By Dr. Kariuki Muigua, PhD (Leading Environmental Law Scholar, Policy Advisor, Natural Resources Lawyer and Dispute Resolution Expert from Kenya), Winner of Kenya’s ADR Practitioner of the Year 2021*

As more and more statutes impose environmental compliance requirements on corporate organizations, the role of the Company Secretary in ensuring environmental compliance in Kenya has become important. It is there necessary to examine the environmental compliance responsibilities of the company secretary as imposed by the Environmental Management and Coordination Act (EMCA), Act No. 8 of 1999 and other statutes in Kenya as questions on what is exactly required of a company to ensure environmental compliance under the Kenyan Law are going to come before the Company Secretary.  In determining the role of the company secretary relative to environmental compliance, it is necessary to look at the requirements imposed on companies and how the Company Secretary fits into the picture.

In recent years the world has experienced awareness in the area of environmentalism. More than ever, stakeholders want companies to reduce pollution, engage in cleaner production, conserve the environment and generally engage in environmentally responsible corporate behaviour. Some companies have even gone to the extent of incorporating environmental goals into their vision and mission statements. Ideas such as conservation, pollution control, recycling waste, public awareness and education, use of cleaner fuels and the use of Environmental Impact Assessment and Audits have found their way into the management principles of corporations.

The Company Secretary as the member of the management who generally oversees compliance and governance finds herself engaged in environmental issues at both policy and operational levels. In some instance, the very survival of the corporate body even hinges on how environmental issues are handled. For instance, the High Court stopped the 60MW Kinangop Wind Power Project after area residents went to court to complain about lack of public participation in carrying out the Environmental Impact Assessment (EIA) for the Project. The Company launched a Ksh. 31 billion (US 311,649,022 million) claim in international arbitration for damages incurred which was thrown out. There is no question the fortunes of the company would have turned up differently had the company secretary of the Company insisted on environmental compliance to the letter.

In some instances, the Company Secretary may even find herself engaged in issues of environmental compliance as a matter of law. There is thus a need for knowledge of what the law requires in this regard. Environmental Compliance refers to, among other things, the adherence to environmental law and all regulations and guidelines promulgated by the government and other public bodies. It may also refer to carrying out practices that serve to conserve the environment, reduce pollution and generally take into account the health and safety of human beings even where regulation is lacking. This is compliance at the moral /ethical level.

In Kenya it is usual for a person to first become aware of a law when the penal sanctions of that law catch up with him/her. Company Secretaries should therefore avoid this by noting that under the Environmental Management and Coordination Act when an offence under the Act is committed by a body corporate, the body Corporate and every director or officer of the body corporate who had knowledge of the commission of the offence and who did not exercise due diligence, efficiency and economy to ensure compliance with this Act shall be guilty of an offence. In the ongoing Arror and Kimwarer case, an alleged misleading EIA report implicated many including the NEMA Director General.

A Company Secretary is increasingly being viewed as the officer of the company responsible for environmental compliance. As a matter of fact, the law imposes a duty on the Company Secretary to ensure compliance with environmental law, rules and regulations on behalf of the Company. The penalties under EMCA are harsh and can include imprisonment and fines that ran into hundreds of thousands of shillings. Offences under EMCA relate among other things, failing to submit to inspection, offences relating to Environmental Impact Assessment; offences relating to records; offences relating to standards; offences relating to hazardous waste; offences relating to pollution; and offences relating to restoration orders.

The Act imports personal liability even where the offence complained of was committed on account of another person (corporate body). It is thus possible for a Company Secretary to be personally liable for environmental offences committed by the Company. As such, it suffices to say that the role of the Company Secretary in Environmental Compliance is a statutory one, it is not a matter of choice. A Company Secretary as an officer of the company must then logically ensure that where an Environmental Impact Assessment is prepared as required in accordance with and in compliance with the law. An Environmental Impact Assessment means a systematic examination conducted to determine whether or not a programme, activity or project will have any adverse impact on the environment.

Similarly, where an Environmental Audit is required to be carried out the Company Secretary should ensure that it is prepared in accordance with the requirements of EMCA or the regulations made thereunder. It follows also that the Company Secretary being an Officer of the Company has a duty to ensure compliance with standards set out under EMCA. If he/she does not do so then liability in criminal law attaches. The Company Secretary is also bound to ensure that hazardous waste and other chemicals and radioactive materials are handled properly. If the company is charged with an offence relating to hazardous wastes and other radioactive substances then the Company Secretary as an officer of the Company becomes liable in criminal law and may end up paying a fine of not less than one million shillings or to imprisonment for a term of not less than two years or both.

Further, EMCA creates offences relating to pollution of the environment. Thus, if a company discharges any dangerous materials, substances, oil, oil mixtures into land, water, air or aquatic environment with the result effect of polluting the environment, this attracts heavy penalties which include paying the cost of removing the pollution. Again if the company commits any of the abovementioned offences then the Company Secretary being an officer of the company incurs liability in civil and criminal law. It is discernible from the above that a Company Secretary has a big role to play in Environmental compliance. Given that the Company Secretary of today is considered part of the “mind” of the Company and a key policy maker, it is increasingly becoming difficult to argue that he/she was not aware of the legal requirement for Environmental compliance.

Sometimes environmental compliance measures take the form of fiscal incentives and disincentives rather than punishments. EMCA provides for tax and fiscal incentives, disincentives or fees which include customs and excise waiver in respect of imported capital goods which prevent or substantially reduce environmental degradation caused by an undertaking; tax rebates to industries or other establishments that invest in plants, equipment or machinery for pollution control, recycling of wastes, water harvesting and conservation, prevention of floods and using other energy resources as substitutes for hydrocarbons, tax disincentives to deter bad environmental behaviour that leads to depletion of environmental resources or that cause pollution; user fees to ensure that those who use the environmental resources pay proper value for the utilization of such resources.

The Company Secretary who is involved in strategic planning within the organization can influence planning on environmental matters so that the company embraces measures aimed at cleaner production, pollution, control, recycling of wastes, water harvesting and the use of cleaner energy resources in place of hydrocarbons. The Company Secretary can also take part in environmental awareness campaigns that corporations launch once in a while. A Company Secretary who is familiar with the environmental compliance regulations and believes in the need to conserve the environment and reduce pollution has a role to play in public education in ensuring that the public appreciates the importance of a clean and healthy environment.

Attendance and contribution at seminars by the Company Secretary may also serve to disseminate environmental education both within the company and to the communities which may be affected by the activities of the company. Often, the Company Secretary will also be involved in the drafting of agreements on environmental codes reached as a result of meetings between stakeholders within a given industry. These could be agreements on setting of environmental standards or joint cooperation with the aim of keeping the environment clean. Knowledge of environmental regulations requirements, penalties and compliance measures, thus, come in handy for the Company Secretary.

EMCA provides that every Kenyan is entitled to a clean and healthy environment and has a duty to safeguard and enhance the environment. The duty to safeguard and enhance the environment is a statutory duty which binds the Company Secretary as well. The Company Secretary should take part in “sustainable development” this being the development that meets the needs of the present generation without compromising the ability to use the same by future generations. The Company Secretary lives and works within the environment. The air we breathe, the land we walk on, the water we use, the climate, sound, aesthetics and all our surroundings form what is called the environment. We all have a duty to protect, safeguard and enhance the environment. Compliance with all regulations and initiation of measures to conserve the environment is part of the duty of the Company Secretary and indeed all Kenyans.

*This is article is an extract from an article by Dr. Kariuki Muigua, PhD,Kenya’s ADR Practitioner of the Year 2021 (Nairobi Legal Awards): Muigua, K., Role of the Company Secretary In Environmental Compliance, http://kmco.co.ke/wp-content/uploads/2018/ 08/078_ROLE-OF-THE-C-S-IN-ENVIRONMENTAL-COMPLIANCE.pdf. Dr. Kariuki Muigua is Kenya’s foremost Environmental Law and Natural Resources Lawyer and Scholar, Sustainable Development Advocate and Conflict Management Expert. Dr. Kariuki Muigua is a Senior Lecturer of Environmental Law and Dispute resolution at the University of Nairobi School of Law and The Center for Advanced Studies in Environmental Law and Policy (CASELAP). He has published numerous books and articles on Environmental Law, Environmental Justice Conflict Management, Alternative Dispute Resolution and Sustainable Development. Dr. Muigua is also a Chartered Arbitrator, an Accredited Mediator, the Africa Trustee of the Chartered Institute of Arbitrators and the Managing Partner of Kariuki Muigua & Co. Advocates. Dr. Muigua is recognized as one of the leading lawyers and dispute resolution experts by the Chambers Global Guide 2021.