Govt urged to maintain pre-shipment inspection
JAKARTA (JP): Five trade associations yesterday urged the government to maintain its current system of pre-shipment import inspection because of its effectiveness in expediting import flows and minimizing the invisible costs of importing.
"We want the government to continue using the pre-shipment inspection system for Indonesian imports even after the new customs law comes into force on April 1, 1997," the associations' spokesman, Amirudin Saud, told a news conference here yesterday.
The new customs law stipulates a self-assessment system for customs duties and selective inspection of imports on arrival. It also grants the customs office a 10 year post-audit period, requiring exporters and importers to keep their documents for that period.
The strong recommendation to maintain the pre-shipment inspection system was signed by the chairmen of the Indonesian Importers Association (GINSI), the Indonesian Exporters Association (GPEI), the Association of Indonesian National Shipowners (INSA), the Association of Electronics and Electric Companies and the Indonesian Footwear Association (APRISINDO).
The associations' statement stressed that the 11-year-old pre- shipment inspection system was effective in facilitating import flows and greatly reducing import costs.
"We are still traumatized by our bitter experience with the customs service before the middle of 1985. We are worried that malfeasance will again occur, import flows will slow down and the invisible costs of importing will rise sharply if the system of on-arrival inspection is introduced," Amirudin said.
Chairman of INSA Firdaus Wadjdi agreed that major seaports might face heavy congestion if the current system of pre-shipment import inspection is replaced by on-arrival inspection.
"The pre-shipment system has proven its effectiveness also in preventing under and over-invoicing of imports and smuggling as well as in increasing government receipts from customs duties," said Amirudin, who is also the chairman of GINSI.
Pre-shipment inspection was introduced in May, 1985 as part of a massive deregulation package which stripped the customs service of its inspection authority.
Pre-shipment inspection was initially conducted by the Geneva- based Societe Generale de Surveillance (SGS). In 1991, the inspection service was contracted to a newly-established state- owned company, PT Surveyor Indonesia, which then hired SGS as a sub-contractor.
PT Surveyor Indonesia, which has about 20 offices world-wide, is 80 percent owned by the government and 20 percent by SGS.
The associations issued their recommendation apparently because of a recent finance minister's decree which will terminate PT Surveyor Indonesia's pre-shipment inspection contract in April 1997, or three months earlier than its original expiry date.
The decree, however, does not stipulate if the pre-shipment inspection system will be maintained. It only asks PT Surveyor Indonesia to prepare for the termination of its contract.
"We are concerned only about the pre-shipment inspection system and not about which company will do the job," Amirudin said.
Imports, he added, play a very important role in determining the competitiveness of Indonesian exports because manufacturers still depend largely on imported basic and intermediate materials.
Amirudin said that before May, 1985 importers were required to obtain 37 official approvals to clear imports, and each permit cost a lot of time and money.
"If the old on-arrival inspection system is restored who can guarantee that the old extensive malfeasant practices will not reappear?" he said.
In a related development, I Nyoman Moena, former president of Surveyor Indonesia, said yesterday that businessmen want certainty on import management.
Moena suggested the customs service cooperate with PT Surveyor Indonesia to build an intelligence network which prevents smuggling.
"As long as the customs service is not adequately equipped with the much-needed software and hardware, why does it not simply cooperate with the surveyor company?" Moena asked. (kod)