On January 15, the Supreme Court of Nepal delivered a landmark verdict banning development in protected areas, a decision that sent shockwaves throughout the country.

The ruling has had significant consequences, with environmentalists applauding it, while those involved in ongoing or proposed projects in protected areas expressed concerns. They fear that the decision could negatively impact both their projects and the country’s overall economy.

The Supreme Court’s ruling marks a pivotal moment in Nepal’s conservation history. The court ordered the annulment of provisions that previously allowed infrastructure development in national parks.

These provisions had permitted projects like hydropower plants, hotels, and railway lines to be built within protected areas.

The constitutional bench of the Supreme Court, led by Chief Justice Prakash Man Singh Raut and Justices Sapana Pradhan Malla, Kumar Regmi, and Dr. Manoj Kumar Sharma, struck down Sections 5(A) and 6(1A) of the National Parks and Wildlife Conservation Act, 2029.

Justice Sapana Pradhan Malla’s concurrent opinion added significant weight to the decision. However, Justice Hari Phuyal dissented, arguing that the provisions in question should not have been annulled.

The petitioners had challenged the validity of Sections 5(A) and 6(1A), which were added to the National Parks and Wildlife Conservation Act, 2029, through the Act to Amend Certain Nepal Acts to Facilitate Investment, 2081. They argued that these provisions contradicted Subsection (3) of Article 30 of the Constitution of Nepal.

Environmental defenders hailed the verdict as a major victory for the protection of Nepal’s natural areas. While the court issued a brief statement after the ruling, the full text of the decision is expected to be released soon.

The provisions that were annulled had been introduced in April 2024, just ahead of the Nepal Investment Summit, under the government led by Maoist Chairman Pushpa Kamal Dahal ‘Prachanda.’

The Court observed that Section 6(1A) of the National Parks and Wildlife Conservation Act, 2029, allowed for the approval of large-scale physical development projects within national parks, reserves, or conservation areas. Similarly, Section 5A was introduced for its implementation.

An ordinance titled “To Amend Some Nepal Acts to Facilitate Investment” had been enacted to allow private and foreign investment in infrastructure projects within protected areas. This ordinance was later endorsed by both houses of the Federal Parliament in July and received presidential approval.

The Supreme Court annulled these provisions, citing a violation of fundamental rights. The ruling effectively protects Nepal’s vast network of 12 national parks, six conservation areas, one hunting reserve, one wildlife reserve, and 13 buffer zones.

These protected areas span from the lowland Terai to the high mountains, ensuring the preservation of Nepal’s natural heritage.

Since the current verdict is a brief order, the full text of the decision will be released at a later date. However, the key takeaways from the verdict are outlined below:

1. When did this issue begin?
   To attract both domestic and foreign investment, the Government of Nepal introduced amendments to several Acts related to investment facilitation in 2081. These amendments were part of the preparations for the investment summit.

The amendments covered ten acts, including:

• The Land Act, 2021
• The National Parks and Wildlife Protection Act, 2029
• The Wildlife Protection Act, 2029
• The Land Acquisition Act, 2034
• The Electronic Transactions Act, 2063
• The Special Economic Zones Act, 2073
• The Public-Private Partnership and Investment Act, 2075
• The Foreign Investment and Technology Transfer Act, 2075
• The Forest Act, 2076
• The Industrial Business Act, 2076

1. Why did the government propose amendments to these acts?
   The amendments were introduced to create an investment-friendly environment. These provisions were also part of the Investment Summit at the time. It was believed that the amendments would facilitate the registration and operation of industries, as well as support the establishment of industries in special economic zones.
2. What is stated in Section 5A and Section 6(1A)?
   Section 5A states that the Government of Nepal can designate any area within national parks, reserves, or protected areas as sensitive by publishing a notice in the Nepal Gazette, if deemed necessary.

Section 6(1A) states that, except for areas designated as sensitive under Section 5A, the Government of Nepal may approve the operation of projects within national parks, reserves, protected areas, or buffer zones, provided that ecological balance is maintained.

These projects may include national priority projects, board-approved projects, or projects of national importance. In buffer zones, local, provincial, and federal governments may also carry out projects, but activities like ecotourism and other industries cannot be conducted without approval from the relevant authority.

3. What was the petition filed for?
   The petition sought to declare the provisions under Section 5A and Section 6(1A) of the National Parks and Wildlife Conservation Act, 2029, as invalid and annulled, arguing that they were contrary to Subsection (3) of Article 30 of the Constitution of Nepal.
4. Why were these amendments challenged in court?
   Environmentalists and the general public raised serious concerns that the amendments could lead to ecological imbalances in areas rich in biodiversity. For context, about 45% of Nepal’s land area is covered by forests. According to the 2024 Environmental Performance Index, Nepal ranks 67th in actions toward retaining natural ecosystems and protecting biodiversity within its borders. Nepal is part of the world’s biodiversity hotspot and ranks 49th globally. A total of 118 different ecosystems have been identified in Nepal. One study found that 45% of the forest cover benefits 60% of Nepali households, who are directly dependent on forest resources.
5. How long did it take to get this verdict?
   It took more than 1.5 years to reach this verdict.
6. What specific parts of the amendments were annulled by the Supreme Court?
   The Supreme Court annulled Section 5A and Section 6(1A) of the National Parks and Wildlife Conservation Act, 2029.
7. How does the Supreme Court’s ruling relate to the Constitution?
   Article 30 of the Constitution of Nepal guarantees the right to a clean environment as a fundamental right, while Subsection (3) of the same article allows for legal provisions that balance development and environmental concerns.

Furthermore, Article 51(g) of the Constitution emphasizes state policies to protect, promote, and ensure the environmentally friendly and sustainable use of natural resources, in line with national interests. It also advocates for inter-generational equity and the equitable distribution of benefits, giving priority and preferential rights to local communities.

Article 51(f)(2) highlights environmentally friendly development policies, while Article 51(l) focuses on eco-friendly tourism industries as a key component of the national economy.

The Supreme Court’s decision annulled an amendment to the National Parks and Wildlife Conservation Act that previously allowed development activities in protected areas. As a result, projects that have already incurred significant investments and fulfilled obligations such as royalties and taxes are now in limbo.

This includes the identification, protection, promotion, and publicity of Nepal’s cultural, religious, archaeological, and natural heritages. It also calls for the development of environmental policies related to tourism and prioritizes local communities in the distribution of tourism industry benefits.

The Court observed that Section 6(1A) of the National Parks and Wildlife Conservation Act, 2029, allowed for the approval of large-scale physical development projects within national parks, reserves, or conservation areas. Similarly, Section 5A was introduced for its implementation.

Therefore, the Court declared Section 5A and Section 6(1A), added to the National Parks and Wildlife Conservation Act, 2029, through Section 3 of the Act to Amend Certain Nepal Acts to Facilitate Investment, 2081, as invalid and annulled them from their inception.

8. What is the significance of Article 133(1) in this ruling?
   Article 133(1) of the Constitution of Nepal grants the judiciary the power to review laws and their compatibility with the Constitution. It states that any Nepali citizen may file a petition in the Supreme Court to have any law, or part of it, declared void if it is inconsistent with the Constitution, especially if it imposes unreasonable restrictions on fundamental rights or for any other reason.

Additionally, if a law formulated by a Provincial Assembly conflicts with federal law, or a law formulated by a Municipal or Village Assembly contradicts federal or provincial law, the Supreme Court has the extraordinary power to declare the law void, either ab initio (from the beginning) or from the date of its decision, if found to be inconsistent.

9. What happens now that the provisions have been annulled?
   With the annulment of Sections 5A and 6(1A), the National Parks and Wildlife Conservation Act will revert to its previous form.
10. Will the government be able to amend the Act again?
    Yes, the government can propose amendments to the Act again in the future.
11. How does the Supreme Court verdict affect conservation efforts in Nepal?
    The Supreme Court’s verdict strengthens Nepal’s commitment to environmental protection. It also ensures that the local community’s long-standing conservation efforts are preserved for the future. Additionally, the ruling safeguards forests and protected areas from potentially harmful development activities.

Similarly, it helps protect natural resources on which communities rely for various resources and livelihoods. It also preserves Nepal’s global reputation for natural tourism, which could benefit eco-tourism in the long run.

1. How does this decision impact Nepal’s commitment to global environmental agreements?
   Nepal has ratified international conventions such as the Convention on Biological Diversity (1992), the United Nations Framework Convention on Climate Change (1992), the 1972 World Heritage Convention, and the 1971 Convention on Wetlands. The ruling strengthens Nepal’s commitment to these international agreements.
2. How does this affect ongoing or proposed development projects?
   Projects based on the provisions of Sections 5A and 6(1A) will need to be reviewed and may face stricter environmental regulations. Developers may undergo rigorous environmental assessments before, during, and after operations. They will also need to comply with stricter environmental standards, which could increase project costs and timelines.
3. How does this verdict impact energy projects in Nepal?
   The Supreme Court’s annulment could potentially impact energy development projects located in or near protected areas. These projects may face delays and might need to undergo additional environmental assessments. Developers may have to find alternative sites, which could increase the overall cost of energy production.

While there is speculation about the future of energy projects in Nepal, it is believed that the government will find a middle path to balance development and environmental concerns. However, delays in decision-making could lead to longer development periods for projects in sensitive ecological zones, resulting in higher energy costs for the public.

4. Does the Constitutional Bench Verdict Impact the Implementation of the BRI in Nepal?
   Yes, the Supreme Court’s constitutional bench verdict significantly impacts the implementation of projects under the Belt and Road Initiative (BRI) in Nepal. Many of the projects outlined in the agreement signed by Prime Minister KP Sharma Oli during his visit to China last December are now set to be put on hold. These projects face legal and constitutional hurdles, as they conflict with Nepal’s laws. The Supreme Court’s ruling has effectively closed the pathway opened by the government for large-scale construction in national parks and protected areas.

The Constitutional Court’s final decision establishes a legal precedent that cannot be reviewed or overturned by the government. While the court may soften the language in the full text, the fundamental restriction on major infrastructure development within protected areas remains.

Several BRI projects involve the construction of infrastructure within national parks and conservation areas. Projects such as the Tokha-Chhahare Tunnel, Hilsa-Simikot Road Project, Kathmandu-Khandbari Road, Nepal-China Cross-Border Railway, and the Geelong-Rasuwagadhi-Chilime Cross-Border Power Transmission Line are directly affected, as they pass through or touch protected lands.

Key areas impacted include Shivapuri National Park, Shey-Phoksundo National Park, Sagarmatha National Park, and Makalu Barun National Park. The Supreme Court ruling blocks Chinese-backed projects like the Kerung-Kathmandu Railway and the Tokha-Chhahare Tunnel, both of which fall within Langtang National Park.

Other affected areas include:
• Lamabagar Checkpoint: Located in the Gaurishankar Conservation Area.
• Highway Connecting Jogbani, Biratnagar, Dhankuta, and Kimathanka Checkpoint: Passing through Makalu Barun National Park.
• Tinkar Checkpoint: Situated in Api Nampa Conservation Area.
• Olangchungola Checkpoint: Within Kanchenjunga Conservation Area.
• Korola Checkpoint in Mustang: Falling under Annapurna Conservation Area.

Development of infrastructure at these strategic locations has been hindered following the court’s verdict due to their location within protected areas.

Under the Energy Development Roadmap, 2081 BS, Nepal aims to generate 28,500 MW within the next decade. However, if these projects are delayed or canceled, the country risks electricity shortages, impacting both domestic consumption and export potential.

While the government had amended the law ahead of the investment conference, ostensibly to facilitate investments, critics argue that the real motive was to pave the way for BRI projects in northern Nepal.

5. How does the private sector view the verdict’s impact on energy production?
   While environmentalists celebrate the Supreme Court verdict as a landmark decision, the Independent Power Producers Association Nepal (IPPAN) has expressed disappointment, warning of its severe consequences on Nepal’s energy sector. IPPAN stated that the ruling jeopardizes 267 hydropower projects with a combined capacity of 19,736 MW, which had been planned under legal frameworks.

The Supreme Court’s decision annulled an amendment to the National Parks and Wildlife Conservation Act that previously allowed development activities in protected areas. As a result, projects that have already incurred significant investments and fulfilled obligations such as royalties and taxes are now in limbo.

General Secretary Balaram Khatiwada emphasized that this verdict could severely undermine Nepal’s hydropower ambitions and impose significant challenges on private sector players. According to IPPAN, the decision could result in an estimated annual revenue loss of over Rs. 400 billion, primarily from halted royalties and tax contributions.

The association warned that the restriction on infrastructure development in protected areas not only threatens ongoing projects but could also derail Nepal’s broader energy development goals.

Under the Energy Development Roadmap, 2081 BS, Nepal aims to generate 28,500 MW within the next decade. However, if these projects are delayed or canceled, the country risks electricity shortages, impacting both domestic consumption and export potential.

IPPAN’s concerns highlight the tension between conservation priorities and Nepal’s aspirations to harness its hydropower potential, which remains critical for sustainable economic growth and energy security.

Three Key Messages of the Verdict

1. Balance between Conservation and Development
   The judgment emphasizes the need for a balanced approach between development and environmental conservation. Nepal’s protected areas are integral to environmental preservation and are considered a trust for future generations. It also upholds the right of the public and stakeholders to raise concerns if a project negatively impacts the environment. The Constitution of Nepal allows for legal measures to ensure an appropriate balance between development and the environment.
2. Secures Community Rights
   The court safeguards the rights of local communities living in and around protected areas. It ensures that these communities can access benefits from these areas while promoting their active participation in management and conservation efforts.
3. Constitutional Provisions
   This decision upholds the precautionary principle, which advocates for preventing potential environmental harm and adhering to sustainable development practices. The revised provisions in the National Parks and Wildlife Conservation Act align with the law’s intent, protecting the environment from potential harm.