GUARDED PROGRESS FOR MINDANAO PEACE PROCESS

C O N F I D E N T I A L SECTION 01 OF 03 MANILA 000518

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/26/2018
TAGS: PREL PINS KISL RP
SUBJECT: GUARDED PROGRESS FOR MINDANAO PEACE PROCESS

REF: A. MANILA 0455 (AMBASSADOR URGES MILF CHIEF TO
EMBRACE PEACE)

B. MANILA 0454 (PRESIDENT ARROYO COMMITTED TO PEACE
PROCESS)

C. MANILA 0238 (PRESIDENT ARROYO REVISES MILF PEACE
PROPOSAL)

D. 07 MANILA 4016 (METHODICAL PROGRESS IN MINDANAO
PEACE TALKS)

E. 07 MANILA 3728 (MINDANAO PEACE PROCESS MOVES
FORWARD)

Classified By: Ambassador Kristie A. Kenney for reasons 1.4(b) and (d).


1. (C) Summary: Philippine government Peace Panel Chairman
Rudy Garcia told us February 25 that the government and the
Moro Islamic Liberation Front had reached an agreement in
principle on the territory to be encompassed by a new Muslim
political entity, and work on governance and ownership of
natural resources was making progress. Garcia anticipated
that an agreement could be signed by mid-April. Meanwhile,
Moro Islamic Liberation Front negotiators painted a less
optimistic picture. While acknowledging that an agreement on
territory is within reach, they voiced concern over the
potential negative impact that Manila's political turbulence,
conservative Philippine cabinet members, and powerful
business interests could have on the process. While
independence is not on the agenda in the peace talks, Muslim
peace negotiators said that some in Muslim Mindanao viewed
international recognition of Kosovo as changing the rules of
the game within the international community. End Summary.


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Government Cautiously Optimistic
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2. (C) Philippine government Peace Panel Chairman Rudy
Garcia told us February 25 that the government and the Moro
Islamic Liberation Front had reached an agreement in
principle on the territory to be encompassed by a new Muslim
political entity, and that work on governance and ownership
of natural resources was making progress. Garcia anticipated
that an agreement could be signed by mid-April, possibly in
Kuala Lumpur, and might include the foreign ministers of the
Philippines and Malaysia, which is facilitating the peace
negotiations.

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New Draft Proposals Under Review
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3. (C) Sullivan said that the Malaysians would be doing some
"informal shuttling" during the weeks ahead to review the
government and MILF's respective draft territorial
agreements. Sullivan noted that the government's new draft
proposal was approved by the Philippine Cabinet with some
minor changes and "a couple of major changes." According to
Sullivan, the Philippine Cabinet wants to defer discussions
on such contentious issues as governance until after the
signing of a territorial agreement. The Philippine
government's latest proposal includes a counteroffer to the
MILF on revenue sharing (i.e., production, royalties,
commissions, fees) from strategic minerals such as petroleum,
natural gas, copper, nickel, and gold, according to Sullivan.
President Arroyo is amenable to the MILF receiving a
majority share of the revenue from strategic minerals, though
the exact percentages have to be worked out, commented
Sullivan.

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Commercial Zones for Muslim Homeland
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4. (C) Sullivan said both parties have already reached a
consensus on the concept and major strands of a territorial
agreement. There is a clear understanding of the conceptual
basis and historical underpinnings of the prospective
"Bangsamoro homeland" which is to include Muslim-majority
villages contiguous to the Autonomous Region in Muslim
Mindanao (ARMM),a commercial zone on the Zamboanga
Peninsula, and the southernmost portion of Palawan, including
Balabac Island, noted Sullivan. The commercial zone was
described by Sullivan as clusters of villages in Zamboanga
del Sur and Zamboanga Sibugay Provinces, and the Sacol Island
in Zamboanga City where the MILF plans to establish ports and
commercial centers.


5. (C) Sullivan said that a congressionally approved
plebiscite would be conducted within six months following a
territorial agreement. The Philippine government peace panel

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is studying the possibility of amending the Organic Act of
the ARMM (Republic Act 9054) to include the additional
territories in the new Muslim political entity. In
Sullivan's view, the signing of a territorial agreement could
encourage some Muslim hardliners to support the MILF peace
process; neutralize the more "conservative" members of the
MILF; and instill a sense of urgency, and, perhaps more
flexibility, in negotiations for a final peace agreement.


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MILF Concerned Over Political Turbulence
--------------


6. (C) Moro Islamic Liberation (MILF) Peace Panel member
Musib Buat and MILF Peace Panel Technical Working Group
Chairman Abdullah Camlian expressed concern over the impact
of political turbulence in Manila on the MILF peace talks.
Buat and Camlian also expressed concern over "hardline"
members of the Philippine Cabinet and powerful business
families with economic interests in Mindanao who might not
see a peace agreement as favorable to their interests.
Despite these "obstacles," Buat said a change of government
at this juncture could set the MILF peace talks "back to
square one" on some key issues. The MILF has since come out
publicly against the calls by some Philippine political
groups for the resignation of the President.

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Territorial Agreement Needed
--------------


7. (C) Buat emphasized the importance of a territorial
agreement to the momentum of the peace talks. To avoid
another impasse in the negotiations, Buat said that the
contentious issue of a constitutional process and specifics
of governance and ownership of natural resources would be
tackled after the signing of a territorial agreement. While
underscoring the significance of a proposed five- or six-year
transition period following the signing of a peace agreement
-- during which time all elected local officials would be
allowed to complete their terms in office -- Buat expressed
concern over the upcoming August 2008 elections within the
ARMM. The MILF Central Committee is hoping to sign an
ancestral domain agreement with the Philippine government by
June 2008 to avoid "locking in" another group of elected
officials until 2011, commented Buat.

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Good Governance and Transparency
--------------


8. (C) Buat and Camlian expressed support for good
governance, transparency, and effective anti-corruption
measures during the transition period and beyond. Buat noted
that corruption within the ARMM is endemic and must not be
repeated in a new Muslim political entity. The people will
be watching the MILF's performance very closely, and if it is
"business as usual," the MILF leadership will be discredited,
commented Camlian.

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MILF-MNLF Unity
--------------


9. (C) Buat described a merger of the MILF and Moro National
Liberation Front (MNLF) as "impractical" for two reasons --
the MNLF remains factionalized and key MNLF members have
become part of the Philippine government. Nonetheless, the
lines of communication between the MILF and MNLF are open and
there is regular dialogue, emphasized Buat, while noting that
"old alumni" of the MNLF -- with exception to detained MNLF
Chairman Nur Misuari -- regularly meet with MILF Chairman
Murad Ebrahim. Camlian claimed that many of the up and
coming young leaders of the MILF are secular and more
western-educated and -leaning than the aged MILF Central
Committee members that graduated from Al-Azhar University in
Egypt. The latter are now a minority, commented Camlian.

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Kosovo Independence
--------------


10. (C) Camlian said that some in Muslim Mindanao viewed
international recognition of Kosovo's February 17 declaration
of independence as a "historic event," perhaps even with
implications for the creation of a new Muslim political
entity in Mindanao. In a February 18 statement, MILF
Committee on Information Deputy Chairman Khaled Musa noted
that "the taboo has been shattered and no state can argue

MANILA 00000518 003 OF 003


that secession or independence is not within the rule of the
game in the United Nations. What is prohibited for decades
is now a virtual part of international law."

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Comment
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11. (C) While timelines differ, both sides appear more
confident at this point that a territorial agreement is
within reach. Even the concerns voiced by the MILF on
political instability are couched in terms of how to keep it
from hindering progress, not in how to use it to retard the
process. Hard bargaining remains on the more contentious
issues of governance for the expanded Muslim political
entity, and the complexity could grow if the Philippine
Cabinet seeks to amend the constitution to allow federal
status not only for Muslim Mindanao, but all the country's
regions. The comments on Kosovo independence represent
wishful thinking on the part of some in Mindanao, but do
underscore the reason why the Philippine government has moved
with such caution on the question of recognizing Kosovo.


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KENNEY