Importers seek new trade law to protect businessmen

Importers seek new trade law to protect businessmen

JAKARTA (JP): The Indonesian Importers Association suggested
Saturday that the government issue a new trade law to protect
local businesspeople from manipulation and collusion practices
both at home and in foreign countries.

"We've already had laws in other sectors, such as industry,
transportation and labor. But we haven't had a new trade law that
protects our economic interests," said Chairman Amirudin Saud at
a press conference on his association's national meeting.

The statement was included in a declaration made by the
association after its national meeting last Friday.

Amirudin said the association views that the trade law issued
during Dutch colonialism as well as a number of presidential
decrees and instructions -- aimed at facilitating foreign trading
-- are inadequate to protect local businesses from manipulation
and collusion practices.

As an example, he cited the process of importing goods to
Indonesia. "How can we handle things legally if imported goods
are damaged or if their quality does not meet our requirements?
Without the law, it is very hard to sue the exporters," he said.

According to Amirudin, it is very costly to hire foreign
lawyers to handle such a case and local importers will not do it
if their imports are just small in value.

Besides, he added, due to the nonexistence of the trade law,
customs officials could manipulate Presidential Instruction No.
3/1991.

The presidential instruction allows customs officials to issue
intelligence notes for goods they suspect violate import
procedures or are not in line with reports made under a
preshipment inspection system in countries of origin.

Based on intelligence notes, customs officials can unload
imported goods at their arrival for rechecking, which could take
up to three weeks.

Amirudin said customs officials frequently manipulated their
authority in using intelligence notes. "It seems to me that very
often the rechecking is just for trying to find faults," he
noted.

Furthermore, the Directorate General of Customs and Excise
will not make any compensation payment if does not find any
violations.

He suggested that the proposed trade law will require the
customs office to provide compensation payment for importers if
it does not find any irregularities, to avoid its officials from
making arbitrary checking.

Amirudin noted that in the greater Jakarta area, where 1,700
of 2,900 importers are based, importers have to pay a demurrage
cost of US$15 per container and a storing cost of $4.30 per
container per day at Tanjung Priok port.

"So, if the goods are delayed for 10 days due to customs
rechecking, the importers have to pay an additional cost of $193.
This is not to mention other costs, such as the repacking of the
goods and disturbance caused to our industrial users," he said.

He noted that about 75 percent of the imports -- recorded at
US$40 billion last year -- was raw materials and capital goods to
produce export products.

"The rechecking process could also cause congestion at the
port and harm our efforts to promote exports," he said.

Inspection system

Amirudin also said that the association will fight for the
extension of the preshipment inspection system on Indonesian
imports.

"I think the system is the best to be applied in this country
to create efficiency. The application of the system has reduced
legal and illegal levies by 98 percent," he said.

The preshipment inspection was launched in mid-1985 under a
presidential decree designed to improve the clearance of imports
at customs areas.

He said that the preshipment inspection system simplifies the
works of customs offices because the goods inspected abroad by
the state-owned PT Surveyor Indonesia are accompanied with
reports indicating the nature of the goods, including their
number and value.

He said that the preshipment inspection system is also
supportive to the planned free trade in the region.

Recently, however, Director General of Customs and Excise
Soehardjo said that the system will hamper the harmonization of
customs procedures in the Association of Southeast Asian Nations
(ASEAN) and, therefore, it should be replaced with an on-arrival
inspection system to facilitate the implementation of the ASEAN
Free Trade Area agreement by the year 2003.

The government plans to replace the preshipment inspection
system next April with an on-arrival inspection system or
postaudit for both imports and exports, which is contained in the
new customs and excise law.

However, many parties, particularly importers, expressed their
doubts over the readiness of the customs office to carry out the
planned system in accordance with the law -- in good faith and in
the interests of the country.

The association's declaration also calls for the renomination
in 1998 of President Soeharto as President for another five years
and extends the tenure of the association's current leadership
until 1998. (13)