Every industry has a dark underside. Recyclers are no exception but most yards, by and large, have worked hard to promote best practices when it comes to preventing metals theft. And given the patchwork quilt of jurisdiction-specific laws governing scrap processing on state, county and city levels, detterence is no easy feat—and more often than not very costly.
Recyclers work with law enforcement officials and the community in an effort to comply with increasingly burdensome regulations to prevent stolen metal from entering the supply chain. The weak link, in their view, is the end-user segment, where many still fail to take basic precautions when storing copper and other valuable commodities.
"There are still some stakeholders that don't do as much as they could to attempt to secure their valuables," said Gary Bush, director of materials theft prevention at the Washington-based Institute of Scrap Recycling Industries (ISRI).
Bush, who spent 32 years in law enforcement, much of it investigating metal thefts, joined ISRI to bridge the gap between the recycling community and law enforcement. "I've been able to see the problem from both sides of the fence," he said.
While thefts go beyond copper scrap, Bush said the red metal is a favorite with criminals because it's the most high-value metal in the scrap supply chain.
Scott Horne, ISRI's general counsel and vice president of government relations, agreed. "We've been involved in fighting metal theft for more than 30 years. When prices of scrap started taking off in 2005 we started to see an upward trend in theft. We started hearing from a broad base of law enforcement, and we realized that we needed to ensure that members were alerted to this issue, particularly the members that had not experienced (theft) before. We created a materials theft task force and they put together recommended practices guidelines," he said.
The best practices for minimizing purchases of stolen metal include procedures for handling retail scrap purchases, like getting photocopies of identification, such as a driver's license and the seller's license plate number, paying for large purchases by check and asking sellers to sign for cash. ISRI also suggests videotaping or photographing the transaction and posting warning signs. Members are advised to refuse certain materials, like grave markers, manhole covers, guard rails and high-voltage cables, unless the seller provides a letter of authorization covering the material.
Finally, the guidelines encourage recyclers to use common sense and stay away from materials that seem suspicious, like "20-foot lengths of copper downspouts tied to the top of a 1970 VW Beetle."
In a recent survey, the overwhelming majority of ISRI members reported they were following the recommended practices, even though the group can't require its members to comply, Horne said.
Scrap processors are, however, required to comply with the motley mix of laws governing metals processing. Although the legal initiatives all aim to make it harder for thieves to sell their stolen loot, many fail to take into account the unintended impact they have on a recycler's profitability.
"A lot of these laws are overly burdensome because they take no notice of what's involved in the scrap processing industry. Things like tag and hold, where authorities want a processor to tag every piece of material and hold it for 10 days, is virtually impossible for a scrap dealer to accomplish because of the amount of space that it would take and the physical labor involved," Horne said.
Other laws require recyclers to pay peddlers with a check instead of cash. "If you've got 400 to 500 transactions a day, you've got to hire another staff member just to write the checks. The cost of dealing with your bank with that many checks becomes exorbitant," Horne said.
Despite some frustrating regulations, recyclers are working hard to keep stolen metal out of scrapyards, and they believe that more can be done if other stakeholders exercised basic theft-prevention measures.
For example, while electric utilities and phone companies are the most vulnerable copper consumers because of their vast infrastructure, these entities don't always take the most basic steps to protect that infrastructure.
"They are a big stakeholder and many of them are victims of theft just because they use a lot of copper," Bush said. "A lot of their sites are very secluded and many of them started installing alarm systems, video surveillance and working with local law enforcement to get more patrols more frequently," he added.
Bush also encourages stakeholders to use ISRI's free Scrap Theft Alarm service to register metal thefts and warn the network of ISRI members, other law enforcement officers and private citizens that a particular load of metal likely will show up at a yard. "When metal is stolen, the first 48 hours are critical. That's generally when the majority of the material goes to the recycler," he said.
ISRI has spent a six-figure sum to set up ScrapTheftAlarm.com, which has been running for nearly two years and currently has more than 7,600 registered members, including around 1,700 police officers.
"We've got several dozen success stories since the system has been set up. It helps law enforcement and recyclers to work together to solve these cases," Bush said.
Finally, ISRI said that the biggest and most frustrating problem is that prosecutors and theft victims often choose not to put the thieves in jail. "We cooperate with the police and then the victims or the prosecutors won't prosecute, or they let them out on bail or probation and they're back doing it in a heartbeat," Horne lamented. TATYANA SHUMSKY