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 Cabinet Secretary for Mining has enacted a number of Regulations under the Mining Act, 2016 regulating the licensing, exploration, work programmes and state participation in the extractives industry. These Regulations are to apply to all mineral rights including artisanal miners and holders of, reconnaissance licences, prospecting licences, prospecting permits and retention licences. The regulations on State Participation secure the right of the State to intervene in the prospecting or mining operations carried out by a holder of a mineral right.
Mining (Licence and Permit) Regulations, 2017
The Mining (Licence and Permit) Regulations, 2017 were enacted by the Cabinet Secretary for Mining in exercise of the powers conferred by sections 12 (3), 153 (3) and 223 (2) of the Mining Act, 2016. The Mining (license and permit) Regulations 2017 (Clause 4) provides that all applications for mineral rights shall be made through the Online Mining Cadastre (OMC) in order for them to be considered for grant. Having an online application forum is a positive step towards establishing transparency as far as the application process is concerned so that regardless of whether one is a foreign or local investor, there is certainty on the process of seeking mining licenses and permits. It is a commendable step that these Regulations seek to regulate, inter alia, small-scale mining or artisanal mining operations in line with the Mining Act 2016, by granting permits. However, there is a need to ensure that the same are not used as a political tool in awarding permits for corrupt dealings in artisanal mining activities.
In addition, while the artisanal miners may smoothly get licences and permits (which will cost money to apply), there may be a funding challenge. It has been observed that acute cash shortage caused by poor linkages with the financial sectors of the economy is one of the biggest impediments to the growth of the artisanal and small-scale mining sector. This is mainly attributed to the fact that being a nascent, capital intense and high-risk sector, it is difficult for local banks to finance it. However, government intervention can go a long way in addressing the funding challenge. It is therefore not enough to regulate licensing and permits relating to mining activities in the country, there is a need to create a level playing ground for the artisanal miners by creating a funding kitty to help them competitively carry out these mining activities. Such a kitty would be similar to those in other African countries whose artisanal and small scale mining sectors are doing well such as 2017 Nigeria’s Ministry of Solid Minerals and Steel Development and the Bank of Industry of Nigeria’s N5 billion fund to provide loans and bring the sector under a structured system; and Zimbabwe’s gold fund introduced in 2016 through the Reserve Bank of Zimbabwe.
Mining (Work Programmes and Exploration Reports) Guidelines, 2017
The Mining (Work Programmes and Exploration Reports) Guidelines, 2017 were enacted by the Cabinet Secretary in exercise of the powers conferred by section 221 (1) of the Mining Act, 2016. These Guidelines -provide guidance to applicants for, and holders of, reconnaissance licences, prospecting licences, prospecting permits and retention licences on how to prepare work programmes and exploration reports; and are to assist the Director of Geological Surveys to review work programmes and exploration reports that shall be submitted by applicants for or holders of mineral rights. While these reports would go a long way in enhancing the right of access to information for the local people as far as the activities of the mining companies are concerned, there is no evidence of any such reports being made public since 2017 or even any being filed with the government agencies at all. There is therefore lacking in transparency and accountability from the mining companies in the country. As such, there is a need to ensure that these Regulations are not only enforced but also such reports should be made available to the public in light of the right of access to information as guaranteed under Article 35 of the Constitution of Kenya 2010 and Access to Information Act, 2016.
Mining (State Participation) Regulations, 20I7
The Mining (State Participation) Regulations, 20I7 were enacted by the Cabinet Secretary in exercise of Section 48(4) of the Mining Act, 2016. The purpose of these Regulations is to provide for State participation in prospecting or mining operations carried out by a holder of a mineral right. These Regulations are to apply to all applicants and holders of any mineral right-which entitles the State to a ten percent free carried interest; where the State acquires any additional interest that may be agreed with the holder of a mining licence; and where the State enters into an agreement to participate in prospecting operations or activities under a prospecting licence held by a holder other than the National Mining Corporation. In line with the Mining Act 2016, the Regulations reiterate that the National Mining Corporation shall on behalf of the State, be the investment arm of the National Government in respect of all prospecting or mining operations. The direct interest and participation of the government, albeit through the National Mining Corporation is a positive step towards ensuring that the mining companies declare all the deposits and profits accrued as well as safeguarding the interests of local communities at all stages of mining activities.
There has been past reported cases of non-disclosure and non-declaration by the mining companies in the country and this requires the government to have its own watchdog on the ground to curb the vice, hence the need for this Corporation. The Corporation is also useful in promoting capacity building in the sector as far as exploration of minerals in the country is concerned. The direct interest and participation of the government, albeit through the National Mining Corporation is a positive step towards ensuring that the mining companies declare all the deposits and profits accrued as well as safeguarding the interests of local communities at all stages of mining activities. This will hopefully do away with such situations as the soda ash mining in Lake Magadi where the poverty and lack of investments in Magadi, after 100 years of exploitation of trona worth trillions of shillings, has been attributed to the lack of transparency in the governance of natural resources, corruption, and illegal outflows.
*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.