Nepal’s Policy Corruption: Elite Immunity and Democratic Decay

May 23, 2025
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KATHMANDU: In his 1784 essay What is Enlightenment, Immanuel Kant argued that intellectual and political immaturity was a self-imposed condition, arising from a lack of courage to use one’s own understanding and to step out of dependency on others.

In Nepal, where institutional power is mostly exercised by legal exceptions and elite bargains, policymaking has become reflective of an 18th century adage.  People and both provincial and federal parliaments seem to have normalized policy corruption for lacking courage and restricting themselves in serving their political masters at the top. Rendering cabinet decisions immune at birth, Nepal’s political elite have literally locked citizens out of a meaningful public participation—turning them again into subjects instead of makers and shapers of public policy.

At this critical moment, Nepal is presented with a rare opportunity. There is a chance to amend the long overdue CIAA Act, which is under discussion in Parliament. First drafted six years ago, the amendment was revised and passed by the National Assembly (NA) two years ago. The amendment bill, however, instead of addressing the prime reason for corruption has not only retained the privilege in the federal context but also extended it to the provinces.

The Article 4(1) of the CIAA Act of 1991 explicitly exempts Cabinet’s “policy decisions” from CIAA investigation. It is also unclear what constitutes policy decisions. Unlike petty corruption—which includes bribery, procurement fraud, or bureaucratic extortion—policy corruption operates within the formal mechanisms of governance. They are often asserted as lawful.

The National Assembly (NA), in simple terms, recommended that certain types of policy decisions—other than those relating to larger public interest—should be subject to scrutiny by the CIAA. The proposal was then forwarded to the House of Representatives, where a subcommittee of the Committee on State Affairs and Good Governance reviewed it.

While the lower house primarily updates the CIAA’s mandate in line with federal restructuring, it also addressed a long-standing legal gap to a larger extent: the immunity granted to Cabinet-level “policy decisions.” The amendment recommends that certain decisions, including those related to public procurement (with some exceptions) and decisions normally under the jurisdiction of other public officials, such as bureaucrats, should fall under the CIAA’s jurisdiction. Furthermore, it suggests that decisions directly benefiting specific individuals or private/business interests—subject to certain conditions—should be open to investigation.

The existing provision’s impact is evident in several major cases. In the infamous scandals such as the Lalita Niwas-land-grab and the procurement of wide-body aircraft, only bureaucrats and middlemen faced judicial proceedings, while cabinet members who authorized the decisions remain unscathed to this date. Some prime ministers were excused by the same anti-graft body (despite the supreme court order to the contrary) that was supposed to take the corrupt to justice.

The same pattern can be seen in infrastructure projects such as the international airports in Pokhara and Bhairawa. Such projects moved forward through cabinet decisions despite having technical and financial concerns. Similarly, the disbursement of Maoist-era guerrilla allowances and the leasing of valuable Nepal Trust properties at lower rates have raised serious concerns. In each case, Cabinet decisions served as the legal shield, placing the transactions outside CIAA jurisdiction stalling democratic accountability.

It is now known that the Parliamentary sub-committee has already submitted its report. Now the bill rests with the Committee chair, and it is unlikely to see the light of day with recommended changes. It is not difficult to guess that this has been done in the direction of topmost leaders from the ruling parties.

They see the expanded jurisdiction of the CIAA a threat and therefore exerted pressure to ensure the amended provisions do not advance. Procedural delays and suppression of the bills have been the hallmark of how parliamentary committees function these days.

In the meantime, Nepal’s institutional credibility continues to erode. Transparency International’s corruption indices remain poor, especially in areas such as procurement and infrastructure. Journalists and watchdog groups consistently trace irregularities to Cabinet decisions that channel benefits specific political and business interests. As former Supreme Court Justice Ishwor Khatiwada has observed, shielding Cabinet decisions from scrutiny creates a systemic blind spot—one that undermines the entire architecture of public accountability.

Nepal now stands at a pivotal juncture. The amendment to the CIAA Act offers a rare window to restore institutional legitimacy. Our international reputation is also at stake as FATF’s has put Nepal in the grey list, which is alarming. The challenge before us is also a moral one: will Nepal remain a polity where public interest is subordinated to elite consensus for private purposes? I believe we can certainly take a step toward transforming this nation where citizens are not just subjects, but are empowered to understand, question, and participate in the making of the law, and parliament reciprocates to their constituencies.

(Neha Pokharel is interested in political economy.)