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Prosper Ndlovu Business Editor—-
WITH only two days left before the implementation of the imported product(s) inspection under the Consignment Based Conformity Assessment (CBCA), captains of industry and freight forwarders have petitioned the government seeking a review of terms in the agreement. The government through the Ministry of Industry and Commerce recently engaged Bureau Veritas (BV), a French company, to provide inspection services under CBCA starting on May 16.
The move — aimed at curbing hazardous and substandard imported products — has sparked alarm in business circles.
While companies with products already at sea have been given up to September 14 to conclude their deals before application of new regulations, businesses feel the whole exercise is faulty.
Inspection fees would range from 0,50 percent to 0,70 percent of the free on board (FOB) value of the consignment to be inspected, it has emerged, while the minimum amount has been pegged at $350 with the maximum at $7,500.
Business associations have expressed strong reservations over the whole arrangement, which they feel has far reaching consequences for their operations and the country’s economy at large.
Confederation of Zimbabwe Industries (CZI) president Charles Msipa said the scope of CBCA should be reviewed urgently to accommodate business interests.
“We’ve expressed strong reservations about the scope of implementation of this move. It’s right to apply quality testing on specific finished products but for it to cover raw materials, it’s too broad and the charges are excessive,” he said.
“We’ve registered our reservations with the government and sought audience with the Minister of Industry and Commerce (Mike Bimha). There should be a defined list of products and the charges should be interrogated.”
In its position paper issued yesterday, the Association of Businesses in Zimbabwe (ABUZ) said the CBCA programme was “unilaterally imposed on virtually every importer in Zimbabwe” by the Ministry of Industry and Commerce in direct opposition to the principle of reducing costs of doing business.
“Businesses are not against the importation of quality products into the country and would not want the country to become a dumping ground for substandard products, but while we applaud efforts by the government to curb the influx of cheap substandard imports on the market, the imposition of pre-shipment inspections on correctly registered, legitimate duty and tax-paying importers, brings with it a raft of challenges and as yet, unanswered questions,” said ABUZ.
“The entire Zimbabwean business community and ultimately every citizen is directly; or at best, indirectly affected by this imposition.
It’s for this very reason that questions have been, and are continuing to be asked of the imposing authorities; and a number of points need to be emphasised, while others require in-depth explanations.”
It said the CBCA would, instead, add costs to an already over-burdened consumer.
“The steady decline in the manufacturing industry has led to many companies subsidising their income by importing goods deemed necessary for their survival.
“The projected inspection programme if imposed in its current format will prove disastrous to these companies and will result in further job losses,” ABUZ argued.
It cited lack of thorough consultations with businesses, raised questions on transparency by B V, sought clarity on time allocations for inspections, implications of inspection fees on Zimra operations, legality of the move and its conformity with Sadc and Comesa agreements
“The legal framework is already in place at the point of entry for Zimra to determine all of what appears to be duplicated in advance by Bureau Veritas — at far greater cost to the importer and country,” said ABUZ.
“We reiterate, that while quality might be in question, every importer reserves their own right to contract companies such as Veritas privately, to ensure compliance with standards; but a blanket resolution seems excessive — especially with reputable international brands coming from ISO accredited manufacturers.
“On the basis of the above, we respectfully submit that implementation should be immediately suspended pending a full, objective investigation by an impartial body, taking every stakeholder’s opinion into consideration; at the same attending to an impact assessment on the downstream implications to the economy. The overall effect on the economy could prove fatal if this is not carried out.”
The International Freight Forwarders’ Association of Zimbabwe (IFFAZ), in a letter addressed to the Office of the President and Cabinet dated April 29, a copy which was shown to Chronicle Business, said a blanket implementation of CBCA would cripple business operations in the context of a poor economy and sanctions.
The association said it was not proper for the government to engage B V, whose parent country (France) “has never done anything significant” to assist Zimbabwe bust economic sanctions imposed by the West and its allies.
IFFAZ also said the CBCA would compromise the Look East policy and affect many businesses that rely on raw materials and other products from countries such as China.
“What guarantees do we have that this French company will carry out its mandate fairly, especially with regards to products from China?” it said.
Estimates indicate Zimbabwe imports in excess of $6 billion worth of goods annually and this means, according to IFFAZ, that Bureau Veritas would rake in excess of $30 million in inspection fees alone.
“The net effect of this programme to the ordinary person is an increase in the purchase price to take into account inspection fees and Zimbabwe does not need this at this point in time,” said IFFAZ.
“If allowed to commence (CBCA) will make a bad situation worse by making it very difficult for Zimbabweans to do business in the country.
“Businesses are reeling under huge costs of doing business ranging from high labour costs to a myriad of statutory levies and adding this one is like condemning business to the death row.”
Minister Bimha could not be reached for comment on his mobile phone.
B V signed a four-year interim contract pending establishment of a Zimbabwe Quality Standards Regulatory Authority.
Imports impact negatively on the economy in general and have been blamed for hampering the successful implementation of Zim-Asset, particularly competitiveness of local industries.
Online Reporter