[February 2015] Legal, Policy Gaps Expose Kenya to Exploitation in Extractive Process

Publish Date: 
Wednesday, February 4, 2015

Policy gaps relating to extractive industries have exposed Kenyans to massive economic exploitation by foreign mining firms. The problem is compounded by legal and policy vacuums which could undermine oil and gas revenue collection and accountability as well as leading to human rights violations. Regionally, oil exploration is shrouded by a lot of secrecy and only the top government officials in-charge of the portfolio get to know the intricacies of the production sharing contracts. This has left a lot of room for exploitation and corruption both from the government and multinationals, and posed serious challenges for oversight.

Lack of information available to the affected communities has become a worrying trend. At present communities do not receive any royalties from minerals found in their land, they sign away their land rights without adequate compensation or alternative resettlements. In essence resource extraction leaves communities poorer as opposed to uplifting their livelihoods. Currently we do not have a social accountability framework that can monitor activities done by multinationals. The only kind of redress we can get is if we join the Extractive Industries Transparency Initiative (EITI), which also creates a platform for civil society to perform an oversight role. The only way multinationals can be monitored is through word of mouth from communities about their experiences; apart from that no legal regulatory frameworks for monitoring exist. Efforts by Hakijamii to have the Community Land Bill legislated to protect rights of the communities in terms of benefit sharing and land rights was met with a lot of resistance from the extractive companies; they wrote a 13 paged memorandum to the government threatening legal action if the bill is passed. At the very grassroots level, advisory committees that are supposed to act as spokespeople to the multinationals have been compromised by political leaders’ interests and this leaves the communities with little avenues to address their issues resulting to mass action and riots. 

Community participation and consent is also a distant hope, since the Kenyan government has done little to prepare affected communities for these projects, and the local content legislation has still not be implemented. The local content legislation will be important because it gives a percentage of how much local communities will benefit from these projects in terms of employment opportunities, education and infrastructure. As an example, approximately 77% of the Turkana region of Kenya has oil, which means that the land which was traditionally used by nomadic people for grazing is now under oil exploration.  Ironically the over 85,000 residents still live in poverty, and they lack information on income generated from extractives in their land. Communities have still not adequately benefited from employment opportunities and we often hear of riots at oil exploration wells in Turkana.

The current legal framework in Kenya is confusing to say the least. We have the Petroleum Act of 1986 which does not have any clause on royalties or benefit sharing with communities. Then comes the Community Land Bill (Senate bill 2014) which proposes that natural resources found in community land shall benefit the community according to investments accrued from the project, but does not give an exact percentage for community proceeds. There is also a proposed Senate bill on benefit sharing which proposes that the community receive 40% of the county government share; a formula which is quite complex and requires significant mental mathematics. The Mining Bill of 2014 gives the cabinet secretary the mandate to determine is the amount to be paid as royalties.  Lastly we have the Constitution’s Article 71, which states that all agreements relating natural resource exploitation requires ratification from the government.  With such conflicting laws on natural resources Kenya is likely to follow its neighbors in the “resource curse”

Lastly when it comes to corporate accountability, the domestic legal frameworks are implemented in a discriminatory manner. International law is not legally binding on the multinationals and only act as “soft law”. Kenya is still not a member of the EITI, which could be a possible remedial process. It would be helpful to know: what are your experiences with these multinational companies? How can communities be protected against these multinationals given that we don’t have international or domestic law that cushion the communities against violations common with these multinationals? How have monitoring methods been used in cases where similar legal and policy gaps exist?

Pauline Musangi
Working Group(s):