Category: Uncategorized

Sustainability and green governance now play a significant role in every sphere of society and business. In the 18th issue of Legal & Kenyan, we featured an article titled “Green Governance: Reporting on Sustainability and Climate Change” where we discussed the International Financial Reporting Standards Disclosure of Sustainability-related Financial Information (IFRS S1) and Climate-related Disclosures Standards (IFRS S2) collectively (the Standards) that were issued by the International Sustainability Standards Board (ISSB). Under the Standards, corporate entities are tasked with the duty of ensuring that they make sustainability–related disclosures in their annual financial reports in accordance with the Standards’ requirements.

The issuance of the Standards reflects the need to meet the commitments made under the Paris Agreement to combat and mitigate climate change. The formation of the ISSB in 2021 and the release of the Standards in 2023 further signify the commitment to this cause. However, while the issuance of the Standards is a step in the right direction, compliance with the Standards is where the actual work lies. It is also important to note that the Standards are one of many sustainability standards introduced in the recent past affecting various industries.

Adoption of the Standards

The effectiveness of any standard lies in its implementation. As the saying goes, “the proof of the pudding is in the eating”, which is fitting in this context given that the Standards prescribe requirements on corporate entities regarding their specific annual financial reports. To meet the requirements under the Standards, immense resources at the disposal of the entity ought to be present. In these circumstances, the uptake of and compliance with the Standards has been met with good reception from corporate entities of all sizes.

Further, while compliance with the Standards of the ISSB is voluntary, adoption has been well-received globally. Some entities partially adopt the Standards, others adopt slight amendments and others fully embrace the ISSB standard of reporting. Focusing on Africa, countries such as South Africa, Nigeria, and Kenya are some of the notable jurisdictions at the forefront of adoption of the Standards, having made commitments for their full adoption with slight modifications relevant to each jurisdiction.

Green Financing

Undoubtedly, by the nature of their business, the banking and finance industry plays a pivotal role in promoting the adoption of sustainable business practices. “Green financing” refers to any structured financial activity designed to ensure a better environmental outcome and a more resilient future. Simply put, it is where financial products and services are issued with environmental considerations. From the perspective of financial institutions, this works best, given that the core nature of their business entails the sale of financial services and products.

The additional aspect now in consideration is the trading of these products and services under environmental or sustainability considerations. This benefits financial institutions by passing some compliance responsibilities onto the customer for them to obtain the relevant product or service they seek from the financial institution. Secondly, these products or services (be it loans, grants, or capital investments) find their way into the financial institution’s balance sheet and form part of the institution’s annual financial reports.

In Kenya, NCBA Group PLC is one of the financial institutions that have rolled out green finance products and services. In conjunction with Proparco Groupe AFD, NCBA recently signed a facility of KES. 6.7 Billion (USD 50 Million) in a bid to realise the sustainability commitments it made last year through its “Change the Story” sustainability agenda. This agenda is anchored on five (5) pillars comprising of fifteen (15) sustainability commitments. The project is expected to support green financing in small and medium-sized enterprises that are women and youth led.

On its part, the Equity Group is one of the players within the financial services industry at the forefront of championing sustainability and sustainable practices within the organisation. Having released its sustainability reports for three (3) consecutive years, Equity Group has made a deliberate effort to align the company’s long–term strategies for growth with globally set standards and procedures that enhance sustainable growth. From its FY2023/24 sustainability report, Equity Group has adopted a three–pronged strategy for sustainability, leveraging on deepening its sustainability leadership, resilience for sustainability and finally, deepening its sustainable impact. Going forward, Equity Group plans to continue embedding ESG factors in its operations and lending practices, as the organisation seeks to mature its sustainability practice at group and subsidiary level.

In South Africa, according to Mr. Sim Tshabalala, the Chief Executive Officer of Africa’s largest lender in assets – The Standard Bank Group, as a financial institution, it has made huge strides in formulating an array of green finance products and services for both their corporate clients and individual or retail clients. He is on record stating that Standard Bank has made a commitment to green finance ZAR 250 Billion (USD 13 Billion) between 2022 and 2026. Standard Bank has formulated green finance products for its retail customers which enable them to access financing towards solar installations at their homes at lower lending interest rates than through regular loans. Green finance presents an exciting opportunity for the financial services sector and Mr. Tshabalala hazards a guess that in the near future, green finance shall form a big portion of many financial services institutions’ corporate and investment portfolios.

Streamlining Internal Processes

These efforts, however, need not be limited to customer-facing products and services. Financial institutions can also streamline their internal processes to become more efficient and sustainable, in accordance with the Standards. What this achieves for the relevant financial institution is that these efforts made in accordance with the Standards are reportable and as such, form part of the entity’s annual sustainability reports. The Central Bank of Kenya (CBK) recently reported that lenders in Kenya are now incorporating Artificial Intelligence (AI) technologies to improve operational efficiencies, predict consumer behaviour, and manage risk exposures more effectively. CBK further noted that some of Kenya’s largest lenders are using AI to reduce risks related to fraud given that, lenders in Kenya have admitted to deploying AI to combat instances of fraud in their sustainability reports. For example, Standard Chartered Bank (Kenya) Limited states in its recently published sustainability report that: “Our Financial Crime Compliance team continues to proactively identify, prevent potential fraud, terror financing and money laundering activities using next-generation surveillance, financial crime monitoring infrastructure and machine learning.”

Similarly, Stanbic Bank Kenya (which is part of the larger South African based Standard Bank) also recently reported that it leverages: “…artificial intelligence and other advanced technologies to improve risk assessment, scenario analysis and decision-making processes….” Its South African parent company reported that digitisation of key consumer processes has been key in making the company more sustainable. This arises from consumer demand for products and services that are as technologically sophisticated and efficient as other facets of their lives. It further reported efforts towards “de-cashing” its platform to match with the new entrants offering cashless financial services. This has enabled Standard Bank to reduce the resources it pours into management and securing of cash which ultimately increases efficiency and streamlines its internal processes more sustainably.

Upshot

It is evident that large corporations, as opposed to smaller ones, tend to adopt and implement the Standards. However, it is important to note that there is no “one size fits all” approach to their implementation. Implementation is still evolving, with stakeholders formulating the best approach for implementing the Standards, based on their own individual circumstances.

As corporations, notwithstanding their size, chart a way forward in discovering what is the best approach for them to implement the Standards, they may borrow a leaf from those that have already started. When designing their strategy, corporations may consider tailoring some of their services and/or products towards achieving a more sustainable outcome. As such, a corporation would be required to determine the services and/or products on sale within its portfolio that can be tweaked to realise a sustainable outcome in line with the Standards.

Another mechanism available to corporations is to ensure compliance with the Standards within their respective organisations. This can be achieved by enhancing operational efficiencies through leveraging technology to take up certain tasks within the organisation; reduction and possible elimination of unnecessary or redundant processes; and reorganizing human resources for robust and efficient governance structures – all of which are reportable under the Standards.

In conclusion, it is not in doubt that the Standards are fairly new, and the relevant stakeholders and key players continue to formulate the nature of implementation for all entities. As already established, the resource pool required to ensure implementation of the Standards is enormous. These factors, however, should not dissuade entities, nor act as a deterrent factor from the uptake of and compliance with the Standards. On the contrary, they should serve as a catalyst in enhancing their uptake, as it is through an entity addressing the challenges it would face in implementing the Standards, that it will be able to formulate adequate and specific measures to ensure compliance with them.

As a parting shot, in a bid to drive forward the sustainable investment and financing agenda from an African perspective, it would be ideal to formulate and establish an alliance such as the Global Sustainable Investment Alliance – or join it. In our experience, it is a strong platform to advance sustainable investment and finance, ensuring that the financial services sector plays a key role in achieving a more sustainable future.

After over a decade of assisting clients across Africa through our independent offices in Ghana, Zambia, Zimbabwe, Uganda, Kenya and a network of relationship firms in over 30 African countries, we are pleased to announce that on Wednesday, 23rd July, 2025, we received authorisation to expand our footprints into Singapore beginning with an Africa-market focused consultancy. The Singapore market entry is in line with ABDA’s broader strategy to deepen service offerings to clients in Asia, using Singapore as the initial hub. It positions the firm to better support investors from Asia seeking opportunities in Africa, as well as African entities engaged in transactions with counterparts in Asia.
The ability to support clients seamlessly across Africa has become even more relevant as the continent continues to receive multi-country investments from Asia and other parts of the world.
“This is another significant landmark in ABDA’s journey, and we look forward to the formal launch at the end of August in Singapore” said David Ofosu-Dorte, Senior Partner at ABDA.

About Us:
AB & David Africa is an Africa-focused global business law firm that supports clients and projects to succeed in Africa.

For inquiries/ more, please contact:
Email : info@abdavid.com
WhatsApp : ‪+233 59 403 7507‬
Website : www.abdavid.com

According to the Blacks’ Law Dictionary, finance is the business aspect that is concerned with the management of money, credit, banking, and investments. Financial inclusion by extrapolation thus means making all the aspects of finance available to every legal person. In ordinary parlance, financial inclusion refers to the ability of individuals and businesses to access useful and affordable financial products and services that meet their needs in facilitating transactions, payments, savings, credit, and insurance that are delivered in a responsible and sustainable way. When addressing refugee financial inclusion, one refers to the ability of refugees to access transaction accounts with a financial institution, micro-finance institution or a digital or electronic instrument for purposes of storing, keeping, sending, and receiving money.

Financial inclusion encompasses various aspects, such as making financial products and services affordable and accessible to low-income earners, expanding financial institutions and service providers to marginalised or rural areas, providing relevant or legal identity documentation to the banking population, creating a data source, and improving literary or financial skills to combat lack of trust in the financial service providers. With that in mind, this article seeks to address the problems impacting refugees’ financial inclusion in Kenya.

Background to Kenya’s Financial Inclusion Policy

Kenya is on the verge of creating an all-inclusive, knowledge-based economy and has been hailed as one of Africa’s leading countries on financial inclusion with a robust policy to combat poverty and increase opportunities for investments for the disaggregated populations. The Kenya National Payments System Vision and Strategy 2025 makes inclusiveness one of its top priorities. The aim is to boost shared prosperity for the Kenyan people. According to the Central Bank of Kenya (CBK) 2021 FinAccess Report, Kenya’s household financial inclusion rate stood at approximately eighty three percent (83%).

Despite such a robust national financial inclusion policy and strategy, it can be argued that refugees in Kenya have been deliberately excluded from the benefits of the policy due to a discriminatory regulatory framework.

Exclusion of Refugees from Financial Access

Consumers are classified as financially excluded if they lack access to any formal or informal financial products or services. Generally, the universal factors that influence financial inclusion or exclusion include education, wealth, access to livelihoods, urban proximity, and cultural dynamics, such as gender biases or prejudices. All these factors contribute to the overall financial exclusion of refugees in one way or the other. Nonetheless, they are not the biggest threats to refugee financial inclusion in Kenya.

The financial service sector is the most important part of any economy, as it facilitates investments, provides access to capital, and helps manage financial risks, which drive economic growth. In this regard, the sector is heavily regulated to ensure consumer protection as well as a smooth, efficient and inclusive financial service ecosystem. Unfortunately, Kenya’s financial regulatory system excludes refugees from accessing financial services and products. For instance, the requirement under section 45 of the Proceeds of Crime and Anti-Money Laundering Act, 2009 (POCAMLA) which obligates providers of financial products and services to verify the identity of their customers does not include a Refugee Identification Document (Refugee ID) as a transactional document for banking purposes.

Further, the Proceeds of Crime and Anti-Money Laundering Regulations, 2013 (the Regulations), explicitly state at regulation 13, that for purposes of section 45 (1) of POCAMLA, a financial or reporting institution shall not enter a business relationship with a customer unless such a customer has a personal identification number (PIN) issued by Kenya Revenue Authority (KRA). However, a KRA PIN is not ordinarily issued to refugees unless they demonstrate exceptional circumstances that would warrant them to be issued with a KRA PIN. This difficulty effectively bars refugees from operating personal bank accounts.

Second, regulation 7 of the CBK E-Money Regulations, 2013 (the CBK E-Money Regulations) stipulates that all e-money issuers shall ensure that they and their agents comply with the applicable provisions of the POCAMLA and the Regulations. Although opening a mobile money account does not require the production of a KRA PIN, the mobile money operators such as Safaricom and Airtel are reporting institutions for the purposes of POCAMLA. In compliance with the CBK E-Money Regulations, Safaricom promulgated the M-Pesa Customer Terms and Conditions which do not include a Refugee ID as part of the required identity documentation for purposes of Account Opening and Maintenance. By implication, Safaricom does not open M-Pesa accounts for refugees.

The immediate former Governor of the CBK, Dr. Patrick Njoroge is on record that an ID is the most important tool and the first step toward financial inclusion. Thus, lacking one effectively prevents individuals from financial access. In the case of refugees, excluding a Refugee ID as a transactional document appears to discriminate against them. Equally, Refugee IDs expire every five (5) years, and it takes up to three (3) years to renew them. This bureaucratic hindrance also contributes to refugee financial exclusion.

Aside from exclusionary regulatory policies, refugees are highly affected by universal factors that limit financial inclusion. For instance, Kenya’s refugee encampment policy places refugee camps at the periphery of the country. These places are very remote and do not have on-site providers of financial services and products. In the same vein, the refugee camps are plagued with lack of or limited education opportunities. It is also difficult for refugees to access the labour market and scarce business activities contributes to poor or lack of livelihoods leading to low wealth indices amongst refugees. All these factors contribute to low levels of financial access for refugees.

The Refugees Act, 2021

Article 27 (1) of the Constitution of Kenya, 2010 (the Constitution) provides that everyone is equal before the law and has the right to equal protection and equal benefit of the law, which extends to the full enjoyment of all rights and fundamental freedoms. In essence, the supreme law of the land guarantees that both refugees and citizens alike enjoy equal protection and benefit of the law. While the financial regulatory laws arguably disadvantage refugees by excluding them from financial access, Article 27 (4) of the Constitution prohibits the State from enacting laws that are unjust or discriminatory on any grounds, including social origin or status, as it is the case for refugees.

It is in this context that the Refugees Act, 2021 (the Act) was passed into law with the intention of setting up a legal, social, and economic ecosystem where refugees could become self-reliant and contribute to the economic development of Kenya. To this end, section 28 (4) of the Act provides that refugees shall be enabled to contribute to the economic and social development of Kenya by facilitating access to, and issuance of, the required documentation at both levels of Government. Equally, section 28(5) of the Act grants refugees the right to engage individually or in a group in gainful employment or enterprise or to practice a trade or profession where they are duly qualified.

In addition, section 28 (7) of the Act elevates the status of a Refugee ID by granting it, at the very least, a status similar to that of the Foreign Certificate issued under section 56 (2) of the Citizenship and Immigration Act, 2011 for purposes of meeting legal obligations, receiving or rendering services countrywide. This means that refugees are entitled to access banking services, KRA PINs, mobile money registration, and e-Citizen services using their Refugee IDs, without the need to provide further supporting documentation.

By Legal Notice No. 143 of 2023, pursuant to section 28 (7) of the Act as read together with section 56 (2) of the Kenya Citizenship and Immigration Act, the Cabinet Secretary for Interior and National Administration declared the Refugee ID alongside other refugee identification documents as valid and proper documents for purposes of acquiring services provided by the Government of Kenya. Similarly, Regulation 29 (1) of The Refugees (General) Regulations 2024 converts the Refugee ID into a Refugee Certificate, specifying a format that aligns with Kenya’s system of issuing Identification Documents. The foregoing notwithstanding, the effectiveness of the Act may be undermined unless its provisions are equally integrated into the existing laws that govern the financial ecosystems.

Recommendations

The following recommendations ought to be taken into consideration to harmonise the financial laws with the Refugees Act, 2021 to enhance greater refugee financial inclusion:

The phrase “subject to special considerations and circumstances of the refugees” under section 28 (7) of the Act should be interpreted to mean that refugees, unlike foreign nationals who must first obtain either work permits, student permits, or residential permits to be issued Foreign Certificates and KRA PINs, can directly access services without the requirement to first obtain a Class M Work Permit.

• There should be elaborate redress procedures and timelines for issuance of identification documents to avoid delays in the system which has been the major bottleneck in the refugee access to services.
• For greater inclusivity and mobility within the East African region pursuant to section 28 (8) of the Act, refugees from the East African member states should be allowed to travel across borders within the region using their Refugee IDs. This stems from the fact that a Refugee ID usually shows the nationality of the holder.
• Section 45 of the POCAMLA should be amended, along with the accompanying Regulations, to allow banks and financial institutions to accept a Refugee ID as a transactional document with respect to banking and financial services for refugees.

• The CBK E-Money Regulations should be amended to allow Financial Digital Service Providers to accept a Refugee ID as a transactional document in registering mobile money services.

According to the Blacks’ Law Dictionary, finance is the business aspect that is concerned with the management of money, credit, banking, and investments. Financial inclusion by extrapolation thus means making all the aspects of finance available to every legal person. In ordinary parlance, financial inclusion refers to the ability of individuals and businesses to access useful and affordable financial products and services that meet their needs in facilitating transactions, payments, savings, credit, and insurance that are delivered in a responsible and sustainable way. When addressing refugee financial inclusion, one refers to the ability of refugees to access transaction accounts with a financial institution, micro-finance institution or a digital or electronic instrument for purposes of storing, keeping, sending, and receiving money.

Financial inclusion encompasses various aspects, such as making financial products and services affordable and accessible to low-income earners, expanding financial institutions and service providers to marginalised or rural areas, providing relevant or legal identity documentation to the banking population, creating a data source, and improving literary or financial skills to combat lack of trust in the financial service providers. With that in mind, this article seeks to address the problems impacting refugees’ financial inclusion in Kenya.

Background to Kenya’s Financial Inclusion Policy

Kenya is on the verge of creating an all-inclusive, knowledge-based economy and has been hailed as one of Africa’s leading countries on financial inclusion with a robust policy to combat poverty and increase opportunities for investments for the disaggregated populations. The Kenya National Payments System Vision and Strategy 2025 makes inclusiveness one of its top priorities. The aim is to boost shared prosperity for the Kenyan people. According to the Central Bank of Kenya (CBK) 2021 FinAccess Report, Kenya’s household financial inclusion rate stood at approximately eighty three percent (83%).

Despite such a robust national financial inclusion policy and strategy, it can be argued that refugees in Kenya have been deliberately excluded from the benefits of the policy due to a discriminatory regulatory framework.

Exclusion of Refugees from Financial Access

Consumers are classified as financially excluded if they lack access to any formal or informal financial products or services. Generally, the universal factors that influence financial inclusion or exclusion include education, wealth, access to livelihoods, urban proximity, and cultural dynamics, such as gender biases or prejudices. All these factors contribute to the overall financial exclusion of refugees in one way or the other. Nonetheless, they are not the biggest threats to refugee financial inclusion in Kenya.

The financial service sector is the most important part of any economy, as it facilitates investments, provides access to capital, and helps manage financial risks, which drive economic growth. In this regard, the sector is heavily regulated to ensure consumer protection as well as a smooth, efficient and inclusive financial service ecosystem. Unfortunately, Kenya’s financial regulatory system excludes refugees from accessing financial services and products. For instance, the requirement under section 45 of the Proceeds of Crime and Anti-Money Laundering Act, 2009 (POCAMLA) which obligates providers of financial products and services to verify the identity of their customers does not include a Refugee Identification Document (Refugee ID) as a transactional document for banking purposes.

Further, the Proceeds of Crime and Anti-Money Laundering Regulations, 2013 (the Regulations), explicitly state at regulation 13, that for purposes of section 45 (1) of POCAMLA, a financial or reporting institution shall not enter a business relationship with a customer unless such a customer has a personal identification number (PIN) issued by Kenya Revenue Authority (KRA). However, a KRA PIN is not ordinarily issued to refugees unless they demonstrate exceptional circumstances that would warrant them to be issued with a KRA PIN. This difficulty effectively bars refugees from operating personal bank accounts.

Second, regulation 7 of the CBK E-Money Regulations, 2013 (the CBK E-Money Regulations) stipulates that all e-money issuers shall ensure that they and their agents comply with the applicable provisions of the POCAMLA and the Regulations. Although opening a mobile money account does not require the production of a KRA PIN, the mobile money operators such as Safaricom and Airtel are reporting institutions for the purposes of POCAMLA. In compliance with the CBK E-Money Regulations, Safaricom promulgated the M-Pesa Customer Terms and Conditions which do not include a Refugee ID as part of the required identity documentation for purposes of Account Opening and Maintenance. By implication, Safaricom does not open M-Pesa accounts for refugees.

The immediate former Governor of the CBK, Dr. Patrick Njoroge is on record that an ID is the most important tool and the first step toward financial inclusion. Thus, lacking one effectively prevents individuals from financial access. In the case of refugees, excluding a Refugee ID as a transactional document appears to discriminate against them. Equally, Refugee IDs expire every five (5) years, and it takes up to three (3) years to renew them. This bureaucratic hindrance also contributes to refugee financial exclusion.

Aside from exclusionary regulatory policies, refugees are highly affected by universal factors that limit financial inclusion. For instance, Kenya’s refugee encampment policy places refugee camps at the periphery of the country. These places are very remote and do not have on-site providers of financial services and products. In the same vein, the refugee camps are plagued with lack of or limited education opportunities. It is also difficult for refugees to access the labour market and scarce business activities contributes to poor or lack of livelihoods leading to low wealth indices amongst refugees. All these factors contribute to low levels of financial access for refugees.

The Refugees Act, 2021

Article 27 (1) of the Constitution of Kenya, 2010 (the Constitution) provides that everyone is equal before the law and has the right to equal protection and equal benefit of the law, which extends to the full enjoyment of all rights and fundamental freedoms. In essence, the supreme law of the land guarantees that both refugees and citizens alike enjoy equal protection and benefit of the law. While the financial regulatory laws arguably disadvantage refugees by excluding them from financial access, Article 27 (4) of the Constitution prohibits the State from enacting laws that are unjust or discriminatory on any grounds, including social origin or status, as it is the case for refugees.

It is in this context that the Refugees Act, 2021 (the Act) was passed into law with the intention of setting up a legal, social, and economic ecosystem where refugees could become self-reliant and contribute to the economic development of Kenya. To this end, section 28 (4) of the Act provides that refugees shall be enabled to contribute to the economic and social development of Kenya by facilitating access to, and issuance of, the required documentation at both levels of Government. Equally, section 28(5) of the Act grants refugees the right to engage individually or in a group in gainful employment or enterprise or to practice a trade or profession where they are duly qualified.

In addition, section 28 (7) of the Act elevates the status of a Refugee ID by granting it, at the very least, a status similar to that of the Foreign Certificate issued under section 56 (2) of the Citizenship and Immigration Act, 2011 for purposes of meeting legal obligations, receiving or rendering services countrywide. This means that refugees are entitled to access banking services, KRA PINs, mobile money registration, and e-Citizen services using their Refugee IDs, without the need to provide further supporting documentation.

By Legal Notice No. 143 of 2023, pursuant to section 28 (7) of the Act as read together with section 56 (2) of the Kenya Citizenship and Immigration Act, the Cabinet Secretary for Interior and National Administration declared the Refugee ID alongside other refugee identification documents as valid and proper documents for purposes of acquiring services provided by the Government of Kenya. Similarly, Regulation 29 (1) of The Refugees (General) Regulations 2024 converts the Refugee ID into a Refugee Certificate, specifying a format that aligns with Kenya’s system of issuing Identification Documents. The foregoing notwithstanding, the effectiveness of the Act may be undermined unless its provisions are equally integrated into the existing laws that govern the financial ecosystems.

Recommendations

The following recommendations ought to be taken into consideration to harmonise the financial laws with the Refugees Act, 2021 to enhance greater refugee financial inclusion:

The phrase “subject to special considerations and circumstances of the refugees” under section 28 (7) of the Act should be interpreted to mean that refugees, unlike foreign nationals who must first obtain either work permits, student permits, or residential permits to be issued Foreign Certificates and KRA PINs, can directly access services without the requirement to first obtain a Class M Work Permit.

• There should be elaborate redress procedures and timelines for issuance of identification documents to avoid delays in the system which has been the major bottleneck in the refugee access to services.
• For greater inclusivity and mobility within the East African region pursuant to section 28 (8) of the Act, refugees from the East African member states should be allowed to travel across borders within the region using their Refugee IDs. This stems from the fact that a Refugee ID usually shows the nationality of the holder.
• Section 45 of the POCAMLA should be amended, along with the accompanying Regulations, to allow banks and financial institutions to accept a Refugee ID as a transactional document with respect to banking and financial services for refugees.

• The CBK E-Money Regulations should be amended to allow Financial Digital Service Providers to accept a Refugee ID as a transactional document in registering mobile money services.

An allegation of judicial bias calls into question the concept of fair hearing, and the often-touted clarion call against perceptions of judicial bias is that “justice must not only be done but must also be seen to be done” – as per Lord Hewart, the then Chief Justice of England in Rex v Sussex Justices (1924) 1 KB 256.

Judicial recusal refers to the withdrawal of a judicial officer from ongoing proceedings, for reason of a conflict of interest, perceived bias or lack of impartiality. As an inherent rule, judicial officers are expected to be independent, impartial and beacons of integrity – with recusal offering a means of redress should questions arise as to the lack of the foregoing attributes in relation to a judicial officer.

The importance of recusal in fostering confidence and trust in the administration of justice was underscored by Warsame J (as he then was) in the case of Alliance Media Kenya Limited v Monier 2000 Limited & Njoroge Regeru (2007) KEHC 2518 (KLR) as follows: “In my understanding, the issue of disqualification is a very intricate and delicate one. It is intricate because the attack is made against a person who is supposed to be the pillar and fountain of justice…justice is deeply rooted in the public having confidence and trust in the determination of disputes before the Court. It is of paramount importance to ensure that the confidence of the public is not eroded by the refusal of Judges to disqualify themselves when an application has been made.”

When to Recuse Oneself?

A judicial officer should recuse himself in the event a conflict of interest arises in a matter in which he is acting. Under Regulation 20 (1) of the Judicial Service (Code of Conduct and Ethics) Regulations, 2020 (the Judicial Service Regulations) a Judge is obligated to use the best efforts to avoid being in situations where personal interests conflict or appear to conflict with his official duties.

Recusal is a matter of judicial discretion and judicial officers should recuse themselves whenever they feel they may not appear to be fair or where they feel their impartiality would be called into question. Regulation 21 of the Judicial Service Regulations, behoves a judicial officer to disqualify oneself in proceedings where his or her impartiality might reasonably be called into question, including but not limited to instances in which the judicial officer has a personal bias or prejudice concerning a party or his advocate or personal knowledge of facts in the proceedings before him. The Judicial Service Regulations are intended to ensure maintenance by judicial officers of integrity and independence of the judicial service.

A judicial officer may recuse himself or herself in any proceedings in which his or her impartiality might reasonably be questioned, including instances where the judicial officer:

1. i) is a party to the proceedings
2. ii) was, or is a material witness in the matter in controversy

iii) has personal knowledge of disputed evidentiary facts concerning the proceedings

1. iv) has actual bias or prejudice concerning a party
2. v) has a personal interest or is in a relationship with a person who has a personal interest in the outcome of the matter
3. vi) had previously acted as a counsel for a party in the same matter

vii) is precluded from hearing the matter on account of any other sufficient reason

viii)a member of the judicial officer’s family has economic or other interest in the outcome of the matter in question

The foregoing list is by no means exhaustive and the overriding principle is to ensure that the perception of fairness is at all times maintained as was stated by the Supreme Court in the case of Jasbir Singh Rai & 3 Others v Tarlochan Singh Rai & 4 Others (2013) eKLR as follows:

“…it is evident that the circumstances calling for recusal, for a Judge, are by no means cast in stone. Perception of fairness, of conviction, of moral authority to hear the matter, is the proper test of whether or not the non-participation of the judicial officer is called for. The object in view, in the recusal of a judicial officer, is that justice as between the parties be uncompromised; that the due process of law be realized, and be seen to have had its role; that the profile of the rule of law in the matter in question, be seen to have remained uncompromised.”

Objective Standard

Noting that bias may be easy to detect in others but difficult to detect in oneself – the standard to be applied when considering recusal is an objective rather than subjective one. As was stated by the Court in Sabatasso v Hogan 91 Conn. App. 808, 825 (2005): “The standard to be employed is an objective one, not the Judge’s subjective view as to whether he or she can be fair and impartial in hearing the case… Any conduct that would lead a reasonable person knowing all the circumstances to the conclusion that the Judge’s impartiality might reasonably be questioned is a basis for the Judge’s disqualification. Thus, an impropriety or the appearance of impropriety that would reasonably lead one to question the Judge’s impartiality in a given proceeding clearly falls within the scope of the general standard… The standard is not whether the Judge is impartial in fact. It is simply, whether another, not knowing whether or not the Judge is actually impartial, might reasonably question his impartiality, on the basis of all the circumstances.”

Doctrinal Exceptions

There may be circumstances in which judicial officers may be compelled to continue sitting, notwithstanding concerns on perceptions of bias or conflicts of interest. The “doctrine of necessity” has been used for a long time in common law jurisdictions to allow judges to sit in matters where the Court does not have an alternative competent person to adjudicate a matter before it, and thus quorum cannot be formed without him and no other competent Court can be constituted.

The “doctrine of the duty to sit” flows from the Constitution and common law. Since all judicial officers take an oath to serve and administer justice, it is implied that there is a duty to sit imposed upon them by the value and the principle of the rule of law. Judicial officers should thus resist the temptation to recuse themselves simply because it would be more convenient to do so. The doctrine requires judicial officers not to recuse themselves unless there are compelling reasons not to sit. The doctrine was discussed by the Supreme Court (Ibrahim, SCJ) in his Lordship’s concurring opinion in Gladys Boss Shollei v Judicial Service Commission (2018) eKLR stating that the doctrine safeguards a party’s right to be heard and determined before a Court of law: “Tied to the Constitutional argument above, is the doctrine of the duty of a Judge to sit. Though not profound in our jurisdiction, every Judge has a duty to sit, in a matter which he dushould sit. So that recusal should not be used to cripple a Judge from sitting to hear a matter. This duty to sit is buttressed by the fact that every Judge takes an oath of office “to serve impartially; and to protect, administer and defend the Constitution.” It is a doctrine that recognizes that having taken the oath of office, a Judge is capable of rising above any prejudices, save for those rare cases when has to recuse himself. The doctrine also safeguards the parties’ right to have their cases heard and determined before a Court of law.”

Judicial officers must therefore take into account the fact that they have a duty to sit in any case in which they are not obliged to recuse themselves. They should therefore not readily succumb to bullying or intimidation by a party to recuse themselves. In the case of Prayosha Ventures Limited vs NIC Bank Ltd & Others (2020) eKLR the Court (Omondi, J – as she then was) dismissed a recusal application and found thus:- “It is not lost to me that the issue of recusal was spontaneously announced once I declined to extend the orders, and there should be no pretence by Mr. Lagat that the Interested Party instructed him to apply for my recusal… I have no lien over the matter, and would be more than willing to have this matter taken over by another judicial officer, except that the manner in which the recusal is sought reeks of mala fides clothed with sharp practice, outright bullying and intimidation. That where a litigant does not call the tune and pay the piper, then the bias flag is waved all over. Indeed, for good measure, Dr Kiprono reminded this Court that his client would be considering presenting a complaint to the Judicial Service Commission over my conduct in this matter. If that was not intended to scare the daylights out of me, then I do not know why the name of my employer was being invoked at that point.”

Similarly, in Dobbs v Tridios Bank NV (2005) EWCA 468 the Court cautioned itself as follows with respect to the antics of a certain Mr. Dobbs: “… But it is important for a Judge to resist the temptation to recuse himself simply because it would be more comfortable to do so. The reason is this. If Judges were to recuse themselves whenever a litigant – whether it be a represented litigant or a litigant in person – criticised them (which sometimes happens not infrequently) we would soon reach the position in which litigants were able to select Judges to hear their cases simply by criticizing all the Judges that they did not want to hear their cases. It would be easy for a litigant to produce a situation in which a Judge felt obliged to recuse himself simply because he had been criticized – whether that criticism was justified or not. That would apply, not only to the individual Judge, but to all Judges in this court; if the criticism is indeed that there is no Judge of this court who can give Mr. Dobbs a fair hearing because he is criticizing the system generally. Mr. Dobbs’ appeal could never be heard.”

Conclusion

Judicial recusal is a fundamental principle that upholds the integrity and impartiality of the justice system. It ensures that judicial officers presiding over cases have no conflicts of interest and can deliver fair and unbiased decisions. It is essential for judicial officers to exercise their discretion judiciously when considering recusal, balancing the principles of fairness, independence, and the efficient administration of justice. Ultimately, the goal is to maintain the integrity of the judicial system and safeguard the fundamental right to a fair and impartial trial for all parties involved.

A long-held legal position on performance bonds in Kenya is that the terms of an underlying construction contract are irrelevant to a Court when deciding interdict proceedings arising from payments under an on-demand guarantee. The position is anchored upon the principle that liability under an on-demand guarantee is primary and payment by the guarantor is to be made in response to a demand, irrespective of any default under the principal contract.

Performance Bonds Defined

A performance bond is defined as a financial guarantee to one party in a contract against the failure of another party to meet its obligations. It is ordinarily issued by a bank or other financier, to ensure that a contractor fulfills its contractual obligations under a contract.

Important to performance bonds are the parties involved. The principal is the party who requests the surety to issue the bond and whose obligations are guaranteed. The obligee is the party who requires the principal to obtain the bond and who receives the benefit of the guarantee. The surety is the party who issues the bond that guarantees the obligations of the principal, such as a banking institution.

A performance bond is ordinarily triggered by the principal’s default in the performance of the bonded contract. At times, the contract specifies certain events which would constitute a “default”. More often than not however, a default is determined simply by the principal’s failure to meet a contractual obligation.

In this article, we consider a recent decision by the High Court of Kenya (Mongare J) in HCCCOMM No. E359 of 2022: Civicon Limited v Fuji Electric Co. Limited & 2 Others (the Suit) in which the Court dismissed two (2) applications seeking to restrain Equity Bank (Kenya) Limited (the Bank) from paying Fuji Electric Co. Limited (Fuji) the proceeds of a USD 2.3 million performance bond issued in Fuji’s favour (the Performance Bond).

Background to the Case

Sometime in 2018, Kenya Electricity Generating Company PLC (KenGen) and Marubeni Corporation (Marubeni) entered into a contract for the construction of a Geothermal Power Plant Project. Marubeni subcontracted its scope of works to Civicon Limited (Civicon) and Fuji who formed a consortium and entered into various agreements detailing their respective scope of works. It was also agreed by the parties that Civicon would provide and maintain with Fuji, the Performance Bond to secure its due performance under the contracts. Accordingly, Equity Bank issued the Performance Bond to Fuji in the sum of USD 2.3 million on behalf of Civicon.

In 2022, a dispute between the parties arose from Fuji’s decision to call up the said Performance Bond which Civicon alleged, inter alia, to have been done in breach of the relevant agreements signed by the parties. Civicon therefore filed a suit accompanied by an application in which it sought and obtained an interim order restraining the Bank from effecting any payment to Fuji arising out of the Performance Bond (the Status Quo Order).

The Stay Application

By a Notice of Motion application dated 30th September 2022 (the Stay Application), Fuji applied to stay the Suit and the proceedings filed by Civicon. The Stay Application was based on grounds that, they concerned a dispute regarding Fuji’s right to call up the Performance Bond, which was subject to an arbitration clause under the various agreements entered into between the parties. Fuji submitted that the parties expressly ousted the jurisdiction of the High Court in electing to resolve any dispute arising between them by way of arbitration.

Civicon opposed the Stay Application on grounds that the issue of calling up or not of the Performance Bond is not an arbitrable matter within the framework of the arbitration clause contained under the various agreements. Further, Civicon argued that the dispute in the matter involves the Bank which is not privy to the agreements whose arbitral clause Fuji purported to invoke.

The High Court Decision

By way of a Ruling delivered on 12th June 2023 (the Ruling) Hon. Lady Justice Mongare (the Judge) allowed Fuji’s Stay Application on grounds, amongst others, that it was expressly intended that all disputes between the parties, including a dispute concerning the Performance Bond, be resolved by way of arbitration. The Judge considered the fact that Civicon’s Suit and its application was hinged upon whether or not Fuji had a right to call up the Performance Bond on account of the various claims it had against Civicon and found that the Performance Bond was a creation of the agreements from which the arbitral clause emanated.

For the said reasons, the Judge stayed the proceedings in the Suit pending reference of the matters raised therein to arbitration and also set aside the Status Quo Order restraining the Bank from effecting any payment to Fuji arising out of the Performance Bond.

The Section 7 Application

Notwithstanding the stay order and the Ruling, Civicon proceeded to file another application before the High Court under section 7 of the Arbitration Act, 1995 (the Arbitration Act) in which it sought and was granted, an interim measure of protection restraining the Bank from effecting any payments arising out of the Performance Bond to Fuji, pending conclusion of the arbitration proceedings (the Section 7 Application).

Civicon anchored the Section 7 Application on grounds amongst others, that if the Bank were to honour the Performance Bond, the substratum of the arbitral proceedings would be eroded.

In response thereto, Fuji raised a preliminary jurisdictional issue that the Court, having stayed the proceedings and directed the parties to submit their dispute to arbitration, was now functus officio and could not make any further orders in the matter.

The Judge delivered a Ruling on the Section 7 Application on 15^th August 2023 (the Section 7 Ruling), the upshot of which was that the Court agreed with the arguments proffered by Fuji, specifically that the Court, having already rendered its decision in the matter, is now bereft of jurisdiction and could not make any further orders therein. Accordingly, the Judge dismissed the Section 7 Application and once again, vacated the interim Orders restraining the Bank from effecting any payment to Fuji arising out of the Performance Bond.

Upshot

The High Court’s decision sets an important precedent in two (2) respects. Firstly, where parties have expressly ousted the jurisdiction of the Court in deciding that any dispute arising between them be settled through arbitration, the Court is duty bound to uphold the arbitration agreement between them. This is notwithstanding the fact that the dispute arose from a decision to call up a performance bond in which the principal is not privy to. The fact that the Performance Bond was a creation of the agreement between the parties in which the arbitral clause emanated from is sufficient for the Court to hold parties to the terms of their agreement.

Secondly, a Court will be reluctant to grant interim measures of protection where it has already stayed the matter and referred the proceedings to arbitration. This principle is anchored upon the basis that the Court is functus officio i.e. it has already rendered its decision in the matter and therefore lacks the power or jurisdiction to make any further orders until the arbitration process is finalized.

The Sanctity of Performance Bonds

In rendering its decisions, the High Court has affirmed the sanctity and commercial importance of on-demand guarantees. The very nature of an on-demand-guarantee means that it is payable unconditionally upon demand. By agreeing to provide a bond which is payable on demand, a principal agrees that the bond may be called pending resolution of any dispute with the counterparty beneficiary. It therefore requires strict compliance and its enforcement is neither dependent nor affected by any underlying dispute between the parties.

As was aptly put by the High Court in Eli Holdings Ltd v Kenya Commercial Bank (2020) eKLR:

“A bank guarantee is an autonomous contract which requires strict compliance to its terms. The Bank has no obligation to question the performance or otherwise of the obligations of the parties in the underlying contract…As a general proposition, a demand guarantee is independent of the primary contract and will not be affected by a dispute between the parties to the underlying transaction.”

As Civicon has lodged an Appeal against the initial Ruling, it will be interesting to see what the Court of Appeal makes of the matter. For now, we align ourselves with Lord Denning in the case Edward Owen Engineering Ltd. v Barclays Bank International Ltd. and Another (1978) 1 All ER 976 where the learned Judge opined that:

“The performance bond given by the bank is a binding international obligation payable on demand. If an interim injunction were granted in a case of this sort it would affect the pattern of international trading. There is no reason why the bank should be involved in disputes between buyer and seller.”

Competition & Tariff Commission v. Ashram Investments (Private) Limited and Others (91 of 2024) 2024 ZWSC 91 (3 October 2024).

The recent Supreme Court judgment has sparked interest on the role and powers granted to the Competition Tariff Commission (CTC) under the Competition Act [Chapter 14:28] (the Act), particularly in merger approvals and penalty enforcement for non-compliance with notifiable merger rules. To prevent prejudicial monopolistic tendencies and promote public interest, courts have shown reluctance to interfere with CTC decisions, thereby discouraging disregard for the law and promoting competition.

BACKROUND

Innscor Africa Limited is a company that wholly owns Ashram Investments Limited. In 2013 Ashram wanted to acquire 59% shareholding in both Podutrade (Pvt) Limited and Profeeds (Pvt) Limited to which CTC did not approve. In 2015 the parties decided to go further with the merger under 49% shareholding and only notified the CTC about the merger (3 years 9 months later)  in February 2019 after their new legal practitioner had advised them to do so in December 2017. The biggest challenge with the merger being that Innscor has shares in National Foods. National Foods and Profeeds are the largest and second largest competitors in the stock feed market and Innscor also has shares in Irvine’s which is a major customer of both. The merger raised concerns over a monopoly being created in the stock feeds market and controversy as to what constitutes a merger contrary to public interest.

OBJECTIVE

This commentary highlights key points from the case law under review.

WHAT IS A MERGER IN ZIM LAW

Section 2 of the Act” defines a merger as the direct or indirect acquisition or establishment of a controlling interest by one or more persons in the whole or part of the business of a competitor, supplier, customer or other person whether that controlling interest is achieved as a result of the purchase or lease of the shares or assets, amalgamation or any other means, of a competitor, supplier, customer or other person;

DEGREE OF JUDICIAL OVERSIGHT

A reading of the Preamble and s5 of the Act show that the intention of the legislature was to create a specialised body that fosters competition, prevent restrictive practices, and regulate mergers and monopolies in Zimbabwe. The court recognised that CTC has all due responsibility to decide which practices are harmful or not to competition. This also means the decisions of CTC will not be lightly interfered with without fully taking into consideration the relevant laws which it has to comply with. The fear of the courts is that if every decision of the CTC can be lightly interfered with then it defeats reasons for its creation, encourage companies to disregard the law, form monopolies or indulge in unlawful conduct. Hence the role and decisions of the CTC are not only regulatory but penal and deterrent in nature thus encouraging lawful competition.

NOTIFIABLE MERGER: LEVEL OF SHARE HOLDING VS THRESHOLD SET BY THE MINISTER.

One of the Arguments raised by the Respondents in this case was that the reason for the failure to timeously notify CTC was due to the fact that a 49% shareholding is a threshold below 50%. However in Zimbabwe, under SI 126 of 2020 section 5, merging companies whose combined annual turnover in or from Zimbabwe or whose combined assets in Zimbabwe are valued at or more than ZW$ 10 000 000.00 have the prerequisite responsibility of notifying CTC of the merger within 30 days of conclusion of the merger agreement (s34A (1) (a) of the Act).This means a company can have a shareholding of 5% and still be required to notify CTC. It is not about the level of shareholding but whether one meets the threshold set which is something companies should be wary of.

MONOPOLY

A monopoly is a situation in which a single person exercises, or two or more persons with a substantial economic connection exercise, substantial market control over any commodity or service (s2 of the Act). The future of competition in the stock feed market is high as it has also been joined by players such as the Korea Programme for Innovation on Agriculture (KOPIA) forging deeper agriculture and trade cooperation in Zimbabwe. However, with competition also comes the desire for major players to remain in control which is not bad as it is the aim of every corporate, however, monopoly means it gets to the point where one player controls the economy with the option of providing goods at exorbitant prices or substandard goods.

CTC MERGER EVALUATION CRITERIA: EFFECT ON PUBLIC INTEREST.

TEST- WHAT IS THE REASONABLE LIKELIHOOD OF A MONOPOLY OCCURING: LONG-TERM EFFECTS.

Before the CTC approves of a notifiable merger, one of its critical considerations is the broad test in s32 (4) of the Act, ‘the likelihood of events’. Is there a likelihood that the merger will lessen among other things competition or will likely result in a monopoly situation. The likelihood of a monopoly also means the merger is contrary to public interest.

National Foods and Profeeds being the largest and second largest stock feed competitors was already befitting of the likelihood of a monopoly being formed. With the Influence of Innscor as stated by the court, Profeeds stock feeds shops went from 19 to 40 and Innscor’s share in the market had risen to 57% with the next biggest competitor at 11%. The fact that there are 20 other players in the market or the fact that there has been an increase in employment is not enough to rule off the likelihood of the merger being against public interest.

‘The Commission should not only look into the current effects of the merger or those of the near future.  It should consider these and also look into the likely effects of the merger in the long-term.  It should not adopt a simplistic approach to the assessment of the long-term effects of a merger but should be guided by the reasonable likelihood of such events occurring.’

This means initially the monopoly might look favorable by creating employment and programs like the training of farmers. However, ‘in the long run’ means when there is potential of a concentration in power then what the future holds for the stock feeds market and for the livestock industry as a whole is the likelihood of:

• An increase in prices which the consumer would be forced to adhere to as the industry will scarcely have any competition.
• The likelihood of substandard goods being produced at high prices.
• Small businesses struggling to compete and forced to close.
• Barriers to entry into the market
• Elimination of effective competition

Thus in Zimbabwe the most crucial take for a merger to be approved is not more about its economic benefit to the merging parties but whether it is in line with competition law and policy and its outlook in the long run. It is the discretion of the CTC on whether there is an existence of a monopoly in the long-run and whether it is prejudicial to competition.

PENALTY CLAUSE: S34A (4) INTERPRETATION OF PRECEDING FINANCIAL YEAR

The failure to notify CTC of a notifiable merger gives the CTC discretion to impose a penalty that may not exceed ten per centum of either or both of the merging parties’ annual turnover in Zimbabwe as reflected in the accounts of any party concerned for the preceding financial year.

The issue was whether the preceding year for the calculation of a penalty is the year preceding the notification of a merger or the year preceding the merger.

The Court did not explicitly address the issue however, the appeal succeeded in favour of CTC in its entirety with the question imposed being one of the grounds for appeal. Thus preceding financial year means the year preceding the imposition of the penalty.

FACTORS CONSIDERED IN THE EVALUATION OF A PENALTY.

According to section 34A (5) of the Act When determining an appropriate penalty, the Commission shall consider the following factors—

(a)        the nature, duration, gravity and extent of the contravention; and

(b)        any loss or damage suffered a s a result of the contravention; and

(c)        the behaviour of the parties concerned; and

(d)        the market circumstances in which the contravention took place; and

(e)        the level of profit derived from the contravention; and

(f)        the degree to which the parties have co-operated with the Commission ; and

(g)        whether the parties have previously been found in contravention of this Act.

Whether you fail to give notice within the stipulated time or you continue with the merger without approval all factors above will be considered as a whole and it is on all of these factors that determines whether CTC can impose a penalty or not.

CONCLUSION

The recent Supreme Court Judgment sheds light on merger regulation and competition law in Zimbabwe. The CTC has the  responsibility and discretion to approve  mergers based on its relevant laws and policy to which the courts will not lightly interfere with. Further, there is a broad criteria for the evaluation of mergers. For this reason it is recommended to consult with knowledgeable counsel when undertaking a merger and where parties are not clear seek an advisory opinion from the CTC before undertaking a merger.

Living in the digital age has seen a surge in the monetisation of data, especially in the platform economy, where personal data relating to human behaviour is especially valuable. Personal data now forms an integral part of business models particularly for businesses in zero price markets. As such, businesses compete to acquire and access as much personal data as possible so as to gain a competitive advantage over their rivals. The increased use of personal data brings the intersection of the laws relating to data protection and competition into sharper focus.

Regulatory Framework

Data Protection is regulated by the Data Protection Act, 2019 (the DPA). Sections 25, 26 and 32 of the DPA provide for the principles of data protection, the rights of a data subject as well as the conditions of consent for processing data. These sections mirror articles 5, 7 and 13 to 23 of the European Union General Data Protection Regulation (EU GDPR). These provisions work towards ensuring, inter alia, that personal data is “collected for explicit, specified and legitimate purposes and not further processed in a manner incompatible with those purposes”. They also accord a data subject the right “to object to the processing of all or part of their personal data and withdraw their consent at any time”. Notably, when assessing whether consent is given freely, the Office of the Data Protection Commissioner (the ODPC) takes into consideration, among other things, whether “provision of a service is conditional to consent being given”.

On the other hand, the Competition Act, 2010 (the Competition Act) regulates competition in the market, with the Competition Authority of Kenya (CAK) established as the regulator. Focal to this article are the restrictive trade practices prohibited by sections 21 to 24 of the Competition Act. Sections 23 and 24, in particular regulate dominant undertakings and prohibit conduct which amounts to an abuse of their dominance. These sections adopt the interpretation of Article 102 of the European Union Treaty on the Functioning of the European Union (TFEU).

Abuse of Dominance

In Hoffmann-La Roche & Co. AG v Commission of the European Communities (1979) I-00461, abuse of dominance was defined as the practice of an undertaking in a dominant position to influence the structure of the market, whose result is that of hindering com- petition, through methods that depart from those which condition normal competition.

The Competition Act and the TFEU have consolidated the fol- lowing trade practices that are deemed an abuse of dominance:

i) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

ii) limiting or restricting production, market outlets or market access, investment, distribution, technical development or technological progress through predatory or other practices;

iii) applying dissimilar conditions to equivalent transactions with other trading parties;

iv) making the conclusion of contracts subject to acceptance by other parties of supplementary conditions which by their nature or according to commercial usage have no connection with the subject-matter of the contracts; and

v) abuse of an intellectual property right.

In Lietuvos geležinkeliai AB v Commission (2020) EU:C: 2023:12 the Court opined that “the list of abusive practices contained in Article 102 does not exhaust the methods of abusing a dominant position prohibited by EU law”. However, the abuses are largely classified as either exclusionary or exploitative in nature. Examples of exclusionary abuses are those in which a dominant undertaking enters into exclusive dealing agreements or offers conditional rebates, whereas examples of exploitative abuses include excessive pricing, price discrimination or unfair trading practices.

The Intersection

As mentioned above, the platform economy commercialises the use of personal data which brings about the interplay between data protection law and competition law. Data subjects who consent to the use of their data, are also consumers in the same respect. Whereas the ODPC is concerned with harmful privacy practices by platforms, the CAK looks out for restricted trade practices that harm the consumer or distort competition. Recently, these regulatory obligations have overlapped one another, as can be seen in the following cases:

Amazon Marketplace

Amazon plays dual roles on its platform: being a marketplace as well as an online retailer. Amazon provides a space for online retailers to sell their products while also selling its own-branded products, in competition with those online retailers. By virtue of its role as a marketplace, naturally, Amazon has access to the data of the retailers. Such data includes statistics on order and shipment numbers, the retailers’ turnover as well as their growth over the years. This data can show different strategies employed by sellers to achieve financial growth or otherwise.

Amazon is said to have used this data without the retailers’ (freely given) consent to gain a competitive advantage over the retailers as the data formed a basis for Amazon’s own business strategies. As such, in July 2019, the European Union Commission (EU Commission) launched investigations into Amazon’s conduct of using retailers’ non-public seller data. In 2022, the EU Commission is- sued a Statement of Objection. It held a preliminary view that Amazon abused its dominant position and circumvented the usual risks of competition exclusively as a result of its access to its competitors’ non-public data.

In this case however, the EU Commission did not make a final de- termination on whether the conduct was anti-competitive. Amazon offered commitments to stop using the retailers’ data prior to the completion of investigations, which the EU Commission accepted. Nevertheless, it is evident that the EU Commission is likely to deem the data breaches by Amazon as anti-competitive upon conclusion of the investigations.

Meta: Facebook Social Network

Meta Platforms, the company that houses social networks: Face- book, WhatsApp, Instagram and more recently Threads, has come under fire for data privacy breaches which have been deemed anti-competitive. Following several years of investigations, the Federal Cartel Office (FCO) in Germany found that Meta had made the use of Facebook accounts by German citizens conditional on Meta’s processing of their third-party data (which they term “off-Face- book data”). Thereafter, the FCO prohibited Meta from doing so and further ordered Meta to make it clear that the said personal data would neither be collected nor used without the consent of a Facebook user, nor will the use of the network be made conditional on consent.

Dissatisfied with this decision, Meta filed a case against the decision to the Düsseldorf Higher Regional Court. The Regional Court in turn raised concerns and saw it fit to stay further proceedings and refer a number of questions to the Court of Justice of the European Union (CJEU) for a preliminary ruling. The crux of the matter was whether a national competition authority could find that the EU GDPR had been infringed, whilst investigating an undertaking’s abuse of dominance.

On 4th July 2023, the CJEU delivered its Judgment in Meta Plat- forms and Others v Bundeskartellamt (2023) EU:C:2023:537 and held inter alia as follows:

“It follows that, in the context of the examination of an abuse of a dominant position by an undertaking on a particular market, it may be necessary for the competition authority of the Member State concerned also to examine whether that undertaking’s conduct complies with rules other than those relating to competition law, such as the rules on the protection of personal data laid down by the GDPR.

…access to personal data and the fact that it is possible to process such data have become a significant parameter of competition between undertakings in the digital economy. Therefore, excluding the rules on the protection of personal data from the legal framework to be taken into consideration by the competition authorities when examining an abuse of a dominant position would disregard the reality of this economic development and would be liable to undermine the effectiveness of competition law within the European Union.”

Meta: Threads Social Network

July 2023 proved a busy month for Meta. Notwithstanding the unfavourable Judgment received in Meta v Bundeskartellamt, on 6th July, Meta launched a new social media network, Threads (the App) which has already received widespread scrutiny and criticism and is potentially under investigation by the US Federal Trade Commission (FTC). It is reported that sources within Meta have disclosed that they are delaying the App’s launch within the European Union due to “legal uncertainty”. This can be attributed especially to the recently released EU Digital Markets Act, which has seen Meta classified as a “gatekeeper” giving the tech giant addition- al regulatory obligations.

The App’s criticism is attached to privacy as well as antitrust concerns. To begin with, the App mandates that new users ought to have an Instagram account and users who intend to delete the App, would have their associated Instagram account deleted as well. This is an overt attempt at tying the App to Instagram, an abuse of dominance contrary to the Competition Act, TFEU and Antitrust laws globally.

With respect to privacy breaches, it has been observed that the App fails to seek users’ consent to track, collect and process sensitive personal data such as the users’ health conditions. The purpose of these activities is to sell that personal data to vendors, who would then advertise to the users medication related to their health issues. Meta has relied on legitimate interest as a reason for collecting the said sensitive personal data. However, it can be contended that explicit consent is a requirement prior to the processing of sensitive personal data, especially when the purpose for collecting the data is targeted advertising. Anything contrary to the foregoing may be deemed to be a privacy breach as well as an abuse of dominance.

The App, having been launched recently, is still under scrutiny by the global antitrust watchdogs and if the recent trend is anything to go by, sanctions from the said watchdogs would not come as a surprise.

Once the journey of life comes to its inevitable end, the task of laying one’s dearly departed to rest becomes an essential and sacred responsibility. The right to bury loved ones, grounded in a rich tapestry of cultural, religious, social and legal traditions, is a fundamental aspect of human dignity and compassion. It is a right that transcends borders, beliefs, and backgrounds, underscoring a shared value across humanity. In this article, we delve into the right to bury the deceased, exploring the legal dimensions through the precedent set by Courts in Kenya.

The Right to Bury

The right to bury is an inalienable right as human dignity demands as much – harking back to the great Greek playwright Sophocles’ play, Antigone, when in stark disobedience of Creon’s rules, Antigone insists on giving her brother, Polyneices, a decent burial, rather than have his corpse lie in the open, to be devoured by dogs and vultures. In Kenya, what has been the subject of numerous litigious proceedings is the priority given to the bearers of this inalienable right. At the heart of these type of proceedings has invariably been the spouses and kin of the deceased, each asserting their precedence over the other.

Most recently, the decision of the High Court at Nairobi (Ogola J) in Zipporah Masese Onderi v Joseph Ontweka & 3 Others (Civil Appeal No. E048 of 2023) reignited the controversy once more. Typically, the circumstances of the matter pitted the deceased’s widow, who was the Appellant, against the deceased’s brothers in a legal battle to determine the deceased’s final resting place.

In tipping the scales towards the widow, the Court held that the nuclear family of a deceased person has the priority right to bury their loved ones unless exceptional circumstances arise to render them undeserving of doing so.

Given that the likeness of the applicable customs, the Court’s decision in Zipporah Masese Onderi v Joseph Ontweka & 3 Others, was persuaded by an earlier decision rendered by the High Court in Nakuru (Maraga J – as he then was) in Oliver Bonareri Omoi & 5 Others v Joseph Baweti Orogo (2010) eKLR. The Court was once again forced to play umpire in a push-and-pull between the widower and children of the deceased and ultimately decided that the children had the priority right over the deceased’s estranged husband, who was the Respondent in the matter, to bury their late mother. In reaching its determination, the Court in Oliver Bonareri Omoi & 5 Others v Joseph Baweti Orogo was guided by the deceased’s final wishes and the nature of her relationship with her estranged husband, both of which extinguished his right as a widower to bury her.

Such has become the principle that has been pronounced by Kenyan Courts, thus putting to question the right of the kin to bury the deceased, who was also their loved one in equal measure. The precedent set by Kenyan Courts on this matter is that whereas the deceased’s

kin are indeed deserving of this right, it is however subject to an order of priority that was set out succinctly by the Court of Appeal in SAN v GW (2020) eKLR being: the spouse, children, parents and siblings of the deceased, in that order.

As demonstrated above it is pertinent to note, nonetheless, that the right to bury is not absolute. It may be extinguished by numerous factors among them being the deceased’s wishes which, though not legally binding, the Courts have refrained from overlooking, and a person’s conduct towards the deceased.

Generally, the Court has to consider all the circumstances of the case before rendering its decision on the right to bury. This was demonstrated in Samuel Onindo Wambi v COO & Another (2015) eKLR where the Court of Appeal found that although Luo customary law dictates that a wife should be buried in her husband’s home, the deceased was buried in Kakamega in line with her wishes given the ill treatment she had been subjected to by her husband’s family during and after the subsistence of their marriage.

Similarly, in SAN v GW while the Court of Appeal set out the order of priority with respect to the right to bury, it further clarified that this order of priority ought to be considered in light of the relationships maintained between the deceased and the persons claiming the right. In so doing, the Court held that while Luo customary law dictates that the first wife has the priority right to bury, the second wife’s right in this case superseded the first wife’s, given the strained relationship the first wife had with the deceased.

The Role of Customary Law

The loss of a loved one is an emotionally delicate matter that can easily lead to conflict among surviving family members. The catalyst in the ensuing conflict, at least as far as African societies are concerned, is usually the customs at play. More often than not, the surviving spouse tries to assert a position contrary to what the deceased’s customs provide for, leading to fierce opposition from the deceased’s kin.

Such was the case in the locus classicus case of Virginia Edith Wamboi Otieno v Joash Ochieng Ougo & Another (1987) eKLR, concerning a burial dispute over renown lawyer S. M. Otieno, and is thus commonly referred to as the “S. M. Otieno case”. Here, the kin’s reverence for Luo customary law was met on the battlefield by the widow’s complete disdain for it. In making arguments that Luo customary law did not apply and that the deceased should not be buried in Nyalgunga, his ancestral home, his widow, Wamboi Otieno, stated that; their marriage was governed by the Marriage Act, (Cap. 150) Laws of Kenya and not customary law, that no dowry was paid by the deceased, and that in fact, none was demanded by her parents, and that since marrying her, the deceased had practised Christianity and the Luo customs and traditions were therefore irrelevant. It was her case that the deceased had expressed the wish to be buried either in Nairobi or Matasia and that only she, and her sons, had any say in how to dispose of the remains of the deceased.

After careful consideration of the facts brought before him, Bosire J (as he then was) ordered that the deceased be buried in his ancestral home. In his disposition, Justice Bosire found that Luo customary law applied and dictates that the deceased’s final place of rest is determined by his or her family members and that this custom does not exclude women from being involved in the decision making. Accordingly, both the widow and the deceased’s kin in this case had equal right to make that call. However, because they could not reach a consensus, the Court was guided by the deceased’s wishes which stipulated that he desired to be buried next to his father in his ancestral home.

The facts of the S. M. Otieno case are strikingly similar to those in Zipporah Masese Onderi v Joseph Onwteka & 3 Others, save for the fact that Kisii customary law applied to the latter and the deceased therein had not made clear pronouncements on where he wished to be buried. In further developing the principles underpinning the right to bury, the Court found that Kisii customary law and Article 45 of the Constitution mirror each other, in the sense that they are highly protective of the basic unit of the family, which is the nuclear family.

In the same breath, Kisii customary law demands that the widow/ widower of the deceased has the priority right to bury their spouse. Given that the deceased in this case had not made his burial wishes known clearly, the Court was guided not only by Kisii customary law but also the Constitution in reaching the determination that the deceased would be buried in his matrimonial home.

It may therefore be said that the role of customary law is akin to that of a tiebreaker where the loved ones of the deceased are at loggerheads, and there being no clear line of priority being drawn. In this regard, customary law plays a persuasive role, to be weighed against other equally applicable factors such as the deceased’s final wishes and the relationship of the kin to the deceased during the deceased’s lifetime.

The Takeaway

Ironically, an individual’s right to bury their loved ones is one that has to be balanced with the very same right borne by other loved ones of the very same deceased person. It is not an absolute right as it may be overridden by other factors such as the deceased’s final wishes.

As death is sometimes sudden and untimely, it is not always possible for pertinent discussions on final wishes to be held. In such instances, the Court will, where family members are torn, decide the final resting place of the deceased under the guidance of the customary law applicable to them.

At the end of the day, the loss of a loved one remains an intensely painful experience, affecting all who are touched by its melancholic embrace. Amidst the disputes and conflicting emotions that arise, it becomes clear that the ultimate goal should transcend the battles and strife. The paramount objective lies in ensuring that our dearly departed find solace in their final resting place. In the depths of grief, it is crucial to find common ground, and embrace compassion and empathy for one another.

Nominated Senator, Crystal Asige, tabled the Persons with Disabilities Bill, 2023 (the Bill) before the Kenyan Senate on 22nd March 2023. The Bill seeks to replace the Persons with Disabilities Act (Cap. 133) Laws of Kenya (the Act), which has been in place since 16th June 2004. The Bill also intends to restructure the National Council for Persons with Disabilities (NCPWD) and provide an institutional framework for the protection, promotion and monitoring of the rights of persons with disabilities (PWDs).

The Bill is premised on Article 54 of the Constitution, which imposes an obligation on the State to ensure that the rights of PWDs are respected and upheld. The Bill also addresses the evolving needs of PWDs, ensuring that they are fully integrated in society. The Bill demonstrates Kenya’s commitment to complying with the Convention on the Rights of Persons with Disabilities by improving the standards of living and day to day activities of PWDs residing in Kenya.

The Bill was passed by the Senate on 21st February 2024 and is currently before the National Assembly for consideration. This article seeks to highlight some salient provisions of the Bill.

Greater Appreciation of PWDs’ Rights

PWDs will have the right to employment and will not be disqualified or terminated based on their disability. The Bill supports this by mandating employers to reserve at least five percent (5%) of employment opportunities for PWDs. The Bill additionally proposes that employees with disabilities serve an additional five (5) years, beyond the normal retirement age prescribed by the government. This translates to a retirement age of sixty-five (65) years for such employees with disability, as opposed to the current sixty (60) years stipulated in the Act.

The issue of termination of employment was addressed in the case Lucy Chepkemoi v Sotik Tea Company Limited (2022) eKLR where the Court noted that disability is not inability. Therefore, disability alone does not in itself amount to lack of capacity to discharge one’s professional duties, to warrant termination of employment.

Secondly, PWDs have the right to protection in all risky situations including armed conflicts, humanitarian emergencies and natural disasters. All institutions are required to obtain data relating to PWDs and share the same with agencies responsible for disaster management. In risky situations, PWDs are to be prioritised by the responding agencies, in the appropriate intervention mechanisms e.g., evacuation etc.

Thirdly, all PWDs have the right to effective access to justice on an equal basis with others. This will be done by exempting them from paying Court fees and providing them with braille services and sign language interpreters when they attend Court. The Attorney General, in consultation with the Law Society of Kenya, will also be required to develop regulations that provide free legal services to PWDs in certain situations, including matters involving infringement of their rights and fundamental freedoms.

Lastly, every PWD has the right to obtain registration documents e.g., a disability card, national identity card, birth certificate, passport etc. These documents will serve as proof of identity when a PWD seeks education, health care services and employment opportunities.

Incentives for PWDs

The Bill provides various incentives to PWDs. Firstly, an employee with a disability can be wholly or partially exempted from paying income tax on employment income. This is after an application for exemption is approved by the Cabinet Secretary responsible for matters relating to finance (the Cabinet Secretary) . Previously, a PWD could only apply for a tax exemption after undergoing a vetting process to determine if the applicant had a disability. In Issue 18 of Legal & Kenyan published in October 2023, we featured an article in which we discussed whether the tax exemption process for PWDs was superfluous. The article concluded that the vetting process was indeed superfluous as it was an unnecessary obstacle to PWDs who are seeking tax exemptions, since PWDs in seeking the exemption, would have already undergone a mandatory medical examination in advance.

The issue of vetting for purposes of exemption was addressed in HKK v National Council for Persons with Disability & Another (2023) KEHC 2418 (KLR) where the NCPWD had declined to renew the exempt status of the petitioner, under the Persons with Disabilities (Income Tax Deductions and Exemptions) Order 2010 despite having furnished the NCPWD with the required documents including a medical report certifying her disability. Consequently, the Court observed among others, that the failure by the NCPWD to renew her exemption deprived her of equal protection under the law, dignity and respect contrary to Articles 27, 28 and 54 of the Constitution.

Secondly, the Bill exempts tools and equipment used by PWDs from import duty and value added tax. This is a good addition as it makes these accessories more affordable and accessible to PWDs.

Finally, PWDs will be afforded an equal opportunity to access financial credit, for example bank loans, mortgages etc. Access to financial credit reduces dependance on others as it allows PWDs to fund their education or business ventures thereby sustaining themselves.

Enhanced Penal Consequences for Offences

Notably, the Bill has significantly enhanced protection for PWDs by augmenting the penal framework relating to offences against them, both in terms of increasing the punishment of existing offences under the Act and introducing new offences which presently do not feature under the Act. An example is the offence of concealment of PWDs. Under the Act, the penalty is only a fine not exceeding KES. 20,000. However, the Bill has increased the fine tenfold to KES. 200,000 or up to one (1) year imprisonment, or both.

There are also new offences proposed under the Bill, such as performance of a procedure by a medical practitioner, resulting in the infertility of a PWD. This offence will attract a hefty fine of up to KES. 3,000,000 or up to four (4) years imprisonment, or both. Another example is the intentional denial of food or fluids to a PWD by a person exercising care or responsibility over the PWD, which will attract a fine of up to KES. 200,00 or up to one (1) year imprisonment, or both.

Further Accommodation of PWDs

The Bill also proposes a raft of measures to further accommodate PWDs in their day-to-day life.

First, owners of public service vehicles (PSVs) would be required to modify their vehicles to suit PWDs. Once the modification is made, they may apply to the Cabinet Secretary for Finance for twenty-five percent (25%) of the modification cost. This would cushion the owners of PSVs from having to bear such costs. The proposed modifications would promote inclusion of PWDs in the transport sector and eliminate barriers that currently impede PWDs from fully enjoying public transport services.

Secondly, commercial and residential houses built by government agencies will reserve at least five percent (5%) of the units to PWDs, with favorable payment conditions like longer repayment periods.

This will address the barriers that PWDs face in the real estate market. Similarly, five percent (5%) of market stalls would be reserved for PWDs. This would foster economic independence as it would allow PWDs to engage in commercial activities.

Thirdly, all government departments would be required to have a disability mainstreaming unit headed by a member of the department. The disability mainstreaming unit would be responsible for ensuring compliance with the Bill’s provisions and discussing disability matters with the NCPWD. This would significantly contribute to the development of inclusive policies for PWDs.

Lastly, all media stations with television and radio broadcasts would, on a monthly basis, be required to allocate an hour of free airtime to discuss disability issues. This would help sensitize members of the public on disability issues and the importance of integrating PWDs in society. The NCPWD would also coordinate the publication of at least a column every month in print media on PWD issues.

Conclusion and Recommendations

Whereas the Bill marks a tremendous step in the right direction as far as enhancing PWD interests is concerned, the following proposals should be considered as the Bill undergoes scrutiny within the National Assembly.

i) The issue of vetting for purposes of registration as a PWD under the 2010 Regulations has not been addressed by the Bill. Therefore, there may be need to introduce an amendment to the Bill, to the effect that once a person has undergone a medical examination to ascertain his or her disability, there should be no further vetting undertaken by the vetting committee of the NCPWD.

ii) The Bill does not specify what the owner of a PSV who modifies his or her vehicle to accommodate PWDs should do, as far as the modification costs are concerned. It only provides that such owner shall apply to the Cabinet Secretary for twenty-five percent (25%) of the direct cost of modification. The drafters should clearly specify the nature of accommodation sought by the PSV’s owner from the Cabinet Secretary, whether a cash refund or a tax deduction etc.

iii) Whereas the Bill requires media houses to accord at least one (1) hour of free radio or television coverage on disability related issues per month, it doesn’t specify the place of streaming platforms in such coverage, noting that these platforms are increasingly becoming a source of information and interaction with the general public. Therefore, the role and place of social media should be provided for.

iv) Much as the NCPWD is obligated to ensure that at least a column is published per month on print media addressing disability matters, the Bill should consider whether social media posts fit within the scope of print media. It is noteworthy that social media is gaining traction as the new source of written information, which has, to some extent, impacted the business of traditional print media.

The mining industry continually reshapes itself in the face of market demands, technological innovations and societal expectations. The industry continues to thrive due to its ability to adapt to changing demands in environmental, social and governance (ESG) issues. ESG is therefore not new to the mining sector.

However, in recent years, there is an emphasis on sustainable and responsible mining practices due to the heightened expectations and greater involvement of investors. Investors now require key positive indicators on ESG factors. This has pushed mining companies to have bolder commitments with measurable targets in reporting progress on ESG compliance factors.

In this context, mining companies are prioritizing ESG considerations such as reducing carbon emissions, conserving water and implementing community engagement initiatives. Additionally, mining companies are demonstrating commitment to ethical practices and sustainability in order to maintain their social license to operate.

This article discusses the significant role ESG plays in the development of sustainable mining which ultimately benefit the performance of mining companies and the development of local communities.

 

Scope of ESG

ESG, as relates to business, refers to environmental, social and governance factors that companies aim to comply with, and investors consider in their investment decisions. The scope of each of the elements are:

Environmental- focuses on lowering carbon footprints, safeguarding biodiversity and optimizing the use of resources with a strong interest from investors in reducing carbon outputs and environmental conservation.

The social dimension involves engaging stakeholders and contributing to the well-being of local communities, highlighting the importance of human rights and interactions with residents as well as promotion of employee wellbeing and good labour practices.

Governance pertains to the sustainable management of resources, transparent disclosure practices and adherence to legal frameworks and good governance practices.

Consequently, mining companies must adopt operational methods that are environmentally friendly and promote sustainability. Additionally, they must cater for social needs, promote human rights and adhere to good corporate governance practices. Mining companies that effectively incorporate ESG factors into their operations are in a stronger position to attract investors.

 

Causes for Heightened Focus on ESG

Investors and lenders are increasingly focused on ESG factors when making investment decisions. Thus, to access capital, mining companies must demonstrate commitment to ESG concerns. The following are some of the general factors that have given rise to ESG compliance in the industry:

Investor attraction– Mining is a capital-intensive venture. To access funding, mining companies must demonstrate a robust commitment to addressing ESG concerns and a strong track record of ESG compliance. This is because, institutional investors consider ESG factors when making investment decisions. For example, the International Financial Corporation’s (IFC) Environmental and Social Performance Standards define standards that apply to investment decisions and are considered during credit review processes. Similarly, in certain markets, the influence of ESG rating agencies has resulted in ESG becoming a major focus in relation to IPOs for large mining companies.

Regulatory requirement– ESG requirements are finding expressions in domestic regulatory frameworks. Mining companies have no option than to comply with such regulations. Non-compliance results in heavy sanctions imposed on defaulters. For example, mining companies who unlawfully pollute a water resource beyond the level prescribed by EPA commit an offence. Social factors are covered in employment legislations while governance frameworks are dictated by corporate law and governance codes.

Marketing tool– ESG compliance is now a marketing tool to attract clients and investors. Investors are increasingly focused on ESG factors when making investment decisions, thus companies with strong ESG performance are more attractive to investors seeking sustainable and responsible investment opportunities.

Self-interest– ESG leads to long term sustainability of businesses. It is, therefore, in the interest of mining companies to adopt ESG measures to ensure sustainability of their business over a long term.

 

Ghana’s Regulatory Framework on ESG Factors & its Implementation in the Mining Industry

There is currently no composite law or regulation that governs ESG in Ghana. Nevertheless, ESG requirements in mining are supported by the existing legal framework for the mining industry including the Minerals and Mining Act and its regulations. Under the current regime, the grant of any mineral right is dependent on obtaining an environmental permit from the Environmental Protection Agency (EPA).

The grant of the EPA permit requires the submission of an environmental impact assessment and periodic reports in respect of economic activities that have an adverse effect on the environment. The EPA may also require a mining company to post a reclamation bond to secure implementation of reclamation.

To ensure standards are met and there is no threat to human life and/or the environment, there are strict requirements regarding mining activities. Additionally, relevant permits are required in respect of mining activities in a forest reserve. Regarding the social aspect, fundamental human rights are enshrined in the 1992 Constitution and enforced through various legislations. Employees have protections from unfair labour practices, and unhealthy and unsafe environments under the Labour Act.

In respect of the governance pillar, the Companies Act prescribes the structure for corporate governance, which is centred mainly on the shareholders, the board and management of the company. It allocates the role, powers and duties of each stakeholder, thereby imposing checks and balances on the exercise of power. The Act also covers the fundamental role governance plays in corporate business strategy and decision-making processes leading to profitability and growth.

The various legislations cover different aspects of ESG factors and have minimal reporting requirements. Secondly, the legislations do not provide the details required and leave out many ESG requirements to the discretion of mining companies. This has led to some mining companies resorting to box-checking of the general legislative framework rather than adopting innovative measures to achieve compliance.

Voluntary Codes/Frameworks

The major gap in ESG compliance is lack of a binding and enforceable legal framework. To fill this gap and to achieve ESG compliance, various voluntary codes are being adopted by mining companies to ensure adherence to standards in their reporting and compliance levels. The voluntary codes also help investors to measure the ESG credentials of mining companies.  The following ESG-related guidelines seek to encourage voluntary ESG-related compliance and disclosures:

Sustainable Development Goals and the Global Reporting Initiative (GRI) are the most used standards in the mining sector. The GRI is a sustainability reporting standard which mining companies in Ghana have subscribed to and covers sector-specific sustainability reporting requirements by companies across all the ESG factors.

Mining companies also observe International Council on Mining and Metals standards which provides standardized frameworks dedicated to ensuring a safe, fair and sustainable mining and metals industry.

Additionally, the standards of the Extractive Industry Transparency Initiative (EITI) 2023 has been endorsed by Ghana. It requires compliance with ESG requirements for managing mineral resources at the national level. The reporting obligations on companies is mainly on their environmental and social impacts.

The International Council on Mining & Metals (ICCM) 10 Sustainable Development Principles act as a best-practice framework for sustainable development within the mining and metals industry.

The Minerals and Mining Policy of Ghana also emphasises environmental regulation of mining activities, employment creation, and local economic development (social) which are aspects of ESG.

Though, these are voluntary codes, mining companies are taking active steps to comply with these requirements and reporting on compliance to attract investment.

Challenges of Implementation of ESG Factors

Adoption of ESG and complying with ESG factors are sustainability issues. However, there are challenges particularly in the Ghanaian context, in adopting and seeking to comply with ESG requirements especially in our competitive business environment. These challenges include:

Lack of codified enforceable rules– the regulatory environment for ESG compliance is complex and ever-changing. More importantly, there is no composite enforceable legal framework that comprehensively deal with ESG. It is therefore difficult for companies to stay current with changing requirements and fully understand what is required. This can be challenging to navigate.

Cost– implementing effective ESG practices can be expensive, and many companies may need more resources to invest in ESG initiatives.

Varied Voluntary Codes– there are overlapping voluntary codes/standards existing which can make it difficult for mining companies to determine which code to adopt for their ESG strategy.

Despite the challenges, the truth remains that, investors care about ESG and would only conclude transactions upon an assessment of ESG factors and ascertainment that a company has a track record of good ESG performance. For mining companies to be well positioned for investments, it is prudent for mining companies to develop a clear and robust ESG policy that assuages investor concerns regarding their business and promotes continued investment. Such policies must consider both the mandatory legal requirements, voluntary codes and the company’s specific corporate values and overall strategic priorities. Once an ESG policy is adopted, the next stage is the implementation with measurable goals for reporting.

Conclusion

To conclude, ESG compliance is becoming increasingly important for businesses as investors and other stakeholders demand greater accountability around ESG issues. In like manner, it provides a significant opportunity for mining companies to differentiate themselves by improving their sustainability by reducing the risks associated with ESG issues. By prioritizing ESG practices, mining companies can identify and mitigate risks and build a more resilient business.