NECA Reacts to Lagos Govt Decision to Seals 3 Manufacturing Companies
- Lagos state government decided to close Coca-Cola, FrieslandCampina, and Guinness for unauthorised groundwater extraction
- The NECA has reacted to the development and described the Lagos state government's decision as "economic sabotage."
- NECA argues that the government should provide water and not impose punitive measures on businesses forced to do so.
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Nigeria Employers’ Consultative Association (NECA) has reacted strongly to the Lagos state government's sealing of three major companies' factories.
On Tuesday, December 24, the Lagos State Water Regulatory Commission (LASWARCO) announced the closure of the facilities of Nigerian Bottling Company (producers of Coca-Cola), FrieslandCampina (makers of Peak Milk), and Guinness Nigeria Plc.
The companies were accused of violating the Environmental Management Protection Law (EMPL) of 2017 by extracting large quantities of groundwater without proper authorisation.
NECA reacts to the decision
Wale-Smatt Oyerinde condemned the action, calling it “economic sabotage.”
Oyerinde urged LASWARCO to prioritize supporting struggling businesses rather than engaging in what he termed a misinformation campaign.
He expressed concern that the closure of the companies would send the wrong message about the business climate in Nigeria, particularly in Lagos, DailyTrust reports.
He said:
"The news of business closures due to alleged non-compliance with water abstraction regulations is not only misleading but also risks sending the wrong message about the already challenging business environment in the country.
"The Commission's actions and statements could drive away investors, heighten employee concerns about job security, and portray Lagos State as unfriendly to legitimate businesses."
Oyerinde further noted that many multinational companies are already exiting Nigeria, and Lagos is among the hardest-hit regions regarding divestments and job losses.
He also emphasised that the government’s primary responsibility is to ensure citizens can access potable water.
He added.
"It will be highly insensitive, harsh, and punitive for the same government that has failed to adequately provide water to impose punitive levies on businesses that are constrained to make investments in providing water to run their operations."
Lagos state government speaks on its decision
LASWARCO, however, defended its actions. Olowu Babatunde, the Director of Technical Services at the commission, said the companies had been engaged for over seven years to encourage compliance but had failed to adhere to regulations.
Babatunde said:
"Abstractors are individuals or entities that extract large quantities of groundwater for commercial purposes.
"These companies, Coca-Cola, FrieslandCampina, and Guinness, abstract water in large quantities."
Tokunbo Wahab, the Lagos State Commissioner for Environment and Water Resources, also said that LASWARCO's enforcement action was in line with the EMPL, which empowers the commission to regulate groundwater activities and impose penalties for unauthorised water extraction.
Wahab highlighted the potential environmental risks of unregulated groundwater extraction, including land subsidence and groundwater contamination.
CAC delists companies from register
Ealier, Legit.ng reported that the CAC has removed names of companies that failed to file annual returns for 10 years before the deadline given from its register.
The commission gave companies a 90-day window to submit returns and notify them of changes.
The CAC cautioned that transactions with dissolved companies are illegal, with the complete list of affected entities available on its website.
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Source: Legit.ng