Nepal’s archaic land acquisition lawsProjects have failed to acquire land because of compensation disputes with locals.
Undoubtedly, land acquisition worldwide is a daunting but inevitable prerequisite for most infrastructure projects. It is a daunting task not just because it causes displacement of native inhabitants, but also triggers a lengthy, often complicated, wrangling with them mainly on compensation for their lost assets. Without exception, Nepal has many sagas of major infrastructure projects that failed to acquire private land because of disagreements with locals on compensation.
The nearly two-decade-long unsuccessful attempt to construct the 132 kV Thankot-Chapagaun-Bhaktapur Transmission Line Project, intended to strengthen the power supply system in Kathmandu Valley, is a classic example. So what makes land acquisition so complex, and what triggers disagreements and conflicts with the residents? A quick answer to the question: Faulty procedure of determining compensation, and the practice of imposing the decision without the consent of disgruntled stakeholders.
Scientific and inclusive
The core problem starts right from Nepal’s over four-decade-old land acquisition laws. Many South Asian neighbours have reformed their land acquisition legislations to make the process simple and compensation determination more scientific and inclusive. But Nepal’s outdated Land Acquisition Act 1977 neither adopts the basic features of good global practices nor respects the fundamental rights of the aggrieved.
The law grants extraordinary rights to the government to acquire private land at a price that it determines without providing reasonable justifications and consultations with those affected by the decision. Even more troublesome is that the law does not duly recognise the rights of the displaced people to be fully compensated, resettled, rehabilitated and supported to restore their livelihood.
Moreover, it completely disregards some of the proven global good practices, such as the principle of replacement cost while determining the compensation for the impacted land and assets. The principle says that compensation should be equal to the amount needed to replace the impacted assets similar in quality and kind without deducting depreciation. Contrary to the principle, the government, in most cases, determines compensation in an ad hoc manner without adopting scientific and transparent procedures and bringing those affected on board in the decision-making process. As a result, the compensation the government determines for land and house often remains lower than the prevailing market price, sparking furious resistance from the property owners.
In order to smoothen the land acquisition process, global practices call for the preparation of a compensation and resettlement plan, popularly known as resettlement plan. The plan, which is prepared in consultation with those impacted by the decision, not only lays out principles and procedures to determine the amount of compensation for the impacted assets, but also details the range of activities to be sponsored by the project to restore the livelihood of the impacted people. Some of the mega infrastructure projects, such as Arun-3, which acquired around 50 hectares of private land within four months without a single protest, have successfully experimented with the implementation of a resettlement plan.
The benefit of adopting a resettlement plan is that it is formally disclosed to the affected community before initiating land acquisition, thus providing ample time for the affected locals to understand the principles and methodologies applied in determining compensation. This gives them time to negotiate and agree on a compensation package. Moreover, the whole process of negotiating and forging an agreement also opens the avenue for meaningful consultations on various aspects of the project with the local community, something instrumental in building trust between the residents and the project, and ensuring community ownership of the decision process.
Sadly, Nepal’s outdated laws do not envisage preparation, disclosure, discussion and agreement with the affected parties on a resettlement plan. The decision to acquire private land and the amount of compensation to be paid is imposed by a committee led by the chief district officer through a public notice, virtually leaving no option for locals other than to fiercely resist the decision.
Another glaring shortcoming of Nepal’s land acquisition is the absence of a reliable avenue where the local people can lodge their complaints and concerns. International practices put a lot of emphasis on the establishment of a functioning grievance management system.
It has been proven time and again that the willingness of a project to handle local complaints and grievances efficiently and transparently is instrumental in securing broad community support for the project. We have observed through experience that minor community issues, which could have been sorted out in a few days, remain the root cause for costly local obstructions in infrastructure projects. It is not at all abnormal for any project to receive complaints about activities that damage the water supply to a village, block a local foot trail used by locals for their daily commute or destroy the grazing ground for their cattle. But the real problem emerges when repeated complaints from locals remain unheard and unaddressed.
Restoration of livelihoods
Another important aspect of global good practices ensures the restoration of the livelihoods of the impacted people, particularly the displaced families, at least to pre-project levels. This approach has been adopted globally as one of the powerful means to secure broad community support for the project. Some of the projects in Nepal, mainly funded by foreign lenders, provide skill training to enable impacted people to manage an alternative source of livelihood as compensation for lost income in the post-displacement period. However, Nepal has very few success stories mainly because the skill training is designed without understanding the types of skill sets the local market demands and the interest of the trainees.
Instead, a market survey, if done in advance, can help identify the potential requirements in a specific area. Alas, Nepal’s laws remain silent on making the project responsible for extending support to the impacted people to help them restore their livelihoods. It is now of the utmost urgency for the government to reform the old-fashioned land acquisition laws and accommodate proven provisions of global practices that ultimately serve the core interests of investors, the project and the impacted people.