Dionne Rose, Business Reporter
A heap of scrap metals await sorting, near the entrance to the Riverton Landfill, in Riverton City, Kingston, November last year. - file
It used to be the Wild West of exports, unfettered by rules and regulations. But the Government appears to be having success in bringing order to the trade in scrap metal.
But success, it seems, has its price. Not only are there fewer complaints from government agencies and utility companies of critical infrastructure being illegally dismantled for sale abroad, but a decline in export earnings.
For the first 11 months of last year, for instance, the value of scrap exported from Jamaica was US$74.258 million against just under US$100 million for all of 2006.
For the first three months of this year, the Trade Board had issued licences for the export of only US$9 million, and both regulators and dealers say that earnings for 2008 is likely to be substantially below those of recent years.
Lower-value scrap
"The scrap that is being generated is much less (in value) than last year," said Claude Fletcher, the head of the Trade Board, the agency that issues export licences. "All the higher-end scrap have already gone through. A lot of (lower) value scrap are now going through."
It may only be coincidental that there has been an obvious decline of the reports of stealing of material to be sold as scrap, for dealers claim that the real constraint to the growth of their business is now government bureaucracy.
"The slow pace from the Trade Board side tends to set you back because you have to go there and wait," says Sharon Klienhans, a scrap dealer who exports to Asia and North America.
"It is more money, more stress, more everything," added dealer Joseph Nation, who says he knows of three colleagues who have left the business because of the alleged bureaucracy.
"I almost give up and everything and forget about it," Nation said.
Indeed, the environment in which the scrap dealers operate is significantly different up to last September when the administration changed and Karl Samuda was appointed the minister for trade and commerce.
Dealing in and exporting scrap metal was among the fast-growing earners in Jamaica, driven by the demand for metals in countries such as China, Taiwan, the United States and India.
The numbers vary slightly from those produced by Jamaica's Statistical Institute (Statin), but according to the International Trade Centre, up to 2002, Jamaica earned a mere US$321,000 from the export of 601 tonnes of scrap metal. But two years later volume was up to 24,319 tonnes, valuing US$22.87 million.
US$ earner
By the following year, 2005, export of scrap had increased by 70 per cent to 41,410 tonnes, which grossed US$12.34 (???? check this number) million. Exports, according to the ITC, almost doubled in 2006, to 80,299 tonnes, which earned US$97.157 million ($6.79 billion) .
But as the export volumes and earnings increased , so did the complaints of bridges being dismantled and railway lines being lifted up to be sold to scrap dealers who asked no, or few questions. The light and power company, Jamaica Public Service (JPS), and the fixed line telephone provider, Cable & Wireless, lamented their cables being cut and other equipment removed, destined for scrap dealers.
Indeed, earlier this week, police arrested one man for allegedly stealing hundreds of metres of telephone cable in the Threadways district of St Catherine, while another man, was charged for receiving stolen property. In such thefts, the copper wire is extracted from the cable and sold as scrap for export.
Last October, the face of the deepening disquiet over the problems, Samuda stepped. He suspended the export of scrap material for several weeks, and drew up regulations requiring dealers to register.
They had to be accountable for the material they export and required clearance from the Trade Board for each shipment they sent abroad.
According to the minister, the process, at least with regard to the theft of government material, is working.
"What we have found is that we don't have a problem of infrastructure metal being stolen anywhere," he said. "What we must seek to do is to ensure that we don't get a return to the wild and woolly days when people's manhole covers, bridges and telephone cables were stolen."
