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23 August 2018

The True Cost of Counterfeiting Includes Human Trafficking

To understand why brands with a commitment to sustainability and ethical sourcing are rallying new technologies against the surging trade in illegal  counterfeits, consider the reporting of Dana Thomas, author of Deluxe: How Luxury Lost Its Luster. 

“The owners had broken the children's legs and tied the lower leg to the thigh so the bones wouldn't mend. [They] did it because the children said they wanted to go outside and play."

Thomas is a researcher who witnessed first-hand what goes on in illegal, unregulated factories producing counterfeit goods. And if her findings don’t stop brands and consumers from saying, “There’s nothing we can do about counterfeits,” they're guilty of more than a failure of imagination. 

It's a failure of conscience.

A Humanitarian Crisis

The heart-breaking side to the production, distribution, and consumption of fake goods by criminal organizations is a humanitarian crisis that most of the world turns a collective blind eye to.

Going mostly unchecked, the counterfeit trade has created an industry of modern-day slavery, abuse, and child labor, while stealing jobs from millions. And this is no small enterprise.

Researchers and government agencies estimate that the trade in counterfeit goods makes at least $461 billion USD per year, and the OECD/EUIPO forecast that the value of trade in counterfeit and pirated goods could reach $991 Billion by 2022. The money made by these criminals is massive, while the people doing the actual work that earns these illegal funds are too often treated miserably.

Millions of Jobs Lost

Creating job loss and unemployment problems, researchers estimated a net job loss of 2 to 2.6 million globally in 2013 and expect those numbers to rise to 4.2 to 5.4 million by 2022. In the European Union alone, the OECD estimates that the 85 billion EUR of imported counterfeit goods counterfeit causes the loss of roughly 800,000 jobs annually.

This job loss obviously devastates individuals and families, depriving them of income, but it also burdens society as a whole. Taxpayers and businesses are asked to take up the slack as unemployment overwhelms state and federal welfare programs, and the counterfeiters continue to profit, adding no tangible help to the common good.

And as for those who replace the legitimate workers – well, you read that opening quote.

Hurting the Most Vulnerable

Counterfeiting sweatshops involve the excessively cruel and criminal treatment of children as young as 6 years old in various countries where workers are forced to assemble counterfeit goods.

Thomas describes one time when she accompanied Chinese police on a raid in a tenement where counterfeit goods were being made:

“…what we discovered when we walked in: two dozen sad, tired, dirty children, ages 8 to 14, making fake Dunhill, Versace, and Hugo Boss handbags on old, rusty sewing machines. It was like something out of Dickens, Oliver Twist in the 21st century.”

This modern-day slavery doesn’t stop with children. It has been documented that migrants who have been smuggled into a country are coerced by mafias and organized crime groups all over the world into selling counterfeit goods for them. “Retail workers” in the counterfeit industry are often nothing more than indentured servants working long hours in tough conditions to pay off a smuggler’s debt that will never be paid.

The mafias who provide these people with fake goods to sell will charge for housing, food, and unsold goods or missed sales quotas, which add to the debt in a cycle that never gets it be paid.

Unsafe In The Margins

It also goes without saying that the conditions in which these children and adults are forced to work in the manufacturing and distribution of counterfeits is deplorable.

With no government or policing agency checking on working conditions, these people are stacked into tiny living spaces, given dangerous equipment, and are exposed to all of the unregulated and toxic materials used to make this fancy-looking trash.

While public speaking, Thomas often hears from audience members that they “had no idea” about the nefarious underworld of the counterfeit trade. But over her years of speaking out against it, she says that she is seeing a change in consumer awareness.  

The same people calling for sustainable manufacturing, ethical sourcing, living wages, and transparent supply chains want to be certain that they products they find online and in stores are authentic and backed by the brand on its label. 

The human costs of counterfeiting are simply too high to do nothing..

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