Speech of the Chief Inspector of MMA opening Brandowners Meeting in Dar es Salaam

The Chief Inspector of the Merchandise Marks Act (1963) as amended, also the Director general of the Fair Competition Commission, Dr. Frederick Ringo (Advocate), on 26th February, 2014, at the Blue Pearl Hotel,in Dar es Salaam, had a word with brand owners and intellectual Property holders having their business operations in Tanzania. The talk aimed at working out cooperation issues in combatting the scourge of counterfeits in Tanzania. Below is Dr. Ringo's Speech during the occasion.

SPEECH OF THE CHIEF INSPECTOR - MERCHANDISE MARKS ACT, ALSO THE DIRECTOR GENERAL OF THE FAIR COMPETITION COMMISSION DELIVERED AT THE STAKEHOLDERS MEETING HELD AT THE BLUE PEARL HOTEL IN DAR ES SALAAM ON 26^TH FEBRUARY, 2014

Distinguished Brandowners, IP Rights Holders and Representatives

Distinguished Representatives of relevant bodies from the Business Community

Distinguished Manufacturers, Agents, Stockists, Distributors and Retailers

Consumer Protection and Advocacy Bodies

FCC Directors & Staff

Members of the Media

Invited Guests,

Ladies and gentlemen,

All Protocol Observed

First and foremost, on behalf of the Commission, I would like to express my sincere gratitude for your positive response to our call for a “Small but important Discussion” on the proposed approaches in combating counterfeit goods in Tanzania. This forms the head cornerstone for building a competitive and promising market economy in our country.

Ladies and Gentlemen

We may or may not be aware, but the production and sale of counterfeit goods is a global, multi-billion dollar problem. It has serious and far-reaching economic, safety and health ramifications for Governments, businesses and consumers. Counterfeiting is everywhere - it affects what we eat, what we watch, what we build with, what we drink, what and how we drive, what medicines we take, what medical devices we use and what we wear. Unfortunately, the link between counterfeit goods and transnational organized crime is overlooked in the search for counterfeits (knock-offs), which sell at very low prices.

Trade in counterfeit and pirated products is more prevalent in low-income economies. This is due to a number of factors, such as; lack of effective legislation and enforcement mechanisms, low purchasing power of consumers arising from widespread poverty, corruption, and demand/supply situation of original products, consumer ignorance, globalization, and liberalization of domestic economies

According to the Counterfeiting Intelligence Bureau (CIB) of the International Chamber of Commerce (ICC), counterfeit goods make up 5% to 7% of world trade.

A report by the Organization for Economic Co-operation and Development (OECD) states that, in 2007 up to $250 billion worth of goods in international trade could have been counterfeit and pirated goods, the trend being on the increasing side since 2005. Other estimates reveal that a more accurate figure is closer to $600 billion is lost to counterfeit trade annually, since the OECD estimates do not include online sales or goods counterfeited and sold within the same country.

Kenya Association of Manufacturers (KAM) estimates that the East Africa region loses about US$ 500 million per annum on counterfeit goods, and more than 30% of medicines sold in Kenya are fake. The report further estimates that some companies have lost 70 per cent of their market share in East Africa because of counterfeits.

The Confederation of Tanzania Industries (CTI) was quoted by IRI News estimating the magnitude of counterfeit goods in Tanzania to between 15 and 20 percent of all merchandise imports.

Distinguished Guests, Ladies and Gentlemen,

Counterfeits harm people and earn our nations a bad reputation. The Government has by and large been striving to improve investment and business environment in a bid to make the country an investment and business destination of choice to investors from across the globe.

Efforts to police the market have a long history in Tanzania. Our economy had passed through difficult transitional times from a centrally planned economy ushered in by the coming into play of the Arusha Declaration of 1967, to a market based economy from 1986. Whereas the centrally planned economy could not deliver as expected, the market economy started on a wrong footing. It was characterized by relaxation of trading restrictions, parastatal reforms and privatization, establishing regulatory framework and reshaping the market for competition in the area of trade, without embodying sufficient checks and balances to deter counterfeit goods early enough.

It was until 2005 when the Merchandise Marks Act, 1963, was revived, and its implementation put under the office of the Director General of the Fair Competition Commission as the overseer or the Chief Inspector.

Ladies and Gentlemen,

FCC since 2007 (when it officially became operational) has made substantial achievements in fighting counterfeit goods, leading to seizure of counterfeit goods worth more than TShs 3.5 Billion. Substantial volumes of counterfeit goods have been destroyed. Whenever possible, FCC had been naming all traders and companies complicit in this trade.

The Merchandise Marks Act (1963) had been amended in April, 2012, with a view to scaling up penalties against counterfeiters. Preparations of accompanying regulations are at an advanced stage. The revised law calls for more active brand-owner participation in combating counterfeits in the country.

FCC is entrusted by law to oversee the market, to ensure that the market remains contestable. However, overseeing the market, especially in combating counterfeit goods effectively, require a much closer cooperation with brand owners and intellectual property rights holders in many aspects, therefore, we saw the need for this experience-sharing workshop.

Distinguished Guests, Ladies and Gentlemen,

With about seven years operational experience, a number of challenges have been encountered and addressed by the FCC. Hitherto, FCC has operated on an ad-hoc basis. An elaborate cooperation framework between various players has not yet been established. This has been a limiting factor in undertaking effective anti-counterfeiting measures.

I as the Chief Inspector, speaking on behalf of the Government, would like to see an improvement to this scenario. To meet that end, the following areas should be addressed effectively by this meeting. Brand owners and IP holders should accord these issues weighty significance, since they form a substantial contribution to efforts in combating the scourge of counterfeit trade in our economy:

1.    Formal Cooperation: Since it is acknowledged that the scourge of counterfeit trade is an international problem which affecting nations and brand owners as well as IP holders;. a well-coordinated international cooperative efforts is required. Local and international enforcement agencies as well as brand owners and IP holders, should draw and establish a clear cooperation framework covering such aspects as establishing and managing a Fund for Anti-counterfeit and Consumer Protection that will finance a number of joint anti-counterfeit efforts such as capacity building, public awareness, investigation approaches and enforcements. The best avenue considered by us is by resolving to develop an MoU for developing a smart partnership between Brand Owners and Enforcement agencies under a Public Private Partnership (PPP) arrangement. Such arrangement should allow foe effective coordination and capacity development that will address counterfeits in a coordinated manner for mutual benefits to businesses and economies.

2.    Awareness Creation: There is rather scanty knowledge on counterfeit trade, so the need to build more awareness of the scale of the problem and emphasizing the fact that “Trading in counterfeit is indeed a Criminal Offence” is great. Brand owners and IP holders, international organizations, public health authorities, trade organizations, consumer groups and concerned citizens all have a significant role to play in creating awareness of the negative safety, social and economic effects of counterfeit goods.

3.    Brand Awareness to Outlet Centres. Current brand awareness efforts to outlet centres are very low and in most cases non-existent. FCC has the primary role of enforcing the law and not to carry out brand awareness per se. Brand owners and IP holders should carry out “brand awareness” and brand protection campaigns. Some brand owners, for example simply have “local agents” but the agency does not seem to have objectives other than maximizing sales. They may sporadically consult an enforcement agency on enforcement matters but hardly would they undertake brand awareness campaigns to their outlet centres. This makes self-regulation on the part of outlet centres an uphill task. Brand and IP holders are expected to build their own marketing channels and institute requisite brand awareness and protection programmes as one of the strategies to protect their brands.

4.    Capacity Building for Enforcement Agency: Brand owners and IP holders should continue providing training to MMA enforcement agency inspectors on adjustments, changes, refinements and modifications being made to their brands. Some Brand and IP holders have not yet offered any such training to inspectors. This has the effect of some genuine products being impounded or counterfeits being traded without being impounded.

5.    Destruction of Counterfeit goods. Enforcement Agencies are currently facing a challenge on safe destruction of counterfeit goods. Volumes of seized counterfeit goods are currently languishing in various warehouses of Tanzania Revenue Authorities and Inland Container Depots. We need brand owners and IP holders to work closely with the Office of the Chief Inspector and the Tanzania Environmental Management Council (NEMC) in financing the construction of “Environmentally Friendly Destruction Facilities”. The danger of such goods flowing back into needs to be mitigated.

6.    Undertaking Action Research: We need to regularly establish the magnitude of counterfeit scourge, changes in counterfeiting trends, and the manner in which anti-counterfeit efforts are effective from time to time. This may be best achieved by working with non-state actors (such as Community and Non Government Organizations) through Action Research arrangements.

Ladies and gentlemen,

It is my sincere hope that this meeting will assist us in finding joint solutions to these pertinent questions and strike a responsibility sharing balance to create a win-win situation. We have correlating and complementary objectives in our efforts; growing businesses for the benefit of the business community on one side, while at the same time meeting the needs and expectations of consumers, whom upon being well protected on the other side, will ensure sustainability of both the business and the economy.

The office of the Chief Inspector (FCC) is doing all what it can to fight counterfeits despite facing budgetary constraints. Let us work together for the common good; “Fencing out” counterfeits from our economy by all ways and means possible to ensure our sustainability as businesses, consumers and the economy.

With the above in mind, I now have the pleasure to announce that this workshop has been officially opened. Thank You for your kind attention.