A Cobrapost Investigation On Heavy Metal: How Officials Allow Scrap Containers Without Inspection

New Delhi: A Cobrapost investigation discovers that some companies in India are jeopardising national security by allowing scrap metal containers to be imported on fake Pre-Shipment Inspection Certificates (PSIC) without the mandatory pre-shipment inspection at ports from where they are being loaded, charging a measly Rs. 1,300 to Rs. 4,000 for passing each container, which may well be used to smuggle huge amounts of weapons, drugs and fake currency.
As per norms laid down by the ministry, foreign or Indian shipping companies transporting scrap must have a PSIC from approved agencies before they load the scrap at any port. The certificate must state that the scrap consignment does not contain any ammunition, cartridges, arms, mines, shells or any radioactive material. The government has recognized some companies for pre-shipment inspection both in India and abroad. All the scrap arriving at any Indian port has to be inspected by custom authorities. In case of a scrap consignment has originated from a country affected by rebellion or war, the exporter has to furnish documents to the customs at the time of clearance of the goods.
Non-inspection of these containers pose a dangerous hazard to national security as they can be used to smuggle drugs, weapons and counterfeit currency in large numbers. Weapons are difficult to smuggle in via the land route. These arms and ammunition are much sought after by militants in Jammu & Kashmir, Jharkhand, Odisha and in the north-east. The containers can also be used to smuggle in high-end German machinery to avoid high taxes on their import.
Cobrapost correspondent Md Hizbullah posed as an importer and met the head of Delhi-based Worldwide Inspection Services Private Limited (WISPL) Amit Kumar and his subordinate Vinod Kumar; Beena Negi of Worldwide Logistic Survey and Inspection Group and manager U. K. Banerjee and deputy managing director T. Bhattacharjee of Suprintendence Co of India Pvt. Ltd. in Kolkata.
Cobrapost discovered that the three companies are issuing PSIC of scrap to importers without any inspection in any part of the world. These companies are issuing fake inspection certificates to importers for Rs. 1,300 to Rs. 4,000 for each scrap container without asking for relevant documents required to prove that the consignments are only prescribed goods in accordance with the law of the land. So for say about 50 scrap containers at an average rate of Rs. 3,000 per container, the amount works out to Rs. 1.50 lakh. Each scrap container sells for about Rs. 20-25 lakh. For 50 containers, this works out to a staggering Rs 10 crore.
A PSIC for scrap to be imported to India from a port in any country can be issued from India. Cobrapost found out that a forged PSIC for scrap container bound for India from the US can be issued there for just $60, payable in the US.
WISPL is one of the accredited companies under the government of India, which is authorised to issue PSICs to importers of scrap metals coming into India through the sea route only after a thorough inspection of the goods at the loading port itself. WISPL has branches in 14 countries.
Hizbullah met Amit Kumar and Vinod Kumar and told them that a container with aluminum scrap was to arrive for him from the US for which he would need a PSIC from them.
Without asking for any documents, Vinod readily agreed to issue the certificate for Rs. 1,500. The correspondent tells Vinod that this is just the initial stage of his business and 50 to 60 containers would be arriving in India each month, on which Vinod asks: “Kaun si country se aayega? (From which country will it come?)” The correspondent tells Vinod that the consignments will come from the European Union, Thailand, Vietnam and Malaysia and the containers will be reaching Dadri in Ghaziabad by train.
Vinod says: “Dadri aayega? Koi dikkat nahi. Kar denge (Will it come to Dadri? No problem. We will do it).” The correspondent then tells Vinod that a container with shaded aluminum was en route via sea from the US and was expected to arrive in India within a few days and more were expected in the coming months. Our correspondent wants to fix the rate for each PSIC for this consignment.
Vinod says that they charge Rs. 1,500 per container, be it phorous or non-phorous. The only documents Vinod needs are copies of the Bill of Lading (BL) and a loading photograph of the container. Vinod also assures of all help to issue PSICs for containers coming in from European countries, Kenya and Uganda.
Then, Vinod makes a startling revelation. He admits that even though there is a ban on the import of scrap from Israel, his company has issued PSICs to importers in the past.
So are they still issuing the pre-shipment certificates to scrap importers from Israel? Vinod says: “Nahi. Pehle banate thay ab nahi banate hai kyunki ab jab se yeh country wise wala ho gaya hai na… jab se nahi banta. (No. We used to make it earlier but now we don’t because now certificates are given country-wise).”
Vinod assures the correspondent of all help, even for overseas dealings, for a fee in US dollars. They have an office in the US. He says that the rates depend upon the volume of containers being imported on a monthly basis and that he charges Rs. 3,000-4,000 if there are just one or two containers.
Vinod takes the correspondent to meet his company’s national head Amit Kumar, who asks a few questions about the correspondent’s “business” and redirects him to Vinod.
The correspondent gives Vinod Rs. 1,500 and a fake bill of the lading of the container. Without checking the credentials of the “business house” nor looking at the scrap material, Vinod hands over the PSIC immediately.
When Cobrapost tried to contact Vinod for his reaction before the airing of the story, we found that the office was closed.
In 2012, the Directorate of Revenue Intelligence had seized 22 containers of metal scrap at Mundra and Kanla ports in Gujarat. The containers were imported from some African countries using fake PSICs in a serious violation of import norms. After the seizure, the agency had raided the offices of the importers in Jamnagar, Delhi and Mumbai.
To find out whether such fake inspection certificates are awarded by others as well, the correspondent decides to investigate other agencies.
The correspondent talks to Beena Negi of Worldwide Logistic, Survey and Inspection Group based in Delhi. The company is one of the 10 agencies which was previously assigned the job of inspection of shipments to check the radiation levels of scrap by the government of India before it leaves international ports for India. But in 2011, the government of India withdrew its accreditation when cases of fake certificates issued by this agency came into light. Hence, this agency cannot issue PSICs anymore.
He tells her that a container with aluminum scrap is expected in India soon from a US port. Beena assures the correspondent of issuing a PSIC for the container without asking for any documents. She asks only for a photograph of the loaded container and a Bill of Lading. She says that the PSIC will be sent via courier.
After the fake Bill of Lading is mailed to Beena the next day, the correspondent calls her and asks about the PSIC. Beena says that the certificate will be given as soon as she gets the photograph of the container. “Ek baar photograph to check karna parega na aapka. Original certificate nahi milega jab tak photograph nahi hoga. (I’ll have to check the photograph once. Until then you won’t get the original certificate)”.
How much will she charge for the certificate? “Rs. 2,000,” she says. Will there be a discount? Not now, she says. She will give a discount when 50-60 containers come in.
Beena sends the PSIC by courier. However, instead of her company Worldwide Logistics Survey and Inspection Group — which has been banned by government of India — the certificate is issued by Asia Globe Trade, a government accredited agency. The certificate is issued just on a telephone call and an assurance of submission of documents later on.
After getting the certificate, the correspondent decides to meet Beena to understand her modus operandi in getting forged PSICs. He calls her and says that another consignment of 10 scrap containers is expected soon and he needs PSICs for them. Interestingly, he has not yet deposited Rs. 2,000 in her bank account.
The correspondent visits the office of Worldwide Logistics in Saket in New Delhi, where he meets Dilip, another senior official of the company. The correspondent tells him that he has just entered the aluminum scrap import business and regular consignments will be coming in from countries like the US, the European Union and Vietnam. He tells Dilip that a container from Vietnam has already been dispatched a couple of days ago and for this he needs a PSIC. Dilip says that he does not have the license to issue a PSIC for Vietnam, but if the correspondent needs a certificate in the next couple of days, he can arrange it as he will be getting the license by then.
When the correspondent finally meets Beena and asks how she managed to get the certificate from Asia Globe Trade Limited instead of from her own company, she says that they operate on behalf of Asia Globe in India.
She tells our correspondent that the material will be checked just once when it reaches the yard. After that, no inspection will be carried out in future and he will get the certificate without any inspection for future consignments. The correspondent tells Beena that another consignment of around 10 containers is to arrive soon and he needs a better deal. Beena fixes the deal at Rs. 1,300 per container this time.
When Beena was contacted again for her reaction before airing of the story, Beena said that she does not remember meeting the reporter in particular as she meets so many people for certificates. Beena says: “ Mere paas to bahut log aate hai… aap bataiye (Many people come to us. You tell me)”. The reporter again tells her that there are more containers on their way from the US, for which he would need PSICs. Beena again says: “Haan ho jayega… koi problem nahi hai…haan ho jayega (It will be done there is no problem. It will be done)”. So Beena was ready to do it again.
The Correspondent then reveals his identity. Immediately taking an U-turn Beena says: “ Nahi nahi aap evidence…evidence nahi hai… hum aapko de deenge…yeh nahi kaha hai ki inspection nahi karenge… (No No evidence… you don’t have evidence… I will give you but I never said that there would be no inspection)”. The reporter tells her that PSIC is already with him and issued on fake BL. Beena says: “ Aap mere naam ko kyun involve kar rahe hai… mere ko kuch kehna nahi hai…yeh sirf hamara kaam nahi hai…inspection company ka kaam hai… (Why are you dragging my name into this. This is not my job. This is the job of the inspection company )”. She disconnected the phone.

The third company to be investigated is Superintendence Co of India Pvt. Ltd. in Kolkata. The deputy managing director is T. Bhattacharjee and manager is U.K. Banerjee. Though no money is paid here, both the officials ensure all possible help to give the PSIC on a payment of Rs. 4,000.
The correspondent tells Bhattacharjee that his first consignment of a single container has been loaded in the Netherlands and is expected soon at an Indian port, for which a PSIC certificate is required. Bhattacharjee sends the correspondent to Banerjee who looks after consignments arriving at Indian ports from the Netherlands.
Banerjee asks for the Bill of Lading and a photograph of the consignment to ensure that a back dated certificate is issued. Banerjee adds that he will need only an inspection report prepared by anyone, who he would show in his records as the inspection officer. He hands over the prescribed format in which the inspection certificate should be filled.
There is neither any container nor any photograph of it, nor anyone in Netherlands who can fill out the requisite inspection form and mail it to Banerjee. After striking the deal for Rs. 4,000 for a fake PSIC per container of aluminum scrap, our correspondent leaves and does not visit the company again.
When Banerjee was contacted before airing of the story for his comment, Banerjee informs the reporter that they have stopped issuing PSIC. The reporter when revealed his identity Banerjee says: Nahi hum aisa certificate deta nahi kabhi… hum kabhi nahi bola yeh sab baat (We never give certificates like this. I never said anything like that).”

New Delhi
April 17, 2015