The committee incorporates issues related to the development and implementation of quality standards, environmental regulations, labour regulations, Intellectual Property Rights, and deals a lot with legal issues.
Position on Standardisation MarkThe Standardisation Mark (S-Mark) scheme is a product certification scheme which operates in line with the government functions of developing quality standards, ascertaining compliance with such standards, and controlling the application and use of standardisation/quality mark and distinctive marks.
In Kenya, the S-Mark of quality is only applied to a product after the Kenya Bureau of Standards (KEBS) has ensured that the manufacturing body has proven that it is capable of achieving and maintaining the necessary level of compliance and can fulfil the conditions required for product certification. KEBS therefore grants the mark to manufacturer(s) who have shown compliance to the relevant approved Kenya Standards.
The standardisation of products is a major step towards ensuring that companies meet certain quality standards in a bid to ensure consumers are protected for health and safety; and guarding against the entry of sub-standard and counterfeit products into the market. To be granted the mark, products normally go through a rigorous process of testing to ascertain compliance with the relevant approved KEBS standards.
Implementation date for S-Mark deferred
The deadline for compliance with the KEBS Standardisation Mark of quality was this month shifted from 1st October, 2008 to 1st March, 2009 after extensive consultations between the government and stakeholders.
This extension offers a window of opportunity for further engagement even as companies continue clearing stocks of goods that had been supplied to retailers without being appended with the S-Mark label.
According to Industrialisation Minister, Henry Kosgey, the postponement of the implementation date will enable supply chains to prepare their Christmas inventories and have ample time to sell off existing stocks.
Those companies whose products already bear the superior Diamond Mark of quality will not have to append the S-Mark. This will shield the affected companies from downgrading their products since the Diamond Mark is considered to be more superior to the basic Standardisation mark.
With regard to imported products, the International Standardisation Mark (ISM) will be appended on them based on health and safety. Under safety, the scope will be limited to electrical appliances, while under health it will be appended food products, electrical products and toys. The ISM will be provided at no additional cost, since the products will have paid various charges the Pre-export Verification of Compliance scheme at the country of origin.
However, KAM has objected to the new decision by the government to impose charges per product as opposed to process proposed for large companies with a turnover of more than Kshs 500,000.
On September 1, the Minister announced that companies with10 products and above would pay Kshs. 20,000 per year and an additional Kshs. 5,000 per product while those with less than 10 products would pay an additional Ksh 7,500 per product.
KAM has termed this decision as unfortunate because there was no prior consultation with manufacturers, and it is viewed to add to the already high cost of doing business in the country.
Position on Anti-Counterfeit Legislation
Kenyans spend as much as Ksh 4 billion annually on counterfeits products that enter into the country freely due to lack of a legal framework to guard against illicit trade. The situation has been aggravated by the current economic hardships and high poverty prevalence, with a majority of consumers preferring to buy cheaper products.
Counterfeit and substandard products have become a major problem to Kenya’s economy, including the government, manufacturers and unsuspecting consumers. While on one hand the government loses out in terms of unpaid taxes revenue, legitimate industry players lose sales revenue and market share to pirates, and consumers are exposed to sub-standard, falsely described and possibly dangerous goods. The image of the well-established brands is also destroyed, compromising brand equity.
Most counterfeited products include batteries, electronics, medicines, clothes and foodstuffs that have flooded the market posing a danger to the genuine goods. Some even include KEBS quality mark seals to hoodwink the gullible buyers.
Counterfeiting is a menace that should no longer be ignored or allowed to continue. It must be brought to an end immediately if the massive economic losses the world over are to be curbed.
The Anti-Counterfeits Bill
Stiff penalties await dealers in counterfeit goods in Kenya once the proposed law on counterfeits is enacted. The Anti-Counterfeit Bill was prepared jointly by the former Ministry of Trade and Industry and the Kenya Industrial Property Institute in consultation with the business community.
It is hoped that Members of Parliament will treat the Bill as a matter of priority when they resume their sittings in October and enact it into law. With regard to this, the Kenya Association of Manufacturers plans to intensify its campaign to lobby for the Anti-Counterfeit Bill to be passed by the legislators urgently. The campaign will focus on educating and creating public awareness among the MPs on counterfeiting.
KAM has also proposed several amendments to the Bill with the aim of making it stronger and less ambiguous. The Bill has been due for a very long time and there is resolve among businesses not to defer it any further. The amendments will be tabled before the Parliamentary Committee on Trade and Finance.
Position on New Labour laws
The new Labour Laws that were implemented are an example of legislation that should have been properly examined prior to implementation in order to avert their negative impact on the businesses which in effect increased the cost of doing business in Kenya.
In order to ensure the competitiveness of Kenya’s business, it is important for the government to ensure that the existing and any new laws do not add to the cost of doing business. At this crucial time for Kenya as we struggle to get the economy back on track after the disastrous post-election violence, it is important to ensure that all means of wealth creation are facilitated and supported to restore and safeguard the economy.
The five pieces of legislation that constitute the new Labour Laws will not only increase the cost of doping business in the country, but will also create acrimony between employers and employees. The law on maternity leave might even result in the discrimination of females by employers.
After its review of the impact of the labour laws, KAM has isolated issues that need to be re-looked and offered that quick and innovative solutions be sought by all concerned parties in ensuring that the country does not compromise its huge investments.
Impact of laws on cost of doing business
An analysis of the labour laws indicates that the law pertaining to maternity and paternity Leave will be detrimental to employees, particularly female workers who are in their reproductive age.
Estimates indicate that maternity leave will cost some organisations approximately Ksh.10 million annually, while paternity leave will cost them approximately Ksh.2.9 million. On the other hand, insurance premium costs will be well over Ksh.2 million per organisation. These are massive costs that many organisations will prefer avoiding.
Employing women will be viewed as a costly affair, as employers are forced to pay other employees to replace the women on maternity leave. This means that two employees will have to be paid for the same job. It might even be more expensive than it is in developed countries.
The Work Injury Benefits Act (WIBA) and the Occupational Safety and Health Act (OSHA) which are basically concerned with ensuring that oppressive practices are gotten rid of at work places will also prove to be too costly for most businesses to handle.
Overall Chairman: Bimal Kantaria – Elgon Kenya
Environment sub-committee: Suresh Patel – Saroc Limited
IPR sub-committee – Anthony Mburu – Haco Industries
Members: Joe Lithimbi (AVA Mombasa) and Eric Kimani
Liaison: Ms. Arnolda Chao - arnolda.chao@kam.co.ke
