ISO Focus, July-August 2009.Pdf

ISO Focus The Magazine of the International Organization for Standardization Volume 6, No. 7, July-August 2009, ISSN 1729-8709

Renewing confidence

• World Bank economist : “ International Standards bolster economic growth.” • Consumers call for interoperability © ISO Focus, www.iso.org/isofocus Contents

1 Comment Julien Pitton, ISO Treasurer, How to win back business confidence and credibility in turbulent times 2 World Scene Highlights of events from around the world 3 ISO Scene Highlights of news and developments from ISO members 4 Guest View John Wilson, Lead Economist, Development Research Group, ISO Focus is published 11 times a year (single issue : July-August). World Bank It is available in English. 8 Main Focus Annual subscription 158 Swiss Francs Individual copies 16 Swiss Francs Publisher Renewing ISO Central Secretariat (International Organization for Standardization) 1, ch. de la Voie-Creuse CH-1211 Genève 20 Switzerland confidence Telephone + 41 22 749 01 11 Fax + 41 22 733 34 30 • Talking “ risk ” E-mail [email protected] • The benefits of personal financial planning Web www.iso.org • Rating services – Bringing stability to global financial markets • ISO tackles consumer credit scoring Manager : Roger Frost • Reducing security risks in financial services Editor : Elizabeth Gasiorowski-Denis • Fraud – ISO joins the fight Assistant Editor : Maria Lazarte • Anti-counterfeiting solutions to gain back profits Artwork : Pascal Krieger and Pierre Granier • Turning financial crises into opportunities – Customer satisfaction standards ISO Update : Dominique Chevaux • Quality and competitiveness as strategic allies Subscription enquiries : Sonia Rosas Friot ISO Central Secretariat • If only we could go back in time Telephone + 41 22 749 03 36 • Conformity important to maximizing benefits Fax + 41 22 749 09 47 • Social responsibility in time of crisis – ISO 26000 and beyond E-mail [email protected] • ISO highlights standards as generators of confidence during © ISO, 2009. All rights reserved. global financial crisis The contents of ISO Focus are copyright Developments and Initiatives and may not, whether in whole or in 35 part, be reproduced, stored in a retrieval Does it fit, will it work and can standards help ? • Extensive system or transmitted in any form or debate improves consensus on future ISO 26000 • ISO President by any means, electronic, mechanical, photocopying or otherwise, without highlights role of standards for economic recovery • ISO begins written permission of the Editor. work on standard for utility bills The articles in ISO Focus express the views of the author, and do not necessarily reflect 43 New on the shelf the views of ISO or of any of its members. New edition of ISO/TS 16949 quality specification for automotive industry supply chain • ISO standard to save sailing ISSN 1729-8709 Printed in Switzerland enthusiasts from danger and drowning Cover photo : iStock. Montage ISO 45 Coming up ISO Focus July-August 2009 © ISO Focus, www.iso.org/isofocus Comment How to win back business confidence and credibility in turbulent times

In the midst of the worst financial And this is reflected in the grow- customer-focused complaint manage- crisis the world has seen since the Great ing demand for standards. At a time when ment standards. Depression, we inevitably ask : “ What most organizations have cut down busi- ISO is also working on standards went wrong ? ” Concerns over accounta- ness, ISO has actually increased its scope for anti-counterfeiting, fraud counter- bility, transparency, quality and risk man- and introduced several new projects. measures and control, financial rating agement resonate the strongest. Not only do organizations who services, brand value and a new project What the world needs is confi- implement voluntary standards benefit on consumer credit rating. The soon-to-be dence – the bedrock of business. from enhanced efficiency, reduced costs, published ISO 31000 will provide organi- technological know-how and improved zations with state-of-the-art guidance and Financial institutions have suf- market access, but internationally recog- principles for risk management. fered the most from damaged reputations. nized standards also constitute a proactive Governments have come to the rescue, All of these tools will help finan- commitment, appreciated by customers, bringing into the spotlight the long-last- cial institutions and other organizations to promoting quality, transparency, and ing debate between too much and too lit- around the world to restore credibility, accountability, and thus help organizations tle regulation. Should we enforce con- integrity and efficiency – whether in to generate and restore confidence. trol – even to degrees that some might developed or developing countries – as consider excessive – to protect our over- well as to prevent future crises. all economic integrity, or should we be “ An important lesson An important lesson of the current wary of limiting economic growth by crisis is that we cannot separate business such restrictions ? of the current crisis is from ethics. The future ISO 26000 on social responsibility will provide organi- Voluntary standards provide a that we cannot separate zations with internationally agreed prin- middle ground, balancing the interests business from ethics.” ciples to guide their business operations of regulation and economic growth. On with an ethical framework. one hand, financial institutions, busi- ISO has developed a robust port- nesses and other organizations benefit As these examples show, ISO’s vol- folio of standards geared towards the from access to internationally agreed untary standards constitute practical tools financial services industry through its best practice, and from the possibility to for achieving many of the objectives of reg- technical committee ISO/TC 68, Finan- participate in their development. ulators. With the experience of the global cial services. Its standards cover a wide financial crisis, financial institutions and On the other hand, public author- spectrum of services with focus on the consumers might consider it opportune to ities can use ISO standards as flexible securities market and related financial weigh up the benefits of a proactive use of complements to regulation. Developed instruments, core banking and payments voluntary standards, instead of reactively with broad stakeholder input from con- (e.g. IBAN, ISIN). responding to regulations that may incur sumers, manufacturers, unions, regula- Many have been adopted as nation- costs. Regulators too may consider the use tors, academics and other groups, Inter- al standards and help to ensure the integ- of voluntary standards as an alternative, or national Standards are multi-faceted, rity and confidentiality of the financial as an adjunct, to regulation, in paving the and can be understood and implement- infrastructure. way to a common goal – a financial sec- ed by everyone. Another confidence-generat- tor we can once again trust. ISO standards are therefore ing standard is ISO 22222, which out- powerful tools for changing the behav- lines requirements for ethical behaviour, iour of economic actors. They provide competences and experience of personal a framework for financial institutions financial planners. to become proactively accountable, The ISO 9000 standards for qual- as opposed to reacting in response to ity management are helping organiza- enforced regulation. tions streamline operations to increase Furthermore, a global crisis efficiency and reduce costs. Further- requires a global response, and Inter- more, ISO and the International Elec- national Standards cross boundaries of trotechnical Commission (IEC) have geography and legislation. In fact, the developed standards for controlling financial crisis arose precisely because risks associated with information and International Standards were not put in sensitive data (the ISO/IEC 27000 fam- Julien Pitton place and followed. ily), business continuity standards, and ISO Treasurer

ISO Focus July-August 2009 1 © ISO Focus, www.iso.org/isofocus World Scene

OECD roundtable on favour of sustainable devel- corporate responsibility opment. – National Standards Bodies as “ clients ” – contributing to Every year the Organisation The MoU was signed in June in Developing Countries pub- developing local skills, as for Economic Co-operation 2009 in Vienna, Austria by lished in 2008 to help devel- well as taking local needs into and Development (OECD) the ISO Secretary-General, oping countries and econo- account. Watch the video at holds a roundtable on corpo- Rob Steele, and the UNIDO mies in transition develop the www.beyondgoodintentions. rate responsibility in conjunc- Director-General, Kandeh K. optimal organization and use com tion with the annual meeting Yumkella. of a national standardization of their national contact infrastructure as a lever for Regional cooperation This new agreement strength- points – the government- their economic development, in the Americas ens the long-standing strate- assigned bodies responsible trading capacity and a support gic partnership between the ISO Secretary-General Rob for the implementation of the for consumer, social and envi- two organizations in order to Steele attended the Pan Amer- OECD guidelines for multina- ronmental protection. promote sustainable develop- ican Standards Commission tional enterprises. ment and economic growth The two organizations have (COPANT) meeting in Santo This year’s event took place through standards develop- collaborated to produce a new Domingo, Dominican Repub- in June 2009 in Paris, France. ment and implementation, book on conformity assess- lic, in March 2009. The event It focused on the responsibili- capacity building and train- ment which will be published was hosted by Dirección Gen- ties of multinational compa- ing, joint publications and later this year. eral de Normas y Sistemas de nies towards consumers, and related research. Calidad (DIGENOR), ISO how consumers can encourage Going beyond correspondent member for the Under this MoU, ISO and enterprises to live up to the Dominican Republic. UNIDO will undertake joint good intentions recommendations of the projects including seminars One of the first not-for-profit DIGENOR General-Director OECD guidelines. and workshops organization aid organizations to imple- Dr. Julio Santana De Leon ISO Deputy Secretary-Gener- at the regional, sub-regional ment a quality management noted that technical standards al Kevin McKinley participat- and national levels on topics system based on ISO 9001 are a universal language that ed in the event and presented such as: has been recognized for its assures the viability of com- on the context of ISO’s inter- exceptional high standards in mercial and economic trans- Standardization practice national standardization activ- • a video prepared by Beyond actions, reproduction and ities, and the complementarity • Environmental and energy Good Intentions. comparability of quality of the ISO 26000 standard on management parameters, measurements The latter’s aim is to uncover social responsibility currently • Food safety and the results of testing. Dr. being developed. more innovative and effective Santana also referred to the • Energy use and energy effi- approaches to international significant initiatives ISO and OECD have a Mem- ciency aid worldwide. The NGO is DIGENOR had taken in orandum of Understanding on • Social responsibility the Cambodia Trust, which recent years to promote the cooperation concerning the • Conformity assessment. provides artificial limbs and value standards can bring to OECD guidelines and the ISO braces to people with disabili- the Santo Domingo economy. 26000 standard. ISO and UNIDO have a long ties, many of them landmine and fruitful history of cooper- victims and polio sufferers in ISO Secretary-General Rob ISO and UNIDO’s ation and the agreement will Cambodia. Steele provided COPANT reinforced partnership increase the effectiveness of members with an update on their joint efforts and enhance The Cambodia Trust was cho- the extensive activities of ISO ISO and the United Nations coordination of their comple- sen to be one of 10 organiza- over the last 12 months and Industrial Development mentary and mutually sup- tions featured in the Beyond the consultation on the ISO Organization (UNIDO) have portive activities by encourag- Good Intentions video series. Strategic Plan 2011-2015. He signed a Memorandum of ing the widest use of stand- “ They took performance to urged all COPANT members, Understanding (MoU) to rein- ards and assist developing the next level by obtaining who are members of ISO, to force their partnership in countries and economies in certification to ISO 9001, ” consult with their stakehold- transition benefit as they says Tori Hogan from Beyond ers and provide ideas and Photo: Nancy Falcon-Castro become more involved Good Intentions, and by comments to be included in in the global economy. doing so, “ they are voluntari- the strategic planning exer- ly holding themselves to the cise. An illustration of the same high standards of a for- COPANT is the regional long-standing and suc- profit organization.” cessful partnership is standards group in the Ameri- the book Fast forward Mary Scott, Country Director ca’s formed for the purpose of of the Cambodia Trust, recog- promoting the development of nized the advantages, “ We standardization and related had very positive impacts… activities in its member coun- UNIDO Director-General [ISO 9001] has two major tries in order to encourage Kandeh K. Yumkella (left) tenants, customer focus and economic integration and and ISO Secretary-General continuous improvement.” As trade, exchange of goods and Rob Steele (right), a result, the patients, and the services, and to facilitate at the MoU signature local students trained by the cooperation in standardization in Vienna, Austria. NGO to help them, are treated activities in the region. © ISO Focus, www.iso.org/isofocus ISO Scene

Delegates “ test ” First step for ISO standards on the Thames standard on recall On the edge of the River of unsafe products Thames, delegates of ISO/TC The first meeting of the ISO Opening of the ITSIG workshop in Spain. 113, Hydrometry, put their project committee that will standards to the test at a develop an International an integrated environment for where the ITSIG implementa- recently held meeting in Soli- Standard providing a code of standards development at tion plans for 2009 (revised hull, Birmingham, in May good practice for establishing, international, regional and version) and 2010 were 2009. implementing and managing national levels, was held in approved. efficient, flexible and respon- Madrid, Spain, in May 2009. sive consumer product recall The event, opened by ISO Viet Nam hosts trainers programmes including correc- Secretary-General Rob Steele seminar on food tive actions, took place in and AENOR Director-General May 2009, in Kuala Lumpur, In cooperation with the ISO Ramón Naz, brought together Malaysia. The meeting was member for Viet Nam, the 40 managers interested in the hosted by DSM, ISO member Directorate for Standards design and operation of IT for Malaysia. Quality (STAMEQ), ISO services, from 20 national organized a seminar on food ISO/PC 240, Product recall, standards bodies (NSBs). safety management systems decided on a publication target Lack of compatibility (ISO 22000) in Hanoi, in of 2012 for the new standard Delegates from China, India, between the IT applications April 2009. (ISO 10393), and resolved to Japan, Switzerland, the United and services supporting par- harmonize efforts with other Some 90 professionals Kingdom, and the USA, ticipation in international ISO committees developing involved in the food sector including the World Metereo- standardization, and the sys- standards for consumer product attended the regional train the logical Organization, piloted a tems and processes used in safety (ISO/PC 243), anti-coun- trainer’s seminar. The aim remotely operated small boat national and regional stand- terfeiting (ISO/PC 246) and was to raise awareness of the containing an acoustic doppler ards development, can seri- combating fraud (ISO/TC 247). benefits of implementing a current profiler (ADCP) used ously affect usability and effi- to measure the flow of the food safety management sys- The committee extended a call ciency for NSBs. River Thames. The technical tem based on ISO 22000 in for interested parties wishing committee is currently devel- Presentations featured a Viet Nam and in the east and to get involved (through the oping two standards on the number of the solutions used southeast Asia region. ISO member of their respec- use of the ADCP, which will by NSBs to address this issue. tive country). Currently, about Following the seminar, 20 improve its consistent use The coordination effort of 12 countries participate in trainers from national stand- around the world. ITSIG, along with the applica- ISO/PC 240, and an additional ards bodies in the region par- tions developed by ISO Central four have observer status. ticipated in a three-day semi- The meeting also provided an Secretariat, were highlighted. opportunity to resolve a nar on presentation skills. The number of technical issues The workshop provided an purpose was to build the nec- and to determine the future opportunity to discuss some essary skills to undertake work programme of the vari- of the most recent and prom- training activities on the ous subcommittees present. ising ISO/ITSIG develop- standard in their own coun- Among the committee’s future ments – in particular the ISO tries. directions is the inclusion of XML Authoring and metadata The seminar was organized uncertainty analyses in the template and the ISO Concept with the financial contribution ongoing revision of its stand- Data Base. Among its members, Canada, of the Swedish International ards. A recently established Japan, Malaysia, Republic of The workshop was followed Development Cooperation working group will help the Korea and South Africa were by ITSIG’s annual plenary, Agency (SIDA). subcommittees with this work. present at the first meeting. The meeting, which was host- ISO/PC 240’s next meeting Participants at the ISO 22000 train the trainer’s workshop in Viet Nam. ed by the Environment Agen- will be held in November cy of England and Wales at 2009. its Midlands Regional Head- quarters, also included a visit Harmonizing IT solutions to the Physical Model Labora- in standardization tory at HR Wallingford. The need to harmonize IT tools at international and national levels was at the heart of the Information Technology Strate- gy Implementation Group’s (ITSIG) 2009 workshop. Hosted by AENOR, the ISO member for Spain, the workshop, IT solutions supporting

ISO Focus July-August 2009 3 © ISO Focus, www.iso.org/isofocus Guest View John Wilson

ohn Wilson is a Lead ISO Focus : The financial cri- Economist in the Interna- sis has become a global eco- J tional Trade group of the nomic crisis. As a Lead Econo- Development Research Group mist in the Development at the World Bank (WB). He Research Group of the World joined WB in 1999 and spent Bank, how do you see the role two years in its infrastructure of ISO International Standards Vice-Presidency. Mr. Wilson as a key to restoring growth and directs research and policy improving a country’s econom- analysis on trade costs, busi- ic performance ? ness facilitation, and economic development. He also pro- John Wilson : Global econom- vides expertise in lending oper- ic recovery requires urgent and ations and has worked on quick action in all areas to remove projects in the Latin America, obstacles to growth. I do believe Africa, Middle East and North expanded use of International Standards can bolster economic Africa, and Eastern and Cen- growth through trade – and work tral European regions total- we have done at the Bank dem- ling over USD 1.3 billion. He onstrates this. Now is the time, provided leadership and the I think, to advance a long-term concept for the World Bank “ global standards initiative ” establishment of the inter-agen- which is an idea I have been cy Standards and Trade Devel- developing to bring new atten- opment Facility (STDF) and tion to the benefits of standards also developed the concept for the to a wider audience. Why is this needed Bank’s new Trade Facilitation Facil- now more than ever ? ity (TFF). Trade has played a critical role Prior to joining WB, he was Vice “ There is an urgent as an engine of global economic growth President for Technology Policy at need for leadership to and poverty reduction over the past sev- the Information Technology eral decades. We must address and better Industry Council in Washington, showcase the importance understand the changing nature of trade in the post-crisis environment. Harmoni- D.C. He has also been a Visiting of International zation of standards to international ones, Fellow at the Institute for Standards… along with reducing technical barriers International Economics, a Senior A new global standards should, I believe, be part of our collec- Staff Officer at the US National tive action toward recovery and sustain- Academies of Sciences and initiative can help able growth. There is an urgent need for Engineering and National Research achieve that goal.” leadership to showcase the importance of Council, and Adjunct Professor of International Standards. It is also impor- International Affairs at Georgetown tant to stress that systems which rely on University. He has degrees from private-sector-led standards development Wooster College and Columbia contribute to trade, growth, and expan- University in New York. sion in global welfare.

4 ISO Focus July-August 2009 © ISO Focus, www.iso.org/isofocus

According to recently revised fig- ures from the World Bank, global economic growth is now expected to con- tract by 2.9 % in 2009. Moreover, developing countries are expected to grow by just 1.2 % this year, after 8.1 % growth in 2007 and 5.9 % growth in 2008. When China and India are excluded from this estimation, the gross domestic product (GDP) in the remaining developing countries is projected to fall by 1.6 %.1) This About the World Bank news follows the World Trade Organiza- tion (WTO) estimates that global trade is The World Bank is a vital source they provide low-interest loans, projected to decline by 9 % in 2009, mark- of financial and technical interest-free credits and grants ing the worst decline in trade flows since assistance to developing to developing countries for a the Great Depression.2) In contrast, during countries around the world. It wide array of purposes that the period 1974-2007, when global trade is not a bank in the common include investments in education, grew at an average rate of 5 % annually, sense. It is made up of two health, public administration, real global GDP grew, on average, at a rate of 2.9 % per year. Trade’s role in glo- unique development institutions infrastructure, financial and bal economic growth is critical and stand- owned by 186 member countries private sector development, ards are part of the fabric of international – the International Bank for agriculture, and environmental and trade and the forces that drive it. Reconstruction and Development natural resource management. As programmes continue to evolve (IBRD) and the International In fiscal year 2008, the World to restart trade, action on trade facilita- Development Association (IDA). Bank provided approximately USD tion – including standards harmoniza- Each institution plays a different 1.4 billion in trade-related lending. tion and removal of technical barriers – is crucial. I believe this is important but collaborative role to advance Trade-related lending at the World in the context of moving out of the cri- the vision of an inclusive and Bank has increased from an sis more rapidly, as well as seizing the sustainable globalization. The annual average of USD 50 million opportunity for reform. The “ global IBRD focuses on middle income over fiscal years 2002-2003, standards initiative ” I mentioned can and creditworthy poor countries, to an annual average of about help achieve these goals. while IDA focuses on the poorest USD 390 million over fiscal years The crisis has raised trade costs countries in the world. Together 2004-2008. through, among other channels, the decreased availability of trade financing and the threat of new trade-distorting policies. As a result, behind-the-border barri- Figure 1 : Global trade flows from 1980 to 2010, annual percentage change ers are more important and damaging. The (Global Economic Prospects, World Bank 2009). opportunity cost of not enacting reform has, I believe, therefore increased signifi- 14 cantly. This is particularly true of standards and regulatory reform, given the real 12 impact International Standards can have on long-term growth. Expanded use of Inter- 10 national Standards matters a great deal, and we need to collectively work together, 8 including with ISO, other standards devel- 6 opers, industry groups, and public officials to ensure this fact is recognized. 4 2 1) “ Global Development Finance 2009 : Charting a Global Recovery, ” The World 0 Bank. -2 2) “ Report to the TPRB from the Director- General on the Financial and Economic Crisis -4 and Trade-related Developments, ” World 1985 1990 1995 2000 2005 2010 Trade Organization.

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Guest View

and fabrics sectors was 20 % and 30 %, 25 Mean respectively, as of 2003.3) Std. Dev. In regard to developing countries and policy options, although they face con- 20 straints in absorbing best-practice information on standards and mobilizing resources 15 necessary to adopt process and production methods, international harmonization is nevertheless beneficial. I think that facili- 10 tating information exchange and building technical capacity, along with domestic 5 reform to move toward private-sector-led standards systems – with the involvement of public sector and others stakeholders – 0 should remain a key priority of the devel- SSA E.Eur LAC ME S. Asia opment community. With respect to developed coun- Figure 2 : Average costs to comply with technical requirements (% of firm sales by region).3) tries, efforts should be made to harmonize standards to international norms. Again, the concept of a “ global standards initia- Our research and analysis at the extending to 124 %. According to Bank tive ” I have started to explore could play Bank shows that the use of internationally research, this variation is largely due to a role in supporting these objectives. -harmonized standards can significant- differences in firm size and productiv- ly reduce trade costs and expand trade ity differences – with the smallest and ISO Focus : The WTO TBT Agreement flows. This is achieved through lower least productive firms feeling the larg- encourages referring to International 3) production costs and increased export est impacts. Standards as a means to reduce techni- market diversity. According to recent cal barriers to trade that technical reg- World Bank research, for example, a ulations may generate. What specific 10 % increase in internationally har- examples coming out of the World monized European Union (EU) stand- “ International Standards ards leads to a 0.2 % increase in export can bolster economic Bank’s research programme on stand- variety for African textile and clothing ards help illustrate the benefits of har- exports. This effect is 50 % stronger for growth through trade.” monized International Standards to low-income countries.3) businesses seeking to recover from the economic impacts of the crisis ? In support of this view, additional ISO Focus : Developing countries are Bank research finds that firms for which John Wilson : There are a number of most vulnerable and likely to experi- testing procedures have affected their abil- specific examples of work at the Bank ence acute negative consequences in ity to export, have an export share that is that demonstrate the benefits of harmo- the short- and long-term. How can the almost 9 percentage points lower than that nized standards. In addition to the exam- use of International Standards by devel- of other firms. Similarly, firms that face ple of African textile exports to the EU, oping countries facilitate their partici- difficulty in obtaining compliance infor- we have also conducted research on the pation in the global trading system ? mation for one or more of their major des- effect of reducing non-tariff barriers and tination markets export 18 % less of their increasing transparency to trade with- John Wilson : This is another area where total sales than other firms do.4) in regional groupings such as the Asia- I think the “ global standards initiative ” Internationally harmonized stand- Pacific Economic Cooperation (APEC) can make a difference in raising aware- ards can mitigate these effects, as shown and the Association of Southeast Asian ness of the link between development, in our work on the impact of EU stand- Nations (ASEAN). standards, and growth. According to the ards on African textiles and clothing A study I directed on APEC trade, World Bank’s technical barriers to trade exports. We find that national standards for example, demonstrates that increas- database, which we constructed several aligned with ISO standards (as a proxy ing transparency and reducing non-tariff years ago, developing country firms face a for international ones) expand African barriers would increase intra-APEC trade much higher cost-to-sales ratio than devel- exports of these products – more than by 9.3 %. Expanded use of harmonized oped-country firms do when investing in non-harmonized ones. Notably, however, International Standards can be viewed, I technical requirement compliance. the share of internationally harmonized think, within this same goal of increased Firms based in sub-Saharan Afri- EU standards in our data set decreased transparency – the type of transparency ca, for example, face an average cost that from 1995 to 2003. The percentage of that matters to firms more than ever giv- represents 7.65 % of sales, with a range EU harmonized standards in the clothing en current economic conditions.5)

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Given the increased awareness about management systems, in particular, obtaining compliance with them can mitigate the complexities of international transactions between businesses and clients that might be geographically distant or unfamiliar with one another. We need to understand, however, in more detail how management and environmental standards affect trade costs, consumer confidence, and economic competitiveness. WTO disciplines to further encourage use of private-sector-led standards sys- ISO Focus : How do you perceive tems is one of many areas that can help ISO’s efforts to develop specific stand- Although the principle of transpar- in long-term recovery and growth. ards such as anti-counterfeiting, fraud, ency encompasses more than regulatory simplicity and non-discrimination, such financial ratings, quantifying value of principles are critical to the foundations ISO Focus : What is your view on ISO brand and consumer credit rating, just of a well functioning trading environment. management systems – most notably to name a few, that may contribute to APEC recognizes this fact, I think, giv- ISO 9001:2008 for quality manage- the recovery and establish solid eco- en that it’s most recent set of trade facil- ment and ISO 14001:2004 for envi- nomic foundations for preventing future itation action plans places emphasis on ronmental management ? How do they crises ? Are there areas for which the transparency vis-à-vis domestic regulatory contribute to improving the economic World Bank would like to see more or reform. This not only includes standards competitiveness of a business ? different standards ? harmonization, but the increased availability and accessibility to standards-relat- John Wilson : We need to do much more John Wilson : Steps to expand acceptance 6) ed information. to examine and showcase the benefits of of best practice International Standards that I think that the WTO’s technical international quality and environmental support more transparent international sys- barriers to trade agreement (TBT) rep- standards, I believe. From a trade per- tems – including in global financial mar- resents a solid framework for mitigating spective, adopting best practice manage- kets – can facilitate increased economic the negative trade effects of technical ment systems can help businesses con- integration and growth. With regard to the regulations – and increasing transpar- duct international transactions more effi- current economic crisis, specifically, steps ency through wider use of International ciently – and increased efficiency leads to further strengthen financial and credit Standards. However, there is definitely to lower costs and better positioning to systems around the globe would most cer- room for improvement. Expanding the enter global markets. tainly have a positive effect in rebuilding confidence and enabling national economies to benefit from a strengthened glo- Figure 3 : EU standards in textiles and clothing (World Bank/European Union Standards Database). bal financial system. Services sector standardization, in particular, will likely receive much attention as we look to move beyond 40 the current crisis.

30 3) Witold Czubala, Ben Shepherd, and John S. Wilson (2007), “ Help or Hindrance ? The Impact of Harmonized Standards on African Exports.” Policy Research Working Paper 4400, World Bank. 20 Non harmonized 4) Maskus, Keith E., Tsunehiro Otsuki, and John S. Wilson (2004), “ The Cost of Compliance with Product Standards for Firms in Developing Countries : An Econometric Study ”. World Bank Working Paper 3590. 10 5) Helbe, Matthias, Ben Shepherd, and John S. Wilson (2007) “ Transparency, Trade Costs, Internationally and Regional Integration in the Asia Pacific.” harmonized World Bank. 0 6) See www.apec.org 1995 1996 1997 1998 1999 2000 2001 2002 2003 ISO Focus July-August 2009 7 © ISO Focus, www.iso.org/isofocus Main Focus

Renewing confidence

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Renewing confidence common knowledge of risk management Talking “ r i s k ” practice would have been needed, which currently does not exist. External buy-in Rarely do professionals respon- by Peter Janus, Risk Manager, Alcoa’s journey sible for assessing and measuring risk Alcoa Worldwide Alumina make decisions on how it will be man- Alcoa 1) of Australia started its aged. Rather, it is often external parties he recent economic downturn has formal enterprise risk management jour- and stakeholders – suppliers, the commu- spurred many to comment on the ney some ten years ago. The initial goal nity, regulators, etc. – who have a great Trole of risk in the current finan- was to ensure that future capital projects deal of influence on these decisions. cial crisis. Many financial commentators be delivered on time, within budget and These stakeholders, therefore, believe that the financial sector did not with the benefits promised. But in order need not only to be familiar with risk, adequately consider or wage risk, partic- to achieve this, a new approach to risk its concepts and processes, but also to ularly in mortgage lending in the USA. management was required. share a harmonized understanding of these principles ; otherwise they will be unable to make critical decisions on whether the risk management plans are acceptable to them.

“ ISO 31000 has the power to redefine risk and risk management.”

The risk management framework that Alcoa developed based on AS/NZS 4360 helped both its internal and external stakeholders to understand how the company manages risk, and to buy into that process.

Two-way street Communication is a two-way street. Both the speaker and the listen- er have to be able to understand each other. Anyone who works in an international capacity will know the frustra- tion of working in different jurisdictions The commentators assume that With a diverse mix of engineers, with different standards, and of having not only should the financial sector have coming from a wide range of disciplines to sell the process before being able to identified and assessed these risks, but and representing a global organization, begin the work. they also should have known how to Alcoa found a need to establish a com- communicate them to their stakehold- mon framework and reference points for Those that work globally in Eng- ers – the investors who bought into those risk. The Australian and New Zealand lish-speaking countries will have heard securities. Standard AS/NZS 4360, Risk manage- Equally, the commentators assume ment, was used to develop that framework. that these stakeholders would have under- And it has stood the test of time. Today, the framework has been widely deployed 1) Alcoa is a leading producer and manager stood what was being communicated to of primary aluminum, fabricated aluminum them. But for that to be the case, a shared throughout the global organization. and alumina facilities, and is active in all major aspects of the industry.

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Main Focus

of the maxim “ we are divided by the use of a common language.” The only way to overcome this is to work from a standard that provides a common understanding of key concepts, supported by a glossary of definitions. Without such a tool, it is difficult or even impossible to communicate risk effectively. Having a recognized standard has been key to the success of risk management within Alcoa. And risk management is now a fundamental aspect of its decision-making processes. The challenge going forward will be to move towards an International Standard, accessible to all relevant players and stakeholders in the global community. Such a standard will soon be available as ISO 31000, Risk management – Principles and guidelines. Alcoa, as an international cor- a shared understanding of risk and risk poration, will be an early adopter of management practices, which in turn will A whole new level ISO 31000. The standard fits well with improve risk communication. its current framework and objective to The fact that so many nations have In this way, ISO 31000 has integrate the world’s best practice in risk worked on the development of ISO 31000 the power to redefine risk and risk management to support and enhance busi- gives it great credibility. The standard will management. ness activities in all areas of its opera- provide a vehicle for the risk profession Future community commentators tions. ISO 31000 is perceived as the next to harmonize concepts, irrespective of the on risk will know what questions to ask, step in the development and improve- country. It will overcome confusion and how to critically investigate risk-taking, ment of the company’s risk manage- help stakeholders to understand the risks and maybe, even contribute to prevent- ment journey. that are being communicated. ing a future financial crisis.

About the author “ Alcoa, as an international Peter Janus is corporation, will be an early Risk Manager for Alcoa adopter of ISO 31000.” Worldwide Alu- mina, Australia. He is a fellow of the Australia Alcoa sees many advantages in and New Zea- having all countries where it operates land Institute of (some 34 countries around the world) Insurance and work from a common risk management Finance, a framework, supported by their own member of the Risk Management Insti- individual country risk management tution of Australasia and a registered communities. certified practising risk manager. Mr. Janus has spent over 30 years in the risk industry. During his career Mr. Janus Redefining risk has been an insurance underwriter, as well as an insurance broker. Recently, he A number of public commenta- has been developing enterprise risk man- tors on the financial crisis have asked the agement tools to assist his organization question : is risk management a failure ? meet its business objectives. Mr. Janus But perhaps we should be asking : is risk was the recipient of the 2004 the Risk communication a failure ? Management Institution of Australia’s Wide adoption of ISO 31000 will, risk manager of the year award. I hope, go a long way to ensuring we have

10 ISO Focus July-August 2009 © ISO Focus, www.iso.org/isofocus

Renewing confidence access to information than others, we The benefits call it information asymmetry. Exploit- ing information asymmetry can give one of faith – the so-called subprime crisis of personal actor in the marketplace an unfair advan- – expanded quickly during 2008 into a financial planning tage over others by enabling insider trad- full-blown financial meltdown that left ing and market manipulation. Wall Street in shambles. Lawmakers all over the world have In 2009, the crisis reached the real enacted regulations to prevent or mini- economy. Huge fortunes were devastat- by Otto Lucius, Chair, mize information asymmetry. Examples ed literally overnight. For a number of Austrian national committee include the European Union’s market reasons, investor psychology now rang- ON-K 244, Personal abuse directive and the markets in finan- es from disappointment to complete lack financial planning cial instruments directive (MiFID). And of faith in financial intermediaries – and of course, information asymmetry is an this mistrust is perhaps most acute in t’s just a fact of life : some people important contributing factor to our cur- regard to financial advisors. possess more knowledge and infor- rent global economic crisis. Imation than others. While this sim- Times like these make it even more ple truth may be benign in many areas, it important to limit information asymmetry. Myopic loss aversion can lead to severe distortions in financial A deep financial crisis leaves investors Investors generally tend to think markets. When certain people have more shaken, disappointed and even betrayed. in very short time frames and show very knowledge, superior analysis or faster What started as a relatively narrow loss low tolerance for short-term losses. This means that they may focus, for instance, on the risk of loss over a one-year time frame even when investing for retirement in 30 years. In behavioural finance, such behaviour is called “ myopic loss aversion.”

“ Times like these make it even more important to limit information asymmetry.”

Investments are made not only to make money per se, but also to reach certain goals. This was once fairly straight- forward. With or without insights from modern portfolio theory, investors could trust that asset management achieved returns at least equivalent to those of a market portfolio. But now this simple truth is in doubt, leaving investors uncertain. Most advisors – and commentators – tend to forget that investors nor- mally hold more than the asset class of securities and/or derivatives. Clients are invested in assets such as commodities, real estate, art and antiquities. They are looking for solutions for certain needs, such as personal risk analysis to deal with potential illness, disability or death, or they are in search of estate solutions.

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Financial planners certified against ISO 22222 will never look for quick return, but will instead strive to put the client’s interest first in every respect. Personal financial planning is built on trust and confidence between the planner and the client. The planner has an important fiduciary duty towards the client, which implies focusing on long-term consid- erations. Planning horizons tend to be at least 10 years, but may stretch to 25 years or more. An overarching principle is that all elements of financial planning – from financial management to asset management and retirement and estate planning – are treated holistically. This How financial planning assumptions focusing on the needs and approach accentuates the true value of helps goals of the client. financial planning. And only planners The core of this process is an with comprehensive education and expe- The current financial crisis strains integrated approach including invest- rience are able to provide the value and clients’ emotional and financial well- ment, tax, retirement, risk and estate security that consumers require. being as they plan for financial and life planning. Only certified financial plan- goals – which is of course, the central ners (CFP®) can provide the necessary aim of financial planning. This requires relationship of trust, in particular, those a long-term strategic approach. Condi- certified to ISO 22222:2005, Personal tions of extreme market volatility and financial planning – Requirements for upheaval force clients to take a long- personal financial planners. term view and to stay focused on a plan – assuming they have one. This is where a financial planning expert is an essential resource. A qualified financial planner is firm- ly committed to the value of the process, which means that he or she offers advice based on a comprehensive strategic scenario featuring well-considered

About the author

Professor Otto Lucius is Chair of the Austrian national committee ON-K 244, Personal financial Plan- ning, and actively participated in the development of the ISO 22222 standard. He is CEO of a research society in banking and finance, and teaches at the Department Banking and Finance, University of Graz, Austria, on financial planning and consulting. He is a founding member of Austrian Financial Planners.

12 ISO Focus July-August 2009 © ISO Focus, www.iso.org/isofocus

Renewing confidence the USA, for example, residential mort- Rating services – gage-backed securities were sold to investors all over the world. This was payments can be expected under various Bringing stability made possible by a mostly automated assumptions, and how these will affect to global financial process to underwrite mortgage loans, 2) each tranche. The highest tranche, for and a judgmental system – albeit aided example, is protected by subordinate markets by formalized modelling – deployed to ones, which absorb most of the risk. securitize them. The crisis involved both consumer A residential mortgage-backed secu- and corporate rating agencies in a two- by Dr. Oliver Everling, Chair, rity (RMBS) is a type of security whose step process. Residential mortgages were cash flows come from residential debt such issued to consumers who were typically ISO/PC 235, Rating services as mortgages, home-equity loans and sub- rated by their FICO® scores. The bundled debts that were sold to investors were apid growth in the number and prime mortgages. This is a type of mort- then rated mostly by the big three cor- types of financial rating instru- gage-backed security that focuses on resi- porate rating agencies : Moody’s, Stand- ments in recent years has led dential instead of commercial debt. R ard and Poor’s, and Fitch. to the creation of ISO project commit- It consists of lenders bundling tee ISO/PC 235, Rating services, which their residential mortgages into packages held its inaugural meeting in March 2007 and putting them into a trust fund, which Corporate versus consumer rating Different rating situations are experienced by corporations on the one hand, and consumers on the other. In corporate scoring, for example, data gathering is an interactive process, taking on the form of a discussion rather than mere information extraction from a data report. These discussions, following the aftermath of the financial crisis, have been referred to as a consulting process, filled with potential for error and bias. This view is further accentuated by the fact that corporate raters depended on their clients for the interpretation of data. Whereas in consumer scoring, data is several steps removed from the actual credit assessment. The client’s behaviour is measured by the lender. The lender hands over (a version of) this information to the credit bureau, which further (see ISO Focus May 2008). Since then, serves as collateral for which securities shapes it to fit its standardized record- research conducted on the financial crisis are issued. Each bundle of loans is rated ing system. The data is further processed has shown the urgent need to standardize by a credit rating agency using data that by the FICO®’s statistical algorithm. The risk measures, such as corporate ratings, includes, most importantly, the FICO® consumer scorings, and even indicators of (Fair Isaac Co.) score of the borrower. risk performance management. According Among other factors taken into account 1) Securitization is a structured finance process that involves pooling and repackaging to the research, standards are needed not are the loan amount, the ratio of the loan of cash-flow-producing financial assets into only for credit ratings, but also for con- to the value of the house, the geograph- securities, which are then sold to investors. sumer scorings, when both worlds meet ic location of the property, whether it is The term “ securitization ” is derived from in securitization transactions. 1) used as primary residence, first and sec- the fact that the form of financial instruments ond lien, etc. used to obtain funds from the investors are securities. The pool of mortgages is designed Pitfalls of securitizations 2) Underwriting is the process of approving to create different levels of risk, known or denying a loan based on an evaluation The financial crisis has revealed as tranches. The rating agency’s job is of the property and the applicant’s major deficiencies in the financial indus- to rate each tranche by running various creditworthiness and ability to repay the loan try and the global financial system. In models to test how many defaults or using computers.

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Main Focus

critical role of the Fico® score in the USA defaults (payments) and conflicts of inter- mortgage lending is due to the industry- est. The consumer credit score, once it wide application of the cut-off rate of became the main and often only meas- “ 620 ” (on a scale of 300-850 points) ure of creditworthiness, could not effec- for subprime borrowers. tively predict consumer losses. By comparison, in Germany, for example, each bank (or at least each banking group) has its own scoring system Standards for a fair that includes the Schufa score of Germa- playing field ny’s main credit bureau. This is only one Professional rating services need input in a range of other variables, such a minimum set of requirements in order as income or assets. The Schufa score for the market to distinguish their work does not play the same focal role as the from subjective analysis, and opinion- ® Fico score in the USA mortgage lending, based methodology. since there is no one specific cut-off rate for certain groups of borrowers. The objectives of the ISO project committee ISO/PC 235 on rating serv- The composition and processing ices are to eliminate methods and pro- details of the Schufa score are not pub- Exploiting the gap cesses that are driven by special interests, licly known, which reduces the dangers whether untrustworthy or deliberately 3) In the USA example, transpar- of gaming the system . What’s more, false, or that can be used to manipulate ency in the scoring system lent itself to the German public still has a fairly low capital markets as a result of failures in abuse by making it easier for borrow- awareness of credit scoring, and of the accreditation or auditing systems. data needed to improve scores. ers to manipulate the system. The lender (or rater) was obliged to disclose its In the aftermath of the financial assessment criteria, giving borrowers the crisis, all participants in the credit infor- opportunity to exploit the gap between mation and analysis chain will be required indicator and concept and, in so doing, to follow a minimum set of requirements. About the author increase their score without improving Rating agencies and credit bureaus will creditworthiness. need to simplify and provide broader Dr. Oliver market access to rating criteria, under- Everling, Chair lying models and analytical tools, to bet- of ISO/PC 235, ter organize information about their cri- is CEO of Rat- “ ISO/PC 235 will teria, models and policies, and to offer ing Evidence access to additional analytical tools. In GmbH, Princi- contribute to restoring addition, criteria, policy and disclosure pal of Everling market confidence and of information will need to be consol- Advisory Serv- bringing real and value- idated and formatted for easier access, ices, and a co- and referenced in their products. Final- editor of the adding benefits to the ly, the risk of gaming the system will magazine Kredit financial industry.” need to be carefully examined in order & Rating Praxis. He has served as a to avoid loopholes that may be exploit- board member of the Bundesverband der ed by unscrupulous users. Ratinganalysten und Ratingadvisors e.V. since March 2004, as well as of Rating- ISO/PC 235 will play an impor- Analysten-Qualifizierung at the Univer- In 2000, when the state of Cali- tant part in establishing a fair and level sity of Augsburg since February 2000, fornia forced lenders to disclose scores playing field. It will contribute to restor- and is a member of the Rating Commis- (regardless of the decision on the loan), ing market confidence and bringing real sion at the Deutsche Vereinigung für anyone could purchase a new, improved and value-adding benefits to the finan- Finanzanalyse und Asset Management score. The Internet only helped fuel the cial industry. e.V. Dr. Everling is visiting lecturer at numbers by giving advice on how con- the University of Applied Sciences of sumers could increase their average Frankfurt am Main, and Guest Professor credit scores. at the, Capital University of Economics Therefore, both consumer and cor- and Business, in Beijing, China. porate credit ratings played a part in the USA subprime mortgage crisis. Corpo- rate rating agencies which assessed the 3) Gaming the system means, simply, using securitized mortgage credit pools were the rules, policies and procedures of a system hampered by data problems created by against itself for purposes outside what these fake scores, as well as from correlated rules were intended for.

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Renewing confidence There is a growing need to define ISO tackles and specify the quality of credit scoring methods and processes, including the ing abilities and robustness of credit consumer credit credit score itself with its data founda- scoring models). Elements of these reg- tion and associated scales. ulations, imposed by data and consum- scoring er rights protection agencies, as well as voluntary commitments by credit score Quick, inexpensive users, should be taken into account in the proposed ISO standard. by Dr. Holger Muehlbauer, and objective? Managing Director, TeleTrusT Overall, international standard- Lenders use consumer credit ization in this area is expected to fos- timely development in the con- scoring to determine who qualifies for ter transparency, clarity, comparabili- text of the current financial cri- a loan, at what interest rate, and with ty and openness of methodologies, as A sis is the proposal to develop an what credit limits. Consumer credit scor- well as impartiality and other ethics- ISO Standard on consumer credit scoring is used by banks, credit card com- based principles. ing. The proposal was submitted by panies, mail order businesses, insur- Austrian Standards, the ISO member ance companies, collection agencies, for Austria. telecommunication providers, utilities,

“ Lenders use consumer credit scoring to determine who qualifies for a loan, at what interest rate, and with what credit limits.”

Consumer credit scoring has been employers and government agencies. the subject of much debate. But the Basel II 1) It has become widespread and popular international regulations on banks’ capital with lenders, as it allows a quantifiable 1) Basel II is the second of the Basel requirements made it an obligatory part of credit assessment quickly, inexpensive- Accords, which are recommendations on the process for obtaining retail credit. ly and objectively. banking laws and regulations issued by the Consumer rights advocates and Although there will be some debate Basel Committee on Banking Supervision. Basel II sets rigorous risk and capital market participants have criticized existing on how to standardize credit scoring, management requirements to ensure that a consumer credit scoring practices because bank regulators included in the Basel II bank holds capital reserves appropriate to of their central role in the USA subprime framework a set of regulations for retail the risk the bank exposes itself to through its crisis (see article on page 13). credit scoring (focusing on the forecast- lending and investment practices.

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Main Focus

sis, portfolio definitions, score values and classes, transparency of the methodology, documentation, and staff training. The proposed standard would then help prevent the emergence of methods and processes driven by interests that are untrustworthy or false, or that are able to manipulate the retail credit markets as a result of failures in accreditation or auditing systems. The market requires such a minimum level of qualifying criteria for professional credit scoring services, in order to distinguish these from mere expressions of opinion. Declarations of voluntary commitment alone are prob- ably insufficient to the market and do not foster competition for professional credit scoring services. The proposed standard would look only at consumer credit scoring, and will not address rating – which refers to the assessment of creditworthiness in a broader sense, not restricted to sta- On par with progress ment methods, taking into consideration tistical formulas, and subject to human rapidly changing credit markets, process judgement. The aim is not to lay down uni- challenges and technologies. The work is expected to start end form, constant and immutable credit scor- of 2009, pending formal approval. ing criteria, statistical methods and pro- Similarly, the proposed standard cesses. Rather, there should, and will be, does not intend to elevate a single mod- some variety in processes, systems, crite- el as the “one and only”, but be open ria and weightings, models and measure- to the innovative solutions that may be identified through research and development of academics and practitioners in the future. About the author

Dr. Holger Muehlbauer “International has specialized standardization in service standardization is expected to since 1996 and foster transparency, was involved in a number of clarity, comparability ISO and CEN and openness of projects related methodologies.” to services. In the past, he held the role of Secretary of ISO/TC 222, Personal financial planning, ISO/PC 230 Psychological assessment, ISO/PC 231, Brand The objective is to ensure that the valuation, ISO/TC 232, Learning quality of each consumer credit scoring services for non-formal education and method can be assessed in a standardized training, ISO/PC235, Rating services. way by measuring the forecast power, Dr. Muehlbauer’s professional precision, and robustness of the model. background is in law. He is currently A standardization of minimum require- the Managing Director of TeleTrusT ments would be developed with regard Germany, an IT security association to objectives, scoring objects, predict- comprising members from industry, ed credit events, forecast horizons, data authorities and research institutions. records underlying the statistical analy-

16 ISO Focus July-August 2009 © ISO Focus, www.iso.org/isofocus

Renewing confidence Reducing security risks tional guidance for implementing and in financial services operating an ISMS. • ISO/IEC 20000:2005, which is issued in two parts under the general title, Information technology – Service management, covers a broader set of processes for delivering IT services to meet customer and business requirements. • Joint technical committee ISO/IEC JTC 1, Information technology, subcommittee, SC 27, IT security techniques, and its working groups also continue to develop supporting technical standards addressing a diverse set of technical security domains. From a financial services perspec- tive, ISO/TC 68 addresses security threats and risks facing the global financial services industry through its working groups that focus on information security. A major portion of these efforts focuses on cryptographic techniques for providing confidentiality, integrity and authentication capabilities. Effective use of cryptographic techniques remains a critical risk man- by Mark A. Lundin, Chair, • Rationalized compliance requirements and control assessment processes agement and security tool for financial ISO/TC 68/SC 2, services and other organizations process- Financial services security • Reduced burden of compliance mon- ing electronic financial transactions. This itoring and testing. is particularly important in view of the inancial institutions and other organi- Full implementation of a uni- growth of online and mobile commerce, zations are challenged to comprehend and as new cloud-based business models and comply with an ever increasing fied compliance approach helps organ- F izations progress from the typical cur- emerge. ISO/TC 68 security standards can array of industry standards, regulations, rent state to the desired future state, as assist financial services organizations in and customer/business partner require- addressing these requirements. ments. Continued growth of online and shown below. mobile commerce, and the emergence of The technical committee is on the new cloud-based business models highlight leading edge in defining guidance for the the importance and challenges of protect- A portfolio of best use of cryptography, working closely with ing sensitive data. Leading organizations practice standards Joint technical committee ISO/IEC JTC 1, Information technology, subcommittee, across industries are adopting a unified When establishing the overall compliance to more effectively and effi- SC 27, IT security techniques. For exam- compliance program, there are a vari- ple, Financial services – Recommenda- ciently address these requirements, while ety of generally applicable ISO/IEC adding value to the organization. tions on cryptographic algorithms and standards that can be a valuable source their use – Standing Document (2008), of information. For example : provides up-to-date recommendations for Unified Compliance • ISO/IEC 27001:2005, Information cryptographic algorithms and strategic technology – Security techniques – guidance on key lengths and associated Approach Information security management parameters and usage dates. Recognizing Among the benefits of a unified systems – Requirements, has gained the evolving nature of the field and rate compliance approach are: considerable popularity and has been at which computer processing power is • Reduced risks through structured risk adopted on a worldwide basis, becom- increasing, this guidance will be updat- management ing the de facto standard for infor- ed regularly to ensure it is current. This mation security management sys- document provides specific guidance on Improved monitoring of compliance • tems (ISMS). Other standards in the topics including: recommended usage • Improved security ISO/IEC 27000 series provide addi- periods for algorithms of varying bit-

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Work stream Key activities Governance • Provide executive oversight and visibility through ongoing status reporting based on key performance indicators (KPIs) and compliance activities Risk management • Perform an annual risk assessment A unified compliance • Identify controls in a unified controls matrix to mitigate risks and approach includes address business and compliance requirements the following • Perform risk assessments of new projects and systems major components • Periodically update the unified controls matrix to address changes and new risks Compliance • Develop control testing/monitoring plans ing. In an increasingly virtual world, standardized key management practic- • Perform control testing/monitoring procedures in a coordinat- ed manner to reduce or eliminate duplication of efforts across the es can help an organization to achieve organization’s compliance functions business, security and risk management objectives. ISO/TC 68 and other JTC1/ • Monitor the status of risk mitigation activities for identified con- SC 27 can also serve as valuable inputs trol gaps when defining an enterprise key manage- • Provide support for external audit and certification activities to ment strategy, requirements, policies, and enable efficiencies processes/procedures. In many environ- Continuous • Identify and implement solutions to address aggregated control ments, this is a critical component of the improvement gaps unified compliance framework. • Automate controls and monitoring activities where possible to drive efficiency Conclusion Financial services and other organizations can embrace a unified strength ; measuring bits of security ; block • ISO 11568 series for key management compliance approach and ISO standards ciphers ; stream ciphers ; hash functions ; for retail banking to efficiently reduce risk, improve secu- message authentication codes ; asymmet- • ISO 13491 for secure cryptographic rity, and increase compliance. General- ric algorithms ; entity authentication and devices used in retail banking ly applicable standards such as the ISO/ key management mechanisms. • ISO 15782 series and ISO 21188 for IEC 27000 series can help an organiza- Examples of key ISO/TC 68 secu- certificate management and public key tion to establish a programmatic, proac- rity standards include : infrastructure operation in a financial tive approach to risk and compliance. • ISO 9564 series for secure person- services context. Supporting ISO/TC 68 technical secu- al identification number (PIN) man- rity standards can help organizations agement to address important requirements for Securing transactions protection of sensitive data in a more and data strategic, policy-driven manner. Uni- About the author fied compliance and ISO standards pro- Effective cryptographic key man- vide a practical way for organizations Mark A. Lund- agement practices are a fundamental com- to cope with a business environment in is a Partner ponent of securing transactions and relat- that is becoming increasingly virtual with KPMG ed data in electronic transaction process- and increasingly regulated. LLP’s Advisory practice based in San Francis- Compliance programme characteristics co and Chair of ISO technical Typical current state Implementation of Desired future state committee ISO/ unified compliance TC 68, Finan- cial services, • Silos of compliance • Unified compliance subcommittee SC 2, Financial services • Ad hoc monitoring • Continuous monitoring security. Mr. Lundin has over 18 years • Reactive to change • Proactively manage of business experience, including 11 (threats, regulations, change (threats, regula- years helping clients to assess, design solutions) tions, solutions) and implement controls – leveraging Manually intensive Automated industry standards – to meet customer, • • regulatory, and compliance require- • Detective focused • Preventative focused ments. His clients include leading global • Incident driven • Risk-driven investment service providers, software companies, investment • KPI-driven risk financial institutions and other organiza- • Unstructured risk management tions with complex technology environ- management Controls specialist ments. • • Inexperienced controls resources resources 18 ISO Focus July-August 2009 © ISO Focus, www.iso.org/isofocus

Renewing confidence

Fraud – These two ISO initiatives are the beginning of the development of a new ISO joins the fight class of standards. The resulting ISO standards will be focused on curtailing the financial loss and social consequences that result from fraud within the areas of brand protection, counterfeiting, identity theft and identity management. ISO/TC 247 will bring together experts by Michael O’Neil, Secretary, While we recognize the role of from around the world and from differ- ISO/TC 247, Fraud law enforcement and national legislation ent stakeholder groups to focus on fraud in fighting fraud, International Standards countermeasures and control issues and how standards can be devel- can also be a part of the solution. The oped as holistic solutions. ith the global economic crisis, development of standards as a means for we are continuously saturated the curtailment of fraud losses is a recent Because the nature of fraud has Wwith large numbers that reflect development, but one that many national national, regional and cultural compo- the billions of dollars and the millions standards bodies now recognize as holding nents, the technical committee will be of jobs being lost. But what often goes potential for the future. The use of stand- sensitive to these interests. unnoticed is the tremendous economic ards by business, government, consumer The secretariat of ISO/TC 247 has cost and social impact caused by global groups and law enforcement provides a cost been delegated by ANSI to the North Amer- fraud every year. effective, non-legislative means to develop ican Security Products Organization 1). To The US Department of Home- solutions to this complex problem. strengthen and coordinate efforts, a joint land Security, Immigration and Custom Earlier this year, ISO approved the meeting of ISO/PC 246 and ISO/TC 247 Enforcement’s “ Operation Bogus ”, recent- creation of technical committee ISO/TC has been scheduled for September 2009 in ly reported a disturbing increase in docu- 247, Fraud countermeasures and con- Santa Clara, California. This will be the ment and financial fraud worldwide. The trols, and project committee ISO/PC 246, second meeting of ISO/PC 246 and the International Anti-counterfeiting Coali- Anti-counterfeiting tools (see article on first for ISO/TC 247. In preparation for tion estimates that “ counterfeiting is a page 20). The proposals were made by these meetings, national mirror commit- USD 600 billion a year problem,” and in the American National Standards Insti- tees are currently being formed by their the USA alone, 750 000 jobs have been tute (ANSI), ISO member for the USA, respective standards bodies. lost to counterfeiting. and by the Association française de nor- According to the World Health malization (AFNOR), ISO member for Organization, the counterfeiting of drugs France, respectively. accounts for more than USD 32 billion About the author annually and enables the spread of drug What it all means resistant pandemics and treatment fail- Michael O’Neil ure. In the United Kingdom, the Home Fraud is Secretary of Office reported yearly identity theft loss- Noun ISO technical es of over one billion USD. These wor- committee ISO/ 1. Wrongful or criminal deception TC 247, Fraud rying trends and numbers deserve, even intended to result in financial or within the scope of the economic crisis, countermeasures personal gain. and control. He global attention and action. 2. A person intending or thing is the Executive intended to deceive. Director, former A new form of weapon Chair and co- Countermeasure founder of the While law enforcement and leg- North American Security Products Organi- islation play key roles in bringing crim- Noun An action taken to counteract a zation (NASPO). Mr. O’Neil has worked inals to justice, they cannot do it alone. in the security and financial field for the danger or threat. Their resources are overcome by the last 17 years. During this period, he has sheer volume of fraudulent activity that Control been a contributing member of the Docu- is often viewed by the public as a vic- ment Security Alliance, International timless crime. They need the support of Noun Association of Financial Crimes Investiga- business and interested consumer groups 1. The power to influence people’s tors, the Retail Protection Association, and to provide them with the tools needed to behaviour or the course of events. has served as a member of the American counter this growing problem. 2. The restriction of an activity or National Standards Institute (ANSI) Iden- phenomenon. tity Theft Prevention and Identity Manage- 1) www.naspo.info ment Standards Panel Steering Committee. Definitions provided by the Oxford English Dictionary. ISO Focus July-August 2009 19 © ISO Focus, www.iso.org/isofocus

security vendors. In particular, small businesses lacking the resources to conduct similar investigations will benefit from ISO 12931. Suppliers too will benefit from standardized criteria to better present the performance of the security solutions they offer. The standard will also facilitate the implementation and usage of anti- counterfeiting tools. By harmonizing global efforts, ISO 12931 will ensure that the fight against counterfeiting is even more effective. The standard will be useful for Anti-counterfeiting solutions brand owners, suppliers and authorities. All of these groups have been involved to gain back profits in the project since the very beginning, when the Association française de nor- malization (AFNOR), ISO member for by Jean-Michel Loubry, Chair, The ISO project committee, ISO/ France, prepared the original proposal for ISO/PC 246, Anti-counterfeiting PC 246, Anti-counterfeiting tools, is this International Standard in 2008. developing a standard that will define ISO/PC 246 enjoys a diverse and tools the performance criteria for authentica- international collaboration and a strong tion tools used in anti-counterfeiting of ounterfeiting is not something willingness to succeed – a good sign material goods. The future standard, to that just happens to luxury goods. for both users and producers of mate- be known as ISO 12931, will be objec- Believed to account for up to 10 % rial goods who are victims of fakes and C tive-oriented and applicable to all anti- of global commercial transactions, all mar- forgeries. kets are at risk of fakes and forgeries. counterfeiting security solutions. Because they are not regulated, many counterfeited products present dan- Choosing only the best gers to the health and safety of individu- als. Not only do they distort competition The first step in the fight against

and violate intellectual property rights counterfeiting is to define a strategy: About the author of legitimate producers, undermining • Select a product fair trade and distorting tax revenues, Jean-Michel • Establish where and how it is pro- Loubry is Chair but they also generate risk for consum- duced ers, users and the supply chain. of ISO project • Look at how it is distributed committee ISO/ Counterfeiting can significant- PC 246, Anti- Decide who and how it can be con- ly reduce the profitability of legiti- • counterfeiting mate businesses. The risks are impor- trolled tools, and of the tant : low turn-over, stolen know-how, • Determine the level of risk. equivalent lost jobs and wrongful lawsuits follow- French mirror ing accidents caused by counterfeited committee. An products (that are almost impossible to electronics prove as such). “ All markets are at risk engineer and graduate in strategic man- These costs can compromise the agement, Mr. Loubry has made his of fakes and forgeries.” career in major hi-tech companies in the long-term survival of a business. It is telecommunication sector, starting in therefore crucial to protect products and Research and Development, then as Pre- material goods, especially in turbulent The security solution chosen for sales Manager for Export and as Product economic times, when businesses must protection against counterfeiting will Marketing Manager. maximize their profitability. depend on the answers to these ques- He jointed the French Traceability Cen- Choosing an anti-counterfeiting tions. The standard will help business- tre in 2006 where he is managing the security solution today is a complicat- es select the most relevant anti-coun- General Interest Missions Department, ed feat. Although many options exist, terfeiting solution to meet the compa- in charge of information, training and very little information is available and ny’s strategy. It will also make it easier standardization. a lack of harmonized requirements dis- to compare and verify the required per- torts comparison. formance level with that promised by

20 ISO Focus July-August 2009 © ISO Focus, www.iso.org/isofocus

Renewing confidence Turning financial crises into opportunities – Customer satisfaction standards

by Bill Dee, Kernaghan Webb, plaints management. They can be used customer satisfaction codes of conduct and Stanislav Karapetrovic, to support the related components of an can be an innovative way of maintaining, ISO 9001-based quality management or increasing, market share. There are former convenors or liaison system, or can be applied independent- now many examples of such codes in a experts in the working groups ly of ISO 9001 and each other. In addi- number of different industry sectors. developing ISO 10001, tion, they can assist companies in meet- ISO 10002 or ISO 10003 ing and exceeding consumer protection laws. Overall, ISO’s customer satisfac- Codes of conduct tion standards are an attempt to distil n times of financial crises, businesses international best practice, and provide Several North American airlines face a triple challenge : how to show benchmarks to help organizations and have recently announced customer com- sceptical customers that they can be I their customers do business in a compet- mitments pertaining to a variety of issues trusted, how to do more with less, and itive and borderless marketplace. that meet, or exceed, legal requirements. how to stand out from the competition. These include compensation in case of Three ISO quality management flight delays, overbooking or flight can- standards provide a road map for enhanced cellations, charges for extra luggage, and cost-effective customer satisfaction, “ Studies suggest and pet-friendly policies. If these com- both through good times and bad. This that effective complaint- mitments are framed in clear and pre- is accomplished through : handling practices cise language, and backed by employee • Codes of conduct that set out up-front training, adequate resources, an appro- commitments and assurances concern- can significantly improve priate communication plan, and policies ing a particular feature of a product, brand loyalty.” that ensure commitments are consistently service or activity (ISO 10001) met (which are all factors addressed in ISO 10001), codes of this sort are like- • Internal complaints handling ly to attract customers. (ISO 10002) When companies make commitments about their products, services and Customer satisfaction codes of • External dispute resolution activities in codes of conduct to their conduct have also been successfully used (ISO 10003). prospective and actual customers, they to attract and maintain market share in These three ISO standards, which not only differentiate themselves from the fast food home delivery sector. For are part of the ISO 9000 series, are con- their competitors, but they also decrease example, starting in the 1990s, certain ceptually linked to form key elements the likelihood of complaints arising lat- pizza take out restaurant chains began of a comprehensive approach to com- er. Particularly in economic downturns, incorporating a time guarantee on food

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delivery, specifying that late deliveries lines for codes of conduct for organi- the company can also build and main- would be free of charge. This practice is zations, gives step-by-step guidance to tain trust. Studies suggest that effective a succinct and powerful form of custom- companies for developing and imple- complaints-handling practices can sig- er satisfaction code of conduct, that gave menting a set of commitments to cus- nificantly improve brand loyalty. the innovating restaurants a “ leg up ” on tomers about their products, services If a company does not have a their competition and revolutionized the and activities. Companies who follow system to deal with legitimate custom- fast food industry in the process. the guidance are in a good position to er complaints and get feedback on how If properly developed and imple- have the kind of accurate and effective its products and services are performing mented, codes of conduct reduce custom- customer satisfaction codes of conduct in the marketplace, it may lose its cus- er uncertainty about a product, service that maintain or enhance market share tomer base and quickly find itself at a or activity, thereby enhancing trust in and reduce complaints. disadvantage. This is true in a competi- the company. However, if a company’s tive environment, and even more so in a commitments are not clear, or cannot be financial crisis or a recession. In-house complaints consistently met, they can backfire with ISO 10002:2004, Quality man- negative consequences, both for the com- handling agement – Customer satisfaction – pany and its customers. But enhancing customer con- Guidelines for complaints handling in ISO 10001:2007, Quality manage- fidence does not end there. Setting up organizations, gives guidance on how ment – Customer satisfaction – Guide- a complaints-handling system within to set up and implement a complaints-

About the authors

Bill Dee is the Kernaghan Stanislav Director of Webb is an Karapetrovic Compliance and Associate Pro- is a Professor Complaints fessor in the of Mechanical Advisory Serv- Department of Engineering at ices in Australia. Law and Busi- the University He consults in ness at the Ted of Alberta in the area of com- Rogers School Edmonton, pliance manage- of Management, Canada. ment, dispute Ryerson Univer- He is a management sity, Toronto, Customer and consumer affairs. Mr. Dee was the Canada. Dr. Webb was the Convenor of Satisfaction Liaison Expert of ISO/TC Convenor of ISO/TC 176/SC 3/WG 10, ISO/TC 176/SC 3/WG 12, External cus- 176/SC 3 and the Convenor of the Complaints handling, the working group tomer dispute resolution system, and ISO/TC 176 Task Group on Portfolio that developed ISO 10002. ISO/TC 176/SC 3/WG 13, Market-based Management. codes of conduct, the working groups that developed ISO 10001 and ISO 10003.

22 ISO Focus July-August 2009 © ISO Focus, www.iso.org/isofocus

Renewing confidence handling process within a company to ISO 10003:2007, Quality manage- address issues of concern to custom- ment – Customer satisfaction – Guide- ers. Complaints that are appropriate- lines for dispute resolution external to Fair, consistent and credible guid- ly and expeditiously addressed by an organizations, provides guidance on three ance for resolving customer conflict is organization are likely to maintain or types of processes for external dispute valuable to companies, and can enhance enhance customer satisfaction. In addi- resolution. These are : customer trust. tion, the “ market intelligence ” infor- • Facilitative processes, such as when mation included in the complaint may an external party brings custom- assist the organization in improving er and organization representatives The added value the quality of its products, services together in an attempt to encourage of ISO standards and activities. the parties to resolve the problem ISO 10001, ISO 10002 and ISO themselves 10003 1) emphasize the value of com- Handling complaints • Advisory processes, where, for panies providing codes of conduct, as instance, an external party provides well as complaints handling and dis- externally recommendations as to how problems pute resolution processes, which are vis- Even when ISO 10002 is fol- can be resolved ible and accessible, customer-focused, lowed, there are some cases in which and grounded in a process of continu- • Determinative processes, in which, al improvement. In addition, they assist complaints cannot be resolved inter- for example, an external party, with companies in developing and applying nally. In such cases, guidance regard- the prior agreement of the parties, codes and processes that are responsive ing the services of external parties, who makes a decision to resolve the to the concerns of their customers, both can assist in resolving disputes, may be dispute. needed. In theory, courts and govern- in good times and bad. mental consumer protection agencies Therefore, any company seeking may be available to address such cas- “ Particularly in to maintain or enhance the levels of sat- es. However, there may be situations isfaction and trust of its customers – dur- where recourse to courts and other for- economic downturns, ing the financial crisis and in the recov- mal public bodies is impractical, undu- customer satisfaction ery – would be well advised to turn to ly costly, or both. codes of conduct these ISO standards. Many companies participate in external redress systems, whereby cus- can be an innovative tomers have the option of having their 1) The three standards were developed by way of maintaining working groups within the ISO technical problems reviewed and addressed by or increasing committee ISO/TC 176, Quality management third parties, particularly in situations and quality assurance, subcomittee SC 3, where internal complaints handling has market share.” Supporting technologies (see About the not been adequate. authors).

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one-fifth of their export growth is due • Food Quality and to their adoption of ISO 9001. Notably, • Mango, strawberry and uchuva the companies reported that not only did growing. competitiveness their export volumes increase, but also the as strategic allies number of countries to which they export. These sectors have experience in The boost was mainly felt in exports to exports and are already meeting demand for the USA, Central America and the Andean their products on international markets. To region. The results proved that ISO 9001 find a sustainable balance between demand by Germán Nava, certification is a passport to competitive- and supply, it is essential to help the com- Standardization Director, ness in international markets. panies fulfil technical standards. ICONTEC While certification is a voluntary Other traditional Colombian eco- process, many companies and consumers nomic sectors with a high share of sales lobalization affects trade, technol- expect that their suppliers, products and in exports, such as leather and shoes, ogy and communications. More services have management system certifi- actively work with ISO standards for Gand more companies are joining cates. In the survey, 43 % of respondents said their products. For this reason, stand- the already massive group wishing to that more than one-fifth of their customers ards ISO 20344:2004, Personal protec- export products or services. require them to hold certification. tive equipment – Test methods for foot- Free trade agreements have pro- wear, ISO 20345:2004, Safety footwear vided excellent opportunities to launch and ISO 20347:2004, Occupational foot- products, open markets and reach mil- Helping SMEs become wear, have been adopted as Colombian lions of potential consumers. Colombian globally competitive standards. These standards are also now companies therefore need to be aware of harmonized in the Andean region. On the other hand, it is important the importance of quality, price, opportu- ISO standards on leather tests have to note that at least 90 % of Colombian nities and capacity, but also be prepared also been adopted as national Colombi- companies are micro, small and medi- to face competitive challenges from com- an standards, and provide the basis for um enterprises (SMEs). There are many panies in other countries. sales of Colombian bovine leather to aspects to be improved before these com- foreign markets. The adoption of standards to panies effectively reach global compet- improve quality and competitiveness has itiveness. To contribute to this goal, a become an essential strategic objective number of projects have been set up to World of standards among far-sighted organizations. promote their ability to export. Finally, it is important to note that working with International Standards at a Results that show national level and for exports promotion To evaluate the benefits of ISO “ The survey proved that has led to increased Colombian partici- 9001:2008, Quality management sys- ISO 9001 certification pation in the preparation of new stand- tems – Requirements, the Colombian is a passport to ards. A number of national committees Institute of Standardization and Certi- are beginning activities to establish sev- fication (ICONTEC), ISO member for competitiveness in eral ISO mirror committees. the country, conducted a survey examin- international markets.” ing the internal and external advantages achieved by Colombian companies cer- About the author tified to the standard. One such project is Norexport, The survey involved careful Standards for Exports, led by ICONTEC Germán Nava is measurement of factors such as proc- in Colombia with significant participation Standardization ess improvement, effects on productiv- from INDECOPI, ISO member for Peru, Director at ity, impact on sales and financial output, and IBNORCA, ISO member for Boliv- ICONTEC. He is competitive factors and, most important- ia. Norexport exists to drive exports in the a member of the ly, influence on exports. Andean region by aiming for world-class Colombian Dele- The survey was based on a repre- performance through fulfilment of product, gation for Com- sentative sample comprised of 570 cer- process and system-technical standards. mercial Negotia- tions with the tified companies (38 % of which are in The focal economic sectors iden- USA and the exports) from various economic sectors tified by the project include : European Union. in Colombia. Participants were drawn • Graphical arts Mr. Nava is a civil engineer from the from the cities of Barranquilla, Bogota, • Dairy products National University of Colombia, as well as Bucaramanga, Cali and Medellin. a specialist in business administration and Results showed that 75 % of export • Textiles and clothing quality management from Rosario Univer- companies believe that approximately • Heliciculture (snail farming) sity and Santo Tomás University.

24 ISO Focus July-August 2009 © ISO Focus, www.iso.org/isofocus

Renewing confidence

If only we could go back in time

by Bob Alisic and Jose Dominguez, members, ISO/TC 176, Quality Management

orking on the principle that the best way to communicate a lesson is a story, this article takes an original approach to demonstrating how ISO W9001:2008, Quality Management Systems – Requirements, and the soon- to-be published ISO 9004:2009, Managing for the sustained success of an organization – A quality management approach, can help ensure the sustained success and effective quality assurance of an organization. The story begins at the boardroom of Top Wheels Inc.1), a late afternoon, some- time in June 2009…

“ We’re in a critical situation. ting orders with suppliers, and our sales Our monthly sales volume has dropped people in the branch offices are working by nearly 50 % compared to May of from home to reduce costs. But still, it’s last year.” not enough ! ” The Top Wheels Inc. CEO’s voice The quality manager intervenes, is trembling. He is giving a presentation “ These measures are helping, but we’re to the board. still seeing yields drop. Processes are “ We first saw a 10 % slump in becoming unstable, and we’ve had some January, and despite our steps to boost production and warehouse incidents – sales, the trend has continued. fortunately without serious injuries. But it’s a warning. We can’t go on like this “ Our factory is now working only for much longer. And subcontracting has But the director of operations, three days a week. We’ve ceased all side only brought us new problems.” who is perhaps the manager with the most activities such as training and preventive “ real life ” problems, strides purposefully maintenance on equipment. We’re cut- around the table, pauses to gaze at each “ You need to consider board member, and cuts short the debate : “ At this point, we have nothing to lose. the efficiency of your Let’s hear what they have to say.” QMS and the potential for improving performance.” No laptops ? The two consultants, a short stocky With evident despair, the CEO man and a tall slender woman, enter the asks, “ What went wrong ? ” room. They are indeed different. No black After a rather long, painful silence, suits, no expensive black pilot suitcases the new human resources manager, a young and… no laptops ? and optimistic woman, stands up : “ In my After shaking hands, the first previous company I once worked with two speaks and goes straight to the point : consultants who had rather unusual capabilities. Their help averted disaster for the “ Just imagine what you could do company. I’ve taken the liberty of invit- with a time machine, able to take you ing them to share some ideas.” and your team back in time.” The sales director immediately The board members stare at each objects : “ We’ve hired plenty of consult- other dreamily. ants, and all they do is cost money and “ And, if we tell you that we have 1) A fictional company name. time. Forget it ! ” such a machine ? ”

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Going back The second consultant takes over, “ First I want you to ask yourselves : • Why are you in this position now ? • Could you have prevented it ? • What would you do differently to avoid this situation in the future ? “ These are not easy questions. But think about what you would do if you could start over with the same people, their capabilities and habits, if we could bring you back in time, to say 1 June, 2005. “ On our side, we’ll offer you some “ Top Wheels Inc. has shown sol- est rates we pay on the capital we need new tools for managing your organiza- id growth in sales and earnings for four to finance our company ? I’m not saying tion. You may feel that you already have years. You have three very loyal large that the worst will happen, but we need enough management and quality tools in customers in the auto and truck indus- to be prepared.” place, but for the sake of argument let’s try, and several smaller ones in machine just get into the time machine and go tools. Your customers are very satisfied back to 2005 with an open mind.” with your products. That sounds com- A warned man counts fortable and stable, doesn’t it ? Many for two companies would be envious. Calm before the storm The operations director rises and “ But… how certain are you that speaks almost gruffly, “ We have to look The board members are sitting you can hold on to this position ? You’re at the risks in our processes. We can’t around the table, but appear to be wak- making profits, but how much do you avoid all of them, but a warned man ing up from a long, deep sleep. There waste ? Do you have alternative prod- counts for two. We don’t have a sound are two strangers among them – ah, the ucts for your current customers ? Or for strategy for the future. We’re just run- consultants. other markets ? Do you have a business ning and running, with good success so One stands up, “ Welcome back contingency plan ? ” far, but will this last ? ” to June 1, 2005. We are here to help you One of the consultants speaks up, take a long hard look at your company, “ It looks like you all have very differ- so you can see where the future leads and ent ideas about how you work and how how you can be better prepared.” “ The combination of ISO mature your company is today. And it’s even harder to reach consensus on pro- 9001 and ISO 9004 will jections about how the company should help you get the most of perform in the future.” your quality system.” She tacks up a large sheet of paper with a simplified drawing of the company’s organizational structure, highlight- ing key process flows. “ Let’s start with some simple steps. Can you identify are- The sales director is blunt, as where you company has difficulties “ There’s no reason to do this. We have today, by placing these red stickers on good customers who have been with us the chart ? Please put your name on them for a long time. This is a waste of effort, so that we can later discuss the different and I need all my time to sell.” perceptions (see Figure 1). The CEO stands up and speaks, The operations director comes for- slowly at first, considering his words care- ward to get a better look, “ Hey, I know fully, “ Things are fine now, but I have that part in the middle of your drawing. just woken from a nightmare. Imagine That’s the ISO 9001 process-based qual- that we fell into a financial crisis. How ity management system (QMS). We’re will we be affected ? using it, but right now it’s more or less “ Will people still buy as many just a paper tiger ”. new cars and trucks ? What would hap- “ ISO 9001 allows us to reach more pen to our share price and to the inter- customers, ” explains the sales director,

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Continual improvement of the quality management system leading to sustained sucess After the exercise, the CEO appre- ISO 9004 Ch 4 Managing for ciates the result, “ I only interact with Organization’s the sustained Organization’s Environment success Environment the QMS in our quarterly review meeting. Now I realize how much some of ISO 9001 Ch 5 ISO 9004 Ch 9 Interested Parties ISO 9004 Ch 5 Management Improvement, Strategy you are supporting the system and I am responsibility innovation and policy Interested Parties Needs & and leaning thankful for your effort.” expectations He takes a deep breath and, star- ing into the eyes of each member, says ISO 9004 Ch 8 ISO 9004 Ch 6 ISO 9001 Ch 8 ISO 9001 Ch 6 Monitoring Customers Resource Measurement Satisfaction seriously : “ My friends, I think we need Resource measuring management analysis and management analysis and (extended) improvement to do more with ISO 9001. review Customers “ We should be more proactive and use other standards to complement ISO

Requirements 9001. For instance, is there anything in ISO 9001 Ch 7 Product & expectations Product realization ISO 9001 about strategic planning ? We ISO 9004 have a strategic meeting every year, but ISO 9004 Ch 7 Process we never refer to the standard. Yet some management of the topics listed on the flipchart are part of our discussions.” Foundation for Quality Management principles

Figure 1 : Extended model of a process based quality management system. Red dots indicate difficulties.

“ Our current customers too are happy to see that our certificate is still valid.” Figure 2 : Benefits and issues identified after implementation of ISO 9001. The quality director intervenes, “ ISO 9001 shouldn’t just be a driver for Benefits Issues getting a certificate to hang on the wall. Keep customers Customer communication is reactive In my opinion, this is an important part of our problem.” Gain new customers Some customers do not see any value in our “ You’re right, ” agrees the oper- ISO 9001 certificate ations director, “ We had trouble link- Understand our business in terms of Interaction and communication between the ing our daily problems with the stand- process processes is weak ard, but this model helps us to see the big picture.” All activities are documented Some documents seem to provide little or no value The HR director comments “ It’s an interesting model, but it doesn’t show the People are trained We have problems caused by people, relevance of people in the system ”. To which especially subcontractors’ employees the quality director replies, “ People are one Bad products easily identified Our waste levels are increasing of the resources to be managed. There are other important resources, like infrastruc- Management review is held each quarter Top management is not fully committed ture and the work environment.” Figure 3 : Strategic objectives and related actions, deliverables and owners.

Could you get more out Strategic issue Deliverable Owner of ISO 9001 ? The operations director has a pro- Our process for deciding Guideline/rule HR Director posal, “ It seems that we have different what is important opinions and perceptions about what ISO 9001 represents for our business. Let’s Develop contingency Process flow-chart + Quality Director responsibilities and do an exercise.” planning process authorities table The directors go to the front of the room and begin a brainstorming Prepare contingency plan Contingency Plan + Operations Director activity to collect ideas on a flipchart for key suppliers guideline (see Figure 2).

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The quality director responds, “ Section 5.4 of ISO 9001 is relevant to strategic planning activities. But the standard isn’t covering the strategy defining and deployment process.” The operations director continues, “ Our quality objectives are focused on product characteristics and on-time delivery. The output of our strategic meeting is the definition of a set of objectives for each unit of our organization. But we’re not considering all the objectives as part of the business strategy. This is a big gap.”

What can we do about it ? The two consultants stand up, sustained success of an organization – The consultants pull out a mod- “ This was a good top-level discussion. A quality management approach 2), can el showing the interaction between ISO Now that we know where the problems help you do just that. When compared 9001 and ISO 9004. are, what can we do about it ? ” to ISO 9001 the objectives of custom- “ As you can see here, there is a “ First, you need to consider both er satisfaction and product quality are correlation between ISO 9001 and ISO the efficiency of your current QMS and extended to include the satisfaction of 9004. Section 5.4 of ISO 9001 for instance, the potential for improving perform- interested parties and the performance is directly linked with sections 4 and 5 ance. ISO 9004:2009, Managing for the of the organization.” of ISO 9004. Both could be powerful references in your strategic meetings. The combination of both standards will About the authors allow you to get the most of your quality system, so that it doesn’t stay ‘just Bob Alisic is a José a paper tiger’.” member of ISO Domínguez is technical com- leader of the mittee ISO/TC task group Tips and tricks 176, Quality responsible for The consultants propose “ Lets management identifying ide- and quality as and concepts dig deeper with a tool known as the assurence, and that may ‘Self-assessment of key elements of an responsible as a become the organization against five maturity lev- task group lead- foundation of els’ as given in the new ISO 9004 (see er for the devel- ISO 9001 in the Figure 4). opment of the new ISO 9004:2009. future. He was the leader of the task “ Read each row and see if your Before starting his own consulting, group responsible for the revision of organization is doing what is described training and auditing company, ActinQ, ISO 9001 published in November 2008 in each cell. Stop when you see that he spent 17 years as a consultant and and a member of the ISO 9000 Advisory some aspects are not implemented. Mark trainer in quality, innovation and change Group. He is also a member of the the cell with a red cross. The result is management. Prior to joining the con- Board of the Latin American Institute an image of your maturity level per key sulting field, Bob Alisic spent 20 years for Quality (INLAC). Involved in quality element. with Philips Electronics in very different and other management fields since 1990, positions (product development and José Domínguez is President of Plexus “ Now, you are ready for the next engineering manager, business manager México, a subsidiary of Plexus Interna- step. You have to create a management and divisional technical manager for tional, which develops and deploys solu- agenda showing what should be done customer service). tions for the implementation and and with what priority. We’ll start by E-mail : [email protected] improvement of management systems, defining your organizational vision. Put and related tools and methods. a green cross next to the cell describing Web : www.actinq.nl E-mail : [email protected] Web : www.plexusintl.com.mx, 2) This newly revised version of ISO 9004 is www.inlac.org expected to be published 4th quarter 2009.

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Renewing confidence

Key element Level 1 Level 2 Level 3 Level 4 Level 5 What is the ...... the maturity you would like to reach over management ...... focus ? ...... three to four years (see Figure 5). What is the ...... “ As you can see, there could be a leadership ...... substantial difference between your cur- approach ? ...... rent situation and your future. The final How do we ...... step is to develop a set of actions with decide what is ...... desired deliverables and deadlines for important ? ...... each of the strategic objectives. These What do we ...... objectives could help you safeguard your need to do to ...... future (see Figure 3 on page 27). get a result ? ...... “ Now it’s time to use our time Figure 4 : A segment of a self-assessment table. machine and return to 2009.”

Key element Level 1 Level 2 Level 3 Level 4 Level 5 What is the ...... Back to the future management ...... focus ? ...... The board looks around nervous- ly. Has anything changed ? What is the ...... leadership ...... The consultants speak, “ What approach ? ...... you need is a new approach. We can’t How do we ...... change what has happened, but we can decide what is ...... help you to learn from experience, so important ? ...... that five, ten years later, we are not here What do we ...... wishing for that machine.” need to do to ...... A lesson well taught. get a result ? ...... The CEO is the first to speak : Figure 5 : Expected maturity over 5 years. “ This was an important learning experience. We are now in the midst of a heavy storm, and we will find a way to survive the crisis. But we must learn how to get our company better prepared to face such situations. We need to identify and manage risks, learn how to outsource efficiently, and most importantly, to have a clear strategy for the future. “ Let’s agree to revisit ISO 9001:2008, to really capture the elements that will help us improve our performance. “ Some of our best suppliers and toughest competitors are already gain- ing a huge advantage by combining ISO 9001 and ISO 9004 for their management systems. Why should we not do the same ? ” The board concurred, “ Let’s do it ! ”

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Main Focus

Conformity important to maximizing benefits

by Sean MacCurtain, Secretary, ISO Committee on conformity assessment (ISO/CASCO)

n an economic downturn, conformity assessment does not immediate- Ily jump to mind as one of the factors that could be used to assist organizations to cope with additional competitive pressures. Organizations often tend to cut costs that do not bring direct and immediate returns, while the benefits of conformity assessment are usually incre- tion old assumptions. It is an opportu- petitive. It is not possible to put a figure mental over the long-term. nity to determine how to improve prac- on this confidence. Conformity assessment can be tices and make conformance more cost Irrespective of the state of the adapted to suit the organization’s own effective for organizations without com- economy, customers will not compro- circumstances. Changing conditions may promising the integrity of the conform- mise on quality or expectations. Tough impact the way quality is achieved. Use ity assessment process. It may result in economic times do not lower customer of International Standards for assessing confirmation of the way things are done expectations ; instead they often make quality helps in the pursuit of continual or in change. customers more discerning. It remains improvement, and its flexibility is criti- We believe that all the activities crucial for organizations to decide how cal in tough economic times. associated with conformity assessment they can maintain their conformity provide organizations with tools to meet assessment activities given the econom- customer expectations and remain com- ic downturn and the expectations of the Room for improvement petitive. The economic downturn also market. Organizations should recognize The current economic downturn gives us an opportunity to re-assess the that conformity assessment is one tool is causing some organizations to ques- processes currently used in conformity they can use to demonstrate their com- tion the value of continuing with certifi- assessment and to identify how we can mitment to quality. cation and accreditation. Organizations do it better and more efficiently. Many organizations are faced with experiencing a business slowdown may the real problem of changing priorities be tempted to postpone such activities for allocation of scarce resources and to eliminate a real cost. The benefits of the how to maintain their conformity giv- These organizations, however, CASCO toolbox en financial pressures and loss of busi- need to look at the expense of giving up The CASCO toolbox has been certification and accreditation. This deci- developed to offer a complete set of sion may entail loss of reputation, a lack standards and guides to promote con- About the author of confidence from customers, charg- sistent and effective conformity assess- es for product recalls, and many other ment activities. This allows for recog- Sean MacCur- tangible and intangible costs. The costs nition of conformity assessment carried tain is the Sec- of non-conformance, therefore, may be out in different parts of the world by dif- retary of ISO significantly higher than the expense of ferent organizations. But the true benefit Committee on conformity assessment. of implementing the CASCO toolbox is conformity Innovation arises from new chal- the confidence it gives management and assessment (ISO/CASCO). lenges and changing circumstances. The customers that all reasonable procedures economic crisis provides an opportunity and process have been implemented. This, re-assess our basic principles and accept- in turn, allows the organization to meet ed methods. It should prompt us to ques- customer expectations and remain com-

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Renewing confidence ness. There are many competing issues within an organization when it comes to funding. For example, in the area of third party conformity assessment, accreditation and certification bodies are working together to develop strategies to reduce the impact of the economic crisis. It is important that these emerging strategies do not compromise the acceptability of certificates from one country to another.

Dealing with the pressures Many of the solutions revolve around the postponement of surveillance and recertification activities for organizations where there has been a demon- strated fall in business activity. Accred- itation bodies also have been requested to do likewise with laboratories and certification bodies. In developing and laration on social justice for a fair glo- implementing such strategies, it is vital Social balization, which states that violation that the integrity of the system is being of rights at work cannot be invoked as a maintained and functioning throughout responsibility comparative advantage, and that labour this period, and that only verification is in time of crisis – standards should not be used for protec- being postponed. How much of a delay tionist purposes. This Declaration also is permissible varies according to specif- ISO 26000 identified the role of the tripartite dec- ic circumstances, but should likely vary laration of principles concerning mul- between nothing to six months. and beyond tinational enterprises and social policy 1) The critical factor here is that (MNE declaration) and the different the conditions for granting a delay or actors in addressing social issues. postponement are clearly defined and by Steven Oates, Senior Adviser By early 2009, the G-8 brought that there is confidence that conformity on Rights at Work, International further focus to the human dimension of is being maintained by the organization the crisis, pointing also to the promo- during the postponement. Any request for Labour Organization tion of corporate social responsibility postponement would need to be justified, ince ISO embarked on the high- (CSR) initiatives – not least the ILO’s recorded and backed up by evidence of ly important development of an MNE declaration and the Organisation the system being maintained. It is gener- International Standard for social for Economic Co-operation and Devel- ally accepted that recertification should S opment (OECD) Guidelines – as part of responsibility, the world has been cat- not be extended beyond the recertifica- apulted into a global economic crisis. a strategy to restore confidence. tion date or expiry date of the certificate. By the time the ISO Working Group on Following this, the Group of 20 There are other options that can be iden- Social Responsibility met in Quebec (G-20) Finance Ministers and Central Bank tified on a case-by-case basis. City, Canada, in May 2009 (see article Governors focused on economic and job Conformity assessment activi- on page 39), the financial markets and growth, with a view to fair and sustaina- ties and the CASCO toolbox can assist the world economy already faced serious ble recovery for all. As requested by the organizations to accommodate the pres- global challenges. The severity of the cri- G-20, the UN’s lead in pursuing the mil- sures of the economic downturn, as they sis and ongoing uncertainties have added lennium development goals (MDGs) and have been developed to be performance- urgency to a series of questions. social protection has been complemented and outcome-based. They give organizations a number of options on fulfilment and the flexibility to adapt when ISO 26000 framed in 1) The principles laid down in this universal required, without negatively impacting the global context instrument offer guidelines to enterprises, the integrity of the process. governments, and employers’ and workers’ The decent work agenda was organizations in such areas as employment, already crystallizing in the International training, conditions of work and life, and Labour Organization’s (ILO) 2008 Dec- industrial relations.

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Main Focus

Thus, the labour practices section of the future ISO 26000 has, on the basis of ILO standards, been the object of rather solid consensus and agreement, while other sections have perhaps required longer elaboration. The importance of this kind of interaction for both the quality of the product and the prospects of its subsequent implementation cannot be overvalued.

The ILO global jobs pact The meeting of ISO Working Group on Social Responsibility in Que- bec City, Canada, fell neatly between the G-20 Summit in March 2009 and the ILO Conference in June 2009, which adopted the Global Jobs Pact (the Pact). This conference discussion has been the ILO’s own specific response to the crisis, which is deliberately for- mulated in terms of the added value the organization can provide. And, like ISO 26000, it comes not in the form of a legally binding document, but some- by the supporting roles of the ILO and oth- A strategic alliance thing with perhaps no less potential for ers in assessing the situation in terms of obtaining results. The memorandum of understand- employment, education and the most vul- ing (MoU) between the ILO and ISO As with other acts of the ILO con- nerable members of society. It was also the has had two notable effects alongside ference (not including formal standard- G-20 Summit which picked up the idea of that of ensuring technical compatibility setting) and the governing body, there is a “ global charter ” or “ legal standard ” for between international labour standards sustainable economic activity (one which and the future ISO 26000 standard on the United Nations now looks towards). social responsibility. About the author First, the MoU has helped ena- Steven Oates, a “ It is no accident that ble a relationship – perhaps a syner- solicitor by pro- the international agenda gy – between the development of ISO fession, has standards in areas such as the environ- long-term expe- fits so well with ment or organizational governance, on rience in super- ISO 26000.” one hand, and social, labour and human vision of the rights on the other. There is fascinating application of evidence of this in the (as yet uncon- standards in the The OECD has published an cluded) discussion taking place among International admittedly unrefined inventory of pos- the various stakeholders on how gen- Labour Organi- sible policy instruments, as tools for fur- der should be mainstreamed into the zation (ILO), ther elaboration of a framework for a future standard. with a special interest in employment policy instruments. He was regional adviser stronger, cleaner and fairer world econ- A second very interesting phe- omy. Relevant instruments include ones on labour standards in Africa. More nomenon is the social dialogue of group recently, his work has been aimed at relating directly to social responsibility, interaction, consultation and collective with others concerning economic policy, obtaining better implementation of stand- negotiation. While in ISO the numbers ards through cooperation in the field, work social justice, enterprise development, the of stakeholder groups and substantive with international financial institutions environment and governance, all making issues are larger than in the ILO, the and corporate social responsibility. Cur- for a very complete outline of the exist- industry (employers) and labour (work- rently, Mr. Oates is a Senior Adviser on ing “ instrumentarium ”. ers) groups are in their respective ways Rights at Work in the office of the ILO The international agenda seems highly coherent and cogent participants Executive Director for Standards and to fit so well with what is appearing in in the discussion and definition of the Rights. He has studied at universities in ISO 26000. guidance standard. Moscow, Tokyo and Boston (Harvard).

32 ISO Focus July-August 2009 © ISO Focus, www.iso.org/isofocus

Renewing confidence a certain congruence with the anticipat- ing recovery, which the Pact express- ed ISO guidance standard in the process es, gives added reason to the breadth of of conceiving, formulating and adopt- coverage in ISO 26000’s approach to ing an international, multi-party agree- social responsibility. Action on the var- ment covering social and labour issues. ious sections of ISO 26000 is likely to Since the Pact precedes finalization of coincide with the sort of action called ISO 26000, it becomes another facet of for in the Pact. the context in which the ISO standard Secondly, the Pact takes the posi- approaches fruition. tion that the provision of quality public As a project of the ILO, the Glo- services, in particular, contributes to fair bal Jobs Pact addresses questions of globalization and should be part of the employment, enterprise development, crisis response. Such services contribute social protection and workplace rights, directly to efficiency in economic recov- while dwelling also on the role of social ery and development, and, at the same dialogue in the design of policies and time, add respect for worker rights and their implementation. Some particular protection of the vulnerable. provisions can be related to the devel- Here again, the broadness of the The on-going dialogue between ISO and opment of an ISO International Stand- approach taken by ISO 26000, this time the UN Global Compact has itself been ard on social responsibility. in the sense of its applicability to all framed in an MoU.

Restoring confidence Perhaps the responsibility of business in time of crisis has been best articulated by the UN special representa- tive, who notes that even downsizing and plant closings must be conducted respon- sibly. Restoring public trust and confidence in business is as much an immediate challenge as is reinventing viable business models. The roles of business and investors and the issue of social responsibility might also, according to the UN Chief Executives Board for Coordination, be elements in a strategy for encouraging and supporting new enterprises in the creation of green jobs, given the emerg- Congruence to kinds of organizations without exclud- ing global jobs pact. ISO 26000 ing those in the public sector, and not With this background, the UN con- limited to organizations directly conference on the world financial and eco- The recognition of the MNE Dec- cerned with employment, would fit well nomic crisis and its impact on develop- laration as an important tool for enter- and add further value. ment in June 2009 highlighted the need prises responding to the crisis in a social- Thirdly, the Pact calls on the ILO for new global consensus to promote sus- ly responsible manner obviously invites to engage with other international agen- tainable economic activity and CSR. further action on the part of ILO. But cies to strengthen policy coherence and And while many international there are additional elements of the cri- crisis response. It is to offer its exper- groups address ways of restoring confi- sis response which find their echo in the tise to other bodies within the multilat- dence amidst the current financial cri- ISO 26000 draft. eral system. The ILO, through its MoU sis, ISO, too, contributes its part as the Firstly, the ILO has increased its with ISO – as well as numerous arrange- ISO 26000 working group prepares a attention to the greener economy and the ments and forms of cooperation with oth- now near-final round of drafting. “ green jobs ” issue. To this end, the Pact er international organizations – already duly identifies investment and develop- undertakes engagement of various sorts, ment as an important focus for job cre- while the particular element added here is ation and crisis responses. The conver- that of crisis response. It remains for the gence of economic, social and environ- manner of this engagement to be elabo- mental interests and actions in promot- rated by the different parties concerned.

Main Focus

ISO highlights standards as generators of confidence during global financial crisis

he ISO Annual Report 2008 highlights the ability of Internation- Tal Standards to provide confidence during the current global financial crisis. “ Refined to its essence, the objective of ISO standards is to provide confidence,” the report states. “ When a product or service meets the specifica- Annual Report 2008 E.indd C1 tions or requirements of an ISO standard, this provides confidence that they 22.06.2009 10:32:44 incorporate essential features. These fea- WSD Poster 2008.indd 1 tures can include quality, ecology, safety, reliability, interoperability efficiency and effectiveness. ISO standards also help to ensure such benefits at an eco- nomical cost.” The report, entitled “ ISO stand-

ards. Integrated confidence ”, says that for 22.06.2009 10:35:39 organizations, implementing ISO standards is a means of integrating confidence Annual Report 2008 E.indd 15 with their offering and adds, “ More and 22.06.2009 10:35:33 more organizations highlight the con- 22.06.2009 10:33:05 Annual Report 2008 E.indd 1 22.06.2009 10:33:03 formity of their products or services with Annual Report 2008 E.indd 14 Annual Report 2008 E.indd C2 ISO standards as an added value. In other words, ISO is well on its way to becoming a powerful, international brand which is a synonym for confidence.”

ISO Secretary-General Rob Steele Annual Report 2008 E.indd 2

22.06.2009 10:33:10 comments: “ This ISO Annual Report Annual Report 2008 E.indd 3

shows how in both times of stability and 22.06.2009 10:33:59 times of risk, ISO and its work provide At the end of the year, the ISO practical tools for providing confidence, system comprised 157 national mem- reducing uncertainty and managing risk bers (which has since increased to 161), • Road-traffic safety management representing 98 % of the world econo- in a globalized world.” • Energy management my and 97 % of its population. In 2008, The report states that during 2008, the organization published 1 230 stand- • Consumer product safety the ability of ISO standards to ensure ards, bringing its portfolio to 17 765 by • Cross-border trade of second-hand and instil confidence became even more the end of the year. goods important as the repercussions of the global financial crisis made themselves ISO experienced a surge in activity, • Anti-counterfeiting tools. launching two new technical committees felt across business sectors and econo- The ISO Annual Report 2008 goes mies worldwide. – to develop standards respectively for solid biofuels and industrial furnaces and on to give examples of ISO standards As the crisis bit in 2008, falling associated thermal processing – as well published during the year which helped consumption and slim order books made as an increasing scope, launching sev- to provide confidence in areas such as reduced activity the norm – except for en project committees (PCs) to develop business continuity, e-business, the envi- ISO, underlining the confidence of pub- standards for the following areas : ronment, governance, health, innovation, lic and private sector stakeholders in the measurement, safety and sustainability. organization and the global relevance of • Network services billing These are completed by a round-up of its standards. • Product recall the results achieved by ISO in 2008

their access to a full range of goods and services, fair prices and information. Does it fit, will International Standards can help by dis- seminating best practice and facilitating it work and can innovation – allowing businesses to bet- standards help ? ter channel research efforts and to market new technologies. Mr. Sharad Gupta, BIS’s Direc- tor-General welcomed the initiative : “ These workshops provide a forum for COPOLCO to develop recommendations for action, policy statements, guides for standards writers and proposals for new areas of standardization. ” Ms. Jai Ok Kim, Chair of COPOL- CO,COPOLCO - program workshopemphasized India 2009.indd 1-2 the timeliness of this event, following a survey of COPOLCO members indicating a high level of concern regarding interoperability.

13.05.2009 12:05:56

One size to fit all? warned about the consequences of fail- Interoperability requires compati- ing to promote interoperability, includ- bility of spare parts, accessories and coming the risk of monopolies and market ponents among different models, product failure. lines and brands of, for example, house- “ Standards, ” he said, “ are an inte- hold appliances or electronic goods. It gral element of consumer protection, and also concerns services such as insurance, are often the basis of national legislation car repair services, banking and health- and certification schemes. ” He added Highlights of the 2009 care, notably regarding transparency of that standards for interoperability con- COPOLCO workshop information and service delivery. In addi- tribute to the United Nations Guidelines tion, it enables effective information and for Consumer Protection which include by Maria Lazarte, communication technologies. the right to safety, to be informed, to Assistant Editor, ISO Focus “ Interoperability also helps in choose, to be heard, to satisfaction of the transfer of technology, manufactur- basic needs, to redress, to education and f you have ever wondered why you ing practices and testing methods from a healthy environment. need so many different remote con- developed countries to developing coun- Dr. Alinda Chandra, BIS’s Addition- Itrols for your television, DVD play- tries, ” emphasized Mr. Gupta. al Director-General, reiterated the impor- er and stereo, why your computer fails Mr. Y.S. Bhave, Secretary of the tance of interoperability standards for pro- to open some files, or why some shops Indian Department of Consumer Affairs, moting the well-being of consumers. cannot accept your credit card, then you are familiar with the widely experienced consumer issue that was at the heart of Speakers at the workshop (from left) : Mr. Steve Mutkoski, Dr. Gabriela Fleischer, Ms. Anne the 31st annual workshop of the ISO Com- Ferguson (panel moderator), Mr. Allan Asher, Dr. T. S. Mohan. (Photo : S S Studio). mittee on consumer policy (COPOLCO) – interoperability. About 100 participants from consumer associations, public authorities, businesses and from the national standards bodies of some 30 countries attended the event, held in May 2009, in New Del- hi, India, and organized with the support of the ISO member for the country, the Bureau of Indian Standards (BIS). The workshop looked at areas where lack of interoperability poses safety risks to consumers and restricts

computers. In 2006, COPOLCO issued a recommendation proposing to standardize batteries and battery chargers, which was taken into consideration by the International Electrotechnical Com- mission. In addition, a voluntary agreement for interoperable connectors for mobile phones known as the “ Open mobile terminal platform ” has received industry support. Furthermore, major manufacturers have recently struck a deal with the European Union to standardize mobile phone battery chargers to the micro-USB plug.

40 000 tonnes of e-waste Apart from convenience and comfort, interoperability is important for reducing waste. “ In the European Union alone, about 40 000 tonnes of e-waste are produced every 20 months and in China, 36 000 tonnes ! ” said At the opening ceremony of the COPOLCO workshop in New Delhi (from left) : Dr. Fleischer. Mr. Y.S. Bhave, Secretary, Department of Consumer Affairs, Government of India; Participants agreed, piles and Mrs. Madhulika Prakash, Deputy-Director General (technical) BIS; piles of electronic equipment lie unused Mr. Sharad Gupta, Director-General, BIS; Ms. Jai Ok Kim, Chair of COPOLCO; because every time there is need for a Dr. Alinda Chandra, Additional Director-General, BIS. (Photo : S S Studio). new appliance, consumers are forced to buy all components (memory cards, bat- Focusing on some of the conse- partnerships to wake up the “ sleeping teries, spares, etc.). With standardized quences of incompatible products and giant ” and get key stakeholders – par- products, it would not be necessary to services, participants at the workshop ticularly consumers – to stand up for throw everything away. discussed how International Standards their needs. can help achieve consumer expectations in terms of cost savings, longer Play that music, baby ! product life, greater convenience and One kilo worth of reduced waste. Businesses too can suffer from chargers neglected interoperability. The need for interoperability is Mr. Allan Asher, Chair of the Not a matter of “ karma ” most notable in widely used products. An Consumer and Public Interest Network example of how its absence can affect at the British Standards Institution (BSI) Local concerns were raised by consumers was given by Dr. Gabriela explained : “ Lack of interoperability hinders Dr. T.S. Mohan, Principal Researcher Fleischer, a Project Manager with the competition, which in itself is a healthy way at Infosys Private Ltd. He explained that German national standards body, DIN. of improving quality and reducing prices.” with over one billion people, India is a Putting herself in the shoes of an If threatened, this will have consequences “ sleeping giant ” with a growing mar- average business traveller, she counted for both consumers and vendors. ket potential. But Dr. Mohan regretted and weighed the multiple battery chargers “ Goods and services common- the Indian consumer’s passivity. Faced and adaptors needed to plug in her lap- ly require other goods and services for on a daily basis with a lack of interop- top, mobile phones, camera, MP3 play- them to be useful, ” said Mr. Asher. He erability, Indian consumers, like many er, and so on. The result? One kilo worth then recounted how the iPod’s original others around the world, respond fatal- of equipment. “ In terms of airline over- chargers used a firewire device found istically : “ Thoda adjust karo ! (adjust weight charges ”, she added, “ this can cost mainly in Apple computers. The com- and make do) It’s karma ”. The result is as much as 40 Euros per flight ! ” pany soon realized that this was hinder- money spent less wisely, lost productiv- However, there is good news. Dr. ing uptake of the product, and switched ity and lost goodwill. Fleischer mentioned that the Republic their chargers to the ubiquitous USB Dr. Mohan called for education, of Korea is working on a standard for connections. iPod’s subsequent success certification and public and private power supplies of portable personal speaks for itself.

President of India opens ISO/COPOLCO plenary

“ Awake, consumers ! Awake ! ”, exclaimed the President of India, Shrimati Pratibha Devisingh Patil, in her opening message to the 31st plenary meeting of the ISO Committee on consumer policy (COPOLCO) in May 2009, in New Delhi, India. The President was referring to a media campaign organized in India to raise awareness about consumer matters. Speaking to an audience of over 100 participants from consumer associations, public authorities, businesses and the national standards bodies of some 30 : S Studio) countries, she emphasized : “ Consumer protection is of special significance to (Photo each of us, as we are all consumers. ” The President of India, Shrimati Pratibha Devisingh Patil (left) and the Indian Minister of Agriculture and Consumer Affairs, Shri Sharad Pawar (right) at the inauguration ceremony The Indian President highlighted the of the 31st ISO/COPOLCO plenary. vulnerability of consumers who, living in a world of rapidly developing tech- “ This requires products that meet of Indian Standards (BIS), host of the nology, often do not have access to standards quality and services that meeting and ISO member for India. full or correct information on new and have an assurance of safety… Hence She emphasized the relevance of hold- increasingly complex products. for us, consumer protection is of great ing the event in the country, one of “ Standards play a key role in consumer significance, both as part of a sound the fastest-growing economies in the protection,” she said. “ For building confi- business approach, as well as for world with a consumer pool of over dence, more meaningful participation by achieving the broader goal of national one billion people. “ India, our host, is consumer organizations is required for economic growth. ” typical of the trends and the progress developing standards both at the nation- Referring to the global cross-boundary possible in our interconnected world, ” al and international levels. Moreover, manufacturing of products, she said : she said. there is also a need to encourage the “ Countries should look at a coordinat- “ Today, services are a major source of implementation of standards concerning ed approach to meet the needs of the economic growth, accounting for more consumer safety both at the national consumer satisfactorily by developing than half of India’s output. It is vital, and international levels. ” standards that take into account their therefore, that India gets increasingly Drawing attention to the standards concerns. involved in international standardiza- and guides inspired or developed “ In an interlinked world, it is equally tion because of the added value this by COPOLCO, the President recom- important to expeditiously conclude can bring. ” mended that national governments use mutual recognition agreements of Ms. Kissinger-Matray concluded : them to disseminate information and standards between countries to pro- “ International Standards help ensure to empower consumers. mote international trade and to enable technical compatibility across countries faster movement of goods. A common and industries and convey information The President also emphasized the set of accepted standards will avoid to consumers about products that have importance of standards in India’s unnecessary trade disputes and will been produced abroad, or processes approach to addressing the current be a guide to exporters for supplying that have taken place in another global economic crisis. She declared : standard goods overseas. ” country. International Standards thus “ Stimulating consumer demand and reduce transaction costs and facilitate creating confidence in institutions and Dana Kissinger-Matray, Secretary of international trade. ” markets is one of the focal areas for COPOLCO, spoke on behalf of the tackling the situation. ISO President, thanking the Bureau

Gateways of information Standards in information and A forum for action communication technology (ICT) tend Break-out sessions confirmed inter- Ms. Indrani Thuraisingham, Head to be driven by the need for industry operability as a key consumer issue. The of Consumers International, Office consensus and not regulation. They most common priority areas identified con- for Asia Pacific and the Middle East, are often highly complex, and must cerned software and plugs and batteries of emphasized that consumers should have keep pace with continuous techno- electronic appliances. Overall, participants access to knowledge, which is the fruit logical developments. Mr. Mutkoski agreed that International Standards are use- of their society’s culture and science. argued that the most successful stand- ful tools for promoting compatibility, but Market barriers resulting in a lack of ards are often the ones that have previ- that consumer involvement is key. interoperability can seriously hinder ously proved themselves, like the PDF, this access. and that market support is crucial for The workshop preceded the Ms. Thuraisingham underlined their uptake. COPOLCO plenary, which reviewed current consumer priorities in standard- the importance of involving consumer Mr. Mutkoski concluded that ization and agreed on the roadmap for representatives in standardization as standards can support interoperability, future progress. The delegates resolved part of the solution, but that in addi- but in the rapidly changing world of ICT, to investigate the feasibility of stand- tion to standards, more action may be more may also be needed. necessary. ards for consumer purchase guarantees and call centres. The counterfeiting There was considerable focus on The voice of industry challenge the environment with requests for ISO to consider a COPOLCO proposal, Guide- Another challenge identified by For Mr. R. A. Venkitachalam, Vice- lines for the assessment and improvement participants was that interoperability is President and General Manager (India) of of energy services to users, as well as the often understood differently by consum- the Underwriters Laboratory (UL), coun- feasibility of standards for smart meters, ers, business and other stakeholders. terfeiting also poses challenges to inter- devices producing domestic renewable An industry view was provided by operability, as well as to product safety energy and global sustainability of bio- Steve Mutkoski, Senior Standards Strate- and intellectual property rights. fuels. ISO has already taken steps to gist in the corporate interoperability and Certification can help. Mr. Ven integrate the consumer view on energy standards group of Microsoft. kitachalam spoke on the voluntary mark priorities, by inviting a consumer repre- For Mr. Mutkoski, companies developed by UL to ascertain the authen- sentative to join the ISO Strategic Advi- often perceive interoperability as just ticity of a product (with a holographic sory Group on Energy.1) another feature that consumers may version for high risk products). UL has Support was reiterated for the want. He said that, in the last five also responded to counterfeiting with a current terms of reference and consum- years, there have been some dramatic combination of enforcement (working COPOLCO - program workshop India 2009.indd 3-4 er focus of COPOLCO. 13.05.2009 12:06:31 changes in this perception, but empha- with government agencies and police), sized that consumers need to be more education (of customs and border proactive in letting organizations know tection personnel, and other key agencies 1) Currently, Mr. Allan Asher, Chair, which attributes and services they and international authorities) and part- Consumer and Public Interest Network, would like to see. nerships with global agencies. British Standards Institution.

Extensive debate improves consensus on future ISO 26000 standard on social responsibility by Sandrine Tranchard, WG is still increasing – it now includes such as barriers to trade, human rights Communication Officer, 221 experts from 63 developing coun- and user friendliness. tries and 136 experts from developed ISO Central Secretariat Jorge E.R. Cajazeira, Chair of the countries. Working Group Social Responsibility, onsensus was achieved among the The Quebec meeting stakeholder commented : “ This was an outstanding multi-stakeholder participants in dialogue resulted in moving ISO 26000 meeting which included some ‘passion- Cthe ISO Working Group on Social closer to completion on complex issues ate’ debates. Nevertheless, the sense of Responsibility (ISO/WG SR) at its lat- est meeting on the way forward for the future ISO 26000 standard. Members of the ISO WG SR leadership team pictured at the Quebec plenary meeting (from left) : Jorge E.R. Cajazeira, Chair ; Kristina Sandberg, Secretary ; Eduardo Campos de São Thiago, The group’s 7th plenary meeting, Co-Secretary ; Staffan Söderberg, Vice-Chair, with Sophie Clivio, Technical Programme Manager, held in Quebec City, Quebec, Canada, on ISO Central Secretariat. (Photo : Jorge E.R. Cajazeira). 18-22 May 2009, addressed issues stemming from the more than 3 000 comments submitted in a successful vote on the Committee Draft of the standard taken before the meeting. ISO 26000 is now moving to the status of a Draft Interna- tional Standard by October 2009. Progress on how to deal with key issues stemming from the ballot comments was the main outcome of the Quebec City meeting which brought together more than 300 experts from 60 countries and around 20 liaison organizations. ISO 26000 will provide organizations with guidance on incorporating social responsibility into their operations. It is being developed by multi-stakeholder representatives, including a strong participation by developing countries. The number of developing countries in the

Zero waste, zero carbon

The 7th ISO Social Responsibility Plenary Meeting aspired to be a responsible event and was managed to be “ zero waste ” – “ zero carbon ”, the first of its kind for this Working Group. justice and the fairness has never been Several aspects of the programme put forth by the Centre des congrès closer and has allowed us to move the de Québec allowed to reduce the environmental footprint of the event draft ISO 26000 to another crucial step through concrete actions and offsetting measures. in its path to publication.” Zero waste : Activities are planned and conducted with particular Staffan Söderberg, WG SR Vice attention to source reduction and low consumption of materials, as well Chair, added : “ All in all, we worked as waste recovery and upgrade. approximately 7 000 man-hours during the week and it is small miracle to see Zero carbon : Activities are conducted in such as way as to limit GHG 305 committed SR experts reach consen- emissions and offset unavoidable CO2 emissions. sus on complex issues. We have really been able to enhance agreement on this Examples of actions taken or to be implemented draft guidance standard on social responsibility and we can see the light at the During planning: end of the tunnel.” • Most meetings are conducted through teleconferencing or The meeting was attended by videoconferencing Kevin McKinley, ISO Deputy Secre- • All suppliers are selected based on sustainable development criteria tary-General, who commented : “ It was a week-long effort when every- • No printed material at meetings thing was done beforehand to prepare • Information is disseminated using electronic means the stage for fulsome and transparent • CO2 emissions are measured and offset debate. The Working Group was able to focus intensively on resolving com- • Local caterers are hired when meals have to be planned. ments and further enhancing consensus During the event : on the document.” The 7th plenary meeting was host- • Source reduction of material production and distribution ed by the Bureau de normalisation du – No delegate kits Québec (BNQ – the Quebec Standardiza- – Minimum amount of printed information tion Bureau) in collaboration with Stand- ards Council of Canada and the Min- Reduction of disposable (one-use) materials • istère des Relations internationales du • Optimal use of permanent infrastructures Québec (the Quebec Ministry of Interna- • Data gathering on means of transportation and distances travelled by tional Relations). Quebec Premier, Jean participants and users. Charest, and the Minister of International Relations, Pierre Arcand, made welcome Upon wrap-up : speeches to the participants. • Dissemination of the event’s waste management report In the spirit of social responsibility, the meeting was organized to be • GHG emission offset. a “ zero waste–zero carbon ” event – the first of its kind for this WG. The next meeting of the ISO/ WG SR will be held in Copenhagen, Denmark, in the first half of 2010. The publication of ISO 26000 is targeted for September 2010. Further information on the ISO/ WG SR and ISO 26000 is available on its public Web site : www.iso.org/sr. Its working documents are publicly accessible at : www.iso.org/wgsr.

ISO President highlights role of standards for economic recovery

he economic crisis, and the contribution of standards to recovery Tand to restoring confidence, were at the heart of a series of visits and inter- ventions made by ISO President Dr. Alan Morrison, in June 2009. Participants at the BSN seminar “Impact of standardization on the economy.”

as responding to the need for better risk Dr. Morrison also focused on management and ensuring business con- the benefits that participating in stand- tinuity. “ Good International Standards ”, ardization can have for developing he said, “ promote business and help to countries, including the possibility restore the confidence essential to eco- to acquire state-of-the-art knowledge nomic development. ” He mentioned directly, influence the technical content that ISO is doing well in these troubled of standards important to their econ- times, with four more members joining omy, and gain hands-on experience in at the beginning of 2009. standardization work that can be put to Dr. Morrison highlighted the recent- use in building up their own national ly published ISO brochure, entitled ISO infrastructures. He referred to the ISO International Standards – Today’s state- efforts aimed at facilitating participa- of-the-art global solutions for CEOs, as a tion of developing countries, such as From left: KATS Administrator Mr. Insuk Nam key document providing examples of how the ISO Action Plan for Developing with ISO President Dr. Alan Morrison. ISO’s activities can provide confidence. Countries 2005-2010. Targeted to top executives, it explains why Dr. Morrison also drew atten- In his visits to the ISO members International Standards have to be on the tion to the current consultation for the for the Republic of Korea (KATS) and leadership agenda. He called on members 2011-2015 ISO strategic plan, and the Viet Nam (STAMEQ), Dr. Morrison had to do the utmost to get it on the desks of importance of getting involved in shap- the opportunity to meet with board mem- the CEOs in their country. ing ISO’s future roadmap. bers and senior management of the two organizations, as well as with key public authorities in the countries. He congratu- lated the members on their participation in international standardization, and called for them to continue to get increasingly involved in ISO work. While in the Repub- lic of Korea, he also attended the “ World Economic Forum on East Asia. ” In that same month, the ISO Pres- ident participated in a seminar organized by BSN (ISO member for Indone- sia) on the impact of standardization on ISO President the economy. Dr. Alan Morrison During his visits and interven- (left) with Viet tions, the ISO President emphasized the Nam’s Vice importance of rebuilding confidence lost Prime Minister by the crisis, and promoting good busi- Dr. Nguyen ness and governance practice, as well Thien Nhan.

ISO begins work on standard for more customer- friendly utility bills

by Maria Lazarte, Assistant Editor, ISO Focus

SO has begun work on a standard that will establish a harmonized and Itransparent framework for billing information of network services, such as electricity, water and gas. The project committee developing the standard, ISO/PC 239, Network services billing, met for the first time in June 2009, in London, United King- dom (UK). Participants from around the world actively discussed the scope of the future standard (ISO 14452), which will promote more customer-oriented billing practices and service provision. Although billing systems vary are observers. Among its members, Israel timely delivery of bills and help over- from country to country, and from indus- (who holds the Secretariat), the Repub- come language and cultural barriers. try to industry, participants agreed to tar- lic of Korea (who holds the Chair), the It may contribute to reducing consum- get utilities such as electricity, water, gas Netherlands and the UK were present at er debt arising from poorly understood and communications, with the support of the first meeting, together with an Asian or late bills. the International Electrotechnical Com- consumers group. ISO 14452 will also benefit sup- mission and the International Telecom- ISO/PC 239, Network services pliers by increasing customer satisfac- munication Union, as well as other key billing, was established following a pro- tion, promoting confidence in service organizations in the field. posal from the ISO Committee on con- providers and lowering costs brought The committee also issued an sumer policy (ISO/COPOLCO), which by customer complaints. open call for interested parties wishing noted that billing makes-up a substan- “ This effort is particularly time- to get involved (through the ISO mem- tial part of overall consumer complaints ly ” said Dr. Vokyung Song, Chair of ISO/ ber of their respective country). Already, against utilities. A study carried-out PC 239 “ given the continuous growth of seven countries have participant status in 2004 by Energywatch, the gas and cross-border trade which calls for harmo- in ISO/PC 239, while an additional five electricity consumer council in the UK, nized approaches to billing. ISO 14452 suggested that up to a third of custom- will help businesses to become more ers regularly contact their energy sup- competitive in the global marketplace. pliers to query or complain about their It will also make it easier for customers bills. According to the study, this could to compare providers and make informed amount to as many as 60 million unnec- choices,” concluded Dr. Song. essary contacts per year. The event was hosted by the ISO The future International Standard member for the UK, the British Stand- will provide a market-based and market- ards Institution (BSI). sensitive approach for dealing with consumer concerns. It will make it easier for customers to read and understand their bills and verify the accuracy of charges. The standard will also encourage a

New edition of ISO/TS 16949 quality specification for automotive industry supply chain by Elizabeth Gasiorowski-Denis, Editor, ISO Focus

SO has just published a new edition of ISO/TS 16949:2009, which spec- Iifies quality system requirements for suppliers in the automotive sector. ISO/TS 16949:2009, Quality management systems – Particular requirements for the application of ISO 9001:2008 for automotive production and relevant service part organizations, replaces the ation and waste in the supply chain. Up to the end of December 2008, 2002 edition which has been used by Incorporating the requirements of ISO at least 39 300 ISO/TS 16949:2002 cer- the major automotive manufacturers to 9001:2008, ISO/TS 16949:2009 also tificates had been issued in 81 countries approve more than 35 000 organizations includes detailed, sector-specific require- and economies. This represents a 12 % worldwide that produce and supply parts ments for employee competence, aware- increase over 2007. for the sector. ness and training, design and develop- The IATF has set a transition The review of ISO/TS 16949:2002 ment, production and service provision, period of 120 days from date of pub- resulting in the 2009 edition was carried control of monitoring and measuring lication of the new edition – 15 June out by the International Automotive Task devices, as well as measurement, anal- – for organizations to comply with the Force (IATF) and ISO technical commit- ysis and improvement. standard's requirements. The details of tee ISO/TC 176, Quality management Joe Bransky, a member of the the plan are given in a communiqué by and quality assurance. The generalized IATF comments : “ In today's lean man- the IATF Oversight Certification Body implementation of ISO/TS 16949 qual- ufacturing environment, huge contin- (www.iatfglobaloversight.org). ity management systems by automotive gency stocks of inventory have given ISO/TS 16949:2009 was prepared suppliers is seen as an opportunity to way to just-in-time logistics and deliv- by the IATF, with the support of ISO tech- improve quality while reducing costs. ery. The foundation of certainty that nical committee ISO/TC 176, which is ISO Secretary-General Rob Steele ISO/TS 16949:2009 provides in terms responsible for the ISO 9000 family of commented : “ With the global nature of the of improved productivity, quality, and quality management standards. automotive industry, quality management delivery in the supply-chain, is proba- ISO/TS 16949:2009, Quality man- systems based on ISO/TS 16949:2009 bly more essential than ever.” agement systems – Particular requirements throughout the supply chain will serve The 2009 edition results from the for the application of ISO 9001:2008 to streamline operations, and thus help amendment of ISO/TS 16949:2002 to for automotive production and relevant organizations cut costs while improv- ensure its compatibility with the require- service part organizations, is available ing efficiency. The publication of ISO/ ments of ISO 9001:2008, Quality man- from ISO national member institutes. It TS 16949 will assist the sector, reassure agement systems – Requirements. There may also be obtained directly from the consumers, and ensure significant ben- are no essential changes to the technical ISO Central Secretariat through the ISO efits for automotive suppliers amid the requirements. The modifications relate Store (www.iso.org/isostore) or by con- challenges facing the industry.” mainly to the management requirements tacting the Marketing & Communication The new document aims at the in the document to reflect the content department ([email protected]). development of a quality manage- of ISO 9001:2008, and those that are ment system that provides for contin- intended to improve consistency with ual improvement, emphasizing defect the environmental management system prevention and the reduction of vari- standard, ISO 14001:2004.

selves at any time, or they risk becom- harnesses and pooled all the informa- ISO standard ing trapped underwater or in dangerous tion together.” to save sailing conditions. “ This standard is great news for The new standard, ISO 10862:2009, manufacturers of sailing trapezes who enthusiasts Small craft – Quick release system for will now have one global source for trapeze harness, provides requirements safety requirements. In Europe, har- from danger and test methods to ensure the correct nesses complying with the standard will operation of safety release devices, ena- bear the CE mark, which is compulso- and drowning bling the wearer to unhook rapidly in the ry for safety equipment of this type ” he event of an emergency. concluded. Such a device should be easily ISO 10862 is the result of a multi- accessible and able to be operated in stakeholder process which included the by Maria Lazarte, Assistant all conditions, even when a craft is cap- participation of recreational craft user Editor, ISO Focus sized or inverted. groups as well as industry. Sailors were also invited to discuss the concerns they experienced when using trapezes. The standard will be of interest to sailing associations, retailer organizers and manufacturers of sailing equipment. ISO 10862:2009, Small craft – Quick release system for trapeze harness, was prepared by ISO technical committee ISO/TC 188, Small craft, in collaboration with the European Committee for Standardization (CEN)'s CEN/TC 162, Protective clothing including hand and arm protection and lifejackets. It is available from ISO national member institutes. It may also be obtained directly from the ISO Central Secretari- at through the ISO Store (www.iso.org/ isostore) or by contacting the Marketing & Communication department (sales@ iso.org).

new ISO standard will help pre- “ ISO 10862 includes a number vent death and injury to sailors of important features which could save a A attached to sailing trapezes on sailor's life ” said Ken Kershaw, a recrea- small craft, by ensuring they can release tional craft safety expert, actively involved themselves from the wire hooking them in the development of ISO 10862 and to the boat in emergencies. other small craft ISO standards. Although statistically sailing Among the safety requirements the is one of the safer leisure activities, a standard prescribes is a release time short- number of incidents, sometimes fatal, er than five seconds. Taking into account have been reported involving trapeze real life conditions, it also requires that wires. the device be operable with only one hand A trapeze consists of a harness and with the full finger neoprene gloves worn around the waist and attached to used in cold environments. At the same the upper mast by a wire, which allows time, the safety mechanism should not sailors to hang outside the boat. Many to be released inadvertently. models of sailing dinghy and catamarans “ When preparing ISO 10862,” include trapezes, as they are widely used Mr. Kershaw explained, “ we looked at to increase control and speed of a craft. other release systems used in kite surf- But sailors must be able to detach them- ing, mountaineering and deck safety

Developments and Initiatives

Trade benefits of SDoC Written by experts from the Organ- isation for Economic Co-operation and Development (OECD), the article exam- ines research undertaken by the organization which demonstrates that suppli- er’s declaration of conformity (SDoc) can bring calculable benefits. The research was prompted by the desire of governments in the world’s major economies to evaluate the practical impact of a clause in the Technical Bar- riers to Trade (TBT) Agreement of the World Trade Organization, which aims to minimize the burden that conformity assessment requirements may impose on exporters. Governments wanted to know Main Focus whether SDoC – the simplest regulatory approach to conformity assessment Clean energy and climate change The September 2009 ISO Focus – really works. issue will look at the combined themes of 2009 is a crucial year in the inter- energy and climate change. This month‘s national effort to address climate change, dossier hones in on what ISO is doing to culminating in the United Nations Cli- preserve the environment, and why stand- mate Change Conference in Copenha- ards are first-rate tools to help meet the gen at the end of the year. international clean energy and climate According to the International Ener- change challenges. gy Agency, the energy sector will have to The issue brings together a port- play the central role in curbing emissions folio of articles from a diverse range of – through major improvements in effi- subjects, from electric cars, energy efficiency and increased use of renewables ciency of buildings, energy management and other low-carbon technologies. As in systems (the future ISO 50001), general many other fields, International Standards energy terminology and the carbon foot- have made, and will increasingly make, print standard (the future ISO 14067). The an important contribution. range of renewables from ISO and Inter- Energy efficiency is ISO’s pri- national Electrotechnical Commission mary focus in the energy field today, (IEC) help to contribute to a healthier, because it represents by far the most more sustainable planet are also includ- relevant, shorter time frame and lower ed. Last, but not least, concrete examples investment line of action able to curb of how International Standards are used global energy demand and reduce car- in greenhouse gas schemes around the bon emissions. ISO is also increasing- world will also be highlighted. Harmonizing tsunami signage ly working on standards for renewable In an exclusive interview in the Sep- energy sources, with a view to respond tember 2009 issue of ISO Focus, UNFCCC Countries in the Caribbean have and possibly to anticipate market and Executive Secretary Yvo de Boer, explains agreed to consider adopting the graphical society needs in this field. his expectations for the Climate Change symbols included in the ISO 20712 series As concerns climate change, Inter- Conference in Copenhagen. For Yvo de on water safety and beach flag signs to national Standards have an important role Boer, ISO is making an important contri- harmonize tsunami signage. to play in contributing to global efforts bution to climate protection. He says that The article looks at the need for toward formulation of mitigation policies. “ The ISO 14064 standards for greenhouse early warning systems and how harmo- Their contribution to climate change is gas accounting and verification provide nized tsunami signage, International highlighted in this year’s World Standards a set of tools for programmes aimed at Standard ISO 20712, can be an integral Day, the theme of which is “ Tackling cli- reducing greenhouse gas emissions, as part of a community’s effort to build and mate change through standards ”. well as for emissions trading.” sustain preparedness against tsunamis.

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