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FPIC Process for Upper Trishuli-1 Conducted

Tuesday, January 1st, 2019

KATHMANDU, Jan 1, 2019: Nepal Federation of Indigenous Nationalities (NEFIN) in collaboration with International Finance Corporation (IFC), Nepal Water & Energy Company (NWEDC) and local government of the affected villages facilitated Free, Prior, and Informed Consent (FPIC) process in the affected areas of Upper Trishuli-1 (UT-1) Hydropower project of Nepal. The process was undertaken throughout June to November 2018.

The Upper Trishuli-1 Project (UT-1) is a 216 Mega Wat (MW) hydropower project in the Trishuli River of Rasuwa District of Nepal. Nepal Water & Energy Company (NWEDC) which comprises a consortium of sponsors involving Korea South East Power Company (KOSEP), Daelim Industrial, Kyeryong Construction and IFC Infra Ventures is contracted for the construction of the project. Financing for the project is being considered by, amongst others, IFC, IDA, ADB and several European Development Finance Institutions (EDFIs). Project land acquisition commenced in 2009 and was largely completed by 2012 – prior to the involvement of IFC and other international lenders – and early works involving construction of a key 11 km access road and construction camps (required prior to mainstream project construction) have been underway for several years.

The project and the Government of Nepal (GoN) signed a Project Development Agreement (PDA) in December 2016 and a Power Purchase Agreement (PPA) in late January 2018. NWEDC identified 10 villages namely Thulo Haku, Sano Haku, HakuBesi, Mailung, Gogane, Fulbari, Thankku, Gumchet, Tiru and Nesing the most effected villages by the project. The data shows that 99% of the affected population is of Tamang indigenous peoples. In this juncture, as NEFIN has been demanding Free, Prior, Informed Consent (FPIC) in the matters affecting indigenous peoples got to engage with IFC, NWEDC and local government. The IFC’s Performance Standard 7 (PS7), UNDRIP and ILO 169 also requires FPIC. As in many other projects, the FPIC process in UT-1 is on the critical path for indigenous peoples and for the financing institutions of the project, to sustain indigenous peoples’ rights to land, territories and resources. The FPIC process was undergone through the several steps. Each step with specific milestone was recorded and submitted to IFC (IFC as one of the potential lenders for the project). Through these several steps of the process indigenous peoples of affected area together with NEFIN and collaborators came up with four key outcome documents.
Key outcome documents:

1. UT-1 Indigenous Peoples Plan (IPP)
2. UT-1 Tripartite Agreement for IPP Implementation (Annex: VII-B of the final report)
3. Framework for Consensus Agreement Relating to Indigenous Peoples’ Demands (Annex: VII-A of the final report)
4. Consent Statement (Annex: VII-C of the final report).

Indigenous peoples throughout the process held the authority to define and decide their plans, and to have a meaningful participation in development of IPP and other decisions. The FPIC process respected the fact that the consent must be determined in accordance with indigenous peoples’ customary laws and practices. The discussion on the matters took account of the fact that Free, Prior and Informed Consent (FPIC) is not a one-off process; instead it is an ongoing process of dialogue and decision making of indigenous peoples. It has to maintain a good faith cooperation between indigenous peoples and a Company to implement IPP and other decisions. The cooperation depends on the gradual fulfillment of commitments, with the understanding that it may be revoked if the commitments are not followed.