Institution and Scale of Ecosystem Service Governance in Nepal a Case of Kulekhani Area 1

Institution and scale of ecosystem service governance in Nepal A case of Kulekhani Area 1. Navaraj Pokharel Prince of Songkla University Faculty of Environment and Energy , Thailand 2. Yogendra Raj Rijal Ph D. Parbat, Nepal

Abstract

New actors with different agendas and ideas are now emerging and playing important role in decision-making about ecosystem service governance. Network types of governance has been practicing in all sectors including in conservation. Awareness about key ideas of environmental governance or protection and use of natural resources among local people is the important concern today. Nepal's efforts in ecosystem service governance in the last three decades are noteworthy but the results are far from satisfaction. Coordination among various actors is the main problem in ES governance. Due to the lack of locally elected representative in Local Bodies (LBs) since before 15 years, coordination among actors and taking decision with strategic vision has some problems. Duplication in the use of resources is high, controlling and monitoring system is weak. Institutions are weaken and no more attention is given to rural people who are traditionally depend on natural resources for their livelihoods. This paper tries to explore the key environmental governance issues relevant to the conservation with specific reference to institutional fit and scale.

Key Words : ecosystem services, Kulekhaani, Watershed, Nepal etc.

1. Introduction

Ecosystem service governance is one of the major crosscuttings in contemporary development agenda. Significant efforts have been taken by the state and non-state actors to protect environmental elements in the world today. However, ecosystem services are becoming increasingly threatened globally.This trend is partially due to the lack of appreciation of their value. Resources that are not valued are often ignored in decision-making. Thus, people who are heavily depended to natural resources for their livelihoods are affected adversely all over the world.

'Governance' is about the process, norms, and traditions by which decisions on the public policies are made and implemented (Dahal, 2005). It is the result of action, reaction, interactions, and relationships, between the different sectors and actors (government, public sector, private sectors, and civil society).The relationships between government and different sectors determine how things are done, and how services are provided. Governance is, therefore, much more than government and shapes the way of providing services or set of services that are planned, managed, and regulated within a political, socio-economical, and environmental system. Whereasenvironmental governance is the broader process and institution through which societies are make decision that effect the environment and their livelihood. Thus, environmental governance or ecosystem service governance is a subset of the broader governance.

Benefits, obtain from ecosystems are defined as ecosystem services (Costanza & Liu 2014). Direct services to human beings and other living creatures such as food, water, air, medicinal plants; and indirect services such as air quality regulation, water purification, soil formation, and many others are possible only from ecosystem. Global consensus in the importance of biological diversity and its conservation has been developed in various forms as an important segments of governance and endorsed globally in numerous legal documents. Many ethnic groups and endangered nationalities are fully rely in nature. Special strategies are forming and implementing by considering such dynamics and diversities.But, peoples now are increasingly depended towards commercial products. Rapid urbanization responsible in some extend in reducing the appreciation of importance of nature and natural resources. And thus, valuation of ecosystem services is becoming one of the fastest growing areas of development intervention.The United States is dominated by private property regimes but China is dominated by state ownership. While Nepal has practicing both types. Implications of ecosystem services is the main thing rather than what types of regimes are practicing in conservation and deliver ecosystem services to the people residing in a particular area.

Market economy encourages government to turn resources over to the private sector. Lee (1987) and Costanza (1998) observed several problems in the management and conservation of natural resources. According to them mismatches between institutions which are responsible for manage them. Individual behaviors are inconsistent in the long-run with the global interest of the individual and society (Costanza, 1987). Multilevel approach in some extend in the world is adopted with the involvement of multi stakeholders to regulate services. Due to the lack of effective coordination among actors, multi-level approach is potentially high costs (Hooghe & Marks 2003). For this, Ruhl et al. (2007) suggest that a cure for the coordination problem is the development of appropriate institutions for coordination of ecosystem services and natural resources.

The Environmental Policy and Action Plan 1993of Nepal aims to manage natural resources efficiently, effectively, and sustainably;balance development efforts and environmental conservation for sustainable fulfilment of people's basic needs;safeguard national heritage; mitigate the adverse environmental impacts of development activities. After the declaration of"Environmental Policy and Action Plan 1993", Nepal has recognizing the value of protecting its natural resources. The provision of newly enacted, Constitution of Nepal 2015 is seems promising regarding to clean environment:

"Each person shall have the right to live in a healthy and clean environment". The victim of environmental pollution and degradation shall have the right to be compensated by the pollutant as provided for by law (article 30)".

Similarly, The State shall pursue the policy regarding the conservation, management and use of natural resources:

"The State shall pursue a policy of conserving the natural resources available in the country by imbibing the norms of inter-generation judicious use of it and for the national interest. It shall also be about its sustainable use in an environmental friendly way. The policy shall ensure the fair distribution of the benefits generated by it by giving local people the priority and preferential rights… (article 51)".

Nepal is a signatory or party of various environment-related conventions and is obligated to fulfil its commitments at national and global levels. Seriousness of its commitments to these conventions has been demonstrated over the past 10-15 years.Various efforts so far have been made by government of Nepal but results are not satisfactory. Along with this above stated situation, answer of the following questions are tried to explore: What is the position of ecosystem service governance in Nepal? What are the main constraints and challenges for effective governance of ecosystem services?

2. Study area and methodology

This study is mainly based on qualitative and an empirical study. It is a fact-finding operation or searching for adequate information about ecosystem service governance and it was conducted with the use of simplemethod.

Kulekhani watershed area of Makwanpur district of Nepal was selected for this study. It is lies in the 40 KM north of Makwanpur district or south west part of capital city. The rationale for selecting this site is the operation of Kulekhani Hydro Electricity Project one of the largest hydro power projects of Nepal lies in this area. This project was completed before 33 years by making dam in Kulekhani stream. 4 KM long lake was made in this river which is called "Indra Sarobar". 69 MW electricity is producing mainly in dry season from this projects. One municipality and 9 VDCs are considered as the mostly affected area of this project: Bhainse, Bhimfedi and Nibuwatar are lies in production, Kulekhani and Sisneri are in downstream and Markhu, Fakhel, Chitlang, Tistung and Thaha Municipality are lies in upper stream.Around 70,000 people resides in this area and majority of them are from Janajati (Tamang) community.

2.1 Methods

Simple structured questionnaire (annex three) were used to generate fresh information from local people. Qualitative method is used more, rather than quantitative method as per the nature of the study.10grass roots level government bodies (9 VDCs and 1 municipality) were consulted to obtain fresh information. Thus, the unit of the study at the micro level were the VDCs and municipality. But discussion was also held in District Development Committee to shape the study. Similarly, people's observation regarding the ecosystem services receiving from this area and role of concerning authorities and actors were also acquired.Secondary dataare also used for conceptual clearance and shaping the primary information. The major source of secondary information comprising relevant literature/documents published or unpublished books, LBs reports, research reports, seminar papers, academic and professional journals, newspapers, and news magazines were studied and analysed.

Similarly, standardized checklist(annex four) was framed and used to obtain information from various institutions (local bodies, Nepal Electricity Authority, private sectors etc.) and completed through interviewing the sampled institutions. Likewise, an informal and formal talk and consultation was done with the agencies/stakeholders or local key persons (former Chairperson of concerned VDC) who are directly or indirectly involving to protect Kulekhani watershed.

3. Discussion

Findings of the discussion are mentioned hereunder in different points and details of this is mentioned in annex five:

A. Environment management role, responsibilities and its appropriateness

Each LBs have one 'forest and environment' committee(article 47, 117 and 193 of LSGR, 2000). LSGR provided roles and responsibilities to each LB in regards to forest and environment management. Environment management policies of LBs are usually reorganize each year. Various policy documents such as: District Development Plan, District Tourism Master Plan (DTMP) and Transport Master Plan are enforced and they have their own policies and priority in environment management sector. Kulekhani area development committee is active in this area with the support of various development partners. Similarly, various NGOs, CBOs, user groups and interest groups have their own policies and priorities to protect environmental elements and they are seen appropriate to local needs. More than thirty-five (35.4) per cent people observed such arrangements and division of responsibilities is appropriate. Twenty-seven (27.1) per cent said it is good and around nineteen per cent claim it is poor.

B. State of coordination and major challenges

More than dozen institutions are active and spent millions of rupees in the name of protection and promotion of environment in Kulekhani area. But they have ambiguous roles and responsibilities. Environmental elements are degraded, heavy equipment such as dozers and excavators are using heavily in making rural road, due to this siltation in reservoir (Indrasarobar) is one of the main challenges. There is a problem of effective coordination among stakeholders. Leading agencies are LBs which have no elected representatives and they are almost failed to coordinate different interest groups and stakeholders at local and district level. Most of the areas are banned for open grazing, collecting fire wood and fodders from forest and farmers are facing problem in their daily life in the name of protection. But achievements in protection or management of watershed are far from satisfaction. Twenty-five per cent respondents observed that the state of coordination is very poor and just over twenty-seven (27.1) per cent said it is poor. It means major parts of respondents claim that it is poor and just around twenty-nine per cent respondents said it is good.

C. Methods of biodiversity conservation adopted and its appropriateness

Open grazing, using heavy equipment while constructing infrastructure project is restricted, bio engineering technology is adopted while making rural roads, Environment Management Plan (EMP) is making by all projects, and there is a provision of allocating hydroelectricity royalty in 4

environment protection sector by local bodies in policy documents and decisions. All decisions are documented with the due respect of 14 step planning process of LBs. But all these efforts are not sufficient. By the discussion it can be concluded that the main problem for this poor performance is fiduciary risks (process, result, and corruption). LBs are the leading agencies but they are very weak, Result Base Monitoring (RBM), and Annual Monitoring and Evaluation Plan (AMEP) is also talking much somewhere in policy documents but they are remained just in words. Respondents were asked how can you judge the appropriateness of biodiversity conservation method. More than thirty-five (35.4) per cent observe that it is very poor and over twenty-nine (29.2) per cent claim it is poor. Just around seventeen per cent respondents said it is good. Thus, it can be concluded that mobilized resources are effective in protecting and using of environmental resources by local people.

D. Public response regarding to bearing accountability by stakeholders

Responsive, responsible and accountable local institutions is one of the felt needs to achieve better result in each sector. Accountability in all local concerns is provided to LBs with authority and autonomy by LSGA, 1999. Fund also increased to LBs but problem remain in their capacity. More resources is mobilized through non-state actors in this sector in Kulekhani area but their efforts are not seen meaningful due to the lack of monitoring and controlling mechanism. Institutions are weaken, ethical value is reducing and corruption is increasing in all sectors. Rights are claiming by everybody but they are not found more responsive in their responsibility. Due to such conditions accountability in regards to environmental management in Kulekhani area is not satisfactory. While asking to respondents, more than twenty-seven (27.1) per cent opined that state of bearing accountability is very poor and more than thirty-five (35.4) per cent claimed that it is poor. Just around nineteen (18.8) per cent observed it is good. Various policies and project documents were developed, large sum of money is mobilized by both state and non-state actors in this area with the high priority for protecting one of the largest hydroelectricity projects of Nepal.

E. Overall judgements

Local people have no easy access in environmental elements for their grocery types of needs such as: fire wood, fodder, wood and other non-timber forest protects. No more attention is given in what extend people are benefited and satisfied with the protection efforts of various actors. There is just above four (4.2) per cent respondents are judge that efforts and results are very good. Around 15 per cent said that it is good and around 19 per cent people claim that it is satisfactory. But more than 62 per cent people are not satisfied about the efforts and results. More than 35 per cent people observe it is very poor, it is the very important and considerable figure in this regards.

It can be concluded that, no people are directly benefited as resource mobilized in this sector. Rural livelihood is directly depend on environmental element more specifically in forest sector but farmers have no easy access in protected area, they only enjoying in electricity facility available to them.However, power producing capacity is threatenedin this plant due to siltation problem in reservoir.

4. Major findings

Institutional and regulatory efforts in Nepal towards the conservation of natural resources and management of environmental issues and challenges have had little impact due to the different factors and constraints discussed above. The underlying reasons for poor environmental governance can be better understood by reassessing environmental performance to date and identifying areas where changes are needed. a. Socio-economic factors

Nepal's poor record on the environment stems from the fact that Nepal is a country in transition with a poor economy and is confronted by many other major challenges of infrastructure development. The continuing political instability and massive poverty are adversely impacting both national economy and environment. Poverty is forcing poor people to indiscriminately use and overexploit natural resources for daily survival. Frequent changes in governments, lack of elected local bodies for prolonged periods have all contributed to undermining environmental management at all levels that have severely undermined progress in ES governance. b. Under-funded environment and natural resource mandates

Public sector institutions such as ministries, departments, and corporate bodies are short of technically skilled human resources specialized in the various environmental fields. Lack of basic facilities to execute their mandates, research facilities, and laboratories needed for environmental database monitoring. This situation has made environmental institutions dependent on external facilities. For example, MoPE, even after 15 years of existence, did not have a laboratory of its own for emission testing of vehicles and depended on the facilities available with the traffic police office. Local government bodies at the district and village levels also need technical staff, facilities, and funding, without which they cannot execute their mandated environmental activities. The same situation with respect to instrumentation and staff prevails among NGOs and the private sector. Lack of logistical support has prevented agencies concerned from making field trips to project sites to carry out environmental surveillance and monitoring activities. c. Conflicting and overlapping mandates

Conflicts and problems are frequently observed due to overlapping mandates. There is a strong need to review all existing sectoral environmental legislation and harmonize it. For instance, the National Parks and Wildlife Conservation Act 1973, amended in 1993, prohibits any outside interferences in projects undertaken in protected areas. While MoFSC cannot overrule the park management, this legislation nevertheless conflicts with MoFSC's mandate to oversee all forest administration. Similarly, if in trying to fulfil its mandate as the overseer of all forests, MoFSC undertakes projects in protected areas, these can be prohibited by park authorities. Other conflicts over forested areas arise from the fact that under Environment Protection Act, Rules, and MoFST can declare certain forested areas to be conservation areas. MoFSC has the same mandate under the Forestry Act. d. Lack of effective participatory actions and coordination

Although government policies and plans commonly advocate the need for greater participation and collaboration among the public sector, local NGOs, communities, and user's groups. But it is hardly seensatisfactory progress in this direction. While it is commonly acknowledged that the participation of all of these groups is a prerequisite to securing holistic support, timely delivery, and continued implementation of almost environmental programme, this advice remains largely unheeded; moreover, the will to secure this common participation needs promoting. People's participation is not improved as envisage, there is a massive problem in coordination and reducing duplication in resource mobilization. LBs are leading agency in local concern but they are very poor in capacity and unable to maintain accountability.

e. Difficulties in utilizing donor support

As government's allocations are admittedly marginal, thus environment management in Nepal has been essentially donor-driven and this situation has occasionally led to difficulties. It is often felt that development partners could spend more time interacting with the government to better understand Nepal's needs and priorities since it is always useful to harmonize with government priorities. In more case international development partners often apply common models for all member countries when formulating their programmes, whereas local socio-economic and environmental conditions can vary considerably. Both sides have recognized that more face-to -face interactions between the government and development partners. Another common complaint is that the government's lack of coordinating capability has often led to duplication in selection and implementation of projects not only at local but also in central. f. Legislative system and institutional capacity

Numbers of environmental acts and regulations have been promulgated during the last 15 years to facilitate environmental plans and programmes, but these have had only limited success. These legislation now needs to be updated and amended to make it more responsive to the present requirements of complex environmental concerns and rigorously enforced. In addition, new regulations are needed to help Nepal take full advantage of membership of WTO. A strong institutional base is needed to monitor and back up the legal instruments applied to environmental conservation. In many cases,enforcement of law is thwarted due to poor institutional infrastructure, lack of institutional decentralization, or the constant shifting of responsibilities from one institution to another resulting no one institution taking up the task at hand. A strong, transparent, and effective monitoring system that can support proper enforcement is lacking. g. Use of hydroelectricity royalty

DDC Makwanpur gets hydroelectricity royalty each year which is shared by central government among local bodies as per revenue sharing provision of LSGR, 2000 (Rule 220). It has 35 VDCs, one Sub Metropolitan City (Hetauda) and one municipality (Thaha). Twelve VDCs out of 35 are lies in this area or around 1/3 local bodies of the district are directly affected by the Kulekhani I project or watershed area.

Table 6: Hydroelectricity royalty received by DDC from GoN and sharing it to other LBs

Revenue received by Amount received by Revenue received Revenue Fiscal year affected VDCs in each affected VDCs by DDC in NRs 000 received in % NRs in NRs 000 2008/09 25,870.00 5,174.00 20.00 431.17 2009/10 22,300.00 4,460.00 20.00 371.67 2010/11 31,485.00 6,297.00 20.00 524.75 2011/12 32,063.00 6,413.00 20.00 534.42 2012/13 23,321.00 6,200.00 26.59 516.67 2013/14 27,000.00 5,600.00 20.74 466.67 2014/15 78,100.00 20,000.00 25.61 1666.67 Source: DDC report, 2016

Table 6, shows the status of hydroelectricity revenue received by the DDC in seven consecutive FY and sharing it to VDCs and municipalities. According to this table around 22 per cent total revenue is distributed to affected area where physical coverage of that area is more than 33 per cent. More fund is allocated repeatedly to other areas. This trend shows prejudice to the people and it is against to the policy of giving priority to affected areas. Now DDC Makwanpur, has developed formula to distribute such royalty among local bodies (see please, index in annex one). Whatever fund they received is not mobilized in environment sector. Study report of Local Body Fiscal Commission 2014 shows that LBs of Nepal usually spent 62 per cent of their capital budget in making rural road and just 3.29 per cent is used in forest and environment sector. The situation is about to same in Kulekhani area. Local body should be serious about the allocation of more fund received in the name of hydroelectricity royalty but environment management plans for watershed area is never in priority. More resources is mobilizing now in constructing rural road without paying more attention towards its negative effects in nature in general and Kulekhani watershed area in specific.

5. Conclusion

This review has provided an overview of prevailing situation regarding environmental governance in Nepal with the specific case of Kulekhani hydropower project area. Nepal has been given high priority to the environmental governance since last two decades particularly after Earth Summit. Nepal is a party to multilateral Environmental Agreements in solidarity with the international community. These Conventions and Agreements carry certain obligations. Therefore, Nepal has found already completed or is working in strategies, actions plans, acts and regulations to meet these obligations but these have not been overwhelmingly sufficient enough and whatever acts and regulations are in practice are not effective.

Policies themselves are unable to address cross-cutting issues due to continuing interference by political parties, the inability of national level advisory bodies to function properly, and the inability of the policy level institutions in proper implementation. Key national agencies like the NPC and sectoral ministries have not been proactive in implementing approved policies and programmes, coordination among line ministry and other agencies is rarely found and the government has failed to attract the participation of the private sector in this sector. In spite of the problems and challenges facing by Nepal in this regard, the initiatives taken by it are seem crucial towards achieving the goal of sustainable development. 8

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Annex one: Revenue sharing indexdeveloped by DDC Makwanpur among VDCs and Municipalities

Budget on Budget on Budget on Total including SN VDC Name pop weighted poverty area fixed 1 Agara 1.63 0.39 0.21 3.09 2 Ambhanjyang 1.43 0.24 0.21 2.74 3 Betini 0.70 0.16 0.35 2.06 4 Bhanise 1.39 0.36 0.32 2.94 5 Bharta Punyadevi 0.86 0.22 0.15 2.09 6 Bhimfedi 1.13 0.16 0.23 2.38 7 Budichaur 0.43 0.07 0.14 1.50 8 Chitlang 1.04 0.12 0.17 2.19 9 Dandakharka 0.83 0.20 0.19 2.08 10 Dhiyal 1.23 0.29 0.55 2.92 11 Fakhel 0.94 0.11 0.18 2.08 12 Faparbari 3.48 0.81 0.73 5.88 13 Gogane 1.11 0.27 0.31 2.54 14 Handikhola 3.82 0.50 0.55 5.73 15 Ipa Panchakanya 0.52 0.08 0.20 1.65 16 Kalikatar 0.98 0.25 0.18 2.27 17 Kankada 1.63 0.60 0.40 3.48 18 Khairang 0.70 0.16 0.22 1.94 19 Kogate 0.27 0.04 0.12 1.28 20 Kulekhani 0.62 0.07 0.11 1.65 21 Makwanpurgadhi 2.66 0.45 0.29 4.25 22 Manahari 4.15 0.69 0.48 6.17 23 Manthali 0.57 0.12 0.10 1.64 24 Markhu 0.64 0.07 0.08 1.65 25 Namtar 1.83 0.47 0.48 3.64 26 Nibuwatar 0.88 0.13 0.15 2.02 27 Raigaun 2.15 0.50 0.56 4.06 10

28 Raksirang 1.36 0.50 0.25 2.98 29 Sarikhet 1.74 0.29 0.30 3.19 30 Shikhapur 1.22 0.25 0.21 2.54 31 Shreepur Chhatiwan 4.30 0.88 0.84 6.88 32 Sisneri 0.67 0.08 0.13 1.74 33 Sukaura 0.73 0.12 0.13 1.84 34 Thingan 0.89 0.18 0.34 2.27 35 Tistung 1.46 0.15 0.17 2.63

Annex two: The key environment-related policies and strategies introduced in Nepal to date and major achievements in this sector: National Conservation Strategy 1988 Industrial Policies 1992 Nepal Environmental Policy and Action Plan 1993 Tourism Policy 1995 Solid Waste Management Policy 1996 National Water Supply Sector Policy 1998 Revised Forest Sector Policy 2000 Hydropower Development Policy 2001 Nepal Biodiversity Conservation Strategy 2002 Leasehold Forestry Policy 2002 National Wetland Policy 2003 Water Resources Strategy, Nepal 2002 Irrigation Policy 2003 Sustainable Development Agenda for Nepal 2003

Annex three: Questionnaire

1. How can you judge about the division of role and responsibilities among stakeholders in environment management of Kulekhani watershed area and its appropriateness?