Local manufacturers support PSI system to curb smuggling

Rendi A. Witular and Adianto P. Simamora, The Jakarta Post, Jakarta

Local manufacturers whose businesses have been seriously threatened or damaged by cheaper, smuggled products urged the government to immediately reapply the pre-shipment import inspection (PSI) system.

PSI would allow an independent agency to inspect imported goods in their country of origin, taking over this responsibility from the customs office, whose officials are notorious for corruption and turning a blind eye to smuggling.

Indonesian Pharmaceutical Association chairman Anthony Ch. Sunarja said on Tuesday that the smuggled goods were not only threatening industry but were also harming consumers.

"Illegal and fake medicines are flooding the country. These drugs can easily be obtained from street vendors, and are being sold cheaply," said Anthony.

He explained that many of the fake products were being manufactured locally as the manufacturers had been able to illegally ship in the machinery and raw materials required to produce them.

He said that importing such items needed special permits from the health ministry.

"(But corrupt) customs personnel must have been involved in helping the import clearance of the illegal goods," he said.

Calls for the government to apply the PSI system to certain imported products, such as textiles, sugar, electronics and pharmaceutical goods, have been growing lately amid deep disappointment over the performance of the customs service in curbing smuggling activities.

Minister of Trade and Industry Rini MS Soewandi earlier said that she supported the idea, especially as regards its application to the import of textiles and textile products. But other businesses have come out against the PSI system, arguing that it would only create higher costs in importing raw materials and capital goods.

Indonesia adopted the PSI system in 1985, but abandoned it 10 years later.

Meanwhile, the Indonesian Electronics Association (Gabel) also supported the reinstatement of PSI.

But the association's secretary-general Adhi Sumono warned that applying PSI without the support of the customs office might cause new problems for raw materials importers.

He pointed out that angry customs officials could intentionally disrupt import clearance, which in turn would harm industry.

"Customs officials will definitely not be happy with the reintroduction of PSI," he said.

House of Representatives member Irmadi Lubis voiced support of the implementation of limited PSI, saying the government could no longer rely on corrupt customs personnel in the fight against smuggling and underinvoicing.

"We in House Commission V fully support the plan," said Irmadi.

Irmadi also criticized Minister of Finance Boediono for failing to properly supervise his subordinates, especially those in the Directorate General of Customs and Excise.

"This is Boediono's failure. He is incapable when it comes to oversight and the fight against corruption," said Irmadi.