With the spring Everest climbing season only six weeks away, the well-publicized insurance fraud in Nepal heats back up while China seems intent on taking more control of their side of the Big E.
Insurance Fraud and Insurance Threats
I covered in great depth last August in this post but the gist of it was mostly trekking guides, helicopter companies and even hospitals were accused of scamming the companies that provide rescue coverage with unnecessary, false and/or duplicate claims plus unnecessary medical practices. The lid was blown off when a thorough investigative report by AFP reporter Annabel Symington found systematic cooperation amongst local guide companies, helicopter services and even some hospitals in Kathmandu allegedly scheming to scam the rescue/insurance companies through fraudulent claims.
Threats and Ultimatums
A July 2018 investigation by the Nepal government verified the charges and promised to take action (source) however in the six month since, no action has take place.
Not Everyone is Concerned
However, one of the largest security and evacuation companies, Global Rescue, had a different take when I contacted them last week:
On the “ultimatum” put forth by Jonathan Bancroft of Traveller Assist in the recent NY Times article. If they pull out, this is a good opportunity for Global Rescue. If they don’t, then the fraudsters will likely be prosecuted. We are carrying on business as usual and the incidence of fraud is not significant for us because we prosecute our rescue missions ourselves.
In a conversation last spring with Global Rescue’s CEO, Dan Richards, he told me they don’t do business with guides, helicopter companies or hospitals that they cannot audit or monitor. Also, they will not cover a client who uses one of guides services they don’t authorize and they frown upon guide companies also running helicopter rescue services. He said this “conflict of interest” is one reason why they have a strict policy on pre-approving all evacuations and which helicopter companies they use.
He went on to say that all evacuations must be organized and provided by GR. A GR rescue specialists (generally a medic or a doctor) is either on the ground or in the helicopter to oversee the operation and provide immediate medical assistance. He said they do not work with operators that are not transparent with helicopter service records and pilots that don’t have high-altitude training and experience. He called out one of the largest Sherpa owned and operated companies by name in our conversation.
Nepal Government Denies Fraud
As for what Nepal has to say about all this new brew, as reported in the Nepali Times, Tourism Minister Rabindra Adhikari, said “We are committed to cracking down on insurance fraud, and set up a Committee last year to investigate. After that, the number of cases of helicopter rescues, especially unnecessary ones, had actually started to drop. Which is why we are concerned by the continued leaks to the international press, and the threatening tone of this letter.” He went on to claim “… there were only 186 helicopter rescues in the autumn trekking season last year, a sharp drop from the 1,532 between March and May, 2018.”
Make Sure you are Covered
Bottom line for Everest climbers this spring: do your homework well in advance to make sure you have proper evacuation coverage and are also covered for any medical costs.
China Claims to Reduce Everest Permits
China received worldwide acclaim when they announced they would cut the number of Everest permits to under 300, some reports had 200 in total, in 2019 in order to “clean up the trash and remove dead bodies.”
The red herring here is that since Everest has been attempted from the Tibet side, the largest number of summits by foreigners was in 2007 at 197. Adding in support staff of 176 the total is 373. However, China closed Everest in 2008 to take the Olympic torch to the summit stopping any momentum they had over Nepal. After almost 10 years with foreigner summits well under 90 each season, it has popped back up the last two with 120 each year for 2017 and 2018. So holding the number under 300 is simply marketing and not reflecting any market reality.
They also said they would spend close to US $600,000 on trash removal which is always a good policy. However they also added a $1,500 rubbish fee to each climber’s permit bill.
Update on New Rules
I wrote about the new rules last month in this post. The headline was that China has informed operators that effective January 1, 2019, several new rules will be put in place: “expedition formation, audit, reception, management, safety and environmental protection” for mountain expeditions on Cho Oyu, Shishapangma and, of course, Everest.
I obtained a copy of the new rules and have read them myself so this is first hand reporting. This is a summary of the changes and my opinion of their impact (bold emphasis is mine):
- “Strict standards will be established for all the expedition organizers or operators, especially on market access. We will cooperate actively with the Expedition companies with good social reputation, strong ability of team formation, logistic support, reliable service quality, excellent professional quality, and law-abiding.”
- “Expeditions climbing above 8000 meters in Tibet Autonomous Region, 1 summit climber must be accompanied 1 Nepalese Mountain guide, and each expedition must be equipped with 1 team leader.”
- “To further strengthen the cooperation and the management of mountaineering team, and ensure the exploration companies strictly abide by relevant regulations, $5000 will be collected as mountaineering security deposits from each exploration companies at the beginning of mountaineering, and all deposit will be refunded with no safety accidents and environmental problems at the end of mountaineering.”
- “In order to ensure the healthy and orderly development of mountaineering and minimize the occurrence of mountaineering accidents, mountaineering teams which were organized in Nepal temporarily will not be accepted.”
- Registration Deadline – February 28th
- “Standard of rubbish-collection fee will be $1500/person for Mt. Everest summit climber, $1000/person for Mt.Cho-oyu, Mt.Shishapangma, Mt. Lhakpari, North-col and Mt. Everest ABC member.”
- “All the climbers, mountain guides and logistic service staff above Base Camp, must bring 8 km mountaineering rubbish to base camp in each climbing season and hand it over to the Chinese Liaison Officers”
- “Mountaineering Rescue Team of Tibet Autonomous Region and Yarlha Shampo Expedition in Tibet will jointly undertake the rescue missions in Mt. Everest, Mt. Cho-Oyu and Mt. Shishapangma during mountaineering season (Spring and Autumn).”
- “The expenses caused by the rescues shall be borne by the climbers themselves,”
China Means Business
Well, it does appear that China is serious about the new procedures. In a conversation with guides and climbers quite familiar with running expeditions in China, I was told they were collecting more details and background information on their clients, requiring more written proof of their experience. I was told that two well known long time operators were not allowed to run an Everest climb this season from the Chinese side and that some foreign nationalities were not being issued Everest climbing permits. Finally this telling quote:
I would say that about one third to one half of the operators were banned in the last two years. The process started last year already. CTMA are watching all operators very closely and if you make a mistake like an accident that could have been avoided, you are out. They also put focus on the guide company background and on highly Sherpa supported teams and teams with more oxygen supplies than usual. Basically, this is a good development in terms of safety and quality. But it would not be a big surprise for me if China will ban all foreign operators one day and take over the business.
So, once again, if you want to climb Everest from the north side its probably better to get it done soon as there are more new rules in the offing as China completes the huge mountaineering Center near Tingri attracting tens of thousands of visitors. Similar to how Mont Blanc, Denali, Aconcagua and other mountains around the world, Everest continues to be monetized.
Memories are Everything