A key committee of the National Assembly has backed a push by the Ministry of Environment to reintroduce compliance audit fees, a move likely to raise operation costs for real estate developers.
The Budget and Appropriations Committee of the National Assembly wants the ministry to speed up a return of the Environmental Impact Assessment (EIA) licence processing fees in the financial year starting July.
The reintroduction, the team wrote in a report for debate in the House, will see the National Environment Management Authority (Nema) generate about Sh1.4 billion every year.
This will cover some of the operating costs for the environmental management regulator and reduce reliance on taxpayers, they argue.
Investors’ burden
“The removal of these fees has had unintended negative effects on Nema and the government since it now heavily relies on exchequer funding for all its operations,” the team wrote in its report on the 2022 Budget Policy Statement.
The fees should be included as appropriations-in-aid for Nema when the budget estimates for FY (financial year) 2022/23 are submitted to Parliament, the committee proposed.
Environmental audit processing fees at the rate of 0.1 per cent of project value was scrapped in January 2017 to ease investors’ burden as they sought to venture into real estate and speed up starting procedures.
Real estate developers used to pay between Sh10,000 and Sh40 million depending on the value and risk levels of projects.
The Principal Secretary for Environment and Forestry, Dr Chris Kiptoo, said last December that, the proposed reinstatement of the fees, which is part of the “comprehensive review” of the Environmental Management and Co-ordination Act, was in its final stages after getting Cabinet approval.
Climate action
He said additional revenue will give Nema more teeth to mitigate environmental degradation and pollution, citing under-staffing because of inadequate funding.
Nema, he said, has a staff count of less than 450 against a requirement of 1,500 workers.
“Nema is weak in its regulatory function because despite having the powers, out of your [private sector] lobbying for ease of doing business, you took away the EIA fees that it used to charge. So the ‘polluter pays’ principle is now never applied,” Dr Kiptoo told a business leaders forum in Nairobi on climate action.
Dr Kiptoo added: “Mwananchi (citizen or taxpayer) is paying for our conservation effort when we should be respecting the ‘polluter-pays’ principle.” BY DAILY NATION