[True_Moose]

This is AD&D core rules. Unsure what if anything is changed in BG2.

In any given combat, all of the participants have to roll an X sided die (it says 6 in the rulebook, but I believe it's different in BG.) Lowest roll goes first move. Next lowest gets second, and so on and so forth.

Initiative itself is a random number. However, with spells (like haste) and other factors, you can floor it. I don't believe the -2 modifier has anything to do with the other part though: they're separate parts of the same spell.