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DAMS & DEVELOPMENT: Emerging Trendsinnepal's Hydropower Terrain

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DAMS & DEVELOPMENT: Emerging Trendsinnepal's Hydropower Terrain Recognising Entitlements and Sharing Benefits: Emerging TrendsinNepal’s Hydropower Terrain Dialogue on DAMS & DEVELOPMENT:NEPAL Copyright: © 2005 IUCN-The World Conservation Union Nepal and Nepal Water Conservation Foundation Published in support of the Dams and Development Strategic Priorities Series for the National Steering Committee on Dams and Development by IUCN Nepal and Nepal Water Conservation Foundation The role of German Technical Cooperation (GTZ) in supporting the Dams and Development Strategic Priorities Series is gratefully acknowledged. The material in this publication may be reproduced in whole or in part and in any form for educational or non-profit uses, without prior written permission from the copyright holder, provided acknowledgement of the source is made. IUCN Nepal would appreciate receiving a copy of any publication which uses this publication as a source. DISCLAIMER No use of this publication may be made for resale or other commercial purposes without prior written permission of IUCN Nepal and NWCF. This Dams and Development Strategic Citation: Dixit, Ajay & Basnet, Shreshna (2005). Recognising Entitle- Priorities Series summaries the find- ments and Sharing Benefits: Emerging Trends in Nepal's Hydropower Terrain ings and serves as a platform for con- IUCN Nepal + 38 pp. tinuing the dialogue on the issues of water resources development and dams Technical Advice: Bhawani P. Kharel and Deependra Joshi in Nepal. This report can assist in the ISBN: 99933-860-9 evolution of the policy process, but it is not the policy document of any of the Printed by: Quality Printers Kathmandu, Nepal organizations involved in the specific priorities series consultative processes. ii Foreword t is five years since the report of the World Commission Priorities. Of the seven strategic priorities four were on dams was first published on 2000. Globally, prioritized for further consultation and analysis. They Ireactions to the report ranged from strong support to were: Gaining Public Acceptance, Conducting a serious concerns. Supporters pointed to the opportunities the Comprehensive Options Assessment, Recognising WCD process provided for finding ways beyond the polarised Entitlements and Sharing Benefits, and Ensuring debates of the past. Others perceived the guidelines as Compliance. The responsibility for dialogue and analysis unrealistic, and impractical claiming that they could were as follows: Gaining Public Acceptance – IUCN Nepal unnecessarily delay the implementation of projects. His and DBS Consultancy with the representation from Majesty’s Government of Nepal (HMG/N) also expressed Department of Electricity Development (DoED); reservations about the WCD framework and had taken a Conducting a Comprehensive Options Assessment – critical view of its report. In order to move beyond the Winrock International with the representation from polarized debate, IUCN Nepal facilitated a consultative Nepal Electricity Authority (NEA); Recognising process on January 2003 wherein representatives of Entitlements and Sharing Benefits – Nepal Water government, private hydropower developers, parastatal, non- Conservation Foundation (NWCF); and Ensuring governmental research organisations, and people affected by Compliance – Water and Energy Users Federation dams participated in the process that compared Nepal’s legal (WAFED). IUCN Nepal facilitated the second phase of the provisions with WCD guidelines. The report of scoping study consultative process. suggested that Nepal’s legal provisions cover many of the recommendations made by the WCD. Furthermore, new This report summarises the findings of the study on policies on the development and management of water and Recognising Entitlements and Sharing Benefits conducted energy have been introduced in a pluralised policy terrain by NWCF. The study shows an evolving and dynamic characterised by vigorous public debate. action terrain where interests are being contested and negotiated. To ensure benefits of water resources The consultative process recommended that the dialogue development reach the people and the country, this process be continued in a second phase focusing on the Strategic must continue at local level. Sagendra Tiwari Acting Country Representative IUCN Nepal iii Acknowledgement his publication is the result of a scoping study Jha, Department of Electricity Development, Mr. Dilli Tundertaken as part of the dialogue on Dams and Ghimire, National Association of Community Electricity Development conducted by Nepal Water Conservation Users Nepal (NACEUN), Mr. Rudra Sapkota and Mr. Navaraj Foundation. Support for the dialogue came from GTZ, and Koirala, Association of District Development Committees IUCN Nepal facilitated the process. The members of the Nepal, Mr. Iswar Raj Onta, East Consult and Mr. Sanjaya Steering Committee on Dams and Development deserve our Adhikary, and Urmila Simkhada, Water Aid, Nepal appreciation. We express our sincere thanks to Mr. Sameer (ADDCN). Dipak Gyawali, Madhukar Upadhya, Shiva Karki formerly with IUCN Nepal for his support. Thanks Bisangkhe, Kanchan Mani Dixit, Ram P. Bhandari, Leela N. are expressed to Mr. Sagendra Tiwari, Mr. Bhawani Kharel Bhattarai, Gopal Siwakoti ’Chintan’, Ram Kumar Sharma, and Mr. Deependra Joshi who subsequently facilitated the Dina Mani Pokhrel, Shanta B. Pun, Bihari Krishna process. Many individuals have given time and shared with Shrestha and Aarjan Dixit provided valuable suggestions. us their views. We express our thanks to Mr Mahendra We also thank Abanish Nepal and Sameep Pokhrel for their Nath Aryal, Secretary Ministry of Water Resources, Mr help. Perry K Thapa is thanked for her editorial support. Mahesh Dahal and Mr Bishnu Prasad Gauli, Ministry of The views expressed in the publication are those of the Local Development, Dr. Janak Lal Karmacharya, former writers and not of those who provided inputs or took part Managing Director, Nepal Electricity Authority, Mr Arun K. in the consultation process. iv Table of Contents TableDebates and Contestation of Contents 2 The Beginning of a Paradigm Shift 3 Benefits from Water 5 Hydropower Development: Trajectory and Phases 7 Decentralisation and Development 10 Hydro Royalties: Sharing with Locals 11 Issues of Allocating and Disbursing Royalties 15 Utilisation of Royalties 18 Subsidiarity and Guidelines 21 Management and Capacity Building 22 Information and Empowerment 22 Transparency and Accountability 22 Dispute Resolution 23 Regional Disparity 24 Macro (national) vs. Micro (local) Issues 24 The Issue of Trans-boundary Projects 24 Shared Learning and Recommendations 25 Ministry of Local Development 25 Local Governments 26 Association of District Development Committee, Nepal 26 Ministry of Water Resources and Department of Electricity Development 26 Civic Movements, Social Auditors, Federations and Users Groups 26 Building on the Paradigm Shift as a Way Forward 27 Notes 28 References 30 v Recognising Entitlements and Sharing Benefits: EmergingEmerging TTrendsrends inin Nepal’sNepal’s HydropHydropowerower TTerrainerrain 1 Recognising Entitlements and Sharing Benefits: EmergingEmerging TTrendsrends inin Nepal’sNepal’s HydropHydropowerower TTerrainerrain Debates and Contestation In Nepal, the changes of 1990 indicated the possibility of a Water resources development in the 20th century has brought new beginning and indeed, the organic elements of tremendous well-beings. In many developed countries, democratic participation, such as freedom of press, water borne diseases have been drastically reduced. broadened legal protection of rights, viable opposition Electrification has resulted in multiple benefits, and the parties and competitive politics at the grassroots, were put development of irrigation was one of the factors that helped in place (Bissell, 2003). At the same time, domestic activism, build increased food security.1 The sharing of the benefits of which honed in on the question of benefits and risks from water development has, however, not been equitable. development projects also emerged. In a globalising world, Benefits have gone to some places, and to some people. Too civic activism transcends the nation-state, resulting in often those whose livelihoods depend on the water bodies trans-national alliances centred on water development from which benefits are generated have received very little projects.2 and, in some cases, nothing. Failure to provide clean drinking water and sanitation to every person on the planet It was in this social and political ferment that the debate is one manifestation of this inequity which Gleick (2004) about Arun III hydroelectric project, which had been in has termed the greatest failure of the 20th century. contention since the mid-1980s, took place. The World Bank withdrew support to this project in 1995. Arun III The assessment and allocation of benefits (who receives was one of three major projects debated in South Asia, the them) and risks (who pays the price) have been debated other two being the Sardar Sarovar Dam in India and the throughout the modern history of water development in Flood Action Plan (FAP) in Bangladesh (Dixit, 2001). The both developed and developing countries. These issues World Bank, which was behind their conceptualisation became one of the most fiercely fought political debates in as well, also stopped supporting both. These and other the last few decades of the 20th century. In the past, debates eventually contributed to the formation of the engineers and development professionals did not
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