Economic Development Minister Ebrahim Patel has welcomed a decision by the Constitutional Court to dismiss a challenge to the State’s scrap metal export rules.

Minister Patel said the decision makes it clear that rational decisions by the State in favour of job creation and industrialisation will be upheld by the courts.

Our Constitution enables government to intervene in support of legitimate public purposes. Government will act to ensure that our industrial base and employment are supported, he said.

The Constitutional Court dismissed an application by a local exporter of scrap metal for leave to appeal the judgment of the High Court of South Africa and the Supreme Court of Appeal, upholding the State’s scrap metal export provisions — known as the price preference system — and the International Trade Administration Commission of South Africa’s decision to refuse to issue export permits to the SA Metal Group.

This brings to an end almost four years of litigation over the lawfulness of the price preference system and the refusal by ITAC to issue export permits in accordance with that system. ITAC is a statutory body in South Africa responsible for administration of trade policy.

The legal action was initiated after the Minister of Economic Development issued a Trade Policy directive requiring ITAC to administer a price-preference for local foundries and steel mini-mills on all scrap metal collected locally before they were offered for export.

Scrap metal is an input in the making of steel products, the Department of Economic Development said.

This Policy Directive was part of government’s plan to promote local industrialisation and the beneficiation of local scrap metal.

It follows significant job losses and deindustrialisation in the steel industry. It was also introduced to support the national infrastructure plan and to support lower carbon emissions in the making of steel products. (Scrap metal uses less energy than the making of steel products from iron-ore).

The Trade Policy Directive by the Minister of Economic Development and the decisions of ITAC were taken on review by scrap-metal exporters, to the Gauteng and Western Cape High Courts and later to the Supreme Court of Appeal.

The department said the cases were brought by the Metal Recyclers Association and later by the SA Metals Group.

One court application was withdrawn before it was heard. In all other instances, the cases were decided in favour of the state, with cost orders against the applicants in these courts. The Constitutional Court dismissed the application for leave to appeal on the grounds that it had no reasonable prospect of success, the department said.

Source: South African Government News Agency