Challenges of Standards & Conformity Assessment

Introdução

With the advent of WTO regime in 1995, the tariff and quantitative barriers in international trade have gone down and what are called non-tariff barriers have come to occupy the centre stage. The major barriers among nontariff barriers are acknowledged to be those related to standards and conformity assessment.

The WTO regime recognizes that the governments have a right to protect their populace on grounds such as health and safety and therefore can impose product requirements by law – called technical regulations or sanitary and phytosanitary (SPS) measures in agrifood sector. In fact, it prescribes under the Agreement on Technical Barriers to Trade, commonly called the TBT Agreement, grounds such as health (food, drugs, medical devices), safety (toys, electrical appliances, LPG cylinders), environment (emission levels in vehicles, environmental laws, lead content in paints), deceptive trade practices (adulteration in cement or gold jewellery) and national security (telecom equipment) for regulation i.e. product requirements imposed by law.

This has led to rise in the number of technical regulations, national and international voluntary standards, and conformity assessment procedures which apply across all sectors to products, services, processes, management systems or personnel. Generally, these are introduced to meet the legitimate requirements of quality and safety that consumers, businesses, regulators and other stakeholders demand in the case of goods and services, whatever their country of origin. It is vital, not only for individuals and organisations but for national and international economic health, that products and services can cross borders to meet global demand without causing undue risk to the health and safety of individuals or the environment.

The WTO regime has thus created two distinct sectors: sectors amenable to Technical Regulations/SPS measures and sectors driven by Standards (which now are defined to be per se Voluntary). Technical Regulations/SPS measures are the responsibility of the Government which are made in the interest of the country and its people whereas Standards, which are voluntary, are driven by market, industry and other stakeholders.

Any business, including startups, therefore need to not only be aware of the regulations and standards which apply to the sector in which they operate but also assimilate these in the product or service at the design stage itself so that their product or service meets the regulatory requirements, which are mandatory, and standards prevalent in the market to survive and succeed.

REGULATIONS

Technical Regulations lay down requirements for product characteristics or their related processes and production methods, compliance to which is mandatory. Regulations have to be the same for imports as well as locally manufactured goods based on the principle of national treatment, so that imports are not blocked due to differential regulations. WTO encourages countries to adopt international standards as Technical Regulations/SPS measures so as to avoid barriers and most developed countries adopt International Standards as Technical Regulations/SPS measures. Standards higher than International Standards can be adopted as regulations by giving proper scientific justification and this provision is currently utilized.by many developed countries increasing the challenge for our industry.

First and foremost challenge is to comply with domestic regulations depending on the sector one operates in. Typical examples are sectors such as Food, Drugs, Electrical Appliances, Electronics and IT Goods, Cement, Telecom products and Steel products. In many sectors, regulations are non existent in India but currently lead by the Department of Commerce, an exercise is on to bridge this deficit in regulations. Sectors such as Machinery, Toys, Medical Devices, Personal Protective Equipment, and Chemicals are in the process of being regulated. As a thumb rule, if one’s product has health or safety implications, he should expect to be regulated.

The next challenge for the Indian industry is to comply with regulations of the importing countries if it wishes to export. This challenge is compounded in some sectors such as Food and Pharma, where domestic regulations are short of International Standards or Machinery or Medical Devices or Chemicals where India is currently unregulated. Goods will be denied entry if these regulations are not complied with and typically these are more stringent than domestic regulations requiring extra effort by the Industry for compliance. While Pharma, Automotive and Seafood sectors are successful examples where India has accessed global markets, industry in most other sectors struggles to comply with the regulations of the importing countries.

VOLUNTARY STANDARDS

The next challenge is that of voluntary standards prevalent in the market. Standards provide the rules, guidelines or characteristics for products or related processes and production methods and compliance to these is voluntary as opposed to compliance to Technical Regulations which is mandatory.

As normas voluntárias são normalmente desenvolvidas pelos Organismos Nacionais de Normalização que são maioritariamente governamentais nos países em desenvolvimento e, no entanto, as normas por eles desenvolvidas são voluntárias. Na maioria dos países desenvolvidos, os organismos de normalização são organismos privados com uma forte ligação à indústria. O Bureau of Indian Standards (BIS) é o organismo nacional de normalização da Índia, com mais de 20 000 normas, e qualquer empresário que crie uma empresa é aconselhado a analisar as normas BIS disponíveis para o seu produto ou serviço como primeiro ponto de referência, se não se tratar de um sector regulamentado.

In many sectors, even in regulated sectors, buyers demand certifications to these standards and therefore it becomes necessary for Industry to adopt these. Voluntary Standards include international standards of the International Organization for Standardization (ISO) and International Electrotechnical Commission (IEC) such as ISO 9001 for quality management systems (QMS), ISO 14001 for environment management systems (EMS), ISO 45001 for occupational health & safety management systems (OHSMS), ISO 27001 for information security management systems etc and these are a growing tribe.

There is another category of what are called the Private Standards, now increasingly being called Voluntary Sustainability Standards, which are developed by stakeholders like retailers, industry, non governmental organizations etc. These standards may offer protection against liability which is important even as global sourcing grows and/or they may address concerns about social issues such as child labour, fair wages, workplace safety etc. or environmental compliance or even food safety. Some examples of such standards are Global G.A.P for agri produce, Forest management (FSC/PEFC) for legality of wood and sustainable forest management, WRAP for Textiles, BRC/IFS/FSSC 22000 for Food and other Social Standards like SA 8000.

Some private standards are also industry driven like automotive sector (IATF 16949), TL 9000 in Telecom, AS 9100 in Aerospace which are driven by the need to upgrade suppliers to major players and OEMs in these sectors and if one operates in these sectors, they have become almost obligatory.

There are Indian schemes available now e.g IndGAP or IndiaHACCP by QCI or Forest management certification by NCCF at much lesser cost and if any of these are benchmarked internationally (e.g. NCCF), they facilitate exports as well.

CONFORMITY ASSESSMENT

Meeting the regulations and standards as described above is however not enough. Industry has to gear up to face challenges beyond compliance to Technical Regulations/SPS Measures and Standards. It is no longer enough to merely comply with these but the manner of demonstrating compliance to these is also equally important. There are a variety of conformity assessment models or routes available starting from the least stringent one - self declaration of conformity (SDoC), used extensively by the European Commission in its regulations for CE Mark to the intensive third party assessment of the kind BIS uses for example in compulsory certification of bottled water or cement etc.

Conformity assessment is growing in importance both in regulated as well as voluntary sectors. A WTO study in 2016 of Specific Trade Concerns (STCs) raised in the TBT Committee indicated that only 30% of the STCs are based on Standards while 70% of the STCs are on Conformity assessment procedures. This is understandable because more and more countries today are adopting International Standards and standards then cease to be an issue; however their Conformity assessment procedures differ and will continue to differ since there is not a single model internationally accepted.

Conformity assessment is demonstration that specified requirements relating to a product, process, system, person or body are fulfilled and includes activities such as testing, inspection and certification, as well as the accreditation of conformity assessment bodies.

A typical example of how compliance to International Standards alone is not enough and that the conformity assessment process is equally important , is the case of Tyres manufactured in India, complying to International Standards, regulated in India by BIS and yet not accepted by a small country like Ecuador, only because Ecuador has prescribed a certificate of conformity from a Certification Body accredited by the National Accreditation Body of the country of origin, which in this case happens to be the National Accreditation Board for Certification Bodies (NABCB) and BIS is not accredited by NABCB. Similarly, several other products are not going to Ecuador for the same reason – absence of Certification Bodies accredited by the National Accreditation Body.

RECOGNITION OF CONFORMITY ASSESSMENT

In order that inspection, certification or testing of one country is recognized by another country, it is necessary that there is a system whereby there is confidence in the conformity assessment system of each country. Such confidence is generated through the process of accreditation based on international standards. This has been provided for in the TBT Agreement, as follows:

“6.1.1 adequate and enduring technical competence of the relevant conformity assessment bodies in the exporting Member, so that confidence in the continued reliability of their conformity assessment results can exist; in this regard, verified compliance, for instance through accreditation, with relevant guides or recommendations issued by international standardizing bodies shall be taken into account as an indication of adequate technical competence;”

ROLE OF ACCREDITATION

As the importance of conformity assessment has grown with the regulators increasingly relying on independent, third party inspection and certification bodies or labs to carry out inspection/certification/testing on their behalf and number of voluntary schemes coming up globally who needed third party bodies to scale up adoption of their standards, a need arose of assuring competence of conformity assessment bodies and facilitating cross border acceptance of test reports, inspection reports and certifications.

This has led to the development a system of accreditation to establish the technical competence of inspection/certification bodies and labs for which ISO has laid down a number of standards.

A voluntary system of accreditation has developed worldwide under the aegis of the International Accreditation Forum (IAF) for certification and International Laboratory Accreditation Cooperation (ILAC) for inspection and testing and India responded to these developments by setting up a national accreditation system in the form of the National Accreditation Board for Certification Bodies (NABCB) and the National Accreditation Board for Testing & Calibration Laboratories (NABL). NABCB is undertaking accreditation of certification and inspection bodies as per applicable international standards while NABL is devoted to accreditation of testing, calibration and medical laboratories and related bodies. NABCB is a member of both IAF and ILAC and NABL is a member of ILAC and both have achieved international equivalence for their accreditations.

ISO 17000 defines accreditation as “third party attestation related to conforming assessment body conveying formal demonstration of its competence to carry out specific conformity assessment tasks”.

Accreditation is generally carried out as per common international standards of ISO, some of which are listed below:

• Laboratories as per ISO 17025
• Inspection Bodies as per ISO 17020
• Product (which includes Process) certification bodies as per ISO 17065
• Management systems such as ISO 9001 certification bodies as per ISO 17021-1

EMERGING GLOBAL SCENARIO

In view of the foregoing, it is clear what the emerging technical infrastructure would look like and roles are becoming clearly defined as follows:.

• Government at the apex to enact legislation and make policies;
• Regulatory bodies to enforce the law on day to day basis Regulators can be sector specific like food, drugs etc.; e.g. FSSAI, CDSCO in India;
• Standards bodies to make Voluntary Standards and may provide standards to regulators also; BIS, TSDSI in telecom, IRC for roads and bridges
• Accreditation bodies to confirm the technical competence of Conformity Assessment Bodies (CABs); NABCB and NABL in India;
• Conformity assessment bodies to support regulations, voluntary standards and quality assurance by verifying conformity to various standards, regulations etc;
• Manufacturers and service providers to provide goods and services which are reliable with global acceptance, and
• Common consumers, who are the recipients of goods and services.

Conclusão

In the wake of what has been described in earlier paragraphs, the industry, including the start ups need to follow as below:

• Identify if the sector you operate in is under regulations or potentially could be regulated – if yes, identify the regulator and legal requirements set by it.
• Should you be in regulated sector and wish to access global markets, its safe to go for international standards available which would meet most regulations of importing countries
• Even in regulated sectors, identify if there is market demand for any voluntary standards like ISO 9001 or ISO 13485 for medical devices or ISO 22000 for food safety or private standards
• Adopt International Standards or internationally acceptable (e.g. private or sustainability standards) wherever they exist and in their absence national standards in the voluntary sectors
• Seek conformity assessment from inspection/certification bodies or labs duly accredited to facilitate international acceptance preferably by NABCB/NABL, given that number of unauthentic bodies especially in certification operate in India