Agrément SA 2024/25 Annual Report; with Deputy Minister

Video Annual Reports 2024/25 The Portfolio Committee met to consider the 2024/25 annual report of Agrément South Africa (ASA), and stressed the need for the entity to create greater awareness of its work in assessing and approving innovative products for the built environment, pointing to the increasing challenges of climate change, technological advances, and social issues. ASA's report highlighted its operational performance, governance, financial results, and risk management. Despite limited resources and a board transition, it had achieved 81% of its targets and received its first clean audit. It had maintained strong governance through active board committees, monitored strategic risks, and implemented mitigation plans. Financially, it relied mainly on government grants, managed resources prudently, and used surplus funds to support operations. It continued to certify innovative construction products, contributing to safety, quality, and sustainable infrastructure development in South Africa’s built environment. It explained that small producers faced high certification costs, which Agrément SA sought to mitigate through waivers, discounts, and payment arrangements. They also stressed the challenge of market uptake for certified products, as government procurement did not yet require innovative products, limiting demand. Members criticised ASA's reliance on outsourced certification, and stressed the need for clear strategies, proposals and government support to create a demand for certified products. Agrément confirmed ongoing engagement with departments and agencies to provide databases of approved products to support procurement and promote wider use of certified innovative building solutions, aiming to strengthen market penetration and ensure safety and compliance. Concern was expressed over ASA’s heavy reliance on departmental grants, private leases and outsourced facilities, with recurring Auditor-General findings pointing to persistent weaknesses in supply chain management that had not been fully addressed over several years. Members stressed that the entity needed to demonstrate financial independence and operational sustainability before being granted a broader mandate. They highlighted its reliance on external laboratories, the limited internal capacity for testing, and the impact of these constraints on service delivery, particularly for small or financially constrained applicants. Agrément SA responded that it had achieved a clean audit, with no irregular expenditure or material non-compliance, but acknowledged challenges in revenue generation due to legislative limitations, small staff numbers, and the need to balance cost recovery with accessibility for ordinary citizens. They explained that some risk management activities and strategic actions from the previous financial year had been transferred to the current year for implementation, with improvements in monitoring and mitigation underway. The Department confirmed ongoing engagement with Agrément SA, including reviewing legislative gaps, providing government-owned facilities to reduce reliance on private leases, and supporting proposals to secure additional funding where possible. Members emphasised that ASA should take up available government buildings, work with the Department to create demand for certified products, and present concrete plans for financial sustainability. They said that alignment between operational, financial, and strategic plans, along with effective use of state resources, was critical to reduce costs and improve service delivery. They pointed out that Agrément was largely unknown, particularly in rural areas, limiting its ability to support local innovators and the building industry, and stressed the importance of marketing, outreach to communities, and partnerships with schools, technical colleges, municipalities, and traditional leaders to increase awareness and access. Agrément SA acknowledged budget constraints, staffing limitations, and the high cost of product assessments, noting that approved products were often underused by the public sector, further limiting market growth. They indicated plans to improve visibility through stakeholder mapping, partnerships with universities and sister entities, and leveraging departmental structures for broader outreach. Members also raised concerns about Agrément SA’s status as a Schedule 3A entity, questioning whether its functions could be performed within the Department itself given its objectives, budget, and personnel. They highlighted the need for public acceptance of alternative and innovative building technologies, and emphasised the role of partnerships with government departments to promote these technologies.