Almost four years of litigation over the lawfulness of South Africa’s scrap metal export provisions have come to an end with the decision by the Constitutional Court to dismiss SA Metal Group’s request for leave to appeal the High Court’s decision to uphold the price preference system.

Steel price preference system upheldThe Constitutional Court also ruled that the International Trade Administration Commission of South Africa’s (Itac's) decision to refuse to issue export permits to the company, in accordance with the price preference system, should stand.

Itac’s legal action was first initiated after Economic Development Minister Ebrahim Patel issued a trade policy directive requiring the commission to administer a price preference for local foundries and steel mini-mills on all scrap metal collected locally before they were offered for export. The policy directive was part of government’s plan to promote local industrialisation and the beneficiation of local scrap metal, following significant job losses and de-industrialisation in the steel industry.

Despite this, the sector has continued haemorrhaging jobs. The Steel and Engineering Industries Federation of Southern Africa (Seifsa) has urged government to consider additional measures to protect local metal and engineering manufacturers from cheaper and subsidised imports.

“The government must do more to support fragile sectors from the unfair competition posed by subsidised imports. The sector had not fully recovered from the 2008 global financial crisis. Instead, circumstances in the sector have deteriorated, with a number of our members either down-scaling their operations or closing down. We need an urgent intervention to protect the sector and create jobs,” says Kaizer Nyatsumba, Chief Executive of Seifsa.

“The South African economy needs a vibrant and competitive manufacturing sector. That is because, other than supporting other key sectors of the economy, manufacturing has more potential to create jobs and should be on the cutting edge of research and development as well as innovation.”

Highveld Steel has already announced that it will pursue safeguard duties on the heavy structural steel products produced by the company. This comes shortly after the announcement of safeguard protection of a further 12% on flat products. These safeguards were implemented in order to fight the low cost of imports.

Image credit: https://seifsa.co.za/wp-content/uploads/2015/08/kn.jpg



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