<a href="https://archive.nepalitimes.com/blogs/thebrief/2015/12/21/axiata-buys-80-stake-in-ncell/comment-page-1/">Malaysian conglomerate Axiata</a> surprised everyone on 1 December when it suddenly announced its exit from Nepal after selling its stake in the telecommunication service provider Ncell. But breaking up may be hard to do.&nbsp; The company said that it had entered into a Share Purchase Agreement (SPA) with UK-based Spectrlite UK Limited for the sale of the St Kitts and Nevis-registered Reynolds Holdings Limited, which owns about 80% equity stake in Ncell. The group said in its statement its decision to withdraw from Nepal was ‘based on a thorough evaluation of the prevailing business environment in Nepal, which led to the conclusion that continuing operations under the current conditions of unfair taxation and regulatory uncertainties was no longer sustainable for Axiata.’ Axita’s last quarterly report stated that a meeting of its board of directors had decided to sell its shares in Ncell on 29 September. Axiata acquired Reynolds from the <a href="https://archive.nepalitimes.com/article/interview/Nepal-very,1104">Swedish company TeliaSonera</a> for $1.365 billion in 2016. In contrast, the group’s terms of the SPA with Spectrlite UK include a fixed consideration of $50 million— the amount that Axiata will receive from the sale.&nbsp; This sounds fishy to Nepali regulators and government authorities who suspect that Axiata’s exit from Nepal could be an attempt by the group to evade taxes. Nepal Telecommunications Authority (NTA) has said that it was not notified as per rules of Axiata’s sale of Ncell, and has sent a letter to Axiata saying the company should have got approval first. Nepal’s telecommunications regulation stipulates that the NTA must approve the sale and purchase of more than 5% of the paid-up capital of a business. <a href="https://archive.nepalitimes.com/blogs/thebrief/2016/06/03/taxing-time-for-ncell/">Ncell’s acquisition became disputed in 2016</a> because the agreement between the selling and purchasing parties had occurred outside Nepal, which meant that the Nepal government had not been paid the capital gains tax from the profits of the sale.&nbsp; Ncell was subsequently levied Rs62.65 billion in capital gains tax by the Nepal government, which Axiata challenged in the Supreme Court. After <a href="https://nepalitimes.com/here-now/supreme-court-weighs-in-on-ncell-tax-dispute">the court ruled in the government’s favour in February 2019</a>, the conglomerate took the case to the International Centre for Settlement of Investment Disputes (ICSID) in May of the same year. The international arbitration institution also ruled in Nepal government’s favour in June 2023.&nbsp; As it stands, the sale and purchase agreement has come under scrutiny not only because of Axiata’s non-compliance with legal procedures, but also because of the murkiness of the purchasing company, Spectrlite UK which was registered in the UK by a Singapore-based Nepali-origin businessman Satish Lal Acharya only two months ago, with records showing its paid up capital as just $1.&nbsp; Sunivera Capital Ventures, which owns the remaining 20% shares of Ncell, is also owned by Acharya. The businessman therefore now has complete ownership of the service provider.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20231205141212_52cc834141b8b196220b71fb3e0b07af57801b5e28b690b470196eaa8e8e71ba.jpg" data-media-id="editor_4" data-image-id="20231205141212_52cc834141b8b196220b71fb3e0b07af57801b5e28b690b470196eaa8e8e71ba" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Ncell"> </figure>  Despite having sold Ncell’s shares for $50 million, Axiata’s agreement with Spectrlite also includes a conditional consideration, per which Axiata will receive a share of ‘distributions contingent upon the future business performance and net distributions declared by Ncell until 2029, and any windfall gains secured by the Purchaser (Spectrlite UK) during this period’, read the group’s statement.&nbsp; This means Axiata will continue to receive a share of Ncell's income until 2029 — getting 80% of its profits in 2023, 40% in 2024 and 2025, 30% in 2026 and 2027, as well as 20% in 2028 and 2029. This is <a href="https://nepalitimes.com/news/nepal-has-strong-case-on-ncell-arbitration">not the first tax dispute in Nepal involving Axiat</a>a. The Large Taxpayer Office in Kathmandu had levied the company an additional Rs60 billion tax upon change of ownership. Section 57 of the Income Tax Act states that if the ownership of any entity changes by 50% or more as compared to its ownership until before the last three years, the entity shall be deemed to have disposed of the property under its ownership or the liability borne by it. The ICSID ruled that Axiata has discharged its tax liability after paying the capital gains tax to the government, but the case is still pending in Nepal’s Supreme Court. Moreover, Axiata is also said to have been unhappy with expensive fees for the renewal of its mobile telecommunication license. NTA charges Rs20.1 billion for licence renewal, and it is valid for 10 years. But Ncell’s 25-year license operational period (as mero Mobile) coming to an end within the next six years in August 2029.&nbsp; Section 33 of the Telecommunications Act also stipulates ownership of land, building, plant, equipment and other structures related to the telecommunications service developed with more than 50% of its investment by a foreign person or corporate body shall shift to the government after the licence expires. It is assumed that Axiata sold its shares in Ncell to avoid those risks. If Satish Lal Acharya, a businessman of Nepali origin, has majority ownership of Ncell, the license can be renewed, however Acharya is a Singapore resident and it is unclear whether or not he has renounced his Nepali citizenship.&nbsp; With the change in ownership, Ncell’s liabilities have also shifted to Acharya. Last year, Ncell received a credit rating from ICRA Nepal to obtain loans exceeding Rs28 billion. Axiata and the Nepal government could be entering a long and complicated legal battle over Ncell’s sale, purchase and sale of ownership. NTA Chair Purushottam Khanal has said that he will seek clarification from Axiata. Officials at the Internal Revenue Office also say that it will be difficult for Axiata to avoid paying taxes.&nbsp; The Public Account Committee of Nepal’s Parliament on Monday sent letters to the Internal Revenue Department, the Office of the Company Registrar and the NTA seeking information on the purchase and sale of Ncell.&nbsp; Chair Rishikesh Pokhrel of the Committee, said the body has sought clarification as to the legality and the financial effects of the transaction. The Patan High Court after an initial hearing last week following Axiata’s announcement issued an order asking the company to present its reasons for the sale of shares. The High Court has scheduled the next hearing for 11 December.

original

674x448

610x380

500x500

400x266

400x240

400x203

301x200

1250x600

1084x550

Axiata may find breaking up hard to do

<figure><img width="1500" height="1149" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108121136/636a40019c7e80680e04a5f8jpeg.jpg" alt=""/><figcaption>Illustration: BHANU BHATTARAI</figcaption></figure>The spate of investment treaty arbitrations that have inundated developing countries in recent times has now reached Nepal. At stake is a Rs39.06 billion tax imposed by the Large Taxpayers Office (LTO) on <a href="https://www.nepalitimes.com/opinion/ncell-ruling-opens-a-can-of-worms/" target="_blank" rel="noopener">Ncell</a>, following a decision of the Supreme Court.Ncell subsequently contested the LTO tax assessment, submitting that it is liable to pay only Rs14.5 billion. It also obtained an interlocutory interim stay from the Supreme Court on these grounds.The initiation of investment treaty arbitration by Axiata Investment UK Ltd (Axiata UK) through an intermediate special purpose vehicle not directly investing in Nepal, while challenging the same action before the Supreme Court of Nepal and bypassing other statutory remedies, raises several questions as to the use of investment treaty arbitration and the International Centre for Settlement of Investment Disputes (ICSID).Read also:<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/opinion/ncell-ruling-opens-a-can-of-worms/" target="_blank" rel="noopener">Ncell ruling opens a can of worms</a>, Semanta Dahal<a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/here-now/supreme-court-weighs-in-on-ncell-tax-dispute/" target="_blank" rel="noopener">Supreme Court weights in on Ncell tax dispute</a>, Sharad OjhaAxiata UK filed a request for arbitration before the ICSID against the Government of Nepal regarding the capital gains tax levied by Nepal’s tax authorities on the indirect transfer to Axiata UK of an 80% stake in <a href="https://www.nepalitimes.com/here-now/supreme-court-weighs-in-on-ncell-tax-dispute/" target="_blank" rel="noopener">Ncell</a> through the sale of Reynolds Holdings Limited, by the previous foreign investor, TeliaSonera Norway Nepal Holdings AS to Axiata UK.The arbitration was initiated on the basis of the bilateral investment treaty between the governments of Nepal and the UK (UK-Nepal BIT) on 2 March 1993. In parallel, Ncell has also initiated proceedings before the Supreme Court of Nepal challenging the CGT assessment by the tax authorities.In doing so, Ncell and its indirect shareholder Axiata UK have not availed statutory remedies otherwise available under Nepal's law to challenge the assessment. This presents the government with some credible arguments to resist the investment treaty claims.First, it is doubtful whether Axiata UK’s indirect acquisition of Ncell’s shares qualifies as an ‘investment’ in terms of Article 1(a) read with Article 8(1) of the UK-Nepal BIT. Axiata UK’s role in the transaction is limited to its acquisition of Reynolds, which owns 80% of the shares of Ncell.Moreover, Axiata UK is a wholly owned subsidiary of Malaysia-based Axiata Group Berhad. The Government of Nepal could argue that Axiata UK Ltd has no real interest in the transaction and is merely being used as a vehicle to bypass the jurisdictional hurdle of the UK-Nepal BIT.Previous investment treaty arbitrations have found that a mere passive investor, such as a company which conducts no business of its own but merely holds shares in a company incorporated in the host state, will not be able to invoke the jurisdiction under a bilateral investment treaty.It could be argued that Axiata UK is required to exhaust local remedies before resorting to arbitration under the UK-Nepal BIT. The ICSID Convention expressly provides that if a dispute arises, parties may refer the dispute to arbitration if they are unable to resolve it within three months ‘through pursuit of local remedies or otherwise’. By its decision on 6 February, the Supreme Court held that capital gains tax could be levied on the transaction. Thereafter, the capital gains tax was computed by the assessing authority, and this assessment was also challenged by Ncell by way of a writ petition before the Supreme Court on 21 April. Subsequently, Axiata UK submitted its request for arbitration, as announced on 26 April.The sequence of events shows that the decision to invoke arbitration under the UK-Nepal BIT was made immediately pursuant to the calculation of capital gains tax liability, instead of pursuing local remedies to challenge the assessment. The strategy of ignoring statutory remedies and instead relying on constitutional and investment treaty protections appears to have been motivated by the desire to avoid the requirement of depositing one-third of the disputed tax liability as a condition to challenge the assessment under Nepali tax laws.The government can now argue that the invocation of arbitration is against the letter and spirit of the UK-Nepal BIT and the ICSID Convention.Ncell’s present challenge before the Supreme Court is limited to the amount of tax, and Ncell has itself admitted a portion of the liability. It is questionable whether a dispute on the quantum of tax can be referred to arbitration under the UK-Nepal BIT.In matters involving taxation, a claim for expropriation will ordinarily involve showing that the tax liability in question has been imposed as part of a designed and deliberate set of measures to deprive the investor of the value of their investment. Such claims in previous cases have typically involved retrospective legislation where local tax law has been applied in a patently arbitrary and discriminatory manner by the host state. Establishing such a high threshold may be difficult for Axiata UK.The Government of Nepal can now consider all options available, including raising preliminary objections on jurisdiction under Rule 41 of the ICSID Arbitration Rules and Article 41 of the ICSID Convention, at the earliest.Semanta Dahal and Vikas Mahendra are lawyers and partners at Abhinawa Law Chambers (Nepal) and Keystone Partners (India).

Nepal has strong case on Ncell arbitration

<img width="1050" height="696" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108101144/636a25c89c7e80680e0439dfjpeg.jpg" alt=""/>The Supreme Court’s verdict on Wednesday requiring the Malaysian company Axiata and Ncell Nepal to pay billions capital gains tax on their purchase of Nepal’s largest private telecom provider Ncell will end a <a href="http://archive.nepalitimes.com/blogs/thebrief/2016/06/03/taxing-time-for-ncell/" target="_blank" rel="noopener">controversy</a> that has dragged on for three years, but is expected to further chill <a href="https://archive.nepalitimes.com/regular-columns/Comment/making-nepal-fdi-friendly,853" target="_blank" rel="noopener">Nepal’s foreign investment climate</a>.A full bench of the apex court headed by Chief Justice Cholendra Shumsher Rana decided after two days of hearings that Reynolds Holdings Ltd was a shell company and the real owner of <a href="http://archive.nepalitimes.com/blogs/thebrief/2016/05/16/the-tax-in-question/" target="_blank" rel="noopener">Ncell</a> was <a href="http://archive.nepalitimes.com/blogs/thebrief/2015/12/21/axiata-buys-80-stake-in-ncell/comment-page-1/" target="_blank" rel="noopener">Axiata</a>, and it was liable to pay the tax along with Ncell Nepal.Justices Rana, Mira Khadka, Bishwambhar Prasad Shrestha, Ananda Mohan Bhattarai and Tanka Bahadur Moktan were deliberating on a public interest litigation writ filed by former secretary and advocate Dwarika Nath Dhungel and six others that Ncell Nepal and Axiata were responsible to pay capital gains tax when they bought the company from the <a href="http://archive.nepalitimes.com/article/interview/Nepal-very,1104" target="_blank" rel="noopener">Swedish-Finnish telecom company TeliaSonera</a> in 2016.When TeliaSonera sold Reynolds Holdings shares in Ncell to Axiata for over $1 billion, Nepal’s Large Tax-payers’ Office had said Reynolds owed the government Rs35 billion in taxes and demanded it pay the amount and fines to a total of Rs61 billion.Ncell Nepal refused to pay that full amount, and transferred only Rs21 billion capital gains tax. After this, the writ was filed, and the Supreme Court on Wednesday also rejected a case filed by Ncell.The case became controversial after two foreign investors traded ownership of a Nepal-based telecom company. Since TeliaSonera has already left Nepal, the Court found that the buyer is liable to pay capital gains tax if the seller did not.Senior advocate Surendra Bhandari says that it is international practice that the seller has to pay capital gains tax on any sale of assets, but says the Supreme Court is right in assessing that the seller was allowed to leave the country without paying tax and to put the onus on the buyer.Wednesday decision now sets a precedent for the buyer to also be responsible for paying capital gains tax. Officials at the Internal Revenue Service say that although the country’s treasury will benefit from the tax payment, there has been no investigation into why the seller was allowed to get away without paying taxes, and fears that the case will have negative repercussions on future investment.Eighty percent of Ncell’s ownership is with Reylonds Holding registered in the British Virgin Islands and 20% with Niraj Govinda Shrestha. Ncell’s main promoter was Reynolds Holding through TeliaSonera’s office in Norway.According to Nepal’s tax laws, TeliaSonera’s sale of Ncell to Axiata had a capital gains tax liability of Rs35 billion. Axiata had written to the Internal Revenue Office before the sale if it was liable to pay capital gains tax in Nepal, but there was no reply from its director at the time, Chudamani Sharma.After that the tax controversy got mired in politics, with various party leaders and former CIAA chief <a href="https://archive.nepalitimes.com/regular-columns/Legalese/parliament-and-court-plays,822" target="_blank" rel="noopener">Lokman Singh Karki</a> vying for underhand deals that would let the guilty go free. Says advocate Bhandari: “The Supreme Court decision seems to be driven by the logic that any buyer should first inquire about the liabilities of the seller before any purchase.”However, other retired revenue officials say it is unfair to blame Axiata, and ask it to pay capital gains tax that should have been paid by TeliaSonera. He says the really guilty party here are the politicians who allowed TeliaSonera to leave without paying taxes, and this will dim Nepal’s investment climate just before an Investment Summit planned for next month, and after <a href="https://www.nepalitimes.com/here-now/to-davos-with-hammer-and-sickle/" target="_blank" rel="noopener">Prime Minister KP Oli’s visit to Davos</a> with the message that <a href="https://www.nepalitimes.com/editorial/crony-communism/" target="_blank" rel="noopener">Nepal was open for business</a>.The Surpeme Court verdict has also exposed a loophole in Nepal’s tax laws that allows shell companies to get away without paying taxes. TeliaSonera had its dividends frozen in Nepal by the Large Tax-payers’ Office, but the Supreme Court allowed the company to repatriate its profits.   According to the <a href="https://www.nepalitimes.com/latest/nepalis-in-tax-havens-swiss-banks-money-laundering/" target="_blank" rel="noopener">Nepal Leaks exposes</a> by the Centre for Investigative Journalism and the International Consortium of Investigative Journalists, Ncell owners had used the company to launder money as foreign direct investment. Ajeya Raj Sumargi, a businessman close to the former Maoist party and Birendra Mahato of the Federal Socialist Forum Nepal and brother of billionaire overseas Nepali Upendra Mahato were implicated in documents leaked through the Panama Papers about tax havens.The verdict this week opens the door for Nepal to tax FDI that is coming in from offshore tax havens.   Read also: <a href="https://archive.nepalitimes.com/regular-columns/Comment/making-nepal-fdi-friendly,853" target="_blank" rel="noopener">Making Nepal FDI friendly,</a> Shyamal K Shrestha<a href="http://archive.nepalitimes.com/news.php?id=962#.XFwMylUzaUk" target="_blank" rel="noopener">Fight for FDI</a>, Ashutosh Tiwari<a href="https://archive.nepalitimes.com/article/from-nepali-press/Ncell-has-complied-to-all-obligations,3047" target="_blank" rel="noopener">"Ncell has obliged to all obligations"</a>

Supreme Court weighs in on Ncell tax dispute

The daily 10-hour curfew at Tribhuvan International Airport from 8 November that will last five months has affected tourism during Nepal’s peak season, with some hotels and trekking agencies here reporting cancellations into spring next year. The reduced hours at Nepal’s main aviation gateway till 31 March means that a third of all flights have been cut. This has also caused ticket prices to surge by up to eight times of normal fares. For example a Kathmandu-Delhi ticket that used to cost Rs12,000 is now listed at Rs50,000, and even then seats are not available.&nbsp; “Especially if they are here to trek, change in flight dates can cause tourists to miss their connections,” says Jagan Timilsina, who runs a trail running and outdoor education business. &nbsp; Pokhara is feeling the brunt as hotels report last-minute cancellations for November because of flight disorders. Some hoteliers also say although there have been some cancelled trips, most itineraries have been rescheduled.&nbsp; Hari Prasad Sharma Gaire of the local chapter of the Hotel Association of Nepal says the Kathmandu airport closure should have been timed for the off-season. He told us: “Starting construction during the peak tourist season was a mistake and will cause the tourism industry to lose a lot of business. The upgrade could have been spread out over a longer time but closed for fewer hours at night so that disruption was minimal.”&nbsp; Nearly a third of the 1.2 million tourists who visit Nepal annually come to Pokhara, which is also the gateway to Mustang, the Annapurna treks and pilgrimage tourism to Muktinath. Located by scenic lakes with a range of adventure sports like hot air ballooning, paragliding, canyoning, bungee and ziplines, Pokhara is also popular among diaspora Nepalis. “Besides its own attractions, Pokhara is really the hub for central Nepal, and we have been trying to get visitors to extend their stay here,” says Timilsina, who started out as a trekking porter and rose up the ranks to be an expedition guide and entrepreneur. &nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2024111603114_0e071ce63ea9b0a9a7ee76f8c3cea0ff08c6767c41dd09f6bc4413d2db067a60.jpg" data-media-id="editor_0" data-image-id="2024111603114_0e071ce63ea9b0a9a7ee76f8c3cea0ff08c6767c41dd09f6bc4413d2db067a60" data-rendition-name="original" width="3500" height="2333" loading="lazy" alt="Pokhara's tourism woes NT"> <figcaption>Tourist arrivals in Pokhara have slumped since the disruptions at Kathmandu airport due to upgrading work. Photo: KRISHNA MANI BARAL/NEPALI TIMES ARCHIVE</figcaption> </figure>  Even without the Kathmandu airport closure affecting tourist arrivals, Pokhara was already suffering from a decline due to many factors like the poor state of the Prithvi Highway, the shortage of luxury accommodation for high-end tourists, and the reluctance of international airlines to start direct flights to Pokhara despite an expensive new airport that was inaugurated two years ago.&nbsp; “There was a lot of initial excitement on the construction of the international airport,” says Timilsina, “but it hasn’t delivered as expected due to politics. People have invested in nearby businesses, and have faced losses.” India has blocked direct flights from its cities to Pokhara because the facility was built by a Chinese company. Although tourists and pilgrims from India hit record levels this year, the poor state of the highways and the Indian bus accident on the highway to Kathmandu in July that killed 27 pilgrims from Maharashtra state dampened arrival figures. Gaire says, “While tourist arrivals to Pokhara are now approaching pre-Covid levels, we haven’t seen the improvement we were expecting. We need a better marketing strategy. What are our embassies abroad doing?”&nbsp; Indeed, Pokhara used to be a favourite destination for Chinese tourists. There was a boom in arrivals from China before Covid, especially after a popular Chinese tv serial was shot on location here. But arrivals from China have not really recovered since the pandemic because of the economic slowdown there. Promoting Pokhara airport to handle direct flights from Chengdu or Kunming could revive Chinese arrivals.&nbsp; Nepal’s Civil Aviation Authority (CAAN) has used the Kathmandu airport closure as an excuse to arm-twist international airlines to start flying to Bhairawa, which has barely been in operation for two years since it was inaugurated. So far, Fly Dubai, Thai AirAsia, Jazeera and Qatar are flying to Bhairawa, but most use it as a hop before flying on to Kathmandu, which does not reduce congestion at Kathmandu.&nbsp; An ideal situation could have been to get Pokhara to run to full capacity while Kathmandu is partially out of action. Pokhara entrepreneurs are puzzled why the CAAN and the national government have not taken more interest in promoting Pokhara as an alternative to reduce the congestion in Kathmandu. Nepal’s football team that was flying to Dushanbe this week couldn’t get tickets via Delhi, and took a domestic flight to Bhadrapur, crossed over to Bagdogra and flew on to Delhi to catch their flight to Tajikistan.

Pokhara’s tourism woes

An excerpt of a conversation between an anthropologist and linguist Mark Turin, PhD and Lava Deo Awasthi, PhD, the first Chairperson of the Language Commission of Nepal. Nepali Times: What is the role of Nepal’s Language Commission and when was it formed? Lava Deo Awasthi: The Constitution of Nepal (2015) created a Language Commission (LC) with the following four core mandates: (a) to develop eligibility criteria for gaining status as an official language and offer recommendations to the Government of Nepal about the official language(s) in each province; (b) to offer recommendations to the Government about measures to be taken for the conservation, promotion, and development of languages; (c) to suggest possible ways of using mother tongues in education by assessing their stage of development; and, (d) to conduct studies, carry out research and perform monitoring functions about the response to the constitutional provisions for the federalisation of languages in Nepal. The Commission was founded in 2016 and I was appointed as the Chairperson of the Commission in September of the same year by the Cabinet of Ministers. What in your own professional and educational background helped to prepare you for the role? I have worked with the Government of Nepal for about 30 years, alongside holding teaching appointments at universities in Nepal. Prior to assuming the role of the Chairperson of the Commission, I served as permanent Secretary to the Government of Nepal and worked as the Chief Administrator of the Central Development Region. I was appointed as Director General of the Department of Education and completed my assignments as Joint Secretary at the Planning, Monitoring and Educational Administration Divisions of the Ministry of Education.&nbsp; In addition, I have taught courses as a visiting professor at Tribhuvan University and Kathmandu University for more than three decades. Later, I also started supervising MPhil and PhD students at the Far Western University in Mahendranagar, Kanchanpur. My PhD project from the Danish University of Education was dedicated to making sense of Nepal’s social construct and commitment to multilingualism, exploring the persistence of monolingual school practices in the face of constitutional promises and state commitments to multilingualism. I conducted a survey of Nepal’s languages and carried out a qualitative study of the Tharu language in the district of Bardia. I analysed language policy statements and explored classroom pedagogies in schools. I documented how teachers showed a tendency to resist change and maintain the status quo because they were not consulted when new educational language policies were introduced. Teachers also exhibited a deeply-held adherence to the Gurukul education system which appears to have been harnessed as a way to resist newer pedagogical ideologies imported from the West. Recognising how engrained these rich traditions of knowledge transmission are, I wanted to know how students’ engagement in the learning process appeared to have dwindled, creating a gap between children’s home languages and the language(s) of the school. Whilst statutory provisions for education in the mother tongue were oriented towards promotion, classroom pedagogies remained resolutely monolingual and exclusionary. The result was that multilingual education policies that had been introduced in Nepal did not result in meaningful changes in classroom practices. My research was also a reflection of childhood traumas I had experienced at the earliest stage of formal education. My home language, Baitadeli, has a strong oral tradition and no written literature. English is my fifth language in terms of exposure and competence, and my home district of Baitadi is well-known for its loyalty to the local language. I had to drop out of school after completing my sixth grade. Staying at home, I received much attention from my family and had much greater exposure to my native language, culture and environment. My overall impression is that dropping out of school had a surprisingly positive impact on my life. The opportunity offered a surprising dividend for me as I gained mastery in my mother tongue and received extensive exposure to folk literature and Indigenous knowledge and survival skills, cultivating my interest in language, culture, literature and local cosmologies.&nbsp; Now that I reflect on it, I appreciate how language has always played a key role in my life. I grew up in a multilingual environment: brought up with Baitadeli, Hindi, Sanskrit, Nepali and English. Language played a major part in my decision to leave school and my later success is closely linked to my competence in several languages. It was rewarding to be at home with my family as I deepened my understanding of native language and culture, which in turn helped me to harness and refine my art of living. Languages matter so much to me because they are both software and hardware. Later, when I was in secondary school, I realised that my command of my home language contributed significantly to enhancing my Nepali and English. I used my mother tongue as a form of linguistic capital to strengthen my competence in both English and Nepali.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2024111811110_5400ba54792bf9e4854e1c1effde8bf09804e99647f23513700b450cc49adc4a.jpg" data-media-id="editor_0" data-image-id="2024111811110_5400ba54792bf9e4854e1c1effde8bf09804e99647f23513700b450cc49adc4a" data-rendition-name="original" width="1000" height="1500" loading="lazy" alt="Dr Lava Deo Awasthi"> </figure>  In your term as the Commission’s first Chairperson, what were your strategic goals and objectives? My first strategic goal was to create an environment conducive to implementing the provisions of the Constitution of Nepal in relation to language. My priority was to prepare a detailed action plan for my six-year tenure in consultation with language stakeholders, including language experts, professionals, activists, Indigenous community members and representatives of relevant national and local-level institutions. The Commission formed a body of high-level advisors to ensure that the Chairperson’s work was well-informed and credible. The advisors to the committee had highly visible professional and social reputations in Nepal and had much experience in the field of language conservation, promotion, research and development. Another strategy we adopted was to establish close institutional linkages with federal, provincial, and local level governments for collecting opinions and disseminating information widely.&nbsp; What critical issues did you have to consider while discharging your duty? When Nepal’s new Constitution was drafted, a number of concerns could not be adequately addressed. These related to the conservation of languages, the recognition of official languages at the provincial level, and the use of mother tongues at federal, provincial, and local levels. These unresolved issues and matters pertaining to the federalizsation of Nepal’s languages were passed on to the Language Commission to address and resolve.&nbsp; Regarding the recommendations for official languages, a five-year timeline had been set by the Constitution. With great effort, we succeeded in having all provinces agree to recognise their official languages as per the recommendations of the Commission.&nbsp; What were your greatest achievements during your term? One of the greatest achievements was that we succeeded in setting a language agenda at all levels. Nepal’s language communities and other stakeholders expressed the view that this was the first time their languages were recognised and their voices heard by the state. People participated in debates and discussed issues relating to language that in all likelihood had never before happened in their lifetimes, at least not in ways that were supported by the state. We encouraged people to speak in their own language(s) and provided translators during plenary sessions and group discussions. Another major achievement was developing criteria for the status planning of languages at federal, provincial, and local levels, and to recommend 11 province-level official languages, in addition to the Nepali language. Similarly, a notable achievement was recognising Indigenous languages spoken by smaller communities, all of whom faced ongoing marginalisation and high levels of endangerment. The Commission identified 9 new languages that had not been reported in the 2011 census, and provided a framework for recognising official languages within a municipality. The commission emphasised the need for documentation and digitisation of languages for developing corpora and archives at national and sub-national levels.&nbsp; Languages of historical importance as well as classical languages were given recognition for their protection, growth, and development. Recommendations were made for the conservation, promotion and development of Nepal’s marginalised languages that are threatened by majority languages and for those languages that hold particular power at local and global levels. Recommendations were also made for how best to safeguard Nepal’s languages from the ever-growing spread of English and other powerful, globalising languages.&nbsp; A further important aspect of the Commission’s work was to emphasise mother tongue medium instruction in schools across the nation. Recognising the role of language in children’s cognitive, socio-emotional and academic development, the Commission suggested strategies for linking schools with ward-level language clusters for use in the classroom. The importance of nurturing and respecting a child’s first language was reiterated in the Commission’s recommendations for children’s learning and all-round development. By the end of my term, a remarkable change could be observed in terms of building trust within and across Nepal’s diverse language communities. A network of language groups and stakeholders across the country proved to be a powerful way of bringing all language communities under one roof for a collective review of and response to the process of federalising language policy. The many language stakeholders across Nepal appreciated the opportunity to work within a coordinated framework, and—feeling empowered by this—seemed genuinely enthusiastic about the initiatives taken by the Commission.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2024111811114_b45297fdd2fedf17bdb6313e495a1062c0d87f1a19fa5349f871f220b75f93ab.jpg" data-media-id="editor_1" data-image-id="2024111811114_b45297fdd2fedf17bdb6313e495a1062c0d87f1a19fa5349f871f220b75f93ab" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Dr Lava Deo Awasthi NT"> </figure>  What were the most significant challenges for you as Chairperson? One of the major challenges was winning people’s trust in advocating for the mission of the Language Commission. I faced considerable resistance as I sought to emphasise the use of native languages in families and communities. While the Commission advocated for multilingualism and promoted linguistic diversity, the prevailing policy circles and central level institutions had been deeply influenced by a one-language discourse and ideology of Nepali only. The spread of English also poses a huge threat to Nepal’s languages. However, people in power do not seem to see this as a problem. They tend to abandon their own languages in preference for English. The way that Nepal’s municipalities are increasingly introducing English as a medium of instruction at the earliest stage of a child’s school-based education has proven to be detrimental to their cognitive development, socio-emotional wellbeing and academic success. Most of Nepal’s elites have been heavily influenced by the spread of English and remain unaware about its impact on their home languages as well as on the inter-generational transmission of Indigenous languages in the country. I wish that we could have produced more compelling evidence to show the consequences of making poor policy choices for our children’s education. Demystification calls for a collective response. To make change happen across this entire, complex and federalising country was daunting work and left like a race against time. I feel that I could have done more to offer concrete examples in favour of using the mother tongue as a medium of children’s education at the earliest stages of a child’s education. What do you see the Language Commission achieving in the next 5-10 years? The Language Commission will have to ensure that all of its key recommendations are implemented at all levels of government. In 10 years’ time, all seven of Nepal’s provinces will have their official languages in place. These languages will also be recognised as languages of federal business, alongside Nepali. I anticipate that all official languages in the federal and provincial systems will have a national portal for inter-language corpora using machine translation to fulfil their federal, provincial and local level language functions, and that all languages spoken in Nepal will be represented through a digital database in the national archive. The Office of Statistics will monitor the status of Nepal’s languages over time. By the end of the next decade, each municipality in the country will have recognised one or two official languages at the local level, based on speech populations. Other local languages will have received community-level legal recognition and official status to fulfil their functional roles. Languages that are highly endangered or at risk will be entitled to receive state grants for enhancing local level capabilities to encourage families and young learners to speak the language. Incentive schemes will be introduced in municipalities that promote language within the family and at home. Inter-generational transmission of languages will have received welcome and timely attention across Nepal. It is my hope that all schools—public and private—will have introduced mother tongue medium instruction at the earliest stage of school education, at least up to class five. Nepali, English and other national as well as classical and foreign languages will be taught as subjects. The existing policy of English medium education at the early stage of education will be abolished. The Government of Nepal will be held accountable if the number of speakers of any language decreases or if local communities face language loss and greater endangerment. Under the aegis of the Language Commission, a Centre for Language Research and Innovation will be created with world-class facilities for language documentation and archiving in collaboration with Tribhuvan University’s Central Department of Linguistics and other relevant institutions. Harnessing the vastness of Nepal’s linguistic diversity, the Language Commission will morph into a centre of excellence for national and international communities to engage in collaborative language research, to share experiences and document best practices at in service of global linguistic diversity and Nepal’s many Indigenous languages.

Languages are both software and hardware

Nearly 750,000 Nepalis went abroad for employment in the past year, and more than 100,000 left on student visas. Most of them were young Nepali men and women, and the number has been increasing every year. As with other sections of society, Nepal’s security agencies also face a recruitment crisis. Nepal Police opened recruitment for 64 inspectors in September, and received 2,239 applications, compared to 2,718 candidates last year. Police also invited candidates for 256 assistant sub-inspectors this year for which it received 17,756 applications – down from 19,932 last year. It is the same story in the Nepal Army, the number of applicants for the post of Officer Cadet (Second Lieutenant) went down from 6,144 for 400 open seats in 2019 to 4,390 in 2020. Meanwhile, applicants in the paramilitary Armed Police Force went down from 857 applications for 75 posts in 2021 to 536 applicants for 99 posts last year. While the number of applicants appears higher than the demand, the data shows a significant decrease in applications for vacancies in Nepal’s law enforcement agencies. Security personnel are recruited on the basis of rank and age in Nepal, and the age cutoff for entry into Nepal’s security agencies is typically 25 years. Sociologist and migration expert Ganesh Gurung says that the demographic of young, physically fit Nepalis emigrating abroad in search of better opportunities has impacted recruitment into law enforcement and the military here at home. “The returns from working in Nepal’s police and army are minimal, whereas overseas job opportunities are more attractive,” Gurung says. “The work may be physically demanding abroad, but the pay is a lot higher.”  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241116041148_a7e477e0ee2f56acf16c2559fdb24d8f0377f7bc1f9e56138bc40108fc4fa33f.jpg" data-media-id="editor_0" data-image-id="20241116041148_a7e477e0ee2f56acf16c2559fdb24d8f0377f7bc1f9e56138bc40108fc4fa33f" data-rendition-name="original" width="800" height="534" loading="lazy" alt="Nepal Police"><figcaption>Nepal Police</figcaption></figure>  Nepal Police spokesperson DIG Dan Bahadur Karki agrees that the physical and mental demands of a law enforcement job is incomparable to the income that security personnel earn. “A young Nepali who works in Dubai earns enough to build a home in the village within four years, while a Nepali with the same qualifications and physical ability in a security agency here barely makes enough to survive,” says Karki. “Obviously the youth prefer foreign employment.” Security agencies are now worried about the quality of inducted manpower. “There is a difference in work ethic between an applicant chosen from a competitive pool of 50 candidates versus one chosen from a pool of three candidates,” explains Gurung. “Unmotivated employees hamper the overall performance of the state apparatus.” Nepal Army spokesperson Brigadier General Gaurab Kumar KC says recruitment has not been hampered by outmigration: “We have still been getting more than three times the applicants than there are open posts, so we are not yet worried.” Even so, the passing rates of aspirants have gone down for security forces after the Public Service Commission began examinations for military recruitment in 2015. In fact, the Nepal Army complained about the Commission’s involvement in recruitment. Still, the number of vacant military posts tends to exceed the number of passing candidates. Nepal Army’s KC says that the military will not compromise on intake criteria even if there are fewer passing applicants. “Unqualified persons will not be admitted even if there are less-than-required passing candidates. We will re-advertise if that is the case.” But Nepal’s security forces now also have to worry about retention of existing personnel. About 900 Nepal Army, 600 Nepal Police, and 300 Armed police personnel resign every year before the completion of their tenure.  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241116041148_b8cd62f70eea3aac7d3d3778615a5b70b1e20550c9bd76321f051f9c766fd2a9.jpg" data-media-id="editor_1" data-image-id="20241116041148_b8cd62f70eea3aac7d3d3778615a5b70b1e20550c9bd76321f051f9c766fd2a9" data-rendition-name="original" width="750" height="378" loading="lazy" alt="Armed police forces"><figcaption>Armed Police Force</figcaption></figure>  In 2020, Home Minister Ram Bahadur Thapa recalled almost 1,000 police personnel who had been deployed for the security of VIPs after long-standing criticism that security forces were being misused to cater to political and bureaucratic leadership. However, security personnel have continued to be assigned to high-ranking officials as glorified housekeepers. In December 2022, Rabi Lamichhane’s Home Ministry had instructed its offices to recall unauthorised security personnel assigned to high-ranking officials, following which 500 officers from Nepal Police and Armed Police Force were withdrawn from their details. But the Nepal Army does not have to follow such rules, and the practice of army personnel serving high-ranking active-duty and retired military personnel remains. Conditions here are dire enough that many active duty officers in Nepal’s military and police forces have chosen to leave their jobs to serve in the Russian Army to fight in the Ukraine war. The hierarchical culture and chain of command of politics, bureaucracy, law enforcement and military has also meant that abuse and mistreatment of subordinates is rife in Nepal’s security forces. “Feudalism is alive and well within our security institutions,” says Gurung. “When soldiers and security forces who swore to protect and serve the nation are made to be at the beck and call of politicians and bureaucrats, it is easy to understand why they are disillusioned with their jobs and why they choose to quit and find jobs abroad.”

Job insecurity in security forces

Earlier this month, Nepal received Rs1.6 billion from the World Bank as part of its <a href="https://nepalitimes.com/news/will-nepal-ever-be-paid-for-saving-trees">Forest Carbon Partnership Facility (FCPF)</a>, rewarding the country for increasing its carbon sink capacity. Nepal is the first in South Asia to benefit from this facility, and it is specifically to recompense the country for increasing forest cover in 13 Tarai districts between 2018-2024. “We are also trying to get another Rs13 billion from the facility while also preparing for free market-based carbon trading in the international market,” says Nabaraj Pudasaini of the REDD (Reducing Emissions from Deforestation and Forest Degradation in Developing Countries) Implementation Centre. Big emitters of greenhouse gases are under pressure to reduce their carbon emissions, and many have signed agreements to do so by investing in decarbonisation projects in developing countries. Countries that emit more than a specified amount of carbon would be able to buy emission rights from countries that emit less. Nepal is internationally known for its community forestry program which has been largely credited for <a href="https://nepalitimes.com/banner/tree-mendous">increasing tree cover to over 45%</a> in less than three decades. But this achievement had not been adequately recognised or rewarded internationally before. Forests, especially in the tropics, absorb and store large amounts of carbon while releasing oxygen in a process known as photosynthesis. <a href="https://www.fao.org/forest-resources-assessment/en/">Preventing deforestation</a> and increasing canopy cover is considered a much more achievable goal than reducing emission in the scale necessary to limit global average temperature to 1.5°C above pre-industrial levels. COP11 in Montreal in 2005 first proposed reducing carbon emissions by improving forest quality by halting degradation. By 2015, a new mechanism of financial assistance was created to help less developed countries with sustainable management of forests <a href="https://www.un-redd.org/">(called REDD+)</a>. Under this new mechanism, countries receive aid based on their efforts to prevent forest degradation and increase carbon sink, and in 2021 the World Bank was entrusted with implementing it. Nepal’s FCPF receipt this month was calculated on the basis of 2.4 million tons of carbon stored at a rate of $5 per ton. In the second phase, Nepal will receive more than Rs4 billion within the next year for storing an additional 7 million tons of carbon. Eighty per cent of this amount obtained from carbon trading needs to be spent on local beneficiaries and indigenous communities.&nbsp; But carbon trading is not easy, Nepal needs to prove that protected forests will not be destroyed in future.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20241121091132_c8a381c9a95aa86fec558951650d97bb87914741f01766982ba2b086af001f16.jpg" data-media-id="editor_4" data-image-id="20241121091132_c8a381c9a95aa86fec558951650d97bb87914741f01766982ba2b086af001f16" data-rendition-name="original" width="1500" height="999" loading="lazy" alt="Greenbacks for greenery NT "> <figcaption>Photo: KUNDA DIXIT</figcaption> </figure>  Explains carbon trading expert Yugan Manandhar. “Forests should be handed over to the community and shown that they are managed sustainably. Proving this will be particularly challenging; forest encroachment and degradation is rife in the Tarai.” <a href="https://nepalitimes.com/multimedia/nepal-is-going-up-in-smoke">Deliberate forest fires</a> have also added to the challenge because they increase carbon emissions and reduce the sink capacity of forests. The basis for the amount that Nepal received was set five years ago by calculating the carbon reserves of forests in the 13 Tarai districts. In the meantime, sustainable forest management, tree plantation, forest destruction and erosion control were prioritised to increase carbon reserves in those forests. Nepal is signing another carbon trading agreement during the ongoing Baku climate conference. The <a href="https://www.leafcoalition.org/">Lowering Emissions by Accelerating Forest finance (LEAF Coalition) </a>proposes to sell the carbon stored in the forests of Bagmati, Gandaki and Lumbini provinces. For this, Nepal signed the letter of intent three years ago at COP26 in Glasgow. The target is to store 70 million tons of carbon in 32 million hectares of forest in the three provinces per which Nepal will receive Rs13 billion in four years at $10 per ton with provisions to increase the rate if various conditions are met. However, the agreement in itself doesn’t guarantee the amount. According to the targets set by Nepal, forest degradation should be stopped and carbon reserves increased by protecting tree cover. Preparations are also underway for clean air carbon trade because it has offset fossil fuel use by introducing 30,000 electric vehicles. Nepal has been selected for the first round to receive $40 million within one and a half years through the Clean Air System of the World Bank. Given that most of Nepal’s energy mix is from biomass, replacing them with electric stoves can significantly improve health by reducing indoor pollution as well as strengthen the country’s capacity for carbon trade. “Nepal's goal now is to sell carbon in the free market where carbon credits are bought and sold based on supply and demand in an open and transparent manner,” adds Pudasaini of the REDD Implementation Centre. “Nepal can now set its own price and bargain with interested buyer countries and organisations.” Lately, India has been discussing setting up a carbon market. Nepal has exported Rs12.72 billion worth of electricity to India so far this fiscal year, which can be traded under Nepal’s carbon market. “Carbon trading can create significant economic benefits for Nepal, which will help reinvest in development and environmental protection projects,” says Manandhar. “But we must prioritise sustainable management of forests, cutting older trees and allowing regrowth as well as promoting electric stoves and electric vehicles.”