By Dr. Kariuki Muigua, PhD (Leading Environmental Law Scholar, Policy Advisor, Natural Resources Lawyer and Dispute Resolution Expert from Kenya), Winner of Kenya’s ADR Practitioner of the Year 2021, ADR Publisher of the Year 2021 and CIArb (Kenya) Lifetime Achievement Award 2021*
The Mining Act, 2016 has made provisions for enactment of regulations namely, the Mining (Use of Local Goods and Services) Regulations, 2017 and Mining (Employment and Training) Regulations, 2017 which, if fully enforced, can be a useful tool in creating jobs and promoting employment of Kenyans in the Mining Sector as part of promoting benefit sharing from the extractives sector. These Regulations, alongside other transparency and accountability measures and practices are useful in ensuring much of the benefits from the mining sector, in the short-term and long-term, accrue to the country that are expatriated to foreign lands. They can however work well where the authorities involved work with different stakeholders such as the employment agencies to make the benefit of employment and job-creation becomes a reality.
Mining (Use of Local Goods and Services) Regulations, 2017
The Mining (Use of Local Goods and Services) Regulations, 2017 were enacted by the Cabinet Secretary in exercise of the powers conferred by section 223(l) of the Mining Act, 2016. The purpose of these Regulations is to promote job creation through the use of local expertise, goods and services, businesses and financing in the mining industry value chain and their retention in the country; and achieve the minimum local level and in-country spend for the provision of the goods and services in the mining industry value chain; among others. The Regulations require that the holder of a licence, its contractors and subcontractors shall, to the maximum extent possible, when purchasing goods and procuring services required with respect to operations or any-activity to be conducted under a licence, give first priority to- materials and goods made in Kenya; and services provided by citizens of Kenya or entities incorporated and operating in Kenya or owned and controlled by Kenyans: provided that such goods and services are equal in quality, quantity and price to, or better than, goods and services obtainable outside of Kenya.
Except as otherwise provided in the Act or under these Regulations, an application for a licence should not be granted unless, the applicant has submitted a procurement plan for the purchase of goods and services in Kenya to the Cabinet Secretary. The plan, if approved, shall form part of the conditions or obligations under the licence. The mining sector in the country is expected to uplift the lives of its people by not only creating employment opportunities but also jobs through creating markets for local goods. One way of alleviating poverty in any mining region would be empowering the local people through creating markets for the locally produced goods and services. However, there is likely to arise a challenge in getting the mining sector players, both local and foreign, to abide by these rules. They are likely to bypass them on grounds of equality in quality, quantity and price to, or better than, goods and services obtainable outside of Kenya.
Considering that there are many factors (such as supply and demand, cost of raw materials, machinery, amongst others) that may influence the production cost of goods and services which may ultimately push up the price of these goods and services or worse compromise their quality, it is likely that the companies in question may use such loopholes to source for the same either from their home countries (for foreigners) or other cheaper and better quality goods from foreign countries for the locals. There are no public records or any other form of evidence thus far to indicate if the companies have complied with these Regulations or if indeed the Government, through the relevant ministry has sought to ensure compliance. Implementing these Regulations may therefore call for the Government and other stakeholders to first address these challenges before local traders, service providers and communities can benefit from the legal framework.
Mining (Employment and Training) Regulations, 2017
The Mining (Employment and Training) Regulations, 2017 were enacted by the Cabinet Secretary in exercise of powers conferred by sections 46(3) and 223(l) of the Mining Act, 2016. The purpose of these Regulations is to promote job creation through the use of local expertise in the mining industry, the entire mining value chain and to retain the requisite skills within the country; develop local capacities in the mining industry value chain through education, skills and technology transfer, research and development; and achieve the minimum local employment level and in-country spend across the entire mining industry value chain. These Regulations shall apply to all applicants and holders, of any licence for reconnaissance, prospecting and mining; cutting, polishing, processing, refining and smelting of a mineral; a large-scale mineral right which is valid after the coming into force of the Act and these Regulations; and mine support services. An application for any licence shall not be granted by the Cabinet Secretary-unless the applicant has submitted a plan outlining the proposals for the employment and training of Kenyans.
While these Regulations are well meaning and geared towards ensuring that the mining sector creates jobs, employment and results in specialized training for the Kenyan people, it is based on the assumption that locals have some base knowledge that can be built on to achieve the level of expertise required in the execution of the corresponding duties within the industry. Exclusive reliance on the foreigners to create expertise through technology transfer may not yield the desired results. There is need for the government to do much more through the local institutions of higher learning through sponsoring courses to build capacity and even having the students/professionals taking such courses leaving the country for specialized training and to gain experience. Such candidates would then be ripe to learn more through any exchange and technology transfer programmes set up under the Mining (Employment and Training) Regulations, 2017.
There is a need to ensure that the jobs offered are not only menial in nature since, left unsupervised, the foreign companies may not be willing to place local experts in critical positions within the entire mining value chain as required by the law. The Government must offer technical and financial support to its people in order to uplift them to levels where they can competitively take up key positions in the mining sector and specifically represent the interests of the Government and the country at large within these companies. The lack of proper guidelines or failure to implement any existing regulations and guidelines can lead to conflicts as has been witnessed in other African countries such as the Democratic Republic of Congo, where the locals feel sidelined as far as mining benefits sharing is concerned. For instance, there have been queries on how to manage expectations of the local people living within the mining areas in order to avert possible conflicts in future.
*This article is an extract from the Article: Securing Our Destiny through Effective Management of the Environment, (2020) Journal of Conflict Management and Sustainable Development Volume 4(3), p. 1. by Dr. Kariuki Muigua, PhD, Kenya’s ADR Practitioner of the Year 2021 (Nairobi Legal Awards), ADR Publisher of the Year 2021 and ADR Lifetime Achievement Award 2021 (CIArb Kenya). Dr. Kariuki Muigua is a foremost Environmental Law and Natural Resources Lawyer and Scholar, Sustainable Development Advocate and Conflict Management Expert in Kenya. Dr. Kariuki Muigua is a Senior Lecturer of Environmental Law and Dispute resolution at the University of Nairobi School of Law and The Center for Advanced Studies in Environmental Law and Policy (CASELAP). He has published numerous books and articles on Environmental Law, Environmental Justice Conflict Management, Alternative Dispute Resolution and Sustainable Development. Dr. Muigua is also a Chartered Arbitrator, an Accredited Mediator, the Africa Trustee of the Chartered Institute of Arbitrators and the Managing Partner of Kariuki Muigua & Co. Advocates. Dr. Muigua is recognized among the top 5 leading lawyers and dispute resolution experts in Kenya by the Chambers Global Guide 2022.
References
Muigua, K., “Securing Our Destiny through Effective Management of the Environment,” (2020) Journal of Conflict Management and Sustainable Development Volume 4(3), p. 1.