Most firms not yet linked up with customs EDI

JAKARTA (JP): The associations of textile companies, shipping lines and car makers said yesterday none of their members had been linked up with the Electronic Data Interchange (EDI) which the Customs and Excise Tax Directorate General plans to operate in April.

"We are still struggling with poor business performance. We do not have the resources now to link up with the EDI system," Indonesian National Shipowners Association chairman Firdaus Wadjdi said.

Firdaus said none of his association's members had been linked with the customs EDI to his knowledge.

Indonesian Textile Association secretary general Benny Sutrisno also said none of his members had gone on line with the customs EDI.

"Linking up with EDI means additional costs for the hardware, software and training of operators, not to mention the daily operating costs," Benny said.

He suggested more comprehensive preparations be made for the implementation of the new customs law.

Herlina, an automotive spare parts importer, wondered who would finance the link with the customs EDI.

An executive of the Association of Automobile Sole Agents and Assemblers said her organization was not fully aware of the customs EDI.

"We are supposed to get a briefing from customs on Wednesday (today)," she said.

The customs service has insisted over the last few months that the EDI system would be the "life and death" of new customs rules and procedures to be enforced in April.

The system is designed to electronically connect the customs office with all related parties involved in the clearance of imports from the port, including importers, port and airport authorities, shipping companies, airlines, freight forwarders, banks and other related government offices.

Customs and Excise Director General Soehardjo and Finance Minister Mar'ie Muhammad have often said that direct contact was usually the starting point for collusion between businessmen and customs officials.

"By processing and submitting documents through the online computer system we will reduce red tape and minimize the possibility of collusions between businesspeople and officials," Soehardjo told the House of Representatives last week.

But given the inadequate preparations for the EDI system, most businessmen and analysts are doubtful the system can start in April.

They are afraid if the EDI system is forced into the customs administration in April it would cause chaos at the expense of import flows.

But if the EDI is not implemented, businessmen would have to meet directly with customs officers with "worrisome" consequences.

Until now, there has been little movement towards EDI standards in the country, even on paper-based transactions like the introduction of paper documents which come after the EDI fact message standards and ISO data standards.

Two years

Analysts cited Singapore's and Japan's experiences, two countries in Asia which have successfully implemented the EDI system not only for transportation but also customs purposes.

Recent World Bank and UNDP studies show that at least two years of trial operations, preceded by several years of technical preparations, are needed to ensure the smooth implementation of EDI.

EDI has succeeded in facilitating trade, covering transactions between importers, exporters, customs, banks, ports, shippers, freight forwarders, agents and brokers in many developed countries. The system brings substantial savings and benefits to its users, the reports said.

But Indonesia has yet to start trial operations as the Consultative Committee for EDI was set up only last year.

PT EDI Indonesia, the system's provider, was incorporated only in June, 1995, as a joint venture between PT Indosat and PT Pelabuhan Indonesia II port management company.

What seemed to make things more worrisome was the customs directorate general's disclosure last week that it had not yet received the money allocated in the budget for EDI's development and operations.

Singapore's TradeNet can process 10,000 customs declarations a day and most clear customs in less than 15 minutes.

But TradeNet was being prepared in 1982 although it was not put into full operation until 1991.

Japan began preparations for its EDI system in 1977 and started fully operating it in early 1991.

Malaysia issued a directive in early 1993 for the customs service to go EDI but as of last year their system still had many problems.

Most other major trading countries in Asia like South Korea, Thailand, the Philippines, India, are still at the preparation stage for developing EDI for customs purposes.

Thailand's condition is similar to Indonesia's. It has been working on a national EDI initiative for several years but has no working implementation at present and a committee on EDI is still studying the proposal.

One of the biggest problems in developing EDI for customs purposes is the many parties involved: Shipping agents, forwarding agents, seaport/airport authorities, banks, warehousing companies, importers, in addition to the EDI provider.

According to the studies EDI is more than just a computer system but a whole new way of doing business.

Since virtually none of Indonesia's trading community has any practical EDI experience, it will be a big task for them to adapt their existing operations and standards and computer systems to EDI standards, to train their staff, install and operate the system.