Ruling party agrees to hold CIAA amendment bill in order to build consensusThe decision came in response to widespread criticism from both the opposition and private sector, which believes that it will ruin the investment climate.
A Standing Committee meeting of the ruling Nepal Communist Party on Wednesday decided to put the third amendment to the Commission for Investigation of Abuse of Authority Act on hold for the time being.
Nepal Communist Party (NCP) General Secretary Bishnu Poudel told the Post that the party has decided to suspend the bill until consensus is reached within the party and with the opposition.
“The bill will be forwarded for endorsement only after further discussions among the parties,” said Poudel.
The bill has run into controversy as amendments would have allowed the constitutional anti-graft agency to investigate the private sector, which many say could result in witch-hunts against private individuals and institutions.
The government was planning to endorse the bill from the Upper House on Tuesday, but it was removed from the agenda at the last hour after the primary opposition Nepali Congress sought more time for discussion.
“The bill won’t be moved forward until we reach consensus,” said Dinanath Sharma, an NCP member of the National Assembly. “We will hold further discussions with concerned ministers, the law ministry and, if necessary, with experts and the private sector.”
Legal experts have taken exception to attempts to expand the ambit of the CIAA, saying that the Prime Minister’s Office had drafted the bill as an attempt to consolidate power.
Radheshyam Adhikari, a Nepali Congress member at the Upper House, who is also a lawyer, said that the bill has some clauses that contradict the constitution.
“Bringing the private sector under the purview of the commission is against the constitution, which says that only those holding public posts can be investigated by the anti-graft body,” said Adhikari. “The amendment also seeks to allow the commission to look into ‘improper conduct’, despite the constitution removing this jurisdiction from the commission.”
Allowing the anti-graft agency to investigate the private sector could invite other complications, including overlaps between the jurisdiction of existing bodies.
According to the amendment bill, insurance companies, medical colleges and related hospitals, universities and colleges, public limited companies and projects run by domestic and foreign institutions that receive funding from any of the three layers of government will now come under the jurisdiction of the commission.
The CIAA can currently investigate officials from government banks like the Rastriya Banijya Bank, Nepal Bank Limited and Agricultulture Development Banks, and state insurers like the Rastriya Beema Sansthan.
But the new bill seeks to allow the commission to also investigate other private sector banks, which are currently regulated by the Nepal Rastra Bank.
There are more than a dozen government entities that currently look into irregularities in the private as well as government sectors.
The commission has itself been arguing that as a signatory to the United Nations Convention against Corruption, Nepal is required to investigate corruption in the private sector.
While questioning the motive behind expanding the authority of the CIAA, legal experts have also wondered why the government is bent on abdicating its own authority.
“Through the bill, the government seems to be giving up its own jurisdiction to the commission,” said Adhikari. “There are ministries, departments and other regulatory agencies in place to regulate and monitor the private sector.”
The private sector on Wednesday said that the bill could ruin the investment climate in the country.
“The private sector concludes that it worsens the investment climate,” read a joint statement issued by the Federation of Nepalese Chambers of Commerce and Industry and Confederation of Nepalese Industries. “The bill gives the commission jurisdiction to look into the private sector at a time when there are many regulatory agencies under the government which themselves are under the jurisdiction of the commission.”
Private sector regulatory bodies like the Nepal Rastra Bank, Nepal Telecommunications Authority and the Insurance Board all come under the jurisdiction of the CIAA.
The two private sector bodies said that the provisions in the bill could spoil the professional freedom of private sector institutions.
“They will be discouraged from doing business in the country if the number of investigating agencies continues to rise,” they said. “This will ultimately affect economic activities. The private sector is in favour of a situation where it can take independent decisions.”
Shekhar Golchha, senior vice-president of the Federation of Nepalese Chambers of Commerce and Industry, told the Post that the bill’s provisions would seriously impact the decision-making power of the private sector.
“A bank manager will not be able to take timely decisions on sanctioning loans,” he said. “The bank will then turn into a government agency that is unable to take decisions on time.”
According to Golchha, there’s duplicity in the government’s intention when it comes to the private sector.
“On the one hand, the government has been saying that it is with the private sector. But on the other, it wants to bring draconian rules that dent the private sector’s confidence,” said Golchha, who believes that no private company will dare register itself as a public limited company if the anti-graft agency is allowed to investigate such institutions.
The private sector has pointed to the conduct of former CIAA commissioners to bolster its argument regarding the potential for misuse. Former chief commissioner Lokman Singh Karki was disqualified by the Supreme Court after numerous scandals while Deep Basnyat himself is being investigated by both the CIAA and the Department of Money Laundering Investigation. A former commissioner, Raj Narayan Pathak had also to resign after being embroiled in a graft case.
Former auditor general Bhanu Acharya said bringing the private sector under the jurisdiction of the anti-graft agency would spoil the environment for private sector investment in the country.
“Those who have money will rethink investing in the country in an environment of fear,” said Acharya. “It will promote capital flight.”