Govt may end SGS contract this year<\/p>\n
JAKARTA (JP): Minister of Finance Mar'ie Muhammad said
\nyesterday that the government might not extend the contract of
\nthe Geneva-based Societe Generale de Surveillance (SGS) to
\ninspect Indonesia's imports at points of loading.<\/p>\n
\"If the company is still needed, we will hire it only for
\ntechnical assistance,\" the minister told the Budgetary Commission
\nof the House of Representatives during a hearing.<\/p>\n
Mar'ie said that the termination of SGS's contract would not,
\nhowever, mean the end of the pre-shipment inspection system now
\nused by Indonesia for examining its imports.<\/p>\n
In 1985, the SGS took over responsibility for inspecting
\nIndonesian imports, using the pre-shipment inspection system. In
\n1991 the government assigned to the newly-established government-
\ncontrolled company, PT Surveyor Indonesia (SI), the job of
\ninspecting the country's imports at ports of loading. That
\ncompany in turn appointed SGS as its sub-contractor to carry out
\nits inspections on the condition that the Swiss company provides
\ntechnical assistance and know-how, so that SI could gradually
\ntake over the job.<\/p>\n
SI is 76 percent government-owned. Twenty percent of the
\ncompany belongs to SGS and four percent to the state-owned
\ndomestic surveyor PT Sucofindo. SI is likely to take over SGS's
\nfunctions when the latter's contract ends later this year.<\/p>\n
SI has already founded 14 chapters worldwide and is now
\npreparing another six in Asia and the United States to anticipate
\nthe transfer of the inspection jobs from SGS.<\/p>\n
The government has been widely criticized for using the
\nforeign surveyor to inspect Indonesia's imports. Critics say that
\nusing the foreign surveyor is not only too expensive, but also
\nviolates the principles of the General Agreement on Tariffs and
\nTrade.<\/p>\n
Some analysts have suggested that the government stop pre-
\nshipment inspection and instead use a post-audit system in order
\nto further smoothen the flow of imported goods into the country.<\/p>\n
Minister Mar'ie said that replacement of the pre-shipment
\nsystem with the post-audit system would lengthen the time
\nrequired, given the limited receiving capability of Indonesia's
\nports.<\/p>\n
Mar'ie said that given the present condition of Indonesia's
\nsea ports, pre-shipment inspection was still much better than the
\npost-audit system.<\/p>\n
\"The handling capacity of most Indonesian ports is still too
\nsmall for post-audits of imported goods,\" the minister said.<\/p>\n
He said that the government had paid a total of Rp 2.22
\ntrillion (US$1.03 billion) to SGS for its services since 1985,
\nwith an average fee of about Rp 222 billion per year.(hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-may-end-sgs-contract-this-year-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}