Presentation to the Select Committee

Presentation to the Select Committee AGRÈMENT SOUTH AFRICA BILL 28 July 2015

Table of Contents • Introduction • ASA Current Objectives • Need to establish ASA as a Entity • Business Case • Consultation • Stakeholders • Consultation Outcome • Impact of Policy Position • Option Analysis: Service Delivery Models • ASA Bill • Status on the development of ASA Bill • Impact of ASA Act

1. Introduction • Agrément South Africa (ASA) was established by the Minister of Public Works in 1969, through a delegated authority. • Its mandate is to “support and promote the process of integrated socio-economic development in South Africa as it relates to the construction industry by facilitating the introduction, application and utilisation of satisfactory innovation and technology development, in a manner which will add value to the process and by so doing enhance Agrément South Africa`s position as the internationally acknowledged, objective South African centre for the assessment and certification of innovative non-standardised construction products, systems, materials, components and processes, which are not fully covered by a South African Bureau of Standard standard or code of practice.”

2. ASA Current Objectives • Serve specifier and user interests by providing assurance of fitness-for-purpose and value for money of innovative, non-standardised construction technology as well as ongoing quality assurance; • Work with the construction sector to facilitate the introduction of cost effective innovative, non-standardised construction technology ; • Disseminate correct, objective and relevant information to all concerned in respect of the technical, socio-economic, and regulatory aspects of innovative, non-standardised construction technology; • Support policy makers at all levels and minimize the risk associated with the use of innovations;

ASA Current Objectives ..cont… • Support the application of the National Building Regulations; • Maintain links with international peer organizations and support the South African construction industry in its export activities by facilitating the approval of South African innovative construction products in foreign countries; • Facilitate the acceptance of innovative products within the context of the government’s new priorities and policies; • Serves a national interest by being internationally acknowledged as an objective and independent South African centre serving the building and engineering communities by providing assurance to specifiers and users via technical approvals for the fitness-for-purpose of innovative, non-standardised construction technology.

3. Need to Establish ASA as an Entity • ASA’s lack of legal status:- • Dependent on Council for Scientific & Industrial Research (CSIR) to fulfil its administrative requirements and to manage its technical agency. • Dual reporting to Dept of Public Works and Dept of Science & Technology • AG Report – Transfers to ASA classified as Irregular Expenditure

4. Business Case • Business Case sought to address the following: • situation analysis, • strategic planning, • identifying and assessing the service delivery options, • governance issues, and • recommending the appropriate service delivery option.

5. Business Case: Consultation • Purpose: • analyze the strength, weaknesses, opportunities and threats that exist in the current mode of service delivery; • situation analysis; • To determine whether: • any synergies exist between ASA and other public entities; • There is a duplication of ASA’s mandate with other public entities; and • there is a need for ASA to exist in its own independent space or whether ASA should reside within one of the other public entities.

6. Stakeholders • DTi: Two entities with related but distinct mandates from ASA: • South African Bureau of Standards (SABS): • Develops standards for existing products on market. • National Regulator of Compulsory Standards (NRCS): • Sets and Monitors compliance to compulsory standards. • Department of Human Settlement: • National Home Builders Registration Council: • protects home buyers against shoddy workmanship by home builders. • South African Local Government Association & Dept of Corporative Governance and Traditional Affairs • Supports ASA as certifier of “fit-for-purpose” non standardized building material and products.

Stakeholders ...cont… • Deptof Science and Technology : • CSIR develops non-standardised materials & products, therefore cannot also certifiy; • DST recommends establishing synergies between ASA and the Technology Innovation Agency (TIA). • Council for the Built Environment: • Supports ASA proposals, given its own regulatory role over the built environment. • Construction Industries Development Board: • Supports ASA proposals given its own regulatory role over the constructions industry. • South African Revenue Services: • Recommends all non-standardised building materials and products imported into SA are Agrément compliant.

7. Consultation Outcome • Stakeholders in principle: • Concurred with the need for ASA to retain its mandate and to continue to exist as a separate, independent organisation (in line with international trends); • Supported a proposal for the extension of ASA’s mandate to include a regulatory function – Future Action. • DTI advised that ASA regulatory function should not infringe any provisions of World Trade Organisation Trade Agreements, to which South Africa is a signatory – this means a clear health, safety, or environmental reason for regulatory exclusion of an imported commodity is required.

8. Impact of Policy Position • Irregular expenditure concerns of AG will be addressed with ASA fully functional as an independent entity • ASA will be able more effectively to promote value of certification of non-standard construction materials & systems – thus help to promote innovation, local manufacturing and job creation • Increased availability and reliability of non-standard materials can impact on lowering construction costs for public and private sector • Through international engagements, ASA will ensure SA assessment standards remain internationally accepted - thus facilitating SA exports of products, materials and systems.

9. Option Analysis for Service Delivery • Government Component • Privatisation of Services • Trading Account • Public Private Partnership • Self Regulation • Establishment of Public Entity (preferred option) • Cannot fit into another entity • Fills a void of regulation • Efficient • International best practice (BBA) • Given legal status.

10. Status on development of ASA Bill • The ASA Bill, 2013 was presented to the Cabinet Committee for Economic Sectors, Employment and Infrastructure Development (ESEID) on 27 November 2013. • ESEID Cabinet Committee supported tabling of Draft ASA Bill, 2013 to Cabinet. • Cabinet approved the gazetting of the draft ASA Bill, 2013 and Memorandum on the Objects of the Bill, for public comment on 04 December 2013. • Draft ASA Bill was gazetted for public comment on 17 January to 17 February 2014. • Following analysis of public comments, the ASA Bill was revised and sent to Office of the Chief State Law Advisor (OCSLA) for preliminary certification on 01 July 2014. • Comments raised by the OCSLA were addressed together with Legal Services. • FOSAD endorsed ASA Bill on 03 September 2014 towards submission to ESEID Cabinet Committee and to the Cabinet. • ASA Bill was introduced to Parliament 02 February 2015. • ASA Bill was adopted by National Assembly on 23 June 2015.

11. ASA Bill…cont… • The ASA Bill addresses the following: • Objects of Agrément South Africa • Powers and Functions • Certification and Renewal of Certification Process • Keeping of a Register • Board of Agrément South Africa: • Appointment of Board members • Term of Office • Disqualification & Vacation of Office • Remuneration and allowances of members of Board • Conflict of interest of members of Board

11. ASA Bill…cont… Objects of Agrément South Africa • The objects of Agrément South Africa are to: • provide assurance to specifiers and users of the fitness-for-purpose of non-standardised construction related products • support and promote the introduction and use of certified non-standardised construction related products or systems in the local or international market; • support policy makers to minimize the risk associated with the use of a non-standardised construction related product or system. Powers and duties • Agrément South Africa may exercise power to: • assess and certify, if satisfied, the fitness-for-purpose of a non-standardised construction related product or system. • issue, amend, suspend, reinstate, withdraw or renew an Agrément Certificate. • exercise any other power as may be prescribed or necessary to achieve the objects of Agrément South Africa.

11. ASA Bill…cont… AgrémentSouth Africa has a duty to :- • provide assurance to specifiers and users of the fitness-for-purpose of non-standardised construction related products. • develop any rules, processes, procedures, criteria or guidelines necessary to achieve the objects of Agrément South Africa and the execution of its duties. • support and promote the introduction and use of certified non-standardised construction related products or systems • encourage research and development of non-standardised construction related products or systems AgrémentSouth Africa may:- • acquire or dispose of property or a right in respect thereof, but immovable property may only be acquired or disposed of with the prior written consent of the Minister and may invest its funds not immediately required • determine, charge and collect fees for any services rendered and product and document produced • institute or defend legal action. • grant a person, entity or organ of state an exemption from the payment of any fee, or a portion thereof.

11. ASA Bill…cont… Certification • Agrément South Africa must make rules to determine processes and procedures with regard to issuing, amendment, suspension, reinstatement, withdrawal or renewal of the certificate. • The certificate is valid for three years, • subject to conditions of certification and to changes in the law. • Agrément South Africa may amend, suspend or withdraw a condition stipulated in the Agrément Certificate. • It is an offence for a person to falsely represent that a construction related product or system is certified by Agrément South Africa, if an Agrément Certificate has not been issued for such product or system or if such certificate has been suspended or withdrawn. • The Agrément South Africa certificate must be renewed at least three months before expiry • However, late applications may be condoned.

11. Draft ASA Bill Keeping of Register • Agrément South Africa must establish and maintain a register of the applications rejected and certificates issued, amended, suspended, reinstated, withdrawn and renewed. • Such information must be made available to public on its website. Board of Agrément South Africa • Agrément South Africa is governed by the Board, which is also its accounting authority, constituted by a minimum of seven members but not more than eleven members appointed by the Minister and the Chief Executive Officer by virtue of his or her office. • Processes and procedures for selection of members for a new term of office on the Board will be determined by the Selection Committee appointed by the Minister. • The Board members will hold office for a period not exceeding three years, but members continue in office until the new members of the Board take office.

11. ASA Bill…cont… Conflict of interest of a member of the Board • A member of the Board:- • may not have a conflict of interest with Agrément South Africa. • may not directly or indirectly enter into a contractual relationship with Agrément South Africa for the supply of any goods or services, during and for a period of two years following the lapse or termination of his or her term of office. • is obliged to recuse himself or herself from the meeting during the discussion and voting of the matter in which he or she has an interest.

12. Impact of ASA Act • ASA will be able to act independently as it will be legislatively empowered to enforce its mandate and conclude agreements on its own. • It will also be easy for ASA to introduce its envisaged regulation of providing on-going quality assurance of a product, material and system in the construction industry for which a standard does not exist. • DPW would enhance its oversight role through the Board and compliance with PFMA and Treasury Regulations. • ASA will be accountable to DPW only, and no longer to CSIR/DST.

Presentation to the Select Committee