Significant alterations to existing scrap metal regulations and outright bans – albeit temporary – on the trade of certain scrap metals should not be made without access to transparent and accurate sector data, international trade consultancy XA Global Trade Advisors director Donald MacKay has said.

XA this month launched a new online platform called MyScrapMatters, which is meant to help avoid uninformed decision-making from occurring in future by acting as a centralised hub to provide comprehensive information about the scrap metal industry in South Africa.

“We would like to avoid a situation, as we had a little while ago, where we had banned the export of scrap metal, but no data was made available on what its effect was on the theft of infrastructure.

“So, we've gathered some of that data and we've published it on the website, and we'll continue to put it up as we get more. We'd like to get to a point where, when an aggressive action like a ban happens, that it is based on data, and we'd like to make that data freely available,” he tells Engineering News.

The aim of the website is to assist in regulating scrap metal in the country by promoting transparency and addressing theft. The website also aims to promote sustainability in the scrap metal industry.

“There's no [other] single place you can go to get any sense of what is actually going on in the sector or, for that matter, even just hard data on the sector. So, what we end up seeing is sometimes policies which are quite disconnected from reality. We want to make it easier for there to be a single place you can go to that is reliable and has whatever data we can put together on the sector in a well-organised way,” MacKay says.

XA reviews, manages and aggregates the content on the website to ensure the accuracy and reliability of the data provided. The consolidation of information is designed to ensure that users have easy access to relevant content without the need to search multiple sites.

“I think we'd like to be putting more data up on things like, for example, the very large value transfers that happen within the scrap metal sector. So, for example, when somebody generates scrap, that scrap is sold locally at quite a big discount. At the moment, that's around 35%.

“We'd like to do more analysis on what is happening with that 35% [which, by our calculations] amounts to somewhere around R8-billion a year being transferred from the big producers to the downstream consumers. We'd like to do more analysis on that to understand how investment flows are connected to these policies,” MacKay explains.

REGULATORY ISSUES

MyScrapMatters also has a dedicated news and updates section which is aimed at keeping stakeholders informed with updates on market trends, regulatory changes and industry developments.

Among these are the proposed amendments to the Regulations to the Second-Hand Goods Act put forward for public comment by the Civilian Secretariat for the Police Service on July 12.

On July 24, industry body the Steel and Engineering Industries Federation of Southern Africa (Seifsa) criticised the amendments which called for a blanket ban on cash being used in scrap metal trading as a means of curbing theft and fraud in the sector.

Seifsa said this regulation would exclude informal waste pickers from participation in the market. According to the South African Waste Pickers Association (Sawpa), there are at least 90 000 waste pickers in the country, of which only about 6 000 are registered with Sawpa.

“By volume, they don't account for a huge portion of the scrap metal collected overall. However, in their lives, it's obviously a very big deal, because there isn't any other form of scrap that generates an equivalent amount of income. So anything that interferes with that, has the potential to harm them,” MacKay acknowledges.

However, he notes that curbing scrap metal theft in South Africa is a significant problem affecting all sectors of South Africa’s economy and that measures to curb it cannot be simply dismissed in favour of a relatively small collection of individuals.

“You don't want to create a situation where [certain individuals] can hide behind the fact that they are waste pickers but they're actually stealing infrastructure. So, I think that's the kind of balance that these rules are trying to achieve,” he says, noting that legitimate good-faith participants in the recycling sector have been calling for a ban on cash scrap trading for years.

“There are also other systemic problems which I think are still not being addressed. For example, when you register your [scrap] yard, you register at your local police station. There isn't an online facility where other people can check if you've behaved poorly, so you'd need to go to the police station where the company is registered.

“The police don't make data available across the country of who owns which yards. So, if they've been caught with stolen product, there's no way to easily [determine if] this a questionable person or not,” MacKay points out.

He says stricter measures would not hurt honest scrap dealers but would rather go a long way toward reducing theft.