The Impact of Return
on Compensation for Palestinian Refugees
Compensation as Part of a Comprehensive Solution
to the Palestinian Refugee Problem Working paper
prepared by BADIL Resource Center for
Palestinian Residency & Refugee Rights
for the Workshop on the Issue of Compensation for
Palestinian Refugees
14-15 July 1999
Ottawa, Canada
Introduction
In the closing decades of the 20th century, the massive
displacement of ethnic, religious, and national groups
has brought about a fundamental shift in international
efforts to respond to refugee needs and demands. While
asylum and non-refoulement continue to be regarded
as basic refugee rights, increasingly, international
efforts have focused on a "pro-active, homeland-oriented
and 'holistic' approach". The 1998 report of
the UNHCR notes that since 1987 almost every major
peace agreement concluded around the world has included
provisions related to the return of displaced populations.
The UNHCR also noted growing recognition of the need
to secure title for refugee property and land. In
some instances, this movement in favor of refugee
return has forced the international community to grapple
with traditional notions of sovereignty. Moreover,
in areas where the generation of refugees has been
rooted in conflicts of a regional nature, there has
been an emphasis on initiatives that promote regional
frameworks to secure the rights of refugees as a primary
component for stability, reconciliation, and development.
These developments have interesting and perhaps significant
implications as regards resolution of the Palestinian
refugee issue, in general, and the issue of compensation,
in particular. While recognizing the unique characteristics
of individual refugee populations, it must be acknowledged
that the developments of the last decade represent
a growing body of experience of refugee return and
compensation, largely untapped, from which to draw
on in delineating any framework for a resolution of
the Palestinian refugee issue. More specifically,
recent research has demonstrated that, while significant
political barriers stand in the way of Palestinian
refugee return, Palestinian refugee land inside Israel
remains largely unsettled. The potential space for
Palestinian return is further evidenced by recent
Israeli data, which disputes the notion that Israel
is rapidly running out of space for development. This
combination of factors (that refugees have the right
to return, the right to their properties, that return
is elemental to regional stability, reconciliation
and development, and that the obstacle to return for
Palestinians is not practical but political/ideological
- i.e. that Israelis would not be displaced by the
return of refugees) begs further research based on
the assumption of the return of Palestinian refugees
to their homelands.
This working paper seeks to explore the issue of
compensation within the context of refugee return,
based on the shift in international policy and practice
as summarized above. The first part of the paper provides
a brief overview of the relationship between return
and compensation as employed throughout the paper.
The remainder of the paper focuses on the impact of
refugee return as regards compensation. Three specific
areas are examined: types of expenditures, distributive
issues, and sums to be allocated. The paper concludes
with some remarks about the impact of a regional framework
for compensation and return.
Return and Compensation:
A Framework
What are the parameters of compensation within the
context of Palestinian refugee return? UN General
Assembly Resolution 194 details two components of
compensation for Palestinian refugees. The Resolution
states, inter alia, that "compensation should
be paid for the property of those choosing not to
return and for loss of or damage to property which,
under principles of international law or in equity,
should be made good by the Governments or authorities
responsible." These principles have been affirmed
by agreements facilitating compensation for refugees
- including internal refugees - in several regions
this past decade. More recently UNGAR 51/129 notes,
inter alia, that "Palestine refugees are entitled
to their property and to the income derived therefrom,
in conformity with the principles of justice and equity."
Precedents also exist regarding compensation for human
capital losses and for psychological damage and pain.
Thus, what we are looking at is essentially at least
four types of compensation: (1) compensation for those
choosing not to return; (2) compensation to returnees
for loss of property or material damages to property;
(3) compensation in terms of income derived from the
use of refugee property, and; (4) compensation for
non-material damages. The scope of each type of compensation
will likely be determined by several factors in addition
to identification, evaluation criteria, and the extent
of available financial resources. These other factors
include the number of refugees wishing to return,
refugee lobbying/mobilization, the level of international
investment in reconstruction, and the nature of Israeli-Palestinian
relations engendered by, and as a result of, the process
of return. Given the variability of these factors,
the paper avoids detailed calculations of refugee
compensation, although some general examples are utilized
throughout the paper. The paper assumes that a majority
of refugees, particularly those living in camps, will
choose to return to their homelands.
Types of Expenditures
to be Financed
Based on the assumption that a large number of Palestinian
refugees will choose to return, particularly those
living in camps, compensation will be required primarily
for types (2), (3), and (4). Assessment of compensation
for losses or damages to property (2) may appear difficult
at first glance, given the length of time - more than
five decades - since refugees were expelled or fled.
However, as noted above, this issue has not proved
to be insurmountable in other cases this decade. As
regards Palestine and Israel, moreover, there is substantial
documentation. Compilation of these documents, using
integrated databases and GIS technology should provide
considerable evidence to facilitate identification
and evaluation of properties. In assessing compensation
it may also be helpful to consider ownership in terms
of "identity in land" where traditional
ownership at the time of dispossession, as with many
indigenous groups, did not correlate well with western
models of land registration. Additional information,
criteria and procedures will be required to evaluate
revenues for the use of refugee property, though records
of relevant Israel government institutions should
provide valuable data. The determination of values
for human capital losses and psychological damages
also require additional criteria. Concerning compensation
(1) for those Palestinians not wishing to return,
numerous studies, including the individual identification
and evaluation work of the UN Conciliation Commission
for Palestine, provide a starting point for assessment
of compensation. Based on Kubursi's estimate for individual
property losses upgraded to 1998 US$, the average
compensation per family (based on a six person family)
would be $420,000.
Given the existence of favorable reintegration and
peacebuilding efforts, refugees may find it acceptable
to combine individual compensation for types (2),
(3), and (4) (or part of it) with costs for reconstruction
of the physical and social infrastructure on their
lands. Hence a type of compensation in-kind. Such
consent, however, would probably be dependent on the
composition of the authority/regime responsible for
reconstruction. Abed, for example, divides reconstruction
costs into 15 types falling under two categories -
physical infrastructure and social infrastructure.
If all refugees would return and homes were constructed
according to 1990 figures, the total cost would be
approximately $14 billion, considerably less than
the $132 billion dollars in compensation for individual
and public property calculated by Kubursi for 1994
even with the addition of cost increases between 1990
and 1994. Presumably, the cost would decrease somewhat
based on the construction of multiple versus single
family dwellings. The cost of social infrastructure,
according to the same per capita investment calculated
by Abed, for a full return of refugees would be along
the lines of 3.7 billion dollars for hospitals and
other health facilities and 1.9 billion dollars for
educational facilities. Of course, the exact amount
of these expenditures would be determined as well
by the existing infrastructure on their lands. Based
on existing UNRWA services (which admittedly require
upgrading) in Lebanon, the return of registered refugees
according to the District of Family Origin would require
reconstruction investment for at least 18 primary
health facilities and 55 schools in the Galilee. Additional
investment would also be required for such things
as employment and institutional capacity building.
Research areas:
- methods of property identification and evaluation
- methods for determining non-material losses
- impact of regional reconstruction programs on
refugee compensation, including infrastructure assessment
profiles for refugee return, according to population
and area, and job creation and institution building
profiles
Distributive Issues
Two main issues concerning distribution of compensation
for refugees involve procedure and the notion of equity.
Procedure includes three components: collection and
compilation of documents; receiving and adjudicating
claims; and, payment of compensation. These tasks
may be carried out by one body, or by a combination
of bodies. In Bosnia, for example, claims are handled
by a Commission for Real Property Claims set up under
the Dayton Peace Accords. Claims can also be filed
with the Ombudsman of the state. In South Africa,
claims can be mediated by a Land Claims Commission
or settled by a Land Claims Court. Separate commissions
may prove necessary to document and prepare claims
such as the World Jewish Restitution Organization
(WJRO), while still other commissions may be responsible
for dispensing payments. All three components may
be combined into one international commission such
as the Tribunal established to deal with claims against
Iraq from the 1991 Gulf War. In some cases, like South
Africa, international support has been provided to
Non-Governmental Organizations (NGOs) to assist displaced
populations in advancing their land claims. For returning
refugees who find it acceptable to have a portion
of their compensation converted for reconstruction
of the physical and social infrastructure on their
lands, funds would be administered by a reconstruction
regime.
Equity relates to the distribution of compensation
per sector of the refugee community. One concern raised
in relation to individual compensation is that it
harbors the potential to harden and/or exacerbate
economic cleavages, widening the gap between the poor
and the rich. While more research is necessary to
substantiate this claim, equity can be addressed through
the institution of land reform, including the repealing
of laws that discriminate against returnees. Such
reforms have taken place, for example, in South Africa
where land reform, through restitution, tenure reform,
and redistribution, is designed to contribute to reconciliation,
growth and development by addressing ownership and
development patterns, which were reflective of the
political and economic conditions under apartheid.
Tenure reform may be one effective way to deal with
potential equity problems given the absence of strong
tenants rights legislation in pre-1948 Palestine,
which contributed to peasant land alienation and inequitable
land distribution. The issue of equity would also
be impacted by the type and level of skills which
refugees bring to the areas to which they return combined
with potential reconstruction investment in these
areas. According to the 1997 FAFO report on Palestinian
refugees in Jordan, the majority of refugees and displaced
persons residing in camps dominate trade, commercial
services and manufacturing. Equity would be seemingly
be increased, for example, with high levels of employment
and opportunities for occupational advancement in
the areas to which these refugees would return, primarily
the Jerusalem and Lydda districts.
Research areas:
- compensation commissions, types and modalities
of operation
- labour force and skills profiles for returning
refugees per region
- resource assessment profiles of areas to which
refugees would return
- land reform and refugee return
Sums to be Allocated
As noted, it is difficult the estimate to size of
any compensation package for Palestinian refugees
without data on the number of Palestinians choosing
to return, those choosing not to return, those choosing
to return but not to their property, and those choosing
not to return but wishing to have their property returned.
Estimates for individual compensation, however, indicate
the shear enormity of Palestinian refugee losses with
some estimates reaching 500 billion dollars. Obviously
there are questions about the ability, financially
and politically, of the international community to
martial such financial resources. Assuming that a
substantial number of refugees will either chose to
return to their homelands or have their homelands
returned to them, particularly those living in more
extreme conditions such as Lebanon and Gaza, individual
compensation becomes a much more feasible option with
significantly lower costs. For those not wishing to
return, compensation for material losses may also
be foregone by a return of property. Such was the
framework put forward by the World Jewish Restitution
Organization (WJRO), for example, when East European
countries claimed that sums for individual compensation
would exceed their ability to pay. Likewise, in-kind
compensation for those whose property may not be able
to returned (i.e. property used for roads, other public
infrastructure, etc,) would reduce the overall value
of monetary compensation.
Another area, which inflates the overall level of
compensation to Palestinian refugees, is the inclusion
of non-material damages, i.e. human capital losses
and psychological damages. According to Kubursi, for
example, the addition of human capital losses to material
losses would increase the overall sum by over 50%
while the addition of damages for injury and psychological
damage would increase the original sum by nearly 100%.
Although there are precedents for such compensation,
it is not a standard component in agreements reached
during the past decade to facilitate the return of
refugees. Refugees may choose to forego this kind
of compensation given a positive post-conflict atmosphere
and sufficient reconstruction efforts. Compensation
for psychological damage and pain may also be substituted
by in-kind compensation, such as truth commissions,
which addresses the social or psychological aspect
of refugee integration.
The level of compensation may also be significantly
reduced if types (2) through (4) are substituted in
large part by post-conflict reconstruction efforts
already highlighted above. Using an average investment
figure per refugee based on Abed's 1990 estimate for
resettlement of 1.2 million Palestinians to the West
Bank and Gaza, the total figure for a return of all
refugees in 1990 would result in a sum of $41 billion,
substantially less than Kubursi's estimate for individual
property compensation and six times less than the
overall compensation figure including human capital
losses, injuries and psychological damages. While
this figure still appears substantially large, investments
over a 5-10 year period would bring the sum within
the range of the international community for regional
reconstruction efforts. The significant experience
gathered over the past five years of international
assistance to the Palestinian Territories, moreover,
should provide valuable lessons regarding the delivery
and efficient use of financial resources. In addition
there is a potential knock-on effect with new construction,
consumer spending etc. The maintenance of UNRWA funding,
moreover, over the 5-10 year period, would further
reduce the size of new financial outlays and provide
valuable technical assistance regarding the reconstruction
of the social infrastructure for returning refugees.
Based on the 1999 General Fund Budget of UNRWA for
education and health the total investment over a ten
year period would be, respectively, 1.6 billion dollars
and 640 million dollars or with a 5% increase per
annum (the estimated donor increase necessary to maintain
services) the total calculated investment would reach
2 billion dollars for education and 800 million dollars
for health.
Research areas:
* international aid envelopes and funding of refugee
compensation
* post-conflict reconstruction budgets as compared
to individual compensation
* impact of truth commissions as compared to compensation
for psychological damages
Conclusion
There should be no doubt that the return of Palestinian
refugees will be a complex and difficult process.
As the UNHCR notes, return marks only the beginning
of a tough relocation process with potential problems
concerning physical security, social and psychological
security, legal security, and material security. At
the same time, however, the return of Palestinian
refugees would appear to have a positive impact on
the issue of compensation in addition to regional
stability, reconciliation, and development. As the
World Bank has noted: "as long as significant
portions of a society's population are displaced,
the conflict has not ended. There can be no hope of
normalcy until the majority of those displaced are
able to reintegrate themselves into their societies."
As regards compensation, the return of Palestinian
refugees would appear to cost significantly less than
individual compensation, although the short-term outlays
seem rather steep. A regional framework, moreover,
holds the possibility of dealing with broader issues
related to citizenship and land ownership based on
the idea of inclusivity rather than narrow ethnic,
religious, or national parameters. A regional initiative
holds the benefit of addressing issues related to
citizenship and property of Jews with origins in the
Arab states of the region according to the same principles.
The regional approach also creates a natural framework
for compensation of host countries. This kind of compensation
is much more feasible in the context of regional reconstruction,
through debt relief and regional infrastructure investment.
At this level, the focus groups of the multilaterals
on refugees appear to interface easily with a larger
regional initiative.
While there are problems in implementation, regional
agreements adopted in the last decade could provide
important and useful keys to a resolution of the Palestinian
issue. The International Conference on Central American
Refugees (CIREFCA), for example, recognized that there
could be no lasting peace without a resolution to
the problem of refugees, returnees and displaced persons.
CIREFCA provided for an integrated approach to repatriation
of refugees to Nicaragua, El Salvador, and Guatemala.
The Bishkek Agreement of 1992 established a framework
for addressing the political, economic, and social
rights of displaced persons in the Commonwealth of
Independent States. The outlines of a future reconstruction
plan for the Balkans that addresses issues of return,
property, and compensation remains to be defined.
Whether or not return, at this stage, is seen to be
politically possible or palatable, however, should
not inhibit research based on the return of Palestinian
refugees. Indeed, if refugees are to have choices,
the full range of choices must be supported by solid
research.
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