Court stops NEMA from enforcing EPR compliance through retailers pending constitutional case
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The Environment and Land Court has barred the National Environment Management Authority (NEMA) from requiring retailers to enforce manufacturers’ compliance with the Extended Producer Responsibility (EPR) regulations until a constitutional petition challenging the directive is heard and determined.
In a ruling, the court held that NEMA cannot shift its responsibility of monitoring and enforcing compliance with environmental laws to supermarkets and other retailers before the legal dispute is resolved.
The case will now proceed to a full constitutional hearing, where the court will determine whether the environmental regulator can require one private business to enforce another company’s legal obligations.
Under the Extended Producer Responsibility (EPR) regulations, manufacturers and importers of packaged goods are required to finance the collection, recycling and proper disposal of waste generated by their products.
Justice Charity Oluoch ruled that the Retail Trade Association of Kenya (RETRAK) had demonstrated that the requirements imposed on retailers were unreasonable.
“The Retail Trade Association of Kenya has demonstrated that requiring private retail employees to evaluate and verify complex NEMA Producer Registration Certificates, Plastic Packaging Licences and monthly Producer Responsibility Organisation (PRO) payment clearances, particularly without access to a centralised, searchable official NEMA database, is unreasonable,” the judge ruled.
Earlier this year, NEMA directed retailers not to stock products unless suppliers could prove they had registered as producers, joined an approved Producer Responsibility Organisation (PRO), obtained the required plastic packaging licences and remained up to date with mandatory EPR payments.
The directive effectively required supermarkets to verify whether manufacturers supplying thousands of products had complied with environmental regulations before placing the products on their shelves.
Retailers argued that they lacked both the authority and the information needed to carry out such verification.
Justice Oluoch also found that the threatened enforcement measures, including the closure of retail stores, seizure of goods and disruption of business operations, raised constitutional concerns.
“Additionally, the alleged closure of retail stores, the halting of distribution, and the seizure of inventory as a punitive measure against downstream retailers infringe the Constitution, which safeguards the sacrosanct right to property,” she said.
Court documents show that during a consultative meeting held in December, attended by NEMA officials and representatives from major supermarket chains including Naivas, Quickmart, Carrefour and Chandarana, retailers raised concerns over the practicality of verifying compliance for thousands of products supplied by hundreds of manufacturers.
The retailers also sought protection from penalties arising from manufacturers’ non-compliance and requested a transition period to allow implementation of the new regulations.
According to RETRAK, NEMA agreed during the meeting to suspend enforcement temporarily, publish an updated register of compliant producers and work with retailers on a phased withdrawal of products supplied by non-compliant manufacturers.
The parties also agreed that requiring retailers to obtain every supplier’s latest PRO payment clearance before stocking products was impractical and that a more workable solution would be developed.
However, RETRAK told the court that the promised producer register was never published, despite repeated assurances from the regulator.
Instead, the association said NEMA later warned retailers that they could face prosecution if they continued stocking products supplied by manufacturers whose compliance could not be verified.
The retailers argued that without an official database, they had no practical way of distinguishing compliant manufacturers from non-compliant ones because they receive finished products and have no access to NEMA’s internal compliance records.
According to RETRAK, fewer than five percent of producers had complied with the new EPR requirements, causing some manufacturers and suppliers to suspend deliveries for fear of enforcement action.
The association estimated that the disruption was costing the formal retail sector approximately Sh500 million in lost sales every day due to delayed deliveries, disrupted supply chains and spoilage of perishable goods.
In granting temporary orders, Justice Oluoch said there was a strong argument that NEMA had transferred its statutory enforcement role to retailers, even though supermarkets neither manufacture nor import the products at the centre of the dispute.
The conservatory orders will remain in force until the constitutional petition challenging the regulator’s directive is heard and determined.