Government Calls for Comments On Proposed Amendments to the Second Hand Goods Act to Monitor Scrap Metal Trade

In the dynamic landscape of the scrap metal industry, staying informed about regulatory changes is essential for all stakeholders. We bring to your attention the recent proposed amendments to the Second-Hand Goods Act (SHGA) by the South African government, particularly impacting the iron and steel sector. These changes are intended to give effect to Phase 2 of the Scrap metal Policy to Limit Damage to Infrastructure and the Economy. These proposed amendments include:

1. Enforcement of Registration Regime: Currently, the registration requirement under the Second-Hand Goods Act (SHGA) applies only to buyers of scrap metal, neglecting sellers. However, moving forward, the government plans to enforce registration for scrap metal sellers as well, aligning with the SHGA’s envisioned registration regime. Notably, an exemption is anticipated for waste pickers, except for those involved in the sale of copper scrap metal.

2. Enhanced Registration Requirements: A significant shift in the proposed amendments involves enhanced registration criteria. Going forward, both buyers and sellers will only be granted registration if they have an adequate Tax Compliance Status.

3. Enhanced Reporting Requirements: The government is considering the implementation of an advanced input-output reporting system. This system will not only monitor compliance under the SHGA but also track exports of scrap metal and semi-finished products. Scrap dealers will be required to submit detailed monthly electronic reports to the International Trade Administration Commission of South Africa (ITAC). These reports will include vital information such as the date of purchase/sale, type and grade of metal, tonnage, total cost/revenue, and registration details of the buyer/seller.

4. Inclusion of Semi-Finished Metals: A noteworthy development in the proposed amendments is the inclusion of semi-finished metals in the registration regime. While buyers and sellers of these materials were previously exempt, the new amendments will require their active participation in the regulatory process.

5. Requirement for Registered Buyers: In a move to further control the trade in copper, the government is contemplating a requirement for registered buyers to exclusively purchase copper scrap and semi-finished copper products from registered sellers. This potential measure aims to restrict sales of such items to registered entities only.

As we navigate these regulatory changes, it is imperative for stakeholders to stay informed and actively participate in the discourse. All interested persons and organisations are invited to submit written comments on the draft regulations by no later than 8 December 2023 to Jacob.Setouto@csp.gov.za.

For a more detailed understanding and to contribute to the ongoing discussion, we encourage you to review the draft regulations and related information below