Initial briefing on the National Regulator for Compulsory Specifications (NRCS) Bill and the Standards Bill to the Select Committee on Economic and Foreign Affairs 18 March 2008

the dti - Enterprise and Industry Development Division and SABS team Dr Tshenge Demana (Chief Director) Ms Elsabé Steyn (Director) Ms Anna-Marie Lötter (Deputy Director) Mr Moses Moeletsi (SABS Regulatory Division Executive) Dr Geoff Visser (SABS Standards Division Executive)

Process – How did we get here? FRIDGE Study on Standards, Quality Assurance, Accreditation and Metrology (technical infrastructure) completed April Cabinet approved project for restructuring of Technical Infrastructure system on 22 May the dti Policy on Modernising the South African Technical Infrastructure approved and finalised in These two Bills are last elements of policy implementation. The two bills were approved by Cabinet on 22 August Bills have now been amended taking on board concerns raised by Cabinet as well as by the Portfolio Committee on Trade and Industry.

Technical Infrastructure Technical infrastructure system set standards, test against standards and accredit testers and others to ensure competence to perform technical measurements. It provides an objective basis for competitiveness as quality, standards and performance are inherent to meeting supplier and customer needs. It is critical to industrial upgrading in the sense that- quality requirements and customer safety needs can be met; low quality import control prevent undercutting of industrial productive base. It supports the work of Regulators responsible for the protection of the health and safety of the public and the environment.

The rationale for change Globalisation – increasing demand on trading economies to continue to guarantee that their products are safe and fit for purpose. Industrial policy – upgrading needs of our economy and opportunities to integrate into global supply chains require an effective technical infrastructure system. Effectiveness and efficiencies – elements of the system require adjustments to better focus on current economic needs, needs to protect the public and the environment and to better focus public entities on clear mandates as will be more obvious as the presentation unfolds.

SOUTH AFRICA’S TECHNICAL INFRASTRUCTURE CONFORMITY ASSESSMENT Prove technical requirements are met Testing, Inspection & Certification SUPPLIERCUSTOMER VOLUNTARY SECTOR Customer/Market Requirements REGULATORS (including NRCS) Administer regulations REGULATED SECTOR GOVERNMENT Set policy, laws & technical regulations NMISA- MEASUREMENT Underpins testing & calibration through national measurement standards SANAS- ACCREDITATION Assures competence SABS- STANDARDS Specific technical requirement of a product or a system

The need for two separate organisations the dti identified the need to reconsider the mandate of the South African Bureau of Standards (SABS) some years back. In terms of current mandate SABS is responsible for three activities: the promotion, development and maintenance of national standards, the provision of conformity assessment services and the administration of compulsory specifications (technical regulations) that originate largely from the dti’s regulation of products and processes. The combination of responsibilities to perform conformity assessment procedures such as laboratory testing, certification and inspection in order to assess whether products or services comply with technical requirements while at the same time regulating the same product creates a conflict of interest. The confusion between the SABS’s function of writing standards and the SABS’s role in implementing compulsory specifications.

The need for two separate organisations - continued In benchmarking the South African regulatory systems with others in the world, it became clear that the current practice of having a standards body as a regulatory body is not optimal or advantageous. It impacts on the efficiency and effectiveness of the regulator and the quality of technical regulations that the regulator administers and divides the attention of the Standards Body who should develop and maintain standards and provide commercially viable conformity assessment services. The benchmarking however confirms the importance of alignment of the three key legs of the SA technical infrastructure. The benchmarking included developed and developing countries. The developing countries were Brazil and Malaysia.

Respective purpose of the two Bills The National Regulator for Compulsory Specifications Bill will establish the National Regulator for Compulsory Specifications which will be responsible for the administration of compulsory specifications. These compulsory specifications, also called technical regulations, cover the automotive, electro-technical, mechanical, health related, building and construction materials, food and associated as well as the environmental protection sectors. An example of a proposed compulsory specification that is currently being developed and is relevant to all of us is the regulation for energy efficient light bulbs. The aim of this regulation is to ensure that the energy efficient light bulbs available to consumers will be safe, and meet performance criteria in terms of minimum output as well as lifespan. This Bill would transfer the administrative elements that are relevant to compulsory specifications from the current Standards Act to the new National Regulator for Compulsory Specifications Bill.

Respective purpose of the two Bills – continued The new Standards Bill provides for the continuation of South African Bureau of Standards as a public entity. The mandate will cover the development of voluntary standards and maintenance and the provision of conformity assessment services. There are currently 5900 South African National Standards (SANS), including in the following sectors: -Chemical and mining standards: including dangerous goods, industrial and general chemistry, paints, petroleum, coal, rubber and plastics, and mining standards, - Electrotechnical & ICT standards: for example, the wiring code, appliances, information communication technology, physics and electricity distribution, -Food and health standards: including the many standards relating to food, water, pharmaceuticals, pesticides, medical and health-related topics, -Materials standards: covering clothing, textiles, leather and footwear, timber and paper, -Transportation standards: including vehicles, buses, lifting equipment and other aspects of transportation.

Mandate of the NRCS The broad mandate of the NRCS - to promote public safety and consumer protection issues through the enforcement of compulsory minimum standards for the safety and performance of products and services.

Objects of the NRCS The objects of the National Regulator for Compulsory Specifications are to: -develop recommendations to the Minister with regard to compulsory specifications; - administer, and maintain compulsory specifications; - carry out market surveillance through inspection in order to monitor compliance - enforce compliance with compulsory specifications.

Board of the NRCS The Board consist of not less than seven, and not more than nine members and is made up as follows: -the chief executive officer of the National Regulator for Compulsory Specifications by virtue of his or her office; -the rest of the members, who are non-executive members and are appointed by the Minister.

Board of the NRCS - Continued When appointing the members of the Board, the Minister must ensure that the members of the Board: - are broadly representative of the demographics of the country; and -have sufficient knowledge, experience or qualifications relating to the functions of the National Regulator for Compulsory Specifications and the responsibilities of the Board. The Minister must designate a member of the Board as chairperson.

Advisory Forum The Board, must establish an advisory forum with a balance of interests consisting of representatives of organisations who have an interest in the matters contemplated in this Act. The Forum must advise the Board on: -matters in respect of which the National Regulator for Compulsory Specifications could play a role; -any other matter on which the Board requests advice. The Board must establish a constitution and, if necessary, rules for the Forum.

Financing of the NRCS The NRCS will be financed through money appropriated by Parliament and fees as prescribed by the Minister of Trade and Industry after consultation with the Minister of Finance. It is estimated that 18% of the NRCS expenses will be financed through MTEF transfer payments and 82% will be financed through fees. The estimated turnover for the NRCS for 2008/9 is R144 million, for 2009/10 R157 million and for 2010/11 R170 million.

CEO PARECEPTIONIST Operations Manager Strategic Support Services HRLEGAL IT FINANCEINDUSTRY LIAISON Proposed organogram of the NRCS:

The envisaged NRCS NRCS UNECE WP 29UNECE WP 29 OIMLOIML CodexCodex IndustryIndustry SABSSABS SANASSANAS NMISANMISA Advisory Forum Electrotechnical/Automotive/Chemical/ Mechanical/ Food/ Legal Metrology Acting CEO Mr Moses Moeletsi NRCS Board dti Quarterly Technical Infrastructure

Staff of the NRCS All employees of SABS employed in the Regulatory Department and those that provide administrative support to the NRCS are transferred to the National Regulator for Compulsory Specifications in terms of section 197 of the Labour Relations Act, 1995 (Act No. 66 of 1995);

Mandate of the SABS The broad mandate of the SABS is to support trade and industrial development by ensuring that South Africa’s standardisation activities continue to support the needs of industry in a fast-paced global environment. The SABS also supports regulators responsible for protection of public health and safety as well as the environment through the provision of standards.

Objects of the SABS The objects of the South African Bureau of Standards are to: -develop, promote and maintain South African National Standards; - promote quality in connection with commodities, products and services; and - render conformity assessment services and matters connected therewith.

Board of the SABS The Board consist of not less than seven, and not more than nine members and is made up as follows: - the chief executive officer of the SABS by virtue of his or her office; - the rest of the members, who are non-executive members and are appointed by the Minister.

Board of the SABS - Continued When appointing the members of the Board, the Minister must ensure that the members of the Board: - are broadly representative of the population of the Republic; and - have sufficient knowledge, experience or qualifications relating to the functions of the SABS and the responsibilities of the Board, including in particular business management, finance, marketing, international or foreign standardisation and technical infrastructure matters. The Minister must designate a member of the Board as chairperson.

Advisory Forum The Board, must establish an advisory forum with a balance of interests consisting of representatives of organisations who have an interest in the matters contemplated in this Act. The Forum must advise the Board on: -matters in respect of which the South African Bureau of Standards could play a role in matters contemplated in this Act; -any other matter on which the Board requests advice. The Board must establish a constitution and, if necessary, rules for the Forum.

Government Consultative Forum The Board must establish a Forum for consultation between the South African Bureau of Standards and relevant government departments who have an interest in the matters contemplated in this Act, including the use of South African National Standards in law. The Forum must advise the Board on: -matters in respect of which the South African Bureau of Standards could play a role in matters contemplated in this Act; -any other matter on which the Board requests advice. The Board must establish a constitution and, if necessary, rules for the Forum.

Financing of the SABS The SABS will be financed through money appropriated by Parliament (23%) and through fees charged in respect of: setting and issuing National Standards (3%), training services in connection with standardisation (1%) and provision of conformity assessment services (certification 44%) and testing and inspections (29%). It is estimated that 77% of the SABS expenses will be financed through fees and 23% through MTEF transfer payments. The 23% MTEF transfer payment is used for standards development and maintenance. The estimated turnover for the SABS for 2008/9 is R508 million, for 2009/10 R560 million and for 2010/11 R618 million. the dti has made and will continue to make budget allocations to the SABS for the development and maintenance of standards.

CEO PA to CEO CFO Standards development Standards Sales and Information CommercialStandards Corporate servicesHuman resources Proposed organogram of the SABS:

The envisaged SABS SABS ISOISO IECIEC IndustryIndustry SANASSANAS NMISANMISA Advisory ForumAdvisory Forum GovernmentGovernmentConsultativeForum StanSA/ SABS Commercial (Conformity Assessment) CEO Mr Martin Kuscus SABS Board dti Quarterly Technical Infrastructure

Staff of the SABS The CEO and all other employees of the SABS, except the employees employed in the Regulatory Division and those that provide related administrative support, remain employees of the reconstituted SABS.

THE END –Thank You