Legal Metrology Bill [B34-2013]: Department's response to submissions at public hearings; Budgetary Review and Recommendations Report

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Trade, Industry and Competition

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

The Department of Trade and Industry (dti) gave its responses to the submissions made at the public hearings on the Legal Metrology Bill (the Bill) on 15 October 2013. A brief history of the legislation an systems was given and it was noted that Trade Metrology was the entirety of the legislative, administrative and technical procedures established by the Trade Metrology Act and Regulations, which were intended to specify and ensure appropriate measurement of quality, and credibility of measurements related to trade transactions. Legal Metrology was the entirety of the legislative, administrative and technical procedures established by or reference to public authorities, which were implemented on their behalf, to specify and appropriate quality and credibility of measurements related to official controls, trade, health, safety and the environment.

Public hearings had been held on the Bill on the previous day, and the dti presented some preliminary responses, although some of the questions would have to stand over for more detailed responses. Two matters of principle, one relating to the impact of the Bill on the health industry, and the second to possible shortage of staff and resources at the National Regulator for Compulsory Specifications (NCRS) were clarified and it was noted that the Bill would set up a new funding mechanism for the NCRS. In relation to definitions, two suggestions were made, with which the dti agreed, on the definition of a measuring instrument. The dti did not agree with the proposals on the definition of a person responsible for repairs, but did amend the definition by referring separately to sections 10 and 27. It was clarified that “a person” meant “an individual”. Comments were then given on the specific problems or queries under specific clauses. The dti did not agree, in relation to clause 4, that there was the potential of conflict of interest, and explained the issue of market failure. Clause 6 did not set out a new function, as suggested in the public submissions, and dti said that there would not be duplication. In relation to clause 9, dti said that all repairers should be required to register so that NRCS would have control over fly-by-night repairers. It did not agree with submissions proposed on clause 10, and believed it was important to register the person, who should know that the instrument must be compliant with certain requirements. It was clarified, in relation to clause 11, that only manufacturers and importers or retailers should be registered, not every product. It was clarified, on clause 13 that fees were derived from services rendered. In relation to clause 33 concerns had been expressed about possible conflict with other legislation, but dti noted that the issues would be covered by regulation and was reluctant to name any other legislation in the main Act. Dti noted the support of bodies on section 11 of the NRCS Act, and on the new Forum.

The dti then commented on questions asked by the Parliamentary Legal Advisers, giving a clause-by-clause answer on the questions and comments raised, and the Parliamentary Legal Advisers noted their satisfaction with that response. Some clauses were being referred to the Office of the Chief State Law Adviser, who was also asked to comment, and who responded that the matters probably had to do more with questions of wording than of principle. The Chairperson asked that the drafters should sit down together and attempt to reach finality on clauses 20(2)(b) and (c), clause 21, which the dti wanted to look at again, and clauses 33 and 34 . It was suggested that the answer to clause 36 be deferred pending a further meeting with the Technical Adviser at the NRCS. The dti agreed with the Parliamentary Legal Advisers questions on clause 41. The Office of the Chief State Law Adviser had also been asked to deal with clause 42, and the possible conflict with labour legislation. The Chief State Law Adviser also mentioned clause 5, which was not on that list, and said that there had been agreement reached to exclude the Minister’s power from the delegation. The Chairperson noted that she had been concerned with the suggestions that parts of the Bill were vague or broad, and wanted that to be addressed.

Members raised concerns or comments about the penalties, the possible conflict of interest, and how the NRCS would try to service rural areas. A Member asked that the drafters check whether “interest” or “interests” were being referred to. A question would be raised on how pixels were measured. SABS was asked to explain why there were concerns around market failure and Members suggested that if private/public partnerships were needed, they should be effected. The question of prices and the range was also raised.

Members approved minutes of Committee meetings in August and September, and considered and proposed a few changes to the first draft of the Budgetary Review and Recommendation Report, which would be resumed on Thursday 17 October.
 

Meeting report

Legal Metrology Bill 2013, Responses from the Department of Trade and Industry on submissions raised at public hearings of 15 October
Dr Tshenge Demana, Chief Director: Technical Infrastructure, Department of Trade and Industry, gave the preliminary response of the Department of Trade and Industry (dti or the Department) to same of the issues raised during the public submissions on the Legal Metrology Bill (the Bill). Some of the responses would require a little more time.

He outlined the history of Trade Metrology in South Africa. The weights and measures system of Trade Metrology dated back to 1902, in the Johannesburg Municipality, when the functions were dealt with under the auspices of the Department of Trade and Industry. The functions were transferred to the South African Bureau of Standards (SABS) in 1991. In 2008 Legal Metrology became the responsibility of the National Regulator for Compulsory Specifications (NRCS) and there was a dedicated Division within the NRCS responsible for Trade/Legal Metrology.

Trade Metrology (weights and measures) was the entirety of the legislative, administrative and technical procedures established by the Trade Metrology Act and Regulations. These were implemented in order to specify and ensure, in a regulatory or contractual manner, the appropriate quality and credibility of measurements related to trade transactions, where a measuring instrument was the basis for transactions. The presentation highlighted examples - which included the sale of pre-packed goods where scales or volume measuring instruments were, such as maize meal, beer and milk. Sale of petrol was handled by liquid fuel dispensers. Other things that needed to be measured were sales in front of customers, such as weighing of fresh fruit and biltong.

Legal Metrology, on the other hand, was the entirety of the legislative, administrative and technical procedures established by or reference to public authorities, which were implemented on their behalf, in order to specify and ensure, in a regulatory or contractual manner, the appropriate quality and credibility of measurements related to official controls, trade, health, safety and the environment.

The first response was in response to ITG, who had asked the Department to clarify to what extent the Bill impacted on the health industry. The response was that legal metrology technical regulation referred to health measurements of products like blood pressure monitors and thermometers. The Act applied to pre-packaged medicines such as cough mixtures, bandages and dressing which already had to comply with labelling and accuracy requirements.

The second comment, by Klerkscale, had been concerned with understaffing and resources. Klerkscale suggested that the NRCS was understaffed and under resourced to enforce existing legislation. It did not have the necessary inspection facilities to ensure legal compliance. The dti responded that it acknowledged the concerns of industry regarding the staffing and funding of the NRCS. The NRCS was established in 2008, so it is was still growing and there was room for expansion. This Bill provided for a new financing model which would put the NRCS in a position to fulfil its mandate much better.

The NWA and SASCO commented on the definition of measuring instrument. They said that the definition should include software-measuring instruments, and said that this would mean, firstly, meant any appliance, equipment, instrument, software or apparatus - or any combination - by means of which a measurement of physical quantity, expressed in any measurement unit or a mathematical function of measurement unit could be made. Secondly, they suggested that this should also include any appliance, equipment, instrument, software or apparatus -or any combination -by means of which a grading or a counting by means of gravitation could be effected. Dti agreed with that and said that the definition could be changed.

Another submission had commented on the issue of the definition of person responsible for repairs, and suggested that the definition should be amended to “any person that repairs a measuring instrument in accordance with the provisions of section 9,10 and 27”. The dti did not agree that there was any need to reference section 9. However, it would propose that the definition be amended by referring to any person registered in terms of section 10, to repair a measuring instrument in terms of section 27.

JVPS had asked whether “a person” referred to an individual or an organisation. He noted that this would refer to individuals, since the organisations were designated as “repair bodies”.

Dr Demana noted specific comments on clauses were given and he would now respond to these.

Clause 4
The South African Council of the Scale Industry (SACS) was concerned with Clause 4, which had to do with the functions of the National Regulator. It was suggested that the NRCS, as a regulator, should not be involved in verifying measuring instruments, as this could result in conflict of interest. It should rather focus on supervising laboratories and end users in the industry, to ensure improved levels of service to the public. It suggested clarifying some wording from clause 4(1)(f) and verifying measuring measurements from clause 4(2) (d).

Dr Demana said that dti did not agree. There was market failure in terms of small and distant rural towns, as well as where industry did not serve a certain scope, such as tot measures. The Department encouraged the industry to service the market fully. NRCS fees were not market related and were agreed to by verification bodies on an annual basis and this would be strengthened to address the concerns above.

Clause 6
SACS commented on clause 6, which had to do with the appointment of market surveillance inspectors. It had said that the new function could be very dangerous, as the people appointed by the Chief Executive Officer of the NRCS could be related, or even have an interest with the party or function it should inspect. The completed function and purpose of the section should be re-negotiated to avoid a conflict of interest, or the disclosure of sensitive information or records to competitors.

Dti responded that it was not a new function, as it talked to the appointment of NRCS staff as market survey inspectors. Provision was also made to appoint another organ of state in order to not duplicate market surveillance where it already existed; for example electricity meters are inspected by NERSA.

Clause 9
AS had commented on clause 9, which talked about the designation or repair bodies. It said it was unclear why all repair bodies would be designated by the Chief Executive Officer.

Dti’s response was that it had decided that all repairers should register so that the NRCS had control over rogue and fly-by-nights repairers, who repaired measuring instruments without following the rules, such as the obliteration of the verification mark. This could happen in the registration process. It must also be borne in mind that the definition of repairs excluded repairs that did not change the meteorological integrity of the measuring instruments.

Clause 10
The AS commented on clause 10, which had to do with the registration of persons responsible for repairs, and proposed some changes. The suggestions on clause 10(1) said that the Chief Executive Officer may, in the prescribed manner, register any person who had the prescribed competencies and who wished to issue a guarantee as provided for in section 27(2)(b), as a person responsible for repairs of any particular kind in accordance with this Act. The suggestions on clause 10(2) were that the Chief Executive Officer must furnish a person registered under subsection (1) with a certificate stating that such person may undertake repairs in terms of this Act.

The Dti did not agree with this submission. Dti believed said that it was more important to register the person, as he or she should know that he or she should leave the instrument complying with all types approved requirements, and not fit unapproved components which would not be picked up during the verification process.

Clause11
Woolworths and SAGI commented about clause 11, which had to do with the registration of certain importers, manufacturers and persons who offered for sale any instrument, product or service. The submissions said that the proposal to register all products would place an administrative burden on retailers, as their systems were not geared for this. Any related costs would also negatively impact on consumers. Dti responded that only the manufacturers and importers or retailers should be registered, and not every product, as the submission had incorrectly implied.

Clause 12
SANCU had commented on clause 12, saying that the establishment of an Advisory Forum by the Minister would provide a major improvement. Consumer interest would be adequately and directly represented in the Forum.

The Department of Trade and Industry agreed with this.

Clause 13
Tiger commented on clause 13, which was concerned with the funds of the National Regulator in respect of legal metrology. Tiger wanted clarity on sub-section (1)(c), on the envisaged services and fees that were provided. The dti responded that the fees were already derived from services rendered.

Clause 33
SAGI commented on clause 33, which had to do with measurement for the prescribed purpose to be effected in terms of certain measuring units, and by means of verified measuring instruments. SAGI said that sub-clause (1) made it an offence to make an incorrect statement, for example on a diagram or general plan for the sale of land. However, if the tolerances set in subclause (2) differed from those allowed in the Land Survey Act (which were specifically higher than those in the Land Survey Act), then this would compromise the functioning of the property system.

Dti responded that these kinds of issues would be dealt with by regulation. It was hesitant to actually make mention of other specific Acts such as the Land Survey Act.

Other issues
SANCU also commented on the amendment of section 11 of the NRCS Act, saying that specialist committees could provide good independent advice on a number of serious issues facing the NRCS that significantly impacted on consumers.

The Department of Trade and Industry agreed.

Comments from Parliamentary Legal Advisers
The presentation also highlighted feedback to comments that were made by the Parliamentary Legal Advisers. With regards to the Long title and clause 15, questions were raised about the regulations. The Department agreed that there were two types of regulations, technical and administrative. The regulations references were in fact to administrative regulations. However, legal metrology technical regulations referred to requirements for a particular kind of instrument.

The Parliamentary Legal Advisers also raised queries on clause 3, and asked what “the control of the Minister” meant. Dti responded that here, it was referring to the executive authority over the National Regulator, who administered the Act.

In relation to clause 4, which spoke to the functions abroad, dti clarified that these were functions specific to the legal metrology field. The Department also said the powers being referred to were in the Act.

Comments on clause 5 were being deferred to the meeting on Friday, because this required some extra drafting.

In relation to clause 8, the Department agreed that sub clause (2) should contain similar wording with respect to the competence requirements. 

In relation to clause 12, it had been asked what the “balance of interest” meant. Dr Demana said that this meant a fair representation of all stakeholders on the advisory forum, for example, manufacturers, importers, consumers and labour.

In regard to clause 13, he clarified that the recommendations referred to in clause 13(2) would come from the National Regulator.

In relation to clause 15, the dti agreed with the Parliamentary Legal Advisers that the consultation process could be prescribed in the Bill, and that it was going to be amended.

Questions had been asked around clause 18, which spoke to who would do the construction and the powers of market surveillance inspectors. Dti now clarified that the NRCS and its personnel would do the construction, and that powers of market surveillance inspectors were set out in the specific portion of the legislation dealing with them in particular.

Clause 20(2)(b) and (c) had been referred to the Chief State Law Advisers, who would respond on the issues raised.

Dr Demana agreed that dti would have another look at Clause 21 again.

Clause 26 related to instruments that appeared to be broken, and whether the NRCS would have to be consulted before that instrument was disposed of. Dti responded that this was not necessary; the instrument would be regarded as broken and would no longer be used for a prescribed purpose.

Dr Demana further clarified that in clause 26, which related to intentional removal of the mark, the removal of the mark meant that the instrument was no longer being used.

Dti would be referring clauses 33 and 34 also to the Office of the Chief State Law Adviser. In relation to clause 34, it was intended and objective, and was intended to include all eventualities. If there was no measurement taking place, there would not be a reason to prescribe a measuring unit.

Dti wanted to defer the answer to clause 36 because the Department wanted to go back and meet with the Technical Advisor at NRCS.

The Chairperson said that the Department was not giving the Committee the answers that it wanted at this point.

In relation to clause 37, the Department had responded to the concerns whether there were any other type of criteria by saying that there were not; there had already been clarification.

The Chairperson said that, as it stood, the Bill seemed to have some element of confusion.

Dr Demana noted that clause 38 used the words “container” and “vessel”, an this had been questioned. Dti responded that these words were different because of the way they were used in the legislation. A “vessel” referred to something like a pressure vessel.

Parliamentary Legal Advisers had made some suggestions on clause 41, and the dti agreed with those suggestions. It suggested that evidence could be subpoanead, in terms of any law, or as evidence in any court of law, or on a court order. However, the Chief State Law Advisers would elaborate further on that point.

A question had been raised whether clause 42 was contrary to the Labour Relations Act. Dti said that it understood where the problem lay, and would align the clause with the Labour Relations Act. The State Law Advisors would also elaborate further on this.

Dr Demana then elaborated on Schedule 2 and questions. He said that clause 6(1) had to be aligned with the Labour Relations Act. In relation to Clause 6(2) he clarified that a person could be appointed for two terms of 5 years, with a maximum of 10 years. The dti believed that clause 6(3)(c), which dealt with alignment, was fine as it stood.

In relation to clause 11(3)(a), the Department agreed that the requirements of 11(4)(b)(i) should be included in 11(3)(a).

In relation to clause 11(5) the Department still agreed with the Legal Adviser, and the same applied to clause 11(6)(c).

The dti agreed with comment on clause 11(7)(a) and suggested that 11(7)(a) should refer to “and any personal and financial interest”. Following on that, it had also agreed to change clause 11(9) to read “who has personal and financial interest”. The numbering on clause 11(9) would have to be corrected.

In relation to clause 12(1), Dr Demana clarified that the dti had wanted a fair representation of all stakeholders on the advisory forum for example manufacturers, importers, consumers and labours. In relation to clause 12 (2) he reiterated that the Department said that there was reference to two forums, the advisory and technical forums.

Matters to be discussed on the following Friday would include separation of repair and verification functions and related clauses, and the offences and penalties.

Comment from Office of the Chief State Law Adviser
At this point the Chairperson noted that the dti had managed to answer a fair number of questions, but asked Mr Gideon Hoon, Principal State Law Advisor, Office of the Chief State Law Adviser (OCSLA), if he could explain the clauses that were referred to the OCSLA.

Mr Hoon said that he wanted to speak to clause 5, although this was not on the list. There had been an agreement reached to exclude the Minister’s power from the delegation.

Mr Hoon thought the main problem with clause 20 lay in the wording, and said that the drafters would meet to correct that wording.

Mr Hoon thought that the problems with clause 21 could partially be explained by looking to clause 29, but he agreed that the drafters would look at this again.

The Chairperson asked Mr Hoon if he had been able to meet with the Parliamentary Legal Advisers and, if not, suggested that they must meet. She emphasised that everyone in the room was busy and that there was a strict deadline. She said there was no room to keep postponing the deliberations.

Mr Hoon said that clause 33 was also around sentence construction. He said that he and the Parliamentary Legal Advisors would try to come up with a better construction on the sentence.

The Chairperson suggested that perhaps Mr G Hill-Lewis (DA) could also help with the construction She asked the Parliamentary Legal Advisor if her questions had been answered..

Ms Charmaine van der Merwe, Parliamentary Legal Advisor, said she had worked through the responses from the Department of Trade and Industry, and was satisfied with the explanations and answers.

The Chairperson said there were many instances in which the words “broad” and “vague” were raised in criticism of the legislation, and this worried her. This was a complex issue, and the process had posed problems to both the technical representatives and legal representatives.

Discussion

Mr G McIntosh (COPE) asked about the penalties, noting that there was  a maximum penalty, but that he personally did not have any problem with that penalty.

Dr W James (DA) wanted clarity on clause 4, where the Department did not agree with SABS on the issue of the National Regulator. He asked for clarification on the issue of a possible conflict of interest, and why the Department did not agree on that point.

Dr Demana responded that the rural areas were not being served well. There was market failure. If industry could cover the whole country, there would be no need for the regulator. There could be an issue of competition between the industry and regulator, because the regulator did not charge more than industry.

Mr Jaco Marneweck, Senior Manager: Inspections, NRCS added that the NRCS, as regulator, would try to service those areas that were not served.

Dr James asked about the response to Woolworths, concerning the registration of products, not of the institution, and again called for clarity on that point.

Mr Marneweck responded by saying the intention of the legislation was not to register all products, but the point was to register market players.

Mr McIntosh said that it was important to clarify whether “interest” or “interests” were being referred to.

Mr McIntosh was not satisfied that the Committee had dealt with the most important problem, and he would be asking for more response on this, on the following Friday. This was a complicated Bill. He said that  all geometrics were covered by satellites, for example in KwaZulu Natal, and that a camera had pixels, and surely a pixel had to be measured.

Dr James now understood what the Department was saying on market failure, but said that now it meant that the state has a greater role to play, which would mean that extra resources and staff would be required, and he was worried where those would be found.

Mr Werner Barnard, Committee Member, SACS, said that market failure was a sensitive issue. The problem was that NRCS was suggesting that SACS was not doing its work, but it was saying that it was doing both that, and more. Dti had 26 regulators and there was a lot of work to be done. It would be much better if regulators concentrated on regulating. He suggested that there needed to be more clarity on the function of the regulator.

Dr James suggested that if there was need for a public private partnership, then that should be done, if it would make matters clearer and better

Mr Barnard said that petrol pumps were scattered across the country. There were shops right the way to every border and there \183 laboratories.

The Chairperson asked Mr Barnard if the private sector had enough people to handle this.

Mr Barnard said that there were not enough people in the private sector either. The number of verificators was, however, higher than the number that NRCS had.

The Chairperson said that if charges were raised, those who would complain more were the private sector. She asked Mr Barnard if he was saying that in the current structure, the private sector was unable to service the whole population; the Committee already knew the position of government so she wanted him to concentrate on the private sector.

 Mr Barnard said that the private sector was a higher number, and the price range was about the same. He said that another issue with rural areas was also lack of knowledge. He added that it would not be cost effective to go and service one person in the rural areas.

The Chairperson said that this had given the Committee some food for thought. There was a need to educate people out there. She appreciated the feedback from SACS.

Mr Gareth Strachan, Deputy Director General, Department of Trade and Industry, thanked the dti staff for preparing this presentation overnight.  He assured the Committee that the Department would come back on Friday with a more detailed presentation.

The Chairperson said that the Committee was now reaching the point where the Committee Members would have to start making contributions, which was part of its oversight function. She wanted to get all other input by Friday, so that the Committee could deliberate as soon as possible.

Adoption of Committee Minutes
The Chairperson asked the Committee to consider the minutes of previous Committee minutes.

The following minutes were adopted, after having been considered, proposed and seconded:
-28 August
-10 September
-11 September
-12 September
-19 September
-20 September

Budgetary Review and Recommendations Report: First draft
The Chairperson tabled the first draft of the Budgetary Review and Recommendations Report (BRRR)

Members pointed out some errors in wording and sentence construction and wanted those changed by the time that the Committee met again on the following Thursday.

The meeting was adjourned.
 

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