The Right to Compensation in
International Law and the Displaced Palestinians
By Michael Lynk
January 2001
I. Introduction
Reaching a final, durable and equitable
resolution of the Middle East conflict
requires the comprehensive settlement
of the Palestinian refugee issue.
In its cornerstone pronouncement
on the conflict, the United Nations
Security Council has called for the
just settlement of the refugee problem.
Israel and the Palestine Liberation
Organization acknowledged, in their
1993 Declaration of Principles, that
the refugee issue is one of the most
intractable problems at the heart
of their aspirations for peace, and
postponed its resolution until the
future initiation of final status
negotiations. Israel has agreed,
in its 1994 peace treaty with Jordan,
that the persistence of the refugee
issue over the past five decades
has caused massive human problems
in the region, and the settlement
of the issue is to be in accordance
with international law. Beyond this,
there has been little substantive
progress by the parties towards a
comprehensive settlement of the fate
of the Palestinian refugees, and
little consensus between them as
to the requirements of international
law. At the centre of the issue is
the national and individual status
of the majority of the estimated
seven million Palestinians in the
world today: the 3.6 million who
were displaced, personally or by
family lineage, from their homes,
properties and lands by the 1947-49
and 1967 Middle East wars. The irresolution
of their fate perpetuates the largest,
longest-running and most destabilizing
refugee problem in the world today.
Contemporary legal, political and
diplomatic analysis of the Palestinian
refugee issue has focused on three
principal components: repatriation,
resettlement, and compensation. In
current settlement proposals, these
three components are intimately inter-linked,
but they are each capable and deserving
of stand-alone analysis. Repatriation focuses
on the generally-accepted right in
international law of refugees to
choose whether to return to their
homeland and their homes following
the cessation of conflict or persecution.
Palestinians claim their capacity
to exercise this right to return
to Israel as well as to a future
state of Palestine, while Israel
has argued that any more than a very
modest number of refugees returning
to their ancestral homes within its
borders would threaten its existential
character as a Jewish state. Resettlement is
the preferred Israeli solution, which
would see all, or almost all, of
the estimated 3.6 million registered
Palestinians refugees required to
accept either permanent civil status
of some form in their present homes
in Syria, Lebanon and Jordan, or
re-location elsewhere. Palestinians
resist this option, arguing that
it would abolish their legal right
to return and negate their decades
of suffering in exile.
The third issue, c ompensation ,
focuses on the individual and collective
claims of the Palestinian refugees
and the displaced for the restitution
of, and/or indemnification for, their
lost homes and properties in present-day
Israel, as well as monetary damages
for related losses. Both sides agree
that compensation should be part
of a final peace agreement, but for
quite different reasons which lead
to quite different results. Israel
prefers a global collective fund
that would be primarily used for
refugee resettlement elsewhere and
financed largely by international
donors. Its contributions would be
made ex-gratis , without
assuming any liability. On the other
hand, the Palestinians advance the
compensation issue as a right recognized
in international law that would obligate
Israel to return, or pay for, the
refugee properties expropriated or
destroyed in 1948 and afterwards.
As well, they argue that Israel must
pay damages for pain and suffering,
and for its use of Palestinian properties
over the past five decades.
These differences on compensation
are significant. The gap between
the parties goes to a number of issues,
including: (i) the legal basis for
compensation; (ii) the number of
potential claimants; (iii) the range
of compensation categories; (iv)
methods of calculation; (v) whether
restitution forms part of the compensation
issue; (vi) whether the compensation
should be awarded collectively or
individually; and (vii) the status
of related issues, such as the compensation
claims of (a) the Arab countries
that have hosted the Palestinian
refugees for five decades, and (b)
the Arab Jews who left behind property
in their home countries such as Iraq
and Egypt in the 1950s. The differences
on compensation have never been publicly
expressed in dollar figures by Israel
or the Palestine Liberation Organization,
but recent assessments by scholars
and researchers range from $5-10
billion (US) by Shlomo Gazit, to
$15-20 billion in a Harvard refugee
project led by Joseph Alpher and
Khalil Shikaki, to $271 billion by
Atif Kubursi.
This article focuses on the issue
of compensation, which for these
purposes includes restitution. Whether
the Palestinian refugee issue is
eventually resolved through repatriation
or resettlement, or some combination
of both, compensation will inevitably
be a significant feature of the final
agreement. However, if this final
agreement is to be durable, it must
reflect the fair aspirations of both
parties. As such, it will have to
be anchored in the principles of
international law, and not simply
reflect the starkly unequal bargaining
strengths between Israel and the
Palestinians. Indeed, if compensation
and restitution are to play a forward-looking
role towards healing the transparent
wounds of the decades-long conflict,
and building the foundation for a
prosperous and secure future in the
region, then the available rules
found in international law are both
the principled and the most constructive
road to follow.
II. The Dimensions of the Issue
(A) An
Historical Précis
to 1948
On 29 November 1947, with the British
Mandate in Palestine collapsing,
the United Nations General Assembly
passed Resolution 181(II). It recommended
the termination of the Mandate, the
partition of Palestine into independent
Arab and Jewish states, and a special
international status for Jerusalem.
Following months of civil violence,
the State of Israel declared its
independence on 14 May 1948, and
a larger war involving the neighbouring
Arab countries ensued. This larger
war alternated between periods of
intense conflict and unstable truces
until the signing of the Rhodes armistice
agreements in 1949. At the conclusion
of the war, Israel was victorious
and its land size had expanded from
the 54% of Mandate Palestine allocated
to the Jewish state by UNGA resolution
181(II) to 78% of the territory.
Between December 1947 and September
1949, approximately 720,000 Palestinians - more
than half of the Arab population
of Palestine - were driven from,
or fled, their homes in that part
of Palestine that became Israel.
They sought refuge primarily in the
neighbouring Arab countries, including
the West Bank of the Jordan River
(occupied by Jordan after 1949),
Jordan, Syria, Lebanon, and the Gaza
Strip (administered by Egypt after
1949). The first UN Mediator for
Palestine and modern historians of
the period have observed that the
Palestinians fled for the same mixture
of reasons that have caused most
mass population displacements in
the 20 th century: forced expulsions,
a widespread fear of harm from advancing
armies, and panic after credible
reports of civilian massacres by
Israeli militias.
In his September 1948 progress report
to the UN Secretary-General, the
Mediator for Palestine, Count Folke
Bernadotte, urged the United Nations
to affirm that the Palestinian refugees
had the right to return to their
homes at the earliest practicable
date: "It is, however, undeniable
that no settlement can be just and
complete if recognition is not accorded
to the right of the Arab refugee
to return to the home from which
he has been dislodged by the hazards
and strategy of the armed conflict
between Arabs and Jews in Palestine." In
his listing of the basic premises
for an equitable resolution of the
conflict, Count Bernadotte recommended
that those refugees choosing not
to return should be paid "adequate
compensation" for their properties.
(This echoed the United Nations'
stipulation in Resolution 181(II)
the year before that "full compensation" was
to be paid for the expropriation
of any Arab land by the Jewish state.)
Moreover, he added in his report
that Israel bore the responsibility
to indemnify those owners whose property
had been wantonly destroyed during
the conflict, with no qualification
as to whether they returned from
their exile or not. The day after
delivering his report, Count Bernadotte
and an aide were assassinated by
the Stern Gang, an extremist Jewish
militia.
The United Nations General Assembly
adopted the thrust of the Bernadotte
report in December 1948 in UNGA Resolution
194. In Paragraph 11, the General
Assembly endorsed the report's recommendations
on the right of return and compensation:
The General Assembly, having considered
further the situation in Palestine.[r]esolves
that the refugees wishing to return
to their homes and live at peace
with their neighbours should be permitted
to do so at the earliest practicable
date, and 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.
In its resolution, the General Assembly
spoke to four primary features of
the compensation question, all of
which flowed directly from the Bernadotte
report. First, it stated that those
refugees willing to live at peace
with their neighbours were entitled
to the restitution of their homes
at the earliest practicable time.
Second, those refugees not returning
home should be entitled to compensation
for their lost property. Third, those
refugees who do return home to damaged
or destroyed properties should be
compensated for their losses. And
fourth, it explicitly grounded its
direction that the refugees were
entitled to repatriation, restitution
and compensation based upon the principles
of international law and equity.
Ironically, while these features
of Resolution 194 would significantly
influence the rights in international
law that refugees and victims of
human rights abuses elsewhere could
claim in the years to come, these
entitlements have been largely unavailable
for the intended recipients.
After 1948
The homes, lands and properties
left behind by the flight of the
Palestinians between 1947-49 were
substantial. The United Nations Conciliation
Commission for Palestine (created
by Resolution 194 to resolve the
outstanding issues between Israel,
the Palestinians, and the neighbouring
Arab countries) estimated in 1950
that almost 80% of Israel's total
area of 20,850 square kilometres
represented abandoned Arab lands,
although only about 28% of that land
was cultivable. Approximately 400
Arab villages and towns, representing
most of the Palestinian communities
in the territory assigned to, or
captured by Israel, were occupied
and depopulated during the war. The
transfer of wealth to Israel in the
form of Palestinian lands, homes,
assets and property was crucial to
the new state's ability to survive
and develop in its formative years.
Between 1948 and 1953, 350 of the
370 new Jewish settlements created
in Israel were on former Arab property.
Don Peretz has estimated that, by
1954, more than one-third of the
Israeli Jewish population were living
on former Arab lands, and an additional
250,000 Israeli Jews, including one-third
of the new immigrants, lived in abandoned
Arab urban property. In the countryside,
where most Palestinians had lived
prior to 1948, enormous tracts of
citrus, olive and other cultivable
properties were expropriated by Israel
and turned over to Jewish agricultural
settlements. The importance of these
agricultural lands was critical to
the fledging Israeli economy: as
one example, exports of citrus products
from expropriated Arab groves in
1951 provided nearly 10% of Israel's
foreign currency earnings.
Israel subsequently legalized the
land and property expropriations
through legislation that vested broad
powers in the Custodian of Absentee
Property, who was to hold all of
the abandoned properties of the "absentees" in
trust. An absentee was defined expansively
as any Arab in Palestine who left
his or her home after 29 November
1947, and the burden of proof that
a claimant was not an absentee fell
on the former owner. Eventually,
much of the expropriated Palestinian
lands and properties held by the
Custodian were transferred via a
purchase agreement to an Israeli
state development authority, which
allowed the Israeli government to
maintain that these properties were
acquired legally (i.e, through payment),
even though the Palestinians owners
never received any money. This authority,
in turn, turned these properties
over to the Jewish National Fund,
whose charter prohibited it from
selling or returning lands to non-Jews.
These steps had the effect of completely
severing the proprietary link between
the absentees and their lands. Although
Palestinian refugees living in exile
and even those displaced within Israel
sought to have their properties returned
to them, very few succeeded. By the
early 1950s, Israel had so significantly
transformed the emptied Palestinian
properties through irreversible steps - such
as the levelling of villages, the
settlement of Jewish immigrants into
abandoned homes, and the establishment
of kibbutzim and moshavim (Jewish
agricultural settlements) on cultivated
Arab farms - that there was increasingly
little of the lands and homes of
the displaced Palestinians which
remained in its original state.
During these early years, Israel
was prepared to address the question
of compensation for the abandoned
Palestinian properties, but tied
its commitment to a number of pre-conditions
that amounted to deal-breakers. At
the centre of its position was its
insistence that it would not accept
the return of the refugees, and that
there would be no restitution of
abandoned Palestinian properties.
The position of the Arab countries
on compensation was starkly different.
At the heart of their argument was
the fulfilment of Resolution 194
and the right to repatriate. Only
after the free choice of refugees
as to whether to return was exercised,
the Arab states maintained, could
the subsequent issue of compensation
be determined and implemented. Thus,
while both sides accepted the premise
of compensation, no progress was
made towards a settlement because
of the larger, intractable issue
of repatriation. With no agreement,
the unresolved fate of the displaced
Palestinians was left to fester as
an open political sore that would
spark four more wars, two sustained
popular uprisings, and chronic regional
instability over the next five decades.
III. The Right to Compensation
and Restitution in International
Law
Introduction
Compensation for refugees and displaced
persons, and for victims of the abuse
of internationally-recognized human
rights, has evolved into the status
of a right in international law.
It has acquired that status because
it satisfies the criteria that are
commonly accepted as the formal sources
of international law. Applying these
criteria, the obligation to pay compensation
to refugees and displaced persons
is evident in the requirements of
regional treaties, conventions and
agreements; in the domestic and international
practice of states; in the rulings
of international judicial bodies;
in the consensus among scholars of
international law; and in the repeated
pronouncements of the international
community as expressed in the relevant
bodies and organs of the United Nations.
While the modern body of rights for
refugees and displaced persons emerged
only after the Second World War,
the antecedents of the right to compensation
and restitution are evident even
in the nascent years of international
law.
The policy justifications for articulating
the principle of compensation and
restitution as a right for refugees
and displaced persons in international
law are at least five-fold. First,
since modern international law forbids
the mass expulsion of civilian populations
during wars and civil conflict and
prohibits the domestic conditions
of persecution that create large-scale
refugee displacements, compensation
is regarded as a potent tool to deter
potential states of origin from domestic
actions that would generate refugees.
Second, as a principle of equity,
countries should not benefit from
proceeds reaped through violating
the human rights of minorities or
the nationals of other countries.
Third, compensation and restitution
serves to repair some of the individual
and/or group dignity lost by the
refugee through the violation of
her or his human rights by mass displacement.
Fourth, where compensation is assessed
and collected against a refugee-generating
state, both the international community
and the individual refugees will
have their financial burdens reduced.
This would be a particularly important
benefit for refugees, whose movable
and immovable property they lost
through the conflict or persecution
they fled from invariably represents
the sum total of their meager personal
wealth. And fifth, the compensation
principle may assist with the reconciliation
of the parties or groups to the conflict
that sparked the mass population
displacement, as part of a broader
range of restorative remedies, such
as a frank apology, the revelation
of the truth, substantial reforms
to political and social institutions,
public educational campaigns to transform
attitudes, and substantial changes
to employment patterns.
The Origins of the Right to
Compensation in International Law
Prior to the emergence of modern
human rights, humanitarian and refugee
law in the immediate aftermath of
the Second World War, compensation
and restitution for displaced persons
had already been a regular practice
in international treaties and state
practice (although not in a consistent
manner nor with the agreed-upon compensation
obligations always being honoured).
For example, in the aftermath of
the American War of Independence,
60,000 American colonialists loyal
to the British crown fled their homes
and properties in the newly independent
United States. In the 1794 Treaty
of Amity, Commerce and Navigation (the "Jay
Treaty") between Great Britain and
the United States, the Americans
agreed that the loyalists could claim
either the restitution of their properties
or compensation for their property
and commercial losses. However, the
subsequent deterioration of political
relations between the two countries
resulted in the American abdication
of any responsibility to pay the
loyalist claims.
Similar examples of European and
international treaties and laws that
recognized compensation and/or restitution
claims for displaced civilians include
the 1648 Treaty of Westphalia that
ended the Thirty Years War; the 1678 Treaty
of Nimmegeun between Spain
and France that ended the war over
the Spanish Netherlands; and the
1839 Treaty of London that
guaranteed the independence and neutrality
of Belgium, among others. Even treaties
that legitimized mass displacement
of civilians and population exchanges
(actions that are now prohibited
by international law) - such as the
1920 Treaty of Neuilly between
Greece and Bulgaria, and the 1923 Treaty
of Lausanne between Greece
and Turkey - contained provisions
to compensate civilians who lost
properties.
The modern basis for compensation
and restitution in international
law has been decisively shaped by
the seminal 1928 ruling of the Permanent
Court of International Justice in Chorzow
Factory . In the aftermath of
World War One, the Polish government
expropriated a German-owned factory
on Polish territory, and the German
government sought reparations on
behalf of the owners. In its lead
ruling on the merits, the World Court
stated that state responsibility
applies in the case of an act or
omission in violation of an international
legal obligation:
It is a principle of international
law, and even a general conception
of law, that any breach of an engagement
invokes an obligation to make reparation.
[R]eparation is the indispensable
complement of a failure to apply
a convention, and there is no necessity
for this to be stated in the convention
itself.
Regarding damages, the Court endorsed
the principle of restitution first,
and full compensation for the property
owners where restitution was unobtainable.
In addition, it stated that awards
for other damages not covered by
restitution and compensation were
also available:
The essential principle contained
in the actual notion of an illegal
act - a principle which seems to
be established by international practice
and in particular by the decisions
of arbitral tribunals - is that reparation
must, as far as possible, wipe out
all the consequences of the illegal
act and re-establish the situation
which would, in all probability,
have existed if the act had not been
committed. Restitution in kind, or,
if this is not possible, payment
of a sum corresponding to the value
which a restitution in kind would
bear; the award, if need be, of damages
sustained which would not be covered
by restitution in kind or payment
in place of it - such are the principles
which should serve to determine the
amount of compensation due for an
act contrary to international law.
Although Chorzow Factory was
decided as a commercial property
action in private international law,
its articulation of the principles
on compensation have since been widely
endorsed in various public international
law decisions. These endorsements
include leading judgements on damages
for injuries to United Nations personnel
and reparations for human rights
violations, as well as by a seminal
United Nations study on compensation
for human rights violations.
(C) Resolution 194 and the Articulation
of the Right to Compensation
United Nations General Assembly
Resolution 194, which established
the availability of return, compensation
and restitution for the Palestinian
refugees, was the world community's
first affirmation of these principles
in the context of a displaced population.
Resolution 194 is commonly cited
by refugee law scholars as a primary
international law source for the
right of refugees and displaced persons
anywhere in the world to compensation
and restitution. Two particular features
of Resolution 194 embed it with an
international law importance that
distinguishes it from the limited
legal scope of an ordinary General
Assembly resolution.
First, Resolution 194 explicitly
states that the repatriation, compensation
and restitution of the refugees should
be made according to ". principles
of international law or in equity".
Luke Lee argues that, by deliberating
choosing this particular drafting,
the General Assembly clearly signalled
that it was restating pre-existing
law on the principle of compensating
wrongs in international law, rather
than simply establishing a new legal
obligation. As such, the resolution
moves beyond the recommendatory and
political character of most General
Assembly resolutions and acquires
a legal, binding nature. Its binding
effect arises not from the resolution
itself, but from the declared law,
which is then obligatory upon all
states, whether they voted in favour
of the resolution or not.
Second, the resolution has been
repeatedly affirmed by the General
Assembly. Since 1948, Resolution
194 has been re-affirmed or referred
to, by near unanimous majorities,
at least 130 times. For instance,
UNGA Resolution 53/51, voted on 3
December 1998, expressly cited Resolution
194 when endorsing the entitlement
of Palestinian refugees "to their
property and to the income derived
therefrom, in conformity with the
principles of justice and equity".
Resolution 53/51, like its many predecessor
resolutions, was passed by an overwhelming
majority, in this case 156 member
countries in favour and only two
(Israel and the United States) in
opposition. International law scholars
have stated that, in specific circumstances,
the repeated affirmation of a resolution
by unanimous or overwhelming majorities
of the General Assembly endows it
with an acquired legal character,
particularly when it reflects the
parallel development of state practice
on the issue. Leading judgements
of the World Court have endorsed
this approach.
(D) General Principles of Domestic
Law
A leading source for international
law is the general principles of
domestic law widely accepted by the
developed legal systems, insofar
as they apply to international rights
and obligations. The principles of
compensation and restitution have
been cornerstone features of most
domestic legal systems for centuries,
and constitute the primary remedial
response to repair proven damages
and instances of unjust enrichment.
The English common law courts have
long applied the principle; in Fibrosa
Spolka Akcyjna v. Fairbairn
Lawson Combe Barbour Ltd .,
Lord Wright stated in 1943 that:
It is clear that any civilized system
of law is bound to provide remedies
for cases of what has been called
unjust enrichment or unjust benefit,
that is to prevent a man from retaining
the money of or some benefit derived
from another which it is against
conscience that he should keep.
Similarly, the American Law Institute,
in its seminal restatement of the
domestic law on restitution, has
established that: "A person who has
been unjustly enriched at the expense
of another is required to make restitution
to that other."
International Treaties and Conventions
Through treaties and conventions,
international law has accepted the
cornerstone principle that a state
which has violated a legal obligation
is required to end the violation
and to make reparation, including
restitution and compensation for
loss and injury in the appropriate
circumstances. These international
instruments also stipulate that those
whose human rights have been breached
are to have access to meaningful
remedies. Article 8 of the Universal
Declaration of Human Rights states
that every individual is entitled
to an "effective remedy", a requirement
that is repeated in the International
Covenant on Civil and Political Rights and
the Declaration on the Elimination
of all Forms of Racial Discrimination .
Other human rights instruments are
even more specific: the American
Convention on Human Rights refers
to a "right to be compensated in
accordance with the law" and provides
that "no one shall be deprived of
his property except upon payment
of just compensation," while the African
Charter on Human and Peoples' Rights establishes
the "right to an adequate compensation." The International
Covenant on Civil and Political Rights and
the European Convention on Human
Rights both refer to the "enforceable
right to compensation." The 1998 Treaty
of Rome , which established
the International Criminal Court,
has directed the new court to establish
principles of restitution, compensation
and rehabilitation for victims of
international war crimes. Other international
treaties and conventions contain
similar remedial requirements.
Theo van Boven, a Special Rapporteur
for the United Nations Commission
on Human Rights, issued a comprehensive
final report in 1993 on international
law remedies arising from the violation
of human rights norms. After reviewing
a number of international treaties
and conventions, he stated that: "the
principal right [that human rights]
victims are entitled to under international
law is the right to effective remedies
and just reparations." In his conclusion,
the Special Rapporteur said that: "it
is.an imperative norm of justice
that. the rights of the victims be
sustained to the fullest possible
extent." These remedies included
restitution, compensation, rehabilitation
and guarantees of non-repetition,
and would be claimed against the
state perpetrating the violations.
Among the human rights and fundamental
freedoms - whose gross violation
would trigger a claim for remedies
under international law - that van
Boven listed were "deportation or
forcible transfer of population".
The Special Rapporteur also maintained
that international law contains no
statute of limitations for claims
regarding human rights reparations.
(F) Contemporary International
Law Rulings
Decisions by international legal
courts and tribunals, particularly
since the 1980s, have affirmed that
compensation and restitution are
available remedies for displaced
persons and victims of human rights
abuses. Using both the 1928 World
Court decision in Chorzow Factory and
international human rights treaties
as the legal foundation for the principle,
such international judicial bodies
as the Inter-American Court of Human
Rights and the European Court of
Human Rights have ruled that violations
of international obligations which
result in harm create an obligation
to compensate for and repair the
damages. The Inter-American Court
has stated that:
It is a principle of international
law, which jurisprudence has considered "even
a general concept of law", that every
violation of an international obligation
which results in harm creates a duty
to make adequate reparation. Compensation,
on the other hand, is the most usual
way of doing it.
In 1989, the Inter-American Court
ruled in Velasquez-Rodriguez
v. Honduras , a case under the American
Convention on Human Rights involving
state responsibility for the disappearance
of Honduran citizens, that international
law requires restitution of the status
quo ante where possible, and
compensation where it is not possible.
After finding Honduras liable for
human rights violations, the Court
held that the claimants were entitled
to a broad range of compensation
headings under international law,
as per the "fair compensation" criteria
in Article 63(1) of the Convention .
These headings included damages for
lost salaries, based on probable
future earnings; and moral damages,
based upon the emotional harm suffered
by the families of the victims. The
Court emphasized that the 'fair compensation" criteria
must be applied in "sufficiently
broad terms in order to compensate,
to the extent possible, for the loss
suffered." These compensation principles
have been regularly applied by the
Inter-American Court in subsequent
decisions.
In a similar manner, the European
Court of Human Rights has ruled under
the European Convention on Human
Rights that the deprivation
of property and human rights obligates
the offending state to provide restitution
and compensation for the claimant.
In Loizidou v. Turkey ,
a Greek Cypriot national with property
holdings in the northern part of
Cyprus occupied by Turkey since 1974
complained that she was prevented
from returning to her lands and peacefully
enjoying them. The Court found that
Turkey was responsible, as the occupying
power, for breaching the Convention ,
and rejected its arguments that its
stated need to rehouse displaced
Turkish Cypriot refugees justified
the negation of Ms. Loizidou's property
rights. At the remedial stage, the
European Court ruled that the claimant
was still the legal owner of the
property, and entitled to reclaim
her lands at any time. As reparations,
it awarded compensation for ground
rent (based on the market value earnings
that could have been realized but
for the occupation), moral damages
for the loss of property enjoyment,
and costs and interest.
More recently, the European Commission
of Human Rights issued a 1999 report
on Cyprus, where it applied the principles
in Loizidou regarding the
claims of other displaced Greek Cypriots
to property restitution and compensation.
The Commission unanimously found
that Turkey remained in continuing
breach of the European Convention
on Human Rights because of its
ongoing refusal to allow Greek Cypriots
to return to their homes in northern
Cyprus. It also ruled that Turkey's
refusal to pay compensation for its
interference with the claimants'
property rights breached the Convention .
Turkey's defence that property succession
legislation enacted by the Turkish
Republic of North Cyprus invalidated
the property claims was rejected
by the Commission, as was its argument
that property restitution and compensation
should await a future global settlement
of the Cyprus issue.
(G) Contemporary State and International
Practice
Recent state and international practice
have provided rich examples of restitution
and compensation for violations of
property and human rights. Many modern
treaties and agreements that ended
international or national conflicts
have included these principles in
the final settlement. Similarly,
most countries in Eastern and Central
Europe in the 1990s have offered
restitution and compensation for
those who lost properties or suffered
human rights abuses under fascism
or communism. As well, there are
a number of contemporary domestic
examples where these remedial principles
have been applied as a restorative
step to address a troubled history
between majority and minority populations.
The template for the modern international
obligation to compensate for unilateral
property confiscations and wide-scale
human rights abuses has been the
post-war German and European reparations
for Jewish and other victims of Nazi
persecution. Following the 1952 Luxembourg
Agreement between the Federal
Republic of Germany, Israel, and
the Conference on Jewish Material
Claims against Germany, the West
German government enacted a series
of laws to provide compensation for
gross violations of human rights
(such as loss of life, loss of health,
forced labour, deportation, imprisonment,
maltreatment and degradation) and
for property losses (including immovable
and moveable property, capital, income,
securities, mortgages, pensions,
copyright and patents) for victims
or their heirs. These compensation
payments have amounted to DM 100
billion up to the year 2000, payable
to Holocaust survivors, both individually
and through the state of Israel.
The range of compensable claims for
Nazi victims has been steadily widened
through the decades to include Swiss
bank accounts, European insurance
policies, looted works of art, and
slave labour. Other European countries,
such as Austria, Norway, Denmark,
and the Netherlands have also undertaken
to offer compensation to Jewish and
other victims of Nazism. And with
the fall of communism in Eastern
Europe, procedures have been created
in a number of countries - including
Hungary, Poland, Slovakia, and the
Czech Republic - to restore property
confiscated either by fascist or
communist regimes to Jewish and other
dispossessed owners. After German
reunification in 1990, the German
parliament enacted legislation to
restore confiscated Jewish properties
in the former East Germany to their
original owners or heirs, and to
award the proceeds from the sales
of communal and unclaimed Jewish
property to the Jewish Claims Conference
in order to aid needy Holocaust survivors
worldwide.
In Bosnia, a centrepiece of the
1995 Dayton Peace Agreement that
brought the first war in the former
Yugoslavia to an uneasy end was the
provision that all refugees and displaced
persons would have the right to return
home and have their properties restored
to them. Alternatively, compensation
for properties was available for
those that either could not, or did
not wish to, return to them. The
Dayton Agreement established a Commission
for Displaced Persons and Refugees,
later renamed the Commission for
Real Property Claims of Displaced
Persons and Refugees, to adjudicate
real property claims, including the
return of the confiscated property,
or, in lieu of return, the awarding
of "just compensation". Compensation
may be awarded in the form of money
or in the form of a bond for the
future purchase of real property
elsewhere in Bosnia. For a variety
of international and inter-ethnic
reasons, the Dayton compensation
provisions have been only implemented
in a piecemeal fashion, as the legal
structures to adjudicate the claims
await the realization of political
will. In a related legal process,
an international human rights chamber
in Sarajevo has declared that displaced
property owners in Bosnia are entitled
to be compensated for the unlawful
eviction from their residence, through
declaratory relief and moral damages,
based upon the European Convention
on Human Rights .
As part of the recent resolution
of other international and domestic
conflicts, compensation and restitution
have been integral parts of the settlement
process. In the aftermath of the
Second Gulf War in 1990-91, the United
Nations established a compensation
commission to process claims and
pay out compensation for property,
personal and moral losses resulting
from the Iraqi invasion and occupation
of Kuwait. The Iraq-Kuwait compensation
experience built upon the lessons
of the Iran-United States Claims
Tribunal, created in 1981 to adjudicate
the American claims for property
and material losses following the
1979 Islamic revolution in Iran.
In Guatemala, the agreements in the
early 1990s that brought an end to
the four-decades old civil war stipulated
property restitution and compensation
to land owners who fled the country
during the armed conflict. Domestically,
compensation has played a role in
repairing the civil rights violations
of Japanese-Americans and Japanese-Canadians
for their arbitrary detention and
property confiscation during the
Second World War. Similarly, the
tools of compensation and property
restoration has shaped the modern
attempts of the United States, Canadian,
Australian, and New Zealand governments
to restitute their aboriginal peoples
for the centuries of land alienation
and social harm that these states
inflicted upon them. After the fall
of oppressive military dictatorships
in Chile, Argentina, Uruguay and
Uganda, the new democratic governments
enacted legislation that offered
compensation and, where possible,
restitution for victims of human
rights abuses and property losses
by the previous regimes.
IV. Restitution, Compensation and
the Palestinians
International law
authoritatively establishes that
restitution and compensation are
available remedies for those who
have been displaced or turned into
refugees through acts contrary to
international treaties and conventions,
for those who have suffered gross
violations of their internationally-recognized
human rights, and for those who have
lost homes or property through the
breach of internationally-established
standards. In the case of the Middle
East conflict, the Palestinians who
became refugees, who lost properties,
or who suffered other legally recognized
damages as a consequence of the various
upheavals in the region - and particularly
the 1947-49 and 1967 wars - also
have an established legal grounding
for restitution and compensation
in the substantial body of United
Nations resolutions that specifically
refer to their claims. Indeed, it
would be difficult to find another
community of disadvantaged people
for whom the modern principles of
international law - especially in
the fields of human rights and refugee
law - so clearly buttress their claim
to either have their properties restored
to them, or to receive appropriate
compensation for their losses.
Establishing the entitlement to
compensation and restitution as a
right in international law is one
matter. Articulating the detail of
substance and procedure that must
invariably accompany the realization
of this right is quite another. As
a body of principles, international
law has become a mature legal system,
deserving of the considerable respect
it enjoys in the modern world because
of its impressive assembly of the
values that we have declared we wish
to live by as an international community.
But, as a guide to the efficacious
application of these principles,
the practice of international law
has been considerably less sophisticated.
Its application of these principles
has been an inchoate array of uneven
experiences, shaped by two primary
factors: (i) the poverty of political
will to implement these principles
in a manner consistent with the international
rule of law; and (ii) the wide variety
and real differences among the many
contemporary experiences where the
application on international law
has been attempted. Developing the
practical rules to implement an international
right - such as the entitlement to
restitution and compensation - has,
in many cases, been an original creation,
an ad hoc arrangement.
Yet, increasingly, this need not
be so. The accumulation of international
experience has reached the point
where sufficient precedents and rules
exist, particularly on restitution
and compensation, to productively
and equitably craft their implementation
in any contemporary situation.
The Palestinian claims for restitution
and compensation are neither exceptional
nor insurmountable. The only substantive
obstacle is political will. While
the circumstances of the Palestinians
present some particular challenges - which
is unsurprising, given their massive
displacement, their enormous personal,
property and moral losses, the subsequent
transformation of their homes and
lands, the array of international
political actors involved, and the
extraordinary length of time involved - recent
international and domestic practice
from elsewhere points to applicable
rules that can be successfully adapted
to untie this Gordian knot. In anticipation
that the negotiations between the
Israeli and Palestinian representatives
will eventually turn to the issues
of compensation and restitution,
five aspects of the issue stand out
that will form a significant feature
of the parties' final settlement
of the rights of the Palestinians.
While these five aspects are all
worthy of an extended discussion,
they can, for the purposes of this
essay, only be reviewed briefly.
Return and Compensation .
Modern international law, beginning
with the proclamation of the Universal
Declaration of Human Rights in
December 1948, has insisted that
refugees and displaced persons, as
well as their descendants, have the
right to return to their homes, if
that is their freely-determined choice.
The Human Rights Committee, the United
Nations body responsible for interpreting
the International Covenant on
Civil and Political Rights ,
has stated in 1999 that "there are
few, if any, circumstances in which
deprivation of the right to enter
one's own country could be reasonable." The
right to return survives even when
sovereignty over the lands from where
the displaced had fled is contested
or has changed hands. Those unable
to return to a former home because
it is occupied by an innocent third
party or has been destroyed, are
entitled to choose return to the
vicinity, or to receive compensation.
However, international law holds
that compensation is not a substitute
for the right to return to one's
home. To that end, the ensuing discussion
on restitution and compensation is
to be seen in the context of remedies
adjacent to the right to return,
not in place of it.
Types of Compensation .
According to international law and
practice, the Palestinians eligible
for restitution and compensation
have a range of remedies available
to them, including: (i) the restitution
of their confiscated moveable and
immovable properties; (ii) compensation
for the damages to their restituted
properties; (iii) compensation for
the income derived from the use of
their restituted properties; (iv)
compensation for those refugees and
displaced who choose not to return;
and (v) damages for a spectrum of
non-material losses, including lost
earnings and opportunities, and social
and moral damages. In addition, collective
restitution claims are available
for: (i) expropriated religious,
educational, communal and public
lands; and (ii) the use and depletion
of natural resources, such as water,
minerals and forests. Technically,
the accomplishment of these remedies
within the regional context is feasible,
because the extensive historical
documentation on property and ownership
in Palestine has been largely preserved.
The land records assembled by the
British Mandate authority, the United
Nations CCP, the Israeli Custodian
of Absentees' Property and the Israeli
Lands Authority, as well as the personal
records of the families of the displaced
and refugees, would make compensation
an easier technical task in comparison
to the successful claims achieved
in recent years by victims of European
fascism and by the aboriginal nations
in North America, Australia and New
Zealand.
Politically, the types of compensation
awarded would depend on the prior
determination of how many of the
displaced Palestinians would achieve
the right to return to Israel, and
have their original properties restored
to them. Palestinian researchers
have maintained that the total compensation
price-tag would be significantly
reduced if a greater number of displaced
and refugees were able to return
to their homes inside Israel. However,
discussions within the status
quo framework indicate that
a final settlement on the Palestinian
refugee issue will consist largely
of compensation in exchange for the
negation of the large-scale right
to return. The leading example is
the 1995 Beilin-Abu Mazan agreement,
where a future Israeli justice minister
and a senior advisor to the Palestinian
Authority developed an unofficial,
but influential, template for a final
status settlement. It accepted the
right of the displaced Palestinians
to compensation and rehabilitation
for their material and moral losses,
while excluding any significant return
of, or to, their properties within
Israel. How the parties to the final
status negotiations will square any
agreement that dissolves the right
of Palestinian refugees to return
to their original lands with the
cornerstone principle in international
refugee and human rights law that
refugees have a right to freely choose
repatriation back to their homeland
will be a closely observed matter.
Valuation of Losses . International
law requires that compensation for
internationally-recognized losses
should, as much as remedies can,
place the claimants back in the position
that they would have been in, had
the breach of the legal right not
occurred. Beyond that, it has not
spoken with particular clarity regarding
the precise formula to use, employing
at different times the terms: "full", "just", "fair",
and "adequate" to describe the compensation
required. While "full compensation" is
an appropriate yardstick in international
claims of small and medium size,
large-scale claims - because their
size creates problems of efficiency,
fairness, and cost - have tended
towards less-than-global "attainable
justice" standards. Indeed, the larger
and more complex the potential claim,
the more likely it has been that
the final compensation arrangement
will be a judicious mixture of political
feasibility (i.e., available financial
resources, and domestic public reaction)
and the requirements of justice (i.e.,
international legal obligations,
international pressure, and the cost
of ongoing dissent by the aggrieved
party). "Attainable justice", while
necessarily falling short of "full
compensation", is an acceptable and
appropriate standard in large-scale
international claims where: (i) the
aggrieved party freely agrees to
the settlement or it is the result
of a legal process that the aggrieved
party has freely agreed to adhere
to; (ii) the compensation addresses
all of the recognized losses; (iii)
internationally accepted means of
valuation for the losses are employed;
and (iv) the party responsible for
the compensation of the losses undertakes
a guarantee of non-repetition. However,
with whatever valuation standard
is chosen, international law requires
that it be given a broad application,
so that the restorative purposes
of human rights remedies - which
include justice, equity, acknowledgement
of responsibility, deterrence, reconciliation,
and social harmony - are achieved.
Creating an Appropriate Compensation
Regime . A number of issues
arise in choosing the modalities
of a compensation regime. The principal
issues include:
The group of claimants .
The choices for appropriate claimant
groups would include:
(a) the 1948 property owners and
their heirs, which would award those
who suffered direct losses, but would
disproportionally benefit land-owners,
and disadvantage the poor and women
(who frequently could not own or
inherent property), as well as require
personal documentary evidence which
may not always exist;
(b) the extended family or villages,
which reflects the traditional rural
social units and may resolve some
problems surrounding claims over
collective lands, but could create
problems in determining membership,
and would not address the landless
or gender inequity issues;
(c) per capita awards for all the
displaced, regardless of property
ownership, which would address the
inequality and gender issues, but
would still require a determination
of eligibility; and
(d) a collective claim made on behalf
of the displaced by the Palestinian
state, which would create a national
fund for future public works, but
would not likely provide the kind
of political and emotional closure
for the displaced that an individual
compensation scheme should provide.
(ii) Formula . The choices
among appropriate compensation formulas
would include:
(a) a claims-based system that bases
compensation upon the value of the
lost property, which would most directly
link the financial remedies to the
actual losses, but would also likely
recreate the inequalities of pre-1948
Palestinian society;
(b) a modified claims-based system
that creates several compensation
categories based upon size of claim,
which would be more efficient and
award more progressive remedies than
the pure claims-based system, but
would also still be biased towards
larger property owners;
(c) a pure per capita payment system
that would award equal payments to
all refugees, thereby achieving efficiency
and eliminating the social inequalities
of the previous proposals, but would
diminish the link between payments
and scale of losses; and
(d) a modified per capita payment
system that would create several
categories of claimants based upon
a generational or returnee v. non-returnee
status, which would still be efficient
and relative equitable, but which
could also create social tension
between the categories.
Mechanism . What forms
would compensation be awarded? Among
the choices would be:
cash payments, which are efficient
to administer, but may not have significant
macro-social or economic benefits;
services or vouchers for individuals
or families, which can be directed
towards more focused public benefits
plans, but are less flexible for
the recipients and weaken the link
between the compensation and actual
losses;
investment in community development,
which also promotes public benefit
plans, but weakens the link between
the displaced and the purpose of
the compensation; and
a equity scheme involving refugee
ownership in collective development
projects, which more directly connects
the displaced to public plans, but
does not strongly address the personal
needs for closure.
Administrative Process .
How should the compensation fund
be administered and distributed?
Several politically feasible types
of bodies are possible, including:
the Palestinian state, which may
build up the governing expertise
of the future state, but which also
raises issues of accountability and
fairness;
a bilateral body made up of Palestine
and Israel, which would involve the
main parties to the conflict, but
would invite administrative gridlock
because of their historical animosity;
a trilateral commission, involving
Palestine, Israel and another party,
which would lessen but not likely
eliminate the problems of a bilateral
commission; or
an international commission of parties
acceptable to Palestine and Israel,
or a United Nations commission, which
would likely avoid gridlock, but
would not be directly accountable
to the direct stakeholders.
Who Should Pay . International
law provides that the state, body
or individual who causes the damage
or harm in breach of an internationally-recognized
obligation is liable for the restitution
and compensation. In this case, Israel
would bear the primary responsibility
for compensation, because it either
created and perpetuated the Palestinian
refugee problem in defiance of international
law, or on the lesser ground that - regardless
of moral blame - it has been unjustly
enriched through its expropriation
and use of Palestinian properties,
homes and lands. Payments by Israel
to meet its compensatory obligations
could take the form of direct restitution
(the return of homes and properties,
which would likely lessen its potential
total liabilities), the handing over
of the settlements, roads and other
structures built in the West Bank
and Gaza, and the financial contribution
to a compensation fund. While Israel
is an economically advanced nation - with
a per capita income of over $17,000
(US), it is almost 10 times the level
of the Palestinian economy - even
its financial capacity is unlikely
to entirely satisfy the requirements
of a final compensation fund by itself.
For a variety of complex realpolitik and
practical reasons, the international
community (primarily Europe and North
America) would likely contribute
to a compensation fund, which would
enhance their voice in shaping the
modalities of the compensation regime.
V. Conclusion
To satisfy the direction
of the international community that
the Palestinian refugee problem is
to be settled in accordance with
the principles of justice and equity,
international law mandates that they
are entitled to restitution and compensation
for their losses. These losses attributable
to Israel in violation of its international
law obligations are substantial,
and arise from: the expulsion or
flight of over half of the Palestinian
population; the confiscation of approximately
16,000 square kilometres of land,
representing almost 80% of Mandate
Palestine; the large-scale expropriation
or destruction of Palestinian property;
the refusal to allow the refugees
to return to their homes; the suffering
caused by the losses and the decades
in exile; and unjust enrichment from
the use of the confiscated properties.
Although international law does not
speak with precision regarding the
formulas to be applied in such a
large-scale and complex claim, it
has clearly stipulated a number of
principles that are directly applicable
in any future final-status agreement
between Palestine and Israel, including:
(i) restitution of the wrongly-acquired
property enjoys primacy, with compensation
available for property damage and
unjust enrichment; (ii) compensation
in place of restitution is acceptable,
but only where restitution has become
impossible for practical reasons;
(iii) compensation is available for
both individual and community losses,
and covers remedies for the loss
or damage to immovable and movable
property; for loss of actual income
and future earning potential; for
moral damages, including emotional
harm; for unjust enrichment; for
the costs of rehabilitation; and
for an undertaking that such actions
will not be repeated; (iv) however
the legal formula for compensation
has been phrased - be it "full", "fair", "adequate",
etc. - it is to be given a sufficiently
broad application so that the restorative
purposes of human rights remedies
are fulfilled; (v) the state actor
that displaced the indigenous population
and unjustly benefited from the confiscated
properties is the party responsible
for restitution and compensation;
and (vi) the responsible state actor
cannot argue that the difficulties
of process - those caused by the
passage of time, the magnitude of
potential claimants, the determination
of worthy claimants, the calculation
of outstanding damages, the existence
of subsequent domestic legislation
that has transferred legal title,
the hostile mood among the domestic
political constituency, or the lack
of a comprehensive settlement to
the wider conflict - are justifiable
barriers to satisfying an otherwise
established claim for restitution
and compensation.
The lessons of reconciliation in
the modern world are profound. Those
on both sides of an historical wound
benefit immensely from a genuine
effort to acknowledge, remember,
and restore. While full justice may
not have been achieved even in the
template cases of post-war Europe
or contemporary South Africa, the
transformation of relations and the
flourishing of new values among these
former nemeses has been substantially
aided by the restorative remedies
of restitution and compensation.
In the Middle East, the closure of
the decades-long conflict will require
no less. For Israelis, offering these
remedies will finally allow a reckoning
with the uncomfortable history that
still stares out from among the ruined
homes and wild olive groves that
can be found in every corner of their
country. For Palestinians, accepting
the remedies of restitution and compensation
will not return some past Eden, but
it will address the sufferings they
have endured and provide the tools
for a productive national future.
The requirements of an enduring regional
peace require no less. |