Scrap metal being prepared for export in this November 15, 2007 Gleaner photo. - File

The Customs Department is bowing to calls from players in the scrap metal industry for amendment to the fees imposed on the sector, but is opting to keep the charges low rather than waive them entirely.

Industry and Commerce Minister Karl Samuda is lobbying for a lifting of the $150,000 per month flat fee.

Customs said it would enter talks with a proposal of $8,000 per container checked.

The average scrap metal trader exports 20 containers per month, while the smallest players may do two or three containers, the agency said.

But even as Customs is extending assistance to the sector in light of prevailing economic woes, Customs boss Danville Walker is warning that the concession, to be discussed soon with the industry and commerce ministry, is not a free ride.

"I am adamant that the fees must be reasonable, but equally adamant that they must be paid, because these are private business people who are in it for a profit and they are crying about the lack of profit but when the time of plenty comes no one is giving an increase in the fees," Walker told Wednesday Business.

His position is in recognition of the previous reprieve granted operators in the sector.

"We have been very accommodative. We have cut the fees before and we have given people extended time to pay," he said.

Decreasing revenue

Walker was referring to an $18.3 million in fee arrears he has been unable to collect from exporters of scrap since October 2008.

For the first half of last year, the department only earned $5.5 million in revenue from scrap inspections.

Two weeks ago Minister Samuda met with players in the industry to discuss the plight of the sector.

"We are in discussion with Customs to see to what extent they are able to monitor the loading of scrap metal with their existing staff," according to Samuda.

"What they (the scrap metal exporters) have actually experienced is a 50 per cent decrease in the price per tonne of scrap metal and dramatic reduction in demand and this has taken a toll on the entire exporting community," he said.

In light of the number of scrap metal exporters, having fallen from 60 to 25 as low returns have pushed players from the business, the minister is recommending a rationalisation of Customs' staff deployment for inspections.

"What I have promised them to do is discuss the matter with the Customs Department and to see to what extent Customs would be able to monitor the loading of their shipments with the existing numbers of customs officers.

"So that they will be relieved of, if not all, a large percentage of the cost they have been contributing in underwriting the exercise of inspection," Samuda said.

More expenses

Customs officials say the proposed change in the inspection fee structure takes into account the fact that exporters will have to pay for additional hours customs officers utilise to check their cargo.

"The prorating deal suggestion is for them to pay $8,000 per container since the industry is down. But if (customs officers) do overtime, they (scrap metal dealers) will have to pay," said Larry Olakunle, the director of operations at Customs assigned to the scrap metal industry.

"There should not be a problem with this proposal because we have offered the minimum value for inspection," he explained.

Customs' willingness to relent on the fees is being regarded a welcome break by scrap metal exporters.

"I think it is a wonderful. It is a blessing for us," said scrap metal dealer Joseph Nation, who exports about two or three containers each month but is saddled with the $150,000 fee.

"It will help boost a sluggish business because right now we are paying out more than we are earning," Nation said.

dionne.rose@gleanerjm.com