29 October 2004

DUBAI - UAE's Dh15-billion scrap business is badly hit following the imposition of new export taxes and overseas government restrictions aimed at preventing the import of hazardous waste, traders complained yesterday.

Thousands of tonnes of scrap are being held up after the authorities in Dubai recently slapped a Dh250 per tonne levy on exports, and India and China moved to combat imports of hazardous material, according to traders.

Sharjah-based prominent scrap trader Haji Ibrahim Daood told Khaleej Times that the UAE Government has imposed a levy of Dh250 per tonne of scrap export. This resulted in blocking of exports of thousands of tonnes of scrap to India and Pakistan. "We call upon the UAE government to urgently reconsider decision of imposing  levy on scrap exports. Government officials talk about encouraging a free economy, and if they don't allow free flow of scrap, and if they are held back in the country, it will cause a lot of harm".

Haji Daood added that the Dh15 billion scrap business will be badly hit by the new levy and the blocking of the scrap flow to largest consuming nations like China and India.

The restrictions by the consuming nations is not new. IIt has been frequently imposed and relaxed. A few years ago, the same countries had imposed some restrictions, but then they realised they were badly in need of the scrap, and changed their stand. We are now faced with the problem of levy, which, as I heard, may  be increased if the traders insist on its export to other countries.

"I fail to understand why the UAE government doesn't want this so-called "hazardous" waste to be send outside the borders," asked Haji Daood.

Sharjah Municipality official declined comment when asked by Khaleej Times if the Sharjah local government  is also imposing the same levy on  scrap.  It is not yet clear whether  the taxes are imposed by the Federal Government or local government.

UAE national scrap trader, Ali Al Fadli said," The government has never been part of our business for years, allowing the trade to run smoothly and free of any problem. I don't see any reason why the government is acting in a way that it causes so much problems in our business now. Dubai is a central point for the region's scrap export, therefore any taxes will be harmful for the business".

" We are not against the system if it will help us regulate the industry, but that is not the case", Al Fadli said, and called upon the federal government to take  urgent action to remedy the situation. Otherwise, it will be disastrous for the entire scarp business in the country, he said.

"Until the situation changed, all shipments remain in the pipeline (at domestic ports), and all pending contracts will continue to suffer; and it is the suppliers who are the victims," Middle East ambassador to the Bureau of International Recycling (BIR) Salam Sharif said.

Most scrap leaving the Middle East are generally collected in Dubai for export to southern and eastern Asia, with India and China being the biggest consumers. "Imports are now allowed only through ports notified by the authorities...all scrap coming into the country will have to have per-shipment inspection certificates. "The Ministry of Commerce has warned of stern action against any violation of these measures. Customs department is being equipped to deal with the situation at the point of entry."

However, he said domestic consumers remained doubtful whether such steps were completely enforceable, because it would be difficult to track all deliveries, and inspection could only be done only on a sample basis.

Sharif said Chinese government's restrictions on imports had also added to congestion in the Middle East. China issued new rules on scrap imports last year, and overseas suppliers now have to apply for an export permit. This has slowed down the exports to the country in recent months.

Beijing announced yesterday that its deadline to approve applications has been extended until January 1, after which unapproved suppliers will not be allowed in. --With additional inputs from agencies

BY SALAH ELDIN ELTAYEB

© Khaleej Times 2004