Nepal: Reducing Confrontation in Infrastructure Development

September 29, 2021

By Nischala Arjal, Ram Tiwari, and Sumina Karki

For four years the residents of Khokana, an ancient town on the southern edge of Kathmandu Valley, have lived with fear and uncertainty. A national expressway to connect Kathmandu with the Terai, the southern plains of Nepal, is slated to slice through the fertile farmlands of the indigenous Newa people. The expressway is expected to spur development and economic growth, but local residents fear the displacement of their communities and damage to their cultural sites, and they say they were not consulted and that the project was designed and initiated without their free, prior, and informed consent.

Khokana residents have organized several protests in their hometown and in Kathmandu, the country’s capital, but with no legally recognized mechanisms for dispute resolution or redress they don’t see a way forward. Several infrastructure projects in Nepal have encountered this kind of resistance from communities facing economic, social, and environmental impacts, and too often these disputes fester, disrupting the timely start and completion of projects as well as the lives of affected citizens.

Women rest during their regular fieldwork. The Newa people of Khokana, Nepal, fear the displacement of their communities, loss of land, and damage to their cultural sites from a much-needed expressway project (photo: Alina Kumari Tamrakar / the Asia Foundation).

Infrastructure development in Nepal is a high priority for the government and communities alike. So, to get a closer look at the nature of community grievances related to infrastructure development and investigate possible avenues of redress, particularly under Nepal’s new and evolving federal system, The Asia Foundation conducted an assessment supported by the World Bank. The study, now available online, found that although current laws and policies on infrastructure development recognize the possibility of disputes, particularly over compensation for lost lands and structures, they don’t provide a mechanism for dispute resolution apart from litigation. This same lack of recourse at local project sites leaves communities with limited options to defend their rights.

Some communities have invoked Nepal’s commitments to international conventions, especially the International Labour Organization’s Indigenous and Tribal People’s Convention of 1989, to seek remedies. While the convention provides an avenue to contest government decisions, it does not prescribe a resolution process or establish levels of compensation for affected communities.

The government of Nepal has so far limited its role in infrastructure-related disputes to determining rates of compensation for property, often leaving social, cultural, and environmental claims unaddressed. Even within the ambit of compensation, the rate is determined by narrowly focusing on the land’s commercial value rather than its cultural and social value. The inadequacy of such determinations can be traced to the silence of national laws on issues related to the loss of cultural sites, displacement of inhabitants, and environmental damage.

In the absence of legally mandated dispute resolution mechanisms, a number of ad hoc practices have emerged. The assessment found three key practices. First, project officers are tasked to screen, accept, and resolve grievances that emerge at the project site. These officers enjoy complete discretion in their dealings with grievance-holders, which can make the process arbitrary, subjective, and opaque. They have no training in dispute resolution, and the manifestly asymmetrical power relations between project officers and those seeking redress can make negotiations unfair and unjust.

Infrastructure development in Nepal is a high priority for the government and communities alike, but unresolved disputes can disrupt the timely start and completion of projects as well as the lives of affected citizens (photo: Conor Ashleigh / The Asia Foundation).

Second, the government’s implementing agencies can intervene to resolve disputes. With their ability to mobilize higher authority, resources, and expertise, these agencies have the power to break the cycle of claims and counterclaims and open space for negotiations. For instance, they can seek cabinet approval to relocate sensitive cultural sites or guarantee local employment for affected communities. Their involvement does risk exacerbating the power asymmetry between the parties, however. On projects with bilateral or multilateral funding, a third-party mediator is normally appointed, which has the potential to level the playing field, but grievance-holders must still navigate language and cultural barriers and bureaucratic hurdles to use these mechanisms. 

Third, dispute resolution by local governments, in which local representatives act as third-party mediators, is fairly popular among stakeholders. It can neutralize the power asymmetries of the other two approaches. Local governments have the political incentive to resolve disputes quickly in order to secure the economic benefits of a project and appease their constituents. Since local governments in federal Nepal also serve as quasi-judicial institutions, their interventions have legal standing and are usually more effective. Their authority, however, is limited to mediation, and they cannot issue orders to federal government agencies or decree final outcomes. 

These ad hoc practices and their shortcomings make a compelling case for a comprehensive and accessible national mechanism for resolving disputes and redressing grievances over infrastructure projects. The study recommends specific government measures to develop suitable laws, practices, and procedures to settle grievances and disputes. Where laws are already in place, appropriate by-laws or regulations should be formulated to implement them.

The ideal strategy would be to develop an umbrella law or policy that holistically addresses the disputes and grievances arising from infrastructure development projects. Where existing laws cannot be amended, changes can be made in the associated rules, regulations, and guidelines. And due consultation with all stakeholders, local communities, and infrastructure developers (including the government) is critical for both the design and implementation of such frameworks. 

As discussed above, the existing structure creates space for negotiating compensation, but it doesn’t provide formal dispute resolution mechanisms such as third-party mediations. Mediation makes it easier to identify the parties’ bottom-line positions and possible common ground than do negotiations, where power asymmetries may distort the process. The government could designate its own specialized unit or provide for trained mediators to be hired for the purpose. Shifting from negotiation to mediation would also reduce the likelihood of communities or the government resorting to political tactics.

In addition, a plethora of grievances can be averted by robust consultations with communities and local governments. What is valued by the community cannot be identified without these consultations, and it is methodologically difficult to assess appropriate monetary compensation for the loss of a cultural site or damage to local ecosystems. These engagements with the community must be inclusive and representative, and project details must be communicated fully and proactively to prevent rumors, confusion, and misunderstandings.

The fertile fields of Khokana (photo: Alina Kumari Tamrakar / The Asia Foundation)

Meanwhile, the residents of Khokana have refused the offered compensation. They have formed two “struggle committees” to negotiate with the Nepal Army, the national expressway project’s implementing agency, but no meetings have yet taken place. The Army has moved the start of construction from Khokana to Nijgadh, the other end of the expressway. A recent report shows that more than 16 percent of the work has already been completed in this fiscal year. Even though ad hoc efforts to break the impasse have been launched, they have not gained traction.

Read the complete report: Politics and Processes of Local-Level Dispute Resolution in Infrastructure Development Projects in Nepal: A Rapid Assessment.

Nischala Arjal and Ram Tiwari are consultants interested in the fields of law, dispute resolution, and dialogue, and Sumina Karki is the assistant director of social development programs for The Asia Foundation in Nepal. They can be reached at [email protected], [email protected], and [email protected], respectively. The views and opinions expressed here are those of the authors, not those of The Asia Foundation.

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