• Natural resource exploiters, state, counties and local communities have stake
• Benefit Sharing Bill sought to ensure equitable gains from the exploitation
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In 2022, Kenya introduced the Natural Resources (Benefit Sharing) Bill, with a view to establishing a system of benefit sharing in natural resource exploitation between resource exploiters, the national government, county governments and local communities.
The guiding principles of the bill included transparency and inclusivity; revenue maximisation and adequacy; efficiency and equity; accountability and participation of the people; rule of law and respect for human rights of the people; and sustainable natural resources management.
The bill tasks the Commission on Revenue Allocation with the implementation of the law.
It has several functions, which include coordination and preparation of benefit-sharing agreements between an affected county and an affected entity; reviewing, and where appropriate, determining the royalty payable by an affected entity engaged in natural resource exploitation.
The commission also has to identify counties required to enter into a benefit-sharing agreement and oversee the administration of funds set aside for community projects to be implemented under a benefit-sharing agreement.
CRA also has to build the capacity of local communities in negotiations for benefit sharing and implementation of related projects, as well as in the preparation of national guidelines on benefit sharing in consultation with the relevant sectoral leaders among other roles.
“The commission shall determine and review the amount of royalties and fees payable by affected entities in respect of a particular sector where a written law does not prescribe the royalties or fees,” it says.
This is in consultation with the Council of County Governors and relevant national government entities.
Under the bill, the Kenya Revenue Authority will collect royalties as determined by the CRA from affected entities and any other payment of royalties from natural resource exploitation.
The monies collected pursuant to this section will be paid into the Fund.
KRA will declare and account to CRA the total sum collected from affected entities for each natural resource.
The bill says 20 per cent of the revenue collected will be paid into a sovereign wealth fund established by the national government.
Eighty per cent of the revenue collected will be shared between the national government and respective county governments in the ratio of 60 per cent (national hovernment) and 40 per cent (county governments).
“The monies paid into the sovereign wealth fund under subsection (1)(a) shall be paid as follows into the following funds constituting the sovereign wealth fund: 60 per cent shall be paid into a futures fund, and 40 per cent into a natural resources fund.”
At least 40 per cent of the revenue assigned to county governments will be utilised to implement local community projects and 60 per cent for the benefit of the entire county.