Bill seeks to ensure that minerals benefit locals

Communities in mineral-rich areas are set to benefit from new proposals that impose strict requirements on mineral operators while giving locals a greater say over their resources.

The Local Content Bill 2016 promises to give local communities more control over ownership, control and financing of resources such as oil and gas among other minerals.

The proposed law has introduced conditions that include a requirement that miners should provide plans to Parliament’s energy committee, showing how their activities will benefit local communities through incentives such as employment and utilisation of local resources in their operations.

“An operator shall, before applying for, or bidding for a licence, permit or interest and before engaging in any extractive activity, prepare and submit to the committee a local content plan with respect to the extractive activity in the prescribed form,” read the draft bill sponsored by Baringo Senator Gideon Moi (pictured).

This means that one will not be allowed to set up shop without clear terms on how his activities will impact land owners and the original owners of the resources, who have in the past been kept on the sidelines of economic development while large firms prosper from mineral proceeds.

It also means that communities will no longer be shortchanged by large firms that earn huge profits, while ignoring the welfare of their hosts and other key factors such as the environment.

TRICKLE DOWN

“The discovery and exploitation of natural resources in a particular area has always led to the expectation that the local communities and country in which the resources are found would develop economically and socially, and that the benefits of such resource exploitation would trickle down to the communities. It has however been found that this is often not the case,” read the proposed legislation.

“The objects and purposes of this Act are to promote maximisation of value-addition and creation of employment opportunities in the extractive industry value chain through use of local expertise, goods, services, businesses and financing, and their retention in the country,” it added.

Other than oil, Kenya’s other well-known minerals are soda ash (trona), fluorspar, titanium and zirconium. The country has also in the recent past discovered large deposits of titanium and a host of other rare minerals.

Although there are no statistics on the extent of the country’s mineral wealth, the deposits are known to contribute substantially to the country’s Gross Domestic Product (GDP).

MINERAL RIGHTS

There have, however, been concerns that mineral rights have often been skewed in favour of the mining companies at the expense of the locals. A weak legal framework and inadequate public participation has often meant that local communities are left to the mercy of the miners, who are increasingly developing an interest in Kenya and the East African region.

According to Gideon, who is also the Chair of the Senate Standing Committee on Energy, the country’s resources will count for nothing if they are not properly managed by involving locals, including landowners.

“The timing of the discovery of oil, gas and other mineral resources was god-sent. These resources were discovered right when Kenya and her people needed them the most to accelerate economic take-off and achieve comprehensive development.

But these resources could easily cease being a blessing and become a curse as has happened for many other African nations,” said the senator.