Technical infrastructure institutions’ contribution to government’s COVID-19 response; DTIC Budget: Committee Report
28 May 2020
The Portfolio Committee on Trade and Industry was briefed via a virtual meeting on the Technical Infrastructure Institutions’ contribution to government’s COVID-19 response. The Competitiveness and Growth Division of the Department of Trade, Industry and Competition, which led the delegation, noted that there was a huge demand for personal protective equipment (PPE) products and other products related to Covid-19.
The South African Bureau of Standards said it had provided support for essential services and safeguarding the health of everyone who came to the SABS campus. A small laboratory complement had continued to work and was looking at assignments bought for public health sector. A standard had been approved for a re-usable sanitary towel.
The National Regulator for Compulsory Standards reported it had supported essential services in processing applications for detergents, masks, disinfectants, and measurements of the packaged goods, including personal protective equipment and automotive services to support essential services. The NRCS had re-engineered processes and issued temporary permits for masks. There had been no regulation for sanitisers so the NRCS had submitted a standard to the Minister. The Regulator had found that the electronic platform could be used most effectively in several aspects of its work and that certain inspections could be done online.
The South African National Accreditation System staff had been unable to go on site and so had developed a remote assessment process that met international standards. A total of 12 laboratories, including the National Health Laboratory Service and private laboratories, had been identified to be accredited for COVID-19 testing. A working group was being established to provide guidance for the calibration of the infrared (IR) thermometers used for testing for a high fever. SANAS had accredited three laboratories to test sanitisers, disinfectants and soaps. A difficulty was that there was no accredited laboratory for testing masks.
The National Metrology Institute of South Africa had been involved in the development of a sanitiser solution for taxis and was part of the national ventilator projector, providing accurate measurements to ensure that the ventilators would be safe.
Members were particularly interested in any lessons learnt by the institutions during the Covid-19 lockdown. How would the entities change things as a result of those lessons learnt? Members also asked about the financial implications of the lockdown period. Would the four institutions be in a position to implement the re-imagined economic strategy? How were the entities going to ensure that children would not get substandard equipment when schools re-opened? Had there been any incidents of certification being issued fraudulently or illegally? How many NGOs had been assisted in terms of Covid-19 regulations, and how many organisations from the rural areas? Had the export restrictions had any impact on the country’s agreement with the World Trade Organisation?
The Committee adopted its report on the Department of Trade, Industry and Competition's Budget.
The Chairperson welcomed everyone.
He asked for a roll call and absentees and then presented the agenda. DTIC would provide an overview followed by a presentation by each of the technical infrastructure institutions.
Technical infrastructure institutions’ contribution to government’s COVID-19 response
Ms Phele, Acting DDG: Competitiveness and Growth, DTIC, introduced the presenters and stated that the presentation was to be shared by all entities. She was accompanied by Dr Tshenge Demana, Chief Director: Technical Infrastructure; South African Bureau of Standards (SABS) – Jodi Scholtz: Lead Administrator; National Regulator for Compulsory Specifications (NRCS) – Edward Mamadiso: CEO; SA National Accreditation System (SANAS) – Dr Ron Josias: CEO; National Metrology Institute of South Africa (NMISA) - Mr Ndwakhulu Mukhufh: CEO.
The Chairperson appreciated that the presentation had been sent timeously.
Ms Phele provided an overview, locating the work of the technical infrastructure institutions within DTIC. She said the entities would present their contributions to the Covid-19 response by the government.
Dr Tshenge Demana spoke to the mandate of each of the institutions, noting that there was a huge demand for personal protective equipment (PPE) products and other products related to Covid-19.
Ms Scholtz announced that SABS had been collaborating with the Department of Women, Youth and People with Disabilities for two years to finalise a standard for washable sanitary towels – a first in Southern Africa. The standard had just been finalised.
SABS had provided support for essential services and safeguarding the health of everyone who came to the SABS campus. A small laboratory complement had continued to work and was looking at assignments bought for public health sector.
Mr Mamadiso explained that NRCS supported essential services in processing applications for detergents, masks, disinfectants and measurements of the packaged goods, including PPE and Automotive services to support essential services. The NRCS had re-engineered processes and issued temporary permits for masks. There had been no regulation for sanitisers, so the NRCS had submitted a standard to the Minister.
The executive members and staff of NRCS had contributed to the pandemic fund. NRCS had learnt many lessons during Covid-19 and found that the electronic platform could be better used and that certain inspections could be done online. The modernisation project had become very important.
South African National Accreditation System (SANAS)
Dr Josias presented a comprehensive report on how SANAS had assisted in the fight against Covid-19. The staff had been unable to go on site and so had developed a remote assessment process that met international standards. While new applications were accepted, those applications were not processed. There had been many withdrawals in applications for financial reasons as companies could no longer afford certification and so SANAS had provided a two-month rebate and extended credit from 60 days to 90 days.
He stated that a total of 12 laboratories, including the National Health Laboratory Service and private laboratories had been identified to be accredited for COVID-19 testing. A working group was being established to set guidance for the calibration of the infrared (IR) thermometers used for testing for a high fever. SANAS had accredited three laboratories to test sanitisers, disinfectants and soaps. A difficulty was that there was no accredited laboratory for testing masks. The inspection of diagnostic X-ray equipment continued during the pandemic to ensure that that the medical profession received accurate and reliable diagnostic reports, especially when dealing with COVID-19 infected patients. Accredited Gas Test Stations had tested gas cylinders, especially for hospitals.
Dr Josias added that he was leaving SANAS the following day and he thanked the Committee and Cabinet for allowing him to serve at SANAS for the past 22 years.
National Metrology Institute of South Africa (NMISA)
Mr Mukhufh stated that NMISA had activated its Disaster Management Plan in line with the NMISA Business Continuity Plan and had aligned its plan to government regulations. Staff had worked from home with laboratories only opening when essential services requests were received from government and industry.
NMISA had been involved in the development of a sanitiser solution for taxis and was part of the national ventilator projector, providing accurate measurements to ensure that the ventilators would be safe. NMISA had continued to prepare for the Proficiency Testing (PT) scheme that needed to go out in May and June for food testing in Africa [International Atomic Energy Agency (IAEA) contract for food safety in Africa].
Ms Phele concluded the briefing. She noted that the change in the world would require people to adapt and working remotely would be critical, so entities would have to continue to develop that role. It was anticipated that the pandemic would have a negative impact on the entities in a financial sense and DTIC would have to look at how it would be able to support those entities.
The Chairperson invited responses from Committee Members.
Ms Y Yako (EFF) knew that the Committee had struggled with the entities, especially NRCS and SABS, in terms of performance in the last few financial years. She was worried with the Covid-19 situation happening and the fact that there was more work whether SABS and NRCS, especially, were coping. What was SABS and NRCS doing in terms of making sure that they had the capacity because when the country went to lockdown level three, there would be more demand for regularised and accredited material? Companies were taking shortcuts as the demands got bigger. How were they going to ensure that children would not get substandard equipment when schools re-opened? What was the entity’s engagement with the Department to prevent that? The NRCS said that it had a complaints system. What was that complaints system and how were the complaints resolved?
Ms N Motaung (ANC) asked NIMSA, SANAS and NRCS what lessons they had learnt during the lockdown and how would they change things as a result? Had there been any incidents of certification being issued fraudulently or illegally?
Mr F Mulder (FF+) addressed the representatives of all four entities. Considering the Sixth Administration’s Re-imagined Industrial Strategy as a central strategy to deepen industrial development and the challenges that the four entities, especially the NRCS and the SABS, had faced in the past year and the fact that the DTIC would be facing a budget cut, would the four institutions be in a position to implement the strategy?
Mr S Mbuyane (ANC) had two clarity questions.
The Chairperson indicated that his connectivity was very bad and it was difficult to hear his voice.
Mr Mbuyane asked about the duty rate in terms of imports. He asked how many NGOs had been assisted in terms of Covid-19 regulations, and how many organisations from the rural areas had been assisted? He asked about export restrictions and whether they had had any impact the country’s agreement the World Trade Organisation. Was there an exception for the period? Could he be given some details of the wellness programme? Was there a focus on the accreditation of B-BBEE companies and who was verifying that? He also asked what lessons had been learnt by the technical infrastructure institutions from the Covid-19 and what had they learnt about integration of their approach?
Ms J Hermans (ANC) asked all four entities what the lockdown impact was on the existing local, regional and international trade agreements. She was glad that the entities had included the lessons learnt as the way people worked would change and, hopefully, improve the way that things were done. She wished Ron Josias well on his journey onward and thanked him for his contribution to SANAS.
Ms Scholtz stated that she was joined by a large senior management team from SABS. In response to Ms Yako’s question on the entities’ performance, she stated that what management had done was to undertake an organisational review and was looking at a revised strategy, considering some of the key strategies that DTIC was focusing on, and was embarking on a process of mapping out what SABS could do with accreditation of both systems and products. SABS was interrogating its testing processes. Together with the Department, SABS had refocused its priorities and determined what it was that it could do. One of the key lessons was that the institution had not been fully prepared as an institution to test all PPEs and medical devices, such as ventilators, was something that SABS did not have the capacity to test. SABS was looking to expand its capacity to test ventilators and cloth masks.
Ms Scholtz stated that there had been no fraudulent certificates issued but there had been misrepresentation of the SABS mark on a disinfectant chamber indicating that SABS had tested the product. The legal department had been in contact with the company which had removed the mark. It was found that the SABS test applied only to the chemical used in the product.
She told Mr Mulder that once SABS had revised its strategy, those areas in which SABS could support the re-imagined strategy would emerge but obviously the entity would be led by the Department in terms of what the key sectors would be.
What had SABS had learnt was that the technical infrastructure institutions needed to be in the room when policy decisions were made so that the institutions could indicate what was possible. Often the institutions were only brought in at the tail end.
Mr Lungelo Ntobongwana, Acting Executive: Laboratory Services, SABS, stated that Covid-19 had exposed SABS’s testing capabilities. SABS had been collaborating with upcoming and well-established companies during the lockdown period. SABS had been working in collaboration with CSIR in terms of developing a prototype for testing invasive respirators. SABS had also been meeting with a private company, Promedic, and had developed a relationship for working on medical products. SABS itself had been developing technical standards for testing masks and respirators and the request for approval for that had already gone through to the relevant authorities that would ultimately give SABS the authority to do such tests.
Mr Katima Temba, Head of Certification Services, SABS, stated that 24 inspectors had been trained to continue with desktop reviews of essential products and had been busy with consignment inspections, with a rapid turnaround. SABS had been collaborating with entities on the inspection front. Work had been ongoing and SABS was getting momentum and making sure that all procured products had the right certification. The day-to-day activities and the audit of certifications was difficult to do online as the officials needed to make observations but guidelines had been provided by SANAS. Most of the applications for new audits would have been deferred.
Ms Scholtz stated that SABS had looked at the impact of Covid-19 on the budget, especially because about 60% of its customer base was SMMEs. The DDG had asked SABS to undertake an analysis of the situation and there were ongoing meetings with the Department.
Mr Mamadiso responded to Ms Yako. The NRCS had a turnaround plan but he thought that discussion would happen on 24 June 2020 when NRCS was due to appear before the Committee. He admitted that the turnaround plan had been severely impacted by Covid-19, especially in the completeness of revenue as many companies that were to be inspected had been closed through lockdown level 5 and some were still closed under lockdown level 4. He was not sure how such companies would pay the levies. The NRCS was investigating the impact on the operational plans.
The complaint system had been made information available on the website. It contained an email address for every area. Complaints were reviewed by the Head of each Division and, if necessary, inspectors fully investigated complaints.
He explained to Ms Motaung that most lessons learnt had been addressed in the presentation. The NRCS had to accelerate the modernisation process, especially in supporting exports and imports and trade facilitation through electronic measures. The NRCS knew of no fraudulent certificates.
He told Mr Mulder that he agreed with Ms Scholtz that entities should be involved early on in the policy discussions when the re-imagined economic strategy was discussed. He knew there was a master plan for the motor industry but the entity had not been part of those discussions. Consequently, when the regulator imposed regulations of compliance by the automotive industry, it seemed that it was in conflict with government’s plans. Government was encouraging exports but NRCS was demanding levies for the required compliance. It was important for the entities to be involved in policy development.
However, Mr Mamadiso assured the Committee that when it came to the re-imagined economic strategy, NRCS was able to support government in all identified areas. He had struggled to hear Mr Mbuyane clearly but he thought he heard something about import facilitation duties and responded that the NRCS did not charge such duties. Inspections done at ports of entry were ordinary market compliance inspections. The person had to apply for a Letter of Authority (LOA) to import the produce but no duties were charged. He had also heard something about the WTO and assumed that Mbuyane was talking about barriers to trade. In the process of compulsory specifications, the process had already taken into account that the specification did not become a barrier to trade. He could only answer what he had heard but Mr Mbuyane had said something about non-profit organisations. The NRCS did not classify companies on the basis of NPO, profit-making, etc. NRCS classified only on the basis of whether the company was a levy payer or not, so he could not say specifically whether NPOs had received special assistance.
Dr Josias agreed that the lessons learnt had been stated by his colleagues but everyone realised that the way of work would not be the same after Covid-19. The big challenge was yet to come when the impact hit the economy. In his presentation he had stated that SANAS had to review its strategy. Customers were important and they were price-sensitive but needed support to ensure that the products were safe. There had to be interventions to assure people in SA that the goods were safe and healthy and also to facilitate trade across the borders. ICT had been spoken about but one lesson that had been learnt was that it was not as scary or as difficult as thought. People were getting used to doing assessments online and officials and customers were getting comfortable with it.
Dr Josias added that finances and the ability to move forward would depend on how the entity reviewed what it currently had. The entity would have to tighten up and come up with new ways and schemes to ensure that they could deliver on national priorities. There was no record of fraudulent certificates. They did have a hotline but nothing had been reported there either.
Dr Josias, too, had been unable to catch all of Mr Mbuyane’s questions. But he agreed with Mr Mamadiso in respect of the principles of the WTO. All of the accreditation requirements were captured in the Barriers to Trade Agreement. Responding to the question on B-BBEE, he said that if the question was about continuing service, SANAS had had to revise the standard to allow remote verification and had opened up requirements for verification for certification but a lot of checks had been built into the system and it was perfectly secure. B-BBEE companies were included in the remote assessments. If there were problems, SANAS would pick it up through the market or through its complaints system. Dr Josias thanked Ms Hermans for her good wishes.
He stated that SANAS operated in terms of both international and regional agreements. On the regional side, SANAS operated through the African Accreditation Corporation, of which he was Chairperson. The corporation had had to adjust but had continued to hold general and executive committee meetings via Zoom and the regional body had continued to grow to meet the changes that would be coming with the African Continental Free Trade Area Agreement. On the International front, a joint ilac (International Laboratory Accreditation Cooperation) general and executive committee meeting had been held. 120 economies belonged to ilac. Despite not being able to meet face-to-face, SANAS had been able to meet all obligations under agreements signed.
Mr Mukhufh stated that most of the questions had been answered by his colleagues. He responded to the question on lessons learnt. The lesson that he wanted to highlight was the way in which entities had taken it for granted that they could source goods from other parts of the world but he had realised that the entities needed to develop their own capabilities so that they could support SA industries to produce the products when required. He and his team had been considering the situation post-Covid-19 and how the local trade and manufacturing environment would develop and what technical services would be required to stimulate the growth of the economy. It was in that process that the issue of prioritisation became important and some capabilities had to be developed to produce own products where the restriction of goods had impacted on the economy.
Mr Mukhufh added that the way in which one predicted the future had to change. One could no longer look at the past to predict the future but now one had to turn around and look the other way so that one could anticipate what was coming and prepare for it. NMINS had to be ready as the certification process needed a very sound structure. He did not respond to other questions as they had been thoroughly dealt with.
Ms Pele responded to Mr Mbuyane’s question about import duty rebates and export permit processes. Those were the two instruments used under the International Trade and Administration Act to ensure that there was adequate supply in the domestic market. She requested that that conversation be parked until Tuesday, 2 June 2020, when ITAC would make a presentation on how it had dealt with Covid-19 measures. The pandemic was having an impact on the productive sectors and the Department needed to look at the sector and would need to tweak some measures to be as supportive as possible in the light of the challenges posed by the pandemic. The Department had done a lot of work to get local manufacturers and suppliers to produce PPEs and had joined Business SA to coordinate issues of supply and demand in a more systematic manner. DTIC was in discussion with National Treasury to use public procurement levers to support local manufacturing going forward.
The Chairperson encouraged the DDG to follow through on the work that she had reported on. It was around business continuity management because she was managing a transition and it was important to find opportunities in the new environment. The work that the Department did with the accredited conformity assessment bodies was quite important as they contributed to quality and standard. Sustainability, value-addition and organisational set-up would create pillars to develop a more stable environment.
In respect of the comment by Ms Scholtz on the partnership with the Department of Women, Children and Persons with Disability, he noted that one found “dignity packs” but he was concerned about the re-usable sanitary towels in terms of the water needed to make them hygienic. It might be necessary to look at the water situation.
The Chairperson thanked the heads of the entities for their contribution. He referred to the point about the ventilator testing. The CEO of Denel had told the Committee that Denel was working on a ventilator. Collaboration was important. The institutions might look at other entities of government and collaborate with them. He added that the partial testing should be encouraged. The integrability of the entities and alignment of the entities to avoid duplication would be important.
He asked the DDG to provide closing remarks.
The DDG stated that the Department had a process to integrate entities. She asked that Dr Demana say a few words.
Mr Demana referred to reducing the overlap. That was something that the DG had asked them to address and to see how work could be allocated better amongst the entities and reduce the possibility of them doing the same thing, so he had set up a project with TIPS, a DTIC service provider, and the service provider was looking at all the mandates to ensure that the valuable work would not be removed in the process. As soon as the consultations and research had taken place, he would take proposals to the DG.
The DDG thanked the Committee for helping the Department and the entities to navigate the difficult terrain. No one knew how the pandemic was going to pan out and how long it would last, so everyone needed to be responsive as they started to look at the economic structures going forward. Technical infrastructure institutions had a lot to contribute to the economy but often the work of the institutions was not properly understood. The Department had to make the public aware of the work that they did and the time period needed to do things. The pandemic had bubbled up new opportunities. Six months ago no one had thought of making cloth masks but every clothing firm and person with a sewing machine in the townships was now using the opportunity to make masks. However, the response to Covid-19 should be organised more strategically to ensure that industry was as coordinated as possible. She thanked the Committee and stated that it was always a pleasure to share the work of the Department with Members.
The Chairperson thanked the Department and the entities for the interaction.
Consideration of the Budget Report by the Committee
The Committee Secretary asked for the report to be shown on the screen and he showed the Committee how the inclusions suggested by Members had been included. No new issues had been submitted to the secretariat.
The Chairperson asked if there were any comments from Committee Members.
Mr Mbuyane proposed the adoption of the budget report.
Ms Hermans seconded the adoption of the report.
Mr Mulder stated that he had nothing against the report but no 5.10 was not acceptable to the FF+ and so the FF+ could not support the report.
The Chairperson noted and agreed to indicate in the minutes that the FF+ voted against the report.
The Secretary added that the ACDP and DA had also previously had reservations about certain points in the report.
Resolution: The Committee resolved to adopt the DTIC Budget Committee Report with an objection from the FF+.
The Secretary stated that the Committee would receive a briefing from ITAC and the Fourth Financial and Non-financial Reports of DTI and EDD on the following Tuesday. Secretary Madima would host that meeting.
The meeting was adjourned.