Société Générale de Surveillance
Encyclopedia
SGS S.A. provides inspection
, verification
, testing
and certification
services. With more than 67,000 employees, SGS operates of over 1,250 offices and laboratories around the world.
The core services offered by SGS include Inspection Services for the inspection and verification of the quantity, weight and quality of traded goods, Testing Services for testing product quality and performance against various health, safety and regulatory standards, Certification Services to ensure that products, systems or services meet the requirements of standards set by governments, standardization bodies or by SGS customers, and Verification Services to ensure that products and services comply with global standards and local regulations.
Its main competitors are the companies Bureau Veritas
, Intertek, TUV Rheinland, Germanischer Lloyd
(GL) and Cotecna (in sphere of verification and certification services) and Core Laboratories, Inc. (in sphere of the goods quality and quantity inspection).
in 1878 in order to standardize shipping documents for exporting nations and to clarify procedures and disputes relating to the quality of imported grain.
In the same year, SGS was founded in Rouen, France, by a young Latvian immigrant who, having seen the opportunities at one of the country’s largest ports, began to inspect French grain shipments. With the aid of Captain Maxwell Shafftington he borrowed money from an Austrian friend in order to start inspecting the shipments arriving in Rouen as, during transit, losses showed in the volume of grain as a result of shrinkage and theft. The service defended the rights of exporters by inspecting and verifying the quantity and quality of the grain on arrival with the importer.
Business grew rapidly; the two entrepreneurs went into business together in December 1878 and, within a year, had opened offices in Le Havre, Dunkirk and Marseilles. An early innovation, still offered by the company today, was the Full Outturn Guarantee (FOG) which is a service that reimburses the exporter for any loss or gain during shipping as long as SGS can inspect the cargo during both the loading and unloading processes.
By 1913 the company had grown considerably into a leading grain inspection business and was inspecting 21 million tonnes of grain per year from a network of 45 offices across Europe. In 1915, during the First World War, the company moved its Headquarters from Paris to Geneva, Switzerland, in order to continue its operations in a neutral country and on July 19, 1919 the company adopted the name it carries today, Société Générale de Surveillance.
During the mid-20th century, SGS began to diversify and started offering inspection, testing and verification services across a variety of sectors, including industrial, minerals and oil, gas and chemicals, among others. In 1981, the company went public and the current structure of SGS, consisting of ten business segments operating across ten geographical regions, was formed in 2001.
Under construction also providing 'consultancy services - Project Management and Architectural Design.
SGS is organised into ten lines of business and operates across ten geographic regions. Each business is led by an Executive Vice President (EVP), and each region is led by a Chief Operating Officer (COO). The EVPs and the COOs, in conjunction with the functional Senior Vice Presidents (SVPs) and the Group’s Chief Executive Officer, Chief Financial Officer and General Counsel make up the Operations Council
All SGS acquisitions since 2005.
s (PSI) as a means to fight corruption especially in developing countries. As the SGS is one of the market leaders in PSI, it profits well from these means. In the 90's international charges claimed that the companies involvement was furthering corruption instead of fighting it due to the alleged payment of millions of dollars to government members and their families. Most claimed is a payment to the husband of then Pakistani Prime Minister Benazir Bhutto
, Asif Ali Zardari
. Further suspected irregularities were published about the contracts with Paraguay
and the Philippines
.
SGS was accused in 1998 of bribing government officials to win contracts in Pakistan. SGS SA was dropped from the bid and responded by suing the Pakistan government over the allegations. In 2004, SGS SA and the government of Pakistan reached a settlement where both parties withdrew their civil claims and counterclaims. A former employee was indeed indicted in relation with commissions paid to a Geneva lawyer who appeared to be connected with Ms. Benazir Buttho and her family. The case was subsequently dropped. However, an internal investigation revealed weaknesses in internal controls. As a consequence a "Code of Integrity and Professional Conduct" and a full compliance program were instituted to make sure the company was in line the FCPA or any similar legislation. More information on the SGS integrity program is available at http://www.sgs.com/about_sgs/compliance_integrity.htm
Inspection
An inspection is, most generally, an organized examination or formal evaluation exercise. In engineering activities inspection involves the measurements, tests, and gauges applied to certain characteristics in regard to an object or activity...
, verification
Verification
The word verification may refer to:* Verification and validation, in engineering or quality management systems, it is the act of reviewing, inspecting or testing, in order to establish and document that a product, service or system meets regulatory or technical standards.* Verification , in the...
, testing
Physical test
A physical test is a qualitative or quantitative procedure that consists of determination of one or more characteristics of a given product, process or service according to a specified procedure...
and certification
Certification
Certification refers to the confirmation of certain characteristics of an object, person, or organization. This confirmation is often, but not always, provided by some form of external review, education, assessment, or audit...
services. With more than 67,000 employees, SGS operates of over 1,250 offices and laboratories around the world.
The core services offered by SGS include Inspection Services for the inspection and verification of the quantity, weight and quality of traded goods, Testing Services for testing product quality and performance against various health, safety and regulatory standards, Certification Services to ensure that products, systems or services meet the requirements of standards set by governments, standardization bodies or by SGS customers, and Verification Services to ensure that products and services comply with global standards and local regulations.
Its main competitors are the companies Bureau Veritas
Bureau Veritas
Bureau Veritas S.A. is a multinational company providing conformity assessment, certification and consulting services to industry, government and individuals. Originally formed in Antwerp in 1828 as Bureau de Renseignements pour les Assurances Maritimes , the Bureau Veritas name was adopted in 1829...
, Intertek, TUV Rheinland, Germanischer Lloyd
Germanischer Lloyd
The Germanischer Lloyd SE is a classification society based in the city of Hamburg, Germany. As a technical supervisory organization Germanischer Lloyd conducts safety surveys on more than 7,000 ships with over 100 Mio GT...
(GL) and Cotecna (in sphere of verification and certification services) and Core Laboratories, Inc. (in sphere of the goods quality and quantity inspection).
History
International traders in London, including those from France, Germany and the Low Countries, the Baltic, Hungary, the Mediterranean and the United States, founded the London Corn Trade AssociationGrain and Feed Trade Association
The Grain and Feed Trade Association is a London based trade organisation consisting of professionals, operators, traders and transporters in the international grain trade.-History:...
in 1878 in order to standardize shipping documents for exporting nations and to clarify procedures and disputes relating to the quality of imported grain.
In the same year, SGS was founded in Rouen, France, by a young Latvian immigrant who, having seen the opportunities at one of the country’s largest ports, began to inspect French grain shipments. With the aid of Captain Maxwell Shafftington he borrowed money from an Austrian friend in order to start inspecting the shipments arriving in Rouen as, during transit, losses showed in the volume of grain as a result of shrinkage and theft. The service defended the rights of exporters by inspecting and verifying the quantity and quality of the grain on arrival with the importer.
Business grew rapidly; the two entrepreneurs went into business together in December 1878 and, within a year, had opened offices in Le Havre, Dunkirk and Marseilles. An early innovation, still offered by the company today, was the Full Outturn Guarantee (FOG) which is a service that reimburses the exporter for any loss or gain during shipping as long as SGS can inspect the cargo during both the loading and unloading processes.
By 1913 the company had grown considerably into a leading grain inspection business and was inspecting 21 million tonnes of grain per year from a network of 45 offices across Europe. In 1915, during the First World War, the company moved its Headquarters from Paris to Geneva, Switzerland, in order to continue its operations in a neutral country and on July 19, 1919 the company adopted the name it carries today, Société Générale de Surveillance.
During the mid-20th century, SGS began to diversify and started offering inspection, testing and verification services across a variety of sectors, including industrial, minerals and oil, gas and chemicals, among others. In 1981, the company went public and the current structure of SGS, consisting of ten business segments operating across ten geographical regions, was formed in 2001.
Services
SGS is divided into ten divisions, each of which provides services to a specific industry:- AgricultureAgricultureAgriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
- Agricultural services offered include crop services to support production efficiency, services to the commodities trade for risk mitigation, inspection & testing, supply chain services to enable control and traceability of food and collateral management services for a range of agencies, organizations and companies.
- Automotive - Automotive services include design, construction and operation of motor vehicle inspection services provided for governments, manufacturers, traders, financial institutions and insurance companies.
- Consumer Testing ServicesSGS Consumer Testing ServicesSGS Consumer Testing Services is one of the 10 divisions of the Geneva-based SGS S.A. Group , which operates with more than 59,000 employees over 1,000 offices and laboratories around the world. provides a complete range of services, from textile to appliances, furniture, food, and electronics,...
- This division provides quality, compliance and consumer product safety services for textiles, appliances, furniture, food and electronics including product evaluation, factory assessment, product inspection and shipment control.
- EnvironmentNatural environmentThe natural environment encompasses all living and non-living things occurring naturally on Earth or some region thereof. It is an environment that encompasses the interaction of all living species....
- This division provides impact assessments, auditing, training, air and water quality testing, climate change services and the development of sustainable solutions for governments and industry.
- Governments and InstitutionsGovernmentGovernment refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
- Governments and Institutions services are offered to ensure compliance with regulatory requirements, stimulate economic growth, facilitate trade and support efficiency, good governance and sustainable development for governments and international institutions.
- IndustrialSGS Industrial ServicesSGS Industrial Services is a global provider of technical inspection, verification, testing and conformity assessment services for industrial markets. SGS Industrial Services is one of the 10 divisions of the Geneva-based SGS S.A...
- Industrial services by SGS include quality and performance testing services for customers’ installations, materials, equipment, facilities and projects to enable customers to meet regulatory, voluntary and customer based requirements in industries including oil & gas, power generation & transmission, wind energy, construction and manufacturing.
Under construction also providing 'consultancy services - Project Management and Architectural Design.
- Life Science - This division covers clinical research, safety and quality control testing services for drug ingredients for the pharmaceutical and bio-pharmaceutical industries.
- Minerals - The minerals division offers testing services for coal and coke, precious and base metals, steel and steelmaking raw materials, bio-fuels, fertilizers, cement, industrial minerals and diamonds for the purposes of exploration, feasibility testing, production, trading, commercial applications, recycling, mine closure and collateral management services.
- OilOilAn oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....
, GasGasGas is one of the three classical states of matter . Near absolute zero, a substance exists as a solid. As heat is added to this substance it melts into a liquid at its melting point , boils into a gas at its boiling point, and if heated high enough would enter a plasma state in which the electrons...
and Chemicals - This division helps to locate, analyze and extract oil and natural gas from onshore and offshore fields in the exploration, appraisal, development, production and logistics phases. OGC services include also services related to processing, storage and transportation of crude oil and natural gas, refining, distribution, retail services and collateral management services.
- Systems and Services Certification - This division covers auditing, certification, training and advisory services for management systems in quality, environment, health & safety, social accountability, security and business continuity in order to ensure that international, local or client standards are met.
Management
SGS Management:SGS is organised into ten lines of business and operates across ten geographic regions. Each business is led by an Executive Vice President (EVP), and each region is led by a Chief Operating Officer (COO). The EVPs and the COOs, in conjunction with the functional Senior Vice Presidents (SVPs) and the Group’s Chief Executive Officer, Chief Financial Officer and General Counsel make up the Operations Council
- The CEO is Christopher Kirk.
- The Chief Operating Officers are Pauline Earl (Western Europe), Duilio Giacomelli (South East Europe), Dirk Hellemans (Central & North West Europe), Teymur Abasov (Eastern Europe & Middle East), Fred Herren (Africa), Jeffrey McDonald (North America), Alejandro Gomez de la Torre (South America), Helmut Chik (China & Hong Kong), Anthony Hall (South East Asia & Pacific), Dennis Yang (Eastern Asia).
- The Senior Vice Presidents are Geraldine Matchett (CFO), Chris Kirk (IT), Jean-Luc de Buman (Corporate Communications & IR Corporate Development), Olivier Merkt (Legal & Compliance), Dominique Ben Dhaou (Human Resources), Francois Marti (Strategic Transformation).
- The Executive Vice Presidents are Michael Belton (Minerals Services), Beat In-Albon (Industrial Services), Frederic Herren (Automotive & GIS), Anne Hays (Life Science Services), Jeffrey Newell (Agricultural Services), Frankie Ng (Consumer Testing Services), Malcolm Reid (Systems & Services Certification), Alim Saidov (Oil, Gas & Chemicals Services & Environmental Services).
Acquisitions in 2010 and 2011
- November 2011 - PfiNDE Inc., Connecticut, USA.
- August 2011 - Environmental Testing Corporation (ETC), Aurora, Colorado, USA
- August 2011 - Acumax (Proprietary) Limited, Gauteng, South Africa
- July 2011 - Simmonds & Bristow Pty Ltd, Brisbane/Queensland, AU
- June 2011 - Correl Rail Limited, Birmingham, UK
- May 2011 - AG Research Associates LLC (ARA), Georgia, USA
- April 2011 - Sertec S.r.l., Livorno, Italy
- March 2011 - Agri-Food Laboratories Inc. (AFL), Guelph, Ontario, Canada
- February 2011 - Auto Contrôle Evaluation Services (ACE), Bonneuil sur Marne, France
- January 2011 - Lippens Geotechniek, Zulte, Belgium
- January 2011 - NviroCrop Group, Potchefstroom, South Africa
- January 2011 - chemical characterisation business in the UK
- January 2011 - Tianjin Tianbao Construction Materials testing Co, Ltd., Tianjin
- January 2011 - International Electrical Certification Centre Ltd., Hong Kong
- November 2010 - M-Scan group, Wokingham (UK), West Chester (PA,USA), Geneva (Switzerland), Freiburg (Ger)
- August 2010 - Am'Tech Medical, Sèvres, France.
- July 2010 - Assayers Canada (also known as Mineral Environments Laboratories Ltd.), Vancouver, Canada.
- March 2010 - Verilab SA, Antofagasta, Chile.
- January 2010 - Intron Group, Sittard, Netherlands.
- January 2010 - Joint Cooperation Agreement with HalliburtonHalliburtonHalliburton is the world's second largest oilfield services corporation with operations in more than 70 countries. It has hundreds of subsidiaries, affiliates, branches, brands and divisions worldwide and employs over 50,000 people....
combining formation fluid sample acquisition and analysis services.
All SGS acquisitions since 2005.
Criticisms
The Worldbank recommends pre-shipment inspectionPre-shipment inspection
Pre-shipment inspection, also called preshipment inspection or PSI, is an important and reliable quality control method for checking goods' quality while clients buy from the suppliers....
s (PSI) as a means to fight corruption especially in developing countries. As the SGS is one of the market leaders in PSI, it profits well from these means. In the 90's international charges claimed that the companies involvement was furthering corruption instead of fighting it due to the alleged payment of millions of dollars to government members and their families. Most claimed is a payment to the husband of then Pakistani Prime Minister Benazir Bhutto
Benazir Bhutto
Benazir Bhutto was a democratic socialist who served as the 11th Prime Minister of Pakistan in two non-consecutive terms from 1988 until 1990 and 1993 until 1996....
, Asif Ali Zardari
Asif Ali Zardari
Asif Ali Zardari is the 11th and current President of Pakistan and the Co-Chairman of the ruling Pakistan Peoples Party . He is also the widower of Benazir Bhutto, who served two nonconsecutive terms as Prime Minister....
. Further suspected irregularities were published about the contracts with Paraguay
Paraguay
Paraguay , officially the Republic of Paraguay , is a landlocked country in South America. It is bordered by Argentina to the south and southwest, Brazil to the east and northeast, and Bolivia to the northwest. Paraguay lies on both banks of the Paraguay River, which runs through the center of the...
and the Philippines
Philippines
The Philippines , officially known as the Republic of the Philippines , is a country in Southeast Asia in the western Pacific Ocean. To its north across the Luzon Strait lies Taiwan. West across the South China Sea sits Vietnam...
.
SGS was accused in 1998 of bribing government officials to win contracts in Pakistan. SGS SA was dropped from the bid and responded by suing the Pakistan government over the allegations. In 2004, SGS SA and the government of Pakistan reached a settlement where both parties withdrew their civil claims and counterclaims. A former employee was indeed indicted in relation with commissions paid to a Geneva lawyer who appeared to be connected with Ms. Benazir Buttho and her family. The case was subsequently dropped. However, an internal investigation revealed weaknesses in internal controls. As a consequence a "Code of Integrity and Professional Conduct" and a full compliance program were instituted to make sure the company was in line the FCPA or any similar legislation. More information on the SGS integrity program is available at http://www.sgs.com/about_sgs/compliance_integrity.htm