CROATIA AND SLOVENIA AT ODDS OVER MARITIME

C O N F I D E N T I A L SECTION 01 OF 02 ZAGREB 000122

SIPDIS

SIPDIS

STATE FOR EUR/SCE, EUR/NCE

E.O. 12958: DECL: 02/02/2017
TAGS: PREL EWWT ENRG ECON HR SI REGIONAL ISSUES
SUBJECT: CROATIA AND SLOVENIA AT ODDS OVER MARITIME
BOUNDARY, AGAIN


Classified By: Econ Off Nicholas Berliner. Reasons 1.4 b and d.


1. (C) Summary: The long-standing dispute between Croatia
and Slovenia over their maritime boundary flared up this week
when the GOC renewed a 2001 concession to its national oil
and gas company INA for exploration in the Northern Adriatic.
With rhetoric that was more heated than usual in this
perennial point of contention between the two neighbors,
Slovenia accused Croatia of making claims against its
territory and, by extension, European Union territory. The
GOC rejected these charges, maintaining that Slovenia is
making claims against Croatian territory that are unfounded
under international law. Croatia has long sought
international arbitration while Slovenia maintains that this
is an issue of Yugoslav succession that should be resolved
bilaterally. This issue has taken on political proportions
in both countries far in excess of its practical implications
with each side trying to internationalize the problem. This
is not a crisis, but neither is a resolution of this on-going
dispute anywhere in sight. (See Embassy Zagreb's classified
intranet for maps of the disputed area:
http://www.state.sgov.gov/p/eur/zagreb/index. cfm) End
Summary.

Background
--------------

2. (U) The latest episode in the ongoing dispute between
Slovenia and Croatia over their maritime boundary boiled over
on January 26 when Slovenia reacted via diplomatic note to
Croatia's renewal of a 2001 concession for gas exploration in
the Northern Adriatic. The 9,232 square km concession is
roughly adjacent to Croatia's Istrian coast, with its western
edge extending along what Croatia considers to be the
boundary of its exclusive economic zone with Italy's.


3. (U) This area was defined from a point known as T-5,
marking the northernmost extension of the open sea in the
Adriatic following a 1968 agreement between Italy and the
former Yugoslavia. T-5 was established as the northernmost
point that was equidistant from the Italian and Yugoslav
coasts at 12 nautical miles, therefore marking the limits of
each state's territorial waters. Points north of T-5 were
also demarcated at that time and, in the Croatian view,
subsequently became the boundaries between Italian
territorial waters on one side and Croatian and Slovenian
territorial waters on the other.


4. (U) INA's concession thus covers an area that Croatia
considers part of its exclusive economic zone, as well as
Croatian territorial waters in the Northern Adriatic.
Slovenia argues that as a Yugoslav successor state its
territorial waters should be contiguous with the open sea and
has tried unsuccessfully over the years to reach an agreement
with Croatia on their respective maritime boundaries.


5. (U) Croatia maintains that Slovenian assertions that only
the land borders between the republics of the former
Yugoslavia were agreed are incorrect, noting that the two
republics divided maritime policing responsibilities in the
Piran Bay. Nevertheless, a Slovenian government decision of
1993 laid claim to the whole of the Piran Bay. The land
border in that area, although now in dispute because it has
an impact on the maritime boundaries, is marked by the river
Dragonja, which enters the bay roughly in its middle. The
Croatian position is that, by international law and custom,
maritime boundaries are determined by the extension of the
land border to the point where it meets the limits of a
country's territorial waters (i.e., 12 nautical miles, but
less in this case due to the agreement between Italy and
Yugoslavia). In the Croatian view, this would divide the
Piran Bay equally between Croatia and Slovenia. The issue
has become further complicated since 1993 as Slovenia and
then Croatia laid claim to overlapping areas of the Adriatic
sea and the epicontinental shelf with declarations of
protected fishing and ecological zones. (See Embassy
Zagreb's classified intranet at (See Embassy Zagreb's
classified intranet for maps:
http://www.state.sgov.gov/p/eur/zagreb/index. cfm) for maps of
the disputed area.) The INA concession thus falls squarely
within waters south of the Croatia-Slovenia border that
Slovenia considers part of its "protected ecological zone"
and that Croatia considers its exclusive economic zone and
territorial waters.

Croatian View of Latest Row
--------------

6. (C) EconOff met on Feb 1 with Adreja Metelko-Zgombic,
Croatian MFA Legal Advisor, to hear the GOC position on the
latest dispute with Slovenia. Metelko-Zgombic said this
issue has become emotionally and politically charged to the

ZAGREB 00000122 002 OF 002


point of making its resolution difficult. She said that, in
the Croatian view, Slovenia has no basis under international
maritime law to support its claims of a right to link its
territorial waters to the open sea. As far as the GOC is
concerned, the only point open to interpretation is the
border within the Piran Bay, but this has no bearing
whatsoever on the question of Slovenia having contiguous
access to the open sea. She said Croatia was a successor
state to the 1975 Osimo Agreements with Italy that codified
the 1968 demarcation and that Slovenia claiming a right of
historical access to the open sea was tantamount to Serbia or
Macedonia making that claim, since they also technically had
access to the sea as republics of Yugoslavia. As far as the
GOC is concerned, Slovenia has unrestricted access to the
open sea through Croatian territorial waters.
Metelko-Zgombic also pointed out that under International
Maritime Organization agreements regulating shipping in the
Adriatic, ships sail north along the Croatian side to both
Slovenian and Italian ports, which Italy has never cited as
being detrimental to its interests.


7. (C) Metelko-Zgombic said that Slovenia has been
emboldened by its 2004 EU membership and is clearly
threatening to slow Croatia's EU accession now to win
concessions on this issue. She noted that Slovenia laid
claim to the continental shelf in 2004, and declared its
fishing zone that overlaps with Croatian territorial waters
in 2006. She added that Zagreb sees Slovenian politics as a
complicating factor, with nationalist parliamentarians
forcing Ljubljana's hand. She said that FM Rupel has
acquired a reputation within the GOC as an agitator in this
issue.


8. (C) The GOC believes this issue impedes progress on the
other outstanding border issues, as well as the dispute over
the bankruptcy of the former Ljubljanska Banka and
disagreements over the jointly-owned Krsko nuclear power
plant. Metelko-Zgombic revealed that during the 2000-2003
government of former Croatian PM Ivica Racan, when Croatian
negotiators tabled a proposal to give Slovenia a corridor to
the open sea, the Slovenian side had indicated that
Ljubljanska Banka and Krsko could be resolved. Note: The
Racan government quickly disavowed what it said were simply
"talks" after it became apparent that there was no chance the
Croatian parliament would accept an agreement ceding
territorial waters to Slovenia.

Comment
--------------

9. (C) The GOC clearly feels under significant pressure over
this issue, given its EU candidacy, which the fact of the
Slovenian EU presidency in the first half of 2008 only
compounds. At the same time, Croatian politicians face
elections in 2007, making any kind of rational dialogue on
this issue exceedingly difficult. The Croatians believe that
international law is clearly on their side, which accounts
for their repeated demands for international arbitration and,
in their view, also explains Slovenia's refusal to take the
dispute to an international forum for resolution, and its
efforts to bring political pressure to bear. Despite
Zagreb's nervousness, overall relations between the two
countries have not been adversely affected by this dispute.
In fact, Croatian MFA Assistant Minister for Europe Neven
Pelicaric told DCM on February 2 that Slovenia has so far
been "mostly helpful" to Croatia on EU and NATO accession.


10. (U) Embassy Ljubljana has reviewed this cable.
BRADTKE