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ALL EYES ON YOU: Prof Judi Wakhungu, Cabinet Secretary for Environment, Water and Natural Resources expected to offer radical leadership and steer the Water Bill, 2014 in a win-win for opposing interests

The Water Bill 2014 is causing silent ripples in the manner the water sector will be run even as the Annual Water Sector Stakeholders Conference is called for March 27 - 28, 2014 in Nairobi with no specific focus on the contentious legislation. Quiet but strong opposition to the Bill, now with both the Commission on Implementation of the Constitution and Attorney General's office, stems from what different quarters summarize as;

(a) Watering down the current Water Act, 2002 (a repeal of Cap 371)

(b) Focus on high institutional recurrent costs as compared to even less development and value for money from the many national institutions which could easily be merged or done away with.

(c) Low-level leadership from the Ministry of Environment, Water and Natural Resources. There has been low-key public participation on development of the new law which has far-reaching implications especially on the sector governance

(d) Low level emphasis on the devolution of water services as clearly stated in Schedule Four, Roles of the County Governments and provisions of Article 6(2) of the Constitution of Kenya, 2010

Here is a sample of one perspective of how the Bill can be improved:

Devolution is an opportunity to deepen and expand on implementation of the rights to water and sanitation by the creation of a better legislation at national and county level which clarifies the minimum national standards in water and sanitation services and also provides a coherent linkage between the two levels of government to ensure coordinated implementation of the rights and enforcement measures on performance against the water service providers and third parties. 

The new bill should not claw back or retrogress from what was already provided for in the Water Act 2002 but should instead improve on those provisions in order to ensure the progressive realization of the rights to water and sanitation as provided for by the constitution.

a. Water and Sanitation being Human rights must be guided by a national vision on how right to water to and sanitation shall be provided through a National Water Policy
b. The National Vision must be underpinned by national legislation which provides an appropriate institutional framework to ensure the progressive realisation of the right to water and sanitation. There must be amendment of the current Water Act 2002 by a Water Bill that takes in the devolution imperative and human rights standards.
c. National roles and county roles shall be clearly unbundled in policy and law and responsibility and accountability assigned to each level of government to ensure that there is no duplication of roles between two levels of government and wastage of scarce resources
d. There shall be adoption, implementation and periodic review of National Water and Sanitation Strategy and Plan of Action to show the tangible actions that will be taken by the two levels of government to progressively realise the right to water and sanitation through a participatory and transparent process with appropriate right to water and sanitation indicators and benchmarks
e. Under the human rights framework the National Policy, Law and Strategy must aim to ensure that decision making within water and sanitation sectors between two levels of government are coherent and mutually reinforcing towards full realisation of the rights to water and sanitation.
f. Due to the different types of players at the horizontal level and the different number of actors and institutions at the vertical levels involved in the delivery of services it is mandatory that there is an independent institution to monitor, regulate and ensure that water and sanitation standards are upheld and monitored both at national level and county level and created service delivery institutions are transparent and accountable in meeting that right because ultimately the State has an obligation to ensure that it meets the rights it has provided under the Constitution and has covenanted to under the International Covenant on Economic, Social and Cultural Rights.
Attached is a list of issues in the Water Bill 2014 which show that the Bill does water down what exists in regulation and in governance and will not as currently drafted lead to an orderly sector. Some issues are poor draftsmanship, some issues are on claw back on what currently exists and some issues have been omitted even though the sector has discussed them and are required under due to the fact that water and sanitation are human rights.

Correction of these issues will only take very little drafting intervention and do not in any way derogate from the principle of devolution and enhance transparent and accountability in the water services subsector.

1. Governance provisions for the regulators in the water sector.
a. There is a watering down of provisions relating to the water services sector vis a vis the resources sector with regard to the establishment and running of the regulatory authorities. Compare sections 9-16 of the resources regulator and sections 69-72 for the services regulatory authority. The watering down of provisions from what was prevailing in the Water Act 2002 is unmerited. In the Water Act 2002 the establishment and governance of the two structures was the same in section 7-10 for WARMA and section 46-48 of WASREB. It is not clear why in the Bill the services regulator the provisions are weakened.

b. Section 10 of the powers of resources regulator preserves what was prevailing in the Water Act 2002 almost in total including collecting fees and charges and determining and setting permit and water use fees. On the services regulator, the power to determine and set various fees and premiums a power that was in the Water Act 2002 section 47 (1) o has been removed. Provision of these section in the Water Bill would not go against devolution as economic regulation of the whole water services sector which is a facet of national economic planning is still a national function.

c. Section 71 of the Bill should retain section 47 (1) o of the Water Act 2002 and make it clearer by stating that the services regulator shall have the power to set water service fees which promote the right to water and sanitation and shall include a regulatory levy and relevant license fees.

d. Section 11 of the Bill on the resources Authority as regards administrative issues especially 11(2) a, on funding is not replicated for the services regulator and this should be included in section 70 of the Bill.

e. The criteria of appointment, the Board of Directors of the national regulator for services should be in the main law not in the schedule because of the importance of this institution in providing oversight on protection of consumer interest and the implementation of the right to water and sanitation. Therefore what is in section 12 of the Water Bill 2014 for the resources side should be copied on in section 70 on the services side as well. Section 70 should ensure that the members are defined as those nominated from the Law Society of Kenya, a nominee from the Institute of Engineers of Kenya, a nominee from ICPAK and a nominee from the consumer organisation as per the provisions of the Consumer Protection Act. A regulator of a sector is supposed to be invested with independence and this is one way of ensuring that discretion is fettered and independence is vested in the regulator.

f. It is also not clear why the treasury and parent ministry nominees were not included in section 70 of the Bill yet they are included in section 12 of the Bill for the resources regulator.

g. General duties and responsibilities of the services authority are not included in the bill yet those of the resources regulator are included in section 13 of the Bill. If the services regulator is the body established to provide monitoring services and regulatory services for the whole country on the rights to water then it is imperative that the main statute give a direction on general duties based on the role to monitor the regulation and implementation of the right to water by ensuring there is respect, protection and fulfilment in that right by the agencies that are created in the water services sector.

h. There should be introduction of a section immediately after section 69 providing for these measures.

i. The provisions for the chief executive officer of the services regulator are watered down compared to that of the resources regulator. The provisions in section 15 of the Water Bill 2014 shall be introduced to replace those in section 72 to secure the duties of the CEO of the services regulator in the law and also the term of office which is 5 years for the resources regulator shall also be 5 years for the services regulator.

2. Governance of the water services sector through hierarchy of institutions
a. The naming of Part III for the resources sub sector is very well titled, regulation of the management and use of water resources. On the other hand the water services section part IV is casually titled water services yet it should read properly all that is provided for in that part which is regulation and provision of water services.

b. Section 62 merely mentions the right to clean water. However it should expand the provision to state that the minimum standards shall be set in law based on the following criteria which according to international law accompany those rights that is :
i. Availability
ii. Quality/Safety
iii. Affordability
iv. Acceptability
v. Accessibility - Physical accessibility and information accessibility
c. The section shall then expand further and state that all water services in Kenya shall be provided according to that criteria and minimum standards shall be set nationally which bind all government agencies, and these standards shall be used to progressively realise the rights to water and sanitation and shall bind all entities involved in the provision of water services.

d. Section 63 on the National Water Services Strategy is commendable however it does not mention monitoring which is critical on the rights to water and sanitation this should be included immediate after 63(3) c to form the new (d). The mere fact that this is clause is drafted in language which shows it allows for inclusion does not cure that if fails to recognise the centrality of monitoring in realisation of the right to water services.

e. Section 63(5) does not provide the time, intervals and creation of the plans and the publication of the Plan. Under a Human Rights Based framework this information must be put in the law to ensure that the creation of the plans is as statutorily prescribed in time content and interval to bind the government.

f. Again there is a disregard to the general good order of the water services sector compared to that of the resources sector in the Bill. At the resources section the first institution to be mentioned after introduction of Part III is the resources regulator, which is the body primarily charged with the management of the resources. However on the services side, this order is not followed and there is no reason why it should not be followed. In the services sector bodies which are to be monitored by the service regulator are provided for before introduction of the powers and functions of the regulatory body that shall be charged with the good order and management of the water services sector. In comparison with the Water Act 2002, the first institution on the services side was WASREB. The bill provides no reason as to why it changed what was prevailing in the Water Act 2002.

g. It is recommended that Section 69- 72 in the bill shall move to where section 64 currently is and section 64 should become the new section 73. The reasoning is simple; the services regulator regulates and monitors on behalf for the government and consumers the progress in the realisation of the right to water. This realisation of the right to water depends on the activities of various actors:
• Water works development bodies
• Water service providers
• Third parties
h. It should follow then that before any other body is introduced the services regulator, its powers and functions should be introduced and expanded on so that all the other bodies which shall be monitored and regulated by the services regulator are mentioned in the law after provisions of the powers and functions of the regulator are complete.

3. Clarification of the governance structure of the water services by statutory provisions of clear linkages between the different institutions
a. Water works development bodies are created which are called agencies of national government whose primary aim is the development of national public works. WASREB understanding of this is because of schedule 4 of the Constitution 2010 which leaves hydraulic engineering and national public works with the national government. These bodies are the successors of the water service boards currently established under section 51 of the Water Act 2002 and which are licensed on all aspects relating to water services by WASREB.

b. According to the Bill these bodies shall receive county water plans and aggregate them into a single plan; provide input to the national development and financing plan; provide technical assistance to counties for asset development of water service assets and hand over developed public assets to licensed water service providers whether county based or cross county based in accordance with regulations made by the cabinet secretary. Section 67 f also states that a water works development body shall facilitate the creation of a cross county water service provider.

c. All these functions the agencies are empowered to do by law affect the progressive realisation of the right to water and hence must be provided according to standards set independently by a regulator and which must be monitored and reported on in law for the following reasons:

i. The quality of the assets developed affects the costs of operation and maintenance of the providers. If there are poor practices in design and construction due to lack of adherence to standards then the poor quality asset will invariably drive up the cost of providing water services as it has to repaired constantly and various parts replaced which would not be the case if the standards were adhered to. The money for repair and replacement before end of shelf life will have to come from the water tariffs paid by consumers.

ii. The provision of the assets must be to ensure that water services are provided as widely as possible to areas that are not currently covered. There is the risk of overdevelopment of particular areas which already have basic service and might not need more (upgraded) asset development at the expense of areas which are marginalised because the former areas are easier to work in and it is important that an independent regulator is able to raise these flags to ensure all areas of the republic have a basic service.

d. Unfortunately section 67 and 68 provide no linkage with the work of the services regulator to ensure that the work of these bodies is placed under supervision because they affect in a very large way the provision of new assets and replacement of assets which are needed to ensure more Kenyans get water. Water coverage is currently at 53% in Kenya. A lot of financial resources will be expended to grow the infrastructure progressively. Yet the Bill omits to ensure that the use of these financial resources is monitored by an independent regulator by failing to provide an express legal mechanism such as a license or linkage on monitoring between the water works development bodies and the services sector regulator.

e. This is retrogression from what is currently prevailing in the Water Act 2002 – the provisions of section 57(1) d of the Water Act 2002 where the current regulator WASREB is supposed to monitor infrastructure development were inexplicably not carried to the Water Bill 2014.Similarly the provisions of section 109 of the Water Act 2002 which entrenched the role of monitoring of works expanded on Section 57 (1) d which expanded on section 47(1) d of monitoring of standards. In the Water Bill 2014 this linkage of section 57 and 109 is lost on the critical area of asset development and two of the key criteria in implementation of any human right– accountability and sustainability were inexplicably omitted for agencies created at national level.

f. Section 67 f in the Bill is also misplaced and that power of facilitation of the creation of cross county water services providers does not lie with these water works development bodies but with the services regulator and this should be corrected in the drafting of the section. WASREB has just completed a study which has been submitted to the Ministry and all county governments on the most viable way to provide water services in a cross county manner due to economies of scale in cost and human resource and the fact raw water resources are shared between counties.

g. In the proposed Water Bill 2014 section 71 (1) f borrows from section 47 (1) d in the current Water Act 2002 but inexplicably does not borrow section 57(1) d which would make that section effective to show that a monitoring instrument or mechanism needs to be in place due to the importance of these bodies in the provision of water services to all.

h. Secondly section 68 of the Water Bill 2014 also entrenches an unworkable paradigm in asset management of water services where the assets after being developed by the water works development bodies are handed over to the water service providers.

i. This transfers accountability and risk of those assets not to the person who has created them but to the person who is operating them. There is no incentive for the asset developer to be efficient, to ensure value for money, to create assets for effective use or to be guided by the needs of the operator in the design and construction of the assets.

j. The Bill must cure that oversight by ensuring the provisions of section 57(1) d also apply to the water works development bodies who create most of the assets instead of only having that provision apply to the water service providers as has been done in section 85(1) e of the Bill where it only applies to water service providers and also ensure that county water service providers are involved in the design and construction process of these assets.

k. This is because Regulation of the provision of water services applies all through the chain of provision of water services from production of the water , creation and maintenance of the infrastructure to carry that water to consumers and the actual distribution of that water to consumers. Also design and construction is dictated by the needs identified by the county water service providers and they should have a greater participation in the manner in which this infrastructure is created. It is absurd to only regulate what is in the county and not what is being done by agencies of national government. Currently a comprehensive model of asset development monitoring has been created by WASREB called WASBIT. The new water bill should ensure that there is deepened oversight of asset development if Kenya is to achieve basic water services to all.

4. Other unclearly drafted provisions which lead to confusion on roles of various institutions

a. Section 71 (1)c shall specifically state which water service providers the regulatory authority shall regulate; if it is cross county water service providers it shall state so as well as the water works development bodies as it is supposed to monitor their operations.

b. Section 71(1) g shall state that the advice on financial support shall not only be to the cabinet secretary but also on the county government. This because financial support of water service providers is based on evaluation and justification of tariffs of the county water service providers and is a major component of affordability and sustainability in the provision of water.

c. In the Water Act 2002 section 47(1) o the power of the regulator to set water service charges fees and premiums was inexplicably omitted in the Water Bill 2014. This should be reintroduced in section 71 (1) as q.

d. Section 71(1) p is vague as to whom the recommendation is to be made and how it shall be made actionable and whether there is a mechanism in place to monitor whether the recommendation was acted upon by the person to whom it was made. This is especially important in the context where the national government agencies and the county government agencies are the ones providing access to the right to water so the law must be clear to whom those recommendations are made and what is to follow in the context of the human rights framework.

e. Provisions which were in the Water Act 2002 section 47 (1) ‘m’ and ‘r’ have been omitted yet they are necessary and should be included in the Bill as they remain issues which are relevant to the functioning of a water sector as m related to water use efficiency where national standards are needed and r relates to creating necessary liaisons with other agencies which can assist in the regulations of water services.

5. A new term accreditation is introduced by section 73 of the Water Bill 2014. It is not defined in the law yet in normal drafting practice , since this is a function of the services regulator, its meaning should clearly be set out in law to enable proper operationalisation and implementation of the law and to distinguish it from licensing which the regulator is currently doing under the current Water Act 2002 .

6. The Bill also retains the licensing provisions which lie with the county government and the regulatory authority. The difference and hierarchy between accreditation and licensing should be made by the Bill to avoid confusion in the implementation of the law. It is not clear what the effect of accreditation is and if it is withdrawn what should happen. This is because the provisions of section 75 on accreditation and section 84 on licensing by the county do not show the hierarchy of structure or power. For example section 84 (2) makes it an offence to provide water without a license; however it is not an offence to provide water without accreditation. If it is not an offense to provide water without accreditation what is the purpose of accreditation? The Bill will certainly help if it can distinguish properly the scope and power of accreditation and the scope and power of licensing.

7. The other major flaw is how accreditation will be enforced in the counties yet in section 105 of the Bill the county government can relax or dispense with an order for enforcement given by the regulatory authority made under section 104 of the Bill.

8. The Bill does not provide a statutory linkage between WASREB and the county water service providers or indeed with the county government. How does WASREB interface or interlink with the water service providers and the county government? For example section 81 gives the services authority the power reverse the decision of a water services provider- it does not then provide directions on what shall transpire thereafter if the water service provider refuses to implement the decision. The law should be certain as to the effect and process to be followed so that it should cross reference section 81 with the section 100 if that is the intention.

9. Section 100 is on the special regulatory regime only happens on consultation with the county government. For example where enforcement measures are needed in a service provider or other regulatory measures are needed to improve service delivery and the county water service provider ( and county )refuses to move in that direction either because of political exigency or general intransigence, what shall the regulatory authority as the body charged with the advancement of consumer interests do? Move to Dispute Resolution under the Intergovernmental Relations Act or move to the High Court against the county concerned. The law should be clear on these problems that will affect service delivery.

10. Section 73 to 84 of the Bill does not distinguish between county government functions and the regulatory services authority functions. The Bill should clearly differentiate the sections that relate to the county government and those that relate to the regulatory authority and avoid the use of either or which is opaque drafting and opens doors to contentious interpretation between the county government and the service regulator and any mischievous third party in the proper execution of the law.. The interchangeable use of the terms in section 73-84 should be separated into sections exclusively for the national regulator and sections exclusively for the county government.

11. The Tariff process in the Water Bill 2014 is not linked and cross referenced to the tariff making process in the County Government Act section 120. Yet it must be so as to avoid confusion and to show that the powers given in section 120 of the County Government Act are modified and qualified by the process set out in Water Bill 2014 in section 71(1) b. Due to the fact that tariff setting in the water services sector is linked to proper asset development, asset maintenance, proper operation and maintenance of water services , affordability and sustainability and is invariably linked to economic planning in the country as whole ,( note that economic planning is a national function in schedule 4 of the Constitution) a section dedicated to tariff making in the water services sector should be included and should expand on the minimum standards that apply to tariff making in the whole country because of the aspects of subsidy, sustainability and affordability and loan repayment. Under the criteria on Human Right to water and sanitation affordability and accessibility are key criteria in fulfilment of the right and there must be minimum national standards.

12. Section 107 which gives the county government the power to impose the sewerage services levy is not linked to the tariff process and it should because it is a form of tariff that is needed to grow coverage of sanitation in urban centres. It should therefore be subject to the tariff approval process.

13. Section 92 of the proposed Water Bill is also commendable as it expressly provides for rural water service provision. This is important because the human rights standards apply to rural as well as urban citizens. Currently the wording in section 92(3) implies only technical or technology standards to be set by the regulatory authority and this is not the only problem with rural water. The experience gained in the last 10 years of water reforms is that rural water service provision is hampered by poor management practices in the running of the schemes and the fact that the water is for multiple purposes not only for household use . Though government has over the years spend hundreds of millions of shillings in developing rural water projects, the sustainability of most of them is compromised due to poor governance and lack of management skills. Going forward section 92 should then provide that every water project in the rural areas shall be known and licensed and managed according to minimum standards set nationally. It shall also provide that the goal is to make all such schemes to run sustainably and for the benefit of the whole community and thus there shall be standards for appropriate tariff structures and relevant quality of service standards suitable for the rural areas.

14. Section 99 of the Bill is opaquely drafted and should expand on the non compliances that will lead to the measures in section 100 being taken. The drafter shall borrow from other regulated sectors which deal with regulation of corporate entities and also Legal Notice 137 of 2012 rules 67-69 of the Water Act 2002 which should have been lifted to the main statute .The section would then expand with specific material compliances that will lead to the Special Regulatory Regime. This section is different from the General Offences section which deals by offences by third parties against water service installations or interference with services.

15. Section 100 of the Bill is also opaquely drafted and should be redrafted to clearly grant what is the most important tool of regulation of water services. Because water service provision is a natural monopoly, the only effective way to regulate performance is to remove the leadership and management of the people that are not performing in the institution and to have control of the accounts. Cancellation of a license of monopoly is theoretical as water must continue to be provided, the only effective remedy for a monopoly is to terminate the tenure of the executive and senior management teams. This is what should be stated in section 100. The drafter could do well to borrow from other statutes in monopoly sectors which have the provisions of removing the leadership and management teams and appointment of receivers. The provisions given under section 100 are shallow and ineffective.

16. Section 128 of the Water Bill 2014 mentions the term Regulatory Levy, however this levy is not retained nor created in section 71 of the Bill. Regulators in any regulated sector in Kenya and globally are funded from a levy which ranges between 1-3 % of the billing of a sector and is included in the water bill of every consumer. That is the current practice of the Water Act 2002 and it is not clear again why it was omitted for the services regulator yet it was retained for the resources regulator under section 11 of the Water Bill 2014.

17. The penalties and offences while an improvement from what was prevailing in the Water Act 2002 should be specific about offences in the water services sector which amount to acts of economic sabotage. In 2011/12 in Kenya over 44% of produced water in the urban water service providers and 56% of water produced by rural water services providers could not be accounted for because of various activities that lead to the loss of that water. In monetary terms this translates to Kshs 10.6 billion for that year. The Water Bill should thus create offenses in simple language relevant to the water services sector to communicate the problem at various levels and the deterrent measures that should be taken.
a. Puncturing of transmission lines to irrigate agriculture is an act of economic sabotage.
b. Failure to adhere to standards in putting up facilities and infrastructure for the water services sector is an act of economic sabotage.
c. Vandalising any water transmission line, distribution line, water installation, sewerage installation is a serious crime.
d. Falsifying records to show no consumption of water or lower consumption of water is a serious crime
e. Installation of by-pass so that water is not measured is a serious crime
f. Connecting to any line without authority is an offence
g. Diversion of waste water from sewerage lines by puncturing for whatever purpose is a serious crime
h. Interfering with water meters and other measuring devices is an offence
i. Interfering with service lines is an offence
The offences section should ensure the issues as highlighted above are captured as offences for the water services sector

18. The history of provision of water services in Kenya was well document by the National Water Policy of 1999. The principles in that Policy remain relevant today. The Constitution 2010 makes the implementation of the issues that were agreed upon in 1999 easier as they now have a constitutional basis. The provision of adequate water services for all will only be realised in this country if there are proper governance structures, an orderly institutional framework with independent regulation and minimum standards for service delivery that bind all institutions of service delivery.

The Cofek Environment and Water Sector Unit will soon call a stakeholders forum on the Water Bill, 2014

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