The Dynamics Of Extortion

On August 29, people of Mokokchung town resolved to stop paying any 'tax' --an euphemism for extortion -- to insurgent groups. Shortly afterwards, theNational Socialist Council of Nagalim, Isak-Muivah faction (NSCN-IM), issued aban on 'tax collection' by any individual or organisation within 'Nagalim' (the'Greater Nagaland' that the NSCN-IM demands), and warned of stern action againstdefying the diktat. In fact, in July 2002, right after an internal reshuffle,the new 'home minister' of the outfit, A.K. Lungalong, had said: "We mustgive way to a more systematic method of administration and to 'streamline taxcollection' and initiate steps to check 'over-taxation'."

Extortion remains a fact of life in Nagaland. In spite of the peace talksbetween the NSCN-IM and the government of India, as well as the officialceasefire between the Khaplang faction (NSCN-K) and the government, large-scale'tax collection' continues all over the state and even in areas in otherneighbouring states where these groups have considerable influence.

Official information data indicates that, out of 249 cases registered undervarious sections of law just during July and August 2003, 138 persons werearrested. Eighteen of them were insurgents and 29 extortionists linked to eitherof the insurgent groups. In the month of May 2002, police in Kohima arrested atleast 7 NSCN-K cadres while they were extorting money from shopkeepers.Similarly, five arrests occurred in three cases of extortion in the month ofJuly in Mokokchung alone. And for each reported case there are dozens of othersthat secure silent compliance.

Both NSCN factions have been extorting money from government employees aswell as the trading community. While the IM faction has fixed 25 per cent ofgross salary as the amount to be contributed to the coffers of the outfitannually, the Khaplang group collects 24 per cent as its share from each of thegovernment employees in the state, as well as in all Naga inhabited areas ofneighbouring states. The arrest of two NSCN-IM cadres from North Cachar hillsdistrict of Assam, in January 2002, led to the discovery of the outfit's plan tolevy a 25 per cent 'tax' on the salaries of employees in the area.

The situation in Mokokchung also illustrates the modus operandi that isexecuted over all ten districts of Nagaland. Every household in most villages inMokokchung district has been paying Rs 120-150 to both the groups (IM & K)annually under two separate categories: 'house tax' and 'army collection'.Additionally, Rs 1 per head is collected annually as 'membership fee' by eachfaction. The payments demands are met mechanically, as any opposition carries aninherent threat of death. On occasion, a separate collection called 'publiccollection' is also done in the name of 'civilians' (a sort of go-betweenbetween the armed cadres and the public).

Villagers are also obliged to provide the armed cadres food and lodgingduring their periodic 'area tours'. The costs are met by 'ajungben saru'(emergency collection) from every household in the village. During a recentinterview a village council Member in Mokokchung district said: "It is notjust about the amount of money we pay, but also the negotiation, threats,process of collection, 'nature and place' of payment and much more."

Another major source of such revenue consists of collections from the driversof each truck passing through Kohima. A sum of Rs 500 is collected from eachtruck as 'protection money'. The stretch of NH-39, between Kohima and Dimapurprovides a perfect setting for this sort of activity. Trucks carrying onions andpotatoes from Assam into Nagaland also pay a 'patriotic tax'.

In August last year, a Member of the Legislative Assembly (MLA) of theManipur People's Party (MPP), Okram Joy, in a letter to Deputy Prime Minister L.K. Advani pointed out that NSCN-IM militants had opened their office at Dimapurin Nagaland to collect illegal taxes from drivers of Manipur. The Manipur ChiefMinister Okram Ibobi had also drawn the attention of the Prime Minister to thefact that the NSCN-IM militants were collecting Rs 30 million per month from theManipuri vehicles in Nagaland.

Last year, the Indo-Myanmar border trade in Chandel district was severelyaffected due to non-plying of vehicles after the NSCN-IM served notices to allowners of vehicles operating along the Imphal-Moreh National Highway No.39 topay a 'tax' ranging between Rs 900 and 1700 per trip.

As many as 200 such vehicles ply daily on the route. The NSCN-IM, accordingto a report of the Union Ministry of Home Affairs (MHA) in 2001, made over Rs.1,500 million per annum through extortion and other means.

The militant outfits in the state have other illegal and 'political' means ofgenerating incomes. The NSCN-IM is reportedly involved in vehicle liftingactivities. In May 2002, police recovered a 9mm Taiwan made pistol with 6rounds, 29 counterfoils of demand notes/receipts of the 'Angami region of thegovernment of People's Republic of Nagaland' (GPRN), as well as some fake numberplates and vehicle documents used in stealing vehicles, from five arrested NSCN-IMmembers at Dimapur.

There are also allegations of flows of funds from and to politicians in theState. In August this year, Congress leaders in New Delhi accused the NSCN-IM ofpaying Rs 50 million to former Arunachal Pradesh Chief Minister Gegong Apang totopple the Congress government headed by Chief Minister Mukut Mithi.

The NSCN-IM claims a traditional right over 'tax collection'."Collection of taxes could not be termed as an extortion or looting as theorganization had been collecting 'legal taxes'" to run the organization,the NSCN-IM declared in a statement on August 1, 2003. To persons acquaintedwith the dynamics of the group's operations, it is not difficult to understandthe rationale behind such collections, even when peace parleys continue with thegovernment.

As one commentator notes: As negotiations go on in Bangkok, Amsterdam andDelhi, the wood is sometimes missed for the trees. Solutions are to be reached.But there is this commerce to look into, armies to feed and run. The machinery,in spite of the ceasefire, has to be oiled, not to fight the Army but to maimand kill cadres of rival factions. In other words, both factions of the NSCNneed funds for sustenance. Funds that come from unwilling donations from thepeople.

There have also been allegations over the NSCN-IM's reported collection ofhuge sums of money from the business community for foreign trips. "When abattalion of NGOs' representatives goes to Bangkok, it involves a hugeexpenditure. We have received complaints of such forcible collection of money atDimapur. It is a terrible burden on the business community," formerNagaland Chief Minister S.C. Jamir had stated in May 2002.

There are also instances that a significant portion of the collected amountis channelled for private business enterprises of the insurgent outfits. In astartling revelation, a Home Ministry report on North-East militants in 2001stated, "Muivah has bought 12,450 shares worth US$1,25,000 (equivalent toabout INR 6 million) listed to an Irish multinational company, well known forthe production of consumer goods". The report also noted that the NSCN-IMhad prepared a 'balance sheet' showing an expenditure of Rs 200 million, butthat actually amounted to US $500 million, as its chief had invested in realestate, shares, hotels and the proprietorship of several companies.

The impact of such 'tax collection' has been significant on the personallives of civilians, as also on the economy of the state. "In everydevelopmental project or any business transaction, after NSCN-IM cut off theirlion's share, other groups; NSCN-K and NNC, will also cut their share.

When so little amount is left for the people, development is difficult",rued a senior Naga Mothers' Association (NMA) leader in Kohima on condition ofanonymity. "Government employees in the state can hardly take home afraction of their month's salary; shops close down by mid-day and by 3 pm thestreets wear a deserted look; demanding free meals from hotels and essentialcommodities from shops is part of the militants' 'style'; vehicles are takenforcibly without paying money; list of medicines are demanded from pharmacyowners; free use is made of commercial printing presses; officers and publicleaders are constantly subjected to threats and demands by way of calls, chitsand messengers. As a result, many business establishments in the towns haveclosed down, and prices of all commodities are the highest in this state."

After the NSCN-IM served an extortion note of Rs 6 million on Oil IndiaLimited (OIL), work at the Khumsai oil-well in the Changlang District ofArunachal Pradesh has been suspended, resulting in a loss of Rs 200-300 millionannually. Recently, the Border Road Task Force (BRTF) in Nagaland decided toindefinitely suspend work in Wokha-Bokajan sector of the state followingextortion and threats from 'armed miscreants'. Rs 43,900 and material wererobbed at gunpoint in the night of September 7 from the BRTF, who are deployedin the state for construction and maintenance works on various roads.

There are also cases when civilians have been targeted by rival outfits. Justa few days before the 'National Day of Prayer' organised by the NCF (NagalandChristian Forum) and Naga Hoho for the settlement of the Naga political problemin August 2002, gun-toting members of the Naga National Council (NNC) abductedthe village chairmen of three villages near the Nagaland-Manipur interstateborder in Manipur and demanded a huge ransom.

The widespread extortion machinery has also given rise to fake cadres whocollect money in the name of the established insurgent groups. In August thisyear, reports suggested the presence of a gang of unidentified extortionists whohad been extracting money from small traders and businessman at gunpoint, andwho had injured one person near the High School area at Kohima.

Even in the prevailing environment of enveloping fear and anxiety, whererefusal to pay brings death, occasional voices of protest do emerge in thestate. Thus, the people of Tuensang made a submission to the Nagaland BaptistChurch Council (NBCC) Peace Committee, which toured the Shamator, Noklak andTuensang towns between April 11 and 17, 2003, stating, "Independence cannotcome by killing the innocent public by the Nagas. Illiterate villagers andvillage council members are treated as second-class citizens. Villagers dyingbecause of their beating. Poor villagers cannot longer feed them."

Even though the NSCN-IM has proclaimed a public ban on 'taxation' with effectfrom August 28, 2003, and no instances of extortion have been reported in themedia since, such a situation is likely to be short-lived. There were alreadycomplaints about an NSCN-IM 'double extortion' spree in neighbouring Manipur.Evidently, in a situation where hardly any militant group exists without somesort of 'taxation' or extortion base, either within or outside their own state,effectively ending such coercive resource mobilization could undermine the veryfoundations of such organisations, leading to their marginalisation and possiblecollapse.

Sashinungla is Research Associate, ICM Database & Documentation Centre,Guwahati. Courtesy, the South Asia Intelligence Review of the South AsiaTerrorism Portal