Beyond Equipment Theft
September 2006
This article describes losses due to criminal
activities other than equipment theft such as vandalism, sabotage, unauthorized
use, joyriding, and the theft of materials, particularly scrap metal. In each
case suggestions are put forward to minimize the risk of loss. Some of the solutions
are similar to equipment theft prevention techniques and technologies but most
vary in the exact application.
by
David J. Shillingford
National Equipment
Register, Inc.
The theft of construction equipment is a significant and growing problem
and tends to grab the attention of loss control specialists due to the value
of the machines that are being stolen and recent efforts to track and analyze
the problem. There are, however, similar, and often related, crimes that result
in losses that, although less severe, become a significant drain on profits
due to their frequency and the greater likelihood that such losses may not be
covered by insurance. It is possible that the overall financial loss from these
crimes is similar to that of equipment theft (see references below). These are
also crimes that are often harder to prosecute and therefore harder to deter.
Theft of Materials
The theft of building materials is not a new problem but one that is a constant
problem, particularly for those in the home building business. It is not just
building materials that are stolen but also expensive electrical units from
houses in the last phase of construction.
A similar crime is the theft of scrap metal such as the theft of a large
amount of copper wire from utility company or the theft of a catalytic converter
to extract the small amount of semiprecious metal; even large metal sculptures
are being more frequently stolen. The recent spike in scrap metal theft is directly
related to the high prices that scrap metal is presently commanding.
Both crimes are problematic because it not only costs money to replace the
stolen material, but also business interruption costs are likely to be incurred.
Furthermore, this is a risk that is sometimes not covered by an insurance policy.
For the criminal, the risk is low because, without a serial number, the material
is unlikely to be uniquely identifiable and therefore difficult or impossible
to identify, prove ownership, and prosecute.
Solutions
Associations are starting to tackle the problem at an industry level. The
Institute of Scrap Recycling Industries, Inc. (ISRI), has created a Scrap Theft
Alert system. Whenever ISRI learns of a major scrap theft, it sends an e-mail
notice to scrap recyclers in the state where the theft occurred as well as in
surrounding states. Another association taking an active role in combating scrap
metal theft is the Construction Industry Crime Prevention Program of the Pacific
Northwest (www.cicpp.com).
Another solution is to make the material uniquely identifiable. One such
method is the use of HELPtechDNA. A container of HELPtechDNA contains thousands
of miniature chips with a serial number etched onto them. The chips are premixed
in a specially designed durable adhesive that contains an ultraviolet trace
(UV). Once applied, all HELPtechDNA numbers are registered onto the National
Equipment Register (NER) database that is used by police agencies through the
country to identify the true owner of materials and equipment. When a law enforcement
officer shines a blacklight over an area where HELPtechDNA has been applied,
it will fluoresce, alerting the officer to their existence. Once located, the
HELPtechDNA number can be read with an x30 powered magnifier, and the owner
located on the NER database. HELPtechDNA warning labels and signs let thieves
know that the items have a unique identity that cannot easily be removed. (More
information is available at
www.identificationtechnologies.com.)
One of the best solutions is to keep the thieves out. This can be done through
traditional methods, such as gates and fences, but a recent addition to worksite
security is DEWALT's SiteLock, a mobile alarm system based on a central control
unit that links wirelessly to a variety of locks and sensors which can be placed
on materials and equipment on a worksite and that will trigger an alarm if disturbed.
(More information is available at
www.dewalt.com/us/core/.)
As ever, good project management can have an effect on security. In this
case "just in time" deliveries will reduce the amount of material available
to thieves.
Vandalism and Sabotage
Sabotage is a form of vandalism but needs to be treated separately because
vandalism can be deterred by making your assets a riskier option for a vandal
than other potential targets. On the other hand, the target for sabotage has
already been chosen and is largely independent of risk. Sabotage may result
from events such as a labor dispute, a competitor, or more general political
demonstrations, such as protests against deforestation.
Solutions
Vandalism is, however, not entirely random. Whether it is graffiti or physical
damage, the likelihood of vandalism is greater in certain areas (high crime,
low visibility) and at certain times of day (nights, particularly weekends).
If there is a choice as to where equipment is left over a weekend, these factors
should be considered. Although random acts of violence are hard to deter, the
equipment owner who is mindful of this risk and, with better overall security,
is less likely to become a victim.
Combating sabotage depends largely on the exact nature of the threat and
the local conditions. The bad news is that you have already been chosen as the
target. The good news is that the events that lead up to such an act should
provide you with some warning that will allow additional measures to be taken.
A remote logging operation might consider corralling equipment and monitoring
access roads. An urban work site might notify local law enforcement of a heightened
risk. Please note that you should reach out to local law enforcement
before you need them. There is much that
you can do to help them help you, details of which are provided in a previous
Expert Commentary, "Helping
Law Enforcement Help You."
Joyriding and Unauthorized Use
Like vandalism, the target of joyriders is likely to be more random than
unauthorized use where someone (usually an employee or subcontractor) uses equipment
out-of-hours (usually over a weekend) for a different "cash-in-hand" project
and returns the equipment before work resumes. The total loss of a machine is
unusual, but there can be indirect costs. The potential for incidental damage
to other property from joyriders can be significant, as can be the liability
if injury results. Unauthorized use can result in a "theft" if an employee is
using equipment during the weekend and decides later on that it is too risky
to move the equipment back to the worksite.
Solutions
Most theft prevention and recovery mechanisms rely to some extent on the
fact that a thief needs to move equipment some distance before selling it. A
joyrider does not face the same challenges. The best, if not the only, defense
against joyriding is therefore to immobilize the equipment. This may be achieved
by securing the ignition system with a device such as Keytroller (www.keytroller.com)
or by immobilizing the equipment using special locks designed for equipment
such as those supplied by the Equipment Lock Company (www.equipmentlock.com).
It should be noted that the blocking of smaller equipment with larger equipment
that might help deter the theft of the more easily stolen machine may not be
as effective against joyriders as a joyrider may be as happy, if not happier,
to "ride" a large machine. Like vandalism, the risk is greatly diminished if
measures are taken to render other targets in the area better targets.
Unauthorized use may also be tackled by immobilizing the equipment although
an employee/operator may also be the person with the keys or code. Recording
hour meters before and after weekends is the easiest way of detecting unauthorized
use. Another powerful tool is the use of Global Positioning Systems such as
QUALCOMM (www.qualcomm.com)
that record the exact location and usage of a machine at any time of the night
or day. Rental companies use GPS to monitor machines that go "off-rent" on a
Friday but cannot be picked up until Monday morning.
Summary
Losses from vandalism, sabotage, unauthorized use, joyriding, and the theft
of building materials and scrap metal are significant. The overall size of the
problem is often underestimated because of the difficulty of tracking total
losses because many of these losses are never reported to an insurance company.
With a little effort, the chances of being a victim can be greatly reduced,
with the added plus that many of the techniques and technologies also have a
beneficial effect on safety and equipment theft.
References
Builder News: "Margins in Profit, Construction
Theft: A Loss Cause," Nov. 2005. (www.buildernewsmag.com/).
"CICP Metal Theft Alerts," (www.cicpp.com).
"Combating Scrap Theft: Scrap Dealers Don't Want It and They're Doing Something
about It," June 7, 2006 (www.ISRI.org).
"Construction Site Theft Costs Consumers," May 8, 2003 (www.buildingonline.com/news/viewnews.pl?id=2256).
"Hammered by Theft," The Press-Enterprise,
July 20, 2005 (www.pe.com/imagesdaily/2005/07-21/bw_lumber20b_300.jpg).
"San Joaquin County Fights Metal Theft," July 20, 2006 ACTION Program link
(www.agcrime.net/ag_crime_news.htm).
USA Today: "Thefts at Building Sites
on the Rise," Dec. 28, 2005.
Wall Street Journal: "Metal Is So Precious
That Scrap Thieves Now Tap Beer Kegs. Brewmaster Combs Junkyards for Company
Property; Stealing 3½ Tons of Steel," March 14, 2006 (online.wsj.com/article_print).
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