Problems of the post-shipment import system<\/p>\n
Beginning next month, the inspection of imports will change
\nfrom pre-shipment inspection to on-arrival inspection. Economist
\nHartojo Wignjowijoto, president of PT Aspecindo Kreasi, a
\nbusiness consulting company examines the shift.<\/p>\n
JAKARTA (JP): The preconditioning campaign for the
\nimplementation of the new customs law (No.10\/1995) seemed to
\nfocus on the electronic data interchange or on speeding up the
\npaper flows, rather than on the physical flow of goods and its
\nassociated potential problems and external transaction costs.<\/p>\n
The extra and uncertain size of the transaction costs of
\nclearing the release of goods out of the port seem to have
\npreoccupied importers' minds. This is the logical consequence of
\nthe shift from pre-shipment inspection to post-shipment or on-
\narrival inspection combined with post-audit documents by customs
\nofficers beginning in April.<\/p>\n
The trauma of excessive charges, legal and illegal, at
\nIndonesian ports long before the Presidential Instruction
\nNo.4\/1985, still bothers importers. The idea of this instruction
\nwhich introduced the pre-shipment inspection system was to uproot
\nrampant corruption within the customs service.<\/p>\n
Under both Presidential Instruction No.4\/1985, which was
\namended by Presidential Instruction No.3\/1991, on the pre-
\nshipment inspection service for imports, both state-owned PT
\nSurveyor Indonesia and its subcontractor, the Geneva-based
\nSociete Generale de Surveillance (SGS), have been doing an
\nexcellent job.<\/p>\n
The physical flow of imports have been smooth and transparent
\nand the handling costs have been certain.<\/p>\n
Now, the pendulum is about to swing back to post-shipment
\ninspection.<\/p>\n
This change has had an important bearing on the prospects of
\nour exports which depend mainly on imported basic and
\nintermediate materials. The efficiency by which imports are
\nhandled and cleared directly influences the competitiveness of
\nour exports.<\/p>\n
It should be remembered though that the pre-shipment
\ninspection service also has costs of its own -- fees paid to PT
\nSurveyor Indonesia and SGS. But this service has created
\ncertainty with regard to transaction costs.<\/p>\n
Of no less importance is the pre-shipment inspection system's
\ncontribution to preventing congestion at Indonesian ports and
\nminimizing handling and clearance costs. One may not realize that
\nthis system actually utilizes the port capacity of the countries
\nof origin of imports to minimize the risks of congestion at
\npoorly-equipped Indonesian ports.<\/p>\n
The arguments against pre-shipment inspection include the
\ninspection fees and the nationalistic pride of returning the
\ninspection authority to the customs service.<\/p>\n
The customs service has insisted that the EDI system would be
\nable to overcome all potential problems. But this is a matter of
\ntrust, not a matter of technical sophistication of handling both
\nthe paper shuffle and the flow of goods.<\/p>\n
Judging from their past dismal record (before June, 1985), why
\nshould we trust the customs officials? Should we trust the
\ncustoms officials at the risk of slowing down imports, and
\nthereby adversely affecting our export competitiveness?<\/p>\n
The answer to these questions lie with the big money involved.
\nThe large fees under the pre-shipment inspection system have been
\nflowing into the pockets of state-owned PT Surveyor Indonesia and
\nits subcontractor SGS.<\/p>\n
The big money involved in the post-shipment inspection service
\nwould, hopefully, go to the state coffers. But the big tips
\n(mostly untaxed), to be charged illegally by customs officers on
\nimporters, will be enjoyed by officials individually or in a
\ngroup.<\/p>\n
But the biggest potential problem is the uncertainty to be
\nfaced by businessmen regarding the size of the side-payments and
\nthe delivery schedule of their imports. The final victim will be
\nour export competitiveness.<\/p>\n
Further down the line, this also means that our national
\neconomic interests will be at stake, since our current account
\ndeficit has been increasing steadily almost to a critical level.<\/p>\n
The government is indeed faced with a difficult choice. But
\nthe alternative is not so complicated if the primary parameter is
\nnational economic benefits and not the financial costs of either
\npre-shipment or post-shipment inspection.<\/p>\n
The choice should be based on the following objectives,
\nincluding minimizing the risks of congestion at Indonesian ports,
\nabolishing the uncertainty regarding the physical clearance of
\nimports and minimizing the opportunity for malfeasance by customs
\nofficials.<\/p>",
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"sponsor": "Okusi Associates",
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