Harboring corruption<\/p>\n
The report by the Ministry of Transportation on Jakarta's
\ninternational seaport, Tanjung Priok, which was the subject of
\narticles on the front page of this paper for three consecutive
\ndays up to Wednesday, amply demonstrated once again the
\nfrustrations faced by businesspeople as a result of the chaos,
\ncongestion and corruption at major ports across the country.<\/p>\n
The report, prepared for the Export\/Import Facilitation
\nCoordinating Committee, depicts how illegal fees are relentlessly
\nlevied every second of day in the country's largest and busiest
\nharbor. From the moment of entry into the port, at the docks and
\neven in the waters of the harbor itself, illegal charges are
\nubiquitous, thereby making port-handling costs in Indonesia
\nalmost twice as high as those in other ASEAN countries<\/p>\n
Similar complaints have been raised by various industrial and
\ntrade associations, with the most common being the fact that an
\nconsignment of imports requires more than two dozen signatures
\nfrom officials of the various government agencies involved in
\nport operations, and the levying of illegal fees at almost every
\nstage of that process.<\/p>\n
What, then, makes the findings of the latest report so much
\nmore urgent than previous ones? Will it encourage the government
\nto take as bold a measure to improve the flow of goods as the one
\ntaken by then President Soeharto in April, 1985?<\/p>\n
Soeharto stripped the corrupt customs service of the right to
\ninspect imports and entrusted this authority to the Geneva-based
\nSociete General de Surveillance. This arrangement lasted for more
\nthan 10 years up until 1996.<\/p>\n
There are, we think, several factors, that might make the
\ngovernment more responsive to the message contained in the
\nreport, though it is unlikely to lead to such a bold move as the
\nhiring of an outside survey firm to inspect Indonesian imports at
\nthe ports of loading.<\/p>\n
First of all, the report, commissioned by the Import\/Export
\nFacilitation Coordinating Committee under the chairmanship of
\nchief economics minister Aburizal Bakrie, was the first one to be
\nbased on a very comprehensive study of Tanjung Priok port
\noperations. The researchers methodically investigated all the
\ncauses of inefficiency, congestion and corruption at the harbor
\nand made a list of recommendations for improving port management
\nin general.<\/p>\n
Moreover, as both Aburizal and Vice President Jusuf Kalla, who
\nhead the economic team of President Susilo Bambang Yudhoyono's
\nUnited Indonesia Cabinet, are well-experienced businessmen, they
\nshould be fully aware of how crucial efficient ports are to the
\neconomy as a whole.<\/p>\n
International trade (export and import) accounts for more than
\n50 percent of gross domestic product and more than 80 percent of
\nthis trade is carried by sea. As Indonesia is a vast archipelagic
\ncountry, sea transportation also plays a key role in enhancing
\neconomic linkages between the various islands.<\/p>\n
Efficiency in our ports is also a prerequisite for developing
\nefficient supply chains, which are essential for attracting
\nforeign investors. The rationale is that foreign investors will
\nbe encouraged to establish production networks in Indonesia if
\nthe country can become a reliable part of the global supply chain
\nas superior logistics capabilities will enable companies to avail
\nof local comparative advantages and economies of scale. The
\nmodern production system requires an efficient supply chain to
\nallow for lower warehousing costs, lean manufacturing and
\njust-in-time delivery.<\/p>\n
Whatever recommendations are accepted and howsoever the reform
\nmeasures are sequenced by the Committee, which consists of the
\nrepresentatives of all ministries and government agencies
\ninvolved in port operations, there are several fundamental
\npolicies the government needs to introduce immediately.<\/p>\n
The government should treat seaports as basic infrastructure.
\nConsequently, state port management companies should not be
\ntasked with making as big a profit as possible but should instead
\nbe classified mainly as self-financing entities. The primary
\nyardstick for assessing port performance should be the level of
\nits efficiency, as reflected in total port handling costs
\ncompared to ports in other ASEAN countries.<\/p>\n
The greatest benefit that can be derived from seaports is not
\nthe direct profits from their core operations but rather the
\nsmooth, efficient flow of goods -- something that would
\ncontribute to strengthening the overall competitiveness of the
\neconomy.<\/p>\n
The government should force the customs service to fully
\noperate the electronic data interchange system for customs
\nclearance of imports to minimize the opportunity for corruption.
\nThis system has never been fully put into operation since its
\nlaunch in 1996 due to resistance from vested interests within the
\ncustoms service.<\/p>\n
It is the gross inefficiency, corruption and uncertainty
\nsurrounding cargo-stevedoring and customs clearance procedures
\nthat have led to Indonesian seaports being classified as high-
\nrisk harbors. Worse still, only six ports in the country have
\nbeen certified as conforming with the International Ship and Port
\nFacility Security Code, which came into force last July.<\/p>\n
Significant improvements in the efficiency and security
\nstandards of port operations would automatically reduce the
\npunitively high terminal-handling charges imposed by foreign
\nshipping companies on containers bound for or out of Indonesia.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/harboring-corruption-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}