Analysis of the Influence of Mncs on Environmental Policy of Kenya

Abstract

The growth of Multinational Corporations (MNCs) in developing countries is becoming a challenge, especially in relation to the influence they are having on the state policies. MNCs control core businesses in mineral resource survey and exploitation as well as in other industrial sectors, due to their enormous financial strength and technical know-how to operate such activities. Developing states have been able to grow their wealth through the revenue collection, creation of employment, and development of infrastructure; however there is a negative aspect to this relationship since MNCs’ activities shape lots of other spheres for instance the social, environmental and political balance of the society. This study analyses the influence of multinational corporations on environmental policy in Kenya. Whereas the discourse recognizes the reality that MNCs spot in the international domain cannot go away, this study provides reflections on the key challenges that the growth of MNCs pose environmental policies; the impact their activities have on environmental sustainability; and what measures MNCs have in place to ensure environmental sustainability. Kenya is still progressing with regards to issues of environmental conservation; the question that is not being asked is what makes Kenya an attractive destination for investors? And what does Kenya need to compromise in return to enjoy the benefits of this economic growth. As mentioned on the background information, MNCs prefer to operate in those states that have lax policies as compared to the policies in their home states which are stricter. It is from this premise that this research analysed whether there is some level of influences MNCs have on Kenya, and if these influences have any role on Kenya’s Environmental Policy and what that means to environmental sustainability of Kenya. The study applied case study research design. Both probability and non-probability sampling methods were used due to the diversity of respondents which consisted of; NEMA, MNCs, Ministry of environment and forestry, state department of trade, and the local communities. The study used questionnaires and interviews for data collection and the data collected was analysed by means of Statistical Package for Social Scientists (SPSS) for quantitative data and content analysis for qualitative data. This research was steered by the neoclassical externality theory of environmental economic theory. After the analysis of the information collected in the study, majority of the respondents agreed that indeed MNCs play a significant role in the economy; however, there are major negative impacts of their activities on the environment. The study also established that MNCs have in place measures that promote environmental sustainability, and that most of the measures can be seen in the nature of corporate social responsibility initiatives. Finally the study was able to establish that MNCs indeed have some level of influence on environmental policy in Kenya. The window for influence is created during the policy formulation phase since Multinational corporations are permitted by law to take part in the policy development discussions and hence their inputs plays a major role just as other stakeholders mentioned in the study. The study found that most corporations are normally more concerned about what these policies would mean to their businesses hence, they try to ensure that the policy being formulated is friendly and beneficial to their operations. Amongst other recommendations, the study recommended that further studies be done to determine how national environmental policy influences individual corporate environmental management policy and how this can improve compliance.