By; Lawyer Austin Sekeyian
The Mining Act, 2016 was signed into law by the President on 27th May 2016 to give effect the provision of Article 60 of Kenya 2010 Constitution
The Act sets out the principles of land policy, Article 62(1) (f) which provides that all minerals and mineral oils form part of public land and shall vest and be held by the national government in trust.
It will do so for the people of Kenya and Article 66(2) that requires parliament to enact legislation to ensure that investments in property benefit local communities and their economies.
Also, Article 69 that sets out the obligations of the state with regards to the environment, in particular, the use of the environment in a sustainable manner and Article 71 of the Constitution which requires Parliament to enact legislation to ensure that investments in property benefit local communities and their economies.
What is interesting to note is that Section 8 of the Act provides that the State has the right of pre-emption overall strategic minerals raised, won or obtained within Kenya before they are sold.
This means that the National Government will enjoy a “first option to buy” minerals extracted in Kenya before the holder of the mineral right can offer them to other potential buyers in the market.
The National Government has a lot monopoly on mining issues. The sad fact thing is that the Act does not however apply to matters relating to petroleum and hydrocarbon gases.
The Act makes it mandatory for a holder of a large scale mining licence to enter into an agreement with the community where the mining operations will be carried out.
This agreement is known as the Community Development Agreement. The general architecture and placement of certain sections especially pertaining to artisan mining looks ambiguous. What is also ambiguous is the term “community” as used in the Act.
Mining has an impact on communities. This impact can be a positive catalyst towards social and economic development, transforming people’s lives for the better.
Unless the community is engaged and supportive of a mining operation, opposition and confrontation may ensue. This will ultimately distract management from its main focus of efficiently running the mine.
The Act makes provision for the sharing of the royalties that are payable under the Act.
Section 183(5) provides that the National Government will be entitled to 70 per cent, the County Government 20 per cent and the community where the mining operations occur will be entitled to 10 per cent of the revenue.
This embodies the spirit of the Constitution that requires equitable distribution of revenue among the national and county governments and inclusion, more so, financial inclusion for the people of Kenya.
The Act also provides for revenue sharing with the communities where the mining operations occur being entitled to 10% of the revenue.
It’s important to note that the Local Content Bill 2016 before the senate is a gamer changer that will forestall these dangers and ensure greater local participation in the country’s oil and gas sector and the extractive sector in general.