Govt to accelerate scrap metal verification process

Jumat, 24 Februari 2012 | 13:48

The Ministry of Industry supports the preparation of a new and faster mechanism on scrap metal import verification process, so as not to disturb supply for steel industry.Industry Minister M.S. Hidayat said the new system was needed to avoid scarcity in scrap metal which would thus reduce steel production in Indonesia.

He saw the existing verification mechanism as time consuming since it requires field operator to check all the containers one by one.

“Now, there are thousands of containers piling up in Tanjung Priok port, every week there are containers arriving. If we check that one by one, I fear there will be a lack of raw material for steel production.”

Hidayat said it has discussed the new mechanism with PT Sucofindo as the surveyor which is tasked to conduct the verification process over the scrap metal container in Tanjung Priok Port.

He proposed arriving scrap containers to be placed outside the port and supervised by the General Directorate of Custom and Excise, while waiting for the completion of the verification process.

The verification process on 2,000 container of scrap metal stranded in Tanjung Priok Port can be done using a random method to speed up the process.

“The problem of companies whose waste import was mixed with other materials can be finished using a special mechanism without sacrificing other companies’ production,” said Hidayat.

He views the regulation on Law No.39/2009 about Process and Environmental Protection, which does not contain impurities level of dangerous and poisonous substances in scrap metal import as not reasonable.
He said the Ministry fully supports clean and environmentally friendly-based industry development. “But we cannot stop the industry production process. Let us be realistic, do not adopt a zero tolerance since in other countries there are tolerance,” he said.

Now, thousands of scrap metal containers, which will be used by 50 steel melting companies to produce billet and slab, was stuck in the port because of the tight investigation.

Additional cost

According to Vice Chairman of Indonesian Iron and Steel Industry Association Ismail Mandry said the scrap metal currently stranded in the port since last month has reached 2,400 containers.

He predicts the additional cost which would be covered by steel melting industry would hit US$100,000 per day. The cost will be used to support container storage in the port valued at US$50 per day per container, while waiting for the investigation process.

On the impurities level, Ismail said the scrap metal import to Indonesia has average impurities of 0.3%-0.5%. “The regulation [zero tolerance] may close down all steel manufacturers in Indonesia,” he said.

Separately, Minister of Trade and Head of Coordinating Investment Board Gita Wirjawan said the scrap metal import is needed to support the steel production in the country.

“The Ministry of Environment is referring to Law No.39/2009. Indeed, there is part of the scrap metal import which is still needed,” he said Tuesday.

Gita said he will discuss it with related ministries to formulize technical regulation on the implementation of the law, including impurities standard on scrap metal import.(T03/msw)

By Demis Rizky Gosta, Hadijah Alaydrus