[DEBATE] : (Fwd) 'Fong Kong' - not *just* xenophobia

[Patrick Bond]

www.bday.co.za

11 December 2007
Quality of Chinese exports to SA in spotlight
Nicola Mawson

Consumer Industries Correspondent

THERE has been a steady flow of substandard Chinese products entering SA 
this year, from contaminated dog food to paraffin stoves that blow up 
when you least expect it.

China, which has found itself under constant fire this year, hastened in 
August to assure the public that 99% of its exports were safe. This 
followed a recall in the US of 83 types of toys from the much-respected 
Fisher-Price, including Big Bird and Elmo, for containing potentially 
dangerous substances.

The European Union (EU) came out in defence of China last month, saying 
Chinese authorities “have made a significant effort” to follow up 
warnings by various authorities.

It says China started putting steps in place to ensure that toys and 
other products exported to the EU were safe.

Consumer Goods Council of SA crime prevention programme head Michael 
Broughton says all in the supply chain bear responsibility for making 
sure goods sold are safe, and retailers should be stricter when 
interrogating supply chain integrity.

Yet it’s not always that easy, he says. Who would have thought of 
looking for melamine, used in plastic floor tiles, in a dog food ingredient?

“How do you test for something that has no right to be there?”

He says there is no way of knowing how many products brought into SA are 
counterfeit or substandard.

Broughton says all the larger, genuine retailers would be diligent in 
not importing substandard items yet the risks for those who flout the 
law are minimal.

Less than 7% of containers coming into SA’s ports are inspected by 
customs officials — on a par with global standards. “Even at 7%, it’s 
still economi- cally feasible to import counterfeit items,” Broughton says.

Counterfeiters also make use of mechanisms to avoid being caught, such 
as front companies and fake delivery addresses.

On genuine imports, companies still risk being duped even if they have 
sent staff to the factory for quality control.

“It could just be window-dressing,” Broughton says.

And, in many instances, there would have been no rational reason to test 
for some of the chemicals found in products recently.

Broughton says random testing on food items would take place because of 
security issues but there would be no reason to test every item being 
imported for every possible contaminant.

Initially, electrical goods would be tested by the South African Bureau 
of Standards (SABS) and then a certificate would be issued if it fitted 
local specifications — but no test would be run to make sure there were 
no poisons in the plastic, for example. “So these things get discovered 
by accident.”

The reason fake and substandard products are becoming endemic is because 
of greed, he says. Counterfeiters simply trade off someone else’s brand 
without having to build a reputation, while substandard products mean 
cheaper input costs and higher margins.

Massmart commercial executive Jay Currie says that when importing goods, 
such as general merchandise, some categories are required to meet SABS 
standards, while others do not.

He says when goods have to meet SABS standards, Massmart has to get a 
letter of authority from the bureau, which may entail sending a sample 
for testing.

Currie says most Massmart goods are imported through trading houses and 
buying agents, who bear the burden of ensuring compliance. Compliance is 
enforced by spot SABS checks.

“The bureau has the right to confiscate products that do not meet 
compulsory specifications,” Currie says. “For any category of goods not 
specified by the SABS, we hold our buyers accountable to the Massmart 
code of ethics and expect them to do the right thing with respect to our 
clients and the law. Typically, this involves a certification process 
similar to the SABS requirement.”

Currie says well-meaning retailers could end up with sub-standard 
products because of language barriers, cultural differences and the 
number of parties involved. This made dealing with Chinese firms 
complicated.

Broughton says grey, or parallel, imports are legal but there are rules 
against retailers importing them directly instead of through local agents.

Currie says legislation is increasingly covering issues such as labels 
containing information on content and country of origin, and retailers 
will bear more of a liability burden than manufacturers in the future.

“Big retail brands belonging to public companies are likely to lead the 
charge on safety and quality, given the level of scrutiny that they need 
to perform and the extent of the liability that mistakes could have on 
their brands,” he says.

Pick n Pay, which performs in-house laboratory tests, says many 
retailers in SA abide by the British Retail Consortium’s food standards 
to plug gaps in domestic standards.

The consortium has a range of standards which food retailers in the UK 
abide by, says Pick n Pay spokeswoman Tamra Veley.

Departments such as health and agriculture are responsible for 
inspecting imported products but are unable to test everything entering 
SA. Suppliers thus need to make sure they have a verification process in 
place.

The retailer performs spot testing but suppliers need to be able to 
verify that the end product and the raw materials that went into it are 
safe and comply with the law. Otherwise, they may not supply Pick ’n 
Pay, Veley says.