Corporate social responsibility in Nepal

Siddha Raj Pant

Recently, a marketing manager of a distillery audaciously claimed to be evading tax to make up for extortion by various political outfits. Similarly, another owner of a popular low-cost liquor brand is absconding following charges of misappropriating millions from a bank against him. Likewise, the chairman of the FNNCI was arrested for fraudulent business practices.In this context, it was ironic that Kathmandu played host to “South Asian NGO Consultative Meet on Promotion of Corporate Social Responsibility”, a three-day regional conference from April 25 to 27. The message is loud and clear. Whether or not businesses abide by their responsibility towards the society, civil society represented by vigilante NGOs will continue to keep an eagle eye on the impact companies have on the society and other stakeholders. But without government help, NGOs can do no more than name and shame unscrupulous businessmen.

Originally, the companies were created by the governments to do essential public work. This practice gradually evolved into an economic model with enhanced efficiency and effective use of resources. This model of economic development is the best as it enlarges the size of the pie than seek a larger portion of a smaller pie. Philosophically too, a rational being will tend to go that extra mile only if there are incentives to do so.Even though political myopia in promoting unionism and barriers to entry into and exit from the market would remain for a while, it will be imprudent to think of life without private businesses for both their might and importance is increasing day by day (51 of the world’s 100 largest economies are corporations, not countries). The important task is to gauge socialdesirability of these institutions and determine the minimum acceptable ethical behaviour or social responsibility.

Caught in the dilemma of development imperative and amorality associated with private corporations, governments across the globe are changing their role from that of a competitor with private businesses to one regulating the private entities in favour of the consumers, the environment and the state.As the role of corporations is evolving from an immoral entity into a legal one, they will have to behave ethically as prescribed by the law. No country allows, by law, fraud and smuggling. This minimal level of ethics should be maintained irrespective of whether it makes an economic sense for a business. But some companies adopt high ethical standards if only to differentiate themselves from their competitors.

But does it pay to be an ethical business in Nepal? There is no definite answer. The level of ethical adherence depends upon societal expectations, institutional capabilities, economic freedom, awareness and education level of citizens. Other factors apart, in order to promote social responsibility of companies the state, along with watchdog NGOs, should strengthen the capacity to regulate businesses and benchmark good practices.

Source: The Himalayan Times, May 25, 2007

Hydropower: An Overview

Uttam Maharjan

Energy is one of the basic components of development. Without energy, no economic sector can develop. An instance of energy is fossil fuels. Fossil fuels are extensively used around the world. The far-reaching use of such fuels has contributed to destabilising the environment, causing, for instance, global warming. With fast-paced depletion of fossil fuels and the resultant effects on the environment, hydropower is being explored as a renewable source of energy. In the present scenario dominated by the deleterious effects on the environment of greenhouse and other noxious gases, moving towards the use of hydropower as a carbon-free energy source has been deemed viable and eco-friendly.

Renewable energy

Hydropower has been recognised as a renewable source of energy. The Johannesburg World Summit on Sustainable Development and the Third Water Forum (Kyoto) have both recognized hydropower as such. Other sources of renewable energy are solar energy, wind energy, geothermal energy, oceanic energy, cogeneration (use of a heat engine or a power station to generate both electricity and useful heat at the same time) and biomass.

At the end of the Third Water Forum held in March 2003, a new report was released on how developed countries should fund water projects. At the beginning of the 21st century, 33 per cent of the people were found suffering from water hardships as per the 54-page report of the Forum. In Africa, households spend 26 per cent of their time fetching water. As per the study by the Water Supply and Sanitation Collaboration Council, an independent body that endeavours to secure safe drinking water for the teeming poor in the world, Asian and African women have to walk around 6 kilometres a day to fetch water. Consumption of water per person per day in developing countries is estimated at 10 litres vis-୶is 135 litres in the developed countries.

About 1.1 billion people around the world are deprived of safe drinking water, whereas about 2.4 billion people are balked of good sanitation. One of the millennium development goals is to halve the problem relating to safe drinking water by 2015.Nepal is very rich in water resources. Despite this huge potential of water resources, the hydropower picture in the country is bleak. There is no denying that hydropower has multi-dimensional use, through which sustainable development can be notched up. Sustainable development in the economic sector would certainly transform the socio-economic status of the people, a daunting challenge for the poor countries.With the restoration of multi-party democracy in the 1990s, the hydropower sector in the country, like other economic sectors, has somewhat metamorphosed. The Water Resources Act 2049 and Hydroelectricity Act 2049 were promulgated, enabling the private sector to step in for investment in water resources. Foreign companies are interested in hydropower projects, but they prefer large-scale hydel projects.

Foreign aid for the development of water resources projects also comes but with harsh terms. Such projects are marred by lack of transparency, accountability, monitoring and financial discipline and by economic anarchy and malgovernance. The cost of such projects would also soar due to delay in completion, exchange rate devaluation and additional cost. It is essential to set up an Electricity Development Board and encourage small- and medium-scale hydel projects. For water resources to develop in a true sense, three things need to be in place: management of electric development and promotion, market management of electricity, and operation and maintenance of projects in a timely fashion. In developing countries like Nepal, large-scale hydel projects are a difficult proposition due to the high cost and sophisticated technical know-how required. Hence, small-scale hydel projects such as micro- and pico-hydel projects need to be encouraged and stimulated in addition to large-scale hydel projects. Micro-hydels produce upto 100 KW of power. Such hydels are often used in areas where there is plenty of water. They supply power to small communities. Micro-hydels can complement photovoltaic solar energy systems.

On the other hand, pico-hydels generate power below 5 KW. Such hydels are used for far-lying communities requiring very low power. Pico-hydropower does not pollute the air, so it is more eco-friendly than fossil fuels. Hydropower projects have elimination of the cost of fuel as their major advantage. As no import of fuel is required, hydel plants are free from price hikes normally associated with fossil fuels like oil, natural gas, coal and POL products. Besides, the operating labour cost of hydel plants is lower as plants are automated, requiring very few people on site during normal operation. Reservoirs built for the purpose of hydel operation may provide water sports facilities. Such areas may be used for wooing tourists, thus, developing the areas into tourist spots. In a similar vein, a hydel plant may be constructed at a lower cost around multi-purpose dams for irrigation, flood control or recreation, which may recoup the cost of the construction of the dam. Hydropower projects do not come with advantages only; they may pose a threat to aquatic ecosystems. Damming often poses an obstacle to the migration of fish, thus preventing them from reaching their spawning grounds upstream. Similarly, damming and redirecting the waters of a river may endanger native and migratory birds. Large-scale hydel projects may give rise to environmental snags both upstream and downstream. The reservoirs of hydel plants in tropical regions may generate a lot of noxious gases such as methane and carbon dioxide.

Disadvantages

Construction of hydel dams makes it necessary to relocate the people who are living where the reservoirs are planned to be built. In such a case, the question of compensation often crops up, leading to spats with the local people and causing a delay in completing the hydel projects. Besides, historically and culturally strategic places may be affected, sometimes leading to their complete loss, which is a great blow to heritage preservation. Construction of a dam in a geologically unsuitable area may give rise to disasters. One such example is the Vajont Dam in Italy, which killed 2,000 people in 1963. Failure of dams can be very serious. The failure of the Banqiao in China killed 171,000 people and rendered millions homeless. Even stronger dams built at a great cost are vulnerable to sabotage and terrorism.

Source: The Rising Nepal, May 25, 2007

Antinomies Of Civil Society

C. D. Bhatta

Since the last couple of years, the word 'civil society' has been used frequently in different perspectives of state affairs. Nothing is complete without an explicit reference to the civil society. However, the discussion on civil society in Nepal is such that there are many who use the term lavishly in different aspects but hardly describe its content. The actual nature of civil society is not sufficiently acknowledged and, if it is, is done so only in a half-hearted way. Much of the discussion on civil society seems to be driven either by a radical disenchantment with the present, an insidious nostalgia of the past or uncritical glorification about its role during the people's movements.

Debate

The current debate on civil society mostly emanates from the people's movement of 2006 wherein civil society organisations played an important role in regime change. If the regime change was driven by a collective consciousness of the civil society that rose against the King for democracy and the Maoists for peace, the same organisations have a responsibility of leading the ongoing changes to their logical end. But this does not seem to be the case with the Nepali civil society.

The fundamental problem lies with the fact that there is (1) politicisation of the civil society and elite shift of the civil sphere into the political sphere and vice versa, (2) elite domination in the civil society, hierarchy between members and leaders within civil society activists and missing link between the civil society and citizenry, (3) patron-client relationship between the civil society, political society and donors, and (4) split among the self-declared civil society leaders on ideological grounds.

These factors are contributing towards incivility, and civic euphoria is slowly evaporating. And these are among reasons why the civil society in Nepal has failed to institutionalise democracy and peace in the country once the aim of regime change is accomplished. This is what happened during the 1990s as well. This is the paradox with civic movements. Civic movements are waged to meet certain objectives, mostly political, and transform quickly into an 'amorphous' mass wrestling in the streets to meet vested interests in the name of civil society. This is what Nepal is experiencing after the April uprising of 2006.

The protests in the streets, strikes and chakka jams, lock outs in the government and private business houses, rallies, dharnas to put undue pressure on the transitional government have become the norm of the day. What is really disturbing is the blank support these groups are getting from official civil societies. Paradoxically, these activities are only pushing the Nepali state towards anarchy and further instability. Perhaps, this could be the reason, among others, why the official civil society has been blamed for having represented more radical agendas than democratic values. It is because this civil society has never paid any attention to making the society civil. The official civil society, in contrast, engages in spearheading activities that might help to champion its own goal.

This is another reason why the civil society has been blamed for being anti-state rather than pro-state. Interestingly, when we look at the development of post-modern civil society organisations in Nepal, one can conclude how organised and well-off sections of the society have created their own empire of civil societies. And the civil society as a concept has been used and abused on different occasions, beyond movements, by using the amorphous mass, which is often equated with the civil society. The vertical classification of the civil society into two categories - official and unofficial civil society makes a clear distinction as to how creamy layers are forming in this field as well.

The official civil society is mostly Kathmandu-based and comprises post-modern and well-off sections of the society, a profusion of NGOs, pro-democracy groups, civil society activists (official) and other interest groups. The public sphere created, thus, is largely captured by the self-declared conglomerate of the urban elite and retired bureaucrats who prefer to be known as civil society leaders - with the provision of hierarchy - and carry populist agendas. The unofficial civil society on the periphery, for its part, includes duty-bound rural civil society organisations. They extend throughout the nation but do not have the capacity to bargain with the state.

The hijacking of the public sphere by the official civil society and marginalisation of the unofficial civil society raises some fundamental questions. It begs clarification as to what constitutes the civil society in Nepal and whom does it represent and what are its parameters? The civil society in Nepal is unharmonious for the development of a democratic political culture in the country. The actual relationship between the civil society and existing public sphere (that is, what constitutes to be a civil society - who are able to participate and who are denied access to this public sphere) is determined by a patron-client relationship.

Inclusive culture

Likewise the unabated protests wearing the civil society tag at the national level are posing a great threat for an orderly society in Nepal. What is needed for its significant prevalence is to ensure a more inclusive culture based on civility to build networks and coalitions among poor groups to strengthen the voices of the unrepresented mass, represent crucial issues and change the people's perception about the civil society and mobilise for a greater cause.

Source: The Rising Nepal, May 25, 2007

Threat continues

The landmines planted during the insurgency days still pose a big threat to the general public, especially to the ruralfolks. Of the 1,370 lives lost so far to these dangerous explosives, the majority has been innocent children. No wonder the anti-landmine lobbies have now called on the government to take concrete measures to minimise the risks associated with the landmines. The Ban Landmines Campaign Nepal (NCBL), an NGO working for landmines risk reduction, for instance, has urged the government to implement the commitment expressed in the November 22, 2006, Peace Accord, whereby both the SPA and the Maoists had agreed to assist each other to mark the landmine areas and then defusing and removing them immediately.

According to the NCBL, it has identified around 337 sites with landmines and improvised explosive devices in the country so far. Further, it says over 400 landmines could be found in one location alone. No doubt it takes quite some time to clear the landmines altogether. But it is surprising that neither the Nepal Army nor the People’s Liberation Army have yet been fully mobilised for such an important task. During the signing of the Peace Accord, the SPA and the Maoists had assured the people that they would collect all relevant information within 30 days and defuse the explosives within two months. Since this is a matter of people’s safety and security, the Interim Government must not delay taking the required measures any more. The assistance of others, such as the UN, should also be secured to this purpose.

Source: The Himalayan Times, May 25, 2007

Wiser course

The Melamchi drinking water project has hit a roadblock at the eleventh hour, when a foreign private company, Severn Trent Water International (ST), was on the verge of taking over the management of the distribution of drinking water in the Valley under a loan conditionality the Asian Development Bank (ADB) attached to its commitment of US$120 million, which accounts for less than one-third of the total project cost. The Nepali media splashed ST’s controversial records in several other countries, including Britain. Hisila Yami, the Maoist minister in charge of drinking water, has taken a firm stand against awarding the contract to such a company, all the more so because the pre-interim government had agreed to take it on without meeting the financial regulations on bidding for a contract. Amid the controversy, ST announced this week that it had withdrawn from the deal. However, ADB seems to insist that the ST conditionality should be honoured or it cannot keep its commitment. As much is reported to have been said by ADB officials in their meeting with Maoist chairman Prachanda on Wednesday.

Given the ST pullout and the adverse circumstances that have developed in the country for it, the issue should not be one of sticking to it, but of finding a way out to keep the Melamchi project alive. ADB was formed to assist in the development of poor countries and its partnership with Nepal is a long one. Sticking with ST sounds neither wise nor advisable in the emergent situation, as it would find a hostile environment in which to work and win public support after so much exposure of the negative kind. And it would impact adversely too on ADB in the eye of the Nepali public, as questions will be asked about its extraordinary interest in this company. Ideally, the concern of a development bank like ADB should be that the money it lends is spent in the project specified and that its principal and interest are paid in time. Extraneous conditionalities raise doubts about the motives of multilateral agencies, as ADB, the World Bank, and the IMF are not unaware of.Certainly, questions of Nepal going back on its earlier commitment may also be raised. But when it comes to perceived national interests, much should not be made of Nepal’s credibility among the donors. Now the only wiser course would be to look at the management of water distribution in the Valley from a new angle.

The question of why a foreign company, and not Nepalis themselves, should be favoured is yet to be convincingly answered. If the contract is to be awarded only to a foreign company or to Nepali ones alone, or to the best bidder in global competition, the matter should be settled first. But everything ought to be decided in a transparent manner in the interests of the poor Nepalis and that would entail steps aimed at cutting cost, plugging huge leakage of water, desisting from charging the consumers unfairly for water use, fighting corruption in water management, and exacting accountability. Everything is not lost yet. There still is time to make up.

Source: The Himalayan Times, May 25, 2007