Cablegate: Refugee Return: Key to Osce Mission Closure


R 151057Z MAY 07





E.O. 12958: N/A


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.

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
-- 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.

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