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MOBILISING EUROPEAN RESEARCHFOR DEVELOPMENT POLICIES
ON
E U R O P E A N R E P O R T
DEVELOPMENTOONN
Managing the Water–energy–Land (WeL) nexus for incLusive and sustainabLe groWth. a case study of fLoWer production around Lake naivasha.dr Wilfred nyangena, University of Nairobi and dr dirk Willem te velde, Overseas Development Institute
MaNagINg the Water–eNergy–LaND (WeL) NexUs fOr INcLUsIve aND sUstaINabLe grOWth. a case stUDy Of fLOWer prODUctION arOUND Lake NaIvasha.
synopsis
this paper discusses how an integrated approach towards managing the water–energy–land (WeL) nexus in Lake Naivasha in kenya can help to ensure the continued contribution of flower farms to inclusive and sustainable growth.
ON
E U R O P E A N R E P O R T
DEVELOPMENTOONN
2
3
This paper served as a background paper to the European Report on Development
2011/2012: Confronting scarcity: Managing water, energy and land for inclusive and
sustainable growth. The European Report on Development was prepared by the
Overseas Development Institute (ODI) in partnership with the Deutsches Institut für
Entwicklungspolitik (DIE) and the European Centre for Development Policy Management
(ECDPM).
Disclaimer: The views expressed in this paper are those of the authors, and should not
be taken to be the views of the European Report on Development, of the European
Commission, of the European Union Member States or of the commissioning institutes.
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
4
Acknowledgements
This is a background paper for European Report on Development 2011/2012 Confronting
scarcity: managing water, energy and land for inclusive and sustainable growth (ERD). This
Report is funded by the EU and seven member states. We are grateful to comments from
participants at the DSA/EADI Conference held in York in September 2011 and for suggestions
from the ERD team.
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
5
Contents
Acknowledgements 4 Contents 5 Tables & figures 6 Abbreviations 7 Executive Summary 8
1 Introduction 9
2 The quality of ecosystem services as a major factor for flower farms 10
3 The importance of flower farms for inclusive and sustainable growth 13
4 The Water–Energy–Land nexus in the Naivasha basin 17
5 Managing the WEL nexus: the role of different actors 19
5.1 Flower farms and their associations 19 5.2 Other institutions 22 5.3 Government 23 5.4 International actors 24
6 Conclusions 26
References 27
Appendix I: Payments for Ecosystem Services in the Naivasha Basin 29
Appendix II: Further suggestions 31
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
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Tables & figures
Tables
Table 3.1 Naivasha’s domestic economy compared with the Kenyan economy (KSh millions) 14
Figures
Figure 2.1 The Naivasha basin 10 Figure 2.2 Forest cover in the Lake Naivasha Basin 1973–2008 11 Figure 3.1 Value of EU imports of roses (€) 14
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
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Abbreviations
AWS Alliance for Water Stewardship
CSR Corporate social responsibility
DSA/EADI Development Studies Association/European Association of Development
Research and Training Institutes
EAC East African Community
EPA Economic Partnership Agreement
EPWS Equitable Payment for Watershed Services
EPZ Export-processing zones
ERD European Report on Development
ETI Ethical Trading Initiative
EU European Union
FLP Flower Labor Programme
FOMAWA Friends of Mau Water Catchment
FPEAK Fresh Produce Exports Association
GAP Global Good Agriculture Practices
GDP Gross domestic product
GPS Global Positioning System
GSP Generalized System of Preferences
GWh Gigawatt-hours
GWh Gigawatt-hours
HEBI Horticultural Ethical Business Initiatives
ICIPE International Centre for Insects and Physiology and Ecology
ILO International Labour Organization
KFC Kenya Flower Council
KSh Kenya Shillings
LANAWRUA Lake Naivasha Water Resources User Association
LNGG Lake Naivasha Growers Group
LNRA Lake Naivasha Riparian Association
MFN Most-favoured-nation
MW Megawatts
MW Megawatts
NGO Non-governmental organisations
PES Payment for ecosystem services
SGS Société Générale de Surveillance
SWM Solid waste management
UNDP United Nations Development Programme
WEL Water, energy and land
WRMA Water Resources Management Authority
WRMA Water Resources Management Authority
WRUA Water Resources User Association
WWF World Wide Fund
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
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Executive Summary
The future of one of the most successful and rapidly emerging industries in Africa is dependent
on the management of a relatively small river basin. Kenya’s cut-flower industry, clustered
mainly around Lake Naivasha, has been praised as an economic success for its contribution to
gross domestic product (GDP), foreign exchange earnings and employment. On the other
hand, the treatment of Lake Naivasha as a free ‘common pool’ resource threatens its
sustainability and the activities dependent on it. There is therefore an urgent need for
sustainable management of the water resources of the Lake Naivasha basin.
The situation is complicated by the fact that there are different users of the lake in different
locations and in different sectors. Land-use changes upstream (deforestation and greater need
for fuelwood) affects the availability of water downstream; the production of geothermal
energy downstream requires water and affects land use; flower farms downstream withdraw
water and require energy services; tourism depends on the reliable quality of water resources.
This is an example of how water, energy and land (WEL) resources are interrelated such that
use of one resource affects the other: we call this the WEL nexus.
Various initiatives on the part of flower farms, local government and institutions, international
actors, and small-scale agricultural users aim to manage the WEL nexus in the Naivasha basin.
Flower farms have reduced their environmental footprint, improved water efficiency and
introduced renewable energy projects. The Kenya Flower Council (KFC) has designed codes of
conduct. Various institutions have begun to implement new initiatives, and politicians – even
the prime minister – are committed to ‘restoring’ Lake Naivasha. Integrated WEL-nexus
thinking about the importance of the cut-flower industry is leading to innovative solutions to
manage natural resources. One such solution is payment for ecosystem services (PES)
whereby downstream users pay upstream users for sustainable land-use practices.
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
9
1 Introduction
This paper discusses how an integrated approach towards managing the water–energy–land
(WEL) nexus in Lake Naivasha in Kenya can help to ensure the continued contribution of flower
farms to inclusive and sustainable growth. The Naivasha basin supports a number of economic
activities ranging from agriculture, to tourism, geothermal energy production and the cut-
flower industry. The availability of good quality water, a good climate and good transport links
has attracted flower companies to the region. Flower production has transformed the Naivasha
region since the 1960s. It currently contributes 10% to Kenyan foreign exchange revenues
(supplying 20% of all roses sold in the EU), 2% of GDP and generates work for 2 million
people (workers and dependants). Employed in a large number of formal and indirect jobs,
these workers earn more than most of Kenya’s labourers. Yet at the same time, there are
considerable environmental pressures due to the behaviour and land-use changes of upstream
users and the very success of the sector.
The future of one of the most successful and rapidly emerging industries in Africa is therefore
dependent on the management of a relatively small river basin. The situation is complex
because there are different users from different locations in different sectors. Land-use
changes upstream (deforestation and the use of wood to provide energy) affect the availability
of water downstream, the production of geothermal energy downstream requires water and
affects land use, flower farms downstream withdraw water and require energy services, and
tourism depends on quality water resources. This is a perfect example of how water–energy–
land resources are increasingly interrelated whereby the use of one resource affects the other:
we call this the WEL nexus. Several public and private actors have underscored the need for a
nexus perspective in analysing complex natural resource problems, e.g. focusing on the food–
water–energy nexus (e.g. Allan, 2011; Shell, 2011). This paper examines whether an
integrated nexus perspective can help to identify innovative solutions so that the flower
industry can continue to contribute to inclusive and sustainable growth.
The paper is structured as follows. Section 2 discusses how the quality of ecosystem services
has become one of the major factors for flower farms to locate in Naivasha area. Section 3
reviews the importance of flower farms for inclusive and sustainable growth. Section 4
discusses the difficulty of the complex links of the various users of the WEL-nexus resources.
Section 5 analyses business initiatives to manage natural resources and Section 6 examines
what initiatives are being considered to manage risks and realise the opportunities. Section 7
draws out the conclusions.
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
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2 The quality of ecosystem services as a major factor for flower farms
Lake Naivasha clearly illustrates the importance of the quality of ecosystem services as an
important factor for flower farms. The basin is one of Kenya’s most fertile agricultural regions.
As a result, economic activity, especially floriculture, is increasing. The flower industry provides
economic benefits but also makes greater demands on ecosystem services: the industry and
the settlements of workers depend on lake water for geothermal energy, household water,
irrigation, discharge management and fishing. The Lake Naivasha basin is considered a very
attractive area as it supports various additional economic activities. Its unique ecological basin
and biodiversity have attracted various sectors of the economy such as tourism and
agriculture, including high-value commercial vegetable farming, as well as renewable sources
of energy.
Floriculture is one of the fastest growing economic sectors in sub-Saharan Africa. Kenya’s
flower industry is centred in the Lake Naivasha basin and occupies about 2,000 ha, of which
1,200 ha are under greenhouses. The Naivasha basin and upper catchment area is shown in
Figure 2.1 below.
Figure 2.1 The Naivasha basin
Source: WWF (2011)
Lake Naivasha provides freshwater to the Rift Valley region. This, among other factors, is what
has attracted so many flower farmers since the industry requires a high and reliable water
supply for irrigation purposes. In addition to the lake there are also underground aquifers,
which the farms drill for irrigation, and large tracts of land with favourable and fertile soils for
flower production that require little fertilisation. This combination of factors has attracted many
floriculture investors into the region.
The upper catchment, which consisted of indigenous forest and open woodland, has undergone
significant changes over the past 50 years as the forest has been converted into rain-fed
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
11
smallholdings. This has had a direct impact on water resources. The northern and eastern
catchments have placed considerable pressure on the lake’s natural resource base. Given the
small size of the plots, farmers cannot exercise crop rotation and diversification, with the
resulting loss of land productivity (Githaiga, 2008). This is exacerbated by a growing
population, which leads to further land sub-division and deforestation (Kut and Agevi, 2007).
This deforestation has had a marked effect on the hydrology of the basin as flows have
become more extreme with intense flooding in the wet season and low volumes in the dry
season. This rapid runoff has led to siltation, while concerns about water quality have been
compounded by the failure to observe soil- and water-conservation practices due to poverty
and overgrazing in the upper catchment. The use of fertilisers to improve yields and the
farming and overgrazing of riparian areas has increased siltation and nutrient loads. The
situation is aggravated by the increase in subsistence farming even on steep slopes right down
the river edge (Everard et al., 2002). It is estimated that the Malewa and Gilgil rivers currently
discharge approximately 7 million tons of sediment into Lake Naivasha each year. This reduces
the depth of the lake and ecosystem functioning (Otianga et al., 2006).
Figure 2.2 Forest cover in the Lake Naivasha Basin 1973–2008
Source: WWF (2011)
The Naivasha basin includes a cluster of other key actors related to the flower industry (see
Bolo, 2007). These include research institutions, breeding farms, quality control and regulatory
agencies, input suppliers, credit and finance institutions, trade promotion agencies and other
intermediary organisations. These assist growers to produce quality flowers and ensure that
the flowers are sold and marketed effectively while promoting inclusive and sustainable
growth.
The quality and quantity of the water have deteriorated significantly and other water users
such as the Maasai pastoralists have been displaced, and now have only limited access to the
lake. According to Becht and Harper (2002) and Becht et al. (2005) the recorded levels of the
lake have fluctuated significantly. The reduction in quantity has been mainly caused by
evaporation and unsustainable human activities in the basin. The deterioration of water quality
as a result of the inflow of nutrients may be attributed to commercial farms and farm activities
in the upper catchment. KItaka et al. (2002) and Gitachi (2005) show that a large nutrient
load originates from the upper catchment through surface runoff. The upper catchments, which
were originally covered by indigenous forest and open woodland, have undergone significant
changes in land use as the forest has been converted into rain-fed smallholdings. This has a
direct impact on water resources. Climate change as well as the deterioration of ecological
quality and quantity could seriously challenge the future of the flower industry. The lake is
polluted with agro-chemicals and is also heavily drained.
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
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The lake faces a range of water-quality issues stemming from increasing nutrient loads such as
nitrogen and phosphorous, increasing siltation, and growth in the level of pathogens and
viruses from the inadequate treatment of sewage (either from the municipal sewage facility,
surface runoff or through seepage from pit latrines). There is also increasing evidence of heavy
metal (iron, cadmium and lead) and pesticide contamination (Otianga-Owiti and Oswe, 2008).
The destruction of papyrus surrounding the lake due to the expansion of agricultural and
human settlements has removed an important natural filter that helped to reduce siltation.
This situation is compounded by falling lake levels, which open up the riparian zones for
grazing by cattle and wildlife. The decline in papyrus leads to increasing through-flows from
the catchment to the lake, which brings in more sediments, nutrients and other organic
material (Lake Naivasha Water Resource Management Programme, 2007). It is estimated that
the Malewa and Gilgil rivers discharge approximately 7 million tons of sediment into Lake
Naivasha, of which an estimated 20% is organic matter. Sedimentation reduces lake depth,
destroys aquatic habitats such as fish-breeding grounds and diminishes the flood control
capacity of the lake.
This deterioration of the lake water quality, quantity and ecosystem services leads to
secondary risks such as reputational loss, withdrawal of existing investments and loss of
potential investment in the future. The potential consequences include job losses, loss of
foreign exchange earnings and withdrawal of crucial investors. It is paramount, therefore, that
the government, business and civil-society stakeholders make an appropriate and constructive
response to the threats to inclusive and sustainable growth. Flowers are an important export
for Kenya. Losing the cut-flower business would mean that many workers and their
dependants lose everything. In addition, the treatment of Lake Naivasha as a free ‘common
pool’ resource will be at the cost of its sustainability and the corporate image of the
commercial farms. It is therefore essential to manage the water resources of the Lake
Naivasha Basin in a sustainable way (Mekonnen and Hoekstra, 2010).
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
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3 The importance of flower farms for inclusive and sustainable growth
In this section, we examine the economic, social and environmental effects of flower
production around Lake Naivasha.
Economic effects
Horticulture has transformed the Naivasha basin. Cut flowers are an important export for
Kenya. The cut-flower industry generates approximately 11% of Kenya’s total foreign
exchange revenue, totalling about 27.8 billion Kenya Shillings (KSh) (Economic Survey, 2009;
WWF Report, 2011). Naivasha’s local GDP is estimated to be in the order of KSh 40 billion
(US$570 million) and its contribution to the Kenyan economy can be estimated to be at least
KSh 59 billion (US$830 million). Lake Naivasha accounts for more than 70% of the country’s
cut-flower exports and 20% of vegetable exports.
Naivasha’s flower industry began in earnest in the 1980s and grew rapidly in the 1990s. Now
there are dozens of large farms, and Kenya has become Europe’s chief supplier of fresh cut
flowers. One in three roses sold on Valentine’s Day comes from Kenya, most of them grown on
the shores of Naivasha. The Kenya Flower Council (KFC) estimates that Kenya is the largest
supplier of cut flowers to EU markets, accounting for about 25% of the EU flower imports
ahead of Colombia (17%) and Israel (16%).1 Annually, Kenya exports over 60,000 tons of
flowers to EU markets: over 65% to the Netherlands while the rest is exported to other
European countries such as France, Germany, Switzerland and the UK. The flowers include
roses, which account for over 70% of the exports, statice, carnations, hypericum, alstroemeria
and eryngium among others.
According to the KFC, the Naivasha basin generated approximately US$400 million of Kenya’s
total foreign exchange revenues in 2008. Some 45% of the revenue generated by floriculture
is spent on production costs, suggesting that the sector’s contribution to the local communities
living in the Lake Naivasha basin is approximately US$180 million. The income improves the
economy of the area, which has contributed to its growth and development.
The agricultural sector directly accounts for about 40% of Naivasha’s local economy, and most
trades and services are directly or indirectly linked to the sector, e.g. providing goods and
services or supporting farm workers. The contribution of agriculture to Naivasha’s local
economy is likely to be about 75%.
1 Kenya Flower Council Website accessed on 25-8-2011
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
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Table 3.1 Naivasha’s domestic economy compared with the Kenyan economy (KSh millions)
Naivasha Kenya
Local GDP*
Contributions to Kenya’s
GDP
Contributions to export earnings
GDP** Export
Flowers 12,000 27,800 27,800 39,766 39,766
Vegetables 2,750 6,650 3,200 62,000 16,128
Tourism and Accommodation 600 600 <200 23,755
Construction and manufacturing 2,000 2,000 303,488
Energy 2,800 2,800 30,805
Trade and Services 10,000 10,000 421,012
Government 4,000 4,000 288,817
Others (Health, Transport, Education etc.)
5,250 5,250 612,364 266,706
Total 40,000 59,100 31,000 1,852,263 322,600
Per capita Income 62,500 54,895
Sources: Economic Survey, 2009: WWF, 2011
A threat to the economic sustainability of the cut-flower industry is linked to prospects in the
European markets, since these markets account for over 95% of Kenya’s flower exports. A
survey conducted by the Promotion of Imports from Developing Countries (CBI, 2005) found
that most European markets including France, Germany, Italy and the Netherlands, were
showing clear signs of market saturation, although demand for cut flowers was still increasing
in the UK. Exports from countries such as Ethiopia and Peru are causing stiff competition, even
if Kenya still supplies around half of EU imports of roses. Figure 3.1 suggests that Kenya was
affected more by the crisis than its competitors.
Figure 3.1 Value of EU imports of roses (€)
Source: Eurostat COMEXT database
Another blow to the cut-flower industry is the replacement of the Lomé IV trade preferences
with the Cotonou Economic Partnership Agreement (EPA). The Lomé IV trade preferences gave
Kenya preferential market access to the EU to help develop the industry. The EPA, which is still
being negotiated in Kenya, could bring to an end such treatment and expose Kenya to fierce
competition from new flower producers in Ethiopia, Uganda and Tanzania. The over-reliance on
the European market represents a serious threat to the economic sustainability of Kenya’s cut-
flower industry since the fact that the produce does not currently face tariffs in the EU market
is no guarantee for the future. Kenya has not yet signed an interim EPA, but together with
0
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
All EU imports
EU imports from Kenya
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
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other East African Community (EAC) states it initialled the interim EPA at the end of 2007,
under EU pressure to avoid disruption to exports. Since then the EAC has not signed an EPA. If
the EPA is signed, Kenya will not face any tariffs on roses while it remains in the EPA.
However, if the talks break down, or if the EU decides to force the pace by threatening to
withdraw the autonomous preferences, then Kenya would have to export on Generalized
System of Preferences (GSP) terms (a tariff of 8.5%) or the Most-favoured-nation (MFN) rate
(12.5%) if it graduated out of the GSP.
Social effects
The cut-flower industry has positive and negative social effects. Recent World Wide Fund
(WWF) estimates (2011), based on the Economic Survey (2009), place the GDP per capita at
KSh 62,500 compared to the national average of KSh 54,895. Table 3.1 illustrates the sectoral
contributions to GDP in Naivasha and locally. Floriculture employs between 50,000 and 60,000
people directly, and a further 500,000 indirectly through affiliated services, e.g. farm inputs,
transport, packaging, banking. If each worker has four dependants, then a total of some 2
million people – about 7% of the entire population – depend on the industry. Naivasha is also
attractive from the perspective of job creation. The ratio of formal employment to population is
about 8.3% compared to the national average of 5.1%, and this does not include the self-
employed on smallholdings (Mekonnen and Hoekstra, 2010; WWF, 2011).
The cut-flower industry has helped to reduce poverty in Kenya. Local communities in the Lake
Naivasha basin were living in poverty despite being surrounded by natural resources. The
flower farms have provided job opportunities, which translate into better living standards.
Some of the largest farms employ more than 10,000 workers each, many of them women.
Households that are involved in export horticulture can now afford education and enjoy good
health and balanced meals, among other essentials. The Kenya Poverty Mapping (CBS, 2003),
based on Population and Housing Census data, suggests that people living near to the flower
farms around Lake Naivasha tend to be relatively well off, since the incidence of poverty there is between 30% and 40% compared to a national level that is well above 50% (IMF, 2005).
There have been some reports of labour problems in the cut-flower industry. The sector relies
heavily on temporary workers, which affects income and job insecurity. Smith et al. (2004)
found that 65% of the workforce in the Kenyan flower industry was temporary, seasonal or
casual. Casual labour rises during the annual production peaks, e.g. Valentine’s Day,
Christmas, Mothers’ Day (Lawrence, 2010).
Anecdotal evidence suggests that women workers face problems such as sexual harassment,
compulsory overtime and job insecurity. Similar claims have been made in the textile and
clothing export-processing zones (EPZ). Given the nature of the accusations very few women
make public complaints, but there have been reports of improvements in health and safety
with the enactment of new codes of practice.
The growth of the sector has also displaced some population groups. The Maasai traditionally
grazed their cattle along the lake’s banks. Their access to the lake is now restricted because
flower farms own much of the surrounding land. Poorer local people are left line up to get their
water from communal taps. Maasai cattle herders can bring their cows only to the small
section of the lake where there is still public access. Even there the water is polluted, which
endangers the health of their cattle. There used to be a fishing industry around Lake Naivasha,
feeding the local people and supplying nearby towns. This has finished, and those who used to
depend on fishing went to work on the flower farms. There are two reasons for this trend.
First, was the massive death of fish, which many attributed to poisoning by the agrochemicals
emitted by the flower farms. Second, it is likely that it paid better to work on the flower farms.
Environmental effects
Several individuals, environmental bodies and NGOs have expressed concern not only about
the health hazards involved in flower production but also about the environmental problems
caused by the flower industry and also to Lake Naivasha as an important natural resource. The
farms rely on the lake for irrigation, and pipes run straight from the lake into the greenhouses.
The lake is being drained faster than it can be replenished, and water levels have dropped over
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
16
time. This is bad news for the declining hippo and bird populations, but also for the farmers
and the Kenyan economy.
A rising population also presents major environmental challenges. In 1969 7,000 people lived
around the lake. Today there are over 300,000, but infrastructure has not kept pace with
growing demands. According to the 2009 census, the total population of the basin was
estimated to be 650,000 (compared to 237,902 in 1979), of whom approximately 160,000
people lived around Lake Naivasha itself. Between 1989 and 1999 the population of the basin
grew by 64%, although this has since slowed down to about 13%. The population pressure on
the Naivasha basin has spread across the catchment. There are 28 settlements in the basin
with population ranging between 5,000 and 50,000. The five largest divisions are Hell’s Gate
(64,000), Gilgil (45,000) Engineer (45,000), Naivasha Town (45,000), Kinangop North
(40,000) and Ndundori (35,000).
Lake Naivasha has been a Ramsar site since 1994 and a habitat to important wildlife and bird
populations. Its ecological and hydrological characteristics have attracted the attention of
many scientists to conduct ecosystem studies. The lake and its catchments are also considered
to be environmentally sensitive and the flower industry is known to have had a profound effect
on these areas. Farming in the lake basin has evolved from sisal farming and livestock rearing
to flower farming. Floriculture now accounts for approximately 4,000 ha. This change in land
use encouraged more people to come to the area in search of work, which further increased
the pressures on Lake Naivasha and the surrounding resources. According to Harper (2004)
and the Council of Canadians (2008) the main pressures on the lake include water
abstractions, agrochemicals and sewage pollution, destruction of papyrus (riparian habitat),
over-fishing and soil erosion. There is a change in fish species from predominantly tilapia to
carp, which is less prized and so generates less income (Hickley et al., 2004).
A major question facing the floriculture industry around Lake Naivasha is what constitutes a
sustainable level of water abstraction for them and for upstream users. The current water
extraction is not sustainable2 (Harper, 2004). A code of practice has helped to regulate the use
of water and agrochemicals by the flower farms, although this does not deal with upstream
farmers. European markets have helped to create an enabling environment to sustain Lake
Naivasha and the natural resources by financing and assisting local initiatives. But the flower
producers face serious competition (the price per stem exported to the EU has remained at
US$0.10 for a decade), which forces them to reduce their costs by cutting investments in
initiatives and projects to improve environmental sustainability.
2 The cumulative impacts of users disrupts the necessary supply and quality of water, water scarcity occurs
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
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4 The Water–Energy–Land nexus in the Naivasha basin
The Naivasha basin sustains different users at different locations in different sectors. Just
consider the following linkages: land-use changes upstream (deforestation) affects the
availability and quality of water downstream, the production of geothermal energy downstream
requires water and affects land use, flower farms downstream withdraw water and require
energy services, bird tourism and fishing depend on quality water resources. These complex
interrelations illustrate a perfect example of the WEL nexus. We provide further illustrations of
WEL-nexus interrelationships below.
Land–water linkages
Commercial farms and smallholders in the Naivasha basin have an environmental footprint
which links water withdrawal, the use of land and the generation of renewable energy. The
Water Engineering and Management group estimates the water footprint of one rose bloom at
between 7 and13 litres. The total virtual water related to cut-flower exports from the Lake
Naivasha basin was 16 million m3/yr during the period 1996–2005. The total annual water
footprint for the basin is estimated to be 224,000m3. The total water footprint by the
commercial farms around the lake is approximately 66,500m3 compared to 139,000m3 for
smallholders in the upper catchment. Further industrial and residential use, including
geothermal energy, amounted to about 18,000m3 (WWF, 2011). Such estimates imply that the
hydrology and water quality of Lake Naivasha depend not only on commercial floriculture but
also on withdrawals for fuel and farming of the upper catchment areas (Becht and Nyaoro,
2005). This adds a level of complexity when designing solutions to arrest declining lake levels.
Over the past 100 years the water level has declined owing to a number of reasons:
Lake Naivasha is shallow and its large surface area leads to high rate of
evaporation, accounting for about 60% of the water output, while water
abstractions account for between 10% and 20%.
Climate change and reduced rainfall caused by drought and floods have been
attributed to high and low phases of solar radiation respectively.
Destruction of papyrus, which has declined in acreage from 1,200 ha to 200 ha
over the last 40 years (Lake Naivasha Management Plan).
Water transfer out of the basin via the Nakuru pipeline.
Deforestation in the upper catchment leading to erosion and siltation.
Abstraction (both surface and groundwater) by commercial flower and vegetable
farms.
Increases in unregulated water abstraction in the upper catchment. Groundwater
abstraction north of Lake Naivasha caused the natural water table to drop by more
6m (Becht and Nyaoro, 2005). In addition, the water quantities and levels of Lake
Naivasha rise or fall according to the seasons. The heavy rainfall in 1997–1998
increased the lake level by 3m.
The water used by smallholders to flood their crops in the upper catchment areas may be
perceived as a direct opportunity cost to the commercial farmers needing water for irrigation
and vice versa. The direct use of lake riparian wetland areas for the cultivation of horticulture,
cattle ranching and game during drought periods may be perceived as having detrimental
consequences for the lake’s ecological functioning.
Since 1963, the Lake Naivasha basin has witnessed rapid change with the growth of
commercial farming and rapidly increasing smallholder settlements. It is estimated that the
total area under commercial irrigation around the lake is between 3,000 ha and 5,000 ha with
farm sizes of over 5 ha, in addition to flower farms of over 60 ha.
The commercial farms around the lake have attracted thousands of labourers and their families
to work in the greenhouses and the processing plants. The rising population has increased the
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
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pressure on forestry resources, specifically for firewood, charcoal, timber and other
construction materials. This further threatens environmental degradation by destabilising the
water table. Variation in recharge associated with land cover and land changes around the lake
can also affect groundwater quality because chemicals from the salinised soils are flushed into
the lake. The removal of vegetation cover on catchment areas has reduced water retention
capacity, and contributed to soil erosion, resulting in poor water quality and reduced soil
fertility.
Water–Energy linkages
Water in Lake Naivasha is used for the generation of geothermal energy. Approximately 19%
of Kenya’s electric power is generated from the geothermal power generation plants at
Ollkaria, which lies on the western part of Lake Naivasha (Economic Survey, 2009). There are
currently three geothermal projects with 128MW capacity, which generated approximately
1039 GWh in 2008. This electricity was worth some US$40 million in 2008. Geothermal energy
is considered to be more reliable than hydropower, which loses capacity when rainfall is scarce.
Given that so much of Kenya’s electricity is generated from hydropower, it is expected that
geothermal’s share of national electricity generation may reach 30%. If current rainfall trends
continue, it is possible that geothermal energy will take up an increasing share of national
electricity generation.
The exploitation of geothermal energy in Lake Naivasha affects land use in the basin as well as
the hydrology and water quality of the lake. The development of geothermal power requires
water especially at the initial stages. The geothermal well is drilled to a depth of 2,200m and
uses up to 100,000m3 of water per well until completion. Most wells in the Olkaria geothermal
field are deeper than 2,200m and thus their water consumption is high. There are also
concerns about the volumes of gaseous emissions from the plants, including oxides of sulphur,
nitrogen and carbon which are transformed into compounds that are deposited in the
ecosystem. These issues threaten the quality of Lake Naivasha and its environment (Nyakundi
et al., 2005).
Energy–Land linkages
Increased demand for household energy has contributed to the degradation of the Lake
Naivasha watershed. It is estimated that about 52% of the sampled households depend on
firewood and charcoal as the main sources of energy. Paraffin is used by over 30% of the
sampled households.
The wells in Olkaria are drilled using mud, which affects land use. The exploitation of
geothermal energy requires space for the powerhouses, infrastructure and housing for the
workforce. The infrastructure accompanying these developments includes power stations,
roads, steam-transmission pipes, water-transmission pipelines from Lake Naivasha and power-
transmission lines.
The intensity of land-use changes has affected the whole of the riparian reserve, even blocking
wildlife migration corridors. There were reported clashes between land users and local
communities who claim that the exploitation of the geothermal energy has affected their health
as well as their livestock because of the emissions (Verschuren et al., 2000; Nyakundi et al.,
2005).
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
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5 Managing the WEL nexus: the role of different actors
There is general recognition of the environmental challenges around the Naivasha basin, but
the coherent and proactive management of the water resources in the basin was limited during
the period of rapid development over the past two decades. There is widespread
acknowledgement that water and land management of the basin must improve, which will
require adequate institutional arrangements and resources. Investment and business decisions
work best in a regulatory and economic environment that is stable and predictable, in which
the rules are coherently and consistently applied, and supported by local, national and
international facilitators.
WWF (2011) discusses the nature of the risks related to the basin that require management.
These include risks to the large horticulture companies and their employees, outgrowers and
smallholders, local government and basin inhabitants, and the broader Kenyan economy and
foreign exchange. There are already a number of trade-offs and relationships in Lake Naivasha
and the surrounding ecosystem. These include:
Water quantity and water quality influence the viability of species of concern, fish
productivity and flower farms.
Irrigation of flower farms affects biodiversity.
Loss of biodiversity affects tourism and wildlife because it affects the habitat of
wildlife, e.g. hippos.
Tourism and population growth affect water quality because of the increasing
deforestation that has caused soil erosion and siltation.
Upstream small-scale activities and deforestation seriously affect water withdrawal.
Availability of good quality water affects where flower farmers decide to locate.
Flower farms face reputational risks for their environmental impact and hence may
lose export markets, licenses and access to finances.
Renewable energy requires water.
There is need to manage these risks and trade-offs. The realisation of opportunities will
depend on comprehensive and mutually supportive engagement among all land and water
users around the lake. Below we discuss the roles of the different actors.
5.1 Flower farms and their associations
Individual firms and business associations have responded to the environmental challenges
presented by the deteriorating quality of the Lake Naivasha basin. We focus here on the flower
companies who are the most visible players, but by no means the only or major ones.
Large individual farms
According to the Horticultural Crops Development Authority (HCDA) there are approximately
over 160 cut-flower growers in Kenya categorised as small scale (under 4 ha), medium scale
(between 10 ha and 20 ha) and large scale (over 50 ha). The industry is dominated by large-
scale and mainly foreign-owned companies, which produce about 97% of total exports. The
small-scale farms contribute only about 3% of flower exports because they lack the capital and
knowledge required for large-scale production and marketing. Most small-scale farmers focus
on growing summer flowers, whose production is less capital-intensive and does not require
sophisticated technologies. Most large-scale flower farms in Naivasha produce roses.
Floriculture depends on sustainable sources of water from the lake, which means that effective
water management protects the sustainability of the sector. In 2009, Lake Naivasha was in
crisis, having shrunk drastically after a prolonged drought, jeopardising the sector. A storm
washed untreated sewage from Naivasha Town as well as the chemicals residues from the
flower farms into the lake, killing fish and affecting the fishing industry. This crisis was a wake-
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
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up call for the flower industry and helped to accelerate efforts to make the area more
sustainable both for improved ecosystems and for the flower business.
Finlays
Flamingo (now Finlays) has invested millions of dollars in minimising its water use and
maximising recycling and rainwater harvesting. Over the past ten years it has reduced its
water consumption by 40% (Hepworth et al., 2011). It also acknowledges that cutting its own
water use is not enough if the wider needs are not tackled at the same time. Flamingo’s
director of sustainable business commented that Lake Naivasha had fallen to levels not seen
since the 1940s and it was time for the flower companies to engage beyond the farm gate
(KFC, 2008). All flowers are produced to Fair Trade standards in ways that promote
sustainable development.
Flamingo has reduced its pesticide use, especially the toxic class-1 chemicals. A code of
practice prohibits their use on the flower farms. Most pests are controlled by biological
methods, including ladybirds and other predators cultivated in the bug-harvesting
greenhouses. Biological pesticide control has also helped to improve the working conditions of
farm workers, who were previously affected by the toxic pesticides. Following the intervention
of trade unions, threats of consumer boycotts and bad press the company has reduced the
hours of work (Lawrence, 2010). Overtime became voluntary and permanent contracts were
issued to replace casual arrangements. Efforts were made to improve training, promote
women workers and supervisors and eliminate the widespread sexual harassment. The labour
force is no longer required to work extra hours although workers may agree to do so. The
company aimed to observe the Ethical Trading Initiative (ETI) of not letting overtime exceed
12 hours a week, and a routine audit by Marks & Spencer forced Flamingo to recruit more staff
(KFC, 2008; Lawrence, 2010). The wages and benefits of Flamingo workers are now above
average, although the agricultural workers’ union is still arguing for better distribution of
profits to the benefit of employees.
The Flamingo holding treats its waste water before it returns to the lake and helps to re-plant
trees so as to replenish the forests that had been cut down by the local population. To improve
infrastructure such as sewage systems, roads and other important social amenities the
horticulture farms in Naivasha agreed to pay a new tax to finance infrastructural improvements
(Ogodo and Vidal, 2007). Marks & Spencer supports a system to negotiate how all the groups
that depend on Lake Naivasha can share the water and cut back their use in periods of drought
or low rainfall. The groups include Maasai pastoralists, smallholders, fishing communities,
wildlife reserves and the big flower farms.
All production and processing in the flower industry observes Fairtrade standards and every
farm is Kenya Flower Council Gold Standard and Global Gap certified, is audited by
experienced NGO social auditors against the Ethical Training Initiative (ETI) base code and is
also compliant with other relevant national, international and customer standards.
Oserian
The Oserian development company is a flower business on the shores of Lake Naivasha, which
produces about 400 million stems a year. Oserian is a good example of how the geothermal
plant has benefited farms in terms of increasing yields, improving exports because of the low
carbon content, reducing pests and diseases, lowering production costs and helping to manage
water resources in Lake Naivasha, thus ensuring the sustainability of the flower businesses.
The company invested over €10 million in the geothermal plant some five years ago, which
enables the farm to hold about 3.8 million litres of water at 92°C. By doing this they can biw
produce more consistently high-quality roses with a reduced carbon footprint. For example,
they produce 350 stems per m2 per year compared to other farms that produce about 210
stems (Council of Canadians, 2008). All the water used is recaptured, recycled and converted
to steam, which has cut down consumption of lake water.
Oserian transports its flowers by sea, which its management claims takes about 25 days in
controlled-climate, sterile shipping conditions. Sea transport saves about US$0.2 a stem and
also improves the company’s carbon footprint, which is tracked by its biggest customer, the UK
retailer Tesco.
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Apart from ensuring environmental sustainability Oserian has also tried to ensure that its
labour conditions comply with the codes of practice, which motivates their workers and appeals
to EU consumers. The company employs about 5,000 workers to whom it provides free
housing or a housing allowance, healthcare facilities including anti-retroviral drugs to treat
HIV, primary schools, social and sporting activities. The workers’ houses enjoy electricity and
running water.
Oserian is the world’s largest pest-management farm and produces beneficial insects that
attack pests, e.g. one 2.5-acre greenhouse is devoted to producing more than 3 million
Phytoseiulus persimilis parasitic mites each week, which attack spider mites. They do not use
miticides, which are expensive and are a health and safety risk. To supplement fertiliser
programmes, Oserian is using redworms from Japan to produce worm casts through
vermiculture. The growers also use Twin N, a powdered form of beneficial bacteria that turn
plants into nitrogen fixers. The most effective weapon against flower diseases, however, is the
continuous heating from a geothermal installation, which also eliminates carbon dioxide,
carbon monoxide and nitrous oxide. The last two are not emitted, but carbon dioxide is used
by the flowers and therefore released.
Business associations
The Lake Naivasha business cluster includes several cooperation and collaboration efforts. The
flower farms have formed various associations with objectives ranging from lobbying for policy
support, environmental conservation, to maintaining standards to facilitate corporate social
responsibility (CSR) programmes. The Kenya Flower Council (KFC) and the Fresh Produce
Exports Association (FPEAK) are the key industrial associations, whose objectives include
maintaining environmental, economic and social standards.3 The Horticultural Ethical Business
Initiatives (HEBI) conducts regular social audits on workers’ welfare. In all these cases the
firms are graded depending on their performance and adherence to the code of practice agreed
by various associations – the Oserian flower farm is highly graded.
KFC works closely with FPEAK to represent their members before government and
development agencies, media, trade associations, unions and other non-governmental bodies.
KFC hosts Kenya Flower days in the EU, and cooperates with other stakeholders to support the
cut-flower industry both locally and internationally. In October 2009, KFC became the first
growers’ association to be certified to audit flower farms in Kenya and in other African
countries.
The KFC developed a code of practice that is fully based on the Global Good Agriculture
Practices (GAP). This code helps to self-regulate the flower industry by providing the standards
that are required of flower producers. It operates Silver and Gold certification. The KFC carries
out surprise audits to ensure that these standards are maintained at all times by the flower
farms. This code of practice mainly touches on:
Workers’ health, safety and general labour conditions.
Environmental Management Plan incorporating general protection of the natural
environment, including water, air, land, flora and fauna.
Good Agriculture Practices.
Good management and safe disposal of all farm wastes.
Computerised drip irrigation to reduce water wastage.
Proper bookkeeping and documentation to ensure traceability and accountability.
By being compliant with the code of practice, the flower companies promote inclusive and
sustainable growth through providing good working conditions. The businesses were forced to
3 Most flower farms are registered with these groups in order to meet international environmental and social
standards. These groups also provide a platform that assists the flower farms in exporting their produce.
Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha
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address poor working conditions and ensure payment of the national minimum wage. In terms
of labour rights the code of practice has helped to raise the standards of permanent workers in
terms of providing a living wage, housing allowance, medical care, paid maternity leave and
protective clothing for those using toxic pesticides (Lawrence, 2010).
Codes of practice also exist to conserve the natural environment of the Lake Naivasha basin.
Two of the best-known codes are administered by the Lake Naivasha Growers Group (LNGG)
and the Lake Naivasha Riparian Association (LNRA), which aim to ensure that the lake and its
surrounding natural environment are conserved. These codes have helped in regulating the
use of water in the lake as well agrochemicals used on the flower farms. The importance
European buyers attach to these codes seems to have greatly contributed to creating an
environment that will sustain local initiatives to protect Lake Naivasha.
By creating their own internationally recognised social and environmental standards and code
of practice, the Kenyan flower businesses have largely managed to resist pressure to comply
with the European flower industry code of practice (KFC, 2008).
In the small-scale sector, farmers have experienced challenges in attracting medium- and
long-term investment for the expansion of their flower projects.
Fair Trade certification provides an independent verification that the workers on these large-
scale flower farms receive decent wages and working conditions in line with the International
Labour Organization (ILO) conventions. The flower producers negotiate a price with the
exporters who purchase the flowers for the Fair Trade market. This includes an additional
premium set at 10% of the negotiated price. The premium is reserved specifically for
investments in projects to benefit the workers and the wider community. Decisions on how the
money is to be used are left with the Joint Body of elected workers and management
representatives in consultation with the workforce. During the post-election violence, the fair
premium was used to assist flower workers who were displaced from their homes (Max
Havelaar, 2008).
Through managing the Fair Trade premium and resulting projects, workers have gained the
confidence to address wider issues with management while local relations have improved as a
result of community-based projects. However, Fair Trade-certified farms currently sell a
maximum of 20% of their production to Fair Trade buyers so there is still potential to expand
this market and provide substantial benefits to farm workers and their communities. Premium
money has also been dedicated to broader community projects such as education and training,
part-funding of the Rubiri water project which will supply water to over 200 families, and
provision of health facilities in the local communities. The workers at Finlay donated Fair Trade
premium money to the Friends of Mau Water Catchment (FOMAWA), a local NGO working to
conserve and re-forest the region’s major water catchment area, the greater Mau Forest.4 The
Joint Body also set up a tree nursery, which is being run by the employees themselves. These
re-afforestation efforts are crucial to the ecosystem.
Flower farms around the lake have also come together to support social programmes as well
as pool together their resources for infrastructure development, e.g. the flower farms invested
about 25 million KSh in the repair and construction of parts of the Moi South Lake road, which
serves most of the farms around Lake Naivasha (KFC, 2008).
5.2 Other institutions
The Lake Naivasha Water Resources User Association (LANAWRUA) is probably one of the most
developed WRUAs in Kenya. Local water resources management in Naivasha finds its roots in
the Lake Naivasha Riparian Association (LNRA), which was established in 1929 to protect local
landowner’s rights. With the advent of the floriculture industry in the early 1980s the LNRA
4 http://www.fairtrade.org.uk/producers/flowers/finlay_flowers_oserian_ravine_roses_kenya.aspx
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became more strident in trying to balance the impact of the expanding commercial interests
surrounding the lake with protecting its environmental integrity.
The LANAWRUA has drawn on this background in establishing itself. The other WRUAs do not
have such a long history or established stakeholder groups. As a result, many of them are still
trying to develop the capacity to effectively manage the water resources in their area. WRMA
has stated its intention to delegate some of its functions to the WRUAs.
There are two key associations in the area of environmental conservation and sustainable use
of the natural resources around Lake Naivasha: the Lake Naivasha Growers Group (LNGG) and
the Lake Naivasha Riparian Association (LNRA). They were formed in response to the declining
ecosystem. The associations conduct regular environmental and social auditing as well as
providing training for their members on environmental sustainability and management of
natural resources. The LNRA has a diverse membership including smallholders, ranchers,
flower growers, tour operators, the Kenya Wildlife Service, the Kenya Power and Lighting
Company and the Naivasha Municipal Council. The association has developed a comprehensive
management plan to control human activities in the area and to prevent species extinction.
5.3 Government
The country’s legal framework for floriculture is handled by line ministries and their relevant
agencies, e.g. the Ministry of Agriculture and the Ministry of Trade and Industry, and the
Horticultural Crops Development Association (HCDA). The government ensures compliance
with standards to meet all the qualitative aspects of importer’s demands including packaging,
size, quality, observation of health requirements etc. The Ministry of Agriculture has
established quality standards for major horticultural exports and its inspectors conduct sample
tests at airports and seaports. Export rules and regulations are also enforced, e.g. the EU has
revised its requirements on maximum residue levels to an analytical zero in order to safeguard
consumers and environment. The government ensures that standards and measures are
maintained to enhance and promote the flower industry and also ensure their sustainability in
the international market.
The government has also tried to improve the sustainability of Lake Naivasha by developing
and financing various projects through the environmental ministry. Recently the Environmental
and Mineral Resources Minister invited the World Bank for discussions on conserving Lake
Naivasha. The Minister wanted the ministry to partner with the World Bank in conserving the
Lake Naivasha catchment and address solid waste management (SWM) in the region. The
ministry had also carried out various activities to raise the amount of water in the lake, e.g.
restoration of dams in the entire catchment to restore the water table, equipping 122 schools
with water-harvesting tanks to provide water for the tree nurseries that are about to be
started. The ministry, in partnership with the Military and National Youth Service, would also
desilt all the dams in the area the Ministry of Agriculture would undertake soil-conservation
measures.
Prime Minister Raila Odinga recently visited the Prince of Wales5 in London to discuss the
conservation of Lake Naivasha. They aim to help coordinate the various stakeholders in order
to restore Lake Naivasha and turn Kenya’s flower industry into a cleaner, bigger and more
sustainable business, and then draw on this experience to address other degraded areas. An
innovative programme, backed by the Prince of Wales, is underway with the goal of achieving
more sustainable use of the lake’s water and restoration of its ecology. The project ‘Imarisha
Naivasha’ (or ‘Empower Naivasha’) seeks to coordinate local industries and communities, along
with government agencies and international NGOs, to restore the damaged lake.
Migration towards Lake Naivasha is likely to continue as long as people believe that the
horticulture industry or smallholder farming provide jobs and livelihoods. As more people enter
5 See: http://www.nation.co.ke/News/PM+Odinga+Prince+Charles+to+restore+degraded+lakes/-/1056/1196834/-/y32tqrz/-/index.html
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the area, competition over land, water or jobs will become more acute. We have only to recall
the disputed 2008 elections or the history of violent conflicts over water between pastoralists
and smallholders in other parts of the country, to see the damage that social unrest can do the
economy and by implication the horticultural industry. These pressures have manifested
themselves more directly in the political environment in relation to water management in the
basin. During 2009 drought, municipal leaders are said to have entertained the prospect of
severely restricting the withdrawal of water by flower farms.6 Similarly, popular and political
discourse around the 2010 fish-kill attributed the deterioration of water quality to the
horticulture industry, despite the significant impacts of the failing Naivasha Town wastewater
treatment works discharging directly into the lake, and runoff from upstream settlements and
smallholder areas. Although they may be politically attractive in the short term, decisions such
as restricting flower farms’ water withdrawal have potentially disastrous long-term
consequences and there is therefore need to address them before a repeat is staged.
5.4 International actors
There is strong collaboration between the local flower industry and international companies
and organisations. This covers areas including environmental management, training,
laboratory analysis and diagnosis, technology acquisitions and marketing. Most of the foreign
companies support training and capacity-building to improve standards and ensure that high-
quality flowers enter the export markets. For example, the Royal Netherlands Embassy in
Nairobi started a training programme to help local horticultural products to reach markets in
the industrialised countries. The German Flower Labor Programme (FLP) has collaborated with
the International Centre for Insects and Physiology and Ecology (ICIPE) in Kenya to develop a
programme to help trained scouts detect problems and diseases early enough and avoid
extensive damage.
The Kenya flower industry also works closely with laboratories and research institutes based in
developed countries, e.g. Société Générale de Surveillance (SGS) and Releb de Haan
laboratories (Netherlands). Consumers tend to place trust in the analyses and tests conducted
by these laboratories, which means that obtaining their clearance boosts export sales; in
addition, Kenyan farmers prefer them because they get results in about two working days as
opposed to four months for results from local laboratories. There are several collaborative
research programmes such as Dudutech (Kenya) Ltd, a pest-management company that
provides crop-protection solutions in collaboration with Flamingo. There are therefore
increasing cross-level interactions.
The LNRA has initiated innovations in resource management by working with global institutions
such as UNDP, gaining support from the national Kenyan institutions. The River Malewa is
under serious threat from unsustainable land use, e.g. deforestation, siltation, increased
abstraction of water and agro-chemical pollution. There is now evidence that the river output
and water quality are declining, which will in turn affect Lake Naivasha. The World Wildlife
Fund (WWF) has been working with the local communities in conjunction with other
stakeholders including the LNRA, and drafted a preliminary plan for conserving the Malewa
basin.
A new initiative known as Payment for Environmental Services (PES) was started in 2008 by
CARE International in partnership with WWF, and teaches farmers about sustainable farming
practices that would both improve yields and reduce the environmental impacts of agriculture
on the water flowing into Lake Naivasha. Some such practices include planting napier grass
and trees for fodder and fruits as well as ploughing along rather than across the contour in
order to reduce soil erosion.
The programme involves LANAWRUA, which represents 23 commercial farms around Lake
Naivasha. In order to encourage upstream landowners to continue to provide environmental
services, LANAWRUA awarded US$ 5,840 to Wanjohi WRUA and US$ 4,160 to Upper Turasha
6 See East African 20 July 2009, accessed 24 August 2011.
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WRUA. It recently made a second payment of US$ 10,000 to 470 farmers in the catchment
area and involves a mix of land-use transformation measures. These measures improve farm
productivity and provide both nature and downstream users with quality water as a long-term
environmental service.7 See appendix I for more information.
Although it is still too early to evaluate the scheme, and as many challenges maintain,
Chirambi et al. (2011) report on the pilot PES scheme:
Land management changes were implemented by ecosystem service sellers
Reported improved water quality
Livelihood improvements: increased milk production and reduced pressure on
forests
Reduced soil erosion and surface water runoff
Increased tree cover in pilot areas
Continued support from ecosystem service buyers (especially LNGG)
The Alliance for Water Stewardship (AWS)8 has been working with other stakeholders on the
development of a global water stewardship programme that promotes a water stewardship
standard and a certification programme designed to ensure that virtual water consumption is
sustainable (Hepworth et al., 2011). The AWS is working to build a programme that recognises
and rewards water users and managers who take major steps to minimise the impacts of their
water management. Major stakeholders in Kenya welcomed the AWS standard as an important
and practical way to prevent negative water impacts arising through global trade. According to
the vice-chair of the LNWRA and representative of small farmers in the upper basin, these
standards would change the way water is being managed in Naivasha. The standard was also
welcomed by the Kenyan government, which who believes it will help to integrate water
management and the National Water Policy.
7 See: http://presa.worldagroforestry.org/blog/2011/07/25/lake-naivasha-communities-in-kenya-get-second-
payment-for-catchment-conservation/#more-2707. 8 See: http://allianceforwaterstewardship.org/about_pdfs/About_AWS/Regional_Initiatives/Africa/AWS-Kenya-Case-
Study-Technical-Report.pdf.
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6 Conclusions
The future of one of the most successful and rapidly emerging industries in Africa is dependent
on the management of a relatively small river basin. The situation is complex as there are
different users at different locations in different sectors. Changes in land use upstream
(deforestation and greater need for wood for energy) affect the availability of water
downstream, the production of geothermal energy downstream requires water and affects land
use, flower farms downstream withdraw water and require energy services, tourism depends
on quality water resources. This is a perfect example of how water, energy and land are
increasingly interrelated the WEL nexus.
The general recognition of the environmental challenges around the Naivasha basin has led to
a range of initiatives to conserve Lake Naivasha:
Business and business associations (e.g. Oserian, Findlay, KFC)
Local institutions (e.g. LANAWRUA)
Government (Prime Minister level)
International facilitators (e.g. UNDP, WWF)
By working across sectors (the nexus of water, energy and land, and relevant stakeholders,
these actors now realise that joint action is important and that integrated thinking can lead to
new solutions. For a long time, such joint action was uncoordinated. It was left to a handful of
companies to respond, although the local institutions have long existed. Now there seems to
be leadership from the top of government. There is also more willingness to engage, e.g.
evidence that downstream users (flower farms) are willing to be involved in a scheme with
payments for ecosystem services by users upstream and thus protect the basis of future
economic activity. Many challenges remain, however, and some suggested courses of action
are set out in Appendix II.
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References
Akwany, L. (2011) PhD proposal, available at: sites.google.com/site/eoianaivasha/project-definition/water-governance. Becht, R and Harper, D. (2002) ‘Towards an understanding of human impact upon the hydrology of Lake Naivasha, Kenya’, Hydrobiologia 488 (1-3): 1–11. Becht, R., Odada, E. and Higgins, S. (2006) ‘Lake Naivasha: Experience and Lessons Learned Brief’, Washington, DC: World Bank. Bolo, M., Nancy, M., Racheal, W., Virginia, M. and Daniel, K. (2006) Research Priorities for Kenya’s cut flower Industry: Farmer’s Perspectives. Technopolicy brief 14. African Technology Policy Studies Network (ATPS) Nairobi, Kenya. Bolo, M. (2007) The Case of Lake Naivasha Cut flower Cluster in Kenya in Zeng, Z. D (eds) Knowledge, Technology and Cluster-Based Growth in Africa. The World Bank, Washington DC. Chiramba, T., Mogo, S. and Martinez, I. (2011) ‘Payment for Environmental Services pilot project in Lake Naivasha basin, Kenya’, paper presented at UN water international conference, Zaragoza, Spain, 3-5 October. Available at: http://www.un.org/waterforlifedecade/green_economy_2011/pdf/session_4_biodiversity_protection_cases_kenya.pdf. Council of Canadians (2008) ‘Lake Naivasha withering under the assault of flower vendors’, Food and Water Watch, available at: www.canadians.org. Enniskillen (1999) ‘The Ramsar Convention on Wetlands: The Lake Naivasha Riparian Association (LNRA), Kenya’, Interview with Chairman Andrew lord Enniskillen, Mgendi, C. and Matindi, S., available at: http://www.ramsar.org/award/key_awards99_interview_lnra.htm. Everard, M. and Harper, D. M. (2002) ‘Towards the sustainability of the Lake Naivasha Ramsar site and its catchment’, Hydrobiologia 488:191–202. Harper, D.M. (2004) GEF- and non GEF-funded tropical lakes: Experience and Lessons Learned. Lake Naivasha, Kenya. Harper, D. and Mavuti K. (2004) ‘Lake Naivasha, Kenya: Ecohydrology to guide the management of a tropical protected area’, unpublished, available at: http://www.le.ac.uk/bl/staff/dmh/dmhearthwatch.htm. Hepworth, N., Agol, D., Von-Lehr, S. and O’Grady, K. (2011) AWS Kenya Case study technical report: Exploring the value of water stewardship standards in Africa. Alliance for Water Stewardship/Marks and Spencer/ GIZ. Available at: http://allianceforwaterstewardship.org/about_pdfs/About_AWS/Regional_Initiatives/Africa/AWS-Kenya-Case-Study-Technical-Report.pdf. Hughes, A. (2001) ‘Global commodity networks, ethical trade and governmentality: Organizing business responsibility
in the Kenyan cut flower industry’, Transactions of the Institute of British Geographers 26 (4): 390–406. Hickley, P., Muchiri, M., Boar, R., Britton, R. Adams, C., Gichuru, N. and Harper, D. (2004) ‘Habitat degradation and subsequent fishery collapse in Lakes Naivasha and Baringo Kenya’, unpublished, available at http: www.le.ac.uk/bl/staff/dmh/dmhearthwatch.htm. Kenyan Flower Council (KFC) (2008), information available at: http://www.kenyaflowers.co.ke/index.html. Kitaka, N,. Harper, D. and Mavuti, K. (2002) ‘Phosphorus inputs to Lake Naivasha, Kenya, from its catchment and the trophic state of the lake’, Hydrobiologia 488 (1-3): 73–80. Lake Naivasha Riparian Association (LNRA), information on Management Plan available at: http://www.lakenaivasha.org/: (management plan). Lawrence, F. (2010) ‘Kenya’s flower industry showing budding improvement’, available at: http://www.guardian.co.uk/environment/2011/apr/01/kenya-flower-industry-worker-conditions-water-tax. Max Havelaar (2008) Information at: http://www.maxhavelaar.ch/en/. Accessed 18 January 2012. Mekonnen, M.M. and Hoekstra, A.Y. (2010) ‘Mitigating the water footprint of export cut flowers from the Lake Naivasha Basin, Kenya’, Value of Water Research Report Series No. 45, Delft: UNESCO-IHE. Mergeay, J., Verschuren, D., Van Kerckhoven, L. and De Meester L. (2004) ’Two hundred years of a diverse Daphnia community in Lake Naivasha (Kenya): effects of natural and human-induced environmental changes’, Hydrobiologia 49 (8): 998–1013. Mireri, C. (2005) ‘Challenges Facing the Conservation of Lake Naivasha, Kenya’, MSc thesis, Nairobi: Kenyatta University. Moosbrugger, R. (2007) Kenyan Flowers, Ethical Trade and the Question of Sustainable Development, Dissertation, SOAS.
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Nyakundi, P. A., Inoti, I. K., Thiongo, G. T., Keriko, J. M. (2005) Impact of land use changes around Olkaria geothermal stations, Naivasha, Kenya. Gnet E-Journal website: http://www.gnet.org/middle.php. Odote, C., Ochieng, B., and Makoloo,O. (2009) ‘The Implications of Property Rights for Wetlands Management in Kenya’, Institute for Law and Environmental Governance, Nairobi. Available at: http://iasc2008.glos.ac.uk/conference%20papers/papers/O/Odote_122601.pdf.
Ogodo, O. and Vidal, J. (2007) ‘Drained of life’, Guardian, 14 February, available at: http://www.guardian.co.uk/society/2007/feb/14/kenya.conservation. Olago, D. et al. (2010) ‘Holocene palaeohydrology, groundwater and climate change in the lake basins of the Central Kenya Rift’, Hydrological Sciences Journal 54(4): 765–780. Republic of Kenya Economic Survey Various Issues. Nairobi: Government Printer. Saving Kenya's Lake Naivasha: Efforts to Improve Sustainability (2011) ScienceDaily, May 11, 2011. Available at: http://www.sciencedaily.com/releases/2011/05/110511075034.htm. The Kenya Flower Council (no date), information available at: http://www.kenyaflowercouncil.org. WWF (2011) ‘Case Study: Shared risk and opportunity in water resources: seeking a sustainable future for Lake Naivasha’, available at: http://www.wwf.de/fileadmin/fmwwf/pdf_neu/lake_naivasha_report_02_2011.pdf. Verschuuren, D., Laird, K. and Cumming, B. (2000) ‘Rainfall and drought in equatorial east Africa during the past 1,100 years’, Nature 403: 410–414.
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Appendix I: Payments for Ecosystem Services in the Naivasha Basin9
One successful example of a project that has been implemented without the support of
government funding sources is the pilot project for Equitable Payment for Watershed Services
(EPWS) which was jointly facilitated by CARE and WWF and linked the commercial water users
around the lake with 565 smallholder farmers via the WRUAs. The LANAWRUA members paid
the Wanjohi and Upper Turusha WRUAs to rehabilitate and maintain the riparian zones, plant
trees and reduce fertiliser use. The Lake Naivasha environmental services contract is part of a
joint WWF and CARE-Kenya scheme known as Equitable Payment for Watershed Services. This
environmental services scheme is geared towards providing downstream water users with
quality water as the environmental service. The water is needed for agriculture, horticulture,
ecotourism, fisheries, geothermal power generation and the timber industry.
EPWS is also designed to benefit all stakeholders to ensure equity and sustainability of the
project in the long run. Stakeholders include the private and public sectors as well as the local
population. The scheme entails land-use transformation by upstream farmers through
rehabilitating and maintaining riparian zones, planting grass strips and terracing steep slopes.
Participating farmers are expected to reduce the use of fertilisers and pesticides as a means of
cutting pollution. Tree planting is another key component of the scheme.
In Naivasha, EPWS combines compensating upstream environmental service stewards for
forgone opportunities with collaborative investment between environmental service providers
and beneficiaries for increased income through sustainable management of the environment.
Apart from watershed services, EPWS also includes forest services, biodiversity and landscape
beauty.
How it was done
The contract is between the Wanjohi Water Resource Users Association (WRUA), the Upper
Turasha WRUA and the Lake Naivasha Water Resource Users Association (LANAWRUA). The
Wanjohi and Upper Turasha associations, both located in the upper catchment, are the sellers
while LANAWRUA is the downstream buyer. The sellers engaged the services of a lawyer to
develop the contract.
The two upstream WRUAs signed contracts on behalf of the 565 farmers implementing the
EPWS scheme. LANAWRUA signed on behalf of the environmental service buyers and
comprises the Lake Naivasha Growers Group (LNGG) and the Lake Naivasha Riparian
Association (LNRA). LNGG is mostly made up of commercial horticulture and floriculture farms
while LNRA consists of landowners around the lake. All these organisations are formal legal
entities.
WWF and CARE-Kenya acted as intermediaries and implementers through the partial provision
of funds to ensure cost effectiveness. The funds also helped in building the capacity of sellers
to manage the project efficiently. Other stakeholders in the EPWS scheme are the Naivasha
Water Resource Management Authority and the Ministry of Agriculture. A careful process of
stakeholder analysis and dialogue was followed by identification of environmental service
sellers and buyers, trust building, development of a memorandum of understanding and fine-
tuning of seller–buyer negotiations.
How it works
To appreciate and encourage upstream landowners to continue providing environmental
services, LANAWRUA awarded US$ 5,840 to Wanjohi WRUA and US$ 4,160 to Upper Turasha
WRUA. Vouchers worth US$ 17 will be printed and delivered to the two associations, which will
subsequently distribute them to selected shops within communities at EPWS pilot sites. Each
voucher represents the annual payment to each farmer.
9 See:
http://www.un.org/waterforlifedecade/green_economy_2011/pdf/session_4_biodiversity_protection_cases_kenya.pdf.
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Individual farmers will redeem their vouchers and use them to purchase farm inputs and other
basic household goods. The farmers are rewarded equally to compensate for opportunity costs
based on environmental service provision and contribution to positive socioeconomic impacts.
The contract establishes a conflict-resolution committee composed of buyers, sellers, the
Water Resources Management Authority and WWF/CARE representatives. The contract will be
revised and/or renewed after one year.
Other activities
As part of the EPWS scheme, a socioeconomic baseline survey was undertaken and data
analysis is in progress. Two progress review meetings have been held with the respective
WRUAs. Also in progress are consultation meetings with other potential buyers. Four staff
gauges have been installed along four rivers draining into Lake Naivasha while the two
upstream WRUAs have been issued with instruments to assess river sediment levels.
An exchange visit to an EPWS site located in the Uluguru Mountains of Tanzania has also taken
place and a project monitoring plan for the upstream WRUA is in development.
Effects
Although still a pilot, the project is an effective of example of the coordination of different
water users to manage the water resources from the top of the catchment to the end user.
More farmers are needed in order to expand the scheme for tangible results to be realised.
Challenges
Challenges faced in the EPWS venture include unpredictable weather, which had a negative
effect on conservation structures especially in 2009, and land fragmentation due to increasing
population density. EPWS officers say that engaging more buyers is another challenge.
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Appendix II: Further suggestions
There is no shortage of ideas in discussions around Lake Naivasha. Some of these include:
Water stewardship. A global water stewardship programme could recognise and
reward responsible water managers and users and is supported by many flower
farms such as Finlays (Flamingo), outlets such as Marks & Spencer and agencies
such as Kenya Water Resource Management Authority among others.
Paying for ecosystem services (PES) initiated by the government in collaboration
with NGOs and international donors. Provide incentives for organised community
groups in the Lake Naivasha basin to protect water resources, e.g. by constructing
small ponds, hydro-technical facilities, cleaning up river banks, educational
programmes in schools about water protection, community initiatives and training
workshops to enhance knowledge of local wildlife and water environment.
Downstream users need to support watershed protection through afforestation and
re-forestation programmes in the catchment areas as well as in the Mau Forest,
which has suffered negative land-use changes. They can partner educational
institutions, private firms and community organizations to promote controlled
planning and care of native seedlings to encourage tree planting.
Promote public–private dialogue. Key stakeholders in the Lake Naivasha basin such
as the government and commercial and small-scale flower farms should engage in
a dialogue from an ecosystem perspective
Enhance flower farms’ efficiency. The flower farms could become more efficient in
their use of water in order to cut down their use of Lake Naivasha, e.g. by using
drip irrigation (also known as trickle irrigation or micro irrigation) minimises the use
of water and fertilisers by allowing water to drip slowly to the roots of plants,
through a network of valves, pipes, tubing and emitters; or adopting basic green
technologies such as rainwater capture systems and dry sanitation facilities.
Enhance water-resource management. Local government, with the help of
businesses, could introduce technologies such as GPS, satellite imagery and
weather telemetry to local communities to improve water-resource management in
times of scarcity and need.
Awareness raising. Businesses could develop projects to educate and empower the
local community and especially young people to tackle critical environmental
sustainability challenges so that they can become agents of positive social change.
Businesses could conduct awareness-raising workshops on the conservation and
rational use of natural resources in the Lake Naivasha basin, such as benefits of the
forest, shelter and nutrition of wild animals, pure air, scenic beauty, and clean and
sufficient water. Local partners should also enrol farmers in programmes to adopt
practices that would reduce sedimentation and contamination sources, thereby
improving water quality. The media offer an opportunity for the public to learn
about the lake and get involved in conservation efforts.