ISRI submits comments on South Africa’s export ban proposal, offers guidance on metals theft

In a recent Institute of Scrap Recycling Industries’ (ISRI) newsletter – Scrap News – Hannah Zuckerman reports that on 25 August 2022 the ISRI, based in Washington DC, USA submitted a letter to the government of South Africa regarding the country’s draft policy proposal of 5 August 2022 to restrict and regulate trade of ferrous and non-ferrous metals.

If passed, the proposal would restrict and regulate metal waste, recyclable metal, and semi-finished products, the article continued. The stated objective by the government is to limit damage to South Africa’s infrastructure and economy. The proposal would initially implement a temporary six-month ban on the export of recyclable metal from South Africa.

“We were alerted by our members in South Africa and the BIR (Bureau of International Recycling) that this new policy was proposed by the government of South Africa to address infrastructure metals theft in the country,” says Fred Fischer, ISRI’s assistant vice president, international trade. BIR and the Recycling Association of South Africa (RASA) join ISRI in opposing the policy.

South Africa is facing a serious challenge from the theft of metals from public infrastructure, including the country’s electricity grid and rail transportation network. Examples of stolen infrastructure materials include copper wiring and steel support pylons for the country’s electricity grid, railway tracks, streetlights, maintenance hole covers and roadway safety railings. According to a study commissioned by the government of South Africa, the theft of copper alone has an annual economic cost exceeding $2.6 billion.

While the government’s goal is to disincentivise metals theft, ISRI and other associations expressed concern that the proposal conflates metals theft with the legitimate trade and export of recyclable materials. ISRI, BIR and RASA note that banning the sale and export of recyclable materials, even temporarily, may not reduce thefts.

“ISRI recognises the seriousness of the challenges that South Africa is facing regarding infrastructure theft and supports the implementation of thoughtful and effective policies that will address this problem,” Fischer says. “However, we believe that banning the sale or export of scrap metal, even on a temporary basis, is not an effective policy tool to halt infrastructure theft.”

ISRI and BIR expressed concern that restricting the trade of ferrous and non-ferrous metals could cause harm to an essential economic sector that contributes to a more sustainable, circular economy. Metals thefts harms all legitimate businesses and restricting exports will harm the economic efficiency of those recycling businesses in South Africa by substantially lowering prices for recyclable metal.
In its comments to the South African government, RASA noted the recycling industry in South Africa has already been negatively impacted by Covid-19 restrictions, lockdown, looting and flooding, “which has already negatively affected employment rates within the sector, leading to the retrenchment of up to 70% of staff in some business.” The association added the proposed ban could lead to job losses and company closures in the metal recycling sector.

ISRI is no stranger to combatting metals theft in the United States, particularly helping recyclers connect with law enforcement on catalytic converter theft. “We are interested in collaborating with South African policymakers and regulators to help develop an effective programme that works with the scrap metal recycling industry,” Fischer says. “We let the government of South Africa know that we are available to assist with theft prevention efforts, such as developing a programme to improve the traceability of metals that enter legitimate recycling enterprises, strengthen customs controls and export enforcement to reduce illicit trade, and support legitimate recycling businesses and identify unregulated scrap yards, metalworks, and foundries.”

ISRI also recommended more enforcement of South Africa’s existing export control system rather than prohibiting all exports. “We encourage policies that will result in positive outcomes that benefit all legitimate parties,” Fischer says. “We encourage the government to view South African recyclers as partners in metals theft prevention and collaborate with the industry to develop solutions that work for everyone.”

ISRI has been in touch with the Office of the US Trade Representative and the Commerce Department on this matter and will reach out to the recycling industry in South Africa to offer support. ISRI will keep members informed as new developments arise.