Non-Ferrous Metal Theft Project (NFTCC)

July 2007

Non-Ferrous Metal Theft Reduction

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1. Introduction

During 2006 the copper price reached its highest price in history as a result of the huge international demand for the metal. This demand filtered through to the South African scrap market and had a serious impact on theft statistics. Criminals focussed their attention on any copper containing equipment and losses as a result of thefts increased drastically. This phenomenon was not only limited to South Africa, but was also experienced internationally. I quote from a BBC news clip, broadcasted on 13 November 2006: “Italian rail travellers have faced unexpected delays in recent weeks because of an increase in the theft of copper wire along train tracks. Italy's railway operator says that some 250,000 commuters have been affected”. The London based Guardian published the following article on 25 January 2006: “Twenty sculptures go missing around London. Increasing demand for copper behind thefts”. There are many other similar examples. However, there is one important difference between the picture in South Africa compared to the rest of the world. Where police agencies and service providers across the world are urgently researching measures to combat thefts, we have a structure in place that has been operating effectively for more than a decade. Through the NFTCC industry and several government departments have joined forces to address this problem that has been experienced for more than two decades. In an effort to jointly address and combat the theft of non-ferrous metals the Non-Ferrous Theft Combating Committee (NFTCC) was formed in 1993. The structure consists of a national committee, composed of all of the major role-players, and various provincial or regional committees. The objective is to plan, initiate and coordinate national, provincial and regional strategies, joint ventures and operational activities. These activities are intended to build synergy between the large variety of services and products provided by the different role players, and address non-ferrous metal thefts in each organisation. The work of the NFTCC is therefore required to benefit all its members and build cooperative spirit in dealing with this crime type. The Strategic intent of the NFTCC as adopted in 2005 and reconfirmed at the annual national conference in 2006 is as follows: “The NFTCC is an integrated body of key role-players that provides strategic guidance and direction for the process of prevention and eradication of theft of non-ferrous metal so that quality of supply of strategic services can be ensured to the benefit of all the people in South Africa”

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2. Background

The theft of non-ferrous metals in South Africa has become a serious problem during recent years and although the number of incidents and the related costs decreased between 2002 and 2005, the occurrence of this crime type increased sharply during 2006. This can be contributed to the dramatic increase in the copper and aluminium prices due to international demand. As an example of losses incurred by the business sector, the following table depicts the combined figures for Eskom, Telkom and Spoornet for the period 1998 to 2006 inclusive. The information, for these sectors, is merely estimates as the detailed database has only been operational since January 2007.

Year Number of Incidents Replacement Cost 1998 4 429 R204.7 million 1999 6 724 R201.9 million 2000 15 208 R192.3 million 2001 20 816 R268.6 million 2002 15 313 R220.2 million 2003 7 956 R165.5 million 2004 6 914 R114,0 million 2005 6414 R101,1 million 2006 11 360 >R150,0 million

The theft of non-ferrous materials negatively impact victims in many ways - not only financially through the need to replace the stolen material, but also through other consequential and associated losses. These include the following: Loss of revenue due to the interruption of essential services; Replacement and or repairing of infrastructure, including additional man hours

spent; Transport costs in cases where busses have to ferry commuters and / or goods

when trains are cancelled or delayed; Security costs to safeguard personnel and infrastructure, especially during night

time; Negative publicity, which leads to the loss or existing potential clients and

business and dissatisfied clients or customers; and The incalculable cost of human lives.

The theft of non-ferrous metals also impacts negatively on the private and public business sectors in situations where there is a consequential loss of availability of working telephone lines, electricity and trains. The loss of these services impacts negatively on productivity, planning and profit margins, although the exact financial losses and full impact on organizations and individuals are not known.

3. Context

Since its inception, the project has been guided by the national NFTCC Committee, which acts as the governance structure. The strategic framework and implementation plan, requiring (and receiving) the commitment of both the public and private sectors are confirmed on an annual basis at the national conference.

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The approach focuses on removing the market into which stolen material is sold and is supported by a number of interventions aimed at reducing vulnerabilities in both the public and private sectors. Although it is recognised that the joint initiatives have achieved some successes, the biggest challenge remains the effective control over the illegal market and thus the deliverables for 2007 aims to achieve a marked decrease in the number of reported incidents. The market for stolen non-ferrous metals remains, primarily, the local recycling industry. Approximately 75% of all scrap metal generated in South Africa is handled by the formal sector and the remainder by the large number of informal businesses. It is estimated that the total turn over of the recycling industry is in excess of R15 billion per annum. The central challenge is to build on the successes achieved to date and drive the rate of cable theft down to acceptable levels. In the absence of greater urgency and concerted action, there is a real danger that the current levels of cable theft will become further institutionalized and accepted as the norm within our society, government and business. The pervasive nature of this crime and the degree to which this has become part of the accepted culture of doing business brings with it many dangers, not least of which is the lowering of standards of accepted business practice and of levels of morality and values.

4. Non-Ferrous Theft Combating Committee

In an attempt to jointly address the problem in a coordinated manner, the industries most affected by the theft of non-ferrous metals formed the Non-Ferrous Theft Combating Committee (NFTCC) in 1993. All the major role-players are represented on the national NFTCC as well as the various regional sub-committees. The companies and role-players who are members of the NFTCC are representative of all sectors of commerce, industry and service providers in South Africa, including the following: Eskom; Telkom; Transnet (Including Spoornet and Metrorail); AMEU (Association of Municipal Electricity Undertakings); Metal Recyclers Association of SA (MRA); RASA (Recyclers Association of South Africa); Metro / Municipality Electricity Departments; City Power (Johannesburg); Copalcor; Zimalco Aluminium; Mining Groups; Business Against Crime South Africa; Business Against Crime Western Cape; and SAPS.

The national committee chairmanship is currently held by Leon van den Berg from Eskom. Business Against Crime South Africa acts as the national project coordinator for the initiative and provides all of the administrative, secretarial and support functions. All provincial forums are represented at the national forum. The importance of the Business Against Crime South Africa involvement cannot be understated as the initiative spans across various individual companies where the

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information shared is of competitive nature. It has been confirmed over time that only an independent party could have access to all data for purposes of analysis. Equally the coordination can only be conducted by an independent party as it at times requires the changing of business processes, training, etc within individual companies

5. Structure of the NFTCC

The structure of the NFTCC is as follows: National Forum Provincial Forum Regional Forum Gauteng East Rand

North Rand Tshwane West Rand which includes Soweto Johannesburg and Vaal Rand

Limpopo Mpumalanga Free State East Free State

South Free State North Free State

North West Mooi River Marico Molopo

Northern Cape *De Aar *Upington *Springbok *Kimberly

Western Cape George KwaZulu Natal Durban South

Durban North Richardsbay Vryheid New Castle Pietermaritzburg Port Shepstone

Eastern Cape Port Elizabeth East London Cradock Grahamstown Oudtshoorn

* Forums to be established

6. Combined Strategy to Combat the Theft of Non-Ferrous Metals

For the past three years Business Against Crime South Africa has acted as the convener of a national conference held between national, regional and provincial forum members. The aim of these conferences has been to: Reassess on an annual basis the strategic intent and objectives; Assess the success achieved during the past year; Confirm the strategy for the following year; and

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Share and transfer knowledge on best practices implemented by individual teams.

These two-day workshops have proven to be highly successful and has allowed for the creation of a set action plan and agenda according to which all forums, regardless of their level operate. The current initiatives that are being undertaken are:

6.1 The Establishment of an Effective Management System

As theft of non-ferrous metals does not carry a separate crime code the extrapolation of incident information for analysis purposes has been a long standing issue. In addition no specialist dedicated function exists within the SAPS exist for the exclusive investigation of cable theft. This has led to the establishment of extensive investigative components within all of the role player organisations. In an attempt to rectify this, a freestanding database has been made available within the SAPS National Transito Theft Unit (component of Organised Crime) for the capture of data received from the individual industries. The service of a data analyst has been made available and for the past 12 months the police has been able to analyse some of the information captured on the CAS system. This is however based on a limited number of cable classifications and would not suffice if the full spectrum of cable theft is to be obtained. Exploratory discussions with the police is currently ongoing for the establishment of a separate crime classification for the theft of non-ferrous metal theft In an attempt to rectify the ability to analyse data, it was agreed at the 2006 national conference that all individual companies would forward their national crime information database on a monthly basis to Business Against Crime South Africa. The information is forwarded in an agreed format. As from January 2007 most information has been received.

The issue of data analysis is further replicated at a provincial and regional level and is a compulsory agenda item. The information shared in these forums are utilised to identify hot spot areas for the deployment of security personnel and police, the planning of special operations, the identification of suspects and businesses not complying with the provisions of the Second-hand Goods Act. Where Business Against Crime South Africa offices have implemented the initiative the analysis of data at a provincial level is conducted. This information is at a more detailed level and is fed into Business Against Crime South Africa for further dissemination and then channelled to the applicable parties for action. As legitimate business is involved the benefits that has been achieved through this approach has proved to be highly successful and has been the direct cause for the arrest of thieves and the closing down of businesses selling stolen material. In addition all information relating to the export of cable is closely monitored with the objective of identifying illegal operators and practices. The collection of data has led to the creation of a suspect database as well as a comprehensive database containing the details of all registered scrap dealers and recyclers. This is an ongoing task as new role players enter the market regularly. Although a SMS system has been established this process has not been completed as various operational issues are still being reviewed.

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6.2 Effective Cooperation and Commitment

This initiative includes the detail of the expectation on the provincial and regional forums. Most of these are coordinated, monitored and implemented by the Business Against Crime Provincial Offices and include: The keeping of agendas and minutes in the prescribed format and the

forwarding thereof to the office of Business Against Crime South Africa. Cross provincial interventions that rely on strong operational cooperation

between the provincial chairpersons and the national forum. The inclusion of Metro / Municipalities representatives on all area forums. The inclusion of prosecution services on all regional forums. Obtaining and maintaining cooperation at SALGA and SARPA level and

where applicable rural safety structures. Coordination and planning of disruption operations and inspections in terms

of the Second-hand Goods Act, (Act No. 23 of 1955). Strong cooperation is required from the parastatals to assist with manpower during these operations and the investigation that follows.

The coordination of training session with the police and prosecutors as well as information sessions to magistrates to highlight the seriousness of these offences.

The creation of strong links within the SAPS.

6.3 Standard Interpretation and Application of Relevant Legislation

All sectors of the non-ferrous industry is involved in the new Second-hand Goods Act. It is anticipated that the new Act will be in operation during 2007. Issues of self regulation has been provided for the scrap metal and recyclers industry

6.4 Communications and Marketing

The Tshwane forum publish a national newsletter and the information is collated by Business Against Crime South Africa and its provinces. These documents can be viewed on the Business Against Crime South Africa website – www.bac.org.za

Detailed provincial communications plans aim to educate the public in the

effect and detection of this crime type and include displays at community exhibitions such as the Pretoria Show and the Bethal Potato festival. Special competitions, the hosting of cable theft events and the distribution of posters to dealers to guide them in terms of the identification of specific materials.

Training sessions is held for police and prosecutors. These are presented by

the parastatals and include the identification of materials and the impact of the offences on the economy.

7. Conclusions and Recommendations

This Project addresses one of the critical issues on which the sustainability of the South African economy depends. No business can flourish without the availability of a reliable telephone, electrical and public transport system. The successful hosting of the Soccer World Cup is further dependant on the dramatic reduction in the occurrence of these thefts. Lessons learned from the successes and failures of this initiative should be highlighted and applied elsewhere.