© 2018 - International Centre for Investigative Reporting
INVESTIGATION: Ondo mining community where Chinese company exploits people, abuses the environment (Part 2)
Part two of this investigative piece by OLUGBENGA ADANIKIN reveals alleged exploitation of Ondo mining community by Chinese company Xiamen Winstone Limited and its non-compliance with the federal government environmental laws. The report also highlights the allegation of corruption of the traditional ruler Alafo of Afoland on lease and sales of granite rocks.
Controversy on lease of granite rocks, land sales to Xiamen Winstones
There were concerns over lease of 5.17 hectares of land belonging to five families Adesunloye Aladetohun, Falade, Aborisade and Olamuyegun in Afo, Ondo State mining community. The traditional ruler of Afo, Oba Stephen Adegoke Egunjobi is at the centre of this controversy mostly regarding the lease of granite rock to Xiamen Winstone Limited. The aggrieved families claimed they were paid a pittance. The land agreement document titled, ‘Lease Agreement on Granite Rock’ obtained by The ICIR revealed that the traditional ruler on 13th March 2018 went into an agreement with the Chinese company – to lease the hectares of granite at a sum of N20 million with a part payment of N10 million.
The Oba agreed to have signed the lease document but with full knowledge and understanding of the owner-families.
The King also told The ICIR he signed N14 million sales of land and granite agreement in Owalafo, but in the company of the landowners.
“I did not do it alone. The concerned families also signed. They are Falade, Owasunloye, Aladetohun, Ilegun, Aborisade and Oluka family. They received and shared from the N14m money. So it’s very false that they were not given any money or given small money.”
Based on the license from the Federal Government, the lease will run for the next 10 years, from 21st May 2017 to 30th April 2027. The license issued was in the name of OFL Marble and Granite Limited.
Though, the Oba described as the ‘lessor’and ‘Bonafide Owner’, in the agreement was identified as the traditional custodian of the rocks and the parcels of land, the document prepared by Obembe Bamidele Esq. and eventually signed and stamped by the king revealed that names and signatures of the families who actually owned the land were excluded in the land lease agreement. This is contained in a copy obtained by the ICIR.
A separate document signed by the company’s lawyer, Imabong Inyang Esq. affirmed that the initial N10m payment was allegedly made to the King through his lawyer. It showed further that additional N5 million was paid directly to the ‘lessor’, (King) as contained in the agreement with a promise by the firm to offset the N5 million outstanding before December 2018.
However, when the Oba was contacted, he denied receiving N5 million allegedly paid directly into his account saying, “there was nothing of such,” except the only N10m initial payment. This contradicted the position of the firm’s lawyer, as presented in their response to the Afo Community Development Council (ACDC).
“Yes, it is true N10m was initially paid but the balance of N10m have not been paid.”
There were other claims of exploitation against the king. Thus, the ACDC comprising of High Chief Ebenezer Ayejuyo (Olofin of Afoland), High Chief Banji Aladetohun (The Otugbe of Afoland), Hon. Afun Ayodele (Secretary) and Dr. Alonge Charles (ACDC Chairman) and the King went into a Community Development Agreement with demands from Xiamen Winstone, which included CSRs and 50 per cent employment opportunity for both skilled and semi-skilled youth in the community.
Part of the agreement stated that, “there shall be a community project committee, monitoring and evaluation jointly set up by the community and the company, who shall receive and propose project to the company annually”.
But, his reply to the outcome of Afo community development meeting, obtained by the ICIR, Xiamen Winstone limited through its lawyer, earlier mentioned on 30th November, 2018 referred the community to the N20 million lease agrements and N14 million sales agreements which payments were allegedly made directly to the Alafo and his lawyer, C.B Obembe.
Apart from this, some segments of the village blamed the king for allegedly taking ownership of abandoned properties left at Afo project site when Julius Berger concluded its excavation work in the community. The case between JB and the traditional ruler is still at the Federal High Court, Akure as at the time of this finding.
To worsen the matter, aggrieved members of the community blamed the Oba of selfish interests. They reasoned that the Oba should rather focus on issues of development that could better the lots of the whole community. He was said to be on the payroll of Xiamen Winstones, got his house rebuilt with marbles and got his son a job at Xiamen Winstone.
Though the document did not reflect that the king receives a monthly payment from the company, but it showed that the firm would provide a befitting vehicle for the Oba and maintenance allowance.
Meanwhile, a land sales agreement obtained by The ICIR revealed how a pact was reached between Xiamen Winstone and the five families – Aladetohun, Falade, Aborisade, Oluka and Olamuyegun. In the agreement, the families had purportedly agreed to sell their lands located behind St. David Pry School, Owalafo Quarters for N14 million.
“The purchaser has approached the vendors with the request for the sale of the land aforesaid in paragraph 2 above with a view to extract and process same and to construct structures thereon for the carrying on of businesses and the vendors has agreed to sell, transfer and alienate same subject to the terms and conditions for the sum of N14, 000, 000 only.
“In consideration of N14, 000 000 only paid by the purchaser to the vendors, the receipt whereof the vendors acknowledged,” stated in the agreement signed through Afo traditional ruler, HRH Oba Joseph Egunjobi and the joint seal of Xiamen Winstone.
“I signed the agreement but I never did it alone,” the king restated. Asked to mention few of the families, he identified Falade, Owasunloye, Ilegun, Aborisade, Oluka and Aladetohun family.
However, some of the families in the Ondo state mining community, who spoke to The ICIR said: “What was given was meagre compared to the large sum paid.”
But the Oba also insisted he was given a meagre sum, after he sold the properties and handed the N14m to the rightful owners. Asked to give specific amount he was given, he refused, saying, “no it was a small amount and I won’t say anything until we all present the matter.”
Apparently, there are two agreements. One of them is a lease agreement and the other is a sales agreement. Each of them contains different hectares of land: 5.17 and 10.771 hectares respectively, in the same location at Owalafo. N20m is for the lease while N14m is for the sale.
The ICIR further gathered that concerned indigenes of the community had earlier sued Julius Bergers up to the tune of N200 billion for extracting natural resources of Afo community without any form of support to the community.
The same person also sued Xiamen Winstones another N500 billion suit, for alleged neglect of the community, failure to honour CDA agreement despite extraction of its natural resources. But the case has now been suspended.
The king, identified as an accomplice in the case was accused of receiving N20 million from Julius Berger as compensation for the community to build a school, provide primary health care centre and construct market but no project was reportedly executed from the purported fund.
Again, King Egunjobi denied the claim with explanations that consultations were made and an agreement was eventually reached that the mining community should be given a car. But the community agreed that the king should be allowed to drive the car.
The ICIR asked Alafo to confirm whether he was joined in a case instituted by a chief in the community against Julius Berger and Xiamen. The king admitted that he was sued in the case, but denied collecting N20m.
“It is not true at all. One Chief Olowu sued me over this matter and the matter is still in the federal high court, Akure. When Julius Berger came, I gathered all the people; I have documents to prove this.” He described the case as ‘frivolous’,
The ICIR asked Julius Berger about the money allegedly given to the king. “I don’t have answers to your question and I don’t want to be quoted. A number of staffs who worked then must have retired by now,” said a staff member of the company who pleaded for anonymity.
Xiamen failed to comply with agreements signed with the community
Paragraph seven of the land Lease Agreement between the Owalafo and Xiamen Winstone, detailed how Xiamen Win Stone agreed to annually support the community through corporate social responsibility jointly approved by both party. Mr. Aduku Makoji, had represented the marble firm in the agreement.
“That the Lessee has agreed to participate, assist and consider any meaningful project embark by the community for the benefit of the community as part of her CSR specifically by annually commit to one project for community development be agreed with the lessor or Afo community development council, who shall determine the benefit of each project to the town.”
“The project shall not be limited to the provision of classrooms, clinics, town halls, boreholes as the community deem fit.”
More over, Xiamen Winstone agreed to provide a befitting vehicle for the king’s “logistics around the kingdom and other parts of the state as well as its maintenance.”
But The ICIR investigation revealed, as at the time of this report that no amenities were built by Xiamen Winstones. The residents also argued they were yet to benefit anything from the company since the firm’s inception. They alleged the staff members were brought mostly from Nasarawa, Abuja, and Benue, except for a few casual workers recruited among the locals. The residents, at separate interviews with The ICIR expressed their disappointments over what they termed exploitation.
Nevertheless, Prince Adeyemi Egunjobi, was quick to add that the firm was willing to support, except for the selfish interest of selected individuals in the community. A representative of Xiamen Winstones Limited, identified as Sam, however, told The ICIR that the firm was already in a talk with the community over the requests – almost a year after. It would be settled soon, he said without giving a timeline.
Xiamen Winstone Limited or OFL Marble and Granite Limited?
Apparently, answering this question would be a tough one to a first-timer, who had visited the village. Understanding the real identity is confusing. First, there was no signage or billboard for its identification, even at the main entrance but known with different names – ‘Chinese Company’, ‘Xiamen Winstone Limited’, ‘OFL Marble and Granite Limited’.
But the popular name as contained in the contractual agreement with Afo community is Xiamen Winstone Limited.
In the approved survey plan made by Atunbi Amodu of Samoda Fieldview Limited on 27th October 2017, it had Xiamen Winstone Company Limited.
But the Quarry Lease Certificate N0: 24815 issued by the Federal Ministry of Mines and Steel Development, Mining Cadastre Office, Abuja, had a different company name. It had OFL Marble and Granite Limited, not Xiamen Winstone limited.
Findings showed that, through OFL Marble and Granite Ltd, the chines firm got approval for 19 cadastral units which became valid from 24th March, 2017 to 23rd March, 2022 but renewable after five years.
The Consent Form is another document required for marble extraction. The company name of applicant was OFL Marble and Granite Limited, not Xiamen Winstone Ltd.
As required by Section 100 of the Nigerian Minerals and Mining Act (2007), it is expected that before final approval, land owners would authenticate their permission by appending their signatures on the Consent Form. On 21st Feb, 2017, the Form was signed by the Alafo of Afoland, HRH Stephen Egunjobi, Solomon Falade and one more person whose name was not legible enough in the document obtained by The ICIR.
Incidentally, there was a caveat that a sworn affidavit before a Federal High Court or State High Court, showing that consent was duly obtained from the land owner or occupier by the applicant should accompany the consent form.
On same date, 21st Feb, 2017 sworn affidavit was provided by Joyce Habila of factory road, Zange Village, Karu, Abuja revealing the Alafo, Solomon Fadele and Adesunloye as representative of the land owners.
The company name on the affidavit was also OFL Marble and Granite Ltd.
Payment documents to the Treasury Account through NESREA showed OFL Marble and Granite Ltd, except for the submission of Environmental Audit Report which had OFL Xiamen Winstone Ltd as the company’s name.
Eventually, investigation by The ICIR revealed that Makoji Aduku is a shareholder in both companies – Xiamen Winstone Limited and OFL Marble and Granite Limited. His company where he is a major shareholder OFL Marble and Granite Limited got the government license but Xiamen Winstone Limited is the user of the license following all available evidences.
With N1m share capital at incorporation, Makoji Aduku registered OFL Marble and Granite Limited on 16th January, 2015 with N700, 000 major shares and Ruby Aduku had N300, 000 ordinary share of the capital.
But Xiamen Winstone Limited, also partly belonging to Makoji Aduku, got registered two years after, precisely on 7th June, 2017 with N10 million incorporation capital. As at the time of registration, Aduku had 2, 000, 000 shares while a foreign investor, Kaivong Guo had 7, 000, 000 shares to make the N10 million share capital.
In other climes, companies with mining right are usually not at liberty to transfer their lease to another company without the minister’s consent. Some argued that since the company are two separate legal entities, the license should not be transferable.
But the President Miners Association of Nigeria (MAN), Sani Shehu, told The ICIR that the license is transferable but there must be proper documentation at the Mining Cadastral Office (MCO).
An expert at Mines Environment Department, the Federal Ministry of Mines and Steel Development (MMSD), Osseini E. U maintained the same position saying it is possible to own two companies and transfer mining license from one to another but all obligations regarding the Community Development Agreement (CDA) including the Corporate Social Responsibility (CSR) must have been met. This clause is apparently where Xiamen Winstone is having a shortfall, translating the signed agreements, other commitments to reality.
“Yes, but if the company has CDA that has not been done, it’s a liability. All the CDA endorsed by the ministry must have been met before you bring it to the ministry for the transfer, so it becomes illegal if all those things are not there.”
“The original owner of the license has to write that he is transferring to a particular person, thus in the course of renewal, he should renew in the name of the new company….”
In contrary, MMSD Director of Press, Okpara shared a different position saying, “you cannot transfer your license to a different company. It’s not transferable,” but he was quick to add that the Director of Artisanal Mining will be in the best position to respond because, “there is division of labour.”
He further promised to contact the Director of Mines, who he said was on official visit to India and may not resume to the office until the following month. Till date, he is yet to respond.
Regarding the causalities, Okpara said the ministry only issues licenses, thus has no responsibility for the casualties. “It is not a federal government company and they are not bringing their revenue to the ministry.”
When the The ICIR emphasised further, if government really has not regulatory function in that respect, “We do advise them to be on good term with the host community,” he said
“I have gotten the name. I will meet the director in charge of mining and let him know. He will take it up from there.”
But another top source in the ministry expressed concern on gravity of the accidents in the Ondo mining community and its implication on the firm.
“That thing has paralysed his eye for life and even if a lawyer takes it up, that company can be closed because of that, I know that it’s a serious injury and the MD will not like to go further. He will like to settle it within amicably. It’s a clear case. When you sustain injury or somebody died in active service, nobody will say no…you will be given serious compensation.”
Ondo State new environmental law to check pollution
Mr. Funsho Esan, the Commissioner for Environment, Ondo State during a meeting with The ICIR in Akure, the State Capital, acknowledged that the state was aware of the situation at the mining site including the law suit filed by an indigene against Xiamen Winstone limited.
Immediately, Esan picked up his phone and engaged a representative of the firm identified as Sam in a conversation. He attempted to unravel true working condition and the firm’s level of environmental compliance.
“Heavy sanctions will be meted at polluters. Those sanctions that were not there before are being considered holistically,” he said emphasising that the state had designed a new stringent environmental policy which was already at the state justice ministry.
“We will ensure they comply with the industry standard in terms of pollution even the noise and they are doing everything possible for mitigation.”
However, the commissioner said the state government had called for a meeting with the aggrieved members of the community and need for the Chinese company to fulfil its agreed promises to the people.
“They still operate within acceptable standard but the government of Ondo state frowns at anything that could cause health hazards to the people,” he said, stressing the commitment of the state government to get the company act more responsibly.
Aduku, MD Xiamen Winstone denies claims
The MD, Xiamen Winstone Limited, Makoji Aduku denied all allegations against the company. He was categorical about The ICIR correspondent being sponsored to tarnish image of the Chinese marble firm. He also denied claims of polluting the environment saying proper arrangements were made with the traditional ruler before acquiring the land.
“I think you must have taken money from some people to blackmail us. Afo development community is there because every community you go has a structure, I’m sure you are a Nigerian.
Despite The ICIR‘s effort explaining that the report was strictly driven by public interest, Aduku was bent on believing the contrary.
“How many villages are there in Nigeria that you chose to go to Afo.
“In your village, are there not elders, or chief, how can you be saying you spoke to the villagers? Do you know the road to Afo itself?” He queried.
When the reporter told him that he had been at Afo in the last one week, rather and had met with the traditional ruler, he instead questioned the finding of the reporter.
“Your assertions are wrong”.
Further, The ICIR asked about Ologbosere, the victim, who lost his eye on duty at the ondo mining community, he retorted with a surprise, “ehhh ehh…..? Ok, I am not aware,” he stated, denying that he never heard of such name in the company.
The ICIR also asked if Aduku contacted the families, who originally owned the acquired land or just the traditional ruler, he replied: “They do have a lawyer and a chief. We had a proper agreement. We went there and acquired the land.”
The Xiamen boss also claimed ignorant of the community development agreement, saying they have held several meetings with the elders. But, despite the meetings the community agreements remained unmet.
“Somebody has commissioned you to blackmail us. We know where you are coming from. Some people want more money than they had, some people took some other people’s money, there are lots of things that have happened,” he said adding that…” some people have taken us to several courts but the truth will come out,” he stressed.
After calling the journalist several unprintable names, Aduku later said that the Chinese firm ” has grown the economy of the community to a very large extent.”
Months after contacting the Ministry of Mine and Steel Development through its website, the ministry has remained silent.