Task Force on Alignment to the New Constitution,Ministry of Water and IrrigationMaji House, Ngong RoadP. O. Box 49720-00100Nairobi, Kenya

Future Outlook of the water SectorAligning the Water Sector Policy, Legal and Institutional

Framework to the 2010 Constitution: Presented at the WASPA Conference

8th September 2011

Republic of KenyaMinistry of Water and

Irrigation

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BackgroundThe current Outlook

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The Water Act 2002 separates WRM from WSS, provides for regulation of WSS and further makes a distinction between asset holding and development (responsibilityof a WSB) from operations and management (responsibility of a WSP)

INSTITUTIONAL SET -UP UNDER WATER ACT 2002*

Source: Water Act 2002

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Water and Sewerage ServiceWater Resources Management

Water ServicesTrust Fund

WSTF

Water AppealBoardWAB

WaterServices

RegulatoryBoardWSRB

WaterResources

Management AuthorityWRMA

Water ServicesBoardsWSBs

Catchment Areas Advisory Committees

CAACs

Water Services Providers

WSPs

Consumers, Users

Water Resources User Associations

WRUAs

Regional WRMA Office

NWCPCDevelops water

resources facilities

The Water Act 2002 separates WRM from WSS, provides for regulation of WSS and further makes a distinction between asset holding and development (responsibilityof a WSB) from operations and management (responsibility of a WSP)

INSTITUTIONAL SET -UP UNDER WATER ACT 2002*

Source: Water Act 2002

MWIPo

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lati

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Pro

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Water and Sewerage ServiceWater Resources Management

Water ServicesTrust Fund

WSTF

Water AppealBoardWAB

WaterServices

RegulatoryBoardWSRB

WaterResources

Management AuthorityWRMA

Water ServicesBoardsWSBs

Catchment Areas Advisory Committees

CAACs

Water Services Providers

WSPs

Consumers, Users

Water Resources User Associations

WRUAs

Regional WRMA Office

NWCPCDevelops water

resources facilities

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Objective and Tasks

Objective: To make proposals on the changes necessary to align the policy,

legal and institutional framework of the water sector to the 2010 Constitution

Tasks:

1.Review gains/successes of the reform so far

2.Note existing and emerging challenges

3.Examine the provisions of the 2010 Constitution on water and

sanitation

4.Propose appropriate policy, legal and institutional changes

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Methodology

The Task Force has adopted the following methodology:

1. Carry out a desk study to identify achievements of the reform since the

Water Act 2002 and the outstanding and/or emerging challenges

2. Examine the relevant provisions of the 2010 Constitution

3. Conduct studies on a selected topics considered key: right to water;

provision of water in rural areas; institutional arrangements; and

financing mechanisms

4. Formulate proposals which were subjected to stakeholder consultations

5. Carry out revisions to the Water Act, 2002 and related water sector

legislation.

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Reform achievementsi. In line with the Water Act 2002, water resources management

separated from water services provision. ii. Provision of water services has been ring fenced and is

undertaken through autonomous and commercial entities. iii. Functions have been decentralized and devolved to regions and

catchment areas iv. Independent water sector regulators have been established. v. Stakeholder participation has been enhanced through WRUAS.vi. A dedicated pro-poor financing mechanism has been established vii. Arising from these reforms the sector has been able to attract

more resources.

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Challengesi. Transfer of functions to newly established institutions yet to be

completed. ii. Viability of many water service providers remains questionable.iii. Perception of an overload of institutions which appear to

duplicate each other’s mandates (e.g. WSBs and WSPs; WRMA and NEMA over catchment management etc)

iv. Lack of clarity in the policy institutional arrangements for and inter-relations with sector arrangements for water storage, irrigation and land rehabilitation.

v. Lack of an overall financing mechanism for the water sector and for water resources management specifically.

vi. Poor governance practices generally in WSPs.vii. Limited appreciation of the role of independent regulation in the

sector.

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The 2010 Constitution: Key provisions

1. Devolved government: Constitution creates two levels of government - a national government and county governments - and assigns them functions (Sch. 4)

2. Cooperation: Article 189(2) states that Governments at each level, and different governments at the county level, shall co-operate in the performance of functions and exercise of powers and, for that purpose, may set up joint committees and joint authorities.

4. Water resources: Water is defined as part of land. In Art. 260 “Land” is defined to include “any body of water.” In Art 62 “Public land” is defined to include all rivers, lakes and other water bodies

5. Water resources management: Art. 67 establishes the National Land Commission established to manage, inter alia public land.

6. Regulation of land (defined to including water resources) is dealt with in Article 66(1): “the State may regulate the use of any land, or any interest in or right over any land ….”

7. The use of water resources is also made a national function (Sch. 4)

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The 2010 Constitution: Key provisions

7. Water services: Access to water is made a right:  Under Art. 43(1) Every person has the right …(b) to accessible and adequate housing, and to reasonable standards of sanitation; & (d) to clean and safe water in adequate quantities..”

8. Regulation of water services: This is not explicitly provided for but can be seen as a necessary part of consumer protection, a national government function (Sch. 4)

9. Revenue allocation: National Government 85%, counties -15% (minimum) (Art. 203). An Equalization Fund equivalent to 0.5% of national revenue is also established to provide basic services including water (Art. 204).

10. Infrastructure development – a shared function: National government may undertake “public investment” and “hydraulic engineering” while counties may undertake ‘county public works.” (Sch. 4)

11. Dedicated funds: National government may by law set up dedicated funds outside of the Consolidated fund – e.g. a water sector fund(s) (Art. 206)

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Proposed institutional

changes Level Current status WA

2002Proposed New Mandates Potential Benefits and Risks Ref. NC

Policy MWI in charge of policy formulation, resource mobilization and sector coordination

• Policy formulation, resource mobilization and sector coordination either as standalone ministry or department in case of merger with other ministry

• Establish County Water Advisory Office (CWAO) to advice on policy and coordination of water affairs at county level

BENEFITS: Lead agency on water affairs retained promotes uniformity (policy, M&E, annual reporting etc). CWAO limited to advisory role in line with the Constitution

RISKS: Dominance of lead agency

Cabinet, Art. 152Support for county govts, Art. 190; The 6th Schedule, Article 262, section 15The 4th Schedule Part 1, 32

Water Resour-ces

Core functions: water allocation; planning and enhancement of water availability; regulation and protection of water resources; and information on water resources

•Separate regulation from water resources management but continue catchment based approach to regulation and management of water resources.

•Transform national WRMA into a Water Resources Regulator (WRR) but retain catchment based approach to regulation.•Assign water resources management (e.g. catchment management) to National Land Commission and counties.

BENEFITS: Separates regulation (WRR) from implementation (management); Enhanced role for CAAC through input by County Govts and other stakeholders; Staff issues addressed;

NLC neglects water resources mandate & counties lack capacity

Art. 186 (functions and powers of NG & CGs); Art. 189 cooperation NG & CGs); Art. 191 (Conflict of laws); The 4th Schedule Part 1 – 2, 22, 24

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Level Current status WA 2002

Proposed New Mandates Potential Benefits and Risks

Ref. NC

Water Storage & Irrigation

WA2002 gives it responsibility to NWCPC for state schemes and it is currently involved in developing multi-purpose dams, dykes, ground water recharge, boreholes and bulk water supply facilities

i.Establish a National Water Storage Authority (NWSA) with mandate to for water storage through large and medium multi purpose dams

ii.Subject NWSA to regulation by Water Resources Regulator (WRR)

iii.Establish irrigation agency to take over mandate of facilitating irrigation and land reclamation

BENEFITS: Clearly spelt out mandate avoiding duplication; Avoids staff lay-offs; Regulation by WRR on dam design, safety standards

RISKS: Proposed NWSA takes over staff from NWCPC which may suffer from legacy issues.

Implementation of rights and fundamental freedoms, Art. 21, sub section 2The 4th Schedule Part 1 – 22, 24 etc

Water services

Currently provided by Water services boards (WSBs) - regional bodies responsible for planning, investments, services provision;

Water services provided by local authority WSPs agents of WSBs

1.Transfer water services functions to county owned WSPs.

2. Infrastructure development: (a) where undertaken by by counties then assets owned by county WSPs (b) where undertaken by more than one county, as in cross county pipelines, assets vest in a joint authority set up by the counties concerned;

(c) where undertaken by the national government, as a public investment, assets vested in a regional state corporation established by national government.

BENEFITS: 1. Flexible arrangement caters for different circumstances. 2. WSB staff moves to successor bodies; 3. Ring fenced & clustered WSPS ensures commercial viability RISKS: Destabilizing effect on recently established institutions; Lack of clarity on where to place reserve capacity for intervention

Articles 20 and 21,The 4th Schedule Part 1 – 33

Proposed institutional changes

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Level Current status WA 2002

Proposed New Mandates Potential Benefits and Risks Ref. NC

Water and sanitation in rural & other unviable areas

Low coverage and non sustainability of services

Provision by non-commercialised entities (community run) with limited capacity

i. Place mandate of rural (unviable) WSPs water at County Government level with support from Ministry through the County Water Advisory Office (CWAO)

ii. Establish County Water and Sanitation Forum (CWSF) as a think tank for negotiation and dialogue on matters of rural (unviable) water and sanitation services

BENEFITS: Flexible approach allows adoption of diverse local solutions;

Enhance role of County Govts and stakeholders to plan for investments; Professional backstopping introduced;

RISKS: Neglect by county govts more concerned about visible projects

The 4th schedule Part 2, 11Articles 21, 27, 43 etc

Regulat-ion

WASREB develops and enforces rules designed to regulate the provision of water and sewerage services while WRMA regulates resources

• Retain water services regulation at national level including monitoring assets development, equitable investments across counties and governance standards for WSPs.

• Query whether regulation of services should be combined with regulation of resources.

BENEFITS: Enhanced regulation (licence/contract,) performance monitoring and audits including public reporting ensures delivery

RISK: Limited acceptance about autonomous regulation limits effectiveness

Article 191;Article 21(2)

Proposed institutional changes

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Level Current status WA 2002

Proposed New Mandates Potential Benefits and Risks

Ref. NC

9. Financing Mechanism

MWI finances major investments while the WSTF provides the pro poor funding

1. All proposed institutions to be self sustaining on recurrent expenses.2. On capital investments :i. National government to finance major investments (e.g. cross county pipelines) as national investments;ii. National government to on-lend to county WSPs for capital investments subject to on-lending agreements iii. Counties to invest and lease to WSPs iv. Continue pro poor financing through a fund such as WSTF linked to the Equalization Fund

BENEFITS: 1. Flexible financing

arrangements able to mobilise resources from several sources.

2. Viable entities required to back through on-lending arrangements RISKS:

• No clear window for financing water resources

• Funding through Exchequer might not be attractive to development partners.

Article 20, Article 201, 202, 203, 204 etc The 4th Schedule Part 1, 33

Proposed changes

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Future OutlookN

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Local le

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WABDispute Resolution

WASREB

WSPCs

Consumers, Users

Water Resources User Associations

WRUAs

6 CAACs

WRR

NWSA

WSPs (Urban)

Planning & development

Regulation

Policy, sector coordination & Financing

Service Provision; Investment Planning

Consumers;Users

WSTFFinancing

NIBIrrigation services

KEWITraining & Research

WRR = Water Resources Regulator; sub sector regulator to licence and regulate NWSANWSA = proposed National Water Storage Authority responsible for planning, supervision of construction, O&M of dams, flood control and ground water recharge infrastructure CAACs = CAACS responsible to advisory input in a catchment basin; WSDB = proposed Water Services Development Board to be the asset holder for cross county schemes COWSOs = Community owned water supply organizationsWSPS: asset owners and service providers at county level

MWI

= Regulation/Licence

CAACs

COWSOs (Rural)

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Sept ’10 – Jan ‘11

Work plan

CONSULTATIONS

Internal Stakeholders

WSIs, WSPs etc

May – July ‘11 July – October 2011CONSULTATION

SExternal

stakeholdersInstitutions; Public;

Development Partners etc

LEGAL DRAFTING, QUALITY

ASSURANCE

BILLTASK FORCE MEETINGS &

STUDIES1.Concept paper2.Right to WSS3.Rural WSS4.Institutional framework5.Financing Mechanism6.Quality Assurance (ongoing)7.Amendment proposals

NATIONAL CONSULTATIV

E FORUM

INITIAL IDEAS ON PROPOSED

AMENDMENTS

REPORT OF PROPOSALS TO ALIGN THE WA ’02 TO CoK 2010

BILL, 1st DRAFT

Harmonization with other laws. Input of Kenya

Law Reform, AG’s Office, CIC, other

sectors

BILL SUBMITTED TO CIC

Input from stakeholders:

DPs, Civil Society, etc

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The End

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Back-up: Extract from Interim Report on Devolved Government by the Task Force on Devolved Government (TFDG), April 2011

Page 55: Effective local economic development requires planning and management of a number of development activities across sectors and counties. The importance of this factor came out during public hearing with many Counties beginning to close up on their resources, or contending that fees have to be charged for use of resources originating from their Counties. One example of such a resource is water serving major cities with sources outside respective cities, and by extension Counties.

Page 56: Effective cross county planning and service delivery requires cooperation and consultation mechanism as provided for in Article 6(2) of the Constitution. This requires a national legislation and policy that will ensure that effective participation and management of cross cutting resources such as water, roads and electricity are planned in an integrated manner. Section 189 (2) provides the legal framework for the cooperation across Counties noting that `different governments at the County level, shall co-operate in the performance of functions and exercise of powers and, for that purpose, may set up joint committees and authorities’. Legal basis for cross county planning services are implied in a number of Constitutional provisions. Article 66 (1) & (2), 69 (a) & (b) etc

Page 57 & 58: Water is a good example of a service which is often provided under the cross county concept. Currently, the Water Act provides a framework for the management and provision of the water services. Under the Act the Water Boards manage the water services through policies and regulation, while actual delivery to consumers is done by the water companies owned by LAs as provided by the law. The same framework can be used where two counties or more come together to provide a service through a common board or company. In such cases a cross county company can provide a common service. Alternatively, a national legislation can provide a framework for a board to provide policy framework and regulation. The membership of such boards should include representative of the counties and national government. Apart from water other cross county sector and services include: transport, tourism, electricity, markets, housing, and energy. As highlighted in the case of water, planning for transport, housing, and energy is better done by specialized boards for and on behalf of the affected counties. This situation becomes more necessary when specific service is being consumed across counties or cities.

Section 189 (1) notes that cross county cooperation ensures and enhances articulation and implementation of national government policy. The second provision (2) provides for cooperation for effective service delivery. The provision states that governments at county level are supposed to cooperate and create joint authorities and committees with the aim of performance of certain functions. The joint performance of functions has cost benefit effects, including economies of scale. Section 189 (1) notes that cross county cooperation ensures and enhances articulation and implementation of national government policy. The second provision (2) provides for cooperation for effective service delivery. The provision states that governments at county level are supposed to cooperate and create joint authorities and committees with the aim of performance of certain functions. The joint performance of functions has cost benefit effects, including economies of scale. One of the principle considerations for intergovernmental relations is economies of scale that accrue when providing trunk/bulk infrastructural services. This affects provision of water, roads, bridges, power among others. This implies that the production, provision and transmission of some services would transcend county boundaries and have to be negotiated appropriately with the objective of enhancing capacity and providing services efficiently and cost effectively. Citizens across counties require services as a basic right as contained in the Bill of Rights. However, some of such services may not be available within their counties. To provide such services, it is necessary that resource mobilization is done collectively in order to efficiently produce and deliver the services.In line with the discussion in this section, there is need for policy direction on how services which cut across Counties will be provided and managed. While this option could be left to the discretion of the County governments, it will be useful for national government to provide guiding principles to assist counties in making decisions. This should also include providing an appropriate framework for preparation of and implementation of integrated national, regional and local area land use plans that meets needs of stakeholders across counties. Further, there is need for facilitation of appropriate institutional and technical capacity building initiatives for accelerating plan implementation at all levels.