Reform of IIAs regime in Bosnia and Herzegovina or BIH version of The Fellowship of the Ring

Years ago, we (The BIH Fellowship of the Ring 💍 😉) embarked on a long and challenging journey of IIAs reform ✂️ in Bosnia and Herzegovina 🇧🇦. Most considered it impossible and pointless while only a few welcomed the effort or offered support. There were times when even the closest collaborators or superiors were looking somewhere in the distance behind me struggling to comprehend how different pieces of the puzzle fit together and what the desired picture should look like.

Many times I felt like Antonio Banderas embodying Ahmad ibn Fadlan in the “The 13th Warrior” as only a few could speak the language of the IIAs 🤲 and me and my Fellows 🕵🏼 were not anywhere near the end of the journey. They did not want to offend me but my insistence and repeating of the same story over and over again started to tire people. I have no evidence, but I am pretty sure people in the Ministry were calling me "Ms Agreement".🤭 Indeed, it is difficult to run long races and keep the focus on the result when the only thing you can see are unconnected pieces from time to time. At moments, it looked like The Fellowship was putting off some tasks by explaining that, before taking them onboard, we still have to do this and that. But that was far from the truth.

Like in every good story, I first gave you glance to few sequences from the period when the whole process already evolved. It actually started much earlier. In October 2014 I attended #UNCTAD IIAs conference in Geneva. Being aware of the problems looming from different angles in my address I highlighted that for countries in transition like Bosnia and Herzegovina it is important to have an all-inclusive forum for discussion on this issue the importance of which is ever growing. I also said that we believe that, in a short term, only a gradual and very careful case by case approach was possible. That in no way meant that comprehensive reforms were deemed impossible or unnecessary. On the contrary, we believed that reforms in BIH should be phased in over a certain period of time and include a set of different actions. Once I have got back home from Geneva, The Fellowship started its journey. 🌋

✔️ Based on the conclusion of the Council of Ministers of Bosnia and Herzegovina (CoM BIH), we prepared a comprehensive Analysis of the effects of the agreements on the promotion and protection of investments concluded by BIH with proposals for further activities. By adopting it on 29 December 2016 the CoM BIH, inter alia, introduced a moratorium on the conclusion of new agreements of this type, until the end of the activities from the adopted analysis and until the end of the reform.

✔️ The next most pressing activity was to establish or reinforce the coordination between competent institutions once the notice of arbitration is received. On 24 November 2017 the CoM BIH adopted the Decision on the Establishing of the Negotiating Body of Bosnia and Herzegovina for the Peaceful Settlement of International Investment Disputes (Negotiating Body). It consists of one representative from the General Attorney’s Office of Bosnia and Herzegovina, the Ministry of Finance and Treasury of Bosnia and Herzegovina, the Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina, and the Ministry of Justice of Bosnia and Herzegovina forming a permanent part of it.

The task of the Negotiating Body is to coordinate the process of peaceful settlement of an international investment dispute with the aim of supporting the Office of the General Attorney of BIH as the legal representative of Bosnia and Herzegovina, whereas each member acts within the jurisdiction of the appointing institution or legal entity. In the process of acting upon a specific request of a foreign investor for the peaceful settlement of a dispute, the Negotiating Body is supplemented by one member (on an ad hoc basis) from other institutions.

✔️ Sometimes in parallel, The Fellowship started to work on the new, reformed, IIAs policy framework. There were more than a few reasons why the reform had to be done, e.g.:

1️⃣         growing number of investment arbitration claims against 🇧🇦;

2️⃣         the need to safeguard the right of 🇧🇦 to regulate in public interest;

3️⃣         modernization and additional precision of the key provisions, including the most recent best practice addressing the actual changes in the world (e.g. climate changes, energy transition, sustainable development, labour and human rights etc.);

4️⃣         balancing of rights and obligations between the 🇧🇦 State and investor(s);

5️⃣         aligning with EU policy reflected in the relevant legislation and investment treaties concluded by the Union, as well as meeting obligations that Bosnia and Herzegovina undertook in the Stabilisation and Association Agreement;

6️⃣         taking into account the specificities of 🇧🇦 as a net-recipient of investments.

With all of this in mind we created the new Principles and Standards of Investment Protection in the Agreements on the Promotion and protection of investments concluded by Bosnia and Herzegovina and based on that, a new Model text for the Agreement on the Promotion and Protection of Investment. The CoM BIH adopted the Principles and Standards on 23 August 2023 marking a new era of IIAs in 🇧🇦 (New BIH IIAs Principles and Standards).

✔️ Still, there were few pieces missing. On the one side we needed a link before we enter into negotiations, and on the other, a link with aftercare. Thus, we focused our efforts on building the missing blocks.

1️⃣          First, by the end of June 2023 we completed a project with a talented group of people within the TradeLab project to develop a Methodology and Assessment Criteria for Concluding Bilateral Investment Treaties which is aimed to identify and organize economic, legal and political factors in a user-friendly format, enabling a fact-based assessment that can help the CoM BIH to assess the risks associated with any Bilateral Investment Treaty proposal.

2️⃣          Second, the CoM BIH supported the proposal and concept of establishing the Mechanism for Prevention and Early Detection of Investment Disputes and tasked us to prepare adequate regulation in that regard. The work on this important task is undergoing as we speak. 🚧

A special emphasis is placed on promoting and encouraging alternative forms of dispute resolution such as mediation. We have not come far in this regard and there is much to be done in the future. If used effectively, it can save us all a lot of time and resources. 💰

✔️ Last but not least, getting modern equipment without having people who can use it is like not having it at all. Therefore, with the great support of our friends and donors, we keep working on building expert capacities 📚💻 for both negotiation and implementation of investment treaties. I am proud of the rising 🇧🇦 stars 🌟 yet to be known to the world. 😊

So, The Fellowship eventually surmounted all obstacles and brought the jewel to its destination. Now it only remains that we live happily ever after. 🌈😁

👇 ....few more words ...

Note: The Fellowship’s journey has been supported all the way through by a great number of known or unknown benefactors who dedicated their funds, time, energy, expertise, goodwill, emotion or something else. They may not even be aware how much their, at times, small help was grandiose for us in important moments. It kept us in the race until the end of it. So this article is big thanks and praise to all of them. I intentionally do not mention anyone specifically as I might omit someone. They will all recognise themselves.

I am sure they all would agree, investing in The Fellowship was a good investment! 😉

• BIH Fellowship of the Ring means the BIH Team in the Ministry of Foreign Trade and Economic Relations of BIH dealing with IIAs
• IIAs – International Investment Agreements

#iias #investment #reform #isds #disputeresolution #arbitration #westernbalkan #bosniaandherzegovina #sustainabledevelopment #energytransition #climatechange