Agrément South Africa Strategic and Annual Plans 2015, in presence of Deputy Minister

Meeting report

Chairperson's opening remarks
The Chairperson welcomed the delegation and jokingly suggested, in light of a recent announcement that the DA party leader would be stepping down, that the DA Member from this Committee would be supported by this Committee as replacement.

He noted that the presentation due to happen on this morning, from another entity, had been cancelled because of the suspension of its Chief Executive Officer two days ago, by the Board. He had thought it prudent to allow that entity to resolve its internal difficulties before coming to the meeting.

Agrément South Africa Strategic and Annual Performance Plans 2015

Mr Denzel Fredericks, Board member, Agrément South Africa, apologised for the absence of Mr Pepi Silinga, Chairperson of the Board, but introduced other Members present, and specially commended the Chief Executive Officer, Mr Joe Odhiambo, responsible for the day to day management of Agrément, calling him a" pillar of strength" to both the construction industry and the entity. .

He noted that the vision of Agrément was to be a world class technical assessment agency. He believed it was on the right track to become one of the top world class assessment agencies, taking cognisance of its deliverables to date. Agrément had existed for 46 years, promoting fitness for purpose of non standardised products, construction systems, components and materials for which no other South African national standard or codes of practice existed currently. Agrément would conduct technical assessments and certifications of non-standardised and/or innovative building and construction products.
The Agrément mandate was to report to the Minister of Public Works, and it must support and promote the process of integrated socio-economic development in South Africa as it related to the building and construction industry, by facilitating the introduction, application and use of satisfactory innovation and technological developments. Agrément had a continued role to play in ensuring that, through its technical assessments and quality assurance assessments, that hazardous materials such as asbestos-containing materials never were included in innovative products or building materials…

Mr S Masango (DA) interrupted to ask where he was reading from

The Chairperson noted that whilst the Committee appreciated the function of the Chairperson of the Board in giving an introduction, as the Board had a fiduciary responsibility; it was not his responsibility to deliver the Strategic Plan presentation. He thought that Mr Fredericks was not the best person to speak to the day to day issues of Agrément, and he suggested that he hand over to the CEO to deliver the remainder of the presentation.

Mr Joe Odhiambo, Chief Executive Officer, Agrément, took over from Mr Fredericks. He noted that there were poor levels of legislation within the building industry. Agrément derived its authority from the Constitution and the Building Standards Act 103 of 1977, which regulates the construction industry. The building industry must be regulated to ensure that hazardous products which can harm individual and collective health never "make it" into the industry. The relevant legislation included the National Regulations for Compulsory Specifications, which were functional requirements in terms of the Building Standards Act. There were also voluntary standards, the South African National Standards, which were the 10400 standards which stipulated performance requirements in terms of the Act. Building in accordance with these national standards would comply with the Act. He explained that where there were pre-existing national standards, companies should comply with these. If there were not, it would have to obtain certification from Agrément as to the standard of the materials being used. He indicated that construction firms thus had three options:  to satisfy the national standards, to have products assessed by a competent person or to obtain an Agrément certificate. Those who could approve products included the local building authority. An Agrément Bill had been proposed, that was in line with the Constitution and the way the building industry worked.

Research was done by research organisations on issues of technology development. It would assist Agrément with the development of performance criteria and testing methods. When a product was tested there must be minimum requirements which industry accepted as the benchmark performance level. Agrément certified the testing, once the product had been researched and the technology and test methods developed, and would then apply the test methods to those products to see if they were fit for purpose. SABS did the standardisation and development of standards in accordance with the Act, provided the approved products with the SABS mark, and listed products which meet the requirements. There was no duplication of roles, only collaborative synergies.

He thanked the Committee for its site visit at the end of last year which allowed Members to see for themselves these new, approved and innovative products.

The Agrément Board's Strategic Plan and goals for the next five years provided active support to the Minister’s strategic programmes and initiatives, aimed generally at turning around the National Department of Public Works (DPW) and specifically at increasing South African innovation and emerging creativity development. Agrément believed the innovative products it had seen had the potential to make the best of South Africa’s minerals and other raw products. South Africa was fortunate to have access to a lot of minerals, but there was not, currently, enough benefit from these materials, with most being exported without any processing. Innovation within the Built Environment provided an opportunity to find a use for all these minerals, which it was hoped could be achieved, through further research.

The Board aimed to consolidate Agrément South Africa into a viable and cutting edge organisation with sound corporate governance, risk management profile and world-class processes and systems with a strong technological intellectual base. Agrément was based at the Council for Scientific and Industrial Research (CSIR) where research and development was on-going. Research indicates that infrastructure spending had a high multiplier effect, producing higher growth and thus job creation and therefore creative thinking could allow for development and growth.

The Board sought to drive the growth and progress of Agrément South Africa as a leading state-owned, internationally acknowledged centre for the assessment and certification of non-standardised construction products. This talked directly to the vision and mandate. The Board also aimed to build a centre that enhanced South Africa’s position, leadership and strong global presence through innovation, research and development. Agrément had a strong global presence in the innovative field, as evidenced by the fact that it played a leading role in the World Federation of Technical Assessments. It collaborated with a number of sister organisations. The President of the German equivalent of Agrément visited last year and would visit again next month. It had close links with the e British board of Agrément and several other entities like the ICC of the USA. Agrément could play a big role in the global world of innovation, and he pointed out that with the world becoming a global village, innovations in Europe quickly made its way down to South Africa. Within the network of global assessment organisations, Agrément could share and get information on the products before It entered the country.

The Board aimed to promote a human capital strategy that enabled Agrément South Africa to address its current and future human resource challenges, including the shortage of critical skills in the construction industry. The issue of shortage of critical skills was a global problem. He welcomed the presence of the Deputy Minister, Mr Jeremy Cronin, and hoped the Bill would soon be brought to Parliament as it had the potential to support Presidential Infrastructure Coordinating Committee (PICC) strategic infrastructural programmes, with its six core functions of economic development, economic opportunity, mineral extraction and beneficiation, meeting socio-economic needs, promoting job creation and integrated human settlements development. Agrément believed the Bill would contribute to meeting national outcomes.

He added that the work of Agrément supports national outcomes, such as the production of a long and healthy life for all South Africans, and promotion of a healthy living environment, through, for instance, technical certification of technologies of innovative insulation products which keep indoor temperatures bearable despite the extremes outside. Agrément worked towards a responsive, accountable and efficient local government system, by participating in the activities of local government; specifically undertaking presentations to local authority building inspectors, and to the annual Building Inspector Convention, and by providing general assistance when needed. In addition, it had membership on the Advisory Council of the National Regulator for Compulsory Specification and gave proactive support to building inspectors at local authorities within its areas of jurisdiction.

Agrément provided information based on scientific tests, on the performance of innovative products, thus allowing for informed decisions. For example, last month Agrément held a conference for all African states on road products. It was horrified to discover that certain African countries had used totally unsuitable materials from the UK, which were completely unsuited to African ambient temperatures. Agrément prevented this from happening in South Africa, by performing the laboratory tests to ensure the products performed adequately and were suitable for use. This was its key purpose.

Agrément provided for a skilled and capable workforce to support an inclusive growth path through Human Capital Development (HCD), by encouraging staff to improve its academic qualifications and assigning challenging but relevant tasks. Direct HCD interventions in 2015/16 included having two vacation students placed, one undergraduate bursary support and two interns placed at Agrément South Africa. At any one time, Agrément had 25% of its total human capital complement undergoing training or some form of development.

It provided for an efficient competitive and responsive economic infrastructure network by the CSIR participating in the Association of Southern African National Roads Agencies, an association of road agencies within the 14 SADC countries, whom Agrément would assist by performing some of the same services within RSA and the other nations. This was important regional support, aimed at revising national guidelines for road material and the structural design of roads using current materials. New design methods for example spoke to thin flexible pavements, as opposed to the thicker ones of the past which would crack under stress. Binders that worked in Europe did not necessarily work in Africa, and Agrément existed to serve African needs. ‘

Agrément would also provide for decent employment through inclusive economic growth. It was undertaking technical certification of several new, labour-intensive construction methods. It was, for instance, developing criteria for using thin concrete technology in road construction, similar to the technology developed and implemented in some communities in Gauteng and the Eastern Cape. Although Agrément did not itself create jobs, the products it certified would lead to job-creation, and had great labour intensive potential, as in Gauteng and the Eastern Cape, which was using concrete roads using manual labour, with materials just as good as asphalt roads. Agrément's facilitation of technology development improved the competitiveness of the construction industry, and assisted in creating opportunities for developing new industries and job creation. An example was its involvement in developing new industries that added value to the use of indigenous natural fibres in the construction industry, to stimulate job creation in rural areas. Agrément believed that with enough research it could create products to allow South Africa to build its own infrastructure without the need to import any materials.

Agrément further contributed to achieving national outcomes through the protection and enhancement of environmental assets and natural resources, by including environmental assessment as part of contributing towards environmental sustainability. Thermal energy efficient products and software would enable mechanical engineers and architects to design buildings where energy usage would be lower. It believed it could reduce the energy intake of the country via research and technological innovation. It was developing a database of the environmental impact of construction materials in collaboration with the Department of Public Works. It believed the use of environmentally friendly materials would contribute to environmental sustainability - for example a cold mix asphalt cut out the need to heat asphalt before use, and thus reduced the need for heavy machinery. Another example of an environmentally friendly product was a hyper-compressed earth block.

Agrément sought to improve the quality of basic education through assessing innovative technologies that could be used to construct modern schools in rural areas. On one site in the Eastern Cape, close to Mthatha, a school was on a hill that no vehicle could reach, and the materials were offloaded at a lower level and lifted up by human beings. This would not have been possible with conventional materials that were much heavier than innovative ones. The Independent Development Trust (IDT) had used innovative technologies in constructing schools, especially in rural areas.

Agrément sought to provide for sustainable human settlements and an improved quality of household life by participating in the activities of the Department of Human Settlements, including research and development such as awarding an Agrément South Africa certificate of fitness for purpose for a new design for a low-income house. Compared to the standard RDP house, the new house had better indoor air quality, utilised ‘zero wastages’ and modular construction approaches and had an innovative thin concrete foundation that saved one tonne of concrete per house, and significantly reduced construction time. There were several current construction projects, for example of houses, by the Department of Human Settlements which used Agrément certified materials. It allowed for vibrant, equitable and sustainable rural communities and food security for all, through technically assessing technologies to improve the performance of dwellings and therefore the living environment in rural areas. It improved on traditional building methods and new materials were easier and cheaper to transport than conventional materials and were therefore suitable for remote rural areas. Agrément materials could thus be used to build in areas where access was a problem, and its products allowed for women, the youth and people with disabilities to participate on sites where these materials were being used. The lighter transportation needs also translated into less damage to the roads.

Agrément's stakeholders were building professionals, who were interested in the benefits associated with innovative construction technologies. Certificate holders were also stakeholders in Agrément, for its interests lay in the facilitation of approvals and marketing. Agrément certification was deemed to satisfy the requirements of the building regulations. The Department of Human Settlements was another of its stake holders; It was interested in the provision of subsidy housing, and that department decided on where houses would be located, and which construction technology or methodology to employ. There was a need for professionals to become competent in innovative technologies.  The Department of Public Works was another of its stakeholders, as It was tasked with encouraging the use of innovative products and systems to the benefit of South Africa, It partly achieved this by funding the day to day costs of maintaining Agrément South Africa. Home-owners were another stakeholder in Agrément South Africa; they were interested in the financial benefits associated with innovative construction technologies. Other stakeholders included local authorities who were interested in promoting uniformity in the understanding and implementation of national building regulations. The National Home Builders Registration Council was a close working relationship for Agrément sat on the NHBRC Review Board. It was particularly interested in management of risk associated with its structural and water penetration warranty scheme. The National Regulator for Compulsory Specifications, on whose review board Agrément also sat, was interested in ensuring the health and safety of citizens, the environment and ensuring fair trade. The South African National Road Agency Limited was interested in the benefits associated with innovative construction technologies. The South African Bureau of Standards (SABS), represented on Agrément's Board, sought to promote South African national standards to facilitate international trade and enhance South Africa’s economic performance and transformation. Agrément also sit on its standards generation committee and was involved whenever SABS generated new standards for innovative technologies. It also contributed to SABS standards committee, and provided solutions for legislative requirements in terms of developing new SANS Standards documents. Agrément may be small but it certainly had a presence in many places. It worked with everyone, big and small, and collaborated with all these bodies. Agrément provided technical advice and interpretation of agreement certificates for the built environment professionals and other interested parties such as local authorities, home builders and to the public in general.

Mr Odhiambo then took the Committee through some of the specific strategic objectives. The first was to ensure the effective corporate governance processes and sound resource management, and increase technical assessment outputs to 100% in respect to revenue collection and receipt of debts. This was a National Treasury requirement for good corporate governance, the Board ensured that Agrément complied with this and the King III recommendations. Agrément made all payments within 45 days. There was a benefit of being associated with CSIR, which had a good financial management system, which ensured the expenditure to income ratio was sound. Agrément would not spend money that it did not have. Strategic management was provided through strategic planning, annual facilitation of risk management processes within the MTEF, and revising and updating the business plan over a five year period, based on an annual baseline. The Strategic and Annual Performance Plans (APP) were approved by the Minister of Public Works and tabled in Parliament as required. Risk management strategies were developed and risks were mitigated and managed on an annual basis. All revenue was collected by way of requiring payment before performing any work. This ensured that all revenue was collected. For client visits, an invoice was issued and they normally paid within 90 days. The approval and procurement process for its investment policy and strategy was very strict and it was ensured that the investment bank benchmark was approved.

In respect of the strategic objective to attend to the certification of products and systems as being fit for purpose, Mr Odhiambo noted that the percentage of certificates processed was calculated with the aim to achieve 90% of applications processed. In respect of some products, Agrément would not have the criteria prepared already, so those must be developed before the products could be accepted for assessment. It also sought to ensure that 90% of all evaluation offers were processed and accepted or rejected within seven days from the date of receipt, excluding incomplete submissions. In this regard It also intended to see that 90% of Agrément offers were issued within 15 working days of receiving such applications, as quick turnaround time improved performance. This target was difficult because when an application was received it could comprise volumes of documentation, so Agrément would split this between its different areas of expertise, and he commented that Agrément had "a well-oiled machinery". In cases where applications did not meet its criteria - for instance where products might be covered by national standards - it would refer products to SABS. If there were no criteria, Agrément would work with everyone in the industry having an interest, in order to develop criteria. It aimed to ensure that 90% of Agrément certificates were issued within the Board-approved contract period.

Mr Masango interrupted to ask for clarity on the last point, for which no mandated time period was stated.

Mr Odhiambo responded that when products were received for assessment, Agrément would, when accepting them, give the clients an estimated period of time by which it would complete the assessment. The board approved this time estimate. Agrément was held to this time limit by both the Board and the client. In certain instances, for instance, if the product failed a test and the client must then improve it, the assessment period went outside its control and could not be met.

Mr Masango responded that this did not answer his question.

The Chairperson suggested that Mr Odhiambo finish his presentation, and Mr Masango should note his queries and raise them later.

Mr Jeremy Cronin, Deputy Minister of Public Works, said the issue was that there was no fixed time period. The reason was surely that products varied immensely from simple to complex so the time approved by the Board would vary.

The Chairperson thanked the Deputy Minister.

Mr Odhiambo agreed that this was correct; the time period for certification was dependent on the complexity of the product, and might take anywhere from two to nine months. For road products the period was two to three years because assessments were conducted in the laboratory, followed by field tests for a period of two years. At the beginning of any assessment, an estimate was made of how long it was likely to be before Agrément could approve or reject. The point was that it intended to try to comply with these preliminary estimates in 90% of cases.

Mr Odhiambo then moved to the strategic objection of human capital development, and said that an annual CSIR employee engagement survey was held, from which Agrément hoped to achieve a minimum of 64% approval rating. He suspected this was a high threshold.

Agrément also sought to achieve the objective of ensuring sustainability and stability of the Agrément South Africa technical agency, by continuing with a Board Technical Committee, including industry experts, who approved the certificates, in a Board-approved schedule of meetings, to which there was 100% compliance. It reviewed and made reference to the latest national standards and technical requirements, as stipulated in the law, and if the law changed then Agrément changed its criteria. Board meetings and the technical meetings were scheduled and complied fully with the King III recommendations.

Agrément sought to achieve the objective of improving technical assessments through participation in the 16th AGM of the World Federation of Technical Assessments Organisation (WFTAO) and International Research Organisations, and to contribute towards study tours and active participation in projects undertaken by other developmental states. It would devise innovative construction technologies suitable for fast-tracking rural development in South Africa, by introducing appropriate systems which had been used successfully in other parts of the world, with a target of at least one system a year. There were many synergies and changes happening in the building industry and the introduction of appropriate systems used elsewhere in the world was easier because of its membership to the WFTAO. It sought to achieve effective business management solutions for enhanced implementation of Agrément's mandate through the effective use of Peoplesoft Enterprise Resource Planning Solution for financial, human resource and project management. These sorts of systems were important for Agrément to achieve its technical objectives. It required 100% compliance with the processes and systems. It would ensure improved service delivery to meet client expectations and leverage stakeholder relations by improving customer satisfaction, conducting a customer satisfaction survey aiming for a minimum of 64% satisfaction, and increasing the percentage of certificate holders subjected to quality audits to 100%. The targets were high but Mr Odhiambo assured the Committee that they were not merely for show; they must be achieved.

He added that all quality management targets were taken very seriously, and it complied with globally accepted quality management systems. It sought to achieve these targets by facilitating and monitoring the implementation of the quality inspections on all Agrément South Africa’s certificate holders, through the completion and monitoring of a Quality Inspection Implementation Plan. Quality inspection was a organised examination and formal evaluation exercise, whereby Agrément would visit all certificate holders and perform a quality audit on every one. This involved using measurements and tests to ensure that the certificate holders would apply what had been approved. This process was taken very seriously by Agrément, being planned and performed correctly. It also sought to monitor previous quality records and manuals, by monitoring. This included historical performance and would ensure that approvals were properly done. Annual quality inspections and annual fees were monitored. It would also approve certificate holder’s licenses or qualified installers by monitoring the registration of licensees and qualified installers. Licensees were persons allowed to manufacture and build in accordance with the certificate by the certificate holder. The results of the quality inspection were compared with specific requirements and standards to determine whether the item or activity was in line with the targets or the standard. Inspection protocols were in place to ensure consistent of checking of inspections, as normally these tests were non-destructive. Obviously, these inspections, involving houses and businesses, had to be done on site.

Mr Odhiambo said that Agrément also seeks to facilitate the approval of the certificate holder’s quality manual based on the quality management system and implementation by ensuring all certificate holders implemented quality plans based on quality management system and implementation. It complied with the international standards, and the South African national standards which adopted the ISO standards. SABS 18001 was in line with ISO 18001, and similar, but both these would be replaced with new ISO and SABS 45001 next year. When the world changed, so did South Africa and Agrément.  It would facilitate and monitor the resources required to ensure these were sufficient for quality management. When it did not have adequate in-house technical skills it would outsource them by using experts either in CSIR or the industry. Agrément did not have all the skills that were required to assess every product, but would try to call on the best in the world to assist it to ensure that what it was doing was right, and it was striving to become the best, recognised by peers.

It would further facilitate and monitor the use of Agrément certificates by certificate holders and licensees follow up on issues concerning the use of Agrément certificates and facilitate and monitor the three yearly validity reviews. He explained that these reviews were more comprehensive than the quality inspections, and involved a comprehensive re-evaluation, checking any legislation changes and ensuring that the product was still doing what was expected.

Agrément’s technical assessment targets worked hand in hand with its quality assessment targets, and he described how, because the first target was to facilitate and monitor the implementation of the technical assessments, Agrément would thus ensure that it undertook the assessments. The same went for targets to monitor. Technical assessment reports were comprehensive technical documents which explained what the relevant product was, what its uses were, how it can be used and where, what tests were performed on the product and what the results of those tests were, as well as information how building work could be done by using that product. Agrément compiled reports which were approved by the Board.  I facilitated the approval of the certificate holder’s quality manual, based on quality management systems and implementation which ensured that all certificate holders implemented the quality plan based on ISO standards. A synopsis of the certificates was published on the Agrément South Africa website, in the Government Gazette and the Agrément South Africa Annual Report. This enabled the public to know what had been approved, what was tested and what was available for use in accordance with the law. It would follow up on any issues around use of certificates.

Agrément reported to the Minister of Public Works, who had approved the strategic plan. It had a Board, and consisted of three divisions: Quality Assurance, Water Penetration and Laboratories, Engineering, and Structural Engineering Specialists. All divisions were geared towards achieving overall organisational goals and provided an hierarchical arrangement in terms of authority and communication, and rights and duties within the governing structure of the organisation. Technical assessments of innovative systems were performed on behalf of government, and Agrément had made a great contribution to the safe introduction of innovative technologies to the country, with commensurate benefits. South Africa was a constitutional democracy with a three tier system of governance, and Agrément believed in an integrated approach towards governance, meaning that it was financially, technically and administratively well-governed.

Agrément firmly believed that innovative systems had the potential to teach people the ways and provide them with the means to take control of their future accommodation by allowing them to build their own homes. In Delft, behind the airport, there was a site where these innovative systems were being used and the people working there were from the local area, many of whom had never been builders before, but who were trained on-site and were now utilising this training. There was no better system to get people off the streets and demonstrating for services, than allowing them to build their own houses, giving them a sense of ownership and pride that would not lead to destruction of infrastructure.

Agrément South Africa had excellent support systems, business enterprise processes and very strong linkages with global best practise organisations, processes and individuals. , as evidenced by what the acting chairperson said about the CEO. Agrément was very well governed with strong internal control processes and systems. The Board addressed issues of corporate governance to ensure compliance with treasury and national requirements. This ensured proper fiduciary management. Agrément was making a contribution to building a better South Africa It was proud of its people and reputation, ingenuity, diversity and energy. It believed in people attaining their full potential, work reputation, quality and deliverance and the realisation of the full intellect of staff in creating these innovations. There was respect for individuals and multi-cultural heritage.

The Board had eight board members and strategic planning sessions were held annually. SABS and the National Home builders Registration Council were both represented on the Board. The Board also had academics, environmental, financial, legal and Organisational Health and Safety consultants. It was a highly intellectual and competent board, appointed by the Minister of Public Works. The Board operated at a strategic level and in accordance with good corporate governance policies. The Board’s technical subcommittee was focused on key objectives and ensured that Agrément remained well-governed, as well as approving the certificates. It followed the King III policies of good governance, organisational ownership and board responsibility to governance, and Parliament and the Board’s authority. The issues that seemed to affect other boards had no place at Agrément. The Board was fully functional, led by a very capable and able chairperson and was doing an excellent job. The Board understood its role, oversight and asset management, and was always accountable to Agrément's targets. The second of the King III principles was to ensure that the Board defined, in writing, the policies identified and how the board should conduct itself and how staff behaviour was prescribed. The third policy related to the Board’s delegation of authority, monitoring and evaluation. Financial statements were audited and Agrément received a clean audit report for the 2014 financial year.

Mr Thabelo Tshikomba, Financial Manager, Agrément, presented the financial statements. It had  a total budgeted income of R12 263 000, stemming from the income grant from Parliament as well as all the approved certificate payments for the 2015/16 financial year. It anticipated to spend R12 108 000, broken down to R6.5 million for Human Resources and R3 million for running costs. "Other" expenses included all support fees paid to CSIR, which included finance, legal, audit, procurement, management and other amounts. The surplus, before interest was received, was R155 000 and the interest was estimated at R132 000, with an ultimate net margin of R287 000 after interest. These were estimates based on previous years. He reported that in the 2013/14 financial year, the income was R11 million, and expenses were R10 900, with a margin before interest of R145 000, interest of 162 000 and with an ultimate net margin of R307 000.

Agrément had operated for 46 years under ministerial delegation. Its annual grant funding was channelled through the Department of Public Works to CSIR. The funds were ring fenced and only used for Agrément South Africa, and had a certificate from National Treasury to show this. The auditors were busy with the current audit and findings would be presented at the next meeting with the Committee. The transactions were subject to the policies, procedures and governance processes set out in Treasury Regulations, and audits were done. CSIR (incorporating Agrément finances) had received an unqualified audit report for the last few years and had been hailed as an example of good financial management.

Presentation Ended

The Chairperson thanked them for the presentation, and opened the floor to the Committee for questions.

Discussion

Mr K Sithole (IFP) asked, with reference to slide 6, for further clarity on the statement ‘world class processes and systems with a strong technological intellectual base’. Referring to the last bullet on slide 7, he asked what sort of critical skills development the entity was involved in and what its success was in this regard. With reference to slide 8, he asked whether corruption referred to internal problems, or amongst inspectors. Referring to slide 11, he asked the delegation to specify which rural areas it covered. He also wanted more clarity on the strategic plan's reference to Outcome 6 and asked if this meant the standardisation of technology.

Mr M Filtane (UDM) asked, with reference to slide 6, why the Committee Chairperson’s picture was included in the presentation and whether this did not compromise the role and purpose of the Committee. 

The Chairperson quipped that he was obviously a "wanted man".

Mr Filtane asked, with reference to slide 10, if the entity had a deeper relationship with academic institutions other than reflected in the presentation. On slide 11, he asked how Agrément balanced technological efficacy with labour intensiveness, because whilst it was appreciated that the world was technologically driven, South Africa was concerned with the involvement of labour in every rand spent by government. It did not want to be left behind, yet the environment had to be nurtured, and he wondered if the technology was environmentally as well as efficiency friendly. He also asked how it achieved a balance between technology and job creation and wondered how many jobs had been created and lost due to technological advancement in the last three years. He questioned why the payments were made "within 45 days" when the national norm was 30 days. He also asked, with reference to slide 20 and 21, how it measured the quoted 64% of employee and client satisfaction, and commented that this was very far below other targets. The human factor was important because it was this that would drive the programme. There should be a high emphasis on performance, wellness and satisfaction of employees. Pointing out that the end result of any institution was the continued marketability of its products; he said that it this was dependent on client and employee satisfaction.

Mr Masango referred to the Committee's site inspections and asked how Agrément would market its products to the Department of Human Settlements and said that although it had said that its products were wide-spread, perhaps they were not widespread enough, for the types of houses the Committee had seen were not to be found everywhere, and there were still problems with sanitation. He asked about the corrugated iron that was commonly seen in South Africa, asking it was Agrément or SABS that approved it for use in South Africa.

Mr Masango emphasised Mr Filtane's concerns about paying within the prescribed 30 days, saying that nothing other than this would be accepted or approved.

Mr Masango was doubtful, with reference to slide 8, that the introduction of the proposed Bill would change the situation in South Africa. The pictures and diagrams were well and good but he doubted that the Bill would take the country from poverty and inequality to prosperity and equity, so that Agrément should not represent it as such.

Ms P Adams (ANC) congratulated Agrément on its clean audit. She wondered why the information on slides 31 and 32 was not presented on one page. She also, with reference to the last page of the presentation, said that this was a communal goal, although slide 20 had referred to teams together achieving more. The satisfaction rate of 64% indicated that, there was clearly a large portion of the workforce who were not satisfied, and asked why, and what the main challenges were. She said Agrément had a very important role, and wondered how it would achieve without satisfaction on its work. She posed the same question with respect to the client satisfaction. She too asked why Agrément was setting a target of payment in 45 days, instead of 30. She asked how it was addressing the shortage of critical skills and what its role was to decrease this shortage.

Ms E Masehela (ANC) also spoke to the fact that materials used by some projects had not been used in her province, Limpopo, and asked if they were available around the country, could be used widely by house owners, and, if not, what the main challenges were. She asked for clarity on slide 25 and why the organogram was not populated, also asking for references to the percentages, and how many women and disabled people were involved. She thought the information on slide 31 could have been better presented so that it could be compared more easily.

Mr Tshikomba addressed the question of the 45 days and pointed out that in most cases, payment was received before work was started, and then invoiced after the work had been completed. It was possible to change that target.

The Chairperson wondered why the 45 days was chosen if there were actually no administrative problems, what was the rationale.

Mr Odhiambo responded that it was an oversight, this was a CSIR target and apologised for the error.

The Deputy Minister added that the Minister had also approved the 45 days, but this was an oversight and he was pleased that Members had picked it up. He noted that Agrément would not only receive disbursements, for example, from clients who wanted accreditation, but must also make payments, such as paying consultant experts for outsourced work, and he agreed that in respect of invoices from consultants, 30 days should be the payment period. He apologised again for the oversight of the Ministry in accepting the 45 days.

Mr Odhiambo answered Mr Sithole that the strong technological intellectual base was one of the strategic intentions of the Board, and it referred to its linkages in the global sphere with other organisations. Because of the world becoming a global village, a product available today in Germany would reach South Africa tomorrow, and he would like to be able to call on another organisation for technical information on the product. The "intellectual base" meant the ability to tap into the cutting edge issues of new products, tests and how these could be leveraged to increase own knowledge. Agrément contributed to creating critical skills, and where these might be lacking it would try to source them locally rather than overseas. Globally, the built environment was facing challenges in critical skills, with most of these being with older people, which meant that knowledge transfer was crucial. It tried to empower young staff by mentoring by older and more experienced people. It paid great attention to skills transfer and the retention of competent skills to address current and future critical skills challenges. Great attention was paid to transfer of knowledge in the areas of technical resources.

Mr Odhiambo said that Slide 8 set out the national targets. Whilst the Agrément South Africa Bill may not achieve all those, it did have the potential to improve the quality and lives of the people. On the issue of corruption, he pointed out that innovation technologies were less complex than conventional technologies, and by implementing them across the board this could achieve less grey areas, and more clarity on inputs and outputs, less wastage and therefore could lower the risk of corruption, as there was not so much that could change. The built environment professionals would not be able to hide what they were doing when they used such technologies as easily as by using conventional technology.

Speaking to questions on slide 11, Mr Odhiambo said that by the development of new industries that added value to the use of indigenous natural materials such as hemp, natural fibres, Agrément could contribute to decent employment through inclusive economic growth. For example, a research project was currently under way by the CSIR to use natural fibres in construction, such as hemp, in Port Elizabeth, Hemp, being strong and not able to be easily pulled apart, was a very good material to use in construction. Creation of employment would happen both in growing hemp and in the creation of the building material. This was a work in progress and was an example of how Agrément could contribute to achieving national outcomes.

Agrément had relationships with many academic institutions. If offered bursaries, and recruited nationally, and gave talks and lectures at various institutions of higher learning. He noted that it was represented on other Boards. It used the laboratories at UCT, the University of Pretoria, WITS and the University of Johannesburg and was very much involved with academic institutions. It pulled from them for experts on its technical boards and sub-committees. It attended workshops and conferences, and there was constant engagement.

Agrément worked to enhance both labour technical advancement and labour intensiveness and job creation in various ways. It was true that some of the technical advancements did lead to reductions in jobs, but when costs were saved it was possible to do twice as much, but by halving input, human capital could be retained for longer. There were jobs within the factories that manufactured its products, and these were at quite high level. Time was saved through technology, and that time could be put to creating other things. He agreed that it was a question of balance, but it was also one of on-going research and development. With respect to avoiding non-environmentally friendly products, the Board instructed Agrément to ensure that all products that reached the Board had undergone an environmental assessment and so there would be assessments on everything in future. Information might include use of energy, recyclability, for fridges and stoves for example.

Mr Odhiambo said that the 64% satisfaction rate for employees would be reviewed. The CSIR had won the best employer award in South Africa for the last ten years running, so whilst the 64% target may seem low Agrément was still one of the best employers nationally.

Agrément did not market any particular product as it was meant to be impartial; it was not a player, but a referee. These products were well known within the Built Environment. He noted that, for example, all new McDonalds outlets were being built using an innovative technology called the eco-building system and so were new hotels and motor showrooms. The housing sector may be behind, but was catching up, such as projects in Delft. The private sector tended to move faster than the public sector but the Department of Human Settlements will catch up. Sanitation products existed but were not being used extensively, although some were being used in deep rural areas where there was no on-site sanitation, such as stand-alone water purification systems. Corrugated iron sheets had been approved for uses such as walls, but not necessarily for housing. Where people used the right product for the wrong purpose, the problem was with the people, and not the product.

He noted the comments on the slide structure made by Ms Masehela and Ms Adams.

Mr Odhiambo said that Agrément had close to equal gender representation, and around 90% of the staff were black. He noted the point on financial baseline, but said that its budget gets an approximately 6% increment every year. Its expenditure was linked to income, and he repeated that Agrément did not spend what it did not have.

Mr Fredericks added that its products may be used anywhere, but generally the certificate that was issued stipulated in which regions products may be used, as well as any additional requirements that may need to be complied with, to cope with factors such as wind and rain. It would also be stipulated how the product may be used, whether it was suitable for single storey or double storey developments.

The Chairperson noted that Ms Adams' question asking that some of the challenges articulated by staff and customers be given had not been answered.

Mr Odhiambo responded that this was a difficult question to answer. There had been an online survey performed by an external company, and the questions asked were the usual questions asked in employee surveys, whether employees were happy with management, salary and environment. He added that he had been at the CSIR for some time and believed it was one of the best employers…

The Chairperson asked him, if necessary, to defer to others in the delegation who might assist. Speaking of how well CSIR was perceived was not an answer to the question. Agrément had engaged the services of an external body to conduct the enquiries, paid for them, and thus had a responsibility to analyse the results so that it could perform in future. It did not help to say the questions posed were of a general nature, and he repeated that if the service was paid for, specifically to enhance the performance of Agrément, it would be remiss of that entity not to analyse the outcomes. Although the answer need not be given in the meeting, it was a legitimate issue flagged by Members. Although Agrément was doing fairly well, its performance could still be enhanced, and it must not rest on its laurels and ride on its good reputation. It was the responsibility of this Committee to point out weaknesses without fear or favour.

The Deputy Minister said the survey was conducted at the CSIR and was relevant to everyone at the CSIR, since it was this body that paid for the survey. This raised a different issue. It was true that the CSIR hosts, accommodates and assists Agrément. However, the point made earlier that Agrément cannot be both player and referee remained important. CSIR was active in one space, and Agrément was a small but important player in terms of regulations. It was hoped that this would be addressed by the Bill. That would not, he agreed, address all of South Africa’s ills, but it would help to distinguish the two entities. The confusion was most likely compounded by the response detailing how good an employer the CSIR was.

Mr Masango stressed that is was important for this Committee to hear how Agrément was doing on its own, separate from the CSIR, who reported to another Committee, and it would be difficult if the two matters were confused. It seemed, from what had been said, that it was Agrément who developed the innovative products. However, it now appeared that Agrément would test these products but not develop them. Thus, it could not truthfully say, if it was not actually developing the products, that its work would improve the lives of people with respect to housing, or improve the quality of education with respect to schools, if it was not developing but only testing for others. It was not truly contributing to achieving national outcomes by simply approving or rejecting products. There must be a difference between the CSIR and Agrément, with a clear distinction set out, in order to be able to assess and deal with Agrément on its actual contributions.

Mr Mubu said that Mr Odhiambo made reference to the fact that the Agrément South Africa Bill was going to change the lives of South Africans. He thought that too was not correct. The Bill would not change the status of the entity, but only align it better with the Public Finance Management Act (PFMA). He felt this was an over-emphasis. In relation to the houses being built in Delft, he asked what materials were being used for these houses, and to what extent they were affordable to poor people, who needed them the most. He also asked to what extent Agrément collaborated with other countries in the SADC, since there was no indication in the presentation that It was aligned to any African organisations of the same nature. He asked why casual employees were needed.

Mr Sithole repeated and rephrased hwas former question on Outcome 6 in its strategic plan, and asked what kind of capacity was provided to transportation networks such as roads and rail.

Ms N Sonti (EFF) asked, with reference to slide 12, about what Agrément might do towards the improvement of the condition of the schools in rural areas, including her home, where conditions were still very poor, schools were built with mud and most people were living in shacks instead of permanent dwellings, also of poor size and quality.

Mr Odhiambo agreed with Mr Masango’s comments, and clarified that the role of Agrément was to approve or reject products. For this reason, Slide 8 may have been misleading and he would correct it. Agrément was just the referee, and not a player. It did not get involved in building; simply certified building products. What he had meant was that the products, now that they were certified, could then be used by others to achieve the benefits stated.

He agreed that the Bill only served to establish Agrément as a legal entity and any interpretation to the contrary was regrettable but unintended. However, Agrément would align with the government outcome to improve the lives of the people.

He clarified that the materials used in Delft were a light steel frame structure, in accordance with the South African National Standards, and these steel frameworks were a standard product, which provided the structural integrity. The houses had insulation and was clad on the outside with board material. As far as affordability was concerned, according to research conducted by CSIR, these products were significantly cheaper than conventional materials, thereby more affordable.

He noted that Agrément could not align itself to other countries in Africa, because Agrément was the only technical assessment organisation on the Continent. It was assisting Zimbabwe to establish its own technical assessment agency, and it sat on SANRAL in respect of roads.

He explained that the casual employees were the experts that were called in when the skills required could not be found in-house, and repeated that there were times when outside expertise was needed.

The Chairperson interjected that this was a problematic term: since "casual employees" was a term generally suggesting short-term, casual workers. Expertise of the type he noted was more properly described as "specialist consultants".

Mr Odhiambo noted and accepted that point.

He noted that the cooperation with SANRAL meant it provided assistance to road authorities. It was not working too much in rail and sea ports, but It was working, together with other research organisations, to develop criteria for products that could be used in this sphere.

He agreed with Ms Sonti that progress on schools in rural areas was work in progress and the benefits would come in time. Agrément was also working to reduce the number of shacks, by approving new materials.

The Deputy Minister commented on Mr Filtane's question why the Chairperson's photograph had been included in the presentation. He had advised his colleagues against such practices because the relationship between Ministry and Committee was entirely professional. He commented that Agrément comprised technical people, and this also perhaps explained the issue of the Bill being incorrectly portrayed; Agrément was not a spin doctor, and regrettably did slip up from time to time, such as when describing the Bill and including the photo.  He agreed with Mr Masango's concerns about over-stating.

He stressed that it was not Agrément's job to innovate or to promote individual products. However, he encouraged the Committee to appreciate that Agrément was an important cog, playing a small, but important role, within a broader process. Fragmentation was a problem in Government and in South Africa in general, and entity activities were not necessarily aligned to national outcomes such as improved human settlements. Agrément was not going to build townships or new settlements, but it did need to see its job as something more than being a narrow minded regulator only, but being part and parcel of a greater outcome. For this reason, he had been appreciative of the way that Mr Odhiambo had made the connections between what it did and how in this was it was contributing to wider issues. The role must not be overstated but at the same time the connections must be borne in mind. Agrément was not promoting individual products but it was promoting innovation that hopefully linked with labour intensive possibilities. Some of these innovations were indeed creating the possibility for a much higher level of labour intensity, as opposed to other technical innovation possibilities that may result in putting people out of work. For instance, the thinner road surfacing would mean use of less heavy machinery, but greater use of individuals, and the same went for paved pavements. These would create possibilities for ordinary people to work in construction. He thought it was important to make these sorts of links. He also stressed that Agrément would promote innovation, but be careful about what type of innovation. The Committee, the Department and the Ministry could all give more input. For this reason, he suggested that perhaps the Portfolio Committees on Public Works and Human Settlements, together with any other relevant stakeholders may wish to meet together and maybe go to Delft to see what could be learned there, and whether it could be applied to settlements in Marikana. He was embarrassed to admit that this was the first time he had heard of Delft using such innovations on a large scale. He sat on the PICC's Secretariat, and it was saying that nothing was happening beyond Mbekweni, where two houses were being built with innovative products. Different parts of government and different portfolio committees with strong links were not connecting, and this was something that all had to try to rectify, as well as to promote these developments more, since it was clear that information was not sufficiently widely circulated.

The Chairperson thanked the Deputy Minister and Agrément for their input and said that this would not be the last meeting; and as other issues arose the Committee may contact the entity.

The meeting was adjourned.