One of the challenges of creating responsible supply chains is ensuring that the work that is done to protect the communities and workers actually benefits them economically. It's one thing to provide new safety training and equipment and ensure that the miners are using their new tools and methods. It's another thing entirely to verify that economic incentives and profit-sharing get past bureaucracies and governments and into the hands of the people.
So the fact that Kenya is working to establish a Soverign Wealth Fund is exciting. According to Mr. John Omenge, the Principle Secretary for the state Department for Mining in the Ministry of Petroleum and Mining, said "the fund will open up avenues of how the monies from mining will go back to counties and communities in the mining zones.
According to the Kenyan Mining Act, the national government receives 70% of royalties from any mining activities, county governments receive 20%, and communities living in the mining zones get 10%. However, the monies for counties and communities has not been well-distributed, and the national government is holding billions in monies that belong to the local communities. As oil and other high-value minerals continue to be discovered in Kenya, the government has decided a sovereign wealth fund is needed to guide revenue back to local communities.
For more information about this exciting initiative, click the link below: