Kenyan Senate crafts Bill on sharing of natural resources

Saturday December 14 2013

By KENNEDY SENELWA, Special Correspondent

Kenya wants to forestall disputes because of revenue sharing with a new law seeking to give communities financial benefits received from exploitation of natural resources.

The Natural Resources (County Royalties) Bill 2013 aims to give 20 per cent of mining royalties under the devolved government system to avert the perception of economic exclusion and avoid the resource curse.

The Bill seeks to make provisions for sustainable exploitation and equitable apportionment of royalties with other accruing benefits by allocating 20 per cent of the proceeds to county government, 75 per cent to the national government and 5 per cent to the local community where activities are carried out.

The Senate’s Select Committee on County Royalties on Natural Resources crafted the Bill as communities hoped for a bigger share of mining royalties and other benefits with control and exploitation of resources being in focus.

Tullow Oil Plc resumed drilling operations in northwestern Kenya on November this year after stopping operations as a result of protests by local residents protests in October demanding more jobs and other benefits.

The Bill signed by committee chairperson Dr Agnes Zani said “royalties” means non-tax revenue in form of compensation for natural resources use expressed as a percentage of receipts or payment for each unit produced.

The objective is to provide for prudent administration, development and management of natural resource besides specifying regulated activities with respect to royalty imposition, collection and administration among others.

“For purposes of this Act, royalty fees refer to all charges, fees and licenses resource rents, and other impositions, royalties, surcharges prescribed under the Mining Act cap…. and any other legislation,” says the Bill.

It covers all fees and charges in respect of use of national parks as well as all fees and charges in respect of exploitation of forests. Royalty payable on minerals will be on gross sales value without discounts or commissions.