ake goods harm PNG

THE recent revelation of illegal cigarette manufacturing and the sale of fake liquor in Port Moresby a few weeks ago has prompted me to write.
An unidentified company reportedly produced cigarettes at 8-Mile, in NCD, and several people were caught distributing fake beer bearing the logo of SP Brewery.
It is not clear whether the beer was produced here or smuggled in from another country.
Some of these people have been caught and charged, and – in some cases where foreigners are involved ¬¬– deported.
We do not know how long the cigarette manufacturing and the fake liquor businesses have been going on in the city.
However, it is good to hear that the illegal activities have been detected and brought to light. I suspect a lot of similar illegal activities are taking place in the country.
Although the manufacturing industry in PNG is young and evolving and PNG does not have a lot of property rights, patents, copyrights, etc, the emergence of counterfeiting activities is posing a threat to the economy.
Producing and distributing products without the authorisation of the original developer can undermine competition and has the potential to drive genuine manufacturers and distributors out of business.
This also has the potential to damage a company’s brand and reputation, thus reducing innovativeness and reducing the ability of firms to make breakthroughs in research and development and come up with new products.
Counterfeit products are often of very low quality and fail to meet health and safety standard, and that why they are sold cheaply.
The illegal production and distribution of goods are taking place in the dark, under the cover of a weak and inadequate regulatory and legal enforcement framework.
To develop just a single product is not that easy.
It takes many years of research and development.
Millions of dollars are spent in research and development, employing scientists and engineers to come up with the product or technology.
When a new product is developed, the developer is recognised for its hard work with the issuance of a patent (the exclusive right to produce the product or use the technology).
Also the developer has the sole right to sell (if it wishes) its intellectual property right to users who want to use the technology or produce the good. Those who purchase the technology are authorised by the patent holder to produce the good or use the technology.
This is recognised and accepted worldwide with the protection of international copyright laws.
However, the unauthorised use of copyright, production and sale of counterfeit products and illegal access and use of technology has been an ongoing issue for many years.
Issues of copyright infringements have become prominent lately.
Last year, for example, the United States accused Chinese companies of infringing intellectual copyright laws and slapped China with a massive 25 per cent tariff (import tax) on Chinese imports which will have the potential to hit both the Chinese and the US economies.
China’s retaliatory actions may cause global trade distortions, which may impact global growth as well.
Counterfeiting and illegal trade result in the loss of revenue to the government because of tax evasion.
Counterfeiters just get into someone else’s garden and harvest without any toil or labour.
These smart crooks take a free ride on someone else’s labour.
Counterfeiting also raises health safety concerns because substandard and pirated products can harm the consumers who use the product.
Many of these counterfeit products have serious health implications.
They use fake company logos, making consumers believe that they have purchased a genuine product.
For example, food counterfeiters usually use low quality inputs and inconsistent formula which usually result in poor-quality products that violates international food safety rules.
These manufacturers do not claim responsibility of any harm or bad side effects associated with the consumption or the use of the good. Their activities are taking place in the dark with their businesses not legally registered with the government.
The counterfeiting of products is a threat to local businesses and a loss to the government in terms of tax revenue.
It can violate sales and licensing of products, threatens innovation and product development and is a threat to the welfare and health of consumers.
It is therefore important that there should be increased cooperation between the government departments to help combat the trade in counterfeit and illegal goods.
An important way to achieve this is to strengthen the legal and regulatory framework to enhance enforcement, including finding ways to enhance enforcement.
These will help the country to combat counterfeiting and illegal trade, saving millions of kina to the government.

Richard Napam
POM