National Regulator for Compulsory Specifications (NRCS) Bill and Standards Bill: briefing

Meeting report

National Regulator for Compulsory Specifications (NRCS) Bill and Standards Bill: Department of Trade and Industry (dti) Briefing
Mr Sipho Zikode, Acting Deputy Director-General: Enterprise and Industry Development Division, dti, began by briefing the Committee on the process leading to and involving the implementation of the Bills. The technical infrastructure system was defined as a system of set standards. The reasons for change included globalisation, industrial policy and effectiveness and efficiency. The need for two separate structures was justified in that the combination of the responsibilities was not in line with the World Trade Organisation (WTO) requirements.

Mr Zikode explained that the NRCS 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 NRCS Bill. The new Standards Bill provided for the continuation of South African Bureau of Standards (SABS) as a public entity. The mandate would cover standards development and the maintenance and the provision of conformity assessment service.  The main aim of the NCRS Bill was to deal with the technical regulations administration.

The mandate behind the Bill was to promote public safety and to enhance consumer protection. To achieve its mandate the NCRS would have sampling, inspecting and testing products, auditing of manufacturing and other processes and the examination of documentary evidence, as compliance assessment tasks. The implementation of the Bill would result in a separate public entity, namely the Regulatory Division of the SABS. The corporate governance of the NCRS Bill would include a board of the NCRS and the Minister of Trade and Industry would be the executive authority. Transitional arrangements of the NCRS Bill were listed.

The aim of the new Standards Bill was to provide for the continuation of the SABS as the peak national institutional and legal framework for the development, promotion and maintenance of national standards. The amended Standards Bill would cover standards development and maintenance of conformity assessment services. It would be amended by the deletion of the current regulatory responsibilities. The board of directors would be increased in size and would be assisted by an Advisory Forum that would provide stakeholder input.

The Standards Bill further provided for the maintenance of SABS as an internationally recognised standardisation institution. It would be responsible for the development, issuing, promotion, maintenance, amending or withdrawal of South African National Standards. It would also undertake provision of reference materials, conformity assessment services and related training services and would develop procedures through which other bodies with sectoral expertise could be recognised. The transitional arrangements for the Standards Bill were also listed.

Discussion
A Committee Member asked whether South Africa’s standards met the requirements of the system of standards at the WTO.

Mr Moses Moeletsi, Regulatory Executive: South African Bureau of Standards, replied that the Standards Bill was not comparable to other countries on the WTO. WTO did not have standards bodies that regulated and administrated.

A Committee Member asked for further clarification regarding the proposed board for SABS.

Mr Moeletsi replied that the current SABS Board would run until the end of its term. Once the term had ended the process would begin to appoint a new board that would include two new members. The reason that the board would have more members was that the board members who worked for government were paid less than those who worked in the private sector. This resulted in some board members under-performing. The additional members would ensure that issues would get the proper deliberation that they deserved.

Ms Elsebe Steyn, Director: Department of Trade and Industry, commented on the board’s size, explaining that there was extensive research done on the ideal size of a board, which was apparently recommended at sixteen. When the Minister appointed the SABS board, he had wanted younger people on the board but could not do that because of the size restrictions. There had to be a core group of people on the board who would be able to deal with big businesses as the turnover of the standards and conformity assessment was R400 million.

A Committee member wanted to know what justification was required to make a compulsory standard.

Mr Zikode replied that it was important to understand the mandate of the SABS. Regulated products only required intervention when the market failed and the industry could not regulate itself. A decision would be taken that a voluntary standard be made compulsory. Currently there were 80 compulsory standards in place covering various products. There were standards available on a voluntary basis. Some companies sent their products for certification.

A Committee member wanted to know what were the criteria to set standards for machinery.
 
Mr Zikode replied that machinery might have issues of performance and safety. Compulsory standards related only to safety issues. There would not be a check on standards of quality and performance.

The Committee expressed concern regarding the rental charges.

Mr Zikode indicated that the there were concerns regarding the rental charges, but they would not be new or additional expenses.

A Committee member wanted to know how would the technical infrastructure safeguard the community at large.

Mr Geoff Visser, Standards Executive: South African Bureau of Standards, replied that the process of developing standards was done through a committee process that brought on board a diversity of stakeholders, who tried to ensure that the standards were relevant and addressed the needs of the community. Those standards were then published and provided conformity assessment services, and there would be attempts to bring those standards to the community. The SABS were continually trying to bring the standards to more and more communities.

A Committee member raised a concern regarding the growing bureaucracy within SABS.

Mr Visser replied that with SABS as a single body there had been accusations around introduction of regulations that may not have been strictly necessary. The separation of the bodies meant that there would be a standards base and a conformity assessment base that would act independently of the regulatory base. There would be justification of the conformity assessment base, which would be considered on good business principles, as well as justification for regulation. The levies that would be collected needed to be considered in line with the risk associated with those products. The two would be considered independently from one another.

A Committee member wanted further clarification of the advisory forums.

Mr Visser replied that the advisory forums were there to inform communities that were not addressed. This Bill would formalise the process.

Ms Steyn replied that an advisory forum was accessible as people needed to engage with something besides the formality of a board. Government departments could use the new regulator. They wanted to create an opportunity for engagement. They wanted to improve their technical regulations. She also felt that it was time to change the model.

A Committee member wanted to know how involved SABS was in service delivery.

Mr Visser replied that SABS did have compulsory specifications in certain areas, but there were also other government departments that regulated service delivery. They did have a collection of standards that were useful in order to do their job. In other words SABS may not be the regulator but they did have standards that regulated. This split would allow them to work together with other regulators to improve services.

Mr D Olifant (ANC) commented that the delegates that attended the Committee meetings did not give as detailed an explanation as he would have liked. The Committee required complete transparency in order to make an informed decision. He added that the delegates were not convincing.

A Committee member wanted to know what occurred after the surveillance and auditing had taken place. 

Mr Moeletsi replied that appropriate functions were applied. The Chief Executive Officer (CEO) had the power to give a directive for the products that did not comply to be retained in the possession of that particular supplier, pending a number of possibilities. The supplier could prove to the regulator that he could correct the wrongs that had been done. If those products cannot be corrected then an approach would be made to the Minister of Trade and Industry requesting a directive to destroy those products. The company would then given an opportunity to voluntarily destroy or send the non-compliant products back to their country of origin. There were a number of companies that had sent products back to the country of origin. They also utilised the tool of ‘name and shame’. They also educated other educators to create a level of awareness.

A Committee member wanted clarification on what would be the representivity of the SABS Board.

Mr Zikode replied that the Bill envisaged this in terms of the various ethnic groups, rather than in terms of different communities.

Ms Steyn added that the approach of the board would be that of a management committee and not a stakeholder. It was representative of different races, genders and skills.

A Committee member was concerned whether potential Board members would be able to relate to the concerns and issues that would be brought up.

The Chairperson reiterated that representation should cover all criteria set by government.

Dr P Rabie (DA) thanked the SABS for the good work that they were doing. He further commented that there had to be a distinction made between administration and assessment. He agreed with the fact that if there were changes then a proper costing still needed to be done. He could not assess the financial implications of each of the two bodies and asked for an organogram. He also wanted further justification for changing the model as it had been working relatively well thus far, and wanted to know if SABS had been benchmarked into a particular market. 

Mr Zikode replied that although the system worked very well, the changes would be advantageous and improve what was done. The costs were not properly advanced. More detail would be required and forwarded to the Committee.

Mr Olifant wanted further clarification of conclusions that were made in reference to standards. 

Mr Visser replied that the South African standards were in alignment with the WTO, and 70% of the country’s standards were fully aligned internationally. The regulations fit into the standards development process, although this was not a statutory requirement but rather a code of good practice. The Bills would enable more efficient application of those standards and regulations, as well as not posing unfair barriers to trade. He agreed that more information was needed.

Mr Olifant asked why, if the advisory forum was voluntary, it was made a statutory obligation.

Mr Zikode replied that it was voluntary, but agreed that placing it in the legislation itself could reinforce it.

Mr Olifant commented that it was shocking that there was no standard on bricks. South Africa had built more than 3 million houses and there were several issues around the quality of houses, as well as illnesses due to the materials used.

Mr Zikode replied that in regard to asbestos there were mandatory regulation. One of the issues was that if a compulsory standard was imposed but there were not sufficient sanctions nor was it clear what regulator would be responsible for enforcement, it would then be very difficult to gain compliance.

Mr Visser replied that currently there was a process in place to revise building regulations. This involved close cooperation between the regulators, implementers, building community and the standards development community. The building regulations were becoming more intense. They allowed for multiple solutions to a problem, but placed a greater emphasis on the professionals who would be undertaking the building. There were voluntary standards for bricks.

Mr Moeletsi replied that there would have to be an assessment whether bricks were the prime reason for illnesses and poorly constructed houses, or if it was a question of workmanship and construction itself. There should be a clear definition of the problem, and conclusive evidence of the source of the problem. Standards were not compulsory, but rather they could only recommend to the Minister that a specific standard should be made compulsory and provide justification to do so.

Mr S Rasmeni (ANC) asked whether the problem must occur before standards were made.

Mr Moeletsi replied that this was not so; standards were developed even though there were no problem issues.

Ms D Ramodibe (ANC) asked about the aims of the NCRS Bill and wanted to know the manner in which approval was granted.

Mr Moeletsi replied that the intention was not to create a huge bureaucracy, but to improve compliance and inspections. They had introduced the 80/20 principle. Eighty per cent of products would be regulated from the source, meaning they would look at manufacturers and importers, whilst 20% would deal with the retail outfits. The staff should be able to focus on a multiple of issues.

Ms Ramodibe wanted to know the role of local government.

Mr Visser replied that SABS was working with local government on a number of issues, including attempts, together with the management division, to ensure good management within local government and there had been some success.

Ms M Ntuli (ANC) commented that she hoped to be assured that all that was done was to build better lives for the people in South Africa. She asked what impact would this Bill have on the community.

Mr Zikode replied that the separation of the bodies would allow others to enter the market. He added that in South Africa there were not enough companies that did testing and certification. There would be better focus on regulation. The SABS would not be in a position to call for standards to be compulsory by reason of this being profitable. The services provided would not hinge on whether or not profits would be shown.

Mr Moelesti added that once there was regulation, this would have the effect of increasing the safety of all the community.

Ms Ntuli asked, if all the regulations were going to be published, how would it be done.

Mr Zikode replied that the regulations could either be purchased from SABS or would be available at the library.

Ms Ramodibe was concerned, especially in rural areas, that it seemed as if there were no inspections.

The Chairperson intervened and remarked that members were raising the issues as sharply as possible. They had to prepare for the public hearings. When members asked for more information it would be prudent for this to be provided so that the Committee could better understand the issues. The issues had not yet been exhaustively addressed, since this was the tabling process only. The Committee would have the benefit of public hearings and would engage with them. After that process, Members would decide what was to be done in order to form the best regulations for the country.

Mr Zikode was grateful for the input of the members and asked for the opportunity to return with a more detailed presentation.

The Chairperson responded that the Committee would not be able to hear the same presentation again. The public hearings would be able to provide more insight. At the end of that process the Department would be given the opportunity to include any comments on the insight, and would be able to engage members again.

Ms Ramodibe asked that the issue of coordination be addressed.

The Chairperson noted that government sought to work in clusters. He wanted to know if the work would overlap in the clusters, and how would those issue be coordinated.

Mr Zikode promised that the best possible people for the Board would be appointed.

The meeting was adjourned.