NRCS crisis leaves importers in the lurch

The National Regulator for

Compulsory Specifications

(NRCS) has been plunged

into chaos following the

resignation of CEO Asogan

Moodley just over a week ago.

Moodley is believed to have

handed in his notice only

a day after making several

commitments to industry

in Parliament in Cape Town

to speed up the issuance of

Letters of Authority (LOA).

Moodley had told

Parliament that a riskbased

system, based on a

new IT platform, as well as

a pre-import verification

programme of conformity

of goods to South African

standards would be used to

increase the speed at which

the NRCS issued LOAs.

The NRCS, the body

that approves the technical

specifications of products

imported and sold in the

country, has been widely

criticised over the time

it takes to issue LOAs.

In October last year

Parliament’s portfolio

committee on trade and

industry agreed with

industry and instructed the

organisation to speed up the

issuing of LOAs from the

more than the 120 working

days it was taking at the time

to no more than 120 calendar

days. Industry sources say

it is debatable whether any

notable difference was really

experienced on the ground.

“LOA issuance delay is

technically a non-tariff

barrier to trade, and is

costing the country billions

in demurrage costs and loss

of revenue,” a source told

FTW.

It is believed that

Moodley resigned due to

the frustration he was

experiencing at the NRCS

over the speeding up of

LOAs. This claim has been

denied by the Department of

Trade and Industry (dti).

“He has been under

pressure for the past 18

months from industry and

various trade and technical

associations to deliver LOAs

faster,” said the source.

It is alleged Moodley

issued a directive last week

calling upon NRCS staff

to get all hands on deck to

assist with LOA backlog

issuance, but staff and union

leaders refused to cooperate.

They in turn are said to have

turned to the dti which asked

Moodley to withdraw his

directive, which he refused

to do.

“Moodley explained

internally that the dti was

supporting the union and

wasn’t supporting NRCS, as

a result of which he had no

choice but to resign, as he

couldn’t do his job,” said the

source.

“This could very easily

become a national crisis as

there are literally thousands

of LOAs representing billions

of rands' worth of goods,

now waiting for approval,

which may never be issued.

This is a catastrophic

governance failure and spells

serious chaos and an almost

inevitable Moody rating

downgrade.”

One expert told FTW the

entire catastrophe could

have been avoided if the

dti had taken immediate

remedial action and

appointed a strong technical

leader to head up the NRCS

instead of making political

appointments several years

ago.

“The head of the NRCS

is at the pinnacle of South

Africa’s fair trade and

consumer protection and

it is essential that it is

someone with the necessary

technical background,” he

said. “This entire chaotic

situation could spell the end

of South Africa’s fair trade.”

Another source told FTW

that the entire approach by

the NRCS was ludicrous.

“Not only is it more often

than not a duplication of

customs processes and

procedures, but the goods

they are stopping have often

been verified to standards

internationally superior

to those being required

by South Africa. Not to

mention that the NRCS

uses methods to stop and

check containers completely

different from that of

any other government

department. It does not

make sense. And it all costs

money.”

In a statement, the dti

denied that it had asked

Moodley to withdraw any

directives and said Minister

Rob Davies simply expected

management and labour to

implement the targets with

respect to LOAs.

Davies said he had

also accepted Moodley's

resignation and that dti

director-general Lionel

October was engaging with

NRCS management and

labour to resolve any issues.