MAN Sends Open Letter To Lagos State Governor Over Industries Closure By LASWARCO

The Manufacturers  of Nigeria (MAN) has sent an open letter to Mr. Bajide Sanwo Olu, the Governor of Lagos State, regarding what the association claims is the Lagos State Water Regulatory Commission’s (LASWARCO) premature and unnecessary closure of certain industries in the state.

In the aforementioned letter available to BrandSpur national news stories which was signed by its director general, Segun Ajayi-Kadir, MAN stated that it is compelled to communicate this open message to the Lagos State governor because all efforts to contact the appropriate heads of ministries and agencies have been unsuccessful.

According to him: “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 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 over N100 million for generating water for production purpose, in the face of government’s failure to supply same, is unfair,” he added.

It said that excessive fees and unethical methods of collecting money are prime examples of how the tyranny of regulation harms private enterprises. Manufacturers nationwide are already struggling due to a crippling 250% spike in power costs, more than N1.2 billion in unsold inventory, and borrowing rates of over 30%. According to MAN, each factory faces between 60 and 120 taxes, fees, and levies from the three levels of government and non-state entities, in addition to manufacturing activities being disrupted by insecurity and high logistics costs.

Continuing, the statement reads: “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 said that a business-friendly regulatory environment should be promoted and deterred by the potential loss of jobs and the ensuing societal repercussions, as well as the unfavorable signal to the investing public. Three businesses were shut down by the Lagos State Water Regulatory Commission for taking substantial amounts of groundwater for commercial use without the required authorization or following the rules.

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According to a Tuesday report by the News Agency of Nigeria available to BrandSpur business and economy news desk, the three businesses are Guinness Nigeria Plc, Friesland Campina, Peak Milk, and the Nigerian Bottling Company, which produces Coca-Cola. This was said by Mr. Olowu Babatunde, LASWARCO’s Director of Technical Services, during an enforcement operation in Lagos on Tuesday.

According to Babatunde, LASWARCO has been interacting with these businesses to promote compliance for more than seven years, but the efforts haven’t always been successful.

He went on to say: “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,” he added.

The enforcement came after Mr. Tokunbo Wahab, the Commissioner of the Ministry of the Environment and Water Resources, gave a news conference on uncontrolled groundwater abstraction on Monday. Wahab pointed out that LASWARCO was given the authority to control groundwater activities and enforce sanctions for unauthorized abstraction by the Environmental Management Protection Law of 2017.

According to him, uncontrolled groundwater extraction may have detrimental effects on the ecosystem, such as groundwater contamination and land subsidence. The commissioner stated that although the government waived 75% of groundwater abstraction fees in 2020, there was little adherence to the offer.

He claimed that because of this, LASWARCO had to start taking enforcement action against defaulters. He claimed that non-compliant organizations received letters giving them a 72-hour deadline to conform and that those who persisted in operating without permission would face sanctions.