US embassy cable - 04KATHMANDU866

C O N F I D E N T I A L SECTION 01 OF 03 KATHMANDU 000866 
 
SIPDIS 
 
DEPT FOR SA/INS, LONDON FOR POL/GURNEY, NSC FOR MILLARD 
 
E.O. 12958: DECL: 05/05/2014 
TAGS: PGOV, PTER, PHUM, PREF, EINV, NP, U.S-Nepali Relations 
SUBJECT: NEPAL: DAS CAMP MEETS WITH PRIME MINISTER AND 
FOREIGN MINISTER 
 
REF: A. KATHMANDU 591 
     B. KATHMANDU 845 
     C. 03 KATHMANDU 2501 
 
Classified By: Charge d'Affairs Janet Bogue for Reasons 1.5 (b,d). 
 
1. (C) Summary.  In separate meetings with Prime Minister 
Surya Bahadur Thapa and Foreign Minister (Dr.) Bekh Bahadur 
Thapa on May 5, Deputy Assistant Secretary for South Asia 
Donald Camp stressed the importance of human rights and the 
restoration of a democratic government to continued USG 
support to the Government of Nepal.  DAS Camp was accompanied 
by CDA Bogue.  Both ministers thanked DAS Camp for the USG's 
past support, especially during the 61st session of the UN 
Commission on Human Rights in Geneva, and reiterated their 
government's commitment to human rights and democracy. 
Agreeing with the need for a more representative government, 
FM Thapa asserted that the Cabinet is trying to facilitate 
dialogue between the King and political parties.  PM Thapa 
emphasized several times that political pressure from India 
is critical to persuading the Maoists to return to 
negotiations.  DAS Camp and the Foreign Minister also 
discussed the Bhutanese refugees, as well as the contractual 
dispute between Panda Energy and the Nepal Electricity 
Authority over the Bhote Koshi hydropower plant.  End Summary. 
 
------------------------------- 
Human Rights: GON Committed, 
But Donor Pressure Too Public 
------------------------------- 
 
2. (SBU) Prime Minister Surya Bahadur Thapa opened the 
meeting by thanking Deputy Assistant Secretary for South Asia 
Donald Camp for participating in the Nepal Development Forum 
May 5-6.  He expressed appreciation for USG development and 
security assistance, which he described as critical to his 
government's efforts to combat Maoist insurgents and improve 
the lives of its citizens.  DAS Camp emphasized that the USG 
is committed to assisting the Government of Nepal (GON) in 
its struggle against the insurgency.  That said, reports of 
human rights abuses by GON security forces and the ongoing 
conflict between the Palace and democratic political parties 
could undermine continued support for the GON in Congress, in 
the U.S. Government and among the American public, he warned. 
 Citing the Prime Minister's March 26 statement on human 
rights (Ref A), he urged its timely implementation.  The PM 
assured DAS Camp that the GON "is making all efforts to 
observe human rights at every level." 
 
3. (SBU) Both the Prime Minister and Foreign Minister thanked 
the USG for its recent support of the GON during the 61st 
Session of the UN Commission on Human Rights in Geneva. 
Although the U.S., unlike other donors, had not made a public 
statement during the Nepal Development Forum on Nepal's human 
rights record, the U.S. and other donor countries' intentions 
are aligned, Camp explained to both the PM and FM.  FM Thapa 
agreed that the message from all sides has been the same, 
whether conveyed privately or publicly.  He complained, 
however, that recent pronouncements made by a group of donor 
countries (not including the U.S., India or China) sought to 
intervene inappropriately into Nepal's domestic affairs. 
 
4. (C) FM Thapa admitted that the GON is faced with 
challenges on human rights.  He characterized the 
institutional relationship between the civilian authorities 
and the Royal Nepal Army (RNA) as " inadequate and 
difficult."  When the Ministry of Defense sends an inquiry to 
the army, the RNA usually responds with "we're too busy 
fighting the insurgency," he said.  Second, Thapa opined that 
the "radical left" in Nepal is very well organized and is 
using human rights issues to embarrass the GON without 
offering constructive suggestions.  Thapa noted that the GON 
had negotiated with the UN Commission on Human Rights a 
technical assistance package to bridge the legal and 
institutional gaps, but worried that UNCHR lacks the 
resources to provide the assistance without relying on 
bilateral sources, who bring their own biases to the table -- 
something the GON would prefer to avoid. 
 
--------------------------------- 
Political Stalemate and Elections 
--------------------------------- 
 
5. (SBU) Since the tenure of the most recent Parliament has 
already expired, fresh national and local elections are the 
"only political solution" to the current impasse, the PM 
asserted.  King Gyanendra has committed to holding elections 
within one year, and pre-poll planning and preparation are 
moving ahead.  In an effort to resolve the stalemate, the 
King has met with the leaders of all major political parties 
except the Nepali Congress and the Communist Party of Nepal - 
United Marxist Leninist (UML), Thapa reported, adding that he 
is confident that even these two hold-outs will agree to meet 
the King "soon."  (King's comments to Camp and Charge 
provided septel.) 
 
6. (C) FM Thapa, on the other hand, believed that a 
broad-based government must first be established, followed by 
return to dialogue with the Maoists and then elections.  In 
order to facilitate a solution to the current political 
impasse, the Cabinet has decided to maintain a constructive 
dialogue with the political parties.  FM Thapa explained that 
the May 3 arrest of party leaders (Ref B) was due to credible 
evidence that the Maoists were trying to infiltrate the 
protests in order to discredit the government and incite 
public opinion against the King.  All party leaders were 
informed privately prior to the arrests, he claimed.  FM 
Thapa pointed out that the GON has agreed to lift the ban on 
public gatherings in order to facilitate discussions between 
the King and political parties.  However, the Cabinet would 
not agree to the parties' other demand that the ministers 
resign since this would "put the King in a difficult 
position." 
 
--------------------------------------------- ---------------- 
GON Open to Dialogue with Maoists, But Must Maintain Pressure 
--------------------------------------------- ---------------- 
 
7. (C) The security forces have made significant advances 
against the Maoists, PM Thapa asserted, adding that he feels 
the Maoists are getting weaker.  After the GON announced it 
would hold elections in the coming year, the Maoists attacked 
district headquarters in Bhojpur and Myagdi in an effort to 
pressure the GON, Thapa stated.  The GON has kept the door 
open for negotiations, he said, but greater political and 
military pressure is likely needed before the Maoists agree 
to resume dialogue.   He requested that the USG, along with 
other friendly nations, urge the Maoists "to move forward 
toward peace."   Because many high-ranking Maoist leaders 
enjoy safe haven on Indian soil, Thapa said, Indian pressure 
is crucial to persuading the Maoists to negotiate.    The GON 
has raised this with the Indian Government, which, he 
reported, has indicated "a positive mood" toward greater 
cooperation in this area. 
 
8. (C) The Foreign Minister believed that, compared with one 
year ago, there is now broad recognition that the Maoists 
cannot win the war militarily.  In case the insurgents are 
looking for an exit route, he said, the government is 
"keeping the door open."  If requested by the Maoists, the 
Cabinet is willing to amend the constitution, but not without 
reserving the principles of multiparty democracy and 
constitutional monarchy.  FM Thapa hinted that individuals in 
contact with the Maoists believe resumption of dialogue is 
possible, but do not know when.  DAS Camp emphasized the 
importance of having a more representative government before 
negotiating with the Maoists.  Thapa agreed, but blamed the 
insurgents for trying to exacerbate differences between the 
democratic forces. 
 
------------------ 
Bhutanese Refugees 
------------------ 
 
9. (C) FM Thapa was discouraged that the Royal Government of 
Bhutan (RGOB) has refused to move forward on repatriation. 
In the agreement signed by the two governments at the last 
Joint Ministerial, he recalled, the RGOB agreed to repatriate 
all Category I and II refugees.  Thapa complained of UNHCR 
Lubber's "stubbornness" on phasing-out assistance to the 
camps, adding that Nepal should not be penalized because of 
Bhutan's intransigence.  Moreover, he continued, the refugees 
do not deserve such treatment.  Thapa sent the GON report on 
the December incident (Ref C) to the RGOB on May 3.  However, 
he indicated that Bhutan's Foreign Minister replied 
informally that the RGOB would continue to seek punishment 
for individual refugees involved in the violence.  Thapa was 
not optimistic this could be accomplished due to the mob-like 
nature of the incident.  He continued to express 
disappointment over the conditions of return offered by 
Bhutan since "it was much less than had been described 
earlier to me." 
 
10. (C) In order to restart the process, Thapa said, the GON 
has agreed to further investigate the incident and has 
guaranteed full security to the RGOB.  In the meantime, the 
GON has requested that the RGOB move forward with plans for 
repatriation.  Thapa claimed that the RGOB has declined an 
offer by U.N. Secretary General Kofi Annan to send a 
high-level mission to both Bhutan and the refugee camps to 
facilitate a solution.  DAS Camp commented that the U.S. will 
continue to encourage the RGOB to seek resolution as soon as 
possible.  Thapa was hopeful the Indian Government would 
increase its involvement since it now recognizes the security 
threat posed by a large, disaffected refugee population. 
 
---------------------------- 
Bhote Koshi Hydropower Plant 
---------------------------- 
 
11. (SBU) DAS Camp noted ongoing difficulties in resolving 
Panda Energy's contractual dispute with the Nepal Electricity 
Authority (NEA) over compensation owed to the U.S. company 
for the Bhote Koshi hydropower plant.  Camp noted that Panda 
is owed roughly USD 2.5 million in arrears (an amount 
increasing by USD 500,000 annually) and was concerned that 
this dispute would negatively impact Nepal's image with 
American investors.  FM Thapa admitted he knew little about 
the dispute, but was willing to look into it.  (Post 
subsequently gave FM Thapa a written summary of the issue.) 
 
12. (U) DAS Camp cleared on this cable. 
BOGUE