Redefinition of customs service urged
Redefinition of customs service urged
JAKARTA (JP): An independent research group yesterday
suggested that the government redefine its contract with the
Societe Generale de Surveillance (SGS) in inspecting Indonesia's
imports because it runs counter to GATT rules and gives no
profits.
"It's ridiculous to continue assigning SGS to pre-shipment
inspections since we reduced our import tariffs to an average of
19 percent," Rizal Ramli, the managing director of the Advisory
Group in Economics, Industry and Trade (Econit), said at a press
conference yesterday.
SGS is a Geneva-based surveyor firm, which was licensed in
1985 under a three-year contract to inspect Indonesia's imports
at the point of loading following concern about the country's
notorious red tape and corruption among customs officials.
PT Surveyor Indonesia, a company 76 percent owned by the
government, 20 percent by SGS and four percent by PT Sucofindo, a
state-owned surveyor firm, is expected to take over all the pre-
inspection jobs from SGS by December.
Ramli said yesterday that the pre-shipment inspections are
against the Valuation Code of the General Agreement on Tariffs
and Trade (GATT), which requires its signatories, including
Indonesia, to value imported goods based on the prices of actual
transactions.
"It should not be based on the value of merchandise at the
country of origin or on arbitrary or fictitious value. The
customs value of imported goods shall be based on actual
transactions," he added, referring to the practice whereby
Indonesian customs and SGS estimate the value of imported goods.
The government claims that SGS's inspections have given it
more revenue because importers can no longer under-invoice their
goods in an attempt to reduce payments for import duties. On the
other hand, importers often complain that they have to pay
excessive duties because the check prices set by SGS are higher
than the actual prices.
Robert P. Collier, the chief representative of SGS's Jakarta
office, was not available yesterday for comment. "He has a
meeting," said Collier's secretary.
Laksamana Sukardi, an associate director of Econit, said that
the practice of pre-shipment inspections should be abandoned on
the grounds that Indonesia's import tariff rates have been
reduced from 37 percent in 1984 to the present 19 percent.
"Industrialists are not interested in risking under-
invoicing," Laksamana said.
Post-audit
"It's better to implement a post-audit system than the pre-
shipment inspection," he said. "No other country employs SGS the
way Indonesia does."
"We're the biggest customer of SGS. We pay them some Rp 450
billion (US$207 million) annually just for inspection fees," he
bluntly said.
He noted that the Indonesian government could purchase SGS
within 10 years at such a fee schedule.
SGS and the government in 1991 founded PT Surveyor Indonesia
(SI) in a bid to transfer know-how on goods inspections to
Indonesia.
Ramli questioned whether SI could replace the dominant
position of SGS after nine years of operation.
According to Econit, SGS carries out 68 percent of import
inspections and gets 71.1 percent of the total inspection fees,
while SI administers 32 percent of the inspections but receives
only 28.9 percent of the fees.
"What kind of technology do they possess? Those people are
just filling out forms and don't even know when a number of
containers full of toxic waste were imported into this country,"
said M.S. Zulkarnaen, another associate director of Econit and
also an ardent supporter of protecting the environment.
Zulkarnaen, Ramli and Laksamana agreed that it is better for
the government to redefine its policy on customs service and, if
the government agrees, to implement post-audit inspections with
the help of prime intelligence service.
"It's just like paying taxes. Let the business people fill in
the forms themselves. We just do the checking," Ramli said.
All of the three said that Econit is prepared to defend its
research-based analysis by inviting related parties to open
debates with them. (09)