South African Bureau of Standards Strategic Plan 2013

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Trade and Industry

15 April 2013
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

The South African Bureau of Standards (SABS) said that prior to 2008 it oversaw the development of national standards, tested and certified products and performed a regulatory function. Since 2008 however, when the Standards Act No 8 of 2008 came into force, it was mandated to only deal with South African National Standards (SANS) and to promote quality through the certification of products via the SABS mark and to render conformity assessment services.  The 2008 Act resulted in a difficult transformation period for the organisation which coincided with a lack of capacity within the organisation.

South Africa needed to develop its own standards capacity to inform the agenda it wanted to drive. The SABS developed a five year strategy plan to evolve as a service organisation, setting a target of attaining R1 billion in turnover by 2016. It had sought to increase the use of the standards service, to increase customer stakeholder relationships, to increase operational efficiency and effectiveness and to develop and train a competent workforce. It had targeted and seen growth of 15 % for 2011/12 and 2012/13 and expected the Auditor General's findings to be above 80 % for meeting its performance targets. The divisions would be realigned as they had developed too much of an administrative bias. In its new strategy, standards had to be relevant with regard to government policy imperatives. SABS was asking government to align its actions with its policy by ensuring that goods procured by it were certified by the SABS. Its strategic focus would be to upgrade the laboratories, the IT and the equipment and use its revenue growth to maintain infrastructure like laboratories. The risks facing the SABS were industrial action, a loss of personnel and a loss of customers.

Members asked for more detail on the strike by the SABS workers. They wanted affirmation that independent testing and compliance monitoring was occurring, and were concerned that SABS laboratories were underutilised. They asked for more information on this.

Members asked if the SABS had a program to promote their services to the country. How could SMMEs and cooperatives access the SABS given their lack of funding? How did the SABS impact on the three spheres of government? Members asked how long it took to certify a product. There was concern that foreign-based companies were testing gambling machines instead of and not the SABS. Had there been instances of the SABS stamp being abused and have they stopped it? Where were discussions surrounding clause R999 which had not been included in the Act

Members asked what enforcement tools the SABS had with regard to their mandate. Members asked if the SABS were helping Southern African Development Community (SADC) countries on standardisation. What was the name of the union that went on strike? Why had the minerals and metallurgy contribution to the SABS declined?  Members were concerned by the ‘black spots’ in fruit exports to the EU. What was the impact of people leaving the employ of the SABS? They requested a breakdown of the income.  

Meeting report

Briefing by South African Bureau of Standards
Dr Boni Mehlomakulu, Chief Executive Officer (CEO), South African Bureau of Standards (SABS), said that prior to 2008 SABS had overseen the development of national standards, tested and certified products and performed a regulatory function. Since 2008, when the Standards Act No. 8 of 2008 came into force, it was mandated to deal only with South African National Standards (SANS); to promote quality through the certification of products with the SABS mark; and to render conformity assessments services.  The 2008 Act resulted in a difficult transition period for the organisation which coincided with a lack of capacity within the organisation.

Developed countries were still the drivers of standards for their own ends and South Africa needed to develop its own capacity which could inform the agenda that it wanted to drive. In South Arica standards had been driven by industry. The SABS had embarked on a realignment of its divisions as 67 percent of them had been of an administrative nature. The SABS was the only South African organisation linked to the International Organisation for Standardisation (ISO) and maintained over 6500 standards. In its new strategy standards had to be relevant with regard to government policy imperatives. SABS was training companies on standards at its training centre. The training was also relevant for Small, Medium and Micro Enterprises (SMMEs) to allow them to understand the relevance of standards within a supply chain. SABS asked government to align its actions with its policy by ensuring that procurement goods were certified by them.

SABS planned to use revenue growth to maintain infrastructure, for example, laboratories. It had done benchmarking using India and Brazil and found that in India, imported products needed to be tested while South Africa was very open, which raised the issue of the quality of imports. This situation arose because clause R999 had not been included in the Act of 2008. Fruit and vegetable exports to the European Union (EU) had to be tested and a register had to be kept for the EU. SABS also tested the material used in army and police garments, Reconstruction and Development Programme (RDP) houses, medicines and medical devices and toys.

The SABS had developed a five year strategy plan to evolve as a service organisation, setting a target of attaining R1 billion in turnover by 2016. The strategy allowed for change of management in the human resource division, information technology division and laboratories. It was working on growing revenue by focusing on big companies like Eskom and Massmart. Between 2010/11 and 2011/12 there was two percent growth despite the strike action at the National Regulator for Compulsory Specifications (NRCS) which had spread to the SABS and resulted in the Auditor-General’s Office noting that it had attained only 50 % of its performance targets. It had sought to increase the use of the standards service, to increase customer stakeholder relationships, to increase operational efficiency and effectiveness and to develop and train a competent workforce. It had targeted and seen growth of 15 % for 2011/12 and 2012/13 and expected the Auditor General's findings to be above 80 % for meeting its performance targets. Its strategic focus would be to upgrade the laboratories, the IT and the equipment.

Regarding the meat cases raised in the media recently, the SABS did not have Deoxyribonucleic acid (DNA) testing equipment. The SABS was meeting with Massmart that week because the company was starting to develop its own standards so that its suppliers could comply. However, a company could not be both a player and a referee so there was a need for a neutral body.

Mrs Elis Lefteris, Chief Financial Officer (CFO), SABS, said that the growth in revenue came from increased certification and testing. The risks facing the SABS were industrial action, a loss of personnel and a loss of customers.

Discussion
The Chairperson asked for clarification of the comment on the strike by the NRCS workers which had resulted in SABS workers going on strike.

Mr W James (DA) wanted affirmation that independent testing and compliance monitoring was occurring. He asked this in the context of a case where foreign protein in chicken was being tested by an academic while there was a need for credible independent testing and a need for laboratories to be able to do genetic tests for genetically modified organism (GMO) testing purposes. He wanted to know why the SABS laboratories were underutilised. What equipment did the SABS have? What volume of work did it have? What growth in laboratory testing could be expected?

Mr X Mabaso (ANC) asked if the SABS had a program to promote their services to the country. How could SMMEs and cooperatives access the SABS given their lack of funding? How did the SABS impact on the three spheres of government?

Mr N Gcwabaza (ANC) asked how long it took to certify a product. Why were foreign-based companies and not the SABS testing gambling machines? How safe were perfumes and tablets sold on the street? Had there been instances of the SABS stamp being abused and had this been stopped? How far had discussions on clause R999 of the Act come? If people claimed they had a cure for cancer did they approach the SABS?

Mr G Selau (ANC) asked what enforcement tools the SABS had with regard to their mandate.

Mr G Mackintosh (COPE) asked if the SABS were helping Southern African Development Community (SADC) countries with standardisation. What was the name of the union that went on strike? Why had the minerals and metallurgy contribution to the SABS declined? What was the meaning of the acronyms LIMS, MDWT and the terms Da Vinci and Harvard in the context of the presentation.

The Chairperson said the issue of the ‘black spot’ in connection with fruit exports was of concern as the EU wanted to ban exports from the particular farm and even the district, despite their own scientists saying that it was not a threat. What was the impact of the people leaving SABS? He requested a breakdown of the income.

Dr Mehlomakulu responded that prior to 2008 the SABS and the NRCS were one institution. In 2002 remuneration changed from a benefits system to a cost-to-company package. The National Education, Health and Allied Workers' Union (NEHAWU) was part of negotiations and agreed to the change. Employees however, felt that it was difficult to keep track of changes to their benefits such as housing allowances. When the NRCS was established as an independent body its remuneration package reverted to the old style where the benefits were separate. In negotiations with its own workers, the SABS faced the chief negotiator for the NRCS workers who represented the SABS workers as the workers of both organisations belonged to NEHAWU.

The SABS mark was given because of the continuous testing and sampling done on products and included random spot checks. An external body checked the SABS reports in an accreditation process. One of government’s priority areas had been bio-technology, yet no money had trickled down to the SABS for testing. The SABS had decided to be proactive and had bought instruments to test GMO foods but there was no market for this service and the legislation was not there to back up the testing. The NRCS was the regulatory body; it dealt with compulsory standards which had to comply with regulations. The SABS dealt with clients who sought voluntary certification. Prior to 2008 the SABS did everything and there was still confusion in the market as to what SABS’s role was.

Mr James raised the case of the brining of chicken which had occurred the previous year and where the Department of Trade and Industry (DTI) had said that the regulatory framework was a mess, with three departments, namely the Departments of Agriculture, Health and Trade and Industry, being involved. It was important to have a stable regulatory framework.

Dr Mehlomakulu said that the SABS could not act because the SABS was not the regulator. The SABS added value and was a service provider. The SABS could only act if the NRCS asked it to do testing.

Ms Jodi Scholtz, Chief Operations Officer, DTI, said that the Minister had established a committee comprising the DTI and the Department of Agriculture and its report was due in June. The National Consumer Council had raised the issue of cross contamination and more acute testing parameters. All organisations had to be part of the task team.

Dr Mehlomakulu said that engagements with consumers was a gap the SABS had identified but that they wanted to fix the mess within the organisation first before embarking on a higher public profile. Assistance to SMMEs did not include assistance for standardisation. She felt the DTI should have a dedicated fund for SMMEs. The SABS could not force their services on the three spheres of government, it could only sell and promote the value it could add.

Medicines were the ambit of the Medicine Controls Council (MCC) and the Department of Health. However, SABS could test the products for trace metals, for example in support of the MCC. SABS did subsidise testing to indicate whether there were traces of metals in traditional medicines as many Africans still took traditional medicine.

She said that 75 % of its revenue was external and 25 % was in the form of government grants.

Mrs Lefteris added that the 75 % external revenue came from certification, which accounted for 60 %, and testing, which accounted for 40 %.  The certification could be split into three main categories: chemical and electro-technical, which accounted for 30 % each; and mechanical, which accounted for 20 %. Mining and metallurgy’s share of the first two categories had decreased from about 30 % to 15 % in both.

Dr Mehlomakulu said that if there was no compulsory regulation on gambling machines then there was no requirement that it be tested. Similarly, the SABS was not being used to test the grade of coal ore exported from Richards Bay. Foreign-based testing companies like Technischer Überwachungsverein Köln (TÜV) were being used. TÜV had even been used by Eskom and Transnet. In Eskom’s case, TÜV approved boilers for a power station in a process that had been flawed. In all these cases there was the potential for the country to lose out. The SABS had spoken to the Director General who would write a letter to the Department of Public Enterprises (DPE) encouraging the use of the SABS.

The SABS mark was subject to intellectual property infringement and it had established a division to investigate infringements and to serve claims against those that violated the SABS rights. It would take perpetrators to court and fight a legal battle.

SABS was engaging with NRCS on the unintended consequences of the legislative instruments but was not making progress. The matter had been taken up with the Minister. Local suppliers were trading at a disadvantage to foreign-based companies as the legislation was incumbent on them but not on the foreign-based companies. Certification was done through conformity assessments to test and verify. The SABS needed to improve and sell its own services.

The SABS funded SADC Cooperation in Standardisation (SADCSTAN), the regional body for standards, and also hosted the secretariat.

Mrs Lefteris said the SABS had undertaken an analysis of its laboratories to identify any limitations which needed to be addressed and to increase the turnaround speed the laboratories operated at. LIMS stood for Laboratory Information Management System which was IT system capturing information all along the process to the stage where test reports were issued and invoices printed. This would reduce turnaround times. MDWT stood for Mission Directed Work Teams which concerned process flow in the organisation and the management of it. Da Vinci and Harvard were leadership training programs, with Harvard being a low cost online training program.
 
Dr Mehlomakulu said a Cape company had developed a way to remove the black spots on fruit using nuclear isotopes but the EU still maintained their standards saying that the spots indicated a concentration of ethylene which would cause the fruit to rot quicker. There was a need to link standards with areas of academic research

The meeting was adjourned.

 

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