Digitalization: Haastrup blames hindrances to port automation on importers, customs processes

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The Chairman, Seaport Terminal Operators Association of Nigeria (STOAN), Princess Dr. Vicky Haastrup has blamed hindrances to port automation in Nigeria on customs processes and procedures as well as the activities of importers who under declare cargo to avoid payment of appropriate customs duty.

Haastrup who made this submission while a making a presentation at a one-day town hall meeting organized by the League of Maritime Editors and Publishers in Lagos on Thursday with the theme, “Achieving Effective Digitalization of Nigeria’s Maritime Industry”, submitted that customs processes and procedures needed to be re-evaluated and be modernized adding that situation where there were different tables that one had to pass through did not encourage automation and so, should be discouraged.

She made a case for customs, terminals, shipping lines and indeed, all facets of the ports to be automated noting that “we are not just talking about automation in the ports, we are talking of automation of customs processes and procedures, automation of shipping companies, all participants in the maritime industry.”

“Everyone that is performing one work or the other, we should be at a point when importers do not need to come to the ports before their cargo is delivered to them. Just sit by your computer at home and you just see when your cargo is being discharged, you will pay customs duty right in your home by pressing your phone, thank God we have mobile banking and then we do a one-stop shop. The cargo is delivered to you. We are still far away from that and I am looking forward to a time when we will get that”, she added.

She further posited that despite the tremendous improvements recorded in cargo handling operations and the provisions of marine services by the Nigerian Ports Authority (NPA), consignees and their agents still face numerous man-made hurdles at the port because cargo clearing processes have remained manual pointing out that “customs cargo clearing system in Nigeria, using the words of a former CEO of Nigerian Shippers’ Council, Mr. Hassan Bello, have remained ‘archaic’.

Haastrup noted that while it had now become possible for importers and licensed customs agents to make their declaration, obtain the Pre-Arrival Assessment Report (PAAR) and pay import duties online, the resort to manual processes from the point of cargo examination creates a huge dent on the drive for port efficiency.

According to her, “From the point of 100% physical examination of cargoes, the discretionary powers of customs officers kick in. Negotiation and underhand dealings inevitably happen due to unbridled human contact. The solution to this major obstacle is to drive the clearing process from end-to-end with digital technology. The human interface and the discretionary powers of officers should be taken out of the mix.”

She went on to submit that manual examination of cargoes had assumed the proportion of an endemic sore point in Nigeria’s Customs administration pointing out that the Nigeria Customs Service performed 100 percent physical examination on almost all cargoes passing through the ports which she said was not efficient and constituted a huge drawback to port efficiency.

“The manual inspection by customs contributes in no small measure to high dwell time of cargoes at our ports. It is also the main reason why importers and agents troop to the port daily. This is in addition to breeding corruption through numerous human contacts”, she stated.

She, however, observed that the solution is for the Federal Government to engage the private sector as was done under the previous Destination Inspection Scheme to acquire high-end scanners for use of the Nigeria Customs Service arguing that it was not enough to merely acquire a couple of scanners as government is doing at present.

“A sufficient number of high-end scanners should be acquired to put a definitive end to manual cargo examination. The effective usage and maintenance of the scanners are also critical. Left in the hands of government officials, the scanners may be grounded in no time as it happened before and the system will be reset to the manual era. The services of risk assessment/management companies should therefore be engaged and retained for the purposes of providing, effectively utilizing and maintaining the scanners. If we are truly desirous of creating efficiency at our ports, manual examination will have to be reduced to less than 10 per cent of the cargoes handled at the port in line with international best practices.

“Full automation of the clearing process and the deployment of sufficient number of scanners at the ports will invariably cut down the multiple checks of cargoes by customs and other security agencies”, she further added.

She disclosed that a study conducted by Akintola Williams Deloite in 2017 blamed the high cost of doing business at the nation’s seaports on the Nigeria Customs Service and other government agencies saying that the study stated that customs processes were responsible for not less than 81.7 per cent of the charges incurred by consignee.

She further quoted the study as saying that shipping companies were responsible for 13.8 per cent of the port cost, terminal operators 1.4 percent, transporters 1.4 per cent and clearing agents 1.7 per cent even as she stated that a major reason for high cost associated with customs was manual processes.

Speaking on how the importers hinder automation at the port, the STOAN Chief recalled her earlier position that importers were making under-declaration or wrong declaration because they don’t want to pay the right duty to the government.

She said, “For example, in ENL now, we have plywood, I didn’t know until we started discharging plywood, that there are different types of plywood. There is a particular type of plywood that carry higher rate of duty than others but the importers will declare the one that is of lesser duty. So, what happen? They have problem with customs and customs will say, we cannot take it; you have to go and correct it. Some of them even go as far as Abuja and that is why I am disappointed that we don’t have so many people here. We need importers to be here because they are also creating hindrances to automation, processes in the ports even though customs have their own problems too but we need to balance it. Our importers too are not doing too well.

“Like I said, importers also create this problem because when they don’t do things well, there is room for corruption. If they don’t make correct declaration, it creates room for corruption. So, it is not just customs that should be blamed, the importers also need to know what they are doing to the economy of Nigeria in the ports because the port is the gateway to the Nigerian economy. So, they are also partly responsible not just customs.”

Concluding, Haastrup submitted that customs processes must be simplified and automated to complement the gains recorded through the federal government’s port reforms even as she insisted that the time was ripe to deploy the much talked about National Single Windows and e-customs to check manual customs and multiplicity of customs units deployed all around the ports, the port gates and even on the roads to intercept cargoes already cleared from the port.

“We have been talking of the National Single Window since 12 years ago and we have not been able to get it done with. We said we want to make our ports one-stop shop, we have not been able to achieve it. We talk but when it comes to implementation, you see some people raising up their ugly heads because of personal interest. Personal interest is what is killing Nigeria. The day we put our personal interest aside and work for the interest of the nation, of the Nigerian populace and the down-trodden in this country; that is when our problem will be solved”, she added.

She opined that government must now work with operators to turn the ports to smart ports by deploying customs-driven, port-wide, cloud-based software that would create new operational flows which would eliminate human contacts, expunge all forms of manual processes from the system and help the port function better.

Photo: Princess Dr. Vicky Haastrup, Chairman, Seaport Terminal Operators Association of Nigeria (STOAN).

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