ANNEX
Letter from the Senior Executive Officer, LACOTS to
the Clerk of the Committee
You will be aware that LACOTS has previously provided comments
on consultation in 1993 and 1996 that culminated in consideration
by the Parliamentary Deregulation Committees in 1996 to which
LACOTS gave evidence.
LACOTS has always supported the principle of self-verifiction
by manufacturers provided there are appropriate safeguards and
had considered this might be extended to petrol pump repairers
and installers only if appropriate extra controls were included.
Accordingly we had welcomed the inclusion in the revised proposals
of a notification procedure to local authorities of work carried
out by repairers and installers and have recommended the provisions
are enhanced to ensure the system is demonstrably effective and
efficient. We also suggested that if there were continued problems
in applying the proposals to any particular business sectors there
may be merit in delaying the application of the proposals to those
sectors and introducing the proposals in a staged approach to
enable other sectors to self-verify.
As you highlight in your letter of 12 June 1998, LACOTS has reservations
on the revised proposals including those on which you requested
additional comments to which we provide our particular comments
below:
1. Quality Systems: General
1.1 It is the significant elements of quality systems and
metrological control that must be specified in the proposals rather
than the name and reference of a standard. If sufficient detail
is not included in the proposals, any change in philosophy, policy
or even personnel involved in the issuing of approvals could affect
the conditions to which approvals to self-verify are subject because
of the scope for different interpretation. Additionally, any significant
elements that are not included within the legislation itself may
not be considered in the future to be part of the compulsory controls
both by the organisation issuing approvals and should the question
of status arise during any court proceedings. It is important
that approval conditions are transparent and accountable no matter
which organisation has assessed a company's quality system. For
example LACOTS has noted that from the Explanatory Memorandum
points 107 and 162 that sub-contracting of the self-verification
and pre-test stamping functions may be envisaged. LACOTS is concerned
that this is a new consideration to which appropriate consumer
and business safeguards must be secured, particularly if this
is considered in relation to the "user" of equipment
being sub-contracted.
1.2 Reliance on ISO 9003 is one standard that has been specified
and LACOTS is concerned that this would not cover the production
process. The use of this standard would hinder the assessment
of whether a quality system had been established that would ensure
a product complies with legal and other metrological controls.
However, we note and accept that the Minister intends to link
its use to the simplest of equipment.
1.3 Any quality system registered by an accredited body is
assessed to ensure the company is actually doing what it declares
that it is doing and does not necessarily ensure the quality of
the end product nor that it complies with any legal or other metrological
controls. For this purpose it is essential that an inspector of
weights and measures with the appropriate quality assurance experience
is involved in the audit team as an expert adviser to the lead
assessor as per the implementing arrangements for Directive 90/384/EEC.
The role of the officer should include the assessment of the overall
capability of the system to achieve the relevant metrological
legal and approval conditions and requirements and should not
be restricted to only metrology specific areas of the quality
system such as calibration.
1.4 Under the proposals the accredited bodies will in effect
be performing a new quasi-regulatory role. Clear help and guidance
must be given to ensure that these bodies are comfortable with
reporting metrological or approval condition non-compliances to
Government. This would be a deviation from their more usual practice
of respecting client confidentiality and working with the client
to improve the system.
1.5 The accredited bodies are businesses working within a
competitive market and should be given a mechanism to ensure a
level playing field with their competitors. This could be achieved
largely by specified minimum standards for the purposes of legal
metrological and approval control, eg a minimum frequency of audits.
2. Quality Standards: Overseas and Domestic
2.1 LACOTS fully appreciates and understands the reason why
the proposals have had to be revised to enable overseas companies
to take advantage of the proposals. However, it has been noted
that this is in advance of an EU harmonised mechanism that will
be provided by the Measuring Instruments Directive presently under
development.
2.2 We understand that the standards applied to overseas and
domestic companies will be the same. This presumes sufficient
detail is included in the proposals to ensure practical application
is the same regardless of the geographical location of the company.
There will be resource implications for accredited bodies deploying
personnel for audits involving extensive and/or long-haul travel
which may add to a case for specified minimum service levels including
audit frequencies to ensure a level playing field between accredited
bodies.
2.3 The most critical difference in the treatment of overseas
and domestic markets is the lack of jurisdiction for local authorities
overseas and the lack of sanctions through offences that could
apply to overseas companies. The domestic business is disadvantaged
by this. Overseas companies will not be subject to random inspections
by trading standards officers who could have established whether
a product continues in practice to be produced lawfully and in
line with approval conditions. The importance of inspection was
recognised by the inclusion in the proposals of the specific power
for local authorities to enter and inspect premises where equipment
was being self-verified rather than restricting this power to
only those premises where equipment was actually possessed or
in use for trade. Overseas companies will not be subject to enforcement
action and court proceedings where serious infringements take
place. Punitive sanctions will be restricted to removal of the
company's approval to self verify. Domestic companies can however,
in serious cases, be taken to court when they have committed offences.
Both inspection and appropriate sanctions are essential to underpin
the proposals and secure public protection and fair trading.
2.4 We remain concerned that there will be significant difficulties
in preventing particular products, such as failed batches of glassware
intended for use in public houses, from being placed into use
in the UK. At the present time such products are tested by batch
and verified by a UK trading standards officer so control is exercised
before a product is in use at retail level. At retail level it
is extremely difficult, without details of the original batch,
to assess whether a product is a legitimate failure of a batch
(of which there may be a few) or is a failure from a failed batch
(of which there may be many). A requirement that product is traceable
to batch is essential. Overseas companies who are able to take
advantage of the absence of jurisdiction for a local authority
to inspect their premises will be able to 'dump' failed batches
in the UK with much less chance of detection than domestic companies
even if there is a requirement that a retail product must be traceable
to batch.
2.5 On a related matter, LACOTS understands that the pre-test
stamping provisions have been restricted to approved self-verifiers
because of the reduced ability to retain control over inspectors
marks at overseas locations. LACOTS also appreciates that there
is logic, in some cases in permitting the verification mark to
be incorporated into the product prior to the testing that would
establish whether it would pass as fit for use for trade. However,
the proposals permit a self-verifier to take advantage of the
pre-test stamping provisions and do not allow the same route where
local authority verification is used. The Minister has recognised
that to remain competitive capacity measure manufacturers will
probably seek to obtain approved verifier status. Although we
note that there may be significant incentives for manufacturers
to retain approved verifier status and we understand the reasons
for restricting pre-test stamping to self-verifiers we remain
concerned on two particular points. Firstly, local authorities
who have to provide a verification service will be competitively
disadvantaged as capacity measure manufacturers will stop using
their verification service. Secondly, any manufacturers who wish
to or cannot obtain approved self-verifier status will be significantly
disadvantaged by being forced to use a local authority verification
service involving the less commercially attractive "double
handling".
2.6 On another related issue, LACOTS welcomes the provisions
that would recognise test results from competent third parties
within the EEA and prevent duplication of testing in the UK before
passing as fit for trade by an inspector. LACOTS does not question
the competence of overseas third parties but has recommended the
inclusion of similar wording to that used in other legislation
in order to avoid doubt that an inspector who suspects, for example,
that equipment has been adjusted after it has been tested, could
refuse to accept test results. This would be particularly important
if an inspector's action were questioned in any legal proceedings.
We acknowledge that the Minister has stated that this is not necessary
and the proposals would not compel inspectors to accept test results.
3. Implications for Local Goverment
3.1 LACOTS has set up a task force to further comprehensively
consider the effect that the proposals will have on local authorities
and to quantify the resultant funding provision that has been
recognised by Government. LACOTS will be able to provide details
of its conclusions to the Committee during July 1998 should that
be required. Government funding provision to local government
to lessen the difficulties created by the extra burdens and higher
unit costs created by the proposals may enable Chief Officers
and Heads of Services to present a case to their elected members
for offset funding to be allocated to their service for this purpose.
3.2 The proposals must not undermine the ability of local
authorities to maintain existing levels of public protection and
fair trading. A critical part of the mechanism for providing these
safeguards is the unannounced inspections that local authorities
may carry out at self-verifiers premises and where self-verified
equipment is in use. Local authorities are also required by statute
to provide a verification service and will need to ensure that
companies who wish to or need to can have access to a local authority
verification service and the appropriate infrastructure would
therefore have to be maintained.
3.3 The proposals will remove verification income from local
authorities and the proportion of verification income that is
removed may be substantial. Although local authorities will endeavour
to make savings as a result of a reduced verification role, such
as might be achieved through regional arrangements, there may
also be significant transitional costs, not least in any necessary
redundancies. This will particularly effect those local authorities
with a large manufacturing base subject to verification in their
area. The removal of significant local authority verification
income will also increase the unit cost associated with maintaining
the necessary staff, premises and equipment etc. for a verification
service to local businesses who choose or need to use the local
authority facility.
3.4 Local authorities have been subject to continual resource
constraints and have obviously looked to maximise any savings
and efficiencies. One efficiency has been for metrological inspection
work to take place at the same time as a verification visit where
possible. This approach minimises burdens on business as well
as contributing to economic efficiencies. The removal of verification
income which assists on a cost recovery basis the travel to the
site, maintenance of equipment, etc, will have an impact on local
authority resources and could effect inspection levels. The overall
reduction in funding (in real terms) means that this small and
vital service may be badly affected in the absence of appropriate
funding.
3.5 It is essential that inspection levels are maintained
to underpin present consumer and trade safeguards but also as
a foundation for the vital inspection and market surveillance
roles that will arise from the Measuring Instruments Directive.
This Directive is under development to provide routes for all
equipment to be placed on the market and put into use. It is also
envisaged that at least until such a stage is reached where local
authorities can risk assess self-verification, local authorities
may wish to treat these companies as a higher risk subject to
an increased inspection frequency. It is also likely that inspection
levels will have to increase to take account of any extension
of the proposals to sub-contractors. Local authorities will also
need to assess and respond where necessary to information received
as part of any notification procedures. This is essential to ensure
consumer protection and fair trading but also creates extra burdens
on local authorities introduced by these proposals.
17 June 1998
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