Garth Strachan. Picture: ARNOLD PRONTO
Garth Strachan. Picture: ARNOLD PRONTO

The government entity tasked with ensuring quality and safety of products in SA is still on track to return to stability, despite the resignation of its acting CEO, the department of trade and industry said on Thursday.

SA Bureau of Standards (SABS) acting CEO Garth Strachan resigned last week after allegedly clashing with the department of trade and industry director-general, Lionel October.

DA MP and trade and industry spokesperson Dean Macpherson alleged that Strachan’s resignation stemmed from the portfolio committee’s oversight visit to the SABS last week. He said that during the visit, the committee was told the entity is bankrupt and battling to attract the thousands of customers it had lost during the previous “delinquent board and management, which was dissolved under former [trade and industry] minister Rob Davies”.

The SABS has been in a state of disarray for years due to poor governance and a deluge of complaints over its under-performance in conducting tests and issuing certificates for products. Backlogs and long delays in performing these functions have resulted in businesses losing export orders for products that require a quality assurance from the bureau.

The SABS received a disclaimer, the worst possible audit outcome, from the auditor-general for its 2017/2018 figures. However, under Strachan, it reduced its loss in the financial year to end-March 2019 to R4.4m from a loss of R70.7m in the 2017/2018 financial year.

The department did not provide specific reasons for Strachan’s departure. “The department of trade and industry would like to assure stakeholders that the SABS remains committed to delivering on its turnaround strategy, despite the recent resignation of the acting CEO Garth Strachan,” it said in a statement.

It said Jodi Scholtz and Tshenge Demana, who were appointed as co-administrators of the SABS in 2018, will continue to steer the organisation to achieve its objectives and fulfil its mandate.

“The administrators are being supported by the [department] and Scholtz will now serve as the lead administrator, until the process of appointing a board is finalised,” the department said.

Financial challenges

October said Strachan had been influential in putting SABS on a firmer footing. “The SABS will continue to implement the plans initiated by Strachan and [his departure] will not deter the commitment of the SABS to deliver value to SA.”

October did concede, however, that financial challenges remain.

“It is expected that in the next three years the organisation will return to profitability. Investments are currently being made to upgrade high-priority laboratories, improve facilities to optimise testing conditions, and to procure new equipment,” he said. “This is part of a broader investment plan, implemented over three years, that will result in the financial stability of the organisation.” 

Said Macpherson:There can be no doubt that the departure of Mr Strachan will have a knock-on effect for exporters who rely on the SABS for quality assurance in international markets, and for consumers who expect goods that display the SABS mark to meet minimum standards for health and safety.

“This drama in the SABS must be urgently addressed by minister Ebrahim Patel and for this reason the DA will write to him and request the full reasons for Mr Strachan’s resignation to be made known, as well as a plan for the way forward.”

phakathib@businesslive.co.za