Business Ethics and Sustainability: A Report on Nepal's Corruption

This report delves into the critical issue of business ethics and its challenges in Nepal, focusing on various forms of corruption prevalent in the country. It begins with an introduction and background, defining corruption and highlighting its impact. The report then explores different types of corruptio...Read More

bUSINESS ETHICS AND SUSTAINABILITY

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Contents
Introduction................................................................................................................................2
Background................................................................................................................................2
Various forms of Corruption in Nepal.......................................................................................3
Strategies to combat the corruption............................................................................................4
Conclusion..................................................................................................................................5
References..................................................................................................................................6

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Introduction
Over the years, there has been immense number of debates over the definition and forms of
corruption. As per the definition stated in the Merriam Webster Dictionary, corruption refers
to the dishonest or illegal behaviour, which is normally engaged into by the powerful people
(Merriam Webster Dictionary, 2018). The dictionary states its further meanings to be
inducement to wrong acts by improper and lawful means. Thus, in simple words, corruption
can be stated to be the abuse of public power for the personal benefits. It is significant to note
that corruption has become a central point of political agendas both at national and
international levels. The following work is aimed at analysing the various forms of corruption
in Nepal. In addition, the work will shed light on the strategies that can be employed by the
government to minimise the corruption and its ill effects.
Background
In simple terms, corruption involves two chief components namely the existence of the
private gains and the misuse of the power to obtain such gains (Schwartz, 2017). It is a
complex occurrence, which comprises of a number of facets and the same can occur in varied
forms at varied levels. The roots of the corruption are well discovered and established at the
national, state, and societal institutions. Both the public and private enterprise offices are
abused by the individuals in power for the consideration of their personal gains. The
individuals in such a way do the use of the power, that it results in the violation of a statute
and it includes the acts like that of bribery.
However, it must be noted that personal gains do not only involve the money. It is also
essential to note that as the corruption takes place at various levels, the parties to the said acts
differ from level to level. While at the national levels, the parties can be stated to be the
government officials and the administrative institutions, at societal levels the parties may be a
local authority, an individual, or corporate. Apart from this, the corrupt behaviour is also
stated to be a part of the morals and ethics of an individual, and therefore is regarded as a
cultural problem among the societal structures.
Thus, there may exist a single individual or a group of them, who are engaged in various
activities such as sanctioning of grants, offering favourable terms in loans and contracts, and

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offering or accepting benefits outside the framework of employment. The basic element in all
the above listed acts is that the power is abused and such abuse results in violation of a
statute.
Various forms of Corruption in Nepal
As stated above, there are various forms of corrupt activities that are being followed at the
various levels. Some major forms of corruption that are being practiced and are prominent in
Nepal are stated as follows.
Bribery: Bribery refers to the payment of an amount, or a part of a contract or any other
favour whether in cash or in kind, to the government official, in order to secure a contract or a
favour by an individual, or business entities. In simple terms there are the payment made to
the officials for the smooth functioning or to securing speed in a transaction (Rose-Ackerman
and Palifka, 2016). These transactions are complex or time consuming otherwise. Bribe is
one of the most prominent forms of corruption in Nepal and often businesspersons of Nepal
claim that the complex structure of government policies and slow processes, they are often
forced to pay bribe to the government officials. Some of the instances of processes where the
bribe culture in Nepal is very famous are issuance of licenses, tax clearance certificates,
obtaining of import export code and others. The bribery not only undermines the competitive
strengths of business of Nepal, but also shifts the trust from politicians and government
departments.
Extortion: Another major form of corruption that is being practiced in country of Nepal is
extortion, which involves the extraction of money and resources by engaging into coercion,
violence, or threat. Thus, there is being created an unsecure atmosphere where various forms
of harassment and intimidation is practiced on individuals, private businesses and public
officials. The political conflicts in the Nepal play a major role in the promotion of the
extortion in the various forms and levels in the country. The individuals belonging to the
ruler’s family use means of concealed threat to extract resources from the businesses.
Favouritism: Favouritism refers to the abusing of power in order to distribute the resources
and employ the persons on the high-ranking positions. Favouritism occurs when members of
family, relatives, persons belonging to same caste, ethnic groups, race, religions, and place of
origin favour the closed and trusted (Iyer and Samociuk, 2016). In terms of political scenario,
it is significant to note that the state officials and politicians are in power and thus have

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access to resources. These engage in practicing the preferential treatment based on one or
more of the above- mentioned attributes. It is significant to note that in the country of Nepal,
Prime Minister of the country is granted the constitutional right to appoint the individuals on
the high-ranking positions (Adhikari, 2016). Thus, this makes the possibility higher on lines
of other customary and legal rights of the favouritism.
Nepotism: This is another major form of corruption, which is also referred to as the special
form of favouritism. The same is practiced in the form of preference of the family members
in the political sphere. A number of political leaders in Nepal have secured the high and
powerful positions in various spheres, with the practice of nominating the family members.
While the family members are lacking in terms of skills, qualifications and efficiencies; the
politicians have used the means of nepotism in transferring the public power into the private
wealth for their family members. Thus, a number of positions in the public councils and
committees are secured and passed on from one generation to others.
Strategies to combat the corruption
As stated in the previous parts, there are various forms of corruption. It is significant to note
that corruption is a serious crime also because it gives rise to a number of other issues such as
poverty, money laundering, impeding of the government investment, overall loss of revenue
of the state, misuse of the powers and others. Thus, it is essential for the government to
formulate policies to counter the issues. Some of the strategies that can be the part of policy
formulations are listed as follows. The government must check the institutional systems and
keep a check on the incentives to prevent the occurrence of phenomena in first place. It is
necessary to develop and enforce mechanisms that are built on the pillars of transparency and
accountability to be practiced by the officials (Jamil, Askvik and Baniamin, 2016).
Technology can play a major role in the same. Government of Nepal can invest in
technological innovations to reduce the paper work to the maximum and enhance the
reporting requirements. The long-term sustainable efforts for the reduction of corruption can
include the setting up of codes of conduct, formulation of standards for various practice and
departments and strengthening of the laws and statutes. The modification of laws that are
existing likewise from centuries is essential.
Another means is to strengthen the police system of the country and enabling means to secure
the whistle-blower protections. It is suggested to set up the complaint units and the public

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action committees at various institutions. Another strategy that can be adopted is to ease the
government processes such as securing of permissions and licenses, and enable the
involvement of the bureaucrats to as minimum as possible. Lastly, the government is
suggested to join the international conventions and international communities to seek support
and knowledge from across the globe. The society must be educated and helpline must be set
up for reporting of fraudulent activities round the clock.
Conclusion
As per the discussions conducted in the previous parts, it can be stated that corruption is a
serious issue for every nation including the country of Nepal. The crime is serious because its
roots lie in various levels and various forms, which are impossible to erase completely. The
work sheds light on the various forms of corruption that are prominent in the country of
Nepal, such as bribery, favouritism, and nepotism. These forms are prominent because of the
societal and political structure of the country that confines the power in the hands of the
rulers and their families. The latter part of the work sheds light on the strategies that can be
adopted by the government to combat the various forms of corruption. Some of the strategy
suggested investment in technology and enhancing the reporting and accountability
requirements. The government must invest in such strategy to counter the long reaching
impacts of corruption.

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References
Adhikari, P. (2016) Corruption in the Nepalese Government Sector: is Accounting involved?
or Corruption in the Public Sector with special reference to Nepal: is Accounting involved?.
Journal of the Institute of Chartered Accountants of Nepal.
Iyer, N. and Samociuk, M. (2016) Fraud and corruption: Prevention and detection. UK:
Routledge.
Jamil, I., Askvik, S. and Baniamin, H. M. (2016) Citizens’ Trust in Anticorruption Agencies:
A Comparison Between Bangladesh and Nepal. International Journal of Public
Administration, 39(9), pp. 676-685.
Merriam Webster Dictionary (2018) Definition of corruption. [online] Available from:
https://www.merriam-webster.com/dictionary/corruption [Accessed on: 17/01/2019].
Rose-Ackerman, S. and Palifka, B. J. (2016) Corruption and government: Causes,
consequences, and reform. UK: Cambridge university press.
Schwartz, M. S. (2017) Corporate social responsibility. UK: Routledge.