Grant Consultant’s Report

Project Number: 39221 December 2011

Bhutan: Micro, Small and Medium-Sized Enterprise Sector Development Program (Financed by the Asian Development Fund)

Prepared by IDRG Consultancy Services

India

For Ministry of Finance Bhutan Development Bank Limited

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design.

FINAL REPORT

Bhutan Standards Bureau

BHUTAN

ADB funded Project in Bhutan : Grant 0089 - BHU : Micro , Small and Medium- Sized Enterprise Sector Development Project: Subproject 3, Component 4: Planning and Organizing for the Establishment of Product Standards and Capacity Building for Regulating and Implementing Agencies 2011

IDRG Consultancy Services, India

FINAL REPORT

Planning and Organizing for the Establishment of Product Standards and Capacity Building for Regulating and Implementing Agencies

VOLUME I

IDRG Consultancy Services

2011

TABLE OF CONTENTS Sl PARTICULARS PAGE No. 1. Acknowledgements 5 2. List of Abbreviations 6 3. I Background, Situational Analysis and Review of work plan 7 4. Background 7 5. Mobilization and commencement of the assignment 8 6. Situational analysis 8 7. Desk review-collection of relevant documents 10 8. Interactive Meetings 11 9. Interactive Workshops 12 10. Review and revision of work plan 13 11. Revised deployment schedule 16 12. II Establishment of Bhutan Standards Bureau (BSB) and its 17 operationalization 13. Placement of BSB under the relevant ministry 17 14. Constitution of the Board 17 15. Transition from SQCA TO BSB 17 16. Development of organogram and institutional logo for BSB 18 17. The First Meeting of the Board 19 18. Vision, Mission, Core values & Quality Policy of Bhutan Standards Bureau 20 19. Three Year Corporate Plan for the Bhutan Standards Bureau 21 20. Legal Work-Rules and Regulation under the Bhutan Standards Act 2010 21 21. Proposed Legal Framework under the BSB Act 2010 22 22. Legal framework under BAFRA 22 23. Printing of Bhutan Standards Act 2010 22 24. III Development of Infrastructure for Formulation of Standards 23 25. Terms of Reference and Organogram of Standardization Division 23 26. Standards Development Infrastructure 24 27. Areas of standardization 24 28. Constitution of Technical Committee 24 29. Manual for Standards Development 30 30. Training of Technical Committee Members 31 31. Bhutan Standards Developed for publication 31 32. IV Development of Infrastructure for Certification 34 33. Terms of reference and organogram of Certification Division 34 34. Certification infrastructure 35 35. Establishment of Product Certification 35 36. Establishment of Management System Certification 35 37. Implementation of documented system 36 38. Legal frame work for certification 36 39. Bhutan Standards Certification Marks 37 40. Accreditation of Certification Bodies 37 41. V Laboratory Management Services- Strengthening testing infrastructure 39 42. Terms of reference and organogram of Metrology & Laboratory Management 39 Services Division 43. Infrastructure for laboratory management 40

Page 3 of 94

44. Status of Product Testing Laboratories in Bhutan 41 45. VI Development of Infrastructure for International cooperation 43 46. Terms of Reference and Organogram of International Relations Division 43 47. Infrastructure for International Cooperation: 44 48. a) International Scenario 44 49. b) Establishment and Operationalization TBT National Enquiry Point 44 50. c) UP gradation and operationalization Technical Information Centre 46 51. d) Establishment and Operationalization SPS National SPS Enquiry Point 46 52. e) Establishment of Accreditation Coordination Section 47 53. VII Administration and Finance 48 54. Terms of Reference and Organogram of Administration and Finance Division 48 55. Infrastructure for Administration and finance: 49 56. Administration Section 49 57. Finance and accounts section 49 58. VIII. Training and Empowerment 50 59. Training needs analysis 50 60. In- house training imparted 50 61. Training programmes abroad 52 62. IX Procurement of Office Equipment 56 63. Office equipment for project office 56 64. Office equipment for efficient operation of BSB 56 65. X Final Outputs 59 66. Final output 59 67. XI Way Forward- Additional Work Through Contract Variation 62 68. Background and Rationale 62 69. Progress under the present project period 62 70. Additional Work Required 63 71. What will remain to be done? 64 72. Proposal for Contract Variation 64 73. Additional Terms of Reference(TOR) 64 74. Personnel deployment Schedule 65 LIST OF ANNEXURES 75. Annexure I Terms of Reference 66 76. Annexure II Sensitization workshop on establishment of BSB with various stake 69 holders 77. Annexure III Outline of documentation for product certification scheme based 72 on ISO IEC 17065 (ISO Guide 65) 78. Annexure IV Outline of documentation for management system certification 74 scheme based on ISO IEC 17021 79. Annexure V Report on the status product testing laboratories in Bhutan 77

LIST OF TABLES 80. Table 01 Experts Deployed 8 81. Table 02 Final Outputs , Deliverables and Reports 59

Page 4 of 94

ACKNOWLEDGEMENTS

The Consultant`s Team would like to express gratefulness to the following for their contribution and great assistance in making available required data and information that made the writing of this report possible:

(i) Mr. Phuntsho Wangdi, Director, Bhutan Standards Bureau (BSB) (ii) Mr. Karma Dorji, Executive Director, BAFRA, MoAF (iii) Ms. Tenzin Wangmo, Marketing In charge, Institute of Traditional Medicinal Services (iv) Mr. Rinchen Dorji, Director, Department of Cottage and Small Industries (v) Mr. Chewang Rinzin, Project Manager, ADB MSME Project, BSB (vi) Mr. Karma Tshetrim, Project Manager, ADB MSME Project BSB (vii) Ms. Gem Bidha, BAFRA, MoAF (viii) Other stakeholders such institutions, organizations, enterprises and individuals who participated in the Sensitization Workshop on launching of the project that predominantly included establishment of Bhutan Standards Bureau, and (ix) All Divisional Heads and concerned officials of BSB who provided necessary assistance and support

The consulting team expresses its gratefulness to Ms. Natalie Bertsch, Asian Development Bank, Manila for kind and valuable guidance provided. Our thanks are especially due to Mr. Phuntsho Wangdi, Director, Bhutan Standards Bureau (BSB) for providing a fully furnished ADB MSME Project Office and also for his keen interest and constant guidance and to the Project Manager for day to day support enabling for effective working of the team.

Page 5 of 94

LIST OF ABBREVIATIONS

ADB : Asian Development Bank APLAC : Asia Pacific Laboratory Accreditation Cooperation APMP : Asia Pacific Metrology Programme BAFRA : Bhutan Agriculture and Food Regulatory Authority BCCI : Bhutan Chamber of Commerce & Industry BSB : Bhutan Standards Bureau BTS : Bhutan Standards CAC : Codex Alimentarius Commission DCSI : Department of Cottage and Small Industries DGPC : Druk Green Power Corporation GLP : Good Laboratory Practices HACCP : Hazard Analysis and Critical Control Points IAF : International Accreditation Forum IEC : International Electro-technical Commission ILAC : International Laboratory Accreditation Cooperation ISO : International Organization for standardization ITMS : Institute of Traditional Medicinal Services LDC : Least Developed Country MoAF : Ministry of Agriculture and Forests MoEA : Ministry of Economic Affairs MoH : Ministry of Health MoWHS : Ministry of Works and Human Settlement MSME : Micro, Small and Medium Enterprises NSB : National Standards Body NU : Ngultrum(BTN) Bhutanese Currency (approximately 1USD =44.50 Nu.) OIML : International Organization for Legal Metrology\ PAC : Pacific Accreditation Cooperation RIA : Regulatory Impact Assessment RGOB : Royal Government of Bhutan SMTQ : Standards, Metrology, Testing & Quality SPS : Sanitary and Phyto-Sanitary Measures SAARC : South Asian Association for Regional Cooperation SARSO : South Asian Regional Standards Organization SQCA : Standards & Quality Control Authority TBT : Technical Barriers to Trade TIC : Technical Information Centre TOR : Terms of Reference UNCTAD: United Nations Conference on Trade and Development UNIDO : United Nations Industrial Development Organization USD : US Dollar (approx 1 USD = 44.50 Nu) WTO : World Trade Organization

Page 6 of 94

I. BACKGROUND, SITUATIONAL ANALYSIS AND REVIEW OF WORK PLAN i) Background

1. The Developmental objective of this Asian Development Bank funded project has been to develop national organization and infrastructure for standards development, certification systems and testing for ensuring quality of goods and services and implementation of WTO Agreements on Technical Barriers to Trade (TBT) and Sanitary and Phyto-sanitary Measures (SPS) to facilitate entry of Bhutanese MSME products and services in international markets. The project will assist in the establishment and successful functioning of the Bhutan Standards Bureau (BSB), the National Standards Body (NSB) of Bhutan to foster and promote standards and standardization activities as a means of advancing the national economy, benefiting the health, safety and welfare of the public, assisting and protecting consumers, protecting the natural environment, promoting industrial efficiency and development, facilitating domestic and international trade. The project will pay particular attention to the institution building and strengthening of BAFRA, as quality improvements in the food value chains are a priority for MSME development in Bhutan. The project outcomes will support MSMEs to achieve international levels of quality and safety standards to comply with International Standards and regulations and overcome technical barriers to trade or sanitary and phyto-sanitary measures.

2. The Royal Government of Bhutan (RGOB) promulgated the Bhutan Standards Act 2010 to establish the Bhutan Standards Bureau (BSB), an autonomous National Standards Body of Bhutan to:

a) Develop national standards and facilitate their implementation, b) Establish and operate metrological referral and calibration laboratories, c) Establish and operate product testing infrastructure; d) Carry out/operate product and management system certification schemes, e) Permit, coordinate and facilitate accreditation of laboratories and certification bodies, f) Promote quality and standardization, g) Oversee the implementation of the regional and international trade agreement related to standards and technical barriers to trade, and h) Carry out such other mandate related to standardization and quality control including monitoring as may be assigned by the Royal government.

3. The Royal Government of Bhutan, accordingly, decided to establish Bhutan Standards Bureau to implement the mandate given under the Act in the above areas. To fulfill these objectives and operationalize BSB, the RGOB, under an Asian Development Bank funded project, engaged the services of IDRG Consultancy Services, A-22, Sector 22, DG Security Society, Dwarka, New Delhi, India. The Terms of Reference are as given in Annexure-I.

Page 7 of 94

4. Mobilization and commencement of the assignment

IDRG commenced the assignment on the 27th of December, 2010 with interaction meeting between the Director, SQCA, the Project Manager and the Project Director, Mr. B.N. Jha in which Mr. Himinder Lal, Legal Expert and Mr. H.N Adhikari National Standards Expert were also present. Mr. Sohrab, the SMTQ Expert and Team Leader (International) lead the team for accomplishment of the task enunciated in the project. All three Experts were deployed for the execution of the project, as reflected in the Table-1 below.

TABLE 1 EXPERTS DEPLOYED

Experts Area of Work 1. Mr. Sohrab Team Leader/SMTQ Expert 2. Mr. Himinder Lal Legal Expert 3. Mr. H.N. Adhikari National Standards Expert

Mr. B.N. Jha, the Project Director was also available throughout to meet all required support and coordination in the execution of the project.

5. Situational analysis

During the inception phase, an intensive situational analysis was conducted through collection of information, desk review of available documents, meetings and consultations with concerned officials and stake holders. Based on these, a preliminary analysis was done to develop roadmap for the assignment and a schedule was finalized for completion of the project. These are detailed in paragraphs to follow.

6. The process of standardization in Bhutan started with the establishment of the Standards and Quality Control Authority (SQCA) in the year 2000 under the Ministry of Works and Human Settlement with the primary responsibility to develop standards and to ensure quality in the construction sector. It has been pursuing its activities to meet its long term mission “development of national standards on engineering and construction and ensuring their implementation to bring about high quality physical infrastructure that give value to investment”.

7. With the faster pace of development of the Bhutanese economy and the need to participate in international and regional fora such as World Trade Organization (WTO), International Organization for Standardization (ISO), International Electro-technical Commission (IEC), Codex Alimentarius Commission (CAC) and South Asian Association for Regional Cooperation (SAARC), the SQCA was entrusted with additional responsibilities. The Royal Government of Bhutan designated SQCA as the focal agency for all standards as the national standards body of Bhutan in the year of 2005. It became a correspondent member of ISO in 2005, affiliate member of IEC in 2006 and was designated as the WTO TBT National Enquiry Point in 2005. It has representation on the Bhutan-WTO negotiating team on TBT matters.

Page 8 of 94

8. The charter of the SQCA had a limited mandate which fell short of meeting the requirements of a National Standards Body to effectively participate in international forum. Also due to this inherent limitation, other regulatory authorities in the country in different technology sectors were not lending full support and cooperation to SQCA for development of national standards in different economic sectors. It was, therefore, required to accord a broader mandate to SQCA in order to discharge its responsibilities in a more fruitful manner and be elevated to National Standards Body. To give proper mandate, it was necessary to accord it a statutory status and a draft Standards Act of Bhutan was proposed which was deliberated by the Parliament of the Kingdom of Bhutan and enacted the Bhutan Standards Act 2010 with core objectives to “foster and promote standards & standardization activities as a means for advancing the national economy, benefiting the health, safety and welfare of the public, assisting and protecting consumers, protecting the natural environment, promoting industrial efficiency & development, facilitating domestic and international trade.”

9. There has been no organized certification system developed in the country. But SQCA has been implementing Brand Approval Scheme to control quality of products essentially required for the construction industry. This scheme is closer to one of the product certification models of ISO IEC Guide 67 Conformity assessment -Fundamentals of product certification which would be developed into a product certification scheme.

10. Besides, some of the Bhutanese companies have gone to Bureau of Indian Standards and other certification bodies for their product certification such as cement. Also, there are 12 UNIDO assisted establishments which have achieved Management system certification:

a) ISO 9001 Quality Management System Certified companies 3

(i) Bhutan Polythene Company Ltd, Phuenstholing (ii) Jigme Mining Corporation Ltd, Pugli (iii) Jigme Industries Pvt Ltd, Pugli

b) ISO 14001 Environmental Management system Certified companies 3

(i) Jigme Mines, (ii) Jigme Industries (iii) Bhutan Carbide Company

c) HACCP Certified Companies 2

(i) Bhutan Agro Industries Corporation Ltd (ii) Hotel Druk, Thimpu

d) ISO 22000 Food Safety Management System Certified Companies 4

(i) Hotel Zhiwa Ling. Paro (ii) Hotel Taj Tashi, Thimphu (iii) Army Welfare Project, Gelephu Distillery (iv) Bhutan Brewery Pvt Ltd, Pasakha,

The Bhutan Standards Act empowers the Bhutan Standards Bureau to start its own product and Management Systems Certification to provide certification services to the industrial establishments and service sectors in Bhutan.

Page 9 of 94

11. Desk review-collection of relevant documents

The ADB MSME Team collected numerous relevant documents and reports and a preliminary review was undertaken. Documents reviewed included inter alia the following:

a) UNIDO Report of Mr. Sohrab, Standard Development Expert on “ Market Access and Trade Facilitation Support for Asian LDC’s through Strengthening Institutional and National Capabilities Related to Standards, metrology, Testing and Quality”,

b) UNCTAD Report of Mr. Sohrab, Consultant Technical Barriers to Trade for Preparation of National Action Plan and Operationalization of TBT Enquiry Point,

c) UNIDO Report of Mr. S.K Kimothi, Consultant, to assess the metrological needs for metrological field and parameters for which metrological services would be required,

d) UNIDO Report of Mr. A. Vellingiri, Metrology consultant to make operational of supplied metrology equipment and provide training to SQCA staff on legal metrology equipment,

e) UNIDO Report of Mr. C J Jenkins, Expert in Legal Metrology, to monitor the development of the legal metrology laboratory in Bhutan,

f) PTB Report Mr. P. A. Krishnamoorthy, consultant for strengthening legal Metrology and developing regulatory Framework,

g) UNIDO Report of Mr. Franz Hengstberger, consultant for Preparatory assistance in conformity assistance capacity building,

h) UNIDO Report of Mr. E.S.Talwar, Consultant for Creation of awareness on ISO IEC 17025 and outline quality manual.

Related legislative and policy framework a) The Bhutan Standards Act 2010 b) The Food Act of Bhutan, 2005 c) The Medical and Health Council Act, 2002 d) The Medicine Act, 2003 e) Companies Act of the Kingdom of Bhutan, 2000 f) The National Environment Protection Act, 2007 g) Forest and Nature Conservation Act of Bhutan 1995 h) Industrial Property Act, 2001 i) Audit Act of Bhutan 2006 j) Bhutan Civil Service Act,2010 k) Bhutan-2020, a Vision l) Framework for Private Participation in Infrastructure m) Economic Development Policy, 2010

Page 10 of 94

12. Interactive meetings

A series of interaction meetings were held. These meetings were designed to seek the views of the stakeholders and gather information on standardization and conformity assessment. The meetings included:

a) Meeting with Director and Senior Officers of SQCA b) Meeting with Executive Director and Senior Officers of BAFRA c) Meeting with Institute of Traditional Medicine Services, Departmental Medical Services, Ministry of Health d) Meeting with Director, Department of Cottage and Small Industry, Ministry of Economic Affairs

Meeting with Director BSB

e) Meeting with Metrology laboratory, SQCA f) Meeting with Material Testing Laboratory, SQCA

Meeting with Officers of BAFRA

Page 11 of 94

13. Interactive workshops

Two interactive workshops were organized to consolidate views on the following aspects:

a) Establishment of the BSB b) Standards Formulation c) Certification- Products and Management Systems d) Laboratory Testing- Calibration & Product Testing e) Training and empowerment f) TBT & SPS Enquiry points

14. The first half-day workshop was held under the Chairmanship of Director, SQCA with the Heads of Departments and Senior Officers of SQCA, on 10 January, 2011. The objective of the workshop was to:

 Understand the status of SQCA to transition into the Bhutan Standards Bureau (BSB)  Understand various activities being currently under taken by SQCA,  Understand what all areas under SQCA are relevant and need to be placed under BSB and transfer those areas not relevant under BSB to other relevant organization,  Understand the status of Metrology Referral and Calibration Laboratory,  Understand the status of Material Testing Laboratory, whether some of these facilities could be used for product testing under product certifications,  Thoroughly educate the staff of SQCA on the roles and responsibilities of BSB as mandated by Bhutan Standards Act 2010,  Initiation of Implementation of the Bhutan Standards Act covering the following: . Placing BSB under the relevant Ministry, . Constitution of the Board under the Act, . Proposing an organogram of BSB,  Framework for Standards Formulation,  Framework for Product and System Certification,  Framework for Laboratory Management,  Framework for International Relations.

15. A half-day Sensitization Workshop was conducted with various concerned Stakeholders on 14 January, 2011 with Director, SQCA in the Chair. The objective of the workshop was to:

 Sensitize the stakeholders on the roles and responsibilities of BSB as mandated by Bhutan Standards Act 2010,  Educate the participants on the role and relevance of standardization and the benefits the Bhutanese business could derive by implementing standards,  Identify the potential areas of the standardization,  Initiate Implementation of the BS Act covering the following: . Placing BSB under the relevant Ministry, . Constitution of the Board under the Act, . Proposing an organogram of BSB,  Explain framework for Standards Formulation and Conformity Assessment,

Page 12 of 94

 Sensitize stakeholders on the different functions under BSB such as Standards formulation, Product and System Certification, Laboratory Management, International Relations and Administration and Finance.

A summary of the proceedings of these workshops are given in Annexure-II

STANDARDIZATION REGIME IN BHUTAN THE CHANGING SCENARIO

BY: CHEWANG RINZIN, SQCA

Sensitization Workshop on establishment of the Bhutan Standards Bureau (BSB) under the Standards Act of Bhutan 2010

14 January 2011 SQCA Conference Hall, Thimphu

Interactive workshop

16. Review and revision of work plan

In the light of interactions and interactive workshops, certain aspects of the work plan needed to be sharpened within the overall TOR. Accordingly, a revised work plan was developed based on the understanding of the developmental objectives of the project and the outputs required to achieve such objective and activities that will need to be undertaken for the purpose.

The Work plan, with activities there under, was reviewed and revised as given below:

Activity 01 Establishment of the Bhutan Standards Bureau

1.1Situation analysis of the organization set up for standardization. Conduct in-depth consultation with the Standards and Quality Control Authority (SQCA) and other relevant stakeholders.

Page 13 of 94

1.2. Preparation of a roadmap for the transition from SQCA to its successor Bhutan Standards Bureau (established under the Standards Act 2010).

1.3. Identifying roles of different concerned organizations and establishing coordination mechanism.

1.4 Providing a scheme of promotion of standards in industry and commerce specially highlighting the importance of standard as a means of consumer protection.

Activity 02 Standards formulation

1.1 Preparation of corporate plan for 3 years prioritizing actions for operation of the Bhutan Standards Bureau, and provide guidelines for the achievement of each of these prioritized actions.

1.2. Facilitate in creation of the Board provided for under Bhutan Standards Act, 2010 for overseeing the activities of standards formulation in different sectors of economy.

1.3. Appointment of technical committees in identified sectors such as food, construction, textiles and identifying interest to be represented on these committee and writing their terms of reference.

1.4 Appointment of specialized groups and panels to support technical committees in specialized areas.

1.5 Training of committee members on methodology of development of standard based on ISO Directives for formulation of standards.

1.6 Providing training to technical staff of the standards body who will be acting as technical secretaries to technical committee for formulation of standards.

Activities 03 Development of Regulatory Framework

1.1 Drafting of By-Laws for the establishment of Bhutan Standards Bureau (BSB) as required by the Bhutan Standards Act 2010.

1.2. Drafting Rules and regulations in consultation with stake holders for operation of product and management systems certification in Bhutan.

Activity 04 Development of certification schemes

1.1 Develop a certification Scheme for Product Certification based on ISO/IEC Guide 65 General Requirements for bodies Operating Product Certification so that it could get accreditation under the international system.

1.2.Develop a certification Scheme for Management systems certification based on ISO/IEC 17021:2011 Conformity assessment-Requirements for bodies providing audit and certification of management systems

1.3 Provide a thorough training on Conformity Assessment Procedures for product certification and management systems certification to the staff of the National Standards Bureau.

Page 14 of 94

1.4 Establishment of product and management certification committees which will oversee the functioning of both the schemes under the Regulation

1.5 Documenting detailed modalities of operation of both schemes as given above.

Activity 05 Establishment of TBT National Enquiry point

1.1 Training of staff of the standards body on provisions of TBT Agreement and operating the enquiry point.

1.2. Develop procedure for handling all national and international enquiries on technical regulation, standards and certification systems.

1.3 Providing assistance on how to answer overseas enquiries on any existing or proposed national standards, regulation and certification systems.

1.4 Providing assistance in answering domestic enquiries on any existing or proposed national standards, regulation and certification systems affecting trade of other signatory countries.

1.5 Guidance on disseminating information on proposed foreign regulations, government agencies, institutions, organizations, associations and others in the country via newsletters, e-mails and webpage.

1.6 Disseminating information of proposed national regulations of the country to WTO Member countries.

Activity 06: BAFRA Related activities

1.1 Assist the Bhutan Agricultural and Food Regulatory Authority (BAFRA) in preparation of perspective plan for 3 years for prioritized actions, and estimated additional staff requirements and qualifications.

1.2. Recommend solutions to overcome BAFRA capacity constraints.

1.3 Provide in-house training and plan overseas training programs for SQCA, BAFRA, and other stakeholders to obtain practical knowledge and skills relating to standards, quality control and food safety.

1.4 Assist in establishment and operationalization of SPS enquiry point to meet the obligations under the WTO regime

Activity 07 :Study on status of Testing Laboratories

1.1 Review the existing structure of laboratories in Bhutan.

1.2. Evaluation of testing requirements in the country in consultation with different stake holders and identify the areas for testing.

1.3 Make proposal for establishment /modernization of laboratories and elaborate an

Page 15 of 94

investment plan.

1.4 Make proposal for outsourcing possibilities for testing to neighboring countries with a model Memorandum of understanding. viii) Revised deployment schedule

17. The Deployment Schedule was revised as given below:

Page 16 of 94

II. ESTABLISHMENT OF BHUTAN STANDARDS BUREAU (BSB) AND ITS OPERATIONALIZATION

18. Placement of BSB under the relevant Ministry

The starting point for establishment of the Bhutan Standards Bureau was to place it under an appropriate ministry as envisaged in the Bhutan Standards Act 2010 and appoint a Chairperson of the Board. The Royal Government of Bhutan has identified the Ministry of Works and Human Settlement as the relevant ministry and has appointed the Hon’ble Minister of this ministry as the chairperson of the board. The Board is the highest policy making body under the Act.

19. Constitution of the Board

The Board has been constituted with cross sectional membership as given below:

Chairperson of the Board:

The Hon’ble Minister of the Ministry of Works and Human Settlement, Royal Government of Bhutan

Members of the Board:

a) Secretary, NEC Secretariat, b) Director General, Tourism Council of Bhutan, c) Director, Department of Trade, MoEA, d) Director, DUDES, MoWHS, e) Executive Director, BAFRA, MoAF, f) Drug Controller/Head, Drug Regulatory Authority, MoH, g) CEO, Bhutan Electricity Authority, MoEA, h) General Secretary, BCCI, i) General Secretary, Association of Bhutanese Industries, j) General Secretary, Exporters’ Association of Bhutan, k) CEO, BSB (Member Secretary).

The Board is vested with extensive mandate and functions under the provisions of the Act for making rules/regulation to execute its functions.

20. Transition from SQCA to BSB

As a part of transition to BSB, SQCA has delineated activities not relevant to the Bureau’s activities to be handed over to relevant organizations. As a first step SQCA has already handed over the following activities:

Page 17 of 94

(i) Bhutan Schedule of Rates (both civil and electrical) to Department of Urban Development, Engineering Services in the Ministry of Works & Human Settlement, &

(ii) Point Based System for procurement of works to Construction Development Board, MoWHS.

The remaining activities of SQCA which are not relevant to BSB need to be identified and handed over to concerned organizations to enable BSB to focus on its mandate given by the Bhutan Standards Act.

BSB OFFICE BUILDING

21. Development of organogram and institutional logo for BSB

The ADB MSME Team has assisted the Bureau in the development of an organogram and institutional Logo as shown below in close association with the Director, senior officers of BSB and the stakeholder participating in the sensitization workshop.

Page 18 of 94

22. Development of Logo for the Bhutan Standards Bureau

It was proposed by the ADB MSME Team that there would be need for finalization of BSB logo. BSB then invited tenders for submission of suitable proposals from contending organizations.

The following logo have been finalized and endorsed by the Board:

23. The First Meeting of the Board

The first meeting of the board was convened on 14 September 2011. ADB MSME team provided necessary assistance in the preparation of quality Policy, the agenda, speeches, and presentations to be made by the Director and Head of the Divisions, proceedings of the board and related documents.

The main decisions taken by the board, inter alias are:

a) Approval of the BSB Organogram, b) Approval of the BSB logo, c) Approval of certification Logos-Product certification logo and Management System Certification logo, d) Endorsement of appointment of the divisional heads and divisional organograms, e) Endorsed continuation of present incumbent Director as CEO of BSB, f) Endorsement of constitution of seven technical committees for formulation of Bhutan standards, g) Endorsement of vision, mission, core values & Quality policy of the Bhutan Standards Bureau.

With the first meeting of the Board, the transition from SQCA to BSB is complete.

First meeting of BSB Board Page 19 of 94

24. Vision, Mission, Core values and Quality Policy of Bhutan Standards Bureau

In consonance with the desire of the Director, BSB to set a long term vision of the Bureau, ADB MSME Team developed vision, mission, core values and quality policy for the Bureau which was endorsed by the Board in its first meeting.

VISION

‘To be the centre of excellence in Standards, Metrology and Conformity Assessment services’ MISSION

‘To promote and provide market relevant Standards, Metrology and internationally recognized Conformity Assessment services for industry, commerce, government and the society’ OUR CORE VALUES

 Customer focus  Professionalism  Transparency  Integrity  Team Sprit  Equity

OUR QUALITY POLCY OF THE BUREAU

The Bhutan Standards Bureau’s policy is to promote and provide demand driven internationally recognized standards and conformity assessment services to all sectors of economy in order to enhance competitiveness to both private & public institutions in meeting challenges of globalization.

 BSB understand the importance of impartiality and transparency in carrying out its activities, manage the conflict of interest ensure the objectivity in its activities

 BSB commits itself to continually improve and upgrade its internal systems and optimize its resources in order to add value to the services provided

 BSB shall promote quality of products and services while creating, maintaining and ensuring a safe and clean environment for sustainable development.

 BSB aspires to attain high standards of performance through a process of continuous improvement and the adoption of world’S best practices in its operation.

 BSB shall endeavor to build a heritage of commitment and excellence to be the “most trustworthy” choice of customers and be a responsible body practicing sustainable development.

Page 20 of 94

25. Three Year Corporate Plan for the Bhutan Standards Bureau

In consonance with the ADB MSME project provision, a Three Year Corporate Plan for the Bhutan Standards Bureau has been prepared in consultation with the Director and the Heads of the Divisions keeping in mind the mandates of the Bhutan Standards Act 2010 and for making the Bureau a self sustaining organization in the near future. The corporate Plan inter alia includes: a) Legal framework, b) Establishment of the Bureau, c) Functions of the Bureau, d) Strategies of the Corporate Plan, e) Schedule of activities under the Corporate Plan, f) Standards Promotion Strategy, g) Human Resource Development-Plans and projections: i) Projected requirements of human resource, ii) Training and skill development plan, h) Business plan of the Bureau: i) Projected expenditure, ii) Projected revenue.

The full text of the Corporate Plan is given in Volume II of this report.

26. LEGAL WORK: Rules and Regulation under the Bhutan Standards Act 2010

The Legal Expert undertook legal review and worked on all the items of the Legal TOR.The outcome is indicated below:

i) Review the legal framework related to the establishment of an SMTQ system in Bhutan.

All existing legal and other documents, which were relevant, were reviewed. Also as detailed in para 11 , all related documents and policy guidelines were studied.

ii) Identify gaps based on comparison with international practice.

The gaps with the international practice have been examined and have been detailed in Para 57, particularly in line with ISO IEC 17021 and ISO IEC 17065 which are being implemented for establishment of Management System Certification and product certification in BSB.

iii) Discuss the gaps in consultation with all relevant stakeholders and provide a commonly approved action plan for remedy action

This aspect was discussed in stakeholder’s workshop (See Para 14) as well as in the BSB Board Meeting (See Para 23) and following action plan has been prepared:

a) Establishment of Product certification body in accordance with ISO IEC 17065 (See Para 46) and

b) Establishment of Management System Certification Body in accordance with ISO IEC 17021(See para 47).

Page 21 of 94

27. Proposed Legal Framework under the BSB Act 2010

iv) Drafting of Statutes and By-Laws for the establishment of Bhutan Standards Bureau (BSB) as required by the Bhutan Standards Act 2009 including regulations to implement the Standards Act.

In accordance with provisions of the Bhutan Standards Bureau Act,2010 following rules /regulations have been identified:

a) Bhutan Standards Bureau (Certification) Regulation, 2011- Draft has already been prepared and submitted to the Bureau for finalization and adoption (See Para 49).

b) The proposed areas identified for development of rules/regulations/procedures are:

 Bhutan Standards Bureau ( Functioning of the Board) Regulation,2012  Bhutan Standards Bureau ( Appointment Agents) Regulation,2012  Bhutan Standards Bureau (Constitution of advisory Committees) Regulation,2012  Bhutan Standards Bureau (Constitution of Appellate Committee) Regulation,2012 v) Assist the Government in revising or redrafting existing laws or drafting necessary rules and guidelines on the request of the Government.

This is broadly covered by the action under previous item iv.In addition to above ,no additional request arose.

28. Legal framework under BAFRA

During the inception stage, in meetings with the stakeholders, specially the Ministry of Agriculture and Forestry, and the lead body- BAFRA for the Food Act of Bhutan, 2005, it was informed that the ‘Codex Alimentarius’ has been accepted as the food standards applicable in Bhutan.The Codex Alimentarius is being adopted under the Food Act and its interface with the provisions in the Standards Act, 2010, is provided in section 2 of the Standards Act etc, for development of standards and constitution of inspection, testing and accreditation bodies.

29. Printing of Bhutan Standards Act 2010

The Bhutan Standards Act 2010 was passed by the Bhutan Parliament in July 2010. One of the strong reasons for the timely promulgation of this Act was the ADB MSME Project and the implementation of different components of this project centres round the Standard Act. But due to paucity of funds, the SQCA has not been able to carry out the work. Since the project was on, and activities under the project being aimed at instituting the Bhutan Standards Bureau and operationalizing it, ADB provided funds from the project for printing 2500 copies of the Act (1000 copies to be submitted to the National Assembly Secretariat and rest making available for use of stake holders).

Page 22 of 94

III. DEVELOPMENT OF INFRASTRUCTURE FOR FORMULATION OF STANDARDS

30. Terms of Reference and Organogram of Standardization Division

A Standardization Division has been created in BSB with the following terms of reference and organization structure:

TERMS OF REFERENCE:

a) To Prepare national standards in different sectors of economy to promote industrial development particularly for Micro, Small & Medium Enterprises, exports of Bhutan good and services, environmental protection, social responsibility and energy conservation,

b) To promote standardization in the country for up gradation of quality of goods and services in different sectors of economy to establish Brand Bhutan by organization of standards promotion programmes and workshops, publication of promotional brochures,

c) To organize research in standardization where necessary for development of standards for indigenous products particularly MSME products.

ORGANOGRAM OF STANDARDIZATION DIVISION

STANDARDIZATION DIVISION

SAARC ISO/IEC Standards National Committee Committee

Standards Standards Promotion Formulation & & Sales Section research Section

Engineering Non-engineering Standards Standards Publication standards Unit standards Unit Research Unit Promotion Unit Sales Unit

Page 23 of 94

31. Standards Development Infrastructure

The National Standards are developed by well-knit Technical committees as provided for in section 11(c) of the Act representing government departments, industry & industry associations, technical institutions and consumer organizations. A three level technical structure for committees as shown below have been proposed:

The Bhutan Standards Bureau will provide secretarial facilities to the technical committees and one of the officers will act as member secretary.

32. Areas of standardization

During various discussions, interaction meetings and workshops, following sectors of economy have been identified as potential areas for standards development in the country:

i. Engineering (Civil & Mechanical), ii. Food and Agriculture, iii. Electrical and electronics, iv. Basic and management systems, v. Pharmaceuticals and traditional medicines, vi. Textile, vii. Timber and wood products.

33. Constitution of Technical Committee

After extensive deliberations, the above seven areas have been identified for development of standards. To facilitate BSB to constitute technical committees to develop standards in these areas, the proper designation, proposed scope of work, composition, proposed subjects to be taken for standards formulation of these committees are given below:

Page 24 of 94

34. Engineering Technical Committee (TC-01) a)Terms of reference

To assess, prioritize and formulate Bhutan national standards to cope up with the emerging needs and technological advancement in the engineering sector b)Composition

i. School Planning and Building Division, Dept. of Education, MoE, ii. Department of Urban Development and Engineering Services, MoWHS, iii. National Housing Development Corporation Limited, iv. Thimphu City Corporation, MoWHS, v. Department of Roads, MoWHS, vi. Department of Agriculture, Engineering section, Ministry of Agriculture and Forests, vii. Construction and Development Department, Bhutan Power Corporation, viii. Lhaki Cement, Gomtu, Cement Manufacturer’s representative, ix. Bhutan Board Products Limite, x. Contractors Association of Bhutan, xi. Royal Bhutan Institute of Architects, xii. Construction Development Board. MoWHS, xiii. College of Science & Technology, xiv. BSB Officer-Member Secretary.

c) Proposed subjects for standards formulation

Draft Document available for review/ revision: i. BTS-001-2001 Code of Practice for Plumbing, ii. BTS-002-2003 Building Code- Structural Design-Part 1,Section 1-Basis of design, safety and loads, iii. BTS-003-2003 Building Code -Structural Design-Part 1-Section2 Concrete structures, iv. BTS-004-2003 Building Code -Structural Design-Part 1- Section 3 Pre-stressed concrete Structures, v. BTS-005-2003 Building Code -Structural Design-Part 1- Section 4-Foundations, vi. BTS-006-2003 Building Code -Structural Design-Part 1- Section 5 Timber structures, vii. BTS-007-2003 Building Code -Structural Design-Part 1-Section 6-Prefabricated structures, viii. BTS-008-2003Building Code -Structural Design-Part 1-Section 7 Steel structures, ix. BTS-009-2003 Building Code -Structural Design-Part 1-Section 8 Masonry structures, x. BTS-010-2003 Building Code -Building services-Part 2-Section 1 Electrical installations, xi. BTS-011-2003 Building Code -Building services-Part 2-Section 2 Installations of lifts, xii. BTS-012-2003 Building Code -Building services-Part 2-Section 3 Lighting and ventilation,

Page 25 of 94

xiii. BTS-013-2003 Building Code -Building services-Part 2-Section 4 Air conditioning and heating, xiv. BTS-014-2003 Building Code –Building services-Part 2-Section 5 Acoustic, sound installation and noise control, xv. BTS-015-2003 Building Code –Building services-Part 2-Section 6 Fire Protection, xvi. Standards for Timber Doors & Windows, xvii. Urban Roads Standard, xviii. Specifications for Building & Road Works, xix. Specifications for Electrification Works, xx. Bhutan Schedule of rates, xxi. Labour and material coefficient.

New proposed subjects

1. Cement, 2. Reinforcement steel, 3. HDPE Pipes, 4. Bitumen, 5. Guidelines for seismic detailing.

35. Food and Agriculture Technical Committee (TC-02)

a) Terms of reference

To develop standards in the field of food and agriculture including Good Agricultural Practices (GAP) and adoption of ISO, Codex standards and standards of trading partners for promotion of international trade.

b) Composition

i. Bhutan Agriculture & Food Regulatory Authority(BAFRA), MoAF, ii. Bhutan Chamber of Commerce and Industries, iii. Department of Agriculture, MoAF, iv. Department of Public Health, MoH, v. Department of Cottage and Small Industries, MoEA, vi. Bhutan Agro industries, vii. Hotel Taj Tashi, Thimphu, Hotel representatives, viii. BSB Officer –Member Secretary. c) Proposed subjects for standards formulation

i. Packaged Natural Mineral Water ii. Packaged drinking water iii. Extracted honey iv. Tomato ketchup v. Fruit squashes vi. Orange juice vii. Jams, jellies and marmalade,

Page 26 of 94

viii. Apple juice ix. Biscuits x. Wafers xi. Cakes xii. Tea xiii. Dressed chicken xiv. Sterilized milk xv. Pasteurized milk xvi. Homemade pickles and appetizers xvii. Good Agricultural Practices

36. Electrical and Electronics Technical Committee (TC-03)

a)Terms of reference

To develop national standards for electrical and electronics products (and manufacturing processes) with focus on quality and safety requirements of both locally produced and imported electrical / electronics goods, and to liaise with regional and international standardizing institution to harmonize standards with them. b) Composition

i. Bhutan Electricity Authority, MoEA, ii. Department of Energy, MoEA, iii. Bhutan Telecom Limited, iv. Yarab Enterprises, v. College of Science & Technology, vi. Department of Urban Development & Engineering Services. MoWHS, vii. Bhutan Chamber of Commerce and Industries, viii. National Housing Development Corporation Limited, ix. Bhutan Power Corporation Limited, x. Bhutan Infocom & Media Authority, BICMA , xi. BSB Officer –Member Secretary.

c)Proposed subjects for standards formulation

i. Electrical wires and cables ii. Switches & socket outlets iii. Switchgears iv. Control gears v. Electrical Appliances vi. Communication/IT/Multimedia products

Page 27 of 94

37. Basic and Management Systems Technical Committee (TC-04) a) Terms of reference

To establish / adopt basic standards such as units of measurement and management system standards such as ISO 9000 series, ISO 14000 series, ISO 22000 series and other similar standards for use in commerce and industry in Bhutan. b) Composition

i. Department of Industry, MoEA, ii. Department of Trade , MoEA, iii. BAFRA, MoAF, iv. Tourism Council of Bhutan, v. Department of Agriculture, MoAF, vi. Quality Assurance and Standardisation Division, MoH, vii. Bhutan Chambers of Commerce and Industry, viii. National Environment Commission, ix. Construction Association of Bhutan, x. Royal University of Bhutan, xi. National Housing Development Corporation, xii. BSB Officer- Member Secretary,

c) Proposed subjects for standards formulation

i. ISO 9000:2005 Quality management systems-Fundamentals and vocabulary, ii. ISO 9001:2008 Quality management systems- Requirements, iii. ISO14001:2004 Environmental Management systems- Requirements with guidance for use, iv. ISO 22000: 2005 Food Safety management Systems- Requirements for any organization in the Food Chain, v. ISO TS 22003:2007 Food Safety management systems- Requirements for bodies providing audit & certification for food safety management systems, vi. ISO 80 000:2009 Quantities and units:Part 1 General, vii. ISO 26000:2009 Social responsibility, viii. ISO 27001:2005 Information technology- Security techniques - Information security management systems- Requirements, ix. ISO IEC 17021: 2011 Conformity assessment-Requirements for bodies providing audit and certification for management systems, x. ISO IEC 17025:2005 General requirements for the competence of testing and calibration laboratories,

Page 28 of 94

38. Pharmaceuticals and Traditional Medicines Technical Committee (TC-05) a) Terms of reference

To formulate national standards on pharmaceutical formulations and traditional medicines derived from medicinal plants and traditional formulations. b) Composition

i. Director General, Department of Medical Services, Ministry of Health, ii. Deputy Superintendent, National Traditional Hospital, Thimphu, iii. PRU, National Institute of Traditional Medicines, iv. Drug Controller, Drug Regulatory Authority, MoH, v. Bhutan Chamber of Commerce & Industry (BCCI), vi. Department of Cottage and Small Industries, MOEA, vii. Essential Medicine Technical Division, MoH, viii. Quality Assurance and Standardization Division, MoH, ix. BSB Officer –Member Secretary,

c) Proposed subjects for standards formulation

i. Standards for Packaging and Labelling for Indigenous medicines, ii. Standards for Shapes, colours, size etc for the indigenous medicines, iii. Indigenous medicinal plant products.

39. Textiles Technical Committee (TC-06) a) Terms of reference

To formulate standards on traditional Bhutan fabric and tradition handicrafts which have potential for exports.

b) Composition

i. Textiles Academy of Bhutan, ii. National Handloom Association of Bhutan, iii. Handicrafts Association of Bhutan, iv. National Womens’ Association of Bhutan, v. Department of Cottage and Small Industries, MoEA, vi. Department of Trade, MoEA, vii. Bhutan Chamber of Commerce and Industry, viii. Weaving Academy of Bhutan, ix. BSB Officer –Member Secretary. c) Proposed subjects for standards formulation

i. Standards on yarns ii. Standards on nomenclature iii. Standards on Yathra ( textile from Bumthang)

Page 29 of 94

40. Wood and Timber Products Technical Committee (TC-07) a) Terms of reference

To prepare Bhutan Standards on timber and wood products including bamboo products having demand in the country and having potential for exports.

b) Composition

i. Wood Crafts Centre. Thimphu, ii. Saw Mills Association of Bhutan, iii. Wood-based Association of Bhutan, iv. Handicrafts Association of Bhutan, v. Department of Cottage and Small Industries, MoEA, vi. Natural Resource Development Corporation Ltd, vii. FRDD, Department of Forestry, MoAF, viii. Department of Trade, MoEA, ix. Bhutan Chamber of Commerce and Industry, x. Construction Association of Bhutan, xi. Bhutan Board Products Ltd, xii. BSB Officer - Member Secretary. c) Proposed subjects for standards formulation

i. Wood Particle boards( Medium Density) for general purposes, ii. Standards for doors and windows, iii. Plywood for General Purposes-specification, iv. Standards on furniture, v. Panelling & Flooring standards, vi. Finishing Materials Standards, vii. Standards on Designs and loads for furniture.

41. Manual for Standards Development

A Manual was developed in 2004 but with passage of time and with the promulgation of Bhutan Standards Act 2010 this manual has become outdated and fresh manual has been developed to guide technical officers engaged in standards formulation. The main aspects covered in the manual are:

1. Introduction, 2. Organization for standards development, 3. Constitution of Technical Committee, Subcommittees and Panels, 4. General guidance for members of committee, 5. Development of the national standards- project approach, 6. Publication and Distribution of standards, 7. Adoption of ISO/IEC Standard.

Page 30 of 94

8. Committee deliberations:

a) Convening the Meetings, b) Preparation and issue of Agenda, c) Action Prior to Meeting, d) Cancellation and Postponement of Meetings, e) Action During Meeting, f) Proceedings and Minutes, g) Follow up Action on the Minutes.

The Manual for Standards Development is contained in Volume II of this Report.

42. Training of Technical Committee Members

Two training programmes were organized for the Technical Committee member to make them understand the modalities of standards formulation and role technical committee members play in this endeavour. This was organized with the objective of ensuring uniformity in approach among all the technical committees engaged in the development of the national standards:

a) Training programme for non-engineering technical committee members and b) Training programme for engineering technical committee members.

43. Bhutan Standards Developed for publication

There are 21 standards prepared by SQCA and finalized for publication by the previous Engineering Committee constituted during UNIDO Project in 2004. These standards were placed before the Board for adoption as Bhutan National Standards. While adopting these standards,the Board felt that they should be reviewed by the current Engineering Committee.

The Following Two Technical committees were convened in 24 & 25 October 2011 where ADB MSME Team Leader provided on the job guidance on conducting technical committee meetings and preparation of agenda and minutes for the meeting to BSB Officers who are hereafter the Member Secretaries to the technical committees.

Engineering Technical Committee (TC01) which met on 25 October 2011, considered the 21 standards prepared by SQCA and finalized for publication by the previous Engineering Committee constituted during UNIDO Project in 2004, in accordance with the decisions of the Board for adoption as Bhutan National Standards.The Engineering Committee constituted subcommittees to review them for any changes required and then adopt them as Bhutan Standards:

i. BTS-001-2001 Code of practice for plumbing ii. BTS-002-2003 Building Code- Structural Design-Part 1,Section 1-Basis of design, safety and loads iii. BTS-003-2003 Building Code -Structural Design-Part 1-Section2 Concrete structures

Page 31 of 94

iv. BTS-004-2003 Building Code -Structural Design-Part 1- Section 3 Pre-stressed concrete Structures v. BTS-005-2003 Building Code -Structural Design-Part 1- Section 4-Foundations vi. BTS-006-2003 Building Code-Structural Design-Part 1- Section 5 Timber structures vii. BTS-007-2003 Building Code -Structural Design-Part 1-Section 6-Prefabricated Structures viii. BTS-008-2003Building Code -Structural Design-Part 1-Section 7 Steel structures ix. BTS-009-2003 Building Code -Structural Design-Part 1-Section 8 Masonry structures x. BTS-010-2003 Building Code –Building services-Part 2-Section 1 Electrical installations xi. BTS-011-2003 Building Code –Building services-Part 2-Section 2 installations of lifts xii. BTS-012-2003 Building Code –Building services-Part 2-Section 3 Lighting and ventilation xiii. BTS-013-2003 Building Code –Building services-Part 2-Section 4 Air conditioning and Heating xiv. BTS-014-2003 Building Code –Building services-Part 2-Section 5 Acoustic, sound installation and noise control xv. BTS-015-2003 Building Code –Building services-Part 2-Section 6 Fire Protection xvi. Standards for timber doors and windows xvii. Urban roads standards xviii. Bhutan Schedule of rates xix. Labour and material coefficient xx. Specification for building roads works xxi. Specification for electrical work

First Meeting of TC 01 Engineering Technical Committee

Page 32 of 94

The Basic and Management Systems Technical Committee (TC 04) which met on 24 October 2011 considered the following 10 ISO/IEC Standards and in principle agreed to adopt them under dual numbering Systems of ISO as Bhutan Standards for urgent used in the certification systems being developed by the Bureau:

i. ISO 9000:2005 Quality management systems-Fundamentals & vocabulary ii. ISO 9001:2008 Quality management systems- Requirements iii. ISO 14001:2004 Environmental Management systems- Requirements with guidance for use iv. ISO 22000: 2005 Food Safety management systems- Requirements for any organization in the Food Chain v. ISO TS 22003:2007 Food Safety management systems- Requirements for bodies providing audit & certification for food safety management systems vi. ISO 80 000:2009 Quantities and units:Part 1 General vii. ISO 26000:2009 Social responsibility viii. ISO 27001:2005 Information technology- Security techniques - Information security management systems- Requirements ix. ISO IEC 17021: 2011 Conformity assessment-Requirements for bodies providing audit and certification for management systems x. ISO IEC 17025:2005 General requirements for the competence of testing and calibration laboratories

First Meeting of TC 04 Basic & Management Systems Technical Committee

Page 33 of 94

IV. DEVELOPMENT OF INFRASTRUCTURE FOR CERTIFICATION

44. Terms of reference and organogram of Certification Division

A Certification Division has been created in BSB with the following terms of reference and structure

TERMS OF REFERENCE

a) To establish and operationalize product certification scheme in Bhutan in accordance with ISO IEC Guide 65:1996,

b) To continue Brand approval scheme till such time Mandatory certification comes into force,

c) To establish and operationalize management system certification in accordance with ISO IEC 17021:2011 for ISO 9001, ISO 14001 and ISO 22000 certification,

d) To promote certification and quality control in the industry and service sector by organizing promotional programmes and training,

e) To get accreditation for both product certification and management systems certification schemes from reputed international accreditation body for ensuring international acceptability of certificates issued by BSB and to enable it to enter into MRA’s with trading partner:

ORGANOGRAM OF CERTIFICATION DIVISION

CERTIFICATION DIVISION

Product certification Management Systems Section Certification Section

Mandatory Voluntary Occupational Quality Food Safety Environmental certification Certification Health & Safety Management Management Management Unit Unit Unit Systems Unit Systems Unit Systems Unit ( OHSAS 18000) ( ISO 9001) ( ISO 22000) ( ISO 14001)

Page 34 of 94

45. Certification infrastructure

Bhutan, in absence of infrastructure for certification, has to lean on to other countries for certification of their products for seeking export opportunities. Different discussions and workshops revealed that with growing economy and industrial base in Bhutan, third party certification would lend support to economic developmental process.

Two types of certification infrastructure are envisaged as provided for in section 4(d) of the Bhutan Standards Act 2010:

i. Product certification based on ISO IEC Guide 65 - General requirements for bodies operating product certification systems and

ii. Management systems certification based on ISO IEC 17021 - Conformity assessment- Requirements for bodies providing audit and certification of management systems,

46. Establishment of Product Certification

A complete set of documentation comprising the following would be developed in conformity with ISO/IEC Guide 65:1996/ISO IEC 17065 and within the legal frame being developed under the Bhutan Standards Act 2010 for product certification for facilitating them to get accreditation to enable them to enter into MRA’s with trading partners:

a) Quality Manual- This has been designed to translate the requirements of ISO/IEC Guide 65 /ISO IEC 17065 as it applies in BSB operations within the regulatory framework. This manual has been prepared and submitted to BSB for implementation.

The Manual for Product Certification is contained in Volume II of this Report

b) Procedure Manual- The instruments of operation of the system are operating procedure. These Operating Procedures have been identified in the manual and operational details would be worked out later.

c) Guidelines Manual- Guidelines provide elaboration and explanation for operating personnel to clearly understand provisions of the Guide 65/ISO IEC 17065. Areas where guideline have been elaborated have been identified

The outline of product certification documentation is given in Annexure III

47. Establishment of Management Systems Certification

The potential areas for Management systems certification identified by BSB are ISO 9001 Quality Management system, ISO 14001 Environmental Management system and ISO 22000 Food Safety Management System.

Page 35 of 94

A complete set of documentation comprising the following has been outlined in conformity with ISO/IEC 17021: 2011 for management system certification to operationalize BSB Management System Certification:

a) Management System manual- This has been designed to translate the requirements of ISO/IEC 17021 as it applies in Management Systems operations within the proposed regulatory framework. This manual has been prepared and submitted to BSB for implementation.

The Manual for Management Systems Certification is contained in Volume II of this Report

b) Procedure Manual-The instruments of operation of the management system are procedures. These procedures have been identified in different activity areas and are given in the manual,

c) Guidelines Manual- Guidelines provide elaboration and explanation for operating personnel to clearly understand provisions of the ISO/ICE 17021 in certain important areas. The areas have been identified where guideline would be elaborated,

The outline of Management Systems certification documentation is given in Annexure IV

48. Implementation of documented system

If system designed is not implemented in the operation of Certification Schemes, no useful purpose would be served. Therefore implementation programme should be introduced for operation of the scheme and grant of license in order to streamline the operation in different areas needing certification. For this five distinct phases have been identified for implementation:

a) Providing documented system available to concerned officials,

b) Creating formal structures for the operation of the scheme such as establishment of Certification Committee, impartiality committee, Management Review Committee, Appeals Committee and Complaint redressal mechanism,

c) Appraisal and audit of the implemented system for certification in BSB,

d) Actual operation of the system by inviting applications from potential applicants for grant of license,

e) After granting at least 5 licenses, BSB may seek accreditation for its product certification and management system certification schemes.

49. Legal frame work for certification

As operation certification schemes-one for product certification and another for Management Systems Certification- would require a legal frame work as provided for in the act, ADB MSME Team has prepared a consolidated draft “The Bhutan Standards Bureau (Certification) Regulations, 2011” and submitted to BSB so that legal process go hand in hand with the development of these two certification systems under BSB.

Page 36 of 94

50. Bhutan Standards Certification Marks

It was proposed by the ADB MSME consulting team that there would be need for Standard Marks (See Section (i) of the Act) for both product and management systems certification. BSB had invited tenders for submission of suitable Standard Marks for certification both product certification and system certification. These have now been finalized by a specially appointed committee by BSB and have been endorsed by the Board in its first meeting.

Standard Mark for Management Systems Standards Mark for product certification

51. Accreditation of Certification Bodies

Both product certification and management systems certification schemes when established will start awarding certificates to interested organizations but these certificates will get international acceptability in the global trade only after they get international accreditation based on international criteria.

The system would be designed as indicated in the contact variation and the certification systems would be developed for going to certification after fulfilling the requirements of ISO IEC Guide 65:1996 and ISO IEC 17021:2011. This will require the following three components to be completed:

i) A cadre of auditors and lead auditors/inspection staff to be developed, ii) Five companies to be prepared for each management systems as prospective companies for certification. This is the requirement of accreditation body and iii) Appointment of accreditation body.

When BSB certification systems are ready, the following accreditation bodies having equal credibility in the world may be approached for getting accreditation for product and management system certification of BSB:

i) Norwagian Accréditation Body (NORSK AKKREDITERING), ii) Joint Accreditation System of Australia and New Zealand(JAS-ANZ), iii) Dutch Accreditation Council (RAAD VOOR DE ACCREDITAE- RVA), Netherlands, iv) DAR(TGA), German Accreditation Body, v) National Accreditation Board for Certification Bodies (NABCB) QCI India.

Page 37 of 94

The following procedure is followed by the accreditation agency for awarding accreditation to certification bodies: i) Document review for each certification scheme prepared by the certification body, ii) Onsite assessment:

a) Office assessment of the certification body operation for each certification scheme and

b) Witness assessment of audit process of selected companies, at least one for each scheme which has applied for certification. This is essentially to assess competence of audit team and technical experts.

Page 38 of 94

V. LABORATORY MANAGEMENT SERVICES- STRENGTHENING TESTING INFRASTRUCTURE

52. Terms of Reference and Organogram of Metrology& Laboratory Management Services Division

A Metrology and laboratory Management Services Division has been created in BSB with the following terms of reference and structure:

TERMS OF REFERENCE

To establish and operationalize accredited Metrology Referral Laboratory and Product Testing Laboratory for:

a) Providing calibration services to measurement system used under weights and measures,

b) Providing calibration services to industry,

c) Providing testing facilities to product and management system certification,

d) Conducting research and development for standards formulation.

ORGANOGRAM OF METROLOGY & LABORATORY MANAGEMENT SERVICES DIVISION

METROLOGY & LABORATORY SERVICES DIVISION

Product Testing National Metrology Section Section

Engineering Non-engineering Length Mass Unit Volume & Regional Product Unit Product Testing &Temp Unit Pressure Unit Metrology Unit Services Testing Unit

Page 39 of 94

Infrastructure for laboratory management

53. Metrology Referral and Calibration Laboratory

The Bhutan Standards Bureau (BSB) has a Metrology Referral and Calibration Laboratory established with the support of UNIDO. There were six UNIDO expert reports on various facets of laboratory management for its establishment between 2005 and 2010. UNIDO has equipped this laboratory with secondary metrology standards with calibration certificates but all calibration certificates have expired. This needs to be strengthened and operationalized with the provision of environmental control room and recalibration of equipment to provide calibration services as envisaged under the Bhutan Standards act.

This Laboratory together with its regional Laboratory at Mongar will be equipped under assistance by UNIDO to provide calibration and verification services for equipment and measuring devices used under the weights and measures so that accurate weights and measures for mass, length, volume, and temperature are used in the commerce. Besides, the laboratory would provide calibration service to industry.

The credibility of the laboratory will be established and its certificates would be acceptable only if it is accredited by an internationally reputed Laboratory Accreditation Body approved under International Accreditation Cooperation (ILAC). Therefore accreditation of Metrology Referral and Calibration Laboratory would be essential.

54. Product Testing Laboratory

The Bhutan Standards Bureau (BSB) has a Material Testing Laboratory (now re-designated as Product Testing Laboratory) with good testing facilities but some of them are not relevant for BSB operations and may be handed over to other relevant agencies. To make it suitable for testing under BSB for standards development and product and system certification, it would require further strengthening and accreditation to give credible certificates.

In accordance with the broad mandates and assistance covered under component 4 of MSME project “(ii) assessment for laboratory needs not covered by UNIDO”. The support from UNIDO has more focus on Metrology Referral and Calibration Laboratory and not on Product Testing Laboratory. To upgrade the product testing laboratory, it has been proposed for purchase of following equipment:

SL. Testing Specification Purpose Approximate Approximate NO Equipment cost in Nu. cost in USD. 1 Electric Oven 50oC to 250 oC Heating 45,000/- 1000/- 2 Spectrophoto Spectrochem To conduct all 800,000/- 17000/- meter UV 101 or chemical analysis equivalent 3 Chemical ------To conduct all 400,000/- 8400/- Laboratory Set up chemical analysis Total 12,45,000/- 26400/-

Page 40 of 94

BSB has inherited ‘Material Testing Laboratory” available with SQCA which was equipped to test construction material. BSB is now trying to develop a broad based product testing laboratory to cater to the needs of mainly product and management systems certification. These two schemes are being developed and would be operational by next year. These equipments would help upgrade and strengthen the product testing laboratory for testing cement, steel and chemical impurities in food samples such as metallic impurities- arsenic, lead etc, and pesticide residues. The most important equipment in this connection is spectrophotometer with broad resolution. The equipment given at Sl. No. 1 & 3 would provide backup system. This laboratory will have basic testing facility to reduce dependence on outside laboratories for routine testing.

55. Status of Product Testing Laboratories in Bhutan

This subproject was taken to support product testing which the product testing laboratory of BSB will not be able to undertake. These could be laboratories within Bhutan or laboratories in the neighbouring countries. The main objective was to make available information on testing facilities so that in the event of need generated from product certification, a similar exercise is not required.

To establish a status of product testing laboratories as envisaged in the activity 7 of the project, the following activities were under taken:

a) Review the existing structure of laboratories in Bhutan, b) Evaluation of testing requirements in the country in consultation with different stake holders and identify the areas for testing, c) Make proposal for establishment /modernization of laboratories and elaborate an investment plan, d) Make proposal for outsourcing possibilities for testing to neighboring countries with a model Memorandum of understanding.

An in-depth study and survey was conducted under the ADB MSME project to know the product testing facilities available in the country in:

b) Government sector, c) Public sector undertakings, d) Private sectors and e) Laboratories attached with manufacturing companies. and recommend ways and means to utilize them for the purpose of BSB operations especially under product certification. It may also be necessary to outsource specialized and costly testing requirements to accredited testing laboratories in the neighbouring countries.

A well-structured questionnaire was sent to identified thirty (30) testing laboratories soliciting information on:

a) Testing facilities available,

Page 41 of 94

b) Testing personnel available, and c) Implementation of management systems in the laboratories

Since relevant information was not coming forth, visits were organized by the ADB MSME team to laboratories in and around Thimphu to know exact facilities available with the laboratories and their administrative setup.

The data collected was analyzed which revealed that most of these laboratories have minimal testing facilities to cater to the needs of testing for which they were actually established. However the following testing facilities have been identified to be used in the standardization and certification activities:

a) Product Testing Laboratory with BSB b) Consumer testing laboratory with DoT under MoEA c) Central Food Testing Laboratory with BAFRA d) Quality Control Laboratory with Institute of Traditional Medicine e) Public Health Laboratory with MoH

A proposal for modernization and strengthening Product testing laboratory with BSB is underway (See para 54). Similarly discussion with other laboratories suggested that they are in a process of up gradation of their laboratories. These facilities can only be used selectively as they are designed to meet ant national standards for products that are being developed now under BSB.

Bhutan being small country, it would not be feasible to establish most sophisticated and costly testing facilities in the country for parameters being used sparingly by industry and government sectors. It would therefore be desirable to outsource such testing facilities to accredited laboratories in the neighbouring countries. A model Memorandum of Understanding has been prepared and is a part of this report.

This two pronged approach would help meet the requirements of testing generated by BSB new activities of standardization, product certification and management systems certification. It is recommended that BSB may start establishing links and may initiate process of getting into MOU with reputed accredited laboratories in the neighbouring countries so that work is not hampered when testing need is generated.

A detailed report on the study and survey conducted is given in Annexure V

Page 42 of 94

VI. DEVELOPMENT OF INFRASTRUCTURE FOR INTERNATIONAL COOPERATION

56. Terms of Reference and Organogram of International Relations Division

An International Relations Division has been created in BSB with the following terms of reference and structure:

TERMS OF REFERENCE

To establish International Relations for:

a) Operation of WTO TBT Enquiry Point for receipt and dissemination of information on standards, regulations and conformity assessment for the benefit of industry and promoting international trade,

b) Strengthen the Technical Information Centre with latest technical information of standards, technical regulation and conformity assessment procedures,

c) Maintaining multilateral cooperation with international standardizing bodies like International Organization for Standardization (ISO), International Electrotechnical Commission (IEC), Codex Alimentarius Commission (CAC), international Conformity Assessment bodies like International Accreditation Forum(IAF), International Laboratory Accreditation Cooperation (ILAC),

d) Maintaining cooperation with regional bodies of relevance to BSB operation such as SARSO, PAC, APMP, APLAC etc.,

e) Establish bilateral cooperation between trading nations such as India, Thailand, Malaysia and preparing instruments of cooperation such as MOUs, and

f) Providing accreditation coordination services for identifying and entering into agreement with accreditation bodies for the purpose of accreditation of Bhutan product and management System certification bodies, testing laboratories, inspection bodies and personnel certification. ORGANOGRAM OF INTERNATION RELATIONS DIVISION

INTERNATIONAL RELATIONS DIVISION

WTO-TBT National International Accreditation Coordination Enquiry Point Co-operation Section Section (NAFP)

Technical

Information Center Bilateral Multilateral Co- Co-operation operation Unit Unit Page 43 of 94

Infrastructure for International Cooperation

57. International Scenario

The globalized economy of today demands common standards for evaluating and judging quality. Standardization, metrology, testing and quality play a major role in assimilation of technology, effecting economy in production and stimulating competitiveness. With the faster pace of development of the Bhutan economy, there is a need to participate in international and regional fora such as ISO, IEC, Codex and SAARC to benefit from international efforts in areas of standardization and conformity assessment. As Standards and conformity assessment systems are used as the main instruments by different countries to create non- tariff barriers against free flow of goods and services, the World Trade Organization (WTO), to mitigate these obstacles to international trade, has brought out international agreements, such as Technical Barriers to Trade (TBT) and Sanitary and Phyto Sanitary (SPS) measures and has mandated the countries to establish TBT& SPS Enquiry points.

58. Establishment and Operationalization TBT National Enquiry Point

SQCA had set up a TBT Enquiry Point together with Technical Information Centre under the UNIDO Project. This however is not functional as the Bhutan Standards Act was not promulgated and the National Standards Body was not established. There is need to revitalize the enquiry point taking into account development under the WTO with Bhutan Standards Bureau becoming operational under the MSME project.

Guidelines and procedures were developed on the following for successful operation of the National Enquiry Point:

a) Procedure for handling all national and international enquiries on technical regulation, standards and certification systems,

b) Guidelines on how to answers overseas enquiries on technical regulation, standards and certification systems,

c) Guidance on disseminating information on proposed foreign regulations, government agencies, institutions, organizations, associations and others in the country via newsletters, e-mails and webpage,

d) Established linkage for disseminating information on proposed national regulations of the country to WTO Members countries (Fig 01).

Page 44 of 94

WTO Secretariat

National National National National National National Enquiry Point Enquiry Point Enquiry Point Enquiry Point Enquiry Point Enquiry Point

International Standardizing bodies

Technical BSB Information MoEA, National National Nodal Point Centre Enquiry Point Regional Standardizing

bodies

Mo EA Mo Mo H DGPC BCCI BAFRA NEC BEA BICMA

A&F

Fig.01 Communication linkages of TBT National Enquiry Point

Page 45 of 94

59. UP gradation and operationalization Technical Information Centre

This facility is directly linked with the operation of the TBT National enquiry point to provide latest information of regulations, standards and conformity assessment procedures. A clear linkage is shown in Fig 02. Guidelines and procedure have been developed for an efficient operation of the Technical Information Centre.

Exporters Government International & Industry standardizing bodies Regional standardizing bodies Technical information TBT National centre Enquiry point

National National National National National Enquiry Point Enquiry Point Enquiry Point Enquiry Point Enquiry Point

Fig.02 Channel of communication and information gathering

60. Establishment and Operationalization SPS National SPS Enquiry Point

The SPS measures Article 7 Transparency and Annex B clause 3 Enquiry Points- mandates member countries to establish SPS Enquiry Points responsible for answering all reasonable questions from interested Members. With the elevated capability of BAFRA, it would require establishment and operationalization of SPS Enquiry point. Despite several initiatives taken, this segment of the project could not progress as envisage due to paucity of manpower available with BAFRA.

There was a preliminary visit made by the ADB MSME team and discussions were held with BAFRA officials during the inception period (See para12) and a member of BAFRA joined the study team of Management Personnel to Singapore, Thailand and Malaysia ( See Para 66). The MSME Team Leader had a meeting with Executive Director of BAFRA to chalk out the plan for implementation of the component relating to BAFRA. But no interest was shown by them for pursuing the matter further. Therefore no progress was made in this direction.

Page 46 of 94

60. Establishment of Accreditation Coordination Section

Bhutan being a small country and establishment of accreditation infrastructure a very costly venture, it was recommended that BSB could create a small unit for accreditation coordination services (See Fig.03) for identifying and entering into agreement with accreditation bodies for the purpose of accreditation of Bhutan product and management System certification bodies, testing laboratories, inspection bodies and personnel certification.

Bhutan Standards Bureau

International Relations Division

Accreditation Coordination Section

Product Manageme Inspection Personnel Laboratory certification nt system Bodies Certification system certification Certification certification (ISO/IEC Guide 65) (ISO/IEC17021) (ISO/IEC 17020) (ISO/IEC 17024) (ISO/IEC17025)

Accreditation of Certification Bodies (ISO/IEC 17011/17025)

Fig.03 Proposed Structure of Accreditation Coordination Unit

Page 47 of 94

VII. ADMINISTRATION AND FINANCE SUPPORT SYSTEM

61. Terms of Reference and Organogram of Administration and Finance Division

An Administration and Finance Division has been created in BSB with the following terms of reference and structure:

TERMS OF REFERENCE

The main function of this division would be:

a) Recruitment, deployment and promotion of employees within the limitations imposed under the act,

b) Organize various training programmes for the employee of the Bureau to keep them abreast with the development in their fields of operation,

c) Prepare plans for requirement of personnel as work expands and prepare scheme of contracting manpower as envisaged in the Act to cater to the needs of the Bureau,

d) Preparation of annual report of Bureau,

e) Logistical support to the BSB in terms of Administration, IT, Legal and procurement of goods and services,

f) Preparation of annual budget for the Bureau for submission to the Royal Government and to maintain proper books of accounts as per the BS Act 2010.

ORGANOGRAM OF ADMINISTRATION AND FINANCE DIVISION

ADMINISTRATION AND FINANCE

DIVISION

(Head)

Finance & Administration Accounts

Finance Accounts Recruitment, Human resource Deployment & Promotion development & training

Page 48 of 94

62. Infrastructure for Administration and Finance

Terms of reference of these sections is given below:

Administration Section

a) To administer recruitment, deployment and promotion of employees within the limitations imposed under the act,

b) Organize various training programmes for the employees of the Bureau to keep them abreast with the development in their fields of operation,

c) Prepare and update plans for recruitment of personnel as and when required,

d) To prepare scheme of contracting manpower as envisaged in the Act to cater to the needs of the Bureau and

e) Preparation of annual report of Bureau.

Finance and accounts section

a) Preparation of annual budget for the Bureau b) To maintain accounting expenditure for the Bureau

Legal Unit

a) Provide Legal support to the Bureau b) Represent the Bureau in all legal matters c) Advise the Bureau on the interpretation of the Bhutan Standards Act 2010

Procurement Unit

a) Procurement work b) Inventory Control

Page 49 of 94

VIII.TRAINING AND EMPOWERMENT

63. Training needs analysis

For proper and efficient implementation of the Standards Act, and giving meaningful effect to the principles of Standardization and conformity assessment, it is necessary that there should be capacity building exercise. The present structure may not be able to give effective results. Therefore there is an urgent need to impart comprehensive training and initiate the learning process on standardization and conformity assessment to the incumbent officers and staff of the Bhutan Standards Bureau, especially when the Act speaks of the Policy of “Brand Bhutan” in terms of international presence of Bhutan products and services. In addition, there should be facilitation for training in ISO, TBT and other international agreements and protocols. This will enhance the capacity for formulation of standards, laboratory management, certification systems and also with regard to application and enforcement of laws dealing with standards and the process of standardization.

64. In-house training imparted a) In-house basic training imparted

The following basic in-house training programmes was conducted by the ADB MSME Team:

Sl. Theme of Training Target Group Date of Number No training of participa nts 1 Basic training on Standardization BSB Officers 30/5/2011 18 and conformity assessment including Director

2 Constitution of committees Technical staff of 31/5/2011 5 Formulation / adoption of Standardization Forenoon) international /regional standards division of BSB

3 Training on conformity Technical staff of 31/6/2011 4 assessment Certification division (Afternoon) i. Product certification of BSB ii. Management certification.

4 Training on International Technical staff of 01/6/2011 2 cooperation including International (Forenoon) establishment of TBT enquiry Cooperation division point of BSB

5 Training on Laboratory Technical staff of 02/06/2011 20 Management including outline of Laboratory Services Afternoon) ISO IEC 17025 division of BSB

Page 50 of 94

Training Session in BSB by ADB Consulting Team Leader

b) In-house Division Wise Training Imparted

The following division wise in-house training was conducted by the ADB MSME Team:

Sl. Theme of Training Target Group Date of Number of No training participant s 1. Training on Product certification BSB Officers 19/09/2011 4 based on ISO IEC 17065 for from establishment of the product Certification certification Scheme Division

2. Training on Management System BSB Officers 21/09/2011 4 certification based on ISO IEC from 17021 for establishment of the Certification Management certification Scheme Division 3. Training on drafting of standards in Technical staff 22/09/2011 5 different technology areas of Standardization division of BSB 4. Training on conducting technical Technical staff 22/09/2011 5 committee meeting and drafting of of agenda and minutes of the meeting Standardization division of BSB 5. Training on adoption of Technical staff 22/09/2011 5 international, regional and trading of partner standards Standardization division of BSB 6. Training on documentation Certification 12/10/2011 4 management system certification Division in accordance with ISO IEC 17021

Page 51 of 94

c) Training to Technical Committee Members

Two training programmes were organized for the technical committee members on methodology of development of national standards and adoption of international standards

Sl. Theme of Training Target Group Dates of Number of No training participants 1 Training on modalities of standards Technical formulation and role of technical Committee committee members to ensure Members ( 10/10/2011 20 uniformity in approach among all the Non- technical committees engineering)

2 Training on modalities of standards Technical formulation and role of technical Committee committee members to ensure Members 11/10/2011 21 uniformity in approach among all the (Engineering) technical committees

65. In–House training proposed

The following training programmes are proposed as work on the project progresses:

1) Training on drafting of standards in different technology areas, 2) Training on conducting technical committee meeting and drafting of agenda and minutes of the meeting, 3) Training on adoption of international, regional and trading partner standards, 4) Training to technical staff on food safety, 5) Training on establishment and operationalization of SPS Enquiry point in BAFRA, 6) Basic training on product certification based on ISO/IEC Guide 65, 7) Basic training on management systems based on ISO/IEC 17021, 8) Training on Quality control and food safety including establishment of SPS Enquiry Point.

Training programmes abroad

66. Study Visit of the Management Personnel

The project envisages, inter alia, institutional and capacity development. As these are new initiatives, it will be very useful to provide an opportunity to the concerned officials to visit some countries and centres where such concepts/activities have been implemented successfully.

The consulting team recommended a study visit by a composite delegation comprising the following to the standards and conformity assessment institutions in Malaysia, Singapore and Thailand from 15-28 February 2011:

i) Mr. Phuntsho Wangdi, Director, SQCA,

Page 52 of 94

ii) Mr. Chewang Rinzin, Head, Standardization & Certification Division, SQCA (and ADB Project Manager), iii) Mr. Rinzin Namgyel, Head, Technical Monitoring Division, SQCA, iv) Mr. Karma Tshetrim, Civil Engineer, SQCA (and ADB Asst. Project Manager), v) Mr. Sangay Tenzin, Laboratory Officer, BAFRA.

Discussion Meeting with SIRIM Malaysia Discussion Meeting with SPRING Singapore

The ADB consulting team identified the following relevant institutions in these countries for the study tour and provided guidelines and questionnaires on areas of study for the benefit of operatioinalization of BSB.

Institutions visited in Singapore:

i) SPRING Singapore- Standards Body of Singapore, ii) National Metrology Center (NMC), iii) Agri-Food & Veterinary Authority of Singapore (AVA), iv) IEC Asia Pacific Regional Center.

Institutions visited in Kuala Lumpur, Malaysia

i) Department of Standards Malaysia (DSM)-Standardization, ii) Department of Standards Malaysia (DSM)-Accreditation, iii) SIRIM Berhad- Quality Assurance System-Conformity Assessment, iv) SIRIM Berhad -WTO-TBT National Enquiry Point, v) National Metrology Laboratory (NML) for laboratory accreditation, vi) Malaysia productivity Corporation (MPC) for standards promotion.

Institutions visited in Bangkok, Thailand

i) Thai Industrial Standards Institute (TISI)- National Standards Body of Thailand, ii) National Institute of Metrology Thailand (NIMT), iii) N.M. Technical Center Co. Ltd. & W. Dhavepatana Co. Ltd. (Private calibration lab & equipment suppliers), iv) TISI, WTO-TBT National Enquiry Point.

Page 53 of 94

This study visit abroad has helped in initiating organization of BSB as successor of SQCA and development of policies and programmes for the Bhutan Standards Bureau.

67. Training Abroad for Project Secretarial and Accounts Personnel

The following two officers were sent abroad for training: i) Mrs. Dechen Wangmo, Secretarial Assistant, MSME Project, BSB

Mrs. Dechen Wangmo has undergone a two weeks training on Advanced Skill- set with Computer Application for Executive Assistant/Secretaries in 21st Century at Asha Training Consultant, Thailand, Bangkok from 25 July to 8 August, 2011. Management assistants and professional secretaries are facing an ever-increasing workload, in jobs considered among the most difficult, both in the private and public sectors. This unique course was specifically designed for competent workers to obtain current knowledge and competencies in the practice of this demanding profession. The focus of the course was on practical skills, tools and technique to improve productivity, build a winning team with management and peers, and maximize value to our organization. The course inter alia covered the role of high-tech executive secretaries, storing and managing information including security and confidentiality information, prevent crises, manage conflicts, prevent role conflict, and harness the untapped opportunities brought about by the power of new technologies etc. This course would be of value in the Bhutan Standards Bureau. ii) Mrs. Neeta Pradhan, Accountant, MSME Project, MoWHS

Mrs Neeta Pradhan, Accountant, Bhutan Standards Bureau has undergone training on Financial Management and Auditing with Computer Application organized at Asha Training Consultant, Thailand, Bangkok from 25 July to 8 August 2011. The purpose of this course was to provide the information that is needed for sound economic decision making. The two weeks course in Advanced Accounting and Auditing with Computer Applications included a wide range of subjects which were very relevant and useful in operations of the Bureau. The course was designed in such a way that it really benefitted the participants to enhance professional knowledge.This besides theoretical and practical classes, included field trips to various offices and organizations for practical exposure.

68. Proposal for Training abroad

The consulting team has further proposed the following training programmes abroad in consultation with the Director and different heads of divisions. The proposals for these programmes have already been sent to ADB for approval.

Page 54 of 94

SL. Description No.of Duration in Remarks No Staff weeks

A STANDARDIZATION DIVISION

1 Training on Mechanics of Standards 2 Two weeks Development (ISO/IEC Directives, Part 1 and 2), SPRING Singapore

2 Adoption of national, regional & international 1 Two weeks standards(ISO/IEC Guide 21-Part 1 & 2), SIRIM , Malaysia, TISI, Thailand

3 Training on Standards Promotion and 1 Two weeks Sales - BIS, India.

B CERTIFICATION DIVISION

1 ISO 9001, Quality Management Systems- 1 1 week Lead Auditors Training 2 ISO 14000, Environment Management 1 1 Week Systems- Lead Auditors Training 3 ISO 22000, Food Safety Management 1 Week Systems- Lead Auditors Training 4 Product certification (Mandatory) 2 2 weeks 5 Product Certification (Voluntary)

C METROLOGY & LABORATRORY SERVICES DIVISION

1 Laboratory Quality System, Management( 2 One week ISO/IEC 170251- Lead Auditors Training- NABL India/NML Malaysia 2 Training in Testing Services- BIS Central 10 Two Weeks Laboratory, New Delhi, India

D INTERNATIONAL RELATIONS DIVISION

1 Familiarization/ training on the workings of 2 Two weeks TBT enquiry point in SPRING (Singapore) and Bureau of Product Standards (Philippines) 2 Short-term training for librarian in Bangkok 1 Two-three /Singapore /Malaysia Weeks

Page 55 of 94

IX. PROCUREMENT OF OFFICE EQUIPMENT

69. Office equipment for project office

For the smooth and efficient execution of works under the project, need was felt that necessary office equipment should be procured and placed in the project office. A list office equipment given below was prepared and submitted for:

a) Photocopy Machine- 1 Number. b) LaserJet Colour Printer- 1 Number. c) Laser Jet Black and White Printer d) Desktop Computer- 1 Number. e) Laptops- 2 Numbers. f) Digital Camera- 1 Number. g) Scanner- 1 Number. h) Presentation Screen

These equipment have been received and commissioned.

70. Office equipment for efficient operation of BSB

BSB as successor of SQCA, is a new organization given a wide ranging responsibility as mandated under the Bhutan Standards Act 2010. It has now five newly established divisions:

a) Standardization Division (SD), b) Certification Division (CD), c) Metrology & Laboratory Services Division (M&LSD), d) International Relations Division (IRD), e) Administration & Finance Division (AFD).

With the expansion in the Bureau’s Organogram, responsibilities have accordingly increased; human resources has started increasing in strength and so are the requirements - such as offices equipment, furniture, consumables and so forth to ensure efficiency and productivity of Human Resource in BSB. The efficiency and effectiveness of BSB will depend on the successful operation of the five divisions and they will need additional office equipment to strengthen the capacity of offices to increase productivity. Therefore the following equipment have been proposed:

Equipment purchase proposal details are as under: a) Laptops 5 (Five) Numbers –one for each Division

Laptops are proposed for convenience and mobility as it can be carried anywhere for use. Divisions under the BSB are expected to move around and do lots of field work pertaining to inspection & audit under certification, seminar, workshops and frequent meetings in the international forums pertaining to standards, metrology, conformity assessment activities etc

Page 56 of 94

to name a few. The proposed laptops will be used mostly by the division heads and shared by his/her staff on need basis. b) 10 (ten) Desktop Computers –two for each Divisions.

Ten Desktops are proposed as most of the desktops in the office are out dated and are badly in need of up gradation. Two desktops are proposed for each division. Out of the five divisions, as much facilities as possible has to be provided for the administration division as it is an entirely new division created under BSB since it must function independent of its previous AFD under MoWHS, being an autonomous entity now. New staffs are being recruited or transferred from the MoWHS. An account personal is already transferred from MoWHS who needs a full-fledged office equipment to work as current facilities are far too short for even the existing staff. BSB is expecting 10 new recruits over the remaining period of the 10th plan. c) 1 (one) Heavy Duty Colour Printer.

The proposal is for the Certification Division (CD) as they will have to provide colour printed licenses /certificate for certification licensee/dealers/manufacturer for approved products /system. Existing colour printers are already overloaded with the work of all the five divisions. This requirement is specific to CD as they have to award colour printed certificates for the approved products under the existing brand approval scheme. d) 1 (one) black & white printer.

As already mentioned accounts has started functioning under the Administration Division which has to print lots of accounts related documents both for the project as well as for the normal functioning of the BSB. It is proposed to buy 1 (one) more additional Black & White color printer in addition to the one bought for the consultant which is in use. e) 1 (one) DSLR Camera.

In addition to the earlier one camera procured which has been pooled by the BSB for general use one additional will ease the pressure on the existing one and facilitate smooth functioning of the office as most of the divisions will be doing lots of field work for product certification, inspection etc. Being in a digital age BSB would also like to have document recorded by photo graphic demonstrations for reports on - such as the laboratory facilities, factory and other evidences in pictures. Standards Division will be also carrying out many works related to research and compilation where most of the work could be documented to be referenced in photographs. Work for other divisions can also be documented in pictures for which cameras are essential. It is proposed for procuring at least one additional camera with the earlier quoted rates which is still valid.

Page 57 of 94

70. Installation of a high speed internet leased-line connection at BSB office

In the IT-savvy world that we live in today, the internet has become a crucial tool that is so widely used by individuals and organizations to enhance efficiency, productivity and communication, and as a source of comprehensive and up-to-date information. And as the use of internet becomes more popular and necessary, the number of users increase and hence the demand for high-speed and high-quality internet connections.

BSB, established as an institution that would foster industrial efficiency, technology transfer, environment protection, consumer welfare and international trade through its core mandates of standardization and certification, will need easy and fast access to relevant information and the means to be reliably networked with partners worldwide and stakeholders within the country.

It is therefore proposed that the existing leased-line internet connection at BSB with a connection speed of only about 194 Kbps (kilo bytes per second) supplied by a private internet service provider be upgraded to a 1 Mbps (mega bytes per second) high-speed connection that could be availed from Bhutan Telecom (Bhutan Telecom proposal attached Annex II). This up-gradation will entail installation of new and high capacity sensor devices, router, modem and other accessories to sustain the high speed connection and the increasing number of users, with the convenience of a Wi-Fi wireless internal connection.

This up-gradation will have the following benefits to BSB:

 Un-interrupted and dedicated high speed internet connection to all BSB staff/officers,  Easy and fast access to information available online,  Speed and ease of accessing and downloading/uploading documents to/from frequently used websites of ISO, IEC, WTO etc.,  Convenience of use as the internal connection would be wireless, accessible from anywhere within the office premises,  Easy internal file sharing,  Faster and reliable communication and file transfer (within or outside Bhutan) using emails or other internet-based tools such as facebook, tweeter, skype etc.,  Facilitate works of BSB Technical Committees on standardization and certification which would reduce the need to travel,  Easier and regular participation in the works of ISO and IEC of which Bhutan (BSB) is a member. Most correspondence and even the webnair seminars of ISO/IEC works are done online.

The proposed up-gradation of the internet supply to the two BSB office buildings would cost about Nu.1,76,150.00 (about USD 3915.00) which includes equipment and one-time installation costs. BSB will meet the monthly rental and the associated annual charges

Page 58 of 94

X.FINAL OUTPUTS 71. The Final Outputs of the project are summarized in the Table below:

Table 02 Final Outputs , Deliverables and Reports

1. The Bhutan Standards Bureau, the national standards body of Bhutan has been established as successor of SQCA with its new organization structure and institutional logo as provided for in the Bhutan Standards Act 2010.

2. BSB functions have been reorganized into divisions and they have been made functional with distinct organograms and terms of reference.

3. Standardization process in BSB has started with 7 Technical committees created defining their terms of reference, composition and possible areas for formulation of standards. In deciding the composition of technical committees for formulation of national standards, all institutions involved in the Bhutan standards, metrology, testing, and quality (SMTQ) system have been included to improve efficiency and division of tasks.

The Following Two Technical committees were convened in 24 & 25 October 2011 which decided to finalize the Bhutan Standards for printing: a)Engineering Technical Committee (TC01), considered the 21 standards prepared by SQCA and finalized for publication by the previous Engineering Committee constituted during UNIDO Project in 2004, in accordance with the decisions of the Board for adoption as Bhutan National Standards. The Engineering Committee adopted 16 of them as Bhutan Standards and rest differed for further consultations:

i. BTS-001-2001 Code of practice for plumbing ii. BTS-002-2003 Building Code- Structural Design-Part 1,Section 1-Basis of design,safety and loads iii. BTS-003-2003 Building Code -Structural Design-Part 1-Section2 Concrete structures iv. BTS-004-2003 Building Code -Structural Design-Part 1- Section 3 Pre-stressed concrete Structures v. BTS-005-2003 Building Code -Structural Design-Part 1- Section 4-Foundations vi. BTS-006-2003 Building Code -Structural Design-Part 1- Section 5 Timber structures vii. BTS-007-2003 Building Code -Structural Design-Part 1-Section 6-Prefabricated Structures viii. BTS-008-2003Building Code -Structural Design-Part 1-Section 7 Steel structures ix. BTS-009-2003 Building Code -Structural Design-Part 1-Section 8 Masonry structures x. BTS-010-2003 Building Code –Building services-Part 2-Section 1 Electrical installations xi. BTS-011-2003 Building Code –Building services-Part 2-Section 2 installations of lifts xii. BTS-012-2003 Building Code –Building services-Part 2-Section 3 Lighting and

Page 59 of 94

ventilation xiii. BTS-013-2003 Building Code –Building services-Part 2-Section 4 Air conditioning and Heating xiv. BTS-014-2003 Building Code –Building services-Part 2-Section 5 Acoustic, sound installation nd noise control xv. BTS-015-2003 Building Code –Building services-Part 2-Section 6 Fire Protection xvi. Standards for timber doors and windows b)The Basic and Management Systems Technical Committee (TC 04) considered the following 10 ISO/IEC Standards and adopted them under dual numbering Systems as Bhutan Standards for urgent used in the certification systems being developed:

I. ISO 9000:2005 Quality management systems-Fundamentals and vocabulary II. ISO 9001:2008 Quality management systems- Requirements III. ISO 14001:2004 Environmental Management systems- Requirements with guidance for use IV. ISO 22000: 2005 Food Safety management systems- Requirements for anyorganization in the Food Chain V. ISO TS 22003:2007 Food Safety management systems- Requirements for bodiesproviding audit & certification for food safety management systems VI. ISO 80 000:2009 Part 1 General VII. ISO 26000:2009 Social responsibility VIII. ISO 27001:2005 Information technology- Security techniques – Information security management systems- Requirements IX. ISO IEC 17021: 2011 Conformity assessment-Requirements for bodies providing audit and certification for management systems X. ISO IEC 17025:2005 General requirements for the competence of testing and calibration laboratories

4. Two certification schemes based on ISO IEC Guide 65 & ISO IEC 17021 have been developed to take up product and management system certification for which documented system has been developed to operationize them in the near future and start issuing certificates.

5. A Certification committee has been constituted as provided for in section 14 of the Bhutan Standards Act 2010 which will oversee the functioning of both the schemes under the Regulation. Also Impartiality Committee, appeals Committee and Complaint Committee have been constituted as provided for in certification procedsures.

6. A comprehensive in-house training was organized to provide training to BSB officers of different divisions on standardization, conformity assessment including certification, laboratory management and international cooperation including TBT enquiry point.

7. As standardization is the main activity of the Bureau, a more comprehensive empowerment programme was conducted for member secretaries of the technical committees and for the members of the technical committees on methodology of

Page 60 of 94

development of standard based on ISO Directives & BSB Manual prepared by ADB MSME Team for formulation of standards. 8. The study tour for officials abroad as proposed by the ADB MSME Team have been completed which included a member from BAFRA. Two more persons looking after secretariat function and accounts have been trained in Thailand.

9. A Three Year Corporate plan has been prepared giving perspective for the next three years prioritizing actions for operation of the Bhutan Standards Bureau, and provide guidelines for the achievement of each of these prioritized actions.

10. To provide legal back up to certification both for product and management systems, a draft “ Bhutan Standards Bureau (Certification) Regulation 2011 has been developed and submitted to BSB for approval by the Board.

11. The legislative instruments other than given at serial number 10 such as rules and regulations as provided for in different sections of the Act have been outlined.

12. Proposal for strengthening of BAFRA with solutions to overcome BAFRA capacity constraints along with a list of 3 years of prioritized actions was discussed with BAFRA.

13.An intensive survey was conducted by the ADB MSME Team with assistance from the Project Management and report has been included giving a plan for Strengthening testing infrastructure and laboratories and an elaborate investment plan including a model Memorandum of Understanding for entering into agreement with outsourced laboratories in the neighbouring countries.

14.Procedures for handling, answering overseas and domestic enquiries and dissemination of such information to interested parties in the country and to WTO member countries on existing or proposed national standards, regulation and certification systems have been developed.

15. A Manual for development of standards has been prepared and submitted to the Bureau for use by officer engaged in standards development.

16. Proposal for additional Training Abroad for different divisions of BSB has been developed and submitted.

17. Need for office equipment, Laboratory equipment and installation of a high speed internet facility has been identified and proposal submitted.

18. Detailed proposal has been prepared and submitted for undertaking Additional Work as Contract Variation.

19. Draft Final Report has been prepared which will be followed by Final Report

Page 61 of 94

XI. WAY FORWARD

ADDITIONAL WORK THROUGH CONTRACT VARIATION

72. Background and Rationale

This project is aimed primarily at capacity development of National Standards Bureau and BAFRA. In the discussions with the Director and the Project Coordinator, it has been emphasized from the beginning that there is need to undertake additional work so as to enable and assist National Standards Bureau to undertake its mandated functions and responsibilities. There has been much debate and much expectations since the Act was passed. Further, Bhutan is an economy in transition and its enterprises have to be made competitive regionally and globally. There is new FDI 2010 Policy.The investors need to be confident about the standard of Bhutanese enterprises. Hence it is essential that the new National Standards Bureau should commence functioning as per its new mandate. Having regard to these, it was agreed between the SQCA and IDRG CS at the Negotiations stage that some urgent and high priority additional work should be undertaken by the Consulting Team as Contract Variation under this project to be funded from the savings of the project funds. This was duly and formally reflected in the Agreed Minutes of the Contract Negotiations. It was also agreed by the ADB in its comments on the Agreed Minutes. This of course is subject to concurrence and approval by the ADB when specific proposals are submitted. It was stated in the Inception Report that further consultations will be undertaken to come up with specific proposals in the mid-term report by the consulting team (around end of June, 2011). It was proposed to categorize and prioritize activities into three categories:

I. Category A- Activities as per TOR-These are mandatory, II. Category B- Additional work as contract variation under this project to be funded from savings/additional resources, III. Category C- Activities which need to be undertaken to make Bhutan Standards Bureau completely functional as per international norms and to be funded from other available funds/resources.

73. Progress under the present project period

The project has proceeded on the expected lines covering the following main activities in accordance with TOR:

a) Creation and functioning of Bhutan Standards Bureau, b) Creation of standardization infrastructure, c) Creation of certification infrastructure, d) streamlining of laboratory management infrastructure, e) Creation of international cooperation infrastructure, f) Creation of administration and finance infrastructure, g) Formulation of product certification scheme, h) Formulation of Management System certification scheme, i) Strengthening of TBT National Enquiry Point, j) Strengthening technical information centre,

Page 62 of 94

k) Proposed reorganization and strengthening of product Testing Laboratories, l) Establishment of Accreditation Liaison Office, m) Drafting of Certification Regulation 2011 to provide backup system for certification activities under the Bhutan Standards Act, 2010, n) Training to concerned technical staff of different division of BSB and BAFRA, o) Training to members of technical committees engaged in formulation of standards, p) Training Abroad to a high level delegation in the beginning of the project to establish the Bureau on sound footing.

74. Additional Work Required

With completion of the current TOR, Bhutan Standards Bureau will be in place and would commence functioning. However, to make Bhutan Standards Bureau fully operational and discharging all the functions and responsibilities of a National Standards Body (NSB), further activities will need to be undertaken. The four additional major tasks and broad areas would be:

i. Formulation of National Standards for Bhutan, ii. Product Certification, iii. Management Systems Certification, iv. Accreditation of product and management Systems certification schemes.

In accordance with the above –mentioned scheme of prioritization in para 3, it is proposed that the following activities be undertaken as additional work under contract variation under Category B, namely, “Additional work as contract variation under this project to be funded from savings/additional resources”. a) Formulation of National Standards

The Seven Technical committee identified for formulation of Bhutan Standards would start formulating Bhutan National Standards in priority sectors of economy:

i) Engineering (Civil & Mechanical), ii) Food and Agriculture, iii) Electrical and electronics, iv) Basic and management systems, v) Pharmaceuticals and traditional medicines, vi) Textiles, vii) Timber and wood products.

b) Product Certification

Up gradation of existing Brand approval scheme into a full-fledged Bhutan Brand (See preamble of the Bhutan Standards Act 2010) as mark of quality in the country. In addition it will be capable of introducing standard quality Mark in other areas such as construction material, cement etc.

Page 63 of 94

c) Management System Certification

The Management System Certification capability would be established to undertake certification of Quality Management Systems (ISO 9001), Environmental Management Systems (ISO 14001) and Food Safety Management Systems (ISO 22000). 75. What will remain to be done?

97. With the completion of tasks in para 3 above,the two certification bodies would be operational and would start issuing certification for companies applying for it. Thereafter one area will remain, namely Accreditation to get these certificates international recognition. In view of the additional time and funding required, it is proposed to put it under Category C, namely, Activities which need to be undertaken to make National Standards Bureau completely functional as per international norms and to be funded from other available funds/resources. This has been placed under Category C for the following reasons:

a) Accreditation process takes time ( more than 2 years),

b) Cost involved for accreditation is high and would require additional funding,

c) Would require trained and registered auditors for the three management systems ( ISO 9001,ISO 14001 and ISO 22000). 76. Proposal for Contract Variation

It is proposed that the activities under para 3 may be added to the current TOR as Contract Variation for additional work. This will be in accordance with the basic theme of the project which enunciated that “The Developmental objective of this Asian Development Bank funded project is to develop national organization and infrastructure for standards development, certification systems and testing for ensuring quality of goods and services and implementation of WTO Agreements on Technical Barriers to Trade (TBT) and Sanitary and Phyto-sanitary Measures (SPS) to facilitate entry of Bhutanese MSME products and services in international markets. The project will assist in the establishment and successful functioning of the Bhutan Standards Bureau to foster and promote standards and standardization activities as a means of advancing the national economy, benefiting the health, safety and welfare of the public, assisting and protecting consumers, protecting the natural environment, promoting industrial efficiency and development, facilitating domestic and international trade.”

77. Additional Terms of Reference (TOR)

. Additional Terms of Reference will be as below: a) Formulation of National Standards

To enable the Seven Technical committee identified for formulation of Bhutan Standards to start formulating Bhutan National Standards in priority sectors of economy:

i) Engineering ( Civil & Mechanical), ii) Food and Agriculture,

Page 64 of 94

iii) Electrical and electronics, iv) Basic and management systems, v) Pharmaceuticals and traditional medicines, vi) Textiles, vii) Timber and wood products, b) Product Certification

Assist to upgrade existing Brand approval scheme into a full-fledged Bhutan Brand (See preamble of the Bhutan Standards Act 2010) as mark of quality in the country. In addition it will be capable of introducing standard quality Mark for in other areas such as construction material, cement etc. c). Management System Certification

To establish Management System Certification capability to undertake certification of Quality Management Systems (ISO 9001), Environmental Management Systems (ISO 14001) and Food Safety Management Systems (ISO 22000).

78. Personnel Deployment Schedule

To undertake and complete the proposed additional work, following extra person months will be required: Field Home Total 1. Standards Expert-Mr. Sohrab 3.0 1.0 4 2. Legal Expert 0.5 0.5 1.0 3. National Expert for SPS 1.0 1.0

Total Additional Person Months 6

It is proposed to commence the additional work from first half of December, 2011 and to complete it by 30 June, 2012.

Page 65 of 94

ANNEXURE I TERMS OF REFERENCE

SUBPROJECT 3 has four components:

(i) micro, small, and medium-sized enterprises (MSME) development policy, strategy and incentive framework, and management of cost-sharing facility (CSF); (ii) capacity building for introduction of regulatory impact assessment (RIA); (iii) establishment of a central registry for secured transactions; and (iv) planning and organizing for the establishment of product standards and capacity building for regulating and implementing agencies. For each component,

One consulting firm will be engaged in accordance with the quality and cost-based selection method.

Component 4: Planning and Organizing for the Establishment of Product Standards and Capacity Building for Regulating and Implementing Agencies

Standards, Metrology, Testing, and Quality Specialist, Team Leader (international, 6 person-months)

1.The international consultant must have extensive experience in the area of standards, quality, and conformity assessment and have a solid understanding of the World Trade Organization (WTO) system in the evolving global economy. Special requirements include:

(i) thorough knowledge of international trade rules and the WTO Sanitary and Phytosanitary Standards agreement; (ii) thorough knowledge of international practices regarding the organizational structure ofnational standards authorities; (iii) experience in capacity building in the areas of the WTO Technical Barrier to Trade and Sanitary and Phytosanitary Standards agreements; (iv) experience in food regulations at the international (World Health Organization, food standards of Codex Alimentarius) and European (European Commission practices of the Directorate General for Health Consumer Affairs) levels; (v) experience in food testing, food inspection and implementation of hazard analysis and critical control points, good manufacturing practice, and good hygiene practice; and (vi) experience in managing projects and dealing with the local administration in an Asian country is an advantage.

Tasks and responsibilities include consultancy and preparing reports on the following activities.

(i) Conduct in-depth consultation with the Standards and Quality Control Authority (SQCA) and other relevant stakeholders for producing a restructured organization plan for the Bhutan Standards Bureau and a roadmap for the transition from SQCA to its successor Bhutan Standards Bureau (established under the Standards Act 2010).

Page 66 of 94

(ii) Produce a list of prioritized actions for the first 3 years of operation of the Bhutan Standards Bureau, and provide guidelines for the achievement of each of these prioritized actions. (iii) Provide a through training on development, formulation and adoption of National Standards and Conformity Assessment Procedures to the staff of SQCA. (iv) Develop a Scheme for Product Certification for SQCA product certification activities. (v) Map the role of all institutions involved in the Bhutan standards, metrology, testing, and quality (SMTQ) system and recommend how to improve efficiency and division of tasks. (vi) Review the existing structure of laboratories and elaborate an investment plan, taking into account outsourcing possibilities to neighboring countries. (vii) Assist the Bhutan Agricultural and Food Regulatory Authority (BAFRA) with the production of a list of 3 years of prioritized actions, and estimate additional staff requirements and qualifications. (viii) Recommend solutions to overcome BAFRA capacity constraints. (ix) Provide in-house training and plan overseas training programs for SQCA, BAFRA, and other stakeholders to obtain practical knowledge and skills relating to standards and quality control.

Legal Specialist (international, 2 person-months)

2.The legal expert will have over 10 years of experience in the area of international practices related to SMTQ and have a solid understanding of the WTO system and the evolving global economy. Special requirements include:

(i) extensive international knowledge of legislation related to WTO’s Technical Barrier to Trade and Sanitary and Phytosanitary Standards agreements; (ii) proven experience in reviewing existing legislation related to SMTQ, including metrology and product requirements; and (iii) experience in drafting legal texts.

Tasks and responsibilities include consultancy and preparing reports on the following activities. (i) Review the legal framework related to the establishment of an SMTQ system in Bhutan. (ii) Identify gaps based on comparison with international practice. (iii) Discuss the gaps in consultation with all relevant stakeholders and provide a commonly approved action plan for remedy action. (iv) Drafting of Statutes and By-Laws for the establishment of Bhutan Standards Bureau (BSB) as required by the Bhutan Standards Act 2010 including regulations to implement the Standards Act. (v) Assist the Government in revising or redrafting existing laws or drafting necessary rules and guidelines on the request of the Government.

Page 67 of 94

Standards Expert (national, 8 person-months)

3.The national standards expert will have a university degree, a thorough understanding of the history and development of the Bhutanese standards, and knowledge of sector products, e.g., agriculture, manufacturing, services, and tourism. The national expert will have experience working with international organizations, and must be proficient in English. The expert will work closely with the international SMTQ specialist and the international legal specialist. The national expert will undertake the following tasks.

(i) Under the guidance of the international specialists, collect and analyze information and data relating to standards of products and WTO requirements, and make these available in an organized and readable form. Translate into English as necessary. (ii) Arrange and organize trainings and stakeholder meetings, and assist in implementing discussions.

Page 68 of 94

ANNEXURE II

SENSITIZATION WORKSHOP ON ESTABLISHMENT OF THE BHUTAN STANDARDS BUREAU WITH VARIOUS STAKE HOLDERS

LIST OF PARTICIPANTS PRESENT:

List of participants is attached.

Venue: Conference Hall, SQCA Time: 9.0 AM – 1.0 PM Date: 14 January 2011

TOPICS OF DISCUSSION

1. A half-day sensitization workshop was organized under ADB funded MSME Project.The objective of the workshop was to:  Make aware the stakeholders on the roles and responsibilities of BSB as mandated by Bhutan Standards Act 2010.

 Explain the participants the role and relevance of standardization and the benefits the Bhutanese business could derive by implementing standards.

 Identify the potential areas of the standardization

 Initiate Implementation of the Bhutan Standards Act 2010 covering the following:

. Placing BSB under the relevant Ministry . Constitution of BSB Board . Propose organogram of BSB  Explain framework for Standards Formulation

 Suggest different functions under BSB such as Standards formulation, Product and System Certification, Laboratory Management, International Relations and Administration and Finance.

2. PROCEEDINGS OF THE SENSITIZATION WORKSHOP

2.1 Opening remarks by Director, SQCA

The Director SQCA welcomed the stakeholders in the Sensitization Workshop and explained that the workshop was convened to make aware the stakeholders on the roles and responsibilities of Bhutan Standards Bureau (BSB) being established under the Bhutan Standards Act 2010. The BSB is being created with the primary responsibility of developing national standards and ensuring quality in different sectors of economy under the ADB assisted MSME project.

The Director added that today the global economy centers round technology, standardization, transnational production systems and international competitiveness. The traditional natural boundaries and trade barriers are diminishing with technological and industrial developments taking place affecting global economy. The interdependence of nations has increased. This has led to a demand for a common denominator for evaluating

Page 69 of 94

and judging quality needs in the world market. The Standardization, metrology, testing and quality play a major role in assimilation of technology, effecting economy in production and stimulating competitiveness.

Standardization encapsulates technological results and becomes a vehicle for technology transfer while metrology, testing and quality are the key for facilitating trade and satisfying customers. Standards and conformity assessment systems are the main instruments used by different countries to create barriers for free flow of goods and services. To mitigate obstacles to international trade, the WTO has brought out international agreements under it such as TBT for facilitating international trade. Standardization, regulation and conformity assessment systems form core of these agreements as they are widely recognized to support economic development, facilitating trade and improving the quality of life. A TBT Enquiry Point would be set up in BSB to facilitate international trade.

Director further added that Bhutan is an emerging economy and has a mix of organized and unorganized sectors in manufacturing, agriculture as well as service sector. The unorganized MSME sector provides major employment and is responsible for producing goods for consumption in the country. In fact in Bhutan, the industrial base is provided by Micro, Small and Medium Enterprises (MSME).This potential of the country has not been fully exploited and implementation of standards and application of conformity assessment measures will pave the way for up gradation of quality and food safety and increase in certified handicrafts, traditional medicines and food products entering the export market.

The Director said standardization is necessary for setting bench mark so that it stimulates competitiveness not only within country but will stimulate trans-national competiveness. He also informed the house that Bhutan has already made its presence in the international forum. SQCA is a Correspondent Member of the International Organization for Standardization (ISO), participating member of International Electro-Technical Commission and closely associated with SAARC harmonization of standard committee.

Considering the importance of standardization infrastructure to accelerate the pace of development, the Director solicited the cooperation from all the stake holders in this endeavour to make the standards body operational as early as possible.

2.2. Standardisation explained by Chewang Rinzin, SQCA

Mr.Chewang Rinzin, Project Manager explained in his presentation as to what is meant by standardisation, why is it required, Who standardises and how to go about it. He informed the participants on the status of standardisation in Bhutan and the role of SQCA in standardisation. He also explained some of the misconception on standardisation.

Mr. Rinzin also highlighted various types of Standards bodies in existence and explained the Bhutan Standards Act 2010 and its mandates for establishment of Bhutan Standards Body. Mr. Rinzin explained that there is no umbrella institution for standards in Bhutan and the very concept of standardisations is just evolving. He further informed that in Bhutan there is general lack of awareness on standards, its benefits to company, society and to the country at large.

2.3. Presentation by Sohrab, MSME Consultant and Team Leader.

The Team Leader MSME Project explained the objective of the ADB funded MSMS project and made his presentation in two parts: The first part was on standardization and the second part was on how to go about establishing Bhutan Standards Bureau.

Page 70 of 94

Mr. Sohrab explained the basic concept of standardization and the role of standards, conformity assessment including certification in the global economy. He explained that International Trade Agreements such as TBT and SPS, their role as facilitators in international trade.

Mr. Sohrab went on explain the principle of standardization and the importance of its implementation and how standards control markets.The second part of the presentation essentially covered the following:

 the Establishment of BSB and affiliation of BSB with relevant ministry  The Constitution of Board under the Act  The proposed Structure of BSB (organogram)  Constitution of Standards formulation committees on various sectors of economy.  Certifications- both system and product  The need for third party certification and quality assurance of products and services.  Testing, Calibration and accreditation  TBT and SPS enquiry point

2.4 Discussions and comments from the participants:

a. The Managing Director of the Wood Craft Centre, Thimphu, expressed his appreciation for such enlightening workshop and expressed the need to develop standards for the wood based industry as priority area.

b. One of the participants said standards are good but the bottom line is that consumer does not understand its importance. He said developing standards and instituting quality infrastructure is costly whereas often consumer looks for cheap commodities. This, he said is against the consumer interest particularly to the lower and middle income groups. The Team Leader explained that standards facilitate growth of the industry and has long term benefits. BSB needs to educate consumers on the benefit of standardization.

c. One of the participants from health sector requested that instead of indentifying Institute of Traditional Medicine as one of the potential areas of standardization he suggested to keep medicine as a broad area of standardization so that pharmaceutical products could also be included.

d. The General Secretary of Construction Association of Bhutan requested all participants to disseminate information gathered in this workshop so that more people are informed on the standards and the need for it. Mr. Chewang Rinzin also reiterated the need for dissemination of information sensitized in this workshop.

Over 25 experts and professionals representing a cross section of stakeholder such as government organizations, manufacturers, export organization and regulators participated.

Page 71 of 94

ANNEXURE III

OUTLINE OF DOCUMENTATION FOR PRODUCT CERTIFICATION SCHEME BASED ON ISO IEC 17065(ISO Guide 65)

QUALITY MANUAL 1. GENERAL 1.1 Distribution list 1.2 Amendment Sheet 1.3 Table of contents 2. PROFILE OF CERTIFICATION MARKS SCHEME 3. MANAGEMENT OF QUALITY SYSTEMS MANUAL 4. GENERAL REQUIREMENTS 4.1 Legal and contractual matters 4.1.1 Legal responsibility 4.1.2 Certification agreement 4.1.3 Use of license, certificates and marks of conformity 4.2 Management of impartiality 4.3 Liability and financing 4.4 Non-discriminatory conditions 4.5 Confidentiality 4.6 Publicly available information 5 STRUCTURAL REQUIREMENTS 5.1 Organizational structure and top management 5.2 Mechanism for safeguarding impartiality 6. RESOURCE REQUIREMENTS 6.1 Certification body personnel 6.1.1 General 6.1.2 Management of competence for personnel involved in the certification process 6.1.3 Contract with the personnel 6.2 Resources for evaluation 6.2.1 Internal resources 6.2.2 External resources (outsourcing) 7. PROCESS REQUIREMENTS 7.1 General 7.2 Application 7.3 Application review 7.4 Evaluation 7.5 Review 7.6 Certification decision 7.7 Certification documentation 7.8 Directory of certified products 7.9 Surveillance 7.10 Changes affecting certification 7.11 Termination, reduction, suspension or withdrawal of certification 7.12 Records 7.13 Complaints and appeals 8. MANAGEMENT SYSTEM REQUIREMENTS 8.1 Options 8.2 General management system documentation (Option A) 8.3 Control of documents (Option A) 8.4 Control of records (Option A) 8.5 Management review (Option A)

Page 72 of 94

8.5.1 General 8.5.2 Review inputs 8.5.3 Review outputs 8.6 Internal audits (Option A) 8.7 Corrective actions (Option A) 8.8 Preventive actions (Option A)

APPENDIX A FUNCTIONAL ROLES AND RESPONSIBILITIES APPENDIX B LIST OF PROCEDURES ------LIST OF OPERATING PROCEDURES Sl. Doc. No. DOCUMENT TITLE No 1. PCS-P4.1-01 Procedure for legally enforceable certification agreement 2. PCS-P4.1-02 Procedure for use of license, certificate and mark of conformity 3. PCS-P4.2-01 Procedure for management of impartiality and conflict of interest 4. PCS-P4.6-01 Procedure for maintaining confidentiality of data and information 5. PCS-P4.6-02 Procedure for publically available information 6. PCS-P5.2-01 Procedure for operation of impartiality committee 7. PCS-P6.1-01 Procedure for management of competency for certification personnel 8. PCS-P6.1-02 Procedure for personnel selection, registration and control 9. PCS-P6.12-03 Procedure for identification of training needs and providing training 10. PCS-P6.1-04 Procedure for selection, registration and control of sub-contracted personnel 11. PCS-P6.2-01 Procedure for monitoring and evaluation of competence of personnel engaged in certification activities 12. PCS-P6.2-02 Procedure for qualification, assessment and monitoring outsourced bodies used for certification activities 13. PCS-P7.2-01 Procedure for processing of application 14. PCS-P7.4-01 Procedure for evaluation 15. PCS-P7.4-02 Procedure for resolving nonconformities 16. PCS- P7.6-01 Procedure for grant of certification 17. PCS-P7.9-01 Procedure for surveillance 18. PCS-P7.9-02 Procedure for recertification ( Renewal) 19. PCS-P7.10-01 Procedure for managing changes affecting certification 20. PCS-P7.10-02 Procedure for special audits/visit 21. PCS-P7.11-01 Procedure for termination, reduction, Suspension and withdrawal of certification 22. PCS-P7.12-01 Procedure for control of Product certification records. 23. PCS-P7.13-01 Procedure for complaint handling 24. PCS-P7.13-02 Procedure for appeals handling 25. PCS-P8.3-01 Procedure for control of documents 26. PCS-P8.4-01 Procedure for control of records 27. PCS-P8.5-01 Procedure for management and reviews 28. PCS-P8.6-01 Procedure for internal audits 29. PCS-P8.7-01 Procedure for corrective and preventive action

Page 73 of 94

ANNEXURE IV

OUTLINE OF DOCUMENTATION FOR MANAGEMENT SYSTEM CERTIFICATION SCHEME BASED ON ISO IEC 17021

Management System Manual 0. GENERAL 0.1 Distribution List 0.2 Amendment Sheet 0.3 Contents 1. GSB MANAGEMENT SYSTEMS CERTIFICATION PROFILE 1.1 Introduction 1.2 Management Systems Certification Scheme 1.3 Legal Status of GSB Management Systems Certification Scheme (MSCS) 1.4 Independence and objectivity 1.5 International Recognition for GSB MSCS activity 2. MANAGEMENT SYSTEMS MANUAL AND DOCUMENT CONTROL 2.1 Scope of management systems certification 2.2 Management of the manual 2.3 Document control 3. MSCS POLICY AND OBJECTIVES 3.1 Introduction 3.2 MSCS Policy 3.3 MSCS Objectives 4. PRINCIPLES 4.1 General 4.2 Impartiality 4.3 Competence 4.4 Responsibility 4.5 Openness 4.6 Confidentiality 4.7 Resolution of complaints 5 GENERAL REQUIREMENTS 5.1 Legal and contractual matters 5.1.1 Legal responsibility 5.1.2 Certification agreement 5.1.3 Responsibility for certification decisions 5.2 Management of impartiality 5.3 Liability and financing 6 STRUCTURAL REQUIREMENTS 6.1 Organizational structure and top management 6.2 Committee for safeguarding impartiality 7 RESOURCE REQUIREMENTS 7.1 Competence of management and personnel 7.2 Personnel involved in the certification activities 7.3 Use of individual external auditors and external technical experts

Page 74 of 94

7.4 Personnel records 7.5 Outsourcing 8 INFORMATION REQUIREMENTS 8.1 Publicly accessible information 8.2 Certification documents 8.3 Directory of certified clients 8.4 Reference to certification and use of marks 8.5 Confidentiality 8.6 Information exchange between a certification body and its clients 8.6.1 Information on the certification activity and requirements 8.6.2 Notice of changes by a certification body 8.6.3 Notice of changes by a client

9. PROCESS REQUIREMENTS 9.1 General requirements 9.2 Initial audit and certification 9.2.1 Application 9.2.2 Application review 9.2.3 Initial certification audit 9.2.4 Initial certification audit reports 9.2.5 Post-audit activities 9.2.6 Initial certification decision granting or extending certification 9.3 Surveillance activities 9.3.1 General 9.3.2 Surveillance audit 9.3.3 Surveillance audit report 9.3.4 Maintaining certification 9.4 Recertification 9.4.1 Recertification cycle 9.4.2 Recertification audit plan 9.4.3 Recertification audit 9.4.4 Recertification audit report 9.4.5 Recertification decision 9.5 Special audits 9.6 Suspending, withdrawing or reducing scope of certification 9.7 Appeals 9.8 Complaints 9.9 Records of applicants and clients 10 Management system requirements for certification bodies 10.1 Options 10.3 Option 2: General management system requirements 10.3.1 General 10.3.2Management system manual 10.3.3 Control of documents 10.3.4 Control of records 10.3.5 Management review

Page 75 of 94

10.3.6 Internal audit 10.3.7 Corrective actions 10.3.8 Preventive actions

APPENDIX A FUNCTIONAL ROLES AND RESPONSIBILITIES APPENDIX B LIST OF MANAGEMENT SYSTEM PROCEDURES ------LIST OF MANAGEMENT SYSTEM PROCEDURES

Sl. Doc. No. DOCUMENT TITLE No 1. MSCS-P-2.3-01 Procedure for document control 2. MSCS-P6.2-01 Procedure for management of impartiality and conflict of interest 3. MSCS-P6.2-01 Procedure for Approval Sub-committee 4. MSCS-P7.2-01 Procedure for determination of competence criteria for personnel 5. MSCS-P7.2-01 Procedure for personnel selection, registration and control 6. MSCS-P7.2-03 Procedure for review of training needs and providing training 7. MSCS-P7.3-01 Procedure for sub-contractor auditor selection, registration and control 8. MSCS-P8.1-01 Procedure for publicly available information 9. MSCS-P9.1-01 Procedure for audit programming 10. MSCS-P9.1-01 Procedure for audit planning 11. MSCS-P9.1-03 Procedure for calculation of man days for different audits 12. MSCS-P9.1-04 Procedure for conducting onsite audit 13. MSCS-P9.2-01 Procedure for processing of applications 14. MSCS-P9.2-01 Procedure for initial certification audits-Stage 1 15. MSCS-P9.2-03 Procedure for initial certification audits-Stage2 16. MSCS-P9.2-04 Food Safety management systems audit and certification 17. MSCS-P9.2-05 Procedure for grant of certification 18. MSCS-P9.2-06 Procedure for extending scope of certification 19. MSCS-P9.3-01 Procedure for surveillance audit 20. MSCS-P9.4-01 Procedure for recertification ( Renewal) 21. MSCS-P9.5-01 Procedure for special audits 22. MSCS-P9.6-01 Procedure for suspension /withdrawal/reduced scope of certification 23. MSCS-P9.7-01 Procedure for appeals handling. 24. MSCS-P9.8-01 Procedure for complaints handling 25. MSCS-P9.9-01 Procedure for control of management systems certification records. 26. MSCS-P9.9-01 Procedure for filing and movement of certification data 27. MSCS-P10-01 Procedure for internal audits 28. MSCS-P10-01 Procedure for management and reviews 29. MSCS-P10-03 Procedure for corrective and preventive action

Page 76 of 94

ANNXURE V

REPORT ON THE STATUS OF PRODUCT TESTING LABORATORIES IN BHUTAN

Objective

To establish status of testing facilities in Bhutan and propose strengthening testing infrastructure to provide support to standards formulation and certification of systems products

Activities envisaged to be undertaken in the project

e) Review the existing structure of laboratories in Bhutan

f) Evaluation of testing requirements in the country in consultation with different stake holders and identify the areas for testing

g) Make proposal for establishment /modernization of laboratories and elaborate an investment plan

h) Make proposal for outsourcing possibilities for testing to neighboring countries with a model Memorandum of understanding

Approach of the study

To conduct an in-depth study and survey to know the testing facilities available in the country in: a) Government sector, b) Public Sector undertakings, c) Private sectors and d) Manufacturing companies

To establish the status of Product testing laboratories in Bhutan a situational analysis was conducted for collection of information, desk review of documents collected, meetings and consultations with concerned officials and development of roadmap for the collection of data and information.

Collection of data and information

A comprehensive questionnaire was developed by the ADB MSME team in consultation with BSB. The questionnaire covered main aspects of the laboratory such as general aspects, availability of testing facilities and testing personal and the management system in place. The sample questionnaire is attached as Appendix–I. Since not much of the desired information was flowing in through the questionnaire, the Standards Experts engaged under MSME project personally visited most of the laboratories in and around Thimphu. Thus number of questionnaires were received which fairly represent the testing laboratories scenario in Bhutan.

Page 77 of 94

Activity 1 Review of the existing structure of laboratories in Bhutan

A view of existing structure of laboratories revealed that laboratories have been established under government departments, manufacturing companies, public sector undertakings, research and technical institutions, Consumer organizations, Industry association and export organizations besides regulatory bodies like Bhutan Agriculture and Food Regulatory Authority (BAFRA), quality control laboratories with Ministry of Health including public health laboratories, institutes such Institute of Indigenous Medicines and laboratories.

Activity 2: Evaluation of testing requirements in the country

The data collected through the survey and interaction is summarized in Appendix-II. The main high lights of the survey are:

1. Bhutan has testing facilities in almost all sectors. However, there is need to strengthen and modernized these laboratories to meet the growing needs of testing in different sectors of economy.

2. The laboratories in the following areas were particularly studied:

(i) Metrological Referral and Calibration Laboratory under BSB, (ii) Product testing laboratory under BSB, (iii) National Quality Control Laboratory Under BAFRA, (iv) Quality Control Laboratory under Institute of Traditional medicine, MoH, (v) Consumer Protection Laboratory under MoEA, (vi) Public Health Laboratory (PHL) under MoH (vii) Quality Control Laboratory under Bhutan Drug Regulatory Authority (DRA). (viii) Essential Oil Quality Control Laboratory, Department of Cottage and Small Industries, MoEA

The study revealed that while laboratories at iii) and viii)I are well equipped, other laboratories would need considerable strengthening and reorientation to serve the intended purpose.

Activity 3: Proposal for establishment of laboratories and an investment plan

The following laboratories would require strengthening for meeting the intended requirements.

1 The Product Testing Laboratory under BSB

The erstwhile material testing and research Division (MTRD) has become the part of the Bhutan Standards Bureau (BSB) and is mandated to fulfill the provision laid down under Bhutan Standards Act 2010. The existing laboratory is equipped only for routine testing of

Page 78 of 94

construction material. With the establishment of the BSB, the testing requirement has changed to cater to the needs of standardization and product and system certification. This calls for augmentation and modernization of existing testing facilities to support conformity assessment and formulation of standards in other sectors such as food and agriculture, textiles, consumer protection etc besides construction specially for products manufactured by small and medium scale industries. Therefore, there is a need to upgrade the testing facilities with the-state-of-art testing facilities. The manpower with these laboratories would need training and empowerment to man the laboratories. To get the test reports coming out of these laboratories acceptable in international trade, they should get accreditation for ISO/IEC 17025 Laboratory Management system.

The Laboratory Services Division has proposed a compressive list of testing equipment for procurement under the ADB MSME project for testing of construction material as well as other products: SL. Testing Specification Purpose Approximate Approximate NO Equipment cost in Nu. cost in USD. 1 Electric Oven 50oC to 250 oC Heating 45,000/- 1000/- 2 Spectrophoto Spectrochem To conduct all 800,000/- 17000/- meter UV 101 or chemical analysis equivalent 3 Chemical ------To conduct all 400,000/- 8400/- Laboratory Set up chemical analysis Total 12,45,000/- 26400/-

2. The Metrological referral and calibration Laboratory under BSB

The Metrological Referral and calibration Laboratory has been established under the erstwhile SQCA and subsequently placed under the BSB. With the UNIDO assistance, this laboratory has received equipments and tools for calibration of weights and measures. These equipment were provided with calibration certificates, the status has expired. Selected staff were also trained on the use of the weights and measures at the Indian Institute of Legal Metrology, Ranchi, during April 2010.

This laboratory will be strengthened under the UNIDO assistance would get accreditation for providing calibration and verification services to industry and the government particularly calibration of weights and measures used in commerce.

3 Public Health Laboratory under Ministry of Health.

The Public Health Laboratory under Ministry of Health is presently housed within the Jigme Dorji Wangchuck National Referral Hospital. PHL is entrusted to safeguard the health and safety of the people. It has affiliated with quite a few testing laboratories in the region including Thailand. However, it has limited facilities and it takes quite a long time to get the sample tested. By the time the result is obtained it is often is too late make the important decisions. Therefore, the public health laboratory needs to be strengthened while at the same time it has become necessary to strengthen the already exiting affiliation with the

Page 79 of 94

regional laboratories. Also it is necessary to explore additional laboratories which are easily accessible and require less time to obtain the test results through outsourcing of the sample material.

4. Quality Control Laboratory with Institute of Traditional Medicine (Menzong Shorig)

Traditional medicines are well regarded in Bhutan since time immemorial. The institute ofTraditional Medicines of Bhutan was established in 1988 for production of medicinal, herbal, Nutraceautical products as well as health promoting medicines. The Institute has been manufacturing traditional medicines including the supplementary medicines in the following areas.

(i) Essential products (109 types of medicine) (ii) Religious products such incense sticks (iii) Neutraceutical products such herabal tea (Tsheringma) (iv) Health promoting products such as Cordy Plus, Cordy active

The Quality Control Laboratory is fairly equipped to cater to the needs of testing indigenous medicine formulation manufactured by the institute. However it needs to be strengthened with modern facilities and implement laboratory management system (ISO 17025). Menzong Shorig also needs to come up with quality control test procedures and document the same for each medicine type.

The following laboratories are proposed to be established for meeting the intended requirements

1. Construction Material Testing Laboratory

Bhutan, although a small nation, is emerging in production of construction materials such as cement, steel, ferro-silicon, cables, HDPE pipes among others. Therefore, a strong product testing facilities is required to ensure the quality of these materials so that the products are certified by the relevant agency paving smooth market for the products both in the domestic as well as in the region. The proposed laboratory is required to cater the needs of government, semi-government and certification marking scheme of BSB.

2. Consumer Protection Laboratory

Consumer protection is an important area requiring government intervention in Bhutan. The only consumer protection testing laboratory under department of Trade, Ministry of Economic affairs has testing facilities limited to petroleum products only and requires introduction in other areas as well. The existing laboratory is limited to testing of kerosene, diesel and petrol. The laboratory needs to expand its testing facilities to include other areas of consumer interest such as food and non-food item.

3. Quality Control Laboratory under Bhutan Drug Regulatory Authority (DRA).

Page 80 of 94

The Drug Regulatory Authority of Bhutan is responsible for the control of abuse substances in the country. However, it lacks infrastructure as well as trained manpower to fulfill its mandate. Therefore, it is proposed to have Quality Control Laboratory for Drug Regulatory Authority.

Activity 4: Proposal for outsourcing possibilities and model Memorandum of understanding

1. Proposal for outsourcing possibilities

Bhutan is a small country and creating of specialized testing infrastructure will not be cost effective as flow of samples would be limited. The survey also reveals that needs of the specialized testing may be met by outsourcing specialized testing to neighbouring country accredited laboratories would be desirable.

There are a number of accredited laboratories in the neighboring countries such as India, Thailand, Bangladesh. The laboratories that could be utilized in the first instance are given in Appendix-III.

2. Model Memorandum of understanding

A memorandum of understanding (MOU) is a document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in situations where the parties cannot create a legally enforceable agreement. In some cases depending on the exact wording, MOUs can have the binding power of a contract; as a matter of law, contracts do not need to be labeled as such to be legally binding.

The ADB MSME Team has proposed a model memorandum of understanding (See Appendix-IV which may be used for entering into an agreement for utilizing such facilities.

Page 81 of 94

APPENDIX- I ADB Funded Micro, Small and Medium Enterprises (MSME project)

Survey of testing facilities, under government departments, manufacturing companies, public sector undertakings, research and technical institutions, Consumer organizations, Industry association, Export organizations.

Date of survey:……………..

I. GENERAL INFORMATIONS

1. Name of laboratory/organization:…………………………………………………………… 2. Laboratory/organization address:…………………………………………………………… …………………………………………………………………………… …………………………………………………………………………… …………………………………………………………………………… ……………………………………………………………………………

Tel:...... Fax:……………………………………………………………………… Email:…………………………………………………………………… Web site:………………………………………………………………..

3. Contact person: Name:…………………………………………………………………. Contact #:……………………………………………………………..

4. Laboratory/organization Year of Establishment:……………………………………

5. Laboratory affiliation (Pl tick (√ ) one)

In-house Manufacturing Technical & Research Independent- Private

Independent- Public Others (Please specify)……………………………

6. Collaboration with foreign laboratory Yes No

If Yes, Pease specify:…………………………………………………………………………..

………………………………………………………………………………………………..

II. TESTING FACILITIES

1. Does the company have sector specific testing facilities? (Pl tick (√) one) (If No, Skip Q2 to Q9; Go To Next section)

Construction Health Manufacturing Service Others(Plspecify)

2. If yes, please list all the in-house test parameters

Sl.no Test parameter(s)

Page 82 of 94

1. …………………………………. 2. …………………………………. 3. ………………………………… 4. …………………………………. 5. ………………………………….

3. Please list the major test equipment used

Sl.No Test equipment 1. …………………………………. 2. …………………………………. 3. ………………………………… 4. …………………………………. 5. ………………………………….

4. Is your Laboratory fully occupied or have spare facilities which can be used by BSB, if required. (Pl tick (√) one) Yes No

5. Does your laboratory levy testing charges for samples coming from outside the organization. (Pl tick (√) one)

Yes No (If No, Skip Q6, Go To Q7)

6. If so, please enclose tariff of sample

Enclosed (Please tick (√) after enclosing a copy of tariff) 7. Does the laboratory follow any standard test method? (Pl tick (√) one)

Yes No (If No, Skip Q8; Go To Q9)

8. If yes, which standards test method are being followed? (Please specify) …………………………………………………………………………………………….. …………………………………………………………………………………………………..

9. Does your Laboratory outsource some of the testing works? (Pl tick (√) one)

Yes No (If No, Skip Q10; Go To Next Section)

10. If yes, list those test being outsourced (Please specify)

Sl. NoTest parameter(s) outsourced Frequency of test (Monthly, Qtr’ly, ½ yearly etc) 1. …………………………………. …………………………… 2. …………………………………. …………………………… 3. ………………………………… ………………………….. 4. …………………………………. ………………………….. 5. …………………………………. …………………………..

III. PERSONNEL

Page 83 of 94

1. Do your company/organization have material testing Personnel? (Pl tick (√) one)

Yes No (If No, Skip Q2 & Q3; Go To Next Section)

2. How many material testing personnel your organization have? (Please specify in Nos) …………………………………………………………………………………………………

3. List them with name, qualification, designation and work experience.

Sl.No Name Qualification Designation Experience (yrs) 1. ………………. ..…………… ………………. ……………… 2. ………………. ..…………… ………………. ……………… 3. ………………. ..…………… ………………. ……………… 4. ………………. ..…………… ………………. ……………… 5. ………………. ..…………… ………………. ………………

IV. LABORATORY MANAGEMENT SYSTEMS

1. Is the company/organization aware of ISO/IEC 17025 Laboratory Quality Management System? (Pl tick (√) one)

Yes No (If No, Skip Q2, Q3, Q4, Go To Next Section)

2. Is the company ISO /IEC 17025 accredited? (Pl tick (√) one)

Yes No (If No, Skip Q3 & Q4, Go To Next Section)

3. If yes, when was the company accredited? (Please specify the year): ………………

4. Which is the accrediting agency? (Please specify)

…………………………………………………………………………………………. …………………………………………………………………………………………..

5. If not accredited, Is the company interested in getting accredited in future? (Pl tick (√) one)

Yes No

6. Does your company have Laboratory Management System ISO 17025? (Please specify)

Yes No (if no, skip Q7; end of survey data)

7. If Yes, since when it was lunched? (Pl specify the year) ……………………………………………………………………………………………

8. Which is the certifying agency? (Please specify)

……………………………………………………………………………………………

Page 84 of 94

APPENDIX-II

Consolidated summary of the findings on Details of Testing Facilities in Bhutan

IV. III. Personnel Laboratory I. General Information II. Testing Facilities Information Manageme nt Systems Sl.n Name Address Contact Year Lab. Sector In house Test Fully Levy Does lab Out Materi How Is the o of person of Affiliation specific tests equipment occu test follow sourcing al many company laborat establ testing parameters pied charg standard of testing testin perso implemente ory ishme facilities or es for test works? g nnel? d ISO/IEC nt have sampl method? perso 17025 spare es nnel? faciliti comin es? g from outsid e 1 Quality Menzong Kinga 1998 In-house Manufact Loss on Rotary Yes NA In house No Yes 10 No Control Soring Jamphel, manufacturi uring drying; Evaporator; QC Laborat Pharmace 02- ng (health) identifications; water bath; manual ory uticals, 326516/3 uniformity of UV lamp; Kawazang 21687 weight; Disintegratio sa, disintegration; n equipment; Thimphu,0 Hardness; hardness 2- Frictionbility tester; 325731/32 Friability 1687/3265 tester; 16 centriguage; deep freezer; microscope; essential oil extractor; Furnance; Fumehood; Balance; vernier caliper

Page 85 of 94

2 Public Departme Sonam 1989 Tech & Health HIV, TB,STI, Real Time Yes No Yes, WHO No Yes 19 Yes Health nt of Wangchu Research Influenza,mea PCR, Bio- Lab Public ck, sules, Rubella, safety Health, 323317/ Japanese cabinet, MOH, 1776095 Encephalitis, ELISA, other JDWNRH 8 water Quality supportive complex monitoring equipment

3 Druk Pasakha, Mrs. Bika 2002 In-house Manufact Raw Material Comprehens Yes No Yes, BIS No Yes 5 No Data cement Chhukha, Chhetri, manufacturi urng Test Raw Mix ive Testing Co. Pvt 05- 1763459 ng test Clinker Machine, Ltd 251239 2 Test Physical Blains Air (drukceme Test of Apparatus, nt@gmail. Cement Auto Clave, com) Chemical Test Le- charlier of Cement Apparatus, Vicat Apparatus, Muffle Furnace, Hot plate; Hot Air oven 4 Geotech Departme T.P 1995 Tech & Service Sieve Sieve, Yes Yes Yes Yes Yes 2 No nical nt of Thapa, Research Analysis, Triaxial Labrotar Geogoly Sr. Hydrometer Testing y DGM and Mines Geogolist Test, Atterberg machine, (P.O Box: , Test, Specific CBR, m173, 1775094 Gravity, Point Brazalian, Thimphu) 5/ 02 Load Test, Direct Sheer 322879/ Aggregate Box, Drilling, 323013 Impact Value, Diamond Porosity drilling, SPT, PPT, Permeability, Slake durability, Aggregate Impact value, Water Content, Hydrometer Tube, Consolidatio n test

Page 86 of 94

5 Quality Departme Karma 2008 Not written Not Quality testing Gas No No No Data No Data Yes Two Yes control nt of Yanka, written of Essential Chromatogra Perso Laborat Cottag & (1771016 Oil, Citral phy, ns ory for Small 7) Contents Refractomet Essentia Industry 325028/ er, Hot Air l oil Entriprise 325267 oven, Digital Developm Polarimeter, ent Cereulaxing Division Bath Ministry of Economic Affiars 6 Lhaki Lhaki R.M. 1992 In-house Manufact Electronic Electronic No NA Yes, IS- Yes Yes 6 No Cement, Cement, Yadav manufacturi uring balance, UTM balance, 4031, IS- Gomtu, Gomtu, (Dy. GM ng 100 T cap, UTM 100 T 4032 Bhutan Bhutan Q.C), Water cap, water 7736389 distillation distillation 8, plant, Hot air plant, Hot air 371042, oven, oven, 371020, Vibratory m/c, vibratory (cement Water bath, m/c, water @lhakigr Sieve shaker, bath, sieve oup.com) Lab ball mill, shaker, lab , Humid cabinet ball mill, (www.bh and other humid utanweb support cabinet and mail.com equipment and other ) apparatus support equipment and apparatus 7 Lhaki Lhaki Kinzang 2007 In-house Manufact IS- 2830 for UTM, Muffle Yes Yes No Yes 5 Yes Steels Steels and Yeshey, manufacturi uring MS Billets, IS- Furnace, Dry and Rolling (1769018 ng 1786 for TMT Oven, Rolling Pvt. Ltd 1), email Strolein Pvt. Ltd Plot No. (lhakistee Apparatus, 10, ls@yaho Chainometic Pasakha o.com), Balance, Industrial 05- Electronic Estate, 26121, Balance Pasakha, 05- Bhutan 252909

Page 87 of 94

8 Bhutan GPO: 329, Mr. 1993 In-house Basic Microbial Laminar Air Yes No Yes Yes Yes 3 Yes Agro Wangchut Ugyen manufacturi Microbial Count (gm/ml), Flow, Briz Industrie aba, Dorji, ng Count Acidity Tested Meter, pH s Ltd. Serbithan (1794586 and (as citric with) meter, NTU g, 4)/ Chemical meter, Thimphu 351078/3 testing of incubators 51268/ End etc… Fax: product 351089 (E-mail- btnagro @drukne t.bt) 9 Chemic Dept. of Ugyen 1983 Independent Mineral Complete Atomic Yes Yes Yes, BIS Yes 10 Yes al Geology Dorji, - Public Testing analysis of absorption Labraot and Mines (1767843 limestone, spectrophoto ary/DG Ministry of 0)/ dolomite, meter (AAS), M Economic 322879/3 gypsum, clay Colorimeter, Affairs 23349/ and iron ore. pH meter, gsbmti@ samples. Microwave druknet.b Digestion t/ unit, Flame www.mo photometer ea.gov.bt and UV- visible spectrophoto meter. 10 Central Distributio Mr. 1986 In-house Service Voltages, High Voltage No Yes yes No Yes 5 Yes Maintain n and Heruka Manufacturi Current, Test Set, No ence Customer Zangpo, ng Insulation load and and Service (1762598 Resistance, load test set, Training Dept. 5)/ Speed, double Division BPCL, 361075/ Resistance, voltage, Begana, 361052/ Loses/ double Thimphu, cmtdbeg wattage. frequency Bhutan ana@bpc test set, .bt/ Earth test www.bpc equipment, .bt Megger, Low resistance test set, Transformer Ratio test set. 11 POL Departme Bhuwan 2008 Yes Laborat nt of Dhital, ory Trade 1761366 6

Page 88 of 94

12 Laborat Bhutan Tashi Independent Constructi CS concrete, UTM, No Yes Yes, BIS No Yes 15 No

ory Standards Wangchu 2000 -Public on Tensile Compressive Service Bureau ck, Tel strength of testing Division 325104 steel, machine, mechanical Marshall test of stability test aggregates/sto and Bitumen nes, cement Testing physical test, apparatus, soil test Los Angelos Apparatus, AIV & ACV test m/c, Direct shear test, SPT, DCPT, Plate load test 13 Bhutan Pasakha,i Tshering 2007 In-house Manufact As per is 1786 Universal No No Yes, No Yes 5 Yes Rolling ndustrial Tashi, manufacturi uring Testing 150:9001: Mills ltd estate, 1761054 ng machine 2008 Phuntsholi 9/254992 (UTM 100) ng.Bhutan /254638 14 Bhutan Pasakha,i Tshering 2003 In-house Manufact As per is 1786 not No No Yes, No Yes 2 Yes Steel ndustrial Tashi manufacturi uring mentioned ISO:9001: industry estate, 1761054 ng 2008 ltd Phuntsholi 9/254992 ng.Bhutan /254638 15 Bhutan Pasakha,I Tshering 2008 In-house Manufact As per is 1786 No No 150:9001: No Yes 8 Yes Ferro ndustrial Tashi manufacturi uring 2008 Industrie estate, ,1761054 ng s ltd Phuntsholi 9/254992 ng.Bhutan /254638 16 Program National Dawa 1991 Technical & Mushroo Production, Testing No No No Yes No No Director mushroom Penjor Research m seed growth rate production center,Sa quality mtokha, Thimphu 17 Tissue RNR,R.D. Pema 1989 Technical No testing No No Culture C, yangzom and facility lab. Yusipang, /Kinzang research Dept.of Tshering, Forest 1763850 and Park 9 services, MoaF,Thi mphu

Page 89 of 94

18 Botany Sherubtse Kencho 1996 Not written No NA NA No No Yes, as No No NA No laborato collage Wangmo, document ry HOD, ed for Dept of undergrad Botany, uate Tel #3 course 1764036 2 19 Army Samtse Lekden 1976 In-house Spirit and Spirit strength, Distillation No No yes,IS- No Yes 1 Yes Welfare Welfare Tshering, manufacturi liquor and liquor strength, flask, PH 4450:1988 Project, Project 365268 ng DM Water chemical meter, PH (Second Samtse ,Samtse test composition of solution, revision for Distillery Distillery, liquor and Skies RUM, IS- Samtse spirit, Ph and hydrometer 4449:1988 Bhutan harness of (Third rev H2O,TDS of for Whisky water

20 Physics Physics Tshering Technical No No No No No No Lab Departme Thinley, and nt , Tel # Research Sherubtse 1711736 collage 0 21 Chemist Chemisty Kelzang Na No No Yes, No Yes 6 No ry Lab dept, Namgyel, Standard Sherubtse 04- Scientific collage, 535208 methods- Kanglug Simple Tashigang experimen , Royal ts university of Bhutan 22 Zoology Dept.of S.N. No No lab. Zoology,S Mense harubtse 00975- collage, 1772238 Kanglung 8

Page 90 of 94

APPENDIX -III SELECT NABL ACCREDITED TESTING FACILITIES IN INDIA

The following testing laboratories in different areas are accredited by NABL for possible collaboration with agencies in Bhutan:

1. AES Laboratories (P) Ltd, Noida U.P. Private, 8117716 2. Aglow Quality Control Laboratory, Kolkata W.B. Private, 5118806 3. Arbro Pharmaceutical Ltd, New Delhi, Private, 8116816 4. AVON Food Lab, Delhi , Private, 8117816 5. Bangalore Test House, Bangalore Karnataka, Private, 6113516 6. Bhagavathi Ana Labs Ltd, Hyderabad A.P. Private, 6108116 7. Cali-labs Pvt Ltd, Bhopal M.P. Private, 8118116 8. Central Institute of Plastics Engg and Technology, Hajipur Bihar Govt., 5118334 9. Central Institute of Plastics Engg & Tech, Guwahati Assam Govt., 5117534 10. CEPC Laboratories and Tech Div, Quilion/Kollam Kerala Govt., 6116714 11. Choksi Laboratories Ltd, Indore, M.P., Private, 8100106 12. Civil Aid Technoclinic, Bangalore Karnataka, Private, 6120836 13. Delhi Test House, Delhi, Private, 8114206 14. Envirodesigns Eco Labs, Kochi Kerala, Private, 6119816 15. FICCI Research & Analysis Centre, New Delhi, Private, 8103115 16. GEO-Chem, Mumbai Maharashtra, Private, 7115716 17.Gujarat Test House (Health Care Division), Ahmedabad Gujarat,Private, 7119216 18. Gujarat Test House, Ahemdabad Gujarat, Private,7109836 19. Indian Institute of Packaging, Mumbai Maharashtra Semi Govt.,7118404 20. International Testing Centre, Panchkula Haryana, Private, 9108716 21. Konark Research Foundation, Daman, Private, 7119516 22. Lucid Laboratories Pvt. Ltd., Hyderabad Andhra Pradesh, Private, 6121636 23. Maarc Labs (P) Ltd, Pune Maharashtra, Private, 7119116 24. Met-Heat Engineers Pvt. Ltd., Vadodara Gujarat Private, 7118906 25. NSIC, Rajpura Punjab Govt., 9111924 26. Punjab Biotechnology Incubator, Mohali Punjab Govt., 9121314 27. Reliable Analytical Laboratory, Thane Maharashtra, Private ,7108316 28. Sargam Labs Pvt Ltd, Chennai Tamilnadu, Private, 6108016 29. SGS India Ltd, Chennai Tamilnadu, Private, 6114716 30. SGS India Pvt. Ltd., Gurgaon, Haryana, Private, 8121116 31. SIIR, Bangalore,Karnataka, Private, 6104206 32. SIIR, Delhi, Private, 8102006 33. Sipra labs (P) Ltd, Hyderabad, A.P., Private, 6117916 34. Shiva Analyticals (India) Limited, Bangalore,Karnataka, Private,6121716 35. Sophisticated Industrial Materials Analytical Lab (P) Ltd, New Delhi, 8108616 36. Spectro Analytical Lab (P) Ltd, New Delhi, Private, 8116536 37. Standard Analytical Lab, Delhi, Private, 8120716 38. TA Labs (P) Ltd, Chennai Tamilnadu, Private, 6119616 39. Unique Test House, Mohali Punjab, Private, 9119006 40. Vimta Labs, Hyderabad A.P., Private, 6102906

Page 91 of 94

APPENDIX- IV Model Memorandum of Understanding

Memorandum of Understanding Between Accredited Product Testing Laboratory and The Bhutan Standards Bureau

This Memorandum of Understanding (MOU) is entered into this_____ day of ______2011 by and between Bhutan Standards Bureau (BSB), Government of Bhutan and the Laboratory

1. SCOPE

The scope of this MOU is to facilitate closer cooperation and provide a mechanism by which BSB and accredited Laboratories in the neighbouring countries to work together towards for mutual benefit

2. AREAS OF COOPERATION

2.1 Product testing

1.1.1 BSB in its operation of product certification scheme would require the laboratory to be internationally accredited to issue accredited certificates for the samples sent to them and laboratory would supply documentary evidence of currency of accreditation.

1.1.2 BSB and Testing Laboratory agree to examine each other’s requirements, on the testing facilities and procedure for laboratory tests for lasting collaboration for utilizing the testing facilities.

1.1.3 BSB and Testing Laboratory agree to exchange information about the testing facilities available in the laboratory, expertise and personnel available with the laboratory to utilize the testing facilities in the operation of BSB certification scheme, on mutually agreed terms.

1.1.4 BSB would require the testing laboratory to provide testing tariff in the areas identified by BSB in the product certification schemes and the laboratory would provide such tariff schedules product wise and parameter wise.

1.1.5 BSB and the testing laboratory would commit on time schedule for providing test reports in a time bound manner considering urgency of operation of certification systems

1.1.6 Considering the sensitivity involved in testing certification samples BSB and the laboratory agree to exercise complete confidentiality in exchange of technical information specially the test results.

1.1.7 Wherever possible and reasonable, BSB and the testing laboratory would witness each other’s testing facilities including testing facilities available with BSB clients.

Page 92 of 94

2.2 Training of personnel

2.2.1 BSB and the testing laboratory agree that the laboratory would provide training to BSB officers engaged in product certification in testing techniques on mutually agreed terms.

2.2.2 BSB may participate in specialized testing training organized by the testing laboratory on mutually agreed terms

2.2.3 Where practicable, conducting joint work on development of technical guides, procedures and policies relevant to BSB and the affected laboratory.

2.3 Technical Information

2.3.1 BSB and the laboratory agree to exchange information relating to laboratory management practices and dissemination of scientific and technical information on certification and testing.

2.3.2 BSB and the laboratory to exchange each other’s bulletin and other brochures/publications containing information on quality assurance, measurement and testing.

3 FINANCING

3.1 BSB and the testing laboratory agree that the cost related to testing and other related matter under this MOU shall be decided on mutually agreed terms as and when the need arises.

4 PERIOD OF AGGREMENT

4.1 This MOU shall be in effect for three (3) years from the date of signature of both parties, after which the provisions shall be reviewed. It may be terminated by either party by submitting a written statement for (03) months in advance.

4.2 This MOU may be amended and supplemented as agreed by BSB and the testing laboratory for furthering bilateral cooperation.

5 DESIGNATION OF REPRESENTATIVES

5.1BSB and the testing laboratory hereby designate the person listed below as their official Representatives responsible for overall operation this MOU:

I. Representative of BSB II. Representative of The Laboratory

Page 93 of 94

6 DISPUTE

6.1 Any dispute, controversy or claim arising out of this MOU shall be settled by mutual consultations and negotiations.

Signed on Behalf of Signed on Behalf of The Laboratory Bhutan Standards Bureau

[Authorized Signatory] [Director General] The Laboratory Bhutan Standards Bureau

Dated: Dated:

Page 94 of 94