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Report of the Committee on Subsidiary Legislation on the Ferrous Scrao Metals (Prohibition of Export Regulations, 2013 (L.I. 2201)) 25th March, 2013

1.0    INTRODUCTION
The Ferrous Scrap Metals (Prohibition of Export) Regulations, (L.I.2201) 2013 was laid in Parliament on 22nd February, 2013 by the Hon. Minister for Trade and Industry in accordance with Article 11 (7) of the Constitution.  The Legislative Instrument was subsequently referred to the Committee on Subsidiary Legislation for consideration and to submit report pursuant to Orders 77 (a) 166 of the House.

2.0    DELIBERATIONS
The Committee met with the Hon. Minister for Trade and Industry, Mr. Haruna Iddrisu and Officials of the Ministry to consider the Regulations.  In attendance were Officials of the Drafting Division of the Ministry of Justice and Attorney-General’s Department.
The Committee is grateful to all the Officials for their attendance and input in the deliberations.

3.0    REFERENCE DOCUMENTS
The Committee referred to the following documents during deliberations:
(i)    The 1992 Constitution;
(ii)    The Standing Orders of Parliament
(iii)    The Export and Import Act, 1995 (Act 503); and
(iv)    The Exportation of Non-Ferrous Scrap Mental Regulations, 2010 (L.I.1969).

4.0    BACKGROUND
Ferrous metals contain iron and have properties that prevent corrosion.  They often contain slight quantities of other metals or other elements which produce that required properties.  Globally, ferrous scrap metals are used for engineering purposes and for the manufacture of cutlery, surgical instruments engine blacks and manhole covers.

In Ghana, ferrous scrap metals which include steel and their alloys are mostly obtained from obsolete machinery or equipment, household steel products and packaging materials.  Other sources of the metals include metal waste which contains iron, carbon, chromium, manganese, nickel, molybdenum, wolfram, silicon, vanadium.  Research has shown that the country’s scrap generation is enough to meet the demand of existing industries.  In 2001, about 110,000 tonnes of scrap metals were found to be available in the country.

There are several large scale steel manufacturers in the country such as Tema Steel Western Castles and Western Steel and forgings which utilise ferrous scrap metals as their primary raw materials.  Again, there are several small scale metal fabrications in the country such as those located at Suame and Kokompe in Kumasi and Accra respectively.  These companies provide direct and indirect employment to a significant number of people in the manufacture of metal gates, coal pots and metal chairs among others.

Notwithstanding the enormous contribution of these companies in the economic development of the country, steel companies continue to be deprived of the needed raw materials and this compels them to operate below capacity due to the inadequate supply of the raw materials in the country.  This situation is as a result of the uncontrolled export of large volumes of scrap metals out of the country.

4.1    ADMINISTRATIVE BAN
In 1980, the Ministry of Trade and Industry placed an administrative ban on the exportation of ferrous scrap metals in an attempt to protect the local steel industry.  In 2008, some flexibility was introduced to allow some quantities of ferrous and non-ferrous scrap metals to be exported and every potential exporter was required to submit an application and some specific documentation on the operations of the exporting company for consideration before being granted permission.

Subsequently, the Ministry introduced the Exportation of Non-Ferrous Scrap Metal Regulations, 2010 (L.I.1969) which sought to regulate the exportation of non-ferrous scrap metals.

Consequently, the minister responsible for Trade and Industry in accordance with Sections 12 and 13(a) of the Export and Import Regulations, 2013 to give effect to the administrative ban which has been in existence for over two decades.

The Instrument seeks to prohibit the export of ferrous scrap metals in the country.  It further prescribes the punishment upon conviction.  It also provides for the establishment of a Ferrous Scrap Metal Monitoring Committee.

5.0    OBSERVATIONS
5.1    The Committee observed the fact that significant investment has been made locally to process scrap metals for the production of metal products, especially for the construction industry to ensure that such businesses have sufficient raw materials for production.

5.2    Again, the Committee noted that ferrous scrap metals serve as a major source of raw materials for the local steel mills and foundries and, due to the unavailability of the raw materials; these companies have been compelled to operate below capacity.#

5.3    The Committee was also informed that the uncontrolled export of scrap metals has resulted in the shortage of these raw materials.  In this regard, a ban on the exportation of ferrous scrap metals would ensure that local companies would have the required quantities of the scrap metals for their operations.  This would also enhance the profitability of the companies and increase their capacity to create employment and also reduce the foreign exchange expended on the importation of billets as raw materials for steel mills in the country.

5.4    The Committee was informed that the Ministry of Trade and Industry has carried out extensive consultation with Scrap Metal Dealers, the Steel Companies and other Stakeholders in the Industry and have instituted measures to ensure that metal dealers are treated fairly.  The prices of metals have been agreed amongst the stakeholders and the Ministry is in the process of harmonizing the prices of the materials and assured that the prices would be internationally competitive.

5.5    The Committee further observed that the Regulations provide for the establishment of a Scrap Metal Monitoring committee to oversee the implementation of the law.  The committee consists of representatives from the Ministry of Trade and Industry, the Ghana Revenue Authority, the Ghana Ports and Harbours Authority and the Standards Authority.  Other members include representative from the Ghana Association of Industries, the Steel Manufacturers Association and the Scrap Metal Dealers Association.  The Monitoring committee would also be required to report to the Minister for Trade and Industry on all matters relating to the prohibition on the exportation of ferrous scrap metal.

6.0    CONCLUSION
The Committee has thoroughly examined the Regulations and is of the view that the Regulations are consistent with the general objects of the Constitution and the Export and Import Act, 1995 (Act 503).  The committee accordingly recommends that the Ferrous Scrap Metals (Prohibition of Export) Regulations, 2013 (L.I. 2201) come into force at the expiration of twenty-one sitting days.

Respectfully submitted:
HON. OSEI BONSU AMOAH
Chairman, Committee on Subsidiary Legislation

JONANA S. ADJEI (MRS)
Clerk, Committee on Subsidiary Legislation