AFA TEA DIRECTORATE IMPLEMENTATION OF VOLUNTARY SUSTAINABILITY CERTIFICATION

AFA - TEA DIRECTORATE IMPLEMENTATION OF VOLUNTARY SUSTAINABILITY CERTIFICATION (VSC) IN THE KENYA TEA INDUSTRY: STATUS AND CHALLENGES by WILLY K MUTAI 27 TH JUNE 2019

MANDATE OF THE AUTHORITY q The general mandate of Agriculture and Food Authority –Tea Directorate as guided by the Crops Act 2013, and Agriculture and Food Authority mission is to Develop, Promote & Regulate the Tea Industry to profitability and sustainability.

Tea industry value chain players in Kenya • KTDA – Managing 68 small scale holders Tea Factories • KARLO –TRI- Research on Tea • KTGA- Association for large scale • EATTA- Tea Auction- Auction organizer • NTZDC- Buffer zone on Gazette Forest area and manage 2 Factories

VOLUNTARY SUSTAINABILITY CERTIFICATION BACKGROUND: A Tea taskforce was commissioned in August 2015 to investigate the challenges facing the Tea Industry and come up with recommendations to Improve Tea Industry Performance. q The report was adopted in 2016. q Implementation started in 2017.

VOLUNTARY SUSTAINABILITY CERTIFICATION BACKGROUND: TASKFORCE REPORT 2016 Among the challenges identified by the Taskforce report included; q Multiplicity of international standards. q There exists many International market driven/voluntary certification Standards including Fair Trade, Rain Forest Alliance , UTZ, Ethical Tea Partnership among others which the Tea Industry is required to implement to access certain international markets.

VOLUNTARY SUSTAINABILITY CERTIFICATION q The stakeholders indicated that implementation of these Standards is quite costly and there is duplication of requirements which are similar across these standards. q Implementing these Standards separately is time and effort consuming.

VOLUNTARY SUSTAINABILITY CERTIFICATION RECOMMENDATION BY TASKFORCE REPORT q To deal with this challenge, the government to explore ways of harmonizing these standards. q Have the tea stakeholders negotiate with scheme owners and certification agents. q This will cut on - cost of implementation, - time taken - and harmonize duplication of requirements in these Standards.

VOLUNTARY SUSTAINABILTY CERTIFICATION • Voluntary Sustainability Certification (VSC) has become increasingly important in international commodity sectors and their growth and impact in the Kenyan Tea Sector is a clear example. • However, VSC have shown both positive aspects and challenges in the Tea sector.

VOLUNTARY SUSTAINABILTY CERTIFICATION • Therefore, it is critical to identify and address the opportunities and challenges VSC present. • Stakeholder consultation in the Kenyan Tea sector identified several key issues related to VSC, including: costs of certification (fixed and variable), relevance of certification requirements to the local situation, effectiveness of auditing processes, interest in national standards, and limited demand for certified product.

VOLUNTARY SUSTAINABILITY CERTIFICATION q STATUS ON INDUSTRY IMPLEMENTATION: § As at current most of the tea producers / Tea Factories have implemented Rainforest Alliance, Fairtrade, Utz, Koshaer and ETP certifications. § Tea producers have fully implemented this market driven certifications as follows; 2002 -Fairtrade was introduced to the tea sector, 2006 –RA was introduced, 2009 UTZ was also introduced progressively. § Over time the VSC have merge to address the producers concern e. g RA and UTZ in 2018. § The current number of certification are listed:

Voluntary Sustainability certification in the sector • Tea producers combined have a total of 93 RA certification, 25 Fair trade, 3 Organic certification, 6 UTZ , 2 Koshaer certification in Kenya Tea sector. • Food safety management system (ISO 22, 000) stands at 75 Tea factories

VSCs help to address issues such as • Legal and institutional framework • Productivity & Sustainability • Financial and good governance reporting systems • Worker welfare/ social accountability, occupational health & safety • Environment protection & conservation

VSC benefits • Premium prices that is paid back to farmers and workers, which the funds are used in Community projects like schools, Water projects, Dispensaries • Environmental Conservation • Exposure to the tea market or Tea market access on RA Certified tea • Social protection of workers, farmers or children

Cost analysis of certification in Kenya scenario • To Certify a tea factory the total cost ranges from Ksh 384, 000. 00 to Ksh 420, 000. 00 (fixed and variable costs) for medium crop production tea factories (5 M GL to 15 M GL) for one Scheme. • The total cost for voluntary sustainable certification for Tea Sector in Kenya per year ranges from Ksh 93, 000. 00 to Ksh 139, 500, 000. 00 for Two scheme of VSC.

VOLUNTARY SUSTAINABILITY CERTIFICATION Addressing the concerns raised by Tea Sector • AFA TD initiated the negotiation meetings VSC scheme owners for Merge and harmonization initiatives. q Tea Directorate held a meeting on 6 th December 2017 with Scheme-owners below; q Rainforest Alliance q Fairtrade Flo q Utz Certified q Ethical Tea Partnership – ETP

VOLUNTARY SUSTAINABILITY CERTIFICATION The meeting noted that; - § The cost of Certification to these Voluntary Standards is too high to producers/ factories/processors, § The Standards are overlapping in nature with similarities which can be audited through combi- audits instead of conducting separate audits. § Its time consuming planning for the similar audits in the year which not efficient to the producers/factories.

VOLUNTARY SUSTAINABILITY CERTIFICATION The meeting further noted that; - (i) there is need to explore possibilities to have certification and surveillance audit schedules be synchronized by conducting combine audits.

VOLUNTARY SUSTAINABILITY CERTIFICATION On 15 th February 2018, Tea Directorate held a meeting with certification agents below; - q SGS q Africert q DNV- G. L The meeting discussion were as follows: 1) There is possibility of conducting combi-audits to save on time, resources and finances and reduce duplicity, 2) How the Industry can benefit from these companies among others by conducting combi-audits.

• WORKSHOP ON SUSTAINABILITY & VOLUNTARY CERTIFICATION IN KENYA SECTOR were Held on 6 TH March 2019 in Nairobi • Developed an action plan to address opportunities and challenges on implementation of VSC in the Tea Sector • The out comes of the workshop were as listed:

VOLUNTARY SUSTAINABILITY CERTIFICATION THE TEA INDUSTRY CODE OF PRACTICE - Its important to note that the Kenya Tea Industry has a Standard – The Kenya Tea Industry Code of Practice KS: 2128 which provides for: q GAPS – Good agricultural Practices q GMPS - Good manufacturing Practices q GTP - Good Trade Practices q This Code standard requirements of VSC’s. meets most of the

VOLUNTARY SUSTAINABILITY CERTIFICATION WAY FORWARD q explore possibility for harmonizing the implementation of VSC and address challenges raised by the tea stakeholders.

VOLUNTARY SUSTAINABILITY CERTIFICATION WAY FORWARD q Creation of a National Tea Policy that incorporates all aspects of Tea Value chain , to provide guidelines on management, farming, marketing and distribution of tea product. This would contribute to food security in line with the President’s Big Four Agenda and the Sustainable Development Goals (SDGs).

q Working with tea producers, marketers and other value chain actors to create product traceability and establish sustainable markets for Kenyan tea.

q Regional Coordination could bring value and savings by having common standards for the East African Community. This would make tea from the East African region more competitive globally and increase income to the tea producers.

…. Thank you all…. All enquiries to infotea@afa. go. ke or wmutai@afa. go. ke …Any time is tea time. . .