CHILE-PERU MARITIME BOUNDARY - ECONOMIC STAKES

C O N F I D E N T I A L SECTION 01 OF 02 LIMA 005037

SIPDIS

E.O. 12958: DECL: 11/27/2015
TAGS: ECON PREL CI MARR ETRD PBTS PINS PE
SUBJECT: CHILE-PERU MARITIME BOUNDARY - ECONOMIC STAKES

REF: A) LIMA 4662 B) SANTIAGO 2440

Classified By: Acting Economic Counselor Howell Howard. REASON: 1.4(b/d
)


1. (SBU) SUMMARY: Aside from national sovereignty, Peru's
main interest in the disputed waters at the Chile/Peru border
is the area's fishery. The approximately 14,600 square miles
of disputed seas are rich in anchovies, but less so than
further north, making the area probably more valuable to
Chile than Peru. GOP and industry contacts maintain that
Peruvian fishermen generally keep clear of the disputed area,
although small fishing boats do occasionally stray in the
disputed waters. GOP officials say that while there is some
economic value to the disputed area, political rather than
economic motives drive GOP's desire to set its sea border
with Chile as a southwesterly rather than a westerly line.
The area is not currently a hot prospect for oil or gas
discoveries. END SUMMARY.


2. (SBU) Peru's 1954 fisheries agreements with Chile provides
for dealing with stray fishing boats using a demarcation
latitude running west at a latitude of 18 degrees 21 minutes.
(Note: the 1952 maritime agreement between Chile, Peru and
Ecuador proclaims their 200-mile jurisdiction without
delineating borders between the three. End Note.) If the sea
border extended southwest from the coastal point of the
Peru/Chile land board, perpendicular to the inverted "v" made
by the Peruvian and Chilean coasts on both sides of the
coastal border point, the resulting wedge of sea, if extended
to the 200 mile frontier that Peru claims, would add
approximately 37,000 square kilometers of sea territory to
Peru. (Note: the actual sea border demarcation that Peru
proposes is a complicated calculation involving an arc from a
reference point in Chile to a point offshore from which a new
line to the 200-mile limit would be drawn. End Note.)


3. (SBU) The Humboldt Current flows up the South American
coast from Antarctica to the Peru/Ecuador border area. The
current's churning of coastal waters results in rich sea life
that fuels a Peruvian fishing industry that produces 12
percent of Peru's revenues, behind only mining and
remittances from Peruvians working abroad. According to NGO
and GOP sources, the current's interaction with winds makes
for good fishing along much of the Chilean coast for only
part of the year, while all along the Peruvian coast the
fishery is constant year round. The disputed wedge of sea
that Peru seeks is in the area with constant productive
fishing.


4. (SBU) Richard Inurritegui the president of the Peruvian
Society of Fisherman, told Econoff on November 9 that the
disputed wedge is a rich source of anchovies, with some
sardines, mackerel and tuna. Anchovy is the main species
fished in Southern Peru and Northern Chile; both it and
sardines have cyclical populations along the coast and
currently sardines are in decline. Much of the anchovy catch
is ground into fishmeal for animal feed, and there are
extensive poultry production facilities all along the
Southern Peruvian Coast to take advantage of the proximity of
fishmeal plants; much fishmeal is also exported, with China a
major importer.


5. (SBU) Inurritegui reported that Peru's central and
northern coasts produce far more anchovies (8 million metric
tons annually) than the southern coast (1 million). The
southern coast is still more productive than the Chilean
coast further south, and Inurritegui (and NGO contacts
separately) opined to Econoff that for this reason the sea
wedge is more important economically to Chilean than Peruvian
fishermen.


6. (SBU) Inurritegui noted that large company-owned Peruvian
fishing vessels (all members of his association) generally
stay away from the disputed wedge, and so do not have
specific information as to potential catches. However, the
fishing characteristics are the same, he said, as the area
north of the 1954 line ) right up to which Peruvian boats do
fish. Individually owned "artesanal" fishermen do stray from
time to time into the waters Chile claims, and there have
always been Chilean seizures of these boats. Inurritegui
noted that one of the main purposes of the 1954 agreement was
to institutionalize procedures for stray fishing boats found
in waters claimed by each country, inevitable because of
inadequate position finding equipment -- both at the time of
the 1954 agreement and today in the many artesanal small
boats. Inurritegui said that he was unaware of any
association members detained for fishing in the disputed
waters.


7. (SBU) Gustavo Navarro, Director of Hydrocarbons at the
Ministry of Mines and Energy, told Econoff on November 22
that the disputed wedge is not an area with expected
potential for gas or oil exploration. No oil companies have
expressed interest in signing contracts for exploration in
this region. While the Mollendo hydrocarbon basin runs
offshore from Arequipa southeast into the disputed area,
there have been few seismic surveys performed off the Tacna
Department coast just north of the disputed areas; it may be
worth exploring some day, but there is no reason at this time
to suspect that the area is a rich prospect.


8. (C) Despite the obvious economic importance of the
disputed wedge, the dominant consideration for claiming the
wedge appears to remain political. Vice Minister of
Fisheries Alfonso Miranda told DCM on October 19 that the
southwesterly line is the normal way of demarcating sea
boundaries used by the vast majority of sea borders
worldwide. David Lemor, Minister of Production (which
includes fisheries),told Econoff on November 8 that while
the disputed area is of great economic importance for the
fish products industry, Peru is more concerned with national
sovereignty over what it sees as its natural border. MFA
Director for North America Nestor Popolizio and his Chilean
desk officer said the same thing to Econoff on November 8.


9. (C) Popolizio also pointed out that Peru faces a similar
issue with its Ecuador border, another zone of rich
fisheries. While the pending Peruvian legislation to set out
its claimed maritime zone (Ref A) also includes the Ecuador
border, the latter is a less thorny issue with the government
of Ecuador, according to Popolizio. (Note: Ref A explains
the GOP's desire to ratify the UN Convention on the Law of
the sea as an important motivator of its current legislative
proposal to state its claim to the disputed wedge.
Production Minister Lemor noted to Econoff that it was
particularly important for Peru to formalize its claim to a
200-mile jurisdiction, since it was one of the first nations
to claim such a zone in the 1940's, along with Chile and
Ecuador. End Note.)
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