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Lobbies fault State on mineral contracts

By Moses Omusolo | September 26th 2019
Lobbies fault State on mineral contracts. [File, Standard]

Local public interest groups have faulted the Government for putting national and community interests aside when making agreements with foreign firms in the mineral, oil and gas sectors.

The five lobbies led by the Kenya Civil Society Platform on Oil and Gas (KCSPOG) accuse the State of having the wrong priorities for the extractives industry. 

"In the process, the host communities are not fully benefiting in terms of being adequately compensated even as their social, cultural and environmental rights are not properly secured," said KCSPOG Chief Executive Charles Wanguhu.

He said even as the law provides for fair benefit sharing, there are no stable structures in place to facilitate the process to the detriment of local communities and the nation.

An extractives expert from Oxfam Kenya, Viola Tarus said the Government is letting down its citizens on agreements which eventually confer private and foreign players certain critical advantages including revenue benefits.

"The State is not doing enough at benefit sharing in terms of revenue sharing, community development agreements as well as local content," she said.

Ms Tarus called on the State to implement new benefits sharing models to prevent the interests of local communities and the nation from slipping away under its watch.

She said even the State could benefit from the new petroleum law and the accompanying model petroleum sharing contract (PSC), which increased cost recovery audits to at least eight from the previous two years. 

The old model set up more than a decade ago, she said, had among other downsides inadequate cost and profit-sharing mechanisms. "The recently updated PSCs as well as risk service contracts are set to bring Kenya’s extractives industry in line with best practice.”

However, Tarus said the Government would not achieve this if oversight institutions are not strengthened and mining agreements as well as audit reports made public.

“According to our report, the Government has signed at least 44 contracts with oil and gas companies. Of these, only 10 have been made public. The lack of contract disclosure prevents a key oversight mechanism," said Tarus.

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