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Testing & Certification Poised for Growth

When deciding what to buy for dinner, consumers have more to worry about than just the price of food and inflation. Fake processed foods from China, vegetables contaminated with radiation from Japan, plastic additive DEHP found in Taiwan-made food, drinks & drugs, and e-coli in vegetables from Germany were just some of the problems that surfaced last year.

But why does there seem to be so many problems lately? Why are products not put through stringent tests before they are sold to consumers? Where are the regulators?

Electrical appliances and toys are among the few categories of goods which need to meet certain standards before they can be sold. Food tests are on a voluntary basis, said Dr Richard Fung, Chief Executive of Hong Kong Standards and Testing Centre (HKSTC).

“For instance, say a product is in strong demand in the market. The manufacturer wouldn’t want to take the risk of having it tested in case it fails. So rather than having the product pulled from the shelves, he just continues business as usual,” he explained.

While we would all ideally like to eat healthy food free of any additives, in reality, we wouldn’t want to buy or even try processed food without colouring or thickening agents, or flavour enhancers.

To prove this, Cornell University conducted a study on the artificial colouring FD&C Yellow No. 6, which is used in Cheetos Crunchy Cheese Flavoured Snacks. Without the colouring, the snacks looked just like the shrivelled larvae of a large insect, so unsurprisingly, people got little pleasure from eating them. Interestingly, their brains did not register much cheese flavour, even though the Cheetos tasted just as they did with food colouring.

 

Solid foundations

The recent food scares raised public awareness of the importance that the testing and certification sector plays in Hong Kong. However, the industry dates back to the boom manufacturing and trading 1960s, when it was a crucial part of the textile industry. As the manufacturing of toys and electronics began to expand in Hong Kong, more labs were set up to certify that products met importing countries’ standards. But it wasn’t until 1985 that the sector really took off with the establishment of the Hong Kong Accreditation Service (HKAS, formally known as Hong Kong Laboratory Accreditation Scheme, HOKLAS).

Today, there are around 700 establishments, most of which are private laboratories, providing testing and inspection services for consumer products manufactured in the Pearl River Delta for overseas buyers, and certification services for such products as well as for the relevant quality management systems. There is also an increasing demand for food testing conducted by private laboratories.

The industry, which directly contributes around HK$5 billion annually to Hong Kong’s GDP, has been identified as one of the six new economic pillars for development. The Hong Kong Council for Testing and Certification was established in 2009 to enhance the professional standards and recognition of Hong Kong’s testing and certification services in the international arena.

Given a robust accreditation system and its international standing, Hong Kong is well positioned to act as an independent third party to provide quality certification and product testing services for Mainland enterprises to boost the confidence of overseas and local buyers.

“The ‘Made in Hong Kong’ label is recognized globally for quality products and services. All in all, Hong Kong's testing industry is very strong and we are in fact playing an important role in global trade,” said Dr Fung.

Driven by market demand, the testing industry evolved into four main areas: chemical, food and pharmaceutical products; electrical products; toys and children's products; and textile, furniture and footwear products. Following the establishment of the Hong Kong Council for Testing and Certification, four new areas were identified as key areas for the industry's future development: construction materials; food; Chinese medicines; and jewellery.

The sector also got a boost under Supplement VII of the Closer Economic Partnership Arrangement (CEPA), which gave the green light for testing laboratories in Hong Kong to participate in product testing under the China Compulsory Certification (CCC).  However, some challenges still need to be fine tuned.

“At the moment, CEPA allows only products which are processed in Hong Kong to be tested for the CCC. If this constraint could be eliminated, then I am quite sure that our industry would benefit more from the new policy,” he said.

Another challenge is encouraging more people to pursue a career in the sector.

“We do have a long history but unfortunately, there has not been much formal education or training to support for the industry until very recently,” said Fung. “Currently there are about 12,500 people engaged in the industry, and we will require about 5,000 more personnel to join our industry in the near future.”

The lack of formal college education to prepare students to enter the testing and certification industry means most of Fung’s employees are mainly science degree holders. The company then has to rely on its in-house programme to train up new employees, which takes between six to nine months.

 

Leverage the Hong Kong brand

Hong Kong has been the gateway for businesses with China for many years. Our well developed financial and legal systems, and most importantly, test reports, are highly trusted. China's testing industry is a relatively closed market and not yet fully opened to foreign operators as most testing activities can only be carried out by Chinese Government Laboratories. This is starting to change, as Hong Kong testing organizations have been given the green light to set up in mainland China. This will give Hong Kong's testing industry enjoys the advantage of being near manufacturers.

Unlike China and other developed countries, Hong Kong does not have a compulsory product certification system. It also, as of yet, does not have a standards writing committee, or even a responsible official to steer the industry. Instead, it has been borrowing people’s standards. For example, under the product safety legislation, all toys sold in Hong Kong must comply with safety requirements. Manufacturers can choose to have their product certified using either the EU, Japanese, or Australian standards.

Fung said it is a lot simpler just to use existing standards instead of trying to rewrite everything. But would it make sense for Hong Kong to develop its own standard -- especially when the government is talking about making the SAR a hub for testing and certification?

“I personally think it lacks commercial sense to develop a Hong Kong standard. Unless the government is really committed to this and funds such a project it will never happen,” he said. “Testing had never been on the government’s mind until someone woke up two years ago because of the problems with food and Chinese medicine. Someone said we can make good money in Hong Kong by promoting the testing industry.”

 

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