THE REQUEST
The Request for Inspection was submitted on October 18, 2021, by 49 community members living in the Project area in Nepal. On November 17, 2021, the Panel received a letter signed by 51 community members designating an advocate from the Lawyers’ Association for Human Rights of Nepalese Indigenous Peoples (LAHURNIP) to represent them. The Requesters asked the Panel to keep their identities confidential. On November 30, 2021, the Panel registered the Request.
The Request related to the construction of a 74-kilometer transmission line financed by the Project between Bharatpur in India and Bardaghat in Nepal—in particular, the section in Binayi Triveni Rural Municipality Ward No. 2, approximately 200 kilometers west of Kathmandu. The Requesters alleged that the transmission line had been rerouted to pass through their densely populated community of indigenous and non-indigenous residents. They claimed they were neither meaningfully consulted nor provided any information about the Project and alleged that the line’s alignment adversely affected homes, schools, cultural and religious sites, agricultural lands, the environment, and economic activities, and threatened their health and safety. The Requesters were concerned about land acquired for the tower pads and a 30-meter-wide RoW easement along the transmission line corridor. The Requesters contended that the proposed transmission line would adversely affect their ability to maintain and improve their livelihoods, and would prevent them from using land within the RoW as collateral for loans. The Requesters also claimed that they had been unaware of a functioning Grievance Redress Committee to which they could address their complaints. They alleged instances of violence and retaliation in response to a peaceful protest opposing Project works, claiming authorities had deployed armed forces that used tear gas and physically assaulted community members, injuring some women, senior citizens, and a toddler.
MANAGEMENT RESPONSE
The Management Response explained that the planning and original alignment of the Bharatpur–Bardaghat transmission line began more than 20 years ago and that many of the problems and conflicts raised in the Request were legacy issues. Management stated that it had been aware of these concerns well before the Request was submitted to the Inspection Panel and had worked with the Nepal Electricity Authority (NEA) to help address them. The Response noted that due to various factors—such as a delay in obtaining forest clearances, disagreements between the Contractor and NEA, the political situation, and disputes with local landowners—the transmission line was incomplete when the Project closed on October 31, 2021. Management stated that the disputes were the subject of a court case filed by landowners in April 2021 that led to an interim injunction that had halted tower construction pending the court’s review and decision. According to Management, it was unclear when the court would decide the matter.
Management noted that the Bank had repeatedly asked NEA to seek an amicable resolution to the disputes, and that NEA had complied with the Bank’s request and refrained from using eminent domain to acquire the land without first trying to reach an agreement. Management also noted that NEA intended to continue negotiating a compensation package with the affected landowners pending the outcome of the court case. The Response noted that the Project had closed on October 31, 2021, and that the Bank had agreed on an action plan with NEA to address finalization and implementation of the RAP and to implement a communications plan. Management explained that this action plan—the “Post-Closure Safeguards Rectification Measures” —contained detailed, timebound actions to which NEA had committed. The Response noted that Management had reminded the Borrower that, notwithstanding the Project’s closure, RAP finalization and implementation consistent with Bank policy remained an obligation and that the Bank would continue to follow up with the Borrower on this and other aspects of implementing the post-closure action plan. Management explained that it had no prior knowledge of the reported use of force at the Project site and that it had raised the matter with the Government. Management requested that all Project activities cease to help calm the situation, and communicated to the Government that project-affected persons(PAPs) should be able to engage freely in consultations and express their grievances.
PANEL RECOMMENDATION/BOARD APPROVAL/REFERRAL TO DISPUTE RESOLUTION
A Panel team, following strict COVID-19 protocols, visited Nepal in January 2022, to inform its eligibility assessment. The Panel noted that the Requesters did not oppose the Project but were concerned that the alignment of the proposed transmission line would cause them harm. They believed the Project had inadequately assessed alternative alignments that would have avoided human settlements. The Panel noted Management’s acknowledgement that most of the allegations in the Request were already known and that Management had worked with NEA to help address them. The Panel noted its understanding that the Requesters had declined to engage with the Project team and NEA, as they distrusted the process and opposed the present alignment. The Panel also noted that, in April 2021, the Requesters had filed a case against the current routing of the transmission line with the Supreme Court of Nepal, which issued a stay order suspending construction of the remaining works. The Panel understood that the Project’s engagement with the community was on hold pending the outcome of the Supreme Court case, the timing of which was unknown.
During its assessment phase, the Panel noted that the action plan agreed between the Bank and NEA could have addressed some of the Requesters’ concerns, if successfully implemented. However, the Panel could not confirm the adequacy of these actions or whether the Bank had complied with its policies and procedures. The Panel noted that the harm alleged due to non-compliance by the Bank with its operational policies and procedures was of a serious character.
In its February 16, 2022, Report and Recommendation to the Board, the Panel recommended an investigation. It noted the conflicting assertions between the Requesters and Bank Management, and concluded that without an investigation it was not possible to assess whether Management had appropriately addressed the issues raised and sufficiently demonstrated that it had followed Bank policies and procedures, or whether Management’s proposed actions adequately addressed the matters raised in the Request. On March 3, 2022, the Board approved the Panel’s Recommendation to investigate.
DISPUTE RESOLUTION PROCESS
On March 6, 2022, the AM Secretary offered the Requesters and the Government the option to voluntarily participate in a dispute resolution process facilitated by the AM’s DRS. In accordance with AM procedures, the parties were given 30 days to decide whether to opt for dispute resolution. The parties accepted the offer, and this was reported to the Board on April 12, 2022, marking the start of the dispute resolution process. After one year of engagement, the parties signed a Dispute Resolution Agreement on April 11, 2023. At the request of the parties, DRS is now monitoring the implementation of the commitments undertaken as part of the mediation agreement. Learn more about the dispute resolution process here.
PANEL CLOSING MEMORANDUM
On April 20, 2023, the AM Secretary issued a Notice of Dispute Resolution Agreement (the “Notice”) stating that the dispute resolution process concluded on April 11, 2023, with a signed agreement. According to the Notice, the signatories have stated that an agreement was reached in full and final settlement of their dispute. The Notice annexed an Outcome Report, which stated that the Parties have exercised the option to keep their agreement confidential and that the Accountability Mechanism will thus treat the agreement as confidential and shall not publish it. The Outcome Report explained that 33 of the 48 signatories to the Request signed the agreement, four did not participate in the process as they had already received compensation, two did not participate or sign as they live abroad, and nine signatories to the Request—members of the same family—decided to leave the dispute resolution process and not sign the agreement. The Outcome Report also stated that 30 other community members had joined the process and signed the agreement, bringing the total number of signatories to 63.
Since the Parties reached an agreement through dispute resolution, the Panel issued a memorandum closing the case on April 27, 2023, and took no further action.
Learn more about the case here.