THE World Bank 40659 Strategic Environmental Assessment of the Kenya Forests Act 2005 rEPorT no. 40659-kE Strategic Environmental Assessment of the Kenya Forests Act 2005 THE WORLD BANK AGRICULTURE AND RURAL DEVELOPMENT DEPARTMENT © 2007 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org/rural E-mail ard@worldbank.org All rights reserved. This volume is a product of the staff of the International Bank for Reconstruction and Development/The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accu- racy of the data included in this work. 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Cover photo: Dean Housden Insert photo of women and firewood: Curt Carnemark Other insert photos: Dean Housden Contents P R E FA C E v ACKNOWLEDGMENTS vii A C R O N Y M S A N D A B B R E V I AT I O N S ix E X E C U T I V E S U M M A RY xi 1 Background 1 Kenya’s Forest Resources 1 New Forests Act for Kenya 4 2 The Role of the SEA 7 Special Characteristics of the SEA for the Kenya Forest Sector 8 SEA Methodology 8 Phase 1—Screening and Scoping 10 Phase 2—Situation Assessments 10 Phase 3—Setting Environmental Priorities and Development of Alternatives 12 3 National and Local Situation Assessments 13 Stakeholder Analysis 13 The Political Economy 15 National Level Situation Assessments: Key Issues and Concerns 17 Local Level Situation Assessments: Key Issues and Concerns in Hombe and Rumruti 26 Ongoing and Potential Investment 28 iii iv Contents 4 Priority Areas 31 Considerations from the Local Situation Assessment 33 Community Participation and Benefit Sharing 34 Investment in the Forest Sector 34 5 Scope for Action 35 Strategic Planning and Management of the KFS 36 Finances 37 Enforcement 39 Enabling Community Participation and Benefit Sharing 39 Enhancing Investment in the Forest Sector42 6 Policy Action Matrix 45 7 The Next Steps 59 REFERENCES AND OTHER RESOURCES 61 Boxes 1 WTO Principles on the Use of SPS Measures 2 3.1 Description of Stakeholders 14 3.2 Framework for Forestry Development in KFMP 18 3.3 Key Concerns Raised at the First Stakeholder Workshop 19 3.4 Relationships Between Poverty, Health, and Forestry 22 3.5 Summary of Financial Appraisal 23 4.1 Key Issues Identified through Consultations based on Situation Assessments 32 Figures 1.2 Percentage Area of Forests and Other Land Use Types in Kenya 2 1.1 Distribution of Forest in Kenya 2 1.6 Projected Import Costs for Timber 3 1.5 Supply and Demand for Wood 3 1.4 Wood Fuel Projecte Demand 3 1.3 Population Growth Projections 3 1.7 Projected Demand for Timber Products 4 2.1 Kenya Forests Act (2005) I-SEA Process 9 Tables 3.1 Importance and Influence of Stakeholders 16 3.6 Opportunities for Investment in Hombe Forest 29 6.1 Policy Action Matrix 47 Preface In November of 2005 the Government of Kenya (GOK) ratified a new Forests Act. The Forests Act is an outcome of the Kenya Forest Master plan finalized in 1994. In the new Forests Act the government embraces the concept of participatory forest man- agement. The act gives particular consideration to formation of forest community associations, which will be recognized as part- ners in management. Furthermore, the act opens commercial plantations to lease arrangements by interested groups to sup- plement government efforts. This is a radical departure from previous practice where the government assumed full manage- ment responsibilities in gazetted forest reserves. The act can im- prove the forest productivity and increase availability of timber and other products/services for domestic use and export. At the time when this sector work was conceptualized, the GOK had finalized a road map for implementation of the Forest Bill. However, questions remained regarding how the Forest Department would reform itself, the level of stakeholder en- gagement in designing the reform process, and the capacity in the to-be-established Kenya Forest Service to implement the new Forests Act. The Bank identified the need for analytical work on economic, environmental and social implications of al- ternative ways of implementing key parts of the Forests Act. There also was a need to enhance interaction among key stake- holders, including interactions between key government actors such as the Kenya Wildlife Service (Ministry of Tourism) and the Forest Department (Ministry of Environment). The institution-centered strategic environmental assessment (SEA) aims to assist the GOK with the implementation of the Forests Act by informing the forest component of the Natural Resource Management project (2007–2012) and informing the Forest Reform Secretariat of priority areas for successful imple- mentation. To achieve its objective, the SEA blends analytical work and consultations with key stakeholders. The SEA takes into account input from a wide range of stakeholders including communities, private sector and non-governmental organiza- tions. It provides recommendations in terms of concrete actions necessary to implement the Forests Act in the form of a policy- action matrix, and some immediate follow-up steps. v vi Strategic Environmental Assessment of the Kenya Forests Act 2005 The SEA has been coordinated and managed by formulation of the scope of work to the finalization the Bank with assistance from a consulting consor- of the policy-action matrix. The analytical work as- tium and input from the GOK. The Kenya Forest sociated with this report was completed in Department and Forest Sector Reform Secretariat December 2006. have been involved in the SEA process from the Acknowledgments The analysis and thinking contained in this report represent the expe- rience and perspectives of a large number of people involved in the re- form of the forest sector in Kenya. The World Bank wishes to express their strong appreciation to the many people who offered ideas, com- ments, and critical questions over the course of this Strategic Environmental Assessment. In particular we wish to thank the gov- ernment of Kenya for its support of this process and commitment to making it happen. Within the World Bank, special thanks go to Diji Chandrasekharan Behr, Christine Cornelius, Gerhard Dieterle, Nyambura Githagui, Yuko Kurauchi. Fernando Loayza, and Christian Peter. The World Bank also thanks the team of consultants led by FRR Ltd. The SEA consultant team was comprised of Peter Nelson, Claire Ireland, Paul Steele, Michael Gachanga, David Raing’o Maingi, Professor Patricia Kameri-Mbote, Sharon Gordon, and Sylke von Thadden. This team assisted with the analytical work, workshops and draft report writing. Funding for this study was provided by the World Bank and the Bank-Netherlands Partnership Program. vii Acronyms and Abbreviations AIDS acquired immune deficiency syndrome CBO Community Based Organization CFA Community Forest Association CSO Civil Society Organization DDO District Development Officers DFO District Forestry Officer EIA Environmental Impact Assessment EMCA Environmental Management and Co-ordination Act FCC Forest Conservancy Committee FD Forest Department GOK Government of Kenya ha hectare HIV human immunodeficiency virus I-SEA Institutions-Centered Strategic Environmental Assessment KEFRI Kenya Forestry Research Institute KFMP Kenya Forestry Master Plan KFWG Kenya Forests Working Group KFS Kenya Forest Service KWS Kenya Wildlife Service MDG Millennium Development Goal MENR Ministry of Environment and Natural Resources NEMA National Environmental Management Authority NGO nongovernmental organization NMK National Museums of Kenya PPA Participatory Poverty Assessment PPM Pan African Paper Mills SEA Strategic Environmental Assessment WWF World Wide Fund for Nature ix Executive Summary Forest in Kenya are an important source of livelihood, environ- mental services, and economic growth. In November of 2005 the Government of Kenya (GOK) ratified a new Forests Act. The act contains many innovative provisions to correct previous short- comings, including a strong emphasis on partnerships, the en- gagement of local communities, and promotion of private investment. In the new act forest community associations are recognized as partners in forest management, and commercial plantations are open to lease arrangements by interested groups to supplement government efforts. This is a significant depar- ture from prior practice where the government assumed full management responsibility of gazetted forest reserves. The new act was formally gazetted on February 9, 2007. Implementation of the new act is expected to increase avail- ability of timber and other products/services to the country and for export. Implementation of the act, however, faces numerous challenges. This Strategic Environmental Assessment (SEA) fo- cused on integrating environmental, social, economic, and insti- tutional considerations of the new Kenya Forests Act (2005) into implementation of the act. The purpose of the SEA is to inform, influence, and strengthen the processes of implementing the new Forests Act and inform policy discussions regarding sustainable use forests resources for national development. The SEA examined current risks confronting both woodland and forest environments and the social well-being of communities relying on these resources. Evidence gathered through research and extensive consultation with stakeholders was used to identify the scope for improving institutional structures and governance processes under the planned forestry reforms, notably those relating to the Kenya Forest Service and the participation of communities and the pri- vate sector in forest management. The SEA recommends ways of enhancing the opportunities for environmental and social gain that already form part of the overall goal of the Forests Act. These recommendations are contained in a policy action matrix that appears in chapter 6 of this report. xi xii Strategic Environmental Assessment of the Kenya Forests Act 2005 CONDUCT OF THE SEA The act and associated conditions in some sites highlighted opportunities for commercial activi- The SEA blended analytical work and consultation ties on the part of forest associations. These in- to diagnose issues, identify priority areas, and po- clude, among others, collection of fuelwood and tential actions to address priority issues. The SEA agricultural poles, and harvesting of non-timber followed elements of international good practice forest products (honey, fruits, medicinal plants, and the approach for institutions-centered SEAs fish farming), and the management of forest and supported by the World Bank. The priority actions water resources. Economic analysis shows that, in were identified in collaboration with key stake- closed canopy forest areas with a mix of planta- holders and discussions with the Forest Reform tions and indigenous forest, effective implementa- Committee and Secretariat set up by the Ministry tion of improved revenue collection and of Environment and Natural Resources. sustainable forest management can result in signif- A noteworthy element of the SEA has been its re- icant profit for the sector. liance on the active participation of a wide range of There are also major opportunities for reactivat- stakeholders, through workshops and one-to-one ing the commercial forest sector and creating em- discussions. This dialogue has been essential in ployment through timber harvesting, processing, identifying key issues and priorities for action. The and downstream economic activities. SEA has also examined conditions within two for- est areas—Hombe Forest and Rumuruti Forest—to assess priority issues and consider the views of for- Potential risks est community associations and other stakeholders The SEA acknowledges the adverse effect that on the ground. shortcomings in existing legislation and institu- tional and governance weaknesses of previous ad- ministrations have had on forest environments in KEY ISSUES RELATING TO Kenya. Continued inadequate political commit- IMPLEMENTATION OF THE ACT ment could further some of the existing negative Assessment of opportunities trends and effects. These include reduction in for- est land cover through inappropriate excision of The new Forests Act and draft Forest Policy provide state forests, poor standards of management, ille- a strong basis for change. This change involves the gal felling, and lack of replanting of forest planta- transformation of the FD into an independent Kenya tions. Similar problems have been exposed in areas Forest Service (KFS) and improved management of of dry land tree cover. forests through increased accountability, trans- State forests have increasingly been viewed as parency and revenue generation. Implementation of economic liabilities because of the ban on timber the new act is occurring at a time when the national harvesting. A risk is the continuation of the down- political climate is emphasizing improved gover- ward spiral of declining economic activity and cor- nance and reducing corruption. ruption which has left a demoralized Forest The SEA research and consultations confirmed a Department (FD) and reduced its capacity to man- strong public demand for engagement of commu- age forests efficiently. This, in turn, has allowed nity groups as equal partners in forest management. excessive exploitation of highly sensitive forest re- The new act responds to this demand with greater sources by local communities, leading to a reduc- emphasis on partnerships between the KFS, the pri- tion in biodiversity, pressure on water resources, vate sector, and forest community associations. and increased wildlife-human conflict. The emphasis on the role of the KFS as an inde- An estimated three million people live within a pendent service working closely in partnership radius of five kilometres of forests. Rapid increases with other arms of government, local communities, in population are placing greater strain on scarce and the private sector is an asset. However, poten- land resources. Collection of firewood, illegal char- tial weaknesses remain that must be dealt with— coal production, and overgrazing by pastoralists such as adequate staffing and funding of the KFS, contribute to environmental damage. Currently, detailed development of subsidiary legislation, benefits from the use of forest resources are not rules and regulations, and the operational mandate shared equitably. Landless groups (many of whom of the KFS. xxx xiii are squatters), women (who do much of the work), – approval by parliament of an updated and unemployed youths are particularly disadvan- Forest Policy as soon as possible taged. These conditions lead to local unrest and at- – establishing an interinstitutional committee tempts to provide short-term political solutions that up to ensure effective coordination of forest do not address the underlying causes of poverty. law and other natural resource legislation – developing an enforcement strategy estab- lishing an international standards compli- PRIORITIES FOR ACTION ance committee within the KFS Previous experience of corruption and poor man- – annual audits and mid-term review of the agement has led to a critical review of the actions strategic plan and associated business plan that need to be taken to ensure the independence – external supervision of transparent proce- and transparency of future decision making at all dures for staff appointments levels in the KFS. The control of finance and budg- • Ensuring proper strategic planning of the for- ets, proper strategic planning, effective and impar- est resources of Kenya by tial control over concessions and licenses, and – formulating a strategic plan that clearly enforcement of rules and regulations are all crucial states the role of plantations in contributing to its success. to sustainable use of forest resources A main conclusion of the SEA is that the princi- – drafting a business plan for KFS and annual ples of reform set out in the act are appropriate but reports. As mentioned earlier, the business the challenge lies in giving real effect to them. This plan should be revised on a periodic basis is particularly the case in ensuring the active par- along with the strategic plan, and be subject ticipation of civil society, nongovernmental organ- to annual audits izations (NGOs), and the private sector in critical – preparing a manual and guidelines for levels of decision making, from functioning of the preparation of forest management plans KFS board and area conservation committees, • Realizing the economic value of these re- down to drawing up of management plans and sources for the nation, by contracts for individual forest areas. – developing a national forest data bank The SEA highlights three areas where priority – preparing a framework for the provision of for action exists:1 incentives (including incentives for poten- tial losers under the new act and incentives • Strategic management and planning of the for investment through national subsidies KFS and tax breaks) • Enabling community participation and bene- – a clear policy brief on the role of farm fit sharing forestry in the new Forests Act and how it • Enhance both public and private investment can contribute to the sustainable use of for- to enable SFM est resources Most initiatives can be pursued under one of – prioritizing promoting restructuring of the these three principal themes. There, however, are forestry industry and raising overall stan- certain policy and action recommendations under dards. It is recommended that a forest in- each of these specific themes with cross-cutting im- dustry forum be established to promote best pacts, such as strategic planning and development practice in Kenya of partnerships. – establishing staff training programs to cover Elements of strategic planning and management of areas of activity and responsibility that are the Kenya Forest Service include, among other things: new to the KFS • Enabling proper governance (including trans- parency and accountability) of the KFS, 1 The detailed priorities for action and recommendations are through based on analytical work at the national level, case studies, – a transparent process for appointing both and consultations with key stakeholders. Justifications for the Board of Directors and the Director of each of the actions proposed by the SEA are set out in chapter 7 of this report and the recommendations are contained in a the KFS policy action matrix (chapter 8). xiv Strategic Environmental Assessment of the Kenya Forests Act 2005 • Achieving effective financial management – clarification regarding whether community and regulation of the forest sector through council and trust land in arid and semi-arid – guaranteed financial support for the KFS areas (making up 80 percent of Kenya) will from the government set on a tapering scale be classified as forest and access for grazing over the period required for KFS to be finan- livestock will be restricted under a “conven- cially viable tional� approach to management plans – identification of external funding sources – A charcoal regulatory framework should be that can cover projected shortfalls prepared with specific standards and a cer- tification process. Community participation and benefit sharing which • Enabling equitable and fair partnerships. This includes: should include • Ensuring that all forest communities, and – preparation of pilots on different types of communities adjacent to forest areas, are partnerships for management of plantation properly involved in decision making and im- forests plementation activities as per the new Forests Enhancing investment in the forest sector helps en- Act. This would require: sure the right mix of public and private investment – an inventory of existing community partic- to enable the sustainable management of the forest ipation processes in Kenya; sector, which contributes to the national goal of – preparation of guidelines on the establish- poverty reduction. This will involve ment of CFAs – pilot studies on guidelines for Community • Creating an enabling environment for private Forest Association (CFA) formation, part- investment (both corporate and community) nerships, and management of different for- in the forest sector. This will require est types should be undertaken – KFS to undertake a review of training pro- – a study reviewing how arid and nonmoist grams with a view to introducing and sup- forests can contribute to poverty reduction porting programs that are directed at • Developing a policy on how women and ex- manufacturing and marketing of timber and cluded groups will be engaged in community non-timber forest products. forest associations. This would also include: • Enabling and strengthening partnerships. – developing rules to ensure fair election and – Each of the forest management plans representation of CFAs on area conserva- should include an investment strategy that tion boards should be worked up jointly by representa- – a capacity-needs assessment should be un- tives of the affected CFAs and private sector dertaken to establish what skills are needed organizations. by CFAs – Rules and regulations should be prepared • Equitably sharing the costs and benefits of the to ensure incentives to private forest owners forest sector among communities, private sec- to deliver wider benefits to communities tor, and government. This will require living adjacent to forests are in place. – clear and transparent accounts showing the – Prepare training aids on the model agree- annual income and expenditure of individ- ments for communities and training work- ual forest areas, and the income attributed shops for all registered CFAs and private to each CFA sector investors – preparation of guidance notes (in local di- • Improving transparency and accountability alect) on community benefit sharing of dif- of investment activities. This will require ferent activities – Developing model agreements where rights – a study on how to arrange payment for en- and responsibilities of different parties and vironmental services and valuation of products are clearly laid out ecosystem services – The KFS develop criteria, standards, and • Protecting indigenous and customary access guidelines to indicate what conditions will and use of forest resources. This will require, constitute inadequate management of local amongst other things, authority and private forests. xxx xv – All contracts, concessions, royalty agree- and the Forest Reform Secretariat, individual discus- ments, and other licenses and leases sions with stakeholders, and the outcome of two should be published once the terms have workshops held in May and June 2006. This policy been agreed on. action matrix was formally revised and endorsed by – Clear rules and regulations are required for all stakeholders at the final workshop held in management of private forests. December 2006. – Provision of a clear regulatory framework in- The priority areas now need to be taken forward cluding Environmental Impact Assessment by the Forest Reform Committee as it finalizes im- (EIA) and other evaluation tools that are fit plementation of the new Forests Act 2005. The pol- for purpose and do not impose an unaccept- icy action matrix should be seen as a living matrix able burden on industry. (that is, a document that is continually reviewed and updated) that continues to influence the work of the new KFS. IMPLEMENTING THE Stakeholder participation at all levels is integral RECOMMENDATIONS to the success of the new Forests Act. As the rollout of the new act begins to take place by the new KFS, The policy action matrix in chapter 6 contains a it will be important that stakeholder concerns and number of recommendations and actions that have opinions are taken account of and stakeholders feel been endorsed by the SEA stakeholders. The SEA they are able to participate effectively in the process. team drafted the initial policy action matrix in the This will mean regular review of the policy action light of its research, internal meetings with staff of matrix among the wide stakeholder group the Ministry of Environment and Natural Resources 1 Background Kenya forestry was guided by policy formulated shortly after inde- pendence despite emerging changes in dynamics of the society and the development of new approaches to natural resource manage- ment. The 1957 policy, with few modi�cations in 1968 concentrated on catchment protection and timber production. In 1994 after exten- sive studies, the Ministry of Environment and Natural Resources pre- pared the Kenya Forestry Master Plan (KFMP). The KFMP recommended a shift in Kenya’s natural resource man- agement approach from an exclusionist approach to a more partici- patory and holistic approach. It also recommended a shift from “sticks� to “carrots� with establishment of incentives to enable sus- tainable forest management. The studies conducted in preparation of the Plan had identi�ed numerous weaknesses in the Forests Act CAP 385 that were partly responsible for the decline in the sector. These were addressed in the Forest Policy 2004, which was subsequently re- vised in 2005, and in the Forest Act 2005. Although the Forests Act 2005 took a decade to be enacted, its tim- ing is opportune as the political climate in Kenya indicates increased commitment towards improving governance and addressing cor- ruption. The existing political commitment is necessary to tackle chal- lenging issues such as forest excisions. KENYA’S FOREST RESOURCES Around 2 percent of the total land area in Kenya is covered by closed canopy forest (1.24 million hectares [ha]). In addition to closed canopy forest, it was estimated in 1994 that plantation forest consti- tuted 0.61 million ha. The distribution of these resources is skewed very heavily to the Montane Forest Region where 18 percent of the area is afforested and to the Coastal Forest Region where 9.9 percent of the land surface is forest. Only 1.9 percent (851,000 ha) of the Western Rainforest Region now contains forest because of population pressures, while the �gure for Dry Zone Forest Region is still lower at 0.4 percent (211,000 ha). Figure 1.1 shows the basic distribution of forest in Kenya and �gure 1.2 shows the percentage area of forests and other land use types in Kenya. 1 2 Strategic Environmental Assessment of the Kenya Forests Act 2005 Value of the Resource Figure 1.1 Distribution of Forest in Kenya The extent of forest cover is critically important for protecting biodiversity and water resources and generating both timber and non-timber forest products. Woodland and scrub vegetation exists in the dry land and arid areas, which is equally im- portant for providing products like fuelwood and charcoal and supporting livelihoods, especially grazing. In Kenya, there are a number of key drivers be- hind deforestation and degradation of forestry re- sources, some of which are discussed below. Forest Governance In Kenya, poor governance contributed signi�- cantly to the poor performance of the forest sector. Poor governance in the sector is attributed to cor- ruption, policy failures, poor forest management, low institutional capacity, inadequate community empowerment and devolution of power, poor en- abling environment and political interference, lack of transparency and accountability, poor enforce- ment of laws, poor institutional �nancing mecha- nisms to implement policies and laws, poor bene�t-sharing mechanisms, unde�ned roles in public-private partnerships and inadequate stake- holder participation, inadequate facilities and low staff morale. Source: FAO 2001. Manifestations of poor governance include the failure of the shamba system. In the shamba system farmers were given pieces of clear felled plantation forest areas to cultivate while taking care of planted tree seedlings. Farmers could occupy the Figure 1.2 Percentage Area of Forests and area till the canopy closer or a maximum of three Other Land Use Types in Kenya years. Since 2003, the shamba system has been banned because in some areas it was commercial- ized and plots were in most cases sold to prospec- Wooded Grassland, Grassland, tive cultivators. It is claimed that forest department 18.50% 2.10% staff colluded in these activities. Another manifes- Desert, 13.70% tation is forest land allocation through politically motivated excisions. Excision of Forests and Lack of Management Further decline in the area of canopy woodland Farmland and has taken place since 1994 and increased areas of Urban, 16.50% Bushland, Woodland, former plantation land have been left unplanted. 43% 3.70% Natural Forest, Since gazettement began in the 1900s, of�cial reg- 2.10% isters show that more than 290,000 ha have been Mangrove, Plantation 0.10% 0.30% withdrawn from the forest estate. In the recent past, excision of forest land in response to popula- Source: FRR 2007. tion and political pressure has been running at an Introduction 3 average of 5,000 ha per year, leading to a minimum population growth (MENR 1994a; MENRW 2004) loss of 50,000 ha in 10 years. as indicated by Figures 1.3 through 1.6. Although the availability of timber from local sources has de- creased, demand for all timber products has con- Effects of the Ban on Harvesting tinued to rise, resulting in signi�cant inflation in A ban on logging from natural forests, introduced timber prices. One bene�cial side effect has been the in 1982 in the interests of protecting the remaining stimulation of farm forestry. Individual landowners forest reserves, has only been partially successful in have increasingly been planting commercially valu- preventing timber harvesting in indigenous forest, able timber species based on their own �nancial as- while the prohibition of harvesting from planta- sessments of the opportunities in promoting short tions has caused the closure of the majority of local rotation plantations. sawmills and driven up timber costs due to de- Projections indicate a continuing growth in the crease in supply. This has also resulted in local demand for timber and the increase in import costs companies importing timber. for timber. This suggests a potential for establishing While the extent and quality of forest resources commercial plantations. If such a plantation system has deteriorated, demands for timber and non-tim- also lowers transport costs it could be effective in ber products have continued to rise, fueled by rapid meeting woodfuel and commercial demand. Figure 1.3 Population Growth Projections Figure 1.4 Wood Fuel Projected Demand Projected Population Growth in Kenya Projected Growth in Demand for Fuel Wood 70 45 40 60 35 50 30 Millions m3 Millions 40 25 30 20 15 20 10 10 5 0 0 1995 2000 2005 2010 2015 2020 1995 2000 2005 2010 2015 2020 Source: MENR 1994a Source: MENR 1994a Figure 1.5 Supply and Demand for Wood Figure 1.6 Projected Import Costs for Timber Demand for Wood versus Projected Supply Cost of Imported Timber in Billion Ksh 50 16 45 14 40 12 35 Millions m3 Billion Ksh 30 10 25 8 20 6 15 4 10 5 2 0 0 1995 2000 2005 2010 2015 2020 1995 2000 2005 2010 2015 2020 Source: MENR 1994a Source: MENR 1994a 4 Strategic Environmental Assessment of the Kenya Forests Act 2005 Planning of forest resources to meet future de- of local communities, and promotion of private in- mand will need to consider the markets for wood as vestment. It also extends the concept of timber projected in �gure 1.7. This will affect the choice of management to farm forestry and dry land forests. species depending upon whether trees are grown The Forests Act 2005 creates a new semiau- for fuelwood, structural timber, pulp, or plywood. tonomous body, the Kenya Forest Service (KFS) There is potential to increase exports under the and supportive institutions for management and new Forests Act but it is more likely that increased conservation of all types of forests. KFS is respon- production will be sold on local markets to help re- sible for formulating policies regarding the man- duce costs and reduce import demands. agement, conservation and use of all types of forest areas in the country. KFS will also be responsible for overseeing changes resulting from the act. NEW FORESTS ACT FOR KENYA The new act creates a Forest Management and For many years, forest legislation and practice in Conservation Fund for purposes of funding activi- Kenya has been criticized for failing to protect the ties of the KFS and other objects of the act. The prin- country’s indigenous forests or to ensure sustain- ciple change being that the Ministry of Finance will able use of plantations and other areas of forest and not be the sole source of funds for the forest sector. woodland. Most forest communities have felt dis- The act also has clear provisions for recognition and advantaged in being excluded from forest man- role of community forest associations in forest man- agement and there has been a history of poor agement. It enables members of forest communities management and abuse of powers. In 2005, a new to enter into partnership with KFS through regis- act received parliamentary approval and endorse- tered Community Forest Associations. ment from the President, and came into effect Provisions in the act also will require addressing when it was formally gazetted on February 9, 2007. potentially contentious issues. For example, prior The new act contains many innovative provisions to the new act, forest reserves were gazetted with to correct previous shortcomings, including strong people in them. This will be a source of problem emphasis on partnership working, the engagement under the new act as settlements in gazetted forests Figure 1.7 Projected Demand for Timber Products 600 500 Thousand m3 400 sawnwood 300 plywood and panels paper and paper board 200 100 0 1995 2000 2005 2010 2015 2020 Source: MENR 1994a. Introduction 5 are now considered illegal. Similarly, sharing of The adoption of new legislation and establish- bene�ts has been a source of diverging perspec- ment of the semiautonomous KFS opens up a tives for a long time. Communities bordering on major opportunity to address the inequalities of the forests are the main group with complaints re- past and to improve the quality and sustainability garding the distribution of bene�ts from timber of Kenya’s forests, trees, and woodland. KFS, how- value. There are no clear provisions in the act, but ever, will face many challenges in delivering the this will need to be addressed. full range of services. 2 The Role of the SEA An “institutions-centered� Strategic Environmental Assessment (SEA) has been adopted to support the reform of the Kenya forests sector because it helps to integrate environmental and social consid- erations into decisions that relate to governance, institutional reform, and �nancial management. Unlike impact-centered SEAs, which in- variably propose measures for minimizing adverse environment and social impacts, institutions-centered SEAs focus on institutionalizing mechanisms to address potential environmental and social impacts that may not be foreseeable or predictable at the time of carrying out the SEA. A SEA has to be applied in what is invariably a rapidly changing and fluid framework as different political, administrative, and judicial influences come to bear. By the very nature of institu- tional change, signi�cant tensions can arise as different interest groups seek to maximize their own advantages. In most countries, use of forest resources is an emotive and politically charged subject where issues of biodiversity and landscape conservation must be weighed alongside community needs and commercial silviculture. Kenya is no exception to this rule. The SEA seeks to bring an element of objectivity to the evaluation of different options and to encourage more open, decentralized, and transparent decision making by engaging all stakeholders. Its aim is to identify opportunities for enhancing environmental and social out- comes and minimize adverse effects of change, to distinguish be- tween potential winners and losers in the reform process, and to make recommendations for capacity building and governance re- form. Its outputs include a policy matrix identifying practical mea- sures that will help to secure its recommendations, and setting out time scales, milestones, and responsibilities for action. Further advice and information on the role and application of a SEA and other forms of strategic assessment can be gained from the World Bank SEA Toolkit Web site.2 2 To access the toolkit, go to http://www.worldbank.org; select topics, environment and then type “SEA toolkit� in the “search this site� window. 7 8 Strategic Environmental Assessment of the Kenya Forests Act 2005 SPECIAL CHARACTERISTICS OF SEA METHODOLOGY THE SEA FOR THE KENYA FOREST The methodology of this institutions-centered SECTOR Strategic Environmental Assessment (SEA) has fol- lowed the World Bank toolkit approach. It is also Reforming the Kenya forest sector is a complex an approach considered in the recently published process and there are a number of different but re- “Guidance on Applying Strategic Environmental lated priorities that are driving the initiative. The Assessment� by the Development Assistance government, through the Reform Committee and Committee of the Organisation for Economic Co- Secretariat, strived to establish the Kenya Forest operation and Development. It has responded to Service (KFS) in the shortest time practicable. At local circumstances in the light of progress and tim- the time of initiating this SEA a detailed road map ing of the forest reform process and the need to exists for the establishment of the KFS that guides clarify baseline conditions through a rapid ap- the work of three subcommittees. The role of the praisal of the political economy and other situation SEA is not to duplicate work already in hand, but assessments. A number of the steps were carried to identify and examine in greater detail the areas out in parallel with each other. The main sequence of the reform process most critical to securing last- of activities included four phases that entailed ing environmental, social, and local economic ben- screening and scoping, situation assessment, set- e�ts (the SEA priorities) and then to offer practical ting environmental priorities, and development of advice on strengthening these elements of the leg- alternative courses of action (see �gure 2.1). This islation and administrative procedures. was seen as appropriate for this institutions-cen- The SEA has had two main objectives: tered SEA. 1. To inform and influence the process of imple- Important characteristics of the SEA in Kenya menting the Forests Act have included the following: 2. To inform the policy dialogue regarding sus- • Reliance on rapid assessment of the political tainable use of forest resources for national economy and analysis of existing publications development to establish the background to implementa- The latter objective recognizes the fact that other tion of the Forests Act. areas of reform are taking place simultaneously, in- • Strong emphasis on the role of stakeholder cluding management of the water sector. groups to help identify priority areas of con- The overall purpose of the SEA is to make a di- cern and key intersectoral environmental and rect contribution to the work of the social linkages. The opinions of all stakehold- Forest Sector Reform Committee. This committee ers have been sought through both open was established by the Government of Kenya under dialogue in workshops and one-to-one discus- the direction of the Ministry of Environment and sions in person or by telephone between indi- Natural Resources. It comprises senior representa- viduals and members of the SEA team. tives from across government, and representatives • Use of a case study and other site-speci�c in- from forest industry, nongovernmental organiza- formation to help identify potential winners tions, conservationists, forest users, and develop- and losers arising from implementation of the ment partners. It is chaired by the Permanent new act and the extent to which the bene�ts of Secretary of the Ministry of Environment and good forest management are likely to be Natural Resources and is the main organ to drive the shared throughout society. reform process. • Development of a policy action matrix that in- A Forest Reform Secretariat has been established corporates an accountability and transparency in the Forest Department to serve this committee framework. Its purpose is to help the govern- and carry out tasks as requested by the committee. ment chart out (beyond the road map) how to One of the �rst tasks of the secretariat has been to effectively implement the Forests Act accord- develop a road map for the implementation of the ing to the prioritized issues. new Forests Act with a clear time frame and outline of budget resource requirements. The Role of the Sea 9 Figure 2.1 Kenya Forests Act (2005) I-SEA Process Rapid assessment of Stakeholder Literature Phase I: Screening and political economy analysis review Scoping Stakeholder consultation workshop to identify SEA issues Environmental Social Case study assessment assessment Phase II: Situation Financial & Political, economic institutional & assessment governance Assessment assessment Stakeholder consultation workship to: (i) present findings from situation assessments and case study (ii) prioritize emerging issues for policy action matrix Phase III: Setting of SEA Priorities and (iii) agree on proposals for addressing priority issues Development of Alternatives GOK review and agreement of main report including policy action matrix Stakeholder consultation workshop (hosted by the Forestry Secretariat Reform Committee) to present and get agreement on final policy action matrix Summing Phase IV: Final report submitted to GOK and stakeholders Up Source: Adapted from FRR 2007 10 Strategic Environmental Assessment of the Kenya Forests Act 2005 PHASE 1—SCREENING zations, including the Kenya Forests Working Group and the Forest Department and identifying AND SCOPING and listing stakeholders who will be affected by the This initial phase entailed a rapid assessment of the new act as well as those with an interest in the new political economy relating to the forest sector in act. The list in appendix 2 of those consulted was Kenya and stocktaking of completed and ongoing presented to both the Ministry of Environment and activities and studies. It also involved determining the Forest Department and con�rmed to be fully who should be approached as stakeholders and representative of the wider stakeholder interests. identifying the environmental and social consider- The preliminary assessment of the political ations that would need to be taken into account in economy generated critical information on the role later phases of work. of key stakeholders. This output was used to select invitees to the �rst of the three planned workshops. It also helped identify environmental, social, and Rapid Assessment of the Political Economy economic issues that had been raised by disadvan- A clear understanding of the political economy is taged groups, including communities living in and essential in any SEA for two reasons; �rst, it affects adjacent to forests, and the private sector. the conduct of the assessment itself, and second, it plays a key role in determining the practical op- tions for delivering long-term reforms. One of the Literature Review main consequences of the Forests Act will be the The literature review was to build a preliminary pic- devolution of centralized state control of forest ture of principal concerns about the forest sector and management to local partnerships involving com- validate comments from individual stakeholders. munities and the private sector. It is therefore im- Methods. Relevant publications were identi�ed portant to know what the dynamics are likely to be through personal knowledge of team members, among the various stakeholders to help assess who discussions with informed stakeholders including may be winners, who may be losers, and how to the forestry profession and international commu- ensure that the relevant voices are heard. nity, and a keyword search of the Internet. Methods. An initial appraisal was based on per- sonal meetings with key players, the well-informed insights of Kenyan members of the SEA team PHASE 2—SITUATION through previous engagement in the reform ASSESSMENTS process, and literature reviews. A more systematic The aim in preparing situation assessment reports review of the role of different players was under- was to provide a baseline description of the gover- taken as part of the situation assessments. (See nance and institutional, economic, �nancial, social, Appendix 4—Governance and Institutional and environmental factors that need to be taken Assessment.) into account in implementing the Forests Act. The assessments provide the evidence on which the Identifying Stakeholders �ndings and recommendations of the SEA are based. The speci�c methods used in the different A thorough understanding of stakeholders—who situation assessments can be found in the respec- they are, what their concerns may be, what inter- tive appendixes. ests they have— is required in any SEA process. In this SEA the objective was to carry out a stake- holder analysis to complement the analysis of the Governance and Institutional Assessment political economy. Through this analysis the SEA This analysis considers the role of different institu- aimed to identify all relevant stakeholder groups to tions and organizations (identi�ed through stake- be included in consultation. holder analysis; see Social Analysis) in relation to Methods. The process of identifying stakehold- forest management at the national and local levels. ers entailed reviewing the databases of key organi- It draws out institutional issues in terms of both The Role of the Sea 11 formal and informal practices and the way in Social Assessment which these are likely to support or hinder the in- This analysis was designed to assess the social con- troduction of changes envisaged in the Forests Act. text in which the new Forests Act is to be imple- Methods. The analysis included literature re- mented, and to explore community attitudes views that provided documented evidence of the toward forest management issues. It also included roles and attitudes of different public bodies, and of a stakeholder analysis to inform the way in which historical failures of transparency, accountability, the views of different interest groups have been as- and corruption. These reviews were supported by sessed. interviews and discussions with key stakeholders. Methods. The various interests of these groups, both overt and hidden, were examined in relation Financial and Economic Assessment to the problems being addressed by the new law under the headings of Environment, Social, This appraisal has an important function in exam- Economic, and Governance and Institutions. A ining reasons for previous poor performance of the separate exercise involved assessing the likely im- forest sector with regard to forest management, pact of the new Forests Act on each of these inter- timber valuation, and revenue collection, and ex- ests (positive +, negative -, or unknown?), and ploring the scope for improvements under each of indicating the relative priority that implementation these headings once the KFS is established. It also of the act should give to each stakeholder interest considers the role of the international community on a scale from 1 (high priority) to 4 (low priority). in providing aid to forest services in Kenya. The social analysis helped to inform other areas of Methods. Original data was collected and ana- study, including the institutional and governance lyzed to produce �nancial models of historic and reviews, the selection of stakeholders, and the de- projected performance. In addition to data on ac- velopment of the case study methodology. Box 3.1 tual performance, estimates were made of the fu- describes the characteristics of the SEA stakehold- ture expenditure and revenue streams for the KFS. ers. The national analysis also drew on �ndings from the Hombe Forest case study. Hombe Case Study and Rumuruti Environmental Assessment Forest Site Visit From the outset of the SEA, it has been considered The environmental analysis focused on the nature important to verify broad conclusions drawn at a of forest resources in Kenya, the aim being to es- national level by reference to conditions on the tablish whether policies, rules, and regulations ground. A case study of Hombe Forest on the slopes could be applied universally across the country, or of Mount Kenya was used as a window into the would need to be adapted to local conditions. It local situation, primary areas of interest of the SEA, was also important to establish the nature and ex- and determining the practicalities of addressing tent of forest cover to gauge the types of environ- priority areas. In addition, a site visit was made to mental impacts to be considered. Rumuruti Forest to understand the varying context. Methods. Given the short time scale for the ini- Methods. On location interviews were con- tial appraisal, the environmental assessment con- ducted with local representatives of the commu- centrated on mapped information and published nity and the existing forest department, and sources based principally on the literature review. collecting both quantitative and qualitative data. Information contained in the environmental analy- The SEA also held a community-based workshop sis was combined with the �ndings from other as- on the implications of the new Forests Act. A sepa- sessments, including primarily the social analysis rate site visit to Rumuruti Forest focused on the to which it is closely allied given the overlaps be- views of a local nongovernmental organization tween environmental resources, livelihoods, and (Tree is Life) and the Rumuruti Community Forest human welfare. Association. 12 Strategic Environmental Assessment of the Kenya Forests Act 2005 PHASE 3—SETTING Methods. A combination of presentations, exer- cises, working group sessions, and plenary discus- ENVIRONMENTAL PRIORITIES sions were used to gather the views of workshop AND DEVELOPMENT OF participants. ALTERNATIVES The �rst two workshops helped identify prior- ity concerns and the policy action matrix contained A standard feature of SEAs is their focus on ex- in this report. The �rst workshop (held in May ploring alternative approaches to policies, plans, or 2006) recorded the broad concerns of stakeholders programs. In the case of the Kenya forest reforms, were explored in relation to the main themes of the the content of the new Forests Act has largely de- SEA. The second SEA workshop (held in June 2006) �ned the shape of the new administration, but considered a range of questions based on the analy- great flexibility remains in terms of the ways in sis of strengths and weaknesses of the Forests Act. which speci�c clauses of the act are put into effect. Participants were divided into four groups, each of It is in relation to practical implementation that the which independently examined a list of 40 ques- SEA is able to explore different ways of achieving tions and prioritized these in terms of the 10 most the overall aims. Findings from the stakeholder important topics that should be addressed in the workshops, together with the outputs from the short term to strengthen delivery of the act’s objec- case study in Hombe Forest and the brief visit to tives. The �ndings from these exercises are re- Rumuruti Forest have played a key role in shaping ported in chapter 3 and 4. At the second workshop, the SEA recommendations. the situation assessment reports were presented to- It should be noted that from the outset of the gether with the �ndings of the Hombe Forest case SEA process an effort was made to avoid drawing study and an analysis of key questions arising from conclusions prematurely, before hearing the views the May workshop and subsequent analysis asso- of those consulted and other stakeholders. ciated with the SEA. Workshops Policy Action Matrix Purpose. A series of three workshops were The final stage of the SEA involved the prepara- planned to encourage dialogue between stake- tion of a policy action matrix that captured find- holders on the key issues in the �rst session, to ings and recommendations from stakeholders. It bring together �ndings from the various assess- sets these out with clear responsibilities for action. ments in the second workshop, and agree on prior- A time scale for completion of activities needs to ities for action and to invite stakeholders to make be completed by the government of Kenya. These commitments to delivering speci�c elements of the actions were discussed and agreed to at the third policy matrix in the third and �nal workshop. workshop. 3 National and Local Situation Assessments The national situation assessment and case study (to examine the local situation) provide insights on the governance, institutional, eco- nomic, environmental and social contexts. This helped inform iden- ti�cation of priorities and potential actions. This chapter draws together �ndings from the rapid assessment of the political economy, stakeholder analysis, literature review, the national and local situa- tion assessments, and consultations carried during the �rst two work- shops. Key messages in relation to priority objectives of the Strategic Environmental Analysis (SEA) are also discussed. STAKEHOLDER ANALYSIS Different stakeholder groups make up the population affected by changes in the forest sector. These include traditional forest dwellers, communities lying immediately adjacent to indigenous forests and plantations, pastoralists and migratory groups who use open savan- nah forest on a seasonal basis, and those who depend for part or all of their livelihoods on trade in timber and non-timber forest prod- ucts. There are also other stakeholders, living remotely from forest areas, who may be indirectly affected by economic decisions affect- ing, for example, the charcoal trade or environmentally by increased runoff and flooding of local rivers as a result of clear felling opera- tions. Within each of the above communities there can be signi�cant di- versity of views and conflicts of interest. Women and children may provide much of the labor for site clearance, planting, and weeding of nurseries and plantations and yet see few of the bene�ts that come from harvesting timber or other forest resources. The stakeholder groups affected by the new act can be categorized into the following six groups:3 • government, • Community Forest Associations (CFAs), • the private sector, • nongovernmental organizations (NGOs), • scienti�c and research organizations, and • the donor community. 3 The stakeholder analysis in appendix 3 outlines in detail all the stakeholders who will be affected by the new act. 13 14 Strategic Environmental Assessment of the Kenya Forests Act 2005 For purposes of the SEA these groups were This allows for classi�cation of stakeholders ac- reclustered into three categories to distinguish cording to their degree of influence. It also facili- among those who have both high influence over tated identifying who the potential winners and implementation of the Forests Act and who will be losers under the new Forests Act and what influ- major bene�ciaries (primary stakeholders); stake- ence they may have over the process, and ensuring holder groups that may either influence or bene�t that adequate voice is given to those who otherwise from the reforms but not both (secondary stake- might be marginalized from a process like the SEA. holders); and external stakeholders, representing A summary description of these stakeholders is international donor, aid, or conservation agencies. outlined in box 3.1. Box 3.1 Description of Stakeholders Primary stakeholders comprise central government ties are the growing, harvesting, and production of departments, the private sector, national NGOs, and teas but relies heavily on fuelwood and plywood in its Community Forest Associations and other commu- manufacturing and packing processes. nity groups. National NGOs include a wide variety of civil Key government departments and agenciesa are the society organizations (CSOs), community-based current Forest Department (FD) and forest of�cers organizations (CBOs), and NGOs. Most are concerned in each of the districts, the Kenya Wildlife Service with how the new act will be implemented but are (KWS), the Ministry of Local Government, and the not, and will not be, direct bene�ciaries of forests or Ministry of Water and Irrigation. KWS is a major their products. Generally, the communities they repre- stakeholder because 31 forests (60 percent of gazetted sent stand to gain or lose more directly from the new forests) in Kenya are under joint management with FD. act. Kenya’s CSOs, CBOs, and NGOs have developed The Ministry of Local Government is also a primary substantially in the last one to two decades and now stakeholder because all municipal and council forests influence decision making at all levels and will con- lie within its jurisdiction. The Ministry of Water and tinue to affect the implementation of the new act. Irrigation is also now a major stakeholder because it Community Forest Associations, community is mandated (through the relatively new Water Act groups, women’s groups, vulnerable groups, and indi- 2002) to manage the water catchments in the country. viduals living on the edge of, or in, forests are primary These organizations have a major influence on the stakeholders because they typically depend directly implementation of the new Forests Act and are upon forests for their livelihoods. It is important to potentially major bene�ciaries. note that these groups are potentially a signi�cant The private sector as a primary stakeholder mainly bene�ciary, but have little influence on the implemen- consists of the Timber Industry Employers Association, tation of the new act. the Kenya Timber Manufacturers Association, the Secondary stakeholders can be grouped together Kenya Furniture Association, and other companies as other relevant government organizations and inter- involved in value added wood products. They are national NGOs. All of these organizations have either all primarily involved with plantation and commercial a secondary or external interest in the implementation forestry but some use indigenous forest products. of the new act. An example of an international NGO A subsidiary group of private sector interests has also with a secondary rather than a primary stake in the been de�ned that does not depend directly upon new act could be the World Wide Fund for Nature forests for their core activities but whose future may (WWF). While it is at the forefront of work in the be closely linked with medium- to long-term plans for forestry sector, if this opportunity ceased, the WWF forests and their products. A good example is the would continue working in other areas of conserva- Kenya Tea Development Authority whose core activi- tion, such as wildlife or the marine environment. (continued) National and Local Situation Assessments 15 Box 3.1 Continued Research organizations. The main national organi- President. Examples of key parastatals include zation dedicated to forestry research in Kenya is the KenGen (the electricity generation company), the Kenya Forestry Research Institute (KEFRI), which has National Environmental Management Authority been involved with the formulation and drafting of (NEMA), and the National Museums of Kenya (NMK). the new act. Other organizations involved in research In each case there is some debate or overlap regarding generally work in the region but not exclusively in legislation or delineation of duties and therefore op- forests in Kenya. Thus, they are placed to influence portunities for harmonization or conflict depending the implementation of the new act, but again will not upon the approach adopted. be direct bene�ciaries. This is more clearly illustrated External stakeholders comprise multilateral and bi- by the fact that they have diversi�ed from research lateral donors. Multilateral donors that have a long re- in forestry in Kenya to supplying forestry training lationship with Kenya and the forestry sector include services to 17 countries in Africa and have links with the World Bank and, to a lesser extent, the United European, American, and Asian academic and Nations Development Programme, and the United research organizations. Nations Environment Programme. Bilateral donors Other central government departments. This group with a long history of working in forestry in Kenya in- includes ministries and departments within the gov- clude the UK Department for international ernment that have some relationship with FD, includ- Development, the Embassy of Finland, Japan ing semiautonomous parastatals. Their core business International Cooperation Agency, and the US Agency is not in forestry and therefore they are termed sec- for International Development. Other donors have, ondary stakeholders. Examples of government min- over the decades, supported forestry in Kenya, but istries include the Ministry of Agriculture, the Ministry generally their aid programs have been focused else- of Regional Government, and the Of�ce of the where or have been less direct and explicit. Source: FRR 2007. a. This includes all the members of the new Forest Board. These are the Permanent Secretary in the Ministry responsible for matters relating to forestry, the Permanent Secretary in the Ministry responsible for matters relating to water, the Permanent Secretary in the Ministry responsible for �nance, the Permanent Secretary in the Ministry responsible for local authorities, the Director of Kenya Forestry Service, the Director- General of the National Environment Management Authority, the Director of the Kenya Forestry Research Institute, the Director of the KFS, and eight other persons not being public servants appointed by the minister. THE POLITICAL ECONOMY this period saw the most effective use of forest re- sources. Forestry management has been heavily centralized In 1987, the shamba system was dismantled for in Kenya as a legacy of the colonial period, with the �rst time since the �fties with a clear political government taking a direct interest in all aspects of objective. This started to reverse the trend in the planting, cultivation, harvesting, and processing. forest sector and a signi�cant decline of the sector The control of forestry has traditionally been exer- began. The Kenya Forestry Master Plan (KFMP) cised by the Forest Department (FD) under the di- initiated in 1991 (MENR 1994b) forecasted signi�- rection of the Ministry of Environment and Natural cant decline in forest production unless issues of Resources (MENR). institutional reform and governance were ad- For many decades forests have been exploited dressed. at unsustainable levels. During the 1980s, major ef- Evidence shows that both MENR and FD have forts were made by government, supported by in- been susceptible to political pressures and personal ternational donors, to place forestry management self interest in the past, with high levels of corrup- on a �rmer footing. It is widely acknowledged that tion reported. The situation became particularly se- 16 Strategic Environmental Assessment of the Kenya Forests Act 2005 Table 3.1 Importance and Influence of Stakeholders High importance as bene�ciaries Low importance as bene�ciaries High influence on implementation Central government (FD, KWS, Ministry Forest of�cers of Water and Irrigation, and Ministry of National NGOs Local Government) Research organizations Private sector (saw mills and value adding) Low influence on implementation Community forest associations Central government (other) Communities adjacent to forests International NGOs Private sector (other) Multilateral donors Source: FRR, 2007. rious in the early 1990s and resulted in the with- to and the government of Kenya has clearly stated drawal of support from the international commu- its desire, in the 2006 budget, to operate its main �- nity for the forestry sector. Ironically, this occurred nancial services without reliance on donor aid. when a clear sense of the direction that was needed Notwithstanding this, the �nancial assessment (see had been outlined in the KFMP. Appendix 7) makes clear that achievement of the Throughout the 1990s, FD operated with inade- planned reform of the forestry sector will depend quate resources and deteriorating staff morale. Its on external �nancial assistance. capacity to maintain state indigenous and planta- Ethnicity provides an important dimension in tion forests was reduced and increases in illegal ac- politics and the desire of political leaders to ensure tivity within state forests led to presidential bans, that their “own people� bene�t from changes of starting with the dismantling of the shamba4 sys- government or administration has played a major tem, and then Presidential bans on logging from role in decisions on land use in the past. Both na- both indigenous and plantation forests (except for tional and local leaders previously sought to allo- the controversial exemption of supplies to the only cate forest land to the homeless. In practice the paper and pulp mill in the country). There is, how- bene�ciaries have often been supporters of the ever, clear evidence (from statistics contained in government of the day rather than rootless minor- the economic and �nancial situation assessment) ity groups who largely constitute the homeless. that FD has succeeded in reversing some of its �- The extent to which these changes have been dri- nancial constraints with the direct support of ven by political motives and greed, as opposed to MENR over the last two years. community interest, is an issue on which different Before the 2002 national elections, planned exci- political parties have their own views. Regardless sions of forest land by the then government were of the underlying causes, the outcome is that sub- successfully resisted by community movements stantial numbers of people live within forest re- and by civil society. The major NGOs associated serves or in squatter camps to which they have with forestry have campaigned strongly for forest been evicted. There are also rapidly growing pop- reforms since 1991, when the recommendations to ulation pressures in forest areas (for example, distance forestry from direct government Nyeri District has seen a 100 percent increase in control were �rst proposed in the KFMP. These population between 1969 and 1999), which will in- NGOs remain concerned that, even with the evitably increase pressures on land and forests in change of government in 2002, the process of re- form has been too slow. Other stakeholders in the SEA process have 4. Also known as nonresident cultivation of trees. Under the shamba system, farmers grow both plantation trees and food varying degrees of influence on the political econ- crops on small plots, tending the trees and harvesting the omy. The role of donors has already been referred crops until the trees have become established. National and Local Situation Assessments 17 the future. There is an urgent need to establish ef- A realistic and pragmatic view needs to be fective resettlement policies in and adjacent to for- taken of the political economy within which any est areas that respect human rights. major economic sector functions. Depending on Issues of ethnicity are also reported to have the focus and direction of the government, there played a part in the selection of FD staff at central will always be some who gain and some who lose office and in regional and district offices. A con- from redistribution of resources. There will also be scious decision to place in district forest of�ces in- those who gain in influence and those who are dividuals who do not belong to the local marginalized by the political processes of the day. community can either hinder or assist the process What is abundantly clear from a review of forest of forest management, particularly policing and governance in Kenya is that in the absence of a security roles. This in turn plays a part in the cre- level playing field with clear and transparent ation of environments conducive to bribery and rules, ultimately it is the whole of society that suf- corruption. There is, however, a widely held view fers from poor management and overexploitation among stakeholders that opportunities for bribery of natural resources. and corruption can only be exploited within any The essential steps toward decentralizing forest government organization if those in the highest management have already been initiated by the positions of authority are actively engaged them- government of Kenya by transferring forest ad- selves or are willing to condone it in response to ministration and regulation to the KFS. This pressures from government itself. should provide strong and independent leader- The private sector has been adversely affected ship but there is still a risk that inappropriate lev- by government decisions to place restrictions on els of government influence, abuse of power, and timber harvesting and by the general economic cli- elite capture could return. It will be important to mate for investing in forestry. The capacity of pri- ensure that all aspects of the service are run in an vate sector to influence events in the forest sector open and transparent manner with full public ac- has also diminished. There are, nevertheless, indi- countability. vidual companies and commercial interests with Continuing pressures on land and natural re- close ties to government that have received prefer- sources as a result of population growth means it is ential treatment because of these links in the past. imperative that the policies, rules, regulations, and Until recently, citizens have had only limited in- incentives developed for the forest sector are sup- fluence over government policy in the forestry sec- ported by, and integrated with, equivalent policies tor or the way in which forests are administered. for agriculture, planning, and land use in the areas This situation has changed with the emergence of immediately adjacent to forests. Without this, the community leaders and environmental activists government’s goal of a sustainable forestry sector who have been prepared to put national interest will fail. above concerns for their own welfare. The Green Belt movement, founded as early as 1977 by Professor Wangari Maathai, is a prime example of NATIONAL LEVEL SITUATION a grassroots organization that is leading the way in ASSESSMENTS: KEY ISSUES representing environmental and community inter- AND CONCERNS ests in forestry. The movement is now developing an international focus to its work. Four national level rapid situation assessments There is increased awareness of the environ- were conducted on governance and institutions, mental, social, and economic importance of environmental, social and economic and �nancial Kenya’s forests among the population. A great di- considerations. A summary of the key issues and vide, however, still exists between current proce- concerns identi�ed in the assessments is presented dures for planning and managing forests in Kenya below. A more detailed discussion of these assess- and the goal of giving communities in forest areas ments is available in the appendixes. It should be a strong voice in governance and a real stake in the noted that several of the concerns raised by stake- economic and wider bene�ts that stem from sus- holders (see box 3.3) mirrored the assessments’ tainable forestry. �ndings. 18 Strategic Environmental Assessment of the Kenya Forests Act 2005 Key Issues Highlighted in the KFMP political inertia, corruption, or mismanagement, little progress was made in implementation of the While the present government initiated the current plan. Potential lack of progress remains a major reform process in 2002, essential steps for improv- concern today. Questions are often raised about the ing the sustainability of Kenya’s forests and wood- capacity to implement the reform process and the lands have previously been identi�ed in major commitment of all major players, including gov- studies and workshops dating back to 1991. Several ernment and donor organizations, to deliver effec- of these were captured in the KFMP, but because of tive solutions. Box 3.2 Framework for Forestry Development in KFMP Key messages in KFMP on the framework for forestry • Leasing state land for forest plantations to sup- development include the following. plement the management of state plantations under a public or private forest enterprise, and Conservation and management of the thus avoiding a burden on the government’s indigenous forest budget • Ensuring that the authorities exercised their • Developing a harvesting, transport, and market- rights to refuse of�cially endorsed excisions of ing system that encourages the proper allocation gazetted forest and use of available wood including • Dealing equitably with squatters, forest dwellers, – rotation cycles based on economic considera- and forest-adjacent households, to overcome tions rather than the needs of existing industry problems of those dispossessed of their homes – introduction of log grading and quality con- when shamba was abolished, those prohibited trol from carrying out their traditional rights, and – proper controls over transportation of timber those seeking to create livelihoods for them- – economic pricing of timber, rather than pric- selves by encroaching on forest land ing based on administrative decisions • Dealing with the urgent requirement to �nd al- – liberalization of trade in wood and wood ternative sources of forest products for the rural products communities • Reforming policy and legislation immediately so • Promoting forest ecotourism to generate in- the master plan can be based on a policy and creased and sustainable incomes legal framework that reflects the national will with regard to the role of forests in the develop- Farm forestry and dry land forestry ment of the country. • Providing support for growing trees on farms, in- • Implementing institutional reform at an early cluding development of markets stage; priorities are the phased transfer of public • Acknowledging the role of natural woody vege- forest resource management to the best eco- tation in the dry lands nomic managers and restructuring of the Forest Department as the highest forest authority Forest plantations • Developing extension services that avoid bu- • Transferring plantation management to the best reaucratic duplication of resources economic managers • Concentrating on development-oriented rather • Instituting a socially more desirable agroforestry than academic research on forestry matters system (reflecting the bene�ts of the shamba • Strengthening long-tem planning and resource system but avoiding political pressure to excise monitoring forest land) Source: FRR, 2007. National and Local Situation Assessments 19 The overview report of the KFMP produced by Key Governance and Institutional Ministry of Environment and Natural Resources in Considerations 1994 captured several of the issues and discusses There has been much criticism of the historic per- the real challenge for effective planning and man- formance of both MENR and FD, but early meetings agement of these resources (see box 3.2). provided reassurance that the present administra- Unfortunately, very few of its positive proposals tion is fully committed to the need for forest reforms and recommendations were acted on by the gov- and implementation of the Forests Act. ernment in place at the time. Many of the problems, Intersectoral and interagency challenges include: including illegal logging and excision of forest areas, have since been exacerbated. However, the • The KFS will be a quasi-government organi- essential elements of the KFMP have now been zation like the Kenya Wildlife Service. The lat- translated into the draft Forest Policy and new ter is well equipped with resources (both Forests Act 2005. capital and �nancial) to manage areas under Box 3.3 Key Concerns Raised at the First Stakeholder Workshop Environment Providing greater protection of water catchments Social Issues Enhancing protection of biodiversity • Need for better community participation in • Promoting sustainable use of forests and forest terms of livelihoods, poverty, unemployment, products and gender • Valuing ecosystem services and arranging appro- • Need for community bene�ts and bene�t sharing priate levels of payment for environmental ser- • Low capacity to engage in processes affecting vices communities • Giving greater emphasis to arid forests and non- • Need to capitalize on processes already taking moist forests place within communities • De�ning role of plantations to reduce pressure • Cultural and religious issues on the environment • Importance of charcoal • Demand for timber and non-timber products Economic Issues • Contributing to poverty alleviation, equity, and Governance and Institutions bene�t sharing • Focus on community empowerment and devolu- • Specifying the role of plantations and commer- tion cial management • Corruption • De�ning policies for the control of timber har- • Role of public-private partnerships vesting and setting up concessions • Participation • Understanding importance of forests to economy • Active enforcement as a whole • How to �nance the new forestry service, re�ning • Making adequate provision for the forest sector the strategic plan and road map to ensure effec- in government budgets tive delivery • Developing policies for the timber and non-tim- • Extent of political interference in the forest sector ber sectors, including market chain issues and adding value • Ensuring ef�cient allocation of concessions Source: FRR, 2007. 20 Strategic Environmental Assessment of the Kenya Forests Act 2005 its jurisdiction. One institutional problem be- Challenges presented by lack of independence tween the FD and the KWS that should be ad- and political interference include: dressed in the forest sector reforms is the • The transformation of the FD to the KFS will overlap in mandates, especially in areas bring on board new institutions, namely the gazetted both as forest reserves and national KFS Board, Finance Committee, FCC, and reserves. CFAs. The Forests Act 2005 stipulates how • Though mandated to take care of trust land these institutions will be formed and how ap- forests, forest conservation is not a core func- pointments are to be made. It is well known tion of local authorities. Most local authorities that most appointments have in the recent have low forest management capacity and are past been politically based and in some cases, poorly run; corruption and political interfer- ministers have abused their powers. ence has contributed to most of the trust land • The Constitution should guide sector re- forest loss. forms; currently the Constitution is in the • Forestry research is offered by the Kenya process of being reviewed and if it takes a dif- Forestry Research Institute (KEFRI). KEFRI ferent direction than the one proposed by the undertakes research for sustainable develop- act with regard to management of natural re- ment of forests and allied natural resources. sources, conflicts may arise. The proposed KEFRI has major constraints in execution of new Constitution’s provisions rejected last its activities, mainly arising from low capac- year through a referendum on devolution ity (especially to publish and disseminate re- would have had direct implications for the search �ndings, meet increasing demands for management of forest resources. Two objec- tree seeds, implement information technol- tives of devolution are to recognize the right ogy, and generate revenue) and inadequate of local communities to manage their own funding. local affairs and form networks and associa- • The National Environmental Management tions, and ensure equitable sharing of na- Authority (NEMA), established by the tional and local resources. These would Environmental Management and Co-ordina- impact the management of forested areas and tion Act (EMCA) of 1999, is supposed to pro- the location for management of devolved vide overall coordination of all matters local government. relating to the environment and be the princi- • The proposed involvement of local communi- pal instrument of government in the imple- ties is a good intention; however, some of the mentation of all policies relating to emerging local community associations are environment. However, it has limited capac- not genuine in partnerships and others are ity to effectively play this role. It is expected driven by self interest, but most important is that all sectoral environmental laws, includ- that most will require capacity building. ing forestry legislation, will be revised and • Political will and transparency in running of harmonized with the provisions of this frame- the KFS are prerequisites to ensuring effective work law. This is deemed necessary because implementation. Incentives need to be cre- of conflicts in much of the current legislation. ated in government to run the KFS properly • Lack of clear linkages of the Forest and effectively for sustainable forest manage- Conservancy Committee (FCC) with other ment. committees such as the catchment areas com- • Resources are sorely needed. One of the con- mittee under the Water Act 2002 pose a chal- straints in forest management, especially for lenge to the new institutional setup of forest protection and management of forests, is the management. limited capacity and low funding in FD and • Other issues related to governance and pro- other lead institutions, which should be ad- moting forest loss are undervaluation of dressed in the implementation of the new act. forests and rising poverty levels among local Monitoring mechanisms should be estab- communities. lished for effective implementation of the act. National and Local Situation Assessments 21 • The setting up of clear institutional mecha- ability of new policies and programs in nisms, clear incentive policies to promote Kenya, it will be key to ensure these different private sector and local community involve- approaches are harmonized. ment, clear requirements and conditions for • Charcoal constitutes the only fuel for approx- partnerships, clear conditions and criteria for imately 65 percent of Kenyan households and declaration of provisional forests, and new its sustainable production needs to feature in technologies that enhance efficiency are energy policy. At present, most charcoal is needed. produced illegally on council, trust, and com- munity lands, causing major environmental damage. The Forests Act recognizes the sig- Key Environmental Considerations ni�cance of charcoal production and makes • Environmental issues and stakeholder con- provision for it to be legalized. This has major cerns associated with the new Forests Act social, environmental, and economic implica- vary greatly between the different forest re- tions that are discussed in chapter 5. source types in Kenya, that is, plantation • Rehabilitation of degraded forests by the KFS forests, indigenous forests, farm forests, dry is given due attention in the new act; how- land forests, private forests, and local author- ever, it is not clear how the KFS will deter- ity forests. mine priorities for action given the poor state • Many of the issues that have arisen from this of many existing local authority forests. situation assessment are cross-cutting. Issues such as water catchment management, Key social considerations wildlife, agriculture, land tenure, and land use policy among others are all relevant to the • The draft Forest Policy set forth in “Sessional new act but do not necessarily fall under the Paper No. 9� (GOK 2005c) currently awaiting control or management of KFS. It will be im- cabinet approval contains a range of good so- portant for the new KFS to link and work with cial objectives for the forest sector that capture a number of different government depart- poverty issues, participation, livelihood ments to ensure effective and sustainable im- strategies, gender, HIV, and equity issues. plementation of the new act. Ensuring that this policy is formalized so that • An ecosystem management approach is pro- it can shape the implementation of the new posed for the management of natural re- act will be key to ensuring social objectives sources in Kenya. It, however, is not clear are achieved. who will be responsible for de�ning and • Establishing clear and transparent mecha- overseeing this policy and how other agencies nisms for bene�t sharing of forest revenues and departments will be involved in the im- accrued from sustainable forest management, plementation. as proposed in the new act, will be critical for • Selecting appropriate forest conservancy ensuring communities bene�t �nancially areas is crucial. The process of de�ning the from the resource. Failure to establish such boundaries of the future forest conservancy mechanisms may result in mistrust and com- areas is understood to be almost complete. In munities unwilling to engage in forest man- most cases, these follow established adminis- agement. trative boundaries and also coincide with • There is a need to incorporate best practice water catchment boundaries that are being from participatory forest management used in the development of water catchment within Kenya, and more widely in the re- agencies. gion, to ensure that the new guidelines and • The issue of how conservancies will relate to subregulations have the desired positive so- other administrative areas remains unclear. It cial impacts. is not clear how these conservancy areas will • There are important linkages between poverty, be selected and how these will relate to other forestry, and health (see box 3.4) that need to administrative areas such as water catch- be taken into account in the implementation of ments. To ensure the environmental sustain- the new Forests Act. 22 Strategic Environmental Assessment of the Kenya Forests Act 2005 Box 3.4 Relationships Between Poverty, Health, and Forestry To set the context for a review of community parti- The spread of HIV/AIDS has affected 7 percent of cipation and benefit sharing issues, it is appropriate Kenya’s population, over 60 percent of whom live in to provide a brief summary of conditions found rural areas. Given the high cost of antiretroviral drugs, within most forest community areas. Some 80 many people are turning to natural medicines found percent of the population of Kenya lives within the largely in indigenous forests. Demand for such plants area where the major forests exist, which accounts and fuelwood are increasing pressures on forests for only 10 percent of the land area. This gives rise (Mbugua 2003). The government has recognized that to many of the direct conflicts between people, the HIV/AIDS pandemic may be causing a shortage of their livelihoods, and their environment. It is esti- skilled and unskilled labor and this is being experi- mated that 3.8 million people live within 5 kilome- enced in the forest sector (GOK 2005b). ters of forest resources. In 2003, 2 million people, A further health concern relates to the use of fuel- 14.6 percent of the labor force, were unemployed wood and charcoal as the principal sources of energy and forests provided a resource safety net for many in homes. As many as 18 percent of children suffer of these. This role is enhanced in times of drought from acute respiratory infection, which is caused by when forests may be the only areas providing incomplete combustion of wood and biomass and can grazing for livestock, especially in arid areas. be fatal in children. Increased pressure on environmental goods and Many of the excluded and vulnerable groups in services, especially forest products, is recognized society are found in forest areas and are denied par- in the Millennium Development Goals Status ticipation in development processes, whether gov- Report 2005 as one of the main indicators of ernment or community led. People directly affected poverty (GOK 2005b). Kenya’s economic perfor- include women, youths, the elderly, those with dis- mance between 1990 and 2002 was well below abilities, and members of marginalized tribes. its potential and as a result annual per capita These issues are cross-cutting ones that affect al- income at constant 1982 prices fell from US$271 most every aspect of the new Forests Act and the role to US$239. of communities in future forest management. Source: FRR, 2007. Key Economic and Financial Considerations has the potential to raise enough revenue for all its activities and within 10 years accumu- • Implementation of the Forests Act will require late savings while at the same time giving major reforms within the FD to transform it to money to community-managed forests. the KFS. This calls for large inputs in areas of • Good forest management practices advocated capacity building and forest management that by the new Forests Act are intended to remove are not available in the government budget. major constraints to realizing optimal returns Development partner funding will be re- from the forests, for example, lifting the cur- quired to fund these components if they are to rent harvesting ban in plantations and im- be implemented in a timely manner. proving revenue collection systems (for a • The FD currently manages all state forests. At summary of the �nancial appraisal see box present, the income generated from these 3.5). This is expected to raise revenues from the forests is not enough to cover the manage- current 30 percent levels to over 95 percent of ment costs incurred. From the analysis, it is potential revenue, shortening the period in clear that under the new Forests Act the KFS which the KFS can become self-sustaining. National and Local Situation Assessments 23 Box 3.5 Summary of Financial Appraisal Existing revenue sources ban on harvesting from plantations. Despite these The FD has been operating in the role of a caretaker shortcomings, FD has achieved some notable success administration since 2002, following an initial review in raising revenue in the last two years. Between that saw most staff suspended because of poor perfor- 1999–2000 and 2003–4, revenue collection mance and �nancial irregularities. Its capacity has amounted to less than K Sh 100 million per year. This been seriously affected by lack of resources. For many rose by 700 percent in 2004–5 to K Sh 500 million. years, income has been greatly reduced as a result of See �gure below. the complete ban on indigenous logging and partial Revenue Collection in the Forestry Sector 600.0 500.0 400.0 300.0 200.0 100.0 0.0 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/6 Timber Fuelwood Poles Miscellaneous Source: Forest Department. The improvement in performance stemmed largely than to the MENR, where revenue collection could not from the change in political leadership of the MENR, be effectively monitored within the general funds. It is which approved an increase in the price of wood pulp notable that these measures resulted in revenues from from K Sh 315 to K Sh 700 per cubic meter in 2004. roundwood log production rising from K Sh 50 million Previously the price of pulp wood had been held down in 2003 to K Sh 509 million in 2004. by the combined resistance to increased charges from Further measures for improving revenue collection established sawmillers and Kenya’s single pulp and and monitoring are presented in part three of the paper mill, Pan African Paper Mills (PPM). A contribu- policy action matrix, based on the SEA research and tory factor was the decision to direct PPM to make pay- the limitations in existing systems illustrated in the ments for pulp products to the Forest District, rather figure below. (continued) 24 Strategic Environmental Assessment of the Kenya Forests Act 2005 Box 3.5 Continued Factors Contributing to Poor Revenue Collection Revenue Area x yield x price = collected • Inaccurate reporting due • Poor assessment • Prices can be lower than • Non collection of revenues to poor area measurement resulting in lower the true value due to even though calculated • Illegal cutting of some volumes than actual method used to set them and invoiced parts of a forest before • Under reporting by the • Prices could be dictated • Revenues collected but assessment assessment team in by higher government not booked or reported • Excision of existing collusion with the buyer authorities • Plantations earmarked plantation for other • Poor forests for cutting and even purposes establishment invoiced but not cut due • Deliberate under • Loss of trees through to saw miller inability reporting by the animal damage and fires to cut assessment team for • Poor marketing strategies revenue calculation on side of FD making mature plantation remain standing for a long period of time Projected revenue stopped. Under these conditions, projected revenue An assessment of revenue streams over the period could rise from K Sh 1.57 billion in 2007–8 to K Sh 2007–8 to 2014–5 has been made, providing a “best 4.29 billion in 2014–5. Some 70 percent of this rev- case� model of future income for the KFS. It is based enue will continue to be drawn from royalties on tim- on assumptions that royalty rates will be further en- ber sales, but new sources will include legalized hanced, a timely and well-organized transition from charcoal production, sale of bamboo, and provision of FD to the KFS will occur, new revenue will be intro- environmental services and professional services. See duced, and existing leakages in revenue will be �gure below. Projected Revenue for the Kenya Forests Service 5000 4500 4000 3500 KSH000 3000 Other revenue 2500 Fuelwood & Poles 2000 Timber Plantations 1500 1000 500 0 07 08 09 10 11 12 13 14 Years Source: FRR 2007. (continued) National and Local Situation Assessments 25 Box 3.5 Continued Donor support contributes only 7 percent to the A roadmap and three FD programs have been current annual FD budget of around K Sh 1.3 billion. prepared by the reform committee. These cover However, this aid represented more than 50 percent • forest sector reforms (training in industrial capac- of the department’s development budget in 2005–6. ity, subsidiary legislation, capacity building for Further increases in donor support are anticipated in 3.8 million people in forest areas, and creation 2007; these will need to be channelled with care to of community associations), avoid exceeding the capacity of the reform committees • KFS (organization, resource assessment, and ca- and secretariat to direct and service the investment. pacity building), and • forest development programs (relating to natural Projected expenditure forests, industrial forests, farm forests, and dry Estimates for future expenditure are based on assump- land forests). tions about the way in which the forest sector reforms Projected expenditure to deliver these programs be- will proceed. The KFS will play the central role in gins at K Sh 3.5 billion in 2006–7 and rises to K Sh administration and regulation of the forest sector. For 3.85 billion in 2007–8 before falling back and stabiliz- it to achieve this goal, the following tasks are seen as ing at around K Sh 3 billion from 2010–11. critical: The budget for establishment of the KFS shows a • Changing working attitudes and professional gap between revenue and expenditure of K Sh 2 bil- ethics lion in the �rst two years, which falls to break-even • Reducing the number of subordinate staff stage within four years,a after which the service is pro- • Retraining forest guards (through Londiana jected to move into surplus. There are, however, seri- Forest College) ous reservations that the necessary organizational • Increasing the number of lower-grade profes- studies can be put in place to equip the KFS to do its sional staff job, and that staff with the appropriate skills and ex- • Developing strategies to cover increased respon- pertise can be recruited without rolling over the ma- sibilities for forest management and regulation jority of existing FD employees, some of whom may outside the gazetted forest areas not be quali�ed or suf�ciently adaptable to take on • Involving communities and private sector in radically different roles from their present posts. forest management Source: FRR, 2007). aThere are several assumptions underlying this conclusion. For more details on the assumptions please see Appendix 7. • In the fourth year after the KFS is estab- lished, revenue is expected to exceed expen- 5 There are several assumptions underlying this projection ditures and analysis shows that net present which are detailed in Appendix 7. For example, it is assumed value turns positive in the same year; this in- that the total plantation area available for harvesting is dicates that the new Forests Act will create 120,000. The calculation also uses a conservative estimate of annual area for harvesting based on rotation period for spe- an environment conducive to sustainable ci�c species and optimal yields. Using different assumptions, forest industry yielding returns for the in- the period prior to KFS �nancially breaking even is longer vestor in 10 years.5 (World Bank, 2007). 26 Strategic Environmental Assessment of the Kenya Forests Act 2005 LOCAL LEVEL SITUATION Tensions clearly exist between the community association and the FD relating to the failure of the ASSESSMENTS: KEY ISSUES AND latter to prevent illegal logging and other damag- CONCERNS IN HOMBE AND ing activities within the forest. RUMRUTI In Hombe and Rumruti community groups have Community Involvement already been formed and are known to be active. Both Hombe and Rumruti have active community The issues raised by the planned reforms are also associations. These associations and their NGO col- being carefully considered and debated by these laborators have promoted various initiatives. A communities. major education campaign has been initiated through local schools to build environmental Challenges with Management awareness and promote creation of tree nurseries. The campaign extends to the production of murals Hombe Forest. The area of Hombe Forest falls on buildings and commissioning of songs with a under the administrative jurisdiction of both FD forest and environmental theme that are played on and Kenya Wildlife Service (KWS) because that local radio stations. part of Hombe Forest is gazetted as a forest reserve Historically, in Hombe large amounts of wood (Forests Act CAP 385) and also as a National were cut for charcoal making within the forest. Reserve under the Wildlife Act. Competing objec- Such practice sometimes resulted in extensive for- tives form one of the underlying reasons for failure est �res. The community has taken measures to re- to agree on a strategic management plan for the en- duce the incidence of illegal charcoal making by tire Mount Kenya Forest. The basic conflict arises arranging for the community to clear areas of scrub because KWS’s mandate requires it to protect invasion on farmland for fuelwood and charcoal. wildlife and prohibit use of forest resources within Honey is still harvested in a totally destructive National Reserves, whereas FD encourages use way by felling the trees containing wild colonies and also seeks to control movements of elephants, and cutting out the comb from the fallen hollow which cause extensive damage to plantations and logs. This operation destroys the colony and re- community crops. duces the population of wild bees from which The present conflicts in purpose are also com- swarms can be taken. In an effort to reverse this plicated by the need to give careful attention to the trend, beekeeping is being encouraged by Tree is District Development Plan, which advocates the Life, a local NGO. expansion of agriculture to support the expanding population6 of Nyeri District. This, in turn, requires the development of water resources. Further Financial Provisions changes need to be anticipated through the proba- District Forest Of�ces (DFOs) are �nanced by the ble review of the existing Wildlife Act, which will Ministry of Finance (the Treasury) and operate add another new natural resource act to be inte- under provincial administration. The funds are grated alongside the Forests Act 2005, the Water provided based on available budgets rather than Act 2002, and Environmental Management and the district’s budget requirements or capacity to Co-ordination Act 1999. raise revenue. Allocations to individual stations are The history of management within Rumuruti based on the overall pool and judgments made at has been poor and the low level of staf�ng and lack district level. Hombe is one of nine forest stations of morale among FD staff has provided insuf�cient within Nyeri District but receives only 6 percent of deterrence to individuals seeking to exploit forest the district allocation. resources illegally. The main threats come from logging of podocarpus trees. These are usually cut with a chain saw and felled during the night and then left for two to three months to dry. The fallen tree is then cut into logs that are removed by don- 6 Records (subject to quali�cation) suggest that the number of key to the nearest road. The timber is loaded into people living in the district has risen from 360,000 in 1969 to trucks and transported out of the area. 677,000 in 1999. National and Local Situation Assessments 27 For the Hombe Forest area, political interests the “forest is ours,� but there is also a pragmatic made it dif�cult in the past for the district forest of- recognition of the role of the FD and the status of �cer to adhere to the available district budget due the land as a national resource. to pressure to spend funds on unplanned but Bene�ts gained by communities from forest re- emerging activities. Furthermore, because �nancial sources are already substantial. They include graz- payments are under the control of only one district ing, grass collection, water, fuelwood, sticks for accountant who is responsible for all the ministries, plant supports, bee-keeping, and a limited engage- the funds released are often inadequate and, often ment in eco-tourism. A number of these activities too late to be of use for essential activities. are controlled by local groups, including water ab- Other funding for environmental coordination straction, beekeeping, and �shing and regulation in the forest sector is provided, in Issues of land for homes, water, agriculture, theory by NEMA but there is no distribution at for- wildlife, forestry, and ecotourism, however, all est station level. Provincial and district staff of jockey for attention and status. Demand for graz- NEMA have to rely on support from other govern- ing land is very high and in drought conditions cat- ment departments to cover equipment and travel tle are driven into Rumuruti Forest to take costs, which restricts their capacity to challenge advantage of the shade and additional forage. In these departments for infringements when these June 2006 it was estimated that there were in excess are reported at provincial or district environmental of 6,000 head of cattle in the forest, compared with committee meetings. its natural carrying capacity of 600 animals. Analysis of some of the recent �nancial records Overgrazing by cattle has severely damaged the of Hombe Station and calculations of potential ground cover in most of the outer forest areas. costs and revenue under the new act indicate that In addition to pressures from livestock, successful implementation of the act could result in Rumuruti has recently also attracted elephants. revenue generation. The analysis of expenditure These animals have migrated from other forest re- during the year 2005–6 suggests that Hombe re- serves and there are currently 30 adults that cause ceived in the region of K Sh 2.4 million covering substantial damage both within the forest and on staff salaries. In the same year, the income gener- adjacent farmland. ated from all sources amounted to under K Sh 0.5 million. These �gures suggest that Hombe Forest is Encroachment, Eviction, and Resettlement a major liability in economic terms, costing �ve times as much as it generates. However, these �g- In Hombe Forest there has been a long tradition of ures represent the present situation in which few of squatting within the forest reserve and about 500 Hombe’s substantial assets are being utilized. households have been evicted and now live in The potential of Hombe Forest under the new makeshift camps along the roadside. They include act was assessed by estimating the cost of a realis- farmers who were relocated when the shamba sys- tic level of inputs to process timber sustainably and tem was banned in 1989. A second group lives on exploit non-timber forest products and, at the same government land but without the bene�t of land time, calculating the bene�ts that would accrue. security. While socially excluded from the commu- Placing Hombe on a secure operating base under nities, squatters are given support (for example, by the new act is estimated to require an expenditure being exempt from the need to make payments for of K Sh 9.5 million in the base year of 2007, but this collecting fuelwood). The fact that some families could generate an income of K Sh 20.6 million in have been homeless for over 18 years is sympto- the same year, converting a loss into pro�ts of over matic of the pressures that rising population con- 100 percent. tinues to bring to communities living in the vicinity of the country’s forest reserves. In 2001 the Government sought to excise 717 Competing Land Use hectares of clear felled forest land. Local communi- In Hombe local people have invested a great deal ties reacted strongly against the plans because of of their time and effort in replanting and manage- how the land was going to be allocated and the po- ment of the emerging plantations has understand- tential environmental and micro-climatic impact of ably created a very strong community view that removing tree cover. Hombe communities demon- 28 Strategic Environmental Assessment of the Kenya Forests Act 2005 strated against the government’s plans, which Future Partnerships Between Communities were thwarted by the general election, and the and the Private Sector communities have since played a major part in sup- The community view of future private sector in- porting the FD in establishing thriving plantations volvement is based on prior experience of wide- across the entire deforested area. scale felling and failure to replant. Communities are determined to see local peoples’ investment in Experience in Forming Community reestablishing forest cover fully recognized and Associations compensated in any future harvesting plans. Community representatives clearly distinguished Hombe is an area within which there is already a between private investors who are themselves part lot of community activity and anticipation about of the community, like saw millers, and large na- the opportunities presented by the Forests Act. tional or multinational companies that have no Three forest associations exist: Hombe Forest roots or links with the area. Association, Hombe Neighbouring Association, and Kagati-Kaimati Association. The �rst of these is already registered, while the others are awaiting ONGOING AND POTENTIAL their certi�cates. Proper structures and adminis- trative and �nancial arrangements are in place for INVESTMENT all three. The main strengths of these organizations In the early 1990s, Hombe was a productive forest are considered to be: area with a thriving local sawmilling industry, gen- erating between K Sh 0.4 million and K Sh 1.9 mil- • community unity, lion per year. The inde�nite presidential ban on • willingness to cooperate and community timber harvesting imposed in March 2000 halted all drive, production and resulted in the closure of the four • manpower (for forest activities), local sawmills. An estimated 1,000 jobs were lost. • community dedication and commitment, There are major opportunities for increasing the • good local knowledge, and productivity of Hombe Forest within a strictly sus- • a strong community voice in decision making. tainable management regime. For this to be • Potential weaknesses include achieved, investment will be required by all parties, • �nancial limitations, including private sector businesses, individuals, • lack of professional forestry knowledge, communities, and the state. Table 3.6 illustrates the • other capacity constraints, and nature of these opportunities and the principal in- • potential conflicts of interest between associ- vestors. ations. Experience in Rumuruti Forest suggests that the In Rumuruti, an active Community Forest most promising areas for investment will lie in Association (CFA) was created through the per- farm forestry and new plantation initiatives on sonal drive of the chairman and a few individuals. land outside the main forest area, and a partner- The CFA succeeded in preparing a detailed man- ship approach led by the CFA within the forest. agement plan for Rumuruti. Despite the enthusi- Educational training programs and ecotourism asm of the community, there is reported to have offer some potential in this area. been only limited support and response from the With proper rules and regulations, most stake- DFO. Also, although only one CFA exists in holders will gain from the implementation of the Rumuruti, this does not eliminate aspects of local act. However, the case study of Hombe Forest politics entirely. clearly shows that small-scale sawmillers will lose out because of capital requirements and ef�ciency. KFS as custodian of the forest will act as the “big brother.� In the absence of community cohesive- ness, local communities will also lose out in certain areas because the KFS may not enter into any part- nership with community associations that are not strong and representative. National and Local Situation Assessments 29 Table 3.6 Opportunities for Investment in Hombe Forest Opportunity Investors Timber production Timber companies, private saw millers, community managers, KFS (10,000 m3 per year at K Sh 1,400/m3) Fuelwood from plantations Communities Shamba rent Community-KFS partnership Grazing licenses (cattle and sheep) Community-KFS partnership Grass harvesting, beekeeping Community-KFS partnership and local groups Ecotourism Private sector and communities Water catchment management Community-KFS partnership Carbon trading Community-KFS partnership Bamboo and other non-timber plant species Community-KFS partnership Source: FRR 2007. 4 Priority Areas The considerations identi�ed in the national and local situation as- sessments and key issues identi�ed through consultations (see Box 4.1), indicated three broad priority areas for successful implementa- tion of the Act: • Strategic management and planning of the Kenya Forest Service (KFS) • Enabling community participation and bene�t sharing • Enabling investment in the private sector Most actions can be pursued under one of these three principal areas. Some policy and action recommendations, however, have im- plications for more than one of the three areas. Elements of strategic planning and management of the Kenya Forest Service include, among other things: • Enabling proper governance (including transparency and ac- countability) of the KFS, through – a transparent process for appointing both the Board of Directors and the Director of the KFS – approval by parliament of an updated Forest Policy as soon as possible – establishing an interinstitutional committee up to ensure ef- fective coordination of forest law and other natural resource legislation – developing an enforcement strategy establishing an interna- tional standards compliance committee within the KFS – annual audits and mid-term review of the strategic plan and associated business plan – external supervision of transparent procedures for staff ap- pointments • Ensuring proper strategic planning of the forest resources of Kenya by – formulating a strategic plan that clearly states the role of plan- tations in contributing to sustainable use of forest resources – drafting a business plan for KFS and annual reports. As men- tioned earlier, the business plan should be revised on a peri- odic basis along with the strategic plan, and be subject to annual audits – preparing a manual and guidelines for preparation of forest management plans 31 32 Strategic Environmental Assessment of the Kenya Forests Act 2005 Box4.1 Key Issues Identi�ed through Consultations based on Situation Assessments • Providing adequate funding for the KFS • Securing independence of members of the • Preparing forest management plans KFS Board • Developing partnerships with registered CFAs • Protecting water catchments • Improving staff morale • Achieving ecosystem management • Achieving effective community participation • Appointing an independent Director of the • Providing incentives KFS on merit • Safeguarding the interests of customary users • Setting up an effective and fair system of • Selecting appropriate forest conservancy areas concessions • Upgrading management of all forests • Protecting the user rights of CFAs • Establishing joint management of plantations • Developing the role of NGOs • Achieving transparency in management • Dealing with charcoal production and agreements transportation • Securing independence of the KFS • Establishing the KFS Source: FRR, 2007. • Realizing the economic value of these re- Community participation and bene�t sharing which sources for the nation, by includes: – developing a national forest data bank • Ensuring that all forest communities, and – preparing a framework for the provision of communities adjacent to forest areas, are incentives (including incentives for poten- properly involved in decision making and im- tial losers under the new act and incentives plementation activities as per the new Forests for investment through national subsidies Act. This would require: and tax breaks) – an inventory of existing community partic- – a clear policy brief on the role of farm ipation processes in Kenya; forestry in the new Forests Act and how it – preparation of guidelines on the establish- can contribute to the sustainable use of for- ment of CFAs est resources – pilot studies on guidelines for Community – prioritizing promoting restructuring of the Forest Association (CFA) formation, part- forestry industry and raising overall stan- nerships, and management of different for- dards. It is recommended that a forest in- est types should be undertaken dustry forum be established to promote best – a study reviewing how arid and nonmoist practice in Kenya forests can contribute to poverty reduction – establishing staff training programs to • Developing a policy on how women and ex- cover areas of activity and responsibility cluded groups will be engaged in community that are new to the KFS forest associations. This would also include: • Achieving effective �nancial management – developing rules to ensure fair election and and regulation of the forest sector through representation of CFAs on area conserva- – guaranteed �nancial support for the KFS tion boards from the government set on a tapering scale – a capacity-needs assessment should be un- over the period required for KFS to be �- dertaken to establish what skills are needed nancially viable by CFAs – identi�cation of external funding sources that can cover projected shortfalls Priority Areas 33 • Equitably sharing the costs and bene�ts of the – Rules and regulations should be prepared forest sector among communities, private sec- to ensure incentives to private forest owners tor, and government. This will require to deliver wider bene�ts to communities – clear and transparent accounts showing the living adjacent to forests are in place. annual income and expenditure of individ- – Prepare training aids on the model agree- ual forest areas, and the income attributed ments for communities and training work- to each CFA shops for all registered CFAs and private – preparation of guidance notes (in local di- sector investors alect) on community bene�t sharing of dif- • Improving transparency and accountability ferent activities of investment activities. This will require – a study on how to arrange payment for en- – Developing model agreements where rights vironmental services and valuation of and responsibilities of different parties and ecosystem services products are clearly laid out • Protecting indigenous and customary access – The KFS develop criteria, standards, and and use of forest resources. This will require, guidelines to indicate what conditions will amongst other things, constitute inadequate management of local – clari�cation regarding whether community authority and private forests. council and trust land in arid and semi-arid – All contracts, concessions, royalty agree- areas (making up 80 percent of Kenya) will ments, and other licenses and leases should be classi�ed as forest and access for grazing be published once the terms have been livestock will be restricted under a “con- agreed on. ventional� approach to management plans – Clear rules and regulations are required for – A charcoal regulatory framework should be management of private forests. prepared with speci�c standards and a cer- – Provision of a clear regulatory framework in- ti�cation process. cluding Environmental Impact Assessment • Enabling equitable and fair partnerships. This (EIA) and other evaluation tools that are �t should include for purpose and do not impose an unaccept- – preparation of pilots on different types of able burden on industry. partnerships for management of plantation forests CONSIDERATIONS FROM THE Enhancing investment in the forest sector helps en- sure the right mix of public and private investment LOCAL SITUATION ASSESSMENT to enable the sustainable management of the forest The local situation assessment provide some im- sector, which contributes to the national goal of portant considerations to each priority area. poverty reduction. This will involve • Creating an enabling environment for private Strategic Planning and Management of KFS investment (both corporate and community) Serious attention needs to be given by the KFS and in the forest sector. This will require its new joint partnerships to proper recording of as- – KFS to undertake a review of training pro- sets, income, and expenditure starting with the grams with a view to introducing and sup- smallest enumeration area (which is likely to re- porting programs that are directed at main the forest station). manufacturing and marketing of timber There is a clear need to simplify responsibilities and non-timber forest products. for management of watersheds, forest areas under • Enabling and strengthening partnerships. dual gazettment, and management for biodiversity – Each of the forest management plans and the country’s gene pool. This highlights the im- should include an investment strategy that portance of NEMA’s role and the need for harmo- should be worked up jointly by representa- nization of the activities of different ministries and tives of the affected CFAs and private sector lead agencies. organizations. 34 Strategic Environmental Assessment of the Kenya Forests Act 2005 Greater cooperation is required between gov- come and expenditure over a time horizon relating ernment agencies in developing strategic plans, to the forest rotation cycle. and competing objectives for land managed under It can be harder to develop the economic re- different types of legislation must be resolved at sources of a forest that is largely composed of in- the national level (for example, the competing ob- digenous trees rather than plantations that offer an jectives between KWS and KFS). immediate return. In such areas it, therefore, may Management plans need to be prepared specify- be appropriate to focus on establishment of farm ing the long-terms goals and the means of achieving forestry in the surrounding region. This would fa- these through phased programs of development. It cilitate short term returns while also assisting to re- is important that these plans are owned by local duce pressures on indigenous forests. communities so that the tendency for local politi- A major challenge for the private sector will be cians to exploit forest resources for short-term gain to show proper understanding of community can be minimized. needs and a willingness to work in true partner- It is important to transfer �nancial control from ships with community associations. Any future district administration to the new KFS in order to plans to involve the private sector speci�c forests remove a major obstacle to more effective and ef�- will need to be developed within the context of a cient forestry practice. detailed management plan and legal agreement that guarantees that a fair proportion of the bene- �ts arising from sustainable timber production are COMMUNITY PARTICIPATION returned to the communities, and that the commu- AND BENEFIT SHARING nities can influence which areas and stands of trees are felled in any given time horizon. The existence of multiple CFAs may create real dif- The critical ingredients for securing effective �culties for the new KFS in deciding how to work partnerships and individual investments will lie in effectively with the different groups and in devel- providing: oping effective legal partnerships. Equitable distri- bution of bene�ts to communities may be hard to • clarity about the long-term aims for manage- achieve where there is a multiplicity of associa- ment of the Hombe Forest resource, tions. • positive incentives to take risks with capital in It is essential that clear guidance be given to advance of returns, local communities and other agencies about the po- • strong and unambiguous rules and regula- tential that forestry offers to an area like Hombe tions, over the time scale of 15–20 years and/or the min- • con�dence that political interference and imum time scale for planning a single rotation of “changing the rules of the game� is a thing of forest plantations. the past, • trust between partners and effective ways of resolving any disputes that do arise, and INVESTMENT IN THE FOREST • assurances that legally binding agreements SECTOR will be honored by all parties. Investment needs to be made for a forest station to Potential losers under the new legislation in- become self �nancing. In addition, greater empha- clude small-scale private operators and investors sis needs to be given to resource assessment and who do not have the advantages of economies of management and to ef�cient revenue collection. scale. However, this problem could be overcome Every forest district would bene�t from construct- through promotion of appropriate incentives for ing a simple business plan showing projected in- small and medium enterprises. 5 Scope for Action The priority areas identi�ed by the SEA reflect concerns that have been raised regarding Kenya’s forest sector for more than a decade. For example, the Kenya Forestry Master Plan (KFMP), produced by the Ministry of Environment and Natural Resources in 1994 (MENR 1994a) presents the threats posed to Kenya’s forests and the need for effective planning and management of these resources. Unfortunately, few of the proposals and recommendations of the Plan were acted on by the government at that time, and many of the problems, including illegal logging and excision of forest areas, have, over the course of time, become more severe. Essential elements of the KFMP, however, have now been translated into the draft Forest Policy and new Forests Act 2005. Part of the role of the SEA has been to explore the impediments standing in the way of achieving the goals, aims, and objectives of the new act and to suggest priorities for immediate action that can be in- corporated in the road map already prepared by the Forest Reform Committee. In line with its objectives, the SEA has, for example, iden- ti�ed that because of political inertia, corruption and mismanage- ment virtually no concrete measures have been taken to rationalize Kenya’s forest sector for almost a decade until the present govern- ment initiated the current reform process in 2002. There remain several concerns about the potential of the reform process and the commitment of all major players, including govern- ment and donor organizations, to deliver effective solutions. The problems and issues are well known and initial steps have been taken to create an appropriate governance structure for forestry, however several key constraints remain, such as the lack of skills, and capac- ity to deliver results. This chapter discusses scope for action under the three priority areas identi�ed in the SEA, and details speci�c actions.7 The objective is to inform efforts to address those impediments to effective implementa- tion of the new act and to suggest priorities for immediate action. 7 It should be noted that the speci�c actions discussed here were formulated by December 2006. By the time this document was published some of the actions rec- ommended were implemented while in other cases the speci�c action is no longer relevant. The status of speci�c actions (as of early July 2007) is reflected in the pol- icy action matrix in Chapter 6. 35 36 Strategic Environmental Assessment of the Kenya Forests Act 2005 STRATEGIC PLANNING AND Closer cooperation is urgently needed between ministries sharing responsibilities for the same tracts MANAGEMENT OF THE KFS of land; for example, forests located within water Various elements to strategic planning and man- catchments, which are particularly important for agement of the KFS are detailed below. their biodiversity. Close collaboration with the Ministry of Lands and Housing is also a priority in order to address resettlement issues. Recent legisla- Governance tion dealing with natural resources (Environmental Independence of the KFS, the Board, and its Director. Management and Co-ordination Act [EMCA] 1999; The Forests Act 2005 introduces major reforms but Water Act 2002; Forests Act 2005) shares a common concerns remain among SEA stakeholders that understanding of the need for holistic planning to these may not be suf�cient to prevent manipula- protect and enhance the environment, creating op- tion of the Board and Director for political motives. portunity for improved coordination. The new leg- Measures should be taken to ensure that the Kenya islation moves beyond reliance on Memoranda of Forest Service (KFS) Board should be independent Understanding. The latter have largely failed in the of government and board members and the past as the basis for agreeing on the actions to be Director should be able to discharge their functions taken by the constituent authorities. and duties without fear of political pressure. The political process should play a proper part in de- termining future forest policy from the national to Accountability and Transparency the local level, but this activity should take place Inventory of Kenya’s Forests. The new remit of the through democratic planning involving the KFS, KFS is broader than that of the Forest Department registered community forest associations (CFAs), (FD) and it is essential that the new service should and the private sector. have proper information and data on the nature Reducing political interference is a key aspect to and distribution of the various forest types in this independence. The new KFS provides a vehi- Kenya including dry land forests, local authority cle for avoiding or reducing such pressures. It, forests, and farm forests as well as indigenous for- however, will not be immune to attempts by polit- est, industrial plantations, and coastal and river ical interests to channel policy or planning deci- corridor forests. Inventory of Kenya’s forests is a sions in particular directions at the conservancy priority as the last detailed inventory was under- area or the local level. Politics should not be al- taken in the 1980s under the Kenya Indigenous lowed to sidestep or ignore established manage- Forest Conservation Programme (Wass 1995). ment plans, or put undue pressure on of�cials to Strategic plan for the forest sector. KFS must re�ne make decisions that are contrary to such plans. its strategic plan to reflect the organization’s aim, To facilitate transparency, the appointment of vision, mission, and organizational structure. A the most senior post holder (the Director) should �ve-year strategic plan (as adopted by KWS) is ef- be secured through open advertisement. An inde- fective ways of ensuring public bodies remain in- pendent interview panel to ensure the decision is dependent and accountable. The plan should clarify based on merit should be used. who are seen as the main customers and what result Cooperation among key agencies and departments areas these customers can expect. Each result area needs to be strengthened. There is a clear need to en- should have goals, a rationale, strategies, and ac- sure integrated management of forest areas that are tions associated with each goal, the outputs associ- also important water catchments, have high biodi- ated with each strategy or action, and some key versity value, and are promoted for ecotourism performance indicators (for accountability). and other purposes. Discussion with the principal The strategic plan should de�ne the volume of government ministries and agencies has revealed a timber to be grown from plantations and the most common concern that indigenous forest has been favorable areas for planting. The development of greatly reduced in area and what remains of these this strategy should involve all key stakeholders. natural areas should be protected from unaccept- The private sector should be encouraged to put its able levels of use. This is linked with the need to ex- own ideas forward, alongside those of the KFS. tend plantations to provide the equivalent of 10 A business plan should accompany the strate- percent forest cover within a realistic time frame. gic plan. The business plan should capture staff Scope for Action 37 requirements, detail the core assets of the service, felling and processing rather than do the work and project the receipts and expenditures associ- themselves. ated with any service and product that the KFS Provide accountability to stakeholders through annual will be providing. reports of the KFS. Open and transparent governance Clear articulation of the role of plantations. and decision making in the new KFS can reduce sus- Historically, the shamba system was used for plan- picion regarding corruption and bribery within KFS. tation establishment. Where this system was This will need to be exercised at all levels from the abused, trees were either not planted or poorly man- Board and Director, through Conservancy Area aged after felling resulting in poor plantation estab- Committees to the individual forest stations. Ways lishment. Under the terms of the act there is room for to facilitate open and transparent processes include considerable uncertainty about the role that will be making public outcomes of bidding process for con- played by industrial and other plantations. tracts or concessions. This would involve disclosing Different models may be envisaged for indus- the �nancial value of all bids, including the winning trial and other plantations, including tender but not necessarily the names of unsuccess- ful bidders. An annual report will help provide the • plantations run entirely on commercial silvi- accountability needed to ensure stakeholders have cultural guidelines for timber production trust in the new system. The annual report should be (sawn logs, poles, pulp, or specialized prod- submitted to parliament and made accessible to all ucts such as veneers or plywood) forest constituencies. • plantations where exclusively commercial ob- Transparency in the new forest management plans. jectives are modi�ed to meet community Forest management plans have traditionally fo- needs (for example, the period of rotation or cused on surveying existing or potential forest the size of individual compartments and areas to establish topography, soil quality, and felling coupes may be altered to achieve other drainage and to determine the distribution of tree land use goals), and species to maximize potential yields within given • plantations managed principally to meet rotation periods. This emphasis on silvicultural community needs. practice will need to be supported in the future Each of the models outlined above has the po- with much greater awareness of non-timber prod- tential to have different effects on the environment ucts, the potential to create new community and and social and cultural conditions of the forest area, environmental services, and the practicalities of and these need to be carefully assessed by sup- harvesting and processing timber to maximize re- porting proper surveys and planting with environ- turns to the community. As such, forest manage- mental impact assessments. This needs to be done ment plans will need to focus as much on the social at the point where the initial management agree- and environmental bene�ts of forests as they do on ment, contract, or concession is negotiated. the timber resource. Preparation of the new gen- From the standpoint of the private sector, the eration of forest management plans will need to be first of the aforementioned models is likely to be carried out on a participatory basis and will re- preferred, although there will be occasions (for ex- quire new skills on the part of forest designers and ample, in managing tea buffer zone plantations) managers. when the second option is viable. Plantations man- aged exclusively for community needs are likely to be less profitable in terms of timber production. FINANCES However, well-managed commercial plantation Funding of the Kenya Forest Service needs to be clari- forests can be designed to provide nature �ed. One of the key objectives behind the new act is conservation and other social bene�ts at the same to reduce the dependency of the forest service on time as yielding sustainable supplies of timber, government funding by empowering the KFS to provided the species chosen and the period of ro- collect revenues directly from plantations for tim- tation are carefully controlled. This requires de- ber harvesting and by enabling the service to tailed silvicultural and scienti�c knowledge on the charge for environmental services and its own pro- part of the forest manager. Similarly, there may be fessional advice through extension services. In circumstances where it may still be preferable for addition, the establishment of a Forest Manage- a CFA to hire competent contractors to undertake ment and Conservation Fund is proposed (under 38 Strategic Environmental Assessment of the Kenya Forests Act 2005 s.18.), which would draw its income from levies on a wide range of new skills and expertise, in addition bene�ciaries. It should be noted that similar to those held traditionally by state foresters. It is im- arrangements were introduced by the EMCA to portant that recruitment is open to all potential can- support the National Environmental Management didates and is not restricted to employees of FD. Authority but funds have still to be secured. Analysis of projected expenditure and revenue Information and Data (see box 3.5) indicates that the KFS could reach a break-even state within four to �ve years of its es- Need for national forests data bank. There is an urgent tablishment, but that in the early years there may need to address the lack of data and information be a de�cit of KSh 2 billion a year or more.8 This with respect to the allowable rate of harvesting suggests that major �nancial support will be re- from forest plantations and an accurate under- quired at the beginning of this reform process. standing of supply and demand for timber prod- Without this, it is unlikely that the KFS will succeed ucts. As part of the process of surveying all forests, in meeting its primary targets. Speci�c support for a national forest data bank should be created to the forest sector should be made in the govern- monitor all forest operations and provide base in- ment’s annual budget for the next �ve years on a formation for management plans. The data bank tapering scale, based on the projected gap between should be publicly accessible. expenditure and revenue. A major initiative is being launched under the The concept that private owners will pay for ad- forest reform road map to build up an inventory of vice from the KFS and extension services will re- all state forests. This can provide a valuable contri- quire a high standard of supervision of revenue bution to a national strategic plan, but its primary collection and then ensuring that the money is purpose is to assist in management of individual available to run the service. There is need for forests. The information is likely to take too long to greater clarity on how this will work. process to be of immediate value for strategic plan- ning. Accordingly, a priority is to conduct a rapid review —at the national level—of the principal for- Staf�ng and Human Resources est and woodland resources. This information can Creation of the KFS requires a balance to be struck be interpreted directly from satellite imagery between seeking to ensure that all the necessary pro- rather than detailed mapping on the ground. cedures have been put in place to implement the A map of national forest resources should be Forests Act, and initiating the reforms as soon as combined with other relevant data in a geographic possible by launching the new KFS while running information system (GIS) data bank for use in plan- the risk that some of the provisions of the new law ning the allocation of national resources. Other rel- will be ineffective. Creation of KFS will allow the evant data include information on silvicultural new service to develop innovative solutions under practice, species distribution, timber potential, the leadership of a new Board, rather than relying on competing land use, staf�ng and equipment needs, the outgoing administration to rewrite its own pro- training and capacity building, and level of com- cedures. The use of management consultants should munity and private sector engagement. The neces- be considered to prepare and supervise transparent sary skills to create this GIS already exist within the procedures for staff appointments. research organizations represented among the SEA Staff morale needs to be maintained. Declining stakeholder group. morale among existing staff is probably an in- evitable consequence of an extended period of un- certainty about the future and the procedures for 8 There are several assumptions underlying this projection as appointing staff to the new KFS. Staff should be kept detailed in Appendix 7.For example, it is assumed that the total plantation area available for harvesting is 120,000. The informed about the reform process and given early calculation uses a conservative estimate of annual area for advice on the options open to them (from applying harvesting based on rotation period for speci�c species and for new posts, taking early retirement, or being re- optimal yields. Other calculations often use mean annual in- trained). This can remove unnecessary stress. crement and assume that the initial plantation area available for harvesting is 50,000 then 90,000 and eventually 120,000 Creating a new group of professionals with new skills (World Bank, 2007). Using such estimates, the period prior to will be required. The new KFS will require staff with KFS �nancially breaking even is longer. Scope for Action 39 Pilot studies. The SEA has focused attention role of the EMCA 1999 vis-à-vis the Forests Act is largely on natural forests through the case studies important. EMCA 1999 constitutes the overarching of Hombe Forest and Rumuruti Forest. Natural environmental legislation and could in theory be conditions and the speci�c interests of communi- used to override agreements reached between com- ties and the private sector are likely to be very dif- munities, the KFS, and the private sector. The Trusts ferent in other types of forest environments. It Act, Local Authority Act, and Chiefs Authority Act would greatly assist the development of guidelines all pose potential conflicts of interests or of power re- for the establishment and engagement of commu- lations. For example, the Chiefs Authority Act nity associations, capacity building on community grants chiefs the right to decide actions within a for- issues, and the preparation of forest management est without the need for consultation or considera- plans if a series of studies of local context were un- tion of the needs of different sections of the local dertaken for other forest types. community. Similarly, local authorities can intro- duce their own secondary legislation and bylaws without reference to other authorities. Legal Framework National forest policy. The main emphasis of the Forests Act 2005 is on setting up the new KFS and ENFORCEMENT securing effective partnerships between the ser- Numerous causes were reported for weak enforce- vice, registered CFAs, and the private sector. The ment at the local level, including widespread act has less to say about the role of forestry within bribery of forest guards, lack of senior support for the Kenyan economy or the need to develop long- junior of�cers, the practical dif�culties of collecting term strategies for managing forestry in the na- evidence in the �eld due to inadequate equipment tional interest. (vehicles and telephones), unsympathetic response At an international level, globalization is having from local police (who may also be in the pay of of- a signi�cant effect on timber trading. Timber prices fenders), and inadequate �nes or sentencing from have fallen in real terms over a number of years, and the judiciary. Enforcement relates not only to the there has been a tendency for multinational compa- quality of management and proper levels of train- nies to absorb smaller operators to gain the bene�ts ing and remuneration of staff but also to removing of economies of scale. Companies in countries such the underlying causes of illegal activity. as Finland, New Zealand, and Japan have interna- Effective community partnerships can assist tional contracts for the supply and purchase of saw with enforcement through policing of their own ac- logs, pulp, and paper and investment policies of in- tivities and achieving real bene�t sharing among ternational operators are based on long-term assess- different groups, including young people and the ments of the commercial viability of timber disadvantaged in society. An enforcement strategy production in individual countries around the that includes partnerships with communities world. These and other regional economic influ- should be put in place. ences within East Africa will influence how the com- mercial sector decides to operate in Kenya under a more liberalized and flexible regime. ENABLING COMMUNITY The Government of Kenya needs to review its PARTICIPATION AND BENEFIT own policies toward timber imports and exports SHARING and its requirements for sawn timber, plywood, ve- neers, pulp, and paper manufacture. A view needs Enabling community participation and bene�t shar- to be taken about the types and quantity of timber ing requires concrete measures as discussed below. products that are required for home consumption and where these will be grown. Community Participation Harmonization of legal framework. Clarifying the re- lationships between the new Forests Act, with its Increasing public participation in forestry issues. The emphasis on community involvement, and other Forests Act 2005 emphasizes the need to establish relevant legislation will be important for determin- CFAs. While the new act provides for communities ing the roles of CFAs. For example, clarity on the to be engaged in forest management, often only a 40 Strategic Environmental Assessment of the Kenya Forests Act 2005 few people within communities have the capacity basis, from those of vegetable farmers. Different to engage in the process. These individuals may species of indigenous dry land trees need to be con- have speci�c interests and agendas to promote sidered for plantation use in addition to the conven- rather than those of the less articulate and in- tional pine and eucalyptus varieties. In drier areas formed groups. Recognizing this, the operational there is also scope to exploit other non-timber prod- rules of the new Forests Act must address the need ucts, including gum arabic. Recognizing the varied to strengthen capacity in communities, and pre- uses of different forest types, flexibility will need to vent elite capture. be applied in rules and regulations governing the While focused on CFAs, the KFS should also be production of management plans. responsive to the wider voice of public interest throughout Kenya in forests. Citizens of Kenya Representation of Community Forest who do not reside in or near forests often have a Associations deep interest in forests and the environment be- cause decisions regarding resource use affect their Forest management like any other business enter- lives. The programs and activities of the KFS prise, requires strong leadership, clear objectives, should, therefore, be publicly accessible. good staff structures, and economic, marketing, Existing participation processes in communities and �nancial skills, but it also requires technical should be enhanced. Prior to the new Forests Act, some knowledge of silvicultural practice. There are prin- communities were effectively managing forests. For ciples for registering CFAs in the act and these example, in north of Kenya many communities lost should be followed to ensure that each association their cattle during a recent drought. In Loima, how- is properly constituted with articles of association, ever, where the community manages its local forest, elected of�cers, and formal accounting and audit- households did not suffer loss of cattle. The chal- ing procedures. There is likely to be a substantial lenge is preventing implementation of the new leg- gap, however, between the aspirations of many as- islation from replacing these effective organic sociations to manage areas of forest in partnership community-based forest management initiatives with the KFS or the private sector and their capac- with standard models that have not necessarily been ity to contribute appropriate management skills. To proven to work. An inventory of existing commu- prevent CFAs from becoming “paper associations� nity participation processes should be undertaken steered by privileged few and/or KFS of�cers a ca- and best practice identi�ed. pacity needs assessment should be undertaken to In Kenya many tribes attribute cultural values to establish what skills are needed by CFAs and what forests, using them for different purposes and type of technical support needs to be provided. needs. While the new legislation provides for this Ensure participation of women and excluded groups. continued use, a formal application is required to Traditional gender roles have inhibited the partic- register and authorize existing practices. Not all ipation of women in forestry development. In communities or local groups will have the neces- particular, women and other excluded groups are sary capacity or support to enter this application often marginalized in forest and tree resource use process and so may be excluded, unintentionally. and management. The case study and �eld visit The aforementioned study inventorying commu- provide evidence that women are more likely to nity participation should also identify barriers to participate in group based initiatives relating to participation. their daily activity, such as beekeeping or medici- Increase emphasis on forests that the poor depend on— nal plant gathering rather than choose to join pol- arid and nonmoist forests. There are differences in icy formulating and decision-making committees characteristics and uses of the different forest types working on more strategic dimensions of a forest in Kenya. In the drier areas of the country, forests are management plan or harvesting concession. CFA relatively open without closed canopies. These areas management committees should take steps to in- support extensive livestock grazing as well as pro- clude women and excluded groups by making ac- vide timber for building, �rewood, and charcoal. tive participation accessible and worthwhile. Management techniques for dry land forestry are The status of customary users vis a vis CFAs distinct from those for montane forest, and the de- must be addressed. People who have traditionally mands of pastoralists also vary, often on a seasonal made their livelihoods within forests are entitled to Scope for Action 41 collect forest products. Distinguishing between le- use if they can secure larger honey harvests from gitimate users with customary rights and others the right to keep stocks in speci�c areas of the for- who claim the privilege can be a contentious and est. Enforcing such arrangements, however, may extended process, to the detriment of both social be dif�cult. harmony and the forest environment. Questions arise regarding the revenue gener- While the law takes this factor into account for ated and how the pro�ts are distributed by the those living in or near the forests, there are many CFA. Options include surplus being spent entirely Kenyans who do not fall into this category yet use on forest improvements, shared among member forest resources. How the interests and/or rights of groups within the association (such as the graziers these people will be protected vis a vis registered or beekeepers), or dispersing pro�ts more widely CFAs should be clari�ed. to nonassociation members in the community. There is also a concern that the implementation Clarity on these issues is important. of the new act is likely to result in increased prices In discussions on bene�t sharing it should be of forest products, which may affect poor people’s noted that unless speci�c considerations are made, access to these vital resources as well as create a the main winners under the promotion of joint part- disincentive to abide by the law. The concern is that nerships for forest management are seen to be those implementation of the act marginalizes forest de- sections of communities concentrating on water pendent poor who are excluded by CFAs. The eco- management, honey production, harvesting of med- nomic impacts of the new act on these resource icinal plants, and charcoal manufacture. Principal users’ needs to be clear before implementation losers are seen to be pastoralists. Clari�cation is re- takes place. quired as to whether community council and trust land in arid and semi-arid areas (making up 80 per- cent of Kenya) will be classi�ed as forest and access Bene�t Sharing for grazing livestock will be restricted under a con- A major area of interest in community issues re- ventional approach to management plans. lates to bene�t sharing, especially among disad- Arranging payment for environmental services and vantaged groups in society. valuation of ecosystem services. The new Forests Act Identify the full range of potential community bene- has the potential to generate new sources of income �ts and how these will be shared. The new act has the by allowing the KFS and potential joint partnerships potential to ensure the community bene�ts more to levy charges for preserving forest ecosystems and directly from forests. To fully exploit this potential water catchments. An element of charging already communities must know how to engage in forest occurs where water impoundment takes place management, and professional foresters should be within or immediately outside afforested catch- well versed in non-timber product harvesting and ments and water user associations are charged for marketing, which often form part of the informal the right to abstract given amounts of water. economy. All parties, including the KFS, CFAs, and It will be necessary to quantify the nature and the private sector, will need to become more value of environmental services and establish ap- knowledgeable about the organization and admin- propriate scales of charges and then to decide who istration of ecotourism; livestock grazing; fruits, should pay the costs and how the revenue is to be roots, and medicinal plant gathering; and the pro- collected. Potential environmental services that can motion of small-scale timber and non-timber prod- be monetized need to be identi�ed. Existing efforts uct marketing to achieve true bene�t sharing. to facilitate such payments for hydropower and Practical dif�culties will arise in collecting rev- carbon sequestration should be used as a basis for enue for these activities and in deciding who lessons learned. should pay and who should receive the proceeds. Joint management of plantation forests. One of the Arrangements could include, for example, revenue principal aims of the Forests Act 2005 is to encour- livestock owners paying for grazing rights within communal forests because they bene�t directly from stronger, healthier animals that will provide 9 An example of prior work is the study undertaken by the more meat or milk or command higher prices at International Institute for Environment and Development on market. Similarly, beekeepers could pay for forest partnerships. 42 Strategic Environmental Assessment of the Kenya Forests Act 2005 age joint management of plantations by the KFS Training KFS Staff and local communities and by the private sector The standards of professional training, both working in conjunction with CFAs. The practical- through courses and in situ work experience, have ity of such joint management arrangements needs declined in recent years. In addition, there are lim- to be examined as a priority. Appropriate agree- ited opportunities for taking vocational training di- ments and pilot projects building on new and prior rected at small-scale enterprises for wood-based work9 should be the initial step. and non-timber forest product manufacturing and Clear and transparent accounts should be pre- marketing. The KFS should undertake a review of pared showing the annual income and expenditure training programs with a view to introducing and of individual forest areas, and the income attrib- supporting programs that are directed at manufac- uted to each CFA. Guidance notes should be pre- turing and marketing of timber and non-timber pared (in local dialect) on community bene�t forest products. New training programs should re- sharing of different activities. late directly to the forest management plans. ENHANCING INVESTMENT Royalties, Licenses, and Concessions IN THE FOREST SECTOR The majority of private sector companies want to For more than 10 years the forest sector has seen see standard conditions introduced. Private com- virtually no private investment in state forests or panies are keen to see the abolition of preferential commercial plantations because of harvesting royalty arrangements, tax concessions, or special bans. With the exception of timber growing for logging arrangements that are established on a for- pulp and paper production, which has received est-by-forest basis. Open and transparent rules preferential treatment, and farm forestry associ- should be established and published covering all ated with tea processing, most sections of the tim- sectors of the Forests Act. Accordingly, it is unde- ber industry have been in decline. The biggest sirable that new licensing regimes and concessions losers have been small-scale saw millers and their should be drawn up without clarifying the long- employees because most saw mills have been term intentions for charging. Clearly, there will be forced to close. a need with all new procedures to have a trial pe- A priority for the KFS is to revive all private sec- riod and there should be scope for progressive re- tor engagement in the forest sector, including in vision within individual agreements, but lack of growing, harvesting, and processing. For large pri- clarity and detail in initial documentation could vate companies uncertainties about the long-term open the way for abuse as has happened in the past. commitment of government to the forest sector are Model agreements should be prepared with an obstacle to investment. These companies also clear and strong rights and responsibilities of dif- want to see less regulation and control. For small ferent parties and products laid out. All contracts, saw millers the upfront cost to reengagement is the concessions, royalty agreements, and other licenses need to refurbish or replace buildings and machin- and leases should be published once the terms ery that have been damaged through lack of use, have been agreed on, and �nally, training aids damp, and decay. should be prepared on the model agreements for communities and training workshops for all regis- tered CFAs and private sector investors. Business Plans The private sector and communities should be in- vited to work with the KFS in developing each of Incentives the forest management plans within this overall Historically, most attention has been focused on framework of the strategic plan. Each forest man- management of indigenous forests and commercial agement plan should include a business plan that plantations. The emphasis of the new Forests Act on details, amongst other things, the expected com- farm forestry, local authority forests, and other mitment of all participating parties. The plan woodland will require a different type of manage- should also specify how expected returns would be ment intervention and advice, and provision of in- distributed. centives will be more signi�cant than regulations. Scope for Action 43 Proper licensing and inspection procedures will standards are usually the most productive for con- need to be devised to minimize abuse of grant sys- version of standing timber into useable products tems and tax concessions by individual owners and and suffer less from disease and damage. There are, operators. These will take time to set up and admin- therefore, strong commercial as well as social and ister, and will require appropriate levels of funding. environmental grounds for ensuring effective regu- The act makes provision for incentives to be of- lation. It is necessary to develop a clear regulatory fered to encourage new planting and improved framework including Environmental Impact management for both industrial plantations and Assessment (EIA) and other evaluation tools suit- farm forestry. It is clearly in Kenya’s interests to able for this purpose that does not impose an unac- promote the forest sector after the long period of ceptable burden on industry. The KFS should neglect that it has suffered, but the question of develop criteria, standards, and guidelines to indi- where incentives should be used and what type of cate what conditions will constitute inadequate incentives should be offered is complex. management of local authority and private forests. It is likely that there are areas of existing poorly Timber companies, saw millers, and other pro- managed plantation where the opportunities of in- ducers acknowledge the strength of environmental troducing sustainable forest practice should offer concerns but maintain that the industry cannot suf�cient commercial incentive to attract investors. safeguard these interests unless it is given assur- This would include that long-term leases or con- ances about security of supply, which relates to the cessions are provided with appropriate guaran- length of time granted for licenses, permits, and tees. Commercial operators are well placed to concessions. If areas are to be replanted at the con- judge how to manage such forests and to process tractor’s expense, the period for which the contrac- and market the products. There are, however, tor has complete control of the forest land should other areas where the economic bene�ts of com- at least match the normal rotation period for the mercial forestry may be more marginal, especially species being planted. when it comes to promoting forestry in dry land areas. In such situations, positive incentives to es- Technical Assistance and Sustainable tablish pilot projects may be highly appropriate. Use of Forest Resources There needs to be a distinction made, too, be- tween incentives to potential losers from the im- Urgent steps are required to enable restructuring of plementation of the new act and incentives that are the forest sector and enhance standards. KFS must part of national subsidies and tax breaks. enhance its capacity to provide technical assistance Ensuring private forest owners deliver wider bene�ts in key areas such as certi�cation, participation in to communities. Community and environmental or- forest management, wood processing, and pay- ganizations, with interests and investments of time ments for environmental services. At an interna- and resources in the forest sector, fear that a strong tional level, increasing recognition is being given to private sector could ignore environmental and so- forest certi�cation schemes. The commercial oper- cial values. The concern is a return to unsustainable ators represented at the SEA workshops con�rmed harvesting regimes that have decimated forests in that they favor the introduction of forest certi�ca- the past. Rules and regulations are required to en- tion schemes that are properly gazetted and con- sure that incentives to private forest owners deliver trolled and see these as an effective way of wider bene�ts to the communities living adjacent increasing their potential in export markets. to these forests. It is essential that safeguards are The most urgent tasks under the new Forests Act built into the registration process and its subse- are to reestablish effective forest management and to quent monitoring to ensure that private forests are engage CFAs and private investors in silviculture. managed in a sustainable manner. Successful implementation of the Forests Act will depend on the process of consultation, engagement, and capacity building rolled out to embrace forest- Environmental and Other Regulations related user communities across Kenya and recog- Environmental safeguards are often cited as placing nize and respect their different interests. constraints and hampering investment. However, In the longer term, the real value of a revitalized forests that are managed to high environmental forest sector will come from developing down- 44 Strategic Environmental Assessment of the Kenya Forests Act 2005 stream ’ industries based on wood processing, such • Establishing charcoal workers cooperatives as the manufacture of �berboard and furniture and associations making, and the marketing of non-timber forest re- These and other ideas (including the possible ex- sources including plant extracts with culinary, pansion, or more liberal interpretation of Section 4 medicinal and cosmetic properties, such as gum of the act to encourage production of biodiesel and arabic. Further potential exists to promote the en- biomass energy sources) are worthy of detailed in- vironmental services of forests, including water vestigation as part of the forest reform process. harvesting and carbon sequestration in the case of Expansion of farm forestry. Farm forestry is a pre- reafforestation projects. colonial form of land use. The last 15 years has seen Managing charcoal production and transportation. an expansion of this form of land use, as landown- One of the biggest challenges under the Forests Act ers have made their own assessments of the poten- will be to introduce a new regime for the legalized tial risks and returns of planting farm land with production, marketing, and transportation of char- trees. A strong market for farm forest timber has coal from sustainable forest resources. All of these been assured, given the severe restrictions on log- operations are currently illegal in Kenya. The gov- ging from other sources. This experience has gen- ernment has strongly advocated adoption of alter- erated a large amount of interest in farm forestry, native energy sources, including the use of lique�ed especially in drier areas where agricultural yields petroleum gas and solar energy, but it is recognized are low. that these and other clean fuels are not available in While farm forestry does represent a very posi- suf�cient quantities or at prices that could be sup- tive way forward, especially in areas that were for- ported by the vast majority of the population. At merly covered by forest, it is important that proper present the illegal informal economy in charcoal is advice is developed by the KFS to assist small worth around K Sh 32 billion a year, equivalent to growers, including the introduction of business that of the tea industry. At least K Sh 5.2 billion planning. An important element of this advice will could be raised in taxes when these processes are le- relate to appropriate tree species because some, galized under the Forests Act (ESD 2005). like eucalyptus, have very high water demands Charcoal production from indigenous forests and their use needs to be carefully controlled, es- and arid woodland results in widespread environ- pecially in water catchments and interpreting mar- mental damage, and producers taking timber from ket price fluctuations and trends. While KFS government forests are reported to make charcoal technical support will be important, the service in the most destructive way. Some practical rec- should minimize requirements for permits to grow ommendations for developing a sustainable trade and fell trees on the small to medium scale. Clarity in charcoal include (ESD 2005): on the role of farm forestry to the overall objective • Packaging and marketing sustainable char- of sustainable use of forest resources should also be coal in a distinctive way provided. • Introducing buffer zones for charcoal pro- Urgent steps are required to promote restruc- duction to protect ecologically sensitive areas, turing of the forestry industry and to raise overall and indirectly help to reduce human-wildlife standards. It is recommended that a Forest conflicts Industry Forum be established to promote best • Introducing better regulations and guidance practice in Kenya. on land use change 6 Policy Action Matrix An important conclusion from the Strategic Environmental Assessment (SEA) is that a country’s forestry resources are protected and developed most effectively where government maintains strate- gic control over forest policy and management. This includes the ef- fective cross linkages between forestry and other land use and environmental issues. The day-to-day control and regulation should be placed in the hands of an independent agency. It is equally important that the management of forests, harvesting, marketing, and production of both timber and non-timber products should be carried out by the most effective and economic systems that can be devised. These should involve the private sector, com- munity organizations, and, where appropriate, public sector partners working either individually or in combination. The recommendations for achieving these ends are listed below in the form of a policy action matrix to support the implementation of the new Forests Act 2005. These recommendations bring together the �ndings from the analytical work and extensive stakeholder consul- tation undertaken in this SEA As indicated earlier, three broad priority areas for action have been identi�ed: • Strategic planning and management of the Kenya Forest Service (KFS) • Enabling community participation and bene�t sharing • Enabling investment in the forest sector. The policy action matrix summarizes all the key �ndings from the SEA and breaks down these priority areas into more speci�c issues identi�ed together with the necessary actions required to ensure the issues are addressed. The status of the actions as of June 30, 2007 is also listed in the matrix. The more speci�c policy actions listed in this matrix have been identi�ed, prioritised, and endorsed by stakeholders in Kenya’s for- est sector who participated in the SEA.10 The recommendations were subsequently discussed and amended as appropriate in separate dis- cussions with the Forestry Reform Secretariat and stakeholders at the third SEA workshop. The �ndings have been presented, discussed, 10 Details of the process are available in the Appendix 45 46 Strategic Environmental Assessment of the Kenya Forests Act 2005 and agreed on with the Chairmen of the De-linking sharing, and �nally, the priority area on enhancing and Forest Reform Committees. investment in the forest sector, 17 out of 18 recom- The majority of stakeholders involved in the mendations gained over 80 percent support. SEA process indicated a high degree of support for If followed, the matrix will help to ensure that the recommendations in the policy action matrix. implementation of the new Forests Act is environ- Participants indicated this support during the third mentally, socially, economically, and institution- and �nal workshop during which they were issued ally sustainable. All actions should build on a short questionnaire and asked to give a response existing efforts and initiatives underway (or re- at the end of the discussion on each policy topic in- cently completed) in each area rather than dupli- dicating their level of support for the recommen- cate ongoing or past efforts. dation. A total of 32 questionnaires were The government of Kenya are seen as the over- completed and analyzed (see appendix 9 for de- all custodian of the SEA. The matrix should be seen tailed analysis). In summary for the �rst priority as a “living� matrix, and be considered a work in area of planning and management, 15 out of 17 rec- progress that is continually reviewed and updated ommendations scored over 80 percent support as appropriate. To this end the matrix will be made from stakeholders. 12 recommendations gained accessible to all key stakeholders and efforts will be over 80 percent support for the second priority area made to periodically update the status of speci�c enabling community participation and bene�t actions in the matrix. Policy Action Matrix 47 Table 6.1 Policy Action Matrix Milestones Indicative list Issue (including time- of stakeholders Expected Policies and actions based milestones) to be involved outcomes Status PRIORITY AREA 1. STRATEGIC PLANNING AND MANAGEMENT OF FORESTS IN KENYA A. GOVERNANCE 1. Independence of the KFS, the Board, and its Director 1.1 An open and transparent system 1.1.1 Approved Forest Reform Transparent Appointments were for appointment of members of the system for Sector and open made based on Board, (including both departmental and appointments Committee recruitment gender (at least minister-nominated members) sho\uld in place by (FRSC) process 30% women), be developed (with reference to section February 2007 professionalism and 6 of the Forests Act). regional balance 1.2 It is recommended that the interim 1.2.1 Process of KFS period between formation of the Board appointment of a and appointment (by the Board) of a Director to begin Director should be no more than one year. by July 2007 1.3 It is recommended that the Board 1.3.1 National Ministry of Transparent Position of the should appoint a Director to the KFS fol- advertisement Environment and open Director and other lowing national advertisement of the post for the post of and Natural recruitment six senior staff and selection of the successful candidate Director of KFS Resources process advertised in local by the full Board. The Board should con- by June 2007 (MENR) and daily newspapers sider retaining a reputable management KFS Board in June 2007. consulting �rm (for example, PricewaterhouseCoopers, KPMG, or The Board is relying Deloitte) to conduct the preliminary on a change assessment of candidates, manage the transaction advisor interview process, and advise the Board in the selection on the candidates’ strengths and and not a weaknesses. consulting �rm 1.3.2 Appointment KFS Board Credibility Interviews planned by the Board of a of KFS for July 2007 Director to KFS Director by by July 2007 stakeholders 1.3.3 KFS launched MENR Stakeholder The KFS was by May 2007 con�dence launched on established 10th May 2007 in the new organization for forest management 2. Cooperation with other key agencies and departments needs to be strengthened 2.1 Existing arrangements for interinstitu- 2.1.1 Environmental KFS, KWS, Mini- Harmonized tional debate and cooperation should be Council to be stry of Water and management strengthened to resolve conflicts in admini- given expanded Irrigation, Ministry of forest stration that currently prevent the best use mandate and of Lands, Ministry resources of forests that are gazetted under more than increased capacity of Local Govern- one area of legislation. It is recommended by (date to be ment, Ministry of that this be achieved by strengthening the agreed) Planning and Na- role of National Planning processes and tional Develop- speci�cally Provincial and District Envir- ment, Ministry of onmental Committees. Agriculture, Mini- stry of Finance, MENR, and NEMA (continued) 48 Strategic Environmental Assessment of the Kenya Forests Act 2005 Table 6.1 Continued Milestones Indicative list Issue (including time- of stakeholders Expected Policies and actions based milestones) to be involved outcomes Status B. ACCOUNTABILITY AND TRANSPARENCY 3. A strategic plan for the KFS 3.1 The draft strategic plan prepared by 3.1.1 A �ve-year KFS, private An opera- The draft �ve the Forest Department (FD) should be strategic plan to be sector, civil tional KFS year plan reviewed and �nalized by the KFS at the revised and society strategic currently being earliest opportunity. This plan should adopted by the organizations plan used will go make provision for each of the forest KFS by June 2007 through a peer development programs. The strategic plan and revised every review by should include KFS’ aim, vision, mission two-and-a-half September 2007 and organizational structure. Each result years area should include a goal, rationale, strategies and actions associated with each goal, the outputs associated with each strategy or action, and some key perfor- mance indicators (for accountability). An associated business plan should capture staff requirements and detail the core assets of the service and the projected receipts and expenditures associated with any service and product that the KFS will be providing. 3.2 The KFS Strategic Plan should take 3.2.1 KFS Strategic KFS, Embassy of Improved It is anticipated account of, and give effect to, the Kenya Plan incorporates Finland, Kenya strategic that the KFMP Forest Master Plan (KFMP), which is being �ndings of KFMP Forestry Research plan will have been updated with assistance from the donor (as soon as KFMP Institute (KEFRI) updated by community (possibly Embassy of Finland). is updated) 2010 4. Clear articulation of the role of plantations 4.1 The strategic plan should clearly state 4.1.1 Strategic plan KFS, farmers, Stakeholders the role of plantations and farm forestry has section on role private sector understand in terms of the sustainable use of forest of plantation the role of resources. forestry plantations plantations and farm forestry and farm forestry in achieving sustainable use of forest resources 5. Provide accountability to stakeholders through annual reports of the KFS 5.1 The Director should be mandated to 5.1.1 Annual report, Director, KFS KFS annual The �rst annual prepare a business plan (link with a stra- including business progress report and tegic plan) and annual reports on behalf plan to be ready by reports and business plan of the Board. The annual reports should end of each calen- �ve-year to be ready by con�rm the program for the next �ve years dar year (to link business June 2008 and describing performance by the service with the budgetary plans in against the previous year’s service res- planning). The busi- place. pectively. This internal report should be ness plan should Parliamentary considered by the Board and amended be revised on a peri- committee as appropriate. The approved report, odic basis (possibly endorses including the business plan, should be every �ve years) the plan. printed, presented to a parliamentary and subject to an committee, and publicized in the media. annual audit. (continued) Policy Action Matrix 49 Table 6.1 Continued Milestones Indicative list Issue (including time- of stakeholders Expected Policies and actions based milestones) to be involved outcomes Status 6. Engaging stakeholders in preparing template and contents of the new Forest Management Plans 6.1 The KFS should convene a series of 6.1.1 Forest man- KFS, Local Transparent Draft manual workshops and a national conference to agement manual Conservancy forest and guidelines discuss the draft template and required and guidelines pub- Committees, and management in place. content of new forest management plans lished by December nongovernmental plans in for each state, local authority, and provin- 2007 organizations place cial forest and to agree on the procedures (NGOs) for drawing up and consulting on such plans. Following this development phase, a manual and guidelines should be prepared to illustrate the process. C. FINANCES 7. Funding for the KFS needs to be clari�ed 7.1 Speci�c �nancial support for the 7.1.1 The govern- Government of KFS support First annual forest sector should be made in the ment of Kenya com- Kenya for the next funding provided government’s annual budget for the next mits to funding KFS �ve years for 2007/2008 �ve years based on the projected gap by June 2007 guaranteed as 1.6 Billion between expenditure and revenue. Kenya Shillings This needs to be built into the budget of various sectors including Agriculture, based on the economic recovery strategy for Kenya. 7.2 Budgetary provision to be made for 7.2.1 Funding source Government of Model, Stra- the preparation of Strategic Plan for �rst Strategic Kenya, donors tegic Plan, Plan and Business and Business Plan to be con�rmed Plan achieved 7.2.2 Hold a stake- KFS Funding of holders workshop to KFS con�rmed review implementa- and an imple- tion of the strategic mentation plan by December strategy in 2007 place 7.3 Donor organizations need to coor- 7.3.1 Donors com- Key donors Donor sup- dinate and make clear which funding mit to funding KFS port for the gaps they are prepared to support. by December 2007 next �ve years guaranteed D. STAFFING and HUMAN RESOURCES 8. Staff morale needs to be maintained 8.1 Arrangements for recruiting staff to the 8.1.1 Clear job KFS Board of Staff morale First public KFS should be published well in advance descriptions pub- Directors improved advertisement and clear job descriptions should be pre- lished for senior for some senior pared indicating the skills and quali�ca- KFS staff by staff positions tions required to meet the service’s new December 2007 was issued on remit. Use of management consultants for June 2007 recruitment should be considered to aid transparency. (continued) 50 Strategic Environmental Assessment of the Kenya Forests Act 2005 Table 6.1 Continued Milestones Indicative list Issue (including time- of stakeholders Expected Policies and actions based milestones) to be involved outcomes Status 9. FD staff who are made redundant need assistance 9.1 An advice and vocational skills train- 9.1.1 Skills training FD, forestry Redundant ing program should be established to program set up by private sector, FD staff assist FD staff not transferring to the KFS January 2009 Donors assisted in to �nd new employment. �nding new employment. 10. Creating a new group of professionals with new skills 10.1 Training programs should be initiated 10.1.1 Training KFS, Public KFS staff have increased to reequip existing staff of FD to �ll new needs assessment service, capacity to handle posts where appropriate, recognizing that conducted by Directorate of requirements of new act entirely new skills will be called for in December 2007 personnel some areas, including commercial mar- management in keting and strategic management planning. the Of�ce of the (This requirement should reinforce other President equally important change management decisions.) 10.1.2 Training programs started for KFS staff by January 2009 11. Developing speci�c skills and awareness in managing community liaison, joint partnerships, and bene�t sharing 11.1 A national training program should 11.1.1 Identify KFS and NGO Capacity Training needs be set up to prepare headquarters and training needs by improved assessed and �eld staff of the KFS to respond to the July 2007 draft training new role of communities in forest modules for KFS management. These approaches will be staff in place distinct from those for moist forests. 11.1.2 Commission KFS and NGO KFS capacity Training training to develop on participa- on-going and run a “trainer tory forest of trainers� course management by December 2008 enhanced 11.1.3 A cadre of KFS and NGO KFS capacity About 5 KFS 10–20 individuals on partici- staff have established who patory forest already been can be employed to management trained in PFM train existing staff enhanced training of of the FD and all trainers at new staff by MSTCDC December 2007 (Arusha) 11.2 All prospective KFS staff should 11.2.1 All KFS KFS and NGO KFS capacity On-going. receive a minimum of three days training operational staff on participa- Some foresters in the role of communities before taking given initial training tory forest have been up his or her post by December 2008 management trained enhanced (continued) Policy Action Matrix 51 Table 6.1 Continued Milestones Indicative list Issue (including time- of stakeholders Expected Policies and actions based milestones) to be involved outcomes Status 12. Developing skills in dry land forest management 12.1 A practical training program should 12.1.1 Identify KEFRI, NGOs, Increased be set up for staff working within dry appropriate training universities, capacity in land forest areas to introduce the new needs to provide Kenya Forestry dry land approaches required for preparation of hands-on practical College forest forest management plans in these areas, advice by (Londiani), KFS management which will differ radically from those December 2007 traditionally used in moist forests. 12.1.2 Conduct KEFRI, NGOs, Increased training from universities, capacity in January 2008 Kenya Forestry dry land College forest (Londiani), KFS management E. INFORMATION AND DATA 13. Need for national tree resources information system (TRIS) 13.1 As part of the process of surveying 13.1.1 Creation of KFS, Local A TRIS in all forests, including revising harvesting a TRIS by authorities, place plans for plantations, a Tree Resources December 2008 National Information System should be created in Museums of the form of a data bank to monitor all Kenya, KWS, forest operations and provide base infor- Ministry of mation for management plans. TRIS Lands, KEFRI, should be publicly accessible on a dedi- other research cated Web site. organizations 14. Pilot studies on guidelines for forest management and partnerships 14.1 Pilot studies, modeled on the Hombe 14.1.1 Pilot studies KFS, NGOs, Forest case study, should be undertaken in applicable communities to improve the guidance offered on for- forest areas by mation of community associations, joint December 2008 partnerships, and management plans in the following forest types: industrial plan- tations, montane forests, farm forestry, dry land forestry, river corridor forests, and coastal forests. These studies should ex- amine how management and partnerships are affected by extrasectoral activities. Improved forest management guide- lines and guidelines for partnerships F. LEGAL FRAMEWORK 15. National forest policy 15.1 The updated Forestry Policy should 15.1.1 Forestry MENR, FD Updated New sessional be approved by the Parliament as soon Policy given a new Forestry paper number as possible and kept under review. sessional paper Policy in given (Paper (Sessional Paper No 4 of 2006 is due to be number and place No 1 of 2007). republished, and retabled in early 2007). approved by Policy waiting Parliament by to be published December 2007 (continued) 52 Strategic Environmental Assessment of the Kenya Forests Act 2005 Table 6.1 Continued Milestones Indicative list Issue (including time- of stakeholders Expected Policies and actions based milestones) to be involved outcomes Status 16. Harmonization of legal framework 16.1 The KFS should establish an internal 16.1.1 An internal KFS, private National working group to ensure that a program KFS working group sector, NGOs, forest for complying with international stan- established by universities management dards is introduced. This is important for June 2008 standards in improving compliance and other initia- conformity tives (for example, carbon sequestration; with inter- avoidance of invasive species in dry national lands; and link to other initiatives at pro- standard vincial, regional, and international levels). G. ENFORCEMENT 17. Improving enforcement 17.1 Develop a strategy and guidelines 17.1.1 A strategy on KFS in discussion Stakeholders on how enforcement will be addressed in improving enforce- with community have genuine the new KFS. ment in place by representatives respect for December 2007 the new Forests Act PRIORITY AREA 2: ENABLING COMMUNITY PARTICIPATION AND COST AND BENEFIT SHARING A. COMMUNITY PARTICIPATION 18. Increasing public participation in forestry issues 18.1 Guidelines should be prepared on 18.1.1 Guidelines Communities, Empowered the establishment of community forest to be provided and NGOs, KFS communities associations (CFAs) and the rules that piloted ready for that under- should apply to formation and registra- implementation stand the tion of associations. These guidelines by December 2007 role and should be developed and tested jointly opportunities by FD and the KFS and include active open to them involvement of CFA representatives. through Associations should be encouraged to forest form umbrella organizations. associations 19. Existing participation processes in communities should be built upon 19.1 An inventory of existing community 19.1.1 Inventory NGOs, civil Best practice participation processes in Kenya should be and best practice society, commu- in community undertaken. Best practice should be iden- study complete by nity associations participation ti�ed as well as barriers to participation. December 2007 is built into Recommendations on how these can be forest incorporated and improved in the Forests management. Act implementation should be made. 20. Increase emphasis on forests, bamboo, and cane that the poor depend on—arid and nonmoist forests 20.1 Undertake a study to review how 20.1.1 Study to be KFS, NGOs Improved un- arid and nonmoist forests can contribute completed by derstanding to poverty reduction. The study should December 2008 of how forests identify what scope there is for exploita- can contribute tion of non-timber forest products. to poverty reduction (continued) Policy Action Matrix 53 Table 6.1 Continued Milestones Indicative list Issue (including time- of stakeholders Expected Policies and actions based milestones) to be involved outcomes Status 21. Encourage the participation of women and excluded groups 21.1 Develop a policy on how women 21.1.1 Policy on CFAs, women, Women and and excluded groups should be engaged inclusion and wide- excluded groups, excluded in CFAs and the resulting bene�ts from spread dissemination indigenous groups groups bene- these groups. This measure is to assist in of its purpose devel- and networks, �t from the ensuring appropriate levels of representa- oped by December community repre- new act tion on the conservancy committees. 2007 sentatives, NGOs B. REPRESENTATION OF COMMUNITY FOREST ASSOCIATIONS 22. Developing partnerships with registered community forest associations (CFAs) 22.1 To avoid disenfranchising some 22.1.1 Formation NGOs, all CFAs CFAs well areas and associations, consideration of umbrella forums and Forest coordinated should be given to the introduction of for conservancies Conservancy and fairly rules to ensure fair election and represen- by June 2008 Committee represented tation of CFAs on area conservation com- (FCC), universities at FCC mittees. It would also be helpful to set up regular meetings between CFAs within each conservancy area. 22.2 undertake a capacity needs assess- 22.2.1 Capacity CFAs, universities Understand- ment to establish what skills and funds needs assessment Forest Action ing of the are needed to run CFAs and what the and recommenda- Network, KFS, skill gap of current gaps are. Study should make tions completed by KEFRI, KFWG CFAs better recommendations on how this skill gap June 2008 understood can be reduced. by the KFS C. BENEFIT SHARING 23. Identify the full range of potential community bene�ts and costs and how these will be shared 23.1 Undertake studies within each Forest 23.1 1 Pilot studies KFS, NGOs, Conservancy Area to identify the speci�c of community CFAs, universities, community bene�ts that can be promoted bene�t undertaken local communities in these areas. by June 2008 23.2 To ensure that CFAs are accountable 23.2.1 Procedures KFS, CFAs Accountable to the local inhabitants, clear and trans- for accountability and parent accounts should be prepared and transparency transparent showing the annual income and expen- prepared for CFAs CFAs in diture of individual forest areas, and the ready by June 2008 place income attributed to each CFA. Prepara- tion and publication of these accounts should be the responsibility of the CFA, working with the treasurers of each CFA. 23.3 Develop forest-speci�c guidance 23.3.1 Guidance Area conser- Transparent notes for the KFS, CFAs, and the private notes (in local vancy committees process for sector on the aesthetic and religious value dialect) on commu- bene�ts of forests; the organization and adminis- nity bene�t sharing sharing tration of ecotourism; livestock grazing; of different activities established fruits, roots, and medicinal plant gather- developed and ing; and the promotion of small-scale published by timber and non-timber product marketing June 2008 to achieve true bene�t sharing. (continued) 54 Strategic Environmental Assessment of the Kenya Forests Act 2005 Table 6.1 Continued Milestones Indicative list Issue (including time- of stakeholders Expected Policies and actions based milestones) to be involved outcomes Status 23.4 Clarify whether community council 23.4.1 Guidelines KFS, Ministry of Transparent and trust land in arid and semi-arid areas for forest classi�ca- Local Govern- process for will be classi�ed as forest and access for tion and registration ment, Ministry bene�ts grazing livestock will be restricted under published by of Lands sharing a “conventional� approach to manage- December 2008 established ment plans. 24. Arrange payment for environmental services and valuation of ecosystem services 24.1 Undertake a study to quantify the 24.1.1 Case study KFS, NEMA, Min- Environmen- nature and value of environmental to be completed by istry of Finance, tal services services, establish what is practical to be December 2009 Ministry of Water, costed achieved, and approve a design and best local and muni- practice methodology. cipal authorities, research organi- zations, private sector, Bureau of Statistics 24.2 Set up pilot study to build on existing 24.2.1 Undertake KFS, NEMA, Pilot study experience and establish appropriate pilot study on valua- Ministry of completed scales of charges. Decide who should pay tion, revenue collec- Finance, Ministry and �ndings the costs and how the revenue is to be tion, and bene�t of Water, local disseminated collected and shared. sharing and municipal authorities, research organi- zations, private sector, Bureau of Statistics 25. Joint management of plantation forests 25.1 A number of pilot studies of different 25.1.1 At least four KFS, private Clear guide- types of partnership for management of pilot studies of dif- sector, commu- lines on the plantation forests should be prepared, ferent partnerships nities, Kenya implementa- involving both community and private for management of Forestry College, tion of the sector interests and these examples should plantations be universities and partnerships be used to develop speci�c guidelines to carried out by tertiary learning cover joint management agreements. December 2009 institutions Existing studies (such as the International Institute for Environment and Develop- ment work) should be considered alongside these pilot studies. PRIORITY AREA 3: ENHANCING INVESTMENT IN THE FOREST SECTOR A. BUSINESS PLANS 26. Developing investment plans 26.1 Each of the forest management plans 26.1.1 Develop a KFS, CFAs, Investment should include an investment strategy. The number of business private sector plan linked investment strategy should indicate what plans for different to forest contribution will be made by each organi- forest sites to be management zation toward realization of the aims and ready by June 2008 plans also what returns will be due to those organizations. Investment strategies should be referred for consideration to the planned forest investment center. (continued) Policy Action Matrix 55 Table 6.1 Continued Milestones Indicative list Issue (including time- of stakeholders Expected Policies and actions based milestones) to be involved outcomes Status B. TRAINING 27. Training in forestry and related industries 27.1 The KFS should undertake a review 27.1.1 Training KFS, private Training of training programs with a view to intro- needs studies sector needs ducing and supporting programs that are carried out document directed at manufacturing and marketing January 2008 of timber and non-timber forest products. New training programs should relate directly to the strategic and business plans cited in Recommendation 3.1. 27.2 Support training in all sectors of the 27.2.1 KFS to KFS, private Co�nancing forest industry through the levy or royalties develop training sector for industrial on concessions. packages for fund- training ing through the secured Directority of Industry Training by January 2008 27.2.2 Develop KFS, private Co�nancing modalities for forest sector for industrial industry contribu- training tion to the conser- secured vation fund by January 2008 C. ROYALTIES, LICENSES, and CONCESSIONS 28. Model contracts and concession agreements 28.1 The KFS Board should prepare 28.1.1 Preparation FRC, KFS Transparent model concession contracts and agree- of model agree- contracting ments and make these available for ments laying out parties (communities and private sector) rights and respon- interested in commercial activities in sibilities of different plantations or natural forests. Draft parties and products agreements should show the types of covered by safeguards that can be built in to protect December 2007 the interests of parties in the agreement and all parties (especially communities) that may be affected by the agreement as well as environmental services. Model guidelines should also include considera- tion of dispute resolution and ongoing management. 28.2 Pilots should be undertaken to test 28.2.1 Pilot KFS Maximum the effectiveness of model contracts contracts for con- effectiveness and concessions but without delaying cessions to be of conces- the reactivation of sustainable timber tested by sions ensured production. December 2008 28.3 The KFS Board should ensure that 28.4.1 Preparation FRC, KFS, public Maintenance the principles incorporated in model con- of guidelines on participation of internal cession contracts and agreements are also sustainable forest high stand- applied to the KFS’s own management of management by ards of forest state forests. December 2008 management (continued) 56 Strategic Environmental Assessment of the Kenya Forests Act 2005 Table 6.1 Continued Milestones Indicative list Issue (including time- of stakeholders Expected Policies and actions based milestones) to be involved outcomes Status 28.4 Information on standard agreements 28.5.1 Raise public KFS, NGOs, CFAs CFAs and private for contracts and concessions should be awareness of and sector aware publicly available and awareness should access to model of contracting be raised (among forest dependent com- agreements through opportunities munities and private sector) regarding demonstration slide- these. shows, leaflets, and other training aids disseminated widely as part of the general program for raising community and pri- vate sector aware- ness about the forest sector reform by December 2009 29. Increase accountability and transparency associated with investments 29.1 All contracts, concessions, royalty 29.1.1 System for KFS, NGOs, Transparent terms agreements, and other licenses and leases public access to CFAs, private and conditions should be made publicly available once agreed terms and sector for licenses and the terms have been agreed to. Establish- conditions of leases and easy ing clear and transparent terms for licen- approved licenses access to pub- ses, royalties, stumpage payments, and and leases by lished information other methods of measuring and valuing December 2007 on the same. This standing timber will ensure that all parties will create a level can see the value of the resource and will playing �eld for help to ensure that silvicultural operations investors. are being carried out sustainably. D. INCENTIVES 30. Minimizing number of stakeholders who are potential losers due to the act 30.1 A framework for the provision of 30.1.1 A framework KFS, private Clear and trans- incentives (especially for potential losers for providing incen- sector and parent incentive under the new act, such as small-scale saw tives developed by communities, framework for millers, using environmentally responsibly December 2008 Ministry of investing in equipment, tree planting, and so on) needs Finance forestry to be developed. Before these incentives are con�rmed, it is strongly recommended that indicative business plans be devel- oped to illustrate the levels of return that might be achieved on different types of forests by private or community interests and that the levels of risk should also be assessed. (continued) Policy Action Matrix 57 Table 6.1 Continued Milestones Indicative list Issue (including time- of stakeholders Expected Policies and actions based milestones) to be involved outcomes Status 31. Ensuring private forest owners do not impose social, environmental, or economic costs on local communities and local authorities 31.1 Guidelines are required to ensure 31.1.1 Clear KFS, other stake- Rules and that incentives to private forest owners guidelines for holders including regulations are only provided where it is clear that management of Physical Planning for manage- there will be no adverse consequences private forests by Department in ment of on the environment or social or local December 2007 Ministry of Lands private economic conditions enjoyed by local and communities forests communities and authorities. It is essential that safeguards are built into the registra- tion process and its subsequent monitoring to ensure that private forests are managed sustainably. E. ENVIRONMENTAL AND OTHER REGULATIONS 32. Environmental and other regulations 32.1 The KFS should apply regulatory 32.1.1 Clear KFS, NEMA EIA regula- EIA regulations framework including Environmental application of EIA tions and en- already prepared Impact Assessment (EIA) and other evalu- regulations and vironmental by NEMA ation tools that are �t for purpose and environmental audit rules do not impose an unacceptable burden audit rules for the for forest on industry. forest sector during sector implementation of the Forests Act 2005 32.2 Criteria, standards, and guidelines 32.2.1 Criteria and KFS in consultation Standards should be developed to indicate what standards con�rming with all stakeholders and criteria conditions will constitute inadequate the circumstances established management of all forest types. under which forests will be taken under KFS management to be adopted by December 2008 F. TECHNICAL ASSISTANCE AND SUSTAINABLE FOREST RESOURCE USE 33. Revitalization of forest industry 33.1 Urgent steps are required to promote 33.1.1 Set up a KFS in consultation Forest restructuring of the forestry industry and Forest Industry with all stakeholders Industry to raise overall standards. It is recom- Forum by Industry mended that a Forest Industry Forum December 2008 Forum be established to promote best practice established in Kenya. 34. Managing charcoal production and transportation 34.1 A full analysis should be undertaken 34.1.1 A charcoal KFS, private sector, Charcoal Draft charcoal to determine where charcoal production regulatory frame- Energy for Sustain- rules and rules have can be permitted, and rules and regula- work with speci�c able Development— regulation been prepared, tions should be developed for authorizing standards prepared Africa, World Agro- and development and monitoring charcoal production. and gazetted and a forestry Center, com- certi�cation of national certi�cation process munities, traf�c police standards standards on initiated by June Ministry of Planning, in place. certi�cation 2008 Local Authorities, and has been others (wide spectrum initiated. of stakeholders) (continued) 58 Strategic Environmental Assessment of the Kenya Forests Act 2005 Table 6.1 Continued Milestones Indicative list Issue (including time- of stakeholders Expected Policies and actions based milestones) to be involved outcomes Status 35. Expansion of farm forestry 35.1 Develop a clear policy brief on the 35.1.1 Policy brief KFS and other Stakeholders role of both plantation forestry and farm prepared by stakeholders understand forestry (both different locations and December 2007 the role of scales) in the new Forests Act and how farm forestry each can contribute to the sustainable in achieving use of forest resources. This will need sustainable to have a clear position on the use of forest development of technical support resources (extension) to support farm forestry. 7 The Next Steps As agreed in the �nal workshop associated with the SEA, upon com- pletion of the policy action matrix dates have been speci�ed for cer- tain actions listed in the matrix. This was done in collaboration with members of KFS and, the Reform Secretariat. Remaining next steps identi�ed by stakeholders involved in the SEA process are outlined below: • The Kenya Forest Sector Reform Secretariat should be the coor- dinating body for the implementation of the SEA’s policy action matrix. • Once the appropriate milestones have been set by the new Board, it was agreed that a limited number of key dates should be set for further follow-up workshops. The purpose of these follow-up workshops would be to provide stakeholders who have already actively participated in the SEA process, and any other new stakeholders identi�ed, with the opportunity to re- view progress against the policy action matrix. This would pro- vide a forum whereby stakeholders could assess the general state of progress and determine whether further action needs to be taken to deliver the SEA objectives. • It was agreed that to ensure monitoring of progress on the SEA policy action matrix milestones remained independent, these future stakeholder workshops should be independently funded from the government. This will enable a platform for open and unbiased discussions. The new KFS will need to secure this in- dependent funding for monitoring the SEA from development partners in Kenya as a matter of priority. • There is a need for the new KFS to work with development part- ners to agree how different components of the SEA policy action matrix will be funded. • To ensure that the matrix is a living document it should be made accessible to all key stakeholders and efforts made to periodi- cally update the status of speci�c actions in the matrix. 59 References and Other Resources Angelsen, A., and S. 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Agriculture Operations Division, East Africa Department, KWS (Kenya Wildlife Service). 1994. “Wildlife-Human Nairobi, Kenya. Conflicts: Sources, Solutions and Issues.� Kenya Wildlife ______. 2007. Participation in Sustainable Forest Management: Service, Nairobi. Linking Forests and People in Kenya. Forest Policy Note. World Bank, East Africa Region. Nairobi, Kenya. THE WORLD BANK Report No. 40659-KE Institutions-Centered Strategic Environmental Assessment of the Kenya Forests Act 2005 APPENDIXES TO MAIN REPORT © 2007 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org/rural E-mail ard@worldbank.org All rights reserved. This volume is a product of the staff of the International Bank for Reconstruction and Development/The World Bank. 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All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail pubrights@worldbank.org. 2 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report CONTENTS APPENDIX 1 SUMMARY OF THE CONTENTS OF THE FORESTS ACT 2005 ................5 APPENDIX 2 STAKEHOLDERS WHO PARTICIPATED IN THE STRATEGIC ENVIRONMENTAL ASSESSMENT ..............................................................7 APPENDIX 3 SUMMARY OF THE STAKEHOLDER ANALYSIS.....................................15 APPENDIX 4 GOVERNANCE AND INSTITUTIONAL ASSESSMENT ............................18 APPENDIX 5 ENVIRONMENTAL ASSESSMENT ............................................................71 APPENDIX 6 SOCIAL ASSESSMENT..............................................................................93 APPENDIX 7 ECONOMIC AND FINANCIAL ASSESSMENT ........................................118 APPENDIX 8 HOMBE CASE STUDY AND RUMRUTI FOREST ...................................176 Boxes A4.1 Highlights of Corruption Drivers and Enabling Factors A5.1 Environmental Issues Identified in the Scoping Report A6.1 Five Steps to Ensure Social Issues are Addressed in the Implementation of the New Forests Act Figures A6.1 Forestry, Livelihoods, and Environment Linkages A7.1 Revenue Collection in the Forestry Sector A7.2 Shortcomings of Kenya’s Forest Revenue Collection A7.3 Nominal Growth Rate of KWS Income and Expenditure, 2002–5 A7.4 Financing from Donor Aid, 1997–8 through 2005–6 A7.5 Execution Rate of Donor Assistance A7.6 Kenya Forest Service Revenue and Expenditure Gap and Net Present Value A7.2.1 Revenue Collection Under Three Different Efficiency Levels Tables A4.1 Stakeholders Identified in the Act and Their Roles in Implementation: Challenges and Opportunities A5.1 Forest Types Recognized in the New Act, Their Environmental Importance, Current Status, and Likely Impacts of the New Act A5.2 Matrix of Environmental Risks and Opportunities of the Kenya Forests Act 2005 A6.1 Different Social and Economic Uses of Forests in Kenya A6.2 Differing Social Issues and Concerns Associated with the Different Forest Types in Kenya A6.3 The Importance and Influence of Stakeholders in the New Forests Act A7.1 Major and Minor Forest Products that Incur Charges A7.2 Collection and Final Beneficiary of Taxes and Nontax Revenues from the Forestry Sector A7.3 Revenue Projections for the Kenya Forest Service 2007–8 through 2014–15 A7.4 MENR Budget: Budgetary Allocations by Subdivision, 2004–5 and 2005–6 A7.5 Budgetary Allocations to Forestry Agencies and Institutions A7.6 The FD: Budgetary Allocations and Actual Spending, 2002–3 to 2005–6 A7.7 The FD: Recurrent and Investment Spending Pattern, 2002–3 to 2005–6 A7.8 Staffing of the Forest Department,1992–3 and 2000–1 3 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report A7.9 Categories of Financing Needs Under New Forests Act A7.10 The Kenya Forest Service Budget A7.11 Forest Plantation Costs Summary Under Current Unmanaged State and Their Corresponding Labor Inputs A7.12 Forest Plantation Silviculture Operations Costs Under KFS Management A7.13 Plantation Forest Management Under Community and Private Sector Involvement A7.14 Indigenous Forests Management Under the KFS A7.15 Indigenous Forests Under Joint Community and KFS Management A7.16a Wood Product Imports A7.16b Wood Product Exports A7.17 Financing of the Forest Reform Work Plan, June–December 2006 A7.1.1 Revenue Collection in the Forestry Sector A7.1.2 Budget Share of Ministry of Environment and Natural Resources A7.1.3 Composition of KWS Income and Expenditure, 2001–5 A7.1.4 Recurrent and Development District Expenditures, 2004–5 and 2005–6 A7.1.5 Spending of Forestry Budget by External and Domestic Resources, 2002–3 through 2005–6 A7.1.6 Budget Estimates and Actual Spending for Forest Development Programs A7.1.7 Forest Plantation Silviculture Operation Costs Under Current State Management A7.1.8 Forest Plantation Silviculture Operation Costs Under KFS Management A7.1.9 Costing of the FD Forest Sector Reform Work Plan, June–December 2006 A7.1.10 Budgetary Allocations to the FD, 2005–6 and 2006–7 A7.4.1 Kenya Forest Service Income and Expenditure, Net Present Value A8.1 Total Expenditure by the Hombe Forest Station A8.2 Forest Resources at Hombe Forest Station A8.3 Historical Revenue Generation, Select Years A8.4 Projected Revenue Collection in 2007 A8.5 Requirements for Efficient Implementation of the Forests Act 2005 A8.6 Key Lessons Learned and Recommendations A8.1.1 Population Projections Extracted from DDPs A9.1 Stakeholder Responses to Policy Action Matrix 4 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report APPENDIX 1 SUMMARY OF THE CONTENTS OF THE FORESTS ACT 2005 AIMS OF THE ACT • Establishment of a semiautonomous Kenya Forest Service • Stringent measures to be put in place for conversion of forest land to other uses through Application of Environmental Impact Assessment Consultation with Local Forest Conservation Committees Approval of the change of land use by Parliament • Recognition of local community members as major stakeholders in the management of forests • Management of indigenous forests on sustainable basis and sustainable production of wood and nonwood forest products • Management of industrial forest plantations on a sustainable basis, for production of wood and other forest products and services • Promotion of commercial tree growing by private sector, farmers, and communities through incentives Part I - Preliminary Sections 1–3 provide the name of the new act and its application to forests situated on government, local authority, or private land. Defines words and expressions used in the act that relate to the environmental dimension of forest management and to the stability of a renewable supply of forest resources Part II - Administration Section 4 outlines the functions of the Kenya Forestry Service (KFS). Sections 7–11 establish a Management Board and outline its composition, functions, and power. Section 13 establishes forest conservancy areas and forest divisions for the overall management of forests. Committees are established to manage these and their composition and functions are outlined. Sections 14–20 establish a Forest Management and Conservation Fund for funding the activities of the KFS and other objectives of the act, outlines the source and management of funds. Part III - Creation and Management of Forests Sections 21–25 provide for the creation of the various categories of forests (state, local authority, private) and the recognition of customary rights. Sections 26–27 provide for declaration of provisional (mismanaged) forests and the process of reversion to original owner. Sections 28–29 deal with the variation of forest areas through a consultative process accompanied by an independent Environmental Impact Assessment (EIA) and approval by Parliament. 5 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Section 30 – provides for establishment and maintenance of arboreta, mini-forests, and recreational parks for the nonconsumptive use of persons residing within its area of jurisdiction. Sections 32–33 empower the Minister to create nature reserves in areas of particular conservation value and to regulate their use. Section 34 provides for designation of certain trees as protected trees by the President and attaches penalties for destruction of such trees or interference with them. Sections 35–36 require every state, local authority, and provisional forest to have a management plan and outlines who is responsible for its preparation and who should be consulted. Section 37 management of plantation forests by state, through a license, concession, contract, or joint agreement Sections 38–39 management of local authority forests and local authority forest management agreements Section 40 utilization of state forests by granting concessions Section 41 management of indigenous forests Sections 42–44 consent for mining and quarrying, requirement for re-vegetation, and offenses in relation to such activities Section 45 activities outside the management plan Part IV – Community Participation Sections 46–49 provide for community participation in forest management specifying certain privileges in relation to particular forest areas and forest produce rights in relation to those areas. Part V – Enforcement Sections 50–58 provide for powers to be exercised by officers of the KFS in the enforcement of the provisions of the act, and regulate the use of those powers. Sections 52–53 cover the prohibited activities in the forests and provide penalties for counterfeiting or unlawful affixing of marks. Provide for the right of citizens to take legal redress in the event of breaches of the act. Part VI – Miscellaneous Section 59 provides for the Minister to make rules for or with respect to any matter necessary to be prescribed for carrying out or giving effect to this act. Sections 60–63 provide for adherence to international obligations under any treaties and agreements relating to forests to which the government of Kenya may be a party. Provides for application of the Environmental Management and Coordination Act. Part VII – Transitional Provisions Sections 64–67 provide for the repeal of the existing Forests Act and make provision for the transition. Schedules Schedules 1–3 contain details in respect to • officers of the KFS. • oath of allegiance for the disciplined officers of the KFS. • provisions relating to the conduct of business of the Forest Board, and • the procedure for public consultation. 6 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report APPENDIX 2 STAKEHOLDERS WHO PARTICIPATED IN THE STRATEGIC ENVIRONMENTAL ASSESSMENT 1. Participants at First Stakeholder Workshop, May 4, 2006 Name Organization Sector Telephone E-mail address 1. Peter Nelson Land Use SEA Team nelson_p@bristol.landuse.co.uk Consultants 2. David Maingi World Wide SEA Team 0723 786184 dmaingi@wwfearpo.org Fund for Nature (WWF) 3. Patricia University of SEA Team 0733 726511 pkameri-mbote.ielrc.org Kameri- Nairobi pkameri_mbote@yahoo.co.uk Mbote 4. Claire IDLGroup SEA Team claire.ireland@theidlgroup.com Ireland 5. Paul Steele SEA Team steele@sltnet.lk 6. Michael Kenya Forests SEA team 0722 499891 mgachanja@kenyaforests.org Gachanja Working Group 7. Benjamin KENGEN Participant 050-50086 bkubo@kengen.co.ke Kubo 8. Thomas World Research 0720 756137 t.yatich@cgiar.org Yatich Agroforestry Centre (ICRAF) 9. Esther Kenya Participant 020 607048 Mugure Association of Forest Users 10. Maurice National Government 0733 759744 dgnema@swiftkenya.com Mbegera Environmental Management Authority 11. Nyambura World Bank Development 3226443 ngithagui@worldbank.org Githagui Partner 12. Maureen World International 890605-12 maureen.babu@iucn.org Babu Conservation NGO Union 13. Antti Erkkila Embassy of Development 318575 antti.erkkila@formin.fi Finland Partner 14. Sean White Winrock Development 0721 383585 swhite@winrock.org International Partner 15. David Finlay Tea Private 0722 833122 david.mousley@finlays.co.ke Mousley Company Sector 16. G. N. Ministry of Government 0720 655733 gathaara@nbnet.co.ke Gathaara Regional Development 17. Tanguy De Gallmann Private 0734 487660 africabotanico@gallmannkenya.co.ke Bock Financial Sector gmfkenya@africaonline.co.ke Foundation 18. Stephen UK Department Development 0733 414459 s-bertram@africaonline.co.ke Bertram for International Partner Development 19. Enock Nature Kenya CSO 0722746312 office@naturekenya.org Kanyanya 20. Rose Ministry of Government 0721478194 ranyamori@yahoo.com 7 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Name Organization Sector Telephone E-mail address Nyamori Water and Irrigation 21. Maxwell Woodlands CSO 0723 706680 woodlands@tamarind.co.ke Kinyanjui Trust 22. George WWF CSO gwamukoya@wwfearpo.org Wamukoya 23. Angela Miti Mingi/ILO Participant 7621135 angelak@unops.org Kabiru- 0721 423352 Kangethe 24. Robert US Agency for Development 0722 335314 robuzzard@usaid.gov Buzzard International Partner Development 25. Dr. Hilda National Research 3742445 cbd@museums.or.ke Oyieke Museums of Kenya 26. Catherine Kenya Lands CSO 051 2210398 cgatundu@kenyalandalliance.co.ke Gatundu Alliance 27. John Tim Trade Private 0722 755957 John-wakaba@yahoo.com Wakaba Sector 28. David Kuria KENUO Private 0722 43 davekenuo@hotmail.com Sector 8518 29. Wahida ICRAF Research 20-7224295 w.shah@cgiar.org Shah 30. Edmund World International 20-896065 Edmund.barrow@iucn.org Barrow Conservation NGO Union IUCN 31. Charles TIEA Participant 0722 523228 cbengough@yahoo.com Bengough 32. Paul Kenya Forestry Research 066-32841 kefri@nbi.ispkenya.com Konuche Research (Dr.) Institute 33. J. K. Forest Government 0722 384008 Bundotich Department (FD) 34. J. Inganji Forest Government 0722 769354 yakhama@forestry.go.ke Yakhama Department 35. Dr. Dominic FAN CSO 0733 750929 dwalubengo@fanworld.or.ke Walubengo 36. Stefan Tree is Life CSO 065 32696 tree@africaonline.co.ke Foklinuh 37. G. J. Tree is Life Community 065 32696 tree@africaonline.co.ke Cadavillas Association 38. T. S. Rai Rai Plywood Private Sector 39. Emily Atai KWS Government 0721 431018 forests@kws.com 40. Murefu Energy for CSO 0720318805 mbarasa@esda.co.ke Barasa Sustainable 4 Development 41. David Chief Government ccf@wananchi.com Mbugua Conservator 42. Ben Ithagu NEMA Government benithagu@yahoo.com 43. C. Mbuthia National Private kamanguc@yahoo.com Kamugu Alliance of Sector Community Forest 8 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Name Organization Sector Telephone E-mail address Associations 44. Joseph CFF Private jruhiu@cdtfkenya.org Ruhiu Sector 45. Joseph M. Individual Participant 0722 848 josmutie@hotmail.com Mutie 544 46. Philip A. Diro Pan Paper Private 0733 699600 padiro@panpaperkenya.com Sector 47. Anthony M. FD Government Maina 48. Francis N. Agricultural Private 020 220867 Mwangi Kenya National Sector 0722-736225 Chamber of Commerce 49. Yuichi Sato Intensified Development 020-3761487 ys@africaonline.co.ke Social Forestry Partner Project/Japan International Cooperation Agency 2. Participants at Second Stakeholder Workshop, June 21, 2006 Name Organization Contact details 1. Kevin Carr-Hartley Forest Farms Ltd and Forest Fields 2. Gerald Ngatia Hombe N.C. Forest Association 0722 451966 ngatiagerald@yahoo.com 3. Patricia Kameri- University of Nairobi/Consultant 0733 726511 Mbote pkameri-mbote@ielrc.org 4. Michael Gachanja Consultant – Institutions- Centered Strategic Environmental Assessment 5. Alex Forbes Poverty Environment Initiative – alex.forbes@undp.org United Nations Development Programme 6. Yuko Kurauchi World Bank, Nairobi ykurauchi@worldbank.org 7. Tom Owiyo World Bank, Nairobi towiyo@worldbank.org 8. John N. Ngugi JICA, Kenya Office johnngugi.ky@jica.go.jp 9. James Sandom James Finlay Kenya Ltd jims@finlays.ik 10. Christian Peter World Bank cpeter@worldbank.org 11. Enos Esikum World Bank eesikuri@worldbank.org 12. Christine Cornelius World Bank ccornelius@worldbank.org 13. Diji World Bank, Natural Resource dchandrasekharan@worldbank.org Chandrasekharan Economist 14. Fernando Loayza World Bank, Senior SEA floayza@worldbank.org Specialist 15. Maureen A. Babu IUCN, Eastern Africa Regional Office 16. Toshimasa Embassy of Japan Toshimasa.masuyama@mofa.go.jp 9 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Masuyama 17. Stephen Bertram DFID s-bertram@africaonline.co.ke 18. J. E. Kaniaru Hombe Community Forest Association 19. Volga Habwe Forest Action Network 20. Nyambura Githagui World Bank ngithagui@worldbank.org 21. David Kuria Kijabe Environment Volunteers davekenvo@hotmail.com 22. Mbogo Kamau LNRA/EFCMN mbogokamau2001@yahoo.co.uk 23. G. J. Cardonillis TILT/Rumuruti Forest Box 40 Rimuruti 24. Stefan Fokkink TILT/Rumuruti Forest tree@africaonline.co.ke 25. Dr. D. Walubengo FAN dwalubengo@fanworld.or.ke 26. Esther Mugure KAFU emugure@kafuworld.org 27. Anthony M. Maina FD ccf@wananchi.com 28. J. K. Bundotich FD 29. J. I. Yakhama FD yakhama@forestry.go.ke 30. Emily Atai KWS forests@kws.org 31. T. S. Rai Rai Plywood (K) Ltd 32. Polycap Otieno Kenya Land Alliance – Nakuru potieno@kenyalandalliance.or.ke 051 2210398 33. Murefu Barasa Energy for Sustainable mbarasa@esda.co.ke Development (ESDA ) 3. Participants at Third Stakeholder Workshop, December 15, 2006 Name Organization Telephone 1 Rose Nyamori Chemist, Ministry of Water and 0721 478194 Irrigation 2 Joseph Mangira Policy Officer, WWF-Eastern Africa 0721 725319 Regional Program Office 3 Francis N. Waituri Chairman, Lariak Forest 0727 849906 Association 4 Gerald M. Ngatia Secretary, National Alliance of 0722 451966 Community Forest Associations (NACOFA) 5 David Mousley Plantation Executive, J Finlay (K) 0722 833122 Ltd 6 Clement Kariuki Chairman, NACOFA 0722 393017 7 Taye Teferi Conservation Programme Director, 0723 786182 WFF-EARPO 8 Helene Ahlborg Student, FAN 0728 211611 9 Mikael Gustafsson Teacher, FAN 0723 650168 10 Christian Peter World Bank 255 784 411163 11 Simone de Hek Tree is Life Trust 0723 840850 12 Niklas Hagelberg United Nations Environment 0733 689111 Programme 13 Charles Mbuthia Mount Kenya CFA 0723 805692 Kamangu 10 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Name Organization Telephone 14 Yuko Kurauchi World Bank 0722 563308 15 Josphat Wagura Njagu Organizing Secretary, Ndaragwa 0725 645966 CFA 16 A. Omar MENR, SAS I 0725 800200 17 Benjamin Kubo KENGEN 050 50086 18 Dr. D. Walubengo FAN 020 891035 19 Yuichi Sato ISFP/JICA 0723 303496 20 Alex Forbes PEI (UNDP/UNEP/GOK) 0725 459086 21 Solomon Mwangi CDTF 2727888 22 John M. Wanyiri FD, MENR 0722 273577 23 Josphat K. Bundotich FD, MENR 0722 384608 24 Emily Atai Forest Office, KWS 0721 431018 25 Charles Bengough Timber Industries Employers 0722 523228 Association 26 Thomas Yatich T.B. ICRAF t.yatich@cgiar.org, 0720 756137 27 Martin Shimba NEMA 0722 671007 28 Racheal Ambani MIBOK 0722 292236 29 David Kuria KENVO 0722 438518 30 Joel Siele Nature Kenya 0722 967337 31 Antti Erkkila Embassy of Finland 254 20 3750721 32 Wahida Shar ICRAF 7224295 33 S.K. Kirogo Office of the President 0722 847602 34 A.M Maina FD 0722 806127 35 J. Inganji Yakhama FD 0722 769354 36 Robert Buzzard USAID 37 Nelly Soi Women’s group, Kericho 0720 558150 38 Charles Nganga Chairman, Menegai, CFA 0722 338714 39 Mich Rasmussen Danish International Development Agency, NEMA 40 Scott Geller LTS International 41 Morgens Buch Hansen NEMA 42 Michael Gachanja Consultant 43 Sharon Gordon Consultant 44 Peter Nelson Consultant 45 Gideon Ndambuki Permanent Secretary, Civil Service 46 Prof. George Khroda PS, MENR 47 J. E. Kaniaru Chairman, Hombe Forest 0722 451966 Community Association 48 Maria Kenyua Matrix Development Consultants 4. Stakeholders Consulted During the Case Study Name Organization or institution 1. Gerald Ngatia Hombe Neighbouring Community Association (chairman), National Alliance for Community Forest Associations (committee member) 2. Kahuho Maathai Ruguru Green Belt Movement (coordinator) 3. Hillary Muriuki Forester 4. Mwai Muititho Upper Gichoru Water Project, Hombe Neighbouring Community Forest 11 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Association 5. Lucy Mumbi Sagana Women Fish and Beekeeping Self Help Group (committee member), Chairlady of Sagflo group 6. Charity Gathigia Sagana Women Fish and Beekeeping Self Help Group (committee member) 7. John Macharia Sagana Electric Fence (treasurer), Hombe Neighbouring Community Gichimo Association (V. Secretary), Sagana Mitero Farmers Group (Coordinator) 8. Johnson Miano Sagana Electric Fence, Igaka and Umoja groups (farmer) 9. Geofrey Mwangi Sagana irrigation water project (V. Chairman), Kamusa Self Help Group Muriuki (farmer) 10. Josepgh Mathenge Sagana Youth Mountain Climbing Group (Chairman), Igaka Farmers Self Help Group 11. Wilson Thigu Ruguru Green Belt Movement, Hombe Neighbouring Community Association 12. Peterson Kaigi Ruguru Green Belt Movement, Hombe Neighbouring Community Association 5. Hombe Community Leaders Meeting Name Organization Tel Michael Gachanja I-SEA Team 0722 499891 J. E. Kaniaru Hombe CFA - Sharon Gordon IDL/FRR 0722 272721 Peter Nelson I-SEA Team - Lucy Mumbi Weru Committee member 0723 518425 Charity Gathigia Committee member - Peter Kuira Kanono water project 0724 729252 Julius Njogu FD - Charles Maingi FD 0723 574 688 John Gichimu Sagana Electric Fence 0722230239 David Warucu Sagana Grazers association 0721543563 David Ngichunga Kagati/Kaimati Forest 0726920270 Association Michael Kinyua Grazers association - Godfrey Mwangi Sagana irrigation water project 0720311371 Stephen Kanyugi Wamwaki Dam self help - Laban Weru Iruri irrigation water project 0721104400 Linus Kihara Wachira Sagana irrigation water project - Mwai Muitithiu Upper Gichoru water project 0721401538 Gerald M Ngatia Hombe Adjacent community 0722451966 association Wilson Thige G B M, Ruguru - Benson Mwangi Gichuki Sagana irrigation water project 0723212139 Peter Muriuki Kibui Kagati Kaimati Forest 0721808470 Association Peter Kaig Nyamu G B M, Ruguru 0721555589 Margaret Ngima Kanono Hydro electricity water 0723742062 project Stephen Muriuki Sagana wildlife Protection S H 0723707638 12 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report G Lucy Gatei Sawmills 0723741183 Githui Jackson Upper Gichoru water project 0723383311874 Catherine Kimaru Association chief 0723166310 James Wambugu Grazing 0724574244 6. Stakeholders Consulted During the Environmental and Social Assessment Name Organization Contact details Joseph M. Katumo MENR j.katumo@mazingiraasili.go.ke Maurice Mbegera NEMA dgnema@swiftkenya.com Hewson Kabugi KWS forests@kws.org David Kuria KENVO davekenvo@hotmail.com Enock Kanyanya Nature Kenya office@naturekenya.org Rose Nyamori Ministry of Water and Irrigation rnyamori@yahoo.com Chetan Shah Timber Industries Employers stm@wananchi.com Association Stephen Mutimba ESD Africa smutimba@esda.co.ke Dr. Bernard Kigomo KEFRI kefri@nbi.ispkenya.com Dr. Muchiri Paul Ogugo David Oder Dr. Chegara Josphat Inganji FD yakhana@forestry.go.ke Yakhama Esther Mugure KAFU emugure@kafuworld.org 13 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report 7. Stakeholders Consulted During the Economic and Financial Assessment Name Organization Contact details Mr.Anthony Maina Director of Forest Reform 0722 806 127 Committee Mr. Joseph Luganji Forest Reform Committee 0722 769 354 Mr. Wainaina Conservator of Forests, Chief 0722-884572 Finance Officer Mr. Logando Under Secretary, Human Resources, FD Mr.Muriithi Conservator of Forests, Lead 0722-752175 Expert Environmental Impact Assessment, Planning Department Mr. Sinei Economics Section, FD Mr. Bundotich Project Development 0722 384 608 Mr. Logando Under Secretary, Human Resources Mr. Kepha Wamichewe FD, Accountant Mr. Klama Ledger Office 0722-601579 Mr. Hewson Kabuge KWS 0722 370702 Ms. Yuko Kurauchi World Bank 3226360 Mr. John Randa World Bank 3226360 Mr. Michael Makokha Odera Kenya National Coordinator, Food 0733-685805 and Agriculture Organization Mr. Robert Buzzard General Development Officer, 0722 335314 USAID 14 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report APPENDIX 3 SUMMARY OF THE STAKEHOLDER ANALYSIS Interests (environmental, social, Impact of Relative economic, institutional) act on priorities of each interest interest (1 = high (+ or - ) 4 = low) Primary stakeholders Central government Primarily institutional but with some • FD environmental, social, and economic +/- 1 • KWS interests • Ministry of Water • Afforestation and reafforestation to and Irrigation expand to 10 percent forest cover in • Ministry of Local Kenya Government • Catchment protection and minimization of forest encroachment • Minimization and cessation of gradual and insidious forest degradation (for example, gradually and systematically thinning a forest or removing particular species to extinction) • Sustainable water resource management • Human-wildlife conflict in forests • Recognition and real support for all relevant international multilateral environmental agreements and protocols Private sector (saw Primarily economic but some environmental mills and value and social interests +/- 1 adding) • Agreement and gazettement of national • Timber Industry forest certification scheme, followed by Employers implementation, enforcement, and Association increased awareness of the scheme (TIEA) nationally and internationally • Kenya Timber • Sustainable source of good quality Manufacturers timber readily available Association • Reduction in time frames and various • Kenya Furniture delays at NEMA for EIAs and audits Association • Other timber traders • Thuiya Enterprises • Miti MIngi • Pan Paper • Rai Ply, Timsales & Company • EHG Private sector Primarily economic but some environmental (other) and social interests +/- 1 and 2 (2 • Finlay Tea where the Company • Insufficient attention in the new Forests organizations are not entirely 15 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report • Kakuzi Act to wood fuel and charcoal dependent on • Kenya Tea • Insufficient attention or emphasis in the forestry, for Development new Forests Act on biodiesel and example, Authority (KTDA) biomass as an energy issue in general KTDA, ESDA • Woodlands Trust (the new KFS could earn substantial and others • Gallmann revenue if the linkages between the Memorial private sector, KFS, and biodiesel were Foundation much further developed than the current • NACOFA status) • CFF • ESDA • KAFU National Primarily institutional but with strong nongovernmental environmental and social interests +/- 1 and 2 (again organizations where NGOs (NGOs) • The emphasis given to biodiversity in the work in more • KFWG new act is positive; however, need to than one area, • East Africa ensure that this is effectively not just Wildlife Society implemented forestry, for • Nature Kenya • The need to lobby the government on example, • Forest Action relevant environmental issues Nature Kenya, Network (catchment degradation, poor planting KLA, EAWLS, • Kenya Land material, poor maintenance of forests, and others) Alliance and so forth) Community Forest Primarily economic but with strong social Associations and environmental interests +/- 1 (typically on edge of • Concern about access and use forests < 5km) (management) of nontimber forest • Oyieke products (bee hives, medicinal plants, • Osienala/Gwasi charcoal, and so on) hills community • Concern that pastoralists could be losers • Ogiek Welfare with the new Forests Act in that access Council to land with woody bushland (in the • KENVO future to be classified as forests) will be • Eburru restricted Community Group Secondary stakeholders Central government Primarily institutional with some • NEMA environmental and social interests +/- 2 or 3 (linkages • Ministry of • Degrading land, increasing soil erosion, with FD or the Regional and siltation of water bodies new KFS Development • Emphasize use of farm forestry important but • Ministry of • The need for EIAs to be used before the not essential in Agriculture start of all new projects the short or • KenGen • The need to environmentally audit all medium term, • NMK operational forestry projects only essential • National • The need for Kenya to use national and over the long Chamber of international certification schemes for term) Commerce forestry Research and Primarily environmental and social with academic some institutional interests +/- 1 (for KEFRI) 2 organizations (for ICRAF, • KEFRI • Insufficient clarity in the new Forests Act CREEL, and 16 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report • ICRAF on the role of research and development ILEG as ICRAF • CREEL organizations in forestry in Kenya works in many • ILEG • Insufficient use, monitoring, and countries and feedback of developed forestry species, CREEL and for example, fast-growing productive ILEG work on species environmental • Need to elaborate and be clear between and other the linkages of all Kenyan acts covering issues, not just environmental issues (EMCA 1999, forestry) Water Act 2002, Forests Act 2005, and others) • The need to embrace modern technologies to enhance forestry in Kenya and concurrently to phase out the use of old technologies in a gradual and systematic way International NGOs Primarily environmental with some social • IUCN interests +/- 1 and 2 • WWF (proportion of • AWF • Continuing loss of biodiversity work on forests • The realization of sustainable use of of organization forests as outlined in the new act and < 40 percent) policy Communities that Primarily environmental and social; use forests but are indirectly economical +/- 2 not located near them • Use of nontimber forest products (> 5 km) • Use of timber products. External stakeholders Multilateral donors Environmental, social, and institutional • World Bank • Poverty focus of new act and +/- 2 • UNEP implementation • UNDP • Environmental governance of the forestry sector • Ensuring real participation of CFAs • The need of donor agencies to commit resources to forest sector reform Bilateral donors Environmental, social, and institutional • USAID • Poverty focus of new act +/- 2 • DFID • Environmental governance of the • Embassy of forestry sector Finland • Ensuring real participation of CFAs • JICA • The need of donor agencies to agree on a policy for supporting resettlement away from forests 17 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report APPENDIX 4 GOVERNANCE AND INSTITUTIONAL ASSESSMENT SECTION 1. FOREST SECTOR STAKEHOLDERS ANALYSIS (NOW AND AS ENVISAGED IN THE ACT) 1.1 Current Situation A detailed stakeholder analysis was undertaken at the start of the situation assessments. The findings can be found in the Social Assessment in appendix 6. In the governance and institutional assessment we have taken the stakeholder analysis results and looked in greater depth at the different institutions and their governance and how these are envisaged in the new Forests Act. <1.1.1. Institutions and organizations involved in forest management A range of institutions1 and organizations2 are directly involved in forest management and conservation of forests in Kenya. The majority of Kenya’s forests are found on gazetted areas.3 The management of gazetted forest reserves is vested in the Forest Department (FD). There are also closed canopy forests gazetted as national parks and national reserves managed by the Kenya Wildlife Service (KWS). Since the early 1990s, certain forests with cultural and biodiversity significance were gazetted as national monuments under the Antiquities and Monuments Act and their management vested in the National Museums of Kenya (NMK). A significant forest area is found in trust land and vested in the respective local authorities under the Ministry of Local Government. There are also indigenous forest areas under private ownership, either as units held individually or within group ranches. Many of these usually small holdings are important for catchment and streamline conservation purposes as well as for providing subsistence and small-scale commercial produce. Forest Department Forest reserves are managed by the FD through the Forests Act (CAP 385) of the laws of Kenya. The FD falls under the Ministry of Environment and Natural Resources (MENR) and is responsible for formulation of policies for management and conservation of forests, preparation and implementation of management plans, management and protection of Kenya's gazetted forests, establishment and management of forest plantations, promotion of on-farm forestry, and promotion of environmental awareness. The FD operates 160 forest stations. All Districts have District Forest Officers, who in turn report to eight Provincial Forest Offices. In the past, the department concentrated on 1. Institutions are the rules of the game, the humanly devised constraints that structure human interaction. They are made up of formal constraints (such as rules, laws, constitutions), informal constraints (such as norms of behavior, conventions, self- imposed codes of conduct), and their enforcement characteristics. 2. An organizations is a group of individuals bound by some common purpose to achieve objectives. Organizations include political bodies (political parties, regulatory agencies), economic bodies (firms, trade unions), social bodies (churches, clubs), and educational bodies (schools, universities). 3. Gazetted areas are land that has been surveyed, demarcated, and gazetted either as Forest Reserves, National Parks, National Reserves, or National Monuments. The gazetted areas can either be from trust land or unalienated government land. 18 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report industrial forestry, but today greater attention is being put to afforestation on smallholder farmland and the conservation of natural forests. At the district level, lack of enough personnel and equipment (including vehicles and office equipment), and dilapidated buildings including staff housing has affected the performance of the department. For example, while the Kenya Forest Master Plan recommends a staff strength of 32 per forest station, it is not uncommon to find a station with fewer than 10 staff members. The FD will be transformed into a new body called the Kenya Forest Service once the Forests Act 2005 is operationalized. This law offers new opportunities in streamlining the forestry sector. Local communities and the private sector are very willing to enter into partnerships with the service once the new law is implemented. At the national level, the department has many constraints, which have resulted in poor implementation of government policies and enforcement of legislation. Resources are limited (both capital and financial) and staffing levels are too low to keep the department fully operational. Existing staff is well trained. The department has poor public relations, attributable to low staff motivation. The main threat to the running of the department is political interference that has contributed to loss of most of the forest cover in the country and low government funding. Kenya Wildlife Service (KWS) The KWS is a semiautonomous government organization responsible for the protection of the nation's wildlife under the Wildlife (Conservation and Management) Act 1985. Management of national parks and national reserves falls under the KWS. Wildlife exists in forests and woodlands within the game parks and reserves. The continued conservation of these habitats ensures favorable ecosystems for the existence of the wildlife. In 1991, KWS and the FD signed a Memorandum of Understanding (MoU). The National Museums of Kenya (NMK) became part of the tripartite MoU when it was added to the KWS-FD MoU in 1996. Unfortunately, this MoU is not a legally binding instrument. It has therefore not been well implemented. Compared to the FD, KWS is well equipped with resources (both capital and financial) to manage areas under its jurisdiction. This has ensured that these areas are well protected from settlement. KWS has trained personnel in the field of conservation. However, most of the personnel lack training in participatory management and this has resulted in poor relationships between local communities and KWS. Local communities perceive that KWS is more interested in wildlife than people. KWS also has poor relationships with the FD due to overlapping mandates, especially in areas gazetted both as forest reserves and national reserves. However, this has improved over time. Recently KWS launched a five-year strategic plan for the organization. It has also together with other stakeholders initiated a process of reviewing the Wildlife Act. Kenya Forestry Research Institute (KEFRI) KEFRI’s mission is to enhance the social and economic welfare of Kenyans through user- oriented research for sustainable development of forests and allied natural resources. KEFRI has five program areas: Plantations, Natural Forests, Dryland Woodlands Forestry, Farm Forestry, and Information Dissemination. It has six research stations. KEFRI is endowed with skilled manpower for research—about 100 scientists have education above masters level. The major constraints in execution of its activities are low capacity (especially to publish and disseminate research findings, meet increasing demands for tree seeds, information technology, and revenue generation) and inadequate funding. 19 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report National Museums of Kenya (NMK) NMK is mandated under the National Museums Act (CAP 216) to serve as a national repository for collections of scientific, cultural, technological, and human interest. Additionally, the Antiquities and Monuments Act is implemented by the NMK. NMK has therefore been responsible for the surveying and gazetting of forests of cultural and biodiversity significance as national monuments. NMK has skilled manpower, political goodwill, an international reputation, and strong research programs. On forest management, NMK’s main constraints are weak links with other stakeholders, inadequate funding, and low staff morale. National Environmental Management Authority (NEMA) The Environmental Management and Co-ordination Act (EMCA), 1999, established NEMA. NEMA is a corporate body mandated to exercise general supervision and coordination over all matters relating to the environment and the principal instrument of government in the implementation of all policies relating to the environment. Several committees are established under NEMA, including the National Environment Action Plan Committee, which prepares national environment action plans for consideration and adoption by the National Assembly; the Standards and Enforcement Review Committee, which advises NEMA on criteria and procedures for the establishment and measurement of quality standards; the National Environment Trust Fund; Provincial and District Environment Committees; the National Environment Restoration Fund; the Public Complaints Committee; and the National Environmental Tribunal, the latter two of which operate independently from NEMA. With respect to forests and forest conservation, EMCA gives every Kenyan locus standi to complain on environmental degradation; provides for protection of forests; allows the Director General to enter into contractual agreements with private land owners with a view to declaring such land forest land; and provides for Environmental Impact Assessments (EIAs) of forestry-related developments. NEMA is not well known at the local level where it is represented by the District Environment Officer (DEO). As a recently formed institution, NEMA does not have the required capacity and resources (capital and human) to coordinate environmental matters in the country, both at the national and local level. DEOs are not well prepared to conduct their activities and in most areas, equipment is lacking. Virtually all DEOs have neither transport facilities nor office equipment. The budget allocated to DEOs is also very low, hindering proper coordination of environmental matters at the local level. A major strength of District Environmental Committees is the representation of all lead environmental agencies at district level and representation of civil society, which promotes wider stakeholder involvement. Since its creation, NEMA has done little to prevent forest degradation. Nyayo Tea Zone Development Corporation The Nyayo Tea Zone Development Corporation was established in 1986 with the following objectives: • Protecting indigenous forests threatened by human encroachment and over exploitation, thereby contributing toward global environmental and biodiversity conservation 20 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report • Providing alternative sources of earnings through employment in intensely managed Nyayo Tea and fuelwood plantations • Developing rural infrastructure through the construction and maintenance of roads, bridges, leaf-buying centers, tea factories (where currently none exist), staff houses, telephone communications, and electricity and water supplies Under the Nyayo tea zones, buffer zones were established in some indigenous forests to contain human encroachment. Establishment of the buffer zones involved the clearing of 100 square meters of the forests and planting them with tea. Though the intention was good, it was abused, resulting in the clearing of more than the specified 100 square meters and opening up of areas that were not suitable for tea. Nyayo Tea Zone has failed to replant land found to be unsuitable for tea. There has been public pressure to have some of these lands converted back to forestry. Nyayo Tea Zone Development Corporation is driven by commercial interests and has done little to promote forestry. It is concerned more with development and marketing of tea. Professional forestry capacity is lacking in the organization. The African Development Bank has provided support to Nyayo Tea Zone through the Green Zone Development Project. This project, which targets four regions— Aberdares, Mau, Cherangani, and Mount Elgon forests—runs for six years starting in 2006. The project focus is on providing support to forest-adjacent communities, including the development of woodlots, agroforestry, income-generating activities, micro-irrigation schemes and micro- electricity generating schemes, rehabilitation of degraded forest areas, and consolidation of the tea belt. One of the concerns raised in implementation of the project is on the consolidation of 5,000 hectares because this may mean conversion of indigenous forest areas. Department for Resource Survey and Remote Sensing (DRSRS) Though not involved in decision making in forest management, DRSRS as a service department is a key monitoring institution. It is mandated with the collection, storage, analysis, and dissemination of data on natural resources. The department’s programs and activities are executed in four major themes: aerial surveys, ground surveys, remote sensing, and data management. The department is well equipped with facilities for data collection and analysis. It has provided the KWS with wildlife sensors, but has done very little in forest cover monitoring for the FD in the past. Due to its capacity to monitor forest cover changes over time, if strengthened, the department would complement the FD’s efforts in future monitoring. Currently, DRSRS is understaffed and has limited financial capacity to play this role. Local Authorities The local authorities are mandated with the management of natural resources within their jurisdictions. Capacity (financial and human) of the authorities to manage forests is low. Forest conservation is not a core function of local authorities and little attention is therefore given to forestry. Corruption and political interference in running of local authorities is rampant and has contributed to the loss of some of the local authority forests. Extensive destruction of forest resources is occurring on trust land forests through expansion of agricultural land, charcoal burning, and timber extraction. There is a need to have the forest management roles of local authorities defined in the Local Authorities Act. There were attempts to have the Local Authorities Act reviewed, but this was shelved pending the review of the Constitution. 21 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Private sector institutions A number of forests are managed by private sector institutions including tea estates, especially around Kericho for fuelwood and pole production; church institutions; private land owners; and communities. Kakuzi Ltd has established exotic plantations for charcoal production and posts. These private sector forests are generally small and are usually managed for specific purposes including fuelwood production, commercial activities, and cultural values. Large companies have good investments and because they are not tied to government bureaucracy, they are able to establish plantations easily. The only threat faced by the private sector is competition with illegal forest products, which are always cheaper. A summary of institutional strengths, weaknesses, opportunities, and threats is presented in annex A4.1 to this appendix. 1.2 Future Situation The Forests Act 2005 creates the KFS and supportive institutions for management and conservation of all types of forests. Though the act recognizes management of local authority forests under relevant local authorities, private forests by the private sector, and state forests by KFS, it gives KFS a supervisory role in management of all types of forests and defines how each category of forests will be managed. The act creates various new institutions to steer forest sector development. This section analyzes these institutions and the roles and expectations envisaged under the act for local authorities and the private sector. 1.2.1 National level Kenya Forests Service Board The act creates a Kenya Forests Service Board drawn from relevant government ministries and more important, eight other persons, not being public servants, appointed by the Minister to provide overall direction to the KFS. There are two areas of concern: first, ministerial appointments in the past have been abused through nepotism; second, the act mandates the appointment of the chairman of the board by the President. This position may be politicized. Kenya Forest Service (KFS) The Forests Act 2005 applies to all type of forests and woodlands on state, local authority, and private land, as opposed to the Forests Act (CAP 385), which concentrated on protected government forests. The act establishes the KFS as a semiautonomous body to replace the FD, which has the overall responsibilities of formulating policies regarding the management, conservation, and use of all types of forest areas in the country and protecting all forests in Kenya. This is a departure from the current scenario where the FD is limited to management of forest reserves, thereby leaving other types of forests vulnerable to degradation because of the limited management capacity within the other institutions, especially local county councils. Most of the local authority forests are mismanaged; the provision to temporarily assign these forests to KFS for rehabilitation before reverting them back to their owners may financially overburden the KFS, especially for those forests with no tangible income to be used for that rehabilitation. Currently, the FD has no legal mandate to arrest forest offenders in local authority forests, but this mandate is now given by the new act. Forest offenders have previously been given lenient sentences and fines that do not deter them from again engaging in illegal forest activities. This is partly attributed to the fact that government prosecutors, who are not trained 22 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report on environmental issues, are sometimes not able to articulate the damage caused by these activities. The act now offers training of forest officers as prosecutors. The Forests Act (CAP 385) had a weak funding mechanism. The new act creates the Forest Management and Conservation Fund for purposes of funding activities of the KFS and other objects of the act. This is an important feature because the Ministry of Finance is currently the only source of funds to the FD. All revenues produced by the FD go to the Ministry of Finance. It is important to note that there is a mismatch in revenue provided by the FD to the Ministry of Finance and funds allocated to the department each financial year for its activities. Mostly, financial allocations are based on a sector’s contribution to the national economy and that for the forestry sector has always been undervalued, resulting in low funding to the sector. The envisaged fund will address this problem because funds accruing to the service, donations, grants, bequests, gifts, appropriations by parliament, levies on forest beneficiaries, and income made from investments will go to the fund. The Forests Act 2005 allows for fees to be levied upon forest beneficiaries for forest management and conservation. Such levies will be based on the economic value of forest- related environmental services, such as water, biodiversity, carbon, and ecotourism. The main challenge will be the appointment of the Director, which will not be subject to parliamentary approval. Like the chairman of the KFS Board, the position may be politicized. Finance committee A finance committee will be established and mandated to administer the Forest Management and Conservation Fund. One of the functions of this committee is to keep and maintain audited accounts of the fund, a role that brings accountability and transparency in the operation of the fund. The act defines neither eligibility nor composition of the committee, which will be appointed by the KFS Board. 1.2.2 Local level Forest conservancy committees The new act allows for an ecosystem management approach whereby forest conservancy areas will be created to be managed through Forest Conservancy Committees (FCCs), forest divisions, and forest stations. Eight conservancy committees are envisaged. The act devolves forest management to FCCs. Apart from government officers, each committee is to have four representatives from forest associations operating in the conservancy area. These will be nominated by forest associations operating in the area. It would be desirable to have a forum for forest associations in conservancies, which would then nominate representatives to the FCCs. These committees will play a vital role in linking local communities’ interests to policy makers (the KFS Board) as provided for in one of its functions, which is to inform the Board on the ideas, desires, and opinions of the people within the forest conservancy area in all matters relating to the conservation and use of forests within such area. The conservancy committees do not have clear links with other committees, such as catchment areas committees, which will be established under the Water Act 2002 once 23 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report important catchment areas are defined and gazetted under the Water Act. It will also be challenging to manage forest ecosystems whose boundaries may not necessarily follow the administrative boundaries established by the Constitution (if this is going to be the case). The Constitution, the supreme law of the country, is currently under review. The draft Constitution subjected to referendum last year, which was rejected by Kenyans, had placed all natural resources under management of districts, which is in conflict with what is stipulated by the Forests Act. Community forest associations The act has clear provisions for the recognition and role of community forest associations in forest management. Members of a forest community and local residents who form such associations may apply to the KFS for certain privileges in relation to management of particular forest areas and forest produce rights in relation to those areas. The act enables members of a forest community to enter into partnerships with the KFS through registered community forest associations. Such partnerships can be for state forests or local authority forests. This opens doors for local communities to directly participate in protection, conservation, and management of a given forest area subject to provisions of a management plan for the forest. The act provides some of the user rights to be conferred on the association. Some of these user rights include collection of medicinal herbs, harvesting of honey, harvesting of timber or fuelwood, grass harvesting and grazing, collection of forest produce for community-based industries, ecotourism and recreational activities, scientific and educational activities, plantation establishment through nonresident cultivation, contracts to assist in carrying out specified silvicultural operations, development of community wood and nonwood forest-based industries, and any other benefits that may from time to time be agreed upon between an association and the KFS. These rights have been given so long as they do not conflict with the conservation of biodiversity. In anticipation of implementation of the act, most local communities have formed associations, while others are in the process. However, most still remain unorganized while others are not genuinely being formed for conservation purposes and still others are driven by self-interest. It will also be challenging to implement participatory forest management (PFM) in view of the lack of clear mechanisms for benefit sharing and the slow rate to embrace PFM among foresters. Local authorities The act creates local authority forests under management of relevant local authorities through management plans. The act allows the KFS to manage provisional (mismanaged) forests with an arrangement to revert to the owner once it has been rehabilitated and the owner has undertaken to efficiently manage it. The act also mandates local authorities to ensure creation of mini-forests, arboreta, or recreational areas with technical input by the KFS. As noted earlier, most of these authorities are capacity handicapped and most of their forests may be declared provisional forests, which may also be contentious depending on the conditions set. Private sector The act empowers the private sector to manage privately owned forests, including through provision of technical advice by the KFS and loans from the Forest Management and Conservation Fund. The act provides for concessions of forest plantation to the private sector and provides incentives for private forest development through land tax exemptions. 24 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Table A4.1 Stakeholders Identified in the Act and Their Roles in Implementation: Challenges and Opportunities Stakeholder Foreseen roles Challenges and risks Opportunities National level Kenya Provide overall Appointment of the eight The act allows for involvement Forest policy direction to non–public servants by of eight non–public servants to Service the Minister may be the board. the KFS Board abused Appointment of the Chairman of the Board may be politicized Kenya Policy Appointment of the Operation of KFS as a Forest Director, which is not semiautonomous body formulation, Service management and subjected to protection of all parliamentary approval, Act creates funding may be politicized. mechanisms for the KFS types of forests (through the fund and KFS may be financially conservation levies). overburdened by too many provisional forests Act gives powers to KFS to formulate policies and guidelines and draw up or assist in management plans for all types of forests. Act gives prosecution powers to forest officers to arrest forest offenders in all type of forests and prosecute forest cases. Finance Administration of Lack of definition of Act provides for transparency Committee eligibility criteria of the and accountability in the Forest Management and committee opens a management of finances of the Conservation loophole in its fund through annual audits. composition Fund Local level (district and local authority level) Forest Oversee proper Lack of clear linkages of Act enables management of Conservancy and efficient FCC with other forests through an ecosystem Committees management of committees (for example, approach. (FCCs) forests in their catchment areas areas of committees under the Act devolves forest jurisdiction Water Act 2002). management through FCCs that draw representation from Management problems in local communities. running of FCCs may arise from the administrative boundaries established under the Constitution Conflict with Constitution if in future it gives districts absolute mandates over management their natural 25 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report resources Community Participation in Most communities are not As opposed to the current Forest conservation and organized situation, the act has clear Associations management of provisions for local community a state or local Some community involvement through forest authority forest associations are not associations. genuine partnerships, others are driven by self- interest Forest benefit sharing poses a challenge in PFM Most foresters will take their time to embrace PFM Local Management of Inadequate capacity Act brings professionalism in authorities forests declared (human and financial) the management of trust land as local authority within most local forests. forests authorities may result in most of these forests being declared Act mandates local authorities provisional forests. to ensure creation of mini- forests, arboreta, or Declaration of forests as recreational areas with provisional forests may technical input by KFS be contentious. Private Management of Declaration of forests as Act allows for registration of sector private forests provisional forests may private forests and provision of and forest be contentious services by KFS for their plantations management and provides for land tax exemptions. Act allows for mandatory rehabilitation of degraded forests through temporary takeover as provisional forests. Act allows for private sector involvement through concessions, licenses, contracts, and joint agreements. Source: FRR 2007. 26 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report SECTION 2. ANALYSIS OF FOREST INSTITUTIONAL ISSUES VIS-À-VIS FORESTS ACT 2005 Institutions include both formal and informal interactions between individuals and groups in society. Put simply, they are the rules of the game, the humanly devised constraints that structure human interaction. They are made up of formal constraints (such as rules, laws, and constitutions) and informal constraints (such as norms of behavior, conventions, and self-imposed codes of conduct). Defined in this way, the institutional assessment asks the question “To what extent do formal and informal rules support the introduced changes in the new Forests Act?� This section of appendix 4 looks at the formal and informal institutions in Kenya and how they support or hinder the introduced changes in the new Forests Act 2005. 2.1 Formal Institutions in Kenya Until 1999, when the Environmental Management and Coordination Act (EMCA)4 was passed, environmental law in Kenya was to be found in over 70 sectoral laws governing wildlife, forests, land use, and water, among others. EMCA provides for the establishment of an appropriate legal and institutional framework for the management of the environment. Among other things, it establishes guidelines on cross-sectoral issues such as forest management. It is expected that all sectoral environmental laws will be revised and harmonized with the provisions of this framework law. This includes forestry legislation. The Forests Act 2005 seeks to align laws governing forests with EMCA. The Director General of the National Environmental Management Authority (NEMA), the institution charged with overseeing the implementation of EMCA, is among the members of the proposed Kenya Forest Service (KFS). The Forests Act 2005 also requires, among other things, the carrying out of environment impact assessments as required by EMCA. Kenya’s forest law and policy are scattered in different laws, from the Constitution as the supreme law of the land to master plans, policies, and laws dealing with land tenure and land use (land-use planning and agriculture) and sectoral laws on wildlife and water. Presidential decrees have also been used to stem flagrant breaches of the forest policy and act. These decrees are often not backed by legislation and are difficult to enforce. It is against this backdrop that we look at the acts and policies relevant to forest law and policy. It is imperative to note that in line with the Kenya Forestry Master Plan, the government has clearly shifted its natural resource management approach from an exclusionist approach to a more participatory and holistic approach. This change of approach has been backed by an extensive review of policies and legislation under which the environment and natural resources are managed. The policies and legislation greatly support community-based natural resources management. They also reflect a shift from a command-and-control approach in which the acceptable standard is established and the consequences of nonadherence therewith (normally penal sanctions) are set (also referred to as the use of the “stick�) to the establishment of incentives (“carrots�) to elicit acceptable behavior on the part of forest managers. This section of the appendix looks at policies and legislation governing forest management in Kenya. It is divided into nine subparts that cover the following: broad legal principles on environmental management, land tenure, land use laws, sectoral environmental laws, policies applicable to forest management, other relevant policies, provisions of the Forests Act 2005, and institutional implications of the new act. 4. Act No. 8 of 1999. 27 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report 2.1.1 Broad legal principles applying to environmental management Constitution While the Constitution of Kenya contains no direct forest management provisions, section 71, which deals with the right to life, has been interpreted by some to include the right to a clean and healthy environment. The proposed new Constitution (2005), which was rejected in a national referendum in November 2005, contained more explicit environmental protection provisions. It provided for the right to a clean and healthy environment, prevention of pollution and environmental degradation, and promotion of conservation and securing of ecologically sustainable development.5 It also established a National Environment Commission to, among other things, conduct research on the environment and natural resources and examine and regulate resource use patterns and practices. These normative and institutional provisions would have had implications for forest management in Kenya at the macro level. The proposed new Constitution’s provisions on devolution would have had direct implications for the management of forest resources. Two objectives of devolution are to recognize the right of local communities to manage their own local affairs and form networks and associations, and to ensure equitable sharing of national and local resources. These would impact the management of forested areas and the locus for management of devolved local government. As noted above, this Constitution was rejected and section 71 and interpretations thereof remain the broad provisions under which forestry law is anchored to the Constitution. The Environmental Management and Coordination Act EMCA provides for the establishment of an appropriate umbrella legal and institutional framework for holistic and comprehensive management of the environment in Kenya. This act sets out principles to guide good environmental management and provides for an institutional framework for its enforcement through the establishment of the National Environmental Management Authority (NEMA). At section 48, the act provides that the Director-General, in consultation with the Chief Conservator of Forests, may enter into contractual arrangements with a private land owner for the protection of forests. Such an action is, however, predicated on mutual agreement with the land owner as well as respect for the traditional interests of communities customarily resident in such an area. The broad mandate of NEMA is the conservation of biological diversity outlined in section 50, which also has direct bearing on forest resources. More specifically, concern for property rights of local communities; watershed protection; and the requirement for specification of national strategies, plans, and programs for conservation and sustainable use of biological diversity all resonate with concerns for sustainable forest management. The National Environmental Action Plan (NEAP) is a policy document on the protection and management of the national environment and natural resources on a long-term basis. The NEAP was drawn up in 1994 and it sets forth recommended actions to address environmental issues in Kenya. The main objective of the NEAP was to provide coherent instruments for integrating environmental considerations into economic planning and programs for sustainable development, and to deal with protection and management of the national environment and natural resources on a long-term basis. 5. Section 67 of the proposed new Constitution, 2005. 28 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report The document aimed at providing overall guidance on environmental issues to all sectors. It outlined major strategies to achieve policy objectives stated in the report. Two of the proposals made follow: • Review of land use legislation and planning so as to increase productivity, reduce land use conflict, and protect catchments and fragile ecosystems • Biodiversity conservation in forest areas Most of the specific recommendations of the NEAP are enshrined in EMCA. Chief’s Authority Act (CAP 128) The application of this act is predominantly related to law and order but also deals with conservation and management of forests concerned. This act has proved to be useful when dealing with forestry problems outside gazetted forests. The act also empowers the chiefs to play a regulatory role through issuance of forest produce harvesting and movement permits within the limits of their jurisdiction. However, this role has largely been abused and has been regarded as a disincentive to tree planting in farmlands. Indeed, this act should be amended because the duties and responsibilities of the chiefs will conflict with those of Community Forest Associations established under the Forests Act 2005. Trespass Act (CAP 294) This act confers protection to land owned or occupied by virtue of freehold title, cultivated or enclosed land, or any forest area. It is relevant to the control of squatters in Forest Reserves. However, the penalties are low and ineffective. 2.1.2 Land tenure laws Land in Kenya is subject to various policies and laws that can have a direct impact on the conservation, alienation, or excision of forests. Policies in particular have varied aims, some of which may not be beneficial to forest conservation. At the same time, Kenya has committed itself to the conservation of biological diversity, not only through legislation but also through international agreements, in particular the Convention on Biodiversity of 1992. The land tenure systems operative in Kenya have been characterized as private/modern, communal/customary, public/state, and open access. These systems overlap in some cases, especially where the tenure reform process is incomplete, as is the case in the trust land awaiting registration where individuals have rights over land legally vested in local county councils as trustees. Privately owned land composed 6 percent of the total land area in 1990, while government land (formerly crown lands) was about 20 percent and included national parks, forest land, and alienated and unalienated land. The most extensive tenure type, however, is trust land (formerly native areas), awaiting small holder registration that will effectively bring these areas under the private/modern tenure system. They composed 64 percent of total land area in 1990.6 Land in Kenya is owned by four different kinds of entities—the government, county councils, individuals, and groups.7 Different legal instruments govern different categories of land and owners thereof. Furthermore, there are two different systems of registration of land in Kenya —document registration and title registration. Document registration is provided for under 6. See, for example, Ondiege (1996). 7. Kameri-Mbote 2002. 29 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report both the Government Lands Act and the Registration of Documents Act.8 The latter provides for registration of all documents conferring or purporting to confer, declare, limit, or extinguish any right, title, or interest, whether vested or contingent to, in or over immovable property. Title registration is provided for under the Land Titles Act, the Registration of Titles Act, and the Registered Land Act (RLA).9 The RLA was intended to be the overall land law commitment to the private/modern tenure system. The objective of bringing all land in Kenya under this act has not as yet been achieved. Consequently, there is still a plethora of statutes applying to land, which makes land tenure law in Kenya complex and, in turn, impacts land uses such as forest management. The statutes most relevant to forest management are the RLA, the Transfer of Property Act, the Government Lands Act, the Trust Lands Act, and the Land (Group Representatives) Act.10 Individual ownership The RLA and the Transfer of Property Act govern individual ownership of land in Kenya. Both statutes confer upon an owner a fee-simple estate to the land in question. The Registered Land Act applies to the land formerly held under customary law, namely, native reserves and trust land, which has been registered. It does not apply to land held by the government or land held by local authorities. It delimits an individual's property rights to such land after the process of consolidation, adjudication, and registration. The act allows for the ownership under other regimes to be brought within its provisions. The content of property rights one gets under it is absolute and can only be circumscribed, in theory, in exercise of the state's right of compulsory acquisition of land for public purposes after the due process outlined at sections 75 and 118 of the Constitution has been followed. The sale of agricultural land registered under this act is, however, also regulated by the Land Control Act.11 Similarly, the use of agricultural land governed by this act is subject to the provisions of the Agriculture Act. Sections 27 and 28 of the RLA define the quantum of rights that the registered proprietor gets upon registration as absolute ownership of land together with all rights and privileges belonging or appurtenant thereto and not liable to be defeated except as provided for in section 30 of the act. Section 30 lists rights capable of overriding the rights of an absolute proprietor. These do not include forest conservation. Important forest areas such as the Aberdare, Mount Kenya, and Mount Elgon are in areas where registration of land has occurred. Given the wide latitude conferred upon an owner of land under this statute, the capacity of the state to effectively police all forests in Kenya, especially forests on private land, is doubtful. This is because the owner of land has very wide-ranging rights to his property and the interference with these by the state can only lawfully be done when the state exercises its police power. This can only be done where the land owner uses his land in a manner deemed to be against the general public interest, which traditionally has not been perceived to include failure to sustainably manage forests. Additionally, the policing capacity of the state is limited by the deference that our laws and institutions have for private property generally.12 8. Chapters 280 and 285 respectively, of the Laws of Kenya. 9. Chapters 281, 282, and 300 respectively, of the Laws of Kenya. 10. Chapter 287 of the Laws of Kenya, No. 36 of 1978 introduced as an Act of Parliament to provide for the incorporation of representatives of groups who have been recorded as owners of land under the Land Adjudication Act, Chapter 284 of the Laws of Kenya. 11. Chapter 302 of the Laws of Kenya. 12. Kameri-Mbote 2002. 30 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report The Transfer of Property Act governs land in settler and formerly settler occupied areas, designated during the colonial period as the white highlands, because the aim of bringing all land under the RLA has not yet materialized. The bundle of rights one gets under it is the same as what one gets under the RLA and the Agriculture Act provisions also apply to land held under it. Government ownership The taking up of land by the colonial government and the assumption of title to all land in the Crown gave the government the power to assume rights over land and vest them in other holders as it deemed fit. The precursor to the Government Lands Act, the Crown Lands Ordinance Chapter 280 of the Laws of Kenya, was originally passed to make provision for regulating the leasing and other disposal of crown lands. Section 2 thereof defined crown land to mean all lands in Kenya subject to control of Her Majesty by virtue of any treaty, convention, or agreement, or by virtue of Her Majesty’s protectorate and all lands that have been acquired by Her Majesty for the public service or otherwise and includes all lands occupied by African tribes of Kenya and all lands reserved for the use of the members of any African tribe, save only the land in the special areas. Upon independence, the Crown Lands Ordinance became the Government Lands Act, Chapter 280 of the Laws of Kenya under which gazetted forest areas are governed. This means that the state is legally the owner of the land that hosts Forest Reserves and therefore has the rights and responsibilities that flow with land ownership. Group ownership The notion of trust land, as codified in the Trust Land Act, is a way of giving recognition to group and native rights. Trust land consists of areas that were occupied by the natives during the colonial period and that have not been consolidated, adjudicated, and registered in individuals' or group names and native land that has not been taken over by the government. It is governed by the Trust Lands Act and is vested in local authorities designated as councils. Councils manage all the resources within the trust land under their jurisdiction and control the development of that land. They decide on the occupation and use of trust land for grazing and pasturing stock, flocks, and herds and can order occupants to reduce the numbers of their stock, flocks, and herds. They also generally regulate the use and conservation of these areas. Trust land is divided in two—that which is supposed to be registered under the RLA and that which is not for registration. The occupiers of the unregistered land have rights, which are in limbo and awaiting confirmation through registration. These rights are in some cases guaranteed under some form of customary tenure. Conservation responsibilities of the councils include the protection of trees and forest produce on land that does not fall within a forest area as defined in the Forests Act, Chapter 385 of the Laws of Kenya (forest areas are government land). They regulate the felling or removal of such trees and forest produce, ensure that the land is reconditioned, and could prohibit the occupation of any trust land therein. It is notable that tenure to trust land is increasingly changing from the trust status to ownership by individuals, legally constituted groups, and the state. The implications of this change are significant because the controls that the council can exercise over the use of the land are eliminated. The application of customary law is ousted and the land is removed from the ambit of council control for conservation and development purposes. In instances where the state or individuals take(s) over the ownership of the land, access thereto for communities previously occupying the land is curtailed significantly.13 In areas where 13. Kameri-Mbote 2002. 31 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report communal ownership is perceived as capable of encouraging good resource husbandry through the trust land system, land has been parcelled out to groups that do not necessarily have common rules and understanding on the use and management of the land in question. This has negatively affects the management of forest and other natural resources within those areas. The Land Group Representatives Act resulted from the Report of the East Africa Royal Commission of 1953–1955. This report, concluding the policy on land tenure in the East African Protectorate, as Kenya then was, noted that individualization of land ownership should be the main aim but that such ownership should not be confined to individuals. It could also be extended to groups such as companies, cooperatives, and customary associations of Africans. Group or community ownership in Kenya is through the institution of the group ranch, which is a demarcated area of rangeland to which official land rights are granted to a group of pastoralists who graze their individually owned herds on the land. Group ranch status in Kenya is granted to a group of herders that is shown to have customary rights over the range or pastureland in question. The operative statute in this regard is the Land (Group Representatives Act). A group for the purposes of the act is a “tribe, clan, family or other group of persons, whose land under recognised customary law belongs communally to the persons who are for the time being the members of the group, together with any person of whose land the group is determined to be the owner" where such person has, under recognized customary law exercised rights in or over land, which should be recognized as ownership. Each group has to have a constitution and elect, at a meeting of all the members, between 3 and 10 persons to be representatives of the group. The group is also required by law to elect group officers in accordance with the Constitution. The meeting of members has also to make a resolution pursuant to which the group representatives are incorporated. The group gets a certificate of incorporation becoming a body corporate with perpetual succession subject to any conditions, limitations, or exemptions noted on the certificate. They thus have ownership of the land in question in perpetuity and can only cease to be a group by the vote of all members. Group representatives have powers to sue and be sued in the corporate name; acquire, hold, charge, and dispose of property of any kind; and borrow money with or without giving security. They have a duty to hold the property and exercise their powers on behalf and for the collective benefit of all the group members and fully and effectively consult group members in performing their roles. The group representatives are also enjoined to maintain an office and a postal address for the group, hold regular meetings, and keep books of accounts, which should be open for inspection by all members of the group. Most group ranches are in the areas occupied by pastoral communities in Kenya. The composition of group ranches was an attempt at formalizing traditional community structures. The principle idea behind them was to create a land unit smaller than the traditional section but larger than the individual. This smaller unit is not necessarily capable of maintaining economically viable livestock herds. As has been pointed out above, group ranches have not worked as well as was hoped for a variety of reasons. First, while the system was meant to capitalize on traditional institutions to institutionalize sustainable resource management, the group representatives lack the authority of traditional leaders. Second, government policy has tended to emphasize individual rights and there is a prevalent view that the group rights would eventually mature into individual ones. Synchronizing group ranches with Community Forest Associations is going to be a challenge. 32 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Proposed national land policy The Ministry of Lands and Housing has been championing the process of developing a new land policy to deal with, among other problems, wanton destruction of forests, catchment areas and areas of unique biodiversity, and severe competition between wildlife’s needs and those of human settlements. The proposed policy seeks to ensure that the management and use of land-based natural resources by public entities takes into account the need to share benefits with contiguous communities and that such communities are fully involved in the management and development of the resources, including forests. It calls for revisiting the gazettement of forests and protected areas to ensure that these are protected for their intrinsic value to the nation and not for physical exclusion of human beings. More specifically, it advocates for forest conservation to protect water catchment areas from further degradation.14 These provisions resonate with the Forests Act 2005 and the National Forest Policy. Similarly, the proposal for recognition and protection of the rights of forest-dependent or other natural resources–dependent communities, facilitating their access, comanagement, and derivation of benefits from the resources resonate with the principle of community management of forests. 2.1.3 Land use planning Land use planning and zoning laws are important in forest management because they direct the manner in which important areas are to be used and thus have the potential to ensure that resources are sustainably managed. The power of local authorities and the state to regulate the development and use of property (including private property) for the good of the community or country as a whole has long been recognized as legitimate. Land use planning provides a guide for integrating different land uses for the benefit of an entire range, especially in ecologically important regions where different property-rights regimes operate. Broadly speaking, the declaration of areas as protected forests is an aspect of land use planning. The exercise of property rights in Kenya is regulated through land use regulation. General land use planning laws in Kenya fall into two categories—those dealing with urban land and those dealing with agricultural land. In addition to these, Kenya has laws on wildlife and forest conservation that prescribe rules specifically for these areas. It is noteworthy that these statutes concentrate on urban and agricultural development and do not provide for the management of forests or other biological resources found within these areas. They are conceived in a top-down manner and have not generally been crafted to positively affect sustainable resource management. Agriculture Act, CAP 318 Legal regulation of agricultural land use has always been an important facet of Kenya’s resource management policies. The basic legislative instrument for that purpose has been the Agriculture Act. Its objectives are, among others, to provide for the preservation of the soil and its fertility and to promote and maintain the development of agricultural land in accordance with rules of good husbandry. Wide discretionary powers are vested in the minister in charge of agriculture concerning the preservation, use, and development of agricultural land. The Minister or Director of Agriculture may make land preservation orders for agriculture in consultation with the appropriate district agriculture committee or the chairman of such committee in emergency cases to ensure that land is not depleted. Regulations made under these enabling provisions proceed by way of prohibitions with respect to bad land usage to secure the objective of good 14. Government of Kenya, Draft Land Policy, November 2005. (On file with FRR team member.) 33 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report land management. Thus, authorized officers may, on the one hand, prohibit the clearing of vegetation and the depasturing of livestock and, on the other, require under pain of criminal proceedings, the planting of trees to protect the soil from erosion. In addition, the Director of Agriculture can issue land preservation orders to land owners requiring them to adopt a system of management or farming practice or other system in relation to the land in question. The orders involve the undertaking of conservation measures or prohibition of activities incompatible with good land management. Thus, the director may prohibit the clearing of vegetation or the grazing of livestock in vulnerable ecosystems, require the afforestation of land to reclaim areas threatened with degradation, or demand the use of farming techniques compatible with conservation requirements. This legislation covers most of the activities that have contributed to massive land degradation in certain parts of the country. These activities have, however, continued in spite of statutory regulation. The two explanations for this are, first, the scarcity of good agricultural land and the concomitant population and animal pressure on available land, making legal prohibition an ineffective tool in regulating improper land use practices. Indeed, one may conclude that the limits of legal prohibition as a regulatory technique have been reached in Kenya in this regard. Second, the law neither offers incentives for proper land use practices nor encourages free public participation in their implementation. The population is thus neither sufficiently sensitized to the benefits of good land management nor voluntarily associated in the realization of that objective. The command-and-control posture of the law ensures that even private property owners have very little latitude within which to use their rights for the conservation and management of natural resources. Thus, while the law can be used to promote agroforestry, it has not been effective in this regard. The use of criminal law sanctions also creates problems because of the necessity of sufficient policing to detect offenders, which is currently lacking. The holders of private property aim at maximizing the use to which their land can be put and the capacity of the government machinery to police the use of land is limited by high costs and lack of funds. The Physical Planning Act This act makes provision for the preparation and implementation of physical development plans. Development for the purposes of the act is defined to include the making of any material change in the use or density of any land. It makes the preparation of a physical development plan, complying with the requirements of the physical planning liaison committee, a prerequisite for any land development. Two kinds of plans are provided for— regional and local physical development plans. Among the purposes of regional and local physical development plans is securing suitable provision for the use of land. There is room in these regulations for requirements to be made for sustainable resource management as part of the conditions for land development. It could, for instance, be made a condition that development of land in a forest area result in no more than the minimal and unavoidable loss of forest cover and that attempts be made to reconcile the imperatives of forest management with land use. It is surprising that this act was passed as recently as 1996 but it does not address the issue of sustainable biological diversity conservation and management, which has been of concern for some years now. Furthermore, the act uses existing local authorities, which are based on political as opposed to ecological considerations, as units for management. Consequently, the law does not define new parameters for zoning the country based on sustainable resource management imperatives. Moreover, the act stops short of providing for area plans based on compatibility of land uses. It is rigidly concerned with maintaining existing uses and does not provide for rehabilitation measures where existing land uses are inimical to sustainable management of land and other natural resources. 34 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report 2.1.4 Sectoral environmental laws and policies Timber Act CAP 386 of 1972 The act provides for control of the sale and export of timber by means of grading, inspection, and working. It also provides for the control of timber in transit, the export of unprocessed indigenous timber, which is banned at present by a Presidential decree. The legal effect of Presidential decrees that are not followed by legislation is unclear. However, the bans effected through such decrees usually remain in force for a long time and may render an activity illegal indefinitely as vigilant law enforcement officers overreach themselves to satisfy the political elites of the day. Wildlife (Conservation and Management) Act CAP 376 of 1976 and 1989 The Wildlife Act and current Forests Act 2005 are closely related. The Wildlife Act covers the protection, conservation, and management of wildlife (both flora and fauna) in Kenya. It includes the conservation of forests within national parks, national reserves, and sanctuaries, and all wild animals occurring in the forests. Its main components are • establishment of the Kenya Wildlife Service and the Kenya Wildlife Fund and a definition of their respective responsibilities; • control of permitted and prohibited activities in national parks, national reserves, and sanctuaries and in areas adjacent to these gazetted areas to ensure the protection and security of the flora and fauna of their habitats; • control of permitted forms of hunting through licensing and administration of regulations for trophies, game meat, and live animals; and • compensation issues. The act, therefore, establishes rules and regulations for wildlife resources management and coordination for maximum economic returns to the government. The Wildlife Act further recognizes the role played by different agencies of the government and seeks to establish close collaboration in the management of ecosystems in which wildlife resides, such as forests. Such agencies include the Forest Department (succeeded by the KFS), Fisheries Department, and the local authorities. Kenya’s wildlife policy is contained in Sessional Paper No. 3 of 1975 (GOK 1975) and the Kenya Wildlife Services Framework and Development Program, 1991–1996, produced in 1990 (the “Zebra Book�) with respect to forest management and conservation. The policy endeavors to conserve the natural resources (flora and fauna) within national parks and national reserves for the benefit of the community. Within national parks, the policy specifies nonconsumptive use of forest resources, and therefore the main source of revenue is from recreation and tourism. At the same time, there is a policy of benefit sharing with the adjacent local communities, which has been implemented, so that they do not have to get resources directly form the national parks and reserves. To protect a wildlife habitat outside the national parks, the FD and the KWS implemented a Memorandum of Understanding (MoU) that was signed on December 5, 1991. The MoU stipulates joint management of some forests, which are rich in biodiversity. Hence, the FD collects revenue from all forest products while the KWS collects revenue from tourism. The 35 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report revenue collected from these two sources is thereby used for the conservation of natural forests covered by the MoU. The recognition for the need to revise the wildlife policy and act have been felt for a long time and unsuccessful attempts have been made since the 1990s to replace the 1975 policy and the Wildlife Act. There is agreement that the revision of that law and policy must incorporate stakeholders other than the KWS in wildlife management. A 1998 draft wildlife bill had provided for the establishment of Community Wildlife Associations.15 This proposal, if taken up in future reform initiatives, will require synchronization with Community Forest Associations under the Forests Act. Antiquities and Monuments Act CAP 215 of 1984 This act provides for the gazettement of national museums, including protected areas, some of which include some indigenous forests. Since the 1990s, certain forests of cultural and biodiversity significance were gazetted as national monuments under this act; key among these are Kaya Sacred Forests found in coast province; the City Park; the Gede Ruins; the Nchuri Ncheke, and Mukurwe wa Nyagathanga in Murang’a. Fisheries Act CAP 378 of 1989 This act contains provisions relevant to forestry. It regulates trout fishing in forests and protects fish breeding areas. The latter provision is most relevant to mangrove forests and their management. Water Act 2002 The Water Act lays out mechanisms for the development of natural water resources and a management strategy for the management, protection, use, development, conservation, and control of water resources. Regarding the forestry sector, the national strategy under the act is required to encompass mechanisms for determination of important water catchments. The strategy devolves the authority for conservation of such catchments to the local stakeholders who manage the catchment areas in collaboration with the Water Resources Management Authority, also established under the act. The strength of this act is in its endeavor to promote participatory forest management in water catchments. This is seen through the devolution of roles and responsibilities to the stakeholders, who not only participate in the development of catchment management plans, but also are responsible for conflict resolution, cooperative management, and providing catchment and water resources use and management advice to the Regional Office of the Water Resource Management Authority. This allows social, economic, and ecological aspects of the catchments to be incorporated in the management plans. The main objective of the Water Policy, as set forth in Sessional Paper No. 1 of 1999, is the supply and distribution of water resources throughout Kenya. It recognizes the fact that increased human activity in catchment areas has reduced forest cover and thus is a threat to water. 15. The Kenya Wildlife Service Draft Wildlife (Conservation and Management) Bill 1998. (Draft on file with the FRR team member.) 36 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report 2.1.5 Laws and policies on forests Forests Act CAP 385 (now repealed) and Kenya Forestry Master Plan The now repealed Forests Act CAP 385 of 1962 (revised in 1982 and 1992) was originally drafted in support of the Forest Policy of 1957. The act allowed for gazettement of forest areas on state land and the control and use of these areas. The act also covered • gazettement and de-gazettement and alteration of forest reserves boundaries; • gazettement and regulation for nature reserves; • issuance of licenses for various forms of use, and setting of royalties and fees under the forest rules; • prohibition of various activities in forest areas; • procedures for enforcing the Forests Act and penalties for breach; and • rules for regulating sale and disposal of forest produce, other uses and occupation of forests, licensing, and entry into forests; and • subsidiary legislation concerning the rights of local people to use certain named forests in prescribed ways. While the repealed Forests Act provided a sound basic structure for forest management, it proved deficient in various ways, such as • coverage of selected forest reserves; • over concentration on harvesting of forest produce and not on sustainable forest management; • inadequate consultative procedures during the process of excision; • failure to adequately cover the needs of local communities, leading to conflicts that resulted in forest degradation and loss of forest area; • failure to recognize the importance of forests and environmental protection; • failure to allow for multiple uses of forest reserves, even where this would have been compatible with the major forest management objectives; • failure to adequately deal with tourism; • at 40 years old, no longer reflective of current economic, climatic, biological, and social realities; • not covering issues of farm forestry; • inadequate for ensuring market price for forest products; • vested the agreements and licenses at the discretion of the minister; • provided for funding of the forestry sector by only the government and hence was solely dependent on budgetary allocations; and • penalties were outweighed by economic benefits of the forest products or breach of the act and hence were not deterrent. All these weaknesses of the Forests Act CAP 385 were identified in the process of preparation of the Kenya Forestry Master Plan, and from these emanated the Forests Policy of 2004, revised in 2005, and the Forests Act No. 7 of 2005. The Kenya Forestry Master Plan (KFMP) was developed in 1994 as a forest sector master plan that set out national goals, objectives, and strategies for the forestry sector. On indigenous forests, the master plan program objective is to conserve the soil, water, biodiversity, and growing potential of these forests, and to put them under effective 37 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report management so that they yield a sustained flow of products and other benefits. To attain this objective, the master plan envisaged institutionalizing or strengthening • resources surveys, assessment, and monitoring; • multiple-use zoning of indigenous forests; • organization and recognition of forests; • forest extension; • preparation of management plans; and • regulation of forest use. On plantation development, the long-term objective of industrial plantation management is to satisfy the country’s need for industrial and construction wood originating from the share of wood products in the final demand in the economy, at all states of development. To attain this objective, the master plan sought to • improve managerial input in plantation management; • rationalize the management of existing and future plantations; • increase revenue collection rates; and • increase the consumption of labor services and complementary inputs. Forests Act No. 7 of 2005 The new Forests Act was passed by Parliament in 2005 and received Presidential Assent on November 23, 2005. This new legislation is a departure from the old Forests Act, being more comprehensive and covering aspects of community participation and multiple stakeholders’ involvement in forest development. A Forestry Service (KFS) is established, which is a body corporate responsible for • formulation of forest sector policies; • management of all categories of forests; • promotion of forest education; • providing forest extension services; • in collaboration with research institutions, identifying research needs and applying research finding; and • enforcing conditions and regulations relating to all forest utilization activities. In addition to the above, the Forests Act has clear provisions for participatory forest management and user rights for local communities; provides for management of all catchment areas with linkages to agriculture and the water sector; provision for environmental impact assessments, public consultations, and parliamentary approval before degazettement of forests; establishment of a Forest Management and Conservation Fund, which receives funds from sources other than treasury allocations; and provides for higher penalties that will seek to deter those who engage in unlicensed and illegal activities, such as logging and charcoal production. National Forest Policy Kenya’s first official forest policy was formulated in 1957 through White Paper Number 85; this policy was subsequently restated by the government of Kenya in 1968. This was replaced by the Forest Policy of 2004, revised in 2005, which is yet to be operationalized. The proposed Forest Policy’s (2005) broad objective is to “increase the forest and tree cover 38 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report in the country in order to ensure an increasing supply of forest products and services for meeting needs of present and future generations.� The specific objectives are set out as follows: • Contribute to poverty reduction, employment creation, and improvement of livelihoods through sustainable forest management • Conserve the natural habitat of wildlife and biological diversity • Contribute to sustainable land use through soil and water conservation, tree planting, and appropriate forest management • Manage the forest resources on a sustainable basis • Promote the participation of the private sector, communities, and other stakeholders in forest management • Promote farm forestry • Promote dry land forestry • Reserve in perpetuity the existing forests, and whenever possible, add to them to conserve soil and water, and provide timber and other forest products to the community for export • Protect the forest estate from damage from grazing or fire, and eradicate private rights in the government forest estate • Manage the government forest estate on a sustained yield basis and make and maintain an inventory of forest resources • Encourage and assist in the establishment and maintenance of forests managed by county councils or area councils for local authorities. The National Forest Policy 2005 stipulates that sufficient land should be reserved for forestry purposes in view of the importance of provision of forest products, and of indirect benefits, such as soil and water conservation. Furthermore, the policy states that forests should be managed on a sustained yield basis, so that Kenyans will continue to receive forest products in perpetuity. Forests are also recognized as being important for recreation and as habitats for the country’s wildlife. Additionally, this policy envisaged a situation whereby the FD and the relevant county councils would manage forests under the respective county councils . This proposed Forest Policy of 2005 was not adopted and has to be reintroduced in Parliament for official adoption. 2.1.6 Other relevant policies National Food Policy Most of the activities of the agricultural sector are governed by policies on food. Policies and objectives are elaborated in the National Food Policy, Sessional Paper No. 2 of 1994, which is an extension of Sessional Paper No. 4 of 1981 and No.1 of 1993. The primary objectives of the current National Food Policy are food self-sufficiency and security at the household level. Another key objective is the generation of raw materials for domestic industries and agricultural exports. While the National Food Policy outlines the necessary strategies to achieve these aims, it does so in recognition of the fact that high-potential land is extremely limited, and the population continues to increase. It is stated in this policy that no further destruction of forests should occur, in light of their ecological importance. However, the policy refers only to 39 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report gazetted forests and those under various county councils. The policy indicates that there is room for more land to be brought under cultivation in the Coast, Western, and Rift Valley provinces, and hence it can be assumed that on-farm patches will be targeted for conversion to produce more food. National Energy Policy The policy ensures that the relevant ministries, nongovernmental organizations (NGOs), and other organizations address environmental problems associated with the supply and use of energy including charcoal and fuelwood. The broad objective of the energy policy is to ensure an adequate, quality, cost-effective, and affordable supply of energy to meet development needs, while protecting and conserving the environment. The specific objectives are to • provide sustainable quality energy services for development; • use energy as a tool to accelerate economic empowerment for urban and rural development; • improve access to affordable energy services; • provide an enabling environment for the provision of energy services; • enhance security of supply; • promote development of indigenous energy resources; and • promote energy efficiency and conservation as well as prudent environmental, health, and safety practices. Poverty Reduction Strategy Paper (PRSP): Government Action Plan, September 2002 The government of Kenya published this strategy paper in 2001. The strategy paper had two main goals—poverty reduction and economic growth. The PRSP has identified the forestry sector priorities as • streamlining policy, legal, and regulatory framework for forest management; • enhancing community participation in the management of forest resources; and • mitigating uncontrolled deforestation and excision of forest. This paper notes that stakeholder participation is necessary for sustainable forest conservation and management, and calls for the full involvement of communities in environment management and conservation. Other measures are the increased use of improved stoves and on-farm planting of trees. It also envisages the promotion of alternative energy sources, including biomass. 2.2 Institutional Implications of the New Forests Act 2005 on the Forestry Sector The Forests Act of 2005 is divided into six parts and three schedules. These have clear provisions when compared to Forests Act CAP 385. This section highlights the various provisions provided for by the Forests Act 2005 to enhance forest sector development. 2.2.1 Part 1 – Preliminary 40 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report This part names the proposed act and provides for its application generally to forests situated on government, local authority, or private land. It defines words and expressions used in the act. Highlights. The act applies to all types of forests and woodlands on state, local authority, and private land as opposed to the Forests Act CAP 385, which concentrated more on protected government forests. <2.2.2 Part 2 – Administration This part establishes the Kenya Forest Service (KFS), defines its principal functions and powers, and provides for its staff and its financing and audit. The KFS has overall responsibility for enforcing the provisions of the act with respect to conservation and management of forests. A Forest Management and Conservation Fund is established for funding the activities of the KFS and other objectives of the act. Highlights follow: 1. The Forests Act CAP 385 had a weak institutional mechanism. The new act establishes the KFS as a semiautonomous body to replace the FD, which is a full- fledged government institution. It will be managed by a Board drawn from relevant government ministries and more important eight other persons, not being public servants, appointed by the Minister. 2. One of the functions of the KFS is to formulate for Board approval policies regarding the management, conservation, and use of all types of forest areas in the country and protection of all forests in Kenya. This is a departure from the current scenario in which the FD is limited to management of forest reserves, leaving the other types of forest vulnerable to degradation because of the limited management capacity within the other institutions, especially local county councils. Currently the FD does not have legal mandate to arrest forest offenders in these forests. 3. The new act reintroduces the appointment of honorary foresters, a concept drawn from the 1911 Forest Ordinance. Rules will be made to define functions of the honorary foresters. 4. The new law allows for an ecosystem management approach, whereby forest conservancy areas will be created to be managed through Forest Conservancy Committees, forest divisions, and forest stations. Nine conservancy committees are envisaged. Apart from government officers, each committee will have four representatives from forest associations operating in the conservancy area. These committees will play vital roles in linking local community interests to policy makers (the Board) as provided for in one of its functions, which is to inform the Board on the ideas, desires, and opinions of the people within the forest conservancy area in all matters relating to the conservation and use of forests within such area. 5. The Forests Act CAP 385 has a weak funding mechanism. A Forest Management and Conservation Fund is created by the new act to fund activities of the KFS and other objectives of the act. This is an important aspect because the FD’s only source of funds was from the central government central coffers at the Ministry of Finance. The envisaged fund will now include, in addition to the budgetary funds, donations, grants, bequests, gifts, appropriations by parliament, levies upon forest beneficiaries, and income made from investments. 6. The Forests Act 2005 allows for fees to be levied upon forest beneficiaries for forest management and conservation. Such levies will be based on the economic value of 41 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report forest-related environmental services such as water, biodiversity, carbon, and ecotourism. 2.2.3 Part 3 – Creation and Management of Forests Part 3 provides the basic scheme of the act for forest management and the allocation of forest user rights. Sections 21–25 provide for creation of forests and rights to forest produce. Under this part, all forests and user rights are vested in the state, save to the extent allowed by alienation or by way of customary rights recognized by the act. It also provides for creation of various categories of forests (state, local authority, private) and declaration of provisional (mismanaged) forests and the process of reversion to original owner. Sections 28–29 deal with variation of forest areas through a consultative process accompanied by an independent environmental impact assessment (EIA) and approval by Parliament. Section 30 provides for establishment and maintenance of arboreta, mini-forests, and recreational parks for the nonconsumptive use of persons residing within its area of jurisdiction. Sections 32 and 33 empower the Minister on advice by the KFS and the local authorities to create nature reserves in areas of particular biodiversity and natural amenities and to regulate their use. Section 34 provides for designation of certain trees as protected trees by the President and attaches penalties for destruction of such trees or interference with them. Sections 35–45 deal with forest management plans for state and local authority forests that are to be adopted by the responsible authority. Highlights follow: 1. Much of the current forest loss is attributed to forest excisions under Forests Act CAP 385, section 4, which permits the Minister to gazette and degazette forest reserves. Ministers who make unilateral decisions without any consultations or environmental assessments have in most cases abused this section. The Forests Act 2005 allows for public objections within 28 days to alterations of forest boundaries, though the procedures for objection is not laid out, but expected in the rules. In the past, objections from members of the public were not acknowledged and the excisions continued despite the objections. Stringent measures have now been put in place in the Forests Act 2005 for conversion of forest land to other uses through application of EIA, consultation with local Forest Conservation Committees, approval of the change of user by Parliament, and public consultations. The Kenya Gazette was the main mode of announcement for alterations or additions to forest reserves under the Forests Act CAP 385. Many Kenyans do not access the Kenya Gazette and may not therefore be in a position to offer any objections. The old act also required that any objector establish locus standi to bring any objection; because of this need to prove being aggrieved, few objections succeeded. These provisions have been revised in the Forests Act 2005, which now provides for the announcements to be made in at least two national newspapers, at least one newspaper circulating in the affected area, and at least one radio announcement broadcasting in that locality, in addition to the gazette notice. The act removes the locus standi requirement. The act also mandates the responsible authority to consider objections or comments made by the public on the change of use and publish through the same media the decision made. 42 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report 2. There will now be much wider participation in forest management. The Forests Act CAP 385 lacked an objective basis for the establishment and recognition of forests under management of other stakeholders. The Forests Act 2005 has opened doors for wider participation through joint management agreements. 3. The Forests Act 2005 has clear provisions for sustainable management of indigenous forests through management plans, which are lacking in the Forests Act CAP 385. Related to this, the Forests Act 2005 has clear provisions for protection of catchment areas with linkage to agriculture and water sectors. 4. The act provides for joint management of plantation forests owned by the state through concession, license, contract, joint agreement, or other arrangements. Currently this is done through one-year permits that do not encourage the private sector to invest in the timber industry because of uncertainties in allocation of the permits, some of which have in the past been given to saw millers. 5. Forests Act CAP 385 lacked incentives for community and private sector involvement in the forestry sector. This has been counterproductive to conservation. The Forests Act 2005 promotes tree growing by the private sector, farmers, and communities through incentives. The act provides for registration of private forests. Upon registration, the owner is entitled to technical advice from the KFS and, subject to availability of funds, loans from the Forest Management and Conservation Fund. The owner may also apply for exemption from payment of all or part of the land rates and such other charges as may be levied in respect of the land on which the forest is established. These incentives will stimulate the creation of socially, environmentally, and economically sustainable forest industry–local community partnerships and attract new private sector investment. 6. The Forests Act CAP 385 provided no obligation to stakeholders to rehabilitate degraded forest areas. The new act provides for mandatory rehabilitation of degraded forest areas through the temporary take-over of destroyed areas by KFS as provisional forests. 7. There is no provision for urban forestry in the old act. The new act provides for urban forestry through creation of arboreta, recreational areas, and mini-forests. For example, one of the provisions is that the local authorities should ensure that mini- forests are established at the rate of at least 5 percent of land proposed for housing development. 2.2.4 Part 4 – Community Participation This is a new chapter completely lacking in Forests Act CAP 385. Sections 46–49 of Forests Act 2005 have clear provisions for the recognition and role of community forest associations in forest management. Members of a forest community and local residents who form such associations may apply to the KFS for certain privileges in relation to management of particular forest areas and forest produce rights in relation to those areas. Highlights. The act enables members of a forest community to enter into partnerships with the KFS through registered community forest associations. Such partnerships can be for state forests or local authority forests. This opens doors for local communities to directly participate in protection, conservation, and management of a given forest area subject to provisions of a management plan for the forest. Section 47 states the functions of a forest association and provides some of the user rights to be conferred on the association. Some of these user rights include collection of medicinal herbs, harvesting of honey, harvesting of timber or fuelwood, grass harvesting and grazing, collection of forest produce for community- based industries, ecotourism and recreational activities, scientific and educational activities, plantation establishment through nonresident cultivation, contracts to assist in carrying out 43 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report specified silvicultural operations, development of community wood and nonwood forest- based industries, and any other benefits that may from time to time be agreed upon between an association and the KFS. These rights have been given so long as they do not conflict with the conservation of biodiversity. 2.2.5 Part 5 – Enforcement Part 5 of the Act (sections 50–58) provides for certain powers to be exercised by Officers of the Service in the enforcement of the provisions of the act, and regulates the use of those powers. Additionally, it provides for certain offenses and the manner of dealing with them, and for the right of citizens to take court action to restrain breaches of the act. Highlights follow: 1. The Forests Act CAP 385 had low penalties for offenders that encouraged illegal forest activities. This gap has now been filled in the Forests Act 2005 by raising these penalties with an aim to deter forest offenders from engaging in unlicensed and illegal activities such as logging and charcoal production. 2. Apart from state forests, the act now allows for forest officers to make arrests in local authority forests and provisional forests. 3. The act confers prosecution powers to forest officers above the rank of Sergeant Forest Guard under the Criminal Procedures Code (sections 22 and 23) and section 20 of the Police Act. 4. On penalties, as opposed to CAP 385, the Forests Act 2005 states the minimum fines and imprisonment terms for forest offenders. The Forests Act CAP 385 provided the maximum limits that gave the magistrate wide latitude of imposing low, nondeterrent fines or sentences. 5. Forests Act CAP 385 allowed for compounding of offenses by forest officers where the forest officer could by agreement with the offender accept a sum of money in compensation for the offense instead of taking the offender to court. This has now been removed from the Forests Act 2005 because it contributed to corruption in its implementation. It was also not constitutional because it shifted the burden of proof to the accused. 2.2.6 Part 6 – Miscellaneous provisions Section 59 provides for the Minister to make rules for or with respect to any matter necessary to be prescribed for carrying out or giving effect to this act. Sections 60–63 provide for adherence to international obligations under any treaties and agreements relating to forests to which the government of Kenya may be a party. The sections also provide for development of management plans and entering into joint management agreements for the purposes of the proper management of cross-border forests and forest produce. Furthermore, they provide for application of the Environmental Management and Coordination Act, including making reference to the tribunal established under that act for settlement of disputes. Highlights follow: 1. The Forests Act CAP 385 (1992 revision) had limited rules mostly restricted to payment of royalties and licenses and rules applicable to specific forests. The Forests Act 2005 has expanded the types of rules to be made for implementation of the act. 44 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Such rules include those for regulation of production, transportation, and marketing of charcoal. 2. The old act does not have mechanisms for the management of cross-border forests. The new act has clear provisions for cooperation in the management of cross-border forests. 2.2.7 Part 7 – Transitional provisions Sections 64–67 provide for the repeal of the existing Forests Act and makes provision for a smooth transition. Highlights follow: 1. The act provides for continuation of licenses or permits granted by Forests Act CAP 385 under provisions of the new act. 2. It also provides for vesting of all property by the government for the use of the FD to the KFS. All contracts, debts, obligations, and liabilities of the government before commencement of the act remain vested in the government. 3. All employees of the FD shall at the commencement of the new act be deemed to be on secondment to the KFS until the KFS employs them. 2.2.8 Schedules Schedules 1–3 contain details with respect to officers of the KFS, oath of allegiance for the disciplined officers of the KFS, provisions relating to the conduct of business of the Board, and the procedure for public consultation. 2.3 Implementation of the Forests Act 2005 Implementation of the provisions of the new act is bound to be challenging in light of the current problems facing the forestry sector: 1. Forest settlement. Forest settlement problems in some forest areas poses a challenge in implementation of the act. Settlement in forest reserves is an offense in the act. This situation may be encountered in forest reserves that were gazetted with people in them, such as the Mukogodo Forest Reserve. Currently the government is addressing this issue through forest evictions in areas where it is clear that encroachment occurred in an irregular manner. Forests such as Mukogodo deserve special attention. Most of the forest evictions that have been carried out have generated significant public outcry. This has resulted in the need to address human rights issues in future evictions and resettlement in deserving cases. 2. Monitoring. The Forests Act CAP 385 contributed to forest degradation in the country. While this may be partly true, it is the failure to implement the act, as opposed to the legislation itself, that is to blame. Implementation of the Forests Act 2005, therefore, calls for a mechanism to be put in place to monitor its implementation. 3. Harmonization of policies. There is a mismatch in formulation of sectoral policies that has resulted to conflicts in implementation. For example, under the Water Act 2002, committees will be formed to manage catchment areas gazetted under that act. Most of these are gazetted forest reserves. The Forests Act 2005 also proposes formation of committees at the conservancy level for such forests. There are no clear linkages in the operation of the two committees, whose composition is also different. There is 45 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report also conflict between the Forests Act 2005 and the Wildlife Conservation Act; the latter does not allow for natural resource use within national reserves while the former does. It is important to note that there are forests gazetted as both national reserves and forest reserves (double-gazetted forest areas). 4. Community participation. Though the Forests Act 2005 provides for wider participation in forest management by the local community, there are some emerging community associations that are driven by self-interest and other agendas, making the implementation challenging. 5. Sharing of forest benefits. This has been a bone of contention for a long time. Communities bordering forests have been the main complainants, especially in regard to the direct values, such as extraction of timber. 6. Limited capacity and funding. One of the constraints in forest management, especially for protection and management of forests, is the limited capacity and low funding of the FD. Though this may be addressed by bringing on board other stakeholders and through the creation of the Forest Management and Conservation Fund, it still will remain a challenge in the short term because the KFS is inheriting an institution with very limited capacity in its existing infrastructure and staff. Currently, most of the forest stations are understaffed and are lacking operational facilities, including housing, transport, and other equipment. 7. Local authority forests. Most local authorities also lack the necessary human and financial capacity to effectively manage forests. Yet, some of these forests support the national economy and livelihoods beyond particular local authority administrative boundaries. Financial mechanisms should be explored to ensure that funding for their conservation is also sought from other sources. 8. Overdependence on wood products. The overdependence on wood products should be discouraged and channelled to tap into the opportunities existing in nonwood products. This is a challenge to forestry, especially because most of the forestry training has been wood-oriented. 9. Attitude change. The attitude among foresters should be encouraged to change to bring efficiency into the sector and enhance participatory forest management approaches. This is a challenge because of the forestry-training orientation. 10. Formation of Forest Conservancy Committees. Local communities are yet to form community forest associations (CFAs) in many forest areas. CFAs need to be in place to facilitate formation of FCCs. Once created, the challenge will be the selection of four community representatives to sit on each FCC. This should be done in an open, transparent, and participatory way to avoid court legal applications to halt operation of FCCs by dissatisfied parties. There should be some capacity development to ensure formation of vibrant CFAs and FCCs at conservancy level. Some of the existing opportunities in the implementation of the act include the following: 1. Political will. The Forests Act 2005 has taken a decade to be enacted. The current political will to address some of the challenging forestry issues, such as excisions, which have now been taken care of by the act, should be exploited. Illegal and irregular forest settlements have been the order of the day. There is political will to address this problem. It is crucial that the KFS is launched with forest reserves that have clear boundaries and that are free of settlement. In this line, the government has supported implementation of the 1994 irregularly allocated public lands “the Ndungu Report.� The Ministry of Lands has also made several efforts to recover some of these lands. 2. Forest Sector Steering Committee. The government has formed a committee drawn from various stakeholders for the purposes of directing, facilitating, and overseeing the overall forest sector transition process and to provide leadership to the process of 46 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report transforming the FD to the KFS. This committee provides an opportunity to guide the implementation of the Forests Act 2005. 3. Improved technology. Most of the technologies in use in the country are obsolete and inefficient. The current policy and legislation have deterred the wood industry from investing in new technologies that enhance efficiency. New and emerging technologies should be embraced by the forestry sector now that favorable policies and legislation are available. 4. Donor support. The last decade has seen most of the donors withdraw from funding forestry, mainly because of governance issues, which have now been tackled by the new legislation and the government. 5. East African Community. The formalization of tariffs in the East Africa Region between Tanzania, Uganda, and Kenya will reduce forest-products smuggling, thereby contributing to forest conservation. The East Africa Cooperation Secretariat has a subcommittee on forest conservation and management aimed at integrating regional forest conservation activities in terms of laws, rules, regulations, and standardization of forest products. The Word Conservation Union (IUCN) East Africa Regional office organized an annual meeting for directors of forestry in the region, which offers another opportunity for sharing experiences. 6. Forest advocacy. The current invaluable advocacy groups interested in forest conservation need to be encouraged and supported. The advocacy groups, mainly consisting of community-based organizations (CBOs) and nongovernmental organizations (NGOs), are good campaigners for forest conservation by pinpointing forest ills, offering possible solutions, and even participating in forest conservation activities. 7. Emerging income-generating opportunities in the forestry sector. Poverty has been recorded as one of the main contributors to forest degradation. However, there are opportunities in the forest that can be used to generate revenue for the communities and at the same time conserve the forests. The opportunities in this category revolve around nonwood forest products, including ecotourism development, especially for private investors and organized groups, and butterfly farming and beekeeping for the forest-adjacent communities. 8. Conducive policy and legislative framework. A number of laws support forest conservation and management in the country, despite the fact that most are not well harmonized. These include the Environmental Management and Conservation Act (EMCA) and the Water Act 2002. These, if used together with the Forests Act, can greatly contribute to protection and proper management of forests in Kenya. 47 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report SECTION 3. ANALYSIS OF FOREST GOVERNANCE ISSUES AND THE FORESTS ACT 2005 Governance16 refers to the authority in a country that makes and enforces the day-to-day rules for the common good. As a process, governance seeks to exercise legitimate and rightful authority to steer organizations toward fulfillment of their mandates. 3.1 Causes of Poor Governance In Kenya, poor governance contributed significantly to the poor performance of the forest sector and is attributed to corruption, policy failures, poor forest management, low institutional capacity, inadequate community empowerment and devolution of power, poor enabling environment and political interference, lack of transparency and accountability, poor enforcement of laws, poor institutional financing mechanisms to implement policies and laws, poor benefit-sharing mechanisms, undefined roles in public-private partnerships and inadequate stakeholder participation, inadequate facilities, and low staff morale. Other issues related to governance and promoting forest loss are undervaluation of forests and rising poverty levels among local communities. Most of these issues are cross-cutting while others are forest type–specific, as presented below. 3.2 Analysis of Cross-Cutting Governance Issues The following are governance issues cutting across gazetted indigenous and forest plantation forests, local authority forests, and private forests. 3.2.1 Corruption Corruption17 has been rampant in the forestry sector to such an extent that in February 2003, Transparency International listed the FD as the third most corrupt department in the government. Corruption is evident in the following areas: timber harvesting, including issuing of licenses to companies for harvesting of plantations; charcoal exploitation in forest reserves and its transportation; establishment of plantations via the shamba system; and allocation of forest land for settlement where government officials, businessmen, and politicians either get the land, sell it, or give it out for other reasons, including political, under the pretext that the land is being given to landless people. See box A4.1. Corruption at the country’s border points has also allowed illegal trading of forest products with neighboring countries. Box A4.1 Highlights of Corruption Drivers and Enabling Factors Shamba System Most forest plantations in Kenya have been established through the nonresidential cultivation “shamba system.� Under this system, farmers are given pieces of clear, felled plantation forest areas to cultivate while taking care of planted tree seedlings. The farmers are allowed to occupy the plots until the canopy closes or a maximum of three years, whichever comes first. Because of its abuse in some forest areas, the shamba system was banned in 2003. In some of these areas, the system had been commercialized and plots were in most cases sold to prospective cultivators with forest officers either 16. The World Bank defines governance as the traditions and institutions by which authority in a country is exercised for the common good. This includes (i) the process by which those in authority are selected, monitored, and replaced; (ii) the capacity of the government to effectively manage its resources and implement sound policies; and (iii) the respect of citizens and the state for the institutions that govern economic and social interactions among them. 17. Corruption is defined by the World Bank as the abuse of public office for private gain. 48 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report colluding or speculating from the sidelines. Cultivators have also resorted to tampering with the trees in an effort to stay longer in a plot to recover the money given to the sellers. Political interests to secure votes or voting blocks, low FD staff wages (resulting in corruption), and increased demand for cultivation of land among local communities were major driving forces in allocation of shamba plots. Failure to follow guidelines at forest stations and laxity of the FD in monitoring implementation of the guidelines at the national level contributed to the abuse of the system. At the local level, government administrators and local politicians had been given a role in allocation of plots, which also contributed to the failure of the system. Forest Land Allocations Through Excisions Allocation of forest land for settlement or any type of development is mainly done through official and de facto excisions. A survey by the Permanent Presidential Commission on Soil Conservation and Afforestation conducted in the late 1990s that over 55,700 hectares of forests in the East and West of the Rift Valley was either excised or proposed for excision between 1994 and 1999. In 2001, the government excised an unprecedented forest hectarage of 67,000. Excisions benefit a wide range of individuals and institutions. This phenomenon is believed to increase during election periods, according to a report published by the World Resources Institute. The report considers land excisions as the outcome of an increased use of land for political patronage where there is increased electoral competition (Seymour and Dubash 2000). The 2005 government-commissioned report on irregularly allocated public land notes that a combination of legal and political factors have over the years conspired to facilitate illegal and irregular allocations that intensified in the late 1980s and throughout the 1990s; land was no longer allocated for development purposes but as political reward and for speculation. The political interests of politicians from Members of Parliament to local councilors and Provincial Administrators have driven most forest excisions. There are others (though minimal) driven by ecological, conservation, public purposes through forestland exchanges, for example, exchange of fragile or unsuitable for cultivation local community land with suitable forest land or exchange between nongazetted forest land with gazetted forest land with low forest cover, or exchanges of forest land for the public good, for example, schools, hospitals, and the like. Other excisions are done for genuine settlement or for personal gain, and some to woo votes or pay back political support. A number of factors have contributed to irregular forest land excisions, the most important being the loophole in the forest legislation that allowed Ministers to excise forest land with minimal consultation (section 4 of the Forests Act CAP 385). Another factor is the lack of judicial independency where court cases on excisions are either delayed or thrown out through political influence. This may be associated with the historical government culture since colonial times, in which land has always been appropriated with impunity. There is also lack of accountability in forest land allocation, which is facilitated by lack of an institutional mechanism to sensor or to make government officials account for their actions. Poor coordination of government arms also enables irregular land allocations. Laxity in government departments to secure land exchanged for forest land has also contributed to loss of forests through excisions. In the previous regimes, political influence was so strong that there was fear among government officers not to adhere to professionalism. In some cases, officers were intimidated into taking certain actions. Because of this influence, some of the government officers, especially from the provincial administration, would use their positions to influence excisions and get rewarded afterward. Undervaluation of forests also contributed to their excisions, because to a section of politicians, some of the forests are idle land where people can be settled. Timber Exploitation The FD has been issuing licenses to companies for harvesting of plantations. There has been rampant corruption in issuance of these licenses, some of them being issued to nonlicensed saw millers. Before the timber ban of 2000, foresters in pursuit of financial gains at the local and national levels drove corruption in timber exploitation. At the national level, they colluded with timber merchants in undervaluing the timber to be harvested. At the local level, foresters sometimes failed to remit money collected at the station level and sometimes worked in collaboration with their national counterparts in 49 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report undervaluing timber. In others cases, foresters have been lax in collection of revenues and in enforcing laws to ensure payment is made. In this case, the FD has lost heavily in uncollected revenues. By 1998, out of the total plantation area, 4,420 hectares (68 percent) was allocated to nonlicensed operators (so-called “brief case saw millers�) against 2,150 hectares allocated to licensed operators. In 1999, 5,130 hectares (75 percent) of plantations were allocated to nonlicensed operators, compared to 1,720 hectares for the licensed operators. Revenue during this period declined from K Sh 240 million annually to about K Sh 135 million, in spite of an increase in the annual harvestable area over the same period. The outstanding debt owed to the FD as of November 1999 was K Sh 92 million (Kagombe, Gitonga, and Gachanja 2005). Charcoal Production and Transportation Illegal cutting of indigenous trees for charcoal is a threat to most forests. While it is legal to sell and use charcoal, it is illegal to produce and transport it in most cases. Illegally produced charcoal in government forests is always cheaper than charcoal produced on farms (save for labor and sometimes bribery charges), motivating charcoal burners, most of whom are poor people living around forests, to engage in this activity. In 2000, a charcoal bag cost about K Sh 70 in Rumuruti Forest (of which K Sh 20 goes to the forest guard in charge of the forest block), about K Sh 180 in the nearby town, and between K Sh 250 and K Sh 400 in Nairobi. Charcoal dealers used to pay about K Sh 1,000 at roadblocks coming from the forest to be allowed to ferry the commodity away (KFWG 2000). Poor enforcement of laws and low penalties have allowed the illegal charcoal business to thrive. Two important enabling factors in illegal charcoal trade are loopholes in legislation (because there is no single comprehensive policy on charcoal production and transportation) and laxity in enforcement of laws requiring permits for production and transportation of charcoal. Corruption as an issue is indirectly addressed in various provisions of the act. However, it is well articulated in the Public Officer Ethics Act of 2003 as well as the Statutory Cooperate Act. An important section addressing corruption in the Forests Act 2005 is section 28 (1) on changes of forest boundaries, which is an area that was abused through corruption under the current act. The third schedule on public consultation also minimizes corruption. Other important sections checking corruption are section 4 (establishment of the KFS), sections 7–11 on the functions, powers, committees of the board, and appointments of the KFS Director and its officers. Corruption was mostly rampant in the forest plantation sector. Concessions of forest plantations are seen as one way of minimizing corruption at the KFS because management of plantations will shift from government to the private sector. However, transparency during bidding for concessions should be emphasized in concession rules to ensure that corruption does not occur at this stage. 3.2.2 Policy failures A number of policies and laws have impacts on forests. Most of them have good intentions for conservation; however, some have loopholes that have provided for corruption and abuse. Unfortunately, it has taken time to address these loopholes because they provide avenues for exploitation of forest resources. They have been exploited by the government of the day, politicians, administrators, and local communities. Lack of political will has enabled continued exploitation of the loopholes. The most important failures result from lack of up-to- date forest policy and legislation, lack of a land use policy, poor implementation of EMCA and other legislation and policies, lack of coordination in policy and legislation formulation and implementation, conflicts in sectoral legislation, and limited security of tenure in some categories of land. 50 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report 3.2.3 Forest Policy and Forests Act Kenya is guided by a policy formulated shortly after independence despite emerging changes in the dynamics of the society and the development of new approaches to natural resource management. This policy, formulated in 1957 and revised with a few modifications in 1968, concentrates on catchment protection and timber production, with strong government control (MENR 1994). The current Forest Policy of 1994 replaced the one of 1968. The policy is in support of the Forests Act CAP 385 (revised 1982 and 1992). The Forests Act CAP 385 is silent on the management and conservation of tree resources in the vast Arid and Semi Arid Land (ASAL) areas where a lot of charcoal production takes place. Most of the ASAL fall under trust land where permits are required for production and transportation of charcoal. Quite often there is laxity in enforcement of this requirement, a factor that has contributed to depletion of tree resources in ASAL. One of the most contentious sections of the Forests Act CAP 385 is section 4, which permits the Minister to gazette and degazette forest reserves without consultations or environmental assessments. Though the section allows for public objections, it does not set out the procedures for objections. Forest excisions continued in the past despite these objections. The act also requires that a person establishes a locus standi, that is, the ad hoc constitution of a body comprising entities that have “substantial interests in the status and fate of a forest in making objections.� In most cases this is difficult to establish, especially for people living far off from a particular forest. The act does not provide for community participation, has no clear provisions for the conservation and management of indigenous forests outside of forest reserves, has no provision for farm forestry, is poor in ensuring market price for forest products, does not recognize the participation of stakeholders in management of forest plantations on state land, and has low penalties for forest offenders that encourage illegal forest activities. Regarding the new forest legislation, the most important part is the part repealing the Forests Act CAP 385 and laying out modalities on transformation of the FD to the KFS (part VII on transitional provisions). This provision, however, does not allow for piecemeal implementation of the act, implying that once the Minister placed a gazette notice on the commencement of the act, the act should be implemented in full. This poses a challenge, because the act will only be fully operational once most or all of the rules are formulated, a process that is time- and money-consuming if it allows for wider consultation, which needs to be the case. An amendment of the legislation is therefore proposed. Relevant sections of the act that offer opportunities on the limitations of the Forests Act CAP 385 are section 2 (application of the act to all types of forests), section 13 (devolving management to Forest Conservancy areas and Committees), section 28 on variation of forest boundaries via environmental impact assessments, parliamentary approval and consultations, section 25 on creation and management of private forests and on farm forestry, sections 37 and 40 on forest concessions, part IV on community participation, and part V on enforcement. 3.2.4 Land use policy Kenya does not have a land use policy despite the need for one. Currently, land ownership and use is administered and regulated by the Constitution and more than 50 statutes. For example, the Trust Lands Act (CAP 288) gives local authorities the power to designate land for protection and management of trees and forests. The Land Act (Group Representatives) 51 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Act (CAP 287) allows communities to register themselves as “group ranches.� The Registered Land Act (CAP 300) registers and issues titles for trust lands. Despite the existence of these legal instruments, there has not been proper and comprehensive land use planning in Kenya. Subdivision for group ranches in Maasai land, especially in Trans Mara Districts, for instance, has led to massive forest vegetation clearing. In National Development Plans (1989–93 and 1997–2000) the government acknowledges that there have been inadequate provisions for environmental conservation and proper land use planning. The plans proposed the formation of a Land Use Commission to address land tenure and land use policy issues, with a view to improving sustainable agriculture as well as ensuring that biodiversity considerations are incorporated into land use decisions. In 1999, the government formed the Njonjo Commission to review land issues in Kenya. The commission completed its work in 2002 and produced a report, with specific recommendations on critical land issues. Though the government initiated the process of formulating a land use policy, this seems to have stalled. 3.2.5 The Government Land Act CAP 280 Section 3 of the Land Act confers powers upon the President to make grants of freehold or leasehold of unalienated government land to individuals or corporations. Certain presidential powers are delegated (albeit in writing) to the commissioner of lands. Over the years, the commissioner has exercised powers under section 3 to give out government land in total disregard of public interests or in absence of written authority to do so from the President. 3.2.6 Conflicts in sectoral policy and legislation Specific policies and statutes on water, wildlife, and agriculture also have provisions for forest management. Some of these are contradictory, for example, policies for agriculture, forestry, and wildlife. The Wildlife (Conservation and Management) Act prohibits extractive uses of the forest, which the Forests Act permits. The Agriculture Act promotes putting more land under agriculture. In Kenya, agricultural land is restricted to high potential areas that are settled, most of them around high mountain forests that the Forests Act seeks to protect. 3.2.7 Implementation of Environmental Management and Coordination Act (EMCA) In 1999, the government enacted the Environmental Management and Coordination Act to provide the necessary regulatory momentum needed for the protection and conservation of the environment. Though the act is in force, it has not made any impact on forest degradation. Recommendations of some of the institutions created by the act (more relevant to forests is the Public Complaints Committee) and the tribunal have not been implemented. Since 1999, forests have been excised (2001 forest excisions) and degraded (for example, Mau and Marmanet forests) despite outcries by the public and NGOs that the act should be enforced. Either there is inadequate capacity to enforce this law or there is political fear to fully implement the act. Though the act gives the Director-General of the National Environmental Management Authority (NEMA) tenure of office, his authority on certain issues has been politicized, making it difficult for the office to be fully in charge. To tackle the contradictions in the conflicts in policies of different agencies that impinge on forestry, NEMA must fulfill its coordination function. 3.2.8 Inadequate coordination in policy and legislation formulation and implementation Poor coordination in policy formulation and implementation is to blame for most of the sectoral policy conflicts. Most of the government ministries work as separate entities, not 52 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report knowing what the others are doing. Most of the policies and laws are reviewed and formulated on a need basis and are driven by sectoral demands. This has created acrimony between different ministries in legislation implementation, which is when most of the conflicts are noted. In other cases, policy decisions are made in the same manner; for example, some of the forest land allocations, including surveys, are conducted by the Ministry of Lands or the Provincial Administration of the Office of the President, in isolation from the FD in the Ministry of Environment and Natural Resources, which is the custodian of forest reserves. Specific examples include forest land allocations in Nandi, Mau, Ol Arabel, and Marmanet forests. In some of these areas, the FD does not know the extent of the settlement schemes because it was not furnished with boundary plans or otherwise involved. 3.2.9 Mismatch in sector versus political reform process The design process in policy formulation is that political reforms must precede sectoral reforms because political reforms are supposed to guide the direction of the country. In Kenya, sector reforms are usually ahead of political reforms, a situation that is bound to affect the decentralization process. Currently the country is redoing its supreme law, the Constitution, which may affect some of the provisions of the act. 3.2.10 Poor institutional arrangements There are different institutions involved in forest management in the country, the most important being the FD and the KWS. In most cases, these institutions do not work collectively, resulting in duplication of efforts and institutional conflicts. The Forests Act 2005 is silent on Memoranda of Understanding (MoU) between the KFS and other institutions, such as the one existing between the FD and the KWS. This MoU may therefore not be legally biding under the act. 3.2.11 Lack of a comprehensive charcoal policy Today, there is no adequate, comprehensive policy that addresses charcoal. This massive business is presently conducted without proper regulation or meaningful collection of taxes. Revenues are forgone and any opportunity for better management of production is lost. The fact that the raw material is generally obtained almost free of charge discourages commercial planting. The cheapness of the raw material combined with the presumed illegality of the practice discourages investment in efficient production methods. Unlike the previous legislation, the Forests Act 2005, part VI miscellaneous, provides for formulation of rules regulating production, transportation, and marketing of charcoal. 3.2.12 Rising poverty Most laws that affect the forestry sector fail to address livelihood pressure, access rights for communities, and alternatives to resources. Poverty among forest-adjacent communities, especially in areas where wildlife has been a menace to the people, has contributed to forest degradation. The Forests Act 2005, section 47 provides for forest user rights to be conferred on local communities with an aim of lifting their living standards. The new draft forest policy (waiting parliamentary approval) has as one of its objectives to support the government policy of alleviating poverty and promoting rural development through income based on forest and tree resources, providing employment, and promoting equity and participation by local communities in forest conservation and management. 53 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report 3.2.13 Policies at the regional level At the regional level (Eastern Africa level), lack of harmonized policies and laws is a loophole for illegal trade. This has enabled exportation of mangrove poles, currently banned in Kenya, and charcoal to Arabic countries and importation of illegally harvested hardwood, mainly mvule and mahogany from Democratic Republic of Congo (DRC). The Forests Act , section 62 enables the KFS Director to enter into joint management arrangements for management of cross-border forests and forest produce. 3.2.14 Presidential decrees, directives, and bans There are also numerous poorly implemented Presidential decrees and directives. These include a decree made in the 1980s banning the felling of indigenous trees and the 2003 ban on timber harvesting. Though implemented, most of these are not gazetted in the official Kenya Gazette. Some are unfair—exemptions of some stakeholders from the decrees and bans results in favoritism; for example, the ban on timber harvesting exempts some multinational companies. Section 34 of the new act allows for gazettement of Presidential decrees for protection of trees. This provision is important, especially because of emerging and untapped potential. Currently sandalwood, an indigenous tree species important for oil extraction, is highly threatened all over the country. 3.2.15 Wavering commitment and political will The political will to conserve forests has been erratic, interfering with professional forest management. Quite often, forest management decisions have been made based on political considerations. Politicians in the past have been the main beneficiaries of forest excisions under the pretext of settling the landless poor. Establishment of the KFS as an autonomous institution is important to addressing the problem of political interference in the forestry sector. However, political interference might still come through ministerial appointments and concessions (the private sector may use politicians to influence concessions and favors). Appointment of the KFS Director may also be political. During the formulation of the act, there was a proposal to include a clause for parliamentary approval of the appointment but this was withdrawn, probably with a political purpose. 3.2.16 Lack of transparency and accountability Forest land allocations were made in a nontransparent manner. Information on excisions comes to the public only when the government issues a gazette notice. This is complicated by the lack of institutional checks on accountability, which has contributed to government officers and politicians not being prosecuted after engaging in irregular activities. Section 28 on variation of forest boundaries via EIAs, parliamentary approval, and consultation brings more transparency. Provisions for public consultation in the third schedule are also important, as are the provisions for audit of the KFS under section 17. In the plantation sector, clear timber allocation policies and transparent bidding processes are necessary, under which interested sawmilling and wood-based panel companies and the pulp and paper industry could apply for cutting rights under long-term concession arrangements. 3.2.17 Undefined role of public-private partnerships 54 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Partnerships between the private and public sectors have been known to stimulate growth. Apparently lack of clearly defined roles for the public and the private sectors has hindered the development of the forest sector in Kenya. The new act has clear provisions for local communities and private sector involvement (sections 37, 40, and 47). 3.2.18 Institutional financing mechanisms to implement policies and laws Funds allocated for forest conservation are not sufficient. By its nature, forestry is a long-term investment. Returns from forestry may not easily be quantified, thus discouraging investors. Funds provided to the FD have been declining over time (since 1994). The decline has led to stringent controls on spending and further contributed to resource limitations at the district level. The new act (section 18) creates a Forest Management and Conservation Fund and allows for levies upon forest beneficiaries (section 19). A similar fund created by EMCA for NEMA has yet to secure funds. The challenge to the KFS will therefore be fundraising to enable it to deliver the envisaged services. 3.2.19 Enforcement of laws Implementation of most laws and policies is hindered by inadequate enforcement, which is attributed to inadequate capacity and political will and laxity, among other factors. Penalties for forest offenders have been lenient. This has contributed to illegal forest activities. There is also no adequate coordination between various agencies charged with enforcing laws and regulations governing forest management and conservation. This results in uncoordinated efforts to curb forest destruction and track illicit forest products. The relevant sections of the act on enforcement are part 4 on enforcement and the first and second schedules. Coordination still remains a challenge. 3.2.20 Inadequate stakeholder participation The current forest policy does not fully recognize important stakeholders such as communities and other private sector players (the sawmilling industry, for instance) as actors in the conservation and management of forests. The result has been a general sense of apathy where the “state owns the forests.� This has resulted in excessive and illegal logging, overgrazing, insecure tenure, encroachment, and charcoal burning, all activities that degrade forests. The current act provides for limited participation in the form of collection of forest products, in particular fuelwood, honey, and medicinal plants, while the policy enables local communities to assist the FD in tending tree seedlings through nonresident cultivation, or the shamba system. Inadequate opportunities for participation have led local communities to view forests as government land, with little concern for overexploiting the forests for short-term gains. Adequate and genuine involvement of local communities is called for, especially now when the FD does not have enough resources to enforce laws on its own. Sections 6, 37, 40, and 47 of the act address this shortcoming. Section 6, dealing with the formation of the KFS Board, may be the most relevant because adequate participation by lead agencies and communities in policy decisions is key to most provisions of the act. 3.2.21 Community empowerment and devolution of power 55 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report The majority of local communities neighboring forests appreciate the benefits from forests; however, they have not been empowered by legislation to manage forests because under the current legislation and policies, management is concentrated in the central government. This is because the focus of most legislation is on protection. This has contributed to the low sense of forest ownership among local communities. Devolution of management to conservancies and forest associations solves this problem. The challenge will be to organize communities and build their capacities to enable them to undertake this role. One of the functions of the KFS has been stated as to promote the empowerment of associations and communities in the control and management of forests (section 5) 3.2.22 Benefit and cost sharing Sharing of benefits has not been well articulated in forest conservation and has therefore been a contentious issue. There are no benefit and cost sharing mechanisms in place to guide management. Local communities have so far not benefited from the timber industry because most benefits go either to the central government or local authorities; revenue generated from tourism rarely benefits communities because most goes to the government and private operators. Lack of tangible benefits has therefore contributed to forest destruction and human-wildlife conflicts in Kenya. Benefit sharing is not well addressed in the act but it is assumed that it would be expounded in forest management agreements because it will vary from forest to forest. 3.2.23 Undervaluation of forest resources The overall contribution of forests to the national economy is often underestimated because valuations of forests only take into account the commercial, marketed output of timber products, which disregards the value of nontimber forest products; the water catchment functions of forests; biodiversity; and the cultural, spiritual, and heritage values of forests. Any undervalued resource will inevitably be misused. The FD has not been active in correcting this anomaly by undertaking forest resource valuation. This has implications in terms of resource allocation, land use changes, mainstreaming of forestry sector contributions in national accounting, and linkages of the sector with others. KFS–private sector concessions will have to be guided by reliable forest plantation data, an area that is currently a priority and is captured in section 37 of the act. 3.2.24 Lack of or inadequate information on the status of forest resources There is no up-to-date information to guide management on the extent of forests in the country, their quality, and trends. The only recent data is that generated by the 1994 Kenya Indigenous Forest Conservation Project, which also was not exhaustive. This situation has been aggravated by inadequate human and financial resources for implementing forest resource survey and development programs. 3.2.25 Forest settlements There are a number of forests encroached upon by local communities for agriculture. Recently, the government has moved in and evicted some of the forest dwellers, resulting in public outcry about the manner in which the evictions were handled. People were left homeless and their property destroyed. There are also situations in which people were evicted from the forest in 1989 and have never been settled. The settlement issue poses a challenge to conservation of forests in Kenya. In most cases, evictions are effected by the FD without consultations with the Ministry of Lands, which is charged with settling the evicted families. More recently, such coordination has been cultivated for Marmanet forests. At 56 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Marmanet, the FD and the Ministry of Lands agreed to do a joint Cabinet Memorandum addressing the forest settlement problem. A survey to map out the affected forest areas and to determine the density of settlement has been undertaken by the Kenya Forests Working Group (KFWG) on behalf of the FD. A similar activity was undertaken in Eastern and South Western Mau forests with an aim of rationalizing settlement in the two forest areas. The intention is to determine critical forest areas that should not be settled and if settled, to move the people to less sensitive areas. During the time of activities in the Marmanet forests the government also set aside funds for settling landless people. Previous settlements were marred by corruption whereby genuine landless people were left out in settlement. In other cases, people masquerade as landless people and sell the land once allocated and move on to other areas as squatters (professional squatters). An open and transparent manner of ensuring that this does not happen in future settlement should be sought and encouraged. 3.3 Analysis of Other Governance Issues in Gazetted Forests 3.3.1 Inadequate capacity Most government institutions, including the FD, lack capacity (both human and capital) to manage forest resources, and this has negatively affected the resource. Professional human capacity has been low since the 1990s when recruitment for professionals was put on hold. Most of the FD forest stations lack operational vehicles and radio equipment as well as proper housing facilities. The FD has not been able to implement most elements of the government’s policy, due to either lack of finances or limited institutional capacity. Such policies include the National Environmental Action Plan (NEAP) of 1994, the National Biodiversity Strategy and Action Plan of 1998, the Sessional Paper on Environment and Development of 1999, and the Kenya Forestry Master Plan of 1994. Involvement of communities and the private sector in forest management will enhance KFS capacity at the local level. 3.3.2 Low morale among foresters Although they manage a very rich resource, foresters are among the most poorly paid civil servants. The poor pay lowers the enthusiasm and morale of the foresters and is an underlying factor in corruption. The staff are also demoralized when well-managed forest land is allocated for private development or when arrested offenders are released by the police. Another factor contributing to low staff morale within the FD is inadequate basic equipment for operations and maintenance such as vehicles, nursery and fire fighting tools, and office equipment resulting from low budgetary allocation and donor support. The failure by the government to address the discrepancies between the value being protected and the wage package for those mandated to protect the forest and provide the necessary equipment enables this situation. This shortcoming is likely to be addressed through creation of the KFS, which may offer better terms of service than the government line ministry. 3.3.3 Poor forest management In general terms, Kenya’s forests have not been managed in a professional way. Though some external factors, such as political interference, have contributed to poor forest management, there is also management laxity among foresters, which is attributed to low morale. Poor forest management is exemplified by failure to maximize revenue generation 57 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report from forest plantations as a result of use of obsolete and outdated timber conversion technologies, ad hoc allocation of forest plantations, lack of continuous inventory to determine stocking levels and growth trends, inadequate application of sound silvicultural principles, unmotivated personnel, and inadequate application of business principles in plantation management. Poor leadership is also partly to blame. For example, between the mid-1990s and 2000, Presidential appointments in the FD, especially the position of Chief Conservator, were arguably suspicious, and may have been prompted by peculiar motives that were to unfold later. Corruption became rampant during this period. Revenues generated from forest royalties and sale of timber were not getting to the Treasury. In addition, forestry featured often in politics, and forests became objects used to settle political scores and win over opponents. Many politicians would collude with the FD and Commissioner of Lands for personal benefit at the expense of forests. Though possibly prone to political influence, powers of appointing the KFS Director has been given to the KFS Board in consultation with the Minister (section 10). Other important sections addressing poor forest management are section 13 (establishment of conservancies and their committees), section 26 (declaration of provisional forests), section 35 (management of forests through management plans), section 36 (joint management of forests), section 37 (management of plantations), part V on enforcement and part VI on formulation of rules for carrying out or giving effect to the act. 3.3.4 Overreliance on industrial wood in the limited gazetted forest area The FD has often focused on industrial commercial timber (mostly within the gazetted forest reserves) with limited attention to the potential of nontimber forest products. Recent trends have shown that nonwood forest and tree products have untapped potential. One of the reasons this potential remains unexploited is inadequate incentives to promote commercial production, processing, and marketing of nonwood forest products. For example, credit for cottage industries is largely unavailable and linkages with markets are poor. The act does not explicitly address this though it covers research regulation of forest industries through rules. However, the new forest policy explicitly addresses this shortcoming by specifying that it will promote sustainable production and utilization of nonwood forest products through research and training and will promote efficient forest-based industries for domestic and export markets. 3.3.5 Nyayo Tea Zones The Nyayo Tea Zones Corporation was established through Legal Notice No. 285 of 1986. The purpose of establishing the tea zones was stated to be the provision of a physical buffer zone between agricultural land and forests designated for protection, and also to provide an alternative source of income and employment (Wass 1995). Out of approximately 6,154 hectares of forested areas that were cleared, an estimated 4,000 hectares are currently under tea. Although a general maximum width of 100 meters into the forest from the existing boundaries was nominally accepted, tea zones have extended beyond 500 meters into the forest. The clearing of the tea zones proceeded without reference to the suitability of the area for tea. Some of the areas cleared were found to be unsuitable for tea and were left bare. One of the activities of the Green Zones Development Project is to consolidate areas opened for tea, which (though not clearly stated) may imply further forest clearance. 58 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report 3.4 Local Authority Forests Governance Issues 3.4.1 Lack of legal framework Trust land forests lack an appropriate legal framework for conservation, protection, and management. This has been blamed for their degradation. In some cases, there have been informal arrangements between local authorities and the FD where the department has been assisted in providing protection under the Forests Act. In addition to recognizing management of local authority forests by relevant authorities, the Forests Act strengthens their management by requiring that they be managed by management plans (section 35) and confers on the KFS the power for temporary takeover of management in case of mismanagement (section 27). However, clear provisions are needed on the role of local authorities forest management under the Local Authority Act. 3.4.2 Inadequate capacity Most of the local authorities mandated to manage trust land forests lack the necessary human and financial capacity to effectively manage the forests. In the past, technical personnel provided to councils have not included foresters or natural resource management professionals, probably because forest conservation and management are part of the core functions of local authorities. 3.4.3 Limited security of tenure in some categories of land Within Kenya, there are three main categories of land: government, private, and trust land. There is limited security of tenure for people living on trust land or government land because they do not have title deeds. For example, only 40,400 out of the 262,000 households at the coast have titles to their land. This severely discourages the remaining 220,000 people from managing their land sustainably. Lack of tenure also provides no motivation for people to plant trees as a long-term investment. 3.4.4 Lack of an appropriate policy for dry land forest vegetation Most dry land forests are virtually unmanaged and fall within the jurisdiction of local authorities. Lack of an appropriate policy for dry land forest vegetation has led to degradation of dry land vegetation. These vegetation cover types present a challenge to forestry both because of the harsh environmental conditions in which they occur and in view of the intimate interaction between the vegetation, people, and livestock. Traditional forestry as practiced elsewhere is not applicable and therefore management of natural and planted tree stands must address not only the problems of dry zone silviculture but also the vital dependence of people and livestock on the vegetation. In recognition of this, the new forest policy has provided for policy statement on development and conservation of these forests with an overall objective of promoting dry land forestry to produce fuelwood and to supply wood and nonwood forest products. In the past, attempts to address fuelwood shortage problems have resulted in the introduction of species such as prosopis in Turkana, Baringo, Tana River, and Garissa Districts. Communities in these districts have expressed deep concern over the colonization of grazing areas by prosopis. The state of dry land forestry resources results in wasteful use patterns and degradation, mainly from overgrazing, as well as overexploitation of trees for the acquisition of fuelwood 59 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report (firewood and charcoal), particularly around towns and refugee camps. This state is compounded by high levels of poverty and low levels of infrastructure development. Even where technical information and production technologies exist, adoption levels have remained low due to poor extension service delivery and low investments. Dry land forests have untapped potential, especially in the production of honey, silk, gums and resins, essential oils, tree fodder, and commercial timber production using fast-growing and drought-tolerant tree species. 3.5 Private Forests Governance Issues 3.5.1 Inadequate incentives to promote commercial on-farm tree growing Forest extension services began functioning in 1971 because of the need to coordinate the many players involved in forestry extension. It was also felt that the country’s tree cover was inadequate and there was need to extend tree planting outside gazetted forests. The current forest policy views the future of forestry sector development as lying in farm forestry because of its great potential. In terms of area expansion for commercial tree growing, private farms, especially in cultivated semi-arid areas, can offer over 200,000 hectares. The Kenya Forestry Master Plan had predicted that farm forest (farms and settlement) would produce about 17.8 million cubic meters of wood by 2020, which is approximately 80 percent of total wood production in the country. The major challenges that have confronted farm forestry are lack of appropriate incentives to support commercial production of wood and inadequate funding levels to support and to initiate training of stakeholders on investment analysis, resource assessment, resource valuation and pricing, efficient utilization, and processing. The Forests Act 2005 offers some of these incentives, including provision for technical support by the KFS and development loans. 60 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report SECTION 4. CONCLUSION AND RECOMMENDATIONS 4.1 Conclusion If well implemented, the Forests Act 2005 will revitalize the forestry sector and enable it to further contribute to the national economy and local people’s livelihoods by addressing the current governance issues that have resulted in degradation of forests resources. However, political will is the key to success. 4.2 Recommendations The following are priority governance recommendations for implementation of the Forests Act 2005: 1. Section 37 of the Forests Act 2005 provides for joint management of plantation forests owned by the state through concession, contract, joint agreement, or other arrangements. Currently, the forest industry, especially the saw milling industry, is composed of saw millers with varying capacity and investment, ranging from small- scale saw millers to large-scale saw milling companies with heavy investments. In any forest plantation allocation, a transparent process is called for to avoid conflicts in the industry. One of the immediate priorities, therefore, will be to develop clear timber allocation policies and transparent bidding processes under which interested sawmilling or wood-based panel companies and the pulp and paper industry could apply for cutting rights under long-term concession arrangements. 2. Development of financial mechanisms to enable the KFS to raise funds from forest beneficiaries is key. 3. There is a need to develop clear incentive policies that will create opportunities for local communities to generate income from indigenous forests and on-farm forestry and to engage in and profit from partnerships with private sector forest industrial companies that are willing to invest in sustainable management of government plantation resources. Such incentives should be either tax incentives, grant schemes, or other incentive mechanisms for attracting private sector and smallholder investment. 4. Measures must be taken to raise the morale of both FD and KFS staff. 5. Once the KFS is established, steps are needed to enhance its capacity. 6. Appointments proposed in the act (for example, Director of KFS and chairman of KFS Board) and formation of proposed committees (representation of communities in Forest Conservancy Committees and formation of finance committee, for instance) must be done transparently. 7. Clear linkages must be established between Forest Conservancy Committees and catchment area committees. 8. Clear requirements and conditions must be formulated to ensure emerging forest associations are genuine and representative. 9. Setting of conditions and criteria to be used in declaration of provisional forests should be agreed on by the KFS, the private sector, and local authorities. 10. Coordination between different ministries in implementation of the act must be improved. 61 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report 11. Any MoU between the KFS and other institutions should be legally binding. 12. Review of the provision of the Forests Act 2005 requiring full implementation of the act to ensure against piece-meal implementation of the act. 13. Tenure in certain land categories must be clarified to motivate land owners to invest in tree planting. 14. Capacity must be developed in NEMA to enable it to implement provisions of EMCA and to fulfill its coordination function. 15. The relationship between the KFS and DRSRS must be strengthened, as must DRSRS capacity to provide technical assistance in forest monitoring. 16. The Local Authorities Act must be reviewed to give local authorities a greater role in forest management and conservation and to build capacity of local authorities in forest management. The following are priority institutional recommendations for implementation of the Forests Act 2005: 17. Areas of immediate action need to be prioritized with a view toward developing rules and regulations to implement provisions of the act now that it is gazetted. 18. Determination of the economic value of environmental services to enable the government to generate funds for forest sector development through the Forest Management and Conservation Fund, and development of financial mechanisms to pay for such services, is another priority. 19. Settlement in forest reserves is prohibited by the act. While some of the settlements are old and deserve attention, there are arguments that settlement longevity should not be considered in deciding who to evict. It is recommended that a policy decision be made to rationalize some settlements, carry out evictions of people in critical forest areas that include catchment areas and areas rich in biodiversity, and look for alternative settlement options for genuine cases. This should be done in a well- coordinated manner between the responsible management authority and the Ministry of Lands. 20. Efforts should be made to develop local community capacity to enable formation of vibrant CFAs and FCCs. This will ensure strong partnership arrangements between CFAs and the KFS. 21. A monitoring mechanism involving all interested parties, more so the local communities because of the participatory forest management (PFM) approach promoted by the act, is needed. The monitoring mechanism should ensure that adequate data are routinely collected for each forest area where PFM is being practiced. It is also important that “baseline� information on the condition of forest resources as well as on the livelihood status of the neighboring communities is assessed early in this process. Without these data it will not be possible to measure the results of PFM as a new conservation and management strategy. 22. Gender-related impacts of forest management need to be considered. The Forests Act 2005, like most environmental law, is gender neutral and does not take into account the gender impacts of different interventions. 62 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report 63 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report THE WORLD BANK Report No. 40659-KE Annex A4.1 Summary Analysis of Stakeholders Involved in Forest Management Stakeholder Role Strengths Weaknesses Threats (external, Opportunities (internal) (internal) current and (available and emerging) emerging) National level Forest Department Policy formulation, Trained personnel Limited resources Low government New Forests Act and management, and Spread throughout (both capital and funding and willingness for protection of gazetted the country financial), political partnerships among forests reserves; inadequate staff interference local communities and management of Poor public Inefficient forest the private sector forest plantations and relations, industries Vast forest resources on-farm forestry overlapping Conflicting in dry lands mandates with KWS policies in Abundant labor in double gazetted national resource Vibrant market for forests management forest products Inadequate or Corruption Development partner unavailable support information for Availability of decision making appropriate technology and innovations Government support Availability of forest sector investors Availability of land for afforestation Regional and international treaties and conventions Kenya Wildlife Protection of wildlife Ability to attract Outdated legislation Insecurity and Government support Service and their habitats donor support Underexploitation of wildlife poaching and goodwill Unique wildlife revenue base in some areas Pressure from resources and Poor Human-wildlife government for landscapes communication conflicts financial self- Good infrastructure (technology and Competition from sustainability development in channels) and other tourist Supportive donor and Stakeholder Role Strengths Weaknesses Threats (external, Opportunities (internal) (internal) current and (available and emerging) emerging) protected areas public relations with destinations development partners Lead agency for communities Environmental Investment international Inadequate financial degradation and opportunities in conventions and resources and encroachment wildlife-based products treaties standardized Poverty and services Well-trained vehicles and Global terrorism Potential to reduce personnel on equipment Incompatible operational costs conservation Lack of regular staff sectoral laws Setting up of KWS Relatively high training and policies endowment fund degree of honesty, Lack of team spirit Dwindling donor Commercialization and integrity, and Poor marketing of and government outsourcing transparency services and support Bio-prospecting Well-defined products High turnover of opportunities programs No comprehensive CEOs and senior Expected government National and biodiversity staff targets set by the international inventory Unfavorable government recognition Lack of international Anticipated policy and institutionalized conservation legislative changes management tools resolutions Collaboration with Overlapping Inefficient and NEMA under EMCA mandates with KFS poor resource Security in protected in double gazetted management areas forests Tourism and Improved organization Limited training in research performance through community work activities in implementation of private and performance contracts nonprotected Review of the Wildlife areas Act and the recently Global climatic launched strategic plan change HIV/AIDS Conflicting land use Pollution Bio-piracy Kenya Forestry Research for Well-trained Low funding Reforms in forest Reforms in forest 65 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Stakeholder Role Strengths Weaknesses Threats (external, Opportunities (internal) (internal) current and (available and emerging) emerging) Research Institute sustainable scientists Poor remuneration sector may take sector development of Availability of of workers too long Donor funding and forests and allied modern facilities at Weak capacity to Competition for collaboration improving natural resources Muguga, Maseno, publish and research funds Environment and and Kitui disseminate with private and forestry issues Decentralized research findings, NGO sector becoming increasingly research and Inadequate capacity Strengthening important development to meet increasing forestry service Private sector activities demand for tree may take too becoming an important Good links with the seed long player in forestry FD and main Low corporate Loss of staff to development stakeholders profile other institutions Wood will continue to Weak administrative be a dominant source capacity at regional of energy in Kenya centers Leadership of forestry Low capacity in research in the region information improving technology Formation of East development African Community Inadequate capacity in management of revenue-generation activities National Supervision and Legislative Limited capacity Unclear Political goodwill for Environmental coordination over all establishment as a and resources delineation of environmental actions Management matters relating to the semiautonomous (capital and human) some roles for An increasingly Authority environment and the body with tenure of Environment lead agencies sensitized and principal instrument office for the inspectors not yet Inadequate supportive public of government in the Director-General appointed appreciation of Environmental implementation of all Independent Inadequate financial the role of NEMA conservation is a top policies relating to the operation of the resources, facilities, by the public and priority in the world environment Public Complaints and equipment lead agencies Willingness of lead Committee and Weak Poor governance agencies, NGOs, and tribunal communication Widespread the private sector to 66 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Stakeholder Role Strengths Weaknesses Threats (external, Opportunities (internal) (internal) current and (available and emerging) emerging) Focal point for tools and poverty partner with NEMA several multilateral information-sharing Erosion of Willing donor environmental mechanisms cultural values in community agreements Inadequate inter- environmental Existence of Establishment of the sector mechanisms conservation multilateral agencies, national for environment Conflicts on regional environmental Environmental Trust coordination natural resource programs ,and inter- Fund Low client use governmental Ability to generate responsiveness due Inadequate organizations revenues through to inadequate national concerned with licensing, penalties, capacity and accounting for environment grants, and gifts resources natural Existence of Existing resources indigenous knowledge collaboration and Legal suits that Improved and effective partnership with might bankrupt communication other organizations NEMA and tie up knowledge available resources National Museums Repository for Strong technical and Inadequate funding Globalization Regular upgrading of of Kenya elements of scientific, research capacity Low staff morale Piracy the research programs cultural, Strong international Poor governance Competitors Renovating dilapidated technological, and links Limited organization Insufficient buildings and human interest, and Well-trained and structure and skilled staff establishment of field preservation of sites skilled staff bureaucracy Changing study centers of antiquity Favorable political Weak linkages with information and Linkages with partners will other stakeholders technology locally and abroad Strong research Lack of corporate environment Improving programs policy Travel advisory infrastructure Documentation and Lack of patents affecting tourism Development and reporting of research policy Poor marketing products 67 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Stakeholder Role Strengths Weaknesses Threats (external, Opportunities (internal) (internal) current and (available and emerging) emerging) Lack of information performance of and services and economy Commercialization of communications Brain drain activities technology policy Rapid loss of Widespread skilled cultural heritage manpower in the country Nyayo Tea Zone Creation of tea buffer Semiautonomous Lack of capacity Public pressure Support provided by Development zones to contain government body (human and to have some of the African Corporation encroachment into Able to generate its equipment) the cleared land Development Bank indigenous forests own revenues No forest converted back through the Green Provides local management to forestry Zones Development employment experience Confusion with Project the FD over the mandate in areas not suitable for tea Department for Collection, storage, Technical capacity Lack of clear As a government Increased demand for Resource Survey analysis, and in aerial censuses, operational policy department, data and information and Remote dissemination of data geo-information and mandate DRSRS is on natural resources Sensing on natural resources database, and Limited financial unable to retain Many strategic remote sensing resources finances raised collaborative partners satellite data High staff turnover for its activities Reduced cost of Highly trained staff due to low wages Competition with remote sensing data High caliber Poor public other institutions Increase in number of equipment, aircraft, relations that DRSRS is players involved in computers, and the Lack of a policy on supposed to be generation of geo- like for data geo-information serving spatial data collection and leading to Discontinued Increase in number of analysis disharmony in geo- donor support well-trained scientists data usage in the fields of natural resources and environment Data processing capabilities in terms of 68 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Stakeholder Role Strengths Weaknesses Threats (external, Opportunities (internal) (internal) current and (available and emerging) emerging) hardware and software have increased, as has storage capacity Private sector Establishment of Investment (some, Low capacity in Competition Forests Act provision plantations and for example, Kakuzi many small among private on partnership woodlots and Tea growing enterprises and sector players Forests Act provisions conservation of companies) ventures and communities on incentives indigenous forests Not tied to in partnerships government with the KFS bureaucracy in Competition with management illegal forest products Competition of forestry with other land uses Nongovernmental Research, advocacy, Increased credibility Low funding Competition for Forests Act 2005 organizations awareness, and in advocacy and Low capacity resources provisions for public- promotion of local awareness creation (human and capital) private sector communities Strong links with involvement engagement in forest local communities Government support management and and political will conservation Local level institutions (provincial, district, and local authority level) Local County Management of Devolved authority Lack of capacity Political Forests Act 2005 Council natural resources in management of (financial and interference empowers the KFS to within their resources human) assist local authorities jurisdiction (trust Through elected Corruption with technical support land) on behalf of councilors, able to No forest local communities keep in touch with management local communities’ expertise needs Provincial and Coordination of Committee Minimal budgetary Unclear Sensitized and District environmental representatives of resources and delineation of supportive public on Environment matters at the key lead facilities at some roles for environmental matters Committees provincial or district government provincial and lead agencies Lead agencies 69 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Stakeholder Role Strengths Weaknesses Threats (external, Opportunities (internal) (internal) current and (available and emerging) emerging) level agencies and civil district levels Poor governance assisting district society Conflicts on environment natural resource committees on use transport and offices Sources: The analysis is based on each institution’s strategic plans, in most cases. 70 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report THE WORLD BANK Report No. 40659-KE APPENDIX 5 ENVIRONMENTAL ASSESSMENT SECTION 1. SUMMARY Key messages emerging from the rapid environmental analysis follow: Environmental issues and stakeholder concerns associated with the new Forests Act 2005 vary greatly between the different forest resource types in Kenya, that is, plantation forests, indigenous forests, farm forests, dry land forests, private forests, and local authority forests. Many of the issues that have arisen from this situation assessment are cross cutting. Issues such as water catchment management, wildlife, agriculture, land tenure, and land use policy among others are all relevant to the new act but do not necessarily fall under the control or management of the Forest Department (FD). It will be important for the new Kenya Forestry Service (KFS) to link and work with a number of different government departments to ensure effective and sustainable implementation of the new act. An ecosystem management approach is proposed for the management of natural resources in Kenya; however, it is not clear who will be responsible for defining and overseeing this policy and how other agencies and departments will be involved in the implementation. In relation to the above two points is the issue of defining forest conservancy areas. It is not clear how these conservancy areas will be selected and how these will relate to other administrative areas such as water catchments. To ensure the environmental sustainability of new policies and programs in Kenya, it will be key to ensure these different approaches are harmonized. Rehabilitation of degraded forests by the KFS is given due attention in the new act; however, it is not clear how the KFS will determine priorities for action given the poor state of many existing local authority forests. SECTION 2. FORESTS AND THE ENVIRONMENT, CURRENT STATUS AND RELEVANCE OF FORESTS ACT 2005 2.1 Overview of the Current Conditions of Forests in Kenya Forests occupy about 1.7 percent18 of Kenya's land area, yet, they are reservoirs of biological diversity (genes, species, and ecosystems). These forests and the biological diversity they support are important to the well-being of Kenyans. It is widely accepted that forest resources and associated lands should be managed to meet the social, economic, cultural, and spiritual needs of present and future generations. In Kenya, forests provide wood and wood products to over 80 percent of all households (Mbugua 2000). Forests are often thought of as areas with continuous tree cover consisting either of naturally occurring (indigenous) tree species or plantations. However, this definition ignores the importance of open savannah or dry land forests in which individual trees are scattered over 18. This figure is an estimate only and does not include dry land forests or on-farm forests. A number of studies have tried to establish the true extent of forest cover; however, there has been no formal survey to date. wide areas of grassland. It also fails to cover small groups of trees planted on farms and other cultivated land. It is these dry land forests and farm trees that provide important livelihood strategies for many of Kenya’s poor people, including wood fuel, charcoal burning for income, and use of wood products for building. Indigenous forests in Kenya are classified into four regions according to climatic conditions: • Coastal forest • Dry zone forest • Montane forest region • Western rain forest These forests contain 50 percent of the nation's tree species, 40 percent of the larger mammals, and 30 percent of birds. These indigenous forests have endemic and threatened species. In Kenya, areas that are climatically suited to sustaining dense forests are restricted to the more mountainous regions with high annual rainfall, certain river valleys, and the coast (in the case of mangrove). These areas amount to around 12 percent of the total land area (Wass 1995). Human activity has progressively cleared forest cover in these areas to the point where it was estimated by the Kenya Indigenous Forest Conservation Programme that only 1.24 million hectares of indigenous closed canopy forest remained in the early 1990s (representing less than 2 percent of the total land area of Kenya). Further contraction in the closed canopy forest area has occurred in the last decade. Within this area that has been cleared of forest, but has potential for its reestablishment, are many other competing land uses, including tea and coffee growing. Tree planting in these areas can take the form of large commercial plantations or small blocks of woodland within farmland (referred to as farm forestry). Most of the remaining land mass of Kenya is classified as dry land within which the natural forest type is open savannah scrub. In 1995, the extent of savannah woodland was estimated at 61.4 percent of the land area in Kenya (Wass 1995). These areas have also seen a reduction in natural tree cover as a result of overgrazing by livestock and other human pressures (including gathering of firewood). There is, nevertheless, potential to re- establish traditional forms of forest or plantation in some regions. One of the conclusions reached through the scoping stage of the Strategic Environmental Assessment (SEA) is the need to promote wider awareness of the different forest types in Kenya and to recognize that the environmental, social, and economic issues relating to use and management in each type are significantly different, although there are many cross- linking themes. There has been a tendency in the past to focus most attention on the dense montane forests, described as the “water towers� of Kenya because of their role in protecting the rate of flow and quality of water discharged by the rivers draining these catchments. In addition, the closed canopy forests are exceptionally rich in plants and wildlife and much of the area has been designated as nature reserves and national parks. This focus of concern has been heightened in recent years by illegal logging and the removal of state protection (through degazetting) to allow alternative use of forest land. These issues are, without question, of critical national and international importance, but they have tended to overshadow concerns for the sustainable use and management of other forest types, 72 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report including the dry land forest that is also biologically very rich and provides support to large numbers of people. Forest ecosystems are very diverse. Quite apart from the intrinsic value of these assets, the forest ecosystems are one of the primary attractions for tourism. They also support a wide variety of plants that have valuable medicinal properties and form part of an irreplaceable gene pool for research and future potential use in drugs, foodstuffs, dyes, detergents, cosmetics, and other. Until the new Forests Act is implemented, Kenya’s forests fall under different management regimes and have different legal status. The majority of the closed canopy forests are gazetted forest reserves under the Forests Act (CAP 385) and managed by the Forest Department (FD) in the Ministry of Natural Resources (Wass 1995). There are also closed canopy forests gazetted as national parks and national reserves managed by the Kenya Wildlife Service (KWS). In forest areas with high biodiversity, the FD and the KWS have entered into a Memorandum of Understanding (MoU) to oversee their management. The Ministry of Local Government, through county councils, looks after about 100,000 hectares of trust land on behalf of the local people. Forests exploitation in trust land areas is often not well managed and in some cases, total destruction has taken place because the capacity to manage these forests is weak or nonexistent in the Ministry of Local Government, and in most cases, forestry is not commonly perceived as an important activity by the councils. In some instances, the Ministry has given some of the affected forest areas with high biodiversity to the FD for gazettement as forest reserves and an unknown area of indigenous forest is in private ownership, raising concerns that their management may be having detrimental impacts on catchment areas and biodiversity conservation. 2.2 Environmental Issues Associated with the New Forests Act Forests help protect and sustain water, soil, air, and genetic resources on which the country’s future depends. They provide timber, jobs, medicines, fuel, fruits, biodiversity, environmental services such as carbon sinks, habitat for wildlife, and recreational and sacred sites. According to the Food and Agriculture Organization (FAO), any country with less than 10 percent of its land area covered by forests is environmentally unstable. Official and unofficial reports indicate that depletion of the forest resource has brought the forestry sector to a crisis point in Kenya. See box A5.1 for a summary of environmental issues uncovered in the scoping report. 73 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Box A5.1 Environmental Issues Identified in the Scoping Report The Resource • There is a need to conduct an objective assessment now of the complete forest resources to establish extent of cover and value. • Poor management encourages pests and disease. • Accidental and deliberate bush fires destroy the forest resource and associated livelihoods. • Indiscriminate logging destroys the whole forest resource, particularly nontimber forest resources. • Indiscriminate harvesting of wood for fuel and charcoal depletes the resource. Impacts on the Environment • Deforestation is adding to the burden of climate change by removing opportunities for carbon sequestration. • Poor forest management and overexploitation are causing faster runoff and increased soil erosion and land degradation. • Degradation of water catchment areas is leading to drying up of rivers. • Clear-felling and poor management practices destroy ecosystems. • Reduction in the area of indigenous forest is putting pressure on wildlife and leading to more aggressive behavior and damage (by elephants in particular). Institutional and Management Issues • More attention should be paid to management of the extensive dry land forest as well as high montane forest. • A system of concessions should be developed to achieve long-term sustainable use of plantations. • Payment should be made for environmental services. Positive Measures to Reduce Impacts and Create Opportunities • More emphasis should be given to plantation establishment to reduce pressure on indigenous forest. • Greater emphasis should be given to environmental education. • The total area of forest cover should be increased for nontimber uses. • Watershed and forestry management practices need to be integrated. • Special measures should be introduced to protect river systems. • More robust systems should be developed to value ecosystem services. • Sustainable resource use strategies should be developed in relation to the conservation of biodiversity regions and protection of rare and endangered species. • Multipurpose forestry practice is required to protect ecosystems. Source: FRR 2007. 2.3 Forest Types in Kenya and Expected Environmental Outcomes of the New Act The new Forests Act recognizes the distinctions in forest types discussed above and an important role for this SEA is to explore to what extent the supporting rules and regulations of the act can be designed to meet the wide range of conditions across the country. The discussion on sustainable forest management in Kenya has often been confused by a lack of adequate explanation of the different forest types (Church 2006). The new Forests Act and the new Forest Policy (Sessional Paper No. 9 of 2005) clearly differentiate the different types of forest together with their potential use and management options. Table A5.1 outlines the forest types in Kenya, their environmental importance, current status, and likely impact of the new management proposed. 74 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Table A5.2 looks specifically at the different components of the act and identifies what the associated environmental risks and opportunities are within the different sections. It highlights which forest type identified in table A5.1 is likely to encounter these environmental risks and opportunities. 75 Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report Table A5.1 Forest Types Recognized in the New Act, Their Environmental Importance, Current Status, and Likely Impacts of the New Act Forest type Definition in Environmental importance Current Current Number of Linkages with other Proposed Expected new act coverage environmental people who sectors management in outcome of the (thousand ha status depend on new act new management (improvement of resource decline in quality) a Indigenous forest A forest that • Diverse ecosystems that 16,865 It is estimated that 3 million • Wildlife State managed All existing forest has come about supply important economic, there has been a 5% forest-adjacent • Water through reserves remain Closed canopy by natural recreational, scientific, social, decrease in forest dwellers management management protected. forests in the regeneration of cultural, and spiritual benefits. cover between1990 directly • Energy plans. Possible for Conservation and a following regions: trees primarily • Supply forest products; serve and 2000. depend on • Tourism state to enter into sustainable use of • Coastal forest native to Kenya as water catchments, forest • Land tenure joint management forests achieved region and includes biodiversity conservation resources for agreement with through the use of • Dry zone forest mangroves and reservoirs, wildlife habitats, their anyone. management b region bamboo forests. and carbon sinks. livelihoods. Community forest plans. • Montane forest • In mangrove areas, provide associations may Communities region important fisheries habitat. apply for user engage in forest • Western rain rights. management. forest region Farm forestry The practice of • Supports diversified farm Data not Data not available Data not • Agriculture Outside of the state Incentives put in managing trees production providing available available • Water forest, managed by place that on farms, subsistence products and management private sector encourage greater whether singly, incomes. • Land tenure amount of farm in rows, lines, • Contributes to soil and water forestry. boundaries, or conservation and fertility. in woodlots; or private forestry. c Forest plantations A forest that • Current reliance for 100 Used to be 170. No clear • Agriculture Private sector to be Increased amount has been plantations has been on a Significant decrease figures. • Business encouraged to of land used as established few exotic species, which is 38.7 are in coverage. However, it licensing and develop and plantation forests. through now seen as unsustainable considered to Since the ban, no was reported regulations and manage plantations Species base of afforestation or due to increasing occurrence be mature and silviculture has taken that 130,000 regulatory through appropriate plantations reforestation for of exotic pests and diseases. over mature place resulting in people lost reforms incentives such as diversified. commercial • The new policy seeks to and 62 are low-quality timber. their jobs when • Physical land leases, purposes. broaden the species base young Incidents of associated planning agreements, and used in commercial forest plantations. poaching have industries • International concessions. plantations. increased. Risk of (namely, saw certification fires and spread of milling, timber • Trade and disease and pests yards, and industry (such as stem construction) • Unemployment borers and heart rot) closed down c have also increased, as a result. passing health risks to young c plantations. d Dry land forests No definition in • Often these environments are 39,762 Under threat from 8 million • Arid and semi-arid No specific Not specifically 76 Forest type Definition in Environmental importance Current Current Number of Linkages with other Proposed Expected new act coverage environmental people who sectors management in outcome of the (thousand ha status depend on new act new management (improvement of resource decline in quality) the actual act stressed by frequent drought. opening of new farm people live in lands management addressed in the but the draft • Livestock is the main land and increased the arid and • Livestock proposed. act but the draft policy refers to economic activity of these charcoal semi arid development policy aims to bring e dry land forests areas because of good production. areas in • Range about rehabilitation f as the woody grazing. However, seasonal Charcoal production Kenya. There management of degraded and vegetation in migration is resulting in is an important are no • Tourism overexploited Kenya’s arid depletion of grazing lands income generation statistics on • Irrigation areas, tree and semi arid and the forest resource, and option. Ecologically how many of • Sustainable planting, areas, which tree cover degradation. fragile areas due to these are livelihoods community forest cover 80 • Natural resource products pressure from dependent on associations, and percent of from these areas have the human use. dry land sustainable Kenya’s total potential to supply forests; commercial land surface. marketable products on a however, production of sustainable basis. These much of the charcoal. include gums and resins, literature frankincense, indigenous would argue fruits, honey, and timber. that almost all are dependent on it, be it for building materials, wood fuel, wild harvests, and so on. Local authority Any forest • In urban areas, these forests Data not Overexploitation and Data not • Wildlife Local authority is Sustainable forests situated on trust have both recreational and available lack of proper available • Water responsible for management of land that has aesthetic benefits. management have management their protection and forests on local been set aside • Some of these forests may led to the threat of • Energy management. A authority land. as a forest by a have important biological extinction of some • Tourism forest officer should Forests in urban local authority diversity and scientific value. local authority • Land tenure inspect these areas promoted for e pursuant to the • These forests can have forests. forests twice a aesthetic and provisions of important nonuse values year. Anyone can recreational the Trust Land such as cultural shrines. apply to enter into values. Act. • The law requires the Minister a management to declare local authority agreement for all or Any arboretum, forest where part of any local recreational o land is an important authority forest. park, or mini- catchment area, a Approval must be forest created source of water given by the Board. under section springs, or is a fragile 30 the Forests environment; Act. o the land is rich in biodiversity or contains Any forest 77 Forest type Definition in Environmental importance Current Current Number of Linkages with other Proposed Expected new act coverage environmental people who sectors management in outcome of the (thousand ha status depend on new act new management (improvement of resource decline in quality) established as rare, threatened, or a local authority endangered species; forest in o there is cultural or accordance scientific significance; with the o it supports an important provisions in industry and is a major section 24 of source of livelihood for the Forests Act. the local community. Private forests Any forest • Have the potential to provide Data not Data not available Data not • Agriculture May apply for Provision of owned privately a significant amount of forest available available • Business registration as a technical advice to by an individual, goods and services and licensing and forest and therefore private forest institution, or thereby supplement state regulations; be entitled to owners and tax body corporate. forests. regulatory receive technical incentives for The act also • Market incentives will need to reforms advice and loans, private forests. states that be put in place if this is to • Physical and apply for private forest happen but it will be planning exemption from includes important to ensure that • International land rates. Where arboreta and these do not undermine certification neglect of the recreational forest livelihoods of the poor. • Trade and forest is parks. industry determined by the • Employment Board, the Minister can declare it to be a provisional forest under state management. Source: FRR 2007. Note: a. Data obtained from the World Resources Institute EarthTrends Kenya Country Profile for the year 2000 available at http://earthtrends.wri.org. b. Gibbon and Mbithi 2002. c. Kagombe, Gitonga, and Gachanja 2005. d. Estimated figure based on 1960–81 http://earthtrends.wri.org. e. Mbugua 2000. f. GOK 2003. 78 Table A5.2 Matrix of Environmental Risks and Opportunities of the Kenya Forests Act 2005 Element of the act Forest type most Risks (-) and opportunities (+) relevant to Indigenous or dry Farm forestry or Local authority Plantations private land PART 2 – ADMINISTRATION Functions of the Kenya +/- potential for better ecosystem management through policies and guidelines on management, conservation, and Forest Service (section utilization of forests 4) +/- potential for sustainable management of forests through the forest extension service +/- enforcement needs clarity on roles and responsibilities between the KFS and the National Environmental Management Authority + collaboration for biodiversity conservation and utilization + collaboration on management, conservation, and biodiversity management of forests + proactive management of environmental services Functions and power of + opportunity to create incentives for sustainable management of the environment the Board (sections 7, +/- manages and controls all assets; if Board becomes corrupt, then may filter down 8, 9, 11) Forest conservancy + recognized forest conservancy areas areas and management + opportunity for land to be set aside for creation of forests (section13) + representation by environment officer on the committee - links to other land use management plans not clear Funds (sections 14–20) +/- although fund set aside for forest management and conservation, allocation to activity is not predefined. Competition for scarce resources may mean inadequate funds are set aside for proper ecosystem management. PART 3 – CREATION AND MANAGEMENT OF FORESTS Ownership of forests and + local authority forest to be declared where it is important for the environment (catchments, water source, biodiversity, rights to forest products and the like) (sections 21–34) +/- ability to declare “provisional forest� on forest land that is deemed to be mismanaged in an environmentally important area + use of environmental impact assessments (EIAs) in changing forest status to ensure protection of fauna and flora, 79 Element of the act Forest type most Risks (-) and opportunities (+) relevant to Indigenous or dry Farm forestry or Local authority Plantations private land and ecosystem management +/- ability to declare forest land as nature reserves where particular environmental importance deemed, but how will this work in practice? Who then is responsible for the land? What are the incentives for the KFS to do this? +/- protected species to be declared by President Management of forests +/- how do forest management plans link with local environment plans and other relevant plans (for example, (sections 35–45) watershed management plans and the like)? +/- plantation forest required to be sustainably managed +/- private sector management of plantation forests only where there is no wider environmental benefit of such forest +/- forest officers responsible for inspection visits in consultation with the forest conservation committee, but what about environment offices? +/- local authority land cannot be converted to settlement area +/- granting of concessions to use forest land may be subject to an EIA +/- indigenous forests to be managed for their environmental benefit and can be jointly management +/- mining and quarrying allowed only where the area does not contain rare, threatened, or endangered species or is not of cultural importance, and EIA has been undertaken, not an important catchment area, and miner has committed to rehabilitate the site +/- independent EIAs required for activities to be undertaken in a forest that are not included in the management plan, but are there enough suitably qualified EIA experts knowledgeable of forestry issues? PART 4 – COMMUNITY PARTICIPATION Community forest + gives right to community associations to use environmental resources on a sustainable basis associations (sections 46– + establishes forest user rights 49) + requires a management plan to outline how community association intends to use resource + conservation of the resource is seen as paramount in the act - no clear monitoring provision for the management plan and associated impacts PART 5 – ENFORCEMENT Powers of forest officers +/- the right to enter any forest (including private) to assess its condition and the wider environment (sections 50 and 51) +/- the right to inspect any forest-based industry or dealer to assess use of forest to ensure it is sustainable +/- firearms can be used in the course of animal population control +/- prohibited to smoke in certain areas, use kindle or fire generally +/- license requirements for various environmental activities Prohibited activities in +/- permit or license needed for environmental extraction 80 Element of the act Forest type most Risks (-) and opportunities (+) relevant to Indigenous or dry Farm forestry or Local authority Plantations private land forests (sections 52– 54) + disincentive of large fine for those who contravene this requirement Prosecution (sections 56– not applicable 58) PART 6 – MISCELLANEOUS Act to bind government not applicable (sections 59– 62) Relation to Environment +/- overall management of the environment in Kenya to come under one umbrella legislation Management and +/- need to ensure harmonized plans and programs for environmental management Coordination Act (section + opportunity for improved ecosystem management 63) PART 7 – TRANSITIONAL PROVISIONS Transfer from old act to not applicable new (sections 65–67) Source: FRR 2007. 81 SECTION 3. STAKEHOLDER CONCERNS Many different social and environmental issues have already been identified regarding livelihoods and the management and exploitation of forestry resources. There is a need now to clarify the interests of the different stakeholder groups that make up the affected population. These will include traditional forest dwellers, communities lying immediately adjacent to indigenous forest and plantations, pastoralists and migratory groups whose use of open savannah forest is seasonal, and those who depend for part or all of their livelihoods on trade in timber and nontimber forest products. There are also others living remotely from forest areas who may be indirectly affected by economic decisions affecting, for example, the charcoal trade, or environmentally by increased runoff and flooding of local rivers as a result of clear felling operations. The stakeholder analysis (see appendix 6 – Social Assessment) and subsequent stakeholder discussions highlighted the following environmental issues. 3.1 Primary Stakeholders The primary stakeholders are the same as identified in the social assessment: 3.1.1 Central government (Forest Department, Kenya Wildlife Service, Ministry of Water and Irrigation, and Ministry of Local Government) Central government stakeholders’ main environmental issue is the dwindling natural resource base in a country that depends so heavily on natural resources. This direct linkage is increasingly appreciated and understood at all levels. Thus, the challenges ahead for the central government and its ministries and departments include the need for the most efficient and effective ways of ensuring harmonization of the relatively new natural resource acts, policies, and strategies and minimizing bureaucratic delays. The goal that has been articulated by more than one ministry and department is to realize an increase in forest cover in Kenya to a world standard of approximately 10 percent in a minimal, and yet realistic, time frame. Thus, stopping the insidious forest degradation, the thinning and extinction of particular species, is necessary for the support of both the central government and the general public. Concern has been expressed about the need for the different ministries and departments to interrelate better and more genuinely in the future across the broad scope of environmental issues. This is again increasingly understood to be a priority due to the overlap between different ministries and departments. Examples include catchments that are simultaneously water resource, forest, and wildlife rich. In the past, one ministry or department may have wielded more power in an area with resulting negative consequences and imbalances. Memoranda of Understanding were the norm (which, by definition, are often weak because they are based on mutual understanding rather than delineated responsibilities with consequences if responsibilities are not fulfilled), but now with clearer legal frameworks, polices, and strategies in place, more definitive and explicit boundaries of jurisdiction can be drawn with legal redress, as necessary. On a positive note, there is relief that all the relatively new natural resource acts (EMCA 1999, Water Act 2002, and the new Forests Act 2005) support relevant multilateral environmental agreements and protocols. This results in a common understanding of the processes and procedures by all interested parties, especially due to the available literature and well-documented case studies. The key environmental concerns of central government organizations with direct involvement can be summarized as follows: • Afforestation and reafforestation to expand to 10 percent forest cover in Kenya • Catchment protection and minimization of forest encroachment • Minimization and cessation of gradual and insidious forest degradation (for example, gradually and systematically thinning a forest or removing particular species to extinction) • Sustainable water resource management • Human-wildlife conflict in forests • Recognition and real support for all relevant international multilateral environmental agreements and protocols 3.1.2 Private sector (saw mills and value added products) While the main concern expressed by all parties in this group—security of tenure—is actually more of a governance issue, it impinges so heavily on the future of private sector participation in forestry in Kenya that it is important it is stated with the more direct environmental issues. Lack of security of tenure, or the perception thereof, prevents the emergent growth of forestry projects, new saw millers, and innovative value added producers. For the more direct environmental issues, it is reported that saw mills and value added producers are currently importing timber from Malawi, Zambia, and other neighboring countries both legally and illegally. While the private sector comments that environmental issues are a major concern, their first priority is clearly a functioning and effective business environment. Furthermore, there is a perception that environmental issues are the responsibility of the government and unless they implement the new acts and policies with sustained vigor, the trends of increasing timber importation will continue from cheaper external markets. That said, there is a desire for an accelerated process on the agreement and gazettement of the national forest certification scheme. It is believed that the scheme will be most effective if it is accompanied by a nationwide and international awareness campaign. It is believed that this will lead to the use of more sustainably produced timber by both the producers and customers in Kenya. Last, it was mentioned by the private sector that there is a need to improve the process of environmental impact assessments (EIAs) and audit screening by the National Environmental Management Authority (NEMA) to reduce average time frames and enhance the efficiency of the authority. From an interest perspective, there is a desire to see a number of projects, even pilot projects, functioning that benefit from carbon sequestration or carbon credits. The main environmental concerns of private sector organizations involved in the timber industry can be summarized as follows: • Agreement and gazettement of a national forest certification scheme, followed by implementation, enforcement, and increased awareness of the scheme nationally and internationally • Sustainable and readily available source of good quality timber • Reduction in time frames and various delays at NEMA for EIAs and audits 83 3.1.3 Community forest associations (CFAs) CFAs again intertwine ownership, access, and responsibility issues with more direct environmental issues. Forests are not yet perceived by Kenyan communities as a permanent resource that they can depend upon and manage to their advantage and for distinct and direct financial gain. Thus, the system for future interaction with the government is key for the emergence of effective CFAs. In addition, concern is expressed on access and use (management) of nontimber forest products, such as beehives, medicinal plants, and charcoal. The users of these products are often separate or different groups of society. Concern has also been expressed that pastoralists are yet again potentially losers under the new Forests Act. There is fear that community, council, and trust land in arid and semi-arid lands (making up 80 percent of Kenya) will in the future be classified as forest and access for grazing for livestock and other uses will be restricted. The main environmental concerns of CFAs can be summarized as follows: • Access to and use and management of nontimber forest products (beehives, medicinal plants, charcoal, and the like) • Concern that pastoralists could be losers under the new Forests Act in that access to land with woody bushland (in the future to be classified as forests) will be restricted 3.1.4 Private sector (other) This group expressed concern that the new Forests Act does not take sufficient account of the energy needs of Kenya. Section 4 in particular in the new act should be expanded upon (or sound rules and regulations be drawn up) and a more innovative approach be used with regard to biodiesel and biomass, especially considering how fundamental these energy sources are to the peoples of Kenya. Studies show that out of the 6 million households in Kenya, approximately 4 million households use fuelwood or charcoal daily. Furthermore, changing to liquefied petroleum gas is not a realistic option at this time (even though this argument is often put forward) because fewer than 1 million gas canisters exist in the country. It was highlighted that the new KFS could earn substantial revenue if the linkages between the private sector, the KFS, and biodiesel and biomass were strengthened and developed. Members of the private sector also questioned how closely the Ministry of Environment and Natural Resources has worked with the Ministry of Local Government because one of the main perceived problems is the lack of enforcement of existing laws in council, trust, and community lands. This is currently where the majority of charcoal in Kenya originates. Whether the new act supersedes the Local Authorities Act with regard to forestry issues was also questioned, as were the expected relationship and how awareness and information plans regarding this will be rolled out. Furthermore, how existing and future bylaws fit into the overall legal framework was highlighted as another major challenge; municipal and county councils can introduce new laws with virtually no awareness campaigns or public consultation and little notice. Increasing evidence in Kenya of climate change was also mentioned as a direct environmental concern The main environmental concerns of private sector organizations with indirect involvement can be summarized as follows: • Insufficient attention in the new Forests Act to wood fuel and charcoal 84 • Insufficient attention or emphasis in the new Forests Act on biodiesel and biomass as an energy issue in general 3.1.5 National nongovernmental organizations (NGOs) It is generally agreed that NGOs are relatively well-represented in the forestry sector in Kenya and that they have been at the forefront of exposing environmental degradation in forests in the country. Thus, significant milestones have already been achieved in lobbying for and in support of the new Forests Act through various channels. There now needs to be a shift in emphasis from the “crisis and critical time�’ to practical translation of the sections of the new Forests Act into reality within the shortest time possible. Simultaneously, work continues on exposing continuing forest destruction in the country. The emphasis on biodiversity is seen as positive, with the provision that it is imperative that this be translated into real action as the act is implemented. It is further articulated that it is important that the government be continuously apprised of catchment degradation, the use of poor planting material in the country, poor maintenance of forests, and most important, lack of enforcement of existing environmental rules and regulations The main environmental concerns of national NGOs can be summarized as follows: • The emphasis given to biodiversity in the new act is positive; however, need to ensure that this is effectively implemented • The need to continuously inform the government about relevant environmental issues (catchment degradation, poor planting material, poor maintenance of forests, and the like) 3.1.6 Research organizations Environmental concerns raised by research organizations (Kenya Forestry Research Institute, World Agroforestry Centre, International Forestry Resources and Institutions, Food and Agriculture Organization, and GARI) were broad in scope and ranged from the national to the international. At the national and sector levels, one of the major issues is the perception that there is insufficient clarity in the new Forests Act on the role of research and development organizations in Kenya, including environmental functions. As with other groups, there is concern about the links between all the natural resource acts, policies, and strategies (wildlife, local authorities, water, environment, and so on). It appears that EMCA 1999 can only be challenged by the Kenyan constitution; therefore, whether the new Forests Act is subordinate to EMCA 1999 is questioned. While there is both a technical liaison committee and a policy liaison committee, it appears there is a distinct need to strengthen and expand these committees to include more members from a wide and varied background in forestry. Currently, it can be suggested that there is insufficient participation by NGOs, the private sector, and others in these committees. More specifically, from the research organizations’ perspective, there currently is insufficient use, monitoring, and feedback on developed forestry species. This prevents Kenya from being competitive locally, regionally, and internationally. This is tied to the need to embrace modern technologies to enhance forestry in Kenya and phase out the use of old technologies gradually and systematically. There is an urgent need to encourage many more private sector players into forestry in Kenya and level the playing field for all. Historical or preferential royalty charges need to be removed, again to encourage more private sector participation. 85 The main environmental concerns of research organizations can be summarized as follows: • Insufficient clarity in the new Forests Act on the role of research and development organizations in forestry in Kenya • Insufficient use, monitoring, and feedback of developed forestry species, for example, fast-growing productive species • Need to elaborate and be clear about the linkages between all Kenyan acts covering environmental issues (EMCA 1999, Water Act 2002, Forest Act 2005, and others) • The need to embrace modern technologies to enhance forestry in Kenya and concurrently to phase out the use of old technologies 3.2 Secondary Stakeholders The secondary stakeholders are the same as identified in appendix 6 – Social Assessment: 3.2.1 Central government (other) This is a broad group and includes organizations such as NEMA, county councils, ministries (Agriculture, Energy, Tourism, Infrastructure, and the like), Tana and Athi River Development Authority, and others. In broad environmental terms, support is given to the new Forests Act and the formation of a KFS from the FD. Environmental concerns raised included land degradation with corresponding increasing rates of soil erosion and siltation of water bodies, leading to potential eutrophication of major water bodies such as Lake Victoria and Lake Naivasha. The impact of deforestation on water catchments was also emphasized as a critical environmental problem. The critical and insufficiently supported role of farm forestry or agroforestry was also highlighted. From a purer environmental standpoint, the need for EIAs to be used before all major forestry projects, and follow-up with environmental audits, was emphasized. Furthermore, mention was made of the need to use either national or international certification schemes for forestry. The main environmental concerns of secondarily involved central government organizations can be summarized as follows: • The need for EIAs to be used before the start of all new projects • The need to environmentally audit all operational forestry projects • The need for Kenya to use national and international certification schemes for forestry 3.2.2 International NGOs Environmental concerns raised by international NGOs focused on the continuing loss of biodiversity in Kenya. This also translates into the need to ensure that indigenous forests all over the country are managed to maintain biodiversity. Many of the forests are currently being thinned at an alarming rate and certain species are nearing extinction. The need to use neighboring-country experiences to guide the process of reforming the sector, particularly experiences from Uganda and Tanzania, but also South Africa, was highlighted. Other environmental concerns raised include the impact of climate change. The main environmental concerns of international NGOs can be summarized as follows: • Loss of biodiversity as a result of the new act • The realization of sustainable use of forests as outlined in the new act and policy 86 3.2.3 Multilateral and bilateral donors Multilateral and bilateral donors are ready to reengage in the forestry sector in Kenya after about a decade of disengagement. Environmental governance is seen as fundamental to future success. Concern has also been expressed about the need for committed support for funds, time and management for the real participation of CFAs at all levels including the donor community, and the new KFS. At the interdonor level, it is agreed that certain issues that in the past have typically been avoided, such as resettlement of people, require the design and drafting of an agreed on and unified policy by donors. This will facilitate a systematic approach to resettlement issues that are a potential stumbling block for implementation of some of the new reform processes for Kenya. The main environmental concerns of multilateral and bilateral donors can be summarized as follows: • Environmental governance of the forestry sector • Ensuring real participation of CFAs • The need for donor agencies to agree on a policy for supporting resettlement away from forests 3.3 Stakeholder Priorities Identified in the First SEA Stakeholder Workshop The participants in the first workshop identified a range of environmental issues that they considered to be of immediate priority in the implementation of the new act. All the issues identified were said to be in danger of not being adequately covered in the implementation of the act. The environmental issues identified were clustered into seven themes: 1. Watershed protection 2. Biodiversity protection 3. Sustainable use 4. Payment for environmental services 5. Arid forests and moist forests 6. Role for plantations to reduce pressure on the environment 7. Baseline inventory of forest resources 3.3.1 Watershed protection Water is a key environmental concern to participants, and forests are regarded as important for watershed protection. Research in South Africa has shown that this is not as straightforward a linkage as many perceive. Through hydrological data, it was shown that planting trees in dry land areas can actually deplete available water resources. There was a call for greater understanding on the role of forests in watershed management in Kenya so that decisions can be made from an informed position. 3.3.2 Biodiversity protection Forests in Kenya contain rich biodiversity. They offer diverse sets of habitats for plants, animals, and micro-organisms. In Kenya forest biodiversity provides a wide array of goods and services from timber and nontimber forest products to playing an important role in mitigating climate change as carbon sinks. Participants felt that forest biological diversity has 87 important economic, social, and cultural roles in the lives of both indigenous communities and local communities and needs to be protected for use both today and in the future. 3.3.3 Sustainable use Participants felt that the quality of the environment is important for sustaining the livelihoods of the poor and forests are an important aspect of this. Complex environmental risks such as climate change are a concern and participants feel there is a need to capture these complex issues, through the sustainable use of forest resources, in the implementation of the act. 3.3.4 Payment for environmental services While there is a clear understanding of the environmental services that forests provide, such as carbon sinks, biodiversity, and water regulation, there is little agreement on who should pay for the protection of these services. The environmental services that forests provide are public goods that benefit all people in Kenya; however, there is an assumption that it is the direct users of the forests that should pay for this conservation. Participants felt that the public-good nature of forests requires the central government to meet the growing cost of its protection, but this is not currently reflected in the new law or its funding arrangements. 3.3.5 Arid forests and moist forests Participants felt that there has been little attention to date on the value of arid forests to the livelihoods of poor people in Kenya. These forests provide sources of shelter, food, resources, and opportunities for charcoal production. Their sustainable management is seen as essential for sustaining the livelihoods of this population and greater attention should be given to it in the new law. 3.3.6 Role for plantations to reduce pressure on the environment Many people felt that plantation forestry offers the opportunity to relieve pressure on natural forests. Currently, there is little incentive to invest in plantations and much of the wood used for production is taken from indigenous forests or imported. Creating incentives for the production of quality plantation forests would relieve pressure on existing forests. 3.3.7 Baseline inventory of forest resources Underpinning all the discussions on environmental sustainability of forest management in Kenya was the need to obtain a clear baseline of Kenya’s actual forest resources. Many assumptions have been made in guessing forest cover in Kenya. If the law is to be effectively implemented, a clear baseline of the starting resources needs to be established so whether the law is having a positive or negative impact on these resources can be monitored. SECTION 4. CONCLUSIONS As is usual with a rapid environmental assessment, only a limited literature review has taken place. One of the key emerging issues from the environmental assessment has been the recognition that environmental issues and stakeholder concerns vary greatly between the different forest resource types in Kenya—plantation forests, indigenous forests, farm forests, dry land forests, private forests, and local authority forests. This shaped the framework in which we conducted the situation assessments and has guided the review process. The cross-cutting nature of environmental issues that have arisen has been an important finding. Issues such as water catchment management, wildlife, agriculture, land tenure, and land use policy among others are all relevant to the new act but do not necessarily fall under the control or management of the FD. It will therefore be important for the new KFS to link 88 and work with a number of government departments to ensure the environmental sustainability of the new act. An ecosystem management approach is proposed for the management of natural resources in Kenya; however, it is not clear who will be responsible for defining and overseeing this policy and how other agencies and departments will be involved in its implementation. In relation to these above two points is the issue of defining forest conservancy areas. It is not clear how these conservancy areas will be selected and how these will relate to other administrative areas such as water catchments. To ensure the environmental sustainability of new policies and programs in Kenya, it will be key to ensure these different approaches are harmonized. Rehabilitation of degraded forests by the KFS is given due attention in the new act; however, it is not clear how the KFS will determine priorities for action given the poor state of many existing local authority forests. Annex A5.1 contains a summary of environmental conditions that could be affected by the new act. Annex A5.2 summarizes workshop participants’ environmental concerns with the new act. 89 Annex A5.1 Checklist of Environmental Conditions That May Be Affected by Implementation of the New Forests Act Physical resources Will there be Surface water hydrology • Changes in physical use? Surface water quality • Impairment of soil quality? Ground water hydrology • Changes in water usage and supply? Ground water quality • An impact on air quality? Soil quality Soil stability Erosion and sedimentation Air quality Ecological resources Will there be Biological diversity • A reduction in species diversity? Fisheries • Habitat depletion or fragmentation? Aquatic biology • Threatened, rare, and endangered species? Terrestrial wildlife • Impairment of ecological functions such as Flora - disruption of food chains, Fauna - decline in species population, - alterations in predator-prey relationships? Human use values Will there be Agriculture and irrigation • Changes in land use? Aquaculture • Decline in important resources for human use? Livestock keeping • Alterations to people’s livelihood strategies? Water supply • Industrial use and therefore impacts such as Recreation - changes in effluent discharge, Flood control - changes in air and water quality, Dedicated area use - working conditions? Industry Agroindustry Quality of life values Will there be Socioeconomic • Loss of valued area? Resettlement • Displacement of people? Cultural or historical • Disruption of communities? Aesthetic • Human health and safety issues? Archaeological • Demands on services and infrastructure? Public health Nutrition Source: FRR 2007. Impacts of the act are likely to be significant, and therefore mitigation plans should be put in place, if the impacts • are extensive over space and time; • are intensive in concentration or in relation to assimilative capacity; • exceed environmental standards and thresholds; • do not comply with environmental policies or land use plans; • affect ecologically sensitive areas and heritage resources; or • affect community lifestyle, traditional land uses, and values. 90 4. 3. 2. 1. Issue Workshop forests Environment environment Sustainable use reduce pressure on ecosystem services Watershed protection 6. Role for plantations to Biodiversity protection services and valuation of 5. Arid forests and nonmoist Payment for environmental PART 2 – ADMINISTRATION X X X Sections 4 and 5 Sections 7–11 Section 13 X X Sections 14–20 PART 3 – CREATION AND MANAGEMENT OF FORESTS X X X Sections 21–25 Sections 26 and 27 X Sections 28 and 29 Section 30 X X X Sections 32 and 33 Section 34 Sections 35 and 36 Section 37 X X X Sections 38 and 39 Section 40 X X X X Section 41 Sections 42–44 Section 45 PART 4 – COMMUNITY PARTICIPATION X X Sections 46–49 PART 5 – ENFORCEMENT Sections 50 and 51 X Sections 52–54 Sections 56–58 PART 6 – MISCELLANEOUS X X Sections 59–62 Section 63 Annex A5.2 Environmental Concerns Associated with the New Forests Act 2005 as Identified by Participants in the First Stakeholder PART 7 – TRANSITIONAL PROVISIONS Sections 65–67 7. Baseline inventory needed of X forest resources Source: FRR 2007. 92 APPENDIX 6 SOCIAL ASSESSMENT SECTION 1. SUMMARY Key messages emerging from the rapid social analysis follow: The draft Forest Policy (Sessional Paper No. 9 of 2005) currently awaiting cabinet approval contains a range of good social objectives for the forest sector that capture poverty issues; participation issues; livelihood strategies; and gender, HIV, and equity issues. Ensuring that this policy is formalized so it can shape the implementation of the Forests Act 2005 will be key to ensuring social objectives are achieved. Establishing clear and transparent mechanisms for benefit sharing of forest revenues accrued from sustainable forest management, as proposed in the new act, will be critical for ensuring communities benefit financially from the resource. Failure to establish such mechanisms may result in mistrust and communities unwilling to engage in forest management. Meaningful community participation and decision making are needed if the new act is to have a positive impact on the livelihoods of Kenya’s poor people. There will be both winners and losers when the new act is implemented; ensuring negative social impacts on the losers are minimized should be the responsibility of the forest sector reform committee. There is a need to incorporate best practice from participatory forest management within Kenya and more widely in the region to ensure that the new guidelines and subregulations have the desired positive social impacts. Poor people in Kenya depend on forest resources for their survival. The sustainable management of forest resources is therefore not only important for sound environmental management but is an essential safety net for the majority of Kenya’s poor. The new Forests Act takes account of the cultural value of forests in Kenya; however, it will be important to ensure guidelines and subregulations that support the act adequately cover this recognition and provide effectively for its use in forest management plans. SECTION 2. POVERTY IN KENYA: CURRENT STATUS AND RELEVANCE TO THE NEW FORESTS ACT 2005 2.1 Overview Since the early 1990s, a number of government decisions have had a major impact on communities living within and adjacent to forest areas. For example, the banning of timber harvesting (except by a limited number of exempt private companies) has had severe impacts on the livelihoods of people formerly employed in saw milling and the processing of timber. Estimates of the numbers who have lost their jobs exceed 150,000. When dependents are included over half a million people have lost their primary source of income. The ban on harvesting timber has also affected access to forest areas for other nontimber products. The steady growth of Kenya’s rural population continues to place ever greater strains on forest land and this pressure is exacerbated by the fact that local communities see few if any of the benefits that are derived from timber production under existing management systems. There is widespread distrust in forest area communities about commercial forestry operations, especially where this involves only a few select companies engaged in pulp and saw log production. Population pressure on forest areas has resulted in illegal encroachment of settlements, which the under-resourced Forest Department has been unable to prevent, and there has been a history of legalization of such activities where the minister in office at the time has used his powers to excise affected areas from the gazetted forest. In some cases, land has been excised to support private development. The logging ban was preceded by the withdrawal of the shamba system in 1986, resulting from perceived corruption and mismanagement. The shamba system was reinstated as nonresidential cultivation in 1994 but then banned again in 2003. Shamba was first introduced under the colonial administration and permitted farmers to plant crops within newly established forest plantations, provided they watered and weeded the tree seedlings. Once the trees were fully established the farmers moved on to new plots. When well run, the system is regarded to be effective in reestablishing forest cover. Where the shamba is poorly managed, the system is easily abused because young trees are neglected or willfully damaged to allow farming to continue. While many of the issues relating to existing use of forests by local communities are negative, there are also positive ways in which communities are engaged in planting and managing small forests, preventing poaching and administering resources in accordance with sustainable development principles. During the recent droughts, some arid-land communities succeeded in keeping most of their cattle herds alive by using forest grazing while those communities that had previously destroyed most of the tree cover lost all their animals (IUCN personal comment). This brief overview illustrates the broad scope of the enquiries that need to be made for this social assessment. The existing socioeconomic context will first be established, then stakeholders concerns will be identified through a participatory approach. Box A6.1 highlights the steps required to ensure social issues are adequately addressed throughout the whole Forests Act implementation process—a process that goes beyond the scope of this Strategic Environmental Assessment (SEA). Box A6.1 Five Steps to Ensure Social Issues are Addressed in the Implementation of the New Forests Act 1. Understanding the cultural features and social implications in the context of the new Forests Act (through the institutions-centered SEA social assessment). 2. Responding to the perceived needs of those affected by the new Forests Act and developing proposals to address concerns (through the SEA identification of priorities and proposals). 3. Seeking to reach poor and disadvantaged populations and seeking to integrate them into the implementation process (through SEA and the government of Kenya). 4. Recognizing the roles and needs of women as well as men, and seeking to establish equal participation and benefit in the design of subregulations and guidelines to accompany the new Forests Act (government of Kenya). 5. Encouraging participation of all stakeholders in the longer term implementation process and seeking to empower local communities to engage (government of Kenya). 94 2.2 Poverty in Kenya 2.2.1 Socioeconomic context Kenya’s economic performance during the last two decades has been well below its potential. Consequently, per capita income (in constant 1982 prices) has declined from US$271 in 1990 to US$239 in 2002 (GOK 2003). The number of people unemployed in 2003 stood at over 2 million, or 14.6 percent of the labor force, with youth accounting for 45 percent of the total unemployed. This unemployed population is considered to be heavily reliant on resource safety nets, such as forests, for their survival (Mbugua 2000). Persistent poor economic performance has been blamed for the worsening poverty situation in Kenya (GOK 2003). Accurate and detailed information on poverty in Kenya is in short supply, however, available data suggest the number of people living in poverty has risen from 11 million (48 percent) of the population in 1990 to 17 million (56 percent) of the population in 2001. There is concern that this trajectory of increasing poverty will only continue to add pressures to Kenya’s already strained forest resources (GOK 2005). 2.2.2 Social indicators Participatory Poverty Assessments carried out in the 1990s indicate that the poor attribute their poverty to natural calamities (such as climate change) and traditions and cultural beliefs that deny women access to productive assets (such as forest resources). The deterioration in the standard of living in Kenya is demonstrated by the worsening of key social indicators over the last two decades. Illiteracy rates increased as enrollment rates in primary school declined, while life expectancy and child mortality worsened. Overall, the population growth rate in Kenya is declining (GOK 2003). The Millennium Development Goal Status report for 2005 states that major indicators of poverty can be recognized in a number of sectors, including low coverage in water supply services; a general decline in child nutrition and the provision of health services; increased pressure on environmental goods and services, especially forest resources; and increased numbers of people receiving below the minimum level of dietary energy consumption (GOK 2005). These worsening social indicators mean a large number of Kenyans remain vulnerable to slipping deeper into poverty. 2.2.3 Health issues This situation is further complicated by the upsurge of HIV/AIDS. It is estimated that the national HIV prevalence is at 7 percent (GOK 2005). The Kenyan National AIDS Council estimates that there are 3 million people currently infected by HIV/AIDS; and more than 2 million people have so far died of AIDS-related complications, leaving over 1.8 million orphans. Over 60 percent of those infected live in rural areas. With access to antiretroviral drugs limited by high cost, people are turning to natural medicines found mainly in indigenous forests. Demand for forest-based medicines, together with the increased dependency on fuelwood, may be increasing pressures on forests (Mbugua 2000). There are also concerns that the HIV/AIDS pandemic may be causing a shortage of both skilled and unskilled labor generally, and that this is being felt in the forest sector (GOK 2005). The increased costs to the forest sector include absenteeism of employees and the high bills for treatment, which may in turn be discouraging investment in the forestry sector overall. The proposed new Forest Policy proposes to undertake an evaluation of the impacts of HIV/AIDS to get a better understanding of the effects on the forest sector. 95 Indoor air pollution, caused by incomplete combustion of biomass materials such as wood, can have severe impacts on people’s health. Notably in Kenya, 18 percent of children under five were reported to have some form of acute respiratory infection (ARI) in 2003 (UNICEF 2006). ARI can be fatal in children. Currently, 80 percent of the population is estimated to be dependent on wood fuel (Mbugua 2000). With increasing poverty, this reliance is set to increase as is the incidence of ARI. 2.2.4 Geographical distribution of poverty Rural-to-urban migration has steadily increased in Kenya from 21 percent in 1990 to 27 percent in 2000. With slow economic growth, however, this migration has resulted in an urban population without employment and that is increasingly dependent on fuelwood for their energy needs. There are fears that this trend will result in increased demand for wood fuel products (Mbugua 2000) putting further pressure on Kenya’s forests. See appendix 5 – Environmental Assessment for further details. The geographical distribution of poverty in Kenya is hidden by national statistics. Poverty rates on the coast, in western Kenya, and in arid and semi-arid areas are twice those in Central Province with, in 1997 records, the highest prevalence of poverty being in Nyanza Province (63 percent of the population), followed by the Coast (62 percent). However, poverty hotspots, where more than 70 percent of the population live below the national poverty line, can be found in all of Kenya’s provinces (GOK 2003). 2.2.5 Culture and ethnicity Different communities in Kenya value forests differently. Some communities use forests for cultural ceremonies and religious practices. Other communities value them for subsistence needs (Mbugua 2000). In the Coast Province, scattered Kaya forests are strictly used for religious reasons (traditional prayers) and as such hold significant cultural value to those communities. Tribes such as the Kalenjin and Maasai use their local forests for cultural rituals such as coming-of-age ceremonies. To these and most other Kenyan communities, forests have profound cultural value that cannot easily be quantified in monetary terms or use values. The new Forests Act does take account of the cultural value of forests in Kenya; however, it will be important to ensure guidelines and subregulations that support the act adequately cover this recognition and provide effectively for its use in forest management plans. 2.2.6 Excluded and vulnerable groups The term “excluded groups� refers to women, youth, elderly, those with disabilities, and marginalized tribes in Kenya. These groups commonly tend to be excluded from participating in development processes, whether government or community led. Within the forest sector in Kenya it is well recognized that many of these groups have been excluded from participating in forest management, yet they are often the ones most dependent on these resources for their survival. The new draft Forest Policy specifically addresses issues around gender and youth, and recognizes that there are a wide range of forest users who depend on forest resources for their livelihoods. Studies in Kenya indicate that women are more vulnerable to poverty than men. For instance, 69 percent of the active female population work as subsistence farmers compared to 43 percent of men (GOK 2003). Given that subsistence farmers are among the very poor, this relative dependence of women upon subsistence farming explains the extreme 96 vulnerability of women. These problems are most severe in arid and semi-arid areas where women spend a great portion of their time searching for water and fuelwood. Kenya’s income distribution is highly inequitable (GOK 2005). Inequitable access to the means of production (land and capital), the distribution of wealth, and reduced access to economic goods and services and remunerative employment are all causes of poverty. It is this poverty that also makes people particularly vulnerable to shocks such as inflation and rising prices, seasonality such as drought and floods, and disasters such as El Nino. By virtue of their vulnerability, poor people are constantly on the edge of sinking further into poverty because any one of these impacts can have a negative impact on their livelihoods. At the root of much of this deteriorating poverty and declining social standards are structures of political and economic patronage (analyzed in appendix 7 – Economic and Financial Assessment and appendix 4 – Governance and Institutional Assessment). These have led to an environment in which corruption has flourished, misuse and theft of public resources have been widespread, public institutions have been chronically weakened, and the private sector has been unable to operate effectively to create prosperity. The forest sector became one of the most corrupt institutions in Kenya and the poor who depended on forest resources for their livelihoods suffered the most from this corruption. It is this backdrop of poor social statistics, increasing poverty, and deep-rooted political and economic patronage that the new Forests Act is set to overcome. 97 SECTION 3. FORESTS AND POOR PEOPLE: IMPORTANCE OF THE NEW ACT 3.1 Linkages Between People, Forests, and the Environment Figure A6.1 outlines the linkages between forests, people, and the environment. It demonstrates how livelihood strategies shape the environmental quality of the forest and therefore the importance of sustainable use. Figure A6.1 Forestry, Livelihoods, and Environment Linkages FORESTS Resources Natural processes natural, water catchments cultural, aesthetic, moderation of atmospheric habitats, biodiversity conditions prevention of soil erosion microclimate generation Processes Structures carbon sinks laws policies government incentives private sector institutions Uses Users Economic costs construction local community preventative expenditure timber, paper, poles Forest Department replacement cost medicine contractors forgone future options honey, wild foods, hunting industry indirect costs livestock grazing pharmaceuticals agriculture science fuelwood, charcoal environmental services biological resources pastoralists, farmers tourism, recreation tourists Livelihoods clearance for land exporters conservation Byproducts, inputs waste water pollution eutrophication, air pollution Environmental use of natural resources 0utcomes Negative practices and factors mismanagement, corruption encroachment, illegal activity inadequate structures and processes overexploitation, tragedy of the commons forest fires, inadequate participation, unsustainable forestry practices, population growth, market failure, poverty Disappearing forest loss of habitats and biodiversity loss of water catchment soil erosion desertification decline in resources flooding 98 It is widely agreed that many people in Kenya depend on forests for their survival (Wass 1995; Veit and Benson 2004). Table A6.1 outlines in economic terms the exact uses to which people put forests. Many of these, while recognized in economic literature, do not have clear economic values and so have been greatly undervalued to date (Emerton 1995). The table differentiates between these use values in economic terms, although these are not terms used by the communities themselves. Table A6.1 Different Social and Economic Uses of Forests in Kenya Total Economic Value Use Nonuse Direct values Indirect values Option values Existence values Community • timber • watershed • value • cultural shrines use and • charcoal protection communities • prayer benefits • building • flood control place on • aesthetic obtained materials • carbon looking after benefits from • medicines sequestration resource for • wild fruits • microclimate their forests children’s • beekeeping control • storm children protection Source: FRR 2007. It is this understanding of the linkages between people, forests, and their environment, and the economic benefits that they derive from forests, that enable us to determine what the likely social issues and concerns will be in relation to the new Forests Act. A summary of key social issues and concerns associated with the different forest types in Kenya is also provided in table A6.2 3.2 Identification of Key Social Issues and Concerns in Relation to the New Forests Act From the understanding of the social context in which the new Forests Act is being implemented and the relationship poor people have with forests in Kenya, we can begin to draw out the key social issues and concerns that might be associated with the act. While the new act has clear provisions for the recognition and role of community forest associations (CFAs) in forest management, the guidelines and subregulations on how these will work in practice have not yet been established. This social analysis is therefore an important step in highlighting issues that will need to be taken into account as guidelines and subregulations are developed. Annex A6.1 contains a list of possible questions for reviewing the social impact of new guidelines and subregulations. 3.2.1 Rising poverty and livelihood pressures Most laws that affect the forestry sector fail to address livelihood pressures, access rights for communities, and access to alternative resources. Poverty among forest-adjacent communities, especially in areas where wildlife have been a menace to the people, has contributed to forest degradation. The Forests Act 2005, section 47, provides for forest user rights to be conferred on local communities with an aim of lifting their living standards. The new draft Forest Policy (waiting parliamentary approval) includes among its objectives support for the government policy of alleviating poverty and promoting rural development. 99 Income based on forest and tree resources, providing employment, and promoting equity and participation by local communities in forest conservation and management are also components of the draft policy. Ensuring that these policy objectives are turned into reality will be an ongoing challenge. 3.2.2 Benefit and cost sharing Sharing of benefits has not been well articulated in forest conservation and has therefore been a contentious issue. There are no benefit and cost sharing mechanisms in place to guide management. Local communities have so far benefited little from the timber industry, because most benefits go either to the central government or local authorities. In addition, revenue generated from tourists rarely benefits communities (Emerton, Karanja. and Gichere 2001) because most go to the government and private operators. Lack of tangible benefits has, therefore, contributed to forest destruction and human-wildlife conflicts in Kenya (KWS 1994). Benefit sharing is not well addressed in the act but it is assumed that it would be expounded in forest management agreements because it will vary from forest to forest. 3.2.3 Sustainability and vulnerability The new act and draft policy both put sustainable management of forest resources at the heart of forestry. Previous use of forests had little regard for sustainability, and forest management at many levels was poor. This made the livelihoods of the poor people that depended on these resources vulnerable. Forests are an important safety net and while sustainability of forests is paramount in the new act, there are no clear guidelines yet on how this is to be achieved. If sustainable management is not clearly defined the following may result: • Loss of timber resources that are required for construction of houses and the provision of household products that are important to the poor • Loss of medicinal plants that play a vital role in local health care • Loss of safety nets for the poor • Increasing pressure from wild animals in protected forest resources 3.2.4 Negative impacts on communities and excluded groups As highlighted previously, while community participation is given significant importance in the new act, with a whole section of the act devoted to this issue (part IV), there are fears that because the policy is not yet official (it has been drafted and is awaiting parliamentary approval) and there are no clear guidelines on how community participation will work in practice, adverse impacts on communities that use forest resources will result. These adverse impacts could include the following: • Increased conflicts with wildlife (including raiding crops, destroying property, maiming or killing human beings) • The exclusion of women, youth, elderly, those with disabilities, and some tribes from being able to actively participate in forest associations • Forest managers not recognizing the broader interrelationships between forest management and livelihoods of the poor and therefore excluding the poor from access 3.2.5 Capacity of communities to engage Poor Kenyans are constrained by time. They are engaged in activities such as collecting firewood and water, looking for wild harvests, subsistence agriculture, and other activities to ensure their survival. Capacity to engage in implementation of the Forests Act is limited by both time and skills. These issues need to be taken into account as well as the following: 100 • Providing incentives for communities to participate • Developing new processes for actively engaging communities in management decisions and day-to-day running of forest areas • Creating more equitable distribution of the benefits accruing from forestry • Increasing skills and knowledge among local communities through a range of capacity- building exercises 3.2.6 Positive measures to reduce impacts and create opportunities Opportunities exist throughout the new act to ensure social issues are prioritized: • Recognition that properly managed forest projects can provide an escape from poverty • Engaging communities directly in the governance of local forests • Aspiring to achieve greater equity among generations (in the new draft policy) • Establishing effective tree nurseries • Developing effective partnerships between community groups and private sector interests 3.2.7 Recognizing power relations The Environmental Management and Coordination Act (EMCA) 1999 was introduced to be the overriding legal framework for environmental and natural resource management in Kenya. Because forests are one of Kenya’s most utilized natural resources, the new act will be subordinate to EMCA. Other acts that are relevant to the new Forests Act and have potential conflicts of interest or power relations include the Trust Land Act, the Local Authority Act, and the Chiefs Authority Act. The latter is seen as particularly controversial because it apparently gives a chief the right to decide what to do with a forest without consultation. As a result, many private sector investors insist that security of tenure of forest resources be made absolutely clear before they are willing to invest. The new act gives considerable weight to community participation in the form of CFAs. However, exactly what these associations are and may be is left vague in the act (Alden Wily 2000). While the act specifies that any member of a forest community19 may, together with other members or persons resident in the same area, register as a CFA under the Societies Act, there is no guidance on whom members of this association should represent. This raises concern that those groups that are commonly excluded (such as women, youth, elderly, and those with disabilities, for example) from community processes may continue to be excluded from the new forest associations, resulting in negative impacts on their livelihoods. Another area of concern is that the powers of the new forest associations are not made clear in the new Act (Alden Wily 2000). For the Kenya Forest Service (KFS) to benefit from the formation of forest associations, it needs to be able to reduce its own role and presence in forests. A CFA could, for example, be designated as a manager to protect the forest; however, there is no clear provision for this in the act and subsequently no powers given to forest associations. The new act currently gives almost all power to the Board and the Director of the new KFS. Devolving power to forest associations for the management of forests is not clear in the act and this could lead to conflict. This is particularly important because some parts of the act refer to forest associations as being managers of forests through agreed joint management plans, and other parts of the act refers to them being solely forest users with access rights. 19. A forest community is defined as a group of persons who (i) have a traditional association with a forest for purposes of livelihood, culture, or religion; or (b) are registered as an association or other organization engaged in forest conservation. 101 There is no clear distinction of which groups can apply for a role in management and, indeed, if two different groups were to apply, there is no clear process for managing any potential conflict. Table A6.2 Differing Social Issues and Concerns Associated with the Different Forest Types in Kenya Classification Proposed management Social issues and concerns Indigenous State managed through management • Exclusion of certain groups forest plans. Possible for state to enter into such as women, youth, joint management agreement with elderly, and those with anyone. Community forest associations disabilities from forest may apply for user rights. associations. • Possibility of conflict arising between two or more forest associations applying for joint management with KFS. • A definition of a forest community is one with a traditional association with a forest for purposes of livelihood, culture, and or religion. How will this be assessed? Farm forestry Outside of the state forest, managed by • Many poor people in Kenya private sector. do not have security of tenure on their land and so incentives for farm forestry will be needed Forest Private sector to be encouraged to • Opportunities exist for plantations develop and manage plantations employment on forest through appropriate incentives such as plantations. land leases, agreements, and • Will be important to ensure concessions workers’ rights and conditions are assured. Dry land forests No specific management proposed. • Will communities in arid and semi-arid areas be allowed to apply for forest associations in these dry land areas? This could be the first step in helping to recognize forest areas that have previously been outside Forest Department management. • Charcoal production is a key livelihood strategy of many poor people in dry land areas. How will these livelihood strategies be addressed by the new act? Local authority Local authority is responsible for their • Forest association user forests protection and management. A forest rights can be granted; officer should inspect these forests however, if excluded groups twice a year. Anyone can apply to enter are not included in these into a management agreement for all or groups they will be further part of any local authority forest. marginalized from legal use. 102 Approval must be given by the board. Private forests May apply for registration as a forest • May result in poor people and therefore be entitled to receive being excluded from forests technical advice and loans, and apply they previously accessed. for exemption from land rates. Where neglect of the forest is determined by the Board, the Minister can declare it to be a provisional forest under state management. Source: FRR 2007. 103 SECTION 4. STAKEHOLDER PARTICIPATION Many social and community issues have already been identified regarding livelihoods and the management and exploitation of forestry resources. There is a need now to clarify the interests of the different stakeholder groups that make up the affected population. These will include traditional forest dwellers, communities lying immediately adjacent to indigenous forest and plantations, pastoralists and migratory groups whose use of open savannah forest is seasonal, and those who depend for part or all of their livelihoods on trade in timber and nontimber forest products. There are also others living remotely from forest areas who may be indirectly affected by economic decisions affecting, for example, the charcoal trade, or environmentally by increased runoff and flooding of local rivers as a result of clear felling operations. Even within each of the above “communities,� there can be significant diversity of views and conflicts of interest. Women and children may provide much of the labor for site clearance and planting and weeding of nurseries and plantations, yet see few of the benefits that come from harvesting timber or other forest resources Appendix 3 – Summary of Stakeholder Analysis, outlines in detail all the stakeholders that will be affected by the new act. Table A6.3 categorizes the importance of each stakeholder as a beneficiary of the new act and what their likely level of influence is to be in the actual implementation of the act. This helps us to begin to understand who the potential winners and losers may be. Processes should be put in place to ensure that those with high importance as beneficiaries but who might have little influence in the actual implementation are actually incorporated into the implementation process. Table A6.3 The Importance and Influence of Stakeholders in the New Forests Act High importance as beneficiaries Low importance as beneficiaries Central government (Forest Department, Kenya Wildlife Service, Ministry of Water Forest officers High influence on and Irrigation, Ministry of National NGOs Forest Act Local Government) Research organizations implementation Private sector (saw mills and value adding) Community forest associations Central government (other) Low influence on Communities adjacent to International NGOs Forest Act forests Multilateral donors implementation Private sector (other) Bilateral donors Source: FRR 2007. 4.1 Primary Stakeholders Table A6.3 indicates the importance and influence of primary and secondary stakeholders. It clearly illustrates stakeholders that are beneficiaries and that will have a high level of influence on the implementation of the new act, in contrast to those who may either be more 104 of a beneficiary or have high influence on the implementation process, but not both. The lower right box comprises mainly secondary or external stakeholders. 4.1.1 Central government (Forest Department, Kenya Wildlife Service, Ministry of Water and Irrigation, Ministry of Local Government) The primary stakeholders are the current Forest Department (FD) and forest officers in each of the districts, the Kenya Wildlife Service (KWS), the Ministry of Local Government, and the Ministry of Water and Irrigation. KWS is a major stakeholder because 31 forests (about 60 percent of gazetted forests) in Kenya are under joint management with the FD. The Ministry of Local Government is also a primary stakeholder because all municipal and council forests lie within its jurisdiction. The Ministry of Water and Irrigation is also now a major stakeholder because it is mandated (through the relatively new Water Act 2002) to manage the water catchments in the country. These organizations have a major influence on the implementation of the new act and are potentially major beneficiaries. The key social concerns of these actors can be grouped as follows: • Interaction between the communities in and surrounding forests and representatives of government • The need for clear linkages and liaison between all concerned ministries and the new KFS • Improved awareness at all levels • The need to ensure harmony between the active policies of the KWS and the KFS and other linked parastatals and ministries • A balance of resources (human, financial, and so forth) to be shared between the KWS, the KFS, the Water Boards project (WBS), the Water Resource Management Authority, and local authorities • Concern for the time frame over which implementation of the new Forests Act will take place (for example, it may take too many years and because an election year is approaching, care needs to be exercised to avoid process derailing) • Concern that the new guidelines to implement the new Forests Act are rushed and therefore are uninformed, cumbersome, or impractical 4.1.2 Private sector (saw mills and value adding products) The private sector as a primary stakeholder mainly comprises the Timber Industry Employers Association, the Kenya Timber Manufacturers Association, the Kenya Furniture Association, and other companies involved in value added wood products. They are all primarily involved with plantation or commercial forestry but some use indigenous forests. The key social concerns of this group include the following: • Security of tenure • Detailing and actively supporting and facilitating the steps for private sector and KFS partnerships • Removal of preferential royalty arrangements, tax concessions, and logging arrangements • There is a fear that if the KFS is overzealous, it will interfere in the normal private ownership of property (for example, people should be allowed to freely grow and fell trees without permits or licenses on the small to medium scale). Thus, more of an incentive approach than a controlling approach is recommended. 4.1.3 Community forest associations (CFAs) 105 Community forest associations (CFAs), community groups, women’s groups, vulnerable groups, and individuals living on the edge of or in forests are primary stakeholders because they typically directly depend upon forests for their livelihoods. It is important to note that these groups are potentially significant beneficiaries, but have little influence on the implementation of the new act. Their main social issues can be summarized as follows: • The need for clear and explicit guidelines and procedures on how to engage with communities • Insufficient capacity in the existing FD or new KFS • The perception that the FD or KFS has that CFAs are typically donor dependent • Insufficient “goodwill� on encouraging and believing in CFAs • Ensuring “responsible� representation in committees of CFAs and also on Boards and other management organizations (in the past, the politically favored have been chosen at the expense of the community) • Creating appropriate forums to ensure community views are incorporated into priority national agendas • While the new Forests Act includes provisions for revenue sharing, the details urgently need to be developed • Other East African countries are explicit on the percentage of revenue that is to be shared with communities (Uganda, Rwanda, and possibly Tanzania). This is not the case with the new Forests Act in Kenya because revenue sharing with communities is left to the discretion of the Board. Unfortunately, this is a potential avenue for abuse. 4.1.4 Private sector (other) Members of this group are distinguished from the previous private sector group by the nature of their activities. No private sector organizations that fall into this category depend directly upon forests for their core activities. Nevertheless, their future may be dependent over the medium to long term on forests and their products. A good example is the Kenya Tea Development Authority (KTDA), whose core activities are the growing, harvesting, and producing of teas but to produce tea they depend upon and use fuelwood for the drying process in their factories around the country. Theoretically, they could switch to gas or electricity for drying processes, but in reality this would make them uncompetitive in the world market. The main social issues are as follow: • The amorphous distinction between community and council land • Insufficient involvement of chiefs and councillors in management of forests • Overlap of various acts (Trust Lands Act, Local Authorities Acts, bylaws issued by local authorities) • The new Forests Act implies that the new KFS will be all-encompassing in its mandate. This leads to a fear that they will be unable to fulfill such a broad mandate. 4.1.5 National NGOs This group includes a wide variety of civil society organizations (CSOs), community- based organizations (CBOs), and NGOs. Most are concerned with how the new act will be implemented but are not and will not be direct beneficiaries of forests or their products. Generally, the communities they represent stand to gain or lose more directly from the new act and often fall into the CFA group. Kenya’s CSOs, CBOs, and NGOs have developed substantially in the last one to two decades and now influence decision 106 making at all levels and therefore have and will continue to affect the implementation of the new act. The main social issue for national NGOs is • How communities will really benefit from the new Forests Act. 4.1.6 Research organizations The main national organization dedicated to forestry research in Kenya is Kenya Forestry Research Institute (KEFRI), which has been involved with drafting the new act. The other organizations involved in research generally work in the region but not exclusively in forests in Kenya. Thus, they are placed to influence the implementation of the new act, but again will not be direct beneficiaries. This is more clearly illustrated by the fact that they have diversified from research in forestry in Kenya to supplying forestry training services to 17 countries in Africa and have links with European, American, and Asian academic and research organizations. The main social issues can be summarized as follows: • The need for a clear definition of participatory forest management • The need to clarify how the new KFS plans to decentralize • The need to disaggregate benefit sharing, particularly between different groups such as gender-based and other vulnerable groups • The need to clarify if the KFS is going to be mainly a regulatory body or also an implementer • The need to require policy on linkages between KEFRI and participatory forest management communities • Adequate documentation of dispute-resolution mechanisms and promotion of awareness of this tool • The need to recognize and reward professionalism in the industry 4.2 Secondary Stakeholders The secondary and external stakeholders can be grouped together as organizations in the central government, international NGOs, and multilateral and bilateral donors. All these organizations have either a secondary or external interest in the implementation of the new act. An example of how an international NGO has a secondary interest, rather than a primary stake in the new act, could be the World Wide Fund for Nature (WWF). While it is appreciated that they are at the forefront of work in the forestry sector, if this opportunity ceased, they would continue working in other areas of conservation, such as wildlife, the marine environment, or the like. 4.2.1 Central government (other) This group includes ministries and departments within government that have some relationship with the FD, including semiautonomous parastatals. Examples of government ministries include the Ministry of Agriculture, the Ministry of Local Government, the Ministry of Regional Government, and the Office of the President. Examples of key parastatals include KenGen, the National Environmental Management Authority (NEMA), and the National Museums of Kenya (NMK). In each case there is some debate or overlap regarding legislation or delineation of duty and therefore opportunities for harmonization or conflict, 107 depending upon the approach. In most cases, though, the organization’s core activities are not in forestry and therefore they are termed secondary stakeholders. The main social issues follow: • Improving awareness on forest issues through all forms of education • Ensuring decentralization of forest management • Clarifying relationships, synergies, and linkages between all organizations 4.2.2 International NGOs A variety of international NGOs are currently working in forestry as a theme or have worked in forestry in the recent past. Examples of well-known international NGOs in this sector include WWF, the World Conservation Union (IUCN), and the African Wildlife Foundation. They are secondary or external stakeholders because they support projects, programs ,and policies in the sector but do not have vested interests in the new act or its implementation. The key social issues follow: • The need for a clear definition of participatory forest management • Ensuring disadvantaged and excluded groups benefit from the new act • The need to make sure concessions reach the poorest, who need them the most • Adequate participation of CFAs 4.2.3 Multilateral and bilateral donors The main multilateral donors that have a long relationship with Kenya and forestry include the World Bank and to a lesser extent the United Nations Development Programme, and the United Nations Environment Programme. The main bilateral donors that have a long history of working in forestry in Kenya include the UK Department for international Development, the Embassy of Finland, Japan International Cooperation Agency, and the US Agency for International Development. Other donors have, over the decades, supported forestry in Kenya, but generally that support has included other areas of focus or has been less direct and explicit. The key social issues follow: • Implementation of the new Forests Act to benefit the poor and marginalized groups • Ensuring gender issues are effectively incorporated into implementation of the new act • Repatriation of forest officers in the new Kenya Forest Service and how it will affect their livelihoods 4.3 Stakeholder Participation Stakeholder participation at all levels is integral to the success of the new Forests Act. As the FD begins to roll out the new act, it will be important that stakeholder concerns and opinions are taken into account and stakeholders feel they are able to participate effectively in the process. To ensure this participation, the government of Kenya has established the Forest Sector Reform Committee. This committee comprises senior representatives from across government, representatives from the forest industry, NGOs, conservationists, forest users, and development partners. It is chaired by the Permanent Secretary of the Ministry of Environment and Natural Resources and is the main organ to drive the reform process. A Forest Reform Secretariat has been established in the FD to serve this committee and carry out tasks as requested by the committee. One of the first tasks of the secretariat has been to 108 develop a road map for the implementation of the new Forests Act with a clear time frame and outline of budget resource requirements. While the composition of the Steering Committee represents a wide range of stakeholders, it will be important for the government to monitor and ensure that it is indeed an effective mechanism for getting stakeholder concerns considered in the implementation process. The committee will need to be accountable to forest users if it is going to be effective in the rollout of the new Forests Act. 4.4 Stakeholder Priorities Identified in the First SEA Stakeholder Workshop Participants in the first workshop identified a range of social issues they considered to be of immediate priority in implementation of the new act. All the issues identified were said to be in danger of not being adequately addressed in its implementation. The social issues identified were clustered into eight themes as outlined below. 1. Community participation 2. Livelihoods and poverty 3. Need for community benefits 4. Capacity of communities to engage 5. Existing processes in communities 6. Cultural and religious issues 7. Importance of timber, charcoal, and nontimber forest products 8. Gender and disadvantaged groups 4.4.1 Community participation The group felt that community participation was going to be a key underlying issue of the whole act. If community participation is not explicitly addressed and clear rules and regulations put in place to steer implementation, communities could be excluded. A greater understanding of what is meant by “communities� is needed if the KFS is going to be able to effectively engage them. Communities are not homogeneous. There is a danger that elites may be the ones to benefit at the expense of rest of the community. How is it going to be different? 4.4.2 Livelihoods and poverty Many of the communities inside and around forests depend to a large extent on the forest resources they are able to use. How are the poor, the illiterate, and excluded groups in a community going to be able to access concessions? Does the FD recognize and understand the extent that the livelihoods of the poor depend on forests? How is the FD going to ensure that people are not excluded? 4.4.3 Need for community benefits The new act has the potential to ensure the community benefits more directly from forests, but there was a fear that this potential may not be exploited. Depending on how rules and regulations are developed and interpreted, communities may not benefit as much as was intended. Who is going to ensure that communities do benefit? How are all members of the community going to benefit as opposed to some of the elite few? 4.4.4 Capacity to engage The overriding feeling of the group was that while the new act provides for communities to be engaged in forest management, there are only a few people within communities that will have the capacity to engage in the process. How will implementation of the new act seek to 109 strengthen capacity in communities? How will the new act ensure that the elites (with the capacity to engage) do not dominate and take control? 4.4.5 Existing processes in communities It was felt that there were already some very good examples of how communities were managing forests, even without the necessary legislation. An example was given by representatives from IUCN, where in the North of Kenya a recent drought had resulted in many communities losing cattle. In Loima, where the community manages its local forest, all the cattle survived. Fears were expressed that when the new legislation is implemented these good practices will be forced to stop and replaced with new models that have not necessarily been proved to work. 4.4.6 Cultural and religious issues There is recognition in Kenya that many tribes place varying cultural values on forests, using them for different purposes and needs. While the new legislation provides for this continued use, it is only through an application process that continued use will be granted. Concerns were raised that some communities do not have the necessary capacity or support to enter this application process and so may be excluded. 4.4.7 Importance of timber, charcoal, and nontimber forest products Forest products (both nontimber and timber) are vital to the livelihoods of most Kenyans. While the act takes this consideration into account for those living in or near the forests, there are many Kenyans who travel great distances to access the resources these forests provide. How will the rights of these people be protected? There is also a concern that implementation of the new act is likely to result in increased prices for forest products, which may affect the poor people’s access to these vital resources as well as create a disincentive to abide by the law. Participants felt that the economic impacts of the new act on these resources need to be clear before implementation takes place. 4.4.8 Gender and excluded groups It is widely accepted that traditional gender roles have inhibited the participation of women in forestry development. In particular, the role of women and other excluded groups in forest and tree resource use and management have not been fully recognized and they are often marginalized from the process. Concerns remain that while community associations are now being recognized as entities to engage in forest management and use, these associations may not welcome women and excluded groups, thereby reinforcing the current situation. 110 SECTION 5. CONCLUSIONS Because this is a rapid social assessment, some stakeholder groups have been identified but not yet engaged. These include the following: • County council representatives and chiefs, for example, Narok County Council representatives and Chiefs could be useful to meet because Narok is one of the major charcoal producers and there are many issues with the Local Authorities Act, bylaws, the Trust Act, the Chiefs Authority Act, and the Forests Act. • Building contractors as users of timber; best to approach through architects association or surveyors • Tana and Athi River Development Authority and other similar parastatals that look after arid and semi-arid lands During these wide stakeholder discussions, it was noted that there is still some uncertainty about what a Strategic Environmental Assessment (SEA) is and how best stakeholders can engage in the process to bring about positive benefits. Representatives of the FD in particular felt that they would benefit from further explanation of the SEA process and how they can get the maximum benefit from it. Annex A6.2 summarizes the risks and opportunities provided by each section of the new act. Annex A6.3 summarizes workshop participants’ social concerns and which sections of the new act may address those concerns. 111 Annex A6.1 Possible Questions for Reviewing the Social Impact of New Guidelines and Subregulations Being Developed as Part of the Implementation Process of the New Forests Act In undertaking this rapid social impact assessment of the new Forests Act, the following questions were used to guide the analysis. As new guidelines and subregulations are developed to support the new act, these questions should be asked again to ensure social issues are not overlooked. Social development Questions for social impact assessment of proposed new issue guidelines and subregulations Understanding the (1) Analyzing interests, needs, and problems of people social features • Who are the people (groups of people or individuals, for example, a group of indigenous people) who will be involved with or affected by the new guideline or subregulation? • What are their differing social and socioeconomic situations? • What are their differing points of view on the current problems? • What are their differing needs and interests? • What are the reasons for current forest practices? • What attempts have people made at solving the problems they perceive? • Who are the main stakeholders in the new guideline or subregulation and what is the nature of their interrelations (for example, relationship between forest users the FD)? (2) Analyzing tenure and usufruct rights • What are the traditional tenure and usufruct rights to land and trees? • What are the official tenure and usufruct rights to land and trees? • What role do traditional and official tenure and usufruct rights to land and trees play in current forest practices? (3) Analyzing potentials, resources, and cultural norms of the people • What is the local knowledge available (for example, concerning the suitability of local conditions for different kinds of species)? • What are the resources people can draw on (for example, land, money, work, and the like)? • What are the cultural norms with respect to forest resources (for example, holy trees)? Responding to the • What measures would be appropriate in responding to people’s needs of people own needs and interests (for example, creation of usufruct rights or stewardships, plantation of certain tree species)? • In the case of changing current uses of forest products, what alternative income sources will take their place? • If tenancy issues are a cause of conflict or problems, what will be the measures to resolve these (for example, incorporation of traditional rights into guideline)? • If usufruct rights are a cause of conflict or problems, what will be the measures to resolve these (for example, creation of new rights or stewardships)? • Will the guideline require behavioral changes of people for them to benefit? • What measures will be appropriate to increase people’s willingness to make the necessary behavioral changes? Reaching poor and • Which groups or individuals will benefit from the new guidelines or disadvantaged subregulations, and in what way? populations and • What measures will be appropriate to ensure that benefits will be integrating them into targeted specifically toward poor and disadvantaged groups (for 112 the development example, improving their access to forest products)? process • Which material or nonmaterial costs will be introduced by the guideline or subregulation, and who will be affected by them? • What measures will be appropriate to ensure that these costs will not adversely affect poor and disadvantaged groups? • If adverse impacts on poor and disadvantaged groups do occur, what will be appropriate measures to mitigate them (for example, allocation of new land in exchange for land on which a preservation area is to be created)? Recognizing the (1) Analyzing, with special emphasis on gender, the situations of roles of women, as individuals and groups of people involved with, or affected by, the well as men, and guideline or subregulation ensuring equal • What is the likely distribution of tasks among women and men with benefit respect to planting, harvesting, processing, and marketing of forest resources? • What role do forest products play in subsistence or income earning of women and men, and who has control over forest-related income? • What are the different needs and interests of women and men (for example, preferences for tree species, usufruct rights for household consumption, or livestock fodder)? (2) Analyzing the resources and rights of women and men • To what extent do women, as compared to men, have access to or control over forest-related resources (for example, usufruct rights and tenure)? • What role do traditional and official tenure and usufruct rights play in regulating women’s and men’s access to and control over forest- related resources? • What are the potentials (for example, knowledge of indigenous harvesting techniques) and resources (time, labor, money) of women and men that can be mobilized to solve existing problems? (3) Ensuring equal participation and benefit • What measures will be necessary to ensure that women will be actively involved in planning, decision making, and monitoring (for example, creation of committees with equal participation of women and men)? • What measures will be appropriate to ensure that women’s access to benefits will be equal to that of men (for example, offering training and extension tailored to the needs of women)? • What measures will be appropriate to ensure that the workload of women will not increase without their explicit consent or without improving their economic situation, either simultaneously or in the near future? • What measures will be necessary to ensure that women’s access to, and control over, forest-related resources or products is improved (for example, fuelwood, fodder, land)? Encouraging • How will the main stakeholders of the guidelines or subregulations participation of all be actively involved in developing them (for example, formation of stakeholders in the user groups)? development • How will the guidelines or subregulations encourage people to process and seeking participate actively? to empower local • What measures will be appropriate to support the formation of communities autonomous decision-making bodies at local community level? 113 Annex A6.2 Matrix of Social Risks and Opportunities of the New Kenya Forests Act 2005 Element of the act Forest type Risks (-) and opportunities (+) most relevant to Indigenous or dry land Farm forestry or Local authority Plantations private PART 2 – ADMINISTRATION Functions of the +/- specific inclusion of poor, women, disadvantaged groups will be needed in policies and Kenya Forest Service guidelines (section 4) + extension services provided to associations on sustainable forest management + increased livelihood opportunities through tourism, recreational, and ceremonial use of forests (access by the poor?) + empowerment of associations and communities in the control and management of forests Functions and power Social of the Board + required to be gender balanced (sections 7, 8, 9, 11) -/+ may not have representation of the poor but opportunity to co-opt representation exists Forest conservancy + opportunities for voice of local communities to be heard through community areas and representatives on forest conservation committees management (section +/- potential to benefit from royalties and other rights generated in local area 13) Funds (sections 14– +/- provision of forest extension services – how will they reach the poor? 20) PART 3 – CREATION AND MANAGEMENT OF FORESTS Ownership of forests + protection of community rights to use forest resources (subject to prescribed conditions) and rights to forest - how to ensure that different members of a community have equal access and rights products (sections + recognition of importance of forests to livelihoods for local communities 21–34) + publication consultation required for purchase or exchange of forest land + requirement for local authorities to ensure housing developers create mini-forests for public use + recreation park required in every market center - application process required for use of declared nature reserves by communities – how accessible will this be and what engagement will local community have in the process for declaring a nature reserve? Management of +/- local forest conservation committee should be engaged when management plan forests (sections 35– developed. What about others that may have an interest? How is their voice heard? 45) +/- joint management of local authority forest can be obtained by anyone (individual, NGO, company) +/- right to object to Board approval of activities in forest areas and if feel aggrieved, take to high court PART 4 – COMMUNITY PARTICIPATION Community forest +/- abilities to register a forest association under the societies act associations +/- can apply to participate in the management of a state forest or local authority forest (sections 46–49) +/- traditional forest user rights observed by act +/- is it only members of the association that are able to access user rights that the association is given or is it all forest communities? If people do not register, are they excluding themselves from their right to use forest land? If so how will the act ensure the illiterate, the uneducated, the poor, and disadvantaged groups are not further disadvantaged by the act? PART 5 – ENFORCEMENT Powers of forest +/- forest officer has the power to arrest – how will the rights of citizens be protected? How officers (sections 50– will citizens be made aware of what is and is not allowed to happen in the forest? 51) Prohibited activities Not applicable in forests (sections 52–54) Prosecution (sections Not applicable 56–58) PART 6 – MISCELLANEOUS Act to bind Not applicable government (sections 59–62) 115 Relation to EMCA Not applicable (section 63) PART 7 – TRANSITIONAL PROVISIONS Transfer from old act Not applicable to new (sections 65– 67) Source: FRR 2007. 116 Annex A6.3 Social Concerns Associated with the New Forests Act 2005 as Identified by Participants in the First Stakeholder Workshop PART 4 – COMMUNITY PARTICIPATION PART 7 – TRANSITIONAL PROVISIONS MANAGEMENT OF FORESTS PART 6 – MISCELLANEOUS PART 2 – ADMINISTRATION PART 5 – ENFORCEMENT PART 3 – CREATION AND Sections 65–67 Sections 14–20 Sections 21–25 Sections 26–27 Sections 28–29 Sections 32–33 Sections 35–36 Sections 38–39 Sections 42–44 Sections 50–51 Sections 52–54 Sections 56–58 Sections 59–62 Section 46–49 Sections 7–11 Section 13 Section 30 Section 34 Section 37 Section 40 Section 41 Section 45 Section 63 Section 4 ISSUE Social 1. Community participation X X X X X X X X X X X X X X X X X X X X X X 2. Livelihoods and poverty X X X X X X X X X X X X X X X X X X X X X X 3. Need for community benefits 4. Capacity of communities to X X X X X X X X X X X X X X X X X X X X X engage 5. Existing processes in X X X X X X X X X X X X X X X X X X X X X communities 6. Cultural and religious issues X X X X X X X X X X X X X X X X X X X X X 7. Importance of timber, charcoal, X X X X X X X X X X X X X X X X X X X X X X and nontimber forest products 8. Gender and disadvantaged X X X X X X X X X X X X X X X X X X X X X groups Source: FRR 2007. 117 APPENDIX 7 ECONOMIC AND FINANCIAL ASSESSMENT SECTION 1. SUMMARY Key messages emerging from the rapid economic and financial analysis follow: • The Forest Department (FD) currently manages all state forests. At present the revenues generated from these forests is not enough to cover the management costs incurred. From the analysis it is clear that under the new Forests Act the Kenya Forest Service (KFS) has the potential to raise enough revenue to fund its activities and within 10 years, run a surplus while at the same time providing resources to community-managed forests. In fact, the assessment of past revenue collection showed that a few key measures carried out in 2004–5 significantly improved revenue collection, by more than seven times. • Good forest management practices advocated by the new Forests Act are intended to remove major constraints in realizing optimal returns from the forests—for example, lifting the current harvesting ban in plantations and improving revenue collection systems. This, together with a range of other measures, is expected to raise revenues from the current 30 percent levels of potential revenue to over 95 percent, shortening the period in which the new KFS can becoming self sustaining. • The FD, being the main policy maker and implementation agency of the forest sector, has a relatively small budget, accounting for 0.5 percent of the total national budget in 2005– 6. The department faces challenges, especially in the financing of the districts. The transfer of resources to the district offices has been at times unpredictable and inadequate, resulting in an underfunding of local forest protection and development work. • The allocation of donor aid to the FD has significantly increased over the past years. But domestic resources have decreased over the same period, suggesting a partial crowding out of government resources to finance development expenditures. It will be most critical to ensure that recurrent needs of the donor-funded development projects will be financed in the future. Also, some evidence suggests that the FD has struggled with the disbursement of donor aid, in particular during fiscal year 2005–6. • The FD succeeded in setting up a comprehensive reform management structure and coordinated reform preparation with the development partners. Several donors have committed funds to assist the reform secretariat in the facilitation of the forest sector reform process. • Implementation of the Forests Act will call for major reforms within the FD to transform it to the KFS. This will require a large share of public resources to support capacity building and forest management. However, domestic resources to fund the reform have not been incorporated in the 2006–7 budget. • The reform secretariat of the FD managed to mobilize adequate external resources to fund more than two-thirds of the FD forest reform work plan. However, issues related to the predictability of donor funds, the timely implementation of the committed aid, and the absorption capacity of the FD to manage the donor aid over a short period, may jeopardize the readiness of the sector for 2007 and adversely impact forest management under the new act. • A critical area of concern is preparation for the institutional transformation of the FD to the KFS. Organizational studies have not yet been implemented and there is a strong risk that the FD will mainly roll over its staff to the KFS. • Involvement of communities in forest management will justify their receipt of a share of benefits resulting form the forests, which is a positive move toward livelihood improvement and poverty eradication. However, it is not clear at this stage how the FD foresees to ensure broad participation by the local communities in the decision-making process related to forest sector reform. SECTION 2. THE FOREST RESOURCE Kenya has both indigenous and plantation forest resources providing a wide range of economic, environmental, and social goods and services. The services include raw materials for the wood-based industries (which create jobs), soil stabilization, carbon sinks, and water catchments to mention a few. The population growth rate is high, resulting in increased demand for forest goods and services from a resource base diminished by conversion of forest lands to other competing land uses. The need to manage existing forests effectively to sustainably meet the demand for forest products and services is therefore evident. The Kenya Forestry Master Plan, a strategic response taken by the government in 1994, had foreseen a wood deficit resulting from supply and demand imbalances and called for a review of the existing Forests Act to accommodate reforms in the forestry sector (MENR 1994). The new Forests Act was passed by Parliament in 2005 with the aim of addressing most of the problems facing the forestry sector by creation of an environment in which existing forests can be optimally used. The master plan recommended development of several forms of partnerships in forestry development because forestry could no longer be left entirely to the FD. 2.1 Forest Cover Most of Kenya (88 percent) is arid—the lands receive little rainfall and are covered by woodlands and grasslands, which are fragile ecosystems requiring unique interventions for sustainable commercial exploitation. The remaining 12 percent of the land area is shared between agricultural farm lands, estimated to cover slightly over 10 percent, and closed- canopy forest, covering slightly under 2 percent of the total land area (FAO 2000). These forests are on both private and public land. Those on public lands and gazetted for public forestry land use are managed by the FD, while the forests on private lands are managed by the private owners for many different uses. Gazetted forests cover 1.7 percent of Kenya’s total area. The most recent national forest resource data are contained in the Kenya Forestry Master Plan figures of 1994 and its projections of different wood supplies and demand levels, which seem to compare well with present day actual figures where available. Lack of authentic forest data in some areas was a major problem in this analysis but discussions with senior forest officers was undertaken to clarify data issues. 1.2 Indigenous Forest Indigenous forests are natural forests found in areas of high-potential and medium-potential land (potential for other uses, for example, agriculture) facing high population pressure. Management of indigenous forests is carried out by the FD. Commercial exploitation has 119 been banned, leaving indigenous-forest management to cover provision of environmental services and nonwood forest products. The ban on indigenous forests for timber will, however, be lifted by the proposed Forest Policy and by the Forests Act 2005, which are expected to provide a vision for management in the future. Although exploitation for timber has been banned since 1999, cases of illegal logging have been reported with local industries being supplied hardwoods by illegal operators. Because of the porous nature of forest boundaries, illegal poaching of wood has proved difficult to monitor and control. Local communities are, however, allowed to collect fuelwood from dead and fallen trees for their use at a fee. Under the Forests Act 2005, indigenous forests, covering an area of 1.064 million hectares (ha) (FAO 2002), will be managed by the KFS. Protection will be the major activity. Discussions with FD staff (heads of economics, planning, and dry lands sections) indicated that about 30 percent of the indigenous forest could be managed by communities under participatory forest management if the communities were given incentives to increase generation of revenues from sources such as ecotourism, beekeeping, collection of fuelwood, medicinal plants, insect farming, fishing, grazing, and the like. 1.3 Plantation Forests Plantation forests are man-made commercial forests designed to ease pressure on indigenous forests for the provision of industrial wood, the demand for which has been increasing at a high rate. Plantation forests are composed of exotic tree species that are fast- growing in comparison with indigenous tree species. The main species are cypress and pines for timber, paper, and pulp, and eucalyptus for transmission poles and fuelwood. Plantation forests are located within the gazetted forests and managed by the FD. The areas under industrial plantation have been declining from 170,000 ha in 1994 to the current level, which compares well with the master plan forecast of a decline in wood supply. The master plan projected the available plantation area in 2005 at a level of 120,000 ha. Since the mid-1970s, the capacity of the FD to sustainably manage industrial plantation forests has declined as a result of lack of political support, an inadequate business environment within the administrative apparatus, tight budgetary allocations, and a general staff attitude not conducive to forestry business management. This has led to progressively poor plantation management, abuse in the disposal of forest products, and preferential licensing, all of which contributed to a decline in the supply of timber and other products. As a result, beginning in 1999 the government imposed a partial ban on all forms of harvesting from forest plantations except for one paper mill factory . SECTION 3. FOREST REVENUES Forest revenues are expected to come from the sale of forest products and services. With the ban on logging in indigenous forests (managed only for provision of environmental services), plantations are the only source of timber. Currently, logging from forest plantations has been partially banned (with an exception for one paper mill factory) to enable the FD to develop effective management strategies and control measures. With logging banned in indigenous forests and partially banned in industrial plantations, wood supplies are expected to come from private forests. It is envisaged that implementation of the Forests Act will result in removal of the harvesting ban in plantations once good controls for timber assessment and revenue collection are put in place. 120 3.1 The Present Forest Revenue System 3.1.1 Composition of charges Forest charges are levied on the production of roundwood and nonwood forest products and services in forest plantations and indigenous forests. 20 In forest plantations, most revenues derive from charges (royalties) on the sale of logs used mainly for saw milling, transmission poles, pulpwood, and fuelwood (see table A7.1). A small amount of revenue is raised from charges on minor forest products such as cultivation, grazing, and resins and gum extraction. Minor forest products are subject to an annual license application fee, an operating license fee, and volume charges. Sources of revenues from indigenous forests include mainly charges on fuelwood as well as concessions for provision of services such as ecotourism, beekeeping, herbal medicines, and other nonwood products. The royalty rates for harvesting roundwood in indigenous forest have been set at a high level to discourage harvesting in the natural forest and to allow for recovery time after years of overexploitation. Table A7.1 Major and Minor Forest Products that Incur Charges Forest plantation Indigenous forest Forest product Minor forest product Forest product Minor forest product and fees and fees Roundwood (especially Cultivation Roundwood Grazing cypress, pine, and eucalyptus) Transmission poles Grazing Fuelwood Resins and gum Posts Resins and gum Building posts Herbal medicine Pulpwood Withes Ecotourism Fuelwood License fee Beekeeping License fees Recreational facilities Source: FRR 2007. The FD does not levy any charges on trade in forest products, but individuals and companies operating in the forestry sector pay a range of charges, fees, and taxes to local and central governments, including value added taxes, income taxes, cess charges, trading license fees, catering levies, service charges, and training levies (Mbugua 2003). In addition, individuals and operators in the forestry sector may also pay other charges as part of their operations (for example, support to afforestation programs, research support, rehabilitation of quarry sites, and infrastructure development). These charges are largely voluntary except for rehabilitation of quarry sites. 3.1.2 Forest assessment, price setting, and revenue collection In addition to wood production, the FD is also responsible for quantity assessment, pricing, and revenue collection. Quantity assessment For plantation forests, the amount that should be paid is based on an assessment of standing volume.21 The inventory section of the FD assesses volume of a given plantation and invoices the intended buyer, who pays the charge at the local forest station. In past 20. Government revenues are not collected from the production of round wood or other forest products from the vast areas of bushland and wooded grassland, which are under communal land ownership (Mbugua 2003). 21. Ground scaling (assessment of felled volume) and weight are also occasionally used to assess charges. 121 years, there have been problems with underreporting and inaccurate data collection of assessed volumes. In indigenous forests, volume assessment is done by log measurement— a method referred to as ground scaling (usually done after felling) and that is used to report or recover 26 percent of the expected volume (World Bank 1992). Price setting Forest prices to sell the resulting volumes are set annually by the FD (based on the so-called replacement cost method) with the main aim of recovering production costs. Prices are communicated to field officers and consumers through a Forest Department General Order prepared annually by the Chief Conservator of Forests for harvesting in plantation forest. Since 1995, FD attempts to increase prices have been hampered by resistance from established sawmillers and Kenya’s single pulp and paper mill, Pan African Paper Mills (PPM), which have successfully petitioned the minister in charge of forests to refrain from any adjustment of royalties. Additionally, in recent years the FD has also been under political obligations to support the paper production industry and to keep charges on pulpwood production at a low level to protect the local company from cheap imports. However, following a change in the political leadership of the Ministry of Environment and Natural Resources (MENR), the FD succeeded in raising the price of pulpwood from K Sh 315/m3 to K Sh 700/m3 (US$4.66/m3 to US$10.37/m3) in 2004. At present, FD timber royalty rates amount to K Sh 1,400/m3 (US$20.74/m3) for saw wood, K Sh 700/m3 (US$10.37/m3) for pulp wood, K Sh 340/m3 (US$5.04/m3) for thinning, and K Sh 400/m3 (US$5.92/m3) for fuelwood.22 These prices are below market prices because private wood producers’ prices to sawmillers are at an average K Sh 1,800/m3 (US$26.67/m3) for saw wood, K Sh 1,400/m3 (US$20.74/m3) for pulpwood, and K Sh 700/m3 (US$10.37/m3) for fuelwood. Comparing these prices, however, with pine prices from Brazil and Indonesia, the charges for pine prices are set at K Sh 8,100/m3 (US$120/m3) in Brazil and at K Sh 11,500/m3 (US$170.37m3) in Indonesia. The level of royalty rates in Kenya is between 18.5 percent and 13.0 percent below the prevailing international market prices for pine timber (Global Wood Trade Network 2006). Therefore, much scope exists to adjust prices to local market levels and, when opportunities arise, to adjust to international levels. As mentioned above, royalty rates on harvesting roundwood from indigenous forests are fixed at a high level, on average K Sh 8,000/m3 (US$118.52/m3), to discourage any cutting and to strengthen the harvesting ban and, hence, to enable recovery of degraded indigenous forests. Prices for minor forest products in indigenous forests, often harvested by communities living near the forest, have been set at a low level to make them affordable for the poorer members of communities and to create incentives to support forest conservation initiatives (Mbugua 2003). Sale of forest products All forest products from government forests are sold by the FD. Plantations to be sold are listed in the annual harvesting plans prepared and revised by district forest officers (DFOs) for their respective districts. Plantations found in the plantation plans but not on the ground occur frequently, making most of the plans unreliable. Once a plantation is ready for cutting, the DFO invites the inventory section of the FD to assess the standing volume. The assessment is performed for each interested licensee on the basis of the licensee’s capacity to utilize the area. Following the assessment, the inventory section sends invoices to the licensee, expecting the licensee to pay before cutting Though all payments to the station forester should be made in advance according to the Forest Department General Order, unauthorized cases of credit sales have been reported, resulting in arrears of revenues amounting to K Sh 200 million by 2000. Local communities are not involved in the collection 22. Forest Department economic section records, 2005. 122 of revenues but have assisted the FD in the past by reporting unsustainable or illegal removal of forest products (Mbugua 2003). Collection All main forest revenues (derived from charges levied on timber, fuelwood, and pole production) are collected by the station forester and submitted directly to the local district treasury (see table A7.2). These revenues form part of total government revenues. Revenues raised from operating license fees and charges on minor forest products (nonwood forest products and services), summarized under “Miscellaneous� in table A7.2, are credited to the Appropriation in Aid (AIA) account of the MENR for direct use by the ministry. These revenues amounted on average to 11 percent of total collected revenues over the period 1999–2000 to 2004–5 (see figure A7.1). The FD’s accounting officer is authorized by the treasury to utilize the AIA account in addition to the FD budget disbursed from the exchequer account. However, the amount is small; hence, the FD depends largely on resources from the government’s consolidated fund. Table A7.2 Collection and Final Beneficiary of Taxes and Nontax Revenues from the Forestry Sector Collection Final beneficiary Timber Forest officer (FD) Treasury Fuelwood Forest officer (FD) Treasury Poles Forest officer (FD) Treasury Miscellaneous Forest officer (FD) MENR (AIA) Value added tax Kenya Revenue Authority Treasury Trade license fees Local Government Authority Local Government Authority Income taxes Kenya Revenue Authority Treasury Cess charges Local Government Authority Local Government Authority Sources: FRR 2007 and FD economic section officers. Figure A7.1 shows the total revenue collected in the sector by revenue source, with the bulk of revenues (about 95 percent in 2004–5) stemming mainly from royalties on timber (including the production of pulpwood and saw logs).23 However, the level of timber revenue collection has declined since 1999–2000 from K Sh 109 million to K Sh 50.4 million in 2002– 3, which can be partially attributed to the introduction of a ban on saw logs in forest plantations as well as a harvesting ban in indigenous forests, and partially to underassessment of wood volumes and low collection of revenues. Revenues from the production of fuelwood and poles are less significant for the sector. The sharp increases in total revenues in 2004–5 (in particular of timber but also all other forest products) by more than 700 percent reflects the successful adjustment of royalty rates on saw wood and pulpwood, implementation of several measures reducing revenue leakages, and improvements to collection efficiencies at the station level.24 23. See statistical appendix 1, table 1 for more information. 24. Information about the total amount of revenue collected from cess charges and taxes levied on the forestry sector are not available. 123 Figure A7.1 Revenue Collection in the Forestry Sector 600.0 500.0 400.0 300.0 200.0 100.0 0.0 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 Timber Fuelwood Poles Miscellaneous Source: FD. Note: Miscellaneous receipts refer to the charges levied on minor forest products and services and the revenue collected from license fees. 3.1.3 Low level of revenue collection It is difficult to assess the adequacy of revenue collection in the sector because the projected revenues of the FD are mainly based on administratively recommended marginal increases from the previous year. It would be preferable for the projection of revenue to be based on the constellation of three key factors: (1) area (the allowable area to be cut within a given period, based on forest management records such as the harvesting register); (2) yield (the volume of wood assessed and booked for revenue calculation from a given plantation); and (3) price (the price at which the assessed volume is sold). Any intervention in management that affects the level of any of these three factors will lead to a different revenue level.25 According to an efficient-management scenario, revenue collection from plantations should have amounted to K Sh 403 million (US$6 million) in 2002.26 However, this translates to a 30 percent collection rate when compared with actual revenue collection in 2002. Actual revenue collection Potential revenue collection in 2002 under efficient management in 2002 K Sh 127,000,000 3,000 ha x 280 m3/ha x K Sh 450/m3 = K Sh 403,200,000 In general, low revenue collection levels in the past have been attributed to the weak and inefficient forest administration and the poor royalty assessment and collection system. More specifically, shortcomings exist along the entire process of determination of the royalty rate 25. See annex A7.2 for a more detailed analysis. 26. Plantation area is estimated at 120,000 ha (forestry master plan forecast) where 90,000 ha are saw wood, 25,000 pulpwood, and 5,000 eucalyptus for fuelwood and transmission poles. Allowable cut will be based on rotations of 25 years for saw wood, 18 years for pulpwood, and 8 years for eucalyptus plantations. This translates to annual harvesting areas of 3,000 ha for saw wood, 1,500 ha for pulpwood, and 700 ha for eucalyptus. The expected yield under current management and efficiency is 280 3 3 3 3 m /ha for saw wood, 300 m /ha for pulpwood, 100 m /ha for transmission poles, and 80 m /ha for fuelwood. It should be noted that saw wood plantations also produce timber from thinning, which in 1998 was 25 percent of the clear fell volume per ha, that 3 is, 95 m /ha. It should also be noted that there are other ways of undertaking this calculation including using the mean annual increment, as was done in another World Bank study (World Bank, 2007). In the latter it was assumed that the total plantation area is not available for harvesting, this and the use of mean annual increments resulted in different estimates of revenue. 124 until actual collection (see figure A7.2). It should be noted that the yield level of 280 m3/ha being used is not the optimal one but the yield under current management efficiency. Plantations in Kenya can yield about 400 m3/ha for saw wood and 450 m3/ha for pulpwood. 125 Figure A7.2 Shortcomings of Kenya’s Forest Revenue Collection Revenue Area X yield X price = collected • Inaccurate reporting due to • Poor assessment resulting • Prices can be lower than • Non collection of poor area measurement in lower volumes than the true value due to revenues even • Illegal cutting of some parts actual method used to set them though calculated of a forest before • Under reporting by the • Prices could be dictated by and invoiced assessment assessment team in higher government • Revenues collected • Excision of existing collusion with the buyer authorities but not booked or plantation for other • Poor forests establishment reported purposes • Loss of trees through • Plantations • Deliberate under reporting animal damage and fires earmarked for by the assessment team for cutting and even revenue calculation invoiced but not cut due to saw miller inability to cut • Poor marketing strategies on side of FD making mature plantation remain standing for a long period of time Source: FRR 2007. 3.1.4 Monitoring Revenue collection is monitored through a reporting system developed to capture the necessary data related to both production levels and the amount of revenue collected. There are also regular field visits by staff from headquarters and independent auditors from the Office of the Controller and Auditor General. However, the absence of precise information about plantation stand developments, potential annual yield, and cutting plans makes it practically impossible to monitor the amount of timber actually harvested and extracted from the forest each year (Mbugua 2003). 3.1.5 Reforms in Kenya’s revenue system Revenue collection can be improved if efforts are not undermined by vested interests and focus on key measures. The increase in revenue collection in 2004 represents a good example of how the FD can successfully remove pricing and monitoring discrepancies. The department managed to adjust pulpwood prices from K Sh 315/m3 to K Sh 700/m3 and at the same time require the Pan African Paper Mills company to pay revenues directly to the local forest station and not the ministry headquarters where revenue collection could not be effectively monitored. (In the past, Pan African Paper Mills was the only company to pay charges directly to the ministry.) Following these measures, revenues from roundwood logs rose from K Sh 50 million in 2003 to K Sh 509 million in 2004. 126 Kenya’s forest revenue system could be improved by a number of ways: • To address the lack of data and information about allowable cut from forest plantations and current demand and supply, there is an urgent need to carry out plantation surveys and inventories, to revise harvesting plans, and to institutionalize cutting plans in the Forest Management Plans Office. Additionally, the establishment of a national data bank would serve to monitor plantation growth. In this context, the preparation of management plans for the forest units by all forest managers is another important starting point to improve the allocation of roundwood. • Royalty rates, particularly for roundwood, need to be reviewed and a market-based royalty regime introduced to reduce the current windfall gains of the industry and to encourage operational efficiencies in the industry. Furthermore, efforts should also focus on improving revenue collection with a focus on the collection of arrears. • Development of an efficient marketing strategy would assist the FD in basing future wood allocation on the consumer’s ability to efficiently extract all the assessed merchantable volume from the forest. At present, current practice restricts the use of various roundwood assortments because wood consumers are allocated forest stands close to their wood-processing factories. • The introduction of competitive bidding for the allocation of timber rights would help to establish market-based prices and improve the supply situation. To limit the possibility of internal agreements between major firms, the FD would have to establish clear procedures and closely monitor the implementation of the open bidding and auctioning process. • The FD should provide incentives to attract investors into the utilization industries (saw milling and pulpwood) to raise demand and improve efficiency of processing the wood, leading to subsequent higher willingness on the part of investors to pay for roundwood. One measure would be to provide longer term contracts that will favor industries seeking loans from commercial banks. • The FD could explore the option of contracting with a private company to carry out volume assessment. This would remove potential conflicts from the fact that the FD is the producer of wood, the quantifier, seller, revenue collector, and even supervisor. • Channelling forest revenues so they directly finance forest conservation will require a change in government procedures and the introduction of mechanisms whereby the revenues earned by indigenous forests or plantations could be directly plowed back into their conservation or into strengthening the future KFS. 3.2 Impact of the New Forests Act on Forest Revenues and Projected Revenues The main purpose of the legal reforms envisioned by the Forests Act 2005 is to improve efficiency, enhance economic and environmental sustainability, and improve provision of forestry goods and services. The forestry master plan had aimed for the same goals, but it was never implemented. The Forests Act provides the legal foundations for some of the cornerstones of forest reform, such as establishment of the KFS, concession arrangements and joint management contracts, and enforcement of rules and penalties. It is expected that this legislative framework will create the grounds for policy reforms in the sector that will improve efficiency 127 of revenues, broaden the revenue base, introduce more market-based pricing, and the like. The revised Forests Act provides the enabling legislative framework to implement the Forest Policy. Thus, some of the key measures and outcomes deriving from the Forests Act and Forest Policy related to forest revenues are summarized below: • Management plans provided by the Forests Act 2005 will be prepared and adhered to in forest management. Good forest management advocated by the act compares well with the efficient management option described in the forestry master plan. • Implementation of the Forests Act will outlaw the harvesting ban from plantations and efficient assessment and royalty collection methods will be put in place. • Management costs will be offset from accrued revenues to compensate those participating in plantation establishment and maintenance. • Concessions are recommended as way of private sector and community involvement in forest management but will not have an impact on the revenue flows for the standing crops in the short term. Because of the high investments in standing crops, newcomers are expected to harvest under present arrangements where replacement costs are recovered by the investor and the balance shared proportionately to the cost of inputs. After harvesting the standing crops, the concession holder is expected to plant crops. It is not until the concession holder’s planted crops are ready for cutting that new revenue arrangements will be devised. • There will be new revenue sources from indigenous forests, such as payment for environmental services with the possibility of adopting the user-pay principle with regard to water catchment management. This is well articulated in the new Forest Policy. • Royalty adjustments will be implemented gradually in the first five years to reflect the product’s true market value. • Export and import duties will not have an impact on KFS incomes because the duties are administered by the Ministry of Trade. Table A7.3 illustrates projected revenues over the period 2007–8 through 2014–5. It is important to note that this is a “best case� scenario based on several assumptions, including a well-organized and timely transition of the FD to the KFS, the adjustment of royalty rates, the successful tapping of new revenue sources, and the following through of key policy measures addressing leakages in the present revenue system. 27 Under this scenario, projected revenues are estimated to account for K Sh 1.6 billion in 2007–8 and increase by 173 percent to K Sh 4.3 billion in 2014-5. At present, revenue collection is at K Sh 501 million (April 2005–6), thus it is envisioned that revenues under the new KFS will increase by a factor of three in 2007. This sharp increase in revenue collections is related to improved revenue collection from existing sources and the establishment of new revenue sources. 3.2.1 Strengthening of current revenue sources The bulk of the revenues continue to stem from timber production, representing more than 80 percent of total revenues over the observed period 2007–8 through 2014–5. However, compared to the current revenue composition, strengthening revenue collection for all major 27. Assumptions for the revenue projections are summarized in annex A7.3. 128 forest products and tapping new revenue sources allow the KFS to depend less heavily on royalties from timber. • Under the new Forests Act, royalty revenues from timber production are expected to increase significantly (K Sh 1.3 billion) as compared with the current revenue level (around K Sh 509 million). This is mainly related to outlawing the harvesting ban. • The collection of revenues from fuelwood and poles is also estimated to rise drastically (K Sh 104 million) in the first year under the Forests Act. This is high compared to the 2004–5 level of K Sh 13.6 million and will benefit from forest operations such as thinning and running that are currently not being done. • Initially nonwood products were priced low to allow local communities to afford them. This subsidy has dampened pricing of adjacent farm forest products. • Forest concessions for both private and community members will be granted in 2007. At first, the area under concession will be small (about a total 100,000 ha for both indigenous and plantation forests) but will increase over time. The initial price is set at K Sh 50 per ha to encourage investors. • Licenses and permits will also form a major revenue source although this could decrease as more areas are taken by concessions. Other nonwood forest products will constitute a significant source of revenue expected to increase with time. 3.2.2 New revenue sources The revenue projections also include several new revenue sources that amount to K Sh 108 million or 7 percent of total revenues in 2006. The new sources comprise the following: • Legalized charcoal production. Until now, charcoal production took place in spite of a blanket ban. This illegal status drove production underground, contributing to corruption, marginalization of producers, and little or no resources being put into replanting and agroforestry. • Sale of bamboo. Currently, there is a ban on exploitation of bamboo, although a large quantity is going to a waste after maturity. The KFS is expected to come up with proper management and extraction practices for the existing bamboo forests. With controlled harvesting of the already mature bamboo forests, the KFS is expected to meet the demand from the horticulture industry with products estimated at K Sh 10 million, an amount expected to increase with time. • Environmental services. Such services could be captured by water catchment fees. These could attract a minimum K Sh 30/ha from electricity generating companies initially, increasing to about K Sh 40 in five years. This fee could be charged on the existing catchment areas of 900,000 ha. • Professional services. The KFS is expected to start offering professional services for a fee to communities and private sector entities involved in forest management. • Carbon sink funds. Improving biomass through reforestation of degraded areas will permit the forests to attract carbon sinks funds at the rate of US$4/ha. To attract this money, a baseline study needs to be carried out to confirm which areas will be included under the carbon funds arrangement. At first, 50,000 ha could easily be considered, increasing to 250,000 ha in the first five years, because this is the area of degraded forests. With the exception of revenues acquired from charcoal regulation, the contribution of the new revenue sources to total revenue collection under this best case scenario is modest, amounting to 8 percent of total revenue collection in 2014–5. 129 Table A7.3 Revenue Projections for the Kenya Forest Service 2007–8 through 2014–5 (K Sh) Revenue Source 2007–8 2008–9 2009–10 2010–1 2011–2 2012–3 2013–4 2014–5 a Timber plantations 1,266,000,000 1,557,180,000 1,993,190,400 2,391,828,480 2,631,011,328 2,894,112,461 3,183,523,707 3,501,876,078 Fuelwood and poles 104,400,000 123,192,000 145,366,560 171,532,541 202,408,398 232,769,658 267,685,107 307,837,873 Other products, nontimber, and seedlings 75,000,000 81,000,000 87,480,000 94,478,400 102,036,672 106,118,139 110,362,864 114,777,379 Licenses, rents, and permits 18,020,000 18,380,400 18,748,008 19,122,968 19,505,428 19,895,536 20,293,447 20,699,316 Sale from bamboo 10,000,000 11,000,000 12,100,000 13,310,000 14,641,000 16,105,100 17,715,610 19,487,171 Regulation of charcoal b industry 50,000,000 62,500,000 78,125,000 97,656,250 122,070,313 152,587,891 190,734,863 238,418,579 Professional services 7,000,000 7,210,000 7,426,300 7,649,089 7,878,562 8,114,919 8,358,366 8,609,117 Environmental services 41,000,000 45,100,000 49,610,000 54,571,000 60,028,100 66,030,910 72,634,001 79,897,401 TOTAL 1,571,420,000 1,905,562,400 2,392,046,268 2,850,148,728 3,159,579,800 3,495,734,613 3,871,307,965 4,291,602,913 Source: FD and FRR. Note: a. Timber revenue projections are based on the following assumptions: planting of all planned areas, setting the prices to market level from current K Sh 1,400 to K Sh 1,800, and improving the volume assessment. b. This is a new revenue source from a product that was not recognized before but done illegally. To regulate production, the service will charge a fee. 130 SECTION 4. FOREST EXPENDITURES 4.1 The Present Public Expenditure System 4.1.1 Financing of the forestry sector Many organizations provide services to the forest sector. They are spread across the government, nongovernment, and private commercial sectors (see appendix 4 – Governance and Institutional Assessment for more information). The following financing analysis focuses on the key ministry, the MENR; some of the main public agencies (the FD, the Kenya Wildlife Service [KWS], the Kenya Forestry Research Institute [KEFRI], and the National Environmental Management Authority [NEMA]), and the financial assistance provided by development partners. Financing of the MENR The MENR is the key ministry in charge of policy formulation for the environment, mining, and the forestry sector as well as for environmental conservation and research.28 In 2005–6 the ministry received K Sh 3.1 billion, accounting for 1 percent of the total national budget (see table A7.4).29 Within the ministry, more than half of its budget (about 47 percent in 2005–6) is allocated to the FD, the main policy maker and implementation agency of the forest sector. Budgetary allocations to the other two main agencies providing services in the sector, KEFRI and NEMA, amounted for both to around 15 percent of the total MENR budget in 2005–6. A7.4 MENR Budget: Budgetary Allocations by Subdivision, 2004–5 and 2005–6 (K Sh million) 2004–5 2005–6 Recurrent Development Recurrent Development Total expenditure expenditure Total expenditure expenditure Nominal growth Share of the budget Share of the budget rate General administration and planning 362.4 9.3 20.9 394.4 9.1 27.1 8.8 Forest development Kenya Forestry Research Institute and NEMA 415.5 16.6 7.5 515.0 17.4 12.6 23.9 Forest Department 1,411.1 52.4 36.4 1,470.4 53.2 21.1 4.2 Total forest development 1,826.5 69.0 43.9 1,985.4 70.6 33.6 8.7 Mineral development 107.9 2.5 7.0 168.2 4.4 9.6 55.9 Department of Resources Survey and Remote Sensing 294.0 4.3 25.9 132.2 3.7 6.6 -55.0 Environmental management and protection 341.9 15.1 2.3 449.8 12.3 23.1 31.6 Total 2,932.8 100.0 100.0 3,130.1 100.0 100.0 6.7 28. The Ministry of Environment and Natural Resources is charged with responsibility for environmental policy, environmental impact assessments and coordination, development of forests, reafforestation and agroforestry, catchment area conservation, mineral exploitation and mining, geological surveys, permanent Presidential Commission on soil conservation and afforestation, Kenya Forestry Research Institute, resource surveys, and remote sensing. 29. See table A7.1.2 in annex A7.1 to this appendix. 131 Source: Government of Kenya Budget 2004–5, 2005–6. Financing of agencies involved in the forest sector The FD, the KWS, KEFRI, and NEMA are key agencies responsible for regulation, monitoring, revenue collection, law enforcement, and research but have a combined budget of only 1 percent of the total national budget in 2003–4 (see table A7.5). It is difficult to compare the level of Kenya’s budgetary allocations with other African countries due to limited data availability. However, the sector’s contribution to socioeconomic development and growth, as well as the adverse impact of deforestation and depleted forest resources, provides some argument for the need for effective and efficient agencies adequately equipped with resources to fulfill their mandates to ensure sustainable management and use of Kenya’s natural resources.30 Table A7.5 Budgetary Allocations to Forestry Agencies and Institutions (K Sh million) Agency or institution 1999–2000 2000–1 2001–2 2002–3 2003–4 FD 734.4 888.9 955.0 997.7 1,315.5 KWS 561.0 360.0 403.0 512.0 724.0 KEFRI 253.0 266.0 344.0 352.0 371.0 NEMA 0.0 0.0 0.0 217.0 263.0 Total 1,548.4 1,514.9 1,702.0 2,078.7 2,673.5 Forestry agencies (share of government budget in %) 1.2 0.9 1.0 1.1 1.0 Memo Total government budget 124,400.0 169,814.0 172,564.0 184,835.0 258,236.0 Source: World Bank Public Expenditure Review 2004; FD. While the FD, KEFRI, and NEMA are under the aegis of the MENR, the KWS is financed by the Ministry of Tourism and Wildlife. KEFRI, NEMA, and the KWS are parastatals, a legal status the FD will obtain with its transformation to the KFS. Contrary to the FD, the KWS has been able to retain its revenues and managed to cover around 62 percent of its expenditures over the period2001–5.31 With the exception of 2002, revenues have steadily increased over the period 2002–5 (see figure A7.3). The KWS largely depends on tourism revenues generated at parks and national reserves. Though the service continues to depend mainly on government funding (amounting to around 30 percent of its budget) and to some extent on donor assistance (around 6 percent of its budget in 2005), it achieved a small budget surplus in the same year. This can be attributed to successful efforts in strengthening revenue collection and indicates a step toward becoming financially self-sustaining.32 30. The value of forest products is K Sh 2.0 billion per year, which is equal to about 10 percent of the country’s agriculturel GDP (KEFRI 1999). 31. See table A7.1.3 in annex A7.1 to this appendix. 32. The KWS was created as a parastatal in 1990 from the former government Department of Wildlife Conservation and Management, which had been suffering problems of limited resources, rundown infrastructure, overstaffing, low pay, and demoralized staff, leading to poor management and rapid deterioration of the wildlife resource. Since then, the KWS developed into a highly motivated and energetic organization bringing large-scale poaching under control and initiating activities in many new fields such as community wildlife management and marketing. It has attracted large amounts of donor funding, recruited new senior staff, and improved salaries and condition of services while streamlining its manpower at lower salary levels (Wass 1995). 132 Figure A7.3 Nominal Growth Rate of KWS Income and Expenditure, 2002–5 (percent) 35 30 25 20 15 10 5 0 -5 2002 2003 2004 2005 -10 -15 -20 Total Income Expenditure Source: KWS Annual Report 2005. The budget of the Forest Department As shown in table A7.6, the FD33 depends heavily on government resources. While it generates substantial revenues through plantation royalties and fees, it retains only a small share of its collected revenues (see earlier section on FD revenues). Budgetary allocations from the consolidated fund accounted for 92 percent, while miscellaneous revenues represented only 1.6 percent of the total FD budget in 2005–6. Donor assistance is also not significant (accounting for 7 percent of the budget in 2005–6) with donors only in recent years showing a renewed interest in providing aid to the sector (see later section on donor assistance). The budget performance of the FD is in line with the national average. The budget execution rate of the FD was on average 97 percent over the observed period 2002– 3 to 2004–5. Table A7.6, however, also indicates that the FD faced difficulties in executing its allocated resources under the AIA, reaching an execution rate of less than 60 percent in 2002–3. Owing to limited data availability, it is difficult to draw any conclusions from this. 33. The FD, established in 1901, is structured in three major division under a Deputy Chief Conservator of Forests (CCF), covering Planning and Development, Management and Conservation, and Forest Extension and Planning. It also has a forestry college for technical training. 133 Table A7.6 The FD: Budgetary Allocations and Actual Spending, 2002–3 to 2005–6 (K Sh million) 2002–3 2003–4 2004–5 2005–6 Execu Execu Execu Budget tion Budget tion Budget tion allocatio rate allocatio rate allocatio rate Budget n Actual (%) n Actual (%) n Actual (%) allocation 1,035. 1,157. 1,320. Total 997.7 0 103.7 1,315.5 4 88.0 1,333.4 9 99.1 1,529.7 Funding source Consolid- 1,021. 1,093. 1,200. ated fund 974.9 3 104.8 1,214.8 4 90.0 1,174.5 4 102.2 1,402.0 AIA 22.8 13.6 59.7 20.7 0.0 n.a. 25.8 n.a. n.a. 22.8 Donors 0.0 0.0 n.a. 80.0 64.0 80.0 133.1 120.5 90.5 104.9 Source: FD. Note: AIA = Appropriations in Aid; n.a. = Not applicable. The FD has only limited funds to conduct investment programs, as illustrated by its small budget for development expenditures relative to needs (see table A7.7). Recurrent expenditures accounted, on average, for 86 percent of the total FD budget compared to the investment budget, coming to on average 14 percent over the years 2002–3 through 2005–6. A large share of the operations and maintenance budget is allocated to the districts (around 90 percent in 2004–5) to finance district offices and various training, plantation, and conservation programs.34,35 The FD reports that financing of the districts (nonsalary recurrent and development expenditures) has been at times unpredictable and inadequate for the 72 district offices—the transfer of the operations and maintenance budget from the FD to the districts is cumbersome and district treasuries have limited cash availability. Table A7.7 The FD: Recurrent and Investment Spending Pattern, 2002–3 to 2005–6 2002–3 2003–4 2004–5 2005–6 (approved estimates) (approved estimates) (approved estimates) (approved estimates) Share of Share of Share of Share of K Sh total budget K Sh total budget K Sh total budget K Sh total budget billions (%) billions (%) billions (%) billions (%) Total 0.998 100.0 1.315 100.0 1.333 100.0 1.530 100.0 Recurrent 0.947 94.9 1.075 81.8 1.077 80.8 1.343 87.8 Salaries 0.419 42.0 0.705 53.6 0.717 53.7 0.907 59.3 Operations and maintenance 0.528 52.9 0.370 28.1 0.360 27.0 0.436 28.5 Development 0.051 5.1 0.240 18.2 0.256 19.2 0.187 12.2 Domestic 0.051 5.1 0.160 12.2 0.123 9.2 0.082 5.4 External 0.000 0.0 0.080 6.1 0.133 10.0 0.105 6.9 Source: FD. 34. The country is divided into eight provinces, each with a Provincial Officer, under whom fall District Forest Officers and Assistant District Forest Officers. District Forest Officers are responsible for all forestry matters in their districts (plantations, indigenous forests, and extension work). Under them are foresters in individual forests and divisional extension foresters in administrative divisions outside forests. Forest assistants and forest guards work under the foresters. 35. See table A7.1.4 in annex A7.1 to this appendix. 134 Moreover, findings provided by a 2002 study on collaborative and participatory forest management indicated that in some districts, staff salary costs take up between 87 and 98 percent of the office budget (Gibbon and Mbithi 2002). This means that for both forest protection and development work (plantation establishment and silvicultural operations) forestry staff have to depend on other organizational and community groups to contribute resources. 4.1.2 Donor assistance to the forestry sector Involvement of donors in the sector In the 1990s, the forestry sector was characterized by corruption and governance issues resulting in a withdrawal of donor assistance (see figure A7.4). The decline of donor funds led to stringent controls on spending, which further contributed to resource limitations at the district level. Such resource limitations led to declining communication, community work, and road infrastructure in the forest stations and district forest offices as well as inadequate equipment for District Forest Officers, foresters, and forest guards to patrol the forest (Gibbon and Mbithi 2002). However, following a change in government in 2002 and a strong political commitment to prepare a new forest bill, approved by Parliament in 2005, donors began to increase their support, beginning in 2003–4. Figure A7.4 Financing from Donor Aid, 1997–8 through 2005–6 160 140 120 100 80 60 40 20 0 -20 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 Source: FD; Gibbon and Mbithi 2002. The main donors providing aid to the FD’s budget are the US Agency for International Development, Japan International Cooperation Agency, the World Bank, the Food and Agriculture Organization (FAO), and the African Development Bank (AfDB). Other donors supporting pilot activities include the UN Development Programme and the World Conservation Union. These activities are implemented through the FD budget. The decline in donor assistance in 2005–6 is mainly due to the completion of the two-year forest conservation program in Ngare Ndare forests, financed by the Belgian government. New donor aid provided by the AfDB and the FAO could not match the previous funding level. On the whole, donor assistance finances part of the implementation of the FD’s reform agenda by creating the institutional and policy environment needed to allow effective operationalization of the Forests Act (see also the later section on financing the FD’s short- term reform agenda). Performance of donor aid Donor aid has significantly contributed to financing the FD development budget over the past three years, reaching more than 50 percent in 2005–6. It is notable, however, that most of the donor aid comes to usually less than euro 5 million (US$3.9 million). (The general 135 understanding among donors is that requirements for natural resources conservation in Kenya are huge.) Moreover, domestic resources have decreased over the same period from K Sh 160 million in 2003–4 to K Sh 81.8 million in 2005–6, suggesting a partial crowding out of government resources for financing development expenditures. Overall government financing increased, but mainly to benefit recurrent expenditures (in particular, salaries). Although the trend of government pulling out of the development budget is worrisome, it will be most critical to ensure that recurrent needs of the donor-funded development projects will be financed in the future. 136 Figure A7.5 Execution Rate of Donor Assistance 100.0 90.5 80.0 80.0 60.0 40.0 22.6 20.0 0.0 2003/04 2004/05 2005/06 Source: FD. The performance of donor assistance was sufficient in the first two years since donors reentered the sector, with execution rates of 80 percent and 90 percent 2003–4 and 2004–5, respectively (see figure A7.5).36 However, delays in the release of funds for the AfDB project (the AfDB project was only approved late in the 2005/06 fiscal year and included in the supplementary budget in April 2006) and the USAID program led to the low execution rate of 23 percent. The AfDB seeks to provide additional funding of K Sh 560 million in 2006–7.37 While this would increase donor aid by more than five times in 2006–7, it raises questions about the FD’s absorption capacity for the increased aid. 36. See also table A7.1.5 in annex A7.1 to this appendix. 37. The AfDB is financing a Green Support Development Project that will be implemented over a six-year period beginning January 2006 and comprising a total project cost of UA 31.51 million. (One AfDB UA (Unit of Account) is approximately US$1.49 as of May 2006.) Coordination and implementation of the project will be undertaken by the Ministry of Agriculture (through the Nyayo Tea Zones Development Corporation), in consultation with the MENR (through the FD). The project consists of four components: (i) Natural Resources Forest Conservation with three subcomponents (natural forest rehabilitation, participatory natural forest management, and restoration of county council hilltops and watersheds); (ii) Buffer Belt Watershed Management, with three subcomponents (restoration of natural forest in environmentally sensitive areas, establishment of fuelwood plantations, and consolidation of tea buffer belts); (iii) support to Forest-Adjacent communities, with three subcomponents (woodlot establishment, agroforestry promotion, and household livelihoods and income enhancement); and (iv) project coordination and management (African Development Fund, Republic of Kenya Green zones development support project appraisal report, 2005). 137 4.1.3 Public finance management issues The disconnect between the approved budget and actual spending The FD reported that policy changes (for example, in response to disaster relief and other disasters) during budget execution in the past years have resulted in budget cuts for the FD As mentioned above, there are severe problems with cash releases at the district level. District treasuries frequently face problems with cash availability; this is partly related to delays in revenue collection and partly to cumbersome transfer procedures. As a result, cash releases to the districts are uncertain and often concentrated in the end of the fiscal year. (The disbursement of cash to district accounts is currently the responsibility of one unit at the treasury for all ministries, which is an overwhelming exercise. There are new arrangements to decentralize the issuance of AIA and disbursements of cash to the districts by the respective ministries and not treasury beginning fiscal year 2006–7. This would ease the process. Complex disbursement procedures by donors (see below) or cumbersome government procurement processes have contributed to delays in project implementation and, thus, spending. Absence of useful strategic document The FD prepares various documents, including its five-year strategic plan, the three-year medium term expenditure framework (MTEF), and an annual work plan. The preparation process for these documents, in particular at the district level, is often not well understood, contributing to a misalignment between the sector plans and the budget. Most of these plans are also not well harmonized, and are disconnected from budget reality. The MTEF is not integrated in the annual budget preparation process and remains a separate budget preparation process. The strategic plan has been recently revised but seems to be already outdated for the 2006-7 budget. Budget monitoring is incomplete The department prepares monthly, semi-annual, and annual disbursement reports. However, there is no mechanism in place to effectively monitor during the year or even to audit on an annual basis the physical realization of budget implementation in line with the agreed performance contract at the district level There is a requirement for monitoring budget implementation and several arrangements have been made. This includes a monitoring department in the Ministry of Planning, sector and subsector committees, and an ad hoc committee (with representatives from the private sector) on evaluation of performance contract implementation. However, this requirement is not honored at the local authority level.38 The government is in the process of institutionalizing a national monitoring and evaluation framework Limited public finance management capacity at the FD The capacity at the FD to prepare, implement, and monitor its budget is constrained both by numbers and skills, compounded by various factors: The Finance subdepartment is understaffed. Forest officers at the district level often lack training and are overwhelmed by the budget exercise, resulting in low transparency and accountability of funds, particularly at the district level. 38. According to the 2004 public expenditure review, the majority of local authorities have not been preparing accounts as set out in the relevant local government legislation (GOK 2004). 138 The government’s 2005 mapping of budgetary operations to new functional classifications in line with the Government Finance Statistics took place with inadequate (or no) training of the FD staff. As a result, budget planning under the new system in the first years was deficient and led to significant reallocations during fiscal year 2005–6.Tthe FD seems to be slowly reaping the benefits of the MTEF process but not the new classification system. The government established Sectoral Working Groups (SWG) in 2001 to assist the line ministries with MTEF preparation and budget implementation. Despite some fruitful discussions and assistance by the Agricultural and Rural Development SWG (of which the MENR is a member) in the past, the FD pointed out that recent interaction has been limited to a perfunctory annual meeting on budget planning but there is no systematic interface with the SWG, for example, for assistance with development plans and strategies and their costing. Donor assistance In the past, donor aid performance was hindered by various factors: (i) the limited country knowledge inherent in donor procurement and disbursement procedures; (ii) difficulties in tracking disbursement, particularly for direct payments made under grant funding; (iii) long delays in resolving audit issues; (iv) delays in changing from direct payment (directly financed by the donor) to grant revenue (under which the government needs to advance public resources for programs and the donor subsequently reimburses); and (v) inadequate counterpart funding. The government has tried hard to remove most of these constraints; for example, loan projects do not have to go to Parliament for ratification anymore and project units are empowered to open accounts in commercial banks. Furthermore, donor consultative meetings and forums have been created and negotiations are more decentralized, including the direct involvement of the FD in signing loan and grant agreements in some cases. Staffing The FD was affected by the civil service retrenchment program initiated as a result of World Bank pressure in the mid-1990s. This led to severe staff reductions at the lower levels and especially affected the plantation and forestry extension sections between 1992–3 and 2000–1 (see table A7.8). However, the staff level increased again over the past years, despite efforts at early retirement programs. The FD reported employing about 7,000 staff for 2005–6. Table A7.8 Staffing of the Forest Department,1992–3 and 2000–1 Responsibility Level 1992–3 2000–1 Headquarters 279 172 Regional office, Nairobi 12 6 Regional office, Central 18 15 Regional office, Coast 11 9 Regional office, Eastern 14 10 Regional office, North Eastern 5 4 Regional office, Rift Valley 25 14 Regional office, Western 14 11 Regional office, Nyanza 13 9 District offices 1,505 927 Forest stations 8,096 4,216 Extension foresters 254 131 Total 10,246 5,524 Sources: FD; Gibbon and Mbithi 2002. 139 4.2 Impact of the New Forests Act on Forest Expenditures Implementation of the Forests Act 2005 is expected to set off reforms within the forest sector, in particular institutional reforms at the current FD, such as its transformation into a semiautonomous KFS. Some of the main problems the FD has been facing that need to be addressed include follow: • Low budget allocations causing constraints in realization of the FD’s full output potential. Budgetary allocations account for 0.5 percent of government expenditures in 2005–6, which is relatively small. • Constraints in implementing donor aid. • Inadequate policy, legal, and institutional framework. • Very low levels of community participation in natural resource management. • Low forestry investments and private sector participation. • Inadequate information on natural resources. • Disincentives, such as taxes on advanced forest technologies and political interference. The main goals of the forest sector reforms are to raise efficiency, ensure sustainability, and increase equity through poverty reduction. Interventions to achieve these goals call for radical changes in critical areas, such as efforts to increase the low returns from forest investments, and would require a substantial share of public resources. The financing needs of the sector can be categorized into three groups: (i) the funding of forest sector reforms affecting the whole sector; (ii) the financing of reforms related to the KFS (including reorganization and development of the service); and (3) the financing of specific forest sector development programs undertaken by the KFS. Forest sector reforms While the current FD concentrates its efforts on working with government employees within the gazetted forest areas, the KFS is expected to go beyond the gazetted forest boundaries into the privately owned forests and, at the same time, to work with communities and the private sector in the management of government forests. Reforms are necessary to enable the private sector and communities to participate in the new forestry dispensation created by the Forests Act 2005. Forest officers are expected to be appreciative of their new roles and those to be performed by the communities and private sector in the management of forests in and outside government areas. A demographic survey in the Kenya Forestry Master Plan estimated that 2,900,000 people were living adjacent to the forests, while 14,000 people were employed in forest industries in 1994. With population increasing at an annual rate of about 3 percent, the numbers translate to about 3.8 million forest-adjacent people who will require capacity building to prepare them for the new forestry management opportunities. Such capacity building would include providing them with an understanding of the value attached to the forests and to forest and tree management. The beneficiary population needs to be organized in associations to enable them to realize optimal benefits under the new arrangements. This is expected to cost the KFS about K Sh 4.064 billion in the first five years with the first and the second year taking 37 percent as a result of the large lay off of subordinate staff, while the rest is distributed in the other years. 140 Kenya Forest Service The KFS is the core of the transformation process targeted at the current FD. This transformation entails (i) corporate reforms (administration and coordination), (ii) institutional organization, and (iii) forestry development. The KFS will undertake the role of administration and coordination of all players in the forest sector. To carry out this role effectively, the following tasks are seen as important: • Change of working attitude (professional ethics) and approaches by FD staff to manage forests as commercial enterprises that are economically beneficial to Kenyan society. • Reduction of subordinate staff. The 2005–6 labor force in the FD consists of 7,000 people; about 140 at the professional level, 800 at the technical level, 2,600 forest guards, and 3,500 workers or subordinate staff. A reduction to this large number of subordinate staff was recommended by the World Bank study on revenue assessment and royalty collection in 1992. The 2002 Civil Service voluntary retirement program did not achieve the desired labor force reduction targets, deemed necessary because most of the plantation operations will be performed by the private sector or contract management. The target of eliminating 1,200 subordinate staff is, however, likely to be reached soon as more people opt for early retirement. • Retraining of forest guards to enable them to make prudent forest management decisions and contribute to participatory forest management. This is already being carried out in the Londiani Forest College. It is envisaged that community involvement will reduce surveillance costs and allow forest guard services to be directed toward forest management. • Increase professional staff by 150 percent to achieve impact on good forestry management decisions and practices. • Development strategies to accommodate the increased responsibilities for forest management and regulation outside the gazetted forest areas. • Involvement of communities and the private sector in the management of the forests. The private sector will be involved in plantation management while communities will be involved largely through participatory forest management. At present, the organization of the FD is based on administrative boundaries as opposed to the proposed conservancy areas defined by ecosystem values and boundaries, forest investments, climatic, and cultural considerations to rationalize resource management. Forest sector development programs There are four identified core programs to effect forest management (see also table A7.9): Natural Forests Program, Industrial Forests Program, Farm Forestry Program and Dry Land Forest Program. 141 Table A7.9 Categories of Financing Needs Under New Forests Act Reform target area Actions to be carried out 1. Forest sector reforms Reforms to community and private sector participation • Improvement of forest industries capacity via training • Commercialization of forestry business • Subsidiary legislation Capacity building and needs assessment • Carry out surveys and studies to establish capacity-building needs • Capacity building among the 3.8 million community members through workshops, meetings, publications, and media • Creation of community associations 2. Kenya Forest Service Organization and administrative reforms reforms • Institutional analysis, service charter, and personnel placements • Creation of conservancies • Rationalization of human resources (staff remuneration, lay off compensation) • Logistical requirements Resource assessment and studies • Resource assessment to establish baseline data for the existing forests • Workforce surveys of the existing staff Capacity building • Training sessions and other meetings • Purchase of basic materials and equipment 3. Forest sector • Natural Forests Program (conserving indigenous forests) development programs • Industrial Forests Program (production from industrial forests) • Farm Forestry Program (promote production of forest products from farms, increase forest areas outside the government-protected forests) • Dry Land Forest Program (promote production of forest products from dry land vegetation by communities) Source: FRR. 4.2.1 Forecasting of forest expenditures Table A7.10 shows the projected expenditures in the KFS budget over the period 2006–7 through 2012–3. To summarize, it is expected that the financing of the reforms will increase the KFS budget by 131 percent from K Sh 1,529.7 billion in 2005–6 to K Sh 3,536.4 billion in 2006–7. With the successful implementation of the reform agenda it is expected the budget will decline to K Sh 3,042 billion in 2014–5. Most of the KFS budget is projected to support the KFS reforms and the Forest Sector Development Programs, amounting to 48 and 42 percent of the total KFS budget in 2006–7 while the forest sector reforms will account for around 12 percent of the budget. Financing of forest sector reforms The forest sector reforms will be carried out in the eight conservancies and will involve the communities and the private sector. This will include studies and surveys to establish the mode of intervention required in each locality. As illustrated in table A7.10, this exercise is estimated to cost K Sh 115 million in the first year (about K Sh 14 million per conservancy), equivalent to about 12.5 percent of the budget, and will take eight years to complete because funds to cover more per year are not available. This budget item is expected to grow at an annual rate of 3 percent. To identify capacity-building needs and priority areas to 142 be covered, it is envisaged that workshops and public meetings will be carried out, some industries will be revived, associations will be formed, and subsidiary legislation will be drafted. 143 Table A7.10 The Kenya Forest Service Budget 2007–8 2008–9 2009–10 2010–1 2011–2 2012–3 2013–4 2014–5 1. Forest Sector Reforms to involve community and private sector 115,000,000 118,450,000 122,003,500 125,663,605 129,433,513 133,316,519 137,316,014 141,435,495 Capacity building and needs assessment 300,000,000 309,000,000 318,270,000 327,818,100 337,652,643 347,782,222 358,215,689 368,962,160 Subtotal 415,000,000 427,450,000 440,273,500 453,481,705 467,086,156 481,098,741 495,531,703 510,397,654 2. KFS Reforms Organization and admin reforms (salaries) 1,177,359,000 1,177,359,000 555,000,000 550,000,000 605,000,000 665,500,000 732,050,000 805,255,000 Resource assessment and studies 175,000,000 227,500,000 192,500,000 157,500,000 157,500,000 204,750,000 173,250,000 141,750,000 Capacity building 300,000,000 390,000,000 330,000,000 270,000,000 270,000,000 351,000,000 297,000,000 243,000,000 Subtotal 1,652,359,000 1,794,859,000 1,077,500,000 977,500,000 1,032,500,000 1,221,250,000 1,202,300,000 1,190,005,000 3 a. Forest Development - Natural Forests Program Management 234,260,000 257,686,000 283,454,600 311,800,060 342980066 377278073 415005880 456506468 Development – Infrastructure 200,000,000 210,000,000 180,000,000 180,000,000 150,000,000 150,000,000 150,000,000 150,000,000 3b. Forest Development - Industrial Forests Program Management 174,750,000 192,225,000 211,447,500 232,592,250 255,851,475 281,436,623 309,580,285 340,538,313 Development 340,000,000 240,000,000 120,000,000 120,000,000 100,000,000 100,000,000 100,000,000 100,000,000 3c. Forest Development - Farm Forestry Program Management and capacity building 120,000,000 168,000,000 184,800,000 166,320,000 133,056,000 106,444,800 85,155,840 68,124,672 Development 100,000,000 140,000,000 154,000,000 138,600,000 110,880,000 88,704,000 70,963,200 56,770,560 3d. Forest Development – Dry Land Forest Program Management and capacity building 200,000,000 280,000,000 308,000,000 277,200,000 221,760,000 177,408,000 141,926,400 113,541,120 Development 100,000,000 140,000,000 154,000,000 138,600,000 110,880,000 88,704,000 70,963,200 56,770,560 Subtotal 1,469,010,000 1,627,911,000 1,595,702,100 1,565,112,310 1,425,407,541 1,369,975,495 1,343,594,805 1,342,251,693 Grand total expenditures 3,536,369,000 3,850,220,000 3,113,475,600 2,996,094,015 2,924,993,697 3,072,324,236 3,041,426,508 3,042,654,347 Source: FRR and Forest Department records. 144 Note: The net present value forestry expenditure calculations are in annex A7.4 to this appendix. 145 Financing of the KFS The FD is in the midst of being reformed into the KFS, which requires an institutional analysis followed by organizational reforms, resource assessments, and capacity building. The assumption that these tasks will be accomplished in the first year is very ambitious and not likely to be achieved. It is assumed that 25 percent of the work can be done per year. Studies, surveys, and resource assessments to strengthen KFS capacity are expected to be completed in the first four years. Layoffs of about 1,200 excess subordinate staff will be carried out in the first two years and will absorb 30 percent of the total KFS budget (see table A7.10 ). Forest development programs The Forest development programs are part of the current FD budget. It is expected that the programs will be strengthened under the Forest Acts 2005: • The Natural Forests Program in indigenous forests. Under the Forests Act 2005, the financing of the National Forests Program would amount to K Sh 434 million in the first year. (For comparison, actual spending on the program was K Sh 231 million in 2004–5.)39 The bulk of the expenditures under this program are planned to benefit forest management, including protection, planning to diversify revenue sources, and tree planting in the degraded areas. (This cannot be carried out in one year but all forest rehabilitation is estimated to be completed in the eight years.) The other component, development infrastructure (K Sh 200 million in 2007–8), is projected to increase by 5 percent in the second year but drop to K Sh 180 million in the third year, when community participation is expected to be fully implemented and absorb some of the management costs. The costs comprise small-scale road rehabilitation, fire protection, and ecotourism development. • The Industrial Forests Program. Industrial forests have been given most of the FD’s attention because they were and will remain the main revenue earners. They are found in four out of the eight conservancies, with main management activities comprising clearing backlogs in reforestation, plantation establishment, and management; writing management plans; and capacity building in revenue collection. The program is expected to amount to K Sh 515 million in 2007–8 with K Sh 175 million for forest management and K Sh 340 million for development because of the high cost of rehabilitating forest road networks, tree nurseries, and buildings. In contrast, the FD spent K Sh 307 million on the program in 2004–5.40 The cost for this program is expected to increase over time because management costs will increase proportionately to the areas rehabilitated. • The Farm Forestry Program. The Kenya Forestry Master Plan recognized that within fixed forest areas increases in wood production for the growing population would only be sustained through the development of farm forestry. The KFS is expected to put more resources in this program (around K Sh 220 million in 2007–8) than in the past (around K Sh 216 million in 2004–5) to increase wood production to meet the wood demand of rural people. This will be done through capacity building of farmers in tree growing and protection. The development component will support investments such as community tree nurseries. The program will be carried out over eight years, starting with priority areas and tasks, increasing by 40 percent in the first three years and then declining in the subsequent years to K Sh 124 million in 2015–6. 39. See table A7.1.6 in annex A7.1 to this appendix. 40. See table A7.1.6 in annex A7.1 to this appendix. 146 • The Dry Land Forest Program. The dry land forestry is another area KFS will need to emphasize. These forests have untapped potential for charcoal production, gums and resins, and building timber for pastoral communities. The program is estimated to cost K Sh 200 million for management and capacity building and K Sh 100 million for development. This implies an increase of 200 percent if compared with the program’s actual spending of K Sh 23.2 million in 2004–5.41 Similar to the Farm Forestry Program, the budget of the Dry Land Forest Program is assumed to increase by 40 percent from the initial levels in the first 3 years, followed by a decline to K Sh 170 million in 2015–6. 4.2.2 Comparison of revenue and expenditure projections Comparing the revenue and expenditure flows over the eight-year period beginning 2006–7 (assuming the act will become effective in 2006–7), an upward increase in the revenue side and a decline in expenditures can be seen. Under the so-called best case scenario, with successful timely implementation of the reform agenda, the KFS is expected to be self- financing by the fifth year, at which time revenues will cover KFS expenditures (see figure A7.6). Figure A7.6 Kenya Forest Service Revenue and Expenditure Gap and Net Present Value NET PRESENT VALUE ANALYSIS 4000000000 3000000000 2000000000 1000000000 S IL IN S H L G REVENUE EXPENDITURES NPV 0 YEAR 1 Year 2 Year 3 Year 4 Year 5 YEAR 6 YEAR 7 YEAR 8 -1000000000 -2000000000 -3000000000 PERIOD IN YEARS Sources: FD and FRR. In the first four years, expenditures are higher than income because of heavy outlays required by the reforms. In the fifth year, the impact of the new Forests Act will result in higher revenues than expenditures. The risk to this is that all stakeholders expected to contribute to this outcome might not respond to the reforms as predicted, while the opportunity is that the KFS will be able attract more funds to finance operations. 41. See table A7.1.6 in annex A7.1 to this appendix. 147 4.3 Other Economic and Financial Impacts of the Forests Act The act will affect other sectors that might not contribute directly to KFS cash flow in the short run: • The act will affect environmental sustainability by increasing in tree cover as a result of incentives and appropriate pricing (biodiversity conservation, carbon sequestration, soil and water conservation). • Nonresident cultivation (the successor to the shamba system) will become a legal plantation establishment method that will contribute positively to national food security, employment, and other livelihood opportunities. • Desertification will be slowed following the increase in tree growing. particularly in the dry lands. SECTION 5. IMPACTS OF IMPLEMENTATION OF THE FORESTS ACT 2OO5 ON PLANTATION FOREST MANAGEMENT The Forests Act 2005 aims at allowing communities and the private sector to co-manage forests with the KFS. Newcomers will be involved in specific areas of the forest where their needs can be met along with environmental requirements. Plantation forest management could be compared under three possible scenarios: • Under FD management, minimal regeneration and management efforts were made because of inadequate funding and unmotivated staff • Under KFS management alone, staff are assumed motivated and adequate inputs available, similar to the good management practices option in the Kenya Forestry Master Plan. • Under a combination of KFS and private sector and community forest management, KFS would provide technical and supervisory inputs. 5.1 Forest Management Under the FD Forest management costs under the FD are costs that must be incurred in plantations that have not been cared for, that were managed by unmotivated staff, and that operated under the following conditions: • Forests are managed by the FD. • All collected revenues are taken to the treasury, which then allocates funds to the FD; the funds are usually lower than required. • Forests are characterized by backlogs of forest management operations, resulting in lower crop qualities and yield. • Delayed forest operations result in higher labor inputs than normally needed. • Administrative overhead is 22 percent of total costs, as calculated by the FD in 1998. • Labor costs are based on actual man days required in Hombe to complete one hectare of unattended plantation, as they characterize the plantation status. 148 • Other plantation costs are those associated with renting hand tools mostly at K Sh 5 per person per day. These hand tools are mainly implements such as jembes, pangas, hoes, and the like. • The cost per man day is assumed to be K Sh 205, which is the minimum agricultural government labor wage. Full cost analysis is in table A7.1.7 in annex A7.1. A summary is shown in table A7.11. The analysis indicates it costs the FD K Sh 103,857 to manage one ha to maturity using 2004 prices. Table A7.11 Forest Plantation Costs Summary Under Current Unmanaged State and Their Corresponding Labor Inputs Labor OPERATION costs Other costs Regeneration and site improvement 10,865 345 Stand establishment 23,985 580 Stand improvement 35,260 850 Forest protection 17,222 422 Administrative costs or overhead 11,281 1,128 TOTAL 98,613 3,325 Source: FRR 2007. Note: Base year is 2004. Assumptions in text are applied to labor inputs recommended by the FD. See table A7.1.7 for full analysis. Plantation benefits under this arrangement have been going entirely to the government because no other stakeholder had made any inputs to forest management. If the same arrangements continue after the implementation of the Forests Act, the distribution ratio would remain the same. 5.2 Forest Management Under Kenya Forest Service Forest management costs under the KFS are based on labor inputs in well-managed plantations equivalent to the FD rates observed in Hombe Forest station. • Forests are managed by the KFS under the new Forests Act. • Forest activities analyzed are those recommended by the FD to be carried out on plantation stands. • Forests are well-managed in a timely manner, so better crop qualities and increasing yield occur as was envisaged by the master plan. • Well-managed forests plantations call for relatively lower labor inputs compared with unattended plantations. • Administrative overhead costs used in this analysis are 22 percent of total costs, as calculated by the FD economics section in 1998. 149 • Labor costs are based on task rates recommended by the FD to complete one ha of timely attended plantation. See annex A7.3 on task rates. • Other plantation costs are those for renting hand tools mostly at K Sh 5 per person for one day use in Hombe area. These hand tools are mainly implements like jembes, pangas, hoes, and the like. • The cost per man day is assumed to be K Sh 205, which is the minimum agricultural government labor wage. The full cost analysis is in table A7.1.8 in annex A7.1. A summary is shown in table A7.12. Plantation management under KFS will cost K Sh 75,666 to raise one hectare to maturity using the 2004 prices. Table A7.12 Forest Plantation Silviculture Operations Costs Under KFS Management OPERATION Current labor costs Other costs Regeneration and site improvement 8,815 315 Stand establishment 14,555 395 Stand improvement 26,035 625 Forest protection 10,662 260 Administrative costs or overheads 11,281 1,128 TOTAL 71,348 4,318 Source: FRR 2007. Note: Base year is 2004. Assumptions in text are applied to labor inputs recommended by the FD. See table A7.1.8 for full analysis. Benefits from all forest areas managed under this arrangement, where partial production and management resources are supplied by the communities, will be shared between participating communities and the KFS. The ratio used will be based inputs, allowing communities to be rewarded for their inputs in management. 5.3 Forest Management Under Community and Private Sector Involvement The Forests Act 2005 provides that community groups and the private sector be allowed to manage government forests, even to take the lead. Assumptions under this management arrangement include the following: • The private sector or communities will take the lead in specific forest management areas and operations. • Private sector or community will be allowed in areas where it is evident they will manage the forest or plantation better than the KFS. • The KFS will provide technical labor inputs equal to 25 percent for all specialized operations while the community or the private sector will provide the bulk of labor inputs, assumed to be 75 percent. (These percentages are based on FD economics section administrative cost ratios from 1998.) 150 • In all other operations the KFS will be expected to take on the supervisory role to ensure good forestry is not compromised for benefit maximization. In these forests, the KFS could provide 7 percent labor equivalent while communities provide 93 percent of the inputs. (These percentages are based on FD economics section administrative cost ratios from 1998.) • The costs incurred under private sector or community operation with KFS supervision are assumed the same because both are purchasing inputs from the same market. • Because KFS is the provider of technical management guidelines, one can use KFS’ cost levels to analyze costs for the other two managing stakeholders (private sector and communities). (Note the first column contains KFS figures.) Table A7.13 Plantation Forest Management Under Community and Private Sector Involvement % input Labor costs Labor Costs Other from % input to costs to per ha costs community from KFS community KFS Labor cost per man day = K Sh 205 Regeneration and site improvement 8,815 315 75 25 6,848 2,283 Stand improvement 14,555 395 93 7 13,887 1,063 Stand establishment 26,035 625 92 8 24,425 2,235 Forest protection 10,662 260 93 7 10,157 765 Administrative costs or overhead 11,281 1,128 75 25 9,307 3,102 TOTAL 71,348 2,723 64,623 9,448 Source: FRR 2007. Note: Data are calculated from assumptions in text and FD recommended labor inputs for plantation operations. Benefits from areas where the community or the private sector takes the lead while the KFS provides technical inputs and supervision will be shared proportionately to inputs. According to the analysis in table A7.13, KFS’s proportion is 13 percent while communities and the private sector take 87 percent. This ratio is expected to change with time in favor of communities as they increase their input share as a result of receiving improved incomes. Currently they can only provide labor. These ratios do not include any fees or taxes based on the quantities of forest products removed, for which the KFS would charge. 5.4 Forest Management Under the Three Scenarios Analysis of the three scenarios suggests that the current FD management option is expensive. Cost per hectare decreases as the model shifts to management by the KFS under the Forests Act, with further reductions in costs when communities and the private sector are involved in plantation management. A management option that blends KFS and the community or the private sector is likely to be the most practical scenario given political, economic, and environmental considerations. Some areas will not be attractive to the private sector nor the communities because of the geographical location or environmental sensitivity of the area. Other areas will be unsuitable for foreign investors while communities cannot be expected to invest heavily in plantation management because they have no resources. 151 SECTION 6. IMPACTS OF IMPLEMENTATION OF THE FORESTS ACT 2OO5 ON MANAGEMENT OF INDIGENOUS FORESTS 6.1 Indigenous Forest Management by the KFS Management of indigenous forests, as analyzed in the four management phases, requires low outlays at the initial stages because only a small number of seedlings per ha are required for enrichment. The exact number depends on the level of degradation. For the purposes of this analysis, the site is assumed to be heavily degraded, requiring about 100 seedlings per ha, equivalent to 0.1 man day to raise and 0.5 man day to plant in the forest. See table A7.14. Forest protection accounts for the bulk of indigenous forest inputs, in the form of road maintenance, fire standby, and boundary cleaning, as seen in FD economic records. Table A7.14 Indigenous Forests Management Under the KFS Labor input (MD per Labor Other ha) costs costs REGENERATION AND SITE IMPROVEMENT Cost per man day (K Sh) 205 175 Seedling production (1,200 per ha) 0.100 20.500 8.0 STAND ESTABLISHMENT Enrichment planting 0.500 102.500 2.5 FOREST IMPROVEMENT Research and sample plot maintenance 0.010 2.050 10.0 FOREST PROTECTION External boundary maintenance (MD per kilometer) 0.200 41.000 1.0 Fire standby and fighting (average per ha) 0.015 3.075 1.0 Road (.005 kilometer per ha) 150.000 150.000 45.0 Patrols 0.010 2.050 2.0 TOTAL COST 321.175 69.5 TOTAL COST PER HA 390.675 Sources: FD and FRR. Note: MD = man day. Road costs are based on labor cost per kilometer of road. Indigenous forests will cost K Sh 390/ha to manage if all inputs come from the KFS. This implies that all benefits from such management arrangements should go to the KFS. 6.2 Indigenous Forest Management with Community or Private Sector Involvement Under the arrangement in which the community takes the lead, the following assumptions are used: 152 • The KFS will allow the community or the private sector to take the lead in managing these forests where they have an interest in doing so, but the KFS will continue with its regulatory and supervisory roles to ensure sound forest management is practiced. Under the same assumptions used for plantation forest management, this will constitute 93 percent inputs from communities or the private sector and 7 percent from the KFS for operations not requiring technical inputs, and 75 percent and 25 percent, respectively, for those requiring technical inputs from the KFS. • Other costs are the average costs of hiring hand tools and transport for each operation. • Benefit sharing will be based on input ratio. This does not include any fees or taxes the communities might pay on outputs. Table A7.15 Indigenous Forests Under Joint Community and KFS Management Labor input Labor Other Community (MD per ha) inputs costs inputs REGENERATION AND SITE IMPROVEMENT Cost per man day in K Sh 205 Seedling production (1,200 per ha) 0.100 20.500 8.0 27 STAND ESTABLISHMENT Enrichment planting 0.500 102.500 2.5 98 FOREST IMPROVEMENT Research and sample plot maintenance 0.010 2.050 10.0 11 FOREST PROTECTION External boundary maintenance (MD per kilometer) 0.200 41.000 1.0 32 Fire standby and fighting (average per ha) 0.015 3.075 1.0 4 Road (.005 kilometer per ha) 150.000 150.000 45.0 146 Patrols 0.010 2.050 2.0 3 TOTAL cost per ha 321.175 69.5 320 Sources: FD and FRR. Note: MD = man day. Road costs are based on labor cost per kilometer of road. Indigenous forest management will cost K Sh 390/ha. In an arrangement in which 18 percent of inputs come from the KFS and 82 percent from the community, benefit sharing should be based on the same ratio. SECTION 7. INCENTIVES GENERATED BY THE ACT TO PROMOTE SUSTAINABLE FOREST MANAGEMENT The act is aimed at providing an environment conducive to sustainable forestry through provision of incentives to stakeholders. This section summarizes these incentives. 153 The Kenya Forest Service • Retain revenue to finance forest operations; treasury receives any surplus • Can look for funds to finance investments or gaps • Reduced management costs as a result of community and private sector involvement in forest management • Higher efficiencies resulting in higher production and incomes • Forest conservation, the main aim of the Forests Act, will result in larger quantities of environmental goods, such as water, thus minimizing power rationing to industries. Community • Benefit sharing from forests, when introduced, will raise community income levels • Employment will be generated • Sustainable supply of forest products Private sector • Long-term commitment by government will allow companies to attract loans and investors, unlike current annual arrangements or licenses • Sustainable supplies of raw materials with added capability to adjust production level of forest products • High quality of raw materials Farm forestry • Prices of farm forest products will be subject to market forces, unlike the current controls imposed by government-subsidized products • Well-managed forests, which should result from the management plans, should yield high quality products and higher sales volumes Other incentives to communities and private sector brought about by the Forests Act • Tax waivers and rebates for well-managed forests • Tax incentives for the acquisition of forestry technologies • Access to forest credits SECTION 8. IMPACTS OF IMPLEMENTATION OF THE FORESTS ACT 2OO5 ON TRADE IN WOOD AND NONWOOD PRODUCTS Trade in wood and nonwood products under the current Forests Act is in the hands of the Ministry of Trade, leaving the FD responsibility for raw materials and semiprocessed goods production. The Forests Act 2005 might not drastically change this arrangement, although the Minister of Environment and Natural Resources has the legal mandate to regulate forest industries. It is assumed that the Forests Act 2005 will greatly affect the volume of products traded from all sources, through its influence on efficiency and sustainable materials production. The lack of forest certification marks on products has kept Kenyan wood producers from entering some world markets that give preference to certified products. Certification has been identified as a tool for the achievement of well-managed forests because it will encourage traders to consider the mode of production when making a purchase. With the entry of communities and the private sector in the management of forests, certification will 154 standardize their management approaches and is expected to result in higher quality and quantity of wood production. Trade data from Kenya’s Bureau of Statistics indicate that in 2004 imports of wood- related products was valued at K Sh 7.1 billion, of which 95 percent were paper and paperboard manufactured items and the remaining 5 percent were other wood products (see table A7.16a). In the same year, exports of wood-related products earned the country K Sh 3.7 billion, of which 77 percent was from paper and paper products, 11 percent from wood carving, and 12 percent from other wood products (see table A7.16b). Exports were lower than imports even though the potential to export more exists. The Forests Acts 2005 aims at promoting production and trade of all products and it envisages that increased production will be sold locally, subsequently reducing imports. Table A7.16a Wood Product Imports Value of imports (thousand KSh) COMMODITY 2001 2002 2003 2004 Manufactured goods classified chiefly by material Wood and cork products 196,625 231,648 203,703 378,880 Paper and paperboard manufacture Newsprint paper 1,193,076 880,543 985,750 1,268,655 Printing paper 581,146 495,441 1,187,621 919,550 Packing paper 41,680 303,769 906,103 753,129 0ther manufactures of paper 1,663,052 1,639,473 2,329,486 2,341,614 Articles made of pulp, paper, and paperboard 1,278,529 1,399,204 1,434,498 1,463,653 TOTAL 5,454,108 4,950,078 7,047,161 7,125,481 Source: Kenya Bureau of Statistics. Table A7.16b Wood Product Exports Value of exports (thousand KSh) 2001 2002 2003 2004 Timber (rough or simply worked) 9,206 4,545 6,876 9,888 Wattle bark extract 219,309 127,427 20,647 40,182 Wood carvings 449,413 432,970 288,339 398,671 Wood, other 394,653 415,351 360,432 421,755 Paper and paper products 2,136,897 2,074,829 2,316,863 2,853,483 TOTAL 3,209,478 3,055,122 2,993,157 3,723,979 Source: Kenya Bureau of Statistics. Implementation of the Forests Act 2005 will stimulate export of timber products and promote export trade of such products as charcoal and poles. Charcoal burning is illegal in Kenya although 70 percent of urban households depend on it for energy. In the 1970s, Kenya exported charcoal to Uganda but currently has a potential market in the Middle East (ESD 155 2005). Over 100 tree species are used in charcoal production in Kenya, most of which grow on private lands. Wood carvings earned K Sh 400 million in 2004 and the products are targeted for certification to increase their export market share. The carving industry currently consumes 1 percent of total wood in Kenya; it is anticipated that promotion of farm-grown trees for carving, and their certification, will raise earnings from the industry to over K Sh 800 million.42 SECTION 9. PREPARATION OF THE SECTOR UNDER THE 2005 FORESTS ACT With the Forests Act 2005 becoming effective January 2007, the government has begun to prepare the relevant legislative and policy framework. Several committees have been set up for policy decision making, monitoring, and implementation of the forest reforms. Meanwhile, a forum for discussions and regular meetings with the development partners has been established to coordinate financing needs for the reform agenda as well as to inform the partners about the progress of the forest sector reforms. In 2005, a departmental forestry technical committee was formed and operates under the direction of the Chief Conservator of Forests. It has a membership of 10 senior forest officers. The departmental forestry technical committee drafted the current forest sector reform road map (including a range of 300 actions) for operationalizing the Forests Act 2005. Furthermore, a Forest Reform Steering Committee (FRSC) was established in April 2006 to coordinate and provide leadership to the forest reforms process that will pave the way for the establishment of the KFS. The FRSC, comprising members from the public sector, civil society, the academy, and the private sector, envisages meeting at least monthly until the end of December 2006. At the same time, a Forest Reforms Secretariat (FRS) was set up to provide services to the FRSC. It comprises three representatives of the FD in charge of coordinating the implementation of the forest reform agenda. The FRSC formed three subcommittees: (i) the technical subcommittee (in charge of providing technical inputs in the transformation process of the FD to the KFS); (ii) the delinking subcommittee (responsible for reforms related to the organizational structure and the KFS public finance management system); and (iii) the communication and resource mobilization subcommittee (in charge of providing linkages between the steering committee and the Kenyan public). During a retreat in May 2006, the priority forestry reform issues based on the road map were identified and budgeted to enable the operationalization of the 2005 Forests Act in January 2006. These prioritized actions are considered critical by the technical subcommittee to ensure a successful institutional transformation of the FD as well as the preparation of the sector under the new Forests Act for the remainder of 2006. This revised and costed road map, the so-called forest reform work plan, was presented to the forest donor group as well as to the environmental group chaired by the Permanent Secretary of the Ministry of Finance to mobilize resources for financing the plan. Coordination between the FD and the donors has increased significantly over the past year (in particular over the past months) as regular meetings have taken place and more and more donors have committed to support the reform agenda of the sector. 9.1 Costing of the Forest Reforms Work Plan 9.1.1 The budget of the work plan 42. Good woods project (Lessons learnt 2005). 156 The FRS has budgeted funds for the reform agenda according to the tasks of the three subcommittees. The total cost of the reform measures amounts to US$1 million or K Sh 78 million.43 The largest share of the total budget is for financing the plantation forest inventory (about 46 percent of total budget), followed by preparation of subsidiary legislation (about 29 percent of the total budget), and facilitation of the reform secretariat (8 percent of the total budget). The first two activities would be carried out under the supervision of the technical subcommittee. The budget of the other two subcommittees is comparatively small. The budget of the delinking subcommittee (about 12 percent of the total budget) would mainly finance staff capacity and financial studies and strengthen the reform secretariat. Most of the resources for the communication and publicity subcommittee (about 9 percent of the total budget) would support stakeholder briefings. Table A7.17 Financing of the Forest Reform Work Plan, June–December 2006 2006 Costing of the forest sector reform agenda Share of total budget US $ K Sh (%) Technical subcommittee 867,100 62,431,200 79.2 Delinking Subcommittee 132,850 9,565,200 12.1 Communication and publicity subcommittee 95,200 6,854,400 8.7 Total work plan budget 1,095,150 78,850,800 100.0 Source: FD. 9.1.2 Commitment of domestic resources The Permanent Secretary of the Ministry of Finance indicated a strong commitment by the government to finance the forest sector reform agenda during the Naivasha retreat in May 2006. In this context, the FD prepared a three-year reform budget (in addition to the FD budget expenditure needs). This reform budget consists of K Sh 3.5 billion, with annual projected spending of about K Sh 1 billion. During preparation and discussion of the 2006–7 budget, these additional funds of K Sh 1 billion were captured in a '�packing list� (jointly presented with the FD’s annual budget). However, only the FD’s budget of K Sh 2.0 billion was approved for fiscal year 2006–7, thus excluding the Ministry’s need for additional resources to enable proper forest sector reforms. The 2006–7 budget envelope represents an increase of 33 percent over the K Sh 1.5 billion allocation in 2005–6.44 Most of the budget increases, however, will benefit the development budget, which increases nearly three times, from K Sh 186 million in 2005–6 to K Sh 742 million in 2006–7. This sharp increase can be mainly attributed to the loan-funded Green Zone Project of the AfDB and does not provide direct support to the FD work plan. In fact, most of the funding for reform preparation would have been drawn from nonsalary recurrent expenditures. But these have been cut under the 2006–7 budget. The FD is currently revising downward its 2006–7 annual budget and reform work plan. It is not yet clear how the approved 2006–7 budget will affect the financing of the forest sector work plan. 9.1.3 Commitment of external resources The main donors involved in supporting and financing the forest sector work plan are the World Bank, the FAO, USAID, UNDP, DFID, and JICA. Finland will also support the reform 43. See table A7.1.9 in annex A7.1 to this appendix for detailed costing of the forest reform work plan. 44. See table A7.1.10 in annex A7.1 to this appendix. 157 process, though its assistance will be at a much smaller scale than initially planned. A large share of the work plan will be financed by donor assistance: • The World Bank committed to finance the largest budget component of the work plan, the plantation forestry inventory. The inventory will be started in August 2006 and is likely to be completed by March 2007. • The FAO under the Netherlands Partnership Program (FNPP) has started to finance several studies, including the drafting of the subsidiary legislation and a forest asset valuation. Additionally, the FAO seeks to support the setup of an effective concession management information system that will ensure that concessions are awarded through a transparent process and that information on concession management is accessible by the public. Additionally, the FAO plans to finance an integrated natural resource assessment. • USAID is in the process of hiring a technical advisor to assist the FD in implementing its reform agenda beginning in August 2006. It expects to have around US$500,000 (including undisbursed funds from the past budget year and new funds), out of which it seeks to finance mainly the investment needs of the reform secretariat, the work load analysis, and the assessment of the FD’s assets and liabilities. • JICA committed to provide some funds to the FRS to support coordination of the forest sector reform process within the existing Intensified Social Forestry Project (ISFP) financial resource framework. • UNDP’s commitment to support some of the reforms is not yet confirmed. There are, however, positive indications that it will be willing to support sensitization workshops for stakeholders. Taking a closer look at current donor aid commitment and past experience of the FD in executing donor aid, some observations can be made: • Predictability of funds. Although a number of donors committed during the donor meetings to fund certain measures of the FD work plan, it is not certain if they will all be able to actually provide support (UNDP, for example). • Timely implementation of donor-funded projects. At present, implementation of some key components of the work plan has fallen behind schedule. For example, the resource inventory, financed by the World Bank, was scheduled to start at the end of August 2006 and will be completed only in March 2007, but is delayed. Similarly, timely implementation of the FD internal organizational and financial studies, funded by USAID is important. • Absorption capacity of the FD to manage the donor aid in a short period. Some concerns exist that the understaffed reform secretariat might be constrained in mobilizing resources while managing ongoing activities. The subcommittees are only slowly becoming operational, with first meetings scheduled in June 2006 (for the technical and communication and publicity subcommittees) to develop comprehensive work schedules. Additionally, the flow of available external resources will increase significantly in 2006–7 (resources for the work plan in addition to ongoing assistance, for example, as mentioned previously, the development budget increased threefold); thus, the capacity of the finance department might also be restricted in ensuring timely execution of the various programs. 9.1.4 Financing gap More than two-thirds of the FD reform agenda will be funded by external assistance. Concerns were voiced by the secretariat that it could not yet raise external support for activities related to stakeholder briefings and regional workshops. Also, financing for the forest sector’s rules and regulations is only partially covered by the FAO, as it is focusing mainly on concessions and contracts. The Forests Act provides for a wide range of rules (for 158 example, prescribing the amount of royalties or fees payable under the act or controlling the harvesting, collection, sale of, and disposal of forest produce) for which the legislative framework is not yet prepared. 9.2 Challenges to the Forest Reforms Work Plan (June–December 2006) The six-month work plan is designed to ensure the sector is prepared institutionally and legislatively for the 2005 Forests Act; delays in implementation of the work plan components can jeopardize the readiness of the sector and adversely impact forest management under the new act. The successful transformation of the FD to the KFS strongly depends on the successful implementation of the work plan. Two institutional arrangements are considered critical: (i) the nomination of the Board in a transparent process with a credible and strong Director who will be supported by the Minister; and (ii) the organizational restructuring of the FD. Restructuring the FD will require development of a staff plan and working guidelines to promote a culture change and introduction of competitive recruitment and a merit-based promotion system at the national and local levels. The delays of the workload study and the staff capacity analysis lead to a strong risk that the FD will mainly roll over its staff to the KFS. Much effort will also need to be focused on addressing the resistance to change within the department. A key component of forest sector reform will be integrating communities into forest management. It is not clear at this stage how the FD foresees to ensure broad participation of local communities in the decision-making process related to forest sector reform. 9.3 Prioritization of the Reform Agenda This section presents key priorities for the reform agenda, some important considerations associated with these priorities, and, where relevant, the status of the respective activities. • The low volume recovery from plantations is attributed to a lack of reliable inventory methods, which the KFS must address if the actual volumes are to be realized from plantations. The development of these inventory methods will be financed by the World Bank, however, it is unlikely that the findings of the studies will be available by the beginning of 2007. • Low royalty collection rates constrain FD forest management activities and make plantations unsustainable. The intervention KFS should implement is prevention of royalty leakages through weak and inefficient revenue collection systems. It is expected that with the transformation of the FD into the KFS, the organizational restructuring will impact the effectiveness of the FD staff in collecting revenues. It will be important that the newly established management board of the KFS in 2007 places high priority on implementation of various measures, such as revision of royalty rates, adoption of an efficient marketing strategy, forest certification, and the like. • Implementation of the Forests Act will require that all forest managers prepare management plans for the forest units under their control. This condition will introduce better practices, which are expected to translate to higher yields of good quality, resulting in higher prices for forest products. 159 In the past, management plans have been prepared on a pilot basis. It will be important to have management plans for all forests so that operations take place as required by the act. It will be a priority for the KFS to mobilize resources from interested players to carry out this activity. • Restructuring the FD to establish a more effective and efficient KFS is essential for successful implementation of the Forests Act. It is critically important to advance the organizational changes of the FD. Though external funding has been secured for the studies, it is not yet clear when the studies will be conducted. 160 Annex A7.1 Statistical Tables Table A7.1.1 Revenue Collection in the Forestry Sector 1999–2000 2000–1 2001–2 2002–3 2003–4 2004–5 2005–6 (April) (K Sh (K Sh (K Sh (K Sh (K Sh (K Sh (K Sh Indicator million) (%) million) (%) million) (%) million) (%) million) (%) million) (%) million) (%) Timber 109.4 84.8 112.7 89.0 109.7 87.7 78.3 75.8 50.4 78.2 509.2 95.0 457.4 91.2 Fuelwood 3.3 2.6 1.1 0.9 2.6 2.1 7.1 6.9 4.7 7.3 12.2 2.3 9.6 1.9 Poles 0.9 0.7 0.1 0.1 0.2 0.1 0.3 0.3 0.8 1.3 1.4 0.3 1.0 0.2 Miscellaneous 15.3 11.9 12.8 10.1 12.6 10.1 17.6 17.0 8.5 13.1 13.0 2.4 33.6 6.7 Total 129.0 100.0 126.6 100.0 125.1 100.0 103.3 100.0 64.4 100.0 535.9 100.0 501.5 100.0 Source: FD. Note: US$1 = K Sh 67.5. Miscellaneous receipts refer to the charges levied on minor forest products and services and the revenue collected from license fees. Table A7.1.2 Budget Share of Ministry of Environment and Natural Resources Indicator 2004–5 2005–6 Total budget allocation (K Sh billion) 2.9 3.1 Total budget allocation (as % of total budget) 1.0 1.0 Nominal growth (2004–5 to 2005–6) 6.7 Memo Government grand total (K Sh billion) 286.9 323.7 Source: Government of Kenya budget of the MENR 2004–5, 2005–6. Table A7.1.3 Composition of KWS Income and Expenditure, 2001–5 (K Sh thousand) 2001 2002 2003 2004 2005 Revenues 1,154,646 1,065,785 1,112,121 1,111,842 1,423,943 Expenditure 1,477,259 1,855,826 1,614,654 1,950,736 2,181,894 Revenue/expenditure (%) 78.2 57.4 68.9 57.0 65.3 Source: KWS Annual Report 2005. Table A7.1.4 Recurrent and Development District Expenditures, 2004–5 and 2005–6 (K Sh) 2004–5 2005–6 Recurrent Development Total Recurrent Development Total Forest development Headquarters 0 43,000,000 43,000,000 0 5,955,000 5,955,000 Forest industrial training center 140,000 0 140,000 183,000 0 183,000 Forestry training college 13,902,052 5,000,000 18,902,052 20,787,500 1,500,000 22,287,500 Forestry and plantation development 70,790,467 0 70,790,467 61,118,363 0 61,118,363 Catchment and natural forest conservation 42,787,522 0 42,787,522 45,248,990 0 45,248,990 Rural afforestation extension schemes 56,360,318 140,799 56,501,117 66,264,246 0 66,264,246 Road construction unit 5,570,000 9,450,000 15,020,000 6,040,000 6,800,000 12,840,000 Arid and semi-arid forestry development 18,616,000 28,800,000 47,416,000 13,654,500 16,110,550 29,765,050 Forest inspection and protection 1,564,500 0 1,564,500 2,910,000 0 2,910,000 Presidential commission on soil conservation and afforestation 13,600,000 13,600,000 0 10,187,999 10,187,999 Mineral development Provincial offices 6,499,998 0 6,499,998 15,766,025 0 15,766,025 Mineral survey and exploration 0 9,800,000 9,800,000 0 12,276,278 12,276,278 Total 216,230,857 109,790,799 326,021,656 231,972,624 52,829,827 284,802,451 Share of operation and maintenance 90.5 65.4 Memo Operation and maintenance for MENR 360,343,562 435,767,400 Source: MENR District Allocation Budget 2005–6. 162 Table A7.1.5 Spending of Forestry Budget by External and Domestic Resources, 2002–3 through 2005–6 (K Sh) 2003–4 2004–5 2005–6 Actual Approved Actual Approved Approved estimates expenditures estimates expenditures estimates Domestic 160,000,000 n.a. 123,300,000 n.a. 81,855,000 External 80,000,000 64,000,000 133,100,000 120,500,000 104,902,096 Loan AfDB n.a. n.a. n.a. n.a. 50,000,000 Grants JICA n.a. n.a. 37,000,000 37,000,000 28,577,096 USAID 28,000,000 14,000,000 16,200,000 4,500,000 24,000,000 FAO 2,000,000 0 0 0 2,325,000 Belgium 50,000,000 50,000,000 79,900,000 79,000,000 0 Source: FD. Note: n.a. = Not applicable. 163 Table A7.1.6 Budget Estimates and Actual Spending for Forest Development Programs 2004–5 2006–7 Nominal growth (2006–7 estimate as Share Share share of Estimated Actual of Budget Estimated of 2004–5 budget expend. budget execution budget budget actual) (K Sh (K Sh (K Sh (K Sh million) million) (%) (%) million) million) (%) Natural Forests Program 211.5 231.2 29.7 109.3 434.3 29.6 87.8 Industrial Forests Program 320.6 306.8 39.4 95.7 514.8 35.0 67.8 Farm Forestry Program 226.1 217.6 27.9 96.3 220.0 15.0 1.1 Dry Land Forest Program 21.0 23.2 3.0 110.5 300.0 20.4 1,194.9 Total 779.2 778.8 100.0 100.0 1,469.0 100.0 88.6 Source: FD. 164 165 Table A7.1.7 Forest Plantation Silviculture Operation Costs under Current State Management (operational costs for one hectare in K Sh) I REGENERATION AND SITE IMPROVEMENT LABOR COSTS OTHER COSTS SILVICULTURAL OPERATION LABOR INPUT (MD PER HA) Seedling production (1,200 24 4,920 200 seedlings) Land demarcation 4 820 20 Land preparation 25 5,125 125 SUBTOTAL 10,865 345 II STAND ESTABLISHMENT SILVICULTURAL OPERATION LABOR INPUT (MD PER HA) Cutting stakes 4 820 20 Staking out 7 1,435 35 Pitting 28 5,740 115 Planting 12 2,460 60 Weeding I 20 4,100 100 Planting survey 3 615 35 Beating up 7 1,435 35 Weeding II 20 4,100 100 Rat and other cleaning 16 3,280 80 SUBTOTAL 23,985 580 III STAND IMPROVEMENT SILVICULTURAL OPERATION LABOR INPUT (MD PER HA) Pruning I 16 3,280 80 Weeding III 18 3,690 90 Climber cutting 14 2,870 70 Pruning selection 4 820 20 Pruning II 18 3,690 90 Pruning III 14 2,870 70 Pruning IV 21 4,305 105 Pruning V 33 6,765 165 Thinning marking 4 820 20 Thinning I 18 3,690 90 Thinning II 10 2,050 50 Thinning III 1 205 Thinning IV 1 205 SUBTOTAL 35,260 850 IV FOREST PROTECTION Maintenance of Fire breaks, cleaning 30 6,150 150 Fire standby 0.01 2 2 External boundaries 24 4,920 120 Game moat 30 6,150 150 SUBTOTAL 17,222 422 V ADMINISTRATIVE COSTS OR OVERHEAD 11,281 1,128 GRAND TOTAL 98,613 5,522 104,135 Source: FRR 2007. Note: ha = hectare; MD = man day. Labor cost per man day is K Sh 205. 167 Table A7.1.8 Forest Plantation Silviculture Operation Costs Under KFS Management (operational costs for one hectare in K Sh) CURRENT LABOR OTHER I REGENERATION AND SITE IMPROVEMENT COSTS COSTS LABOR INPUT (MD SILVICULTURAL OPERATION PER HA) Seedling production 20 4,100 200 Land demarcation 3 615 15 Land preparation 20 4,100 100 SUBTOTAL 8,815 315 II STAND ESTABLISHMENT SILVICULTURAL OPERATION LABOR INPUT (MD PER HA) Cutting stakes 3 615 15 Staking out 7 1,435 35 Pitting 23 4,715 115 Planting 10 2,050 50 Weeding I 7 1,435 35 Planting survey 1 205 35 Beating up 5 1,025 35 Weeding II 7 1,435 35 Rat and other cleaning 8 1,640 40 SUB TOTAL 14,555 395 III STAND IMPROVEMENT LABOR INPUT (MD SILVICULTURAL OPERATION PER HA) Pruning I 8 1,640 40 Weeding III 7 1,435 35 Climber cutting 7 1,435 35 Pruning selection 3 615 15 Pruning II 16 3,280 80 Pruning III 10 2,050 50 Pruning IV 21 4,305 105 Pruning V 33 6,765 165 Thinning marking 3 615 15 Thinning I 10 2,050 50 Thinning II 7 1,435 35 Thinning III 1 205 0 Thinning IV 1 205 0 SUBTOTAL 26,035 625 IV FOREST PROTECTION Maintenance of Fire breaks 20 4,100 100 Fire standby 0.01 2 0 External boundaries 17 3,485 85 Game moat 15 3,075 75 SUBTOTAL 10,662 260 168 V ADMINISTRATIVE COST OR OVERHEAD 11,281 1,128 TOTAL 71,348 4,318 Source: FRR 2007. Note: ha = hectare; MD = man day. Labor cost per man day is K Sh 205. Table A7.1.9 Costing of the FD Forest Sector Reform Work Plan, June–December 2006 (US$) ACTION POINT RESPONSIBILITY BUDGET TIME FRAME COMMITMENT (US $) Technical subcommittee Plantation forest inventory FD, World Bank, June–Nov 2006 World Bank (Project FRSC 500,000 Preparation Fund) Status of forest areas FD, FRSC, MENR June–Nov 2006 No donor commitment 10,000 Conservancy boundaries FD,FRSC June– Aug 2006 No donor commitment (digitize the map) 5,000 Preparation of subsidiary FAO,FD, FRSC June–Oct 2006 FAO legislation (consultancy) 322,000 Guidelines for private sector FD, USAID, World June–Oct 2006 USAID engagement Bank, FRSC (consultancy) 10,000 CBA for community and FD, FRSC,MENR, June–Nov 2006 No donor commitment private sector participation Chief Conservator of the Forest Wamukoya (consultancy) 14,300 Resubmit Forest Policy to FD, MENR, FRSC No donor commitment Parliament 1,500 Workshop with parliamentary FRSC, MENR FD, UNDP committee on draft Forest Policy 4,300 Subtotal 867,100 Delinking subcommittee Constitute delink task force MENR, FD, June–Nov 2006 No donor commitment Treasury, AG, Office of the President 3,500 Staff capacity analysis of FD MENR, FD, June–July 2006 FD, MENR, USAID FRSC, consultant 4,300 Assessment of assets and FRSC, MENR, June –Aug 2006 FD, USAID liabilities FD, consultant 6,400 Workload analysis FRSC, DPM, June–Sept 2006 FD,USAID MENR, FD, consultant 6,500 Strategic orientation FRSC, MENR, June –Aug 2006 USAID FD, USAID, consultant 4,300 169 ACTION POINT RESPONSIBILITY BUDGET TIME FRAME COMMITMENT (US $) Categorization of KFS Delink task force, June–Nov 2006 MENR, FD, USAID FD, MENR 750 Draft management systems Finland, KEFRI, June– Nov 2006 No donor commitment FRSC, MENR, MENR, NEMA, FD Consultant 6,000 Facilitation of FRSC MENR, June– Dec 2006 No donor commitment development MENR partners 15,400 Facilitation of Reform FRSC, MENR, June–Dec 2006 USAID, MENR, JICA Secretariat development partners 85,700 Subtotal 132,850 Communication and publicity subcommittee Stakeholder briefing (FD FRSC, MENR, 68,000 July–Nov 2006 FD, NEMA, UNDP Hqs, regional workshops) development East African Wildlife partners, Society, World Bank stakeholders Long-term partnerships FRSC, task force, 1,450 July–Sept MENR, donor MENR, coordination group, development private Sector partners, private sector Feedback and updates to FRSC, MENR, 4,300 June–Dec 2006 Partnership fund FRSC and stakeholders secretariat USAID Focused sensitization FRSC, MENR, 20,000 July–Aug 2006 MENR, UNDP development partners, private sector Resubmit Forest Policy to FRSC, MENR, No donor commitment Parliament Parliamentary committee, development partners Resource mobilization for FRSC, MENR, 1,450 June–Nov 2006 No donor commitment forest sector reforms and development development (short term) partners, private sector Subtotal budget 95,200 Grant total 1,095,150 Source: FD. Table A7.1.10 Budgetary Allocations to the FD, 2005–6 and 2006–7 (K Sh billion) Nominal increase 2005–6 2006–7 (%) Recurrent expenditures 1,343.0 1,290.7 -3.9 Development expenditures 186.8 742.8 297.7 Total 1,529.7 2,033.5 32.9 Source: FD. 170 Annex A7.2 Different Management Scenarios of Revenue Collections from Plantations There are three possible revenue options from plantations analyzed from rates and yields in 2000. The ban on cutting from plantations was put in place after 2000. • Optimal Case With All Areas Being Well Managed. This option analyzes revenues from the current allowable cut area from plantations of 3,000 ha with an optimal yield of 480 m3/ha45 and a price of K Sh 450/m3. Under these ideal circumstances, where all plantations that are supposed to be cut are cut, total annual revenue collection from the government would be K Sh 648,000,000. • Current Areas Under Efficient Management. This option analyzes possible revenues from plantations under the current level of management, where the current plantation allowable cut area remains 3,000 ha, volume yields are 280 m3/ha and the price is K Sh 450/m3. Note that under this option, management can only affect the volume recovered from a unit area through plantation wood volumes and accuracy in measurement. The total revenue under this case, assuming revenues are collected in full, will be K Sh 378,000,000. • Actual Revenue. The actual figure from sale of plantation wood was K Sh 127 million in 2000, which translates to 32 percent of the collectible revenues. The drop from the collectible revenue to the actual revenue collected can only be attributed to inefficiencies in assessment and revenue collection. These must be the priority areas the KFS must improve under the new act. A similar analysis based on current average royalties of K Sh 1,500/m3 and an improved volume assessment of 300 m3/ha result in revenue of K Sh 1,350,000,000. This figure is achievable and is also bound to increase by 30 percent after all plantation areas are planted with trees, resulting in an allowable cut area of 4,000 ha while improving volume recovery to a higher figure of 400 m3/ha, as has been the case in the past. See figure A7.2.1. 45 It should be noted that the yield of 480m3/ha assume no risks such as fires, pests, disease, etc. To have obtained such yields significant investment in management would have been necessary. 171 Figure A7.2.1 Revenue Collection Under Three Different Efficiency Levels REVENUE COLLECTION LEVELS 700,000,000 600,000,000 500,000,000 400,000,000 KENYA SHILLINGS 300,000,000 REVENUE COLLECTION LEVELS 200,000,000 100,000,000 - OPTIMAL CASE UNDER EFFICIENT ACTUAL FIGURES MANAGEMNT EFFICIENCY LEVELS Source: FRR 2007. 172 Annex A7.3 Assumptions for Calculation of Revenue Projections All new organization or institutional arrangements with revenue impacts will be analyzed for a period of eight years from implementation of the Forests Act. This is the period within which impacts from implementation of the act will near optimal levels in most operations. • Royalties will be gradually adjusted to the market price from the current subsidized levels (thus, from K Sh 1,400/m3 to K Sh 1,800/m3). • Plantation forest areas will increase by 30,000 ha (backlogs) above that area cleared in the last five years. Yields will also increase by 3 percent as a result of improved management. Revenue collection methods are expected to improve, allowing an upward adjustment of 30 percent from current levels to account for the large losses due to inefficient systems, which currently recover about 25 percent of collectable revenue. • Fuelwood revenues, as with timber, will be adjusted by 30 percent as a result of improved volume assessment and collection. • A new revenue source from professional services offered by the KFS to the private sector and communities will be realized because they will seek the services of KFS extension staffs as more resources go under their control. • In all calculations, the opportunity cost of gazetted forest is taken to be zero because legally these forests have no other use but for forestry. • Revenue sharing from forests, mostly from plantations, is expected to reduce the amount going to the KFS, although this will be felt only after the removal of the existing crop. That is, in 25 years for saw wood and 8 years for fuelwood plantations, all concession holders will be harvesting the already existing stands in their areas that the KFS had established, thus, full royalties must be paid for harvesting mature plantations. After 12 years, when concession holders’ management costs on these plantations start to be significant, a proportionate reduction will be expected in the royalties. The new concession holders will be expected to plant in the areas they harvest and it is from these newly planted plantations that they will expect complete benefit sharing. • Bamboo resources will be exploited for the furniture industry and laminations or pulp. The country has huge resources that annually go into waste. • It is instructive that the new Forests Act requires that charcoal be recognized as a legal forest product and be regulated for purposes of sustainable production. According to the recent charcoal survey (ESD 2005), the charcoal industry is estimated at K Sh 32 billion. With an appropriate regulatory framework, the turnover (revenue generated) (K Sh 1.6 billion) from the industry could be charged as a levy to be shared with the KFS (starting with K Sh 50 million) and other stakeholders, such as county councils. 173 Annex A7.4 Calculations of Forest Expenditures Using Net Present Value Analysis To compare future incomes and expenditures to the present value of money, a net present value (NPV) analysis using 8 percent (which is the effective annual rate of return for most investments and one recommended by the government) has been done. Analysis indicates a negative NPV in the period under consideration, but turning positive in year 10. With the long-term nature of the investment this is an indicator that the KFS can be self-financing with positive returns in 10 years. In the first four years the NPV is negative, but in the fifth year revenues are greater than expenditures. NPV compares future outlays as if they were taking place the base year, 2006 in this analysis. The analysis indicates there will be financing gaps when expenditures are higher than revenues. In the period of higher expenditures (negative NPV) the KFS should use the new opportunities under the Forests Act of approaching development partners for funds to bridge the gap. Assistance from the government could also be an alternative, with the aim of making the service stable after the high cost of reforms. 174 Table A7.4.1 Kenya Forest Service Income and Expenditure, Net Present Value Indicator 2007–8 2008–9 2009–10 2010–1 2011–2 2012–3 2013–4 2014–5 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Revenue projections 1,571,420,000 1,905,562,400 2,392,046,268 2,850,148,728 3,159,579,800 3,495,734,613 3,871,307,965 4,291,602,913 Expenditure projections 3,536,369,000 3,850,220,000 3,113,475,600 2,996,094,015 2,924,993,697 3,072,324,236 3,041,426,508 3,042,654,347 (1+r)^year at 8% 0.926 0.857 0.794 0.735 0.681 0.63 0.583 0.54 Discounted revenue 1,455,134,920 1,633,066,977 1,899,284,737 2,094,859,315 2,151,673,844 2,202,312,806 2,256,972,544 2,317,465,573 Discounted expenditure 3,274,677,694 3,299,638,540 2,472,099,626 2,202,129,101 1,991,920,708 1,935,564,269 1,773,151,654 1,643,033,347 NPV -1,819,542,774 -1,666,571,563 -572,814,890 -107,269,786 159,753,136 266,748,537 483,820,890 674,432,226 APPENDIX 8 HOMBE CASE STUDY AND RUMRUTI FOREST SECTION 1. SUMMARY This case study was undertaken at Hombe Forest Station area, which forms part of the larger Mount Kenya Forest. The case study was undertaken with two aims, (i) to quantify in economic terms the environmental and social impacts resulting from key elements of the Forests Act 2005, and (ii) to validate the findings from the institutional, governance, and financial assessments and illustrate the effects of existing financial and institutional arrangements on implementation of the Forests Act. Hombe Forest covers 3,618 hectares (ha) and is composed of about one-third plantations (exotic and indigenous species) and two-thirds indigenous natural forests. The plantation area covers about 1,162.7 ha (959 ha is stocked with cypress, 50.4 ha with pine, 43.6 ha with eucalyptus, 21.1 ha with Mexican species, and 88 ha is not stocked). About 39 ha are plantations of indigenous species. Indigenous forest covers about 2,217 ha, of which 120 ha are degraded and 66 ha are grasslands. The Hombe Forest block is located by the Sagana River. The forest provides an important catchment function for the tributaries of the river and water for domestic consumption and irrigation around the Hombe Forest area. The forest also supports the surrounding communities with a wide range of products and services and is therefore very important in sustaining livelihoods of local people. SECTION 2. CURRENT SITUATION AND IMPLICATIONS FOR IMPLEMENTATION OF THE ACT 2.1 Governance and Institutional Issues Like the larger Mount Kenya Forest, part of Hombe Forest is gazetted as both a forest reserve (under Forests Act CAP 385) and a national reserve (under the Wildlife Act). Due to its dual gazettement, part of the forest is managed by both the Forest Department (FD) and the Kenya Wildlife Service (KWS). This leads to frequent conflicts over management practice between the two administrations. The National Environmental Management Authority (NEMA) has so far failed to reconcile the two sets of objectives. Competing objectives form one of the underlying reasons for failure to agree on a strategic management plan for the entire Mount Kenya Forest. The basic conflict arises because KWS’s mandate requires it to protect wildlife and prohibit use of forest resources within National Reserves, whereas FD encourages use and also seeks to control movements of elephants, which cause extensive damage to plantations and community crops. Efforts to reconcile the two by the National Environmental Management Authority (NEMA) have not been successful so far. Hombe Forest is administered by a forester. There is also a forest extension officer in the town of Karatina (about 45 minutes by car) responsible for advice on replanting and giving permits for tree cutting on private lands. The forest is managed with very limited funds and a shortage of staff. The forester is assisted by one clerk, 10 forest guards, and 7 watchmen. The forest had generally deteriorated in quality by the late 1990s. However, with tougher enforcement, the logging ban, restrictions on the shamba system, and local conservation the forest quality improved over the last five years. There is currently no management plan for the forest; however, a plan is anticipated to be developed soon to enable local community associations to enter into partnerships with the Kenya Forest Service (KFS). A strategic management plan for the entire Mount Kenya Forest has been under formulation for the last five years. The delay in its formulation is attributed to the double gazettement of the forest and the inability of the FD and the KWS to agree on certain aspects. Other forest area or forest block management plans similar to the one proposed for Hombe may be affected by these problems. There may also be implications for implementation of some components of the site-specific management plans through Community Forest Association (CFAs)/KFS partnerships, especially because of the mandate given to KWS in management of national reserves. For example, forest use in national reserves is prohibited by the Wildlife Act, thus the KWS may limit use within the natural forest. In the broader scheme, there is increasing pressure for a review of the Wildlife Act and a school of thought that advocates consumptive use of wildlife. Thus, it is likely that the Wildlife Act and its institutional framework will be reviewed in the near future, resulting in another new natural resources act in Kenya that will require integration with the Forests Act 2005, Water Act 2002, and Environmental Management and Co-ordination Act (EMCA) 1999. An initial analysis of the implications of new partnerships between CFAs and a new KFS and the KWS suggest that providing management practices in line with the new legal and institutional procedures laid out would reduce conflicts between the organizations over time. It appears that in the past some of the conflicts arose because of the use of Memoranda of Understanding (MoU), which are typically too weak to enable any link between the KWS and the FD, and inequitable distribution of resources between the FD and the KWS. With the new KFS, there should be an approximate balance of resources between the KWS and the KFS. Additionally, the Forests Act 2005 allows for the use of legal agreements that are more binding to both parties than the current MoU. One of the requirements of the Forests Act is that any forest management application submitted to the KFS should be accompanied by a draft management plan. Capacity for local community associations to draw up management plans is lacking and technical expertise is needed. Development of a plan should be as consultative as possible. Another stakeholder in Hombe Forest with which coordination is necessary is the Nyayo Tea Zones Development Cooperation (NTZDC), NTZBC is a government agency involved in tea establishment around some parts of the forest reserve. NTZDC is responsible for management of the forest reserves under tea and eucalyptus plantation in liaison with the FD. Currently, the FD and NTZDC are jointly implementing the Green Zone Project in several forest areas including Mount Kenya. The project aims at enhancing conservation of natural forest and reforestation within the tea buffer zone. It will also support the forest-adjacent communities. 2.2 Financial Issues The FD currently receives funds for forest management from the Ministry of Finance (Treasury). The funds are usually too low to meet the budget, a situation that is anticipated to improve with the new act. The allocations from the Treasury are not based on a station’s potential to raise revenue nor its budget but on the funds available for the ministry. Although capable of collecting much of the money needed to fund all its activities, including a surplus, a forest station is not allowed to use the revenue collected. Funds generated by the FD go to the Treasury. Not until financial year 2005–6 did the government give appropriation funds to districts. However, the amount was less than 5 percent of funds generated at the district level. Currently, with the ban on timber harvesting in effect, the FD earns money from permits issued for grazing, fuelwood collection, and rent on water pipes that pass through forest land. 177 In the past, the FD was paid for the land leased to the Serena Mountain Lodge plus a certain amount that was based on bed occupancy. Now all payments go to the KWS, which also charges entrance fees at the gate of US$15 for non-Kenya residents. During 2005–6, the Nyeri district forest officer received a total of K Sh 4,883,558 to finance operations in the nine forest stations within the district, the District Forest Office itself, and the forest extension services. The money was budgeted as follows: Plantation forest program 2,717,627 Natural forests 1,012,420 Forest extension services 1,153,511 TOTAL 4,883,558 Hombe received K Sh 297,455, or 6 percent of the district allocation, to fund all activities in the station. Analysis of total allocations from all sources added up to K Sh 2,376,093, which takes into account the provincial and head office overheads going to Hombe, salaries of the staff in Hombe, and support coming from communities. Table A8.1 Total Expenditure by the Hombe Forest Station Expenditures K Sh Overhead (10 percent) 216,008 Salaries (19 people) 1,596,000 Allocations from headquarters 297,455 Community support 266,630 Total 2,376,093 Source: FRR 2007. Funding for environmental coordination and regulation through NEMA offices is insignificant at the district level and completely lacking at the forest station level. For example, the Provincial Director of Environment (PDE) is allocated K Sh 20,000 per quarter while K Sh 15,000 is allocated to the District Environmental Officer (DEO) per quarter. This is to cover all expenses including telephone, transport, stationary, and the like. The two have limited equipment: for example, a computer but no printer, and no vehicle. Thus, the two officers rely on support from other government departments. This can cause difficulties for the PDE or DEO during the Provincial or District Environmental Committee meetings, where other lead agencies may need to be challenged on various issues and yet must be relied on to provide facilities to visit ecosystems and support for administrative functions. 2.3 Social Issues Hombe is inhabited by motivated communities that have mobilized themselves into CFAs in the expectation of participating and benefiting from management of Hombe Forest. Therefore, from a strategic planning perspective, the key social issue is to manage and meet these expectations as much as possible through the new KFS and other partners. In other areas, the strategic intervention may need to focus on mobilizing communities into CFAs, but this is not the case in Hombe. To progress in Hombe, it is clear that some of the most urgent social strategic interventions required are the following: 178 • Guidelines on the actual mechanisms for benefit sharing. Despite the hesitation to implement binding guidelines before they have been adequately tested, it is imperative to establish draft guidelines as soon as possible. They can subsequently be tested, amended, and gazetted. • Shared training opportunities for both CFAs and the new KFS in management planning for forests. This harmonized training by independent third parties will help to ensure that expectations on the part of both the new KFS and the new CFAs are debated and compromises reached according to sound principles of forest management. • Inclusion of excluded groups. Hombe as a case study has revealed that even with CFAs, there will be marginalized and excluded communities. In Hombe, two poor community groups (people evicted from Hombe Forest in 1989 and another community living on government land with no land security) have not been integrated into the existing CFAs. This suggests that the Social Development Officer for Mathira Division needs to engage the two marginalized and excluded communities and determine mechanisms with the newly formed CFAs to ensure their inclusion in Hombe forest management. The main objective of this task should be to improve the economic, social, and environmental well-being of the excluded groups through deliberate and planned activities. For example, representation in the CFAs by marginalized community members could be ensured and may involve the expansion of CFAs to cover the marginalized community areas. • Working conditions of FD staff at Hombe. The forest station houses are leaking and require renovation. Good working conditions for the staff will raise morale and overall productivity. • Consultative nature of management plan development. The forester and the community associations are in the process of initiating development of a forest management plan for Hombe Forest. This process should be as consultative as possible to ensure that all social aspects of all players are taken into account. 2.4 Environmental Issues From a strategic planning perspective, it is imperative that NEMA be strengthened to function as the key coordination body on environment, which is its intended mandate at the district, national, and provincial levels. If NEMA is strengthened according to its Vision and Strategy (2005–2010) and through devolution of both power and resources to the provincial and district levels, it should be in a position to engage in dialogue with, and help resolve conflicts between, the various partners that emerge with overlapping mandates and management responsibilities for Hombe Forest. For example, one of the key functions of Hombe is watershed protection. Both the KWS and the current FD (or future KFS) have jurisdiction over Hombe for both forest and wildlife. Thus, NEMA should be able to assist to harmonize and distinguish roles and responsibilities between • the Ministry of Water through its water user associations (WUAs) and the KFS and its CFAs; • the KWS, the KFS, and their respective CFAs; • the NTZDC and KFS and its CFAs; and • any specialized tourism, environmental, or other groups with various aims and objectives 179 Furthermore, one of NEMA’s main objectives in its strategy is to roll out environmental education and awareness plans. This needs to be actively undertaken at all levels in Hombe Forest. Pre-primary, primary, secondary, and tertiary education facilities should be targeted along with adult education. This should be interwoven into the current administrative structure through sublocation, location, division, and district structures but harmonized with the new forest conservancy and subunit boundaries. SECTION 3. CURRENT SITUATION AND IMPLICATIONS FOR IMPLEMENTATION OF THE ACT: ENABLING INVESTMENT IN THE FOREST SECTOR 3.1 Governance and Institutional Issues 3.1.1 Flow of funds The FD is a government department within the Ministry of Environment and Natural Resources. It operates under the provincial administration, a situation that will change after implementation of the act. Under the current arrangements, funds for forest stations are managed at the district level because of accounting procedures. The funds are relatively low when compared with forest station needs. Political interests have made it difficult for the DFOs to adhere to district budgets when funds are spent for unplanned but emerging activities. This is further complicated by delays in provision of budget funds from the Treasury, resulting in a mismatch between activities that need to take place in certain periods and the funding of those activities. For example, funds for planting may be released after the planting season. Matters are also made worse by reliance on a single district accountant for all the ministries. This one accountant may not fully comprehend the constraints and problems associated with delayed funding. The situation is envisaged to change after implementation of the act. The act provides for efficient financial mechanisms because funds will not be channeled through the current provincial administration channels. The act also allows for equitable allocation of resources. 3.1.2 Private sector involvement An indefinite Presidential ban on timber harvesting was imposed in March 2000 and remains in force to date. This ban has many implications for management of the plantations at Hombe Forest, where the four sawmills are now dormant. Most of the infrastructure of these sawmills has deteriorated over time and most may not be in a position to resume the business of sawmilling because of inadequate capacity and financial limitations. These small-scale saw millers will therefore be marginalized because of lack of access to finance, but this can be rectified through microfinance from financial institutions. Hombe has the potential for being an important ecotourism area because of its accessibility. However, the existing local groups can only exploit this potential through outside support because most lack the financial resources. 3.1.3 Local community involvement Anti-excision campaign Local people within Hombe are well sensitized to and involved in various forest conservation activities through established community associations and groups. Through these 180 organizations and groups, they thwarted the government’s plan to section off part of the forest for settlement in 2001 as part of nationwide irregular excision plans. About 717 ha of Hombe Forest was excised for settlement of purportedly “landless people.� The concern among local communities at that time was that people being given the land were not the nearby squatters living within Hombe area or landless people. Settlement of the people at Hombe, people argued, could have affected the accessibility to water from the forest and contributed to clearing of the forest, a situation that could have contributed to blowing of cold breezes from the mountain resulting in destruction of their crops. Through protests and demonstrations, the taking of this land from the forest was stopped. Local communities thereafter helped the FD to establish plantations in the clear-cut areas. Plantation establishment The involvement of local communities in plantation management will be complicated in areas where local communities helped the FD establish plantations and where they now are unwilling to have the plantations given out to private sector interests without their engagement. This is the situation at Hombe, where local communities accept that they are technically and financially unable to engage in the sawmilling business but would like to be involved in determining an acceptable approach to plantation management through discussions with the KFS and any potential private sector interest. Local communities at Hombe are also involved in monitoring. For example, the grazer groups assist in desnaring wildlife. 3.2 Financial Issues For any investment, adequate funds are needed to generate revenues. As mentioned previously, Hombe receives approximately K Sh 297,455 annually from the district to meet all activities in the station. No funding is provided by any other government agency, including NEMA, at the station level. To enable the station to function, local communities have contributed significantly. For example, in April and May 2006, the neighboring communities of Hombe planted approximately 52 ha with seedlings both provided by the government and purchased from local communities at K Sh 70,000. The contribution of the communities consisted of digging 52,000 holes and planting 52,000 seedlings. If the government’s daily casual labor rate of K Sh 205.10 is used and it is assumed that approximately 15 people are required to dig the holes for 1 ha and approximately 10 people are required to plant the seedlings for 1 ha, their contribution approximates K Sh 159,978 and K Sh 106,652, respectively, or a total of K Sh 266,630. In November 2005, Serena Mountain Lodge provided 16,000 exotic seedlings for free, which were used to replace dead seedlings and trees in 29 ha. The community was paid a fee of K Sh 20,000 by the FD for planting the seedlings. In April 2005, the FD at Hombe purchased 5,500 mixed indigenous seedlings from the community at K Sh 55,000. The community assisted in planting 45 ha using these seedlings and others provided by the FD. They provided the digging services for free because the FD had purchased their seedlings. At that time, it should be noted that the casual labor rate was K Sh 191.70 per person per day. 181 In 2005, the community pruned 14 ha for free on the understanding that they could collect and use all prunings. This service saved the FD K Sh 40,257, which translates to K Sh 2,876 per ha. Ideally, weeding should be done in June and July 2006 by eight people per ha, but it is unlikely that the FD will have funds for that task. This amounts to K Sh 85,321.6 for 52 ha (or K Sh 10,665 per ha). Under the shamba system, the weeding was done for free. 3.2.1 Economic analysis of Hombe forest resources Hombe is largely a conservation forest area. Over 60 percent of its forest is indigenous and managed for environmental services; the remaining forest area is plantation. Table A8.2 summarizes the types of forest resources at Hombe Forest. Table A8.2 Forest Resources at Hombe Forest Station Type of resource Status Area (ha) Indigenous Degraded 120 Grassland 66 Other 2,031 Total indigenous 2,217 Plantation Cypress 959 Pines 50 Eucalyptus 44 Mexican 21 Not stocked 88 Total plantation 1,162 Other (Mainly Nyayo Tea Zone) 239 Total forest area 3,618 Source: Forester at Hombe station. Forest produce revenues The main revenue sources in Hombe were from minor forest products because of the existing ban on harvesting of timber plantations. In 2004 and 2005, revenue collection totaled K Sh 436,357 and K Sh 457,992, respectively, as shown in table A8.3. Revenues for 1992 and 1994 were higher because of timber sales. However, this may not have been optimal for maximizing revenue. After implementation of the Forests Act, revenue collection levels will change as a result of the following: Proper and effective management of forest operations, based on management plans, is expected to yield optimal outputs, hence higher revenues More funds coming from revenue collected and other donors Proper revenue collection methods Proper volume assessment methods and techniques Lifting of the ban on harvesting from plantations New revenue sources will be explored 182 These changes brought about by the act will lead to higher revenues (see table A8.4). Harvesting from saw log or fuelwood plantations will bring in the highest revenues, although other sources are expected to improve too. 183 Table A8.3 Historical Revenue Generation, Select Years 2005 2004 1997 1994 1992 Parameters Units K Sh Units K Sh Units K Sh Units K Sh Units K Sh 3 Timber (m ) — — — — 1,069.85 461,583 5,291.4 1,939,113 1,110.74 502,080 Land rent for Mt. Lodge — — — — — 0 — 3,114,345 — 719,583 Monthly fuel licenses 1,420 59,125 1,284 51,360 221 7,735 — 0 656 11,808 3 3 Fuelwood (1 stack = 3 m ) or in m 39 14,405 126 28,700 964 57,160 1,670 55,368 — 8,581 Grazing cattle 9,564 191,280 6,554 157,152 1,322 39,660 — 0 — 0 Grazing sheep 4,809 76,944 3,072 49,216 722 72,220 — 0 — 0 Grass (headloads) 8,830 67,503 506 35,042 1,802 10,814 300 2,484 — 0 Offenses compounded 32 21,100 24 80,260 11 7,035 — 16,785 — 16,743 Soil (per ton) 6 510 1 69 — 0 — 0 — 0 Guest house rent (per night) 3 1,050 6 2,013 — 0 12 3,000 — 0 Applications for general forest license 2 2,000 — 0 — 124,800 9 49,000 — 0 Annual licenses issued 1 3,000 1 3,000 — 0 — 0 — 0 Land rent (way leave and inlet in ha) 7.6 20,450 11.7 29,050 0.8 800 — 0 — 0 Bags (1 kg) 1 45 1 45 10 150 — 0 — 0 Christmas tree (unit or m) 1 580 — 0 21.42 1,500 — 0 — 0 Shamba rent (plots) — 0 — — 468 28,080 445 17,892 — 0 Withers (stakes) — 0 — — 55 165 — 0 — 0 Miscellaneous 0 0 — 450 2,383 9,275 — 0 — 10,986 Plant and seedling sales — 0 — — — 0 4,241 3,124 21,835 4,531 Poles — 0 — 0 — 0 9,950 18,795 — — Total revenue n.a. 457,992 n.a. 436,357 n.a. 820,977 n.a. 5,219,907 n.a. 1,274,314 Source: FRR 2007. Note: — = Not available; n.a. = Not applicable. 184 Table A8.4 Projected Revenue Collection in 2007 (K Sh) Amount in Amount in Source 2005 2007 Method of calculation (40 ha × 250 m3/ha × 1,400 K Saw logs(clear fells) 0 14,000,000Sh/m3) (40 ha × 120 m3/ha × 1,000, K (thinnings) 4,800,000Sh/m3) (80 ha × 25 m3/ha × 700 K Fuelwood (plantations) 14,405 1,400,000Sh/m3) Monthly fuel license 59,125 60,000 Grazing 91,280 200,000 Grass 67,503 67,000 Sheep 76,944 76,000 Land rent 20,450 20,450 Other miscellaneous 28,285 28,285 Shamba rent 150,000(75 ha × 2 000 K Sh/ha) Total plantation revenue 457,992 20,651,735 Other possible revenues, not calculated Water Carbon sinks Bamboo Source: FRR 2007. With implementation of the Forests Act, plantation revenue will be improved resulting in a total of K Sh 20,651,735 from Hombe. The figure is expected to improve when other revenue sources from public or environmental services are assessed and brought into the revenue stream. This money, if plowed back into improvement of the forests in Hombe, is expected to improve yields. Assumptions in revenue forecasting Various requirements must be met to ensure that the revenue is generated as expected: • The act must be implemented before or at the start of 2007. • Funds must be available at the start to finance initial activities before revenues can take over. • Partners must be sensitized and brought on board. • Improvements must be made to revenue assessment and collection measures. • All stakeholders in Hombe must respond as expected, for example, community associations must be formed and take up their roles and the private sector must take up its role in time, in a good business environment. • The FD must be ready for its transformation to the KFS. Projected expenditure Implementation of the Forests Act 2005 in Hombe requires an annual budget of K Sh 9,546,750 from the current expenditure level of K Sh 2,376,093, a 2.5 percent increase from the previous year. This will be spent for the following activities: • Community and private sector capacity building for effective involvement in their roles in the new act • Community and private sector group formation and agreements on partnership • Forest staff capacity building, retraining, and hiring of additional staff • Forest equipment purchase and rehabilitation • Forest development, mainly in management planning, forest operations, and rehabilitation of unattended forests A breakdown of the estimated or forecasted costs for 2007 is presented in table A8.5. Table A8.5 Requirements for Efficient Implementation of the Forests Act 2005 Cost item Quantity Unit costs Total costs (K Sh) (K Sh) Community capacity building 20 (workshops for leaders, 50,000 1,000,000 demonstration seminars for community members Private sector and community agreements, contracts, licensing, n.a. 200,000 association formation and agreements guidelines, and the like Hombe Forest Staff Salaries (improved by 100%) 19 staff members 14,000 3,192,000 Additional 4 FG and 1 FA 5 new staff 14,000 840,000 Training of staff 4 training sessions 40,000 160,000 Equipment purchase and rehabilitation Pumps, tools, computer and n.a. 1,200,000 printer, car repairs and tractor Forest Development Management planning, mapping, 1 for the whole area 1,800,000 1,800,000 and inventories Thinning 40 ha @ 10 MD per ha 205 82,000 Pruning 40 ha @ 15 MD per ha 205 123,000 Rehabilitation of cleared areas 26 ha (site improvement and 24,000 per 624,000 establishment ha Road rehabilitation 7 km @ 20 MD per km 205 28,700 Boundary cleaning 10 km@17 MD per km 205 34,650 Fire break opening 4 km @ 20 MD per km 205 16,400 Nursery rehabilitation 1,200 MD 205 246,000 Total 9,546,750 Source: FRR 2007. Note: MD = Man day. n.a. = Not applicable. 186 3.3 Social Issues The interrelationships between the communities bordering on Hombe Forest are both dynamic and complex. This can be understood by referring back to the section on local communities, which explains how Hombe’s neighboring communities have participated in land preparation, seedling planting, weeding, and pruning of Hombe Forest. Some of the services provided by the communities were paid for and others were provided to the FD for free. However, in undertaking services for free and in actively protecting the forest, there is an implicit understanding that these communities will in the future share in the benefits from Hombe Forest. Local community involvement in thwarting government plans to excise sections of Hombe Forest also enters into the communities’ feeling of ownership. This was a landmark event, not only for Hombe but for the people and forests of Kenya. Thus, any analysis of the social impacts must take this history into account. The communities of Hombe are well organized and aware of the services that they provide to Hombe Forest and receive in return from the forest. Environmental issues The key environmental issues revolve around the impacts of watershed and forestry catchment, degradation in Hombe. However, this degradation has largely been reversed in recent times. Nevertheless, the environmental impacts of poor forestry management in the recent past included the following: • Land degradation • Soil erosion • Decreased water flows in streams and likely decreasing aquifer levels • Increased exposure by communities to mountain winds and associated dust • Increased incidences of frost negatively affecting all crops and plants • Reduced wildlife • Increased incidences of human-wildlife conflict • Reduced biodiversity • Potentially reduced tourist numbers over time due to a denuded environment • A reduction in natural resources available to the communities of Hombe and to the FD (fuelwood, withies, grasses, timber, medicinal plants, and so forth) SECTION 4. CURRENT SITUATION AND IMPLICATIONS FOR IMPLEMENTATION OF THE ACT: COMMUNITY PARTICIPATION AND BENEFIT SHARING 4.1 Governance and Institutional Issues 4.1.1 Community forest associations Local people have been involved in various forest conservation activities through established community associations and groups. Almost all the recent planting of forest plantations in Hombe was done by local people in cooperation with the FD. Some local people have already been sensitized to the new Forests Act and many local leaders are aware of it. Three forest associations exist: Hombe Neighbouring Association, 187 Hombe Forest Association, and Kagati-Kaimati Association. Hombe Neighbouring Association and Kagati-Kaimati Association are awaiting their registration certificates while the Hombe Forest Association already has a certificate. They all have constitutions with elected Chairperson, Vice Chairperson, Secretary, Vice-Secretary, and Treasurer. Hombe Forest Association has formally opened a bank account with five signatures required for transaction purposes; the other two are in the process of opening bank accounts. All associations have plans to hold regular meetings, for example, quarterly and annual general meetings that are open to all members, not just the governing committee. During the annual general meeting, the Treasurer will be expected to issue and discuss a Statement of Accounts. Hombe Neighbouring Association, as a representative of most community groups, has interests in the whole of the Hombe Forest. Hombe Forest Association interest is in the upper Hombe while the Kagati-Kaimati Forest Association’s interest is in the lower Hombe. A SWOT (Strengths, Weakness, Opportunities, and Threats) analysis of the three community associations revealed that the main strengths of forest associations at Hombe are community unity, willingness and community drive, manpower (for forest activities), community dedication and commitment, community voice in decision making, and local knowledge. The main weaknesses are financial limitations, lack of professional forestry skills and other capacity weaknesses, and conflicts of interest between the associations. The existing associations recognize and protect traditional user rights for communities for medicinal plants and herbs, fuelwood collection, grazing, hanging of traditional beehives, water, and salt licks. However, the associations will need to come up with mechanisms to prevent abuse of these traditional user rights (for example, if someone agrees to graze cattle that do not belong to them for a fee). An example of a disadvantaged group was the Muroto roadside settlers who were evicted from the Hombe Forest in 1989. They are members of the CFAs. They have been assisted by key community members to form a community-based organization so that they are not left out of the process. In addition, during negotiation with the FD on access and payment for fuelwood, they were singled out as a group that should not pay for fuelwood, while other members of the community continued to pay the annual fee. In view of the fact that there are three associations in Hombe with similar interests, it will be difficult for the FD to determine which association to work with, especially if all have similar interests. In certain larger forest areas, such as Rumuruti Forest covering about 6,000 ha, local communities have formed one association. 4.1.2 Community representation at forest conservancy level The Forest Conservancy Committee (FCC) is the organ that will be informing the KFS Board of desires of communities at the conservancy level. As such, it would be important to ensure that the voice of communities is represented at that level, probably through the formation of a conservancy umbrella for CFAs that would in turn be nominating the representatives at the conservancy level. In most forest areas, communities have yet to organize themselves into cohesive CFAs, a situation that may delay formation of FCCs, though it would be advisable to form FCCs with the current registered CFAs and allow others to join as they are registered to avoid delaying implementation of provisions of the new act. 4.2 Financial Issues 4.2.1 Financial incentives 188 The Forests Act supports and introduces community participation in resource management, removal of price subsidies, participation of the private sector, sourcing of donor funds, and efficient wood assessment and revenue collection. All these interventions should lead to higher returns and should encourage employment of labor and other capital from neighboring communities. 4.2.2 Benefit sharing How benefits will be shared has yet to be worked out and poses a major challenge in the implementation of the act. In the absence of clear benefit-sharing mechanisms, local communities are coming up with very high expectations. Benefit-sharing mechanisms should be agreed upon in a consultative way, reflecting the contributions of all players including local communities in plantation establishment as in the case of Hombe. 4.3 Social Issues 4.3.1 Population About 20,000 people (about 4,000 households) from the Kikuyu tribe live around Hombe Ruguru location. See annex A8.1 to this appendix for a detailed breakdown of the population in the area according to the censuses and district development plans from 1974 to 2008. The population closest to the forest is in the Sagana settlement (about 5,000 people or 1,000 households), which lies between the two parts of the forest block. The land around Hombe is very fertile and most people are smallholder farmers growing vegetables, fruit, and other crops, such as flowers, on irrigated and rainfed land. Farm forestry is widespread. The population also includes two poorer, largely landless groups—forest plantation laborers and their families evicted from Hombe Forest in 1989 (following a nationwide decision), and households that have been living on state land without secure tenure since the independence period. The CFAs that are registered or are in the process of registering expect to participate and benefit from the new management of forests in Kenya. Initial training in participatory forest management has been undertaken in the area and the CFAs are ready to engage with the new KFS at the start of 2007. While the expectations of the CFAs can be assessed as being high, they are not assessed as being unreasonable. However, what is clearly lacking is experience and training in management plans and CFA management procedures and experience. The CFAs comprise members of the Sagana settlement scheme and neighboring communities but do not include members from the two landless communities as far as could be ascertained. Thus, it can be surmised that currently there is no mechanism for the two landless communities to directly participate or benefit from the Forests Act 2005 and the new KFS. In analyzing social issues, it is important to understand that the pressures on Hombe Forest have increased dramatically with the corresponding increase in population. Data from the 1969 census indicate that the population density in Ruguru location was 108 people per km2 while data from the 1999 census indicate that this has increased almost fivefold to a current population density of between 489 and 567 people per km2. Put simply, this represents a fivefold increase in demand for natural resource services and products from Hombe. Simultaneously there has been an increase in demand for education, health, and other infrastructure services, which also have not kept pace with this rapid population growth. That said, during the field visit, HIV/AIDS awareness education was being integrated into the meetings with the CFAs and other community members at a nearby location. 189 4.3.2 Forest squatters A small population of Hombe (fewer than 500 households) were evicted from Hombe Forest in 1989 following a decision to remove all forest workers living in forests and practicing the shamba system. This was the time when the shamba system was changed to “nonresidential cultivation.� These families live in pathetic conditions and need to be settled elsewhere so they can participate in nation building like other Kenyans. This situation is not peculiar to Hombe. Recently, several evictions were undertaken in other forest areas, rendering people homeless. These evictions were performed with no coordination, leaving the Ministry of Lands out of the process, regardless of the fact that it is the obligation of the Ministry of Lands to look into the plight of those evicted. A more coordinated approach has been cultivated for Marmanet forests where the forest land has suffered encroachment. At this particular site, the FD and the Ministry of Lands agreed to prepare a joint Cabinet Memorandum addressing the forest settlement problem. During this year, the government has also set aside some funds for settling landless people. It should be noted that previous settlements have been marred by corruption, leaving genuine landless people out of the settlement. In other cases, people have masqueraded as landless people, selling the allocated land then moving on to other areas as squatters (professional squatters). An open and transparent manner of ensuring that this does not happen in future settlements should be sought and encouraged; otherwise, the squatter problem will not be promptly solved. 4.3.3 Dependency on the forest by local communities The local population is highly dependent on the forest for grazing, water, fuelwood, sticks, beekeeping, and to some extent, ecotourism. People also claim benefits from climatic changes, but they suffer from wild animal damage, especially from elephants. Currently, people are banned from engaging in charcoal production, growing food, or logging in the forests, but in the past these activities were important and some hope that they will be allowed to resume (in a more regulated way) with implementation of the Forests Act. The following are some of the community benefits from the forest: Grazing The carrying capacity of Hombe Forest has been calculated by the FD as 637 livestock. But the figure rose to 1,200 livestock during the drought of October 2005 through March 2006. The charge is K Sh 20 for each animal per month. Apart from grazing, local communities also remove fodder for their livestock from the forest. Water A number of water projects draw water from the forest. The authority to access water from the rivers is given by the Ministry of Water after a group pays K Sh 600 per year for a permit. After this payment the group then applies to the FD for an easement permit at K Sh 3,700 per year. Five water projects operate from Hombe. • Kiahia–Karurumo Water Project. Water has so far not reached the communities but the project has been authorized to abstract 260 m3/day during normal river flow. No information was given for irrigation demands. • Sagana Water Project. This project irrigates approximately 36,000 ha and is authorized to abstract 87.8 m3/day from normal river flow for domestic consumption and 443.3 m3/day from flood flow for irrigation demands. • Iruri Water Project has applied for a permit, but the project is still under construction. 190 • Upper Gichoru Water Project is authorized to abstract 1.3 m3/day from normal river flow for domestic consumption and 28.4 m3/day from flood flow for general irrigation. They have constructed a flume. There appears to be insufficient flow for year-round abstraction and a further complication is that the NTZDC has planted eucalyptus in the water catchment, which negatively affects the water source. • Kagati Kaimati Water Project has an intake but has not laid any piping yet. It is authorized to abstract 18.0 m3/day from normal river flow for domestic consumption and 75.0 m3/day from flood flow for general irrigation. The water projects have not yet formed a water users association as required by the Water Act 2002. The process has been initiated and the projects will merge with others in the neighboring areas. The water user associations, therefore, will cover larger areas than the forest associations. The current water projects expect to be empowered by the Forests Act to participate in forest management. They expect to be given authority to prevent destruction of the forest once the act comes into force. Fuelwood collection Some of the local communities living around the forest obtain fuelwood from the forest because land holdings around the forest are small, an average of two acres per household. Fuelwood is mostly collected by women who pay K Sh 45 per month for one head load per day. Currently, collection of fuelwood by trucks does not occur; however, four individuals have applied. Charges for trucks are K Sh 350 per stack (equal to one ton). A truck usually takes four stacks. Sticks for horticulture Hombe is a high agricultural production area and some of the local communities are involved in horticulture. Sticks for snow peas and tomatoes are obtained from tree branches pruned from forest plantations. Beekeeping and fish farming Members of the Sagana Fish and Bee Keeping Women Self Help Group are allowed to keep beehives in the forest and have fishing ponds that draw water from the forest. The group assists the FD to plant trees in the forest. The expectations of this group once the act is operational include increased community policing through engagement, fuelwood, and securing the integrity of the forest through forest rehabilitation. Ecotourism Serena Mountain Lodge is a major upmarket tourist hotel in the forest. It is involved in afforestation activities in Hombe, for which it pays local people, and also provides employment at the hotel and purchases supplies for the hotel. An exotic plantation block covering 60 ha was established through Serena support. Serena has also been providing assistance in electric fencing. There is also a local youth group, Sagana Youth Mountain Climbing Group, of guides and porters for climbers to Mount Kenya that is interested in developing ecotourism activities in Hombe Forest. They have approached the FD to open a camp site, but have yet to receive permission. The group expects to be given forest land for planting and forest land to establish a camping facility once the act is operationalized. Accessibility (via a tarmac road all the way to Hombe) raises the potential for Hombe to be an important ecotourism area. Food The shamba system was a method of forest plantation establishment in which farmers tended young plantation trees while producing food crops. Under this method of establishing plantations, local communities benefited from cultivation of food crops intercropped with the 191 tree seedlings. In this practice, farmers were allocated freshly cleared areas to plant food crops for two to three years while tree seedlings became established. Most of the plantation area in Hombe Forest was under the shamba system. Before 2000 the system had been abused, but after reorganization in 2000 it became one of the most successful case studies in the country. Some of the local communities interviewed indicated that food availability became low after shamba was banned in 2003. Incidences of elephant crop damage on people’s farms increased because there were no longer people practicing the shamba system to scare the animals. Before the forest was replanted in 2000, food crops in Hombe were affected by frosts. Frost has been reduced by the trees, which act as buffers to the cold wind blowing from the mountain. Pest incidences were also observed during most of the hot season. This has now changed because the weather is now more humid during the hot seasons. Employment from sawmilling industry Four sawmills now lie dormant as a result of the ban on timber harvesting. An estimated 1,000 people lost their jobs after closure of the sawmills, a situation that impoverished the direct and indirect beneficiaries of sawmill employment. 4.3.4 Human-wildlife and forest plantation–wildlife conflicts Hombe Forest also has suffered negative effects through wildlife damage. Sagana settlement lies on the edge of an elephant corridor that connects Mount Kenya and Aberdares. There are two types of conflicts (human-wildlife and plantation-wildlife, in which plantations are damaged by elephants). Some of the plantations have been refenced with a two-strand fence. From an economic point of view, wildlife damage in 2006 of Block 3A to 3M (142.6 ha) in Hombe, which was planted in 2001 (mainly with cypress, but also with Mexican and Pinups Paula species), amounted to approximately 38.6 ha or 27.1 percent of tree cover. The damage was primarily caused by elephants, but was exacerbated by buffalo and other species including wild pig, waterbuck, and others. Thus, it can be predicted that over a 20- year period, harvestable timber could become almost negligible without replanting. Wildlife-human conflict has been reduced by the nearby 10 km Sagana electric fence, which was constructed in 1999 and 2000 with assistance from the European Union–funded Community Development Trust Fund program (approximately K Sh 2.5 million) and community contributions amounting to approximately K Sh 1.6 million in both labor and cash (K Sh 250,000 to K Sh 300,000). However, communities at either end of the fence reportedly suffer from wildlife impacts because the animals typically seek an exit around the fence. 4.4 Environmental Issues Hombe has experienced a deliberate reversal of severe environmental degradation through community participation in forest catchment management. In about 2000, logging and clear felling of trees undertaken in Hombe resulted in land denudation, soil erosion, dwindling water flows in rivers accompanied by extreme winds, more frequent occurrences of frost, and higher incidences of human-wildlife conflict, as reported by community representatives. This was particularly felt by the farmers in Sagana and neighboring areas and in part is likely to have been the impetus for community participation in FD activities at reduced rates and for free in the subsequent years. 192 Water flow in the rivers, which is inextricably linked to watershed management, is fundamentally important to the farming communities surrounding Hombe. This connection is appreciated and increasingly well-understood by the communities in Hombe. Water, more than the forest or any other natural resource, provides the means for communities to rise out of poverty in Hombe. This is because the Hombe area has much experience in farming, and Nairobi, the capital city, is an accessible market for all produce, both for direct consumption and for export. Thus, water availability and distribution are key to the future of Hombe. The trend of integrating watershed and forestry management needs to be continued and built upon by water, forest, and environmental officers. However, at the same time an economic analysis of the livelihoods made from farming needs to be contrasted with the potential economic returns from forestry. This leads to the question of whether some parts of Hombe should be converted to farm land, given the high pressures on existing farm land and on the communities from a long-term sustainability perspective. Approximately two-thirds of Hombe Forest is indigenous forest, but there is little information on the integrity of the cover (the state of the forest canopy) or the different species that exist in Hombe. Thus, trying to assess its value from a biodiversity perspective is difficult without further detailed information on the extent of the indigenous forest cover and the variety of species and their uses. It can therefore be surmised that the local communities do not currently obtain any direct benefits from maintaining the biodiversity of Hombe. Their benefits accrue from indirectly from maintaining the catchment under forest cover for their water supplies. The Serena Mountain Lodge depends upon the forest cover for its sustainability. However, what is not clear is whether there is any distinction by tourists between the indigenous and exotic forest cover. In contrast, ecotourism is an evolving niche market that is dependent on the indigenous flora and fauna of Hombe. However, the communities of Hombe are still trying to establish ecotourism ventures and benefits have not yet been realized. SECTION 5. LIMITATIONS OF THE CASE STUDY Three limitations were identified: • Culture. The culture of Hombe enabled its communities to engage in participatory forest management. Communities with different cultures are expected to react differently to participatory forest management. This is a major limitation in using the Hombe case study at a national level. • Representativeness. Hombe is a montane forest and may not be representative of other types of forests, for example, mangrove or dry land forests. • Forests under different legal status in Kenya. Hombe Forest has always been under FD jurisdiction, which in many ways results in simpler lines of management. Other forests in Kenya are under local authority and trust land jurisdiction. With more partners, the overlaps of mandates and management are likely to be more complex. 193 SECTION 6. LESSONS LEARNED AND RECOMMENDATIONS Table A8.6 summarizes the key lessons learned at Hombe and resulting recommendations. Table A8.6 Key Lessons Learned and Recommendations Type of Issue Key Lessons Learned Recommendations Governance • Management capacity is • Develop capacity to prepare and lacking in forest stations management plans at local Institutional • Local communities are community and forest station willing to participate and are levels in a participatory way. registering forest associations in anticipation • Strengthen FD forest stations of implementation of the to enable them to operate Forests Act; however, they effectively. have inadequate capacity to enable them to participate • Though most CFAs and fully and conflicts of interest private sector interests are may affect their focusing on commercial cohesiveness. plantation, this focus should • Participatory forest be broadened to integrate management capacity at the forestry management with FD is lacking and at Hombe, other activities, such as community associations ecotourism, beekeeping, and seem to be ahead of the FD the like. in participatory forest management. • The FD should work out • On plantation management, participatory forest the Hombe case study management methods that suggests that it would be will enable officers in the field necessary for the CFA, the to identify associations with KFS, and the private sector which to work. These to discuss partnership methods should recognize alternatives. forest user groups as the backbone to forest associations. • There should be clear guidelines and criteria for awarding concessions. The Timber Manufacturers Association can play a role in this area. One condition that may be applied is to ensure that companies given concessions have the capacity (financial and technical) to engage in timber processing so as to ensure high recovery and product value adding. 194 • The FD and the KWS should formalize a working arrangement that will allow local communities to use forest resources in double gazetted forests. • The new KFS officers require training in management, management planning, participatory forest management, allocation of financial resources, budgeting, and the new Forests Act 2005. • Immediately after the formation and mobilization of the KFS, it is imperative that there be clear direction on implementation of the new Forest Act 2005. Rules and regulations on details of the act, such as benefit sharing, urgently require elaboration. It is further recommended that a number of pilot projects and models be tested on benefit sharing and other details in the act. This will prevent the KFS from being locked into rules and regulations that are established early on but that have not been adequately tried and tested (this is a potential mistake of NEMA). Furthermore, draft rules and regulations enable the various stakeholders—CFAs, the private sector, and others—to implement projects within much shorter time frames, thus enabling the forest sector to progress and avoid continuing stagnation. Draft rules and regulations can always be amended through legal procedures. Financial • Funding level at station level • Management of funds will be limits forest sector devolved to forest stations development. once the act is implemented. 195 Accounting procedures for • Most forest station transparency should be put in infrastructure is dilapidated, place at the station level. calling for huge investments. Currently, such procedures are lacking even at the • In the absence of clear district level because the FD benefit-sharing mechanisms, does not have its own local communities are accountants. coming up with high expectations. • Forest station infrastructure, including buildings, should be • One of the lessons learned improved. from NEMA is that funds should be allocated to all the • NEMA, in its role as the organs created by the act. coordination body on The ones under NEMA are environmental issues, underfunded, for example, urgently requires only 2 percent of funds strengthening, particularly allocated to NEMA go to through the provision of districts. financial resources, but also through devolution of power • Financial analysis indicates to both provincial and district that Hombe forest station is levels and training on capable of sustaining its negotiation and conflict operations from revenues resolution. generated. • For potential losers from implementation of the new Forests Act 2005, such as small-scale private saw millers, mechanisms can be put in place to specifically target them, such as micro finance and other direct financing opportunities. Financial institutions that are providing large-scale private sector operators with finance and investment should be encouraged to form specialized funds for small- scale private operators to readily access. These could potentially be extended to CFAs. Social • Adoption of participatory • Priority should be given to forest management and settlement of victims of forest formation of community evictions at Hombe and other associations is varying forest areas. Forest among regions on the basis encroachment issues should of incentives. There are be handled in a well- some forest areas, coordinated approach to especially in Western, ensure that human rights 196 Nyanza, and Coast issues are addressed. The provinces, where forest- forest management lead based incentives to enable agencies, such as the FD, community involvement are local county councils, and the li mited. In such areas the Ministry of Lands, should KFS will still play the major work as a team on this. role in forest management. • Working conditions of FD • The Hombe Forest case staff should be improved. shows that emerging CFAs should ensure protection of • The ban on timber harvesting traditional user rights and should be lifted once the act the rights of disadvantaged is gazetted for groups, and this should be i mplementation. streamlined in their constitutions. • Poor working and living conditions of FD staff result in lack of motivation. • The ban on timber harvesting has negatively affected the saw milling industry and livelihoods of people employed and supported by the industry. Environmental • Environmental issues and • Strengthen NEMA at matters are poorly provincial and district levels. coordinated as a result of li mited resources provided to • Invest in management of NEMA staff at provincial and indigenous forest for the role district levels. it plays as an important catchment area, wildlife • Local communities are habitat, and tourism. aware of the role played by the forest, for example, • Ensure planting of the right acting as a wind break, and trees in water catchment assisting in provision of areas. Some eucalyptus water; hence the community trees are wrongly sited at at Hombe is actively Hombe. involved in its conservation. 1 97 SECTION 7. CONCLUSIONS Hombe case study is not characteristic of the majority of forests and neighboring communities in Kenya. It is a unique case study that provides far-reaching insights into the plethora of social issues involving CFAs in the management of Kenya’s forests in the future. Thus, from the social perspective the lessons learned are many and can provide policy makers with opportunities to assist in the drafting of rules and regulations to operationalize the Forests Act 2005 and pilot various models and ideas with CFAs. The analysis of Hombe from an environmental perspective provides lessons that are likely to be broadly similar across the country. It is likely that there will be overlaps in mandates and management of watersheds, forest areas under dual gazettement, and management for biodiversity and the country’s gene pool. However, solutions through NEMA and harmonization of the different ministries and lead agencies are feasible with sufficient resources. Hombe forest station can be self financing but for its revenue goals to be achieved more inputs are needed to enable efficient revenue collection, resource assessment, and resource management. Hombe as a case study is clearly limited in application of the lessons learned to forests under varying jurisdictions in Kenya. Some of Kenya’s forests lie within local authorities or trust land. Thus, it is recommended that a future case study be focused on the arid to semi-arid forests in Kenya, where issues of local authority and trust land can be further explored in combination with the dynamics of different communities. The Hombe case study indicates that with proper rules and regulations most stakeholders will benefit from implementation of the act, but the KFS as custodian of the forest will act as the “big brother.� However, the Hombe case study also clearly shows that small-scale sawmillers will lose out because of capital requirements and efficiency. In the absence of community cohesiveness, local communities will also lose out in certain areas because the KFS may not enter into any partnership with community associations that are not strong and representative. On the issue of awarding concessions to the private sector, the major challenge as shown by Hombe is engagement of the private sector in management of plantations previously established by communities through informal arrangements with the FD. There are also issues surrounding district resources, whereby politicians are against allocation of forest plantations to private sector interests outside their districts. One way to handle this situation would be to make sure that those private enterprises make some payments for development purposes to those districts that are home to the resources. Annex A8.1 Population Projections Administratively, Hombe is in the northeastern part of Nyeri district in Mathira division, Ruguru location, and it lies in three of the current four sublocations, namely Sagana, Iruri, and Ruturu. population 1974 — — 25,775 12,275 7,454 6,046 population estimate 1974 area 3,284 — 71 29 24 18 (km 2 ) 1979 — 127,359 26,408 — — — population 1979 area — 324 89 — — — (km 2 ) 1994 — 179,654 — — — — population Nyeri Mathira Ruguru Kiamariga Sagana Iruri Ruturu district division location sublocation 1999 677,216 — 16,501 4,486 3,960 3,911 4,144 census population 2 Area (km ) 3,266 389 32 8.8 _ 8.1 6.9 8.2 Population 202 388 516 510 489 567 505 density (population per km 2 ) Number of — — 4,121 1,090 1,118 943 970 households Source: FRR 2007. Note: — = Not available. Table A8.1.1 illustrates the population census information extracted from the various censuses and DDPs. Historically, it can be seen that Nyeri district has remained approximately the same size, but Ruguru location and the sublocations have almost halved in size over the years. An additional sublocation has been added and the names have changed with the exception of Kiamariga. This explains the apparent contradiction in population projections between 1969 and 1999. Furthermore, the DDPs indicate that in 1974–8, Mathira division was only subdivided into 5 locations and 36 sublocations. In the 1989–93 DDP, the number of sublocations increased from 36 to 38. In the 1994–6 DDP, the number of locations increased to 7 and the number of sublocations to 41. In the 2002–8 DDP, the number of sublocations decreased to 37. 2 In 1969, the average population density was calculated to be 108 people per km (DDP 1979–83). In 1969, the proportion of the population that was said to be rural was 96.6 percent but this figure dropped to 93.8 percent in 1978, implying relatively high rates of urban migration. The working population amounted to 42.3 percent of the total. During this plan period, the national poverty line was stated to be K Sh 2,000 per family per year, but the plan did not contain any information on predictions of the number of households or people living below that line. In the 2002–8 DDP, the population density for the three sublocations varies between 489 and 2 567 people per km . The rural population for the whole of Nyeri district for 2002 is calculated at 499,152 people, while the urban population is calculated to be 178,064. Thus, the proportion of people said to be rural has decreased to 70 percent, with about 30 percent 199 living in the urban centers. The working population has increased to approximately 56.4 percent of the total. The number of people living in the district below the absolute poverty li ne is recorded as 206,700 or 31 percent of the district total. 200 APPENDIX 9 STAKEHOLDER RESPONSE TO THE POLICY ACTION MATRIX A third workshop was coordinated in collaboration with the Forest Secretariat Reform Committee to agree on priorities for action and to invite stakeholders to make commitments to delivering specific elements of the policy matrix. Before the start of the third workshop, participants were issued a short questionnaire and asked to give a response at the end of the discussion on each policy topic. For each topic, participants were asked to indicate whether they disagreed strongly (-2), disagreed (-1), were neutral (0), approved (1), or strongly approved (2) of the measures being proposed. A total of 32 completed questionnaires were collected at the end of the meeting but the number of responses to each individual question varied because attendance levels fluctuated through the day. On average, about 30 participants responded during the morning session with 24 to 25 present during the afternoon. Overall, the support for this five-hour exercise was extremely high. Responses to each recommendation can be analyzed by referring to the first five columns in the tables. The sixth column indicates the number of responses to each topic and the final column indicates the percentage of those responding who actively supported the measure (as opposed to those who might be neutral or not in favor). The results of this exercise are shown in table A9.1. Table A9.1 Stakeholder Responses to Policy Action Matrix PRIORITY 1 - PLANNING AND MANAGEMENT No of -2 -1 0 1 2 %age scores 1+2 Responses 1. Independence of KFS, Board and Director 1 10 19 30 96.7 2. Cooperation with other agencies 3 0 15 14 32 90.6 3. Strategic Plan for the Forest Sector 2 0 12 16 30 93.3 4. Role of different forest types 2 3 10 15 30 83.3 5. Accountability to stakeholders through annual reports 1 11 20 32 96.9 6. Engaging stakeholders in template / content of new forest 1 0 10 20 31 96.8 management p lans 7.1 Secure funding for forest sector for 5 years 1 2 11 18 32 90.6 7.2 Provide Budget for Strategic Plan 0 1 9 19 29 96.6 7.3 Donors to indicate which funding gaps can be filled 1 2 7 10 10 30 66.7 8.Improve staff morale 0 2 7 19 28 92.9 9. Provide assistance to FD staff who are made redundant 0 6 12 12 30 80.0 10. Create new group of professionals 1 2 4 10 12 29 75.9 11. Develop skills and awareness in community liaison 0 0 13 17 30 100.0 11.2. Three days training 2 3 8 13 4 30 56.7 12. Develop skills in dryland forest management 1 2 10 19 32 90.6 13. Create National Forest Data Bank 2 3 9 17 31 83.9 14. Roll out Pilot Studies 1 4 9 15 29 82.8 15 Approve National Forest Policy 1 1 7 21 30 93.3 16. Harmonise legal framework 1 2 15 11 29 82%T 17. Improve enforcement 2 3 8 18 31 83.9 PRIORITY 2 - ENABLING COMMUNITY PARTICIPATION No of AND BENEFIT SHARING -2 -1 0 1 2 %age scores 1+2 Responses 18. Increase public participation in forest issues 1 1 9 19 30 93.3 19. Prepare inventory of best practice in participation 1 2 15 11 29 89.7 20. Review arid and non-moist forest contribution to poverty reduction 1 3 5 19 28 85.7 21. Encourage participation of women and youths 1 3 9 16 29 86.2 22.1 Develop partnerships with RCFAs 0 4 10 12 26 84.6 22.2 Undertake capacity needs assessment 1 2 9 15 27 88.9 23.1 Identify full range of community benefits 1 1 7 18 27 92.6 23.2 Set up system of annual accounts 0 2 9 13 24 91.7 23.3 Develop forest-specific guidance notes on benefit sharing 0 2 6 17 25 92.0 24.1 Study nature and value of environmental services 1 4 10 13 28 82.1 24.2 Set up pilot study on charges for environmental services 1 3 13 11 28 85.7 25. Set up pilots of different partnerships for management 1 0 11 13 25 96.0 ENHANCING INVESTMENT IN THE FOREST SECTOR No of -2 -1 0 1 2 Responses %age scores 1+2 26.1 Develop investment strategies for each CFA 0 10 14 24 100.0 27.1 Review training programmes for manufacturing and marketing 1 3 10 8 22 81.8 27.2 Explore levy on royalties to support training 1 1 7 9 8 26 65.4 28.1 Prepare model concession contracts 2 9 13 24 91.7 28.2 Prepare internal guidelines on contracts 1 9 13 23 95.7 28.3 Undertake pilots on model contracts and concessions 1 5 6 11 23 73.9 28.4 Apply model conditions to KFS State Forests 4 12 8 24 83.3 28.5 Publicise standard arrangements 1 1 7 14 23 91.3 29.1 Publish all contracts once terms are agreed 0 11 11 22 100.0 30.1 Develop framework for incentives 2 8 15 25 92.0 31.1 Introduce rules for private owners 1 1 2 8 11 23 82.6 32.1 Develop regulatory framework 4 8 13 25 84.0 32.2 Develop criteria on inadequate management 3 8 13 24 87.5 32.3 Introduce rules for sharing benefits with local communities 1 0 6 16 23 95.7 32.4 Introduce clear rules on private forest management 2 1 4 10 8 25 72.0 33.1. 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