BOSNIA - SCENESETTER FOR THE FEBRUARY 26-27 PIC

C O N F I D E N T I A L SECTION 01 OF 03 SARAJEVO 000441

SIPDIS

NOFORN
SIPDIS

DEPARTMENT FOR EUR DAS DICARLO AND EUR/SCE(HOH/FOOKS); NSC
FOR BRAUN

E.O. 12958: DECL: 02/01/2015
TAGS: PREL PGOV PINR KJUS BK
SUBJECT: BOSNIA - SCENESETTER FOR THE FEBRUARY 26-27 PIC

REF: A. SARAJEVO 62

B. 06 SARAJEVO 3209

Classified By: Ambassador McElhaney. Reason 14.(b) and (d).


1. (C) SUMMARY: We expect the February 26-27 meeting of the
Peace Implementation Council (PIC) to approve a one-year
extension of OHR's mandate (i.e., to June 2008),though we
anticipate the Russians will complicate efforts to reach
consensus on this decision. High Representative Christian
Schwarz-Schilling has not yet accepted that an extension
requires a "fresh start" at OHR, however. His personal
interests are as likely to drive his approach to certain
issues, such as use of the Bonn Powers and constitutional
reform, as much as an his "objective assessment" about the
type of OHR required for the next 16 months. Police reform
talks (as of this writing) remain deadlocked, and the
intialing of a Stabilization and Association Agreement in the
near term appears less and less likely. The International
Court of Justice's (ICJ) ruling on Bosnia's claim that Serbia
and Montenegro was responsible for genocide, due on February
26, may overshadow the PIC's decisions on OHR's future. The
PIC must also address a Bosnian Constitutional Court ruling
that the HighRep violated the human rights of two former
Republika Srpska officials he removed from office in 2004.
END SUMMARY

OHR's Future
--------------


2. (C) A consensus is emerging within the PIC to extend OHR's
mandate one year (i.e., to June 2008) with a review in
December 2007. The Russians are the principal holdout and
will likely argue for a shorter extension (to the end of
2007) and no review. The Russians see the latter as opening
the door to another extension. Though Schwarz-Schilling's
assessment will recommend a one-year extension, it will
remain silent on a review. Though he personally supports a
review, he has told us that he "expects the Quint Political
Directors to persuade the Russians" on this issue. We expect
the Russians will seek to link an extension to Kosovo in
order to justify an end of 2007 closure without a review.


3. (C) Schwarz-Schilling does not plan to recommend a revised
OHR work plan to the PIC, but he may distribute a "food for
thought" paper about what an extended OHR should focus on in
the next year. We will want to ensure that this reflects
U.S. priorities, notably outstanding Dayton issues, defense
reform, ICTY, Brcko, and rule of law issues. OHR and our
European colleagues often interpret "rule of law" to mean
"police reform." While police reform is important, our
agenda is broader and includes strengthening all the of
recently created state-level law enforcement and judicial
institutions. OHR's extension is an opportunity to focus the
international community on this agenda, and we will want to
ensure discussion of OHR's future is not too EU-centric.

Schwarz-Schilling's Future and the Bonn Powers
-------------- -


4. (C/NF) Despite the clear message that it is time for a
"fresh start," Schwarz-Schilling has not given up on the
possibility of staying on as HighRep. The Russians have
reportedly told him it would "make sense" for him to stay on,
if OHR was extended only six months. Several OHR staffers
tell us Schwarz-Schilling believes a prolonged delay in
naming his replacement would require the the five major
allies to reverse themselves and ask him to stay on rather
than leave the HighRep's chair vacant. Schwarz-Schilling
tells us that he was told by Berlin that "the Americans"
forced him out; a message we suspect he has heard from other
European capitals. This may explain his faith in European
inertia regarding his replacement. Regardless, we will want
to use the margins of the PIC to push the Europeans to begin
thinking more seriously about a successor.


5. (C) We must also be mindful of attempts by
Schwarz-Schilling and/or the Russians to insert language into
the communique that would tie the new HighRep's hands with
regards to the Bonn Powers. Schwarz-Schilling sees a PIC
endorsement of his "ownership" strategy as mitigatin
somewhat the personal blow he suffered when thefive major

SARAJEVO 00000441 002 OF 003


allies decided on a "fresh start" at OHR. In this context,
he has raised privately with us the possibility of defining
at the PIC what issues would and would not warrant use of the
Bonn Powers by a future HighRep. The Russians would likely
embrace such an approach, albeit for different reasons (i.e.,
to shield the Bosnian Serbs from political pressure for
reform),or they might press independently for language
designed to restrict the ability of the new HighRep to
exercise the Bonn Powers.

Constitutional Reform
--------------


6. (C) We previewed our preliminary thinking about "next
steps" on constitutional reform with Schwarz-Schilling on
February 21. He appeared open to linking legislation
creating phase two architecture to the U.S.-brokered package
of amendments and accepted that a phase two structure must
include political party leaders. We also stressed that a
structure inside the EUSR did not reflect earlier agreements
for a U.S.-EU-Bosnian partnership on constitutional reform.
We doubt Schwarz-Schilling will raise these details during
the PIC, but he will want a more detailed U.S. response to
his constitutional reform proposal during his bilateral
meeting with the U.S. before the PIC. In that context, he
may push us to propose a faster timeline for putting phase
two structures in place. At the PIC itself, we will want to
ensure that the communique does not soften previous Steering
Board support for the U.S.-brokered package of amendments
even as it signals support for a U.S.-EU partnership for a
second phase of constitutional reform.

Police Reform
--------------


7. (C) As of this writing, police reform political talks have
yet to produce a deal that would clear the way for the
initialing of a Stabilization and Association Agreement
(SAA). The talks themselves represent progress, however, and
it is notable that the Serbs have accepted the Police
Directorate's report as a basis for reaching a deal.
Nonetheless, the fundamental problems remain; Dodik continues
to try and undercut the three EU principles and the Bosniaks
have yet to engage constructively. PDHR Gregorian deserves
credit for reinvigorating the police reform process, but his
role has also opened him up to unfair criticism from all
sides. The Bosniaks and Europeans have accused him of making
too many concessions to the Serbs. The current proposal
reflects European willingness to retreat regularly in the
face of Dodik's demands over the last year and the Bosniak
decision to step back in hope that OHR would simply impose a
deal to their liking rather than negotiate. Dodik accused
Gregorian of cutting a "secret deal" with the Bosniaks to
force more "concessions" out of him.

International Court of Justice
--------------


8. (C) On February 26, the ICJ will rule on the case
concerning the "Application of the Convention on the
Prevention and Punishment of the Crime of Genocide (Bosnia
and Herzegovina v. Serbia and Montenegro)," and the PIC will
be expected to comment on it. OHR plans to have a legal team
in Brussels to review the decision and brief the Steering
Board as soon as it is published. Whatever the verdict, the
PIC must balance institutional support for the ICJ and
respect for its decisions with the political situation in
Bosnia and the region. Our aim should be to encourage, as
much as is possible, Bosnia's political leaders to respond to
the ICJ ruling responsibly and realistically. We should
expect to have to manage the political fallout from the
ruling well beyond the PIC, however.

Human Rights, Dayton, and the Bonn Powers
--------------


9. (C) Though only announced over Presidents' Day weekend,
the Constitutional Court in July ruled in favor of two
Milorad Bilbija and Dragan Kalinic, two former Republika
Srpska (RS) officials removed from office in 2004 by the
HighRep, who had challenged their removal on human rights
grounds. In brief, the court ruled that the removals

SARAJEVO 00000441 003 OF 003


violated the Bosnian constitution and the European Convention
on Human Rights (ECHR) because the two men lacked the right
to appeal the HighRep's decision (more detail provided
septel). The ruling directly challenges the authority of the
HighRep and undermines Dayton, and OHR is in the process of
developing an options paper of proposed responses by the
HighRep. As with the December 2006 challenge to Dayton by
the Council of Ministers over decertified police officers
(Reftels),we believe the HighRep must deliver a clear,
unambiguous message that Bosnian government institutions will
not be allowed to undermine Dayton or ignore their
international obligations. We should use our bilateral
exchange with Schwarz-Schilling to press him this point.
MCELHANEY