Embracing Transparency and Accountability in Kenya’s Extractives Sector

Abstract

Good governance of the extractive industry (EI)1 is critical in global governance of the natural resources.2 The Extractive Industry has been defined as the process where the earth’s raw materials are removed, processed and distributed for use by consumers. The earth’s materials could include oil, gas, hydrocarbons, and precious metals and the process of removing the earth’s minerals include extraction, mining, drilling, dredging and quarrying. Kenya has recently discovered vast mineral resources such as oil, gas, coal, titanium. These resources could spur Kenya’s social economic development if well managed. Lessons of potential growth from EI include countries such as Ghana3 and Norway4 that are well endowed in natural resources have demonstrated that a transparent and accountable EI sector has potential to contribute towards sustainable development in addition to reducing poverty risks related to conflict and corruption.5 However, in countries such as Congo, Sierra Leone and Nigeria that are characterized by poor governance systems, the EI has been more of a curse than a blessing as it has resulted into unending conflict6 and slow economic growth.7 1 Extractive industry is the activities where raw materials from the earth such as soil, minerals, oil, gas, aggregates are extracted and processed for use by consumers. 2 Stephen D, Natural Resource Governance: New Frontiers in Transparency and Accountability (Transparency and Accountability Initiative: London, 2010) at 6. 3 Heller P, Considerations for Indonesia’s New Government: Transparency and Accountability in the Oil and Mining Industries, Briefing Paper (Natural Resource Governance Institute: Gadjah Mada, 2014) at 1. 4 Ibid at 1. 5Ibid. 6 Hofmann B, Transparency and Accountability in Africa’s Extractive Industries: The Role of the Legislature (National Democratic Institute for International Affairs: Washington, 2007) at 36. 7 Sachs J D, Natural Resource Abundance and Economic Growth (Harvard University: Cambridge, 1997) at 1 13 The 20th century has witnessed phenomenal growth in Kenya’s mining industry due to discovery of various mineral deposits of oil in Turkana, coal in Kitui and titanium in Kwale.8 Relatedly, to accompany management of these natural resources, principles governance, environmental conservation sustainable use of natural resources are well articulated in Kenya’s Constitution. Article 10 of Kenya’s Constitution focuses on good governance while Article 69(1) requires sustainable natural resource utilization that respects principles of natural resources conservation. The constitution also enshrines the citizen’s right to information, under Article 35 of the Bill of Rights values and principles of e public service, entrenched by Article 232(1) (e) (f) among others. Parliament is mandated to create legislation to implement provisions on sustainable extraction in EI9 . The courts have advanced principles of and values of good governance through various court decisions discussed by this research. In Peter Makau Musyoka and others v. the Ministry of Energy and Petroleum, the Ministry of Mining, Fenix Co. Ltd and others, 10it was demonstrated that the absence of openness in most of the exploration contracts signed was against the constitution of Kenya. For example, the relation between the stakeholders and local community was neither transparent nor grounded in law as it often failed to protect the environment. 8 Mutua E, Report on the Policy, Legal and Regulatory Framework in the Extractive Industry of Kenya Consideration of the Interests of Local Communities, Women, Youth and the Vulnerable, and the Environmental Sustainability of the Industry: A Comparative study of Turkana, Kitui and Kwale Counties of Kenya, April 2014. 9 Article 72, Constitution of Kenya, 2010. 10 High court of Kenya at Machakos Constitutional Petition No. 305 of 2012: Members of Mui community (Kitui county) alleged lack of transparency in concessioning, agreement signing, lack of community and public participation and violation of right to clean environment.