1. The present report is submitted pursuant to Security Council resolution 1244 (1999) of 10 June 1999, by which the Council decided to establish the United Nations Interim Administration Mission in Kosovo (UNMIK) and requested the Secretary-General to report at regular intervals on the implementation of the mandate. The current report covers the activities of UNMIK and developments in Kosovo, Federal Republic of Yugoslavia, since my report of 9 October 2002 (S/2002/1126). Matters reported to the Security Council at its meeting on 6 November 2002 and by the Council's Mission to Kosovo and Belgrade, Federal Republic of Yugoslavia, are referred to, as appropriate (see S/PV.4643 and S/2002/1376). For ease of reference, the outline below follows the headings contained in the UNMIK chart attached as an annex to the present report.
II. Functioning democratic institutions
A. Provisional Institutions of Self-Government
2. Kosovo's Provisional Institutions of Self-Government, the Assembly and the Government, have been in existence for about one year. During this time, the Government has forwarded 14 laws to the Assembly, six of which have been endorsed and sent to my Special Representative for promulgation in line with the Constitutional Framework on Provisional Self-Government in Kosovo (see UNMIK regulation 2001/9 of 15 May 2001). Of these six, four were signed into law and two sent back to the Assembly for further consideration, as they did not adhere to the division of responsibilities laid down in the Constitutional Framework and did not respect the rights of communities enshrined in that document.
3. The transfer of responsibilities from UNMIK to the Provisional Institutions over the past year has taken two forms: first the transfer of political authority to take relevant decisions, which was immediate, and secondly the transfer of executive functions from international staff to Kosovo civil servants, which was incremental. Progress in assuming executive functions has varied between the Ministries, depending on their organizational structure and ability to recruit and retain qualified staff. Appointment of senior staff was delayed, inter alia, owing to difficulties in identifying suitable candidates willing to accept a comparatively low salary and the politicization of senior civil servant posts. This, in turn, delayed the appointment of other civil service officers. Nearly 50 per cent of senior Kosovo civil servant posts remained unfilled, requiring international staff to remain in line functions in some Ministries. International staff continued to perform the functions of Permanent Secretary in two Ministries. By the beginning of 2003, the remaining eight Permanent Secretaries had been recruited, including one woman. By the end of the year, the overall vacancy rate was 14 per cent and Kosovo civil servants in most Ministries were increasingly taking the initiative in solving day-to-day problems, as the reliance on international staff diminished.
4. Efforts continued to establish a multi-ethnic civil service, although obstacles remained. These included a limited pool of minority community candidates, security concerns, inter-ethnic tensions in the workplace and limitations on freedom of movement. Another constraining factor has been the open discouragement by certain Serbian Ministries and political parties (such as the Serb National Council) of minority community applications, in particular for health and education posts. Efforts continued to overcome the obstacles, for example, by the extension of bus service, which has had a positive impact on the willingness of members of minority communities to work in Pristina. Additional efforts included placing appropriate advertisements in minority media outlets and including members of minority communities in recruitment panels. At the end of October 2002, the Office of the Prime Minister presented its preliminary plan for the proportional representation of minority communities in the civil service to the Advisory Board on Communities.
5. At the beginning of 2003, the level of minority community representation in most of the central bodies averaged only less than 6 per cent. Minority community representation averaged approximately 10 per cent in the transferred Ministries of Education, Science and Technology; Agriculture, Forestry and Rural Development; Culture, Youth and Sports as well as the Kosovo Assembly Secretariat; and, in the reserved areas, in the Directorate of Administrative Affairs, the Office of Community Affairs, and the Directorate of Rural Affairs. In contrast, there were hardly any minority employees (less than 1 per cent) in the public utilities field (electricity, water, telecommunications). At the municipal level, the level of minority community employment in the civil service averaged 12 per cent. This was primarily attributable to employment within the municipal community offices, as a result of an UNMIK direction, rather than through employment in the municipal structures. The highest representation in municipal structures was in the Gnjilane region, where four out of five mixed municipalities reflected an acceptable level (12 per cent) of minority employment. The level of minority representation in other municipalities was considerably lower, particularly in the Pec region.
6. Overall, the Ministries succeeded in executing their budgetary allocations for 2002. At 489.1 million euros, the Kosovo consolidated budget for 2003, endorsed by the Assembly at the end of December, represents an increase of 19 per cent over the 2002 budget, 95 per cent of it derived from domestically generated revenue. Seventy-two per cent of the 2003 budget (€370 million) was allocated to responsibilities transferred to the Provisional Institutions of Self-Government (€342 million) and the municipalities (€28 million).
7. The lack of appropriate rules and procedures and non-adherence to existing rules has presented obstacles to the transfer of responsibilities, including rules of executive business of the Government, office procedure for the Ministries, rules for delegation of financial and administrative powers for officers of the Ministries, pay rules and accounting guidelines. UNMIK has drafted rules for some of these areas to be used on a provisional basis and has encouraged the relevant Ministries to draft the rules that lie within their purview.
8. Government meetings and Assembly sessions towards the end of 2002 were characterized by an increasing desire to encroach on the powers reserved for the Special Representative, such as the power to set the budgetary parameters, rather than concentrating on the urgent matters over which these bodies have responsibility. On 15 January 2003, in the face of adverse public reaction to an increase in income tax, the Government issued a statement distancing itself from the tax increase, which it had previously agreed to in the Economic and Fiscal Council in mid-October. In its statement, the Government called for the postponement of the implementation of the relevant regulation (UNMIK regulation 2002/4) until the Law on Financial Management and Accountability is promulgated and recommended the continuation of 2002 taxation levels until that time. In an extraordinary session of the Economic and Fiscal Council on 24 January, the Government presented a revised scale of personal income tax rates. The revised scale, with which the World Bank and the International Monetary Fund (IMF) had indicated general agreement, was endorsed.
9. Despite a stated commitment by the Provisional Institutions, particularly the Government, to fulfilling the benchmarks, some Kosovo Albanian Cabinet members publicly distanced themselves from the benchmarks at the end of 2002, as noted in the report of the Security Council on its mission to Kosovo and Belgrade (S/2002/1376, para. 19). Some held that placing standards before status was ineffective and that both should be pursued simultaneously. Some maintained that some standards could not be achieved without defining the status of Kosovo. Others continued to support the standards before status policy, but asserted that many of the standards had already been achieved. Despite consultation on the benchmarks, there remains a reluctance to engage on the part of the Provisional Institutions. Several of the New Year messages of leading Kosovo Albanian politicians called for independence in 2003. The majority of Kosovo Serb leaders have endorsed the "standards before status" approach and have taken a firm stance that status should not be negotiated before the standards have been reached. However, in January 2003, the Serbian Prime Minister called for final status negotiations to begin this year.
10. By the beginning of 2003, it was also clear that there were renewed tensions among the Kosovo Albanian coalition partners, an uneasy alliance from the outset, specifically between the Democratic League of Kosovo (LDK) on the one hand and the Democratic Party of Kosovo (PDK) and the Alliance for the Future of Kosovo (AAK) on the other. The belief that recent violence, to which LDK members fell victim, was politically motivated has deepened the divisions between the main parties and exacerbated tensions that had previously seemed to subside.
11. Throughout 2002 the Assembly, with the assistance of the Institution-Building Pillar's Assembly Support Initiative, formed the rudimentary structures needed for a functioning parliament. Eighteen committees were formed. Assembly members visited other parliaments, including the European Parliament, and on 9 January 2003 the Assembly adopted its rules of procedure, which UNMIK is currently reviewing to ensure that they are in accordance with the Constitutional Framework. It had become apparent that 18 committees for a 120 member Assembly is a cumbersome structure and that the work of the committees would benefit from technical expertise and public hearings. It is inherently difficult for the representatives of the smaller minority groups to participate adequately in the committee work, a fact which limits their participation in the legislative process in some areas.
12. There were continued instances of the Assembly overstepping its competences. On 8 November the Assembly adopted a resolution rejecting the inclusion of Kosovo in the preamble of the Constitutional Charter of the State Union of Serbia and Montenegro, which was viewed by the Kosovo Albanian majority as prejudging Kosovo's final status. In December, my Special Representative sent back to the Assembly the Law on External Trade Activity, which was in violation of the Constitutional Framework. Also in December, UNMIK headed off a draft resolution on independence prepared by AAK.
13. The Assembly continued to show reluctance to accommodate minority community demands, illustrated by the higher education bill, which my Special Representative sent back to the Assembly for further consideration (see S/2002/1126, para. 4). On 7 November, the Kosovo Serb Return Coalition (KP) walked out of the Assembly on grounds of perceived persistent discrimination by the majority, particularly the President of the Assembly. On 24 January, KP members voted overwhelmingly to return to the Assembly.
14. UNMIK initiated the formal monitoring of Assembly proceedings to ensure compliance with the Constitutional Framework and the Provisional Rules of Procedure, with particular emphasis on respect for the rights of communities, and to make recommendations for corrective action. B. Establishing the authority of the United Nations Interim Administration Mission throughout Kosovo: Mitrovica
B. Establishing the authority of the United Nations Interim Administration Mission throughout Kosovo: Mitrovica
15. On 25 November, UNMIK established its administration in northern Mitrovica, thus extending its authority throughout the whole of Kosovo for the first time since its deployment in June 1999. The way for this was paved by the agreement of the authorities of the Federal Republic of Yugoslavia to discontinue the financing of parallel structures, including parallel security structures, and to support UNMIK in assuming control of the administrative functions and developing the Kosovo Police Service (KPS) in northern Mitrovica. There are still some institutions that continue to receive financing from Belgrade, especially in the health sector.
16. With this assumption of authority, UNMIK began to implement relevant provisions of the 7-point plan for Mitrovica that my Special Representative had outlined on 1 October 2002. By the beginning of 2003, KFOR and UNMIK Police were manning the bridge, instead of the so-called "bridge-watchers"; approximately 20 Kosovo Serb KPS officers were deployed in the northern Mitrovica region and are now patrolling the streets. On 5 December, six Kosovo Serb correctional officers graduated from the Kosovo Police Service School and were assigned to the Mitrovica detention centre. So far, 60 Kosovo Serbs have been recruited to work for the UNMIK administration, most of whom worked in the pre-conflict municipal administration. Fifty-seven of those recruited began work in January 2003. By 20 January, most Kosovo Serb teachers had signed UNMIK contracts, although, as yet, no health workers have agreed to such contracts. The headquarters of the Kosovo Trust Agency (KTA) moved to northern Mitrovica; and nine quick-impact projects were initiated, including the installation of traffic lights and the refurbishment of schools.
17. Progress was also made regarding the rule of law, with the surrender of a Kosovo Serb leader on 9 October following an attempt by UNMIK Police to arrest him in August 2002 on suspicion of involvement in the injury to 22 UNMIK Special Police Unit officers during riots in Mitrovica in April. The charges against him were reduced in light of the evidence that had been collected, and he was subsequently released on bail. The trial of another Kosovo Serb, charged with instigating the April riots in Mitrovica, began on 22 November.
C. Municipal elections
18. Kosovo's second municipal elections were held on 26 October 2002 (see S/PV.4643). The ballot and the electoral campaign that preceded it were conducted in an orderly and calm fashion. The overall turnout of 54 per cent (58 per cent in Kosovo and 14 per cent in Serbia and Montenegro) was depressed by a low turnout among the Kosovo Serb community of around 20 per cent. The Kosovo Serbs voted predominantly in the five municipalities where they constitute a majority: Leposavic, Zvecan, Zubin Potok, Strpce and Novo Brdo. Participation elsewhere was minimal and there was a virtual boycott in northern Mitrovica city. The low turnout of Serbs was, in part, attributed to mixed signals from the authorities of the Federal Republic of Yugoslavia and of Serbia regarding participation, as well as doubts on the part of Kosovo Serbs regarding the benefits of participation in the political process. Kosovo Serb candidates won the majority in Leposavic, Zvecan and Zubin Potok, Strpce and Novo Brdo. The results showed that where Kosovo Serbs took part in large numbers, the Return Coalition lost out mainly to the Democratic Party of Serbia and to the Serb National Council Mitrovica. There were voices on the Kosovo Albanian side indicating that the lower turnout among the Kosovo Albanian community compared to the previous two elections reflected some dissatisfaction with local institutions and political leaders.
19. Almost all the new Municipal Assemblies were formed by the end of 2002. Some problems emerged in the mixed municipalities, which were won by the Kosovo Serbs, particularly in Novo Brdo, where physical and verbal assaults against senior Kosovo Serb members of the administration by Kosovo Albanians at the beginning of 2003 triggered a walkout of all Kosovo Serb municipal employees for several days. In some municipalities, where the Kosovo Serbs gained only one seat, there has also been reluctance on the part of that individual to take part in the Assembly.
20. Minority communities hold the balance of power in several assemblies. In Prizren, for example, the LDK allied itself with the Kosovo Turkish community, which gained four seats. The Municipal Assemblies no longer include appointed members, only elected ones. As a result, there are now fewer minority community members in the Municipal Assemblies. In some areas, where minority communities are small, or minority community turnout was low, some communities made practical arrangements to continue their participation in municipal life to the extent possible. In Kamenica, for example, the 11 former Kosovo Serb Municipal Assembly members formed a team to continue participation in the Municipal Assembly's standing committees. Similarly, the Roma community in Kamenica agreed that it would nominate one person for the committees and the Municipal Working Group on Return. Of the mandatory committees required under Regulation No. 2000/45 on the Self-Government of Municipalities, only 15 Community Committees and 10 Mediation Committees have been established so far, although few of these are fully functioning. In order to safeguard minority communities, the UNMIK regulation on the 2003 Kosovo Consolidated Budget introduced both protective and corrective measures, particularly with regard to fair-share financing for minority communities.
21. As a result of gender requirements in the electoral legislation and the system of closed lists, 28.5 per cent of the new Municipal Assemblies are made up of women representatives. This is a substantial improvement on the 8 per cent achieved at the 2000 elections.
22. To pave the way for an eventual handover to local institutions, there was an increased transfer of electoral responsibilities to the Municipal Election Commissions, which played a leading organizational role. Some 12,000 domestic observers were also accredited for the vote. Reductions were made in international supervisory involvement, with the blanket election supervision of the last two years replaced by a ratio of one international polling station supervisor to three polling stations. In addition, earlier in 2002, an Election Working Group began deliberations to determine the future electoral formula and regulations.
23. On 18 December 2002, the responsibility for financial administration was transferred to 24 (out of 30) municipalities. These municipalities were certified by independent auditors as having adequate budgetary and financial management systems in place with the requisite financial procedures and controls. UNMIK monitors the certified municipalities to ensure that they comply with their obligations under UNMIK regulation 2000/45, including the protection of the rights and legitimate interests of all communities. Municipalities that fail to meet these obligations will face measures, including the holding back of resources.
24. Following an initial announcement in October 2002, my Special Representative met with political leaders in November to discuss the concept of decentralization. In December, the Institution-Building Pillar co-organized the first in a series of informal decentralization conferences that brought together local government experts and practitioners from Kosovo, Austria and Slovenia. Also in December, experts from the Council of Europe held preliminary discussions with UNMIK and local leaders at both the central and municipal levels, initiating a process to build consensus from the grassroots on a decentralization strategy.
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