Toshiba Corporation delegates who attended the TICAD meeting in Nairobi
last weekend. Treasury CS and Japanese Foreign minister sign agreement
during the conference. PHOTO | FILE
By OTIATO GUGUYU
In Summary
Japanese companies are set to enjoy easier access to
the Kenyan market under a raft of investment and tax deals signed in
Nairobi over the weekend.
The deals allow the Asian nation’s firms to repatriate
profits, safeguard their investment against government interference and
open up diplomatic channels to handle disputes before seeing
intervention of international bodies.
The agreement for the Promotion and Protection of
Investment was signed by Treasury Secretary Henry Rotich and Japanese
foreign affairs minister Fumio Kishida on the sidelines of the Sixth
Tokyo International Conference on African Development (TICAD VI). The
two nations are also expected to sign a double tax agreement.
“The Contracting Parties will notify each other of
the completion of their respective internal legal procedures required
for the entry into force of this Agreement (in case of Japan, the Diet
approval will be required) and this Agreement will enter into force on
the thirtieth day after the date of the receipt of the latter
notification,” Japan said on their Foreign Affairs website.
Under the deal disputes will be settled
diplomatically or a tribunal will be appointed by the two governments.
Only if a bilateral solution is not found will the Secretary-General of
the Permanent Court of Arbitration at The Hague be called upon to help.
This comes even as Japan and Kenya have been
holding diplomatic talks over the Mombasa Port after Cabinet Secretary
for Transport James Macharia cancelled the tendering process for the
concessionaire for the second Mombasa port terminal earlier in the
year.
According to leaked e-mails from the Kenyan
Ministry of Foreign Affairs, the Japanese Foreign Affairs minister Norio
Maruyama requested to meet CS Aden Mohamed (Industrialisation) over the
Mombasa Port before the TICAD conference.
Last year, representatives of Oriental Consulting
Group, Overseas Coastal area development Institute appeared before the
National Assembly Public Investment Committee protesting last-minute
conditions added to Request for Tender (RFT) documents.
Ten days before opening of tender documents, the
Treasury wrote to the Kenya Ports Authority (KPA) asking them to add
provisions requiring the winner to offer 15 per cent free carrying
shares to the government.
The new conditions also said that the company
selected for a concession will be given the powers to determine the
financing mechanism for the next phases of the project and will also be
given the ‘first right of refusal’ in the planning and arrangement for
the remaining phases of the project.
The new trade agreement however does not cover claims arising out of events that occurred before it comes to force.
“The two issues are not related to the deal we
signed, will cover agreements on putting up the second container
terminal but the issue of the concessionaire is a different matter all
together,” Mr Macharia said.
He said the government was reviewing options of
running the port having given KPA the mandate to run it indefinitely as
they review options to have a private investor manage the Sh30 billion
facility.
The new deal however, gives companies from the two
countries ‘Most-Favoured Nation Status’ will make it easier to transfer
labour within immigration guidelines
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