West Kenya Sugar now demands closure of Butali Sugar Mill

KENYA – The controversy surrounding the setting up of Butali Sugar Mill has deepened with a rival miller challenging the legality of the government’s decision to issue the miller with a licence, and demanded that it be shut down.

KENYA – The controversy surrounding the setting up of Butali Sugar Mill has deepened with a rival miller challenging the legality of the government’s decision to issue the miller with a licence, and demanded that it be shut down.

Butali’s competitor and neighbouring miller West Kenya Sugar is also challenging the legality of a committee formed by Agriculture, Fisheries and Food Authority boss Alfred Busolo to reconsider Butali Sugar’s licence application.

Last month, the Appeal Court sitting in Kisumu reversed a decision by the High Court to license operations of the miller.

The court issued orders compelling Kenya Sugar Board, now a directorate under the Agriculture, Fisheries and Food Authority to hear and determine afresh an application for a licence by the miller.

It also directed that West Kenya Sugar Company be heard in opposition since it feels aggrieved by the existence of Butali Sugar, barely 10 kilometres away from it.

NO LEGAL BASIS

West Kenya has written to Mr Busolo warning him that his decision to form a committee to hear and determine the matter has no legal basis.

“It is not clear under which provisions you have formed the said committee, how you determined its membership and the procedure it will use to consider the application by Butali Sugar Mill,” West Kenya said in the letter.

The miller’s management refers to sections of the Crops Act, 2013, which it said provides guidelines on the registration of dealers in any crop, as well as issuance of licenses.

“The board of AFFA has not asked you to implement any of its powers as required by law… It is therefore clear that the purported meeting scheduled for October 6 is without any legal basis,” West Kenya Managing Director Tajveer Rai said in the protest later.

Mr Rai told AFFA that his miller will not attend the meeting as invited by the authority, dimming any hope that the battle for control of part of the Western Kenya sugar belt will end soon.

TRIBUNAL YET TO BE FORMED

Last week, Mr Busolo said that before any decision is reached, all stakeholders would be involved.

The AFFA boss was quoted as saying he formed the committee because the Crop Tribunal which is to hear such matters is awaiting formation.

The registration of Butali Sugar Mills has been shrouded in controversy and its existence questioned considering its proximity to West Kenya.

The bone of contention is the distance between the two millers which, according to procedure, should be at least 25 kilometres.

In December 2010, then Agriculture minister Sally Kosgey skipped the laying of a foundation stone by former Prime Minister Raila Odinga on the premise that the registration of the miller was in violation of the Sugar Act.

Butali Sugar applied for a license from Kenya Sugar Board to operate a mill in 2004 and was issued with a certificate of registration, forcing West Kenya to move to court to defend its investment.

The back-and-forth tussle between the three parties even drew in Ms Kosgey and her Permanent Secretary Romano Kiome.

While Mr  Kiome suspended Kenya Sugar Board CEO Rosemary M’kok over delays in licensing the mill, Mrs Kosgey blamed M’kok for allowing Butali to start operations without due procedure.

Butali has been in operation courtesy of a High Court ruling that had overruled objections raised by West Kenya and the Kenya Sugar Board.

With the Court of Appeal ruling, West Kenya had given Butali Sugar until Friday to cease operations or face contempt of court charges.

October 2, 2014; http://www.nation.co.ke/business/West-Kenya-Sugar-Butali-Sugar-Mill-Court-Case/-/996/2475332/-/11de6lo/-/index.html

Related Article:


Controversy continues as origin of Uganda sugar imports into Kenya unclear

Comesa assesses reforms in Kenya sugar industry

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.