Environment, the biggest loser in Nepal’s expensive elections नेपाली मा पढ्नुहोस

More than 200 elected representatives across three levels of government have ties to the construction industry.

We have compiled a searchable database, where you can find out which public offices they hold, their business interests and which political party they belong to.

For example: Type district, political party, province name

As Nepal heads towards another election cycle, CIJ will continue to expand this database. Help us make this list more comprehensive with your feedback and if you have information that might be missing here, please write to us at mail@cijnepal.org

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When Nepal held its local and federal elections after nearly two decades in 2017, there was already a precedent set by the previous elections of parties handing out tickets to individuals with ties to prominent businesses, from education to banking. But it was the construction industry that stood out, because of the record number of individuals with ties to the industry who were given these tickets. In the second Constituent Assembly election in 2013, nearly a dozen individuals with direct ties to the construction business were elected.

Since then elections have become more expensive and more competitive, with candidates outspending each other in the campaigns -- from event-hopping on helicopters to advertisements on social media.

Veteran politicians like the former vice-chair of the UML, Yuvaraj Gyawali, have publicly said that they couldn’t contest the 2017 election because of how costly campaigning had become.

“The elections have become ridiculously expensive for mid-level politicians and cadres to even consider contesting,” Gyawali was quoted saying in an interview from 2017. “Now it’s all about contractors who are most visible in all the districts and have leaders in their pockets during and after the elections.”

The 2017 elections were thus flooded with candidates from the construction industry vying for public office in local, provincial, and federal governments, many with patchy records of abandoning government projects in limbo.

According to a study by the Election Observation Committee Nepal, a poll monitoring body, each winning candidate in the federal parliament in the 2017 election spent an average of Rs21.3 million. The Election Commission had set a cap of just Rs2.5 million for each candidate directly contesting a seat for the federal parliament. The same study also places a hefty price tag of Rs 131.63 billion on overall election expenses in 2017.

Binod Sijapati, who led the study, says that the findings indicate a shift in how different business groups have firmly attached themselves to the country’s political processes to further their interests.

“Earlier, these individuals with ties to businesses used to be in the background, maybe helping political leaders with financial contributions during elections as a way to lobby for them and their industry,” he said, “but after 2006, we’ve seen an upward trend of more and more of these individuals contesting in the elections to play a more active role in advancing their interests.”

The 2017 elections further exposed the cosy relationship between sand mining, construction companies, and Nepal’s political parties. Nearly two dozen contractors with ties to the construction industry, many of them members of the Federation of Contractors Association of Nepal, won seats in the provincial and federal parliaments that year. According to a 2018 report by Himal, a quarter of all elected representatives at the local level have ties to the construction business. This has resulted in irregularities in public procurement and natural resource extraction.

In Myagdi, where 30 people lost their lives in landslides last year, at least half a dozen elected officials have connections to construction companies, according to records from the Federation of Contractors Association of Nepal and the Department of Cottage and Small Industries in Myagdi. These officials have awarded road building contracts to their own companies.

With industry insiders now a part of local and provincial governments, there is even less incentive for the authorities to regulate the lucrative river mining business, which in many local bodies have also become a top revenue earner. The handful of officials who have tried to ensure better regulations have been met with several roadblocks because of the construction industry’s overreaching influence in the country’s power corridors, experts say.

There have been several instances of government bureaucrats being punished simply for doing their job. In 2017, local development officer Jiblal Bhushal was transferred from Nuwakot merely a month after his appointment because he fined a local crusher operator for illegally extracting riverbed materials.

Riding high on the ‘prosperity express’

In the last decade, there has been a growing emphasis on connectivity and infrastructure, with subsequent governments trying to sell the ‘prosperity’ rhetoric. This has meant that road and bridge building projects are taking up an ever-growing share of physical infrastructure budgets at the federal, provincial, and local levels.

And these projects have fueled the demand for construction materials like sand and gravel excavated from riverbeds. But most of the sand mining operators in the country have time and again been found not following due process to protect the surrounding environment, as pointed out by the federal parliament’s natural resource committee time and again.

Very few offenders have ever been punished, which experts say could be because so many individuals with direct ties to construction industries have entered politics.

“The price we have to pay for ecological destruction caused by uncontrolled excavation of rivers and hills far outweighs the economic gains it brings,” said former finance secretary Rameshore Khanal. “But the industries benefiting aren't bothered about the environment.”

Moreover, with construction industry insiders now elected to public offices, they flagrantly lobby for their businesses. The House of Representatives regulations clearly state that members of committees shouldn’t participate or vote on matters where they have a conflict of interest. But many of these elected contractors are also nominated by their parties to be members in powerful parliamentary committees like the development committee, which oversees contractors for large government projects, from bridges to canals and roads.

Jeep Chhiring Lama of the Nepali Congress, who runs Lama Construction, is a member of the development committee and his company has received several government projects. But he has no qualms speaking brazenly against government decisions that could hurt his business.

Speaking in the federal parliament in early 2018, when the government had begun monitoring the contractors’ activities in a large infrastructure project, Lama, instead of discussing the budget, went off on a tangent about how the action against construction companies was unfair.

“If this industry collapses then the country will not be able to move forward, mark my words,” he warned from the podium at the House of Representatives.

This conflict of interest is exactly what lawmaker Durga Paudel had raised when Lama, Hari Narayan Rauniyar of Pappu Construction, and Bahadur Singh Lama of Himdung and Thokar Company were nominated to the development committee of the federal parliament.

“They get visibly irritated when we raise this issue but the fact is they have been wielding influence to further their business,” Paudel said. “Why else would their companies continue to bag big government contracts despite doing such shoddy work?”

Lama’s company has a patchy record with projects being delayed or abandoned. But because he is on a committee that oversees such public work, Paudel says, he is always able to get away.

Lawmakers are also worried that the government’s decision to relax the ban on export of sand and gravel will not just allow for the plundering of rivers and hills but also allow mining industries to further influence the government to bypass rules intended to protect the environment.

The influence of the mining industry has already started as seen in the budget, which didn’t just roll back the export ban but also provides tax exemption on the import of materials to build ropeways for these industries to transport construction materials.

“We have already seen a business and political nexus at the local level in these industries, and with exports opening up, we can only imagine how a similar nexus will begin wielding influence for the profit of a few individuals,” said Nepali Congress lawmaker Gagan Thapa. “This industry has always thrived on unfair practices, and it will continue to do so even more now.”

Khemraj Regmi, former president of Transparency International Nepal, which has time and again raised the issue of growing policy-level corruption in the country, says Nepal is already headed towards crony capitalism.

“The nexus is obvious, the easy money made from riverbed mining, helps them not just with influencing political parties and leaders, they are now contesting elections,” he said. “That gives them ample opportunity to foil any attempts to regulate these industries.”

Citing the example of the public procurement regulation, which has been amended 10 times already, with four amendments made in a span of seven months because of pressure from contractors in 2019 alone, Regmi says, “They feel they can get away with anything, that there is no one to stop them.”

But the president of the Federation of Contractors’ Association of Nepal Rabi Singh says such allegations which lump all of them together aren’t fair.

“A handful of contractors who have received blessings from the political class have benefitted from the amendments to the procurement regulations, but our entire industry gets a bad name for it,” said Singh.

He admits that while the presence of contractors has increased in politics, it hasn’t necessarily furthered the interests of the construction industry as a whole.

“Contractors who are now lawmakers have further consolidated their influence, and it is only their companies who are bagging all the major public projects,” he said. “Most of us are still struggling to get the government to pay us on time for smaller projects.”

Having witnessed politicians turn a blind eye to the rampant exploitation of natural resources, advocate Padam Bahadur Shrestha understands that guidelines alone aren’t sufficient to address the problems created by the river mining industry.

“Our rivers and hills were already being plundered to meet the local demand, with the new government policy it is going to be a bonanza for the largely unregulated mining industry,” he said.

While his case might take a while to get a hearing date amidst the pandemic, he is hopeful that if the court rules in their favor, sooner or later, mining industries will be legally bound to conserve the environment.

“Separate laws for natural resources use are needed because the existing guidelines cannot punish the companies exploiting our rivers,” he said. “Right now, the most that can be done is revoke their licence, but no further legal action can be taken.”

In the last decade, there have been around 150 rulings related to the environment in the Supreme Court. While not all have led to concrete changes, there have been a few like the 2010 case filed by advocate Narayan Devkota which called for urgent action against uncontrolled sand mining in the Tarai districts bordering India. The ruling on that case eventually laid groundwork for the subsequent ban on the export of sand and pebbles to India, which has now been rolled back.

Shrestha says he is disheartened by the political class’ failure to acknowledge environmental concerns as serious problems and further allow for degradation of the environment. Now, he says, he and his colleagues will expand their demands to asking for a revocation of the export ban.

“Our demands will not just be to seek separate laws for natural resource management, but demand a complete ban on the exports of sand and gravel,” said Shrestha. “We will now work twice as hard to remind the government about its responsibility to protect the environment.”

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