Legitimate basis of compensation obligations in the post-conflict period
The last few decades have been marked by significant advances in the understanding of the responsibility of states for serious violations of human rights and humanitarian law. The long-awaited steps in the direction of human development of international law have already been taken. These include the establishment of human rights protection institutions, international criminal courts, justice commissions, etc. To ensure justice for the victims of armed conflict, international law sets three different components for the aggressor state: legal responsibility, recognition of the truth, and compensation. These components are reflected in areas of general international law, such as human rights and humanitarian law, as well as in post-conflict policy initiatives implemented by international organizations, primarily, by the United Nations.
In 2005, approximately after fifteen years of negotiations, on December 16, 2005, the UN General Assembly adopted Resolution 60/147 on Basic Principles and Guidelines on the Right to a Remedy and Reparation for Victims of Gross Violations of International Human Rights Law and Serious Violations of International Humanitarian Law. Following Paragraph 18 named “Reparation for harm suffered” of Chapter IX of the Resolution, in accordance with domestic law and international law, and taking account of individual circumstances, victims of gross violations of international human rights law and serious violations of international humanitarian law should, as appropriate and proportional to the gravity of the violation and the circumstances of each case, be provided with full and effective reparation, which include the following forms: restitution, compensation, rehabilitation, satisfaction and guarantees of non-repetition.
There are a number of other legal acts obliging countries to compensate for the damage caused by military conflicts around the world. Thus, the International Covenant on Economic, Social and Cultural Rights of 16 December 1966, The Hague Convention for the Protection of Cultural Property in the Event of Military Conflict of 14 May 1954, European Cultural Convention of 19 December 1954, the UNESCO Convention Concerning the Protection of the World Cultural and Natural Heritage of 16 November 1972 and other international instruments establish provisions for the protection, study and use of historical and cultural monuments, as well as the protection of human cultural rights in general.
In August 2005, the UN Commission on Human Rights officially approved guidelines on legal and technical issues related to property restitution for refugees and displaced persons. These guidelines are called Pinheiro Principles. The Principles, named after Special Rapporteur on housing and property restitution Paulo Pinheiro, offers legal, administrative, and executive rules for the establishment and implementation of the property restitution process. The Principles accept the complexity of this process in the post-conflict period and recommend countries to use the restitution approach applied in Bosnia as an example and include procedures of property restitution in peace treaties. The Pinheiro Principles allow the remedy of compensation to be used when the remedy of restitution is not factually possible, or when the injured party knowingly and voluntarily accepts compensation in lieu of restitution. According to Article 36 of the annex to UN General Assembly’s Resolution on Responsibility of States for Internationally Wrongful Acts, the state responsible for an internationally wrongful act is under an obligation to compensate for the damage caused thereby, insofar as such damage is not made good by restitution.
The importance of establishing International Compensation Commissions
As the military conflict between Azerbaijan and Armenia is over, it is significant that the UN immediately establish a compensation commission to consider allegations of material damage to IDPs' property.
The UN has established a Compensation Commission to pay compensation for damages caused by parties of the Gulf War (war between Iraq and Kuwait from January 17, 1991, to February 28, 1991) to each other. Thus, considering that the scope of material damages caused by Armenia to Azerbaijan and the number of claimants exceeding one million, it is necessary to establish an international commission similar to the UN Iraq and Kuwait Compensation Commission for processing both property and infrastructure claims arising from military aggression. With the claims filed through the Commission, in 1990-1991, Iraq paid more than 50 billion US dollars in compensation for damaged caused to Kuwait's economy and its citizens.
Reparation and restitution practices in the post-war conflicts
World history has seen numerous examples of post-war compensation, reparation, and other types of reimbursement.
After the Franco-Prussian War, under the terms of the Treaty of Frankfurt (May 10, 1871), France was forced to pay 5 billion gold francs in war compensation for 5 years. The most interesting about the compensation was that the sum was similar to the amount defined by Napoleon for Prussia in 1807. Until the compensation was fully paid in September 1873, part of the German troops remained in France.
The Treaty of Versailles, signed after World War I, not only blamed Germany for the war but also demanded that the country pay 132 billion gold marks or about 269 billion US dollars in current value. The repayment of the compensation took 92 years. For paying the compensation, the United States lent money to Germany, and the countries that collected the compensation used the money to repay their loans to the United States. As a result, the United States became the largest beneficiary of this compensation.
There have also been various times of compensation after the Second World War. The Soviet Union annexed German territory east of the Oder-Neisse and expelled 12 million Germans.
In 1947-1956, France took control of the Saar protectorate with the intention of exploiting coal deposits and possibly permanently annexing them to France. The mines in Saar were under French control from the end of the First World War until 1935. France only had to relinquish control of the Saar on January 1, 1957.
The Netherlands annexed about 69 km2 of German territory in 1949, and it was returned to the West German government only in 1957. According to the agreement between Germany and Netherlands, signed on April 8, 1960, in The Hague, the lands were returned only after Western Germany agreed to pay the Netherlands 280 million German marks.
After World War II, the Allies seized German patents, copyrights, and trademarks worth more than 10 billion US dollars (1948).
Millions of Germans were forced to work for allies in camps, mining, harvesting, or industry for several years.
After the war, Greece received its share from Germany's compensation to the Allies under the 1946 Paris Agreement on Reparation, which was enforced by the Allied Reparation Agency. Greece has received about 25 billion US dollars in compensation in cash and industrial goods.
Considered as an interesting experience, Morgenthau Plan was a proposal to eliminate Germany's ability to wage war following World War II by eliminating its arms industry and removing or destroying other key industries basic to military strength. The plan included the removal or destruction of all industrial plants and equipment in the Ruhr. It was first proposed by United States Secretary of the Treasury Henry Morgenthau in a 1944 memorandum entitled Suggested Post-Surrender Program for Germany. While the Morgenthau Plan had some influence until July 10, 1947, on Allied planning for the occupation of Germany, it was not adopted.
At the Potsdam Conference, the Allies stipulated that Germany's standard of living should not exceed the average of its war-torn European neighbors. In 1932, living conditions in Germany were reduced to the existing standard of living. The first "level of industry" plan, signed in 1946, stated that German heavy industry was to be lowered to 50% of its 1938 levels by the destruction of 1,500 listed manufacturing plants.
In 1951, the Israeli government made a claim against Germany. According to calculations, since compensation had cost 3,000 US dollars per person (equivalent to 29.900 US dollars in 2020), Germany owed them 1.5 billion dollars (equivalent to 15 billion US dollars in 2020). They also figured that six billion dollars’ worth of Jewish property had been pillaged by the Nazis, but stressed that the Germans could never make up for what they did with any type of material recompense.
During two years after Germany's surrender, the United States has implemented a powerful program to bring together all of Germany's technological and scientific expertise, all patents, and take away many leading scientists (also known as Operation Paperclip). In his book named Science, Technology, and Reparations: Exploitation and Plunder in Postwar Germany, historian John Gimbel, claims that "intellectual compensation" (citing German scientists) is about 10 billion US dollars.
Following the Gulf War, Iraq adopted United Nations Security Council Resolution No.687. The United Nations Compensation Commission (UNCC) was established. States, companies, and people filed the Commission with claims worth 350 billion US dollars. The Committee approved the compensation claim of approximately 1.5 million successful claimants and paid 52.4 billion US dollars in compensation. By July 2019, 48.7 billion of this compensation was paid, leaving only 3.7 billion US dollars to be paid to Kuwait. The UNCC said that the preference of individuals over claims by states and organizations or corporations (legal entities) was "an important step in the evolution of the practice of resolving international claims."
Forms of compensation in Armenia’s current economic conditions
The United Nations Human Development Report 2000 estimated that the total economic damage caused to Azerbaijan by Armenia's occupation of Nagorno-Karabakh and seven adjacent regions was about 53.5 billion dollars. Current research shows that the damage is significantly higher than in 2000. In this regard, the Government has established a commission with the participation of local and international experts.
After the commission calculates the exact amount of damage caused by Armenia to Azerbaijan during 30 years of occupation, a claim will be filed with international courts against Armenia for receiving full compensation.
Since the amount to compensate for the damage is too high, the economy of Armenia cannot repay the total sum. Thus, in 2020, due to higher government military and health spending, the fiscal deficit of Armenia widened to 5.5 percent of GDP. Armenia's total public debt is 63.5 percent of GDP. Armenia's foreign exchange reserves amount to only 3.0 billion dollars, part of which is foreign liabilities.
As mentioned above, international law has a number of forms of compensation for damage caused by the aggressor country, including restitution, reparation, compensation, rehabilitation, satisfaction, and guarantees of non-repetition. In its current economic situation, along with funds, Armenia has to use other forms of compensation. For example, similar to the case of Germany after World War II, the part of Armenia’s lands can serve as compensation to Azerbaijan. In fact, it can be the right choice for Armenia. Thus, the return of historical Azerbaijani lands - Western Zangazur - may be the fairest choice in the face of history and international law. The remaining part of the compensation can be provided by giving Azerbaijan the right to use its natural resource deposits (precious metals, iron ore, etc.). On the other hand, Armenia must apologize to the Azerbaijani people from international tribunes, especially to the population that has suffered from 30 years of occupation (after World War II, Germany apologized to Israel).
To fulfill all these obligations, the impact of international organizations on the aggressor country is of utmost importance. The UN and other international human rights organizations must impose these obligations on Armenia and monitor their implementation. All these forms of compensation must be reflected in the peace agreement between Azerbaijan and Armenia.
Only a just peace agreement will lead to stability and sustainable development in the South Caucasus.