The Metal Recyclers Association of South Africa has opposed the amendments to the pricing preference system (PPS) guidelines on the exportation of ferrous and non-ferrous waste and scrap.
MRA made a submission to the International Trade Administrative Commission of South Africa (ITAC) on accounts that the amendments will only encourage the growth of local, unmonitored copper melting practices to try and make up the deficit which will be caused by export options being made unavailable via these amendments
MRA are also of the opinion that ‘stolen’ copper will be exported as unidentifiable copper which has been remelted by unscrupulous traders.
Apart from highlighting its impracticality and efficiencies within the current PPS guidelines, the grounds on which the MRA has further opposed the amendments also closely monitor the legal foundations on which trade in ferrous and non-ferrous scrap are being impeded in relation to the International Trade Administration Act 2002, the World Trade Organization and the South African Constitution.
The PPS has proved flawed and unworkable and since its implementation in 2013, it has subsequently not managed to achieve its intended goals.
MRA’s submission includes environmental, unfair trade practices, reduction in scrap prices and regulatory burdens. However general and unintended they may appear, MRA counts on the effect of these amendments on the informal sector, which has been addressed as one of the main concerns.
The current amount of informal collectors stands to well over 400,000 people who are responsible for around 1.8 million dependants and these proposed changes with the PPS will have a direct effect on the ‘employment’ opportunities within this sector.
According to the submission, the risk that will be imposed on the sourcing of scrap metal at this stage is the bigger picture which mostly includes digging through rubble and industrial area waste which this community is walking the streets of Johannesburg daily trying to collect. It would therefore be ignorant of the industry to suggest that crime will not increase as the price for scrap diminishes and scrap yards are forced to implicate this market with the massive price cuts.
Since the introduction of the PPS, unemployment and job losses are already having a significant impact. Subsequently, the administrative burdens the amendment wishes to impose form unnecessary barriers to trade are unrealistic and violate the proportionality principle as outlined in the WTO.
Furthermore, the proposed amendments which have presumably designed to tighten controls would limit, if not, make it impossible to engage in legitimate exports and are not conducive to the facilitation of trade as envisaged in the ITA Act.
Chairman of the MRA, Quintin Starkey says that based on the comments outline of their submission and the requests by the MRA for an audience with ITAC and the pertinent government departments involved, it is not their intention to behave in a hostile way.
“MRA is a representative for the majority of scrap metal dealers in South Africa and would therefore like to encourage industry consultation before decisions like the proposed amendments are made which can and will have a detrimental effect to the interests of an already fragile industry,” says Starkey.
Starkey concludes that in addition to violating several domestic and legal rights, which includes the right to conduct their trade, the right to freedom of trade as embodied in both the ITAC Act and their membership of the WTO, the right to just administrative treatment, and the right to take further action should MRA concerns not be taken into account.