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Counterfeiting: Adverse effects on world economy
ALIYU MA’AJI
From a
"modest" beginning, counterfeiting has grown to become a global scourge. Today,
copyright violation, brand imitation, by whatever name you may call it, is
arguably the greatest threat to sustainable economic development worldwide.
Global trade in fakes is estimated at over 500 billion Euros annually. It is
escalating at jet speed. The menace, like the sword of Damocles, hangs over
world industry. Not only is counterfeiting an economic threat alone, it also
poses grave danger to human safety and is a drainpipe on public resources.
Take for example, the amount of money the
Nigerian government spends to run establishments like the National Agency for
Food and Drug Administration and Control (NAFDAC), The Standards Organization of
Nigeria (SON), The Copyright Commission and other bureaucracies, their
laboratories and workshops inclusive, which are necessary to ensure that fake
drug induced poisoning, road accidents caused by sub-standard tyres,
electrocution from poorly insulated electric cables, among several other
misfortunes, do not become reoccurring decimals in our lives. Unfortunately,
despite the current efforts of government, fake products are everywhere.
One major sector reeling from imitation is
the film and music industry. Taking Nigeria as an example, Enforcement
Bulletin, a recording industry anti piracy newsletter confirmed that our
market is flooded with poor quality pirate CDs. In mid 2003, it said, South
African Customs in the port of Durban intercepted six containers with 1.5
million counterfeit CDs from South East Asia destined for Lagos in Nigeria.
Mobile phones and their accessories and
computer consumables are increasingly being targeted. A publication, Middle
Ground, quoted World Customs Organisation Secretary General, Michel Danet as
saying "the range of counterfeit products is extremely broad and includes
everyday consumer goods, from cigarettes to foodstuffs and highly sensitive
products like pharmaceuticals, computer processors and vehicle/aeroplane parts;
the serious health and safety concerns for users are obvious."
It was the need to reverse the dangerous
activities of counterfeiters that attracted more than 360 delegates from
different countries. They comprised representatives of stakeholders in
multinational corporations, trade & industry associations, national law
enforcement associations and NGOs. The venue was the World Customs Organization
(WCO) Headquarters in Brussels Belgium. The event, the First Global Congress on
Combating Counterfeiting was organized by the WCO, Interpol, with the support of
the World Intellectual Property Organization. It was held between May 25 and 26,
2004 in co-operation with the Global Business leaders Alliance (GBLAAC), the
International Trademark Association (INTA), the International Security
Management Association (ISMA) and some companies of the World Customs
Organization IPR Strategic Group (WCOIPR)
Departing from an old tradition of
lamenting the obvious at individual levels, the delegates were there to
deliberate on the alarming trends in global proliferation of sub-standard
products. Their objective was to thrash out complexities and build strong
consensus on a broad based action plan to combat a transnational crime that is
threatening sustainable industrial growth, economic security and compromising
human safety worldwide. In doing so, they were to generate common understandings
of the prevailing attitudes of governments as well as exploit current
international instruments for co-operation among governments in enforcement
efforts.
The congress identified one of the main
frustrations of brand owners as the slow pace at which national governments are
moving to apprehend counterfeiting crime rings. It was observed that in many
countries around the world, brand owners finance elaborate investigations only
to discover that investigators were too engrossed in the pursuit of perpetrators
while concerted plans to destroy counterfeiting systems were not in place or
simply neglected.
This reality gave rise to the conclusion
that there is need for government officials to be availed advanced education and
training in the implementation and execution of anti-counterfeiting laws.
Customs officials, police authorities and regulatory officials were isolated as
the key stakeholder segment that need to be engaged in constructive dialogue if
a global front is to be built in this all inclusive fight.
Nigeria’s presence at the Brussels
Congress comprised delegates representing the Federal Government. They include
Dr. John Akanya, Director General, Standards Organization of Nigeria, Mr. Jacob
Buba, Comptroller General, Nigeria Customs Service, and Dr. David Okongwu,
Director General, National Office of Tech. Acquisition & Promotion
From the organized private sector, only
British American Tobacco Nigeria (BATN) was present. The company was represented
by Nick Hales, managing director, Kehinde Johnson, corporate and regulatory
affairs director, Flora Okereke, legal director, and Lawal Aliyu, govt. and
regulatory affairs manager. BAT’s presence may not be unconnected with the
challenges the company is facing due to the activities of counterfeiters bent on
compromising its major brands through imitation.
Several global leaders in manufacturing
participated. The Coca Cola Company was represented by its President, East and
South Asia Group, Patrick Siewart. Anthony Simon, Marketing President, Unilever
Bestfoods and Procter & Gamble’s President for Europe, John Newton represented
their companies among other notable persons too numerous to mention.
The participation of Nigeria was seen as
part of the efforts of the authorities to check organized crime. The country’s
markets have been turned to dumping grounds for sub-standard goods. A
significant portion of its foreign exchange is being diverted by counterfeiters
to the importation of inauthentic products with cheap price tags. The result is
the proliferation of low quality products; an unfortunate reality that is
strangling local industry whose products are compelled to compete on an uneven
terrain from a point of disadvantage.
Counterfeiting is not a third world
problem alone. Markets in western countries are gradually being overrun by
fakes. One is tempted to liken the situation to quelea birds invasion of a
Vietnamese rice paddy. Leading products, whatever their retail value, are
increasingly being targeted by counterfeiters. Markets all over the world are
filled with these products. If you can make it, we can fake it! If your brand
is a market leader, it’s a target! That is the philosophy of organized crime
as captured by Congress mouthpiece, Authentication
News.
One factor identified by conference
speakers as inimical to the fight against fakes is a dangerous public mentality
that big corporations are the losers. By purchasing low price counterfeits, some
consumers feel good that they are getting a good bargain. This myopia bred the
need, therefore, to create public awareness about the dangers associated with
the consumption of products from unregulated underground sources where quality
control mechanisms are alien.
In his paper, The Co-operation
Challenge, Michel Danet, WCO Chief, particularly made
reference to ill informed public attitude as unhelpful in the fight against
organized crime. He said a large percentage of the public view the infractions
of counterfeiters as victimless crimes limited to luxury goods; a view which is
sometimes reflected among law enforcement authorities."
Danet maintained that the insufficient
attention and resources being applied to the problem is a product of such
misperception of an illegal activity which is estimated to be in excess of 6% of
global trade and is growing. Danet, however, acknowledged that countries are
gradually beginning to realize that counterfeiting is not only damaging business
and investment windows, but is adversely affecting societal well being. He then
outlined WCO’s initiatives to facilitate information exchange to assist in the
fight against counterfeits.
In all, 21 world business leaders and
regulators presented papers at the event. In his speech entitled: Getting it
Right in the fight Against Fakes, Paul Adams, Chief Executive, British
American Tobacco, submitted that the support and participation of the Global
Business Leaders Alliance Against Counterfeit (GBLAAC) and other
associated interests to the Brussels congress underscores how seriously business
takes the imitation issue. This is because "Counterfeit erodes brand values and
product integrity - not just international brands but also local brands.
Long-term economic development depends enormously on the success of
locally-based companies and their brands. It is not just big multi-nationals
that are suffering at the hands of counterfeiters. What is often overlooked is
that sales of counterfeit international brands displace sales of local brands.
Most consumers of counterfeits purchase them because they cost less. And in many
cases, if counterfeit international brands were not present in the market,
consumers would instead be purchasing affordable local brands."
•To be continued
Ma’aji is the press relations manager, British American
Tobacco.
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