Fishy story raises insurance flak

A row has erupted between an importer’s insurance underwriters and a littleknown government organisation called the National Regulator for Compulsory Specifications (NRCS) over an import container of canned tuna that was stopped after an inspection by the regulator. It appeared, according to information from the underwriters’ national body, the Association of Marine Underwriters of SA (Amusa), that the NRCS in recent times has been doing spot inspections on certain import and export containers to ascertain whether the products comply with compulsory specifications on behalf of the minister of trade and industry. But in one case the actions of the NRCS have come in for considerable flak from insurance underwriters, One Financial Services (OFS), who expressed their dissatisfaction to FTW. “The regulator,” said Darren Jestha of OFS, “stopped this import container of canned tuna for inspection. And, because a few cans were slightly damaged, refused to alow it to be released.” But, he added, this final decision was only reached after the body had first of all accepted that the damage was only cosmetic, and didn’t exceed the acceptable limits. But then they changed both their specifications and their minds, and finally said that the damage was sufficiently over the limit for them to refuse clearance. “They changed the specification of what was acceptable damage to something more extreme in a move that was just too dramatic, and said that it was now not suitable for public consumption.” However, the NRCS gave the importer an alternative. “If they sort out the consignment, and remove all the cans which don’t comply, then the regulator will release the container if it then complies with their specifications,” said Jestha. But, he complained, all this to’ing and fro’ing had taken months, and was costing the importer time and money. This complaint was forwarded to Amusa, who are now investigating this and any other similar issues, according to chairman Hilton Adams, a marine underwriter with Munich Reinsurance. In a memo circulated to all members, Amusa draws attention to the rejection by the NRCS of some consignments of tinned goods even though only minimal damage was noticed during inspection. It also points to an allegation that other cargoes (one being electrical items) may have been pilfered during inspection. “Amusa would like to identify whether any members have experienced similar problems with the NRCS,” the memo reads, and members have been invited to report any such incidents to Amusa as soon as reasonably possible. After the members’ responses have been collated and examined, Adams told FTW, it will be up to the association to approach the NRCS to see if matters can be resolved. “I don’t know much about their activities,” he said, “but such an action is significant for the underwriting industry.” And, if an Amusa/NRCS meeting can’t come up with a suitable solution to this case and any others that might have been experienced by Amusa members, then Adams suggested it would have to be taken up at a higher level. “The final alternative,” he said, “would be to request the industry’s governing body, the SA Insurance Association (SAIA), to write to the minister of trade and industry, Dr Rob Davies, and ask him to intervene.” Meanwhile, FTW put the case of the troubled tuna before Nico Vermeulen – known to many of you as the longtime director of the National Association of Automobile Manufacturers of SA (Naamsa). But Vermeulen was also acting chairperson of the NRCS until Jess Molobelo took over as full-time chairperson from July 1. And Vermeulen suggested that there appeared to be more to this case than FTW had been told. The NRCS, he added, works from SA Bureau of Standards’ (SABS) compulsory specifications for a whole list of products. “If a product doesn’t comply with a compulsory specification, that consignment can be detained and impounded. There are then two alternatives. It can be returned to the country of origin, or destroyed under supervision.” But, Vermeulen asserted, the NRCS cannot act stop consignments at their own behest. “They must follow due process,” he added. And he also felt convinced that there had to be more to the tuna fish case than met the eye. We have to remember, he told FTW, that a lot of noncompliant products flood into SA – and that many of these can be extremely dangerous. He suggested that it would be unlikely for the NRCS to detain a container purely because of a few damaged cans. “The actual product would have to be tested – both from the damaged and undamaged cans. And, if it didn’t comply, then that shipment would be stopped.” But Jestha was adamant that no other tests had been conducted. “They (the NRCS) only reported on the damaged cans - nothing else," he said.