EDI system needs more time for full operation in RI

EDI system needs more time for full operation in RI

By Riyadi

JAKARTA (JP): It may take years for the planned paperless
customs service, using an electronic data interchange (EDI)
system, to become fully operational.

Overseas experience says it will be at least 18 months before
the EDI system can handle significant document exchange.

And experts have suggested that it would take even more time
to implement EDI in Indonesia, which is still novice at handling
it.

"Looking at our current condition, it will be several years
before we can fully exchange documents electronically," said
Maman Surachman, head of the EDI project at publicly listed Bank
Bali, one of three banks involved in Indonesia's customs EDI
pilot project.

The Directorate General of Customs and Excise plans to launch
the paperless customs service as pilot projects at Jakarta's
Tanjung Priok port and Soekarno-Hatta airport on April 1, when
the 1995 customs law comes into force.

The plan will only succeed with commitment and support from
all participants, with the government playing a pivotal role of
support and encouragement.

Experts have warned that no party in Indonesia's trading
community has any practical EDI experience.

It won't be easy for them to subscribe to EDI, adapt their
existing operations, standards and computer systems or train
their staff.

Many of them -- notably local shipping companies, importers,
textile-related firms and auto firms -- have openly expressed
their reservations abut joining the system.

Most of them were reluctant to invest much in EDI
infrastructure while they were unconvinced of its benefits.

Subsidized

To encourage more companies to enter the EDI program, the
government has decided to subsidize their EDI operations for one
year.

Subsidies include the provision of translator software,
importer modules, training, hardware installations and one-year
free-of-charge traffic use.

Traffic charges include monthly fees of Rp 100,000 (US$41.60),
volume usage fees of Rp 550 for 1,000 characters an address every
document, data storage fees of Rp 550 for 1000 characters a day
(counted after five days), interconnection fees of Rp 550 for
1,000 characters and fax gateway fees of Rp 550 for 1,000
characters (excluding telecommunication fees).

EDI bring substantial benefits to organizations which
implement it. EDI reduces delays caused by postal paper chains
and avoids re-keying of data, thereby saving time and reducing
errors.

EDI also cuts the costs of creating, recording and storing
paper documents and records. It facilitates shorter lead times
and reduces administrative costs.

Many businesses have chosen EDI as a fast, inexpensive and
safe method of sending purchase orders, invoices, shipping
notices and other frequently used business documents.

EDI has been successfully used for trade facilitation in some
countries, covering transactions between importers, exporters,
customs, banks, ports, shippers, freight forwarders, agents and
brokers.

The implementation of EDI in Indonesia is expected to help
expedite the clearance of imported goods from customs areas when
the combination of on-arrival inspections of imports and post-
entry audits are enforced from April 1.

The system is designed to reduce personal contact between
customs officials and businesspeople and consequently cut red
tape and minimize the possibility of collusion between officials
and businesspeople.

But mixed experiences of EDI systems, their introductory
problems in some countries and their failure in countries like
Hong Kong have underscored the need for careful planning and
sufficient time for preparations.

It is not necessary for a sender and receiver to have
identical document processing systems for EDI. When a document is
sent, EDI translation software converts its format into an agreed
standard. When the document is received the EDI translation
software automatically changes the standard format into the
format of the receiver's document processing software.

A United Nations body has developed EDI standards, called
UN/EDIfact (the United Nations Rules for Electronic Data
Interchange for Administration, Commerce and Transport).

EDI standards define a set of "message types," which generally
correspond to familiar physical documents.

For trade facilitation, such standards would include customs
declarations (CUSDEC), customs responses (CUSRES), conveyance
reports (CUSREP), cargo manifestos (CUSCAR), payment
authorizations from agents (PAYORD), pre-credit advice from agent
banks to customs (CREADV) and invoice messages (INVOIC).

These standards are broad and complex, and often vague. Within
a single EDI community, a simplified usage and agreed
interpretation must be agreed before implementation. Typically
this is done by a consultative body representing parties in an
EDI community.

The Asia EDIfact Board has also been established to guide,
stimulate and promote the development and use of UN/EDIFACT
standards in its Asian member countries or economies.

The board's members include China, India, Indonesia, Iran,
Japan, Malaysia, the Philippines, Singapore, South Korea, Sri
Lanka, Taiwan and Thailand.

But only Singapore and Japan seem to have fully implemented
the system for customs or trade.

It took Singapore more than four years to set up an
operational EDI system in 1989. This was achieved with
substantial commitment and backing from the government, superb
infrastructure, a compact geographical zone and a disciplined and
educated trade community.

Difficult

It will be difficult for less-developed and more complex
countries like Indonesia to match Singapore's achievements in the
foreseeable future but the Singaporean model does offer
challenging directions and possibilities.

Indonesia, in its effort to implement EDI for trade
facilitation, set up advisory and executive teams only last year
to implement EDI customs message and integration guidelines.

The advisory team is headed by Director General of Customs and
Excise Soehardjo Soebardi and includes representatives from the
ministries of finance, transportation, industry and trade, the
central bank and the Indonesian Chamber of Commerce and Industry.

The executive team is headed by Eddy Abdurrachman, the chief
of the directorate general's electronic data processing and
information center. Its members include representatives of
government offices and private companies such as importers,
shipping companies and banks.

To support the program, state-owned telecommunications firm PT
Indosat and state-owned port operator PT Pelabuhan II have set up
a provider, PT EDI Indonesia, to run the system for customs
services.

The system will electronically connect the customs office, as
the system's core, to all related parties, including port and
airport authorities, shipping companies, importers, freight
forwarders, banks, tax offices and the state treasury.

Not all parties will be electronically connected to the
customs office during the pilot project to be launched April 1.

The pilot project will only connect the customs office to the
Jakarta port and airport authorities, 23 importers, five shipping
companies and three foreign exchange banks.