Ongoing delays in obtaining letters of authority (LOAs) from the National Regulator for Compulsory Specifications (NRCS) are one of the main constraints to potential foreign direct investment (FDI) and trade between South Africa and the European Union (EU).
“We believe that the NRCS has not been working effectively in this regard since the new regulations were adopted in 2015, in particular with regard to verification of energy efficiency and safety standards for electrotechnical equipment,” said the head of the European Union delegation to South Africa, Dr Marcus Cornaro.
Letters of authority are required by importers before their goods can be cleared by customs. Cornaro pointed out that while the EU recognised the need to ensure that products in the local market complied with mandatory standards, certification procedures for these standards should be proportional to the risk at stake and efficient enough not to inhibit existing business operations and new investment.
“The compulsory certifications, which can only be issued by NRCS, are burdensome and costly with limited capacity among local testing and certification agencies,” he said. The average time to issue an LOA peaked at an average of between 240 and 500 days in 2015/2016 for electro-technical goods.
According to Cornaro, these delays have had a negative effect on importers as well as on the local manufacturing industry that uses imported electrotechnical products in their production lines or investment projects. Despite promises by the Department of Trade and Industry (dti) to reduce the waiting time for LOAs to the “golden standard” of 120 days, and other measures such as the appointment of a CEO, the backlog continues. Comaro said that the situation remained “untenable” not only for foreign manufacturers but also for the local industry and regional trade.
Acting CEO of the NRCS, Edward Mamadise , acknowledged that there was “still a large backlog” but said the regulatory authority was “making headway” in addressing the delays that had caused frustration in the industry. “There has been a marked improvement in turnaround times compared with the previous financial period,” he said, adding that the NCRS had also started implementing a risk-based approach to the approval of applications for LOAs.
This involves prescreening of applications so that renewal applications are separated and expedited. Low-risk applications are placed in a separate queue with shorter turnaround times. Mamadise said a modernisation project at the NCRS – including the digitisation of processes – was also under way.
The compulsory certifications, which can only be issued by NRCS, are burdensome and costly. – Marcus Cornaro
