Scrap Metal Industry
  • Anu Shrstha
  • May 02, 2022

The Scrap Metal Industry Act which was passed by the NSW Parliament on September 14th 2016 intends to restrict criminal conduct in the scrap metal industry in the following three ways.

  • Scrap metal sellers are no longer able to accept cash payments;
  • The sale of stolen scrap metal will be traceable thanks to enhanced record-keeping and registration procedures;
  • Police officers now have the authority to enter, inspect, and seize property.

The Act was intended to combat the anonymous and quick disposal of stolen property such as cars, hot water systems, construction supplies, and vital infrastructure components.

The Act responded to criticism that New South Wales’ scrap metal control structure is weaker than those of other jurisdictions. For example, all secondhand scrap metal traders in Queensland and the Australian Capital Territory were licensed at that time, while operators in South Australia needed to be licensed if they received more than 100 tonnes of scrap metal per year. New scrap metal dealers in South Australia and Tasmania also needed to notify the police of their plan to operate a second-hand scrap metal business. The bill came in response to calls in other jurisdictions for more stringent scrap metal regulations.

Why was the scrap metal industry act implemented?

The implementation became crucial since the lack of regulation in the scrap metal industry had uncontrollably increased the number of thefts and illegal activities. Every week, the same person would drop off stolen cars at scrap metal yards, or someone offloads a dozen hot water systems illegally torn out of new development as scrap. Or a large shipment of stolen copper piping or wiring that was once part of a functioning rail line, or the copper plumbing infrastructure of a local school hall. Since there was no proper record-keeping or tracking system, this was getting out of hand and hence the act became crucial.

This law was enacted to put a stop to criminal activity. The lack of cash transactions forces (and legally requires) scrap metal buyers to keep a full and complete account of payments, which is one of the law’s main arguments. This is because many people – particularly thieves – try to sell stolen automobiles or other valuables. There would be no proof of the transaction if they were paid in cash. With the new rules implemented, it was much more difficult for criminals to do things like this since they will leave a trace, making it simpler for them to be identified. If a car is brought in with its identity removed or destroyed in some way, it cannot be purchased or acquired by a scrap metal buyer.

How did it change the scrap metal industry?

The act made it mandatory for scrap metal businesses to register with the Commissioner of Police and pay a fee every three years. The name of the firm and the address of each scrap metal yard used by the scrap metal dealer in carrying on the business must be included in the registration information. Registration will be automatic, unlike in other jurisdictions such as Tasmania and South Australia, and the police will not be allowed to object to an application for registration; nonetheless, failure to register will be a crime. The Commissioner of Police issued a certificate of registration to registered scrap metal enterprises and kept a publicly available scrap metal business register.

Other organizations, such as the Australian Taxation Office and the Environmental Protection Authority, used this record to contact scrap metal enterprises in order to ensure the payment of taxes and levies, as well as the proper disposal of waste.

How did it prevent sales of stolen cars and auto parts?

The new Scrap Metal Industry Act has had a substantial impact on the existing state of the used lead-acid battery recycling industry, resulting in a variety of changes. Lead-acid battery theft was rather frequent at that moment, with the batteries being sold to the scrap metal sector for cash. With this law implemented, cases of stolen cars and auto parts like lead-acid batteries were significantly reduced. How? Under the new regulation, keeping thorough and precise records of all transactions was required. Each time a transaction occurred, the following points must be followed and recorded:

  • a precise description that includes the weight or quantity of something;
  • Whether it’s a vehicle or any other identification.
  • The seller’s name and address, as well as their identification details;
  • The precise day and time when the products were delivered;
  • a copy of the transaction (cheque or electronic receipt); and
  • The identity of anyone acting on behalf of the scrap metal trader (if at all).

Part 3 of the Act gave police the authority to enter a scrap metal business without a warrant to determine whether there has been a violation of the Act and to conduct a search; to take photographs, films, audio and video recordings; to seize anything the police officer believes on reasonable grounds is connected with an offense against the Act or regulations; to copy records; to require any person to produce documents on the premises, and to require any person to answer any questions relating to the Act or regulations. Without the occupier’s permission or a warrant, this right did not extend to areas of the premises utilized for domestic use. The scrap metal industry act was truly revolutionary as it achieved all of its planned objectives.

Scrap metal sellers were asked to make arrangements for registration with their local police station immediately. Scrap metal sellers were instructed to get familiar with the new identification standards and payment method constraints. This Act also urged people who have been the victims of property theft to report it quickly to the police, who will soon have a better ability to track property crime under the new regime.

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