Are you a housing sector investor? Avoid huge environmental penalties

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As the country’s economy improves, many people tend to engage in construction. According to the State of Environment and Outlook 2010 Report published by NEMA (2011, page 15), cement consumption increased by 16.2% from 2671 million tonnes in 2009 to 3104 million tonnes in 2010 and this was attributed to the increased investments in building and road construction sector. Growth in the construction sector registered a 7.3% rise in loans and mortgages from Commercial banks which rose from KES 30.4 billion in 2009 to KES 32.6 billion in 2010.

The number of housing units approved in Nairobi and other towns rose in value from slightly over KES 30 billion in 2006 to over KES 97 billion in 2010 (GoK, 2011). This is an exponential increase meaning that many people invested in housing either as single dwelling or multiple units.

The annual demand for houses in Kenya is 150,000 units while the annual supply is less than 35000 units (OECD et al 2011). This is a huge discrepancy and makes the housing sector one of the fastest growing.

Construction industry has negative impacts on the environment from two fronts. For instance it is a major user for materials, water, and energy resources. Its also a major cause of air, water and air pollution.

Obtaining local construction materials such as sand, limestone and stones from quarries makes the ground degraded and less aesthetically appealing. The gaping holes are a safety hazard for human beings and wildlife. These holes fill up with water and become breeding grounds for disease causing organisms such as mosquitoes.

Buildings also use steel metal, which has to be transported in ships and by road causing pollution at sea, land and air.

It is common to find many middle-income earners investing in the housing sector. They could be doing their own single dwelling houses or multiple residential and commercial units. For each of these categories, the Environmental Management and Coordination Act (1999) demands that every effort is done to ensure that there is minimal impact on the environment.

If you are aspiring to be a housing sector investor, here below is a list of legal expectations from an environmental perspective that you need to observe.

  • Undertake Environmental Impact Assessment study and submit the same to NEMA for approval. There are several things that you need to know about EIA
  • The study is done by an EIA/EA expert approved by NEMA. NEMA only looks at reports at submitted by experts who have been authorized to practice, and these licenses are renewed annually. You may therefore need to verify that the expert is licensed to practice.
  • If you do not know any of the licenced NEMA EIA experts, there is no need to worry. There is a list of these experts on the NEMA website http://www.nema.go.ke/index.php?option=com_content&view=article&id=262&Itemid=648
  • The NEMA list is updated and only contains those licensed to practice that year. Just get in touch with any of them and you will be assisted
  • Kindly note that there are two types of experts licensed by NEMA i.e. Lead expert and Associate expert. Only Lead experts can present a report to NEMA. The Associate expert works under supervision of a Lead Expert and cannot submit a report directly to NEMA. Hence when you hire the expert to assist you with conducting the study, its advisable that you hire the lead expert. Otherwise you may be working through a middleman who may not bear ultimate responsibility and this may make the cost to go up.
  • For an EIA to be accepted at NEMA, you have to supply several documents which include the EIA report done by the expert, proof of land ownership, approved plans from County government, Certified Bill of Quantities (BQ). The expert is also expected to prove that he/she is licensed to practice during the year.
  • You are expected to pay NEMA the EIA fees amounting to 0.1% of the project cost as shown in the Certified BQs. The minimum fee payable is KES 10,000. We have been informed of instances where the lead expert asks for extra money to facilitate processing of the EIA at NEMA. Note that any extra charges beyond the 0.1% are illegal and amounts to corruption. Please don’t give more than 0.1% of the project cost as indicated in the BQ. Insist on getting a copy of the NEMA receipt from the expert.

What happens at NEMA after submission of an EIA Project report?

  • Once an EIA report is submitted to NEMA, you are supposed to get an acknowledgement letter immediately. The report undergoes review by NEMA experts and other lead agencies and a response is given to the investor within 45 days.
  • Note that 45 days apply to those projects that are of low environmental impact and most residential houses fall under this category. If the building project is huge, NEMA may categorize it as having high environmental impact and may demand that it be subjected to more public participation through a Full EIA Study. These later kind of reports take 90 days to process after submission to NEMA and also requires the investor to advertise the project on newspapers and Kenya gazette in a NEMA prescribed format.
  • The law makes it clear that if NEMA does not give a response within the stipulated time mentioned above, the investor may proceed with the project without being accused of breaking the law.

Penalties for constructing without an EIA license

  • It is an offence punishable by law to construct before acquiring an EIA license (EMCA 1999 section 138). If convicted of such an offence you could be fined upto KES 2 million or two years jail term or both. You may also be required to demolish your building. These penalties are huge and should be avoided at all costs.

Please be patriotic. The law was made for our common good. Let us all comply.

References

OECD, AfDB, UNECA & UNDP (2011) Africa Economic Outlook: Africa and its emerging partners. OECD, AfDB, UNECA & UNDP. OECD Publishing. Paris

NEMA 2011 State of Environment and Outlook Report. NEMA Nairobi

@ Ayub Macharia 2014

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