UNCLAS SECTION 01 OF 03 KATHMANDU 000800

SIPDIS

SENSITIVE

LONDON FOR POL/RIEDEL

E.O. 12958: N/A
TAGS: PGOV KCRM SNAR PINR NP GON
SUBJECT: Parliament Adjourns With Passage of Anti-
Corruption Bills

REF: KATHMANDU 555


1. (SBU) Summary. Parliament adjourned April 17 after
passing four anti-corruption bills. Legislators will
return in May for a budget session and to consider further
extending the state of emergency in effect since November

2001. The four new anti-corruption measures provide for
punishments for taking bribes and other public
malfeasance; the means to freeze accounts of officials
accused of corruption; the establishment of a special
court to prosecute corruption cases; and the impeachment
of members of constitutional bodies. Reformers welcomed
the new measures, but warned of obstacles to
implementation and vague language that could handicap the
measures' effectiveness. End Summary.

Nepal's Parliament Adjourns
--------------


2. (SBU) Nepal's Parliament adjourned its winter session
April 17, its last order of business the passage of four
bills targeted against public corruption. Parliament will
re-convene for a budget session in mid-May, in time for
legislators to consider an extension of the state of
emergency. [Note: The state of emergency expires May 26,
and Prime Minister Sher Bahadur Deuba has indicated that
he will ask Parliament to extend it. Originally declared
November 26, 2001, the emergency was extended by three
months in late February by vote of Parliament. The
Parliament Secretariat told us that this year the
government had decided to move up by one month
Parliament's annual budget session, which usually convenes
in June. This will obviate the need to convene a special
session to extend the emergency. End Note.]

Anti-Corruption Bill Locus of New Measures
--------------


3. (U) At the heart of the package of four new public
corruption measures is the "Anti-Corruption Bill," which
provides for punishments for accepting or giving bribes
and acquiring property with illegally-acquired funds.
Jail terms range from three months for accepting a bribe
worth Nepali Rupees (NRs.) 25 thousand (USD 325) to up to
ten years for a bribe of over NRs. 10 million (USD
130,000). The bill would forbid civil servants from
taking "donations" or gifts related to work without
permission, keeping commissions or other benefits gained
i

n the course of procuring or leasing goods and services,
and inflicting loss or damage to public property.

CIAA: Power to Freeze Accounts
--------------


4. (U) A second bill grants additional powers to the
Commission for the Investigation of Abuse of Authority
(CIAA). The CIAA would have the power to issue orders to
freeze bank accounts belonging to individuals under
investigation for corruption, and to seize property
acquired through illegal means even though the property is
in someone else's name. Public officials would be
required to prepare and submit financial disclosure
statements or face penalties. The statements would be
consulted in the future to gauge whether an official has
acquired property illegally or had been living beyond his
means.

Another Special Court
--------------


5. (U) The fourth anti-corruption measure provides for the
establishment of a Special Court to hear corruption cases.
[Note: Nepal's legislature has already mandated special
courts to hear cases related to narcotics trafficking,
trafficking in persons (TIP), and public security. These
special courts are located in Kathmandu, but take cases
from all over the country. NGOs working on TIP issues
have complained that many victims of trafficking cannot
afford the expense of traveling to the capital to make
their case, and for that reason some traffickers have
escaped prosecution. End Note.] The Special Court can
freeze the assets and hold the passports of accused
persons. Appeals from the Special Court go directly to
the Supreme Court. [Note: Previously, corruption cases
were first heard in Appellate Court. End Note.]

New Impeachment Mechanism
--------------


6. (U) An Impeachment Bill establishes a mechanism for
Parliament to impeach officials of constitutional bodies
for inefficiency, "bad character," or dishonesty. [Note:
Constitutional bodies include the Election and Public
Service Commissions as well as the Commission for the
Investigation of Abuse of Authority (CIAA). Previously
Parliament lacked the means to remove members of these
bodies for cause. End Note.] The bill would require a
vote of twenty-five percent of Parliament to commence an
impeachment proceeding. A panel of three - two MPs (from
different parties) and a legal expert - would then take
statements and conduct an investigation before making a
recommendation to the full house. The full chamber votes
on the panel's recommendation, with a simple majority of
MPs needed for impeachment.

New Measures Seen as Over-broad, but Amendments Fail
-------------- --------------


7. (SBU) A leading Nepalese businessman and member of
Parliament's Upper House criticized the new measures in a
discussion with Poloff. In part, problems with the bills
resulted from the extraordinary treatment they were given.
All four by-passed regular procedures and were pushed
through the entire process in a single week, an
unprecedented occurrence. Our contact explained that
although the laws had a "high-sounding name," their scope
was so broad as to render them meaningless. By expanding
the definition of civil servants, the bills would make a
crime of tipping a waiter in a restaurant partially owned
by the government. His greatest fear, however, was that
by expanding the powers of the CIAA, the new legislation
would make that body even less effective than it has been.
The Parliamentarian introduced amendments to redress these
problems, and although the Upper House accepted the
amendments, the Lower House voted them down.

Laws and Sausages
--------------


9. (SBU) The amendments failed in the Lower House after
the ruling Nepali Congress Party (NCP) whip, who had a
large part in pushing through the original, non-amended
versions of the bills, took the Upper House amendments as
a personal affront. While NCP members were working on a
compromise to ease his wounded pride, opposition leader
Madhav Nepal took the floor to fight the amendments.
Nepal argued that after a multi-party consensus on
fighting corruption had been forged in the Lower House,
the Upper House had come along and substantially changed
the legislation. Nepal proposed rejecting the amendments
in toto, and in the face of resistance from the whip and
the opposition party, the rest of the Lower House fell in
line.

Implementation Uncertain
--------------


10. (SBU) Ruling party MPs praised the session's
accomplishments, which also included new legislation on
women's property rights (Reftel) and the establishment of
commissions on women's and dalits' (lower caste) issues.
Altogether sixteen bills - including the four anti-
corruption measures - have been sent to the Palace and
await formal Royal assent, required for a bill to become
law under Nepal's Constitution. Observers commented that
although the new measures are welcome, the test will come
when the government attempts to implement them. This is
especially true of the anti-corruption measures, the Amcit
head of the local National Democratic Institute (NDI)
related.

Comment
--------------


9. (SBU) Widely viewed as corrupt and unresponsive,
Nepal's political leaders know they have to put their
house in order. In this year's Parliamentary session they
made a tentative effort in that direction. Although far
from perfect, the new anti-corruption measures are a good
start to rolling back a problem that affects both Nepal's
economy and its ability to rally support for efforts to
quell the Maoist insurgency. The best reason to celebrate
may be that the quantity of legislation pushed through
during this year's session of Parliament greatly exceeded
the output last year - when opposition party leaders led a
boycott to protest then-Prime Minister G.P. Koirala's
alleged involvement in an airplane-leasing scandal. Anti-
corruption crusaders have committed to fighting for more
and better legal and regulatory tools to press their
cause, which they rightly view as central to the
development of Nepal's young democracy.

MALINOWSKI