Submit your Article

In a rapidly changing and interconnected world, due diligence has become a vital framework for promoting accountability, managing risks and ensuring ethical practices. Whether addressing workplace safety, cybersecurity, corporate governance or human rights abuses in supply chains, due diligence embodies a commitment to responsible action. However, its effectiveness often depends on the clarity of legal frameworks, the strength of enforcement mechanisms and the willingness of organizations to prioritize transparency. This article explores the importance of due diligence in various sectors, drawing from global principles and highlighting its significance for Nepal.

Workplace safety

Workplace safety is a foundational aspect of due diligence, as demonstrated by a tragic incident in Greater Sudbury, Canada, in 2015. The City of Greater Sudbury delegated construction responsibilities to Interpaving Limited but faced legal scrutiny under the Ontario Occupational Health and Safety Act (OHSA). The courts assessed whether the city exercised due diligence through adequate control, delegation, compliance checks and monitoring.

The Ontario Superior Court ultimately ruled in favor of the city, emphasizing its proactive measures such as vetting contractors, ensuring safety certifications and conducting inspections. This case underscores the importance of clear legal frameworks and robust oversight in managing workplace risks.

For Nepal, these lessons resonate deeply. Many road construction projects in Nepal remain unfinished, leading to immense public frustration and, at times, fatalities. In Kathmandu and other cities, roads are frequently left in disrepair due to poor coordination among agencies. Roads may be dug up repeatedly for different purposes—water pipelines, electricity cables or telecommunications—without any alignment of timelines or objectives. Even national pride projects suffer from significant delays and cost overruns due to weak enforcement of accountability. Strengthening project oversight, enhancing inter-agency coordination, and establishing clear accountability mechanisms are essential to improve infrastructure development in Nepal.

Addressing vulnerabilities

The rise of digitization has made cybersecurity a critical area where due diligence is often lacking. High-profile cases such as British Airways and Marriott Hotels highlight the consequences of failing to secure sensitive data. British Airways faced a £183m fine under GDPR after a cyberattack exposed customer information, while Marriott incurred £100m in penalties for not identifying vulnerabilities in an acquired system.

For Nepal, the challenges are equally pressing. The country began its digital journey with the adoption of computers in 1971 and the internet in 1998. Article 51(g) of Nepal’s Constitution emphasizes the importance of IT for national development. However, recent cyberattacks have revealed vulnerabilities in Nepal’s digital infrastructure. A 2023 cyber attack disabled 1,500 government websites, disrupting public services and international flights. Earlier breaches exposed sensitive police data and halted passport application services for thousands of citizens.

Nepal’s Electronic Transactions Act, 2006, provides a legal framework for addressing cybercrime, but enforcement is hindered by limited resources and expertise. Strengthening digital infrastructure, fostering international cooperation, and enacting comprehensive due diligence laws specific to cybersecurity are critical for safeguarding Nepal’s digital future.

Combating modern slavery

Modern slavery is an uncomfortable reality embedded in global supply chains. According to the International Labour Organization, nearly 50m people worldwide are victims of modern slavery, including forced labor and forced marriages. Of these, 17.3m work under coercion in private businesses, with nearly 4m subjected to state-imposed labor. Alarmingly, more than 3.3m victims are children.

Global frameworks such as the UN Guiding Principles on Business and Human Rights, the French Duty of Vigilance Law, and the EU’s Corporate Sustainability Due Diligence Directive require companies to identify, prevent and address human rights abuses in their operations and supply chains. These laws emphasize transparency, stakeholder engagement and regular reporting as pillars of effective due diligence.

For Nepal, where informal labor is widespread, addressing modern slavery requires strong labor laws, ethical trade agreements and public awareness campaigns. Businesses must adopt rigorous supply chain audits and ethical sourcing practices. Raising consumer awareness about ethical consumption can also play a significant role in combating modern slavery.

Corporate governance

The BarChris Construction case of the 1960s remains a landmark example of due diligence failures in corporate governance. BarChris misrepresented its financial health during a securities registration, leading to investor losses and exposing systemic lapses. Inside directors knowingly falsified data, outside directors failed to verify claims, underwriters conducted cursory reviews and accountants overlooked discrepancies.

The court’s findings highlighted the need for adversarial due diligence, requiring all stakeholders to independently verify information and challenge assumptions. These lessons are highly relevant to Nepal where governance structures in many sectors remain underdeveloped. Strengthening regulatory bodies, promoting professional training, and incentivizing compliance through tax benefits or penalties can improve governance and enhance investor confidence.

Global and local

The importance of due diligence is enshrined in several international frameworks. The UN Guiding Principles on Business and Human Rights provide a global standard for preventing and addressing human rights abuses linked to business activity. The French Duty of Vigilance Law mandates large companies to develop vigilance plans to address risks in their supply chains, including environmental and social impacts. Similarly, the EU’s Corporate Sustainability Due Diligence Directive aims to make human rights and environmental due diligence mandatory for companies operating within the EU.

For Nepal, aligning with these global standards can enhance its economic competitiveness and ensure ethical practices across industries. Legal reforms that incorporate international best practices, combined with local capacity-building initiatives, can create a robust framework for accountability.

Themes and challenges

Across sectors, due diligence emerges as a universal principle requiring proactive engagement, comprehensive documentation, and independent verification. However, systemic challenges—from resource disparities to fragmented enforcement—often hinder its application. In Nepal, these challenges are particularly evident in infrastructure development, digital security, labor practices, and corporate governance.

Addressing these issues requires a multifaceted approach. Legal reforms must clarify accountability standards, while public-private partnerships can facilitate resource sharing and innovation. Capacity-building initiatives such as training programs for professionals and support for small businesses can empower organizations to meet due diligence requirements effectively.

A sustainable future

The transformative power of due diligence lies in its ability to create a culture of accountability and transparency. Negligence not only invites legal and financial repercussions but also erodes trust—a vital asset in any society or economy. For Nepal, embracing due diligence as a core principle can drive sustainable growth, resilience and global integration.

Whether ensuring the timely completion of roads and bridges, safeguarding sensitive data, eradicating modern slavery or promoting ethical corporate practices, due diligence offers a pathway to a more secure and equitable future. By aligning local practices with global standards and fostering collaboration among stakeholders, Nepal can harness the full potential of due diligence to build a prosperous and inclusive society.

A passenger jeep met with an accident at Jakhauli in Hariharpur Gadhi Rural Municipality-2 of  Sindhuli on Jan 5. The accident resulted in the death of 20-year-old local resident, Kailash Rai, who succumbed to his injuries while undergoing treatment at Chure Hill Hospital in Hetauda. Two other injured passengers are currently receiving treatment.

In another incident, a scooter rider lost his life in a road accident in Sanothimi in Madhyapur Thimi Municipality-2 of Bhaktapur on December 30. Nischal Prakash Rajbhandari (31) of Sanothimi died while undergoing treatment at Norvic Hospital. The accident occurred when Nischal’s scooter skidded while trying to avoid a stray dog on the road. His wife Puja Shrestha (28), who was riding pillion, is currently under treatment.

Two years ago, Madhu Nepal from Palpa suffered severe injuries at Shankar Nagar of Butwal when his motorcycle collided with a pickup van coming from the opposite direction. Nepal, who had just returned after spending 10 years in Korea, was airlifted to Medicity Hospital in Bhaisepati for treatment. Despite spending over Rs 2.8m on multiple surgeries for his head injury, his life has never been the same. “Nothing is like before,” Nepal said. “The impact of accidents is devastating.”

Rising accident rates have claimed lives of people from all age groups, from young children to the elderly. The trauma and pain inflicted on families of accident victims are devastating. Those who survive with serious injuries often face a lifetime of hardship. Many are forced to live with disabilities caused by these accidents.

According to Nepal Police, 1,030 people have lost their lives in road accidents across the country in the first four months of 2024/25. A total of 13,442 road accidents were recorded during the period, resulting in 2,620 serious injuries and approximately 13,000 minor injuries. On average, 63 vehicle accidents occur daily, with 88 people getting injured and 7-10 losing their lives.

Nepal recorded 35,404 road accidents in 2023/24, resulting in 2,369 deaths and 6,160 serious injuries. Similarly, in 2022/23, 29,379 road accidents resulted in 2,883 deaths and 7,282 serious injuries. A total of 6,282 people died in road accidents over the past 28 months, averaging 225 deaths per month.

According to Kathmandu Valley Traffic Office, an average of four deaths occur in the valley every day. In the first five months of 2024/25, the valley witnessed 2,045 vehicle accidents, resulting in 75 deaths, 100 serious injuries and 2,758 minor injuries. Among the deceased, the majority were above 36 years old (41 people), followed by those between 17-35 years (30 people) and under 16 years(four deaths).

DSP Dipak Giri from the Kathmandu Valley Traffic Office told ApEx that most accidents occur during daylight hours. Two-wheelers are most frequently involved in accidents, followed by jeeps, cars, vans, buses, and microbuses, he added.

According to traffic police, overconfidence of drivers is an important factor behind rising numbers of road accidents. High speed, driving under influence, mechanical failures of motor vehicles, overtaking and negligence of pedestrians are the other reasons behind rising cases of road accidents. 

Between 200 to 300 people face penalties for drunk driving and speeding every day, police records show.

“Whether it is the families of those who died in accidents or those who were seriously injured, they face immense hardships. Accidents would naturally decrease if drivers remained vigilant while operating vehicles on the road,” DSP Giri said. “Pedestrians must also stay alert while walking on the roads. For those riding pillion on motorcycles or scooters, wearing helmets can reduce the impact even if an accident occurs.”

According to Nepal Police Spokesperson Bishwa Adhikari, the accident rates are rising in line with increasing vehicle imports and usage. “This trend is not unique to Nepal but is global, corresponding with increasing urbanization,” he said. “Nepal’s diverse geography presents unique challenges. Mountain roads are narrow and inherently risky, while Terai roads often run through settlements where high speeds lead to accidents.” Adhikari added that factors such as weather conditions, road construction quality and vehicle mechanical issues also contribute to accidents.

“There are numerous causes including drunk driving, speeding, and carelessness. The key factor in reducing accidents is the driver themselves,” Adhikari said. “If every person becomes a responsible driver, such incidents would decrease significantly.”

This week, Nepal’s two major communist parties—CPN-UML and CPN (Maoist Center)—held their long-overdue Central Committee (CC) meetings. Both Prime Minister KP Sharma Oli of the UML and Pushpa Kamal Dahal of the Maoist Center share a common trait: they dominate their respective parties, using CC meetings as a formality to project inclusiveness, while key decisions are made unilaterally.

In the UML’s CC meeting, there was no meaningful discussion on pressing issues such as constitutional amendments. Yet, shortly after the meeting, Oli announced that amendments might be possible by 2030. The CC meeting lacked any substantive criticism of Oli’s leadership, with dissenting voices muted or expressed cautiously. This comes on the heels of the party expelling leaders Bhim Rawal, Binda Pandey and Usha Kiran Timalsina for opposing the decision to accept land from a controversial businessman for the party’s office construction. With the Supreme Court validating the land deal, Oli grew more assertive, urging party members to refrain from criticism.

During a party gathering after his China visit, Oli openly admired Xi Jinping’s unchallenged authority and expressed a desire for a similar dynamic in his party, where decisions faced no opposition. After seven months, the UML’s CC meeting was finally convened, but its purpose seemed more symbolic than functional. Critics labeled it a “rubber-stamp CC,” meant only to endorse decisions made by the top leadership without genuine consultation.

The CPN (Maoist Center) is in a comparable state. Chairman Dahal faces some resistance from senior leaders Janardhan Sharma and Barsha Man Pun, both vying to succeed him. However, this rivalry benefits Dahal by keeping them divided. The Maoist CC meeting made populist decisions to placate party members, such as rejecting alliances with the Nepali Congress (NC) and UML, opting instead to collaborate with revolutionary forces. It also pledged to restore the party’s organizational strength. However, as with UML, critical decisions on alliances and governance remain solely at Dahal’s discretion, with the CC expected to comply unquestioningly.

This week also saw a flurry of party activities concerning possible constitutional amendments. The Maoists proposed a directly elected executive head, a fully proportional electoral system, 50 percent female representation in state bodies and other progressive measures. Meanwhile, the Rastriya Swatantra Party (RSP) formed a task force under Santosh Pariyar, a former UML cadre, to draft its position on the issue. While RSP leaders, including its Chairman Rabi Lamichhane, are less ideological, Pariyar’s influence could shape the party’s stance. However, Oli downplayed the entire debate, reiterating that constitutional amendments might not occur until 2030. UML insiders suggest that Oli’s reluctance stems from opposition to radical agendas that conflict with his party’s stance, despite amendments being a key promise of the coalition government formed last year.

Inside the NC, preparations for the 15th General Convention are becoming a contentious issue. Party President Sher Bahadur Deuba has remained silent on the timeline, while senior leaders like Shekhar Koirala and Gagan Thapa have already begun campaigning for party leadership. Some party members claim Deuba prefers postponing the convention until after the next national elections, fearing it could exacerbate internal factionalism and weaken the party’s electoral performance in 2027.

Meanwhile, in the Madhes region, discussions among Madhes-based parties about unity, alliances or a loose coalition are gaining traction. Grassroots pressure is mounting for these parties to unite ahead of constitutional amendments and the 2027 elections. However, historical divisions and rivalries make such efforts challenging, leaving the outcome uncertain.

On Tuesday morning, Nepal was jolted by a 6.8 magnitude earthquake centered in Tingri, Tibet, roughly 80 kilometers north of Mount Everest. The tremor felt across Nepal, Bhutan and India was the strongest since the devastating 2015 earthquake that claimed over 9,000 lives. This recent quake serves as a stark reminder of Nepal’s vulnerability to seismic activity, underscored by the frequent small-scale tremors in western Nepal in recent months. In 2023, a magnitude-5.7 earthquake in Jajarkot caused fatalities, highlighting the urgent need for preparedness.

Amid these concerns, there was a brief moment of respite as Nepal’s mountains received snowfall this week. While the snowfall offers temporary relief, the rapid melting of glaciers remains alarming. Nepal’s iconic snow-capped peaks are increasingly turning into barren black rocks, a stark indicator of climate change. Though the mountain regions anticipate more snowfall, there is no certainty. Unfortunately, Nepal currently lacks effective measures to address this environmental crisis.

On Jan 7, a sleepy nation woke up at 6.50am to a magnitude-7 quake epicentered at Tingri County (Tibet), China as eastern districts of Nepal, including Solukhumbu, Okhaldhunga, Khotang, Sankhuwasabha and Bhojpur, shook vigorously along with the federal capital of Kathmandu. Much to the relief of the nation, there was no loss of life and no major property loss in the jolt, though some private houses and the office building of Thame Post of the Sagarmatha National Park at Thametyang suffered damage.

The quake comes close on the heels of a season of disasters that just passed us by. Last monsoon, more than 230 people died, at least 169 people suffered injuries and many went missing as floods and landslides further destabilized a country where political instability has become the norm rather than the exception. The rescue of around 17,000 people during the monsoon season gives an indication of the scale of the disaster. 

Against this backdrop, a polity with a very short memory and a weak institutional capacity to deal with disasters would do well to learn some humble lessons from the disasters old and new. 

Monsoon floods, landslides, wildfires and quakes claim lives every year, render thousands homeless and cause infrastructural losses worth billions of rupees. 

For example, around 80 people died, several others suffered injuries, thousands became shelterless and the nation suffered infrastructural losses worth billions when a magnitude-6.4 temblor epicentered at Ramidanda (Jajarkot district) shook districts of western Nepal, including Jajarkot and Rukum West, at 11.47 pm on 3 Nov 2023. More than a year after the disaster, humanitarian assistance continues to ‘elude’ many shelterless survivors of the Ramidanda jolt. 

It’s time the government realized that disasters don’t kill, lack of preparedness does. Anyway, a government tasked with protecting the life and property of its people cannot get away by blaming death, devastation and displacement on ‘natural’ disasters.       

Let the recent jolt and other disasters wake up all three tiers of our government and prompt them to step up preparedness that can go a long way in protecting life and properties during such disasters.