World Bank’s First Dispute Resolution Service Outcome: Parties Settle in Nepal Electricity Transmission Line Project Case
Agreement stems from year-long mediation process to address local community concerns and opens the way for major transmission line project to be completed
WASHINGTON, April 27, 2023 –Community members living along the planned pathway of a long-delayed transmission line and the Government of Nepal have reached an agreement that paves the way for the completion of the power line and facilitates the flow of electricity within Nepal and to neighboring India, the World Bank Accountability Mechanism announced today. Importantly, the outcome met concerns of community members who signed the agreement.
The agreement is the World Bank’s first-ever outcome mediated by the Dispute Resolution Service, which sits under the World Bank Accountability Mechanism (AM). The World Bank Board of Directors formed the AM in 2020 to offer communities who have filed a complaint about a World Bank project the option of either dispute resolution or a compliance investigation process.
The AM’s Dispute Resolution Service, which went into operation about 18 months ago, has been working on three cases, with the Nepal complaint the first to reach resolution. The notice of the dispute resolution agreement to the World Bank Board can be found here. The specifics of the Nepal agreement remained confidential, by the request of all who signed the deal: the Nepal Electricity Authority and 63 community members.
The case involves a complaint filed in late 2021 by 49 people in the community of Dumkibas, about 200 kilometers (135 miles) west of the capital Kathmandu. The construction of the last two towers for the 220 kilovolt, decade-old Bharatpur-Bardaghat Transmission Line Project was put on hold pending the outcome of the dispute resolution case.
"The Dispute Resolution Service’s role in bringing the legitimate demands of the community toward a sustainable solution through repeated engagement in mediation between the Nepal Electricity Authority and the community is commendable,” said members of the community in a statement. “We, the affected community, are fully confident that Dispute Resolution Service will continue its presence and provide necessary support.”
Dominique Favre, an Executive Director on the World Bank Board and Chairman of the Board’s Committee on Development Effectiveness, also thanked the World Bank Accountability Mechanism’s new Dispute Resolution Service and its mediators “for their work in bridging the differences between the parties. The outcome is of major significance for those on the World Bank Board who believe that the dispute resolution option in some cases can help communities and governments overcome impasses and assure that we are held accountable for the projects we finance.”
Orsolya Székely, Accountability Mechanism Secretary, commended both the community members and the government for sticking with the year-long process.
“I am very thankful for many outcomes from this mediation process,” she said. “One is that the affected community’s concerns not only were heard, but that community members and the Government of Nepal found practical and mutually beneficial solutions to resolve their differences. We also were able to reach an agreement because of the excellent work of our mediators and facilitators, and the constructive role played by World Bank management as observers in the process.”
In the complaint filed with the World Bank, the community members claimed that the transmission line had been rerouted to pass through their densely populated community. They claimed that they were neither meaningfully consulted nor provided any information about the project and alleged that the planned alignment of the transmission line would have adverse impacts on community members’ homes, schools, cultural and religious sites, agricultural lands, environment and economic activities, and could threaten their health and safety.
In response, the World Bank management said that the planning and original alignment of the Bharatpur-Bardaghat transmission line dated back more than 20 years, and that many of the related problems and conflicts that the project aimed to address were issues that predated the complaint.
The Bharatpur-Bardaghat transmission line project was part of the World Bank-funded Nepal-India Electricity Transmission and Trade Project. The Bank discontinued its funding in November 2021 for the last transmission lines, citing continued delay despite repeated deadline extensions.
In early 2022, a team from the Inspection Panel, an independent function at the World Bank which is part of the Accountability Mechanism, visited Nepal and found that the case was eligible for an investigation on the matter because of the conflicting assertions between the community members and Bank management on issues related to the construction of the transmission line.
Last April, AM Secretary Székely offered the option of dispute resolution to the complainants and the government, which both parties accepted.
The dispute resolution process began with the mediators holding separate meetings with parties and other stakeholders to understand issues and perspectives and build trust and rapport. The mediators also provided informal capacity building sessions to the parties. As confidence in the process grew and communications and trust between the parties improved, the mediation team moved to facilitated joint meetings.
Throughout the process, mediators listened carefully to each side and tried to understand their goals, priorities, and fundamental needs. They assisted the parties with negotiation strategy and scenario planning; collecting and exchanging relevant data and information; improving mutual understanding and how they listened and communicated with one another; crafting proposals and counterproposals; developing options for possible settlement; weighing alternatives; and ultimately drafting their written agreement.