REFUGEE RETURN: KEY TO OSCE MISSION CLOSURE

UNCLAS SECTION 01 OF 03 ZAGREB 000472 SIPDIS SIPDIS E.O. 12958: N/A TAGS: PREL PREF OSCE HR SUBJECT: REFUGEE RETURN: KEY TO OSCE MISSION CLOSURE REF: ZAGREB 00399 ¶1. (SBU) Summary and Comment: Facing intensifying pressure from the international community to make additional tangible progress on refugee issues, the GOC has established and clarified program benchmarks for this year. With OSCE mission closure high on the GOC's priority list, the GOC has put itself on the hook to prove its commitment in the next several months. The benchmarks are ambitious but realistic, and the prospect of OSCE closure will be the best motivation for the GOC to achieve them. Ambassador Bradtke attended OSCE's April 24 meeting with GOC Ministers of Foreign Affairs, Justice, and Sea, Tourism, Transport and Development (responsible for refugee issues). The meeting reconfirmed benchmarks for the GOC that were laid out by Ambassador Bradtke and others earlier at our regular meeting with the GOC on refugee issues. Those targets - particularly on the GOC housing program for former "occupancy and tenancy rights" holders (OTR) - will form the basis for evaluating whether the OSCE mission has completed its mandate in Croatia. (reftel) ¶2. (SBU) OSCE Head of Mission Jorge Fuentes agrees that this year is the key moment both for the international community to press hard on these issues and for the GOC to demonstrate it can achieve technically what it has promised politically. There is clear political will, demonstrated again most recently by Prime Minister Sanader to Under Secretary Burns on May 11 (see septel). As usual on refugee issues, the challenges will be in implementation and program momentum. The housing targets collectively established for 2007 represent a small percentage of total housing applications and are limited to a few other issues discussed below. However, if achieved, they will demonstrate a clear forward momentum on the programs and the will of the GOC both to close the OSCE mission and to make progress on the refugee portfolio. In addition, the international community (including the Embassy and EC delegation) will remain vigilant in monitoring further progress in the years to come. End Summary and Comment. International Community Sets the Bar for 2007 ¶3. (SBU) At our April meeting on refugee issues with Minister for Sea, Tourism, Transport and Development Bozidar Kalmeta, the international community once again laid out clear targets the GOC needs to achieve this year. Ambassador Bradtke 
delivered strong and specific targets to Kalmeta, noting that they were necessary in order for us to support OSCE closure. OSCE, UNHCR, and the EC support the following targets: -- 1. Four hundred apartments outside the Areas of Special State Concern (ASSC) allocated - about 10 per cent of program applications; -- 2. One thousand apartments inside the ASSC allocated - about 30 per cent of remaining program applications; -- 3. Convalidation (pension credit for time worked under rebel Serb administration) solution finalized; -- 4. Residents in Vukovar in OTR apartments possess leases and appropriate paperwork. ¶4. (SBU) Minister Kalmeta agreed that these targets were realistic and achievable by the end of 2007. At the meeting, the international community also raised several other outstanding issues, which are in various stages of being resolved. For example, the GOC recently resolved the most blatant case of unsolicited investment by an occupant of a returnee's property when it offered a contract to the occupant and the owner which took over the court-ordered debt of the owner. The case had attracted international attention, and the GOC still needs to institutionalize this process so that last minute interventions are not necessary. As Fuentes reminded Kalmeta on implementation, "This is the best business investment Croatia can make; and the reality is that we are a barometer, and if we are still here, it sends a signal that there are still problems in Croatia." Housing Program - Benchmarks and Barriers ¶5. (SBU) BENCHMARKS: At the GOC's regular "plenary meeting" on April 24 with the OSCE, it presented its implementation plan for the OTR program, which were earlier agreed to by Kalmeta. In several recent meetings EC Head of Delegation Vincent Degert reaffirmed the EC,s desire for program implementation - he told us he will be looking at the land purchase, tender, and construction processes this year in order to assess progress and GOC will. In addition, after pressure from the international community, the GOC agreed to step up its construction process, completing the construction and allocation of all apartments outside the ASSC by the end of 2009, rather than 2011 as previously reported. According to the GOC, the program will cost an estimated $533 million. ¶6. (SBU) While clarifying these program targets on 4 May with Assistant Minister Milivoj Mikulic, the nuances became clear on how the GOC defines "allocation". For example, the Embassy has suggested that meeting the target would involve apartments handed over to and inhabited by beneficiaries. The GOC has a more flexible definition of allocation, defining it as an apartment that is somewhere in the process of permitting, completion, and allocation. In addition, Mikulic predicted some delays in meeting targets due to technical problems, such as obstacles of local administration, land permitting, and zoning requirements, which all prevent speedier progress for constructing new apartments. However, he remained optimistic and reaffirmed the political will and financial commitment of the GOC to get the job done. ¶7. (SBU) STATUS: To date, outside the ASSC the GOC has purchased 114 apartments and has allocated 41 (e.g. beneficiaries are living in the apartments). The GOC spent $8.6 million on those apartments, and Mikulic told us he plans to purchase another 210 this year. He is in the process of reviewing all 4,425 requests and expects to complete that review by June; however about 1500 reviews have been delayed as the GOC has requested additional information but cannot locate those individuals. Kalmeta told us that tenders were announced for construction of apartments in Karlovac (80) and Osijek (58) and anticipated construction would begin later in the year. The EC delegation's refugee advisor Alfons Peeters was skeptical that construction would actually take place before the end of 2008, based on the labyrinth of local and state requirements for construction and the generally sluggish pace of approval for construction in Croatia. ¶8. (SBU) Inside the ASSC, about 800 out of 8000 total applications have been resolved (e.g. beneficiaries living in apartments). In addition, there are more than 3000 beneficiaries who have received positive approval and are awaiting housing. (Note: these beneficiaries refer to both ethnic Croats and ethnic Serbs who have returned. The ethnic breakdown is unknown. Some in the international community have criticized the process for favoring primarily ethnic Croats, although Mikulic tells us that he will institute a procedure that processes applications by date received, rather than by ethnicity. End Note.) A critical impediment to program implementation remains the convoluted land ownership and registry problems remaining from the Yugoslav era. Without clear land title, the GOC construction and allocation process will stagnate. ¶9. (SBU) ISSUES: Meeting with Mikulic on May 4, Poloff and PRM's Belgrade-based regional refugee coordinator heard again that the GOC is willing to consider opening its deadline for the housing program outside the ASSC. Mikulic said he is ready to compromise with his Serbian counterparts, but will not discuss compensation for those who do not wish to return. He emphasized that the GOC priority is to find a humanitarian solution for those who do wish to return. The international community in Zagreb is realistic in its expectations from the GOC. Politically and financially, compensation for those who will not return is not possible from the GOC, according to Christian Loda, head of Return and Reintegration unit at the OSCE Mission. Another outstanding issue remains the lack of an appeal commission for the OTR program outside the ASSC, which the GOC should have established at its onset. A functioning appeals commission is an important component of the program, UNHCR Head of Mission Wilfried Buchhorn reaffirmed to us, as application rejections remain a concern. Uncertain Future for the Sarajevo process ¶10. (SBU) OSCE HOM Fuentes told PolOff recently that he believes the Sarajevo Process is largely finished, or at least progressing toward a satisfactory political conclusion. Outstanding issues in the Sarajevo Process include residency and citizenship issues, unsolicited investment in refugee properties, the state prosecutor's war crimes indictees list, and convalidation of working years for those in the former Krajina region. In an early April meeting with PM Sanader, Fuentes received assurances again that the convalidation issue would be resolved soon. This resolution would most likely be re-opening the 1999 application deadline to apply for recognition of related documents. Ambassador Bradtke advocated for speedy resolution at our meeting with Kalmeta. As to the other outstanding issues, Fuentes noted that the GOC is working on them to various degrees. Fuentes and other members of the international community in Zagreb agree that completing the Sarajevo Process (through a yet-to-be-scheduled ministerial meeting) will not mean an end to international attention to these issues. The issue of compensation for OTR holders who do not wish to return is a bilateral topic between GOC and Bosnia and Serbia, Fuentes stated, noting that it was still controversial within OSCE. BRADTKE