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Dalziel Speech: Joint Accreditation System

Speech Notes for address by Commerce Minister Lianne Dalziel at a function to celebrate the 15th anniversary of the Joint Accreditation System-Australia New Zealand. Icon Room Te Papa Wellington 8pm

Thank you for the invitation to address this function to celebrate the 15th anniversary of JAS-ANZ.

As Minister of Commerce, but also as Minister for Small Business, accreditation services and the wider standards and conformance infrastructure are an important focus of my work. They play a vital role in both supporting and promoting economic growth not only for large international firms but also for small and medium enterprises – or SMEs as we call them – especially when they turn their attention to export markets.

I want to focus my comments on the benefits of JAS-ANZ and the third party conformity assessment model and how it brings benefits to both Australia and New Zealand by giving confidence to our trading partners and improving market access to our exporters.

JAS-ANZ was the first joint Trans-Tasman institution when it was formed back in 1991 and has now developed and consolidated its position as an effective organisation in the Australasian and international arena. The increasing demand for its services in Asia and now in the Middle East is a mark of the high regard in which it is held.

I can give examples where JAS-ANZ has provided a cost-effective Trans-Tasman regime, but a recent example of its growing role is in the product certification regime of the new Building Act. JAS-ANZ will soon accredit product certification bodies for building products across Australasia, unifying regulatory requirements for these important goods. I want to highlight two reasons why accreditation services are of critical importance to the New Zealand economy. And in that context I want to remind everyone what our Finance Minister, Hon Michael Cullen said in the Budget Speech this year:

"Economic transformation must build on an understanding of the need for continuous change and adaptation. A small and relatively isolated developed nation in the South-West Pacific – the most isolated developed nation in the world – has to build its prosperity on its flexibility and adaptiveness, its responsiveness to changing market conditions and demands."

I would add to that list, (and indeed the Finance Minister did too in focussing much of the Budget speech on strengthening New Zealand's infrastructure), the need to have a strong standards and conformance infrastructure that enables New Zealand to meet international standards.

So the first reason why JAS-ANZ's services are critical to the New Zealand economy relates to the way they help in satisfying regulatory requirements, both here and around the world. The second is the role that accredited management and quality systems can play in developing improved business capabilities within organisations. World-class business systems assist world-class business performance.

One of the main benefits of third party accreditation is that it promotes trust and confidence in goods and services. Trust has always been the cornerstone of good business practice. In the past you could deal with your neighbour or the local supplier of goods or services because you knew them. You trusted them; they trusted you; and besides which, you knew where they lived if they let you down.

Today people do not always know the people they are dealing with on such an intimate basis: supply chains span the globe and goods are shipped from one end of the world to the other.

Contracts for the supply of goods and services have become increasingly complicated and the acceptable margins of error ever tighter. How do we build trust into these relationships that are formed at a distance?

The answer is a system for ensuring quality assurance and environmental management around processes, products and services. Stipulating that products and systems are certified by JAS-ANZ-accredited bodies meets the demands of international trade by identifying trusted bodies to undertake the assessments that can be relied upon.

Delays and costs in gaining recognition in overseas markets can obviously reduce an exporter's ability to compete against domestic manufacturers in those overseas markets, so it is important that goods and services certified in New Zealand and Australia are accepted elsewhere without the need for additional testing or certification.

JAS-ANZ third-party accreditation meets the international standard in this regard. Worldwide, accreditation agencies are linked through the International Accreditation Forum. The IAF promotes mutual acceptance of certification and harmonisation through peer review and by reference to common international standards and guides for conformity assessment. These provide importing countries with a cost-efficient basis on which to have confidence in the qualities of goods, and give an assurance that those goods satisfy their domestic technical standards. Using JAS-ANZ-accredited conformity assessment bodies therefore minimises the risk of goods being denied access to markets on the grounds of not meeting required standards.

Here there is an observation I would like to make. Compared with many other countries, New Zealand businesses have been slow to take up environmental management systems. Firms should seriously consider proactively gaining compliance with internationally recognised environmental management systems. There is a strong possibility that these systems will become a requirement to doing business overseas, and if that occurs, firms face the prospect of losing market share, while they are forced to play catch-up.

On a similar note, while there is a perception that ISO 9001 may have peaked in some areas of the developed world, take-up rates are still much higher elsewhere than they are here, and the demand for quality management certification is growing with many of our trading partners in the developing world.

The bottom line is that certification isn't just about regulatory compliance or getting a tick from your customers. The second reason why accreditation is critically important relates to efficiency. If undertaken in an appropriate manner – rather than just going through the motions – adopting quality management systems can increase a firm's business capabilities in areas where they may not currently reflect best practice and be achieving their full potential. Improving business capability is particularly important for SMEs.

SMEs, must, of course, invest in people and innovation through staff training, regularly considering employee satisfaction, maintaining up-to-date equipment, marketing new products and continuous in-house R&D. These are drivers of success but, in themselves, are not enough to secure economic growth.

I know of New Zealand SMEs that have world-leading technology and put innovation to the fore in their employment and other business practices but still fall short of their full potential.

If they are to capitalise on their innovative products and services, businesses need to put in place world-class management systems to maintain and improve the quality and efficiency of their processes. For SMEs to grow, this is essential. And, as SMEs grow, the business capabilities that their management develops from adopting management systems – and taking them seriously - become even more important.

If that were the one message you could take home with you tonight, then I would be satisfied that an important point had been received and understood. We do have to take these things seriously if we are going to be a true player on the international stage.

In conclusion, greater use of accreditation will assist the transformation of the New Zealand economy, as we meet the competitive challenges facing us and harness the potential of our world-class products and innovative ideas.

For New Zealand firms operating in, or thinking of entering the global marketplace, conformity assessment of their management and quality systems by accredited certifiers must be an essential element in their market access and marketing strategies. It will also benefit firms looking to lift their business capabilities and improve their domestic performance.

JAS-ANZ has a well-earned international reputation. The quality of the accreditation services in New Zealand and Australia has been a catalyst for third party accreditation gaining acceptance and being adopted by the international community. We are very fortunate to have a body of such standing at our disposal and it is up to all of us to take full advantage of what it offers. JAS-ANZ is to be congratulated for using the occasion of its 15th Anniversary to remind us of that.

Thank you and please enjoy the rest of the evening.

ends

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