Review of the Bill for amending the Local Self-Governance Act, 1999

The Local Self Governance Act of 1999 is of particular importance in the context of local self-governance initiatives in Nepal. The Act attempts to be comprehensive and ideologically clear in comparison to similar efforts made in the past.

Dec. 5, 2014, 5:45 p.m. Published in Magazine Issue: Vol: 08 No. -12 December. 5- 2014 (Mansir 19, 2071)

The architecture of local self-governance bodies in any country, as well as their jurisdictions and rights, must be founded on what is tangible at the grassroots. Such tangible factors include population, topography, socio-economic conditions, and the present state of things considered to be foundational for development. In making decisions about local self-governance, it is equally important to consider the political aspirations of those who will be directly affected by such decisions. It is on the basis of these considerations that the respective roles of local self-governance bodies, state-level bodies, and the central government should be decided.   

The Local Self Governance Act of 1999 is of particular importance in the context of local self-governance initiatives in Nepal. The Act attempts to be comprehensive and ideologically clear in comparison to similar efforts made in the past. It was promulgated to address the people’s aspiration for self-governance. The LSG Rules and Regulations were subsequently published in 2000 to help implement the principles outlined in the Act, which imbibed a recognition of the rights of local self-governance bodies to decide on matters such as local development, education and sports, language and culture, land reform and management, etc. The Act even gave local bodies some rights in decision-making on matters such as women’s empowerment, cottage industries, health services, tourism, etc. The Act, additionally, displaced the Village Development Act, District Development Act, and Municipality Act and combined the broader principles operating within each. Despite such laudable principles put forth by it, much improvement has not been seen in the context of local self-governance, mainly due to the fact that local elections have not been held since they were last disrupted, more than a decade ago, due to security reasons. Consequently, local bodies have continued to function as bureaucracies.

Article 139 of the Interim Constitution of Nepal, 2007, lays out a provision regarding local self-governance that is committed to creating an environment that is conducive to the sovereignty of local people. The article reaffirms the importance of local self-governance as a means of increasing the participation of citizens in decision-making and of delivering essential services at the local level. Additionally, the Interim Constitution is committed to institutionalising democracy at the local level by promoting elections to choose representatives for local bodies.

Topics for discussion at the Constituent Assembly:

The question of local self-governance is an important one for our next constitution. At a time when debates about state restructuring are overshadowing other issues, it is important that our legislators discuss and reaffirm the importance of establishing local self-governance bodies bestowed with special and meaningful rights and privileges. A two-tiered system of federal and state governments cannot fill the void of local self-governance. Additionally, and ironically, having strong local self-governance bodies will promote and strengthen a federal state/architecture. History is proof of this principle.

What follows are important points suggested for consideration at the current CA:

1. Which rights and powers should be decentralised or devolved to local self-governance bodies in order to guarantee that they are effective instruments of self-governance?

2. Which foundational aspects of self-governance should be included in the constitution and which aspects should be determined by the law?

3. What should be the election mechanism by which local government authorities are elected such that the structure of local governance is democratic.

4. What would be an ideal system of self-governance at the local level and how many tiers should this system have in order to be effective? Would currently existing wards, VDCs, DDCs, municipalities, and districts be relevant? If so, how would they be interrelated?

5. What sort of financial rights must local self-governance bodies be given in order to guarantee effective governance and what sort of tax mechanisms should be implemented by such bodies?

6. What kind of legislative and legal rights should local self-governance bodies be given within the boundaries of the constitution?

7. What kind of rights should local bodies be given in utilising national resources that are available at the local level?

8. What sort of administrative rights should local bodies have in hiring employees? For instance, should local public service commissions be formed or should civil servants be hired and appointed from the centre?

9. What special provisions should be made to ensure the proper representation of women, indigenous people, Dalits, Madhesis, and other religious and cultural minorities in local bodies?

10. What steps should be undertaken prior to changing the boundaries and structures of local bodies such that the concerns of stakeholders can be heard?

11.  What kind of legal and non-legal mechanisms should be kept in place to ensure that local bodies are not captured by local elites?

12. What kind of relationships would exist between local and state governments, as well as local and the central governments? What courts would facilitate any disagreements if they should arise?

13. What kind of commission should be created to oversee the progress of such local governance institutions and to provide periodic reports to parliament?

Changes proposed in the Bill:

While the first Constituent Assembly failed to write a new constitution, as proposed in the Interim Constitution, a new Constituent Assembly has been elected. The questions that have been raised above are some of the issues that the new CA members will have to address.

While there is a lot of issues for the CA to resolve, a Bill for amending the LSG Act shows some hope in addressing a few of the problems raised above.

The first provision of this Bill talks about the establishment of ward committees. According to this provision, a ward committee will be elected in each ward of every village development committee, by citizens and residents of that ward who are eligible to vote. They will select a ward chairperson and members, as per section 10 of the Act, from among candidates who are eligible to be on village committees. A total of four people will be elected to a ward committee, including two female members. In case the total population of eligible voters in a ward is less than five hundred, a committee with only a chairperson, one female member, and one other member can be formed.

Similarly, the Bill makes provisions for the appointment to village committees of at least six members from those who are either engaged in social service, come from economically and socially marginalised backgrounds, or represent communities like indigenous groups, Madhesis, Dalits, and the differently-abled. Those appointed from this procedure would have to be eligible candidates as defined by section 10. Two female members must be included.

In the context of VDCs, the Bill makes a new provision for internal auditing. According to this, DDCs will be responsible for conducting internal audits of VDCs within their jurisdiction every four months. The final audit of incomes and expenditures will, however, be the responsibility of the Auditor General’s office.

Section 75 (b) and (c) of the main Act are to be replaced with new provisions in the Bill that propose to replace one female member (b) and three other members (c) in the formation of ward committees with two female members and two other members.

An important modification has also been proposed for section 56 of the main Act. This provision proposes the appointment of a minimum of six, maximum of twenty, members to municipal committees­—two thirds of the number of wards in a given municipality— from among those who are engaged in social service, or belong to socially and economically marginalised groups, or represent communities like indigenous groups, Dalits, madhesis, and the differently-abled, provided that they are eligible for membership to municipal committees (section 78). At least forty percent of those appointed from this procedure must be women.

Section 135 of the Bill proposes to amend existing practices for auditing the incomes and expenditures of municipalities. The Auditor General, it is proposed, will be responsible for the final audit.

Section 172 of the Bill proposes the appointment of a minimum of six members to district committees­—representing two thirds of the territories in a district—from among those who are engaged in social service, or belong to socially and economically marginalised groups, or represent communities like indigenous groups, Dalits, madhesis, and the differently-abled, provided that they are eligible for membership to district committees (section 174). At least forty percent of those appointed from this procedure must be women.

Besides the changes mentioned above, many other changes, especially in wording, have been made. Since these changes are of clerical nature, they have not been listed here.

Room for improvement:

The main goal of the proposed Bill seems to be limited to establishing clear procedures for the formation of ward committees, ensuring inclusivity in village, district, and municipal committees, and making provisions for internal and final audits on the expenditures of local bodies. The first two goals have been necessitated by the Interim Constitution, whereas the latter understandably stems from a need to regulate local bodies.

The proposed Bill, however, has left out many provisions that could have been added, or left untouched many others that are in need of amendment. The reports from the first CA reveal that Nepal was heading towards a three-tier system of federalism. There are clear provisions for a federal government at the centre, state governments in the middle, and local governance bodies at the grassroots. Additionally, a proposal put forth by the committee for state restructuring and devolution of power shows that there were plans for creating special autonomous bodies in addition to other local self-governance bodies. While there were plenty of debates on the nature and number of states, there was agreement about the need to create autonomous regions, special protected regions, and special regions at the local level, based on population and topography. The proposal also includes a special provision for giving additional autonomy to socially and economically marginalised people. The proposed Bill remains silent on many of these ideas that have already been widely debated and agreed upon.

The Bill also remains silent about the interrelation of legislative, executive, and judicial rights within federal structures. The report submitted by the previous state restructuring committee has proposed clarifications on the relationship between federal, state, and local governments, and special bodies. It lays out a basis for the relationship between the union and states; the interplay of executive, legislative, and judicial powers within state bodies; the relationship between states and special autonomous bodies; the relationship between states and local bodies; and finally the relationship between the union and local governance bodies. After all this effort, it seems pointless for the LSG Act to exclude points that might help identify and mediate potential sources of conflicts that may arise in or among local self-governance bodies.

It is clear that this Bill is based on an older, now irrelevant, context. Currently, the debate on federalism is centred on the appropriate number of states, the appropriate method of determining state boundaries, as well as issues of identity as they pertain to federalism. As soon as these questions are resolved and a new constitution created, laying out the basis of dividing power among the various tiers of governance, this Bill will either become completely irrelevant or will need to be drastically modified.

It is not the case that those involved in drafting the Bill are simply unaware of the issues that are in need of addressing. Although there is plenty of ground for improving the LSG Act substantially, those involved in drafting the Bill have chosen to leave it as it is for the most part, changing only those aspects that are easy to implement. Similar to how local elections continue to be stalled due to ongoing efforts of writing a new constitution, the logic being that everything will change once the new document is ready, this Bill more or less maintains the status quo with the same anticipation.

Additionally, there are some problems related with language. Section 56 (c) of the proposed legislation talks about (aadivasi, janajati) indigenous people. But there is no punctuation, deliberately, between these two terms in the Interim Constitution. In the same section, the word disabled has been used. ‘Persons with disabilities’ is the standard phrase currently in use, which is in line with the prevalent human rights thinking.

The provision in the Bill that gives DDCs the responsibility of conducting audits for lower-level bodies is impractical. Auditing is not the job of DDCs, and they simply do not have that kind of capacity. Furthermore, to ask that they conduct audits every four months is more absurd.

It is appropriate that the responsibility of final audit on the expenditures of local bodies has been given to the Auditor General. However, as things currently stand, the Auditor General does not have sufficient physical resources or manpower to undertake this task. Consequently, it is important to help the Auditor General by opening offices at the regional level and hiring the required manpower. If necessary, the Auditor General should also be allowed to hire a reputed audit firm to work under him/her.

Finally, the Bill sets forty percent as the minimum representation of women in local bodies. A thirty-three percent representation has been standard so far in the context of the law. However, the women’s caucus has been asking for a fifty percent representation. Thirty-three percent would be better for consistency, whereas fifty percent would be better to ensure the principle of equal representation based on population.

This recommendation paper prepared for discussion by the Nepal Constitution Foundation has been finalised based on inputs given by various pressure groups: women’s, ethnicity-based, Dalit, Madeshi, youth, and others. The Constitutional Foundation would like to thank Laxmi Pariyar, Tilak Pariyar, Usha Kala Rai, Dr. Bharat Raj Gautam, Rajendra Giri, Sher Bahadur Gurung, Rita Simkhada, Kedar Khadka, Bishal Khanal, Sambojan Limbu, Nirupama Yadav, Anup Acharya, Raju Gurung, Namit Wagle, Sabin Rana, as well as Ganesh Datta Bhatta, Bishweshwar Prasad Bhandari, and Dr. Bipin Adhikari.

This research has been conducted with the help of The Asia Foundation. But the thoughts presented here belong to the author; they do not represent the Foundation or its point of view.

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