The oil and gas industry must come out into the open

German highways are a spectacle to behold: beautifully built, clean and trimmed, great cars and no speed limits. This is the fantasy of any fast driver.

Germans have a reputation for accuracy and perfection. I always say that while their trains depart at 3:07, ours in Nairobi depart between 3 and 7.

For some reason, while most of the world decided to set speed limits at 80, 100 or 110 kph, Germans decided that their highways and their cars were better than that.

This daring approach requires legislators who are not superficial, who do not copy; legislators who contextualise and analyse; who gather data and make informed decisions on properly drafted laws.

Certainly, I am not advocating no speed limits on our Kenyan roads, but deeper study and analysis before drafting and passing laws. Drafters and legislators should consider the often-overlooked impact legislation has on society, trade, economy and security.

Just outside the beautiful, new permanent premises of the International Criminal Court in The Hague is a curious sign to which one of the students drew my attention. It says “Parking of bicycles is prohibited”, but was surrounded by hundreds of bicycles.

It is obvious that whoever decided to place that sign there had not observed reality. Most employees of the ICC cycle to work, and had to park the bikes there to avoid having to walk a mile around the building.

The bikes were not disturbing anybody and people did not pay attention to the sign.

This is what happens to laws that legislators simply copy or design artificially. Such legislators live in a bubble, or simply want to become relevant or hit the media by proposing absurd, haphazard regulations.

This was happening to us in Kenya in a key sector, one of those we cannot afford to mess around with; oil and gas and the extractives industry and this is why Strathmore Law School launched the Extractives Baraza last week.

MIRED IN SECRECY

The Extractives Baraza (EB) is an advocacy-neutral public platform that promotes knowledge, transparency and evidence-based stakeholder dialogue on the extractives sector in Kenya. Its mantra is ‘Inform, Connect and Transform’.

EB exists under the auspices of the Strathmore Extractives Industry Centre (SEIC) based at the Strathmore Law School. Its ultimate goal is to enhance citizen participation in the governance of Kenya’s extractives sector.

This initiative started as the Information Centre for Extractives Sector (ICES), and is now a revamped information platform currently supported by the Department for International Development (DFID) under their Kenya Extractives Program (KEXPRO).

EB intends to close the information gap, given that most people perceive the sector to be impenetrable and mired in secrecy. Data about our extractives industry is unconnected, haphazard and contradictory.

Such a random approach to a critical industry could easily lead us into the “Nigeriasation” of our economy. This is the milking of mineral resources for quick cash, without plans for diversification and infrastructure development.

GOLD FINDS

The secret shroud covering any mineral or gas discovery is viewed with tremendous suspicion by citizens, civil society organisations, development partners, and to some extent, industry players –yes, some players have condemned others for not opening their books to the public.

Academia has an insatiable need to carry out in-depth analyses of why the industry has attained, so-called occult-hood. The industry has recently seen significant developments in the new year; from Kenya signing a Production Sharing Agreement with Tullow Oil PLC last week to Acacia Mining announcing significant finds in western Kenya two weeks before.

Of course, the price of titanium has also shot up, making the Base Titanium project in Kwale quite lucrative.

All citizens are on tenterhooks, wondering how significantly the finds will alter their livelihoods and general wellbeing. Residents in Kakamega are excited about the gold finds there, and oil prospecting is ongoing in Kisumu and Baringo counties. Locals have visions of riches beyond anything they have seen.

Yet unfortunately, their expectations are unlikely to bear fruit given the realities of the industry, which is highly mechanised. There will be few jobs, and they will need specialised skills many of our people do not have.

PRIVITY OF CONTRACTS

Various instances illustrate secrecy within the industry. Citizens always accuse industry of colluding with government officials to defraud the State.

Secondly, citizens often accuse the state for not being transparent about the deals they engage with multi-nationals and finally, wananchi often accuse the multi-nationals of giving them a raw deal. At face value and without in-depth analysis, that often sounds like the gospel truth, but there is a need to listen to all sides.

In the first instance, industry insiders assert that the citizens as a unit have abrogated the management of the resources to institutions under law. They are therefore estopped from claiming any decision-making responsibilities, simply because that has been delegated to the National Oil Corporation, line ministries or to an extent, the National Land Commission, pursuant to Article 62 of the Constitution.

The industry then claims that they are well within legal tenets. The International Oil Companies (IOCs) then further unleash the legal concept of privity of contracts to further lock out anyone they deem as misplaced during contract negotiations.

In the second instance, the state is not allowing access to documentation, claiming that it is protecting Wanjiku by limiting her expectations. The state claims that the citizens would start making unreasonable demands based on inaccurate or inadequate information.

Lastly, in claiming that they have not swindled the public, IOCs claim citizens do not understand the dynamics of oil, gas and mining, and it would therefore be superfluous to explain these ‘complicated concepts’.

Citizens are often displeased with these excuses, saying in response that all land in Kenya belongs to the people of Kenya collectively as a nation, as communities and as individuals, per Article 61 of the Constitution.

RELIABLE INFORMATION

The process of revamping the platform has been rigorous. It was anchored on the outcome of a national-based needs assessment exercise conducted by the Strathmore Extractives Industry Centre in August–October 2016, in which most stakeholders expressed frustration for lack of a centralised, credible information portal that collects, curates and shares reliable information about Kenya’s extractives sector. It is against this backdrop that the Extractives Baraza was formed.

The EB provides job access information, tenders, opportunities for training, details on environmental impact, events happening in the sector and how you may participate, review cases and legislation to help in making project decisions, among other things.

The EB will grow into a one-stop-information shop in all matters oil, gas and mining in Kenya, and possibly Africa. It aims at benefitting the four key stakeholders around the extractives industries: investors, communities, national government and county government.

Hopefully, such an information database will help our government to legislate after considering key data, having done deep cost analysis, trade and environmental impact assessment. Hopefully we will avoid placing the “No Bikes” sign in the wrong place.

Dr Franceschi is the dean of Strathmore Law School. [email protected]; Twitter: @lgfranceschi