A/HRC/12/34/Add.3 page 12 38. The Special Rapporteur repeatedly heard complaints that mechanisms in place to compensate or consult indigenous communities, with a view towards obtaining their consent in relation to the exploitation of lands and natural resources in their traditional territories, are inadequate or non-existent. The case of the Melamchi Water Supply Project, financed by the Asian Development Bank, provides an example in this regard. The project was initiated in 2001 with the objective of alleviating the shortage of drinking water in the Kathmandu Valley, and involves the displacement of Tamang and other indigenous communities. It is alleged that existing plans inadequately address compensation for relocation and restoration of affected villages, and for loss of traditional ways of life. In addition, compensation schemes are limited to those owners who have a formal title over their lands, leaving many families with no alternative sources of income for their subsistence. The Government views the Melanchi project differently, however, portraying it as beneficial to the indigenous peoples affected, and maintaining that consultation with local people is now an integral component of its development process. 39. As a consequence of land loss and other systemic patterns of marginalization, indigenous people became in some instances landless, bonded workers in private farms and wealthier households under the Kamaiya, Kamalari and other systems. The Kamaiya system of bonded labour was formally abolished in 2002, and, according to Government sources, there are over 30,000 free former Kamaiyas, more than half of whom are considered by the Government to be “rehabilitated”. Almost all of them are Tharus in the western Terai. In order to rehabilitate former Kamaiyas, the Government of Nepal has created a package of subsidies to be given to each family. 40. However, these compensation schemes have not fully worked in practice. Local communities claim that their current allotments of land and resources are insufficient for sustainable farming. Some former Kamaiyas still lack identification cards and land allotments, leading them to encroach onto neighbouring forests or establish unauthorized settlements in urban areas, with constant threats of eviction. The desperate situation of many former Kamaiyas contributes to perpetuating the sending of children to work as domestic workers in wealthier homes through the Kamalari system of perpetual servitude, which, although outlawed in 2006, is still practised. 41. Land-loss and forced displacement over time has resulted in the dissolution of communities, the break-up of families, and the attendant lack of registration of many members of Adivasi Janajati communities, making access to simple services such as health and education a challenge, if not an impossibility. The Special Rapporteur received both statistical information and personal accounts of indigenous people lacking citizenship certificates, and the Government of Nepal has made notable efforts to remedy this situation. But according to the Office of the United Nations High Commissioner for Refugees (UNHCR) in Nepal, an estimated 800,000 individuals still lack citizenship registration and are therefore considered de facto stateless. 3. Culture, language and religion 42. The historical construction of a homogeneous Nepali State formed according to the language, religion, and cultural identity of the dominant groups has deprived indigenous peoples of the opportunity to fully exercise their cultural rights, resulting in the gradual loss of their distinct languages and cultural and spiritual traditions.