Given the intense interest of regulators and the public in recent food and medicine scares - from melamine in milk and malachite green in fish to fungus in gout pills - moves by the government to make product testing a new "pillar" of the economy have come at an opportune time.
The pillar in question - one of six listed by Chief Executive Donald Tsang Yam-kuen late last year in response to the declining economy - refers to product testing and certification in general.



But the initial focus will be on development of quality testing and certification services for food and pharmaceutical products, and in the circumstances, that could make for plenty of work.

Long-term, the scope will be extended to other consumer products such as household electrical appliances, toys and textiles. But industrialists see benefits beyond the development of a certification industry, saying the moves will also bring economic benefits by helping build an image for Hong Kong products abroad.

At present, there are 163 accredited laboratories and 14 certification bodies under the Hong Kong Accreditation Service, which is administered by the Innovative and Technology Commission.

In the area of food products in particular, the Food and Health Bureau says new legislation is being introduced to step up quality control.

One million food tests were conducted each year, and this was expected to surge to 2 million after July next year when the new regulations impose more rigorous legal standards on such additives as preservatives, artificial colouring, pesticide and veterinary drug residues, and other substances, a bureau spokeswoman said.

Nutrition labelling will also be implemented, while health authorities will be empowered to prohibit the import and supply of foods, and to order food recalls. The bureau says this will create immediate tangible opportunities for business growth.

The spokeswoman said that from this year, the government would help promote the sector by outsourcing HK$9 million worth of regular food-surveillance tests to private laboratories.

"Around 125 professional and 200 supporting-personnel jobs will be created. These would [provide a career for] 500 chemistry graduates from local universities," she said.

The head of the government's Central Policy Unit, Lau Siu-kai, admitted that the present scale of testing and certification activities in Hong Kong was not great. But he was positive about growth prospects in the medium to long term as consumers' expectations of quality of life, and the quality of food and pharmaceutical products, increased.

Roy Chung Chi-ping, deputy chairman of the Federation of Hong Kong Industry, said the benefits of developing testing and certification activities would go far beyond increasing business opportunities for that sector alone.

He said a credible testing and accreditation regime would help build up an image for Hong Kong products, stimulating demand for them overseas.

Citing the federation's Q-Mark scheme for products that meet certain standards, he said products bearing the mark, such as Maxim mooncakes, were better recognised in the market.

"If we can develop an internationally recognised certification system, buyers will have higher confidence in Hong Kong products accredited through our certified laboratories. This will stimulate exports as a result," Mr Chung said.

Professor Lau sees the development of the sector as more than just a local economic opportunity.

"The greatest opportunities would come from economic co-operation with the mainland. Overseas buyers have stricter requirements on mainland products, and they require documentary proof of quality."

He explained that the government would seek an agreement with mainland authorities for mutual recognition of test results and accreditation. This would enable Hong Kong companies to export testing and certification services to the mainland.

"If we were able to tap into the mainland market, we could see double-digit growth," Professor Lau said. "Hong Kong has the technological edge and the reputation of product testing and certification. By providing quality assurance services for mainland-manufactured products, not only could we gain more business opportunities, we could contribute to mainland exports."

Fredric Leung Hang-fai, managing director of Accredited Certification International Ltd, which specialises in system certification, was sceptical, however, saying there was a risk that Hong Kong's manufacturers or importers might buy cheaper services from mainland testing and certification companies.

But Kim Chan Kin-chung, managing director of British Standard Institution, Hong Kong, said he was not worried that Hong Kong companies' business would suffer if they focused on the high-end market, where local companies still had an edge in terms of technology and professionalism.

Some practitioners see quality of service and professional integrity as crucial to maintaining the sector's competitiveness.

The operations director of the Hong Kong Quality Assurance Agency, Chan Pui-cheong, said the mainland's system of accreditation was already on a par with international standards.

The central government had set up the China National Accreditation Service for Conformity Assessment (CNAS), he said. It was a member of the International Accreditation Forum (IAF), which was formed in the mid-1990s through international efforts to promote conformity assessment in fields such as management systems, products and services

"In fact, there is already a mutual recognition mechanism between the CNAS and IAF." Mr Chan explained that in normal business operations, people must exercise due diligence to ensure the accuracy of information presented to them. The role of testing and certification companies was to provide a third-party verification of the information.

"That is why integrity is very important. Last year, there were problems with melamine in food products. It was not just a technical problem, but also an integrity issue in the testing and certification process."

Mr Chan said overseas companies considered professional integrity to be a core factor when selecting testing and certification partners, and that Hong Kong companies had a good reputation in that respect.

But to develop the sector, Mr Chan suggested that a lesson should be learned from the mainland.

"The [mainland's] Certification and Accreditation Administration, which was set up in 2003-04, introduced regulations to govern testing and certification operations. The regulations cover the amount of capital required, the requisite number of professionals and their qualifications.

"The government could provide loans to enable laboratories to acquire or replace testing equipment. Affordable land such as suitable sites in the Science Park or the Industrial Estate could be offered to encourage development of this sector," Mr Chan said.

Kim Chan said that in addition to product testing and accreditation services, environmental standards assurance and management system certification - which are also parts of the testing and certification industry - also offered significant potential for business development and economic value for Hong Kong.

Quality assurance in controlling greenhouse gas emissions and energy consumption was also essential to support the environmental industry, helping to reduce the risk of bad processes that resulted in bad products.

"At the end of the day, we expect the industry [will] be able to [improve] our quality of life, contribute to productivity and employment and enhance the brand of Hong Kong," Kim Chan said.

SCMP
ECONOMIC PILLARS
Daniel Sin