Illegal fees 'double RI export costs'

Illegal fees 'double RI export costs'

Zakki P. Hakim, The Jakarta Post, Jakarta

While the flow of goods through Tanjung Priok port is increasing,
petty officials' pockets are getting fatter too, with illegal
fees to blame for often crippling import-export costs, a new
report says.

The report from a Ministry of Transportation says the fees for
some exporters represented more than a 100-percent increase on
their legitimate costs.

Presented to a government-sanctioned special team last week,
the report says the cost to export 20-feet and 40-feet
equivalent-unit (TEU) containers was 112 percent more than legal
costs. Illegal fees also meant the costs of importing regular 20-
and 40-feet containers increased by 56 percent and 58 percent,
respectively, it says.

The team unsurprisingly recommends the government require all
port-related institutes to crack down on the illegal fees, which
it says are a key cause of the country's high-cost economy and
its failure to compete internationally for investment.

The team will not officially present its findings to the
Coordinating Minister for the Economy until Thursday.

Team member and Indonesia Exporters Association (GPEI)
secretary-general Toto Dirgantoro said the illegal fees were
generally passed on to consumers by producers in the form of
increased prices, which made Indonesian goods less competitive in
global markets.

Producers here were often hit twice by the fees, he said. High
import costs made raw materials more expensive to source and
increased local production costs, he said.

"Combined with the high export costs, it would be hard for
many of Indonesian products to have (sound) global
competitiveness," Toto said.

Indonesia exported and imported a total of 5.5 million TEUs of
containers last year.

According to the report, the illegal fees include various
"incentives" given to state owned port operator PT Pelabuhan
Indonesia (Pelindo) II, along with the customs, immigration, and
quarantine offices, port administrator and shipping agencies.

Exporters and importers were subject to Rp 5.59 million worth
(US$588) of general fees, he said.

They then had to pay additional fees of Rp 244,500 per 20-feet
container and Rp 407,500 per 40-feet container.

These include what was called the Fuel Adjustment Factor,
"tips" for forklift operators and container surveyor, and fees
for several documents that were supposed to be free, the report
revealed.

Importers also had to bear additional fees, paying up to an
extra Rp 176,500 per 20-feet container of goods and Rp 201,000
per 40-feet container.

The report did not say mention when the study was conducted.

A separate survey by the Indonesian Textile Association (API)
estimated that last year alone, illegal fees totaled Rp 6.8
trillion ($715.79 million).

Both the reports help confirm the Transparency International
(TI) survey that ranked Indonesia as the fifth-most corrupt
country out of 146 surveyed late last year.

The special team was formed by the Coordinating Minister for
the Economy in April. It consists of senior officials responsible
for sea transportation, customs, foreign trade and taxation, as
well as officials from the Attorney General's Office, National
Police and the Office of the State Minister for State-owned
Enterprises.

Other members also include representatives from PT Pelindo II,
the Indonesian Chamber of Commerce and Industry (Kadin) and other
port operators and business associations.