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NRCS STRATEGIC PLAN & ANNUAL

PERFORMANCE PLAN

Presentation to:

Portfolio Committee on Trade and Industry

Katima Temba

Acting CEO

Overview

• INTRODUCTION

• NRCS BUSINESS MODEL

• NRCS STRATEGY AT A GLANCE

• STRATEGIC GOALS

• NRCS ANNUAL PERFORMANCE PLAN

• 2013/14 DELIVERABLES

• NRCS BUDGET

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Introduction

• National Regulator for Compulsory Specifications of South Africa

(NRCS), Established by Act 5 of 2008

• NRCS‟ Mandate: Administer compulsory specifications in the

interests of public safety and health or for environmental protection

• NRCS regulates Imported and Locally Manufactured products and

issue health guarantee certificates for fishery products mostly

destined for the EU and the far East.

• NRCS has a Staff compliment of 290 and has regional offices in

Gauteng, Western Cape, Eastern Cape, KwaZulu-Natal and Free

State

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NRCS Mandate

• NRCS mandate is derived from three primary Acts:

– National Regulator for Compulsory Specifications Act (Act no

5 of 2008)

– Trade Metrology Act (Act 77of 1973)

– Building Regulations and Building Standards Act, (Act 103 of

1977)

• Secondary Act

– Foodstuffs, Cosmetics and Disinfectants Act , ( Act 54 of 1972)

– National Road Traffic Act, Act 93 of 1996

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Additional Mandate

• NRCS also regulates other products covered by MOUs from

other national departments:

– Department of Transport,

– Department of Health,

– Department of Labour,

– Department of Environmental Affairs

– Department of Agriculture, Forestry and Fisheries (DAFF)

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NRCS Strategy

• NRCS strategy takes into account all the three main Acts, legislation,

Industrial Policy Action Plan (IPAP) and other policies available to

the National Regulator for Compulsory Specifications.

• The NRCS in executing its functions of protecting the consumer and

the environment, will focus on the enforcement of technical

regulations and the major thrust would be on the “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.

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NRCS Core Process

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NRCS Value Chain

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NRCS Strategic Direction

• NRCS serves to regulate the development and adherence to

compulsory minimum product specifications in South Africa.

• This regulatory function addresses failures in the market system

whereby businesses may produce, import or sell products or services

that may harm the consumer and / or the environment or may fall

short of what is promised in terms of quantity or safety (trade

metrology).

• The NRCS is mindful of the need to balance the burden of over-

regulation with the benefits of pragmatic, focused regulation. An

over-focus on regulation may well stifle economic growth, whilst a

failure to regulate has significant societal costs.

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NRCS Strategic Direction Continued

• NRCS will in this financial year and the medium term move to a more

intelligent, efficient and effective way of regulating.

• Utilisation of technology, setting up the IT infrastructure

• The IT infrastructure will enable the functioning of databases that will

allow for easy risk profiling in support of the NRCS risk based

approach

• Aspires to built market related intelligence capacity

• Engage and network with other regulatory entities to extract relevant

information to enhance the NRCS functional capacity.

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NRCS Strategic Direction Continued

• NRCS will invest in research to better understand our regulatory

environment and to uncover the „compliance gaps‟ that exist outside of

our known areas of coverage.

• Technology in this respect will enable investment in:

– Client relationship management which will enable stakeholders to apply

for NRCS registration and submit documentation to the NRCS via the

web the

– NRCS will be electronically linked to SARS for easy monitoring of

imported goods regulated by the NRCS

– NRCS will continue to emphasize and focus on Stakeholder

Engagement

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NRCS Strategic Direction Continued

• Border Enforcement:

– The NRCS will continue to be conduct border inspections

– The border inspections will be integrated into normal day to day

operations of the Entity

– Inspections will focus mostly on Electro-technical products

– The profiling of containers will be done in consultation with SARS and

Border police

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Risk Based Approach

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Compulsory Specification and Linkage to SANS

NRCS Involvement in the Industry

Industry No. Technical

Regulation No. of Referred

SANS

Automotive 22 126

Chemicals, Mechanical and

Materials 15 64

Electrotechnical 17 91

Food and Associated Industries 6 24

Legal Metrology 33 14

TOTAL 93 319 14

NRCS Activities

• Identification of market failures

• Develop compulsory specifications/technical regulations to prevent

market failures to harm the consumer

• Pre-market approval of NRCS regulated products:

– Before regulated commodities enter the market, approval granted based

on test reports or certificates of conformity;

– The NRCS Issues certificates (Letters of Authority, Homologation

or Type approval certificates, Health certificates)

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NRCS Activities Continued

• NRCS conducts Market Surveillance Inspections:

– inspectors visit manufactures, importers and retailers to inspect and if

needed sample products

– border inspections

– Inspections are meant to eradicate non-compliances

• Sampling and testing:

– Sampling is done to establish compliance

– To retain evidence in the form of a sample

– Or to establish compliance or non-compliance

• Sanctions:

– If non-compliance is proved, enforce recall and/or corrective action

and/or destruction and/or notify the media and public

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Regional participation

• NRCS attends various international and regional forums at

an organisational level and as a representative of South

Africa is some instances;

– SADC Technical infrastructure committees

– SADCMEL – SADC Metrology

– SADC TBTSC – SADC Technical Barriers to Trade Stakeholder

Committee

– SADC Harmonisation and standardization of Transportation

– NRCS also acts as Regional coordinators and secretariats for these

three SADC committees

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International participation

• OIML- International Organization for Legal Metrology

• WP 29 (Working Party 29) for automotive regulations

• CASCO – Conformity Assessment Sub Committee of International Standards Organisation

• COPOLCO – Consumer Policy Committee of the International Standards Organisation

• CODEX ALIMENTARIUS –International Food requirements

• IAFI- International Association for Fish Inspectors

• IEC TC61 – This technical committee deals with development , reviewing and amendment of

household appliances standards IEC 60335-1 and its 109 part two series, These standard

are being referred as mandatory by NRCS compulsory specification – VC8055.

• IECEE CB Scheme: is the world‟s first truly international system for acceptance of test

reports dealing with the safety of electrical and electronics products.

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Strategic Goals

Strategic Goal One: To utilise a risk based approach to maximise the potential

compliance with all specifications and technical regulations falling under the

mandate of the NRCS

Strategic Goal Two: To optimise the scope of NRCS regulatory activity to protect

people in South Africa and the environment

Strategic Goal Three: To inform and educate industry and consumers regarding

their rights and obligations with respect to specifications and technical regulations

Strategic Goal Four: To ensure that highly engaged, competent people are in the

right place at the right time‟ to enable effective execution of the NRCS strategy

Strategic Goal Five: To ensure that the NRCS is a capacitated organisation with

„fit for purpose‟ resources available to support decision making and action

Strategic Goal One: APP Deliverables

• NRCS will conduct inspections at the ports of entry, manufacturer‟s

premises, retailers, distributors and motor vehicle builders‟ premises.

• At the sea ports and inland border, containers for will be profiled and

characterized according to the risk criteria which will include but not

limited to country of origin, type of product, importer compliance

behavior, season, and whether it‟s a new or recent technical

regulation or an existing compulsory specification.

• The high risk products list will be compiled to constitute the

Prohibited and Restricted list of products which would be fed into the

SARS Risk Engine. Stoppages at the ports of entry will be done

electronically via the SARS system. The high risk product list will be

reviewed from time to time.

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Strategic Goal One: APP Deliverables

Expected Outcome Regulated Industry Performance Indicator Target

Increase Compliance

to Compulsory and

technical regulations

Automotive Number of inspections

conducted 4000 inspections

Chemicals, Materials and

Mechanical

Number of inspections

conducted 4000 inspections

Electro-Technical Number of inspections

conducted 4000 Inspections

Foods and Associated

Industries

% of inspections

conducted on all loccaly

produced, imported and

exported fishery products

100% of all declared locally

produced, imported, and

exported: canned fish,

canned meat, frozen fishery

products. 32389 inspections

Legal Metrology (fair trade

requirements in terms of weight

and measures

Number of inspections

conducted 4369 inspections

Automotive, Electro-technical,

Chemicals, Materials and

Mechanicals

Number of days to

process approvals

21 working days to issue or

to evaluate an application for

pre-market approval for

imported products and motor

vehicles

Legal Metrology Number of days to

process type approvals

105 working days to process

type evaluations on

measurement instruments 21

Strategic Goal One: APP Deliverables

• Ensure uniform understanding and implementation of the

National Building Regulations & Builiding Standards Act

103 of 1977 through.

– Provision of technical advice and interpretation of the NBR&BS

Act

– Perform building-defects investigations as an impartial party

– Administering of the Review Board

– Evaluation of qualifications of Building Control Officers

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Strategic Goal 2: APP Deliverables

• To optimise the scope of NRCS regulatory activity to protect

people in South Africa and the environment

– NRCS will evaluate environmental, product and service risk and

establish economic impact of the regulations and inform policy.

– NRCS will carry out pro-active research to identify areas where

regulations need to be developed, including international benchmarking

– Will review and develop appropriate Compulsory Specifications or

Technical Regulations in accordance with IPAP and stakeholder

requirements. New Compulsory Specifications for 2013/2014:

• New proposed VC for labelling of electric and electronic appliances for

energy-efficiency

• New proposed Trade Metrology technical regulation for gas meters

• New proposed VC for processed meat products

Strategic Goal 3: APP Deliverables

• To inform and educate industry and consumers regarding their rights and obligations with respect to specifications and technical regulations.

– NRCS understands that effective communication contributes significantly to voluntary compliance.

– Issue media alerts on non-compliant products

– And will set up platforms for stakeholder and consumer engagements

– Hold 9 road shows to support this deliverable

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Strategic Goal 4: APP Deliverables

• To ensure that highly engaged, competent people are in the right place at the right time’ to enable effective execution of the NRCS strategy:

– An HR capability will be developed and all 77 vacant positions will be filled

within acceptable time framework. Plans are already underway to fill these vacant positions

– New HR policies are approved – A desired Human Capital Readiness score has been achieved (positions filled /

competency developed)

– All employees will be aligned behind the NRCS strategy

– Employees are highly engaged to improve on labour relations

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Strategic Goal 5: APP Deliverables

• To ensure that the NRCS is a capacitated organisation with „fit for

purpose‟ resources available to support decision making and action

• Set up NRCS own IT infrastructure • Link up NRCS and SARS • Client Relationship Management system will go live and enable stakeholders

to apply for services over the internet. • Professional management of data, information and knowledge • NRCS to implement an IT enabled methodology to support the tracking,

consolidation / sharing of planning information as well as effective evaluation and review of progress

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Operational Budget: Revenue

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0

20000000

40000000

60000000

80000000

100000000

120000000

140000000

160000000

FORECAST2013 / 2013

BUDGET2013 / 2014

BUDGET2014 / 2015

BUDGET2015 / 2016

Revenue projection

Services / Assessments

Levies for compulsory specifications

Levies prior year

Rental income

Core funding

Revenue projected to grow at 6.5%over the MTEF period, with core funding

increasing by 26% in the 2014 FY.

Expenditure composition: FY 2014

18%

1%

10%

71%

BUDGET 2013 / 2014

Admin costs

Depreciation

Operating costs

Employee costs

Expenditure composition shows growing employee costs as a total percentage of

expenditure

Financial projections over the MTEF

Conservative projected growth in net surplus is supported by increased revenue and

managed increases in expenditure.

CAPEX BUDGET

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Category of asset 2013-14 2014-15 2015-16

Laboratory assets 2,971,958.00 3,165,135.00 3,370,868.00

Vehicle 3,400,000.00 3,621,000.00 3,856,365.00

ICT equipment 6,969,500.00 7,422,517.00 7,904,980.00

Office Furniture 1,315,160.00 1,400,645.00 1,491,687.00

Other equipment 201,000.00 214,065.00 227,979.00

Building 50,000,000.00

TOTAL 64,857,618.00 15,823,362.00 16,851,879.00

Budget for new premises and procurement of ICT hardware and software form the

majority of the CAPEX budget.

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NRCS

Katima Temba

Acting CEO

Email: Tembakj@nrcs.org.za

Tel: 012 428 7117

Website: www.nrcs.org.za

Questions….

Thank You