NEPAL AND BHUTAN TALK REFUGEES "INFORMALLY," BUT

C O N F I D E N T I A L SECTION 01 OF 03 KATHMANDU 001688

SIPDIS

GENEVA FOR RMA
ROME FOR USMISSION
BRUSSELS FOR USMISSION
LONDON FOR POL/RIEDEL

E.O. 12958: DECL: 08/29/2012
TAGS: PREF PREL EAID AORC PHUM NP
SUBJECT: NEPAL AND BHUTAN TALK REFUGEES "INFORMALLY," BUT
PROCESS REMAINS STALLED

REF: KATHMANDU 298

Classified By: Deputy Chief of Mission Robert K. Boggs, Reasons 1.5 (b)
, (d).


1. (C) Summary. Nepal and Bhutan have discussed the
Bhutanese refugee issue "informally," but a date has still
not been set for the next round of Ministerial-level talks on
the issue. According to Nepal's Foreign Secretary, the
differences between the two sides have narrowed, and Bhutan
appeared flexible. The EU recently sent a fact-finding
mission to the camps and subsequently wrote to the two
nations' leaders asking that they speed the process of
verification and repatriation. Also, Bhutan hosted visits by
two prominent Nepali politicians. Many refugees have become
restless waiting for the process to resume, with some
pledging to "take action." Without international attention,
progress on the Bhutanese refugee issue is unlikely. End
Summary.

Nepal: "Informal" Talks on Refugees Ongoing
--------------


2. (C) Nepal and Bhutan continue to discuss the Bhutanese
refugee issue "informally," Nepal's Foreign Secretary Madhu
Raman Acharya told DCM August 23. To the outside world, the
status of the negotiations may "look like a deadlock," but
differences between the two nations have narrowed, and Bhutan
has shown some flexibility. Acharya met Bhutan's Foreign
Secretary on the sidelines of the August 21-22 SAARC

SIPDIS
Ministerial in Kathmandu, and the discussion touched on the
refugee issue, Acharya related. The Prime Minister also
raised the issue in a separate meeting with Bhutan's ForSec.


3. (C) According to Acharya, in these most recent discussions
Bhutan raised "legal problems," specifically, a national law
in Bhutan that would require returned refugees to reapply for
citizenship two years after their return to the country.
(Note: Word has already spread through the camps that Bhutan
would insist that any returned refugee go through this
process to reacquire citizenship, and refugee activists have
expressed dismay over it in conversations with Poloff. End
Note.)

Still No Date for Ministerial
--------------


4. (C) The last formal round of bilateral talks occurred when
the two countries' foreign secretaries met on November 6,

2001. Since the beginning of the year, Foreign Ministry
officials in Kathmandu have told us repeatedly that the two
sides are "constantly" in touch, but that a date for another
round of talks has not yet been agreed on. The GON has
become increasingly frustrated by its inability to secure a
date for the next round of talks with Bhutan. Most recently,
Nepal has offered to convene a secretary-level meeting in the
absence of agreement on a date for a Ministerial.


5. (C) Following the completion of verification interviews at
the Khudunabari refugee camp in December, 2001, efforts to
assign the refugees to four categories stalled due to
disagreement over the fate of those placed in the category of
"Bhutanese who left Bhutan voluntarily." The next round of
formal Nepal-Bhutan talks is expected to focus on efforts to
"harmonize" positions on this issue. In the meantime, there
are no plans to begin to interview residents of the other
camps, and the Nepali civil servants who were on the team
that conducted the interviews have been reassigned elsewhere.
A UNHCR Protection Officer commented to us that failing to
continue with verification interviews shows "a lack of
commitment" all around.

EU Urges Both Sides to Hurry Up
--------------


6. (C) EU diplomats recently called on MFA officials to
discuss the apparent standstill in negotiations. The call
followed an EU "fact-finding mission" to the camps. Upon the
mission's conclusion, the EU President sent letters to
Nepal's Prime Minister (in his role as Foreign Minister) and
Bhutan's Embassy in New Delhi. The letters called on the two
governments to speed up the process and to implement, without
further delay, existing agreements on conducting verification
interviews. The EU now considers that "the ball is in
Bhutan's court," a British Emboff told us after the letters
were sent.

Positive Signs, but Suspicions Remain
--------------


7. (C) A senior Nepalese diplomat who met with Bhutan's King
during a recent private visit to Thimpu told the Ambassador
that the meeting had made him optimistic that Bhutan was
serious about taking people back. Meanwhile, Foreign
Ministry officials in Kathmandu have indicated to us, in
strict confidence, that Nepal would be willing to allow some
of the refugees to resettle within its borders (Reftel).
However, a Kathmandu-based Amcit businessman with ties to
Bhutan related to us his private conversation with the
Bhutanese Foreign Minister, who admitted that Bhutan was
stringing Nepal along, and hoped to maintain the diplomatic
advantage so as not to have to grant any concessions.

Bhutan's Charm Offensive
--------------


8. (C) Although Bhutan's leaders claim to be too busy to meet
with their Nepalese counterparts, in recent months Thimpu has
hosted visits by two prominent opposition figures: Madhav
Nepal, leader of Nepal's main opposition party, the Communist
Party of Nepal--United Marxist-Leninist (CPN-UML),and Chakra
Prasad Bastola, a former Foreign Minister and confidant of
former Prime Minister G.P. Koirala. The Foreign Ministry
spokesperson told us that the government welcomed Bhutan's
invitations to Bastola and Nepal, insisting that the visits
could help move the process forward.


9. (C) Madhav Nepal speculated that there could have been
several reasons why Bhutan invited him to visit. In the main
he suspected that the Bhutanese did not like the ruling
Nepali Congress Party (NCP),and wanted to drive a wedge
between the Nepalese parties on this issue. Madhav Nepal
added that in his audience with Bhutan's King, the monarch
had been very negative about UNHCR's role. UNHCR's
statistics were incorrect, the King asserted, and many camp
residents were actually from India.

Refugees Getting Restless
--------------


10. (SBU) Over the past nine months, camp residents have
become restless awaiting the results of the verification
interviews. A delegation elected to represent the
Khudunabari camp traveled to Kathmandu in June to circulate
copies of a petition addressed to Nepali and Bhutanese heads
of state. The petition called for the two nations to declare
the results of the verification exercise, commence
verification interviews at the remaining camps, and begin
repatriating verified refugees to Bhutan.


11. (SBU) The delegation met with Poloff and also paid calls
on UNHCR and the British, Japanese and AUSTRALIAn embassies.
Ratan Gazmere, a Bhutanese refugee and activist recruited by
camp leaders to help with their campaign, accompanied the
delegation on its rounds. He told Poloff that the refugees
were "very frustrated" with the delay. At a camp meeting the
residents had made a collective decision that they "cannot
sit by any longer" and had to do something.


12. (SBU) Gazmere pointed out that the camp population is
dynamic, and so much time has passed that many new families
have formed as a result of marriages, births and deaths. For
that reason the data collected by the Joint Verification Team
(JVT) on the basis of family groupings becomes less valid
every day. Before too long another round of verification
interviews will be required to bring the information up to
date, Gazmere insisted. To force the Bhutanese to move the
process forward, Gazmere suggested that the GON unilaterally
announce the results of the verification interviews.

13. (C) In recent months refugee activists have been
publicizing studies purporting to prove that Bhutan has begun
a program to resettle the refugees' lands in south Bhutan
with Drukpa ethnics from the north. The release of one such
study, by the "Habitat International Coalition," was widely
covered in the press. These reports have further inflamed
refugee sentiment. One moderate refugee leader told Poloff
August 29 that the refugees planned to "take action" to bring
attention to their plight. He assured us that these would be
peaceful.

Comment
--------------


14. (C) By stalling, both Bhutan and Nepal are looking to
maximize their own advantage. Bhutan hopes to exclude from
repatriation the category of "Bhutanese who left Bhutan
voluntarily," while Nepal wishes to rectify the mistake it
made when it agreed to Bhutan's proposal establishing four
separate categories. Although the Nepalis are hesitant to
declare the dialogue a "deadlock," the fact that the two
sides have not held formal talks on the issue in nine months
means that no progress is being made. Meanwhile, the
refugees are getting restless. The camps have so far been
peaceful, but the combination of frustration and restlessness
could lead to discontent, violence, or worse--the creation of
fertile recruitment grounds for the Maoists and other
militants. The USG and other donors have an interest in
seeing the refugee crisis resolved quickly. But without
prolonged and consistent attention from the international
community, the two nations are unlikely to get there on their
own.
MALINOWSKI