Trade, industry & competition minister Ebrahim Patel says banning scrap metal exports should be considered urgent and necessary as it would reduce prices and discourage syndicates from looting infrastructure.
But critics of the proposal argue that a reduction in prices would lead to more infrastructure damage as syndicates would need to steal more to make money. Further, an export ban could leave many legal waste pickers without an income.
“The sheer size of public infrastructure makes 24-hour policing and physical security of each potential metal or copper cable site impractical,” Patel told MPs on Tuesday. He said there is an urgent need to consider international experience and how other countries have tackled the problem, including banning exports.
“All the advice we have received indicates that we need multiple measures to disrupt the crime syndicates,” Patel said, pointing out that various measures need to be implemented to reduce metal infrastructure theft as the state battles to tackle the crisis, which costs the broader economy an estimated R187bn a year.
In a draft trade policy directive published earlier in August — which is open for public comment until the end of the month — Patel proposed a phased approach to curb metal infrastructure theft, which has become a huge headache for the state. As a start, he proposed that exports of ferrous and nonferrous waste and scrap metal of any kind listed in the schedule be banned for an initial period of six months from the date of publication of the final notice.
Some of the long-term measures proposed include the prohibition on the use of cash in transactions involving scrap and semi-finished metal, which the state says will significantly improve traceability of transactions and greatly improve monitoring and enforcement.
Briefing parliament’s trade, industry & competition portfolio committee on the proposed measures, Patel said that while his department has an “open mind” on the issue as public consultations continue, the temporary prohibition on exports of waste and scrap metal and the creation of a permit system for the export of semi-finished metal are likely to lead to a material reduction in the theft of metal from the country’s infrastructure. The measures will eliminate or reduce one of the avenues for monetising stolen metal.
“These interventions will also divert significant volumes of scrap metal to the local market, leading to lower scrap metal prices, which is likely to [be a] disincentive [to] metal theft,” the minister said.
Railway lines, electricity pylons and road barriers are among key infrastructure items that are constantly targeted by syndicates, which then sell to local dealers or smuggle the stolen metal to overseas markets as scrap, without being detected.
Patel said the various proposals to curb the theft come from many stakeholders, including the police and those directly affected by the theft, such as parastatals. He dismissed claims that the proposal to ban exports of scrap metal is a direct response to a lobby by local firms that will benefit from a reduced price of scrap metal.
“The net result of the proposed regime might thus be that the scrap supply to local industries would increase. In any event, given the magnitude of SA’s metal theft problem, it appears that any negative impact on the local supply of scrap is more than outweighed by the benefits to society through the reduction in the theft of, and the severe damage to, public and other infrastructure, the saving of lives and the positive benefits to the economy,” Patel said.
DA MP Mat Cuthbert said that while the impact of the metal theft crisis and the urgency to attend to the issue cannot be disputed, “we are of the view that it is a law enforcement issue and not a trade policy issue”.
Cuthbert said: “The facts are the Second-Hand Goods Act has not been properly implemented.” The SA Police Service is “under-resourced to tackle this crime. and local governments are fighting this battle alone”.
He pointed to Kenya, where a ban on exports is said to have failed to address the theft and vandalism of infrastructure but did have a negative impact on the economy, including jobs losses.
A ban on exports “will leave many waste pickers without an income and the economic consequences have not been fully calculated yet”, Cuthbert said, adding that the push for an across-the-board ban seems hasty.
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