C O N F I D E N T I A L SECTION 01 OF 04 COLOMBO 000485

SIPDIS

DEPARTMENT FOR SA, SA/INS, S/CT, SA/PD; NSC FOR

E. MILLARD

LONDON FOR POL/RIEDEL

E.O. 12958: DECL: 03-24-13
TAGS: PGOV PTER PINS KPAO CE NO JA CH LTTE
SUBJECT: Sixth round of talks proves constructive;
Tigers reportedly sink Chinese fishing boat

Refs: (A) Colombo-SA/INS 03/21/03 e-mail
- (B) Colombo 475, and previous

(U) Classified by Lewis Amselem, Deputy Chief of
Mission. Reasons: 1.5 (b,d).


1. (C) SUMMARY: The sixth round of GSL-LTTE talks
wrapped up on March 21, with the two sides issuing a
comprehensive press statement. Minister Moragoda, a key
GSL negotiator, told the Ambassador he was encouraged by
the talks -- the Tigers seemed committed to the peace
track for now and badly wanted U.S. recognition. As the
talks wrapped up, reports came in that the Tigers had
apparently sunk a Chinese fishing boat on March 20. The
fact that the talks went as well as they did provided a
solid boost for the peace process. Suggested press
guidance is contained in Para 8. Mission plans to issue
this guidance on March 25 unless otherwise directed.
END SUMMARY.

===================
Moragoda's Comments
===================


2. (C) The sixth round of Norwegian-facilitated talks
between the Sri Lankan government and the Liberation
Tigers of Tamil Eelam (LTTE) wrapped up on a largely
positive note on March 21. (Note: The talks took place
in Hakone, Japan, from March 18-21.) In a March 22
conversation with the Ambassador, Milinda Moragoda
(Amcit -- pls protect), the Minister of Economic Reform
and a key GSL negotiator, said he was encouraged by the
talks and stated that, in his estimation, three
headlines emerged from them. First, the Tigers had
clearly shown in Hakone that they did not want the talks
to fall apart, at least not now. Second, the Tigers
want to be perceived not as terrorists, but as "freedom
fighters" -- international recognition, especially by
the United States, is key for them. Third, the Tigers
want and need money for development of "their" part of

Sri Lanka (i.e., the sections of the north and east
under their control).


3. (C) Moragoda went on to make the following specific
remarks re the talks:

-- LTTE senior negotiator Anton Balasingham is "very,
very" worried about the Tiger navy (the "Sea Tigers").
The Sea Tigers "feel caged," are bristling with
resentment, and ready to go back to war if they could.
(Note: See Paras 5-6 regarding reports that the Sea
Tigers were involved in the March 20 sinking of a
Chinese fishing boat.)

-- During the talks, LTTE leader V. Prabhakaran called
Balasingham at least twice a day.

-- The LTTE said it wanted an expansion of the Sub-
Committee on Immediate Humanitarian Rehabilitation Needs
(SIHRN) so that the body can consider mid- and long-
range projects for the north/east. Moragoda said the
GSL would only agree to this if the LTTE agreed to talk
about political structures and milestones to be reached
prior to a final settlement.

-- Moragoda said he was very worried about chain-of-
command issues within the Sri Lankan military. He
expressed concerns, "for example," about a March 10
incident in which the navy attacked and sunk a LTTE ship
off the northeast coast without what he considered a
clear political go-ahead from GSL leaders. (Note: Due
to this incident, which resulted in the deaths of 11
LTTE cadre, the Tigers almost boycotted the Hakone
talks. The navy asserts that the LTTE ship was carrying
arms.) Overall, he felt that civilian control over the
military was "too loose" and that Prime Minister
Wickremesinghe was not exerting enough control.

-- Moragoda said he felt that the Japanese hosts of the
Hakone talks were "out of their depth" on political
issues. He added that he noticed tension between the
Japanese and the Norwegian facilitators throughout the
negotiations.

-- At the end of the conversation about the talks,
Moragoda reflected and said that it had been important
that the two sides had reached an understanding in
Hakone that the ceasefire needed to be consolidated.
The security situation needed to be managed very
carefully, and he was pleased in this regard that there
would be a meeting between the Sri Lankan navy and Sea
Tiger commanders in the next several weeks (see Para 4).

=====================
Joint Press Statement
=====================


4. (C) At the close of the talks on March 21, the two
sides issued a joint press statement through the offices
of the Norwegian facilitators. (Note: The text of this
statement was passed to SA/INS in Ref A.) Per the
statement, key topics addressed at the talks included
the following:

-- Ceasefire Modalities: As noted by Moragoda, the two
sides discussed ways to avoid a repetition of recent sea
confrontations, such as the March 10 incident. The two
sides agreed to meet within three weeks in order to
review the February 2002 ceasefire agreement and find
ways to improve on it in regard to sea-related issues.
The two sides also agreed to establish clear modalities
for handling GSL soldiers and LTTE cadre captured by the
other party. (Note: There have a number of incidents
in which the LTTE has detained GSL troops and police,
and refused to release them for days and weeks at a
time.)

-- Strengthening the Monitors: As part of the general
effort to improve the implementation of the ceasefire
agreement, the two sides agreed "to strengthen the
mandate and capacity" of the Norwegian-run SLMM. The
two sides also agreed to "guarantee the security" of
SLMM personnel. (Note: The security of SLMM personnel
became a major issue after monitors were forced to jump
for their lives from a burning LTTE boat in February.)

-- Federalism: Reconfirming their commitment to
"develop a federal system based on internal self-
determination within a united Sri Lanka," the two sides
discussed "essential elements" of federalism, including
fiscal issues. (Note: Per Ref B, in a March 20 meeting
with the Ambassador, Prime Minister Ranil Wickremesinghe
stated that the GSL had proposed an outline regarding
long-term political issues to the Tigers. The PM was
not clear on the exact nature of the GSL's proposal. He
said the LTTE did not respond immediately, but promised
to review the proposal. In an interesting aside,
Moragoda told the Ambassador that Balasingham had told
him the following: "You know, Milinda, we can't have a
final settlement until Ranil is president." In making
this comment, Balasingham was clearly hitting out at
President Kumaratunga and others who have taken a
critical stance toward the peace process. End Note.)

-- North/East Local Elections: The LTTE indicated that
it would "favorably consider" allowing the government to
call new local elections in the north and east. (Note:
Local elections in these two regions have been postponed
for some time. In his conversation with the Ambassador,
Moragoda said Balasingham had confirmed the LTTE's
intention to consider seriously allowing these elections
to go forward.)

-- Human Rights: The press statement also reviewed a
human rights "road map" put forward by Ian Martin, a
former Amnesty International official. The road map,
among other matters, proposes that the two sides agree
to a "declaration" on human rights, and allow human
rights training for LTTE cadre and government personnel.
Per Ref B, the LTTE apparently did not sign on to the
road map at the talks, stating that it needed further
time to review it. (Note: Moragoda said Martin's
presentation at the talks provoked yawns from both
delegations.)

-- Meeting Schedule: The two sides agreed to the
following schedule of meetings:

- April 29 to May 2 in Thailand
- June 12-15 in Japan
- July 15-18 in Europe (venue to be determined)
(Note: The April/May and June dates are not new, but
the July date is.)

=============================
Chinese Fishing Boat Attacked
=============================


5. (SBU) As the talks wrapped up on March 21, reports
came in that the Tigers had apparently sunk a Chinese
fishing boat off the northeast coast in the early
morning hours of March 20. Details are still sketchy,
but it seems that small boats with armed personnel
attacked the Chinese boat about 20 or so miles off the
LTTE-controlled coastal town of Mullaitivu. According
to reports, up to 17 crew on the Chinese boat are
missing and feared dead (three bodies have been found,
so far). (Note: Most of those missing are Chinese
nationals, but some may be Sri Lankan.) The Sri Lankan
navy, which is conducting a search and rescue operation,
claims that the Sea Tigers carried out the attack. For
their part, the Tigers have vigorously denied
involvement. The SLMM is still investigating the
incident. The Chinese Embassy in Colombo has lodged a
complaint with the Sri Lankan MFA and demanded a full-
and-complete investigation.


6. (C) When asked about the mysterious incident, most
observers told us that they believed, per the available
evidence, that the LTTE almost certainly sank the boat.
They were not clear exactly why the Tigers may have done
so, however. Some speculated that the LTTE may have
felt that the Chinese fishing boat had gotten too close
to sensitive LTTE military outposts near Mullaitivu and
decided to sink the boat without checking its identity.

=======
COMMENT
=======


7. (C) The fact that the talks went as well as they did
provided a solid boost for the peace process. There had
been real fears after the March 10 incident that the
Tigers might boycott the talks or choose to use them as
a platform to criticize the government. Except for the
first day of talks when the Tigers discussed the
incident in a non-rancorous way, the LTTE did not dwell
on the incident and seemed to go out of its way to make
clear that it wanted to move forward with the peace
process. Moragoda, for one, came away with increased
confidence that the Tigers want to make the process
work, at least for now. By taking a softer tack, the
Tigers certainly made things much easier for the
government. The GSL had been taking a lot of flak from
the Opposition re the peace process and will, no doubt,
continue to do so. Nonetheless, the fact that the
Tigers were cooperative in Hakone will make it harder
for the Opposition to score political points. END
COMMENT.

========================
Suggested Press Guidance
========================


8. (U) Suggested press guidance follows below. Mission
plans to issue guidance along these lines on March 25
unless otherwise directed.

Begin text:

The U.S. has taken note of the talks between the
Sri Lankan government and the Liberation Tigers of Tamil
Eelam (LTTE) held in Hakone, Japan, from March 18-21.
We are encouraged by the substantive and comprehensive
nature of the talks, which focused on such issues as
federalism and human rights. Most importantly, we
welcome the discussions on ways to improve ceasefire
modalities. We hope these discussions will lead to a
cessation of efforts by the LTTE to smuggle arms into
Sri Lanka and prevent confrontations such as the one
which took place off the northeast coast on March 10.
It is positive that the two sides have agreed to meet
again in April/May, in June, and in July. We salute the
Norwegian government for facilitating the talks and the
Japanese government for hosting them.

Regarding the March 20 incident in which the LTTE
reportedly attacked and sank a Chinese fishing boat, we
note that information is still very sketchy. We support
a complete and immediate investigation into what took
place. We, of course, deplore the loss of life and hope
those missing will be found soon.

End text.


9. (U) Minimize considered.

WILLS