US embassy cable - 04KATHMANDU1553

UNCLAS KATHMANDU 001553 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR SA/INS 
LONDON FOR POL-GURNEY 
NSC FOR GREEN/DORMANDY 
 
E.O. 12958: N/A 
TAGS: PTER, ASEC, NP, Maoist Insurgency 
SUBJECT:  MAOISTS WARN COMPANIES, INCLUDING COCA COLA, TO 
SHUTDOWN INDEFINITELY 
 
 
1.  (U)  According to reports August 5 in both English and 
Nepali-language newspapers, the Maoist affiliated All Nepal 
Trade Union Federation has issued a warning to more than a 
dozen companies to shut down operations for an indefinite 
period.  Included in the warning was the American company, 
Coca Cola and several other multinational companies.  The 
apparent basis for selection of these companies was not 
national affiliation, but various other reasons including 
royal relatives having major stakeholdings, accused 
exploitation of workers, and ''spying.''  One company, Surya 
Tobacco, has been ordered to shut down immediately for ''not 
giving fair prices to farmers,'' while newspaper reports 
suggest that other companies must shut down by August 17. 
The companies involved have not received any specific 
warning directly from the Maoists.  The warning did not 
specify what could happen if the companies fail to shut down 
operations. 
 
2.  (SBU)  COMMENT: The ostensible goal of the threat is to 
pressure the Government of Nepal into serious talks 
regarding a charter of eleven points made by the All Nepal 
Trade Union, which includes withdrawing the organization 
from Nepal's terrorist list.  N.N. Singh, Managing Director 
of Coca Cola, contacted the Embassy to convey his concern 
regarding the announcement.  The Embassy also contacted Aqua 
Mineral Water owner Sanjay Dugar.  Neither company suggested 
it would comply with the Maoist demands.  Dugar informed the 
Embassy that a similar list of company names had been 
published about four months ago, and that his company had 
also been on that list.  This latest list was smaller than 
the prior list, and Dugar suggested this might be the result 
of companies having ''entered negotiations'' with the 
Maoists.  While no repercussions had occurred to the 
companies that had failed to meet the previous demands, 
Dugar expressed concern for himself and his family. 
 
3.  (SBU)  Both companies have resisted extortion overtures 
from the Maoists in the past.  Dugar suggested that the 
Maoists had such specific information regarding the 
companies revenues, VAT payments and tax payments that he 
suspected the information was leaked from sources inside the 
government.  Dugar was expecting new extortion demands 
following this announcement.  This incident continues to 
demonstrate the difficulty for American and multinational 
companies to do business in Nepal.  Already fighting 
difficult bureaucratic hurdles, they also must deal with 
extortion demands and fear for the safety of themselves and 
their families.  END COMMENT. 
 
MORIARTY