm or culture of resolving disputes out-of-the-court

11 11 Integrated approach and sustainability Selection of cases Inviting parties and mediating cases IFC Mediation Center Partnership Agreement Memorandum of understanding Civil Society Institution (e.g. Association of Mediators ) Partner Court ADVISORY BOARD

12 12 Mediation center financing model Month 22 – Mediation center reaching its full financial sustainability

13 13 Overview Bosnia - Herzegovina Results March 04 – March 06 2 Mediations Centers in cooperation with Sarajevo Municipal Court and Banja Luka Basic Court 16 judges referring cases to mediation 12 fully trained mediators (lawyers and others) 254 mediations completed successfully (35% B2B) 57% success rate 7,6 million released - average 30,197 per case

14 14 Public Awareness Campaign Objectives Improve awareness of mediation as an alternative to the formal court system among legal professionals and business community and create demand Increase visibility of the Association of Mediators in front of key target audiences (legal community and potential corporate customers) on the market Variety of communication channels used: newsletter, web page, custom made presentations with professional BMOs, workshops, seminars, conferences, editorials, PR materials, etc.

15 15 Work with the Association of Mediators in Bosnia and Herzegovina In BH Association of Mediators beneficiary of IFCs technical and financial assistance Positive management practices being put in place Associations work promoted through an extensive public awareness campaign facilitated by IFC Financial sustainability being developed – offering commercially own training and consulting services A broad network of dedicated mediators is a guarantee for long term commitment to mediation development

16 16 Mediation and integration Success requires well-trained mediators working within an established legal framework with carefully drafted procedural rules and enforcement mechanisms. We then need to find a way to stimulate the use of ADR and to increase its acceptance among lawyers and judges, as well as the general public. MEDIATORSCOURTS/LAWYERSGENERAL PUBLICGOVERNMENT

17 17 In Conclusion Businesses understanding mediation benefits and creating demand I have resolved the total of 3 million KM disputes through mediation in just 180 minutes - 16 543, 81 KM per minute. My personal opinion is that it is better to have 50 000 KM today than 100 000 KM in a year because you can invest this in equipment and production materials today and earn even more money than 100 000 KM. Banja Luka Focus Group participant

18 18 However, there are still many issues… Low acceptance rate Lawyers and mediation Low judicial motivation to promote use of mediation Really assisting judicial reform? Lack of respect for the legal norm Short project timeline jeoperdizing project effectivenes

19 19 Thank you. Lada Busevac, IFC PEP SE Sarajevo, Bosnia and Herzegovina lbusevac@ifc.org


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