New customs rules worry Europe and U.S.

JAKARTA (JP): European, American and South Korean businessmen have expressed great concern about the new customs clearance rules the Indonesian government plans to implement in April.

"If their preparations are not right and adequate, new problems may arise," cautioned C.K. Song, chairman of the Korean Businessmen Association in Indonesia.

Song, the president of two major shoe factories in Tangerang, West Java, was commenting on the April implementation of the new customs law, which will introduce selective on-arrival inspections of imports and post-entry auditing of documents.

A senior diplomat at the European Union's representative office said European businesses were concerned with the plan to introduce the new system in place of the pre-shipment inspection system currently used.

"The monthly meeting of the embassies of the 15 EU member countries last month devoted a great deal of attention to that matter," added the diplomat who insisted on anonymity.

He said his office had met with the customs chief to convey its concerns.

"But it is entirely up to the Indonesian government to decide what system it will enforce. What is important to us and other businessmen is that import flows should remain as smooth, efficient as they have been over the past 11 years," he said.

"We know for sure that state-owned PT Surveyor Indonesia has been doing its job well," added Song. "I hope everything will be all right and smooth under the new system."

The government decided to end PT Surveyor Indonesia's contract in April but it has yet to decide if it will retain or end the pre-shipment inspection of imports at points of loading overseas.

The European diplomat said the efficient flow of imports was critical to Indonesia's economic growth because the country's manufacturing industry mainly depends on imported basic and intermediate materials while investment projects rely almost entirely on imported capital goods.

James Castle, chairman of the Business Advisory Indonesia consulting company, added that he had also heard a lot of concern about the new customs rules which would return import inspection authority to the customs service.

"But that, I think, is simply natural because most businessmen have been quite content with the present system," Castle noted.

The American consultant said businesses were not sure if customs officials had changed their attitude and work behavior from those before 1985, when the pre-shipment inspection system was introduced.

According to Castle, businesses also fear that so many major changes will be introduced at the same time in April.

"The new customs rules and the technical preparations which the customs office claims to have made so far look all right. But our problem usually lies in implementation," noted Barens Saragih, secretary-general of the Indonesian National Shipowners Association.

Customs and Excise Duty Director General Soehardjo, however, has repeatedly assured the business community that his office was prepared for the change.

"We have prepared our human resources and have installed all the necessary equipment to ensure the smooth handling of import inspection," Soehardjo said last week.

Soehardjo even pledged smoother import flows given that the customs office would be linked electronically to related companies through an electronic date interchange.

But many analysts continue to wonder if the customs service will be any more efficient or effective than other government offices if the salaries of customs officials remain at the same level of other civil servants. (vin)