Cogta MEC applauds 6-month ban on trade in scrap metal
KWAZULU-NATAL Department of Cooperative Governance and Traditional Affairs (Cogta) MEC Sihle Zikalala has welcomed the six-month ban on the scrap metal trade.
This comes after the Department of Trade, Industry and Competition announced details of targeted measures to address the theft of public infrastructure for resale as scrap metal that causes more than R47 billion in damage annually to the economy. The measures involve the prohibition of the export of scrap copper and ferrous metal for a six months, which will be followed by a system to regulate trade in such metals.
Yesterday, Zikalala said Cogta applauds the national government for moving quickly to make it illegal to trade in scrap metal.
“This will stop criminal groups from destroying municipal infrastructure in our province, which has cost hundreds of millions of rand and hurt the economy,” Zikalala said.
He said with this decision, which was made public on Wednesday by Trade, Industry, and Competition Minister Ebrahim Patel, criminal gangs that steal and pillage important infrastructure that provides services like electricity, water and sanitation will be hit hard, as they will no longer have a market to trade the stolen electricity cables and other components.
The limit was put in place after the Cabinet approved a set of policies to limit and regulate waste trading and stop metal theft, which hurts the economy and public infrastructure, Zikalala said.
He said the new initiatives show how committed the government is to stop the theft of public infrastructure.
“As a department, we continue to collaborate closely with the sphere of local government to ensure that the necessary safeguards are in place to protect the public infrastructure that is used by so many people on a daily basis.
“The trade in stolen cables and metal places an unbearable burden on our municipalities, as they already have limited resources and are sometimes forced to sacrifice other service delivery priorities in order to replace stolen material. “We are sure that the government’s action will make it harder for organised crime groups to steal public property for profit,” Zikalala said.
Department of Trade, Industry and Competition spokesperson Bongani Lukhele said the measures were considered and approved by the Cabinet on November 16, as part of a comprehensive package of measures to address the damage caused by metal theft to public infrastructure, the economy and communities.
Public Enterprises Minister Pravin Gordhan noted cable theft had resulted in a R2 billion loss in revenue for Transnet last year, while about 742km of Eskom cable had been stolen, leading to significant additional electricity disruption.
Police Minister Bheki Cele indicated 20 multidisciplinary Economic Infrastructure Task Teams had been established since June this year and were fully operational, with more than 3 000 operations and 1 946 arrests this year, Lukhele said.
“South Africa has an extensive network of electricity and Telkom cables, rail tracks and rail cables, and municipal infrastructure such as traffic lights and drain covers. It is practically impossible to police all of this infrastructure, all of the time. The measures approved by the Cabinet, therefore seek to reduce the demand for scrap metal from the lucrative global market, while simultaneously disrupting criminals’ transport and logistics networks,” Patel said.
In Phase 1, three key interventions are to be implemented:
• First, the government will impose a six-month temporary prohibition on all waste and scrap copper and copper alloy exports and ferrous waste and scrap exports. Limited exceptions will be allowed for ferrous waste and scrap exports.
• Second, a permit system administered by the International Trade and Administration Commission will apply to semi-finished copper exports.
• Third, import controls through a permit system will be instituted for furnaces and other scrap transformation machinery.
In Phase 2, the government will introduce measures requiring buyers and sellers of scrap metal to show that they are tax compliant and have all the necessary eco-permits in place before being issued with buyer’s or seller’s licences. The companies will also have to show where the scrap metal originated from and to whom it was sold.
In Phase 3, the government will consider amendments to legislation, or passing new legislation, to create a dedicated metal trading licensing regime. This may include prohibiting the use of cash in transactions.
THE Passenger Rail Agency of South Africa (Prasa) said the temporary ban on the sale of scrap metal would ensure that passenger rail infrastructure is not easily vandalised and sold for profit.
The agency’s chief executive, Hishaam Emeran, said the theft of cables and metals has badly damaged Prasa’s network.
He said the theft of Prasa’s assets was not only a criminal act but also sabotage.
“We have beefed up our security, introducing military-grade fencing to protect our most valuable assets. Since we implemented the integrated security plan, the asset-related crimes have dropped significantly.
“But it is not economically feasible to fence our entire network, and this policy change on the trade of waste scrap and semi-processed metals will assist our efforts,” Emeran said.
Emeran said Prasa supported the measures to restrict and regulate trade in waste, scrap, and semi-finished ferrous and non-ferrous metal products.
The six-month ban on exports and tightening of trade regulations will go a long way toward reversing copper theft and the demand for scrap metal.
Emeran said assets stolen from Prasa ave ended up at scrap metal yards where they are processed and sold.
“Cable theft and vandalism of substations and signalling equipment result in the direct cost of repairing, replacing, and protecting the equipment.”
Implementation of the policy to restrict and regulate trade in scrap metals, he said, “will bolster Prasa’s ability to provide safe, reliable, affordable, and efficient passenger train services.
“The theft of metal and copper cables sold to the industry has had a debilitating impact on Prasa. This has necessitated a programme to rebuild.”