FBiH Government Incorporated Provisions of the Southern Gas Interconnection Law Not Yet Adopted into the Agreement between BiH and Croatia!

Although the Amendments to the Law on the Southern Interconnection have still not been adopted in the House of Peoples of the FBiH, the Government of the Federation of BiH incorporated the provisions that are still pending adoption into the updated draft of the Agreement between Bosnia and Herzegovina and the Republic of Croatia on the construction of the Southern Gas Interconnection pipeline, reports Istraga.ba

“This Agreement regulates the basis for cooperation and joint construction of the interconnection (each on its own side) on the route Zagvozd (Republic of Croatia) – Posušje (Bosnia and Herzegovina) – Tomislavgrad – Šuica – Kupres – Bugojno – Novi Travnik – Travnik and the route Posušje – Grude – Široki Brijeg – Mostar, with branches towards Livno, Gornji Vakuf-Uskoplje, Donji Vakuf and Jajce, and a branch for Čapljina and an additional route Kladanj–Tuzla in Bosnia and Herzegovina and the gas pipeline Split – Zagvozd in the Republic of Croatia,” stated in the draft of the Agreement adopted by the FBiH Government last week.

Pay attention to the words “and an additional route Kladanj–Tuzla”. According to the Law on the Southern Gas Interconnection, which is still in force and was in force at the time of adopting the draft Agreement, the “Kladanj-Tuzla route” does not exist. Here is what the currently valid Law states.

“This Law regulates matters of importance for the implementation of the project for the construction of the gas pipeline 'Southern Interconnection Bosnia and Herzegovina and the Republic of Croatia' on the route Zagvozd (Republic of Croatia) – Posušje (Bosnia and Herzegovina) – Tomislavgrad – Šuica – Kupres – Bugojno – Novi Travnik/Travnik and the route Posušje – Široki Brijeg – Mostar, with branches towards Livno, Gornji Vakuf – Uskoplje and Jajce (hereinafter: Southern Interconnection BiH and the Republic of Croatia) on the territory of the Federation of Bosnia and Herzegovina including the project infrastructure, interconnection point, investor, method of financing, public interest and implementation of expropriation of real estate, land use, administrative procedures for issuing permits and the involvement of cantonal governments, competent ministries and other administrative bodies, institutions and companies, and other matters of importance for the implementation of the project”.

As can be seen in the still valid provisions of the Law, the “Tuzla-Kladanj route” does not exist. That route exists in the proposed amendments to the Law on the Southern Interconnection, which is still the subject of parliamentary debate. The amended provisions were adopted in the House of Representatives of the Parliament of the FBiH, and should be on the agenda of the House of Peoples on Wednesday, April 15.

“In the Law on the gas pipeline 'Southern Interconnection Bosnia and Herzegovina and the Republic of Croatia' (Official Gazette of the Federation of BiH, number: 10/25) in Article 1, after the words: 'and the route Posušje' a hyphen punctuation mark and the word 'Grude' are added, after the words: 'Gornji Vakuf – Uskoplje' a comma punctuation mark and the words: 'Donji Vakuf' are added, after the word 'Jajce' a comma punctuation mark and the words: 'and a branch for Čapljina and an additional route Kladanj – Tuzla' are added, and the words: 'interconnection point' are deleted.

Regarding the other provisions of the adopted agreement, they are harmonized with the valid legal regulations in BiH. Below we provide several details.

“Issues related to decision-making on joint implementation and associated investments will be regulated by a special Joint Project Development Agreement between the investment holders from Article 6 of this Agreement,” stated in the draft Agreement.

It further states that “the contracting parties will ensure the harmonization of all details regarding the design, preparation and execution of all works on the construction of the interconnection, and will also agree on the coordination of the dynamics of all procedures for obtaining the necessary approvals and permits from the competent authorities of Bosnia and Herzegovina and the Republic of Croatia, as well as procedures in the processes of construction and commissioning of the gas pipeline. (…)

Inspection supervision during the construction of the interconnection will be carried out in accordance with the positive legal regulations in this field applicable in Bosnia and Herzegovina and the Republic of Croatia. The contracting parties have agreed that the construction of the interconnection and professional supervision/supervision over construction will be carried out entirely in accordance with national or international rules in the field of procurement and/or according to the rules of financial institutions, depending on the method of financing which will be defined in a timely manner. Each contracting party will ensure the preparation, financing and construction of the part of the gas pipeline on its own state territory in accordance with its laws and other regulations”.

The competent bodies for the implementation of this agreement will be the Ministry of Foreign Trade and Economic Relations of BiH and the Ministry of Economy of the Republic of Croatia. For all aspects related to the implementation of the project in Bosnia and Herzegovina, the Government of the Federation of BiH will be responsible.

“The Government of the Federation of Bosnia and Herzegovina has the authority to implement the project according to the model it chooses, including through the award of a concession in accordance with the legislation of the Federation of Bosnia and Herzegovina. The investment holder is the company AAFS Infrastructure and Energy d.o.o. with its registered office in Sarajevo. For the implementation of the project on the territory of the Republic of Croatia, the Government of the Republic of Croatia will be responsible in accordance with the legislation of the Republic of Croatia. The investment holder is the company Plinacro d.o.o. with its registered office in Zagreb,” reads the “updated” draft.

The President of the HDZ BiH, Dragan Čović, stated that this Agreement should be signed at the end of April. However, it is unclear to anyone how the Agreement could be signed before the constitutional and legal procedure for its signing is respected.

How are interstate agreements signed?

The Law on the Procedure for Concluding and Executing International Agreements prescribes the procedure for concluding and executing international agreements and other actions related to international agreements concluded by Bosnia and Herzegovina.

“The initiative to initiate the procedure for concluding international agreements may be given by institutions of Bosnia and Herzegovina, entities, cantons and other regional and local communities, as well as companies, institutions, non-governmental organizations and other legal entities from the area of their activity. The initiative from paragraph 1 of this Article is submitted to the Council of Ministers of Bosnia and Herzegovina through the ministry of Bosnia and Herzegovina within whose scope of work fall the matters regulated by the international agreement. When the competent ministry of Bosnia and Herzegovina assesses that the initiative from paragraph 1 of this Article is justified, it submits it to the Council of Ministers of Bosnia and Herzegovina with a draft proposal for initiating the procedure and a basis for conducting negotiations for concluding the international agreement. The Council of Ministers of Bosnia and Herzegovina establishes the proposal for initiating the procedure for conducting negotiations for concluding the international agreement, of which the basis from paragraph 3 of this Article is an integral part,” stated in this Law.

The FBiH Government, therefore, initiated this initiative towards the Council of Ministers and the formal procedure was respected. The documents will be submitted to the Ministry of Foreign Trade and Economic Relations, and if the MFTEO assesses that the project is justified, the materials are submitted to the Council of Ministers, which adopts the proposal for initiating the procedure for conducting negotiations. The decision to initiate the procedure for conducting negotiations, in accordance with Article 6 of this Law, is made by the Presidency of Bosnia and Herzegovina. This means that first the Council of Ministers of BiH initiates the initiative towards the Presidency, and then the Presidency makes a decision to initiate the procedure for conducting negotiations. Therefore, for the mere initiation of the negotiation procedure, at least one session each of the Council of Ministers of BiH and the Presidency of BiH needs to be held.

Furthermore, according to the Law, in negotiations for concluding an international agreement, Bosnia and Herzegovina is represented by a delegation appointed by the Presidency of Bosnia and Herzegovina, or, by its authorization, the Council of Ministers of Bosnia and Herzegovina. After the completion of negotiations, the delegation for negotiations of Bosnia and Herzegovina submits to the Presidency of Bosnia and Herzegovina and the Council of Ministers of Bosnia and Herzegovina a report on the negotiations, and to the Ministry of Foreign Affairs of Bosnia and Herzegovina the text of the international agreement. The Presidency of BiH then makes a decision on signing the agreement with the agreed text. After that, ratification of the agreement follows. The agreement is ratified by both houses of the Parliamentary Assembly of BiH. Finally, everything goes again to the Presidency of BiH, which decides on the ratification of the international agreement.

To carry out this procedure, several months are needed. Therefore, it is unclear how the agreement between BiH and Croatia on the Southern Interconnection can be signed “at the end of April” in Dubrovnik, when Andrej Plenković organizes the Summit of the “Three Seas Initiative”.