Sabahi (Washington, DC)

Kenya to Regulate Scrap Metal Sector to Curb Costly Vandalism

Nairobi — Keen to rein in escalating incidents of vandalism of guardrails and streetlamps by unscrupulous scrap metal traders, the Kenyan government has heeded calls from stakeholders and fast-tracked the pending scrap metal bill.

The cabinet approved the Scrap Metal Bill 2013 on November 1st and sent it to parliament, eliciting relief among legitimate operators in the lucrative scrap metal industry who say the business is tainted by illegally acquired goods and want parliament to approve the bill without delay.

Lawmaker Irshadali Mohamed Sumra, who represents Embakasi South, said the bill would be discussed in parliament early next year when lawmakers return from recess, which started December 5th.

"We hope by end of February or beginning of March 2014 to have this bill signed as law," he said.

Scrap metal traders in particular say they are pleased with the bill because it would regulate the industry and enable them to transact their business without the disruption of police sweeps that often occur when cases of vandalism are reported in the media.

Robert Nyasato, owner of Allied Metals Services Ltd, says the bad reputation the scrap metal sector has received is unfair as the majority of metal merchants are law-abiding citizens.

"It is a shame that a small section of the industry has given the public and the government the ammunition to hit us with," he told Sabahi.

"I have declined to purchase scrap metal from street children and other traders whom I suspected to have acquired them through questionable means," he said. "This shows that some of us are responsible businessmen who do not deserve to be labelled as supporters of vandalism."

Scrap metal export ban bad for business

Previous attempts to control the industry have been ineffective, and scrap metal dealers who spoke to Sabahi say they hope that with this new bill the government will be able to deter illegal activities without harming lawful traders.

In an attempt to curb the destruction of public infrastructure, the Ministry of Trade banned the export of scrap metals from Kenya in June 2010. The ban was approved and enforced by the East African Community and applies to exports outside the bloc.

But the ban has harmed honest businesses and offered no solution to stop criminal elements, scrap metal dealers say.

"Since the ban, my then-thriving business which purchased genuine scrap metals from freelance collectors shrunk in size and operation," said David Mugweru, proprietor of Nairobi-based Dama Scrap Metal Dealers.

"Banning the scrap metal exports was unwise. It led to job losses and reduction in my income, yet what the government should have done is to regulate the industry," Mugweru told Sabahi, adding that he had to lay off five workers.

"However, I foresee good times ahead for my business because this law is what our industry has been crying for, for years," he said.

Provisions of the bill

Currently, anyone with scrap metal can sell it to any buyer without explaining its origin, how it was acquired or proof of ownership. This absence of regulation is what opened the doors to illicit scrap metal retail, wholesale and black market exportation.

The proposed bill sets up a licensing procedure and establishes the appointment of scrap metal inspectors to investigate premises where scrap metal is stored or transported and question dealers to ascertain the legality of their activities. When evidence supports their cases, inspectors may seize suspected illegal materials and arrest the dealers of such metals.

Under the new law, dealers would be required to record sellers' names, identity numbers, telephone numbers and physical addresses, which would aid police investigating potentially illegal transactions.

Furthermore, anyone who wants to be a scrap metal collector must obtain a license, operate in a designated area and not exceed the allotted quantity of 1,000 kilograms, according to the bill.

Now, collectors can operate without being registered, moving from one town to another in search of scrap metal, a loophole that has allowed many to acquire scrap metal in black markets nationwide from youths who vandalise public properties.

"Most youth prefer selling vandalised scrap metals to underground scrap metal dealers because they pay higher compared to us," Mugweru said. "They could be paying 60 shillings per kilogram, which means if a youth vandalised a road [guardrail] weighing 50 kilograms, he could fetch 3,000 shillings ($35)."

Prices for scrap metal depend on the type of metal, but legitimate dealers offer far less. "We buy scrap metal in kilograms with a kilo of steel fetching between 35 to 40 shillings," Mugweru said.

Bringing order to the industry

Karanja Njoroge, chairman of Public Interest Stakeholders in Scrap Metal Industry and executive director of the Centre for Environmental Action, told Sabahi that the bill would address legal loopholes that have facilitated black market trade.

Under the bill, a Scrap Metal Council would be set up to regulate and monitor trade, a provision that Karanja says will bring much needed order to the industry. "The council will vet traders seeking licenses. This will smoke out rogue traders," he said.

"I support the requirement that traders pay 2 million shillings ($23,000) to get a dealer's permit because this will weed out people who are not ready to play by the rules," Karanja said.

The bill also makes it mandatory for all dealers to keep a record of the type and sources of metals they acquire and requires a 14-day delay before scrap metal is smelted.

"This provision has solved the problem we have currently because stolen scrap metals are immediately melted, thus erasing evidence," Karanja said. "This provision will facilitate the government's scrap metal inspector to verify the source of the metal."

Nonetheless, some dealers say the record-keeping requirements in the bill are too stringent, and the fines associated with them could push law-abiding dealers out of business.

"Sometimes it is hard to verify the source of scrap metals, especially when it has changed hands severally among traders," said Eliud Mureithi, proprietor of Heshima Scrap Metals based in Naironi. "We wanted the government to consult us further so that we can be on the same page regarding the process of checking out whether scrap metal is acquired illegal by sellers."

Under the bill, anyone found with scrap metals acquired illegally would face a 20-million shilling ($230,000) fine, seven-year jail term or both.

While metal dealers have lobbied the government to reduce the fine, Ministry of Industrialisation and Enterprise Development Principal Secretary Wilson Songa said it was an appropriate amount to discourage rogue scrap metal dealers.

"This bill will streamline the sector and not stifle business as many traders fear," Songa said, adding that dealers who operate lawfully have nothing to fear.

High cost of vandalism

Meanwhile, Kenya National Highway Authority (KeNHA) general manager in charge of maintenance Samuel Ogege said scrap metal vandalism has cost the government hundreds of millions of shillings.

"We had to hit [vandals] hard because they were reversing the good work done by the government," Ogege told Sabahi.

KeNHA spends about 120 million shillings ($1.4 million) annually on repairs to replace road facilities vandalised by scrap metal thieves along Mombasa and Thika roads, he said, attributing some road accidents to vandalism of important traffic warning signs.

"I urge all Kenyans to be vigilant against vandals and help the government fight against greedy scrap metal dealers because they expose motorists, passengers and pedestrians to danger," Ogege said.

"It is unacceptable that the money we should be pumping into the maintenance, repairs and construction of new roads is used to replace road safety infrastructure [that has been] vandalised," he said. "This is frustrating and retrogressive."

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