A n n u a l. R e p o r t 2008/09

Transcription

1 A n n u a l R e p o r t 2008/09

2 NRCS Logo colours

3 contents annual report 1 Overview 2 Mandate 3 Statement by the Chairperson 4 Report of the Acting CEO 5 Interim Management Committee 6 Current Board Members 7 Executive Management divisional reports: 8 Corporate Services 9 Automotive 10 Chemical, Mechanical and Materials 1 1 Electrotechnical and Gaming 12 Food and Associated Industries 13 Legal Metrology 14 Regulatory Research and Development Report of the Audit Committee 16 Accounting Authority Report 17 Board Approval 18 Report of the Auditor-General /09 Performance Report 20 Annual Financial Statements

4 1 Overview 1 Overview page 2

5 ANNUAL REPORT 2008 /09 Our vision Is to be a nationally, regionally and internationally recognised, respected and preferred regulatory agency. Our mission Is to provide an independent, effective and efficient service in the administration of compulsory specifications (including technical regulations and building regulations) relevant to legislation that mandates the functioning of the NRCS, with the view to protect human health, safety and the environment and ensure fair trade, in accordance with Government policies and guidelines. Our values We conduct our business in a prudent and professional manner, upholding our independence as a regulator, complying with all statutory requirements and ensuring that our services add value to our stakeholders. In carrying out our business, we are guided by the NRCS values of: Trustworthiness We deliver competent, reliable service based on trust and honesty. Accountability We assign clear areas of authority, make decisions at the appropriate level and report to our stakeholders on the effectiveness and impact of our actions. Transparency We conduct our operations and business with all stakeholders in a clear, open and responsible manner. page 3

6 2 Mandate 2 Mandate page 4

7 ANNUAL REPORT 2008 /09 Who we are The National Regulator for Compulsory Specifications (NRCS) protects consumers and promotes South Africa s competitiveness by ensuring that regulated products sold in the marketplace meet minimum safety, health and fair trade requirements. We do this by administering and enforcing the compulsory specifications and technical regulations established in terms of three Acts: the National Regulator for Compulsory Specifications Act 5 of 2008, the Trade Metrology Act 77 of 1973 and the National Building Regulations Act 103 of Performing our work on behalf of the Department of Trade and Industry (the dti), we regulate products in the following industries: Automotive Safety of vehicles and vehicle components such as head lights, bulbs, brakes, brake fluid and tyres. This includes Manufacturers, Importers and Builders (MIBs) that are covered by the mandatory requirements. Electronic products (Electrotechnical) Safety of electrical appliances (such as televisions, home theatre systems, stoves, fridges, microwave ovens, kettles and power tools), electrical cords, electrical components (adaptors and plugs), IT equipment (such as computers and computer equipment) and gaming equipment. Chemicals Disinfectants, detergents and sanitation products. Mechanical Personal protective equipment, firearms, shooting ranges and flame producing devices (such as cigarette lighters and paraffin stoves). Building and construction materials Cement and paint, as well as the administration of the National Building Regulations and related standards. Food and associated industries Frozen, fresh and canned fish and fishery products, and canned meats. Environmental protection Plastic bags, emissions and energy efficiency. Legal metrology Type approval, verification, inspection of measuring instruments and pre-packed goods, designation of private verification laboratories, training and drafting of technical regulations. To execute our mandate, we carry out market surveillance through inspections, the issuing of pre-market approvals (including sales permits) and when products are discovered to be non-compliant, apply sanctions to prevent their sale. The NRCS is funded through fees collected from industry, which comprise 75% of the income, and a government grant, which is used primarily for legal metrology functions. page 5

8 3 Statement by the Chairperson Statement by the Chairperson 3 page 6

9 ANNUAL REPORT 2008 /09 Despite being South Africa s youngest regulatory body, the National Regulator for Compulsory Specifications (NRCS) has proven itself capable, credible and independent. It is a privilege to present this report within the first seven months of the NRCS s existence, from its establishment on 1 September 2008 to the end of the financial year on 31 March When the NRCS came into being as a separate entity, it was with a clear understanding that the Regulatory division of the South African Bureau of Standards (SABS) should emerge as an independent organisation and perform its regulatory functions unhindered. The body responsible for overseeing this seamless transition was the Interim Management Committee, which was appointed by the Director-General of the Department of Trade and Industry to be the NRCS s caretaker controlling body. As Chairperson of this Committee, I am proud to report that the NRCS has made the smooth transition that was hoped for. In fact, it has done so well that industry stakeholders have reported a three percent improvement in regulatory effectiveness. This was one of the highlights of an industry survey conducted after financial year-end, covering the period after the NRCS was established. The success of the transition belies the challenges that had to be overcome in creating the NRCS as a standalone regulatory body. For the Interim Management Committee, two of the most urgent priorities were to establish the NRSC s other key governance structures and to finalise and approve the budget. page In the area of governance, it is important to bear in mind that the NRCS is defined as a section 3A organisation under the Public Finance Management Act (PFMA). The organisation, therefore, has clearly defined obligations for financial oversight, reporting, accounting standards, external auditing and procurement policy. To ensure a comprehensive view of compliance requirements, the Interim Management Committee approved the appointment of a firm of Chartered Accountants, to conduct a governance compliance audit. After identifying all governance gaps, the firm assisted in developing a project plan to establish the necessary governance and financial management structures. As a result, the Audit Committee was formed under the authority of the Interim Management Committee, the Chief Financial Officer appointed, a risk management matrix devised and an internal control system was implemented based on a clearly defined delegation of authority. In tandem with these processes, the Interim Management Committee attended to the equally pressing task of approving the NRCS strategy and business plan, budget, organisational structure, and the corporate identity. The budget posed a particular challenge. In recent years, there has been a significant decline in the levies and fees paid by industry, from which the NRCS derives 75% of its income. To ensure sufficient funding to cover the NRCS s start-up and operating costs, the Committee had to approach the Department of Trade and Industry for an additional allocation. 7

10 3 Statement by the Chairperson Another challenge which confronted the NRCS was the education of industry about the advantages of having an independent regulator to administer and enforce the country s compulsory specifications. In communicating with industry, we have continuously emphasised that for South Africa to enable access to foreign markets, we must comply with international standards and regulations requirements and that the NRCS provides the framework for compliance. On behalf of the Interim Management Committee, I wish to thank the management and staff of the NRCS for their cooperation throughout the transition. Their commitment ensured that while the new organisation was taking shape, it continued its day-to-day work without disruption. I would also like to thank my fellow Committee members for the direction and strategic leadership they provided as caretakers of the NRCS Board during its critical formative months. Consequently, there is a growing understanding that the NRCS and the SABS are entirely separate entities, and that the NRCS is governed by a distinct Act and mandate. Towards the end of the financial year, the finishing touches were being made to the NRCS as a standalone body. Among others, the NRCS s corporate identity was finalised and the organisation was officially launched at an event presided over by Mr Mandisi Mpahlwa, the then Minister of Trade and Industry. This milestone marked the completion of the NRCS s transition and paved the way for the Interim Management Committee to hand over to a permanent Board of Directors appointed by the Minister in May Sipho Zikode Chairperson: Interim Management Committee, National Regulator for Compulsory Specifications page 8

11 ANNUAL REPORT 2008 /09 Report of the Acting CEO 4 page 9

12 4 Report of the Acting Chief Executive Officer The National Regulator for Compulsory Specifications (NRCS) opened its doors on 1 September 2008 with the intention of realising its legislative mandate despite a severe lack of infrastructure. With the exception of its highly skilled and competent staff, all other resources had to be put in place from the ground up. Key among these was establishing financial systems and developing the brand identity. Based on its regulatory performance, it is fair to say that the NRCS exceeded expectations. In its first seven months as an independent body, the NRCS conducted industry inspections, took product samples and removed types and models of noncompliant goods from the market. A total of 29 sales permits were issued to companies in the automotive, electrotechnical and chemical, mechanical and materials industries. The total value of goods confiscated and/or recalled during the period amounted to R186.7 million, underlining the importance of the role the NRCS plays in protecting the health and safety of the public and the environment, and promoting fair trade. Over 31% of all non-compliant goods identified posed a potential health or safety risk to consumers. Of the goods tested for compliance with the fair trade requirements, more than 20% did not comply, leading to warnings issued to the offenders and prosecutions. In several cases, the non-compliance discovered was serious enough to prompt the NRCS to issue urgent alerts to the public through the media. Among others, the public was warned against buying defective motorcycle helmets and unsafe paraffin stoves and heaters. Consumers were also warned about certain gas cylinder retailers who were selling goods in contravention of the fair trade requirements. In carrying out its mandate during the review period, the NRCS significantly improved its client satisfaction ratings. The overall satisfaction level increased by 3.6% in 2008/09 compared to the previous year, according to the results of the latest client satisfaction survey conducted. Furthermore, just over 78% of clients surveyed said they supported the NRCS s role in preventing the sale of products that fail to comply with the health, safety, environmental and fair trade requirements. This signified an increase of 10.3% compared to the previous survey. It is worth mentioning that these successes were achieved during a period of significant organisational change. The change that the NRCS underwent on 1 September 2008 also had the potential to adversely affect service delivery to industry and staff but the transitional process was well managed, leading to high levels of staff morale with operational continuity assured throughout. Securing regulatory continuity The establishment of the NRCS as an independent entity is part of government s drive to heighten South Africa s international competitiveness and protect its citizens. It is not desirable for the same body to set standards, test, certify and regulate, hence the Department of Trade and Industry s policy decision to create the NRCS as an independent regulator. This was achieved by transferring the staff and assets of the Regulatory division of the SABS to the new entity. In total, 288 employees were transferred from SABS Regulatory to the NRCS on 1 September 2008, the date of its establishment, with all the benefits and conditions of service in terms of section 197 of the Labour Relations Act. Many of the transferred employees were technical or regulatory staff under the six operational divisions, namely Automotive, Chemical, Mechanical and Materials, Electrotechnical and Gaming, Food and Associated Industries, Legal Metrology, and Strategic Support Services, now referred to as Regulatory Research and page 10

13 ANNUAL REPORT 2008 /09 Development. With the exception of finance support staff who were also part of the transfer, there were no staffing resources to take care of payroll, human resources, ITC, legal services, communications, internal audit or procurement. During the formation of the organisation, there were no adequate support functions which made it necessary for us to enter into a contractual agreement with the SABS who could perform certain indispensable functions, including payroll services. In parallel with this agreement, the NRCS moved speedily to put its own resources in place and new appointments were made, mostly in corporate services and other divisions. In the seven-month period, additional employees were appointed, bringing the total number of staff to 290. Good progress was made in implementing NRCS s own ITC and business systems and by 28 February 2009, when the service level agreement with the SABS expired, the administrative, financial and IT systems backbone of the NRCS was fully in place. Certain services have, however, been outsourced to save costs. A good example is payroll, which was outsourced after a costbenefit analysis confirmed a greater cost-effectiveness of an outsourced solution. A healthcare service provider was also appointed to offer NRCS employees 24-hour access to health and wellness counselling services. Developments that have enhanced the NRCS s visibility in the marketplace were the implementation of its own corporate identity, including the logo, website, and the launch of the Port Elizabeth office. The organisation now has a footprint in five provinces, namely the Eastern Cape, Western Cape, Free State, Gauteng and KwaZulu- Natal. It is imperative to also mention that the NRCS has endeavoured to materially comply with the requirements of the Public Finance Management Act (PFMA). Under the guidance of the Interim Management Committee, the organisation moved quickly to implement the PFMAcompliant processes. These include the preparation of monthly financial statements, compiling and maintaining a comprehensive asset list and establishing an effective internal control system in the form of effective approval processes, an internal audit function and risk identification and management. As a schedule 3A public entity, the NRCS reviewed and branded approximately 40% of policies and processes. A challenge that will have to be seriously considered in the coming year is the funding of the NRCS. The decline in levies from industry and insufficient funding from government is a cause for concern. The greatest worry is the lack of proper funding for the Legal Metrology Division, which should be fully funded by the government. Notwithstanding these financial challenges, the NRCS is a viable and vibrant organisation that intends to add value to the industry and consumers alike and to contribute constructively to South Africa s international competitiveness. Moses Moeletsi Acting Chief Executive Officer National Regulator for Compulsory Specifications (NRCS) page 11

14 5 Interim Management Committee 5 Interim Management Committee page 12

15 ANNUAL REPORT 2008 /09 The Interim Management Committee was the controlling body appointed by the Director-General of the Department of Trade and Industry to oversee the transition from an in-house regulatory division of the SABS to the NRCS, a separate and independent regulatory entity. Members of the Interim Management Committee and their credentials Mr Sipho Zikode Chairperson of the Interim Management Committee External member Chief Director: Industrial Participation and Acting Deputy Director-General: Empowerment and Enterprise Development Division, the Department of Trade and Industry B Comm Economics (University of the Witwatersrand) Post Graduate Diploma in Marketing Management (UNISA) MBA (University of Pretoria) Joined the dti in 1997 as a Techno-Economist, rising to Chief Director: Industrial Participation (2003 to present) In parallel with his role as Chief Director, appointed Acting Deputy Director-General: Empowerment and Enterprise Development Division at the dti in 2007 Dr Wynand Louw External member - Acting Chief Executive Officer of the National Metrology Institute of South Africa (NMISA) PhD Physics (University of the Free State) Acting CEO of NMISA since 2007 Board member of the National Laboratory Association (NLA) and NMISA Vice-chair of the International Cooperation in Traceability in Analytical Chemistry (CITAC) International representative of the Surface Analysis working group of the Consultative Committee for Amount of Substance (CCQM) at the Key Comparison Working Group of CCQM Serves on the international advisory panel of Euro Nanostrand, which supervises nanotechnology projects in the European Union Chairperson of the NRCS Audit Committee in 2008/09 page 13 Mr Michael Peet External member - Chief Executive Officer of the South African National Accreditation System (SANAS) MBA, MPhil and PhD-Public Affairs (University of Pretoria) Chief Executive of SANAS from 2007 to March 2009 Member of the SA Institute of Electrical Engineers, the SA Institute of Measurement and Control and the Institute of Directors of Southern Africa Director of the National Laboratory Association (NLA) Ms Petro Potgieter External member Deputy Director: Economic Services, National Treasury Tertiary qualifications in Economics, Public Finance, South African Financial Systems and Markets Started her career at the Department of Finance (now National Treasury in August 1983) Currently Deputy Director in the Chief Directorate: Economic Services of the National Treasury Ms Elsabe Steyn External member - Director, Department of Trade and Industry MPhil in International Business Management (University of Pretoria) MSc Engineering Business Management (Morgan University) Joined the dti in 1985 and was appointed in 2004 as Director, Technical Infrastructure, where she gained experience in the areas of standardisation, quality assurance, accreditation, metrology and technical regulations

16 6 Interim Management Committee Mr Pantelis Nicholas Tselentis External member - Legal and Regulatory Affairs Manager of the Consumer Goods Council of South Africa B Social Sciences (University of Natal) Certificates in International Trade Law, Project Management and Competition Law Attended National Department of Agriculture strategic meetings on food price/poverty alleviation in 2008 Member of the Food Legislative Advisory Group since 1997 Part of the South African delegation to the Codex Commission since 2001 Member of the Stakeholder Forum of the South African Revenue Service since 2004 Has served on numerous trade-related committees in BUSA/NEDLAC since 2005 Mr Moses Moeletsi Internal member - Acting Chief Executive Officer of NRCS Mr Bongani Khanyile Internal member - General Manager: Corporate Services at NRCS Human Resources Management Diploma (Institute for Personnel Management) Higher Diploma in Education (University of Natal) Marketing and Sales Diploma (Damelin) Practical Project Management (UNISA) Information, Communication and Telecommunications Regulation, Policy and Management Certificate (University of the Witwatersrand) Technical Diploma for Technicians (Light Current) (Umlazi Technical College) Public Finance Management Act (PFMA) and ISO 9000:2000 (SABS) Finance Project Manager at Telkom South Africa from 2000 to 2003 Employed at the SABS from 2000 to September 2008, serving in various capacities, including Senior Manager: Corporate Services B Juris (University of Bophuthatswana) BBA (Andrews University, Michigan, United States) Diploma in Theology (Bethel College, Butterworths) Advanced Diploma in Labour Law (Rand Afrikaans University) Chief Director in the Department of Finance and Economic Affairs of the Gauteng Provincial Government from 1998 to 2004 Chief Director of Policy and Legislation in the Department of Trade and Industry from 2004 to 2005 SABS Regulatory Executive from 2005 to 2008 Acting CEO of NRCS from 2008 to date page 14

17 ANNUAL REPORT 2008 /09 Current Board Members 6 page 15

18 6 Current Board Memebers The newly appointed NRCS Board Members Ms Savannah Maziya Chairperson Mr Moses Moeletsi Acting CEO Ms Lillibeth Moolman Ms Dora Ndaba Prof. Sadhasivan Perumal Mr Sipho Zikode Adv. Derick Block Ms Funzani Melato Mr Nico Vermeulen page 16

19 ANNUAL REPORT 2008 /09 Executive Management 7 From L to R: Michael Young, Stuart Carstens, Anjue Hirachund, Moses Moeletsi, Thomas Madzivhe, Patricia (Patt) Mazibuko, Bongani Khanyile, Francois (Zen) Fourie Absent: Werner van der Merwe page 17

20 7 Executive Management Executive Management for the period ending 31 March 2009 Moses Moeletsi Acting Chief Executive Officer Refer to Interim Management Committee on page 14 Werner Melt van der Merwe Chief Financial Officer CA(SA) BCom Accounting (University of Pretoria) BCom Accounting Honours (University of Pretoria) Certificate in the Theory of Accounting (University of Pretoria) Chief Executive Officer at First National Bank Personal Loans from 2005 to 2007 Chief Financial Officer of Banking Operations and FNB Loans at First National Bank from 2000 to 2004 Financial Manager at Apron Services from 1996 to 1999 Registered member of the South African Institute of Chartered Accountants Bongani Khanyile General Manager: Corporate Services Refer to Interim Management Committee on page 14 Stuart Carstens General Manager: Legal Metrology BA majoring in Public Administration and Communications (UNISA) Trade Metrology Certificate (SABS) SABS ISO 9000 and SABS 0259 Various public service courses, including Middle Management, Instructors, Public Speaking, Registry Management and Basic Law Co-operative Education (Cape Town Technikon) Employed at the Trade Metrology division of the SABS from 1971 to August 2008, serving in various capacities, including Senior Controller: Regional Offices Anjue Hirachund General Manager: Automotive National Diploma in Chemical Engineering (Technikon Natal) Diploma in Production Management (Damelin) Diploma in Quality Management (Damelin) Management Development Programme (UNISA) Held various positions at Alpha, Umgeni Water and Delkor Technik Served at Johnson Matthey (1999 to 2006)in various capacities from Production Engineer to Production Superintendent Employed as Manager: Automotive in the Regulatory division of SABS in 2006, then as Senior Manager in page 18

21 ANNUAL REPORT 2008 /09 Thomas Madzivhe General Manager: Chemical, Mechanical and Materials National Diploma in Environmental Health (Tshwane University of Technology) BTech degree in Environmental Health (Tshwane University of Technology) Master s of Management (Public and Development Management) (University of the Witwatersrand) Executive Development Programme (School of Business Leadership, UNISA) Marketing and Marketing Research Programme (UNISA) Total Quality Management Programme (UNISA) Financial Management for Non-Financial Managers (Wits Business School) Regulatory Impact Analysis Training Course (College of Europe, Belgium) Employed at the Department of Health and Department of Labour from 1995 to 2004 in various capacities, including Environmental Health Practitioner, Senior Inspector: Occupational Health & Safety and Deputy Director: Labour Market Information, Statistics and Planning Served at the SABS from 2005 to August 2008, first as Manager: Consumer Health and Safety, and then as Senior Manager: Chemical, Mechanical and Materials Michael Young General Manager: Food and Associated Industries National Diploma Food Technology (Cape Technikon) National Higher Diploma Food Technology (Cape Technikon) Quality Controller at Suiderland Development Corporation from 1984 to 1987 Employed at the Regulatory Division of the SABS from 1987 to 2008 in various capacities, including Manager and Senior Manager: Food and Associated Industries Director on the Board for the International Association of Fish Inspectors (IAFI) Leader of the South African delegation to the Codex Committee for Fish and Fishery Products (CCFFP) Member of the South African delegation to the Codex Alimentarius Commission (CAC) Member of the South African Association for Food Science and Technology (SAAFoST) Member of the Marine Aquaculture Steering Committee for Food Safety and Quality page 19

22 7 Executive Management Patricia (Patt) Mazibuko General Manager: Electrotechnical and Gaming National Technical Certificate - Civil (Johannesburg Technical College) National Diploma in Construction Management and Quantity Surveying (Cape Peninsula University of Technology) BTech degree in Construction Management (Tshwane University of Technology) Management Advancement Programme (Wits University Business School) From 1994 onwards, held various positions in the construction industry, including Project Manager of the Royal Bafokeng Administration, Consulting General Manager at Semag Housing Corporation (Gauteng Department of Housing) and Regional Manager: Housing at the City of Johannesburg, where she won an Innovativeness Award Professional member of the Black Management Forum Francois (Zen) Fourie General Manager: Regulatory Research and Development BSc in Zoology and Botany (Rand Afrikaans University) BSc Honours, MSc and PhD in Zoology (Rand Afrikaans University) Lectured at the University of Pretoria s Department of Zoology from 1975 to 1984 From 1984 to 1996, held various positions, including Head and Associate Professor in the Reproductive Biology Research Unit, at the University of Pretoria s Medical School Author/co-author of 65 scientific publications Joined the SABS in 1996, serving in various capacities, including Divisional Director: Research and Development Registered member of the South African Council for Natural Scientific Professions Registered Medical Scientist and Clinical Technologist with the Health Professions Council of South Africa Registered with the South African Academy of Science, Arts and Culture page 20

23 ANNUAL REPORT 2008 /09 Corporate Services 8 page 21

24 8 Corporate Services division Corporate Services division at a glance Corporate Services is the administrative backbone of the NRCS, providing the following services to the rest of the organisation: Human resources, including training, skills development, employment equity and labour relations functions. External and internal communication. Legal services. Information technology services. Quality, Environment, Safety and Health (QUESH). Strategy and business planning and reporting. Corporate Services played a leading role in facilitating the establishment of the NRCS council with its own legislative mandate as an independent regulator. Although initially running on a skeleton staff of only six people, including the General Manager, the division managed the logistics of the transition while at the same time developing the administrative and financial systems of the new organisation. In overseeing the establishment of the NRCS, Corporate Services was responsible for the transfer of employees and assets, as well as for securing the continuity of key administrative functions, and for putting in place new organisational structures to take the NRCS forward. The smooth transfer of employees was a priority for the successful establishment of the NRCS and was achieved in line with section 197 of the Labour Relations Act. The transfer went hand in hand with an intensive internal communications programme aimed at ensuring that employees were fully aware of the reasons for the split from the SABS, the unchanged status of their salaries and benefits and the advantages of being part of the NRCS as an independent entity. As a result, employee morale remained high, before, during and after the transition, enabling the NRCS to project a united front to industry stakeholders. On the day of the split, the division had already secured three NRCS bank accounts (deposit account, salaries account and expenses account). This was achieved after following the process of attaining approval from page the Interim Management Committee and Treasury Department. Within the first few months of the split, the NRCS was registered with SARS and the Department of Labour for compliance with various legislative requirements. Corporate Services also oversaw the transfer of assets and established the NRCS s financial system, including its chart of accounts, and procurement processes. In addition, working under the direction of the Interim Management Committee, the division appointed a firm of Chartered Accountants to assist with critical governance processes such as internal auditing and risk management. On 1 October 2008, the organisation managed to migrate to a separate JDE financial system with all financial information secured. During October and November, the NRCS procured 140 laptops and 89 desktops to replace the SABS computers that were to be returned in November The division managed the development of the NRCS website and intranet, which are in operation and reflect the scope of the NRCS and work done. The application of the NRCS brand was completed within the first two months following the split and the brand was continuously promoted through promotional materials and videos. Yet another priority was to ensure that crucial support services continued to be provided to the organisation. However, apart from a limited number of finance support staff, no support services employees were part of the transfer from the SABS. To ensure continuity of the payroll, human resources and IT functions, among others, Corporate Services made arrangements to acquire these services from the SABS on a short-term contractual basis. By the time this contract came to an end in February 2009, the NRCS was fully self-sufficient and all corporate services departments were up and running, including IT, marketing, legal services, QUESH, Strategy and Business Planning and human resources. Other major milestones achieved by Corporate Services in the process of establishing the NRCS as an effective, professionally run organisation were: 22

25 ANNUAL REPORT 2008 /09 The job evaluation exercise conducted in January 2009 of all nine senior management positions. The feasibility study performed on the costeffectiveness of providing internal payroll services versus outsourcing the payroll function. Based on the results of this study, the payroll was outsourced. The establishment in February 2009 of the health and wellness committee, and preparations for the creation of an Employment Equity committee. Progress made in developing the NRCS s own skills development framework and preparing to register with the Services Sector Education and Training Authority. By the end of the financial year, the NRCS was functioning as a fully fledged, self-contained organisation in all respects, underlining its status as an independent entity willing and able to meet its statutory mandate. By the end of March 2009, the total corporate staff complement was 16. page 23

26 9 Automotive division 9 Automotive page 24

27 ANNUAL REPORT 2008 /09 The Automotive division at a glance Automotive ensures the safety of all vehicles and certain safety-critical vehicle components sold in South Africa, including: Passenger and goods vehicles, as well as agricultural tractors and motorcycles. Tyres, safety glass, lamps, lights, brake and clutch fluids and replacement brake lining. Child-restraining devices. Motorcycle helmets. The National Department of Transport has appointed the NRCS as the official Inspectorate of Manufacturers, Importers and Builders (MIBs) in terms of the National Road Traffic Act. Automotive also enforces all compulsory specifications relevant to motor vehicles and the abovementioned motor vehicle components. Introduction In line with declining vehicle sales in South Africa as a result of the global economic situation, the Automotive division experienced a decrease in the number of approvals received from the industry. The division conducted just over inspections during the period. In the process, its inspectors identified numerous cases of non-compliance and took the necessary action to compel the companies concerned to stop selling the non-compliant products. In some cases, the goods concerned to be returned to the countries of origin. This applied to a consignment of 110 substandard tractors for which the division rejected a sales permit application and ordered them to be returned to their country of origin. Such action is important in ensuring that South Africa, and indeed the entire Southern African region, is not seen as a dumping ground for substandard imports. In another serious case of non-compliance during the period under review, Automotive issued a public alert through the media warning members of the public against buying pisspot-type and traditional-type motorcycle helmets manufactured by Stinga Incorporated (also trading as Lafe Helmets and Accessories). The division s effectiveness in removing substandard or unsafe products from the market continued to be supported by the use of the enatis system. Through this system, each new vehicle model is assigned a enatis number. If any form of non-compliance is identified and linked to that model, and the manufacturer, importer or builder fails to take corrective action, the model number is suspended. This means that no further vehicles of that model can be registered in South Africa. As the enatis system is an important tool in combating non-compliance, the Automotive division was pleased to note the external investigations conducted found no substance to an allegation made in 2008/09 concerning the fraudulent issuing of NaTIS numbers. Bringing about harmonised regulations The Automotive division is committed to contributing to harmonised vehicle safety requirements throughout the Southern African Development Community (SADC). Indeed, the division is the appointed secretariat to the SADC Forum on the Harmonisation of Vehicle Regulations. As such, it has been responsible for drafting the following documents: Equipment of Vehicles, Vehicle Dimensions, Loads on Vehicles, Transportation of Dangerous Goods, Vehicle Test Stations and Roadworthiness of Motor Vehicles. A definite highlight of the year was the division s role in facilitating the successful SADC agreement on the Vehicle Dimensions, Loads and Vehicles and Vehicle Equipment documents. Internationally, the Automotive division represented South Africa at key vehicle safety forums, including the 2009 Symposium on International Automotive Technology (SIAT 2009). As the country s designated administrative department, Automotive also took part in the Working Party 29 World Forum for Harmonisation of Vehicle Regulations, as well as the WP 29 forum for subsidiary bodies. Matters raised at these events included pollution and energy, general safety, brakes and running gear and passive safety. page 25

28 9 Automotive division Stakeholder engagement Throughout the period under review, the division engaged with industry and other stakeholders to ensure common understanding on vehicle safety matters. In the sphere of government, most of the interaction was with the national and provincial Departments of Transport (DoT), through forums such as the DoT Vehicle Technical Committee, DoT Abnormal Loads Committee and DoT Interprovincial Policies and Procedures Meeting. In addition, Automotive engaged with the SAPS Vehicle Crime Forum and the Department of Trade and Industry. Engagement with industry was wide-ranging. Among others, the division held discussions with the National Association of Automobile Manufacturers of South Africa (NAAMSA), the Institute of Road Transport Engineers Technical Committee, the South African Bus Operators Association (SABOA) Technical Committee and various SANS Technical Committees. In the coming year, the Automotive division looks forward to further improving relations with stakeholders in the interest of working together to protect the health and safety of consumers and the environment, and to ensure fair and ethical trade in the industry. page 26

29 ANNUAL REPORT 2008 /09 Chemical, Mechanical & Materials 10 page 27

30 10 Chemical, Mechanical & Materials division CMM division at a glance The Chemical, Mechanical & Materials division (CMM) works with products in six industries: Personal protective equipment, which includes devices worn to protect the respiratory tract, personal flotation devices such as lifejackets and buoyancy aids, and swimming aids. Firearms and associated industries, focusing on the safety of firearms for personal use and at shooting ranges. Health-related products, mainly disinfectants, detergents and other goods used for cleaning and sanitation. Environmental protection, focusing on preventing damage to the environment by plastic carrier and flat bags. Flame-producing devices, including lighters and non-pressure paraffin stoves and heaters. Construction materials such as cement and paint. Introduction The products monitored by CMM are in everyday use in homes, workplaces and recreational facilities across South Africa. Among them are such commonly used items as disinfectants, lighters, plastic bags, paraffin stoves and heaters which, unless properly manufactured, stored and distributed, can put the health and safety of people and the environment at risk. CMM s role is to give South Africans peace of mind that the products under its control conform to minimum safety and environmental requirements in the form of compulsory specifications. During the period under review, the CMM division s inspectors conducted a total of industry inspections. These inspections were distributed across all six industries with which the department works, namely cleaning and sanitation products, construction materials, flameproducing devices, firearms and associated industries, personal protective equipment, and plastic bags. In addition, the division issued a total of 217 certificates, of which 74 were product approvals, 52 disinfectant registrations and 91 shooting range assessments. As a result of its inspections, the division discovered various consignments of goods that did not comply with the compulsory specifications concerned. The total value of these products, which were removed and destroyed, was estimated at R1.39 million, as shown on the table below. Product Quantity and retail price per unit Estimated retail value Plastic bags at 23c each R Non-pressure paraffin stoves at R100 each R Non-pressure paraffin heaters 729 at R360 each R Lighters 1000 at R2.50 each R Disinfectants 305 sprays at R26.04 each R Total estimated value R In one case involving non-compliant paraffin heaters and stoves, the potential danger to public health was so severe that a consumer warning was issued through the media. This alert was released on 8 December 2008 to notify consumers that the NRCS had discovered stoves and heaters in the marketplace that did not meet compulsory specifications (VC9089:2006). The warning stated that if bought or used, these products could result in serious injury, death or the destruction of property. At the same time, the CMM division launched an investigation to find the importers of the non-compliant heaters and stoves, which had been found in shops around the country. The investigation led to a warehouse page 28

31 ANNUAL REPORT 2008 /09 in Johannesburg, where CMM confiscated stoves and heaters after the owner denied being an importer and refused to provide information on the supplier. In another case, involving a major retailer, inspectors found that five different non-compliant disinfectants were being sold at one of the retailer s branches in Pretoria. A notice was served advising the retailer to stop selling the non-compliant disinfectants and a directive was served to the regional office in Florida, Gauteng. An agreement was reached with the retailer for the recall of the non-compliant disinfectants. CMM also engaged with the suppliers of the noncompliant disinfectants, who completed the registration with approvals section, submitted proof of compliance and paid levies for the confiscated stock. At the end of the financial year, the only outstanding step was for the retailer to arrange for the destruction of the noncompliant imported products, which would then allow for the withdrawal of the directive. New compulsory specifications introduced Another highlight of the year was the introduction of two new compulsory specifications, one for personal flotation devices (VC8032:2009) and the other for swimming aids (VC9090:2009). Both specifications were published in Government Gazette no on 6 February In addition, the division participated in developing the new compulsory specifications for treated timber and respiratory protective devices. It is expected that these will be promulgated and implemented in the 2009/10 financial year. In April 2008, the division submitted an application to the South African National Accreditation System (SANAS) for the accreditation of its inspection processes for personal protective equipment and for disinfectants and detergent-disinfectants. SANAS conducted an initial assessment of the division s management system and related processes, and raised only three findings for correction. It is expected that SANAS will grant full accreditation during the coming financial year. Other major developments that occurred during the period under review were: An agreement was reached with the cement industry on the payment of levies. The industry agreed to pay the levies regardless of whether or not they are mark holders. Increased visibility and coverage Interaction with industry and other stakeholders took place throughout the period. The division engaged with industry bodies such as the Cement and Concrete Institute, the South African Practical Shooting Association and the Plastics Federation of South Africa, as well as with the South African Marine Safety Authority and the Paraffin Safety Association of South Africa. Regular interaction with industry bodies, government departments and other organisations involved in safety is important in raising awareness of the CMM compulsory specifications and addressing problems such as underdeclaration of production figures, which affects levy payments. Looking ahead to the 2009/10 financial year, the CMM division anticipates holding a stronger position to address the challenges experienced during the period under review. The greatest of these challanges was the high rate of non-compliance in imported products, underdeclaration of production figures for levy payments, and the tendency for some clients in the industry to wait for CMM s inspectors to find them before they apply for approval. Improvements such as the gazetting of levies and fees payable, the filling of all vacancies and full accreditation from SANAS will go a long way towards building the division s enforcement capacity. page 29

32 1 1 Electrotechnical & Gaming division 1 1 Electrotechnical and Gaming page 30

33 ANNUAL REPORT 2008 /09 Electrotechnical and Gaming division at a glance Electrotechnical and Gaming regulates the following categories of products: Appliances Electrical power tools Electronic equipment Sound and communications equipment IT equipment Lighting equipment, components and lamp control gear Components of appliances such as switches Electric cables and flexible cords Electric plugs, socket outlets and adaptors Components of low-voltage fixed wiring installations, including circuit breakers and earth-leakage protection Gaming machines and gambling equipment Introduction In the interests of consumer safety, no electrical or electronic product or equipment may be sold in South Africa unless it has been approved by the NRCS s Electrotechnical and Gaming division. This unit also protects consumers taking part in gambling activities by ensuring that all gaming and bookmaking equipment in use is safe, fair, secure and reliable. Electrotechnical Efficiency gains for approvals and inspections Despite limited testing facilities and the large number of applications received from manufacturers and importers of electronic and electrical goods, the division succeeded in improving its approval turnaround times during 2008/09. On average, the time taken to complete the approval process was reduced from 15 days in 2007/08 to five days in the period under review. In total, the division issued certificates confirming that the goods concerned had been assessed, found to be compliant with the compulsory specifications and approved. There is a growing awareness among importers of electrical and electronic goods that entry to the South African market is prohibited without a letter of authority from the NRCS. Due to the close working relationship between the NRCS and the Customs and Excise division of the South African Revenue Service (SARS), this requirement is being vigorously enforced. Customs and Excise officials make the point of checking that importers hold valid letters of authority. They not only verify the letters physically produced at the points of entry but also cross-check the documentation against the NRCS s database, to which SARS has realtime access. In the next financial year, it is anticipated that these arrangements will be formalised through a memorandum of understanding. Product sampling and inspections are an important part of the division s regulatory role as these activities highlight the fact that compliance is not a once-off event but an ongoing process. In all, Electrotechnical and Gaming took 226 product samples and conducted inspections during the review period. When non-compliant products were found during inspections, the goods were removed from the premises of the retailers, manufacturers or importers concerned. The goods collectively valued at many millions of rands were removed from the market, including approximately R39.1 million worth of non-compliant socket outlet adaptors and cord extension sets. In following up on retailers, manufacturers or importers of non-compliant goods, Electrotechnical and Gaming issued 126 directives. The directives required the suppliers concerned to stop selling the goods until compliance had been achieved, and in some cases called for the goods to be destroyed or returned to the countries of origin. The division wishes to acknowledge the role of the South African Police Services in helping the NRCS staff to enter the premises of companies manufacturing or trading in non-compliant goods. Keeping specifications relevant and current In total, the division administers 15 compulsory specifications for electronic and electrical products. The specifications are regularly reviewed to ensure they remain relevant and reflect the latest international trends and best practices, and new specifications are prepared where gaps are identified. In 2008/09, the division reviewed and revised the compulsory specification for page 31

34 1 1 Electrotechnical & Gaming division Electrical and Electronic Apparatus (VC 8055), introduced a new specification for Lamp Control Gear (VC 9087) and began drafting new specifications for Single Capped Fluorescent Lamps (VC 9091). In another important development, the division submitted an application to the South African National Accreditation System (SANAS) for the accreditation of its quality system, inspections and sampling approvals processes. Accreditation was granted, confirming the credibility and expertise of the department s systems, processes and procedures. Engaging with the international regulatory community enables the division to remain abreast of the latest methods for encouraging compliance and dealing with non-compliance. For this purpose, the division interacted with a number of international regulatory and certification bodies during the year, including: The International Electrotechnical Commission System of Electrical Equipments and Components, Committee of Testing Laboratory (IECEE-CTL), Czech Republic. The International Electrotechnical Commission System of Electrical Equipments and Components (IECEE CMC), South Korea. Inspection Benchmarking with China Quality Certification (CQC), Beijing, China. International Electrotechnical Commission (IEC) Technical Committee (TC) 61 Annual General meeting (AGM), Sao Paolo, Brazil. Proficiency/Witness Testing, Samsung, South Korea. Stakeholder interaction The division made a point of interacting with government departments and NGOs involved in health and safety, including the Department of Labour, on whose behalf the NRCS approves fixed wiring electrical products and components of low-voltage electrical installations for domestic and industrial use (as per Table 4.2 of SANS Wiring code). In the case of industry stakeholders, Electrotechnical and Gaming engaged with role-players such as the Illumination Engineering Society of South Africa, the Consumer Electronics Association, Electrical Switchgear Association of South Africa and the Association of Electrical Cable Manufacturers of South Africa. The division was also an active participant in the activities of the Electrotechnical Association Quarterly Meeting (EAQM) and welcomed the establishment of the EAQM in regional offices like Durban and Cape Town. Gaming The NRCS administers the compulsory specification for the control of gambling machines and equipment, including bookmaking apparatus. Its mandate to carry out this function, as outlined in the National Gambling Act no. 7 of 2004, entails providing three types of services. These services are to determine compliance with the compulsory specification by evaluating test reports from recognised test laboratories, issuing letters of certification for gaming and gambling equipment to the manufacturer or supplier, and providing general assistance to the National Gambling Board, the provincial gaming boards and the gaming industry. Representatives of the department attended the Gaming Regulators Africa Forum (GRAF) held in Kenya in October Within South Africa, the department held quarterly meetings with the National Gambling Board to discuss operational issues. page 32