Tea Act

Section 1. Short title Section This Act may be cited as the Tea Act.

Section 2. Interpretation Section In this Act— "auction" means a physical or electronic system where potential buyers place competitive bids for tea; "auction organizer" means a person, company or firm established for the purpose of organizing tea auctions in Kenya; "blending" means the art of mixing of teas of different types and grades to affect the flavour and characteristics of the tea for the purposes of packing and sale; "Board" means the Tea Board of Kenya established under section 3 ; "broker" means a person or company or firm established for the purpose of negotiating the purchase or sale of tea between tea growers or tea factories and buyers for a fee; "buyer" means a person, company or a firm engaged in acquiring made tea for sale in the local or export market, including export of imported tea; "Cabinet Secretary" means the Cabinet Secretary for the time being responsible for matters relating to agriculture; "commercial green leaf transporter" means a person, a firm or a corporate body contracted by a tea factory to provide green leaf transport services from the farm or leaf collection centre to the tea factory at a fee; "commercial tea nursery" means a person or firm wh...

Section 3. Establishment of Board Section 3(1) There is established a Board, to be known as the Tea Board of Kenya. Section 3(2)(a) suing and being sued; Section 3(2)(b) purchasing or otherwise acquiring, holding, charging and disposing of movable and immovable property; Section 3(2)(c) borrowing and lending money; and Section 3(2)(d) doing or performing all other things or acts necessary for the proper performance of its functions under this Act which may lawfully be done or performed by a body corporate.

Section 4. Headquarters Section 4(1) The headquarters of the Board shall be in Nairobi City County. Section 4(2) The Board may establish such branches in Kenya as it may consider necessary for the efficient performance of its functions.

Section 5. Functions of the Board Section develop, promote and regulate the development of the tea industry;

Section 6. Powers of the Board Section 6(1)(a) enter into contracts; Section 6(1)(b) manage, control and administer the assets of the Board; Section 6(1)(c) receive gifts, grants, donations or endowments made to the Board and make disbursement therefrom in accordance with the provisions of this Act; Section 6(1)(d) collaborate with such bodies or organizations within or outside Kenya as it may consider desirable or appropriate and in furtherance of the object and purpose for which the Board is established; Section 6(1)(e) determine the provisions to be made for capital and recurrent expenditure and for the reserves of the Board; Section 6(1)(f) ensure the proper and effective performance of the functions of the Board; Section 6(1)(g) manage, control and administer the Tea Fund for purposes that promote the object and purpose of this Act; Section 6(1)(h) subject to the approval of the Cabinet Secretary for the time being responsible for matters relating to finance, invest any of the Board's funds not immediately required for the purposes of this Act, as it may determine; and Section 6(1)(i) operate a bank account into which all monies received by the Board shall be paid in the first...

Section 7. Membership of Board Section 7(1)(a) a chairperson appointed by the President by notice in the Gazette ; Section 7(1)(b) the Principal Secretary responsible for agriculture or a representative nominated by the Principal Secretary in writing; Section 7(1)(c) the Principal Secretary responsible fpr trade or a representative nominated by the Principal Secretary in writing; Section 7(1)(d) the Principal Secretary responsible for National Treasury or a representative nominated by the Principal Secretary in writing; Section 7(1)(e) one person of either gender, who shall have knowledge and experience in the tea sector and be from either the East and West tea blocks, nominated alternatingly by the Council of Governors; Section 7(1)(f) four persons, two of either gender, representing and elected by small scale and medium scale tea growers from the East and West of the tea blocks: Provided that two persons shall be from each of the tea blocks; Section 7(1)(g) one person elected and representing large scale tea growers; Section 7(1)(h) one person elected and representing tea traders; Section 7(1)(i) a chief executive officer appointed in accordance with section 13 who shall be an ex...

Section 8. Term of appointment Section 8(1) The persons appointed under section 7 (1)(a), (d), (e), (f), and (g) shall serve for a term of three years renewable for one further term. Section 8(2) The persons appointed under section 7 (1)(a), (d), (e), (f) and (g) shall be appointed at different times so that their respective expiry of terms of office shall fall at different times but not more than six months shall lapse between one appointment and another.

Section 9. Vacation of office Section is absent from three consecutive meetings of the Board without notifying the chairperson;

Section 10. Committees of the Board Section 10(1) The Board of Directors may establish such committees as it may consider necessary for the efficient performance of its functions and the exercise of its powers under this Act. Section 10(2) The Board of Directors may co-opt to sit in the committees established under subsection (1), such other persons whose knowledge and skills are necessary for the performance of the functions of the Board.

Section 11. Delegation by the Board Section The Board of Directors may, by resolution, delegate to any committee of the Board or to any member, officer, employee or agent of the Board, the exercise of any of the powers or the performance of any of the functions of the Board under this Act or under any other written law.

Section 12. Remuneration of members of the Board Section The Board of Directors shall be paid such remuneration or allowance as the Cabinet Secretary shall, in consultation with the Salaries and Remuneration Commission determine.

Section 13. Chief executive officer Section 13(1) The chief executive officer shall be competitively recruited and appointed by the Board on such terms and conditions as the Board shall determine. Section 13(2) The chief executive officer shall be responsible for the day to day management of the affairs of the Board. Section 13(3)(a) holds a relevant degree from a university recognized in Kenya; Section 13(3)(b) has at least ten years knowledge and experience in a relevant field; Section 13(3)(c) has at least five years' experience in a position of management; and Section 13(3)(d) meets the requirements of Chapter Six of the Constitution Section 13(4) The chief executive officer shall serve for a term of three years and is eligible for appointment for a further term of three years upon satisfactory performance.

Section 14. Vacancy Section resigns in writing, addressed to the chairperson of the Board of Directors;

Section 15. Corporation Secretary Section 15(1) There shall be a Corporation Secretary who shall be competitively recruited and appointed by the Board. Section 15(2) The terms and conditions of service of the corporation secretary shall be determined by the Board in the instrument of appointment upon the advice of the Salaries and Remuneration Commission. Section 15(3)(a) holds a degree from a recognised university; Section 15(3)(b) is registered under the Certified Public Secretaries of Kenya Act ( Cap. 534 ); Section 15(3)(c) is a member of good standing of the Institute of Certified Public Secretaries of Kenya; Section 15(3)(d) has at least five years' experience in a similar position; and Section 15(3)(e) satisfies the requirements of chapter six of the Constitution. Section 15(4)(a) provide guidance to the Board of Directors on their duties and responsibilities and on matters of governance; Section 15(4)(b) ensure timely preparation and circulation of Board and Committee papers and minutes; Section 15(4)(c) maintain and update the register of conflicts of interest; Section 15(4)(d) facilitate effective communication between the organisation and the shareholders; and Section 15...

Section 16. Staff of the Board Section 16(1) The Board may employ such officers, agents and staff as are necessary for the proper and efficient discharge of the functions of the Board under this Act and upon such terms and conditions of service as the Board may determine. Section 16(2) In employing staff, the Board shall take into account the gender, regional and ethnic diversities of the people of Kenya, youth and persons with disabilities.

Section 17. Common seal of the Board Section The affixing of the common seal of the Board shall be authenticated by the signature of the chairperson and the chief executive officer or a person designated by the Board.

Section 18. Signing authority Section All letters and instruments written or made by or on behalf of the Board of Directors, other than those required by law to be under seal, and all decisions of the Board of Directors, shall be signed under the hand of the chief executive officer or in the absence of the chief executive officer, a person authorized by the Board.

Section 19. Conduct of business of the Board Section The business and affairs of the Board of Directors shall be conducted in accordance with the First Schedule.

Section 20. Role of national and county governments in the development of tea Section 20(1)(a) the Board, on behalf of the national government, shall be responsible for licensing and charging of levies; Section 20(1)(b) the development of tea grown within the county; Section 20(1)(b)(i) the development of tea grown within the county; Section 20(1)(b)(ii) tea disease and pest control; Section 20(1)(b)(iii) markets within the county; Section 20(1)(b)(iv) cooperative societies within the county; Section 20(1)(b)(v) register commercial tea nursery operators; and Section 20(1)(b)(vi) soil and water conservation. Section 20(2) In order to achieve the objects and purposes of this Act, the national and county governments shall provide an enabling environment for the development of the tea sector.

Section 21. Registration of small scale tea growers and medium scale tea growers Section 21(1) A small scale tea grower and medium scale tea grower shall register with the tea factory to which the respective tea growers deliver green leaf or purple leaf using the prescribed form. Section 21(2) The Cabinet Secretary shall prescribe regulations providing for the procedure for registration of small scale tea growers and medium scale tea growers and the appeal process in case of refusal or denial of registration. Section 21(3)(a) the name of the small scale tea grower and medium scale tea grower; Section 21(3)(b) the location, size and parcel number of the land on which the tea is grown; Section 21(3)(c) the net weight in kilogrammes of green leaf delivered and amount paid submitted annually; Section 21(3)(d) the variety of tea grown; and Section 21(3)(e) such other information as the Board may prescribe. Section 21(4) Where the tea factory has reasonable cause to believe that a person whose particulars are so recorded has ceased to be a small scale tea grower and medium scale tea grower, it may, after giving that person written notification by registered post of its intention to do so...

Section 22. Board of directors of tea factory limited companies Section 22(1) The Board of Directors of tea factory limited companies shall be a maximum of five members. Section 22(2) The Board shall put in place mechanisms to ensure that not more than two-thirds of the Board of Directors of tea factory limited companies elected or appointed are of the same gender. Section 22(3) The Board of Directors of tea factory limited companies shall be elected through a democratic system of one grower, one vote. Section 22(4) Where a Board member for tea factory limited company is temporarily unable to perform their duties, the Board may appoint another person from the respective block to act in their place during the period of absence.

Section 23. Registration of large scale tea growers Section 23(1) A large scale tea grower shall register with the Board in a prescribed form and shall pay the prescribed fee. Section 23(2) The Cabinet Secretary shall prescribe regulations providing for the procedure for registration of large scale tea growers and the appeal process in case of refusal or denial of registration. Section 23(3) A person who grows tea in contravention of subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding one million shillings, or imprisonment for a term not exceeding two years, or to both.

Section 24. Tea grower certificate Section The manager of a tea factory shall issue a certificate of registration to a small scale tea grower, medium scale tea grower or a large scale tea grower in the form prescribed in regulations.

Section 25. Licencing of manufacturers Section 25(1) A person shall not manufacture tea for sale except under and in accordance with a licence issued under this Act. Section 25(2) A person shall apply for a manufacturing licence to the Board in a prescribed form and shall pay the prescribed fee. Section 25(3)(a) issue a manufacturing licence, in accordance with this Act; Section 25(3)(b) refuse to issue the licence on any ground which may appear to the Board to be sufficient and inform the applicant in writing of the reasons thereof; Section 25(3)(c) cancel, vary or suspend any licence if in the findings of the Board, the licensee is found to have contravened the regulations made under this Act for the operation of manufacturing entities. Section 25(4) A manufacturing licence issued under this section shall in addition to authorizing the holder to carry on the business set out in subsection (1), also authorize the holder to carry out the business of packing and blending tea. Section 25(5) Before the issuance or renewal of a manufacturing licence for a tea factory limited company the Board shall satisfy itself that the applicant has a procurement policy providing for competitive pro...

Section 26. Register of manufacturers Section the full names of the manufacturer;

Section 27. Illegal manufacture, possession, etc Section 27(1)(a) manufactures tea for sale in contravention of this Act; Section 27(1)(b) has been grown, manufactured or processed otherwise than in accordance with this Act; Section 27(1)(b)(i) has been grown, manufactured or processed otherwise than in accordance with this Act; Section 27(1)(b)(ii) is from a non-registered grower or dealer of such crop. Section 27(2) A person who commits an offence under subsection (1) shall be liable, on conviction, to a fine not exceeding ten million shillings, or to imprisonment for a term not exceeding five years, or both. Section 27(3) If a person is in possession or has control of tea for which the person is unable to account to the satisfaction of a crop inspector under this Act, such tea shall be deemed to have been grown, manufactured or dried otherwise than in accordance with this Act until the contrary is proved. Section 27(4) If a person is convicted of an offence under this section, the court shall order that any tea and any vehicle, vessel or other conveyance in relation to which an offence has been committed shall be forfeited to the Government unless, in the case of a vehicle, vess...

Section 28. Registration of warehouse operator Section 28(1) Every warehouse operator shall register with the Board. Section 28(2) A person shall not store tea unless the person is registered in accordance with this Act. Section 28(3) The Cabinet Secretary shall prescribe regulations providing for the procedure for registration of warehouse operators and the appeal process in case of refusal or denial of registration. Section 28(4) A person who contravenes subsection (2) commits an offence and shall on conviction be liable to imprisonment for a term not exceeding three years or to a fine not exceeding five million shillings or to both.

Section 29. Registration of tea packers Section 29(1) Every tea packer shall register with the Board. Section 29(2) A person shall not pack tea unless the person is registered in accordance with this Act. Section 29(3) The Cabinet Secretary shall prescribe regulations providing for the procedure for registration of tea packers and the appeal process in case of refusal or denial of registration. Section 29(4) A person who contravenes subsection (2) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding three years or to a fine not exceeding five million shillings or to both.

Section 30. Registration of a tea buyer, exporter or importer Section 30(1) A person who intends to carry on the business of tea buying, tea exporting or tea importing shall register with the Board. Section 30(2) A person shall not carry on the business of buying tea, exporting or importing tea unless the person is registered in accordance with this Act. Section 30(3) The Cabinet Secretary shall prescribe regulations providing for the procedure for registration of tea buyers, tea exporters and tea importers and the appeal process in case of refusal or denial of registration. Section 30(4) A person who contravenes this section commits an offence and shall on conviction be liable to imprisonment for a term not exceeding three years or to a fine not exceeding five million shillings or to both.

Section 31. Tea imports Section 31(1)(a) provide evidence that the teas they intend to import are not available in the local market or at the tea auction; Section 31(1)(b) provide a sample of the teas to be imported and pre-import verification certificate from the country of origin; and Section 31(1)(c) obtain pre-import approval from the Board. Section 31(2) A person who contravenes this section commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding three years or to a fine not exceeding five million shillings or to both.

Section 32. Registration of a tea broker Section 32(1) Every tea broker shall register with the Board. Section 32(2) A person shall not negotiate the purchase or sale of tea unless the person is registered in accordance with this Act. Section 32(3)(a) the procedure for registration of a tea broker and the appeal process in case of refusal or denial of registration; Section 32(3)(b) the maximum number of tea factories that shall be served by a tea broker. Section 32(4) The remuneration paid to a tea broker by a tea factory limited company and a tea buyer or exporter for services rendered shall not exceed zero point seven five per centum of the gross sales by the broker. Section 32(5) A person who contravenes subsections (2) and (4) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding three years or to a fine not exceeding five million shillings or to both.

Section 33. Registration of a management agent Section 33(1) Every management agent shall register with the Board. Section 33(2) A person shall not perform or offer professional services to a tea factory unless the person is registered in accordance with this Act. Section 33(3) Every management agent shall submit annual returns to the Board and a copy to the respective county government in the form prescribed. Section 33(4) The Cabinet Secretary shall prescribe regulations providing for the procedure for registration of a management agent and the appeal process in case of refusal or denial of registration. Section 33(5) A person who contravenes this section commits an offence and shall, on conviction, be liable to imprisonment for term not exceeding three years or to a fine not exceeding five million shillings or to both.

Section 34. Management agent agreement Section 34(1) A person who intends to manufacture or deal in tea may engage the services of a management agent upon such terms and conditions as may be agreed in the management agreement between them. Section 34(2) A management agent shall sign a management agreement with each tea factory limited company that they intend to offer management agent services to. Section 34(3)(a) submitted to the Board for review and approval before execution by parties; and Section 34(3)(b) for a period of five years, and may be renewed upon expiry at the discretion of the tea factory. Section 34(4) The remuneration for services rendered by a management agent to a tea factory limited company shall not exceed one point five per centum of the net sales value of the tea sold per year. Section 34(5) The staff costs for personnel seconded to the tea factory limited company by a management agent shall be borne by the management agent. Section 34(6) Company Secretarial services shall be excluded from services to be offered by a management agent to a tea factory limited company. Section 34(7) A tea factory shall recruit its own in-house Company Secretary or outsource the...

Section 35. Registration of a tea auction organizer Section 35(1) Every tea auction organizer shall register with the Board. Section 35(2) A person shall not deal in tea as a tea auction organizer unless the person is registered in accordance with this Act. Section 35(3) The Cabinet Secretary shall prescribe regulations providing for the procedure for registration of a tea auction organizer and the appeal process in case of refusal or denial of registration. Section 35(4) A person who contravenes this section commits an offence and shall on conviction be liable to imprisonment for a term not exceeding three years or to a fine not exceeding five million shillings or to both.

Section 36. Auction process Section 36(1) All teas processed and manufactured in Kenya for the export market with the exception of orthodox and specialty teas shall be offered for sale exclusively at the tea auction floor. Section 36(2) All tea factory limited companies shall register with the Board and the auction organizer to participate in the tea auction directly and not through management agents. Section 36(3) An auction organizer shall establish an electronic trading platform for the auction of tea that will be usable and accessible to all players in the value chain. Section 36(4) A buyer shall pay in full the value of the tea bids they have won at the auction before collecting or taking custody of the tea. Section 36(5) Tea brokers, buyers and the auction organizers shall ensure that the proceeds from the sale of tea are remitted to the tea factories accounts within fourteen days from the date of the auction. Section 36(6)(a) at least fifty per centum of payment due for green leaf delivered every month; Section 36(6)(b) the balance due to the tea grower within three months from the end of financial year. Section 36(7) An auction organizer shall develop trading rules to gover...

Section 37. Registration of commercial green leaf transporters Section 37(1) A person who intends to carry on the business of commercial green leaf transporter shall register with the Board. Section 37(2) A person shall not carry on the business of commercial green leaf transporter unless the person is registered in accordance with this Act. Section 37(3) The Cabinet Secretary shall prescribe regulations providing for the procedure for registration of commercial green leaf transporters and the appeal process in case of refusal or denial of registration. Section 37(4) A person who contravenes subsection (2) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding three years or to a fine not exceeding five million shillings or to both.

Section 38. Registration of a commercial tea nursery Section 38(1) A person who intends to establish a commercial tea nursery shall register with the county government where they intend to establish a tea nursery. Section 38(2) A person shall not establish a commercial tea nursery unless the person is registered in accordance with this Act. Section 38(3) The Cabinet Secretary shall prescribe regulations providing for the procedure for registration of commercial tea nurseries and the appeal process in case of refusal or denial of registration. Section 38(4) A person who contravenes subsection (2) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding three years or to a fine not exceeding five million shillings or to both.

Section 39. Considerations before registration and licensing and renewal Section 39(1)(a) the applicant has complied with the provisions of this Act and any other relevant law; and Section 39(1)(b) the applicant or the directors of the company are fit and proper for the function for which they seek a licence or registration. Section 39(2)(a) whether they have taken part in any business practice in the tea value chain that in the opinion of the Board was fraudulent, prejudicial or otherwise improper; or which otherwise discredited their method of doing business; and Section 39(2)(b) whether they have been directors of a company or entity whose licence or registration certificate has previously been revoked or suspended by the Board for any cause. Section 39(3) In determining whether a person or director is fit and proper, the Board shall have due regard to the provisions of the Fair Administrative Action Act (Cap. 7J), the Companies Act (Cap. 486) and any other relevant law.

Section 40. Conditions of a licence Section 40(1) A licence issued under this Act shall be subject to such conditions as the Board may determine and as are specified in the licence and to any conditions which may be prescribed. Section 40(2) The Board shall consider the professional and moral suitability of a person applying for a license and satisfy itself that such a person is a fit and proper person for the grant of the license. Section 40(3) For the purposes of this section, the criteria for assessing the professional or moral suitability of a person applying for a license shall be as prescribed in the Second Schedule. Section 40(4)(a) the financial condition and history of the applicant; Section 40(4)(b) the integrity of its management; Section 40(4)(c) the professional and moral suitability of the persons proposed to manage or control applicant; Section 40(4)(d) the adequacy of the capital structure of the applicant; and Section 40(4)(e) the public interest which will be served by the granting of the licence. Section 40(5)(a) vary the conditions of the licence; or Section 40(5)(b) impose conditions or further conditions on the licence.

Section 41. Application for renewal of a licence Section 41(1) An application for the renewal of a licence under this Act shall be made to the Board in a form prescribed not later than the first day of the month of June in which the current licence is due to expire. Section 41(2) Despite subsection (1), a late application may be made upon payment of a late application fee as may be prescribed by the Board.

Section 42. Revocation or alteration of a licence Section an offence under this Act, or in respect of the licensed activity under any other written law, has been committed by the licence holder or any employee of the licence holder; or

Section 43. Surrender of licence Section 43(1) The holder of a licence which is revoked shall immediately surrender it to the Board. Section 43(2) A licence holder may at any time surrender the licence to the Board and the licence shall cease to have effect immediately.

Section 44. Appeals to the High Court Section 44(1)(a) the grant, refusal, renewal, variation or revocation; or Section 44(1)(b) the conditions imposed on the grant, renewal or variation, of a licence. Section 44(2) An appeal under this section shall be lodged within thirty days from the date on which the appellant first received notice of the decision.

Section 45. Approval of fees charged Section Any fee, commission or other dues charged by a broker, management agent or an auction organizer shall be subject to prior approval by the Board.

Section 46. Declaration of blended teas Section 46(1) A person who blends any or various grades of tea produced in Kenya with any other tea produced outside Kenya shall declare the percentage of Kenyan tea on the packaging and on the blend sheet. Section 46(2) A person who contravenes this section commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding three years or to a fine not exceeding five million shillings or to both.

Section 47. Taxation of tea Section 47(1) Fees imposed by a county government shall not in any way prejudice national economic policies, economic activities across county boundaries or national mobility of goods, services, capital or labour. Section 47(2) The Cabinet Secretary shall, using the structures established under the Intergovernmental Relations Act (Cap. 265F), put in place mechanisms to harmonize fees and charges on tet1 across counties.

Section 48. Tea value addition Section 48(1) All tea buyers or exporters shall value add at least forty per centum of their annual Kenya tea exports within eight years of the commencement of this Act. Section 48(2) The Cabinet Secretary shall in accordance with regulations made under this Act and in consultation with the Board, facilitate the establishment of Common User Facility for tea value addition as may be prescribed.

Section 49. Appointment of crop inspectors Section 49(1) The Board may appoint qualified persons to be crop inspectors for the purposes of this Act. Section 49(2) For purposes of subsection (1), the Board may, by regulations, prescribe the qualifications for a crop inspector.

Section 50. Entry and inspection Section enter any land or buildings occupied by the holder of a manufacturing licence issued under this Act, or a person registered under this Act;