Borrowing and Lending Law in Nepal (2026): Civil Code 2074 + NRB
A 2026 practitioner's guide to borrowing and lending in Nepal under the Muluki Civil Code 2074 and the Nepal R...
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Environment pollution in Nepal is governed by the Environment Protection Act 2076 (2019) — which repealed the earlier 1997 Act and aligned the framework with Nepal's federal structure — and the Environment Protection Regulation 2077 (2020). Parallel criminal provisions sit in the Muluki Aparadh Sanhita (Penal Code) 2074 Sections 111-112 (drinking-water contamination up to 3 years + NPR 30,000; pollution endangering health up to 5 years + NPR 50,000). Serious EPA 2076 violations attract up to NPR 5,000,000 fine and 3 years' imprisonment. Constitution Article 30 grants every citizen the right to a clean and healthy environment and the right to compensation from polluters.
This is the 2026 (2082/83 BS) guide to environment pollution law in Nepal — the EPA 2076 framework, EIA / IEE thresholds, penalty schedule, the Penal Code parallel charges, polluter-pays principle, polluter / brick-kiln enforcement examples and the constitutional anchor. The framework applies to industries, project owners, municipalities, and any party contributing to pollution.
Quick answer — Environment pollution law in Nepal (2026):
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Our corporate team handles environmental compliance across three streams — pre-project clearance (IEE / EIA approval for new hydropower, road, industrial and tourism projects), operational compliance (emissions monitoring, effluent discharge, waste handling at existing facilities), and incident response (pollution events that have generated DoEnv notice or community complaint). The EPA 2076 framework is more enforcement-active than the older 1997 Act, with the Department of Environment running periodic inspections at brick kilns, cement plants, and tannery clusters in the Kathmandu Valley and Terai industrial corridors.
The Environment Protection Act 2076 (2019), enacted on 19 July 2019, is Nepal's principal environmental statute. It repealed the Environment Protection Act 2053 (1997) and aligned the framework with the federal Constitution 2015 structure — distributing roles among federal, provincial and local governments. The Act covers the IEE / EIA approval framework, pollution control, the Environment Protection Fund, restoration orders, polluter-pays compensation, and the enforcement powers of the Department of Environment. The Ministry of Forests and Environment (MoFE) is the lead policy ministry; DoEnv handles technical review.
The Environment Protection Regulation 2077 sets the thresholds for environmental assessment. EIA (Environmental Impact Assessment) under Schedule 2 applies to large projects — hydropower >50 MW, road >25 km in sensitive areas, industrial zone >50 ha, transmission lines >132 kV, irrigation >10,000 ha, hotels >100 rooms in sensitive zones. IEE (Initial Environmental Examination) under Schedule 1 applies to smaller projects below the EIA thresholds. The threshold determines the depth of assessment, the public-consultation requirements, the approval authority, and the typical timeline.
The EIA process runs through five stages. (1) Scoping — the project proponent submits initial documents and consultations. (2) Terms of Reference (ToR) — approved by MoFE within 15-30 days. (3) EIA report — preparation by the proponent / consultant. (4) Technical review by DoEnv within 60 days. (5) MoFE approval — based on the technical review and public-consultation outcomes. Total timeline is typically 12-24 months for a full EIA. The IEE process is shorter, with a statutory 21-day decision window post-submission.
Serious violations of the EPA 2076 attract up to NPR 5,000,000 fine and up to 3 years' imprisonment, with possible project closure orders and restoration-to-original-state requirements. Sec 15 of the Act gives the government pollution-control powers including emission standards for vehicles, industries, hotels, equipment, and hazardous substances, and directives to violators. Compounding penalties apply for repeat or continuing violations under the Sec 29-35 framework. The Environment Protection Fund collects penalties and channels them into restoration and conservation work.
The Penal Code 2074 provides criminal provisions parallel to the EPA. Section 111 criminalises contamination of drinking water — up to 3 years' imprisonment + NPR 30,000 fine. Section 112 criminalises pollution endangering human health — up to 1 year + NPR 10,000 for general endangerment, rising to 5 years + NPR 50,000 where the pollution actually endangers life. The Penal Code charges typically run alongside EPA 2076 penalties — the regulatory route punishes the violator administratively; the criminal route addresses cases where significant harm is caused. The District Court is the criminal forum.
The polluter-pays principle is codified through three layers in Nepal. Constitution Article 30(2) gives a victim of pollution the right to compensation under law. EPA 2076 requires the polluter to restore the environment to its original state, pay restoration costs, and compensate affected parties. DoEnv directives can impose monetary penalties and corrective-action obligations on the polluter. The principle operates across air, water and soil pollution, and applies to industries, project owners, municipalities (for solid-waste failures), and any party contributing to pollution. Civil damages claims by affected parties run alongside regulatory action.
Brick kilns in the Kathmandu Valley (15 in KTM, 32 in Lalitpur, 63 in Bhaktapur — broadly 110 in the Valley, with ~30,000 workers) operate seasonally Nov-May and contribute significantly to PM2.5 / PM10 air pollution. The Department of Environment runs stack emission monitoring under EPA 2076 Sec 15 ambient and source-emission standards, with non-compliant kilns subject to closure orders. The shift to cleaner technology (Vertical Shaft Brick Kiln, Hoffman, zigzag) is incentivised by both regulation and tax policy. Kilns operating without IEE / EIA approval face EPA penalties; chronic non-compliance leads to permanent closure.
The Department of Environment operates an Air Quality Monitoring (AQM) network across the Kathmandu Valley with stations at fixed sites publishing real-time PM2.5, PM10, NO2, SO2, CO and O3 data. The Kathmandu Valley Air Quality Management Action Plan (released by DoEnv) sets sector-specific reduction targets — vehicles, brick kilns, road dust, open burning, industrial sources. National Ambient Air Quality Standards (NAAQS) and source-emission standards under EPA 2076 Sec 15 form the legal underpinning. Public-health response actions during severe-pollution days include school closures and public-transport advisories.
At the project-planning stage for IEE / EIA approval — pre-application legal review prevents costly resubmission and delay. At the operational stage on receipt of DoEnv inspection notice or community complaint. On EPA 2076 charging or Penal Code Sec 111-112 prosecution for actual pollution events. For polluter-pays compensation claims (defending or filing). And for constitutional / writ litigation on environmental rights under Article 30. To get advice on an environment compliance or pollution matter, speak with our lawyers today.
Last reviewed: May 2026
Nepal's principal environmental statute, enacted 19 July 2019. Repealed the EPA 2053 (1997). Covers IEE / EIA approval, pollution control, polluter-pays, restoration orders. Penalty up to NPR 5M fine + 3 years.
Hydropower >50 MW; road >25 km in sensitive area; industrial zone >50 ha; transmission >132 kV; irrigation >10,000 ha; hotels >100 rooms in sensitive zones (EPR 2077 Schedule 2).
Article 30 grants every citizen the right to a clean and healthy environment and the right to compensation from polluters. Constitutional anchor for the EPA 2076 framework.
The EPA 2076 (2019) is more enforcement-focused than the 1997 Act it replaced. Key changes: penalty ceiling raised significantly (NPR 5 million + 3 years); IEE / EIA thresholds rationalised across sectors; federal-provincial-local distribution of approval authority reflecting the 2015 Constitution; Environment Protection Fund formalised; restoration / compensation obligations strengthened; pollution-source standards expanded to vehicles, industries, hotels, equipment, and hazardous substances under Sec 15. The framework also tightens monitoring and reporting obligations on the project owner.
Schedule 2 of the Environment Protection Regulation 2077 sets the EIA thresholds — large projects (hydropower >50 MW, road >25 km in sensitive area, industrial zone >50 ha, transmission >132 kV, irrigation >10,000 ha, hotels >100 rooms in sensitive zones). Smaller projects below those thresholds require an IEE under Schedule 1. The threshold determines depth of assessment, public-consultation requirements, approval authority (federal / provincial / local), and timeline (12-24 months EIA vs 3-6 months IEE).
A full EIA typically takes 12-24 months from initiation to approval. Scoping consultations + ToR approval consume 1-3 months; the proponent prepares the EIA report (typically 6-12 months including baseline data collection and stakeholder consultations); the DoEnv technical review runs 60 days statutory; MoFE final approval follows. Public consultations and community-grievance handling can extend the timeline. Where the project is contested by affected communities, the EIA can extend further. Plan the EIA pathway with the overall project timeline in mind.
MoFE (Ministry of Forests and Environment) is the federal-level approval authority for large EIA projects. Provincial Ministries of Forests and Environment handle medium-scale projects within their jurisdiction. Local-level (municipality / rural municipality) authorities handle small IEE projects per the EPR 2077 framework. The Department of Environment (DoEnv) is the technical-review body across all tiers, supporting the substantive evaluation of the EIA / IEE report against the standards and mitigation requirements. The Constitution 2015 federal structure informs the distribution.
DoEnv, under MoFE, is the principal technical-review and enforcement body. It evaluates IEE / EIA reports, sets ambient and source-emission standards, runs air-quality monitoring stations, conducts inspections of industries / facilities, issues compliance directives and penalty notices, and supports MoFE on policy. The Kathmandu Valley Air Quality Management Action Plan and the National Ambient Air Quality Standards are DoEnv products. The Department operates technical units on air, water, solid waste, and chemicals.
Two parallel routes. Under Penal Code 2074 Section 111, contaminating drinking water attracts up to 3 years' imprisonment and NPR 30,000 fine. Under EPA 2076 Section 15 and ambient water-quality standards, serious water-pollution violations attract up to NPR 5,000,000 fine, project closure, and restoration order. Both regimes can be invoked. Compensation to affected parties under Article 30(2) of the Constitution and Civil Code 2074 framework runs in parallel. The District Court is the criminal forum; DoEnv / MoFE handle administrative penalty.
Brick kilns require IEE approval under EPR 2077 and operate under DoEnv stack emission standards. The Kathmandu Valley operates ~110 kilns (KTM 15, Lalitpur 32, Bhaktapur 63) seasonally Nov-May. Non-compliant kilns face closure orders, with the shift to cleaner technology (Vertical Shaft Brick Kiln, Hoffman, zigzag) incentivised by regulation and tax policy. Kilns operating without IEE approval face full EPA 2076 penalties. Chronic non-compliance leads to permanent closure. The Kathmandu Valley AQM Action Plan singles out brick kilns as a priority source for emission reduction.
The Environment Protection Fund, established under EPA 2076 Section 8, channels penalty collections, donor grants, and government allocation into environmental restoration, pollution-control infrastructure, heritage protection, air- and water-quality programmes, and conservation projects. The Fund is administered under MoFE oversight. Penalty receipts from EPA 2076 enforcement, IEE / EIA fees, and other environmental levies flow into the Fund. The Fund supports both direct restoration work and capacity-building / public-awareness programmes.
Yes. Constitution Article 30 (right to clean environment) and Article 46 / 133 (writ jurisdiction at High Court / Supreme Court) allow communities, NGOs and affected individuals to file writ petitions on environmental grounds. The Supreme Court has expanded standing (locus standi) to permit public-interest litigation (PIL) on environment matters, with several landmark decisions ordering pollution control, restoration, and policy framework adoption. Major PIL examples include the Kathmandu Valley air-quality writ, hydropower-impact petitions, and heritage-site protection writs.
The Ministry of Forests and Environment (MoFE) is the federal-level policy ministry. MoFE administers the EPA 2076, frames national environmental policy, approves large-scale EIAs, supervises DoEnv on technical work, coordinates with provincial / local environment authorities, manages international climate cooperation (UNFCCC, Paris Agreement obligations), oversees the Forest framework alongside Environment, and coordinates the National Climate Change Council. MoFE leads inter-ministerial coordination where environment intersects with industry, energy, agriculture, urban planning, and transport.
Hydropower projects above 50 MW require full EIA under EPR 2077 Schedule 2; projects between 1-50 MW require IEE; projects under 1 MW have lighter requirements. The EIA covers downstream-flow impacts (e.g., environmental release flow), sediment management, fisheries, riparian zones, displacement and livelihood impacts, and decommissioning planning. Hydropower projects are a major source of EPA 2076 administrative attention given their scale and downstream impacts. Recent Supreme Court litigation has addressed riparian environmental-flow obligations on several large projects.
Solid Waste Management Act 2068 (2011) and the EPA 2076 framework together govern solid-waste management in Nepal. Local-level governments (municipalities / rural municipalities) are the primary authority for collection, segregation and disposal. Industrial and hazardous waste sit under additional EPA 2076 provisions on hazardous-substance handling. Plastic-bag restriction directives have been periodically issued in Kathmandu Valley. The Bancharedanda landfill (replacing Sisdole) is the principal Kathmandu Valley landfill; chronic disputes between Kathmandu Metropolitan City and the host municipality on waste deliveries continue to surface.
No. Nepal does not have a dedicated Environment Court. Criminal cases under EPA 2076 and Penal Code Sec 111-112 are heard at the District Court; appeals lie to the High Court and the Supreme Court. Administrative orders by DoEnv / MoFE are challenged through the standard writ jurisdiction at the High Court. Some commentators have advocated for a specialised Environment Court given the technical complexity of pollution cases; no statutory step has been taken. Compensation claims under Article 30(2) run through the civil-court framework.
Nepal ratified the Paris Agreement in 2016 and submitted its Nationally Determined Contribution (NDC) under the UNFCCC framework. The Second NDC (2020) committed to carbon neutrality by 2045 in some sectors, expansion of renewable energy, climate-resilient infrastructure, and forest cover targets. MoFE coordinates implementation through the National Climate Change Council and the Climate Change Management Division. Sectoral plans on energy, forests, agriculture, urban planning, and water resources are aligned with the NDC. EPA 2076 and EPR 2077 incorporate climate-impact assessment within the EIA / IEE framework.
Yes. Constitution Article 30(2) gives every person affected by pollution the right to compensation under law. EPA 2076 operationalises this through polluter-restoration and compensation obligations. The affected party can file at the relevant District Court for civil compensation alongside or after the EPA / Penal Code prosecution. The amount depends on the demonstrable harm (medical, property, livelihood, ecosystem damage). Class-action style proceedings are possible where many community members are affected by a single pollution event. The polluter-pays principle is the unifying concept.
The Chure (Siwalik) range across southern Nepal has been declared a conservation-priority zone given its critical role in groundwater recharge, sediment stabilisation, and downstream Terai ecology. The President Chure-Tarai Madhesh Conservation Development Board oversees Chure-area conservation, with restrictions on quarrying, deforestation, and unsustainable land-use. Environmental clearances for projects in the Chure zone face heightened scrutiny under EPA 2076 and EPR 2077. Periodic policy adjustments (export restrictions on river-bed materials) target Chure preservation specifically.
At the project-planning stage for IEE / EIA approval — pre-application legal review prevents costly resubmission and delay. At the operational stage on receipt of DoEnv inspection notice or community complaint. On EPA 2076 charging or Penal Code Sec 111-112 prosecution for actual pollution events. For polluter-pays compensation claims (defending or filing). And for constitutional / writ litigation on environmental rights under Article 30 — particularly in PIL situations where systemic environmental issues need court intervention. A lawyer also drafts environmental compliance policies as a corporate-governance investment.
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