No 41 Of 2016 - as Plain Text by MWakili

ISSUE SPECIAL Kenya Gazette Supplement No.

162 (Acts No.

41) REPUBLIC OF KENYA KENYA PPLEM ENT GAZETTE SU ACTS,201 6 NAIROBI, 20th September, 2016 CONTENT Act- PAGE The Natural Resources (Classes of Transactions Subject to Ratification) Act,2016.

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.fr IVE 07 OcT t0r$ t | 8cx I C443 _ 001 00 iUAIRCBI, KENYA f EL i'i,r231 FAX: ?Z1269{l PRINTED AND PUBLISHED BY THE GOVERNMENT PRINTER, NAIROBI I 983 THE NATURAL RESOURCES (CLASSES OF TRANSACTIONS SUBJECT TO RATIFICATION) ACT No.

4l of 2016 Date of Assent: I3th September, 2016 Date of Commencement: 4th October, 2016 ARRANGEMENT OF SECTIONS Section PART I-PRE,LIMINARY I - Short title.

2-Interpretation.

3-Application.

PART fT-CLASSES OF TRANSACTIONS 4 -Classes of transactions.

PART M-SUBMISSION OF AGREEMENTS TO PARLIAMENT s-Submission of agreement to Cabinet Secretary.

f-Submission of agreement to Parliament.

7 -Validity of agreements.

8 - Consideration by Parliament.

9 -Relevant considerations on transactions subject to ratification.

lO-Procedure for approval by Parliament.

11-Procedure in case of different resolutions.

PART IV _ADMINISTRATIVE ARRANGEMENTS 12 -Register of transactiorrs.

13 - Confidentiality.

PART V-MISCELLANEOUS 14-Regulations.

15 -Computation of time.

16-Savings.

SCHEDULE-CLASSBS OF TRAI\SACTIONS SUBJECT TO RATIFICATION I { i 984 No.

4f Natursl Resources (ClassesolTranwctions Subiect to Ratification) 2016 TEE NATURAL RE$ITRCES (CLASSES OF TRAD{SACTTOI{S $UBmCT TO RATIFICATTON) ACT, m16 AN Agt etFnrhm h.give dct to Artieh 71 of the Consffiiffi of Kenyg 2010 and for c:onnected purnesffi I ENAqTUtrbS thp Parliameff of Kenya" as follows- FABtr I-PRELIMINARY l.

This .Act: _rnay be cited as the Natural Resources Shorttitre' (Classes of Tr,amacti,ons Subject to Ratification) Act, 2016.

2.

In tlri&Aat, unlpss the qontext otbrwise requires- IntcrPrctation' "eonce$*io*l' rrea*s tk right to exploit a natural rosourcQ p$rsrffif tsgs agf,eeflrer$ between tlrc gpntor and the beneficiary or e perrnit issuod under national or county legislation; "Cabim Ser*tafiy" rnesn$ the Cabinet $ecretary for tho tirrts being &seonsiHc for maftors rel4ting to ; eilvironmer*; "days"' reans calcndar daJs; .effeetive d*[e" has the nreaning assigned to it in Article 260 of the Constitution; "exploit4ion" r$eans an activity that confers or is aimed at conf-ering a benefit on the beneficiary of tlre grant of the conces$io$ or right but does not include an activity thaf is exploratory in nsrc; "grantotr" reffis the person who or which under an agraement rel*ing to na$rral resouxcts has granted to another the conce-usioo or right to exploit a natural resource of Kenya; "natural rosources" has the rneaning assigned to it in Article zffi af the Constitution; "prcrmit" includes a licence or other authorization validly issued under national or qounty legislation; "state organ" has the meaning assigned to it in Article 26O of the Constitution; and "transrction" lnqanS an arrangament or other dealing between a glantor and a beneficiary under which the 98s (Classes 2016 Natural Resources of Transactions Subject to Ratification) No.

4l beneficiary lawfully acquires a concession or a right to exploit a natural resource of Kenya.

3.

(1) This Act applies to any ffansaction entered into Appricadon' on or after the effective date which, under Articl 71 of the Constitution, is subject to ratification by Padiament oin account of the fact that the transaction- (a) involves the grant of a right or concession by or on behalf of any prson to another person fu tfu exploitation of a nattrral resource of Kenya; and (b) falls within the class of transactions designated as subject to ratification by section 4 of this Act.

(2) This Act applies to any transaction involving the - (a) national government, counQl government, state organ and all county government entities; and (b) grant of a right or a corrcession by a private person in cases in which such transaction is required by this Act to be ratified by Parliament.

PART II- CLASSES OF TR.AT.{SACTIONS 4.

(l) The classes of uansactions st o{rt in the clesssor Schedule are subject to ratification by Padiament pursuant rronsctrots' to Article 71 of the Constitution.

(2) Notwithstanding suhsection (l), the following classes of transactions shall not be subject to ratification by Parliament- (a) subject to paragraph (e), the grant ofa concession or right to exploit a natural resource through a permit, licence or other authorization issued in accordance with the requirements of national or county government legislation ; (b) the grant of a concession or right by a private person to exploit a natural rcsource through an agreement or a contract; (c) the grant of a concession or right to exploit a natural resouroe for scientific research, educational or other non-commercial purposes unless the exploitation involves tahing the natural resource or an portion of it outside of the jurisdiction of Kenya; 986 No.

41 Natural Resources (Classes of Transactions Subject to Ratification) 2016 (d) the exploitation of a natural resource by a Kenyan national for subsistence purposes in circumstances in which the law does not require that a permit, licence or other authorization be obtained; and (e) the exploitation of a natural resource in quantities falling below a threshold prescribed by the Cabinet Secretary by notice in the Gazette or below a threshold specified in the Schedule to the Act.

PART M-SUBMISSION OF AGREEMENTS TO PARLIAMENT 5.

( 1) As soon as practicable, but not later than Submission of agreement to fourteen days after entering into a transactior, & beneficiary Cabinet Secretary.

shall submit an agreement or other instrument evidencing the transaction to the Cabinet Secretary responsible for the natural resource that is the subject of the ffansaction.

(2) The agreement shall be accompanied by a memorandum in the prescribed form.

6.

Within seven days of receiving the agreement and Submission of agreement to the memorandum, the Cabinet Secretary responsible for the Parliament.

natural resource that is the subject of the transaction shall submit the agreement and memorandum to Parliament for ratification in terms of Article 71 of the Constitution.

7.

(1) A transaction which under this Act, is subject to Validity of ratification by Parliament shall only be effective once it is agreements.

ratified, and where Parliament has declined to ratify any transaction under this Act, the transaction shall be null and void.(2) A public officer shall not give effect to or otherwise take cognisance of a transaction subject to ratification under this Act which has not been ratified in accordance with this Act.

8.

Parliament shall deal with any agreement submitted Consideration by to it under this Act within sixty days of receiving such Parliament.

agreement in accordance with the laid down procedures.

9.

(1) The following shall be relevant considerations Rerevant in deciding whether or no-t to ratify an agreement- ill'.'lT:*:ili:"' (a) the applicable Government policy; to ratification.

(b) recommendations of the relevant regulatory agency; 987 2016 Natural Resources (Classes of Transactions Subject to Ratification) No.

41 (c) comments received from the county government within whose area of jurisdiction the natural resource that is the subject of the transaction is located; (d) adequacy of stakeholder consultation; (e) the extent to which the agreement has struck a fair balance between the interests of the beneficiary and the benefits to the country arising from the agreement; (0 the benefits which the local community is likely to enjoy from the ffansaction; and (g) whether, in granting the concession or right the applicable law has been complied with.

10.

(1) The process of approval of an agreement shall Procedure for approval by commence in the National Assembly.

Parliament.

(2)The National Assembly shall consider an agreement within thirty days of its submission to the National Assembly and shall forward its resolution to the Senate for consideration.

(3) If within thirty days of submission of an agreement to the National Assembly, the National Assembly has not forwarded its resolution on the agreement to the Senate, the Senate shall commence its consideration of the agreement and shall forward its resolution to the National Assembly.

(4) If both Houses (a) approve the ratification of an agreement; or (b) do not approve the ratification of an agreement; the Speaker of the National Assembly shall, within seven days of the decisior, notify the relevant Cabinet Secretary.

1.1.

(1) Where one House of Parliament resolves to Procedure in case of ratify the transaction but the other House resolves not to different resolutions.

ratify the transaction, the matter shall be dealt with in accordance with the procedures and mechanisms provided in Articles ll2 and ll3 of the Constitution and the relevant Standing Orders of both Houses.

(2) Where a mediation coilrmittee is constituted under subsection (1), the period for dealing with the agreement shall be extended by thirty days.

988 No.

4l Natural Resources (Classes of Transactions Subject to Ratification) 2016 PART tV - ADMIMSTRATIVE ARRANGEMENTS 12.

(l) The Cabinet Secretary shall establish and Registcror maintain a central register of agreements relating to natural Eansactims' resources and other transactions which have been ratified as provided under this Act.

(2) The Register shall be maintained in electnonic format and any member of the public may inspect it without the payment of any fee.

(3) Upon request and on payment of a reasonable fee, any member of the public may obtain an authenticated printout of an agreement from the Cabinet Secretary.

(a) The Cabinet Secretary shall, on an annual basis, publish a report on the surnmary of the transactions submitted under this Act and the status of ratification of transactions.

13.

(1) The Cabinet Secretary responsible for the conndentiaritv' transaction that is subject to ratification may, pursuant to Article 35 of the Constitution, grant a request that the agreement or portions of it ought not to be publicly disclosed on account of commercial confidentiality, national security or other public interest considerations.

(2) Where the request for confidentiality is granted, the Cabinet Secretary responsible for the natural resource that is subject of the transaction shall submit the agreement to Parliament which shall conduct the process of ratification in camera without disclosing any confidential material, but a summary of the agreement shall be made available to the public.

(3) The decision of the Cabinet Secretary on the request for confidentiality may be challenged by any person through appropriate proceedings in the High Court, and the High Court shall have the power to call for and examine the Agreement in camera before determining the matter.

PART V-MISCELLAIYEOUS 14.

(1) The Cabinet Secretary may, in consultation Rcgurarions' with the Cabinet Secretary responsible for the applicable natural resource, make regulations for giving effect to the provisions of this Act and prescribing anything required under the Act.

989 2016 Natural Resources (Classes of Transactions Subject to Ratification) No.

4l (2) Without prejudice to the generality of subsection (1), the regulations made under this section may- (a) prescribe the particular classes of transactions, entered into between the effective date and the corlmencement date which should be audited, the modalities for conducting such audits and the use for which such findings may be put; (b) define the thresholds, quantitatively, qualitatively or a combination of both, below which transactions need not be subject to ratification; (c) prescribe requirements and provide guidelines on the memorandum to accompany the agreement under section 5; and (d) prescribe procedures for making applications and requests to the Cabinet Secretary.

(3) The regulations to be prescribed under subsection 2(a) shall be made within two years of the commencement of this Act.

15.

Where under this Act the computation of tirne C-omputation of depends on ths Parliamentary calendar, the period during tirne.

which Parliament is not in session shall be eicluded in the computation.

16.

A transaction that is subject to ratification by Savings.

Parliament, which was lawfully entered into on or after the effective date but before the conunencement date, shall continue in effect and be deemed valid and lawful notwithstanding the absence of ratification by Parliament.

990 No.

4l Narural Resources (Classes of Transactions Subject to Ratification) 2016 SCHEDIILE (ss.4(1), aQ)@) CLASSES OF TRANSACTIONS SI]BJECT TO RATTFICATION Resource Transaction requiring Parliament Ratffication Crude Oil and Authorrzatron to extract crude oil or natural gas.

Natural Gas Minerals Mineral agreements with a threshold of US $ 500 million.

Water resources The extraction of sea water within the territorial sea for private commercial use.

Underground The extraction of underground steam within a water water resources conservation or other water resource protected area.

Wildlife Extraction of oil, gas, and minerals within a wildlife conservation area or other wildlife protected area.

Wildlife Export and re-export of endangered wildlife species.

Wildlife Excision or change of boundaries of gazetted national park or wildlife protection area.

Forests Long term concession of a gazetted forest resource.

Forests Excision or change of boundaries of gazetted public forests oI nature reserves Any other transaction subject to ratification under an Act ol Parliament.

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