Deadly Storm Brewing in Western’s Sugar Industry As The Judiciary is Put On The Spot

By Joseph Barasa

There is a deadly storm brewing in the sugar industry within the former western province. The signs have been there for years that have since seen the country’s troubled Mumias Sugar Company buckled to its knees. Nzoia Sugar tottering but barely hanging on. Butali Sugar struggling but what about West Kenya?

The signs that the latter’s performance though privately owned were in a horrible shape started manifesting themselves more than five years ago when it embarked on an extremely aggressive and sometimes dangerous sugarcane poaching campaign from farmers contracted to supply the product to its competitors.

The worst affected being Mumias Sugar Company, West Kenya’s neighbor Butali Sugar Company and Nzoia Sugar Company, the critical factor here being that West Kenya had to survive and it had no raw materials because since its inception in 1978 it never had contracted farmers.

                             Mr. Ali Taib (R)-Managing Director of Busia Sugar Industries

Interestingly all these milling companies are concentrated in Kakamega County with only Nzoia gracing Bungoma County, but the biggest irony of the whole matrix is that Busia county which had cried for a factory since independence but never had was destined to become the epicenter of the roiling storm.

Though with huge potentials of sugarcane production, Busia County had for decades been relegated to the back-burner, producing the cash crop but having it delivered to Mumias Sugar’s factory for processing.

That is despite the fact that initial plans were that the largest ultra modern diffuser sugar processing facility was to be constructed at Nasewa in Nambale sub-county complete with more than 900 acres of land purchased by the government – that facility ended up at Mumias Sugar which was to release one of its old milling machines to Busia but that never came to pass.

The county was left stranded with more than 900 acres for a factory construction and nucleus estate since the early 1990s to the year to 2002 when it suddenly became the battle ground for sugarcane poaching triggered by West Kenya from farmers contracted to Mumias Sugar and transporting it more than 100 kms away past Mumias to its factory in Kabras sub-county.

This state of affairs put the once forgotten Busia County squarely in the centre of the brewing storm that more than just the usual sugarcane politicking battles of words. The sugarcane poaching crisis seems to have been the turning point in matters concerning the sugar industry in the former western province region.

 Since independence the county in the year 2002 was able to bag a serious investor Africa Polysac who through its subsidiary company Busia Sugar Industries purchased land and started constructing the first ever sugar factory in the county at Busibwabo in Matayos sub-county which was hived out of Nambale with a crushing capacity of more than 6000 tonnes per day.

                                                       BUSIA SUGAR INDUSTRIES

But even before that there were vicious board room battles with other applicants to construct a sugar crushing facility in the county that included West Kenya, Africa Polysac,Cherry and Kaplony that initially saw Africa Polysac being short-changed by the former Kenya Sugar Board (KSB) which gave it license to construct the facility in neighbouring Siaya County.

What beats all logic is the fact the company had not applied to construct the facility there, it had done the feasibility studies, it had not done its environmental impact mitigation studies there, it had not bought land there among other things – but that is just the surface of the powerful power brokers and mafia like cartels plaguing the sub-sector.

However, that was rescinded and construction of the facility worth more than Kshs. 6 billion that is near completion begun at the site where the Busia Industries had identified at Busibwabo, Matayos sub-county in Busia County.

That is when the storm appears to have started intensifying and has since not let down its steam. West Kenya which did not have contracted sugarcane farmers in Kabras sub-county to supply it with sugarcane appears to have lost them completely to the Kakamega county’s new entrant in the sugar milling business – Butali Sugar Company.

However, having tasted the sweetness of the sugarcane from Busia county through the poaching crisis the company seems to have been hooked hook line and sinker by initially purchasing a piece of land in a wetland area at Olepito, Tangakona along the Busia – Mumias highway on the border of Nambale and Teso sub-counties to construct a sugarcane buying centre where poached cane could be weighed before being transported 100kms to the Kabras facility.

With that the battle ground was set and the battle lines drawn especially West Kenya having lost its bid for a facility in Busia County. Though Busia Sugar Industries had started constructing its facility at Busibwabo less than twenty kilometers from West Kenya’s Buying Centre - there was trouble fomenting for it in the works.

The first blow came from perhaps a very un-expected corner when through machinations engineered by powers linked to West Kenya filed a high court injunction blocking the construction of the facility at Busibwabo citing environmental concerns.

What has clearly emerged is the fact that the characters who filed the injunction all from Matayos sub-county were being bankrolled through a lawyer who is directly connected with the dealings of West Kenya Sugar Company.

The worst of the emerging state of affairs is that batteries of litigations and counter litigations have since been filed in the high court that have turned into an un-ending nightmare to stall the construction of the factory that was supposed to be completed last year – there are constant court adjournments delays and even transfers since last year.

The constant adjournments of the cases whether deliberately engineered by some of the lawyers involved and the law courts is yet to be known, but what is emerging clearly is the fact there are powerful forces at work here hiding behind the corridors of justice.

As recently as early this month the entire high court hearing the matter went to the factory construction site at Busibwabo to see for themselves what the high court is supposed to hear and determine – when that judgment will come is yet to be known since on returning back to its sitting at the Busia high court the matter was once again adjourned.

However, at the same time as that is taking place the Sugar Cane Buying Centre of West Kenya at Olepito had been drastically transformed into a factory construction site. At the moment the constructions are nearing completion despite the fact that the company did not apply, nor seek or clearance from the National Environmental Management Authority (NEMA).

Documents seen from Agriculture, Fisheries and Food Authority (AFFA) under which the former Kenya Sugar Board was place under the devolved governance structures officially written to West Kenya, copied to the Cabinet Secretary Agriculture, the permanent secretary in the ministry, NEMA, the ministry of finance among others show that the company has flouted the law and gotten away with it.

The documents signed by AFFA CEO Rose Mkok show that the owners of the Olepito facility had not applied to the authority to get clearance and license to construct the factory at the site nor from NEMA for the environmental impact assessment among other government authorizing agencies.

The factory is indeed being constructed less than 100 metres from the Busia – Mumias highway in very close proximity to a busy highway and sharp corner that may pose a major threat to lives through accidents due to heavy trucks, tractors and machineries moving in and out of the factory.

Besides that there is also the question of the regulation that requires that for any sugar factory to be constructed it must be outside the designated operational area of 40 square kilometers of any other existing sugar factory – Busia Sugar Industries is less than 10 kilometres from the clandestine West Kenya facility at Olepito.

The irony of the whole business is the fact that despite its letters and warnings AFFA which is supposed to be the regulatory authority in the sugar industry appears to have been completely toothless in carrying out its duties not only about West Kenya’s facility but on many issues that are plaguing the sugar industry that appears to have been abandoned to mafia cartels operating in the sub-sector.

The country’s environmental authority NEMA cannot be left out in the raging storm that is sweeping across the entire Western Kenya region with no apparent control or legislation in place to regulate the sector – is NEMA exerting its powers?

The leaders in Busia County which hosting the epicenter of the sugar industry storm appear to be completely lost having hungered for factories for decades, with some saying let both the facilities be constructed since they will benefit local farmers, but others vehemently opposed saying the law must be followed.

However the real consequences of the ongoing battles will be borne by the sugarcane farmers because having planted the crop in anticipation of the factory only to find that its completion has been blocked by litigation and the other the wrath of the government when it decides to swing into action.

In the ensuing mess investors may have lost billions of shillings they had staked not only in creating employment but also making a profit consequently that means a major erosion of investor confidence in the county.