Local Content and the ‘verification’ procedures are part of the implementation of the Industrial Policy Action Plan (IPAP) under the mandate of the Department of Trade, Industry, and Competition (the dtic).

The economic objective of the IPAP intervention is for local manufacturers to receive a substantial share of government business which will contribute to the development of local industries and the creation of jobs. Another important strategic approach in South Africa’s industrial policy is to use government’s leveraging muscle as a ‘large buyer’, that can influence how much is locally manufactured, to promote strong, sustainable growth in the manufacturing sector, leading to new business opportunities, jobs, and skills development. Local content was introduced as a standard procurement practice intended to boost the South African economy by achieving 75% local manufacturing, which would also increase employment.

Local Content refers to the portion of goods, works and services that have been generated and produced in South Africa. Companies that import raw material and convert this raw material in South Africa also contribute to local content to the extent that the South African value-add processes and additional inputs count as local content.

From December 2011, suppliers in certain sectors have to include minimum amounts of Local Content in the goods, works, and services that they provide to users in the public sectors, namely all national and provincial departments, all municipalities; all entities listed in terms of Schedules 2, 3A and 3B as well as all other government agencies. Within the public sector, the respective supply chain management personnel within these various departments evaluate these tenders against Local Content requirements in adherence to National Treasury regulations. As a supplier, if you do not comply, you do not win the tender.

To date, several sectors and sub-sectors have been designated for local production with minimum Local Content thresholds. These include rail rolling stock, power, pylons, bus bodies, canned/processed vegetables, textiles, clothing, leather, footwear, furniture, set-top boxes, power & telecom cables, solar water heaters and valves, manual and pneumatic actuators. Regular updates on new designations are communicated to the public by the Department of Trade, Industry, and Competition (the dtic).

A crucial aspect of Local Content is its verification, and as a renowned quality assurance provider in South Africa and beyond, the South African Bureau of Standards (SABS) has been appointed by the Department of Trade, Industry, and Competition (the dtic) as the verification agency for Local Content in South Africa in terms of the amended regulations to the Preferential Procurement Policy Framework Act (PPPFA), Act 5 of 2000. The local content verification is aligned to designated products and is conducted in accordance with SATS 1286:2011, the technical specification for assessing local content developed in 2011.

The verifications and certifications conducted by SABS Local Content are designed to give the state proof that it is local manufacturers who are benefitting from the ‘local content’ requirements in legislation. The winning bidders in state department, state owned companies and other public entity tenders are required to have their ‘local content declarations’ verified to ensure there is no misrepresentation (fronting or misstatement of local content).

The SABS Local Content provides quality assurance as to the level and integrity of local content in the goods, works, and services of suppliers. The verification of Local Content provides an independent benchmark that can be trusted and relied on by users in the public sector including, national, provincial & local government departments, municipalities, state-owned institutions, science councils, government agencies, and other public sector institutions.

The SABS' Local Content verification program encompasses two distinct types of verifications namely,
Verifications linked to government tenders
Verifications linked to the SABS Local Content Grading Scheme