Initiatives: Information

SGS

Partnerships for efficient government services

SGS, the world's largest inspection and verification company, set up a joint venture with the Government of Ghana to revolutionize the customs and cargo clearance process in this West African state.

Public-private partnerships can offer continuity where public institutions may founder.

Fred Herren, SGS

In a highly competitive global environment, the efficiency and effectiveness of customs and port operations have a significant impact on the economy. This is especially true in developing countries. Cumbersome paper-based processes combined with bad infrastructure and often little respect for compliance can often cause substantial delays at seaports, airports and overland border points. The resulting cost of such inefficiencies is enormous.

In the West African state of Ghana, SGS completely overhauled the cargo clearance process. Through a public-private partnership, SGS established a joint venture company to design, deploy and manage an electronic Single Window system. The technology was acquired from Singapore and the challenge was to integrate this technology into the Ghanaian environment. SGS reviewed and streamlined all clearance procedures, reengineered processes, trained 1,500 people, reinforced physical infrastructure, and then deployed the electronic-based processing system known as TradeNet.

TradeNet, first used in Singapore in 1989, is designed to accelerate and secure the clearing process by interfacing the entire trading community to a single electronic platform. TradeNet retrieves, processes, distributes and integrates data resulting in an efficient, fully electronic-based cargo clearance process.

As soon as the new system started operation in 2002, clearance time in Ghana immediately decreased from weeks to hours and government revenue through import duties increased by 35%. The number of steps required to clear goods was reduced from 13 to 3. Customs document review time reduced from 24 hours to 10 minutes. The Bank payment process reduced from many hours to 5 minutes.

The World Bank cites Ghana's SGS solution for customs as a «best practice» model for other countries.

Today, the Ghana Community Network (GCNet) company interfaces customs to the port, to the airport, to commercial banks, to the Central Bank, to controlling agencies, to the shipping lines, to the freight forwarders, to the freight terminals, to the Ministries. TradeNet currently handles just under a million files per year and interconnects 800 users around the country. With a total initial investment of US $6 million, the system is sustained commercially through a network charge levied on all customs declarations processed by the system. This charge is only applied on imports. Exports, transit, warehousing, free zone and data mining remain all free of charge.

The Ghana solution has been recognized by the World Bank and the World Customs Organization as an example of best practice. Ghana has become the example to follow in the region. It is featured on the website of the United Nations Centre for Trade Facilitation and Electronic Business.

What earned the system its «best practice» accolade? The concept is built on six principles:

  1. Establish a Joint Venture company from the public and private sectors (PPP), to design, implement and manage the service.
  2. Design the overall solution in concert with all stakeholders to ensure that priorities are addressed accurately.
  3. Use appropriate information technology to ensure reliable operation in what is a difficult environment in terms of infrastructure.
  4. Whenever possible, utilize existing infrastructure in order not to duplicate any existing reliable systems.
  5. Monitor and manage every element of the overall solution to ensure a fail-safe design.
  6. Gradually transfer skills and know-how to ensure sustainable capacity building within the government workforce.

The project showed that public-private partnerships can work - in this case providing continuity during a time of political transition. It is unlikely that the government institutions could have carried through the reforms on their own. The "community-owned" concept was widely accepted.

TradeNet is not just computer software. It comes as a package which includes financing, training, infrastructure building and deployment. It pays special attention to customs operations. Lead time from «decision to go-ahead» to first live transactions took two years. It then took an additional year to deploy the remaining sites.

GCNet processes approximately 350,000 customs declarations each year (1,000 to 1,500 a day), representing 98% of all declarations - the rest being some minor land borders) and 6,000 manifests per annum (100%) - a major saving in paper. In 2005, client usage was: 400 clearing agents in 625 locations, 65 shipping agents, 6 private freight terminals and 10 government ministries and agencies.

The TradeNet technology is today fully operational in Mauritius, Saudi Arabia and Panama as well as Ghana and Singapore. In some countries it has set the foundation for a fully integrated e-government platform. In early 2007 TradeNet was also being introduced in Cфte d'Ivoire and Madagascar.

www.sgs.com

Fred Herren started his career with the World Economic Forum where he held several positions between 1980 and 1987 in Geneva. In 1987 he joined SGS S.A. as Vice President of the Economic Affairs Division. General Manager of Unilabs S.A. in 1995, Fred Herren rejoined SGS in December 1998 as Senior Vice President, Governments & Institutions Services. Today, Fred Herren is a member of the SGS Operations Council as EVP of the Automotive & the Government & Institutions Services business divisions.