Top mining executive warns against reviving pre-shipment inspection

A top mining executive warned Wednesday the government against reviving the pre-shipment inspection scheme, saying such a scheme would hurt investment projects in Indonesia, including mining projects.

Richard Ness, president of PT Newmont Pacific Nusantara, said in an article published on Jakarta-based Bisnis Indonesia that to improve the country?s export-import system, the government would better improve the quality of the service provided by the customs and excise office rather than rehiring the foreign agency to carry out the pre-shipment inspection.

Ness said in the past, the pre-shipment inspection proved to have caused lots of financial burdens on many investors, including PT Newmont Nusa Tenggara which developed its copper and gold mining project in Sumbawa, West Nusa Tenggara. As such, the scheme should not be revived.

Since the government ended the pre-shipment inspection scheme in 1997, the customs and excise office has fairly well performed its duty and, as long as Newmont Nusa Tenggara is concerned, the office has really helped facilitate the smooth flow of the imports of its equipment. As such, the office should be given the chance to carry out its export and import inspection, Ness said.

?Import delays have never occurred. The customs and excise office has worked with us the very fair way. But now, it appears that with the resumption of the pre-shipment inspection, we shall experience delays and this will impose additional costs on us at the time when the global market is in a difficult situation,? Ness said.

Ness? opinion article came amid the increasing pressure from several parties on the government to revive the pre-shipment inspection.

Some people who favor the rehiring of Swiss company SGS have been intensively using the press to criticize the customs and excise?s performance and to praise the benefits of the pre-shipment inspection.

Ness said those who favor the pre-shipment inspection are mostly middlemen who found their interest was hurt by the customs and excise office.

Ness admitted that the customs and excise office was not clean but he pointed out that the office had a commitment to reforms, citing the sacking of more than 100 corrupt officials this year by current head of the customs and excise office Permana Agung.

Rehiring the foreign agency to carry out the pre-shipment inspection is not only a waste of money for the government but also denies chance for the customs and excise office to show its continued commitment to reforms.

According to Ness, the government has to spend US$250 million to pay the foreign agency for its pre-shipment inspection service annually. This compares to the $27 million salaries paid by the government to 11,000 customs and excise officials in 130 ports across the country.

?Indonesia has to show its determination and demand the customs and excise office to work better. Indonesia must help itself,? Ness said. (*)