Report: Damaging SABS directive is seen as a commercially-driven racket

The affected industry, through their industry associations, believes that the new directive is poorly conceived and ill-considered, and came without any consultation with stakeholders. The directive was issued without consideration of wide-ranging negative economic impacts and consequences and without consideration of viable and acceptable alternatives. In this regard, they compare the new SABS directive with the damaging visa regulations promulgated by the Department of Home Affairs in 2015.

The broad-based response from industry leaders is that this unprecedented action by SABS damages the economy at a critical time and undermines the competitiveness of South African manufacturers. It introduces unfair barriers to international trade and interferes with the work of government departments, state-owned enterprises, municipalities and regulators. Industry leaders go as far as suggesting that the new directive by the SABS is little more than a commercially driven racket and an abuse by SABS Test House of its dominant market position.

SABS Test House, part of SABS Commercial SOC Ltd, has a number of SANAS accredited laboratories serving different sectors of the economy. It performs testing of products and systems on a commercial basis to both local and international standards. SABS also has recognition and reciprocity agreements with a number of the accredited standards bodies and test laboratories of other countries, whose national accreditation system falls under ILAC, the international umbrella body of national accreditation organisations, of which the South African National Accreditation System (SANAS) is a member.

SABS Test House’s customers include regulators, government departments, municipalities, state-owned enterprises, mines and industry, developers, equipment manufacturers - and indeed any organisation or individual requiring such services.

“Full testing” of a sample, component, product or system involves the full set of tests prescribed in a particular standard, in order to prove compliance with the standard. However, in many cases, there is a need for “partial testing”, which involves testing a sample, component, product or system to only a limited number of the full set of tests prescribed in a standard or specification.

The need for partial testing by developers and manufacturers arises, for example, in the development phase of a product, in order to prove an initial concept or early design, before going too far with the development of the final product. Proceeding without several partial tests along the way could have massive cost implications if the early design phases are not proven through partial testing during product development.

Regulators, such as the National Regulator of Compulsory Specifications (NRCS), also require partial testing in order to prove non-compliance of a product to a particular specification or standard. It is only necessary to prove non-compliance with one or limited number of tests prescribed in a specification or standard in order to prove non-compliance. Being forced to conduct the full set of tests to prove non-compliance is expensive, time consuming and unnecessary.

End-users of products may also wish to conduct tests to their own proprietary specifications or standards, as opposed to full tests to prove compliance with South African National Standards (SANS). An example of this is the NRS Standards, which have been developed by Eskom and municipal electricity distributors for their own specific needs. These have not followed the SABS standards generation process involving a broader range of interested parties, and now, after many years, SABS Test House will no longer test products to NRS Standards.

Overseas manufacturers who have conducted full type-testing of their products to International Electrotechnical Commission (IEC) Standards in their country of origin often need to perform partial testing in South Africa to prove compliance with those few clauses in a South African National Standard that differ from IEC standards. By agreement, SABS often adopts and overwrites IEC standards with only minor changes, to adapt them to local conditions.

The ending of partial testing by SABS Test House is so unheard of in the industrial world that the South African National Committee of the IEC is suggesting that South Africa’s membership of the IECEE – a worldwide system for conformity testing and certification of electro technical equipment and components – be suspended if SABS Test House continues to refuse to comply with the IECEE rules.

The rationale given by the Dr. Mehlomakulu for the new directive is that in terms of the Standards Act, 2008, SABS is only permitted to do full testing to South African National Standards and that partial testing falls outside of its legislative framework. Industry leaders reject this suggestion and a careful study of the Act by EE Publishers could find no such requirements. The de facto reality is that SABS has been conducting partial tests for decades, even after promulgation of the new Standards Act in 2008.

Dr. Mehlomakulu also points to cases of abuse of SABS partial test reports as a reason for putting an end to this practice. She says that SABS has been the subject of litigation resulting from the inclusion of SABS partial test reports in tenders in illegitimate efforts by tenderers to prove full compliance of their offerings with the relevant specifications or standards.

Simple solutions proposed by industry leaders to solve this problem seem lost on Dr. Mehlomakulu.

Such solutions could include a bold watermark and printed disclaimer on each page of an SABS partial test report indicating that it may not be used in a tender as proof of compliance with a specification or standard. Dr. Mehlomakulu rejects this as a possible option.

On another matter, industry leaders emphasise that for many standards, SABS Test House does not have the facilities and resources to conduct full testing. In such cases, manufacturers have in the past had partial testing done by SABS with the balance of tests done in their own accredited test laboratories, or at accredited third-party test laboratories, locally or abroad.

Now they will be forced to have full testing done abroad at great cost, because there are no accredited laboratories, including those of SABS Test House, that can do full testing to these standards.

Dr. Mehlomakulu response is that SABS can undertake the full testing and can then subcontract to third-party test laboratories (locally or abroad) for any tests that cannot be done in house by SABS Test House since is doesn’t have the budget.

Industry leaders have suggested that upgrading SABS test facilities to be able to undertake all tests of all standards makes no economic sense, and will take SABS many years to achieve, if ever. They add that SABS appears to be attempting to consolidate its monopoly through anti-competitive behaviour. Right now industry is faced with the disaster of not having partial testing available from SABS.

While the SABS appears set on its course of action to put an end to partial testing, the affected industry appears to have taken heart from a recent judgement on 9 December 2015 in the High Court, Gauteng Division, Pretoria, granting an urgent interdict preventing SABS Commercial SOC Ltd from stopping partial testing services to Natal Pump Services (Pty) Ltd, pending a full judicial review of the matter. The judge found that Natal Pump Services faced financial ruin as a result of SABS’ unilateral administrative action.

In light of the massive financial implications on the companies involved and on the economy of South Africa, the relevant industry associations and their member companies would do well to consider the judgement carefully with a view to taking legal action of their own. DM

Photo: A shopper makes her selection at a grocery store in Johannesburg July 7, 2015. REUTERS/Siphiwe Sibeko.