The Ministry of Internal Affairs of Ukraine admitted in fact last Thursday that it was unable to stamp out crime in the collection, recycling, and sales of scrap metal (in 2002, 46,000 criminal cases have been opened against the thieves of ferrous and nonferrous metals; 192 people, including 22 teenagers, have died when stealing high-voltage line wires). The ministry suggested establishing a state monopoly in this field as a universal panacea. Ministry Deputy State Secretary Yury Cherkasov said that, owing to a steep rise in the number of crimes related to theft of ferrous and nonferrous metals, the ministry had sent proposals to this effect to the Cabinet of Ministers and the Ministry for Industrial Policy. To eliminate this kind of crime, the ministry suggests that only specialized processing enterprises be allowed to handle scrap with the permission of local authorities and that export of this metal be suspended.
It will be recalled that Ukraine annually collects eleven million tons and exports about five million tons of ferrous scrap metal alone. Ukrayinski Novyny reports that export dropped by $324.5 million in 2001, down 10.7% on 2000.
Meanwhile, far from all share the hopes the police pin on the state monopoly. Volodymyr Taranenko, executive director of the Association of Metallurgical Industry, told The Day it was senseless to establish a state monopoly because this would not solve the scrap metal problem. In his opinion, it is sufficient to adequately fulfill the existing law which confines natural persons to collecting household scrap metal only. Mr. Taranenko thinks state- run enterprises can also break the law by accepting the stolen metal. The expert believes such thefts are caused by lack of other means to earn a living. “The interior ministry is literally snowed under with cases like these,” Mr. Taranenko said.
The Day also received a similar comment at the Antimonopoly Committee of Ukraine. Yury Prokopenko, deputy chief of this committee’s second research and investigation department, said that monopoly would kill competition among this market’s operators and, hence, could mark up prices for scrap and recycled metal. According to Mr. Prokopenko, the committee’s official answer to these proposals says that the existing law has sufficient levers to settle this problem without imposing a state monopoly. In his opinion, the practice of special monopoly on wine and liquor production has shown that “illicit spirits will still be made.” There is no way around it. Mr. Prokopenko believes that a state monopoly can only be established by a special law. But the rivaling specialists, he says, see this as violation of the Constitution in the form of discrimination against an economic entity on the basis of its form of ownership.
