![]() Also, these metals will still be in high demand outside SA, re-emphasising the illegitimate export route as a lucrative option. However, this could also inadvertently encourage thieves to steal more to compensate for the decrease in price. One could agree with the logic that decreasing the domestic price of scrap metal through policy interventions will reduce the incentive to steal metal. Successful implementation of these policy initiatives would contribute to solving the problem and eliminate the need for an export ban. To successfully implement the proposed policy security will need to be improved substantially, critical infrastructure will have to be protected and exported metal will have to be closely monitored. In trying to curtail the activity of criminal syndicates and networks it is vital that new, more rigorous compliance requirements do not inadvertently penalise legitimate scrap metal traders and create bureaucratic hurdles and additional costs for them. The existing proposal, particularly the ban, seems to try to solve both issues simultaneously, causing it to adopt blunt policy instruments that are likely to lead to yet more problems and yield economic casualties. If industrial policy is to take the lead, instruments to increase the domestic availability of scrap can be adopted. If the main point of focus is to be the resolution of the security concerns, better policing, intelligence, border control and far tougher sanctions for metal theft-related crimes are needed, and urgently. This is why the strategic policy choice of the directive must be made crystal clear, as that will determine the policy levers that should be adopted. The second consideration relates to industrial policy and the domestic availability of scrap.Īt present, the economic damage caused by the security-related considerations could be argued to outweigh the industrial policy ones, but the two considerations are not mutually exclusive as they have overlapping consequences. This relates to the far-reaching damage felt by the country as a result of scrap metal theft. First, the issue of security, which encompasses economic, infrastructure and social security. However, w hatever shape the policy may take there are two important considerations. Patel has tried to reassure critics that the ban is not a foregone conclusion. On the other hand, the EU has objected to the ban on the basis that it would violate world trade agreements, while the DA and the Recycling Association of SA have expressed concern about the consultation process. The logic the department has followed is that the ban will depress domestic scrap prices and in turn remove the incentive for criminals to steal the metal. However, this six-month export ban has attracted vastly contrasting opinions. It is envisaged that phase one is necessary to give the department the necessary time and space to enact phases two and three. Phase one considers a six-month ban on the exportation of ferrous and nonferrous metals, while phases two and three primarily deal with legislative enhancements to the Second-Hand G oods Act, determining the ports that may be used to export scrap metal and banning the use of cash in scrap metal transactions. The draft directive proposes to curb scrap metal theft in a three-phase approach. Given the extent of the problem, the recent policy directive from trade, industry & competition minister Ebrahim Patel is a welcome development. The widespread damage caused by metal theft has added to the many challenges that hamper SA’s economic recovery and repel investment. We may have come to associate all scrap metal with the infrastructure theft that according to the Global Initiative Against Transnational Organised Crime costs SA R187bn a year, but much of it is generated by manufacturers, which then legitimately sell it back into the system, providing them with an important cost recovery mechanism. Though the focus of all these criminal activities is on stealing metal to sell as scrap, not all of SA’s scrap metal falls into this category. No-one in SA has been left untouched by infrastructure theft, whether in the form of electricity outages due to cable theft (worsening the country’s already tenuous grip on energy supply) the extensive damage to rail infrastructure that prevents the delivery of freight to ports and/or the damage to the commuter rail system that affects mostly SA’s poorest citizens. ![]()
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