Financial Times

Former senior official accuses colleagues of corruption
Crooked happenings in SLS Mark scheme
By Dr. Srilal de Silva
A recent statement from the Sri Lanka Standards Institution (SLSI) pertains to the quality of four items, and a virtual warning to the consumer, which were manufactured by the virtual market leaders in these industries. This is bound to receive the attenion of those concerned with the quality of consumer products as well as the industry. These include two bottle water producers -- American Premium bottle Water Systems (Pvt.) Ltd., and Speed, one-cement blocks - AMTRAD, and also carbonated beverages -- Ceylon Cold Stores Ltd.).
It is important to note that these four products carry the SLS Mark issued by SLSI itself, which according to the SLSI marketing strategy gives a ‘third party guarantee to the consumer’. In addition to SLS Mark, Ceylon Cold Stores Ltd. carry ISO 9001:2000 and also HACCP (Food Safety) certification from SLSI which further guarantees consistent quality and safety of the products manufactured by them.

It is interesting to note that this warning to the consumers also came from the same institution which is expected to maintain a rigid control over the quality of the products certified under the scheme.

What is questionable is that these four products are well accepted by the respective consumers and no genuine customer complaints have been made against these products. In the event of a breakdown of the system or detection of a serious non conformity, the usual procedure involves a detailed investigation into the situation jointly with the industry and taking corrective action. Any further continued failure will lead to withdrawal of the SLS Mark and keep the public informed usually through a press notice.

While allowing it (firms) to carry the mark and informing the public of quality problems is an unacceptable situation and contrary to the procedures that are to be followed.

The SLSI has also failed to take any action on a large number of cement block manufacturers who sell substandard products despite the fact the standard is mandatory. It is also noted that over 200 bottle water manufacturers are operating with only 20 percent having the SLS Mark which is now mandatory for this product.

The present approach of SLSI could send a message to the industry that it is safer to be outside the scheme as those who are having the mark become vulnerable and any defect will be publicized, whereas the consumer is totally unaware of the problems related to products which do not carry the mark.
This action certainly will affect the reputation of these companies and could lead to serous losses. This is a harassment to the industry rather than they becoming partners for improvement.

The objective of the SLS mark is that it is a ‘independent third party guarantee of quality’ and as such consumers are provide some confidence and ‘look for products carrying this mark’. The above news item will completely place the consumer in a dilemma on the quality of products ‘carrying the mark’, and I am confident this will have a serious negative impact on the ‘confidence and reliability’ of the SLS Mark.

The SLS Mark which was essentially a voluntary scheme and industry was expected to obtain the mark and use it as marketing tool for promoting the products over those which doesn’t carry the mark. Till 1993 despite the fact that this is one of the ‘showpiece’ schemes of the SLSI, it didn’t receive any attention of the industry and lost all its glamour. In 1993 there were only three applications received by SLSI for processing.

A major shift in the approach for the scheme came in 1993 making it mandatory for items, mainly imported, to ensure a level playing field for both imports and locally manufactured products.

This gave a wide boost to the scheme as consumers had a wider choice and the scheme also gained publicity. This resulted in around 400 permits being issued from 1993 to 2000 and the 500th permit was issued to ‘Samudra’ brand cement in 2000. This also became a vital income source for SLSI as a large amount of fees is levied ‘which is linked to sales’.

As this became a lucrative way of raising revenue for the SLSI, this approach is abused and gradually more items were brought under ‘mandatory SLS Mark’ with the latest being bottled water. The number of permits issued on a voluntary level remains low again showing the limited interest of the industry.
The SLSI generates a direct income of around Rs 20 million direct from the fees and a further income of around Rs 10 million from testing the products connected with the scheme with another Rs 5 million in connection with other charges such as transport etc. The total income is around Rs 35 million. With around 400 permits in operation each permit costs the industry an average of Rs. 90 000 per annum which amounts to an indirect tax.

While acknowledging the fact that most of the income is generated from large industries such as cement and steel, it is obvious that the consumer will be bearing this additional expense. Considering other expenses involved such as infrastructure, training and testing facilities this is now far beyond the capability of SMI’s.

The SLSI press release indicates its approach to increase income as no real action is taken in a situation where they claim that these products are of questionable quality. Or there could be undisclosed reasons, which needs independent investigations. The other major danger is the quality of permits issued as it a well own secret that, in many instances consultancy services are offered to the industry either officially or unofficially and subsequently the permits are issued.

This is a violation of international procedures for granting product marks for which the guidelines are issued in ISO Guide 65. This scheme virtually caters to bigger industries, whereas SMIs are hardly in the scheme because the same criteria is used for all sizes and levels of industries. Criteria based on health, safety and environmental issues could have made this scheme more acceptable to all levels of industries.

The bottom-line is that the SLS Mark scheme had become lucrative business both to SLSI and also officials at the expense of the consumer. This could be clearly seen if an independent survey is conducted for the quality of SLS permits given to bottled water which has now become the main activity under the scheme.

Some efforts made to upgrade the scheme to fall in line with international procedures which could have even be accredited were shelved obviously for undisclosed reasons. This could have made the scheme more transparent with auditing by external auditors of the accreditation system.

It is time that the government intervenes and introduces adequate measures to make this scheme useful to the industry as well as to the consumer.
The writer is a former Deputy Director General, Director (Quality Assurance) of the Sri Lanka Standards Institution (SLSI) and presently the President of Sri Lanka Association for Quality (SLAQ) and the Chairman of Quality International Certification Service, (Private) Limited (QICS). He is also resource person for many international agencies such as WTO, FAO, INFOFISH, APO and ASQ.

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