Engaging Local Communities in Blue Carbon Projects: The Legal Framework in Kenya

Kenya’s environmental law landscape has undergone a significant transformation in the past year, providing greater clarity on the development and management of blue carbon projects that restore and protect Kenya’s marine and coastal ecosystems, including the country’s mangrove and sea grass habitats. This shift followed the amendment of the Climate Change Act, 2016 (the “Act”) in September 2023, which established a framework for carbon market regulation, and the subsequent gazettement of the Climate Change (Carbon Market) Regulations (the “Regulations”) in May 2024, operationalising the Act.

Whereas blue carbon projects have been operating in Kenya long before these legislative changes, with some projects advancing towards the sale and trading of blue carbon credits, this has often operated on the basis of general laws on land and forests, without specific regulation on the generation and trade of these carbon credits or stipulated mandatory guidelines on project proponent engagement with local communities. Notable ongoing projects include Mikoko Pamoja and Vanga Blue Forest, located within the mangrove ecosystems of the Gazi and Vanga seascape. Mikoko Pamoja, the world’s first blue carbon project to trade in blue carbon credits, generates sales of 3,000 tCO₂-equivalent from mangroves and contributes over KES3 million annually to local communities. On the other hand, Vanga Blue Forest serves as an expansion of Mikoko Pamoja, generating 6,000 tCO₂-equivalent, and contributing over KES6 million to local communities. The projects restore degraded mangrove ecosystems through community-led monitoring against illegal harvesting and the use of local expertise to plant mangrove seedlings, and the carbon revenue is used to fund and support community development projects.

The participation of local communities in blue carbon conservation efforts has been founded on the participatory governance model for public forests in Kenya. Blue carbon forests are public land as the Constitution of Kenya recognises all land between the high and low water marks as public land, vested in and held by the national government in trust for the people of Kenya. This ties in with earlier pronouncements such as Proclamation No 44 of 30 April 1932, and later Legal Notice No 174 of 20 May 1964, which is clear that all land between high water and low water marks (ordinary spring tides) are mangrove areas, and they are declared government reserve forests.

According to Kenya’s principal forest law, public forests are under the management of the Kenya Forest Service (KFS) and subject to any user rights granted to others by the KFS. Public forests, including mangroves, may therefore be managed through licences, concessions, contracts, or joint agreements issued by KFS to project proponents, and registered community forest associations (CFAs) may apply to the KFS for permission to participate in the conservation and management of a public forest through a management agreement, provided that no prior licence or agreement exists in relation to that forest.

The Act and the Regulations present new requirements for how project proponents engage with communities going forward, and how benefit sharing is to be carried out in blue carbon projects. These considerations are set out below.

Classification of blue carbon projects in Kenya

The Regulations categorise carbon projects into land- and non-land-based projects, defining land-based carbon projects as “any project that involves activities related to land use, land management, and ecosystem conservation or restoration aimed at reducing greenhouse gas emissions or enhancing carbon sequestration”. Blue carbon projects fall within this definition as they sequester carbon dioxide through marine and coastal ecosystem land-use practices. The Regulations further categorise carbon projects as either public, private or community. Public carbon projects are defined as those that are carried out on public land, and this applies to blue carbon projects.

Benefit-sharing requirements

Project proponents of carbon projects on public land must make an annual social contribution to communities. This annual social contribution is defined as the sharing of annual benefits accruing from carbon projects and is the mechanism through which communities receive benefits. The annual social contribution must be at least 40% for land-based projects.

This contribution is to be included, managed, and disbursed through a Community Development Agreement (CDA) as outlined in the Fourth Schedule to the Regulations. Where a project spans across multiple communities or counties, the project proponent must establish a separate CDA with each of the communities. The modalities of disbursement and management of the share of benefits due to the community are set out in the CDA. The CDA is governed by the Community Development Committee (the “Committee”), which is supported by a Monitoring, Evaluation and Reporting Sub-committee and a Grievance Resolution Sub-committee.

The Committee, which is comprised of representatives from the county government, national government, women, elders and youth from the communities, civil society, marginalised groups, persons with disabilities, and the project proponent, is tasked with facilitating continuous engagement and serving as the link between the community and the project proponent on relevant issues pertaining to community development.

Additional functions of the Committee include providing a platform for the community to ensure project revenues align with local development priorities, giving public notice ahead of consultations, reviewing and aligning project action plans with government priorities, maintaining transparent records, and preparing quarterly reports detailing project status and disbursements.

The monitoring, evaluation and reporting sub-committee is comprised of the chairperson, secretary and five additional committee members. Functions of the monitoring, evaluation and reporting sub-committee include monitoring and evaluating project progress according to a monitoring sheet, overseeing Agreement activities, and ensuring projects are implemented per contractual specifications and schedules. It provides quarterly written and oral reports in accessible languages, guides project planning, implementation, and management, addresses significant issues affecting project implementation, and ensures adequate community consultation throughout the process.

Similar to the monitoring evaluation and reporting sub-committee, the grievance resolution sub-committee is comprised of the chairperson, secretary and five additional committee members. The sub-committee is responsible for settling disputes between the parties related to the Agreement, as well as addressing any other grievances raised by the project proponent or community. It manages these issues following the procedures outlined in Schedule One and develops user-friendly forms for lodging grievances, ensuring an accessible and structured process for resolving matters under the Agreement.

When addressing any disputes arising with respect to a blue carbon project, proponents must first follow the dispute resolution mechanism outlined in the CDA, with resolution required within 30 days from the date of lodging the dispute. If unresolved within this period, the dispute will proceed to the National Environmental Tribunal (NET), and any appeals of NET’s decisions can then be taken to the Environment and Land Court.

Adherence to social and environmental safeguards

Blue carbon projects in Kenya must adhere to strict environmental and social safeguards under the Act and Regulations to ensure they deliver maximum benefits to local communities and the environment, without causing harm. For instance, when applying for their carbon project approval, blue carbon project proponents must not only prepare a concept note and project design document (PDD) detailing how the project will maintain environmental integrity but must also complete an environmental and social impact assessment (ESIA) per the Environmental Management and Coordination Act’s requirements.

Blue carbon projects must also adhere to sector-specific standards, with REDD+ projects requiring a REDD+ Safeguards Assessment, although the procedures for this are still pending clarification. Land-based blue carbon projects on community land must also secure and document free, prior, and informed consent (FPIC) to proceed.

Compliance with these safeguards is essential, as failure to adhere may result in project cancellation by the DNA, especially if environmental or health risks emerge, or if misleading information has been submitted. Blue carbon project proponents may also face liability for any environmental or health-related damage resulting from the implementation of their blue carbon projects.

The Way Forward

Local communities have a critical role to play in the conservation of coastal and blue carbon ecosystems and should be involved at the project design and implementation stage of a carbon project. All new blue carbon projects are required to comply with the Regulations from the onset of the Regulation’s gazettement; however, projects already operational in Kenya before the gazettement of the Regulations (Ongoing Carbon Projects) must comply within two years from the commencement date of the Regulations. Whereas there is a transition framework that considers whether a project has been operational or not prior to the Regulations coming into effect, all blue carbon projects, whether new or ongoing, are best advised to take early steps to map and identify the communities that they will enter into CDAs with, carry out the necessary FPIC and stakeholder engagement processes to ensure any necessary negotiations/renegotiations are done for communities to have at least 40% of the annual benefits from the carbon project being allocated to them, and continuously operate in accordance with the terms of the CDA, the Act and the Regulations.