alternative dispute resolution project in bosnia and herzegovina presented by: lada busevac, adr...
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Alternative Dispute Resolution Project in Bosnia and Herzegovina
Presented by: Lada Busevac, ADR Project ManagerBosnia and Herzegovina
Washington D.C., April 2006
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IFC PEP SE backgroundIFC 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
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PEP Southeast Europe: PEP Southeast Europe:
Guiding PrinciplesGuiding 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
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ExportExport• Between 3 and 5 times Between 3 and 5 times
harder to export with 9 harder to export with 9 documents and 15 documents and 15 signatures neededsignatures needed
Protecting InvestorsProtecting Investors• Companies 50% less Companies 50% less
transparent than the transparent than the region and shareholders region and shareholders amongst the weakest in amongst the weakest in the regionthe region
Contract EnforcementContract Enforcement• It takes 36 steps and 330 It takes 36 steps and 330
days to enforce contracts days to enforce contracts and the cost of enforcing and the cost of enforcing contracts is 19.6% of debtcontracts is 19.6% of debt
World Ranking
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Bosnia Serbia Albania Croatia Hungary Italy Holland
Export
Investor rights
Contracts
IFC’s target areas:
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ADR Project BackgroundADR Project Background
Needs identified in Bosnia and Herzegovina
• 1 million backlogged cases in 64 courts1
• 430 days to collect debt through court2
• 21 pending cases with a cumulative value of EUR 120.000 in Sarajevo region3
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 20042 - World Bank’s Doing Business Report 20063 – Finding of the Sarajevo Canton Chamber of Commerce
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Alternative Dispute Resolution Alternative Dispute Resolution ProgramProgram
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
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IFC’s Alternative Dispute Resolution IFC’s Alternative Dispute Resolution ProgramProgram
Duration
Three years (2005 –2008)
Continuation of SEED’s 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
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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 frameworkLegal framework
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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 Court-Referred Mediation Pilot ProjectsPilot Projects
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Why Court Referred Mediation?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
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Integrated approach and Integrated approach and sustainability 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
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Mediation center financing model Mediation center financing model
0%
20%
40%
60%
80%
100%
0 -6months
9months
12months
15months
18months
22months
Client Fees
Donor Support
Month 22 – Mediation center reaching its full financial sustainability
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Overview Bosnia - Herzegovina Overview Bosnia - Herzegovina Results March ’04 – March ‘06Results 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
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Public Awareness CampaignPublic 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.
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Work with the Association of Mediators in Bosnia and
Herzegovina• In BH Association of Mediators beneficiary of
IFC’s technical and financial assistance
• Positive management practices being put in place
• Association’s 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
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Mediation and integrationMediation 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.
MEDIATORS COURTS/LAWYERS
GENERAL PUBLIC GOVERNMENT
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In ConclusionIn 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
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However, there are still many issues…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
