VZCZCXYZ0000
PP RUEHWEB

DE RUEHVB #0734/01 2960942
ZNR UUUUU ZZH
P 220942Z OCT 08
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC PRIORITY 8707
INFO RUEHBS/AMEMBASSY BRUSSELS PRIORITY 1018
RUEHLJ/AMEMBASSY LJUBLJANA PRIORITY 6435
RUEAIIA/CIA WASHDC PRIORITY

UNCLAS ZAGREB 000734 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL HR SI
SUBJECT: CROATIA SEES BRIGHTER PROSPECTS FOR RESOLVING 
BORDER DISPUTE WITH SLOVENIA 
 
¶1. (U) SUMMARY:  Zagreb is cautiously optimistic that Croatia 
can reach an agreement with Slovenia by the end of the year 
to take their unresolved border issues to arbitration, most 
likely at the International Court of Justice (ICJ) in The 
Hague.  The Croatia-Slovenia border commission has largely 
finished drawing up the legal documents that would be the 
basis for the arbitration.  All that remains is for both 
capitals to green light the case for arbitration.  Zagreb 
would like to resolve the bilateral dispute sooner rather 
than later and sees the early indications out of Ljubjana's 
likely new government as encouraging.  However, Slovenia's 
insistence on the legal concept of "ex aequo et bono" 
(according to the right and good) could still keep the matter 
from being taken to arbitration in the near-term.  END SUMMARY 
 
What Is At Stake 
---------------- 
 
¶2. (U) The main issue concerns the maritime boundary, which 
was never established between the two former Yugoslav 
republics, and Slovenia's claims to waters in Piran Bay. 
There are also several contested points along the land 
border, including along the Dragonja River in the Istria 
region, and in a few other mountainous areas between Sveti 
Martin and Hotiza, near the summit of Mt. Sneznik, and on a 
mountain ridge running from Sekulici, Croatia towards the 
village of Bregana.  None of the disputed points are of major 
economic or strategic significance. 
 
Bled Agreement Sets the Stage for the End Game 
----------------------------------- 
 
¶3. (U) In August 2007 at Lake Bled in Slovenia, Croatian 
Premier Ivo Sanader and former Slovenian Premier Janez Jansa 
agreed to take both land and border issues to arbitration at 
the International Court of Justice (ICJ) in The Hague for 
resolution.  The ICJ was considered a neutral compromise 
after Croatia rejected Slovenia's request to arbitrate the 
issue in front of the Badinter Commission and Slovenia 
rejected Croatia's request to arbitrate in front of the 
International Tribunal for the Law of the Sea in Hamburg. 
Jansa, however, failed to gain full support across the 
political spectrum in Slovenia for the ICJ as the venue for 
the arbitration.  The Bled Agreement also stipulated that 
other bilateral sore-points -- i.e., nuclear waste disposal 
at Krsko and deposits in the Ljubljanska Banka -- would be 
handled separately via bilateral agreements or other court 
proceedings. 
 
Border Commission Wraps-Up 
----------------------- 
 
¶4. (U) The two governments set up a bilateral border 
commission to clarify the legal terms and the scope of the 
arbitration, which has met three times in the past year, most 
recently in early October, and has finished its work. 
Throughout these meetings, Croatia has been insistent that 
the matter be taken to the ICJ.  The Slovenian position has 
been that the venue for arbitration could be either the ICJ, 
the Permanent Court of Arbitration in the Hague, or some 
other ad hoc international body of mediation. 
 
Capitals Mull Final Options 
------------------------- 
 
¶5. (SBU) These relatively minor border disputes have assumed 
greater significance in the context of Croatia's EU accession 
negotiations.  The Croatian media reported extensively on 
parting comments from out-going Slovene FM Dimitri Rupel, 
indicating that Slovenia would block EU negotiations on any 
chapter that included Croatian maps or references to the 
border.  There is presently cautious optimism in Croatia 
regarding the border dispute and a belief that Pahor and his 
foreign policy team will have a less antagonistic stance 
toward Croatia.  Croatian officials at both the Foreign 
Ministry and the President's Office have noted to EmbOffs 
their relief that, for the first time in nearly a decade, 
bilateral disputes between Croatia and Slovenia were not a 
campaign issue in the latest parliamentary campaigns in 
either Croatia or Slovenia.  The Croatian MFA is optimistic 
that the new government in Ljubljana, mostly likely headed by 
Borut Pahor, will support a final decision to take the 
dispute to the ICJ.  Sanader has emphasized that Zagreb is 
ready to see the matter arbitrated, and Pahor, for his part, 
has indicated that he would continue with the previous 
government's policies vis-a-vis Croatia, and suggested that a 
final decision could be made by Christmas. 
 
¶6. (U) Pahor has, however, insisted that the concept of "ex 
 
aequo et bono" be one of the criteria weighed by the 
arbitrary body in its judgment.  (NOTE: Ex aequo et bono 
(according to the right and good) is a legal term of art and 
refers to the power of the arbitrator to dispense with 
consideration of the law and consider solely what the 
arbitrators consider to be fair and equitable.  END NOTE.) 
ICJ governing statutes allow for the court to decide cases ex 
aequo et bono, but only where the parties agree to this 
principle in advance.  Up to the end of 2007, the ICJ has 
never decided such a case solely on this principle, but some 
legal scholars have argued that the concept is well suited 
toward disputes between parties in "a complex and long-term 
relationship."  Croatia has rejected this legal concept as a 
factor for consideration in the arbitration. 
 
¶7. (SB) COMMENT:  While Sanader and Jansa had a constructive 
relationship, much of Croatia's renewed optimism on this 
issue appears to come from seeing the back of FM Rupel. 
Given Pahor's comments on "ex aequo et bono", however, 
Croatia's effort to get this issue to the ICJ still has some 
ways to go.  END COMMENT. 
Bradtke