Africa

Kenya’s environmental regulator ready to reconsider EIA processing fees due to financial crunch

The authority was forced to reduce staff during the pandemic

 
By Md Mostak Al Farhad
Published: Friday 06 May 2022
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The prolonged shortage of financial capital in the treasury of National Environmental Management Authority (NEMA), the authority responsible for environmental clearances in Kenya, has built up momentum for the reinstitution of the environmental impact assessment processing fees paid by the proponent. 

A cabinet memorandum has been forwarded by NEMA for consideration by the administrative authorities. 

In January 2017, the processing fee was scrapped by the NEMA.

Earlier, the proponent had to pay two stakeholders, an environmental expert and NEMA. The processing fee for the EIA licence to NEMA, which included the service provided for both assessment and post clearance environmental monitoring, after the approval. 

The other fees were mainly a consultation fee paid to the environmental assessment experts (typically they are the environmental consultants). The list of these experts was provided by the NEMA offices. 

The proponent had to pay 0.1 per cent of the proposed project value, where the minimum amount varied from 10,000 Kenyan shillings ($86.32) with no upper capping.

This was further revised on August 19, 2016, with the release of a special issue of Kenya Gazette supplement number 137. 

According to the revised notification, the proponent had to pay a total of 0.1 per cent of the total project cost as a fee to the NEMA based on the perceived risk. However, the cost for different projects varied. The purpose of categorising different fee slabs for different projects based on risk is given the following table:

Risk Profile

Fees

Range

Minimum

Maximum

Low risk project

0.1 per cent

10 thousand Ksh ($86.32)

3 million Ksh ($25,895.55)

Medium risk project

0.1 per cent

20 thousand Ksh ($172.64)

10 million Ksh ($86,318.52)

High risk project

0.1 per cent

50 thousand ($431.59)

40 million Ksh ($345,274.06)

The fee would be deposited to the treasury of NEMA. This was a means to generate revenue for the staff of NEMA. Most significantly, paying fees was a way of compensating for the damage done to the environment as echoed by Chris Kiptoo, principal secretary for environment and forestry, during the business leaders’ forum on climate change in Nairobi in 2021.

But NEMA was suddenly forced to make a drastic change due to a push advocated by the private sector of Kenya. There was a push for waiving off the EIA processing fees to facilitate the ease of doing business, mainly from the private sectors. Finally, the fee was scrapped in January 2017.

The COVID-19 pandemic took a toll on the finances of NEMA. The situation deteriorated, forcing NEMA to cut down on staffing. 

The environmental management regulator had a staff count of less than 450 against a requirement of 1,500 workers, said Kiptoo, highlighting the staff shortage.

The director-general of NEMA, Mamo Boru Mamo, also spoke about the shortage of staff  because of the financial crunch, during a recent interview in April 2022.

There hasn’t been any increase in NEMA’s fund allocation, despite the country suffering from inflation in recent times, he insisted. Meagre allocation of funds from external donors, national treasury and scrapping of the environmental impact assessment (EIA) processing fee have now started to impact the authority negatively, he added.

Lack of working capital has a negative effect on the comprehensive assessments of the EIA process. Success of an environmental impact assessment is perceived when there is a stringent and effective compliance mechanism. So, shortage of NEMA staff, especially environmental regulators, will mean there would be a lack of monitoring mechanism from the authority’s end, Kiptoo said. 

The reintroduction of fees through the cabinet memorandum is expected to stabilise the situation and bring working capital back to normalcy. Mamo expressed confidence that reinstating the fees would surely reduce the stress NEMA is under at present.

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