1. NRCS STRATEGIC PLAN & ANNUAL PERFORMANCE PLAN Presentation to: Portfolio Committee on Trade and Industry Katima Temba Acting CEO

2. Overview
INTRODUCTION
NRCS BUSINESS MODEL
NRCS STRATEGY AT A GLANCE
STRATEGIC GOALS
NRCS ANNUAL PERFORMANCE PLAN
2013/14 DELIVERABLES
NRCS BUDGET

3. Introduction
National Regulator for Compulsory Specifications of South Africa (NRCS), Established by Act 5 of 2008
NRCS’ Mandate: Administer compulsory specifications in the interests of public safety and health or for environmental protection
NRCS regulates Imported and Locally Manufactured products and issue health guarantee certificates for fishery products mostly destined for the EU and the far East.
NRCS has a Staff compliment of 290 and has regional offices in Gauteng, Western Cape, Eastern Cape, KwaZulu-Natal and Free State

4. NRCS Mandate NRCS mandate is derived from three primary Acts:
National Regulator for Compulsory Specifications Act (Act no 5 of 2008)
Trade Metrology Act (Act 77of 1973)
Building Regulations and Building Standards Act, (Act 103 of 1977)
Secondary Act
Foodstuffs, Cosmetics and Disinfectants Act , ( Act 54 of 1972)
National Road Traffic Act, Act 93 of 1996

5. Additional Mandate
NRCS also regulates other products covered by MOUs from other national departments:
Department of Transport,
Department of Health,
Department of Labour,
Department of Environmental Affairs
Department of Agriculture, Forestry and Fisheries (DAFF)
Dept of Transport: Registration of Manufacturers, Importers and Builders (MIBs) of motor vehicles, Annual Inspections of MIBs, issuance of eNatis model numbers, Issuance of Letters of Authority, Regulation of motor vehicle parts covered under the Road Traffic Act
Dept of Health: NRCS food inspectors are appointed to administer the Foodstuffs and Cosmetic Act looking at food labeling, additives, etc.
DAFF: NRCS together with DAFF monitor bio-toxins in aquaculture products

6. NRCS Strategy
NRCS strategy takes into account all the three main Acts, legislation, Industrial Policy Action Plan (IPAP) and other policies available to the National Regulator for Compulsory Specifications.
The NRCS in executing its functions of protecting the consumer and the environment, will focus on the enforcement of technical regulations and the major thrust would be on the “lock out” of non compliant (unsafe) goods.
Some of the NRCS activities, albeit a small focus, can be construed to support the “lock in” principle, primarily in the exportation of fishery products to the EU, Asia and SADC countries.

7. Risk Based Approach: The risk-based approach centers on:
NRCS Core Process
Risk Based Approach: The risk-based approach centers on:
determining probability and impact factors,
deciding upon a regulatory response,
the development of appropriate regulatory tools and
most importantly informing allocative decisions in deploying limited resources.’

8. NRCS Value Chain

9. NRCS Strategic Direction
NRCS serves to regulate the development and adherence to compulsory minimum product specifications in South Africa.
This regulatory function addresses failures in the market system whereby businesses may produce, import or sell products or services that may harm the consumer and / or the environment or may fall short of what is promised in terms of quantity or safety (trade metrology).
The NRCS is mindful of the need to balance the burden of over-regulation with the benefits of pragmatic, focused regulation. An over-focus on regulation may well stifle economic growth, whilst a failure to regulate has significant societal costs.

10. NRCS Strategic Direction Continued
NRCS will in this financial year and the medium term move to a more intelligent, efficient and effective way of regulating.
Utilisation of technology, setting up the IT infrastructure
The IT infrastructure will enable the functioning of databases that will allow for easy risk profiling in support of the NRCS risk based approach
Aspires to built market related intelligence capacity
Engage and network with other regulatory entities to extract relevant information to enhance the NRCS functional capacity.

11. NRCS Strategic Direction Continued
NRCS will invest in research to better understand our regulatory environment and to uncover the ‘compliance gaps’ that exist outside of our known areas of coverage.
Technology in this respect will enable investment in:
Client relationship management which will enable stakeholders to apply for NRCS registration and submit documentation to the NRCS via the web the
NRCS will be electronically linked to SARS for easy monitoring of imported goods regulated by the NRCS
NRCS will continue to emphasize and focus on Stakeholder Engagement

12. NRCS Strategic Direction Continued
Border Enforcement:
The NRCS will continue to be conduct border inspections
The border inspections will be integrated into normal day to day operations of the Entity
Inspections will focus mostly on Electro-technical products
The profiling of containers will be done in consultation with SARS and Border police

13. Risk Based Approach

14. Compulsory Specification and Linkage to SANS
NRCS Involvement in the Industry
Industry
No. Technical Regulation
No. of Referred SANS
Automotive 22
126
Chemicals, Mechanical and Materials 15 64
Electrotechnical 17 91
Food and Associated Industries 6 24
Legal Metrology 33 14
TOTAL 93
319

15. NRCS Activities Identification of market failures
Develop compulsory specifications/technical regulations to prevent market failures to harm the consumer
Pre-market approval of NRCS regulated products:
Before regulated commodities enter the market, approval granted based on test reports or certificates of conformity;
The NRCS Issues certificates (Letters of Authority, Homologation or Type approval certificates, Health certificates)

16. NRCS Activities Continued
NRCS conducts Market Surveillance Inspections:
inspectors visit manufactures, importers and retailers to inspect and if needed sample products
border inspections
Inspections are meant to eradicate non-compliances
Sampling and testing:
Sampling is done to establish compliance
To retain evidence in the form of a sample
Or to establish compliance or non-compliance
Sanctions:
If non-compliance is proved, enforce recall and/or corrective action and/or destruction and/or notify the media and public

17. Regional participation
NRCS attends various international and regional forums at an organisational level and as a representative of South Africa is some instances;
SADC Technical infrastructure committees
SADCMEL – SADC Metrology
SADC TBTSC – SADC Technical Barriers to Trade Stakeholder Committee
SADC Harmonisation and standardization of Transportation
NRCS also acts as Regional coordinators and secretariats for these three SADC committees

18. International participation
OIML- International Organization for Legal Metrology
WP 29 (Working Party 29) for automotive regulations
CASCO – Conformity Assessment Sub Committee of International Standards Organisation
COPOLCO – Consumer Policy Committee of the International Standards Organisation
CODEX ALIMENTARIUS –International Food requirements
IAFI- International Association for Fish Inspectors
IEC TC61 – This technical committee deals with development , reviewing and amendment of household appliances standards IEC and its 109 part two series, These standard are being referred as mandatory by NRCS compulsory specification – VC8055.
IECEE CB Scheme: is the world’s first truly international system for acceptance of test reports dealing with the safety of electrical and electronics products.
Codex Alimentarius – It’s an organisation dealing with international foods standards

19. Strategic Goals
Strategic Goal One: To utilise a risk based approach to maximise the potential compliance with all specifications and technical regulations falling under the mandate of the NRCS
Strategic Goal Two: To optimise the scope of NRCS regulatory activity to protect people in South Africa and the environment
Strategic Goal Three: To inform and educate industry and consumers regarding their rights and obligations with respect to specifications and technical regulations
Strategic Goal Four: To ensure that highly engaged, competent people are in the right place at the right time’ to enable effective execution of the NRCS strategy
Strategic Goal Five: To ensure that the NRCS is a capacitated organisation with ‘fit for purpose’ resources available to support decision making and action

20. Strategic Goal One: APP Deliverables
NRCS will conduct inspections at the ports of entry, manufacturer’s premises, retailers, distributors and motor vehicle builders’ premises.
At the sea ports and inland border, containers for will be profiled and characterized according to the risk criteria which will include but not limited to country of origin, type of product, importer compliance behavior, season, and whether it’s a new or recent technical regulation or an existing compulsory specification.
The high risk products list will be compiled to constitute the Prohibited and Restricted list of products which would be fed into the SARS Risk Engine. Stoppages at the ports of entry will be done electronically via the SARS system. The high risk product list will be reviewed from time to time.

21. Strategic Goal One: APP Deliverables
Expected Outcome
Regulated Industry
Performance Indicator
Target
Increase Compliance to Compulsory and technical regulations
Automotive
Number of inspections conducted
4000 inspections
Chemicals, Materials and Mechanical
Electro-Technical
4000 Inspections
Foods and Associated Industries
% of inspections conducted on all loccaly produced, imported and exported fishery products
100% of all declared locally produced, imported, and exported: canned fish, canned meat, frozen fishery products inspections
Legal Metrology (fair trade requirements in terms of weight and measures
4369 inspections
Automotive, Electro-technical, Chemicals, Materials and Mechanicals
Number of days to process approvals
21 working days to issue or to evaluate an application for pre-market approval for imported products and motor vehicles
Legal Metrology
Number of days to process type approvals
105 working days to process type evaluations on measurement instruments

22. Strategic Goal One: APP Deliverables
Ensure uniform understanding and implementation of the National Building Regulations & Builiding Standards Act 103 of 1977 through.
Provision of technical advice and interpretation of the NBR&BS Act
Perform building-defects investigations as an impartial party
Administering of the Review Board
Evaluation of qualifications of Building Control Officers

23. Strategic Goal 2: APP Deliverables
To optimise the scope of NRCS regulatory activity to protect people in South Africa and the environment
NRCS will evaluate environmental, product and service risk and establish economic impact of the regulations and inform policy.
NRCS will carry out pro-active research to identify areas where regulations need to be developed, including international benchmarking
Will review and develop appropriate Compulsory Specifications or Technical Regulations in accordance with IPAP and stakeholder requirements. New Compulsory Specifications for 2013/2014:
New proposed VC for labelling of electric and electronic appliances for energy-efficiency
New proposed Trade Metrology technical regulation for gas meters
New proposed VC for processed meat products
Processed meat: food safety, consider recipes and compositional requirements.
NRCS does not regulate fresh and frozen meat products

24. Strategic Goal 3: APP Deliverables
To inform and educate industry and consumers regarding their rights and obligations with respect to specifications and technical regulations.
NRCS understands that effective communication contributes significantly to voluntary compliance.
Issue media alerts on non-compliant products
And will set up platforms for stakeholder and consumer engagements
Hold 9 road shows to support this deliverable

25. Strategic Goal 4: APP Deliverables
To ensure that highly engaged, competent people are in the right place at the right time’ to enable effective execution of the NRCS strategy:
An HR capability will be developed and all 77 vacant positions will be filled within acceptable time framework. Plans are already underway to fill these vacant positions
New HR policies are approved
A desired Human Capital Readiness score has been achieved (positions filled / competency developed)
All employees will be aligned behind the NRCS strategy
Employees are highly engaged to improve on labour relations

26. Strategic Goal 5: APP Deliverables
To ensure that the NRCS is a capacitated organisation with ‘fit for purpose’ resources available to support decision making and action
Set up NRCS own IT infrastructure
Link up NRCS and SARS
Client Relationship Management system will go live and enable stakeholders to apply for services over the internet.
Professional management of data, information and knowledge
NRCS to implement an IT enabled methodology to support the tracking, consolidation / sharing of planning information as well as effective evaluation and review of progress
This entails management and acquisitions of servers, communication networks and devices, software and the managerial expertise – standards, disaster planning, security required to deliver applications

27. Operational Budget: Revenue
Revenue projected to grow at 6.5%over the MTEF period, with core funding increasing by 26% in the 2014 FY.

28. Expenditure composition: FY 2014
Expenditure composition shows growing employee costs as a total percentage of expenditure
Admin Costs – Rental costs, IT costs, Stationery, telephone costs, marketing, consulting fees, insurance, audit fees, etc
Employee costs- Staff costs, skills development levy, training, provision for medical and leave
Operating Costs – Testing, sampling, repairs and maintenance, travelling costs, purchasing of standards

29. Financial projections over the MTEF
Conservative projected growth in net surplus is supported by increased revenue and managed increases in expenditure.

30. CAPEX BUDGET
Budget for new premises and procurement of ICT hardware and software form the majority of the CAPEX budget.

31. Thank You Questions…. NRCS Katima Temba Acting CEO
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