Public-Private Partnerships are Key in Combating Illicit Trade

By Phyllis Wakiaga,

Illicit trade has a detrimental impact on the substantial growth of legitimate business in the country. Not only does it negatively impact our economy but has also proven hazardous to the health and safety of the citizens of this country.

A review of a recent study by the Anti Counterfeit Authority (ACA) demonstrates how illicit trade has infiltrated the sustainability of our local enterprises. The study highlights that 7,484 jobs were lost between 2016 and 2018 as a result of illicit trade. The report also states that losses as a result of pirated products stood at Sh2.2 billion over the same period, with the government losing KSh 102.99 billion in revenue in 2018.

Illicit trade manifests itself in six major and interrelated ways: smuggling, transit fraud/dumping, trade in prohibited goods or products, illicit cash flows, human and wildlife trafficking, trade in small arms and light weapons and counterfeiting, piracy and substandard goods.

Industry continues to grapple with illicit trade in the forms of smuggled, counterfeit and substandard goods. And even at this time when we are facing a pandemic, it is discouraging to note that we have seen an upsurge in the vice as a result of the supply gaps created by some containment measures. Such is the case, that counterfeiters have taken advantage of the increased demand for Fast Moving Consumer Goods as well as closure and time restrictions on the operations of some sectors. 

Combating illicit trade continues to be a challenge locally, regionally and globally. The Business Action to Stop Counterfeiting and Piracy (BASCAP) estimated in 2018 that the global economic value of counterfeit and pirated products was US$ 923b – 1.13 trillion in 2013, and is projected to increase to between US$ 1.90 – 2.81 trillion by 2022.

In Kenya, efforts to curb illicit trade continue to be steered by the Government and Private Sector. Inherently, robust private-public partnerships between the private sector, law enforcement agencies and the judiciary are the panacea to effectively fighting the vice.

One great example is the collaboration between the Government’s Multi-Agency Team against Illicit Trade and private sector, which by mid last year had led to the seizure of goods worth over Sh 7 billion.

It is also critical to mention the recently unveiled National Illicit Trade Observatory, which was developed by the government and private sector. The observatory, according to Anti-Counterfeit Authority, is designed to be a data management and reporting tool where enforcement agencies will report seized goods (both from domestic and import markets), while industry shall be able to anonymously report on counterfeited products affecting their market share as well as their impact.

But even with these great partnerships, we have not been able to beat the vice as we so rightfully desire. Therefore, we must continue to look into partnerships and collaborative efforts to combat illicit trade.

As Industry, we have the capability to play an active role in assisting to curb this vice. Firstly, through providing law enforcement with pivotal intelligence not only on general trends in terms of techniques and routes used by perpetrators but also incident- or case-specific information to trigger new illicit trade-related investigations.  Secondly,  through developing traceability systems which contribute to enhancing the transparency on the origin of raw material. Thirdly, through encouraging the sharing of information and knowledge among value chain actors, we would directly or indirectly collaborate to provide the much-needed information to capture and prosecute perpetrators of illicit trade.

Additionally, we must look into digitized brand identification, which provides an opportunity for manufacturers to identify where their brands are concentrated and where they are being counterfeited.  

As we diligently work on improving ourselves to better fight this trade, we also urge the Government to continue in their efforts to secure the sector from illicit trade.  With a focus on ensuring tighter controls at the borders and the surrounding porous routes, enhancing market surveillance and enforcement in the border towns where contraband products are sold freely as well as providing an emphasis on public awareness on the dangers of the vice, will be critical in ensuring that we maintain an effective fight against illicit trade.

We can combat this vice, win this fight and significantly reduce its impact on the economy if we continue to work together.

The Writer is the CEO of Kenya Association of Manufacturers and the UN Global Compact Kenya Chapter Board Chair. She can be reached at ceo@kam.co.ke.

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