Karma is the backlash of what you do in a nutshell. Therefore, it's reasonable to give NPO harsh terms.
Disbandment
Justification: NPO has directly or indirectly caused the disbandment of many alliances, the most noticeable being GOONS, LUE, and NAAC.
Non-disbandment terms
Reparations to OV
A viceroy appointed for an 'undecided amount of time'
Admission of defeat in Great War I
Repealing of the Moldavi and Revenge Doctrines
Public apology to all former members of alliances destroyed by NPO
Decom all military wonders, improvements, factories, and labor camps
Decom all tanks, aircraft and navy
Dismiss all but 20% of each nation's soldiers
Decom all nuclear weapons
Removal of Moo as Emperor and ZI
ZI of all IOs as angelus said
Remove all military treaties and block all treaties until the end of terms
Harsh? Maybe, but anything short of disbandment and the blocking of refounding won't compensate for all they've done over these three years.