Customs red tape

Indonesian businesspeople often complain about the red tape at the customs service which delays clearance of goods, thereby increasing handling costs and disturbing industrial production processes and plant construction. However, the outrage expressed last week by Amiruddin Saud, the chairman of the Indonesian Importers Association, over what he disdainfully criticized as extortion of bribes by customs officials should jolt the government into immediate action.

Amiruddin distributed copies of official memos written by the chief of the intelligence section of the customs service at the Jakarta port of Tanjung Priok to reporters to emphasize his point. Importers who got such memos -- there were 1,063 memos issued in the first quarter of this year alone -- were required to meet with the customs official in charge before their imports could be cleared.

At those meetings, as Amiruddin recounted, importers were forced to pay bribes or face the risk of having the memos converted into intelligence notes, which would authorize physical inspection by customs officials. Physical inspection means delays in clearance of goods and additional costs.

This practice runs counter to the procedures introduced since the middle of 1985 when the corruption-ridden customs service was stripped of its inspection authority and imports were subjected to preshipment inspection by the officially-designated surveyor company (initially Geneva-based Societe Generale de Surveillance, or SGS, and later state-owned PT Surveyor Indonesia). Under the system, which will be effective until July next year, imports which are covered by Clean Reports of Finding from the surveyor company's offices in the countries of origin or ports of loading can no longer be inspected by the customs service at the ports of unloading, except in special cases when intelligence information indicates high probability of violations of customs and import regulations.

The preshipment inspection system minimizes personal contacts between importers and customs officials which are usually the starting points for collusion. However, the official memos require importers to meet with customs officials to "clarify things". According to Amiruddin, it is at such meetings that importers are bullied into paying bribes under the threat of having their imports subjected to physical inspection.

As if all of this were not distressing enough, we were utterly disappointed at the response to these allegations from the Customs and Excise Tax Director General, Soehardjo, who immediately demanded evidence of bribery and the names of the officials taking bribes from importers. Surely Soehardjo knows that such bribes are paid in cash without any receipts.

One would think that the customs director general would be so disgusted by the importers' complaints and allegations that he would act immediately and in good faith quietly investigate the allegations.

The big question is why the chief of the intelligence section of the customs service at the Tanjung Priok port has written so many memos. Presidential Instruction No.3/1991 on the preshipment inspection system stipulates that only intelligence information notes mandate physical inspection and not memos. What is the purpose of memos which require personal contacts between importers and customs officials?

The director in charge of smuggling prevention and investigations at the customs directorate general, Thomas Sugijata, acknowledged last week that even the intelligence notes, which are produced through a lengthy process, do not always result in the proof of wrongdoing on the part of the importer. Of the 122 intelligence notes his office alone served to importers in the first quarter of this year as the basis for physical inspection, only 59 proved true in the sense that the inspection uncovered violations of customs or import regulations.

The problem is that importers whose imports are delayed by physical inspection cannot not claim compensation if the inspection finds nothing wrong.

We think it is most imperative for the customs director general to clean up his office during the one-year transition period up to April, 1997, before the new customs law comes into effect. Otherwise, the government clearly will have to continue the preshipment inspection system after the July expiry date.