The Local Content Bill

The Local Content Bill is intended to regulate the mining sector. If passed, it will be one of the crucial laws that will impact mining and exploration of minerals in Kenya.

Local Content is a concept in the extractive industry. It is the percentage, amount or level of goods or services which mining companies need to sourcefrom the local community. For instance, if a European mining company is mining oil in Kenya, the local content aspect will factor in issues like; the number of labourers who must be Kenyan, the amount of goods (eg. vehicles, fuel, furniture, etc) that  it must purchase in Kenya, etc.

Though closely related, local content is different from local share of revenue. The latter is the amount of profit that is given to the local community through local governments. It only comes in after the oil has been mined and profits made.

The Bill creates a Local Content Development Committee which is tasked to oversee, coordinate and manage the development of local content in Kenya

It also requires all mining companies to have a Local Content Plan. The Plan will detail among others;

1. How the company intends to purchase localy available goods and services rather than import

2. How the company intends to employ labour from locally available workforce

3. How the company intends to empower the local communities to be able to posses skills and abilities to work and produce goods necessary in the mining operations that they currently arent able to

4, A reaseach and development plan

Every year, the company will also be required to submit a report on how it has performed on local content quotas.

The exact quotas are not set by the Bill but it provides that first priority must be given to Kenyans who are able to produce the goods, offer the services employed in the jobs offered

This article was written by
Derrick Makhandia of Mzalendo Trust .
It was published on July 20, 2018.