By Mario Osava
RIO DE JANEIRO, Aug 29 2002 (IPS)

Industrialists and merchants in Brazil have decided to fight piracy and contraband by raising public awareness and lobbying the government to crack down harder on the phenomenon, the global nature of which requires international cooperation.

The pirating of brand name goods and the smuggling of merchandise costs Brazil 10 billion reals (3.3 billion dollars) in lost tax revenues.

The lost revenues would be enough to pull 25.5 million Brazilians out of poverty, said participants in a seminar organised Tuesday and Wednesday in the capital, Brasilia, by the National Confederation of Industry (CNI) and the National Confederation of Commerce (CNC), where many complaints were voiced.

Contraband and falsification of cigarettes, sound recordings, toys and clothing cause annual losses of six billion reals (1.95 billion dollars) for the formal sector of the economy, according to CNI statistics.

Software producers are hit especially hard by falsifications in Brazil, where 56 percent of the software sold is counterfeit, and thus does not pay copyright royalties, according to the Brazilian Association of Software Companies.

Brazil’s record industry decided to entirely pull out of the music cassette industry. One hundred percent of the cassettes sold in this country today are bootleg copies.

Instead, the industry is concentrating on fighting to preserve the market for albums, which appears to be going down the same road, as 53 percent of all records sold in the country are counterfeit.

Five years ago, only three percent of the market was covered by sound recordings produced by the so-called “record mafias”, which threaten an industry that employs 60,000 people in Brazil, said the director-general of the Brazilian Association of Record Producers, Marcio Cunha Gonçalves.

But unlike in the case of bootleg films or software, it is Brazilian musicians and singers who are hurt the most by counterfeit sound recordings, because 69 percent of the music listened to in this country is of local origin, Gonçalves observed.

In addition, one-third of the cigarettes smoked in Brazil are falsifications, and 300 brands are counterfeited, complained Milton de Carvalho Cabral, with the Brazilian Association of the Tobacco Industry.

Falsifications and smuggling represent the loss of 1.5 million jobs, and comprise a major hurdle to economic growth, because they discourage investment, complained CNI president Carlos Moreira Ferreira.

Loud criticism of the government and the justice system were also heard in the seminar. The business representatives agreed that impunity is a major factor in the growth of the booming illegal trade.

In fact, only 17 people were convicted in 6,200 lawsuits against counterfeiters and illegal vendors of audiovisual recordings in the past three years, even though the accused individuals included more than 400 repeat offenders, some of whom had been brought in more than 10 times for the same offence, said Moreira Ferreira.

Panellists in the seminar agreed that there is a lack of clearly defined policies and a dearth of adequately trained police and tax officials to clamp down on smuggling and piracy in a coordinated manner.

The problem also affects the pharmaceutical industry, because one-fifth of the medicines sold in the country are counterfeit, posing a sometimes deadly threat to human health.

The secretary of federal revenues, Everardo Maciel, the country’s highest tax authority, responded that to effectively combat the problem, society, and not only the government, must make an effort. He added that international cooperation and joint efforts between countries were also needed.

The official argued that most of the pirated products are not made in Brazil, but come from abroad, and that it is more effective to combat the problem at its point of origin.

China, Hong Kong, South Korea and other Asian countries are identified as the main sources of counterfeit products, especially toys, clothing and home appliances.

Maciel pointed out that none of the 680 tons of illegal goods confiscated last year by Brazilian authorities in the port of Santos, 70 kms from Sao Paulo, were made in Brazil, nor were they destined for the local market, but were on their way to neighbouring Argentina, Paraguay, Uruguay and Venezuela.

Nevertheless, Brazil is under pressure from the United States to step up its efforts to fight violations of intellectual property rights, especially in the area of bootleg copies of films.

Brazil, however, already has precise legislation designed to crack down on piracy and contraband, and cannot be held responsible for what happens outside its borders, including the development of technologies that make it increasingly easy to produce counterfeit films and software, argued parliamentary Deputy Ney Lopes, the sponsor of a national law on patents.

For his part, Justice Minister Paulo Tarso Ribeiro acknowledged that falsification and contraband are serious problems, linked to international organised crime, that have a negative effect on the economy and on the generation of employment.

Participants in the two-day seminar underlined that smuggling and piracy are not local but global phenomena that affect rich countries as well.

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