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NATIONAL REGULATOR FOR COMPULSORY SPECIFICATIONS
ANNUAL REPORT 2010-2011
Presented to the Parliamentary Portfolio Committee
Mr M MoeletsiCEO
12 October 2011
NRCS ANNUAL REPORT - OVERVIEW
• INTRODUCTION
• NRCS BUSINESS MODEL
• GENERAL COMMENTS –VIEW FROM THE BRIDGE
• STRATEGIC GOALS
• PERFORMANCE AGAINST CORE FUNCTION GOALS
• NRCS BOARD AND GOVERNANCE ISSUES
• NRCS ANNUAL FINANCIAL REPORT
• NRCS DEMOGRAPHICS
• AUDITOR GENERAL REPORT
3
INTRODCTION: The NRCS – who are we?
National Regulator for Compulsory Specifications
of South Africa (NRCS) Established by Act 5 of 2008 On 1st September 2008 all regulatory functions of
SABS transferred to NRCS NRCS’ Mandate: Administer compulsory
specifications in the interests of public safety and
health or for environmental protection NRCS regulates IMPORTED, MANUFACTURED,
SOLD and some EXPORTED products; Staff compliment of 287 Regional offices in Gauteng, Western Cape, Eastern
Cape, KwaZulu-Natal and Free State
MANDATE: The NRCS and focus areas
The National Regulator for Compulsory Specifications Act (Act no 5 of 2008) is primarily focusing on territorial aspects as it addresses the “public safety and health and environmental protection in the Republic”.
In executing its functions, the NRCS is therefore focusing on the enforcement of regulations and the major thrust would be on “lock out” of non compliant (unsafe) goods.
Some of the NRCS activities, albeit a small focus, can be construed to support the “lock in” principle, primarily in the exportation of fishery products to the EU, Asia and SADC countries.
MANDATE: The NRCS and focus areas
The NRCS is responsible to administer three primary Acts, viz:
1) National Regulator for Compulsory Specifications Act
(Act no 5 of 2008)
2) Trade Metrology Act (Act 77of 1973)
3) Building Regulations and Building Standards Act
(Act 103 of 1977)
Perceptions…
Is the NRCS the only Regulator?
There are various national Departmental Regulators
responsible for technical regulations, viz.
Dept of Agriculture, Dept of Health, Dept of Labour,
Dept of Energy, Dept of Water Affairs, Dept of
Environment, Dept of Housing, Dept of Transport, Dept
of Communication, Dept of Trade and Industry
Facts…
Current best regulatory practice is to reference applicable
standards or part thereof in the Technical
Regulation/Compulsory Specification:
The NRCS calls up 316 SA National Standards in
60 Compulsory Specifications and
4 Technical Regulations (Legal Metrology)
NRCS Business Model – Enforcement of regulations
The NRCS is primarily responsible to administer and enforce the regulations under its jurisdiction
Its Business model to support this function consists of various activities (next slide)
NRCS Business Model
• Approval of products: Before regulated commodities enter the market, approval granted
based on test reports or certificates of conformity; Issue certificates (Letters of Authority, Homologation
or Type approval certificates) • Inspections: Inspectors visit manufactures, importers and retailers to inspect
and if needed sample products
• Sampling and testing: On suspicion or proof of non-compliance, issue directives to stop
sales
• Enforcement: If non-compliance is proved, enforce recall and/or corrective action
and/or destruction and/or notify the media and public
Current activities of the NRCS
NRCS Involvement in the Industry
IndustryNo. Technical
RegulationNo. of Referenced
SANS
Automotive 22 126
Chemicals, Mechanical and Materials
15 64
Electrotechnical 17 91
Food and Associated Industries
6 24
Legal Metrology 4 11
Totals 64 316
NRCS - View from the Bridge - General comments
Overview of aspects relating to the NRCS: NRCS embarked on • A long term strategy and performance plan that is
aligned with the dti objectives• A range of 13 projects that supports the IPAP• An MoU with the SARS to improve regulatory efficiency• Finalisation of individuals to serve on the Advisory
Forum • New regulations to the NRCS promulgated and became
effective during January 2011• Fact finding visit by the Board to the USA• Visit to Brazil and India to benchmark regulatory
activities• Technical cooperation agreement with Thailand Dept of
Fisheries
NRCS General comments
NRCS as part of the Technical Infrastructure:
NRCS Regional and International participation
• SADC Group of Experts
• Regional coordinators and secretariats for three SADC committees
• NRCS experts visited 7 SADC countries on behalf of SADC
Secretariat to sensitize law makers and evaluate metrology
infrastructures
• NRCS expert received OIML international recognition
• Participate in the WP 29 for automotive regulations
• Participate in various Codex Alimentarius
• Agreements entered with Thailand and visited various other
countries on technical matters
NRCS General comments
Overview of NRCS challenges:
• Inadequate funding especially for the Legal Metrology,
Building Regulations and Research functions• Need to invest in upgrading the IT system• Fast track Competency Development Program for staff• Human Resources management and attracting skilled
staff (as the NRCS functions in a highly specialised
technical environment)• Improved working relationship with staff and the
Workers Union (NEHAWU) to prevent unnecessary
industrial action as was evident during this year.
NRCS Strategic Goals
Ten Strategic Goals were set for for 2010-2011
1 Actively access and build new markets for maximum
coverage (Core activity)
2 Develop and improve enforcement of sanctions (Core)
3 Achieve and maintain accreditation to ensure quality
control
4 Enhance consumer education and public awareness
5 Improve brand awareness and recognition
6 Optimise revenue generation collection and protection
NRCS Strategic Goals
Ten Strategic goals (cont)
7 Aggressive skills attraction, development and retention
8 Cultivate and leverage strategic relationships and
interact with stakeholders
9 Ensure good corporate governance compliance
strengthen /develop legal resources, ICT and risk
management
10 Continuously improve on NRCS’ research and
development capacity (Core)
NRCS Strategic Goals - Performance
Performance on Core activities
1. Actively access and build new markets for maximum
coverage
a) Inspections executed
Target set – 52,940 inspections
(4,2% higher compared to previous year)
Inspections executed – 57,572
Variance: 8.7% higher than set target
NRCS Strategic Goals - Performance
Performance on Core activities (cont)1. Actively access and build new markets for
maximum coverageb. Requests received for Pre-market approvals
(9642 applications received) Target set – Response within 21 days from request
received Target achieved – 99,9% approvals granted within the
time period c. Requests for Pre-market type approvals of instruments Target set – Response within 110 days Target achieved - 82,7%(Reason for variance – New type of instruments, lack of human
resources, interpretation of evaluation criteria difficult)
NRCS Strategic Goals - Performance
Performance on Core activities
d. New and revised compulsory specifications and
technical regulations.
Target set – 8 per year
Target achieved - 100%
8 compulsory specification/technical regulations tabled to the
NRCS Board
Position paper on distinctive mark tabled to ExCo
NRCS Strategic Goals - Performance
Performance on Core activities
2. Develop and improve enforcement of sanctions
a. Directives (NRCS Act) and embargoes (Trade Metrology
Act) imposed on non compliant goods
Target - Execution within 72 hours
i) Directives 73% achieved (NRCS Act)
ii) Embargoes 100% achieved (Trade Metrology Act)
NRCS Strategic Goals- Performance
Performance on Core activities
10. Continuously improve on NRCS’ research and
development capacity
Target:
a. Identify research projects
b. Identify partnerships with tertiary institutions, industry
and research entities
Targets achieved:
i) Research on feasibility, risks, and impact analyses
were done for all compulsory specifications and
technical regulations
ii) No partnership was entered into – lack of resources
NRCS Non core activities
NRCS highlights:• New regulations to the NRCS promulgated and became
effective during January 2011• Registration of companies trading in regulated goods
was initiated • Increasing its scope of accreditation• Enterprise document management system was initiated• The Legal Metrology Division assisted the dti with a draft
Legal Metrology Policy• Communications and Marketing issued 100% alerts on
non compliant goods and destruction thereof• Carte Blance screened various episodes on enforcement
activities of the NRCS
NRCS Board and Governance overview
NRCS Board of Directors:
• Board consits of 9 members
• Board chairperson Ms S Maziya resigned. Adv D Block
appointed as acting Chairperson of the Board
• Nine Board meetings were held
Board Committees:• Audit and Risk Committee (5 meetings)
• Technical Committee (3 meetings)
• Remuneration committee (6 meetings)
Audit and Risk Committee (ARC):
• Auditor General invited to all meetings
• Chairperson resigned during May 2011 and were
replaced by independent acting Chair person
• ARC met 5 times during the year
• ARC reviewed and recommended adoption of the
unaudited financial statements for audit by the Auditor
General
• Effectiveness of internal controls were disturbed by
labour unrest and investigations into the CEO, CFO and
CIO. No malpractice findings were made.
• Internal audit found to be effective
NRCS Board and Governance overview
NRCS Board and Governance overview
Technical Committee:
• This committee considers and advise the Board on
technical matters (regulations, compulsory
specifications/technical regualtions, action on non-
compliant goods)
• Held 3 meetings during the period
NRCS Board and Governance overview
Remuneration Committee:
• Advises the Board on remuneration and HR related
matters)
• Held 6 meetings during the period
NRCS Financial History
-
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
160,000,000
180,000,000
2007 2008 2009 2010 2011 2012 2013
Income (Ex dti) Expenses
Annual Financial Statement - overview
2011
(R Millions)
2010
(R Millions)
Total income 149 121
Total expense 157 151
Sub - total (8) (30)
Government grants 33 36
Surplus for year 26 7
NRCS Demographic presentation
Black Coloured Indian White Women
166 43 12 66 110
58% 15% 4% 23% 38%
Auditor General
Auditor General :• Financial statements presented fairly• Financial performance and cash flows for the year
are in accordance with the SA Standards and GRAP and requirements of the PFMA
• No material findings on the annual performance report.
• Unqualified audit (for three successive years)
