Nepal Amends Forest Regulations to Balance Development and Conservation, Easing Project Approvals

Kathmandu. The government has attempted to strike a balance between development and environmental conservation by amending the Forest Regulations. A clear and systematic procedure has been established for utilizing forest areas for major development projects, particularly those of national priority, national pride, approved by the Investment Board, and mineral-based industries. This is expected to significantly reduce the ambiguity and complexity seen in the implementation of such projects in the past.

The government has amended the Forest Regulations for the third time in accordance with Section 83 of the Forest Act, 2076. The regulation, approved by the Cabinet meeting held on Poush 18, came into effect upon its publication in the Nepal Gazette.

The main features of this amendment are the provision for cash-based compensation in lieu of forest land and the transfer of most authority to the provincial governments.

Stakeholders have stated that this amendment will help accelerate development projects that have been stalled for a long time. Specifically, work related to EIA, IEE, tree felling, and leased land for projects within national park areas, which have been delayed, will now move forward. Stakeholders indicate that this signals a removal of bottlenecks and some easing in development construction activities.

Facilitation in Forest Land Use

The regulation now mandates that development projects or industries using forest land must provide cash compensation based on the area used, instead of providing equivalent land. This is a significant change. Previously, development projects were mandatorily required to provide land equivalent to the forest area used. However, under the new provision, if the area used is compensated by planting trees equivalent to the area used and depositing the amount required for five years of conservation, the cost of removing trees and poles, and five times the number of trees removed along with five years of maintenance costs into the Forest Development Fund, providing land will no longer be necessary.

Mineral excavation requests for any part of the national forest area will now be decided by the working committee of the user group, amending the previous provision that required a decision by the general assembly of the user group. This will further expedite the decision-making process. Furthermore, a new provision allows the self-declaration made by the person wishing to excavate minerals to be considered as a basis, making the process more practical.

This cash compensation provision is expected to make cost estimation easier for project proponents and save procedural hassles and time involved in land acquisition and searching for substitute land. Previously, the Forest Department would only approve the deposit of funds for land purchase by development projects if the Land Acquisition Facilitation Committee recommended that land acquisition was not possible. However, the recommendation of the Land Acquisition Facilitation Committee is no longer required, and if land cannot be provided, the equivalent amount can be directly deposited into the Fund. Nevertheless, the old system will apply to development projects signed before Bhadra 14, 2082. It is mentioned that this regulation will apply to agreements made after this date.

Ease in Mineral Excavation

The regulation has opened a clear legal path for utilizing mineral resources for the country's economic development. If a mineral-based industry that meets the standards set by the government requests to use any part of the national forest, the Cabinet can grant approval. Previously, it was stated that the government could do this, but now it is clarified that the Cabinet will make the decision. If there is a request to excavate minerals such as gold, silver, copper, or iron, and a national priority mineral-based industry wishes to operate by meeting the standards set by the government, the Cabinet can approve the use of any part of the national forest.

The provision for deciding on the request to use any part of the national forest area for mineral excavation has been amended from requiring a decision by the general assembly of the user group to requiring a decision by the working committee of the user group. This will further speed up the decision-making process. Additionally, a new provision allows the self-declaration made by the person wishing to excavate minerals to be considered as a basis, making the process more practical.

What Other Amendments Were Made?

The regulation has broadened the definition of 'development project' to include nationally priority projects under Section 42 of the Act, plans approved for investment by the Investment Board, national pride projects, or nationally priority mineral-based industries that meet the standards set by the government.

When formulating development projects, if there is no alternative to using forest land, a study report incorporating the main activities must be prepared after studying and analyzing in the participation of the concerned body. Now, the study and analysis must include a feasibility study report containing the measurement of the required forest area and a map with GPS coordinates.

If forest land needs to be used for development projects, the consent of the concerned Division Forest Office must be obtained while formulating such a project, conducting a feasibility study, and carrying out an environmental study.

For projects signed before Bhadra 14, 2082, a special provision has been made that if the agreement mentioned depositing money for the use of forest area, the amount to be deposited in the Fund must be determined based on the updated inventory count of trees and poles as per that agreement.

If forest land is required, it is mandated to coordinate with the concerned Division Forest Office during the environmental study as per prevailing laws, and the environmental study report prepared must include the forest area, trees, and pole inventory certified by the Division Forest Office.

Similarly, the provision for applying for the use of forest land has also been altered. The old requirement for a feasibility study report or a report detailing factual basis and reasons for needing forest land has been changed. Now, for nationally priority projects, proof that the project is designated by the government through a notification in the Nepal Gazette is required; for projects approved for investment by the Investment Board, the Board's decision is required; for national pride projects, proof confirming this status is required; and for mineral-based industries, proof that it is a nationally priority mineral-based industry meeting the standards set by the Cabinet is required.

For projects signed before Bhadra 14, 2082, a special provision has been made that if the agreement mentioned depositing money for the use of forest area, the amount to be deposited in the Fund must be determined based on the updated inventory count of trees and poles as per that agreement.

Furthermore, the provisions related to the measurement and grading of timber and firewood have been adjusted. For Sal species, the period has been changed from more than 7 years to more than 5 years; for Asna, Sisau, and Teak species, from more than 5 years to more than 2 years; and for other species, from more than 3 years to more than one year. For firewood, the period has been changed from more than 4 years to more than one year. This appears to make the management and trade of forest products more practical.

It is mentioned that for the export of non-timber forest products without processing, approval from the Department is required as specified by the Government of Nepal, Cabinet, through a notification in the Nepal Gazette. Additionally, the Cabinet can provide necessary timber by waiving royalties for traditional national festivals (such as Indra Jatra, Seto Machhindranath Jatra, etc.) through a notification in the Nepal Gazette.

Authority to Provinces

Another significant aspect of this regulation is the transfer of most authority to the provincial governments. The authority to approve the removal of trees under forest product management has been transferred to the provincial ministry. However, if the plan for the sale and distribution of timber and firewood spans more than one province, the consent of the Department will be required. This strengthens the decentralization of authority in line with the spirit of federalism.

Other important amendments, such as the management of hazardous trees, availability of timber for national festivals, regulation of non-timber forest product exports, and execution of work through electronic means, aim to make forest administration more efficient, transparent, and citizen-friendly.

Hazardous trees located outside forest areas, on government office premises, public spaces, or private land, can be removed after evaluation to prevent loss of life and property, and the resulting forest products must be auctioned and deposited into the revenue account. Furthermore, if structures need to be built within the premises of government offices or trees need to be removed for other reasons, they can be removed with the consent of the body one level higher after evaluation, and the process for managing these is specified. It is mentioned that for wildlife farming outside protected areas, the user group must submit a work plan, either independently or in partnership, to the Department for approval with the recommendation of the Division Forest Office.