US embassy cable - 05COLOMBO542

UNCLAS SECTION 01 OF 04 COLOMBO 000542 
 
SIPDIS 
 
SENSITIVE 
 
TO EB A/S TONY WAYNE FROM AMBASSADOR LUNSTEAD; DEPT FOR 
SA/INS; TREASURY FOR C.CARNES; COMMERCE FOR A.BENAISSA; 
DEPT PLEASE PASS TO MCC D.NASSIRY; MANILA FOR USADB 
 
E.O. 12958: N/A 
TAGS: EAID, ECON, PREL, CE, MV, Maldives, Tsunami 
SUBJECT: SRI LANKA AND MALDIVES TSUNAMI RELIEF AND 
RECONSTRUCTION UPDATE (MARCH 16) 
 
REF: A. COLOMBO 497 
     B. COLOMBO 512 
 
This telegram is to update for Tsunami IAWG Meeting. 
 
1. (SBU) Summary: While challenges remain, there has been 
some positive momentum in the transition from relief to 
rebuilding this week.  The Ambassador met with the Prime 
Minister on March 14 and will meet the President on March 
17 to discuss GSL policies and initiatives on tsunami 
relief and reconstruction.  Provision of temporary 
shelter is moving ahead, with land allocation and import 
clearance procedures causing some headaches.  There has 
been some progress on transparency, through increased 
public outreach by the GSL and pressure brought by the 
citizenry (including a legal case brought by a prominent 
Sri Lankan against the GSL).  An assessment by the donor 
working group (which includes USAID) has indicated that 
all areas of the country have moved from relief to 
rebuilding, but that coordination remains the key 
challenge.  Clearance of relief and reconstruction- 
related imports remains a challenge, and has become more 
high profile in recent days.  GSL Customs and the Navy 
are working to coordinate a faster clearance process. 
Tensions are rising in the East, where there is a popular 
perception of unequal aid distribution among ethnic 
groups.  While post hopes a more positive trend will 
develop, we believe the process will continue to vary 
day-to-day, until a better coordination mechanism is 
developed.  End Summary. 
 
Senior-level Engagement 
----------------------- 
 
2. (SBU) Ambassador met with Prime Minister Mahinda 
Rajapakse on March 14 regarding problems with relief and 
rebuilding assistance.  As described in Ref A, Ambassador 
raised concerns about a lack of coordination among GSL, 
donors and NGOs, concerns about the temporary shelter 
program and the slow clearance of land, and the 
controversial 100/200 meter coastal exclusion zone, which 
could be the eventual cause of serious disparity and 
displacement of affected persons.  Rajapakse acknowledged 
the problem and urged the Ambassador to raise them with 
President Kumaratunga.  Ambassador is meeting the 
President tomorrow to discuss the same issues. 
 
Shelter 
------- 
 
3. (SBU) While challenges remain, there appears to be 
some semblance of organization creeping into the 
temporary housing sector.  A new administrative 
structure, the Transitional Accommodation Project (TAP) 
under the Task Force for Relief (TAFOR) has been 
established to coordinate shelter issues.  Under the TAP 
framework, the GSL is committing to have, through its NGO 
partners, 10,000 shelters constructed by April 10 and 
30,000 finished by May 31. (When queried about whether 
this number was sufficient to meet the entire need, the 
TAFOR Coordinator suggested it was "about the right 
amount.") 
 
4. (SBU) Land acquisition, import clearance issues and 
sorting out allocations given to unfunded groups that 
have promised to build houses, but now cannot deliver, 
remain problematic.  Nonetheless, USAID contractors 
report they are able to begin work on land they have been 
given, while waiting for final approvals for other 
tracts. 
 
5. (SBU) The land acquisition effort appears to be a 
double-edged sword for the Government, which must balance 
enforcement of the 100m/200m coastal exclusion zones with 
efforts to find new land close to the previous dwellings. 
On the one hand, the GSL's desire to keep communities as 
intact as possible is laudable, and a stated goal of the 
IFI assessments.  On the other, the longer the delay in 
identifying appropriate land, the closer the rainy season 
looms-and with it, the potential for even greater 
problems for communities that are not yet in transitional 
shelter. 
 
6. (SBU) The acting-UNHCR Rep told the Ambassador last 
week that things were going "as well as can be expected" 
and that progress was being made on the housing and 
temporary shelter front. 
 
Transparency Initiatives 
------------------------ 
 
7. (U) There have been recent newspaper advertisements, 
placed by the Task Force for Rebuilding the Nation 
(TAFREN) and relevant line ministries, highlighting 
agreements with donors and NGOs in various sectors.  Over 
the weekend several full-page ads published the names of 
NGOs and their partner GSL agencies working on relief and 
rehabilitation efforts in the health sector, and on March 
16, there was a full page advertisement listing the NGOs 
with which the Government had signed MOUs for rebuilding 
houses, the number of houses each group would take, and 
guidelines for donors interested to join the housing 
reconstruction effort. 
 
8. (SBU) A lawsuit asking that the Government publish a 
list of all the donors to GSL trust funds and an 
accounting of how those funds are allocated was brought 
against the Government by Ceylinco Chairman Lalith 
Kotelawela, a well-respected businessman who heads the 
largest insurance conglomerate in Sri Lanka.  The Appeals 
Court upheld the suit and the GSL is required to respond 
by March 24.  Kotelawela told Econchief that he was not 
seeking damages, but merely wanted to do something to 
force the Government to be more transparent in its 
accounting.  He said the suit was prompted by Ceylinco's 
efforts to rebuild schools in a certain area, only to be 
told that their offer of assistance was not "high enough" 
and that another NGO had offered several times as much, 
despite the fact that the rebuilding estimates were 
considerably less.  "Where do you think that extra money 
will go?" Kotelawela queried with a grin. 
 
Donor Assessments 
----------------- 
 
9. (U) Bilateral verification missions, undertaken by the 
bilateral donor working group - which consists of 
representatives of various donor governments, including 
USAID - produced an assessment of the situation on the 
ground in the hardest-hit portions of the country: 
Jaffna, Mullaitivu, Kilinochchi, Trincomalee, Batticaloa, 
Ampara, Hambantota, Matara and Galle.  In general, the 
report indicates that: 
 
--the immediate relief phase is over in all districts; 
 
--there are questions about the equity of aid 
distribution; 
 
--shelter, permanent housing and livelihoods were the 
most 
critical need; 
 
--the South is ahead of the North and East in 
rehabilitation and reconstruction; 
 
--livelihood focus has been on fisheries, with other less 
common forms of livelihood largely neglected; 
 
--there is duplication and a lack of coordination on the 
part of Government agencies, thereby making it difficult 
for donors and NGOs to understand the Government's 
reconstruction plan and participate effectively. 
 
Duty on Relief and Reconstruction Materials 
------------------------------------------- 
10. (SBU) There continue to be delays at the Colombo port 
to clear materials for relief and rehabilitation work. 
In response to the Ambassador's recent letter of concern 
to the Foreign Minister, there were several immediate 
outcomes: 
 
--The Finance Secretary responded noting that relief 
items would not be charged duty, and that some items had 
been incorrectly sent (by consignees) through "normal" 
commercial channels, thereby incurring duty.  He also 
indicated customs would refund any duties incorrectly 
assessed.  (Note: it is proving very difficult to find 
anyone in the Finance Ministry who is aware of a 
mechanism for "refunding" duties. End Note) 
 
--The Government accused the Tamil Rehabilitation 
Organization (TRO - the LTTE's relief organization) of 
purposely pushing relief items through commercial 
channels, in order to incur duty and embarrass the GSL. 
The GSL claimed that "only" a small duty had been charged 
on a high-profile case involving water purifiers donated 
by a Baltimore church, and that the shipping agent had 
presented fraudulent documents to the TRO for over $6,000 
in duties, when less than $3000 had been assessed. (Note: 
the GSL is splitting hairs, while the authorities will 
look into the case of the overcharge, the GSL still 
assessed almost $3,000 in duty on legitimate relief items 
coming from a US source. End note). 
 
11. (SBU) In the past week there has been a significant 
increase in concern among shippers and importers about 
the slow pace at which container cargo is being cleared 
into the country.  Customs has blamed the Navy, which had 
been given emergency authority to check relief cargo and 
vice versa.  As of March 15, Customs and Navy were 
exploring a joint clearance mechanism to speed clearance 
and there were reports on March 16 that the Navy would 
withdraw from the inspection process, but would have the 
authority to inspect any suspect containers that arrive. 
(Note: The GSL is concerned about the LTTE smuggling 
items into the country via relief cargo, but the Sri 
Lanka Port Authority (SLPA) is adamant that the port not 
become "militarized."  Early in the process the GSL had 
requested the CSI-related loaner equipment from US 
Customs in order to facilitate this in-bound clearance 
process.  US Customs has identified a scanner, but now 
the GSL says the MOU for the loan has to go to cabinet. 
Nonetheless, Sri Lankan Customs still has several 
projects that must be completed before the equipment 
could be installed and operated.  The procurement of new 
scanning equipment for the port, including portable 
scanners is underway, but will not likely be completed 
before the end of the year.  End Note.) 
 
Protests in North and East 
-------------------------- 
 
12. (U) There have been reports of increased agitation 
over slow progress on reconstruction.  While these remain 
somewhat isolated incidents, there is concern that 
continued delays will exacerbate tensions.  The following 
events have been reported: 
 
March 8 - Ampara:  Internally Displaced Persons (IDPS) 
pitched tents across a main road to protest delays in 
providing temporary and permanent shelter. 
 
March 12 - Trincomalee:  IDPs blocked roads in the main 
town, demanding they be moved from tents to temporary 
housing.  According to the pro-LTTE website TamilNet, the 
protest was sparked by the March 11 death, reportedly 
from heat stroke, of an elderly IDP living in a tent. 
 
March 12 - present, Trincomalee:  A Buddhist monk is 
staging a public fast to protest slow delivery of tsunami 
aid. 
 
March 13 - Batticaloa:  Angry mob attacked the Divisional 
Secretary's office after discovering tsunami aid 
 
SIPDIS 
(apparently food items) buried on the premises.  Police 
used tear gas to disperse crowds. 
 
13. (U) Discussions with aid workers in the East indicate 
that tempers are rising due to the perception that 
assistance is getting through to Singhalese areas, but 
not Tamil and Muslim dominated ones.  Some of these 
tensions may be exacerbated by certain follies, such as a 
recent TamilNet accusation that none of the 44 relief 
coordinators hired by TAFOR to work in the primarily 
Tamil-speaking East are Tamil-speakers.  TAFOR has 
acknowledged the problem and claims to be seeking Tamil- 
speakers to fill the positions. 
 
Maldives 
-------- 
 
14. (U) Maldives continues to move forward impressively 
with reconstruction.  Maldives will participate in a 
donor meeting this week in Manila, on the margins of an 
ADB sponsored Tsunami meeting. 
 
15. (SBU) We understand there continues to be discussion 
over the best way to provide USG assistance to Maldives. 
The GORM has been very well organized and efficient in 
its coordination of the tsunami response and relief and 
reconstruction efforts.  The GORM has established a trust 
fund, with a well coordinated disbursement mechanism and 
transparent allocation process, which Post believes would 
be the best channel for USG assistance.  We understand US 
representatives in Manila will attend the Maldives 
conference. We strongly suggest a meeting be arranged 
with Maldives Finance Ministry Executive Director Riluwan 
Shareef for additional information and a full accounting 
of the trust fund mechanism. 
 
Comment 
------- 
 
16. (SBU) We note that the situation on the ground in Sri 
Lanka appears to be moving in a more positive direction 
than previously reported (Ref b).  While we hope this 
will be a trend, we think we are in for a bit of a 
tsunami seesaw of up and down periods with regard to the 
 
SIPDIS 
coordination effort, which will necessitate constant 
intervention and bird-dogging by us.  We will report on 
the Ambassador's meeting with the President septel.  To 
move in a consistently positive direction will require 
further refinement of GSL policies and procedures. 
Better enforcement and dissemination of GSL decisions 
will minimize the need for ad hoc decisions by NGOs and 
donors due to a lack of information and guidance from the 
GSL's coordination mechanisms.  End Comment. 
LUNSTEAD