If the current continually escalating demand for recycled metal signals a steady increase in industrial production following the global economic crisis, the search by the world’s more aggressive economies for recycled metal has become a mixed blessing for the international community. Reports from the United States indicate that metal theft is one of the fastest growing crimes, while in Britain, the extent of the crime has forced the authorities to resort to elaborate, hi-tech driven operations in order to rein in the culprits.
Here in the Caribbean the problem is no less acute and recently, first Jamaica then The Bahamas joined Guyana in imposing a ban on the scrap export trade. Other Caribbean countries are reportedly contemplating the imposition of similar export restrictions.
The increase in the demand for recycled metal since 2010 has been stunning. Reliable estimates suggest that demand has more than doubled between 2009 and last year and that Asia, notably China and India, are importing whatever quantities of metal they can get their hands on. Surf the internet and you will find a bewildering array of advertisements from companies seeking to buy recycled metal.
The huge demand in the major industrialized countries for recycled metal has given literal meaning to the saying one man’s meat is another man’s poison.” If recycled metal has become critical to the accelerated production in the world’s major producers of industrial goods, that demand has set in train a level of lawlessness which, in developing countries, threatens, in many cases, to seriously undermine development. Here in Guyana as in the rest of the Caribbean, the demand for recycled metal has spawned a regimen of metal theft which the authorities, having endured it for a time, have been unable to ignore. The cost is simply too high.
Time was when the industry satisfied itself mostly with abandoned motor vehicles, derelict machinery and disused domestic appliances. That is no longer the case. Rising prices driven by greater external demand have caused rogue elements to turn their attention to more lucrative targets, like, in the case of parts of the Caribbean, valuable physical infrastructure.
Here in Guyana, the authorities were compelled to pay attention to the phenomenon a few years ago when the country’s key utility providers, the Guyana Telephone and Telegraph Company, (GT&T), the Guyana Power and Light Company (GPL) and the Guyana Water Authority (GWI) began to make official protests about a pattern of metal theft that disrupted their operations. GT&T’s insulated copper cable was the prime target of the thieves and on occasion, the loss of cable crippled the telephone service in entire communities. Copper is reportedly being marketed internationally at more than US$4,500 per ton and GT&T, despite its security infrastructure cannot police its entire telecommunications build-out. The thieves know this.
Intervened
The government intervened, issued a series of tough warnings and when those did not work, instituted temporary bans. Registered scrap dealers engaged the authorities, on occasion at the levels of both the President and the Prime Minister. Nothing, not even the agreed establishment of a Guyana Scrap Metal Dealers Association, appeared to work. The theft of metal from the utility companies persisted and the government, eventually, imposed a ban on the trade.
Late last month, two member countries of CARICOM, Jamaica and The Bahamas joined Guyana in slapping bans on the export of scrap metal after the respective governments, at their highest levels, had decided that the countries had suffered enough from widespread metal theft.
In Jamaica’s case, the country’s Industry Minister Christopher Tufton announced on July 29th that Cabinet had decided to place an indefinite ban on the scrap export trade as a result of widespread theft across the island. The practice, Mr. Tufton said, had cost the Jamaican government and the private sector around US$11.7 million over the past three years.
The next day The Bahamas government announced that it was placing a ninety-day ban on the export of scrap metal and that it would meet with the country’s legitimate scrap dealers to agree on a process of certification to permit and accommodate the legitimate trade in scrap metals. In the same statement the authorities in Nassau listed a slew of consequences that have resulted from metal theft, particularly copper theft, including the loss of broadcast ability in the Southern Bahamas for up to a month, the loss of manhole covers by the country’s Water and Sewerage Commission and other private sector complaints of loss of revenue on account of copper theft.
Those Caribbean countries that have banned the export of scrap metal have all publicly indicated that they are prepared to countenance the trade if it can be regulated and if the practice of metal theft can be reduced if not eradicated. In Jamaica, the Industry Minister had dropped a broad hint that the ban on the trade could be lifted at year-end to allow companies that generate their own scrap to apply for export permits. In The Bahamas, the government is seeking to try to reach a modus vivendi with operators in the industry.
If the Guyana experience is anything to go by, however, regulating the scrap export industry will not be easy. The experience here, the strenuous denials of the licensed scrap dealers notwithstanding, has been that there is considerable collusion between the relatively small number of legitimate dealers and the much greater number of sizeable but illegal operators plus the large army of ‘scavengers’ whose opportunistic pilfering has wreaked havoc in some sectors.
Like in the rest of the Caribbean, Guyana’s tele-communications, electricity and sewerage and water sectors have suffered considerable losses at the hands of metal thieves. The Guyana Telephone and Telegraph Company’s insulated copper cable has been a prime target for the thieves.
More than a year ago the Government of Guyana had been seeking to accomplish just what the authorities in Nassau now appear to be striving for, some measure of regulation for a largely unregulated industry. The line of reasoning here has been that if the industry could be governed by a set of rules and given some responsibility for its own regulation, that might encourage the rogue operators to clean up their act and drive the scavengers away. As part of that approach it had been agreed that prior to shipments of scrap being sent overseas, consignments would be subject to official inspection. This in itself was seen as only a limited solution since it is, for example, impossible to determine the origin of copper that has been stripped of its insulation as part of the process preparatory to export.
Squabble
The approach of seeking to form a partnership between the government and the legitimate scrap dealers to put an end to metal theft failed for a number of reasons. First, the Guyana Scrap Metal Dealers Asso-ciation erupted into a fierce internal squabble shortly after its establishment, dismembering the organization and strengthening the hand of officials who were advocating that the trade be banned altogether. Secondly, the legitimate scrap dealers found it impossible to rein in their rogue counterparts all over the country who largely ignored the official inspection process to which scrap shipped out of Guyana was subjected, opting for the illegal movement of the metals across Guyana’s porous borders and into neighbouring countries.
The third difficulty that has affected the relationship between government and the scrap dealers has to do with strong and, in many instances, justifiable doubts about the claims by the dealers that they are not acting in concert with the illegal operators and scavengers who indulge in indiscriminate and frequently purely opportunistic metals theft.
Over time, the weaknesses of the industry have simply strengthened the government’s hand and eroded the modest lobby which scrap dealers once possessed.
But the problems associated with the scrap metal industry in Guyana and elsewhere in the Caribbean are literally a microcosm of a global problem which has to do with the enormous growth in demand for metals. A week ago the Institute of Scrap Recycling Indus-tries (ISRI) released the outcomes of a study highlighting the significance of the economic impact of the scrap trade in the US. The analysis provided by the study industry indicates that scrap recycling in the US accounts for more than 450,000 jobs, a relatively small number for the United States. However, the study notes that apart from the fact that the scattered nature of the industry means that it provides jobs for people across the country, it also generates around US$10.3 billion in tax revenues for governments across the country while making old things new again.
On the other hand, driven by rising demand and ever rising prices for recycled metals, metal theft is also impacting on the United States at several levels. Research indicates that it has become one of the fastest growing crimes in the United States. Copper theft, for example, includes gutters, flashings, downspouts, water lines and electrical wiring all of which can be quickly stripped from vacant buildings, industrial facilities, commercial buildings and construction sites. Air conditioning units are particularly attractive, and are often tampered with or stolen for their copper coils and pipes for a huge profit. Vacant buildings and homes under construction are reportedly huge targets.
The same is true in the United Kingdom where ever rising demand has driven metal thieves to target copper signals and power cables from the country’s railway network, prompting the authorities to mount a major police operations utilizing helicopters and a specially adapted “quiet train,” thermal imaging equipment, motion detectors, police dogs and motor cycles in an attempt to catch the culprits.
Here in the Caribbean the future of the trade is uncertain. In Guyana, for example, the trade has only secured marginal recognition as a mainstream enterprise and while several operators have done well out of dealing in scrap metal, the fact that it makes a minuscule contribution to the local economy means that it can be easily targeted. It is pretty much the same in the rest of the Caribbean.