Nigeria Employers’ Consultative Association (NECA) has warned that the recent actions of the Lagos State Water Regulatory Commission (LASWARCO) sealing some factories has the potential to scare investors away from the state.
NECA’s Director-General, Mr Adewale-Smatt Oyerinde, issued the warning in a statement on Thursday.
Nairametrics earlier reported that LASWARCO had sealed the facilities of three major companies – Nigerian Bottling Company (producers of Coca-Cola), FrieslandCampina (makers of Peak Milk), and Guinness Nigeria Plc – for extracting large quantities of groundwater without proper authorisation.
Wrong signal to businesses
Oyerinde said the reported sealing of the premises of the businesses on the allegation of non-compliance with water abstraction regulations is likely to send the wrong message on the already harsh business environment in the country.
“The reported comments and activities of the commission have the damaging potential of scaring away investors, aggravating employees’ apprehension about the security of their jobs, and portraying Lagos State as unwelcoming for legitimate businesses.
“All these at a time when many multinationals are either exiting the country or carrying out a global restructuring with Nigeria and Lagos especially being one of the hardest hit nations/states in divestments and job losses, is worrisome,” he said.
- Oyerinde said that businesses had faced probably the harshest economic situation in recent times, with many declaring humongous losses.
- He said it was expected, therefore, that the commission would be innovative enough to come up with legitimate ways to generate revenue without adding to the woes of businesses.
Unreasonable demand
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.
- According to him, 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.
- The director-general emphasised that organised businesses were not against responsible regulation.
- He, however, noted that the association would embark on all legal and legitimate means to resist any form of high-handedness that did not demonstrate empathy with the plight of struggling Nigerian businesses.
“In the quest for revenue generation, the commission 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 regulation,” Oyerinde said.
He, therefore, appealed to Gov. Babajide Sanwo-Olu to intervene in the matter to save businesses in Lagos from further woes.
What you should know
- While announcing the enforcement action on Tuesday, Mr. Olowu Babatunde, Director of Technical Services at LASWARCO, said 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.