The South African Bureau of Standards (SABS) was placed under administration in June 2018. Garth Strachan was appointed acting CEO in August 2018. And in October 2019, the state-owned standards and certification body reported a reduction in its net loss of almost 94% to R4.4 million in the year to March, from just shy of R71 million the previous year.
Despite this, Strachan believed he no longer enjoyed the confidence of Department of Trade and Industry and Competition (dtic) Director-General Lionel October. The SABS said in a statement that Strachan had resigned with effect from last Thursday (February 6).
“I was sent to turn around decades of decline at the level of governance, at the level of finance, at the level of operations and restoring the confidence of industry and players in the institution,” Strachan told Moneyweb.
“But if you don’t enjoy the confidence [of the dtic], as the acting CEO and the accounting officer, then it’s very difficult to turn an institution around, because it needs profound and fundamental repurposing,” he said.
Lack of confidence ‘evident’
Strachan, formerly deputy director-general of the industrial development division at the Department of Trade and Industry, said October’s lack of confidence in him was evident from his remarks to the parliamentary portfolio committee on trade and industry, which visited the state-owned entity last Tuesday (February 4).
Strachan declined to comment on what October had told the portfolio committee.
However, Democratic Alliance (DA) shadow minister of trade and industry Dean Macpherson said the DA has been reliably informed that Strachan suddenly resigned after “a spectacular fallout” with October.
Macpherson said this stems from the portfolio committee’s oversight visit to the SABS last Tuesday, where they were told that the entity is essentially bankrupt, will run out of cash in the next financial year, and is battling to attract thousands of customers it lost under the previous delinquent board.
That board was dissolved in June 2018 by former Minister of Trade and Industry Rob Davies.
The SABS, in a statement issued on Friday (February 7) announcing Strachan’s resignation, thanked him for his “invaluable contribution in formulating a sound strategy for the SABS” and said the SABS is committed to the continued implementation of the turnaround strategy.
Risk to industrial efforts, exports
Strachan told Moneyweb that industrial efforts in South Africa will be extremely difficult without a functioning, competitive, world-class standards and conformity assessment institution, which the SABS should be.
He said there is a strong correlation between successful industrialised countries and standards and conformity assessments and the existence of a requisite, robust, productive, well-functioning, technical, quality infrastructure institutions – of which the SABS is the most important.
Trade and Industry Minister Ebrahim Patel said in the SABS’s latest integrated report that the role of industrial policy is to unleash private investment and energise the state to boost economic growth and inclusion, which is an essential part of building confidence and the platform for job creation.
“The SABS will have a critical role to play in this new industrial strategy, in maintaining appropriate standards and ensuring that South African-made goods are quality products,” said Patel.
Macpherson said there can be no doubt that the departure of 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.