Most firms not yet linked up with customs EDI

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.