Recycling Trends
Slippery Regulations Atop Steep Markets
Matthew R. Walsh
More often than not, recyclers are the last to know about changing laws and regulations. For some, the news comes too late without an opportunity to protect against the onslaught of legal threats, fines, or even jail time. Legislators seem to have a zero-tolerance attitude towards scrap theft, and for good reason, but it may appear to some that their crosshairs are pointed away from the wrong-doers and instead directly at recyclers.
Increasing Restrictions
With the economy falling further into the abyss, ordinary people who used to visit local scrap yards for a supplemental income are rebirthing themselves into entrepreneurs by opening recycling facilities of their own. Unfortunately, with new facilities being born every day, the supply of scrap metal is surpassing the demand and driving market prices into the ground.
Recyclers who have been family-owned businesses for fifty-some-odd years are being forced to find a way to adapt to the time by involving themselves in markets which are unfamiliar to them. Some businesses have begun selling raw materials from construction and demolition sites, others are doing scrap metal pickups in vehicles and some are even turning to the internet to make a profit by buying catalytic converters and precious metals online through auction sites and classified ads. One thing is for certain, the game has definitely changed.
Scrap Metal Theft
Amidst the plethora of recycling centers, an almost endless field of industrial machinery moving millions of metric tons per month of metal, darkness looms. The darkness, of course, is increasing restrictions on recyclers. As many as 1/3rd of all new recycling centers will involuntarily close within a year of opening due to one simple fact: Metal recycling is at an all-time high. It has become a primary income for some, and a required supplemental income for others. With our nation’s economy slumping, desperation forces thieves to turn to scrap metal theft, pushing it to a record high. Northern Cincinnati, Ohio alone saw a 162% increase between 2006 and 2007 in copper theft; these numbers have continued to grow throughout the years and are continuing now into 2012.
Today, copper prices are between $3.00 and $3.70 per pound, compared to $0.60 per pound in 2002. Because of this, there were a total of 25,083 claims identified for the theft of copper, bronze, brass and aluminum submitted between January 1st, 2009 and December 31st, 2001. From all twenty-five thousand claims, 96.1% of those involved copper, Sixty-six percent of those claims involved personal property, and 31% involved commercial locations.
It is for this reason that law enforcement officials are stepping up to combat this serious issue. Home invasions threaten the lives and wellbeing of families and their children, and can seriously impact the financial standing of those affected. The U.S. Department of Energy estimates that scrap metal theft costs businesses around $1 billion per year. Unfortunately, the penalties for scrap metal thieves are not increasing, the penalties for non-compliance against recyclers are.
Legislators, it seems, have one simple thought process on how to combat this issue: “If the thieves don’t have anywhere to take the metal, they won’t steal it”. To most, that statement would seem to make logical sense; however, the number of recycling centers is increasing daily. Instead of limiting the number of facilities that can open, the states choose to allow the industry to grow. As scrap metal facilities increase in numbers, the prices of scrap metal will fall. This in turn, will likely cause theft to rise because the value of the metal will be less, increasing the need for more to be stolen to make the same amount of money.
Forcing Compliance
Legislators simply don’t understand how to deal with the growing problem. They are imposing nearly impossible to-follow regulations on recyclers to force compliance. In some states, such as Florida and Georgia, offenses can now mean the owner or operator of a facility be prosecuted with Felony charges for non-compliance. Advanced computer systems exist to keep recyclers in line, but legislators continue changing the laws in a futile attempt to seemingly “trip-up” recyclers.
Most states already require capturing pictures of materials and a picture of the seller (aka “customer”), as well as their driver’s license, fingerprint, signature and vehicle information. However, some states have gone above and beyond what would normally be expected. Georgia law for instance now requires that a recycler inspect a customer’s vehicle for passengers and obtain drivers license and identification information from everyone whether they are involved in a scrap metal transaction or just along for the ride. Florida law requires all daily transactions be electronically uploaded to an international audit companies’ system for review and cataloging. The federal government requires all salvage vehicles to be reported to NMVTIS. Several states have their own local reporting systems in addition to the others mentioned earlier, including Texas DPS. New York requires a handwritten form for every motor vehicle recycled in the state to be mailed to the DMV within three days.
With regulations like this, it is no wonder why would-be entrepreneurs get-in and get-out of the business within a year. Some of them unscathed, but some of them with permanent criminal records or stuck in perpetual financial turmoil over the potential of fines in the hundreds of thousands of dollars possible within only a year of operation.
Feeling the Wrath
The problem, as simple as it is, is also a complex one. How do you stop criminals without punishing legitimate business owners who are in some cases just as responsible as the thieves they are enabling? One national, unified reporting system for all states that connects law enforcement everywhere would be a good start, but until legislators stop trying to deal with a national problem on a localized level, recyclers may continue to feel the wrath for some years to come.
Matthew R. Walsh is the president and lead software developer for AEON Blue Software, the developers of the Nexus recycling software. He can be reached at (813) 333-1112 or visit www.NexusRecycle.com.
Sidebar
Compliance Laws
Recyclers can use sites such as ISRI.org and ScrapLaws.com to find out what laws they must follow in order to stay compliant.