Sugar Act

This Act may be cited as the Sugar Act, 2024.

Provides definitions for terms used in the Act (for example: “agreements”, “Board”, “by-product”, “Cabinet Secretary”, “cane management”, “County Executive Committee Member”, “Fund”, “guidelines”, “grower”, “industry”, “industrial sugar”, “Institute”, “Jaggery mill”, “licence”, “member”, “mill gate”, “miller”, “outgrower”, “refined sugar”, “retailer”, “stakeholder”, “sugar”, “sugar beet”, “sugarcane”, “sugar catchment area”, “sugarcane growers apex body”, “sugar crop”, “sugarcane manufacturer’s apex body”, “Tribunal”).

The Board must regulate its own procedure and the procedure of any of its committees, except as provided in the Second Schedule.

The Board may establish committees and may co-opt persons with relevant knowledge and skills to sit on those committees.

The Board may delegate any of its powers, functions or duties to a committee or to any member, officer, employee or agent, either generally or in a particular case.

The Board must pay its members fees or allowances for expenses as determined by the Cabinet Secretary on the advice of the Salaries and Remuneration Commission.

The Board must appoint a Chief Executive Officer through a competitive process; the Board sets the CEO's terms; the CEO is ex‑officio without a vote and manages day‑to‑day affairs subject to Board directions.

The Board may appoint officers and other staff needed to discharge its functions, on terms and conditions it determines.

Members, officers, employees and agents of the Board are not personally liable for actions done bona fide in executing the Board's functions, powers or duties.

The Board must pay compensation to any person for injuries to them, their property or interests caused by the exercise of powers under this Act or by failure (wholly or partially) of any works.

Establishes a board called the Kenya Sugar Board.

Section 4 lists the functions of the Board, including regulating, developing and promoting the sugar industry; coordinating value chain actors; facilitating equitable access; advising governments; registering and licensing industry participants; enforcing standards; and preparing a strategic plan at least once every five years.

County governments issue certificates and inspect sugar crop nurseries in collaboration with the Kenya Sugar Research and Training Institute.

Sets out the composition of the Board: a President-appointed non-executive chairperson; representatives elected by growers, mills, county governors, and Principal Secretaries (or their nominees); and the Chief Executive as ex‑officio member and secretary; certain members to be appointed by the Cabinet Secretary by Gazette notice; gender, youth and disability representation and rotational election rules; chairperson qualifications.

A person appointed as chairperson or as a Board member under section 6(1)(a),(b),(c) and (e) must serve for a three-year term that may be renewed once upon (re-)election or nomination.

Section 8. Vacation of office Section is absent from three consecutive meetings of the Board without notifying the chairperson in writing;

The Board has the power to impose levies on growers and millers to give effect to the Act.

Persons may not operate as millers unless registered by the Board with premises specified; the Board must issue registration certificates and satisfy environmental and safety requirements; registered millers must comply with the Act; millers may offer extension services; contravention is an offence punishable by up to five years' imprisonment or a fine up to ten million shillings.

Growers must be registered and have a valid supply agreement with a miller (or be exempted by section 20) and the miller’s factory must be within the grower’s sugarcane catchment area; millers must not refuse to accept or collect cane delivered under a cane supply agreement; a miller or grower who contravenes this section commits an offence punishable by a fine of at least one million shillings or three times the market value of the sugar (whichever is greater), or imprisonment for not less than one year, or both.

A grower who wishes to supply cane outside a sugarcane catchment area is exempt if they meet one of three criteria, and such a grower must notify the Board of that intention; the Cabinet Secretary must prescribe regulations for that notification.

Applies when the miller’s factory is temporarily broken down.

A person must not operate a sugar mill or jaggery mill unless they hold a current licence issued by the Board on recommendation of the relevant County Government.

People must apply to the Board for a licence to operate a sugar mill or jaggery mill using the prescribed form; the Board may prescribe licence fees after consulting the Cabinet Secretary.

Licences are subject to conditions set by the Board and by regulations; each licence expires on the 30th June next following its date of issue unless it is revoked earlier.

Importing or exporting sugar (including sugar-crop and by-products) requires a Board-issued licence and, for import/export, prior Board permit/approval with specified pre-import evidence; offences attract up to five years imprisonment or a fine up to ten million shillings.

The Board must ensure sugar imports are subject to prevailing import duties, taxes and other tariffs.

Licensed sugar millers must be licensed by the Board to process industrial sugar; the Board must regulate industrial sugar processing.

Millers and retailers must supply and sell sugar products in packaging that allows traceability; the Cabinet Secretary must make regulations within six months; contravention is an offence punishable by imprisonment up to two years or a fine up to one million shillings or both.

Establishes the Kenya Sugar Research and Training Institute and grants it corporate powers including suing and being sued, acquiring and disposing of property, borrowing and lending money, entering contracts, and performing necessary acts for its functions.

Section 30 lists functions of the Institute, including promoting, coordinating and regulating sugar research and expediting equitable access to research information, resources, technologies and innovations for the sugar industry.

Section 31 lists the composition of the Institute's Board and provides that the Cabinet Secretary shall appoint the members mentioned in subsection (1)(a)–(e) by notice in the Gazette; it also sets a qualification for appointment as chairperson (degree and at least ten years’ experience).

Sections 8, 9, 10, 11 and 12 apply to the Board of the Institute with necessary modification.

Funds of the Institute are monies remitted by the Board from the sugar development levy.

The Institute must have a Managing Director appointed by the Board through a competitive process; the appointee must meet specified academic and experience qualifications and the Board sets terms in consultation with the Public Service Commission.

The Cabinet Secretary must make regulations (in consultation with county governments and the Board) to implement this Act and must make regulations necessary to operationalize the Act within six months from the date of commencement.

The Board must appoint qualified sugar industry inspectors and keep a register; the Board may appoint other government agencies as inspectors; the Cabinet Secretary must make regulations.

enter any land or buildings occupied by the holder of a licence issued under this Act, or a person registered under this Act;

Inspectors have powers to enter land, premises or vehicles and to take actions like searches, seizure, demanding licences and other authorized acts; owners or occupiers must give reasonable assistance to inspectors who enter; refusing or delaying to comply with that assistance is an offence.

A person must not prevent, hinder or obstruct an inspector carrying out functions, duties or exercising powers under this Act.

The Board's funds are such monies as may be appropriated by the National Assembly for the purposes of the Board.

The Cabinet Secretary, in consultation with the Board and by order in the gazette, shall impose a Sugar Development Levy (up to 4% of value on domestic sugar and 4% of CIF value on imported sugar); proceeds are allocated by percentage to specified uses and unpaid amounts incur a 3% monthly addition and are recoverable by the Board.

Establishes the Sugar Development Fund and provides that the Fund shall be administered by the Board; lists the Fund's sources of money including a levy, donor funds, monies from the National Assembly and county assemblies, and other sources approved by the Board.

The Board's financial year is the twelve-month period ending on 30 June each year.

The Board must prepare estimates of its revenue and expenditure before each financial year and must approve the annual estimates before that financial year; the Board may create reserve funds for future or contingent liabilities.

Section 44 requires the Board to keep proper accounting records; the Board's accounts must be audited by the Auditor-General or an auditor appointed with the Auditor-General's written approval; the Auditor-General has inspection, direction and reporting powers and certain reporting and fee arrangements are specified.

The Board must prepare and submit an annual report within three months after the end of each financial year; the Cabinet Secretary must lay that report before the National Assembly and Senate within three months of their next sitting after receipt.

Establishes the Sugar Arbitration Tribunal, appointed by the Chief Justice, with a chairperson qualified for High Court judgeship and four expert members appointed through competitive recruitment; members serve part-time and hold office for periods not exceeding three years and may be re-appointed once.

The Tribunal has jurisdiction over specified disputes concerning sugar industry participants and issues listed in Section 47(1)(a)–(f).

The Tribunal must promptly decide disputes and must decide any dispute within three months of it being lodged; it must apply the Evidence Act and Civil Procedure Act rules (with necessary modifications) and avoid undue procedural technicalities.

The Tribunal has the power to administer oaths to the parties and witnesses in the proceedings.

Members of the Tribunal are removed if they become an undischarged bankrupt.

If a Tribunal member's office becomes vacant, the Chief Justice may appoint another person and that member must serve for his or her full term.

The Chief Justice must appoint a Secretary and any other staff of the Tribunal necessary for its proper functioning.

Section 53 provides that the Tribunal’s staff remuneration and expenses are to be paid from monies allocated by the National Assembly to the Judiciary Fund, and that the Chairperson and members are to be paid allowances and reimbursed expenses as determined by the Judicial Service Commission on the recommendation of the Salaries and Remuneration Commission.

The Board must convene an annual general meeting at least once every year of millers and growers; it may call special meetings; and, subject to the Act and regulations, it may make rules governing conduct and procedure at those meetings.

Safety and quality standards are set by the body for the time being responsible for setting standards.

Section 56. Inspection for quality and safety Section 56(1) The Board shall carry out physical inspection of premises licenced under section 23 quarterly to ensure that safety and health standards are followed. Section 56(2)(a) not

The Board may direct organisations or persons in the industry to produce documents or submit returns; subsection (2) lists offences including failing to comply, providing false or misleading information, obstructing an officer, and diverting transit sugar into the domestic market; subsection (3) sets penalties for diversion including a fine up to three times domestic value or two million shillings or imprisonment up to ten years or both.

Creates sugar industry agreements covering designated sugar-producing crops, a grower’s right to cultivate sugar crops on their land, sugar‑cane farming contracts setting terms for growers and millers, a pricing formula, Board functions, powers for the Board to enforce penalties, and enforcement of levies to enable the Board to meet obligations.

Contravening any provision of the Act is an offence. First conviction: fine of not less than one million shillings or three times the market value of the sugar concerned, whichever is greater, or imprisonment for a term not less than one year, or both. Second or subsequent conviction: fine of not less than three million shillings or three times the market value of the sugar concerned, whichever is greater, or imprisonment for a term not less than two years, or both.

Creates a Sugarcane Pricing Committee, lists its membership, assigns functions related to setting and reviewing sugarcane pricing, requires the Board to provide secretarial services, and allows the Committee to undertake an early pricing review with prior Board approval.

The Agriculture and Food Authority Act (Cap. 317) is amended in the First Schedule by deleting paragraph 1(ii).

Part I of the First Schedule to The Crops Act (Cap. 318) is amended by deleting the words “Sugarcane………. Saccharum spp”.

Upon commencement, certain former Sugar Board and current Sugar Directorate staff (not under notice of dismissal or resignation) become staff of the Board on their current or improved terms and conditions, subject to subsection (2).

All property previously held by the Government for the use of the Sugar Directorate vests in the Board on the date of commencement, except property the Cabinet Secretary specifies in writing, and subject to existing interests and liabilities.

Pending legal proceedings and claims related to actions and activities the Act covers must be continued or enforced by or against the Board as if they had been by or against the Agriculture and Food Authority.