Cablegate: Goc Solves Returnee Housing Disputes

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UNCLAS ZAGREB 01513

SIPDIS
R 271234Z DEC 06

FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC 7083
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS ZAGREB 001513

SIPDIS

DEPT FOR PRM ROLSON
DEPT FOR EUR/SCE RBALIAN
BELGRADE FOR OLSON

SENSITIVE

E.O. 12958: N/A
TAGS: PREF PGOV HR
SUBJECT: GOC SOLVES RETURNEE HOUSING DISPUTES

Sensitive But Unclassified. Please Handle Accordingly.

1. (SBU) Summary and Comment. A December 7 Government meeting
approved a resolution "process" for temporary occupants of refugee
homes who made unsolicited investments to the properties and are
seeking compensation from the refugee owners. Along with the OSCE,
UNHCR, and EU, Post has pressed the GOC for a workable resolution
for over a year in its monthly meetings on refugee issues; the OSCE
helped draft the decision, which includes an out-of-court settlement
process. This is a positive indication of the GOC's desire to make
progress on the refugee portfolio. The achievement follows the
GOC's appointment of new Assistant Minister for Refugee and Returnee
Issues Milivoj Mikulic, who so far is activist and collaborative
both within the GOC and with the international community (IC).
Mikulic, an engineer by background, has been charged with turning
the lethargic returnee housing plan into concrete reality. One
month into the job, his leadership has already changed the tenor of
the GOC-IC relationship and shown results. End Summary and
Comment.

2. (U) The resolution commits the GOC to compensate temporary users
for investments they made to refugee homes while they occupied those
properties. While there are presently a small number of applicable
cases (currently 24 in the court system), the problem drew the
attention and ire of the international community because of several
egregious cases. In one such case, the GOC allowed a temporary
(Croatian) occupant to take over a home belonging to an ethnic Serb
in Korenica in 1996; the temporary occupant turned it into a
successful pizzeria and operated it until 2005. After an eight-year
judicial process, the refugee won the right to repossess his home.
However, the temporary occupant sued the owner for the 30,000 euros
she invested in the property, and the court ordered the payment.
Since the owner could not pay the amount, the house was scheduled
for auction. As of December, the auction has been postponed due to
political and international pressure. At least two such auctions
were scheduled in other cases. In some of the 24 cases, investments
were made to convert homes into businesses, in others they were made
in order to make the home habitable after war devastation. In all
cases, however, the investments were made without the owners'
consent.

3. (U) According to the plan, the GOC will sign an out-of-court
settlement with the user and the owner for expenses incurred in
order to make the home habitable (Note: not for all investments to
the property). By signing the settlement the user renounces any
further claims for reimbursement. If a user refuses the settlement,
the GOC will take over the claims process, releasing the owner from
further involvement. The case would proceed through the courts, and
the State Prosecutor would request GOC compensation as determined
through a final court verdict. While not specifically addressed in
the GOC decision, we expect that the GOC will actively approach the
remaining claimants and offer a financial settlement even before a
final court decision. The GOC may incur significant costs, although
the full extent is undetermined.

4. (SBU) In its monthly meetings at both the working and ministerial
level, Post, OSCE, UNHCR and the EU have pressed for a resolution to
the problem for over a year. Together in late 2005, the four members
of the IC put forward a proposal which was tabled within the
Ministry of Sea, Trade, Transport and Development and thwarted by
state prosecutors who believed that owners would unduly benefit.
Recently, however, aggressive lobbying by the IC reaped results with
its approval earlier this month. The approval coincided - we
believe not coincidentally - with the appointment of Mikulic, who
pushed hard to ensure that the Council signed off on the decision.
Tapped by PM Sanader, Mikulic told us he has been tasked with
achieving results on the refugee portfolio, most specifically on the
housing program for former tenancy rights holders. A civil engineer
by profession, he previously worked for U.S. firm Bechtel and
appears to be practical and goal-oriented. In our December working
group meeting, he told us that the GOC will increase the pace of
apartment allocation in 2007 (to be reported septel).

BRADTKE

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