| Following written and oral representations made by the Board to myself, I have decided to remove the board (“the Board”) of the South African Bureau of Standards (“SABS”). I have made this decision because it has come to my attention and that of the Department of Trade and Industry (“the Department”) that SABS has failed effectively to exercise the fiduciary duties imposed upon them inter alia in terms of the Standards Act 8 of 2008 (“the Act”) and the Public Finance Management 1 of 1999 (“PFMA”).
The removal of the Board follows letters that I issued on 8 June 2018, to all Board members individually, calling for representations to be made to me in response to my notice to them of the fact that I was considering the Board’s removal. Three members of the Board have tendered their resignations, which I have duly accepted. The remaining members have provided me collective and individual responses.
The malperformance of the Board has become a matter of some concern. I have received numerous complaints regarding lack of service delivery by SABS. These have come from both big and small business, including complaints from black industrial players that government is working hard to expand. Local manufacturers are failing to secure supply contracts in local and international markets because of SABS’s under-performance.
At the same time, through the Eskom Parliamentary Inquiry process, allegations of complicity against SABS in the approval of Tegeta coal for Eskom have come to my attention. I have asked the Board to perform a forensic investigation.
The collective response, as received from the Board on 15 June 2018, is in my view unsatisfactory. It does not address my concerns, and it indicates that the Board has misapprehended its legislative mandate. I pointed out as much to the Board, and I provided the Board with a further opportunity to make written representations, which I considered. Further to this, and although there was no legal obligation upon me to do so, I met with the Board thereafter, on 25 June 2018.
I have considered the representations made to me during the course of the meeting of 25 June 2018, and found them unpersuasive. They have not changed my view in regard to the Board’s malperformance. In my view, no cogent countervailing arguments were advanced at the meeting that have swayed me from my initial concerns.
There are four entities reporting to the Department that are responsible for quality and standardization matters. It is my responsibility to ensure that these entities prevent sub-standard and unsafe products from entering the local market, while at the same time enabling South African exporters to lock into foreign markets. Unfortunately, the performance of SABS in this regard has been inadequate.
SABS has failed to perform in line with its mandate. The reasons that informed the decision are as a result of a failure to address all of my and industry’s concerns as communicated adequately and in essence a failure to effectively exercise the fiduciary duties imposed upon SABS inter alia in terms of the Standards Act and the PFMA.
I have lost confidence in the Board’s ability to manage the entity effectively.
In light of the above, I have dissolved the Board of SABS with immediate effect. In its stead, I have decided to place it under the control of administrators appointed in terms of section 15 of the Public Service Act of 1994 (“the PSA”), read with section 49 of the PFMA.
Dr. Rob Davies Minister of Trade and Industry
Enquiries:
Sidwell Medupe-Departmental Spokesperson
Tel: (012) 394 1650
Mobile: 079 492 1774
E-mail: MSMedupe@thedti.gov.za
Issued by: The Department of Trade and Industry
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