Long read | How development projects can go wrong when they disregard the rights of the indigenous people

Hydropower is the cleanest form of energy. But should it come at the cost of indigenous people being abused and oppressed simply because they want to have a say on how such development projects will impact their lives?

  • Read Time 13 min.

Indigenous people across the country had one basic expectation when Nepal decided to embrace federalism, getting rid of a centuries-old political system that systematically discriminated against them.

This expectation has not been met.

Millions of citizens belonging to the multitude of ethnic groups hoped that, with the country turning the page in 2015, they would enjoy political self-governance, a much stronger voice in the decision making, locally and nationally. They were also hoping for a much fairer share of development and also more social and cultural rights with self-determination. While there have been several positive changes in the way the rights of indigenous groups have been met, there still is a long way to go.

One of the most visible examples on how these rights are infringed upon is the hydropower sector, an area of the national economy that is already paramount for the nation’s coffers but it is set towards a further exponential growth with billions of American dollars in foreign investments being pledged.

Imagine one of the many hydropower projects being built across the nation.

It’s a national pride undertaking, an initiative that will help Nepal generate more of the so-called “clean” energy, boosting the chances of turning the nation not only into a major power producer but also into a net exporter. But this same project that is going to be transformative for the national economy is also going to be disruptive and tragic. If you live in the area where the infrastructure will be built, your daily life will be upended and changed forever.

There is a very high chance that local citizens, of which many of them are indigenous people, will be asked to give up their field that, for generations after generations, provided them with an income. Also, some of them might be asked to vacate their houses and relocate. In both cases, they will be promised some financial compensation, some jobs, a new school and a health post. Such offers and promises often fail to materialize or are met with long delays. While this is something very problematic, it is not the most worrisome aspect that worries us. What is really troublesome is the fact that their consent to give away their ancestral homes and land is, in most of the cases, taken for granted.

When we read news about the government’s attempt of luring huge investments to develop the hydro power sector, hardly you can read about the real dramas that affect the locals where these “invasive” undertakings are going to take place.  The focus is on the staggering numbers, the figures in American dollars that investors, including bilateral and multilateral development banks, foreign states’ enterprises, are going to inject into the national economy.

It is a very persuasive narrative that has been crafted but one that does not make justice to the indigenous people and other locals affected and negatively impacted by these investments.

The hypothetical scenario described above is happening in a multitude of locations around the country. There is almost no day that passes without a news article announcing either a new hydropower project being proposed or inaugurated.

Now let’s put into practice the above-mentioned “hypothetical” scenario.

Few weeks ago, the locals of Lapsifedi, a village predominantly inhabited by Tamang indigenous people, only around 24 km distant from Kathmandu, situated within Shankarapur Municipality, had to face the brutality of the state.  As a consequence, they ended up being thrown in jail and beaten up by law enforcement forces simply because they were demanding to be heard and to have a voice.

The village is located where a key substation part of the 220/400 kv Upper Tamakoshi Hydro Power Project is supposed to be built.

For them, the prospect of having a substation in their native land is not only both disruptive, tragic but also traumatic.

Two of us met some months ago to discuss the rights of indigenous people and how such rights have been negatively impacted by the hydropower industry. The outcome of that meeting was an op-ed essay that one of us (Simone) wrote for Nepal Live Today, a piece that tried to explain what was happening in Lapsifedi.

It’s a complex story but in the end, locals were not given any opportunity to express their opinion about starting the construction work of the substation. After initial peaceful protests in January 2023 by locals, protests that were oppressed by the force of the law enforcement agencies, the local inhabitants were hoping that a serious phase of dialogue and discussion would have started with the developer, the Nepal Electricity Authority and the Asian Development Bank, that provides the funding for the construction of the substation.

Following the protest, locals were hoping that the plan of starting the construction work of the substation would definitely halt. An initial meeting with the ADB Mission to Nepal was also held. Then, months and months later, on the early evening of November 17, 2023, a contingent of Armed Police Forces (APF) was deployed to establish a check post. What ensued, in the following day, was what a struggle committee composed by local citizens, mostly indigenous Tamang people, of which, one us (RK Tamang) is a facilitator, described in letter sent via mail to the ADB Nepal Mission Office on November 18, as “widespread suppression”.

Four locals were arrested on November 17 and additional eleven of them were also put into custody on November 18. These were local indigenous peoples, farmers but also human rights defenders. Overall, eight people were injured. The establishment of the AFP check post was the prerequisite to silence locals so that the construction of the substation could start without any more “trouble”.

The infrastructure is an essential component of the 220/400 kv Upper Tamakoshi Hydro Power Project, itself one of the major hydropower projects being built in the country. Along the years, NEA has been consulting with the inhabitants of Lapsifedi but basically all the discussions were held from the perspective that there were no other options available than accepting the plan of building the substation there.

This means that local indigenous people and other local citizens were denied their fundamental rights of Free, Prior and Informed Consent or FPIC. This was the core of the argument made in the opinion essay mentioned earlier and FPIC is at the core of the ILO Convention on Indigenous and Tribal People, 1989 (No. 169), of which Nepal is a party.

“The initiation of the proposed Upper Tamakoshi Hydropower Project’s Lapsifedi Substation and the expansion of high voltage lines have been continuously opposed by local Tamang indigenous and local community, without whose consent these projects cannot proceed” explains the letter sent to the ADB Mission to Nepal. “This information has been communicated to the Nepal Electricity Authority and the Energy Minister of the Government of Nepal on multiple rounds of peace dialogue”, the November 18 letter to ADB explains. On December 4, the Struggle Committee together with other groups and coalition of civil society, Tamsaling struggle committee, Anti Koshi movement had planned to stage a peaceful sit-in outside the offices of ADB Mission in Uttar Dhoka, Lazimpat.  The law enforcement agencies cordoned off the around 200 protestors who had shown up on the side of Ambassador Hotel, preventing them from reaching the premise of ADB Mission.

There was no major news coverage of the incident, again proving that, with few exceptions like some excellent reporting from the Nepali Times, only a certain narrative about the hydropower project finds space in the national media. On the day of the sit-in, the ADB officials did not do anything to approach the protestors and initiate a dialogue, even unofficial with them. This is regrettable.

We have contacted the ADB Nepal Mission in order for them to provide their views on what is happening in Lapsifedi and here we report what we received.

ADB’s take

The ADB in an email response to our request dated December 15, 6.27pm, wrote: 

As discussed with Mr. R. K. Tamang during our meetings with him, ADB maintains its view that addressing any grievances should be in an environment of peaceful consultation and dialogue. ADB’s Safeguard Policy Statement, 2009 (SPS) aims to help developing member countries address environmental and social risks in development projects and minimize and mitigate, if avoidance is not possible, adverse project impacts on people and the environment.  

ADB has always been open to dialogue and is committed to providing support to facilitate resolution of any issues that arise and ensuring meaningful consultations with affected and beneficiary communities in a peaceful environment, without any coercion. More importantly, ADB advocates for peaceful resolutions to address project issues and has clearly stated that any acts of violence and the use of force should be avoided at all costs to address local issues at Lapsiphedi. We have conveyed this position to the concerned executing agency, the Nepal Electricity Authority (NEA), in writing and in meetings, and to all involved parties, including representatives of the struggle committee and other affected individuals in the Lapsiphedi area.

The resolution of the current issues must happen in a conducive environment with dialogue between the different parties within the communities and with the Government (in this case NEA).

ADB has been engaging and interacting with the affected communities multiple times, both at ADB Nepal Resident Mission in Kathmandu and at the project site, and stands ready to facilitate the peaceful resolution of any grievances.

ADB has been monitoring safeguards compliance according to ADB’s SPS and project safeguards documents. For all ADB-assisted projects, we promptly flag any non-compliances and ensure required corrective measures are agreed and taken by the NEA.  ADB’s SPS does not include the provision of Free, Prior, and Informed Consent (FPIC), but requires Broad Community Support (BCS) in projects that includes:

(i)            Commercial development of the cultural resources and knowledge of Indigenous Peoples;

(ii)           Physical displacement from traditional or customary lands; and 

(iii)          Commercial development of natural resources within customary lands under use that would impact the livelihoods or the cultural, ceremonial, or spiritual uses that define the identity and community of Indigenous Peoples. 

For your further information, the Upper Tamakoshi Hydropower Project is funded by the government of Nepal. The following projects, funded with support from ADB, have activities in and around Lapsiphedi area:.

Loan 2808/Grant 0270/0271-NEP: Electricity Transmission Expansion and Supply Improvement Project 

Loan 3542-NEP: Power Transmission and Distribution Efficiency Enhancement Project 

Loan 3943/Grant 0711-NEP: South Asia Subregional Economic Cooperation Power Transmission and Distribution System Strengthening Project 

The above response from the ADB Mission to Nepal is a welcome and reassuring development but it must be followed with facts.  Indeed, the locals, especially the indigenous people living in Lapsiphedi, believe that the ADB should have had a much more active and meaningful engagement throughout the process.

While the ADB Mission to Nepal did meet the protesters last year after the first episode of violence by the law enforcement agencies against the protesters, there was no real follow up, at least with the locals.

We do stand to believe that the ADB Mission to Nepal has been holding conversations with NEA but it seems that such exercises have not been very effective, at least from the perspective of those who oppose the substation.  Otherwise, why did the AFP set up a check post in the area and why did they use violence?

That’s why the vastly held opinion, among locals, is that the ADB was not proactively trying to solve the standoff.  It means that the local indigenous community and other locals in Lapsiphedi did not believe, so far, that they had found in the ADB a reliable and trusted partner that was ready to safeguard and protect their rights.

If such perception, following the ADB Mission to Nepal’s statement, will change, is only because the ADB will follow through the statement sent for this piece, and will more proactively help solve the issue as it “stands ready to facilitate the peaceful resolution of any grievances”. We sincerely hope that this will happen.

What the locals say 

Locals still remain adamantly opposed to the project. They still believe that filing a lawsuit won’t help their cause due to complexities of the legal system in Nepal and a perception that the system is rigged against them. We asked some of them, including locally elected representatives, to voice their opinions.

Ramesh Napit, mayor of Shankarapur Municipality said the following: “I asked the CDO as the Mayor duly elected, don’t you think you should have to take consent from me? I am there, and I will fight against such an act. I told him that oppression is not the solution, but peace and dialogue will only resolve the tension”.

“The state should know why the indigenous peoples of this place are raising such a voice, and whatever inconvenience they are facing should be resolved by the state”.

Surya Bahadur Tamang, ward chair of ward-3, had this to share: “The present state structure is not the structure where the federal government order and the local government must obey. Rather, the local government is an independent entity. Local government knows the suffering of the people better than the federal government. As we are the representatives of local people, we will always fight for the favor of local people. The government should have to listen to them and resolve the issue through peaceful means”.

Tularam Tamang, head of local Tamang customary institution, was of the view: “The Tamang people of this place have faced injustice throughout history. They had to work as free labor, and their lands were converted into Guthi and Birta. The new development projects came as a new oppressor. We want meaningful consultation with the indigenous and local peoples. We are not in favor or against any projects. But while these projects occupy our lands, they should know that indigenous and local people have been living in this place for thousands of years, and they should have to be consulted and taken consent from before displacing them from their ancestral land.”

Ranajit Tamang, coordinator of Upper Tamakoshi Hydropower affected struggle committee said: “Our land was captured in the past, and the new substation and high-tension project also came to capture our land. We are fighting for our land. If they want to take our land, they must have to take consent.

Deploying forces, arresting villagers and injuring locals will not bring peace and consent. It always reminds our elders’ stories of where the military came to capture our lands. This is not the solution, and without our consent, how can development be for us? If we did not embrace development, how could it be “sustained” in the long term?”

Among the most interesting observations, the most striking was the point made by Tularam Tamang, the traditional leader of the Tamang community living in Lapsifedi. He focused on FPIC and he told us the following:

Obtaining Free Prior Informed Consent (FPIC)is not an illegal aspect, as the Nepal Electricity Authority (NEA) argues. On 31 Oct 2023 meeting with NEA, they argued that if they begin FPIC, they will be charged by the Commission for Investigation of Abuse of Authority (CIAA). This clearly shows that there is a huge flood of corruption, which they want to hide by implementing the project and deploying the law enforcement agencies.

We want meaningful consultation, which includes indigenous and local people, which is our constitutional right and which has been guaranteed not only by UNDRIP and ILO 169 but also by the ADB safeguard policy statement. We strongly demand to become responsible for state policy and ADB policy.”

The ADB Mission to Nepal stated that in their procedures, ADB’s Safeguard Policy Statement, the right to respect and uphold the FPIC of locals is not included. This is worrisome and problematic in itself but at the same time the indigenous people of the affected area do not really feel that the criteria underlying the so-called Broad Community Support (BCS) that the ADB requires for each of its activities, have been fulfilled. And this is simply because the locals are against the construction of the substation. As we write this, the construction of the substation is still going on at Lapsifedi, meaning that the peaceful protest of November 4 did not bring any desired impact.

Recently the NEA showed openness and inclination to accept the undertaking of a peaceful dialogue based on FPIC as per ILO 169 Convention. Kulman Ghising, the current managing director of Nepal Electricity Authority, following the incident on 17 and 18 November, in an unofficial meeting with the Struggle Committee and other stakeholders on 26 November said he agrees now to undertake a new process based on dialogue.

This development, while very late, is a welcome step forward but if the intentions are right, then the construction should, at very minimum, pause. We do hope that the ADB Mission to Nepal, from now onwards, would show much more active engagement with local stakeholders and facilitate a meaningful and impartial FPIC process.

Considering the recent decision by the World Bank to restart its financing of hydropower sector in Nepal after a long gap, we also approached the local World Bank Office in Nepal to understand the official position of the bank on how hydropower projects to be funded by it can fully uphold the intrinsic and inalienable rights of indigenous people. The WB recently signed an MoU with the ADB on the sustainable development of hydropower in the country.

Though the focus of the collaboration will be the proposed Upper Arun and Dudh Koshi hydropower projects, it is essential that the WB, together with the ADB, will stand as steadfast defenders of the rights of indigenous people.  We contacted the World Bank Nepal Office for comments on how it is going to guarantee the rights of indigenous people in upcoming hydropower projects that will be funded in Nepal by the Bank in the coming years.

World bank says:

We received the following statement attributed to Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal, and Sri Lanka:

The World Bank is committed to protecting the rights, cultural heritage, and well-being of indigenous peoples (IP) throughout the entire lifecycle of World Bank-financed projects, including upcoming hydropower projects, to contribute towards sustainable and respectful development in Nepal. This is achieved by working together with the government to implement comprehensive measures as specified in the World Bank’s Environmental and Social Framework (ESF).

The ESF includes a specific “Environmental and Social Standard dedicated to Indigenous Peoples” (ESS7). This standard ensures that projects supported by the Bank enhance opportunities for Indigenous Peoples to participate in and benefit from the development process in ways that do not harm their unique cultural identities and well-being.

The process involves rigorous screening to identify indigenous peoples’ presence in project areas. Where indigenous peoples are present in or have a collective attachment to the proposed project area, the project engages specialists and undertakes a process of meaningful consultations tailored to indigenous peoples as per the ESS7 and ensures their participation in project design. Moreover, the World Bank emphasizes the importance of “Free, Prior, and Informed Consent” (FPIC) in specific circumstances, ensuring collective support for project activities through culturally appropriate processes. The Bank believes that active inclusion of indigenous peoples’ leaders, community representatives, together with diverse voices within indigenous communities is essential to ensure an inclusive decision-making process.

To avoid negative impacts, alternative designs and technologies are explored under the project to minimize potential impacts to IP communities. In situations of unavoidable adverse impacts, the project engages affected indigenous communities to identify and design mitigation and compensation measures that respect the cultural significance of affected areas.

To address grievances, the World Bank requires the project to establish culturally sensitive grievance mechanisms readily accessible to indigenous peoples. Additionally, the Bank requires the project to support broader development planning initiatives, recognizing customary land tenure, addressing gender disparities, and preserving indigenous knowledge.

The importance of the statement of Mr. Faris Hadad-Zervos should not be undervalued. It provides assurance that any upcoming hydropower projects to be supported by the WB in Nepal is going to fully take into account the rights of indigenous people. The emphasis given by the WB on the FPIC is paramount and it will make a positive difference, if holistically and wholly followed and implemented.


Hydropower has been touted as one of the cleanest forms of energy. The whole South Asian region is starving for more of it because it is seen as an essential source of energy that can replace coal, the dirtiest of all the fossil fuels, of which, India, to whom Nepal started recently selling electricity, still vastly depends on for its development.

But is it really such a clean energy if local people, especially indigenous people are at the receiving ends, being abused and oppressed simply because they want to have a say, a voice on how such development projects will impact their lives? Multilateral financing agencies like the ADB, WB or the European Investment Bank, the latter also at the center of a previous controversy regarding the rights of indigenous people, have a huge responsibility.

They must work very closely with the Nepal government’s agencies, starting from NEA, ensuring they can build the know-how and expertise to fulfill and meet the international standards, including upholding the Guiding Principles on Business and Human Rights. Perhaps there is even enough time to revise the MoU signed between the ADB and the WB and make sure that it is going truly to be inclusive and centered around the rights of local communities, especially those of the indigenous people, the ancestral owners of many localities now becoming the epicenters of hydropower industry.

In relation to the Lapsifedi substation, we do hope that a sincere, open, trust-based process of reconciliation can start there. This is a process that, hypothetically, could become a model, a blueprint on how NEA and other major international development banks can work with locals. And let’s not forget that based on FPIC, there are no assured outcomes and local indigenous people and other citizens living in the area can still vocally and without hesitation, say “NO”. What would be a huge setback for NEA and the government of Nepal and its international financial backers, could be the start of awakening, the beginning of a new era where development in the country is truly inclusive and bottom up and wholly respectful of the rights of indigenous people.

RK Tamang is an Indigenous Activist and lecturer at Kathmandu University and Lumbini Buddhist University. Simone Galimberti writes on human rights and regional issues in Asia Pacific. Opinions expressed are personal.