Allegations of corruption and governance failures at the SABS to be investigated

Minister of Trade, Industry and Competition Parks Tau has decided to launch a “deep dive” independent investigation into allegations of corruption, governance failures, recruitment irregularities and other issues at the South African Bureau of Standards (SABS).

This follows allegations by whistleblowers since August 2024, which the SABS denied, but led to Democratic Alliance (DA) Trade, Industry and Competition spokesperson Toby Chance calling for an independent investigation into the allegations.

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It also follows the SABS on 8 August 2024 losing South African National Accreditation System (Sanas) accreditation for its cement laboratories and on 20 November 2024 experiencing “a significant cybersecurity incident involving a ransomware attack” that seriously disrupted its operations.

Approval for ‘full investigation’

Department of Trade, Industry and Competition (dtic) director Nontombi Matomela told a meeting of parliament’s portfolio committee on trade, industry and competition that Tau granted approval in December 2024 for a full investigation to be conducted into the allegations.

“Subsequent to the approval granted by the Minister, the department is finalising the associated logistics to enable the investigation to commence.

“The intention is for that to start as soon as possible, as early as next week,” she said.

Matomela said the scope of the investigation will include all the allegations received, including any other related aspect deemed necessary, including allegations received only on Monday.

Acting SABS board chair Ron Josias confirmed receiving a letter from Tau on Monday advising him that a full investigation will be launched.

“We are in full support of that investigation. Hopefully it will provide us with recommendations on how to move forward,” he said.

Allegations

Matomela said the allegations are that:

• There is bullying and mismanagement at the SABS;

• There are cover-ups at the SABS;

• An SABS director was charged with financial misconduct;

• The SABS “is beyond a crisis” and urgent intervention is required; and

• The lack of urgency and action regarding the SABS is unacceptable.

Acting SABS CEO Lizo Makele said the SABS’s recruitment practices are governed by the bureau’s recruitment policy and procedures, which are aligned to national legislation and the constitution.

He said the recruitment process is conducted by selection panels, using objective best-practice selection tools.

“This makes it impossible for any individual executive/manager to appoint candidates who do not meet the requirements of the job.”

Gross negligence

Makele confirmed there have been instances where SABS employees were taken through a disciplinary process for various transgressions, including gross negligence resulting in loss of revenue and reputational damage.

He said the latest transgression in this regard related to gross negligence by a particular employee because of the loss of accreditation for the cement scheme, which has resulted in the organisation not generating revenue because it can longer “make business or start new businesses in that particular scheme”.

Makele said other disciplinary hearings related to fruitless and wasteful expenditure, dishonesty, fraud, malicious leaking of confidential information which opens the organisation up for litigation, assaults and acts of unlawful conduct.

He said the temporary loss of accreditation for the cement scheme is one of the biggest incidents that has happened at the SABS.

The SABS cement scope of accreditation was partially suspended by Sanas from 8 August 2024.

This means the SABS cannot issue permits bearing the Sanas logo for new clients, the addition of scope, or new products and renewals, he said.

Makele said the SABS was initially given a period of three months to put remedial actions in place but has been granted an extension until April 2025 for the re-assessment because of the recent ransomware attack incident.

Cyber attack

He said the significant cybersecurity incident involving a ransomware attack experienced on 20 November 2024 has had serious implications for the bureau’s operating capabilities and its ability to deliver essential services.

“We took immediate action to mitigate the impact and ensure the recovery of systems.

“Management activated business continuity plans to ensure continuity of operations,” he said.

“The rebuilding of the virtual machines on the cloud was concluded on 29 December 2024, which would enable us to install any of the business applications.

“The re-installing of the applications is currently underway with some having been completely re-installed, which include the website.

“The operations have been reactivated in a number of areas,” he said.

Makele attributed the delay with the completion of these tasks to the old technology and legacy systems at the SABS but indicated that the operations of the organisation are ongoing.

This means laboratory services are doing their work, certification audits are continuing, training and accreditation is happening, and salaries are being paid and there “is no month where salaries were not paid to employees”.

Allegations ‘serious’

African Christian Democratic Party MP Wayne Thring said many of the allegations that have been presented are serious and damning allegations and he hopes they are not true.

But he stressed that if the investigation process finds them to be true, there has to be consequence management.

Thring asked what percentage of SABS’s operations post the cyber attack are “up and running” and expressed concern about the loss of accreditation from Sanas because it validates the quality of cement in South Africa.

“This obviously has downstream implications, which could impact on the quality and standard of buildings and major structures in the country,” he said.

“The cyber attack has resulted in an extension by Sanas to SABS to make the necessary adjustments but what processes are in place to ensure that the quality of cement that is being put out in South Africa will not compromise buildings and structures that are being developed?” he asked.

A response was not provided to his questions during the meeting.

One problem, and numerous questions …

The DA’s Toby Chance said he is happy that “after seven months of dithering” there now seems to have been some action and he is very keen to see the outcome of the investigation report as soon as possible.

He added that the process described in the meeting in handling the allegations has a fundamental flaw in that the responses from the SABS requested by the dtic “have been prepared by the very people alleged to have committed the acts of misgovernance in the first place”.

He had a number of other questions for the SABS and the dtic, including:

• The name of the service provider for the independent investigation;
• The terms of reference of the investigation;
• When the investigation report is expected to be submitted; and
• What provisions are being made to preserve the evidence of staff/whistleblowers while the investigation is under way.

Chance also asked if the dtic or Tau deem it appropriate for the SABS to attack an MP for doing his job in holding public entities to account.

This was in reference to an SABS statement issued on 13 December 2024 under the heading: “A member of Parliament and the DA spokesperson on trade, industry and competition, Mr Toby Chance (Mr Chance), sponsors anarchy at the SABS”.

Some answers …

Matomela said the dtic has a panel of service providers and her understanding is the dtic will be making use of one of them to conduct the investigation.

Matomela and acting dtic director-general Malelo Mabitje-Thomson both stressed that the allegations about the SABS are all untested allegations and that they will be subjected to a formal process of verification.

Mabitje-Thomson highlighted the importance of ensuring that the way the investigation is handled does not undermine what the SABS provides to the economy and South Africa and the value of its certification reports.

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