US embassy cable - 03COLOMBO606

UNCLAS SECTION 01 OF 04 COLOMBO 000606 
 
SIPDIS 
 
SENSITIVE 
 
PASS TO USAID AMBASSADOR, WENDY CHAMBERLAIN, AA/ANE, 
GORDON WEST, DAA/ANE; BERNADETTE BUNDY, ANE 
 
DEPARTMENT FOR SA, D, SA/INS, LONDON FOR POL/RIEDEL 
NSC FOR E. MILLARD 
 
E.O. 12958:  N/A 
TAGS: EAID, PREL, CE, LTTE - Peace Process 
SUBJECT:  DRAFT DONOR STATEMENT OF PRINCIPLES RE FOREIGN 
ASSISTANCE TO SRI LANKA 
 
 
SENSITIVE BUT UNCLASSIFIED - PROTECT ACCORDINGLY. 
 
1.  (SBU) SUMMARY.  This is an ACTION message.  This 
cable contains the latest draft of the Donors' statement 
of principles regarding provision of foreign assistance to 
Sri Lanka as the peace process proceeds.  It has been 
agreed to (ad referendum) by all of Sri Lanka's major 
bilateral donors at a meeting at Ambassador Wills' 
residence 4/8.  As an attachment to the statement of 
principles, donors also indicate "illustrative milestones" 
that ought to be met by the GSL and LTTE.  All 
participants have been asked to get concurrence/comments 
on the statement of principles from capitals by 4/15, when 
the donors will meet again at Jefferson House.  The 
thinking in Colombo is that this document, once cleared, 
would be turned over to the Norwegians, who would in turn 
pass it to the GSL and the LTTE at the next negotiating 
round in Thailand in late April.  The GSL and LTTE would 
be free to comment on it but the supposition is that they 
would agree to it in time for it to be made public at the 
Tokyo conference in June.  The statement of principles is 
not a contract or an obligatory document but rather an 
exhortation to the GSL and the LTTE to live up to the 
principles if they want donor aid.  But the donors 
individually would be free to make their own judgments 
about whether and how to dispense their assistance.  END 
SUMMARY. 
 
2.  (SBU) A group of donors met at Jefferson House on 4/8 
to consider a draft statement of principles regarding 
provision of foreign assistance to Sri Lanka.  The 
statement was originally drafted by several western aid 
directors, who wanted to introduce conditionality to Sri 
Lanka's peace and aid processes.  It was substantially 
edited and recast by Ambassador Wills, then reviewed by 
ambassadors from the UK, Japan, EU and US over the 
weekend.  This all-hands meeting at Jefferson House 
included the following:  Ambassadors or CDAs from 
Australia, Austria, Canada, France, Germany, India, Italy, 
Japan, Korea, Netherlands, Norway, Saudi Arabia, Sweden, 
Switzerland and the UK, plus country directors from the 
UN, WB, IMF and ADB. 
 
3.  (SBU) At the urging of Ambassador Wills, the term 
conditionality was dropped and the draft turned into a 
statement of principles with an accompanying list of 
"illustrative milestones."  (The list is being faxed to SA 
and INS as it cannot be printed out in cable format.) 
 
4.  (SBU) In the 4/8 discussion, all participants save 
the HC of Australia were comfortable with the idea of 
linkage in the statement's opening paragraph.  The 
Australian was not sure his government would agree to 
linkage, but in the end he agreed to forward the language 
to Canberra along with his endorsement.  The Japanese 
Ambassador was concerned that there be no formal 
monitoring mechanism after the Tokyo Conference, when the 
statement, it is hoped, will be made public.  He proposed 
that any further developments/changes related to the 
statement post-Tokyo be coordinated by the co-chairs of 
June's conference:  Japan, Norway, the EU and US.  This 
was agreed to by all.  In other words, the meeting decided 
to track compliance in an informal manner. 
 
5.  (SBU) The document was reviewed word-by-word and 
agreed to by the meeting's participants.  It was decided 
all should consult home offices and get comments/clearance 
by April 15, when the group will meet again at Jefferson 
House.  It was also decided all should get clearance from 
home offices on what to do with the statement.  In this 
regard, the proposal that arose from the meeting was that, 
once cleared, it should be passed to the GON, which will 
then table it at the next round of the negotiations in 
Thailand in late April.  The GSL and LTTE would be asked 
to consider and accept it and it would then be issued at 
the Tokyo Donors conference in June.  There was a lot of 
debate about whether it should be signed by all the donors 
or just issued, with a majority favoring the latter. 
 
6.  (SBU) It was also agreed that this was not a contract 
or obligating document.  It rather is an exhortation to 
the GSL and LTTE to live up to these principles and 
milestones to ensure donor aid.  But it will be up to each 
donor to decide whether and how to deploy its own 
assistance. 
 
7.  (SBU) Action Request:  Request Washington agencies' 
comments/concurrence prior to April 15. 
 
8.  (SBU) Begin Text: 
 
                    DRAFT April 9, 2003 
 
        Basic Principles for Peace and Development 
 
 
1.  Purpose 
To ensure sustainable resources for peace and development 
in Sri Lanka through a process that links development 
assistance to adherence to basic principles. 
 
2.  Background and Rationale 
Sri Lanka is in a period of transition, somewhere between 
war and peace but not yet definitively `post conflict.' 
Progress towards peace and political settlement must be 
encouraged and supported by all parties. 
 
This paper suggests a process for highlighting basic 
agreed principles and suggests milestones and indicators 
that link development assistance to the peace process. 
This is not intended as a prescriptive exercise but rather 
as a dialogue and partnership among GOSL, LTTE and donors, 
on shared concerns. 
 
Sri Lanka can boast significant progress towards peace. 
The ceasefire agreement is one year strong, regular peace 
negotiations have demonstrated commitment to address core 
issues such as a political settlement, human rights, 
humanitarian and rehabilitation assistance and gender. 
Development achievements are also noteworthy:  SIHRN has 
been established and acknowledged by the international 
community; NERF is operational; quick impact projects are 
being approved; Regaining Sri Lanka, along with a 
multilateral group-supported needs assessment for 
immediate and medium term rehabilitation needs, will be 
tabled at a pledging conference in Tokyo in June 2003. 
 
The peace process and the development process are mutually 
reinforcing.  There is need, therefore, to develop 
mechanisms for ensuring they complement each other. 
 
3.  Basic Principles 
 
3.1 Progress on Political settlement 
The main message of the Oslo Declaration is that a viable 
political settlement should be the desired outcome of the 
peace process.    Through six rounds of talks, progress 
and commitments have been made on substantive issues.  At 
the Hakone talks, the parties to the negotiation 
reiterated their commitment to develop a federal system 
based on internal self-determination within a united Sri 
Lanka and have begun to discuss the essential elements of 
fiscal federalism.  This principles framework recognises 
that this process will take time, and aims to enhance this 
positive momentum. 
 
3.2 Respect for human rights and security 
Human security is central to the post conflict peace 
settlement process.  It encompasses freedom for civilians 
from pervasive threats, ensures protection and safety, and 
promotes respect for human rights norms by all parties. 
 
The Hakone peace talks demonstrated the parties' 
commitment to human rights.  We encourage expeditious 
development and implementation of the human rights 
roadmap.   There has also been ongoing substantive 
dialogue between the LTTE and a coalition of organisations 
led by UNICEF on child rights and children affected by 
war. 
 
Considerable commitments were made during 2002 regarding 
land tenure and access issues in conflict-affected areas, 
and on the rights of IDPs.  These positive initiatives now 
require support and implementation.  Adoption of the 
Guiding Principles on Internal Displacement would support 
these initiatives. 
 
3.3 Participation and Representation 
The Oslo Declaration and SIHRN's Guiding Principles 
underscore the importance of recognising the needs and 
aspirations of all ethnic communities as well as actively 
involving beneficiaries in planning their own development. 
 
At present, ordinary Sri Lankans need a better 
understanding of the peace process.    Increased public 
knowledge and dialogue on the negotiations would both 
enhance and deepen public support for peace. 
 
The key to effective engagement with international actors 
on development, investment and trade will be the 
establishment of plural, representative government in 
conflict-affected areas. 
 
3.4 Democracy 
The donors accept that it is for the parties to negotiate 
constitutional arrangements with which the country as a 
whole will be comfortable.   Our concern is that the 
system must be democratic, transparent and accountable. 
 
There is overwhelming support for a greater degree of 
autonomy at local levels, with representative 
decentralised local government that is accountable, 
responsive to local needs, makes better use of available 
local resources and delivers efficient services.    While 
this transition will take time, developing local 
government structures expeditiously will help build trust 
within and between communities and create an enabling 
environment for increased donor support.  The Hakone 
proposal to prepare for local government elections in the 
North and East is a welcome initiative. 
 
3.5 Transparency and Management of Finances 
With additional resources being committed in the conflict- 
affected areas, the open and transparent management of 
these resources would increase community and donor 
confidence.  While the guidelines for SIHRN and the NERF 
are positive steps, the lack of clarity over systems of 
revenue generation, resource distribution and taxation in 
conflict-affected areas needs to be resolved. 
 
4.  Reconciliation 
Ultimately, the goal of the peace process will be 
reconciliation between and among communities island-wide. 
This will require effective efforts to ensure that the 
underlying causes of tensions between and amongst 
communities island-wide are addressed and reconciled. 
National frameworks such as that for Relief, 
Rehabilitation and Reconciliation (3R) make important 
recommendations which address both equity and access 
imbalances in Sri Lanka.  Issues such as language policy, 
education and public sector reform require immediate 
action, additional resources and unwavering political 
commitment. 
 
5.  Milestones 
The success of the framework will depend on the setting of 
realistic and achievable milestones.  Immediate evidence 
can be demonstrated on such key issues as: 
 
-- Full implementation of the ceasefire agreement, 
including unrestricted access by the SLMM. 
 
-- Adoption of the "plan" leading to a final political 
settlement. 
 
-- Underage recruitment: children no longer subject to 
recruitment; progress on the reintegration of current and 
former underage recruits into communities 
 
-- Clarification of the respective roles of central and 
local government in the administration of taxation and the 
management of public funds. 
 
-- Respect for basic operating principles of international 
humanitarian and development assistance agencies. 
 
-- Progress on settlement of land and livelihood issues on 
occupied lands, including in the HSZ. 
 
-- Development of structures of governance at the sub- 
national level that are representative, transparent and 
accountable. 
 
-- No laying of new mines and increased mine clearance. 
 
As the peace process progresses, there will need to be 
dialogue to establish further milestones in emerging areas 
such as security and related matters. 
 
Annex 1 contains sample, illustrative milestones in 
support of the above principles. 
 
WILLS