US embassy cable - 04KATHMANDU846

C O N F I D E N T I A L SECTION 01 OF 03 KATHMANDU 000846 
 
SIPDIS 
 
STATE FOR SA/INS 
STATE ALSO PASS USAID 
LABOR FOR ILAB - VIVITA ROZENBERGS 
LONDON FOR POL - GURNEY 
NSC FOR MILLARD 
 
E.O. 12958: DECL: 05/02/2014 
TAGS: Maoist Insurgency 
SUBJECT: NEPAL:  MAOISTS TURN UP HEAT ON NGOS, AID AGENCIES 
IN SOUTHWEST 
 
REF: A. KATHMANDU 229 
     B. KATHMANDU 833 
     C. KATHMANDU 465 
 
Classified By: CDA JANET BOGUE.  REASON:  1.5 (B,D). 
 
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SUMMARY 
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1.  (C) According to NGO contacts, Maoists in five 
southwestern districts are increasing extortion demands and 
escalating pressure on local and foreign NGOs, including one 
U.S.-based NGO, and bilateral aid agencies to sign agreements 
with the so-called "Tharuwan People's Autonomous Government," 
declared by the Maoists on January 27.  Although no one has 
been hurt so far, offices of several NGOs that refused to 
comply with the Maoists' demands were bombed on April 27 and 
29; another was burned down on May 1.  The Dutch aid agency 
SNV is reportedly suspending operations in Nepalgunj because 
of Maoist threats.  Despite Maoist rhetoric lambasting 
U.S.-funded aid programs, no USAID-sponsored activity has 
been targeted in the five districts. The new push to require 
that foreign-funded NGOs and aid agencies clear their 
development programs through local Maoist "people's 
governments" may indicate that the insurgents are seeking 
ways to claim legitimacy and recognition for their various 
ethnic "autonomous" regions.   End summary. 
 
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TROUBLE IN THARUWAN BELT 
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2.  (C) According to Robin Needham, Country Director for CARE 
Nepal (protect), the local Maoist leadership in five 
districts in southwestern Nepal has intensified pressure on 
local and foreign NGOs, including CARE, and three European 
aid agencies to sign agreements with the self-proclaimed 
Maoist "autonomous government" in the region.  In addition, 
local Maoist commanders have increased their extortion 
demands on the agencies and organizations, reportedly 
pressing for 10 percent of project costs as a "tax."  In 
addition to CARE, the organizations targeted are ActionAid, a 
British NGO; DFID, the British aid agency; GTZ, the German 
aid agency; and SNV, the Dutch aid agency.  (Note:  Although 
CARE is a U.S.-based NGO, the particular project targeted by 
the Maoists is funded by European donors.  End note.) 
 
3.  (U)  According to NGO sources, the demands are made in 
the name of the so-called "Tharuwan autonomous regional 
government," which was declared by the Maoists on January 27. 
 (Note:  The Maoists declared nine "autonomous" regional 
governments--all but one associated with a particular ethnic 
minority--in different parts of the country in late January 
and early February.  End note.)  The purported Tharuwan 
regional government encompasses the five districts of 
Kanchanpur, Bardiya, Banke (where the Royal Nepal Army's 
Western Division is headquartered in Nepalgunj), Kailali and 
Dang, located along Nepal's southwestern border with India, 
where most of the population of the Tharu ethnic group is 
concentrated.  (Note:  The Kamaiyas, former bonded laborers 
who are among Nepal's most oppressed groups, are largely 
Tharu.  End note.) 
 
4.  (C)  CARE's Needham reported that since early April local 
Maoists operating in these five districts have made a 
concerted push to pressure donor agencies and organizations 
to apply to the "autonomous regional government" for work 
permits, to register with the "government" and to sign 
bilateral aid agreements with the "government."  As far as he 
knows, none of the agencies has complied with these demands. 
In addition, Needham noted, extortion demands have increased 
markedly to as much as USD 5,700 per agency.  In some cases, 
agencies have been threatened with vague but "serious 
consequences" for non-compliance.  In CARE's case, the Maoist 
caller phoning in the demand (who identified himself as the 
"NGO/INGO Coordinator"), asked for the funding to assist the 
newly founded "government" in "this difficult situation" as 
it established itself.  Referring the request to CARE 
headquarters would not be satisfactory, the caller indicated. 
 (Note: Many NGOs and some businesses deflect Maoist demands 
for money by claiming they lack the authority to make such 
decisions in the field and referring them to corporate 
headquarters.  End note.)  Needham said he has instructed all 
of his staff to listen politely if contacted by the Maoists, 
to note down carefully all subjects discussed and demands 
made, but not to commit to sign any agreements, register any 
projects or pay any "taxes."  GTZ has drafted guidelines for 
its staff to follow when confronted with the demands. 
Poloff's question as to whether the aid agencies had reported 
the threats and demands to local authorities was greeted with 
amusement. 
 
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POST-BANDH BOMBINGS 
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5.  (C)  According to Needham, the NGOs and aid agencies have 
complained to contacts with Maoist links about the local 
commanders' aggressive new style.  Following the complaints, 
the person who had been making the phone calls was replaced 
with another individual, who has persisted in making the same 
demands.  When foreign NGOs and aid agencies in Nepalgunj, 
including CARE, defied a local strike, or "bandh," called by 
the Maoists, they each received threatening phone calls 
demanding they remain closed during future bandhs or face 
"consequences."  (Note:  UN agencies appear to be exempt from 
such pressure.  When a Maoist called the local ILO office to 
complain that it was open during the recent bandh and was 
informed that ILO is a UN agency, he reportedly apologized 
and hung up.  End note.) 
 
6.  (C)  Needham said CARE offices in the southwest have not 
heard from the Maoists since the bandh (on or about April 
21), but other NGOs and agencies have.  On April 27 three 
Maoists were killed while setting a bomb at an office of the 
Lutheran World Federation (LWF) in Kailali (Ref B). On April 
29 suspected Maoists set off explosive devices at an office 
of the Dutch aid agency SNV and the NGO PLAN International in 
Nepalgunj and an office of CCS, an ILO partner, in Kailali. 
The explosions took place early in the morning before staff 
arrived and caused only minimal damage.  On May 1 the office 
of KPUS, a local NGO working with ILO, was burned down in 
Kailali.  A Maoist caller threatened SNV personnel with 
physical harm unless the agency closed down its operations. 
As a result, SNV has reportedly decided to suspend its 
operations in Nepalgunj for now. 
 
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THE AMERICAN ANGLE 
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7.  (C)  Despite the Maoist penchant for anti-US rhetoric, 
none of the projects targeted in these districts receives 
direct U.S. funding.  (PLAN receives some funding from USAID 
but not for its activity in Nepalgunj.  As noted in Para 2, 
the CARE project in Nepalgunj is funded by European donors. 
LWF receives no USG funding for its project in Kailali.)  In 
fact, Needham commented, CARE, which operates in 35 districts 
in Nepal and receives funding from a variety of donors, has 
never been directly challenged on the source of funding for 
individual projects.  Even more interesting, Save the 
Children -US, which maintains an office in Nepalgunj, has not 
been targeted by the "autonomous government" and reports no 
threatening phone calls or pressure to sign agreements. (On 
the other hand, as noted Ref C, SAVE has had problems in the 
southeastern district of Siraha.) 
 
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COMMENT 
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8.  (C) While NGOs, businesses and private Nepali citizens 
across the country regularly report receiving extortion 
demands from the Maoists, the concerted push to persuade NGOs 
and bilateral aid agencies to sign agreements, apply for 
"work permits" and register--indeed, to fulfill all the same 
requirements as with the Government of Nepal (GON)--seems 
limited, for now at least, to the five districts of the 
Tharuwan belt.  NGO representatives in this area describe a 
situation in which local Maoists operate with apparent 
impunity within district headquarters and larger cities and 
are attempting to replicate, at least in part, the internal 
structures of a parallel government. The leaders of the 
"autonomous government" in this area are plainly trying to 
gain legitimacy and income--and perhaps some credit for the 
development assistance provided by these agencies--by 
asserting authority over all activities in the region.  The 
agencies obviously believe it fruitless to report their 
problems to local GON authorities--even though the Army's 
Western Division is headquartered in Nepalgunj--and are 
developing their own policies and operating guidelines in 
response to the situation.   For whatever reason--whether 
poor intelligence about sources of funding, personal 
relationships with local staff of individual NGOs, or a 
calculated decision not to confront the U.S.--the Maoists so 
far have steered clear of U.S.-funded programs in these five 
districts. 
BOGUE