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Cablegate: Presidential Delegation Attends 10th Anniversary Of

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1. (U) Summary: A Presidential Delegation attended a
series of official events from August 29-31 commemorating the
10th anniversary of the Popular Consultation that led to
Timor-Leste's independence. Meeting separately with Prime
Minister Gusmao and President Ramos-Horta, the Delegation also
held substantive and straightforward discussions on some of the
key challenges facing Timor-Leste in the coming years, including
achieving justice and reconciliation for the political crimes
committed since 1974, conducting essential reforms in the
security sector, and implementing an economic growth strategy
for the impoverished, underdeveloped country using its energy
revenues. End Summary.

2. (U) A U.S. Presidential Delegation consisting of
Ambassador Hans Klemm, former Ambassador to the OAS and Deputy
Director of USAID Harriet Babbitt, and former Ambassador to the
U.N. Nancy Soderberg attended a series of official events from
August 29-31 commemorating the 10th anniversary of the August
30, 1999, Popular Consultation that led to Timor-Leste's
independence. In separate private meetings on August 31 both
Prime Minister Xanana Gusmao and President Jose Ramos-Horta
welcomed the delegation and expressed their gratitude for U.S.
support. Ramos-Horta, in particular, pointed out that U.S.
political support was critical to Indonesia's ultimate agreement
to normalize relations with Timor-Leste. The Delegation members
for their part told both leaders that their presence for this
auspicious occasion was intended by the White House to
underscore the abiding friendship and interest that the United
States has in Timor-Leste. Other foreign dignitaries in
attendance at the official events included the Governor-General
of Australia, the Indonesian and Portuguese Foreign Ministers,
the Speaker of the Portuguese Parliament, the U.N. High
Commissioner for Refugees (and former Portuguese Prime
Minister), the Angolan Minister of Education, the Cuban
Vice-Minister of Health, and two former Special Representatives
of the U.N. Secretary-General.

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"Justice will take its course... slowly"


3. (SBU) In a televised address at the opening ceremony,
President Jose Ramos-Horta eulogized the late Senator Edward
Kennedy and honored his commitment to the common people. The
highlight of his remarks, however, was his forceful call for an
amnesty for all political crimes committed in Timor-Leste
between 1974 and 1999. Rejecting calls from "primarily abroad
in the West" for the establishment of an international tribunal,
Ramos-Horta said that "ten years after the Popular Consultation,
we must put the past behind us." (Note: Amnesty International
issued a report on August 27 in which it called for the
establishment of an International Tribunal.) Ramos-Horta also
called for the disbanding of the U.N. Serious Crimes Unit tasked
with investigating human rights violations committed in 1999.

4. (SBU) Later asked to comment on the President's speech,
PM Gusmao explained to the Delegation that this is not merely an
issue between Timor-Leste and Indonesia. Before Indonesia
invaded in 1975 and during the resistance to the Indonesian
occupation, the Timorese were embroiled in a "civil war" in
which "we killed our own comrades" and almost everyone got their
hands bloody. The current policy of forgiveness stems not from
a "generosity" towards Indonesia, but from self-interest in
avoiding reopening fissures that could tear the country apart.
Gusmao claimed that a national process of examining history and
uncovering truth already has taken place and that the public is
ready to move forward, but conceded that political maneuvering
in the parliament continues to make this a contentious issue.
Separately, the opposition Fretilin party roundly criticized the
President's speech and continues to call for debate on a
1975-1999 human rights report, despite having avoided such a
debate during its own time in government. In a sign that this
remains a contentious issue, moreover, protestors staged rallies
at several sites over the weekend in response to the President's
speech and the subsequent August 30 release of Martenus Bere, a
Timorese from Indonesia accused of crimes against humanity, who
had been detained during recent travel to Timor-Leste (SEPTEL).

5. (SBU) Ramos-Horta himself defended his call for an

DILI 00000230 002.2 OF 004

amnesty by noting to the Delegation that in his extensive
travels around the country he hears "not a word about justice, "
instead people raise only economic concerns. Ramos-Horta
conceded that Indonesia is unlikely to bring its own citizens to
justice for crimes committed in Timor-Leste (they have not done
so for crimes committed against other Indonesians), but
maintained that they may eventually do so, perhaps sooner rather
than later. In the meantime, "why go after small militia, the
foot soldiers of the Indonesian military, when we don't have the
courage to go after the Indonesian military directly?" Like
Gusmao (who mentioned the fact that thousands of Timorese are
students at Indonesian universities), Ramos-Horta cited
practical concerns, including cross-border trade, as the
immediate GOTL priority. "Justice will take its course, " he
said "slowly."

Security sector reform remains a key challenge

--------------------------------------------- -

6. (SBU) Asked about ongoing efforts to ensure stability
and avoid another 2006 crisis by conducting critical security
sector reforms, both Gusmao and Ramos-Horta claimed some measure
of success. Gusmao accused the previous government of being
narrow-minded, maintaining an anachronistic mentality in its
leadership, and politicizing the security forces. "Now, " he
said "the institutions [the police and the military] cooperate.
" Gusmao cautioned on the need to take care of the older
generation of soldiers while still preparing and
professionalizing the new generation. Similarly, he argued for
restraint in acceding to U.N. demands to dismiss police officers
suspected of human rights violations, noting that such action
could lead to grievances, a new set of "petitioners," and even
"revolution." Gusmao estimated that even with the help of the
U.N. police (UNPOL) as monitors it would still take another two
years to clean up and reshape the police.

7. (SBU) Ramos-Horta blamed both the previous government
under Mari Alkatiri and then-President Gusmao for the lack of
leadership that led to the 2006 crisis. After assuming the
Presidency, Ramos-Horta claimed to have established a regular
mechanism to coordinate security issues with the Prime Minister
and President of the Parliament and has consulted regularly with
the opposition political parties. As a result, he said, the
issue has been somewhat depoliticized and the situation is
improving. Like Gusmao, however, Ramos-Horta argued that
another two or three years are needed and that UNPOL is
providing critical "breathing space." When it comes to
technical assistance with legislation, policy, and the future
development of the security sector, however, Ramos-Horta noted
that he prefers to work bilaterally with countries like
Australia, Portugal, and the United States. (Note: As a model,
Ramos-Horta cited the assistance from the U.S. Navy Seabees who
are doing "fantastic work" without weapons and with results that
are "visible" to the Timorese people.)

PM defends Chinese heavy oil power plant tender;

President concedes it was sloppy

--------------------------------------------- ---

8. (SBU) Former Ambassador Babbitt took advantage of the
private meetings to ask Gusmao and Ramos-Horta about the process
by which the GOTL had reached a decision on the $380 million
contract for Chinese companies to install two used heavy oil
electrical power plants. Gusmao testily defended the decision,
arguing that his government had followed the normal legal
process and that Timor-Leste has appropriate checks and
balances. He claimed that the decision had been submitted to
the President and that he had a week to review it before it was
finalized. He rejected foreign criticism on this issue and
questioned how "outsiders" could assess Timor-Leste's needs.

9. (SBU) Ramos-Horta also maintained that the process had
been technically correct, there had been 15 bidders, and it had
received parliamentary approval. The only legal shortcoming was
the failure to conduct an environmental assessment. He claimed,
however, that he obtained an actual copy of the (signed)

DILI 00000230 003.2 OF 004

contract from the government only after he insisted, and that,
upon review, his assessment was that it was "sloppy." By way of
example, Ramos-Horta pointed out that a Chinese Chamber of
Commerce had been named as the final arbiter in disputes.
Although Ramos-Horta has since warned the Chinese "not to cheat
small countries," the contract is now essentially a done deal.
In any case, he argued that the bulk of the contract (USD 260
million) would be directed towards building transmission lines
and that a smaller portion (USD 80 million) was to install the
heavy oil power plants. Ramos-Horta told the Delegation that an
Italian company has recently won a USD two million annual
contract to oversee the project and that any failure to comply
with World Bank environmental standards would represent
sufficient grounds to appeal and even cancel the contract.

Economic development


10. (SBU) Another recurring theme in each of the meetings was
the critical need for Timor-Leste to invest in its own economic
development and lift its population out of poverty. Agreeing
with Babbitt's comment that one of the key challenges for
democracies is to "deliver," Gusmao noted that the economy of
Timor-Leste needs to grow at a rate of 8 percent in order to
reduce poverty. Although the country has its own resources from
energy revenues, it continues to have difficulty executing its
budgets efficiently. Ramos-Horta, as indicated above, places
the country's economic needs ahead of all other issues,
including justice and reconciliation. All agree that investing
in education, eliminating illiteracy, and building basic
infrastructure are critical, immediate needs.

Climate Change


11. (SBU) Asked about the upcoming climate change talks in
Copenhagen, Ramos-Horta confirmed his intention to attend. He
added that he was not overly optimistic, however, lamenting the
fact that people are not moved to take action because climate
change does not have an immediate palpable effect. Ramos-Horta
noted that the world cannot simply blame the industrialized
countries and that "we should all do what we can to mitigate the
impact." Babbitt noted that as a small country with a large
coastline and real mitigation issues, Timor-Leste is in a
position to represent the interests of many other countries.
Invited to work with the U.S. delegation, Ramos-Horta said that
we should feel free to call on him to help. He added that he
had discussed climate change with Indonesian President Susilo
Bambang Yudhoyono (SBY) in Manado and recently by phone.
According to Ramos-Horta, SBY is determined to use his second
term to be more proactive on international issues, including
climate change, and would take the lead among the participant
countries of the Coral Triangle Initiative.



12. (SBU) The warm reception of the Presidential Delegation
indicates that the GOTL leadership appreciates continued U.S.
engagement and assistance in Timor-Leste. Although the GOTL was
able to showcase its celebration of this important anniversary
by successfully organizing and executing a series of official
and public events amidst a general mood of euphoria, the
discussions in the Delegation's private meetings suggests that
Timor-Leste continues to face some serious challenges in the
years to come. Truth, justice, and reconciliation is clearly a
highly complex and emotional issue that will require many more
years of public discussion and patient pursuit. Security sector
reform, however, is a more immediate concern on which progress
must be made sooner rather than later and for which President
Ramos-Horta said he looks to the U.S. to be a key bilateral
partner. Economic development is also an urgent, immediate
need, but will be complicated by Timor-Leste's partisan politics
and lack of institutional capacity, as indicated by the sloppy
power plant tender.

DILI 00000230 004.2 OF 004

13. (U) Ambassadors Babbitt and Soderberg did not have the
opportunity to clear this cable.

© Scoop Media

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