SATS 1286 on Local Content

A diverse, thriving local economy has been identified as an important requirement for sustainability. A diverse mix of small business means that economies are more resilient and jobs are retained even if there are economic downturns in one, or more, sectors. Local small business have to deal with the consequences of their actions in the long term and therefore tend to be more interested in sustainability and minimising negative local impacts. In rural areas diversity of work and economic opportunities help to retain youth, maintain communities and reduce disruptive rural-urban migration.

Local economies can be supported through procurement which favours local production. In South Africa the Preferential Procurement Policy Framework Act (PPPFA) Act 5 of 2000 enables the government to use procurement to support increased local production. It sets out minimum local content requirements for designated sectors for goods, works and service contracts.

In order to support the achievement of minimum local content requirements the South African Bureau of Standards (SABS) has developed SATS 1286 which are technical specifications for determining local content. The SABS also provides a verification service which confirms local content. The specifications and service were launched in July 2013.

While the specification and verification process may seem bureaucratic and limiting it could lead to substantial government funding flowing to local businesses and industry instead of going offshore. If this flow is substantial, and reliable, significant growth in local businesses may be possible along with corresponding increases in employment and incomes.  While the system has been developed for government, the private sector can draw on the same principles in order to ensure that they procure in a way that supports and develops the local economy and therefore sustainability. Information on the standard can be found at:

https://www.sabs.co.za/Local-Content/docs/DTI_LCV_05072013.pdf