* Second ever verdict is first acquittal at ICC
* Rights activists urge improvements in prosecutions
* Ngudjolo was accused of overseeing killing, pillage, rape
* Prosecutors seen failing to investigate chain of command
(Adds detail on Ngudjolo arrest, edits)
THE HAGUE, Dec 18 (Reuters) - Congolese militia leader
Mathieu Ngudjolo Chui was acquitted at the Hague war crimes
court on Tuesday, after prosecutors failed to prove he ordered
atrocities in eastern Congo a decade ago.
Delivering only its second verdict in 10 years of existence,
the International Criminal Court (ICC) found Ngudjolo not guilty
of ordering killings during a war in Ituri district in 2003. In
its first ever verdict, delivered in July, the court had jailed
an opposing commander, Thomas Lubanga Dyilo, for 14 years.
Ngudjolo was accused of war crimes and crimes against
humanity, including overseeing killings, rape and pillage. His
prosecutors will appeal the verdict and, though the court said
Ngudjolo should be freed in the meantime, it was not immediately
clear that he could leave the ICC detention facility for now.
The judges said they had no doubt the people of Ituri
suffered the massacres described at Ngudjolo's trial and critics
of the ICC called for better prosecutions in future in order
that victims and their surviving relatives should have justice.
"The people trusted the International Criminal Court more
than our national courts," said Emmanuel Folo of Ituri human
rights group Equitas. "After this decision, for those who were
victims of this, there is a feeling of disappointment. The
victims feel forgotten, abandoned by international justice."
The violence in Ituri was a localised ethnic clash over land
and resources among myriad conflicts that spun out of the wider
war in Democratic Republic of Congo from 1998 to 2003.
Some rebels involved in the current M23 insurgency in
neighbouring North Kivu province were involved in fighting in
Ituri - among them M23 leader Bosco Ntaganda, who is himself on
the ICC wanted list for war crimes alleged in Ituri in 2003.
VILLAGE MASSACRE
Prosecutors accused Ngudjolo of ordering fighters to block
roads around the village of Bogoro in February 2003 in order to
kill civilians attempting to flee and said civilians, including
women and children, were burned alive in blazing houses. Some
200 people were killed when ethnic Lendu and Ngiti fighters
destroyed the homes of the village's mainly Hema inhabitants.
"The prosecution failed to investigate the chain of command
adequately as far as the attack in Bogoro is concerned,"
international criminal lawyer Nick Kaufmann said.
The ICC judges said prosecution witnesses who testified to
Ngudjolo's involvement were not credible. But president judge
Bruno Cotte also said: "This does not in any way throw into
question what befell the people of that area on that day."
Geraldine Mattioli-Zeltner of Human Rights Watch said: "The
acquittal of Ngudjolo leaves the victims of Bogoro and other
massacres by his forces without justice for their suffering.
"The ICC prosecutor needs to strengthen its investigations
of those responsible for grave crimes in Ituri, including
high-ranking officials in Congo, Rwanda, and Uganda who
supported the armed groups fighting there."
UNLIKELY TO BE OVERTURNED
Legal experts said it was unlikely the acquittal would be
overturned because new evidence cannot be introduced at appeal.
Appeals panels rarely reassess the credibility of witnesses.
Until then, it is not clear where Ngudjolo might go, if
anywhere. He remains under a United Nations travel ban dating
from his indictment. The Netherlands, where he has been detained
since 2008, is not obliged to take him in. A Congo government
spokesman said he saw no reason for Congo not to take Ngudjolo
back, but he suggested it may wait until after the appeal.
Ngudjolo was arrested by U.N. peacekeepers in 2003 but later
recruited to the Congolese army as part of efforts to integrate
former rebels. Made a colonel in 2006, he was arrested in the
Congolese capital Kinshasa in 2008 and handed over to the ICC.
The fate of Ngudjolo's co-accused Germain Katanga is yet to
be decided after judges split the two cases last month in a
controversial move some analysts said may increase the
probability of a conviction against the more prominent Katanga.
The court's first verdict found Lubanga guilty of recruiting
child soldiers to another militia in the same conflict in Ituri.
Some observers said the different outcomes of the trials for
militia leaders from different tribes could cause new friction.
"Lubanga was a Hema leader, and the acquittal of a Ngudjolo,
a Lendu, just after the conviction of a Hema could exacerbate
tension between the two ethnicities in Ituri," said Jennifer
Easterday of the Open Society Justice Initiative.
(Additional reporting by Joe Bavier in Abidjan and Pascal
Fletcher; Editing by Michael Roddy and Alastair Macdonald)

