16 Sep

AUCTION VENUE: The East Africa Tea Trade Centre on Nyerere Avenue in Mombasa.

The implementation of tea trade regulations recommended by Agriculture Cabinet Secretary Peter Munya has been suspended.

High Court judge Njoki Mwangi, sitting in Mombasa, said the status quo remains until a petition filed by East African Tea Trade Association (EATTA) is heard and determined.

The rules, expected to bring major changes in how tea is traded in Kenya, were to be effected from June.

They are meant to do away with the sale of tea by private treaty (direct sales) and instead have all tea produced for export sold through auction.

The Munya regulations also recommended a 10 per cent performance bond of the estimated value of expected tea purchases at the auction.

But the EATTA, through lawyer Mwangi Kibicho, went to court, arguing that the regulations are too rigid and likely to cause major setbacks in the huge steps the tea trade has gained since an auction centre was set up in Mombasa.

Kibicho said the regulations were gazetted without a presentation of regulatory impact assessment statement as required by the statutory instruments.

He said the CS gave the public only 15 days to review the draft in April when the country was struggling with the coronavirus and further went ahead to gazette the regulations on May 20.

The EATTA petition was filed against Munya, the Agricultural and Food Authority (AFA) and the Attorney General.

Justice Mwangi certified the matter as urgent and scheduled the hearing for October 24.

According to Kibicho, efforts by the tea stakeholders to seek avenue through the National Assembly clerk to take part and make submissions in line with the regulations hit a snag when they were informed that the regulations had already been tabled before the committee for scrutiny, review and consideration.

He said the petitioner shocked when the CS started the implementation on June 24 through a circular directing all buyers and exporters to submit 10 per cent bond of the tea they intended to buy at the auction.

However, the circular was withdrawn by AFA after the petitioners protested against it.

Kibicho said implementation will not only affect exporters but also producers, brokers, tea packers and warehousemen across 10 African countries as they will be rendered jobless.

The lawyer said the regulations will undermine trade as they provide for many approvals, charges and levies even though they are meant to reduce unnecessary levies, taxes and barriers to free movement of products.

He averred that there will be double regulations of tea growers, processors and organisations operating as cooperative societies in the industry.

Kibicho further said the rules, which restrict brokerage services to a maximum of 15 tea factories at the tea auction, are unlawful and will breach existing contracts, which are private arrangements.

According to the petitioner, the 10 per cent performance bond will cause losses as buyers will shy away from attending the auctions and that would hurt farmers and the economy.

“Munya’s directive for immediate implementation of the regulations were made to destabilise the production and export of Kenya’s tea and will cause Kenya to lose the advantages of hosting a regional’s tea auction centre," he said.

Source: The Star