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: โThe cumulative financial impact of mineral theft is significant in the North West but little is still being done to combat the problem. When razor wire put in place to fence off private property and keep thieves out is cut by the same thieves and taken away to be sold, we have a problem.
โThis type of crime is very often organised and is impacting utilities, telecoms, heavy-industry, infrastructure and construction sectors equally. As a bi-product of the mortgage crisis, the United States has seen a stark rise in the number of repossessed empty houses targeted in highly professional raids to strip cabling and metal fixtures and pipe work causing serious damage and devaluing the assets significantly. We are bound to face similar problems in the UK in coming months.
โThe result of metals theft is additional and often catastrophic loss, increased insurance burdens, costs of repairs. Some local authority councils in the UK have even reported a chronic theft of manhole covers.โ
Although metal theft is a significant problem, under reporting and lack of resources has meant the problem continues to grow, eh went on: โNorth 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. 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.
โAlthough 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.โ
Managing the risk is key according to Mike: โYou can outsource the security and all the activities in your business but you cannot outsource the risk – it is always yours. Unfortunately there is no silver bullet which will combat metal theft but companies must develop controls to mitigate the problem โ 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.
โIntroduce a risk assessment process for new and existing work sites that flags up possible problems. For those firms without an in-house security manager, buying in assistance to introduce and train in a simple set of security procedures is an option. Create an asset register and establish minimum handling and storage controls for high value items.
โCriminals 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 said: โExternal 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.
โWith 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 โperks of the jobโ attitude amongst staff.
โFinally, 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.โ
Mike Wright is a partner at BTG Intelligence, part of the Begbies Traynor Group. BTG Intelligence specialises in the provision of corporate intelligence, conducting investigations, and identifying, tracing and verifying individuals and assets. Begbies Traynor Group plc is AIM listed.
