Agrément South Africa Bill [B3-2015]: Department & Deputy Minister response to submissions

Public Works and Infrastructure

12 May 2015
Chairperson: Mr B Martins (ANC)
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Meeting Summary

The Department of Public Works (DPW) went through the various comments and inputs that were received from the general public, professionals in the engineering field, the Mayor of the City of Cape Town, the Department itself and from the Office of the Chief State Law Advisor.

These comments included recommendations on the change of the title of the Bill, the role of Agrément South Africa (ASA), the use of the term ‘value for money’, the powers of Agrément relating to the acquisition and disposal of immovable assets, the offence under clause 7(5) be expanded to include entities, the three year fixed validity period, performance agreements of the Chief Executive Officer, the regulation of specific areas by the Minister, the marketing of products by ASA and the development of the language policy.

The main responses by the Department were that a name change is a strong possibility as many people do not understand the term ‘Agrément’ however reference to the term Agrément cannot be severed in its entirety as it still has international connections to it. The term ‘value for money’ was removed as there was no suitable alternative word for it and keeping it might open ASA up to legal action. The areas of regulation by the Minister were not specified as it would limit the power of the Minister and specifying all the areas could make run the risk of an area being omitted. ASA does not market the products as it is their role is to certify non standardised products. The language policy has been developed and this is currently seeking approval.

Meeting report

Mr Devan Pillay, Chief Director: Construction Policy for the Department of Public (DPW), indicated that when the draft Bill was put out for public comment, only a total of thirteen comments were received from organizations and individuals. These comments mainly revolved around technical issues on the drafting, which to a large extent has been dealt with, some were clarity seeking and these have all been responded to. The comments made by the Chief State Law Advisor were all addressed and he agreed on the final version. Comments were received from the Department of Higher Education, the Office of the Executive Mayor of the City of Cape Town, the Board of Agrément, Ikhaya Futurehouse Systems, United Fibre Cement, South African National Road Agency (SANRAL), the State Law Advisor of the Western Cape and from professionals, Mr Johan Luyt, Ms Mariola Saar, Mr Fred Weber, Mr Sbongiseni Ngcobo, Mr David Campbell and the Office of Chief State Law Advisor (OCSLA). The comments received and being discussed today are those made to the previous version of the Bill. In the revised Bill, changes were made and certain sections were removed and therefore some references to clauses do not correlate such as the reference to clause 15. Mr Pillay took the Committee through the comments on clause by clause basis.

The Department of Higher Education commented on the name of the Bill as they said that the title of the Bill has the potential for creating confusion as the word “Agrément” is not an English word and may be subject to various interpretations, or even misconstrued when coming across it for the first time. The short title is a critical element of the Act and should be couched in such a way that it gives a clear message of the general content of the Act by being specific to the purpose, objective and scope of the Act.

Mr Pillay said that the name ‘Agrément’ would be kept as the brand is well known in Africa and globally by associations and international federations. An English word would not replace the word in the title ‘Agrément’ as a result of this and legislative drafting rules do not require the title to be only in English, as it may be in any other language .In addition it should not be changed because of the value attached to the name. The short title will also reflect the name of the entity.

Clause 1: Definition
Ms Patricia De Lille; Executive Mayor City of Cape Town, commented that the definition for ‘non-standardised construction related products’ is vague and undermines the purpose of the Bill and suggested that clarity and detail on which kinds of products will be assessed by Agrément South Africa (ASA) will add distinctive meaning to this definition and the Bill.

Mr Pillay said that in the construction industry there are a plethora of materials and systems that could be regulated. The Department is of the view that they do not want to regulate every single product or system and it was decided that those systems and products that are to be regulated will be mentioned separately in the regulations and not mentioned directly in the Bill. Clause 4 (definition for non-standardised construction related products) will be moved to the Definitions clause (clause 1) and the definition of non-standardised construction related products must be read with the definition for construction related product system. The range of products to be assessed will be determined.

The Office of the Chief State Law Advisor (OCSLA) commented on the definition of a ‘competent person’ and noted the insertion of the definitions of ‘competent persons’ and ‘organ of state’ and is of the view that the definitions appear to be in order.

Mr Pillay said that the definition of a ‘competent person’ has been included in the Bill and defines it as “a person who is qualified by virtue of his or her experience or training”.

Section 5(a)
The Agrément South Africa Board felt that the term ‘value for money’ was very subjective.

Mr Pillay said that the term ‘value for money’ comes from the current Agrément documentation and it is maintained in the Bill. The Bill correctly indicated that it does not have the competence to determine ‘value for money’. After further investigation the general understanding of ‘value for money’ is interpreted as what is cheaper that what is in the market. However, in certain situations this may not be the case as some products may be slightly more expensive but can be erected more quickly. As a result of this, the department has decided to remove the term ‘value for money’. ASA does not have the expertise to determine value for money and value for money is determined by the user. ASA will provide the information and the user will determine if it is value for money.

Clause 6(1)(e): Powers and duties
The Executive Mayor of the City of Cape Town commented on the role of Agrément in marketing certified construction related products.

Mr Pillay said that the role of Agrément is to certify products that are developed by the market place. Agrément cannot play a role in marketing any certified products or system because doing so would give that product a competitive edge over the other products. The marketing of the product is the responsibility of the manufacturer or developer of the product. It is maintained that Agrément will create an enabling environment whereby the product or systems can be marketed by the producers or developers thereof but Agrément cannot market any of these specific products or systems.

Clause 6(1)(c): Powers and duties
Ms Mariola Saar, a professional engineer, commented that in linking on an international level, emphasis should also be placed on mutual benefits and cost saving from the knowledge sharing and eliminating repetitions of the same test and duplications of assessments.

Mr Pillay said that reciprocal relations are not practical for the Bill. The reciprocal relationship exists on an international level and all the international agreements organisations have signed. Therefore it was not necessary to include it in the Bill.

Clause 6(3)
The State Law Advisor of the Western Cape commented on the powers of Agrément relating to the acquisition and disposal of immovable assets.

Mr Pillay said that this clause on the powers of Agrément has been moved in the Bill and has been addressed under clause 5(3), which has been further refined by removing “ownership in” under 5(3)(a).

Clause 6(5)
Mr Johan Luyt, a security consultant, commented mainly on security, health and safety issues and not directly to issues Agrément is dealing with. He commented that pages and items should be numbered in terms of SABS ISO9000.

Mr Pillay said that this was noted but was not applicable to the Agrément Bill.

Clause 7
The State Law Advisor of the Western Cape recommended that the offence under clause 7(5) be expanded to include entities.

Mr Pillay said that the Interpretation Act defines a person to include any company incorporated and in common law a person includes a legal person which in turn includes a legal entity.

Ikhaya Futurehouse Systems asked for comment on the proposed three-year validity of Agrément Certificate and what that would involve for certificate holders in terms of fees and recertification process every three years.

Mr Pillay said that the certification will be valid for three years and it has been agreed that the Bill maintains the status quo. This is based on global best practice.

Clause 7 and 8
Ms Mariola Saar commented on clauses 7(3) and 8 on the three-year ‘fixed’ validity period and making amendments to that when appropriate. Also on the “changes in the National Standard” standardization link subsection (3)(c), she asked why this link while dealing with non-standardized products/systems.

Mr Pillay said that while inspections are conducted annually, the three-year period is based on global best practice. On the comment on the standardized link, he said that given the holistic approach to assessments, changes to standard aspects of the system or product could influence performance of the product as a whole.

Clause 15(4)
The State Law Advisor of the Western Cape commented on investigations where the Minister of Public Works may investigate the Board of ASA. It provided various cases and points for the argument against these investigations and it requires various principles that apply.

Mr Pillay said that the Department’s Legal Unit went out and investigated the matter and points made and discovered that these comments referred mainly to the commission and not to what has been intended to be addressed in terms of an inquiry.

Mr Welcome Mokoena, DPW Assistant Director, added that the comments were not related to the issues regarding the investigations intended in the Bill. They were correctly linked to the right to privacy but not to the issues in the Bill.

Clause 17(1)
The State Law Advisor of the Western Cape noted that the Bill was incorrectly referenced in clause 17(1)

Mr Pillay said that this cross reference is incorrect and has been corrected. The reference should be clause 10(7).

Clause 18
Mr Fred Weber raised his concern that not enough clarity is given to the decision making and approval processes of the Board.

Mr Pillay said that the Board decision-making process is sufficiently covered under clause 18 and 19, while the other decision-making powers are covered by clause 6. The Department acknowledged that if there are any gaps that emerge, then these gaps can be addressed through regulations.

Clause 18(4)(d)
The State Law Advisor of the Western Cape suggested that certain sub-paragraphs become paragraphs. The department agreed with the recommendation and as a result the sub-paragraph in clause 18 was replaced with a paragraph.

Clause 21(4)
The State Law Advisor of the Western Cape commented and sought clarity on clause 21(4) about the performance agreement.

Mr Pillay said that the Department is of the view that the performance agreement will be determined by policies of the Board and by the Board itself. The performance agreement will have its own narratives on its clauses on review intervals.

Clause 22(2)
The State Law Advisor of the Western Cape advanced the argument that the remuneration for staff be in terms of the Department of Public Service and Administration (DPSA) guidelines.

Mr Pillay said that the DPSA guidelines do not apply to schedule 3(a) or schedule 2 Public Entities and therefore the remuneration packages of the staff are determined by the Board.

Clause 22(3)
Mr Edwin Kruger, Bridge Network Manager, recommended that when referring to employees of the state it should include organs of state as this would then include government entities.

Mr Pillay said that this change was noted and was effected accordingly.

Clause 24: Funding and Investments
The Executive Mayor of the City of Cape Town sought clarity on fees and whether there would be a waiver of fees.

Mr Pillay said that the fees would be determined by Agrément and would be determined on a cost recovery basis and the Bill allows for the waiver of fees under specific conditions which would be determined by Agrément through rule or regulation if need be.

Clause 24(5) and (6)
The State Law Advisor of the Western Cape referred to the issue of auditing and whether ASA will be required to be audited and if it is governed by the Public Finance Management Act (PFMA).

Mr Pillay said that the PFMA requires this to take place as ASA will be governed by the provisions of PFMA, as any other public entity would be.

Clause 27
The State Law Advisor of the Western Cape once again commented and referred to the indemnity issue of Board members. It was also recommended that any tariffs / fees provided for in the Agrément Bill must be approved by the National Treasury.

Mr Pillay said that this has been addressed and the Bill has been revised accordingly. The tariffs and fees in the Bill would be determined on a cost recovery basis and not on a profit making basis so it does not necessarily need to be approved by National Treasury.

The ASA Board requested that DPW look at beefing up section 27 of the Bill to incorporate the aspect that Agrément undertakes technical assessment of the product. Should the tests be satisfactory, the product is approved as fit for purpose if erected in accordance with the certificate. The liability of Agrément ends with the certification of the system as fit for purpose. Agrément cannot be held liable for what happens on site as that is not part of the mandate of Agrément South Africa.

Mr Pillay said that this is not a role for Agrément as it only tests the products. If the licensees use the product incorrectly, then Agrément cannot be held liable. This has been addressed in the Bill and ASA does not deal with licensees anymore but only with the product. If the product is erected incorrectly then the responsibility lies with the developer of the product. The reason for this is that the developer has to make sure that the licensees erect the product correctly as was stated in the erection process.

Clause 28
Mr Leon Bekker from the United Fibre Cement company suggested that ASA must make rules in terms of section 28 to determine the processes, procedures and forms for and relating to approval, renewal, amendment, suspension and withdrawal of an Agrément certificate.

Mr Pillay said that this was noted. The development of rules is provided for by clause 5(1)(b) as well as section 27. ASA is not empowered to approve licences.

Clause 29
The Executive Mayor of the City of Cape referred to the Minister’s powers to regulate. The argument was advanced that it was too broad and that the Minster could regulate any area.

Mr Pillay said that they did not want to mention in the Bill the specific areas that the Minster could regulate as this could limit the powers of the Minister and the areas that can be regulated.

General comments
Ikhaya Furturehouse Systems asked for more information about the status of the legal entity that is being proposed and how this will impact on interaction with licensees, specifically in terms of liability and practical day-to-day building with the system.

Mr Pillay said that this was noted and ASA would address this mater administratively.

The comment by Mr S Ngqobo does not affect the Bill as he referred to the relevant bodies.

Ms Mariola Saar argued that ASA should rather be placed under the Ministry of Science and Technology because the essence of work underlying the certification is scientific in nature (the rest is only the resultant administering).

Mr Pillay said that the most important part of Agrément is that it helps regulate new technology in the construction industry and it is the Minister of Public Works duty to regulate the construction industry. Therefore the Department is of the strong view that ASA is ideally placed under the DPW.

Mr David Campbell, a professional engineer, commented that South African Bureau of Standards (SABS) should have the right to determine if an application is already covered by an existing Standard or Code of Practice. The South African Institution of Civil Engineering (SAICE) and Consulting Engineers South Africa (CESA) should be involved by having the right to appoint members to a Guidance Committee. Technical qualifications and practical experience must be the sole criteria in appointing Agrément staff. Political affiliation or family background must not be considerations in appointing Agrément staff and that Agrément staff must make frequent, unannounced site inspections of all certificate holders.

Mr Pillay responded that this was noted as SABS already does the determination. If listed as an official voluntary association, they need to be informed of the appointment of the committee. The Appointment of ASA staff is based on recognition of required relevant qualifications and years of experience. With regard to unannounced inspections ASA makes visit as and when required to determine whether the manufacturers have been compliant as well as where the product is being used.

The Policy Branch commented mainly on drafting issues which have been given effect to.

Mr Pillay said that with regard to the comments made by the Office of Chief State Law Advisor (OCSLA) all the comments have been addressed. He then touched on the important comment raised on the collection of fees and the Bill possibly becoming a Money Bill. This was tested with National Treasury and the Chief State Law Advisor agreed that it does not form part of a Money Bill.

Mr S Masango (DA) questioned whether these inputs and comments were made on the revised Bill and whether the public would be able to give input on the items added to the revised Bill.

Mr Pillay responded that the first version of the Bill was gazetted for public comment for a period of thirty days. The comments that were accepted then became part of the revised Bill after the consultation process. The Committee had the latest version of the Bill in front of them. The only difference was that reference was made to clause 15 and should have rather been referred to as clause 14.

Mr Masango was still confused as to whether the inputs were given on the gazetted or revised Bill.

The Deputy Minister of Public, Mr Jeremy Cronin, said that the document presented now is a document reflecting all of the written comments of the public. The right hand column shows how the Department has responded to them on the earlier gazetted draft and that is why some of the paragraphs differ.

The Chairperson pointed out that the Portfolio Committee had also advertised for public comment on the Bill as introduced into Parliament via various means but had received no comments. Therefore the public had been made aware.

Mr Masango referred to the unspecified areas to be regulated by the Minister and asked how these areas would be included in the regulations in future as it is said that the Minsters powers to regulate areas should not be limited.

Mr Pillay responded by quoting from the Bill that “the Minister may regulate any ancillary or incidental administrative matter for Agrément”. DPW had tried to keep the matter of the Minister being able to regulate the environment as broad as possible so that the Minister can regulate any area that becomes problematic or non-compliant. Agrément has a host of rules that regulate things such as processes of applications and testing etc. In the event that the Minister wants to regulate any area then provision has been allowed for the Minister to do so. It is not ideal for ASA to regulate every single item that goes into the construction of a building. This would be redundant as certain things are already regulated by standards set on a national level but ASA does regulate the problematic products and that is why it was kept as broad as possible.

The Deputy Minister added that in drafting legislation one must always keep in mind the risk of over specifying. Giving long lists run the risk of omitting something and then exposing oneself to the danger of not being able to regulate what has been omitted. On the other hand, what it does say is that the Minister cannot make any regulation under the sun but must be that “the Minister may regulate any ancillary or incidental administrative matter for Agrément” in clause 29 which means that it must be within the legal bounds.

Mr Masango then referred to the term ‘value for money’ which is very subjective and asked if it has been removed completely or if it has been replaced by another word.

The Chairperson said that a rejoinder might be needed on the issue of the regulating of areas.

Mr Pillay responded to the question posed by Mr Masango and said that the term ‘value for money’ was removed and not replaced as there was no proper term that could be used. Using the term ‘value for money’ was a concern as it could expose ASA to legal action and it was thus removed

Mr K Sithole (IFP) said that DPW’s response about changing the name of the Bill is debatable. Saying that “there is too much value attached to the name” is not a good enough reason.

Mr Pillay responded that the department at one point was of the view that a name change was needed and that it should indigenise the subtitle of it. If the Committee strongly feels the need to change then it can be done if there is a suitable name for it.

Mr Sithole asked for clarity on the fees and questioned the lack of involvement of the Minister in this as it stated that the fees would be determined by the Board.

Mr Pillay responded that the fee Agrément would charge would be determined on a cost recovery basis and this is thought of as an administrative function that could be dealt with by the administration of Agrément who would then advise the Agrément Board as to what the fees should be. The Department was of the opinion that the Minister does not have to play a direct role in that regard. However the Minister is represented on the Agrément Board by DPW representatives. If there is a strong view by the Minister with regard to the fees then that can be done. The Department’s concern about fees was that if you have persons that do not have sufficient capital or cash flow to have the product tested, then what happens if it is a good product? Therefore the department has allowed for Agrément to reduce the fee or not charge a fee at all; but that would have to be determined by Agrément through a particular process.

Ms D Mathebe (ANC) said she does not know what the role of ASA is and questioned the possible conflict of interest where ASA certifies the products and markets it for the developer.

Mr Pillay responded that amongst other things the role of Agrément is to certify non- standardized construction material, systems and products. Agrément tests the products to determine if it will do what it says it will do. The role is only limited to testing as the product is commercial and some companies and organisations will be making a profit off the product. If Agrément were to market the product on behalf of the developer, then it would be giving that product an unfair competitive edge over similar products in the market and may expose Agrément to various forms of action thereafter. It is up to the developers to market their own products or systems.

Ms P Adams (ANC), speaking in Afrikaans, referred to a comment made by the OCSLA on clause 10 about the language policy and sought clarity on the response by the Department that “the Department has not adopted the language policy yet; therefore provisions of section 6(3) of the Constitution were adopted”.

The Chairperson repeated what Ms Adams said, noting the question was why the Department has not complied with the constitutional provision in utilising the eleven official languages of South Africa.

Mr Pillay responded that at the time when comments were being received, the Department’s Communication Unit was drafting a language policy and it has been consulting on it more recently. It should be approved very soon or might have already been approved. This will be confirmed with the Department.

The Deputy Minister added that the Department has been slow to develop a language policy, as is required by all departments, but the response made does not address the concern. In the gazetted edition of the Bill on page 15 of the document , it uses a clumsy set of wording and what has now been said is that “two official languages must be used” which corresponds directly to the Constitution

Mr Masango asked whether annual financial statements will be given. He said there was a difference between consultation and submissions when it comes to the Bill. Consultation is done with reference to various bodies and submissions are done with regard to all others.

Mr Pillay responded that ASA is a schedule three Public Entity and therefore has to comply with the requirements set out by the PFMA. In that regard, it would have to have a Chief Financial Officer, it will have to be audited annually and therefore it will have to produce an annual financial report.

Ms E Masehela (ANC) asked whether there are any specific reasons for the three-year certification period.

Mr Pillay responded that the three-year certification period is based on international best practice because after every three years the product is reassessed to determine if it complies with environmental, health and safety issues.

Mr Joe Odhiambo, ASA CEO, added that the criteria are based on national standards, therefore it is actually three years subject to the national standards changes in legislation. The three-year period is taken from the international best practice from the World Federation of Technical Organizations as it is believed that a product is good for three years but a comprehensive review must be done after three years to determine if it is still performing as per the original certification.

The Chairperson then asked for input from the parliamentary legal advisor.

Mr Gary Rhoda, parliamentary legal advisor, responded that it is a very technical Bill and from a legal point of view, the Bill introduced in Parliament has no problems. The draft Bill that was gazetted and the comments thereto were addressed. The DPW responses and the responses by the Committee will then revolve around policy issues which are their domain to argue about; but from a legal stand point it is 100 percent in order.

Mr Masango made a brief statement that the Minister should be limited when it comes to regulating certain areas and said that it was mentioned in a previous meeting on Agrément’s strategic plan.

The Chairperson clarified by saying that ASA cannot be a “referee and a player”.

Mr Masango agreed with Mr Sithole on changing the name of the Bill as many people including himself have never come across the term or understood it at first glance. He suggested that a name change would be good as South Africans should get a name which all of us understand.

The Deputy Minister agreed with the Chairperson that ASA cannot be a certifier and a marketer. However, ‘Agrément’ should be marketed certainly by the DPW and a name change could help so that it makes sense to people in South Africa particularly. The general principles of an Agrément type entity need to be marketed so that the creation of innovative products, materials and systems can be encouraged within the construction industry. Agrément is known internationally but not locally and this provides a political opportunity with this Bill to give Agrément a better profile. He likes the idea of a possible name change or a change to a double-barrel name. Another suggestion from the Ministry is that we do not want to lose the reference to Agrément entirely because of its international connections and networks but at the same time it is a too technical and strange name. Therefore common ground between the two competing aspects should be found in the deliberations to come.

The Chairperson said the next time the Committee meets, it will go through the Bill clause by clause. He then adjourned the meeting.

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