Promoting standards
Despite being a regional leader in enforcing standards, Sri Lanka still has a long way to go before reaping the full benefits of having its exports globally accepted. Studies have shown that a country can add as much as 1% to its GDP by proscribing to international standards.
Daily FT met up with International Standards Organization (ISO) Secretary General Robert Steele to get his views on what steps Sri Lanka needs to take to make the cut. Following are excerpts of the interview:
By Uditha Jayasinghe
Q: What role does the ISO play nationally and internationally?
A: We have 160 members and part of my job is visiting key members and Sri Lanka Standards Institute (SLSI) and other stakeholders is one of the key partners. We help them use international expertise to develop their standards.
The idea is that international standards are helpful for any country to develop their industries, particularly exports, in the Sri Lankan context hopefully promoting more exports and imports.
For example one of the discussions I had was on Sri Lanka’s standards on tea, which is a major export, and could that be promoted as an international standard so that Sri Lankan tea is able to be sold in different markets without trade barriers.
Q: How can one make a local standard international?
A: Basically the SLSI would offer us their national standard to be adapted into the international system. That will be voted on by our members and if they agree a committee of global experts would be formed and if they too agree then it will become an international standard. It’s a pretty straight forward process.
Q: How long would the process take?
A: Depends on how complex the subject is, if you take an example like tea probably between one and three years. What the ISO does is we present standards but it is up to the market to decide whether or not they want to pick up these standards. We do not enforce them on a legal platform. That only happens if regulators in the country decide to adopt standards that we develop and that happens from time to time.
Q: Is Sri Lanka genuinely interested in taking their standards international?
A: Yes they are and particularly looking at some of Sri Lanka’s major exports and seeing some of the national standards for those key products could or should become international.
Q: How should Sri Lanka go about achieving this goal?
A: I think there are two parts to that question. First part is that if you have standards that you believe are relevant and need be put in the international sphere then you need to take them and look at what are your major exports and therefore are there any impediments to trading in those international markets. Then work with our relevant committees, we have over 200 committees with a wide variety of subjects.
The other issue is that it would be good for Sri Lanka to get more involved in the international standards system itself because there are some overarching standards, which people use and start to rely on them.
Q: How can we link with international standards? How can Sri Lanka influence them?
A: International standards are of course maintained internationally so the technical committees that would look at the standards would take responsibility to maintaining and updating that standard. As time goes on Sri Lanka should be part of that technical committee so that they can promote that to the world.
Q: Recently Sri Lanka had a huge problem with a cement shortage.The government imports were done with a company that was banned by the local SLSI. There were concerns that the SLSI lost credibility. There was no coordination between the SLSI and the ministry to import cement. How should the SLSI deal with this issue?
A: I am not aware of this and it is not right for me to comment on a specific issue. But, as a general principle I think if the governments follow international standards then conformity to them is really important. Because it opens up trade and gives choice, if you are looking for quality.
Cement is an important commodity, you don’t want buildings to fall down or bridges to collapse. There are huge public safety issues as there are supply issues. Government agencies should adopt and use international standards. If you charge a government agency with the duty of monitoring standards then you should abide by its decision.
At the international level this is not an uncommon issue. Government agencies and ministries need to be joined up to communicate with each other and the use of international standards so that a larger market is available for imports and exports.
Q: Should Sri Lanka’s standards be more legally enforced?
A: Speaking broadly international standards allow good inspection and modern legislation always helps because it gives the chance for these standards to be locked in place. Many countries today also have very strong obligations from the World Trade Organization (WTO) for example; they must abide by the technical barriers to trade agreement, which means that you should not create unnecessary barriers to trade. So a country must balance between making sure that it is open to trade but on the other hand maintain the safety and health of its citizens.
Q: Do you think enough businesses are tied in with SLSI?
A: No I don’t but this is a universal situation. Most counties don’t, either because the industry does not understand or doesn’t make best use of the local standards institution – but they should. Use of them adds to the bottom line. SLSI and ISO should work harder to send this message in a language that industries understand.
In fact businesses should approach SLSI because it makes a big, big change. It can add as much as 1% to the GDP of a country and I would urge ministries and government to get more involved as well.
Sri Lanka is actually a regionally leader in promoting standards. Sri Lanka can use standards to join trade blocs. ISO grants each member one vote so Sri Lanka can make a significant impact by getting involved. It is not the size of the country but the size of the argument that counts.
Q: What should the criteria be for a company to be banned?
A: I think it’s very important for a standards institution to have a base of international standards that have been developed across a broad consensus involving industry, government and consumers. Another thing that is needed is a tool box around conformity.
In ISO we look at how you prove conformity to the standard so industries or companies prove conformity. They do that by proving both the competence of the people that are developing products and of the product itself. There are international standards around conformity that should be seriously considered. Developing standards and looking at enforcement of them are crucial steps.
Q: Implementing standards with broad consensus is very challenging. What would you suggest as the best ways to do this?
A: Forge partnerships. The way that ISO does it is we get experts from all of the countries interested, which can be upto160 countries, then look at all key stakeholders including government, consumer groups, non-government organisations, academia and industry. Get them in a room and get them talking.
Within a country a similar group should be established and they can talk to people at international level. I think in terms of implementation it’s very important for the standards body in the country to have good linkages with industry.
Q: How can standards be implemented in small and medium enterprises?
A: Typically small and medium industries are not involved in the standards process or if they are they also have a whole lot of other things that they need to concentrate on so standards tend to drop down the priority list. This is where chambers of commerce can play a huge role; they need to show the benefits of following standards and it can be done in seminars or other working groups that they have around the country to get that message out.
A good example is a recent study that we published on energy management, a very hot topic based on climate change and making businesses more efficient. We used seminars to show 20%-30% of energy savings and that results in a significant profit for companies.
Q: Some companies may feel that standards are too complicated to obtain. So how can this process be made easier?
A: Two ways. One is the distribution of knowledge and workshops can be offered by the standards agencies. ISO regularly educates its members on developments in international procedures. Another is through the internet, most people are connected now and they can download and look at stuff when they want to.
The second thing is that the cost of the standard and the benefits of having it are clearly outlined. So this comes back to the earlier point of communicating the benefit of the standard.
ISO members have been developing case studies showing how standards create value for businesses. We are just starting a similar case study in Sri Lanka and we think that it will be very exciting.
A company in Peru has found out that 70% of its earnings come because if follows standards, such messages send a strong message of benefits.
Q: Other than tea what are the industries that should focus on international standards?
A: It would be good to do a stock take of major exports and deicide, for example spices, outsourcing IT and BPO industries. How can Sri Lanka as a country use standards as a competitive advantage? In fact ISO has chosen a Sri Lankan IT company to document all its data and have it available in web form, we are very impressed.
ISO has also been creating a document on social responsibility and what is really meant by it and Sri Lanka has been a strong partner in this process.
Q: How can Sri Lanka use standards to market itself internationally?
A: The more you adhere to international standards the more globally recognised the products and services will become. This might sound trite and theoretical but next week at the ISO General Assembly will be held and part of that involves various presentations.
We will have a presentation by the Director General of the WTO and in that he makes the point that use of international standards by a country really helps them open the world to their products and services. In time they can use these standards to protect their people. It really opens up the economy and encourages best practice. I think there is much post-war optimism in Sri Lanka and a huge sense of energy that standards can help promote.
Q: What about standards for intra-regional trade?
A: I think you need to have regional standards. Start with international standards and then tweak it where necessary. People need to focus on the long term prospects on their businesses. It will help develop trade in other countries such as South America, Africa, Russia and China so that your future is more secure.
