In its drive to promote a cleaner industry, the Tyres Equipment Parts Association (TEPA), a proud association of the Retail Motor Industry Organisation (RMI), has officially launched a whistle blower hotline where cases of illicit trading activity may be reported by both industry and consumer.
Vishal Premlall, national director of TEPA, says the initiative has support from key stakeholders in the tyre and parts environment including the SA Tyre Manufacturing Conference (SATMC), representing the four main local tyre manufacturers in the country including Continental Tyre South Africa, Goodyear South Africa, Bridgestone SA and Sumitomo Tyres as well as the Tyre Importers Association of South Africa (TIASA). On the parts side the initiative is also broadly supported by most of the major parts manufacturers and distributors.
“We know that unfortunately traders at the bottom end of the supply chain are bringing in parts through compromised channels of very poor quality, not fit for purpose parts that do not adhere to local regulatory standards,” says Premlall.
Although it is almost impossible to quantify, there is a significant cost to the sector in loss of revenue from the growing influx of these illegal and inferior quality automotive parts creeping into the market.
These sub-standard products then find themselves falling into the hands of cash strapped consumers who do not realise the full impact of utilising inferior or counterfeit parts. “They are not only compromising consumers’ health and safety but that of their loved ones,” he says, “The problem with these parts is there is also very little, if any traceability, no technical support and no recourse for the consumer.”
This is the primary reason why TEPA and other industry stakeholders have joined hands to launch this initiative. “Both consumers and industry will now be able to report cases of illicit trading activity on the TEPA Whistleblower and hopefully this will bring us one step closer to reducing the problem. Proliferation of illicit parts is so broad that the wider the reach of this initiative is, the better the chances are of exposing the perpetrators,” he says.
In a media briefing earlier this month, SATMC chairperson, Lubin Ozoux, concurred saying that illegal tyre imports are rising in South Africa, posing a risk to road users and jobs in the local industry. “The SATMC is working with law enforcement agencies to identify and investigate cases of illicit tyre trade, and we are advocating for stronger measures to prevent this trade from happening in the first place. There are rising incidents of misdeclaration of tyre consignments and rerouting of imports through neighbouring countries to avoid tyre duties, environment levies and permits,” he said.
This illicit tyre trade had far-reaching impacts on the industry, as well as the safety of drivers and passengers on the road.
Charl de Villiers, Chairman of the Tyre Importers Association of South Africa (TIASA) concurs saying, “We welcome the joining of forces between the three associations. Curbing illicit trade practices will be virtually impossible without the commitment from all industry players and their members at all levels of business. TIASA is very concerned that should an anti-dumping margin be implemented, in the absence of effective policing, it will serve as a further incentive for those who are already making themselves guilty of duty circumvention to increase their volumes, placing further strain on legitimate traders.
“We are at a crossroad. As industry we have to stand up against illicit trade to ensure we protect not only the sustainability of legitimate Importer’s businesses, but also the consumer from buying inferior products entering our market,” he says.
Compliance is absolutely key, and TEPA will continue actively engaging the relevant compliance authorities to prevent these parts from entering the automotive aftermarket. “We believe that these partnerships between industry and the statutory compliance authorities will go a long way to rid the country of unscrupulous trading activity.”
Premlall says he is confident this initiative will succeed based on the successes already achieved in the petroleum sector where fines, penalties and suspensions have been successfully executed. In that instance SAPRA, The South African Petroleum Retailers Association, set up a hotline and the awareness created has made movement by illicit operators significantly harder. In a space of 18 months over 200 cases reported, of which over 50% have been investigated resulting in the necessary sanction.
As the TEPA Whistleblower gains in momentum, Premlall says TEPA will be advocating for the formation of a Policing Compliance Forum for illicit parts which can have representation from all role players. “We believe this will send a strong message out to these traders who are not only endangering consumers lives, but also impacting the profitability of our sector,” he concludes.