Rise in fake products alarming

PNG Customs director for Intellectual Property Rights and Industry Standards TOM VERE says smuggling counterfeit products into the country has the potential to destroy the country’s economy.
Business reporter DALE LUMA writes

Papua New Guinea Customs director for intellectual property rights and industry standards Tom Vere says there are businesses and individuals who are smuggling counterfeit products worth over K1 million into the country.
He said the fake products once in the PNG market have the potential to destroy the country’s economy.
Vere made this known during a recent media workshop where he said the most counterfeited products were hair and beauty products and cigarettes.
He said most recently, there had also been a rise in copied food products such as the Ocean Blue tinned fish, Ox and Palm and other food items.
“Most of the products such as tinned foods are sold in the shops on the outskirts of the city and not so much in the major stores,” he said.
“There is a lot going on and the items that we record are the ones that have been filed with us but there other products which are not filed with us.
“If we do not protect our local industries, the counterfeiters can undercut their profits and put them out of business and what happens is that business shut down and there are job losses.
“Counterfeiters can also deprive the state of revenue through smuggling or not paying the correct duties through undervaluing.”
Vere said the influx of fake products into the country could lead to various problems that directly affected the lives of the citizens.
“The public and the communities are also exposed to dangerous drugs, medicine and foods,” he said.
“Counterfeit medicines can prolong diseases and create health complications and may lead to death.
“Fake medicine such as amoxicillin (antibiotics) are normally sold in shops and not appropriate pharmacists. Fake food products can make you sick resulting in new health conditions and possible death.”
Vere also said non-standard or sub-standard products such as spare parts and electrical appliances were also becoming a major concern which led to personal investment loss and harm.
“It is a personal loss in investment because you may buy a products for a good deal but it can become useless after a month,” he said.
“The counterfeit electrical appliances can also electrocute you or set your house on fire.”
Vere said people who were dealing with fake products did not invest in research and development but made money of copying legitimate brands.
“They just copy products and make millions out of genuine and famous brands,” he said.
“They are cheap goods but they generate big returns.
“These products are generally made by unqualified people in unhygienic and poor storage facilities where counterfeiters do not adhere to international standards or safety standards.”

• Detection of counterfeit and substandard products
  Vere said the country was now experiencing an influx of not just counterfeit products but substandard goods and PNG Customs was working with industry regulators to detect and identify them.
  “We have MoUs (memorandum of understandings) with them and they give us some powers to enforce at the borders,” he said.
  “When we make those detections, we contact them to verify and inspect whether the products are fake or substandard and we pass them on to the respective regulatory agencies.”
  Vere said what some perpetrators were doing for devices such as phones was that they were bringing in parts piece by piece and assembling them in the country and selling them as brands such as Vodafone and so people are not able to make those detections.
  “We have come across these phones and once we detect them, the experts to call are Nicta (National Information and Communications Technology Authority),” he said.
  “In a month we normally make one or two detections and we contact them and they come and they check them and when they see that they are not type approved, they are destroyed.”
  He added that once a detection was made on certain fake products, PNG Custom was notified the right holders to come forward and inspect the products. “Upon inspection and verification, they will file their application of intervention to suspend clearance which will attract a fee of K2,000.”
• What can be done/measures?
  Vere said that PNG Customs was currently looking at introducing relevant Intellectual Property Rights Laws (IPR) and establish various systems that would encourage collaboration with all regulators in the country.
  “We try to collaborate with other agencies across the board so businesses and individuals do not break the law and get penalised and don’t get away; we want to make sure that we connect every area,” he said.
  “We are also streamlining to align our internal processes and developed Intellectual Property Rights standard operating procedures.
  “We are creating awareness and also training and up-skilling our front line officers collaborating with right holders and industry regulators.
  “We are also attending international training programmes organised by development partners and international bodies such Apec (Asia Pacific Economic Cooperation), WCO (World Customs Organisation) and Wipo (World Intellectual Property Organisation).
  “We are also in the process of reviewing the penalty provisions to increase fees.”
• Challenges
  Vere said the current and biggest challenge was the demand for cheap goods by the general public which created a market for substandard and counterfeit goods.
  “With respect to IPR, some of them are not registered, or are expired, and when it is realised that products are counterfeited and they come to get us to enforce, the registration process take a long time.
  “Some right holders also do not know their rights. So some reasons for not enforcing IPR laws is because of lengthy court process and costs.
  “Some right holders are based overseas so when we don’t get timely feedback, we release.”
  Vere said PNG Customs planned to review and modernise its respective laws of relevant stakeholders to increase penal provisions to act as a deterrent.
  “We would also like to see the introduction appropriate policies to map and streamline activities of relevant stakeholders going forward,” he said. “We would also like to see greater collaboration and networking with relevant stakeholders through sharing of information/intelligence, joint enforcement exercises and awareness and joint training and workshops.”