MPs should shelve the new Mining Bill for further stakeholder consultation

Hon. Amina Abdalla, M.P. - Chairperson
Environment and Natural Resources Committee
Parliament Building, Nairobi

19th May 2014

Dear Hon Amina,

RE: MPs should shelve the new Mining Bill for further stakeholders consultation

With a mining industry that is still in its infancy, government is expected to avoid introducing laws that are likely to saddle the few serious players in the industry with stultifying regulations. Does it really make sense to saddle an industry still so young with a burdensome regulatory regime? Why is the government obsessed with control in a sector with such few serious players? The Mining Bill that was recently published is based on a very narrow vision of the mining industry. It is based on a phantom boom. At the stage we are in right now, regulation should be about facilitation – a supportive regulatory framework – and how to attract new investors. Yet it does not surprise anyone that the government has come up with such restrictive laws.

The Mining Cabinet secretary says they want to simplify regulation, but most of the decisions he takes often seem to result in more complexity. What you will observe is an unstoppable momentum to expand bureaucracy. This is exactly what the Bill seeks to do. We have had a Mining Act for many years and opinion has been unanimous that the law needed to be amended. In contemporary anti-corruption literature, we read that corruption thrives where one public officer or a small group is handed too many discretionary powers especially over issuance of scarce resources such as licences and permits.

The most bizarre aspect of the Mining Bill 2014 is the plan to place massive discretionary powers in the hands of the Cabinet Secretary in charge of mining. If the law is passed, he will have powers to issue the following licences: a prospective licence, a retention licence, a mining licence and a mineral permit. In addition, the Cabinet Secretary will have powers to cancel licences and permits. He also has powers to write regulations providing for how the companies are to replace expatriates. Indeed, all powers over approvals and issuance of permits will now sit with the Cabinet Secretary himself, not geologists, mining engineers or technocrats.
Under the Ministry of Energy and Petroleum, the responsibility of issuing permits for oil exploration blocks to investors sits with an inter-ministerial committee. The Cabinet secretary has the powers to introduce regulations prescribing thresholds for State participation. The Bill also prescribes circumstances where mining companies will be obliged to off-load up to 20 percent of their shares to locals through the Nairobi Securities Exchange.
This Bill will lead to compulsory acquisitions of land from communities in mining zones with limited access to judicial mechanisms. As such,
• We ask the committee to consider community interest while debating on the bill.
• We ask that revenue sharing plan between the National Government and the County government should be made clear in the bill.
• We ask for competitive bidding included in the Bill as it is the best practice in most countries as it reduces corruption by government officials.
• We say that other Countries have chosen auctioning and competitive bidding to promote transparency and governance.
• Overall the mining license should provide the regulator with a tool to discourage speculation through minimum work requirements, ensure social and environmental protection and provide for sharing of benefits between the company and the host country.
• We ask that the bill should ensure participation, including the free, prior and informed consent of communities as the 2012 the African Commission on Human and Peoples’ rights resolution recommends.
• We ask that Mining Bill should require investments and contract publications.
• We ask that the Mining Bill should compel the Government to embrace EITI and be an EITI candidate.
• We ask that the Mining bill should borrow from the African Mining Visions.
• We ask that issuance of the Mining Permits should be handled by the Inter-Ministerial Committee
• We further ask that the Mining Bill 2014 should be shelved by parliament for further consultations.
• Parliament should throw the Mining Bill 2014 out if not shelved for further public consultation.

We conclude that it is important that the Mining Bill 2014 takes cognisance of the continent wide shift and ensure that processes are put in place for the proper flow of information from national level processes to local level. The process must include process of informing local communities in the area of concession, getting community responses to proposed mining activities and factoring in community concerns and consent. These are currently a gap existing in that local communities are not aware of concessions issued, acreage covered and their rights.”

Hoping for your cooperation in this issue

Yours faithfully

Maurice Ouma Odhiambo
Executive Director
Jamaa Resource Initiatives

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Hon. Alexander Kosgey, M.P. - Vice-Chairperson
Hon. Alice Ng’ang’a, M.P.
Hon. Samuel Ndiritu, M.P.
Hon. Peter Weru Kinyua, M.P.
Hon. Ejidius Njogu Barua, M.P.
Hon. Jude Njomo, M.P.
Hon. Moitalel Ole Kenta, M.P.
Hon. Kathuri Murungi, M.P.
Hon. Sunjeev Birdi, M.P.
Hon. Jackson K. Rop, M.P.
Hon. Abdi Noor Ali, M.P.
Hon. Joyce Emanikor, M.P.
Hon. Abdulaziz Farah, M.P.
Hon. Ronald Tonui, M.P.
Hon. Reginalda Wanyonyi, M.P.
Hon. Gideon Mwiti, M.P.
Hon. Hassan Dukicha, M.P.
Hon. Zainabu Chidzunga, M.P.
Hon. Dr. Wilber Khasilwa Ottichilo, M.P.
Hon. George Oner, M.P.
Hon. Charles Geni Mongare, M.P.
Hon. Major Muluvi Mutua Marcus, M.P.
Hon. Mohamed Diriye Abdullahi, M.P.
Hon. James Opiyi Wandayi, M.P.
Hon. Shukra Hussein Gure, M.P.
Hon. Aisha Jumwa Karisa, M.P.
Hon. Chachu Ganya, M.P.
Hon. Richard Makenga Katemi, M.P