The South African Bureau of Standards (SABS), which was placed under administration by Trade and Industry Minister Dr Rob Davies earlier this year, intends lifting its two-year moratorium on the partial testing of product conformance, also referred to as customer specific requirement testing.
The suspension of the service, together with a serious backlog in the issuance of compliance certificates, emerged as a major source of frustration, as well as client complaints, ahead of the Minister’s June 28 announcement that he would be placing the SABS into administration and would be dissolving its board.
However, it has also been widely reported that the decision may have been influenced by the alleged issuance of an irregular certificate of approval for noncompliant coal delivered by the Gupta-family-owned Brakfontein mine to Eskom.
Davies subsequently appointed three senior Department of Trade and Industry officials as co-administrators, including Garth Strachan, Jodi Scholtz and Tshenge Demana. They have been given until the end of March to finalise a diagnosis of the organisation’s current difficulties and to initiate a turnaround plan.
Strachan tells Engineering News Online that the intention is to pursue a progressive lifting of the partial-testing moratorium, which has been blamed for raising the cost of compliance across industry and which has also harmed the agency’s reputation.
The decision to withdraw the service was reportedly taken following an assessment of the legal implications of the 2008 Consumer Protection Act. The leadership at the time determined that the legislative effectively stripped the SABS of its powers to assess conformity as it deemed expedient.
“The moratorium on partial testing will be sequentially lifted taking into consideration legal issues, human resource and infrastructure capacity at the SABS, financial considerations and priority industrial sectors,” Strachan says, adding that the reinstatement of the crucial function was a clear mandate to the co-administrators by the SABS shareholder, the Minister and Department of Trade and Industry.
Strachan also reports material progress in clearing the permit backlog, which he describes as being “very small” currently. “The resolution of outstanding customer certificates is now being supported by the implementation of an optimised information and communications technology system and we are also expediting the reissuing of expired permits.”
The SABS is also interacting more proactively with stakeholders, including through the National Economic Development and Labour Council, to improve the way it manages the development and maintenance of national standards. In the process, it will also seek to strengthen the role played by technical committees that include specialists drawn from industry.
In parallel, a diagnostic process is being carried out in an effort to define priorities for the short-term turnaround plan, as well as to provide input into the longer-term strategy. The process will also assist in identifying gaps in South Africa’s technical infrastructure and human capital for the delivery of conformity assessments and testing.
Strachan stresses that there are no immediate “going-concern issues” and that there is also no intention to “wield an axe” across the 900-employee-strong agency.
Likewise, no financial bail-out is being considered, despite some balance-sheet pressures, as well as the loss of revenue as a result of some commercial clients seeking alternatives to the SABS. The bulk of the SABS’ yearly revenue of around R900-million is derived from the sale of services to private clients, supported by fiscal transfers of around R200-million.
The process is also geared towards defining a sustainable business model that balances the SABS’ developmental and commercial mandates, while positioning the agency to meet the demands of the Fourth Industrial Revolution.
The initial strategy work is being conducted internally, but experts will be brought in to assist in providing insight into global best practice and how these “exemplars” could be integrated into the way the SABS operates.
“We are not rushing to procure consultants, because the worst thing to do, in my opinion, is to bring in experts before you’ve got a good handle on precisely what kind of work you want done.”
Strachan refuses to be drawn on the possible impact of several legal cases being brought by one former executive and five nonexecutives, who were affected by the Minister’s decision to place the SABS into administration.
“We will ensure that the turnaround strategy concentrates the SABS on its core functions of conformity assessments and testing, while rebuilding confidence and a collaborative approach with industry.”
The intention is to “chart a new course, which builds on the organisation’s historical strengths, rebuilds some of the competencies that have been lost and positions it to support the country’s long-term industrial effort”.