State corporations and parastatals were not offices in the public service

Katiba Institute & another v Attorney General & another [2020] eKLR

Constitutional Petition 331 of 2016

High Court at Nairobi

J W Lesiit, E C Mwita & L M Njuguna, JJ

December 4, 2020

Reported by Chelimo Eunice

Constitutional Law – interpretation of the constitution - principles applicable in constitutional interpretation - holistic interpretation of the Constitution – meaning of holistic interpretation of the Constitution – constitutionality of statutes - principles for determining constitutional validity of a statute – constitutionality of statutory provisions which conferred discretion on the President and his cabinet secretaries to make appointments in a manner other than as contemplated by Constitution and applicable values and principles, in that they did not require the appointments to be open, transparent or competitive - construing statutes enacted prior to the 2010 Constitution - Constitution of Kenya, 2010, articles 232, 259, sixth schedule, section 7; Public Officer Ethics Act, section 22; Public Service (Values and Principles) Act, section 10.

Constitutional Law – constitutional commissions – Public Service Commission (PSC) – establishment of the Public Service Commission – functions and mandate of the Public Service Commission – whether the Public Service Commission had the mandate to appoint chairpersons and members of boards of state corporations and parastatals - Constitution of Kenya, 2010, articles 233 and 234.

Constitutional Law – national values and principles of governance – values and principles of public service – requirement that national values and principles of governance bound all state organs, state officers and public officers – requirement that values and principles of public service applied to public service in all state organs in both levels of government and all state corporations – requirement for fair competition and merit as the basis of appointments and promotions in the public service – whether it was mandatory to comply with the constitutional principles of good governance and values and principles of public service or they could be realized progressively – whether the appointment of various chairpersons and members of boards of state corporations and parastatals either by the President or respective cabinet secretaries met the constitutional test of transparency, openness, meritocracy and competitiveness - Constitution of Kenya, 2010, articles 10 and 232; Public Service (Values and Principles) Act, section 10.

Statutes – interpretation of statutory provisions – Public Officer Ethics Act, Public Service Commission Act - interpretation of section 2 of the Public Officer Ethics Act and section 2 of the Public Service Commission Act on definition of public officer – whether the definition of public officer in section 2 of both the Public Officer Ethics Act and the Public Service Commission Act conformed with the definition provided for by the Constitution – who was a public officer – who was a public office - test for determining whether an office was a public office - whether state corporations and parastatals were offices in the public service – whether positions of chairpersons and members of boards of state corporations and parastatals were offices in the public service - Constitution of Kenya, 2010, article 260; Public Officer Ethics Act, section 2; Public Service Commission Act, section 2.

Constitutional Law – public finance – public money - what was meant by public money - public funds – consolidated fund – management of the consolidated fund – whether state corporations and parastatals were funded using public money - whether remuneration and benefits of state corporations and parastatals were drawn from the consolidated fund - Constitution of Kenya, 2010, article 206; Exchequer and Audit Act, section 2; Public Finance and Management Act, section 2; State Corporations Act, sections 10 and 11.

Brief facts

The petition challenged the selection and appointment by the President and members of his cabinet, of persons to the positions of chairpersons and members of boards to various state corporations and parastatals. They sought to have all appointments made by the President or cabinet secretaries gazetted in Gazette Notice volumes; CXVIII – No. 23, CXVIII – No. 28, CXVIII-No. 62, CXVIII – No. 66, CXVIII – No. 70 and CXVII – No.72 (impugned appointments) invalidated. The basis for that challenge was that the mandate to select and appoint persons to those positions ought to be exercised by the 2^nd respondent, and in accordance with the values and principles in articles 10 and 232 of the Constitution. They also sought to nullify provisions in various statutes that purported to give power to the President and his cabinet secretaries to make such appointments (impugned provisions).

The petitioners further sought a declaration that any selection and appointment of persons as chairpersons and members of boards of state corporations and parastatals had to be based on the principles including fair competition and merit and that the process had to be transparent and accountable. They argued that such positions were public offices in the public service, and that those appointed to those positions were public officers and were, therefore, subject to the constitutional provisions applicable to public service.

The respondents opposed the petition arguing, among others, that state corporations and parastatals were not offices in the national or county governments or public service, that most of the impugned provisions were in existence before the 2010 Constitution, and that the Constitution provided a solution where such Acts were found not to be in conformity with it.

Issues

1. Who was a public officer and what constituted a public office?
2. Whether state corporations and parastatals were offices in the public service.
3. Whether remuneration and benefits payable to state corporations and parastatals were drawn from the consolidated fund or money directly provided by parliament.
4. Whether positions of chairpersons and members of boards of state corporations and parastatals were offices in the public service.
5. What principles applied in constitutional interpretation?
6. What principles were applicable in determining constitutional validity of a statute?
7. Whether statutory provisions which provided for appointment of chairpersons and members of boards of state corporations and parastatals in a manner other than as contemplated by Constitution and applicable values and principles were constitutional.
8. How were statutes enacted prior to the 2010 Constitution, 2010 construed?
9. Whether the Public Service Commission had the mandate to appoint chairpersons and members of boards of state corporations and parastatals.
10. Whether constitutional principles of good governance and values and principles of public service or they could be realized progressively.

Held

1. Article 259(1) of the Constitution enjoined courts to interpret the Constitution in a manner that promoted its purposes, values and principles, advanced the rule of law, human rights and fundamental freedoms in the Bill of Rights, permitted the development of the law and contributed to good governance.
2. The Constitution was not simply a statute which mechanically defined the structures of government and the relationship between government and the governed. It was a mirror reflecting the national soul, the identification of ideas and aspirations of a nation, the articulation of the values bonding its people and disciplining its government. The spirit and tenor of the Constitution had to preside and permeate the process of judicial interpretation and judicial discretion.
3. The Constitution was an organic instrument. Although it was enacted in the form of a statute, it was sui generis. It had to be interpreted broadly, liberally and purposively so as to avoid the austerity of tabulated legalism and to enable it to continue to play a creative and dynamic role in the expression and the achievement of the ideals and aspirations of the nation. Constitutional provisions had to be read to give values and aspirations of the people. Courts had to appreciate throughout that the Constitution, of necessity, had principles and values embodied in it. That the Constitution was a living piece of legislation, it was a living document.
4. Holistic interpretation of the Constitution was advocated for. Holistic interpretation meant interpreting the Constitution in context. It was contextual analysis of a constitutional provision, reading it alongside and against other provisions, so as to maintain a rational explication of what theConstitution meant in light of its history, of the issues in dispute and of the prevailing circumstances. Such scheme of interpretation did not mean an unbridled extrapolation of discrete constitutional provisions in each other, so as to arrive at a desired result.
5. The Constitution established various commissions and independent offices. Article 233 of the Constitution established the 2^nd respondent (Public Service commission). Article 234(2) of the Constitution as read with the Public Service Commission Act (PSC Act) provided for the functions and mandate of the 2^nd respondent. According to the PSC Act, the functions of the 2^nd respondent included, establishing and abolishing offices in the public service, appointing persons to hold or act in those offices and promoting values and principles in articles 10 and 232 of the Constitution throughout the public service. Article 232(2) of the Constitution set out the principles of public service and stated that the values and principles applied to public service in all state organs in both levels of government and all state corporations.
6. Different statutes defined what was meant by a public officer. They included section 2 of the Public Officer Ethics Act and section 2 of the PSC Act. The Leadership and Integrity Act, and Public Service (Values and Principles) Act adopted the definition of public officer assigned by article 260 of the Constitution. The definitions in the statutes had to be considered alongside that in the Constitution. Article 260 of the Constitution defined public officer to mean any state officer or any person, other than a state officer, who held a public office.
7. The Public Officer Ethics Act, Public Service Commission Act and Public Service (Values and Principles) Act did not define public office but adopted the meaning of public officer in article 260 of the Constitution. On the other hand, the Leadership and Integrity Act did not define public office, but defined public entity.
8. According to article 260 of the Constitution, determination of whether an office was a public office depended on two tests. The first test being whether it was an office in the national government, county government or public service. The second test was if the remuneration thereof was from the consolidated fund or money directly provided by parliament.
9. On the first test, state corporations and parastatals were not offices in the public service because they were neither offices in the national government nor county government as defined by the Constitution. The Constitution was also clear that to be a public service, there had to be the collectivity of individuals who were performing a function within a commission, office, agency or other body established under the Constitution, except state officers. More importantly, state corporations and parastatals were not offices established under the Constitution. On the second test, even if state corporations and parastatals were to be deemed to be offices in the public service, they would still not pass the test, if remuneration and benefits thereof were not payable directly from the consolidated fund or out of money provided by parliament.
10. Article 206 of the Constitution established the consolidated fund and its management. The consolidated fund was the main bank account of the national government into which all money raised by it or received on its behalf was paid. Money from that account could only be withdrawn with the authority of parliament and such withdrawal approved by the Controller of Budget. In that regard, there was no submission before court that remuneration and benefits of state corporations and parastatals were either drawn or not from the consolidated fund.
11. Section 2 of both the Exchequer and Audit Act and the Public Finance and Management Act, 2012 defined what is meant by public money. It followed, therefore, that public money was any money in the possession of the national government, either raised on its behalf or held by it in trust for third parties.
12. According to sections 10 and 11 of the State Corporations Act and the definition of public money, state corporations were funded using public funds by the treasury through line ministries. That funding though was not exclusive since they also generated their own money from other sources. That was borne by the fact that they submitted estimates of their revenue and expenditure for the following financial year, accompanied by proposals for funding of the projects to be undertaken. That was testimony to the fact that state corporations and parastatals generated their own revenue for expenditure and their funding was not necessarily wholly provided for by parliament.
13. State corporations and parastatals, therefore, were not offices in public service, state organs or bodies established under the Constitution. Remuneration and benefits of chairpersons and members of boards of those bodies were not drawn from the consolidated fund. They were, however, funded by public money from the treasury through line ministries. That funding notwithstanding, and not being state organs or bodies established under the Constitution, they did not qualify as offices in the public service.
14. Public service was the collectivity of all individuals, other than state officers, performing a function within a state organ, while state organ was either a commission, office, agency or other body established under the Constitution. That meant that the collectivity of the individuals had to be performing a function within a state organ established under the Constitution. Offices in state corporations and parastatals were not commissions, offices, agencies or other bodies established under the Constitution. They were, therefore, not state organs within the meaning of the Constitution. Consequently, positions of chairpersons and members of boards of state corporations and parastatals were not offices in the public service.
15. Since positions in state corporations and parastatals were not positions in the public service, the argument that the impugned appointments ought to have been made by the 2^nd respondent was untenable. Whereas the 2^nd respondent was the institution responsible for establishing and abolishing offices in the public service and appointing persons to hold or act in those offices, appointments to positions in state corporations and parastatals could only be made pursuant to provisions in the statutes establishing those bodies.
16. The Constitution in article 132(4)(a) conferred on the President powers to perform any other executive function provided for in the Constitution or in national legislation. The impugned provisions were national legislations which gave the President power to appoint persons to positions of chairpersons or members of boards in respective state corporations and parastatals. Where national legislation provided that an appointment be made by the President, the appointment could only be made as provided for.
17. The constitutional architecture created room under article 132 for the President to perform some duties as a Head of State, which was a noble thing in a constitutional democracy. One of the noble tasks given to the President was to make state and public appointments even where he had no other role to play in the process of appointment.
18. The argument that cabinet secretaries could not make the impugned appointments was also untenable. The appointments were made pursuant to statutory provisions in statutes establishing those state corporations and parastatals. In that regard, the accusation leveled against the 2^nd respondent, of its inaction or omission, to appoint chairpersons and board members to state corporations and parastatals was unjustified. The 2^nd respondent could not be blamed for not appointing persons to those positions, given that the laws in place were clear on the appointing authorities. There was no justifiable cause to accuse the 2^nd respondent as having committed dereliction of duty. The 2^nd respondent could not purport to act where the law dictated otherwise which would result into unwarranted antagonism. There was no fault on the part of the 2^nd respondent in that regard. The President and cabinet secretaries had the statutory mandate to make the impugned appointments.
19. In the preamble to the Constitution, the people aspired a government based on the essential values of human rights, equality, freedom, democracy, social justice and the rule of law. According to article 4(2) of the Constitution, Kenya was a multi-party democratic state founded on the national values and principles of governance. The national values and principles of governance which bound all state organs in article 10 of the Constitution included the rule of law, democracy and participation of the people, transparency and accountability. The supremacy of the Constitution was emphasized in article 2(1) of Constitution.
20. Article 10 (2) of the Constitution was on national values and principles of governance, while article 232 of the Constitution was on values and principles of public service. Article 232 of the Constitution provided that fair competition and merit was the basis of appointments and promotions in the public service. That was subject to ensuring representation of Kenya’s diverse communities and affording adequate and equal opportunities for appointment, training and advancement, at all levels of the public service of men and women, members of all ethnic groups and persons with disabilities. Values and principles of public service applied to public service in all state organs in both levels of government and all state corporations.
21. Parliament was mandated to enact legislation to give full effect to article 232 of the Constitution. In compliance with that mandate, it parliament enacted Public Service (Values and Principles) Act. Section 10 of the Public Service (Values and Principles) Act provided that the public service, a public institution or an authorized officer, ought to ensure that public officers were appointed and promoted on basis of fair competition and merit. That, however, was subject to affirmative action as demanded by both the Constitution and the Public Service (Values and Principles) Act. Section 10(3) of the Public Service (Values and Principles) Act required each public institution or authorized officer to develop a system for the provision of relevant information that promoted fairness and merit in appointments and promotions.
22. The respondents did not show at all that the impugned appointments were made transparently, openly and competitively. There was no attempt at all to ensure compliance with the constitutional principles of public service, which applied to state corporations and parastatals.
23. Kenya’s constitutional scheme did not require deliberate or progressive reforms. It was the supreme law and bound all persons, state and public officers. Compliance with constitutional principles of public service entailed putting in place mechanisms that guaranteed enforcement of those requirements. When the Constitution spoke of transparency, fair competition and merit, it meant just that. The constitutional principles of public service were not mere suggestions. They were commands that had to be complied with and obeyed without exception.
24. The Constitution also required appointments to be subject to affirmative action. The marginalized, gender and persons with disabilities were to be considered and adequately represented. That conferred a guaranteed right to those groups, which right was protected by the Constitution. The constitutional theme was maximization and not minimization, expansion not constriction, when it came to enjoyment and concomitant facilitation and interpretation. Public institution or authorized officer concerned had to ensure that public officers were appointed and promoted on the basis of fair competition and merit and demonstrable transparency, subject to affirmative action. The 1^st respondent was required to demonstrate that there was indeed an open and transparent process, leading to the impugned appointments, in compliance with the constitutional command.
25. The respondents did not discharge their noble duty. The Constitution provided for compliance with the principles of good governance and values and principles of public service. It did not provide that those principles be progressively realized. The respondents had an obligation to show, to the satisfaction of the court, that the appointments were made as demanded by the Constitution and not otherwise.
26. The argument that the court could not invalidate the appointments because that would amount to making adverse orders against persons who were not parties to the petition would not stand in the face of clear constitutional provisions. The petitioners had not challenged the competence of the persons whose appointments had been questioned. What was challenged was the process through which the appointments were made. Even if those persons were made parties to the petition, they could not argue that their appointments complied with the Constitution. Moreover, some were joined in the petition but did not attend at the hearing. Their failure to participate in the petition could not in any way affect the outcome of the petition.
27. The people of Kenya desired that appointments be made in an open, transparent and inclusive manner taking into account, the marginalized and people with disabilities. They deserved no less. They were entitled to their wish as a matter of right and not privilege. It was a constitutional compulsion. Thus, the impugned appointments did not comply with constitutional values and principles in articles 10 and 232 of the Constitution and the Public Service (Values and Principles) Act.
28. Article 2(4) of the Constitution provided that any law that was inconsistent with the Constitution was void to the extent of the inconsistency, and any act or omission in contravention of the Constitution was invalid. Courts had developed general principles on which to test constitutionality of statutes. First, there was a general but rebuttable presumption that a statute or statutory provision was constitutional and the burden was on the person alleging unconstitutionality to prove the invalidity. It had to be assumed that the legislature understood and appreciated the needs of the people and that the laws it enacted were directed to the problems which were made manifest by experience and that the elected representatives assembled in a legislature, enacted laws which they considered to be reasonable for the purpose for which they were enacted. Presumption was, therefore, in favour of constitutionality of an enactment.
29. The second principle for determining constitutional validity of a statute was by examining its purpose or effect. The purpose of enacting a legislation, or the effect of its implementation, would lead to nullification of the statute or its provision, if found to be inconsistent with the Constitution. If its purpose did not infringe a right guaranteed by the Constitution, the court had to go further and examine the effect of its implementation. If either its purpose or the effect of its implementation infringed a right guaranteed by the Constitution, the impugned statute or section, thereof, would be declared unconstitutional. The object and purpose could be discerned from the intention expressed in the statute itself.
30. The common denominator in all the impugned provisions, save for, the Tourism Act, The National Youth Service Act, 2018 and the National Youth Council Act, was that they conferred discretion on the President and his cabinet secretaries to appoint chairpersons and members of boards of state corporations and parastatals, in a manner other than as contemplated by the Constitution and Public Service (Values and Principles) Act, in that they did not require the appointments to be open, transparent or competitive.
31. Section 22 of the Public Officer Ethics Act provided that a public officer ought to practice and promote the principle that public officers were to be selected on the basis of integrity, competence and suitability, or elected in fair elections. On the other hand, section 10(1) of the Public Service (Values and Principles) Act, a normative derivative of article 232 of the Constitution, provided that the public service, institutions or authorized officers were to ensure that public officers were appointed and promoted on the basis of fair competition and merit, subject to affirmative action.
32. Some of the impugned provisions did not require that appointments be made in a transparent and competitive manner. The provisions simply conferred discretion on the appointing authorities to make such appointments as they deemed fit. Most of the provisions did not require that vacancies be advertised, that applicants be subjected to interviews and that only the best would be appointed. Some of the provisions merely laid down qualifications without demanding that there be transparency, and that appointments be based on fair competition and merit. They conferred discretion on the President and his cabinet to make appointments without regard to the Constitution and applicable values and principles. That violated the founding values of transparency and accountability in articles 10 of the Constitution and the values and principles of public service in article 232(1) of the Constitution, which were also emphasized in section 10 of the Public Service (Values and Principles) Act.
33. Ordinarily, a statute or its provision ought to be declared constitutionally invalid for going against the Constitution. However, the challenge was directed to statutes, some of which were enacted prior to the 2010 Constitution. Section 7 of the sixth schedule of the Constitution demanded that laws enacted prior to 2010, be construed with the alterations, adaptations, qualifications and exceptions necessary to bring them into conformity with the Constitution. That was, the impugned provisions on appointment ought to be read as requiring that the appointments be made as required by article 232 of the Constitution, as amplified in sections 10 and 22 of the Public Service (Values and Principles) Act and Public Officer Ethics Act, respectively. That was the bare minimum institutions and authorized officers had to meet when making appointments to state corporations and parastatals, not only those of chairpersons and members of boards, but also all appointments within those institutions.
34. Even though some of the post 2010 statutes did not expressly state that appointments be made in an open, transparent, and based on fair competition and merit, the institutions and authorized officers responsible for making the appointments, had no excuse for not complying with the Constitution and the law. Any appointments whether made under the pre or post 2010 statutes, had to be in tandem with the Public Service (Values and Principles) Act, 2015, which Act was enacted to give effect to the provisions of article 232 of the Constitution. That was the best way to read the impugned provisions, so as to be in conformity with the Constitution, rather than invalidating them. A law or regulation ought to, as much as possible, be read to be consistent and be declared unconstitutional or void, only where it was impossible to rationalize or reconcile it with the Constitution or the Act. It was the duty of a judicial officer to interpret legislation in conformity with the Constitution, so far as that was reasonably possible, while on the other hand, the legislature was under a duty to pass legislation that was reasonably clear.
35. It was not prudent to invalidate the impugned provisions when the appointments could be made in conformity with articles 10 and 232 of the Constitution, as read with section 10 of the Public Service (Values and Principles) Act. The appointments had to, however, be transparent, accountable, competitive and merit based, subject to affirmative action. In order to achieve that, parliament had a duty to ensure that legislations were aligned with the Constitution and Public Service (Values and Principles) Act, when it came to appointments in state corporations and parastatals. The court was, thus, unable to declare the impugned provisions unconstitutional. It, however, emphasized that all appointments to state corporations and parastatals had to comply with the principles in article 10 and 232 of the Constitution and Public Service (Values and Principles) Act.

Petition partly allowed, with each party bearing own costs.

Orders

1. A declaration issued that all appointments made by the President or cabinet secretaries on; March 11, 2016 and gazetted in Gazette Notice Vol. CXVIII – No. 23; March 18, 2016 and gazetted in Gazette Vol. CXVIII – No. 28; June 10, 2016 and gazetted in Gazette No. Vol CXVIII-No. 62; June 17, 2016 under Gazette Notice Vol. CXVIII – No. 66; June 24, 2016, Gazette Notice Vol. CXVIII – No. 70; and July 1, 2016 vide Gazette Notice Vol. CXVII– No. 72, were unconstitutional for violating articles 10 and 232 of the Constitution and the Public Service (Values and Principles) Act, and therefore invalid.
2. An order issued quashing the appointments made on March 11, 2016 and gazetted in Gazette Notice Vol. CXVIII – No. 23; March 18, 2016 and gazetted in Gazette Vol. CXVIII – No. 28; June 10, 2016 and gazetted in Gazette No. Vol CXVIII-No. 62; June 17, 2016 under Gazette Notice Vol. CXVIII – No. 66; June 24, 2016, Gazette Notice Vol. CXVIII – No. 70; and July 1, 2016 vide Gazette Notice Vol. CXVII– No. 72.