Highlights of the Scrap Metal Bill, 2014.
Ochiel J Dudley – Legal Researcher, Kenya Law
Date of Publication: 3rd March, 2014
The Bill is set out in some five parts: Part One which is preliminary; Part Two on the Establishment and management of the Council; Part Three which is devoted to administration; Part Four whose scope is enforcement; and finally Part Five on the miscellaneous provisions.
From the long title, the major purpose of the Bill is to make provision for the regulation of dealings in scrap metal as well as provide for the creation of a Scrap Metal Council. The Memorandum of Objects and Reasons discloses that the Bill was submitted by the Cabinet Secretary for Industrialisation and Enterprise Development.
Unlicensed dealings in scrap Metal
- No person, unless licensed, shall deal in scrap metal
- First offenders under this section are liable to a fine not exceeding ten million shillings or a jail term not exceeding three years respectively.
- Subsequent offenders are liable to a fine not exceeding twenty million shillings or imprisonment for five years.
- Under the previous Act, dealers who contravened the terms or conditions of the license would be liable to a fine of five million shillings or imprisonment for a term not exceeding five years.
- However, there was no specific penalty for unlicensed dealings in scrap metal. Instead, section 27 of the Act imposed a general penalty of a fine not exceeding one thousand shillings or imprisonment for a term not exceeding six months.
Validity of Licenses
- Licenses under the Bill are for a term of one year and renewable on application.
Scrap Metal inspectors
- The Bill proposes the appointment of Scrap Metal inspectors, from persons with qualifications in metallurgy, to enforce the provisions of the Act.
- The inspectors who are bestowed with full police powers, can summon and examine witness under oath, as well as prosecute offences under the Act.
- In contrary, the current Act assigns enforcement obligations to police officers of specified ranks.
- For example, under section 15(1) no dealer can part with possession, disfigure or in any way change the form or shape of, any scrap metal within fifteen days, or in the case of ferrous scrap metal seven days, of acquiring the metal without the written permission of a police officer not below the rank of Assistant Superintendent.
- Similarly, under section 17(1) of the current Act, a Police Officers not below the rank of sub-inspector may enter and search any premises where he believes an offence has been or is about to be committed.
Powers of Metal inspectors
- Metal inspectors may enter with or without a search warrant into premises where suspected stolen goods or vandalised metal may be found. In addition to their entry and search powers, metal inspectors have the authority to terminate transactions in vandalised or stolen scrap metal, at any point.
- Similarly, inspectors can seize, detain or remove any scrap metal or scrap metal processing tools, found in any place, for detention.
- Moreover, inspectors may question and take statements from people the inspector reasonably believes may supply necessary information as to the dealing in vandalized or stolen scrap metal.
- Inspectors, however, do not have the authority to alienate or destroy scrap metal without an order from a court of competent jurisdiction. Perhaps this provision flows from the Constitutional protection of the right to property as well as the right to fair administrative action. Article 40(2) forbids Parliament to enact a law that permits any person to arbitrarily deprive another of property, including scrap metal.
- Besides, one is not obliged to give self incriminatory answers or information. This is consistent with the fair trial right to refuse to give self incriminating evidence under Article 50(2)(l) of the Constitution.
- Further, an inspector may with or without a warrant, arrest and detain suspected offenders, for a maximum of 24 hours at the nearest Police Station.
- There is a considerable widening of the powers to arrest without a warrant under the proposed law.
- Previously, a police officer could only arrest without a warrant if the officer suspected an offence punishable by imprisonment under the Act. By analogy, a result, a police officer therefore could not arrest without a warrant for offences punishable by fines alone for instance failing to display a notice board bearing the dealer’s full name and the legend “Scrap Metal Dealer” (Section 10).
Scrap Metal Council
The Bill proposes a Scrap Metal Council hosted by the Ministry of Industrialization as the secretariat. The main purposes of the Council are to advise the Cabinet Secretary on-
- all matters affecting the scrap metal industry;
- complaints from the public and within the industry;
- methods of disposing off excess material that local millers cannot handle;
- appropriate measures for protecting public interest against vandalism and theft of utility infrastructure;
- appropriate application and renewal license fees;
The Council is expressly mandated to work with scrap metal inspectors to bring order to the scrap metal industry.
Composition of the Scrap Metal Council
The Council consists of the following stakeholders-
(a) a chairperson, knowledgeable in metallurgy with at least ten years experience in the public sector, appointed by the Cabinet Secretary;
(b)the Principal Secretary of the Ministry for the time being responsible for matters relating to transport or representative;
(c) the Commissioner General of the Kenya Revenue Authority or a representative;
(d) the Inspector-General of Police or a representative;
(e) the following members appointed by the Cabinet Secretary –
(i) two persons nominated by the Scrap Metal Dealers Association, representing dealers in ferrous materials and dealers in non ferrous materials respectively;
(ii) one person nominated by the metal cottage industry;
(iii) two persons nominated by the Kenya Association of Manufacturers, representing millers in ferrous materials and millers in non ferrous materials respectively; and
(iv) a representative of utility companies to be appointed on a rotational basis.
- To begin with, it is noteworthy, that there is no existing definition of license or licensing officer under the current Act.
- Previously, the Commissioner of Police or his appointee was the licensing officer for Nairobi Area while Provincial Police Commissioners were the licensing officers in chafrge of the former provinces, now abolished. However in 2007, Parliament deleted the definition of “licensing officer” through the Licensing (Repeal and Amendment Act, No 5 of 2007). The Act has for seven years remained without a “licensing officer”.
- In the proposed law, applications for licenses are to be made to the Council in triplicate and accompanied by the prescribed fees. The Council may reject or accept applications for licenses within 30 days. There were previously no prescribed time-lines.
- Licenses must specify the precise premises of the dealer as well as scrap metal in which the dealer may or may not deal.
To bolster the objectives of the Act, the Bill adopts a precautionary approach and permits the Council to refuse to license any person as a dealer in scrap metal on the grounds that the applicant-
- has within the 3 preceding years been convicted of an offence under the Act
- has been convicted of an offence involving fraud within the 5 preceding years
- is an undischarged bankrupt or company in liquidation
- has premises which are unsuitable for dealing in scrap metals
- lacks a certificate of good conduct and a valid tax compliance certificate
Notice Boards by Dealer
- Every licensed dealer, including dealers who internally generate scrap metal, are required to display a notice board bearing the dealer’s full name and the legend “Scrap Metal Dealer”.
- Dealers who fail to display the notices are liable to a fine not exceeding 2 million shillings.
- Under the section 10 of the current Act, offenders who do not display the requisite notices would be liable to a fine not exceeding 1 thousand shillings.
Keeping of Records within a month of licensing
- Under the proposed law dealers are required to keep a record of the variety, weight, dimensions and description of scrap metal in the dealer’s possession at the time of licensing. The record may be in English or Kiswahili and must be forwarded to the Council within one month of the grant of a dealer’s license.
- Dealers who fail to keep records are liable to a fine not exceeding two million shillings, and two thousand shillings for each day the offence continues after conviction respectively. The current Act imposes a lenient fine of two thousand shillings, and one hundred shillings for each day the offence continues after conviction.
Register of transactions
- Dealers are required to keep a record of the variety, weight, dimensions and description of scrap metal which comes into his possession. The dealer must record the details of the transaction including the name of the person who acquired, received or sold the scrap metal to him. The record must also include the price, date and time of the deal. Besides the dealer must record the name, identity card number, address as well as telephone number of the person from whom he received or purchased the item.
- A similar record is required for every scrap metal leaving the dealer’s possession.
Moreover, the record must be kept within 24 hours of the transaction. The dealer must ensure there is a signature or thumb print against every transaction.
- While the substance of this section is a carry over from section 12 of the current Act, the Bill introduces stiffer penalties. The Bill proposes a fine not exceeding five million shillings or imprisonment for a term not exceeding one year for first offenders. Subsequent offenders are liable to a fine not exceeding are liable to a fine not exceeding ten million shillings or imprisonment for a term not exceeding five years for subsequent offenders.
- Obviously, the proposed penalties are greatly enhanced as the current Act imposes lenient penalties of a fine not exceeding five thousand shillings or imprisonment for a term not exceeding six months for first offenders. Subsequent offenders are liable to a fine not exceeding ten thousand shillings or imprisonment for a term not exceeding two years.
Restrictions on dealings in scrap metal
- The Bill retains the provisions in section 14 of the current Act on restrictions on dealings in scrap metal. First, dealings in scrap metal are restricted to the hours between 6:30am and 6:30pm. Second, dealers are prohibited from transacting with any person who does not satisfy the dealer of his identity or who is below the age of eighteen years. Third, dealers are prohibited from storing or dealing with scrap metal in premises other than those specified in the license.
- The difference again, between the Bill and the current Act, is in terms of the penalties. Whereas offenders under the current Act are liable under section 27 to a fine not exceeding six thousand shillings or a term of imprisonment not exceeding six months, the Bill proposes a fine not exceeding one million shillings on conviction and two thousand for every day the offence continues after conviction.
Restrictions on disposing or changing the shape of scrap metals
- The Bill forbids dealers from parting with the possession, disfiguring or changing the form or shape of any scrap metal within seven days of acquiring the scrap metal
- There are some changes from section 15 of the current Act in that the prohibited period was fifteen days for ferrous and seven days for non-ferrous scrap metals respectively. Secondly, there’s a substitution of the requirement of the permission of the Principal Secretary for requirement of the permission of a police officer not below the rank of Assistant Superintendent.
- In addition, offenders under the section face a sentence of a fine not exceeding five million shillings or imprisonment of a term not exceeding three years for (sic) first offences.
- Under the current Act all offenders are liable under section 27 to a fine not exceeding six thousand shillings or a term of imprisonment not exceeding six months.
Information on lost or stolen property
- Dealers are under a duty, where a Scrap Metal inspector has given them descriptions of lost or stolen, to report if property matching the description given to them is in their possession, comes to them or is offered to them for sale afterwards.
- The report must be given to the nearest police station or metal inspector and must detail the name, identity number, telephone number and address of the person from whom they acquired the property.
- Any dealer who fails to comply is liable to a fine not exceeding ten million shilling or imprisonment to a term not exceeding one year. Section 16 of the current Act prescribes the general penalty of a fine not exceeding six thousand shillings or a term of imprisonment not exceeding six months.
Scrap metal of unknown origin
- No person may may admit scrap metal of unknown origin into their possession whether in the licensed premises or elsewhere
- Offenders under the section are liable to a fine not exceeding twenty million shillings or to imprisonment not exceeding seven years
Destruction of Infrastructure
- No person may remove, deface or destroy any scrap metal from the infrastructure infrastructure meant from roads and bridges, electricity, railways, pipeline, water and sewerage, telecommunication, or any government infrastructure project
- Offenders are liable to a fine not exceeding twenty million shillings or to imprisonment for a term not exceeding seven years
- For the first time ever the Bill introduces an offence relating to destruction of infrastructure into the Kenyan penal system. The offence attracts perhaps some of the stiffest penalty under the whole Bill.
- The introduction of the offence and with such high penalties shows that Parliament is cognisant of changing circumstances including the costly impact of vandalism on the economy.
Power of Entry
- A scrap metal inspector may enter premises where he believes an offence has been or is about to be committed, at any time for inspection. The inspector may inspect the premises, registers and records and require information from any person including employees within the preceding three months.
- Where delay would imperil the investigation, the inspector may search the premises without a warrant and break in through any door or window if necessary. However, inspectors must, if required, produce documentary proof of appointment.
- People who obstruct or hinder scrap metal inspectors are liable upon conviction to a fine not exceeding five million shillings or imprisonment for a term not exceeding one year; as opposed to a fine not exceeding six thousand shillings and imprisonment to a term not exceeding six months under section 27 of the current Act.
Forfeiture of scrap metal
- Courts may order than any scrap metal which is the subject of an offence be forfeited to the state. Secondly if any scrap metal is found without an apparent owner, the inspector shall take it to court within fourteen days and if the court is satisfied that the owner cannot be found, the court may declare the scrap metal forfeited to the state.
- However, the order of forfeiture might be conditional, requiring the scrap metal to be Gazetted first. The entire section is similar to section 18 of the current Act.
Cancellation of License
– The Council may cancel a dealer’s license if the dealer:
- the dealer is convicted of an offence involving fraud, dishonesty or stolen property
- becomes bankrupt or goes into liquidation;
- premises become unsuitable;
- obtained the license by fraud, misrepresentation or non-disclosure;
- A dealer whose license is cancelled may appeal to the (sic) Higher Court.
Prohibition of export of scrap metal
- Under the Bill, no one may export any form of scrap metal, unless the state considers that there is no demand or capacity within the country to smelt specific non-ferrous metals.
- Any export allowed under the exception must be for a specific metal dealer, for a specific quantity and duration of exports.
- The Principal Secretary for industrialisation must issue a certificate for each consignment. Exemptions to export are valid for six months only.
- Offenders under the section are liable to a fine not exceeding ten million shillings or imprisonment to a term not exceeding five years.
- Dealers are liable for offences committed by their employees. At the same time, servants or agents of dealers are personally liable for offences committed in the course of employment.
Offences by corporate (and unincorporated) bodies
- Managers, directors or officials who facilitate offences are, in addition to the entity, deemed guilty of the offences.
- The Cabinet secretary may gazette rules to regulate matters under the Bill including on licensing fees, forms, registers, notice boards, forfeitures etc
- The Bill if passed, repeals the current Scrap Metal Act, Cap
NB: No exemptions
Unlike section 25 of the current Act which permits the Minister or licensing officer to exempt dealers from provisions of the Act, the Bill permits no exemptions.
Overall, the Bill is an apposite response to the growing challenges the government faces from insufficient regulation of the scrap metal industry. Arguably, it’s a Bill whose time has come. The provisions on vandalism of public infrastructure are especially encouraging.