Govt must improve export credit, sack surveyors: Econit

Govt must improve export credit, sack surveyors: Econit

JAKARTA (JP): The government, in order to prevent future
export scams, should add post-auditing and verification
mechanisms to the rediscount facility and stop hiring surveyor
companies to inspect import and export documents, economists say.

"There are too many loopholes in the export and import systems
so far," Rizal Ramli, director of the Econit economic think tank,
told reporters yesterday.

"If the rediscount facility is not improved, the image of our
banking sector could be tarnished further," he said.

"We are not, however, calling for scrapping the rediscount
facility. We just want improvement," Ramli added.

The rediscount facility is a subsidized export credit which
was introduced by Bank Indonesia (BI), the central bank, in 1992
to support export-oriented firms. However, it is widely believed
that many exporters and commercial banks have abused it to obtain
the cheap credit facility by using counterfeit export papers.

Since last month, local press reports have focused on an
export scam case allegedly involving PT Detta Marina, a Jakarta-
based garment producer, which has allegedly conspired with a
group of commercial banks to obtained export credits of nearly Rp
500 billion (US$227.27 million) from BI by using bogus export
documents.

Kim Johannes, the company's owner, is now under investigation
by the Attorney General's Office.

Despite the brouhaha, there is still a consensus on the scope
of the financial losses of the fictitious export practice.

Econit, in its statement yesterday, said the extent of the
damage is "debatable" although it argued that fictitious exports
are "obviously damaging to Indonesia."

Minister of Finance Mar'ie Muhammad said last week the damage
was great but refused to elaborate.

Mar'ie also said that he has assigned three top officials from
his ministry to probe the case of bogus export documents.

Laksmana Sukardi, a former banker who is now a director at
Econit, said yesterday the government must decide on a ceiling
rate for the rediscount facility which then must only be awarded
to exporters based on their credit history and performance.

"In addition, the government must then force commercial banks,
after awarding credits, to closely post-audit the exporters," he
said.

"In theory, it is the job of the surveyors to verify export
documents, while the banks' responsibility starts only after they
receive the documents," he said.

Surveyor

Ramli said that to solve export scams, the government should
stop assigning surveyor companies to inspect the country's
imports and exports.

"The scandals involving Detta Marina and Golden Key prove that
the surveyors are not doing their jobs properly despite the
annual fees of Rp 450 billion that the government pays to them,"
he said.

The Golden Key case erupted last year when a little known
businessman, Eddy Tansil conspired with bankers to obtain credits
worth about $430 millions after manipulating import documents for
a petrochemical project that never fully materialized.

Under a government regulation, imports of goods worth more
than $5,000 should be inspected by state-owned PT Surveyor
Indonesia (SI), which then assigns its jobs to the Geneva-based
Societe Generale de Surveillance (SGS), at points of loading.
Exports of goods subject to government regulations or quota
systems of importing countries should be inspected by PT
Sucofindo, another state-owned surveyor firm.

The Association of Indonesian Importers (GINSI), however,
rejected Econit's proposal yesterday.

"The current system is the best we ever had and there is
absolutely no need to change it," GINSI chairman Amiruddin Saud
said. He also claimed that 99 percent of the organization's
members want to maintain the pre-shipment system.(hdj)