National Regulator for Compulsory Specifications (NRCS) on economic priorities

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Meeting Summary

The National Regulator for Compulsory Specifications (NRCS) briefed the Committee on its role in promoting coordinated and accelerated implementation of government’s economic vision and priorities.

The NRCS explained that its mandate was to promote health, safety and environmental protection through the development and enforcement of technical/compulsory specifications. The NRCS regulated the automotive; the chemicals, materials and mechanicals; the electro-technical; food & associated; legal metrology and building regulations industries. The focus of the NRCS’ strategy was on source inspections ie the point of entry or manufacture. The idea was to lock out non-compliant products before the products entered the point of trade. The Committee was provided with statistics speaking to the NRCS’ performance highlights for 2017/18. On non-compliance the NRCS had removed sub-standard products to the value of R259m from entering the South African market.

Members observed that there were quite a number of institutions in SA that dealt with the quality of products. Members consequently felt that there needed to be guidelines on what each of the institutions needed to do. Was there perhaps a overlapping of functions of these institutions? The NRCS was asked how it took its mandate to general stakeholders or to the public at large. An ordinary person perhaps wished to lodge a complaint about a defective product. Members had not heard or seen the NRCS on radio or on television. What methods had the NRCS used on outreach? The NRCS was also asked how many outreach efforts were made and which areas had been covered. The Chairperson stated that the Committee was unhappy with the awareness issue of the NRCS but it did not mean that the Committee felt that the NRCS was not doing its job. There was concern that people were losing their lives because of faulty paraffin stoves. The NRCS had to do more on outreach. Did the NRCS do outreach in rural areas? Had the NRCS together with municipalities offered workshops? On pre-market approvals members asked the NRCS what importers were required to do in order to be issued with letters of authority. Would the importer be required to submit a sample of the product to the NRCS? Members were concerned that importers might submit a good sample of the product for testing but when the consignment reached the South African market the actual product would be sub-standard. The NRCS was asked how it certified products. Did the NRCS have its own experts such as engineers in-house or was the function outsourced? Members also asked with which community economic forums in Africa had the NRCS worked with. Members had observed that spaza shops owned by foreign nationals sold products that were unknown to the South African public. The products did not even have South African bar codes on them. How did the NRCS inspect these products? Members reiterated that the NRCS had to be known in order for the public to lodge complaints. The NRCS was asked to do a rethink of its efforts on the regulation of plastic bags as it was still a challenge. Rivers and dams were still heavily polluted with plastic bags. If the NRCS was not tasked with dealing with counterfeit goods members asked the DTI to look into the matter. Members were hugely concerned about cheap quality bread being sold at spaza shops. The bread in question did not get mouldy and when submerged in water took on the properties of a sponge. It was after all the vulnerable poor that were consuming the bread. The DTI too was asked to look into the matter. Members stated that complaints around the quality of Max condoms had been received. The South African Bureau of Standards (SABS) when asked about the condoms by the Committee had responded that it was not approved by them. Was the NRCS aware of the matter? Even though members appreciated the statistics provided on the number of inspections done members would have liked insight into what the outcomes of inspections had been. It would have given the Committee insight into what the compliance of those involved were. To this end the Chairperson asked the NRCS to in writing provide the Committee with ten instances of inspections that had been successful and ten where challenges were faced. What number of inspections was done in provinces? The NRCS was asked whether its inspectors had played a role on the matter of the safety concerns around the Ford Kuga Sports Utility Vehicle (SUV). The NRCS was further asked why no specifics were provided on its role in contributing towards the outcomes of the National Development Plan (NDP) and on the Industrial Policy Action Plan (IPAP). Concerns were raised around the sale of fake products like cigarettes being sold in SA. Members asked what interventions the NRCS had in terms of the National Building Regulations and Building Standards Act. The matter was raised because there were concerns that standards of Reconstruction and Development Plan (RDP) houses were bad. Members had also received complaints about electricity meters not being up to standard. Did the NRCS look at the standards of meters used by municipalities? On self compliance the NRCS was asked whether it had Memorandums of Understanding (MOUs) with any other retail shops/companies other than Shoprite/Checkers. The Committee requested a copy of the MOU. What had the NRCS done thus far to promote fair trade?

Meeting report

Briefing by the National Regulator for Compulsory Specifications (NRCS)
Mr Edward Mamadise, Chief Executive Officer (CEO), NRCS, explained that the entity was established as a separate entity of the Department of Trade and Industry (DTI) in 2008. The enity’s mandate was to promote health, safety and environmental protection through the development and enforcement of technical/compulsory specifications.

The NRCS regulated the automotive; the chemicals, materials and mechanicals; the electro-technical; food & associated; legal metrology and building regulations industries. The NRCS aligned its work to Outcome 4: decent employment through inclusive growth and Outcome 11: create a better SA and contribute to a better and safer Africa and world as reflected in the National Development Plan (NDP) and with the Industrial Policy Action Plan (IPAP) in areas of amongst others energy and water efficient household appliances and strengthening South African technical infrastructure to support industrial development.

The NRCS’ strategy enablers included trade facilitation by locking out non-compliant products; reducing regulatory costs by using information technology and by collaborating with the South African Revenue Service (SARS), the South African Bureau of Standards (SABS), the Department of Agriculture, Fisheries and Forestry, the National Consumer Council (NCC), the Department of Health, the South African Police Services (SAPS) and the Department of Home Affairs. The focus of the NRCS strategy was on source inspections ie the point of entry or manufacture. The idea was to lock out non-compliant products before the products entered the point of trade. The NRCS also embarked on premarket approvals to improve efficiency. It included the granting of letters of authority to enable products to be sold on the South African market.

The Committee was provided with statistics speaking to the NRCS’ performance highlights for 2017/18. The NRCS had conducted a total of 48 835 inspections. 81% of all letters of authority, homologation and type applications were processed within 120 calendar days and 77% of all gaming approval applications were processed within 30 calendar days. On non-compliance the NRCS had removed sub-standard products to the value of R259m from entering the South African market.
  
Discussion
Mr W Faber (DA, Northern Cape) pointed out that the week before the Department of Trade and Industry (DTI) had briefed the Committee on the Tripartite Free Trade Area (TFTA) Agreement and they had looked at the standard of products. It was mentioned that Grandpa Headache Powders were sub standard. Was it not the job of the Medical Board to test medication? There were so many institutions dealing with quality. There was the South African Bureau of Standards (SABS), the NRCS etc. He felt that there needed to be guidelines on what each should do. Was there an overlapping of functions?

Ms Thandi Phele, Acting Deputy Director General: Industrial Development Division, DTI, said that the NRCS was seen as one of the structures in technical infrastructure. When manufacturers produced a product it had to meet technical specifications. Imported products had to meet technical specifications. The issue was about how to create a system for free movement of goods in terms of the TFTA across countries. It was about harmonising the system to improve market access. Employment could only be created if manufacturing capability was sustained.  

Mr Mamadise stated that there was no overlapping with other regulators. The issue was more about fragmentation. The NRCS was a regulator and the SABS was not. The mandate of the NRCS was not about the quality of products but rather about, amongst other things, safety and health. South African citizens had to be protected.

Mr L Magwebu (DA, Eastern Cape), on the NRCS informing and educating stakeholders about itself (slide 9), asked how it took its mandate to general stakeholders or to the public at large. There could be instances when the ordinary man wished to report a defective product. He had not seen the NRCS’ awareness programmes on television or heard anything on radio. Slide 16 spoke about inspections being done and pre-market approvals of products that persons wished to bring into the South African market taking place. If the NRCS issued a letter of authority on pre-market approvals to allow a product to be brought into SA he asked what were importers required to do to get the letter of authority. Were importers required to bring the product to the NRCS? He was concerned that importers for instance could bring a good sample of water to the NRCS and when the actual product was imported it could be of a lesser quality. He had seen on social media that a tin marked as pilchards actually contained baked beans. He also asked how the NRCS certified products. Did the NRCS have its own engineers/experts in-house? Was I t outsourced? The NRCS spoke about R259m in value of non compliant goods being prevented from coming onto the South African market. If the goods managed to make it onto the South African market would the amount be a loss to SA.

Mr Mamadise, on stakeholder engagements, said that there was a strategy in place that had been approved. Consumer awareness workshops were also run. There was a complaints procedure in place where complaints on non-compliant products could be lodged. The NRCS did not regulate each and every product. The NRCS provided compulsory standards for specific goods. Members of the public could submit a request if they felt that a product was harmful. The NRCS could perform risk and feasibility assessments. The Minister of Trade and Industry, Dr Rob Davies, was passionate about the safety of paraffin stoves as many paraffin stoves were the cause of fires in townships and informal settlements. The NRCS collaborated with the Department of Cooperative Governance and Traditional Affairs (DCOGTA) and the Department of Environmental Affairs (DEA) on outreach programmes around the safety of products. Where the NRCS issued a letter of authority it made sure that it was not fooled by the golden product sample. After a letter of authority had been granted the NRCS did random inspections, sampling and testing. On the process around the letter of authority, the NRCS as a regulator had a conformity assessment policy. Samples were taken and tests were done by accredited labs. He stated that on foods the risk was negligible.  The NRCS had inspectors stationed at manufacturing plants to inspect each batch produced. Follow up inspections were also done. The letter of authority assisted the importer to get a smooth facilitation of goods at border posts. He noted counterfeit goods sold at spaza shops were not regulated by the NRCS. The Counterfeit Act was regulated by the South African Police Services (SAPS). If products that the NRCS did regulate were sub standard then it would intervene. There was a task team to deal with sub standard goods. In such instances the NRCS involved the National Consumer Council (NCC), the SAPS and customs authorities. Plans were being made to do raids on unscrupulous spaza shops and retailers as some of the products sold fell under those regulated by the NRCS. On whether the NRCS had in-house experts or outsourced he responded that the NRCS had a team of professionals. The NRCS compartmentalised itself in sectors. For instance in the automotive sector the NRCS had good experts such as engineers. So yes the NRCS had internal expertise. The NRCS however did not do testing itself. The NRCS relied on other infrastructure entities like the SABS. The NRCS did use accredited laboratories. He confirmed that the R259m was the value of sub standard goods that had been removed from the market. Non-compliant products were unsafe and were cheaply made. Selling them would push proper products out of the market.

Mr M Mhlanga (ANC, Mpumalanga) asked with which economic community forums in Africa the NRCS networked with. What methods did the NRCS use on community outreach? He also asked how many outreach efforts were made and which areas were covered. He noted that there was a huge emergence of spaza shops owned by foreigners and most of the products sold were unknown to the South African public. The products did not have South African barcodes on them. How did the NRCS inspect these products?

Mr Mamadise said that the NRCS’ regulation was risk based. It did not regulate all products that could be found in spaza and other shops. The NRCS regulated specific products. On participation with other economic structures in Africa he stated that the NRCS focused on relevance. The NRCS identified similar bodies like itself with a common mandate. The challenge was that the NRCS operated under constrained circumstances. The NRCS targeted relevant entities.

The Chairperson stated that the Committee was unhappy about the NRCS awareness issue. The ordinary person needed to be aware of what the NRCS did. The NRCS needed to look at what more could be done on its outreach programmes. He said that people were still dying due to fires caused by faulty paraffin stoves. The NRCS could not keep a check on spaza shops all the time. The NRCS had to be known so that people themselves could lodge complaints. People needed to be educated on what the risks were. He asked what workshops were being done in cooperation with municipalities. The Committee often did oversight but had not heard about the NRCS at grassroots level. This did not however mean that the Committee felt that the NRCS was not doing its work.

Ms M Dikgale (ANC, Limpopo) referred to the regulation of plastic bags by the NRCS (slide 14). She said that the NRCS needed to do a rethink of its efforts as it was still a challenge. Dams and rivers were heavily polluted with discarded plastic bags. The NRCS had outlined its linkage with Outcomes 4 and 11 of the National Development Plan (NDP) and with areas under the Industrial Policy Action Plan (IPAP) that it was involved in (slide 14). Having said this she felt that part of the income from SA’s lottery monies should be used for the IPAP instead of all the monies going to one entity. She noted that if the NRCS did not deal with counterfeit goods then perhaps the DTI could do something about it. She was hugely concerned about the cheap bread that was being sold at spaza shops. The bread in question did not rot and when placed in water became a sponge. It was the vulnerable unemployed and the poor that were consuming the bread. Something needed to be done. The DTI was asked to look into matter. 

Ms B Mathevula (EFF, Limpopo) asked whether the NRCS educated stakeholders when it went to rural areas. How did the NRCS popularise itself and its contact details? She said that people had complained about the quality of Max condoms. She pointed out that the SABS had stated that it had not approved Max condoms. Was the NRCS aware of it?

Mr Mamadise, on outreach, conceded that there was room for improvement. The NRCS nevertheless had interventions. At present the marketing division of the NRCS was in Venda. Rural areas were covered. The NRCS would be looking at other platforms such as radio.

Dr Tshenge Demana, Chief Director: Technical Infrastructure Institutions, DTI, said that Max condoms were distributed by the Department of Health and was approved by the SABS. He added that if the condoms were used properly then they would not leak. Max condoms were approved and were fine.

Mr M Rayi (ANC, Eastern Cape) responded to Mr Faber’s statement about the Grandpa Headache Powder and said that not all Grandpa Headache Powders were sub standard. The presenter had used it as an example of substandard goods that had come into SA. He was glad that the NRCS had clarified its mandate or else Members would have been under the mistaken belief that the NRCS regulated quality. He noted that it was sometimes difficult to differentiate between safety and quality. Sometimes they were inter-related. He would have appreciated if not only numbers had been provided in inspections done but also what the outcomes of inspections were. It would have given the Committee insight into what the compliance of those involved were. He pointed out that in 2017 the safety of the Ford Kuga Sports Utility Vehicle (SUV) was called in question. Did NRCS inspectors play a role over the issue? Even though the briefing had spoken about the NRCS playing a role in the outcomes of the NDP and around involvement on the IPAP but no specifics were given.

Mr Mamadise stated that the NRCS did not regulate Grandpa Headache Powders. He added that the Legal Metrology Act did have a medical regulatory part. There was also a health and environmental regulatory part. On the outcome of inspections he said that the National Regulator for Compulsory Specifications Act that empowered the NRCS gave it the power to deal with non-compliant products. The NRCS had the power to give a directive for non-compliant products to be destroyed, sent back to its country of origin or be removed from the South African market by its owner. On the Ford Kuga issue, the NRCS homologated motor vehicles: this meant to grant approval. The NRCS looked at the safety and critical components of motor vehicles. He pointed out that the Ford Kuga had a faulty coolant system. The faulty coolant system did not fall into the categories of either safety or critical components and hence did not fall within the mandate of the NRCS. SA did not have the capacity to test motor vehicles. SA’s standards were not up to international standards. He said that SA had not adopted all UP29 regulations. The NRCS intended to review its motor vehicle homologation regulations.

Dr Demana stated that on quality and standards there were a great deal of overlap. There were three areas of focus. The first was that measurements that were used had to be the same the world over. There was the National Metrology Institute. Secondly minimum requirements had to be met. In order to ensure this the SABS, academics and all interested groups got together to set minimum requirements. There was a conformity assessment. The assessment was overseen by the South African Accreditation System to ensure that labs were able to do the tests that were required. The third area of focus was on regulators of which there were many. The Department of Health regulated medicines. If Grandpa Headache Powder was approved by the Medical Control Council then it was okay. The system was all encompassing.

The Chairperson responded that it was not always true that if something was sold then it had been approved. The Grandpa Headache Powders spoken about was fake. There were also fake cigarettes sold all over SA. The cigarettes were sold at R10 per packet and were manufactured in SA.

The Chairperson, on inspections done, asked that the NRCS provide the Committee with ten examples of inspections that had been successful and ten where challenges were faced. These should be in writing. The mandate of the NRCS was amongst others derived from the National Building Regulations and Building Standards Act which was under review. What interventions did the NRCS have in terms of the Act? The concern was that standards of Reconstruction and Development Plan (RDP) houses were bad. The NRCS was also involved in ensuring that appliances were energy efficient (slide 12). He stated that complaints had been received about electricity meters not being up to standard. The NRCS was asked whether it looked at the standards of meters that were being used by municipalities. There was also self compliance by Shoprite/Checkers by virtue of a Memorandum of Understanding (MOU) that it had with the NRCS in which Shoprite/Checkers undertook not to sell sub standard goods (slide 16). Were there any other retail chains/companies that the NRCS had an MOU with? The NRCS was asked to provide the Committee with a copy of the MOU. If part of the vision of the NRCS was to ensure fair trade what had it done as far as initiatives to promote fair trade?

Mr Mamadise undertook to provide the Committee in writing with examples of outcomes of inspections as requested. On the National Building Regulations and Building Standards Act, the mandate of the NRCS was to deal with review cases of municipalities. The constitutional court declared sections of the National Building Regulations and Building Standards Act as unconstitutional and hence the NRCS could no longer act as a review body. The implementation of the National Building Regulations and Building Standards Act was by municipalities when it dealt with the construction of buildings and their plans. He said that the Legal Metrology Act covered electricity meters. To date there was no compulsory standard for electricity meters. The MOU with Shoprite/Checkers would be made available to the Committee. The MOU was completed at the end of 2017. The aim of self compliance was to encourage self regulation. The MOU with Shoprite/Checkers was a pilot and there were no other MOUs with any other companies. Once lessons were learnt from the MOU then it could be extended to other companies. The fair trade element came in to level the playing field. The NRCS did not wish for substandard products to compete with regulated products in the market.   

Dr Demara said that the DTI with stakeholders was working on the review of the National Building Regulations and Building Standards Act. The provisions of the Act were problematic and legal opinions differed. He said that some of the RDP houses that had been built did not conform to standards.  

Mr Mhlanga said that he had asked the NRCS a question around what SADC structures they were networking with on quality compliance. 

Ms Meisie Katz, General Manager, NRCS, on SADC structures, said that the NRCS participated on harmonisation of technical regulation. 

The Chairperson said that the issue of fake goods sold at spaza shops needed to be addressed. The contact details of the NRCS should be given to people so that complaints could be lodged. Loan companies were also lying about supposed interest rates of 5%. The DTI was taking the matter up with the National Credit Regulator (NCR). On electricity meters approval of new TPPs was imminent. There was a need to ensure that users were not exploited. People complained that new meters ran faster than older meters.

Mr Mhlanga asked what number of inspections was done in provinces.

Committee Minutes
Minutes dated 20 June 2018 was adopted as amended and minutes dated 8 August 2018 was adopted unamended.    

The Committee also briefly discussed the process around how it was to deal with Memorandums of Agreement that had been forwarded to it by the House Chairperson.

The meeting was adjourned.
 

 

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