Metal, mineral and even plastic theft is a growing issue, driven by the rise in demand for the likes of copper and titanium.
According to Mike Wright, partner at BTG Intelligence (part of the Begbies Traynor Group), low risk of getting caught and the fact that stealing metals and plastic is relatively easy has made minerals theft an easy target for criminals and even staff.
Controls to prevent scrap merchants from buying stolen metals are weak and difficult to enforce but information sharing between North West companies - suppliers, clients and even competitors - could improve controls and raise awareness of the issue.
Said Mike:
“The cumulative financial impact of mineral theft is significant in the North West but little is still being done to combat the problem.
“This type of crime is very often organised and is impacting utilities, telecoms, heavy industry, infrastructure and construction sectors equally.
“Local authority councils in the UK have been reporting a chronic theft of manhole covers. The result of this is often catastrophic loss leading to increased insurance burdens and high costs of repairs.”
Although metal theft is a significant problem, under reporting and lack of resources has meant the problem continues to grow: “North West companies and organisations must report all incidents to the police, even though they sometimes don't demonstrate interest. An increase in reporting will automatically bring with it visibility and trends will be identified at higher levels.
“The costs of incidents are often higher than expected when accumulated e.g. the value of lost cable or metal, cost of replacement and business interruption.
“If this information in recorded and shared with industry bodies we will be able to paint a more accurate picture and put pressure on the government and law enforcement to take the problem more seriously.
“Although UK policing has recognised the problem and a task force is operating across the country, it is resource intensive work and companies must take some responsibility for securing themselves. If they work with law enforcement to educate them on the industry, share useful intelligence and reduce self inflicted incidents, the problem would undoubtedly decrease.”
Managing the risk is key according to Mike:
“Unfortunately there is no silver bullet which will combat metal theft but companies must develop controls to mitigate the problem – not simply point fingers. A blend of proportionate measures is required and can start with having a sensible approach to security management. You don't hire someone to lock up your house when you leave for work in the morning and in the same way it is not unreasonable that staff perform some basic security practices in the workplace and are held to a common standard.
“Introduce a risk assessment process for new and existing work sites that flags up possible problems. Create an asset register and establish minimum handling and storage controls for high value items.
“Train personnel to know how to look at assets and facilities and know when something looks out of place.
“Criminals in the industry move between companies and references are often not checked so improving hiring practices of staff and sub contractors can make a big difference. You could even ask sub contractors to sign a service level agreement that holds them accountable to some a degree for loss on the job site.
Although the easy option could to blame one particular group of criminals, the losses occur in four areas; external crime, internal crime, process failure and supplier fraud. Mike explained:
“External crime is committed by the likes of burglars, bandits, opportunists or organised gangsters who target attractive locations such as building sites, derelict structures and other remote locations where chance of detection is slight.
“With internal crime the culprits are often disgruntled stores personnel or drivers 'losing' cargo items in their load. This is usually a problem where there is a poor culture of security and a ‘perks of the job’ attitude amongst staff.
“Process failure is a much wider cause of loss than previously thought. Poor management controls, poor planning, failure to record waste and sloppy supply chain administration can inflict major loss which goes camouflaged and is then blamed on external criminals. Security is held up as being inefficient when in fact the loss is driven by other business functions in the organisation.
“Finally, supplier fraud covers those situations where goods and supplies are invoiced but are either not received or not intact upon arrival. Often these losses are not criminally inclined but are simply genuine errors.”
