VZCZCXRO0392
RR RUEHPOD
DE RUEHVB #0707/01 2811451
ZNR UUUUU ZZH
R 071451Z OCT 08
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC 8680
INFO RUEHVEN/USMISSION USOSCE 1085
RUEHNO/USMISSION USNATO 3474
RUEHBW/AMEMBASSY BELGRADE 0027
RUEHLJ/AMEMBASSY LJUBLJANA 6432
RUEHPOD/AMEMBASSY PODGORICA
RUEHPS/AMEMBASSY PRISTINA 0600
RUEHVJ/AMEMBASSY SARAJEVO 0306
RUEHTI/AMEMBASSY TIRANA 0844

UNCLAS SECTION 01 OF 03 ZAGREB 000707 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR PRM, EUR/SCE AND EUR/PRM, BELGRADE FOR REFCOORD COHEN 
 
E.O. 12958: N/A 
TAGS: PGOV PREF PREL EUC REFUGEES HR CROATIA
SUBJECT: REFUGEE RETURNS: MISSED BENCHMARKS BUT CONTINUED 
COMMITMENT 
 
REF: A. ZAGREB 468 
     ¶B. ZAGREB 357 
 
¶1. (U) SUMMARY: In a September 17 meeting with ambassadorial-level 
representatives of the international community (IC), the Minister of 
Regional Development, Forestry and Water Management, Petar 
Cobankovic, renewed the GOC's commitment to complete the process of 
resettling former occupancy/tenancy right holders(OTRs- Serb 
refugees who had been tenants in state owned properties before the 
war). Cobankovic presented the GOC's 2009 benchmark of 2462 housing 
units, which will bring the process or resettlement close to 
completion. He acknowledged, however, that the GOC, in consultation 
with a small number of affected returnees, would meet the 2007 
benchmark target only in the Spring of 2009. Similarly, because of 
slow construction during the winter season, a small number of the 
housing units targeted for 2008 would slip into 2009. The presence 
of high-level officials from the Ministry of Foreign Affairs and 
Croatia's EU accession negotiation team at the meeting underlined 
the strong link between Croatia's performance on returns and its 
progress toward the EU.  Other topics of discussion included the 
shape of the government's new appeals body for rejected 
applications, regional discrepancies in application decisions, and 
progress made towards convalidation of working time during the war. 
END SUMMARY. 
 
-------------------- 
2007 Benchmark: Delayed Completion Threatens Chapter 23 Negotiations 
 
-------------------- 
 
¶2. (U) In the meeting between ambassadorial-level representatives of 
the European Commission, UNHCR, U.S. Embassy, the Zagreb based 
office of the OSCE, and senior level GOC officials, Minister 
Cobankovic acknowledged that delivery of the 1400 housing units 
allocated to OTRs as part of the GOC's 2007 benchmark would likely 
not be complete until May, 2009.  The approach of winter, and other 
factors, meant that needed construction activities in two apartment 
blocks in rural areas would be hard to complete before then. 
Completion of this benchmark is one of the prerequisites for opening 
Chapter 23 EU accession negotiations (Judiciary and Human Rights). 
The GOC says it will have the majority of outstanding units ready by 
the end of 2008, but estimates that it will fall short of the total 
by 10 housing units. Cobankovic maintained that the affected 
families preferred to accept late delivery, rather then be moved 
over the winter. In the meantime, GOC agreed to pay the rent of an 
estimated 51 families until their housing units are delivered.  The 
senior members of the IC welcomed this interim measure but stressed 
that this measure is only palliative and rent payments could not be 
considered a permanent solution.  The IC stressed that any delays in 
delivering the units beyond May 2009 would be unacceptable. (NOTE: 
The GOC keeps separate lists of beneficiaries for the 2007 and 2008 
benchmarks. The process of fulfilling these benchmarks is done in 
parallel and not on a 'first come, first served' basis. This creates 
a dichotomy wherein the GOC has allocated approximately 600 
apartments for its 2008 benchmark even though it has not yet 
completed its 2007 target.  Were the 2008 benchmark apartments to be 
counted towards the 2007 benchmark, the 2007 benchmark would have 
been met some time ago. END NOTE). 
 
¶3. (SBU) Croatia's chief negotiator for EU Accession, Ambassador 
Vladimir Drobnjak, asked the IC representatives, in particular EC 
Delegation Head Degert, whether EU would consider the current status 
adequate to verify that Croatia had met the required "opening 
benchmark" for the purposes of beginning Chapter 23 negotiations 
with the EU.  Degert said he could not answer the question, as that 
decision has to be made by member state representatives in the EU 
Council.  Failure to make further progress would potentially delay 
any such decision.  Drobnjak said that if the EU did not consider 
the opening benchmark met then the GOC would continue construction, 
and move the affected families, despite poor conditions, in order to 
meet the benchmark. (NOTE: At a private lunch last week, the head of 
UNHCR Croatia, Wilfried Buchhorn, told POLCOUNS that has UNHCR 
recommended to the EC that the 2007 benchmark be considered met, 
given the number of 2008 allocations already made.  END NOTE). 
 
¶4. (U) The GoC also noted that 68 families who have been allocated 
some of the 400 units within Areas of Special State Concern 
(essentially, the territory held by rebel Serbs during the war) have 
yet to retrieve the keys for their units.  The GOC agreed to work 
with OSCE and UNHCR to try and locate these families within a month 
and determine whether the families still intend to move into their 
 
ZAGREB 00000707  002 OF 003 
 
 
units. Units that are no longer desired will be reallocated to other 
families awaiting housing. 
 
-------------------- 
2008 Benchmark:  Progress But No Completion Until 2009 
-------------------- 
 
¶5. (U) In parallel with the 2007 benchmark process, the GOC said it 
has also allocated approximately 40 percent of the 1400 housing 
units promised as part of its 2008 benchmark.  GOC acknowledged that 
it would not complete all 1400 units in this benchmark by the end of 
2008, but foresees completion no later then June 2009.  Members of 
the IC expressed special concern for the lack of progress in the 
areas outside the ASSC. Cobankovic stated that progress was slow due 
in large part to the high price of real estate in coastal and urban 
areas, such as Dubrovnik or Split. The government's current price 
cap per square meter for apartment space is far below the market 
prices for real estate in costal areas. (NOTE: Interestingly, the 
same problem does not exist in Zagreb, where the government reports 
it has a more than sufficient number of units available. END NOTE). 
The government is seeking to amend the ordinance regulating real 
estate transactions to increase the amount they are able to pay. 
The state secretary for the Ministry of Physical Planning, Zoning 
and Construction, Alexsandar Russo, stated that they would soon open 
tender for properties to purchase in these areas.  Should no offers 
be received, the government will consider buying land and building 
apartments itself. 
 
-------------------- 
Appeals: The New Appellate System, and Regional Bias in the Initial 
Decisions 
-------------------- 
 
¶6. (U) The government has recently sent 1400 negative decisions to 
housing care applicants.  Recipients have 15 days to appeal this 
decision, and as of mid-September approximately 80 appeals have been 
received.  The government's new appellate body (REF A) has not yet 
begun to review these cases.  The State Secretary for Regional 
Development, Forest and Water Management, Milivoj Mikulic, explained 
that the new body would consist of two lawyers and another worker 
from the Department for the Areas of Special State Concern. The 
director of this office would verify the decision of these three. 
If the original refusal is confirmed, further appeal is possible 
through the use of the court system.  The GOC hopes to complete all 
administrative appeals by the end of October in order to include any 
overturned refusals in the 2009 benchmark.  The IC encouraged the 
progress the GOC has made in administratively resolving applications 
and called for a transparent and fair appeals process. 
 
¶7. (U) In previous meetings (REF B) the GOC agreed to partake in a 
joint review with UNHCR of all negative decision cases made outside 
the ASSC, before these rejections were sent to the applicants. 
UNHCR reviewed roughly 500 of these 850 cases and of these, 40 
percent were sent back by UNHCR for further review to the original 
decision making bodies. UNHCR noted that there was a lack of 
consistency in the decisions of regional offices and the bulk of the 
40 percent were concentrated in a few jurisdictions.  The GoC's 
Zagreb office was particularly problematic, and many negative 
decisions appeared to be unfounded.  The GOC acknowledged that the 
majority of negative decisions in Zagreb can be attributed to one 
official, but due to local labor law their options to resolve this 
problem are limited.  As a temporary solution, other regional 
offices have begun to review Zagreb's decisions.  The IC reps 
pointed out that this problem further delays the government's 
progress towards its 2008 benchmark and encouraged the government to 
review the situation and find a permanent solution. 
 
-------------------- 
2009 Benchmark:  Unrealistic Goals? 
-------------------- 
 
¶8. (U) Minister Cobankovic also presented a revised benchmark goal 
of 2462 housing units to be allocated in 2009.  This number took 
into consideration an estimation of positive decisions to be made in 
cases not yet administered and in cases currently awaiting appeal, 
and would effectively bring the process of resettlement of OTRs to a 
close.  Cobankovic estimated that this goal could be met by the 
spring of 2010.  Though this target has been reduced from previous 
estimates, the IC still expressed concern that this goal might be 
unrealistic given the government's inability to reach even the lower 
targets from 2007 or 2008. The IC stressed that further slippage in 
 
ZAGREB 00000707  003 OF 003 
 
 
meeting declared targets only damaged Croatia's credibility, 
especially as regards Croatia's EU accession negotiations, and urged 
the GOC to make realistic estimates. 
 
¶9. (U) Cobankovic replied that he understood why there were low 
expectations, but insisted that progress on the 2009 benchmark would 
be faster then previous years.  Changes in the government and new 
laws affecting refugee returns slowed progress during 2008, but with 
the adjustment phase past, Cobankovic appeared optimistic. 
Cobankovic did agree to review the benchmark and called for a 
meeting at the beginning of October with the IC to review the 
government's 2009 construction plan. 
 
-------------------- 
Convalidation 
-------------------- 
 
¶10. (U) In May 2008 the GOC implemented a new ordinance allowing for 
the convalidation of pensions and the crediting of service in the 
former Serb Occupied areas to pensioners. The GOC presented the 
first statistics regarding the implementation of said ordinance at 
the meeting.  To date they have received 3223 applications for 
convalidation of working years. 82 of these cases have been 
resolved. 37 of the 82 cases received positive decisions and 45 
received negative decisions.  In regard to pensions the government 
has received 173 requests and has resolved 129 of these cases.  All 
129 received positive decisions. The IC encouraged the progress the 
GOC has made in this regard and asked to receive regular statistical 
reports regarding this issue. 
 
-------- 
COMMENT 
-------- 
 
¶11. (SBU) The bureaucracy of this entire process threatens to 
obscure the real picture.  While a number of cases (in the low three 
digits) remain from the 1400 units allocated under the 2007, the GoC 
at the same time has resolved more than that number from its 2008 
caseload.  The EU's decision, expected prior to the issuance of the 
annual Progress Report due in early November, will therefore be a 
political one as to whether the GoC has demonstrated adequate 
performance on returns.  The commitment on the government's part to 
pay rent for 2007 benchmark applicants who do not yet have their 
homes, and the presence of senior MFA officials at working level and 
principal level meetings indicate that the GOC understands the 
importance and urgency of resolving this issue in as timely a manner 
as possible.  In our view, the government is committed to resolving 
this issue, albeit not as quickly as their overly ambitious declared 
targets claim.  As Croatia moves further into EU accession 
negotiations the pace for resolving refugee return issues will 
likely quicken, but it appears this is an issue Croatia will 
continue to be working on into 2010 and probably beyond.  END 
COMMENT 
 
BRADTKE