NEPAL: MAOISTS TURN UP HEAT ON NGOS, AID AGENCIES

C O N F I D E N T I A L SECTION 01 OF 03 KATHMANDU 000846

SIPDIS

STATE FOR SA/INS
STATE ALSO PASS USAID
LABOR FOR ILAB - VIVITA ROZENBERGS
LONDON FOR POL - GURNEY
NSC FOR MILLARD

E.O. 12958: DECL: 05/02/2014
TAGS:
SUBJECT: NEPAL: MAOISTS TURN UP HEAT ON NGOS, AID AGENCIES
IN SOUTHWEST

REF: A. KATHMANDU 229

B. KATHMANDU 833

C. KATHMANDU 465

Classified By: CDA JANET BOGUE. REASON: 1.5 (B,D).

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


1. (C) According to NGO contacts, Maoists in five
southwestern districts are increasing extortion demands and
escalating pressure on local and foreign NGOs, including one
U.S.-based NGO, and bilateral aid agencies to sign agreements
with the so-called "Tharuwan People's Autonomous Government,"
declared by the Maoists on January 27. Although no one has
been hurt so far, offices of several NGOs that refused to
comply with the Maoists' demands were bombed on April 27 and
29; another was burned down on May 1. The Dutch aid agency
SNV is reportedly suspending operations in Nepalgunj because
of Maoist threats. Despite Maoist rhetoric lambasting
U.S.-funded aid programs, no USAID-sponsored activity has
been targeted in the five districts. The new push to require
that foreign-funded NGOs and aid agencies clear their
development programs through local Maoist "people's
governments" may indicate that the insurgents are seeking
ways to claim legitimacy and recognition for their various
ethnic "autonomous" regions. End summary.

--------------
TROUBLE IN THARUWAN BELT
--------------


2. (C) According to Robin Needham, Country Director for CARE
Nepal (protect),the local Maoist leadership in five
districts in southwestern Nepal has intensified pressure on
local and foreign NGOs, including CARE, and three European
aid agencies to sign agreements with the self-proclaimed
Maoist "autonomous government" in the region. In addition,
local Maoist commanders have increased their extortion
demands on the agencies and organizations, reportedly
pressing for 10 percent of project costs as a "tax." In
addition to CARE, the organizations targeted are ActionAid, a
British NGO; DFID, the British aid agency; GTZ, the German
aid agency; and SNV, the Dutch aid agency. (Note: Although
CARE is a U.S.-based NGO, the particular project targeted by
the Maoists is funded by European donors. End note.)


3. (U) According to NGO sources, the demands are made in
the name of the so-called "Tharuwan autonomous regional
government," which was declared by the Maoists on January 27.
(Note: The Maoists declared nine "autonomous" regional
governments--all but one associated with a particular ethnic
minority--in different parts of the country in late January
and early February. End note.) The purported Tharuwan
regional government encompasses the five districts of
Kanchanpur, Bardiya, Banke (where the Royal Nepal Army's
Western Division is headquartered in Nepalgunj),Kailali and
Dang, located along Nepal's southwestern border with India,
where most of the population of the Tharu ethnic group is
concentrated. (Note: The Kamaiyas, former bonded laborers
who are among Nepal's most oppressed groups, are largely
Tharu. End note.)


4. (C) CARE's Needham reported that since early April local
Maoists operating in these five districts have made a
concerted push to pressure donor agencies and organizations
to apply to the "autonomous regional government" for work
permits, to register with the "government" and to sign
bilateral aid agreements with the "government." As far as he
knows, none of the agencies has complied with these demands.
In addition, Needham noted, extortion demands have increased
markedly to as much as USD 5,700 per agency. In some cases,
agencies have been threatened with vague but "serious
consequences" for non-compliance. In CARE's case, the Maoist
caller phoning in the demand (who identified himself as the
"NGO/INGO Coordinator"),asked for the funding to assist the
newly founded "government" in "this difficult situation" as
it established itself. Referring the request to CARE
headquarters would not be satisfactory, the caller indicated.
(Note: Many NGOs and some businesses deflect Maoist demands
for money by claiming they lack the authority to make such
decisions in the field and referring them to corporate
headquarters. End note.) Needham said he has instructed all
of his staff to listen politely if contacted by the Maoists,
to note down carefully all subjects discussed and demands
made, but not to commit to sign any agreements, register any
projects or pay any "taxes." GTZ has drafted guidelines for
its staff to follow when confronted with the demands.
Poloff's question as to whether the aid agencies had reported
the threats and demands to local authorities was greeted with
amusement.

--------------
POST-BANDH BOMBINGS
--------------


5. (C) According to Needham, the NGOs and aid agencies have
complained to contacts with Maoist links about the local
commanders' aggressive new style. Following the complaints,
the person who had been making the phone calls was replaced
with another individual, who has persisted in making the same
demands. When foreign NGOs and aid agencies in Nepalgunj,
including CARE, defied a local strike, or "bandh," called by
the Maoists, they each received threatening phone calls
demanding they remain closed during future bandhs or face
"consequences." (Note: UN agencies appear to be exempt from
such pressure. When a Maoist called the local ILO office to
complain that it was open during the recent bandh and was
informed that ILO is a UN agency, he reportedly apologized
and hung up. End note.)


6. (C) Needham said CARE offices in the southwest have not
heard from the Maoists since the bandh (on or about April
21),but other NGOs and agencies have. On April 27 three
Maoists were killed while setting a bomb at an office of the
Lutheran World Federation (LWF) in Kailali (Ref B). On April
29 suspected Maoists set off explosive devices at an office
of the Dutch aid agency SNV and the NGO PLAN International in
Nepalgunj and an office of CCS, an ILO partner, in Kailali.
The explosions took place early in the morning before staff
arrived and caused only minimal damage. On May 1 the office
of KPUS, a local NGO working with ILO, was burned down in
Kailali. A Maoist caller threatened SNV personnel with
physical harm unless the agency closed down its operations.
As a result, SNV has reportedly decided to suspend its
operations in Nepalgunj for now.

--------------
THE AMERICAN ANGLE
--------------


7. (C) Despite the Maoist penchant for anti-US rhetoric,
none of the projects targeted in these districts receives
direct U.S. funding. (PLAN receives some funding from USAID
but not for its activity in Nepalgunj. As noted in Para 2,
the CARE project in Nepalgunj is funded by European donors.
LWF receives no USG funding for its project in Kailali.) In
fact, Needham commented, CARE, which operates in 35 districts
in Nepal and receives funding from a variety of donors, has
never been directly challenged on the source of funding for
individual projects. Even more interesting, Save the
Children -US, which maintains an office in Nepalgunj, has not
been targeted by the "autonomous government" and reports no
threatening phone calls or pressure to sign agreements. (On
the other hand, as noted Ref C, SAVE has had problems in the
southeastern district of Siraha.)

--------------
COMMENT
--------------


8. (C) While NGOs, businesses and private Nepali citizens
across the country regularly report receiving extortion
demands from the Maoists, the concerted push to persuade NGOs
and bilateral aid agencies to sign agreements, apply for
"work permits" and register--indeed, to fulfill all the same
requirements as with the Government of Nepal (GON)--seems
limited, for now at least, to the five districts of the
Tharuwan belt. NGO representatives in this area describe a
situation in which local Maoists operate with apparent
impunity within district headquarters and larger cities and
are attempting to replicate, at least in part, the internal
structures of a parallel government. The leaders of the
"autonomous government" in this area are plainly trying to
gain legitimacy and income--and perhaps some credit for the
development assistance provided by these agencies--by
asserting authority over all activities in the region. The
agencies obviously believe it fruitless to report their
problems to local GON authorities--even though the Army's
Western Division is headquartered in Nepalgunj--and are
developing their own policies and operating guidelines in
response to the situation. For whatever reason--whether
poor intelligence about sources of funding, personal
relationships with local staff of individual NGOs, or a
calculated decision not to confront the U.S.--the Maoists so
far have steered clear of U.S.-funded programs in these five
districts.
BOGUE