December 19, 2017

Premium Times Nigeria: Multinationals cannot be trusted with Lagos water, group warns

By Ben Ezeamalu for Premium Times Nigeria.

Three companies among the multinational firms shortlisted by the Lagos Water Corporation have a global track record of abuse, mismanagement, and sharp practices, a report by the Environmental Rights Action, Friends of the Earth Nigeria has stated.

The report released in Lagos Tuesday titled ‘Veolia, Abengoa, Metito Cannot be Trusted with Lagos Water,’ was the outcome of several months of investigation after the Lagos State government had challenged the civil society to provide facts on allegations that multinationals were “failed companies,” Akinbode Oluwafemi, Deputy Director at ERA/FoEN, said.

“Definitely, these are world-class companies,” said Mr. Oluwafemi.

“But these are also companies with world-class issues that bother on delivery of poor water quality, bribery, human rights abuse, aversion to unionism, inhuman rate hikes, conflict of interest among others.”

The Lagos State government had announced the shortlisting of AG Gold Trust Nigeria Limited; Vision Scape Water Solutions/Metito; Veolia/Shoreline Group; and Abengoa, Naston & Partners as firms it would into partnership with for the Adiyan II water project.

But according to the ERA/FoEN report, Veolia, Abengoa, and Metito’s antecedents make them unsuitable for a partnership with the government.

“The city of Pittsburgh, Pennsylvania is in the midst of a Lead crisis following contracts that put Veolia in control of Pittsburgh Water and Sewer Authority,” the report said.

“Under Veolia’s management, the water treatment chemical used to prevent Lead contamination was switched to a cheaper alternative without the required approval, violating state regulations. Now Pittsburgh’s Lead levels are dangerously high.

“While Pittsburgh residents face the threat of Lead poisoning and the city grapples with the immense cost of replacing service lines, Veolia walked away with $11 million.”

The report further stated that Veolia is currently under investigation in Romania, France and the United States for allegedly running a multi-year, multimillion Euro bribery scheme in Bucharest, Romania, in order to raise water rates drastically.

For Abengoa, which the report described as a “labyrinthine corporation on the edge of bankruptcy,” a partnership with Lagos State government is a risky proposition.

“With sales having plummeted from a peak of €7.8 billion in 2012 to just €1.5 billion in 2016, workers being cut from 26,000 to 16,000, many of its assets sold off, a loss of €7.6 billion in 2016, and a continuing debt load of €5.6 billion, Abengoa is an unstable corporation and not a good bet for Lagos.”

The report also accused Abengoa’s executives of filling their pockets with company funds while the corporation was preparing to deal with bankruptcy proceedings.

It further noted that the company was one of the corporations behind the ‘Cochabamba Water War,’ a massive protest that engulfed Bolivia’s third largest city between 1999 and 2000 in the wake of the privatization of the city’s municipal water supply company.

“More recently, an Abengoa subsidiary built a hazardous waste containment facility near a natural reserve in Mexico that allegedly went on to leak arsenic into a nearby aquifer.”

The report said Metito, a Dubai-based multinational, was engaged in self-dealing after the World Bank, its active shareholder, helped it secure a 27-year concession to and operate a 40,000 cubic metres/day system in Rwanda.

Following the announcement of the deal, the report stated, the company embarked on a large scale restructuring that led to hundreds of job losses for unionised workers.

ERA/FoEN said it raised these concerns about the three multinational firms last August but the Lagos Water Corporation boss, Muminu Badmus, responded by demanding for facts.

“Today, the Our Water Our Right Coalition makes public the facts the Lagos State government demanded in this document which not only details infractions linked to the companies, but also a reiteration of our demands on the way forward in the Lagos water sector,” Mr. Oluwafemi said.

Phone calls to Mr. Badmus did not go through.

But Akinmuleya Feranmi, who spoke to PREMIUM TIMES, said the companies are not as bad as being painted, noting that all companies have their good and bad sides.

“Even Julius Berger in Nigeria today, as that company is doing so much in terms of road construction, you still have people who believe that they are not doing anything.

“A company that has a problem in Ghana may not have a problem in Nigeria.”

Mr. Feranmi said the Water Corporation has been facing several challenges including trying to provide water to a large population at very cheap rates.

“What we are doing in water corporation, we cannot even recover what we use in treating the water, the quality assurance,” he said.

“People are shouting that water corporation funding is high, we supply 1,000 litres of water for N200, which is never done anywhere, it’s the cheapest. We have even gone to the extent of introducing meters. If water corporation does not supply water to the area for two months, that area is not going to pay a dime.

“One of the challenges we are facing is large population. That is why we are even doing enumeration now, some people even have the effrontery to prevent our staff from doing enumeration. What we want to do is know how many people are enjoying our water in Surulere, do we need to expand? We want to have a database. But people are even driving them back. I don’t know, our people need education.”

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