A New World of Corporate Espionage

27 Jul, 2014 - 06:07 0 Views

The Sunday Mail

Business Editor’s Brief

RISING competition in industry, especially in a market that is being markedly cut back by softening consumer demand, has resulted in novelties inasfar as businesses conduct themselves. Well, stealing company information or serving as “human listening posts” for rival businesses is not exactly a novelty, but rather a seedy practice that is now being widely practised and deeply entrenched.

There have been telling references over the past couple of months. In May this year, Securico and Volsec were involved in a very public spat in which the latter was accused of fraudulently acquiring its ISO certification by using documents stolen from their rival.

Curiously, Ms Zinya Makombe, a former Securico secretary, had earlier been convicted by Harare magistrate Ms Tilda Matambanashe of theft after she stole the company’s password and transferred quality assurance documents to Volsec, her new employer.

It was alleged that the documents were subsequently taken to the Standards Association of Zimbabwe, which duly awarded the company an ISO quality assurance certificate. For her offence, she performed 210 hours of community service at Warren Park 1 Primary School in November last year.

Hardly a month passed before another interesting case surfaced.

In June, BAT Zimbabwe — an associate of BAT Plc of Britain — was reportedly investigated by local authorities for economic espionage.

The company was suspected to be behind the organised hijacks in South Africa through which local companies — Savanna Tobacco, Kingdom, Breco trading as Fodya Limited, Trednet, Catrag and Chelsea — lost cigarettes worth R100 million (US$10 million). BAT Zimbabwe strenuously denied the allegations.

The allegations emerged just about the same time that BAT South Africa was also being investigated by the South African Revenue Service on allegations ranging from corporate espionage and possible money laundering.

In March the Business Times (South Africa) published excerpts of a conversation between a BAT South Africa official with an agent hired to eavesdrop on rivals.

The publication also detailed the contents of a letter signed by SARS investigations head Johann van Loggenberg and sent to Lieutenant-General Anwa Dramat, the head of the Hawks crime-fighting unit, indicating that BAT was possibly involved in a raft of illegal activities. And just last week bus operator Munhenzva claimed to have been a victim of a well-crafted sting by rivals when market rumours suggested that one of its buses had been intercepted by law enforcement agents while trying to smuggle two corpses at Beitbridge Border Post. It’s not only the bus company that has been stung by such a vicious ploy. At one time Savanna Tobacco fumed when some competitors allegedly circulated rumours that its cigarette brands could cause prostate cancer. Such incidences clearly show that Zimbabwe’s business environment, where companies are currently locked in a scrum for a small market, has become increasingly treacherous.

Perhaps the biggest threat for businesses currently is having a top company executive that is being paid by competitors to systematically leak sensitive information, strategies and secrets.

Not surprisingly, it is now not uncommon to get detailed information — documents and all — about a company’s future projects from competing firms.

While there is normal business intelligence gathering, the situation has now escalated to levels that threaten traditional practices that used to spur innovative product development. Maybe this can be traced to the economic decline in the decade preceding 2009.

Before, companies used to dedicate a portion of their revenues to research and development as an integral component to develop new products. But in an environment where the outcomes of a capital-intensive research can easily be hijacked by wily competitors, financial outlays on research might not be considered prudent.

In the medium to long term this is most likely to affect the overall competitiveness of our businesses.

Market watchers claim that uncompetitive salaries being paid to middle managers, including the temptation of earning extra wages, is proving to be one of the key factors oiling the wheels of corporate espionage. Companies must therefore be wary of the current business practices that have the potential of seriously affecting their ability to survive, grow and compete.

This might even prepare them for the bigger challenge that regional competition will present as economies are aggregated into a single regional bloc under the auspices of the Southern African Development Community. The regional bloc is presently trying to build a customs union and eventually a monetary union, even though these initiatives are grinding along slowly.

A common market will inevitably mean that local companies will have to contend with regional competition, particularly from South Africa. And without any meaningful research and development initiatives and products that can compete on regional markers this will spell doom for local firms.

There is a whole new dark business world that exists out there and the sooner local companies realise it the better. Even on a regional and global scale, corporate, industrial and economic espionage is now raging as competition for markets intensifies. In November 2013, 14 US government agencies issued a report describing the far-reaching industrial espionage campaign by Chinese spy agencies targeting industries such as biotechnology, telecommunications, nano technology as well as clean energy.

The US, Japan and the European Union have since filed a formal complaint to the World Trade Organisation over China’s alleged unfair trading practices.

During the Cold War, a Russian high-ranking spy, Vlamir Vetrov, popularised Line X agents — a unit of the KGB that was specifically assembled to collect advanced information about science and technology from Western countries. Vetrov became a double agent, selling secrets about Moscow and the identities and activities of Line X agents across the world.

It is believed that between 1981 and 1982 Vetrov gave French intelligence service, DST, over 4 000 secret documents.

He was subsequently executed for his treasonous escapades.

Some accuse China’s Unit 61398, believed to be a secret division of the military, of working in a similar way. So the temptation to cut corners definitely exists.

It’s really a strange, weird world.

Feedback: darlington.musarurwa @ zimpapers.co.zw

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