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Proposed Amendments to Price Preference System on Scrap Metal Drawn Up

September 2, 2020

Department of Trade, Industry and Competition

Proposed amendments to the price preference system (PPS) regulating the exportation of ferrous and non-ferrous waste and scrap metal have been drawn up.

The trade, industry and competition department called for comment on the draft amendments in Government Gazette 43670.

At the beginning of July 2020, the trade, industry and competition minister, Ebrahim Patel, in Gazette 43501, called on the International Trade Administration Commission (ITAC) to urgently investigate whether the Policy Directive on scrap metal is continuing to meet its objectives.

The Policy Directive limiting the export of ferrous and non-ferrous scrap metal came into force in 2013.

It set out the policy in terms of which the ITAC was to exercise its powers under the ITA Act in administering the exportation of ferrous and non-ferrous waste and scrap metal.

ITAC subsequently issued export control guidelines.

The guidelines put in place a price preference system to assist domestic users, processors and recyclers to purchase scrap metal at a preference price for local consumption before the metal is exported.

The guidelines also contained substantiated proposals on what the price percentage lower than the Metal Bulletin price as determined in Rotterdam should be.

Local foundries, mills and smelters of scrap metal are given first option to buy the scrap at the preferred price for which an export permit has been applied for.

If no interest is shown in the metal by local operators within 30 days, then the exporter is able to continue with the export plans.

The price preference system is managed by the ITAC.

The Policy Directive was extended for a further nine months from 31 March 2020 until 31 December 2020.

The extension was implemented to enable treasury and the trade, industry and competition department to finalise the implementation of an export tax on scrap metal.

The ITAC was also instructed to determine whether there is a “shortage of scrap metal for the domestic processing industry, whether the discount, delivery and payment terms should be amended and whether another formula should be applied to achieve the objectives”.

The proposed amendments focus on, inter alia, subject merchandise, price preference calculation, administration, agreement and the application.

Comment is invited within two weeks of the date of publication.

Meanwhile, the department has launched the Export Barriers Monitoring Mechanism (EBMM) designed to put South Africa in a strong position to provide the type of consistent, ongoing support needed to continuously improve the country’s export environment.

In a statement, the department’s Deputy Director-General of Export Development, Promotion and Outward Investments, Lerato Mataboge, said the fundamental aim of EBMM is to “make the government’s support to exporters facing barriers more effective, more flexible, and more
accessible”.

According to Mataboge, the EBMM is open to any firm that encounters an export barrier of any kind, whether locally or in any foreign market.

In another statement, the deputy minister of trade, industry and competition, Nomalungelo Gina, speaking at a virtual seminar hosted jointly by the Broad-Based Black Economic Empowerment (B-BBEE) and Commission for Employment Equity (CEE), called for an “implementable and measurable action plan to accelerate the transformation in the workplace and economic empowerment of women”.

“This session must never be allowed to become a grieving platform by women in business as entrepreneurs and those who are professionals in executive positions. But it must respond to those experiences by way of a workable action plan that will be measurable with time frames. In
a word, I am saying this webinar must be like a plenary commission that develops resolutions and action plan for women in these male-dominated environments,” urged Gina.

The deputy minister, during the seminar, also highlighted government’s concern that many Black-owned companies will be forced to close shop as a result of the devastating impact of the Coronavirus pandemic.

She urged “women corporate leaders to insist on compliance in the preferential procurement processes in government, municipalities, state-owned enterprises and the private sector that women-owned companies, in the post-Covid environment, must occupy a prominent position for preferences in awarding tenders”.