The high level forum on procurement reforms in Africa Tunis 16-17 NOVEMBER, 2009

1. The high level forum on procurement reforms in AfricaTunis16-17 NOVEMBER, 2009 ¨Holding governments accountable: the role of civil society in controlling and supervising public procurement¨ Prepared by: George O Adhanja National Council NGOs Kenya

2. Legal framework Public Procurement in Kenya is governed by the Public Procurement and Disposal Act, 2005, and the Public Procurement and Disposal Regulations, 2006. Public Procurement Oversight Advisory Board is established at Section 21 of the Act. Composition of the Advisory Board is spelt out in Section 22(1) and the number is specified by the Act as nine appointed by the Minister and approved by Parliament from persons nominated by prescribed organizations; and the Director-General.

3. Purpose of the Act • The purpose of the Act was to establish procedures for procurement and disposal of unserviceable, obsolete or excess stores and equipment by public entities to achieve: • maximized economy and efficiency; • promotion of competition and ensuring that competitors are treated fairly; • increased transparency and accountability in those procedures; • increased public confidence in those procedures; and • facilitation of promotion of local industry and economic development. • promotion of integrity and fairness of those procedures;

4. Composition of Public Procurement Oversight Advisory Board • The Minister for the time being in-charge of Ministry of Finance appoints nine persons out of a list 15 prescribed organizations as is contained in regulation 5 of 2006. Below is the list of the prescribed organizations: • Kenya Association of Manufacturers; • Law Society of Kenya; • Architectural Association of Kenya; • the Institution of Engineers of Kenya; • the Institute of Certified Public Accountants of Kenya; • the Kenya Institute of Supplies Management; • the Institute of Certified Public Secretaries of Kenya;

5. the Chartered Institute of Arbitrators; • the Kenya National Chamber of Commerce and Industry; • the Kenya Institute of Management; • the Computer Society of Kenya; • the Pharmaceutical Society of Kenya; • the Federation of Kenya Employers; • the Central Organization of Trade Unions • three other members appointed by the Minister;(c)  a Chairman appointed by the Minister from among the persons appointed under paragraph (a);

6. Weaknesses in the Public Procurement and Disposal Act-2006 • List of prescribed organizations as contained in Regulation 5 is merely dominated by professional groupings as opposed to umbrella bodies of CSOs. • Active CSO umbrella bodies in the list are only four, which are: Federation of Kenya Employers, Central Organization of Trade Unions, Kenya National Chamber of Commerce and Industry, and Law Society of Kenya.

7. It is however interesting to note that none of them was ever appointed into the previous and not even the current Boards of Public Procurement Oversight Advisory, Public Procurement Complaints Review and Appeals Board and any other related bodies. One can only be left to wonder whether this omission was by design in order to weaken Civil Society participation in the public procurement and disposal processes. • Prescribed list of organizations as in regulation 5 of 2006 gives minister a leeway for rejecting CSOs that may be perceived to be vocal in creating public awareness on matters of corruption.

8. Role of Civil Society Organizations in Public Procurement processes in Kenya CSOs in Kenya have always played an integral role in spearheading the war against corruption and injustices. Civic organizations, as instigators and promoters of civil society development, have a proven record of making communities in Kenya sensitive to such detrimental factors as corruption, organized crimes and economic sabotage emanating from procurement and disposal processes.

9. CSOs in Kenya have maintained public awareness by providing informed public debate on issues of corruption, and therefore play a major role in fighting corruption and organized crimes and produce a double impact by influencing both the public and authorities. • In Kenya, Civil Society umbrella organizations known for fighting corruption and holding the government accountable either directly or through their respective membership are: • Kenya National Union of Teachers (KNUT) • SUPKEM • Central Organization of Trade Unions (COTU) • Law Society of Kenya (LSK)

10. National Council of NGOs (NGO Council) • National Council of Churches in Kenya (NCCK) • Federation of Kenya Employers (FKE) • Kenya Private Sector Association (KEPSA)

11. Though, CSOs are not properly represented in the Boards of Public Procurement Oversight Authority and other related bodies established under the Public Procurement and Disposal Act, 2005, and the Public Procurement and Disposal Regulations, 2006, we have perfected our role as whistle blowers on irregular procurements and disposal of public assets. Civic organizations within CSO Sector monitor all public tenders from public entities from advertisement level to awarding stage to ensure integrity, fairness; transparency and accountability are observed as stipulated by the Act and regulation.

12. During the past seven years, we have exposed numerous procurement scandals. Notable procurement irregularities involving huge amount of public funds among others are: • Anglo Leasing; The scandal started when the Kenya government wanted to replace its passport printing system, in the year 2002. Sophisticated passport equipment system was sourced from France, while, forensic science laboratories for the police were sourced from Britain. The transaction was originally quoted at 6 million Euros from a French firm, but was awarded to a British firm, Anglo Leasing Finance, at 30 million Euros, which would have sub-contracted the same French firm to do the work. The tender was not publicly advertised, and its details were leaked to the Civil Society which finally made it known to the public through the media.

13. Irregular disposal of Hotel Grand Regency, currently known as Laico sold to some dubious libyan firm, Libyan African Arab Investment Company. The five star hotel, at the time of disposal was a public asset and therefore, ought to have been sold through public tender as stipulated by Public Procurement Act 2005. Libyan African Investment paid Kenya Shillings 2.5 billion, a figure reported by estate and property experts as lower than market prevailing rate.

14. The End Thank You