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Ghana proposes criminalizing scrap metal export

28 February, 2013Industrial & Commercial Workers' Union (ICU) fully supports a government proposal to make the export of scrap metal a criminal offense in order to protect local industries.

Ghana’s new Minister of Trade and Industry, Haruna Iddrisu, has proposed a bill to make the export of scrap metal a criminal offense. The initiative is an effort to clamp down on ferrous scrap exporters that ignore the administrative ban that is in place.

Despite the ban, scrap metal continues to leave Ghana, whilst the local steel sector is under strain operating at only 30 per cent capacity. ICU reports that a large steel company, Wahome has recently had to shut down leading to 700 job losses.

Ghana has no iron ore.  As a result, metal scraps serve as raw material to the steel industry, which would otherwise need to be imported.

“The exportation of metal scraps from Ghana leads to scarcity of raw materials hence a huge threat for the survival of the steel industry in Ghana,” says General Secretary of ICU, Solomon Kotei. “Countries like China, Thailand, Malaysia among others, offer attractive prices for metal scraps which the local industries cannot afford to pay. As a result, casualization, redundancy is what has befallen workers in the steel industry.”

Exporters of scrap metal are appealing to government to levy the export of scrap metal rather than criminalize it. Exporters advance funds to scrap metal suppliers in order to secure supply whilst local steel industries need time to effect payment for the supplies, putting local industries at a disadvantage.

The proposed bill will not be enough, even if government makes every effort to enforce the ban as the value chain to scrap metal is quite unique. Additional support to local steel industries will have to be considered, especially access to finance, so that suppliers can be promptly paid. Ensuring good working conditions, including health and safety and social protection in the supply chain is another area that will need to be examined. ICU is aware of these issues and plans to discuss these with the Minister.  

"The exportation of scrap metal from Ghana will virtually collapse the steel industries if no drastic national policy is put in place to ban it,” says Kotei  “It is for this reason that the ICU-Ghana associates itself strongly with the statement made by the Minister of Trade and Industry. We are therefore collaborating with the honourable minister on the ban of exportation of scrap metal.”