Investors may have to pay royalties

Saturday, November 29, 2014

By OUMA WANZALA

An oilrig worker at Ngamia 3 oil exploration site in Nakukulas Village, Turkana County, on July 13, 2014. Investors in oil exploration, agriculture and mining putting up their investments on land owned communally will be required to pay royalties to the local people, based on the income they generate if a Bill before the Senate becomes law. PHOTO | BILLY MUTAI |

An oilrig worker at Ngamia 3 oil exploration site in Nakukulas Village, Turkana County, on July 13, 2014. Investors in oil exploration, agriculture and mining putting up their investments on land owned communally will be required to pay royalties to the local people, based on the income they generate if a Bill before the Senate becomes law. PHOTO | BILLY MUTAI |  NATION MEDIA GROUP

In Summary

  • Every investor will also be expected to spend not less than 30 per cent of their net income for provision of services to the people and laying infrastructure.
  • The Bill tabled by Senate Majority Leader Prof Kithure Kindiki and in its second reading seeks to provide for the recognition, protection, management and administration of the land.

Investors in agriculture, mining and oil exploration putting up their investments on land owned communally will be required to pay royalties to the local people, based on the income they generate if a Bill before the Senate becomes law.

Every investor will also be expected to spend not less than 30 per cent of their net income for provision of services to the people and laying infrastructure.

A Bill now in its second reading, will also require investors to build capacity and transfer technology to the people with a continuous monitoring and evaluation of the impact of investment.

The Bill tabled by Senate Majority Leader Prof Kithure Kindiki and in its second reading seeks to provide for the recognition, protection, management and administration of the land.

Prof Kindiki said the Constitution requires Parliament to enact legislation on how such land will be managed and used, among other issues.

The Tharaka Nithi senator said by the Bill does not single out any investor but only wants the local people to get the full benefit of resources available in their land.

“There have been complaints in the past that local communities were not getting the benefits of resources that are available, and this Bill will address those concerns,” he said, adding that the payment of royalties is a worldwide issue and cited countries such as Brazil, Mozambique and Madagascar among others that have adopted the policy.

EMPOWERING LOCAL PEOPLE

“We want investors to empower local people where there investments are. In the past we have seen the national government get resources from one area and develop another area. There is no guarantee that royalties paid to Nairobi will benefit local communities,” Prof Kithiki said.

The people will also have powers to adopt by-laws to regulate the management and administration of their land and such laws will provide regulation for investment, determination of any leases granted for purpose of investment, conservation, and land use planning among other lawful matter.

However, the government will have power to regulate the use of the land in the interest of the public.

The Bill also states that unregistered land will be held in trust by the county government on behalf of the communities for which it is held.

It  also states that once an unregistered land is registered, the role of the county government  will  lapse and the committee will assume the management and control.

COMPULSORY ACQUISITION

The bill also states that such land may be converted to public land through compulsory acquisition, transfer and surrender.

The people in consultation with the National land Commission will also be able to set aside part of the land for public purposes.

The Bill also provides that land may be registered in   the name of a clan or family or in the name of a traditional leader in the trust.

Before registration of any such land, the commission will be required to facilitate the formation of a management committee.

The committee will have representative of all levels with consideration of geographical and ethnic distribution of the local people.

SOURCE: http://www.nation.co.ke/news/Investors-may-have-to-pay-royalties/-/1056/2539908/-/po0v81/-/