An association that represents the interests of local scrap metal recyclers has accused the government of colluding with big business to push through the ban on scrap metal exports without taking into account opposing views.
At the weekend, just ahead of the deadline for the public and stakeholders to submit comments, the department of trade, industry & competition circulated a petition in support of the ban drafted by the SA Iron and Steel Institute (Saisi). The institute represents the collective interests of the primary steel industry, including ArcelorMittal SA, Cape Gate, Columbus Stainless, Evraz Highveld and Scaw Metals Group — big companies that are most likely to benefit from a ban as it will lead to an increase in the supply of scrap locally and thus a reduction in prices.
The petition called for the public to back the proposed six-month export ban that aims to curb the theft of infrastructure, stating: “Criminals are selling stolen infrastructure to illegal scrap merchants who then export it ... Show your support and help to stop cable theft in its tracks.”
But the fact that the department circulated the petition has raised question about its objectivity as it will have to evaluate all submissions, including those opposing the proposed ban.
“A quick review of the media WhatsApp message sent out by the [department] and the petition which [it] is prompting its colleagues to support, shows that [the department] is encouraging its staff and the community at large to join a petition set up by one of the beneficiaries of the potential ban, namely the SA Iron and Steel Institute,” Nancy Strachan, the CEO of the Recycling Association of SA, said on Monday.
This, she said, raises questions about how fairly the government has conducted the process of drafting the proposals.
In a draft trade policy directive published on August 5, which was open for public comment until last Friday, the department proposed a phased approach to curb metal infrastructure theft, which has become a headache for the state. As a start, it 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.
Strachan said the move by the department to circulate the Saisi petition gave the indication that the government did not intend to have meaningful consultation at all and is actively promoting the interests of lobby groups.
“We take exception to DTIC’s [the department’s] behaviour in this regard, which we find most unethical given that the policy is currently in draft form and out for public comment. Rest assured we will be lodging an objection to the DTIC, and if need be [we will] seek the support of the public protector,” Strachan said.
“Is the true aim of this proposal, as we have previously stated, not actually aimed at reducing the impact of infrastructure theft on the economy of SA, but a poorly disguised attempt to implement a trade policy to directly financially benefit a specific industry sector?”
Trade expert Donald MacKay said the move by the department to share the petition by Saisi suggests a decision has already been made to ban scrap metal exports.
“It’s hard to read it any other way,” MacKay said, also pointing to a government gazette earlier in August announcing a ban, which was quickly withdrawn and replaced with the current draft proposal.
DA MP Mat Cuthbert said it appears there has been active collusion between the government and big business “in an attempt to manipulate the public participation process”.
“It reveals that there is little interest on the part of government to deal with the pressing issue of infrastructure theft and vandalism, but instead it confirms what we have been saying all along, and that is the process is being used to benefit those in the department’s favoured upstream steel industry at the expense of waste pickers and metal recyclers,” Cuthbert said, adding that the matter must be independently investigated.
The department did not respond to requests for comment. But last week trade, industry & competition minister Ebrahim Patel suggested to MPs that banning scrap metal exports should be considered urgent and necessary as it would reduce prices and discourage syndicates from looting infrastructure, which costs the broader economy an estimated R187bn a year.
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, which is likely to be due to an increase of supply in the local market.
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