There has been a lot in the press lately about scrap metal thefts and what the police and other agencies are doing to tackle it. The industry is aware of lobbying going on behind the scenes to stop yards paying for material with cash in a bid to stop stolen metal changing hands. The British Metals Recycling Association has been interested in the issue, and sent out a survey that asked whether scrap recyclers would consider taking part in a trial period of not conducting cash transactions.
But I do not think more legislation to prohibit cash transactions is needed. We already have Duty of Care Regulations and the Scrap Metal Dealers Act, both all-encompassing pieces of regulation. Already the Environment Agency (EA) and the police find it difficult to enforce these regulations, so additional legislation is not the answer.
I think it should be about tightening up existing law and filling in the gaps first. Because of these thieves, our industry has to spend millions of pounds protecting its own sites. As a company, we have suffered from a lot of thefts, losing £40,000 this year because our material has been stolen, while having to pay £30,000 in security enhancements.
The police are much occupied with cash transactions. But when they go in to check out the transactions that have taken place on-site, they are not always aware of the other legislation that metal recyclers have to adhere to. We need a lot more interdepartmental working for current regulations and legislation to be truly effective.
It is frustrating for yards. Most keep a record of all transactions that take place. We have CCTV which films all transactions and each delivery of materials, so we can get pictures for the police if they need them.
If the entire industry said it would go no-cash, it would be a lovely scenario and we would embrace it. But I think it would be another issue to enforce it. Only large operators would end up following the legislation - they tend to be targeted by the police and the EA because of their big presence in the industry. It would be to their detriment because they would not be on a level playing field to everyone else.
Any cash that changes hands at smaller yards would most probably go unnoticed because they are not the focus of the EA and the police. There will always be somebody willing to take cash for material and someone willing to pay it.
But using cash is an expensive process for metal recyclers because banks charge a lot to take cash out. In the past few years, some grades of metal have doubled in value, meaning there can be huge amounts of cash on-site, so we need more security. Ten years ago, we would happily have had a desk between the buyer and seller, but now we have an office with the equivalent of bullet-proof glass for security reasons.
This is compounded by the fact that yards are not always located near a police presence but more likely down a back lane, which makes them more prone to be a target for hold-ups.
But no alternative payment method has been mentioned. Perhaps wiring the money across would make sense. In some European countries, they do not trade with cash but instead make a cheque payable to cash. But again, if we used an alternative payment method, how would this be policed?
There is powerful lobbying from the police, electricity and rail companies, and even large scrap merchants, who all think that halting cash payments will stop the problem. If this happens all it will do is push this trade further underground. The EA and the police have got to fill in the loopholes of existing legislation and stop unlicensed sites taking stolen metal before they think about extra legislation.
Are you a scrap merchant with an issue to raise? Contact Tiffany Holland on 020 7728 4534 or email email@example.com. All contributors to MRW’s scrap panel will be anonymous.