Integrity issues at the heart of devolution debate in the Kenyan water sector

Where does the 2016 Kenya Water Act stand?

In aligning the water sector with the devolution requirements of the 2010 Kenyan Constitution, the 2016 Water Act made major changes to the institutional arrangements and mandates in the Kenyan water sector. There is ongoing heated debate on to what extent the resulting institutional framework actually complies with the Constitution, and how suitable it is for improving sector performance. One issue at the centre of this debate is the role of the Water Works Development Agencies, an issue which led to open confrontation between national and county governments at the Devolution Conference in Kirinyaga in early March 2019.

Essentially, this conflict is about who will control the large share of financial resources for infrastructure development which are currently managed by Water Services Boards.

 

Debate about the Water Act 2016

The Water Act 2016 transfers the mandate for developing cross-county water infrastructure from the Water Services Boards to the Water Works Development Agencies, while giving the role of developing county assets for water service provision to (county-owned) water service providers.

In late 2016, the county governments (through the Council of Governors) sued the then Cabinet Secretary for Water and Irrigation to stop implementation of the Act, arguing that it established a centralized framework for water service provision which was unconstitutional. They challenged the role of the Water Works Development Agencies in particular. In April 2017, following an out-of-court settlement, the Cabinet Secretary, through legal notices 59 and 60, deferred sections of the Act on the transfer of functions, assets, liability and staff from Water Services Boards to Water Works Development Agencies (section 152), and of assets to the water service providers (153), and activated the transition clause on the dissolution of institutions from the 2002 Water Act, exempting the Water Services Boards.

The boards therefore continue to exist and manage projects and have signed new loans with development partners in the last two years. The uncertain legal status creates an accountability gap because it is unclear who will be held responsible in the long run – given that it remains unclear how the new loans they have taken on since 2017 will be transferred to the (county-owned) water service providers or the (national government owned) Water Works Development Agencies.

 

The bone of contention:
access to financial resources

The national government wants eight regional Water Works Development Agencies to play a major role in infrastructure development, similar to that of the Water Services Boards. The counties, however, argue that they can coordinate infrastructure development amongst themselves and that the water service providers can handle even cross-county projects. This would imply that only one national Water Works Development Agency would be needed for large-scale national infrastructure projects.

In 2013/14 and 2014/15, the Ministry of Water and Irrigation channelled 40% of its water and sanitation expenditure (about USD 60 million per year) through the Water Services Boards (see National Treasury 2018, forthcoming). In addition, the Water Services Boards have taken on the largest share of loans from development partners to the water and sanitation sector, which in total amounted to more than USD 100 million per year in 2014/15 and 2016/17 (WHO, 2018).

These Boards, however, have repeatedly been mentioned as vehicles for corruption in the Kenyan water sector and were in charge of more than 50% of the water and sanitation services funds investigated for corruption by the Ethics and Anti-Corruption Commission in the last 5 years (WIN 2019, forthcoming).

 

Lack of due process in establishing the
Water Works Development Agencies

The Water Act (section 65) mandates the Cabinet Secretary for Water and Sanitation to “establish one or more Water Works Development Agencies” and to define their area of jurisdiction. Section 67 states that “the Cabinet Secretary shall, in consultation with stakeholders, develop the criteria for establishment of the water works development agencies”.

In February 2019, the Cabinet Secretary of Water and Sanitation, through Gazette no. 16, appointed chairpersons and members of eight Water Works Development Agencies, without prior stakeholder consultation or notice of establishing the Agencies. The Council of Governors is challenging these appointments in court. Kenyan activist Omtatah also went to court, challenging all of the appointments to State corporations made by President Kenyatta (including those to water sector institutions), arguing they were not based on merit. The majority of appointees are former politicians who lost their seats in the last elections. This raises the issue of State corporations as vehicles of patronage, which merits a more detailed discussion than this blog can encompass.

At the Devolution Conference county governments made it clear that they were ready for dialogue but would not cooperate under the current circumstances. During two separate panel discussions, when confronted with the question about what was presented as “illegal appointments without stakeholder consultations” neither Permanent Secretary Joseph Irungu nor Chief Administrative Secretary Winnie Guchu openly defended the decision. Instead they called on counties to collaborate, saying “let us sit down together and discuss”.

 

Now what?

The Devolution Conference was an important step in opening up the discussion on several issues that are impacting negatively on strong sector governance. Unless these issues are addressed, sector coordination will be ineffective and it will be difficult for stakeholders to report performance and hold each other to account through joint review.

What the Devolution Conference did not address, however, was how the new institutional arrangements, in whatever shape they are finally accepted, are going to reduce corruption and patronage in the water and sanitation sector in Kenya, and what it will take to ensure that funding, from whatever source, is used effectively in the delivery of water and sanitation to the more than 19 million Kenyans still deprived of this basic human right.

The national water sector dialogue foreseen in the final Communique of the Devolution Conference, as well as the operationalization of the Inter-Governmental Water Sector Coordination Framework signed by the Ministry of Water and Sanitation and the Council of Governors in March 2018, will be crucial to resolve some these issues. It is hoped that these future dialogue forums will also make space for civil society to actively participate in the discussions and that issues of transparency, accountability and anti-corruption will be placed firmly on the agenda.

 

Several other issues discussed at the Devolution Conference have an integrity dimension, in particular in relation to asset and loan transfers, as well as corporate governance of water service providers. We’ll come back to these in future blogs. In the meantime, contact us for more information or comment below.

 

References

National Treasury. 2018. ‘County Public Expenditure Review for the Health and WASH Sectors in Kenya’.

World Health Organization. 2018. ‘UN-Water GLAAS TrackFin Initiative Tracking financing to WASH in Kenya Final Report’