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Corruption in Nepal - Effects, Causes and Remedies

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From Bribery to Nepotism: Fighting Back Corruption in Nepal

Published On: May 17, 2023 09:00 AM NPT By: Nisha Jha

From Bribery to Nepotism: Fighting Back Corruption in Nepal

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Corruption, a term as old as politics itself, remains a widespread menace that plagues nations worldwide, impeding their progress and development. Put simply, corruption entails the improper use of public power, frequently for personal gain, leading to violations of fundamental principles such as honesty, integrity, and accountability. This pervasive issue manifests in various forms, including bribery, nepotism, embezzlement, and abuse of authority, and can permeate all levels of government, from the highest ranks to the lowest tiers.

According to Transparency International, a global watchdog that monitors corruption worldwide, corruption remains a significant problem in over two-thirds of the 180 countries. The latest Corruption Perceptions Index, released by Transparency International on February 8, 2023, ranks Nepal 110th out of the 180 countries assessed, with a score of 36 out of 100. This indicates a slight improvement from Nepal's previous ranking of 117th in 2021. Nevertheless, the score still indicates a high level of corruption in the country, and considerable efforts are needed to address this issue.

Corruption, the seven-letter word that's been haunting our societies since time immemorial, is a hot topic of discussion in today's world, especially for the developing nations. From stunting economic growth and development to breeding inefficiencies in the bureaucratic system, this issue has got us all wondering - how did it all start, and what can we do about it?

The origins of corruption in Nepal can be traced back to the country's history of monarchy, centralized governance, and lack of accountability. The system of patronage and nepotism under the monarchy allowed for the accumulation of wealth and power by a small elite group, while ordinary citizens were excluded from decision-making processes. This culture of impunity and lack of transparency continued after the establishment of democracy, as political parties and leaders also engaged in corrupt practices to maintain their power and influence. Additionally, Nepal's weak legal and institutional frameworks have enabled corruption to thrive, with limited resources and capacity for law enforcement and oversight.

Corruption has deeply entrenched itself in Nepal, plaguing the country for decades. The reasons behind this issue are multifaceted, encompassing political, economic, social, and cultural factors. One of the primary drivers of corruption in Nepal is the absence of effective governance and a weak rule of law. Consequently, this has fostered an environment where individuals in positions of power can act without consequences, leading to a lack of accountability for corrupt practices. Additionally, a culture of patronage prevails in Nepal, wherein influential figures exploit their power to reward their supporters, often resorting to corrupt means. This perpetuates a cycle of corruption that proves challenging to dismantle.

High-ranked officials with good goodwill may also become corrupt due to the pressures of the system. Corruption is often seen as a means to an end, whether that be gaining power, money, or prestige. For politicians, corruption can help them maintain their hold on power and gain support from powerful interest groups. For normal people in the work process, corruption may be seen as a way to get ahead or survive in a system where opportunities are limited.

The pressure to maintain a certain lifestyle can lead to dissatisfaction and even corruption, especially when people compare themselves to others who have achieved success and wealth. Society often values material possessions and monetary success, and this can create an expectation that people should live a certain way to be considered successful. When individuals feel they cannot keep up with these expectations through legitimate means, they may turn to unethical behavior like corruption to attain the wealth and status they desire. It's important to recognize that everyone has their own values and priorities, and to focus on personal growth and fulfillment rather than comparing oneself to others.

In Nepal, corruption is a systemic issue that requires a multifaceted approach to combat. This includes strengthening governance and the rule of law, promoting transparency and accountability, and creating a culture that values honesty and integrity.

Firstly, strengthening institutions is a crucial step in mitigating corruption in Nepal. The government can empower institutions such as the judiciary, police, and anti-corruption agencies by providing them with the necessary resources to investigate and prosecute corruption cases effectively. This includes providing training for officials and ensuring that they are free from political interference.

Secondly, promoting transparency and accountability can also help mitigate corruption in Nepal. The government can create a legal framework that requires public officials to disclose their assets, income, and interests. This will help detect and prevent conflicts of interest and other forms of corruption. The government can also implement policies that require public institutions to provide regular reports on their activities and expenditures to the public.

Thirdly, public awareness and education are also vital in mitigating corruption. Education campaigns can target different groups of people, including civil servants, business people, and the general public, to promote ethical behavior. The government can also create public awareness campaigns that highlight the negative impacts of corruption on society.

Fourthly, strengthening civil society is also important in mitigating corruption in Nepal. The civil society organizations can provide watchdog functions, investigate and report on corrupt practices, and advocate for policy and legal reforms that promote transparency and accountability. The government can provide support to these organizations and create an environment conducive for them to operate in.

Lastly, empowering citizens is another important way to mitigate corruption in Nepal. Citizens can act as a check on corruption by reporting corrupt practices and demanding accountability from public officials. The government can create mechanisms that enable citizens to report corruption anonymously and without fear of retaliation.

Mitigating corruption in Nepal requires a concerted effort from all stakeholders. The government, civil society, media, and citizens must work together to strengthen institutions, promote transparency and accountability, raise public awareness, strengthen civil society, and empower citizens. By taking these steps, it is possible to reduce corruption in all forms and create a more just and equitable society in Nepal.

In the ongoing battle against corruption in Nepal, we have uncovered disheartening truths, ranging from bribery to nepotism, that contribute to this pervasive issue. The consequences of corruption are severe, hindering development and impeding economic growth. However, there is still hope, as there are viable solutions to combat corruption. By promoting transparency and accountability, strengthening anti-corruption laws and institutions, and empowering citizens to hold their leaders responsible, we can initiate a shift in the prevailing situation. It is the collective responsibility of all individuals, from citizens to government officials, to unite and make concerted efforts towards establishing a more just and equitable Nepal, free from corruption.

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Combating Corruption in Nepal: An Insight into Good Governance Practices

Article 12 Feb 2023 1236 0

Nepal is a country in South Asia, known for its rich cultural heritage, beautiful landscapes, and diverse geography. However, corruption has been a persistent problem in the country, hampering its economic and social development. This article will provide an in-depth analysis of corruption and good governance in Nepal and explore the challenges and opportunities for promoting good governance in the country.

Overview of Corruption in Nepal

Corruption refers to the abuse of power and position for personal or financial gain. It is a global problem that affects all countries, regardless of their level of development or political system. In Nepal, corruption has been a major hindrance to development and has hindered the country's ability to create a transparent and accountable government.

Historical Background and Current State of Corruption in Nepal

Nepal has a long history of corruption, dating back to the monarchy era. In recent years, corruption has increased significantly, particularly in the government sector. According to a study by Transparency International, Nepal ranks 116th out of 180 countries in the Corruption Perceptions Index (CPI), with a score of 28 out of 100. This suggests that corruption is still a major problem in the country, affecting various aspects of life, including politics, business, and the judiciary.

Impact of Corruption on the Economy and Development of Nepal

Corruption has a negative impact on the economy and development of Nepal. It undermines the rule of law, creates an uneven playing field for businesses, and reduces investment and economic growth. Furthermore, corruption also affects public services, such as healthcare and education, by reducing the quality and availability of services to the population. In short, corruption can lead to economic instability and slow down the progress of a country's development.

Furthermore, corruption affects the allocation of resources, as corrupt officials are more likely to divert funds away from critical development projects and towards their own personal interests. This undermines the development of the country, hindering progress and exacerbating poverty and inequality. For example, corruption in the construction industry has led to shoddy work and a lack of accountability, leading to a reduction in the quality of infrastructure in the country.

Moreover, corruption has a direct impact on the delivery of public services, such as health and education. For example, bribes are often demanded for access to basic health services, leading to a reduction in access for the poor and marginalized. This exacerbates social and economic inequality and hinders the development of the country.

Government Policies and Initiatives to Curb Corruption

In an effort to address corruption, the government of Nepal has implemented various policies and initiatives. One of the key policies is the formation of the Commission for the Investigation of Abuse of Authority (CIAA), an independent body responsible for investigating and prosecuting corruption cases. The government has also established a number of anti-corruption laws, including the Prevention of Corruption Act, the Money Laundering Prevention Act, and the Right to Information Act. However, the implementation of these policies and laws has been weak, and corruption remains a major problem in the country.

Role of Civil Society and Media in Fighting Corruption

Civil society and media play a critical role in fighting corruption in Nepal. Civil society organizations can monitor government actions, advocate for transparency and accountability, and educate the public on the impacts of corruption. Meanwhile, the media can help to raise awareness about corruption, investigate and expose corruption cases, and hold the government accountable. However, media freedom in Nepal is limited, and the media often face challenges in reporting on corruption due to political pressure and censorship.

International Efforts to Address Corruption in Nepal

International organizations and donors have been supporting anti-corruption efforts in Nepal. For example, the United Nations Development Programme (UNDP) and the World Bank have supported the government in implementing anti-corruption measures and improving transparency and accountability in the public sector. These international efforts have been successful in some areas, but more needs to be done to address corruption in the country.

Success Stories and Best Practices in Reducing Corruption in Nepal

There have been a number of success stories and best practices in reducing corruption in Nepal. For example, the "Public Service Delivery Monitoring" program, implemented by the government and supported by UNDP, has been successful in reducing corruption in the delivery of public services. The program trains government officials and provides citizens with a platform to report corruption cases. This has helped to improve the delivery of services and reduce corruption in the process.

Another successful initiative is the "Transparency and Accountability in Procurement" project, supported by the World Bank. The project aims to improve the transparency and accountability of government procurement processes, reduce corruption and promote good governance. It has been successful in reducing corruption in procurement by promoting a culture of transparency and accountability in the public sector.

One of the most successful initiatives in fighting corruption in Nepal has been the establishment of the Commission for the Investigation of Abuse of Authority (CIAA). The CIAA is an independent body responsible for investigating corruption cases and prosecuting corrupt officials. The CIAA has been successful in prosecuting a number of high-level officials and has been instrumental in promoting good governance in the country.

The media also plays an important role in promoting good governance in Nepal. A number of media outlets have been established to promote transparency and accountability in the public sector. These media outlets investigate and report on corruption cases, bringing attention to the issue and promoting transparency and accountability in the public sector.

International efforts to address corruption in Nepal have also been successful. The United Nations Development Programme (UNDP) has been working in Nepal for many years to promote good governance and reduce corruption. The UNDP has supported a number of anti-corruption measures, including the "Public Service Delivery Monitoring" program and the "Transparency and Accountability in Procurement" project. The World Bank has also been working in Nepal to promote good governance and reduce corruption.

Despite these successes, corruption remains a serious issue in Nepal and much work remains to be done. The future prospects for good governance in Nepal depend on the continued efforts of the government, civil society, and international organizations to address corruption. The key to success will be to promote transparency, accountability, and good governance practices in the public sector, and to continue to prosecute corrupt officials.

In conclusion, corruption and good governance are critical issues in Nepal. The country has a long history of corruption, but there have been some successes in reducing corruption and promoting good governance in recent years. The government, civil society, media, and international organizations all have a role to play in promoting good governance and reducing corruption in Nepal. The future prospects for good governance in Nepal are promising, but continued efforts are needed to ensure success.

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Corruption in Nepal: A growing challenge for good governance

Nepal is a beautiful country with rich cultural heritage and a diverse population. Despite its potential for growth and development, the country has struggled with a pervasive problem of corruption. Corruption in Nepal is a growing challenge for good governance, and it has become a major obstacle to economic growth, social development, and political stability.

Corruption is defined as the abuse of power for personal gain. It can take many forms, including bribery, embezzlement, nepotism, and cronyism. Corruption is not only an ethical problem, but it also has serious economic consequences. It leads to inefficiency, waste, and misallocation of resources, which can harm economic growth and development.

Nepal is one of the poorest countries in the world, with a per capita income of less than USD 1,000. Corruption has been identified as one of the major factors hindering the country’s economic growth and development.

Reasons behind rising corruption

According to the Corruption Perceptions Index (CPI) published by Transparency International, Nepal ranks 117th out of 180 countries in terms of corruption. This indicates that corruption is a serious problem in Nepal, and it is getting worse.

One of the main reasons for the high level of corruption in Nepal is the weak institutional framework. The country lacks a strong legal system and an independent judiciary, which are essential for fighting corruption. The government has also failed to enforce anti-corruption laws effectively, and corrupt officials often go unpunished.

Another factor contributing to corruption in Nepal is the culture of impunity. Many corrupt officials are well-connected and have powerful political allies who protect them from prosecution. This has created a culture of impunity, where corrupt officials can act with impunity and without fear of punishment.

Nepal’s political instability has also contributed to corruption. The country has gone through a series of political upheavals in recent years, with frequent changes in government and political instability. This has created an environment of uncertainty and instability, which has made it difficult to implement effective anti-corruption measures.

A few major cases

One of the most notable examples of corruption in Nepal is the 2019 wide-ranging investigation into the Nepal Oil Corporation (NOC). The investigation revealed that the NOC officials were involved in a multi-billion rupees scam, where they had embezzled funds by inflating the price of land purchased for building oil storage facilities.

The scam involved senior officials, including former managing director Gopal Bahadur Khadka, who was accused of embezzling over Rs 1.5 billion. The case is still ongoing, and it has highlighted the need for stronger measures to prevent such large-scale corruption.

Another recent example of corruption in Nepal is the 2020 Lalita Niwas land scam . The scam involved the illegal transfer of government land in Baluwatar, Kathmandu, to individuals through forgery and fraud. The investigation revealed that the land was sold at prices far below its market value, resulting in a loss of over Rs 4 billion to the government.

The case has led to the arrest of several high-profile individuals, including former government officials and politicians. The case highlights the need for stronger measures to prevent land-related corruption, which has been a persistent issue in Nepal.

In addition to these high-profile cases, corruption in Nepal is prevalent in various sectors, including education, health, and public services.

Pervasive impacts

Corruption harms all sectors of the economy. It undermines public trust in government institutions, reduces the quality of public services and discourages foreign investment. Corruption also exacerbates income inequality and poverty as resources are misallocated and diverted away from those who need them the most.

The education sector in Nepal has been particularly affected by corruption. Nepali schools suffer from a lack of resources, inadequate infrastructure and a shortage of well-trained teachers. Corruption has exacerbated these problems by diverting funds away from the education sector and by allowing unqualified teachers to obtain teaching positions through bribery and nepotism.

File: Commission for the Investigation of Abuse of Authority (CIAA)

The health sector has also been severely affected by corruption in Nepal. Hospitals and clinics suffer from a lack of resources, inadequate infrastructure and a shortage of trained medical personnel. Corruption has exacerbated these problems by allowing unqualified individuals to obtain medical licenses through bribery and by diverting funds away from the health sector.

The business sector in Nepal has also been affected by corruption. Nepali businesses suffer from a lack of access to credit, inadequate infrastructure and a complex regulatory environment. Corruption has aggravated these problems by making it difficult for businesses to obtain permits and licenses, and by creating a business environment that is hostile to foreign investment.

Corruption in Nepal has been a long-standing issue that has hindered the country’s development and progress. Despite various measures taken by the government to combat corruption, it remains a growing challenge for good governance in Nepal. In recent years, there have been several examples of corruption in Nepal that have highlighted the need for more effective measures to tackle this issue.

Combatting corruption

To combat corruption in Nepal, the government has taken various measures, including the establishment of anti-corruption bodies and the introduction of anti-corruption laws. However, these measures have not been effective in curbing corruption, and there is a need for more significant reforms. The government needs to strengthen its institutions and systems to prevent corruption, such as increasing transparency and accountability in public processes and promoting the use of technology to reduce opportunities for corruption.

In conclusion, corruption in Nepal remains a growing challenge for good governance, and recent examples of corruption have highlighted the need for more effective measures to tackle this issue. The government needs to take stronger action to prevent corruption and promote transparency and accountability in public processes. Only then can Nepal achieve sustainable development and progress.

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Corruption and Anti-Corruption in Nepal Lessons Learned and Possible Future Initiatives

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Corruption in Nepal: Level, Pattern and Trend Analysis

The Government of Nepal has adopted various policies, plans and programs to curb corruption over the years. However, Transparency International (2015) showed that there is a high level of corruption in Nepal. Bearing such aspect in the mind, the study aims to analyse level, pattern and trend of corruption in Nepal by analysing the cases published by Commission for the Investigation of Abuse of Authority in its annual reports from 2005 to 2015. Applying descriptive and bivariate analysis, it draws a level, trend and pattern of corruption and improper conduct using the disaggregated level data. Similarly, it seeks to analyse the relationship between corruption and gender as well as a position of a public official and working place of officials. Findings of this study showed that Nepal has relatively decreased the global corruption index of 2015 compared to 2013 and 2014. It is interesting to note that corruption cases lodged decreased dramatically from 2006 to 2008, however, it started to increase from 2008 onward. Similarly, it is seen that there was no significant fluctuation noticed in the number of complaints received and resolved in the Year between 2006 and 2015. During the Year between 2005 and 2015, the Central Development Region had the highest annual number of corruption and improper complaints registered, whereas the Far-Western Development Region had the lowest. Similarly, Tarai districts recorded the highest number of corruption cases complaints between 2005 and 2013. During the Year 2005 to 2015, Mahottari was repeatedly listed in the top 10 districts registering highest number of corruption and improper conduct's complaints. Additionally, this study also showed a significant relationship in gender, position, working place, and types of corruption with small to moderate effect which offers a new and conclusive perspective in a debate in the scientific community regarding their association. Key words: Corruption, gender, position and workplace

Corruption in Nepal

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New Civil Society Report on Nepal: weak implementation of preventive matters impedes strengthening of anti-money laundering system

17 March 2023 –

Although the Government of Nepal’s anti-corruption agenda is reflected in several plans and policies, the situation has changed in recent years. Notable examples of their legislative framework to combat corruption include the Fifteenth Plan (2019/20-2023/24), the Plan and Programmes of Fiscal Year 2020/21 and a draft National Integrity Policy . Nevertheless, the government and other institutions have been marred by high-level corruption cases frequently reported by the media. Despite promises by various governments and political parties, corruption control has not been a national priority. No real punitive action has been taken by relevant government agencies or the anti-corruption body recently. The Commission for the Investigation of Abuse of Authority (CIAA) has not investigated any high-level corruption cases but has focused more on prosecuting low-ranking civil servants. The conviction rate in corruption cases has been at a record low during the fiscal year 2021-22.

Significant delays have affected UNCAC implementation and reporting over recent years. As of November 2022, the government is still in the process of updating the National Strategy and Action Plan on Implementation of the UNCAC from 2012. Updating the national strategy and action plan is in a preliminary phase and discussions among key ministries are ongoing. The second cycle UNCAC review process in Nepal was scheduled to begin in 2017. The country visit with peer reviewers from Lebanon and El Salvador took place on 25-27 January 2022 with limited involvement of TI Nepal and other civil society organizations. The executive summary of Nepal’s UNCAC review is available on Nepal’s UNODC country profile page .

For all the detailed findings, read the full civil society report in English . A translated Nepali language version of the report is forthcoming.

Main findings

The following are some of the main findings according to topic:

Public sector employment

The Public Service Commission, the body in charge of administering the civil service in Nepal, enjoys independent constitutional status. The Civil Service Act and the Civil Service Rules provide the necessary authority for the civil service administration. The government has tried its best to make the civil service as attractive as possible by reviewing salaries over the span of three years and providing civil servants with benefits, such as a pension, medical insurance, education, and child care allowances, among others. Although Nepal has continuously experimented with anti-corruption reforms within the civil service, it remains marred by inefficiencies, political patronage, and nepotism, which diminish its capacity to contribute effectively to economic development.

Political financing

There is no specific law on political party financing in Nepal. In practice, political party finances and election integrity have always been questionable in the country. The Election Commission makes it mandatory for all political parties to disclose their financing, but most of the parties do not comply with this provision. The integrity of the disclosed information is generally questionable as there is no validating mechanism in place. The Election Commission rarely takes any action in cases where a political party does not disclose its election-related expenses.

Codes of conduct, conflicts of interest and asset declarations

Several codes of conduct exist for employees working in courts, government employees and attorneys, employees of certain ministries, and judges. All emphasize high ethical standards such as neutrality, transparency, integrity, and professionalism and aim to make the concerned officials more ethical, independent, impartial, competent, and diligent. However, codes of conduct are not strictly adhered to in practice, and there are low instances of follow-up in the event of breaches. There is no law in place in Nepal regulating conflicts of interest. All three branches, the executive, legislature, and judiciary, are obliged to file asset disclosures. However, the Nepalese asset disclosure system is merely cosmetic because it is ineffective in practice. There is no real monitoring or a national database for asset declarations in place, and the declarations are confidential and not accessible to the public.

Whistleblower protection

There is no specific whistleblower or witness protection mechanism or policy in place, and there is no enabling environment for whistleblowing in Nepal. However, some legal provisions scattered through different acts, regulations, directives, and practices provide for confidentiality of the identity of the whistleblower, immunity from prosecution, and remedy and compensation in case of harm or loss suffered. However, in practice, there is no guarantee that the whistleblowers will not face retaliation for reporting corruption or misconduct.

Public procurement

Nepal’s Public Procurement Monitoring Office is a key oversight agency with functions such as formulating policies and recommending measures of implementation, monitoring, coordinating foreign technical assistance, and developing human resources related to public procurement. Nepal has created an e-procurement platform with the objective of ensuring transparency. Corruption is pervasive in Nepal’s public procurement sector and there are frequent reports of the embezzlement of public money. The Public Procurement Monitoring Office blacklists bidders, proponents, consultants, service providers, suppliers, construction entrepreneurs or other persons, firms, organizations or companies for one to three years on the basis of the seriousness of their act or misconduct. However, political influences exist, and blacklisting alone may not solve the problem of collusion and impunity relating to public procurement.

Public finances

The Financial Procedure and Fiscal Accountability Act 2019 and the Financial Procedure and Fiscal Accountability Rules 2021 were created to make the fiscal management system responsible, transparent, results-oriented, and accountable. They aim to maintain overall fiscal stability by providing a blueprint for the regulation and management of financial procedures at the federal, provincial, and local levels. An independent constitutional body, the Office of the Auditor General, carries out the national audit. The Public Audit Committee acts as an oversight agency and is mandated to examine the irregularities reported in the Office of the Auditor General’s annual report. Likewise, the Finance Committee of the parliament also provides oversight of public funds. However, there is a growing tendency to bypass the set procedures per the convenience of the parties in power by issuing ordinances instead of obtaining approval in parliament.

Access to information and participation of society

The Nepalese government has not been very accountable to citizens in terms of providing information that is of national importance. The information, particularly that which is politically sensitive, is often delayed and may even be withheld without assigning any reasons whatsoever. Regarding the participation of society in public matters, civil society organizations may be consulted for “matters of public concern” pursuant to laws that deal with good governance. It should be noted that the prevention of corruption has not been directly defined as a matter of public concern but that the participation of civil society organizations may be sought for that purpose, albeit not mandated. Moreover, there are other statutory requirements whereby civil society organizations may have a chance to participate, for instance in public hearings.

Judicial and Constitutional Council

The Judicial Council takes action against judges on various grounds including incompetence, misconduct, failure to perform his or her duties honestly, performance of business in bad faith or serious violation of the required code of conduct. Likewise, the Constitutional Council can oversee the Commission for the Investigation of Abuse of Authority (CIAA). The chief commissioner or commissioner can be removed from the post by the President upon recommendation of the Constitutional Council on grounds of his or her inability to hold office and discharge the functions due to physical or mental illness. Nevertheless, it should be noted that despite serious corruption allegations involving them , in practice, impeaching or removing the chief commissioner or commissioner of the CIAA has been a rare phenomenon.

Private Sector transparency

The Good Governance (Management and Operation) Act from 2008 does not allow ex-civil servants to assume the management role in the private sector, which helps to protect transparency and integrity of the private sector. However, the private sector code of conduct does not suffice, nor has it proven to be effective, to do away with potential undue nexus with the law enforcement agencies and there is no transparency of beneficial owners of companies.

Anti-money laundering

The Government of Nepal recognizes the anti-money laundering and countering the financing of terrorism (AML/CFT) system as a strategic tool to control financial crimes and intends to make its electronic monitoring system ‘goAML’ fully operational. The existing AML/CFT legal, policy, and institutional frameworks provide relatively comprehensive provisions in line with the standards and good practices of the Financial Action Task Force. The Financial Intelligence Unit has assisted other agencies in developing their AML/CFT instruments and has provided resource persons for AML/CFT training and capacity building programs, as well as preparing policies and guidelines.

Asset recovery

Nepal is a member of the Asia-Pacific Group on Money Laundering, Egmont Group of Financial Intelligence Units, Asset Recovery Interagency Network-Asia Pacific (ARIN-AP), and INTERPOL since 1967, and is committed to providing cooperation internationally. However, there is a huge gap in inter-agency coordination and cooperation in policy and at an operational level. There is no system in place for the verification of the ultimate owners of reporting entities, and consequently, there is no monitoring. Moreover, there is no specific law or policy regulating designated non-financial businesses and professions which leaves much leeway for money laundering and corruption.

The Assets (Money) Laundering Prevention Act from 2008 provides the Department of Money Laundering Investigation or its investigating officer the power to give orders for freezing assets during the course of an investigation. Fines are imposed if orders are not complied with. Domestic bank accounts can be withheld and requests for freezing foreign bank accounts can be made through diplomatic channels. Despite reports such as Nepal-leaks 2019 : Illegal Wealth watch, no investigation has been initiated by the government, neither was any action taken to stop illegal investments.

Key recommendations

In its report, Transparency International – Nepal makes several key recommendations for priority actions to be taken to ensure the full implementation of the UNCAC in Nepal, for example:

Involve civil society organizations, the private sector, and the media in combating corruption in general, and interact with them in the UNCAC review process by inviting them to meaningful consultations, as it is a national obligation that is not merely confined to the government.
Formulate and implement special laws in line with international standards, especially in areas requiring full compliance with the UNCAC, namely conflict of interests and party financing. Secure full abidance of existing laws, mitigating all anomalies and intricacies involved, as most of the prevalent laws need immediate amendments.
Ensure that institutions are endowed with adequate human and financial resources and an enabling environment so that they function independently and effectively, as well as in an efficient and sustainable manner.
Demonstrate strong political will to do away with growing impunity by prosecuting even the Politically Exposed Persons involved in corruption.
Allow the Public Procurement Monitoring Office to monitor the assets, income, and spending habits of the procurement officers, as it is the sole monitoring agency for procurement purposes.
Ensure broad participation of civil society organizations, the private sector, and ordinary citizens in formulating and implementing anti-corruption policies and action plans.
Restructure the various anti-corruption agencies so as to avoid duplication of work and coordination problems.
Formulate and implement a code of conduct for the Members of Parliament.
Enact laws that promote cooperation between the private sector and law enforcement agencies to ensure private sector transparency.
Investigate all financial irregularities reported – the Department of Money Laundering Investigation and other agencies concerned must be more proactive.
Strengthen the Law Enforcement Agency’s intelligence capacity.
Create a register of timely and verified beneficial ownership information and make it available to the public to ensure transparency of the beneficial owners of companies in Nepal.

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Transparency International Nepal (TIN) is a civil society institution dedicated to increasing public accountability and curbing corruption in all walks of life. It is registered at the Kathmandu District Administration Office and is affiliated with the Social Welfare Council. TIN is one of national chapters of Transparency International, a NGO that leads a global movement against corruption. Transparency International is active in more than 100 countries with its secretariat in Berlin. It builds up support for the national chapters as part of a growing international movement for a transparent and corruption-free society.

Get in touch

Transparency International Nepal House No.: 57/62 Chhakkubakku Marga, New Baneshwor, Kathmandu, Nepal. P.O. Box: 11486.

Tel: 977-1-4575062, 4575262 Fax: 977-1-4575112 Email: [email protected] Website: https://www.tinepal.org

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Realities in Conflict of Interest and Corruption Challenges in South Asia: The Case of Nepal

ASIA--PACIFIC , 1 May 2023

Kedar Neupane - TRANSCEND Media Service

Introductory Background and the Context

22 Apr 2023 – According to the 2021 Corruption Perceptions Index by Transparency International, Nepal is one of the most corrupt in South-Asia and it ranks one of the top fifteen most corrupt in Asia. Corruption is a well-documented issue in Nepal, and several government institutions and individuals have been implicated in corrupt practices. According to Transparency International’s Corruption Perceptions Index 2021, Nepal is ranked 117th among 180 countries, indicating that corruption is still a significant problem in the country. This has not improved in real terms yet. There have been reports suggesting executive branch of the government, judiciary, public procurement, security agencies, public transport, health care system and education sector have been perceived by people involved in corruption.

Examples of corruption shows that corruption and political interference in the judicial system involving appointment of judges and the handling of high-profile cases; police force’s for accepting bribes and engaging in other corrupt practices in relation to traffic violations and land disputes; public procurement process for lacking transparency and accountability, and absence of performance auditing and collusion of interests; financial mismanagement in health sector in procurement of medical supplies and equipment; education sector in relation to the allocation of scholarships and the appointment of teachers; lack of proper accounting of approved budgetary allocations authorized for disbursements during the fiscal account (known as Berouzu account or unedited year-end expenditures) remain unaccounted for years in billions of rupees under the successive governments.

Sources of the major conflict of interest in Nepal seems to have emerged prominently and openly in public domain with promulgation of state of Nepal into a federal democratic republic and the rise of political oligarchs in the name of an illusionary federal democratic system of governance. It is understandable that a certain level of conflict of interest could have been expected because of age-old socio-economic inequalities entrenched in a society with diverse ethnicities, cultures, and conflicting traditions, for these issues are trapped within the confines of inter-generational poverty and feudal-mindset, lacks critical thinking, and awareness of functional education and prefer political interferences at all levels of governance while keeping financial interests, impunity, and nepotism unbroken.

This landscape can be fertile ground for radicalization of population in socio-political context. This could further weaken governance modules without realizing such imbalances could generate destructive forces in nation building process. This phenomenon easily manipulates national psychic and has adverse impact on political, social, and economic development prescripts in nation’s thinking, and impact fairness and good governance.

Is conflict of interests the mother of all corruption?

Conflicts of interest occur when an individual or organization has competing interests that interfere with their ability to act impartially or in the best interest of others. This creates opportunities for corrupt behavior, such as when public officials use their positions for personal gain or when businesses use their influence on secure favorable treatment.

One must equally recognize that conflicts of interest are not always inherently corrupt, and many organizations have policies and procedures in place to manage them appropriately. Additionally, corrupt behavior can occur even in the absence of a conflict of interest, so it is important to address corruption through a range of measures, including transparency, accountability, and effective law enforcement.

Issues of Public Concern:

Root causes of common conflict of interests

There are some common causes that perpetuate competition over actual incompatible desires which have potentials for developing into conflict over varieties of issues, money, resources, time, power, authority to satisfy own needs at all levels of social and economic spheres, including at work and institutions impacting operating modules resulting into widespread corruption to malfunctioning of democratic norms of governance. Contextual comprehension of such situations requires deeper understanding and recognition of socio-economic compact, political environment construct together with associated evolutionary trends in people’s psychic. More importantly, what it meant by conflict of interests in following areas will require contemplation prior to enacting preventive measures:

Political power : Different political parties and factions within the government modules would have conflicting interests in terms of gaining and maintaining power. Nepal has had a long history of political instability and conflict, with different political parties and groups competing for power. Political violence, protests, and strikes are common. These are common occurrences from learning institutions to civil organizations, state enterprises disrupting public services delivery and quality education affecting daily life and business. Checks and balances between the power centers are required in a democracy for effective functioning of institutions and ensuring delivery of services for greater goods of the public. But in this republic, it has been severely undermined by political parties’ obsession of power for personal gain and authority at any costs, like in an autocracy, as evidenced by the current party politics in Nepal .
Ethnic and regional identities : Nepal is a diverse country with ethnic and regional identities, but not large population like in some other nations like India, Nigeria, or Ethiopia. Conflicts would easily arise when diverse groups feel that their interests are not being adequately represented or protected by the government. Sometimes ethnic groups could have conflicts with each other on issues of little importance at the national level when communities become radicalized for various local reasons. For example, Madhesi people in the southern Tarai region have had conflicts with the Nepali-speaking hill people over issues such as language, representation in government, and resources. Likewise, silent, and unnoticed tension arising from population movement or relocation for economic and social reasons from other regions to urban areas in Tarai, Kathmandu and Pokhara valleys could generate future conflicts. There may also be other issues slowing developing as such when people become increasingly aware of their identities, socio-economic isolation, and demand state recognition.
Religious conflict : Nepal is a predominantly Hindu country, but there are also significant Buddhist and Muslim population, and a growing number of Christians. Media reports indicate there have been tensions between Hindus and Buddhists in the past over issues such as religious practices and festivals, and social events linking with class identities and ethnicity.
Resource allocation economic inequality : Conflicts may arise over the distribution of national resources and state revenues including land, water, forests, and minerals in areas with valuable natural resources. According to World Bank data Nepal has the highest tax rate in terms of GDP per capita in the sub-continent while being one of the poorest countries in Asia. This would imply there would be, in future, more often conflicts over resources, such as land and water and state subvention to support different tiers of governance structure. This means government policies and development projects could also lead to conflicts of interest with local communities.
Corruption in governance system : Financial and political corruption are the major obstacles in good governance in Nepal. Conflicts, however, could also emerge, without much realization of the ground situation, when individuals or groups seek to exploit government resources or influence for personal gain. Government involvement in corruption scandals is plentiful reported by news media. A few examples illuminate the scale of the problem. Scandal on medical supplies procurement deals with OMNI ; scandal on collusion between senior officials of Inland Revenue Department and Tax Settlement; controversy surrounding implementation of never-ending Melamchi Water Supply Project which have overran initial costs at every turn of the execution and have displayed abject mismanagement of large project work; scandal involving land acquisition at Lalita Niwas inside Prime minister of Nepal’s residential compound may adequately highlight the ebb and flow of corruption patterns at different levels of governance. Similarly, anomalies surrounding Nepal Airline Corporation’s violation of Public Procurement Act in purchasing and/or leasing aircrafts are widely reported in local media. It shows the government’s ineptness in managing state enterprises which only magnifies authorities’ zeal for abuse of power and display of government’s extravaganza of financial resources.
Foreign relations and regional conflicts : Nepal’s relationship with dominant powerful neighboring countries, like India and China, would remain a source of conflict, particularly in terms of trade and border disputes, despite successive governments repeatedly claiming, every now and again, that they are close friends. Political elites use this proclamation, more frequently than ever China and India, and according to political leadership’s personal interests and choosing. Without delving into the realities, context and facts of the issues, the population at large is being polarized against each other in shrouded theme of nationalism and sovereignty without consideration of larger interests of the common people. This is the utmost conflict of interest that dominates Nepal’s socio-political landscape. It has, thus, become a major roadblock in forging collaborative partnerships with the neighbors, and Nepal has miserably failed to become a vital connecting economic and socio-cultural bridge between the two major world powers. This does not require compromises over nationalism or sovereignty, as trumpeted and orchestrated, and promoting Nepal’s future development alignment and interests with the systems of those of its neighbors while maintaining strategic autonomy , and ensuring that Nepal could benefit over trade, education, tourism, transport, infrastructure, manufacturing, supply chain, information, technology, water resources, and other mutually beneficial joint efforts, including in climate adaption and mitigation, and avoid border tensions, for example.
Socio-economic issues : With high level of poverty, low wage and income, out-migration of productive work force for education, work, and future job opportunities overseas, falling agricultural production of basic food commodities, lack of skills development and productivity, absence of affordable quality healthcare, transport and, sustainable infrastructure development could lead to conflicts of interest within the different tiers of governance, socio-economic strata, and community due to competing interests and priorities over resources and funding.

Why is tiny nation Nepal being labelled most corrupt in South-Asia?

Political interference, financial mismanagement, and lack of accountability of the public funds by the decision makers in the governance system have contributed to the conflict of interest across all three branches of the governance. It is perceived by people that government officials and political leaderships have conflicting interests, such as personal gain or loyalty to certain groups or individuals, they may be more likely to engage in corrupt practices, such as bribery or nepotism. This situation would lead to policies and decisions that serve their own interests rather than the public good and/or in favor of the common people. This undermines public trust in government institutions which are under the dominance of political patronage, and they are unable to function autonomously for the public good, leading to morally unjust behavior, political instability, and unrest.

Addressing both the causes of conflict of interest and effects of corruption in governance is crucial for promoting transparency, accountability, and good governance and community welfare in a society. This requires robust combating measures like anti-graft and corrupt practices and red-tape laws , independent oversight and enforcement mechanisms, and transparency in decision-making process.

Several factors have contributed to the cancer of corruption in state bureaucracy in Nepal, major ones being political interference, inefficient bureaucracy, fiscal abuse, ineffective parliamentarians, and the subservient nature of bureaucrats. Political interference is common where politicians use their power to influence bureaucratic decisions or engage in patronage networks to advance their own interests. This is exemplified by the appointment of unqualified or corrupt officials, and the misuse of public resources for personal gain.

Inefficient and inept bureaucracy enhance state corruption, as bureaucratic processes become slow and less transparent appearing like it is a complex, and opaque to most people. This concomitantly creates opportunities for officials and intermediaries to demand bribes or engage in graft and other corrupt practices to expedite or manipulate decision-making processes.

The other major problem is the subservient nature of bureaucrats in Nepal is a contributing factor to state and political corruption. It may also be recognized that, in many cases, bureaucrats may not be the only one and independent actors but serve on the whim of political leaders or senior officials. This creates a culture of deference and obedience, where officials prioritize loyalty to their superiors over their duties to the public.

Civil Service cadre in Nepal is influential because of unionization on political party lines and network of patronage who frequently use bureaucratic appointments to create a culture of favoritism and political loyalty, rather than merit-based appointments and transfers as a tool to consolidate power and reward supporters. This is one of the major problems that has wreaked the civil service in Nepal and system of governance has become near dysfunctional and have failed delivery of public goods for common people.

The issue of corruption in the state governance requires adoption and implementation of combat measures to increase transparency, accountability, and professionalism to reduce political interference and simplicity in bureaucratic decision-making processes. However, it is also important to note that combating corruption is a long-term process that requires sustained effort and commitment from all stakeholders.

Measures to Combat Cancer Culture of Corruption:

To manage corruption, Nepal needs strong legislations, rules, and regulations, upon analyzing root causes of the conflict of interest and operating environment that fosters corruption. This could include effective anti-graft and corrupt practices and anti-red tape laws, promote transparency and accountability, and build public trust in government institutions. Below are some measures which would help check political, financial, and judicial corruption in Nepal:

Strengthening anti-graft and corrupt practices and re-tape laws and institutions with strong legal frameworks : Nepal needs a robust legal framework that criminalizes corruption and provides harsh penalties for those found guilty. The government must enforce these laws strictly and impartially. To do this, Nepal needs to have strong Anti-Graft and Corrupt Practices and the Anti-Red Tape Laws that would provide the backbone for the country’s fight against corruption. Our efforts should be focused on this just as democracy requires constant monitoring and reform. Laws should be applied across all segments of society and institutions to prevent and punish corruption without exceptions and to reduce conflict of interest. Effective execution and implementation of Anti-Graft and Corrupt Practices and Anti-Red-Tape Laws will require autonomous Anti-Corruption Commission (ACC) and the Commission for the Investigation of Abuse of Authority (CIAA) and strengthened to ensure their independence, impartiality, and effectiveness. Anti-corruption agencies should be provided with sufficient legal powers, resources, and authority to investigate and prosecute graft and corrupt practices which can go a long way in addressing this cancer in the governance. These agencies should start focusing their investigative attention to the big political fishes rather than running around only the lower ranks of the civil cadres. In parallel, the selection of senior appointees to run this institution is to be selected on the merits of individuals having impeccable exacting standards of relevant work experience and having non-political background. The selection process must also include open discussions on the candidates, and voting in public by a select committee, including members from civil society organizations.
Increasing transparency and accountability : Nepal needs to promote transparency and accountability in its governance processes, including public procurement, budgeting ( not only as a yearly event without open debate ), and accountable fiscal management. Transparency and accountability are key to fighting corruption. Nepal can increase transparency by making government processes, budgets, and transactions publicly available and accessible. The government should implement a system of performance auditing and measures to ensure that public officials are held accountable for their actions as well as for their inactions. For this purpose, laws should be enacted allowing freedom of information accelerating programs like citizen’s partnership in scrutiny of the government’s auditing program to promote inclusive governance and transparency, modelling from international best practices. This must precede with audit of “ Berouzu ” account (yearly sum of billions of rupees ) and performance auditing system in Nepal for financial accountability which does not exist yet.
Enhancing public awareness : Encouraging citizen participation in decision-making process and creating channels for feedback and grievance redress can help to prevent corruption. Educating the public about the harms of corruption and how to recognize them and report would be equally crucial. This can go a long way in preventing and fighting corruption. The government, civil society organizations, and the free media can play a key role in raising awareness and promoting a culture of zero-tolerance towards corruption and minimize conflict of interest.
Strengthening judicial independence : Judicial independence is critical to ensuring the rule of law and fighting corruption in any democracy. Selection of judges should be transparent, and on merit, and appointees must have impeccably exacting standards of relevant work experience and who are non-partisan and have no political affiliation whatsoever. The government should take measures to ensure that the judiciary is free and independent without political influence and pressure and can provide fair and impartial justice.
Strengthening bureaucracy : The bureaucracy can play a crucial role in combating corruption. It is essential to recognize that no single institution can stop it on its own. It requires a collaborative effort from all segments of society to create a corruption-free Nepal. The bureaucracy in Nepal needs to be strengthened with competent and well-trained staff who are adequately compensated financially, secured, and protected from political interference. The merit-based recruitment system would help reduce corruption in recruitment and promotion processes.
Creating a whistleblower protection mechanism : Raising awareness among working employees and civil society organizations about the impact of corruption on society and promoting civic education can help to build a culture of accountability and transparency. In these efforts, whistleblowers can play a vital role in exposing corruption. Nepal should create a mechanism to protect whistleblowers from retaliation and ensure their anonymity.
Implementing e-Governance: E-governance could help reduce corruption by increasing transparency, reducing human interaction, and improving efficiency. Nepal should invest in e-governance infrastructure to ensure that government processes are streamlined, and corruption is minimized. This should start with reforming the government procurement process and focus on quality, timely delivery, and sustainability rather than cost-effectiveness.
Strengthening political party finance regulations and electoral reform : Political parties are often the leading source of conflict of interest and causes corruption. Nepal should strengthen regulations around political party finance, intra-party consultation process, and electoral system reform to ensure that inclusive and transparency in their deliberations and management of party affairs, funding, finances, and abide by culture of ethics in democratic functioning of political party.

Implications:

Conflict of interest in parliamentary system of governance and uncertain future.

The parliamentary system of governance has failed deliveries on people’s expectations of sustainable economic development due to overwhelming conflict of interest in the system of governance. Governance operating modules and instruments appear to have been favorable to elected officials catering vested personal interests for power, authority of the position motivated by financial gains in policies or decisions being made by the government. This has created a situation where the officials prioritize their own interests over those of the constituency and the nation they are elected to represent. There have been several instances of conflict of interests among parliamentarians and decision makers in the executive, bureaucracy, and judiciary. Long term implications of such dismal performance of the governance system in this tiny republic are hard to predict except to say that there will be long-term adverse fall outs and compromises in common people’s aspiration to prosperity and wellness. Undoubtedly, this nation is actively transforming itself to become a failed state of the 21 st century, instead of graduating to the club of middle-income countries as a sustainable economy in coming years as predicted by the successive governments.

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This article originally appeared on Transcend Media Service (TMS) on 1 May 2023.

Anticopyright : Editorials and articles originated on TMS may be freely reprinted, disseminated, translated and used as background material, provided an acknowledgement and link to the source, TMS: Realities in Conflict of Interest and Corruption Challenges in South Asia: The Case of Nepal , is included. Thank you.

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NEPAL: Corruption in Nepal – Curse or Crime?

An article by Om Prakash Sen Thakuri published by the Asian Human Rights Commission

“Ghus linya ra dinya dubai deshka thula satruhun” “Both bribe takers and givers are the worst enemies of the nation”. King Prithivi Narayan Shah

This stringent attitude towards corruption was expressed by late King Prithivi Narayan Shah, founder of new Nepal 250 years ago. The following generations did not learn from him. Although Nepal has modernized and became a Republic in 2008, corruption has become a widespread phenomenon. Government promises to established good governance, rule of law, development, peace and prosperity have gone unheeded. The subsequent governments have announced a ‘zero tolerance’ policy on corruption but have brought no substantial changes.

The annual report of Transparency International (TI) on the perception of corruption index has listed Nepal 154 th out of the 183 countries around the world it has assessed. Nepal was ranked 121 st in 2008, and is the lowest placed South Asian country after Afghanistan. Nepal scored only 2.2 out of 10 where below 3.0 is considered a high percentage of corruption. Earlier this month, the Prime Minister shamelessly admitted that corruption is rampant in Nepal. The Auditor General’s Annual Report for 2011 brought to light the extent to which money laundering takes place in the government sector. According to the report, from the total amount of Rs 29,91,4,000,000 collected from the tax some 1,26,95,00,000 (Approximately US$ 15, 868,750) was not deposited in the state coffer during the last fiscal year 2010/11 .

The frustration with the failure of the state and the legal mechanism in place to curb corruption is deeply rooted in the people. On many occasions I have heard people express their frustrations by saying that “this land is cursed by a chaste widow, so nothing good can happen here” . Nepalese people believe that the widow of Bimsen Thapa cursed Nepal. Bhimsen Thapa was a great reformer of Nepal, who committed suicide after falling prey to a political conspiracy. He cut his throat with a piece of glass in jail when he heard that his wife was being paraded naked around Kathmandu city.

Historical events lend support to this superstition, because Thapa’s demise was followed by the 104 year-long rule of the Rana Oligarchy (1846-1953). Rana rulers infamously used the state coffer as pocket money and kept the people in the darkness of illiteracy, poverty and religious dogmas. During the reign of Rana the gap between the elite and the poor expanded and a number of communities were marginalized. In those times, corruption was hidden from the public. At present, corruption cases are brought to the attention of the public through exposure in the media. In present day Nepal, people are frustrated, because the impunity which protects the corrupt is apparent.

Corruption is a criminal offence in Nepal, but Nepalese are forced to bribe government officers if they want to receive official services. Corruption and bribery are crimes committed by high profile officers and powerful political leaders and it’s difficult to raise one’s voice against them. Corruption happens at all levels of government – from the smallest units such as the local Village Development Committees all the way to the top Ministries in Kathmandu.

Recently, Commission for Investigation of Authority (CIAA) has said that dozens of corruption complaints are lodged against the five sitting ministers including Deputy Prime Minister and Minister for Home Affairs Bijaya Kumar Gachhadar on charge of amassing money and property in transferring high profile officers in plumy posts. Health Minister Rajendra Mahato, Physical Planning and Works Minister Hrydesh Tripathi, Irrigation Minister Mahendra Yadav and Forest Minister Wakil Musalman are among the others against whom the complaints are filed.

What took place on February the 29 th in 2011 is only one example among many. On this day, the personal assistant to the Forest State Minister was caught red handed taking bribes from the poor people of Mugu, a remote district in Nepal. Later the police seized a recorded phone call made by the Forest State Minister himself where he was directly demanding a bribe from Mugu people . Another case of corruption took place a few months back in the village of Sitapur Village Development Committee (VDC) in Siraha district. Here the villagers staged a hunger strike to denounce the corruption committed by the VDC Secretary. Despite their hunger strike and written complaint, the Chief District Office and Local Development Officer were unwilling to investigate the case and did not take action against the guilty. Instead he was merely transferred to another VDC. More than 160 high profile corruption cases are pending before the Supreme Court. Summarizing each individual case would fill up volumes of books.

However, a few high profile corruption cases which have made the headlines within the last few weeks should be mentioned here. On March 2 nd 2012, a newspaper published the news that the Minister for Agriculture and Cooperatives Nanda Kumar Dutta was involved in the illegal export of betel nut to India of the estimated value of 900 million rupees 1 . A few days later, Under Secretary at the Foreign Employment Promotion Board Murari Nepal was arrested on the charges of embezzling NRs 40 (US$ 50,000)while he was serving as a Local Development Officer in Bara district 2 .

The Sudan scam is another black smear on the face of Nepal where a number of high profile police officers, including the Inspector General of the Police, were convicted and sent to jail on charges of corruption amounting to almost NRs. 290 million (US$ 36million). The corruption happened in connection to a procurement of Armed Personnel Carriers and logistics for the personnel deputed for the peacekeeping mission under the United Nations flag in Darfur, Sudan 3 . However, the Commission for the Investigation of Abuse of Authority (CIAA) did not file case against the then Home Ministers Bhim Rawal, Bam Dev Gautam and Krishna Prasad Sitaula and the then Home Secretaries Govinda Kusum and Umesh Mainali, despite the parliamentary committee’s recommendation and huge public pressure. The investigating committee reported that they had been threatened , while investigating the case but did not disclose who had threatened them. It is still not clear to the committee and the Nepalese public why the then Home Ministers and Secretaries have not been prosecuted.

Politicization of Crime

When politicians are held accountable they protest and claim that they are being targeted for their politics. The corruption case against a former minister serves as an illustration. Recently, the CIAA caught a big shark in its net. In 2002 the CIAA filed a corruption case against the incumbent (now former) Minister for Information and Communication Jaya Prakash Prasad Gupta. In a controversial verdict passed in 2007 the Special Court acquitted him citing “insufficient evidence”. The CIAA appealed to the Supreme Court.

Overturning the verdict of the Special Court, the Supreme Court on the 21st of February 2012 found Gupta guilty of having “accumulated money and property from unknown sources while holding public offices in different capacities since 1992”. The Supreme Court ordered him to be fined NRs. 8.4 million (US$ 100500) and to be sent to jail for 18 months.

After the verdict Mr. Gupta tried to ascribe his crime to political circumstances. He stated that: “This is not punishment for me but for the movement that I have launched” referring to the political nature of the Madhesi movement . He further said that “I have been penalized for what I did in the past and what I have been doing now is for the Madhesi people and to forward the Madhesi cause”. Gupta claimed that he was being sentenced for his political activities and not for the crimes he committed.

Gupta’s party has decided that Gupta will remain the Chairperson even after his conviction. The party supported Gupta in his claim that the sentence was politically biased. They argued that the sentence was “biased and ill-intended” and that the verdict should be “corrected”.

General Secretary of Gupta’s party MPRF-R Atmaram Sah commented that “The apex court’s anti-Madhes sentiment reflects since the verdict on the oath of the Vice-President, voters’ registration, integration of Madhesi youths in the national army, citizenship and postal road to Gupta´s case”. Such comments, made by a national political leader, provoke racial hatred among the communities of Nepal. There were also reports of Gupta’s henchmen chanting against the verdict and in support of the corrupt Gupta. Such demagogic tactics are dangerous, because they appeal to the emotions of the people and pressurize the government. Criticizing and chanting against a court decision in public comprises contempt of court . Such acts should be prosecuted in order to discourage such acts in the future.

The accusations that Gupta levelled at the Supreme Court were mirrored in an earlier case from 2011.In this case the Supreme Court fined the ex-minister Chiranjivi Wagle with NRs 20.3 million and an 18 months jail sentence. After the sentence was passed he termed the verdict unconstitutional and said that “I will not take up arms or leave the country, but tolerate the injustice and fight a legal battle to defend myself”. He also indirectly indicated that the Apex Court’s verdict was unjust and he was being wrongfully incarcerated. Talking to media Wagle’s daughter claimed that the action against her father was “unjustified as everybody in power has amassed wealth”. Her logic is a perfect example of the general thinking of the Nepalese people.

So far Chiranjivi Wagle is the only big shark that has been caught in the CIAA’s net after the political changes of the 1990s. The net of CIAA is truly magical in that it only catches small fish, while the bigger fish easily make their escape.

Ineffective Measures against Money Laundering To fight corruption, Nepal has passed several anti-corruption laws like the Corruption Prevention Act2002, the Commission for the Investigation of Abuse of Authority Act 1991, the Good Governance Act 2007, Civil Service Act 1993, Impeachment Act, 2002 (IA), Military Act, 2003 (MA), Judicial Council Act, 1991 (JCA), Money Laundering Control Act, 2007 (MLCA) and the Interim Constitution of Nepal 2007. Likewise, Nepal has ratified the United Nations Convention Against Corruption (UNCAC) in March 2011.

With the aim of curbing corruption Nepal gave constitutional status to the CIAA. In total, there are 12 state level anti-corruption agencies to prevent, investigate and prosecute corruption cases 4 . Among them the CIAA is the main institution with the power to investigate and prosecute corruption cases.

But under Article 120 (1) of the Interim Constitution of Nepal from 2007 the CIAA cannot investigate the Constitutional Officials and military officers. Constitutional Officials can only be removed if two third of the parliamentary/Constitutional Assembly members pass the motion of impeachment and the military officers can be investigated and prosecuted only by three member committee headed by the Deputy Attorney General and the other member being officers from Defence Ministry and Legal Department of Nepal Army. Furthermore, the CIAA can only prosecute the person in question after retirement or removal from the post. As already mentioned most of the high profile corruption is committed by ministers and high profile government officers, therefore the CIAA has to wait until their removal by impeachment or retirement. This provision has bound the hands of the CIAA and they are unable to prevent, investigate and prosecute corruption cases against constitutional officers, judges, military officers and other high profile officers as long as they are in office. But delayed action on recommendations to pass impeachment has hindered the justice system. For example, Justice Ran Bahadur Bam who is facing corruption charges was recommended by the Constitutional Assembly Chairman in August 2010 to pass impeachment against him but his case is still pending before the CA.

Several cases of corruption and bribery go unreported. A research paper on “ Criminal Justice Response to Corruption in Nepal ” states that “The success rate of the corruption cases is quite low and 60 percent of the corrupt activities are out of the scope of the law and among the cases registered in the courts, around 60 percent result in conviction. In the absence of physical presence of CIAA in the local level and no sensitization on people, the common people generally do not know where to report the bribery cases” (Parajuli, 2008).

The government of Nepal seemingly averted international obligations and national pressure by establishing a Special Court and a powerless CIAA. Due to several legal loopholes, political pressures and government’s indifference the anti-graft bodies have failed at holding the rampant corruption in check.

Special Court in Controversy Nepal established the Special Court in 2009 under Section 101 (2) and Section 3 of Special Court Act-2059 to hear corruption cases filed by the CIAA under State Cases (Crime and Punishment) Act 2046 relating to the cases to be prosecuted by the government of Nepal and for the cases to be defended by the government of Nepal, and the Money Laundering Control Act – 2064 (2007) 5 .

But immediately after its establishment, the Special Court came under fire. The Special Court acquitted a string of high profile political leaders, government officers and high profile police officers. The cases filed by the CIAA before the Special Court did not lead to any punishment and the public reacted with outrage. The Special Court gave clean chit to many high profile politicians, including Gupta, ex-ministers Khum Bahdur Khadka, Govinda Raj Joshi and police chiefs on purely technical grounds which led people to suspect foul play on behalf of the Court. A source close to Chief Justice Bhupdhoj Adhikar states that “He used to influence the then chief justices and gave clean chits to corrupt politicians, chiefs of the security forces and bureaucrats on technical grounds”.

In the case against Gupta the Supreme Court gave orders to take action against the three Special Court Judges who acquitted Gupta in 2007. However, this court order is yet to be implemented. In a similar case from 2010 where the Supreme Court ordered that action should be taken against a group of judges who committed a “grave mistake” while handling a corruption case against the former Defence Secretary Chakra Bandhu Aryal, the judges are still in limbo .

It is worrying that the judges entrusted with passing verdicts against corrupt officials are themselves facing inquiries by the Judicial Council on the Supreme Court’s order. Overall, there are more than 200 complaints against 60 judges and in most of the complaints the judges are accused of indulging in financial irregularities. The list includes the names of the Chief Justices of the Appellate Court judges.

Government Unwillingness The unwillingness of the government to enforce the decisions made by the courts has fostered impunity and encouraged criminal activity. The Nepalese people have lost all faith in the law and do not believe that justice will be carried out. The courts’ verdicts are not implemented and this leads to impunity. Data collected from courts across the country show that 100,000 court verdicts have not been implemented and the Chief of Judgment Execution Directorate (JED) has stated that “The exact number of convicts enjoying impunity could be more than 300,000 as most of the verdicts have more than three convicts”.

At present, Nepal has got the largest Constituent Assembly of 601 members and the biggest cabinet of ministers of 49 ministers in its history. Among the people in power many are involved in corruption, bribery, misuse of authority, smuggling and other illegal activities. When the majority of ministers and lawmakers are involved in corruption and bribery and there is no anti-corruption body which can investigate and prosecute them, how can they be held accountable?

The CIAA has no authority to prosecute and cannot take prompt action against corrupt ministers and constitutional officers. The government is in on the game and is easily corrupted. In Nepal it is common that a corrupt minister will donate a percentage of the profits from corruption to the party in order to cover party and election expenditure. The leaders of the parties are thereby protected from criticism from their own support base.

Even worse, the government has not appointed a Chief of the CIAA in the last five years. In the absence of its head the CIAA cannot function swiftly and effectively. The CIAA must be given special powers, enough manpower, sufficient funds and modern equipment in order to check the rampant corruption in Nepal. The CIAA should also ensure that the complaints made by the public are heard on time. Ideally, the CIAA should also ensure easy access to anti-corruption agencies by erecting hoardings with information on what legal actions one can take in order to curb corruption. It should establish a hotline, erect complaint boxes and let the public know which actions are being taken against the corrupt officers at the local level. Furthermore, as no one is to be trusted with regards to corruption, a small special unit should be granted the authority to monitor the CIAA.

Lack of government action on dealing with corruption and money-laundering is damaging the reputation of Nepal in international forums. Just recently, the Financial Action Task Force (FATF), an inter-governmental body combating money laundering and the financing of terrorism, threatened to put Nepal on its black list if it did not endorse bills on Anti-Money Laundering and Combating and Financing of Terrorism. Fearing the consequences of being black listed by the international financial market Nepal ratified the UN International Convention for the Suppression of the Financing of Terrorism and the UN International Convention against Transnational Organized Crime. But Nepal failed at passing three separate bills; Bill on Controlling Organised Crime, Bill on Extradition and Bill on Mutual Legal Assistance. At a FATF meeting in Paris Nepal was given a two months deadline to endorse these bills. But a hardliner faction in the ruling party UCPN-M is in opposition and term the bills “anti-national”.

So far the City Bank and Washington Bank have suspended their relations with Nepal by requesting that the Nepali Embassy moves its account to another bank. Though the actual cause behind this move has not been disclosed, experts take it as the result of Nepal’s inability to comply with FATF recommendations. If Nepal continues on this path the result will be that Nepal loses its status as a FATF member state. This will have serious consequences for Nepal and will hamper its ability to conduct international financial transactions, business and other international financial services.

A survey conducted by the Central Department of Public Administration at Tribhuvan University in Nepal found that the parliament, the political parties, the central government, CIAA and the police insitutions enjoyed a low level of trust. 83.2% of the participants in the survey thought that corruption in Nepal was caused by the lack of political commitment.

What’s next? A weak CIAA cannot control the raging corruption in Nepal. Only if the government institutions and the general public take action can Nepal be rid of corruption and bribery. Especially the Election Commission should take on a more active role and punish corrupt political leaders by not nominating them for election. It should also lobby for the passing of a strict code of conduct where people nominated for the parliamentary election have to meet certain standards and be of good reputation. In the past it has committed the serious mistake of accepting nominations of political leaders who were on trial on charges of corruption. It should also ensure a strict implementation of the election law in order to control the election expenditure of the political parties.

A weak governance system, the absence of the rule of law, respect to human rights, the inaction of the anti-graft agencies and political apathy are some of the major causes of corruption in Nepal. Nepal can only prosper if it rids itself of the scourge of corruption, bribery, nepotism, favouritism and foul political power games. Only then can we hope for a Nepal where development, rule of law, respect of human rights, peace and prosperity is the order of the day. Corruption is an invisible plague that is haunting Nepal. Every year Nepal receives millions of dollars in foreign aid, but only a small percentage of the money reach the people in need. The corruption that takes place at all levels of Nepali society has led to inefficiency, injustice and inequality.

It is important that Nepalese people know that no curse was cast on Nepal, but if they do not fight corruption, surely Nepal will be cursed. The public needs to take action against corruption. Common people need to file complaints against corrupt officials and if the authorities fail to act promptly, then one must go to the media and the civil society for support. What is needed in Nepal is a mass movement against corruption.

Article 27 of the Interim Constitution of Nepal, 2007 guarantees people the right to information. People should make sure that the government and its institutions respect this right and conduct their economic affairs in a transparent and responsible manner. Establishing a right to information help desk, an anti-corruption help desk and hotlines could become powerful tools supporting people in their fight against corruption. The passing of a strong anti-money laundering law and ensuring pro-active anti-graft bodies will help solve the problem of corruption. A Nepal free from corruption is not a distant dream, but an actual possibility if people continue to fight corruption courageously.

References:

1.According to Siddharthanagar Chamber of Commerce and Industry (SCCI), it received an order from the Ministry of Agriculture and Cooperatives (MoAC) to issue a certificate of origin (CoO) for 3,000 tons of betel nut of unspecified origin and owned by the trading firm Excel Trading Concern. 2. CIAA found that the former LDO was involved in doling out money to local politicians and consumers groups without following government guidelines and embezzled development budget and budget for Parliamentarians’ Development Fund. 3. Ex-IGPs Om BikramRana, Hem BahadurGurung and Ramesh Chanda Thakur were sentenced a 2 year jail term each and fined Rs 170.6 million, Rs 64.8 million and Rs 40 million respectively. 4.After his seizure of power on the 2nd February 2005, the King Gyanendra established The Royal Commission for Corruption Control (RCCC) which arrested many political leaders on charges of corruption. Yet on the 13rd February 2006 the Supreme Court found it unconstitutional and it was scrapped immediately. 5.The report by Asia/pacific Group on Money Laundering has done a research on judiciary system and efforts to curb the crime of money laundering. Please visit: http://www.nrb.org.np/fiu/pdffiles/Mutual_Evaluation_Report_of_Nepal,_2011_20680821.pdf

The views shared in this article do not necessarily reflect those of the AHRC, and the AHRC takes no responsibility for them.

About the Author : The author has been working as a human rights activist in Nepal for the last 4 years and has closely followed the developments in the political situation of the country. The author can be reached at [email protected].

Document ID	:AHRC-ETC-011-2012
Countries	: Nepal
Date	: 22-03-2012

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Corruption on the rise in Nepal: Transparency International

According to Transparency International’s Global Corruption Perceptions Index, Nepal sunk to the 117th position with 33 points, according to the Corruption Perception Index 2020 released by the organization on Wednesday.

Earlier, Nepal ranked 113th with 34 points in the 2019 report.

The report that covers 180 countries, expressed concern that only very minimal steps were being taken to curb corruption around the world. Similarly, Nepal has been shown to be in the category of corrupt countries.

It is said that the index is prepared by averaging the scores obtained on the basis of research done on six criteria including politics, access to justice and financial discipline.

Mukunda Bahadur Pradhan, General Secretary of Transparency International Nepal, said, “What Nepal has achieved so far shows that there has been no improvement in Nepal at present. The government and the people must be responsible for reducing corruption. We are still in a very precarious position.”

Transparency International ranks countries with less than 40 points as the most corrupt.

In the CPE 2020, 50 countries have scored less than 50 points and this year’s average score is 43.

According to the survey conducted by six organizations including the World Bank, World Economic Forum, Global Insight, Bertelsmann Foundation, World Justice Project and VDES, Nepal ranks 117th out of 100 points in CPI 2020.

According to the survey of six organizations in Nepal, the reasons behind this are the government’s insufficient anti-corruption efforts, abuse of power in the public sector, lack of action against public officials, bribery in business, and lack of access to information.

According to the report, Denmark and New Zealand are the least corrupt countries. They have scored 88 points.

South Sudan and Somalia are the most corrupt, with 9 points.

In South Asia, Bhutan has the lowest levels of corruption, followed by Afghanistan.

Bhutan is ranked 24th among the South Asian countries in the 2020 index with 67 points.

India is ranked 86th, Sri Lanka 38th and Maldives 43rd. Pakistan is ranked 124th while Bangladesh is ranked 146th. Afghanistan has a total of 19 points and is ranked 147th out of 183 countries.

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# Corruption Perceptions Index

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Essay on Corruption for Students and Children

500+ words essay on corruption.

Essay on Corruption – Corruption refers to a form of criminal activity or dishonesty. It refers to an evil act by an individual or a group. Most noteworthy, this act compromises the rights and privileges of others. Furthermore, Corruption primarily includes activities like bribery or embezzlement. However, Corruption can take place in many ways. Most probably, people in positions of authority are susceptible to Corruption. Corruption certainly reflects greedy and selfish behavior.

Methods of Corruption

First of all, Bribery is the most common method of Corruption. Bribery involves the improper use of favours and gifts in exchange for personal gain. Furthermore, the types of favours are diverse. Above all, the favours include money, gifts, company shares, sexual favours, employment , entertainment, and political benefits. Also, personal gain can be – giving preferential treatment and overlooking crime.

Embezzlement refers to the act of withholding assets for the purpose of theft. Furthermore, it takes place by one or more individuals who were entrusted with these assets. Above all, embezzlement is a type of financial fraud.

The graft is a global form of Corruption. Most noteworthy, it refers to the illegal use of a politician’s authority for personal gain. Furthermore, a popular way for the graft is misdirecting public funds for the benefit of politicians .

Extortion is another major method of Corruption. It means to obtain property, money or services illegally. Above all, this obtainment takes place by coercing individuals or organizations. Hence, Extortion is quite similar to blackmail.

Favouritism and nepotism is quite an old form of Corruption still in usage. This refers to a person favouring one’s own relatives and friends to jobs. This is certainly a very unfair practice. This is because many deserving candidates fail to get jobs.

Abuse of discretion is another method of Corruption. Here, a person misuses one’s power and authority. An example can be a judge unjustly dismissing a criminal’s case.

Finally, influence peddling is the last method here. This refers to illegally using one’s influence with the government or other authorized individuals. Furthermore, it takes place in order to obtain preferential treatment or favour.

Get the huge list of more than 500 Essay Topics and Ideas

Ways of Stopping Corruption

One important way of preventing Corruption is to give a better salary in a government job. Many government employees receive pretty low salaries. Therefore, they resort to bribery to meet their expenses. So, government employees should receive higher salaries. Consequently, high salaries would reduce their motivation and resolve to engage in bribery.

Tough laws are very important for stopping Corruption. Above all, strict punishments need to be meted out to guilty individuals. Furthermore, there should be an efficient and quick implementation of strict laws.

Applying cameras in workplaces is an excellent way to prevent corruption. Above all, many individuals would refrain from indulging in Corruption due to fear of being caught. Furthermore, these individuals would have otherwise engaged in Corruption.

The government must make sure to keep inflation low. Due to the rise in prices, many people feel their incomes to be too low. Consequently, this increases Corruption among the masses. Businessmen raise prices to sell their stock of goods at higher prices. Furthermore, the politician supports them due to the benefits they receive.

To sum it up, Corruption is a great evil of society. This evil should be quickly eliminated from society. Corruption is the poison that has penetrated the minds of many individuals these days. Hopefully, with consistent political and social efforts, we can get rid of Corruption.

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22 Apr 2023 - Introductory Background and Context - According to the 2021 Corruption Perceptions Index by Transparency International, Nepal is one of the most corrupt in South-Asia and it ranks one of the top fifteen most corrupt in all of Asia. Corruption is a well-documented issue in Nepal, and several government institutions and individuals have been implicated in corrupt practices. ...
NEPAL: Corruption in Nepal
Nepal was ranked 121 st in 2008, and is the lowest placed South Asian country after Afghanistan. Nepal scored only 2.2 out of 10 where below 3.0 is considered a high percentage of corruption. Earlier this month, the Prime Minister shamelessly admitted that corruption is rampant in Nepal. The Auditor General's Annual Report for 2011 brought to ...
PDF Corruption and Underdevelopment in Nepal: A Content Analysis
corruption is a major factor for underdevelopment of Nepal. Dahal et al. (2000) have argued that rampant corruption played an important role in the underdevelopment of
How to Control Corruption in Nepal
How to control corruption in Nepal | Nepali Popular SpeechShare,Support, Subscribe 🙏Facebook: https://www.facebook.com/singh.aadarsh.1Instagram:https://www....
Corruption on the rise in Nepal: Transparency International
January 28, 2021. According to Transparency International's Global Corruption Perceptions Index, Nepal sunk to the 117th position with 33 points, according to the Corruption Perception Index 2020 released by the organization on Wednesday. Earlier, Nepal ranked 113th with 34 points in the 2019 report. The report that covers 180 countries ...
Essay on Corruption for Students and Children
Essay on Corruption - Corruption refers to a form of criminal activity or dishonesty. It refers to an evil act by an individual or a group. Most noteworthy, this act compromises the rights and privileges of others. Furthermore, Corruption primarily includes activities like bribery or embezzlement. However, Corruption can take place in many ways.