By Hon. Prof. Kariuki Muigua, OGW, PhD, C.Arb, FCIArb is a Professor of Environmental Law and Dispute Resolution at the University of Nairobi, Member of Permanent Court of Arbitration, Leading Environmental Law Scholar, Respected Sustainable Development Policy Advisor, Top Natural Resources Lawyer, Highly-Regarded Dispute Resolution Expert and Awardee of the Order of Grand Warrior (OGW) of Kenya by H.E. the President of Republic of Kenya. He is the Academic Champion of ADR 2024, the African ADR Practitioner of the Year 2022, the African Arbitrator of the Year 2022, ADR Practitioner of the Year in Kenya 2021, CIArb (Kenya) Lifetime Achievement Award 2021 and ADR Publisher of the Year 2021 and Author of the Kenya’s First ESG Book: Embracing Environmental Social and Governance (ESG) tenets for Sustainable Development” (Glenwood, Nairobi, July 2023) and Kenya’s First Two Climate Change Law Book: Combating Climate Change for Sustainability (Glenwood, Nairobi, October 2023), Achieving Climate Justice for Development (Glenwood, Nairobi, October 2023) and Promoting Rule of Law for Sustainable Development (Glenwood, Nairobi, January 2024)*

The United Nations estimates that over one billion people across the world do not have access to safe, clean drinking water, although this is a basic human need. This may be attributed to different problems and challenges which may range from water availability, supply and access, amongst others. Water, being mainly a public good commodity, is mostly vested in the state and hence public institutions are tasked with its management and distribution. However, over the years this has changed internationally, with more private players entering the scene in order to enhance efficiency.

It has been observed that when public companies entrusted with the supply of water in the vast majority of developing countries failed to make the infrastructural investments required to provide water services to all, reforms involving commercialization of water services—the application of principles of cost recovery and profit maximization—and private sector participation were proposed as a way to increase investment in water delivery networks, improve access for all sectors of the population and reduce the burden of public services on government finances.

It has been argued that water should be treated “as an economic good”, a proclamation that originated in the International Conference on Water and the Environment (Dublin Conference 1992). Managing water as an economic good is said to be an important way of achieving efficient and equitable use, and of encouraging conservation and protection of water resources. It has however been argued that water’s characteristics that make it difficult to marketize include its status as a public good, a natural monopoly, a merit good and/or basic (human) right and a scarce resource.

The UN Committee on Economic, Social and Cultural Rights, in their publication, General Comment No. 15: The Right to Water (Arts. 11 and 12 of the Covenant), asserts that water is a limited natural resource and a public good fundamental for life and health. Furthermore, the human right to water is indispensable for leading a life in human dignity, and it is a prerequisite for the realization of other human rights. According to the Committee, the human right to water entitles everyone to sufficient, safe, acceptable, physically accessible and affordable water for personal and domestic uses. An adequate amount of safe water is necessary to prevent death from dehydration, to reduce the risk of waterrelated disease and to provide for consumption, cooking, personal and domestic hygienic requirements.

The right to water falls within the category of guarantees essential for securing an adequate standard of living, particularly since it is one of the most fundamental conditions for survival. It is also inextricably related to the right to the highest attainable standard of health and the rights to adequate housing and adequate food. Priority in the allocation of water must be given to the right to water for personal and domestic uses, and also to the water resources required to prevent starvation and disease, as well as water required to meet the core obligations of each of the Covenant rights.

The foregoing assertions by the UN Committee on Economic, Social and Cultural Rights have been captured in the Constitution of Kenya which provides that every person has the right— to the highest attainable standard of health, which includes the right to health care services, including reproductive health care; to accessible and adequate housing, and to reasonable standards of sanitation; to be free from hunger, and to have adequate food of acceptable quality; to clean and safe water in adequate quantities. Section 43(2) of the Water Act provides that the use of water for domestic purposes shall take precedence over the use of water for any other purpose, and the Authority may, in granting any permit, reserve such part of the quantity of water in a water resource as in its opinion is required for domestic purposes.

These are important provisions considering that providing access to water not only for domestic uses, but also for growing, preparing and selling food and other products that are vital for family welfare and food security is a key element in the realisation of the right to water as a part of the right to food, the right to health, and the right to an adequate living standard. The Act also provides that nature and degree of water use authorized by a permit should be reasonable and beneficial in relation to other persons who use the same sources of supply or bodies of water.

The International Conference on Water and the Environment which resulted in the Dublin Statement on Water and Sustainable Development came up with four guiding principles which should inform water governance at both international and national levels. The fourth Dublin principle on water is that water has an economic value in all its competing uses and should be recognized as an economic good. The argument has been that this principle should be interpreted to mean that water should be provided by private companies and that consumers should pay the full cost of water provision (full-cost recovery), signaling a radical shift from the subsidized public provision of water that had previously been the norm in many parts of the world.

The Privatization and Commercialization of Water Resources in Kenya

In the water sector, one of the most common ways of bringing in the private sector is through concession agreements, via which the state, while retaining ownership, transfers the right of operating the water utility to a private company. Section 93(1) of the Water Act 2016 provides that a water services provider may enter into a public private partnership or public partnerships for the exercise and performance by another person of some or all of its functions as a licensee with respect to a part or the whole of its area of water service provision.

The advocates for private sector participation on the water and sanitation policy agenda for the South saw it as a means of achieving greater efficiency and expansion in the water and sanitation sector. This is because there is general agreement that public utilities have been too slow in extending access to services and that they can be inefficient and corrupt, and increasing private sector involvement was meant to address these problems. It has been argued that under the right circumstances, it may well be possible for private sector participation to improve efficiency and increase the financial resources available for improving water and sanitation services. However, it can also direct finance to urban centres and neighbourhoods that are already comparatively well served, further polarize the politics of water and sanitation (especially when prices increase) and create new regulatory problems.

Much depends on the way privatization is developed and the local context. This seems to be the approach that was adopted by the water Act 2016, with much emphasis being on the provision of water to the urban areas and extension to the rural areas only being a matter left to the licensing authorities. For instance, the Water Act 2016 empowers county governments to establish water services providers, which may be a public limited liability company established under the Companies Act, 2015 or other body providing water services as may be approved by the Regulatory Board.

In establishing a water services provider, a county government must comply with the standards of commercial viability set out by the Regulatory Board. A water services provider shall be responsible for- the provision of water services within the area specified in the licence; and the development of county assets for water service provision. The Act also provides that a county water services provider may with the approval of the relevant licensing authority extend water services to rural or developing areas. The Act further provides that nothing in its provisions should deprive any person or community of water services on the grounds only that provision of such services is not commercially viable.

The Act also requires every county government to put in place measures for the provision of water services to rural areas which are considered not to be commercially viable for the provision of water services. The measures referred to in subsection (2) shall include the development of point sources, small scale piped systems and standpipes which meet the standards set by the Regulatory Board and which may be managed by the Water community associations, public benefits organizations or a private person under a contract with the county government. Further, in order to implement its obligations under this section, a county government should formulate and submit annually to the Regulatory Board and to the Cabinet Secretary, a five year development plan incorporating an investment and financing plan for the provision of water services in the rural areas referred to subsection (1) within its area of jurisdiction. The Cabinet Secretary is also to provide technical, financial and other assistance to a county government to enable the county government to discharge its responsibility under this section.

Under the Water Act 2016, there is also established a water sector financing institution to be known as the Water Sector Trust Fund.75 The object of the Fund is to provide conditional and unconditional grants to counties, in addition to the Equalisation Fund and to assist in financing the development and management of water services in marginalized areas or any area which is considered by the Board of Trustees to be underserved including- community level initiatives for the sustainable management of water resources; development of water services in rural areas considered not to be commercially viable for provision of water services by licensees; development of water services in the under-served poor urban areas; and research activities in the area of water resources management and water services, sewerage and sanitation.

It has been argued that, in practice rather than in theory, many stakeholders, including water users associations, non-governmental organizations (NGOs) and local communities, may build on local knowledge and networks, but may often lack support, funds, institutional and technical capacities or even membership to significantly contribute to the management of water resources. It is therefore a laudable move to have in place a fund that seeks to community level initiatives and ensuring that all persons have access to clean and safe water in adequate amounts, as a matter of right. This is especially important in areas that may have been sidelined on the basis of not being commercially viable for provision of water services by licensees.

The fund however needs to be scrupulously guarded against misappropriation and diversion by self-seeking stakeholders, if the above objectives are to be realized. It is noteworthy that most of the institutions established under this law comprise of professionals and even where the Act provides for consultations, the same is provided for in simplistic terms. The main players in the water governance matters are the government organs and private sector players, with little or no role for communities who may usually be the most affected by policies and state actions on water.

It has been suggested that by directly involving users of water in the governance of the resource, the knowledge on which this participation is based may be more meaningful than otherwise may have been possible since local stakeholders may often be more familiar with the peculiarities of local economic, social, cultural and environmental situations. Further, it might also mean that users involved may accept the regulations as appropriate and consistent with their values and interests and may also be more willing to comply with them.

This is an extract from Kenya’s First ESG Law Book: Embracing Environmental Social and Governance (ESG) tenets for Sustainable Development” (Glenwood, Nairobi, July 2023) by Hon. Prof.  Kariuki Muigua, OGW, PhD, Professor of Environmental Law and Dispute Resolution, Senior Advocate of Kenya, Chartered Arbitrator, Kenya’s ADR Practitioner of the Year 2021 (Nairobi Legal Awards), ADR Lifetime Achievement Award 2021 (CIArb Kenya), African Arbitrator of the Year 2022, Africa ADR Practitioner of the Year 2022, Member of National Environment Tribunal (NET) Emeritus (2017 to 2023) and Member of Permanent Court of Arbitration nominated by Republic of Kenya and Academic Champion of ADR 2024. Prof. Kariuki Muigua is a foremost Environmental Law and Natural Resources Lawyer and Scholar, Sustainable Development Advocate and Conflict Management Expert in Kenya. Prof. Kariuki Muigua teaches Environmental Law and Dispute resolution at the University of Nairobi School of Law, The Center for Advanced Studies in Environmental Law and Policy (CASELAP) and Wangari Maathai Institute for Peace and Environmental Studies. He has published numerous books and articles on Environmental Law, Environmental Justice Conflict Management, Alternative Dispute Resolution and Sustainable Development. Prof. Muigua is also a Chartered Arbitrator, an Accredited Mediator, the Managing Partner of Kariuki Muigua & Co. Advocates and Africa Trustee Emeritus of the Chartered Institute of Arbitrators 2019-2022. Prof. Muigua is a 2023 recipient of President of the Republic of Kenya Order of Grand Warrior (OGW) Award for his service to the Nation as a Distinguished Expert, Academic and Scholar in Dispute Resolution and recognized among the top 5 leading lawyers and dispute resolution experts in Band 1 in Kenya by the Chambers Global Guide 2024 and was listed in the Inaugural THE LAWYER AFRICA Litigation Hall of Fame 2023 as one of the Top 50 Most Distinguished Litigation Lawyers in Kenya and the Top Arbitrator in Kenya in 2023.

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