Scrap Metal Industry Reform Update
As previously reported, Braven Group Services/PACT Site Security is part of an Expert Reference Group initiated by the National Motor Vehicle Theft Reduction Council. The ERG submitted a Regulatory Impact Statement to the Police Minister in April 2020 to implement regulation of the WA scrap metal industry. More information HERE
As from December 1st 2020, any businesses wishing to trade in scrap copper and copper alloy (including bronze and brass) will be required to be licenced under the Pawnbroker and Second-hand Dealer Act 1994, and the Pawnbroker and Second-hand Dealer Regulations 1996.
Licensed dealers will need to comply with the requirement to record and report all transactions of copper and copper alloy, whilst sellers are required to produce 100 points of identification on all transactions.
The penalties for non-compliance range from fines of $2,000-$5,000 and 12 months' imprisonment for an individual, or a body corporate fines of up to $20,000
The payment of cash for scrap metals has been one of the main drivers of building and construction industry metals theft. Although there is no requirement to stop payment of cash under the new regulations, scrap metal dealers are required to keep all copper for 14 days without altering the form of the goods. With variations in spot prices of scrap copper, dealers will run the risk of holding large amounts of copper in a falling market, and we would expect this to impact the price offered.
With scrap copper currently fetching up to $8.50 a kilo and the timing of the new regulations, major scrap dealers reported their highest ever trading week in the last week of November. Reported copper cable thefts did increase in November ahead of the changes and businesses carrying deposits of copper appeared keen to offload their holdings before the regulation change.
On a good note, the new regulations have already seen results. A licenced dealer contacted Police after he became suspicious of a male's regular deposits of copper cable (approx. 500KG) over a period of time. Police attended to speak with the dealer and view transaction records when the would-be thief happened to arrive with another 150KG of copper cable. Multiple charges against an adult male resulted.
Of interest is Section 83(2) of the Act, which states:
Where a person offers to pawn, sell, exchange or deliver goods to a pawnbroker or second-hand dealer and the pawnbroker or the dealer has reasonable cause to suspect that any offence has seen committed by the person in relation to the goods, the pawnbroker or dealer may arrest the person
I don't think we will see scrap metal dealers arresting offenders on mass any time soon, but always good to know!
These are the first steps in the regulation of the WA Scrap Metal Industry, and it is possibly a stop-gap measure to reduce the ongoing theft of copper. Further legislative reform, recommended by the ERG, suggested that the introduction of stand-alone legislation would deliver a larger benefit at a lower total cost for both government and industry. This option mirrors the approach introduced by New South Wales in 2017, and includes no cash or cheque payments for scrap.
A stand-alone Scrap Metal Dealers Act will take 18-24 months to enact and is unlikely to be considered until after the state election in March.
Although these changes will assist the building and construction industry with the ongoing theft of copper and copper alloy, it does fall short in dealing with other scrap metals, specifically aluminium.
Back in 2003 residential builders, over six months, reported $180,000.00 of aluminium window frames stolen from construction sites. The theft was so widespread that bricklayers where taking window frames home with them so they could continue to work the following day! Will we see an increase in the theft of aluminium window frames?
While numerous scrap metal dealers will conduct their businesses lawfully, there will always exist a number who operate in an entirely non-compliant manner. We are hoping that the WA Police allocate sufficient resources to enforce the new licencing and regulation regime. PACT investigators will continue to work closely with WA Police to identify those that choose not to comply.
From a building and construction industry perspective, we must ensure all builders, civil contractors and land developers report every incident of scrap metal theft. It will allow PACT Investigators and WA Police to identify trends and work toward reducing the impact of crime.
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