Squeezing scrap imports

Vietnam requires stricter regulations on imported scrap to stem environmental degradation

In early April 2014, Ho Chi Minh City’s Customs Department confiscated eight containers containing imported substandard scrap worth over VND1.1 billion ($52,380) at the city’s Phuoc Long port. The goods’ owner, QNN Logistics Co., Ltd, declared the containers held 166.3 tonnes of scrap had been imported from France and treated under Vietnam’s environmental standards.

However, the containers were found to contain cut electric wires, which failed to meet environmental standards stipulated by the Ministry of Natural Resources and Environment (MoNRE).

In January, Ho Chi Minh City’s Saigon port customs agency held 27.83 tonnes of imported scrap in custody, as the owner, VP Metal Company, declared the goods were aluminum scrap that met with local standards. However, they were found to be substandard.

These are just two examples of many illegal scrap import violations discovered by authorities in recent years. Many imports have been found to be very harmful to the environment, such as obsolete machines and equipment and discarded electronics components.

The lack of a clear definition between waste and scrap has allowed scrap imports to enter the country unhindered and toxins in these metals can pollute the environment.

Between May 2009 and May 2011, some 37 violations were discovered, with 3,278 containers holding 56,618 tonnes of lead battery and other hazardous waste imported illegally into Vietnam via seaports and border gates.

MoNRE Minister Nguyen Minh Quang said violators were reaping hefty profits from importing waste into Vietnam.

Under the draft amendments to the Law on Environmental Protection (LEP), Vietnam will be much harder on scrap imports as part of its moves to counter ever-rising pollution.

The draft stipulated that scrap importers are allowed to use such goods for production materials, but not for trading. They must also meet strict requirements on origins, quantity and characteristics, warehouses, recycling and processing technology, as well as import contracts. When scrap is found to be substandard, it would be refused entry into the country.

Also under the draft, there are detailed conditions for scrap imports. Provincial and municipal people’s committees are responsible for examining, discovering, curbing and punishing scrap import violations. They will have to report to the MoNRE each year on scrap imports to their locality.

Technical barriers

Many National Asembly members have said the government actually wants to abolish all scrap imports, as they are greatly adding to the country’s environmental pollution.

However, Nguyen Van Giau, chairman of the National Assembly’s Economic Committee, said that as a member of the World Trade Organisation, Vietnam was required to allow scrap impors. “The revised LEP should include technical barriers to prevent imported scrap. Only scrap which can be processed into input materials for local production and have minimal impact on the environment should be allowed.”

National Assembly Legal Committee Chairman Phan Trung Ly and National Assembly Office Chairman Nguyen Hanh Phuc also said it was difficult to ban scrap imports due to Vietnam’s international commitments.

“Besides embracing technical barriers, the new LEP must include stringent standards and conditions for scrap importers. Also, municipal and provincial people’s committees must be responsible for examining and curbing all violations,” he stressed.

He added the new LEP must task the MoNRE with stipulating criteria on environmental protection for imported scrap and work with the Ministry of Industry and Trade to compile a list of allowed imported scrap.

According to Tomisaka Ryuji, a Japan International Cooperation Agency expert working at the MoNRE, many nations have to follow World Trade Organisation commitments on imported scrap. However, Vietnam also has the right to reject imported scrap that is not regulated by the Basel Convention on the Control of Transboundary Movements of Hazardous Waste and their Disposal or international regulations. Vietnam joined this convention in March 1995.

“One of the best solutions is to build technical regulations/standards. This is a good example for Vietnam,” he said.

Clarity

“Vietnam cannot be turned into the world’s dumping ground. In recent years, customs agencies and the MoNRE have had trouble solving illegal scrap imports due to current lax regulations. For example, under the existing LEP 2005, the definition of scrap is vague, creating a loophole for enormous imports to enter the country,” Phuc stressed.

According to Phan Xuan Dung, Chairman of the National Assembly’s Committee for Science, Technology and Environment, the new LEP needs to prescribe regulations to distinguish input materials from scrap and waste to prevent enterprises from illegally importing waste into the country.

Along the same line, Ryuji noted that Vietnam currently lacked specific regulations and mechanisms to distinguish usable materials from scrap and waste. That is why many enterprises use this loophole to import hazardous waste into the country, posing great risk to the environment.

According to experts, in China scrap importers must strictly follow a list of allowed imports. China also clearly distinguishes waste from scrap and input materials. Indonesia doesn’t allow any scrap imports that haven’t been treated.

Vietnam imported about 3.43 million tonnes of ferrous scrap in 2012, up 32.5 per cent against 2011. Imports again rose last year, by 30 per cent, according to the Vietnam Steel Association.