How Harmonised Draft Can Turn Our Foreign Affairs into Domestic Issues

Previously published in the Business Daily. 

I must confess that I really like the Harmonized Draft Constitution of Kenya. However, I believe that there are at least two changes that would substantially improve the draft with regard to Parliament’s involvement and oversight role over the conduct of foreign affairs by the Executive branch.

I am particularly interested in foreign affairs as they relate to the accountability of contractual commitments made to corporations that get paid millions, and often billions, of Kenya’s shillings from the public purse.

Section 158 (4) of the Draft Constitution confers upon the President the power to “sign instruments of consent of the Republic to be bound by treaties and international agreements,” subject to the approval of Parliament.

This section read together with Section 124(2)(g) confers on Parliament the power to consider and approve treaties and international agreements. These are new powers for Parliament since under our current Constitution, the President is considered to have the sole discretion regarding which treaties and international agreements the country should enter into.

While it is welcome that Parliament will have this new power, I want to propose two additional powers that would strengthen its role in considering and approving treaties and international agreements.

The first issue is to is expand what qualifies as treaties and international agreements. Clearly a lot of multilateral, regional and bilateral treaties that are negotiated under the auspices of international organizations easily qualify. The draft Constitution however excludes the huge number of international agreements and contracts particularly with multinational corporations hired to provide services or goods to the Kenyan government from Parliament’s new power to consider and approve treaties.

Take the example of Inspection and Control Services Limited, (ICS), which was hired by the then Customs and Excise department in 1998 to provide pre-shipment inspection services. ICS Limited entered into a contract with the government that required binding arbitration if Kenya did not keep its end of the bargain.

A payment dispute did in fact arise and Kenya was ordered to pay Sh778 million to ICS Limited in binding international arbitration. This settlement amount Kenya was ordered to pay was not budgeted. As a result, ICS Limited got orders from a UK Court freezing several Kenyan government accounts. These accounts may be attached to settle ICS Limited’s claim against Kenya.

The ICS Limited case is one of several cases in which binding arbitration has put the country on the hook for huge payments to companies that enter contracts with government departments that do not have much oversight over when they enter into such expensive contracts.

Given the increasing number of such huge pay-offs from the consolidated fund or other government assets, as well as the role that corruption plays in procurement of some of these contracts to shadowy or well-connected companies, Parliament should exercise oversight in the consideration and approval of such agreements especially when they involve amounts above certain amounts.

One model for such oversight is provided by the External Loans and Credit Act, Chapter 422 of the Laws of Kenya.

This law requires that any agreements used to borrow or obtain credit by the government or any purchase of goods or services on credit must be based on estimates approved by Parliament.

Further, a report of the contracts entered into for such borrowing or acquisition of goods or services are required to be laid before Parliament. Reports to Parliament are required to specify the parties to the contract, the amount or value of the transaction, the currency in which the amount or value is expressed, the terms and conditions as to interest and repayment or payment. The External Loans and Credit Act also places an upper limit on how much money may be borrowed.

I propose that these kinds of requirements for contracts entered into by the government above a certain amount or value be reported to Parliament as soon as they are entered into.

Such an amount could be pegged at Sh1 million although it may well be that no limit at all is placed. In other words, it might be better for transparency purposes that all such contracts be reported to Parliament.

Further, I propose that such contracts be made public record. Currently, it is almost impossible to know what treaty or other commitments the government enters into every day on behalf of the country. This is one sure way to check corruption and siphoning off of public assets.

In the past, arguments about secrecy in procuring security related contracts have been made to justify lack of transparency and accountability surrounding such contracts which ended up costing taxpayers billions of unnecessary dollars.

Even if one was to accept the premise that some contracts should not be disclosed to Parliament or made public, there are many other ordinary commercial contracts that the government enters into every day that should be part of the public record.

Kenyans have a right to know how much it will cost them for services and goods paid out of government resources – if indeed such agreements and contracts are entered into for the benefit of the country.

Such Parliamentary oversight and public disclosure is as important as the need for Parliament to consider and approve treaty commitments we enter to protect human rights and prevent corruption as the draft Constitution anticipates. In short, I propose Section

124 (2)(g) be broadened to require reporting to Parliament of contracts entered into by the government such as under the External Loans and Credit Act.

Further, I propose that such contracts and agreements be publicly disclosed since they impose a cost to Kenyan taxpayers under the Consolidated Fund or other resources of the Kenyan government.

Second, I propose that the role of Parliament be broadened from being merely one of considering and approving treaties and international agreements to include a role in negotiating treaties and other international agreements.

There is no reason why Parliament cannot be incorporated in the negotiation of certain types of treaties such as those for example involving significant commitments in international trade both at the World Trade Organization and in regional economic communities such as in the East African Community.

One argument against Parliamentary inclusion is that it would delay negotiations and that Parliamentarians are often not well qualified to negotiate on behalf of the country.

These are all fair criticisms, but they do not in my view overcome the importance of having the most representative body in the country being involved in ensuring our treaty commitments are consistent with the best interests of the people. Thus, my second proposal is that the draft constitution be adjusted to reflect that empower Parliament to be involved in treaty negotiations relating in particular to international trade commitments.

One way of avoiding Parliament playing an obstructive role in sensitive negotiations is to have it pass legislation laying down negotiation mandates that set the parameters within which our negotiators can negotiate. Currently, our negotiators have absolutely no  parameters within which they operate as a matter of law – just like those who draw contracts with private companies like ICS, they can literally sell the country away!

Finally, I would like to note that Section 193 (4)(a) gives the Attorney General the power to draw, peruse and recommend agreements, contracts, conventions and documents to which Kenya is a party. That is appropriate as the Attorney General is the principal legal adviser to the Government. The two proposals I make above, in so far as they anticipate some kind of parliamentary involvement, may be argued to contradict the Attorney General’s constitutional power not to be under the direction or control of any person or authority. Such an argument however is short-sighted. This is because Parliament under the draft Constitution shares with the Executive authority over a variety of foreign affairs powers.

Therefore, the power of the Attorney General in this context is not an independent or sole power. Rather, it is a shared power as anticipated in the draft Constitution’s authority of parliament to consider and approve treaties. Indeed, it would be foolhardy of an Attorney General to submit to Parliament a treaty or agreement that Parliament would reject. Consultation between the Executive and the Parliamentary branch would inevitably be expected for the smooth functioning of the business of the government.

Ultimately, in this day and age, having greater coordination and cooperation between the various branches of the government particularly over foreign affairs matters touching on our economy are as crucial as over other types of international agreements.

After all, our economic security depends in large measure on how well we manage our scarce resources. For that reason, my proposals to require reports to parliament of contracts entered into on behalf of Kenya made public and to include Parliament in negotiation of treaties and significant contracts, are timely and should be taken seriously.

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