Dabur Nepal Scam: Mole out of Mountain, Blown out of Proportion

By Rajat Sharma

The Commission for Investigation of Abuse of Authority (CIAA), a constitutional anti graft commission formed to see the public sector corruption and irregularities have raided multinational company Dabur Nepal's factory at Rampur in Bara district of Narayani Zone. The CIAA raided the factory after receiving complaints that the company had been imprinting false manufacturing date in its products the CIAA team raided the factory after the case was filed with CIAA by Forum for Protection of Consumers Rights (FPCR) against Dabur Nepal for allegedly distributing products with false manufacturing date. The CIAA alleges the November 2010 has been imprinted as manufactured in January 2011. The CIAA team was led by Joint attorney General, senior government officals of Food and Technology and quality Control and Inland Revenue department. The question here arises why the Department of Commerce officials were not present at such a crucial moment of investigation and raid. It would have been good if it would have been done in the presence of the Birgunj Chamber of Commerce's representatives, a body of the Federation of Nepalese Chamber of Commerce and Industry, at least for the transparency purposes.

Dabur officials have categorically said and is noted in the press that the January date was printed in the pack since it was impossible to deliver the products immediately after its manufacturing, which sounds logical and fair too. Director of Food Technology and quality Control said that producing food in advance under incubation is a common practice exercised worldwide when companies feel the pressure to meet growing demand. It is quite notable that all of the CIAA actions are not always out of controversy. Does CIAA have the authority to oversee the corruption in the Private sector and that also to the Multinational Company? What message it will relay to the world waiting to come to Nepal through FDI.

India happens to be not a geographically proximate neighbor of Nepal but also a close friend. There are ancient ethnic, cultural and religious ties between the two countries. Both countries being the non- aligned, and members of Group of 77, share similarities of approach in many outstanding international problems. SAARC, BIMSTEC have added some more areas for the two countries to work together for achieving the goal of collective self-reliance within the region.

Some analysts and the critics are of the view that four years after the restoration of peace, India has been under attack again – this time some say from a section of Nepal's media for refusing to place advertisements. Just to recapitulate few months back, some Nepali dailies as well as television channels targeted Indian joint ventures, including Dabur Nepal, with allegations that their products contained harmful levels of chemicals and insects and were found to have gone bad even before the expiry date approached. During the period, concerned at the growing allegations, Embassy of India in Kathmandu issued a statement, warning that such maneuvering would repel foreign investors from setting up joint venture in Nepal.

Indian ayurvedic giant Dabur India's Nepal unit, Dabur Nepal, is under a powerful cover campaign by a section of Nepal's media, finally causing the Embassy of India in Kathmandu to express concern.

Though a few other Indian joint ventures in Nepal, including PepsiCo, have also faced attacks by some newspapers and television channels in the recent past, Dabur, one of Nepal's biggest revenue earners, has been the subject of systematic smear campaigns by a Nepali tabloid and some television channels since some time back

According to Food technologists, the then blamed juice was packed in the tetra pack by aseptic packing technology. Aseptic packaging is a method which has more complicated and superior technology than conventional canning. In today's world we find many aseptically packaged products around us. The minimum heat treatment to the product adopted in aseptic packaging technology assures better nutrients retentions and good sensory property of the food compared to canned products. Aseptic processing is the method where the pasteurized product is filled in the sterile container in aseptic condition. Hence, strict quality control is essential in order to preserve the quality of the product in every aseptic processing industry. If some error occurs during aseptic processing, the whole lot of the product is damaged and should be dumped; hence every industry pays serious attention in maintaining the quality of the product.

However, the tetra pack is made from the combination of a very thin aluminum foil, polyethylene wrap and paper as the laminate. This pack, if subjected to sharp pointed objects, it may puncture and the possibility of post packaging contamination occurs there. Therefore, the handling, transportation and distribution of aseptically processed products should be done with extra care.

In the havoc, which was created before some months regarding the Real juice, the product was found to be contaminated when this was opened. If it was of the factory defect, the similar things should have been appeared in the other packets of that same batch or lot which were still not open. But, did anyone take found similar defects in the Real of that same batch. Furthermore, it is a clear speculation and belief that the attention of the statutory body of Nepal, the Department of Food Technology and Quality control, definitely drawn in this issue. Does anyone hear any news from the DFTQC that, the Real juice of that lot or batch was not of standard quality? Then why we are creating this havoc by creating the open pack and showing in various media? Does such culture of propaganda lead us in a right way of making New Nepal and economically sustainable country?

Of course, Real might have some of its shortcomings and defects as well. But should we blame it on the basis of evidence that can be justifiable or should we simply show the open containers of the real juice that contains insects and rodents? What message it will relay showing 74 thousand cartoons raided without reaching to the conclusion whether it is a case to be accused . Are we really educating the consumers and advocating them or we are just creating a bad image of company for the sake of any revenge? Dear consumers, lets think coolly and take decision whether we are in right pace or we are just been fooled by someone else.

Nepal should learn that the key to FDI is in creating an environment where investors can focus on the opportunity and not on the infrastructure. That means good governance, manageable bureaucracy, protection of intellectual property rights, fighting corruption and instilling public sector management through transparency, an independent legal framework based on rule of law, accountability, and the right to information.

Corruption affects growth and development. It retards investment because of uncertainties created due to lack of transparency. For an investor, a bribe is an implicit tax that will erode the profitability of his venture or project.

The project may, therefore, not be financed in the first place. In such cases, both the parties lose because the investment will not invest and there will be no offer of bribe. The country, therefore, is the ultimate loser of such projects.

In some other cases, the promoter gains, the corrupt officials gain, but the country suffers because of poor quality of the asset created.

The another type of promoter who will be averse to taking any investment decisions of his skepticism borne out of uncertainties and the risks associated with any corrupt system.

The last category will be those who would be unwilling to invest an any country with low moral standards. Corruption therefore has a cost to the economy in terms of loss of potential output and employment, and therefore, growth.

It is an axiomatic truth that a corrupt man would never fight corruption. As such, it would be simply foolish to expect the corrupt would do anything to root out corruption. Even some of the high level officials have lost all hopes that the government can mitigate corruption. The appeal for help from the multinationals to fight corruption in this country has not exposed the inherent weakness of the government but also can smear the image of the country.

(Circulated by the writer via rajatsharmanepal@gmail.com)