The Scrap Metal Dealers Act 2013 (“The Act”) created a revised regulatory regime for the scrap metal recycling and vehicle dismantling industries.
Local authorities are the principal regulator, with powers to refuse to grant a licence to ‘unsuitable’ applicants and a power to revoke licences if the dealer becomes ‘unsuitable’.
Granting of licences
Under section 3(2) of the Act, in determining whether the applicant is a suitable person, the authority may have regard to any information which it considers to be relevant, including in particular—
(a) whether the applicant or any site manager has been convicted of any relevant offence;
(b) whether the applicant or any site manager has been the subject of any relevant enforcement action;
(c) any previous refusal of an application for the issue or renewal of a scrap metal licence (and the reasons for the refusal);
(d) any previous refusal of an application for a relevant environmental permit or registration (and the reasons for the refusal);
(e) any previous revocation of a scrap metal licence (and the reasons for the revocation);
(f) whether the applicant has demonstrated that there will be in place adequate procedures to ensure that the provisions of this Act are complied with.
Under section 3(7) of the Act, the authority may consult other persons regarding the suitability of an applicant.
Revocation and variation of licence
Section 4 provides the licensing authority with the discretion to revoke a licence on certain grounds, including where the local authority is no longer satisfied that the licensee is a suitable person to carry on the business as a scrap metal dealer.
The section also enables the licensing authority to vary a licence, imposing the conditions stipulated in section 3, if the licensee or a site manager is convicted of a relevant offence. This power includes the power to impose conditions pending an appeal, where a licensee is appealing a decision to revoke a licence.
Who needs a scrap metal licence?
A person carries on a business as a scrap metal dealer if he carries on a business which consists wholly or partly of buying or selling scrap metal, whether in the form in which it was bought or not, or if he carries on business as a motor salvage operator, so far as that does not constitute carrying on a business which consists wholly or partly of buying or selling scrap metal (Scrap Metal Dealers Act 2013 s 21(2)).
No person may carry on business as a scrap metal dealer unless authorised by a licence; to do so is a criminal offence. This offence is punishable on summary conviction with a fine not exceeding level 5 on the standard scale.
Types of licence
There are 2 types of scrap metal licence:
- a site licence, authorising the licensee to carry on business at any site in the authority’s area as defined in the licence. The licence must name the licensee and the authority, identify all the sites in the authority’s area at which the licensee is authorised to carry on business, name the site manager of each site and state the date on which it is due to expire.
- a collector’s licence, authorising the licensee to carry on business as a mobile collector in the authority’s area, which must name the licensee and the authority, and state the expiry date of the licence.
The main requirements of scrap metal dealers (Conduct of business requirements as per the Act, s.10-15)
The main requirements of scrap metal dealers are summarised below:
- Section 10 of the Act requires that the licensee displays a copy of their licence at each site identified in the licence. For site operators, this must be in a prominent place in an area accessible to the public.
- Section 11 of the Act places a requirement on scrap metal dealers, site managers and employees who have been delegated the responsibility to do so, to verify the identity of the person they are receiving metal from and the person’s address.
- Section 12 prohibits scrap metal dealers from paying for scrap metal other than by cheque or by electronic transfer.
- Section 13 of the Act sets out the record-keeping requirements in respect of any scrap metal received by a scrap metal dealer in the course of their business. Information that is required to be recorded includes the type of metal being purchased (or types if mixed); its form; condition; weight; any marks identifying previous owners or other distinguishing features; the time/date of its receipt; if the metal is delivered in or on a vehicle, the registration mark; if received from a person, the full name and address of that person; if the dealer pays for the metal, who is acting on behalf of the dealer and proof of the non-cash transaction. (s.13(2) of the Act))
- If the dealer receives the metal from a person, the dealer must keep a copy of any document which the dealer uses to verify the name or address of that person. (s.13(3) of the Act))
- If the dealer pays for the metal by cheque, the dealer must keep a copy of the cheque. (s.13(4) of the Act).
- If the dealer pays for the metal by electronic transfer— (s.13(5) of the Act))
- the dealer must keep the receipt identifying the transfer, or
- if no receipt identifying the transfer was obtained, the dealer must record particulars identifying the transfer.
- Section 14 makes similar provision to s.13 but relates to records of metal being disposed of by a site licensee.
- Where the disposal is in the course of business under a site licence, the dealer must record the following information— (s.14(3) of the Act))
- the description of the metal, including its type (or types if mixed), form and weight;
- the date and time of its disposal;
- if the disposal is to another person, the full name and address of that person;
- if the dealer receives payment for the metal (whether by way of sale or exchange), the price or other consideration received.
Tips for scrap metal dealers
Scrap metal dealers must have procedures in place to ensure the main provisions of the Act are complied with.
As a starting point, we suggest there should be a policy which pulls together all the procedures in place and is followed by all site owners, managers, operatives, and staff.
This policy must be communicated to all employees, with records to evidence that they have been trained in how to follow the procedures and a disciplinary procedure in place for employees who do not follow the procedures.
There should be regular compliance meetings between the site manager and business owner to review records and check the procedures are being followed.