Lafarge Versus Standard Organisation of Nigeria



LAFARGE Cement WAPCO Nigeria Plc has asked a Federal High Court sitting in Lagos, to restrain the Standards Organisation of Nigeria, SON, and its agents, from closing its business premises, following its SON recent directive on product labelling and traceability requirements, pending the hearing and determination of the present suit. Lafarge, which is challenging the power of SON to pre-approve all advertisement and commercials of the plaintiff’s as well as certify block makers in Nigeria, is contending that the directive by SON gives unfair advantage to its competitors and will enthroning monopoly in the cement industry.

The company, which is also contending that it had no complaints about the product labelling, also noted that the deadline for doing what SON wants was too short, arguing that it requires more time to calibrate its machines to achieve same. The company, in an affidavit in support of the suit, averred that SON convened a meeting of stakeholders of the cement manufacturing sector and at the said meeting, came up with an action plan and a set of new policies to be observed by cement manufacturers.

“After the July 21, 2014, meeting of stakeholders of cement industry with officials of the defendants, the defendant’s Director-General addressed the media, where he issued a 60-day ultimatum to cement manufacturers to comply with her said directives on product labelling and traceability requirements and has reiterated its readiness to sanction cement manufacturers for failure to comply with the directives/policies.

“This is further corroborated by the defendant’s letter dated August 5, 2014, which is addressed to the plaintiffs Managing Director. The defendant’s published directives/policies are designed to de-market the plaintiff’s 32.5 grade cement, and confer unfair advantage to the plaintiff’s competitors and enthrone monopoly in the cement industry. The defendant in an attempt to confer unfair advantage to the plaintiff’s competitors and enthroning monopoly in the cement industry has arrogated to itself the powers to pre-approve all advertisement/commercials of the plaintiffs as well as certify block makers in Nigeria.

“The plaintiff has reasons to believe that the published policies and directives by the defendants are not within the ambit of their enabling law/statute, hence the substantive suit instituted by the plaintiff against the defendant.  The plaintiff has consequently approached this court in order to prevent the defendant from implementing the said directives as they were issued in violation of/non-compliance with the provisions of the SON Act. The plaintiff respectfully submits that the sole issue arising for determination of this application is: “Whether in the light of the circumstances of this case, the plaintiff has made a case for the grant of this application for interlocutory injunction in this suit.

“The plaintiff submits that this court has the requisite jurisdiction and power to grant the present application in order to preserve the res (subject matter) of this litigation. The “Res” here is the non-implementation of the defendant’s decision on traceability of products, pre-approval of advertisements/commercials as well as the plaintiff’s label on her products. There is also the need to halt the implementation of the defendant’s decision to act as a certifying body to sellers of building materials (especially cement and block makers) pending the determination of this suit. “The Plaintiff is a producer of cement and therefore, has a right to market and sell its products unhindered by the defendant or any other person.”

NDIC Advises Mortgage Banks to Comply with Rules

THE Nigeria Deposit Insurance Corporation, NDIC, has advised operators of the primary mortgage banks, PMBs, in the country to always comply with regulatory policies so as to avoid the build-up of risk in the sub-sector. The regulatory body said given the high cost of cleansing the system of toxic assets of deposit money banks through the Asset Management Corporation of Nigeria, AMCON, the supervisory authorities are deeply concerned about the build-up of toxic assets of microfinance banks, MFBs, which stood at about 45.70 percent as at December 2013, as against the prescribed maximum of five percent.

Umaru Ibrahim, managing director, NDIC, who stated this in a keynote address delivered at the 2014 sensitisation workshop for operators of PMBs organised by the corporation in Lagos, Monday, September 22, pointed out that the corporation’s attention is now “being focused on both MFBs and PMBs so as to address the emerging challenges. According to him, “our efforts can only be successful if the operators can embrace good corpo


rate governance and sound risk management practices.”

The NDIC boss said that the institutionalisation of the Nigeria Mortgage Refinance Corporation, NMRC, as a wholesale financial institution that refinances portfolios of PMBs and deposit money banks, DMBs, implies a shift of required core competences of PMBs to areas such as deposit mobilisation, creation of risk assets, among others. He stressed that the creation of the NMRC, a market of more than N59.5 trillion, implied that PMBs are set to experience phenomenal growth.

“You may recall that the global financial crisis of 2007 to 2009 was mainly due to the problems in the US mortgage sector. As we are well aware, the mortgage markets are inextricably linked to the functioning of the economy, both in the United States and worldwide. The US subprime mortgage crash exacerbated by the interconnectedness between real estate and financial institutions, as well as poor corporate governance practices and weak risk management at many systemically important financial institutions, led to one of the biggest crisis the world has ever witness,” he said.

According to Ibrahim, weak corporate governance and weak risk management could result to risky behaviours by PMBs, thereby creating huge toxic assets. He said the workshop was to sensitise operators on their responsibilities to ensure that they run their institutions in safe and sound manners as well as to take advantage of developments in the economy. He also said the programme became necessary because of growing opportunities for the operators to finance more housing delivery and to access cheap and long term funds.

Lagos Chamber of Commerce Wants Tank Farms Relocated

THE Lagos Chamber of Commerce and Industry, LCCI, has urged the federal government to relocate the tank farms to reduce the convergence of fuel tankers on the Apapa corridor. Remi Bello, president, LCCI, said there was need to fix the rail system to facilitate the evacuation of cargo from Lagos ports to reduce the use of the articulated vehicles and indirectly reduce carnage on Lagos roads.


He told Governor Babatunde Fashola, at the Lekki Free Trade Zone, Lagos, on Sunday, September 21, that: “The Lagos ports have gained a reputation as one of the most expensive in the world, from the point of view of turn-around time of cargo to cost of clearing cargo. There are issues with internal processes within the port; there are even bigger issues with the logistics of cargo movement outside the ports and to various destinations.  All these have profound implications for the cost of doing business. We appreciate your intervention in respect of the recent traffic gridlock along the Mile 2 Apapa corridor and more importantly your concern with rate of accident of articulated vehicles in the state” he said.

According to Bello, the Ebola virus has already taken its toll on business in a number of ways and has created a perception problem which has made many foreign investors to be wary of coming into the country; some projects have been put on hold because the foreign partners were no longer forthcoming, adding that, the hospitality industry witnessed some decline; the aviation sector also recorded a drop in Nigeria bound passengers.

“The good news is that the EVD is being effectively contained and the Lagos State government, working in conjunction with federal government did a salutary job.  All cases of the EVD were narrowed to the index case of the Liberian that brought the virus into the country. The containment strategies and efforts give us a lot of comfort and restored our people’s confidence that we have a government at work. On behalf of the business community of Lagos State and indeed the residents we want to thank your excellency for the successful containment of the dreadful EVD.  But nonetheless, we cannot afford to be complacent. We as a people should sustain the vigilance and adhere strictly to the advice of the health authorities on ways to minimise the exposure risk to the disease,” he stated.

Compiled by Anayo Ezugwu

— Oct. 6, 2014 @ 01:00 GMT


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