The Steel and Engineering Industries Federation of Southern Africa (Seifsa) has accused Minister of Trade, Industry and Competition Ebrahim Patel of killing businesses that trade in the steel industry.
Seifsa said Patel was hellbent on banning the export of scrap metal and that his actions were tantamount to contravening South Africa’s international trade agreements and the destruction of the industry.
Speaking to Sunday World, Seifsa president and chairperson Elias Monage said Patel’s ban on the export of scrap metals was nothing but a self-serving act that “benefits few in the minister’s corner”.
“The ban failed to come up with a solution as it served no purpose to curb vandalism of the infrastructure,” said Monage.
“Despite the ban that the minister introduced, vandalism and theft of steel and iron is still taking place, and this clearly shows that even if the scrap is not exported due to the ban, the problem still persist.
“It is not fair for the minister to think that the vandalism and theft of steel was caused by export trades.
“The minister is favouring a few in the industry by this ban at the expense of industrialisation.”
Patel fails to respond to letters
He said Seifsa wrote four letters to Patel from June to November, but he said: “We did not receive even an acknowledgement nor response from minister Patel.”
In a letter sent to Patel on Monday, which we have seen, Monage writes that the current and continued banning of exports of ferrous and non-ferrous scrap metal by Patel and and the department will place South Africa in direct contravention of international agreements which include the World Trade Organisation and the General Agreement on Tariffs and Trade, saying this will foster an environment for severe contraventions of the Competition Act.
He emphasises that it was also critical to point out that export bans have failed dismally in the achievement of their objective to limit damage to infrastructure and the economy.
“The failure of the ban in the pursuit of its objective has failed and it is this very failure that exposes South Africa, the DTIC [Department of Trade, Industry and Competition] and the minister to a host of legal challenges on account of the fact that this measure can no longer be argued to be proportionate on/or in the interest of the state security.”
Seifsa stated that it was concerning that there was a call to DTIC to extend the ban of scrap metal export after its expiry date in December.
“Seifsa’s position has always been that the scrap metal export ban is misguided in the issue that it is attempting to solve for infrastructure damage of scrap metal theft.
“It is an extremely blunt measure with unintended industrial policy consequences. More worryingly it communicates a very poor economic signal by not taking into account a total steel perspective,” he said.
Bongani Lukhele, spokesperson for the DTIC, had not responded to an enquiry for a comment at the time of publishing.