SABS Board crisis leads to a financial loss of R50 million

15 May 2018

A reply to a DA parliamentary question has revealed that confidence in the services offered by the South Africa Bureau of Standards (SABS) is at an all-time low and has seen the entity lose 270 customers in 2015/16, 381 customers in 2016/17 financial years and 401 customers since April 2017. This client exodus has led to a loss in revenue of R49,8 million for the entity.

The struggle to fulfil its core mandate has become so dire that SABS was forced to refund it's clients just over R1 million.

I will write to Minister Rob Davies again to express the DA’s disappointment at his failure to actively stop the rot at SABS and to ask that he exercises his authority in terms of the SABS Act to dissolve the SABS Board and place it under administration for its failure to reign in institutional decay that has seen SABS fail to fulfill its statutory obligations.

In March 2018, I asked Minister Davies to provide specific timelines as to when he expects the turnaround strategy at SABS to be finalised. The Minister has failed to do so, instead his unhelpful expectation that the current SABS Board will somehow fix the mess at the entity is a fool’s errand because the Board has shown repeatedly that it is incapable of doing so.

The drop in quality and standards offered by the SABS not only poses risks to consumers on product quality but creates barriers for businesses attempting to gain local and international market access with an absence of world-class verification.

It is clear that the urgent R1,6 billion that SABS needs to upgrade its laboratories and test capabilities will be wasted as long as the current Board, which presided over the organisation’s terminal decline, remains in place. The SABS cannot expect to offer a quality standards service while its customers leave in droves due to outdated and inadequate equipment, poor leadership and weak financial controls.

Any attempt to turnaround the fortunes of SABS must start with the removal of the current Board and placement of the entity under administration as it has proven that it is unable to restore institutional integrity and good corporate governance at the institution.

Issued by Dean Macpherson, DA Shadow Minister of Trade and Industry, 15 May 2018