Following many months of complaints by the utility companies that thieves were raiding their installations and making off with quantities of metal, wreaking millions of dollars of damage in the process, the government finally decided in 2006 that it would move to bring the problem to an end. The Office of the Prime Minister was assigned to deal with the problem and took the position that local scrap metal dealers bore some responsibility for the vandalizing of telephone, electricity and water infrastructure.
The authorities have come down hard on the scrap dealers. Most of them have been denied operating licenses since 2006 and the office of the Prime Minister is now firmly in control of what is perhaps best described as an export quota regime that is attended by stringent pre-shipping inspections by representatives of the utility companies.
Last year a group of dealers sought to retrieve the situation. They established a Guyana Scrap Metal Dealers Association which engaged both the President and the Prime Minister – apparently in the hope that it could persuade the authorities of its willingness to be part of an initiative to clean up the trade in order that the restrictions that are currently in place can be lifted.
The long and short of the matter is that the initiative has not been working. The Association is divided and since the thieves continue to prey on the installations of the utility companies the government continues to be unconvinced by the commitments given by the Association that it wants to have the industry clean up its act.
It is probably fair to say that such a fate would have been unlikely to befall a more recognized industry – rice or sugar, for example. Add to that the fact that there is indeed justification for the view held by government that some operators in the scrap trade are essentially ‘hustlers’ who do not necessarily trouble themselves to determine the origin of the metals that they acquire and one can understand why the industry finds itself in its current dilemma.
Much of the trade involves the illegal movement of metals across the country’s borders and there is nothing that either the government or the legitimate scrap dealers can do about this. Even with official exports under tight government controls the demand for metals continues to be fuelled by the illegal export trade. Accordingly, the theft of metals and the destruction of the installations of the utility companies continue.
The handful of dealers in the industry who lay claim to some legitimacy are crying foul over the fact that the government appears to have tarred the entire industry with the same brush, punishing them by exerting tight controls over the legitimate trade while being unable or unwilling – or both – to do anything to halt the illegal overland metal exports.
The current situation is unclear. The Office of the Prime Minister, it appears, is closely supervising the limited legal export of quantities of both ferrous and non-ferrous metals under a system that requires the exporters to pay inspection fees of $50,000 and $75,000 respectively, for every container of ferrous and non-ferrous metal exported legally. This is a new fee which the dealers say was arbitrarily imposed and which they say has nothing to do with the objective of cleaning up the trade.
What is more troubling to the dealers is that they have received no clear word from the Office of the Prime Minister about the future of the industry. While a consultant to the GSMDA reportedly claims to have held discussions with the Prime Minister during which a commitment was given to the normalization of scrap exports, other officials of the Association claim to have been told by the Prime Minister’s Office that as soon as the quotas that have been allowed under the present phase of shipping are met, the industry will be closed.
Not surprisingly the industry has been thrown into confusion and one of the few things that appear to be certain is that the restrictions on the legitimate trade have served to boost illegal exports. The GSMDA says that the government’s handling of the problem suggests that it is seeking to take the least line of resistance by caving in to the pressures being applied by the utility companies while turning a blind eye to the illegal trade. In this regard the Association cites two recent cases of metal theft and smuggling in which no charges have been brought against the offenders. In citing these instances the Association says that the authorities run the risk of being accused of double standards and prejudice if it engages in selective prosecutions.
The government will argue, of course, that it has a duty to protect the utility companies from thieves and vandals. However, whether that protection should be provided at the expense of sacrificing the legitimate operators in the scrap industry on the altar of expediency is another matter. The fact of the matter is that the banning of legitimate scrap exports is more than likely to accelerate what has now become a highly organized illegal scrap export racket and – as current events so clearly demonstrate – will not bring about a cessation in the vandalizing of the property of utility companies.
The solution to the problem lies in regulating the industry, putting in place operating standards and instituting regulations that protect the utility companies and punish the thieves and vandals who prey on their installations. Each of those pursuits is the responsibility of the government and it is in that direction that it must go.
