The Downside of an Up Market

Along with the surge in commodity prices several years ago, there appeared to be a commensurate increase in scrap metal theft. Newspaper articles mentioned thefts of cemetery urns, bleachers from sporting venues, catalytic converters from automobiles and coils from air conditioner units. Incidents such as these and dozens of others generated significant anger from local legislators and law enforcement officials, with much of that anger being directed toward the scrap metal industry.

Cities and states began debating and passing laws and regulations that sought to combat the metals theft problem. While some of these laws called for recyclers to require proof of identification from sellers, some laws went further, including requiring that scrap yards make payments to peddlers by check and mandating that recyclers tag and hold certain materials for a prescribed time until it could be determined whether the metal delivered to the yard was stolen.

The issue of metals theft became such a concern that Mark Lewon, vice president of operations for Utah Metal Works, Salt Lake City, testified July 22, 2009, before the U.S. Senate Judiciary Committee, Subcommittee on Crime and Drugs. In his testimony, Lewon, representing the Institute of Scrap Recycling Industries Inc. (ISRI), sketched out many of the steps that ISRI and its member companies were taking to fight the theft problem. His testimony supported and clarified the scrap recycling industry’s role in the U.S. economy as well as outlining steps the industry had taken to fight the growing metals theft problem.

In his testimony, Lewon said, “Our experience has led us to the conclusion that the most effective way federal legislation can address the problem of metal theft is through a comprehensive strategy focusing, first, on efforts to prevent metal theft to the maximum extent practicable and, second, on assisting law enforcement and prosecutors in their efforts to catch, prosecute and penalize those who perpetrate these thefts to the extent necessary to dissuade their colleagues from a similar path, rather than simply restating state laws that have been enacted over the past few years and which have not proven to be effective.”

Lewon continued, “As scrap recyclers, our practical, everyday knowledge can assist you as you work to solve the metal theft problem. We want this problem addressed effectively as much as anyone else. You see, we are victims too. Fifty-six percent of ISRI’s members have been victims of metals theft in the last year, whereby metals from our own facilities have been stolen, and more than half of those members have been victims multiple times. Tragically, we have even had employees in our industry shot and killed during the commission of these crimes. Despite this, and despite our industry’s aggressive efforts at trying to address the problem of metal theft, we are very often the focus of negative news stories about metal theft.

“We support efforts to craft legislation that builds on successful strategies including cooperation and communication amongst all stakeholders,” Lewon added. “Ultimately focusing efforts on preventing the crime will serve victims and communities far better.”

When the scrap metal industry saw prices collapse in late 2008 and early 2009, the incidences of scrap metal theft declined. However, as scrap metal markets have rebounded from their lows in early 2009, the number of scrap metal thefts occurring throughout the country has appeared to increase.

COMBATING THEFT

To combat the issue of scrap metal theft as well as to ensure the industry is able to work with legislators and other concerned parties, ISRI has implemented and is aggressively promoting a number of programs to assist in the prevention of metals theft.

One of the most widely used programs is a Web-based system called www.ScrapTheftAlert.com, an interactive alert system available to law enforcement, recyclers and other stakeholders. The service is free to interested parties.

Gary Bush, ISRI director of materials theft prevention, explains that through the system, a registered user can enter information pertaining to stolen material, including photographs, into the system. Once the information has been submitted, within minutes an alert is broadcast to every registered law enforcement officer, recycler and other stakeholder within a 100-mile radius of the theft.

Bush says this method is faster than the general practice of investigators physically visiting the scene to collect information. “The theft alert system is a huge time saver for the investigator, since it covers everything within a given region,” Bush, a former law enforcement officer and materials theft investigator, adds.

“Most patrol officers today have an in-car computer with Internet access. A uniformed officer with a car computer can be on scene at a material theft. The officer, if registered, can actually issue a theft alert from the front seat of his or her patrol car.”

Bush continues, “The first 48 hours is the most critical for recyclers to try and locate stolen property, should it come through their facility.

“In many cases, a uniformed patrol officer may initiate a theft report that he or she has been dispatched to,” he continues. “By the time that report gets approved by a supervisor and gets sent to the detective division for follow up, a couple of days may have passed. Now the officer has the capability to issue the alert immediately. Another great time saver.”

The service currently has approximately 9,000 registered users in North America, with nearly 2,400 of them law enforcement officers. Bush notes that since ScrapTheftAlert.com came online, 2,508 theft alerts have been broadcast. In 2009 643 alerts were issued; 1,865 have been issued as of mid-December 2010.

The sharp increase in theft alerts does not necessarily mean that materials theft has skyrocketed; rather, it means that the metal theft system is becoming more actively used, according to Bush.

COOPERATION IS KEY

Working with law enforcement and with other stakeholders is an important part of the process, according to ISRI. Danielle Waterfield, ISRI assistant counsel and director of government relations, says the trade association has reached out to a number of industries to help in its anti-theft measures.

A few years ago, Waterfield says, “ISRI created a coalition of trade associations to share intelligence regarding metal theft problems and to develop well-reasoned ideas to combat the crime. The initial meeting of this associations group included representatives from electric and telecommunications utilities, the construction industry and law enforcement as well as representatives from the National Crime Prevention Council and the U.S. Department of Justice.”

While implementing and using an alert system could catch thieves attempting to peddle stolen goods, Waterfield says individual recyclers should establish practices at their front doors. She says ISRI has developed and distributed to its members a list of recommended practices that includes:

• Requiring photo identification for every retail transaction and recording the license plate of the vehicle the seller is driving;
• Maintaining transaction records so useful information can be provided regarding metals purchases, should police suspect certain metals may have been stolen;
• Keeping a list of suspicious materials and consistently questioning the ownership of these materials if they are brought to a scrap recycling facility;
• Requiring the seller’s signature on the receipt for each transaction when paying cash and including a certification on the receipt that the seller owns or is authorized to sell the materials;
• Utilizing video systems with time stamps to help track transactions;
• Requiring a contract or letter of authorization for the purchase of certain items, such as new production scrap, manhole covers, guardrails, historical markers, certain types of electrical cables used only in high-voltage transmission lines, etc.; and
• Training of employees on how to identify suspicious materials.

Bush says it is very important for scrap recyclers to work with law enforcement and victims of material theft. “Recyclers should establish relationships with the police, take IDs for all who don’t have a regular business relationship, keep records of all transactions, train employees to spot suspicious or proprietary material and follow ISRI recommended practices,” he says.

Utah Metals’ Lewon echoes the need for scrap metal recyclers to work more closely with their local law enforcement agents and with legislators. By doing this, a company can develop a good rapport with these two critical groups.

Lewon says when his company first reached out to local law enforcement, it was met with some suspicion. But, through the company’s efforts and willingness to partner with local legislators, Utah Metals was able to overcome its initial misgivings and develop a solid working relationship with local officials.

“In meeting with many police officers, I get great feedback from them both on ISRI’s alert system and compliments on the willingness of the recycling industry to work with them,” adds Bush. Lewon says the scrap metal industry has not found the concepts of tag and hold, where incoming material is tagged and held for a specified time before being processed, or writing and mailing checks rather than paying in cash to be effective. “The more checks you send out, the greater the chance of theft,” Lewon says.

Waterfield says, “While ISRI does not have a formal position on particular components of local laws around the country, as a rule ISRI believes that provisions such as tag and hold are ineffective and do nothing to prevent a thief from stealing the materials in the first place.”

She continues, “ISRI’s position is that the only truly effective means to combat materials theft is through collaborative efforts of all stakeholders. Legislators must come to realize that the enemy is the thief, not the recycler.” Waterfield adds, “Where recyclers, law enforcement and prosecutors have teamed up, we have seen good things happen—thieves get caught and crime goes down.”

The author is senior editor of Recycling Today and can be contacted at dsandoval@gie.net.