Industry Ministry to Outline Way Forward for Scrap Metal

KINGSTON — The Ministry of Industry, Investment and Commerce is to prepare a Cabinet submission to outline the way forward for the scrap metal industry, following the temporary shutdown of the trade.

Minister of Industry, Investment and Commerce, Dr. Christopher Tufton, at a press briefing held today, at the Ministry in New Kingston, said that the submission will be presented to the Cabinet on Monday, July 25.

The Minister has given instructions that all exporters of scrap metal with inventories on hand must collect their containers from the ports by the latest, Friday, July 22, 2011. These must be packed and returned to the port by July 29. Thereafter, no new scrap metal will be accepted at the port for export.

Dr. Tufton told the briefing that currently, there are too many players in the industry and this is contributing to the problems they are now having with the trade.

“The natural generation of scrap, based on the operations of legitimate businesses, is taking place at a slower pace than the appetite that exists out there to satisfy the many players who are attempting to make a living out of the collection and export of scrap and, as a consequence, persons are engaged in illicit activities which ultimately has a negative impact on legitimate operations,” the Minister said.

He added that if the industry is to move forward, there needs to be a significant consolidation in the number of sites available for the inspection of scrap metal.

“Even though the rules require sites to be inspected and, the loading of containers and the exporting of containers to be subjected to inspections, the logistics and  the practicality of doing that, because of the number of sites that exist out there, makes it almost impossible. Therefore, if this industry is to continue, one would have to look at major consolidation of those sites. That’s a proposal on the way forward,” Dr. Tufton stated.

“The other area I think would require significant examination is the extent to which entities or individuals who are engaged in the industry are subjected to a fit and proper test. There are many entities, many sectors that require fit and proper examination to determine who the players are. I think that any future industry, if it is to function and function in a way that minimises the deviant activities, would have to be subjected to that,” he added.

Dr. Tufton also pointed out that the regulatory framework of the industry, if it is to continue, and the involvement of the State in the trade, would have to be examined in a serious way.

“It could be as extreme as the State being the sole exporter of scrap metal. In other words, they purchase from traders under certain conditions, which verify that the product is inspected and that the product is not taken from any illegitimate operator. That is one option that could be considered; or the State could manage central sites and have private operators within those jurisdictions and subject them to certain standards and procedures to minimise the impact,” the Minister said.

Dr. Tufton added that the very extreme position that the government could take is to shut the industry down totally.

The scrap metal industry earned less than US$20 million in 2010. However, there has been over a $1 billion in losses which have been attributed to scrap metal theft.

By LATONYA LINTON, JIS Reporter