VZCZCXYZ0001
PP RUEHWEB

DE RUEHMU #0621/01 1741916
ZNR UUUUU ZZH
P 231916Z JUN 09
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC PRIORITY 4267
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS MANAGUA 000621 
 
SENSITIVE 
SIPDIS 
 
USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN 
3134/ITA/USFCS/OIO/WH/MKESHISHIAN/BARTHUR 
 
E.O. 12958: N/A 
TAGS: EIND EINV ECON NU
SUBJECT: NICARAGUAN NATIONAL ASSEMBLY PASSES COASTAL LAW 
 
REF: 07 MANAGUA 1265 
 
SUMMARY 
------- 

¶1. (SBU) Summary: The National Assembly unanimously approved a 
coastal law to regulate the use of Nicaragua's shoreline and 
maritime areas.  This final bill was drafted in close consultation 
with the private sector, which sought to protect private property 
rights and develop the tourism industry.  Some U.S. beachfront 
property owners are content with the law as it is written, but 
others are concerned that the Government of Nicaragua (GON) will 
interpret and enforce the legislation for the benefit of its allies. 
 End Summary. 
 
UNANIMOUS PASSAGE OF COASTAL LAW 
-------------------------------- 

¶2. (U) On June 4, the National Assembly unanimously approved a 
coastal law that provides a framework for environmental protection, 
public access rights, commercial activity, and property rights along 
the shoreline of any body of water in Nicaragua.  It took the 
National Assembly five years to pass the legislation because of 
private sector concerns that it would weaken property rights and 
stifle tourism investment (Ref A). 
 
MUNICIPALITIES TAKE ON ADDED ROLES 
----------------------------------- 

¶3. (U) The law states that municipalities are responsible for 
regulating the use of beachfront property, protecting public access 
rights, and granting concessions for the use of public land.  For 
coastal property along the Atlantic and Pacific Oceans, the law 
establishes environmental and public access requirements for the 
first 50 meters of shoreline, as measured from the high-tide mark. 
It recognizes beachfront property rights within this area, but gives 
municipalities zoning authority.  There is a five-meter setback, 
measured from high tide, for natural lakes, artificial lakes, 
rivers, and other bodies of water. 
 
COMMISSION FOR COASTAL DEVELOPMENT 
---------------------------------- 

¶4. (U) The coastal law establishes a Commission for Coastal Zone 
Development (CDZC) to provide technical assistance and advice to 
municipalities on coastal development and management and on 
concessions for use of public land.  The CDZC also coordinates the 
activities of the central government, municipalities, and the 
private sector to encourage the sustainable development of coastal 
areas.  The commission is chaired by the Nicaraguan Institute of 
Tourism (INTUR) and includes the Ministry of Environment and Natural 
Resources, the Ministry of Transportation and Infrastructure, the 
Nicaraguan Army, the National Institute for Territorial Surveying, 
the National Police, two designated municipalities, and the 
Federation of Nicaraguan Business Associations (COSEP).  The Council 
of the Autonomous Region of the North Atlantic Coast (RAAN) and the 
Council of the Autonomous Region of the South Atlantic Coast (RAAS) 
are also CDZC members when issues affect their coasts. 
 
PRIVATE PROPERTY RIGHTS PROTECTED 
--------------------------------- 

¶5. (U) The law recognizes ownership rights for beachfront property 
that has been acquired legally and registered with the Public 
Property Registry.  Landowners are protected so long as they have a 
title or deed issued prior to the 1917 Agrarian Reform Law, the 
first law that regulated use of shoreline property, or a title 
issued as a result of the 1987 Agrarian Reform Law.  Those with 
concession rights to public land prior to the passage of the law are 
to be given "consideration" when their leases come up for renewal. 
 
 
PUBLIC ACCESS RIGHTS 
-------------------- 

¶6. (U) The law protects historic access points that existed before 
the law was passed.  If there is no historic access point on private 
land, the CDZC, relevant municipalities, and the owner of the 
property will determine where to create an access point that will be 
10 meters wide.  If owners do not allow public access to beaches, 
the municipalities may fine them.  Public access rights are not 
required for land where the terrain is too difficult to traverse. 
 
 
CONCESSIONS 
----------- 

¶7. (U) Municipalities, in consultation with the CDZC, may grant 
concessions for commercial, residential, and tourism-related use of 
public land for up to 20 years.  In special cases, tourism projects 
may be granted a concession for 59 years.  Nicaraguans and foreign 
residents can apply for a concession.  Only one concession per 
entity may be granted.  All projects must present an environmental 
impact study, a business plan, and an estimate of employment 
generation.  Municipalities must compensate in cash if they cancel a 
concession without cause.  The National Assembly will draft 
implementing regulations to determine the amount of compensation. 
 
 
INDUSTRY FIGHTS FOR PRIVATE PROPERTY RIGHTS 
------------------------------------------- 

¶8. (U) The private sector played a proactive role in ensuring that 
the law protects property rights.  Throughout the entire legislative 
process, Nicaraguan and foreign landowners, including U.S. 
proprietors, were worried that the law would nationalize all 
shoreline property.  Aggressive lobbying convinced legislators that 
protecting private property rights was an important factor in 
attracting foreign investment and promoting the tourism industry. 
For instance, industry representatives persuaded legislators to 
limit public access rights to historic points rather than require 
points every 100 meters along the shoreline.  The new coastal law 
also leaves without effect all other previous laws that, if 
enforced, would have limited beachfront property rights. 
 
 
SOME U.S. INVESTORS PLEASED WITH THE LAW... 
------------------------------------------- 

¶9. (SBU) Some U.S. landowners and entrepreneurs expressed their 
satisfaction with the law as passed.  They explained that the law 
provided much-needed assurances for private property rights and 
would promote the development of the tourism industry.  Several 
entrepreneurs noted that prior to the passage of the law, 
uncertainty concerning private ownership rights scared away many 
U.S. investors who were interested in buying beachfront property. 
 
 
...WHILE OTHERS HAVE DOUBTS 
--------------------------- 

¶10. (SBU) Other U.S. landowners are concerned the GON will interpret 
and enforce the law to their detriment.  In particular, the law does 
not clearly address ownership rights for people who obtained 
property from municipalities and titles issued between 1917 and 
¶1970.  Turalu Murdock, Vice-President and Counsel of First American 
Title Insurance, said that legislators belonging to the Sandinista 
National Liberation Front (FSLN) insist that titles for property 
sold by municipalities to private parties are invalid because it is 
illegal to sell public land.  She explained that supplementary 
titles are also problematic because many of them were not properly 
registered in the Public Property Registry.  She recommended that 
landowners with supplementary titles work with the GON to ensure 
that their property is registered. 
 
COMMENT 
-------- 

¶11. (SBU) The new coastal law strikes a reasonable balance between 
environmental protection, on the one hand, and property rights and 
the development of the tourism industry on the other.  The passage 
of the law was a success for property owners and tourism investors 
who sustained a five-year lobbying campaign with the National 
Assembly to protect private property rights and ensure that it 
included no confiscatory language.  Despite this success, the FSLN 
remains resolute in overturning municipal sales of land and 
contesting titles issued between 1917 and 1970.  In many cases, they 
appear to seek possession of beachfront property for their own 
commercial and personal interests. 
 
CALLAHAN