Summary of Key Points
The Kenyan government imposed a 5% "fish landing fee" on aquaculture businesses through an administrative regulation, based on sales revenue. An industry association filed a lawsuit but lost due to procedural issues. The government and the industry signed a joint communique promising to abolish this fee, yet this commitment was not turned into formal legislation. After the government reinstated the fee, individual farmers filed another lawsuit, and the court issued a temporary ban to suspend the collection of the fee. This entire incident has exposed the actual workings of the separation of powers in Kenya and served as a lesson for businesses operating there: personal connections are unreliable; the law is the true safeguard of rights.
I. The Incident: A Fee Dispute Triggered by Fish
The story began in 2024:
1. Government's Fee Increase: The Kenyan government initially issued a fisheries regulation and later secretly amended it to include a 5% fee based on sales revenue, which farmers considered a tax.
2. Association's Lawsuit: The industry association sued the government, claiming the increase was unconstitutional as it did not involve public participation and that the fee had no connection to government services, constituting arbitrary taxation.
3. Signing of a Joint Communique: The relevant minister facilitated negotiations, and both parties agreed to cancel the 5% fee and replace it with a fee based on production or area (with micro-businesses paying only 500 shillings, with a maximum of 1 million shillings).
4. The Promise Falls Through: The joint communique was not legalized, and no formal agreement was signed; the original regulation remained in effect.
5. Association's Loss in Court: The court dismissed the association's lawsuit, stating it lacked legal status and sufficient evidence.
6. Government Reinstates the Fee: The fisheries department began collecting the 5% fee, putting significant pressure on the industry.
7. Individual Farmers File Another Lawsuit: Farmer Victor filed a lawsuit personally, focusing on the 5% fee and using the joint communique as evidence to argue that the government's reversal was unfair.
8. Court Issues a Ban: The court issued a temporary ban on the collection of the 5% fee until the case was fully adjudicated.
II. Why Does the 5% Fee Cause Such Frustration Among Farmers?
The 5% fee is not a trivial amount:
- Direct Impact on Profits: For example, if a company earns 10 million shillings (about 500,000 RMB) from selling fish, the 5% fee amounts to 500,000 shillings (25,000 RMB). If the net profit is only 1 million shillings, half of the profit is gone! This can be devastating, especially if there are high mortality rates among fish or feed prices rise.
- Unfair Comparison: Other industries such as cattle farming, chicken breeding, and tea planting do not face this fee, while wild fishing (which uses resources from the lake) only pays a fixed amount. Farmers, who invest in breeding and feeding, are taxed based on sales revenue—this is clearly unfair.
- Impact on the Entire Chain: Many Chinese companies are involved in fish farming, feed production, and processing in Kenya. The 5% fee will increase the costs for the entire supply chain, affecting all parties.
III. The Separation of Powers Is Not Just Theory—It's Being Put into Practice
Kenya has a presidential system with a clear separation of powers (executive, legislative, and judicial). In this case, all three branches were involved:
- Executive Power: The minister can establish regulations but cannot impose taxes arbitrarily. The government argued that the minister had the authority, but lawyers countered that this constitutes taxation and requires parliamentary approval (similar to how a property manager in a residential complex cannot raise fees without the consent of the residents).
- Legislative Power: Parliament reviewed the regulation, but farmers questioned whether it authorized the collection of a sales tax. The issue arose because the legislation might not have been carefully crafted.
- Judicial Power: In the first lawsuit, the association lost due to procedural errors; in the second, an individual farmer won a temporary ban because the evidence was sufficient and the strategy was effective. The court did not side with the government but applied the rules fairly.
- Internal Disputes within the Executive Branch: Although the minister agreed to cancel the fee, the enforcement department proceeded with its collection—similar to a company's boss agreeing to a raise but the HR department not implementing it.
IV. Why Did the Two Lawsuits Have Such Different Outcomes?
The difference in outcomes lies in the lawyers' strategies:
- Appropriate Legal Entities: The first lawsuit was filed by an industry association without legal status and authorization, while the second was filed by an individual farmer directly affected by the fee.
- Focused Claims: The first lawsuit aimed to overturn the entire regulation, making it more difficult to win; the second focused on the specific issue of the 5% fee, making it easier to achieve a result.
- Comprehensive Evidence: The second lawsuit provided additional evidence, including the joint communique and government letters, proving that the government's promises were untrustworthy.
- Temporary Measures First: Instead of seeking a final judgment, the lawyer applied for a temporary ban to prevent businesses from going bankrupt before the case was resolved.
V. Chinese Enterprises in Africa: Rely on the Law, Not Just Personal Connections
Many Chinese businesses in Africa rely on personal connections, but this incident shows that:
- Personal Connections Can Be Unreliable: A minister's promise may be revoked, and a department's decision to waive a fee can be overturned by another.
- The Law Is the Surest Option: A joint communique must be legalized through a formal legal document (such as a presidential decree or court order).
- United Action Is Stronger: Chinese businesses working together with local farmers is more effective than acting alone.
- The Importance of the Rule of Law: It's not about the government never making mistakes; it's about having the means to hold it accountable through legal action.
In conclusion, understanding the market and personal connections is important when doing business in Africa, but knowing the law is crucial. When the government seeks to impose fees, you can use the law to assert your rights: "Prove that you have the authority to require payment!" This is the true foundation for protecting your interests.
(The case is still ongoing, but this "fish war" has demonstrated that power does not always follow the rules. Only when businesses dare to defend their rights, lawyers are willing to challenge authorities, and courts are independent can the separation of powers truly function.)