Border Trade in Danger at Beitbridge
Border Trade in Danger at Beitbridge
In the wake of all the damage caused by the border authorities trying to block Covid-19, the freight transport industry faces yet another series of administrative crossed wires in the development of a One-Stop Border Post Policy (OSBP) focused on Beitbridge, warns NICK PORÉE.
The Border Management Act 2 of 2020 (BMA) (Gazette No. 43536) was a dubious policy measure to shift the control of borders to the Department of Home Affairs (DHA) from Customs. The recently published OSBP Policy reflects a definite bias to the control of persons, not goods, with minimal apparent recognition of the critical role of cross-border trade for the economies of the region.
The policy document gives no indication of the extent to which freight policy has been aligned with Zimbabwe, which is also considering an OSBP development policy in collaboration with Public-Private-Partnership (PPP) developers. This is a critical omission, as the most important part of the OSBP process is the alignment of trade procedures and the design or modification of infrastructure to match the processes to be performed. Failure to do this planning in detail dooms the installation to perpetual problems.
A very comprehensive review of the OSBP Policy by a few concerned private sector organisations was collated by the SA Association of Freight Forwarders (SAAFF) and submitted to the DHA on February 26. The document analyses the defects in the policy document from the freight and trade perspective, and underscores the fact that the OSBP concept does not offer a “silver bullet” to future efficiency and should in fact be bypassed to implement SMART corridor technology.
Efficient implementation of technology requires definition of procedures based on the World Customs Organization (WCO) guidelines, and integrated planning between the trade authorities, customs and the private sector freight transport industry (both clearing and forwarding agents and carriers). The goal is seamless borders such as between USA and Canada where border times at Buffalo (NY) to Erie (Ontario) average nine to 12 minutes. This compares to three to five days at the north-south corridor borders, including Chirundu.
There are many critical issues involved in OSBP development processes, as evidenced by the time and cooperative interstate planning that has led to successful OSBPs in the East African Community (EAC), compared to Chirundu. The recent Common Market for Eastern and Southern Africa (COMESA) investigation by Mike Fitzmaurice of the Federation of East and Southern African Road Transport Associations (Fesarta) led to the adoption of widespread recommendations to correct the planning and design deficiencies at Chirundu, which have hampered the effectiveness of the border and cost industry billions of dollars since its conversion to OSBP in December 2009. The infrastructure and operational upgrades will be funded by the European Union (EU) on both sides of the border.
Further north the redesigned border at Kasumbalesa had a system overhaul in November 2020. Sponsored by the German Society for International Cooperation (GIZ), the project saw the introduction of a Single Window System linking the ASYCUDA (Automated System for Customs Data) IT systems and giving the Zambia Revenue Authority (ZRA) and Direction Générale des Impôts et des Domaines (DGID) access to each other’s systems and the sharing of information, thereby allowing pre-clearance on both sides to take place before trucks arrive at the border. This has done away with queuing at the border and created a smooth flow of traffic across the border in both directions, which illustrates the importance of appropriate technology and intergovernmental coordination as well as infrastructure upgrades.
The South African Revenue Services (SARS) is completely aware of all the implications and the WCO-recommended systems but is hampered, first, by the fact that most corridor authorities in the region have a primary focus on revenue collection, not processing efficiency; and secondly by the lack of coordinating structures in commercial road freight. The OSBP Policy gives no evidence that these critical issues have been appreciated.
The lack of industry coordination stems from the defective regulatory framework created in South Africa and exported throughout the region. When commercial road freight was deregulated in the 1980s only traffic regulations were promulgated (National Road Transport Act), and they do not include regulation of entry to the industry, so any individual can become a carrier without qualification.
There is no record of operators, their drivers or vehicles, and no monitoring of compliance (in all countries). In South Africa 60% of freight vehicles are defective, large numbers of drivers have illegal licences and very few have ever had professional training, and very few entrants to the industry have any qualification to operate. All these factors were addressed in the Road Freight Strategy for South Africa approved by Cabinet in 2017 but without further action.
The same recommendations were made to Southern African Development Community (SADC) in 2010, that the “quantity” (supply) regulations and cross-border permits in the interstate bilateral agreements should be scrapped and all countries should focus on “operator quality” as the basis for a liberalised and monitored cross-border transport regime for the future. The principle was subsequently proposed to the Tripartite region of 27 countries and accepted for adoption, with funding by EU.
The process of developing the Tripartite Transport and Trade Facilitation Program (TTTFP) includes a Multilateral Cross Border Road Transport Agreement (MCBRTA) between all member states. The creation of the operator accreditation, registration and monitoring system (TRIPS) will provide the necessary basis for coordination of operating procedures with the customs authorities.
It will also hopefully see support for an effective regional association – such as the International Road Transport Union (IRU) in Europe, Road Haulage Association (RHA) in the UK, American Trucking Associations (ATA) in the USA – which can work with the authorities. The TTTFP system is in complete harmony with the recommendations of the RFS and the TRIPS registration system could be used to advantage in South Africa.
The Department of Home Affairs’ OSBP policy document does not give any indication, or reassurance, that the promoters have any knowledge of the abovementioned broader issues involved, or the desperately need revitalisation of the cross-border transport and trade environment. This is urgent if South Africa is to retain a prominent position in regional interstate trade, as it is already losing extensive import-export trade to Beira, Walvis Bay and Dar es Salaam. This loss will accelerate for as long as we have stultified decision-making, restrictive regulations, and the poor service of state-owned monopoly logistics providers.
The high-level trade and economic issues are too important to South Africa’s potential benefits from the African Continental Free Trade Area (AfCTFA) to be squandered by parochial or ill-informed decision-making.