Due diligence law: A must for Nepal
With the country set to graduate from the group of least developed countries in 2026, it is an imperative for Nepal to be able to attract foreign investments. The nation, in order to turn itself into a lower middle-income country with a clear pathway ahead for further economic growth, is compelled to diversify its economy, overcoming its dependency on foreign remittances.
Tourism and hydropower are showing high potential and, in recent years, some efforts have been made at making the national economy more attractive for global companies looking for new markets to produce and sell their products. With its low manpower costs, Nepal could become an important destination for global investments.
Yet, it is equally important that the country creates conducive conditions to boost its national GDP without jeopardizing local communities and while safeguarding its unique biodiversity and intangible customs and traditions that are often at risk of being disrupted by business interests.
That’s why the agenda of Business and Human Rights becomes so relevant not just to ensure, in a tokenistic fashion, some nice optics on the way Nepal is pursuing its national growth. Rather, it should become an essential, indispensable core component of any national strategy aimed at laying the ground for a successful graduation from the grouping of least developed countries.
When we talk about Business and Human Rights, we refer to a niche area of human rights laws and practices at a crossroads with many other legislations and regulations. Businesses intersect with and impact a multifold array of sectors and areas, from labor to customer protection, to customary and indigenous rights to gender and environmental related legislations and regulations.
There are many cases of business and human rights infringements.
Cases of labor exploitation, lack of consultations with local communities before breaking ground, denial in giving proper compensation when private lands are expropriated, exploitative working conditions and illegal but silently tolerated disruptions of the local environment are some of them. So, it is essential to ensure that business houses, especially those reaching a certain turnover, are operating not only by upholding the law but also by adhering to the highest standards stemming from international law and practices.
This is particularly essential in a country like Nepal.
Here we normally witness a weak rule of law characterized by a political class often marred in controversies with the private sector, a slow judiciary often accused of lacking transparency and integrity and a generally feeble enforcement of rules and regulations. As I write, the 13th United Nations Forum on Business and Human Rights is unfolding at the United Nations in Genève.
The gathering is the most important venue to discuss challenges and best practices related to business and human rights and it is normally preceded by regional forums around the world.
For example, back in 2023, Nepal hosted, for the first time, the fourth edition of the South Asia Forum on Business and Human Rights. At the beginning of 2024, with a lot of delays, the government officially launched its first ever National Action Plan on Business and Human Rights. This represents an important milestone for Nepal but there is a high probability that such a plan will only remain a lifeless document, unread and forgotten, a plan that, like many others, will never be brought to action because of lack of enforcement.
But the document is not only at risk of being ignored. The plan is also problematic because of its nature and way it was designed. Because the area of business and human rights is very vast, the Action Plan covers a multitude of issues that are extremely complex on their own.
How could we, for example, downplay the plague of child labor, for example? What about the necessity of creating awareness-raising programs on the rights of the consumers, who are so often deceived by the private sector? What about the need for developing industrial waste processing mechanisms or the formulation and revision of the law relating to import, sale, distribution and justified use of pesticides?
These are all essential items of policymaking included in the Action Plan that, if put into practice through effective legislation and regulations, could make a real difference for the lives of millions of citizens.
Yet the whole plan is missing the point. Rather than being a checklist of disparate and unrelated actions to be undertaken by the legislator and executive, the plan should have focused on key essential items. At the foremost should have been the Corporate Sustainability and Human Rights Due Diligence legislation.
This is basically a regulation that would force corporations to uphold mandatory standards and behaviors by demanding them to report and explain how their business practices respect human rights across their value chain. This provision is entirely missing from the plan whose first activity, just to give the reader an idea, is to “formulate national policy on business and human rights” that is supposed to be implemented in the third year of implementation.
The contents of such a policy, its purpose and its key features are still a mystery. Nepal, like many other nations, needs a binding Due Diligence legislation. Designing such legislation won’t be easy. It is a complex task that would require a continuous engagement with stakeholders, starting from the business sector that would probably push back against it.
Yet, it is essential to compel the private sector to undertake binding rather than voluntary commitments. This is the major lesson learned over the years while trying to implement the UN Guiding Principles on Business and Human Rights.
This is a voluntary framework that provides corporations with the key expected behaviors and important principles like the right of the people that are affected by alleged and presumed abuses by the private sector to have multiple pathways toward a remedy.
Such an approach did not work.
That’s why many developed states have enacted mandatory Due Diligence regulations, including the EU with the most ambitious legislation, the ‘EU Corporate Sustainability Due Diligence Directive’ that entered into force for all its members on 25 July 2024. It is a regulation that will be fully implemented in the coming years on the basis of a gradual, step by step timeline by giving enough time for corporations to be ready for its compliance by identifying, addressing and providing remedy for their negative impacts.
It is a legislation that attracted a lot of resistance and it is still being fiercely criticized but is setting the standards. Developing or emerging nations should not just wait and watch for developed nations to take the lead. For a country like Nepal, there is an opportunity to lead in its own way with a less complex but solid legal framework that would ensure highest practices on the part of the corporate sector.
If corporate houses take a long view, they will realize that, ultimately, that it is in their own interest to embrace this road. Better business practices, more attentiveness toward the rights of the citizens, will bring stronger financial returns even though due diligence legislations will force them to change many aspects of their business models.
Shortcuts won’t be tolerated any more. For example, Environmental Impact Assessments or the so-called Free Prior Informed Consent that gives special rights to indigenous people when dealing with land inhabited by them, are both often not taken seriously and taken too much for granted. There is no doubt that this type of legislation will only work if the state is serious about implementing them and at creating the conditions for these regulations to do their job.
The ongoing forum in Genève is focused on the so-called “smart mix”, a combination of voluntary and mandatory regulations at local and national levels. In the case of a nation with a strong rule of law culture, such an approach could make sense even though the mandatory, binding components of any Business and Human Rights legislations should be stronger and more prevalent than the voluntary ones.
Perhaps, a country like Nepal would need a gradual approach based on a strong core of mandatory provisions to be accompanied by voluntary ones. In matters of Business and Human Rights, it is now proved that it is better to have a strong stick and few carrots to make sure corporations can thrive while championing human rights.
A tribute to Daman Nath Dhungana
After completing my six-year tenure as an election commissioner in July 2000, I decided not to return to teaching, my original profession. Instead of confining myself to the classroom, I decided to write articles on electoral matters to share my ideas with the people at large.
In the beginning of 2001, Padmaratna Tuladhar invited me to meet a foreigner (whose name I don’t remember) at a five star-hotel in Kalimati. There, I met Charan Parsai for the first time and a lady whose name I cannot recall. I don’t remember the subject we four deliberated upon. But this was my first interaction with civil society leaders. Devendra Raj Pandey got me associated with Nepal South Asia Center in March 2002 and I worked with him until I was made national coordinator for the Ceasefire Code of Conduct in June 2006.
However, I was in constant touch with Daman Nath Dhungana through the 22-member Civil Monitoring Committee, formed to monitor the ceasefire that the Maoists had declared for Dashain in 2005, as both of us were its members. We remained associated through several organizations like Parliamentary Foundation, Friends for Peace and Nepal Transition to Peace Institute Nepal/Nepal Shanti Pratishthan, which was established in 2014.
During this period, we used to meet at least thrice a week and share our views over phone every evening till recently. After developing a theme to write on, I used to talk about it and after publication of the article, get his comments, which were always objective. He was actually my friend, philosopher and guide. Even when he was almost bedridden after his return from Delhi, where he had been for medical treatment, I used to meet him on alternate days. Though unable to speak fluently as before, he used to infer that I must be busy with my writing. Referring to our cordial relationship, I used to tell him that it must have been fixed in our previous lives, though neither of us believed in past lives. Even today I do not know why he was so cordial and helpful to me as we were far apart geographically: I am from Madhes and he was from Kathmandu.
There were some salient traits of his personality, which I want to share with the reader. First, he was a full-time politician, though not active but always participatory. He never declined an invite for a meeting, whether called by a party or a group, and he was a true politicoholic. Second, he was a democrat by conviction and practice, and never compromised with his ideals for any gains. It was he who raised, for the first time, the issue of electing a Constituent Assembly (CA) for framing a people’s constitution, in Nepal. So, the CA was his brain-child, though India’s first PM, Jawaharlal Nehru, had included the agenda in the ‘Delhi Compromise’ signed in Delhi in Feb 1951. The agenda remained on paper until the Maoists included it in the 12-point understanding reached with the Seven-Party alliance in Nov 2005.
Third, he was a politician with a difference as he neither sought any favour for himself nor obliged anyone for profit. Perhaps, this was the reason why he got respect from others but not their support, which is required the most in today’s electoral politics and that was also the reason why his institutions always lacked funds to operate smoothly. Fourth, he was always ready to address any meetings and deliver speeches but was quite lazy when it came to writing, which deprived us of his knowledge and wide experience for our guidance.
Fifth, he was a witty orator and knew how to twist and turn the subject matter he took up for deliberations. Sixth, he was a treasure of knowledge acquired by reading books, which he used to share with us in our meetings. Seventh, he was very hospitable and used to receive visitors well before the scheduled time. Eighth, I always found him very accommodating. During the launch of my books, he used to busy himself with the management aspect of the events. Lastly, he was always worried about the low level of politics and the future of Nepal. He wanted to take the lead in improving the situation but found himself handicapped by not having any organization to support him.
He wanted the Parliamentary Foundation, the organization he had founded, to function smoothly to provide organizational support for streamlining the parliamentary system and also wished to get the initiatives of NTTPI for documenting the peace process. Sadly, his wishes remained unfulfilled.
Fulfilling his wishes through joint efforts would be our tribute to the departed soul. In his death, I have lost one of my great well-wishers, whom I will be missing all my life as the void resulting from his absence will never be filled up.
Stop plotting to preserve arable land
Nearly five decades ago, when I was a student of economics at the Tribhuvan University, all master’s level students had to serve in rural areas of the country—they had to perform social work and teach in schools under the program called National Development Service (NDS). Normally, master’s degree programs took two years to complete, but the NDS component turned into a three-year program.
My assignment was at a lower middle school in Khurkot (Sindhuli district) and I was the first NDS student to be sent to this school, where I received a warm welcome from the teachers and villagers.
Our primary task was to help build a toilet at the school, as there was none. Local people and teachers came together, pooled in necessary resources and built the toilet in three months. In addition, I organized an inter-school quiz competition, launched an awareness campaign encouraging parents to send their daughters to school and worked to reduce anti-social activities.
A bridge between the hills and the Tarai, Khurkot, located at the foot of the Mahabharat range and on the banks of the Sunkoshi river, has been a center for trade and commerce between the people of the hills and the Tarai for centuries. These days, Khurkot, with roads all around it, namely the Dhulikhel-Bardibas road (west), Khurkot-Manthali road (north) and the Khurkot-Katari road (east), has transformed into a bustling small town on the Sunkoshi banks with shops, hotels and lodges.
Despite these changes on the outside, there has not been any marked improvement in the life of its residents. The most visible change, perhaps, is the replacement of thatched roofs with zinc sheets. What struck me was that many of the shops, hotels and lodges that have sprung up in Khurkot do not belong to the local people; they belong to outsiders.
Primarily, Khurkot is home to Chhetri and Bahun (Brahmin) communities, most of whom are farmers, with a handful in civil service. Many youths from these communities have gone abroad for work to support their families, leaving behind the once fertile land near the Sunkoshi that is now home to nearly 1,000 families.
This is a departure from the past when people used to live off less fertile land, particularly on the lap of the Mahabharat range, growing crops like maize, paddy and wheat. In those times, they used to grow crops three times a year.
Close by Khurkot are the fertile farmlands of Jhagajholi, Ratmata, Mulkot and Khalte that support the livelihoods of around 5,000 households. But during my recent visit to Khurkot, I saw a disturbing trend from Ghurmi and beyond: the conversion of fertile farmlands into residential plots everywhere—across the hills, the valleys and the Tarai.
While taking a break from the journey in Khurkot, I had the opportunity to strike a conversation with some locals in a shed, which is a popular hangout. When I took up the issue of loss of farmland through its conversion into residential plots, they acknowledged that the farmlands could have supported a thriving agricultural economy. They lamented that they no longer had fertile land for farming.
Mulkot too has lost its fertile land and turned into a concrete jungle.
In summary, Khurkot and Mulkot point at an alarming rate of loss of fertile land across the country, a phenomenon that has caused a drastic decline in food production and increased our dependence on food imports, exacerbating food insecurity and landlessness.
Time has come to reverse this disturbing trend.
Transform Janakpur into a tourist destination
The historic city of Janakpur, the capital of the ancient Mithila kingdom and the birthplace of Goddess Sita, the consort of Lord Ram, has been suffering utter neglect for ages, with the government of Nepal not bothering to put it on its tourism map.
Though the Ministry of Tourism, Culture and Civil Aviation, the Department of Tourism and Nepal Tourism Board have not bothered to bring to light the glory of this ancient city and draw in tourists, better days seem to be ahead for the city and adjacent areas as they constitute a central part of the Ramayan Circuit, one of the most ambitious projects of the Narendra Modi-led Indian government that aims to connect all sacred places associated with the life and times of Ram and Sita.
To further propagate the glory of Nepal, the government should step up efforts for inclusion of the Janaki Temple in the UNESCO World Heritage Sites’ list.
During his third visit to Nepal as the PM of India in May 2018, Narendra Modi had visited Janakpur as well, signifying the importance of the ancient city.
Welcoming Modi, our Prime Minister KP Sharma Oli had expressed hope that the Ramayan Circuit will further improve the ties between the people of Nepal and India. Modi, on his part, had aptly said that he was in Janakpurdham not as the PM of India but as a prime pilgrim. These words from the two PMs still resonate in the city and beyond.
On the occasion, the two sides had launched a Janakpur-Ayodhya direct bus service and India had announced an assistance package of Rs 1bn for the development of Janakpurdham.
At that time, PM Oli had said he and Modiji had “agreed to address outstanding issues between the two countries in a timebound manner” while PM Modi had expressed satisfaction over the opportunity to visit important pilgrimage sites and promised to visit Lumbini, the birthplace of Gautam Buddha, whenever an opportunity arises.
Peace, harmony and spirituality are some of the common features of our two countries. It is no wonder that people from all over the world come as pilgrims and tourists to Nepal and India in search of peace, bliss and spirituality. Increasing inflow of people to Lumbini, Janakpurdham, Pashupatinath, Varanasi, Kedarnath, Bodhgaya and numerous other destinations in the mountains and in the plains is a living proof of this desire.
Back to Janakpur. The Department of Archaeology came up with a good news recently. It stated that it had found remnants of ancient civilizations dating back to the third or the second century BC on the banks of the Jamuni river in Dhanusha district. In a press release, the department pointed out that eight different civilizations may have existed in and around the site in different time periods, noting that cultural layers in the area date back to the Kusand period of the first to second century AD to the Maurya period ( 2-3 century BC). The department has reportedly unearthed ancient brick walls, foundations of human settlements, manmade pits, piles of mud utensils and post holes used for erecting wooden pillars.
These remains have unique imprints of the Maurya civilization, comparatively advanced relics of the Kusand period like iron slag, terracotta beads, terracotta bangles and bricks as well as unique utensil pieces called Northern Black Polished Ware, which date back to 600-300 BC. During the excavation that involved digging a (4 * 3) trench, the department also collected samples of charcoal, bone and mud for further research in the area.
Unearthing of these remains once again shows how important Janakpurdham and surrounding areas are and how important it is for the government to preserve the priceless heritages of Nepal. Janakpur can also play a key role in boosting relations between Nepal and India, apart from bringing tourists and pilgrims from the world over to Nepal.
The time has come for our government authorities to wake up from deep slumber and work toward the preservation of priceless heritages of Janakpurdham and surrounding areas. I call upon the government to take a step in that direction by declaring 2025 as the ‘Visit Janakpur’ year.