‘MAN is appalled by the inauspicious act of the Lagos State Water Regulatory Commission (LASWARCO) in sealing factories over their purported refusal to pay the astronomical and unjustifiable water abstraction fees imposed by the Commission.’
Siaka MOMOH
The Manufacturers Association of Nigeria (MAN) has petitioned the Lagos State Government over what the association described as the unwarranted and ill-timed sealing of some industries in the state by the Lagos State Water Regulatory Commission (LASWARCO).
MAN in a letter which was signed by its director general, Segun Ajayi-Kadir, said it 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.
According to the letter, “MAN is appalled by the inauspicious act of the Lagos State Water Regulatory Commission (LASWARCO) in 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 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 is while this 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 in excess of N100 million for generating water for production purpose, in the face of government’s failure to supply same, is unfair.”
MAN said the exorbitant fees and the untoward means of extracting payment exemplifies the negative impact of tyranny of regulation on private business. To date, manufacturers across the country are saddled with more that N1.2billion of unsold inventory, borrowing at more than 30% and struggling under a debilitating 250% increase in the cost of power, it stated.
MAN stated that there are numerous taxes, fees and levies by the three tiers of government and non-state actors in some cases, numbering between 60 to 120 confront each manufacturer, not to mention the disruption of production activities due to insecurity and high cost of logistics.
MAN argued: “ There are more! So to add this oppressive water abstraction fee in Lagos state that may potentially be adopted by other States, presents an ominous and rancorous future for manufacturers in particular and private businesses in general. MAN therefore implores the Governor of Lagos state to use his good office to order the immediate reopening of the closed factories.”
“This will pave the way for a logical and passable conclusion of the ongoing conversations on how to permanently resolve the matter of outstanding fees, as well as conclude the impending MoU between the Water Commission and the Organised Private Sector.
“This is more so that the private sector is currently awaiting the finalization of the text of the MoU from LASWARCO. We are full of expectations that immediate action is taken in the interest of the state’s economy and to forestall a possible degeneration in the already tense business atmosphere.”
It stated that the possible loss of jobs and its attendant socioeconomic implications, as well as the negative signal to the investing public, should serve as a deterrent and encourage a business-friendly regulatory environment.
The Lagos State Water Regulatory Commission sealed three companies for extracting large quantities of groundwater for commercial purposes without proper authorisation and compliance with regulations.
The News Agency of Nigeria reports on Tuesday that the three companies are Nigerian Bottling Company, producers of Coca-Cola, FrieslandCampina, makers of Peak Milk and Guinness Nigeria Plc.
The Director, Technical Services, LASWARCO, Mr Olowu Babatunde, said this during an enforcement on Tuesday in Lagos.
Babatunde said that LASWARCO had been engaging with these companies for over seven years to encourage compliance but efforts have been met with limited success.
Sad he: “We operate a law that empowers us to regulate most of these heavy abstractors in Lagos State.
“Abstractors are individuals or entities that extract large quantities of groundwater for commercial purposes. So, these companies that we have sealed, basically three of them – Coca-Cola, FreislandCampina and Guinness, abstract water in large quantities. And we have been engaging them over time. At least, I have been here for more than seven years now. We’ve been engaging these companies for more than seven years now.
“Some, either they do partial compliance, or some don’t comply at all. So, now that we started implementation of our regulation, we now compel them to fulfill all their regulatory demands.”
The enforcement was a follow-up of a news briefing on unregulated groundwater abstraction by Mr Tokunbo Wahab, the Commissioner, Ministry of the Environment and Water Resources, held on Monday.
Wahab noted that the Environmental Management Protection Law 2017 empowered LASWARCO to regulate groundwater activities and impose penalties for unauthorised abstraction.
He said that unregulated groundwater extraction could lead to serious environmental consequences, including land subsidence and groundwater contamination.
The commissioner said in 2020, the government offered a 75 per cent waiver on groundwater abstraction fees, but compliance was low.
This, he said, necessitated LASWARCO to now initiate enforcement actions against defaulters.
He said that letters were issued to non-compliant organisations with a 72-hour ultimatum to comply and penalties would be imposed on those who continued to operate without authorisation.
