Country Profile: Kosovo

OVERVIEW

Kosovo has made significant progress in many areas since the end of conflict in June 1999. However, it remains one of the poorest countries in Europe, with widespread and persistent poverty. Kosovo continues to face the challenges of a post-conflict country building and rebuilding its governance structures while transitioning to a market economy. Socially owned enterprises are still being privatized, and governance and public service institutions are being developed. Thousands of people are still displaced. Land records are nonexistent or unreliable, and competing land claims contribute to continued violence. The cadastre system is being reconstructed and updated, and tribunals are resolving property claims, but the pace is slow.

Kosovo has achieved steady, 4% per annum economic growth since the end of the conflict. In spite of this strong economic performance, 45% of Kosovo nationals are unemployed, 37% live below the national poverty line, and 15% live in extreme poverty, unable to meet basic nutritional needs. Extreme poverty is disproportionately high among children, the elderly, households with disabled members and female-headed households. An estimated half-million Kosovars live and work outside the country. Forty-percent of the population relies on an agriculture sector that is dominated by subsistence farming. Plot sizes are small, and farmers lack technical expertise and inputs. The country remains a largely traditional, patriarchal society. Despite new formal laws pronouncing gender equality, women’s rights to property are limited.

Water and forest resources in Kosovo are stressed by increasing demand and weak or nonexistent infrastructure. Surface and groundwater resources are polluted by sewage and industrial waste. Delivery of drinking water and water for irrigation has been erratic, causing periods of water shortages. Forests provide timber, fuelwood, and various forest products used by the population. The forest sector has lacked a central strategy and leadership, and new programs to manage forest resources will require clarification of roles at the central and municipal levels.

Kosovo has an abundance of coal and some other mineral resources. Given the immense potential for Kosovo to produce and export energy generated from coal to the rest of southeastern Europe, Kosovo needs to develop environmentally sound coal extraction and energy-generation techniques and introduce clean technologies into the coal-mining industry.

KEY ISSUE AND INTERVENTION CONSTRAINTS

• Support efforts to reduce landlessness, regularize informal settlements, and strengthen women’s rights to land. Kosovo is a post-conflict region developing its basic legal framework and institutional structures while transitioning to a market economy and continuing to privatize socially owned enterprises. The reconstruction and development of the cadastre system and land registration program appears well supported. Additional donor support could fill possible gaps through targeted efforts focused on addressing issues of landlessness, regularization of informal settlements, and ensuring that the rights of women and marginalized populations are represented in the land administration programs. A broader approach to women’s property rights in Kosovo is also needed, with interventions designed to implement the equal inheritance and marital property rights provided for in the formal laws.

• Help the government and other donors to develop voluntary land-consolidation programs. The impact on productivity of small agricultural plots and use of systematic land-consolidation programs to increase plot size is debated among land experts. Kosovo’s initial land-consolidation pilots ran into difficulty, although many of the recurring problems related to tenure insecurity stem from recent violence, lack of reliable land documents, and contested ownership rights. As the land registration and cadastre program proceeds, USAID could assist the government and FAO to further refine and pilot voluntary land-consolidation programs.

• Assist the government in establishing a community-based forest management program. Water user associations and regional water governance bodies have begun to be established. To date, no similar community-based natural resource governance systems appear planned for the forestry sector. USAID is working to establish Forest Stewardship Council certification for select public forests in Kosovo under the Kosovo Private Enterprise Program (KPEP). USAID has also assisted several non-timber forest product associations to introduce environmentally sound collection practices for berries, mushrooms and tea and also to identify markets and improve packaging and storage.

• Work with the government to mitigate environmental damage from coal extraction. The expected growth over time in generation of electricity from Kosovo’s immense coal fields risks adding to carbon dioxide emissions and other pollutants. Donors should assist Kosovo to adopt technologies for coal extraction and electricity generation that mitigate the potentially significant negative environmental impact from increasing exploitation of this mineral resource.

SUMMARY

In 1989, the Milosevic regime of the Socialist Federal Republic of Yugoslavia (SFRY) eliminated Kosovo’s autonomous status and placed the country under direct rule. The decade of discriminatory control over ethnic Albanians and armed conflict that followed displaced thousands of Kosovo nationals and destroyed property throughout the country. When ethnic Albanian Kosovars returned to their homes beginning in 1999, many turned on their former Serbian oppressors, causing another wave of violence and creating new populations of dispossessed and desperate people.

In the years since the war, the United Nations Interim Administration Mission in Kosovo (UNMIK) established a transitional government and set the stage for development of Kosovo’s independent government. Kosovo declared its independence in February 2008. The government promised to embrace multi-ethnicity as a fundamental aspect of good governance with support from the EU Rule of Law Mission (EULEX), which deployed police, judges, prosecutors and customs officers throughout Kosovo. Kosovo adopted its Constitution in 2008 and has developed a substantial body of law and policy. The country joined the International Monetary Fund and World Bank in 2009. By January 2010, 64 countries had recognized Kosovo’s independence; Serbia and Russia are among those that have not recognized the country’s independence.

Kosovo has made significant progress but continues to face the enormous challenges of a post-conflict country building and rebuilding its governance structures while transitioning to a market economy. Socially owned enterprises are still being privatized, and governance and public service institutions are being developed. Thousands of people are still displaced, many returning to find their homes destroyed or occupied by others. Land records are nonexistent or unreliable, and competing land claims contribute to continued violence. The cadastre system is being reconstructed and updated, and tribunals are resolving property claims, but the pace is slow.

Forty-five percent of Kosovo nationals are unemployed, 37% live below the national poverty line, and 15% live in extreme poverty. Many in Kosovo are highly dependent on remittances from the approximately half-million Kosovars living outside the country, the majority of whom are based in Germany and Switzerland. Forty-percent of the population relies on an agriculture sector that is dominated by subsistence farming. Plot sizes are small, and famers lack technical expertise and inputs. The country remains a largely traditional patriarchal society. Despite new formal laws pronouncing gender equality, women’s rights to property are limited.

Water and forest resources in Kosovo are stressed by increasing demand and weak or nonexistent infrastructure. Surface and groundwater resources are polluted by sewage and industrial waste. Delivery of drinking water and water for irrigation has been erratic, causing periods of water shortages. With broad-based donor support, the government is implementing projects to establish and strengthen institutional capacity, and to rehabilitate the country’s institutional and physical infrastructure, including water and irrigation.

Forests account for about 43% of Kosovo’s land and provide timber, fuelwood, and various forest products used by the population. The forest sector has lacked a central strategy and leadership, and new programs to manage forest resources will require clarification of roles at the central and municipal levels. A recent Decentralization Law in Kosovo included forest management under the competency of new municipalities, though they lack the resources and knowledge to adequately assume this role. The Kosovo Forest Agency remains under the authority of the central Ministry of Agriculture, Forests and Rural Development.

Kosovo has rich mineral resources, particularly in brown coal (lignite), but has lacked the financial and institutional support needed for exploration and development. The country is developing a strategy for the minerals sector that will focus on: (1) strengthening institutions to increase the competitiveness of the industry and attract quality private investors; (2) preparing mining regulations; and (3) developing an information database of its mineral resources.

1. LAND

LAND USE

Kosovo has a total land area of 10,887 square kilometers (1,087,700 hectares) and an estimated 1.8 million people (2009). Eighty-eight percent of Kosovo’s population is Albanian, 7% is Serb, and the balance are other ethnicities, including Bosniak, Gorani, Roma, Turk, Ashkali and Egyptian. Roma, Ashkali, and Egyptian groups are often identified as gypsies (USDOS 2010; DFID 2008; Tawil 2009; IDMC 2009).

Thirty-seven percent of Kosovo’s population lives in urban areas. Pristina, the largest municipality, had 500,000 inhabitants in 2004 – more than double the population prior to the Kosovo War. Forty-five percent of Kosovo nationals are unemployed, 37% live below the national poverty line, and 15% live in extreme poverty (USDOS 2010).

Kosovo’s 2009 GDP was US $5 billion, comprised of 20% agriculture, 20% industry, and 60% services. Agriculture employs over 40% of the population of Kosovo, primarily on an informal basis. Fifty-three percent of the total land area is classified as agricultural land, including 153,200 hectares of pastureland. About 300,000 hectares are under cultivation. Agriculture in Kosovo is dominated by subsistence farming due to small plot sizes and a lack of mechanization and technical expertise. Most rural households keep some livestock. Primary agricultural products are wheat, corn, oats, fruits, vegetables, beef, and wine, with cereal crops dominating production (FAO 2010; World Bank 2007b; USDOS 2010; Kamberi 2009).

Kosovo has an estimated forest area of 464,800 hectares, or 43% of land area. Just less than 5% of the total land area (46,000 hectares) is protected (FAO 2010).

The most pressing environmental concerns in Kosovo are water and soil pollution from human and industrial waste and agricultural production and the rapid conversion of agricultural land to industrial, commercial and residential uses. Agricultural impacts on the environment include soil erosion, landslides, loss of biodiversity through cultivation and forest degradation, and flooding due to poor irrigation infrastructure and management (World Bank 2007a; Stanfield et al. 2004).

LAND DISTRIBUTION

To some degree, land settlement patterns continue to reflect the impact of the war and ethnicity. The majority of ethnic Serbs live in four Serbian-dominated provinces, three of which are located on the Serbian border and one of which is located on the Macedonian border. A large proportion of Gorani and Bosniaks live in the Gora region of Dragash Municipality, located in the southernmost part of Kosovo. Within Dragash, one-third of the population is Gorani and Bosniak. The remainder of the population in this region is ethnic Albanian (OSCE 2009a).

Kosovo is a primarily rural patriarchal society with a strong cultural attachment to the land. Nearly 70% of rural households are classified as poor. More than 15% of households in Kosovo are headed by women; these households are among the most economically and socially vulnerable (La Cava et al. 2000; World Bank 2007b).

Kosovo has an estimated 2.2 million land parcels and about 340,000 individuals or households with landholdings. Individuals or households hold an average of six parcels. Approximately 80–90% of agricultural land is held by private interests, primarily individuals and families. The average holding is less than 2 hectares, which is often fragmented into even smaller parcels. Roughly 0.06% of farms are more than 10 hectares. In 2005, approximately 10% of rural households reported being landless (La Cava et al. 2000; Stanfield et al. 2004; Meha et al. 2007; World Bank 2007b).

Nine percent of agricultural land in Kosovo is held by various Socially Owned Enterprises (SOEs), including unions, associations and cooperatives. The remaining rural land (up to about 10%) is owned by the state (Stanfield et al. 2004).

SOE’s hold an estimated 60,000 hectares of the most fertile agricultural land in Kosovo. In the 1990s, agricultural land that had been confiscated by SOEs was returned to its previous owners. The remaining socially owned agricultural land became an asset of SOEs. The Privatisation Agency of Kosovo (PAK) is focused on privatizing SOEs and their land (Stanfield et al. 2004; Cemovich 2001; PAK 2009).

The Kosovo War and subsequent localized conflicts displaced thousands of people. The rural-urban ethnic composition changed dramatically between 1991 and 2000. The population of ethnic Serbs declined in urban areas and grew in rural ones, while the Albanian population exhibited the opposite trend. As residents evacuated rural and urban areas, their abandoned housing was destroyed or illegally occupied. In some areas, gangs affiliated with the Kosovo Liberation Army distributed vacated property to clan members or those from their region of origin. (La Cava et al. 2000; Tawil 2009).

According to UNHCR, 230,000 displaced Kosovo nationals now live in Serbia. This group is primarily Serbian, but also includes Romas, Ashkalis, and Egyptians. There are an estimated 19,700 internally displaced persons (IDPs) in Kosovo. Just over half of IDPs are Serbian while the rest are Albanians (39%), Roma, Ashkali, and Egyptians (8.5%) and other ethnicities (0.5%). Many IDPs are reluctant to return to their farms because the infrastructure was destroyed. The majority of IDPs are in the Mitrovice region, with Serbians in the north and Albanians in the south. Approximately 2000 Serbian IDPs have settled in peri-urban areas around Pristina and Gracanica (La Cava et al. 2000; IDMC 2009).

Members of the Roma, Ashkali, and Egyptian communities are the most marginalized among the displaced. Resettlement or recovering property is particularly difficult for displaced Roma, Ashkali, and Egyptian individuals, many of whom may have traditionally lived in informal settlements called mahalas, without legal title to the property. The mahalas are characterized by a lack of infrastructure and irregular tenure status. In 1999, many mahalla were destroyed and their occupants forcibly evicted. In some areas the community members have constructed informal settlements on public and socially owned land (IDMC 2009; COHRE 2008).

Insufficient housing, displaced populations, and an absence of functioning law enforcement have resulted in an increase in the numbers of illegal settlements and construction throughout Kosovo. Illegal settlements have mushroomed on the periphery of urban areas. Households build homes on agricultural and public land, and builders destroy the homes of IDPs and erect new construction in their place (Tawil 2009; Stanfield et al. 2004).

LEGAL FRAMEWORK

The Constitution of Kosovo (2008) recognizes the right to own property and provides that the use of property is regulated by law in accordance with the public interest (GOK Constitution 2008a).

Kosovo’s formal land laws include: (1) the Law on Property and Other Real Rights, Law No. 03/L-154 (2009), which governs the creation, transfer, protection, and termination of land rights; (2) the Law on Establishment of an Immovable Property Rights Registries, Law No. 2002/5 (2002), which establishes the basic concepts and procedures for a modern immovable property rights register; (3) Law 2003/25, titled “On Cadastre,” describes the basic concepts and procedures for defining land rights and maintaining the cadastre; (4) the Law on Basic Property Relations, SFRY No. 6/80 (1980) governs urban land to the extent not superseded by the 2009 Law on Property; (5) the Law on Agricultural Land (2001) addresses issues specific to agricultural land; and (6) the Law on Contracts and Torts of Kosovo, No. 28/1978, governs leases (Hasolli and Nushi 2010; GOK Law on Property 2009e; Stanfield et al. 2004; GOK Law on Basic Property 1980; UNMIK Law on Agricultural Land 2002a).

Kosovo has been in the process of considering adopting legislation that permits regularization of informal housing in cases where the occupant acquired the land legally but lacks the appropriate documents (Stanfield et al. 2008).

Customary land rights are not recognized in Kosovo’s formal land laws. The extent to which customary land rights are recognized in practice, such as in support of occupancy rights in informal settlements, is unknown (Hosolli and Nushi 2010).

TENURE TYPES

Real property in Kosovo falls into three categories: state, socially owned, and private.

State land. State land includes properties belonging to the government and used for public facilities, such as roads, schools, hospitals, and administrative buildings.

Socially owned land. The category of socially owned land was introduced by the former Federal Republic of Yugoslavia and is land in which society as a whole has a vested right of ownership, and individuals and entities have use rights. Socially owned land includes various categories of land (e.g., public land, forestland) controlled and managed by Socially Owned Enterprises (SOEs), public sector agencies, publicly owned enterprises (e.g. public utilities), religious organizations, and other entities. An estimated 20–30% of land in Kosovo is either state land or socially owned land.

Private land. Private land is land that is owned by individuals and entities. An estimated 70–80% of land in Kosovo is privately held (Stanfield et al. 2004; Stanfield and Tullumi 2004; World Bank 2010b; GOK Law on Property 2009e).

Ownership and leasehold. Formal law in Kosovo recognizes ownership and leasehold tenure. Landowners have the right to exclusive use of their land, the right to exclude others, and the right to alienate the land. Leasehold rights to non-agricultural land are governed by the terms of the lease and principles of contract law; the parties have the right to negotiate for the length of the lease and rent. Unless otherwise agreed to by the parties, lessees can sublease their land (Hosolli and Nushi 2010).

Under the Law on Agricultural Land, leases of agricultural land are categorized as short-term (less than three years), long-term (three years or longer), or grazing leases. Long-term leases must be in writing to be enforceable under the law. The Agricultural Land Law dictates the requirements for written leases of agricultural land and provides for enforcement of leases. The Agricultural Land Law also prohibits the conversion of agricultural land to nonagricultural land unless the new use is contemplated by a land-use plan and the municipal government authority approves. Conversion of irrigated land requires a specific showing of public importance (GOK Agricultural Land Law 2001).

SECURING LAND RIGHTS

People and entities obtain land in Kosovo by purchase, lease, inheritance and gift. No national data comparing various methods of accessing land is available, but data collected in 2002–2003 in Gjakova Municipality indicates that about 50% of land transfers were due to inheritance, 30% were land sales, and 20% were gifts of land (Standfield et al. 2004).

All land in Kosovo must be registered. Once land is registered, any transfer of rights must be registered in order to be effective. Registering land in Kosovo requires eight steps, takes an average of 33 days, and costs about 1% of the property value, although municipalities may impose additional fees. The requirements for registering land, payment of taxes on registered land, prohibitions against certain transactions (e.g. between Serbs and Albanians), and a lack of public awareness of the importance of legal documentation resulted in many informal land transactions and failure to register (World Bank 2010a; Hasolli and Nushi 2010; Stanfield et al. 2004).

Land tenure security in Kosovo has been weakened by the effects of conflict on land records and transaction practices. Cadastral records and the archives of enterprises that managed socially owned apartments and assets were destroyed during the war. Some of the maps, cadastral surveys, possession lists and transaction document archives, which provided authoritative documentation of rights to buildings and land, were removed to Serbia at the time that the SFRY eliminated Kosovo’s autonomous status (Stanfield et al. 2004).

Land records that exist are unreliable. An examination of documents in 2003 found that the property boundaries and identities of land occupants matched the legal documents in only 50% of cases. Almost no apartments are registered. Competing claims to land and uncertainty over ownership are common. Individuals must initiate any effort to correct land details and confirm ownership interests. IDPs have particular difficulty renewing or replacing lost documents in part because of a lack of mutual recognition of documents issued by the Kosovo and Serbian parallel authorities. IDPs face difficulty acquiring legal documentation of their rights and physically repossessing their property (Stanfield et al. 2004; IDMC 2009; World Bank 2009).

INTRA-HOUSEHOLD RIGHTS TO LAND AND GENDER DIFFERENCES

The Constitution recognizes gender equality as a fundamental value for the democratic development of society and mandates equal opportunity for men and women in political, economic, social, and cultural spheres. Kosovo Family Law (2004) governs property regimes between spouses and is based on the principle of equality between husband and wife. The law permits a mixed marital property regime in which property acquired during marriage is regarded as common property, and property acquired prior to marriage by inheritance, by gift or by other forms of legal acquisition is separate property. The common property of a married couple must be administered jointly and may not be alienated without the consent of both spouses. Legally, property acquired during a marriage must be registered as common property in the name of both spouses (GOK Constitution 2008a; UNMIK Kosovo Family Law 2004b; UNMIK Kosovo Inheritance Law 2004c).

Kosovo’s formal law provides that women and men have equal rights to own and inherit property. Spouses, even those who do not have registered marriages, may inherit under certain circumstances. If a couple is married under common property regime and one spouse dies intestate, the surviving spouse is first in the order of inheritance among heirs (UNMIK Kosovo Inheritance Law 2004c).

Despite the requirements of equal treatment in Kosovo’s formal law, in practice, women’s rights to land are limited. Only 8% of women in Kosovo own land. The patrilocal extended family system indigenous to Kosovo reemerged during the conflict as a strategy for ensuring survival and coping with economic scarcity. The customary law and practice are influenced by traditional Albanian law and can be a source of both protection and risk for a woman. Under the customary law, women are subordinate to men and cannot inherit property. The husband’s family is expected to care for his wife, but she is regarded as a kin-outsider, and her children belong to the husband’s family. If the husband dies or abandons his wife, the marital property transfers to the deceased’s closest male relative. The surviving or abandoned wife may be required to leave her home and children behind and seek another residence and source of livelihood. Women without the protection of a male relative are socially and economically vulnerable (Tawil 2009; La Cava et al. 2000; UNFPA 2005).

LAND ADMINISTRATION AND INSTITUTIONS 

The Kosovo Cadastre Agency (KCA) manages immovable property registration and the cadastre in Kosovo and regulates and coordinates the Municipal Cadastre Offices (MCOs) and Municipal Courts. The MCOs manage the immovable property rights registration/cadastre system, which is comprised of a cadastral map or plan, a register of property-rights holders, and an archive of legal documents describing the origins and transfer of the rights. The Municipal Courts verify property documents. The work of the KCA and MCOs are integrated with regard to policy implementation, technology, and human resources, but the KCA does not directly manage the MCOs. The KCA was originally designed as part of the former Ministry of Public Services, now the Ministry of Public Administration, and the agency was incorporated into the Ministry of Environment and Spatial Planning in late 2009 (New Kosovo Report 2009; Helm Corporation 2008; Stanfield et al. 2004)

The Ministry of Agriculture, Forestry and Rural Development (MAFRD) has authority over agriculture and agricultural land at the national level. The Ministry has several departments, including departments of Rural Development and Advisory Services, Policy Development, Plant Production, and Livestock Production. The Ministry also includes an Agricultural Livestock Institute. The Ministry is responsible for: developing policies and implementing laws for development of agriculture and rural development; facilitating a rural credit scheme; developing land-use policies; and controlling the quality of agricultural inputs. Each municipality has a Directorate for Agriculture (GOK 2009b; World Bank 2007a).

The Privatisation Agency of Kosovo (PAK) is an independent public body that oversees the privatization of SOEs. PAK succeeded the Kosovo Trust Agency (established by UNMIK) in 2008. In 2009, PAK helped create 98 new companies from 85 SOEs (PAK 2009).

LAND MARKETS AND INVESTMENTS

Data regarding Kosovo’s land market is limited, but in some areas the land-sale market in agricultural land near areas with commercial or residential development potential is active and characterized by wide ranges in land prices and a significant amount of land speculation. In some areas agricultural land near peri-urban and urban areas and near roads is selling for prices above its potential value for agriculture, suggesting that buyers plan to convert the land to other uses or hold the land for resale to commercial and residential developers. Sales of more remote and less accessible parcels are less common and are selling for lower prices and appear to be purchased for continued agricultural use. Most parcels changing hands are small: in a 2004 study in the Municipality of Gjakova, only 13% of sales were for parcels larger than 1 hectare (GOK 2006; Stanfield et al. 2004).

While the land market is active in some areas, it continues to be constrained by lack of clarity over land rights, difficulty valuing land, and lack of credit. Private investor interest in SOE land and buildings is limited by several factors, including a lack of clarity over possession and/or ownership; the confused regulatory environment; continued debate about restitution; and ambiguity about how to treat land that has a public interest (Stanfield et al. 2004).

COMPULSORY ACQUISITION OF PRIVATE PROPERTY RIGHTS BY GOVERNMENT

The Constitution (2008) protects against the arbitrary expropriation of property in Kosovo. The state can expropriate property if authorized by law or if necessary to achieve a public purpose or promote a public interest. The Constitution requires the immediate and adequate provision of compensation to the person or persons whose property has been expropriated (GOK Constitution 2008a).

The Law of Expropriation (2009) protects a natural person’s right to seek compensation for property that has been expropriated. Under the Expropriation Law, the state can only expropriate property if the following conditions are fulfilled: 1) the expropriation is related to the accomplishment of a legitimate public purpose; 2) the public purpose cannot be achieved without the expropriation; 3) the public benefits of the expropriation outweigh the negative effects of the expropriation; 4) the property will not be expropriated for any discriminatory purpose or objective; and 5) the Expropriation Authority has followed the applicable provisions of the law. The expropriation of property may be appealed through the court system (GOK Expropriation Law 2009c; GOK Constitution 2008a).

LAND DISPUTES AND CONFLICTS

Competing land claims contributed significantly to violence between Albanians and Serbians, forced displacement, and the destruction of property. Following the end of the Kosovo War, ethnic Albanians began to return to their land, renewing tension as they sought to take back their land, forcing occupiers to seek to reoccupy their original land or seek compensation for its loss. As squatters are evicted from illegally occupied properties and seek new places to settle, they create new areas of potential conflict. Displaced Serbs increasingly migrated out of the country and seek compensation for their property. As of 2009, there were between 50,000 and 60,000 outstanding claims on damaged, destroyed, or illegally occupied property (Bilefsky 2008; Tawil 2009; USAID 2004; Arraiza and Moratti 2009).

UNMIK initially established the Housing and Property Directorate (HPD) and the Housing and Property Claims Commission (HPCC) to resolve disputes over residential land. These agencies accepted claims through 1 July 2003, initially determined to be claims by those who lost possession of their property as a consequence of discriminatory laws and practices during the Milosevic regimes, those who were unable to register purchased property as a result of discriminatory laws, and those displaced at the beginning of the NATO action in 1999. Claims of Kosovo Serbs who were forced from their homes were subsequently added. Landless individuals and households – primarily members of the Roma, Ashkali, and Egyptian communities who had been living in conditions of informal property tenure for decades and whose homes were destroyed upon the return of Kosovo Albanians – did not have standing to bring claims. Remedies were initially limited to restitution, which was not satisfactory to many claimants, and decisions on some issues were not appealed or enforceable by the judicial system (Arraiza and Moratti 2009; KPA 2007; World Bank 2010b)

The Kosovo Property Agency (KPA) was established by UNMIK Regulation 2006/10 (2006) as an independent agency designed to fill some of the gaps of HPCC. The mandate of the KPA is to facilitate the resolution of property claims, including those relating to agricultural and commercial property. Since 2007, around 40,000 claims have been made to the KPA, for which 11,168 decisions have been entered as of mid-2009. The effectiveness of the agency has been constrained by the lack of an enforcement body, budget constraints, lack of data, and a lack of capacity (KPA 2007; Tawil 2009; Arraiza and Moratti 2009).

Kosovo’s Municipal Courts have jurisdiction to handle land disputes that are outside the purview of the KPA. The Municipal Courts also verify property documents (Stanfield et al. 2004).

Blood Appeasement Councils are customary rural institutions that have been used to settle disputes over the boundaries of adjacent privately owned land parcels. Blood Appeasement Councils have representatives from the local families that oversee the ritual forswearing of interfamily feuds in front of witnesses. In the process, mediators secure a temporary exemption and security against persecution and retaliation (besa) for the perpetrator of the original grievance. If successful, the besa will protect the perpetrator from retaliation for a set period of time. The prevalence and effectiveness of the process is not reported, but at least one local council noted that formal law should govern all proceedings (Mangalakova 2004; La Cava et al. 2000).

KEY LAND ISSUES AND GOVERNMENT INTERVENTIONS

The GOK put early and consistent focus on the need for: reconstruction of the land cadastre; development of a legal framework governing land, registration of land and apartments; an efficient claim procedure to resolve the incomplete and unreliable nature of land and property records; and the completion of verification of records already in the MCOs. Property rights institutions (the KCA and MCOs) also require reform and development of institutional capacity. With financial support from Governments of Norway and Switzerland, the World Bank, and GTZ /Germany, the Kosovo Cadastral Agency (KCA) created a 5-year Business Plan and Development Strategy for the 2009–2014 period. The strategy focuses on development in nine different areas, including attention to the policy and legal framework, government steering and structuring of the KCA, role of municipalities, and the development of a land information system. The strategy identifies prioritized cadastral zones and presents a plan for restructuring 35 zones a year and the urban cadastre in seven cities. The framework also calls for the establishment of an Inter-Ministerial Land Administration Committee to advise the GOK and KCA on policy and legislation and implementation of laws (GOK 2008b).

Implementation of the KCA Business Plan and Development Strategy has begun through the 5-year (2010–2015), US $14 million, World Bank-funded Real Estate Cadastre and Registration Project. The project is designed to develop Kosovo’s land and property markets and enhance security of tenure. The project includes components targeting improvement of the capacity of Municipal Cadastre Offices (MCOs) to deliver services and supporting the institutional framework of the KCA. The project will include design and rehabilitation of the MCOs, support for systematic registration, institutional reform, and upgrading KCA technical infrastructure (World Bank 2010b; World Bank 2009).

In 2009, the Ministry of Agriculture, Forestry and Rural Development (MAFRD) reported on accomplishments under the Agriculture and Rural Development Plan (ARDP) 2007–2013 as including: (1) preparing a draft Law on Agriculture and Rural Development and related secondary legislation; and (2) authorizing the MAFRD as the body responsible for implementing the ARDP. Short- and mid-term priorities for the 2009–2013 period include: implementing land consolidation; restructuring the agricultural sector; supporting development of irrigation and water users’ associations; modernizing agro-food establishments; implementing local community development strategies; supporting vocational training to meet rural needs; and developing economic, social and cultural infrastructure in rural areas. MAFRD recognizes that it is handicapped in its ability to address the needs of the rural and agricultural sectors because it lacks current information, and MAFRD plans to engage local institutions to undertake a baseline survey that will provide current data on urban/rural economic and social conditions (GOK 2009a).

In May 2010, MAFRD launched the 36-month, EUR €1.6 million Further Support to Land Use project in cooperation with the European Commission Liaison Office in Kosovo. The project seeks to increase the productivity and the optimal use of agricultural land through preparing and implementing a strategy for land consolidation and the development of a land market, initially through leasing arrangements, and implementation of spatial planning policies and practices (GOK 2009b; ECLO 2009a).

MAFRD undertook land consolidation as part of its Agricultural Land Utilization Project (ALUP). The project drafted regulations to support the consolidation of land and supported pilot land-consolidation projects in two pilot villages. As of the last project report in 2007, the consolidation has been unsuccessful because of insecure and uncertain land tenure, ethnic tension, absentee owners, falsified documents, lack of credit for land purchase, and lack of support for consolidation among landowners (Meha et al. 2007).

DONOR INTERVENTIONS

Through its Commercial Law Reform program, USAID has worked to develop and improve Kosovo’s commercial laws, including legislation related to the land registry and titling system. As a component of its Rule of Law Program, in 2008 USAID developed the Kosovo Justice Support Program, which is working with the GOK to: improve court administration through a model courts program; improve efficiency; build capacity within the judiciary; and support establishment of an independent prosecutor. As of December 2009 the program had model courts underway in Peja, Skenderaj, and the Commercial Court; the first class of 35 candidates for judicial and prosecutorial positions graduated from the Legal Education Program; and a program for the Ministry of Justice to train government legal officers on legislative drafting was established (USAID 2010a; USAID 2009b).

The Food and Agriculture Organization (FAO)’s Development Assistance to Farmers in Remote Areas of Montenegro and Kosovo is a 3-year (2007–2010) US $2.5 million cross-border project encompassing the Sharri and the Peja/Pec mountainous regions. The project’s overall objective is to help increase livestock owners’ standards of living through technical assistance, demonstration, and training of farmer-owned and managed groups and associations. Early reports identify progress in registering farmers, creating appropriate programs, and providing technical assistance on plants, livestock, and business development. The FAO also engaged in a 15-month US $270,000 technical assistance project to establish a GIS-based land resources information system to assist in sustainable land-use planning and land management. (UNKT 2008; Stritih et al. 2008; FAO 2007; FAO 2006)

USAID’s Kosovo Private Enterprise Program is a 4-year, $18 million program designed to stimulate economic growth and improve employment opportunities for Kosovo nationals. The program has targeted economic sectors that show the most promise for increasing employment and income, including: agriculture, construction, ICT, wood and forest products, and tourism. The program focuses on creating market linkages, improving products and production techniques, facilitating trade, provision of business support services, workforce development and small business grants.

The Civil Rights Program Kosovo (CRP/K) is a local NGO that provides free legal assistance and counseling to IDPs, refugees, and minorities at risk of displacement. PRAXIS is a national NGO that continues the work of the Norwegian Refugee Council’s Civil Rights Project in Serbia (1997–2004). PRAXIS provides free legal assistance (including in-court representation), information and counseling in solving a number of conflict-related legal issues in Kosovo, including land rights (Transparency International 2008).

2. FRESHWATER (LAKES, RIVERS, GROUNDWATER)

RESOURCE QUANTITY, QUALITY, USE AND DISTRIBUTION

Kosovo has a mountainous terrain, with the Sharr Mountains in the south and southeast, the Kopaonik Mountains to the north, and a central north-south ridge. Major rivers, including the White Drini, Sitnica, South Morava, and Ibar, cross the country. Large lakes are well distributed, with the Gazivoda in the northwest, the Radonjicko in the southwest, and the Batlava and Badovac in the north and northeast. The country is divided into four water basins/catchment areas: the White Drini, Ibar, Morava e Bincës, and Lepenec water basins. Average rainfall is about 700 millimeters annually, but is highly erratic. Rainfall can be as high as 1750 millimeters annually in the mountains, causing flooding, while drought has become common in the lower-lying areas (Stritih et al. 2008; GOK 2006; Kamberi 2009).

Despite its lakes and rivers, there are regional disparities in the availability of water resources. Regional water companies provide municipalities with water, most of which is piped from reservoirs. Water distribution networks are generally old and suffer from lack of proper maintenance and investment. Few utilities are able to provide regular uninterrupted water supply to their customers. Since 2004, 80% of Kosovo municipalities have suffered from water shortages due to drought and the misuse of water resources. Some regions have had extreme shortages.

Non-Albanian communities in some regions have argued that they receive less water than other groups in the same area. Reports vary in their findings regarding potential discriminatory allocations of water (OSCE 2009; Norman et al. 2010).

Kosovo has a tradition of organizing at the village level to provide irrigation services. Early irrigation management systems expanded and were organized by Public Utility Irrigation Service Providers. Farmers paid village councils a fee for irrigation, and village councils paid the service providers. Kosovo had an estimated 72,000 hectares of irrigable land in the 1980s, with 52,000 hectares under irrigation. Beginning when Kosovo lost its autonomous status in 1989 and Kosovo Albanians lost their jobs and were expelled, the irrigation systems fell into disrepair and were destroyed in the war. When rehabilitation efforts began in 2003, only about 12,000 hectares had functioning irrigation systems. Irrigation systems serving an additional 15,000 hectares have been rehabilitated (Roelofsen 2003; Abazi and Rogier 2005).

Kosovo does not yet have an effective wastewater treatment system. Untreated sewage is discharged into waterways and land areas, contaminating the soil, surface water, and groundwater. Industrial waste is also commonly discharged into the country’s water systems. In villages, waste is disposed of in open channels which contaminate surface and groundwater. Waterborne diseases are common, particularly in rural areas. Some of the main rivers downstream from larger municipalities and industries (such as the Sitnica River) are so heavily polluted that the water cannot be used for water supply or irrigation. (Norman et al. 2010; OSCE 2009; ECLO 2009b).

LEGAL FRAMEWORK

The Constitution (2008) permits all people in the Republic to enjoy the natural resources of the country, provided that use does not impinge on the rights of others. The Constitution also states that water and other natural resources enjoy special protection under the law (GOK Constitution 2008a).

Kosovo’s Water Law (UNMIK Law No. 2004/24) provides for the management and use of Kosovo’s water resources. The Law supports the social, economic and environmental optimization of water resources; conservation and protection; public participation and access; and the equality of use (UNMIK Water Law 2004a).

TENURE ISSUES 

The Water Law defines water resources as all inland surface and ground water, aquifers, precipitation, and lands covered with water. Water permits are required for: abstraction; wastewater discharge; construction uses; reconstruction or demolition of structures affecting water quality and supply; mining activities and geological works that affect water quality and supply; extraction of sand, gravel, stones and clay; and other activities that may affect water quality and supply. Permits are not required for the supply of household drinking water (UNMIK Water Law 2004a).

Under the Water Law, water permits are renewable after five years. A water permit may be revoked for non-compliance or non-use. Permits may be temporarily suspended in times of low water. Water concessions are required for the use of water for power generation, irrigation, the cultivation of fish, and sports and recreation (UNMIK Water Law 2004a).

Landowners are required to allow free access to their land for the necessary development of water resources, implementation of measures for natural protection, flood protection, and other public interest needs. The state can expropriate land and any water resources on the land as necessary to serve the public interest (UNMIK Water Law 2004a).

GOVERNMENT ADMINISTRATION AND INSTITUTIONS

The Ministry of the Environment and Spatial Planning (MESP), which has central authority for water resources, sets water policy and implements water-related legislation. MESP includes a Department of Environmental Protection, the Hydrometeorologic Institute, Water Department, and the Water and Waste Regulatory Office (WWRO). WWRO is responsible for monitoring water companies; issuing, amending, extending, and revoking service licenses; setting up and enforcing service standards; setting up or approving tariffs payable by customers; regulating the mutual rights and obligations of service providers and their customers; and protecting customers (particularly ethnic minorities and other vulnerable groups) from discrimination in the provision of services. Six regional publicly owned water companies cover municipal water supply (ECLO 2009b; Norman et al. 2009).

The Water Authority of Kosovo is the country’s advisory body on water resource management issues. The Water Law also contemplates establishment of River Basin District Authorities to implement the Water Law and any relevant regulations (UNMIK Water Law 2004a).

GOVERNMENT REFORMS, INTERVENTIONS AND INVESTMENTS

The government of Kosovo has been addressing the gaps in the water delivery and quality systems by focusing on structural changes such as consolidating municipal utilities into regional companies and creating a regulatory framework. With the assistance of the European Agency for Reconstruction (EAR), the Water Authority and Ministry of Environment and Spatial Planning are developing a water quality monitoring system, piloting the classification of surface water, flood protection in Skenderaj, and establishing regional water authorities (Stritih et al. 2008; ECLO 2009b; GOK 2006).

In 2009, Kosovo’s Ministry of Environment and Spatial Planning (MESP), the Ministry of Energy and Mining (MEM), and the Ministry of Agriculture, Forestry and Rural Development (MAFRD) met with UNDP advisors and representatives from several regional neighboring countries to review Kosovo’s water resources sector and discuss plans for addressing Kosovo’s response to environmental and climate change challenges, including conducting vulnerability and mitigation-potential assessments and the development of a climate-change strategy and action plan (UNDP 2009).

DONOR INTERVENTIONS AND INVESTMENTS

USAID’s US $2 million Small Infrastructure for Water and Sanitation program is partnering with International Relief and Development (IRD) to help the municipalities of Pejë/Pec, Klinë/Klina, Malishevë/Malisevo, Gllogovc/Glogovac and their respective regional water companies improve the quality of and access to potable water and sanitation for 85,000 residents (USAID 2010b).

USAID is also implementing a new 3-year, $7 million program entitled the Kosovo Water Institutional Sector Reform (K-WISER). The objective of the program is to support the financial and technical sustainability of Regional Water companies to improve water supply and sanitation services for the population of Kosovo as a foundation for economic growth and social well-being.

The European Union (EU) is funding a 2-year (2010–2012), EUR €5.7 million Environment Sector Support project that includes components designed to: strengthen the Ministry of the Environment and Spatial Planning (MESP); design and implement a water tariff system; develop a system of regulatory monitoring of water service companies; and clean the Lepenc River, which is polluted with asbestos. The EU has funded a River Basin Management project, scheduled to conclude in 2010. The project provided technical support to the MESP, including design of software and data management systems, processes for collection of water-related data, production of manuals and training, development of water plans and strategy, irrigation system analysis, and flood-risk mapping (ECLO 2010; ECLO 2009b).

The Kosovo Irrigation Rehabilitation Project I (KIRP-I) ran from 2001 to 2003, and with funding from the European Agency for Reconstruction (EAR) succeeded in rehabilitating irrigation systems covering about 15,000 hectares and providing support for irrigation providers. KIRP-II ran from 2003–2008 and established 22 Water User Associations (WUAs) and six Irrigation Regional Companies (IRCs). The WUAs and IRCs operate through a water user fee and taxation-for-maintenance system of payments, with all payments made through a bank account system to increase transparency and reduce corruption (Roelofsen 2003; Abazi and Rogier 2005).

The Swiss Agency for Development and Cooperation (SDC) funded the CHF $3 million Rural Water and Sanitation Programme from 2007 to 2009, which constructed new water supply systems in 15 villages and handed over management of the systems to the regional water companies. The South-Eastern Kosovo Water Supply and Sanitation Programme (2007–2009) (CHF 1.6 million) helped increase capacity of regional water companies in Ferizaj and Gjilan to increase collection, reduce losses, achieve regular operation and maintenance, and improve customer relations. The CHF $1 million Kosovo Water Task Force Programme (2008–2011) is facilitating the sustainable takeover of the water utilities by local institutions from UNMIK in order to provide cost-effective, high quality water services to all sectors of the population, help the government develop a long-term water sector management structure and the relationships between corporate entities, municipalities and central government. (SDC 2010).

3. TREES AND FORESTS

RESOURCE QUANTITY, QUALITY, USE AND DISTRIBUTION

Forests constitute 43% (464,800 hectares) of Kosovo’s total land area. Of these forests, 278,880 hectares are public and 185,920 hectares are private. About one-third of Kosovo’s forestland is considered ecologically healthy and economically productive. The remaining two-thirds consist of immature trees and bushy low forests that are periodically cut for firewood. Broadleaved forest accounts for more than 90% of the forest area; the primary species are oak and beech. Forests supply timber for processed wood products and are also a source of firewood, wild fruits, different medicinal plants, and construction aggregates. The forestry sector contributes between 1.8% and 2.6% to Kosovo’s GDP, primarily from the sale of wood harvested from public forests (World Bank 2007a; Stritih et al. 2008; Chemonics 2008).

Kosovo’s mature oak forests are threatened. Several species of plants are on the verge of extinction in Kosovo or are already locally extinct, largely due to unsustainable resource extraction. Between 20,000 and 30,000 hectares of forest are barren (SFMP 2007; Stritih et al. 2008; World Bank 2007a; GOK 2009f).

Roughly 40% of public forests and 29% of private forests have been subject to uncontrolled or illegal harvesting, most critically in coniferous forests. Illegal harvesting is partially driven by Kosovo’s irregular power supply. Most homes are not equipped for oil heating, making harvesting firewood a household necessity. Firewood harvesting increased during and after the Kosovo War. Kosovo’s forests have also suffered from ambiguity in management of the forest resources, insufficient capacities to implement new laws and regulations, lack of expertise and personnel, illegal harvesting, and lack of funds and projects to implement the necessary investments in infrastructure and silviculture treatment, particularly cleaning and thinning (SFMP 2007; Chemonics 2007; Stritih et al. 2008; Chemonics 2008).

About 5% of Kosovo’s land is protected forest. The Sharr/Sara Mountain National Park in the south of the country covers 39,000 hectares. A proposed new national park in the Albanian Alps west of Pejë/Peć will protect an additional 50,000 hectares. Other protected areas include two protected landscapes and 38 natural monuments (ECLO 2009a; World Bank 2007a; Stritih et al. 2008; GOK 2006).

LEGAL FRAMEWORK

The Constitution (2008) permits all people in the Republic to benefit from the country’s natural resources, provided that use does not impinge on the rights of others. Under the Constitution, natural resources enjoy special protection under the law (GOK Constitution 2008a).

The Law on Forests in Kosovo (No. 2003/3) defines forest as land managed for the production of wood or other products, or whose best use involves the growing of trees. The law recognizes the importance of forests as a national resource and establishes a foundation for improved forest management and more efficient use of forest land. The Law and its 2004 Amendment (Law No. 2004/29) regulate forests based on principles of sustainable development. The Forest Law recognizes a role for public participation in forestry but does not include a system of community-based forest management (UNMIK Forest Law 2003b).

In some areas of the country, such as Leposovic, the Forest Law is not fully implemented, and forest managers refer to former Serbian legislation for planning and implementation of forestry activities (Stritih et al 2008; World Bank 2007a; Chemonics 2007).

TENURE TYPES ISSUES

Use rights to Kosovo’s public forests are based on written agreements between the Kosovo Trust Agency and the Kosovo Forest Agency. The Ministry of Agriculture, Forestry and Rural Development (MAFRD) grants licenses to harvest timber and non-wood products from public forests and grants permits to graze animals in public forests. The right to issue licenses for use of the forests and forest products can be delegated to local governments or other entities. Municipalities and other bodies with authority to convert public forests to other uses must obtain the consent of the MAFRD before ordering such conversion (UNMIK Forest Law 2003b; Chemonics 2007).

Approximately 60% of Kosovo’s forests are state-owned, while the remaining 40% are privately owned. Owners of private forests are restricted from harvesting trees unless the trees are marked by the Forest Agency as suitable for harvesting. Owners of private forests are required to undertake forest protection or regeneration actions as directed by the Forest Agency. However, there is little institutional capacity to enforce this restriction and intensive deforestation for conversion to agricultural land persists. The Kosovo Forest Agency (KFA) has stated that it would like to have a better understanding of the status and use of privately owned forests (UNMIK Forest Law 2003b; USAID 2009c).

Owners of private forests must allow the public free access to use the forests for bee-keeping, hunting, and non-commercial gathering of fruit, nuts, herbs and mushrooms, provided that such use does not interfere with valid commercial interests (UNMIK Forest Law 2003b).

GOVERNMENT ADMINISTRATION AND INSTITUTIONS 

The Ministry of Agriculture, Forestry and Rural Development (MAFRD) has jurisdiction over forest management and use in Kosovo. At central level it has two main forestry branches: the Department of Forestry (DOF) and the Kosovo Forest Agency (KFA). DOF is responsible for developing the policy and regulatory framework as well as controlling and inspecting forest operations. DOF Forests Inspectors control forest activities in both public and private forests. The National Forest inventory is responsible for recording all forests in Kosovo (SFMP 2007; GOK 2009f).

KFA manages public forestland and is responsible for law enforcement on public and private forestland. KFA has four central directorates (Directorate for Forest Management; Directorate for Pasture Management, Wild Animals, Hunting and Ecotourism; Directorate for Silviculture, Research and Seedling Production; and Directorate for Administration) and six coordinating directorates that operate through 25 municipal units. KFA also operates a nursery that supplies seedlings for afforestation (GOK 2009f; ECLO 2009a).

The Kosovo Trust Agency is in charge of management of Socially Owned Forest Enterprises. Forest management in practice is undertaken by KTA in cooperation with MAFRD/ KFA (Chemonics 2008).

Prior to the enactment of the 2003 Forest Law, municipalities had authority over the forests within their jurisdictions. Ambiguity over the rights of municipalities to manage forests and benefit from forest products remains (Chemonics 2008).

GOVERNMENT REFORMS, INTERVENTIONS AND INVESTMENTS

The Ministry of Agriculture, Forestry and Rural Development (MAFRD) adopted its Policy and Strategy Paper on Forestry Sector Development 2010–2020 in 2009. The Strategy Paper recognizes sector challenges of: lack of human and financial capacity; lack of information regarding the forests; lack of transparency in government operations; illegal harvesting of forest products; sub-optimal revenues from sale of timber; lack of environmental protection; and an undeveloped private sector. The Strategy Paper identifies the following broad areas for initiatives in the 10-year period: (1) forest management and silviculture; (2) forest planning; (3) harvesting and transport; (4) capacity-building; (5) environmental protection; (6) wood use; (7) private-sector development; and (8) development of non-wood products (GOK 2009f).

The 2009–2013 update to Kosovo’s Agriculture and Rural Development Plan (ARDP) (2007–2013) includes a framework for development of sustainable economic, environmental and social use of forests. The Plan emphasizes afforestation of abandoned agricultural land, enforcement against illegal cutting, development of agroforestry, and improvement of forest infrastructure (GOK 2009f).

A 50,000-hectare national park is planned in the Albanian Alps. Once this park has been established, Kosovo will have reached its goal of protecting approximately 10% of its total land area (World Bank 2007a).

DONOR INTERVENTIONS AND INVESTMENTS

USAID conducted a study entitled Forest Industry-Challenges of Development and Balanced Use. The objectives of this study were to: (1) increase the awareness of policy makers and other stakeholders on forestry management; (2) propose policy recommendations aiming to balance Kosovo’s commercial timber and domestic firewood needs; and (3) better understand the economic impacts of the timber industry.

Under the Kosovo Private Enterprise Program, USAID is supporting the development of a forest certification plan for Kosovo, using FSC standards. A Standards Development Group has been established, and a certification manual and standards are in process. The KPEP program is working with the Kosovo Forest Agency and the Standards Development Group to obtain FSC certification for several forests in Kosovo.

The European Agency for Reconstruction, now the European Commission Liaison Office (ECLO), began funding the EUR €1.2 million Sustainable Forest Management project in Kosovo in 2006. The project has been taken up as a component in the ECLO’s 2-year (2010–2012) EUR € 9.1 million Further Support for Agriculture Sector program. The forestry component will focus on: (1) developing capacity within the national institutions (KFA and MAFRD) to manage hunting reserves; (2) help the government create plans for forest infrastructure and nursery development; (3) conduct an illegal-logging survey; (4) assist with development of a national wildlife management plan; (5) assist in improving regulation of private forest owners; and (6) help identify and quantify the potential supply of woody biomass for the generation of energy (PM Group 2009; ECLO 2009a).

4. MINERALS

RESOURCE QUANTITY, QUALITY, USE AND DISTRIBUTION

Kosovo has rich mineral assets, including enormous quantities of brown coal (lignite), but also metals (bauxite, iron ore, and lead-zinc ore), and industrial minerals (aggregates, dimension stone, and magnesite). Lignite is so abundant in Kosovo that it could be exported to provide energy to the surrounding region (Steblez 2006; USDOS 2010; UNMIK 2002b; USAID 2009c).

Lignite is found in the Kosovo, Dukagjin and Drenica Basins, though extraction has been restricted to the Kosovo Basin. Lead, zinc, and silver are found along the Trepca Mineral Belt in the western part of the country, with productive lead, zinc, and silver mines located in Novo Brdo, Belo Brdo, Stan Terg, Hajvalia, and Crnac. The Lydian Resource Company, through its subsidiary the Kosovo Resource Company, is the lead foreign company operating in the Trepca Complex, which includes seven mines, three zinc concentrators, and a zinc refinery. Nickel is mined in open pits in Çikatova and Gllavica (ICMM 2005; Lydian International 2010).

Kosovo’s mining sector has stagnated since 1999. As of 2005, only lignite and construction minerals were being mined in Kosovo. Major mines of other minerals are slowly resuming mining operations (ICMM 2005).

Throughout the Balkans, poorly operated or abandoned mining sites have caused severe pollution, with negative effects ranging from the relocation of communities to respiratory problems. Lead smelters in northern Kosovo have been cited for dangerous levels of lead in the air and in workers and soldiers living in areas around smelters (Woker 2005; UNMIK 2002b).

LEGAL FRAMEWORK 

Under the Constitution (2008), mineral resources are of special interest to the Republic and subject to special protection. The people of Kosovo have the right to use its natural resources in accordance with the law (GOK Constitution 2008a).

The Regulation on Mines and Minerals in Kosovo (UNMIK Regulation 2005/3) governs the mining sector and provides for a range of mineral licenses. It also guarantees security of tenure for the license-holder (UNMIK Mining Law 2005).

UNMIK Regulation 2005/2 created the Independent Commission for Mines and Minerals (ICMM) in Kosovo. UNMIK Regulation 2003/13 On the Transformation of the Right of Use to Socially Owned Immovable Property provides for 99-year leaseholds, including for use in mining activities, on land associated with SOEs (UNMIK SOE Regulation 2003a; ICCM 2005).

The Law on Natural Gas (Law No. 03/L-133 (2009)) establishes a legal framework for the transmission, distribution, supply, usage and storage of natural gas. The Law also specifies the structure of the natural gas sector (GOK Natural Gas Law 2009d).

TENURE ISSUES

Individuals and entities can obtain licenses for mining rights. License or permit types are: (1) exploration license; (2) retention license; (3) exploitation license; (4) special operations permit; and (5) artisanal license. Exploration licenses are granted for 2-year periods with the length and number of extensions depending upon whether exploration is conducted with regard to construction minerals or other minerals. Retention licenses are available for one year from the expiration of an exploration license for construction minerals and for five years from the period of all other exploration licenses. Exploitation licenses are granted for periods of 25 years with renewals of 25 years for construction materials. Exploitation licenses for all other minerals are for periods up to 40 years, with no extension (UNMIK Mining Law 2005).

Artisanal mining licenses are granted for mining for construction minerals for periods of two years. Renewals are available for an additional 2-year period. Special operations permits are granted with reference to the scope of each operation, as determined by ICMM (UNMIK Mining Law 2005).

If a licensee or permit-holder fails to comply with material requirements of the Mining Law, then the license may be revoked after a 60-day suspension period (UNMIK Mining Law 2005).

GOVERNMENT ADMINISTRATION AND INSTITUTIONS 

The Ministry of Energy and Mining is responsible for the development and implementation of policy, strategy, legislation, and determination of general investment conditions. The Independent Commission for Mines and Minerals (ICMM) in Kosovo regulates the mining sector and implements and enforces the Mining Law; handles exploration and exploitation license applications; approves applications for and controls the transport and handling of commercial explosives; provides mines inspectorate services; terminates illegal mining activities; and collects royalties (ICMM 2005).

GOVERNMENT REFORMS, INTERVENTIONS AND INVESTMENTS

Kosovo is developing a strategy for the minerals sector that will focus on: (1) strengthening of institutions and capacity-building on mining-related issues to increase the competitiveness of the industry to support commercialization of SOEs and attract quality private investors; (2) preparation of regulations based on best mining practices; (3) development of data regarding mines, mineral processing plants, and undeveloped mineral resources; and (4) building awareness of greenfield exploration opportunities in addition to potential within existing mines and metallurgical plants (ICMM 2008).

The GOK has identified several priority projects in the mining sector. These include: developing environmentally sound mineral extraction and production techniques; introducing clean technologies into the mining industry; and developing a strategy for the environmentally sound rehabilitation and/or closure of mines (GOK 2006).

DONOR INTERVENTIONS AND INVESTMENTS

The EU has a 2-year (2008–2010), EUR €1 million project, Support to Mines and Mineral Sector in Kosovo. The project is designed to build capacity within the sector by developing credible baseline information on Kosovo’s mineral resources through creation of a geochemical survey. The project is designed to support the Independent Commission of Mines and Minerals (ICMM) and Ministry of Energy and Mining in their use of the Geochemical Survey for planning and developing strategies for land use, resource management, and environmental protection (ECLO 2008).

The International Finance Corporation (IFC) has invested in the Lydian Resource Company’s mineral resources exploration in three regions of the country, including Crepulje in northwest Kosovo, which has high-grade deposits of zinc and lead. USAID funded a study to explore the potential in development of decorative and dimensional stone as part of its Kosovo Cluster and Business Support Program (IFC 2007; Giovannangeli 2005).