One of China’s richest business-
men Jack Ma, the founder of Alibaba, the world’s largest online marketplace, called for
China to enforce stricter measures on the booming shadowy business of fake goods.
He wrote an open letter calling on China’s government to fight fakes as zealously as it does drunk driving. Ma took to Sina Weibo, a microblogging site akin to a hybrid of Twitter and Facebook with more than 200 million users, to make
his appeal.
He criticised the ineffective penalties and low conviction rate, saying there was “a lot of bark around stopping counterfeits, but no bite”.
This may well be a PR stunt or a genuine attempt to atone after Alibaba’s membership to the International Anti-Counterfeiting Coalition, a global organisation that fights piracy, was revoked in May.
Ma’s company runs Taobao,
an online-sales platform mirrored on eBay. In a further blow late last year, the US put Taobao on its blacklist of “notorious markets” for selling fakes.
He might be concerned about the amount of fakes sold on the company’s e-commerce platforms or trying to quell criticism. Either way, he highlights the mounting pressure on governments the world over to tackle the counterfeit industry which continues to grow, exposing porous border controls.
The international body, the Organisation for Economic Co-operation and Development, pins the industry’s worth at a eye-watering $461billion (R5.7trillion).
In South Africa, one of the industry’s hardest hit by fakes is clothing and footwear.
The Southern African Clothing and Textile Workers’ Union (SACTWU) held a protest outside the South African Revenue Service’s (Sars) head office in Pretoria earlier this month. The protest was intended to demonstrate the sector’s unhappiness with what the union slammed as a “crisis of illegal imports flooding” the market.
The clothing industry in the Western Cape has been hard
hit over the past two decades, bleeding jobs and factories forced
to close its doors.
The union has suspended rolling protests as Sars agreed to a meeting next month to outline urgent solutions to renew its fight against illegal exports.
The long-awaited Border Management Agency Bill should be finalised this year. It paves the way for an agency to take over the management of the country’s ports of entry.
It will focus mainly on battling corruption and reducing the amount of counterfeit goods coming across the border.
Home Affairs Minister Malusi Gigaba has raised his concerns about the battle to reduce the amount of counterfeit goods that enter via the ports.
In its memorandum to Sars, Sactwu warned the customs fraud campaign was a key driver to re-industrialise South Africa.
The tax collectors’s inaction undermines other parts of the government to build and grow industries and factories.
The collapse of Sars’s customs fraud campaign should not only concern workers and their unions, or industries and employers. The problem has a direct impact on society at large and on our future development as a country.
Sactwu said that apart from the obvious benefit of jobs, when import duties were not collected effectively, the country’s fiscus was robbed of billions of rand worth
of revenue.
The domino effect of counterfeit goods is staggering. As Sactwu’s sums show, the R4bn in import duties that South Africans lose from illegal clothing and footwear imports every year could build 25000 RDP houses, or provide childcare grants to more than 12.1million beneficiaries or
old-age grants to 3.2million pensioners annually.
The union’s members come
from the poorest parts of the country, with most being women and single mothers.
The financial blow and ramifications for the labour force from counterfeit goods is hefty and one that South Africa can ill afford.
Peters is the live editor of Weekend Argus. She is on a 10-month scholarship with the China Africa Press Centre.