Government Pushes for Greater Oversight in Private Sector

Bijay Damase

The government’s recent attempt to extend anti-corruption measures into the private sector has sparked unease among business leaders, who fear increased regulatory scrutiny could stifle investment and economic growth.

On Sunday, entrepreneurs from various industries urged ministers and parliamentarians to reconsider the proposed amendments to existing anti-corruption laws, which would allow the Commission for the Investigation of Abuse of Authority (CIAA) to investigate and prosecute corruption within private enterprises.

The controversial amendments are part of bills currently under discussion in the Federal Parliament, aimed at revising the Prevention of Corruption Act, 2059, and the Abuse of Authority Investigation Commission Act, 2048.

The bills propose expanding the definition of public institutions to include entities partially owned or controlled by the government, such as companies, banks, medical colleges, and affiliated hospitals. This initiative has raised alarms within the private sector, with many fearing it will lead to excessive oversight and deter business operations.

Leelamani Paudel, legal advisor to the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), voiced concerns during a meeting with government officials, stating that the inclusion of private companies in the public institution category under the proposed laws would bring nearly all private businesses under the jurisdiction of the CIAA. He argued that adding more regulatory bodies would not only discourage a healthy business environment but also undermine the morale of private sector stakeholders.

"The proposed amendments should be reconsidered," Paudel urged. "The private sector is already regulated by various agencies, and adding the CIAA into the mix will only create unnecessary hurdles for businesses."

The government has defended its position, citing Nepal's commitment to the United Nations Convention against Corruption, which calls for efforts to curb corruption in both public and private sectors. However, private sector representatives argue that the new provisions could have unintended consequences, such as creating a climate of fear similar to that seen in government offices, where officials are often hesitant to make decisions due to fear of corruption investigations.

FNCCI President Chandra Dhakal echoed these concerns, arguing that the proposed amendments could significantly harm the economy.

"If these laws are passed, they will create serious problems for our economy," he warned. "The government should not undermine the role and investment of the private sector while drafting these laws."

Kamlesh Aggarwal, president of the Nepal Chamber of Commerce, also criticized the government’s approach, stating that it contradicts previous promises to foster a business-friendly environment.

"We already have regulatory bodies that oversee the private sector," Aggarwal said. "There's no need to involve the CIAA and the National Vigilance Center, as it will only spoil the investment climate."

Ramhari Khatiwada, chairman of the State Affairs and Good Governance Committee of the House of Representatives, acknowledged the concerns of the private sector. He emphasized the need for a conducive environment where businesses can operate without fear of excessive regulation, especially as the country looks to the private sector for economic growth.

The proposed bills remain under discussion, with the business community closely monitoring developments that could reshape the landscape of private sector regulation in Nepal.