Spencer Henson University of Guelph

Spencer Henson University of Guelph
National Laws, Regulations and Institutional Capabilities for Standards Development Spencer Henson University of Guelph The aim of this module is to explore the importance and role of standardization capacity at the national level. It examines the institutional capabilities required to develop and implement standards within the context of developing countries and highlights the challenges and opportunities associated with the increased importance of standardization for competitiveness in both national and international markets.

Overview Background Standards and development Standards system
Standards development Conformity assessment Technical and administrative capacities Private sector strategies Enhancing capacities Conclusions This slide provides an overview of the presentation. Each of these key issues will be discussed in turn.

Conclusions Standardization capacity important
One size does not fit all……. Roles in capacity-building Effective capacity-building High cost-high benefit This presentation has served to highlight the importance of standardization to economic and social development. In our daily lives, and particularly in an industrialised country context, it is easy to take for granted the roles that standardization plays, for example when we take a taxi ride, buy a new computer or take our car to be serviced . In many developing countries, however, standardization infrastructure is rudimentary at best and this acts to impede overall processes of economic development and the promotion of social welfare. At the same time, however, it is important to recognise the quite distinct standardization needs of countries at different levels of economic development. One size does not fit all! Efforts to enhance standardization capacity must recognise the considerable resource costs involved and be customised to meet current and foreseeable standardization needs rather than be modelled on ‘best practice’ in an industrialised country context. Whilst more standardization capacity is better than less, everything else being equal, capacity should develop in line with the needs of standards users. The development and implementation of standardization capacity requires the active participation of the public and private sectors and civil society. Thus, investment in physical infrastructure and human capital must be accompanied by the development of institutional structures that permit and facilitate the participation of all tat have an interest in standards development. Given the scope of standardization activities, there are compelling reasons why efforts to enhance standardization capacity should be mainstreamed as part of general development efforts. Likewise, there is a need to develop standards-related capacity in an effective manner that takes account of local needs and circumstances. Perhaps the standards infrastructure of industrialised countries does not present the best model on which to develop such capacity in a developing country context? In conclusion, whilst the development of standardization infrastructure is undoubtedly high cost, it is also high benefit!

Background Incidence of standards Drivers of standardization
Role of standardization It is widely recognised that a greater number and wider range of standards are being implemented globally. This is most evident in industrialised countries, but also increasingly middle and low-income countries.

Notifications of Technical Measures to GATT/WTO, 1981-2002
Number of notifications over the period 1981 to 2001 increased from less than 150 to over 4,600.

Notifications under SPS Agreement, 1995-2000
The increased application of standards is most evident in industrialised countries, although there is also evidence that such measures are increasingly being implemented in developing countries. For example, this figure shows the notification of new SPS measures (covering food safety and plant and animal health) to the WTO over the period 1995 to Thus, increasingly an issue in trade between developing countries as well as trade from developing to industrialized countries.

Background Incidence of standards Drivers of standardization
Role of standardization Simultaneously, a wider range of standards is being implemented, covering both products/services and the processes by which they are manufactured/provided and distributed. Thus, for example, standards are laid down dictating the characteristics of products, the systems of quality control employed in their manufacture, impacts on the environment etc. As a consequence, suppliers of a particular product may be subject simultaneously to numerous standards. Knowledge is becoming an increasingly critical factor in international competitiveness. In this context technological change can be both an opportunity and a threat for developing countries in increasingly international markets. To a large extent it depends on the ability of an economy to react to technological developments and exploit them to its advantage. Currently, it is evident that developing countries have become increasingly polarized between those that are able to adjust to technological change and enhanced international competition and those that are not. Largely, technology is expressed through standards, providing a coherent description of technological practices and facilitating the communication of technological information. Non-proprietary standards thus provide a relatively low cost means to define technologies in a concise and universal language. Further, standards play a critical role in ensuring the compatibility of processes, products and services over space and facilitate technology transfer. These are both critical issues for developing countries especially in the context of increasingly globalized markets. Traditionally, economists have focused on the impact of standards on production efficiency, facilitating specialization and economies of scale. Whilst standards continue to play an important role in this respect, increasing emphasis is being given to economies of scope whereby firms are able to use particular production technologies can be applied to service related but increasingly differentiated markets. Standards are also becoming of increased important element of business strategies in the context of rapid technological change, enhanced consumer concerns etc. For example, standards provide a mechanism through which the nature of products and the processes by which they are produced can be communicated across time and space. Further, standards are critical to the definition, control and assurance of quality. Indeed, compliance with standards is fast becoming critical to competition in international markets.

Standards development Conformity assessment Technical and administrative capacities Private sector strategies Enhancing capacities Conclusions

Standards and Development
Need for national standards infrastructure Need to prioritise Do have choices Capacity-building strategies Issues and needs highly context-specific There are a number of key issues associated with standards and processes of economic and industrial development. A key message of this presentation is that some level of standardization infrastructure is a pre-requisite for both economic and industrial development, although this can (and indeed does) take many different forms.

Approaches to Standardization
‘Traditional’ Approach Key objectives: Weights & measures Health & safety Static structure Domestic focus Public sector activity Regulatory focus ‘New’ Approach Domestic & external focus Extended infrastructure Flexible & dynamic structure Public-private sector activity International recognition ‘Voluntary’ standards In many developing countries some forms of standardization capacity exists, however its primary purpose has been to assure that weights and measures used in commerce (for example weighing scales, fuel pumps, taxi meters etc.) are accurate and fair. A further role is the protection of consumers from dangerous products and substances, adulteration etc. Thus, the primary focus is on domestic concerns with little or no consideration of standards in export markets. Standards institutions are generally within the public sector, with little or no role for private enterprise. Standards are mostly mandatory. In many cases standards institutions are static, inflexible and heavily bureaucratic. As a result, standards take a considerable period of time to promulgate and are frequently out-dated. The new technological and internationalised environment in which many developing counties find themselves requires a very different level and form of standards infrastructure. Functions that need to be performed include metrology, calibration, product certification, quality system registration, standards information services, training in quality control and assurance etc. Further, this infrastructure needs to address not only on domestic needs for standardization but also standards in export markets. Thus, standardization programs need to refocus from legal metrology and basic health and safety to the more specific concerns of industry and commerce. Industry will increasingly need standards that promote specialization and facilitate economies of scale, promote compatibility and facilitate access to overseas markets. In turn, this requires that the standardization infrastructure is flexible, dynamic and efficient, such that timely response can be made to changes in the demand for standards. The testing and certification elements of such systems need to be recognised internationally, whilst standards must conform to international norms. At this stage it is important that the private sector becomes involved. This can include the promulgation and implementation of standards, including participation in public sector or quasi-public sector standardization institutions. It can also extend to the provision of certain standardization services, for example laboratory analysis, calibration services and training. Thus, the private sector must recognise the need for standardization and be able and willing to allocate the required resources. This can extend to the promulgation and adoption of private standards.

Standards and Development
Need for national standards infrastructure Need to prioritise Do have choices Capacity-building strategies Issues and needs highly context-specific There are a number of key issues associated with standards and processes of economic and industrial development. A key message of this presentation is that some level of standardization infrastructure is a pre-requisite for both economic and industrial development, although this can (and indeed does) take many different forms.

One Size Does Not Fit All!
Prevailing capacity Industrialization Economic diversity Export markets Domestic consumer demands Nature of the country The size and complexity of standardization infrastructure required by a country will reflect a range of factors, many of which will change according to the level and focus of economic development: Prevailing scientific/technical/business capacity: Countries with relatively well developed basic scientific, technical and business capacity will have more scope to develop standards infrastructure. Further, such infrastructure can draw upon existing capacity, for example laboratories in government ministries and universities, business inter-linkages through chambers of commerce etc. Level and forms of industrialization: The demand for standardization services typically increases as a country becomes more industrialized. Further, the need for such services will reflect the nature of predominant industries. For example, the level and specific demands of the electronics sector are very different to those of heavy engineering. Level of economic diversity: Economies with a more diversified economy in terms of production, manufacturing and service sectors typically require more broadly-based standardization infrastructure. Whilst there may be significant complementarities between these needs, for example the development of basic standardization infrastructure, there are often also significant sector-specific requirements that must be satisfied. Importance of export markets: Economies with significant product or service exports will need the capacity to identify and comply with not only domestic standards needs but also requirements in export markets. Further, countries with a diversified export base will need the capacity to simultaneously satisfy requirements in a multitude of overseas markets. Size profile of industrial sectors: The structure and modus operandi of standardization institutions required in countries for highly concentrated sectors will be very different will be very different than for sectors dominated by small and medium-sized enterprises. Domestic consumer needs/demands: As consumer incomes increase and rates of poverty decline, the focus of standards will shift from basic needs such as health and safety to wider concerns about product quality. Further, there are other factors that are country-specific including country size, prevailing administrative/political structures and cultural norms. For example, large countries will require infrastructure at both the national and sub-national levels and appropriate structures that facilitate effective coordination and communication between these levels. Cultural norms will influence, for example, the demand for standards; the demand for a definition of ‘vegetarian’ for the purposes of product labelling in India reflects the considerable number of vegetarian consumers in that country. This suggests, perhaps, that developing countries should look to the infrastructure and capacity-building efforts of countries at a similar level of development rather than those present in industrialised countries. It also suggests that careful consideration needs to be given to the standardization needs of a country given its levels of economic development and particular characteristics.

Standards System All activities associated with standardization Focus
Elements: Regulations, rules & standards Institutions Technical, administrative & financial capacities From the outset we should be clear about what is meant by a standards system. This refers to all activities, undertaken by both the public and private sectors, associated with standardization. Thus, it includes regulatory actions as well as the development of ‘voluntary’ standards, associated institutions, technical, administrative and financial capabilities etc. Thus, for example, food safety, worker safety and environmental protection laws form put of this system, as does the development of private standards by industries bodies.

Standards System Is a national standards body needed?
Forms of standards institutions Operating principles Role of standards institutions Once the need for stands has been established, choices have to be made regarding the most appropriate ways in which to address this need given the country’s size, level of development, volume of trade, political norms etc. One of the first questions to be asked is whether a specific national body is required to promulgate standards, for example over and beyond the normal regulatory functions of government ministries and departments.

Alternatives to a National Standards Body
Existing industrial and trade practices Standards of others Association with neighbouring country Regional standardization Existing organizations The automatic response should not be to go about establishing new institutions for enhanced national standardization capacity, for example in the form of a national standards body. There are alternative, for example: Use industrial and trade practices already established and applied in the country, whether formal rules and regulations or informal norms. Use the standards of neighbouring countries (or countries at a similar level of development), trading partners (if locally appropriate and applicable) or international standards. Develop associations with a national standards body or a neighbouring country through some form of bilateral agreement. Work with other countries in the region to develop regional standardization infrastructure. We will be discussing the case of the CARICOM Regional Organization for Standards and Quality (CROSQ) later in this presentation. Use existing organizations, for example government departments, professional bodies, industry and trade organizations etc.

Positioning of Standards Institutions (2000)
Country Group Public Sector Private Sector Public-Private Total Industrialised Countries 27% 52% 21% 100% Developing Countries 88% 6% 73% 17% 10% . A key issue is the positioning of standards institutions between the public and private sectors. It is not possible to state definitively whether a national standards institution should be with the public or private sectors, or even some form of public-private entity. In principle, such institutions can be as equally effective if positioned in any of these spheres provided this is appropriate to the economic, political and social context of the particular country. A country’s level of economic development is also an important consideration; for example levels of private sector development and institutional capabilities. A further factor is the extent to which institutions are involved in the promulgation of mandatory standards (for example technical regulations) and/or ‘voluntary’ standards. Clearly, the former function falls within the sphere of the public sector, whilst the latter can be undertaken in either. It is evident, however, that there is a clear difference between national standards institutions of developing and industrialised countries. The vast majority (88%) of developing countries have positioned their standards institutions within the public sector most frequently as a division or semi-autonomous unit of the ministry responsible for industry and/or commerce. However, in over 50% of industrialised countries national standards institutions are in the private sector, whilst a further 21% have some form of public-private institution. All of the developing countries that have a private sector national standards institution are in Latin America. Regardless of where a national standards institution is positioned, in order to perform its functions effectively it must comply with certain key operational requirements.

Operating Principles Independence Responsive to industry needs
Flexible Stable Strategic focus International standardisation activities In order to perform its functions effectively, a national standards institution must conform to certain key operating principles: It must be independent from government influence in terms of its administrative and (in particular) technical functions. It must be responsive to the needs of industry as well as public policy-makers. It must be sufficiently flexible to enable new priorities and demands to be addressed. It must be both politically and financially stable in order that longer-term work plans can be developed and implemented. It should establish and operate to a clearly defined strategic plan that reflects its operational realities and the needs of industry and policy-makers. It should be able to participate in standardization activities at the regional and (preferably) international levels. This implies that, regardless of where a national standards institution is positioned, government and the private sector must work together on standardization policies and there must be good coordination between the various players and interested parties. Further, funding must be made available that is sufficient to meet defined standardization needs. Ideally, national standards institutions should be operated as a revenue-earning entity, although in most contexts (and certainly in most developing countries) the government will inevitably have to provide core funding.

Role of Standards Institutions
Establishing standards Testing Third party certification Accreditation Metrology Standards information In many developing countries, standards institutions have operated with the objective of protecting national industries with local and tailor-made standards. The scope of these institutions was limited given that standards did not play an important role in processes of economic development and many markets were protected from external competition. However, processes of economic liberalisation, both nationally and internationally, have necessitated that the functions of national standards institutions are extended. Some of the key basic functions are as follows: Establishing standards: This is the basic function of standardization infrastructure and is the function around which other activities revolve. It is generally the first function to evolve and can exist at the individual private enterprise, industry and national levels. Testing: Functions most closely related to writing of standards. Indeed, testing will be required as part of the research undertaken before a standard is written, for example identifying test methods and conditions that enable the determination of important product properties during use. Once a standard has been established, routine testing takes place by standards users, manufacturers and traders. This is discussed further later in this presentation. Third party certification: Certification bodies offer third party certification services to buyers and/or suppliers that want assurances that products or services they buy or sell conform to certain standards. Third party certification may be used where a party does not have the necessary testing capacity and/or the added security associated with an impartial third party is required. Accreditation: In many industrialised countries inspection, testing and certification services are offered by more than one body. In order to overcome the risk that these disparate bodies do not operate according to universally accepted rules and to allow operators of such services to operate freely, national standards bodies provide accreditation services. Metrology: Measurement plays an important role in most field of human activity. Standards of measurement are amongst the first to be developed in most countries. Metrology is closely linked to standardization; units of measurement have to be defined and the hierarchy of physical standards and measuring instruments used to represent the units and transmit their value to the measured object have to be specified precisely. Standards information: Information on national, foreign and international standards is of vital importance to manufacturers, users and traders of products and services. National standardization infrastructure plays an important role in disseminating this information in an effective and low cost manner. More generally, it has an important function in promoting standardization activities.

Standards Development
Identifying standards needs and priorities Developing standards Decision-making Implementation and promotion Review One of the basic functions of national standardization infrastructure is the development of standards. This consists of a number of distinct but closely-related activities that need to be undertaken and managed in an effective manner in order to ensure that standards are promulgated within a time-scale and in a form that meets the needs of users. Although these activities can be thought of as iterative, as presented in this slide, in practice there may be feedbacks between each of the stages. For example, the process of standards development may highlight new needs that must be incorporated into the final text. This highlights the need for the process to be flexible.

Identifying Standards Needs and Priorities
Processes Interested parties Factors in priority-setting Decision-making The first stage of the standards-development process is the identification of needs and then the prioritisation of these needs given the constraints faced by the national standardization system. Needs can be identified in a variety of ways. Firstly, the national standards body is likely to have its own ideas on standardization needs, reflecting on-going consultation and communication with standards users, government etc. Secondly, a formal consultation process can be undertaken, perhaps on a periodic basis or relating to particular areas of standardization. Thirdly, there can be an on-going acceptance of unsolicited proposals for new standards from interested parties.

Processes of Needs Identification
Needs identified by national standards body Structured consultation Voluntary suggestions

Interested Parties National/sub-national government
Manufacturers/suppliers/distributors Professional institutions Research institutions Consumers Regional standardization bodies For any standardization need there are likely to be a wide range of interested parties and these should be involved in the establishment of needs and definition of priorities, either directly or through their collective representatives (for example trade or consumer organizations).

Factors in Priority-Setting
Objectives of the standard Economic factors Government requirements Other standards Capacity/resources In setting priorities relating to standards-setting a number of factors need to be taken into account: Objective of the standard: The objectives of the standards need to be assessed relative to identified economic and social needs and priorities. These will differ according to a country’s level of economic and development and particular circumstances. For example, a standard that addresses a relatively minor food safety risk may not be a priority for a country at a relatively low level of economic development, but one which would help facilitate access to a major overseas market might. Economic factors: What are the economic costs and benefits of the standard, is there a net benefit, and to whom do the costs and benefits accrue? How do these compare with nationally defined economic priorities? Government requirements: What are the needs of government? Governments use standards as a mechanism of regulation and to facilitate government procurement. Regional/international standards: Do regional and/or international standards exist that could be adapted and implemented to meet national needs? This is likely to be a much lower cost and more timely option than the promulgation of national standards from scratch. If national standards are needed, it must be ensured that any conflicts with existing regional and/or international standards are minimised. Capacity: What is the institutional and technical capacity of the country to promulgate and implement the standard? Given this capacity, how do the relative costs and benefits of the alternative standardization needs compare? This should consider not only capacity within the national standards body, but in the country as a whole, for example academic institutions, private enterprises etc. Resources: What financial and human resources are available? How do these compare to the resource needs of each of the standardization needs? This should consider not only resources within the national standards body, but in the country as a whole, for example academic institutions, private enterprises etc. Relation with other standards: To what extent do other related standards already exist? What other standards are in place, or would be needed, in order for proposed new standards to operate effectively? In itself, the ability to perform such a priority-setting exercise requires a certain level of capacity. However, it is essential in order to ensure that standardization efforts truly reflect priorities and take due account of local needs and constraints. Thus, a small country may not be in a position to promulgate its own standards and is better placed to adopt and/or adapt regional or international standards, or the standards of major trading partners. The case of Trinidad and Tobago provides an example of this. Alternatively, small countries may act collectively, for example through a regional standards body. The case of CROSQ provides an example of this. Likewise, countries at a relatively low level of economic development should not feel compelled to mirror the standards efforts of industrialised countries; their needs are likely to be very different.

Standards Development
Identifying standards needs and priorities Developing standards Decision-making Implementation and promotion Review The most common method for establishing standards is through the establishment of technical committees involving all parties interested in the subject matter. These are generally established by the national standards body and work through correspondence or (more preferably) face-to-face meetings. The committee is responsible for drafting the standard, although this is generally distributed amongst interested parties more widely for comments. In some cases a sub-committee or working group is charged with drafting the standard. A standard may go through several stages of drafting and distribution for comments before reaching a form that is generally acceptable and can be submitted for approval. The penultimate stage is the decision whether to adopt a standard or not. Consensus-based decisions are often preferred because they aim to achieve a standard that is broadly acceptable to all parties, or rather that any disagreements are not of such magnitude that the standard as a whole is unacceptable to any party. However, consensus-building can take a considerable amount of time to establish and there is always the risk that such efforts fail and the process of standardization collapses. It also tends to benefit those parties that are more able to participate in the development of the standard and/or to present their interests. In many ways voting is a more equitable and timely form of decision-making, but it can result in a standard being developed that fails to meet the needs of certain parties but which are out-voted. In the case of mandatory standards, decisions are normally delegated to elected representatives. This mode of decision-making can also be employed in the promulgation of voluntary consensus standards, for example by industry organisations.

Implementation and Promotion
Actors Functions Revenue generation The final stage of the process is the implementation of the standard. Ultimately, the task of implementation lies with standards users, however, national standards bodies and other elements of the national standardization infrastructure (for example industry, trade and consumer organizations, commercial consultancy, training and certification organizations, educational institutions etc.) have a role in both promoting and implementing implementation. This can take the form of information dissemination, training, certification etc. This emphasis and reiterates the role of a wide range of actors in national standardization infrastructure. The process of implementation can serve to highlight further standardization needs and/or needs for the standard itself to be revised or augmented. Thus, the process of standardization should be seen as continuous, with periodic reviews in the light of changes in economic and societal needs, advances in scientific understanding and technology, consumer demands etc. Finally, it should be borne in mind that the sales of standards can be a very important mechanism of revenue generation for national standards bodies.

Role of Stakeholders Inclusion Dissemination Transparency Facilitation
The success of the standardization process relies on the participation of the entire range of interested parties. All parties must be free to participate to the degree that they are able and willing and information relating to the standardization process needs to be disseminated widely at all stages. In turn, this requires that the processes of priority-setting, standards development and decision-making are transparent. Again, however, more transparent and inclusive processes of standards development typically require more resources and take longer to conclude. This is particularly an issue in developing countries. One problem, however, is the constraints that certain parties may face that limit their participation. For example, it is frequently observed that consumer organizations (especially in developing countries) have very limited resources, especially in comparison with industry and trade organizations. This raises questions over the role of efforts to facilitate the participation of such interested parties, for example through the provision of public funding; a number of industrialised counties provide funding for consumer organizations.

Conformity Assessment
Assessment of conformity with standards Close links with standardization process Levels/forms of conformity assessment Having promulgated a standard, processes are also needed to ensure that that standard has been implemented as intended. Conformity assessment is the collective of measures taken by manufacturers, customers, regulatory authorities and third party agencies to assess compliance with standards. The purpose is to provide relevant parties, including regulatory agencies and customers, with whatever degree of certainty they require that the applicable standards have been complied with. In general, conformity assessment can take four main forms: Supplier’s declaration of conformity: Assessment based on the supplier’s internal testing and quality assurance mechanisms. Testing: Product testing by independent laboratories as a service to the supplier. Certification: Formal verification of products by a third party agency through testing and other means. Quality system registration: Audit and approval of the supplier’s quality management system by a third party. A typical conformity assessment framework has three levels. At the level of assessment suppliers, laboratories, certifiers and registrars evaluate products, processes and services for compliance. This involves a direct comparison between the products or process and the standard. Accreditation and recognition are the activities designed to assess the competence of the assessors to undertake assessment of the product or process. These add costs to the conformity assessment system and thus enhance the costs associated with private standards, but also enhance security.

Supplier Declaration of Conformity Role of Third Party
Product Testing Product Certification Quality System Registration Assessment Supplier’s own testing and quality assurance Supplier Testing product Independent laboratory Certification of products against standard(s) Product certifier Audit and registration of supplier’s quality assurance system Quality system registrar Accreditation Acceptance Accreditation of laboratory competence Public/private laboratory accreditation program Accreditation of certifier competence Public/private certifier accreditation program Accreditation of registrar competence Public/private registrar accreditation program Recognition Official recognition of laboratory accreditation program Public authority Official recognition of certifier accreditation program Official recognition of registrar accreditation program The easiest and historically most well-developed form of conformity assessment is a supplier’s declaration of conformity. Indeed, most commercial transactions take place on this basis. This is typically satisfactory for search and experience characteristics (for example levels of microbial pathogens) but less effective in the case of credence characteristics (for example specific production parameters). The efficacy of self-declaration is also closely related to trust and levels and forms of social capital. Systems of assessment have themselves become more complex as users of standards has sought greater security in conformity assessment. Second-party conformity assessment is now widely applied whereby purchasers undertake their own inspections to assess conformity. Whilst there are considerable transactions costs associated with such a system, particularly for buyers with a large supply base, they afford greater protection against food safety problems and can be an important element of any defence against legal or tort liability. More recently, third party conformity assessment has become more widespread as part of efforts to manage these transaction costs. In this case conformity assessment is undertaken by an independent third party, frequently linked to certification. To the extent that individual buyers collectively accept the assessment of a single third party, that assessment becomes a public certification of conformity and can reduce the overall costs associated with private standardisation.

Mutual Recognition Recognition of conformity assessment procedures by another party Key issue in world trade Forms Promoted by World Trade Organization A key issue relating to conformity assessment is mutual recognition, the acceptance of conformity assessment procedures undertaken by another party. This is most commonly an issue in international trade, whereby one country may not accept the testing and certification activities of a trading partner and as a result such procedures are required to be repeated. Mutual recognition, the acceptance of the conformity assessment procedures of another party, can occur informally (a simple recognition that comparable procedures are employed) or through a formal Mutual Recognition Agreement. Recognising that conformity assessment requirements can act as a serious impediment to trade, the World Trade Organization promotes mutual recognition through its SPS and TBT Agreements. The lack of mutual recognition is a major problem for many developing countries. Many countries lack the capacity to undertake conformity assessment procedures in a way that is acceptable to industrialised country governments. For example, they may not have accredited laboratories or employ outdated testing methods and equipment. In such cases exporters typically face the duplication of testing requirements and also the added risk that consignments of product will be rejected when conformity assessment is undertaken at the importing country’s border.

Inter-American Accreditation Council (IAAC)
Eliminating technical barriers to trade in FTAA Support market in demand for MRAs Equivalence in accreditation programs Attempts to establish mutual recognition have also been made at the regional level. An example is the Inter-American Accreditation Council (IAAC) that aims to promote cooperation among accreditation bodies in the Americas. More specifically, the goals of the IAAC are to: Support the Free Trade Area of the Americas (FTAA) in eliminating technical barriers to trade through Multilateral Recognition Agreements (MRAs) among accreditation bodies. Support the market demand for MRAs. Maintain equivalence in accreditation programs for certification bodies, laboratories and inspection bodies using internationally-recognized mechanisms and reference documents. The IAAC has 18 full members and 6 associate members. The IAAC, in cooperation with the Latin America Association for Integration (ALADI) has undertaken a survey of conformity assessment structures in 11 ALADI member countries. It also undertakes training programs and technical assistance.

Technical and Administrative Capacities
Elements of capacity Forms of capacity Location In order to assess standardization capacity, a distinction needs to be made between standardization ‘functions’ and ‘capacity’. The concept of ‘functions’ describes the specific activities that a standardization system must perform, whereas ‘capacity’ refers to the institutional, procedural and resource requirements

Elements of Sanitary and Phytosanitary Control Capacity
Functions Capacity Internal surveillance Import controls Emergency quarantine Export controls and certification Responsiveness to new/emerging issues Institutional structures/ procedures Risk analysis Physical infrastructure Analysis and diagnosis Human capital Controls on inputs Sustainability Pest and disease control Hygienic practices in production, processing and distribution Monitoring Identification and traceability This slide provides the example of sanitary and phytosanitary control capacity. Here, standardization efforts related to food safety and plant and animal health require a wide range of functions to be performed including surveillance of domestic production as well as controls on imports and exports, response to emergency situations, risk analysis, hygienic practices in food production, processing and distribution, controls on inputs etc. In turn, the ability to perform these functions is dependent on four key elements of capacity – institutional structures and procedures, physical infrastructure, human capital, and the longer-term sustainability of these.

Forms of Capacity Institutional structures/procedures
Physical infrastructure Human capital Sustainability

Management of Food Safety Controls in Kenyan Fish Sector
Location of Competent Authority Restrictions on exports to the EU Reformed structure Impact on ability to address EU concerns A good example of the importance of institutional structures to the efficiency and efficacy of standardization infrastructure is the response by Kenya to restrictions on exports of fish, and in particular Nile Perch, to the European Union (EU) over the period Until 1998, responsibility for hygiene controls along the supply chain for Nile perch was divided between the public health functions of the Ministry of Health and the fisheries control functions of the Department of Fisheries, a division of the Ministry of Agriculture and Rural Development. This situation provided for significant coordination and communication problems, and indeed departmental infighting, which were identified by the European Commission during an inspection visit for the purposes of defining specific requirements for exports of fish and fishery products to the EU. Subsequently, in 1998, this situation was rectified and the Department of Fisheries was made the sole ‘Competent authority’ for the purposes of approving fish processors for export and the issuance of export health certificates. It is evident that the lack of a coherent allocation of responsibilities for hygiene controls in the fish and fishery products sector resulted in delays in the response of the Kenyan authorities to the restrictions imposed on exports to the EU. Although a great deal of progress has been made in addressing these concerns since a single ‘Competent authority’ was defined, Kenya has yet to be fully approved for export to the EU. This contrasts with Tanzania, which is now approved fully for export to the EU and had restrictions on its exports removed one year earlier than Kenya. Whilst a number of factors may explain this, Tanzania already had a coherent allocation of administrative responsibilities for hygiene controls on fish and fishery product exports based in the Fisheries Department in the Ministry of Natural Resources and Tourism.

Food and Agricultural Inspection in India
India is an extremely large country with a federal system of government. Responsibility for the inspection and certification of agricultural and food products for export, however, lies with the Government of India rather than State Governments. This functions is undertaken by the Export Inspection Council within the Ministry of Commerce and Industry. Day-to-day inspections activities that fall under the administrative and technical control of the EIC, however, are undertaken by five Export Inspection Agencies with 44 sub-offices across the country. Each EIA has a defined geographical jurisdiction.

Private Sector Capacity
Individual enterprises Consortia Commercial capacity Professional societies Educational establishments Industry organizations There are various options for the development and operation of standardization capacity within the private sector. On the one hand individual enterprises can establish capacity to assess their own conformity (for example laboratory facilities) or provide standardization services to other enterprises on a commercial basis (for example laboratory testing and certification services). On the other, private enterprises can act collectively, for example through consortia or industry organizations where there is limited commercial advantage from developing individual capacity and/or economies of scale are significant. For example there may be very significant economies from operating a laboratory at full capacity which an individual enterprise may not be able to do. Further, professional societies and/or educational establishments may offer standardization services (for example laboratory testing) as a means of revenue generation.

Private Sector Strategies
Importance Private standards-setting Individual versus collective strategies Strategic response Aside from capacity issues, standards are an important issue for the private sector in developing countries. Indeed, at the start of this presentation the increasing importance of standards to the competitiveness of developing countries was highlighted. Increasingly, standards are pervading both national and international markets and commercial enterprises are facing less and less choice regarding compliance. Simultaneously, the differing costs of compliance at the firm level associated with standards can act to enhance or impede competitiveness. Thus, whilst standards may limit commercial flexibility, they can also be used strategically to gain market advantages. The question for policy-makers in developing countries is how to manage national standardization activities to the advantage of domestic industries. For example, is it best to develop national standards that are comparable or perhaps lower than the standards of competitors in order to afford cost advantages or to do the opposite, implement stricter standards that force the domestic industry to up-grade and compete on quality? The inter-relationships between public and private standards and mechanisms of conformity assessment are complex. In some contexts, private standards and conformity assessment develops because of weaknesses in the public sphere and thus acts to enhance overall levels of food safety. Where public controls are well-developed, however, private standards may act to differentiate products and/or provide a more efficient mechanism through which regulatory requirements are satisfied. In such a context, private standards and conformity assessment may have little or no impact on prevailing levels of food safety, but may act to enhance the efficiency with which these levels are achieved, enhance consumer satisfaction etc. It is important to recognise the impact of private standards in these different contexts and to assess any impacts accordingly. The private sector also has to make decisions regarding individual versus collective action with respect to the establishment of standards. Largely, this will reflect the abilities of individual companies to establish and enforce their own standards and the competitive gains to be had from such activities. In some cases there may be gains from applying an overall standard to the industry, for example to ensure compatibility or to promote overall product quality. In others, firms may compete on the basis of the standards they apply and use them strategically to exclude rivals or prevent new entrants and otherwise to enhance profits.

Private Sector Strategies
Defensive Reactive Proactive Faced with evolving mandatory or de facto standards, private enterprises can respond in a variety of ways. This figure defines two key dimensions: Timing of response. Nature of response. At the extremes of the temporal dimension, enterprises can be reactive - waiting until the specific standard is applied until taking actions to achieve compliance - or proactive - anticipating the measures and making efforts to achieve compliance at the earliest opportunity. In the case of the nature of response, enterprises can be defensive – taking actions to avoid or minimize the impact of the standard by shifting markets or products to target markets with lesser requirements – or offensive – exploiting the measure as an opportunity to achieve competitive advantage, utilizing the changes required to achieve compliance as an opportunity to change or develop supply chains, or even challenging the scientific justification of the standard. The most passive strategy (in the top left-hand segment of the figure) is reactive-defensive; the most aggressive is proactive-offensive (in the bottom right-hand segment of the figure). In general, the pay-off in terms of competitiveness will be greater from more aggressive strategies. However, the ability to take such a stance is dependent upon the available of the required capacity at the enterprise, industry and national levels. It is important for standardization institutions to recognise the various ways in which firms may respond to emerging standards and afford them the flexibility required in order to optimise the resultant impacts – minimising any costs and/or maximising any benefits. Offensive

Means to Enhance Standardization Capacity
Awareness and recognition Physical infrastructure Human capital Institution-building Whilst the establishment or enhancement of physical infrastructure and human capital is likely to be a major and essential element of efforts to enhance standardization capacity in developing countries, such efforts are likely to have only limited effectiveness unless there is awareness and recognition of the importance of standardization to economic development and social welfare. This needs to pervade not only users and implementers of standards, including commercial enterprises and consumers and their representatives, but also political decision-makers that allocate budgets and promulgate policies. Only when the need for standards and related activities are recognised, not only to access export markets but also to enhance the performance of domestic markets, welfare of citizens and protection of the environment, will any developments in capacity be employed to address effectively the needs of the country concerned and stand a chance of being sustained in the medium to long term. Alongside developments in physical infrastructure and human capital, there is also a need for the building of institutions that provide for the participation of the private sector, civil society and government in standardization activities and for the effective promulgation and implementation of standards (next slide).

Building Standardization Capacity
Government Institutions Such institutions need to be based on the principles of good governance that permit accountability of decision-making and any resultant actions, access to information etc. Further, they must both permit and facilitate the participation of all parties with an interest in standardization activities. A national standards body can play a valuable role in this respect but may not be sufficient in itself if other institutions, for example chambers of commerce, industry/trade organizations, consumer organizations etc. are under-developed and/or lack resources. Private Sector Civil Society

‘Innovative’ Approaches
Staff secondments Mentoring Twinning Learning from one another Regional capacity-building Experiences to date whereby considerable efforts have been made to enhance standardization capacity suggest that more ‘innovative’ approaches may be required than are implemented as part of ‘traditional’ technical assistance and capacity- building projects and programs. Many of these are based on the principle of ‘learning whilst’ doing and the sharing of experiences through partnership. Some examples are as follows: Staff secondments: Secondment of staff from national standards bodies (for example) in developing countries to national standards bodies in industrialised countries, or vice versa. Mentoring: The mentoring of staff members in a national standards body (for example) in a developing countries by staff members in an industrialised country national standards body. Twinning: The twinning of a national standards body in a developing country with a national standards body in an industrialised country. Each of these options is based on the principles of partnership and ‘learning whilst doing’ at various levels, from individual staff members to national standards bodies as a whole. The case of the Trinidad and Tobago Bureau of Standards provides a good example. Alternatively, efforts can be made to develop capacity at the regional rather than the national level. Whilst such efforts can be an effective mechanism to overcome the constraints faced by individual countries, and in particular smaller countries, they are reliant on the existence of common standardization needs and/or constraints. Thus, they will typically occur amongst regionally concentrated countries at a similar level of development and of a roughly equivalent size economically. Further, they frequently occur within the context of pre-existing international groupings such as trade agreements. The case of CROSQ provides an example of this. One final option is the concept of developing countries ‘learning from one another’ rather than from the experiences of industrialised countries that face very different constraints, both qualitatively and quantitatively. Typically, technical assistance is provided by ‘experts’ whose experience has been derived from an industrialised country context and is based on an industrialised country model of standardization. However, it may be more effective instead to base such efforts on the experiences and standardization efforts of countries at a comparable level of economic development or at least with similar characteristics. To this end, twinning arrangements between developing country national standards bodies may be an effective mechanism to increase capacity, as might experience-sharing fora whether face-to-face or virtual.

CARICOM Regional Organisation for Standards and Quality (CROSQ)
Developed out of Caribbean Common Market Standards Council (CCMSC) Operational in 2002 Objectives One example of such alternatives is the efforts by the countries of the Caribbean to establish regional standardization capacity. The Caribbean Common Market Standards Council (CCMSC) was established in 1976 to advise the Council of Ministers of CARICOM regarding standards-related matters and technical regulations. However, the CCMSC was frequently called on to address matters outside of its original terms of reference and at times beyond the constraining capabilities of its informal structure. The requirements of the WTO concerning standards and technical regulations governing international trade also highlighted the limitation of CCMSC as it was constituted. Further, it’s status and modus operandi was considered inadequate to fulfill the region’s stated commitment to promote and enhance regional standards and regional and international trade and to support the impending formation of major regional and hemispheric trading groups such as the Caribbean Single Market and Economy (CSME) and Free Trade Area of the Americas (FTAA). Recognising these deficiencies, the heads of the various bureaus of standards in the Caribbean agreed in 1996 that the CCMSC needed to be restructured to increase its competence in the development of harmonized standards in the region. Further to this agreement, CARICOM resolved to establish the CARICOM Regional Organization for Standards and Quality (CROSQ) as an inter-governmental regional standards organization. Unlike its predecessor, CROSQ has a formal organizational structure, legal status and a juridical personality in order to receive international recognition. The Caribbean member states believe that CROSQ will provide a more effective and efficient management of the regional standardization effort as CARICOM moves into a single market and economy and reacts to the challenges of an increasingly globalized and liberalized international economy.

Objectives Facilitate trade Enhance efficiency and quality
Promote consumer/environmental protection

Effectiveness of Technical Assistance
Awareness Administrative structures Priority-setting ‘Appropriate’ capacity Leverage points Partnerships The efficacy of efforts to enhance standardization capacity will depend on a number of factors that must be given due consideration when planning technical assistance and/or capacity-building projects or programs. These include the following: Administrative structures: Efforts to enhance standardization capacity may be constrained by the efficacy of prevailing administrative structures that fail to facilitate the coordination and management of standardization activities and/or the inclusion of the full range of interested parties in standardization activities. Awareness/recognition of standardization: There may be a lack of awareness and/or recognition of the importance of standardization, where amongst users, implementers or political decision-makers. Under such circumstances any efforts to engender standardization capacity will be supply rather than demand-driven. Priority-setting: As discussed previously, the standardization needs of individual countries vary widely according to level of economic development, local conditions and circumstances etc. Priorities for the enhancement of capacity must be established accordingly. ‘Appropriate capacity’: Reflecting the above and in recognition of the considerable costs that can be associated with standardization activities, capacity must be developed that is appropriate to the particular country’s needs and circumstances at a particular point in time and in view of expected future developments. Leverage points: Many developing countries, and in particular the least developed countries, have very rudimentary standardization infrastructure and the task of achieving any significant improvement in standardization capacity is a significant one. In such contexts it is important to identify ‘leverage points’ where efforts are likely to produce the most significant enhancement of capacity given the available resources. Participation: Large elements of standardization are demand-led and, as a consequence, it is vital that efforts to enhance capacity should involve fully the participation of interested parties. Public-private partnerships: Standardization infrastructure pervades both the public and private sectors and there is considerable scope for the development capacity through public-private partnerships. Regional capacity-building: As discussed previously, in some contexts (for example small and/or least developed countries) it may be more appropriate to develop standardization capacity at the regional rather than the national level

Mainstreaming Standardization
Recognition of role of Standardization Standardization and basic capacity-building Governance issues Role of civil society The development of standardization capacity can be undertaken through specific ‘standardization projects’ or more generally through the mainstreaming of standardization in general development efforts. In view of the scope of standardization and the potential benefits in terms of economic development and social welfare the latter of these seems more appropriate. Further, arguably, efforts to enhance standardization capacity, beyond developments in basic generic standardization infrastructure, are likely to be more effective if undertaken in a manner that is context and problem-specific. Thus efforts to promote standardization related to health are likely to be most successful if part of efforts to enhance health capacity overall. Likewise, efforts to promote standardization in telecommunications will be best undertaken as part of the development of telecommunications capacity. Mainstreaming standardization within development efforts will require efforts to promote recognition of the role of standardization in the promotion of economic growth and competitiveness and social welfare. Whilst standardization seems a rather ‘dry’ subject that is a long way from efforts to reduce poverty and address basic needs, in practice it should be an integral component of such efforts. Mainstreaming standardization will, thus, require that links are made to the more general activities of development efforts and that much of the jargon associated with the area is explained, simplified or even dropped. There are close links between basic capacity-building and the development of standardization infrastructure. This can include basic telecommunications services, computerisation, educational and research infrastructure etc. Thus, the inclusion of standardization as part of the development of basic infrastructure can act to enhance the benefits of such efforts at limited additional cost. A final linkages can be made between standardization capacity and the promotion of good governance and the role of civil society. Son the one hand, standardization plays an important role in assessing the performance of both the public and private sectors. On the other, the development of standardization capacity requires that civil society participates fully and on an equal footing with other interest groups.

Conclusions Standardization capacity important
One size does not fit all……. Roles in capacity-building Effective capacity-building High cost-high benefit This presentation has served to highlight the importance of standardization to economic and social development. In our daily lives, and particularly in an industrialised country context, it is easy to take for granted the roles that standardization plays, for example when we take a taxi ride, buy a new computer or take our car to be serviced . In many developing countries, however, standardization infrastructure is rudimentary at best and this acts to impede overall processes of economic development and the promotion of social welfare. At the same time, however, it is important to recognise the quite distinct standardization needs of countries at different levels of economic development. One size does not fit all! Efforts to enhance standardization capacity must recognise the considerable resource costs involved and be customised to meet current and foreseeable standardization needs rather than be modelled on ‘best practice’ in an industrialised country context. Whilst more standardization capacity is better than less, everything else being equal, capacity should develop in line with the needs of standards users. The development and implementation of standardization capacity requires the active participation of the public and private sectors and civil society. Thus, investment in physical infrastructure and human capital must be accompanied by the development of institutional structures that permit and facilitate the participation of all tat have an interest in standards development. Given the scope of standardization activities, there are compelling reasons why efforts to enhance standardization capacity should be mainstreamed as part of general development efforts. Likewise, there is a need to develop standards-related capacity in an effective manner that takes account of local needs and circumstances. Perhaps the standards infrastructure of industrialised countries does not present the best model on which to develop such capacity in a developing country context? In conclusion, whilst the development of standardization infrastructure is undoubtedly high cost, it is also high benefit!

Spencer Henson University of Guelph

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