For a long time the all-party mechanisms governing local level units after the dissolution of elected local governments in 1997 were considered among the most corrupt public entities in Nepal. In the absence of elected office-bearers, the local political representatives, who were really not accountable to anyone, open­ly siphoned off vital funds meant for development projects. The hope was that with the election of office-bearers, there would be a reduction in local-level corruption. It has proven to be a false hope.

Local elections were finally held in 2017, after the country went 20 years without elected representa­tives. This also marked the imple­mentation of federalism enshrined in the new constitution. But local representatives, the torchbearers of federalism, are giving a poor account of themselves. These days, 27 percent of all complaints (of over 24,000 in 2019) the Commission for Investigation of Abuse of Authority (CIAA) gets relates to local govern­ment units.

In another recent CIAA survey held across 15 sample districts, 67.6 percent of those surveyed report­ed increased corruption at the local level.

Thus, even though Nepal has climbed up the Transparency International’s Corruption Percep­tion Index this year, the local level appears to be a grim place. There are many factors abetting local level corruption. Rampant impunity, political protection of the corrupt, high electoral campaign financing, insufficient laws—they all contribute.

The growing perception that the agencies responsible for bringing federalism to people’s doorsteps are the biggest bastions of corrup­tion is dangerous for the health of the nascent federal republic. It’s true that the federal-level leaders in Kathmandu have been reluctant to delegate power and responsibility to the provincial and local levels. But the local units that often complain about the lack of funds and man­power are also making a poor use of what they already have.

This will continue to be the case until a sense of accountability is instilled in them. It’s difficult to keep a tab on all 753 local units in the country, as the CIAA is find­ing out. Never mind the new TI rankings; Nepal is still a thoroughly corrupt country.

In 2019, the Commission for Investigation of Abuse of Authority (CIAA), the anti-corruption watchdog, received 24,085 complaints related to corruption and irregularities in public and private offices across the country. Of them, complaints related to local governments were at an all-time high: almost 27 percent. The figure was 23 percent last year. Other complaints hardly crossed 15 percent. Does it mean our local bodies have grown more corrupt?
“The high number of complaints related to local level units means these bodies are thought of as highly corrupt,” says the CIAA spokesperson Yadav Koirala.
There is a perception that corruption at local level has been rising after formation of local and provincial governments following the 2017 elections. After the expiry of the term of local bodies in 1997, corruption was rife for over two decades. But, instead of improving after the 2017 elections, the situation seems to have actually worsened.
Government data and various surveys show corruption is more prevalent at the local level than at the center. Recently, the CIAA conducted a 15-district survey aimed at garnering public perception of corruption. Of the 3,000 respondents, 67.6 percent reported increased corruption at local units and 14.9 percent said they paid bribes to officials to get things done. Of the respondents, 31.6 percent were from Karnali Province, who reported corruption in 76 of 79 local units in the province. Respondents said corruption had increased after the formation of local units two and half years ago.
There are three main reasons for increase in local level corruption. First is impunity, which gives an impression that one can get away even if found guilty of corruption. Second is political protection, which runs from top to bottom and goes even beyond party lines. Political leaders try to block both the filing of a complaint and the action by anti-corruption bodies. The third reason is the tendency of elected officials to recover electoral expenses through abuse of power.
Serving political interests
Elections have been a costly affair in the past one decade. Candidates spend millions of rupees even to campaign for a ward chair’s post. They often incur debts, and try to recoup the money if elected. Former chief of the CIAA, Surya Nath Upadhyay, reckons there also “insufficient laws and mechanisms to control corruption.”
“The status of Province 2 is worse still as there is a social compulsion to earn money by any means,” adds Upadhyay.
Few weeks ago, the CIAA dispatched a long directive to local units pointing out possible areas of improvement. The commission has found that many local bodies allocate budget without proper endorsement, and transfer funds from one head to another without justification. Even after over two years, some local units are operating without an endorsed budget. This increases chances of corruption, according to the commission.
There is also a tendency of doling out money to party cadres in the name of medical treatment, which is against the Local Government Act 2017. The CIAA further states that local governments approve development projects without consulting experts, locals, and marginalized communities. The anti-graft body says projects are mostly designed to serve political interest.
The user committees formed at the grassroots level are another reason to worry as the CIAA finds them contributing to corruption in development projects. The commission has found that the same people who select projects sit in local user committees, which makes check and balance impossible. The commission has suggested dissolution of such committees.
“However, it is not easy to dissolve them without creating their alternatives on the ground. I don’t think it’s possible,” says Upadhyay. The CIAA is of the view that such committees should at least be kept away from political parties and bureaucrats who try to manipulate them for their advantage.
In some districts, the user committees and contractors receive big amounts in advance without doing anything. The CIAA has issued circulars to the local bodies to take action against these people and find alternative ways to complete work on time. There have also been cases of elected representatives operating heavy equipment companies. Moreover, there is a tendency of giving development tasks to the same company repeatedly, blocking competition, in clear violation of the Public Procurement Act. The CIAA has also found that in some places payments were made against fake bills.
Wasting taxpayer money
To reduce the chances of political leaders taking projects to their pocket areas, the CIAA has asked all local bodies to select projects based on relevance and long-term strategy.
The infrastructure sector probably suffers the most. Many projects are built without proper documentation. There is also a lot of forging, such as making fake reports of project completion. Technical officers who are responsible for monitoring the quality of construction rarely reach the sites. In several cases, there is lack of trained technical manpower, and the user committees do nothing more than exploit the situation.
Elected local officials used to draw salaries after assuming office in 2017, which was against the law. In October last year, the Supreme Court annulled the provincial laws that allowed this practice. As per the law, these officials are entitled to only some facilities including monetary incentives but not salaries. Many municipalities and rural municipalities have bought luxurious vehicles, which has been criticized as extravagance with taxpayer money.
Meanwhile, local governments get funds from both government and non-governmental organizations for ‘training and empowerment’. The CIAA finds that most such projects result in no positive outcome. Such programs have rather become platforms to pay allowances to government staff and political cadres. The same people participate in different events. In some cases, the CIAA found forged bills for event expenses.
Local bodies also seem to disregard environment while starting new construction. An environmental impact assessment is never held. Even the durability of the work is not studied. Newly constructed roads are so weak that they can be easily swept away by floods and landslides, giving local officials further incentive to allocate and siphon off funds for maintenance.