National Regulator for Compulsory Specifications (NRCS) and Standards Bill

1. National Regulator for Compulsory Specifications(NRCS) and Standards Bill 17 October 2007

2. Process – How did we get here? • FRIDGE Study on Standards, Quality Assurance, Accreditation and Metrology (technical infrastructure) completed April 2001. • Cabinet approved project for restructuring of Technical Infrastructure system on 22 May 2002. • the dti Policy on Modernising the South African Technical Infrastructure approved and finalised in 2004. • These two Bills are the last elements of policy implementation • The two bills were tabled at the Cabinet Committee on 8 August 2007. • Bills have now been adjusted taking on board concerns raised.

3. Technical Infrastructure • Technical infrastructure system set standards, test against standards and accredit those test, inspect and certify 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; control of low quality imports prevent undercutting of industrial productive base.

4. The Rationale for change • Globalization – 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, will be obvious as presentation unfolds

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

6. 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 current combination of responsibilities is not in line with the WTO TBT requirements, creates a conflict of interest in terms of providing conformity assessment services for technical regulations and administering technical regulations at the same time.

7. Purposes of the two Bills • The National Regulator for Compulsory Specifications Bill is created to administer technical regulations of which there are about 70 regulations that covers automotives and automotive components, fish, canned meat and fish, electrical and electronic products and components, environmental and personal safety products. • 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. • 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 South African Standards (currently about 6000) and maintenance and the provision of conformity assessment services.

8. Aim of the NRCS Bill • The National Regulator for Compulsory Specifications Bill is created to administer technical regulations. • 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. • The new Bill makes provision for the implementation and administration of all aspects of compulsory specifications/standards (also known as technical regulations). • These include approvals, inspections and market surveillance as well as sanctions at appropriate levels in order to deter abuse of regulations.

9. Mandate 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. In order to achieve its mandate the NRCS undertakes the following: Market surveillance Sampling products for examination Have samples tested or analysed Recalls non compliant products

10. Implementation • The Regulatory Division of the SABS will be established as a separate public entity. • This new entity will be responsible for the administration of technical regulations. • This will be preceded by a project plan that will comprise of costing and effecting this move in terms of: personnel implications, i.e. separation of Human Resource functions (pension, medical etc,) and adherence to the Basic Conditions of Employment Act in terms of transfer of staff; i.e. rental and support services; separation of bank account; transfer and depreciation of assets.

11. The new landscape for technical regulations • The current regulatory division of the SABS would become the core of the new regulator. • This would provide for continuity and for the efficient use of the skills and resources that are available in the current regulatory division of the SABS. • The dti intends to closely align this regulator with the new approach to technical regulations • A new Act, the ‘National Regulator for Compulsory Specifications Act’, must be created to administer technical regulations. • This act would transfer the administrative elements that are relevant to compulsory specifications from the current Standards Act to the new ‘NRCS Act’. • The new act would make provision for the implementation and administration of all aspects of compulsory specifications/standards • The new act would cover governance issues

12. Corporate Governance - NRCS • The Board of National Regulator for Compulsory Specifications will be the accounting authority as contemplated by section 49(2) (a) of the PFMA. • The Board will consist of not less than ten, and not more than fifteen members that are broadly representative of the population of the Republic. The Board will be assisted by an Advisory Forum that will provide stakeholder input on matters in which the NRCS could play a role. • The Minister of Trade and Industry is the executive authority as contemplated by section 52 of the PMFA

13. Transitional Arrangements – NRCS Bill The bill provides for the following transitional arrangements as from the effective date: ØThat all assets, liabilities, rights and obligations of the regulatory department of SABS are transferred to National Regulatorfor Compulsory Specifications (NRCS); ØThat 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); ØThat all notices, designations and certificates issued in terms of the Standards Act, 1993 (Act No. 29 of 1993) in respect of any matter dealt with in this Act are deemed to have been issued in terms of this Act; and ØThat all regulations promulgated in terms of the Standards Act, 1993 (Act No. 29 of 1993) in respect of any matter dealt with in this Act are deemed to have been issued in terms of this Act.

14. Transitional Arrangements – NRCS Bill continue The National Regulator for Compulsory Specifications Bill provides for transitional arrangements, including the transfer of all Regulatory staff and administrative staff responsible for administrative support with regards to compulsory specifications as well as the transfer of relevant assets and liabilities from SABS to the NRCS. The Bill also provides for the appointment of a Chief Executive Officer and a Board. In the interim, the current Regulatory Divisional Director, Mr Moses Moeletsi, will act as Chief Executive Officer. The recruitment process for a permanent Chief Executive Officer will commence once the legislative process for the establishment of the National Regulator for Compulsory Specifications has been approved and a Board has been established.

15. Aim of the new Standards Bill • Provide a legal framework for the development, promotion and maintenance of standards in the Republic and the rendering of conformity assessment services and related activities; and • Provide for the continuation of the South African Bureau of Standards as the peak national institution for the development, promotion and maintenance of national standards.

16. Amended Standards Bill • The bill provides for the continuation of South African Bureau of Standards as a public entity. • The mandate will cover standards development and maintenance and the provision of conformity assessment services. • The Standards Bill will be amended by the deletion of current technical regulatory responsibilities. • The Board of Directors will be increased in size as the current Board is too small. • The Board will consist of not less than ten, and not more than fifteen members that are broadly representative of the population of the Republic. • The Board will be assisted by an Advisory Forum that will provide stakeholder input

17. Mandate of 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.

18. The Standards Bill provide for: • Maintenance of SABS as an internationally recognised standardisation institution,this is crucial for a well-functioning technical infrastructure • Development, issuing, promotion, maintenance, amending or withdrawal of South African National Standards and related normative publications serving the standardisation needs of the South African community; • Provision of reference materials, conformity assessment services, and related training services in relation to standards, including a voluntary South African Bureau of Standards Mark Scheme proving product conformity; • Development of procedures through which other bodies with sectoral expertise can be recognised as Standards Development Organisations and where these standards can be published by the South African Bureau of Standards as South African National Standards

19. Standards Bill provides for: • Obtaining membership in international, regional and foreign bodies having objects similar to an object of the South African Bureau of Standards; • Establishment and maintenance of the necessary expertise on an internationally acceptable level; • Co-ordination, interaction and management of the international, regional and bilateral interaction with other national standards bodies; • The provision of information services to deal with enquiries about standards, handle the sale and distribution of South African National Standards and related publications, as well as similar publications from international, regional and foreign bodies; The provision of the South African enquiry point to maintain the South African notification system in terms of the Technical Barriers to Trade Agreement of the World Trade Organisation;

20. Transitional Arrangements – Standards Bill • The Standards Bill provides for transitional arrangements, including that • - the CEO and all other employees of the SABS, except the employees employed in the Regulatory department of the SABS, remain employees of the reconstituted SABS; • - all assets, liabilities and rights and obligations remain the responsibility of the SABS pertaining to its responsibility for standards and conformity assessment; and • - the continuation of all notices, designations, certificates and regulations issued in terms of the Standards Act, 1993 (Act No. 29 of 1993). • - the continuation of the SABS Council till the end of its term

21. Corporate Governance - SABS • The Board of the South African Bureau of Standards will be the accounting authority as contemplated by section 49(2) (a) of the PFMA. • The Board consists of not less than ten, and not more than fifteen members which are broadly representative of the population of the Republic. • The Minister is the executive authority as contemplated by section 52 of the PMFA

22. Transitional Arrangements – Standards Bill • The Standards Bill provides for transitional arrangements, including that • - the CEO and all other employees of the SABS, except the employees employed in the Regulatory department of the SABS, remain employees of the reconstituted SABS; • - all assets, liabilities and rights and obligations remains the responsibility of the SABS pertaining to its responsibility for standards and conformity assessment; and • - the continuation of all notices, designations, certificates and regulations issued in terms of the Standards Act, 1993 (Act No. 29 of 1993).

23. Transitional Arrangements – Standards Bill continue • The Bill also provides for the appointment of a Board by the Minister. The current SABS Council was appointed by Cabinet on 1 August 2006 for a period of 3 years namely 15 August 2006 to 14 August 2009 and would continue until the end of this period.

24. Parties Consulted National Treasury and the Department of Public Service and Administration have been formally consulted in line with the PFMA on the separation and re-establishment of the SABS as a public entity as well as the establishment of the NRCS.   Other stakeholders consulted: Department of Labour; Department of Transport; Department of Agriculture; Department of Housing; Department of Health; Department of Environmental Affairs and Tourism; Department of Minerals and Energy; Department of Science and Technology; Department of Local and Provincial Government and the Presidency. National Metrology Laboratory of South Africa ( NMISA) and the South African National Accreditation System (SANAS)   Industry and other interested parties Nedlac

25. Thank you