CREATe.org Whitepaper: Counterfeits Pose Significant Threat to Health and Safety
The Center for Responsible Enterprise and Trade (CREATe.org) — a Washington, D.C.-based non-profit industry group focused on responsible business practices — today released a whitepaper underscoring the pervasive and dangerous problem of counterfeit components and pirated materials within global supply chains, and the risks associated with this issue. The report also provides companies with practical guidance and proactive measures for securing their supply chains and mitigating the risk and costs associated with counterfeit goods.
Entitled Health & Safety Risks from Counterfeits in the Supply Chain, the paper highlights how counterfeit parts and materials are entering supply chains notwithstanding government regulations and precautions taken by industry. For example:
- A recent U.S. Senate committee report described 1,800 known cases of suspect counterfeit electronic parts in the defense supply chain, supplied by more than 650 companies.
- As many as 40 million prescriptions are filled with counterfeits each year in the United States.
- The FAA has estimated that more than 520,000 counterfeit parts are installed on planes each year.
“Global supply chains are incredibly complex and open to vulnerabilities at every point,' said Pamela Passman, president and chief executive officer, CREATe.org. “Increased focus and the sharing of leading practices are needed to help safeguard the health and safety of consumers while protecting intellectual property rights across the supply chain.”
The report highlights the vulnerabilities specific to the defense, pharmaceutical, information technology, transportation and consumer products industries. It provides examples of how counterfeit components infiltrate the supply chain as falsified raw materials, labels and packaging, as well as lower quality manufactured components, which cause explosions, fires, plane engine failures, network crashes, physical injury and death.
The whitepaper emphasizes the importance of voluntary action by industry stakeholders and procurement officials to strengthen the integrity and security of supply chains by establishing flexible, efficient, and cost-effective solutions to combat counterfeits. The report also highlights measures companies can take to mitigate counterfeits in the supply chain. These include:
(1) Incorporate provisions in supplier contracts that facilitate and improve oversight;
(2) Calibrate supplier assessments according to the risk level;
(3) Foster greater cooperation, coordination and accountability among all participants;
(4) Ensure greater traceability in the supply chain; and
(5) Confirm that supplier requirements flow down to subcontractors.
Please visit www.CREATe.org to download a copy of the full report.
The Center for Responsible Enterprise And Trade (CREATe.org) is a non-profit organization dedicated to helping companies and their suppliers and business partners reduce counterfeiting, piracy, trade secret theft and corruption. We believe that by improving practices along global supply chains, companies can help drive jobs, growth and innovation — benefiting their own businesses, the global economy, and the communities where they operate. And by partnering with governments, non-profits, think tanks and associations, we hope to amplify the work of each. To achieve our shared goals, we have developed CREATe Leading Practices for IP Protection and CREATe Leading Practices for Anti-Corruption. Our offering includes practical, scalable and cost-effective online assessments, independent evaluations, training and other resources designed to benchmark and improve processes for safeguarding IP and preventing corruption. We are based in Washington D.C., and our work is global. Please follow us on Twitter @CREATe_org or connect with us on LinkedIn.
Please visit www.CREATe.org to download a copy of the full report and infographics covering: 1) The Human Impact: Health and Safety Risks of Counterfeits; 2) Vulnerabilities in the Pharmaceutical Supply Chain; 3) Supply Chain Complexity: Department of Defense; 4) Life of a Counterfeit Part: Manufacturing; and 5) Top 10 Practices to Reduce Counterfeits in the Supply Chain.
Tina Stow for CREATe.org, 202-778-1026