NAIROBI (Thomson Reuters Foundation) - Kenya plans to give some 500,000 refugees living in two sprawling northern camps the right to work and use land for business and farming, after generations of reliance on donors who have found it increasingly difficult to provide for them.

The Refugees Bill, which recently went through its third and final reading in parliament, will become law once the president assents to it, Agostinho Neto, the member of parliament behind the bill, told the Thomson Reuters Foundation on Tuesday.

"We hope that the bill will provide a durable solution to the problems facing refugees in our country," he said.

"This is a progressive law that is forward-looking and will help manage future refugee populations."

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Legally, all refugees in Kenya must live in camps and cannot work, even though some arrived three decades ago.

Food rations for refugees in Kenya, mainly from war-torn neighboring South Sudan and Somalia, have been cut repeatedly due to funding shortages.

Kenya joins a number of organizations, such as the United Nations and World Bank, that are shifting their approach to offer longer-term help for refugees to become more self-sufficient.

Nearly 66 million people globally have fled their homes because of violence, oppression or drought..

"Some of the key elements in the bill include the access to land and work permits, which are a great step in ensuring self-reliance and integration of refugees," said Imaana Koome, program officer at the Refugee Consortium of Kenya.

Work permits will only be granted to refugees with certain skills, he said, and they will not be allowed to sell land.

There have been tensions between poor locals living around the Dadaab and Kakuma camps, who often suffer drought and hunger, and the refugees who receive free food, healthcare and education.

"Hospitals, schools and water points set up within the camps for exclusive use by refugees created feelings of marginalization amongst the host communities," Neto said.

"We hope the bill will address all these."

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Kenyans will be allowed to use services in the camps, he said, and funds will be raised to address environmental degradation caused by refugees felling trees for firewood.

Kenya has tried to shut Dadaab, once the world's largest camp, which it says was being used by Islamist militants from Somalia as a recruiting ground for attacks on Kenyan soil.

It has repatriated more than 60,000 refugees to Somalia since December 2014, the U.N. says.

(Reporting by Daniel Wesangula; Editing by Katy Migiro and Ros Russell Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s rights, trafficking, property rights and climate change. Visit news.trust.org to see more stories.)