Coca-Cola challenges proposed plastic tax in Kenya as industry panics over Eco Levy

You are currently viewing Coca-Cola challenges proposed plastic tax in Kenya as industry panics over Eco Levy

Coca-Cola, the world’s leading plastics polluter, has come out to strongly oppose the Kenyan government’s proposal to introduce a plastic tax on its products. The tax, proposed in the 2024 Finance Bill as part of an Eco Levy which also seeks to address e-waste pollution, would require those who introduce plastics into the Kenyan market to pay a fee of 150 Kenya Shillings per kilo introduced, if passed by parliament.

This week, Coca-Cola Kenyan senior managers, led by Communications and Sustainability Director John Mwendwa, voiced strong objections to the levy at a public hearing being run by the National Assembly Finance and Planning Committee. Mr. Mwendwa argued that the Eco Levy constitutes double taxation since the company already pays fees to a Producer Responsibility Organization as required by the Sustainable Waste Management Act of 2022.

Earlier in the week, the company met with the Ministry of Environment, Forestry, and Climate Change Principal Secretary, Dr. Eng. Festus Ng’eno. This meeting, seen as a lobbying attempt, prompted Dr. Ng’eno to affirm on his X (formerly Twitter) account that the government is committed to fully implementing the Sustainable Waste Management Act.

Joyce Gachuhi, the CEO of the Packaging Producer Responsibility Organization (PAKPRO), while speaking on Spice FM, stated that the plastic tax proposal came to the industry as a shock, citing past cordial cooperation with National Environment Management Authority (NEMA) on implementing Extended Producer Responsibility. Her views were echoed by James Odongo, CEO of the Kenya Producer Responsibility Organization (KEPRO), who repeatedly called the proposal “outrageous” during a public webinar for their members. The two Producer Responsibility Organizations represent about 1000 producers in the country.

The plastic tax is the government’s first attempt to price plastic pollution, following delays in publishing Extended Producer Regulations which would shed more clarity on the matter. The proposed levy of 150 Kenya Shillings per kilo is significantly higher than the current fees collected by Producer Responsibility Organizations, which range from 0.5 to 10 shillings per kilo. Drink corporations and their lobby groups argue the levy is too steep, with some suggesting it could increase commodity prices by up to 150%.

However, research indicates this may not entirely be true. For example, 32 empty 500ml plastic bottles weigh about a kilo, meaning the cost increase per bottle of beverage would be around 7 percent or 5 Kenya Shillings if the 150 shilling tax per kilo is passed on to consumers. The increase could be significantly lower for other plastic packaged products since the packaging per item are only a fraction of a kilo. So it is not true that a kilo of salt is going to rise by 150 Kenya Shillings as some producer representatives have claimed in public facing scare assertions.

It’s however important to note that Coca-Cola does more than just sell beverage drinks in Kenya – they also sell plastics to the people! They make more profits from selling beverages in plastic bottles than in glass bottles. A 500ml of Fanta, for example, in a returnable glass bottle currently retails for 50 Kenya Shillings, while the same in a plastic bottle goes for 70 Kenya Shillings, implying the empty plastic bottle is sold to the Kenyan consumers for 20 Kenya Shillings. Remember that Coca-Cola also have to incur a cost on picking up the glass bottles.

An Eco-tax on plastic bottles would therefore affect their bottom-line. That could be the biggest reason why the global corporation and the business member organizations to which they belong have come out guns blazing to try and block the government proposal.

The corporation, despite having adopted Deposit Return Scheme in some jurisdictions in the Global North for their plastic bottles, they have shown no intention of supporting this solution in countries like Kenya, in spite of evidence of recovery rates of over 90 percent in jurisdictions that have adopted this.

Instead, Coca-Cola and her partners continue to blame consumer behavior for the beverage bottle pollution following a well tested corporate playbook that the corporation has employed over the decades to slow down legislative solutions to this problem. In this playbook, first they DENY there is a problem, then they DISTRACT authorities attention by placing the blame somewhere else, in this case consumers or weak waste infrastructure, and when that fails they then DELAY legislation by lobbying and finally they DERAIL established legislation.

In the Kenyan case they also argue that the collection of their plastics from the environment not only creates employment for waste pickers and but also business for the recycling industry. Speaking on Spice FM, Joyce Gachuhi even claimed without evidence that 10 jobs are created every hour in the waste business in Kenya. KEPRO also follows the same playbook. In the last few months and with support from organizations like the Danish Industries, they have developed a Waste Collectors Toolkit which has become a key component of their Consumer Led Transformation project.

What this means is that waste pickers and consumers have become pawns in a game of chess between the plastic industry in the country and the Government of Kenya. We may, however, have reached the moment of truth. On one hand we now have an industry hellbent on paying as little as a ridiculous half a Kenyan Shilling Kenya per kilo of plastics in producer responsibility fees to Producer Responsibility Organizations they control as their contribution for introducing problematic materials into the environment which will take many decades to degrade, and on the other hand we have a government that is now proposing a 150 Kenya Shilling plastic tax per kilo.

While some of us agree on the concerns of a lack of government framework to effectively operationalize the new tax, the National Assembly’s decision on the Eco Levy proposal is something we will watch closely. If the government majority-led parliament accedes to corporate demands, it could be seen as a major setback for Kenya’s efforts to combat plastic pollution, especially considering the global praise for Kenya’s landmark 2017 ban on plastic carrier bags. Nothing comes close to that monumental moment in our plastic pollution advocacy history as a nation. We only have days to find out whence we shall go! END

ABOUT THE AUTHOR

Betterman Simidi Musasia

Founder & Patron, Former CEO, Clean Up Kenya

Betterman is a sustainable public sanitation advocate and a pollution control evangelist. In 2015, after becoming extremely tired of seeing all the trash in Kenyan neighborhoods and hearing the authorities fake promises to clear the mess, he sold his trucking business to establish Clean Up Kenya. Today, the organization is a leading national sustainable public sanitation advocacy brand. In September 2020, he stepped down as Clean Up Kenya Chief Executive Officer and currently serves as Founder and Patron.