VZCZCXRO6644
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHVB #0122/01 0331556
ZNY CCCCC ZZH
P 021556Z FEB 07
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC PRIORITY 7237
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

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