Peru and Chile's Maritime Rivalry Triggers Diplomatic Crisis Over Alleged Espionage

On Sunday, during the inauguration of Uruguayan President Tabare Vazquez, Chile's foreign minister met briefly with his Peruvian counterpart to discuss allegations that the Chilean military had paid three Peruvian naval officers to provide inside information about Peru's fishing industry.

Peru's government lodged an official complaint on February 20 and recalled its envoy in diplomatic protest after the country's military courts arrested two non-commissioned officers who will be tried on espionage charges. A third officer is also being investigated.

Treason in Peru unrelated to war can bring a sentence of up to 25 years.

Peruvian President Ollanta Humala warned that, if proven, the alleged espionage would be "very, very serious" for binational relations.

On Thursday, a spokesman for Chile's foreign ministry announced that the country had officially responded to Peru's complaint, saying that it "neither accepts nor promotes actions of espionage within or outside national territory."

Humala called the official response unsatisfactory.

Peru's Foreign Minister Gonzalo Gutierrez said that the country would formally reply to Chile in the upcoming days, noting that Chile's response was not what his government had hoped for. He did, however, pledge that the diplomatic rift wouldn't imperil trade between the two countries, which has grown close in recent years.

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Chilean officials have accused Humala of creating "an absolutely artificial and pointless conflict" and inflating the claims of espionage for political gain.

"We aren't escalating anything," Gutierrez said. "We are simply reflecting on an event that has occurred — an act that has been probed."

The governments of Peru and Chile have been embroiled in occasional spying spats for decades. In 2009, Peru ordered the arrest of two Chilean military officers over similar allegations of espionage.

The latest espionage scandal threatens to disrupt ties between the two historic enemies that were just beginning to warm, after years of disagreements stemming from the nineteenth century War of the Pacific, in which Chile annexed large stretches of Peruvian and Bolivian territory.

In January 2014, the two countries agreed to abide by a landmark ruling redefining the countries' aquatic borders, ending a dispute started in 1986 over maritime borders. The International Court of Justice (ICJ) awarded Peru fishing areas in the Pacific Ocean that had been under Chilean control, although the final resolution reduced Peru's demands for aquatic territory.

Implementation of the ruling is pending because the geographical coordinates of the new maritime border have yet to be bilaterally determined and presented to the United Nations. Gutierrez said the spying charges could stall progress on delivery of the final coordinates.

Peru and Chile are the world's biggest fishmeal producers, harvesting areas off of their coastlines that are abundant in anchovy, mackerel, and other species used in the production of fishmeal, which is used as feed and fertilizer.

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The Peruvian naval officers are suspected of allegedly selling classified information about Peru's fishing industry to Chilean marine officers from 2005 to 2011. Their frequent trips abroad raised suspicion.

"The practice was systematic in the last decade, with Chile reaching out to subordinate officers to access information," Oscar Vidarte, an international relations professor at the Pontifical Catholic University of Peru, told VICE News. He noted that Chile's government might have had no knowledge of the alleged conspiracy, which could have involved rogue intelligence operatives.

"Thirty years ago this would have produced far greater and more serious actions and reactions from the countries," he said. Given their close association today, it suits neither country to allow passions to get out of hand.

Chile and Peru have $13 billion and $7 billion respectively worth of cross-border investment, concentrated in retail and tourism, according to the countries' joint chamber of commerce. Peru's trade ministry reported that bilateral trade grew from $500 million in 2006 to $2.8 billion in 2014. The countries are economically interlocked through large-scale investments and trade blocs like the Pacific Alliance, which includes Mexico and Colombia.

Migration flows have also cemented binational ties. An estimated 5,000 people cross the border at the sister cities of Tacna and Arica each day.

"As serious as this latest episode might be, it's not going to derail the relationship or put things off course, because there's an enormous amount at stake," Michael Shifter of the Inter-American Dialogue, a Washington think-tank, told VICE News.

That said, the resurfacing of tensions from the countries' fractious past has obviously strained their present relationship.

"The way that both governments dealt with the court decision was reassuring, and they deserve credit for it, but it didn't mean the mistrust disappeared," Shifter said.

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Paz Zarate, a Chilean international law expert who worked as an independent consultant in the 2014 ICJ ruling, told VICE News that the degree of integration between the two countries would limit any escalation.

"Prudence advises it be low-key," she said, referring to the official reaction over the charges.

Domestic issues have also been a distraction. Chile's President Michelle Bachelet is under fire following her son's resignation from a government charity amid accusations of influence peddling. Her country is also preparing to fight Bolivia and the ICJ over a separate ruling on negotiations for sea access.

In Peru, meanwhile, the spying allegations have helped dispel months of internal political discord, providing an occasion for the country's squabbling political leaders to rally together.

President Humala has the backing of less than one in five citizens, a recent poll revealed, and his ruling Peruvian Nationalist Party recently lost their majority in congress after several lawmakers defected. The country's National Directorate of Intelligence has also been temporarily closed after allegations that it snooped on the political opposition, and Peru's first lady is under investigation for embezzlement.

Follow Alex Pashley on Twitter: @A_Pashley