Counterfeit Parts Materials

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Counterfeit Parts /Materials

• Why should we care?

2
Agenda
1. Why Should we care?
2. Can it happen to us?
3. Types of counterfeit.
4. What can we do to reduce vulnerability?
3
Why should we care?

• Project Huadian Datong 2x300 MW - China
• Operation In commissioning for six weeks at the
  time of failure.
• Date of failure 10/31/06
• Fluid conditions Steam at 2538 psig (175 barg),
  1006 ºF(541ºC)
• Material ASTM A335 P91 18 OD, 1.693 in (43mm)
  wall (seamless pipe)
• Result two people died, others are still listed
  as critical, and many were injured.

4
Why should we care? Continued

• Counterfeit kills. Undetected counterfeit items
  can cause electrical or mechanical failure that
  may lead to death, personnel injury, or property
  damage.
• Victims include nuclear power plants, aircraft
  manufacturers, airlines, petroleum companies,
• Numerous recent incidents are reported in
  industry and government websites.
• Industrial items that are commonly counterfeited
  include high-strength mechanical fasteners (e.g.,
  bolts, washers, and nuts), lifting equipment
  (e.g., slings, shackles, and clevises), valves,
  pipe-fittings, flanges, batteries, extension
  cords, electrical circuit breakers, relays,
  connectors, and other electronic components,
  lubricants, and adhesives.

5
Why should we care? Continued

• Examples of locations in which counterfeit items
  have been discovered include
• cranes, elevators, and fork lifts critical load
  paths of lifting equipment
• aircraft engines and attachments, wings, tails,
  or landing gear
• vehicles engines, brakes, or steering
  mechanisms and
• facilities valves, compressors, and vessels used
  to contain radioactive fluids, high temperature
  or high-pressure steam or fluids, or other
  hazardous material or safety systems supporting
  safe operation or shutdown of a facility or
  process.

6
Can it happen to us?
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Can it happen to us? Continued

• It did happen in petrochemical companies, no one
  is immune.
• Incidents are not widely publicized because of
  lack of awareness as well as for legal
  reasons.Additionally, there is no formal process
  for reporting/tracking such incidents.
• Level of vulnerability differs from one part of
  the world to another and from one company to
  another.

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Types of counterfeit

• Large scale manufacturing of counterfeit items
  fraudulently marked or labeled as being
  manufactured by a well-known, reputable company
  Typically originates in low-cost countries and
  exported globally. Typical target is major
  projects. Sometimes exported unlabeled, and
  then fitted with fraudulent nameplate and
  certification in the country where it will be
  sold.
• Resale of used/refurbished/modified items
  fraudulently as new Typically takes place in
  developed countries
• Sometimes counterfeit parts are sold to equipment
  manufacturers to become part of an assembled
  products (e.g., studs/bolts becoming parts of
  valves, pumps, compressors, heat exchanges
  etc.)

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What can we do to reduce vulnerability?

• This is a global threat, and should be addressed
  at global level.
• The petroleum industry should learn from the DOE,
  nuclear industry, aircraft and airline
  industries.
• These industries see undetected counterfeit
  items as a serious threat to safety. Safety
  manuals of the DOE facilities as well as FAA have
  sections on prevention / control of counterfeit
  items.
• DOE and FAA have training programs for employees
  and contractors involved with receiving or
  installing items commonly counterfeited, on how
  to recognize suspicious items.

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What can we do to reduce vulnerability? .
Continued.

• Examples of what other industries are doing
• The Government-Industry Data Exchange Program
  http//www.gidep.org/The GIDEP
  (Government-Industry Data Exchange Program) is a
  cooperative activity between Government and
  Industry participants seeking to reduce or
  eliminate expenditures of time and money by
  making maximum use of existing knowledge.
• The Federal Aviation Administration has an
  Unapproved Part Notification (UPN) system that
  notifies all the potential end users in the
  aviation industry when a suspect unapproved part
  is identified. http//www.faa.gov/aircraft/safety/
  programs/sups/ The Suspected Unapproved Parts
  (SUP) Program is the FAA's focal point for the
  investigation of suspect aviation parts. Despite
  vigilant surveillance and enforcement by the FAA,
  some parts circumvent the regulatory controls
  stated in Title 14 of the Code of Federal
  Regulations and enter the aviation stream of
  commerce. When such parts are discovered, they
  are regarded as "suspect." The SUP Program
  coordinates the investigations of these suspect
  parts. In addition, the program provides
  SUP-related policy, training, and technical
  information and analyses.