KENYA: SUSTAINABLE PRACTICES TOWARDS A CIRCULAR ECONOMY: INTRODUCTION OF THE SUSTAINABLE WASTE MANAGEMENT ACT, 2022
Climate change and the degradation of natural resources continues to elicit great interest and debate globally.
Kenya has demonstrated its commitment to the promotion of sustainable waste management and circular economy practices for green growth with the recent enactment of the Sustainable Waste Management Act, 2022 (the Act). The Act imposes several obligations on both public and private entities, which will demand an environmentally friendly and sustainable approach to economic development and business practices.
Some key highlights of the Act include the following:
Extended Producer Responsibility
The Act imposes mandatory extended producer responsibility (EPR) obligations on every producer who will be responsible for the post-consumer stage of their product life cycles. This is intended to reduce pollution and environmental impacts of the products introduced into the Kenyan market. Producers will be responsible for fulfilling their EPR obligations individually or collectively in a compliance scheme.
The wide definition of “producers” and “waste” under the Act will require various businesses across different products’ value chains to keenly factor EPR and the environmental impacts of their products in which may require a change in their production processes, internal operations and policies. It is worthwhile noting that initiatives such as the Kenya Plastics Pact already signify the adoption of EPR obligations and sustainable business practices by some private sector entities.
The Cabinet Secretary responsible for matters relating to waste management (Cabinet Secretary) is required to make regulations on EPR within 2 years of the coming into operation of the Act which should provide further guidance on EPR obligations and establishment of compliance schemes.
Additional private sector responsibilities
The Cabinet Secretary is also required to Gazette private sector entities which will be required to prepare a 3-year waste management plan within 6 months of the coming into force of the Act.
Failure by a categorized private sector entity to develop a waste management plan is an offence which shall make the entity liable to a fine of not more than KES 200,000 and the person responsible for the private entity liable to imprisonment for a term not exceeding 3 months.
Private sector entities are further required to inter alia:
- adopt cleaner production principles such as improvement of production processes through conserving raw materials and energy and reducing toxic emissions and wastes;
- identify and eliminate potential negative impacts of their products;
- enable the recovery and reuse of the product where possible;
- reclaim and recycle; and
- incorporate environmental concerns in the design, process and disposal of the product.
Private entities or any of their officers who fail to manage waste in accordance with the Act will be liable to a fine of:
- at least 5% of the entity’s net income registered in the previous tax year or KES 5,000,000 whichever is higher; and
- at least KES 200,000 for the entity’s officers.
Continued failure by the private entity of its obligations will result in a further offence by the entity and its office(s) for each day the failure continues and on conviction shall be liable to a fine not exceeding 0.5% of the entity’s net income registered in the previous tax year and a fine not exceeding KES 20,000 for the entity’s officers.
Establishment of the Waste Management Council
The Cabinet Secretary is required to establish the Waste Management Council (Council) and make regulations for its operationalization within 1 year of the coming into operation of the Act. The Council shall be responsible for the enhancement of inclusive inter-governmental coordination for the national sustainable waste management strategy, promotion of inter county waste management partnerships in consultation with county governments, recommendation of incentives to promote sustainable waste management and mobilization of resources for financing of the waste management sector.
The highlights discussed in this feature are non-exhaustive. However both public and private entities will be equally expected to contribute towards the development of sustainable waste management practices across the country. Different sets of regulations and policies are expected to be enacted under the Act which will further impact its overall effect and implementation. Organisations should commence proactively reviewing and considering their waste management policies, processes and business practices.
Opportunities may also emerge (i) for investors in waste handling, transportation and recycling, and (ii) for development of various infrastructure for waste management. Particularly, it is useful to note that county governments may need to consider investments in various infrastructure for purposes of their obligations under the Act. This may be an opportunity for collaboration with the private sector to manage the current infrastructure gap in waste management and ensure appropriate developments are in place for effective performance of their functions. The Public Private Partnerships Act, 2021 may be significant in this regard.
Finally, the cleaner production principles of the Act may (directly or indirectly) contribute to the expansion of the carbon contracting space in Kenya and the carbon exchange market. With private and public entities under increasing pressure to adopt sustainable production and consumption practices, it may be an opportunity for companies to explore investments in emission reduction projects as part of an overall improvement of their respective business practices from an environmental perspective. It is worthwhile noting that this space is rapidly developing in the country with recent developments pointing to the possible establishment of a carbon exchange which would create a locally accessible global market for carbon offsets. Tax incentives have also been introduced for companies operating a carbon market exchange or emission trading system.
Bowmans will continue to keep an eye on further developments in the environment, climate change and sustainability space.