With the Old Metal Dealers’ Act having just been amended to grant government the power to halt the trade in scrap metal, local dealers are pondering the implications of the amended legislation for the future of an industry which they say provides a livelihood for more than 30,000 Guyanese.
The content of the recent amendment, however, suggests that government, and particularly Prime Minister Samuel Hinds, is questioning the legitimacy of the manner in which that livelihood is provided and is determined that the scrap metal industry as a whole must either “shape up or ship out.”
Some dealers with whom Stabroek Business spoke in the wake of last Thursday’s parliamentary amendment to the Act are clearly intimidated by what one dealer says is legislation “that holds a legitimate business to ransom and that can bring the industry to a halt at a moment’s notice.” At the moment dealers are still awaiting the “green light” from the Office of the Prime Minister to resume the export of scrap – mostly to North America and Asia – following a temporary and, they contend, unlawful imposition of a ban on exports imposed last year in the wake of sustained complaints of theft of metals by the country’s main utility companies – the Guyana Telephone & Telegraph Company, the Guyana Water Inc. and the Guyana Power and Light Company.
While some dealers are describing the new legislation as an unfair attack on the scrap metal trade a representative of one of the country’s oldest scrap metal establishments told Stabroek Business recently that there are “close links” between legitimate dealers and scrap metal thieves. “There are cases in which stolen scrap is knowingly bought by exporters. It is simply an issue of no questions being asked,” the source told Stabroek Business.
GT&T particularly has been bemoaning what it says are millions of dollars in losses resulting from the vandalizing of its insulated copper cables, a commodity which dealers say is in particularly high demand among exporters. The Stabroek Business source insists, however, that much of the stolen cable and other metals acquired from utility companies is not supplied by vandals but through organized rackets involving employees of the utility companies. “There are numerous cases in which metals are delivered directly to dealers in vehicles owned by utility companies,” the Stabroek Business source said. GPL’s Chief Executive Officer Bharrat Dindyal is on record as conceding that there has been collusion between the utility company’s employees and scrap metal dealers in the theft and sale of metals.
The recent amendments to the old Metal Dealers Act appear to mark a decisive move by Prime Minister Samuel Hinds to put an end to the scrap metal “racket.” The office of the Prime Minister is now empowered to respond to transgressions by shutting down the export trade for up to a year. The new legislation also imposes fines ranging between $20,000.00 and $1m and jail terms of up to one year for dealers caught breaching the rules.
With the industry now under closer official scrutiny scrap metal dealers, late last year, established an Association of Scrap Metal Dealers designed, they say, to help establish a code of conduct for the industry. Earlier this week, Malek Cave the Association’s Technical Adviser told Stabroek Business that the Association is seeking to collaborate with the Office of the Prime Minister and the utility companies to curb the “rogue element” in the business. The new Association, Cave says, is seeking to outlaw unregistered scrap metal businesses and to require legitimate dealers to become members and adhere to stringent regulations governing the acquisition of scrap.
Up until now, however, there has been no formal engagement between the affected agencies and the Association to bring a greater measure of regulation to the trade even though at least one of the three utility companies – GT&T – has said that it is prepared to engage in any constructive collaboration that will help bring the vandalizing of its installations to an end.
While the new legislation clearly places the onus on scrap metal dealers to “clean up” the industry or face tough consequences Cave says that government also has a responsibility to implement policing measures to curb scrap metal rackets. He says that while the Association “fully supports” official moves to curb the theft of metals it questions the ban placed on scrap exports prior to last week’s amendment of the Scrap Metal Dealers Act. Cave says that the Association will be writing to the Prime Minister shortly in an effort to break the impasse over the resumption of scrap exports.
The Stabroek Business industry source believes, however, that the recent amendment to the Act could work against legitimate dealers without affecting the illegalities in the trade. He points out that while legislation seeks to target scrap exported through legitimate ports it does nothing to curb the illegal overland export of metals to Brazil and smuggling of copper to Suriname by speedboat. Stabroek Business has learnt that Asia, particularly China, has become an increasingly lucrative market for scrap metal and that the illegal export of metals takes advantage of the vulnerability of the country’s borders.
The global expansion in the scrap metal trade and the attendant price increases for scrap have also resulted in a marked rise in the number of resigtered dealers in Guyana. According to Cave official local scrap metal dealerships jumped from 5 to 16 between 2004 and 2006.
