INVESTIGATION: Asian company rakes in billions, pollutes Lagos, Ogun in illegal manufacture of black oil
The arrest of two Chinese nationals, Taolung Shen and Xu Jing Yau, in February 2017, for allegedly dealing in fake tyres, estimated at about N5.3 billon, dominated media space and put some businesses owned by foreigners on the spotlight.
The case of Shen and Yau constitutes less than a percentage of unreported illegal activities foreign nationals perpetrate in the Nigerian economy, capitalizing on Nigeria’s desperate quest for foreign direct investment and lax regulations.
The arrest of the duo provides lead for this special undercover report on illegal manufacture of black oil (Liquefied Pour Fuel Oil, LPFO) through recycling of tyres. The month-long investigation took Ripples Nigeria through the dumpsites of Olushosun in Lagos, the laboratories of University of Lagos, Tech High Profile Ltd in Ikorodu, Ministry of Environment in Ogun State and Corporate Affairs Commission in Abuja, Nigeria’s Federal Capital Territory (FCT).
Want used tyres? It’s N25 per piece!
The filths of Lagos are legendary but nothing compares with the mountain of used tyres at the dumpsite of Olushosun located in the Ojota area of Lagos State. Many other dumpsites in the city are littered with mostly bio-degradable wastes. Each day, a colony of scavengers throng these sites with hopes high to eke out a living amid thick fogs of smoke and stench.
From every indication, it would appear the Lagos authorities either lack the will to commit resources to recycling the tons of degradable wastes generated in the city or simply do not care about the consequences of the hazardous mountains which its officials set fire to intermittently.
But not so the used tyres of Lagos which have become a ready source of revenue for the state, an investment opportunity for eagle-eyed business men, and a source of livelihood for a largely desperate jobless population. A visit to Olushosun reveals a structured organization of processes and procedures, even in the seeming chaos and heaps of garbage. The enchanting episodes, though crude, of seeing the tyres made ready for merchants is captivating.
It costs N50,000 to join the used tyre trade at the Olushosun dumpsite, an official of the Lagos Waste Management Authority (LAWMA) who chooses to remain anonymous tells Ripples Nigeria.
“When you want to register, you will pay for charges. Registration fee is N50,000 and you get a certificate/license of operation that will be renewed yearly. The license covers beyond tyres, every other recyclable item”, he said.
He added, “You pay per piece of tyre you collect. It costs between N25 and N30. At the head office (LAWMA), you will tender a copy of your company’s registration certificate which is procured from the Corporate Affairs Commission. You will also state what you want to recycle the items into because a team will visit your office to inspect your operations”.
Admitting how structured the processes are, he quips, “LAWMA is not responsible for cutting the tyres, providing trucks and paying for loaders; all these are handled by third party agents”.
‘We are not aware of any illegal activities’
The value chain in the Lagos waste management sector is better imagined. There are three other dumpsites in the state with hundreds of thousands of condemned tyres traded everyday. These are Iba (LASU- Iba road), Ijede (Ikorodu) and Epe. It is big business!
LAWMA’s Public Relations officer, Lanre Bajulaiye, acknowledges this much but denies knowledge of any illegal activities.
“Recycling is a new thing in Lagos, investors are coming in, and waste producers see it as an avenue to make money.
“For anyone to transact business with LAWMA, they have to register and we certify. For those who get products from us, they are not doing anything illegal and they won’t do anything that will be detrimental to people’s health. LAWMA cannot be everywhere. If it is illegal activity, we may not be able to know due to the level of secrecy involved. In some cases, we apprehend and punish”, the image maker said.
He added, “LAWMA are not the only ones who gather abandoned tyres. Those we sell to will not give to such companies that engage in illegal recycles. Tyres serve as good raw materials for various things. If it is not happening within Lagos, LAWMA is incapacitated to act, except if it has a negative effect on the State”.
Asian firm pollutes Ikorodu, using tyres in illegal production of black oil (LPFO)
Operating undercover for weeks, Ripples Nigeria trailed a major consumer of the used tyres of Lagos to Ogijo, Ikorodu, a quiet community at the boundary between Lagos and Ogun States. Located on Ikorodu-Shagamu road in Ogun State is TECH HIGH PROFILE LIMITED,” a company owned and ran by some interests from India.
As revealed by documents obtained from the Corporate Affairs Commission in Abuja, the company has on its Board two directors of Indian origin. They are messrs Agarwal Neera (Indian) and Sharma Yogendr Kumar. Registered in February 2013 (RC: 1096573), it was licensed “to carry on the business of electrical transformers, and cable wire manufacturers, to undertake the planning, design, development, construction, testing and maintenance.”
Investigations, however, show that the company has since strayed away from the original license granted to it, veering instead into oil and gas business, perhaps without government knowledge. Sources familiar with operations in the LPFO market say that the motivation for TECH HIGH may have been the huge returns it makes from its relative cheap investment in used tyres and frequent scarcity of the product which is in high demand for heavy duty machines by industries.
At the moment, it is estimated that the country consumes about 20,000, 000 litres of refined LPFO annually.
Guided by Shaka Omosu, (not real names), who had inside knowledge of the tyre-recycling firm which is buried in the woods of Ogijo and away from prying eyes, we had posed as prospective buyers of LPFO. After several calls, samples of black oil produced by the company were obtained and thereafter subjected to laboratory tests at the University of Lagos.
The product sample appeared a prized item as earlier searches had revealed that only two refineries in Nigeria could produce LPFO at the moment. They were the moribund refineries in Warri and Kaduna which the Nigerian government had struggled to keep afloat over the years.
“This is already fully prepared”, Shaka said of the bottled black liquid which had a very pungent smell.
“Some are thick while others are light. The thick ones are mixed with ‘sharp’ gas to become light. The oil pump cannot pump the thick one, that’s why it is always mixed,” an indication that standards could be compromised with underlying dangers for industries.
‘This product meets minimum standards but…’
Subjecting TECH HIGH’s black oil to laboratory test was a cumbersome task. The Standard Organization of Nigeria (SON) which was initially approached made sure its bureaucratic processes were a major disincentive. Days of negotiating with its officials returned a verdict of, “If you want the Lagos office to do anything, then you have to apply to the Director-General in Abuja.”
Knowing the import of the advice, Ripples Nigeria settled for a limited offer which included SON’s notes detailing approved standards for LPFOs produced in Nigeria. Final tests conducted at the University of Lagos revealed that there were no significant deviations from the standard.
However, the report also showed that there were other major concerns, especially the impact of the operations of the company on its immediate environment and beyond.
Report of analysis;
Overall comment: The physicochemical properties are within the required standard. The oil contains other elements, which may be more hazardous to human, and it’s environs. It needs to be subjected to compositional analysis.
‘The smell and smoke is killing people’
Erefun village in Kamalo Labori town of Ogijo, Ogun State, lays prostrate. It bears the brunt of the operations of TECH HIGH which has seen its environment enveloped daily in thick palls of dark smoke. Evidence of withering vegetation is clearly visible with homes deserted and farmlands lying fallow.
Aside air contamination, the mode of disposal of carbon by the company poses the greatest threat to soil productivity in the area, leaving farmlands destroyed and water sources polluted.
“People have fallen sick as a result of their activities. The person that bought the land directly behind them abandoned the building because of the smell and the smoke. One other person who had built his house had to park out,” said a farmer who wants to remain anonymous but had been resident in the area for two years.
He added, “The smoke disturbs us, but not always and there are cases of casualties among the staff of the company who are not protected at all. We have complained severally but nothing has happened. Although I didn’t go with the people to make complaints at the government office, but I know there has been a complaint made to both the Government and the owners of the company.”
Frustrated, the farmer who is an indigene of Benue State said, “I have plans to leave when I have enough money. I am a stranger here and we are very few living around this area.
“One thing I know they do is; they have informants close by who inform them when they suspect government officials are coming to inspect the area. Immediately, they will stop their activity so you won’t know what they are actually doing. If it is not illegal business, they will not be hiding and doing their business”.
The discomfort and health concerns caused the people of Ogijo reverberates even beyond. A commercial motorcyclist tells Ripples Nigeria of the hazard of doing business in the community.
“The place is always looking dark due to the smoke and a lot of people have died there. Even when you look at the houses there, the black smoke from the company has turned the place black and uninhabitable.
“To me, the food vendors around that area that I know are selling poison, unclean food because the smoke is not directed anywhere. It just finds its way to the whole area. There is nobody eating at the canteen that will not be affected,” he said.
“As you see me, I’m wearing nose guard and that’s how I do when I take passengers to that area. I don’t carry them when they close because they are always black, smelly and dirty,” he added.
‘Govt officials ‘obtain’ money from the company and give them protection’
Conceding that the operations of the company were shrouded in top secrecy, Shaka , a former operative with TECH HIGH said, “A lot of money is made from an illegal business. If you set up this business, within a year you will make double your money. The transactions are mostly cash based, and operations are round the clock.”
Pointing to collaborators within government, he alleged that the company enjoyed protection from unnamed public officials, particularly operatives of the Nigeria Civil Defence Corps (NSDC).
“Civil Defence, most times, come to ‘obtain’ from these operators and they cannot shout. Who will they complain to? These companies have been closed in time past and they pay heavily to Civil Defence to re-open it. There are similar companies operating in Lusada, Odogbolu and Mosimi in Shagamu,” he said in passable english.
Independent investigations by Ripples Nigeria, however, reveal that NSDC officials may have acted on behalf of various government agencies in Ogun State under whose jurisdiction Ogijo lies.
General Manager, Ogun State Environmental Protection Agency (OGEPA), Olufunmilayo Kuti, addressing inquiries from Ripples Nigeria, acknowledged that the agency was aware of the operations of TECH HIGH. Findings, however, showed that the agency was more concerned about generating revenue than enforcing regulations.
Worse still, the Zonal Director, Ogun State Ministry of Urban and Regional Planning, Mr Ojelade, who spoke to Ripples Nigeria could not categorically state if the investigated company was operating within an industrial or residential estate. His defense was that the area had no detailed layout.
TECH HIGH: Still under the radar.
Tech High Profile Limited continues to retain its stature of corporate citizenship in the books of relevant ministries in Ogun State. This is, perhaps, more out of its abuse of the weaknesses of the Nigerian system than its respect for corporate governance and social responsibility.
While the dangerous fumes continue to hover over Ikorodu and environs, officials of various ministries in Ogun State are tongue-tied, preferring to keep their eyes on the short term gains of improving internally generated revenue than ensuring the safety and well being of citizens, while ensuring that companies who do business in the state, stay true to corporate regulations.
By Akin Obakeye…..