Pre-shipment inspection debated in legislature
JAKARTA (JP): House deliberation on the customs bill was dominated by the pros and cons of the pre-shipment inspection system for imports which has been in use since the middle of 1985.
The associations of Indonesian importers, exporters and ship- owners led by Amirudin Saud on one side and economist Rizal Ramli from the Econit economic research institute on the other argued yesterday before the House's Golkar faction over the best customs clearance system for Indonesia.
The three associations, which prefer the current pre-shipment inspection system, demanded that the pre-shipment inspection for imports be stipulated clearly in the bill, while Econit suggested that the bill be left open for either pre-shipment inspection or post-shipment customs checks.
Amirudin, chairman of the Indonesian Importers Association, argued that the pre-shipment inspection system has greatly facilitated smoother imports.
"The present system has proven to be quite effective in facilitating the smooth flow of imports, cutting importing costs, minimizing administrative irregularities and under-invoicing," Amirudin said at the hearing.
Also present at yesterday's hearing were Hamid Ibrahim Ganie, chairman of the Indonesian Exporters Association, and Syawal of the Indonesian Ship-Owners Association.
Amirudin noted that pre-shipment inspection helps prevent the customs officials from abusing their power, which occurred frequently before the introduction of the system in 1985.
"If we return to the old system, I'm sure that there will be many problems, especially the possible collusion between customs officials and businessmen and more congestion at our ports," Amirudin said.
However, Rizal contended that the post-shipment inspection system differs greatly from the on-arrival inspection system, which was employed by Indonesia until 1985.
On-arrival inspection of imports caused congestion and delay at sea ports because the customs officials inspected all imported goods at the local ports, Rizal said.
He said that the post-shipment, or post-audit system, is basically a self-assessment system, by which customs officials inspect containers selectively. Inspections can even be done in the importers' warehouses or factories.
"After ten years of the pre-shipment inspection system, it is time for Indonesia to gradually adopt the post-audit system," Rizal said.
The pre-shipment inspection system was launched in 1985 under a presidential decree, which stripped the customs and excise directorate general of its inspection authority. The government later assigned the Geneva-based Societe Generale de Surveillance (SGS) to inspect Indonesian imports at points of loading.
The contract with SGS was modified in 1991 after the government formed a new inspection company, PT Surveyor Indonesia (PTSI), in a joint venture with SGS. The main contract for inspection was later awarded to PTSI, which in turn hired SGS as a sub-contractor. PTSI is expected to eventually take over the whole inspection from SGS.
However, Rizal contends that the cost of the pre-shipment inspection system to the government was too high.
"After ten years of SGS's operation here, customs officials still had no access to SGS's data and information system," Rizal said.
However, most port users, including all foreign businessmen, have demanded the maintenance of the present system.
"If cost is the main issue, we importers are wiling to bear them," Amirudin pointed out.
He added that the costs are actually negligent compared to the great benefits, citing the smooth import flows that have sharply reduced importing costs.
Moreover, Amirudin added, since Indonesian industrial companies depend largely on imported raw, intermediate and capital goods, any delay or snag in import flow will adversely affect the competitiveness of the country's exports. (rid)