The Natural Resources (Benefit Sharing) Bill, 2022
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New 60-40 Revenue Sharing Formula
All revenue collected from natural resource exploitation will be shared between the National Government (60%) and respective county governments (40%). At least 60% of the county's allocation must fund local community projects, with the remaining 40% utilized for the benefit of the entire county.
Mandatory Benefit Sharing Agreements
Affected entities engaged in natural resource exploitation must enter into a benefit-sharing agreement with the respective county government. These agreements must be approved by the county assembly and registered with the Benefit Sharing Authority.
Establishment of the Benefit Sharing Authority
The Bill establishes the Benefit Sharing Authority to coordinate agreements, review and determine royalty rates where not explicitly set by other laws, and monitor compliance with natural resource exploitation regulations.
Fines up to KSh 5 Million for Non-Compliance
Any person who fails to declare information or provides false statements commits an offense. Natural persons face fines up to KSh 2 million, imprisonment up to three years, or both. Corporate bodies face fines up to KSh 5 million and potential license cancellation.
Bill No.
Bill No. 6 of 2022
Gazette No.
Supplement No. 177 of 2022
Background
The Natural Resources (Benefit Sharing) Bill, 2022 establishes a system to ensure fair and equitable sharing of benefits accrued from natural resource exploitation in Kenya. It applies to major natural resources including sunlight, surface and underground water, forests, biodiversity, genetic resources, wildlife, industrial fishing, wind, geothermal resources, minerals, and petroleum.
Key Amendments
The Bill amends several sectoral laws to align their revenue structures with the new benefit-sharing system:
- Mining Act (No. 12 of 2016): Section 183 is amended to direct state-received royalties into the Consolidated Fund for apportionment under Section 26 of the new Act.
- Wildlife Conservation and Management Act (No. 47 of 2013): Section 76 is amended to ensure wildlife revenues are paid to the National Treasury and apportioned according to this Act.
- Energy Act (No. 1 of 2019): Section 85 is amended to direct geothermal resource royalties to the National Treasury for redistribution under the 60-40 ratio.
- Petroleum Act (No. 2 of 2019): Section 58 is amended to align upstream petroleum revenue allocation with Section 26 of the new Act.
New Obligations
- Benefit Sharing Agreements: Exploiting entities must negotiate and sign benefit-sharing agreements with county governments, incorporating both monetary and non-monetary benefits.
- County Benefit Sharing Committees: Every county with exploitable natural resources must establish a County Benefit Sharing Committee to negotiate agreements and oversee community project funding.
- Local Community Benefit Sharing Forums: Affected communities must establish five-member local forums to represent local interests in negotiations and identify community projects.
- Collection of Royalties: The Kenya Revenue Authority is mandated to collect all royalties and fees from resource exploiters by the fifth day of every month and declare the proceeds to the Benefit Sharing Authority.
Penalties
- Natural Persons: Individuals guilty of offenses under the Act, such as providing false statements or withholding information, are liable to a fine not exceeding KSh 2 million, imprisonment for up to three years, or both.
- Body Corporates: Corporations are liable to a fine not exceeding KSh 5 million on conviction.
- License Consequences: Exploiting entities in continuous breach of the Act face the cancellation of their resource exploitation licenses.
Transitional Provisions
Entities lawfully exploiting natural resources before the enactment of the Act are deemed authorized to continue their operations but must fully comply with the new requirements within two years.
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Updates will be visible here once they are approved and applied to this bill.