South African Bureau of Standards on its commitments to IPAP, Department of Trade and Industry briefing on product labelling and trade descriptions; Committee's Annual Work Plan for 2012/13: consideration

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Trade and Industry

29 May 2012
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

SABS Briefing
The South African Bureau of Standards briefed the Committee on its commitments to the Industrial Policy Action Plan. It said that the development of standards underpinned the role of the SABS, not only locally but also at a global level. This was done in conjunction with the other bodies which made up SQAM (Standards, Quality, Accreditation, Metrology), namely the National Regulatory Council of Standards, the South African National Accreditation System and the National Metrology Institute of South Africa. South Africa was part of the international organisation that determined standards, conducted certification tests and provided certification. The SABS was involved in the development of standards regionally through the Southern African Development Community Cooperation in Standardisation organization, as standards provided quality assurance, ease of market access and a market advantage to companies.

With regard to the Industrial Policy Action Plan, the SABS was responsible, with SQAM, to support the development, accreditation and enforcement of standards that could assist companies. It also supported export market access by assisting companies who wanted to meet standards. The SABS was developing market standards in the key sectors of agro processing, metal fabrication, green industries, chemicals and pharmaceuticals. It was developing mandatory standards to enforce regulatory enforcement and strengthening its testing and certification capacity to support industry, and was supporting the National Regulator for Compulsory Specifications and the South African Revenue Service in their work against illegal imports. The SABS was proposing that standards should be set as the entry criterion from a regulatory and a procurement perspective. It was assisting Small, Medium and Micro Enterprises to improve their awareness of standards through workshops and training services.

Members asked if SABS was involved with Tongaat-Hulett in its sugar-ethanol production. Did the SABS and the veterinary services overlap on phytosanitary services? Did the SABS do testing at ports? Which Acts were applicable and which institutional bodies were responsible for the different legislations concerning SQAM, and how were they policed? How relevant was the SABS to townships, rural areas and schools?  Who decided in which sectors standards were going to be focused? Was the SABS geared to set standards for the shale gas industry? Who paid for the testing done by SMME’s and how was this ameliorated? Were Chinese imports up to standard? How did standards resuscitate industries, and what were “home grown” standards?

Department of Trade and Industry (Dti) Briefing
The Dti said that complaints from the clothing and textile industry and unions had led to product labelling requirements, which clearly detailed the country of origin of imports. Clothing had been dumped in South Africa with labels falsely denoting it had been made in South Africa, or had been sent via Malawi (which had preferential trade status with South Africa), where labels had been stitched on.  Section 24 of the Consumer Protection Act of 2006 contained all the relevant repealed parts of the Merchandising Marks Act which had previously governed this aspect. The Israel/ Palestine labelling issue was thus within the ambit of the laws of the country.

The Dti said that Genetically Modified Organisms (GMO) legislation was administered by the Department of Agriculture and Forestry and Fisheries, while the Dti’s role was that of the lead department in informing the consumer. Approved GMO products were maize, cotton, canola oil and soya. There were regulations to indicate that the contents of foods contained GMO. For labelling purposes, less than one percent of accidental contamination was regarded as food with no GMO. Foods with up to 5% contamination might be labelled GMO and foods above 5% GMO had to be labelled as containing GMO. If GMO was one component of the food, then the food had to be labelled. These referred to the four approved GMO products mentioned above. The Department had sent the legislation to the World Trade Organisation for comment regarding trade barriers, but had received no response.

Members said that from an international law perspective, South African law recognised Palestine on the basis of the 1948 borders.  The matter was significant in that it would set a policy precedent, as there were other countries with similar situations -- for example, Tibet, Taiwan and Mauritania. Members said the Economic Development Department had to be included in consultations and that other countries should never be allowed to dictate South Africa’s policies.

Members said that GMO was the way of the future and had the potential to impact on the quality of the food. It also had an impact on the micro environment, with downstream consequences on irrigation and water usage. In addition it had the potential to displace labour, as GMO’s would reduce the need for labour through the increased mechanisation of farming. Members asked what the perceived advantages and dangers of GMO were. How were emerging farmers benefiting from GMO? Members said there was the potential for developing monopolies within farming which would affect food security.

 

The Committee’s updated strategic plan and annual performance plan was adopted. Members of the cooperatives subcommittee were Mr Hill-Lewis (DA) and Mr Selau (ANC), with the chairperson being Mr X Mabasa (ANC).

Meeting report

 

South African Bureau of Standards (SABS) Briefing
Dr Sadhvir Bissoon, the executive in charge of Standards at the SABS, said that the development of standards underpinned the role of the SABS not only locally but also at a global level. This was done in conjunction with the other bodies which made up SQAM (Standards, Quality, Accreditation, Metrology), namely the National Regulatory Council of Standards (NRCS), the South African National Accreditation System (SANAS) and the National Metrology Institute of South Africa (NMISA). South Africa was part of the international organisation that determined standards, conducted certification tests and provided certification. The SABS was involved in the development of standards regionally through the Southern African Development Community Cooperation in Standardisation (SADCSTAN) organization, as standards provided ease of market access and a market advantage to companies.

With regard to the Industrial Policy Action Plan (IPAP), the SABS was responsible with SQAM to support the development, accreditation and enforcement of standards that could assist companies. It also supported export market access by assisting companies who wanted to meet standards.  The SABS was developing market standards in the key sectors of agro processing, metal fabrication, green industries, chemicals and pharmaceuticals. It was developing mandatory standards to enforce regulatory enforcement, strengthening the testing and certification capacity to support industry, and was supporting the NRCS and South African Revenue Service (SARS) in their work against illegal imports.

It had developed homegrown standards for photovoltaic systems, solar water heaters and energy efficiency labelling and it was reviewing the all the standards relating to the energy efficiency and water efficiency of buildings.

 

In agro processing, it was close to finalising standards on bio-diesel fuel. It aimed to develop compulsory standards for olive oil, rock lobster, honey and processed meat. The SABS also promoted the ISO 9001 quality management systems to improve South African suppliers’ product certification and provide them with a competitive advantage. It was developing the technical specifications for the measurement and verification of local content of goods and services and the development of tourism excellence standards. It was acquiring the test methodology and equipment to test standards for the forthcoming introduction of set top boxes.

 

The SABS was proposing that standards should be set as the entry criterion from a regulatory and a procurement perspective. The SABS mark was very reputable and provided quality assurance. The SABS had an auditing capacity of 180 personnel. It was assisting Small, Medium and Micro Enterprises (SMMEs) to improve their awareness of standards through workshops and training services. It had memorandums of understanding (MOU) with the Technology Innovation Agency (TIA) to assist with the Youth Innovation Development Fund and with the Small Enterprises Development Agency (SEDA) on securing funds for SMME’s for the testing of their products. It also had an MOU with Massmart to be the preferred tester of products from SMME suppliers, to test for non-conformance of the suppliers’ products and thus mitigate Massmart’s risk.

Discussion
Mr G McIntosh (COPE) asked if SABS was involved with Tongaat-Hulett in its sugar-ethanol production. Did the SABS and the veterinary services overlap on phytosanitary services? Did the SABS do testing at ports?

Adv A Alberts (FF+) asked which Acts were applicable and which institutional bodies were responsible for the different legislations concerning SQAM, and how they were policed.

Mr X Mabasa (ANC) asked how relevant the SABS was to townships, rural areas and schools. He asked this in the light of reports that big business had re-injected chickens which were sold at spaza shops. He expressed the hope that SMME’s and coops were not just an afterthought for the SABS.

Mr B Radebe (ANC) asked who decided in which sectors standards were going to be focused. Was the SABS geared to set standards for the shale gas industry? Who paid for the testing done by SMME’s and how was this ameliorated?

Ms C Kotsi (COPE) asked whether Chinese imports were up to standard.

The Chairperson asked how standards resuscitated industries and what “home grown” standards were.

Dr Bonakhele Mehlomakulu, CEO of SABS, replied that SMME’s should not start their involvement at the testing level but rather earlier, at the point where standards were being developed. The SABS provided administrative support and venues for the process of establishing ISO standard setting. Standards had been driven by industry input and input from overseas before IPAP, but now the SABS was driving standards, for example, in traditional medicines and was seeking to formalise the industry. It had started academic programs at university engineering faculties. She said testing could not be subsidised by the SABS but the organisation sought the involvement of Massmart and the IDC in partnerships. There was a local content percentage standard for the different industries which was set by Treasury and the Department.

Dr Bissoon said that the SABS had certified Tongaat-Hulett as ISO 9000 compliant. He said all SQAM affiliates played a role regarding phytosanitation.  At ports, pre-shipment verifications could be done.

Dr Mehlomakulu added that a number of companies had entered the country to play a role in quality assurance -- for example, SGS and Bureau VERITAS -- and there was a need to ensure that the SABS was involved in goods leaving the country.

Dr Bissoon said South Africa was hosting the SADCSTAN secretariat, as there was a need to lobby and build infrastructure in SADC countries and build up their capacity. He said the standards division of the SABS had been restructured. There was now a Department of Strategic Partnerships and International Relations,and a Department of Economic Impact, which analysed current trade regimes and the potential to engage with other countries. The German standards organisation, DIN, had published statistics which showed what impact standards could contribute to the economy in percentage terms.

Dr Mehlomakulu said the response of the market for the bio testing of Genetically Modified Organisms was not good. The SABS served on the board of the ISO Council.  ISO standards were arrived at on an international level and when the SABS developed a standard when there was not an international one available, this was a home grown standard. She said the governance of the different legislation and different SQAM bodies was quite fragmented, with overlaps and gaps.

Dti Briefing on product labelling and trade descriptions
Mr Clive October, Director-General of the Dti, said the briefing was in the context of the labelling issue concerning Israel/Palestine and on Genetically Modified Organisms (GMO). The Israel/Palestine labelling issue was before the Minister because South Africa used to have the Merchandise Marks Act, which was merged and became part of the Consumer Protection Act of 2006.  At issue was the country of origin/product of origin labelling requirement, because a product of Israel/Palestine had been incorrectly labelled.  It was a contentious issue, and the Minister had opened the matter up for public comment for two months till the end of July. The Department had already met with the Jewish Board of Deputies.

Mr Macdonald Netshitenzhe, Chief Director of Policy and Legislation in the Dti, said that complaints from the clothing and textile industry and unions had led to product labelling requirements which clearly detailed the country of origin, as clothing had been dumped in South Africa with labels falsely denoting it had been made in South Africa or had been sent via Malawi - which had preferential trade status with South Africa - where labels were stitched on. He said Section 24 of the Consumer Protection Act contained all the relevant repealed parts of the Merchandising Marks Act which had previously governed this aspect. The Israel/ Palestine labelling issue was thus within the ambit of the laws of the country.

Mr Andisa Potwana, Director of Consumer and Competition Law and Policy in the Dti, said the Act was administered by the Department of Agriculture and Forestry and Fisheries (DAFF). The dti’s role was that of lead department in informing the consumer. Approved GMO products were maize, cotton, canola oil and soya. There were regulations to indicate that the contents of foods contained GMO. GMO was defined as “an organism, the genes or genetic material which has been modified in a way that does not occur naturally through mating or natural recombination, or both”.

 

There was a need to know the level of accidental GMO contamination. It had researched GMO regulations and benchmarking. For labelling purposes, less than one percent of accidental contamination was regarded as food with no GMO. Foods with up to 5% contamination might be labelled GMO and foods above 5% GMO had to be labelled as containing GMO.  If GMO was one component of the food, then the food had to be labelled. These referred to the four approved GMO products mentioned above. Those companies which wanted to claim their products as GMO free had to have it tested at their own expense. The law was in recognition of peoples’ right to be informed. It had sent the legislation to the World Trade Organisation (WTO) for comment regarding trade barriers, but had received no response.

Discussion
Mr W James (DA) said that GMO was the way of the future and had the potential to impact on the quality of the food. It also had an impact on the micro environment, with downstream consequences on irrigation and water usage. In addition it had the potential to displace labour, as GMO’s would reduce the need for labour through the increased mechanisation of farming.

Mr Mabasa asked what the perceived advantages and dangers of GMO were. How were emerging farmers benefiting from GMO?

Adv Alberts said there was the potential for developing monopolies within farming which would affect food security. He said that from an international law perspective, South African law recognised Palestine on the basis of the 1948 borders. The matter was significant in that it would set a policy precedent, as there were other countries with similar situations -- for example, Tibet, Taiwan and Mauritania.

Mr October said there was consensus that much more consumer awareness of GMO was needed and that different departments had to take responsibility for different aspects. He said the GMO issue was not as adversarial as in other countries. On the issue of Israel, he said the Department was in consultation with the Minister of International Relations and that the issue had to be dealt with sensitively, as it had implications in international law and politics. Whatever decision was arrived at would have to be consistent to stand as a policy for other areas too.

Mr Radebe said the Economic Development Department had to be included and that other countries must never be allowed to dictate South Africa’s policies.

Committee’s Annual Work Plan for 2012/13
The Committee’s updated strategic plan and annual performance plan was adopted. Members of the cooperatives subcommittee were Mr Hill-Lewis (DA) and Mr Selau (ANC), with the chairperson being Mr Mabasa.

The meeting was adjourned.

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