Cabinet Secretaries for Agriculture and National Treasury and some government agencies have been sued over a proposal by a company to import 540,000 metric tonnes of maize from Zambia.
In a case filed at the High Court in Mombasa, Mr James Mwikabi argues that the relationship between Baita Trading Company Ltd’s (BTCL) transaction and the government’s 25 million bag maize-import programme has not been adequately disclosed.
Mr Mwikabi further argues that there is a concern on whether BTCL has been granted or promised any customs-duty exemption, remission, preferential tariff, import quota, special customs treatment, regulatory exemption, special permit or other fiscal or regulatory advantage and whether such benefit has a lawful statutory foundation.
He says that 540,000 metric tonnes of maize is equivalent to approximately six million 90 kilograms bags of maize thus constitutes a transaction of significant magnitude capable of having substantial implications for the country’s maize market, public revenue, domestic agricultural production and food security.
“The consequences of permitting the transaction to proceed may extend beyond BTCL and may affect Kenyan farmers, consumers, traders and other participants in the agricultural food supply chain,” says Mr Mwikabi.
According to Mr Mwikabi, there exists a serious and material question requiring determination as to whether BTCL’s proposed importation forms part of benefits from or has been incorporated into the government’s announced maize-import programme.
“The petition is particularly concerned with whether BTCL has been granted or is intended to receive any special allocation, import quota, duty free treatment, customs exemption, remission, preferential tariff, fiscal concession, regulatory exemption or other preferential treatment by or through the respondents,” argues Mr Mwikabi.
Apart from the CSS’s, Commissioner General-KRA and BTCL, other respondents are Agriculture and Food Authority (AFA), Kenya Plant Health Inspectorate Service (KEPHIS), Kenya Bureau of Standards (KEBS), Attorney General, Kenya Ports Authority (KPA) and Kenya Maritime Authority (KMA).
Mr Mwikabi wants conservatory orders issued restraining the two CSS’s, Commissioner General-KRA and some respondents from implementing, facilitating or giving effect to BTCL’s proposed importation or transaction relating to the maize whether under government’s maize-import program or otherwise.
He wants the orders issued pending inter partes hearing of his application for the conservatory orders.
Mr Mwikabi also argues, in his petition, that he has not instituted the case because he disagrees with the government’s decision to import maize neither does he seek to prohibit international commerce or prevent a private company from purchasing maize from another country.
The petitioner says that on or about September 9 and 10, it was publicly reported that the Food Reserve Agency of Zambia had entered into an agreement with BTCL for the export into the country 540,000 metric tonnes of white Grade A non-GMO maize.
He says that the private character of the commercial agreement does not answer a question whether the country’s public authorities have exercised public power in relation to the transaction.
“A private importer remains subject to Kenyan customs, taxation, food-safety, plant-health, standards and other applicable regulatory requirements once its goods enter the country,” argues Mr Mwikabi.
The petitioner further says that he seeks disclosure of all correspondence between the government and BTCL relating to the transaction and all correspondence between Kenyan public authorities and the government or public agencies of Zambia concerning it.
He also says that if BTCL has been granted any tax or customs duty benefit, the respondents must identify the legislation authorising it (benefit) and demonstrate compliance with all applicable constitutional safeguards.
Mr Mwikabi says that if BTCL is entitled to import the maize without paying customs duty that would ordinarily be payable, the resulting fiscal impact is a matter of legitimate public concern.
“The petitioner seeks production of the applicable tariff, ordinary duty payable, actual treatment accorded to BTCL, the amount waived or proposed to be waived and legal authority relied upon,” says Mr Mwikabi.
The petitioner says that he seeks disclosure of the government’s maize balance sheet and analysis undertaken concerning domestic stocks, expected production, strategic reserves, projected consumption, projected imports, farm gate prices, consumer prices, milling capacity and anticipated effect of the importation upon farmers.
He says that he does not seek to prohibit BTCL from purchasing maize from Zambia neither does he sk the court to prohibit the lawful importation of maize into the country.
“The petition is concerned with the exercise of public power surrounding the importation,” the suit documents state.
The petitioner seeks a declaration that the implementation within Kenya of the transaction involving the importation of 540,000 metric tonnes of maize by BTCL is subject to the constitution, the East African Community Customs Management Act, AFA Act, KRA Act, KEBS Act,KEPHIS Act, Public Finance Management Act, Fair Administrative Action Act, Access to Information Act and all other applicable laws.
The petitioner also wants a declaration that no public authority in the country may grant, implement or facilitate any customs duty waiver, remission, tax exemption, preferential tariff, import quota, fiscal concession, regulatory exemption or other public benefit in favour of BTCL except pursuant to lawful statutory authority and in compliance with the constitution.
He also wants an order issued that no consignment forming part of BTCL’s transaction shall be cleared under a duty-free or preferential customs regime unless and until the respondents demonstrate the existence of lawful statutory authority and compliance with the constitution and applicable law.
Justice Jairus Ngaah certified the case as urgent and directed that it be mentioned on October 12 for directions.
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