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A LOOK AT THE PROPOSED BBI LEGISLATIVE REFORMS

The Building Bridges Steering Committee made recommendations on the implementation of the Report and they drafted several amendment bills. Herein below we provide a brief summary of the laws proposed for amendments and analysis of the same: 

1.The Public Finance Laws (Amendment) Bill, 2020

The Public Finance Laws (Amendment) Bill, 2020 seeks to make amendments to various finance-related laws, such as:

  • The Public Finance Management Act, 2012 (No. 18 of 2012)

The Bill seeks to amend the Act to invalidate an agreement for the borrowing of money unless the borrowing is authorised under the Act or by any other written law. The Bill further amends the Act with regards to the functions of the Budget Committee at the National Assembly. It requires the committee to coordinate the discussion and review of the Budget Policy Statement and budget estimates by the departmental committees of the National Assembly, and make recommendations to   the   Assembly   taking   into   account   the   recommendations   of those departmental committees. It further amends the Act to provide for the responsibilities of departmental committees of the National Assembly in considering budget estimates. In so doing it requires the committees to consider the budgets of the respective national government entities falling under them, and if the committee revises the estimates, it should notify the relevant entity accordingly and advise the entity to align its budget in accordance with the revision. 

Additionally, other amendments to the Act include an obligation to the Cabinet Secretary for Finance to ensure that the annual Appropriation Bill provides for appropriation of funds in the Equalisation Fund- a significant win for marginalized counties. It further amends the Act to provide for the establishment of the County Assemblies fund, similar to the Parliamentary Fund into which shall be paid monies appropriated for county assemblies.

It amends the Act to provide for offences relating to the handling of public monies by public officers or accounting officers, and liability arising out of loss of public money.

  • The Public Procurement and Asset Disposal Act, 2015 (No. 33 of 2015)

The Bill seeks to amend the Act to lay out in considerable detail, the duties of a procuring entity which includes undertaking due diligence on prospective bidders. It further seeks to amend the Act to obligate accounting officers to ensure that procurement of goods, works and services of the public entity are done in accordance and with strict adherence with the approved procurement plans, and that money is available for payment of goods or services being procured, and for prompt payment of those goods and services. It makes it an offence for an accounting officer to procure goods or services without a procurement plan, or in disregard of that plan. It amends the Act to promote the principle of open contracting during procurement. This is aimed at promoting transparency and creating an equal opportunity to access Government procurement opportunities which is more than half of all tender opportunities in the country. 

  • The Public Audit Act, 2015 (No. 34 of 2015)

The Bill seeks to amend the Act to empower the Office of the Auditor-General to recruit its own staff as required, and to delete from the Act provisions which were invalidated by the High Court.

  • The Controller of Budget Act, 2016 (No. 26 of 2016)

The Bill amends the Act to require the Controller of Budget to carry out due diligence on an ongoing project, to ascertain whether money previously approved for the project has been utilized prudently, before the Controller authorizes release of more funds for the project. 

The amendments also provide for the publicizing of reports by the Controller of Budget in a simplified form and manner which is accessible to as many people as possible.

  • The Higher Education Loans Board Act, 1995 (No. 33 of 1995)

The Bill amends the Act to give individuals taking up loans grace period of 4 years from the date of completion of their studies, before they can commence repayment of loans advanced to them. 

The amendments also exempt “loanees” without a source of income, upon application to the Board, from paying interest on the loans advanced to them, till such time that the loanees shall start earning an income.

  • The Micro and Small Enterprises Act, 2012 (No. 55 of 2012)

The Bill seeks to amend the Act to give youth-owned enterprises a seven-years tax break, and empowers the Cabinet Secretary to make regulations to give effect to this requirement. The enactment of this Bill shall occasion additional expenditure of public funds to be provided for in the estimates.

2. The Prompt Payment Bill, 2020

The amendment provides a legal framework for the prompt payment of invoices for goods and services procured by public entities and mechanisms for settling disputes over invoices. 

It seeks to address the issue of delayed payment for goods and services procured by public entities, which impact negatively on the suppliers of those goods and services. 

Clause 4 of the Bill provides for settlement of invoices for the supply of goods and services within 30 days of submission of the invoice. Any query on an invoice should be communicated to the supplier in writing 10 days from the date of presentation of the invoice. Every public procuring entity is required to establish an internal appeals system to review all decisions made not to honour an invoice.

Moreover, Clause 6 of the Bill will make failure to make prompt payments for goods and services procured by a public entity an offence; while Clause 7 establishes the Public Invoices Settlement Tribunal to hear appeals from any decisions made by internal appeals mechanisms of every public entity declining to pay an invoice. 

In addition, Clause 17 provides for the enforcement of decisions of the Tribunal, while clause 18 provides for appeals to the High Court from the decisions of the Tribunal.

This is of key significance to the Private Sector which is currently owed more than Kshs. 10 billion in pending bills over and above the amounts owed from VAT refunds. In 2017/18, pending bills increased by a record 295 percent to Kshs. 108.4 billion from a previous average of Kshs. 36.7 billion in the preceding three years. This increase was driven by an accumulation in recurrent expenditure pending bills from Kshs. 9.2 billion in FY 2014/15 to Kshs. 80.4 billion in FY 2017/18 associated with increased government spending and delays in exchequer releases due to prolonged electioneering period which dampened the efforts of collecting the targeted amount of revenues thus unable to fully finance the budget. The National Treasury through circular No.10-2020 released in 2020, showed that the Ministry/State Department and Agencies had accumulated validated pending bills amounting to Kshs. 14.99 billion as of June 2019. By December 2019, the Government had settled 68 percent (Kshs. 10.23 billion) of the pending bills. About 3.5 percent (Kshs. 531 million) of the pending bills were pending awaiting clearances upon the release of money by the national treasury leaving Kshs. 4.23 billion (28 percent) unsettled in 2019.

Whereas the proposed legislation is well intended and a significant leap in the right direction to unlock liquidity for the Private Sector, a significant concern for the Exchequer in the immediate to short term shall be the impact that the enactment of this Bill would have as additional expenditure to public funds.

3. The Micro and Small Enterprises (Amendment) Bill, 2020

The amendment Bill seeks to assign the Micro and Small Enterprises Authority the obligation of facilitating enterprises owned by youth, women and persons with disabilities to participate in government procurement opportunities. In addition, the Bill obligates the Micro and Small Enterprises Authority to establish business incubation centres in Kenya for purposes of supporting potential entrepreneurs to overcome barriers associated with early stages of business development. 

Clause 3 of the Bill proposes to introduce a new section 28A to provide for the registration of an enterprise owned by youth, women, or persons with disabilities, for purposes of accessing government procurement opportunities. 

Clause 4 proposes to amend section 31 of the Act to introduce additional functions of the Authority in relation to promoting the formation, survival and growth of new businesses, through provision of technical advice, counselling and facilitating access to credit during the early stages of development and facilitating enterprises owned by youth, women and persons with disabilities to participate in government procurement; 

Clause 5 of the Bill provides for the establishment and purpose of business incubation centres. 

4. The County Wards Development Fund Bill, 2020

The objective of the proposed Bill is to provide a legal framework for the operationalisation of the Ward Development Fund intended to be introduced through an amendment to the Constitution.

5. The Health (Amendment) Bill, 2020

The Bill seeks to amend the Health Act, 2017 to establish a National Health Services Commission which will be responsible for setting national standards for management of healthcare workers.  The commission shall make recommendations to the national government on national policies for management of health care workers; monitor implementation of national policies for management of healthcare workers by county governments and recommend appropriate action; and set and regularly review norms and standards on health matters.

6. The Election Laws (Amendment) Bill, 2020

The Bill seeks to amend various election-related laws, to deliver an electoral system that is transparent, accountable and democratic and promotes the will of the people. The Bill contains amendments to the following statutes:

  • Elections Act, 2011 (No. 24 of 2011)

The amendment proposes to set out the criteria for eligibility for registration as a voter to bring further clarity to Article 83 of the Constitution. Additionally, the Bill proposes to limit registration of voters to at least 120 days to an election to afford adequate time to the Independent Electoral and Boundaries Commission to verify and audit the information contained in the register of voters.

To deal with data privacy issues that have plagued the Commission in the past, the Bill obligates the Commission to omit the full details of the voter’s national identification, and passport registration details during the publication of the voter register.

To facilitate effective planning and budgeting of the elections, the Bill obligates the Commission to publish an elections timetable in the Gazette, at least 18 months to an election and the timetable should specify the activities to be undertaken during the electoral cycle, the duration of each activity and the final day of each activity.

The Bill proposes to extend the duration of conducting nominations by political parties from the current 90 to at least 120 days to an election. This is aimed at allocating additional time to political parties to resolve disputes arising out of the nomination exercise.

The Bill also spells out the rights and responsibilities of agents during an election and it provides for the procedure and appointment of presiding officers, returning officers and other election officers through an open, transparent and competitive process. 

The Bill also provides for the procedure for accreditation of election monitors and observers including the grounds and procedure for revocation of election monitors and observers.

Lastly, the Bill seeks to clarify on the procedure for recall of nominated members.

  • Political Parties Act, 2011 (No.11 of 2011) 

The Bill proposes amendments to the Political Parties Act, 2011 by redistributing the Political Parties Fund to promote the Constitutional rights under Article 27 on equality and freedom from discrimination.

The Bill further obligates every political party to establish an Internal Dispute Resolution Committee with a defined membership. This Committee will resolve disputes within a political party, including disputes arising out of the nomination process.

  • The Independent Electoral and Boundaries Commission Act, 2011 (No. 9 of 2011)

The Bill proposes to amend the Independent Electoral and Boundaries Commission Act, 2011 which provides for the composition of the Independent Electoral and Boundaries Commission. The amendment redefines the word, “chairperson,” removes reference to “vice-chairperson” and limits the holder of the office of the chairperson to be a person appointed in line with Article 250(2). 

This Amendment is in line with the decision of the court in Katiba Institute & 3 others v Attorney General & 2 others [2018] eKLR where the court found that only a person who possessed the qualifications of a chairperson prescribed under the Act should qualify to be appointed as a chairperson of the Commission.

The Bill also obligates the Commission to apply financial resources in designing, planning and managing elections in a prudent and responsible manner. In addition, the Commission is to report to Parliament, within 6 months of a general election, on the cost of the election.

  • The Election Campaign Financing Act, 2013 (No. 42 of 2013) 

This Bill proposes amendments to the Election Campaign Financing Act, 2013 which provides for the regulation, management, expenditure and accountability of election campaign funds. The amendments define the term, “campaign financing period” and obligates the Commission to consider the remuneration and benefits expected from the electoral office to which the limit relates, when prescribing the spending limits that a candidate, political party or referendum committee may spend during an expenditure period.

  • The Election Offences Act, 2016 (No. 37 of 2016)

This Bill proposes to amend the Election Offences Act, 2016 which provides for election offences. The amendments seek to prohibit any person from offering material incentives, tricking, deceiving or using violence in order to induce or compel a voter to transfer their registration from one electoral area to another. In addition, the Bill prohibits harassment and use of violence against candidates, during an election period.

7. The Anti-Corruption and Economic Crimes (Amendment) Bill, 2020

The Bill seeks to amend the Anti-Corruption and Economic Crimes Act, No. 3 of 2003 by deleting the definition of the words, “Advisory Board” and “Assistant Director” as the principal provisions have been repealed. 

The Bill also enhances the penalty for economic crimes and corruption offences and it provides for the procedure of sentencing hearings in economic crimes and corruption matters. It further introduces the offence of concealment of corruption, and provides for duty to report any knowledge or suspicion of instances or acts of corruption or economic crimes. 

It also gives the Cabinet Secretary power to make regulations on the protection of whistle-blowers. 

The Bill provides for room for public officers to amend declarations as well as limit the period for making amendments to 6 months.  It also provides for an electronic platform for submission, retention, storage, archiving and accessing of declarations.

8. The Ethics and Integrity Laws (Amendment) Bill, 2020

The Bill contains proposed amendments to the following statutes: 

  • The Leadership and Integrity Act (No. 19 of 2012)

The Bill proposes to provide a detailed framework for dealing with public funds and personal wealth and making financial declarations by state officers; and prohibit state officers and Public Officers themselves or through proxies engaging in business with a public entity or engaging in public collection of funds.

  • The Public Officer Ethics Act (No. 4 of 2003)

The Bill proposes to bar Public Officers from participating in public collections and streamline the filing of wealth declarations by Public Officers.

9. The Contribution to Charity Bill, 2020

This Bill seeks to regulate public collections or harambees as it repeals the Public Collections Act, Chapter 106. The shortcomings of the Public Collections Act which was assented to in 1960 is that it is not aligned to the Constitution. The old law refers to Provincial Administration yet we are in the age of devolution. The Act also fails to substantively regulate public collections for charitable purposes and it fails to provide proper safeguards to curb corruption that may arise in voluntary collections.

10.The Devolution Laws (Amendment) Bill, 2020

The principal object of this Bill is to amend the County Governments Act, 2012 and the Intergovernmental Relations Act, 2012, to align various provisions of the Act with multiple court decisions on matters relating to devolution and to incorporate lessons learnt in the implementation of the Acts. 

  • The County Governments Act, 2012 (No. 17 of 2012)

The Bill proposes to amend the County Governments Act which provides for the structure of county governors by requiring the county governors to designate the deputy governors with a department within the county executive, similar to portfolios assigned to other Members of the County Executive Committee.  The Bill also provides for the process to be followed in the transfer of county headquarters from one town to another.  Lastly, it provides for a Ward to be considered as  the  lowest  level of  planning,  for  purposes  of  development  and budgeting. 

  • The Intergovernmental Relations Act, 2012 (No. 12 of 2012)

The Bill proposes to amend the Intergovernmental Relations Act by adding to the scope of the Act, issues relating to concurrent jurisdictions between both levels of government, and the coming together of county governments to form associations and partnerships. Moreover, it provides for the Cabinet Secretary to make over-arching Regulations for the sector. It further qualifies that Regulations under the Act shall be made in consultation with the Council of Governors as opposed to the Summit, to enhance efficiency of making the Regulations under the Act.

11.The Public Participation Bill, 2020

The principal object of the proposed Bill is to provide a framework for effective public participation in view of the constitutional provisions that places the people at the centre of governance. The Bill seeks to ensure public processes ranging from policy making, legislative processes and ultimate decision making adhere to the participation of the people of Kenya. The Bill therefore provides a standardised mechanism to facilitate an effective and coordinated public participation process in both levels of government. 

This will include the introduction of the Registrar of the Public Participation Registry under the Office of the Attorney General. Further, the Bill provides for the role of the County Attorney in the public participation process in the county government and requires reports on any such exercise to be regularly shared and archived with the Registrar.

12. The National Economic and Social Council Bill, 2020

The object of this bill is to provide a comprehensive legal framework on how the identification of Kenya’s socio-economic development priorities will be done and provides for a body that shall be in charge of general coordination of national planning.

This will be done with the establishment of the National Economic and Social Council which shall be responsible for coordinating the preparation, implementation and review of national development policies. The Council, to be chaired by the Prime Minister, shall oversee the development of short-and medium-term plans. The Bill further proposes to establish the secretariat of the Council to be headed by a secretary who will be competitively recruited by the Public Service Commission and appointed by the President for a non-renewable term of six years. The transitional provisions transit the existing secretariat of the Council from the National Treasury to the office of the Prime Minister.

13. The Persons with Disabilities Act, No. 14 of 2003

The key proposed amendments which have been subjected to public participation are in the Persons with Disabilities (Amendment) Bill, 2019.

14.The Statute Law (Miscellaneous Amendments) Bill, 2020

The Statute Law (Miscellaneous Amendment) Bill, 2020 contains minor amendment proposals relating to the following statutes:

  • The Interpretation and General Provisions Act (Cap. 2)

The Bill proposes to harmonise the definition of ‘Cabinet Minister’ with the proposed Constitutional Amendment.

  • The Judicial Service Act, No.1 of 2011

The Bill proposes to amend the Judicial Service Act, 2011 to harmonise with the proposed amendments of the Constitution on the Secretary of the Commission.

  • The National Intelligence Service Act, No. 28 of 2012

The Bill proposes to expand the definition of the words ‘vettable position’ to ensure the Service vets all applicants to public offices to public offices for purposes of providing background checks.

  • The Mutual Legal Assistance Act, No. 36 of 2011

The Bill proposes to harmonise the list of mainstream competent authorities with the provisions of section 7(2) of the Act. 

It further proposes to amend section 3 for clarity purposes, as well as to harmonise it with Article 2(6) of the Constitution of Kenya and section 4, to provide for a clear legal basis for innovative ways of direct cooperation between competent authorities.

  • The Commission on Administrative Justice, No. 23 of 2011

The Bill proposes to amend the Commission on Administrative Justice Act, to provide that after having concluded an investigation or inquiry and found a Public officer guilty of gross violation of the constitution or the law, the Commission to be able to recommend that such an officer is unfit to hold public office. It further proposes to enforce the Court of Appeal Ruling in No. 141 of 2015 where the Court held that the recommendation of the Commission has force of law and are binding.

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