Compliance Burden

Supplement - Scrap Metals Supplement

The scrap recycling industry continues to bear most of the weight of scrap theft compliance.

January 7, 2013
Kelley Stoklosa

A report from the National Insurance Crime Bureau (NICB), headquartered in Des Plaines, Ill., found that scrap theft has increased by 80 percent in recent years. Between 2009 and 2011, the NICB identified more than 25,000 insurance claims related to metals theft, an increase of 81 percent compared with claims made between 2006 and 2008.

Few demographics know how troublesome and far reaching metals theft is better than recyclers. Scrap yard managers know perhaps better than anyone that a couple hundred dollars worth of copper wire stripped from a building drains time, resources and money for far more people than just the victim of the theft. Thus, few would be surprised by the findings of a recent study by the U.S. Department of Energy, which shows the total value of damages to industries affected by the theft of copper wire would likely exceed more than $900 million each year. While scrap theft is not new, nor does the problem appear to be slowing down, the ways in which recyclers comply with state and local regulations pertaining to it are changing and gaining traction.

Welcomed Additions

With a lack of federal legislation for scrap theft, the burden falls on states and the recycling industry to ensure scrap sales are legal.

Forty-eight states have some form of scrap theft legislation, with North Dakota and Alaska remaining as the last two states without scrap-specific laws. As recently as 2009, five states had yet to adopt these types of laws.

Also of note, Ohio, Florida, Georgia, North Carolina and Alabama have passed additional laws in the past year. North Carolina recently enacted a requirement that scrap dealers must collect digital photographs or video of customers standing with the material they intend to sell. Effective Jan. 1, 2013, all scrap metal and bulk merchandise container dealers in Ohio must be registered with the Ohio Department of Safety and report all transactions through the newly created electronic reporting system. More information about Ohio’s new electronic reporting and registration system may be found at

Sellers of scrap metal in Alabama now must be photographed, provide an identification card and information about their vehicles. In Florida, the electronic registration applies to most businesses that sell secondhand goods, for example jewelry or household goods. More information about Florida’s registration system may be found at

Scrap metal dealers in some states, such as Florida and Ohio, have expressed concern about how certain laws will or do affect their businesses. A scrap dealer in Florida says the new requirement that sellers must bring scrap in a vehicle may deter long-time customers who do not have access to cars. At a recent training session on Ohio Senate Bill 193, which amends and enacts various sections of the Ohio Revised Code to make changes to the 2008 law governing scrap metal dealers and bulk merchandise dealers in the state, hosted by the Ohio Department of Public safety, scrap dealers also voiced concern and confusion about parts of the laws. When put into practice, some wondered if portions of the law made sense, such as having to turn away customers with criminal records from 20 years ago or some customers who are having a difficult time proving ownership.

Bob Schlicher from Ohio Homeland Security stressed how important it is to work with local law enforcement in these situations, adding that there often is a solution.

Rapid Communication

Also at the Ohio training session, Schlicher and other speakers repeatedly said the new law is designed to put those dealers who choose not to comply out of business. The best action scrap dealers could take, Schlicher said, was to report other dealers who were not following the law. Rapid communication, he added, has repeatedly proven to be the most effective way to slow crime. is the vehicle scrap dealers are using to do just that. According to the website, developed by the Institute of Scrap Recycling Industries Inc. (ISRI), Washington, D.C., it is a tool for law enforcement that allows scrap dealers to report stolen material. Reports are then emailed to all subscribers within 100 miles of where the incident took place.

Schlicher recalled a recent instance where wire from a telecommunications tower went missing. A local scrap dealer reported that the missing material was believed to have shown up at the yard’s gate. The dealer gave the information to law enforcement and posted it to ISRI’s website. As a result, Schlicher said, the material was quickly located by police.

ISRI officials say they are working to make the website more available to the industry. For example, Ohio scrap dealers who register with the department of security will be registered for The organization also maintains a list of best practices on its main website,, and routinely lobbies Congress on behalf of the scrap recycling industry.

Billy Johnson, ISRI director of political and public affairs, says, “We must constantly remind policymakers about how much the scrap recycling industry does for the local, state, national and international economies as well as how it protects the environment, conserves natural resources, creates jobs and generates tax revenue. If you aren’t out there speaking for yourself, someone else will speak for you—and not necessarily with your best interests in mind.”

As of yet, no federal legislation has been passed regulating scrap metals theft, though bills have been introduced in Congress.

National Attention

The most recent bill has some industry insiders wondering how it could affect them. Recently, U.S. Sens. Charles E. Schumer from New York, Amy Klobuchar from Minnesota and Lindsey Graham from South Carolina announced legislation designed to make metals theft a federal offense and to make it more difficult to sell stolen goods.

When announcing the bill, Schumer said, “It is time to put thieves who steal scrap metal from Long Island schools, streets and even gravesites behind ironclad bars. This practical plan will combat this rash of metal theft by requiring recyclers to keep detailed documentation of metal purchases, capping the amount of cash recyclers can pay for scrap metal, ensuring that those selling metal are authorized to do so and by making metal theft a federal crime.”

The Metal Theft Prevention Act, as the bill is called, incorporates many of the measures individual states adopt when implementing scrap theft laws. The proposed legislation would require recyclers to collect documentation from individuals interested in selling metal that shows ownership of the metal or that the person is authorized to sell it. The bill also would require recyclers to keep records of each purchase and limit cash payments to $100.

The proposed legislation also would “create a specific federal crime of stealing metal from critical infrastructure” and allow allow the U.S. Attorney General and state attorneys general to enforce the law.

Critics of the bill, including ISRI, have called it redundant and confusing. ISRI also has released a statement describing the legislation draconian and focused on recyclers rather than the actual criminals.

Congress could vote on the Metals Theft Prevention Act sometime in 2013.

As the states that have enacted legislation iron out related problems and logistics, only time will tell how such laws affect materials theft.

The author is assistant editor for Recycling Today magazine and can be contacted at