US embassy cable - 03KATHMANDU1391

UNCLAS SECTION 01 OF 06 KATHMANDU 001391 
 
SIPDIS 
 
STATE FOR SA/INS AND DS/IP/NEA 
STATE ALSO PLEASE PASS USAID/DCHA/OFDA 
STATE ALSO PLEASE PASS PEACE CORPS HQ 
USAID FOR ANE/AA GORDON WEST AND JIM BEVER 
MANILA FOR USAID/DCHA/OFDA 
LONDON FOR POL/GURNEY 
TREASURY FOR GENERAL COUNSEL/DAUFHAUSER AND DAS JZARATE 
TREASURY ALSO FOR OFAC/RNEWCOMB AND TASK FORCE ON TERRORIST 
FINANCING 
JUSTICE FOR OFFICE OF THE DEPUTY ATTORNEY GENERAL/DLAUFMAN 
NSC FOR MILLARD 
SECDEF FOR OSD/ISA LILIENFELD 
 
E.O. 12958: N/A 
TAGS: PINS, PTER, CASC, PGOV, NP, Maoist Insurgency 
SUBJECT: UPDATE ON NEPAL'S MAOIST INSURGENCY, JULY 19-25 
 
REFERENCE:  KATHMANDU 1388 
 
SUMMARY 
------- 
 
1.  Maoist leaders responded to the Government of Nepal's 
(GON) invitation to sit for a third round of talks by 
issuing more demands as a prerequisite to dialogue 
(Reftel).  The GON maintains that the peace process is not 
in jeopardy, but senior Maoist leaders increasingly talk of 
notably absent from Kathmandu amid reports of their 
attendance at a regional conference in India of the 
Revolutionary Internationalist Movement (RIM). The Indian 
Ambassador to Nepal acknowledged to reporters on July 25 
that there was cooperation between Maoists in Nepal and 
terrorist groups in India.  Security forces reportedly have 
been put on high alert amid concern over increasing Maoist 
activities, and the possible failure of peace talks, which 
a high-ranking police official was quoted as saying would 
result in "colossal casualties."   A female Maoist was shot 
to death on July 25 during a confrontation with security 
forces. 
 
2.  Summary continued.  International donor agencies have 
expressed concern that the Maoists will resume hostilities, 
causing essential development projects to be halted. 
Maoist extortion demands to the United Mission to Nepal 
(UMN), an umbrella organization of inter-faith 
professionals providing medical assistance and development 
projects, has caused programs to be shut down.  The 
Industrial Security Group (ISG) issued a statement on July 
21 demanding an immediate end to extortion by the Maoists. 
Citing GON harassment, the Maoists closed down their 
Kathmandu contact office.  Maoists continue to extort money 
from civilians and businesses, and reportedly murdered a 
retired policeman in the eastern district of Ilam after he 
refused to donate money and food to them.  Maoists abducted 
thirteen civilians in four separate districts over a five- 
day period.  End Summary. 
 
MAOISTS ISSUE MORE PRECONDITIONS FOR FURTHER PEACE TALKS 
--------------------------------------------- ----------- 
 
3.  In response to the GON's formal invitation to sit for a 
third round of talks (Reftel), Maoist leaders declared 
there is no reason to continue peace negotiations until the 
GON immediately implements agreements allegedly reached 
during the second round of talks.  These agreements include 
the controversial issue of restricting the Royal Nepal Army 
(RNA) to within five kilometers of its barracks, the 
release of senior Maoist leaders, and publication of the 
whereabouts of missing Maoist cadres.  In a statement 
issued through peace talks facilitators on July 23, Baburam 
Bhattarai, head of the Maoist negotiating team, said the 
non-implementation of those alleged agreements is 
"tantamount to the unilateral end of the ceasefire and 
peace dialogue."  Bhattarai reportedly also demanded that 
the King play a direct role in the talks, or provide a 
public statement authorizing full authority to the GON's 
negotiating team, which Bhattarai lambasted as "powerless 
and helpless." 
4.  In their response Maoists continued their rhetoric 
against the USG and the RNA, demanding the "immediate 
expulsion of all U.S. military advisors and experts" as a 
prerequisite for continued dialogue.  In a scathing 
criticism, Maoists accused the RNA of turn ng itself into 
the "Royal American Army," and alleged the establishment of 
a "foreign puppet military regime." 
5.  Kamal Thapa, Minister of Information and Communication, 
and head of the GON's negotiating team, confirmed that the 
GON had received the Maoists' response, and that it would 
be studied very carefully.  Minister Thapa indicated that 
the talks might be delayed because the Maoist demands are 
"every tough."  The GON is expected to issue a reply within 
the next few days. 
 
CONFLICTING MESSAGES 
-------------------- 
 
6.  The Maoist refusal to sit for another round of talks, 
which the GON has continually promised would be held soon, 
illustrates the very different perceptions of the peace 
process held by the two sides.  Minister Thapa, who has 
consistently maintained the GON's commitment to the peace 
process, said on July 22 that "there is no obstructions" to 
a third round of talks, and that the GON had maintained 
"maximum flexibility" during the six-month ceasefire. 
Thapa cited six informal talks with the Maoists as proof 
that the peace process has not been derailed, and said the 
GON was determined to hold talks "at any cost." 
 
7.  Senior Maoist leaders, however, seem to have a 
different view of the direction of the talks.  Ram Bahadur 
Thapa (Badal), Maoist military chief and negotiating team 
member, declared on July 18 that a third round of talks was 
"impossible" unless the RNA's movements were restricted. 
Maoist rhetoric has increasingly referenced a return to the 
jungle and a "decisive war" if peace talks fail. 
 
MAOISTS MEET REVOLUTIONARY GROUP IN INDIA 
----------------------------------------- 
 
8.  On July 14 senior-level Maoists reportedly attended the 
regional conference of the Revolutionary Internationalist 
Movement (RIM) held for the first time somewhere in the 
bred areas (Maoist controlled) of India, including the 
states of Bihar, Chattisgarh, Orrissa and Jharkhand. 
Pushpa Kamal Dahal (Prachanda), Maoist Chairman, and 
Baburam Bhattarai reportedly attended along with Dev 
Gurung, senior Maoist and negotiating team member.  Other 
groups from India and Bangladesh.  The conference hailed 
the Maoist-led peoples' wars in Nepal, Peru, India, Turkey 
and the Philippines, and praised the advances made against 
alleged American imperialism and Indian expansionism.  A 
statement released at the conclusion of the RIM meeting 
said the Maoist-led wars are the "beginning of a 
proletariat movement in the world." (Note:  The continued 
absence of senior Maoist leaders in recent weeks has fueled 
speculation that they have gone underground in India, 
meeting with various organizations to garnet support.  End 
note). 
 
9.  Shyam Sharan, the Indian Ambassador to Nepal, told 
reporters on July 25 that his government will not allow 
anti-Nepal activity on its soil.  Ambassador Sharan 
acknowledged there was cooperation between Maoists in Nepal 
and terrorist groups in India, declaring that "we know that 
the Maoists were working together in drawing action plans 
with terrorist organizations" in Bihar, Andhra Pradesh and 
Orissa.  He said in order to take effective action against 
the Maoists, a better exchange of information between the 
two governments was needed. 
 
10.  In addition to traveling to India, Pushpa Kamal Dahal 
(Prachanda), Maoist Chairman, reportedly has been meeting 
with various ethnic groups in Nepal.  Even before returning 
to India, Prachanda reportedly attended a rally of the 
"Tharu Liberation Front," a tribal organization 
concentrated in the southern lowlands.  According to the 
Kirant National Front (KNF), a Maoist affiliated ethnic 
political organization, Pracha 
nda subsequently inaugurated 
the group's first national convention, and reportedly 
declared that the strategy for the next phase of the 
insurgency in Nepal would be different.  Speculation 
persists that the Maoist Chairman is attempting to stir up 
ethnic revolutionary fervor.  On July 23 it was announced 
that the KNF had merged with the Kirant Workers' Party to 
form the Unified Kirant Front, and then promptly demanded 
"Kirant autonomy" in the eastern part of Nepal. 
 
SECURITY INCREASED 
------------------ 
 
11.  A female Maoist was shot to death on July 25 during a 
confrontation with security forces in the far western 
district of Kalikot.  A joint team of army and police 
personnel were on routine patrol when Maoists allegedly 
attacked them.  Colonel Dipak Gurung, RNA spokesman, said 
his forces had to return fire in self-defense, and 
condemned the attack as "a serious violations" of the 
over increasing Maoist activities.  The local press quoted 
an unnamed government official on July 23 as saying that 
the GON has ordered all security personnel on leave to 
return to their bases.  Security personnel reportedly have 
been told also to monitor and, if necessary, restrict the 
purchases of pressure cookers and iron pipes, items used 
extensively in the past by Maoists to make bombs. 
 
12.  Security reportedly has been increased also in the 
Kathmandu Valley and in the western region of Nepal, 
particularly after the closure of the Maoists' office in 
the capital.  Joint teams of army and police personnel have 
intensified patrols and security checkpoints in the 
districts of Rolpa, where Maoists reportedly have continued 
to extort and abduct, as well as Doti and Dang, a Maoist 
stronghold.  A Maoist program scheduled for July 21 in Dang 
was banned by local officials, who cited security concerns. 
In response to reports of increased Maoist activities in 
Dipayal District, security personnel have imposed curfews, 
resumed checkpoints and resorted to frisking of travelers. 
Security personnel said they are following orders from 
their high command.  Many of the villagers, fearing a 
resumption of hostilities, have fled. 
 
13.  A high-ranking police official was quoted in the local 
press on July 21 as saying that the Maoists have increased 
their military strength and could possibly switch tactics, 
targeting urban areas and district headquarters instead of 
returning to the jungle.  The official warned that the 
Maoists would target urban areas "to meet their financial 
needs," and that if the peace talks failed it would result 
in "colossal casualties." 
 
14.  According to reports, Nepal Electric Authority (NEA) 
has handed over security of major power projects to the 
RNA.  The RNA has been responsible for the security of 
several power plants since the Maoists destroyed nine of 
them during the declared state of emergency last year. 
 
INTERNATIONAL DONORS CONCERNED OVER STALLED PEACE TALKS 
--------------------------------------------- ---------- 
 
15.  As the peace negotiations remain stalled, 
international donor agencies have expressed concern that 
the Maoists will resume hostilities.  On July 21 David 
Wood, head of DFID Nepal, the British Government agency for 
international development, declared that it was essential 
for Nepal to sustain the peace process, noting that peace 
"is a prerequisite for progress."  He said the possibility 
that the Maoists will return to violence is "extremely 
worrying." 
 
16.  Henning Karcher, resident representative of the United 
Nations Development Program (UNDP), echoed the need for 
peace before development projects could be successful, 
saying that progress could not be achieved in developing 
Nepal "unless the conflict is resolved."  Karcher also 
reiterated the need for a human rights accord.  On July 19, 
the National Human Rights Commission (NHRC) again condemned 
both the GON and the Maoists for failing to respond to its 
draft of a human rights accord. 
 
MAOISTS EXTORTING FROM DEVELOPME 
NT AGENCIES 
------------------------------------------- 
 
17.  Maoists in the western district of Dailekh reportedly 
threatened violence against a development agency if it did 
not pay them USD 4000.  The United Mission to Nepal (UMN), 
an umbrella organization of inter-faith professionals 
providing medical and development assistance, was warned by 
the insurgents to leave the district unless payment was 
made.  Maoists had forced the UMN to suspend all its 
projects two years ago after the insurgents looted supplies 
and disrupted programs, but the organization later resumed 
its projects, which include humanitarian assistance and 
infrastructure development.  An official of the UMN told 
the local press on July 24 that it has decided to shut down 
again because it cannot meet the extortion demand.  The 
organization includes seventy-five American volunteers and 
employs over two hundred local youths. 
 
18.  Extortion demands by the insurgents have caused bus 
service to stop completely in some parts of the western 
district of Surkhet.  Due to increasing demands for 
donations from bus drivers, the Mid-Western Bus 
Entrepreneurs Association has stopped service along some 
routes.  The insurgents reportedly wanted a "donation" of 
almost USD 350 from each bus. 
 
ISG DEMANDS END TO EXTORTION 
---------------------------- 
 
19.  A statement issued on July 21 by the Industrial 
Security Group (ISG), consisting of bilateral Chambers of 
Commerce and representatives of the U.S., British, Indian, 
German and French embassies, called for an immediate end to 
extortion by the Maoists.  The ISG also called upon the GON 
to address the numerous violations of the code of conduct 
committed by the insurgents at the next round of peace 
negotiations.  In addition to extortion, which has 
increased substantially since the ceasefire was declared, 
the statement also cites Maoist interference with 
MAOISTS CLOSE KATHMANDU OFFICE 
------------------------------- 
 
20.  Maoists closed their office in Kathmandu on July 20, 
alleging that it was under the "constant watch of the 
government's security forces."  The move follows the 
detention of Bharat Dhungana, head of the office, by 
security forces on July 17.  Dhungana claimed that he was 
handcuffed and held for five hours.  In a statement 
released by Dhungana on July 21, he accused the GON of 
keeping him and the office under twenty-four-hour 
surveillance, and criticized the GON for failing to 
guarantee the security of the office.  The insurgents have 
demanded a public apology from the GON before they would 
reopen the office. 
 
21.  Kamal Thapa, Minister of Information and 
Communications, and member of the GON's peace talks team, 
said the GON was "shocked" that the Maoists had closed the 
office, but refuted the accusations of Dhungana, saying 
that the GON consistently has assured the security of 
Maoist cadres, and "promised to work to strengthen security 
if there are flaws." Minister Thapa dismissed the closing 
of the office as a "pressure tactics" by the insurgents, and 
said security forces took Dhungana in for questioning after 
he was implicated in extortion campaigns. 
 
BADAL JUSTIFIES CODE OF CONDUCT VIOLATIONS 
------------------------------------------ 
 
22.  In an interview with the Nepali press on July 17, 
Badal, Maoist military chief, denied that Maoist cadres 
were violating the code of conduct.  Badal refuted charges 
of abducting civilians, saying that the Maoists have only 
taken action against "fake Maoists," and accused members of 
the Communist Party of Nepal-United Marxist Leninist (CPN- 
UML) of pretending to be Maoists in order to "tarnish our 
image."  Badal admitted taking money from people, but 
insisted that it was given voluntarily.  The military chief 
defiantly declared that the Maoists have laid down arms but 
not given them up, and warned the RNA that it would be a 
mistake to think the Maoists would relinquish their 
weapons. 
 
MAOISTS MURDER RETIRED 
 COP 
-------------------------- 
 
23.  On July 18 a group of Maoists reportedly murdered a 
retired policeman in the eastern district of Ilam after he 
refused to donate money and food to the insurgents. 
Ministry issued a statement on July 18 condemning the 
murder, and warning that such incidents could adversely 
affect peace talks.  On July 20 a group of insurgents in 
Parsa District reportedly threatened to kill a Nepali 
Congress (NC) activist if he does not provide them with 
weapons, ammunition and cash.  On that same day in Bara 
District, Maoist cadres stole weapons and ammunition from 
three separate homes. 
 
24.  Maoists abducted thirteen civilians in four separate 
districts over a five-day period.  On July 19 six people, 
including a two-year old child, were abducted by Maoists in 
the northeastern district of Sankhuwasabha.  Their 
whereabouts remain unknown.  On July 20 a twenty-two year 
old man was abducted from his home in southeastern 
Mahottari District, and a former Village Development 
Committee (VDC) chairman and CPN-UML activist was taken 
from his home in the northwestern region of Humla.  In the 
western district of Baglung six people were abducted on 
July 24 by a group of armed Maoists. 
MALINOWSKI