CROATIA INITIALS AGREEMENT ON PLOCE PORT AND NEUM (2ND VERSION)

( Editorial: --> 9476 ) ZAGREB, Sept 10 (Hina) - Croatia on Thursday initialled an agreement on the use of its southern port of Ploce by Bosnia- Herzegovina and unobstructed passage through Neum, a coastal town on Bosnian territory which separates Dubrovnik from the rest of Croatia. The agreement does not threaten Croatia's sovereignty in Ploce, said Hrvoje Sarinic, the Croatian President's chief-of-staff. The document, titled "The Agreement on Free Passage Through the Territory of the Republic of Croatia In and From the Port of Ploce and Through the Territory of Bosnia and Herzegovina In Neum", was initialled by Sarinic and Economy Minister Nenad Porges on the Croatian side and special US envoy Richard Sclar and Deputy High Representative in Bosnia-Herzegovina, Jacques Klein, on the other. "The agreement in no way questions Croatia's sovereignty," Sarinic said following the initialling procedure. Until today, the issue of Croatia's sovereignty has been the main stumbling block in the Croatian-Bosnian negotiations on the Ploce port. The agreement initialled today is part of the agreement on special relations between Croatia and the Federation of Bosnia-Herzegovina and it will certainly be part of a general agreement on special relations envisaged by the Washington and later Dayton agreements, Sarinic said. Following its initialling, the document will be considered by the Croatian Government and the Croatian National Parliament and "it will definitely be signed after the announcement of election results in Bosnia-Herzegovina", he added. Porges, the chief Croatian negotiator regarding the status of the Ploce port, said that this agreement did not threaten Croatia's sovereignty in that it would offer "a portion of its territory for the development of a free zone for another country". Responding to journalists' questions regarding the nature of the agreement, which still needs to be completed, Porges denied that Croatia intends to lease a portion of the Ploce port to BH. "There is no question of leasing not one centimetre of Croatian territory," he said. According to the Croatian Economy Minister, the issue is of a free zone in Ploce's port which would be founded on Croatian laws and the contractor would be the port administration. "The concept is based on Croatian legislation on setting up a free zone within the Ploce port... the port administration would request from the Croatian government and hence be granted a concession to set up the port zone," Porges said. The solution to this issue is based entirely on commercialism and will economically benefit Croatia while BH will be allowed access to the sea, Klein said. Sclar said that the United States believed that this agreement was beneficial for Croatia and Bosnia-Herzegovina as well as for the stability of the Balkans. According to him, this was an economic and business agreement which would benefit both sides. Minister Porges said that the initialised document represented the text and contents of an agreement which was yet to be formulated but that both sides were very close to finalising negotiations which had continued for a number of years regarding the status of the Ploce port. This document, according to Porges, ensures Croatia's strategic interests for free passage through parts of Bosnia-Herzegovina's territory on the Adriatic coast in Neum. Porges said that both Croatia and Bosnia-Herzegovina foresaw the possibility of disagreement before the final completion and signing of an agreement. "During the transition period, it is foreseen to include certain arbitration mechanisms with the International Tribunal for the Law of the Sea as well as other institutions, if both sides should not agree. I believe that this would be necessary in order to avoid any misunderstandings in the future," Porges said. Bosnian Presidency Chairman Alija Izetbegovic already initialled the document on Wednesday, which followed years of unsuccessful talks between Croatia and Bosnia-Herzegovina and finally resolves the question of the status of the Ploce port as well as free passage through Neum. Croatia and Bosnia have been negotiating on Ploce and Neum since the signing of the Washington agreements in 1994. Documents adjusted at that time included an agreement on passage through the Neum municipality and an agreement guaranteeing sea access through Ploce for the Croat-Muslim Federation. These agreements were signed in a package also including an agreement on confederal links between the Federation and Croatia. The latter was however brought into question following the signing of the Dayton peace agreement at the end of 1995. The US entered the negotiations last year, when its representative suggested that a free zone in Ploce be organised in line with Federation laws. Croatia however rejected the US proposal, pointing out to the inviolability of Croatian sovereignty. The Federation is currently using the Ploce port in line with a temporary agreement signed in Zagreb in May 1996. The agreement initialled today had been agreed on at last week's talks in Dubrovnik. (Hina) sp jn /mbr 101705 MET sep 98