Kenya: The dawn of a new era – the operationalization of the Public Benefits Organization Act

published on 21 May 2024 | reading time approx. 4 minutes

The Public Benefits Organization Act (The PBO Act) has now been operationalized with its effective date being the 14 May 2024. This follows the publication of the Kenya Gazette dated the 9 May 2024. This publication complies with Section 1 of the PBO Act which designated its date of commencement as the date in which the Cabinet Secretary would publish in the Kenya Gazette as the date of commencement. This officially repeals the NGO Coordination Act which had been in application since 14 January 1990.

The PBO Act was passed by Parliament and assented to on the 14 January 2013. It remained in-operational pending the publication of the notice. Different sector players had gone to court seeking to compel the government to publish the commencement of the PBO Act. The court in 2016 and later in 2017 directed the government to publish the commencement date. Unfortunately, these orders were never complied with until this publication.

This delay to operationalize the PBO Act compounded the significant inadequacies of the NGO Coordination Act. The PBO Act had been enacted and passed to proffer a comprehensive regulatory framework to govern the establishment, management, and regulation of public benefits organization.

The lacuna associated with the NGO Coordination Act was faulted and associated with the accountability and transparency shortfalls witnessed in the civil society space which densely interacts with, and in the form and shape of public benefits organizations. In fact, the delay in the operationalization of the PBO Act was cited by the Financial Action Task Force (FATF) as one of the reasons for grey listing Kenya.

The inadequacies associated with the NGO Coordination Act that the PBO Act sought to supplement include:

Predictable and seamless registration process following the establishment of the threshold required to be adhered to by the applicants. This was informed by the unpredictable application of discretion in assessing organizations that had applied for registration under the NGO Coordination Act. This unpredictable discretion prompted some applicants to apply to court to compel the NGO Coordination Board to register them as Non-Governmental Organizations. Further, the PBO Act defines the applicable timelines in the various application stages thus facilitating predictability.
The NGO Coordination Act employed seven different regulatory pieces. This made it very complex to regulate the sector and created the possibility of conflict between the regulations. The PBO Act seeks to harmonize these scattered regulations to the Act and the subsequent regulations.
The NGO Coordination Act did not encompass legal policies that have been established in the modern age such as the preservation of a fair administrative actions, human rights and the constitutional landscape that was shaped by the promulgation of the Constitution of Kenya, 2010.
The NGO Coordination Act did not provide a forum and platform for self-regulation by the sector players. This has been done by the PBO Act in the creation of National Federation of Public Benefits Organizations, which shall be an umbrella organization of all public benefit organizations registered under this PBO Act and the self-regulation forums of public benefit organizations recognised by the Authority. This will enable the sector players to convey their concerns to the government as they will have representation in the Public Benefit Organizations Regulatory Authority.
The PBO Act seeks to introduce a dispute resolution mechanism platform to be employed by the sector players. This is by the establishment of the Public Benefit Organizations Disputes Tribunal.
The PBO Act offers a better and practical compartmentalization of the roles and categorization of the international public benefits organization as well as the local public benefits organization. The PBO Act distinguishes the registration process of an international public benefits organization to that of a local public benefits organization. The PBO Act also mandates the international organizations to have a representative office in Kenya which must have Kenyan citizens who are residing in Kenya comprising of at least a third of all its directors.
The PBO Act tenders systems that enhance transparency and accountability. This works to support the fight against money laundering as well as ensures that donor funds are well accounted for.

It is important to note that the PBO Act recognizes the Non-Governmental Organizations (NGO’s) that were registered under the Non-Governmental Organizations Coordination Act. It confers upon them the status of a public benefits organization. It however imposes an obligation on the same NGOs to register within one year from the commencement of the PBO Act. This window, unless otherwise revised, will lapse on the 13 May 2025.

The PBO Act also extends the exemption from registration granted to organizations under the repealed Act. It, however, mandates the same exempted organizations to register under the PBO Act within three months of the commencement of the application of the Act.

The regulations of the repealed NGO Coordination Act will remain in force in so far as they are not inconsistent with the PBO Act. They will be in force until they are revoked or repealed by subsidiary legislation issued or made under the provisions of the PBO Act.

Whereas there were arguments that there were still salient issues that were not addressed by the PBO Act, the operationalization is a positive stride in streamlining the regulation of the civil society in Kenya. Its operationalization gives credence to the words of Hon. Onguto J. in the case of Trusted Society of Human Rights Alliance v Cabinet Secretary Devolution and Planning & 3 others [2016] eKLR when he stated,

“The PBO Act may have defects, patent and latent, but the defects may only be addressed after the Act has been operationalized and only through Parliament.”

Inevitably, the operationalization will bring about various changes in the public benefits organization sector.