In the News
Lagos Sand Dredging Problems:
Politics of Resource Control, Ethnic Replacement or Both?
…Ikorodu on the Boil as Waterfront Ministry forcefully sells off dealers’ sand stockpiles.
The Lagos State Government has again moved against proprietors of dredging operations in Lagos according to a release from Stakeholders of Sand Dredgers in Lagos State. This time the axis that got attention was Ikorodu. All dredging sites in the Owode Ilaje area of Ibeshe (Igbogbo Baiyeku Local Government Area) were visited with a stop work order and closed down by a Special Task Force from the Lagos State Ministry of Waterfront Infrastructure Development beginning Tuesday May 5, 2009. On the first day, the officials and agents of the Waterfront Ministry supported by a detachment of uniformed security operatives moved into the site of Glossands Nigeria Ltd and began selling sand to truck drivers in a move yet unseen since the ramped-up face-off between the Lagos State Government and the dredging operators began in 2008.
Eye-witness accounts reported that staff of Glossands were ordered out of the premises and the task force took over the sale of sand at the depot. About 200 trucks were reportedly sold by the Ministry that first day. The following day, it was also reported that about 100 trucks of sand were sold from the sand stockpile before the Task Force moved on to the stockpile belonging to Gold Brook Ltd, a neighbouring sand stockpile in the same village. Many trucks of sand were also sold to truck drivers at this site. Since the action began the task force has visited the sand stockpiles of Spectran Dredging Nigeria Ltd, Kudos Nigeria Ltd and Modadel Engineering Construction Ltd with the same measure of selling off sand from their stockpiles.
So many things are novel in the approach being used in the current action by the Waterfront Ministry apart from the fact that it has never done this before and such a punitive action is unheard off in the annals of agency regulation of trade practices in Nigeria. The way the task force sold sand at the sites appeared to follow a pattern though that pattern is yet to be made public. If the idea was to impound all the sand and sell it off, why did the task force leave after two days (in the case of the Glossands stockpile) or after one day (in the case of Gold Brook)? Will they return? Or is this a warning strike? The answers hang in the air. Also, the accounting of the sales can at best be ad-hoc because the receivers of the money did not appear to be officials of the Waterfront Ministry but according to the press release by the stakeholders, mainly the security operatives. Or were they the consultants which the Ministry usually detailed to various sand stockpile sites? Again, the receipts they issued to truck drivers who bought the sand did not specify any quantity nor amount of money at which the sales were pegged. And for that matter, the issuance of receipts appeared to have been an after-thought as they did not issue receipts to the first buyers of the sand but started only mid-way into the sell-off exercise. According to the stakeholders, the sellers have stopped issuing that receipt for subsequent sales of the sand.
Meanwhile all these took the sand stockpile owners and their fellow stakeholders around Lagos by surprise. They confessed their total bewilderment at the turn of events which marked a new, strange chapter in their dealings with the Lagos State Government. When DDH sought to know their reactions, they were in series of meetings at the Ikeja office of Glossands Nigeria Ltd, whose chairman and chief executive, Chief Aiyebusi, is the patron of the Dredgers Association of Nigeria. At the meeting, many called for various measures to head off what they termed “executive recklessness” by agents of the government but they also pleaded for the immediate intervention of the Governor to stop the sales of their sand which they termed to be illegal. Public notices and other media outreaches were being adopted by the frantic sand dealers so save their business from ultimate take-over or collapse. And some were vociferous that a court action must be taken against the government while some cautioned against the move. But later in the course of the events, the stakeholders petitioned the Inspector General of Police complaining against the action being perpetrated by security operatives.
Who are these stakeholders and what is their history? They are made up of dredging contractors and sand dealers with some dredge owners and operators. One could mistake their gathering for a funeral (for all the shock they expressed) but each one never ceased recounting his own side of the story and their worst fears at this sudden turn of events. On the first day of meetings called to deliberate on this unhappy event, with press men in attendance, they said that ever before the creation and sudden emergence of the Waterfront Ministry, dredging and sand stockpile business in Lagos had been hitch-free and smooth under the regulation of the National Inland Waterways Authority (NIWA) and the Federal Ministry of Solid Minerals and Steel Development (now Federal Ministry of Mines and Steel Development). They usually paid levies and royalties to these two federal agencies and some other Lagos State agencies like LASEPA, Ministry of Environment, Office of the Special Adviser on Mineral Resources Development (OSAMRD), etc and the transactions were almost always peaceful.
According to their secretary general, Mr Richard Ntan, the problems with the Lagos State Government agencies, especially the Ministry of Waterfront Infrastructure Development began with the face-off that developed between NIWA and the Waterfront Ministry sometime between 2007 and 2008 when the Waterfront Ministry began to fight the NIWA for the position of which agency is to regulate dredging activities in Lagos State. Following this struggle for supremacy, according to him, the Lagos State Government began to come up with new regulations and the implementation of new laws passed by the Lagos State House of Assembly. Along that line, some new laws and regulations have been put forward by the Lagos State Government to regulate marine and inland waterways businesses in the state and new agencies created to enforce them. One of them is the Lagos State Waterways Authority.
In fact, in an interview granted DDH magazine in January 2008, Mr Blaise Agboola, former acting permanent secretary at the Office of Special Adviser to the Governor on Mineral Development said as follows: “…There’s Decree 34 of 1999 that stipulates the ownership of mineral resources to the federal government. But section 20 of the same law asks each state to protect its own environment and to protect that environment, we now went to our own House of Assembly in 2003 so that whatever you are doing within that environment, you have to have our consent. And mining means sand winning, dredging, and other connected purposes. So when we went to our own House of Assembly, they enacted a law called Law 22 of 20 August 2004, what we call “Sand: The Regulation of Sand Dredging and Other Connected Purposes in Lagos State”. That is what gave birth to the Office of the Special Adviser on Mineral Resources in Lagos State. What is our mission? Our mission is simple: to make Lagos State a mineral (solid, liquid and gas) producing and processing state in the shortest possible time and as cost-effective as possible, thereby broadening its economic base and enhancing the revenue accruable to it.”
Sometime in the first quarter of 2008 however, there was an apparent reshuffle in the way sand mining and dredging activities were regulated in Lagos State as the Commissioner of Waterfront Infrastructure Development, Prince Adesegun Oniru, informed the public during a press conference at Alausa Secretariat that his Ministry had been reposed with the powers to oversee the sector from thenceforth. He said in that meeting that the OSAMRD would henceforth work with the Waterfront Ministry and the fees being paid via OSAMRD and the permits they issued came to be administered by the Waterfront Ministry.
Notwithstanding the jurisdictional dispute between NIWA and the Waterfront Ministry (and its newly created sister agency, the Lagos State Waterways Authority), the procedures for the granting of dredging and sand stockpile license in Lagos involved a series of regulations and full compliance with them. In a meeting convened by the OSAMRD in the first quarter of 2008 when OSAMRD began the seizure of dredgers’ dry plants and other equipment at Ajah for non-compliance with regulations, the environmental monitoring official at the time, Mrs S.O. Raji, clarified as follows: “…Yes, there are rules and regulation in dredging and we have what we call our requirements. Normally when you apply, the requirement is given to you. The most important one is your EIA (environmental impact assessment). We all know the reasons why we have to do environmental impact assessment in any project we want to do, especially these days when we have ocean surge, tsunami and whatever. In relation to your work, you have to do that. If you have not done that, you are illegal. Even if you have been given permit before or Consent, now it is cancelled. You have to renew your Consent every year. And when you renew your Consent, there is a fee you pay to Lagos State Government. Before when you renew, you just renew with your fee. We don’t ask you about your tax clearance certificate. But now when you want to renew, you have to, in addition, put in your tax clearance certificates. If you have been approved, your sand search, your bathymetric survey is also important now because we want to know that you are not in the waterfront. We now cherish our waterfronts. If you want to apply, please make sure that you (in the) hinterland. With time, we will give you how many metres we want you away from our waterfronts.”
According to DDH investigation, the term “illegal” was the most frequently used terminology by both parties during the period the face-off was in full swing. Prince Oniru, answering questions about the raging issue at a press briefing, made a solid accusation against all the dredging sites that were visited by the task force as operating under an illegal status. (See box for Prince Oniru’s press briefing). On their part, the dredging stakeholders maintained their innocence, wondering how they could possibly be termed illegal despite their long-running relationship with the Lagos State Government agencies. Some of them said that they had complied with all surveys, made all prescribed payments and written to the State Government for Consent so that they could continue their activities under a fully compliant cover but that in most cases, their applications were not even responded to. They said for the majority of their members, their applications for consent via the Waterfront Ministry were still at the agency awaiting approval, and queried why there was no response to their applications unlike in the past when applications for consent were routinely granted after compliance with all other requirements.
Furthermore, they said that the best the Waterfront Ministry had given some of them since the past few months had been temporary consent to operate, including the one granted to Glossands whose site was the first to be affected by the new clampdown on their operations. In the case of Glossand, a 90-day temporary consent was granted the company to pump sand on their site at Ikorodu. This was in October 2008. The company showed DDH various receipts, letters and communications that showed a fairly constant communication and interaction between it and government; Glossands being about the oldest such companies dealing in sand in Lagos State. One of such receipts showed that the sum of N750,000.00 had been paid to the Lagos State Government in October 2008 and Mr Ntan informed the magazine that this money was paid in advance in the belief that the consent letter would reach them pretty soon. On the accusation of their being illegal, Mr Ntan, who also consults for Denka Dredging and Marine Company, went philosophical, wondering how a company can be said to be illegal whereas the State Government assigned revenue consultants to the same site who came weekly and collected haulage taxes running into millions of Naira from trucks loading at the site on behalf of the same government making the accusation?
This paradoxical atmosphere has given rise to various conspiracy theories including one that says that there is a covert master-plan by the government to force out non-indigenes from the dredging and sand supply business in the state. According to this theory, some major indigenes of the state including a former governor, a powerful traditional ruler, and a few other highly placed Lagosians had concluded covert plans to take over the entire dredging business in the state.
This notion which is fast gaining ground is being held to account for the persecution being meted out to current operators of the business who are said to be under a rubbishing campaign to brand them as upstarts and illegal dredgers so that officially anointed dealers in the business can formally emerge. The current focus on Ikorodu, according to this notion, is because only Ikorodu was remaining to be apportioned to one of these four major beneficiaries of the covert plan and that is why the heat is currently on in the axis; Ajah and all other major axes having been secretly allocated. Is there truth in this notion? Until there is a statement from the government, this notion cannot be authenticated. Only time will tell.
But at the press conference which Prince Oniru addressed, he detailed in a long-running Powerpoint presentation lasting over two hours, a 27-page brief, where he highlighted various policies the State Government was implementing. In fact, taken as a whole, the Ministry’s action at Ikorodu which was happening at the time of the press conference was not reflected in the presentation. Some reporters who attended hoping to get new angles on the developing Ikorodu story would have gone home totally disappointed if not that a few journalists pointedly raised the matter and demanded straightforward answers. However, the Commissioner parried most of these questions, only restating the illegality of the sand dealers operations. Instead, he concentrated on the expanding schedule of his Ministry which, from the submitted brief, appeared clean enough. But doubts remained in the minds of those familiar with the strange tactics of the ongoing action which was dubbed “Operation Sandy” taking place firstly, at Ikorodu.
In the presentation, Prince Oniru harped on the environmental concerns in a state which he said is bounded by water for most of its borders; a state which he said cherished its natural resources and is eager to pursue the realization of its mineral and tourism potentials. Oniru clarified some other issues that had been in the news including the environmental impact assessment of the Eko Atlantic City which one reporter queried him why it was yet to be made public. He said the report was available and was being fine-tuned saying the consultants, Royal Haskonig, was in charge of the EIA and would unveil it soon. He justified the Bar Beach reclamation by saying that about 40 years ago, beach lovers would need to trek 1.5 kilometres to be able to see the ocean waters in those days!
If any direct reference was made to crime and punishment in the report, it was at a juncture where the Commissioner read from the brief about punitive measures taken against offenders of the state’s dredging and environmental laws in the past. According to him, “…there is embargo on the issuance of permit for dredging activities with the view to sensitize the system and reinvigorate government’s programmes to monitor and stem firmly on illegal dredging and degradation of the environment. Unfortunately, despite this embargo, there are a lot of illegal dredging / sand digging activities that are still ongoing. So far, fifty-one (51) persons who engaged in illegal dredging activities along Badagry, Ikorodu and Ajah axis (sic) have been arrested and persecuted (sic) accordingly, while thirteen (13) tippers were likewise arrested…” To another reporter’s question, he answered that these offences were committed before the onset of the new laws that specified terms of imprisonment and fines to be meted against offenders. (For excerpts of the briefing, see box.)
In a related development, the Waterfront Ministry, the same week issued a press statement that was published in The Punch saying that the action at Ikorodu was codenamed “Operation Sandy” and that it was aimed at checking unauthorized dredging of the Lagos lagoon. The statement claimed that the operation had been put to test at Ikorodu area of the state with the arrest of four people and the seizure of stockpiled materials which will be sold by the task force in charge of Operation Sandy. It said the sites where the materials were recovered will also be acquired by the government.
Meanwhile, back at the meeting of the dredging stakeholders, they recounted unpleasant tales of encounters with various state and federal government agencies and local community people whenever they came around to demand various levies, fees, royalties and other taxes which they said were becoming unbearable for their operations in the state. Some of them who said they also operate in the Niger Delta areas made comparisons that showed that were it not for the criminal militancy in those places, they were a haven compared to the unfriendly attitude of the government agencies to dredging activities. Other speakers said the harsh treatment could be traced to ethnic bias saying that officials of the state government have made various statements to the effect that sand was the “crude oil” of Lagos State and should be preserved exclusively for indigenes of the state.
They contended that since they had complied with all the stipulated rules and regulations and submitted their applications for consent and none has so far been issued, there might indeed be a deliberate plan to frustrate them out of the business.
But the banking sub-sector is also under edge in the new brouhaha. Almost all dredging activities involve huge cash injections from banks under varying terms of loan arrangements. Before sand stockpiling gets underway, the dredging companies which deploy dredgers to the sites usually demand huge mobilization and demobilization fees paid up front. Then the a substantial part of total cost for the sand mining operation is also paid up front, mostly around 40% for the first milestone. The next installment is usually paid in like sums when the first milestone is about to be completed so that the second milestone can commence without stopping the momentum. When the second milestone is near to full accomplishment, the final installment is paid up front so that operations can continue without waiting. The institution that makes this seamless operation possible is the banking sector. A bank, having full confidence in its client or customer, undertakes to fund the transaction so that the dredger can deploy to site. In many cases, the presentation of an advance payment guarantee (APG) from a bank or trusted insurance company gives the banks an added confidence that the business is good and would not fail. The APG serves as part collateral while the banks also conduct their extra due diligence. But overall, the banks are eagle-eyed all the way until all their funds injected into the project are recouped with interests when the sand is sold or when the property is fully reclaimed or whenever the terms of the projects are fully delivered to everybody’s satisfaction.
In the current case where the Lagos State Government impounds the sand of a bank’s customer, this introduces a new, hitherto unforeseen angle to the business and would henceforth, most likely, be a considerable factor in future loan approval processes, at least, in places like Lagos State, where issues of jurisdiction over regulation of sand mining and allied ventures are still unsettled. But the dredging stakeholders bemoaned this aspect of the problem too. From the arrangement of these “sandy” businesses, much of the bulk of the money at stake at any one time would belong to the bank, the dredge owner having been paid up front and the dredging contractor (sand dealer) having comparatively the smaller part of the proceeds of the sand heap. One dredge owner confided in DDH that the banks are “too exposed right now” to all the stakeholders now under the punishment of the Waterfront ministry. They would likely continue to be until the matter is resolved.
When DDH contacted Glossands Nigeria Ltd about the question of letter of consent from the Governor which the Waterfront Ministry said was not obtained by the company, it showed the magazine a temporary letter of consent to mine sand for three months which was issued by the Ministry. The stakeholders have now posed a query whether the sand mined within these three months was also to be sold off in the same three months? Usually in the business of dredging, selling wet sand is replete with the danger of losing one’s profit, as wet sand packs more value to the buyer than for the seller. Their contention was that it was the sand mined in the three months under temporary permit that was being sold when men from the Waterfront Ministry pounced on them and began to sell the sand stockpile.
In a related development, NIWA has taken out a public notice to weigh in on the ongoing face-off about regulating sand dredging and inland waterways activities in Lagos State. In a rejoinder published in the Punch of May 14 2009, titled “Lagos State Government and National Inland Waterways Authority: Lagos State Government got it all wrong constitutionally”, NIWA said that
- “Reference is made to the earlier attempt by the Lagos State Government in 2008 when it conceptualized the idea of establishing an independent Waterways Authority and Waterfront Corporation for the State and caused in effect Public Notice by February 11, 2008, endorsed by it’s Attorney General & Commissioner of Justice and Hon. Commissioner for Waterfront Infrastructural (sic) Development, and the Authority’s response thereto.
- Notwithstanding the State Government went ahead to purportedly repeal the establishing Act of National Inland Waterways Authority (NIWA) (an existing Act of the National Assembly of the Federal Republic of Nigeria as Cap 47 (2004 LFN), to replace with a replica of the Authority in a new name of Lagos State Waterways Authority with same statutory powers, functions and responsibilities in the same State. (See our Dredging Law page for the full public notice)
Suffice it to say that the battle lines seem to be drawn in this face-off that would determine the fate of many of the contenders. Prince Oniru at the press briefing invited any interested buyers of sand to proceed to Ikorodu and to the sites now being visited by the task force, saying that they have impounded all the sites on those sites and would sell off the same to members of the public. On their part, the affected sand dealers claim that they would seek redress at higher quarters and were making plans to see Governor Fashola on the matters at hand. Some also mooted the idea of a court case to test the laws under which the actions of the state government were being carried out. Others were dejected in the belief that a subterranean plan was afoot to frustrate them out of the business due to ethnic prejudice. While all these lasted, the Lagos State House of Assembly passed a resolution calling on the Waterfront Ministry to cease forthwith the further sale of sand from the affected depots. As at press time, it was not obvious how the matters would eventually settle.
