AGREEMENT on Mutual Rights and Obligations Regarding the Implementation of Regional Waste Management Plan for the Region of Nis.

Transcription

1 Based on the Article 13 of Agreement on creating Nis Region for joint waste management signed by the City of Nis and Municipalities of Doljevac, Gadzin Han, Merosina, Svrljig, Aleksinac, Sokobanja and Razanj, no. 796/ , dated: Article 13, act 1 of Local Self-Government Law ( Official Journal off RS no. 129/07), Article 9, act 3 of Business Association Law of RS ( Official Journal of RS no. 36/2011 and 99/2011), related to the Article 2, act 3, point 4 and Article 10 of Communal Activity Law ( Official Journal of RS no. 88/2011), Article 9 of Law on Public-Private Partnership and Concessions ( Official Journal of RS no. 88/2011) and Article 21 of Waste Management Law ( Official Journal of RS no. 36/09 and 88/2011), the City of Nis and Municipalities Gadzin Han, Doljevac, Merosina, Svrljig, Aleksinac, Sokobanja and Razanj, sign on AGREEMENT on Mutual Rights and Obligations Regarding the Implementation of Regional Waste Management Plan for the Region of Nis Article 1 Specific terms, which are used in this Agreement, have the following meaning: 1. Public-private partnership project is the project which is written, proposed, approved and implemented in accordance with one of public-private partnership models and implies mutually related activities which are performed in specific sequence for the purpose of accomplishing previously defined goals, within time frame and agreed financial funds, and which is legally approved as public-private partnership with or without elements of concession. 2) Contractual public-private partnership is public-private partnership in which mutual relations between public and private partner are defined by public-private partnership agreement. 3) Public agreement is agreement on public-private partnership with or without elements of concession which is signed in written form by and between public and private partner, i.e. public or private partner and special purpose association, where mutual tights and obligations of contracting parties are defined for the purpose of implementing public-private partnership project. 4) Institutional public-private partnership is public-private partnership based on the relation between public and private partner as the founder,i.e. members of a business association which are project leader which implements public-private partnership project. 5) Special Purpose Association (hereinafter referred to as SPA) is business association which can be found by private entrepreneurs or public partner for the purpose of signing the public agreement, or for the purpose of implementing public-private partnership project. 6) Public Body is: (1) state organ, organization, institution or other direct or indirect budget and beneficiary in terms of the law which defines budget system and budget, as well as organization for obligatory social insurance, (2) public enterprise

2 (3) legal entity which performs activities of general interest, if it meets some of the below stated criteria: - that more than half of the members of management organ of the legal entity are representatives of the public body - that more than half of the votes n legal entity s management organ are representatives of the public body - that the public body supervises the work of the legal entity - that the body possesses more than 50% of shares of the legal entity - that more than 50% is financed from public body s funds (4) legal entity which is founded by the public body, which performs activities of general interest and which meets at least one requirement defined in act 7) part (3) of this Article 7) Public Enterprise, in terms of this Law, is each enterprise or business association which can be influenced by the public body based on the ownership, financial share or legal regulations. Dominant influence of the public body is present when, referring to the enterprise or association, the subjects, directly or indirectly: (1) possess majority of the written capital, or (2) control majority of votes based on shares issued by the enterprise or business association (3) can appoint more than half members of managing, business or supervising organ of the enterprise or business association. 8) Public partner is one or more public bodies, i.e. legal entity which authorized to grand concessions by the law, which signs public agreement with private partner or SPA. Public partner can refer to one or more public bodies which are connected with the private partner by means of membership n joint business association. 9) Private partner is physical or legal entity, domestic or foreign, with domestic or foreign share, or without it, or consortium of one or more physical or legal entities which are selected in the procedure of public procurement or concession granting proceeding and which sign public agreement with public partner, found SPA for the same purpose or joint business association with public partner. 10) Procedure of selecting the private partner is a procedure of public procurement in accordance with the law that regulates public procurements or concession granting. 11) Concession compensation is the compensation paid by the concessionaire or grantor in accordance with the public agreement which regulates concession. 12) Decision on selecting the most favorable bid is the act adopted by the public body after assessing submitted bids for awarding the public agreement, all in accordance with open competition documents and criteria for selecting most favorable bid. 13) Bidder is legal or physical entity which submits the offer in the procedure of public procurement for awarding the public agreement or in the procedure of concession granting. 14) Republic Commission is Republic Commission for Protecting Rights in the procedure of public procurement which is formed in accordance with the Law which defines public procurements.

3 15) Self-initiated proposal means the proposal that the stakeholder submits to the public body for public-private partnership project implementation with or without elements of concession, which is not submitted as response to public invitation of the contracting party as part of the procedure of awarding the public agreement 16) Adviser is one or more legal or physical entities which have specialized knowledge necessary for preparing, agreeing upon and implementing public-private partnership projects 17) Written or in written form refers to each notice which consists of letters or numbers which can be read, multiplied and distributed. Such a notice can include data which are transferred and kept in electronic form. I BASIC PROVISIONS Agreement Subject Article 2 Pursuant to the Law, Strategy of Waste Management for the period ( Official Journal of RS no. 29/10), Agreement on Forming Nis Region with Joint Waste Management signed by the City of Nis and Municipalities Doljevac, Gadzin Han, Merosina, Svrljig, Aleksinac, Sokobanja and Razanj, Regional Waste Management Plan for the Region of Nis, the City of Nis and Municipalities Doljevac, Gadzin Han, Merosina, Svrljig, Aleksinac, Sokobanja and Razanj (hereinafter referred to as: Signatories) sign this agreement in order to define the following: - implementation of goals and tasks related to communal waste management defined in Regional Waste Management Plan for the Region of Nis - financing preliminary activities for the construction of joint regional center for waste management - founding regional communal capital business association - defining relations between regional communal capital business association and local public communal enterprises - ways of defining the price for communal waste disposal and treatment - defining the manner of financing waste disposal and treatment plant through PPP procedure - adjusting municipal or city resolutions which regulate communal waste treatment system - conditions under which other units of local self-government may joint this agreement - conditions under which the agreement may be terminated - other issues which are relevant for organization and implementation of communal waste management. II GOALS, PRINCIPLES AND TASKS RELATED TO COMMUNAL WASTE MANAGEMENT Goals of Coomunal Waste Management Article 3 The goal of joint waste management is long-term establishment of sustainable regional system of waste management in a way which will have minimum hazardous impact on the environment and human health, with rational utilization of resources and respect to the modern principles of waste management and by choosing the optimum option for the

4 environment, for the purpose of reducing surface and underground water, soil and air pollution. By disposing and treating waste in regional center, agreement signatories will enable accomplishing the following goals related to communal waste management: - preventing waste creation, reducing resource using and decreasing harmful effects of the created waste - higher degree of waste exploitation- reuse of the products for the same or different purpose, recycling, physical, chemical and biological waste treatment, or waste treatment which results in obtaining production raw material - implementation of efficient administrative and professional organization - securing stable financial resources and encouraging mechanisms for investing and implementing activities in accordance with the principle- pollutant pays and/or beneficiary pays - implementation of information system which covers the flow, quantity and locations of waste, treatment plants, procession and using material and energy, and waste disposal plants - increasing the population which is covered by communal waste collection system - establishing standards for waste treatment - reducing, reusing, recycling and regeneration of waste - sustainable waste management - proceeding with communal waste in accordance with laws and legal regulations - accomplishing other goals which are defined in the National Waste Management Strategy and Regional Waste Management Plan for the Region of Nis Recycling Communal Waste Article 4 Communal waste recycling is organized in accordance with the law which defines the sequence of priorities, i.e. waste management hierarchy, all in accordance with technical and economic possibilities. If waste disposal or treatment represents ecologically justifiable option of treating waste, the principle of hierarchy, is terms of giving advantage to recycling, is no longer valid. Communal Waste Management Tasks Article 5 Implementation of Regional Waste Management Plan implies the following: 1. Adopting the Agreement on Founding Regional Enterprise for Waste Management Agreement signatories agree to consider and adopt a Resolution on founding capital association at their Assemblies, all in accordance with the Law on Business Associations and Law on Communal Activities 2. Making priorities in communal waste management Communal waste management priorities are: - reuse of the products for the same or other purpose - recycling, i.e. treating waste for the purpose of obtaining raw material for the production of the same or other product - using waste value (composting, thermal procession which implies using energy, etc.)

5 - disposing waste or thermal procession without using energy, if there is no other solution 3. Collecting and transporting waste in regular basis Communal waste from households, catering and industrial enterprises is collected and removed from municipalities and Agreement signatories cities on regular basis in the way which is defined by the appropriate acts, all in accordance with Regional Waste Management Plan. Catering and industrial enterprises may be disconnected from the system of collecting, recycling and disposing waste which contains harmful matters, if the waste type and quantity cannot be collected, transported and disposed together with household communal waste. 4. Looking after the existing dumps Agreement signatories are in obligation to finance remedying of the existing dumps, each signatory on its territory. III CONSTRUCTION OF REGIONAL CENTER AND WASTE TREATMENT PLANT Construction Location and Expropriation Article 6 Agreement signatories agree that the construction of the regional center and waste treatment plant be exclusively carried out on the territory of Municipality Doljevac, in accordance with PPO of Municipality Doljevac ( Official Journal of the City of Nis no. 16/2011) and future Detailed Regulation Plan for the needs of constructing regional center and waste treatment plant. Financing land expropriation mentioned in paragraph 1 of this Article will be carried out in proportion with the population of each Agreement signatory as stated by the latest census (Table 1). Land expropriation will be carried out in accordance with the dynamics of the inflow of funds for this purpose. Expropriated land may be alienated or given in long-term lease only if the founder, i.e. local self-government unit approves such action. Invested funds represent Agreement signatories founder share in regional communal business association in accordance with percentage defined in Table 1 and invested funds. Agreement signatories agree that the funds from act 2 of this Article be planned in the 2013 and 2014 City and municipalities budgets. Drafting and Financing Plan Documents Article 7 Financing the drafting of the mission plan and technical documentation in accordance with the Law on Planning and Construction (previous Final Design Feasibility Study, Preliminary Design Feasibility Study, Environmental Assessment Study, Detailed Regulation Plan, Expropriation and other documents) is carried out in proportion with the population of each Agreement signatory as stated in the latest census (Table 1) except for Municipality Doljevac, since the City of Nis and the stated Municipality will sign special Agreement.

6 Invested funds represent Agreement signatories founder share in regional communal business association in accordance with percentage defined in Table 1 and invested funds. The city or municipality with the largest census population signs Agreement on document drafting on behalf of all signatories, while legal procedures are carried out by the municipality where the landfill will be located. Plan documents and land expropriation beneficiary is newly formed regional communal business association. Agreement signatories are in obligation to secure the necessary funds in 2013 and 2014 budgets. Relations between the City of Nis and Municipality Doljevac, regulated by the Agreement on forming Nis Region Waste Management and other Agreements and Contract between the two local units signed before this Agreement, remain in force. Table 1. Municipalities participation showed by percentage: City/Municipality Population % City of Nis Municipality Aleksinac Municipality Doljevac Municipality Sokobanja Municipality Svrljig Municipality Merosina Municipality Razanj Municipality Gadzin Han Financing Construction of Regional Center and Waste Treatment Plant Article 8 Agreement signatories agree that financing of regional center and waste treatment plant will be secured by including a private partner in accordance with Law on Public-Private Partnership and Concessions. Private partner s participation in Regional Center design, financing, construction and management will be applied for the purpose of: - securing the missing funds for the construction of Regional Center - securing the best available waste treatment technologies - increasing business efficiency for the purpose of making profit, which will result in decreased prices of communal services and increased quality of services IV REGIONAL COMMUNAL BUSINESS ASSOCIATION Foundation of Regional Communal Business Association for Waste Management Article 9 Agreement Signatories agree that their Municipal Assemblies and City Assembly consider and adopt all the necessary resolutions and found regional communal capital association which will perform operating tasks in regional center for waste disposal and treatment,

7 manage transfer stations and manage waste transportation from transfer stations to regional center. Business association activities will be defined by Founder s Act in accordance with nomenclature that defines waste disposal and treatment activities. Head office of regional communal business capital association is in the City of Nis. Agreement signatories agree that local communal enterprises are responsible for collecting and transporting waste to the Regional Center or transfer station. If Agreement signatory does not already have a local communal enterprise responsible for collecting waste, it is free to organize waste collection in accordance with its defined resolutions. Goals of Establishing Regional Communal Business Association for Waste Management Article 10 Goals of establishing Regional Communal Business Association for Waste Management ARE: - constructing new regional center for waste management and treatment - constructing transfer stations and transporting waste to the regional center - extracting, collecting and separating usable waste from communal waste which is separated at the location - preparing or processing scrap and placing them on the market - development and promotion of recycling systems - constructing the necessary plants and infrastructure Agreement on Establishing Regional Business Association for Waste Management Article 11 Establishing Regional Business Capital Association, name, activities, branch offices in municipalities and cities which are Agreement signatories, as well as coordination, transportation, transfer station, foundation means and funds for initiating business, rights, obligations and liabilities, defining and allocating profit, risk division, organs, representation and other issues will be defined by the Foundation Agreement which is proposed by the Regional Council foe Waste Management for the Region of Nis and adopted by Agreement signatories Assemblies. Closing the Existing Landfills Article 12 Agreement signatories agree to close all existing landfills, whether they are legal or illegal and make sure that regional center remains the only center on the territory within 180 days from the date of issuing certificate which confirms that the Regional Center can start collecting waste. Agreement signatories are in obligation to remedy and re-cultivate the existing landfills for disposal of solid communal waste which is located on the territory of each signatory. Each signatory will accept the obligation form paragraph 2 for its own territory.

8 Communal Waste Disposal Article 13 Regional Communal Business Capital Association will carry out communal waste disposal and treatment tasks on the territory of Agreement signatories. In special cases, i.e. in case of ecological waste management which is economically justified and approved by all signatories, they will deviate from the provision defined paragraph 1 of this Article. Agreement signatories agree to adjust normative acts as soon as possible and provide the possibility of entrusting waste disposal and treatment to business association as organizational form of enterprise business dealing. Principles of Defining the Amount of Waste Disposal and Treatment Compensation Article 14 By joining material and financial potentials, signatories goal is to define the amount of compensation for waste collecting and disposal in accordance with the provisions of the Law which defines communal activities. 1. principle of applying optimum option for the environment 2. applying the principle polluter pays 3. principle of promptness and regional approach to waste management 4. principle of hierarchy in waste management 5. no difference in prices for different categories of consumers, except if the difference is based on different costs of providing communal service 6. principle of responsibility of waste generator 7. principle that price is sufficient to cover business expenses 8. adjusting prices of communal services with availability principle Compensation for Communal Waste Disposal and Treatment Article 15 Charging the service of communal waste disposal and treatment in regional center is performed per ton of delivered waste which communal business association will claim from local public communal enterprises which provide the services of collecting and treating waste at the signatory s territory. The price of the service will be unified for all beneficiaries, depending on the category of delivered waste (mixed or separated waste). Signatories agree that their local public communal enterprises will charge for the service of collecting and treating waste along with the service of collecting and transporting communal waste. Signatories agree that the amount of the charged service for waste disposal and treatment will be shown in the bill separately from the service of collecting and transporting solid communal waste. This will apply to every signatory. Additionally, signatories are in obligation to support the effort of their local communal enterprises to reduce business expenses and increase debt collection in order to pay their debts from the compensation for solid communal waste collection and treatment.

9 Regional communal business association will send invoice to signatories for compensation for waste treatment and disposal to the regional landfill once a month. These and all other provisions will constitute special Agreements which will be signed by Regional communal business associations and local public communal enterprises, based on resolutions of Signatories Assemblies on entrusting communal activity tasks. The amount of compensation for communal waste disposal and treatment at Regional Center will be defined in PPP procedure by resolution on choosing Private Partner s best bid, with consent of the contacting parties authorized organs. Price change will be carried out based on previously determined economic parameters. If Agreement signatories already charge the service of waste disposal and treatment as defined in act 3 of this Article or do such before the Center for waste disposal and treatment starts working, they are in obligation to adjust the compensation amount and business dealings with this Agreement. Cooperation with Municipalities which are not Agreement Signatories Article 165 Waste disposal and treatment for municipalities and cities which are not Agreement signatories can be carried out if regional communal business association can perform such activities, if the activities are in accordance with staff and material resources, and if disposal and treatment plants have free capacity. Joint regional communal business association will carry out tasks defined in act 1 of this Article on behalf of other municipalities and cities exclusively on economic base and in accordance with market conditions, based on special agreement and written consent of Agreement Signatories. Management Organs of Regional Coomunal Business Association Article 17 Agreement signatories agree that Regional Communal Business Association will be bicameral business association with limited liability. Management organs are Capital Association Assembly, Supervising Board and Director. Association Assembly makes a decision by majority of total votes. Total number of Joint Regional Communal Business Association Assembly votes is 100. Each Agreement signatory has the number of votes which is in proportion with their participation in financing (Table 1). The proportion is 1%=1 vote. Association Assembly has 8 members; each Agreement Signatory is represented by one member who has disproportional number of votes in accordance with the share percentage. These are the persons who are authorized for representation- Mayor and Municipal Presidents or persons who have their authorization. Supervising Board has 3 members who are appointed by the Association Assembly. Association Director appoints the Supervising Board.

10 Relations between the founders are regulated by Agreement on establishing business association, all in accordance with Law on Business Associations of RS. V PUBLIC PRIVATE PARTNERSHIP PPP Principles Article 18 Defining the procedures, ways and terms of establishing PPP Agreement is based on the following principles: - public interest protection - efficiency and transparency - equal and righteous treatment - freedom of market game - proportionality - environmental protection - autonomy of will and equality of contractual parties PPP Subject, Concept and Public Agreement Article 19 Agreement Signatories agree that specific activities in communal waste management may be carried out in corporation with private partner, in form of PPP project with or without elements of concession. Performed activity is to be defined in the registration form of Regional Communal Business Association mentioned in Article 9 of this Agreement. According to the needs of Agreement signatories, the form of PPP which will be applied is INSTITUTIONAL PPP which implies establishing or recapitalization (if PPP has already been established) of Regional Communal Business Association mentioned in Article 8 of this Agreement. PPP concept, which is applied in accordance with signatories needs is DBFO (design, build, finance and operate) modality of BOT concept. Mutual rights and obligations related to implementation of PPP project with or without elements of concession are defined by Public Agreement, the content of which is defined by Article 46 of Law on PPP and Concessions of RS. Provisions of the Law which defines obligation relations will be applied for all issues which refer to public agreements and which are not defined in this Law. Agreement signatories agree that the selected private partner has contractual obligation to pay costs of water, air and soil monitoring at endangered locations of Doljevac territory, as well as the cost of protection and removing the consequences which might occur. On the other hand, Municipality Doljevac is in obligation to control the level of environmental protection in accordance with positive legislation.

11 Public Partner, Public Body and SPA Article 20 Agreement signatories agree that Public Partner is the signatory with the largest populationthe City of Nis, as in accordance with Law on PPP and Concessions. The City is in obligation to sign Public Agreement with Private Partner. Signatories agree that, in terms of Law on PPP and Concessions, Pubic Body for initiating and implementing PPP procedure is Regional Development Agency South Nis. Regional Communal Business Association mentioned in Article 9 of this Agreement has the status of SPECIAL PURPOSE ASSOCIATION in PPP procedure. PPP Project With or Without Elements of Concession Article 21 PPP project without elements of concession contains all provisions defined in Article 23 of Law on PPP and Concessions. If PPP has elements of concession, Draft Concession Act contains all provisions defined in Article 39 of Law on PPP and Concession. Public Body proposes the project or Concession Act. Project is adopted by Public Partner s Assembly. Public Body may engage Advisors for preparing the Project, all in accordance with the Law. Private Partner pays the cost of preparing and implementation of PPP Project. The costs are integral part of tender documents. Public Body can consider and accept stakeholders self-initiated proposal for implementation of PPP Project, if the proposal does not refer to the project which has already been included in public procurement procedure or agreement signing procedure. Private Partner pays the costs of drafting PPP Project proposed by a stakeholder, except in case the private partner and stakeholder are the same person. Authorized Commission for PPP and Concessions signs consent for PPP Project. VI RESOLUTIONS ON REMOVING COMMUNAL WASTE Adopting Decisions Article 22 Signatories Assemblies are in obligation to adopt resolutions which will be applied on signatories territories, all in accordance with legal regulations and Regional Council s proposals within 90 days from the date the Regional Center starts working. Resolutions are to contain provisions which refer to: - persons who are subject to this Resolution - obligations of Resolution subjects to use specific services and systems in waste management sector - compensation for using waste disposal and treatment services

12 VII FINANCIAL EXPENSES RELATED TO COOPERATION Special and Individual Expenses Article 23 Each participant will pay his own expenses related to implementation of goals and resolutions defined in this Agreement, while joint expenses will be covered by applying percentage rate as defined in Article 7, Table 1 f this Agreement and in accordance with act 2 of the same Article. Mandatory Elements of Reporting Article 24 Signatories agree that joint regional communal capital association is on obligation to write reports and inform the founders about business dealings of the enterprise, especially the following: - important events which have occurred after the end of business year - proposal of further development of regional communal capital association - changes on cadaster lots which belong to regional communal capital association - degree of utilization of buildings and devices - state of constructed buildings and buildings planned for construction - state of own reserved capital with individual statement of initial balance, flux and reflux - turnover income by means of statistics of funds quantity and compensations/taxes - costs of employees via statistics that defines number, total salary amount, social compensations, pension and disability insurance, as well as other legal obligations per business year Obligations defined in this Article apply to SPA after PPP procedure VIII SIGNATORY S WITHDRAWAL, EXCLUSION AND TERMINATION Agreement Signatory s Withdrawal Article 25 Signatory may withdraw by his own free will, by resigning or being excluded. Withdrawal request can be submitted if a Signatory: - fails to fulfil obligations defined in this Agreement - has a significant influence on preforming tasks which are defined in this Agreement - behaves in a way which puts into danger other signatories and continue such practice even after being warned by Regional Council for the second time. Withdrawal is possible only if the participant has been warned about legal consequences of exclusion each time. Agreement Signatory s Exclusion Article 26 Two-third majority of all signatories who have signed Agreement on Establishing Nis Region Waste Management and this Agreement is necessary for excluding.

13 Agreement signatories agree that the members of Agreement on Establishing Nis Region Waste Management adopt a resolution on exclusion based on the proposal of all municipal or city boards who have signed this Agreement. Prior to making the final decision, participant who will be excluded has the right to state his argumentation. Agreement Signatory exclusion is possible due to serious and long breach of contractual obligations which jeopardize the functioning of Regional System (delaying to suggest proposals that provide functionality of regional system to Assembly agenda, being several months late in paying amounts necessary for financing project-technical documents, etc.). Excluded member of Agreement on Establishing Nis Region Waste Management is in obligation to pay all due financial amounts until the moment of exclusion. Other signatories may require damage compensation from the excluded signatory by means of legal suit). Legal Force of Withdrawal Article 27 Signatory s withdrawal based on his own statement that he terminates Agreement on Establishing Nis Region Waste Management and this Agreement (or in case signatory is excluded) has legal force at the end of the business year. Percentage that signatory has in establishing of the Center is allocated to other signatories in accordance with the percent of their participation. Admission of New Members Article 28 New signatories admission is an act of free will followed by Letter of Intention which states the reasons for accepting a new member. Two thirds of Agreement Signatories votes are necessary for admitting a new member. Decision on signing consent mentioned in act 2 of this Article is adopted by City and Municipal Boards of Agreement Signatories. The above stated Resolution defines financial and other obligations, as well as deadline for their fulfilment. All provisions which are defined in this Agreement and Agreement on Establishing Nis Region Waste Management are applied to the new member starting from the date of admittance. In case of being admitted, new participant is in obligation to pay single compensation which is in proportion with the amount of the investment paid by the other participant with similar number of population in the period from the signing of the Agreement to the admission of new member. Termination of Founders Rights in Regional Communal Business Association Article 29 Signatories agree that termination of founder s rights n Regional Communal Business Association means that a member loses all rights in terms of this Agreement and Agreement on Establishing Nis Region Waste Management.

14 Resolution on Terminating the Agreement Article 30 Consent of majority of Signatories Assemblies is necessary for terminating this Agreement. XI FINAL PROVISIONS Applying Other Regulations Article 21 Appropriate provisions of Law on Business Associations, Law on Communal Activities, Law on Local Self-Government, Law on Waste Management, Law on PPP and Concessions, and provisions of Law on Obligation Relations will be applied to all issues which are not regulated in this Agreement. After signing this Agreement, relationship between the City of Nis and Municipality Doljevac, especially in terms of waste disposal, will be regulated by Agreement on Establishing Nis Region Waste Management and other agreements and contracts signed by the two units of local self-government which remain effective. Solving Disputes Article 32 In case of dispute related to the application of this Agreement, signatories are in obligation to solve a dispute amicably within 15 days. If amicable solution is not possible, signatories will establish arbitrage within 15 days from the date amicable solution could not be reached. Ministry responsible for Environmental Protection states the fact that agreement has not been reached within 15 days. From the date the Ministry has stated that agreement has not been reached, arbitrage establishment deadline starts (which implies appointing arbitration members). Arbitrage consists of one elected representative of each Agreement signatory, one neutral member who is the expert in the field which is the subject of dispute ad one representative of authorized Ministry responsible for Environmental Protection. If some of the local selfgovernments fail to appoint a member within 15 days from the date the Ministry has stated that solution cannot be reached, the Ministry shall appoint a member at its own choice. Arbitrage is in obligation to make a decision within 30 days from the date of establishment. Conclusions and decisions are final and binding for all Agreement participants. Binding decision of arbitrage in Agreement related dispute supersedes specific provisions of the Agreement, especially those which are the subject of dispute, i.e. becomes the integral art of the Agreement. Arbitrage Agreement does not have legal effect for solving dispute which is not subject of arbitration (as in accordance with Law on Arbitrage). In case the damage is cased to third persons and is related to the Center s activities, the Center shall compensate the damage. Validity of Specific Agreement Provisions Article 33 If one or more provisions of this Agreement are deemed void, signatories agree to respect all other provisions of the Agreement and fulfil all other obligations defined in the Agreement.

15 In case mentioned in act 1 of this Article, signatories are in obligation to adjust the void provision with positive regulations. Changes and Amendments to the Agreement Article 34 All changes and amendments to the Agreement are to be approved by all signatories. Changes and amendments are to be made in written form. Integral Part of the Agreement Article 35 Signatories Assembly Resolutions on adopting and approving the procedure of signing this Agreement make integral part of the Agreement: - Assembly Resolution of the City of Nis, no / , date: Assembly Resolution of Municipality Razanj, no /13-11, date: Assembly Resolution of Municipality Sokobanja, no /2013, date: Assembly Resolution of Municipality Aleksinac, no , date: Assembly Resolution of Municipality Svrljig, no /2013, date: Assembly Resolution of Municipality Merosina, no , date: Assembly Resolution of Municipality Gazin Han, no /2013-II, date: Assembly Resolution of Municipality Doljevac, no , date: Agreement Copies Article 36 This Agreement is made in sufficient copies so that each participant can receive one copy in order to sign it after securing all approvals and consents. Agreement Force Article 37 Tis Agreement enters into force on the eighth day from the date it has been signed by all signatories. Agreement is published in signatories official papers. Date: