Wednesday, 5 January 2011

SACTWU warns that factories may close due to counterfeiting


If only counterfeiters were voodoo dolls
The Southern African Clothing and Textile Workers Union (SACTWU) were recently concerned that if the scourge of counterfeit sales does not cease, it would impact the entire South African textile industry and stated that factories will eventually close down. Whilst appreciative of  the efforts made against counterfeiting in the country SACTWU advocate tougher penalties. Source Coastweek and SACTWU press release.

SACTWU appear desperate. Counterfeiting creates a market for illicit goods that compete with genuine products resulting in large scale unemployment in the official goods sector. All of this is not surprising in an industry whose export market has been decimated by the strong value of the Rand over the past year - a situation caused largely by global interest rate differentials which ultimately, were caused by a much more sophisticated deception in the banking industry a few years ago.

However, toxic debt is not to blame. RSA has suffered significant unemployment for a number of years and its manufacturing industry, like many others, struggles to compete anyway with the cost of production of genuine goods made in other parts of the world, especially China (as this article illustrates). Ironically, critics of unions like SACTWU may blame them for assisting to cause their anti-competitive positioning. Furthermore, the temptation to sell counterfeits can be overwhelming as the illegal Ray Ban sunglasses salesman poignantly explains in the piece: “I have a family to feed. I must sell what I can,”

Without doubt, counterfeiting in RSA is on the increase. SCA IP decisions were dominated by counterfeit issues in 2010. The big IP firms in RSA now have dedicated anti-counterfeit departments. Higher sanctions (proposed in the article) may act as a deterrent but the problem is multi-faceted.

Effective or a checklist for counterfeiters?
Educating the public of  the dangers of counterfeiting like the cigarette companies are doing at the moment with their massive motorway billboards should help shift public opinion to reject counterfeits. Government initiatives like this one in September last year are useful but need to show that it has moved from talk to real, effective and measurable action and, despite successes, the court system needs to be able to deal with the problems efficiently. There are some very effective provisions in RSA legislation but the Copyright Act does needs a major update. Other less direct initiatives aimed at increasing growth and employment will also help as would efforts to secure funding (and use it effectively) from worldwide anti-counterfeiting groups.

Afro Leo notes with interest that the article commented on in this post is reported by a Chinese Xinhua news correspondent on a Kenyan website - the effect of broadband access in Africa or a sign of the global nature of the problem and interest groups? Whichever, Afro Leo thinks it positive.

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