Opposition leader Raila Odinga has sent a letter to three Kenyan oversight agencies calling for an investigation into a controversial petroleum importation agreement between the government and three private companies.
The letter sent to the Ethics and Anti-Corruption Commission, Auditor General and Energy Regulator by the legal representatives of Odinga slams the deal as undermining Kenyan law and not being a true “government-to-government” agreement as claimed.
“This is not a G-to-G deal,” the letter states. Despite government claims it is a sovereign arrangement between Kenya and Saudi Arabia and the United Arab Emirates, the letter says it is actually “a commercial contractual arrangement with private companies.”
The agreements were signed March 10 between Kenya and Aramco Trading Fujairah FZE, Emirates National Oil Company (Singapore) Private Limited and Abu Dhabi National Oil Company Limited. A separate operational agreement was signed the same day between Kenya and three local oil marketing companies.
While the agreements refer to a “government-to-government framework,” the letter says that phrase does not actually appear in the language of the deals themselves.
“It is contradicting, and illogical too, that the Government of Kenya would have tendered to procure a representative of a foreign sovereign government,” the letter states.
The signatories also accuse the deals of undermining Kenyan procurement law by allowing the foreign suppliers to nominate local buyers and agents, roles that should be independent under Kenyan law.
“Indeed, in the Master Framework Agreement, the Nominated OMC’s are referred to as ‘the buyer’ of Petroleum products’ under the agreement,” the letter says.
Most controversially, the letter slams terms in the operational agreement to use English law and arbitration venues.
“Although the Operational Agreement is between the Government of Kenya, three locally incorporated oil marketing companies licensed by the Government and a bank where the government is a major shareholder, the agreement is to be ‘governed by, interpreted and construed in accordance with the laws of England,’” the letter states.
In his initial public call for an investigation on Nov. 20, Odinga said the deals would cause fuel prices to rise and could risk Kenya’s energy security.
The letter requests the agencies use their legal authority to thoroughly investigate the agreements.
