U.S.-NEPAL POLICY AT THE CROSSROADS: SUPPORTING A

C O N F I D E N T I A L KATHMANDU 003000 SIPDIS SIPDIS E.O. 12958: DECL: 11/06/2016 TAGS: PGOV PTER MARR EAID UN EU NP SUBJECT: U.S.-NEPAL POLICY AT THE CROSSROADS: SUPPORTING A SUSTAINABLE PEACE Classified By: Ambassador James F. Moriarty. Reasons 1.4 (b/d) Summary -------------- ¶1. (C) With the governing Seven-Party Alliance and the Maoists in their second straight day of marathon peace talks, there is increasing expectation in Kathmandu that a peace deal might be on the way. While the text of an actual agreement or agreements could be delayed, the outlines of how Maoist arms will be managed has already become much clearer. The peace parley is happening just as the Communist Party of Nepal (Maoist) (CPN-M) is ratcheting up its demands on the public in Kathmandu and gearing up for a mass rally on November 10. The rally, at which CPN-M chairman Prachanda will be the main speaker, could be used to hail a peaceful Maoist victory through negotiations or for something more sinister. ¶2. (C) Embassy Kathmandu is focused on how we can assist Prime Minister Koirala and the Government of Nepal in eliminating the threat of Maoist violence, ensuring robust monitoring of Maoist abuses and restoring law and order. We are targeting our attention on domestic actors and institutions such as the cease-fire and human rights institutions, but external actors are also crucial. In our view, a more robust UN role and positive EU engagement are indispensable. The possible entry of the CPN-M insurgents into an interim Nepali government will also require reconsideration of our assistance to Nepal and other steps. End Summary. Update on the Peace Talks -------------- ¶3. (C) According to senior leaders of the Nepali Congress Party (NC),the Communist Party of Nepal - United Marxist Leninist (CPN-UML) and the Nepali Congress-Democratic (NC-D), it is possible that the Government of Nepal (GON) will reach a peace deal with the Maoists soon. Arjun Narsingh of the NC, Jhalanath Khanal of the CPN-UML and Prakash Mahat of the NC-D told Emboff November 7 that after six hours of talks on November 6 and several more on the morning of November 7, the governing Seven-Party Alliance (SPA) had agreed on how to manage Communist Party of Nepal (Maoist) (CPN-M) arms. Narsingh, Khanal and Mahat, all of whom were participating in the discussions, indicated that talks the afternoon of November 7 would attempt to resolve the remaining open political issues. These included the future of the monarchy and questions about the system to use for elections to the planned Constituent Assembly. Maoist leaders are also telling the Nepali press a deal is imminent. Outlines of the Arms Management Deal -------------- ¶4. (C) Prime Minister Koirala and Maoist Supremo Prachanda reached an understanding on the basic outline of how to handle Maoist arms at a meeting November 5. Ian Martin, the UN Secretary General's representative to the peace process, who was present, told the Ambassador November 6 that the two sides had settled on a single-key with monitoring formula. The CPN-M had agreed, he said, to send the People's Liberation Army (PLA) into camps and lock up PLA and Maoist militia weapons. The weapons would be stored in seven PLA divisional cantonments. The divisional Maoist commander would have the only key. The arms caches would be alarmed and under twenty-four hour UN surveillance with cameras and human monitors. The UN is confident that this arms management regime can be implemented, but is short on specifics, in particular how it will respond to violations. An additional 21 PLA battalion camps, Martin indicated, would be located near their corresponding divisional cantonments. The UN representative added that the GON had agreed that the Maoists could retain a small, unspecified percentage of weapons to protect the camps. Mahat told Emboff November 6 that it would be very difficult for the other SPA parties to walk back the November 5 deal the PM had signed off on, even though the CPN-UML and NC-D as well as many in NC preferred two keys or at least a single key with a UN seal. Maoists Ramp Up Threats -------------- ¶5. (C) At the same time that the Maoists have been negotiating with the SPA, they have been ramping up their demands on the residents of the Kathmandu Valley. In contrast to past extortion campaigns, in recent days, the CPN-M have been approaching Americans and other foreigners, in addition to Nepalis (including LES staff),demanding that they provide food or shelter to Maoist cadre. The Ambassador is raising the issue with Home Minister Sitaula. We have also approached the PM's office, the Foreign Ministry, other Embassies, and human rights organizations, including the UN, to register our concern and demand action. Affected AmCits and Nepalis have told us that Maoists cite the November 10 mass rally in downtown Kathmandu as the justification. The Newa Muchti Morcha ("Newar Liberation Front"),a Maoist front organization supposedly dedicated to the rights of the Valley's original inhabitants, was the organizer of the rally. Citing technical difficulties, the Front announced November 7 that the CPN-M would arrange the event. Prachanda is scheduled to speak for two hours. It will be his first public address to a large gathering in the capital since the cease-fire. The Maoists are claiming they will attract several hundred thousand spectators. Rally's Purpose Unclear -------------- ¶6. (C) Speculation is rife about the purpose of Friday's rally. Some Embassy sources indicate that it will serve as a victory party for the Maoists. They want to celebrate the peace deal, which they anticipate will be signed this week. Another theory is much less comforting. Other Embassy sources report that the Maoists might use the presence of huge numbers of their supporters to attempt some unfriendly step. As it happens, the site of the rally is close to Nepal Army headquarters. Eliminating the Maoist Threat -------------- ¶7. (C) In our view, the arms management agreement is only one element of a package of measures which the GON needs to take in order to eliminate the ability of the CPN-M to threaten the people of Nepal and ensure free and fair elections to the Constituent Assembly in 2007. The arms agreement, if it turns out to be predicated on a single key held by the Maoists, will probably be weak, but what is perhaps more important is how Nepalis perceive it. Press reporting early November 7 indicated that the Maoists were resisting efforts to incorporate their arms management commitments into the written peace accord. We are firmly of the opinion that not only must these commitments be memorialized but they must also be widely publicized and backed up with credible and strong verification and monitoring -- both domestic and international. Domestic Efforts -------------- ¶8. (C) Through USAID, the USG is already providing assistance to the Peace Secretariat, which in turn has assisted the Government of Nepal in preparing for and conducting the current negotiations and in developing the idea of local peace councils. USAID assistance to the National Monitoring Committee for the Cease-fire Code of Conduct (NMCC) is also helping that institution, although flawed, to provide some level of monitoring of Maoist abuses. Through USAID's Office of Transition Initiatives, the U.S. is investigating the possibility of aiding the National Human Rights Commission and leading human rights NGOs. The USG already provides assistance to the UN's Office of the High Commissioner for Human Rights, which plays an important monitoring role. USG training and technical assistance to the Armed Police Force and the Nepal Police have given those institutions greatly needed support at a time when the Prime Minister has decided not to enforce law and order with respect to the Maoists. USAID is also assisting other key domestic institutions such as the Nepal Election Commission. Increasing UN Engagement -------------- ¶9. (C) While post greatly appreciates the decision by the UN Secretary General to deploy Ian Martin and a small team of SIPDIS advisors to Nepal to assist with the peace process, the time appears to have come for more robust UN engagement. Nepal's Chief of Army Staff General Katawal told the Ambassador November 5 that he expects the UN to send 150 monitors to Nepal to keep an eye on the Maoist cantonments -- 75 military and 75 retired military in civilian dress. Martin told the Ambassador that he was exploring the idea of a much more robust UN mission involving international police advisors. The idea would require UN Security Council approval but he theorized that it might be obtainable. The Government of India's views on active UN involvement in Nepal have changed dramatically, he said. The Ambassador wondered if it would not be useful for the UN Security Council, perhaps through a presidency statement, to acknowledge any peace agreement reached. A UNSC resolution or Presidential statement that any attempt by the CPN-M to take its weapons out of the arms caches would be a step against the international community as a whole would, the Ambassador stated, contribute significantly to reassuring the Nepali public. If a UNSC statement were unobtainable, perhaps a statement by the Secretary General to that effect could be a possibility. SIPDIS Increasing Positive European Engagement -------------- ¶10. (C) One of the main purposes of the European Union troika visit to Kathmandu the week of November 13 will be to assess how best the EU can contribute to implementation of any peace deal and election preparation. General Katawal told the Ambassador that none of the UN monitors will be American or Indian. Presumably, most will be Europeans. The Norwegian Embassy has indicated to Emboff recently that Norway might provide 5 to 10 and the British Embassy said much the same. Post also anticipates that the EU will send an election observation mission to Nepal, although there has been no formal announcement yet. As the Prime Minister has told the Ambassador on many occasions, including during their meeting on November 3, the EU's efforts to meet at the highest levels with the Maoist leadership have been counterproductive from a GON point of view. While post does not believe the EU can be dissuaded from increasing its contacts with the Maoists, it may be possible to reach a common understanding in certain areas. This might include condemnation of CPN-M threats against U.S. and EU nationals in Nepal as well as Maoist threats against donor agencies in the countryside. Entry of Maoists Into Government and U.S. Assistance -------------- -------------- ¶11. (C) While we do not put much stock in press reports that the Maoists could enter an interim government within as little as fifteen days of signing a peace deal with the GON (45 days seems more likely),the possibility of their entry into government can no longer be ignored. Post is in the process of identifying all of our assistance programs which provide aid directly or indirectly to GON institutions or organizations. The objective is to identify in advance which ones may need to be reviewed in the event the Maoists do join the government. Our intention is also to seek Office of Foreign Asset Control waivers for those programs which may require them and which we believe will help reduce the Maoist ability to threaten the people of Nepal. Comment -------------- ¶12. (C) This is not the first time a peace deal has appeared imminent. A deal could be delayed by any number of issues. The Indian Charge told the DCM November 6 that she was confident that internal contradictions within the Seven-Party Alliance would hold up a final agreement for weeks yet. Regardless, the United States must remain actively engaged in shaping the process in a way which will lead to a Nepal that is peaceful, prosperous and democratic. MORIARTY