UPDATE ON NEPAL'S MAOIST INSURGENCY, MARCH 8-14

UNCLAS SECTION 01 OF 05 KATHMANDU 000471

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/RIE DEL
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

E.O. 12958: N/A
TAGS: PHUM PTER CASC PGOV NP IN
SUBJECT: UPDATE ON NEPAL'S MAOIST INSURGENCY, MARCH 8-14

REF: KATHMANDU 0311

SUMMARY
--------------


1. The Government of Nepal (GON) and the Maoists jointly
announced the signing of a code of conduct on March 13.
Dinanath Sharma, senior-level Maoist and member of the
Maoist negotiating team, arrived in the capital and met with
the major leftist political parties. Prime Minister
Lokendra Bahadur Chand called for the political parties to
put aside their differences and personal interests in order
to create lasting peace. Narayan Singh Pun, Minister of
Physical Planning and Works and government-appointed peace
talks coordinator said that now was not the time to debate
the constitutionality of the present government, but to
solve the nation's problems. The major parties boycotted,
for the second time, an all-party meeting called by Prime
Minister Chand on March 11 to discuss ceasefire
negotiations.


2. Summary Continued. Fourteen Maoists escaped from police
custody in far-western Kanchanpur District on March 8 after
beating up the guards. Imprisoned Maoists in Bhadrapur
District have launched protests. Two Maoists were released
from prison in Navalparasi District, and the Supreme Court
ordered the release of fifteen other prisoners from a
Kathmandu jail. Maoists reportedly detonated a powerful
bomb in Achham District in March 8 and destroyed a
communications tower. Four Maoists were killed on March 8
in Jajarkot District when a bomb they were carrying
exploded. Maoists reportedly have attempted to extort money
from a schoolteacher in Baglung District. The families of
two school children killed by Maoists at a Baglung District
school on February 18 (Reftel) have accused the GON of
failing to properly investigate the deaths out of fear of
disrupting the peace process. The All Nepal National
Independent Students Union-Revolutionary (ANNISU-R)
padlocked government-run colleges throughout the Kathmandu
Valley on March 9. The pro-Maoist student wing said the
lockdown would continue indefinitely. The Appellate Court
of Patan in Kathmandu reportedly issued arrest warrants on
March 12 for Maoist leaders Prachanda, Baburam Bhattarai,
and Ram Bahadur Thapa in response to the criminal cases
filed against them by the GON. On March 8 Minister Pun
reportedly said that the donor community had pledged almost
two thousand tons of food grain to feed the insurgents. A
junior minister denied Pun's statement the next day. End
Summary.

CODE OF CONDUCT SIGNED; MAJOR PARTIES REACT
--------------


3. After almost daily promises by Narayan Singh Pun,
Minister of Physical Planning and Works and government-
appointed coordinator for peace talks that a code of conduct
would be made public, the GON and the Maoists held a press
conference on March 13 and jointly announced that a twenty-
two-point code of conduct had been concluded between the GON
and the Maoists (septel). The code of conduct was signed by
Minister Pun and Dr. Baburam Bhattarai, leader of the Maoist
negotiation team. Krishna Bahadur Mahara represented the
Maoist party at the press conference because Bhattarai is
still underground. Mahara said the Maoists were committed
to a peaceful resolution, and the Maoist negotiating team,
including Bhattarai, would arrive in Kathmandu when they are
certain the code is being implemented properly.


4. The major political parties hailed the signing and
reportedly were hopeful that it signified the end of the
cycle of violence, murder and destruction, but also remained
somewhat skeptical about whether or not it would be followed
by both sides. Arjun Narsingh K.C., spokesman of Nepali
Congress (NC),was quoted as saying the code of conduct was
positive, but was hesitant to judge how helpful it would be
until it was determined that the code was being implemented
properly.

5. R.K. Mainali, member of the Communist Party of Nepal-
United Marxist Leninist (CPN-UML),said that the code should
be implemented honestly in order for lasting peace to be
achieved. Kamal Thapa, Central Member of the Rastriya
Prajatantra Party (RPP),hailed the GON's "big achievement"
in releasing details of the code of conduct. Deep Kumar
Upadhyay, Central Member of Nepali Congress (Democratic),
pledged his party's full cooperation in transforming the
ceasefire into a lasting peace.

MAOIST LEADER MEETS WITH LEFTIST PARTIES IN KATHMANDU
-------------- --------------


6. Dinanath Sharma, senior-level Maoist and member of the
Maoist negotiating team, arrived in Kathmandu and met with
the major leftist political parties on March 11. Sharma's
highly publicized arrival was the first public visit of a
senior Maoist since the announcement of the ceasefire.
Sharma declared the Maoists would join all the leftist
parties in a "united move against the King's regressive
step." (Note: The parties are protesting the King's
decision to dissolve the previous government on October 4,
2002). Sharma also told reporters that he considers the
government under Prime Minister Chand illegitimate, and
reiterated that the Maoists are in negotiations with the
state (i.e., King Gyanendra) and not the Prime Minister.


7. Prior to the signing of the code of conduct, Sharma
reportedly accused the GON of delaying the peace process and
said the GON was "not serious and sincere for talks."
Sharma said the Maoists had expected to start talks by the
end of February, but the GON had not created a conducive
environment. Minister Pun downplayed criticism of the GON,
declaring on March 9 that lasting peace would not be
attained simply by rushing the peace process.

PRIME MINISTER URGES PARTY COOPERATION
--------------


8. On March 10 Prime Minister Lokendra Bahadur Chand called
for the political parties to put aside their differences and
personal interests in order to create lasting peace. The
Prime Minister urged party leaders to "forget the bitter
past and unite for permanent peace." The major parties
boycotted, for the second time, an all-party meeting called
by Prime Minister Chand on March 11.
They had boycotted a previous all-party meeting to which
they were invited by Chand on February 17.


9. Minister Pun echoed the Prime Minister's remarks on
March 10, saying that now was not the time to debate the
constitutionality of the present government, but to solve
the nation's problems. Pun said that the GON had made
sincere efforts to include the major political parties in
the peace process, and reiterated that people should "rest
assure about the success of the talks."

SKEPTICISM PERSISTS ABOUT PEACE TALKS
--------------


10. Local political analysts reportedly are wary of the
future of the peace talks because of the discontent among
the major political parties and the GON's dependence on
military action to solve the current crisis. According to
press accounts, analysts who gathered on March 12 to discuss
the current political situation, contended the GON still
believes that it can solve the current crisis through
military action, as evidenced by its refusal to order the
army back to the barracks. They are also concerned that
lasting peace cannot be achieved without the support of the
political parties.


11. Local human rights activists sympathetic to the Maoists
gathered on March 12 to urge both the GON and the Maoists to
come up with clear agendas and make adequate preparations
for the peace talks. The activists reportedly accused the
GON of not taking matters seriously, not learning enough
about Maoist ideology, and being ill prepared. They warned
that these were part of the reason why talks had failed
previously.


12. Sher Bahadur Deuba, President of Nepali Congress
(Democratic),said on March 7 that the Maoists should fully
commit to stop all violence and extortion, declaring that it
would be "suicidal" if the Maoists turn their back on the
talks again. Deuba also reiterated his party's opposition
to the King's dissolution of the previous government on
October 4, demanding that the King reinstate the elected
government.

MAOIST JAILBREAK
--------------


13. Fourteen Maoists escaped from police custody in far-
western Kanchanpur District on March 8 after beating up the
guards. Among the escapees are platoon leaders and section
commanders of the so-called Maoist Peoples Army. The
insurgents had been arrested on weapons charges. The
suspects are still at large and an investigation into the
jailbreak is underway.


14. The Supreme Court ordered the release on March 13 of
fifteen Maoists from a Kathmandu jail. The detainees had
been in custody on suspicion of being involved in terrorist
activities. The District Administration Office in
Navalparasi released two suspected Maoists from jail on
March 12, and said that nine other prisoners might also be
released after the necessary paperwork is completed.
Prisoners in Bhadrapur District have launched protests
demanding their release from custody. The detainees have
staged different protests for the past two weeks, and have
planned another for March 23. There are currently two
hundred and seventy-four inmates at the district jail.

CONTINUED VIOLENCE
--------------


15. Maoists reportedly set off a powerful bomb in Achham
District on March 8 and destroyed a communications tower.
Telecommunications had only been restored recently after a
previous attack on the tower by the insurgents caused major
damage. However, sources in the district say that the tower
is now beyond repair. Four Maoists were killed on March 8
in Jajarkot District when a bomb they were carrying
exploded.


16. In Baglung District insurgents allegedly approached a
teacher on March 12 and threatened him with physical harm if
he did not give them almost a thousand dollars.


17. Senior level Maoists in Dang District announced on
March 8 that they would return over half a million dollars
in gold that the insurgents looted from the Nepal Bank
Limited in the district headquarters. The insurgents said
the gold would be returned if the villagers could produce
genuine bank documents proving ownership.

GON ACCUSED OF COVERUP IN DEATH OF CHILDREN
--------------


18. The families of two school children killed by Maoists
at a Baglung District school on February 18 (Reftel) have
accused the GON of failing to investigate properly the
deaths out of fear of disrupting the peace process.
District representatives from the Communist Party of Nepal-
United Marxist Leninist (CPN-UML),Nepali Congress (NC),
Nepali Congress (Democratic),and the Peoples Front Party
(PFP) also issued a press release accusing the GON of bowing
to Maoist threats not to investigate the killings. The
parties reportedly said the killings were well planned and
said the Maoists and the GON are "trying to hide the facts."
The press release also says there have been other similar
incidents despite the ceasefire.

COURT ISSUES ARREST WARRANTS FOR MAOIST LEADERS
-------------- --


19. According to press accounts, the Appellate Court of
Patan in Kathmandu Valley issued arrest warrants on March 12
for Maoist leaders Prachanda, Baburam Bhattarai, and Ram
Bahadur Thapa in response to cases filed against them by the
GON. The warrants declare that the Maoists have to appear
before the court within seventy days. There has been no
response from the insurgents.

ANNISU-R PADLOCKS COLLEGES
--------------


20. The All Nepal National Independent Students Union-
Revolutionary (ANNISU-R) padlocked branches of government-
run Tribhuvan University throughout the Kathmandu Valley on
March 9. Over half a dozen colleges were locked up by the
militant student wing of the Maoist party. Dipendra Pant,
Chairman of the Kathmandu District of ANNISU-R, said the
lockdown would continue indefinitely unless the GON met
their five-point demands. The demands include the release
of all imprisoned students; the release of information on
the whereabouts of Purna Poudel, General Secretary of ANNISU-
R; an immediate end to arrests of pro-Maoist students; a ban
on security forces inside campuses; and the admission of pro-
Maoist students to government-run universities.


21. The ANNISU-R issued an additional seventy-two hour
ultimatum on March 13 threatening further lockdowns if the
whereabouts of their comrades were not made public. The
militants also demanded that all detained and missing
students be released by March 19.


22. The Ministry of Education reportedly has contacted the
ANNISU-R for talks, and Minister Pun sent a letter on March
10 to the ANNISU-R inviting them to the negotiating table
and declaring that the GON was ready to solve the problem as
soon as possible. (Note: The ANNISU-R withdrew a call for
a nationwide strike of educational institutions last month
after the announcement of the ceasefire). As of March 14
the campuses remain locked.

GON TO PROVIDE FOOD TO MAOISTS
--------------


23. There are conflicting reports over whether or not the
GON has promised food to the Maoists. On March 8 Narayan
Singh Pun, Minister of Physical Planning and Works,
reportedly announced that the donor community had pledged
almost two thousand tons of food grain to feed Maoist cadre.
Minsiter Pun was quoted as saying that the insurgents often
resort to looting because they do not have sufficient
clothing and food, and therefore, the GON was offering the
food to stop the need for looting. However, on March 9,
just one day after Pun's statement, Rabindra Khanal,
Assistant Minister of Education and Sports, denied that the
GON was offering food to the Maoists. Khanal issued a
strong statement saying the GON had not reached any decision
to provide food.
MALINOWSKI