Measures to restrict trade in scrap metal approved by Cabinet

The South African government has taken a stringent decision to restrict the trade in scrap metal in a bid to address the damage to public infrastructure and the economy after seeking extensive legal opinion.

Minister in the Presidency Mondli Gungubele said recently that Cabinet had considered and approved the comprehensive package of measures to restrict trade of waste scrap and semi-processed metals.

Briefing the media on the outcome of the Cabinet meeting held on November 16, Gungubele said details of the measures to be implemented would be provided in a statement, which would be published once the necessary legal work had been finalised.

This follows the gazetting for public comment of the draft policy proposals by the Ministry of Trade, Industry and Competition (the dtic), Ebrahim Patel, in August 2022.

Gungubele, however, said that the details of the measures to be implemented will now be processed for publication in the Government Gazette by the relevant ministries.

“A detailed media release containing details of the measures will be released by GCIS as soon as the necessary legal work has been finalised,” Gungubele said.

“South Africa will also engage with the Southern African Development Community, African Union and the Southern African Customs Union to ensure a coordinated approach to fight this crime collectively as a region.”

In August, Patel published a policy proposal for public comment to ban the exportation of ferrous and non-ferrous waste and scrap metal for a period of six months, including copper cable, together with a permit system for export of specified semi-processed metal products.

This was the first of three envisaged phases 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.

The widespread theft of copper cable and other forms of metal from public infrastructure has crippled power supplies, left trains unable to operate and damaged public facilities in many parts of the country.

Research commissioned by the Department of Trade Industry and Competition (DTIC) from an independent research team from Genesis Analytics found that the economic damage of copper theft alone has been estimated at more than R45 billion annually.

However, the government’s proposal in August did not go down well with all its stakeholders.

The European Union (EU), one of South Africa’s largest trading partners, raised concerns in its written submission in August, warning that such “trade distorting measures” may contravene South Africa’s obligations as a member of the World Trade Organisation (WTO).

However, the DTIC’s acting deputy director-general for industrial policy Stephen Hanival said there have been discussions with the EU on why South Africa needed to implement these measures.

Hanival said they had thought very carefully about the required interventions, balancing them with what other countries such as Kenya that have imposed a permanent ban on scrap metals.

“We have chosen what we believe to be the least intrusive, but the most likely set of interventions to be effective in addressing the scourge of scrap metal trade and of the damage to public infrastructure,” said Hanival.

“We do have an independent legal opinion from a highly respected law firm indicating that within the WTO law, we are operating entirely within our rights.”

“We do have certain exceptions for our domestic policy to take account of, for example, what the WTO calls public morals, criminal activity if you like, and national security, so our exceptions are positioned to the WTO’s interventions that are allowed for in terms of international trade.”

“We also have an opinion of a body based in Geneva which analyses WTO’s decisions and WTO member states when imposing quantitative restrictions, and that legal opinion also gives us comfort that South Africa is operating entirely within the WTO legal framework and within what is required of us under our sovereignty.”

The presentation to the Portfolio Committee on Trade, Industry & Competition on the draft policy proposals on measures to restrict and regulate trade in ferrous and non-ferrous metals waste, scrap and semi-finished products to limit damage to infrastructure and the economy can be found at