Skip to main content

Hydroelectric Development Violates Human Rights on Nepal’s Likhu River 

By Dev Kumar Sunuwar (CS Staff)

Near the Likhu River in eastern Nepal, Indigenous and local communities are adversely affected by hydroelectric power projects by the Kathmandu-based company MV Dugar Group. The projects have a total investment of 21 billion rupees from 18 different private limited banks but the affected communities continue to await remedy and justice. According to the communities, the projects were illegally conducted without addressing their demands and giving adequate compensation for the damage resulting in their construction.

Affected community members have repeatedly requested support for an independently facilitated dialogue to discuss the impacts of projects and help address their demands for peaceful resolutions to the projects. On December 21-23, 2021, a Cultural Survival staff member in Nepal, along with the Sunuwar Welfare Council, an umbrella organization of Sunuwar Indigenous Peoples, Indigenous community radio and television stations hosted public concerns hearings in three locations and conducted sites visits with a group of Indigenous human rights lawyers associated with Lawyers’ Association for Human Rights of Nepalese Indigenous Peoples (LAHURNIP).

The Likhu River, a freshwater source flowing from Mount Numbur (6,959 m) through Ramechhap, Okhaldhunga, and Solukhumbu districts in eastern Nepal, is a collective treasure stewarded by Sunuwar and Sherpa Indigenous communities along with other local communities, namely Bahun and Chhetries, for generations. The River now has been misappropriated by private companies like MV Dugar Group in partnership with private limited banks– Machhapuchhre Bank, Mega Bank, Everest Bank, Nepal Bangladesh Bank, Nepal SBI Bank, Lumbini Bank, Laxmi Bank, Siddhartha Bank, Century Bank, Citizen Bank, Bank of Kathmandu, Prime Commercial Bank, Global IME Bank, NIC-Asia Bank, NCC Bank, Kumari Bank, Prabhu Bank, Agriculture Development Bank. Three hydropower projects are being constructed in the Likhu River with a combined power of 157 Megawatts. Three out of seven projects have been purchased and constructed by MV Dugar Group: the Likhu-1 Hydro project (77 Megawatt capacity of electricity), previously owned by Pan Himalaya Energy Pvt. Ltd, the Likhu; 2 Hydro Project (55 Megawatt capacity) previously owned by Global Global Hydropower Associates Pvt. Ltd; and Likhu A (29 Megawatt capacity of Electricity) previously owned by Number Himalaya Hydropower Pvt. Ltd.  


During the recent field visits and multi-stakeholder public dialogues, the affected community members denounced that the hydroelectric investors failed to obtain their Free, Prior and Informed Consent (FPIC) and that no compensation had been paid to those whose private lands have been destroyed by access roads, a tunnel, and other infrastructure construction at the dam site and by the powerhouse constructed without the permission of concerned individuals. 

Community members also raised issues of the company vandalizing their private lands while constructing the roads connecting the dam site and powerhouse. The company did not obtain their permission to widen the road nor paid any compensation for damage. In a similar fashion, the company established a high-voltage transmission line through the village,  above houses, using threats and mobilizing security forces.


Dawanuri Sherpa, an affected Indigenous community member, shared that “the project, in order to curtail their rights, threatened Sherpa people for filing a public case, creating fear. The project, in coordination with the District Administration Office (regional government) and the local government, instituted a temporary police post and army camp. We have had an incident twice, at least three Sherpa community members were taken into police custody at the district headquarters just because they were trying to stop construction work and seeking compensation for the destruction of their private land. Historically, police posts were never established in the Lachhewar area in Gumdel, but now temporary police posts and an army camp have been set up. We can easily assume that we now are forced to be silent, forced not to stand against this project because the hydropower developer, with support from the local government, deployed these security forces.” 

During the visit to the main dam construction site, it became evident that the company, in coordination with the local government, established a temporary police post just 500 meters away from the main hydropower construction site to guard it. Also, there are reported cases that the local government resorted to manufacturing consent for the project by arresting protestors and forcing them to sign consent forms under duress and threat of imprisonment and further criminal sanction.

“It is necessary to obtain FPIC prior and during the utilization of natural resources of Indigenous Peoples. If FPIC is not obtained, locals have the right to obstruct the project being undertaken on their lands and territories,” says Bhim Rai, an advocate at LAHURNIP. 

FPIC is an international legal standard backed by the UN Declaration on the Rights of Indigenous Peoples that requires projects and authorities to seek permission from local Indigenous Peoples before taking action on their lands. It is a process where communities have the final say in decisions that affect them. But in the case of hydropower projects in the Likhu River,  investors did not honor and respect these rights. Local communities were not provided with basic information or opportunities for consultations on project impacts. The affected communities shared that the project resulted in adverse human rights impacts, some of them have been displaced from the areas they have been living on for generations. The project impacts have further caused destruction of sacred sites such as crematorium spots. Moreover, Sunuwar Peoples have sacred religious and cultural ties with the Likhu River. A special fish, Neng, which they catch in the river is used for everything from birth to death rituals. The bodies of ones who have died are cremated in the river and the river is also used for cultural and healing activities. Because of these hydropower projects, Sunuwar Indigenous Peoples are likely to be driven off from their traditional lands and face restrictions in accessing their natural resources on the Likhu River.   


Some community members refused to give their private land to projects and have protested at the construction site against project construction. Company officials have made false promises to provide job opportunities, facilities, and pay compensation. Local contractors sped up construction in all three hydropower projects and an estimated 70 percent of the work is now done. There are little chances that the community will get the compensation.

“The company has taken my private land. They insincerely made an agreement to pay the market price of my land. When the company started constructing the tunnel, my house was damaged because of blasting,” says Debihadur Basnet from Umakunda-2, Dhadokhola, Ramechhap showing photographs of the  Likhu-2 power house erected on his land. “The tunnel has been built just below my house and we are living just on the tunnel with fear. When I made demands for compensation, I was taken into custody not once, not twice, but four times to the district headquarters in Manthali. I bowed down to the Chief District Officer for justice. He asked me to write a complaint starting from the Ward’s Office. I placed my photograph there but so far my voice has not been heard.  3.5 ropani (0.440 acres) of land was stolen for company use but I have not gotten a penny.” 

Debi Bahadur Basnet is an example of many affected communities who were arrested, detained overnight, and asked to sign a document while in custody, giving their promise not to obstruct project construction. According to the affected community members, they are threatened with criminal charges and further imprisonment if they do not sign the presented documents. Community members ultimately signed the documents under duress to avoid further imprisonment and criminal sanctions. 


The project promoters reached repeated agreements with community members who stood against the construction with false promises of employment opportunities at the construction sites and giving the fair compensation for damaged lands, as well as providing health services and education facilities for children and youth. To date, the companies have not shown any interest in implementing any terms of these agreements, according to the affected community members. Speaking at the public dialogue, local affected communities said that the only option for them now is to close down the project area and obstruct the ongoing construction work.

Buddhi Bahadur Sunuwar, resident of Likhu Pikey-2, Dovan in Solukhumbu district says, “We did not want to give our land but the company then forced us and then lured us by promising to provide ambulances, drinking water, school facilities, a healthpost, and a pitched road. Because of the blasting, my house was cracked and we have not gotten anything. We were told we would be provided electricity for free and all of the six households here in Dovan provided our land. The company built the main powerhouse tunnel and other infrastructures on our land but we have not received the promised compensation.” 

The promoters of the hydroelectric projects at MV Dugar Group were absent during the public dialogue despite regular communication with organizers and having promised to be present during the event. The project sent Rokat Basnet, a public relations officer, as a representative of the company. Basnet expressed “commitment to send the reports compiling people's concerns and grievances to the board of the directors” of MV Dugar Group. As of the drafting of this article Basnet said that the MV Dugar Group did not ask him anything about the event nor has he communicated the concerns raised to the board of the directors.


MV Dugar Group has chosen to ignore community voices and cover up human rights violations through Corporate Social Responsibility (CSR) tactics to push forward their projects. Communities affected by MV Dugar Group hydropower often protested against the Likhu River projects, especially before the lockdown imposed by the government due to COVID-19 starting in 2020. They obstructed the construction while the road was being widened. The project administrators with the support of local government authorities used violence against the protesters to resume construction. After a long struggle, the local government, on behalf of protesting locals and Indigenous Peoples, reached a 19-point agreement with the MV Dugar Group. The affected communities thought that their representatives would advance their concerns but Cultural Survival received evidence that MV Dugar Group transferred the CSR budget to the local government’s bank account, without the knowledge and input of communities on how these funds would be spent. The local government remained silent and the company sped up the construction work, which is now almost complete. The affected community members have received no compensation to date. 

After reaching an agreement with the local government, MV Dugar Group initially agreed to adhere to rights norms regarding consultation with Indigenous Peoples set forth in the Convention 169 of the International Labor Organization, a binding Treaty ratified by Nepal in 2007, but so far no steps have been taken to fulfill them. The agreements obtained through coercion or false promises condone the human rights abuses being committed against community members by project implementing authorities and enable local government officials to also act with impunity. 



Community members also said that the budget provided by the project to the local government under the heading of Corporate Social Responsibility is not-transparent especially where local governments made investments. “Many times and often, we, the local authorities called on the companies to follow the minimum standards set by the government of Nepal while constructing the road but MV Dugar never did so,” says the ward chairperson of Umakunda-3, Kubu-Kasthali Ramesh Kumar Sunuwar. In relation to the CSR budget given to the ward’s office, he said that “the budget provided by the MV Dugar Group under CSR  was used to construct the road.”

The affected communities raised such concerns during the public hearing dialogues at Umakunda-3, Kubukasthali, Umakunda, 2, Thadokhola of Ramechhap District and Likhu Pikey-2, Buku-Dobhan in Solukhumbu district. There was an overwhelming participation of the affected community members in all three hearings which was covered by Indigenous Television, ITV Nepal and community radio stations--Radio Likhu 91.3 and Radio Kairan 96.4.


The hydropower projects Likhu 1, Likhu 2 and Likhu A on the Likhu River have had adverse impact on the socio-economic situation of the local communities, such as loss of private land, agricultural production, forest and grazing land  as well socio-cultural impacts on rituals. All the sources of the culturally important Neng fish now have completely been destroyed in the Likhu River. The company has provided no plan to reinstate the fish, nor has it consulted with Sunuwar Indigenous communities to compensate for the damage. 

Ranabir Sunuwar, Chairperson of Sunuwar Welfare Society, says, “It is not development, rather destruction. MV Dugar Hydropower company has come to the Likhu River not for development but for business. Hydropower companies should introduce plans to address cultural and ritual rights. It is now high time to get united and file the case against the violation of cultural and ritual rights of Sunuwar Indigenous Peoples.”

“The hydropower projects have caused more suffering to the locals than brought development. When compensation was sought for the damage to our private lands, we were threatened and we were forced to give our land up,” says Pabitra Sunuwar, Chairperson of Sunuwar Welfare Society Ward Chapter and resident of Umakunda-3, Kubukasthali, Ramechhap. “A 19-point agreement has been reached with the local government but so far none of the points have been implemented. Our demands are not monetary. We have not demanded cash. We want the hydropower company to compensate and restore our damaged culture because the hydropower projects have impacted all aspects of our lives, lifeways, and culture. We have the right to continue our culture as we have for generations.”


Impact on the Environment and Mountainous Hydro Climate
According to Nepal’s Environment Protection Act and Regulation of 1997 and subsequent amendments from 1999, 2007 and 2009, “Environment Impact Assessment (EIA) is mandatory for hydropower projects that generate more than 50 MW capacity.” A part of the project area of the Likhu river dams lies inside Gaurishankar Conservation Area (Gumdel village, of Ramechhap district), home to hundreds of wild flora and fauna. The MV Dugar Group’s EIA report states that a total 85 species of wild flora and fauna were recorded during field visits. Twenty-nine plant species under the herb category were recorded as the highest in number followed by trees and shrubs. Forty-six plant species with different use values were noted.

Out of a total 209 wild plants recorded in the project area three plants fall under the Nepal Government’s conservation categories. Five, (including four orchids) fall under  the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) conservation categories, to which Nepal is party.  Six plant species fall under the International Union for Conservation of Nature (IUCN) conservation categories. The forest at the headworks site is mainly State forest and the forest near the powerhouse site is community forest.



The project assumed that the construction and operation of Likhu-1, for example, would have impacts on local fish, loss of habitat, and a 7 kilometer-long reduced water flow zone between intake to the powerhouse site. Similarly, the EIA foresees environmental pollution due to cleaning of vehicles, leakage of fuels and lubricants into water channels, and leakage of chemicals and toxic substances from construction activities may affect the feeding and breeding habitats of aquatic fauna and flora. The EIA document states that “fisheries enhancement plans with nursery ponds, hatcheries be developed for preserving special fish” in order not to hamper Sunuwar Indigenous Peoples’ cultural needs. The project document also said that the project will compensate for the loss of forests or trees in community forests with technical and financial support. None of these actions have been taken to date. 

Similarly, the Social Impact Assessment (SIA) a chapter of the EIA, conducted initially by MV Dugar Group as required under the law of Nepal to obtain license to operate Hydroelectric project, states that more than five languages are spoken as the mother tongue in the project districts—Sherpa, Tamang, Khaling, Thulung and Sunuwar. The project administrators did not inform the local communities in their native languages about their plans. Each project requires translating its project documents such as Environment Impact Assessment (EIA), Social Impact Assessment (SIA) and others into the local languages and making them public and available to the locals. But the local communities say that they never heard of those documents. However, company representatives argue that they held public hearings, made SIA and EIA reports public.  

Dawanuri Sherpa, an affected community member, says, “The commitments have been made many times during personal meetings but nothing has been addressed yet. EIA, SIA, we have not heard, seen, nothing, no notice was given. We were not provided any information. We have often protested and blocked the road and demanded that the company make the EIA and SIA reports public and address the impacts. But nothing has happened yet.”

SIA also states that religious shrines, if impacted, will be relocated to a suitable place with consultation of local people and the project will bear the cost. Irreparable damage to cultural, historical, and religious sites from the construction works have occurred. Likhu-A initially obtained a license to generate electricity with a capacity of 51 Megawatt, however, in order to avoid the mandatory procedures of SIA and EIA, it reduced the capacity to 29 Megawatt in its license application.

Law Breaking by MV Dugar Group

The MV Dugar Group has been violating the fundamental right to information guaranteed under the Nepali Constitution and implemented in the Right to Information Act of 2064 BS (2007) as well as violating the mandatory provisions under the Environment Protection Act of 2053 BS (1997) by failing to conduct the requisite individual and group consultations. 

The rights of local communities to access resources are enumerated in several provisions in the constitutional laws and policies. The Local Self-governance Act of 2055 BS (1999) stipulates that the process of development must include the participation of Indigenous and local peoples in project identification, formulation, planning, and implementation through local councils. This was in force until the Local Government Operations Act of 2074 BS (2017), additionally the Environment Protection Rules of 2054 BS (1997) require public consultation on proposed project plans. 

Additionally, the right to information is a fundamental right guaranteed under Article 27 of the Constitution. Similarly, the Right to Information Act 2064 BS (2007) guarantees the right to ask for and obtain information of public importance held in the public bodies and also includes the right to study or observe any written documents or materials concerning the public. The MV Dugar Group’s EIA documents are primarily available in English and have never been made public. After much effort, Cultural Survival obtained the EIA and Initial Environment Examination (IEE) documents, which state that public hearings were conducted and included signatures on the documents, however, some signatories claim that they signed without knowing that they were giving clearance for use of their resources.  


Local community members and Indigenous Peoples maintain that no information has been provided about the project. Communities were deprived of the opportunity to give or withhold their consent to the project. The meaningful participation of affected Indigenous Peoples and local communities through FPIC is protected under national and international standards such as the UN Declaration on the Rights of Indigenous Peoples and ILO Convention 169. Nepal is party to both of these international instruments. 

In addition, the right to property is guaranteed as a fundamental right under Nepal's Constitution, and Land Acquisition Act 2034 BS (1997) stating that the government or private entities must provide compensation while acquiring private property including community lands. This compensation is based on the market price at the time of acquisition. The land can be acquired through a dialogue with the landowner. Where the landholders do not consent, Section 5 to 11 of the Act outline the procedure for land acquisition and community land rights. Firstly, a notice must be given to the landholder with a proposal to acquire the land, a survey must be carried out, and a report needs to be prepared exploring the details of land acquisition. If the proposed land is appropriate to acquire, then a second notice must be published with full disclosure. If the landowner feels the procedure is unfair or their land should not be acquired, they must be given time to make a complaint. Landholders are also entitled to Muwabja (compensation for the value of the land) and Chhetipurti (compensation for the income generation from the land). A majority of the landholders around the Likhu River say that they were not provided any notices or adequate information, were given false promises, and were coerced to sell their lands. 

Without transparency, consultations, community participation, and consent in land acquisition and hydropower development, the MV Dugar Group is in violation of constitutional and legal provisions. The MV Dugar Group also encroached on community resources, including waters and forests, and destroyed cultural and historical and religious sites. The project should have consulted with local communities to map out community resources in the project areas. Steps should have been taken to avoid impacts as required under international and national laws.  Indigenous Peoples and locals have repeatedly stated that they do not want the MV Dugar Group to continue its operations in the current manner but their demands have not been heard or addressed.