Posted: August 6, 2022
Government today published draft proposals to address widespread theft of copper cable and other forms of metal from public infrastructure that has crippled power supplies, left trains unable to operate and damaged public facilities in many parts of the country. The proposals have been developed following consultations by the Departments of Trade, Industry and Competition (the dtic), Police, National Treasury, Mineral Resources and Energy, Public Enterprises (including state owned enterprises), and Transport and was published in the Government Gazette today by Minister Ebrahim Patel.
The draft measures propose a six-month export prohibition on scrap and waste metal, including copper cable, together with a permit system for export of specified semi-processed metal products.
This is the first of three envisaged phases, with further actions proposed in future that include a new, enhanced registration system for scrap buyers and sellers to improve monitoring, policing and law-enforcement, limitations on the ports and (potentially) border posts to be used for trade in scrap metal, and changes to the legislation to make it more difficult for stolen copper and metal to be traded.
In a notice in the Government Gazette published today, notice no 47202, the Minister of Trade, Industry and Competition Ebrahim Patel invited public comments and representations on the proposed measures within 21 days, before final decisions are taken.
The measures were developed following sustained damage to public infrastructure from criminal theft of electricity cables, power pylons, railway tracks, traffic lights and manhole covers that has reached crisis levels. Criminals are targeting public infrastructure that taxpayers have invested in to expand service delivery to communities across the country.
The economic damage of copper theft alone has been estimated at more than R45 billion annually. This was the findings in research commissioned by the dtic from an independent research team from Genesis Analytics. Some examples illustrate the extent of the problem:
Transnet’s regularly published cable theft statistics show that during a single week in April 2022 there were 123 attacks on South Africa’s rail infrastructure, including the theft of 39.4 km of copper cable. It is estimated that between 2017 to 2021, the length of cable annually stolen from Transnet’s lines increased from 120 km to 724 km, and the number of incidents rose from fewer than 2 000 to almost 4 500.
Research found that the export of metal provides a crucial monetisation channel for criminals, and South Africa’s ports and borders are not adequately resourced to prevent the export of stolen scrap and semi-finished metal products. The sheer size of public infrastructure across the country made it necessary to identify additional measures that, together with improved policing, can be effective in protecting public assets in the national interest.
In February this year, President Ramaphosa committed in the State of the Nation Address that Government would take decisive steps to address the damage to public infrastructure from criminals who steal infrastructure containing metal and sell this to intermediaries who, for example, export the metal or disguise its origin and sell the metal to legitimate metal processors in South Africa.
There is growing public outrage at the damage that such theft does to South Africa’s economy through the additional cost of repairing and replacing damaged infrastructure, the inconvenience to workers and commuters from rail disruptions, the financial cost of electricity disruptions to businesses of all sizes, and the safety risk to our communities and especially children when criminals damage and leave behind exposed live electricity cables.
Note to Editors:
Full details of the proposals can be obtained at http://www.thedtic.gov.za/invitation-for-comment-draft-policy-proposals-on-measures-to-restrict-and-regulate-trade-in-ferrous-and-non-ferrous-metals-waste-scrap-and-semi-finished-ferrous-and-non-ferrous-metal-products-to-li/
The draft policy proposals are sequenced across three, non-rigid phases:
- Phase 1:
- A temporary (6-month) export prohibition on ferrous and non-ferrous waste and scrap metal;
- Introduction of a permit system for the export of semi-finished ferrous and non-ferrous metal products. This will continue in Phase 2
- Introduction of a permit system for the import of furnaces and other machines capable of transforming metal and disguising its origin; and
- The establishment of an inter-departmental Metal Trade Task Force (MTTF).
- Phase 2:
- Implementation of permit system for scrap exports. After the six (6) month prohibition of scrap exports comes to an end, a permit system will, once again, be applied to the export of scrap metals, so long as sufficient progress has been made in the implementation of the various phase 2 interventions This permit system will include the application of the PPS.
- The potential extension of the temporary export prohibition on scrap and waste metal. If sufficient progress has not been made in the implementation of the phase 2 interventions and/or the extent of scrap metal theft has not been sufficiently reduced, the temporary export prohibition may be extended. The other option that government might adopt is to extend the export prohibition only for certain types of scrap and waste (e.g. copper)
- Amendment of regulations under the Second Hand Goods Act so as to impose more rigorous regulations in respect of dealing in scrap and semi-finished metals and to strengthen the reporting requirements of metal traders, dealers and recyclers;
- Introduction of additional reporting requirements including an input-output reporting system to track the purchase and sale of metal scrap and semi-finished products;
- Introduction of an enhanced registration regime which will apply to both scrap metal sellers and buyers to ensure that these enterprises comply fully with all legislative requirements;
- Inclusion of semi-finished metals in the registration regime;
- Additional restrictions on who can sell copper scrap and semi-finished copper;
- Restrictions on the ports and land borders to be used by exporters of the aforementioned products; and
- Strengthened regional and continental policy coordination, alignment and cooperation to mitigate the risk of criminal syndicates expanding to neighbouring countries.
- Phase 3:
- Potential amendments to legislation as well as the possible introduction of a new dedicated metal trading statute to further strengthen the fight against metal theft and damage to infrastructure;
- Prohibition on the Use of Cash in Scrap Metal Transactions; and
- Blacklisting of offenders.
In addition, the Minister of Trade, Industry and Competition has also released draft policy directives and notices for public comment. These are:
- a draft trade policy directive issued in terms of section 5 and draft notice in terms of section 6(1)(c) of the International Trade Administration Act No 71 of 2002, on the exportation of ferrous and non-ferrous waste and scrap metal;
- a draft notice in terms of section 6(1)(d) of the International Trade Administration Act No 71 of 2002, amending Government Notice R92 published in Government Gazette 35007 of 10 February 2012; and
- a draft notice in terms of section 6(1)(b) of the International Trade Administration Act No 71 of 2002, amending Government Notice R91 published in Government Gazette 35007 of 10 February 2012.
Members of the public and interested/affected parties are invited to submit their written representations and comments regarding the Draft Policy and the draft directives and notices within a period of 21 (twenty-one) days by e-mail to: firstname.lastname@example.org or hand delivered: at 77 Meintjies Street, Block A, 1st Floor, Sunnyside, Pretoria, 0132.
Bongani Lukhele – Director: Media Relations
Tel: (012) 394 1643
Mobile: 079 5083 457
WhatsApp: 074 2998 512
Issued by: The Department of Trade, Industry and Competition (the dtic)
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