Why KNH and 20 other agencies face dissolution in law lacuna

Kenyatta National Hospital, Moi Teaching Referral Hospital, Mathari National Teaching and Referral Hospital and the Kenya Institute of Mass Communication are among 22 key parastatals that face automatic dissolution on January 25, 2024 unless Parliament fixes a loophole in the law.

The Statutory Instruments Act, 2013 provides for the automatic revocation of all regulations—which were used to legalise the 22 agencies, and which provides for their workings—after 10 years, regardless of their nature.

In a Gazette Notice dated November 29, 2022 Attorney-General Justin Muturi made exemptions for the blanket expiry, but that lapses next month.

In requesting Parliament to extend the period by one year, Mr Muturi told lawmakers that the country had just come from elections and the government needs to put its house in order.

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In passing the Finance Act of 2023, the National Assembly attempted to delete the provisions on the blanket expiry to forestall the inevitable dissolution of the parastatals.

“The Bill proposes to amend Section 20 and 21 of the Statutory Instruments Act, 2013 to remove the mandatory requirement for the review of the subsidiary legislation and expiration of statutory instruments to and align the Statutory Instruments Act, 2013 with the revision of the Laws Act,” reads a provision in the Finance Act

However, the inclusion of the proposed deletion was recently ruled by a three-judge bench as unconstitutional.

The court pointed out that Section 21 which deals with the statutory instruments is an omnibus provision that affects multiple pieces of legislation that may or may not have any connection with the Finance Act.

“In the absence of specificity on the subsidiary legislation affected, it is difficult to determine whether this amendment properly belongs to the Finance Act. In addition, some of the affected instruments may well have an impact upon the powers and functions of county governments and therefore require the input of the Senate. The connection between the said instruments and the Finance Act appears tenuous at best,” reads the court ruling.

This will likely have a catastrophic effect of revoking all regulations made before 2013.

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In its ruling, the court gave the National Assembly 45 days to re-introduce the expiry clause of Section 21 in the Act.

The 45 days expire on January 10 while MPs resume their sittings on February 13, 2024, raising real fear on the imminent dissolution of the parastatals.

Section 21 of No.23 of 2013 of the Statutory Instruments Act that MPs want deleted states that; “A statutory instrument is by virtue of this section revoked on the day which is 10 years after the making of the statutory instrument unless, it is sooner repealed or expires or a regulation is made exempting it from expiry.”

The National Assembly, while considering the Finance Bill, now an Act, opted for the second option of exempting the regulations from expiry, a decision that has now been quashed by the court.

The National Assembly has filed an appeal against part of the judgment of the High Court on the Finance Act of 2023, arguing that the regulation relates to the Value Added Tax (VAT) and the excise duty hence they are related to the taxation question that was before the court.

The general provisions in the statutory instruments Act was largely borrowed from Australia in 2013.

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With the close of the year fast approaching, AG Muturi is yet to provide guidance on the fate of the affected agencies, their employees and other stakeholders.

Other bodies in the same mix are Kenya Vision 2030 Delivery Secretariat, Kenya Ordnance Factories Corporation, Youth Enterprise Development Fund, Information, Communications, Technology Authority, Child Welfare Society of Kenya, Kenya Film Commission (KFC), Kenya Institute of Special Education, Kenya Water Towers Agency, Kenya Education Management Institute, Kenya Leather Development Council , and the Kenya Veterinary Vaccines Production Institute.

Others are Kenya Tsetse and Trypanosomiasis Eradication Council, National Anti-Corruption Campaign Steering Committee, National Social and Economic Council, Kenya Animal Genetic Resource, Centre for Mathematics, Science and Technology Education in Africa, and the Kenya Fishing Industries Corporation.

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