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A pan-GCC plan could curb the sale of counterfeit building materials

Counterfeit materials have a negative impact on suppliers, contractors and, in particular, developers, resulting in risks to safety, as well as diminished revenues and market share

COMMENT, Business

Counterfeit building materials continue to represent a threat to the construction industry. A recent survey commissioned by the Steel Alliance Against Counterfeiting (SAAC) notes that 53% of respondents in the GCC have personally encountered fake steel products.

The survey states that counterfeit steel products pose significant risks throughout the industry, and in critical installations like oil rigs, pipelines, and refineries.

According to SAAC’s findings, 70% of respondents expressed awareness of the problem, while 69% were of the opinion that the GCC market needs stricter regulations against counterfeiting.

The construction boom in the GCC has led to increased competition among suppliers, resulting in the unlawful trading of cheap and counterfeit products. These fake and  substandard materials making their way into the industry present a threat to the integrity and fire safety of structures.

A leading figure in the Saudi Arabian construction industry said, in 2014, that illegal business practices by some raw-material suppliers are damaging the quality of the kingdom’s building stock.

“We now get fraudulent raw materials such as iron and cement, to the degree that some buildings collapse during construction itself,” Hamad Al-Shagawi, chairman of the Saudi Council of Engineers, added.

Bertrand de Rotalier, managing director of Vallourec, noted: “We cannot emphasise [strongly] enough the dangers of counterfeit material usage in our sector.”

In February, the Dubai Police seized counterfeit construction materials valued at $109,000 (AED400,000) after raiding a warehouse in Nad Al Hamar. The confiscated building materials were being passed off as original brands, according to media reports.

“The word ‘counterfeit’ covers all instances where a material is not original. Most counterfeit goods are produced deliberately to be sold as originals. The industry is much more widespread than people imagine,” a report by the Confederation of Fire Protection Associations Europe stated.

The report also pointed out that convincing fake materials are almost impossible to detect until a fire breaks out. It continued: “There are factories that produce original materials during the day and counterfeits at night. However, counterfeits also comes from a firm’s own value chain.”

There is a need for more stringent regulations covering the use of building materials, and I would argue that it’s the industry’s duty to hold contractors responsible for the materials supplied to construction sites. Traders, subcontractors, and contractors should receive regular training about counterfeiting.

I believe that there needs to be a GGC-wide, cross-border probe and enforcement action plan targeting manufacturers and suppliers of counterfeit building materials. A unified customs recording system, with increased coordination between custom authorities at a local and global level, is the need of the hour.

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Construction Week - Issue 725
Jan 19, 2019