Local scrap metal dealers who are members of the Guyana Scrap Metal Dealers Association (GSMDA) are asking the Ministry of Tourism, Industry and Com-merce to properly account for a sum “in the region of US$1 million reportedly paid to it over a period of time to finance a monitoring unit to inspect scrap metal prior to export.
The query regarding exactly how the sums have been spent has arisen in the wake of the April 30, ban on the export of scrap imposed by the government. The ban has been attended by charges by some exporters that it might have resulted – at least partially – from the failure of the monitoring unit to perform its functions effectively.
Newly elected President of the GSMDA Alfred Branche told Stabroek Business in a telephone interview earlier this week that following an earlier ban on the trade in 2007 it had been agreed that the restoration of the trade would be attended by the setting up of a unit to monitor scrap exports in order to curb the incidence of theft that has cast a cloud over the industry. “We were told of the need to set up the monitoring unit and were informed that exporters would have to finance that cost. It was agreed that exporters would pay US$125 per 20 ft container of scrap and US$150 per 40 ft container.”
Branche said he believed that initially the monitoring unit comprised about “four to six persons” and during the first six months the system appeared to work fine. “What we would do is to notify the unit that there were consignments of scrap being prepared for export and they would visit the site and inspect the scrap. It seemed to me that after the first six months the system fell away. Eventually, the unit was reduced to one inspector and obviously there was a limit to the extent to which he could carry out effective inspections,” Branche said.
Although the GSMDA President stopped short of blaming the monitoring unit for the current travails of the sector, he said suspicions have settled over the scrap metal trade once again, and has led to the current ban which might have been avoided if the trade was being monitored properly under the agreement reached between the GSMDA and the Government of Guyana. Branche conceded too that exporters were tardy in moving to investigate the decline in the monitoring service.
A Commerce Ministry source acknowledged that a monitoring unit had been set up within the ministry. However, the source “was not at liberty” to provide any information regarding the funds paid to the ministry for the setting up and running of the unit.
Branche said the GSMDA had written to the Office of the Prime Minister, the state agency with which the exporters have been interfacing, seeking an explanation regarding the manner in which the amounts paid to the Ministry of Commerce had been used. At the same time, Branche said the recently re-fashioned GSMDA is keen to re-establish a relationship with the authorities and re-start discourses that would lead to a normalization of the scrap trade.
The most recent ban on the scrap metal trade announced on April 30, came in the wake of ongoing reports of metal theft from local utility companies and Branche conceded that that inability of the GSMDA “to control all of the various aspects of the trade” is a challenge that it has to seek to overcome. While hundreds of operators – both legal and illegal – are involved in the local scrap metal trade, Branche told Stabroek Business that the GSMDA comprises about 20 members. “We believe that the situation has to be overcome by the GSMDA and government working together to institute measures to bring people in the trade on board. We also need stricter laws to punish offenders,” Branche said.
Branche told Stabroek Business that “people are suffering” as a result of the recent ban. “Banks are beginning to make calls on exporters and there has been a great deal of loss arising out of unfulfilled contracts. Overseas buyers would have made commitments based on confirmed orders made with local exporters. What this means is that in the future those buyers will not want to sign contracts with us. With millions of dollars in cargo tied up here in Guyana there is a danger that we may now be deemed an unreliable supplier,” Branche said.
While speculation has been rife that the current ban may signal a complete official loss of patience with the sabotage of installations and theft of metals that have been linked to the scrap metal trade, this newspaper has learnt that it is not unlikely that Prime Minister Samuel Hinds may meet the GSMDA shortly in yet another effort to salvage the sector.
The prevailing view among registered exporters is that a ban on the official trade is likely to see an increase in the illegal cross-border export of scrap in which foreign operators are believed to be involved and which the authorities have been unable to stop.
This newspaper understands that the scrap exporters have taken their case to the Georgetown Chamber of Commerce and Industry (GCCI) and that it is likely that the Chamber may raise the matter with the Office of the Prime Minister.
