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TRADE AND INDUSTRY PORTFOLIO COMMITTEE
23 August 2006
DRAFT MEASUREMENTS UNITS & MEASUREMENTS STANDARDS BILL; DRAFT CONFORMITY ASSESSMENT, CALIBRATION & GOOD LABORATORY PRACTICE BILL: DEPARTMENT BRIEFINGS
Chairperson: Mr S Njikelana (ANC)
Documents handed out:
DTI Presentation on Accreditation for Conformity Assessment Bill
DTI Presentation on Measurement Units and Measurement Standards Bill
Accreditation for Conformity Assessment Bill: Part1 & Part2
Units and Measurement Standards Bill: Part1 & Part2
The Department of Trade and Industry addressed the Committee on two Bills that they wanted to introduce in Parliament. These Bills would restructure technical infrastructure in South Africa. They explained that the technical infrastructure was not in crisis; the aim however was to change the governance of the National Metrology Laboratory and the South African National Accreditation System. This was to bring them in line with international trends.
Members noted that they had not been consulted during the Department’s preparatory work on the Bills. They also raised questions about the mandates of the involved institutions; details of measurement; assistance to neighbouring countries and the roles of the European Union and the United Nations.
The Chair explained that two pieces of legislation would be discussed. These two pieces of legislation had not yet been formally introduced in Parliament. The discussion would focus on the policy related to the two bills.
Department of Trade and Industry (DTI) presentations
Mr L October, Deputy Director-General: Enterprise and Industry Development Division (EEID), in the DTI explained to the Committee that the two bills had not yet been certified. It was hoped that this would be done within a few days of the meeting. He pointed out that in trading and economics, the economic infrastructure was present such as roads, rail links, etc. The technical infrastructure however certified goods for international trade. Certification was essential. There was legislation to do this including the South African Bureau of Standards (SABS) Act. This legislation however needed to be modernised in order to fit global trends.
Measurement Units and Measurements Standards Bill
Mr T Demana, Chief Director: Technical Infrastructure in the DTI addressed the Committee as in the presentation attached. He added that since 1973 no amendment had been made to the National Units and National Measuring Act, despite changes that had taken place. Currently the National Metrology Laboratory (NML) is in the Council for Scientific and Industrial Research (CSIR). It needed to be an independent body however. The NML at present had no board. With the new legislation the Minister would appoint a board. This would also enable the NML to act in line with government policies.
Dr P Rabie (DA) asked what SANAS was, as referred to in the presentation.
Ms F Mohamed (ANC) asked what the mandate of the SABS, SANAS and the NMI was. She wanted to know whether they would be working separately or under one umbrella. She asked where the laboratory would be set up and whether the DTI would provide the budget since the CSIR fell under the Department of Science and Technology which budgeted for it.
Mr S Rasmeni (ANC) said that the Members were being disadvantaged as it seemed that the DTI had done most of the work already on the Bills. The DTI was already preparing to table the legislation. The Committee had not been involved at all in the process so far. There were technical matters which should have been explained beforehand. Members would have understood the Bills if they had been involved beforehand.
Mr J Maake (ANC) said that most of his constituency was illiterate and it was crucial that the work of the institute was explained properly. He wanted to know whether the people in the NML only did measurement.
Prof E Chang (IFP) asked who was doing the measuring and what was being measured. Was this being done for public entities or private institutions?
Mr October agreed that the whole process was about measurement. He explained that the general public took everything for granted. They assumed that a kilogram was a kilogram or that any other measure was definitely that. If a product came from another country South Africa had to be sure that it was measured correctly. This was done at the laboratory. This laboratory at present fell under the CSIR. The CSIR's mission was to encourage innovation and technological development of industry. This was a regulatory function. The aim was therefore to get the NMI to stand on its own and not be part of the CSIR. He explained that SANAS was the South African National Accreditation System. Their role was to certify different laboratories that did testing.
The Chair asked where the SABS fitted into the structure.
M October said that the SABS did the actual assessment or gave the stamp of approval. The SABS did the actual inspection and certification of goods. It also oversaw actual standards. He added that South Africa had a very well developed technical infrastructure which ranked amongst the best in the world. The capacity also existed, but the arrangement had not kept pace with developments internationally. The governance arrangements also needed to be cleaned up.
Mr Demana said that the budget for the NMI would come from the DTI. The CSIR budget did not cater for the NMI.
Ms E Steyn, Director: Technical Infrastructure in the DTI, explained that the SABS had three roles. Firstly, they developed standards. Presently there was about 5 000 national standards which were aligned to international standards. These standards were used by SANAS to accredit a laboratory as a testing facility. Secondly, they had laboratories which had certification activities. Lastly, they also had a regulatory activity such as motor vehicle brakes and food packaging.
Mr L Laubschangne (DA) asked if the present system could not do the required work He also wanted to know what comments had been received in the process of consultation. He inquired how the new infrastructure would enhance the present one.
Mr S Maja (ANC) asked how the measurement system benefited society.
Mr H Cupido (ACDP) referred to the benchmarking process which was done in 2001. He wanted to know how South Africa had compared to other countries.
Ms D Ramodibe (ANC) agreed that the Committee had been brought in at an advanced stage in the process. She wanted to know what the relationship was between the CSIR and the NML and what mechanisms were in the Bill to ensure that monitoring took place. She also wanted to know what kind of support the new structure would give to Broad Based Black Economic Empowerment (BBBEE).
Dr D Sefularo (ANC) asked which international protocols had necessitated this kind of re-organisation.
Prof Chang (IFP) still wanted to know who was doing the measuring and what was being measured, and whether it was compulsory. She wanted to know if certain work processes in certain jobs were being measured.
Mr Rasmeni (ANC) asked what corrective work was put in place once problems in measurement had been encountered. He cited the example of the mass of a loaf of bread. He asked which organisation; the SABS, NML or SANAS would be involved in correcting these issues.
The Chair suggested that the speakers use a loaf of bread as an example to explain how and what each entity did.
Mr Demana said that the government sets policy and regulations stating what a loaf of bread must weigh. There will thus be a mandatory standard for a loaf of bread. The SABS will assist government to set this standard. The SABS will need a measurement system in order to do this. The NML will assist here. They will have the reference kilogram which will be used in determining the standard. The actual weighing would be done in the private sector. To ensure that they are competent to do this, SANAS will be required to provide accreditation to these laboratories.
Referring to the review that had been done, he said that it had compared South Africa to other countries such as Brazil, Malaysia and the United Kingdom. It was found the South African legislation was outdated. The system at present was fragmented. There was no structured way of overseeing the system by the government. As negotiations in the World Trade Organisation (WTO) were progressing, tariffs were being reduced. This had put an emphasis on the technical infrastructure as more and more countries were using technical regulations to protect their industries. In terms of the governance issues, it was found that the NML did not have the right or proper one. To advance industrial development it would need to have a better profile. The DTI focus was industrial development and trade. If industries were growing and trade was increasing there would be job creation and in this way society would benefit. In addition to this, the consumer would also benefit since certain standards, such as bread, would be set for them.
He stressed that currently the NML was very good technically. It needed the right profile and structure however. Under its present structure it was difficult for the DTI to bring it in line with government policies while it was under the CSIR. The NML at present reports to the CSIR through a director. They have no position on the board of the CSIR. The CSIR and the NML have different mandates. Since it was under the CSIR, it was possible for the NML to do work which was part of the CSIR's focus and not things which was part its own mandate.
Ms Steyn said that the same organisational structure existed within the Southern African Development Community (SADC). These arrangements are formalised through a memorandum of understanding under the trade protocol. South Africa houses the secretariat of each of these structures. She explained that with call centres being outsourced, the SABS has been asked to develop a standard for call centres. This will be an ISO 9000 standard. Once the call centre is established, it can request certification and the SANAS will be sent in to do this. They will formalise the criteria to be used for accreditation.
Mr Rasmeni asked who had discovered the recent problem with the bread. He also asked if there was regular day-to-day monitoring.
Ms Steyn replied that the SABS has discovered the problem.
Ms Mahomed said that in the marketplace, there was a huge amount of dissent around products and product design. Some companies did not register with the SABS since it was costly. This meant that it was only open to the privileged and most small, medium and micro enterprises (SMMEs) would not register. Some might not register because they did not see the need for it.
Mr Maake asked how a consumer would access the system that was explained. He also wanted to know whether the SABS set standards for the ingredients that went into bread and how South Africa dealt with the United States of America since it still used the old imperial measurements.
Prof Chang asked how South Africa compared to other countries. She said that her question had still not been answered regarding who and what was being measured and whether it was compulsory. She also asked if the efficiency in industry was also being measured.
The Chair asked if there were any plans for regional integration, regarding measurement, in SADC. He also added that there were technical barriers for those businesses in the second economy.
Mr October said that Prof Chang was referring to issues of efficiency and productivity. This was not the issue at hand. The National Productivity Institute would deal with this. The discussion was rather around voluntary and regulated standards. This was important for consumers and for trade. Africa was particularly disadvantaged in trade especially with Europe and Japan through technical barriers. Through setting certain high standards, they excluded African countries. He cited the example where, a few years ago, Tanzanian fish was banned from European markets. South Africa had access because of the high standard of the SABS and SANAS. It was hoped that this could be extended through SADC and through the rest of Africa.
Mr Demana added that SABS had a team of inspectors that checked compliance. This was especially in the areas of health and safety and food. In terms of ingredients, he said that this fell in the chemical area. The NML would prepare a reference standard. The comparison with other countries could be supplied to the Committee. It was important that a uniform system be implemented in SADC. At the moment however, South Africa was the only country which had the technical infrastructure. There was an attempt to get the other countries at the same level. Referring to SMMEs, he said that government was trying come up with programmes to assist small businesses. The DTI had published a booklet that explained what needed to be done if goods wanted to be exported in terms of quality, standards and health issues. This restructuring would help in the whole system.
Dr B Sehlapelo, Group Executive: Frontier Science and Technology, in the Department of Science and Technology (DST), said that the CSIR fell under his portfolio. He said that there was an additional amount of R5, 8 million which came from the DST through the parliamentary grant to the CSIR. Referring to the assets of the NML, he said that the atomic force microscope was purchased within the implementation of the nanotechnology strategy. This was the measurement of things that could not be seen. Standards in this area were still being evolved. These were some of the issues which had to be dealt with when the new legislation took effect.
Mr P Hendricks, Executive Director: CSIR National Research Centres, said that the NML had been restructured in 2005. At present there were five operating units which were concerned with research and development. They had also created four national research centres which reported directly to him. These centres included the metrology laboratory. As far as the financial implications were concerned, discussions were being held at present.
The Chair pointed out that it was important that the different departments collaborated.
Mr D Louw, NML Manager, explained that the USA had been the first signatory which brought the SI metric system into being. Even though it used the old units domestically, when it traded internationally, it used the metric system.
Ms Steyn added that as far monitoring was concerned, the SABS did some monitoring while other departments also did monitoring.
Conformity Assessment, Calibration and Good Laboratory Practice Bill
Mr Demana addressed the Committee as in the presentation attached.
The Chair asked how the proposals compared with other countries. He also asked that the question around accountability be clarified as well as the role of the public sector.
Mr Rasmeni asked which rating agencies for BBBEE was being referred to in the presentation and what the compliance issues referred to were.
Mr Cupido asked if the accreditation was just linked to exports. He asked if imports were not tested as well and whether the costs would be minimised.
Mr Maake referred to SANAS and said that since it was a section 21 company the government wholly owned it. He wanted to know how the Bill would change this. SANAS was acting at present in a consulting capacity in SADC. He wondered if African countries could not just export their products through South Africa. He cited Tanzanian fish as an example.
Ms Mohamed said that it was an ambitious Bill. She wanted to know how the transition would take place and what time frame was given for the transition. She felt that perhaps a workshop was needed to work out South Africa's responsibility to SADC.
Dr Rabie commented that the problem with Tanzania had been around health issues, but this had improved.
Mr October said that SANAS had a limited role to play in black economic empowerment (BEE). The compliance issues referred to rating agencies that were not genuine. These agencies were rating companies on the BEE scorecard and needed to be accredited. He stressed that companies did not need to go to these rating agencies. There was still a need however to have them accredited. Referring to Tanzania, he said that help had come from South Africa, the European Union (EU) and the United Nations (UN). The system was now in place. He stressed that the technical infrastructure was not in a crisis situation; the DTI was being pro-active by introducing these Bills. He added that the aim was to have a common standard in SADC for measurement.
Mr Demana referred to the benchmarking and said that in other countries the measuring bodies were independent. The aim was to bring South Africa in line with the EU. There were some technical institutions under some government departments that could be accredited as well. Some of the laboratories under the Department of Health, for example, needed to be accredited. In a section 21 company, the government was paying for everything. The members were also able to put anyone on the board. SANAS now needed to be brought in line with other public entities.
Ms Steyn pointed out National Treasury was keen to phase out section 21 companies that were government agencies.
Mr R Josias from SANAS said that there was a memorandum of understanding as a trade protocol to facilitate the mandate. Infrastructure had already been established in Botswana. It was not possible for SANAS to serve the whole region. SADC would need its own body to do this.
Dr Louw added that SANAS had 40 laboratories at present. It would cost around R40 million to physically move SANAS. What was envisaged however was a reporting shift. The building would then be rented from CSIR. There was no place at present that it could move to.
Dr Sehlapelo asked what governance model would be used for SANAS.
Ms Steyn replied that the Minister would appoint a board of between ten and fifteen people. They would have to comply with the Public Finance Management Act (PFMA) which meant that they would have to submit strategic plans, business plans and quarterly reports. They would be accountable to the DTI.
Mr October pointed out that previously, the CSIR reported to the DTI. It was then moved to the DST. Under this arrangement the NML, which was under the CSIR, was under the DST while SABS and SANAS were reporting to the DTI. With the planned legislation, it hoped that this would be cleared up.
Mr Maake wanted to know why SANAS could not move to any other place.
The Chair said the situation of section 21 companies as public entities was an important issue to consider. He also wanted to know the role of UN agencies in assisting African countries.
Mr October replied that the UN had played a limited role. These agencies’ roles were now being moved. There was a lack of co-ordination in the UN however on this. The aim was to move SADC into a customs union such as the Southern African Customs Union (SACU).
Mr Louw said that the CSIR and the DTI had spent money on the SANAS laboratories. These laboratories had to have certain specific conditions such as its air conditioning and foundations. For this reason, it was not possible to move elsewhere.
Mr Maake suggested that the name of the Bill be simplified.
The Chair thanked the various presenters for the input.
The meeting was adjourned.
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