THE World Bank Strategic Environmental Assessment of the Kenya

Strategic Environmental Assessment of the Kenya Forests Act 2005

THE World Bank

rEPorT no. 40659-kE

THE WORLD BANKAGRICULTURE AND RURAL DEVELOPMENT DEPARTMENT

Strategic EnvironmentalAssessment of the Kenya Forests Act 2005

© 2007 The International Bank for Reconstruction and Development / The World Bank1818 H Street, NWWashington, DC 20433

Telephone 202-473-1000Internet www.worldbank.org/ruralE-mail [email protected]

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Cover photo: Dean HousdenInsert photo of women and firewood: Curt CarnemarkOther insert photos: Dean Housden

iii

P R E FA C E v

A C K N O W L E D G M E N T S 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

Background 1Kenya’s Forest Resources 1New Forests Act for Kenya 4

The Role of the SEA 7Special Characteristics of the SEA for the Kenya Forest Sector 8SEA Methodology 8Phase 1—Screening and Scoping 10Phase 2—Situation Assessments 10Phase 3—Setting Environmental Priorities and Development

of Alternatives 12

National and Local Situation Assessments 13Stakeholder Analysis 13The Political Economy 15National Level Situation Assessments: Key Issues and Concerns 17Local Level Situation Assessments: Key Issues and Concerns in Hombe

and Rumruti 26Ongoing and Potential Investment 28

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1

Contents

Priority Areas 31Considerations from the Local Situation Assessment 33Community Participation and Benefit Sharing 34Investment in the Forest Sector 34

Scope for Action 35Strategic Planning and Management of the KFS 36Finances 37Enforcement 39Enabling Community Participation and Benefit Sharing 39Enhancing Investment in the Forest Sector42

Policy Action Matrix 45

The Next Steps 59

R E F E R E N C E S A N D O T H E R R E S O U R C E S 6 1

Boxes1 WTO Principles on the Use of SPS Measures 2

3.1 Description of Stakeholders 143.2 Framework for Forestry Development in KFMP 183.3 Key Concerns Raised at the First Stakeholder Workshop 193.4 Relationships Between Poverty, Health, and Forestry 223.5 Summary of Financial Appraisal 234.1 Key Issues Identified through Consultations based on

Situation Assessments 32

Figures1.2 Percentage Area of Forests and Other Land Use Types in Kenya 21.1 Distribution of Forest in Kenya 21.6 Projected Import Costs for Timber 31.5 Supply and Demand for Wood 31.4 Wood Fuel Projecte Demand 31.3 Population Growth Projections 31.7 Projected Demand for Timber Products 42.1 Kenya Forests Act (2005) I-SEA Process 9

Tables3.1 Importance and Influence of Stakeholders 163.6 Opportunities for Investment in Hombe Forest 296.1 Policy Action Matrix 47

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iv Contents

v

In November of 2005 the Government of Kenya (GOK) ratified anew Forests Act. The Forests Act is an outcome of the KenyaForest Master plan finalized in 1994. In the new Forests Act thegovernment embraces the concept of participatory forest man-agement. The act gives particular consideration to formation offorest community associations, which will be recognized as part-ners in management. Furthermore, the act opens commercialplantations to lease arrangements by interested groups to sup-plement government efforts. This is a radical departure fromprevious 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 timberand other products/services for domestic use and export.

At the time when this sector work was conceptualized, theGOK had finalized a road map for implementation of the ForestBill. However, questions remained regarding how the ForestDepartment would reform itself, the level of stakeholder en-gagement in designing the reform process, and the capacity inthe to-be-established Kenya Forest Service to implement thenew Forests Act. The Bank identified the need for analyticalwork 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 actorssuch as the Kenya Wildlife Service (Ministry of Tourism) andthe Forest Department (Ministry of Environment).

The institution-centered strategic environmental assessment(SEA) aims to assist the GOK with the implementation of theForests Act by informing the forest component of the NaturalResource Management project (2007–2012) and informing theForest Reform Secretariat of priority areas for successful imple-mentation. To achieve its objective, the SEA blends analyticalwork and consultations with key stakeholders. The SEA takesinto account input from a wide range of stakeholders includingcommunities, private sector and non-governmental organiza-tions. It provides recommendations in terms of concrete actionsnecessary to implement the Forests Act in the form of a policy-action matrix, and some immediate follow-up steps.

Preface

vi Strategic Environmental Assessment of the Kenya Forests Act 2005

The SEA has been coordinated and managed bythe Bank with assistance from a consulting consor-tium and input from the GOK. The Kenya ForestDepartment and Forest Sector Reform Secretariathave been involved in the SEA process from the

formulation of the scope of work to the finalizationof the policy-action matrix. The analytical work as-sociated with this report was completed inDecember 2006.

vii

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 expresstheir strong appreciation to the many people who offered ideas, com-ments, and critical questions over the course of this StrategicEnvironmental Assessment. In particular we wish to thank the gov-ernment of Kenya for its support of this process and commitment tomaking it happen. Within the World Bank, special thanks go to DijiChandrasekharan Behr, Christine Cornelius, Gerhard Dieterle,Nyambura Githagui, Yuko Kurauchi. Fernando Loayza, and ChristianPeter. The World Bank also thanks the team of consultants led by FRRLtd. The SEA consultant team was comprised of Peter Nelson, ClaireIreland, Paul Steele, Michael Gachanga, David Raing’o Maingi,Professor Patricia Kameri-Mbote, Sharon Gordon, and Sylke vonThadden. This team assisted with the analytical work, workshops anddraft report writing.

Funding for this study was provided by the World Bank and theBank-Netherlands Partnership Program.

Acknowledgments

ix

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

Acronyms andAbbreviations

xi

Forest in Kenya are an important source of livelihood, environ-mental services, and economic growth. In November of 2005 theGovernment of Kenya (GOK) ratified a new Forests Act. The actcontains many innovative provisions to correct previous short-comings, including a strong emphasis on partnerships, the en-gagement of local communities, and promotion of privateinvestment. In the new act forest community associations arerecognized as partners in forest management, and commercialplantations are open to lease arrangements by interested groupsto supplement government efforts. This is a significant depar-ture from prior practice where the government assumed fullmanagement responsibility of gazetted forest reserves. The newact 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 andfor export. Implementation of the act, however, faces numerouschallenges. This Strategic Environmental Assessment (SEA) fo-cused on integrating environmental, social, economic, and insti-tutional considerations of the new Kenya Forests Act (2005) intoimplementation of the act.

The purpose of the SEA is to inform, influence, andstrengthen the processes of implementing the new Forests Actand inform policy discussions regarding sustainable use forestsresources for national development. The SEA examined currentrisks confronting both woodland and forest environments andthe social well-being of communities relying on these resources.Evidence gathered through research and extensive consultationwith stakeholders was used to identify the scope for improvinginstitutional structures and governance processes under theplanned forestry reforms, notably those relating to the KenyaForest Service and the participation of communities and the pri-vate sector in forest management. The SEA recommends waysof enhancing the opportunities for environmental and socialgain that already form part of the overall goal of the Forests Act.These recommendations are contained in a policy action matrixthat appears in chapter 6 of this report.

Executive Summary

xii Strategic Environmental Assessment of the Kenya Forests Act 2005

CONDUCT OF THE SEAThe SEA blended analytical work and consultationto diagnose issues, identify priority areas, and po-tential actions to address priority issues. The SEAfollowed elements of international good practiceand the approach for institutions-centered SEAssupported by the World Bank. The priority actionswere identified in collaboration with key stake-holders and discussions with the Forest ReformCommittee and Secretariat set up by the Ministryof Environment and Natural Resources.

A noteworthy element of the SEA has been its re-liance on the active participation of a wide range ofstakeholders, through workshops and one-to-onediscussions. This dialogue has been essential inidentifying key issues and priorities for action. TheSEA has also examined conditions within two for-est areas—Hombe Forest and Rumuruti Forest—toassess priority issues and consider the views of for-est community associations and other stakeholderson the ground.

KEY ISSUES RELATING TOIMPLEMENTATION OF THE ACTAssessment of opportunities

The new Forests Act and draft Forest Policy providea strong basis for change. This change involves thetransformation of the FD into an independent KenyaForest Service (KFS) and improved management offorests through increased accountability, trans-parency and revenue generation. Implementation ofthe new act is occurring at a time when the nationalpolitical climate is emphasizing improved gover-nance and reducing corruption.

The SEA research and consultations confirmed astrong public demand for engagement of commu-nity groups as equal partners in forest management.The new act responds to this demand with greateremphasis on partnerships between the KFS, the pri-vate sector, and forest community associations.

The emphasis on the role of the KFS as an inde-pendent service working closely in partnershipwith other arms of government, local communities,and the private sector is an asset. However, poten-tial weaknesses remain that must be dealt with—such as adequate staffing and funding of the KFS,detailed development of subsidiary legislation,rules and regulations, and the operational mandateof the KFS.

The act and associated conditions in some siteshighlighted opportunities for commercial activi-ties on the part of forest associations. These in-clude, among others, collection of fuelwood andagricultural poles, and harvesting of non-timberforest products (honey, fruits, medicinal plants,fish farming), and the management of forest andwater resources. Economic analysis shows that, inclosed canopy forest areas with a mix of planta-tions and indigenous forest, effective implementa-tion of improved revenue collection andsustainable forest management can result in signif-icant profit for the sector.

There are also major opportunities for reactivat-ing the commercial forest sector and creating em-ployment through timber harvesting, processing,and downstream economic activities.

Potential risks

The SEA acknowledges the adverse effect thatshortcomings in existing legislation and institu-tional and governance weaknesses of previous ad-ministrations have had on forest environments inKenya. Continued inadequate political commit-ment could further some of the existing negativetrends and effects. These include reduction in for-est land cover through inappropriate excision ofstate forests, poor standards of management, ille-gal felling, and lack of replanting of forest planta-tions. Similar problems have been exposed in areasof dry land tree cover.

State forests have increasingly been viewed aseconomic liabilities because of the ban on timberharvesting. A risk is the continuation of the down-ward spiral of declining economic activity and cor-ruption which has left a demoralized ForestDepartment (FD) and reduced its capacity to man-age forests efficiently. This, in turn, has allowedexcessive exploitation of highly sensitive forest re-sources by local communities, leading to a reduc-tion in biodiversity, pressure on water resources,and increased wildlife-human conflict.

An estimated three million people live within aradius of five kilometres of forests. Rapid increasesin population are placing greater strain on scarceland resources. Collection of firewood, illegal char-coal production, and overgrazing by pastoralistscontribute to environmental damage. Currently,benefits from the use of forest resources are notshared equitably. Landless groups (many of whom

xxx xiii

are squatters), women (who do much of the work),and unemployed youths are particularly disadvan-taged. These conditions lead to local unrest and at-tempts to provide short-term political solutions thatdo not address the underlying causes of poverty.

PRIORITIES FOR ACTIONPrevious experience of corruption and poor man-agement has led to a critical review of the actionsthat need to be taken to ensure the independenceand transparency of future decision making at alllevels in the KFS. The control of finance and budg-ets, proper strategic planning, effective and impar-tial control over concessions and licenses, andenforcement of rules and regulations are all crucialto its success.

A main conclusion of the SEA is that the princi-ples of reform set out in the act are appropriate butthe challenge lies in giving real effect to them. Thisis particularly the case in ensuring the active par-ticipation of civil society, nongovernmental organ-izations (NGOs), and the private sector in criticallevels of decision making, from functioning of theKFS board and area conservation committees,down to drawing up of management plans andcontracts for individual forest areas.

The SEA highlights three areas where priorityfor action exists:1

• Strategic management and planning of theKFS

• Enabling community participation and bene-fit sharing

• Enhance both public and private investmentto enable SFM

Most initiatives can be pursued under one ofthese three principal themes. There, however, arecertain policy and action recommendations undereach of these specific themes with cross-cutting im-pacts, such as strategic planning and developmentof partnerships.

Elements of strategic planning and management ofthe Kenya Forest Service include, among other things:

• Enabling proper governance (including trans-parency and accountability) of the KFS,through– a transparent process for appointing both

the Board of Directors and the Director ofthe KFS

– approval by parliament of an updatedForest Policy as soon as possible

– establishing an interinstitutional committeeup to ensure effective coordination of forestlaw and other natural resource legislation

– developing an enforcement strategy estab-lishing an international standards compli-ance committee within the KFS

– annual audits and mid-term review of thestrategic plan and associated business plan

– external supervision of transparent proce-dures for staff appointments

• Ensuring proper strategic planning of the for-est resources of Kenya by – formulating a strategic plan that clearly

states the role of plantations in contributingto sustainable use of forest resources

– drafting a business plan for KFS and annualreports. As mentioned earlier, the businessplan should be revised on a periodic basisalong with the strategic plan, and be subjectto annual audits

– preparing a manual and guidelines forpreparation of forest management plans

• Realizing the economic value of these re-sources for the nation, by – developing a national forest data bank– preparing a framework for the provision of

incentives (including incentives for poten-tial losers under the new act and incentivesfor investment through national subsidiesand tax breaks)

– a clear policy brief on the role of farmforestry in the new Forests Act and how itcan contribute to the sustainable use of for-est resources

– prioritizing promoting restructuring of theforestry industry and raising overall stan-dards. It is recommended that a forest in-dustry forum be established to promote bestpractice in Kenya

– establishing staff training programs to coverareas of activity and responsibility that arenew to the KFS

1 The detailed priorities for action and recommendations arebased on analytical work at the national level, case studies,and consultations with key stakeholders. Justifications foreach of the actions proposed by the SEA are set out in chapter7 of this report and the recommendations are contained in apolicy action matrix (chapter 8).

xiv Strategic Environmental Assessment of the Kenya Forests Act 2005

• Achieving effective financial managementand regulation of the forest sector through– guaranteed financial support for the KFS

from the government set on a tapering scaleover the period required for KFS to be finan-cially viable

– identification of external funding sourcesthat can cover projected shortfalls

Community participation and benefit sharing whichincludes:

• Ensuring that all forest communities, andcommunities adjacent to forest areas, areproperly involved in decision making and im-plementation activities as per the new ForestsAct. This would require: – an inventory of existing community partic-

ipation processes in Kenya;– preparation of guidelines on the establish-

ment of CFAs– pilot studies on guidelines for Community

Forest Association (CFA) formation, part-nerships, and management of different for-est types should be undertaken

– a study reviewing how arid and nonmoistforests can contribute to poverty reduction

• Developing a policy on how women and ex-cluded groups will be engaged in communityforest associations. This would also include: – developing rules to ensure fair election and

representation of CFAs on area conserva-tion boards

– a capacity-needs assessment should be un-dertaken to establish what skills are neededby CFAs

• Equitably sharing the costs and benefits of theforest sector among communities, private sec-tor, and government. This will require– clear and transparent accounts showing the

annual income and expenditure of individ-ual forest areas, and the income attributedto each CFA

– preparation of guidance notes (in local di-alect) on community benefit sharing of dif-ferent activities

– a study on how to arrange payment for en-vironmental services and valuation ofecosystem services

• Protecting indigenous and customary accessand use of forest resources. This will require,amongst other things,

– clarification regarding whether communitycouncil and trust land in arid and semi-aridareas (making up 80 percent of Kenya) willbe classified as forest and access for grazinglivestock will be restricted under a “conven-tional” approach to management plans

– A charcoal regulatory framework should beprepared with specific standards and a cer-tification process.

• Enabling equitable and fair partnerships. Thisshould include – preparation of pilots on different types of

partnerships for management of plantationforests

Enhancing investment in the forest sector helps en-sure the right mix of public and private investmentto enable the sustainable management of the forestsector, which contributes to the national goal ofpoverty reduction. This will involve

• Creating an enabling environment for privateinvestment (both corporate and community)in the forest sector. This will require– KFS to undertake a review of training pro-

grams with a view to introducing and sup-porting programs that are directed atmanufacturing and marketing of timber andnon-timber forest products.

• Enabling and strengthening partnerships. – Each of the forest management plans

should include an investment strategy thatshould be worked up jointly by representa-tives of the affected CFAs and private sectororganizations.

– Rules and regulations should be preparedto ensure incentives to private forest ownersto deliver wider benefits to communitiesliving adjacent to forests are in place.

– Prepare training aids on the model agree-ments for communities and training work-shops for all registered CFAs and privatesector investors

• Improving transparency and accountabilityof investment activities. This will require– Developing model agreements where rights

and responsibilities of different parties andproducts are clearly laid out

– The KFS develop criteria, standards, andguidelines to indicate what conditions willconstitute inadequate management of localauthority and private forests.

xxx xv

– All contracts, concessions, royalty agree-ments, and other licenses and leasesshould be published once the terms havebeen agreed on.

– Clear rules and regulations are required formanagement of private forests.

– Provision of a clear regulatory framework in-cluding Environmental Impact Assessment(EIA) and other evaluation tools that are fitfor purpose and do not impose an unaccept-able burden on industry.

IMPLEMENTING THERECOMMENDATIONSThe policy action matrix in chapter 6 contains anumber of recommendations and actions that havebeen endorsed by the SEA stakeholders. The SEAteam drafted the initial policy action matrix in thelight of its research, internal meetings with staff ofthe Ministry of Environment and Natural Resources

and the Forest Reform Secretariat, individual discus-sions with stakeholders, and the outcome of twoworkshops held in May and June 2006. This policyaction matrix was formally revised and endorsed byall stakeholders at the final workshop held inDecember 2006.

The priority areas now need to be taken forwardby the Forest Reform Committee as it finalizes im-plementation of the new Forests Act 2005. The pol-icy action matrix should be seen as a living matrix(that is, a document that is continually reviewedand updated) that continues to influence the workof the new KFS.

Stakeholder participation at all levels is integralto the success of the new Forests Act. As the rolloutof the new act begins to take place by the new KFS,it will be important that stakeholder concerns andopinions are taken account of and stakeholders feelthey are able to participate effectively in the process.This will mean regular review of the policy actionmatrix among the wide stakeholder group

1

Kenya forestry was guided by policy formulated shortly after inde-pendence despite emerging changes in dynamics of the society andthe development of new approaches to natural resource manage-ment. The 1957 policy, with few modifications in 1968 concentratedon 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 ofthe Plan had identified numerous weaknesses in the Forests Act CAP385 that were partly responsible for the decline in the sector. Thesewere 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 increasedcommitment 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 RESOURCESAround 2 percent of the total land area in Kenya is covered by closedcanopy forest (1.24 million hectares [ha]). In addition to closedcanopy forest, it was estimated in 1994 that plantation forest consti-tuted 0.61 million ha. The distribution of these resources is skewedvery heavily to the Montane Forest Region where 18 percent of thearea is afforested and to the Coastal Forest Region where 9.9 percentof the land surface is forest. Only 1.9 percent (851,000 ha) of theWestern Rainforest Region now contains forest because of populationpressures, while the figure for Dry Zone Forest Region is still lowerat 0.4 percent (211,000 ha). Figure 1.1 shows the basic distribution offorest in Kenya and figure 1.2 shows the percentage area of forestsand other land use types in Kenya.

Background 1

Value of the Resource

The extent of forest cover is critically important forprotecting biodiversity and water resources andgenerating both timber and non-timber forestproducts. Woodland and scrub vegetation exists inthe dry land and arid areas, which is equally im-portant for providing products like fuelwood andcharcoal and supporting livelihoods, especiallygrazing.

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 signifi-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 communityempowerment and devolution of power, poor en-abling environment and political interference, lackof transparency and accountability, poor enforce-ment of laws, poor institutional financing mecha-nisms to implement policies and laws, poorbenefit-sharing mechanisms, undefined roles inpublic-private partnerships and inadequate stake-holder participation, inadequate facilities and lowstaff morale.

Manifestations of poor governance include thefailure of the shamba system. In the shamba systemfarmers were given pieces of clear felled plantationforest areas to cultivate while taking care ofplanted tree seedlings. Farmers could occupy thearea till the canopy closer or a maximum of threeyears. Since 2003, the shamba system has beenbanned because in some areas it was commercial-ized and plots were in most cases sold to prospec-tive cultivators. It is claimed that forest departmentstaff colluded in these activities. Another manifes-tation is forest land allocation through politicallymotivated excisions.

Excision of Forests and Lack of Management Further decline in the area of canopy woodland

has taken place since 1994 and increased areas offormer plantation land have been left unplanted.Since gazettement began in the 1900s, official reg-isters show that more than 290,000 ha have beenwithdrawn from the forest estate. In the recentpast, excision of forest land in response to popula-tion and political pressure has been running at an

2 Strategic Environmental Assessment of the Kenya Forests Act 2005

Figure 1.1 Distribution of Forest in Kenya

Source: FAO 2001.

Figure 1.2 Percentage Area of Forests and Other Land Use Types in Kenya

WoodedGrassland,

18.50%

Grassland,2.10%

Desert, 13.70%

Farmland andUrban, 16.50%

Natural Forest,2.10%

Plantation0.30%

Mangrove,0.10%

Woodland,3.70%

Bushland,43%

Source: FRR 2007.

average of 5,000 ha per year, leading to a minimumloss of 50,000 ha in 10 years.

Effects of the Ban on Harvesting

A ban on logging from natural forests, introducedin 1982 in the interests of protecting the remainingforest reserves, has only been partially successful inpreventing timber harvesting in indigenous forest,while the prohibition of harvesting from planta-tions has caused the closure of the majority of localsawmills and driven up timber costs due to de-crease in supply. This has also resulted in localcompanies importing timber.

While the extent and quality of forest resourceshas deteriorated, demands for timber and non-tim-ber products have continued to rise, fueled by rapid

population growth (MENR 1994a; MENRW 2004)as indicated by Figures 1.3 through 1.6. Althoughthe availability of timber from local sources has de-creased, demand for all timber products has con-tinued to rise, resulting in significant inflation intimber prices. One beneficial side effect has been thestimulation of farm forestry. Individual landownershave increasingly been planting commercially valu-able timber species based on their own financial as-sessments of the opportunities in promoting shortrotation plantations.

Projections indicate a continuing growth in thedemand for timber and the increase in import costsfor timber. This suggests a potential for establishingcommercial plantations. If such a plantation systemalso lowers transport costs it could be effective inmeeting woodfuel and commercial demand.

Introduction 3

Figure 1.3 Population Growth Projections

70

60

50

40

30

20

10

0

Mill

ions

1995 2000 2005 2010 2015 2020

Projected Population Growth in Kenya

Source: MENR 1994a

Figure 1.4 Wood Fuel Projected Demand

454035302520151050

Mill

ions

m3

1995 2000 2005 2010 2015 2020

Projected Growth in Demand for Fuel Wood

Source: MENR 1994a

Figure 1.5 Supply and Demand for Wood

504540353025201510

50

Mill

ions

m3

1995 2000 2005 2010 2015 2020

Demand for Wood versus Projected Supply

Source: MENR 1994a

Figure 1.6 Projected Import Costs for Timber

16

14

12

10

8

6

4

2

0

Bill

ion

Ksh

1995 2000 2005 2010 2015 2020

Cost of Imported Timber in Billion Ksh

Source: MENR 1994a

Planning of forest resources to meet future de-mand will need to consider the markets for wood asprojected in figure 1.7. This will affect the choice ofspecies depending upon whether trees are grownfor fuelwood, structural timber, pulp, or plywood.

There is potential to increase exports under thenew Forests Act but it is more likely that increasedproduction will be sold on local markets to help re-duce costs and reduce import demands.

NEW FORESTS ACT FOR KENYAFor many years, forest legislation and practice inKenya has been criticized for failing to protect thecountry’s indigenous forests or to ensure sustain-able use of plantations and other areas of forest andwoodland. Most forest communities have felt dis-advantaged in being excluded from forest man-agement and there has been a history of poormanagement and abuse of powers. In 2005, a newact received parliamentary approval and endorse-ment from the President, and came into effectwhen it was formally gazetted on February 9, 2007.The new act contains many innovative provisionsto correct previous shortcomings, including strongemphasis on partnership working, the engagement

of local communities, and promotion of private in-vestment. It also extends the concept of timbermanagement to farm forestry and dry land forests.

The Forests Act 2005 creates a new semiau-tonomous body, the Kenya Forest Service (KFS)and supportive institutions for management andconservation of all types of forests. KFS is respon-sible for formulating policies regarding the man-agement, conservation and use of all types of forestareas in the country. KFS will also be responsiblefor overseeing changes resulting from the act.

The new act creates a Forest Management andConservation Fund for purposes of funding activi-ties of the KFS and other objects of the act. The prin-ciple change being that the Ministry of Finance willnot be the sole source of funds for the forest sector.The act also has clear provisions for recognition androle of community forest associations in forest man-agement. It enables members of forest communitiesto enter into partnership with KFS through regis-tered Community Forest Associations.

Provisions in the act also will require addressingpotentially contentious issues. For example, priorto the new act, forest reserves were gazetted withpeople in them. This will be a source of problemunder the new act as settlements in gazetted forests


Figure 1.7 Projected Demand for Timber Products

Source: MENR 1994a.

600

500

400

300

200

100

0

Tho

usan

dm

3

1995 2000 2005 2010 2015 2020

sawnwood

plywood and panels

paper and paper board

are now considered illegal. Similarly, sharing ofbenefits has been a source of diverging perspec-tives for a long time. Communities bordering onforests are the main group with complaints re-garding the distribution of benefits from timbervalue. There are no clear provisions in the act, butthis will need to be addressed.

The adoption of new legislation and establish-ment of the semiautonomous KFS opens up amajor opportunity to address the inequalities of thepast and to improve the quality and sustainabilityof Kenya’s forests, trees, and woodland. KFS, how-ever, will face many challenges in delivering thefull range of services.

Introduction 5

7

An “institutions-centered” Strategic Environmental Assessment(SEA) has been adopted to support the reform of the Kenya forestssector because it helps to integrate environmental and social consid-erations into decisions that relate to governance, institutional reform,and financial management. Unlike impact-centered SEAs, which in-variably propose measures for minimizing adverse environment andsocial impacts, institutions-centered SEAs focus on institutionalizingmechanisms to address potential environmental and social impactsthat may not be foreseeable or predictable at the time of carrying outthe SEA. A SEA has to be applied in what is invariably a rapidlychanging and fluid framework as different political, administrative,and judicial influences come to bear. By the very nature of institu-tional change, significant tensions can arise as different interestgroups seek to maximize their own advantages. In most countries,use of forest resources is an emotive and politically charged subjectwhere issues of biodiversity and landscape conservation must beweighed alongside community needs and commercial silviculture.Kenya is no exception to this rule.

The SEA seeks to bring an element of objectivity to the evaluationof different options and to encourage more open, decentralized, andtransparent decision making by engaging all stakeholders. Its aim isto 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 tomake 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 outtime scales, milestones, and responsibilities for action. Further adviceand information on the role and application of a SEA and other formsof strategic assessment can be gained from the World Bank SEAToolkit Web site.2

The Role of the SEA2

2 To access the toolkit, go to http://www.worldbank.org; select topics, environmentand then type “SEA toolkit” in the “search this site” window.


SPECIAL CHARACTERISTICS OFTHE SEA FOR THE KENYA FORESTSECTORReforming the Kenya forest sector is a complexprocess and there are a number of different but re-lated priorities that are driving the initiative. Thegovernment, through the Reform Committee andSecretariat, strived to establish the Kenya ForestService (KFS) in the shortest time practicable. Atthe time of initiating this SEA a detailed road mapexists for the establishment of the KFS that guidesthe work of three subcommittees. The role of theSEA is not to duplicate work already in hand, butto identify and examine in greater detail the areasof the reform process most critical to securing last-ing environmental, social, and local economic ben-efits (the SEA priorities) and then to offer practicaladvice on strengthening these elements of the leg-islation and administrative procedures.

The SEA has had two main objectives:

1. To inform and influence the process of imple-menting the Forests Act

2. To inform the policy dialogue regarding sus-tainable use of forest resources for nationaldevelopment

The latter objective recognizes the fact that otherareas of reform are taking place simultaneously, in-cluding management of the water sector.

The overall purpose of the SEA is to make a di-rect contribution to the work of the

Forest Sector Reform Committee. This committeewas established by the Government of Kenya underthe direction of the Ministry of Environment andNatural Resources. It comprises senior representa-tives from across government, and representativesfrom forest industry, nongovernmental organiza-tions, conservationists, forest users, and develop-ment partners. It is chaired by the PermanentSecretary of the Ministry of Environment andNatural Resources and is the main organ to drive thereform process.

A Forest Reform Secretariat has been establishedin the Forest Department to serve this committeeand carry out tasks as requested by the committee.One of the first tasks of the secretariat has been todevelop a road map for the implementation of thenew Forests Act with a clear time frame and outlineof budget resource requirements.

SEA METHODOLOGYThe methodology of this institutions-centeredStrategic Environmental Assessment (SEA) has fol-lowed the World Bank toolkit approach. It is alsoan approach considered in the recently published“Guidance on Applying Strategic EnvironmentalAssessment” by the Development AssistanceCommittee of the Organisation for Economic Co-operation and Development. It has responded tolocal circumstances in the light of progress and tim-ing of the forest reform process and the need toclarify baseline conditions through a rapid ap-praisal of the political economy and other situationassessments. A number of the steps were carriedout in parallel with each other. The main sequenceof activities included four phases that entailedscreening and scoping, situation assessment, set-ting environmental priorities, and development ofalternative courses of action (see figure 2.1). Thiswas seen as appropriate for this institutions-cen-tered SEA.

Important characteristics of the SEA in Kenyahave included the following:

• Reliance on rapid assessment of the politicaleconomy and analysis of existing publicationsto establish the background to implementa-tion of the Forests Act.

• Strong emphasis on the role of stakeholdergroups to help identify priority areas of con-cern and key intersectoral environmental andsocial linkages. The opinions of all stakehold-ers have been sought through both open dialogue in workshops and one-to-one discus-sions in person or by telephone between indi-viduals and members of the SEA team.

• Use of a case study and other site-specific in-formation to help identify potential winnersand losers arising from implementation of thenew act and the extent to which the benefits ofgood forest management are likely to beshared throughout society.

• Development of a policy action matrix that in-corporates an accountability and transparencyframework. Its purpose is to help the govern-ment chart out (beyond the road map) how toeffectively implement the Forests Act accord-ing to the prioritized issues.

The Role of the Sea 9

Figure 2.1 Kenya Forests Act (2005) I-SEA Process

Source: Adapted from FRR 2007

Stakeholder analysis

Rapid assessment of political economy Literature

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Stakeholder consultation workship to:(i) present findings from situation assessments and case study(ii) prioritize emerging issues for policy action matrix(iii) agree on proposals for addressing priority issues


PHASE 1—SCREENING AND SCOPINGThis initial phase entailed a rapid assessment of thepolitical economy relating to the forest sector inKenya and stocktaking of completed and ongoingactivities and studies. It also involved determiningwho should be approached as stakeholders andidentifying the environmental and social consider-ations that would need to be taken into account inlater phases of work.

Rapid Assessment of the Political Economy

A clear understanding of the political economy isessential in any SEA for two reasons; first, it affectsthe conduct of the assessment itself, and second, itplays a key role in determining the practical op-tions for delivering long-term reforms. One of themain consequences of the Forests Act will be thedevolution of centralized state control of forestmanagement to local partnerships involving com-munities and the private sector. It is therefore im-portant to know what the dynamics are likely to beamong the various stakeholders to help assess whomay be winners, who may be losers, and how toensure that the relevant voices are heard.

Methods. An initial appraisal was based on per-sonal meetings with key players, the well-informedinsights of Kenyan members of the SEA teamthrough previous engagement in the reformprocess, and literature reviews. A more systematicreview of the role of different players was under-taken as part of the situation assessments. (SeeAppendix 4—Governance and InstitutionalAssessment.)

Identifying Stakeholders

A thorough understanding of stakeholders—whothey are, what their concerns may be, what inter-ests they have— is required in any SEA process. Inthis SEA the objective was to carry out a stake-holder analysis to complement the analysis of thepolitical economy. Through this analysis the SEAaimed to identify all relevant stakeholder groups tobe included in consultation.

Methods. The process of identifying stakehold-ers entailed reviewing the databases of key organi-

zations, including the Kenya Forests WorkingGroup and the Forest Department and identifyingand listing stakeholders who will be affected by thenew act as well as those with an interest in the newact. The list in appendix 2 of those consulted waspresented to both the Ministry of Environment andthe Forest Department and confirmed to be fullyrepresentative of the wider stakeholder interests.

The preliminary assessment of the politicaleconomy generated critical information on the roleof key stakeholders. This output was used to selectinvitees to the first of the three planned workshops.It also helped identify environmental, social, andeconomic issues that had been raised by disadvan-taged groups, including communities living in andadjacent to forests, and the private sector.

Literature Review

The literature review was to build a preliminary pic-ture of principal concerns about the forest sector andvalidate comments from individual stakeholders.

Methods. Relevant publications were identifiedthrough personal knowledge of team members,discussions with informed stakeholders includingthe forestry profession and international commu-nity, and a keyword search of the Internet.

PHASE 2—SITUATIONASSESSMENTSThe aim in preparing situation assessment reportswas to provide a baseline description of the gover-nance and institutional, economic, financial, social,and environmental factors that need to be takeninto account in implementing the Forests Act. Theassessments provide the evidence on which thefindings and recommendations of the SEA arebased. The specific methods used in the differentsituation assessments can be found in the respec-tive appendixes.

Governance and Institutional Assessment

This analysis considers the role of different institu-tions and organizations (identified through stake-holder analysis; see Social Analysis) in relation toforest management at the national and local levels.It draws out institutional issues in terms of both

The Role of the Sea 11

formal and informal practices and the way inwhich these are likely to support or hinder the in-troduction of changes envisaged in the Forests Act.

Methods. The analysis included literature re-views that provided documented evidence of theroles and attitudes of different public bodies, and ofhistorical failures of transparency, accountability,and corruption. These reviews were supported byinterviews and discussions with key stakeholders.

Financial and Economic Assessment

This appraisal has an important function in exam-ining reasons for previous poor performance of theforest sector with regard to forest management,timber valuation, and revenue collection, and ex-ploring the scope for improvements under each ofthese headings once the KFS is established. It alsoconsiders the role of the international communityin providing aid to forest services in Kenya.

Methods. Original data was collected and ana-lyzed to produce financial models of historic andprojected performance. In addition to data on ac-tual performance, estimates were made of the fu-ture expenditure and revenue streams for the KFS.The national analysis also drew on findings fromthe Hombe Forest case study.

Environmental Assessment

The environmental analysis focused on the natureof forest resources in Kenya, the aim being to es-tablish whether policies, rules, and regulationscould be applied universally across the country, orwould need to be adapted to local conditions. Itwas also important to establish the nature and ex-tent of forest cover to gauge the types of environ-mental impacts to be considered.

Methods. Given the short time scale for the ini-tial appraisal, the environmental assessment con-centrated on mapped information and publishedsources based principally on the literature review.Information contained in the environmental analy-sis was combined with the findings from other as-sessments, including primarily the social analysisto which it is closely allied given the overlaps be-tween environmental resources, livelihoods, andhuman welfare.

Social Assessment

This analysis was designed to assess the social con-text in which the new Forests Act is to be imple-mented, and to explore community attitudestoward forest management issues. It also includeda stakeholder analysis to inform the way in whichthe views of different interest groups have been as-sessed.

Methods. The various interests of these groups,both overt and hidden, were examined in relationto the problems being addressed by the new lawunder the headings of Environment, Social,Economic, and Governance and Institutions. Aseparate exercise involved assessing the likely im-pact of the new Forests Act on each of these inter-ests (positive +, negative -, or unknown?), andindicating the relative priority that implementationof the act should give to each stakeholder intereston a scale from 1 (high priority) to 4 (low priority).The social analysis helped to inform other areas ofstudy, including the institutional and governancereviews, the selection of stakeholders, and the de-velopment of the case study methodology. Box 3.1describes the characteristics of the SEA stakehold-ers.

Hombe Case Study and Rumuruti Forest Site Visit

From the outset of the SEA, it has been consideredimportant to verify broad conclusions drawn at anational level by reference to conditions on theground. A case study of Hombe Forest on the slopesof Mount Kenya was used as a window into thelocal situation, primary areas of interest of the SEA,and determining the practicalities of addressingpriority areas. In addition, a site visit was made toRumuruti Forest to understand the varying context.

Methods. On location interviews were con-ducted with local representatives of the commu-nity and the existing forest department, andcollecting both quantitative and qualitative data.The SEA also held a community-based workshopon the implications of the new Forests Act. A sepa-rate site visit to Rumuruti Forest focused on theviews of a local nongovernmental organization(Tree is Life) and the Rumuruti Community ForestAssociation.


PHASE 3—SETTINGENVIRONMENTAL PRIORITIESAND DEVELOPMENT OFALTERNATIVESA standard feature of SEAs is their focus on ex-ploring alternative approaches to policies, plans, orprograms. In the case of the Kenya forest reforms,the content of the new Forests Act has largely de-fined the shape of the new administration, butgreat flexibility remains in terms of the ways inwhich specific clauses of the act are put into effect.It is in relation to practical implementation that theSEA is able to explore different ways of achievingthe overall aims. Findings from the stakeholderworkshops, together with the outputs from thecase study in Hombe Forest and the brief visit toRumuruti Forest have played a key role in shapingthe SEA recommendations.

It should be noted that from the outset of theSEA process an effort was made to avoid drawingconclusions prematurely, before hearing the viewsof those consulted and other stakeholders.

Workshops

Purpose. A series of three workshops wereplanned to encourage dialogue between stake-holders on the key issues in the first session, tobring together findings from the various assess-ments in the second workshop, and agree on prior-ities for action and to invite stakeholders to makecommitments to delivering specific elements of thepolicy matrix in the third and final workshop.

Methods. A combination of presentations, exer-cises, working group sessions, and plenary discus-sions were used to gather the views of workshopparticipants.

The first two workshops helped identify prior-ity concerns and the policy action matrix containedin this report. The first workshop (held in May2006) recorded the broad concerns of stakeholderswere explored in relation to the main themes of theSEA. The second SEA workshop (held in June 2006)considered a range of questions based on the analy-sis of strengths and weaknesses of the Forests Act.Participants were divided into four groups, each ofwhich independently examined a list of 40 ques-tions and prioritized these in terms of the 10 mostimportant topics that should be addressed in theshort term to strengthen delivery of the act’s objec-tives. The findings from these exercises are re-ported in chapter 3 and 4. At the second workshop,the situation assessment reports were presented to-gether with the findings of the Hombe Forest casestudy and an analysis of key questions arising fromthe May workshop and subsequent analysis asso-ciated with the SEA.

Policy Action Matrix

The final stage of the SEA involved the prepara-tion of a policy action matrix that captured find-ings and recommendations from stakeholders. Itsets these out with clear responsibilities for action.A time scale for completion of activities needs tobe completed by the government of Kenya. Theseactions were discussed and agreed to at the thirdworkshop.

13

The national situation assessment and case study (to examine thelocal situation) provide insights on the governance, institutional, eco-nomic, environmental and social contexts. This helped inform iden-tification of priorities and potential actions. This chapter drawstogether findings from the rapid assessment of the political economy,stakeholder analysis, literature review, the national and local situa-tion assessments, and consultations carried during the first two work-shops. Key messages in relation to priority objectives of the StrategicEnvironmental Analysis (SEA) are also discussed.

STAKEHOLDER ANALYSISDifferent stakeholder groups make up the population affected bychanges in the forest sector. These include traditional forest dwellers,communities lying immediately adjacent to indigenous forests andplantations, pastoralists and migratory groups who use open savan-nah forest on a seasonal basis, and those who depend for part or allof their livelihoods on trade in timber and non-timber forest prod-ucts. There are also other stakeholders, living remotely from forestareas, who may be indirectly affected by economic decisions affect-ing, for example, the charcoal trade or environmentally by increasedrunoff and flooding of local rivers as a result of clear felling opera-tions.

Within each of the above communities there can be significant di-versity of views and conflicts of interest. Women and children mayprovide much of the labor for site clearance, planting, and weedingof nurseries and plantations and yet see few of the benefits that comefrom harvesting timber or other forest resources.

The stakeholder groups affected by the new act can be categorizedinto the following six groups:3

• government,• Community Forest Associations (CFAs),• the private sector,• nongovernmental organizations (NGOs),• scientific and research organizations, and• the donor community.

National and LocalSituation Assessments3

3 The stakeholder analysis in appendix 3 outlines in detail all the stakeholders whowill be affected by the new act.


For purposes of the SEA these groups werereclustered into three categories to distinguishamong those who have both high influence overimplementation of the Forests Act and who will bemajor beneficiaries (primary stakeholders); stake-holder groups that may either influence or benefitfrom the reforms but not both (secondary stake-holders); and external stakeholders, representinginternational donor, aid, or conservation agencies.

This allows for classification of stakeholders ac-cording to their degree of influence. It also facili-tated identifying who the potential winners andlosers under the new Forests Act and what influ-ence they may have over the process, and ensuringthat adequate voice is given to those who otherwisemight be marginalized from a process like the SEA.A summary description of these stakeholders isoutlined in box 3.1.

Box 3.1 Description of Stakeholders

Primary stakeholders comprise central governmentdepartments, the private sector, national NGOs, andCommunity Forest Associations and other commu-nity groups.

Key government departments and agenciesa are thecurrent Forest Department (FD) and forest officers in each of the districts, the Kenya Wildlife Service(KWS), the Ministry of Local Government, and theMinistry of Water and Irrigation. KWS is a major stakeholder because 31 forests (60 percent of gazettedforests) in Kenya are under joint management with FD.The Ministry of Local Government is also a primarystakeholder because all municipal and council forestslie within its jurisdiction. The Ministry of Water andIrrigation is also now a major stakeholder because it is mandated (through the relatively new Water Act2002) to manage the water catchments in the country.These organizations have a major influence on the implementation of the new Forests Act and are potentially major beneficiaries.

The private sector as a primary stakeholder mainlyconsists of the Timber Industry Employers Association,the Kenya Timber Manufacturers Association, theKenya Furniture Association, and other companies involved in value added wood products. They are all primarily involved with plantation and commercialforestry but some use indigenous forest products. A subsidiary group of private sector interests has alsobeen defined that does not depend directly uponforests for their core activities but whose future maybe closely linked with medium- to long-term plans forforests and their products. A good example is theKenya Tea Development Authority whose core activi-

ties are the growing, harvesting, and production ofteas but relies heavily on fuelwood and plywood in itsmanufacturing and packing processes.

National NGOs include a wide variety of civil society organizations (CSOs), community-based organizations (CBOs), and NGOs. Most are concernedwith how the new act will be implemented but arenot, and will not be, direct beneficiaries of forests ortheir products. Generally, the communities they repre-sent stand to gain or lose more directly from the newact. Kenya’s CSOs, CBOs, and NGOs have developedsubstantially in the last one to two decades and nowinfluence decision making at all levels and will con-tinue to affect the implementation of the new act.

Community Forest Associations, communitygroups, women’s groups, vulnerable groups, and indi-viduals living on the edge of, or in, forests are primarystakeholders because they typically depend directlyupon forests for their livelihoods. It is important tonote that these groups are potentially a significantbeneficiary, but have little influence on the implemen-tation of the new act.

Secondary stakeholders can be grouped together as other relevant government organizations and inter-national NGOs. All of these organizations have eithera secondary or external interest in the implementationof the new act. An example of an international NGOwith a secondary rather than a primary stake in thenew act could be the World Wide Fund for Nature(WWF). While it is at the forefront of work in theforestry sector, if this opportunity ceased, the WWFwould continue working in other areas of conserva-tion, such as wildlife or the marine environment.

(continued)

National and Local Situation Assessments 15

THE POLITICAL ECONOMYForestry management has been heavily centralizedin Kenya as a legacy of the colonial period, withgovernment taking a direct interest in all aspects ofplanting, cultivation, harvesting, and processing.The control of forestry has traditionally been exer-cised by the Forest Department (FD) under the di-rection of the Ministry of Environment and NaturalResources (MENR).

For many decades forests have been exploitedat unsustainable levels. During the 1980s, major ef-forts were made by government, supported by in-ternational donors, to place forestry managementon a firmer footing. It is widely acknowledged that

this period saw the most effective use of forest re-sources.

In 1987, the shamba system was dismantled forthe first time since the fifties with a clear politicalobjective. This started to reverse the trend in theforest sector and a significant decline of the sectorbegan. The Kenya Forestry Master Plan (KFMP)initiated in 1991 (MENR 1994b) forecasted signifi-cant decline in forest production unless issues ofinstitutional reform and governance were ad-dressed.

Evidence shows that both MENR and FD havebeen susceptible to political pressures and personalself interest in the past, with high levels of corrup-tion reported. The situation became particularly se-

Box 3.1 Continued

Research organizations. The main national organi-zation dedicated to forestry research in Kenya is theKenya Forestry Research Institute (KEFRI), which hasbeen involved with the formulation and drafting of the new act. Other organizations involved in researchgenerally work in the region but not exclusively inforests in Kenya. Thus, they are placed to influencethe implementation of the new act, but again will notbe direct beneficiaries. This is more clearly illustratedby 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 withEuropean, American, and Asian academic and research organizations.

Other central government departments. This groupincludes ministries and departments within the gov-ernment that have some relationship with FD, includ-ing semiautonomous parastatals. Their core businessis not in forestry and therefore they are termed sec-ondary stakeholders. Examples of government min-istries include the Ministry of Agriculture, the Ministryof Regional Government, and the Office of the

President. Examples of key parastatals includeKenGen (the electricity generation company), theNational Environmental Management Authority(NEMA), and the National Museums of Kenya (NMK).In each case there is some debate or overlap regardinglegislation or delineation of duties and therefore op-portunities for harmonization or conflict dependingupon the approach adopted.

External stakeholders comprise multilateral and bi-lateral donors. Multilateral donors that have a long re-lationship with Kenya and the forestry sector includethe World Bank and, to a lesser extent, the UnitedNations Development Programme, and the UnitedNations Environment Programme. Bilateral donorswith a long history of working in forestry in Kenya in-clude the UK Department for internationalDevelopment, the Embassy of Finland, JapanInternational Cooperation Agency, and the US Agencyfor International Development. Other donors have,over the decades, supported forestry in Kenya, butgenerally their aid programs have been focused else-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 toforestry, the Permanent Secretary in the Ministry responsible for matters relating to water, the Permanent Secretary in the Ministry responsiblefor finance, 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.


rious in the early 1990s and resulted in the with-drawal of support from the international commu-nity for the forestry sector. Ironically, this occurredwhen a clear sense of the direction that was neededhad been outlined in the KFMP.

Throughout the 1990s, FD operated with inade-quate resources and deteriorating staff morale. Itscapacity to maintain state indigenous and planta-tion forests was reduced and increases in illegal ac-tivity within state forests led to presidential bans,starting with the dismantling of the shamba4 sys-tem, and then Presidential bans on logging fromboth indigenous and plantation forests (except forthe controversial exemption of supplies to the onlypaper and pulp mill in the country). There is, how-ever, clear evidence (from statistics contained inthe economic and financial situation assessment)that FD has succeeded in reversing some of its fi-nancial constraints with the direct support ofMENR over the last two years.

Before the 2002 national elections, planned exci-sions of forest land by the then government weresuccessfully resisted by community movementsand by civil society. The major NGOs associatedwith forestry have campaigned strongly for forestreforms since 1991, when the recommendations todistance forestry from direct government

control were first proposed in the KFMP. TheseNGOs remain concerned that, even with thechange of government in 2002, the process of re-form has been too slow.

Other stakeholders in the SEA process havevarying degrees of influence on the political econ-omy. The role of donors has already been referred

to and the government of Kenya has clearly statedits desire, in the 2006 budget, to operate its main fi-nancial services without reliance on donor aid.Notwithstanding this, the financial assessment (seeAppendix 7) makes clear that achievement of theplanned reform of the forestry sector will dependon external financial assistance.

Ethnicity provides an important dimension inpolitics and the desire of political leaders to ensurethat their “own people” benefit from changes ofgovernment or administration has played a majorrole in decisions on land use in the past. Both na-tional and local leaders previously sought to allo-cate forest land to the homeless. In practice thebeneficiaries have often been supporters of thegovernment of the day rather than rootless minor-ity groups who largely constitute the homeless.The extent to which these changes have been dri-ven by political motives and greed, as opposed tocommunity interest, is an issue on which differentpolitical parties have their own views. Regardlessof the underlying causes, the outcome is that sub-stantial numbers of people live within forest re-serves or in squatter camps to which they havebeen evicted. There are also rapidly growing pop-ulation pressures in forest areas (for example,Nyeri District has seen a 100 percent increase inpopulation between 1969 and 1999), which will in-evitably increase pressures on land and forests in

4. Also known as nonresident cultivation of trees. Under theshamba system, farmers grow both plantation trees and foodcrops on small plots, tending the trees and harvesting thecrops until the trees have become established.

Table 3.1 Importance and Influence of Stakeholders

High importance as beneficiaries Low importance as beneficiaries

High influence on implementation Central government (FD, KWS, Ministry Forest officersof Water and Irrigation, and Ministry of National NGOsLocal 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 NGOsPrivate sector (other) Multilateral donors

Source: FRR, 2007.


the future. There is an urgent need to establish ef-fective resettlement policies in and adjacent to for-est areas that respect human rights.

Issues of ethnicity are also reported to haveplayed a part in the selection of FD staff at centraloffice and in regional and district offices. A con-scious decision to place in district forest offices in-dividuals who do not belong to the localcommunity can either hinder or assist the processof forest management, particularly policing andsecurity roles. This in turn plays a part in the cre-ation of environments conducive to bribery andcorruption. There is, however, a widely held viewamong stakeholders that opportunities for briberyand corruption can only be exploited within anygovernment organization if those in the highestpositions of authority are actively engaged them-selves or are willing to condone it in response topressures from government itself.

The private sector has been adversely affectedby government decisions to place restrictions ontimber harvesting and by the general economic cli-mate for investing in forestry. The capacity of pri-vate sector to influence events in the forest sectorhas also diminished. There are, nevertheless, indi-vidual companies and commercial interests withclose ties to government that have received prefer-ential treatment because of these links in the past.

Until recently, citizens have had only limited in-fluence over government policy in the forestry sec-tor or the way in which forests are administered.This situation has changed with the emergence ofcommunity leaders and environmental activistswho have been prepared to put national interestabove concerns for their own welfare. The GreenBelt movement, founded as early as 1977 byProfessor Wangari Maathai, is a prime example ofa grassroots organization that is leading the way inrepresenting environmental and community inter-ests in forestry. The movement is now developingan international focus to its work.

There is increased awareness of the environ-mental, social, and economic importance ofKenya’s forests among the population. A great di-vide, however, still exists between current proce-dures for planning and managing forests in Kenyaand the goal of giving communities in forest areasa strong voice in governance and a real stake in theeconomic and wider benefits that stem from sus-tainable forestry.

A realistic and pragmatic view needs to betaken of the political economy within which anymajor economic sector functions. Depending onthe focus and direction of the government, therewill always be some who gain and some who losefrom redistribution of resources. There will also bethose who gain in influence and those who aremarginalized by the political processes of the day.What is abundantly clear from a review of forestgovernance in Kenya is that in the absence of alevel playing field with clear and transparentrules, ultimately it is the whole of society that suf-fers from poor management and overexploitationof natural resources.

The essential steps toward decentralizing forestmanagement have already been initiated by thegovernment of Kenya by transferring forest ad-ministration and regulation to the KFS. Thisshould provide strong and independent leader-ship but there is still a risk that inappropriate lev-els of government influence, abuse of power, andelite capture could return. It will be important toensure that all aspects of the service are run in anopen and transparent manner with full public ac-countability.

Continuing pressures on land and natural re-sources as a result of population growth means it isimperative that the policies, rules, regulations, andincentives developed for the forest sector are sup-ported by, and integrated with, equivalent policiesfor agriculture, planning, and land use in the areasimmediately adjacent to forests. Without this, thegovernment’s goal of a sustainable forestry sectorwill fail.

NATIONAL LEVEL SITUATIONASSESSMENTS: KEY ISSUES AND CONCERNSFour national level rapid situation assessmentswere conducted on governance and institutions,environmental, social and economic and financialconsiderations. A summary of the key issues andconcerns identified in the assessments is presentedbelow. A more detailed discussion of these assess-ments is available in the appendixes. It should benoted that several of the concerns raised by stake-holders (see box 3.3) mirrored the assessments’findings.


Key Issues Highlighted in the KFMP

While the present government initiated the currentreform process in 2002, essential steps for improv-ing the sustainability of Kenya’s forests and wood-lands have previously been identified in majorstudies and workshops dating back to 1991. Severalof these were captured in the KFMP, but because of

political inertia, corruption, or mismanagement,little progress was made in implementation of theplan. Potential lack of progress remains a majorconcern today. Questions are often raised about thecapacity to implement the reform process and thecommitment of all major players, including gov-ernment and donor organizations, to deliver effec-tive solutions.

Box 3.2 Framework for Forestry Development in KFMP

Key messages in KFMP on the framework for forestrydevelopment include the following.

Conservation and management of the indigenous forest

• Ensuring that the authorities exercised theirrights to refuse officially endorsed excisions ofgazetted forest

• Dealing equitably with squatters, forest dwellers,and forest-adjacent households, to overcomeproblems of those dispossessed of their homeswhen shamba was abolished, those prohibitedfrom carrying out their traditional rights, andthose seeking to create livelihoods for them-selves by encroaching on forest land

• Dealing with the urgent requirement to find al-ternative sources of forest products for the ruralcommunities

• Promoting forest ecotourism to generate in-creased and sustainable incomes

Farm forestry and dry land forestry• Providing support for growing trees on farms, in-

cluding development of markets• Acknowledging the role of natural woody vege-

tation in the dry lands

Forest plantations• Transferring plantation management to the best

economic managers• Instituting a socially more desirable agroforestry

system (reflecting the benefits of the shamba system but avoiding political pressure to exciseforest land)

• Leasing state land for forest plantations to sup-plement the management of state plantationsunder a public or private forest enterprise, andthus avoiding a burden on the government’sbudget

• Developing a harvesting, transport, and market-ing system that encourages the proper allocationand use of available wood including– rotation cycles based on economic considera-

tions rather than the needs of existing industry– introduction of log grading and quality con-

trol– proper controls over transportation of timber– economic pricing of timber, rather than pric-

ing based on administrative decisions– liberalization of trade in wood and wood

products• Reforming policy and legislation immediately so

the master plan can be based on a policy andlegal framework that reflects the national willwith regard to the role of forests in the develop-ment of the country.

• Implementing institutional reform at an earlystage; priorities are the phased transfer of publicforest resource management to the best eco-nomic managers and restructuring of the ForestDepartment as the highest forest authority

• Developing extension services that avoid bu-reaucratic duplication of resources

• Concentrating on development-oriented ratherthan academic research on forestry matters

• Strengthening long-tem planning and resourcemonitoring

Source: FRR, 2007.


The overview report of the KFMP produced byMinistry of Environment and Natural Resources in1994 captured several of the issues and discussesthe real challenge for effective planning and man-agement of these resources (see box 3.2).Unfortunately, very few of its positive proposalsand recommendations were acted on by the gov-ernment in place at the time. Many of the problems,including illegal logging and excision of forestareas, have since been exacerbated. However, theessential elements of the KFMP have now beentranslated into the draft Forest Policy and newForests Act 2005.

Key Governance and InstitutionalConsiderations

There has been much criticism of the historic per-formance of both MENR and FD, but early meetingsprovided reassurance that the present administra-tion is fully committed to the need for forest reformsand implementation of the Forests Act.

Intersectoral and interagency challenges include:

• The KFS will be a quasi-government organi-zation like the Kenya Wildlife Service. The lat-ter is well equipped with resources (bothcapital and financial) to manage areas under

Box 3.3 Key Concerns Raised at the First Stakeholder Workshop

EnvironmentProviding greater protection of water catchmentsEnhancing protection of biodiversity

• Promoting sustainable use of forests and forestproducts

• Valuing ecosystem services and arranging appro-priate levels of payment for environmental ser-vices

• Giving greater emphasis to arid forests and non-moist forests

• Defining role of plantations to reduce pressureon the environment

Economic Issues• Contributing to poverty alleviation, equity, and

benefit sharing• Specifying the role of plantations and commer-

cial management• Defining policies for the control of timber har-

vesting and setting up concessions• Understanding importance of forests to economy

as a whole• Making adequate provision for the forest sector

in government budgets• Developing policies for the timber and non-tim-

ber sectors, including market chain issues andadding value

• Ensuring efficient allocation of concessions

Social Issues• Need for better community participation in

terms of livelihoods, poverty, unemployment,and gender

• Need for community benefits and benefit sharing• Low capacity to engage in processes affecting

communities• Need to capitalize on processes already taking

place within communities• Cultural and religious issues• Importance of charcoal• Demand for timber and non-timber products

Governance and Institutions• Focus on community empowerment and devolu-

tion• Corruption• Role of public-private partnerships • Participation• Active enforcement• How to finance the new forestry service, refining

the strategic plan and road map to ensure effec-tive delivery

• Extent of political interference in the forest sector

Source: FRR, 2007.


its jurisdiction. One institutional problem be-tween the FD and the KWS that should be ad-dressed in the forest sector reforms is theoverlap in mandates, especially in areasgazetted both as forest reserves and nationalreserves.

• Though mandated to take care of trust landforests, forest conservation is not a core func-tion of local authorities. Most local authoritieshave low forest management capacity and arepoorly run; corruption and political interfer-ence has contributed to most of the trust landforest loss.

• Forestry research is offered by the KenyaForestry Research Institute (KEFRI). KEFRIundertakes research for sustainable develop-ment of forests and allied natural resources.KEFRI has major constraints in execution ofits activities, mainly arising from low capac-ity (especially to publish and disseminate re-search findings, meet increasing demands fortree seeds, implement information technol-ogy, and generate revenue) and inadequatefunding.

• The National Environmental ManagementAuthority (NEMA), established by theEnvironmental Management and Co-ordina-tion Act (EMCA) of 1999, is supposed to pro-vide overall coordination of all mattersrelating to the environment and be the princi-pal instrument of government in the imple-mentation of all policies relating toenvironment. However, it has limited capac-ity to effectively play this role. It is expectedthat all sectoral environmental laws, includ-ing forestry legislation, will be revised andharmonized with the provisions of this frame-work law. This is deemed necessary becauseof conflicts in much of the current legislation.

• Lack of clear linkages of the ForestConservancy Committee (FCC) with othercommittees such as the catchment areas com-mittee under the Water Act 2002 pose a chal-lenge to the new institutional setup of forestmanagement.

• Other issues related to governance and pro-moting forest loss are undervaluation offorests and rising poverty levels among localcommunities.

Challenges presented by lack of independenceand political interference include:

• The transformation of the FD to the KFS willbring on board new institutions, namely theKFS Board, Finance Committee, FCC, andCFAs. The Forests Act 2005 stipulates howthese institutions will be formed and how ap-pointments are to be made. It is well knownthat most appointments have in the recentpast been politically based and in some cases,ministers have abused their powers.

• The Constitution should guide sector re-forms; currently the Constitution is in theprocess of being reviewed and if it takes a dif-ferent direction than the one proposed by theact with regard to management of natural re-sources, conflicts may arise. The proposednew Constitution’s provisions rejected lastyear through a referendum on devolutionwould have had direct implications for themanagement of forest resources. Two objec-tives of devolution are to recognize the rightof local communities to manage their ownlocal affairs and form networks and associa-tions, and ensure equitable sharing of na-tional and local resources. These wouldimpact the management of forested areas andthe location for management of devolvedlocal government.

• The proposed involvement of local communi-ties is a good intention; however, some of theemerging local community associations arenot genuine in partnerships and others aredriven by self interest, but most important isthat most will require capacity building.

• Political will and transparency in running ofthe KFS are prerequisites to ensuring effectiveimplementation. Incentives need to be cre-ated in government to run the KFS properlyand effectively for sustainable forest manage-ment.

• Resources are sorely needed. One of the con-straints in forest management, especially forprotection and management of forests, is thelimited capacity and low funding in FD andother lead institutions, which should be ad-dressed in the implementation of the new act.Monitoring mechanisms should be estab-lished for effective implementation of the act.


• The setting up of clear institutional mecha-nisms, clear incentive policies to promote private sector and local community involve-ment, clear requirements and conditions forpartnerships, clear conditions and criteria fordeclaration of provisional forests, and newtechnologies that enhance efficiency areneeded.

Key Environmental Considerations

• Environmental issues and stakeholder con-cerns associated with the new Forests Actvary greatly between the different forest re-source types in Kenya, that is, plantationforests, indigenous forests, farm forests, dryland forests, private forests, and local author-ity forests.

• Many of the issues that have arisen from thissituation assessment are cross-cutting. Issuessuch as water catchment management,wildlife, agriculture, land tenure, and landuse policy among others are all relevant to thenew act but do not necessarily fall under thecontrol or management of KFS. It will be im-portant for the new KFS to link and work witha number of different government depart-ments to ensure effective and sustainable im-plementation of the new act.

• An ecosystem management approach is pro-posed for the management of natural re-sources in Kenya. It, however, is not clearwho will be responsible for defining andoverseeing this policy and how other agenciesand departments will be involved in the im-plementation.

• Selecting appropriate forest conservancyareas is crucial. The process of defining theboundaries of the future forest conservancyareas is understood to be almost complete. Inmost cases, these follow established adminis-trative boundaries and also coincide withwater catchment boundaries that are beingused in the development of water catchmentagencies.

• The issue of how conservancies will relate toother administrative areas remains unclear. Itis not clear how these conservancy areas willbe selected and how these will relate to otheradministrative areas such as water catch-ments. To ensure the environmental sustain-

ability of new policies and programs inKenya, it will be key to ensure these differentapproaches are harmonized.

• Charcoal constitutes the only fuel for approx-imately 65 percent of Kenyan households andits sustainable production needs to feature inenergy policy. At present, most charcoal isproduced illegally on council, trust, and com-munity lands, causing major environmentaldamage. The Forests Act recognizes the sig-nificance of charcoal production and makesprovision for it to be legalized. This has majorsocial, environmental, and economic implica-tions that are discussed in chapter 5.

• Rehabilitation of degraded forests by the KFSis given due attention in the new act; how-ever, it is not clear how the KFS will deter-mine priorities for action given the poor stateof many existing local authority forests.

Key social considerations

• The draft Forest Policy set forth in “SessionalPaper No. 9” (GOK 2005c) currently awaitingcabinet approval contains a range of good so-cial objectives for the forest sector that capturepoverty issues, participation, livelihoodstrategies, gender, HIV, and equity issues.Ensuring that this policy is formalized so thatit can shape the implementation of the newact will be key to ensuring social objectivesare achieved.

• Establishing clear and transparent mecha-nisms for benefit sharing of forest revenuesaccrued from sustainable forest management,as proposed in the new act, will be critical forensuring communities benefit financiallyfrom the resource. Failure to establish suchmechanisms may result in mistrust and com-munities unwilling to engage in forest man-agement.

• There is a need to incorporate best practicefrom participatory forest managementwithin Kenya, and more widely in the re-gion, to ensure that the new guidelines andsubregulations have the desired positive so-cial impacts.

• There are important linkages between poverty,forestry, and health (see box 3.4) that need tobe taken into account in the implementation ofthe new Forests Act.


Key Economic and Financial Considerations

• Implementation of the Forests Act will requiremajor reforms within the FD to transform it tothe KFS. This calls for large inputs in areas ofcapacity building and forest management thatare not available in the government budget.Development partner funding will be re-quired to fund these components if they are tobe implemented in a timely manner.

• The FD currently manages all state forests. Atpresent, the income generated from theseforests is not enough to cover the manage-ment costs incurred. From the analysis, it isclear that under the new Forests Act the KFS

has the potential to raise enough revenue forall its activities and within 10 years accumu-late savings while at the same time givingmoney to community-managed forests.

• Good forest management practices advocatedby the new Forests Act are intended to removemajor constraints to realizing optimal returnsfrom the forests, for example, lifting the cur-rent harvesting ban in plantations and im-proving revenue collection systems (for asummary of the financial appraisal see box3.5). This is expected to raise revenues from thecurrent 30 percent levels to over 95 percent ofpotential revenue, shortening the period inwhich the KFS can become self-sustaining.

Box 3.4 Relationships Between Poverty, Health, and Forestry

To set the context for a review of community parti-cipation and benefit sharing issues, it is appropriateto provide a brief summary of conditions foundwithin most forest community areas. Some 80 percent of the population of Kenya lives within thearea where the major forests exist, which accountsfor only 10 percent of the land area. This gives rise to many of the direct conflicts between people, their livelihoods, and their environment. It is esti-mated that 3.8 million people live within 5 kilome-ters of forest resources. In 2003, 2 million people,14.6 percent of the labor force, were unemployedand forests provided a resource safety net for manyof these. This role is enhanced in times of droughtwhen forests may be the only areas providing grazing for livestock, especially in arid areas.Increased pressure on environmental goods and services, especially forest products, is recognized in the Millennium Development Goals Status Report 2005 as one of the main indicators of poverty (GOK 2005b). Kenya’s economic perfor-mance between 1990 and 2002 was well below its potential and as a result annual per capita income at constant 1982 prices fell from US$271 to US$239.

The spread of HIV/AIDS has affected 7 percent ofKenya’s population, over 60 percent of whom live inrural areas. Given the high cost of antiretroviral drugs,many people are turning to natural medicines foundlargely in indigenous forests. Demand for such plantsand fuelwood are increasing pressures on forests(Mbugua 2003). The government has recognized thatthe HIV/AIDS pandemic may be causing a shortage ofskilled and unskilled labor and this is being experi-enced in the forest sector (GOK 2005b).

A further health concern relates to the use of fuel-wood and charcoal as the principal sources of energyin homes. As many as 18 percent of children sufferfrom acute respiratory infection, which is caused byincomplete combustion of wood and biomass and canbe fatal in children.

Many of the excluded and vulnerable groups insociety are found in forest areas and are denied par-ticipation in development processes, whether gov-ernment or community led. People directly affectedinclude women, youths, the elderly, those with dis-abilities, and members of marginalized tribes.

These issues are cross-cutting ones that affect al-most every aspect of the new Forests Act and the roleof communities in future forest management.

Source: FRR, 2007.


Box 3.5 Summary of Financial Appraisal

Existing revenue sourcesThe FD has been operating in the role of a caretakeradministration since 2002, following an initial reviewthat saw most staff suspended because of poor perfor-mance and financial irregularities. Its capacity hasbeen seriously affected by lack of resources. For manyyears, income has been greatly reduced as a result ofthe complete ban on indigenous logging and partial

ban on harvesting from plantations. Despite theseshortcomings, FD has achieved some notable successin raising revenue in the last two years. Between1999–2000 and 2003–4, revenue collectionamounted to less than K Sh 100 million per year. Thisrose by 700 percent in 2004–5 to K Sh 500 million.See figure below.

The improvement in performance stemmed largelyfrom the change in political leadership of the MENR,which approved an increase in the price of wood pulpfrom K Sh 315 to K Sh 700 per cubic meter in 2004.Previously the price of pulp wood had been held downby the combined resistance to increased charges fromestablished sawmillers and Kenya’s single pulp andpaper mill, Pan African Paper Mills (PPM). A contribu-tory factor was the decision to direct PPM to make pay-ments for pulp products to the Forest District, rather

than to the MENR, where revenue collection could notbe effectively monitored within the general funds. It isnotable that these measures resulted in revenues fromroundwood log production rising from K Sh 50 millionin 2003 to K Sh 509 million in 2004.

Further measures for improving revenue collectionand monitoring are presented in part three of the policy action matrix, based on the SEA research andthe limitations in existing systems illustrated in thefigure below.

Revenue Collection in the Forestry Sector

Source: Forest Department.

(continued)

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


Box 3.5 Continued

Factors Contributing to Poor Revenue Collection

Projected revenueAn assessment of revenue streams over the period2007–8 to 2014–5 has been made, providing a “bestcase” model of future income for the KFS. It is basedon assumptions that royalty rates will be further en-hanced, a timely and well-organized transition fromFD to the KFS will occur, new revenue will be intro-duced, and existing leakages in revenue will be

stopped. Under these conditions, projected revenuecould rise from K Sh 1.57 billion in 2007–8 to K Sh4.29 billion in 2014–5. Some 70 percent of this rev-enue will continue to be drawn from royalties on tim-ber sales, but new sources will include legalizedcharcoal production, sale of bamboo, and provision ofenvironmental services and professional services. Seefigure below.

Projected Revenue for the Kenya Forests Service

Source: FRR 2007.

x x =Area yield priceRevenuecollected

• Inaccurate reporting due to poor area measurement• Illegal cutting of some parts of a forest before assessment• Excision of existing plantation for other purposes• Deliberate under reporting by the assessment team for revenue calculation

• Poor assessment resulting in lower volumes than actual• Under reporting by the assessment team in collusion with the buyer• Poor forests

establishment• Loss of trees through animal damage and fires

• Prices can be lower than the true value due to method used to set them• Prices could be dictated by higher government authorities

• Non collection of revenues even though calculated

and invoiced• Revenues collected but not booked or reported• Plantations earmarked for cutting and even 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

500045004000350030002500200015001000500

007 08 09 10 11 12 13 14

KSH

000

Years

Other revenueFuelwood & PolesTimber Plantations

(continued)


• In the fourth year after the KFS is estab-lished, revenue is expected to exceed expen-ditures and analysis shows that net presentvalue turns positive in the same year; this in-dicates that the new Forests Act will createan environment conducive to sustainableforest industry yielding returns for the in-vestor in 10 years.5

5 There are several assumptions underlying this projectionwhich are detailed in Appendix 7. For example, it is assumedthat the total plantation area available for harvesting is120,000. The calculation also uses a conservative estimate ofannual area for harvesting based on rotation period for spe-cific species and optimal yields. Using different assumptions,the period prior to KFS financially breaking even is longer(World Bank, 2007).

Box 3.5 Continued

Donor support contributes only 7 percent to the current annual FD budget of around K Sh 1.3 billion.However, this aid represented more than 50 percent of the department’s development budget in 2005–6.Further increases in donor support are anticipated in2007; these will need to be channelled with care toavoid exceeding the capacity of the reform committeesand secretariat to direct and service the investment.

Projected expenditureEstimates for future expenditure are based on assump-tions about the way in which the forest sector reformswill proceed. The KFS will play the central role in administration and regulation of the forest sector. Forit to achieve this goal, the following tasks are seen ascritical:

• Changing working attitudes and professionalethics

• Reducing the number of subordinate staff • Retraining forest guards (through Londiana

Forest College)• Increasing the number of lower-grade profes-

sional staff• Developing strategies to cover increased respon-

sibilities for forest management and regulationoutside the gazetted forest areas

• Involving communities and private sector in forest management

A roadmap and three FD programs have been prepared by the reform committee. These cover

• forest sector reforms (training in industrial capac-ity, subsidiary legislation, capacity building for3.8 million people in forest areas, and creationof community associations),

• KFS (organization, resource assessment, and ca-pacity building), and

• forest development programs (relating to naturalforests, industrial forests, farm forests, and dryland forests).

Projected expenditure to deliver these programs be-gins at K Sh 3.5 billion in 2006–7 and rises to K Sh3.85 billion in 2007–8 before falling back and stabiliz-ing at around K Sh 3 billion from 2010–11.

The budget for establishment of the KFS shows agap between revenue and expenditure of K Sh 2 bil-lion in the first two years, which falls to break-evenstage within four years,a after which the service is pro-jected to move into surplus. There are, however, seri-ous reservations that the necessary organizationalstudies can be put in place to equip the KFS to do itsjob, and that staff with the appropriate skills and ex-pertise can be recruited without rolling over the ma-jority of existing FD employees, some of whom maynot be qualified or sufficiently adaptable to take onradically different roles from their present posts.

Source: FRR, 2007).

aThere are several assumptions underlying this conclusion. For more details on the assumptions please see Appendix 7.


LOCAL LEVEL SITUATIONASSESSMENTS: KEY ISSUES ANDCONCERNS IN HOMBE ANDRUMRUTIIn Hombe and Rumruti community groups havealready been formed and are known to be active.The issues raised by the planned reforms are alsobeing carefully considered and debated by thesecommunities.

Challenges with Management

Hombe Forest. The area of Hombe Forest fallsunder the administrative jurisdiction of both FDand Kenya Wildlife Service (KWS) because thatpart of Hombe Forest is gazetted as a forest reserve(Forests Act CAP 385) and also as a NationalReserve under the Wildlife Act. Competing objec-tives form one of the underlying reasons for failureto agree on a strategic management plan for the en-tire Mount Kenya Forest. The basic conflict arisesbecause KWS’s mandate requires it to protectwildlife and prohibit use of forest resources withinNational Reserves, whereas FD encourages useand also seeks to control movements of elephants,which cause extensive damage to plantations andcommunity crops.

The present conflicts in purpose are also com-plicated by the need to give careful attention to theDistrict Development Plan, which advocates theexpansion of agriculture to support the expandingpopulation6 of Nyeri District. This, in turn, requiresthe development of water resources. Furtherchanges need to be anticipated through the proba-ble review of the existing Wildlife Act, which willadd another new natural resource act to be inte-grated alongside the Forests Act 2005, the WaterAct 2002, and Environmental Management andCo-ordination Act 1999.

The history of management within Rumurutihas been poor and the low level of staffing and lackof morale among FD staff has provided insufficientdeterrence to individuals seeking to exploit forestresources illegally. The main threats come fromlogging of podocarpus trees. These are usually cutwith a chain saw and felled during the night andthen left for two to three months to dry. The fallentree is then cut into logs that are removed by don-key to the nearest road. The timber is loaded intotrucks and transported out of the area.

Tensions clearly exist between the communityassociation and the FD relating to the failure of thelatter to prevent illegal logging and other damag-ing activities within the forest.

Community Involvement

Both Hombe and Rumruti have active communityassociations. These associations and their NGO col-laborators have promoted various initiatives. Amajor education campaign has been initiatedthrough local schools to build environmentalawareness and promote creation of tree nurseries.The campaign extends to the production of muralson buildings and commissioning of songs with aforest and environmental theme that are played onlocal radio stations.

Historically, in Hombe large amounts of woodwere cut for charcoal making within the forest.Such practice sometimes resulted in extensive for-est fires. The community has taken measures to re-duce the incidence of illegal charcoal making byarranging for the community to clear areas of scrubinvasion on farmland for fuelwood and charcoal.

Honey is still harvested in a totally destructiveway by felling the trees containing wild coloniesand cutting out the comb from the fallen hollowlogs. This operation destroys the colony and re-duces the population of wild bees from whichswarms can be taken. In an effort to reverse thistrend, beekeeping is being encouraged by Tree isLife, a local NGO.

Financial Provisions

District Forest Offices (DFOs) are financed by theMinistry of Finance (the Treasury) and operateunder provincial administration. The funds areprovided based on available budgets rather thanthe district’s budget requirements or capacity toraise revenue. Allocations to individual stations arebased on the overall pool and judgments made atdistrict level. Hombe is one of nine forest stationswithin Nyeri District but receives only 6 percent ofthe district allocation.

6 Records (subject to qualification) suggest that the number ofpeople living in the district has risen from 360,000 in 1969 to677,000 in 1999.


For the Hombe Forest area, political interestsmade it difficult in the past for the district forest of-ficer to adhere to the available district budget dueto pressure to spend funds on unplanned butemerging activities. Furthermore, because financialpayments are under the control of only one districtaccountant who is responsible for all the ministries,the funds released are often inadequate and, oftentoo late to be of use for essential activities.

Other funding for environmental coordinationand regulation in the forest sector is provided, intheory by NEMA but there is no distribution at for-est station level. Provincial and district staff ofNEMA have to rely on support from other govern-ment departments to cover equipment and travelcosts, which restricts their capacity to challengethese departments for infringements when theseare reported at provincial or district environmentalcommittee meetings.

Analysis of some of the recent financial recordsof Hombe Station and calculations of potentialcosts and revenue under the new act indicate thatsuccessful implementation of the act could result inrevenue generation. The analysis of expenditureduring the year 2005–6 suggests that Hombe re-ceived in the region of K Sh 2.4 million coveringstaff salaries. In the same year, the income gener-ated from all sources amounted to under K Sh 0.5million. These figures suggest that Hombe Forest isa major liability in economic terms, costing fivetimes as much as it generates. However, these fig-ures represent the present situation in which few ofHombe’s substantial assets are being utilized.

The potential of Hombe Forest under the newact was assessed by estimating the cost of a realis-tic level of inputs to process timber sustainably andexploit non-timber forest products and, at the sametime, calculating the benefits that would accrue.Placing Hombe on a secure operating base underthe new act is estimated to require an expenditureof K Sh 9.5 million in the base year of 2007, but thiscould generate an income of K Sh 20.6 million inthe same year, converting a loss into profits of over100 percent.

Competing Land Use

In Hombe local people have invested a great dealof their time and effort in replanting and manage-ment of the emerging plantations has understand-ably created a very strong community view that

the “forest is ours,” but there is also a pragmaticrecognition of the role of the FD and the status ofthe land as a national resource.

Benefits gained by communities from forest re-sources are already substantial. They include graz-ing, grass collection, water, fuelwood, sticks forplant supports, bee-keeping, and a limited engage-ment in eco-tourism. A number of these activitiesare controlled by local groups, including water ab-straction, beekeeping, and fishing

Issues of land for homes, water, agriculture,wildlife, forestry, and ecotourism, however, alljockey for attention and status. Demand for graz-ing land is very high and in drought conditions cat-tle are driven into Rumuruti Forest to takeadvantage of the shade and additional forage. InJune 2006 it was estimated that there were in excessof 6,000 head of cattle in the forest, compared withits natural carrying capacity of 600 animals.Overgrazing by cattle has severely damaged theground cover in most of the outer forest areas.

In addition to pressures from livestock,Rumuruti has recently also attracted elephants.These animals have migrated from other forest re-serves and there are currently 30 adults that causesubstantial damage both within the forest and onadjacent farmland.

Encroachment, Eviction, and Resettlement

In Hombe Forest there has been a long tradition ofsquatting within the forest reserve and about 500households have been evicted and now live inmakeshift camps along the roadside. They includefarmers who were relocated when the shamba sys-tem was banned in 1989. A second group lives ongovernment land but without the benefit of landsecurity. While socially excluded from the commu-nities, squatters are given support (for example, bybeing exempt from the need to make payments forcollecting fuelwood). The fact that some familieshave been homeless for over 18 years is sympto-matic of the pressures that rising population con-tinues to bring to communities living in the vicinityof the country’s forest reserves.

In 2001 the Government sought to excise 717hectares of clear felled forest land. Local communi-ties reacted strongly against the plans because ofhow the land was going to be allocated and the po-tential environmental and micro-climatic impact ofremoving tree cover. Hombe communities demon-


strated against the government’s plans, whichwere thwarted by the general election, and thecommunities have since played a major part in sup-porting the FD in establishing thriving plantationsacross the entire deforested area.

Experience in Forming CommunityAssociations

Hombe is an area within which there is already alot of community activity and anticipation aboutthe opportunities presented by the Forests Act.Three forest associations exist: Hombe ForestAssociation, Hombe Neighbouring Association,and Kagati-Kaimati Association. The first of theseis already registered, while the others are awaitingtheir certificates. Proper structures and adminis-trative and financial arrangements are in place forall three. The main strengths of these organizationsare considered to be:

• community unity,• willingness to cooperate and community

drive,• manpower (for forest activities),• community dedication and commitment,• good local knowledge, and• a strong community voice in decision making.• Potential weaknesses include• financial limitations,• lack of professional forestry knowledge,• other capacity constraints, and• potential conflicts of interest between associ-

ations.

In Rumuruti, an active Community ForestAssociation (CFA) was created through the per-sonal drive of the chairman and a few individuals.The CFA succeeded in preparing a detailed man-agement plan for Rumuruti. Despite the enthusi-asm of the community, there is reported to havebeen only limited support and response from theDFO. Also, although only one CFA exists inRumuruti, this does not eliminate aspects of localpolitics entirely.

Future Partnerships Between Communitiesand the Private Sector

The community view of future private sector in-volvement is based on prior experience of wide-scale felling and failure to replant. Communitiesare determined to see local peoples’ investment inreestablishing forest cover fully recognized andcompensated in any future harvesting plans.Community representatives clearly distinguishedbetween private investors who are themselves partof the community, like saw millers, and large na-tional or multinational companies that have noroots or links with the area.

ONGOING AND POTENTIALINVESTMENTIn the early 1990s, Hombe was a productive forestarea with a thriving local sawmilling industry, gen-erating between K Sh 0.4 million and K Sh 1.9 mil-lion per year. The indefinite presidential ban ontimber harvesting imposed in March 2000 halted allproduction and resulted in the closure of the fourlocal sawmills. An estimated 1,000 jobs were lost.

There are major opportunities for increasing theproductivity of Hombe Forest within a strictly sus-tainable management regime. For this to beachieved, investment will be required by all parties,including private sector businesses, individuals,communities, and the state. Table 3.6 illustrates thenature of these opportunities and the principal in-vestors.

Experience in Rumuruti Forest suggests that themost promising areas for investment will lie infarm forestry and new plantation initiatives onland outside the main forest area, and a partner-ship approach led by the CFA within the forest.Educational training programs and ecotourismoffer some potential in this area.

With proper rules and regulations, most stake-holders will gain from the implementation of theact. However, the case study of Hombe Forestclearly shows that small-scale sawmillers will loseout because of capital requirements and efficiency.KFS as custodian of the forest will act as the “bigbrother.” In the absence of community cohesive-ness, local communities will also lose out in certainareas because the KFS may not enter into any part-nership with community associations that are notstrong and representative.


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 CommunitiesShamba rent Community-KFS partnershipGrazing licenses (cattle and sheep) Community-KFS partnershipGrass harvesting, beekeeping Community-KFS partnership and local groupsEcotourism Private sector and communitiesWater catchment management Community-KFS partnershipCarbon trading Community-KFS partnershipBamboo and other non-timber plant species Community-KFS partnership

Source: FRR 2007.

31

The considerations identified in the national and local situation as-sessments and key issues identified through consultations (see Box4.1), 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 benefit sharing• Enabling investment in the private sector

Most actions can be pursued under one of these three principalareas. 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 ForestService 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 resourcelegislation

– developing an enforcement strategy establishing an interna-tional standards compliance committee within the KFS

– annual audits and mid-term review of the strategic plan andassociated business plan

– external supervision of transparent procedures for staff ap-pointments

• Ensuring proper strategic planning of the forest resources ofKenya 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 toannual audits

– preparing a manual and guidelines for preparation of forestmanagement plans

Priority Areas4


• Realizing the economic value of these re-sources for the nation, by – developing a national forest data bank– preparing a framework for the provision of

incentives (including incentives for poten-tial losers under the new act and incentivesfor investment through national subsidiesand tax breaks)

– a clear policy brief on the role of farmforestry in the new Forests Act and how itcan contribute to the sustainable use of for-est resources

– prioritizing promoting restructuring of theforestry industry and raising overall stan-dards. It is recommended that a forest in-dustry forum be established to promote bestpractice in Kenya

– establishing staff training programs tocover areas of activity and responsibilitythat are new to the KFS

• Achieving effective financial managementand regulation of the forest sector through– guaranteed financial support for the KFS

from the government set on a tapering scaleover the period required for KFS to be fi-nancially viable

– identification of external funding sourcesthat can cover projected shortfalls

Community participation and benefit sharing whichincludes:

• Ensuring that all forest communities, andcommunities adjacent to forest areas, areproperly involved in decision making and im-plementation activities as per the new ForestsAct. This would require: – an inventory of existing community partic-

ipation processes in Kenya;– preparation of guidelines on the establish-

ment of CFAs– pilot studies on guidelines for Community

Forest Association (CFA) formation, part-nerships, and management of different for-est types should be undertaken

– a study reviewing how arid and nonmoistforests can contribute to poverty reduction

• Developing a policy on how women and ex-cluded groups will be engaged in communityforest associations. This would also include: – developing rules to ensure fair election and

representation of CFAs on area conserva-tion boards

– a capacity-needs assessment should be un-dertaken to establish what skills are neededby CFAs

Box4.1 Key Issues Identified through Consultations based on Situation Assessments

• Providing adequate funding for the KFS• Preparing forest management plans• Developing partnerships with registered CFAs• Improving staff morale• Achieving effective community participation• Providing incentives• Safeguarding the interests of customary users• Selecting appropriate forest conservancy areas• Upgrading management of all forests• Establishing joint management of plantations• Achieving transparency in management

agreements• Securing independence of the KFS

• Securing independence of members of the KFS Board

• Protecting water catchments• Achieving ecosystem management• Appointing an independent Director of the

KFS on merit• Setting up an effective and fair system of

concessions• Protecting the user rights of CFAs• Developing the role of NGOs• Dealing with charcoal production and

transportation• Establishing the KFS

Source: FRR, 2007.

Priority Areas 33

• Equitably sharing the costs and benefits of theforest sector among communities, private sec-tor, and government. This will require– clear and transparent accounts showing the

annual income and expenditure of individ-ual forest areas, and the income attributedto each CFA

– preparation of guidance notes (in local di-alect) on community benefit sharing of dif-ferent activities

– a study on how to arrange payment for en-vironmental services and valuation ofecosystem services

• Protecting indigenous and customary accessand use of forest resources. This will require,amongst other things,– clarification regarding whether community

council and trust land in arid and semi-aridareas (making up 80 percent of Kenya) willbe classified as forest and access for grazinglivestock will be restricted under a “con-ventional” approach to management plans

– A charcoal regulatory framework should beprepared with specific standards and a cer-tification process.

• Enabling equitable and fair partnerships. Thisshould include – preparation of pilots on different types of

partnerships for management of plantationforests

Enhancing investment in the forest sector helps en-sure the right mix of public and private investmentto enable the sustainable management of the forestsector, which contributes to the national goal ofpoverty reduction. This will involve

• Creating an enabling environment for privateinvestment (both corporate and community)in the forest sector. This will require– KFS to undertake a review of training pro-

grams with a view to introducing and sup-porting programs that are directed atmanufacturing and marketing of timberand non-timber forest products.

• Enabling and strengthening partnerships. – Each of the forest management plans

should include an investment strategy thatshould be worked up jointly by representa-tives of the affected CFAs and private sectororganizations.

– Rules and regulations should be preparedto ensure incentives to private forest ownersto deliver wider benefits to communitiesliving adjacent to forests are in place.

– Prepare training aids on the model agree-ments for communities and training work-shops for all registered CFAs and privatesector investors

• Improving transparency and accountabilityof investment activities. This will require– Developing model agreements where rights

and responsibilities of different parties andproducts are clearly laid out

– The KFS develop criteria, standards, andguidelines to indicate what conditions willconstitute inadequate management of localauthority and private forests.

– All contracts, concessions, royalty agree-ments, and other licenses and leases shouldbe published once the terms have beenagreed on.

– Clear rules and regulations are required formanagement of private forests.

– Provision of a clear regulatory framework in-cluding Environmental Impact Assessment(EIA) and other evaluation tools that are fitfor purpose and do not impose an unaccept-able burden on industry.

CONSIDERATIONS FROM THELOCAL SITUATION ASSESSMENTThe local situation assessment provide some im-portant considerations to each priority area.

Strategic Planning and Management of KFS

Serious attention needs to be given by the KFS andits new joint partnerships to proper recording of as-sets, income, and expenditure starting with thesmallest enumeration area (which is likely to re-main the forest station).

There is a clear need to simplify responsibilitiesfor management of watersheds, forest areas underdual gazettment, and management for biodiversityand the country’s gene pool. This highlights the im-portance of NEMA’s role and the need for harmo-nization of the activities of different ministries andlead agencies.


Greater cooperation is required between gov-ernment agencies in developing strategic plans,and competing objectives for land managed underdifferent types of legislation must be resolved atthe national level (for example, the competing ob-jectives between KWS and KFS).

Management plans need to be prepared specify-ing the long-terms goals and the means of achievingthese through phased programs of development. Itis important that these plans are owned by localcommunities so that the tendency for local politi-cians to exploit forest resources for short-term gaincan be minimized.

It is important to transfer financial control fromdistrict administration to the new KFS in order toremove a major obstacle to more effective and effi-cient forestry practice.

COMMUNITY PARTICIPATIONAND BENEFIT SHARINGThe existence of multiple CFAs may create real dif-ficulties for the new KFS in deciding how to workeffectively with the different groups and in devel-oping effective legal partnerships. Equitable distri-bution of benefits to communities may be hard toachieve where there is a multiplicity of associa-tions.

It is essential that clear guidance be given tolocal communities and other agencies about the po-tential that forestry offers to an area like Hombeover the time scale of 15–20 years and/or the min-imum time scale for planning a single rotation offorest plantations.

INVESTMENT IN THE FORESTSECTORInvestment needs to be made for a forest station tobecome self financing. In addition, greater empha-sis needs to be given to resource assessment andmanagement and to efficient revenue collection.Every forest district would benefit from construct-ing a simple business plan showing projected in-

come and expenditure over a time horizon relatingto the forest rotation cycle.

It can be harder to develop the economic re-sources of a forest that is largely composed of in-digenous trees rather than plantations that offer animmediate return. In such areas it, therefore, maybe appropriate to focus on establishment of farmforestry in the surrounding region. This would fa-cilitate short term returns while also assisting to re-duce pressures on indigenous forests.

A major challenge for the private sector will beto show proper understanding of communityneeds and a willingness to work in true partner-ships with community associations. Any futureplans to involve the private sector specific forestswill need to be developed within the context of adetailed management plan and legal agreementthat guarantees that a fair proportion of the bene-fits arising from sustainable timber production arereturned to the communities, and that the commu-nities can influence which areas and stands of treesare felled in any given time horizon.

The critical ingredients for securing effectivepartnerships and individual investments will lie inproviding:

• clarity about the long-term aims for manage-ment of the Hombe Forest resource,

• positive incentives to take risks with capital inadvance of returns,

• strong and unambiguous rules and regula-tions,

• confidence that political interference and“changing the rules of the game” is a thing ofthe past,

• trust between partners and effective ways ofresolving any disputes that do arise, and

• assurances that legally binding agreementswill be honored by all parties.

Potential losers under the new legislation in-clude small-scale private operators and investorswho do not have the advantages of economies ofscale. However, this problem could be overcomethrough promotion of appropriate incentives forsmall and medium enterprises.

35

The priority areas identified by the SEA reflect concerns that havebeen raised regarding Kenya’s forest sector for more than a decade.For example, the Kenya Forestry Master Plan (KFMP), produced bythe Ministry of Environment and Natural Resources in 1994 (MENR1994a) presents the threats posed to Kenya’s forests and the need foreffective planning and management of these resources.Unfortunately, few of the proposals and recommendations of thePlan were acted on by the government at that time, and many of theproblems, including illegal logging and excision of forest areas, have,over the course of time, become more severe. Essential elements ofthe KFMP, however, have now been translated into the draft ForestPolicy and new Forests Act 2005.

Part of the role of the SEA has been to explore the impedimentsstanding in the way of achieving the goals, aims, and objectives of thenew act and to suggest priorities for immediate action that can be in-corporated in the road map already prepared by the Forest ReformCommittee. In line with its objectives, the SEA has, for example, iden-tified that because of political inertia, corruption and mismanage-ment virtually no concrete measures have been taken to rationalizeKenya’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 reformprocess and the commitment of all major players, including govern-ment and donor organizations, to deliver effective solutions. Theproblems and issues are well known and initial steps have been takento create an appropriate governance structure for forestry, howeverseveral 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 areasidentified in the SEA, and details specific actions.7 The objective is toinform efforts to address those impediments to effective implementa-tion of the new act and to suggest priorities for immediate action.

Scope for Action5

7 It should be noted that the specific actions discussed here were formulated byDecember 2006. By the time this document was published some of the actions rec-ommended were implemented while in other cases the specific action is no longerrelevant. The status of specific actions (as of early July 2007) is reflected in the pol-icy action matrix in Chapter 6.


STRATEGIC PLANNING ANDMANAGEMENT OF THE KFSVarious elements to strategic planning and man-agement of the KFS are detailed below.

Governance

Independence of the KFS, the Board, and its Director.The Forests Act 2005 introduces major reforms butconcerns remain among SEA stakeholders thatthese may not be sufficient to prevent manipula-tion of the Board and Director for political motives.Measures should be taken to ensure that the KenyaForest Service (KFS) Board should be independentof government and board members and theDirector should be able to discharge their functionsand duties without fear of political pressure. Thepolitical process should play a proper part in de-termining future forest policy from the national tothe local level, but this activity should take placethrough democratic planning involving the KFS,registered community forest associations (CFAs),and the private sector.

Reducing political interference is a key aspect tothis independence. The new KFS provides a vehi-cle for avoiding or reducing such pressures. It,however, will not be immune to attempts by polit-ical interests to channel policy or planning deci-sions in particular directions at the conservancyarea or the local level. Politics should not be al-lowed to sidestep or ignore established manage-ment plans, or put undue pressure on officials tomake decisions that are contrary to such plans.

To facilitate transparency, the appointment ofthe most senior post holder (the Director) shouldbe secured through open advertisement. An inde-pendent interview panel to ensure the decision isbased on merit should be used.

Cooperation among key agencies and departmentsneeds to be strengthened. There is a clear need to en-sure integrated management of forest areas that arealso important water catchments, have high biodi-versity value, and are promoted for ecotourismand other purposes. Discussion with the principalgovernment ministries and agencies has revealed acommon concern that indigenous forest has beengreatly reduced in area and what remains of thesenatural areas should be protected from unaccept-able levels of use. This is linked with the need to ex-tend plantations to provide the equivalent of 10percent forest cover within a realistic time frame.

Closer cooperation is urgently needed betweenministries sharing responsibilities for the same tractsof land; for example, forests located within watercatchments, which are particularly important fortheir biodiversity. Close collaboration with theMinistry of Lands and Housing is also a priority inorder to address resettlement issues. Recent legisla-tion dealing with natural resources (EnvironmentalManagement and Co-ordination Act [EMCA] 1999;Water Act 2002; Forests Act 2005) shares a commonunderstanding of the need for holistic planning toprotect and enhance the environment, creating op-portunity for improved coordination. The new leg-islation moves beyond reliance on Memoranda ofUnderstanding. The latter have largely failed in thepast as the basis for agreeing on the actions to betaken by the constituent authorities.

Accountability and Transparency

Inventory of Kenya’s Forests. The new remit of theKFS is broader than that of the Forest Department(FD) and it is essential that the new service shouldhave proper information and data on the natureand distribution of the various forest types inKenya including dry land forests, local authorityforests, and farm forests as well as indigenous for-est, industrial plantations, and coastal and rivercorridor forests. Inventory of Kenya’s forests is apriority as the last detailed inventory was under-taken in the 1980s under the Kenya IndigenousForest Conservation Programme (Wass 1995).

Strategic plan for the forest sector. KFS must refineits strategic plan to reflect the organization’s aim,vision, mission, and organizational structure. Afive-year strategic plan (as adopted by KWS) is ef-fective ways of ensuring public bodies remain in-dependent and accountable. The plan should clarifywho are seen as the main customers and what resultareas these customers can expect. Each result areashould have goals, a rationale, strategies, and ac-tions associated with each goal, the outputs associ-ated with each strategy or action, and some keyperformance indicators (for accountability).

The strategic plan should define the volume oftimber to be grown from plantations and the mostfavorable areas for planting. The development ofthis strategy should involve all key stakeholders.The private sector should be encouraged to put itsown ideas forward, alongside those of the KFS.

A business plan should accompany the strate-gic plan. The business plan should capture staff

Scope for Action 37

requirements, detail the core assets of the service,and project the receipts and expenditures associ-ated with any service and product that the KFSwill be providing.

Clear articulation of the role of plantations.Historically, the shamba system was used for plan-tation establishment. Where this system wasabused, trees were either not planted or poorly man-aged after felling resulting in poor plantation estab-lishment. Under the terms of the act there is room forconsiderable uncertainty about the role that will beplayed by industrial and other plantations.

Different models may be envisaged for indus-trial and other plantations, including

• plantations run entirely on commercial silvi-cultural guidelines for timber production(sawn logs, poles, pulp, or specialized prod-ucts such as veneers or plywood)

• plantations where exclusively commercial ob-jectives are modified to meet communityneeds (for example, the period of rotation orthe size of individual compartments andfelling coupes may be altered to achieve otherland use goals), and

• plantations managed principally to meetcommunity needs.

Each of the models outlined above has the po-tential to have different effects on the environmentand social and cultural conditions of the forest area,and these need to be carefully assessed by sup-porting proper surveys and planting with environ-mental impact assessments. This needs to be doneat the point where the initial management agree-ment, contract, or concession is negotiated.

From the standpoint of the private sector, thefirst of the aforementioned models is likely to bepreferred, although there will be occasions (for ex-ample, in managing tea buffer zone plantations)when the second option is viable. Plantations man-aged exclusively for community needs are likely tobe less profitable in terms of timber production.However, well-managed commercial plantationforests can be designed to provide natureconservation and other social benefits at the sametime as yielding sustainable supplies of timber,provided the species chosen and the period of ro-tation are carefully controlled. This requires de-tailed silvicultural and scientific knowledge on thepart of the forest manager. Similarly, there may becircumstances where it may still be preferable fora CFA to hire competent contractors to undertake

felling and processing rather than do the workthemselves.

Provide accountability to stakeholders through annualreports of the KFS. Open and transparent governanceand decision making in the new KFS can reduce sus-picion regarding corruption and bribery within KFS.This will need to be exercised at all levels from theBoard and Director, through Conservancy AreaCommittees to the individual forest stations. Waysto facilitate open and transparent processes includemaking public outcomes of bidding process for con-tracts or concessions. This would involve disclosingthe financial value of all bids, including the winningtender but not necessarily the names of unsuccess-ful bidders. An annual report will help provide theaccountability needed to ensure stakeholders havetrust in the new system. The annual report should besubmitted to parliament and made accessible to allforest constituencies.

Transparency in the new forest management plans.Forest management plans have traditionally fo-cused on surveying existing or potential forestareas to establish topography, soil quality, anddrainage and to determine the distribution of treespecies to maximize potential yields within givenrotation periods. This emphasis on silviculturalpractice will need to be supported in the futurewith much greater awareness of non-timber prod-ucts, the potential to create new community andenvironmental services, and the practicalities ofharvesting and processing timber to maximize re-turns to the community. As such, forest manage-ment plans will need to focus as much on the socialand environmental benefits of forests as they do onthe timber resource. Preparation of the new gen-eration of forest management plans will need to becarried out on a participatory basis and will re-quire new skills on the part of forest designers andmanagers.

FINANCESFunding of the Kenya Forest Service needs to be clari-fied. One of the key objectives behind the new act isto reduce the dependency of the forest service ongovernment funding by empowering the KFS tocollect revenues directly from plantations for tim-ber harvesting and by enabling the service tocharge for environmental services and its own pro-fessional advice through extension services. Inaddition, the establishment of a Forest Manage-ment and Conservation Fund is proposed (under


s.18.), which would draw its income from levies onbeneficiaries. It should be noted that similararrangements were introduced by the EMCA tosupport the National Environmental ManagementAuthority but funds have still to be secured.

Analysis of projected expenditure and revenue(see box 3.5) indicates that the KFS could reach abreak-even state within four to five years of its es-tablishment, but that in the early years there maybe a deficit of KSh 2 billion a year or more.8 Thissuggests that major financial support will be re-quired at the beginning of this reform process.Without this, it is unlikely that the KFS will succeedin meeting its primary targets. Specific support forthe forest sector should be made in the govern-ment’s annual budget for the next five years on atapering scale, based on the projected gap betweenexpenditure and revenue.

The concept that private owners will pay for ad-vice from the KFS and extension services will re-quire a high standard of supervision of revenuecollection and then ensuring that the money isavailable to run the service. There is need forgreater clarity on how this will work.

Staffing and Human Resources

Creation of the KFS requires a balance to be struckbetween seeking to ensure that all the necessary pro-cedures have been put in place to implement theForests Act, and initiating the reforms as soon aspossible by launching the new KFS while runningthe risk that some of the provisions of the new lawwill be ineffective. Creation of KFS will allow thenew service to develop innovative solutions underthe leadership of a new Board, rather than relying onthe outgoing administration to rewrite its own pro-cedures. The use of management consultants shouldbe considered to prepare and supervise transparentprocedures for staff appointments.

Staff morale needs to be maintained. Decliningmorale among existing staff is probably an in-evitable consequence of an extended period of un-certainty about the future and the procedures forappointing staff to the new KFS. Staff should be keptinformed about the reform process and given earlyadvice on the options open to them (from applyingfor new posts, taking early retirement, or being re-trained). This can remove unnecessary stress.

Creating a new group of professionals with new skillswill be required. The new KFS will require staff with

a wide range of new skills and expertise, in additionto those held traditionally by state foresters. It is im-portant that recruitment is open to all potential can-didates and is not restricted to employees of FD.

Information and Data

Need for national forests data bank. There is an urgentneed to address the lack of data and informationwith respect to the allowable rate of harvestingfrom forest plantations and an accurate under-standing of supply and demand for timber prod-ucts. As part of the process of surveying all forests,a national forest data bank should be created tomonitor all forest operations and provide base in-formation for management plans. The data bankshould be publicly accessible.

A major initiative is being launched under theforest reform road map to build up an inventory ofall state forests. This can provide a valuable contri-bution to a national strategic plan, but its primarypurpose is to assist in management of individualforests. The information is likely to take too long toprocess to be of immediate value for strategic plan-ning. Accordingly, a priority is to conduct a rapidreview —at the national level—of the principal for-est and woodland resources. This information canbe interpreted directly from satellite imageryrather than detailed mapping on the ground.

A map of national forest resources should becombined with other relevant data in a geographicinformation system (GIS) data bank for use in plan-ning the allocation of national resources. Other rel-evant data include information on silviculturalpractice, species distribution, timber potential,competing land use, staffing and equipment needs,training and capacity building, and level of com-munity and private sector engagement. The neces-sary skills to create this GIS already exist within theresearch organizations represented among the SEAstakeholder group.

8 There are several assumptions underlying this projection asdetailed in Appendix 7.For example, it is assumed that thetotal plantation area available for harvesting is 120,000. Thecalculation uses a conservative estimate of annual area forharvesting based on rotation period for specific species andoptimal yields. Other calculations often use mean annual in-crement and assume that the initial plantation area availablefor harvesting is 50,000 then 90,000 and eventually 120,000(World Bank, 2007). Using such estimates, the period prior toKFS financially breaking even is longer.

Scope for Action 39

Pilot studies. The SEA has focused attentionlargely on natural forests through the case studiesof Hombe Forest and Rumuruti Forest. Naturalconditions and the specific interests of communi-ties and the private sector are likely to be very dif-ferent in other types of forest environments. Itwould greatly assist the development of guidelinesfor the establishment and engagement of commu-nity associations, capacity building on communityissues, and the preparation of forest managementplans if a series of studies of local context were un-dertaken for other forest types.

Legal Framework

National forest policy. The main emphasis of theForests Act 2005 is on setting up the new KFS andsecuring effective partnerships between the ser-vice, registered CFAs, and the private sector. Theact has less to say about the role of forestry withinthe Kenyan economy or the need to develop long-term strategies for managing forestry in the na-tional interest.

At an international level, globalization is havinga significant effect on timber trading. Timber priceshave fallen in real terms over a number of years, andthere has been a tendency for multinational compa-nies to absorb smaller operators to gain the benefitsof economies of scale. Companies in countries suchas Finland, New Zealand, and Japan have interna-tional contracts for the supply and purchase of sawlogs, pulp, and paper and investment policies of in-ternational operators are based on long-term assess-ments of the commercial viability of timberproduction in individual countries around theworld. These and other regional economic influ-ences within East Africa will influence how the com-mercial sector decides to operate in Kenya under amore liberalized and flexible regime.

The Government of Kenya needs to review itsown policies toward timber imports and exportsand its requirements for sawn timber, plywood, ve-neers, pulp, and paper manufacture. A view needsto be taken about the types and quantity of timberproducts that are required for home consumptionand where these will be grown.

Harmonization of legal framework. Clarifying the re-lationships between the new Forests Act, with itsemphasis on community involvement, and otherrelevant legislation will be important for determin-ing the roles of CFAs. For example, clarity on the

role of the EMCA 1999 vis-à-vis the Forests Act isimportant. EMCA 1999 constitutes the overarchingenvironmental legislation and could in theory beused to override agreements reached between com-munities, the KFS, and the private sector. The TrustsAct, Local Authority Act, and Chiefs Authority Actall pose potential conflicts of interests or of power re-lations. For example, the Chiefs Authority Actgrants chiefs the right to decide actions within a for-est without the need for consultation or considera-tion of the needs of different sections of the localcommunity. Similarly, local authorities can intro-duce their own secondary legislation and bylawswithout reference to other authorities.

ENFORCEMENTNumerous causes were reported for weak enforce-ment at the local level, including widespreadbribery of forest guards, lack of senior support forjunior officers, the practical difficulties of collectingevidence in the field due to inadequate equipment(vehicles and telephones), unsympathetic responsefrom local police (who may also be in the pay of of-fenders), and inadequate fines or sentencing fromthe judiciary. Enforcement relates not only to thequality of management and proper levels of train-ing and remuneration of staff but also to removingthe underlying causes of illegal activity.

Effective community partnerships can assistwith enforcement through policing of their own ac-tivities and achieving real benefit sharing amongdifferent groups, including young people and thedisadvantaged in society. An enforcement strategythat includes partnerships with communitiesshould be put in place.

ENABLING COMMUNITYPARTICIPATION AND BENEFITSHARINGEnabling community participation and benefit shar-ing requires concrete measures as discussed below.

Community Participation

Increasing public participation in forestry issues. TheForests Act 2005 emphasizes the need to establishCFAs. While the new act provides for communitiesto be engaged in forest management, often only a


few people within communities have the capacityto engage in the process. These individuals mayhave specific interests and agendas to promoterather than those of the less articulate and in-formed groups. Recognizing this, the operationalrules of the new Forests Act must address the needto strengthen capacity in communities, and pre-vent elite capture.

While focused on CFAs, the KFS should also beresponsive to the wider voice of public interestthroughout Kenya in forests. Citizens of Kenyawho do not reside in or near forests often have adeep interest in forests and the environment be-cause decisions regarding resource use affect theirlives. The programs and activities of the KFSshould, therefore, be publicly accessible.

Existing participation processes in communitiesshould be enhanced. Prior to the new Forests Act, somecommunities were effectively managing forests. Forexample, in north of Kenya many communities losttheir cattle during a recent drought. In Loima, how-ever, where the community manages its local forest,households did not suffer loss of cattle. The chal-lenge is preventing implementation of the new leg-islation from replacing these effective organiccommunity-based forest management initiativeswith standard models that have not necessarily beenproven to work. An inventory of existing commu-nity participation processes should be undertakenand best practice identified.

In Kenya many tribes attribute cultural values toforests, using them for different purposes andneeds. While the new legislation provides for thiscontinued use, a formal application is required toregister and authorize existing practices. Not allcommunities or local groups will have the neces-sary capacity or support to enter this applicationprocess and so may be excluded, unintentionally.The aforementioned study inventorying commu-nity participation should also identify barriers toparticipation.

Increase emphasis on forests that the poor depend on—arid and nonmoist forests. There are differences incharacteristics and uses of the different forest typesin Kenya. In the drier areas of the country, forests arerelatively open without closed canopies. These areassupport extensive livestock grazing as well as pro-vide timber for building, firewood, and charcoal.Management techniques for dry land forestry aredistinct from those for montane forest, and the de-mands of pastoralists also vary, often on a seasonal

basis, from those of vegetable farmers. Differentspecies of indigenous dry land trees need to be con-sidered for plantation use in addition to the conven-tional pine and eucalyptus varieties. In drier areasthere is also scope to exploit other non-timber prod-ucts, including gum arabic. Recognizing the varieduses of different forest types, flexibility will need tobe applied in rules and regulations governing theproduction of management plans.

Representation of Community ForestAssociations

Forest management like any other business enter-prise, requires strong leadership, clear objectives,good staff structures, and economic, marketing,and financial skills, but it also requires technicalknowledge of silvicultural practice. There are prin-ciples for registering CFAs in the act and theseshould be followed to ensure that each associationis properly constituted with articles of association,elected officers, and formal accounting and audit-ing procedures. There is likely to be a substantialgap, however, between the aspirations of many as-sociations to manage areas of forest in partnershipwith the KFS or the private sector and their capac-ity to contribute appropriate management skills. Toprevent CFAs from becoming “paper associations”steered by privileged few and/or KFS officers a ca-pacity needs assessment should be undertaken toestablish what skills are needed by CFAs and whattype of technical support needs to be provided.

Ensure participation of women and excluded groups.Traditional gender roles have inhibited the partic-ipation of women in forestry development. Inparticular, women and other excluded groups areoften marginalized in forest and tree resource useand management. The case study and field visitprovide evidence that women are more likely toparticipate in group based initiatives relating totheir daily activity, such as beekeeping or medici-nal plant gathering rather than choose to join pol-icy formulating and decision-making committeesworking on more strategic dimensions of a forestmanagement plan or harvesting concession. CFAmanagement committees should take steps to in-clude women and excluded groups by making ac-tive participation accessible and worthwhile.

The status of customary users vis a vis CFAsmust be addressed. People who have traditionallymade their livelihoods within forests are entitled to

Scope for Action 41

collect forest products. Distinguishing between le-gitimate users with customary rights and otherswho claim the privilege can be a contentious andextended process, to the detriment of both socialharmony and the forest environment.

While the law takes this factor into account forthose living in or near the forests, there are manyKenyans who do not fall into this category yet useforest resources. How the interests and/or rights ofthese people will be protected vis a vis registeredCFAs should be clarified.

There is also a concern that the implementationof the new act is likely to result in increased pricesof forest products, which may affect poor people’saccess to these vital resources as well as create adisincentive to abide by the law. The concern is thatimplementation of the act marginalizes forest de-pendent poor who are excluded by CFAs. The eco-nomic impacts of the new act on these resourceusers’ needs to be clear before implementationtakes place.

Benefit Sharing

A major area of interest in community issues re-lates to benefit sharing, especially among disad-vantaged groups in society.

Identify the full range of potential community bene-fits and how these will be shared. The new act has thepotential to ensure the community benefits moredirectly from forests. To fully exploit this potentialcommunities must know how to engage in forestmanagement, and professional foresters should bewell versed in non-timber product harvesting andmarketing, which often form part of the informaleconomy. All parties, including the KFS, CFAs, andthe private sector, will need to become moreknowledgeable about the organization and admin-istration of ecotourism; livestock grazing; fruits,roots, and medicinal plant gathering; and the pro-motion of small-scale timber and non-timber prod-uct marketing to achieve true benefit sharing.

Practical difficulties will arise in collecting rev-enue for these activities and in deciding whoshould pay and who should receive the proceeds.Arrangements could include, for example, revenuelivestock owners paying for grazing rights withincommunal forests because they benefit directlyfrom stronger, healthier animals that will providemore meat or milk or command higher prices atmarket. Similarly, beekeepers could pay for forest

use if they can secure larger honey harvests fromthe right to keep stocks in specific areas of the for-est. Enforcing such arrangements, however, maybe difficult.

Questions arise regarding the revenue gener-ated and how the profits are distributed by theCFA. Options include surplus being spent entirelyon forest improvements, shared among membergroups within the association (such as the graziersor beekeepers), or dispersing profits more widelyto nonassociation members in the community.Clarity on these issues is important.

In discussions on benefit sharing it should benoted that unless specific considerations are made,the main winners under the promotion of joint part-nerships for forest management are seen to be thosesections of communities concentrating on watermanagement, honey production, harvesting of med-icinal plants, and charcoal manufacture. Principallosers are seen to be pastoralists. Clarification is re-quired as to whether community council and trustland in arid and semi-arid areas (making up 80 per-cent of Kenya) will be classified as forest and accessfor grazing livestock will be restricted under a con-ventional approach to management plans.

Arranging payment for environmental services andvaluation of ecosystem services. The new Forests Acthas the potential to generate new sources of incomeby allowing the KFS and potential joint partnershipsto levy charges for preserving forest ecosystems andwater catchments. An element of charging alreadyoccurs where water impoundment takes placewithin or immediately outside afforested catch-ments and water user associations are charged forthe right to abstract given amounts of water.

It will be necessary to quantify the nature andvalue of environmental services and establish ap-propriate scales of charges and then to decide whoshould pay the costs and how the revenue is to becollected. Potential environmental services that canbe monetized need to be identified. Existing effortsto facilitate such payments for hydropower andcarbon sequestration should be used as a basis forlessons learned.

Joint management of plantation forests. One of theprincipal aims of the Forests Act 2005 is to encour-

9 An example of prior work is the study undertaken by theInternational Institute for Environment and Development onpartnerships.


age joint management of plantations by the KFSand local communities and by the private sectorworking in conjunction with CFAs. The practical-ity of such joint management arrangements needsto be examined as a priority. Appropriate agree-ments and pilot projects building on new and priorwork9 should be the initial step.

Clear and transparent accounts should be pre-pared showing the annual income and expenditureof individual forest areas, and the income attrib-uted to each CFA. Guidance notes should be pre-pared (in local dialect) on community benefitsharing of different activities.

ENHANCING INVESTMENT IN THE FOREST SECTORFor more than 10 years the forest sector has seenvirtually no private investment in state forests orcommercial plantations because of harvestingbans. With the exception of timber growing forpulp and paper production, which has receivedpreferential treatment, and farm forestry associ-ated with tea processing, most sections of the tim-ber industry have been in decline. The biggestlosers have been small-scale saw millers and theiremployees because most saw mills have beenforced to close.

A priority for the KFS is to revive all private sec-tor engagement in the forest sector, including ingrowing, harvesting, and processing. For large pri-vate companies uncertainties about the long-termcommitment of government to the forest sector arean obstacle to investment. These companies alsowant to see less regulation and control. For smallsaw millers the upfront cost to reengagement is theneed to refurbish or replace buildings and machin-ery that have been damaged through lack of use,damp, and decay.

Business Plans

The private sector and communities should be in-vited to work with the KFS in developing each ofthe forest management plans within this overallframework of the strategic plan. Each forest man-agement plan should include a business plan thatdetails, amongst other things, the expected com-mitment of all participating parties. The planshould also specify how expected returns would bedistributed.

Training KFS Staff

The standards of professional training, boththrough courses and in situ work experience, havedeclined in recent years. In addition, there are lim-ited opportunities for taking vocational training di-rected at small-scale enterprises for wood-basedand non-timber forest product manufacturing andmarketing. The KFS should undertake a review oftraining programs with a view to introducing andsupporting programs that are directed at manufac-turing and marketing of timber and non-timberforest products. New training programs should re-late directly to the forest management plans.

Royalties, Licenses, and Concessions

The majority of private sector companies want tosee standard conditions introduced. Private com-panies are keen to see the abolition of preferentialroyalty arrangements, tax concessions, or speciallogging arrangements that are established on a for-est-by-forest basis. Open and transparent rulesshould be established and published covering allsectors of the Forests Act. Accordingly, it is unde-sirable that new licensing regimes and concessionsshould be drawn up without clarifying the long-term intentions for charging. Clearly, there will bea need with all new procedures to have a trial pe-riod and there should be scope for progressive re-vision within individual agreements, but lack ofclarity and detail in initial documentation couldopen the way for abuse as has happened in the past.

Model agreements should be prepared withclear and strong rights and responsibilities of dif-ferent parties and products laid out. All contracts,concessions, royalty agreements, and other licensesand leases should be published once the termshave been agreed on, and finally, training aidsshould be prepared on the model agreements forcommunities and training workshops for all regis-tered CFAs and private sector investors.

Incentives

Historically, most attention has been focused onmanagement of indigenous forests and commercialplantations. The emphasis of the new Forests Act onfarm forestry, local authority forests, and otherwoodland will require a different type of manage-ment intervention and advice, and provision of in-centives will be more significant than regulations.

Scope for Action 43

Proper licensing and inspection procedures willneed to be devised to minimize abuse of grant sys-tems and tax concessions by individual owners andoperators. These will take time to set up and admin-ister, and will require appropriate levels of funding.

The act makes provision for incentives to be of-fered to encourage new planting and improvedmanagement for both industrial plantations andfarm forestry. It is clearly in Kenya’s interests topromote the forest sector after the long period ofneglect that it has suffered, but the question ofwhere incentives should be used and what type ofincentives should be offered is complex.

It is likely that there are areas of existing poorlymanaged plantation where the opportunities of in-troducing sustainable forest practice should offersufficient commercial incentive to attract investors.This would include that long-term leases or con-cessions are provided with appropriate guaran-tees. Commercial operators are well placed tojudge how to manage such forests and to processand market the products. There are, however,other areas where the economic benefits of com-mercial forestry may be more marginal, especiallywhen it comes to promoting forestry in dry landareas. In such situations, positive incentives to es-tablish pilot projects may be highly appropriate.

There needs to be a distinction made, too, be-tween incentives to potential losers from the im-plementation of the new act and incentives that arepart of national subsidies and tax breaks.

Ensuring private forest owners deliver wider benefitsto communities. Community and environmental or-ganizations, with interests and investments of timeand resources in the forest sector, fear that a strongprivate sector could ignore environmental and so-cial values. The concern is a return to unsustainableharvesting regimes that have decimated forests inthe past. Rules and regulations are required to en-sure that incentives to private forest owners deliverwider benefits to the communities living adjacentto these forests. It is essential that safeguards arebuilt into the registration process and its subse-quent monitoring to ensure that private forests aremanaged in a sustainable manner.

Environmental and Other Regulations

Environmental safeguards are often cited as placingconstraints and hampering investment. However,forests that are managed to high environmental

standards are usually the most productive for con-version of standing timber into useable productsand suffer less from disease and damage. There are,therefore, strong commercial as well as social andenvironmental grounds for ensuring effective regu-lation. It is necessary to develop a clear regulatoryframework including Environmental ImpactAssessment (EIA) and other evaluation tools suit-able for this purpose that does not impose an unac-ceptable burden on industry. The KFS shoulddevelop criteria, standards, and guidelines to indi-cate what conditions will constitute inadequatemanagement of local authority and private forests.

Timber companies, saw millers, and other pro-ducers acknowledge the strength of environmentalconcerns but maintain that the industry cannotsafeguard these interests unless it is given assur-ances about security of supply, which relates to thelength of time granted for licenses, permits, andconcessions. If areas are to be replanted at the con-tractor’s expense, the period for which the contrac-tor has complete control of the forest land shouldat least match the normal rotation period for thespecies being planted.

Technical Assistance and Sustainable Use of Forest Resources

Urgent steps are required to enable restructuring ofthe forest sector and enhance standards. KFS mustenhance its capacity to provide technical assistancein key areas such as certification, participation inforest management, wood processing, and pay-ments for environmental services. At an interna-tional level, increasing recognition is being given toforest certification schemes. The commercial oper-ators represented at the SEA workshops confirmedthat they favor the introduction of forest certifica-tion schemes that are properly gazetted and con-trolled and see these as an effective way ofincreasing their potential in export markets.

The most urgent tasks under the new Forests Actare to reestablish effective forest management and toengage CFAs and private investors in silviculture.Successful implementation of the Forests Act willdepend on the process of consultation, engagement,and capacity building rolled out to embrace forest-related user communities across Kenya and recog-nize and respect their different interests.

In the longer term, the real value of a revitalizedforest sector will come from developing down-


stream ’ industries based on wood processing, suchas the manufacture of fiberboard and furnituremaking, and the marketing of non-timber forest re-sources including plant extracts with culinary,medicinal and cosmetic properties, such as gumarabic. Further potential exists to promote the en-vironmental services of forests, including waterharvesting and carbon sequestration in the case ofreafforestation projects.

Managing charcoal production and transportation.One of the biggest challenges under the Forests Actwill be to introduce a new regime for the legalizedproduction, marketing, and transportation of char-coal from sustainable forest resources. All of theseoperations are currently illegal in Kenya. The gov-ernment has strongly advocated adoption of alter-native energy sources, including the use of liquefiedpetroleum gas and solar energy, but it is recognizedthat these and other clean fuels are not available insufficient quantities or at prices that could be sup-ported by the vast majority of the population. Atpresent the illegal informal economy in charcoal isworth around K Sh 32 billion a year, equivalent tothat of the tea industry. At least K Sh 5.2 billioncould be raised in taxes when these processes are le-galized under the Forests Act (ESD 2005).

Charcoal production from indigenous forestsand arid woodland results in widespread environ-mental damage, and producers taking timber fromgovernment forests are reported to make charcoalin the most destructive way. Some practical rec-ommendations for developing a sustainable tradein charcoal include (ESD 2005):

• Packaging and marketing sustainable char-coal in a distinctive way

• Introducing buffer zones for charcoal pro-duction to protect ecologically sensitive areas,and indirectly help to reduce human-wildlifeconflicts

• Introducing better regulations and guidanceon land use change

• Establishing charcoal workers cooperativesand associations

These and other ideas (including the possible ex-pansion, or more liberal interpretation of Section 4of the act to encourage production of biodiesel andbiomass energy sources) are worthy of detailed in-vestigation as part of the forest reform process.

Expansion of farm forestry. Farm forestry is a pre-colonial form of land use. The last 15 years has seenan expansion of this form of land use, as landown-ers have made their own assessments of the poten-tial risks and returns of planting farm land withtrees. A strong market for farm forest timber hasbeen assured, given the severe restrictions on log-ging from other sources. This experience has gen-erated a large amount of interest in farm forestry,especially in drier areas where agricultural yieldsare low.

While farm forestry does represent a very posi-tive way forward, especially in areas that were for-merly covered by forest, it is important that properadvice is developed by the KFS to assist smallgrowers, including the introduction of businessplanning. An important element of this advice willrelate to appropriate tree species because some,like eucalyptus, have very high water demandsand their use needs to be carefully controlled, es-pecially in water catchments and interpreting mar-ket price fluctuations and trends. While KFStechnical support will be important, the serviceshould minimize requirements for permits to growand fell trees on the small to medium scale. Clarityon the role of farm forestry to the overall objectiveof sustainable use of forest resources should also beprovided.

Urgent steps are required to promote restruc-turing of the forestry industry and to raise overallstandards. It is recommended that a ForestIndustry Forum be established to promote bestpractice in Kenya.

45

An important conclusion from the Strategic EnvironmentalAssessment (SEA) is that a country’s forestry resources are protectedand 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 andenvironmental issues. The day-to-day control and regulation shouldbe 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 productsshould be carried out by the most effective and economic systemsthat can be devised. These should involve the private sector, com-munity organizations, and, where appropriate, public sector partnersworking either individually or in combination.

The recommendations for achieving these ends are listed below inthe form of a policy action matrix to support the implementation ofthe new Forests Act 2005. These recommendations bring together thefindings from the analytical work and extensive stakeholder consul-tation undertaken in this SEA

As indicated earlier, three broad priority areas for action have beenidentified:

• Strategic planning and management of the Kenya Forest Service(KFS)

• Enabling community participation and benefit sharing• Enabling investment in the forest sector.

The policy action matrix summarizes all the key findings from theSEA and breaks down these priority areas into more specific issuesidentified together with the necessary actions required to ensure theissues are addressed. The status of the actions as of June 30, 2007 isalso listed in the matrix.

The more specific policy actions listed in this matrix have beenidentified, prioritised, and endorsed by stakeholders in Kenya’s for-est sector who participated in the SEA.10 The recommendations weresubsequently discussed and amended as appropriate in separate dis-cussions with the Forestry Reform Secretariat and stakeholders at thethird SEA workshop. The findings have been presented, discussed,

Policy Action Matrix6

10 Details of the process are available in the Appendix


and agreed on with the Chairmen of the De-linkingand Forest Reform Committees.

The majority of stakeholders involved in theSEA process indicated a high degree of support forthe recommendations in the policy action matrix.Participants indicated this support during the thirdand final workshop during which they were issueda short questionnaire and asked to give a responseat the end of the discussion on each policy topic in-dicating their level of support for the recommen-dation. A total of 32 questionnaires werecompleted and analyzed (see appendix 9 for de-tailed analysis). In summary for the first priorityarea of planning and management, 15 out of 17 rec-ommendations scored over 80 percent supportfrom stakeholders. 12 recommendations gainedover 80 percent support for the second priority areaenabling community participation and benefit

sharing, and finally, the priority area on enhancinginvestment in the forest sector, 17 out of 18 recom-mendations gained over 80 percent support.

If followed, the matrix will help to ensure thatimplementation of the new Forests Act is environ-mentally, socially, economically, and institution-ally sustainable. All actions should build onexisting efforts and initiatives underway (or re-cently completed) in each area rather than dupli-cate ongoing or past efforts.

The government of Kenya are seen as the over-all custodian of the SEA. The matrix should be seenas a “living” matrix, and be considered a work inprogress that is continually reviewed and updatedas appropriate. To this end the matrix will be madeaccessible to all key stakeholders and efforts will bemade to periodically update the status of specificactions in the matrix.


Table 6.1 Policy Action Matrix

Milestones Indicative list (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 KFSperiod 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 firm (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 firm

1.3.2 Appointment KFS Board Credibility Interviews planned by the Board of a of KFS for July 2007Director to KFS Director by by July 2007 stakeholders

1.3.3 KFS launched MENR Stakeholder The KFS was by May 2007 confidence launched on

established 10th May 2007in 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 resourcesof 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-specifically Provincial and District Envir- ment, Ministry of onmental Committees. Agriculture, Mini-

stry of Finance, MENR, and NEMA

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B. ACCOUNTABILITY AND TRANSPARENCY

3. A strategic plan for the KFS

3.1 The draft strategic plan prepared by 3.1.1 A five-year KFS, private An opera- The draft five the Forest Department (FD) should be strategic plan to be sector, civil tional KFS year plan reviewed and finalized 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 2007and 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 findings 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 first 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- five-year to be ready by confirm the program for the next five years dar year (to link business June 2008and 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 five years) the plan.printed, presented to a parliamentary and subject to an committee, and publicized in the media. annual audit.

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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 placecial 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 clarified

7.1 Specific financial 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 five years for 2007/2008 five years based on the projected gap by June 2007 guaranteed as 1.6 Billion between expenditure and revenue. Kenya ShillingsThis 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 first Strategic Kenya, donors tegic Plan,

Plan and Business and Business Plan to be confirmed Plan achieved

7.2.2 Hold a stake- KFS Funding of holders workshop to KFS confirmedreview 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 five 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 qualifica- 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 2007recruitment should be considered to aid transparency.

(continued)

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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 find new employment. finding 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 fill new needs assessment service, capacity to handle posts where appropriate, recognizing that conducted by Directorate of requirements of new actentirely new skills will be called for in December 2007 personnel some areas, including commercial mar- management in keting and strategic management planning. the Office of the (This requirement should reinforce other Presidentequally important change management decisions.)

10.1.2 Training programs started for KFS staff by January 2009

11. Developing specific skills and awareness in managing community liaison, joint partnerships, and benefit 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 field 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 placedistinct 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

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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 managementwhich will differ radically from those December 2007traditionally 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, placeplans 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 communitiesto improve the guidance offered on for- forest areas by mation of community associations, joint December 2008partnerships, 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 publishedDecember 2007

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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- standardvincial, 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 tified 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

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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 benefits from spread dissemination indigenous groups groups bene-these groups. This measure is to assist in of its purpose devel- and networks, fit from the ensuring appropriate levels of representa- oped by December community repre- new acttion 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 FCCmittees. 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 benefits 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 specific of community CFAs, universities, community benefits that can be promoted benefit undertaken local communitiesin 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 placeincome 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-specific 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- benefits of forests; the organization and adminis- nity benefit sharing sharing tration of ecotourism; livestock grazing; of different activities establishedfruits, roots, and medicinal plant gather- developed and ing; and the promotion of small-scale published by timber and non-timber product marketing June 2008to achieve true benefit sharing.

(continued)

Issu

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Table 6.1 Continued



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 classifica- Local Govern- process for will be classified as forest and access for tion and registration ment, Ministry benefits grazing livestock will be restricted under published by of Lands sharing a “conventional” approach to manage- December 2008 establishedment 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, costedachieved, 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 findings the costs and how the revenue is to be tion, and benefit of Water, local disseminatedcollected 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 partnershipsbe used to develop specific guidelines to carried out by tertiary learning cover joint management agreements. December 2009 institutionsExisting 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 plansalso what returns will be due to those organizations. Investment strategies should be referred for consideration to the planned forest investment center.

(continued)

Issu

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Table 6.1 Continued



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 documentdirected at manufacturing and marketing January 2008of 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 Cofinancing forest industry through the levy or royalties develop training sector for industrial on concessions. packages for fund- training

ing through the securedDirectority of Industry Training by January 2008

27.2.2 Develop KFS, private Cofinancing modalities for forest sector for industrial industry contribu- training tion to the conser- securedvation 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 2007the 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 ensuredproduction. 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)

Issu

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Table 6.1 Continued



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 opportunitiesmunities 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 field 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 forestryto be developed. Before these incentives are confirmed, 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)

Issu

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Table 6.1 Continued



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 forestscommunities 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 NEMAation tools that are fit 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 confirming with all stakeholders and criteria conditions will constitute inadequate the circumstances establishedmanagement 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 specific 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- certification of national

certification process munities, traffic police standards standards on initiated by June Ministry of Planning, in place. certification 2008 Local Authorities, and has been

others (wide spectrum initiated. of stakeholders)

(continued)

Issu

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Table 6.1 Continued



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.

Issu

e

59

As agreed in the final workshop associated with the SEA, upon com-pletion of the policy action matrix dates have been specified for cer-tain actions listed in the matrix. This was done in collaboration withmembers of KFS and, the Reform Secretariat. Remaining next stepsidentified by stakeholders involved in the SEA process are outlinedbelow:

• The Kenya Forest Sector Reform Secretariat should be the coor-dinating body for the implementation of the SEA’s policy actionmatrix.

• Once the appropriate milestones have been set by the newBoard, it was agreed that a limited number of key dates shouldbe set for further follow-up workshops. The purpose of thesefollow-up workshops would be to provide stakeholders whohave already actively participated in the SEA process, and anyother new stakeholders identified, with the opportunity to re-view progress against the policy action matrix. This would pro-vide a forum whereby stakeholders could assess the generalstate of progress and determine whether further action needs tobe taken to deliver the SEA objectives.

• It was agreed that to ensure monitoring of progress on the SEApolicy action matrix milestones remained independent, thesefuture stakeholder workshops should be independently fundedfrom the government. This will enable a platform for open andunbiased discussions. The new KFS will need to secure this in-dependent funding for monitoring the SEA from developmentpartners 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 actionmatrix will be funded.

• To ensure that the matrix is a living document it should be madeaccessible to all key stakeholders and efforts made to periodi-cally update the status of specific actions in the matrix.

The Next Steps7

61

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THE WORLD BANK Report No. 40659-KE

Institutions-Centered Strategic Environmental Assessment of the Kenya Forests Act 2005

APPENDIXES TO MAIN REPORT

Strategic Environmental Assessment of Kenya Forests Act (2005): Appendixes to Main Report 2

© 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 [email protected] 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 accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development/ The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, http://www.copyright.com/. 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 [email protected].


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


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


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.


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.


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

Consultants SEA Team [email protected]

2. David Maingi World Wide Fund for Nature (WWF)

SEA Team 0723 786184 [email protected]

3. Patricia Kameri-Mbote

University of Nairobi

SEA Team 0733 726511 pkameri-mbote.ielrc.org [email protected]

4. Claire Ireland

IDLGroup SEA Team [email protected]

5. Paul Steele SEA Team [email protected]

6. Michael Gachanja

Kenya Forests Working Group

SEA team 0722 499891 [email protected]

7. Benjamin Kubo

KENGEN Participant 050-50086 [email protected]

8. Thomas Yatich

World Agroforestry Centre (ICRAF)

Research 0720 756137 [email protected]

9. Esther Mugure

Kenya Association of Forest Users

Participant 020 607048

10. Maurice Mbegera

National Environmental Management Authority

Government 0733 759744 [email protected]

11. Nyambura Githagui

World Bank Development Partner

3226443 [email protected]

12. Maureen Babu

World Conservation Union

International NGO

890605-12 [email protected]

13. Antti Erkkila Embassy of Finland

Development Partner

318575 [email protected]

14. Sean White Winrock International

Development Partner

0721 383585 [email protected]

15. David Mousley

Finlay Tea Company

Private Sector


16. G. N. Gathaara

Ministry of Regional Development


17. Tanguy De Bock

Gallmann Financial Foundation

Private Sector

0734 487660 [email protected] [email protected]

18. Stephen Bertram

UK Department for International Development

Development Partner


19. Enock Kanyanya

Nature Kenya CSO 0722746312 [email protected]

20. Rose Ministry of Government 0721478194 [email protected]


Name Organization Sector Telephone E-mail address Nyamori Water and

Irrigation 21. Maxwell

Kinyanjui Woodlands Trust

CSO 0723 706680 [email protected]

22. George Wamukoya

WWF CSO [email protected]

23. Angela Kabiru-Kangethe

Miti Mingi/ILO Participant 7621135 0721 423352

[email protected]

24. Robert Buzzard

US Agency for International Development

Development Partner


25. Dr. Hilda Oyieke

National Museums of Kenya

Research 3742445 [email protected]

26. Catherine Gatundu

Kenya Lands Alliance

CSO 051 2210398 [email protected]

27. John Wakaba

Tim Trade Private Sector


28. David Kuria KENUO Private Sector

0722 43 8518

[email protected]

29. Wahida Shah

ICRAF Research 20-7224295 [email protected]

30. Edmund Barrow

World Conservation Union IUCN

International NGO


31. Charles Bengough

TIEA Participant 0722 523228 [email protected]

32. Paul Konuche (Dr.)

Kenya Forestry Research Institute

Research 066-32841 [email protected]

33. J. K. Bundotich

Forest Department (FD)

Government 0722 384008

34. J. Inganji Yakhama

Forest Department


35. Dr. Dominic Walubengo

FAN CSO 0733 750929 [email protected]

36. Stefan Foklinuh

Tree is Life CSO 065 32696 [email protected]

37. G. J. Cadavillas

Tree is Life Community Association


38. T. S. Rai Rai Plywood Private Sector

39. Emily Atai KWS Government 0721 431018 [email protected]

40. Murefu Barasa

Energy for Sustainable Development

CSO 07203188054

[email protected]

41. David Mbugua

Chief Conservator

Government [email protected]

42. Ben Ithagu NEMA Government [email protected]

43. C. Mbuthia Kamugu

National Alliance of Community Forest

Private Sector

[email protected]


Name Organization Sector Telephone E-mail address Associations

44. Joseph Ruhiu

CFF Private Sector

[email protected]

45. Joseph M. Mutie

Individual Participant 0722 848 544

[email protected]

46. Philip A. Diro Pan Paper Private Sector


47. Anthony M. Maina

FD Government

48. Francis N. Mwangi

Agricultural Kenya National Chamber of Commerce

Private Sector

020 220867 0722-736225

49. Yuichi Sato Intensified Social Forestry Project/Japan International Cooperation Agency

Development Partner


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 [email protected]

3. Patricia Kameri-Mbote

University of Nairobi/Consultant 0733 726511 [email protected]

4. Michael Gachanja Consultant – Institutions-Centered Strategic Environmental Assessment

5. Alex Forbes Poverty Environment Initiative – United Nations Development Programme

[email protected]

6. Yuko Kurauchi World Bank, Nairobi [email protected]

7. Tom Owiyo World Bank, Nairobi [email protected]

8. John N. Ngugi JICA, Kenya Office [email protected]

9. James Sandom

James Finlay Kenya Ltd [email protected]

10. Christian Peter World Bank [email protected]

11. Enos Esikum World Bank [email protected]

12. Christine Cornelius World Bank [email protected]

13. Diji Chandrasekharan

World Bank, Natural Resource Economist

[email protected]

14. Fernando Loayza World Bank, Senior SEA Specialist

[email protected]

15. Maureen A. Babu IUCN, Eastern Africa Regional Office

16. Toshimasa Embassy of Japan [email protected]


Masuyama 17. Stephen Bertram DFID [email protected]

18. J. E. Kaniaru Hombe Community Forest Association

19. Volga Habwe Forest Action Network

20. Nyambura Githagui

World Bank [email protected]

21. David Kuria Kijabe Environment Volunteers [email protected]

22. Mbogo Kamau LNRA/EFCMN [email protected]

23. G. J. Cardonillis TILT/Rumuruti Forest Box 40 Rimuruti

24. Stefan Fokkink TILT/Rumuruti Forest [email protected]

25. Dr. D. Walubengo FAN [email protected]

26. Esther Mugure KAFU [email protected]

27. Anthony M. Maina FD [email protected]

28. J. K. Bundotich FD

29. J. I. Yakhama FD [email protected]

30. Emily Atai KWS [email protected]

31. T. S. Rai Rai Plywood (K) Ltd

32. Polycap Otieno Kenya Land Alliance – Nakuru [email protected] 051 2210398

33. Murefu Barasa

Energy for Sustainable Development (ESDA )

[email protected]

3. Participants at Third Stakeholder Workshop, December 15, 2006 Name Organization Telephone 1 Rose Nyamori Chemist, Ministry of Water and

Irrigation 0721 478194

2 Joseph Mangira Policy Officer, WWF-Eastern Africa Regional Program Office

0721 725319

3 Francis N. Waituri Chairman, Lariak Forest Association

0727 849906

4 Gerald M. Ngatia Secretary, National Alliance of Community Forest Associations (NACOFA)

0722 451966

5 David Mousley Plantation Executive, J Finlay (K) Ltd

0722 833122

6 Clement Kariuki Chairman, NACOFA 0722 393017 7 Taye Teferi Conservation Programme Director,

WFF-EARPO 0723 786182

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

Programme 0733 689111

13 Charles Mbuthia Kamangu

Mount Kenya CFA 0723 805692


Name Organization Telephone 14 Yuko Kurauchi World Bank 0722 563308 15 Josphat Wagura Njagu Organizing Secretary, Ndaragwa

CFA 0725 645966

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

Association 0722 523228

26 Thomas Yatich T.B. ICRAF [email protected], 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

Community Association 0722 451966

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


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

Gichimo Sagana Electric Fence (treasurer), Hombe Neighbouring Community Association (V. Secretary), Sagana Mitero Farmers Group (Coordinator)

8. Johnson Miano Sagana Electric Fence, Igaka and Umoja groups (farmer) 9. Geofrey Mwangi

Muriuki Sagana irrigation water project (V. Chairman), Kamusa Self Help Group (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

Association 0726920270

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

association 0722451966

Wilson Thige G B M, Ruguru - Benson Mwangi Gichuki Sagana irrigation water project 0723212139 Peter Muriuki Kibui Kagati Kaimati Forest

Association 0721808470

Peter Kaig Nyamu G B M, Ruguru 0721555589 Margaret Ngima Kanono Hydro electricity water

project 0723742062

Stephen Muriuki Sagana wildlife Protection S H 0723707638


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 [email protected] Maurice Mbegera NEMA [email protected] Hewson Kabugi KWS [email protected] David Kuria KENVO [email protected] Enock Kanyanya Nature Kenya [email protected] Rose Nyamori Ministry of Water and Irrigation [email protected] Chetan Shah Timber Industries Employers

Association [email protected]

Stephen Mutimba ESD Africa [email protected] Dr. Bernard Kigomo Dr. Muchiri Paul Ogugo David Oder Dr. Chegara

KEFRI [email protected]

Josphat Inganji Yakhama

FD [email protected]

Esther Mugure KAFU [email protected]


7. Stakeholders Consulted During the Economic and Financial Assessment Name Organization Contact details Mr.Anthony Maina Director of Forest Reform

Committee 0722 806 127

Mr. Joseph Luganji Forest Reform Committee 0722 769 354 Mr. Wainaina Conservator of Forests, Chief

Finance Officer 0722-884572

Mr. Logando Under Secretary, Human Resources, FD

Mr.Muriithi Conservator of Forests, Lead Expert Environmental Impact Assessment, Planning Department

0722-752175

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

and Agriculture Organization 0733-685805

Mr. Robert Buzzard General Development Officer, USAID

0722 335314


APPENDIX 3 SUMMARY OF THE STAKEHOLDER ANALYSIS

Interests (environmental, social,

economic, institutional)

Impact of act on each

interest (+ or - )

Relative priorities of

interest (1 = high 4 = low)

Primary stakeholders Central government • FD • KWS • Ministry of Water

and Irrigation • Ministry of Local

Government

Primarily institutional but with some environmental, social, and economic interests • 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

+/-

1

Private sector (saw mills and value adding) • Timber Industry

Employers Association (TIEA)

• Kenya Timber Manufacturers Association

• Kenya Furniture Association

• Other timber traders

• Thuiya Enterprises

• Miti MIngi • Pan Paper • Rai Ply, Timsales

& Company • EHG

Primarily economic but some environmental and social interests • Agreement and gazettement of national

forest certification scheme, followed by implementation, enforcement, and increased awareness of the scheme nationally and internationally

• Sustainable source of good quality timber readily available

• Reduction in time frames and various delays at NEMA for EIAs and audits

+/-

1

Private sector (other) • Finlay Tea

Company

Primarily economic but some environmental and social interests • Insufficient attention in the new Forests

+/-

1 and 2 (2 where the organizations are not entirely


• Kakuzi • Kenya Tea

Development Authority (KTDA)

• Woodlands Trust • Gallmann

Memorial Foundation

• NACOFA • CFF • ESDA • KAFU

Act to wood fuel and charcoal • Insufficient attention or emphasis in the

new Forests Act on biodiesel and biomass as an energy issue in general (the new KFS could earn substantial revenue if the linkages between the private sector, KFS, and biodiesel were much further developed than the current status)

dependent on forestry, for example, KTDA, ESDA and others

National nongovernmental organizations (NGOs) • KFWG • East Africa

Wildlife Society • Nature Kenya • Forest Action

Network • Kenya Land

Alliance

Primarily institutional but with strong environmental and social interests • The emphasis given to biodiversity in the

new act is positive; however, need to ensure that this is effectively implemented

• The need to lobby the government on relevant environmental issues (catchment degradation, poor planting material, poor maintenance of forests, and so forth)

+/-

1 and 2 (again where NGOs work in more than one area, not just forestry, for example, Nature Kenya, KLA, EAWLS, and others)

Community Forest Associations (typically on edge of forests < 5km) • Oyieke • Osienala/Gwasi

hills community • Ogiek Welfare

Council • KENVO • Eburru

Community Group

Primarily economic but with strong social and environmental interests • Concern about access and use

(management) of nontimber forest products (bee hives, medicinal plants, charcoal, and so on)

• Concern that pastoralists could be losers with the new Forests Act in that access to land with woody bushland (in the future to be classified as forests) will be restricted

+/-

1

Secondary stakeholders Central government • NEMA • Ministry of

Regional Development

• Ministry of Agriculture

• KenGen • NMK • National

Chamber of Commerce

Primarily institutional with some environmental and social interests • Degrading land, increasing soil erosion,

and siltation of water bodies • Emphasize use of farm forestry • 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

+/-

2 or 3 (linkages with FD or the new KFS important but not essential in the short or medium term, only essential over the long term)

Research and academic organizations • KEFRI

Primarily environmental and social with some institutional interests • Insufficient clarity in the new Forests Act

+/-

1 (for KEFRI) 2 (for ICRAF, CREEL, and


• ICRAF • CREEL • ILEG

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 between the linkages of all Kenyan acts covering environmental issues (EMCA 1999, 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

ILEG as ICRAF works in many countries and CREEL and ILEG work on environmental and other issues, not just forestry)

International NGOs • IUCN • WWF • AWF

Primarily environmental with some social interests • Continuing loss of biodiversity • The realization of sustainable use of

forests as outlined in the new act and policy

+/-

1 and 2 (proportion of work on forests of organization < 40 percent)

Communities that use forests but are not located near them (> 5 km)

Primarily environmental and social; indirectly economical • Use of nontimber forest products • Use of timber products.

+/-

2

External stakeholders Multilateral donors • World Bank • UNEP • UNDP

Environmental, social, and institutional • Poverty focus of new act and

implementation • Environmental governance of the

forestry sector • Ensuring real participation of CFAs • The need of donor agencies to commit

resources to forest sector reform

+/-

2

Bilateral donors • USAID • DFID • Embassy of

Finland • JICA

Environmental, social, and institutional • Poverty focus of new act • Environmental governance of the

forestry sector • Ensuring real participation of CFAs • The need of donor agencies to agree on

a policy for supporting resettlement away from forests

+/-

2


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. <<C>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.


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.


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


• 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.


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


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


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.


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 Forest Service Board

Provide overall policy direction to the KFS

Appointment of the eight non–public servants by the Minister may be abused

Appointment of the

Chairman of the Board may be politicized

The act allows for involvement of eight non–public servants to the board.

Kenya Forest Service

Policy formulation, management and protection of all types of forests

Appointment of the Director, which is not subjected to parliamentary approval, may be politicized.

KFS may be financially

overburdened by too many provisional forests

Operation of KFS as a semiautonomous body

Act creates funding

mechanisms for the KFS (through the fund and conservation levies).

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 Committee Administration of

the Forest Management and Conservation Fund

Lack of definition of eligibility criteria of the committee opens a loophole in its composition

Act provides for transparency and accountability in management of finances of the fund through annual audits.

Local level (district and local authority level) Forest Conservancy Committees (FCCs)

Oversee proper and efficient management of forests in their areas of jurisdiction

Lack of clear linkages of FCC with other committees (for example, catchment areas committees under the Water Act 2002).

Management problems in

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

Act enables management of forests through an ecosystem approach.

Act devolves forest

management through FCCs that draw representation from local communities.


resources Community Forest Associations

Participation in conservation and management of a state or local authority forest

Most communities are not organized

Some community

associations are not 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

As opposed to the current situation, the act has clear provisions for local community involvement through forest associations.

Local authorities

Management of forests declared as local authority forests

Inadequate capacity (human and financial) within most local authorities may result in most of these forests being declared provisional forests.

Declaration of forests as

provisional forests may be contentious.

Act brings professionalism in the management of trust land forests.

Act mandates local authorities to ensure creation of mini-forests, arboreta, or recreational areas with technical input by KFS

Private sector

Management of private forests and forest plantations

Declaration of forests as provisional forests may be contentious

Act allows for registration of private forests and provision of services by KFS for their 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.


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.


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.


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.


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.


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.


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.


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.)


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.


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


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.)


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


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


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


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


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. <<C>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


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.


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


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.


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


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


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.


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.


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


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.


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)


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


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.


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


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


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


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


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.


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


(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.


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.


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.



Annex A4.1 Summary Analysis of Stakeholders Involved in Forest Management

Stakeholder Role Strengths (internal)

Weaknesses (internal)

Threats (external, current and emerging)

Opportunities (available and emerging)

National level Forest Department Policy formulation,

management, and protection of gazetted forests reserves; management of forest plantations and on-farm forestry

Trained personnel Spread throughout

the country

Limited resources (both capital and financial), inadequate staff

Poor public relations, overlapping mandates with KWS in double gazetted forests

Inadequate or unavailable information for decision making

Low government funding and political interference

Inefficient forest industries

Conflicting policies in national resource management

Corruption

New Forests Act and willingness for partnerships among local communities and the private sector

Vast forest resources in dry lands

Abundant labor Vibrant market for

forest products Development partner

support Availability of

appropriate technology and innovations

Government support Availability of forest

sector investors Availability of land for

afforestation Regional and

international treaties and conventions

Kenya Wildlife Service

Protection of wildlife and their habitats

Ability to attract donor support

Unique wildlife resources and landscapes

Good infrastructure development in

Outdated legislation Underexploitation of

revenue base Poor

communication (technology and channels) and

Insecurity and wildlife poaching in some areas

Human-wildlife conflicts

Competition from other tourist

Government support and goodwill

Pressure from government for financial self-sustainability

Supportive donor and






protected areas Lead agency for

international conventions and treaties

Well-trained personnel on conservation

Relatively high degree of honesty, integrity, and transparency

Well-defined programs

National and international recognition

public relations with communities

Inadequate financial resources and standardized vehicles and equipment

Lack of regular staff training

Lack of team spirit Poor marketing of

services and products

No comprehensive biodiversity inventory

Lack of institutionalized management tools

Overlapping mandates with KFS in double gazetted forests

Limited training in community work

destinations Environmental

degradation and encroachment

Poverty Global terrorism Incompatible

sectoral laws and policies

Dwindling donor and government support

High turnover of CEOs and senior staff

Unfavorable international conservation resolutions

Inefficient and poor resource management

Tourism and research activities in private and nonprotected areas

Global climatic change

HIV/AIDS Conflicting land

use Pollution Bio-piracy

development partners Investment

opportunities in wildlife-based products and services

Potential to reduce operational costs

Setting up of KWS endowment fund

Commercialization and outsourcing

Bio-prospecting opportunities

Expected government targets set by the government

Anticipated policy and legislative changes

Collaboration with NEMA under EMCA

Security in protected areas

Improved organization performance through implementation of performance contracts

Review of the Wildlife Act and the recently launched strategic plan

Kenya Forestry Research for Well-trained Low funding Reforms in forest Reforms in forest






Research Institute sustainable development of forests and allied natural resources

scientists Availability of

modern facilities at Muguga, Maseno, and Kitui

Decentralized research and development activities

Good links with the FD and main stakeholders

Poor remuneration of workers

Weak capacity to publish and disseminate research findings,

Inadequate capacity to meet increasing demand for tree seed

Low corporate profile

Weak administrative capacity at regional centers

Low capacity in information technology development

Inadequate capacity in management of revenue-generation activities

sector may take too long

Competition for research funds with private and NGO sector

Strengthening forestry service may take too long

Loss of staff to other institutions

sector Donor funding and

collaboration improving Environment and

forestry issues becoming increasingly important

Private sector becoming an important player in forestry development

Wood will continue to be a dominant source of energy in Kenya

Leadership of forestry research in the region improving

Formation of East African Community

National Environmental Management Authority

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

Legislative establishment as a semiautonomous body with tenure of office for the Director-General

Independent operation of the Public Complaints Committee and tribunal

Limited capacity and resources (capital and human)

Environment inspectors not yet appointed

Inadequate financial resources, facilities, and equipment

Weak communication

Unclear delineation of some roles for lead agencies

Inadequate appreciation of the role of NEMA by the public and lead agencies

Poor governance Widespread

Political goodwill for environmental actions

An increasingly sensitized and supportive public

Environmental conservation is a top priority in the world

Willingness of lead agencies, NGOs, and the private sector to






Focal point for several multilateral environmental agreements

Establishment of the national Environmental Trust Fund

Ability to generate revenues through licensing, penalties, grants, and gifts

Existing collaboration and partnership with other organizations

tools and information-sharing mechanisms

Inadequate inter-sector mechanisms for environment coordination

Low client responsiveness due to inadequate capacity and resources

poverty Erosion of

cultural values in environmental conservation

Conflicts on natural resource use

Inadequate national accounting for natural resources

Legal suits that might bankrupt NEMA and tie up resources

partner with NEMA Willing donor

community Existence of

multilateral agencies, regional environmental programs ,and inter-governmental organizations concerned with environment

Existence of indigenous knowledge

Improved and effective communication knowledge available

National Museums of Kenya

Repository for elements of scientific, cultural, technological, and human interest, and preservation of sites of antiquity

Strong technical and research capacity

Strong international links

Well-trained and skilled staff

Favorable political will

Strong research programs

Documentation and reporting of research

Inadequate funding Low staff morale Poor governance Limited organization

structure and bureaucracy

Weak linkages with other stakeholders

Lack of corporate policy

Lack of patents policy

Globalization Piracy Competitors Insufficient

skilled staff Changing

information and technology environment

Travel advisory affecting tourism

Poor

Regular upgrading of the research programs

Renovating dilapidated buildings and establishment of field study centers

Linkages with partners locally and abroad

Improving infrastructure

Development and marketing products






Lack of information and communications technology policy

performance of economy

Brain drain Rapid loss of

cultural heritage

and services Commercialization of

activities Widespread skilled

manpower in the country

Nyayo Tea Zone Development Corporation

Creation of tea buffer zones to contain encroachment into indigenous forests

Semiautonomous government body

Able to generate its own revenues

Provides local employment

Lack of capacity (human and equipment)

No forest management experience

Public pressure to have some of the cleared land converted back to forestry

Confusion with the FD over the mandate in areas not suitable for tea

Support provided by the African Development Bank through the Green Zones Development Project

Department for Resource Survey and Remote Sensing

Collection, storage, analysis, and dissemination of data on natural resources

Technical capacity in aerial censuses, geo-information database, and remote sensing satellite data

Highly trained staff High caliber

equipment, aircraft, computers, and the like for data collection and analysis

Lack of clear operational policy and mandate

Limited financial resources

High staff turnover due to low wages

Poor public relations

Lack of a policy on geo-information leading to disharmony in geo-data usage

As a government department, DRSRS is unable to retain finances raised for its activities

Competition with other institutions that DRSRS is supposed to be serving

Discontinued donor support

Increased demand for data and information on natural resources

Many strategic collaborative partners

Reduced cost of remote sensing data

Increase in number of players involved in generation of geo-spatial data

Increase in number of well-trained scientists in the fields of natural resources and environment

Data processing capabilities in terms of






hardware and software have increased, as has storage capacity

Private sector Establishment of plantations and woodlots and conservation of indigenous forests

Investment (some, for example, Kakuzi Tea growing companies)

Not tied to government bureaucracy in management

Low capacity in many small enterprises and ventures

Competition among private sector players and communities in partnerships with the KFS

Competition with illegal forest products

Competition of forestry with other land uses

Forests Act provision on partnership

Forests Act provisions on incentives

Nongovernmental organizations

Research, advocacy, awareness, and promotion of local communities engagement in forest management and conservation

Increased credibility in advocacy and awareness creation

Strong links with local communities

Low funding Low capacity

(human and capital)

Competition for resources

Forests Act 2005 provisions for public-private sector involvement

Government support and political will

Local level institutions (provincial, district, and local authority level) Local County Council

Management of natural resources within their jurisdiction (trust land) on behalf of local communities

Devolved authority in management of resources

Through elected councilors, able to keep in touch with local communities’ needs

Lack of capacity (financial and human)

Corruption No forest

management expertise

Political interference

Forests Act 2005 empowers the KFS to assist local authorities with technical support

Provincial and District Environment Committees

Coordination of environmental matters at the provincial or district

Committee representatives of key lead government

Minimal budgetary resources and facilities at provincial and

Unclear delineation of some roles for lead agencies

Sensitized and supportive public on environmental matters

Lead agencies






level agencies and civil society

district levels

Poor governance Conflicts on

natural resource use

assisting district environment committees on transport and offices

Sources: The analysis is based on each institution’s strategic plans, in most cases.


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,


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.


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.


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.

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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 new act

Environmental importance Current coverage (thousand ha

Current environmental status (improvement of decline in quality)

Number of people who depend on resource

Linkages with other sectors

Proposed management in new act

Expected outcome of the new management

Indigenous forest Closed canopy forests in the following regions: • Coastal forest

region • Dry zone forest

region • Montane forest

region • Western rain

forest region

A forest that has come about by natural regeneration of trees primarily native to Kenya and includes mangroves and bamboo forests.

• Diverse ecosystems that supply important economic, recreational, scientific, social, cultural, and spiritual benefits.

• Supply forest products; serve as water catchments, biodiversity conservation reservoirs, wildlife habitats, and carbon sinks.

• In mangrove areas, provide important fisheries habitat.

16,865a It is estimated that there has been a 5% decrease in forest cover between1990 and 2000.a

3 million forest-adjacent dwellers directly depend on forest resources for their livelihoods.b

• Wildlife • Water

management • Energy • Tourism • Land tenure

State managed through management plans. Possible for state to enter into joint management agreement with anyone. Community forest associations may apply for user rights.

All existing forest reserves remain protected. Conservation and sustainable use of forests achieved through the use of management plans. Communities engage in forest management.

Farm forestry The practice of managing trees on farms, whether singly, in rows, lines, boundaries, or in woodlots; or private forestry.

• Supports diversified farm production providing subsistence products and incomes.

• Contributes to soil and water conservation and fertility.

Data not available

Data not available Data not available

• Agriculture • Water

management • Land tenure

Outside of the state forest, managed by private sector

Incentives put in place that encourage greater amount of farm forestry.

Forest plantations A forest that has been established through afforestation or reforestation for commercial purposes.

• Current reliance for plantations has been on a few exotic species, which is now seen as unsustainable due to increasing occurrence of exotic pests and diseases.

• The new policy seeks to broaden the species base used in commercial forest plantations.

100c 38.7 are considered to be mature andover mature and 62 are young plantations.

Used to be 170. Significant decrease in coverage. Since the ban, no silviculture has taken place resulting in low-quality timber. Incidents of poaching have increased. Risk of fires and spread of disease and pests (such as stem borers and heart rot) have also increased, passing health risks to young plantations.c

No clear figures. However, it was reported that 130,000 people lost their jobs when associated industries (namely, saw milling, timber yards, and construction) closed down as a result.c

• Agriculture • Business

licensing and regulations and regulatory reforms

• Physical planning

• International certification

• Trade and industry

• Unemployment

Private sector to be encouraged to develop and manage plantations through appropriate incentives such as land leases, agreements, and concessions.

Increased amount of land used as plantation forests. Species base of plantations diversified.

Dry land forests No definition in • Often these environments are 39,762d Under threat from 8 million • Arid and semi-arid No specific Not specifically

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the actual act but the draft policy refers to dry land forests as the woody vegetation in Kenya’s arid and semi arid areas, which cover 80 percent of Kenya’s total land surface.

stressed by frequent drought. • Livestock is the main

economic activity of these areas because of good grazing. However, seasonal migration is resulting in depletion of grazing lands and the forest resource, and tree cover degradation.

• Natural resource products from these areas have the potential to supply marketable products on a sustainable basis. These include gums and resins, frankincense, indigenous fruits, honey, and timber.

opening of new farm land and increased charcoal production.e Charcoal production is an important income generation option. Ecologically fragile areas due to pressure from human use.

people live in the arid and semi arid areas in Kenya.f There are no statistics on how many of these are dependent on dry land forests; however, much of the literature would argue that almost all are dependent on it, be it for building materials, wood fuel, wild harvests, and so on.

lands • Livestock

development • Range

management • Tourism • Irrigation • Sustainable

livelihoods

management proposed.

addressed in the act but the draft policy aims to bring about rehabilitation of degraded and overexploited areas, tree planting, community forest associations, and sustainable commercial production of charcoal.

Local authority forests

Any forest situated on trust land that has been set aside as a forest by a local authority pursuant to the provisions of the Trust Land Act. Any arboretum, recreational park, or mini-forest created under section 30 the Forests Act. Any forest

• In urban areas, these forests have both recreational and aesthetic benefits.

• Some of these forests may have important biological diversity and scientific value.

• These forests can have important nonuse values such as cultural shrines.

• The law requires the Minister to declare local authority forest where o land is an important

catchment area, a source of water springs, or is a fragile environment;

o the land is rich in biodiversity or contains

Data not available

Overexploitation and lack of proper management have led to the threat of extinction of some local authority forests.e

Data not available

• Wildlife • Water

management • Energy • Tourism • Land tenure

Local authority is responsible for their protection and management. A forest officer should inspect these forests twice a year. Anyone can apply to enter into a management agreement for all or part of any local authority forest. Approval must be given by the Board.

Sustainable management of forests on local authority land. Forests in urban areas promoted for aesthetic and recreational values.

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established as a local authority forest in accordance with the provisions in section 24 of the Forests Act.

rare, threatened, or endangered species;

o there is cultural or scientific significance;

o it supports an important industry and is a major source of livelihood for the local community.

Private forests Any forest owned privately by an individual, institution, or body corporate. The act also states that private forest includes arboreta and recreational parks.

• Have the potential to provide a significant amount of forest goods and services and thereby supplement state forests.

• Market incentives will need to be put in place if this is to happen but it will be important to ensure that these do not undermine forest livelihoods of the poor.

Data not available

Data not available Data not available

• Agriculture • Business

licensing and regulations; regulatory reforms

• Physical planning

• International certification

• Trade and industry

• Employment

May apply for registration as a forest and therefore be entitled to receive technical advice and loans, and apply 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.

Provision of technical advice to private forest owners and tax incentives for private forests.

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.

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Table A5.2 Matrix of Environmental Risks and Opportunities of the Kenya Forests Act 2005

Forest type most relevant to

Element of the act

Indi

geno

us o

r dry

la

nd

Farm

fore

stry

or

priv

ate

Pla

ntat

ions

Loca

l aut

horit

y

Risks (-) and opportunities (+)

PART 2 – ADMINISTRATION Functions of the Kenya

Forest Service (section 4)

+/- potential for better ecosystem management through policies and guidelines on management, conservation, and utilization of forests +/- 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 the Board (sections 7, 8, 9, 11)

+ opportunity to create incentives for sustainable management of the environment +/- manages and controls all assets; if Board becomes corrupt, then may filter down

Forest conservancy areas and management (section13)

+ recognized forest conservancy areas + opportunity for land to be set aside for creation of forests + 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

rights to forest products (sections 21–34)

+ local authority forest to be declared where it is important for the environment (catchments, water source, biodiversity, and the like) +/- 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,

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Element of the act

Indi

geno

us o

r dry

la

nd

Farm

fore

stry

or

priv

ate

Pla

ntat

ions

Loca

l aut

horit

y


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 (sections 35–45)

+/- how do forest management plans link with local environment plans and other relevant plans (for example, 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

associations (sections 46– 49)

+ gives right to community associations to use environmental resources on a sustainable basis + establishes forest user rights + 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

(sections 50 and 51) +/- the right to enter any forest (including private) to assess its condition and the wider environment

+/- 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

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Element of the act

Indi

geno

us o

r dry

la

nd

Farm

fore

stry

or

priv

ate

Pla

ntat

ions

Loca

l aut

horit

y


forests (sections 52– 54) + disincentive of large fine for those who contravene this requirement

Prosecution (sections 56– 58)

not applicable

PART 6 – MISCELLANEOUS Act to bind government

(sections 59– 62) not applicable

Relation to Environment Management and Coordination Act (section 63)

+/- overall management of the environment in Kenya to come under one umbrella legislation +/- need to ensure harmonized plans and programs for environmental management + opportunity for improved ecosystem management

PART 7 – TRANSITIONAL PROVISIONS Transfer from old act to

new (sections 65–67) not applicable

Source: FRR 2007.

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

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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

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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

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• 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.

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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

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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

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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

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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.

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Annex A5.1 Checklist of Environmental Conditions That May Be Affected by Implementation of the New Forests Act

Physical resources Surface water hydrology Surface water quality Ground water hydrology Ground water quality Soil quality Soil stability Erosion and sedimentation Air quality

Will there be • Changes in physical use? • Impairment of soil quality? • Changes in water usage and supply? • An impact on air quality?

Ecological resources Biological diversity Fisheries Aquatic biology Terrestrial wildlife Flora Fauna

Will there be • A reduction in species diversity? • Habitat depletion or fragmentation? • Threatened, rare, and endangered species? • Impairment of ecological functions such as

- disruption of food chains, - decline in species population, - alterations in predator-prey relationships?

Human use values Agriculture and irrigation Aquaculture Livestock keeping Water supply Recreation Flood control Dedicated area use Industry Agroindustry

Will there be • Changes in land use? • Decline in important resources for human use? • Alterations to people’s livelihood strategies? • Industrial use and therefore impacts such as

- changes in effluent discharge, - changes in air and water quality, - working conditions?

Quality of life values Socioeconomic Resettlement Cultural or historical Aesthetic Archaeological Public health Nutrition

Will there be • Loss of valued area? • Displacement of people? • Disruption of communities? • Human health and safety issues? • Demands on services and infrastructure?

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.

Annex A5.2 Environmental Concerns Associated with the New Forests Act 2005 as Identified by Participants in the First Stakeholder Workshop

Issue

PAR

T 2

– A

DM

INIS

TRA

TIO

N

Sec

tions

4 a

nd 5

S

ectio

ns 7

–11

Sec

tion

13

Sec

tions

14–

20

PAR

T 3

– C

REA

TIO

N A

ND

M

AN

AG

EMEN

T O

F FO

RES

TS

Sec

tions

21–

25

Sec

tions

26

and

27

Sec

tions

28

and

29

Sec

tion

30

Sec

tions

32an

d33

Sec

tion

34

Sec

tions

35

and

36

Sec

tion

37

Sec

tions

38an

d39

Sec

tion

40S

ectio

n41

Sec

tions

42–

44

Sec

tion

45

PAR

T 4

– C

OM

MU

NIT

Y PA

RTI

CIP

ATI

ON

S

ectio

ns 4

6–49

PAR

T 5

– EN

FOR

CEM

ENT

Sec

tions

50

and

51

Sec

tions

52–

54

Sec

tions

56–

58

PAR

T 6

– M

ISC

ELLA

NEO

US

Sec

tions

59–

62

Sec

tion

63

PAR

T 7

– TR

AN

SITI

ON

AL

PRO

VISI

ON

S S

ectio

ns 6

5–67

Environment 1. Watershed protection X X X X 2. Biodiversity protection X X X X X X X X X X X 3. Sustainable use X X X 4. Payment for environmental

services and valuation of ecosystem services

X X

5. Arid forests and nonmoist forests

X X

6. Role for plantations to reduce pressure on environment

X X

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7. Baseline inventory needed of forest resources

X

Source: FRR 2007.

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.

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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).

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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.

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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

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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.

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FORESTS

Userslocal community

Forest Department contractors

industry pharmaceuticals

science environmental services

pastoralists, farmers tourists

exporters

Natural processes water catchments

moderation of atmospheric conditions

prevention of soil erosion microclimate generation

carbon sinks

Economic costs preventative expenditure

replacement cost forgone future options

indirect costs

Disappearing forestloss of habitats and biodiversity

loss of water catchment soil erosion

desertification decline in resources

flooding

Byproducts, inputs waste

water pollution eutrophication, air pollution

use of natural resources

Livelihoods

Environmental 0utcomes

Negative practices and factorsmismanagement, 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

Uses construction

timber, paper, poles medicine

honey, wild foods, hunting livestock grazing

agriculture fuelwood, charcoal biological resources tourism, recreation clearance for land

conservation

Processes laws policies

incentives institutions

Structuresgovernment

private sector

Resources natural,

cultural, aesthetic, habitats, biodiversity

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

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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 use and benefits obtained from forests

• timber • charcoal • building

materials • medicines • wild fruits • beekeeping

• watershed protection

• flood control • carbon

sequestration • microclimate

control • storm

protection

• value communities place on looking after resource for their children’s children

• cultural shrines • prayer • aesthetic

benefits

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.

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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:

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• 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.

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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 forest

State managed through management plans. Possible for state to enter into joint management agreement with anyone. Community forest associations may apply for user rights.

• Exclusion of certain groups such as women, youth, elderly, and those with disabilities from forest 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 private sector.

• Many poor people in Kenya do not have security of tenure on their land and so incentives for farm forestry will be needed

Forest plantations

Private sector to be encouraged to develop and manage plantations through appropriate incentives such as land leases, agreements, and concessions

• Opportunities exist for employment on forest plantations.

• Will be important to ensure 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 forests

Local authority is responsible for their protection and management. A forest officer should inspect these forests twice a year. Anyone can apply to enter into a management agreement for all or part of any local authority forest.

• Forest association user rights can be granted; however, if excluded groups are not included in these groups they will be further marginalized from legal use.

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Approval must be given by the board. Private forests May apply for registration as a forest

and therefore be entitled to receive technical advice and loans, and apply 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.

• May result in poor people being excluded from forests they previously accessed.

Source: FRR 2007.

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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

High influence on

Forest Act implementation

Central government (Forest Department, Kenya Wildlife Service, Ministry of Water and Irrigation, Ministry of

Local Government) Private sector (saw mills and

value adding)

Forest officers National NGOs

Research organizations

Low influence on

Forest Act implementation

Community forest associations

Communities adjacent to forests

Private sector (other)

Central government (other) International NGOs Multilateral donors

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

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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)

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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

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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,

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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

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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

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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.

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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.

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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 issue

Questions for social impact assessment of proposed new guidelines and subregulations

Understanding the social features

(1) Analyzing interests, needs, and problems of people • 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 needs of people

• What measures would be appropriate in responding to people’s 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 disadvantaged populations and integrating them into

• Which groups or individuals will benefit from the new guidelines or subregulations, and in what way?

• What measures will be appropriate to ensure that benefits will be targeted specifically toward poor and disadvantaged groups (for

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the development process

example, improving their access to forest products)? • 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 roles of women, as well as men, and ensuring equal benefit

(1) Analyzing, with special emphasis on gender, the situations of individuals and groups of people involved with, or affected by, the guideline or subregulation • What is the likely distribution of tasks among women and men with

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 participation of all stakeholders in the development process and seeking to empower local communities

• How will the main stakeholders of the guidelines or subregulations be actively involved in developing them (for example, formation of user groups)?

• How will the guidelines or subregulations encourage people to participate actively?

• What measures will be appropriate to support the formation of autonomous decision-making bodies at local community level?

Annex A6.2 Matrix of Social Risks and Opportunities of the New Kenya Forests Act 2005


Element of the act

Indi

geno

us o

r dry

land

Farm

fore

stry

or

priv

ate

Pla

ntat

ions

Loca

l aut

horit

y


PART 2 – ADMINISTRATION Functions of the

Kenya Forest Service (section 4)

+/- specific inclusion of poor, women, disadvantaged groups will be needed in policies and guidelines + 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 of the Board (sections 7, 8, 9, 11)

Social + required to be gender balanced -/+ may not have representation of the poor but opportunity to co-opt representation exists

Forest conservancy areas and management (section 13)

+ opportunities for voice of local communities to be heard through community representatives on forest conservation committees +/- potential to benefit from royalties and other rights generated in local area

Funds (sections 14–20)

+/- provision of forest extension services – how will they reach the poor?

PART 3 – CREATION AND MANAGEMENT OF FORESTS Ownership of forests

and rights to forest products (sections

+ protection of community rights to use forest resources (subject to prescribed conditions) - how to ensure that different members of a community have equal access and rights + recognition of importance of forests to livelihoods for local communities

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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 forests (sections 35–45)

+/- local forest conservation committee should be engaged when management plan developed. What about others that may have an interest? How is their voice heard? +/- 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

associations (sections 46–49)

+/- abilities to register a forest association under the societies act +/- can apply to participate in the management of a state forest or local authority forest +/- 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

officers (sections 50–51)

+/- forest officer has the power to arrest – how will the rights of citizens be protected? How will citizens be made aware of what is and is not allowed to happen in the forest?

Prohibited activities in forests (sections 52–54)

Not applicable

Prosecution (sections 56–58)

Not applicable

PART 6 – MISCELLANEOUS Act to bind

government (sections 59–62)

Not applicable

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Relation to EMCA (section 63)

Not applicable

PART 7 – TRANSITIONAL PROVISIONS Transfer from old act

to new (sections 65–67)

Not applicable

Source: FRR 2007.

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Annex A6.3 Social Concerns Associated with the New Forests Act 2005 as Identified by Participants in the First Stakeholder Workshop

ISSUE PAR

T 2

– A

DM

INIS

TRA

TIO

N

Sec

tion

4 S

ectio

ns 7

–11

Sec

tion

13

Sec

tions

14–

20

PAR

T 3

– C

REA

TIO

N A

ND

M

AN

AG

EMEN

TO

FFO

RES

TSS

ectio

ns 2

1–25

S

ectio

ns 2

6–27

S

ectio

ns 2

8–29

S

ectio

n 30

S

ectio

ns 3

2–33

S

ectio

n 34

S

ectio

ns 3

5–36

S

ectio

n 37

S

ectio

ns 3

8–39

S

ectio

n 40

S

ectio

n 41

S

ectio

ns 4

2–44

S

ectio

n 45

PA

RT

4 –

CO

MM

UN

ITY

PAR

TIC

IPA

TIO

N

Sec

tion

46–4

9 PA

RT

5 –

ENFO

RC

EMEN

T S

ectio

ns 5

0–51

S

ectio

ns 5

2–54

S

ectio

ns 5

6–58

PA

RT

6 –

MIS

CEL

LAN

EOU

S S

ectio

ns 5

9–62

S

ectio

n63

PAR

T 7

– TR

AN

SITI

ON

AL

PRO

VISI

ON

S

Sec

tions

65–6

7

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 3. Need for community benefits

X X X X X X X X X X X X X X X X X X X X X X

4. Capacity of communities to engage

X X X X X X X X X X X X X X X X X X X X X

5. Existing processes in 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,

and nontimber forest products

X X X

X X X X X X X X X X X X

X

X X X

X X

X

8. Gender and disadvantaged groups


Source: FRR 2007.

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.

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• 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

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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.

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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

and fees Forest product Minor forest product

and fees Roundwood (especially cypress, pine, and eucalyptus)

Cultivation Roundwood Grazing

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.

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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.

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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.

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Figure A7.1 Revenue Collection in the Forestry Sector

0.0

100.0

200.0

300.0

400.0

500.0

600.0

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

in 2002 Potential revenue collection

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 m3/ha for saw wood, 300 m3/ha for pulpwood, 100 m3/ha for transmission poles, and 80 m3/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 is, 95 m3/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.

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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.

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Figure A7.2 Shortcomings of Kenya’s Forest Revenue Collection

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.

yield

Area

price

Revenue collected = X X

• Inaccurate reporting due to poor area measurement

• Illegal cutting of some parts of a forest before assessment

• Excision of existing plantation for other purposes

• Deliberate under reporting by the assessment team for revenue calculation

• Poor assessment resulting in lower volumes than actual

• Under reporting by the assessment team in collusion with the buyer

• Poor forests establishment • Loss of trees through

animal damage and fires

• Prices can be lower than the true value due to method used to set them

• Prices could be dictated by higher government authorities

• Non collection of revenues even though calculated and invoiced

• Revenues collected but not booked or reported

• Plantations earmarked for cutting and even 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

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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

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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.

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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.

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Table A7.3 Revenue Projections for the Kenya Forest Service 2007–8 through 2014–5 (K Sh)

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.

Revenue Source 2007–8 2008–9 2009–10 2010–1 2011–2 2012–3 2013–4 2014–5

Timber plantationsa 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 industryb 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

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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

Total Recurrent

expenditure Development expenditure Total

Recurrent expenditure

Development expenditure

Share of the budget Share of the budget

Nominal growth

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.

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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).

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Figure A7.3 Nominal Growth Rate of KWS Income and Expenditure, 2002–5 (percent)

-20-15-10-505

101520253035

2002 2003 2004 2005

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.

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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

Budget allocatio

n Actual

Execu tion rate (%)

Budget allocatio

n Actual

Execu tion rate (%)

Budget allocatio

n Actual

Execution rate (%)

Budget allocation

Total 997.7 1,035.

0 103.7 1,315.5 1,157.

4 88.0 1,333.4 1,320.

9 99.1 1,529.7 Funding source Consolid- ated fund 974.9

1,021.3 104.8 1,214.8

1,093.4 90.0 1,174.5

1,200.4 102.2 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

(approved estimates) 2003–4



(approved estimates)

K Sh

billions

Share of total budget

(%) K Sh

billions


(%) K Sh

billions


(%)

K Sh

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 87.8Salaries 0.419 42.0 0.705 53.6 0.717 53.7 0.907 59.3Operations 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 12.2Domestic 0.051 5.1 0.160 12.2 0.123 9.2 0.082 5.4External 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.

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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

-20

0

20

40

60

80

100

120

140

160

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

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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.

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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).

80.090.5

22.6

0.0

20.0

40.0

60.0

80.0

100.0

2003/04 2004/05 2005/06

Figure A7.5 Execution Rate of Donor Assistance

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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).

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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.

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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.

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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.

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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 reforms

Organization and administrative 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 development programs

• Natural Forests Program (conserving indigenous forests) • 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

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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.

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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.

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Note: The net present value forestry expenditure calculations are in annex A7.4 to this appendix.

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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.

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• 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

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.

NET PRESENT VALUE ANALYSIS

-3000000000

-2000000000

-1000000000

0

1000000000

2000000000

3000000000

4000000000

YEAR 1 Year 2 Year 3 Year 4 Year 5 YEAR 6 YEAR 7 YEAR 8

PERIOD IN YEARS

SHILLI

NGS

REVENUEEXPENDITURESNPV

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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.

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• 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

OPERATION Labor 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.

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• 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.)

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• 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

Costs per ha

Other costs

% input from

community % input

from KFS

Labor costs to

community

Labor costs to

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.

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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 ha)

Labor costs

Other costs

REGENERATION AND SITE IMPROVEMENT Cost per man day (K Sh) 205 175Seedling production (1,200 per ha) 0.100 20.500 8.0STAND ESTABLISHMENT Enrichment planting 0.500 102.500 2.5FOREST IMPROVEMENT Research and sample plot maintenance 0.010 2.050 10.0FOREST PROTECTION External boundary maintenance (MD per kilometer) 0.200 41.000 1.0Fire standby and fighting (average per ha) 0.015 3.075 1.0Road (.005 kilometer per ha) 150.000 150.000 45.0Patrols 0.010 2.050 2.0TOTAL 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:

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• 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 (MD per ha)

Labor inputs

Other costs

Community 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 32Fire standby and fighting (average per ha) 0.015 3.075 1.0 4Road (.005 kilometer per ha) 150.000 150.000 45.0 146Patrols 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.

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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


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

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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

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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).

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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

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.

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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

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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.

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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.

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)

Indicator (K Sh

million) (%) (K Sh

million) (%) (K Sh

million) (%) (K Sh

million) (%) (K Sh

million) (%) (K Sh

million) (%) (K Sh

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 3.1Total budget allocation (as % of total budget) 1.0 1.0Nominal 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.

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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.

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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

Approved estimates Actual expenditures

Approved estimates

Actual expenditures

Approved estimates

Domestic 160,000,000 n.a. 123,300,000 n.a. 81,855,000External 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.

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Table A7.1.6 Budget Estimates and Actual Spending for Forest Development Programs 2004–5 2006–7

Estimated

budget Actual

expend.

Share of

budget Budget

execution Estimated

budget

Share of

budget

Nominal growth (2006–7

estimate as share of 2004–5 actual)

(K Sh

million) (K Sh

million) (%) (%) (K Sh

million) (K Sh

million) (%) Natural Forests Program 211.5 231.2 29.7 109.3 434.3 29.6 87.8Industrial Forests Program 320.6 306.8 39.4 95.7 514.8 35.0 67.8Farm Forestry Program 226.1 217.6 27.9 96.3 220.0 15.0 1.1Dry Land Forest Program 21.0 23.2 3.0 110.5 300.0 20.4 1,194.9Total 779.2 778.8 100.0 100.0 1,469.0 100.0 88.6

Source: FD.

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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 seedlings)

24 4,920 200

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

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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.

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Table A7.1.8 Forest Plantation Silviculture Operation Costs Under KFS Management (operational costs for one hectare in K Sh)

I REGENERATION AND SITE IMPROVEMENT CURRENT LABOR COSTS

OTHER COSTS


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


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

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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 (US $)

TIME FRAME COMMITMENT

Technical subcommittee Plantation forest inventory FD, World Bank,

FRSC 500,000June–Nov 2006 World Bank (Project

Preparation Fund) Status of forest areas FD, FRSC, MENR

10,000

June–Nov 2006 No donor commitment

Conservancy boundaries (digitize the map)

FD,FRSC 5,000

June– Aug 2006 No donor commitment

Preparation of subsidiary legislation

FAO,FD, FRSC (consultancy) 322,000

June–Oct 2006 FAO

Guidelines for private sector engagement

FD, USAID, World Bank, FRSC (consultancy) 10,000

June–Oct 2006 USAID

CBA for community and private sector participation

FD, FRSC,MENR, Chief Conservator of the Forest Wamukoya (consultancy) 14,300


Resubmit Forest Policy to Parliament

FD, MENR, FRSC

1,500

No donor commitment

Workshop with parliamentary committee on draft Forest Policy

FRSC, MENR

4,300

FD, UNDP

Subtotal 867,100 Delinking subcommittee Constitute delink task force MENR, FD,

Treasury, AG, Office of the President 3,500


Staff capacity analysis of FD MENR, FD, FRSC, consultant

4,300

June–July 2006 FD, MENR, USAID

Assessment of assets and liabilities

FRSC, MENR, FD, consultant 6,400

June –Aug 2006 FD, USAID

Workload analysis FRSC, DPM, MENR, FD, consultant 6,500

June–Sept 2006 FD,USAID

Strategic orientation FRSC, MENR, FD, USAID, consultant 4,300

June –Aug 2006 USAID

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ACTION POINT RESPONSIBILITY BUDGET (US $)

TIME FRAME COMMITMENT

Categorization of KFS Delink task force, FD, MENR 750

June–Nov 2006 MENR, FD, USAID

Draft management systems Finland, KEFRI, FRSC, MENR, Consultant 6,000

June– Nov 2006 No donor commitment MENR, NEMA, FD

Facilitation of FRSC MENR, development partners 15,400

June– Dec 2006 No donor commitment MENR

Facilitation of Reform Secretariat

FRSC, MENR, development partners 85,700

June–Dec 2006 USAID, MENR, JICA

Subtotal 132,850

Communication and publicity subcommittee Stakeholder briefing (FD Hqs, regional workshops)

FRSC, MENR, development partners, stakeholders

68,000 July–Nov 2006 FD, NEMA, UNDP East African Wildlife Society, World Bank

Long-term partnerships FRSC, task force, MENR, development partners, private sector

1,450 July–Sept MENR, donor coordination group, private Sector

Feedback and updates to FRSC and stakeholders

FRSC, MENR, secretariat

4,300 June–Dec 2006 Partnership fund USAID

Focused sensitization FRSC, MENR, development partners, private sector

20,000 July–Aug 2006 MENR, UNDP

Resubmit Forest Policy to Parliament

FRSC, MENR, Parliamentary committee, development partners

No donor commitment

Resource mobilization for forest sector reforms and development (short term)

FRSC, MENR, development partners, private sector

1,450 June–Nov 2006 No donor commitment

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)

2005–6 2006–7

Nominal increase

(%) Recurrent expenditures 1,343.0 1,290.7 -3.9Development expenditures 186.8 742.8 297.7Total 1,529.7 2,033.5 32.9

Source: FD.

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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.

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Figure A7.2.1 Revenue Collection Under Three Different Efficiency Levels

Source: FRR 2007.

-

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

700,000,000

KENYA SHILLINGS

OPTIMAL CASE UNDER EFFICIENTMANAGEMNT

ACTUAL FIGURES

EFFICIENCY LEVELS

REVENUE COLLECTION LEVELS

REVENUE COLLECTION LEVELS

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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.

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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.

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 4,291,602,913Expenditure 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 2,317,465,573Discounted 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 1,643,033,347NPV -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

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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.

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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:

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• 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

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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

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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.

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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 Grassland Other

12066

2,031Total indigenous

2,217

Plantation Cypress Pines Eucalyptus Mexican Not stocked

95950442188

Total plantation 1,162

Other (Mainly Nyayo Tea Zone) 239Total 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

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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.

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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 Timber (m3) — — — — 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 Fuelwood (1 stack = 3 m3) or in m3 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.

Table A8.4 Projected Revenue Collection in 2007 (K Sh)

Source Amount in 2005

Amount in 2007 Method of calculation

Saw logs(clear fells) 0 14,000,000(40 ha × 250 m3/ha × 1,400 K Sh/m3)

(thinnings) 4,800,000(40 ha × 120 m3/ha × 1,000, K Sh/m3)

Fuelwood (plantations) 14,405 1,400,000(80 ha × 25 m3/ha × 700 K Sh/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

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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 (K Sh)

Total costs (K Sh)

Community capacity building 20 (workshops for leaders, demonstration seminars for community members

50,000 1,000,000

Private sector and community association formation and agreements

agreements, contracts, licensing, guidelines, and the like

n.a. 200,000

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 40,000 160,000EEqquuiippmmeenntt ppuurrcchhaassee aanndd rreehhaabbiilliittaattiioonn PPuummppss,, ttoooollss,, ccoommppuutteerr aanndd

pprriinntteerr,, ccaarr rreeppaaiirrss aanndd ttrraaccttoorr n.a. 11,,220000,,000000

Forest Development Management planning, mapping, and inventories

1 for the whole area 1,800,000 1,800,000

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

establishment 24,000 per

ha 624,000

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 205 246,000Total 9,546,750

Source: FRR 2007. Note: MD = Man day. n.a. = Not applicable.

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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,

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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

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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.

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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.

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• 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

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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.

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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.

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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 and Institutional

• Management capacity is lacking in forest stations

• Local communities are willing to participate and are registering forest associations in anticipation of implementation of the Forests Act; however, they have inadequate capacity to enable them to participate fully and conflicts of interest may affect their cohesiveness.

• Participatory forest management capacity at the FD is lacking and at Hombe, community associations seem to be ahead of the FD in participatory forest management.

• On plantation management, the Hombe case study suggests that it would be necessary for the CFA, the KFS, and the private sector to discuss partnership alternatives.

• Develop capacity to prepare management plans at local community and forest station levels in a participatory way.

• Strengthen FD forest stations

to enable them to operate effectively.

• Though most CFAs and

private sector interests are focusing on commercial plantation, this focus should be broadened to integrate forestry management with other activities, such as ecotourism, beekeeping, and the like.

• The FD should work out

participatory forest management methods that will enable officers in the field to identify associations with which to work. These methods should recognize 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.

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• 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 limits forest sector development.

• Management of funds will be devolved to forest stations once the act is implemented.

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• Most forest station

infrastructure is dilapidated, calling for huge investments.

• In the absence of clear

benefit-sharing mechanisms, local communities are coming up with high expectations.

• One of the lessons learned

from NEMA is that funds should be allocated to all the organs created by the act. The ones under NEMA are underfunded, for example, only 2 percent of funds allocated to NEMA go to districts.

• Financial analysis indicates

that Hombe forest station is capable of sustaining its operations from revenues generated.

Accounting procedures for transparency should be put in place at the station level. Currently, such procedures are lacking even at the district level because the FD does not have its own accountants.

• Forest station infrastructure,

including buildings, should be improved.

• NEMA, in its role as the

coordination body on environmental issues, urgently requires strengthening, particularly through the provision of financial resources, but also through devolution of power to both provincial and district levels and training on negotiation and conflict resolution.

• 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 forest management and formation of community associations is varying among regions on the basis of incentives. There are some forest areas, especially in Western,

• Priority should be given to settlement of victims of forest evictions at Hombe and other forest areas. Forest encroachment issues should be handled in a well-coordinated approach to ensure that human rights

Nyanza, and Coastprovinces, where forest-based incentives to enablecommunity involvement areli mited. In such areas theKFS will still play the majorrole in forest management.

• The Hombe Forest caseshows that emerging CFAsshould ensure protection oftraditional user rights andthe rights of disadvantagedgroups, and this should bestreamlined in theirconstitutions.

issues are addressed. Theforest management leadagencies, such as the FD,local county councils, and theMinistry of Lands, shouldwork as a team on this.

• Working conditions of FDstaff should be improved.

• The ban on timber harvestingshould be lifted once the actis gazetted fori mplementation.

• Poor working and livingconditions of FD staff resultin lack of motivation.

• The ban on timberharvesting has negativelyaffected the saw millingindustry and livelihoods ofpeople employed andsupported by the industry.

Environmental •

•

• Environmental issues andmatters are poorlycoordinated as a result ofli mited resources provided toNEMA staff at provincial anddistrict levels.

• Local communities areaware of the role played bythe forest, for example,acting as a wind break, andassisting in provision ofwater; hence the communityat Hombe is activelyinvolved in its conservation.

Strengthen NEMA atprovincial and district levels.

Invest in management ofindigenous forest for the roleit plays as an importantcatchment area, wildlifehabitat, and tourism.

• Ensure planting of the righttrees in water catchmentareas. Some eucalyptustrees are wrongly sited atHombe.

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SECTION 7. CONCLUSIONS

Hombe case study is not characteristic of the majority of forests and neighboringcommunities in Kenya. It is a unique case study that provides far-reaching insights into theplethora 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 policymakers with opportunities to assist in the drafting of rules and regulations to operationalizethe Forests Act 2005 and pilot various models and ideas with CFAs.

The analysis of Hombe from an environmental perspective provides lessons that are likely tobe broadly similar across the country. It is likely that there will be overlaps in mandates andmanagement of watersheds, forest areas under dual gazettement, and management forbiodiversity and the country’s gene pool. However, solutions through NEMA andharmonization of the different ministries and lead agencies are feasible with sufficientresources.

Hombe forest station can be self financing but for its revenue goals to be achieved moreinputs are needed to enable efficient revenue collection, resource assessment, and resourcemanagement.

Hombe as a case study is clearly limited in application of the lessons learned to forests undervarying jurisdictions in Kenya. Some of Kenya’s forests lie within local authorities or trustland. Thus, it is recommended that a future case study be focused on the arid to semi-aridforests in Kenya, where issues of local authority and trust land can be further explored incombination with the dynamics of different communities.

The Hombe case study indicates that with proper rules and regulations most stakeholderswill benefit from implementation of the act, but the KFS as custodian of the forest will act asthe “big brother.” However, the Hombe case study also clearly shows that small-scalesawmillers will lose out because of capital requirements and efficiency. In the absence ofcommunity cohesiveness, local communities will also lose out in certain areas because theKFS may not enter into any partnership with community associations that are not strong andrepresentative. On the issue of awarding concessions to the private sector, the majorchallenge as shown by Hombe is engagement of the private sector in management ofplantations previously established by communities through informal arrangements with theFD. There are also issues surrounding district resources, whereby politicians are againstallocation of forest plantations to private sector interests outside their districts. One way tohandle this situation would be to make sure that those private enterprises make somepayments 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.

population1974populationestimate

— — 25,775 12,275 7,454 6,046

1974 area(km2)

3,284 — 71 29 24 18

1979population

— 127,359 26,408 — — —

1979 area(km2)

— 324 89 — — —

1994population

— 179,654 — — — —

Nyeridistrict

Mathiradivision

Rugurulocation

Kiamarigasublocation

Sagana Iruri Ruturu

1999censuspopulation

677,216 — 16,501 4,486 3,960 3,911 4,144

Area (km2

) 3,266 389 32 8.8 _ 8.1 6.9 8.2Populationdensity(populationper km2)

202 388 516 510 489 567 505

Number ofhouseholds

— — 4,121 1,090 1,118 943 970

Source: FRR 2007.Note: — = Not available.

Table A8.1.1 illustrates the population census information extracted from the variouscensuses and DDPs. Historically, it can be seen that Nyeri district has remainedapproximately the same size, but Ruguru location and the sublocations have almost halvedin size over the years. An additional sublocation has been added and the names havechanged with the exception of Kiamariga. This explains the apparent contradiction inpopulation projections between 1969 and 1999.

Furthermore, the DDPs indicate that in 1974–8, Mathira division was only subdivided into 5locations and 36 sublocations. In the 1989–93 DDP, the number of sublocations increasedfrom 36 to 38. In the 1994–6 DDP, the number of locations increased to 7 and the number ofsublocations to 41. In the 2002–8 DDP, the number of sublocations decreased to 37.

In 1969, the average population density was calculated to be 108 people per km2 (DDP

1979–83). In 1969, the proportion of the population that was said to be rural was 96.6percent but this figure dropped to 93.8 percent in 1978, implying relatively high rates of urbanmigration. The working population amounted to 42.3 percent of the total. During this planperiod, the national poverty line was stated to be K Sh 2,000 per family per year, but the plandid not contain any information on predictions of the number of households or people livingbelow that line.

In the 2002–8 DDP, the population density for the three sublocations varies between 489 and567 people per km

2. 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, theproportion of people said to be rural has decreased to 70 percent, with about 30 percent

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living in the urban centers. The working population has increased to approximately 56.4percent of the total. The number of people living in the district below the absolute povertyline is recorded as 206,700 or 31 percent of the district total.

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APPENDIX 9 STAKEHOLDER RESPONSE TO THE POLICY ACTIONMATRIX

A third workshop was coordinated in collaboration with the Forest Secretariat ReformCommittee to agree on priorities for action and to invite stakeholders to make commitmentsto 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 thediscussion on each policy topic. For each topic, participants were asked to indicate whetherthey disagreed strongly (-2), disagreed (-1), were neutral (0), approved (1), or stronglyapproved (2) of the measures being proposed. A total of 32 completed questionnaires werecollected at the end of the meeting but the number of responses to each individual questionvaried because attendance levels fluctuated through the day. On average, about 30participants responded during the morning session with 24 to 25 present during theafternoon. 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 inthe tables. The sixth column indicates the number of responses to each topic and the finalcolumn 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

Responses%age scores 1+2

1. Independence of KFS, Board and Director 1 10 19 30 96.72. Cooperation with other agencies 3 0 15 14 32 90.63. Strategic Plan for the Forest Sector 2 0 12 16 30 93.34. Role of different forest types 2 3 10 15 30 83.3

5. Accountability to stakeholders through annual reports 1 11 20 32 96.96. Engaging stakeholders in template / content of new forest

management plans 1 0 10 20 31 96.8

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 30 100.011.2. Three days training 2 3 8 13 4 30 56.712. 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%T17. Improve enforcement 2 3 8 18 31 83.9

PRIORITY 2 - ENABLING COMMUNITY PARTICIPATION No ofAND BENEFIT SHARING -2 -1 0 1 2

Responses%age scores 1+2

18. Increase public participation in forest issues 1 1 9 19 30 93.319. Prepare inventory of best practice in participation 1 2 15 11 29 89.720. 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 86.222.1 Develop partnerships with RCFAs 0 4 10 12 26 84.622.2 Undertake capacity needs assessment 1 2 9 15 27 88.923.1 Identify full range of community benefits 1 1 7 18 27 92.623.2 Set up system of annual accounts 0 2 9 13 24 91.723.3 Develop forest-specific guidance notes on benefit sharing 0 2 6 17 25 92.024.1 Study nature and value of environmental services 1 4 10 13 28 82.124.2 Set up pilot study on charges for environmental services 1 3 13 11 28 85.725. 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 24 100.027.1 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 65.428.1 Prepare model concession contracts 2 9 13 24 91.728.2 Prepare internal guidelines on contracts 1 9 13 23 95.728.3 Undertake pilots on model contracts and concessions 1 5 6 11 23 73.928.4 Apply model conditions to KFS State Forests 4 12 8 24 83.328.5 Publicise standard arrangements 1 1 7 14 23 91.329.1 Publish all contracts once terms are agreed 0 11 11 22 100.030.1 Develop framework for incentives 2 8 15 25 92.031.1 Introduce rules for private owners 1 1 2 8 11 23 82.632.1 Develop regulatory framework 4 8 13 25 84.032.2 Develop criteria on inadequate management 3 8 13 24 87.532.3 Introduce rules for sharing benefits with local communities 1 0 6 16 23 95.732.4 Introduce clear rules on private forest management 2 1 4 10 8 25 72.033.1. Promote restructuring of forest industry 1 3 9 12 25 84.034.1 Undertake analysis of charcoal production 2 0 5 18 25 92.035. Develop policy brief on role of farm forestry 3 5 16 24 87.5

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