In a landmark step towards reconciliation between the Tamils and Muslims in eastern Sri Lanka, leaders of the Muslim community reached a deal with the Liberation Tigers last week for the return of the majority of land occupied by Tamil farmers.

The agreement has raises hopes that dialogue between the two communities can lead to resolution of other contentious issues in the region.

Over sixty five percent of formerly Muslim land presently occupied by Tamil farmers in the LTTE controlled areas of Paduwankarai in Batticaloa, were formally handed back to Muslim leaders at a meeting at Mandavathady in Thalaiyadi on Saturday.

Whilst many Muslim farmers’ homes are in the Sri Lanka Army controlled parts of the Batticaloa district, their farms are in LTTE-held areas.

During the conflict, these plots became increasingly inaccessible, either due to fighting or to communal animosity. In many cases, Tamil farmers in adjoining areas gradually began farming on land owned by absentee Muslims.

Even after the February 2002 ceasefire, Muslim efforts to secure the return of their plots had struggled, partly due to resistance by Tamil farmers. The issue has bedeviled Tamil-Muslim relations and the LTTE’s relations with the Muslim community.

Last Saturday’s agreement is thus amongst the most significant of a number of recent confidence building measures between the two communities, with one of the Muslim representatives at the meeting saying that the handover of land was a sign of significantly improving Tamil-Muslim relations in the region.

The Tamil Eelam Economic Development Organisation (TEEDOR), the LTTE’s development arm, had organized a series of discussions. Legal documents ratifying the exchange of ownership were issued at the meeting.

Saturday''s meeting where legal documents were re-issued on an initiative by the LTTE was a significant step towards improving Tamil-Muslim relations, according to an attending Muslim official.

Local correspondents say, however, that the land return could prove unpopular amongst Tamil farmers disadvantaged by the move.

They point out that LTTE is already under pressure to deliver dividends promised by the peace process, including the return of military-occupied lands and properties and the return of normalcy to Tamil areas.

The two communities have suffered a history of animosity, which has been strategically fuelled during the conflict by Sri Lanka’s security forces.

The state-sponsored colonization of Tamil villages in the east included creating armed Sinhala and Muslim militias. Tamils in the Amparai-Batticaloa region suffered numerous atrocities by these paramilitaries, which included large scale massacres carried out as part of a programme of ethnic cleansing.

Retaliatory attacks on Muslim militia and villages by Tamil militants led to a spiral of violence, the scars of which are now beginning to heal, over a decade later.

In the wake of years of mutual violence, efforts to rebuild trust between the two communities have been painstakingly slow, bedeviled by attempts by paramilitary organization to destabilise the region again.

The December 26 tsunami had helped bring the two communities closer together. Both felt neglected by the Sri Lankan state, with Muslims echoing Tamil claims of chauvinism state. Moreover, the Tamil Rehabilitation Organisation (TRO) has extended its assistance to Muslim and Sinhala victims of the waves.

The recent improvement in relations are the culmination of three years of efforts between the LTTE and Muslim religious and community leaders.

Earlier attempts by the LTTE to engage with Muslim political leaders, including the Sri Lanka Muslim Congress (SLMC),once the island’s largest Muslim party before it suffered internal splits, proved unsuccessful.

Wijikala Nanthan, one of two Tamil women raped and tortured by Sri Lanka Counter-terrorist policemen after being arrested in Mannar in March 2001 is reported missing this week as the trial of her attackers is due.

Sivamani Weerakon, the other victim, has received threats that she will be killed if she gives evidence against their attackers.

Twelve Sri Lanka policemen and two Sri Lanka Navy (SLN) soldiers were identified by the women as their attackers. The men have been indicted with the rape and torture of the two women while they were being held in the custody of Mannar Police.

The two women were arrested by the Counter Subversive Unit (CSU) of the Police in Mannar on 19 March 2001. Ms Weerakon was stripped naked, assaulted and tortured by five men in her cell. The woman’s five-year-old child was also detained with her at the CSU. Ms Nanthan, who was pregnant at the time of the arrest, was also tortured and raped, according to a report presented to Mannar Court by the District Medical Officer of Mannar.

“The atrocities of the Navy personnel in Mannar district are growing bad to worse daily. All my efforts to get the Navy to respect the basic human rights of the people so affected by the prolonged war are proving futile,” Rt. Rev. Rayappu Joseph Bishop of Mannar said in a statement issued after the women’s story broke in the press.

Mr. A. S. M. Faszmi, the Mannar journalist who first reported of the arrest and subsequent rape and torture of the women, has been subjected to interrogation and harassment by the Sri Lanka Army intelligence in the town.

He has also received death threats for reporting on this and other human rights violations in the town.

The Mannar Citizens’ Committee, which began campaigning on behalf of the women as soon as the assault came to light, promptly begun receive threatening calls demanding to know the women’s whereabouts.

“We get at least three or four threatening calls a day. The callers say all the members of the Citizens’ Committee would be wiped out once the Sivamani, Wijikala case is over,” a member of the Committee told TamilNet then.

“When the two women were released on bail, personnel from the Military Intelligence unit of the 21-5 brigade in Mannar went to the Citizens’ Committee, demanding to know the whereabouts of [the women] and calling them whores,” he said on condition of anonymity.

Wijikala’s mother was also threatened by members of the Sri Lankan security forces, he said, adding “there are parties with vested interests who are trying their best to threaten and intimidate Sivamani, Wijikala and all those who spoke up for them here.”

Mr. M. Remedius, a human rights lawyer representing the women, said the intimidation has continued unabated. Five years after the attack, the case is only now coming to trial. The two women have been struggling to make new lives for themselves.

Although the attacks took place in Mannar and the men were based at the local police station at the time, the indictments against them were filed in a court in Anuradhapura, forcing the victims and witnesses to travel to the central town from the western coast if they wished to proceed with the charges.

The move away from the mainly Tamil region where the attacks took place to the Sinhala town has been condemned by rights activists as a move to ensure the servicemen, all of whom are Sinhalese, received a more sympathetic trial.

Tamil women’s groups see the attacks as an inevitable consequence of impunity enjoyed by Sinhala military personnel who expect to be tried in a Sinhala-dominated justice system.

“There are many laws and schemes for the protection of women, but appropriate action is not taken against those flouting them,” the Mannar Women’s Front said in a memorandum sent to the President after the attacks.

“On the contrary, at the highest rungs of the Government, such obvious offences are even denied, disowned and covered up. This creates in the public mistrust in the rule of law and becomes an encouragement for the criminals. The Government, instead of ensuring the safety of the public, is interested in protecting the security forces”, the memorandum said.

The leader of Sri Lanka’s largest Tamil party, the Tamil National Alliance, Mr R Sampanthan has also queried whether the government’s attitude contributed to the rapes.

“It would appear that some service personnel think that if a Tamil is implicated even falsely with the LTTE, any crime can be committed against such Tamil person” he said in a letter to President Chandrika Kumaratunga.

“It would be pertinent to raise the question as to whether pugnacious statements made by persons in high positions and the expressed determination of the Government to continue with the war, contributes towards the unleashing of brutality such as rape and torture on unarmed Tamil civilians particularly Tamil females.”

‘I was screaming and pleading’ [September 28, 2005]

The Liberation Tigers this week urged the European Union this week to reconsider its decision to bar them from visiting its member states and desist from listing them as a terrorist organisation.

The EU said Monday it “is actively considering the formal Listing of the LTTE as a terrorist organisation.”

“In the meantime, the European Union has agreed that with immediate effect, delegations from the LTTE will no longer be received in any of the EU Member States until further notice,” a statement said.

“The European Union has also agreed that each Member State will, where necessary, take additional national measures to check and curb illegal or undesirable activities (including issues of funding and propaganda) of the LTTE, its related organisations and known individual supporters.”

Responding Wednesday, the head of the LTTE’s Political Wing, Mr. S. P. Thamilchelvan described the move as a “serious setback to the peace process.”

The EU’s decision will appease, and indeed will give moral support to, extreme Sinhala nationalists who are demanding the abrogation of the peace-talks and resumption of war, he said.

Mr. Thamilchelvan pointed out the EU’s comment were badly timed, coinciding with an “anti-Tamil” campaign being advanced through political propaganda platforms in the South, in reference to the stridently Sinhala nationalist campaign by the ruling party’s candidate in the Presidential elections.

Mr. Thamilchelvan recalled that EU’s support was a key factor in the LTTE’s decision to enter into negotiations in 2002 with the Sri Lankan government.

“We urge the European Union to desist from being partial to one party and to rescind its recent declaration,” Thamilchelvan was quoted by TamilNet as saying.

In its harshly worded statement Monday, the EU deplored the assassination of Sri Lanka’s foreign minister in August - a murder the government blames on the Tigers – and slammed the “continuing use of violence and terrorism by the LTTE.”

“The pursuit of political goals by such totally unacceptable methods only serves to damage the LTTE’’s standing and credibility as a negotiating partner and gravely endangers the Peace Process so much desired by the people of Sri Lanka,” the EU said in a statement.

“The European Union repeats its condemnation of the shocking murder of Foreign Minister Lakshman Kadirgamar and of so many others in Sri Lanka in recent weeks,” the statement said.

“The European Union furthermore repeats its serious concern at the continuing recruitment and retention of child soldier cadres by the LTTE and reminds them that there can be no excuse whatsoever for this abhorrent practice to continue.”

“The European Union takes this opportunity to underline the Statement of 19 September by the Co-Chairs of the Tokyo Donor Conference calling on the LTTE not least to take immediate public steps to demonstrate their commitment to the peace process and their willingness to change.”

“The European Union calls upon all parties in Sri Lanka to show commitment and responsibility towards the peace process during the coming period of elections and to refrain from actions that could endanger a peaceful resolution and political settlement of the conflict.”

The LTTE has already been banned in Britain – which presently heads the EU – as well as the United States and India. The LTTE is precluded from raising funds in Australia and Canada as well.

Last week the Co-Chairs of the Tokyo Donor Conference – the EU, US, Japan and Norway - warned that the Norwegian peace effort in Sri Lanka was facing “its most serious challenge” since the February 2002 cease-fire brought a halt to fighting between the government and the Liberation Tigers.

That statement, however, rapped both the LTTE and the Sri Lanka government by implication for the serious situation and urged both parties to “engage constructively” with a Norwegian special representative, Major General Furuhovde, scheduled to visit the island in October “to find practical ways of improving implementation” of the truce.

While the Co-Chairs statement stopped short of directly accusing the Tigers of killing of Sri Lankan Foreign Minister Lakshman Kadirgamar last month, it strongly hinted that the LTTE was responsible in the view of the Co-Chairs.

The assassination was branded an “unconscionable act of terrorism” that casts “profound doubts on the commitment of those responsible to a peaceful and political resolution of the conflict.”

The Co-Chairs demanded that the LTTE take “immediate public steps to demonstrate their commitment to the peace process and their willingness to change.” They also called for “an immediate end to political assassinations by the LTTE and an end to LTTE recruitment of child soldiers” as “two such steps.”

The Sri Lanka government was criticised for not disarming paramilitaries said to be operating with the support of the armed force. However, Colombo was commended for its “restraint” following Kadirgamar’s assassination.

The Co-Chairs said they “deplore the activities of paramilitary groups, which fuel the cycle of violence and unrest and … underscore the responsibility of the Sri Lankan government under the Ceasefire Agreement to disarm or relocate these groups from the north and east.”

Australia is to impose "draconian" counter-terrorism laws after state and territory leaders agreed on Tuesday to wide-ranging security proposals made by Prime Minister John Howard in the wake of the London bombings.

Under laws to be passed by all the states and territories, police will be able to detain terror suspects as young as 16 for up to 14 days without charge and control their movements through court orders, The Age newspaper said.

Police will also be given stronger powers to stop and search people in transport hubs and mass gatherings like sporting events and rallies and to use electronic tracking devices to keep tabs on terror suspects.

Under the planned changes, existing sedition laws are to be replaced by a new law making it a crime to incite violence against the community or against Australian soldiers serving overseas or to support Australia's enemies, Reuters reported.

The laws had been condemned by civil rights activists when proposed. Law Council of Australia (LCA) said state and territory leaders had put self-interest ahead of the public interest in agreeing to the laws.

"In many sense the laws that we have agreed to today are draconian laws, but they are necessary laws to protect Australians," Queensland state premier Peter Beattie told a news conference.

Howard won backing for his raft of new anti-terrorism laws after agreeing to leaders' demands for a review after five years and a 10-year use-by-date.

Australia's six states and two territories are all governed by leaders from the center-left Labor party, which is in opposition to Howard's conservative Liberal/National coalition at a federal level.

The leaders agreed to strengthen citizenship laws to make immigrants to Australia wait three years instead of two before they would qualify to become Australian citizens.

Keysar Trad, president of the Islamic Friendship Association of Australia, condemned the new laws, which came from a review of Australia's counter-terror legislation following the July 7 London bus and subway bombings.

"These laws will be unfair and could lead to the creation of a fascist state," he told Reuters.

LCA secretary-general Peter Webb said "These laws are likely to have a very significant effect on the Australian way of life over the next 10 years."

Australia, a staunch US ally with troops in Iraq and Afghanistan, has steadily beefed up security and anti-terrorism laws since the September 11, 2001 attacks on the United States.

Australia has never suffered a major peacetime attack on home soil, but 88 Australians were among 202 people killed in the 2002 Bali bombings and 10 Indonesians were killed when the Australian embassy in Jakarta was hit by a suicide bomb on September 9, 2004.

The biggest-ever joint naval exercises between India and the United States went into high gear this week but the war games in the Arabian Sea steered clear of thorny issues such as simulated nuclear combat.

The 10-day event codenamed “Malabar 05” began when the 1,092-foot aircraft carrier USS Nimitz led two American Aegis-class destroyers into Indian waters on Sept. 25.

“[Malabar 05] is a good opportunity for us to increase and enhance our operation with the Indian Navy and develop standard procedures for conducting operations and personnel relationships and know each other,” the US Navy Commanding Officer, Ted N. Branch, said.

“One part of our war games was over when the two navies met at mid-sea when the exercises began and now we are engaging in comprehensive manoeuvres,” Indian Navy spokesman Captain A.K. Lambhate said in India’s western resort of Goa, a nerve center for the exercises.

The nuclear-powered Nimitz is the first U.S. carrier to take part in joint exercises with nations outside the North Atlantic Treaty organization.

“This is a great mission as it enhances mutual confidence-building measures, streamlines procedures for the future and will help both countries across a wide canvas,” said Lambhate, as the ships practiced anti-submarine warfare.

Lambhate said the major action was still to come.

“(From) 30th September onwards the major part of the exercises will commence and will continue until the exercises end on October 4. There’ll be a lot of activity in that period,” he said without elaborating.

The joint exercise is the eighth in a series between the two navies and involves F-18 Hornets from the US side and British-designed Sea Harriers, which this week flew several sorties from the deck of India’s solitary aircraft carrier, INS Viraat.

An unspecified number of German-designed submarines backed the Indian fleet, an official said by telephone from the decks of a participating Indian missile destroyer.

“Activities such as interdiction, information exchange, anti-piracy and operations to halt unauthorized transportation of weapons are under way but NBC (nuclear, biological chemical warfare exercises) is not on the agenda,” another official, who did not want to be named, told AFP in Goa.

“These still remain a thorny issue with them (the U.S.),” he added.

The United States imposed sanctions including restrictions on transfer of dual-use technology after India conducted nuclear weapons tests in May 1998. Washington eased some of the sanctions after India pledged its support to its global campaign against terrorism following the September 11, 2001 attacks.

Washington has held several joint military exercises with Indian defense forces over the past three to four years.

The United States and India signed a landmark agreement in January to share advanced technology, including for peaceful nuclear applications.

In June defense ministers of India and the United States signed a 10-year accord paving the way for joint weapons production, cooperation on missile defense and the possible lifting of remaining U.S. export controls on sensitive military technologies.

Indian and US militaries have held a series of joint exercises in the past few years, including Special Forces training in jungle warfare and parachute jumps.

Another round of air combat exercises are scheduled to be held in November in West Bengal, ANI reported.

India plans to build an aircraft carrier by 2012 as New Delhi moves to boost the blue-water capability of its naval forces. It has also signed a 1.5-billion dollar deal with Russia for Admiral Gorshkov that will be handed over to India by 2009 after a refit.

Sivamani Weerakon, a young mother of three, was arrested by the Counter Subversive Unit (CSU) of the Police in Mannar on 19 March 2001 along with another young women, Wijikala Nanthan, who was pregnant at the time.

Both were gang raped in custody. The following are extracts of their testimony to the Mannar Magistrate’s Court follow:

“Wijikala was screaming inside the building. I heard her pleading ''I have nothing to do with the Tigers. I am a family woman. Please do not do this to me''.

“Then some CSU men came out and told me that they were forcing Wijikala to have sex with them and threatened to rape me as well. One of the men tried to strip my clothes.

“When they saw that my son was asleep on my lap, a Policeman dragged him away into one of the buildings in the CSU compound as I begged them not to hurt him.

“Two men then pinned me down on the van''s floor while another stripped me and raped me. I was screaming and pleading when a Policeman put his foot on my mouth to stifle me.

“Inside the building they forced Wijikala, who was standing naked, to strip my underwear.

“I was hung upside down in a knot from a pole placed between two tables, with my hands and feet tied. Then the men in the room poked our genitals and tortured us until dawn”

At 11 p.m. on March 13, 2001, uniformed officers surrounded the Aasika lodge in Uppukkulam, a suburb of Mannar town, where Sivamani was staying with her son. Wijikala and her husband, Shanmugam Nanthan, were in the room next to hers.

The men from the CSU entered the lodge and checked the men and women separately. They separated Sivamani and accused her of being a member of the Liberation Tigers. She denied their charges and showed them her family album to prove that she was a person with children and a family.

She told the CSU personnel that she was staying in the lodge with her son. They had then dragged her son from bed to the main hall of the lodge where they were questioning the inmates. The boy was taken to a corner of the hall and questioned by the CSU men.

“However, they came back and threatened me, claiming that my son had confessed that I was a trained member of the Liberation Tigers. I cried and pleaded with them that it was obvious that my son was too sleepy and could not tell them anything. But they insisted that I was a Tiger. Then they got Wijikala search my person and me to check her".

“Then we, Nanthan, Wijikala, my son and I, were taken in a white van to a place in the town, which I recognised the next day as the compound in which the Mannar CSU office is located. There, Nanthan and his wife Wijikala were pulled out of the van and were dragged into a building in the compound.

“After a while I heard Wijikala screaming and pleading. Some Policemen who from the building, told me in lurid detail about how they were forcing sex on Wijikala and threatened that they would do the same to me. They me told me that the Officer in Charge wants to see me. But I begged them not to harm my little son.”

Sivamani was then raped in the van while her six-year-old son was dragged away into the CSU office.

She was thereafter taken to the CSU's Officer in Charge (OIC) Suraweera. Sivamani saw Wijikala standing stark naked in the room surrounded by more than five CSU men.

“The OIC, a tall fair man with a beard, ordered me to strip naked when I was made to stand before him with most of my dress torn and stripped. I was whipped with thick wires when I refused to remove my clothes. The pain was so unbearable that I was compelled to take off my skirt and blouse.

“But the CSU men insisted that I should remove my under wear as well. I refused. Thereupon a man poked a stick into my underwear and tried to tear them. Then they forced Wijikala to remove my undergarments and pushed me to the brightly lit part of the room close to the OIC.”

Sivamani said that Inspector of Police (IP) Suraweera, the OIC, had lasciviously scrutinised her private parts when she was pushed near him by the other Policemen in the room.

She was then tied up and hung upside down in a crouching position on a pole placed between two tables in the room and tortured until dawn, 14 March. The torture was so severe that Sivamani and Wijikala had agreed to say that they were military trained members of the Liberation Tigers.

Three days later they were ordered, while in the custody of the CSU, to sign confessions typed in Sinhala to the effect that they were members of the LTTE and had come to Mannar with bombs.

From a TamilNet report of March 28, 2001

The tenth anniversary of the massacre of twenty-six children by a Sri Lankan Air Force aircraft that dropped three bombs on their school was marked in a quiet ceremony last Thursday.

The ceremony at third milepost in Point Pedro - where the Nagarkovil Maha Vidiyalayam is temporarily functioning - comes three months after the tenth anniversary of another massacre nearby at Navaly.

On July 9, 1995, a Sri Lankan military air and artillery on Navaly St Peters Church and Navaly Murugamoorthy Kovil killed 147 Tamil men, women and children who had sought refugee in it from a military offensive in the Jaffna peninsula.

The international outcry over Navaly did not preclude further attacks on Tamil civilians.

On September 22, 1995, SLAF aircraft bombed the Nagarkovil Maha Vidyalayam school yard crammed with 750 children on their lunch break, killing 26 – of whom 12 were six or seven year olds – and injuring 150 others, 40 seriously.

Two surgeons from French medical agency Medecins Sans Frontierers (MSF) worked through the night at Point Pedro’s Manthikai hospital carrying out 22 amputations - in four cases removing both legs. Ten of the amputees were under 12.

“The scene of the attack was visited by the International Red Cross and pieces of human flesh were found strewn around the area including the tree branches,” said International Educational Development, an NGO on the United Nations Economic and Social Council Roster.

Because of the government’s economic embargo at that time, no vehicle transport was available to take the injured from Nagarkovil and Navaly earlier to the hospital.

The air strike on Nagarkovil was part of a two-day bombardment of the Vadamaradchi region of the Jaffna peninsula. Earlier that day, SLAF bombers targeted Manalkadu and Katkovalam killing six people. Intense shelling from the Palaly Army camp killed seven members of the same family including four children.

MSF reported on 23 September that of 117 injured Tamil civilians admitted to hospital during the Sri Lankan offensive more than half had died from their wounds.

In a statement released in Paris, MSF said 200 people, including the children, were wounded when bombs fell on the school near Point Pedro on Sri Lanka’s northern coast.

Of some 150 children who were wounded, 15 died within three hours of being brought to hospital, the relief agency said. MSF said 42 children from the school and elsewhere died at the hospital in subsequent days.

“I condemn in the strongest terms this attack on a school where innocent children were killed. Whatever the political situation in a country nothing justifies attacks on educational institutions,” Director-General of UNESCO, Fredrico Mayor, said.

In Australia, Ted Grace, an Australian federal parliamentarian and Chairman of the Caucus Committee on Foreign Affairs, Defence & Trade called for public condemnation of Sri Lanka in a speech in the Australian Parliament on 27 September.

“Our Government which is deeply committed to upholding human rights should publicly condemn such crimes committed against humanity and should be alarmed at the Sri Lankan Government’s determination to carry out such acts with impunity,” he said.

International Educational Development expressed its grief and shock at the attack, saying “the actions of the Sri Lanka armed forces, coupled with the economic blockade imposed on the Tamil homeland, are a clear contravention of the Geneva Convention relating to non international armed conflicts.”

The Nagakovil attack came hours after the Sri Lankan government imposed strict rules on reporting from the Northeast.

It has been argued that the attack on Navaly church, which came days after civilians in the path of an Army offensive had been told to seek shelter in places of worship and the attack on the school, with children in white uniforms being unmistakable from the air, were part of a strategy of deliberate targeting of civilians to undermine support for the Liberation Tigers.

Sri Lanka’s government was unmoved by the international outrage over the attacks. Foreign Minister Lakshman Kadirgamar slammed INGOs and others who protested civilian deaths in Sri Lankan military operations.

Sri Lankan state media reported that Mr. Kadirgamar, infuriated by UN agencies’ criticism of the Navaly attack, had declared that they have no authority to speak on Sri Lanka’s domestic problems and accused them of attempting to expand their mandate.

While the Navaly attack had drawn both international condemnation and heavy coverage in the local press, the Nagarkovil attack, which received internationally coverage only due to the presence of the MSF doctors, was almost unknown to the Sri Lankan public due to strict controls on reporting.

“This insidious censorship, which clearly had nothing to do with protecting national security, again exemplified the government’s intention of ensuring that only its own version of the conflict was available,” Article 19 said of the censorship which was lifted three months after it was imposed – after the military offensive was over.

Article 19 added: “the government appears to have been intent on conveying an image of a ‘clean’ war, in which the LTTE were targeted but civilians protected, to maintain support for its offensive.”

As Rev Fr Devanesan, addressing the students and parents at last week’s anniversary observed: “the attack was a crime against mankind. Politicians and members of the civil society in the South who are now ardent proponents of human rights remained silent without bringing this atrocity to the notice of the international community when the incident happened.”

Sri Lankan government officials misspent or misappropriated hundreds of thousands of dollars worth of tsunami aid after failing to follow instructions, the island’s auditor general said Monday.

Officials gave millions of rupees in tsunami assistance to thousands of families who were not directly affected by the Indian Ocean island’s worst natural disaster in memory.

There were others amongst the half a million displaced by the tsunami who did not get the rations they were entitled to.

Auditor General S.C. Mayadunne put the misappropriation down to confusion stemming from multiple instructions issued by different government departments.

But Mayadunne’s report, posted on the Web site www.auditorgeneral.lk, also details instances of apparent corruption, including the disappearance of aid materials.

“As far as we see it, it is a misinterpretation of the ... instructions,” Mayadunne told Reuters. “Therefore, when you misinterpret ... it is a misappropriation. I should not say it is corruption.”

But Sri Lankan analysts suggest the tsunami aid is fuelling patron-client networks with funds and material being diverted to bolster political support for elected officials at both national and local levels.

International donors have pledged over $3 billion in aid to Sri Lanka, around a third of which has been firmly committed so far according to the island’s tsunami reconstruction body.

“There has been widespread misappropriation of funds. Initially, it was understandable because the proper system and controls were not in place, but even after the emergency phase was over, the irregularities continued,” Mayadunne was quoted by weekend press reports as saying.

Hundreds of millions of rupees worth of aid collected locally by government agencies was still sitting in bank accounts by July, and in some cases had been invested in fixed deposits, Mayadunne added in the report.

“Test checks revealed instances such as spending only a small portion of the funds collected locally for the purposes, retaining collections in general deposit accounts without being used for the intended purposes,” the report said.

It also found that by the end of July, seven months after the tsunami killed nearly 40,000 people and flattened entire towns and villages along the island’s seaboard, only a fraction of pledged foreign aid had been spent on intended key sectors.

Only 8.2 percent of $120.5 million pledged for the ravaged fisheries sector had been spent, while 11.2 percent of $311.5 million intended for housing and urban development had been used.

Mayadunne, who is tasked with auditing the accountability of the government and reports directly to parliament, is working on a comprehensive audit of Sri Lanka’s handling of tsunami aid.

Aid fiasco in Sri Lanka [September 28, 2005]

Sri Lanka''s Auditor General, Mr. S.C. Mayadunne, has studied state expenditure aid on rehabilitation efforts in the first six months after the December 26 tsunami devastated Sri Lanka’s northern, eastern and southern coastlines, killing over 31,000 people and displacing half a million.

“Considerably large amounts of money had been received by the Government and other parties in the form of local and foreign loans, aid and donations for the recovery of losses caused by the Tsunami disaster,” he said.

But large amounts of the aid had been misspent or simply disappeared, he said.

Actions “contrary to” procedures outlined in government circulars were observed by local authorities and in some cases there were “instances of blatant violation of provisions.”

The government circulars set out procedures for the drawing of tsunami-related funds (by individuals, NGOs and relief departments), expenditure on the supply (by third parties) of cooked meals, payments for damaged houses, and so on.

Indeed, Mayadunne also criticised the repeated issuance of circulars, saying “instructions had been subjected to [ad hoc] changes during a very short period due to the absence of a clear policy,” resulting in over-spending also.

There had been no action by authorities to maintain records of individuals and institutions collecting aid from the government for reconstruction activities.

Out of Rs 4.3 million drawn by 20 institutions, meanwhile, only 37% had been spent, with the rest being retained by 18 of them, in some cases “had been invested in fixed deposits.”

There had also been “irregular collection of funds by the Ministries, Departments, Public Corporations, etc. [and] retention of collections and incurring expenditure.”

Misappropriation of funding allocated for housing and reconstruction had been effected by making payments for houses that were undamaged by simply assessing them as damaged or making payments for houses actually built with NGO funds.

Payments were being made for vehicle hire without being used for any work and there were no records of the whereabouts of hundreds of vehicles brought into the country for tsunami-related relief.

Meanwhile, genuine needs are not being met, the Auditor General said.

Although almost 49,000 houses had been damaged by the waves, only 2% had been repaired.

In Hikkaduwa, for example, payment has been approved for only 25% of over 4,000 damaged houses.

The tsunami completely destroyed almost 64,000 homes, along with 73 schools, almost 400 places of worship and nine hospitals. Over 100 schools and 18 hospitals were damaged.

It also left 141,000 families (half a million people) displaced. And the report found distribution of aid to recipient families was also flawed.

In Negombo there are only 599 displaced families. But payments totaling Rs 76m have been made to a staggering 15,843 families.

Over distribution of flour and wheat in some cases had resulted in recipients selling it on, whilst others had gone without.

In Kalmune, 65 electric generators, 78 water tanks, 88 tents and a water motor supplied to the Divisional Secretary, simply “disappeared” as did another Rs 1m of goods.

In the Amparai district, Kalmune was singled out financial irregularities. The Al Ameen Community Development Centre, for example, had been compensated to the tune of Rs.2.5m – “even though it had not supplied meals.” Rs 1m was paid to individuals in the area who are not entitled to aid.

Another area highlighted for irregularities was the Tangalle Divisional Secretariat, particularly concerning fund allocations for fictitious reconstruction and ineligible assistance for displaced.

Over Rs. 1m was reportedly spent on cooked meals in Mannar – even though the area, on the west coast, was unaffected by the tsunami.

Mayadunne said even the information collected had been unearthed with difficulty due to a lack of proper documentation and sluggish cooperation from official departments.

“The scope and extent of [my study] were such as to enable as wide an audit coverage as possible within the limitations of staff, other resources and time available to me,” he warned.

He pointed to the “the absence of systems for recording assistance in the form of cash and goods/materials” and in particular the “lack of a national level register/record to use as a base document for the supply of relief and assistance.”

The Central Bank, meanwhile, had not made available information he requested on tsunami expenditure and electoral registers in the hardest-hit Amparai district were not provided.

There was “difficulty in identification of concurrent relief measures provided jointly by the Government and the private sector and the duplicated /multiplied state of relief provided.”

Apart from government expenditure, Mayadunne also criticised Sri Lankan Customs for missing large amounts of goods which passed through Katunayake airport, for failing to keep proper records and several other breaches.

“Up to date records of goods cleared had not been maintained by Customs[and] non-recording of air freight goods, failure to issue numbers for clearance of such goods, same number issued for several consignments etc. were observed.”

Large amounts of aid were languishing in the ports, he said: “4,018 container loads of aid materials had been received [up to April 30] and out of this only 2,864 containers had been cleared.”

“686 containers received by NGOs had been abandoned” because customs had not cleared them, the report said.

Meanwhile, there “was no evidence to support the distribution” had taken place of duty-free goods cleared by NGOs and various individuals for distribution through the District Secretaries.

Out of over 500 vehicles brought into the country, 207, 290 and 9 had been released to Government Institutions, Non-Governmental Organizations and other institutions respectively.

“Nevertheless, the General Treasury did not have the particulars of institutions or individuals who are using these motor vehicles.”

Sri Lanka’s Tamil Tigers have no security cameras or guards protecting their bank. Yet they say it is the safest place for customers to deposit cash and gold both in times of war and peace.

The Bank of Tamileelam (BOT) is not recognised by Sri Lanka’s Central Bank but the financial institution in Kilinochchi, 330km north of Colombo, has full management of monetary policy in Tiger territory.

The Tamil Tigers set up the bank in May 1994, after first establishing their own police force three years earlier. Since then, they have adopted their own administration and legal system to strengthen claims for a separate state called Eelam.

The bank uses Sri Lankan currency but offers rates higher than any commercial bank on the island - it pays 8.5% on fixed deposits compared to the national average interest rate of 5.7%.

Lending rates, too, are marginally lower than commercial bank rates elsewhere in the country - between 9.0% and 18% compared to 11.42 and 33.6%.

Managing director Mahalingam Veerathevan said war had been good for securing deposits but a truce since February 2002 was proving even better for business.

“During war people want to deposit money and gold,” Veerathevan said in an interview in Kilinochchi.

“But during peace people are borrowing more and we have just launched a campaign to mobilise savings from among children.”

The 36-year-old Veerathevan, a business administration graduate from the university of Jaffna, the former stronghold of the Tigers, says he is now managing a deposit base of $15mn.

The Tiger bank does not publish profit and loss accounts and instead reports only to a board of seven members who are direct appointees of Liberation Tigers of Tamil Eelam (LTTE) leader Velupillai Prabhakaran.

The seven-member board decides monetary policy and is expected to announce a rate hike next month to tackle high inflation.

“The Sri Lankan Central Bank has printed a lot of money without goods and service to back it,” Veerathevan said.

“That has caused high inflation in Sri Lanka and because of our trade with them we also suffer the contagion.”

Demand has also increased in LTTE-held territory where there is no official measure of inflation, but residents agree that prices are rising just as in other parts of the country where inflation was 12.8% at the end of August.

Veerathevan said the February 2002 truce had sparked a huge jump in demand for credit with more people borrowing from the BOT either to rebuild their homes, set up business or buy goods such as solar-electricity panels.

Deposits increased 42% in 2003 compared to a rise of 30% in the previous year while lending jumped by 40% in 2003, up from a 20% increase in 2002, he said.

The loan default rate, Veerathevan said, is minimal. “It could be less than 1%,” he said, adding that “prudent lending policies” helped achieve the high recovery rate. “Nothing has been written off as a bad debt.”

The ownership of the banks is not in doubt. The bank’s logo carries the LTTE’s insignia, a roaring tiger with paws outstretched over a pair of crossed assault rifles and ringed by 33 bullets.

“We don’t send anyone with a gun to collect instalment payments,” stressed administrative manager Kandiah Balakrishnan.

“We don’t use (Tiger) cadres, but we have employed graduates in key positions to ensure good recovery.”

Four of the bank’s 12 branches have been computerised and the main branch here in Kilinochchi uses plasma screens which compete for space on counters decked with dog-eared ledgers for 10,000 depositors and 300 current account holders.

Cheques issued on BOT are not accepted anywhere else in Sri Lanka and can be used only for trade within the parts of the island’s north-east dominated by the Tigers.

Sri Lankan government banks also operate here allowing a conduit for people to receive money from abroad and the Tigers have not interfered with their work.

The BOT is not recognised by any other bank in the world so it can’t correspond as a bank with customers anywhere else, including in other parts of Sri Lanka.

The Central Bank regularly issues statements saying the BOT is illegal and has no right to solicit deposits. However, the Bank’s writ does not apply in Tiger territory.

Veerathevan says the bank has never once been robbed. When asked why, he smiles and says simply, “No one has tried to rob us. It is very safe here, unlike the rest of the country.”

Major powers urged the Palestinian Authority this week to start dismantling armed militias, saying that engaging in violence was incompatible with participating in elections.

But the Quartet of international peace mediators stopped short of backing Israeli demands that the militant group Hamas be barred from standing in legislative elections next January unless it disarms and recognizes the Jewish state.

Israeli Prime Minister Ariel Sharon has threatened to not to cooperate with the PA on the Palestinian legislative elections due in January if Hamas takes part, The New York Times reported.

Ministers of the United States, the European Union, Russia and the United Nations said in a joint statement after meeting at U.N. headquarters that following Israel’s withdrawal from Gaza, the Palestinians needed to maintain law and order and ‘dismantle terrorist capabilities and infrastructure.’

‘Ultimately, those who want to be part of the political process should not engage in armed group or militia activities, for there is a fundamental contradiction between such activities and the building of a democratic state,’ they said.

Hamas has said it plans to take part for the first time in January’s legislative elections in which it is expected to make a strong showing after sweeping a string of town halls in the Gaza Strip in municipal elections earlier this year.

Responding to Sharon’s threat to obstruct the conduct of Palestinian elections if Hamas is allowed to run, U.S. Secretary of State Condoleezza Rice said: ‘We understand this is a transition and we think everybody else understands this is a transitional process.’

‘We have to give the Palestinians some room for the evolution of their political process.’

Sharon had earlier protested, saying ‘I said in the clearest way possible that we completely oppose Hamas’ participation in the elections as long as they haven’t given up their weapons.’

‘In Gaza, we can no longer influence Hamas’ participation ... but in other places, we won’t cooperate with anything,’ he said, without detailing how Israel could hinder the vote.

The New York Times Israeli officials feared Hamas would “get 40 percent of the vote, and that will set us back 10 years.”

The Palestinian leadership reacted angrily to Sharon’s threat, with Palestinian Authority spokesman Nabil Abu Rudeina saying ‘The Palestinian election is an internal Palestinian issue.’

‘All Palestinians have a right to participate in this election and in our political life. I think this is another Israeli tactic to stop the progress in the peace process.’

The Quartet praised Sharon’s political courage in carrying through the Gaza withdrawal but said Israeli settlement activity in the occupied West Bank must stop.

But it also expressed concern about the route of Israel’s West Bank security barrier.