"Hanging by Thread: Indigenous Peoples Rights in Renewable Energy Transition - How Multilateral Development Banks and States Deny the Rights to Free Prior and Informed Consent (FPIC) in Hydropower Projects in Nepal", 28 April 2025

Lawyers' Association for Human Rights of Nepalese Indigenous Peoples (LAHURNIP) and Accountability Counsel's latest report examines the implementation of Free, Prior, and Informed Consent (FPIC) in the context of hydropower development projects in Nepal, a right explicitly enshrined under international law and policy safeguards (akin to internal rules) of Multilateral Development Banks (MDBs). Focusing on four major projects—Likhu Project, Tanahu Project, Upper Trishuli-1 (UT-1) Project, and Upper Arun Project—the report evaluates whether FPIC was meaningfully conducted and respected during project planning, design, implementation, and operation..

The report finds frequent shortcomings, including failures by the Nepal Electricity Authority (NEA) and other state authorities, private developers, and MDBs, to adhere to FPIC requirements, resulting in adverse social, cultural, and environmental impacts on indigenous peoples…

Project actors repeatedly used or legitimised narratives, and acted or omitted to act in ways that had the effect of disentitling rights holders from fully and meaningfully participating in the process, or pre-deciding project outcomes.

Across all four projects, project actors either entirely avoided conducting FPIC, or implemented their obligation inadequately, often reducing it to mere consultations or information-sharing exercises. Project actors initiated FPIC processes after project approvals were already given or secured, or during implementation, contrary to international law and safeguards policies that require FPIC before the project’s commencement.

Affected communities reported incomplete information disclosure, inadequate compensation, and retaliations against those resisting project activities. Projects financed by the MDBs caused physical displacement, environmental degradation, loss of livelihoods, cultural heritage, and traditional knowledge, social conflicts, risks to physical security and safety, amongst others.