Sand, Gravel and Stones Management in Nepal

1. Background

Ministry of Federal Affairs and Local Development (MoFALD) is responsible for approving Initial Environmental Examination (IEE) reports of various development sub-projects such as road, bridge, sand gravel & stones, land fill site received from District Development Committees (DDCs). IEE approval process of development sub-projects were initiated by the MoFALD since January 2005. However, to ease minimize the time interval and for the sake of easiness, the MoFLAD has handed over the IEE approval authority of Sand, Gravel and Stones (SG&S) to District Development Board since March 2016. The objective of the article is to understand  i) number and types of IEE Reports approved by the MoFALD, ii) analyses month wise approval of IEE reports, and iii) key issues in managing SG&S and prescribes policy recommendations for effective management.

Though the database of IEE reports are maintained in the MoFALD, no analysis as such has been carried out thus far.    In order to make informed decision in the sector of sand, gravel and stones, it was felt necessary to identify number of IEE reports approved by the MoFALD and its implementation effectiveness.  The result of the study would help formulating informed policies in the days ahead. Towards this end, the study was administered. 

Data on number and types of IEE reports approved by MoFALD was extracted from database of MoFALD. Information on management issues were acquired through administering questionnaire survey at 75 District Development Committees by the MoFALD in October 2011 and reviewing available documents related to the policies and directives on sand gravel and stone management. In total, out of all 75 districts, only 26 districts responded questionnaire up to December 2011.  In addition, in 2011 the Ministry through the Poverty and Environment Initiative (PEI) Program under the Local Governance and Community Development Program (LGCDP) commissioned a study on Current Practices of Revenue Generation from Natural Resources for the Local Bodies of Nepal in five districts– Kailali, Rupandehi, Makawanpur, Dhadiing and Saptari. Likewise, to promote third party monitoring systems, the Ministry had entrusted the Central Department of Environmental Science of Tribhuvan University to carry out study on effectiveness of implementation of Initial Environmental Examinations (IEEs) reports in Dhading and Kabhre Districts in 2011.

Based on analysis of the questionnaire survey and aforementioned two studies, and monitoring finding of Central Department of Environmental Science, various issues in sustainable extraction of SG&S were identified and policy recommendations have been made accordingly. Total number of IEE reports approved by MoFALD, associated issues and policy recommendations were felt necessary so that the SG&S can be managed more effectively and efficiently in the days to come.

2. Results

Until March 2016, MoFALD has approved a total of 382 EE reports and equal number of Terms of References (ToR) of sand, gravel and stones (SG&S). The first IEE report of SG&S approved by the Ministry of Federal Affairs and Local Development was Various River from Palpa in 2007. The IEE approval process got momentum since 2010 when the Parliamentary Committee asked local bodies to get approval in the IEE reports while collecting and extracting SG&S.  As shown in Table 1 almost 50% of the total 382 IEE reports, got approval from the MoFALD in four months i.e. June, July, November and December. July was the busiest month for approving IEE report when 65 reports got approval.  As can be seen in table 1, 57% of the total approved 382 reports were from Churia Region alone.  

Table 1 Month wise Approved IEE Reports of SGS

Month	January	February	March	April	May	June	July	August	September	October	November	December
Number	14	14	12	29	29	32	65	59	19	23	33	53

The detail of IEE reports that were approved annually are presented in Table 2. According to the Table 2, there is increasing trend of preparing IEE reports over the years. In every two years interval, the number of IEE report approved by MoFALD has increased. As the IEE approval was for two years, District Development Committees had to prepare and submit by the end of every second year for another two years. 

The highest number of IEE approved reports were 29 from Dhading Districts. The other top 10 districts in terms of approving IEE reports include Nawalparasi, Morang Kapilbastu, Arghaakhachi, Jhapa,Palpa,Kailali, Makawanpur, Sindhhuli, Sindhupalchowk, Tanahun. The detailed of IEE approval status in terms of District is presented in Annex 1.

Table 1. Geography wise IEE reports approval status over the years 

Geography	2007	2010	2011	2012	2013	2014	2015	2016	Grand Total
Chure		64	18	11	49	42	33	2	219
Mid Hills	2	18	26	13	42	29	31	2	163
Grand Total	2	82	44	24	91	71	64	4	382

3. Issues and challenges

The following paragraphs describes key issues in managing sand, gravel and stones in Nepal.

3.1 Resource ownership

Box 1 Average Days of ToR Approval = 15 Average Days for Report Submission after ToR Approval = 96   Average Days for Report Submission and Presentation = 22 Average Days for Presentation and Final Report Submission = 41   Average Days for Final Report Submission and Approval = 21 days Total days required from ToR submission to IEE Report approval = 195 (6.5 Months)

There is overlap, ambiguity and conflict about who owns the resource and who is authorized to collect, extract or award contracts by levying charges. Local Self Governance Act (LSGA), 1999 confers exclusive ownership of district based resources including SG&S to the District Development Committees (DDCs). On the other hand, The Forest Act, 1993 provides the same authority to the Ministry of Forests and Soil Conservation for the same resource lying within forest areas. According to the Forest Act, forest products are defined as “boulders, soil, stones, pebbles, sand” among others. Likewise, Security Forces, Wildlife Reserve, Custom Office and Buffer Zones are also collecting revenues from SG&Ss. In summary, because of having different windows for collecting revenues, conflicts amongst stakeholders are on the rise in this sub sector. While analyzing the questionnaire survey data, it was revealed that 28% of DDC have ongoing resource use conflicts with District Forest Offices. Even, community forests were charging tax for SG&S. Also, in the absence of clear administrative demarcation between forests and other lands, inter districts revenue collection conflicts have been reported in the border of Kapilbastu and Arghakhachi districts.

3.2 Effectiveness of IEE

As per the Environment Protection Regulations (EPR 1997), extraction of SG&S up to 250 m³ per day requires to undertake IEE. Out of the total 21 SG&S revenue generating survey districts, around 38% have carried out IEEs until when the questionnaire survey was administered. It was revealed that some districts have undergone contractual agreement even without undertaking IEE/EIA studies. Other districts were realizing problems with measurement of SG&S and raising questions on the cost effectiveness of the IEE study as such. As per the mandate of the IEE report, the excavation/collection of SG&S from different river systems has affected the entire watershed in Dhading and the cumulative effects have been observed in Trishuli River and Prithvi Highway. Sediment load was increased in the Trishuli River and the highway has been badly damaged, purportedly due to the movement of large trucks carrying SG&S. Given the complexity and integrated land use system, extracting SG&S from different river system only based on IEE study was in question.  

3.3 Revenue sharing

Some Terai districts were generating revenue through export tax on SG&S. Even, some of the districts were enjoying benefit of export tax that comes from other districts. For instance, Kailali DDC administers an export tax for SG&S that originates from Kanchanpur District. According to LSGA, between 35 and 50 percent of DDC revenues derived from SG&S taxes are expected to be shared with “concerned” Village Development Committees (VDCs), Municipalities, DFOs, and where applicable, Buffer Zone Committees. Almost two third of the entire survey districts were sharing revenues ranging from 18% in Pyuthan to 90% in Udaipur District with an average of 42%with local bodies including Municipalities and VDCs.

3.4 Income and expenditure

The local bodies have been able to raise significant tax and other revenues from the SG&S subsector. However, these revenues have not been sufficiently ploughed back into the protection of the revenue sources – the rivers. In total, 48% of the total SG&S collecting survey districts were investing part of their income ranging from 4% in Nuwakot to 81% in Chitwan to environment protection. Though, the proportion figure is small, investment trend on environment protection has been increasing. For instance, 11% of the total income of 22 districts (Rs. 15, 44, 64,073) from this sub-sector in the country was invested in environment protection activities in 2009 while the proportion of income and investment in environment protection increased by 1% and 2% respectively in 2011. Chitwan district has invested mainly to undertake IEEs. Similarly, other environmental activities include stream bank protection, plantation, awareness raising, disaster reduction and climate change. As per the given authority, different organizations have different tax rate for SG&S. For instance, following the LSGA, some districts are collecting up to 50% revenue while as per the Mining Act others are collecting only 10% revenues from SG&S sub-sector.

3.5 Monitoring and coordination

Due to ineffective monitoring, coordination and law enforcement mechanism, state of impunity has been occurred in managing SG&S in some districts. In some study districts, “mafia” operations have controlled illegal exports of SG&S products, capturing contracts, forming cartels for contracts, not paying DDC tax as per contract (in Kailali), collecting ransom donations from industries, transporting products without paying taxes, etc. If such a state of impunity continues unabated, it will spread to other districts. Sometimes SG&S were being collected from Churia Foot Hills, one of the youngest and fragile ecosystems in Nepal. Having effective coordination amongst stakeholders, regular monitoring and effective law enforcement in place would help enhancing effective management of SG&S.

 

3.6 Priority to local use

Resource use priority should be given to local communities. For instances the drifted wood and other SG&S products of Parsa Wildlife Reserve has not been given priority to local development, instead they are supplying the resources to crusher industries.

4. Policy Recommendations

·      Prevailing policy conflicts over ownership of the SG&S sub sector should be resolved as soon as possible through adopting one door policy. It is recommended to provide the whole sole management authority of the SG&S sub-sector to DDCs. The upcoming revised LSGA may need to address the issue tactfully.

·      There is a need to avail simple, cost effective and user friendly IEE/EIA study guidelines and formats for DDCs and Municipalities. The revised guidelines and formats need to include simple technology to measure SG&S. Decentralizing approval authority of IEE of SG&S to DDCs with a provision of constituting a technical review team comprising of Local Development Officer, District Technical Officer, District Forest Officer, District Soil Conservation Officer and District Environment Focal Person would help improve the quality of IEE reports.

·      In line with the existing Regulations, DDCs should be reminded that the collection and extraction of SG&S resources within their jurisdictions is subject to IEE / EIAs study being conducted.

·      Considering the cumulative and integrated effects of interconnected river system and the sensitive nature of the river ecosystems,

·      Based upon the proposed scale of the extraction, the environmental sensitivity of the area and river, plus the environmental heritage of other activities in the area there should also be a clear guide for SGS extraction EIAs and IEEs. 

·      DDCs should be encouraged to plough back at least 20 percent of their SG&S revenue earnings from each river where extraction takes place, for river protection works such as embankments, placing concrete slabs to demarcate depths up to where the extraction can take place.

·      A more stringent Act should be formulated, promulgated and effectively enforced for punishing and sanctioning illegal extraction to end the current state of impunity. The revenue management, including taxation and revenue sharing system needs be made more transparent so that it helps minimizing state of impunity.

·      Identify environmentally sensitive areas and prohibit collecting SG&S from such sites and adopt site specific policies, especially resource extraction from foot hills of Chure should be strictly controlled.

·      Effective monitoring and feedback mechanism should be established and strengthened from central to district level.

Annex 1: District wise IEE approval status

S.No	Districts	Grand Total
1	Dhading	29
2	Nawalparasi	26
3	Morang	21
4	Kapilbastu	20
5	Arghaakhachi	16
6	Jhapa	14
7	Palpa	14
8	Kailali	13
9	Makawanpur	13
10	Sindhhuli	11
11	Sindhupalchowk	11
12	Tanahun	10
13	Banke	9
14	Kaski	9
15	Mahottari	9
16	Siraha	9
17	Bara	8
18	Bardia	8
19	Chitawan	8
20	Rautahat	7
21	Saptari	7
22	Sunsari	7
23	Dang	6
24	Ilam	6
25	Kabhrepalanchowk	6
26	Kanchanpur	6
27	Nuwakot	6
28	Gorkha	5
29	Ramechap	5
30	Sankhuwasabhaa	5
31	Sarlahi	5
32	Dhankuta	4
33	Dhanusa	4
34	Lamjung	4
35	Shyangja	4
36	Dailekh	3
37	Pyuthan	3
38	Udayapur	3
39	Baglung	2
40	Dolakha	2
41	Gulmi	2
42	Khotang	2
43	Panchthar	2
44	Parbat	2
45	Rukum	2
46	Baitadi	1
47	Bajhang	1
48	Bajura	1
49	Bhojpur	1
50	Jajarkot	1
51	Mustang	1
52	Myagdi	1
53	Okhaldhunga	1
54	Rasuwa	1
55	Rupandehi	1
56	Salyan	1
57	Solukhumbu	1
58	Surkhet	1
59	Taplejung	1

References

·            A Review of Current Practices of Revenue Generation from Natural Resources for the Local Bodies of Nepal, a report prepared by MLD in 2011

·            Central level Environmental Monitoring of Sustainable Collection/extraction of Sand, Gravel and Boulders from rivers of Dhading and Kavre district, Nepal. A Study carried out by Central Department of Environmental Science, TU in 2011