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.