The Manufacturers Association of Nigeria (MAN) called on the Governor of Lagos State, Babajide Sanwo-Olu, to use his good office to order the immediate reopening of the closed factories of Nigerian Bottling Company, FrieslandCampina, and Guinness Nigeria Plc, by the Lagos State Water Regulatory Commission (LASWARCO).
Mr Adewale-Smatt Oyerinde, the Director-General of Nigeria Employers’ Consultative Association (NECA), also appealed to Governor Babajide Sanwo-Olu to intervene in the matter to save businesses in Lagos from further woes.
In an open message to Governor Sanwo-Olu today, Segun Ajayi-Kadir, the Director-General of MAN, said that the association is constrained to convey this open message to the Governor of Lagos State, as all attempts at approaching the relevant heads of agencies and ministry have failed.
He said: “MAN is appalled by the inauspicious act of sealing factories over their purported refusal to pay the astronomical and unjustifiable water abstraction fees imposed by the Commission.
This action is ill-timed and quite unfortunate, as the Commission and MAN had engaged in meaningful dialogue and reached some agreements over the lingering issue about three months ago.
This was expected to culminate in an MoU to commence in January 2025. Only three weeks ago, another round of discussions took place between LASWARCO and representatives of MAN, including the affected member companies, which led to ongoing discussions in the companies as to the most viable option for addressing the alleged outstanding payments from earlier contested fees.
It was while these discussions were going on and during the Yuletide that the Commission decided to cause this major and unwise shutdown of the companies.
It is important to properly situate this inappropriate action within the context of the prevailing inclement operating environment in general and the downturn in the manufacturing sector in particular.
A situation where industries are burdened with payments above N100 million for generating water for production purposes, in the face of the government’s failure to supply the same, is unfair.
The exorbitant fees and the untoward means of extracting payment exemplify the negative impact of the tyranny of regulation on private business.
“NECA Director-General condemned the regulatory actions by LASWARCO, warning that it is capable of scaring potential investors away from the state.
He emphasized that organized businesses are not against responsible regulations. He, however, noted that in the quest for revenue generation, the LASWARCO and, indeed, all other regulatory agencies should adopt a more legitimate and civil approach rather than the predominant disruptive pattern of recent times.
“Those patterns are directly against the efforts of the Federal Government to attract investment, promote job creation, and facilitate responsible regulations,” Oyerinde said.
Oyerinde described the demand for unjustifiable multimillion sums as water abstraction levies from businesses that had already paid many other forms of taxes for the same activities they use the water for as unreasonable.
“May we reiterate that it is the responsibility of the government to provide water for its citizens and businesses,” he said.
He noted that the government was not currently fulfilling this noble responsibility.
” It will be highly insensitive, harsh, and punitive for the same government that has failed to adequately provide water to also impose punitive levies on businesses that are constrained to make investments in providing water to run their businesses,” he said.
BACKGROUND
Mr. Olowu Babatunde, Director of Technical Services at LASWARCO, announced the enforcement actions on Tuesday, December 24th, 2024.
He disclosed that the Commission had been engaging with these companies for over seven years to ensure compliance with water abstraction regulations, but these efforts had largely been unsuccessful.
The State Commissioner for the Ministry of Environment and Water Resources, Tokubo Wahab, also explained that in 2020, the Lagos State Government introduced a 75% waiver on groundwater abstraction fees to encourage compliance, but the response from organisations was limited.
This led LASWARCO to implement enforcement measures, including issuing notices to non-compliant organisations with a 72-hour deadline to meet regulatory requirements.
Companies that failed to comply faced penalties, including the sealing of their premises and other legal actions.