Metal exporters want urgent presidential intervention

– end to crippling squeeze on trade

– business ministry working on new procedures

Piqued over what it says has been the suspension—without either notice or official notification—of the scrap metal trade by the APNU+AFC administration since June last year, the Guyana Metal Recyclers Association (GMRA) the official umbrella body for local exporters has told the Stabroek Business that the protracted inability of businesses to ply their trade is wreaking havoc with the industry and denying legitimate businessmen the right to earn a living.

On Wednesday GMRA Secretary Michael Benjamin bemoaned what he said was the shoddy treatment meted out to the association insofar as it had to learn “second hand” about the decision to close the trade and, moreover, that the trade has remained closed for more than a year with no indication up until now as to when it is likely to be reopened.

The APNU+AFC administration last year removed responsibility for the administration of the scrap metal trade from the Central Housing and Planning Authority (CHPA) to the Ministry of Business and earlier this week a ministry source told this newspaper that consultations had been held at which proposals had been mooted for restarting the trade under a reconfigured regime. This newspaper was further told that the reconfigured arrangement would seek to take account of the concerns of the stakeholder community beyond the exporters themselves and that the new arrangement would have to secure Cabinet approval before it is introduced. There is, however, as yet no definitive indication as when the trade will be restarted.

Guyana Metal Recyclers Association President Michael Benjamin
Guyana Metal Recyclers Association President Michael Benjamin

In December last year the accounting firm Ram and McRae produced an audit report in which it charged that the Scrap Metal Unit located within the CHPA was guilty of a slew of irregularities including some related to the mishandling of packing procedures for scrap and the questionable expenditure of millions of dollars.

The report also alleged that under the watch of the unit there had been instances in which the Guyana Revenue Authority had neglected to collect export duty on scrap metal leaving the country.

Another source has told this newspaper that official concerns over the future of the trade also centre on failure to staunch the flow of theft of metals from service entities including the Guyana Telephone and Telegraph Company and the Guyana Power and Light Company.

In July last year, the association wrote to Minister of Communities Ronald Bulkan seeking resumption of the processing of shipping documents for metal exports so that containers that had been held on wharves following the June suspension of the trade could leave. The communication had articulated a litany of consequences for exporters that had accrued in the wake of the cessation of the trade including mounting demurrage costs for containers of metal stored on wharves, outstanding loans with local commercial banks, outstanding debts for the rental of scrap metal yards and additional freight costs levied by shipping lines.

Benjamin told Stabroek Business on Wednesday that among the other additional consequences which had accrued to the exporters were loss of overseas markets and possible litigation arising out of breaches of contractual agreements.

A scrap yard in the city
A scrap yard in the city

He said the halting of scrap exports had also resulted in local exporters being deemed unreliable suppliers. He said he was personally aware of three cases in which commercial banks had foreclosed on local exporters and repossessed equipment.

Stabroek Business has also seen a January 16, 2016 letter from the GMRA to President David Granger, alluding to “the predicament of scrap metal dealers” and requesting that the trade be “resumed as soon as possible.”

The letter stated that while “42 containers that were laden with scrap metal at the closure of the trade were released in December for export,” businessmen who are members of the association continue to be burdened with “increasing issues.”

The letter to the President asserted that “various meetings with the Minister of Business have still not produced the desired results.”

On Wednesday the Ministry of Business spokesperson said that in its ongoing efforts to bring closure to the issue the minister had met an official of the association in April.

While the GMRA comprises 25 licensed exporters, the domestic trade as a whole includes significantly larger of collectors who are usually granted monthly permits to legitimately acquire and deliver scrap metal. Watchers of the industry have opined that there is collusion between some scrap metal dealers and metal thieves, though Benjamin told Stabroek Business that there have been cases in which thieves have been caught and turned over to the police and no action has been taken against them.

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