NEPAL: Corruption in Nepal – Curse or Crime?

| by Om Prakash Sen Thakuri

"Both bribe takers and givers are the worst enemies of the nation".

- King Prithivi Narayan Shah

(March 28, 2012, Hong Kong, Sri Lanka Guardian) 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^nd2012, 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 rupees¹ . 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, Sudan³. 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 cases⁴ . 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
 

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 opsenthakuri@gmail.com.