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Foreigners Who Killed a Promising Kenyan Firm Must Pay For Their Sins

Spencon Services Ltd www.businesstoday.co.ke
As the struggling company was finally placed under administration, the employees were left jobless and unpaid. [ Photo / Business

BBC Africa Eye’s recent documentary Gangsters, Golf and Greenbacks made for painful viewing. The documentary revealed how one of Kenya’s premier construction and infrastructure companies, Spencon, was brought down by a private equity firm, Emerging Capital Partners (ECP). In the process, thousands of jobs were lost in the country and the region.

The documentary raised several critical issues concerning workers that call for reflection and perhaps government intervention. One of the obvious peculiarities about Kenya that was starkly highlighted is the special treatment that government agencies still accord foreign nationals and entities.

Online debate on this matter tends to be rather heated. Consensus is difficult to reach on whether this is symptomatic of our colonial legacy or whether it is driven by a hard-nosed desire to attract scarce and much-needed foreign investment into our economy.

Wherever one stands on this debate, what is clear is that change could not come sooner. At the very least government agencies should be blind to nationalities and race in applying the law. The two British officials covered in the BBC documentary – Andrew Ross and Steven Haswell – are reported to have mistreated their Kenyan employees. They insulted them verbally and delayed their wages and salaries, while ostentatiously spending what little money was supposed to be keeping the company afloat.

Meanwhile, their own salaries and those of their foreign colleagues were paid promptly. One lady was denied her salary because she was on maternity leave. “You snooze; you lose!” was apparently how Ross dismissed an argument about paying her dues. This is contrary to Section 29 of the Employment Act, which entitles a female employee to three months’ maternity leave with full pay.

Article 27 of the Kenyan constitution prohibits discrimination. The state and any persons “shall not discriminate directly or indirectly against any person on any ground, including race, sex, pregnancy, marital status, health status, ethnic or social origin, colour, age, disability, religion, conscience, belief, culture, dress, language or birth.”

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In the workplace, this is operationalized by the Employment Act Cap 226 in Section 5. The two ECP employees appear to have committed an offence under Kenyan law and should have been put on their defence. Yet after their misadventure, they easily boarded a plane and slipped out of this jurisdiction. It is worth noting that affected workers had reported the matter to the Department of Immigration Services. However, it is unclear whether action was taken.

The other glaring and jarring issue that was exposed by the documentary is the sheer vulnerability of employees to inept management. Indeed, in this case, it was arguably criminal. ECP’s agents went about stripping Spencon’s assets allegedly to improve cash flow. However, the monies received from the ostensibly undervalued asset sales were diverted to a private individual’s account with millions unaccounted for. This even as workers’ salary arrears piled up.

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As the struggling company was finally placed under administration, the employees were left jobless and unpaid. Some of those featured in the documentary had no option but to relocate and eke out a living in rural areas, struggling to make ends meet to provide for their families.

In desperation, the employees had tried several avenues to get the authorities to take action as the arrears were piling up. They had reached out to the Central Organization of Trade Unions (COTU) and the Ministry of Labour. To be fair, the County Labour Officer in Kiambu paid a visit to Spencon’s headquarters (located in the county) and later wrote a letter calling for action on the arrears. Kericho County’s Labour Officer also wrote to the company regarding delayed wages for workers on a road project by Spencon in Sotik. The demand letters were ignored.

Delays in remuneration

Whereas the Employment Act in Part 8 comprehensively outlines the procedure that should be followed in the event of insolvency as far as employee dues are concerned, it is doubtful that Kenyan workers are aware of this. Even more importantly, a significant proportion lacks the capacity in resources to follow up on the process to ensure that their rights are respected.

This Spencon case patently illustrates the need for awareness amongst Kenyan workers on the recourse they have in case they encounter discrimination at the workplace, delays in remuneration as well as other malpractices. The Ministry of Labour must prioritize this in its programmes, bringing on board other relevant government agencies as well as trade unions.

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The National Assembly’s Departmental Committee on Labour and Social Welfare also has a critical role to play. As the people’s representatives overseeing labour issues, it should institute practices that ensure that all relevant authorities guarantee that the kind of blatant racism in the Spencon case as well as other injustices visited on Kenyan workers do not stand.

Kenya must also address the issue of over protection of foreign investors to the detriment of locals by repudiating one-sided Bilateral Investment Treaties that it has signed with some developed nations.

Many of these offer protections such as most favoured nation status and right to repatriation of profits but leave the government no room to regulate the conduct of such investors.   

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JAMES MBUGUA
Mr James Mbugua is a Legal and Policy Communication Consultant.

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