STANDARDS AND TECHNICAL REGULATIONS
Fundamentals, their role in smoothening trade, sustaining economic benefits and safeguarding societies AUTHENTIC
FAKE
TBT PROGRAMME OVERCOMING TECHNICAL BARRIERS TO TRADE
ESA Ethiopian Standards Agency Bole Subcity Woreda 6 (Ring-road side, next to AMCE) ET-Addis Ababa Tel: +251 11 6 46 01 11 Fax: +251 11 6 46 08 80 E-mail: info@ethiostandards.org Web: www.ethiostandards.org
TBT PROGRAMME
OVER COMING TECHNIC AL BARRIERS TO TR ADE
TBT Programme Management Unit Avenue de Tervuren 32, box 31 1040 Brussels - Belgium Tel: +32-2 739 00 00 Fax: +32-2 739 00 09 e-mail: contact@acp-eu-tbt.org Web: www.acp-eu-tbt.org
The views expressed in this publication do not necessarily reflect the views of the European Union nor those of the ACP secretariat
PREFACE For many years, the belief about developing standards was considered as a secondary issue, and as an activity implemented only by those who have the capacity. Only few understood that standards development work is the effective way to gain the real social and economic benefit. Whether we are aware or not, every day and everywhere, we are with standards. If that is so, then we have to inform, teach and show people about the benefit of standards. Beyond that, it is imperative to discuss issues related to health and safety and use of technical regulation in order to address such concern. The aim of preparing this booklet is thus felicitating for the promotion of awareness about standards and technical regulations and the socio – economic benefits to earn from their proper implementation. Motivating stakeholders to engage them for more involvement in standardization is also the concern of awareness creation in preparing this material. We hope that this booklet would contribute to help for better understanding about standards and technical regulations and their benefits through facilitating trade and towards sustaining economic growth.
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PART ONE
Standards
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Why need standards? Standards are everywhere; they make life easier, safer and healthier for businesses and consumers. Standards are useful for optimizing performance, ensuring the health and safety of consumers and workers, protecting the environment and enabling companies to comply with legal requirements (laws and regulations). However, it is worth noting here where laws and regulations jump in we are no more talking of standards which are naturally voluntary. Rather it will be the case with technical regulations. A standard becomes technical regulation when declared mandatory or compulsory; and once it has become technical regulation it is legally binding. Consumers may enjoy the benefits of enforced technical regulations provided that the regulatory environment has been well managed and is properly functioning. This can also serve the objectives of governments to secure the rights of their citizens, and is an important component of good governance. It has been recommended in the World Trade Organization-Technical Barriers to Trade (WTO –TBT) Agreement that governments have sovereign rights to protect their citizens through imposing technical regulations with the objective of, among others, protecting human health and consumers’ safety. However, it is also recommended that where they exist and are relevant to the needs, technical regulations need to be based on International Standards that were adopted or adapted as national standards. Organized consumers need to be active players in standardization as technical regulations that are based on standards are the most reliable means for the protection of consumers. Injuries to life, illness and deaths caused from use of unsafe (substandard) products, environmental pollution and degradation, service malpractices, etc can be well prevented through the use of standards and this would account to improved quality of life of the society.
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Standards and Standardization Standards are officially defined as documents that are established by consensus and approved by a recognized body that provide for common and repeated use, the rules, guidelines or characteristics for activities or their results, aimed at the achievement of the optimum degree of order in a given context. They are usually formal technical documents that set out and define criteria, methods, processes and practices. For most people, standards are commonly agreed reference documents that help to bring order to the world. Most people know what shoe size they wear, because shoe sizes are standardized. And, when we purchase an electrical product such as a television we can reasonably assume that it will be able to be connected to the electricity supply in our home. This is because the plugs that are fitted to electrical products and the sockets that are installed in our homes have both been designed to meet commonly agreed and widely accepted standards. Standards should be based on the consolidated results of science, technology and experience, aimed at the promotion of optimum community benefits. In developing standards, not only specification about products or services is considered but also terminology, symbols and signs are included. Product standards also include sampling, testing, method of analysis, packaging and labeling. Standards provide a common and repeatable basis for doing things and help to bring order to the world. Quite simply, without standards there would be chaos. Most standards have been around for a long time, but many new standards are developed every year. In addition, many existing standards are regularly revised and updated to ensure that they remain fit for purpose as new materials, technologies and processes become available. External factors can also prompt the need for new standards, such as an increased need to protect the environment or to address concerns on the part of consumers or public bodies about products or services. Standards support industry competitiveness by assisting with the codification and dissemination of new knowledge and innovations, helping to improve products and services, ensuring interoperability and enabling trade. They also help businesses to demonstrate to regulators and customers that their products and services meet defined safety, quality and environmental requirements.
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Standards can be broadly sub-divided into the following categories, namely, measurement, design, product, and process management system and service standards. Measurement standard: Whether something is what it should be and how much it needs to be is addressed in measurement standard. Metrology is the science of measurement and one very important aspect of metrology is the basic metrology, also known as legal metrology or trade metrology. The weighting scale and fuel gauge are the best common examples which need consistent calibration based on the standards to ensure that they are functioning properly and do correct measuring. Design standards: Refer to product, material or process designs at the early stage of development. Product standards: Cover various features of products and often refer to characteristics related to quality and safety, or to aspects that ensure their interoperability with other related products. A product standard is used to ensure that the product conforms to all requirements specified in the standard. This often needs to perform several tests and analysis in order to make an assessment of conformity. Process standards: Refer to the conditions under which products and services are to be produced, packaged or refined Management system standards: Assist organizations to manage their operations. They are often used to help create a framework that allows the organization to consistently achieve the requirements that are set out in product and process standards increasingly. Quality Management System, Environmental Management System, Food Safety Management System, etc.
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Service standards: are emerging as a discrete type of standards and are typically developed to ensure a consistent minimum standard of quality in the provision of a service, and to clarify the rights and responsibilities of both the provider and the user of the service. Health care, education, telecom, information, financial, transportation, tourism, etc are examples of services which have started benefiting from the use of standards. Code of practice: Such concerns as how to do something and do it the right way to make it acceptable to the users can be addressed through the use of such standards. Building codes are the best example for this. Currently a new area of standardization is evolving and there are a number of management standards and service standards which intend to complement and address the concerns. Standardization is an open process that welcomes all kinds of stakeholders, and those that are typically involved include: business and industry (including SMEs): public authorities and enforcement bodies; professional bodies; trade associations; certification, testing and inspection associations (Conformity Assessment Bodies); environmental and societal organization; consumer organization; trade unions; educational establishments; and research organization. Stakeholders involvement is the key to making effective the processes of standardization. National Standards Bodies (NSBs) try to ensure that standards are developed through a real consensus building at national level, and therefore seek to bring together all relevant national stakeholder groups with significant interest in particular standardization projects. They also negotiate with others based on formulated national positions in developing International Standards. The task of drafting formal standards is allocated to technical committee that will then establish one or more working groups comprised of experts. There are specific rules for drafting standards that must be adhered to. These are designed to ensure that standards are developed according to the principles of transparency, openness, impartiality, consensus, efficiency, relevance and consistency. As an individual standard is drafted or agreed upon for drafting it will be submitted to the concerned Technical committee (TC) and when accepted as a committee draft (CD) it will be made open for commenting including public inquiry. Then comments at various stages are considered and the final draft taken for approval. These are governed by relevant international and national directives and rules of procedure.
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Aims of standardization The activities of standardization are development and implementing of standards which among others include terminology, symbols, specifications, sampling, testing, packaging, marking and labeling as they apply to product or production process/method or services or personnel or management systems. The aims of standardization include defining performances of products, processes, services and systems from design to use through end of the use and disposal. The following are the major aims of standardization. Fitness for Purpose/Quality: The ability of a product, service or process or system to fulfill a defined purpose. Quality of product, service or process or system meets to serve the intended of need the user and the optimum performance parameters’ Safety: Use of product, service or process or system must not pose a threat to life or property. Consumers must be guarded against factors that affect their health and lives. Compatibility: Suitability of parallel developed products, services or processes or systems to be used together. Interoperability: Refers to the diverse interfacing systems or materials to fit and work together. Interchangeability: Where a product, processor system can be used in place of another.
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Variety reduction/ Rationalization: Lesser degree of inventories resulting in lower cost of manufacture. Enabling consumers to select the most appropriate product or service relevant to their needs. Balancing between too many and too few varieties, in the best interest of both manufacturers and consumers. Improved Communication: Provision of precise information to facilitate common understanding. Spelt out means of communication used between different parties. Transfer of Technology: Vehicle in transferring new knowledge, skills and technologies from one user to another or from one part of the world to another. Incorporation of the results of advances in science, technology and experience which reflect the state-of- the-art in technological development to adopt and make use of and increase one’s benefits. Environmental Protection: Preserving nature from damage that may be caused during the manufacture of a product or during its use or disposal. Better resource utilization: Reduction of waste and to carry out mass production in an economic way. Removal of trade barriers: Harmonization of requirements in a manner that promotes fair competition. Purchaser can be convinced about the quality level of a product that has been manufactured. Implementation of international agreement and prevention or settlement of trade disputes.
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Benefits of Standardization The main benefits of standardization have been outlined as follows. For manufacturer: Rationalization of the manufacturing process, reduction of cost and simplification of operations. Elimination or minimization of material and labor wastage. Minimization of inventories of both raw materials and finished products. Improved productivity and competitiveness. Customer confidence and sustainable market. For business person/ organization: The provision of a workable basis for acceptance or rejection of goods or consequential disputes, if any. Minimization of delays, correspondence, etc, resulting from inaccurate or incomplete specification of materials or products. For Customer of an organization: Assurance of the quality of purchased goods or received services. Justification for better value for money. Convenience for settling disputes, if any, with suppliers. For researcher (Scientist/Technologist): Provision of starting point for research and development for practical application and further improvement or innovation. For Governments: Supports the technical aspects of economic, societal and environmental policies and contributes to sustainable development Serves to enhance industrial productivity, competitiveness and sustainable development Facilitates for regulatory compliance and offers the means for consumer protection Enhances the market access opportunities and achieving maximum overall economy
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PART TWO
Technical Regulation
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Document which lays down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory (WTO). It may include or deal exclusively with terminology, symbols, packaging, marking or labeling requirements as they apply to a product, process or production method. A technical regulation is a document adopted by an authority that provides binding technical requirements, either directly or by referencing or incorporating the content of a standards, technical specification or code of practice (ISO/IEC). Technical regulations are basically the way legislation is enforced and they support the requirements of the legislation. When a standard is declared mandatory, it becomes a technical regulation.
Who’s Responsibility? Technical regulations are the responsibility of governments and of governments alone. Governments have not only a right but also an obligation to intervene in the market place with the aim of protecting their citizens against products or services that may cause harmful effects. Technical regulations are the reflection of the sovereign rights of countries; and governments adopt various approaches when imposing technical regulations. In any given area, they are concerned primarily with product or service requirement specifications and the conformity assessment regime to apply while focusing on consumer safety, health, prevention of fraud/deceptive practice and environmental protection.
What Aspects are covered? Technical regulation covers two equally important aspects (1) Product/service characteristics specified in a standard that product or process or service have to be in conformance with (2) Administrative procedures for conformity assessment (testing, certification, and inspection), approval and sanction that suppliers and authorities have to follow.
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What is the purpose of imposition? Technical regulations are imposed by governments for the purpose of addressing public concern on issues related to safety, health, environment and the government concern to suppress deceptive practices; Technical regulation aims at protecting the consumer right without creating a technical barrier to trade and prevention of market failure. As economy expands and the expectations for a better quality of life increases, there is a greater demand for effective implementation of technical regulations by governments. Governments must ensure that the objectives of technical regulations are being met.
The difference between Standards and Technical Regulation A product standard sets out specific characteristics of a product such as its design, dimension/size, shape, functions and performance, or the way it is labeled or packaged. Technical regulation requires strictly the assurance of a product conformance to the standard before it is put on to the market. The difference between standard and technical regulation is thus mainly the difference in compliance, as compliance with regulation is legally binding. Technical regulations are by their nature compulsory/mandatory, while standards are voluntary as they are the result of the consensus reached with the concerned stakeholders.
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The WTO-TBT Agreement takes into account the existence of legitimate divergences of taste, income, geographical and other factors between countries; and It accords to Members a high degree of flexibility in the preparation, adoption and application of their national technical regulations “No country should be prevented from taking measures necessary to ensure the quality of its exports, or for the protection of human, animal, and plant life or health, or the environment, or for the prevention of deceptive practices, at the levels it considers appropriate“ (Article 2.2). However, members’ regulatory flexibility is limited by the requirement that technical regulations «are not prepared, adopted or applied with a view to, or with the effect of, creating unnecessary obstacles to trade».
... benefits of standards reduction of trade barriers
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Increased regulatory policy can be seen as the result of higher standards of living worldwide, which have boosted consumers’ demands for safe and high-quality products, and of growing problems of water, air and soil pollution which have encouraged modern societies to explore environmentally friendly products. Non-discrimination, transparency and non-trade restrictive regulatory measures are what need to be addressed by national governments in order to meet with the requirements of the Agreement.
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What Does the Practice require? A “Good Regulatory Practice”(GRP) requires a system, designed and coordinated aiming to protect and improve the health, safety, and well-being of the people and to protect the environment.” It seeks to improve the performance of the economy without imposing unacceptable or unreasonable costs on the society.
Need reviewing and updating? Yes, because…… Regulations that are outdated or poorly designed to achieve their intended policy objectives contribute to inefficient and ineffective regulatory arrangements and achievements. A regulatory system that is centrally coordinated will help in promoting the harmonization of National Technical Regulatory Framework and in promoting the alignment of the national system with international system (Good Regulatory Practice, GRP). Such approach of technical regulation would in turn help to promote the required transparency, predictability and non-discrimination as pin-pointed in the WTO-TBT agreement. A Good Regulatory Practice is believed to address the WTO-TBT Agreement requirements for which it is also beneficial to the socio-economic development of a country.
The Benefit ? Appropriate regulatory regime benefits, especially the developing economies through (1) promoting the protection of life, environment, etc (2) stimulating higher quality domestic production (3) export promotion (4) investment attraction (5) strengthening fair competition which will generally account to trade fairness, growth and poverty reduction.
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A unified national approach in the development, promulgation, implementation and review of technical regulations is highly recommended in order for economies to achieve good regulatory practice that will underpin their socioeconomic development and economic integration. The following Model (“Best Practice Model�) is generally recommended to adopt especially by the developing countries in order to create an effective national regulatory system from which they could substantially benefit.
Policy Impact Assessment Legislation Technical regulation Product/process Characteristics
Technical Requirements
Administratives procedures
Regulator
Conformity Assessment
Building blocks of a technical regulatory framework
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Sanctions
Technical regulations reflect the ability of a government and the society it serves; From trade (WTO-TBT Agreement) perspective providing countries with a uniform set of principles that could be applied to achieve an optimal balance of rights and obligations is the major concern attached to technical regulations Improvement of technical regulatory quality would rather sustain and competitively expand economies than creating unnecessary barriers to trade, economic efficiency and investment. Shift of focus from deregulation to regulatory reform is the current global trend. Coordination at inter ministerial or interagency level prevents duplication, inconsistency and incompatibility of technical regulations. Applicable international standards will be reviewed for adoption as the basis for technical regulations as the first option; In many sectors voluntary standards provide an important foundation for technical regulations. Regulators participate in the voluntary activities for consensus standards development where a possibility exists that these standards will be used as basis for technical regulations. Participation of stakeholders, including regulators, in the technical committee activities while developing or reviewing a standard for adoption is recognized as an integral part of the process for the appropriateness and effectiveness of a technical regulation.
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The project is funded by the European Union at the request of the ACP Group