President Mikheil Saakashvili's announcement of a peace initiative in January 2005 was a positive step towards the peaceful resolution of the Georgian-South Ossetian conflict.^[fn]"Initiatives of the Georgian Government with Respect to the Peaceful Resolution of the Conflict in South Ossetia", presented at the first part of the 2005 Ordinary Session of the Council of Europe Parliamentary Assembly, Strasbourg, 24-28 January 2005.Hide Footnote  The measures proposed go in the right direction and match many Crisis Group recommendations^[fn]Crisis Group Europe Report N°159, Georgia: Avoiding War in South Ossetia, 26 November 2004.Hide Footnote  but little has actually been done. Without immediate and visible steps to back up President Saakashvili's words -- beginning by seriously addressing the refugee and displaced persons issue in order to build some mutual confidence before plunging directly into status questions -- there is a real danger that Georgia and South Ossetia could blunder into another military clash.

Relations remain tense, and exchanges of small-arms fire are frequent. No progress has been made in implementing the demilitarisation agreements following the clashes of August 2004.^[fn]Reached in Sochi on 5 November 2004, Vladikavkaz on 20 November 2004 and Moscow on 17 March 2005.Hide Footnote  Although media reports as this briefing went to press indicate it may have been dismantled, the Georgian side has maintained until recently a training camp for reserves in Dzevera, ten kilometres from Tskhinvali, the capital of South Ossetia.^[fn]Protocol No.3 to the Sochi Agreement defines the zone of conflict as a circle with a radius of fifteen km from the centre of Tskhinvali. Protocol No.3, 12 July 1994, signed in Vladikavkaz.Hide Footnote  South Ossetian "ministry of defence" personnel engage in military exercises and live-fire training in the zone of conflict, where any military formations other than the Joint Peace Keeping Force (JPKF) are forbidden by the Sochi Agreement, which ended the fighting in 1992. As the winter snows melt in the zone of conflict, inhabitants and political analysts alike fear a return to violence.^[fn]War rhetoric has increased in the past weeks in Georgia. The chairman of the committee on defence and security of the parliament, Givi Targamadze, said on 12 April 2005, "Today the Georgian army can establish control over the whole territory of South Ossetia in three-four days", Caucasus Press, 13 April 2005. A few days earlier, former minister of defence and current minister of state for European integration, Giorgi Baramidze, stated, "I urge everyone to join the Georgian army, defend Georgia, join the people who are ready to spill blood for their motherland. This time has come", BBC Monitoring, original from Imedi TV, Tbilisi, 6 April 2005.Hide Footnote

The war caused massive displacement, shattering Georgian-Ossetian coexistence and pushing Ossetians from Georgia much closer to their ethnic kin in North Ossetia (Russian Federation).^[fn]For a quick overview of statistics illustrating the movements of both South Ossetians and Georgians in connection with the conflict, see Appendix C below. This briefing uses the terms "internally displaced person" (IDP) and "refugee" in the accepted international sense. An IDP is an individual displaced within the border of his or her country. A refugee is an individual displaced outside the border of his or her country. In the context of this briefing, a displaced individual within the internationally recognised borders of Georgia is considered an IDP whether in territory under the control of the Georgian state or not. Such an individual in North Ossetia, on the other hand, is considered a refugee. A "displaced person", unless otherwise identified, may be, formally, either an IDP or a refugee.Hide Footnote Thirteen years after the ceasefire, up to 60,000 Ossetians displaced from Georgia have yet to regain property rights or be compensated for their losses.^[fn]UN Association of Georgia, Refugee, third issue, November 1999, in Global IDP database, "Right to Property Restitution: Georgia NGO Submits Draft Legislation (1999)", available at http://www.db.idpproject.org/Sites/IdpProjectDb/idpSurvey.nsf/wViewCountries/09864A27EF9111BDC125689B00375619.Hide Footnote  According to the last pre-war census (1989),^[fn]The 1989 Soviet, countrywide census includes the South Ossetia Autonomous Region. Crisis Group documentation from the state department for statistics of Georgia.Hide Footnote  164,055 Ossetians lived in Georgia, 97,658 within what today can be considered as "Georgia proper".^[fn]While not wholly satisfactory, the term "Georgia proper" is used in this briefing to describe all areas currently under control of the Georgian state (i.e. large parts of South Ossetia and Abkhazia are not included). According to the 1989 census 65,232 Ossetians lived in South Ossetia and 1,165 in Abkhazia.Hide Footnote  Today in Georgia proper only 38,028 remain.^[fn]State department for statistics of Georgia, available at http://www.statistics.ge/Main/census/INDEXGEO.HTM. The 2002 countrywide census does not include the parts of South Ossetia and Abkhazia not under Georgian state control.Hide Footnote  It is unlikely that a majority of the Ossetian displaced will ever return to Georgia. Nevertheless, if those who do want to return could regain their full rights as citizens, confidence and trust would be strengthened.

Through 2004, the office of the UN High Commissioner for Refugees (UNHCR) had facilitated return of only some 1,734 persons (513 families) from North Ossetia to South Ossetia and Georgia proper.^[fn]UNHCR, "Population Movements as a Consequence of the Georgian-South Ossetian Conflict", updated 1 September 2004. There is believed to have been no significant further facilitation of return at least through the end of the year.Hide Footnote  In 2004 the UN Office for the Co-ordination of Humanitarian Assistance (OCHA) found that with regards to Ossetians from Georgia, "an overwhelming number of IDPs [internally displaced persons] and returnees remain displaced...many if not most...reluctant to return to their places of origin".^[fn]UN OCHA Georgia, "South Ossetia Briefing Note", January 2004.Hide Footnote

Since 1998, legislative drafts have been penned, international organisations have provided expert commentaries, and financial assessments of the cost of restitution and compensation have been made. In 1999, upon becoming a member of the Council of Europe (CoE), Georgia committed to take the necessary legislative measures to facilitate the restitution of ownership and tenancy rights or pay compensation within two years. It has yet to fulfil this commitment. In 2004 the government took only tentative steps to encourage return after President Saakashvili issued a decree allocating $197,000 to assist 25 Ossetian families to regain their pre-war homes in the Borjomi valley.

If Tbilisi wants to show its political will to resolve the conflict through peaceful means, it should immediately implement unilateral measures to build confidence amongst the Ossetians, who do not trust President Saakashvili or most of his government. Until this happens, the Ossetians will not feel secure enough to make the hard compromises a definitive political settlement will require.

To provide the right environment for dialogue and co-existence, the groundwork for refugee and IDP return should be laid prior to any Georgian offer of a comprehensive agreement on the final status of South Ossetia:^[fn]The Georgian government is currently working on such an offer, in cooperation with the Council of Europe's Venice Commission. See below.Hide Footnote

• President Saakashvili should address the Ossetians directly, encouraging them to return;
   
• the Georgian Parliament should pass a law on property restitution and compensation with no further delays; and
   
• a mixed commission to handle property claims and compensation should be created and other steps taken to ensure returnees’ social and economic reintegration into Georgia.

Though several international documents recall Georgia's responsibility to facilitate return, the international community has done little in practice to encourage the government to remove obstacles to property restitution and reintegration. Donors have shown little eagerness to provide the necessary funds to support the return effort outside the conflict area. Only UNHCR has offered any substantial assistance, but as experience from other post-conflict settings where large-scale return occurred demonstrates, multi-agency engagement is necessary for return to succeed.

• The international community should continue pressing Georgia for a satisfactory resolution of the return problem and should commit to helping fund return, but that aid should be conditioned on passage of the appropriate legislation by the Georgian Parliament.

Tbilisi/Brussels, 19 April 2005