Trade and Industry Minister Dr Rob Davies
Photo by: Duane Daws
Trade and Industry Minister Dr Rob Davies reiterated on Tuesday that the procurement of goods that conform to local content requirements was not just a recommendation for State entities but a legal requirement.
During a Portfolio Committee on Trade and Industry briefing, he noted that all organs of State were obligated to procure goods that were on the designated list and that conformed to local content requirements.
“Among the challenges we face are that some procurers do not know what is required of them. We are saying that procurement officers should go to people with local content verification to assist them,” he added.
Davies said the Department of Trade and Industry (DTI) had appointed the South African Bureau of Standards (SABS) to serve as the Local Content Verification Agency, in September 2012, and that the Local Content Verification Office was officially launched in June 2013.
“The SABS has since published the approved South African Technical Specification (SATS 1286) for the measurement and verification of local content.
“These standards should, therefore, be used to keep off shoddy work and protect businesses from shoddy verification agents. Our message is that the private sector should take it upon themselves to go to the SABS, for them to ensure that verification is done properly,” he highlighted.
The auditing and certification by the SABS was designed to give the State proof that local manufacturers were benefitting from the local content requirements. The winning bidders in government tenders would now be required to have their local content declarations verified to ensure there was no misrepresentation, fronting or misstatement of local content.
Chairperson of the Portfolio Committee on Trade and Industry, Joanmariae Fubbs, said this was another step to ensuring localisation in products and goods, to grow the South African economy and to create jobs. She added that the verification process was of a high international standard.
Davies further noted that the DTI was engaging with the office of the Auditor-General with regard to designations – a requirement that had to be implemented.
SABS CEO Dr Boni Mehlomakhulu said public procurement of low-quality goods made households unhappy. She cited an example of low-quality solar geysers, which ended up costing more to repair or replace. She highlighted the impact caused by government procuring outside the standards as they negatively affect service delivery.
“Quality assurance is important for service delivery,” she added.
She further warned that there were products that were labelled as “Made in South Africa” but that were only assembled in South Africa, with more than 90% foreign content.
Mehlomakhulu urged government to insist on localisation for products that were available in the country. She also said that foreign companies in South Africa should be required to transfer the skills and technology which would enable local companies to produce goods on their own.
Meanwhile, Davies also handed over the first local content verification certificates based on a tender issued by the City of Johannesburg to Sandown Motors, a subsidiary of Mercedes Benz-South Africa, for the supply of the Rea Vaya bus-rapid transit bus engines and chassis, with Marcopolo supplying the bus body against which there was an 80% designated local content threshold.