Democratic Alliance (DA) trade, industry and competition spokesperson Toby Chance has called on the Department of Trade, Industry and Competition (dtic) to urgently investigate “serious transgressions” at the South African Bureau of Standards (SABS).

In letters addressed to dtic acting director-general Malebo Mabitje-Thompson and Trade, Industry and Competition Minister Parks Tau, respectively, he flags alleged corrupt activity involving senior management members at the SABS, as well as a lack of governance affecting the entity’s board.

Chance says the board does not have a chairperson or the minimum of seven members required to legally function.

He further alleges that the SABS board has intentionally not appointed a permanent CEO in the last 18 months and, instead, rotates current executives to “avoid accountability for corruption”. 

Chance cites an anonymous source at the SABS as saying that some executives at the SABS are more concerned with finding whistleblowers, victimising suspects and covering up acts of wrongdoing.

The source also told the DA that grievances lodged by employees are being ignored owing to incapable management members and/or vested interests in ignoring grievances to protect certain staff members.

The SABS is also reportedly faced with a quick staff turnaround, potentially impacting on organisational stability.

In response to questions posed by Engineering News, the SABS has assured stakeholders that it takes leadership stability seriously and that its board was not fully constituted for only a few days.

It points out that the organisation was taken out of administration in December 2022, with the Trade, Industry and Competition Ministry having appointed eight nonexecutive directors to form the SABS board.

The acting CEO became the ninth member – in line with the Standards Act.

The Standards Act requires the Minister to appoint into the board of the SABS a minimum of seven and not exceeding nine directors.

Three members have since resigned, with the last resignation having been in July. Until then, which left the board with six members, the board was still fully constituted.

The SABS says Tau in August appointed one new director, taking the number of members to seven and ensuring that the board is properly constituted.

Further, the SABS says it has conducted a recruitment process to identify a permanent CEO and has submitted its recommendation to Tau for concurrence. 

The entity tells Engineering News that its appointment processes, including for executives and staff, follow a rigorous process, with vacancies advertised publicly on the SABS website, job boards, social media platforms such as LinkedIn, and in certain cases in print media.

The selection process is conducted by a panel of managers, which include board members for executive positions. The SABS assures that background, probity and integrity checks are conducted on the shortlisted candidates irrespective of position levels, using an independent verification company.

These checks include qualifications verifications, criminal record, credit record and identity. Having considered the performance of the candidate at interviews, competency assessments and positive background checks, the panel writes a report with a recommended suitable candidate for approval by relevant executives.

Commenting on the organisation’s process in respect of misdemeanours, the SABS says it has several policies and procedures that relate to fraud prevention and anti-corruption, as well as a whistleblower policy.

“Employees who are accused of misconduct are taken through a disciplinary process in line with the SABS Disciplinary Code and Procedure. Depending on the nature of the allegations, there have been cases where employees are placed on precautionary suspension pending the finalisation of investigations or the conclusion of the disciplinary hearing,” the SABS says.

The entity says it also has a clear process outlined in its Procurement Policy related to bid specifications, evaluation and adjudication, including oversight by committees to play their independent roles for fair, competitive and transparent awarding of contracts.

Chance refers to the SABS having lost accreditation for its cement labs, but clarifies that it did not lose accreditation for the cement scope but was partially suspended by the South African National Accreditation Systems (Sanas), meaning that SABS cannot issue material permits with the Sanas logo until the suspension has been lifted.

The partial suspension is valid for a period of three months and is subject to successful completion of an assessment by Sanas. An action plan to lift the suspension was submitted to Sanas and implementation is being monitored on a regular basis, the SABS says.  

OVERHAUL UNDER WAY
Meanwhile, the Portfolio Committee on Trade, Industry and Competition issued a statement on September 11 welcoming the first steps taken by Tau to “stabilise governance within the department and its entities, including filling critical vacancies".

The committee reportedly engaged with several of the dtic’s entities and found a number of corporate governance abnormalities, including prolonged vacancies within boards and at top senior management level.

The committee noted that the Minister intends to place advertisements to fill these vacancies within days. The entities mentioned are the Competition Commission, the Export Credit Insurance Corporation, the Industrial Development Corporation, the National Empowerment Fund, the National Gambling Board, the National Lotteries Commission, the National Regulator for Compulsory Specifications, Sanas, SABS, the South African Council for Space Affairs, and the Special Economic Zones Advisory Board.

Committee chairperson Mzwandile Masina said that while the committee welcomes this process, it is concerned at instances where appointment processes had been started and recommendations made to the previous Minister but were not concluded timeously. The committee therefore cautions the ministry to ensure that due processes are followed to avoid litigation.

The committee called on the boards of the listed entities to exercise their fiduciary duties and expedite the filling of vacancies at top management level, working together with the Ministry.