An Act of Parliament to establish a system of benefit sharing in natural resource exploitation between resource exploiters, the national government, county governments and local communities.
| PART I - PRELIMINARY | ||
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| PROPOSED PROVISION FOR AMENDMENT | PROPOSED AMENDMENT | OUR COMMENTS |
| Clause 2 Interpretation | “affected county” means a county in which a natural resource is exploited. | This definition ensures that counties containing natural resources receive their fair share of benefits derived from exploitation of the natural resources. |
“affected entity” means an organization or person involved in the exploitation of a natural resource to which this Act applies. | An affected entity is involved in the exploitation of a natural resource and in turn, will receive benefits as agreed with the affected county in the benefit sharing agreement. |
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“benefit” means any gains, proceeds or profits from the exploitation of natural resources. | These are the benefits that will be distributed to the affected county (40% of the benefits) for developing local community projects as indicated in clause 26 of the Bill. |
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“benefit sharing” means the sharing of any benefits arising from the exploitation of natural resources in a fair and equitable manner. | Benefit sharing provides funds for the local community. These funds can be used to invest in infrastructure projects, social services, education, healthcare, and economic development programs, leading to improved livelihoods and quality of life for the local community. |
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“benefit sharing agreement” means an agreement on the manner in which revenue accruing from the exploitation of natural resources shall be shared out between an affected entity and a county. | We propose the addition of the words “an affected” immediately before the word “county”. The rationale for this is that an affected entity will enter into a benefit sharing agreement with a county where the natural resource is being exploited. |
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“industrial fishing” means the exploitation of fishing resources: a. using an industrial or a semi industrial fishing vessel as provided under the Fisheries Management and Development Act; or b. by a foreign entity. | By including a provision relating to foreign entities in the definition, the Bill helps protect the interests of domestic fishing communities and local fisheries. Legislation targeting industrial fishing by foreign entities prevents overexploitation of fish stocks, preserves traditional fishing grounds and supports the socioeconomic wellbeing of local fishing communities. |
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“local community” means: a. people living in a ward within which a natural resource is situated; b. people displaced to make way for the exploitation of a natural resource. | The local community are the beneficiaries of the exploitation of a natural resource as benefits allocated to the affected county in clause 26(2) of the Bill will be used to develop local community projects that benefit the local communities. |
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“royalties” includes fees or payments by whatever name, paid by an affected entity for the exploitation or exploration of a natural resource in Kenya. | Royalties serve as compensation for granting affected entities the right to exploit natural resources in an affected county. |
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Clause 3 Application of the Act | This Act shall apply to the following natural resources: a. sunlight; b. surface and underground water; c. forests, biodiversity and genetic resources; d. wildlife resources; e. industrial fishing; f. wind; g. geothermal resources; h. minerals; and i. petroleum. | This clause provides a scope of the natural resources that will be governed by the Bill. |
Clause 6 Exemption from imposition of the Levy | The Cabinet Secretary for the time being responsible for the National Treasury may, on the recommendation of the Cabinet Secretary, provide, by notice in the Gazette, that: a. any income or class of income; or b. any person or category of persons, shall be exempt from the application of section 4 to the extent specified in the notice. | We propose that the criteria used by the Cabinet Secretary to determine if a person will be exempted from paying the Levy is included in this clause. This proposal enhances transparency as it creates a legal framework that the Cabinet Secretary will follow in determining whether a person can be exempted from paying the Levy. |
Clause 4 Guiding principles of benefit sharing | All persons shall be guided by the following principles in the performance of their functions under this Act: a. transparency and inclusivity; b. revenue maximization and adequacy; c. efficiency and equity; d. accountability and participation of the people; e. rule of law and respect for human rights of the people; f. sustainable natural resources management; and g. environmental protection and restoration. | Guiding principles provide clarity about the intent and purpose of the Bill. They help Parliament to articulate the fundamental values and goals the Bill aims to achieve, ensuring consistency in its interpretation and application over time. For paragraph (b), this principle encourages efficient utilization of natural resources and maximizes the potential benefits for all stakeholders. For paragraph (d), promoting the active participation of the people in the benefit-sharing process enhances democratic governance and ensures that decisions reflect the needs and priorities of the local community. |
PART II – ESTABLISHMENT AND MANAGEMENT OF THE BENEFIT SHARING AUTHORITY | ||
Clause 10 Purpose of the Fund | The purpose of the Fund shall be to provide funds for the development of affordable housing and associated social and physical infrastructure. Without prejudice to the generality of subsection (1), the Fund shall: a. facilitate the provision of funds for affordable housing and affordable housing schemes in the promotion of home ownership; b. provide low interest loans for the acquisition of affordable housing units within the approved affordable housing schemes; c. facilitate the development of affordable housing schemes in all counties; d. develop long term finance solutions for the development and off-take of affordable housing; e. provide funds for maintenance of any land or building, estate or interest therein, for any of the purposes of the Fund; and f. fund any other activities incidental to the furtherance of the objects of the Fund. | The addition of paragraph (b) is a good addition. Firstly, providing low-interest loans for the acquisition of affordable housing units promotes home ownership and helps individuals and families achieve housing security and stability. For paragraph (c), the Fund aims to facilitate the development of affordable housing schemes in all counties. This contributes to balanced regional development and reduces disparities in housing availability between urban and rural areas. For paragraph (d), developing long-term finance solutions for the development and off-take of affordable housing promotes sustainable housing development practices and ensures ongoing availability of funds for affordable housing projects. |
Clause 11 Allocations out of the Fund | The Board shall allocate out of the Fund: a. thirty percent of the monies to the National Housing Corporation for the development, maintenance, rehabilitation and off-take of affordable housing programmes and projects; b. thirty percent of the monies to slum upgrading, maintenance, rehabilitation and offtake of affordable housing programmes and projects under the Public Finance Management (Kenya Slum Upgrading, Low-Cost Housing and Infrastructure Trust Fund) Regulations 2006; c. thirty six percent of the monies to the State Department responsible for matters relating to affordable housing for the development, maintenance, rehabilitation and offtake of institutional housing programmes and projects approved by Cabinet; d. up to two percent to the collector for the collection of the Levy as may be approved by the Cabinet Secretary forie the time being responsible for the National Treasury on the recommendation of the Cabinet Secretary; and e. up to two percent of the monies to the Board for the administration of the Fund as may be approved by the Cabinet Secretary for the time being responsible for the National Treasury on the recommendation of the Cabinet Secretary. | By allocating specific percentages of funds to different agencies, the Board ensures that resources are directed towards targeted areas of affordable housing development, including maintenance, rehabilitation and slum upgrading. This focused utilization enhances the impact and effectiveness of the Fund's activities in addressing housing affordability challenges. Secondly, the allocation percentages reflect a balanced approach to addressing various aspects of affordable housing, including the development of institutional housing, slum upgrading and maintenance. This ensures that resources are distributed equitably across different priority areas, promoting balanced and inclusive development. |
Clause 5 Establishment of the Benefit Sharing Authority | There is established the Benefit Sharing Authority. The Authority shall be a body corporate with perpetual succession and a common seal and shall, in its corporate name, be capable of:’ a. suing and be sued; b. taking, purchasing or otherwise acquiring, holding, charging and disposing of movable and immovable property; c. borrowing or lending money; and d. doing or performing such other things or acts for the proper performance of its functions under this Act which may be lawfully done or performed by a body corporate. | The purpose of this clause is to give the Authority legal capacity to act in its own name. |
Clause 6 Functions of the Authority | The functions of the Authority shall be to: a. coordinate the preparation of benefit sharing agreements between an affected county and an affected entity; b. review and, where appropriate, determine the royalties payable by an affected entity engaged in natural resource exploitation; c. identify counties that are required to enter into a benefit sharing agreement under this Act in consultation with the respective county governments; d. oversee the administration of funds set aside for community projects to be implemented under a benefit sharing agreement; e. facilitate and monitor the implementation of a benefit sharing agreement entered into between a county government and an affected entity; f. conduct research regarding the exploitation and development of natural resource and benefit sharing in Kenya; g. determine appeals arising out of conflicts regarding the preparation and implementation of benefit sharing agreements; h. advise the national government on policy and the enactment of legislation relating to benefit sharing in resource exploitation; i. oversee the establishment of benefit sharing committees and forums established under this Act; j. ensure the proper and timely payment of funds to counties and local communities as provided under this Act; k. build the capacity of local communities in negotiations for benefit sharing and implementation of related projects; l. prepare national guidelines on benefit sharing in consultation with the relevant stakeholders; m. identify, in consultation with sector-specific organizations, incentives and benefits to promote the conservation of natural resources; n. promote value addition in natural resources; o. promote local content initiatives on the exploration and exploitation of natural resources under this Act; and p. promote the restoration of the environment after the exploitation of a natural resource in an affected county. The Authority may, in furtherance of its functions, collaborate with such other bodies or organizations within or outside Kenya as it may consider necessary for the better performance of its functions under this Act. The Authority shall have regard to the following in the performance of its functions: a. all existing law regulating the natural resources sector in Kenya; b. all existing arrangements for benefit sharing between local communities and an affected entity under any law in Kenya; and c. obligations imposed on Kenya under any international treaty or agreement relating to the exploitation of natural resources. | The functions of the Authority have been clearly stated to ensure that it does not perform tasks that are ultra vires. |
Clause 7 Board of the Authority | The management of the Authority shall vest in a Board which shall consist of: a. a chairperson appointed by the President with the approval of Parliament; b. the Principal Secretary responsible for finance or a designated representative; c. the Principal Secretary responsible for mining or a designated representative; d. the Principal Secretary responsible for petroleum or a designated representative; e. the Principal Secretary responsible for energy or a designated representative; f. two persons of opposite gender nominated by the Council of County Governors to represent such communities as the Council shall determine; g. one person nominated by a registered association representing a majority of members of county assemblies to represent local communities; h. one person nominated by an umbrella body representing the interests of the private sector in Kenya; and i. the Director-General appointed by the Board in accordance with section 16. The Chairperson shall be competitively recruited by the Public Service Commission and appointed by the President by notice in the Gazette. The Cabinet Secretary shall, with the approval of Parliament, appoint the persons nominated under subsection (1)(f), (g) and (h) by notice in the Gazette. In nominating and appointing persons as members of the Board, the nominating authorities and the Cabinet Secretary shall: a. have regard to: i. the principles of non-discrimination on the basis of gender, disability, youth and marginalized persons under the Constitution; and ii. the requirements of chapter six of the Constitution; and b. ensure that the nominations reflect the regional diversity of the people of Kenya. | Excluding the Director-General, the Board has an odd number of members who can vote during meetings. When there’s an even number of members who can vote, there’s a greater risk of deadlocks. This makes it difficult for the Board to make decisions, resolve conflicts or move forward with its agenda. An odd number ensures that there will always be a majority decision. Secondly, the addition of sub-clause (2) has the following benefits: a. a fair, transparent and competitive appointment process ensures that candidates are evaluated based on their qualifications, skills and experience. This helps to attract and select the most suitable individual, contributing to the overall effectiveness and efficiency of the Board; and b. this proposal ensures that appointments are done in a fair and transparent manner in accordance with the values and principles set out in the Constitution. Thirdly, the addition of sub-clause (4)(a)(ii) is a good proposal. Leadership and integrity principles ensure that the person possesses a strong commitment to ethical conduct. |
Clause 8 Tenure of office | The members of the Board other than the Director-General shall: a. hold office for a term of three years and shall be eligible for reappointment for one further term; and b. serve on a part-time basis. Paragraph (1)(a) shall not apply to Principal Secretaries who serve as members of the Board. | A fixed tenure provides stability to an organization by ensuring continuity in leadership and decision-making. It prevents frequent turnover and the associated disruptions that can occur with frequent changes in personnel. Secondly, individuals with a fixed tenure are accountable for their performance during that period. This accountability leads to increased focus and commitment to achieve the goals and objectives of the Board. Thirdly, knowing when a position will become vacant allows the Board to engage in effective succession planning. It provides an opportunity to identify and groom potential successors. This ensures there’s a smooth transition when the incumbents’ tenure end. |
Clause 9 Qualifications for appointment | A person is qualified for appointment as the chairperson or a member of the Board under section 7(1)(f), (g) and (h) if that person: a. holds a degree from a university recognized in Kenya; and b. has knowledge and at least seven years’ experience in: i. law; ii. environmental management; iii. economics; iv. public finance; v. mining; vi. community development; or vii. any other related field. | Specifying qualifications in the Bill provides clear and standardized criteria for eligibility in a particular position. This clarity helps both applicants and decision makers understand the minimum requirements for the role. |
Clause 21 Chief executive officer of the Board | There shall be a chief executive officer of the Board who shall be competitively recruited and appointed by the Board, in consultation with the Cabinet Secretary, on such terms and conditions of service as shall be specified in the instrument of appointment or otherwise in writing from time to time. A person qualifies to be appointed as the chief executive officer if that person has at least ten years’ experience in a managerial capacity in affordable housing matters, finance, investment or the banking sector. | For sub-clause (1), a fair, transparent and competitive appointment process has the following benefits: a. a fair, transparent and competitive appointment process ensures that candidates are evaluated based on their qualifications, skills and experience. This helps to attract and select the most suitable individual, contributing to the overall effectiveness and efficiency of the Board; and b. this proposal ensures that appointments are done in a fair and transparent manner in accordance with the values and principles set out in the Constitution. For sub-clause (2), we propose that a person meets the requirements in chapter six of the Constitution as a requirement for appointment as a chief executive officer of the Board. Leadership and integrity principles ensure that the person possesses a strong commitment to ethical conduct. |
Clause 10 Vacation of office | The office of the chairperson or a member of the Board appointed under section 7(1)(f), (g) and (h) shall become vacant if the chairperson or member: a. is unable to perform the functions of the office by reason of mental or physical incapacity; b. is otherwise unable or unfit to continue serving as the chairperson or member of the Board; c. is adjudged bankrupt; d. is convicted of a criminal offence and sentenced to a term of imprisonment of not less than six months; e. is absent, without reasonable cause, from three consecutive meetings of the Board; f. resigns in writing addressed, in the case of the chairperson, to the President and in the case of a member appointed under section 7(1)(f), (g) or (h), to the Cabinet Secretary; g. fails to declare their interest in any matter being considered by the Board; or h. dies. | We propose the addition of timelines in this clause. This proposal ensures that a vacancy in the Board is filled within a prescribed period without delays. |
Clause 23 Fund not to be overdrawn | The administrator of the Fund shall ensure that no bank accounts of the Fund are overdrawn. | By preventing bank accounts from being overdrawn, the administrator of the Fund promotes financial discipline and responsible management of monies in the Fund. This helps maintain financial stability and prevents unnecessary debt accumulation. |
Clause 12 Committees of the Board | The Board may establish such committees as it may consider necessary for the performance of its functions and the exercise of its powers under this Act. The Board may invite any person whose knowledge and skills are found necessary for the performance of its functions to sit in any committee established under subsection (1). | This proposal allows the Board to bring in individuals with specialized expertise, knowledge or experience that will assist it in performing its functions. This can be valuable when the existing Board members lack the required skills or expertise. |
Clause 13 Powers to delegate | The Board may, by resolution either generally or in any particular case, delegate to any committee of the Board or to any member, officer, employee or agent of the Authority the exercise of any of the powers or the performance of any of the functions or duties of the Board under this Act. | Delegating powers to a person who specializes in a particular area allows for more efficient and effective decision-making within that domain. This leads to better outcomes and higher-quality work. Secondly, delegating powers creates a clear chain of accountability for specific tasks or responsibilities. This clarity ensures that individuals are held responsible for their actions and outcomes. |
| Clause 14 Remuneration and allowances | The remuneration, allowances, expenses and other emoluments of members and staff of the Authority shall be determined by the Salaries and Remuneration Commission. | This proposal will be in line with article 230(4)(a) of the Constitution which gives the Salaries and Remuneration Commission power to set and review the remuneration and benefits of all public officers. |
Clause 16 Director-General | There shall be a Director-General of the Authority who shall be competitively recruited and appointed by the Board on such terms and conditions as the Board shall determine. A person qualifies for appointment as a Director General under sub-section (1) if that person: a. holds a degree from a university recognized in Kenya; and b. has knowledge and at least ten years’ experience in: i. law; ii. environmental management; iii. economics; iv. public finance; v. mining; vi. community development; or vii. any other related field. The Director-General shall be an ex-officio member of the Board and shall have no right to vote at any meeting of the Board. | The addition of sub-clause (1) has the following benefits: a. a fair, transparent and competitive appointment process ensures that candidates are evaluated based on their qualifications, skills and experience. This helps to attract and select the most suitable individual, contributing to the overall effectiveness and efficiency of the Authority; and b. this proposal ensures that appointments are done in a fair and transparent manner in accordance with the values and principles set out in the Constitution. For sub-clause (2), specifying qualifications in the Bill provides clear and standardized criteria for eligibility in a particular position. This clarity helps both applicants and decision makers understand the minimum requirements for the role. |
Clause 17 Tenure of office of the Director-General | The Director-General shall be appointed for a term of four years and shall be eligible for reappointment for one further term. | A fixed tenure provides stability to an organization by ensuring continuity in leadership and decision-making. It prevents frequent turnover and the associated disruptions that can occur with frequent changes in personnel. Secondly, individuals with a fixed tenure are accountable for their performance during that period. This accountability leads to increased focus and commitment to achieve the goals and objectives of the Authority. Thirdly, knowing when a position will become vacant allows the Board to engage in effective succession planning. It provides an opportunity to identify and groom a potential successor. This ensures there’s a smooth transition when the incumbent’s tenure ends. |
Clause 18 Functions of the Director-General | The Director-General shall be the chief executive officer of the Authority and secretary to the Board. The Director-General shall, for the effective performance of the functions under this Act and subject to the direction of the Board: a. be responsible for the day-to-day management of the Authority; b. manage the funds, property and affairs of the Authority; c. be responsible for the management of the staff of the Authority; d. cause to be prepared for the approval of the Board: i. the strategic plan and annual plan of the Authority; and ii. the annual budget and audited accounts of the Authority; and e. perform such other duties as may be assigned by the Board. | The functions of the Director-General have been clearly stated to ensure that it does not perform tasks that are ultra vires. |
Clause 19 Vacation of office of the Director-General | The Body may terminate the appointment of the Director-General in accordance with the terms and conditions of service for: a. inability to perform the functions of the office arising out of physical or mental incapacity; b. gross misconduct or misbehaviour; c. incompetence or neglect of duty; d. any other ground that would justify removal from office under the terms and conditions of service. | We propose the addition of timelines in this clause. This proposal ensures that the vacancy is filled within a prescribed period without delays. |
Clause 20 Common seal of the Authority | The common seal of the Authority shall be kept in the custody of the Director-General or such other person as the Board may direct and shall not be used except with the express authority and direction of the Board. The common seal of the Authority shall be authenticated by the signature of the chairperson and the Director-General of the Board or in the absence of either person, such other member of the Board who shall be designated by the Board for that purpose. The common seal of the Authority shall, when affixed to a document and authenticated, be judicially and officially noticed and unless the contrary is proved, any order or authorization by the Board under this section shall be presumed to have been duly given. | A common seal is used to authenticate documents, indicating that they have been formally approved or endorsed by the Authority. |
Clause 21 Staff of the Authority | The Board may employ such officers, agents and staff as are necessary for the proper and efficient discharge of the functions of the Authority under this Act. The staff employed under subsection (10) shall serve on such terms and conditions as the Board may, subject to section 51, determine. | We propose that the salaries of the staff is determined by the Board in consultation with the Salaries and Remuneration Commission. This proposal will be in line with article 230(4)(a) of the Constitution which gives the Salaries and Remuneration Commission power to set and review the remuneration and benefits of all public officers. |
Clause 22 Protection from personal liability | No matter or thing done by a member of the Board, employee or agent of the Authority shall, if the matter or thing is done bona fide for executing the functions, powers or duties of the Authority under this Act, render the member, officer, employee or agent or any person acting on their directions personally liable to any action, claim or demand. | This clause enhances accountability as a member, employee or agent of the Authority can be held liable for actions not done in good faith. |
Clause 23 Liability of the Authority to damages | Section 22 shall not relieve the Authority of liability to pay compensation or damages to any person for any injury to them, their property or any of their interests caused by the exercise of any power conferred by this Act or any other written law or by the failure, whether wholly or partially, of any works. | This clause safeguards the rights of individuals who may suffer loss or injury due to the actions of the Authority. It ensures that such individuals have recourse to seek compensation or damages for their losses. |
PART III – COLLECTION OF ROYALTIES AND FEES | ||
Clause 24 Imposition of royalties and fees | The Authority shall, in consultation with the Council of County Governors and relevant national government entities and upon conducting public participation, determine and review the amount of royalties and fees payable by affected entities in respect of a particular sector where a written law does not prescribe the royalties or fees. In making a determination under subsection (1), the Authority shall take into account: a. the total capital investment of the affected entity; b. the prevailing international market value of the commodity from which royalty is payable; c. the commercial viability of the natural resource being exploited; d. the impact of the exploitation on the local community, the affected county and the environment; and e. obligations of the affected entity under any existing benefit sharing agreement with the affected county. Where a written law prescribes the royalty, fees or payments in a particular natural resource sector, the relevant written law shall apply with respect to that sector. The Authority shall monitor compliance with the written law and the implementation of any benefit sharing agreement entered into pursuant to this Act. | This clause seeks to align itself with the provisions of other statutes that provide for payment of royalties and fees. A good example is section 31(1)(f) of the Mining Act (Cap. 306) which gives the Mining Rights Board power to give recommendations to the Cabinet Secretary responsible for mining on the fees and royalties payable for a mineral right or mineral. |
| Clause 25 Kenya Revenue Authority to collect royalties | The Kenya Revenue Authority (“KRA”) shall collect royalties as determined by the Authority under section 24 from affected entities any other payment of royalties from natural resource exploitation undertaken under any other written law. KRA shall declare and pay monies collected under sub-section (1) to the Consolidated Fund by the fifth day of every month. This section shall supersede the provisions of any law with respect to the collection of royalties and fees charged for the exploitation of natural resources in Kenya. KRA shall declare and account to the Authority the total sum collected from affected entities with respect to each natural resource as provided for under this Act. The Authority shall submit to the respective county government declarations received from KRA under sub-section (4) at least once every quarter. The county executive committee member in the respective county shall submit to the respective local community declarations received from the Authority under sub-section (5) within twenty-one days of receipt. | We propose the deletion of sub-clause (3). Sub-clause (3) indicates that clause 25 supersedes the provisions of any law with respect to the collection of royalties and fees charged for the exploitation of natural resources in Kenya. This contradicts clause 24(1) which states that the clause will only apply where a written law does not prescribe the royalties or fees. |
Clause 26 Revenue sharing ratio | The revenue collected under this Act shall, subject to sub-section (2), be shared between the National Government and respective county governments in the ratio of sixty percent to the National Government and forty percent to the county governments. At least sixty percent of the revenue assigned to county governments under sub-section (10) shall be utilized to implement local community projects and forty percent of that revenue shall be utilized for the benefit of the entire county. Where natural resources bestride two or more counties, the Authority shall determine the ratio of sharing the retained revenue amongst the affected counties in consultation with the relevant counties. In determining the ratio of sharing the retained revenue amongst counties sharing a resource under sub-section (3), the Authority shall take into account: a. the contribution of each affected county in relation to the resource; b. the inconvenience caused to the county in the exploitation of the natural resource; and c. any existing benefit sharing agreement with an affected entity. The Authority shall, in consultation with the lead agencies with respect to each natural resource, review the revenue sharing ratio after every five years and present its recommendations to Parliament for approval. | Throughout this clause, we propose the deletion of the word “revenue” and replacing it with the word “benefit”. The rationale for this proposal is that the term “benefit” has been defined in clause 2 of the Bill. Secondly, implementing local community projects ensures that the benefits allocated to the affected county directly benefits the communities living in the areas where natural resources are exploited. This approach allows for targeted investments in infrastructure, social services and economic development initiatives that address the specific needs and priorities of local residents. |
PART V – BENEFIT SHARING AGREEMENT | ||
Clause 27 Benefit sharing agreement | Every affected entity shall enter into a benefit sharing agreement with the relevant county government before the exploitation of a natural resource in the affected county. The benefit sharing agreement shall include non-monetary benefits that may accrue to the county and the contribution of the affected entity in realizing the same. | A benefit sharing agreement ensures that revenue generated from the exploitation of natural resources is distributed in a fair and equitable manner between the affected entity and the affected county. This helps to mitigate potential conflicts over resource ownership and ensures that local communities receive a fair share of the benefits derived from exploitation of the natural resource. |
Clause 28 Establishment of a County Benefit Sharing Committee | Each county that has a natural resource to which this Act applies shall establish a County Benefits Sharing Committee. A County Benefits Sharing Committee shall consist of: a. the county executive committee member responsible for finance; b. the county executive committee member responsible for matters relating to natural resources; c. two technical officers of the relevant county departments, appointed by the county executive committee member in consultation with the county executive committee member responsible for the respective natural resources; and d. five persons, two of whom shall be of the opposite gender, elected by the local communities where the natural resource is found and representing the areas with the main natural resources within the county. The members of the County Benefits Sharing Committee elected under sub-section (2)(d) shall be appointed by the county governor and serve for one single term of five years. The members of the County Benefits Sharing Committee shall be paid such allowances as shall be determined by the County Public Service Board in consultation with the Salaries and Remuneration Commission. The members of the County Benefits Sharing Committee shall elect a chairperson from amongst the members elected under sub-section (2)(d). The county chief officer responsible for matters relating to natural resources shall serve as the secretary to the County Benefits Sharing Committee. The Cabinet Secretary shall, in consultation with the Council of County Governors, make regulations for the conduct of the affairs of the County Benefits Sharing Committees. Where a resource bestrides two or more counties, the affected affected counties Benefits Sharing Committees shall constitute a joint committee with equivalent membership to oversee the negotiation of a joint benefit sharing agreement with an affected entity. | For sub-clause (2), the Committee has an odd number of members who can vote during meetings. When there’s an even number of members who can vote, there’s a greater risk of deadlocks. This makes it difficult for the Committee to make decisions, resolve conflicts or move forward with its agenda. An odd number ensures that there will always be a majority decision. For sub-clause (4), this proposal will be in line with article 230(4)(a) of the Constitution which gives the Salaries and Remuneration Commission power to set and review the remuneration and benefits of all public officers. |
Clause 29 Functions of the County Benefits Sharing Committee | The functions of each County Benefits Sharing Committee shall be to: a. in consultation with the respective local community and upon conducting public participation, negotiate the terms of a benefit sharing agreement with an affected entity on behalf of the county government; b. monitor the implementation of projects required to be undertaken in the county pursuant to a benefit sharing agreement; c. determine the amount of money to be allocated to each local community from monies that accrue under a benefit sharing agreement under this Act; d. convene public forums to facilitate public participation with regard to proposed benefit sharing agreements during negotiations prior to execution by the county government; e. convene public forums for the purpose of facilitating public participation with regard to community projects proposed to be undertaken using monies that accrue to a county government pursuant to this Act; and f. make recommendations to the county government on projects to be funded using monies which accrue to the county government pursuant to this Act. | The functions of the County Benefits Sharing Committee have been clearly stated to ensure that it does not perform tasks that are ultra vires. |
Clause 30 Approval of a benefit sharing agreement | Every benefit sharing agreement shall be approved by the respective county assembly prior to the execution by the respective county government. Each benefit sharing agreement shall be deposited with the Authority within thirty days of its execution and a copy shall simultaneously be submitted to the Senate. | Approval by the county assembly ensures democratic oversight of benefit sharing agreements, as elected representatives of the community can review and scrutinize the terms and conditions of the agreement on behalf of their constituents. This enhances transparency and accountability in the negotiation and implementation of the benefit sharing arrangements. |
Clause 31 Local Community Benefit Sharing Forum | There shall be established by each affected local community a Local Benefit Sharing Forum comprising of five persons, two of whom shall be of the opposite gender, elected by the residents of the local community. A public officer shall not be eligible for election as a member of a local community benefits sharing forum. The members of a local community benefits sharing forum shall be appointed by the respective county executive committee member responsible for matters relating to natural resources and serve for a single term of five years. The respective county government shall facilitate meetings and the election of the members of the Local Community Benefit Sharing Forum. A local benefit sharing forum shall not hold more than eight meetings in one year. The local community benefit sharing forum shall ensure that the respective local community benefits from the exploitation of natural resources and shall, for this purpose: a. collect and collate the views of the local community and represent the interests of the local community in the negotiations with the respective County Benefit Sharing Committee and in the implementation of a Benefit Sharing Agreement; b. in consultation with the local community, identify local community projects to be supported by money allocated to the local community by the County Benefits Sharing Committee under this Act; and c. oversee the implementation of projects undertaken in the relevant local community using funds developed under this Act. The members of a local community benefit sharing forum shall be paid such allowances as shall be determined by the County Public Service Board in consultation with the Salaries and Remuneration Commission. | For sub-clause (1), we propose the addition of the word “Community” immediately before the word “Benefit”. This proposal seeks to remedy the omission present in this sub-clause. For sub-clause (1), the Local Community Benefit Sharing Forum has an odd number of members who can vote during meetings. When there’s an even number of members who can vote, there’s a greater risk of deadlocks. This makes it difficult for the Local Community Benefit Sharing Forum to make decisions, resolve conflicts or move forward with its agenda. An odd number ensures that there will always be a majority decision. For sub-clause (7), this proposal will be in line with article 230(4)(a) of the Constitution which gives the Salaries and Remuneration Commission power to set and review the remuneration and benefits of all public officers. |
PART V – FINANCIAL PROVISIONS | ||
Clause 32 Funds of the Authority | The funds of the Authority shall consist of: a. such monies or assets as may accrue to or vest in the Authority in the course of the exercise of its powers or the performance of its functions under this Act; b. such money as may be provided by the National Assembly for defraying expenses incurred in the implementation of this Act; c. all monies from any other source provided for or donated or lent to the Authority; and d. such other monies that may lawfully accrue in the discharge of functions of the Authority under this Act. | This clause indicates the methods which the Authority uses to raise funds for conducting its activities. |
Clause 34 Accounts | The Authority shall cause to be kept all proper books and records of account of the income, expenditure and assets of the Authority. Within three months of the end of each financial year, the Authority shall submit to the Auditor-General, the accounts of the Authority together with: a. a statement of the income and expenditure of the Authority during that financial year; and b. a statement of the assets and liabilities of the Authority as at the last day of that year. The accounts of the Authority shall be audited and reported upon in accordance with the Public Audit Act. The Authority may establish, control, manage, maintain and contribute to pension and provident funds for the benefit of employees of the Authority and may grant pensions and gratuities from any such fund to the said employees upon their resignation, retirement or separation from the service of the Authority or, as the case may be, to the dependants of any such employee upon such employee’s death. | This clause ensures that monies allocated to the Authority can be tracked and easily accounted for. |
Clause 35 Annual Report | Within three months of the end of each financial year, the Authority shall submit: a. to the Auditor General, the accounts of the Authority in respect of that year together with: i. a statement of the income and expenditure of the Authority during that year; and ii. a statement of the assets and liabilities of the Authority as at the last day of that financial year; and b. to the President and Parliament, an annual report in respect of that year containing: i. the financial statements of the Authority including: A. a statement of the income and expenditure of the Authority during that year; and B. a statement if the assets and liabilities of the Authority as at the last day of that financial year; ii. a list of institutions contributing to benefit sharing under this Act, the proportion of benefit and the local community that benefited; iii. the total sums contributed towards benefit sharing and its distribution; iv. the progress made in the implementation of the Authority’s functions; and v. any other information that the Authority may consider necessary. The Authority shall publish the annual report in the Gazette and in at least one newspaper of national circulation. | By mandating the submission of accounts to the Auditor General, President and Parliament, the provision enhances financial accountability and transparency within the Authority. This ensures that the Authority's financial transactions are subject to independent scrutiny, reducing the risk of mismanagement, fraud or corruption. |
PART VI - MISCELLANEOUS PROVISONS | ||
Clause 36 Use of retained funds | Monies distributed to counties under this Act shall be utilized for projects that: a. are prioritized by the County Benefit Sharing Committee; b. are prioritized by the local community benefit sharing forums; c. meet the socio-economic needs of the residents of the County or local community; and d. are of public interest and are community-based in order to ensure that the prospective benefits are available to a widespread cross-section of the inhabitants of a particular area. | This clause ensures that monies allocated to the affected county because of exploitation of a natural resource is used to fund projects that will benefit the local communities. Further, this proposal allows for efficient allocation of resources to address priority areas such as infrastructure development, healthcare and education. This leads to tangible improvements in quality of life of the local communities in the affected county. |
Clause 37 Offences | A person who: a. fails to furnish information required to be furnished to the Authority under this Act; b. makes a statement which the entity knows to be false or which the entity has no reason to believe to be true; or c. knowingly makes a false statement under this Act; commits an offence. A person who is found guilty of an offence under sub-section (1) is liable, on conviction: a. in the case of a natural person to a fine not exceeding two million shillings or to imprisonment for a term not exceeding three years or to both such fine and imprisonment; and b. in the case of a body corporate, to a fine not exceeding five million shillings. Where a body corporate is found guilty of an offence under this Act, every officer of that corporation is deemed to have committed an offence and is liable, on conviction, to a fine not exceeding two million shillings or to imprisonment for a term not exceeding three years or to both such fine and imprisonment. An affected entity that continues to be in breach of this Act may be liable to cancellation of its licence. | This clause acts as a deterrence in ensuring that a person complies with the provisions of this Bill. Secondly, we propose the deletion of sub-clause (4). The rationale for this proposal is that no licences are issued under this Bill. |
Clause 38 Transitional provisions | An affected entity that, immediately before the commencement of this Act, was lawfully authorized to exploit a natural resource under this Act shall be deemed to be authorized to conduct such exploitation under this Act. Despite sub-section (1), an affected entity shall comply with the provisions of this Act within two years of the commencement of the Act. | Transitional provisions facilitate the smooth implementation of legislative changes by providing a framework for transitioning from the old legal regime to the new one, ensuring a seamless transition for affected individuals. |
Clause 40 Amendment to section 183 of Act No. 12 of 2016 | Section 183 of the Mining Act is amended by deleting sub-section (5) and substituting thereof the following new sub-section (5): (5) The royalty received by the State under this section shall be paid into the Consolidated Fund and apportioned in accordance with section 26 of the Natural Resources (Benefit Sharing) Act. | Section 183(5) of the Mining Act provides for the distribution of royalties as follows: a. 70% to the National Government; b. 20% to the County Government; and c. 10% to the community where the mining operations occur. This proposal seeks to prevent a potential conflict of laws from arising in the future when the Bill is assented into law as section 183(5) of the Mining Act contradicts section 26 of the Bill. |
Clause 41 Amendment to section 76 of Act No. 47 of 2013 | Section 76 of the Wildlife Conservation and Management Act is amended by: a. deleting sub-section (1) and substituting therefor the following new sub-section: (1) The revenue received by the National Government under this Act shall be paid into the National Treasury and apportioned in accordance with section 26 of the Natural Resources (Benefit Sharing) Act. b. deleting sub-section (2); c. deleting sub-section (3); and d. deleting sub-section (4). | For the proposal in paragraph (a), we propose that the revenue received by the National Government is paid into the Consolidated Fund. This proposal seeks to align the Bill with the provisions of article 206(1) of the Constitution which indicates that all monies raised by the National Government shall be paid into the Consolidated Fund. Secondly, section 76 of the Wildlife Conservation and Management Act gave the Cabinet Secretary power to formulate guidelines on incentives and benefit sharing. The deletion of sub-sections (2) to (4) is an attempt to harmonize the Bill and the Act to be consistent with one another in matters involving benefit sharing. |
Clause 42 Amendment to section 85 of Act No. 1 of 2019 | Section 85 of the Energy Act is amended by: a. deleting sub-section (3) and substituting therefor the following new sub-section (3): (3) The royalty received by the National Government under this section shall be paid into the National Treasury and apportioned in accordance with section 26 of the Natural Resources (Benefit Sharing) Act. b. deleting sub-section (4). | We propose that the revenue received by the National Government is paid into the Consolidated Fund. This proposal seeks to align the Bill with the provisions of article 206(1) of the Constitution which indicates that all monies raised by the National Government shall be paid into the Consolidated Fund. Secondly, we agree with the deletion of sub-section (4). Sub-section (4) indicated that the Cabinet Secretary in consultation with the Commission on Revenue Allocation shall determine the rate of royalties that the affected county or counties will receive. This proposal seeks to align the Energy Act with the provisions of this Bill to prevent a potential conflict of laws from arising in the future regarding benefit sharing. |
Clause 43 Amendment to section 58 of Act No. 2 of 2019 | The Petroleum Act is amended by deleting section 58 and substituting therefor the following new section 58: 58. The National Government’s share of the profits derived from upstream petroleum under section 57 shall be apportioned in accordance with section 26 of the Natural Resources (Benefit Sharing) Act. | This proposal seeks to align the Energy Act with the provisions of this Bill to prevent a potential conflict of laws from arising in the future regarding benefit sharing. |
Proposed clause to be added Appeals | Clause 6(1)(g) of the Bill indicates that the Authority shall have authority to determine appeals arising out of conflicts involving preparation and implementation of benefit sharing agreements. This proposed clause seeks to create a legal framework regarding appeals lodged under the Bill. | We propose the addition of timelines in this clause. This proposal ensures that the appeal is determined by the Authority within a prescribed period without delays. |
We propose that a party who is dissatisfied with the Authority’s decision may appeal to the High Court, with a further appeal allowed to the Court of Appeal. This proposal ensures that a person dissatisfied with the Authority’s decision has legal recourse to the courts. |