Copper theft is crippling parastatals

Telkom, Eskom and Transnet are the targets of an organised network of copper thieves who steal around R16-million worth of the metal a month, which seriously affects the larger economy.

Figures from the SA Chamber of Commerce and Industry's (Sacci) show that copper theft levels for May were at R15.63-million, down from R20.5-million in January and April.

Chamber spokesperson Peggy Drodskie said the effects on the economy are huge - from delays in rail transport and shipping, to dysfunctional traffic lights.

In a 2009 parliamentary session, it was revealed that Eskom lost R14.8-million in stolen materials, R38.7-million in replacement infrastructure and R18.2-million in security mitigation for 2008/09 (up from R10.5-million, R21.5-million, and R14.5-million respectively for 2007/08).

Transnet suffered losses of R12-million in stolen materials, R30.1-million in replacement infrastructure, and R116-million in security mitigation for 2008/09 (up from R8.9-million, R22.2-million and R91.9-million for 2007/08).

Telkom reportedly spent R141-million on new telecommunications infrastructure and R231-million on security mitigation in 2007/2008.

Drodskie said the chamber has received reports that scrap metal dealers are actively participating in the syndicates that are involved in stealing copper.

According to a research paper penned by Erik Torkelson, a researcher at the Institute for Security Studies' organised crime and money- laundering programme, petty criminals comprise the first group benefitting from copper cable theft.

"They are often already involved in collecting scrap metal for subsistence. Much of the work of scrap collectors is legal, albeit informal, but the illegal trade is far more lucrative, and consequently, very attractive. Scrap collectors are often tempted to supplement their earnings by stealing a few metres of copper cable from sources close to home," she said.

Torkelson said petty and organised thieves alike sell most of their copper to local scrap dealers, who make up the third group of beneficiaries and most scrap dealers have connections with foreign export agents, primarily of Chinese and Pakistani origin.

"Though certified scrap dealers are not meant to buy copper from questionable sources, for many the financial incentive is high enough to look the other way. This has prompted analysts to call for better regulation of the second-hand goods industry, and indeed a new law has been passed for this purpose," said Torkelson.

Organised crime networks have been implicated in the theft of kilometres of cable from peri-urban or rural areas in Gauteng, the North West and KwaZulu-Natal.

Another group that is possibly also benefitting from copper cable theft is the private security industry.

"Similar to the logic of racketeering, private security companies depend upon the problem continuing - not being resolved. Some have been awarded large contracts to combat copper theft and protect state assets; however, there is little evidence of their effectiveness," he said.

"Disreputable scrap dealers have always found innovative ways of dodging legislation by sponsoring 'mobile scrap yards' to buy illicit copper from travelling vehicles, establishing smelters at peri-urban farms to change the appearance of illicit copper, and opening unregulated bucket shops to 'clean' the copper before supplying licensed agents," Torkelson said.

Mafia, such as the Chinese Triads, which is also active in marine resources poaching, and other Asian groups are fingered.

Torkelson said these organised gangs are now bypassing local scrap agents altogether in response to increased scrutiny. One Pakistani syndicate with an address in Hillbrow has been using shipping containers in deserted areas as drop-off points for stolen copper.

These containers are then driven to Durban and shipped abroad with falsified customs paperwork.