[kictanet] Legislation and Regulation for e-Commerce in Kenya

Tue Jul 8 10:10:29 EAT 2008

Dear Marcel,

Good review of the proposed bills. I happen to have participated in the
preparation of the Draft e-Transaction Bill and would like to respond to
some of the concerns in my own capacity as a Kenyan citizen. Another caveat
is that apart from attending a one week course on legal aspects of
e-Commerce, law is a stranger in my being. See my responses to the specific
issues the analysis raises below:

Harry

1.     Provisions on who can prosecute are missing

This is actually covered in Schedule C, under the investigations of offenses
section and article 21 gives the commissioner of police the authority to
prosecute. Under the same section, there is a proposal to constitute special
investigation unit on cyber crime.

2.     Liability of Internet Service Providers must be demarcated

You may want to be abit elaborate on this. Part IV of the proposed bill
tries to indemnify service providers from third party felonies. Would you
prefer for instance that we have data providers and internet service
providers as separate have separate limitations?

3. Clarification on which commercial documents are excluded from proposed
legislation

In the initial drafts of the proposed law, the documents had been listed as
title deeds, bearer bonds and letter of credit; this is actually best
practise as proposed by the UNCITRAL models laws on e-commerce. The concept
tries not to cover documents that can be exchanged for cash/service or
goods.

4. Eliminate any ambiguity on admissibility of electronic evidence

The question of admissibility of electronic evidence is covered very well in
Schedule B which has proposed amendments to the Evidence Act. I do not see
any ambiguity in this section unless you can point out something specific.

5. Need for data protection and privacy provisions

Articles 31-34 of the proposed bill covers protection of private
information. Is this insufficient?

6. The Bills are more lenient on e-commerce fraud than on traditional fraud

Might need some research on this.

7. Remove inconsistencies in determining crimes and punishments

I tend to agree with the analysis here...for instance spamming the proposed
fine is 200,000 and spoofing the proposed fine is 2m. May need some
reworking in line with the weight of the offence.

8. Provisions for the inclusion of cyber-crime within the scope of the
Extradition Act

The bill proposes that the clause "all the crimes mentioned in the
Electronic Transactions Bill 2007", this clause enough to amend the
Extradition Act to include the crimes that have been identified in the
proposed bill.

9. Creation of an Administrator for e-commerce laws whose functions will be
policy implementation and advisory, as a multi-sectoral body with industry
associationsincluding KIF, lead regulator communications Commission of Kenya
and co-regulator

Central Bank of Kenya

We belaboured on this and initially came up with a proposal to have a
multi-stakeholder agency, akin to KENIC, to administer the act but after
long discussions and consultations, the team was unable to come out as
boldly as you did for several reasons. 

i)              We were aware of the fact that proposing the creation of a
new body has some budgetary implications and therefore would slow down the
process of enacting the law.

ii)             The Bill was developed towards the end of last year, the
mood at that time was that anything that went to parliament had the risk of
being politicised and therefore aligning the bill to specific institutions
was suicidal

From: kictanet-bounces+harry=africanedevelopment.org at lists.kictanet.or.ke
[mailto:kictanet-bounces+harry=africanedevelopment.org at lists.kictanet.or.ke]
On Behalf Of Marcel Werner
Sent: 06 July 2008 17:44
To: harry at africanedevelopment.org
Cc: secretariat at kif.or.ke; KICTAnet ICT Policy Discussions
Subject: [kictanet] Legislation and Regulation for e-Commerce in Kenya

Legislation and Regulation for e-Commerce in Kenya

Kenya ICT Federation (KIF) - Briefing Note # 3  - Report - Public Panel 19
June 2008

Electronic commerce (e-commerce) will add at least one percent point growth
to Kenya's overall economic growth within five years. This is contingent
upon the adoption of legislation that supports electronic transactions.
Kenya, as an emerging economy and regional leader, lags behind in having a
legal framework for e-commerce in place. The current situation is an
anachronism hampering national development, placing provincial centres at a
disadvantage, and harming global competitiveness. Both external and internal
trade require the new framework.The Kenyan private sector strongly supports
e-commerce legislation, as well as legislation of the Information and
Communication Technology sector that guarantees an open market and promotes
innovation.

Why e-commerce law? Today, legislation supporting electronic transactions
represents the single most powerful innovation opportunity in the legal
framework of the ICT sector. Legislation is needed to:
-Legalize e-commerce transactions by recognizing an electronic signature
-Manage and control e-commerce risks
-Remove e-commerce barriers
KIF has studied drafts currently circulating in the public domain, the
Information and Communications Bill, 2008, and the Electronic Transactions
Bill, 2007, respectively, both of which are of the highest technical
standards. Public panels and hearings with sectors of the economy (including
tourism, agriculture, ICT) have been held on 6th and 27th May, 4th June and
19th June. The Kenyan private sector has expressed overwhelming support for
urgent legislation of e-commerce.

Suggested improvements in Bills - The public panels and hearings to date
have yielded the following important issues for improvement in the current
Bills:

-          Provisions on who can prosecute are missing

-          Liability of Internet Service Providers must be demarcated

-          Clarification on which commercial documents are excluded from
proposed legislation

-          Eliminate any ambiguity on admissibility of electronic evidence

-          Need for data protection and privacy provisions

-          The Bills are more lenient on e-commerce fraud than on
traditional fraud

-          Remove inconsistencies in determining crimes and punishments

-          Provisions for the inclusion of cyber-crime within the scope of
the Extradition Act

-          Creation of an Administrator for e-commerce laws whose functions
will be policy implementation and advisory, as a multi-sectoral body with
industry associations including KIF, lead regulator Communications
Commission of Kenya and co-regulator Central Bank of Kenya

Gains in tourism, agriculture, healthcare

Industry sectors, notably the tourism industry, are expressing their desire
to see e-commerce covered by law. In tourism, on-line travel bookings have
exceeded 80% in the USA and 50% in Europe. Decline in off-line bookings is
in ample evidence. Those destinations that cannot legally support abundant
on-line booking, such as Kenya, will loose market share. E-commerce in
agriculture will improve small-holder's living standards. Great impact is
expected notably in the coffee sector that provides livelihood to at least 5
million Kenyans, as well as in the dairy industry. Healthcare efficiency and
affordability will improve by on-line health data management systems.
Business operators in rural towns and rural centres have also expressed keen
interest, as they see scope to address issues of trade efficiency and
security in rural Kenya.

What is e-commerce

E-commerce is a method of trading that replaces paper-based documentation by
a mutually binding electronic protocol between buyers and sellers.
E-commerce is gaining ground globally and has become an irreversible trend.
Many trading partners are already practicing e-commerce, by mutual
agreement, also in Kenya. However, e-commerce will reach its full potential
when parties that do not know each other are able to trade with full mutual
protection under the law. This will benefit large numbers of consumers and
businesses, including small-holder farmers, tourism operators, small-scale
industry and services providers in almost any business sector.

About KIF

The Kenya Information and Communication Technology Federation (KIF)
represents the ICT industry with Government and with private sector bodies
e.g. Kenya Association of Manufacturers and Kenya Private Sector Alliance
<http://www.kepsa.org/> KEPSA. KIF is a legally registered membership based
Association, made up of trade associations and professional bodies within
the national ICT industry, as well as commercial corporations. KIF has been
accepted as the private sector voice of ICT by Government. KIF contributes
ideas to key sectors like healthcare, education, agriculture, construction
industry, and last but not least supports e-government development. KIF is a
membership-driven organisation. Members bring issues on public policy and
industry development forward for KIF to take action. Issues include:
innovation promotion, education improvement, duties, taxes and levies, rural
ICT investment. KIF has a strong and active network, with excellent
relationships with all government agencies. KIF membership is open for
market segment associations and individual companies. Membership charges are
annual and based on company size. Contact: secretariat at kif.or.ke, 020
4440102

MARCEL WERNER, Chairman, Kenya ICT Federation

please send any business mail to:
Marcel.Werner at innovation-africa.or.ke 

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