Dr

Special Bulletin of Narcotics Control Bureau published on the occasion of the United Nations’ International Day Against Drug Abuse and Illicit Trafficking

Problems in Nepal

A crime is principally said to be a wrong committed against society either by an overt act, omission or neglect and could result in punishment. A person who has violated a law, or has breached a rule, is said to have committed a criminal offense. Every crime has a victim who suffers some harm at the hands of the offender – be it physical, financial, psychological or emotional. Drug smuggling is a crime. It is prohibited by law. This crime also has victims. 

The narcotic drug related legal regime in Nepal is built under the provisions of Narcotics Drug Control Act 1976.  Under this law, the cultivation, production, preparation, manufacture, export, import, purchase, possession, sale, and consumption of most commonly abused drugs is illegal. The Act has already been amended several times. The amended version of the Act is informed by UN Convention on Narcotic Drugs 1961 as amended by the protocol of 1972. Nepal is also a party to United Nations against illicit trafficking of narcotic drugs and psychotropic substances of 1988. The country has consistently devised and implemented national policy on drug control. The drug administration has been regularly strengthened. The regime that has been prohibits, except under license, the production, supply, and possession of many, but not all, substances which are recognized as drugs, and which corresponds to international treaty commitments in the Single Convention on Narcotic Drugs 1961, the Convention on Psychotropic Substances 1971, and the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances 1988. Drug prohibition law is based on the view that some drugs, notably opium poppy, coca, and substances derived from these plants, are so addictive or dependence inducing and so dangerous, in terms of potential effects on the health, morality and behavior of users, that they should be rarely, if ever, used.

Despite the legal regime in place, and supposedly functioning drug administration, Nepal continues to deal with challenges in this sector. Every year there are numerous cased of violation of the drug prohibition law. There is an illegal trans-national industry supplying prohibited drugs for recreational use.

One of the problems in the enforcement of drug prohibition law is created by diplomats, or presumed diplomats, who claim diplomatic immunity on finding the violation of the drug prohibition law. Their institutions, particularly the friends and colleagues working there, very often insist on immunity. There is always a vague understanding among the ordinary people about the concept of diplomatic immunity. Movies like Lethal Weapon 2 have made apparent the ills relating to abuse of diplomatic immunities in the society. This movie, for example, features evil diplomats who use their immunity as a “Get Out of Jail Free” card subsequent to committing crimes such as murder, rape, drug and firearm trafficking.

Complexities surrounding Diplomatic Immunity

Diplomatic immunity is an established norm in the international relations. This norm has been institutionalized by the Vienna Convention on Diplomatic Relations of 1961. It defines a framework for diplomatic relations between independent countries. The framework specifies the privileges of a diplomatic mission that enable diplomats to perform their function without fear of coercion or harassment by the host country. This forms the legal basis for diplomatic immunity. This immunity limits the degree to which foreign government and international organization officials and employees are subject to the authority of police officers and judges in their country of assignment. In reality, this immunity is granted to keep diplomats from being harassed while they do their work in unfriendly nations. It makes sense. The question, however, is whether, a person who has been caught with drug smuggling in the host country mean that an official with diplomatic immunity, as is often assumed, can get away with anything? Not exactly.

At this juncture, it has to be noted that most diplomats are courteous law abiding citizens of the sending country dedicated to upholding the integrity of their missions in the host country. In most cases, the diplomats respect and follow the rules and regulations of the host nations. For centuries, diplomats have played a vital role in establishing ties between nations, ending wars, providing relief aid, financial assistance and bridging the gap between diverse cultures. As per the current regime, diplomats, their families, and staff are granted exemption from arrest or detention by local authorities (Art. 29); their actions not subject to civil or criminal law. However, as there are two sides to coin, the Vienna Convention allows for an incredible amount of personal liberties to the diplomats which can be easily abused. Furthermore, judging by past cases, the ratio of abuses such as drug trafficking, kidnapping, rape, and murder is on the rise.

There are cases aplenty of widespread abuses from the diplomats in their respective host nations which yielded no punishment from either the host nation or the sending nation. For example, the Venezuelan General wanted in the United States for drug charges was arrested in Aruba. However, following the Venezuelan government’s protestation of his diplomatic immunity, he was subsequently released. Similarly, in 1984, an Egyptian foreign minister’s bag in Rome was discovered illegally smuggling a drugged Israeli citizen. The Israeli citizen was subsequently released and no action was taken due to diplomatic immunity. Similarly, in 1976, North Korean diplomats were caught in Norway smuggling marijuana. However, no action was taken due to diplomatic immunity. There are other reports of widespread abuses which have highlighted the rapidly degenerating nature of this, once negligible, problem. In favor of diplomatic immunity, experts often cite extraterritoriality and functional necessity as justifications. Be that as it may, it has become increasingly apparent that viable solutions to the problems are needed.

In light of this, let us now focus our attention to the possible avenues, both the host country and the sending country can use, in situations when a diplomat is arrested for committing a crime. The first option, as per Article 32 of Vienna Conventions, is to request a waiver of the diplomatic immunity from the sending country. This will then allow the host nation to prosecute the diplomats. Second option is to declare the diplomat in question “persona non grata” (unacceptable). This forces the sending nation to either recall the diplomat or terminate his/her appointment altogether. The third option, albeit extreme, is to severe all diplomatic ties between the respective nations. All three avenues are problematic. A sending country is often highly reluctant to waiver the immunity amidst fear of loss of reputation whilst the second and third options are impractical in the 21st century as rejection of diplomatic mission causes unwanted tension.

So, what can be done to solve this widespread abuse? Well, there have been discussions in the international community about various proposals to reform the status quo including insurance policies and establishment of claims fund. However, these ideas are geared more towards remunerating the victims of the crime than punishing the perpetrators. Another alternative proposed is the idea of an International Diplomatic Court to oversee matters pertaining to abuses of this kind. This too has been quashed as a highly ambitious and unattainable proposal. There are inherent problems with establishing an International Diplomatic Court including getting the perpetrator to appear in court, finding an appropriate unbiased jury, ascertaining the universality among diverse state practices to the management of infrastructural resources. 

Exceptions to the Vienna Convention?

Some countries have made reservations to the Vienna Convention on Diplomatic Relations, but they are minor. A number of countries limit the diplomatic immunity of persons who are citizens of the receiving country. As nations keep faith to their treaties with differing zeal, other rules may also apply, though in most cases this summary is a reasonably accurate approximation.[5] The Convention does not cover the personnel of international organizations, whose privileges are decided upon on a case-by-case basis, usually in the treaties founding such organizations. The United Nations system (including its agencies, which comprise the most recognizable international bodies such as the World Bank and many others) has a relatively standardized form of limited immunities for staff traveling on U.N. laissez-passer; diplomatic immunity is often granted to the highest-ranking officials of these agencies. Consular officials (that do not have concurrent diplomatic accreditation) formally have a more limited form of immunity, generally limited to their official duties. Diplomatic technical and administrative staff also have more limited immunity under the Vienna Convention; for this reason, some countries may accredit technical and administrative staff as attaché.

Other categories of government officials that may travel frequently to other countries may not have diplomatic passports or diplomatic immunity, such as members of the military, high-ranking government officials, ministers, and others. Many countries provide non-diplomatic official passports to such personnel, and there may be different classes of such travel documents such as official passports, service passports, and others. De facto recognition of some form of immunity may be conveyed by states accepting officials traveling on such documents, or there may exist bilateral agreements to govern such cases (as in, for example, the case of military personnel conducting or observing exercises on the territory of the receiving country).

Formally, diplomatic immunity may be limited to officials accredited to a host country, or traveling to or from their host country. In practice, many countries may effectively recognize diplomatic immunity for those traveling on diplomatic passports, with admittance to the country constituting acceptance of the diplomatic status.

Strictly speaking, the principle of diplomatic immunity does not apply to all foreign government or international organization officials and employees. When it does apply, it applies differently to different categories and subcategories of such persons and their families, dependent on circumstances.

(Note: Diplomatic immunity is also to be distinguished from “sovereign immunity,” which applies to the person and property of foreign governments themselves and is not discussed in the present article.)

Diplomatic Immunity for Embassy Personnel

Diplomatic agents – that is, high ranking embassy officials (ambassadors, for example) who serve the function of dealing directly with their host country’s officials on behalf of their home country – enjoy the highest degree of immunity. The same applies to their family members.

The police cannot detain them, arrest them, or search or seize their houses and other property. Diplomats cannot be prosecuted or otherwise forced to appear in criminal court. Nor can they be sued in civil courts, except for their personal (non-official) involvement in certain commercial, real-estate, or inheritance-related matters, or for their separate professional activities.

So, for example: An ambassador who is sued for failing to pay her personal home mortgage premium may lose title to her house but may not be forced to pay damages and may not be evicted.

A second category of embassy personnel, the administrative and technical staff (secretaries, for example) who directly support diplomatic activities, enjoy the same immunity from police actions and criminal courts, but a lesser degree of immunity from civil courts. They can be sued like anyone else, except for acts performed in connection with their official function. (No such exception applies to their family members.) Accordingly, an embassy secretary who fails to pay his personal home mortgage premium may not only lose his title but also be sued for damages – though he may not be evicted.

Yet other embassy employees (chauffeurs, for example), who only indirectly support diplomatic activities, enjoy the lowest degree of immunity. They have (either criminal or civil) immunity only for acts performed in connection with their embassy role. Their family members enjoy no immunity at all.

There are exceptions. In rare cases, both the second and third categories of embassy personnel above may enjoy as much immunity as diplomatic agents. But this only happens when the home country and the host country enter a special agreement (or treaty) for that purpose. Moreover, home country governments can waive diplomatic immunity.

Finally, no immunity applies to embassy employees (or the family members of such employees) who are nationals or permanent residents of the host country.

Diplomatic Immunity for Consular Personnel

Consular personnel generally enjoy less immunity than embassy personnel.

Consular officers (career consuls and other foreign government officials responsible for issuing travel documents, promoting commerce or tourism, and similar functions) enjoy full immunity for acts performed in connection with their official function. However, they are otherwise fully subject to criminal prosecution, except that they may be detained only in felony cases. (No such exception applies to their family members, who enjoy no immunity at all.)

Their property can be searched by police officers. They can also be sued like private citizens – although they are prohibited (by international law) from engaging in commercial or professional activities outside their official functions.

Consulates’ administrative and technical staff are not prohibited from engaging in commercial or professional activities outside their official functions. However, they enjoy immunity only for acts performed in connection with their official functions.

Other consular employees enjoy almost no immunity, except that they cannot be forced to appear as witnesses in court for purposes of providing evidence about official consular affairs.

Here again, there are exceptions. Consular personnel may acquire almost as much immunity as diplomatic agents based on a special treaty between their home country and their host country.

No immunity applies to consular personnel who are nationals or permanent residents of the host country, except that honorary consuls enjoy immunity for acts performed in connection with their official functions.

Diplomatic Immunity for International Organization Representatives and Personnel

Interestingly, international law is often less important than national laws when it comes to defining the immunity of representatives and personnel of international organizations such as the United Nations or the International Monetary Fund.

Under U.S. law, high-ranking international government representatives (members of national missions who are assigned to international organizations) usually enjoy as much immunity as diplomatic agents, while all other national mission staff enjoy immunity only for acts performed in connection with their official functions.

Similarly, most international organization personnel enjoy immunity only for acts performed in connection with their official function, while some (but not all) high ranking officials may sometimes enjoy almost as much immunity as diplomatic agents. For example: the Secretary General of the United Nations enjoys full diplomatic immunity, but the Director of the International Monetary Fund (as we saw in the case of Dominique Strauss-Kahn in 2011) does not.

What Diplomatic Immunity Does Not Mean

Diplomatic immunity does not mean that its beneficiaries can do whatever they want and get away with it. Police officers are allowed to disregard it whenever necessary to prevent a grave crime or an imminent danger to public safety.

In cases of traffic violation, even though diplomatic vehicles may not be impounded, police officers are still allowed to issue citations, and host governments may suspend driving privileges.

In addition, host countries can request that home countries waive a crime suspect’s immunity. In the alternative, host countries may expel the suspect from their territory.

Finally, especially when the principle extends only to acts performed in connection with official functions, it is important to note that it is host country judges themselves who get to define the limits of immunity.

2017-09-13 

Welcome Note

Dr Bipin Adhikari

Dear President Ik Hyeon Rhee of Korea Legislation Research Institute 

Dear representatives of ALIN members 



Ladies and Gentlemen 



Good morning! 



It is wonderful to receive you all in Kathmandu today to take part in this year’s ALIN General Meeting and International Conference.



Kathmandu is one of the most historical cities in the Himalayan region. Now is a pleasant time for visitors to see this lively city from different perspectives. The air is fresh from the rainy season having just come to an end. The hills and fields around us are lush, green, and beautiful, and the sky is clear and blue. Rivers and streams are still swelling, and Nepal’s festival season has just begun. You are some of the early birds in Kathmandu for this tourist season that will get a chance to observe the beautiful majesty of Nepal that the autumn and following winter bring. I am honored to welcome you to Kathmandu city – the pride of our civilization – for the ALIN General Meeting and International Conference. 



I hope that most of you have had an opportunity to visit some sites and scenes in the Kathmandu valley. If you have not yet, do not worry, for there is a three-hour tour waiting for you tomorrow. Those of you who have extended your stay beyond the AILIN forum, this three hour trip could be a prime opportunity to explore the culture and heritage of the Kathmandu Valley. 



The Kathmandu University has its main campus on the outskirts of the Kathmandu valley. It is 30 kilometers away from here. The School of Law sits on a small hill very close to the main campus. Our University is a young university and just celebrated its silver jubilee last year. The School of Law is the youngest school and only in the fourth year of its academic calendar. As a new sect, the School of Law concentrates on interdisciplinary studies of law, focusing on research in areas like corporate law, trade, investment, intellectual property and energy, and infrastructure law. Our undergraduate legal studies programme is an integrated Bachelor of Business Management & Bachelor of Law (BBM,LL.B), that aims to generate human resources that can support the development and reconstruction of Nepal.



As the Dean of the School of Law, I am very pleased to see the 2017 General Meeting of ALIN members being held in our capital city. I welcome you all wholeheartedly. ALIN has a noble objective for this region, that of creating a network of legal experts to work on common issues. I sincerely hope that through ALIN’s activities, we will enhance and strengthen the friendship and cooperation between our institutions and universities. No doubt, this meeting will help us to know and understand each other better and conceive more fruitful and cooperative opportunities for education and research in the future. I would also like to thank the staff of the School of Law and of the Korea Legislation Research Institute, who have worked diligently and tirelessly to ensure the success of this meeting. I do hope that this year’s conference will be as good as the one we had last year and will stay forever as one of our memorable general meetings in the years to come! 



Thank you all! 



Bipin Adhikari 



Dean of School of Law at Kathmandu University

September 13, 2017 

 A victim is a person directly or indirectly affected as a result of commission of a crime. He/she may be affected either financially, socially, physically or mentally.

The modern definition of victim includes person such as prisoner, immigrant and subjects of medical experimentations along with conservative definition of victim which includes person affected by crimes such as murder, rape, dacoit and violence.

The 1973 landmark judgment delivered by the Supreme Court of the United States in Linda R.S. v. Richard D reported in 410 U.S. 614 may be mentioned here. In this case, relief for maintenance was denied in absence of such provisions. However, the Court had directed the Legislature to enact a legislation protecting the rights of victims which lead to proclamation of Victim and witness Protection Act, 1982.

In Shri Bodhisattwa Gautam v. Miss Subhra Chakraborty, which has been reported in AIR 1996 SC 922 of India, the issue was again discussed. In this case, on account of prima facie evidence as an interim relief maintenance was to be provided to the prosecutrix till the final disposal of the case.

The issue of the victim protection remains one of the paramount aspects of criminal jurisprudence which has been neglected in the past. Every victim deserves protection, cooperation, access to justice, humane treatment and compensation. The present Bill tries to respond to the situation. However, its provisions are not legally enforceable and appear more to be like a Directive Principle of State Policy in the Constitution. The following shortcomings may be pointed out:

1. Section 4 of the Draft Bill states that no court shall have right to enforce the policy under the concerned Part of the Draft Bill.

2. Sections 5 to 20 enumerate rights of victims and measures to protect them. The Draft Bill further provides victim’s right to information of the investigation. However, the Draft Bill is ambiguous whether such information is to be provided as a mandatory requirement or on demand, the mode of demanding such information and also whether the information is to be provided with or without any fee.

3. Section 11 of the Draft Bill lays down the policy of protecting victim, his family and his property from any form of coercion or duress but the Draft Bill fails to lay down the procedure to achieve its objectives.

4. The time period provided to appeal under Section 18 of the Draft Bill needs consideration as 15 days limitation period for appeal against the order/judgment of the adjudicating court is unconsciously less.

5. Section 22 states that an application may be preferred to the Appellate Court for enforcement of the rights enumerated under Part 3 of the Draft Bill, however, Section 23 conversely states that the Appellate Court shall not have right to review the decision delivered under the Draft Bill for any infringement of victim’s right.

6. The compensation for victim provided under Part 6 needs to be reconsidered.

7. Section 48 of Part 7 of the Draft Bill identifies offences when committed, the victim of such offences is entitled to compensation but the list fails to enlist communal violence and discrimination one the offences wherein a victim is entitled to compensation.

Nobody can disagree with the logic that the compensation to the victim should be determined after carefully considering various aspects such as offence committed, injury inflicted, mental agony and trauma etc suffered by the victim. The Draft Bill is silent about the procedure for compensation when the accused is unknown or absconding and at which stage the victim is entitled to protection and compensation. Some of the rights which have been laid down have already been guaranteed in the Constitution and there is no need to be redefined in present Draft Bill.The primary object of the Draft Bill ought to have been to lay down procedure and institution/committee to implement already known rights to protect and compensate the victims.

No doubt, the present Draft Bill is a comprehensive Bill defining rights of a victim after various deliberations and is amenable to further improvement. It should however be admitted that the provisions portray the objectives it aims to achieve in near future as the State in current situation is not in a position to safeguard and compensate all victims. The procedural aspect regarding protection, compensation and rehabilitation the victim such as video-conferencing, in camera proceeding, indirect confrontation of victim with the accused are absent in the draft.

 The government of Nepal has registered a Bill on National Youth Council at the Parliament Secretariat to empower the country’s youth, who make up 40.43 per cent of the country’s total population. Although the government brought National Youth Policy in 2010, it took it nearly four years to set up legal ground for the implementation of the policy. The policy had recommended setting up of the council to implement its goals. Further, he stressed that as per the National Census 2011, 10.69 million of Nepal’s 26.49 million populations is between the ages of 16 and 40, defined as youths by National Youth Policy 2010.

The council, according to the Bill, will have six main purposes — recommending long-term plan and policy about youth to the government, devising and implementing youth plan and programme, announcing the policy to mobilise youths as volunteers in development and social service, suggesting the government for the development, empowerment and mainstreaming of the youth, and determining/accessing the necessary conditions to give affiliation to organisations.

Similarly, the council will be a 23-member body chaired by Minister for Youth and Sports. Other members of the council will include seven secretaries of related ministries, five representatives of youth-related organisations, six members from among those who have special contribution to youth-related activities and four will be from youth business people, workers, peasants and sports persons. The government will appoint one vice-chairman from among council members. To implement the district-level programmes, there will be 13-member district committees.

Also, it will require 11 to 20 million rupees to set up the central office of the council and Rs 1.5 million has been earmarked towards annual expenses to run each of the 75 district youth committees, states the Bill. The council will be allowed to receive money from the government, individuals, organisations, foreign nations and international organisations.

In light of this, there have been criticisms towards the government for ignoring the National Youth Policy, 2010 while drafting the bill. This view has been echoed by youth political party-affiliated organisations. Experts have advocated for allocation of two per cent of total national budget for the Council. Moreover, the formation of National Youth Council with participation of youth from all sectors is absolutely imperative in order to empower the youth for leadership development. Lastly, there is a need for the functioning autonomy of the Youth Council in order to enable it to take certain decisions out of its own accord.

Some of the suggestions for amendment to the bill are as follows:

a)The Preamble and Section 6 of the Bill do not complement each other. There is a need to amend the Preamble to reconcile the Preamble with the provisions of the Bill, especially Section 6.

b)Experts have advocated reconsidering the definition of youth which under Section 2(h) defines as person between the age of 16 and 40. National Youth Policy, 2066 has declared youth to be a person between 16 to 40, hence, the Bill has been drafted around the declaration of National Youth Policy. It is suggested that upper limit on the age classification should be reduced as per the international standards.

c)Part 1 Section 2: Under Special Category Youths. Victims of war, differently able youths, marginalized and vulnerable youths have been put in the same category. As they are of different nature, these youths should be kept in a separate category.

d)The Bill should incorporate provisions for women participation of 50% at youth level as envisioned by the Constitution. Further, the bill needs to establish further provisions for women belonging to a special bracket. (i.e. Dalits, Marginalised, War Victims, Vulnerable Groups etc.)

e) Part 3 Section 5: The Youth Council should have a designated term and the termination of the Youth Council representatives should not be handled arbitrarily. A fixed term for Youth Council elects and representatives would provide impetus to the systematic institutionalization of the organization.

f) Part 7 Section 15: Program Co-ordinator. The National Youth Council should have the autonomy to assign a program co-ordinator rather than the ministry doing it for them.

g) Part 9: Miscellaneous. In order to create a transparent and accountable Youth Council, there should be adequate provisions to create that environment. The recommendation committee established through this section should be a lead by an independent and non-partisan person. Further, autonomy should be provided to the recommendation committee to appoint other representatives rather than the ministry.

h) There is a need to take into account the practical and logistical feasibility of setting up a District Youth Council at every district. Further, drafters should also take into account fears regarding politicization of the councils at the district level.

i)The constitution of the Council seems an organ of the government to enforce and propagate its policies but remains silent while providing any financial assistance.

j) A provision for counselling youths for providing guidance and support must be incorporated. Further, it is advocated and as far as it is feasible for the government to provide bank guarantee to banks to secure education loan which are available to students at a concessional interest and process of repaying the loan. This practice is prevalent in the developed countries.

k) There should also be provisions for legal assistance to be provided to youth either free of cost or at a concessional rate.

It was hoped that the present Bill would establish a powerful and inclusive Committee but it is disappointing to find out that the Bill has only initiated formations of many toothless council. Even then, experts have opined that the Bill will provide the base on which further improvement/amendment to the Bill may be carried out in future. Despite deficiencies in the Bill, experts have advocated against scrapping the Bill to wait for years for the Legislature to introduce another Bill, rather it is in the best interest of the state to amend it, gradually, step by step.

 Kathmandu University School of Law (KUSL) in association with German Foundation for International Legal Cooperation (IRZ) organized a week long (3rd August-7th August, 2015) interaction program on the Draft Constitution, 2015 in various parts of Kathmandu.

The program hosted Professor Matthias Hartwig, a leading constitutional expert associated with the Max Planck Institute for Comparative Public Law and International Law, Heidelburg. The programs were hosted by Dr. Bipin Adhikari, Dean of Kathmandu University School of Law (KUSL) , Mr. Dinesh Tripathi, constitutional expert and Ms. Angela Schreimic, associated with IRZ.

The interaction program saw participation from a wide range of Nepalese stakeholders including constitutional experts, political scientists, legal practitioners, parliamentarians, journalists, academicians, civil society members, activists and law students.

The modus operandi of the programs included a brief presentation from Prof. Hartwig highlighting his observations and comments on the proposed Draft Constitution of Nepal, 2015. This was followed by an open floor discussion session where the participants raised pertinent issues regarding the Draft Constitution and sought Prof. Hartwig’s feedback on contentious issues in the proposed Constitution based on his German and European experience.

In his presentation, Prof. Hartwig attempted to highlight, based on the comparative constitutional models, some of the pertinent issues enshrined in the Constitution that could be relevant for Nepal. He said that the draft constitution is full of potentials. Some of his key observations discussed among the participants have been highlighted below:

Length of the Constitution: The draft of the Constitution is very lengthy, much alike the Indian or Brazilian Constitution. This could lead to complications later when certain provisions need to be amended. Amending a Constitution is generally more complicated than ordinary legislation so this point should be taken into consideration. Also, a lengthy Constitution could give rise to more contradictions and repetitiveness. A Constitution should be precise and coherent. Furthermore, a Constitution is declaration and as such the general people should identify with it. A lengthy Constitution could be difficult for people to identify with. Also, more content in Constitution means less flexibility to the legislators. This could be construed as contrary to the principle of democracy. It could be necessary to do so in Nepalese context; however, it would be beneficial to shorten it if there aren’t any pressing needs to do so.

State Objectives: It is perhaps not necessary to lay down such exhaustive state objectives in the Constitution. Sometimes extensive state objectives could lead to the misconception that the state does not owe any other obligations rather than the ones enshrined in the Constitution. However, in changing world, this is not the case. For example, the recently prominent issues of asylum seekers and refugees have been addressed as a matter of state obligation, via the concept of Social Welfare State and Fundamental Rights principles, without its express mention in the German Constitution. In the same vein, the Nepalese Constitution could adopt less exhaustive state objectives.

Fundamental Rights: The provisions on Right to Equality and Discrimination are intrinsically linked and as such should be put together in chronological order of the Constitutional text. Also, under Freedom of Expression, there are broad possibilities in Nepalese Draft Constitution to limit this right. This should be taken into consideration because these limitations could be easily manipulated in the future. In terms of Freedom of Religion, the inclusion of the provisions on right to conversion could be further discussed.

Constitutional Court: Once the establishment of Constitutional Court has been agreed, it could be given more competencies. Also, it is astonishing to see the provisions for the abolition of the Constitutional Court after 10 years. This could perhaps be removed.

Citizenship: It is in line with German and International practice to grant citizenship from both the father’s and mother’s side. In modern globalization, the concept of dual nationality is also unavoidable. In Europe and Germany, it has become quite common for citizens to hold multiple citizenships in recent times. In light of this, Nepal could rethink its position on citizenship issues.

Federalism: Federalism is a hotly debated topic in Nepal. First, we need to be aware of what the idea of federalism is? First is the idea of decentralization of powers between different administrative units. Second is the idea of character identities of the citizens. Third is the idea of delineation of states. All these factors have to be carefully assessed prior to establishing federal states. It is indeed a very tricky concept. Issues ranging from jurisdictional disputes to financial transfers may appear in the process. Also, a clear framework to implement the separation of powers between the legislative, executive and the judiciary needs to be ascertained. Also, the concept of who controls the money is also very important in Federalism, i.e. the provinces or the Centre. This needs to be discussed.

 In the last two decades, Non- Governmental Organizations have gained strength and prominence in Nepal. The sheer number of Non- Governmental Organizations (NGOs) has rapidly increased due to the emergence of a more favorable environment following the dawn of multi-party democracy in 1990. However, the broad concept of civil society and non-governmental organization is not yet well understood by most Nepalese, including civil society members themselves.

Nepal’s commitment to human rights is well reflected in an interim constitution and other policy documents and international treaties that repeatedly affirm the intention to provide Nepali people an open and free environment to enjoy their rights, including the freedoms of assembly, association, information and expression. At the same time, however, NGOs working in different spheres often criticize the existing legal framework for carrying forward the controlling legacy from the previous royal regime. Moreover, NGOs still suspect that the government is trying to restrict NGO space in one way or another. The statements and remarks of government officials and political leaders often lend credence to such suspicions.

Constitutional Framework

The Interim Constitution of Nepal came into force on January 15, 2007. Relevant constitutional provisions include the following:

• Articles 12, 13, 16, 24, 25, 26, 29 and 31, which relate to various individual freedoms, including civil rights (right to life, dignity, equality and freedom, etc.) and political rights (rights to association, expression and exchange of ideas, participation in the state system, etc.)

• Articles 12, 15, 27 and 28, which outline economic rights (rights relating to opportunity for proper employment, freedom from hunger, right to select one’s own occupation, etc.)

• Articles 12, 13, 18, 19 and 30, which guarantee social rights (rights to education, health and safety, medical facilities, maternal and infant health care, safety and security of children, etc.)

• Article 23, which guarantees cultural rights (right to participate in religious cultural and traditional practices without hurting the sentiment and dignity of others.

Part 3, Article 12 of the Interim Constitution of Nepal specifically guarantees a set of freedoms for an enabling environment for civil society, including:

• Freedom of opinion and expression;

• Freedom to assemble peacefully and without arms;

• Freedom to form political parties;

• Freedom to form unions and associations;

• Freedom to move and reside in any part of Nepal; and

• Freedom to practice any profession, carry on any occupation, industry, or trade.

Part 4 of the Interim Constitution obliges the State “[t]o implement international treaties and agreements effectively, to which the State is a party.” Part 4, Section 34 outlines “Directive Principles of the State” as follows:

•(1) It shall be the chief objective of the State to promote conditions of welfare on the basis of the principles of an open society, by establishing a just system in all aspects of national life, including social, economic, and political life, while at the same time protecting the lives, property, equality and liberty of the people. •(2) It shall be the objective of the State to maintain conditions suitable to the enjoyment of the benefits of democracy through maximum participation of the people in the governance of the country by means of self-governance tribal, linguistic, cultural or regional, and to promote the general welfare by making provisions for the protection and promotion of human rights, by maintaining tranquility and order in the society.

Part 4, Section 35 of the Interim Constitution under “State Policies” suggests the need to enact a legal framework that facilitates NGOs: “The State shall pursue a special policy to regulate the operation and management of public and non-governmental organizations established in the country.”

The Interim Constitution envisages popular participation in governance and democratic exercise. Part 17, Section 139 of the Interim Constitution includes the “Provision for Local Self Governance,” which states: Arrangements shall be made to setup local self governance bodies to ensure the people’s exercise of their sovereignty by creating a congenial atmosphere and thereby ensuring maximum people’s participation in the country’s governance, and also by providing services to the people at the local level and for the institutional development of democracy, based on the principle of decentralization and devolution of power.

The ongoing constitution making process in the Constitution Assembly since May 2008 is working to draft the constitution in line with the interim constitution, comprehensive peace accord signed in November 2006 and peoples aspirations reflected through inputs and suggestions directly collected by CA members in 2009/10. The thematic reports made public by the different 11 subject committees under the CA have also given enough and independent room for CSOs as a development actor in new Nepal.

National Laws and Regulations Affecting Sector Relevant national-level laws and regulations affecting civil society include:

• The National Directorate Act (1961) (Rastriya Nirdeshan Ain 2018) aims to ensure that professional organizations and groups use their strength for their development, as well as nation building, with pre-approval and consent from the government. CSOs registered under this Act include the Nepal Bar Association, Nepal Press Council, Teachers Union of Nepal, Nepal Federation of Journalist Associations and the NGO Federation of Nepal. Unless formed by the government itself, any group wishing to register under this Act must apply and receive approval from the Cabinet through the relevant line ministry or based on law. For instance, the formation of a single Teachers Union was envisioned in the Education Act. • The Association Registration Act (1977) is the primary framework law for CSOs in Nepal. Registration under the Association Registration Act is required for an organization to function legally. Under the Act, an “association” means an association, institution, club, circle, council, study centre etc. established for the purpose of developing and extending social, religious, literary, cultural, scientific, educational, intellectual, philosophical, physical, economical, vocational and philanthropic activities, and also includes friendship associations.

• The Social Welfare Act (1992) governs the provision of “social welfare” activity and “social service” activity. To receive foreign funding and implement programs with foreign support, local CSOs must receive advance approval from the Social Welfare Council (SWC.

• The Local Self-Governance Act (1999) encourages local government engagement with CSOs in development work. The Act envisions that local governments will facilitate NGOs in the identification, formulation, approval, operation, supervision, and evaluation of the development program. The Act also encourages the private sector to participate in local self-governance to provide basic services for sustainable development.

• The Company Act (2006) (paragraph 19, articles 166 and 167) provides the legal basis to register not-for-profit business organizations and consultancy companies. Registration requires at least five citizens coming together to promote any profession, business, intellectual, educational, social, charity or welfare activities, with a non-profit intent.

On the other hand, there is a lot of misconception regarding the role of the NGOs in Nepalese society. Media, in recent times, have described NGOs/ INGOs as dollar farming agencies. They portray them negatively. However, this is not the reality, as INGOs and NGOs have been making a lot of difference in the rural parts of Nepal, providing the poor and marginalized people with basic services like health, drinking water, sanitation, energy, disaster training, agriculture, environment, education, and livelihood programs. In light of this, the present NGO (Organization) Bill, 2070 aims to regulate the NGOs and provides adequate functioning guidelines.

The present NGO Bill aims to repeal the following statutes: National Guidance Act, 2018 and Association Registration Act, 2034. There are two objective of the Bill: i) the Bill is drafted to institutionalize, regulate, organize all NGOs engaged in social development and nation building fields and ii) to make these NGOs transparent, accountable and responsible management. Moreover, provisions of the Bill are positive. However, the Bill is highly regulative in terms of conducting day to day administrative work which will have a discouraging effect in the NGO sector. There is widespread belief that the NGO sector is unorganized and some are even involved in duping donors with various forms of corruption however; the provisions of the Bill fails to make the NGO sector accountable, responsible and transparent as reflected in its preamble. Giving Chief District Officer (CDO) the jurisdiction to regulate and enforce the provisions of the law is logistically unviable as they are already overburdened with various responsibilities. Meanwhile, the United Nations Office of the High Commissioner for Human Rights (OHCHR) had also expressed concerns over the government’s intention to introduce the Code of Conduct for NGOs under the amended Social Welfare Act saying it could be used to undermine the independence of the NGOs.

It is necessary to bring to attention that even though the registration and renewal of the NGOs as per law was to be done at the District Administration Office, however, the responsibilities of doing so was discharged by Social Welfare Council (SWC). Thus, experts have advocated strengthening and empowering SWC instead of CDO as SWC has the resources, experience and was formed for handling matters governing NGOs. The present Bill does not mention anything about SWC eradicating it in the process. Also, it has been criticized that the Government neither has the resources nor the capacity to effectively implement the provisions of the Bill. The SWC should be established as “One Door Channel” to manage all matters concerning NGOs.

Further, Section 2 sub-sections (d), (e) and (f) of the Bill provides definition of Organization, Society and Trust. The definition provided for the trust also includes the trust set up for individual. To bring private trust under the purview of the Bill will negatively affect the working and functioning of the private trusts. Also, the Bill should accommodate the working calendar of NGOs. Submitting report as per the NGOs calendar will aid in the process otherwise conducting auditing mid-year serves no useful and meaningful purpose. Further, experts have opined that conducting Bi-annual and a final annual financial audit reports under Section 10 of the Bill merely burdens NGOs in terms of finance, time and resources. Moreover, the provision wherein obtaining recommendation from CDO is a prerequisite document for registration of a NGO has been highly criticized. First and foremost, CDO is not in a position to analyze and issue recommendations to all the NGOs. Such recommendations must be issued by concerned departments. Furthermore, experts have criticized the Bill for not having a provision for appeal against non-issuance or refusal to issue recommendation letter.

Section 11 of the Bill stipulates that no more than 25% of the donation money can be allocated for administrative purposes and with adherence to inclusive policy while recruiting the staffs. However, inviting application for recruitment via publication of advertisement in a national daily is putting huge financial burden on small NGOs. Smaller NGOs do not have finance to publish such advertisement as a normal advertisement costs more than rupees forty thousand which, for most small organizations, might be their annual budget.

In addition, setting up various strata to obtain recommendations for registration will dissuade people from running genuine NGO with social and development.

Section 12 of the Bill stated that submitting tri-annual progress report to the concerned department, whom many believe does not have the capacity to read one annual report, and mandatory signing of Memorandum of Understanding with concerned local body is putting unnecessary burden on NGOs working on smaller scale and on a tight budget. Section 19 read with Section 9 of the Bill undermines the autonomy of the NGOs as the concerned Government body has the power to issue directions in administrative process.

Experts also expressed grave concern as the present Bill sets to destroy the NGO movement. The level of restriction and approvals required to run a NGO prevents an Individual from doing so. Instead, NGO will be turned into a quasi governmental body. The present Bill is maliciously drafted to put rein on NGO sector for questioning the government and the Constituent Assembly for its inability to promulgate a much awaited Constitution. The Bill, which is of a national importance, is being introduced into the Constituent Assembly without holding discussions with various stakeholders at grass-root level.

Also, the general categorization of NGOs is absurd and classification based on area/nature of operation should be done and necessary rules and regulation to govern them must be contemplated. In addition, level of control and restriction the Bill seeks to impose on NGOs would have been justified if the NGO was funded by the Government. But the government neither funds nor assists NGOs in their operation. ‘Policy contestation’ is one of the important function of NGOs. It is NGOs responsibility to contest implementation government policy regarding its correctness.

In addition, the Bill gives the illusion of conducive working environment for NGOs but in reality it imposes high control and restraints on NGOs. NGOs have been providing assistance to people where government has failed to deliver. The political parties which considered NGOs as intrusive bodies have changed their mind and view NGOs as an extended arm of the state. The political parties are considering opening NGOs to assist party achieving their goals and objectives.

 
It gives me pleasure to introduce you [the first year law students] with Professor Doron Teichman of the Hebrew University Faculty of Law who has kindly agreed to be here to give a presentation to you on The Oxford Handbook on Behavioural Economics and Law (Oxford, 2014) – a new book that he jointly edited with Eyal Zamir.

Professor Teichman is a SJD of Michigan University and has strong interest in economic analysis of law. The new book that he has co-edited, and has twenty-nine chapters from different authors in this area, brings together leading scholars of law, psychology, and economics. The idea is to provide an up-to-date analysis of the theme of behavioural economics and law in the modern context. The book concentrates on both the strengths and limitations of the theme as well as a forecast of its future development.

Law and economics are often overlapping when explaining whether legal systems are economically efficient or need to be modified or improved. Microeconomics, more specifically, provides insight into the analysis of contemporary legal problems, political economy, constitutional economics, and political science. While different schools of thought may analyze the same issues and cases as does “law and economics,” often, they originate from vastly different perspectives. Behavioral economics and finance study how individuals’ and institutions’ economic decisions are influenced by other factors that can, for example, be psychological, social, or emotional. It also studies how these changes in behavior effect components of the market, like prices, returns, and the allocation of resources, which is a fundamental issue in the study of economics. As is implied, behavioral economics examines how rationality plays into the decisions individuals’ and institutions’ make and the causes behind those decisions. Behavioral economics integrates components of other sciences, such as psychology, neuroscience, and microeconomic theory, making this field of study very diverse in its approach.

Behavioral economics has had an increased influence on US scholarly papers, thanks to its three fundamental themes: heuristics, which states that people do not always use logic but approximate rules of thumb to make their decisions, framing, or how a people’s biases can influence how they interpret and respond to events, and lastly, market inefficiencies, like mis-pricings and irrational decision making. The Oxford Handbook on Behavioural Economics and Law provides an insightful introduction to and criticisms of the influence of behavioral economics on legal theory. Furthermore, it also discusses how extant law has co-opted various specific aspects of behavioral phenomena in legal policymaking. Lastly, the book analyses how behavioral economics has influenced specific areas of the legal sphere, like contracts, property, taxation, and antitrust policy.

The “law and economics” movement in jurisprudence is an important stream of thought in the application of economic theory (specifically microeconomic theory) in the analysis of law. Economic concepts are used to explain the effects of laws. They are used to assess which legal rules are economically efficient, and as such needs to be promulgated. This brings in the application of microeconomic analysis to contemporary legal problems. Economic analysis is also relevant in political economy, constitutional economics and political science. Approaches to the same issues from Marxist and critical theory/Frankfurt School perspectives usually do not identify themselves as “law and economics”. For example, research by members of the critical legal studies movement and the sociology of law considers many of the same fundamental issues as does work labeled “law and economics,” though from a vastly different perspective.

Behavioral economics and the related field, behavioral finance, study the effects of psychological, social, cognitive, and emotional factors on the economic decisions of individuals and institutions and the consequences for market prices, returns, and the resource allocation. Behavioral economics is primarily concerned with the bounds of rationality of economic agents. Behavioral models typically integrate insights from psychology, neuroscience and microeconomic theory; in so doing, these behavioral models cover a range of concepts, methods, and fields.[2][3] Behavioral economics is sometimes discussed as an alternative to neoclassical economics. The study of behavioral economics includes how market decisions are made and the mechanisms that drive public choice.

The use of “Behavioral economics” in U.S. scholarly papers has increased in the past few years as a recent study shows. There are three prevalent themes in behavioral finances: heuristics: People often make decisions based on approximate rules of thumb and not strict logic; Framing: the collection of anecdotes and stereotypes that make up the mental emotional filters individuals rely on to understand and respond to events; and Market inefficiencies: These include mis-pricings and non-rational decision making.

The book is the first comprehensive and systematic introduction to behavioral legal studies. The second part comprises four chapters introducing and criticizing the contribution of behavioral economics to legal theory. The third part discusses specific behavioral phenomena, their ramifications for legal policymaking, and their reflection in extant law. Finally, the fourth part analyzes the contribution of behavioral economics to fifteen legal spheres ranging from core doctrinal areas such as contracts, torts, and property to areas such as taxation and antitrust policy.

You are welcome to interact with Professor Teichman following his presentation. Thank you !

Dr Bipin Adhikari

Kathmandu University School of Law (KUSL)
The 11th Asia Legal Information Network Expert Forum
Korea Legislation Research Institute
April 30, 2015

The Interim Constitution of Nepal 2007 is one of the latest constitutions of the world. It has led to the establishment of Constituent Assembly – II to write a new constitution for the country. Being an Interim Constitution, which outlines the legal framework providing a basis for the democratic transition, it also, at the same time, lays down the foundation for interim norms, values, institutions and procedures on the chassis of which the Constituent Assembly will draft and adopt a new constitution.

This paper argues that the Interim Constitution of Nepal has created a firm foundation for social economy in its interim arrangement for the country. It also argues that the new constitution to be adopted by the Constituent Assembly has a solid background to work on what the Interim Constitution has effectively laid on. Finally, the paper argues that the policy foundations enshrined in the Interim Constitution of Nepal needs to be institutionalized in practice to implement progressive transformation of democratic institutions, social and economic proliferation.

Concept of Social Economy

People may differ on what they understand as “social economy.” Generally, it refers to a ‘third sector’, different from the traditional public and the private market sectors.[1] Its origins can be traced back to ancient French and Anglo-Saxon societies where it was established to re-introduce social justice values into the economy. These values ranged from tackling social exclusion and promoting development in particularly deprived localities to establishing solidarity in production relations. Contrasting from a profit making enterprise, social economy comprises of group of individuals working together to set up adequate structure for individual and general public interest.

Essentially, social economy is comprised of non-profit, voluntary and co-operative sectors working independent of the state and dedicated to achieving social developmental goals that transcend the economic market. From farmers’ collectives working towards effective marketability to charities and NGOs working for public interest, the social economy encompasses a wide range of economic activities.  Additionally, as per Frank Mouleart et al., features of social economy initiative includes, among others, “redistribution of income and wealth within the market economy, various allocation systems and their political governance, solidarity and reciprocity relations, satisfaction of alienated individual and collective needs, the role of the public, private and third sector in operating and governing the social economy, and global governance.” [2]

The emergence of social economy concepts can be characterized by the outburst of co-operatives, associative, mutual aids, non-profit organizations and initiatives in the 19th century Europe in retaliation to the social inequalities, growing poverty and exploitation of the Industrial Revolution.[3] Critics have often undervalued the social economy movement as a naïve utopiaHoweverthe impacts of social economy initiatives are hard to ignore. The modern day understanding of social economy is dominated by synonyms such as alternative economy, non-lucrative sector, voluntary sector, idealist sector, solidarity sector etc. In light of this, the major roles played by social economy initiatives range from institutionalization of better wages, better work conditions and consumer satisfaction in the early 19th century to sustainable social entrepreneurship, worker oriented co-operatives and formation of rights oriented NGOs in the 21st century.[4]

The academic discourse on social economy has sought to highlight the differences in the meaning and practice of the different synonyms used to describe the social economy movement. However, for the purpose of this paper, a broader approach, albeit unscientific, encompassing all the prevalent conceptions of social economy, keeping in mind the inherent qualities of solidarity, reciprocity and the emphasis of individual and social objectives over capital, has been accepted to offer a wider framework for discussion.

Nepalese Situation

Nepal has come a long way from the feudalistic state structure of the Rana regime (1846 -1951) to the post-conflict multi-party democratic state.

The country is a multi-cultural, multi-lingual and multi-religious society with a plethora of rich cultural diversity. Encompassing an area of 55,000 sq. miles, Nepal is a host to spectacular ecological variations. In terms of economic potential, Nepal has a tremendous prospect in the horticultural enterprises, tourism forests and water resources. The Himalayan Mountain ranges form a majestic outlook and attract millions of tourists annually. In light of this, there is an abundance of untapped economic potential in the country.

Historically, the top heavy system restricted people’s participation in the development process. As a result, the Nepalese economy could not flourish and the situation of marginalization of the non-elites, ethnic tension and poverty aggravated further. The current effort is to redefine the state’s role in facilitating people’s participation in the development process through progressive transformation of democratic institutions, social and economic proliferation.

In terms of social welfare service, organizations other than that of the government have been prevalent in Nepal since the mid 19th century. Whilst some were established as a joint venture between the government and civil societies, others were initiated purely out of the “…collective spirits of social activists.”[5] Gradually, the numbers of non-governmental organizations working in social welfare sector started rising. Keeping this in mind, the Government of Nepal, in a bid to regulate, established the Social Welfare Council to co-ordinate the activities of NGOs and civil society organizations.

Nepal’s continuous struggle for development through self fulfillment, utilization of human resources and collaboration on nation’s productive forces has been treacherous one indeed marred by dissatisfaction with state intervention, paternalism and market failures. The current democratic setup has failed to provide the impetus to the Nepali people to grasp the available political powers to enhance their economic interest. The reactive nature of Nepali politics, unable to usher progressive economic policies, has confined the nation to a Least Developed Countries (LDC) category with GDP of 694.10$ and more than 25% of the population living below the poverty line.[6] In addition, there are wide disparities between the unorganized agrarian and the industrial sector with no discernible bridging mechanisms. Moreover, the exodus of unemployed youths to pastures anew and the adoption of liberal economic policies without adequate preparation has further exasperated the country’s prospect for economic growth. According to Senior Development Analyst, Professor Maskey, “Change in economic perspective is, therefore, vital for initiating change in attitudes, values and expectations from the prevailing inertia to productive culture – essential for social transformations.”[7] This is where social economy initiatives in the form of innovation can form a viable alternative to meet the socio-economic needs. 

Furthermore, in terms of Nepal, social economy can play key role in the implementation of important community objectives, particularly in the fields of employment. The emergence of group saving initiatives and setting up of mutual pension funds, at the grass-root level, for the benefit of group of workers is a good example. Nepal has had a long cultural tradition of informal community based co-operatives working in different sectors. The savings and credit associations popularly known as dhikuti, and grain savings and labour savings systems known as parma and dharma bhakari are well documented practices still prevalent in the rural parts of Nepal. In addition, the introduction of trust principles, locally known as guthi has provided a broad based framework for co-operation among various groups, within the Nepalese society, to enhance their social and economic interests. The emergence of civil society organizations and NGOs, subsequent to the democracy movement in 1990, has further provided a much needed impetus to effective state governance promoting social justice, equity, equality, rights advocacy, reciprocity and solidarity.

In addition, social economy initiatives, through their activities, can achieve social cohesion, regional and rural development, environmental protection, consumer protection, and social security policies in Nepal. Countless co-operatives and non-profit organizations have been setup to achieve these goals. Despite these efforts, inefficiencies in the economic amelioration of the state are abundant. In fact, the capacity of Nepal to facilitate development hinges on the transference of devolution of power, granted by the constitution, into processes to bring desirable change in the economy through equitable re-distribution of resources, change in production and consumption to the satisfaction of the excluded groups.[8] In light of this, this paper seeks to outline the relevant legal provisions prevalent in Nepal managing the social economy movement and aspires to reconcile the anomalies inherent in policy and practice.

Interim Constitution of Nepal, 2007 and Comprehensive Peace Accord, 2006

The interim constitution of Nepal, 2007, under the preamble, upholds the mandate of “….progressive political outlet, democratic restructuring of the State and social-economic-cultural transformation…”[9] Similarly, the constitution, under obligations of the state provides for the provision to “ensure progressive political, economic and social transformations in the country.” [10] The state obliges to “… set a common minimum program on socio-economic transformation to do away with feudalism in all its forms, and keep on implementing the program;”[11] Further, the constitution obliges the state to “…build a common development concept for the socio-economic transformation of the country and justice as well as for the prosperity and rapid economic progress and prosperity of the country.”[12] 

In terms of the directive principles enshrined in the constitution, the fundamental objective of the state, as regards to economic objective, consists of transforming “…the national economy into an independent, self-reliant and progressive economy…. by preventing the economic resources and means available in the country from being concentrated within a limited section of the society, by making arrangements for the equitable distribution of economic gains on the basis of social justice, by making arrangements for the equitable distribution of economic gains on the basis of social justice, by making such provisions as to eliminate economic inequalities and prevent economic exploitation…” [13] In terms of the policies of the state, the constitution obliges the state to “….pursue a policy of making special provision of social security for the protection and progress of the single women, orphans, children, the helpless, the aged, the disabled, incapacitated persons, and tribes on the verge of extinction.” [14] In addition, the state is obliged to “…..pursue a policy of keeping institutionalizing peace in Nepal through international norms, by promoting cooperative and harmonious relations in the economic, social and other spheres on the basis of equality with neighboring friendly countries and all other countries of the world.” [15] 

The comprehensive peace accord, signed to signal the end of the conflict era in Nepal in 2006 also highlights the significance of transforming social economy measures along with democratic re-structuring of the state for the progression of the state. As per the economic and social rights, as agreed upon the accord, the conflicting parties believed in “….encouraging to give continuity to production works without disturbing the industrial climate in the country, to respect the right to collective bargaining and social security in industrial enterprises, to pacifically resolve problems, if any, arising between the industrial enterprises and labors, and respect the right to work…” [16] 

The Supreme Court of Nepal for almost two and half decade have been encouraging public interest litigation on behalf of the poor and oppressed by using a very broad interpretation of several articles of the Constitution in force.  

The constitution has provided ample legal measures to support the social economy movement. However, future fluctuations in state’s commitment towards social economy could be problematic. The spirit of the constitution needs to manifest into concrete long term commitments dedicated to mitigate the needs of the state. This could be achieved by setting periodic goals, enacting legislations and setting budgetary assistance facilitating social economic enterprises. The second issue is the concept of durability, i.e. Nepal’s ability to institutionalize and implement an alternative investment project in relation to the time it takes to transform social economy into an innovative and durable mechanism for governance. Given Nepal’s poor implementation records in the past, it is indeed an uphill task. The third issue is the diverse nature of social economy itself. Social economy initiatives include a wide range of concepts and as such any normative approach to delineate a sustainable social economy approach could be impossible to establish. In light of this, Nepal needs to establish a sustainable approach based on its own experiences, state structure, and political environment, social and economic constructs. 

The contents of Nepali constitution can be contrasted to that of the US Constitution drafted in 1787 which, according to Charles A. Beard, was an economic document motivated to achieve the economic domination of the elites and the exploitation of the lower classes. [17]Albeit criticized by many including Jonathan Macey, the landmark book written by Beard entitled, “An Economic Interpretation of the Constitution of the United States” marks the initial constitutional economic debate, popularly known as constitutional economics. [18] The assertion of Charles Beard is interesting in that the constitution of US, at that time, despite claiming to be an economic document, failed to address the social economy component. Charles Beard himself professes, in his book, the concept of competing economic interests between the elites and the lower classes and the motive of economic dominance inherent in the then constitution. In contrast, the Nepalese constitution has a comparative advantage, in that, it addresses the need for state re-structuring based on social, economic and political transformation. In light of this, the constitution of Nepal is more aligned towards economic enhancement through social welfare than retention of hegemonic property rights. 

Today, though, the American economic sphere comprises of thriving private, social and public enterprises working comprehensively towards overall economic growth. The legislations have been put in place, based on egalitarianism, to cater to all the different forms of economic sectors and implementation mechanisms have been evolved to expedite the growth process. Nepal, despite having enlisted progressive principles in the constitution, needs to expand its scope of constitutional economic analysis and respond to the changing nature of economies around the world. 

Micro-Finance and Co-operative Movement 

There are several legislation in Nepal that have tried to enforce what the concept of social economy generally requires.  

The Co-operatives Act (1992), for example, was formulated to manage the “…..formation and operation of various types of cooperative associations and societies based on the mutual support and cooperativeness for the economic and social development of the general public consumers by the farmers, craftsperson, class of people with low capital and low income, labors, landless and unemployed people or social workers of the country..”[19] Firstly, the Act sets the criteria for the formation of social economy based association on the co-operative principle.[20] Secondly, the Act sets procedures for the registration of the associations. Thirdly, the Act set the modus operandi for the associations including code of conduct, functions, appointment/termination of employees, duties and powers of general meeting etc. Fourthly, the Act set about the procedure for pursuance of financial source and mobilization of the human capital. Fifthly, the Act sets the accountability clauses through processes such as: information dissemination, record keeping and account of profits. Sixthly, the Act provides certain concessions and facilities to the co-operative association. Subsequently, the Act stresses the non-applicability of Companies Act (1964) to these associations. 

Subsequent to the restoration of democracy in 1990, the Nepal Co-operative Act was enacted in 1992 with a view to regulate co-operative sector and apply cooperative values, norms and principles into practice. Similarly, the government is in the process of enacting a legislation pertaining to NGOs to institutionalize, regulate, and organize all non- profit foundations and associations engaged in social development and nation building fields and to make these associations transparent, accountable and responsibly managed. As per the National Cooperative Development Board (NCDB), some 3 million people are affiliated in approximately 19,724 cooperatives and more than 50,000 people are employed directly in Cooperative business.[21] Whilst many cooperatives related to health, handicrafts, dairy and vegetable products, and genuine self-employment activities have successfully assisted the income generation initiatives of locals with a stark rise in living conditions, some have been accused of deceiving innocent citizens in both rural and urban areas. The numbers for civil society initiatives and NGOs are equally staggering. In light of this, there is an urgent need for umbrella legislation on social economy, much akin to the one enacted in Spain[22], which supplements the objectives enshrined in the constitution, provides a legal definition of social economic entities and creates adequate mechanisms through establishment of special bodies to meet their needs and improve communication with the state. In this context, the spirit of the Interim Constitution needs to be translated into practice. 

National Legislation 

Nepal is in the early stage of economic development and as such chances are that economic power concentrates on a small number of players to achieve an economy of scale, and, as a result, a monopoly emerges, rather than competition being fostered in the market and the principles of market being proliferated. In light of this, anti-trust laws are imperative to prevent concentration of economic power in the market. In Nepal, this theory holds true not least because the country has adopted a policy of progressive reforms but also because country’s recent accession into the WTO has provided impetus to this process. 

With the objectives of making “…provisions for protecting consumers from irregularities concerning the quality, quantity and prices of consumer goods or services, ensuring that no one lowers or removes the attributes or usefulness of consumer goods or services, preventing circumstances in which monopolies and unfair trading practices may lead to an increase in prices, as well as false and misleading propaganda about the use and usefulness of consumer goods or services, selling, supplying, importing, exporting and storing safe and quality consumer goods or services, and protecting the rights and interests of consumers through the establishment of an agency for redressing the hardships of consumers, and thus maintaining the health, convenience and economic welfare of consumers…..”[23], the Consumer Protection Act was enacted in 1998. This Act is an umbrella act aimed at protecting the rights of the consumer as well as restricting unfair trade practices. The Section 6 of the Act assures and recognizes six rights of the consumer out of eight rights recognized globally. Further, the Act seeks to punish, through jail sentence or fine, perpetrators that fail to meet the obligations set forth by the legislation. 

Further, the government, especially in the last decade, has been actively pursuing liberal economic policies that are conducive for the growth and progress of trade and industry. Following the membership of the World Trade Organization (WTO) during the fifth Ministerial meet at Mexico[24], the need for legislation incorporating fair competition practice was made abundantly clear. In light of this, Competition Promotion and Market Protection Act, 2063 (2007) was enacted, among others, to promote; fair competition for the growth of trade, commerce and social welfare through equitable allocation of resources whilst protecting the open market. [25] 

Moreover, for the purpose of this study, it is relevant to note that the Competition Promotion and Market Protection Act, herein referred to as the Act, aims to protect consumers against monopoly rights of trading enterprises that may arise from the joint action of two or more enterprises. There are provisions in the Act that help control anti-competitive practices, apart from ensuring that the actions of business and trading firms do not come in the way of consumer welfare and open market price formation. [26]Further, the Act has provisioned for the formation of a Market Protection and Monopoly Control Commission to monitor the market.[27] The Commission is entrusted with setting the standards that are left out the Act, promote fair competition and create public awareness.Moreover, The Act also contains special providing for waivers in punishment and fines for those who help in curbing malpractice and bringing the offenders to justice. [28] 

In addition, there are other legislations in Nepal which directly or indirectly deal with the issues of fair competition practices. For example, the Black Marketing and Certain other Social Offences and Punishment Act, 1975 prohibits business practices such as black marketing, profiteering, and deflection of commodities, hoarding and creation of artificial scarcity, fraudulent sale and the adulteration and sale of drugs. Similarly, the Industrial Enterprises Act, 1992 seeks to provide liberal, open and competitive policies to the state in order to make the industrial sector competitive. Also, the Foreign Investment and Technology Transfer Act, 1992 seeks to, “… promote foreign investment and technology transfer for making the economy viable, dynamic and competitive through the maximum mobilization of limited capital, human and other natural resources.” [29] 

The prevalent norms around the world suggest that competition law is a widely acknowledged principle in developed countries. It is credited as a vital tool in establishing “…competition in the marketplace and enhancing efficiency of business enterprises, leading to consumer welfare.”[30] However, in Least Developed Countries including Nepal, these values are yet to be fully appreciated. Effort have been made to initiate fair competition practices in the country, though by and large, the situation is dismal as far as implementation of these legislations are concerned. In light of this, it is imperative that stakeholders in Nepal acknowledge the significance of competition law and formulate adequate measures to institutionalize globally accepted competition practices. 

Millennium Development Goals, 2000 

These initiatives are not enough. The challenges that Nepal faces in the economic sector are enormous. The Millennium Development Goals can help explain the situation. 

One of the eight millennium development goals undertaken by Nepal includes the goal to develop a global partnership for development. The fulfillment of this goal, as per UNDP, entails various components such as establishing trade, setting up aid and debt relief mechanism, ensuring employment and mobilization of national and international organizations for economic enhancement and general interest. [31] Further, as per the Millennium Development Goals report. Nepal relies heavily on foreign assistance for implementation of its development initiatives including achieving the MDGs.[32] Further, the flow of foreign assistance to Nepal, from the donor communities, through loans, grants or any form of assistance, is on a steady increase. In light of this, Nepal needs to demonstrate its effectiveness at utilizing the funds for developmental goals. Social economy components could also tap into the large resources at their disposal and the state needs to promote co-operatives and other social initiatives dedicated to achieving the development goals. 

In addition, the Millennium Development Report highlights the need for Nepal to “…adopt forward-looking macroeconomic policies that promote sustainable development and lead to sustained, employment-centric, inclusive and equitable, broad-based economic growth; promote national food security strategies that strengthen support for smallholder farmers and contribute to poverty eradication; support participatory, community-led strategies in a decentralised fashion and align them with national development priorities and strategies; promote universal access to public and social services and provide social protection floors; and improve the capacity to deliver quality services equitably.”[33]These suggestions place value on the importance of all the major components inherent in the social economy components for a post-conflict, power sharing driven, transitional state. Nepal needs to make sure that these suggestions are effectively implemented at the central and the local levels, through effective policies and resource allocation, in order to reconsolidate the progressive economic values envisioned in the constitution. 

In terms of socio-economic development, an immediate focus should be granted to the tourism and agriculture sectors. These sectors form two major elements consisting of revenue generating industries with multiplier effects on the economy including income generation, employment creation and growth of overall GDP of Nepal[34] Further, both of these sectors serve to enhance inclusion, eradicate gender disparities, and create institutions for participatory decision making process. Subsequently, labour market needs to be regulated adequately in order to provide equitable wage distribution to the workers. If implemented efficiently, this could curb the exodus of Nepali youths to foreign countries and boost the state’s human capital. 

Conclusion 

In essence, development processes seek to transform societies and this could put a post-conflict state in a precarious position of uncertainty. Therefore, it is imperative that whilst formulating a framework for sustainable development, the interventions must take into account the conflict dynamics. In Nepal’s context, the conflict arose as a result of the failure of the state to facilitate participatory development, equitable redistribution of resources and institutionalize democratic norms. These complexities need to be addressed, at an initial phase, through devolution of powers, proportional representation, democratic governance and delegation of decisions making powers at all levels.

Once these sensitivities are addressed, the state can proceed with proliferation of social economy initiative designed to ameliorate the anomalies inherent in the private and the public sector. The Interim Constitution certainly lays down the foundation for the sort of social economy that Nepal needs to build on in the new constitution.  

(This paper has been revised upon the comments on the initial paper by Professor Taehi Hwan, Department of Law, Sungshin University and others.) 


* The author thanks Mr Namit Wagley at Nepal Constitution Foundation for his research assistance in preparing this paper. 

[1] LEVESQUE, B., MALO, M. and GIRARD, J. (1999) L’ancienne et la nouvelle economie sociale, in: J. DEFOURNY, P. DEVELTERE and B. FONTENEAU (Eds) L’economie sociale au Nord et au Sud, pp. 195 – 216. Paris: De Boeck & Larcier

[2] Moulaert, Frank, and Oana Ailenei. “Social economy, third sector and solidarity relations: a conceptual synthesis from history to present.” Urban studies 42.11 (2005): 2037-2053.

[3] Mouleart, ibid, pg. 2039

[4] Renfrew, Colin, Ian Todd, and Ruth Tringham. “Beyond a subsistence economy: The evolution of social organization in prehistoric Europe.” Bulletin of the American Schools of Oriental Research. Supplementary Studies (1974): 69-95. 

[5] International Labour Office. (2004). Social Protection for People in the Informal Economy of Nepal. Kathmandu, Nepal.

[6] MOF,  2014.  Economic Survey (fiscal year 2013/14). Ministry of Finance, Kathmandu, Nepal.

[7] Maskay, Bishwa K. (2015) “Political, economic and social power shift in Nepal must for societal change.” Telegraph Nepal available from < http://www.telegraphnepal.com/views/ 2015-03-05/political-economic-and-social- power-shift-in-nepal-must-for- societal-change.html>  accessed on 03/05/2015

[8] Maskay, Bishwa K. (2015) “ Social Development in Nepal: Economic Perspective”, Telegraph Nepal available from <http://www. telegraphnepal.com/ national/2015-02-25/ social-development-in -nepal:-economic- perspective.html> accessed on 02/25/2015

[9] Interim Constitution of Nepal, 2007

[10] Interim Constitution of Nepal, 2007 Part 4. Section 33 (b)

[11] Interim Constitution of Nepal, 2007 Part 4. Section 33 (e)

[12] Interim Constitution of Nepal, 2007 Part 4. Section 33 (i)

[13] Interim Constitution of Nepal, 2007 Part 4. Section 34 (4)

[14] Interim Constitution of Nepal, 2007 Part 4. Section 35 (9)

[15] Interim Constitution of Nepal, 2007 Part 4. Section 35 (22)

[16] Comprehensive Peace Agreement, 2006 Section 7.5

[17] Beard, Charles A. (1913). An Economic Interpretation of the Constitution of the United States, New York: Macmillian Publishing Co, Inc.

[18] The constitutional economics debate is seen to transcend the orthodox view of economic analysis ofconstitutional frameworks in seeking alternative paradigms including compatibility and limitations between the economy in relation to constitution and political agents.

[19] Nepal Law Commission, (1992) “The Co-operatives Act.” Kathmandu, Nepal.

[20] Co-operative Principle, as devised by Paul Grice, refers to the social principle encompassing interactions between two or multiple participants to a conversation. Further, the cooperative principle describes how effective communication in conversation is achieved in common social situations. It is governed by the principles enshrined in the International Co-operative Alliance, 1995.

[21] Ministry of Finance.  National Cooperative Development Board, (2010) Kathmandu, Nepal.

[22] On 29 March 2011, Spain published its Law on Social Economy (Law 5/2011) in the Boletín Oficial del Estado la Ley (Official Journal).

[23] Consumer Protection Act, 1998. Preamble. Kathmandu , Nepal.

[24] The Kingdom of Nepal submitted, on 24 March, its acceptance of the terms and conditions of membership set out in the Accession Protocol which was approved by the Ministerial Conference on 11 September 2003 and signed by the Kingdom of Nepal subject toratification. The Kingdom of Nepal became the 147th member of the WTO on 23 April 2004. Nepal is the first LDC to join the WTO through the full working party negotiation process.

[25] Competition Promotion and Market Protection Act, 2063 (2007). Preamble. Kathmandu. Nepal.

[26] Competition Promotion and Market Protection Act, 2063 (2007). Chapter 2 Section 3 (2). Kathmandu. Nepal.

[27] Competition Promotion and Market Protection Act, 2063 (2007). Chapter 3 Section 12. Kathmandu. Nepal.

[28]  Competition Promotion and Market Protection Act, 2063 (2007). Chapter 4 Section 17-21. Kathmandu. Nepal.

[29] Foreign Investment and Technology Transfer Act, 1992. Preamble. Kathmandu, Nepal.

[30] Gautam R. (2004). “Competition Policy and Law in Nepal.” Ministry of Local Development, Kathmandu. Nepal.

[31] United Nations, (2013) “Nepal Millennium Development Goal: Progress Report 2013.” Available from < http://www.np.undp.org/ content/dam/nepal/docs/reports/millennium%20development%20goals/UNDP_NP_MDG_Report_2013.pdf> accessed on 05/03/2015

[32] Ibid., pg. 95

[33] Ibid., pg. 96

[34] Pandey, Hemprabha, and Pradyumna Raj Pandey. “Socio-Economic Development Through Agro-tourism: A Case Study of Bhaktapur, Nepal.”Journal of Agriculture and Environment 12 (2013): 59-66.

The emergence of provisions relating to Privacy in the Draft Penal Code, 2067 in sections 291 to 302 is a welcome initiation, especially in light of the lack of any specific laws governing Personal Privacy thus far.

In the absence of express statutory provisions governing Personal Privacy, relative legislations have been seen to be filling a lacuna in the law. In light of the changing circumstances and the rise of global information technology, the need for Privacy laws have been made apparent and as such Nepal has taken formal steps to codify regulations pertaining to Personal Privacy laws. Albeit a general law, Personal Privacy provisions does initiate the process of recognition of legal right to informational privacy entailing the protection of personal and private information from misuse.

In Nepal, Right to Privacy is a fundamental right enshrined in Article 28 of the Interim Constitution of Nepal. This can be contrasted to, for example, the American Constitution where Right to Privacy is not expressly stated in the Constitution or the English Constitution where Right to Privacy is not a freestanding right under common law. This is not to say that the American or English jurisdictions do not recognize Right to Privacy. It is just that, they have developed measures to get around the lacuna in law.

In America’s case, 14th Amendment and landmark Supreme Court judgments have played a big role in establishing protection of Personal Privacy. In England, equitable doctrine such a breach of confidence, torts linked to infliction of harm to the person and public torts pertaining to police powers have largely been used to govern the concept of protection of Privacy rights. In light of this, Nepali constitutional mandate to enshrine Privacy rights as a fundamental right shows a stern recognition of the importance of personal informational rights and the commitment to protect such rights.

As per Alan Westin, Right to Privacy entails, “The claim of individuals, groups or institutions to determine for themselves when how and to what extent information about them is communicated to others.” From this definition it is clear that the Right to Privacy is not limited just to the individual but can also extend to groups or institutions.

The current system provides penal retrieve for victims of privacy infringement. In addition, the provisions in the code, under section 301, provide measures for compensation. However, a civil action for privacy infringements should be made available. This has a lot of inherent benefits:

1.) In a civil action, the claimant themselves will bring the case increasing the likelihood for claims against privacy infringement.

2.) In a civil action, as opposed to criminal, the burden of proof (balance of probabilities) is less stringent allowing greater leeway in favour of the claimant. In a criminal action the “beyond any reasonable doubt” burden of proof is highly stringent and could provide more difficulties for victims seeking reparations.

3.) Civil action in general is more concerned with compensating the claimant and basing liabilities whereas criminal action is more concerned with punishing the perpetrator. In this regard, civil action is more victim-friendly and will provide un-liquidated damages to the claimant as per the facts of the case.

4.) In most other jurisdictions, privacy laws are governed by both criminal and civil procedural law. In Nepal, measures need to be taken to enable the victims to initiate either a civil or a criminal claim against the defendant.

 
It is clear that the whole chapter on Medical Treatment can be classified into following four categories: i. laws regarding treatment ii. laws regarding to medicine iii. laws regarding test/examination reports and iv. laws regarding compensation. The punishment for recklessness and negligence should be clarified i.e. the elements constituting reckless treatment and negligence treatments should be clearly stated in the provisions to avoid ambiguity. Also, licensing of the medicine distribution must be strictly regulated. Further, the provisions regarding the compensation are very vague. Clear methodology or mechanism must be incorporated for calculation of compensation to the victims.

The provisions of medical treatment have seriously failed to address various issues. As one can see, the medical treatment solely focuses on doctor’s role and ignores roles of nurses/medical attendants, medicine distributors and administrative personnel of a hospital. Any recklessness or negligence on the part of nurses, hospital administrators or medicine distributor should be brought into this chapter of the Penal Code. Further, the doctors should be directed to prescribe generic name of the medicine instead of company specific medicines. The hospital authorities must be required to incorporate technologies to avoid hand written prescription to avoid confusion at the medicine counter.

There should also be a provision of fast tracking the medical treatment cases. The victims should be adequately compensated for the physical and mental harm suffered by the victim and their family.

The definition of medical practitioner or doctor must be clarified as to exclude ‘dhami’ and ‘jhakri’ as the present definition includes them.

A non-obstante clause should be included in the chapter to pave the way for the victim to pursue compensation in civil court under the law of tort. Further, I suggest conducting examination to renew the licences of the medical practitioners on a regular basis.

In addition, the qualification of nurses and medicine distributors should be categorically stated in the chapter.

A strict compliance mechanism must be established to check whether the doctors, nurses and medical distributors meet the requirements of the statute.