National Regulator for Compulsory Specifications Bill & Standards Bill: Department & Bureau of Standards briefings

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Trade and Industry

16 October 2007
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Meeting report

TRADE AND INDUSTRY PORTFOLIO COMMITTEE
17 OCTOBER 2007
NATIONAL REGULATOR FOR COMPULSORY SPECIFICATIONS BILL & STANDARDS BILL: DEPARTMENT & BUREAU OF STANDARDS BRIEFINGS

Chairperson: Mr S Rasmeni (ANC)

Documents handed out:
Standards Bill [B 46-2007]
National Regulator for Compulsory Specifications (NRCS) and Standards Bill

Audio recording of meeting

SUMMARY
The Department of Trade and Industry briefed the Committee on the National Regulator for Compulsory Specifications Bill, and the South African Bureau of Standards (SABS) briefed the Committee on the Standards Bill.

The National Regulator Bill was created to administer technical regulations. The Bill would transfer the administrative elements that were relevant to compulsory specifications from the current Standards Act to the new National Regulator for Compulsory Specifications Bill. The mandate would cover the development of voluntary South African standards and maintenance and the provision of conformity assessment services.

The new Standards Bill provided a legal framework for the development, promotion and maintenance of standards in South Africa and the rendering of conformity assessment services and related activities. The Bill provided for the continuation of the Bureau of Standards as a public entity with a mandate to cover standards development and maintenance and the provision of conformity assessment services.

Questions from the Committee focused on current challenges experienced by the SABS, how the Bills would contribute to transformation within South Africa, technical barriers to Trade and WTO standards, accreditation of Standards organisations, the project teams responsible for implementation and the size of the Board, the new approach for technical regulations and ISO standards.

MINUTES
National Regulator for Compulsory Specifications Bill (NRCS Bill): Department of Trade and Industry (dti) and South African Bureau of Standards (SABS) Briefing
Dr Tshenge Demana, Executive Manager: Technical Infrastructure Unit, dti, introduced the team that would attend to the briefings. This consisted of himself, Mr Sipho Zikode, Acting Deputy Director General, dti, Mr Johan Strydom, Legal Adviser, dti, Ms Elsabe Steyn, Director: Standards and Environment Technical Infrastructure Unit, dti. Dr Cliff Johnston, Corporate Services Executive, represented the South African Bureau of Standards (SABS).

Dr Demana explained that the NRCS and the Standards Bill were introduced to separate the functions, which were the responsibility of one state organ. The two Bills were the last elements of policy implementation whereby the SABS would be reconstituted in terms of the Standards Bill. The regulatory division would move outside the SABS and become a public entity.

Dr Demana noted the rationale for change, purpose of the Bills and the implementation of the Bills. Globalisation required an increasing demand on trading economies to continue to guarantee that their products were safe. In terms of industrial policy, it was important for the economy to integrate into the global supply chain and have an effective technical infrastructure system. The dti identified the need to reconsider the mandate of the SABS, as it was not in line with the World Trade Organisation Technical Barriers to Trade (TBT) requirements. There was a conflict of interest in terms of providing conformity assessment services for technical regulations and administering technical regulations at the same time.

The NRCS Bill was therefore created as a vehicle to administer technical regulations. There were about 70 regulations that covered automotives and automotive components, fish, canned meat, electrical and electronic products and components, environmental and personal safety products. The Bill would transfer the administrative elements that were relevant to compulsory specifications from the current Standards Act to the new NRCS Bill. The mandate would cover the development of voluntary South African standards and maintenance, and the provision of conformity assessment services. The new Bill made provision for the implementation and administration of all aspects of compulsory specifications, which included approvals, inspections and market surveillance as well as sanctions at appropriate levels in order to deter abuse of regulations. A project plan would be developed to determine the cost of separation and personnel implications. The Board of the National Regulator for Compulsory Specifications would be the accounting authority and the Minister of Trade and Industry would the executive authority. The Bill also provided for transitional arrangements to ensure the smooth transference of assets, liabilities and obligations.

Standards Bill
Dr Demana noted that the new Standards Bill provided a legal framework for the development, promotion and maintenance of standards in South Africa and the rendering of conformity assessment services and related activities. The Bill provided for the continuation of the SABS as a public entity with a mandate to cover standards development and maintenance, and the provision of conformity assessment services. The Board of Directors would be assisted by an Advisory Forum that would provide stakeholder input. The broad mandate of the SABS was to support trade and industrial development by ensuring that South Africa’s standardisation activities continued to support the needs of industry in a fast-paced global environment.

In terms of the Standards Bill the SABS would develop, issue, promote, maintain and amend or withdraw of South African National Standards, and deal with related normative publications serving the standardisation needs of the South African community. The SABS would also develop procedures through which other bodies with sectoral expertise could be recognised as Standards Development Organisations. The SABS would specify where these standards could be published as SA National Standards. The Standards Bill provided for obtaining membership in international, regional and foreign bodies having objectives similar to that of the SABS. This organisation would also provide a SA enquiry point to maintain the South African notification system in terms of the Technical Barriers to Trade Agreements of the World Trade Organisation (WTO). Transitional arrangements were provided for in the Bill to ensure the smooth transference of assets, liabilities, employees and a continuation of notices, designations, certificates and regulations issued. The Board of the SABS would be the accounting authority and the Minister of Trade would be the executive authority.

Discussion
The Chairperson asked what the challenges were, given the current structure of the SABS.

Dr Demana indicated that the SABS wrote standards, did testing and also approved tests to ensure that products conform to regulations. This situation was problematic. It was difficult for new entrants to get into the industry. The impression being created in the market place was that the area of expertise of the SABS was locked up and the entry of new service providers in the testing and certification field was not possible.

Mr Johnston added that the current structure could be conceived as anti- competitive by the marketplace. The playing field needed to be levelled and new niche opportunities should be opened for new players. Some work was already contracted out but more opportunities needed to be created.

The Chairperson wanted to know more about how SA standardisation procedures fitted in with the WTO standards.

Dr Demana said that in terms of best practice, standards bodies in other countries would write standards but did not regulate them. The WTO had a guide for standards bodies, which separated standard development from regulation.

The Chairperson also asked how the two Bills would contribute to the transformation within SA.

A Member referred to the Technical Barriers of Trade (TBT) and asked if SA was meeting WTO requirements. He also wanted to know what the difference was between voluntary and compulsory standards.

Dr Demana said that the TBT referred to standards being put in place by different countries, which constituted a technical barrier to trade. Products from countries had to meet standards imposed by other countries.

Dr Demana explained that compulsory standards referred to standards that all products within the market should meet. In the areas of health, safety and the environment, government should develop standards in order to protect citizens. Voluntary standards would be developed by different sectors within industry, like for instance the ISO 9001. Customers sometimes required suppliers to adhere to certain voluntary standards. Standards were only compulsory when regulated by government.

Ms D Ramodibe (ANC) asked to what extent mechanisms would be established to ensure the monitoring of inspectors.

Dr Demana said that sanctions could be employed to ensure adherence to standards. Products that did not adhere to certain standards could be removed from shelves and destroyed. Various checks and balances were in place to ensure that there were no abuses regarding standards.

Mr Johnston said that the SABS recently had received ministerial approval to send out inspectors to ensure adherence to standards. R17 million of electrical cables were destroyed in order to ensure products were up to standard and to protect the public.

The Chairperson wanted to know who would be responsible for accreditation of the other organisations that claimed expertise on standards. He wanted to know what tools would be used to ensure that these organisations had the required expertise.

Dr Demana said that accreditation was done by the South African National Accreditation System (SANAS). When standards were developed, the SABS would come up with a process to outline how standards should be developed.

The Chairperson also wanted to know more about the project team that would be responsible for implementation.

Dr Demana indicated that the project team would consist of the Dti, National Treasury, and the Departments of Public Service and Administration, and Transport, the National Metrology Institute of South Africa (NMISA), SANAS, Department of Labour, SABS, and industry, with two representatives from various sectors.

The Chairperson also wanted to know more about the new approach to technical regulations.

Dr Demana said that the dti came up with an approach for technical regulations and were looking for buy in from government. Technical regulations would indicate the specifications to be met in order for a product to be sold. The new approach would focus on the role of the regulator and the organisation that would enforce standards. The approach would also focus on what an organisation would have to do in order to meet the standards and what sanctions would be imposed, if standards were not met. Once the Department got buy-in from government, the dti would approach the Portfolio Committee to discuss the new approach to technical regulations.

Mr Rasmeni asked for clarification on the size of the Board.

Dr Demana said that in the new board there should be sectoral representation. The Board would have to increase in size in order to accommodate sectoral representatives.

Ms Steyn confirmed that the current board was too small. Sufficient representation was required and capacity of new board members also needed to be developed.

The Chairperson also wanted more information on industry and other parties that were consulted during the development of the NRCS and the Standards Bill.

Dr Demana said that the private sector was consulted through workshops. Industry associations were invited and labour was consulted through
National Economic Development and Labour Council (NEDLAC).

Mr J Maake (ANC) asked for more information on the ISO standards compared to national standards.

Dr Johnson indicated that ISO was one of the international standards committees of which the SABS was a member. Membership of SABS on the ISO committee enabled SA to influence international standards, to ensure that standards were not too restrictive for SA exporters. There was no obligation on SA to adopt ISO or WTO standards.

Mr Maake also wanted clarification on TBTs and requirements that prevented trade by South African industries.

A SABS representative said that the WTO would like South Africa to adopt TBT where necessary. International standards were taken as a starting point but South Africa decided what standards would apply in the country. WTO said that if a country deviated from the TBT standards, it should have good reason to do so. It was difficult to get South African people with the necessary technical abilities to go to a range of international meetings, where standards were being developed.

Mr Johnston said that there were just over 350 South African experts that participated internationally in Standards Committees to ensure that South Africa’s position was properly presented internationally.

Mr Maake asked for more information on why the Board would need an advisory forum, given that it had been in existence for a long time.

Ms Steyn said that the aim was to achieve a forum where the Board of SABS would listen to stakeholders. Stakeholders would be able to propose new standards that should be developed. Their role would be advisory and not prescriptive.

Mr Rasmeni asked if the SABS was involved in the Southern African Development Community (SADC).

Dr Demana indicated that the dti has been pushing for regional blocs like
Common Market for Eastern and Southern Africa (COMESA) and SADC to develop a common approach to standards.

The meeting was adjourned.

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