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Saturday, June 18, 2016 
Public statement on the Treaty of 1904 and free transit with Bolivia
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Regarding the allegations made by the Bolivian government about alleged abuses

committed by Chile against Bolivian cargo in the ports of Arica and Antofagasta, the

Ministry of Foreign Affairs of Chile states:

1. The government of Bolivia has been claiming that their right to pass through Chilean

territory requires a number of obligations to be fulfilled by Chile. Among them, Chile

would have to make all the necessary investments unilaterally in order to interface with

Bolivian cargo, which in recent years has been increasing. Such investments include

machinery, road widening and new infrastructure. There is no such obligation in the

Treaty of 1904.

2. Additionally, the Bolivian government has stated that the Chilean authorities should

not apply its rules regarding traffic and cargo safety, environmental protection, or drug

and human trafficking preventions. Cargo revisions performed by Chilean services are

non-invasive and do not exceed 1% of exported goods. Despite this, the government of

Bolivia has insisted that Chile stop its efforts to ensure the environmental protection of

the population, security of the people and fight against international crime.

3. Chile is committed to ensuring Bolivia ́s freedom of transit through its territory and

use of its ports. Freedom is guaranteed when it is not interfered with it. In addition to this

guarantee to free transit, Chile has made enormous efforts to provide its best facilities to

Bolivian cargo. Roads have been improved, a new border crossing is being built in

Chungará, spaces for cargo storage have been expanded and investments have been

made for better technology in port areas. However, the government of Bolivia wants

these facilities that Chile has granted to become obligations. This is not the case. Chile

is not obliged to make the investments that Bolivia demands.

4. Chile cannot accept that free transit would mean Bolivian and other cargo do not

have to comply with phytosanitary and environmental regulations, transportation and

work safety protocol, and anti-drug trafficking and smuggling efforts. Everything that

passes through Chilean territory, starting with Chileans themselves, are obliged to

comply with the rules of general application.

5. Regarding the specific allegations raised in recent days:

a. The government of Bolivia claims that an increase in rates at the ports of Antofagasta

and Arica affects its foreign trade as well as its right to freedom of movement granted by

the Treaty of 1904. It is demanding that Chile set the fees for its common port services

according to Bolivia's needs. It is necessary to make clear that a right of free transit is

not a right to free port services, nor that tariffs require the consent of Bolivia. None of

that derives from the Treaty of 1904. The government of Bolivia is invoking Article 6 of

the Treaty to argue that all measures taken by Chile relating to free transit or the use of

ports must be done in accordance with Bolivia's demands. That is a misinterpretation.

What Article 6 states is that the regulation of free transit shall be established by

agreements between the two governments. This cannot be extended to those matters

that do not relate specifically to free movement, including things like tariffs,

environmental regulations, labor laws, road safety, technical standards for vehicles, and

the like.

b. All in all, the fees charged by the port of Antofagasta to Bolivian cargo are lower than

those charged to other port users. Some fees have experienced very moderate

increases and still others have actually decreased in value, such as the fee for the use

of the ship dock, which went from US $2.15 in 2015 to US $ 2.11 per meter length in

2016. Far from discrimination, there exists preferential treatment.

c. The same is true of the tariffs that have increased in the port of Arica, which have an

average of 10.72%. Some of these rates for imported cargo have been readjusted since

2014. The government of Chile has attempted to reach a consensus with Bolivia

regarding a readjusted rate, but in the end the Port Services Administration of Bolivia

rejected the readjustment that it itself had originally proposed.

d. Bolivia claims the use of new technology for transporting minerals in the port of

Antofagasta is discriminatory. This new technology has made it possible to use "rotating

containers" or "rotainers" for the transportation of mineral concentrates from the site of

collection Portezuelo (located approximately 30 kilometers from the city of Antofagasta)

to the port. Environmental provisions require that mineral concentrates are not gathered

or stored in the city. Antofagasta is a city that has suffered the negative consequences

of mining and it is the obligation of the State to ensure the environmental quality of the

city and its population. The "rotating containers" allow for lower levels of airborne dust

and provide better services for the transportation of minerals. Thanks to this new

technology, the efficiency of the process of shipping Bolivian mineral concentrates will

be improved.

e. Bolivia demands that it be prohibited for Bolivian mineral to be stored in bulk in the

port of Antofagasta, even though Chile has large cargo spaces and the infrastructure for

handling bulk cargo. Bolivian minerals occupy 3.5 hectares on the grounds of

Portezuelo, space that is not available within the port area. Bolivian cargo that does not

constitute a health risk to the population and does not require excessive use of space is

currently stored within the port area, such as the ulexita that the Bolivian company

Copla exports. Chilean mineral concentrates that are regularly shipped by the Bulk

Mineral Shipping Terminal are subject to the same conditions as the Bolivian

concentrates. The exception is the mineral concentrations of Minera Sierra Gorda, a

company that was willing to invest $65 million dollars for the construction of a

warehouse that uses the latest technology for the environmentally safe collection of

mineral concentrates in a space that does not exceed 0.7 hectares. Therefore, there is

no discriminatory treatment on this matter.

F. Bolivia claims that Chile decided that it couldn't collect zinc concentrates near the

port facilities and has displaced Bolivian cargo to 35 kilometers, ostensibly to give

priority to the Chilean mineral and generating significant logistics costs to Bolivia. Bolivia

cannot expect to continue stockpiling zinc in the middle of the city, with obvious damage

to the health of the population. Moreover, when this environmental protection measure

was taken in 1998, it was discussed with Bolivia and accepted by its government.

g. Regarding Antepuerto Portezuelo, storage and collection costs have not been

increased since 1998. This site has the capacity to store 80,000 tons of material and is

an important site relating to the paving and construction of warehouses. Considering

that the Bolivian cargo enjoys a free stay of 60 days, it could store 480,000 tons of

materials in a year. Historically, the port of Antofagasta has transferred 300,000 tons of

material per year. However, it has become common for exporters to exceed the 60 days

of storage waiting for better mineral prices, which has obvious effects on the availability

of space for storage.

h. As for the alleged charges that are imposed on mixing Bolivian mineral cargo in

Portezuelo, Chile does not charge any tax, fee or duty on this activity. Bolivia must pay

for the labor and supplies required, and in no case is this referred to in the Treaty of

1904 or any other agreement between the two countries.

i. Bolivia's government argues that Chile is violating its obligation to grant free storage

for export cargo at the port of Antofagasta. Existing agreements provide 60 days of

storage free of charge to all Bolivian export cargoes in the port locations available for

this purpose. This is completely fulfilled.

j. Finally, the government of Bolivia said that strikes or work stoppages that have

occurred in Chilean ports constitute a violation of its free transit. Bolivia's government

claims that its right of free movement implies that Chile is obligated to prevent any strike

or work stoppage by Chilean dockers.

6. The free transit granted by Chile to Bolivia which has given it access to the sea for

over a century, does not mean that the State of Chile must forego its obligation to

safeguard the health of its population, care for the environment and regulation its port

sites.

7. The Government of Bolivia has consistently sought to ignore or renegotiate the

Treaty of 1904. The Bolivian government has put forth unfounded claims that can only

damage the will to work together to improve the free movement of Bolivia.