OctOber - December 2015 INteGrItY MAtterS 1€¦ · 2 INteGrItY MAtterS OctOber - December 2015 To...

OctOber - December 2015 INteGrItY MAtterS 1

2 INteGrItY MAtterS OctOber - December 2015

To register log on to www.kenyachamber.or.ke

Or call +254 20 240 2833/ 221 1494

Or SMS the word “KNCCI” to 21515

Become a member

The KNCCI Corporate Membership is a strategic partnership between your company and Kenya National Chamber of Commerce and Industry.

As a Corporate member your company will bene�t from the most sought after business prospects created through KNCCI’s engagement withlocal, international business leaders and corporates.

KNCCI Corporate Members are among the most prominent and respected companies in Kenya. They are stakeholders who take a leading role in the business community and strengthening private sector’s role ineconomic development.

The brand associations created through the Corporate membership add considerable weight to our lobbying activity and business has a more

powerful voice

[email protected]


Kenya remains an inter-esting country with a twist and turn to every on graft and cor-ruption especially those affect-ing the big bucks in govern-ment. Kenya managed to put out a strong bid with its euro Bond last year and raised $2 Billion after managing to attract

heavy investor confidence from Europe, Middle East and the Us.

Kenyans were excited that the money would be used for general budgetary purposes, including fund-ing of infrastructure projects and the repayment of the $600 million syndicated loan in 2011-2012; a welcome relief by the common man. But such large amounts of money in Kenya are never spent or accounted for without a circus. Only recently, the Ministry of Water and Irrigation came under fire for unaccounted Ksh.14 billion Eurobond monies, an equivalent of $ 135million. The usual suspects including stalled pro-jects, shoddy procurement processes and low quality produce came to the fore. investigation into the mat-ter is still underway!

A look at the corridors of the justice, and we bump into the CJ on his way out of office. As he breaks the news to Kenyans that he will retire one year ahead of his term he also speaks out on his fears for the coun-try ahead of the next elections. He says that he fears that the ‘drums of possible violence are being beat-en…’ ahead of the next general election. He also says corruption and incitement as the biggest threats to Kenyans ahead of the 2017 general elections. yet he is the CJ, and the country is looking up to him to reform our whole judicial and constitutional system but his bags are packed and he sounds like he is getting on the next flight to anywhere in the world. Oh, Kenya! Who will save us?

In light of what is happening in our country, our main scope brought out by Dr. Roman Zyla, Sen-ior Corporate Governance Officer, Corporate Gov-ernance IFC Environment, Social and Governance Department take a look at the link between govern-ance and development and why some countries con-tinue to struggle with meeting development goals.

The issues Dr. Roman brings out are affecting our even our businesses and Techno Brain CEO, Manoj Shanker and Mohammed Hersi, CEO of Voyager Hotels couldn’t agree more. They share their experi-ences in the elevator section. Other issues that have long haunted Kenya such as the land issue is dis-cussed by martin Oloo in the Law and ethics section. a look at the recent vetting of judges and magistrates in Kenya is brought out in an article by Ben Simiyu, while Dr. ruth aura LLB talks about the much prom-ised two-thirds gender bill that is yet to be fully imple-mented.

Lessons for Kenya are captured in the story on the Greek Crisis and in an article by the Caux round table on a new age for a more secure and fulfilling human prosperity. a look at the business side focuss-es on hospitality and human resource. The human resource aspect takes a look at how quickly humans are changing the work place both practically and eth-ically and what Hr managers and practitioners must do to adapt to the scenario. ruth ng’inja takes us through the hospitality sector highlighting the great opportunities we are ignoring as a country. in our news roundup we take a look at the recent nys graft saga, the lessons President Obama had Kenya, doping by Kenyan athletes and why a ticket from the traffic police will serve better than a bribe any day. We clean up the edition with an interview by Parapet CEO Alex nyaga.

As always, we enjoy putting out this magazine to you every quarter and we truly hope that our stories can inspire you to be the change that we need in this country.

We welcome your comments, inquiries, suggestions and requests for subscription to the magazine on email via the address [email protected] Jacky NyandejeCertified Ethics OfficerExecutive Director , Ethics & Integrity Institute

n PerSPecTIVe

[email protected] | www.ethicsandintegrity.org

To register log on to www.kenyachamber.or.ke

Or call +254 20 240 2833/ 221 1494

Or SMS the word “KNCCI” to 21515

Become a member

The KNCCI Corporate Membership is a strategic partnership between your company and Kenya National Chamber of Commerce and Industry.

As a Corporate member your company will bene�t from the most sought after business prospects created through KNCCI’s engagement withlocal, international business leaders and corporates.

KNCCI Corporate Members are among the most prominent and respected companies in Kenya. They are stakeholders who take a leading role in the business community and strengthening private sector’s role ineconomic development.

The brand associations created through the Corporate membership add considerable weight to our lobbying activity and business has a more

powerful voice

mailto:[email protected]

DisclaimerViews expressed in this publication do not necessarily reflect the views of the publisher. The entire content of this publication is protected by copyright laws. no part of this publication shall be reproduced in any form whatsoever without written consent from the publisher.

PUbLISHer

the ethics and Integrity Institute, coopers centre, Off Waiyaki Way,

Kaptagat rd. Loresho

P.O. bOX 5554-00200, Nairobi, Kenya

tel: +254 20-2173685, +254 202168189, +254 734 416396

e-mail: [email protected]

Website: www.ethicsandintegrity.org

GrAPHIc DeSIGN

Sepia Media, 4th Floor,

top plaza, Kindaruma road.

P.O. box 51660 - 00100, Nairobi, Kenya.

tel: 020 2177660 | 0715 471 343

email: [email protected]

Web: www.sepiamedia.co.ke

Chief Editor Jacky ng'ongo nyandeje

Editorial TeamDiana ObathLaura Okal

DesignDenet Odhiambo

Contributors Dr. ruth auraBen m. simiyusamson Oseromartin OlooJacky nyandejerose ngin'jaJulie Ogoyerobert mcGregorTunku AbulAziz Ibrahim

Board of DirectorsChairman - Prof. Paul Acholaexecutive Director - Jacky nyandejeSecretary - Polycarp NgojeJulie Ogoye emmah malindaeng. Ken aduda

ethicsandintegrity@[email protected]

Our Patners


42 Corporate Governance and developmentThe matrices surrounding the discussions around the development of a country remain constant but the answer to the development question is constantly changing. Dr. Roman Zyla, Senior Corporate Governance Officer at IFC discussed the correlation between good governance and development of states.

n IN THIS ISSUe

eLeVAtOr

28 Techno Brain:Data Driving Innovation Techno Brain is currently the leading technological innovation hub of the african continent. it has gained a great reputation for being a well-managed company and a pool of talent.

32 Biting the hand that feeds:mohammed Hersi shares the opportunities the hotel and tourism industry is staring at but refuses to take up and the challenges stifling the industry.

GAVeL SQUAre

16 Land holding is the case for minimum and maximum: is it feasible? A separate stand-alone bill is needed to consolidate the land laws and address the issues affecting the country.

22 Two-thirds gender rule – Is it a pipe dream? a right that is constitutionally guaranteed has remained elusive and more of a pipe dream yet to be enjoyed by the beneficiaries. Will Parliament take up its role to breathe life into this debate?

22 Just but one means to a much bigger end: individuals and institutions charged with the

responsibility of dispensing justice in Kenya must rise above narrow personal interests by cementing the place of integrity in legal practice.

SectOr IN FOcUS

56 HR managers must adapt to a changing world: as drivers of change in an ever changing world, Hr leaders should strive to push through policies that enhance equality and fair recruitment processes in the institution while ensuring they have the right skills and be brave enough to implement appropriate policies and strategies.

60 Ethics in the hospitality Industry

what ails the country's most promising sector and why the hospitality industry continues to fall short of its achievements..

NeWS IN reVIeW

6 Kenya’s well-earned reputation as an athletics powerhouse and global number one athletics station comes under sharp international focus; the tale of minor traffic offences, the Kenya police, the ticket and the bribe; What was CS Ann Waigiuru doing when she lost Ksh.791m and Kenya’s native some came calling and offered some useful tips on fighting graft.

ONe ON ONe

48 Parapet Cleaning Services: Who said cleaning was a blue collar job? Meet Alex Nyaga, the man who is not afraid to roll up his sleeves and get down and dirty. his 17 years in the business speak of nothing but excellence and distinction.

OPeN cOUrt

36 The Greek crisis and lessons for Kenya: The Greek crisis which is often also referred to as the Eurozone crisis is a perfect example of the impact of politics on economics and vice versa. The crisis continues to expose the weak links in the european Union. as Kenya follows in the footsteps of countries that have gone before it, what can it learn in the journey?

KNOWLeDGe ZONe

70 Introducing a new age for a more secure and fulfilling human prosperity: Humanity must choose between the relentless pursuit of growth for growth’s sake and, alternatively, a new era of stewardship and resilient balance. Unrelenting compound growth cannot be sustained without eventual consumption of our very planet.

MAINScOPeOctOber - DeceMber 2015


The recent World Ath-letics Championship in the Chinese capital of Beijing was the fin-est moment for Ken-

yan athletics. During the event, organized by

world athletics body IAAF, Kenya beat all comers to top the world, with an unassailable tally of med-als: seven gold, six silver and three bronze medals.

It was a first for Kenya, which swept aside a strong challenge from more developed athlet-ics powerhouses like the United States, Britain, China and Jamaica to run away with the crown. and for the first time, Kenya, which has always had very strong creden-tials as the home of long distance running, bagged gold medals in the most unlikely events: the men’s jave-lin throw and 400 meters hurdles, underlining its arrival as a complete athletics powerhouse and amplifying the depth of talent resident within its borders.

But while the country and africa exulted in this remarkable feat, the moment was sullied by reports that two Kenyan athletes had failed drug tests in Beijing and one would not be participating further in her event. Joyce Zakary and Koki manunga were slapped with partial suspen-sion by the IAAF for this, considered a gross offence by the world athletics governing body. Joyce, who had reg-istered a national record during the first round of her specialty, the 400 meters sprint, would not be lining up for the race’s semi-final, for which

she had qualified. Koki had failed to qualify for the next round from the preliminary races, but her name was by now caked in mud.

it was a damper for Kenya. The country’s well-earned reputation as an athletics powerhouse and glob-al number One was in tatters. and the international media, keen to put a dent on Kenya’s hard-to-believe achievement which had obvious-ly put the performance of their own countries in the shade, found a ready-made narrative to validate their doubts. it was the type of side-bar that takes the shine off your story.

But even as athletics Kenya moves to clean house, it is emerging that the role of certain rogue foreign agents who have signed on Kenyan athletes and are keen to extract world-beating performances out of them in order to feather their own nests, cannot be dismissed off-hand.

The counter-plot to this story is

the often-heard allegation that Ken-yan, and by extension African ath-letes are given an inordinate amount of attention, by the IAAF’s watchdog on such issues, the World Anti-Dop-ing Agency (WADA).

Such is WADA’s incessant demand for random tests on samples from these athletes that it almost borders on invasion of personal space and privacy. Tied to this, inevitably, are allegations of racism in the manage-ment of global sport, especially in the handling of anti-doping operations. With the confirmed cases against the two Kenyan athletes, WADA is like-ly to further move the needle on its surveillance of athletes from these shores.

also worth investigating are alle-gations against certain AK officials who receive bribes and draft athletes with dubious ethics into national teams, putting Kenya’s well-earned reputation at risk.

Doping by Kenyan athletes: what gives as graft claims fly?

n NeWS IN reVIeW


Minor traffic offences? Give me a ticket any day

anyone who has ever driven on Kenya’s roads will be aware of the sce-nario.

you are on the road. You are flagged down by a mean-looking traffic policeman (or wom-an). You have made a U-turn on the wrong part of the road. Or a call came and the caller iD meant you could not ignore it. it could just be the con-tract you made a killer pitch for two weeks ago. Whatever the motivation, the long and short of it is: you have committed a traffic offence. It is time to have a talk with the dreaded Ken-yan police.

The first thing the policeman will

do is to force himself into your car. never mind the fact that this is plain illegal. since you really are not into drama, you barely protest, even as you seethe below the surface.

By most accounts, a conversation will be had. The policeman, as if on some over-rehearsed cue, and as rea-sonably as possible, will present you with two scenarios. Have the charge formally recorded at the police sta-tion with all the attendant risks that this spawns: time, sometimes an entire day, wasted in court; being herded with “common criminals” into the dock; a blot on your char-acter by way of a “criminal” record and lastly, the specter of a whimsi-cal judge who could fix the resultant fine at a figure beyond your current net worth in cash. For good measure, if the policeman is in an expansive

mood, he would add that some judg-es are not exactly averse to putting you in the slammer for a few months to hasten your journey to reform and pass on a strong message to your ilk. The other alternative is to talk “nice-ly” to the cop and off you go into the Nairobi traffic until your next com-mission within a policeman’s nor-mally elastic “line of sight.”

many Kenyans go for the second option, if only to escape the incon-veniences of the first one, which ide-ally, should be the proper thing to do.

During a recent surprise visit to the Kibera Law Courts, Chief Jus-tice Willy Mutunga confirmed what many have known all along: that the Traffic Section was teeming with pal-pable corruption: bribery, case over-load, delays in court rulings and par-allel receipting for fines. The result: public resentment and revenue hem-orrhage for the Government.

This is due to a Traffic Act that lists traffic offences and a minimum charge for each but shies away when it comes to providing a fixed or statu-tory fine, giving too much discretion to the judge, fuelling uncertainly and perceptions of unfairness.

Organizations like the National Transport Safety Authority (NTSA) and the Judiciary are calling for fixed fines on the spot, like happens in oth-er jurisdictions. a ticket is issued to the offender, who is then expected to appear in court and pay the fine on conviction. such a system not only takes out judge’s discretion. it dis-incentivizes bribe paying and spawns better revenue assurance for Govern-ment, besides being convenient and efficient for all parties involved.

Police officers flag down an oncoming vehicle during a random police check on one of Kenya's major highways.


n NeWS IN reVIeW

State graft fight on the dock as CS admits loss of Sh791 million

On Friday, September 11, 2015, Devolution Cab-inet secretary anne Waiguru held a rare press conference.

The CS, considered by many to be the most powerful figure in Ken-ya outside the Presidency, used the opportunity to reveal that the nation-al Youth Service (NYS) had lost a staggering sh791million through fraud. she proceeded to issue a list of a dozen officials whose prosecution she recommended.

The nys is a well-oiled vehicle for the regime’s youth empowerment agenda and has been involved in a slew of high-profile projects in infor-mal settlements and other parts of Kenya.

From an optical level, it looked like the Cs was doing a clean whis-tle-blowing job on a graft case that has been simmering below the sur-face for some time.

The NYS Affair was brought to public attention by Opposition lead-er Raila Odinga, who early this year alleged its commission and went on to claim that the presiding Cs’s name had been expunged from President Uhuru Kenyatta’s so-called List of shame. The list has been held aloft as a poster for the Government’s anti-graft drive.

Then, the Government side dis-missed the allegations, describing it as the “fraud that never was.” ms Waiguru herself weighed in that no money had been lost. so the latest message by the Cs was a startling change of tune.

Besides the change in semantics, Waiguru’s unique “coming out” also presents a number of contradictory posers.

apart from the veracity of the alle-gations against the Cs by the Oppo-sition leader, a matter that could end up in court after the former’s lawyer wrote demanding an apology from Hon Odinga, failure to which she will sue; there is the issue of wheth-er the Cs was right person to release the probe report.

What is in the public domain is that the investigations were done by the Directorate of Criminal investi-gations (DCI). Ideally, it is this unit or any of the anti-graft agencies like the ethics and anti-Corruption Commission (EACC) that should have announced the results of the probe to a public audience and rec-ommended the prosecution of the named officials. It would be reason-able to assume that during such an investigation, even the CS would be in the cross-hairs of the investigators given her role as the political leader of the unit and one of its most vocal defenders.

What the CS’s action does, wheth-

er intended or not, is that it puts into doubt the very independence, and by extension, integrity of the investi-gations done by the DCi on the nys Affair.

On another level, what could purely have been a strategic commu-nication fail now runs the risk of pre-senting the Government’s entire anti-graft campaign with potentially its biggest reputational risk. Of course the other poser is whether the Cs should step aside to allow for further investigations, especially now that the act of graft has been “confirmed” by none other than herself. it is a fair question. Some of Waiguru’s peers in the List of shame were forced out on mere allegations, and some have since been vindicated.

Devolution CS Ann Waiguru addresses the members of the press in her office in Nairobi


ObAMA’S ON cOrrUPtION IN KeNYA“Even the president is fighting corruption.

But in my view, he’s not been able to do it because even the senior people in

the government, those friends of the president, are involved in corruption.”US President Barrack Obama during his

state visit to Kenya.

cOrrUPtION IN tHe cOUrtS“The time has come for the country

to start a debate on whether the Supreme Court is desirable. Through a constitutional amendment, the role of the Supreme Court may be performed by the judges of the Court of Appeal or by an ad hoc Supreme Court. Such an amendment will benefit the country

in cutting down on unnecessary expenditure.”

The Law society of Kenya in a statement seeking removal of three Supreme Court

judges

Let MP’S be cHecKeD“That the Bill seeks to penalize

the media is itself inconsistent with the Constitution; Let us live by

this progressive Constitution, of accountable leadership where we open ourselves to scrutiny by the people of

Kenya.”Majority Leader Aden Duale on changes

to the Parliamentary Powers and Privileges Bill in Kenya

PreSIDeNt KeNYAttA ON

AFrIcAN JOUrNALISMThis time, with your help, Africa

can represent itself aright. You who stand with us here can honour the

struggles and heroes of the African past by looking carefully, and speaking

truthfully, about our continent — by giving us accurate maps of African

reality… we celebrate these men and women, and all of you who uphold the highest standards of your profession. When those high standards are the

norm, we will reclaim the African narrative.

H.E. President Uhuru Kenyatta during the CNN MultiChoice African Journalist

Awards 2015

QUOTES

Native son comes calling, offers useful tips on fighting graft

it was the first visit to Kenya by a serving head of state of the United states.

But Barack Hussein Oba-ma’s trip to Kenya between July

24 and 26 was historic on many oth-er fronts. For starters, it was the first time the President, who described himself as the first “Kenyan-Ameri-can” President of the world’s super-power, was visiting his fatherland as President. His last visit saw a civil servant derisively refer to him as a “junior senator from illinois.”

entrepreneurship was the overrid-ing theme of the visit, headlined by President Obama’s co-hosting of the Global Entrepreneurship (GES) with President Kenyatta. The conference, one of Obama’s signature programs, aims at promoting entrepreneurship, especially in Africa, with a special focus on the youth and women. and true to form, by the time the three-day conference was over, a number of Kenyan entrepreneurs and their counterparts from the rest of africa had been hooked up with owners of capital, who were in Gigiri to listen to pitches and ferret out the most bank-able ones.

apart from the expected dollar inflows into the local economy, Oba-ma’s first visit to his father’s land will also be remembered for his strident rhetoric on corruption. But it would appear that on this most intractable of topics, two Obamas came to Ken-ya: the apologist and the critic.

in a gesture that caught many pundits by surprise, President Oba-ma, in his formal contacts with offi-cialdom, actually lauded the efforts of the Government of Kenya in tack-ling the “cancer of corruption” but noted that more needed to be done.

He called for a change in “habits and culture”, as a way of fixing the prob-lem, saying that the fight against cor-ruption was everyone’s and not just the Government’s business.

But it was a different, preachy, clearly unguarded Obama in attend-ance a day later when he addressed a town hall-type meeting at Kasarani’s Indoor Gymnasium. The meeting, at which he seemed to have dispensed with official protocol to have his sis-ter Auma Obama introduce him, was attended by an audience carefully picked by the Us embassy in nai-robi that included leaders of several sections of Kenyan society: students, legislators, clergy, civil society, youth and women.

“There is no country that is com-pletely free from corruption. The fact is, too often here in Kenya, corrup-tion is tolerated because that is how it has always been done. Fighting corruption is not just about chang-ing laws. Ordinary people have to stand up and say enough is enough. Corruption continues to deny many Kenyans jobs. every shilling paid as a bribe could be paid to someone who is doing an honest day’s work,” he said. He even went ahead to com-pare the opportunities available to a child born in Western Kenya with one born in Central Kenya.

The apparent “carrot and stick” approach baffled many commenta-tors. Perhaps Obama believes that it no longer helps to be sanctimonious when talking graft to african govern-ments. not when corporate america is a major theatre for the vice. That perhaps it is time to constructively engage government, while actively supporting non-state actors like civil society and the younger generation.


IN THE NEWS


n LIGHT TOUcH

QUOTES

In 1982, In Singapore, LOKPAL BILL was implemented and 142 corrupt ministers and officers were arrested in one single day. Today Singapore has only 1% poor people and no taxes are paid by the people to the government, 92 % literacy rate, better medical facilities, cheaper prices, 90% money is white and only 1% unemployment exists.Andrew P. Napolitano, Lies the Government Told You: Myth, Power, and Deception in American History

“Have you ever found yourself saying, "There ought to be a law against this," or, "Somebody should do something"? Well, here’s the good news - you can be the one to do something. You can be the one to make the law.”Victoria Stoklasa MA

By making the government a combination of elected officials and citizen-backed initiatives and referenda, there can truly be a government of the people, by the people, and for the people.”Victoria Stoklasa, Sign It Into Law: How to Put Your Petition on the Ballot

“Every revolution was first a thought in one man's mind, and when the same thought occurs to another man, it is the key to that era.”Ralph Waldo Emerson

“...they say if you don’t vote, you get the government you deserve, and if you do, you never get the results

you expected.”E.A. Bucchianeri, Brushstrokes of a Gadfly


INdIvIdual MeMbershIp of Caux rouNdtable- KeNyaN Chapter

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The Ethics and Integrity Institute invites you to register for the international membership forum of Caux Roundtable Kenyan chapter. The Caux Roundtable Kenyan Chapter (CRTK) is part of the fourteen chapters all over the world headquartered in Minneapolis, USA. The Ethics and Integrity Institute is promoting CRT mem-bership as a requisite forum to inform and educate and advocate for ethical conduct.Please read the framework attached for a detailed insight on Caux Round Table.

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�e Caux Round Table (CRT) is an international network of experienced business leaders whose mission is to put moral capitalism to work by ensuring that business contributes to greater prosperity, sustainability and fairness. �e Caux Round Table’s “Principles of Business” provide a wide range vision for ethical and responsible corporate behavior. In fact the CRT principles for responsible business were the foundation for other principles including the UN Global Compact. Concerned about escalating trade tensions perhaps similar to what we are experiencing today as a result of the global �nancial crisis and our local political dilemmas, Frederik Philips, former President of Philips Electronics, and Olivier Giscard d'Estaing, Vice Chairman of INSEAD founded the CAUX Round Table in 1986. At the urging of Ryuzaburo Kaku, Chairman of Canon Inc. the Round Table has focused attention on the importance of global corporate responsibility in reducing social and economic threats to world peace and stability.

Caux Round Table has 14 chapters in 14 countries, with it Headquatter in Minneapolis and the Kenyan Chapter being the only African Chapter. Others are: USA, Europe, Malaysia, Mexico, Germany, �ailand, Poland, Canada, Croatia, Russia, China, Serbia and Romania.

�e CAUX Round Table believes that the world business community should play an important role in improving economic and social conditions through sustainable social responsibility initiatives. It seeks to begin a process that identi�es shared values, reconciles di�ering values, and thereby develops a shared perspective on business behaviour acceptable to and honored by all. �ese principles are rooted in two basic ethical ideals: 'kyosei' and human dignity. �e Japanese concept of ‘kyosei’ means living and working together for the common good enabling cooperation and mutual prosperity to coexist with healthy and fair competition.

Public awareness is rising. �ere is higher competition and more demand for value and accountability hence the need to address the declining ethics phenomenon in institutions.

Join Caux Roundtable and support the course for moral capitalism

First Nairobi ethics CAUX round table forum on 18th – 19th August 2014 in Serena Hotel, Nairobi

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KING SOLOMON, REPUTED to be one of the wisest men that has ever lived on this earth said and did many great things.

At one time in his adventurous life, the King of israel once remarked as follows: “…a wise per-son will understand what to do. But a foolish per-son is dishonest… Fools don’t care if they sin, but honest people work at being right…” (Proverbs 14:8-9) (Extracted from The Devotional Bible, New Century Version, Page 769).

The wise King of israel was rooting for integ-rity in the conduct of the affairs of men and women. Integrity is a much desired virtue, for without it, the repercussions of our actions are often negative. if there is one place that integri-ty is most relevant, then it is within the judicial system of any country. The Judiciary dispens-es justice, whose best form ought to emanate from a process of integrity.

An Overview of the Vetting Process in KenyaOn March 22, 2011, the Vetting of Judges and Magistrates Act, Chapter 8 of the Laws of Kenya came into operation. The preamble to the act provides that it is an Act of Parliament to pro-vide for the vetting of judges and magistrates, pursuant to section 23 of the sixth schedule to the Constitution of Kenya. section 6 of the act established an independent body known as the Judges and Magistrates Vetting Board (JMVB). The main function of this Board is stated under Section 13 of the Act. In very brief terms, the function of the Board was to vet judges and magistrates, but in accordance with the Con-stitution as well as the Act of Parliament under which the Board was established.

After being sworn in, the JMVB, according to its first report of March 30, 2012, immedi-ately commenced the herculean task of vetting

58 judges of the High Court as well as Court of Appeal, as well as 352 magistrates. The Regis-trar of the High Court and Chief Court admin-istrator were also to be vetted. among the parameters used in the process by the JMVB included questionnaires, wealth declaration forms, formal complaints, response to com-plaints, transcripts of interviews in some cas-es and any material available on the past work record of the judge, including rulings and judg-ments delivered. This is in accordance with the Board’s first report as published on March 30, 2012. As is expected of any process, the JMVB went through some turbulence, but nonethe-less was able to discharge its mandate by pub-lishing several determinations.

The process of vetting judges and magis-trates was a significant milestone in the jour-ney that Kenya, as a country, continues to travel. several reasons lend credence to this statement. Firstly, the Judiciary is one of the arms of the Government, and a very important one as such. Secondly, faith in the Judiciary has been on a decline for a considerable period of time.

The post-election violence of 2007 and 2008 was contributed to partly by the lack of faith in the Judiciary. This is after the Orange Demo-cratic Movement (ODM), one of Kenya’s strong-est political parties, declined to take its dispute for judicial determination against a declara-tion by the now defunct electoral Commission of Kenya (ECK) that Mwai Kibaki had won the then presidential election.

ODm argued that the Judiciary was not an impartial and independent arbiter that could be trusted to oversee a case of such huge rami-fications. Thirdly, earlier attempts to clean the Judiciary through what came to be known as radical surgery have always been deemed unsatisfactory. Last but not least, the need to

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Just but one Means to a Much Bigger Endn LAW AND eTHIcS

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Lessons for Kenya's Ethnic Conflict from the Xenophohic Attacks in South Africa


test applicability as well as practi-cality of significant clauses in the new Constitution of Kenya that was promulgated in august 2010. Of par-ticular significance are the provisions of articles 10 and 159. Under article 10, among the binding national val-ues as well as principles included are social justice, integrity, transparency and accountability.

On the other hand, Article 159 out-lines the three main guiding princi-ples of justice. They are; justice to be done to all irrespective of status; it should be administered without delay and undue technicalities ought not to be entertained.

Significance of justiceThe vetting process culminated in a number of judicial officers being sent home on account of unsuitability to serve. some of the reasons given by the Board included bribery, poor rul-ings and or judgements, unaccount-ed for wealth, failure and or delay in writing rulings and judgments, among others. Full determinations are to be found on JMVB’s website, (i.e. www.jmvb.or.ke). If the outcome of the vetting process is anything to go by, then there is every reason to be afraid by all. Litigants troop to courts

of law to seek justice. The conse-quences of not getting justice, either because it is non-existent or is com-promised are too grave to contemplate.

As the old adage goes, justice must not only be done, but it must be seen to be done. Loss of faith in our judi-cial system can lead to loss of lives and property as happened during the painful post-election violence in Kenya alluded to above. When peo-ple cannot get justice in our courts, the alternative is what is popular-ly known as law of the jungle. This essentially entails a breakdown in law and order. Under such a regime, crime, corruption and other social ills will flourish. A system that can-not guarantee protection of property; be it private or public, will not attract any significant investment – wheth-er domestic or foreign. economic decline will follow.

A functional judicial system, on the other hand, has very many advantages. One, it provides a strong bulwark against the excesses of the other two main arms of Government, i.e. the executive fiats as well as par-liamentary dictatorship. This creates a desirable balance of power that is very necessary in stabilizing a devel-oping country such as Kenya.

Confidence in the Judiciary almost always guarantees the rule of

law. This in turn reduces social ills such as crime and corruption. invari-ably, investments will flow in from every conceivable quarter, thus rais-ing a country’s economic profile.

Beyond the vetting processTherefore, it follows that the men and women bestowed with the responsi-bility of overseeing our judicial sys-tem have a big and or significant task. Through the process of vetting, indi-vidual integrity is assessed with the ultimate aim of ensuring one’s suita-bility for public employment in such offices as those of judges and magis-trates. Persons with dubious integrity are excluded from public service and thereby strengthening the legitimacy of the institutions. Ultimately, the use of vetting as a mechanism of institu-tional reform in Kenya has addressed the question of governance deficits within the Judiciary. In addition, vetting is expected to transform the Judiciary so as to raise public confi-dence and trust in the same. Hope-fully, the capacity to dispense justice as well as protect human rights will

The Judiciary building in Nairobi, Kenya

Justice mustnot only be done, but it must be seento be done. When peoplecannot get justice in the courts,the alternative soon becomes the law of the jungle.

http://www.jmvb.or.ke


be more enhanced.Vetting of judges and magistrates

is not, and cannot be an end in itself. Instead, it needs to be part of a much broader reform of the institution so as to maximize the impact of the pro-cess and make it sustainable. While appreciating the process of vetting of judges and magistrates as a con-tributory factor in the attainment of justice, other measures must be seri-ously considered as well. After all, the process of vetting can at times be painfully slow, laborious and expen-sive.

To begin with, reform of the Judi-ciary as propounded by the report of the Task Force on Judicial reforms is key. another aspect that ought to be keenly followed is the exploitation of new safeguards as well as protections for the Judiciary, which are enunci-ated in the new Constitution of Ken-ya, 2010. The provisions of Articles 10 and 159 will always remain relevant. In these articles, questions of integ-rity as well as judicial independence are addressed respectively. Effective utilization of these provisions will help greatly in buttressing the Judici-ary against any negative sentiments that might lead it to underperform.

At best, vetting of judges and mag-istrates could be an occasional event in the Judiciary. On the other hand, appointments to the Judiciary will always continue to take place. This is in terms of replacing retired officers, the deceased, terminally ill or even just carrying out a recruitment to strengthen the department. One way of ensuring that the integrity of the Judiciary is guaranteed is by having a credible process of appointment of the serving officers. If recruited transparently, fairly and without cor-ruption, judicial officers will gener-ally tend to command more respect and confidence. Appointment of judges and magistrates must there-fore be insulated against all man-ner of threats and dangers in order to retain credibility in the Judiciary. Personal, corrupt and other negative vested interests in the appointment of judicial officers must be kept at bay. Only qualified and committed officers should be given an opportu-nity to serve Kenya in a significant portfolio such as the Judiciary.

another avenue through which the process of vetting of judicial officers can be complimented is by respecting the doctrine of separation

of powers. in a functional democ-racy, there are normally three main arms of Government. The Judiciary is one of them. The other two are the Executive and Parliamentrespec-tively. each arm has a distinct and significant role to play. While Par-liament makes laws, the Executive implements policy emanating from the legal framework created by Par-liament. Last but not least, the Judi-ciary interprets the laws formulated by Parliament. Under the doctrine of separation of powers, all the three arms of Government are important. none ought to consider itself as more superior to the other. Their roles are complimentary or horizontal, and not vertical.

However, in some weak democ-racies, especially, those in develop-ing countries such as Kenya, the bal-ance of power is often skewed. in such places, the Executive will more often than note wield more power than the other two arms. This leads to interference by the executive wing of Government in the affairs of the other arms. executive interference in the work of the Judiciary is one of the most dangerous threats to the hallowed concept of justice. Justice will terribly suffer when the Judici-ary has to pander to the dictates of the Executive. In the same vein, par-liamentary dictatorship also poses a threat to judicial independence at all times. For the judicial arm to thrive, and thereby serve justice fairly, there should be mutual respect among the three arms of Government.

The ethics and anti-corruption framework in Kenya must perform above average. This will act as a deter-rent measure to any judicial officer who may be tempted to sway away from the role of dispensing justice. The media must continue highlight-ing ills within the judicial system as a means of discouraging the same. in the same breath, religious organiza-tions must be in the forefront of talk-ing against injustice. Hopefully, right teachings from respected religious

A 5 man jury follows proceedings in the court during a hearing.


groups and their leaders can help in minimizing bad behaviour in among other places, our Judiciary.

All factors remaining constant, there is one critical measure that ought to exist if justice is to be served well by the Judiciary – personal integrity of the judges and magis-trates, as well as the other judicial officers working with them. If this cannot be attained, then all the oth-er measures highlighted above will be meaningless. The job of a judge or magistrate should be viewed as a calling. One ought to take up the roles only if they are convicted about the same. Becoming a judge should not be viewed as just a matter of prestige, or getting the job to earn a good income or going for it for lack of a better alternative. Rather, it is a serious commitment to serve and dispense one of the most cherished commodities – justice - to human-ity. anything short of this is bound to result in a miscarriage of justice.

Therefore, as efforts are made through appropriate external struc-tures to ensure that there is in place a competent, qualified and fully sup-ported Judiciary, individuals serving in the institution must exhibit the highest standards of integrity. it is safe to state that a considerable num-ber of credible judicial officers are likely to result in better justice being served than all the other measures combined!

Nevertheless, the integrity of judi-cial officers cannot work in isolation. all those who interact with judg-es and magistrates should be held accountable as well. Key among this group are members of the bar. Law-yers and the litigants they represent must also conduct themselves with high integrity in the course of seek-ing justice.

Political will, especially by the Government in power is a prerequi-site to the attainment of justice in our courts of law. In the recent past, the Jubilee Government has been in the media limelight, accused of among

other ills, not doing enough to com-bat runaway corruption. as long as this perception persists, other sectors will find it difficult to shake off this vice. When the top political class and hence leadership of the nation are viewed as not doing much to water the seed of integrity, institutions below will lack sufficient guidance and push to address this problem. The judicial arm is no exception.

Conclusioninjustice is bad and hence not an option to any civilized society. This undesirable state of affairs must be frowned upon. all individuals and institutions charged with the respon-sibility of dispensing justice in Ken-ya must rise above narrow personal interests by cementing the place of integrity. Efforts geared towards this must be supported, not just through vetting, but all available means and mechanisms. After all, a just society is much safer, as well as economical-ly and politically stable.

becoming a judge should not be viewed as just a matter of prestige, or earning a good income. rather, it is a serious commitment to serve and dispense one of the most cherished commodities to humanity.


n LAW AND eTHIcS

The Constitution of Ken-ya 2010 ushered in new democratic values and changes that embody industry, participation

and gender equality among others, making it progressive.

Despite this, implementation of some of its provisions present chal-lenges. For example, the principle of the two-thirds gender rule under Article 27(8) has been difficult to embrace within the political realm, particularly the national assembly and the senate.

in a bid to address this challenge during the 2013 general elections,

the attorney General in December 2012 sought advisory opinion of the supreme Court to interpret the prin-ciple, in line with Article 163(6) of the Constitution. The majority decision by the supreme Court of Kenya held that the principle under Article 81(b) of the Constitution of Kenya 2010 which provides for two-thirds gender representation shall be realised pro-gressively.

The Chief Justice Dr. Willy Mutun-ga in his dissenting opinion, however, indicated that the Constitution being wholesome in its provisions required no timelines in its enforcement. in qualifying his argument, the Chief Justice pointed that the political par-ties would be an integral part of the electoral system and their party lists must ensure that they comply with the ⅔rd rule. Nevertheless, the major-

ity decision required Parliament to develop legislative and policy frame-works that would ensure the imple-mentation of the two-thirds gender rule by the 27th of August, 2015. This decision postponed the problem to the 2013 elections, but is seen to have created the stalemate that is seen today in Kenya.

Two years down the line, Parlia-ment remains non-committal on implementing the supreme Court’s decision. To jump start the process of operationalizing the Supreme Court’s decision, the Attorney Gen-eral in February 2014 set up a Tech-nical Working Group (TWG) to iden-tify and advise the Government on a suitable formula for the realization of the two thirds gender principle. The working group comprised the National Gender and Equality Com-mission (NGEC) - convenor, Inde-pendent electoral and Boundaries Commission (IEBC), Commission on the implementation of the Constitu-tion (CIC), Registrar of Political Par-ties, Commission of Administrative Justice, the Ministry of Devolution and Planning (as the ministry respon-sible for gender), National Assembly and Senate Legal Committees, Kenya Women Parliamentary Association (KEWOPA) and Federation of Wom-en Lawyers (FIDA)-Kenya represent-ing Civil Society. The TWG engaged various stakeholders in discussions that eventually resulted into various formulae.

amongst the proposed formu-lae, the TWG anticipated the use of party lists as an eminent opportunity

THE TWO-THIRDS GENDER RULE – IS IT A PIPE DREAM?

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Kenya's Supreme Court judges file into the chamber during the opening of the 11th Parliament in the capital Nairobi April 16, 2013.


to realize the two-thirds gender rule. One of the recommendations envis-aged is the formula that worked for the County assemblies. This entails the lifting of the provisions of arti-cle 177(b) and (c) to Articles 97 and 98 of the Constitution of Kenya relat-ing to national assembly and sen-ate respectively. Many people, par-ticularly men, have argued that the prospective formula is expensive to implement and would subsequent-ly increase the country’s wage bill. However, research undertaken by the Institute of Economic Affairs and the National Women Steering Committee disapproves of this argu-ment and reveals that the annual per capita cost of implementing the two thirds requirement is affordable and realisable. Other proposals made by the TWG include:

“...doubling the 47 Women Coun-ty Seats in the National Assembly; adopting proportional representa-tion; tripling the 47 Women Coun-ty Seats in the National Assembly; voting for a party ticket (twinning); gender quotas for party strongholds; rotational seats for affirmative action; reconfiguration of constituencies; and the best runner up formula.”

Whereas these formulae were proposed upon various consulta-tions, it was hoped that the State, through the national assembly would have established and or devel-oped legislation or other mecha-nisms to implement the two-thirds gender rule within the timelines stipulated. The Parliamentary Justice and Legal Affairs Committee in April 2015 attempted to bring a Constitu-tional (Amendment) Bill that rooted for several piecemeal amendments, but vouched for the progressive real-ization of the two thirds principle, among others. This Bill sparked pro-tests from the public, including the women’s movements. Subsequently, a meeting was convened by Justice and Legal Affairs Committee with the TWG in May, to find a middle ground solution and continue with the dialogue on the issues. The sug-gestion from the TWG was that the

words ‘progressive realisation’ be removed from the amendments to ensure the full implementation of the Supreme Court decision. While parties were engrained in discus-sions, time was passing and the fear of women losing out was eminent.

To avert the confusion, a petition was filed by CREAW against the attorney General and the CiC to can-vass the contentious issues. The deci-sion delivered by the Court on the 26th day of June 2015 recognised vari-ous efforts undertaken during the year 2014 which ought to have culmi-nated in legislation for presentation to Parliament for consideration. The court advised the national assem-bly to extend its timeline by invoking Article 261(2) in case it finds it chal-lenging to enact legislation before the timeline set by the supreme Court. Justice mumbi ngugi compelled the attorney General and the nation-al assembly to prepare the relevant Bill(s) for tabling before Parliament for purposes of implementation of Articles 27(8) and 81(b) of the Con-stitution as read with article 100 and the supreme Court advisory Opin-ion within 40 days of her judgement. This decision served as a wakeup call for parliament to hasten the pace of deliberations of this principle.

even as the Court handed down a favourable judgement, there were ongoing advocacy activities that tar-geted parliamentarians as well as the Executive. The TWG, for instance, had candid discussions with his Excellency the President of the Republic, Hon. Uhuru Kenyatta to seek his intervention given his com-mitment to the women’s cause in Kenya. The impact of the advocacy and the Court’s decision is the cul-mination of the three parallel Bills in Parliament. One such Bill is the Constitution of Kenya (Amendment) Bill no. 4 of 2015 tabled by the major-ity leader aden Duale and famously known as the ‘Duale Bill’ sponsored by government; the Constitution of Kenya (Amendment) Bill No. 50 of 2015 famously referred to as the ‘Chepkonga’ Bill; and the Two-third Gender Rule Laws (Amendment) Bill no. 20 of 2015 both tabled by Chair of the Legal and Justice Affairs Com-mittee sponsored by samuel Chep-konga.

The ‘Duale’ Bill is seeking to amend article 97 of the Constitution of Kenya to provide, among other provisions, that the National Assem-bly would consist of two hundred and ninety members, each elected by the registered voters of single mem-ber constituencies; forty-seven wom-en, each elected by the registered voters of the counties, each county constituting a single member con-stituency; as well as twelve members nominated by parliamentary politi-cal parties to represent special inter-ests groups including the youth, per-sons with disabilities and workers. in essence, the ‘Duale’ Bill seeks to put right the position that the Constitu-tion is unequivocal in requiring the application of the two-thirds gender principle in elective and appointed offices. Further, it seeks to give effect to the one-third gender principle through the creation of special seats by introducing new clauses (1A), (IB) in articles 97 and 98 to guarantee that the gender principle is realised in Parliament for a period of twenty years from the next general election.

Security is a fundamental right as in its absence there is a threat to the enjoyment of other rights


The Chepkonga Bill is seeking to introduce the words “progres-sive implementation of legislation to ensure that” at the beginning of paragraph (b) of Article 81 of the Constitution, effectively altering the whole purport of the Consti-tution. This is despite proposals by the Technical Working Group (TWG) compounded from vari-ous stakeholders’ views and which resulted into the Two-Third Gen-der Rule Laws (Amendment) Bill, 2015 legislative proposal which is before Parliament. This is indeed a drawback especially considering that the ‘Duale’ Bill envisages a situ-ation where all genders will have a level playing field and will be able to compete on equal planes.

Proposed amendments & benefits The ‘Two-Thirds’ Bill was published on Thursday April 30, 2015 to amend several Acts of Parliament to imple-ment the ⅔rd gender principle pro-gressively. It seeks to give effect to article 100 of the Constitution on the promotion of representation of marginalised groups which includes women, youth, and persons with dis-abilities, ethnic minorities and mar-ginalized communities in elective and appointive positions. From the onset, it is clear that the Bill seeks to postpone the implementation of two-thirds constitutional Principle in elective positions.

The functions of the national Gender and Equality Commission (NGEC) are also sought to be amend-ed to include the role of overseeing the preparation and implementation of measures necessary to give effect to article 100 of the Constitution. some of the methods included are monitoring the framework for the promotion of representation of the special interest groups in Parliament, county assemblies and other elective positions as well as compliance with the electoral Code of Conduct. it also seeks to empower nGeC in liaison with other public bodies to ensure development of measures that pro-

mote the progressive realisation of representation of special interest groups in public bodies. it proposes to achieve this by developing pro-grammes that enhance the under-standing and attitudes of communi-ties to accept equal capabilities and participation of the special interest groups; and ensuring annual report-ing mechanisms of the Public bodies on their plans and measures in com-pliance. Besides these amendments there is need to also ensure that the murky environment of politics is reg-ulated during campaigns, political debates and rallies to ensure that only issue-based objectives are addressed by politicians. maintenance of such a tranquil and conducive environment will help women especially to engage in politics where candidates do not engage in dirty fights aimed at soil-ing names. Women are known not to involve themselves in politics for fear of having their families’ names and reputation tainted. Perhaps it is time that the nature of political engage-ment is controlled so that only candi-dates with better agendas are elected by the people.

Further, the Two-Third Bill amends the provisions of the Political Parties Act No. 11 of 2011 which focus-es on the special interest group. The

changes sought to be introduced is to increase the powers of the reg-istrar of Political parties to dereg-ister Political Parties which do not comply with the requisite ration of political representation of the spe-cial interests group as stipulated by the Constitution. This formula would prove adequate as the TWG had envisaged that it would be easy to achieve the two-thirds gen-der rule by ensuring that the polit-ical parties are made to comply by submitting lists of candidates that meet the threshold provided by the Constitution. To ensure support of Political

Parties, the Two-Third Bill seeks to ensure that the political parties that do not have representation of the special interest groups will not get the funds as established under sec-tion 23 of the Political Parties Act. In addition to this, parties have to ensure that while providing the reg-istrar with their annual audit of funds, amounts expended have to be categorised to show exactly how much was allocated to members of the special interest group.

Further, to ensure equality in the selection committee established by the President upon a vacancy exist-ing in the office of the political reg-istrar, the cabinet secretary respon-sible for gender affairs is required to nominate one person from the spe-cial interest group.

Additionally, section 49 of the Political Parties Act prescribes that the Registrar of Political Parties may make regulations on the procedure for nomination of a candidate for a party list by use of delegates system at the branch level for county assem-blies and national Delegates confer-ence for national assembly and sen-ate. This provision creates another avenue to ensure the two-thirds gen-der rule is achieved by imposing a duty on the registrar of political par-ties to set up mechanisms with a for-mula to guarantee party compliance. In the same vein, parties are required to develop and implement measures for the ‘progressive realisation’ of rep-

Hon. Aden Duale adressing media during a press statement


resentation and meaningful partici-pation of the special interest groups in decision-making positions and to implement the affirmative action programmes, policies and strategies contemplated under Article 27(6) of the Constitution. This is in the same vein as the position of the registrar, except it falls squarely in the realm of political parties. The challenge with this provision is that there are no mechanisms provided to ensure that political parties will actually comply and do so within the period before the next general election as no limi-tation is imposed and neither is there any penalty for failure to undertake this mechanism.

The periods within which par-ties are to conduct nominations and submit party lists have also been increased as provided by the elec-tions act no. 24 of 2011. it is believed that the aim is to ensure that there is time for the bodies involved in the election, including the Independent

electoral and Boundaries Commis-sion (IEBC) of Kenya to confirm com-pliance with the law on representa-tion. Just like NGEC and the Political Registrar, the IEBC shall also have the power to establish legislation that aims at ensuring: the full realiza-tion of the right to equality and free-dom from discrimination, including affirmative action programmes and policies designed to redress any dis-advantage suffered by individuals or groups because of past discrimina-tion as well as the principle that not more than two-thirds of members of elective public bodies shall be of the same gender.

Persons with disabilities (PWDs), especially those who are hearing and sight impaired have the advantage of having information to be published by the ieBC converted in a form that is accessible to them; this is provided for under section 27 of the ieBC act No. 9 of 2011. PWDs stand to benefit once section 7 of the County Govern-ment act 2012 is amended to include at least five percent of men and five percent of women with disabilities elected as members of the County assembly under article 177 of the Constitution.

In summary, the amendments in the two-thirds Bill are good, but the use of the words ‘progressive realisa-tion’ negates the enjoyments of the rights guaranteed. The words reflect the society’s reluctance to have wom-en enjoy their rights despite the Constitutional guarantee and mir-rors patriarchal values. In essence, the words ‘progressive realisation’ should be left out if any meaningful realisation of women’s rights to polit-ical participation is to be achieved.

The analysis on the Two-Third Gender Laws (Amendment Bill) 2015 is an attempt to develop mecha-nisms for the implementation of gen-der quotas from the county assem-bly level to the national assembly and senate levels. The intention is to have the elections take place first; thereafter the number of each gen-der elected to parliament shall be crowned by an additional number

of members of the assemblies to ensure the balance is reached. ideal-ly, this proposal encourages women to contest and that those who would in the first instance be unfortunate not to be elected will be prioritised during nominations. Opponents to this formula often cite costs as a rea-son to fail to implement it. However, research by the institute of econom-ic Affairs, in partnership with the National Women’s Steering Commit-tee indicates that implementation of the two-third gender principle is ten-able without the exaggerated budget implications.

While the Two Third Gender Laws (Amendment Bill) 2015 is a step in the right direction, the Constitution of Kenya (Amendment) Bill No. 50 of 2015 - Chepkonga Bill seeks to thwart all stakeholder efforts to achieve the constitutional dream by women’s affirmative action to what is termed as progressive. This has the effect of delaying the implementation of the two-thirds gender rule. This is also an affront to the intent that the two-thirds Bill envisages to change. it cer-tainly begs the answer to the ques-tion, why one person on the one part could simulate a good idea and then veer off the tangent completely.

The decision by Justice mumbi-which gives Parliament the option to invoke article 261 of the Constitu-tion 2010 and extend the period pre-scribed in respect to enacting legisla-tion providing for the promotion of representation of women is also seen to curtail all efforts to come up with a wholesome formula for achieving the two-thirds gender rule. The pur-port of extending the lifeline for the enactment of a formula to achieve the two-thirds gender rule is in bad faith and against women’s legiti-mate expectations. This is because the Constitution acknowledges the challenges in getting the numbers of women to men representation in par-liament to the ideal 50-50 percent-age; the two-thirds ceiling which the Chepkonga Bill intends to circum-vent by ignoring the definite TWG formula is merely a minimum stand-

Security is a fundamental right as in its absence there is a threat to the enjoyment of other rights


ard which is ideally achievable. The international institute for Democra-cy and Electoral Assistance (IDEA) research implies that states like Ken-ya should within a definite time alto-gether abandon this ceiling as it is still unequal to women representa-tion in a country that fosters equality through its Constitution. Therefore, a national strategy for achieving bal-anced female representation should be the main agenda to ensure fair gender quotas.

Thus, the Chepkonga Bill should be re-worked as in its current state, it remains a resistance to women-based affirmative action and there-fore perpetuates discrimination against women despite the strong proclamation against this in the Constitution. While the Constitu-tion embodies a significant change on the issue of gender representa-tion effectively ushering in a new era, the government has failed to ensure quick achievement of Article 81(b) in respect to the national assembly and the senate.

Despite Kenya being a signatory to many international instruments that promote gender equality, the Chepkonga Bill seeks to paint Ken-ya as a country that presents a good image internationally, but does little to comply with its international obli-gations. Parliament should therefore adopt and implement the most pop-ular method worldwide for achiev-ing affirmative action which is the use of quotas as provided in the Con-stitution and international instru-ments. research has also shown that Kenyans are as likely to elect women as much as men; therefore support is necessary to ensure that women attain a standard quota with a view to reducing the gap to a 50-50 repre-sentation. Lifting the quotas as pro-vided for under article 177 from the County assembly to the national assembly remains the best option. Consequently, political parties are the best wheels to move this formula to ensure compliance.

While it is appreciated that the

law reform has created opportunities for women’s participation, they have not come out in large numbers to seize them. This implies that reform-ing the electoral system is only part of the solution to women’s under-representation in politics. The prob-lem is however, much deeper; patri-archy, lack of resources and societal attitudes towards women’s leader-ship are the major obstacles to wom-en’s political participation. many women therefore prefer to remain in their comfort zones rather than face the harsh and hostile environment perpetuated by the political scenari-os of violence, bribery and character assassination.

in order to get more women to participate, there is need to ensure the environment in which poli-tics is played is accommodative and non-violent through introduction of a code of conduct that governs all the players with strict enforcement mechanism in case of violations. The law is not self executing; women themselves must be active and effec-tive voices within society by demand-ing the spaces to take advantages of the opportunities created by the law or institutional reforms. To have greater gains on these, we must begin to build the capacity of women to cope with these challenges and gain the confidence desirable for political participation. We must also engage men to appreciate the family roles

of women as shared responsibility to ease the societal pressures on a wom-an’s time to engage in active politics. Controlling the political environ-ment is therefore important to allow women to engage fairly in campaigns as candidates. This will avert the problem women face in politics and which manifests itself principally in the concept that politics is ‘a dirty game’.

The Constitution provides for the two-thirds principle which must be upheld in both elective and appoin-tive positions as stipulated in article 27(8). However, a clear absence of the same provisions in article 97 and 98 of the Constitution makes it very dif-ficult to implement the principle at the national assembly and the sen-ate levels as opposed to the County Assembly level. In essence, a right that is constitutionally guaranteed has remained elusive and more of a pipe dream yet to be enjoyed by the beneficiaries. It is high time Parlia-ment takes its rightful role and obli-gation to breathe life into this murky debate on the two-thirds gender rule. n

Nairobi women leaders at a past work-shop on gender rule. adressing media dur-ing a press statement (africanpress.me)


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PROGRAM VENUE DATES

4. Occupational Safety and Health Mombasa 14th – 16th October

9. Gender and Disability Mainstreaming Naivasha 3rd – 5th February

11. Integrity and Anti - Corruption Mombasa 23rd – 25th March

10. Strategic HR Management Arusha 23rd – 26th February

12. Gender and Disability Mainstreaming Eldoret 20th – 22nd April

13. Occupational Safety and Health Mombasa 11th – 13th May

14. Environmental Sustainability Nairobi 18th – 20th May

15. Alcohol and Drug Abuse Kisumu 25th – 27th May

16. Tendering and Procurement Kisumu 8th – 10th June

2016

2015


n LAW AND eTHIcS

an understanding of the architecture of land laws is an effective back-ground to the consider-ation of whether or not

the legislation on the minimum and maximum land holding is feasible. This article offers a general survey of the land policy and legal environ-ment as a precursor to the discussion on the legislative proposals.

From the outset, we all agree that the land question excites both emo-tions and a deep search for answers, a quest that has informed several inquiries such as the Njonjo Com-mission, the Ndung’u Report, the genesis of the settlement Fund Trus-tees, reflecting into reform experi-ments in Kenya.

Land informed the struggle for freedom, the very basis of revolt in Kenya. Land has been at the centre of ethnic violence in the past especially around election time between neigh-bours in parts of the previous West-ern, Coast, North Eastern and Rift Valley provinces to mention a few.

Chapter five of the constitution dedicates several articles to the land question. Critical to the understand-ing of the land sector is the fact that sessional paper no.3 of 2009 arrived with an extensive policy architec-ture on the land question before the promulgation of the new constitu-tion in 2010. However, a reading of the land policy against chapter five of the constitution, should make one realize that ambitious as it may be, the National Land Policy needs to be revised to bring it in line with the pro-visions of the constitution.

Land use and holding in KenyaLand in Kenya is to be held, used and managed in a manner that is equitable, efficient, productive and sustainable in accordance with the principles set out in the Constitu-tion. These include: equitable access to land, security of land rights, sus-tainable and productive manage-ment of land; transparent and cost effective administration of land and sound conservation and protection of ecologically sensitive areas. These principles are to inform a national policy which is to be developed and

reviewed by the national government and buttressed through legislation.

The classification of land is informed by the fact that all land belongs to the Kenyan people col-lectively as a nation, as communities, and as individuals. In that regard, land is classified into three categories of public, community or private. For the purpose of this article, we will not deal very much on the issue of public or community land. We will howev-er, deal with the issue of private land and the questions of ownership and its administration in considering the whether or not one can achieve leg-islation around minimum and maxi-mum private land holding acreages.

Private land consists of registered land held by any person under any freehold tenure; land held by any person under leasehold tenure or and any other land declared private land under an Act of Parliament.

The issue of how land is held and regulations to determine the hold-ings are well ventilated in the Con-stitution of Kenya. The state has the authority to regulate the use of any land, or any interest in or right over any land, in the interest of defence, public safety, public order, public morality, public health, or land use planning. The Constitution also pro-vides that Parliament shall enact leg-islation to ensure that investments in property benefit both local commu-nities and their economies.

Minimum and maximum land holding acreages debateThe debate on the minimum and maximum land holding has gener-

LAND HOLDING IS THE CASE FOR MINIMUM AND MAXIMUM: IS IT FEASIBLE?

B Y M A R T i n O l O O


ated a storm. In my view, other con-siderations and historical factors, rather than the actual provisions of the Constitution inform the debate. But before we get to the storm, let us place the whole discussion with-in the context of the constitution. a good reading of article 68 of the Con-stitution gives one a clear picture. The Constitution directs Parliament to revise, consolidate and rational-ize existing laws; to revise sectoral land use laws in accordance with the principles detailed out in the Consti-tution; and further, the Constitution requires Parliament to enact legisla-tion, which among others, prescribes minimum and maximum land hold-ing acreages in respect of private land.

From a casual reading of the con-stitutional provisions in Article 68 (c) (i), the minimum and maximum land holding would appear to require separate legislation. This approach resulted in the production of the stand-alone Bill on the minimum and maximum private land hold-ing acreages. However, I subscribe to the view that all that is being called for here is the need to capture such a prescription in the law.

a separate bill indeed exists as a result of the divided opinion. The proposed Bill has several objec-tives in the quest to set the stand-ards for determining minimum and maximum land holding acreages in respect of private land. it proposes that the determination be based on ecological zones; the need to reduce inequality and promote equitable distribution of land; the need to reg-ulate subdivision of land to ensure that land is held in economically via-ble parcels; the need to provide for the regular review of land holdings and the reorganization of rural set-tlements; the need to facilitate self-employment, sustainable utilization of private land and promotion of national security and economic sta-bility.

To arrive at the prescriptions, the Bill proposes a scientific study to determine the economic viability of

minimum and maximum acreages in respect of private land for various land zones in the country. It is also proposed to have the minimum and maximum land holding acreages determined after taking into account ecological zones; demographic fac-tors; land use; land tenure systems; cultural and customary practices;

For purposes of the proposed Bill, all private land is zoned as follows:

1) Agricultural land categorized into—cash crop farming; food farming; subsistence and com-mercial farming; and such other category;

2) Livestock and pastoral land cate-gorized into— pastoral farming; beef farming; zero-grazing dairy farming; sheep and goat farm-ing; poultry farming; fisheries;

3) Urban and peri-urban land in cities, municipalities, towns and urban areas which are cat-egorized into— low, medium, mixed user and high density residential areas; light, medium and heavy industrial areas;

4) Commercial areas; educational, health and religious facilities;

Is it about ownership or holding? And what is the difference?

The history of land problems in Kenya remains a thorny issue. There are those who believe that to solve the land question in Kenya, there is a case for land re-distribution. These proponents push for what would amount to capping of land owner-ship to assure landless people of ownership of land through a redis-tribution programme. On the other hand, the opponents of this proposi-tion would argue that Kenya is a lib-eral economy and such caps would violate the right to own property as enshrined in the constitution.

Ours is a quest to frame the debate in the manner that it should pro-ceed. There is a difference between prescribing ownership and holding. Prescription on ownership would amount to capping what one can

own at the lower and upper end. it would mean a direct affront to Article 40 of the Constitution. What the spe-cific provision of the Constitution is calling for is to prescribe private land holding for specific purposes to be defined in law. Is this a new require-ment? Absolutely not. The land con-trol Act, the agricultural laws and the physical planning act all provide for regulation on the minimum pri-vate land holding to the extent that is needed for development control and food production, or wildlife con-servation. For effective planning and in keeping with the principles enun-ciated in the Constitution of Kenya 2010, prescriptions on minimum and maximum land holding are feasible and realistic when looked at from the principles of land holding and not ownership.

Following debates and discus-sions, the minimum and maximum land holding bill, the Executive and Parliament have collapsed it into the amendments of land laws bill. The approach taken by the amendments of the respective sections of the Land act to accommodate the manner in which prescriptions on land siz-es can be made, in our view, suffi-ciently addresses the constitutional requirements. It is therefore abso-lutely unnecessary to do a separate and stand alone bill on the subject matter considering the spirit and let-ter of the Constitution to consolidate land laws.

The Land Law amendment Bill 2015 proposes to amend section 159 of the Land act 2012 to include pro-visions for prescription on minimum and maximum land holding acre-ages. it is a welcome development and provision in our constitution to inform better land use and sustain-able development on land. The pre-scriptions are feasible and consistent with the principles enunciated in the constitution. n

MARTIN OLOO,LL.B, LL.M, LL.DADVOCATE OF THE HIGH COUrT


n eLeVATOr

Techno Brain: Data Driving Innovation

Conversation with Manoj Shanker,CEO Techno Brain

since 1997, Techno Brain has been climbing its way to the summit of great iT companies. it has gained a lot of regional and national recognition as well as a reputation for being a well-managed company and a pool of talent.

Founded off the brink of opportunity seen by two IT gurus 20 years ago, Techno Brain is currently the leading technological innovation hub of the african continent. The company put up a small technology training compa-ny in Dar-es-Salaam that quickly rose to become a think tank where solutions to africa’s technological problems would be developed and implemented.

Manoj Shanker, the CEO of Techno Brain is now driv-ing a multinational company operating in 25 countries, 19

out of these in africa.The experience of setting up successful stations across

the continent has earned the company a lot of experi-ence in breaking into the various political and business operating structures in each of the countries. according to Manoj, Southern African countries such as Botswana, Malawi, Namibia and Zambia where business oppor-tunities and trading processes are a lot fairer and more transparent offer the business better flexibility to pursue and develop innovative products for those markets.

Much as East Africa, especially Kenya, remains the leading hub in terms of availability of opportunities, skills and manpower, Manoj fears that the business envi-ronment is a little harsh to operate in. “nairobi has got a better skill set than many countries in the african region. People are more enterprising and logistically, it is eas-ier to manage all countries, from Kenya. We have even recently moved our headquarters from Tanzania for this reason and we already see the benefit. However, rampant corruption and unfair business practice is stifling the growth of enterprises like ours. it is a pity that this is the case across all sectors. Business, especially government business, is given to you based on who you know and not what you can achieve for the country or client. This is not to say everyone is corrupt, it is just to say that such an environment is a challenge for economic and infrastruc-tural development.”

Africa has become the big game of the nation hunters. Today, Africa looms as the greatest commercial, industrial and political prize in the world.

- marcus Garvey

Techno Brain CEO Manoj Shanker receives the Finalist Award at 2013 Ernst and Young Entrepreneur of the Year Awards.

http://www.brainyquote.com/quotes/quotes/m/marcusgarv701485.html?src=t_africa

http://www.brainyquote.com/quotes/quotes/m/marcusgarv701485.html?src=t_africa

http://www.brainyquote.com/quotes/authors/m/marcus_garvey.html


Experience and opportunityHaving developed a number of sys-tems for the governments of Tanza-nia, Malawi, Uganda, Nigeria, Ken-ya and Swaziland, the Techno Brain CeO says they enjoyed working on the Nigeria Customs Service Pre-arrival Assessment Report (PAAR) generation system for customs authorities to facilitate greater risk assessment and revenue generation for tax identification and calculation tools to stop the loss of revenue at the port, Automatic Fingerprint Iden-tification based Criminal Tracking System for the Malawi Police Force and a biometric based border con-trol system for immigration; and the integrated Financial management system for budgeting and revenue collection for local governments of Uganda and malawi. “These four projects have spanned to be some of our novelty projects and best devel-oped systems since we begun oper-ations. The results have been tre-mendous for the governments and efficiency has been increased and consequently revenue collection has been increased. in the case of mala-wi, the police force is a lot more effi-cient and accurate in their reporting. We hope to be a part of leading the change in creating a more accessible business and operating environment in Kenya.”

In Kenya, the company has been responsible for the digitalization of patient records at the Kenyatta National Hospital (KNH), develop-ment of Childline - a citizen-centric helpline case management system for national and international report-ing of cases of child abuse. The same model was adopted for Childline in Ghana, Zambia, Uganda and Namib-ia. Techno Brain also developed an enterprise performance manage-ment suite for he Retirement Benefit authority of Kenya for performance reviews, strategic planning and deci-sion-making and a data manage-ment information system for Kenya’s national environment management Authority (NEMA).

manoj however sees a lot of oppor-tunity in the country despite the exist-ing bottlenecks. He says, “Kenya has a lot of opportunities and challenges for us. Kenya has a long way to go in cleaning up its procurement process, as the existing one is extremely diffi-cult to go through. i appreciate what the President is trying to do to clean up because companies like ours are heavily affected. We have creden-tials, we are a world-class business

and being based in Kenya gives us tremendous opportunity that is still a challenge to harness. However, the problem cuts across the continent, as governments in africa do not have any real strategy to encourage devel-opment of local enterprise. They still believe in importing talent and resources for problems facing both the private and the public sectors.”

People, research and trainingLooking across the continent, Tech-no Brain sees increases opportuni-ty in the automation of government and public sector systems. “it is evi-dent the public sectors of many coun-tries in africa need automation; port e-services, tax and custom systems, e-citizens services, to stem corruption and improve revenue collection and work-load for the public sector and overall, the lives for the citizens in general. Our two research and devel-opment (R&D) centers in Kenya and india are continuously researching and innovating to inform the devel-opment of our products, especially for the public sector client. The r&D center in india was founded in 2009 when india became the iT capital of the world and has helped us churn our some of the best systems we have developed for countries across the globe. The Kenya r&D center is the first in Sub-Saharan Africa to receive the Cmmi maturity Level 3 and has

"Kenya hasa lot of opportunities and challengesfor us. Kenya has a long way to go incleaning up its procurement process,as the existing one is extremely difficultto go through."

MAnOj SHAnkeR Chief Executive Officer, Techno Brain


been helpful for development of sys-tems such as automation of the KNH, says manoj.

Techno Brain is continually engaging in complex and unique assignments like building complex business applications that require high levels of strategy and investment and the ability to use local resources. Being a high tech company, innova-tion is key to improving solutions and processes for the existing mar-ket problems. Techno Brain recently acquired a tax and customs system from Crowne Agents, a British inno-vation company and is improving the product and modeling it for africa’s needs. This strategy, the company says, makes its products affordable and relevant for the african market.

Driven by the global delivery mod-el which is a combination of onshore and offshore development and the leading method for delivery of iT services and solutions globally, the model relies heavily on the idea of a global workforce followed sequen-tially by a well documented process, focus on quality, using the best tools

to get the job done, pristine project management and risk mitigation. With a global workforce of 1,600 employees worldwide, Techno Brain believes in it people. This is reflected in the pride, ownership and passion exhibited by the team. manoj plac-es a lot of trust in his employees and calls them ‘team players’ in the jour-ney to be the best in the world.

Techno Brain has 11 training cent-ers that have trained over 500,000 stu-dents to date and placed over 5,000 in various organizations across Africa and employed quite a number with-in the organization. Techno Brain provides training solutions including needs analysis, content development, trainer certification, training delivery and post-training support for both individual and corporate clients. The company has trained over 100 IT managers and officers who were working on the Kenya e-Government project and plays the role of capac-ity building in the advisory council of the Presidential Digital Talent pro-gram in Kenya that is geared towards building the next generation of glob-

ally competitive iCT leadership tal-ent to transform Kenya through ser-vice delivery to the citizenry.

Manoj affirms that the Tech-no Brain training centers are going beyond just instructing and certifi-cation. Upon entry into the Kenyan market in 1999, Techno Brain became the Oracle education partner in the country and has since offered IT students the opportunity to develop skills and talent and become entre-preneurs and leaders in the iCT sec-tor through the interaction and expo-sure they get while at Techno Brain.

Giving backDeveloping technology for Africa, mr. manoj says has been no mean feat. The challenges across the conti-nent vary but the company has man-aged to stay afloat because of its deep conviction to empower the lives of its clients and the society. “Through the Techno Brain Foundation we execute our great passion to improve economic performance and support the health and welfare of the disad-vantaged as well as empower indi-

left to Right- Sarah Richson HR Director Techno Brain, Manoj Shanker CEO Techno Brain, CS Hon Fred Matiangi, PS Hon Joseph Tiampati, CEO ICTA Victor Kyalo, Baris Vural- Director- Sales Techno Brain


viduals to make the most of their tal-ent through education. We also strive to ensure that while identifying and supporting young people, we also make a contribution to the conserva-tion of the environment. at the start of 2015, we had pledged to plant up to 50,000 trees over the next three years to not only conserve the envi-ronment but also provide technical assistance to those protecting wild-life and the special wonders of the world, so far, we have planted 35,000 trees across the globe” says manoj.

Part of the Techno Brain Social responsibility revolves around capacity building and impact sourc-ing especially for women and girls. Capacity building involves knowl-edge transfer through collaborative partnerships and partner program with Microsoft, SAP and the Govern-ment of Kenya. it also has academic alliances with institutions of higher learning geared towards improving the learning experience for students. research and innovation helps the company in developing solutions for africa’s problems while educa-tional funding also plays a big role in providing educational assistance

for needy students. Impact sourcing, internship and job placement ulti-mately helps students get employ-ment, sustain their livelihoods and sustain the iCT talent.

Role of ethicsethics takes a central role at Techno Brain. an iT company carries and handles both public and highly con-fidential information for its clients. Manoj says, “Ethics is one of the fun-damental values in how we engage with our customers and how we car-ry ourselves. Integrity, commitment are a basic and extremely powerful part of our existence and our compa-ny. We have tried very hard to ingrain this practice in our organization. It has worked well in most of the coun-tries where we operate. The truth however is that it is hard to do busi-ness if you have this kind of approach because many people do not sub-scribe to your values. at Techno Brain, these values are fundamental to us and my only hope is that people will see the difference in their inter-action with us.”

“The highly evolving iT industry also creates its own challenges when it comes to ethics especially at the work place. Being a leading research and IT hub for the continent, we face threats from issues such as piracy. This is a constant threat to any com-pany like ours. much as we have the necessary tools, processes and mech-anisms required to protect our prop-erty, the issue of piracy is more an ethical issue. We have conducted a lot of education for our people and i hope better laws will be put in place to protect the interest of iT compa-nies. Protection by government will also attract other large companies to set up in Kenya and in the continent,” he adds.

Looking ahead…manoj says he views the company as a small swift flying bird cutting across the wind at top speed with steady momentum. This is a true analogy of the company, given that it has a gal-lery of trophies for its innovative ser-

vices across the globe. Though being feted was never the reason for found-ing the company, Techno Brain CEO was recognized by CNBC in 2014 as the entrepreneur of the year at the continent’s most prestigious business awards, the CNBC Africa Annual Business Leaders Awards (AABLA). in his usual soft spoken and humble style, Manoj says he can attribute the recognition by CnBC to the compa-ny’s ability to find local solutions for africa’s local problems.

In 10 years, Manoj sees the com-pany operating in over 40 countries with a work force of over 30,000 employees, exporting work to other parts of the world and having been recognized as a truly global compa-ny. The Techno Brain CeO sees the IT business as very promising, ‘creat-ing an inspirational effect.’ He urges many more iT entrepreneurs to be motivated by the success and moti-vation of others and take advantage of the existing opportunities on the continent.

In parting, Manoj pleads with Kenyan and african governments to sort out the issue of unfair business practice that is affecting procure-ment and allowing other large com-panies to take away business from the local players because of their financial muscle. He also pleads with the Government to seriously con-sider companies that are seriously trying to build local solutions and local competence. He asks the Gov-ernment to loosen labor restrictions and streamline other services that support businesses such as the trans-port sector in order to manage the high airfares and cost of doing busi-ness. This, he says, is the key to open-ing up local companies to compete in the global space.

To aspiring entrepreneurs, Manoj advises, “The journey is a journey. it is not about business and mak-ing money and profitability. It is also about creating high-tech jobs in afri-ca. it gives me great satisfaction to be able to create jobs. Because if you want decent jobs, create decent jobs for others.” n

"the journey is a journey.It is not about business and making money and profitability. It is also about creating high-tech jobs in Africa."


Conversation with Mohammed Hersi, CEO Voyager Hotels

mohammed Hersi, CEO, Heritage Hotels speaks with immense passion about the tourism and hotel sector. His passion for his job is evident and he takes it to heart. This is probably because he has numer-

ous years of experience in the sector that he no longer considers his job as employment, but more of a vocation. He prefers to bask in the sun in mombasa than rush in traffic in Nairobi. Probably one of the reasons he makes a good host at his hotels.

as the chairperson on the mombasa and Coast Tour-ist Association (MCTA), Mohammed Hersi has led quite a number of reforms in the tourism sector in his various positions as GM of several hotel chains in the area, most recently as GM of Sarova Whitesands, Mombasa.. Hersi almost single-handedly revived the concept of local tour-ism in Kenya after the Kikambala bombing and after the 2007 post election violence in Kenya.

He says the post-poll clashes led him to one of his low-est points in life and in his career. “We had 90 percent bed

n eLeVATOr

Kenyans biting the hand that feeds them

“a random search of the word beach on the internet and Kenya does not feature anywhere. The country is up against stiff competition with Mauri-tius, the Bahamas and most recently Durban, South Africa. A total 34 coun-tries worldwide have beaches, and the Kenyan coast is one of the best in the world, but little is being done to make good use of this opportunity.”

– Mohammed hersi


occupancy at Whitesands which has a bed capacity of 680 pax on the day of voting. Within just five days of the post election violence, we had only 15 guests left at the hotel. As the MCTA, we really had to come up with a com-pelling story to sell to Kenyans about local tourism. it was the same scenar-io after the Kikambala bombings. all these issues are linked to poor gov-ernance and poor planning which has cost us greatly as a country.”

The strategy Hersi and his col-leagues employed was to reduce the cost of services at the hotels in mom-basa to encourage locals to visit the coastal cities. many hotels at the coast also put together special east-er family events. These affordable attractions drove people out of the towns to the coast and the tourism sector had a reprieve. international tourists soon followed and the tour-ist sector heaved a sign of relief only three months after slumping in Janu-ary 2008.

The road downhillHersi narrates how as a young man, he took up a job at the sheraton Hotel in sri Lanka. He packed his back with zeal and enthusiasm, quite happy that his hard work and school days had really paid off. He got on a plane and jetted off to begin his life as an international hotelier. Life in Sri Lanka was quite the opposite of what he expected. The discrimina-tion from his egyptian colleagues became unbearable and soon he was on a plane back to Kenya.

He landed in the country in 1997, hot on the heels of the Likoni clash-es. nobody was employing and so he remained jobless for 18 months. When life got hard, he went to Kajia-do and set up a video library. He had to survive as he waited for the next

opportunity.Hersi says this was a difficult time

for him, but he was tough enough to weather the storm. Growing up, his father was a civil servant who worked with the ministry of Livestock in isi-olo. He would disappear for months on end and his mother brought him and his six siblings up. They had to look out for each other. When the somali government attacked Kenya claiming former north eastern prov-ince up to Embu was their territory, his family had to move further down and his father was transferred to mombasa. They settled and grew up there, and to date, he calls the Coast-al town his home.

“it saddens me to see the sad state of tourism in this country. Growing up in the coastal part of Kenya, I have seen better days for this country espe-

cially for the tourism sector. Like in all other sectors, those with the pow-ers to do something about the state of affairs have chosen not to. Kenya is up in stiff competition against 34 other countries but we choose not to deal with our problems squarely. We do not need to reinvent the wheel, but we have become a greedy peo-ple, we see not beyond our self-gain. The government is slow in effecting change in the tourism sector,” he laments.

Hersi continues to express his dis-appointment with how the coun-try has deteriorated beyond just the tourism sector. He remembers vivid-ly his days in primary school when in class one, all the students were given dustless chalk, text books and exer-cise books and how his school had a big playing field. He recalls the new Oxford geometrical set he got when he got to class four and how the schools were set in actual classroom structures. He remembers how free primary school education was free indeed. Hersi also recounts his trips to the hospital with his family.

He says, “ Going to the hospi-tal was a family affair and a day out. When one of us was sick, we would be excited to be going to the hospi-tal. The facilities were clean and well equipped and the doctors all had white robes and were highly respect-

“Mistakes are better corrected faster, and the faster you move, the less entertaining you ***************.

Mohammed Hersi expalins to UN World Toursim Organization Secretary General Dr. Taleb Rifai about the Beach Manage-ment program in North Coast, Kenya


ed by society. Despite the fact that we had to walk for quite a distance, it was a trip worth taking. Today, we have dispensaries that are ill equipped, doctors asking for bribes and run-ning illegal operations, medicine is not available at the dispensaries and even the referral hospital can-not handle all the referrals. Doctors today are quick to rush patients to surgery to make a quick buck. What happened along the way?” he poses.

Who will bear the cross?He continues to blame the lack of accountability and lack of action by the leaders of the country for the dilapidated state of the nation. Hersi says we have sunk so low as a country that ‘we even bribe our way through marathons,’ referring to the case of the athlete who tried to rig his way to second place in the 2015 nairobi standard Chartered marathon. Her-si sympathizes with our local leaders who ‘earn very good salaries and still insist on being paid unfair dues such as sitting allowances.’

He asks: “Who gets paid to sit and work and still gets a salary at the end of the month?”

“Kenyan MPs,” he answers. “That is a sign of greed. Kenyans have nev-er fiercely opposed this, so what hap-pens next is that MPs sit in Parlia-ment and pass pay increases, refuse to pay taxes and continue to loot

public coffers. Then the Government goes broke paying salaries, then bor-rows money, increases taxes to raise capital to finance government pro-jects. The same leaders are looting and corrupting projects and stashing looted cash offshore. You and I con-tinue to suffer and pay taxes. Until heads begin to roll, we should pre-pare for tougher times ahead,” he concludes.

Hersi sees the biggest challenge to corruption in the country as the pri-vate sector. He says the private sec-tor has long been an enabler to the

corruption in Government and even within itself. “The government can-not corrupt itself,” he says. Corrup-tion is two way and is driven by the private sector which trades with gov-ernment. “it is driven by lawyers who draw up fake papers; engineers who will reduce on the quantity of mate-rial needed for a building in order to pay a bribe to get a contract; survey-ors who will sell the public short in order to grab land for a senior offi-cial; and even an office assistant who will take a bribe to switch one file for another in a hospital. it has a trickle down effect,” he adds.

The CeO says Kenyans should be very worried. The writing is on the wall - the economy is not doing well and inflation is crippling the Ken-ya shilling. “Devolution was a good attempt at improving the country by devolving funds to the counties. Unfortunately, corruption has been devolved instead. There is a lack of accountability and funds are being misappropriated by those charged with improving the lives of Ken-yans, and as usual, those who should implement the law are playing on the ignorance of the people they should be protecting.”

Opportunities to harness“The last tube of toothpaste that i bought from a local supermarket was manufactured in Zimbabwe, a coun-try whose currency has no value. The previous tube was from Brazil, a country that has little to no relation-ship with Kenya, yet we are import-ing toothpaste from that country. as a result, we kill the local industries and thousands of job opportunities. This is exactly what is happening with the tourism industry,” Hersi says.

He explains further, “The tour-ism industry has the potential to employ one person for every 10 tour-ists. The target number of tourists

corruption has become engrained in our society, it is a shame. We all have an individual responsibility to reverse the situation; to become better mentors for the next generation in our various professions.

Mohammed Hersi welcomes HE Deputy President William Ruto to the UNWTO Tourism Forum 2015


per year for Kenya is only 1.5 million tourists. if you prorate inbound tour-ists to employment, that means the industry employs 150,000 people per year if this target is met. The average spend per tourist is $1,000 for a four night stay; this easily amounts to $1.5 nillion in revenue before expendi-ture. Turkey alone attracted 45 mil-lion tourists last year and one city had 17million tourists. Why can’t Kenya meet its target?”

Hersi says the opportunities are immense especially for the tourism industry. Kenya remains the only destination in the world that gives an opportunity to combine a coast-al beach holiday and safari within a reasonable distance. Much as Tanza-nia offers the same, one has to trav-el to Zanzibar. South Africa can also offer the same experience but the country experiences cold weather half the year yet mombasa is yet to be exploited. infrastructure develop-ment is wanting in the town and con-vention centers are slow to be set up. medical tourism is also a good ave-nue to consider according to Hersi. He says Kenya has the potential to become a regional medical hub for the over 350 million people in the east african countries.

Besides offering employment, the

country has a number of opportuni-ties for economic growth. The CeO says that corruption has become so ingrained in our systems that we can-not see opportunity staring us in the face. The youth are unemployed and are restless. They are looking for easy ways to make a quick buck to live the lifestyles of the ‘famous’ yet the hos-pitality industry cannot be automat-ed.

“you cannot automate things like making beds, or serving breakfast in bed. you cannot automate a con-cierge service or check-in system. robots cannot substitute the per-sonal touch that the industry offers. Worldwide, even the leading innova-tors have not been able to automate the hospitality industry. This is a sec-tor that has great potential to sort out some of the country’s problems if only corruption will be left out it,” says Hersi.

“The one thing I am fighting for right now is the Open skies poli-cy. mombasa is being denied the opportunities to receive internation-al flights and this has a direct impact on bed occupancy and revenue for the industry. Turkish airlines has now been allowed to fly directly into mombasa therefore connect-ing mombasa to 69 other cities in the

world while the local carrier Kenya airways has been denied landing rights from international destina-tions. Qatar airlines was denied the same opportunity, yet they can con-nect mombasa to 202 cities in the world. Qatar is now landing in Zan-zibar. With such policies, we cannot compete competitively,” he adds.

One last wordHersi pleads with the leaders in the country to forget the past and start building a future. “Getting into politi-cal office should mean something. It should not be seen as an opportunity to loot and run because you will not be re-elected come the next election. The private sector needs to champi-on reforms in the country and lead the change they want to see. aspir-ing leaders should not do the wrong thing because everyone else is doing it. That does not make it right. They should stand up and chart a path of their own,” he says.

Hersi believes in mentorship of young upcoming leaders and runs a mentorship program in mombasa. He asks young leaders to be patient and follow the straight and narrow path to avoid falling victim to terror groups and criminal gangs looking for quick money.

He regrets that sadly, the leader-ship of this county does not have a plan for the youth. “engaging young people in tasks such as clear-ing drainages and cutting grass does not address the major issue of unem-ployment and corruption. We need to create a sustainable environment for the youth and that is entrepre-neurship. The problem is the middle class are not ready to act. The poor will rise up and eat the middle class leaving them with nowhere to go but take action. if we do not change our mindset and our actions, that day is soon coming,” he says.

The solution, Hersi says, is you and I. Maybe not all at once, but one per-son, one one less corrupt deed every day. if we all wake up every morning and start to make a difference, then there will be a real difference. n

Right to left Mohammed Hersi with Tourism CS Phyllis Kandie & UN World Tourism Org Sec Gen Dr. Taleb Rifai


In the Greek crisis, lessons for KenyaA BRIEF COMMENTARY

B Y j A c k y n y A n D e j e

JaCKy nyanDeJeexecutive Director of The ethics and integrity institute.

POLITICS AND ECONOM-iCs have long shared a neces-sary but uneasy relationship requiring an intricate balance of the various players’ inter-ests to stay afloat.

The Greek crisis which is often also referred to as the Eurozone crisis is a perfect example of the impact of pol-itics on economics and vice versa. The crisis continues to expose the weak links in the european Union. Despite the recent enactment of the eco-nomic Firewall by the euro-pean Central Bank (ECB) to ensure Greece’s mess doesn’t spread to rest of Europe, the situation has exposed weak-nesses in the international sov-ereign debt system that have been ignored for too long.

The foundation of this tragedy is the decision to bail Greece out of the 2010 crisis in contradiction to the “maas-tricht Treaty’s” no bailout rule and the popular advice of most German economists.

The move was a desper-ate, politically driven attempt to save the eU while simulta-neously turning a blind eye on basic economic principles which go against lending to a bankrupt entity. accord-

ing to Hans-Werner Sinn, a professor of economics at the University of Munich, this in effect escalated a normal com-mercial dispute between cred-itors and debtors (that always arises when debtors fail to repay) to a dispute among sov-ereign states. This is because the treaty transformed pri-vate debt (commercial banks) into sovereign debt (other eU countries and in effect social-ized to taxpayers). Ironically, despite this initial hesitance to lend Greece money, those emerging as winners are Ger-many and other creditors like the UK and Us.

Clearly, animosity appears to be building during negoti-ations that has seen Greece’s initial desire to stay in the Union turn into resentment fueled by the perceived inflex-ibility of its creditors who are represented by the Troi-ka - the three organizations tasked with managing the cri-sis namely the european Cen-tral Bank (ECB), the European Commission and the interna-tional Monetary Fund (IMF). On the flipside, Greece’s cred-itors, especially Germany have been resentful of financ-ing the so called Greek “enti-

tlement” to a lavish lifestyle (early civil service retirement) and corruption enabled by an irresponsible fiscal policy. a reduction of the austerity measures, it has been argued, will result in a Moral Hazard whereby the citizens in sta-ble european economies are taxed and the proceeds trans-ferred to countries that mis-manage their economies. The resulting tension has fanned nationalist fervor and tested the bonds of pan-european identity.

another interesting issue that has been constantly point-ed out in this emotive debate is that despite its looming bank-ruptcy, Greece is still relatively well off in terms of standards of living and size of the econo-my as compared to some of its eastern european neighbors. This suggests that the signifi-cance of the Greek situation is not only economic but politi-cal as regards the symbolism of european Unity. The simi-larity of its debt structure to some Eurozone members like Italy, Portugal and Spain has brought the reality of insol-vency too close to home.

While a lot of European governments have been quick

n eTHIcAL DILemmA


to place the blame on Greece’s eco-nomic inefficiencies, they have for-gotten to balance it with the fact that the irresponsible lending of French and German banks (which were bailed out) are as much to blame as Greece’s civil “disservice”. a sincere analysis of the actions and reactions of this mess would be more helpful to everyone by enabling the interna-tional finance community to learn from it.

As with all market failures, the Greek crisis cannot be attributed to a sole factor but is rather the culmina-tion of a variety of factors operating in an inefficient local and interna-tional fiscal system. In fact observ-ers have interpreted it as being not so much a financial crisis as symptom of a dysfunctional societal system. some of these factors are:-

A Politicized Pension System- A review of the Greek economic system revealed a high expenditure in pen-sions relative to the GDP (17.5 percent of economic output). In 2012; it was the highest pension to GDP ratio in the EU. In spite of this, not all retir-ees benefit equally from it as factions termed as ‘more politically correct’ (like the military trade union) have benefitted much more. This high-lights the importance of the ongoing review and subsequent implementa-tion of Kenya`s nssF act 2013 by the different arms of government.

With different financial market players positioning themselves to profit from what will be a multi-bil-lion shilling industry, the writing on the wall for Kenyans is to ensure the policies enacted are not based solely on political leverage but on econom-ic efficiency as well. This is especially important when you factor in Kenya’s mainly young population which will age at the same time and live longer due to better healthcare.

Fragmented Retirement Policy- While the average Greek man retired at 63 and woman at 59, there were loopholes in the system that a section of the population were able to take advantage of. For instance, some mil-itary and police employees retired at 45 while female civil employees with young children were able to retire at 43. While it could be argued that this may have benefitted society by ensuring well balanced children, it contributed to the wastage of skilled and experienced human resource and increased the national pension burden.

rampant Tax evasion- The tax collection system had loopholes which enabled the populace espe-cially the rich to avoid paying taxes. While the ruling Syriza party has proposed to penalize wealthy tax evaders and reform the tax system, the actual implementation has been unsuccessful. This has contributed to

the anti-Greek sentiment among oth-er Eurozone countries.

Corrupt Political Culture- Greece has been criticized for having a cul-ture of political cronyism and an unaccountable, bloated civil service. This, coupled with a populist fis-cal policy based on political mileage instead of economic soundness has given ample room for external pred-ators that have benefitted unjustly from Greek taxpayers.

Forbes Magazine has reported an incident in which Greece purchased two diesel submarines (that never worked) from Germany for a billion euros. a Kenyan reading this will probably relate this to the Golden-berg and anglo-leasing scandals. in addition to this, Greece, a country with a population of only 11 million is the largest weapons’ importer in the world with the main suppliers being France and Germany.

another irony of the Greek sys-tem is demonstrated in education. in spite of having a relatively low quality of education rating in Europe, it has a bloated teaching workforce with one of the lowest teacher to pupil ratios in the eU. a Kenyan reader may again at this point remember the former nairobi City Council’s ghost workers.

Whereas the above factors lay the foundation for Greece’s market fail-ure, the situation has undoubtedly been exacerbated by the inflexibility of the Troika creditors on issues like awarding Greece debt relief and their relative inability to face up to reality by providing more of the same solu-tions-increasing debt to avoid deal-ing with Greece`s bankruptcy. The ensuing prosperity of economies like Germany which has benefitted by up to 100 billion euros in comparison to the 20 billion euros Greece owes it; the UK and the Us can be linked to Greek crisis, a situation which has positioned these creditors as economic predators in many Greek minds.

The austerity measures accompa-nying the first bailout in 2010 com-pounded the current crisis by hav-ing Greece play in a game they were


pre-set to lose. While these steps to cut government expenditure might have produced a surplus, the fact is that it has been going towards ser-vicing debt rather than stimulating financial activity. This has resulted in a shrinking economy; an effect that has been worsened by the fact that Greece is more of an import than export based economy. This is in contrast to the Asian financial cri-sis in 1997 where the affected nations were able to recover after “bottoming out” because of their export oriented economies.

While most of the tenets of the imF are based on sound economic logic, past experiences of nations in distress in the world financial mar-kets clearly showcase the need for a better sovereign debt legal structure. restructuring such debt should not be left to market forces to play out, since this is theoretical and we do not operate in ‘perfect markets’. addi-tionally, overburdening a country already in default by imposing addi-tional penalties just over-indebts them and worsens the outcomes for both the debtors and creditors.

Proposed SolutionsThe “Grexit”The Grexit – a now popular term referring to the possibility of Greece’s exit of the european Union is one of the more popular solutions endorsed by a number of leading economists and politicians, including former minister for finance Yanis Vourafa-kis who had gone as far as actively planning for it. a Grexit would mean replacing the euro with a new inde-pendent currency-the Drachma. it would have the advantage of giv-ing Greece greater leverage on its financial fate as they would have the option of devaluing their curren-cy and printing their own money. a cheaper currency would make Greek exports cheaper and thus more com-petitive in the international markets.

The Flipside of a Grexit is that banks and companies who have bor-rowed in euros would have a bigger debt burden and possibly go under,

thus necessitating their nationaliza-tion/ government bailouts. There is also the possibility of international lawsuits by these companies if they default on their debt.

Being stuck with the euro has also greatly contributed to the vicious net-loss cycle the Greek economy is stuck in. Prominent economists including, Jeffery Sachs and the former Greek Prime minister Yanis Vourafakis, have presented – backed with sound economic logic and past financial revivals - proposals of setting up a new monetary system based on a new currency, the Drachma. This would effectively allow the Greek economy to “bottom out” to a level reflecting its true economic situation as its government would be able to devalue it and in effect use the for-eign exchange as a tool to increase the competitiveness of its imports. The ability to print money as need-ed would enable the government to stimulate economic activity by bal-ancing supply and demand.

However the problem with this solution is the lack of precedent meaning that a Grexit would be an experiment at the end of the day. For-tunately or unfortunately, the lack of precedence in exiting the eU has caused enough uncertainty in the aftermath that the current govern-ment (elected on an anti-austerity

platform backed by Greek national-ist fervor) has accepted yet another bailout deal that has allowed the eU to postpone Greece’s insolvency.

Lessons LearntOn a positive note, the Greek cri-sis has triggered renewed efforts through the United nations General assembly for an international legal framework to address the restructur-ing of sovereign debt. This will ide-ally create an internationally recog-nized debt management system that will enable distressed countries to restructure their debt without los-ing sovereignty and simultaneously improving their financial stability.

african economists cannot help but see the irony in this as the conti-nent has struggled for decades under unfairly structured and odious debt without the international commu-nity raising so much as an eyebrow. The seemingly endless cycle of debt has been solely blamed on corrup-tion (admittedly high) while over-looking the highhandedness of most international creditors especially those holding debt traded in second-ary markets.

Vulture funds, usually well con-

Greek Prime-minister, adressing the UN general assembly


nected with the political elite of the Western world, take advantage of this international debt setup to thrive at our expense. a good example is the international anglo Leasing bond the Kenyan public paid to a vulture fund for services which were never delivered including a non-existent CiD lab simply because the vultures won the case in a London court.

However, rather than dwell on the past or waste time being smug about the Greek situation, African govern-ments have a golden opportunity to ride this wave of consciousness to restructure their debt. They need to join the current lobby to set up international sovereign debt policies which place sovereign nations at the feet of the imF’s Big Five countries which have a permanent seat on the board.

One of the most relevant propos-als is the Un General assembly’s approval of the proposed immu-nity of states from domestic court decisions to prevent scenarios like argentina and Kenya’s vulture fund debacle. it also addresses the uncon-stitutionality of debts carelessly acquired by irresponsible govern-ments to temporarily shore up politi-cal power at the expense of future generations. The acceptance of such a resolution would effectively free Kenya from the remaining anglo Leasing debt held by other vulture funds.

This is a chance to dismantle the current system which has been shown to increase the economic inequalities between rich and poor countries. While the status quo has traditionally been maintained due to the admittedly credible fears that pressuring rich countries to give up control would result in them simply refraining from funding the imF. as renowned economist Joseph Stiglitz states, “distressed debtors like Greece need a fresh start. excessive penal-ties lead to negative-sum games, in which the debtor cannot recover and creditors do not benefit from the larger repayment capacity that recov-ery would entail.”

as Kenya negotiates its stand-ing in the East African Community, policy makers should factor in the limitations imposed on Greece by the euro. This is especially applica-ble, the country having endorsed the east african Community’s monetary Union through Kenya’s Parliamenta-ry Committee on regional integra-tion in October 2014.

The Kenyan government can also benefit from the crisis by proactive-ly reducing Kenya`s dependence on foreign debt. This can be done by sincerely marshalling the political will to curb corruption, which liter-ally holds back our development rate by wasting funds or even worse using them to prop up foreign economies when the political elite hide stolen money in off-shore accounts. The current government has a long way to go, especially after the distressing and rather sickening results from the national audit reports which show lack of accountability for more than 30 percent of the national budget!

another way to reduce depend-ence would be by tapping the pur-chasing and investing power of the middle class and the bottom of the pyramid. This would involve curbing their appetite for imports and pro-viding incentives like tax breaks for investing in the local financial mar-kets. The oversubscribed Initial Pub-lic Offerings (IPOs) of recent years

revealed the huge potential growth of the capital markets if local investors have confidence in the system.

The subsequent low local invest-ments after the popular IPOs was due to poor market regulation. How-ever, bigger government investments in local investor education aimed at the mwananchi would pay dividends, especially in the local bonds markets which have guaranteed returns.

The fragile balance between polit-ical and financial policies have far reaching effects world-wide. In Ken-ya, this tension is reflected in the often encountered dilemma to trade populist politics with sound finan-cial decisions. a good example is the notorious inefficiency of some arms of government and the perennial need for state owned enterprises to be bailed out.

The inefficiency in firms the gov-ernment has a stake in is often aug-mented by the “Moral Hazard” of anticipated bailouts. The Kenya air-ways, Mumias, Uchumi and Nation-al Bank debacles have brought to the fore the need for enacting strict poli-cies guided by sound economic logic in making decisions in these organi-sations. For instance, the pressure of being seen to enhance job crea-tion by retaining a bloated and over-paid workforce in Kenya airways has been directly contributed to by the presence of Government representa-tives on the Kenya airways board.

To sum it up, what is Kenya’s debt level? Is it sustainable? All things considered, this crisis has been an opportunity for Greece to iden-tify and reconfigure its macro and micro- inefficiencies which have been ignored in the past. The cri-sis has cast a spotlight on the weak-nesses in the country’s economic sys-tems and societal construct at large. In addition, it has provided an ave-nue, backed by political goodwill, to implement change in areas such as the inefficient tax regime and cor-ruption by starkly exposing their long term consequences. Kenya can benefit from this situation by analyz-ing similarities and pro-actively deal-

Let us take responsibility for our own national destiny and vow as the Israelis vowed: ‘never again!’


nvestorsinntegrity

THE IDEAKenya National Chamber of Commerce and Industry (KNCCI) and The Ethics and Integrity Institute (TEII) are partnering on a 3 year non-political program dubbed- Investors in Integrity (3Is) 3Is targets Directors, Managers, KNCCI staff, County governments, and Individual members.

OUR AIM3Is program involves; Voluntary signing of Ethics resolution for commitment to clean business. We endeavour to educate and sensitize individuals and corporate organizations with a guiding thematic statement on ethical business practices countrywide to re-moralising our society. The 3Is aims at raising the bar on how business in conducted, in turn attract investments in the country and sustain businesses. The program will also promote Kenya’s national values and the tenets of effective leadership as stipulated in the constitution.

WHY THIS PROgRAM • Corruption causes Kenyans 250,000 jobs annually.

• Constant media reports highlighting corruption in the country creates concern.

• Presidential State of the Nation Address on 26th March 2015 acknowledges corruption is a national crisis.

• Rising insecurity has been linked to corruption.

• OngoinginvestigationsofstateandpublicofficersbyEACCareavindicationthe vice may deeply rooted.

• Transparency International perception Index 2014 places Kenya at 145 out of 175 countries.

• High corruption levels translate to high cost of doing business and adverse effects on direct investments and business sustainability.

• Constitutional provisions on Ethics and Integrity requires all Kenyans to comply with national values and tenets of leadership.

HOW CAN YOU PARTICIPATE IN THIS PROgRAM ?

Individuals SteponetofiveoftheProgram.

1. Sign into the ethics resolution to commit to clean business. Individual signa-tures to be captured separately, then shared in the media and on respective corporates’ websites.

2. On signing, pay Ksh. 500 as annual fee to Mpesa Paybill No: 502804.

Promoting The purpose of business is to serve society with integrity, profit is the benefit of serving well with integrity

– Robert Mc gregor. Co-Chair, Caux Round Table.


For your love for our county, please sign into the campaign. Be part of the solution, cure our nation by conducting clean business • preventing corruption • preventing insecurity • attracting investors.

3. ReceiveacertificateofassociationwiththeProgram.

4. Receive a lapel pin to designate membership and association with the 3I Program.

CORPORATE PARTICIPATION. 1. Sign into the ethics resolution to commit to clean business(signed by Chief Executive or Head of

the organization)

2. Onsigning,payKsh37,500asannualfee,receiveacertificateofassociationwiththeProgram.

3. Receive 3 copies Quarterly Publication on Integrity Matters

4. Receive a free ethics self-evaluation tool.

5. Highly subsidized bi-monthly training program for your staff

6. Highly subsidized quarterly engagement program for your senior managers and directors

INDIVIDUAL BENEFITS.

• Certificate of association from the institute

• Publication of signatures on relevant website

• Invitation to attend the Caux Round Table Kenyan chapter as a guest

• Individuals can usecertificateforreferrals

CORPORATE BENEFITS

• Certificate of Association from the Institute

• Discount on training campaigns offered by the Institute

• Expose the organization to peer review

• Company to be featured in the Integrity Matters magazine

Kenya National Chamber of Commerce and IndustryHeritan House, Off Argwings Kodhek Road,Opposite Department Of Defence HQs, Hurlingham.P.O Box 47024-00200Nairobi, Kenya

The Ethics and Integrity InstituteKaptagat Road, off Waiyaki way LoreshoP.O. Box 5554-00, Nairobi, KenyaTel: 0736 336 228 | +254 714 501 395 | +254 736 666 340Email: [email protected].


n mAINScOPe

Interview with Dr. Roman Zyla, Senior Corporate Governance Officer, Corporate Governance IFC Environment, Social and Governance Dept.

THE LINK BETWEEN CORPORATE GOVERNANCE AND DEVELOPMENT

Discussions around hunger, poverty rates, child mortality, infectious disease man-agement and education are largely related to development issues and there are cer-tain questions that recur when these issues

arise. The matrices surrounding these discussions con-tinue to remain the measure used to determine the lev-el of development of a country. But as these questions remain constant, the answer to the development question is constantly changing.

The recent discourse about corporate governance has altered the matrices used for development and intro-duced other factors into the issues being discussed. issues such as levels of corruption and governance systems have come into play whenever development is being dis-cussed. Needless to say, more developed states record fewer cases of corruption and higher standards of good governance. The link between corporate governance and development is therefore a definite determinant of the level of economic growth of a state.

Dr. Roman Zyla, the Senior Corporate Governance

Officer at IFC has for decades worked with developing countries to help them streamline their corporate gov-ernance practices to support economic development through financial investment. He says the greatest chal-lenge has been defining the tools and helping nations get the job done in implementing good governance prac-tice. He says, “The questions around development often involve issues such as why people in Third World coun-tries cannot grow enough food for themselves, whether the populations in these countries are too high, inhibiting any chance of improving the resources in those countries or why resources that are present in abundance are not well harvested and used. These are good questions to ask, but the bottom line is that these issues can all be fixed if the governance question is addressed satisfactorily by the governments in these states.”

Only two decades ago, corporate governance meant little to shareholders, company leaders or state leaders. During the wave of financial crises in 1998 in Russia, Asia, and Brazil, the changes in the corporate sector affected entire economies, and deficiencies in corporate govern-


A good legal and judicial systemis important for assuring that the benefits of economicdevelopment are shared by many.ROMAN ZYLA, iFC

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ance endangered the stability of the global financial system. Just three years later, confi-dence in the corporate sec-tor was further threatened by corporate governance scan-dals in the United states and europe that triggered some of the largest insolvencies in his-tory. The most recent finan-cial crisis has seen its share of corporate governance failures brought about by loopholes in financial institutions and cor-porations, leading to serious harm to the global economy, among other consequences. In the aftermath of these events, economists, the corporate sec-tor, and policymakers world-wide recognized the potential macroeconomic, distribution-al, and long-term consequenc-es of weak corporate govern-ance systems.

Today, these discussion stretch beyond the boardroom and have become the nucle-us of economic development. Only recently, His Excellency, President Uhuru Kenyatta recognized the need to streamline the national govern-ment to step up and uphold good governance systems especially within the state parastatals. He passed the Executive Order Number 7 or Mwongozo which in part states that the most important tool for improving corpo-rate governance is to appoint professional boards with well-defined skillsets. It also requires board members to undertake board induction and evaluation and give reg-ular performance reports. This action by H.E. President Uhuru Kenyatta is a clear indication that a strong correla-tion exists between good corporate governance practice and development.

Dr. Roman emphasizes that corporate governance for development must be considered holistically as it not only rests with the board members, but also includes the structures and operations of the companies. “inves-tors looking for an opportunity to input capital or boost a company not only consider the political and economic environment of the country but will also look at the ease of flow of information within the organization and state they are seeking to invest in,” he says. The business case for corporate governance is therefore strong for any state looking to develop because investors will only put mon-

ey in organizations that allow them ease of access of opportunities within that state. If this is stifled, then it means they cannot freely do business. nations that develop also possess a strong willingness to undertake continuous corporate gov-ernance reforms and the indices are con-tinually being improved.

“investment remains the key contrib-utor to development of nations. When considering corporate governance from this perspective, a good definition to con-sider would be one that defines it under the provision of finance. The focus here would be on how outside investors pro-tect themselves against expropriation by the insiders. In this case, corporate gov-ernance can be considered to be con-cerned with how suppliers of finance to corporations assure themselves of get-ting a return on their investment,” says Dr. roman.

Development is more than financeThe role of corporate governance for economic development is also under-stood from a broader perspective, based on other foundations for development,

besides finance. Though the importance of finance can-not be downplayed, considerations around elements of a financial system, legal foundations and competition pro-vide other links to economic development.

The financial crisis demonstrated how lack of a sta-ble financial system can lead to severe risks. Several sig-nificant differences exist among countries’ circumstances and various structural features; institutional aspects may have a direct bearing on the impact of financial develop-ment in the process of economic growth. A mix of finan-cial structures, say large banks and small banks, presents a more conducive environment for growth at a lower level of development. Given the financial crisis scenario, finan-cial systems also have the capability of growing too large and affecting economic growth and financial stability. Secondly, and also important for corporate governance, is the development of banking systems and of market finance. Countries with liquid stock markets grow fast-er than those with less-liquid markets. For both types of economies, growth is higher where the banking system is more developed. Therefore, it is not the financial institu-tions or markets that matter, but more the functions they perform.

Legal foundations are without a doubt also critical

Legal foundations are without a doubt also critical to several factors that lead to higher growth, including financial market development, external financing, and the quality of investment.

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to several factors that lead to higher growth, including financial market development, external financing, and the quality of investment. A good legal and judicial sys-tem is important for assuring that the benefits of eco-nomic development are shared by many. Besides finance and legal factors, competition plays a role in disciplin-ing firms. Markets include all output and inputs such as labor, raw materials, intermediate products, energy, and distribution services. Firms subject to more discipline in the real factor markets are more likely to adjust their operations and management to maximize the value add-ed. Therefore, corporate governance problems are less severe when competition is already high in real factor markets.

As a result, if the four factors are well managed under a clear and well-structured governance process for both an organization and the state it operates in, investors are more willing to put in larger investments into the organ-izations. “Companies with good governance practices benefit from the resources and environments they oper-ate in. These companies have a way of focusing their attention more on the needs of the business and in turn become more effective in what they do. Instead of spend-ing time at board meetings trying to figure out what to do, they clearly state the role of the board and assign it with performance indices, have strong internal controls that are well monitored and overseen by the board. Corporate governance is the development piece. it attracts lower cost of capital and attracts better rates, it promotes more efficient decision-making, higher firm valuation, less vol-atile stock prices, reduced risk of financial crisis, more investment, better relationships with all stakeholders and has more sound reputation,” emphasizes Dr. Roman.

Constraints to adoption of good governanceGood corporate governance practice generally pays

especially for firms, markets and developing countries. Getting them to comply continues to be the bigger chal-lenge. Dr. Roman says the key factor preventing, especial-ly developing states from adopting good corporate gov-ernance practices are the owners and managers and the political economic factors at the market and country lev-els.

Korea has been a case study by many nations for such situations since it undertook drastic legal reforms in the aftermath of the 1997 Asian crisis. Opaque management and rapid expansion of Korean firms were important con-tributing factors to the crisis, forcing the Korean govern-ment to adopt a series of major reforms targeted at inter-nal and external control mechanisms. The government introduced laws strengthening the role of the board and introducing a quota for foreigners. Other policies were aimed at weakening ties among group-affiliated firms

through elimination of cross-debt guarantees, restric-tions on intra-group transactions, elimination of foreign ownership and removal of restrictions on exercising vot-ing rights by institutional shareholders. similar improve-ments in the legal systems exist in China and Bulgaria.

In recent years, many emerging markets have reformed parts of their corporate governance systems. although some reforms have been major and introduced funda-mental changes in capital market laws and regulations (for example, Korea), others, such as Turkey, were only partial. Many countries, for example, have adopted vol-untary corporate governance codes such as the Un Glob-al Pact which is the world’s largest corporate sustaina-bility initiative which and is a call to companies to align strategies and operations with universal principles on human rights, labour, environment and anti-corruption, and take actions that advance societal goals.

Dr. Roman attributes globalization and the world-wide integration of financial markets, combined with limited local legal reforms as the main drivers of this pro-cess. “Corporate governance codes more likely emerge in more liberalized countries with a strong presence of for-eign institutional investors and in countries with weak legal protections, and that civil law countries less often revise and update their codes. it would seem that any country would reform its corporate governance frame-work to achieve the best possible outcomes, but this is not the case for all countries,” he says.

companies with good governance practices benefit from the resources and environments they operate in. these companies have a way of focusing their attention more on the needs of the business and in turn become more effective in what they do.

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In some instances, it is important to understand the origin of a particular country’s legal system, which may stem back from colonization. A legal framework that has been around for a long time still has systematic impact on the present legal systems, judicial system performance, the labor market’s regulation, entry by new firms, the financial sector’s development, state ownership, and oth-er important characteristics. Evidently, not all countries adjust easily to changing conditions and move to better standards to fit their own circumstances and needs.

Reforms happen on many fronts and require a med-ley of legal, regulatory, and market measures, making for difficult and slow progress. Efforts may have to be coordi-nated among many constituents, including foreign par-ties. Legal and regulatory changes must take into account enforcement capacity, often a binding constraint. In these countries, financial markets face competition and can adapt themselves, but they must operate within the lim-its of a country’s legal framework. The novo mercado in Brazil is a notable exception, where the local market has improved corporate governance standards by using voluntary mechanisms — with much success, as seen in new listings and increases in firm valuation but needs to rely on mechanisms such as arbitration to settle corpo-rate governance disputes as an alternative to the poorly functioning judicial system.

“Countries with higher concentrations of wealth show less progress in reforming their corporate governance regimes. Corporate governance reforms involve changes in control and power structures, with associated losses in wealth. reforms must be accompanied by openness and accountability for a country to experience any reasonable efforts in the fight against corruption and poverty. The scenario stifling development in most countries begins at this level because those with the power have the wealth

and are making the decisions for everybody,” says Dr. roman.

Going forwardmuch as the general importance of corporate govern-ance has been established in many organizations and even in states, knowledge on specific issues or channels is still weak in several areas, including: ownership struc-tures and the relationship with performance and govern-ance mechanisms; corporate governance and stakehold-ers’ roles; and enforcement, both public and private, and related changes in the corporate governance environ-ment.

“For example, companies spend a lot more time exam-ining their future. They think about how they will achieve their goals, but in the same breath they do not consider the structures, procedures and who needs to be involved in the conversation to deliver on the vision. in the long run, the wrong people make the right decisions for the company and this then stifles growth. A typical example in many organizations is having the management mak-ing long term goals. This is the role of the board. manage-ment cannot do the long-term goals as they are interested in the short-term business goals. Board members need to be broad in their thinking. management needs to be tech-nically sound and good at the job,” advices Dr. Roman.

“Investors become more confident in a company, with transparent operations and financial statements, which respects its minority shareholder rights as much as its majority shareholders. The cost of capital for well-gov-erned companies remains lower in line with the quality of the risk management process that best practice demands. This development is in tandem with the growing sophis-tication of the financial sector’s development to meet the more complex needs of companies and their investors. That, in turn, improves, for example, liquidity (the ability of an investor to convert an equity holding, for instance, into cash). Investors want choice and flexibility; liquidity is a tool to achieve these goals,” he adds.

In conclusion, Dr. Roman offers, “Performance remains better for companies with high levels of accounting dis-closures and high levels of outside ownership. Corporate governance reforms and investor confidence is a mutual process. Good corporate governance is not just about an impressive architectural set of rules or a system of insti-tutional framework. The critical elements are processes and outcomes. This is not to say that the foundations are unimportant, but beyond that, specific mechanisms have to be implemented to achieve better governance out-comes. Moreover, corporate governance needs to be cus-tomized and tailored to specific businesses. Businesses must also adopt a mind revolution, one that allows them to seek out advice to help them get to the next level.” n

Investors become more confident in a company, with transparent operations and financial statements, which respects its minority shareholder rights as much as its majority shareholders. roman Zyla, 2015.


WATER RESOURCES MANAGEMENT AUTHORITY

The Water Resources Management Authority (WRMA) is the Lead Agency in the regulation and management of water

resources in Kenya. WRMA is a State Corporation under the Ministry of Environment, Water and Natural Resources.

Contact Us

P. O. BOX 45250-00100Tel: 020 2732291, 2729048 E-mail: [email protected] Website: www.wrma.or.ke

“To be a global player in Water Resources Regula-tion and Management”

water resources in collaboration with stakeholders for sustainable

development”

Ensuring equity in Water Resource allocation by Accounting for Every

Drop!

Vision

Our Focus

Mission

Accounting for every drop!

WRMA’s Board of Director, Hon. Grace M. Mwewa OGW, having a drink from the newly opened Kamusa Spring in Lake Victoria North Catchment Area


Q: Parapet is listed top 100 companies in Kenya and is ISO Certified. How do you feel about your

achievements as a company? A We are without a doubt proud of our achievements as a company. Some 17 years ago, I was painting shop windows during school recess for pay and that was the beginning of my life as an entrepreneur. Parapet now has a 17 year heritage of expe-rience, is ISO certificated and has curved a niche for itself as the mas-ter in the art of cleaning. We have recently just opened shop in Uganda and Rwanda, and also creating more employment.

Our grasp of doing online busi-ness is also something we are proud about. We are cognizant of the fact the world is going digital and we are following suit to fit into the global market place and digitalize our oper-ations to become the preferred clean-ing and allied services provider of choice in africa and beyond. There is really a lot to be proud about.

Q Parapet was one of the first com-panies to go into the cleaning and support solutions business in Ken-ya when the profession was not appreciated by many. How did you manage to change the understand-ing of people about the profession?A i began the business when clean-

ing was not considered a glamorous business to venture into, especially in a market that viewed cleaning as non-core, non-essential and definite-ly not a mainstream profession. after completing my hospitality studies in Europe, I realized there was a large-ly untapped market for outsourced cleaning and facilities management. Professional cleaning at the time had not gained root in Kenya owing to the longstanding adage ‘cleaning is and can be done by just about any-body’. i saw an opportunity and real-ized that I had a unique value propo-sition. The company has now grown over the years from a small cleaning service company to the leading pro-

fessional cleaning and allied service company employing over 3,500 peo-ple across Kenya, Uganda and Rwan-da.

Q New and more sophisticated cleaning companies are entering the Kenyan market every day. What remains your novelty and how have you maintained it over the years?A The key to remaining ahead of the game and maintaining a competitive edge is adopting new and innovative trends globally, constantly sourcing for new ideas, technology and equip-ment. Our services are also custom-ized and tailor made to suit indi-vidual and corporate needs which range from hospitals, hotels, schools, embassies and foreign missions, businesses, banks and right down to individual clients.

As Parapet Group we commission quarterly surveys to understand the ever changing dynamic market. This data is used to guide and inform the strategic objectives of the business to not only compete on price, but also have a great, wholesome brand that offers value for money. We also have a customer reward and loyalty pro-gram that allows clients the flexibil-ity of redeeming points for services they procure, giving clients comfort in knowing their business is valuable to us.

IN A CUT-THROAT BUSINESS, PARAPET THRIVES ON A CLEAN, ETHICAL IMAGE

n THe ceO

InTErvIEw with ALEX nYAGA, CEO PArAPET GrOUP


Q What are some of the major challenges you continue to face in your business today?A The general perception of clean-ing services is that some people find it quite preposterous to pay premium prices for professional services and prefer domestic help or independent car washes for example. But like any other business, people are the great-est investment you can make as an entrepreneur and you have to take good care of your employees for busi-ness continuity.

i saw the opportunity to bring together a consortium of profes-sional cleaning services through the establishment of a Cleaning Compa-nies Association - The Kenya Profes-sional Cleaners Association (KPCA) to standardize service quality, pricing and employee remuneration due to the expansion and growth of the pro-fessional cleaning services sector to deal with some of these challenges.

Q Your vision is to be the leader in cleaning and support services in Africa and beyond. How do you benchmark with the rest of the world?A We have an affiliation and mem-bership of the international service Standards Association (ISSA) and the international Detailers associa-tion (IDA) which allows us to be a true world class business. The les-sons learnt and shared through these partnerships enables Para-pet to have the right Team, Tools and Technology by benchmark-ing itself against global standards.

Q Green cleaning and Green ener-gy are a widely discussed topic globally in relation to global warm-ing. In your business, you use chem-icals and a lot of energy to do a squeaky clean job. What is the com-pany doing to ensure it is protecting the environment in its daily opera-tions?A i am passionate about the com-munity and the environment in which we operate in. i understand that his business has both a negative

and a positive impact on the environ-ment and for this reason, I am closely engaged in sustainability activities.

In 2013, the Parapet Group of Companies started Parapet Energy in response to the fact that the coun-try is generating more waste with-out adequate disposal plans. This was another opportunity for us and we immediately launched efforts to bridge the gap. Whilst this was a new concept to the cleaning business and indeed in many parts of Africa, we took the opportunity to educate the public on the advantages of envi-ronmental conservation through the common re-duce, re-use, re-cycle and recover mantra.

This is the first step in our sustain-ability project as we hope to one day see our vision of carrying our waste management education in schools achieved as well as pushing for leg-islation around waste management through an act of parliament among other projects.

Ultimately, waste management and protection of the environment is the responsibility of every indi-vidual and Parapet is on the verge of a new era which will see us revo-lutionize not just the way we handle waste from our clients but also how the community coexists with their

immediate environment. Being a labour intensive organisa-

tion, we believe that the heart of the business revolves around our people, their families and their communi-ties. it would only be natural then for our social responsibility initiatives to revolve around empowerment of people and ultimately, environmen-tal preservation.

Q With a workforce of over 3,500 employees, what structures have you put in place to ensure they uphold the highest ethical stand-ards?A All Parapet group staff undergo mandatory training, infusing Par-apet’s corporate culture, which is focused on world class customer val-ues, general conduct and cleaning techniques, in which ethics plays a central role.

As the CEO, I also believe in run-ning my business with utmost integ-rity. i even have a board of directors that puts checks on me as the CeO and owner of the business. i also expect ethical behaviour from my staff. We train them and offer coun-selling in the event of an incident but they know it is a norm at Parapet and they must adhere to the expected standards.


as the world is drawn closer by technology and easier movement of people across bor-ders, organizations have found themselves under pressure to reinvent and conform to emerging issues.

Globalization increasingly presents boundless oppor-tunities for businesses and non-profit organizations to propagate their interests, with new communication channels allowing contact among people in diverse cor-ners of the world.

Technology, principally the Internet and mobile phones, has constricted the globe to a mere network within which information flows at real-time speed. Tra-ditional modes of information sharing have, thus, been largely relegated to the shelf, with only occasional use and reference. Some, like the fixed line telephone, are on their deathbed.

This in turn demands that organizations be in a state of flux, constantly evolving to align to the new environ-ment. In particular, they must aspire and seek to attain the best standards and practices so as to compete and sur-vive in a borderless market place.

For Human Resource (HR) practitioners, the pres-sure is even greater to ensure the firm’s survival. A widely accepted principle is that an organization’s key asset is its workforce, without which it would not be able to achieve its mission. As such, HR professionals are a core artery of the organization in their oversight of the employee.

But this role has not always been acknowledged and has only assumed greater recognition in recent years. Hr managers had for many years struggled to rise beyond the ‘support’ tag, with the office holder usually consigned to a desk in other departments. This was largely a prob-lem of their own making, mostly due to lack of interest in other areas of the firm outside HR, such as commercial activities.

Being advisory rather than line managers, HR prac-titioners were also deemed to be of lesser significance when it came to influencing the firm’s production.

However, advances in technology and processes mean that various departments within the organization are more interdependent than ever before. The efficiency of the finance department may depend on the HR depart-ment providing competent staff and analysis of attendant costs. Hr managers have also come to appreciate what impact their role has on the financial health of the organ-ization.

Today, the HR role has finally got its due. In many organizations, HR leaders are accorded a seat on the com-pany’s board of directors—a tacit nod to their key contri-bution to the institution’s welfare. Indeed, some major decisions cannot be made without the input of the Hr team leader as they have huge ramifications on the firm.

Currently, a number of HR professionals serve as chief executives at some of Kenya’s top corporate and public institutions, having risen through the managerial ranks.

n SecTOr IN FOcUS

Why HR mangers must adapt to a changing world

B Y S A M S O n O S e R O

A comentary on the link between pension and governance


With this recognition, however, has come increased spotlight on the performance of Hr managers. in almost equal measure, there are pro-ponents and critics of Hr manag-ers—those who view them as com-petent professionals and others who consider them performing below par. There are reasons for this dispar-ity in perception of the profession, especially when seen in light of some of the key functions of the Hr man-ager.

One perennial and steamy issue in Kenya is recruitment, especially into public service. The Constitution enacted five years ago, provides for greater scrutiny of the recruitment process, more so in senior positions, to ensure equity and fairness. It sets out the steps to be followed, includ-ing vetting by various constitutional bodies and Parliament, and also out-lines grounds on which candidates can be disqualified for appointment.

More importantly, the Constitu-tion demands that public appoint-ments take into account gender and regional (ethnic) balance—with the express requirement that no more than two-thirds of one gender can hold positions in a public institution. Even within organizations that are not public, the need for gender and cultural balance is increasingly being emphasized.

In reality, though, many organi-zations fall far short of this require-ment. One of the reasons for this could be lack of initiative by the man-agement; a “why change as long as what we have is working?” mental-ity. Others could be that fulfilling the requirement presents challenges of finding suitable candidates—do you pick someone who is not qualified for the job just to adhere to the regu-lation?

This is a new dilemma for Hr managers, but which they must sur-mount; for instance, through empow-erment by training. They can identify potential employees from the minor-ity regions who can then be put on accelerated training programs for future promotion.

The danger posed by the new legal dispensation is that corruption and nepotism can flourish in the guise of affirmative action. Already, there are claims that leaders of counties have engaged in massive recruitment of relatives and friends to positions held by “outsiders” who are forced out. This, though, is mostly done against recommendations by Public Service Boards in the respective counties, whose role is usurped by the execu-tive.

Lack of executive power notwith-standing, HR leaders should strive to push through policies that enhance equality and just recruitment pro-cesses in the institution while ensur-ing they have the right skills.

One way that organizations can ease their recruitment process is through internship. management should appreciate that internship programs can be handy as a year-round recruiting tool, whenever vacancies arise. They enable organi-zations save on the ever rising recruit-ment and selection costs and provide an ongoing pipeline of future full-time employees. since the interns are “on test” the interns, organizations

will have an opportunity to choose the best from those available.

While there is no doubt regarding the benefits likely to be reaped from such programs, the challenge has been how to institutionalize them. There have been cases where they form the agenda of management meetings but the concept does not sail through.

Cases abound of the new employ-ee who made a great impression at the interview but later did not “fit in” the team or corporate culture. This realization after the event would be limited if the organization first hired someone as an intern to evaluate their potential for fulltime employ-ment. it is a way of reducing mis-takes when it comes to making deci-sions on employing fulltime staff. Organizations that have embraced internships would soon become the employers of choice, most sought after by highly talented graduates with talent.

Many organizations continuously seek new businesses by expanding abroad, either by setting up new units or buying stakes in those already established in the target countries. This creates a new pool of employ-ees who may require integration into the company’s culture and presents a challenge for those organizations with no defined culture.

A progressive HR manager, how-ever, takes this opportunity to imple-ment a convergence strategy, especial-ly riding on the rapid technological development. Training programs can be structured and delivered through the Internet to all, ensuring stand-ardization and time optimization.

We also see companies that are able to operate seamlessly across borders just as if all the units are in one location through shared services. The core Hr team could be based in Nairobi, for instance, with only one officer at outlying offices. This again ensures uniformity of decision-mak-ing in line with organizational regu-lations as well as saving costs.

Which leads us to another issue—remuneration. employees expect

Organizations that embrace internships soon become the employers of choice, most sought after by highly talented graduates with talent.


that they will be compensated ade-quately, on time for the work done. But in Kenya, in 2015 alone, there have been not less than three indus-trial strikes in different employment sectors over salaries. some have complained of low pay that is not commensurate with their qualifi-cations, while others have a grouse with delayed salaries running into months.

In such situations, fingers are inev-itably pointed at the HR office, with employees venting their anger on the managers who they consider not keen on their welfare. There have also been reported cases of employ-ees with similar roles and qualifica-tions earning hugely disparate wag-es.

These charges call for the Hr manager to examine the underlying causes and recommend viable solu-tions. Rising costs of living, not only in Kenya but globally has increased the strain on employees to meet their obligations, and thus the clamour for more pay to reduce the gap. Busi-nesses, on the other hand, have to confront rising costs in order to stay afloat. The manager always has to seek a balance between the employ-er and employee, where both enjoy a mutually beneficial relationship.

But while the HR manager may, indeed, seek to increase pay, the

circumstances of the individual employer may constrict the leeway to make that decision. Unfortunately, HR managers have to always fight the perception that their role is a “cost”, and their recommendations may encounter resistance before being implemented—if at all.

Ultimately, though, the HR pro-fessional must strive for high ethi-cal standards regardless of the situa-tion. some bend the rules and even stretch the boundaries of humanness to please the employer at the expense of the employee, or for their own per-sonal gain, but in the end they lose.

The enactment of the Human Resource Management Profession-als Act, 2012, particularly raises the bar for those in the practice. The law gives the institute of Human resource management the man-date to regulate the industry through examination and licensing, among other responsibilities. it also ngave the profession a new face because previously, almost anyone could practice, even without relevant aca-demic qualifications or experience.

Further to that, the institute’s launch of the rules and Code of Conduct for Hr professionals in august 2015 laid out the expected ethical standards for anyone quali-fied to practice, and is expected to weed out quacks. It spells out rules

for professionals, putting weight on the need for scaling up their skills to boost competence levels.

But rather than a “sword of Damo-cles” hanging over Hr managers in their daily operations, the code is a guide to help them address employ-ee-employer relations as well as pro-mote talent development in organi-zations.

Looked at in the context of gen-erational “disharmony” in the work-place, the HR manager is now hard-pressed to accommodate the views and needs of the different ages while at the same time increasing the organization’s productivity. HR managers now have to contend with increasingly younger employees whose work ethic do not conform to traditional expectations.

Again, technology is the cause here. Tasks can be accomplished out-side the office through e-mail and mobile; and social media platforms such as Facebook and WhatsApp are in many organizations now accept-ed as formal communication chan-nels. Some companies, such as Inter-net giant Google, have flexible hours and informal work settings for their employees in a bid to increase crea-tivity and output.

This approach might not work in every organization due to the com-plexities of its own operations. it could lead to disruption and lower productivity, contrary to what was expected. The relaxed environment could also grate the old hands the wrong way. But, even with the desire to keep things as ‘normal’ as possi-ble, we cannot keep the door closed against the tide forever.

it is a changing world and organ-izations must adapt to the times. As drivers of change, HR professionals have to correctly read the situation—locally and globally—and be brave to implement appropriate policies and strategies. n

samsOn OserO is executive Director, Institute of Human resource management


TRAINING CALENDAR MAY – DECEMBER, 2015

PROGRAM DATES VENUE

Alcohol and Drug Abuse 27th – 29th May Bontana Hotel Nakuru

HIV/AIDS 24th – 26th June Tom Mboya Labour College - Kisumu

Gender and Disability Mainstreaming 19th – 21st August Sirikwa Hotel - Eldoret

Environmental Sustainability 26th – 28th August KIE - Nairobi

Records Management 9th – 11th September KIE - Nairobi

Occupational Safety and Health 10th – 12th June Jumuia Hotel Kisumu

Minute taking, Report Writing and Communication 23rd – 25th September Tea Hotel – Kericho

Executive Secretarial Course 6th – 9th October Bontana Hotel Nakuru

Strategic HR Management 4th – 6th November Mombasa Beach Hotel

Risk Management 2nd – 4th December Reef Hotel - Mombasa

Customer Care 28th – 30th October Sirikwa Hotel - Eldoret

Board Evaluation 21st – 25th September Crown Hotel - Arusha

Balanced Score Card 25th – 27th November Utalii Hotel Nairobi

Finance for Non-finance Managers 21st – 23rd October Reef Hotel Mombasa

Procurement and Tender evaluation 16th – 18th September Sunset Hotel – Kisumu

PROGRAMS FOR COUNTIES

Records Management 9th – 11th September KIE - Nairobi

Legislative Drafting & Audit 1st – 4th September Reef Hotel - Mombasa

Hansard Editing 25th – 28th August Silver Springs Hotel - Nairobi

Procurement and Tender Evaluation 16th – 18th September Sunset Hotel – Kisumu

Serjeant-at-Arms Training 25th – 28th August Mombasa County Assembly

Ward Strategic Planning 23rd – 25th September KIE - Nairobi

Librarian Training 9th – 11th September Bontana Hotel - Nakuru

Report Writing 23rd – 25th September Tea Hotel - Kericho

Strategic HR Management 4th – 6th November Mombasa Beach Hotel

Secretarial Training 6th – 9th October Bontana Hotel - Nakuru

Customer Care 28th – 30th October Sirikwa Hotel - Eldoret

MCA’s Mid-Term Retreat 24th – 28th August Crown Hotel Arusha

Board Evaluation 21st – 25th September Crown Hotel - Arusha

OThER PROGRAMS

Surveys/Audits

• Payroll Management• Fire Marshalls Training• Defensive Driving• Job Evaluation• Change Management• Performance Management• Interviewing Skills and Recruitment

• Gender Baseline Survey• HIV/AIDS Baseline Survey• ADA Baseline Survey• Skills Gap Analysis• Competency Index Survey• Customer/Employee Satisfaction Survey• Work Environment Survey• Corruption Risk Analysis• Corruption Prevalence Survey• Safety Audit

Contact us;Institute for Capacity Development (InCAD), Cooper Centre – Kaptagat Road – Loresho

P. O. Box 2521 – 00621 Nairobi: Tel 020 2373828, 0725 851063, 0789 702582E-mail: [email protected]; Website: www.incad.org

mailto:[email protected]


as the world’s great-est Industry, Tourism involves a wide range of practices, more often than not touching on

key values of traditional versus mod-ern life. Accordingly, ethical and moral concerns of modernity and modernisation are reflected in Tour-ism, thus kicking in ethical and mor-al challenges.

From a purely business perspec-tive, the Hospitality and Tourism industry is based on economic values of benefits, profit, cost, price, efficien-cy and competition, with a highlight on the financial bottom-line. Key to the gains from Hospitality and Tour-ism is the number of tourists visiting a destination. For Kenya, the Indus-try is one of the top foreign exchange earners, and is crucial to the econo-my – it contributed 12% of the Gross Domestic Product (GDP) in the last financial year. On the flipside, how-ever, for the Industry to maximize on profits, there may exist some degree of inequity in the socio-economic aspects, environmental erosion and general imbalance in human lives and natural resources. The vulner-able nature of the industry is another facet in the profitability of the Indus-try – the Industry peaks and drops easily due to external factors such as travel advisories, strategic marketing and simple word of mouth, in this

case including social media. Hospitality and Tourism have a

wide scope of influence, and a cor-responding wide and varied nature of stakeholders who must all par-ticipate in an endeavour to have a responsible Industry. Governments, businesses and communities must do all they can to ensure the indus-try maintains a high level of integrity. A major contribution however, needs to be from the visitors themselves, by not only being open minded to oth-er cultures and traditions, but also respecting human rights and the nat-ural resources in the destination.

In the midst of intensified compe-tition from other tourist centres espe-cially in Asia, maintaining an envia-ble reputation as a destination of first choice by tourists is not easy for the industry in Kenya. as the country works on enhancing its tourist attrac-tions and improving the tourist facili-ties, it is important to invest in the Industry staff for higher quality of service, professionalism and integri-ty. ethical leadership should be at the top of the Hospitality and Tourism agenda. High ethical standards help to attract and retain the best employ-ees and professionals. The profes-sionalism and quality of services offered by these honest practitioners will subsequently build the tourists’ confidence in Kenya and keep them coming in and returning back. such

an investment can ultimately con-tribute to better financial returns to the providers of goods and services in the Industry, and the national econo-my at large.

The investment in staff and in good leadership in the industry is at the moment a preserve of a few top institutions only. The majority of the players are dependent on quick-ly introduced and speedily inducted staff to the Industry. The need for the industry players to look at some of these realities on the ground in order for them to establish the form and direction that the Industry, and in essence, the key players and the country at large, will take in future. The industry at the management lev-el must hold and practice some basic principles for an ethical industry to thrive. These include commitment, integrity, loyalty, fairness, honesty, trustworthiness and respect for oth-ers. Both public and private stake-holders in the Hospitality and Tour-ism industry should co-operate in the implementation of high principles and evaluate as well as monitor their impact and effective application. It is important that all stakeholders have a unity of purpose and a unified plan of action so that they can pave way for further breakthroughs and win the hearts of tourists and the support of Kenyan people.

A private game ranch on Kenya's Laikipia Plateau, complete with genuine hospitality and masses to occupy your time (naturalhighsafaris.com)

n SecTOr IN FOcUS

Ethics in the hospitality Industry: Where is the dividing line?

BY RO S E N G I N A


Kenyan and global Hospitality Industry ethical casesBusiness ethics is the meeting point between the moral and econom-ic aspects of the business. needless to say that the Hotel and Tourism industry is facing a variety of chal-lenges worldwide and Kenya is not an exception in this crucial sector. in a situation of intense competition, declining business travel and ongo-ing economic recession, the chal-lenges serve to further aggravate the situation.

a combination of these factors has encouraged questionable and uneth-ical management behaviour, exam-ples of which include gift offered to hotel employees on behalf of the organization, acceptance by hotel managers of bribes to avoid losing lucrative business, discrimination by guests as they may request to be attended to by employees of a certain race, colour or religion.

restaurant managers may can-cel confirmed table bookings due to offer of bribes, or pressure from cus-tomers known to them, in advertising

some hotels may provide informa-tion of both written and photograph-ic nature, that is highly variant to what is on the ground, instances of last minute and unjustified cancel-lation of tours and other bookings , sometimes against the enterprise’s own cancellation policy, facilities, services and compromised quality of food may not provide value for mon-ey and a ‘hidden cost’ strategy is at times used to attract customers.

Other examples include bribes given to accelerate work by govern-ment officials or to conceal the truth where there is wrongdoing, poor time management, money earned in Tourism is repatriated to foreign companies, and local big companies. The tourism industry has led to dis-placement of local people from their lands to create national parks, hotels, lodges and other facilities and there has been damage of natural resourc-es like corals reefs.

All these, and others are cases that need ethical judgement, which the current Hospitality and Tourism industry situation may only beg for and not realise fully.

Industry governance and regulationAt the global level, there is a funda-mental frame of reference for respon-sible and sustainable Tourism, the Global Code of ethics for Tourism (GCET). This is a comprehensive set of principles designed to guide key-players in Tourism development. Addressed to governments, the trav-el Industry, communities and tour-

business ethics is the meeting point between the moral and economic aspects of the business.


ists alike, it aims to help maximise the sector’s benefits while minimis-ing its potentially negative impact on the environment, cultural heritage and societies across the globe. The code was adopted in 1999 by the Gen-eral Assembly of the World Tourism Organization, and acknowledged two years later by the United nations. Although not legally binding, the code features a voluntary implemen-tation mechanism through its recog-nition of the role of the World Com-mittee on Tourism Ethics (WCTE), to which stakeholders may refer mat-ters concerning the application and interpretation of the document.

The GCeT Code has 10 princi-ples that cover the economic, social, cultural and environmental compo-nents of travel and Tourism in its arti-cles. Under these guiding principles of the Code, GCET leads and directs the international Tourism communi-ty towards the practical implementa-tion of the ethical norms and respect for moral values in the sphere of trav-el and Tourism.

In Kenya, the Kenya Associa-tion of Hotel Keepers and Caterers (KAHKC) has established a code of ethics for its members in order to make Kenya a tourist destination

of choice. Founded in 1944, KAHC is the principal umbrella organiza-tion bringing together hotels, lodges, restaurants, membership clubs and prominent airline caterers whose common theme is to render services in the Hospitality industry. its mem-bership, which consists of mostly star-rated hotels, restaurants, cater-ers, lodges and tented camps is a pointer to its placement locally and internationally, giving it a role to play in ethics in Tourism and Hospitality in Kenya. Liaison is provided by rel-evant government organs, including the ministries of Tourism and infor-

mation, Trade and Industry, Finance, and Labour and manpower Devel-opment, giving a voice to member organisations, hence a say in the gov-ernance of the industry and the reg-ulation of the same.

Other local bodies, Government and non-Government, contributing to the Industry’s ethics are the Kenya Tourist Board, Kenya Tourism Federa-tion, Federation of Kenya Employers, The Hotels and Restaurants Author-ity, Kenya Utalii College, Catering and Tourism Development Levy Trus-tees, Mombasa and Coast Tour-ism Association, Coast Development Authority and other forums. All these bodies have specified roles to play, and fall under the umbrella body of KAHKC, giving the latter a wide scope of influence in the Industry.

Impact of ethics in the sectorBusiness ethics is an integral part of business conduct. It is a field of two different perspectives: moral or ethi-cal and business or economic per-spective. The two perspectives inter-act to influence behaviour, in this case the direct and indirect stake-holders of the Tourism industry. each individual in the industry has behaviour aspects that they bring into organizations, and impact on the organization culture. Many organisa-tions in the Tourism industry either do not have an ethical code of con-duct, or do not apply the same appro-priately or both.

The level of responsible Tourism and Hospitality management in Ken-ya is reflected in personnel conduct and behaviour in the industry. Being satisfied with one’s job increases staff productivity and innovation and reduces turnover rate. Unfortunate-ly, the level and extent of the code of ethics is still low in the Industry, thus giving room for unethical behav-iour. an assessment of the level of job satisfaction in the Tourism and Hotel Industry does not reflect posi-

business ethics is an integral part of business conduct. It is a field of two different perspectives: moral or ethical and business or economic perspective.

Villa Rosa Kempinski (ejazatgroup)


tively on the jobs, especially due to their temporary nature and low lev-el of remuneration. With these ele-ments at play, it is still the conduct of employees in Hospitality and Tour-ism, and all the other actors who par-ticipate indirectly in the industry in Kenya thus contributing to creating a favourable image of the country in domestic and international markets.

In that sense, ethical conduct and respect of the code of ethics is the basis for acquiring a good image and improving the tourist product in Kenya. employees who work in an ethical environment tend to be more satisfied with their job and more loy-al to their employers than their coun-terparts who work in an unethical environment. Leading by example is key for all managers and business leaders in the Hospitality and Tour-ism industry.

While there has been some emphasis on ethics in the Hospital-ity and Tourism industry in Kenya and elsewhere, the amount is dis-proportionate to the importance of the issue, and some players are left wondering if this goes to show that the ethics question is not seriously taken in the industry. needless to say that the Tourism industry can ben-efit from conducting their business in an ethical and more responsible manner and reap from the benefits of good ethics should they chose to go in this direction.

The Hospitality and Tourism industry is characterised by intangi-bility, making it not only sensitive, but also vulnerable to external influence and negative perception. manage-ment must therefore attend to ethical issues in this industry more careful-ly than the practise in other indus-tries. Even though organizations spend large amounts of their budg-ets to build a positive public image, that money is soon wasted when the organization’s unethical practices are reported – as usual bad news spreads

very fast. Companies with high levels of ethical values and social responsi-bility tend to be more profitable than other companies. This clearly shows that Hospitality and Tourist organi-zations can benefit from conduct-ing their business in an ethical and more responsible manner. The more responsible the management, the more loyal and more productive the employees tend to be, and the more profitable the organisation. Ethical

leadership is directly related to good returns, even if at times not propor-tionately.

Business leaders should be mind-ful of instances of temptation faced by all levels of staff members and must be vigilant to prevent any mal-practice or corruption from taking root. a single incident of corruption can ruin the hard-earned reputa-tion of the Hospitality and Tourism Industry in Kenya, and would lead to a heavy price for the industry to bear, as it could result in the loss of a company’s business and profits, loss of competitiveness in the Industry, loss of jobs in the workforce, loss of trust by tourists and loss of revenue for Kenya’s economy. it is important that industry managers make every effort to lead by example and put eth-ics into practice.

Despite the good guidelines and local and global oversight in place for Kenya’s Hospitality and Tourism Industry, the question that begs for an answer is: How well is the indus-try doing in following these through?

ROSE NG'INJA,rose ng'inja is a hospitality ******

A single incident of corruption can ruin the hard-earned reputation of the Hospitality and tourism Industry in Kenya. It is important that industry managers make every effort to lead by example and put ethics into practice.

Wigot Gardens Kisumu


BEYOND COMPLIANCE

sOCiaL meDia Has raised several questions in the field of education that did not exist a decade ago. Many teachers use social media as a means of communica-tion with their students, such as tweeting out remind-ers about homework or classroom happenings. students can choose to follow these accounts if they would like the updates, but are not required to.

Teachers have a professional obligation To develop and maintain professional relationships with learners based on the best interests of those learners. a teacher who is both aware of social media and a competent and confident user will be a role model for their learners and encourage them to become good digital citizens.

Victor is a hardworking disciplined outgoing Form three student at Bahati Academy. Victor comes from a seemingly well off family as reflected in the posh cars that drop and pick him from school an indicator of afflu-ence. Victor readily offers a helping hand whenever a need arises making him a favorite student among both the student community and teachers, hes also obedi-ent, respectful and friendly. Unfortunately Victor’s Dad has gone missing through unclear circumstances. …. in a bid to help Victor recover from the trauma of his miss-ing Dad, Ms Mwema the school Computer teacher cum school Guidance and Counseling mistress took it upon herself to “ walk Victor” through this tough time.

During this process, Ms. Mwema emailed and texted Victor’s cell phone using her personal email address/cell-phone. At first, the exchanges were very general; focused on encouraging Victor not to lose hope but stay focused in charting his destiny. Recently, the student began to text her teacher about more personal feelings. in the pro-cess Victor revealed sensitive information; he informed ms. mwema that he had been concerned about his Dads business operations which mostly took him away from his family. He was not sure of his Dads exact office as he seemed to operate three different offices. When he once

asked his Dad why he rarely stayed with the family he explained that he occasionally has to do “sensitive work”. Victor also noticed that his mum was not exactly “hap-py” but tried to “put up a face”- an issue which bothered him. a week before his Dads death he recalls seeing three peculiar looking visitors who briefly attended his young-er sister’s birthday. They came in, sat briefly with his Dad talking in low tones. As they departed Victor recalls see-ing something bulging out of one of the visitor’s side- it looked like a gun… he was scared but stayed quiet. His Dad later left for undisclosed destination.

The following day- a Sunday morning, two armed rob-bers were stoned to death (mob justice) as they attempt-

n HAVe YOUr SAY

These are real life ethical scenarios being experienced by our readers in various parts of the country.

B Y j . S . O G O y e


ed to rob a bank at the shopping Centre 500metres from where Victor stayed with his family; two others escaped with gun wounds. Victor and his siblings went to see what had happened and who the thieves were out of curiosity. Victor noticed that the two were among the three visitors who briefly attended his sister’s birthday party the previ-ous day, talked to his Dad and left…!!! It dawned on Vic-tor that his Dad was possibly an armed robber as he was a very reserved person, mostly operated at night, frequent-ly changed cars and conveniently had several cellphone numbers, occasionally had lots of money like he had just won a lottery and never allowed his wife and children to mingle.

As Ms Mwema read this email she was shocked, she called Victor who revealed to her more incriminating information. He then became withdrawn after reveal-ing information that is too personal, sensitive and more-so information that could expose his Dads criminal life to Ms. Mwema. He was aware of probable consequences of his Dads arrest or even death. For instance, the fam-ily might be perceived as accomplices to his crimes, their income would be adversely affected as their Dad was the family lifeline- their mum was a housewife and they had all been isolated from relatives. He also risked being dis-criminated against by his siblings and his mum (he was not sure whether or not she knew of his Dads concealed source of income).

ms. Bahati is also in a vulnerable position: Lots of dif-ferent ethical issues arise from teachers having social media contact with students. Teachers have a profes-sional obligation to develop and maintain professional relationships with learners based on the best interests of those learners. a teacher who is both aware of social media and a competent and confident user will be a role model for their learners and encourage them to become good digital citizens. As far as teacher and student inter-action goes it seems ethically wrong for them to interact on social media because it is outside of the educational environment. In light of this Victors family can accuse her of behaving inappropriately. although the communica-tion with Victor may be well intended, how the messages may be translated by others who may be privy to them (friends, parents, siblings etc.) can greatly vary

ms. mwema has an obligation to report anything that may cause fear or harm and or put a student at risk. if Victor reveals personal information that may put him in danger, Ms. Mwema has an obligation to report it to the appropriate authorities. The community has an expecta-tion that a teacher will behave in a professional manner. ms. mwemas involvement with a student on social media may be viewed as unprofessional and leave her open to possible claims of misconduct with a student.

As the Chairperson of Board of Management of Bahati Acade-my this incident is brought to your attention- how would you address it?

THE LOYAL WIFE

FaiTH is a middle aged committed 32 year old Christian mother of two. she is a tutor in a college and occasionally has to do part time teaching to supplement her income. Faith is from a war torn country and is an orphan as she lost both parents and all her siblings in the war. she was taken in and educated as a refugee. she eventually met and married sam a 32 year old mechanic who’s educated up to Form level after which he obtained a certificate in mechanical course. Much as Sam suffers from inferiority complex, Faith is determined to put up with him as she barely has an option and has been yearning for family life. she’s is the loyal wife. Furthermore sam comes from a community where women are considered to be inferior, they are expected to be submissive and “have no voice”- they are “to be seen and not to be heard” much as they have a house help, Sam expects Faith to cook dinner, do home-work with the children and put them to sleep regard-less of whether she’s working late or not as she’s remind-ed that her first obligation is that of being a wife and a mother. Any delay in this earns her a beating, a situation she avoids as it negatively impacts on her and might cost her job. shes also adhering to her marriage vow “for bet-ter, for worse” and keeps hoping that things will one day improve.

as a teacher to one of the couples’ 5 year old child you observe the development delays in the young boy; the for-merly vibrant boy has suddenly become withdrawn and is occasionally antagonistic. The mother alludes this to the father being abusive. in talking with others who deal with the mom, you have been made aware of the domi-nance of the father and his family.

Talking to Sam about this situation will definitely earn Faith a thorough beating and probable termination at work as the man’s word is considered “law” in this com-munity. Leaving things as they are might also compro-mise the future of the young boy.

As a concerned educator how can you support Faith and her son without causing upset in the family relationships?


n KNOWLeDGe ZONe

The United Nations Global Goals for Sustainable Development:Introducing a new age for a more secure and fulfilling human prosperity.A white paper call to action, Bangkok, Thailand september 2015

BY R O B E R T M A C G R E G O R & T u N k u A B D u L A z I z I B R A h I M

Preamble

it is widely agreed that the world is at a major inflection point. We are passing from an age of change to a change of age. We face grave threats to the health

of our planet and all it’s socioeco-nomic, political, and cultural sys-tems. Our current course is unsus-tainable.

But to change course, we need a new mindset that replaces the quest for dominance with the values of stewardship, especially in business. We need to learn to live sustainably.

Our world can not become sus-tainable unless business delivers innovation, technology, finance, and leadership for shared prosperity. Furthermore, business and finance — in short capitalism — cannot succeed in the coming age of stew-ardship responsibilities without forg-ing mutually beneficial partnerships with governments and civil society.

The Caux round Table is com-mitted to this cause and the task of achieving the proposed sustain-able development goals. We rec-ognize that the proposed 17 global goals to be presented to the Gener-al assembly of the United nations are only aspirational statements of

desired real outcomes. it is vital that practical assess-ment be made from the outset of how they are to be achieved. The CrT has therefore already convened a series of 20 round tables in different cities around the world in order to gath-er insights and concerns about the practical imple-mentation of the goals. The Caux round Table is fur-ther committed to assisting through the years ahead with the process of practi-cal assessments that will be needed to monitor progress and fulfillments.

The Necessity for Government, Business, and Civil Society to Work Together Humanity must now choose between the relent-less pursuit of growth for growth’s sake and, alterna-tively, a new era of steward-ship and resilient balance. Unrelenting compound growth cannot be sustained without eventual consump-


tion of our very planet itself. The bet-ter course must be to wisely use the resources of our world sustainably and equitably for the greater good of all.

This will require that we step back from the quest for mastery over, and exploitation of, others and our envi-ronment. We must step up to address effectively dangerous imbalances brought about by the extreme accu-mulation of wealth, with consequent power, by a very few.

New bonds of cooperation, mutu-ality and partnership, must be forged which accord with ancient wisdom that humanity’s prosperity must be sought in flowing harmony with a natural order of people and things. such collaborative stewardship will give us more immunity against our

self-destructive tendencies. The proposed United nations sus-

tainable Development Goals (SDGs) provide a pathway for achieving this but to so progress, we must embrace new paradigms and mindsets as the global community comes together to embrace its responsibilities.

Governments, business, and civ-il society will need to embrace fully the fact that their prospects are inter-related and interdependent. none can be a power unto itself — autono-mous from considerations of ecologi-cal and community well-being. and none can subordinate ethical and moral values to short-term or paro-chial interests.

The domains of politics, econom-ics and religion, as well as individual and personal commitments, must all

cohere in new ways if we are to find the values and resources needed to forge this new age of steward-ship. For only thus, can the found-ing mission of the United nations be achieved which is to “promote social progress and better standards of life in larger freedom.”

The actions needed for us to live sustainably with our planet and our neighbors must therefore flow first of all from our values and beliefs and our moral sense of what is right and fitting. For the benefit of future gen-erations, we are called to be good stewards in governance of ourselves, our families, communities, business-es, and public trusts.

Governments must rise to the principle that “public office is a public trust” and do so in harmo-ny with the constructive contribu-tions of business and civil society in ways where intolerance, tribalism, and fanaticism can have no place. This will require a better alignment between the policies of elites and the common good.

In turn, business must adopt the principles and best practices of sound stakeholder management. Government, business, and civil soci-ety must jointly tackle two urgent global needs: First creating employ-ment: the providing of work — an ethical foundation for human digni-ty — for all people.

The World Bank estimates that some 260 million young people in emerging markets are economical-ly inactive. Unemployment of all age groups is a global tragedy. The human cost of unemployment is documented with increased crime, more depression, family breakups and a whole host of human disabili-ties. When a person works in condi-tions of dignity, that person serves. Work can and should give vocation and purpose, key drivers of human fulfillment.

Achieving this will require: Better financing for needed infra-structure — critically needed eve-rywhere — including transporta-


tion systems, electricity, clean water, improved agriculture, etc.

simplifying government regula-tions (especially for small business-es) to remove impediments to job development. rent seeking privileg-es conferred by government which, on the one hand, provide security of employment or equivalent social benefits for some but which also cre-ate barriers to job market entry and business formation for others do not always further robust sustainable development on the widest possible scale.

Responding quickly and positive-ly to technological innovations.

expanding public/private research and teaching in science and technol-ogy.

Upgrading the status and scale of vocational and technical training.

addressing discriminatory prac-tices that hold back the potential of citizens left behind.

Second, providing a sustainable equilibrium of investment liquidity.

Achieving this will require collab-oration in reformulating the struc-tures of financial intermediation to serve sustainable wealth creation by providing necessary liquidity for job creation and efficient pricing grounded on sensible and sound val-uations.

The Irreplaceable Role of BusinessMarkets, with their supply and demand curves setting prices, their incentives for innovation, and their satisfaction of needs and wants, far out perform governments and non-profits in the creation of jobs and wealth. Without business, poverty will never be eliminated from our communities.

Without a robust private sector, free to create wealth, both govern-ments and non-profits will fall short in funding their aspirations to do good. Both tax receipts and charita-ble donations will be disappointingly insufficient. There can be no sustain-able development of wealth without sustainable financial investment.

The business sector most in need of new stewardship norms is finance — banking, investments, intermedi-ation and trading, liquidity manage-ment, and asset accumulation.

Sadly, imbalances in the market economy are holding businesses back from optimizing their contri-butions to sustainable development, and are thus compromising our future.

such failures include: “short-termism”;the relentless and ultimately

unsustainable pursuit of compound growth for growth sake;

misaligned incentives (in execu-tive pay);

the growth of shadow, even ficti-tious, markets and the resulting dis-tortion and corruption of the real markets; and

failure to properly recognize, val-ue and account for the full spectrum of both ‘on the balance sheet’ and ‘off the balance sheet’ risks and opportu-nities.

Altogether, this has resulted in chronically high levels of debt, unemployment, income inequal-ity and environmental degradation. Even Adam Smith recognized that free markets do not automatical-ly deliver effective mechanisms of good governance and accountabil-ity. Put simply, free markets by and in themselves do not always serve the common good, nor prevent corrupt behavior.

However, the response to these challenges must not be to jettison the modern market economy itself, but to transform practices and re-insti-tutionalize the principles that under-pin the unique strengths of markets. In short, wise stewardship, and good governance, together with concern for the common good need to be core principles for a robust market econ-omy.

The Principles for Responsible Business, originally written by the CRT, take account of diverse religious and cultural traditions, and provide a comprehensive set of such princi-ples.

While in the last 20 years, the rise of civil society and the movement for good governance and corporate social responsibility has helped to realize some progress toward ensur-ing a more sustainable market sys-tem, much more is necessary — and time is of the essence.

Meanwhile, the fundamental challenges for business and sustain-able development are compounded by:

The lack of trust in democratic politics and market capitalism.

Demographic shifts including aging, urbanization and trans-migration.

Without a robust private sector,free to create wealth, both governmentsand non-profits will fall shortin funding their aspirations to dogood. both tax receipts and charitabledonations will be disappointinglyinsufficient.


better business Business leaders need to change from being managers of ‘short-term self-interested capitalism’ into stew-ards of ‘long-term shared-value capi-talism’.

Business is an office of responsibil-ity; it is a way of serving society. Profit is its reward for serving society well. Ethical business requires steward-ship of enterprises for all stakehold-ers — customers, employees, owners, creditors, suppliers, communities, as well as the natural environment, which sustains us all.

ethical business is aware of its daily dependence on many forms of capital — not only financial but also human, social, governmental, reputational, and natural. Such busi-nesses protect and grow their stocks of these capitals. In so doing, they become stewards for the future, put-ting in place the necessary inputs for future well-being, both material and aspirational.

Business conducted in the spirit of stewardship will provide economic development sustainably.

Climate change and resource scar-city.

Growing inequalities in income and wealth, and

increases in radicalism and terrorism.To advance the sustainable Devel-

opment Goals, businesses need to embrace the full spectrum of broad-er stakeholder, societal, and envi-ronmental risks and the value driv-ers that can fundamentally improve their financial performance.

Practical Steps for the Road Ahead

better leadership There is a lack of far-sighted and courageous leaders in both pub-lic and private institutions, which diminishes humanity’s social capital and inhibits the reforms required to safeguard sustainable individual and collective well-being. This cannot be allowed to continue, for while the social capital provided by good lead-ers is intangible and qualitative it is a vital form of infrastructure needed to move governments, businesses, and people away from the goal of domi-nation towards sustainable steward-ship.

better education and promotion of a Culture of stewardship Sound learning, moderation, reason-ableness and integrity are vital for grounding the personal tolerance, wisdom and insight which alone can ground a secure resilience that is able to withstand the risks in our uncer-tain and ever changing world.

a spirit of mindfulness and bal-ance that eschews material excess and what is ill-considered and spir-itually rash, describes an ideal of conduct and personal integration that can commend itself around the world. This can offer a model for individual human development that can enable full and creative lives to

be lived out in the true freedom and dignity that comes with the capacity to make discerning choices and the fulfillment of our human vocation.

This approach points also to the fundamental importance of edu-cation and knowledge on the one hand, and of morality and virtue on the other. Our core values and ethi-cal awareness are even more central to our prosperity than is technical proficiency. Forming and treasuring human capital in ways that include all this must be the proper founda-tion for a sustainable future.

This will entail recognition of the conviction, so widespread around the world, that religions and faith ground our values and drive our compliance with them. The mere fact of this belief in the role of reli-gious and faith traditions means that their capacity for positive reinforce-ment of ethics and stewardship com-mitments must be taken seriously and must be actively employed. Fail-ure to do so can only impair the effec-tiveness of our work within the world we experience.

DP William Ruto during the launch of Data Forum to harness the data revolution for sustainable development 28-29 August 2015 in Nairobi


The needed transformation to robust sustainability implies many practical challenges to which the wider business community will need to respond. Without this, the clock will continue to tick towards the next global crisis and threaten the achievement of the sustainable development goals.

Business itself is well placed to undertake many of the required reforms though some will require policy, legislative, or regulatory inter-ventions for the successful rebalanc-ing of global capitalism.

To assist in this transition and rebalancing, the following practical reform agenda is suggested: 1. Affirming the stakeholder and

societal obligations and duties of corporations in corporate law perhaps by including formal stewardship obligations in cor-porate governance requirements (The UK Corporate Law reforms provide one such model).

2. Strengthening regulation, moni-toring, and supervision of mar-kets.

3. Countering short-termism and rewarding longterm value enhancing investment by cur-

tailing quarterly reporting of nominal earnings, providing tax incentives or subsidies for long-term holding of securities and/or imposing disincentives for short-term speculative holding of secu-rities.

4. Board Directors and CeOs mak-ing a personal commitment to support sustainable develop-ment. (To this end, the CRT has developed a model personal pledge for CeOs and Board mem-bers to take. See Annex 1)

5. mandating ethics and sustaina-bility training for Directors, CEOs and senior executives through the efforts of business schools, cham-bers of commerce, and institutes of company directors.

6. Further clarifying directors’ duties in corporate law to coun-ter the widespread but misguided belief that shareholder value has dominion over the purposes of corporate activity.

7. Developing improved accounting rules and practices that properly recognize stakeholder relation-ships and other intangibles as assets and liabilities of the firm.

8. realigning executive incentives

to ensure that they promote long-term value creation and protect against the agency problem of self-interest.

9. Creating a values-based annu-al reporting program for corpo-rations, which details contribu-tions to and performance against standards of wise stewardship and the sDGs.

better Government Government’s principal function in promoting sustainable development is to secure fidelity to the Rule of Law. An organic, holistic dynamic of sustainable development will fall prey to temptations of dominion and exploitation unless the rule of Law is well founded in culture and upheld in political institutions. Good governance under the rule of Law is a human right.

Law, as a human right, can then be used without oppression and abuse, on the one hand, to limit unsustain-able behaviors and encourage on the other social, political and economic resilience.

Government’s second principal role in fostering a society of sustain-ability is to facilitate discussion and dialogue leading to key performance objectives for public agencies and private firms and individuals. Goals and targets are very helpful motiva-tors for focused efforts and so draw forth higher levels of action and per-formance.

In addition, with respect to busi-ness and market responsive activi-ties, advocacy of best practices by firms and industry associations will accelerate adoption of business deci-sions compatible with sustainable development objectives. n

Extracted from Pegasus: A newsletter for the Caux round Table network looking at business above the clutter and confetti.

President Obama and President Kenyatta at the Global Entrepreneurship Summit 2015 (kochipost)


JANUARY – DECEMBER 2016 PROGRAMS

DIRECTORS, COUNCIL MEMBERS, COMMISSIONERS

SEMINAR TOPIC DATE TARGET GROUP VENUE

Constitutional and Legislative Framework on Integrity.

29th January(1 day)

CEOs and Board members nairobi

US Sustainable Development Goals 11th February(½ Day)

CEOs and Board Directors nairobi

Ethical Governance and Leadership; Role of Directors

19th - 11th march(3 day)

CEOs and Board Directors eldoret

Ethics in Business Experiences fromAsian Tiggers 21st - 22nd april

(2 day)

CEOs, Board members and Senior Managers naivasha

Integrity Concerns in Supply ChainManagement 12th may

(1 day)

Board Directors Head of procurement/supply chain nairobi

Servant Leadership:obstacles to responsible leadership

26th may(breakfast)


Caux Round Table Business Principles

25th February(1 Day)


Integrated and Sustainability Reporting

26th – 27th april CEOs and Board Directors mombasa

Citizenship and Corporate responsibility Guidelines 6th June CEOs and Board Directors nairobi

Sufficiency Economy Principles (Thailand model)

20th June CEOs and Board Directors nairobi

tarGet audIeNCe - KeySOs - Security OfficersrCs - records/registry Clerkssa/C - stores assistant/Clerksaas - accounts assistantsaCs - admin ClerksPAs - Personal Assistantsias - internal auditors

IAOs - Integrity Assurance OfficersmiCs - members of integrity Committeesses - senior executives CEOs - Chief Executive Officersmi/eCs - members of the integrity &ethics committeesHoias - Heads of internal auditsBoDs- Board of Directors

Contact Esther or WilliamCell: 0736 336 228 | 0727 14 66 81 | +254 714 501 395 | 020 217 3682 | 020 216 8189 | 0734 416 396 | 0705 768 962Email: [email protected] | [email protected]



SUPERVISORS AND MANAGERS


Mainstreaming Ethics Integrity 22nd - 23rd January(1 day)

Heads of departments and functions nairobi

Constitutional and Legislative Framework on Integrity

28th - 29th January(½ Day)

Heads of departments and functions nairobi

Ethics for Supply Chain Professionals 25th - 27th February(3 day)

Supply Chain Officers Kisumu

Mainstreaming Ethics in county management 24th - 25th march

(2 day)

Senior Managers/HODs eldoret

The Ethical issues in Records Management 7th - 8th april

(1 day)

Records Officers nakuru

Culture and Attitude Change for Productivity Improvement

12th - 13th may All supervisors mombasa

Public Financial Management; The ethical side

26th - 27th may(1 Day)

Finance officers, managers and directors naivasha

Ethics at the work place (general staff)

23rd – 25th February5th - 6th april

Admin staff:- secretaries, accounts clerks Nairobi,machakos






GENERAL


Mainstreaming Ethics:Role of Function Heads

14th July Heads of Departments nairobi

Establishing Ethics Structures, Polies and Code

12th august Heads of Departments nairobi

Corruption Risk Assessment 26th august Heads of Departments nairobi

Ethics Risk Assessment 16th september Heads of Departments nairobi

Ethics and Integrity Promotion Tools and Strategies 30th september Heads of Departments nairobi

Ethics in Supply Chain Management 14th October Supply Chain Officers eldoret

Mainstreaming Ethics for HR Professionals

28th October HR Professionals naivasha

ICT Ethics Risks 11th november ICT Professionals nakuru

3rd East African Study5th International Ethics Study 6th - 15th november Member of Integrity Committees rwanda

3rd East African Study5th International Ethics Study

24th november3rd December

Directors and senior management Hong Kong





n TeII PIcTOrIAL

1. Graduants receive their certificates in the ethics and integrity institute’s graduation ceremony.2. Enjoying a read of our third issue of the magazine in Arusha Hotel, Tanzania.

3. Sustainable development lessons learned, Bangkok4. 6th intake III: Mainstreaming Ethics and Integrity Program at Sunset Hotel, Kisumu from 21st – 25th

September, 20155. Integrity officers forum program in Arusha, Tanzania6. Integrity officers forum program in Arusha, Tanzania

1 2

3 4

5 6


The Road to Moral

CapitalismStephen B. Young

Steve Young - The Way to Moral Capitalism.indd 1 8/21/14 8:40 PM

THE NEW BOOK BY THE GLOBAL EXECUTIVE DIRECTOR OF THE CAUX ROUND TABLE, STEPHEN YOUNG.

AVAILABLE NOW ON AMAZON!

STEPHEN B. YOUNG, AN INTERNATIONAL LEADER IN THE FIELD OF BUSINESS ETHICS AND MORAL CAPITALISM COVERS THESE TOPICS AND MORE IN THE ROAD TO MORAL CAPITALISM:

• Corporate Social Responsibility and Public Goods • The Social Ecosystem of Corporate Social Responsibility • Why Did Wall Street Collapse in 2008? • Is There an Agency Problem? • Do We Need Wall Street? • Dodd Frank Reforms - Not Enough • The Existential Grounds for Moral Capitalism

www.roadtomoralcapitalism.com

Also available monthly from the Caux Round Table - Pegasus.The best way to stay current on Business, Ethics, and how they intersect.

Subscribe today at: www.cauxroundtable.org


nvestorsinntegrity

More details of the Investors & Integrity Program to be found Inside.

“It’s time to change habits and decisively break the cycle of corruption… People who break the law and violate public trust need to be prosecuted. People have to stand up and say enough is enough. It time for a better future.”

– US President Barack Obama.

From the commission charged with the responsibility in the fight against corruption, Parliament’s premier oversight committee, the corridors of justice, and the security organs charged with the safety of this nation, Kenyans are witness to the betrayal of their trust.”

– President Uhuru Kenyatta.

Kenya National Chamber of Commerce and IndustryHeritan House, Off Argwings Kodhek Road,Opposite Department Of Defence HQs, Hurlingham.P.O Box 47024-00200Nairobi, Kenya

The Ethics and Integrity InstituteKaptagat Road, off Waiyaki way LoreshoP.O. Box 5554-00, Nairobi, KenyaTel: 0736 336 228 | +254 714 501 395Email: [email protected]

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