Editorial: Privatizing customs service

Wed, 06/04/2008 10:14 AM  |  Opinion

The idea of privatizing our customs service has gained substantial weight in the light of corrupt practices recently uncovered at Tanjung Priok customs and excise office, Jakarta.

The alleged bribery evidence discovered by the Corruption Eradication Commission (KPK) goes to show that the year of bureaucratic reforms at Priok have failed to stop the rot.

The changes -- introduced last year by Finance Minister Sri Mulyani Indrawati as part of her wide-ranging reforms at the ministry -- removed some 1,300 customs officials from Tanjung Priok and replaced them with 800 newly selected officers.

Mulyani then showered the newly-assigned officials with additional perks ranging from Rp 1 million for the lowest ranking officers like security guards to almost Rp 50 million for top-level echelons.

The dramatic increase in take-home income would help prevent the staff from taking bribes and committing corruption, Mulyani said.

But, as it turns out, increasing salaries was not the panacea for the office; Bribery is still the rule of the game, and businesspeople or freight forwarders would accept it as a fact of life and include it in their fixed costs to get goods out of the port quickly or past inspection.

Last week, the anti-corruption body, in an unannounced search of the Tanjung Priok office, found some Rp 500 million (US$54,000) cash in envelopes, bags and drawers, belonging to four officials, which was allegedly from businesspeople wanting fast services.

The discovery was the culmination of a one-month surveillance operation, which included wiretapping customs officials -- as permitted under the anti-corruption law.

The case seems to indicate corruption is already in the blood of many of customs officials.

So when Mulyani took the daring move to root out 1,300 officials with old habits, and bring in new officials from other customs areas, people who knew the office were unfazed.

For them, what Mulyani did was not really rooting out corruption, but simply removing big rats from Priok and replacing them with smaller ones.

Rather than transferring customs officials from other areas, Mulyani should have recruited fresh graduates with integrity intact, and paid them decently.

With this latest discovery, the minister needs to take another look at her reforms initiative at customs. She should impose tighter controls, involving the KPK if possible, to prevent corruption.

But tightening the system wouldn't keep the rats out for long, and keeping in mind the Finance Ministry needs make the Priok office reliable, we suggest introducing full online services to reduce the amount of face-to-face contact between officials and businesspeople.

We understand that any new system introduced at the Indonesian customs office would not be corruption-proof unless we scrap their authority to inspect, as happened in the mid 1980s.

Angered with the deep-rooted corruption of the customs office at the time, then president Soeharto revoked the office's authority and assigned a Swiss-based surveyor company, SGS, to conduct pre-shipment inspections of Indonesian imports.

Then, in the spirit of nationalism, the government -- still under Soeharto -- restored the customs office' authority in the mid-90s. But the officials had not learned from their past mistakes, and returned to their old habit of taking bribes. Old habits do, indeed, die hard.

Judging by the importance of Tanjung Priok -- which oversees the bulk of Indonesia's exports and imports -- Mulyani may need to consider the privatization of the customs service, especially at Tanjung Priok, if reforms fail there again.

As previously, privatizing the customs service would not burden the government because the cost of services would be shared by both importers and exporters. For businessmen, this could be much cheaper than bribing officials, and would bring more certainty to their trade.

Most importantly, we believe privatizing customs would 'kill two birds with the one stone'. It would cut corruption and high costs at the port, while improving services for businesses.

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