EURO PEA N REPO RT ON DEVELOPMENT - European … · synopsis this paper discusses ... EURO PEA N REPO RT ... KFC Kenya Flower Council KSh Kenya Shillings LANAWRUA Lake …

MOBILISING EUROPEAN RESEARCHFOR DEVELOPMENT POLICIES

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Managing the Water–energy–Land (WeL) nexus for incLusive and sustainabLe groWth. a case study of fLoWer production around Lake naivasha.dr Wilfred nyangena, University of Nairobi and dr dirk Willem te velde, Overseas Development Institute

MaNagINg the Water–eNergy–LaND (WeL) NexUs fOr INcLUsIve aND sUstaINabLe grOWth. a case stUDy Of fLOWer prODUctION arOUND Lake NaIvasha.

synopsis

this paper discusses how an integrated approach towards managing the water–energy–land (WeL) nexus in Lake Naivasha in kenya can help to ensure the continued contribution of flower farms to inclusive and sustainable growth.

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This paper served as a background paper to the European Report on Development

2011/2012: Confronting scarcity: Managing water, energy and land for inclusive and

sustainable growth. The European Report on Development was prepared by the

Overseas Development Institute (ODI) in partnership with the Deutsches Institut für

Entwicklungspolitik (DIE) and the European Centre for Development Policy Management

(ECDPM).

Disclaimer: The views expressed in this paper are those of the authors, and should not

be taken to be the views of the European Report on Development, of the European

Commission, of the European Union Member States or of the commissioning institutes.

Managing the Water–Energy–Land (WEL) nexus for inclusive and sustainable growth – A case study of flower production around Lake Naivasha

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Acknowledgements

This is a background paper for European Report on Development 2011/2012 Confronting

scarcity: managing water, energy and land for inclusive and sustainable growth (ERD). This

Report is funded by the EU and seven member states. We are grateful to comments from

participants at the DSA/EADI Conference held in York in September 2011 and for suggestions

from the ERD team.


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Contents

Acknowledgements 4 Contents 5 Tables & figures 6 Abbreviations 7 Executive Summary 8

1 Introduction 9

2 The quality of ecosystem services as a major factor for flower farms 10

3 The importance of flower farms for inclusive and sustainable growth 13

4 The Water–Energy–Land nexus in the Naivasha basin 17

5 Managing the WEL nexus: the role of different actors 19

5.1 Flower farms and their associations 19 5.2 Other institutions 22 5.3 Government 23 5.4 International actors 24

6 Conclusions 26

References 27

Appendix I: Payments for Ecosystem Services in the Naivasha Basin 29

Appendix II: Further suggestions 31


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Tables & figures

Tables

Table 3.1 Naivasha’s domestic economy compared with the Kenyan economy (KSh millions) 14

Figures

Figure 2.1 The Naivasha basin 10 Figure 2.2 Forest cover in the Lake Naivasha Basin 1973–2008 11 Figure 3.1 Value of EU imports of roses (€) 14


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Abbreviations

AWS Alliance for Water Stewardship

CSR Corporate social responsibility

DSA/EADI Development Studies Association/European Association of Development

Research and Training Institutes

EAC East African Community

EPA Economic Partnership Agreement

EPWS Equitable Payment for Watershed Services

EPZ Export-processing zones

ERD European Report on Development

ETI Ethical Trading Initiative

EU European Union

FLP Flower Labor Programme

FOMAWA Friends of Mau Water Catchment

FPEAK Fresh Produce Exports Association

GAP Global Good Agriculture Practices

GDP Gross domestic product

GPS Global Positioning System

GSP Generalized System of Preferences

GWh Gigawatt-hours

GWh Gigawatt-hours

HEBI Horticultural Ethical Business Initiatives

ICIPE International Centre for Insects and Physiology and Ecology

ILO International Labour Organization

KFC Kenya Flower Council

KSh Kenya Shillings

LANAWRUA Lake Naivasha Water Resources User Association

LNGG Lake Naivasha Growers Group

LNRA Lake Naivasha Riparian Association

MFN Most-favoured-nation

MW Megawatts

MW Megawatts

NGO Non-governmental organisations

PES Payment for ecosystem services

SGS Société Générale de Surveillance

SWM Solid waste management

UNDP United Nations Development Programme

WEL Water, energy and land

WRMA Water Resources Management Authority

WRMA Water Resources Management Authority

WRUA Water Resources User Association

WWF World Wide Fund


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Executive Summary

The future of one of the most successful and rapidly emerging industries in Africa is dependent

on the management of a relatively small river basin. Kenya’s cut-flower industry, clustered

mainly around Lake Naivasha, has been praised as an economic success for its contribution to

gross domestic product (GDP), foreign exchange earnings and employment. On the other

hand, the treatment of Lake Naivasha as a free ‘common pool’ resource threatens its

sustainability and the activities dependent on it. There is therefore an urgent need for

sustainable management of the water resources of the Lake Naivasha basin.

The situation is complicated by the fact that there are different users of the lake in different

locations and in different sectors. Land-use changes upstream (deforestation and greater need

for fuelwood) affects the availability of water downstream; the production of geothermal

energy downstream requires water and affects land use; flower farms downstream withdraw

water and require energy services; tourism depends on the reliable quality of water resources.

This is an example of how water, energy and land (WEL) resources are interrelated such that

use of one resource affects the other: we call this the WEL nexus.

Various initiatives on the part of flower farms, local government and institutions, international

actors, and small-scale agricultural users aim to manage the WEL nexus in the Naivasha basin.

Flower farms have reduced their environmental footprint, improved water efficiency and

introduced renewable energy projects. The Kenya Flower Council (KFC) has designed codes of

conduct. Various institutions have begun to implement new initiatives, and politicians – even

the prime minister – are committed to ‘restoring’ Lake Naivasha. Integrated WEL-nexus

thinking about the importance of the cut-flower industry is leading to innovative solutions to

manage natural resources. One such solution is payment for ecosystem services (PES)

whereby downstream users pay upstream users for sustainable land-use practices.


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1 Introduction

This paper discusses how an integrated approach towards managing the water–energy–land

(WEL) nexus in Lake Naivasha in Kenya can help to ensure the continued contribution of flower

farms to inclusive and sustainable growth. The Naivasha basin supports a number of economic

activities ranging from agriculture, to tourism, geothermal energy production and the cut-

flower industry. The availability of good quality water, a good climate and good transport links

has attracted flower companies to the region. Flower production has transformed the Naivasha

region since the 1960s. It currently contributes 10% to Kenyan foreign exchange revenues

(supplying 20% of all roses sold in the EU), 2% of GDP and generates work for 2 million

people (workers and dependants). Employed in a large number of formal and indirect jobs,

these workers earn more than most of Kenya’s labourers. Yet at the same time, there are

considerable environmental pressures due to the behaviour and land-use changes of upstream

users and the very success of the sector.

The future of one of the most successful and rapidly emerging industries in Africa is therefore

dependent on the management of a relatively small river basin. The situation is complex

because there are different users from different locations in different sectors. Land-use

changes upstream (deforestation and the use of wood to provide energy) affect the availability

of water downstream, the production of geothermal energy downstream requires water and

affects land use, flower farms downstream withdraw water and require energy services, and

tourism depends on quality water resources. This is a perfect example of how water–energy–

land resources are increasingly interrelated whereby the use of one resource affects the other:

we call this the WEL nexus. Several public and private actors have underscored the need for a

nexus perspective in analysing complex natural resource problems, e.g. focusing on the food–

water–energy nexus (e.g. Allan, 2011; Shell, 2011). This paper examines whether an

integrated nexus perspective can help to identify innovative solutions so that the flower

industry can continue to contribute to inclusive and sustainable growth.

The paper is structured as follows. Section 2 discusses how the quality of ecosystem services

has become one of the major factors for flower farms to locate in Naivasha area. Section 3

reviews the importance of flower farms for inclusive and sustainable growth. Section 4

discusses the difficulty of the complex links of the various users of the WEL-nexus resources.

Section 5 analyses business initiatives to manage natural resources and Section 6 examines

what initiatives are being considered to manage risks and realise the opportunities. Section 7

draws out the conclusions.


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2 The quality of ecosystem services as a major factor for flower farms

Lake Naivasha clearly illustrates the importance of the quality of ecosystem services as an

important factor for flower farms. The basin is one of Kenya’s most fertile agricultural regions.

As a result, economic activity, especially floriculture, is increasing. The flower industry provides

economic benefits but also makes greater demands on ecosystem services: the industry and

the settlements of workers depend on lake water for geothermal energy, household water,

irrigation, discharge management and fishing. The Lake Naivasha basin is considered a very

attractive area as it supports various additional economic activities. Its unique ecological basin

and biodiversity have attracted various sectors of the economy such as tourism and

agriculture, including high-value commercial vegetable farming, as well as renewable sources

of energy.

Floriculture is one of the fastest growing economic sectors in sub-Saharan Africa. Kenya’s

flower industry is centred in the Lake Naivasha basin and occupies about 2,000 ha, of which

1,200 ha are under greenhouses. The Naivasha basin and upper catchment area is shown in

Figure 2.1 below.

Figure 2.1 The Naivasha basin

Source: WWF (2011)

Lake Naivasha provides freshwater to the Rift Valley region. This, among other factors, is what

has attracted so many flower farmers since the industry requires a high and reliable water

supply for irrigation purposes. In addition to the lake there are also underground aquifers,

which the farms drill for irrigation, and large tracts of land with favourable and fertile soils for

flower production that require little fertilisation. This combination of factors has attracted many

floriculture investors into the region.

The upper catchment, which consisted of indigenous forest and open woodland, has undergone

significant changes over the past 50 years as the forest has been converted into rain-fed


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smallholdings. This has had a direct impact on water resources. The northern and eastern

catchments have placed considerable pressure on the lake’s natural resource base. Given the

small size of the plots, farmers cannot exercise crop rotation and diversification, with the

resulting loss of land productivity (Githaiga, 2008). This is exacerbated by a growing

population, which leads to further land sub-division and deforestation (Kut and Agevi, 2007).

This deforestation has had a marked effect on the hydrology of the basin as flows have

become more extreme with intense flooding in the wet season and low volumes in the dry

season. This rapid runoff has led to siltation, while concerns about water quality have been

compounded by the failure to observe soil- and water-conservation practices due to poverty

and overgrazing in the upper catchment. The use of fertilisers to improve yields and the

farming and overgrazing of riparian areas has increased siltation and nutrient loads. The

situation is aggravated by the increase in subsistence farming even on steep slopes right down

the river edge (Everard et al., 2002). It is estimated that the Malewa and Gilgil rivers currently

discharge approximately 7 million tons of sediment into Lake Naivasha each year. This reduces

the depth of the lake and ecosystem functioning (Otianga et al., 2006).

Figure 2.2 Forest cover in the Lake Naivasha Basin 1973–2008

Source: WWF (2011)

The Naivasha basin includes a cluster of other key actors related to the flower industry (see

Bolo, 2007). These include research institutions, breeding farms, quality control and regulatory

agencies, input suppliers, credit and finance institutions, trade promotion agencies and other

intermediary organisations. These assist growers to produce quality flowers and ensure that

the flowers are sold and marketed effectively while promoting inclusive and sustainable

growth.

The quality and quantity of the water have deteriorated significantly and other water users

such as the Maasai pastoralists have been displaced, and now have only limited access to the

lake. According to Becht and Harper (2002) and Becht et al. (2005) the recorded levels of the

lake have fluctuated significantly. The reduction in quantity has been mainly caused by

evaporation and unsustainable human activities in the basin. The deterioration of water quality

as a result of the inflow of nutrients may be attributed to commercial farms and farm activities

in the upper catchment. KItaka et al. (2002) and Gitachi (2005) show that a large nutrient

load originates from the upper catchment through surface runoff. The upper catchments, which

were originally covered by indigenous forest and open woodland, have undergone significant

changes in land use as the forest has been converted into rain-fed smallholdings. This has a

direct impact on water resources. Climate change as well as the deterioration of ecological

quality and quantity could seriously challenge the future of the flower industry. The lake is

polluted with agro-chemicals and is also heavily drained.


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The lake faces a range of water-quality issues stemming from increasing nutrient loads such as

nitrogen and phosphorous, increasing siltation, and growth in the level of pathogens and

viruses from the inadequate treatment of sewage (either from the municipal sewage facility,

surface runoff or through seepage from pit latrines). There is also increasing evidence of heavy

metal (iron, cadmium and lead) and pesticide contamination (Otianga-Owiti and Oswe, 2008).

The destruction of papyrus surrounding the lake due to the expansion of agricultural and

human settlements has removed an important natural filter that helped to reduce siltation.

This situation is compounded by falling lake levels, which open up the riparian zones for

grazing by cattle and wildlife. The decline in papyrus leads to increasing through-flows from

the catchment to the lake, which brings in more sediments, nutrients and other organic

material (Lake Naivasha Water Resource Management Programme, 2007). It is estimated that

the Malewa and Gilgil rivers discharge approximately 7 million tons of sediment into Lake

Naivasha, of which an estimated 20% is organic matter. Sedimentation reduces lake depth,

destroys aquatic habitats such as fish-breeding grounds and diminishes the flood control

capacity of the lake.

This deterioration of the lake water quality, quantity and ecosystem services leads to

secondary risks such as reputational loss, withdrawal of existing investments and loss of

potential investment in the future. The potential consequences include job losses, loss of

foreign exchange earnings and withdrawal of crucial investors. It is paramount, therefore, that

the government, business and civil-society stakeholders make an appropriate and constructive

response to the threats to inclusive and sustainable growth. Flowers are an important export

for Kenya. Losing the cut-flower business would mean that many workers and their

dependants lose everything. In addition, the treatment of Lake Naivasha as a free ‘common

pool’ resource will be at the cost of its sustainability and the corporate image of the

commercial farms. It is therefore essential to manage the water resources of the Lake

Naivasha Basin in a sustainable way (Mekonnen and Hoekstra, 2010).


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3 The importance of flower farms for inclusive and sustainable growth

In this section, we examine the economic, social and environmental effects of flower

production around Lake Naivasha.

Economic effects

Horticulture has transformed the Naivasha basin. Cut flowers are an important export for

Kenya. The cut-flower industry generates approximately 11% of Kenya’s total foreign

exchange revenue, totalling about 27.8 billion Kenya Shillings (KSh) (Economic Survey, 2009;

WWF Report, 2011). Naivasha’s local GDP is estimated to be in the order of KSh 40 billion

(US$570 million) and its contribution to the Kenyan economy can be estimated to be at least

KSh 59 billion (US$830 million). Lake Naivasha accounts for more than 70% of the country’s

cut-flower exports and 20% of vegetable exports.

Naivasha’s flower industry began in earnest in the 1980s and grew rapidly in the 1990s. Now

there are dozens of large farms, and Kenya has become Europe’s chief supplier of fresh cut

flowers. One in three roses sold on Valentine’s Day comes from Kenya, most of them grown on

the shores of Naivasha. The Kenya Flower Council (KFC) estimates that Kenya is the largest

supplier of cut flowers to EU markets, accounting for about 25% of the EU flower imports

ahead of Colombia (17%) and Israel (16%).1 Annually, Kenya exports over 60,000 tons of

flowers to EU markets: over 65% to the Netherlands while the rest is exported to other

European countries such as France, Germany, Switzerland and the UK. The flowers include

roses, which account for over 70% of the exports, statice, carnations, hypericum, alstroemeria

and eryngium among others.

According to the KFC, the Naivasha basin generated approximately US$400 million of Kenya’s

total foreign exchange revenues in 2008. Some 45% of the revenue generated by floriculture

is spent on production costs, suggesting that the sector’s contribution to the local communities

living in the Lake Naivasha basin is approximately US$180 million. The income improves the

economy of the area, which has contributed to its growth and development.

The agricultural sector directly accounts for about 40% of Naivasha’s local economy, and most

trades and services are directly or indirectly linked to the sector, e.g. providing goods and

services or supporting farm workers. The contribution of agriculture to Naivasha’s local

economy is likely to be about 75%.

1 Kenya Flower Council Website accessed on 25-8-2011


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Table 3.1 Naivasha’s domestic economy compared with the Kenyan economy (KSh millions)

Naivasha Kenya

Local GDP*

Contributions to Kenya’s

GDP

Contributions to export earnings

GDP** Export

Flowers 12,000 27,800 27,800 39,766 39,766

Vegetables 2,750 6,650 3,200 62,000 16,128

Tourism and Accommodation 600 600 <200 23,755

Construction and manufacturing 2,000 2,000 303,488

Energy 2,800 2,800 30,805

Trade and Services 10,000 10,000 421,012

Government 4,000 4,000 288,817

Others (Health, Transport, Education etc.)

5,250 5,250 612,364 266,706

Total 40,000 59,100 31,000 1,852,263 322,600

Per capita Income 62,500 54,895

Sources: Economic Survey, 2009: WWF, 2011

A threat to the economic sustainability of the cut-flower industry is linked to prospects in the

European markets, since these markets account for over 95% of Kenya’s flower exports. A

survey conducted by the Promotion of Imports from Developing Countries (CBI, 2005) found

that most European markets including France, Germany, Italy and the Netherlands, were

showing clear signs of market saturation, although demand for cut flowers was still increasing

in the UK. Exports from countries such as Ethiopia and Peru are causing stiff competition, even

if Kenya still supplies around half of EU imports of roses. Figure 3.1 suggests that Kenya was

affected more by the crisis than its competitors.

Figure 3.1 Value of EU imports of roses (€)

Source: Eurostat COMEXT database

Another blow to the cut-flower industry is the replacement of the Lomé IV trade preferences

with the Cotonou Economic Partnership Agreement (EPA). The Lomé IV trade preferences gave

Kenya preferential market access to the EU to help develop the industry. The EPA, which is still

being negotiated in Kenya, could bring to an end such treatment and expose Kenya to fierce

competition from new flower producers in Ethiopia, Uganda and Tanzania. The over-reliance on

the European market represents a serious threat to the economic sustainability of Kenya’s cut-

flower industry since the fact that the produce does not currently face tariffs in the EU market

is no guarantee for the future. Kenya has not yet signed an interim EPA, but together with

0

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

All EU imports

EU imports from Kenya


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other East African Community (EAC) states it initialled the interim EPA at the end of 2007,

under EU pressure to avoid disruption to exports. Since then the EAC has not signed an EPA. If

the EPA is signed, Kenya will not face any tariffs on roses while it remains in the EPA.

However, if the talks break down, or if the EU decides to force the pace by threatening to

withdraw the autonomous preferences, then Kenya would have to export on Generalized

System of Preferences (GSP) terms (a tariff of 8.5%) or the Most-favoured-nation (MFN) rate

(12.5%) if it graduated out of the GSP.

Social effects

The cut-flower industry has positive and negative social effects. Recent World Wide Fund

(WWF) estimates (2011), based on the Economic Survey (2009), place the GDP per capita at

KSh 62,500 compared to the national average of KSh 54,895. Table 3.1 illustrates the sectoral

contributions to GDP in Naivasha and locally. Floriculture employs between 50,000 and 60,000

people directly, and a further 500,000 indirectly through affiliated services, e.g. farm inputs,

transport, packaging, banking. If each worker has four dependants, then a total of some 2

million people – about 7% of the entire population – depend on the industry. Naivasha is also

attractive from the perspective of job creation. The ratio of formal employment to population is

about 8.3% compared to the national average of 5.1%, and this does not include the self-

employed on smallholdings (Mekonnen and Hoekstra, 2010; WWF, 2011).

The cut-flower industry has helped to reduce poverty in Kenya. Local communities in the Lake

Naivasha basin were living in poverty despite being surrounded by natural resources. The

flower farms have provided job opportunities, which translate into better living standards.

Some of the largest farms employ more than 10,000 workers each, many of them women.

Households that are involved in export horticulture can now afford education and enjoy good

health and balanced meals, among other essentials. The Kenya Poverty Mapping (CBS, 2003),

based on Population and Housing Census data, suggests that people living near to the flower

farms around Lake Naivasha tend to be relatively well off, since the incidence of poverty there is between 30% and 40% compared to a national level that is well above 50% (IMF, 2005).

There have been some reports of labour problems in the cut-flower industry. The sector relies

heavily on temporary workers, which affects income and job insecurity. Smith et al. (2004)

found that 65% of the workforce in the Kenyan flower industry was temporary, seasonal or

casual. Casual labour rises during the annual production peaks, e.g. Valentine’s Day,

Christmas, Mothers’ Day (Lawrence, 2010).

Anecdotal evidence suggests that women workers face problems such as sexual harassment,

compulsory overtime and job insecurity. Similar claims have been made in the textile and

clothing export-processing zones (EPZ). Given the nature of the accusations very few women

make public complaints, but there have been reports of improvements in health and safety

with the enactment of new codes of practice.

The growth of the sector has also displaced some population groups. The Maasai traditionally

grazed their cattle along the lake’s banks. Their access to the lake is now restricted because

flower farms own much of the surrounding land. Poorer local people are left line up to get their

water from communal taps. Maasai cattle herders can bring their cows only to the small

section of the lake where there is still public access. Even there the water is polluted, which

endangers the health of their cattle. There used to be a fishing industry around Lake Naivasha,

feeding the local people and supplying nearby towns. This has finished, and those who used to

depend on fishing went to work on the flower farms. There are two reasons for this trend.

First, was the massive death of fish, which many attributed to poisoning by the agrochemicals

emitted by the flower farms. Second, it is likely that it paid better to work on the flower farms.

Environmental effects

Several individuals, environmental bodies and NGOs have expressed concern not only about

the health hazards involved in flower production but also about the environmental problems

caused by the flower industry and also to Lake Naivasha as an important natural resource. The

farms rely on the lake for irrigation, and pipes run straight from the lake into the greenhouses.

The lake is being drained faster than it can be replenished, and water levels have dropped over


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time. This is bad news for the declining hippo and bird populations, but also for the farmers

and the Kenyan economy.

A rising population also presents major environmental challenges. In 1969 7,000 people lived

around the lake. Today there are over 300,000, but infrastructure has not kept pace with

growing demands. According to the 2009 census, the total population of the basin was

estimated to be 650,000 (compared to 237,902 in 1979), of whom approximately 160,000

people lived around Lake Naivasha itself. Between 1989 and 1999 the population of the basin

grew by 64%, although this has since slowed down to about 13%. The population pressure on

the Naivasha basin has spread across the catchment. There are 28 settlements in the basin

with population ranging between 5,000 and 50,000. The five largest divisions are Hell’s Gate

(64,000), Gilgil (45,000) Engineer (45,000), Naivasha Town (45,000), Kinangop North

(40,000) and Ndundori (35,000).

Lake Naivasha has been a Ramsar site since 1994 and a habitat to important wildlife and bird

populations. Its ecological and hydrological characteristics have attracted the attention of

many scientists to conduct ecosystem studies. The lake and its catchments are also considered

to be environmentally sensitive and the flower industry is known to have had a profound effect

on these areas. Farming in the lake basin has evolved from sisal farming and livestock rearing

to flower farming. Floriculture now accounts for approximately 4,000 ha. This change in land

use encouraged more people to come to the area in search of work, which further increased

the pressures on Lake Naivasha and the surrounding resources. According to Harper (2004)

and the Council of Canadians (2008) the main pressures on the lake include water

abstractions, agrochemicals and sewage pollution, destruction of papyrus (riparian habitat),

over-fishing and soil erosion. There is a change in fish species from predominantly tilapia to

carp, which is less prized and so generates less income (Hickley et al., 2004).

A major question facing the floriculture industry around Lake Naivasha is what constitutes a

sustainable level of water abstraction for them and for upstream users. The current water

extraction is not sustainable2 (Harper, 2004). A code of practice has helped to regulate the use

of water and agrochemicals by the flower farms, although this does not deal with upstream

farmers. European markets have helped to create an enabling environment to sustain Lake

Naivasha and the natural resources by financing and assisting local initiatives. But the flower

producers face serious competition (the price per stem exported to the EU has remained at

US$0.10 for a decade), which forces them to reduce their costs by cutting investments in

initiatives and projects to improve environmental sustainability.

2 The cumulative impacts of users disrupts the necessary supply and quality of water, water scarcity occurs


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4 The Water–Energy–Land nexus in the Naivasha basin

The Naivasha basin sustains different users at different locations in different sectors. Just

consider the following linkages: land-use changes upstream (deforestation) affects the

availability and quality of water downstream, the production of geothermal energy downstream

requires water and affects land use, flower farms downstream withdraw water and require

energy services, bird tourism and fishing depend on quality water resources. These complex

interrelations illustrate a perfect example of the WEL nexus. We provide further illustrations of

WEL-nexus interrelationships below.

Land–water linkages

Commercial farms and smallholders in the Naivasha basin have an environmental footprint

which links water withdrawal, the use of land and the generation of renewable energy. The

Water Engineering and Management group estimates the water footprint of one rose bloom at

between 7 and13 litres. The total virtual water related to cut-flower exports from the Lake

Naivasha basin was 16 million m3/yr during the period 1996–2005. The total annual water

footprint for the basin is estimated to be 224,000m3. The total water footprint by the

commercial farms around the lake is approximately 66,500m3 compared to 139,000m3 for

smallholders in the upper catchment. Further industrial and residential use, including

geothermal energy, amounted to about 18,000m3 (WWF, 2011). Such estimates imply that the

hydrology and water quality of Lake Naivasha depend not only on commercial floriculture but

also on withdrawals for fuel and farming of the upper catchment areas (Becht and Nyaoro,

2005). This adds a level of complexity when designing solutions to arrest declining lake levels.

Over the past 100 years the water level has declined owing to a number of reasons:

Lake Naivasha is shallow and its large surface area leads to high rate of

evaporation, accounting for about 60% of the water output, while water

abstractions account for between 10% and 20%.

Climate change and reduced rainfall caused by drought and floods have been

attributed to high and low phases of solar radiation respectively.

Destruction of papyrus, which has declined in acreage from 1,200 ha to 200 ha

over the last 40 years (Lake Naivasha Management Plan).

Water transfer out of the basin via the Nakuru pipeline.

Deforestation in the upper catchment leading to erosion and siltation.

Abstraction (both surface and groundwater) by commercial flower and vegetable

farms.

Increases in unregulated water abstraction in the upper catchment. Groundwater

abstraction north of Lake Naivasha caused the natural water table to drop by more

6m (Becht and Nyaoro, 2005). In addition, the water quantities and levels of Lake

Naivasha rise or fall according to the seasons. The heavy rainfall in 1997–1998

increased the lake level by 3m.

The water used by smallholders to flood their crops in the upper catchment areas may be

perceived as a direct opportunity cost to the commercial farmers needing water for irrigation

and vice versa. The direct use of lake riparian wetland areas for the cultivation of horticulture,

cattle ranching and game during drought periods may be perceived as having detrimental

consequences for the lake’s ecological functioning.

Since 1963, the Lake Naivasha basin has witnessed rapid change with the growth of

commercial farming and rapidly increasing smallholder settlements. It is estimated that the

total area under commercial irrigation around the lake is between 3,000 ha and 5,000 ha with

farm sizes of over 5 ha, in addition to flower farms of over 60 ha.

The commercial farms around the lake have attracted thousands of labourers and their families

to work in the greenhouses and the processing plants. The rising population has increased the


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pressure on forestry resources, specifically for firewood, charcoal, timber and other

construction materials. This further threatens environmental degradation by destabilising the

water table. Variation in recharge associated with land cover and land changes around the lake

can also affect groundwater quality because chemicals from the salinised soils are flushed into

the lake. The removal of vegetation cover on catchment areas has reduced water retention

capacity, and contributed to soil erosion, resulting in poor water quality and reduced soil

fertility.

Water–Energy linkages

Water in Lake Naivasha is used for the generation of geothermal energy. Approximately 19%

of Kenya’s electric power is generated from the geothermal power generation plants at

Ollkaria, which lies on the western part of Lake Naivasha (Economic Survey, 2009). There are

currently three geothermal projects with 128MW capacity, which generated approximately

1039 GWh in 2008. This electricity was worth some US$40 million in 2008. Geothermal energy

is considered to be more reliable than hydropower, which loses capacity when rainfall is scarce.

Given that so much of Kenya’s electricity is generated from hydropower, it is expected that

geothermal’s share of national electricity generation may reach 30%. If current rainfall trends

continue, it is possible that geothermal energy will take up an increasing share of national

electricity generation.

The exploitation of geothermal energy in Lake Naivasha affects land use in the basin as well as

the hydrology and water quality of the lake. The development of geothermal power requires

water especially at the initial stages. The geothermal well is drilled to a depth of 2,200m and

uses up to 100,000m3 of water per well until completion. Most wells in the Olkaria geothermal

field are deeper than 2,200m and thus their water consumption is high. There are also

concerns about the volumes of gaseous emissions from the plants, including oxides of sulphur,

nitrogen and carbon which are transformed into compounds that are deposited in the

ecosystem. These issues threaten the quality of Lake Naivasha and its environment (Nyakundi

et al., 2005).

Energy–Land linkages

Increased demand for household energy has contributed to the degradation of the Lake

Naivasha watershed. It is estimated that about 52% of the sampled households depend on

firewood and charcoal as the main sources of energy. Paraffin is used by over 30% of the

sampled households.

The wells in Olkaria are drilled using mud, which affects land use. The exploitation of

geothermal energy requires space for the powerhouses, infrastructure and housing for the

workforce. The infrastructure accompanying these developments includes power stations,

roads, steam-transmission pipes, water-transmission pipelines from Lake Naivasha and power-

transmission lines.

The intensity of land-use changes has affected the whole of the riparian reserve, even blocking

wildlife migration corridors. There were reported clashes between land users and local

communities who claim that the exploitation of the geothermal energy has affected their health

as well as their livestock because of the emissions (Verschuren et al., 2000; Nyakundi et al.,

2005).


19

5 Managing the WEL nexus: the role of different actors

There is general recognition of the environmental challenges around the Naivasha basin, but

the coherent and proactive management of the water resources in the basin was limited during

the period of rapid development over the past two decades. There is widespread

acknowledgement that water and land management of the basin must improve, which will

require adequate institutional arrangements and resources. Investment and business decisions

work best in a regulatory and economic environment that is stable and predictable, in which

the rules are coherently and consistently applied, and supported by local, national and

international facilitators.

WWF (2011) discusses the nature of the risks related to the basin that require management.

These include risks to the large horticulture companies and their employees, outgrowers and

smallholders, local government and basin inhabitants, and the broader Kenyan economy and

foreign exchange. There are already a number of trade-offs and relationships in Lake Naivasha

and the surrounding ecosystem. These include:

Water quantity and water quality influence the viability of species of concern, fish

productivity and flower farms.

Irrigation of flower farms affects biodiversity.

Loss of biodiversity affects tourism and wildlife because it affects the habitat of

wildlife, e.g. hippos.

Tourism and population growth affect water quality because of the increasing

deforestation that has caused soil erosion and siltation.

Upstream small-scale activities and deforestation seriously affect water withdrawal.

Availability of good quality water affects where flower farmers decide to locate.

Flower farms face reputational risks for their environmental impact and hence may

lose export markets, licenses and access to finances.

Renewable energy requires water.

There is need to manage these risks and trade-offs. The realisation of opportunities will

depend on comprehensive and mutually supportive engagement among all land and water

users around the lake. Below we discuss the roles of the different actors.

5.1 Flower farms and their associations

Individual firms and business associations have responded to the environmental challenges

presented by the deteriorating quality of the Lake Naivasha basin. We focus here on the flower

companies who are the most visible players, but by no means the only or major ones.

Large individual farms

According to the Horticultural Crops Development Authority (HCDA) there are approximately

over 160 cut-flower growers in Kenya categorised as small scale (under 4 ha), medium scale

(between 10 ha and 20 ha) and large scale (over 50 ha). The industry is dominated by large-

scale and mainly foreign-owned companies, which produce about 97% of total exports. The

small-scale farms contribute only about 3% of flower exports because they lack the capital and

knowledge required for large-scale production and marketing. Most small-scale farmers focus

on growing summer flowers, whose production is less capital-intensive and does not require

sophisticated technologies. Most large-scale flower farms in Naivasha produce roses.

Floriculture depends on sustainable sources of water from the lake, which means that effective

water management protects the sustainability of the sector. In 2009, Lake Naivasha was in

crisis, having shrunk drastically after a prolonged drought, jeopardising the sector. A storm

washed untreated sewage from Naivasha Town as well as the chemicals residues from the

flower farms into the lake, killing fish and affecting the fishing industry. This crisis was a wake-


20

up call for the flower industry and helped to accelerate efforts to make the area more

sustainable both for improved ecosystems and for the flower business.

Finlays

Flamingo (now Finlays) has invested millions of dollars in minimising its water use and

maximising recycling and rainwater harvesting. Over the past ten years it has reduced its

water consumption by 40% (Hepworth et al., 2011). It also acknowledges that cutting its own

water use is not enough if the wider needs are not tackled at the same time. Flamingo’s

director of sustainable business commented that Lake Naivasha had fallen to levels not seen

since the 1940s and it was time for the flower companies to engage beyond the farm gate

(KFC, 2008). All flowers are produced to Fair Trade standards in ways that promote

sustainable development.

Flamingo has reduced its pesticide use, especially the toxic class-1 chemicals. A code of

practice prohibits their use on the flower farms. Most pests are controlled by biological

methods, including ladybirds and other predators cultivated in the bug-harvesting

greenhouses. Biological pesticide control has also helped to improve the working conditions of

farm workers, who were previously affected by the toxic pesticides. Following the intervention

of trade unions, threats of consumer boycotts and bad press the company has reduced the

hours of work (Lawrence, 2010). Overtime became voluntary and permanent contracts were

issued to replace casual arrangements. Efforts were made to improve training, promote

women workers and supervisors and eliminate the widespread sexual harassment. The labour

force is no longer required to work extra hours although workers may agree to do so. The

company aimed to observe the Ethical Trading Initiative (ETI) of not letting overtime exceed

12 hours a week, and a routine audit by Marks & Spencer forced Flamingo to recruit more staff

(KFC, 2008; Lawrence, 2010). The wages and benefits of Flamingo workers are now above

average, although the agricultural workers’ union is still arguing for better distribution of

profits to the benefit of employees.

The Flamingo holding treats its waste water before it returns to the lake and helps to re-plant

trees so as to replenish the forests that had been cut down by the local population. To improve

infrastructure such as sewage systems, roads and other important social amenities the

horticulture farms in Naivasha agreed to pay a new tax to finance infrastructural improvements

(Ogodo and Vidal, 2007). Marks & Spencer supports a system to negotiate how all the groups

that depend on Lake Naivasha can share the water and cut back their use in periods of drought

or low rainfall. The groups include Maasai pastoralists, smallholders, fishing communities,

wildlife reserves and the big flower farms.

All production and processing in the flower industry observes Fairtrade standards and every

farm is Kenya Flower Council Gold Standard and Global Gap certified, is audited by

experienced NGO social auditors against the Ethical Training Initiative (ETI) base code and is

also compliant with other relevant national, international and customer standards.

Oserian

The Oserian development company is a flower business on the shores of Lake Naivasha, which

produces about 400 million stems a year. Oserian is a good example of how the geothermal

plant has benefited farms in terms of increasing yields, improving exports because of the low

carbon content, reducing pests and diseases, lowering production costs and helping to manage

water resources in Lake Naivasha, thus ensuring the sustainability of the flower businesses.

The company invested over €10 million in the geothermal plant some five years ago, which

enables the farm to hold about 3.8 million litres of water at 92°C. By doing this they can biw

produce more consistently high-quality roses with a reduced carbon footprint. For example,

they produce 350 stems per m2 per year compared to other farms that produce about 210

stems (Council of Canadians, 2008). All the water used is recaptured, recycled and converted

to steam, which has cut down consumption of lake water.

Oserian transports its flowers by sea, which its management claims takes about 25 days in

controlled-climate, sterile shipping conditions. Sea transport saves about US$0.2 a stem and

also improves the company’s carbon footprint, which is tracked by its biggest customer, the UK

retailer Tesco.


21

Apart from ensuring environmental sustainability Oserian has also tried to ensure that its

labour conditions comply with the codes of practice, which motivates their workers and appeals

to EU consumers. The company employs about 5,000 workers to whom it provides free

housing or a housing allowance, healthcare facilities including anti-retroviral drugs to treat

HIV, primary schools, social and sporting activities. The workers’ houses enjoy electricity and

running water.

Oserian is the world’s largest pest-management farm and produces beneficial insects that

attack pests, e.g. one 2.5-acre greenhouse is devoted to producing more than 3 million

Phytoseiulus persimilis parasitic mites each week, which attack spider mites. They do not use

miticides, which are expensive and are a health and safety risk. To supplement fertiliser

programmes, Oserian is using redworms from Japan to produce worm casts through

vermiculture. The growers also use Twin N, a powdered form of beneficial bacteria that turn

plants into nitrogen fixers. The most effective weapon against flower diseases, however, is the

continuous heating from a geothermal installation, which also eliminates carbon dioxide,

carbon monoxide and nitrous oxide. The last two are not emitted, but carbon dioxide is used

by the flowers and therefore released.

Business associations

The Lake Naivasha business cluster includes several cooperation and collaboration efforts. The

flower farms have formed various associations with objectives ranging from lobbying for policy

support, environmental conservation, to maintaining standards to facilitate corporate social

responsibility (CSR) programmes. The Kenya Flower Council (KFC) and the Fresh Produce

Exports Association (FPEAK) are the key industrial associations, whose objectives include

maintaining environmental, economic and social standards.3 The Horticultural Ethical Business

Initiatives (HEBI) conducts regular social audits on workers’ welfare. In all these cases the

firms are graded depending on their performance and adherence to the code of practice agreed

by various associations – the Oserian flower farm is highly graded.

KFC works closely with FPEAK to represent their members before government and

development agencies, media, trade associations, unions and other non-governmental bodies.

KFC hosts Kenya Flower days in the EU, and cooperates with other stakeholders to support the

cut-flower industry both locally and internationally. In October 2009, KFC became the first

growers’ association to be certified to audit flower farms in Kenya and in other African

countries.

The KFC developed a code of practice that is fully based on the Global Good Agriculture

Practices (GAP). This code helps to self-regulate the flower industry by providing the standards

that are required of flower producers. It operates Silver and Gold certification. The KFC carries

out surprise audits to ensure that these standards are maintained at all times by the flower

farms. This code of practice mainly touches on:

Workers’ health, safety and general labour conditions.

Environmental Management Plan incorporating general protection of the natural

environment, including water, air, land, flora and fauna.

Good Agriculture Practices.

Good management and safe disposal of all farm wastes.

Computerised drip irrigation to reduce water wastage.

Proper bookkeeping and documentation to ensure traceability and accountability.

By being compliant with the code of practice, the flower companies promote inclusive and

sustainable growth through providing good working conditions. The businesses were forced to

3 Most flower farms are registered with these groups in order to meet international environmental and social

standards. These groups also provide a platform that assists the flower farms in exporting their produce.


22

address poor working conditions and ensure payment of the national minimum wage. In terms

of labour rights the code of practice has helped to raise the standards of permanent workers in

terms of providing a living wage, housing allowance, medical care, paid maternity leave and

protective clothing for those using toxic pesticides (Lawrence, 2010).

Codes of practice also exist to conserve the natural environment of the Lake Naivasha basin.

Two of the best-known codes are administered by the Lake Naivasha Growers Group (LNGG)

and the Lake Naivasha Riparian Association (LNRA), which aim to ensure that the lake and its

surrounding natural environment are conserved. These codes have helped in regulating the

use of water in the lake as well agrochemicals used on the flower farms. The importance

European buyers attach to these codes seems to have greatly contributed to creating an

environment that will sustain local initiatives to protect Lake Naivasha.

By creating their own internationally recognised social and environmental standards and code

of practice, the Kenyan flower businesses have largely managed to resist pressure to comply

with the European flower industry code of practice (KFC, 2008).

In the small-scale sector, farmers have experienced challenges in attracting medium- and

long-term investment for the expansion of their flower projects.

Fair Trade certification provides an independent verification that the workers on these large-

scale flower farms receive decent wages and working conditions in line with the International

Labour Organization (ILO) conventions. The flower producers negotiate a price with the

exporters who purchase the flowers for the Fair Trade market. This includes an additional

premium set at 10% of the negotiated price. The premium is reserved specifically for

investments in projects to benefit the workers and the wider community. Decisions on how the

money is to be used are left with the Joint Body of elected workers and management

representatives in consultation with the workforce. During the post-election violence, the fair

premium was used to assist flower workers who were displaced from their homes (Max

Havelaar, 2008).

Through managing the Fair Trade premium and resulting projects, workers have gained the

confidence to address wider issues with management while local relations have improved as a

result of community-based projects. However, Fair Trade-certified farms currently sell a

maximum of 20% of their production to Fair Trade buyers so there is still potential to expand

this market and provide substantial benefits to farm workers and their communities. Premium

money has also been dedicated to broader community projects such as education and training,

part-funding of the Rubiri water project which will supply water to over 200 families, and

provision of health facilities in the local communities. The workers at Finlay donated Fair Trade

premium money to the Friends of Mau Water Catchment (FOMAWA), a local NGO working to

conserve and re-forest the region’s major water catchment area, the greater Mau Forest.4 The

Joint Body also set up a tree nursery, which is being run by the employees themselves. These

re-afforestation efforts are crucial to the ecosystem.

Flower farms around the lake have also come together to support social programmes as well

as pool together their resources for infrastructure development, e.g. the flower farms invested

about 25 million KSh in the repair and construction of parts of the Moi South Lake road, which

serves most of the farms around Lake Naivasha (KFC, 2008).

5.2 Other institutions

The Lake Naivasha Water Resources User Association (LANAWRUA) is probably one of the most

developed WRUAs in Kenya. Local water resources management in Naivasha finds its roots in

the Lake Naivasha Riparian Association (LNRA), which was established in 1929 to protect local

landowner’s rights. With the advent of the floriculture industry in the early 1980s the LNRA

4 http://www.fairtrade.org.uk/producers/flowers/finlay_flowers_oserian_ravine_roses_kenya.aspx

http://www.fairtrade.org.uk/producers/flowers/finlay_flowers_oserian_ravine_roses_kenya.aspx


23

became more strident in trying to balance the impact of the expanding commercial interests

surrounding the lake with protecting its environmental integrity.

The LANAWRUA has drawn on this background in establishing itself. The other WRUAs do not

have such a long history or established stakeholder groups. As a result, many of them are still

trying to develop the capacity to effectively manage the water resources in their area. WRMA

has stated its intention to delegate some of its functions to the WRUAs.

There are two key associations in the area of environmental conservation and sustainable use

of the natural resources around Lake Naivasha: the Lake Naivasha Growers Group (LNGG) and

the Lake Naivasha Riparian Association (LNRA). They were formed in response to the declining

ecosystem. The associations conduct regular environmental and social auditing as well as

providing training for their members on environmental sustainability and management of

natural resources. The LNRA has a diverse membership including smallholders, ranchers,

flower growers, tour operators, the Kenya Wildlife Service, the Kenya Power and Lighting

Company and the Naivasha Municipal Council. The association has developed a comprehensive

management plan to control human activities in the area and to prevent species extinction.

5.3 Government

The country’s legal framework for floriculture is handled by line ministries and their relevant

agencies, e.g. the Ministry of Agriculture and the Ministry of Trade and Industry, and the

Horticultural Crops Development Association (HCDA). The government ensures compliance

with standards to meet all the qualitative aspects of importer’s demands including packaging,

size, quality, observation of health requirements etc. The Ministry of Agriculture has

established quality standards for major horticultural exports and its inspectors conduct sample

tests at airports and seaports. Export rules and regulations are also enforced, e.g. the EU has

revised its requirements on maximum residue levels to an analytical zero in order to safeguard

consumers and environment. The government ensures that standards and measures are

maintained to enhance and promote the flower industry and also ensure their sustainability in

the international market.

The government has also tried to improve the sustainability of Lake Naivasha by developing

and financing various projects through the environmental ministry. Recently the Environmental

and Mineral Resources Minister invited the World Bank for discussions on conserving Lake

Naivasha. The Minister wanted the ministry to partner with the World Bank in conserving the

Lake Naivasha catchment and address solid waste management (SWM) in the region. The

ministry had also carried out various activities to raise the amount of water in the lake, e.g.

restoration of dams in the entire catchment to restore the water table, equipping 122 schools

with water-harvesting tanks to provide water for the tree nurseries that are about to be

started. The ministry, in partnership with the Military and National Youth Service, would also

desilt all the dams in the area the Ministry of Agriculture would undertake soil-conservation

measures.

Prime Minister Raila Odinga recently visited the Prince of Wales5 in London to discuss the

conservation of Lake Naivasha. They aim to help coordinate the various stakeholders in order

to restore Lake Naivasha and turn Kenya’s flower industry into a cleaner, bigger and more

sustainable business, and then draw on this experience to address other degraded areas. An

innovative programme, backed by the Prince of Wales, is underway with the goal of achieving

more sustainable use of the lake’s water and restoration of its ecology. The project ‘Imarisha

Naivasha’ (or ‘Empower Naivasha’) seeks to coordinate local industries and communities, along

with government agencies and international NGOs, to restore the damaged lake.

Migration towards Lake Naivasha is likely to continue as long as people believe that the

horticulture industry or smallholder farming provide jobs and livelihoods. As more people enter

5 See: http://www.nation.co.ke/News/PM+Odinga+Prince+Charles+to+restore+degraded+lakes/-/1056/1196834/-/y32tqrz/-/index.html


24

the area, competition over land, water or jobs will become more acute. We have only to recall

the disputed 2008 elections or the history of violent conflicts over water between pastoralists

and smallholders in other parts of the country, to see the damage that social unrest can do the

economy and by implication the horticultural industry. These pressures have manifested

themselves more directly in the political environment in relation to water management in the

basin. During 2009 drought, municipal leaders are said to have entertained the prospect of

severely restricting the withdrawal of water by flower farms.6 Similarly, popular and political

discourse around the 2010 fish-kill attributed the deterioration of water quality to the

horticulture industry, despite the significant impacts of the failing Naivasha Town wastewater

treatment works discharging directly into the lake, and runoff from upstream settlements and

smallholder areas. Although they may be politically attractive in the short term, decisions such

as restricting flower farms’ water withdrawal have potentially disastrous long-term

consequences and there is therefore need to address them before a repeat is staged.

5.4 International actors

There is strong collaboration between the local flower industry and international companies

and organisations. This covers areas including environmental management, training,

laboratory analysis and diagnosis, technology acquisitions and marketing. Most of the foreign

companies support training and capacity-building to improve standards and ensure that high-

quality flowers enter the export markets. For example, the Royal Netherlands Embassy in

Nairobi started a training programme to help local horticultural products to reach markets in

the industrialised countries. The German Flower Labor Programme (FLP) has collaborated with

the International Centre for Insects and Physiology and Ecology (ICIPE) in Kenya to develop a

programme to help trained scouts detect problems and diseases early enough and avoid

extensive damage.

The Kenya flower industry also works closely with laboratories and research institutes based in

developed countries, e.g. Société Générale de Surveillance (SGS) and Releb de Haan

laboratories (Netherlands). Consumers tend to place trust in the analyses and tests conducted

by these laboratories, which means that obtaining their clearance boosts export sales; in

addition, Kenyan farmers prefer them because they get results in about two working days as

opposed to four months for results from local laboratories. There are several collaborative

research programmes such as Dudutech (Kenya) Ltd, a pest-management company that

provides crop-protection solutions in collaboration with Flamingo. There are therefore

increasing cross-level interactions.

The LNRA has initiated innovations in resource management by working with global institutions

such as UNDP, gaining support from the national Kenyan institutions. The River Malewa is

under serious threat from unsustainable land use, e.g. deforestation, siltation, increased

abstraction of water and agro-chemical pollution. There is now evidence that the river output

and water quality are declining, which will in turn affect Lake Naivasha. The World Wildlife

Fund (WWF) has been working with the local communities in conjunction with other

stakeholders including the LNRA, and drafted a preliminary plan for conserving the Malewa

basin.

A new initiative known as Payment for Environmental Services (PES) was started in 2008 by

CARE International in partnership with WWF, and teaches farmers about sustainable farming

practices that would both improve yields and reduce the environmental impacts of agriculture

on the water flowing into Lake Naivasha. Some such practices include planting napier grass

and trees for fodder and fruits as well as ploughing along rather than across the contour in

order to reduce soil erosion.

The programme involves LANAWRUA, which represents 23 commercial farms around Lake

Naivasha. In order to encourage upstream landowners to continue to provide environmental

services, LANAWRUA awarded US$ 5,840 to Wanjohi WRUA and US$ 4,160 to Upper Turasha

6 See East African 20 July 2009, accessed 24 August 2011.


25

WRUA. It recently made a second payment of US$ 10,000 to 470 farmers in the catchment

area and involves a mix of land-use transformation measures. These measures improve farm

productivity and provide both nature and downstream users with quality water as a long-term

environmental service.7 See appendix I for more information.

Although it is still too early to evaluate the scheme, and as many challenges maintain,

Chirambi et al. (2011) report on the pilot PES scheme:

Land management changes were implemented by ecosystem service sellers

Reported improved water quality

Livelihood improvements: increased milk production and reduced pressure on

forests

Reduced soil erosion and surface water runoff

Increased tree cover in pilot areas

Continued support from ecosystem service buyers (especially LNGG)

The Alliance for Water Stewardship (AWS)8 has been working with other stakeholders on the

development of a global water stewardship programme that promotes a water stewardship

standard and a certification programme designed to ensure that virtual water consumption is

sustainable (Hepworth et al., 2011). The AWS is working to build a programme that recognises

and rewards water users and managers who take major steps to minimise the impacts of their

water management. Major stakeholders in Kenya welcomed the AWS standard as an important

and practical way to prevent negative water impacts arising through global trade. According to

the vice-chair of the LNWRA and representative of small farmers in the upper basin, these

standards would change the way water is being managed in Naivasha. The standard was also

welcomed by the Kenyan government, which who believes it will help to integrate water

management and the National Water Policy.

7 See: http://presa.worldagroforestry.org/blog/2011/07/25/lake-naivasha-communities-in-kenya-get-second-

payment-for-catchment-conservation/#more-2707. 8 See: http://allianceforwaterstewardship.org/about_pdfs/About_AWS/Regional_Initiatives/Africa/AWS-Kenya-Case-

Study-Technical-Report.pdf.

http://allianceforwaterstewardship.org/about_pdfs/About_AWS/Regional_Initiatives/Africa/AWS-Kenya-Case-Study-Technical-Report.pdf



26

6 Conclusions

The future of one of the most successful and rapidly emerging industries in Africa is dependent

on the management of a relatively small river basin. The situation is complex as there are

different users at different locations in different sectors. Changes in land use upstream

(deforestation and greater need for wood for energy) affect the availability of water

downstream, the production of geothermal energy downstream requires water and affects land

use, flower farms downstream withdraw water and require energy services, tourism depends

on quality water resources. This is a perfect example of how water, energy and land are

increasingly interrelated the WEL nexus.

The general recognition of the environmental challenges around the Naivasha basin has led to

a range of initiatives to conserve Lake Naivasha:

Business and business associations (e.g. Oserian, Findlay, KFC)

Local institutions (e.g. LANAWRUA)

Government (Prime Minister level)

International facilitators (e.g. UNDP, WWF)

By working across sectors (the nexus of water, energy and land, and relevant stakeholders,

these actors now realise that joint action is important and that integrated thinking can lead to

new solutions. For a long time, such joint action was uncoordinated. It was left to a handful of

companies to respond, although the local institutions have long existed. Now there seems to

be leadership from the top of government. There is also more willingness to engage, e.g.

evidence that downstream users (flower farms) are willing to be involved in a scheme with

payments for ecosystem services by users upstream and thus protect the basis of future

economic activity. Many challenges remain, however, and some suggested courses of action

are set out in Appendix II.


27

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sites.google.com/site/eoianaivasha/project-definition/water-governance

sites.google.com/site/eoianaivasha/project-definition/water-governance

http://www.un.org/waterforlifedecade/green_economy_2011/pdf/session_4_biodiversity_protection_cases_kenya.pdf

http://www.canadians.org/

http://www.ramsar.org/award/key_awards99_interview_lnra.htm

http://www.le.ac.uk/bl/staff/dmh/dmhearthwatch.htm



http://www.le.ac.uk/bl/staff/dmh/dmhearthwatch.htm

http://www.kenyaflowers.co.ke/index.html

http://www.maxhavelaar.ch/en/


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Nyakundi, P. A., Inoti, I. K., Thiongo, G. T., Keriko, J. M. (2005) Impact of land use changes around Olkaria geothermal stations, Naivasha, Kenya. Gnet E-Journal website: http://www.gnet.org/middle.php. Odote, C., Ochieng, B., and Makoloo,O. (2009) ‘The Implications of Property Rights for Wetlands Management in Kenya’, Institute for Law and Environmental Governance, Nairobi. Available at: http://iasc2008.glos.ac.uk/conference%20papers/papers/O/Odote_122601.pdf.

Ogodo, O. and Vidal, J. (2007) ‘Drained of life’, Guardian, 14 February, available at: http://www.guardian.co.uk/society/2007/feb/14/kenya.conservation. Olago, D. et al. (2010) ‘Holocene palaeohydrology, groundwater and climate change in the lake basins of the Central Kenya Rift’, Hydrological Sciences Journal 54(4): 765–780. Republic of Kenya Economic Survey Various Issues. Nairobi: Government Printer. Saving Kenya's Lake Naivasha: Efforts to Improve Sustainability (2011) ScienceDaily, May 11, 2011. Available at: http://www.sciencedaily.com/releases/2011/05/110511075034.htm. The Kenya Flower Council (no date), information available at: http://www.kenyaflowercouncil.org. WWF (2011) ‘Case Study: Shared risk and opportunity in water resources: seeking a sustainable future for Lake Naivasha’, available at: http://www.wwf.de/fileadmin/fmwwf/pdf_neu/lake_naivasha_report_02_2011.pdf. Verschuuren, D., Laird, K. and Cumming, B. (2000) ‘Rainfall and drought in equatorial east Africa during the past 1,100 years’, Nature 403: 410–414.

http://www.gnet.org/middle.php

http://iasc2008.glos.ac.uk/conference%20papers/papers/O/Odote_122601.pdf

http://www.guardian.co.uk/society/2007/feb/14/kenya.conservation

http://www.sciencedaily.com/releases/2011/05/110511075034.htm

http://www.kenyaflowercouncil.org/

http://www.wwf.de/fileadmin/fmwwf/pdf_neu/lake_naivasha_report_02_2011.pdf


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Appendix I: Payments for Ecosystem Services in the Naivasha Basin9

One successful example of a project that has been implemented without the support of

government funding sources is the pilot project for Equitable Payment for Watershed Services

(EPWS) which was jointly facilitated by CARE and WWF and linked the commercial water users

around the lake with 565 smallholder farmers via the WRUAs. The LANAWRUA members paid

the Wanjohi and Upper Turusha WRUAs to rehabilitate and maintain the riparian zones, plant

trees and reduce fertiliser use. The Lake Naivasha environmental services contract is part of a

joint WWF and CARE-Kenya scheme known as Equitable Payment for Watershed Services. This

environmental services scheme is geared towards providing downstream water users with

quality water as the environmental service. The water is needed for agriculture, horticulture,

ecotourism, fisheries, geothermal power generation and the timber industry.

EPWS is also designed to benefit all stakeholders to ensure equity and sustainability of the

project in the long run. Stakeholders include the private and public sectors as well as the local

population. The scheme entails land-use transformation by upstream farmers through

rehabilitating and maintaining riparian zones, planting grass strips and terracing steep slopes.

Participating farmers are expected to reduce the use of fertilisers and pesticides as a means of

cutting pollution. Tree planting is another key component of the scheme.

In Naivasha, EPWS combines compensating upstream environmental service stewards for

forgone opportunities with collaborative investment between environmental service providers

and beneficiaries for increased income through sustainable management of the environment.

Apart from watershed services, EPWS also includes forest services, biodiversity and landscape

beauty.

How it was done

The contract is between the Wanjohi Water Resource Users Association (WRUA), the Upper

Turasha WRUA and the Lake Naivasha Water Resource Users Association (LANAWRUA). The

Wanjohi and Upper Turasha associations, both located in the upper catchment, are the sellers

while LANAWRUA is the downstream buyer. The sellers engaged the services of a lawyer to

develop the contract.

The two upstream WRUAs signed contracts on behalf of the 565 farmers implementing the

EPWS scheme. LANAWRUA signed on behalf of the environmental service buyers and

comprises the Lake Naivasha Growers Group (LNGG) and the Lake Naivasha Riparian

Association (LNRA). LNGG is mostly made up of commercial horticulture and floriculture farms

while LNRA consists of landowners around the lake. All these organisations are formal legal

entities.

WWF and CARE-Kenya acted as intermediaries and implementers through the partial provision

of funds to ensure cost effectiveness. The funds also helped in building the capacity of sellers

to manage the project efficiently. Other stakeholders in the EPWS scheme are the Naivasha

Water Resource Management Authority and the Ministry of Agriculture. A careful process of

stakeholder analysis and dialogue was followed by identification of environmental service

sellers and buyers, trust building, development of a memorandum of understanding and fine-

tuning of seller–buyer negotiations.

How it works

To appreciate and encourage upstream landowners to continue providing environmental

services, LANAWRUA awarded US$ 5,840 to Wanjohi WRUA and US$ 4,160 to Upper Turasha

WRUA. Vouchers worth US$ 17 will be printed and delivered to the two associations, which will

subsequently distribute them to selected shops within communities at EPWS pilot sites. Each

voucher represents the annual payment to each farmer.

9 See:

http://www.un.org/waterforlifedecade/green_economy_2011/pdf/session_4_biodiversity_protection_cases_kenya.pdf.

http://www.un.org/waterforlifedecade/green_economy_2011/pdf/session_4_biodiversity_protection_cases_kenya.pdf


30

Individual farmers will redeem their vouchers and use them to purchase farm inputs and other

basic household goods. The farmers are rewarded equally to compensate for opportunity costs

based on environmental service provision and contribution to positive socioeconomic impacts.

The contract establishes a conflict-resolution committee composed of buyers, sellers, the

Water Resources Management Authority and WWF/CARE representatives. The contract will be

revised and/or renewed after one year.

Other activities

As part of the EPWS scheme, a socioeconomic baseline survey was undertaken and data

analysis is in progress. Two progress review meetings have been held with the respective

WRUAs. Also in progress are consultation meetings with other potential buyers. Four staff

gauges have been installed along four rivers draining into Lake Naivasha while the two

upstream WRUAs have been issued with instruments to assess river sediment levels.

An exchange visit to an EPWS site located in the Uluguru Mountains of Tanzania has also taken

place and a project monitoring plan for the upstream WRUA is in development.

Effects

Although still a pilot, the project is an effective of example of the coordination of different

water users to manage the water resources from the top of the catchment to the end user.

More farmers are needed in order to expand the scheme for tangible results to be realised.

Challenges

Challenges faced in the EPWS venture include unpredictable weather, which had a negative

effect on conservation structures especially in 2009, and land fragmentation due to increasing

population density. EPWS officers say that engaging more buyers is another challenge.

http://presa.worldagroforestry.org/where-we-work/tanzania-uluguru-mountains/


31

Appendix II: Further suggestions

There is no shortage of ideas in discussions around Lake Naivasha. Some of these include:

Water stewardship. A global water stewardship programme could recognise and

reward responsible water managers and users and is supported by many flower

farms such as Finlays (Flamingo), outlets such as Marks & Spencer and agencies

such as Kenya Water Resource Management Authority among others.

Paying for ecosystem services (PES) initiated by the government in collaboration

with NGOs and international donors. Provide incentives for organised community

groups in the Lake Naivasha basin to protect water resources, e.g. by constructing

small ponds, hydro-technical facilities, cleaning up river banks, educational

programmes in schools about water protection, community initiatives and training

workshops to enhance knowledge of local wildlife and water environment.

Downstream users need to support watershed protection through afforestation and

re-forestation programmes in the catchment areas as well as in the Mau Forest,

which has suffered negative land-use changes. They can partner educational

institutions, private firms and community organizations to promote controlled

planning and care of native seedlings to encourage tree planting.

Promote public–private dialogue. Key stakeholders in the Lake Naivasha basin such

as the government and commercial and small-scale flower farms should engage in

a dialogue from an ecosystem perspective

Enhance flower farms’ efficiency. The flower farms could become more efficient in

their use of water in order to cut down their use of Lake Naivasha, e.g. by using

drip irrigation (also known as trickle irrigation or micro irrigation) minimises the use

of water and fertilisers by allowing water to drip slowly to the roots of plants,

through a network of valves, pipes, tubing and emitters; or adopting basic green

technologies such as rainwater capture systems and dry sanitation facilities.

Enhance water-resource management. Local government, with the help of

businesses, could introduce technologies such as GPS, satellite imagery and

weather telemetry to local communities to improve water-resource management in

times of scarcity and need.

Awareness raising. Businesses could develop projects to educate and empower the

local community and especially young people to tackle critical environmental

sustainability challenges so that they can become agents of positive social change.

Businesses could conduct awareness-raising workshops on the conservation and

rational use of natural resources in the Lake Naivasha basin, such as benefits of the

forest, shelter and nutrition of wild animals, pure air, scenic beauty, and clean and

sufficient water. Local partners should also enrol farmers in programmes to adopt

practices that would reduce sedimentation and contamination sources, thereby

improving water quality. The media offer an opportunity for the public to learn

about the lake and get involved in conservation efforts.

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