Conflicts of Interest in Kenya: Gifts, Side Payments and Your Staff Code

A procurement manager accepts a “token of appreciation” from a supplier. An HR lead quietly consults for a company the employer buys from. A finance officer’s brother-in-law wins a tender. These are conflicts of interest in Kenya that employers often treat as staff discipline issues, but they can also be offences. The Anti-Bribery Act (Cap. 79B, formerly the Bribery Act, 2016) treats gifts, fees and favours as potential bribes, and a company that cannot show a clear, enforced policy on them is poorly placed, both in the Employment and Labour Relations Court (ELRC) and in front of the regulator. This guide explains where the legal lines fall and how to write and enforce a staff code that holds up.

Why a gift can be a bribe

Section 2 of the Anti-Bribery Act defines an “advantage” very widely. It covers money, gifts, loans, fees, rewards and commissions, any office, employment or contract, the release of a debt, and any facilitation payment. Section 6 makes it an offence to request, agree to receive or receive a financial or other advantage intending that a relevant function be performed improperly, or where the request or acceptance is itself improper performance. It does not matter that the advantage passes through a third party or is for someone else’s benefit (section 6(2)).

Section 7 explains what a “relevant function” is. It includes any activity connected with a business and any activity performed in the course of a person’s employment, where the person is expected to act in good faith, impartially or in a position of trust. A purchasing decision fits squarely. We did not find a minimum value anywhere in sections 5 to 7, so a small payment is not safe merely because it is small.

The penalties are serious. An individual convicted under section 6 faces up to ten years’ imprisonment, a fine of up to five million shillings, or both, and may face an additional fine of five times any quantifiable benefit or loss (section 18(1) and (2)). Where a section 6 offence is committed with the consent or connivance of a senior officer, the senior officer and the company are both treated as having committed it (section 16). A director convicted of a bribery offence can be disqualified from being a director for up to ten years (section 18(9)).

What the regulator expects you to have

Section 9(1) requires every private entity to have procedures for preventing bribery appropriate to its size, scale and operations. The Ethics and Anti-Corruption Commission (EACC) has published Model Procedures for entities to customise. They list a conflict of interest policy and a hospitality and gifts policy among the related policies, and name gifts and hospitality and conflicts of interest as high-risk areas. Their compliance checklist asks whether the gift policy has been communicated internally and externally, whether conflicts are disclosed to and managed by an independent person such as a compliance officer, and whether staff certify that they have read and complied with the code of conduct.

The code is also evidence that you have met your section 9 duty.

What a workable staff code contains

The following is our recommendation, not a statutory checklist.

A definition wide enough to mirror the Act. Refer to “any advantage”, not just “gifts”, so that loans, consultancy fees, job offers for relatives and free travel are caught.

A rule on prohibited items. Ban cash and cash equivalents outright, and set a value threshold above which any gift or hospitality must be declared and approved in advance. The amount is a business decision; the point is that it is written down.

A declaration of interests. Require a form on joining, annually, and whenever circumstances change, covering outside work, shareholdings and relationships with suppliers, customers and competitors.

Written consent, not a nod. State that outside work or a disclosed conflict is only permitted with written approval from a named person, and that the approver records how the conflict will be managed, for example by removing the employee from the relevant decision.

An independent recipient. Declarations should go to a compliance officer or other person who does not have a stake in the decision.

Training and acknowledgment. Employees should sign that they have received and understood the code, and high-risk roles such as procurement and finance should be trained regularly.

If your business employs fifty or more people, section 12 of the Employment Act also requires the statement of employment particulars to specify the disciplinary rules or refer to an accessible document that does.

Enforcing the code: what the ELRC looked at

In Arnold Muoki v Local Productions Kenya Limited, the employer dismissed its Human Resource Manager for breaching its conflict of interest and moonlighting policies after he consulted for an outside company and raised invoices for the work. The employer’s code barred staff from having any interest in suppliers, permitted outside work only with the manager’s written consent, and required a declaration of interest form. The employee had trained staff on those policies himself. He said his manager knew he was helping the company. The manager confirmed he had asked for that help, but said he knew nothing of the invoices and had given no written consent for paid work, and the employee had not signed the declaration form. The court found a valid reason proved on a balance of probabilities.

The court also examined procedure. The employer had suspended him on full pay, issued a show cause letter, held a hearing and offered him a colleague to accompany him. The court held that this met section 41 and dismissed the claim. The case shows that a clear written policy, a documented consent regime and a proper hearing are the combination that works.

The same section 41 rules apply whatever the conflict. Section 41(1) requires the employer to explain the reason for considering termination and allows the employee a colleague or union representative, and section 41(2) requires it to hear the employee’s representations. Sections 43 and 45(5) then bring in proof of the reason, consistency with past practice and any earlier warnings. For the investigation steps, see our guide to investigating employee fraud, and if the conduct looks criminal, our guide to dismissal for suspected crime.

When a conflict becomes a bribery report

If the facts suggest a bribe and not merely an undeclared interest, section 14 of the Anti-Bribery Act requires a report to the EACC within twenty-four hours of any knowledge or suspicion, and section 21(2) makes it an offence to demote, dismiss or harass a whistleblower or witness. A conflict-of-interest inquiry should therefore have a clear route for escalating to a bribery assessment.