SABS 2023/24 Annual Performance Plan
Trade, Industry and Competition
02 May 2023
Chairperson: Ms J Hermans (ANC)
Meeting Summary
South African Bureau of Standards (SABS);
The Portfolio Committee on Trade, Industry and Competition met on a virtual platform to receive a briefing from the South African Bureau of Standards on its 2023/24 budget, Strategic and Annual Performance Plans.
The Committee was informed that the rolling corporate plan for the South African Bureau of Standards was built on the Bureau turnaround plan and focussed on various programmes aligned to the legislative mandate of the organisation, while supporting the policy initiatives and output targets as defined by the shareholder, the Department of Trade, Industry and Competition. An important component of the corporate plan was to conclude the transition to the new structure and implement the operating model as a matter of priority. Financial sustainability remained an important pillar of the organisation and that would be dependent on the effective roll-out of critical organisational programmes and projects. Initiatives that were expected to project the Bureau towards a path of sustainability included enhancing customer focus whilst driving operational excellence; supporting the African Continental Free Trade Area through thought leadership and active participation in regional and international standardisation programmes; developing and implementing a digital transformation strategy; prioritised infrastructure maintenance and ramping up of the Local Content Verification programme. The Bureau was aligned to the Department's 45 Output Targets and had an extensive list of predetermined objectives for 2023/24. The budgeted income for the financial year 2023/24 was R826 million. The Bureau expected to invest in infrastructure and digitisation utilising a budget of R431.1 million over the medium-term expenditure framework period. The investment included a R130.4 million allocation from the Department of Trade, Industry and Competition which had been earmarked for ageing testing infrastructure over the three-year period. Although much progress had been made, the Bureau recognised that it faced many challenges in the year ahead.
Members asked how management would rate the South African Bureau of Standards turnaround plan on a scale of one to ten. Could the financial instability be resolved by rationalising the Bureau of Standards and the National Regulator for Compulsory Specifications? If the South African Bureau of Standards had such a huge footprint across South Africa, why did profit companies go elsewhere for testing? Was it a question of the cost implications, or was it a case of efficiency? Was the Bureau competitive? Could the Bureau check if a privately tested product were of an appropriate standard? Why was the income indicator of customer satisfaction not measured for the financial year 2022/23?
Members asked what progress had been made in developing regional standards and conformity assessment guidelines according to the African Continental Free Trade Area agreement. What programme did the Bureau have in place to ensure that it conducted an outreach programme to deep rural areas? Had there been an attempt to standardise the hemp and cannabis sectors? Were there challenges with the organised labour sector? What was the situation in terms of standards for clean or green energy and the ocean economy? How much support was given to small, medium and micro businesses?
Meeting report
Opening Remarks
The Chairperson welcomed the Department of Trade, Industry and Competition (DTIC) and its entity, the South African Bureau of Standards (SABS), which would brief the Committee on its 2023/24 Strategic and Annual Performance Plan.
Presentation by the South African Bureau of Standards
Dr Nimrod Zalk, Acting Deputy Director-General: Industrial Competitiveness and Growth and Industrial Development Advisor, dtic, introduced the dtic officials and the Acting CEO of SABS, Dr Bissoon, who would make the presentation.
Dr Sadhvir Bissoon, Acting CEO, SABS, introduced three members of the SABS management teams: Lizo Makele, Human Capital Executive, Lungela Ntobongwana, COO, and Ms Lerato Matras, Acting CFO. He also welcomed the Chairperson of the SABS board which was appointed in December 2022.
The SABS board consisted of eight members, including the chairperson. The board had been very active in setting up governance structures and had set up three sub-committees: Audit and Risk Committee; Human Capital, Social and Ethics Committee; Finance, Investment and Strategy Committee.
Dr Bissoon informed the Committee that the CFO had resigned a month and a half earlier and the post had been advertised. Ms Matras, Chief Financial Manager, was acting in the post. The advertisements for CEO closed two weeks previously and the applications were being considered.
SABS maintained over 7 400 South African National Standards (SANS), the largest pool of accredited management system auditors in Southern Africa. SABS had 33 testing laboratories with technical experts and technical signatories operating to SANS and including adoptions of ISO and IEC International standards. All laboratories were accredited by the SA National Accreditation System (SANAS).
The rolling corporate plan was built on the current Bureau turnaround plan and focussed on various programmes aligned to the legislative mandate of the organisation, while supporting the policy initiatives and output targets as defined by the shareholder, the Department of Trade, Industry and Competition. An important component of the corporate plan was to conclude the transition to the new structure and implement the operating model as a matter of priority Financial sustainability remained an important pillar of the organisation and that would be dependent on the effective rollout of critical organisational programmes and projects. The alignment and delivery of products and services in support of the dtic reimagined industrial priority sectors was a standardisation contribution by SABS, as per its mandate. In addition, certain initiatives expected to project SABS towards a path of sustainability were: enhancing customer focus whilst driving operational excellence; supporting the AfCFTA (African Continental Free Trade Area) through thought leadership and active participation in regional and international standardisation programmes; developing and implementing a digital transformation strategy; prioritised infrastructure maintenance and ramping up of the Local Content Verification programme.
SABS was aligned to the dtic’s 45 Output Targets in investment, industrial production, export and trade, jobs, industrial support, transformation, energy, green economy, red tape and state capability, stakeholder engagement and impacts, addressing crime, improving the capacity and responsiveness of the state and social partnership. The Acting CEO provided an extensive list of predetermined objectives for 2023/24, including outcomes and targets.
SABS had plans for capital expenditure. SABS expected to invest in infrastructure and digitisation
utilising a budget of R431.1 million over the MTEF period. The investment included a R130.4 million (R150 million including VAT) allocation from the dtic earmarked for ageing testing infrastructure over the three-year period.
(See Presentation)
The Chairperson invited the chairperson of the board, Dr Malinga, to comment.
Dr Sandile Malinga thanked the Chairperson. He stated that the SABS was facing many challenges.
Discussion
Mr D Macpherson (DA) said it remained apparent and had been for many years, that SABS was just unable to compete financially, and possibly technically, with the private sector. One of the biggest mistakes was separating the SABS and the NRCS. It had been a topic of discussion and Ms Jodi Scholtz (former Administrator of SABS) had said that SABS and the NRCS were looking into how they could rationalise the two bodies. Was there any further progress on that, in either rationalising the two or even just shutting down the SABS to simply make the licenses available for testing, more of a compliance body rather than the actual testing body?
Mr D Bergman (DA) was quite interested to find out why, if SABS had such a huge footprint across South Africa, profit companies went elsewhere for testing. Was it the cost implications, or was it a case of efficiency? And if that was not it, then it sounded to him that there was a possibility that SABS standards might be too high. If one went to the private sector, was one able to get a certification on a substandard product? Was there an enforcement side of SABS which could check if a product were not of an appropriate standard and, in such a case, test that product and see whether that product had been correctly tested? Secondly, he had been the Treasurer of SADC at one stage and he had a keen interest in SADC so when he heard that services were going across the borders, he had been interested to hear that SABS was extending its reach. But of course, with the African Continental Free Trade Area (AfCFTA) trade agreement, SA had to look very carefully at the message being sent out. SA was looking at its trade agreements, and trade shows with other partners mentioned in that programme. It would be important, given the current climate, for the SABS to network with some of those countries through the embassies beforehand, just to make sure that SABS was sending out the right message on a technical basis first. And when it came to SADC, he knew that SA was definitely open for business. It would be foolish to try and get the African Union to oversee a whole standard when one could start with a pilot at the SADC level. He would be watching with interest.
Mr W Thring (ACDP) asked how Dr Bissoon would rate the SABS turnaround plan on a scale of one to 10. Secondly, slide 18 on the predetermined targets showed that the income indicator for the customer satisfaction survey was not measured for the financial year 2022/23. Why was that? Thirdly, what progress had been made in the development and implementation of the AfCFTA trade agreements in developing regional standards and conformity assessment guidelines?
Mr C Malematja (ANC) was happy with the manner in which SABS had improved the presentation. It was informative, decisive and promising. Services had improved from the previous report and unlike other institutes, SABS seemed to have a plan in place for appointing a CEO. What programme did SABS have in place to ensure that it conducted an outreach programme to let those who wanted to be in the market know that SABS was able to meet them and assist them so that standardisation would not be a barrier when they wanted to do business with other entities and in order to give hope to the user by putting a SABS stamp on a product, guaranteeing the quality of the product.
Mr S Mbuyane (ANC) welcomed the presentation by SABS and also the new chairperson of the board, Mr Malinga. The presentation showed that a ton of strategies had been implemented in the SABS and that local content verification had improved from a turnaround time of 120 days to 90 days. He asked about promoting quality with respect to commodities, vis-à-vis the black industrialists and also the transformation programme and the five outcomes indicated. Had there been an attempt to standardise the hemp and cannabis sector? About energy management, one had to be patient. He was concerned about the inadequate investment in the laboratory centre and the facility infrastructure. During oversight, the Committee had seen that the pipe reticulation network was not up to standard. Were there challenges in SABS’ engagement with the organised labour sector? How was the ICT modernisation and dissemination project progressing? Could he get an update? Lastly, SABS had been talking about transformation in terms of standards for clean or green energy and the ocean economy. What was the situation there?
Mr F Mulder (FF+) expressed concern regarding competitiveness. When the Committee recently visited Seoul and Busan in South Korea, Members looked at testing and quality control. He asked if the SABS used business models that were in touch with modern tendencies and trends. In 2019, at the beginning of the Sixth Parliament, he had asked if SABS was still sustainable; now the Committee should ask if SABS was competitive. Could it still compete? Was it not time to take a new look at the whole business model, even though there were signs of a turnaround, which was good in itself? It was time that South Africa became as competitive in that field as the country used to be. SABS was once a world-class organisation.
Mr Monakedi asked about support for SMMEs. The indication in the slides was that SABS spent R24.3 million in procurement in support of SMMEs. What did that translate into percentage-wise?
Dr Zalk commented on high-level issues raised before handing over to Dr Bissoon for some of the more technical questions. One set of questions was around the role of SABS and the private sector. One needed to understand the system as one in which SABS was complimentary to the activities of private sector parts of the economy and infrastructural issues. Obviously, the absolutely fundamental role that SABS played was the development of national standards and that could not be outsourced to the private sector for obvious reasons. The question on testing was one of the complementarities. So, there were testing capabilities that SABS had and there were also testing capabilities that the private sector had, but the key question was really about the appropriate balance between the type of testing that SABS did and what was done elsewhere in a technologically more sophisticated world where it was necessary to have sophisticated capabilities to test in an increasing number of complex areas.
Dr Zalk said that the second area was around the role of SABS in relation to regional integration and the African Continental Free Trade Area agreement. And again, the other quality infrastructure institutions had exceptionally important roles to play because there needed to be, as far as possible, an alignment of standards on the continent. There were some risks and concerns from a South African perspective but also huge opportunities. The opportunities related to the kind of economies of scale that one could get from standards being common across countries. Just one example that was often raised by the retail sector was that sometimes the retailers needed to comply with different labelling standards and different kinds of barcode standards. So significant reductions in transaction costs could be reaped by ensuring that there was greater alignment across the continent. Another important element was obviously that one did not want common standards that compromised consumer health and safety. So it was not about having some kind of race to the bottom, but rather about appropriate standards that could be adopted across multiple countries.
Dr Bissoon complemented some of the observations and comments made by Dr Zalk. He responded to Mr Macpherson on the issue of SABS being unable to compete with the private sector. That issue needed to be addressed from a SABS sustainability perspective. SABS was a significant brand in the marketplace, first and foremost, in the development of national standards. That was the core mandate of SABS. So if anything, the primary focus on developing national standards would not change. There was only one entity in every country that was responsible for the development of national standards. So SABS had a legacy of conformity assessments. SABS had operated historically in two different eras and that was very important to appreciate. In pre-1994, everything had to be SABS-approved because of the type of economy and the type of ecosystem that operated at the time. In post-1994 with free markets and everything readily available, and a lot of investment coming into the country, as well as new entities entering the market, SABS had to maintain competitiveness. The SABS brand, as pointed out by one or two of the Members, was still a significant brand in the marketplace. There were other bodies out there providing conformity assessment and testing certification, but one needed to start questioning whether they were accredited in the marketplace and whether they were independent, as in a third-party quality assurance service provider. He could say that SABS was such an entity. So what was needed was to make sure that SABS continuously improved and aligned with international best practices. The standards were there; SABS just needed to make sure that it identified those standards in terms of growth and the services provided, and more importantly, executed on those standards and transitioned towards the best model or even reviewed the model. But taking away conformity assessments from the SABS portfolio of services was something that maybe would not even be considered by SABS in the medium to long term, based on its transition and trajectory towards sustainability.
Regarding the rationalisation of the two entities, Dr Bissoon stated that the National Regulator for Component Standards (NRCS) had a very different portfolio and mandate. NRCS and SABS, at the time they were together, served a particular purpose in a particular era. Post 2008, the two entities were given two separate mandates to go out and provide services, in the sense that one was a regulator and the other was providing conformity assessments and standards for voluntary uptake by the marketplace was core and key towards self-declaration and minimising non-issues around the burden of an industry in a highly regulated environment. The NRCS was one regulator, a regulator from a compulsory specification perspective, reporting to the Department of Trade and Industry and Competition. There were more than 300 regulators in the marketplace providing regulatory portfolios of services in the marketplace. SABS provided national standards for those regulators to adopt and include as part of their regulatory tools. So those were very different mandates. Personally, he did not see the rationalisation and the incorporation of a regulatory authority in the SABS because the international best practice was in terms of mature quality infrastructure institutions. The regulatory body was part of best practice as well. The regulatory body was not part of a national standards body because of a conflict of interest, meaning that a body that developed a standard, provided conformity assessments to the standard. If the body were developing regulations, invariably it would become its own monopoly. Driving the mandatory standards and conformity assessments in one entity would create an element of conflict of interest. That conflict of interest had been addressed in 2008 by creating two separate entities. However, further discussions could be held to further sensitise the issues around rationalisation to get a better understanding of how the quality infrastructure institutions operated and how they served and supported each other in driving an efficient economy in South Africa.
Dr Bassoon said that Mr Bergman’s comment on privatisation alluded to a similar comment by Mr Macpherson on testing and certification. Were SABS standards too high? They were not too high; they were what the market required and the representatives from the market themselves sat in the SABS technical committees to develop the national standards. SABS administered the governance process towards the development of national standards, but the technical content came from the experts in the marketplace. SABS had home-grown standards where there were no international standards; there were also instances of the adoption of international and regional standards. The element of decision-making on whether a standard was relevant or not, and the level of standards that SABS published, was dictated and dominated by the experts participating in the technical committees. But certainly, SABS was not a regulator and did not, could not, go out into the marketplace and draw samples from the marketplace and start testing to determine whether standards complied or not. That was the responsibility of the various regulators in the marketplace. SABS stayed far away from regulators and allowed the regulators to implement their mandate because regulators went through a very rigorous process of determining why to regulate and what financial and non-financial impact the regulators, or regulations, would have in the marketplace. The cost would have to be borne by the consumer and the manufacturer.
Concerning SADCSTAN (SADC standards harmonisation), SABS was a founding member of SADCSTAN. South Africa was a development country for standardisation and participated in technical committees to harmonise standards. But in the recent adoption and implementation of the African Continental Free Trade Area, SADCSTAN had become secondary to the regional standard bodies and SADCSTAN was not referenced in the African Continental Free Trade Area agreement. It was ARSO (African Regional Standards Organisation) and also AFSEC (African Electrotechnical Standardization Commission). So SADCSTAN needed to participate within ARSO and AFSEC to determine and set guidelines towards the harmonisation of regional standards. But suffice it to say SABS did participate in the AfCFTA harmonisation and movement of goods and services and supported SA national companies with the movement of SA goods into the SADC region. SABS had several bilateral agreements, from a standards perspective, with the various national standards bodies. Just recently, SABS signed an agreement on certification activities with BOBS (the Botswana Bureau of Standards) to do consignment inspection from a SABS perspective of products entering Botswana. SABS tested those products and made sure that they were certified. Those products were transitioned to Botswana as part of a value proposition quality assurance service for food and agricultural products. That was going to be expanded to other sectors as well, like electrotechnical. So that was the type of services that SABS provided in terms of quality assurance to support SADC.
In rating the turnaround plan on a scale of one to ten, Dr Bissoon told Mr Thring that he gave the plan a rating of seven. A lot had been done over the previous three to four years of the turnaround plan but much needed to be done that had not been started in some areas, while some initiatives and projects had yet to mature. So SABS had been in a phase between fixing the business and charting a new course. He had given a rating of seven based on the number of initiatives that the entity had implemented in terms of addressing the financial sustainability of the organisation, and addressing the infrastructure, although not as much as had been done as the entity should have been doing in respect of investment. Projects were proposed to allow for infrastructure upgrades to take place to support safety and security as well as the growth of facilities.
Dr Bissoon responded to the question on slide 18 relating to customer satisfaction. The customer satisfaction survey showed that from 2020 to 2023, SABS had a Net Promoter Score. The intention had been to introduce a new methodology or a new indicator, which was the Net Promoter Score. A lot of companies were using that type of indicator. Unfortunately, SABS had not been able to mature the indicator to get a significant value addition from the Net Promoter Score and so was still trying to finalise the methodology. That meant that for the 2023/24 survey, SABS had gone back to the tried and tested customer satisfaction surveys, including elements whereby the customer had the opportunity to address and comment on any issues that they would like to contribute to, e.g. good or bad or poor service delivery, etc. That type of customer satisfaction survey produced value-added comments as opposed to the Net Promoter Score.
He said that in the AfCFTA, SABS did a significant amount of work which was under the auspices of the regional standards bodies. SABS had to work within the Pan African Quality Infrastructure (PAQI). The body that SABS reported to, and was a member of, was ARSO and the other was AFSEC. SABS participated in the development of the harmonised standards - one standard, one test method, etc. which would result in a single conformity assessment. SABS also had several leadership roles that it had transitioned to in the very recent past: SABS was part of the Council of ARSO, which was responsible for governance direction and SABS had put forward several initiatives in terms of good governance and matters around harmonisation that were still to be considered. SABS was the secretariat of the Conformity Assessment Committee at ARSO. Being the secretariat allowed for a significant amount of influence on what went into the committee, the work profile and the deliverables. So, several guidelines on conformity assessments had already been published within the committee and adopted by Council and were readily available for organisations and entities within member countries of ARSO to include and implement as part of supporting a movement of goods and services within the continent.
An additional leadership profile included the Standards Management Committee, which was the key committee which approved the harmonised standards. Currently, there were more than 1 000 standards that had been approved as harmonised standards within ARSO. A fair percentage of them were historical, outdated standards that had to be addressed by the Standards Management Committee, and they should either be deemed non-relevant or be taken back and redeveloped. Those standards emanated from the 1980s and even1970s, so a fair share of them needed to be reconsidered, as they had not been reviewed within the required period of five years to ensure relevance. A number of initiatives and projects and other proposals had been made to ARSO in support of AfCFTA.
Concerning the outreach programme and how to assist customers from specific areas, Dr Bissoon informed Mr Malematja that the customer partnering division was primarily focused on engaging with existing customers although that was not good enough because SABS focused on a particular sector and a particular class of customers; it looked at the top 100 to make sure the business was sustainable and it received recurring business, and that it got on-selling products and services as well. SABS had not matured into the space of an effective outreach programme to provide and promote an advocacy service on the value and impact of standards and conformity assessments for rural areas and underprivileged areas. The SABS outreach programme was in its first year and SABS was going to develop at least five outreach programmes. The areas had not yet been defined; it was part and parcel of the work for that quarter so the work could be begun that year. Digital marketing and promotion was something that SABS had embraced and enhanced over the recent years using social media platforms, such as Facebook, LinkedIn accounts and Twitter. Dr Bissoon knew that people would question connectivity and digitisation and ask if it was having an impact on the underprivileged areas, but there was a need to embrace digitalisation. Hopefully, the total infrastructure around connectivity from a national perspective supported SABS’s digitalisation and promotion of services in digital channels and social media.
Dr Bissoon addressed Mr Mbuyane's question on promoting quality in terms of commodities. The key focus was to make sure that the standards that SABS developed in the marketplace were promoted weekly. Once again, it was being done on digital media, but SABS's engagement with existing customers as well as with new customers on products and the availability of product certifications and new product certifications was something that SABS needed to embrace. Historically, the institution had maintained an existing portfolio of about 5 000 standards. Many customers in the marketplace with product certifications had been loyal for several decades. And SABS was getting new entrants, but the new entrants had to be embraced with new standards for the new types of businesses with either system certification or product certification. So there were several standards out there for new products, including agro-processing, and shortly there would be standards for cannabis and hemp as well. In terms of initiatives in the new structure, the focus was on a product development portfolio within the SABS so that it could develop new schemes for new products in the marketplace. Based on the appetite of the various industries and companies in the marketplace, SABS would introduce new schemes. New schemes, from a commercial perspective, had an element of expense. Creating a new scheme, for it to be accredited in the marketplace and then to provide the services had cost implications for SABS but should lead to revenue. That was all part of the commercial revenue sustainability aspect that the SABS needed to mature. The new product development and scheme development would help the Bureau to maintain further sustainability and further revenue generation.
According to Dr Bissoon, hemp and cannabis were part of a very important strategic programme within the SABS. The stakeholder engagement programme launched in February was to enable the development of a technical committee specifically for hemp and cannabis. Those products had extensive industrial applications in the textile industry, construction industry and automotive industry. Some standards had been developed from an ISO (International Organization for Standardization) perspective, but standards would be developed from a South African perspective as well. The technical committee had been launched, the stakeholder engagement held and the work now needed to go towards developing a business plan specifically for the hemp and cannabis industries, bearing in mind that there was an element of the medicinal application, which was not part of the SABS scope of work; registration of the medicinal applications resided within the Department of Health and SAHPRA (South African Health Products Regulatory Authority). SABS was looking at industrial applications and would provide relevant standards to support the industry.
Dr Bissoon moved on to energy management. A simple example was the energy management ISO 50001 certification scheme that SABS was looking at while also engaging with the shareholder on a very important project on greenhouse gas carbon emissions qualification and allowing for an element of conformity assessments around that. That would result in tax concessions as part of implementing the conformity assessment scheme around energy management and addressing climate change.
Concerning the investment in facilities and testing, he admitted that it was not ideal nor where the Bureau management would like it to be but, as indicated in the briefing, SABS needed to invest R430 million in the next three years. SABS was comfortable that it could implement those projects and allow for an element of sustainability and growth over a period of five to 10 years. Resources became an element of concern in terms of how much the Bureau could expand in the next three years while maintaining the current infrastructure and building the capacity to develop revenue. Those were the trade-offs.
He said SABS was going to prioritise the specific high-risk areas around compliance and health and safety within the organisation, especially around facilities and testing. Testing had been allocated R150 million in the next two years and it was going to be focused on areas which were significantly deficient in terms of infrastructure upgrades, as well as to develop new test laboratories and new infrastructure for the new areas that SABS needed to participate in. Those were the foci: one was to maintain revenue; the other was to grow revenue, and there had to be justifications for both.
Dr Bissoon stated that SABS had had a very successful engagement with labour in the last couple of years. Conflicting viewpoints were inevitable but SABS had been able to manage and engage labour quite professionally and maturely to conclude the section 189 process quite amicably. The Bureau was in the process of transitioning to the new organisational structure and no significant issues were pending or brewing. From a labour perspective, there were normal engagements and issues and concerns raised as part of the normal course of duty with executive management, and the management team with labour. Two very important initiatives were currently ongoing: firstly, the review of the bargaining units, a 2015 collective bargaining unit agreement; secondly, engaging on the mandate for salary increases for the 2023/24 financial year.
The cement laboratory had previously been mentioned as part of the turnaround plan. He said that the Bureau had 60% capacity in the laboratory but in terms of an additional workstation, 100% of the equipment had been received and the process of commissioning the equipment was underway. The laboratory had to meet the turnaround times, which was one of the key areas, and there were long timeframes to manage the testing processes, but the additional Workbench would reduce the turnaround time and allow the laboratory to operate a little bit more efficiently to serve the needs of the private sector.
Dr Bissoon assured Members that the ICT structure was part of the organisational review. However, during the section 189 process, SABS had lost a few very critical resources in that area because they were highly marketable and in the world of digitisation, it was very difficult to get the skills back. SABS was in the process of capacitating the ICT division with the requisite resources. At that stage, the proposal was for ICT infrastructure of R100 million as part of the capital expenditure for the current financial year, and implementing ERP (enterprise resource management), digitalisation of certification and upgrading the laboratory information management system.
About the green economy and oceans economy, he said that several standards had been published relating to the green economy and he could certainly provide a list of those standards. The green economy highlighted areas of energy efficiency, areas of battery technologies and various schemes that were available around energy labelling to support energy management. The SABS certification department was entering into the process of energy audits. Oceans economy standards had been published and those related to the building of small crafts and the maintenance of those crafts, as well as fisheries and aquaculture. About 14 standards had been published around fisheries and aquaculture and he would submit a list of the standards published.
Dr Bissoon responded to Mr Mulder's question about competitive testing and quality control as it related to SABS and NRCS and the business models. He reiterated that they were separate entities with separate mandates and different portfolios that needed to be implemented as part of the market and in support of the industrialisation ambitions of the country. SABS was competitive. Looking at the plethora of services in certification, as much as there had been a downward decline in the number of customers in the recent past, that was a reflection of the market and due to the impact of COVID and post-COVID, as well as the global trends impacting significantly on the national economy and various companies. Loadshedding was having a huge impact on the sustainability of companies. So in terms of certification, SABS had cancellations from certification clients for various reasons: they could not sustain themselves; they were not competitive in the marketplace; the cost of doing business was much more difficult; and businesses were closing down. A second reason for the decline was the inability to meet the requirements of the certification scheme, although they were not onerous requirements, they were national standards. He reminded Members that the national standards were developed by the stakeholders. However, SABS was seeing an upward trend in terms of revenue for testing, which was very encouraging. More had to be done in terms of building capacity and certain requisite skills and competencies in specific laboratories. But if he were to make a general statement around competitiveness, he would say that SABS was competitive in the marketplace in the majority of the services offered.
In response to Mr Monakedi’s question on support for SMMEs, Dr Bissoon did not have that offhand, admitting that it was something that he should have considered upfront. It was a very important question. He suggested that Lerato Madras might have an answer. If not, he would certainly provide a written submission on that particular question.
Ms Matras responded to the question on support for SMMEs. SMME support via the procurement cost to the Bureau was envisaged at 40%. She added that there had been changes to the regulations and that expenditure had to be tested against the new regulations. She would have a better understanding at the end of the second quarter.
Closing Remarks
The Chairperson thanked the dtic team and the SABS team. She stated that the Committee would closely monitor the performance of SABS against the indicators presented.
The Secretary stated that the Committee would meet the following day to receive a briefing from the RNCS on its 2023/24 Strategic and Annual Performance Plan and would formally consider the Limpopo and Gauteng Oversight Report.
The meeting was adjourned.
Present
-
Hermans, Ms J Chairperson
ANC -
Bergman, Mr D
DA -
Hlonyana, Ms NKF
EFF -
Macpherson, Mr DW
DA -
Malematja, Mr C N
ANC -
Mbuyane, Mr S H
ANC -
Moatshe, Ms RM
ANC -
Monakedi, Mr M
ANC -
Mulder, Mr FJ
FF+ -
Ntwane, Dr JC
ANC -
Thring, Mr WM
ACDP
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