BORDER DISPUTE WITH NICARAGUA THREATENS TO FLARE

C O N F I D E N T I A L SECTION 01 OF 02 SAN JOSE 001746 SIPDIS E.O. 12958: DECL: 08/03/2015 TAGS: PBTS PREL PINR ETRD CS NU SUBJECT: BORDER DISPUTE WITH NICARAGUA THREATENS TO FLARE UP AGAIN; COSTA RICA SEEKS ARBITRATION REF: A. 02 SAN JOSE 2260 ¶B. 02 SAN JOSE 2589 ¶C. 02 SAN JOSE 2818 Classified By: Charge Frederick J. Kaplan for reasons 1.4 (B) and (D). SUMMARY -------------- ¶1. (C) In an August 1 meeting with Charge and acting DCM, Foreign Minister Roberto Tovar said that the dispute over the navigational rights of Costa Rican police on the San Juan River threatens again to disrupt relations between Costa Rica and Nicaragua. Tovar noted that the three-year "truce" on the matter was about to expire and that Costa Rica, to preserve its rights, would have to either bring a case before the International Court of Justice (ICJ) or convince Nicaragua to agree to arbitration of the matter. The GOCR, Tovar said, far preferred the latter course, which it regarded as "less confrontational." Tovar asked that the USG help persuade Nicaragua that an arbitrated resolution of the issue was in the interest of both parties. End Summary. IMPLICATIONS FOR CAFTA-DR -------------- ¶2. (C) Foreign Minister Roberto Tovar called Charge to his office on August 1 to discuss, he said, "Nicaragua and CAFTA." Charge was accompanied by acting DCM and Tovar by Costa Rican Ambassador to the OAS Javier Sancho. Tovar explained the relationship between the Costa Rican-Nicaraguan border dispute and the U.S.-Central American-Dominican Republic Free Trade Agreement (CAFTA-DR) in the following manner: If Costa Rica asserts its rights to have its police navigate the San Juan River, the Nicaraguan National Assembly is liable to retaliate by slapping a 35 percent tariff on Costa Rican goods, a violation of CAFTA-DR (assuming that both countries ratify the treaty). Relations between Nicaraguan President Bolanos and Costa Rican President Pacheco and between Nicaraguan Foreign Minister Norman Caldera and Tovar are excellent, and Tovar wants to use the existing good will in the executive branches of the two governments to find a face-saving and permanent solution to the San Juan problem. COSTA RICAN VERSION OF HISTORY -------------- ¶3. (U) Tovar traced the history of the issue to the 1858 Treaty of Canas-Jerez. The treaty granted to Costa Rica the territory that now constitutes the northwestern portion of the country and to Nicaragua sovereignty over the San Juan River (both banks). Approximately 80 miles of the 192-mile-long Nicaragua-Costa Rica boundary runs along the right bank of the San Juan from the Caribbean Sea upstream to a point three miles below Castillo Viejo. The treaty grants to Costa Rica perpetual free navigation "with the object of trade." Disagreements soon arose because Nicaragua contended that Costa Ricans could navigate the San Juan only to move merchandise, while the Costa Ricans claimed also the right to commercial travel of people. In 1888, according to an arbitral award of U.S. President Grover Cleveland, Costa Rica could not put warships on the river but could deploy revenue service cutters "for the protection of commerce." ¶4. (SBU) Today, Tovar said, the GOCR has a need to use the river for the transport of its local police, who usually carry side arms. They are not carrying out a law enforcement function on the river, which is admittedly Nicaraguan territory, but are simply using river boats as a form of transportation from post to post. (There are few roads in the area.) Nicaragua, however, requires Costa Rica to request authorization, which Costa Rica believes it doesn't need. Costa Rica was prepared to take the matter to the International Court of Justice (ICJ),but on October 23, 2001, then-Nicaraguan President Aleman filed a motion with the ICJ alleging that the court lacked jurisdiction over disputes involving treaties signed by the GON before 1901. The GOCR had one year to answer the motion. If it failed to do so, it would forfeit the case. ¶5. (C) In August and September 2002, Tovar and Caldera began working together to find a way to avoid a court battle. Because of the difficulty of devising a permanent solution in a short amount of time, the GOCR proposed a "truce," which preserved the right of Costa Rica to seek ICJ intervention, but only after three years. During this period, the GOCR and GON intended on their own to work out their differences regarding the San Juan River. Negotiations were hard fought, and the agreement went through 40 drafts but was finally signed by the GOCR and GON on September 26, 2002. TOVAR SEES NO CHANCE FOR NEGOTIATED SOLUTION -------------- ¶6. (C) It soon became clear, according to Tovar, that a "political solution" to the San Juan dispute was impossible. If there is one thing that all Nicaraguans agree on, Tovar said, whether they are Sandanistas or Somozistas, it is that ceding anything to Costa Rica with regard to the San Juan is treason. At the same time, Costa Ricans cannot accept the status quo. Therefore, having a third party decide, Tovar believes, is the only way out. Tovar worries, however, that a full-blown court case in the ICJ would inflame passions in both countries and ultimately leave one country embittered. He believes the mere filing of a Costa Rican petition in the ICJ would provoke a highly nationalistic Nicaraguan National Assembly and affect nearly USD 300 million in trade between the two countries. ¶7. (C) Tovar's solution to the problem is arbitration, which he deems "less confrontational" than going to court. He thinks the arbitration could be conducted in the ICJ itself or perhaps the Permanent Court of Arbitration. He did not warm to Charge's suggestion of the OAS, which he seemed to think insufficiently authoritative. The problem now is convincing the GON. Tovar said he was sending Ambassador Sancho to Managua in ten days to broach the subject with Nicaraguan MFA adviser Mauricio Herdocia whom both Tovar and Sancho believe is solid and completely trusted by Minister Caldera. CALL FOR U.S. HELP -------------- ¶8. (C) Tovar asked that the USG use its influence with the GON to help persuade the GON of the wisdom of an arbitrated resolution of the issue. The alternative is the "total-warfare" atmosphere of the courtroom, which will not serve the interests of either country. Tovar harked back to CAFTA-DR, noting the intention of the parties of the treaty to break down barriers between member countries and to avoid conflict. Charge responded that he would report fully to Washington. COMMENT -------------- ¶9. (U) Tovar is not the only one in Costa Rica worrying about the San Juan. During a breakfast with tourism industry leaders on July 27, Oscar Arias, the front-runner in the February 2006 presidential election, said: "I hope I'm mistaken, but there seems to be a very big possibility that this controversy (San Juan) will re-emerge. I hope that relations between the two countries don't deteriorate. I'm going to pray that they don't. I would like our differences not to increase so that it does not become necessary for either party to resort to international agencies to sort out this small conflict." ¶10. (C) Costa Rica and Nicaragua squandered most of the three years allotted for finding a negotiated solution to the San Juan controversy. Only in the last few months have there been quiet, low-key, and almost casual discussions between the countries about the San Juan. The first serious strategy meeting on the subject in the Costa Rican MFA since the agreement of 2002 was the very morning of our August 1 meeting and included Tovar, Sancho, and MFA advisers Sergio Ugalde and Arnoldo Brenes. Their decision was essentially to wash their hands, say it's impossible and too late to negotiate, and the matter needs to be turned over to someone else (an arbitrator). Three years ago (reftels),Tovar was singing a different tune. We were skeptical then, and, unfortunately, time has proved us right - - negotiations have gone nowhere, in part because they never got started. KAPLAN