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
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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