1 AGRÉMENT SOUTH AFRICA BILL [B ] Inez Stephney Research: Portfolio Committee on Public Works 06 March 2015

2 Presentation Outline Agrément South Africa One of 4 Entities Reporting to the Minister of Public Works Establishment Current Mandate Challenges Agrément South Africa Bill [B ]

3 Agrément South Africa – 1 of 4 Entities Reporting to the Minister of Public Works Agrément South Africa Certifies innovative and alternative construction materials, asphalt roads; thermal controlled buildings; Jojo water tanks etc. Council for the Built Environment Transformation of the Built Environment Professions – Access of female and historically disadvantaged individuals to Engineering; Quantity Surveying etc. Construction Industry Development Board Regulates construction industry – Register Construction Companies from Grades 1-9 Ensuring contractors between Grades 1 to 3 receive tenders Provide opportunities for advancement of women & Historically Disadvantaged Individuals in the property & construction sectors Independent Development Trust Alternative Construction Methods (ACM) used building schools faster and cheaper – address backlog of mud schools and unsafe structures Strategic Infrastructure Projects (SIP) 13 National School Building Programme – prioritise education

4 Agrément South Africa (continued) Established 46 years ago by the Minister of Public Works in 1969 and functions under a ministerial delegation of authority reporting to the Ministry of Public Works. Not in line with the Constitution or the Public Finance Management Act (No. 1 of 1999) (PFMA) Current Mandate: “an independent technical assessment organisation bringing impartial judgement to the evaluation of innovative construction products and systems, which are technically sound and capable of giving satisfactory performance”. Some Products Assessed and Certified: Jojo Water Tanks Building systems Software for designing compliant aluminium windows and doors Road surfacing products

5 Challenges Identified by Agrément SA A number of local authorities reported a lack of appropriately skilled technical staff, especially engineers as a key challenge to infrastructure rollout. There is a lack of knowledge on the procurement and processes in the construction industry when one standard or Alternative Building Technology (ABT) are being used, especially but not limited to: Conditions of certification are not being adhered to. Inadequate design input and site supervision. Unacceptable quality standard aspects; and innovative non-standard aspects of the project. Examples of the lack of knowledge in the procurement processes when using ABT in the construction industry include: foundations, doors, windows, roofing and ceilings that need to be designed or specified by the client’s professional team. Variations from the certificate must be approved by Agrément SA in writing and certificate holders are obliged to inform clients of any variations from the certificate.

6 Agrément South Africa Bill [B ] Tagging Bill – Section 75 Department of Public Works and the Office of the Chief State Law Advisor report that there are: No Implications for Provinces. No need to refer the Bill to the National House of Traditional Leaders. p. 15 Chief State Law Advisor suggested that the Bill is tagged as Section 75 outlined in the Constitution = Ordinary Bills not affecting Provinces. Still passes through the National Council of Provinces, but does not require agreement from the 9 Provinces.

7 Agrément SA - Juristic Person Establish Agrément SA as a juristic person in line with the requirements of the Constitution and the PFMA. Consists of the definitions and aim; preamble and 30 Sections – select number will be highlighted. p. 2 Preamble/Long Title: Provide for the establishment of Agrément South Africa as a juristic person. Determine its objects, powers and duties. Prescribe the manner in which it is managed and governed. Provide for transitional arrangements. Provide for matters connected thereto.

8 Agrément South Africa Bill [B ] Issues for Consideration (1) Certification p. 4 Section 6(5) It is an offence for a person to falsely represent that a construction related product or system is certified by Agrément SA, if an Agrément Certificate has not been issued for such product or system or if such certification has been suspended or withdrawn…” How will Agrément SA identify fraudulent representation of its Certificates? What manner of investigations will be required to establish the false representation of the construction related product or system? Who will carry out such an investigation? Will there be any cost implications, additional personnel required?

9 Issues for Consideration (2) Keeping a Register p. 5 Section 8(1) “Agrément SA must establish and maintain a Register of applications rejected and certificates issued, amended, suspended, reinstated, withdrawn and renewed.” 20 certificates granted for the 2013/14 financial year that include: building systems, software for designing compliant aluminium windows and doors, and road surfacing products. Agrément SA currently makes available a list on its website of all the inactive certificates which include: ceilings; insulation; plumbing; roofing products; thin bituminous road surfacing systems; walling and building systems etc.. Is there an existing Register of all applications certified, rejected etc.?

10 Issues for Consideration (3) Chief Executive Officer (CEO) & Staff p. 9 Section 20 (1)…”the Board must appoint a suitably qualified, experienced and competent person as CEO.” CEO “holds office for a period not exceeding five years and may be reappointed upon the expiry of his/her term of office.” Board and Chairperson responsible for financial accountability, risk management and compliance, good governance, professional and ethical conduct both within the entity and all its interactions with all their stakeholders. Some of the Stakeholders include: International Council for Building, Research Studies and Documentation (CID). National, provincial, and local government departments (for example the Department of Human Settlements). South African Bureau of Standards (SABS). South African National Roads Agency Limited (SANRAL). National Home Builders’ Registration Council (NHBRC).

11 Issues for Consideration (4) Agrément SA Staff p. 10 Section 21(1) …”CEO must, after consulting the Board, appoint staff to enable Agrément SA to effectively execute its functions”. Agrément SA identified the following risks and solutions: Loss of key staff. Inability to recruit professionals due to current market demands and non-competitive remuneration. Insufficient transformation at technical assessment leadership level in Agency. 2013/14 reported it was developing own in-house full-time technical staff members. Reducing reliance on part-time staff members that acted as consultants to undertake the complex technical assessment work.

12 Issues for Consideration (5) Funding and Investments Agrément SA Receives an allocation from the Department of Public Works. Transferred from Goods and Services – Classified as Irregular Expenditure by the Auditor-General. p.15 Financial Implications – “will receive money appropriated by Parliament and generate funds… via fees, donations, grants, contributions and interest on investments.” Agrément SA in 2014/15 requested that its allocation be increased to effectively fulfil its mandate. Clarify the required increase? What effect has the current lack of sufficient funding had on its ability to fulfil its mandate?

13 Issues for Consideration (6) Financial Year and Accounting p. 11 Section 24 – financial year is from 1 April in any year to 31 March of the following year, but 1 st financial year is from date of the commencement of the Act to 31 March of the following year. Financial Management and Reporting Will Agrément SA’s finances still be ring-fenced and managed under the Council for Scientific and Industrial Research (CSIR)? What are the cost implications if Agrément SA no longer uses the shared services model?

14 Conclusion Previous Portfolio Committee Suggested that Agrément SA: Increase its visibility to ensure greater use of its certified products. Agrément SA certifies innovative and alternative construction materials, it does not market these products. Broaden mandate to include an enforcement aspect, eg. Rural Areas where people are sold inferior construction products such as roofing sheets. Issues for Consideration What are the cost implications for broadening its mandate? How will the enforcement be implemented? Will Agrément SA require satellite branches in all the provinces, if so how soon and what are the projected costs?