Businesses petition government over new waste management levy

Several business associations have petitioned the government over a new levy targeting waste management from their operations.

The groups argue that the levy, introduced under the Sustainable Waste Management (Extended Producer Responsibility) Regulations, 2024, will drive up consumer prices due to the high cost of compliance.

The proposed EPR levy is expected to affect products packaged in nylon, including diapers, detergents, fabric softeners and sanitary towels. The levy is scheduled to take effect later this month.

The regulation requires affected individuals and businesses to pay the fee to the National Environment Management Authority (Nema).

Under the new rules, importers of products listed in the First Schedule are required to pay a fee of Sh150 per item for every consignment brought into the country.

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Additionally, importers must obtain an import permit for each shipment, which is expected to add further financial pressure.

Producers are also expected to register individually with Nema, paying a one-off registration fee of Sh5,000 or Sh10,000 under the collective action scheme or Producer Responsibility Organisation (PRO) and an annual renewable license fee of Sh50,000 for individuals or Sh100,000 for schemes.

In a petition, Shippers Council of Eastern Africa (SCEA), Kenya Private Sector Alliance (KEPSA), Kenya International Freight and Warehousing Association (Kifwa), Fresh Produce Consortium of Kenya (FPCK), Kenya Flower Council and Association of Kenya Suppliers (AKS) urged government to extend the implementation date to January or mid next year.

SCEA chief executive officer Agayo Ogambi, KEPSA chief executive officer Caroline Kariuki, KFC chief executive officer Clement Tulezi, FPCK chief executive officer Ojepat Okisegere, and Kifwa chief executive officer Wycliffe Wanda signed the petition dated April 28, this year.

They urged the government to allow time for stakeholder consultations, clarification of operational ambiguities, capacity building for compliance, and alignment of administrative systems between public agencies and businesses.

In the petition, the organisations noted that from an operational and business perspective, registration, licensing, and payment processes will increase the cost of doing business, discourage compliance, and undermine Kenya’s competitiveness as a trade and investment hub.

“The cumulative impact of these costs will directly increase the cost of importation and manufacturing. Inevitably, these additional operational expenses will be passed on to consumers, leading to higher retail prices for essential products such as diapers, sanitary towels, detergents, and fabric softeners, thereby disproportionately affecting low and middle-income households,” they said in the petition.

They noted that the flat fee structure of Sh150 per item does not differentiate between high and low risk products or between large corporations and small and medium enterprises, placing a heavier financial burden on small businesses and bulk importers.

“This could significantly impact SMEs, potentially leading to financial distress and closure,” they stated.

The business leaders noted that the regulation has failed to provide an exemption for raw materials and intermediate goods destined for further processing by manufacturers, non-profit organisations importing goods for donation, or key medical and pharmaceutical products.

They urged for exemptions for essential goods such as agrochemicals and farm inputs like fertilizers and seeds, sugar, edible oils, and wheat and maize flour to ensure food security.

“We urge that essential commodities critical for food security, health, and household welfare be exempted from EPR-related import fees,” they said.