Senate Bill no6 on the Natural resources benefit sharing bill 2022

REPUBLICOFKENYA

PARLIAMENT

SENATE BILLS

(Bill No. 6 of 2022)

THE NATURAL RESOURCES (BENEFIT SHARING) BILL, 2022

(A Bill published in the Kenya Gazette Supplement No. 177 of 8"h November, 2022 and passed by the Senate, with amendments, on 1" August, 2023)

THENATURALRESOURCES(BENEFITSHARING)BILL,2022

ARRANGEMENTOFCLAUSES

Clause

PARTI-PRELIMINARY

• 1 — Short title.

• 2 ——Interpretation.

• 3—Application of the Act.

• 4 — Guiding principles of benefit sharing.

PARTII-ESTABLISHMENTANDMANAGEMENTOFTHEBENEFIT SHARINGAUTHORITY

• 5—Establishmentof theBenefitSharingAuthority.

• 6—Functions of the Authority.

• 7 ——Board of the Authority.

• 8—Tenure of office.

• 9 -——- Qualifications for appointment.

• 10 ——Vacation of office.

• 11 ——Powers of the Board.

• 12 ——Committees of the Board.

• 13— Power todelegate.

• 14—Remuneration and allowances.

• 15—Conduct of business and affairs of theBoard.

• 16—Director-General.

• 17—Tenure of office of the Director-General.

• 18—Functions of theDirector-General.

• 19 ——Vacation of office of theDirector-General.

• 20 ——Common seal of the Authority.

• 21 ——Staff of the Authority.

• 22 ———Protection from personal liability.

• 23 ——- Liability of the Authority to damages.

PARTIII-COLLECTIONOFROYALTIESANDFEES

• 24 ——— Imposition of royalties and fees.

• 25—KenyaRevenueAuthority to collect royalties.

• 26 ——Revenue sharing ratio.

PARTIV-BENEFITSHARINGAGREEMENT

• 27—Benefit sharing agreement.

• 28—Establishment of a CountyBenefit Sharing Committee.

• 29—Functions ofa CountyBenefit Sharing Committee.

• 30—Approval of a Benefit Sharing Agreement.

• 31 —Local CommunityBenefit Sharing Forum.

PARTV-FINANCIALPROVISIONS

• 32 ———Funds of the Authority.

• 33—Financial year.

• 34 -—Accounts.

• 35—AnnualReport.

PARTVI—MISCELLANEOUSPROVISIONS

• 36—Use ofretainedfunds.

• 37—Offences.

• 38—Transitionalprovisions.

• 39 ——— Power to make Regulations.

• 40—Amendment tosection183ofAct No.12 of2016.

• 41—Amendment to section 7 of Act No.47 of 2013.

TheNatural Resources(BenefitSharing)Bill,2022

42 —Amendment to section85 ofAct No.1 of 2019.

43—Amendment to section58ofAct No.2of2019.

THENATURALRESOURCES(BENEFITSHARING)BILL,2022

ABill for

ANACTofParliamenttoestablishasystemofbenefitsharing innaturalresourceexploitationbetweenresource exploiters, the national government, county governments and local communities; and for connected purposes.

ENACTEDbytheParliamentofKenya,asfollows-

PARTI-PRELIMINARY

Short title.

• 1.This Act may be cited as the Natural Resources (BenefitSharing)Act,2022.

Interpretation.

2. In thisAct,——

"affected county” means a county in which a natural resource is exploited;

"affected entity” means an organization or person involved in the exploitation of a natural resource towhich this Act applies;

"Authority" ’means the Benefit Sharing Authority establishedunder section5;

"benefit’ means any gains, proceds or profits from the exploitation of naturalresources;

"benefit sharing” means the sharing of any benefits arisingfrom theexploitationofnaturalresourcesina fair and equitable manner;

"benefit sharing agreement” means an agreement on the mannerinwhichrevenue accruingfromtheexploitationof naturalresources shall be shared out between an affectedentity and a county;

"Board”means Board of the Benefit SharingAuthority

No.35of2016.

No.17 of2015.

Applicationof the Act.

constitutedundersection7;and

"Cabinet Secretary" means the Cabinet Secretary responsible for matters relatingtofinance;

"county executive committee member" means the county executivecommitteememberresponsibleformattersrelatingto finance in the respective county;

"Director-General" means Director-General of the Benefit Sharing Authority appointed under section 16(1).

"exploitation"meanstheextractionoruseof a natural resource for commercial benefit;

"industrial fishing" means the exploitation of fishing resources

• (a) using an industrial or a semiindustrialfishingvessel as provided under the Fisheries Management and DevelopmentAct;or
• (b)by a foreign entity.

"local community"means

• (a) people living in a ward within which a natural resourceis situated;and
• (b) peopledisplaced tomakewayfor theexploitation ofa natural resource;

"natural resources"means the natural resources provided under section3 of this Act;

"officer" has the meaning assigned to it under section 3 of the CompaniesAct;and

"royalties"includes fees or payments by whatever name, paidby an affected entityfor the exploitationor exploration of a natural resource in Kenya.

3.This Act shall apply to the following natural resources-

• (a) sunlight;

• (b) surface and underground water;

• (C) forests, biodiversity and genetic resources;

• (d) wildliferesources;

• (e) industrial fishing;

• (f) wind;

• (g) geothermal resources;

• (h) minerals; and

• (i) petroleum.

Guiding principles of benefit sharing.

4. All persons shall be guided by the following principles in theperformance of theirfunctions under this Act-

• (a) transparency and inclusivity;

• (b) revenue maximization and adequacy;

• (c) efficiency and equity;

• (d) accountability and participation of the people;

• (e)ruleof lawandrespectfor humanrightsof the people;

• )sustainable natural resourcesmanagement; and

• (g)environmental protection andrestoration.

PARTII-ESTABLISHMENTANDMANAGEMENTOF THEBENEFITSHARINGAUTHORITY

Establishmentof the Benefit Sharing Authority.

5. (1) There is establishedthe Benefit Sharing Authority.

• (2)TheAuthorityshallbeabodycorporatewith perpetual succession and a common seal and shall, in its corporate name,be capable of—

Functions of the Authority.

• (a) suing and being sued;
• (b) taking,purchasing or otherwise acquiring holding, charging and disposing of movable and immovable property;
• (c) borrowingorlendingmoney;and
• (d) doingorperformingsuchother thingsor actsfor the proper performance ofitsfunctions under this Actwhichmaybe lawfullydone orperformed by a body corporate.

6. (1)ThefunctionsoftheAuthorityshall be to

• (a) coordinate the preparation of benefit sharing agreements between an affected county and an affected entity;
• (b) review and, where appropriate, determine the royaltiespayablebyan affectedentitycngaged in natural resource exploitation;
• (c) identifycountiesthatarerequiredtoenterintoa benefit sharing agreement under this Act in consultation with the respective county governments;
• (d) overseetheadministrationoffundssetasidefor community projects to beimplemented under a benefit sharing agreement;
• (e) facilitateandmonitortheimplementationofa benefitsharingagreemententeredintobetween a countygovernment and an affected entity;
• () conductresearchregarding the exploitation and development of natural resource and benefit sharing in Kenya;
• (g) determine appeals arisingout of conflictsregarding the preparation and implementation of benefit sharing agreements;
• (h) advise the nationalgovernment onpolicy and the enactment of legislationrelatingtobenefit sharing in resource exploitation;
• (i) oversee the establishment of benefit sharing

Board of the Authority.

committees andforums established under thisAct;

• ! ensure the proper and timelypayment offunds to counties and local communities asprovided under this Act;

• (k) build the capacity of local communities in negotiationsforbenefitsharing andimplementation of related projects;

• (1) prepare national guidelines on benefit sharing in consultation with the relevant stakeholders;

• (m) identify,in consultation withsector-specific organizations,incentives and benefits to promote the conservation of natural resources;

• (n) promote value addition in natural resources;

• (0) promotelocal contentinitiatives ontheexploration andexploitationofnaturalresourcesunderthisAct; and

• (p) promotetherestorationoftheenvironmentafterthe exploitation of anaturalresourceinanaffected county.

• (2)The Authority may,in furtherance of its functions, collaborate with such other bodies or organizations within or outsideKenyaasitmayconsidernecessaryforthebetter performanceofitsfunctionsunder thisAct.

• (3) The Authority shall have regard to the following in the performance of itsfunctions——

• (a)all existinglawregulating thenatural resources sector in Kenya;

• (b)all existing arrangementsforbenefit sharingbetween local communities and an affected entity under any law inKenya;and

• (c)obligationsimposed onKenya under anyinternational treatyoragreementrelating tothe exploitation of naturalresources.

7.(1) The management of the Authority shall vest in a Boardwhichshallconsistof

• (a) a chairperson appointed by the President with the

approval of Parliament;

• (b) the Principal Secretaryresponsiblefor finance or a designated representative;
• (c) the Principal Secretary responsible for mining or a designatedrepresentative;
• (d) the Principal Secretaryresponsible for petroleum ora designatedrepresentative;
• (e) the Principal Secretary responsible for energy or a designated representative;
• (f)twopersons ofoppositegender nominated by the Council of CountyGovernors to represent such communities as the Council shall determine;
• (g)onepersonnominatedbyaregistered association representing a majority of members of county assembliestorepresentlocalcommunities;
• (h) onepersonnominatedby anumbrellabody representingtheinterestsoftheprivatesectorin Kenya; and
• (i) the Director-General appointed by the Board in accordancewithSection16.
• (2) The Chairperson shall be competitively recruited by the Public Service Commission and appointed by the President by notice in the Gazette.
• (3) The Cabinet Secretary shall, with the approval of Parliament, appoint the persons nominated under subsection (1)(f),(g)and (h)by notice in the Gazette.
• (4) In nominating and appointing persons as members of the Board, the nominating authorities and the Cabinet Secretary shall--
• (a)haveregard to—
• (i)the principles ofnon-discrimination on the basis of gender, disability, youth and marginalized persons under the Constitution; and
• (ii) the requirements of Chapter Six of the Constitution;and

(b)ensure that the nominations reflect the regional

diversity of thepeople ofKenya.

Tenure of office. 8.(l)The members of the Board other than the Director-General shall

• (a) hold office for a term of three years and shall be eligiblefor reappointmentfor one further term;and

• (b) serve on a part-time basis.

• (2)Paragraph (l)(a) shall not apply to Principal Secretaries who serve as members of the board.

Qualificationsfor appointment.

• 9.Apersonisqualifiedforappointmentas the chairperson or a member of the Board under Section 7 (1) (f), (g) and (h)if that person——

• (a) holds a degree from a university recognised in Kenya; and

• (b) has knowledge and at least seven years’ experience in—-

• (i) law;

• (i) environmental management;

• (iii) economics;

• (iv) public finance;

• (v) mining;

• (vi) communitydevelopment;or

• (vii) any other related field.

Vacation of office.

10.The office of the chairperson or a member of the Board appointed under Section 7 (1)(f), (g) and (h) shall become vacant if the Chairperson or member-

• (a) is unable to perform the functions of the office by reason of mental or physical incapacity;

• (b)is otherwise unable or unfit to continue serving as the Chairperson or member of the Board;

• (c) is adjudged bankrupt;

• (d) is convicted of a criminal offence and sentenced to a term ofimprisonment of notlessthansixmonths;

Powersofthe Board.

Committeesofthe Board.

• (e)is absent, without reasonable cause, from three consecutivemeetingsoftheBoard;
• (f) resigns in writing addressed, in the case of the Chairperson,to the President and in the case of a member appointed under section 7 (1) (f), (g) or (h), to the Cabinet Secretary;
• (g) fails to declare their interest in any matter being considered by the Board; or
• (h) dies.
• 11.(l) The Board shall have all the powers necessary for theperformance of thefunctions of theAuthorityunder this Act and in particular, but without prejudice to the generality of the foregoing,the Board shall have the power to—
• (a) enter into contracts;
• (b) manage, control and administer the assets of the Authorityin such manner and for such purposes as best promote thepurposesfor which theAuthorityis established;
• (c) receive any gifts, grants, donations or endowments made totheAuthorityoranyothermoniesinrespect of theAuthority and make disbursements therefrom in accordance with theprovisions of this Act;
• (d)require from any person suchinformation as it considersnecessaryfortheperformance of its functions under this Act;and
• (e)open and operate a bank account for the funds of the Authorityintowhichallmoniesreceivedbythe Authorityshallbepaidin thefirstinstanceandoutof which all payments madeby theAuthority shall be made.
• (2) The Board shall consult the respective Cabinet Secretary responsible for an affected natural resource in carrying outitsfunctionsunder thisAct.
• 12.(1) The Board may establish such committees as it may consider necessaryfor theperformance of its functions and theexerciseofitspowersunderthisAct.

Powertodelegate.

Remuneration and allowances.

Conductof business and affairs of the Board.

Director-General.

• (2)The Board may invite any person whose knowledge and skills are found necessaryfor theperformance of its functions to sit in any committee established under subsection (1).
• 13.The Board may,by resolution either generally or in anyparticular case,delegate to any committeeof theBoard or to any member, officer,employee or agent of the Authority the exercise of anyof thepowers or theperformance of anyof the functionsordutiesoftheBoardunderthisAct.

14. The remuneration, allowances, expenses and other emolumentsofmembersandstaffoftheAuthorityshallbe determined bytheSalaries and Remuneration Commission. 15. The Board shall conduct its affairs in accordance with theprovisions of the Schedule.

• 16.(1)There shall be a Director-General of the Authority who shall be competitively recruited and appointed by theBoardon such terms and conditions as theBoard shall determine.

(2) A person qualifies for appointment as a Director-General underSubsection(l)ifsuchperson—

• (a)holds a degree from a university recognized in Kenya;and
• (b) hasknowledge and at least tenyears'experience in
• (i) law;
• (ii) environmentalmanagement;
• (iii) economics;
• (iv) public finance;
• (v) mining;
• (vi) communitydevelopment;or
• (vii) any other related field.

(3)TheDirector-General shall bean ex-officiomember of the Boardand shall havenoright tovote at anymeetingof the Board.

Tenure ofofficeof the DirectorGeneral.

Functions of the Director-General.

Vacationofoffice of the DirectorGeneral.

Commonsealof the Authority.

17. The Director-General shall be appointed for a term of four years and shall be eligible for reappointment for one further term.

18.(l) The Director-General shall be the Chief Executive Officer of theAuthority and secretary to theBoard.

• (2)TheDirector-General shall,for the effectiveperformance of thefunctions under thisAct andsubject to the direction of the Board——
• (a) be responsible for the day-to-day management of the Authority;
• (b) manage the funds, property and affairs of the Authority;
• (c) be responsiblefor the management of the staff of the Authority;
• (d) causetobepreparedfor the approvalof theBoard
• (i)the strategic plan and annual plan of theAuthority; and
• (ii) the annual budget and audited accounts of the Authority;and
• (e) perform such other duties as may be assigned by the Board.
• 19.The Board may terminate the appointment of the Director-Generalinaccordancewiththe terms and conditionsof service for-
• (a) inability to perform the functions of the office arising out of physical or mental incapacity;
• (b) grossmisconduct ormisbehaviour;
• (c) incompetenceorneglectofduty;or
• (d) anyotherground that wouldjustifyremovalfrom officeunder theterms andconditions ofservice.
• 20.(1) The common seal of the Authority shall be kept in the custody of theDirector-General or such other person as the Board may direct and shall not be used except with the express authorityanddirectionoftheBoard.

Staffofthe Authority.

Protectionfrom personal liability.

Liability of the Authorityto damages.

Imposition of royaltiesandfees.

• (2)Thecommonsealof theAuthorityshallbeauthenticated by the signature of the Chairperson and the Director-General of the Board or in the absence of either person, such other member of theBoard who shall be designated by theBoard for that purpose.
• (3)The common seal of theAuthority shall,when affixed to a documentandauthenticated,bejudiciallyandofficiallynoticed and unless the contraryis proved,any order or authorization by the Board under this section shall be presumed to have been duly given.
• 21.(1) The Board may employ such officers, agents and staff as arenecessaryfortheproper and efficient discharge of the functionsoftheAuthorityunderthisAct.
• (2) The staff employed under subsection (1) shall serve on such terms and conditions as the Board may, subject to Section 5l, determine.
• 22.No matter or thing done by a member of the Board orby anyofficer,employeeor agentoftheAuthorityshall,if the matterorthingisdonebonafideforexecutingthefunctions, powers or duties of the Authority under this Act, render the member, officer, employee or agent or any person acting on their directionspersonally liable to any action,claim or demand.
• 23.Section 22shallnot relieve theAuthority of liability laworbythefailure,whetherwholly orpartially,ofanyworks.

PARTIII-COLLECTIONOFROYALTIESANDFEES

• 24.(1) The Authority shall,in consultation with the Councilof CountyGovernorsandrelevantnationalgovernment review the amount of royalties and fees payable by affected entities inrespect of a particular sector where awritten lawdoes notprescribetheroyaltiesorfees.
• (2) In making a determination under Subsection (1), the Authorityshalltakeintoaccount

Kenya Revenue Authoritytocollect royalties.

• (a) the totalcapitalinvestment of the affected entity;
• (b) theprevailinginternationalmarketvalueof the commodity from which royalty is payable;
• (c) thecommercialviabilityofthenaturalresource being exploited;
• (d) theimpactoftheexploitationonthelocal community, the affected county and the environment;and
• (e) obligations of the affected entity under any existingbenefitsharing agreementwiththe affected county.
• (3) Where a written law prescribes the royalty,fees,or payments in a particular natural resource sector,the relevant written law shall apply with respect to that sector.
• (4)TheAuthority shall monitor compliance withthe writtenlawandtheimplementationof anybenefitsharing agreement entered intopursuant to thisAct.
• 25.(1) The Kenya Revenue Authority shall collect royalties asdeterminedby theAuthorityunderSection24from affected entities and any other payment of royalties from natural resourceexploitationundertakenunder anyotherwrittenlaw.
• (2) The Kenya Revenue Authority shall declare and pay monies collected under Subclause(l) to the Consolidated Fund by the fifth day of every month.
• (3) This section shall supersede the provisions of any law withrespect tothecollectionof royalties andfees chargedfor the exploitation of natural resources inKenya.
• (4)The Kenya Revenue Authority shall declare and account totheAuthoritythe total sum collectedfrom affected entitieswith respect to each naturalresource asprovided for under this Act.
• (5)The Authority shall submit to the respective county government declarations received from the Kenya Revenue Authority underSubsection (4) at least once every quarter.

• (6)The countyexecutive committeemember in the respective countyshall submit to therespectivelocalcommunity declarations received from the Authorityunder Subsection (5) within twenty one days of receipt.

Revenue sharing ratio.

• 26.(l) The revenue collected under this Act shall, subject to Subsection (2),be shared between the National Government and respective county governments in the ratio of sixtypercent to theNational Government andfortypercent to the countygovernments.

• (2) At least sixty per cent of the revenue assigned to county governments under subsection (l) shall be utilised to implementlocalcommunityprojects andfortyper centof that revenue shall be utilised for thebenefit of the entire county.

• (3)Where natural resources bestride two or more counties,the Authority shall determine the ratio of sharing the retainedrevenue amongst the affected countiesinconsultation withtheaffected counties.

• (4)In determining the ratio of sharing the retained revenue amongst counties sharing a resourceunder Subsection (3),the Authority shall take into account—

• (a) thecontribution of cachaffected county in relation to theresource;

• (b) the inconvenience caused to the county in the exploitation of thenatural resource; and

• (C) anyexistingbenefitsharingagreementwith an affected entity.

• (5)The Authority shall, in consultation with the lead agencies with respect to each natural resource, review the revenue sharingratio after everyfiveyears andpresentits recommendations toParliamentfor approval.

PARTIV-BENEFITSHARINGAGREEMENT

Benefit sharing

27.(l) Every affected entity shall enter into a benefit

• agreement. sharingagreementwith therelevantcountygovernmentbefore the exploitation of a natural resourcein the affected county.

• (2) The benefit sharing agrcement shall include non monetarybenefitsthatmayaccruetothecountyandthe contribution of the affected entityin realizing the same.

Establishmentofa County Benefit Sharing Committee.

• 28.(1) Each county that has a natural resource to which this Act applies shall establish a County Benefit Sharing Committee.

• (2)A CountyBenefit Sharing Committee shall consist —Jo

• (a) the county executive committeemember responsible for finance;

• (b) the county executive committeemember responsible for matters relating to natural resources;

• (c) two technical officers of the relevant county departments,appointed by the county executive committeememberinconsultationwiththe countyexecutivecommitteemember responsible for therespective natural resources;and

• (d) five persons, two of whom shall be of the opposite gender, elected by the local communities wherethenaturalresourceisfoundand representing theareas withthemainnatural resources within the county.

• (3)The members of the County Benefit Sharing Committee elected under Subsection (2)(d) shall be appointed by thecountygovernor and serveforone single term of fiveyears.

• (4)The members of the County Benefit Sharing Committeeshallbepaidsuchallowancesasshallbedetermined by theCountyPublicServiceBoardinconsultationwith the Salaries andRemuneration Commission.

• (5)The members of the County Benefit Sharing Committeeshall electa chairpersonfrom amongstthemembers clected under Subsection (2)(d).

• (6)The county chief officer responsiblefor matters relating to natural resources shall serve as the secretary to the CountyBenefit Sharing Committee.

• (7) The Cabinet Secretary shall, in consultation with the Council of County Governors,make Regulations for the conduct oftheaffairsoftheCountyBenefitSharingCommittees.

• (8)Wherearesourcebestrides twoormore counties,the affected counties’Benefit Sharing Committees shall constitute a jointcommitteewithequivalentmembershiptooverseethe negotiation of a jointbenefit sharing agreementwith an affected entity.

Functions ofa CountyBenefit Sharing Committee.

29. The functions of cach County Benefit Sharing Committeeshallbeto-

• (a) in consultation with the respective local community and uponconductingpublic participation,negotiate the terms of a benefit sharingagreementwithanaffectedentityon behalf of the countygovernment;

• (b) monitor the implementation of projects required tobeundertaken in thecountypursuant toa benefit sharing agreement;

• (c) determinetheamountofmoneytobeallocated toeachlocalcommunityfrommoniesthat accrueunder abenefit sharing agreementunder this Act;

• (d) convenepublicforumstofacilitatepublic participationwithregardtoproposedbenefit sharing agreements duringnegotiationsprior to executionby the county government;

• (e) convenepublicforumsforthepurpose of facilitating publicparticipationwithregard to communityprojectsproposedtobeundertaken usingmonies thataccruetoacounty governmentpursuant to thisAct;and

• (f) make recommendations to the county government on projects to be funded using monieswhich accrue to thecountygovernment pursuant to this Act.

Approval ofa benefit sharing agreement.

• 30.(l) Every benefit sharing agreement shall be approvedbytherespectivecountyassemblypriortothe executionof theagreementbytherespective countygovernment.

• (2) Each benefit sharing agreement shall be deposited with theAuthoritywithin thirty days of its execution and a copy shallsimultaneouslybesubmittedtotheSenate.

Local Community Benefit Sharing Forum.

• 31.(1) There shall be established by each affected local community a Local BenefitSharing Forum comprising of five persons,two of whom shall beof the opposite gender,elected by theresidentsofthelocal community.

• (2) A public officer shall not be eligible for election as amember ofa local community benefit sharingforum.

• (3) The members of a local community benefit sharing forum shall be appointedbythe respective county executive committee member responsible for matters relating to natural resources and serve for a single term of five years.

• (4)Therespective countygovernment shall facilitate meetings and the election of themembers of theLocal CommunityBenefit Sharing Forum.

• (5)A local communitybenefit sharing forum shall not hold more than eight meetings in one year.

• (6)The local community benefit sharing forum shall ensurethat therespectivelocalcommunitybenefitsfromthe exploitation of natural resources and shall, for this purpose -—

• (a) collectandcollatetheviewsofthelocal communityandrepresenttheinterestsofthe local communityin thenegotiationswiththe respective CountyBenefit Sharing Committee andin theimplementation of a BenefitSharing Agreement;

• (b) in consultation with the local community,

identifylocalcommunityprojectstobe supportedbymoneyallocated to thelocal community by the County Benefit Sharing Committeeunder thisAct;and

• (c) oversee theimplementation nofprojects undertaken intherelevantlocalcommunity using funds devolved under thisAct.

(7) The members of a local community benefit sharing forum shall bepaid such allowances as shall be determined by the CountyPublic Service Board in consultation with theSalarics andRemuneration Commission.

PARTV-FINANCIALPROVISIONS

Funds of the Authority.

• 32.Thefunds of the Authority shall consist of

• (a) suchmoniesorassetsasmayaccrue toorvest in theAuthorityinthecourseoftheexerciseof its powers or the performance of its functions under this Act;

• (b) suchmoneyasmaybeprovidedbythe NationalAssemblyfordefraying expenses incurred in the implementation of this Act;

• (c) allmoniesfrom anyother sourceprovidedfor or donated or lent to theAuthority;and

• (d) suchothermoniesthatmaylawfullyaccruein thedischarge of functions of theAuthority under thisAct.

Financial year.

• 33.Thefinancialyear of theAuthority shallbe the period of twelve months ending on thirtiethJune in each year.

Accounts.

• 34.(1) The Authority shall cause to be kept all proper books and records of account of the income,expenditure and assets of theAuthority.

• (2) Within three months of the end of each financial year, the Authority shall submit to the Auditor-General,the accounts of theAuthoritytogetherwith—

• (a)a statement of the income and expenditure of the Authority during thatfinancialyear; and

No.34 of2015.

Annual Report.

• (b) )astatementoftheassetsandliabilitiesofthe Authority asatthelast dayof thatyear.
• (3)Theaccounts of the Authority shallbe audited and reported upon in accordancewith thePublicAudit Act.
• (4)The Authority may establish,control,manage,maintain and contributetopensionandprovidentfundsforthebenefitof employees of the Authority and may grant pensions and gratuities from any such fund to the said employees upon their resignation,retirement or separation from theserviceof the Authority or,as the casemay be,to the dependants of any such employee upon such employee's death.
• 35.(1)Within threemonths of the end of cach financial year,theAuthority shall submit-
• (a) to the Auditor-General, the accounts of theAuthority in respect of thatyear together with—
• (i)a statement of theincome and expenditure of the Authority during thatyear;and
• (ii)a statement of the assets and liabilities of the Authority as at thelast dayof thatfinancialyear; and
• (b)to the President and Parliament, an annual report in respect of that year containing--
• (i) the financial statements oftheAuthority including—-
• (A) astatementoftheincomeandexpenditure oftheAuthorityduring thatyear;and
• (B) astatementoftheassetsandliabilitiesof theAuthorityasatthelastdayofthat financial year;
• (i) a list of institutions contributing to benefit sharing under this Act, the proportion of benefit and the local communitythatbenefited;
• (i)the total sums contributed towards benefit sharing and its distribution;
• (iv)the progress madein theimplementation of the Authority'sfunctions;and
• (v) any other information that the Authority may

consider necessary.

• (2)TheAuthorityshall publish the annual report in the Gazetle andin at leastone newspaper of national circulation.

PARTVI-MISCELLANEOUSPROVISIONS

Uses of retained funds.

36.Monies distributed to countiesunder thisAct shall be utilized for projects that

• a) are prioritized by the County Benefit Sharing Committee;

• b) are prioritized by the local communitybenefit sharing forums;

• C meet the socio-economicneeds oftheresidentsof theCounty or local community;and

• (P) are of publicinterest and are community-based in order to ensure that theprospectivebenefits are availabletoawidespreadcross-sectionof the inhabitantsofaparticular area.

Offences.

• 37.(1) A person who

• (a) fails to furnishinformation required to be furnished to the Authority under this Act;

• (b) makes a statement which the entityknows tobe falseorwhichtheentityhasnoreasonto believe tobetrue;or

• C knowingly makes a false statement under this Act;

commits an offence.

• (2) A person who is found guilty of an offence under Subsection (1) is liable, on conviction,--

• (a) in the case of a naturalperson,toa fine not exceeding two millionshillings orto imprisonment for aterm not exceeding three

Transitional provisions.

Power to make Regulations.

years or to both such fine and imprisonment; and

• (b) in thecaseofabodycorporate,toa finenot exceeding five million shillings.
• (3) Where a body corporate is found guilty of an offence under this Act, every officer of that corporation is deemed to have committed an offence and is liable,on conviction,to a fine not exceeding twomillion shillingsor toimprisonmentfor a term not exceeding threeyears or to both such fine and imprisonment.
• (4)An affectedentity that continues tobeinbreachof this Act may beliable to cancellation of its licence.

38. (1) An affected entity that, immediately before the commencementof thisAct,waslawfully authorised toexploit a naturalresourceunder thisActshallbedeemed tobeauthorised to conduct such exploitation under this Act.

• (2)Despite Subsection (l),an affected entity shall complywiththeprovisions of thisActwithintwoyearsof the commencementoftheAct.
• 39.(1) The Cabinet Secretary may, in consultation with the Authority and the Council of County Governors,make Regulations for thebetter carrying out of the provisions of this Act.
• (2)Inparticular andwithoutprejudiceto thegenerality of the power conferred by Sub-section (1),the Cabinet Secretary shall make Regulations-
• (a)prescribing the fees in respect of anything required to be done under this Act;
• (b) prescribing the modefor thepayment of royalties under this Act;
• (C) prescribingtherevenuesharingformulabetween counties that share a natural resource; and
• (d) prescribing anything which is required to be prescribed or is necessary to give effect to this

Amendment to section183ofAct No.12 of2016.

Amendment to section76ofAct No.47 of 2013.

Amendment to section85ofAct No.1 of2019.

Amendment to section58ofAct No.2 of2019.

Act.

40.Section183of theMiningAct is amendedby deleting Subsection (5) and substituting therefor the following new subsection (5)-

• (5)The royalty received by the State under this sectionshallbepaid intotheConsolidatedFund and apportioned in accordance with Section 26 of the Natural Resources(Benefit Sharing)Act.
• 41.Section76oftheWildlifeConservationand Management Act is amended by—-
• (a) deleting Subsection (l) and substituting therefor the following new subsection——

(1)Therevenuereceivedby theNational Government under this Act shall be paid into theNational Treasury and apportioned in accordance with section 26 of the Natural Resources(BenefitSharing)Act.

• (b) deleting Subsection (2);
• (c) deleting Subsection (3); and
• (d) deleting Subsection (4).
• 42.Section 85 of the Energy Act is amended by-
• (a) deleting Subsection(3)and substituting therefor the following new Subsection (3)——
• (3)Theroyaltyreceived by theNational Government under this section shall bepaid into theNational Treasury andapportionedinaccordancewithSection26of the Natural Resources (Benefit Sharing) Act.
• (b)deletingSubsection(4).

43.The Petroleum Act is amended by deleting Section 58andsubstitutingthereforthefollowingnewSection58—

Sharing of petroleum resource.

58.TheNational Government'sshareof theprofits derivedfromupstreampetroleumunderSection57shall be apportioned in accordance with Section 26 of the Natural Resources(BenefitSharing)Act.

SCHEDULE (s.15) PROVISIONSASTOTHECONDUCTOFBUSINESSAND AFFAIRSOFTHEBOARDOFTHEBENEFITSHARING AUTHORITY

Meetings of theBoard.

Quorum.

• 1.(1) The Board shall mect at least once in every three months to conduct thebusiness of theBoard of theAuthority.
• (2)The first meeting of the Board shall be convened by the Chairperson and theBoard shall meet subsequently at such a timeandplace asit shall determine.
• (3)Notwithstanding the provisions of Subparagraph (1), the Chairperson shall,upon a written request by at least five membersoftheBoardoratanytimewhereheorsheconsiders it expedient for the transaction of the business of the Authority, conveneaspecialmeetingoftheBoard.
• (4)The members of the Board shall elect a vicechairperson from among themselves--
• (a) at the first sitting of the Board; and
• (b)whenever it is necessary to fill the vacancy in the office of theVice-chairperson.
• (5) A meeting shall be presided over by the chairperson or in her or his absence by theVice-chairperson.
• (6)Unlessthree quarters of thetotal number of the members of the Board otherwise agree,at least five days written notice of everymeeting of theBoard shallbegiven to everymemberoftheBoardbytheDirector-General.
• (7) The Board may invite any person to attend any of its meetings and toparticipateinits deliberations,butsuchperson shall not have a vote in any decision of theBoard.
• (8)Theproceedings of theBoard shall not beinvalidated by reason of a vacancy within its membership.
• 2.(1) Subject to Subparagraph (2), the quorum of a meetingof theBoardshallbenotlessthan halfof the

appointed members.

• (2) Where there is a vacancy in the Board, the quorum of themeeting shall be not less than three appointed members.

Voting.

• 3.Unless a unanimous decision isreached,a decision on anymatter before the Board shall be by a simple majority of thevotes of the members present andvoting and in the case of an equality of votes, the Chairperson or person presiding over the meeting shall have a castingvote.

Conflict ofinterest.

4. (1) A member of the Board who has a direct or indirect personal interest in any matter being considered or to be considered by the Board shall,upon the relevant facts concerning the matter having come to their knowledge, disclosethenatureoftheirinteresttotheBoard.

• (2)A disclosure of interest madeby a member of the Board underSubparagraph(l)shall berecorded in the minutes of themeeting of theBoard and the member shall not,unless theBoardotherwisedetermines—

• (a) be present during the deliberation on thematter by the Board; or

• (b) takepart in thedecisionof theBoard onthe matter.

• (3) A member of the Board who makes a disclosure under Subparagraph (1) shall not—-

• (a)be present in the meeting of the Board held to determinewhetherornotthemembershould take part in the deliberations or decision of the Board in relationtothematter;or

• (b) influenceanyothermemberof theBoardin arrivingataparticulardecisioninrelationtothe matter.

• (4)A member or staff of theAuthority shall not transact anybusiness or tradewiththeAuthority.

RulesofProcedureand 5.(1) Subject to provisions of this Schedule,the Board

minutes.

may determine its own procedure and the procedurefor any committeeoftheBoard.

(2) TheBoard shall cause the minutes of all proceedings of its meetings to be recorded and kept,and the minutes of each meeting shall be confirmed by the Board at the next meeting of the Board and signed by the Chairperson or the person presiding at the meeting.

I certify that this printed impression is a true copy of the Bill as passed by the Senate on 1"August, 2023.

ClerkoftheSenate

Endorsed for presentation to the National Assembly in accordance with the provisionsofstandingorder161oftheSenateStandingOrders.

Speakerof theSenate

PRINTEDBYTHECLERKOFTHESENATE