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Sharada Prasad Trital is a former secretary of Nepal government. He has held various positions in the Prime Minister’s Office, Election Commission, Ministry of Land Management, Cooperatives and Poverty Alleviation, among others. He also headed the Lalita Niwas land grab scam probe committee. He is a student of good governance and anti-corruption.

Corruption remains a formidable challenge in our country, a sentiment widely shared among the populace. Despite numerous ideas, plans, policies and laws in place, corruption is prevalent and persistent. Addressing corruption effectively necessitates understanding and action on two critical fronts: prevention and the pursuit of curative solutions. Trital presents a 10-point blueprint to control corruption.

Preventive measure

Preventing corruption primarily rests upon the government’s shoulders, notably the prime minister as the executive head. Evaluating the post-2006/07 scenario, it is evident that, except for Sushil Koirala, all prime ministers were embroiled in corruption. Whether directly or indirectly shielding the accused, they contributed to corruption. Consequently, the government, parliament and political parties emerged as major contributors to the escalation of corruption. While bureaucrats are often perceived as key components in corruption, it’s imperative to recognize that without the support of political power, their involvement in corrupt practices would be considerably constrained. Therefore, the linchpin of corruption lies within the prime minister’s sphere of influence. Given the prime minister’s accountability to parliament, it assumes a significant role in combating corruption. The control that political parties wield over the parliament makes them crucial components in addressing corruption. Regrettably, in our case, neither the prime minister, parliament, nor the political parties have earnestly endeavored to combat corruption. This failure has inadvertently nurtured a culture of corruption in our society.

Curative measures

In addressing the curative aspect, institutions dedicated to combating corruption, such as the Commission for Investigation of Abuse of Authority (CIAA), have been deliberately weakened, restricting their ability to operate independently. It is evident that other corruption-controlling institutions operating under the government also lack the necessary strength. Enhancing the functionality of these institutions requires the implementation of laws, policies and structural improvements. Have we made progress in this area? Unfortunately, no. Upon ratifying the United Nations Convention against Corruption, the obligation to devise a national policy against corruption was incumbent upon us. Around 15 years ago, we formulated one: the National Framework to Control Corruption. Astonishingly, except for the individuals involved in drafting the framework, only a handful of individuals are aware of its existence. No further initiatives have been taken, nor have any other anti-corruption policies been introduced. Scant attention, if any, has been paid to implementing even one percent of the framework’s directives.

Legislature measures

Regarding legislation, our anti-corruption laws date back two decades, exemplified by the Prevention of Corruption Act, 2002. While the methods and mechanisms of corruption evolve annually, the laws designed to prevent corruption remain stagnant. Without updated laws, combating the various manifestations of corruption prevalent in today's society is an arduous task. In 2019, the Nepal Communist Party-led government proposed two amendment bills (CIAA Act and Prevention of Corruption Act) to the National Assembly, purportedly to modernize corruption-related laws. However, these amendments, upon closer examination, were found to pose more danger, potentially fostering a culture of corruption rather than effectively controlling it. Among the amendments proposed, certain provisions stipulate that a corruption case must be filed within five years from the moment when knowledge of someone committing corruption is acquired; otherwise, the case would be dismissed. This limitation could result in numerous cases going unpunished, as instances of corruption can surface at any time. Additionally, one provision in the amendments asserts that decisions made during Cabinet meetings would be beyond the scrutiny of bodies like the CIAA or other corruption-controlling entities. However, a critical issue arises from the absence of a clear definition for ‘policy decision’. Presently, the CIAA interprets Cabinet decisions as policy decisions, claiming that probing these decisions falls beyond its jurisdiction. This provision could potentially shield political influences, allowing them to evade accountability.

International experiences

Internationally, it’s a common practice for government officials to disclose details of their assets upon assuming office. This practice serves as a means to combat corruption, shedding light on their pre-office holdings in comparison to their present assets. However, the proposed amendments seek to abolish this practice, relieving individuals from the obligation to disclose their assets unless specifically requested by relevant institutions. Notably ironic, these amendments were tabled by a prime minister who championed slogans against corruption. Subsequently, three years later, the National Assembly passed the amendment to the lower house. This action effectively implicates the major three political parties in promoting corruption, casting doubt on their commitment to combating it. It’s evident that expecting genuine anti-corruption efforts from these political parties seems increasingly doubtful.

Curbing policy corruption

Policy corruption stands as a significant threat in Nepal. Typically, the Cabinet’s primary tasks involve making three major policy decisions: drafting or amending laws, addressing special cases such as disasters and emergencies and accepting foreign assistance and grants. The remaining 95 percent of decisions made during our cabinet meetings are of a general nature. However, there exists a troubling trend where seemingly simple decisions that could be addressed at a lower administrative level are elevated to the cabinet level to avoid scrutiny and potential punishment. The CIAA, the primary body tasked with probing corruption, has stated that investigating policy decisions falls outside its jurisdiction. This misuse of policy decisions in Nepal has facilitated and exacerbated policy corruption within the system. The control of policy corruption is heavily reliant on governmental involvement. However, it’s a widely acknowledged truth that governments in our country have consistently failed to address corruption. Instead, they often contribute to its proliferation through various means. Given this reality, the prospect of curbing corruption in Nepal seems nearly unattainable under the current circumstances.

Promotional aspect

The government can launch promotional campaigns including educational materials from the school-level to minimize corruption. It can also help in the organizational development of anti-graft bodies so that they can work properly. Else, the government can also form independent institutions to prevent corruption. Also, the government can see if the rules against corruption are implemented or not. It can also prepare different codes of conduct and implement them properly. The parliament should also direct the government to function properly. The parliamentary committees have the right to direct the government and they should exercise their rights to curb corruption. 

Role of civil society

On the preventive front, the active engagement of civil society and media holds substantial potential to exert pressure on the government. Unfortunately, contemporary civil society frequently aligns themselves with specific factions, compromising their independence. Additionally, major media houses often allocate insufficient coverage to corruption cases, limiting their impact. An internationally recognized practice involves governments investing in media houses to engage in investigative journalism, particularly concerning corruption cases. Implementing a similar strategy could prove beneficial for us. Take, for example, instances like the Lalita Niwas land grab case or the fake Bhutanese refugee scandal—neither the government nor mainstream media uncovered these cases. Instead, it was a handful of diligent journalists who dedicated themselves to investigating and exposing these scandals. Furthermore, the absence of legislation protecting whistleblowers is a critical deficiency in our efforts to combat corruption, highlighting the urgent need for such legal provisions.

Role of courts

In the realm of curative measures, the role of the courts is crucial, as anti-graft bodies are tasked with investigating cases, while the responsibility of delivering verdicts falls upon the Special Court and the Supreme Court. However, the overwhelming caseload within Nepali courts poses a significant challenge, leading to delays in reaching conclusions for corruption and other cases. Shockingly, there are decades-old corruption cases still pending in the courts. Moreover, the reluctance of our political parties, parliament, and government to fortify our institutions exacerbates this issue. Political involvement and appointments within these institutions have created an environment conducive to shielding corruption through political influence.

Conflict of interest

Nepal grapples with numerous instances of conflict of interest. It’s not uncommon to find individuals who simultaneously hold positions as bankers and lawmakers. This dual role often leads to the creation of legislation that directly benefits their affiliated organizations. Addressing these conflicts of interest is of paramount importance to ensure ethical governance and prevent the manipulation of laws for personal or organizational gain.

The role of political parties

Given the ineffectiveness of the primary three political parties in combating corruption, it’s imperative to contemplate alternative approaches. The upcoming election holds significant weight, poised to determine the trajectory of Nepal’s corruption culture. The decisions made during this election will shape the direction in which the fight against corruption progresses within the country. 

ActionAid International Nepal (AAIN) has submitted a letter of concern regarding climate change to Nepali legislators on Sept 5 as part of their ‘Climate Justice Campaign’. Climate change stands as one of the most pressing global challenges confronting humanity today, impacting communities worldwide, particularly vulnerable communities and people but it has differential impacts. This issue transcends environmental boundaries, encompassing social, economic, political, and cultural dimensions.

AAIN initiated the ‘Climate Justice Campaign’ on June 5 during World Environment Day, featuring a week-long series of events in Kathmandu and its surrounding regions led by youth, women, and children. This campaign has fostered a deeper understanding of the interconnectedness between climate change, its consequences, and the injustice it perpetuates. It has rallied affected populations, including youth, farmers, women, children, and various stakeholders, to out loud their voices in the call for climate justice.

On Sept 4, ActionAid Federation, with a presence in over 50 countries, formally launched the ‘Climate Justice Campaign’ globally within its federations and beyond. AAIN is also coordinating various activities to coincide with the official campaign launch. The primary objective is to mobilize young people, women, and children to raise public awareness about the urgency of climate justice.

Nepal is among the countries most at risk from climate change due to its geographical location, which exposes it to severe impacts, adversely affecting people's livelihoods and adaptive capabilities. Climate change’s mounting effects manifest directly and indirectly across sectors, especially life and livelihood of people including  agriculture, water resources, forests, biodiversity, health, infrastructure, and tourism. Consequently, Nepal has witnessed a surge in climate-related disasters, including floods, landslides, and droughts, which are expected to escalate in the future.

Although Nepal’s greenhouse gas emissions account for a mere 0.025 percent of the global total, the nation grapples with rising atmospheric temperatures, particularly in the Himalayan region. Despite its small emissions share, Nepal has committed to the objectives of mitigating climate change, as outlined in the Paris Agreement.

Nepal has developed a long-term strategy to achieve sustainable emission reductions and attain net-zero emissions by 2045, aligning with its Paris Agreement commitments. Additionally, Nepal has engaged in agreements and collaborations with international bodies to mitigate climate change’s effects, implementing essential policy reforms, timely initiatives, and national plans and programs. And prepared the Nationally Determined Contribution (NDC) and National Adaptation Plan (NAP) document with its implementation plan, though it is still heavily underfunded. The country has been a party to the UN Framework Convention on Climate Change since 1994, actively participating in climate change initiatives.

Nepal has established various mechanisms, including the Climate Change Coordination Committee and the Climate Change Management Division, and employs climate budget coding to address climate change challenges. The government collaborates with the international community as a signatory to the Kyoto Convention, the Paris Agreement, the Sendai Framework, and the Sustainable Development Goals.

Despite these efforts, the issue of climate justice has not received sufficient priority in practice. Nepal’s annual budget allocates an inadequate portion to address climate change impacts, with only 5.96 percent directly relevant to climate, 29.9 percent indirectly relevant, and 64.14 percent climate-neutral. Furthermore, climate policy mandates that 80 percent of international climate finance should reach the local level, a goal that remains unmet.

“Elected parliamentarians should proactively play a crucial role in minimizing climate change’s adverse impact on through policy departure,” says Sujeeta Mathema, executive director of AAIN. “There is a pressing need to lead the climate justice campaign from the global to the national to the grassroots level. The government must execute climate change policies and plans, allocate budgets, monitor its effectiveness, and mobilize resources at the local, province, and federal levels. Government should actively contribute to the global climate negotiation process of climate change.” 

Lawmakers can initiate and lobby for budget allocation for climate actions, says Saroj Pokharel, Head of Program And Policy at AAIN. “During the preparation of the annual budget, lawmakers can draw the attention of the government for the allocation of more funds for the plans and programs related to climate change.” He further says that the implementation of the target by the government should be closely patrolled by the lawmakers.

What AAIN anticipates from lawmakers?

• AAIN believes that Nepal and other climate impacted nations have the right to receive grants, not loans, to address problems stemming from both underdeveloped and industrialized countries. Therefore, there's a call to actively discuss and promote the idea of securing grants rather than loans. The rationale behind this is to prevent the mounting burden of debt, which could adversely affect the country's economy and lead to a debt trap. To combat the impacts of climate change, there is a need to exert pressure on the government to seek financial assistance in the form of grants from donors and other means of financing.
• AAIN urges the government to establish a dedicated mechanism for climate diplomacy within the Ministry of Foreign Affairs. Such a mechanism would facilitate more effective collaboration with the international community in addressing climate change issues.
• Despite Nepal being highly vulnerable to climate change, there is a lack of effective utilization and tracking of foreign aid to tackle this problem. Nepal currently lacks precise data on the funds received under the banner of climate finance. This information gap poses a risk of missing out on potential opportunities for international climate financing. To address this concern, AAIN suggests the formation of a parliamentary working group or committee that can consult with both governmental and non-governmental agencies, as well as experts active in the field, to gather accurate data and improve transparency.
• Recognizing that climate-related disasters disproportionately affect impoverished, marginalized individuals, women, and small-holders farmers, AAIN emphasizes the importance of parliamentary advocacy for climate justice. This involves understanding the challenges faced by these vulnerable groups and taking measures to enhance their capacity to cope with climate change. Additionally, AAIN recommends the creation of a dedicated fund to manage compensation for loss and damage resulting from climate induced disasters.
• AAIN expresses concerns that climate change might not receive sufficient attention in the 16th five-year plan developed by the National Planning Commission. To rectify this, there's a call to initiate the development of a national plan specifically focused on climate change. This plan should prioritize areas directly impacted by climate change, including green energy, environmental preservation, agriculture, urbanization management, and the oversight of emissions from waste disposal.

Box

ActionAid’s climate justice campaign is spearheaded by those who suffer the most from climate change, namely poor and vulnerable women and young people. The campaign seeks to advance climate justice by adopting effective organizing, mobilizing, and communication strategies to demand social and political transformation. ActionAid acknowledges the importance of youth and women in addressing climate change and simultaneously launched the campaign nationwide with some initiatives at the same time from  11 districts of Nepal, including Tehrathum, Siraha, Mahottari, Parsa, Chitwan, Makwanpur, Palpa, Kapilvastu, Bardiya, Dhading and Doti. Collaborating with local organizations and national solidarity, ActionAid aims to maximize the campaign's impact and create a collective response to climate change by pursuing various activities and mobilization efforts to compel communities, families, students, and activists to agitate for climate justice.

What AAIN do:

• Mobilize vulnerable and poor women and young people to advocate for climate justice and demand social and political change.
• Increase awareness on climate change and its impact, particularly on marginalized communities.
• Empower local organizations and communities to participate actively and make their voices heard in the campaign.
• Develop a collective response to the climate crisis and foster solidarity across different groups and communities.
• Put pressure on policymakers and decision-makers to act on climate change and prioritize the needs of vulnerable and marginalized communities.

Nepal and the Republic of Cameroon have established diplomatic relations. With this, the number of countries with which Nepal has diplomatic ties has reached 180. Ambassador and Permanent Representative of Nepal to the United Nations Amrit Bahadur Rai and Ambassador and Permanent Representative of the Republic of Cameroon to the United Nations Michel Tommo Monthe signed a Joint Communiqué to this effect in a brief ceremony held at the United Nations Headquarters in New York on Thursday. Both the ambassadors had signed a joint letter informing the UN Secretary-General Antonio Gutteres on the establishment of diplomatic relations between the two countries, the Permanent Mission of Nepal to the United Nations said. On the occasion, the ambassadors exchanged views on various topics of common interest to strengthen the bilateral cooperation for the mutual benefit of both countries on national and international forums, especially in the UN forums. Cameroon lies in West Africa and it has more than 240 ethnic communities speaking 230 languages. It shares borders with Chad, the Central African Republic, the Republic of Congo, Gabon, Equatorial Guinea and Nigeria. Cameroon borders the Atlantic Ocean to its south-west. With a population of over 27 million, Cameroon's total area is 475 thousand 440 sq Km. It gained independence on 1 January 1960 and became a UN member on 20 September the same year. Both Nepal and Cameroon are members of the Non-Aligned Movement (NAM).

While the banks are known for their relatively better corporate governance in Nepal, a new report by Nepal Rastra Bank (NRB) says banks and financial institutions (BFIs) have failed to fully comply with the regulatory directives issued by the central bank in matters ranging from loan disbursement to internal audit. The central bank’s annual report titled ‘Bank Supervision Report’ has pointed out several issues where BFIs have not worked in accordance with the provisions in the laws and regulations as well as directives of the NRB. The report has questioned the role of the BFIs' board of directors and senior management of the institutions. Stating that most of the board agendas are related to credit appraisal or approval, the report says the board has spent less time on discussion of issues of compliance of NRB directives and prevalent laws, implementation of directions of previous NRB inspection, status and implementation of comments from the internal and external reports. “Discussions are insufficient on issues related to the identification, measurement, monitoring, and controlling of inherent risks that the bank faces as guided by the NRB Internal Capital Adequacy Assessment Process (ICAAP) guideline,” states the report. Board minutes, according to the report, reveal that excessive waivers have been provided to borrowers. The implementation status of decisions made and directions given to the management are rarely reviewed by the banks’ board. Some of the banks have not even appraised the performance of their CEOs as per the job contracts. The central bank has raised serious questions over the audit function of the BFIs. The audit committee of the banks has not performed its functions/duties as directed by the Banks and Financial Institutions Act (BAFIA) 2073, Company Act, and unified directives of NRB. Some of the banks lack adequate skilled staff in the audit function. In some banks, the performance appraisal of the head of Internal Audit was found to be done by DGM/CEO involved in credit administration. “This is in violation of NRB Directive 2078 which requires performance appraisal of the internal audit head to be done by the audit committee,” says the report.  The report says banks have also not followed the process of appointing an audit firm. While BAFIA requires the audit committee to recommend three auditors to the annual general meeting (AGM) for appointment of the statutory auditor, audit committees of some banks have selected one auditor and then recommended that particular audit firm to the AGM for approval. The other major issue highlighted by the report is carelessness in the loan disbursement by the banks. Loans disbursed were not found to be used for the intended purpose but were classified as pass category which is non-compliance of the unified directives of NRB.  According to the report, new loans were disbursed to settle existing demand loans/term loans/forced loans, settlement of interest at quarter-end, transferred to the account of sister concern without business transaction, and used to settle loan of sister concern in another bank. Ad-hoc loans are regularly used to settle the existing dues/interest of the loan. “Banks have weak post-disbursement monitoring mechanisms resulting in poor monitoring of utilization of loan after disbursement and so loan has been used for a purpose other than intended,” says the report. Banks have renewed revolving loans without obtaining basic documents required for credit appraisals such as audited financials, tax clearance certificates, firm renewal documents, and business inspection reports.  In many cases, banks have been found to not properly assess the borrowers’ requirements, and instances of over-financing have been observed. Some of the banks have even provided personal loans above Rs 5m without any specific purpose, which is non-compliance with the NRB’s unified directives. Many banks have changed the interest premium to the loan clients against the provision of NRB’s unified directives. In the report, NRB says assets liability committees (ALCOs) of banks are found more in status reporting activities and lack proactive orientation regarding assets liability management. Off-balance sheet items are not generally considered while assessing liquidity position. Most of the ALCO meetings are focused on the revision of interest rates on deposits and loans, publication of interest rates, comparative analysis of market interest rates, and approval of deviation of commission and fees of individual clients rather than on strategic aspects like a review of the investment portfolio, and divestment strategy. The report has also said banks have shown little seriousness over the operational risk.  Trainee interns have been found to be assigned to work in sensitive areas with user access in the core banking system (CBS), which is against the provision of NRB unified directives. According to NRB’s Supervision Department Chief Dev Kumar Dhakal, the central bank supervision has highlighted some of the anomalies in the banking system. “The report will help to control the irregularities,” he said. Nar Bahadur Thapa, former Executive Director of NRB said that there are issues in the lending of the banks. “Rather than properly utilizing the depositors’ money, the banks have been randomly issuing loans,” he said, “And, those who’re getting loans have also not used it properly.” The report says  

• Most of the board agendas are related to credit appraisal or approval
• The board has spent less time on discussion of issues of compliance of NRB directives and prevalent laws.
• Board minutes reveal that excessive waivers have been provided to borrowers. 
• Some of the banks have not even appraised the performance of their CEOs as per the job contracts.
• Some of the banks lack adequate skilled staff in the audit function.
• Banks have also not followed the process of appointing an audit firm. 
• Loans disbursed were not found to be used for the intended purpose but were classified as pass category.
• New loans were disbursed to settle existing demand loans/term loans/forced loans, as well as for the settlement of interest at quarter-end
• Ad-hoc loans are regularly used to settle the existing dues/interest of the loan.
• Banks have renewed revolving loans without obtaining basic documents. 
• Some of the banks have even provided personal loans above Rs 5m without any specific purpose.
• Trainee interns have been found to be assigned to work in sensitive areas with user access in the core banking system (CBS)