Briefing by Commissioner of the South African Revenue Service Mr Oupa Magashula on behalf of the Border Control Operational Coordinating Committee to the standing Committee on Finance on the Bilateral Legal Framework in support of a one stop border post between South Africa and Mozambique
13 Jun 2012Honourable chairperson and members
Thank you for the opportunity to brief you on the Bilateral Legal Framework between South Africa and Mozambique as a foundation for the establishment of a One Stop Border post between our countries. This is the second opportunity we have had to brief this committee on the Bilateral Agreement and its draft Annexes following our first presentation to you in October last year. We hope today to provide further clarity on the ratification and legislative requirements necessary for the establishment of a One Stop Border Post and to obtain feedback and an “ in principle” approval from the honourable members to allow us to commence the process of signing the Annexures.. Today’s engagement forms an important part of the consultation process which has been underway for some time.
We appear before this committee today not as the South African Revenue Service alone but as representatives of the Border Control Operational Coordinating Committee (BCOCC) which SARS currently chairs and which comprises the various government departments which share responsibility for a variety of important functions at our country’s border posts designed both to safeguard our country and to facilitate the movement of people and goods between South Africa and the rest of the world. As part of this collaborative approach I am joined here today by senior colleagues in the Department of Home Affairs and the South African Police Services. Allow me to begin by introducing the team before you today.
The importance of efficient border management Honourable members, delays at borders posts not only increase the direct costs for all stakeholders involved but stifle opportunities for growth and development – most especially for small businesses. According to the World Bank’s Doing Business 2012 report the more delays in the import and export process, the less likely that a trader will be able to reach markets. This of course negatively affects the ability to capitalise on opportunities, expand businesses and create jobs. The study points out that limited access to international markets can prevent the growth of businesses and economies of scale. Local markets are often small, particularly in developing economies, and trade provides potential for greater output at lower cost. Trade also allows developing economies to become part of global supply chains. Having access to imported raw materials and other inputs is often crucial for businesses, and delays or shortages can affect production.
- Brigadier Anthony Gopaul from the South African Police Services
- Mkuseli Apleni from the Department of Home Affairs
- William Mpye who is the chairperson of the BCOCC
- Kosie Louw, the SARS Chief Officer for Legal and Policy who has guided the legislative process
- And Barry Hore, the SARS Chief Operations Officer
The study estimates that cutting the days needed to clear exports by half could enable a small to medium-size enterprise to increase its share of exports in total sales from 1.6% to 4.5%.
Globally, improving the customs environment is estimated to increase trade in manufacturing by over $370 billion a year in all regions. In our region, the scope for improvement is even higher with estimates that reducing exporting costs by 10% through improvements in the efficiency of the trade process could increase exports by 4.7%. Another study in Sub-Saharan Africa showed that a 1-day reduction in inland travel times leads to a 7% increase in exports. In Africa alone there are currently four One Stop Border Post projects which are either operational or in pilot phase and a further 55 at various stages of planning. The benefits of this are obvious.
Challenges of One Stop Border Posts Honourable members, with such obvious benefits to the host countries and to the users of border posts including travellers and traders, one might well ask why we don’t see more of these shared facilities and why it is taking so long for South Africa to implement its first pilot site. The primary reason for this is the complexity of the international legal frameworks required to allow for the sovereign laws of each state to be implemented within the other state’s territory. Having the two countries agree on an over-arching Bilateral Legal Framework is, of course, just the precursor to a further process of revising the individual pieces of legislation which govern a wide variety of processes at the border. There are at least nine primary agencies involved in aspects of border post management on South Africa’s side of the border alone – each with their own mandate and legislative framework. (As I have mentioned we have the DG of Home Affairs who is also importantly in this context the Chair of the Inter Agency Clearing Forum, who I would now like give the opportunity to explain the various roles of the agencies at the border which the majority are most represented by the IACF Honourable members it is with this in mind that many countries around the world are adopting the concept of a one stop border post in which people and goods are processed and cleared once rather than one each side of the border.
- Reducing border crossing time: The first and most obvious benefit is to halve the time and hassle it takes for goods and people to move between countries. It doesn’t take a process flow expert to work out that having each person stop, find parking, enter a building, clear customs and then clear immigration … only to repeat this process 100 metres down the road is not only time-consuming by highly frustrating and inconvenient for travellers. And you can only imagine how much more frustrating and inconvenient it is when you are asked to unpack your bags at each side of the border.
- Shared logistics costs: Having one facility which is shared by the officials from two countries can significantly reduce the costs of establishing and maintaining border facilities. While obviously shared border facilities need to be larger to accommodate officials from both countries, the costs and overheads of shared facilities are substantially lower than duplicating facilities
- Enhanced cooperation and integrated risk and information management: By working closely together, border management officials from both countries are able to capitalise on other importantaspects of border management efficiencies including on process flows and data sharing.
The chart in the presentation shows the role of the various departments within the border processes. As you can see the process flow at the border typically involves a series of inter-dependent agency processes and a number of hand-offs from the one department to the other. At each port of entry, immigration procedures are required for human traffic and customs procedures are carried out for goods traffic. Each of these procedures requires a careful balancing of the needs of security and the facilitation of the movement of goods and people. The prevention of the illicit movement of goods and people is carried out jointly by the Department of Home Affairs, the South African Revenue Service and the South African Police Service – with critical input from the State Security Agency. At the same time the movement of both people and goods needs to ensure that our agricultural sector and our people are protected from harmful diseases that may be carried over the borders.
These border control functions are conducted by officials from the Department of Agriculture and the Department of Health. The South African Police Services provide critical policing services, the South African National Defence Force provides borderline security without which the border posts themselves become ineffectual; the Department of Transport has an important role to play in regulating the movement cross border transport; the Department of Public Works provides facilities and maintenance; and so the list goes on. Honourable members, coordinating this in one country between members of the same administration is challenging enough. Add a second country, international law and different languages to the mix and I think you will have some idea of the long road we have travelled to get here today. In fact, the idea for a One Stop Border Post with Mozambique was first approved by Cabinet in 1997 and 10 years later gave rise to the Bilateral Agreement on Combined Border Control Posts which was signed between South Africa and Mozambique in September 2007.
Honourable members, the second challenge posed by One Stop Border Posts is one of logistics and feasibility. This is especially true at the Lebombo-Ressano Garcia border post with Mozambique. The most obvious and design for a One Stop Border Post is to create a single facility which straddles the border line and where officials each country sit side-by-side on each side of the border. But the locations of border posts do not always lend themselves to co-location in a single facility. The Lebombo/Ressano Garcia border post is a good example of such an uncooperative topography! To the north is a river gorge and to the south are steep mountains leaving little room for expansion or creating new facilities. This is one reason for bottlenecks which have been created at peak times such as the December holiday period when tens of thousands of travellers travel through the border posts in a matter of hours. To overcome this challenge, the planning teams from both South Africa and Mozambique have come up with a novel solution: we have moved the processing of cargo away from the congested border post. So trucks travelling from South Africa are processed at a designated cargo processing facility 7 kilometres before the border crossing and those travelling from Mozambique are processed at a facility 4 kilometres inside Mozambique. Once cleared, they use a by-pass road to avoid the main border post, further lessening congestion. The border post area itself is then free to handle other travellers in two separate facilities – one for pedestrians and the other for cars, buses and taxis.
Each of these facilities will be staffed by officials from both countries to provide a single border clearance service for travellers and traders. While the design for this was influenced by the constraints of the location, it has led to an unintended positive consequence of segmentation of different categories of travellers each with different risks that allows for specialisation of processes and resources at each point and is hoped will lead to major improvements in both the speed of processing as well as the security of the border post. Progress on implementation of One Stop Border Post Honourable members, so where are we in the process to establish this exciting pilot project? On the legislative framework:
On the establishment of the physical infrastructure:
- We have signed a Bilateral Agreement with Mozambique and Mozambique has ratified the agreement.
- We have drafted the three Annexes to the agreement which:
- Provide a methodology for designating and delimiting all areas;
- Allow for the joint control and management of border activities and clarify the exercise of authority and power within these areas; and
- Deal with the ownership, management and maintenance of shared infrastructure
- We have agreed the texts of these Annexes at official level in both countries
- We are now conducting further engagement prior to the bilateral signature and ratification of the Agreement and the Annexes
- Thereafter, the process of amending the relevant legislation of the various stakeholder departments to incorporate this agreement into domestic law will commence
On operational readiness:
- We have constructed the dedicated cargo facilities at 7km and 4km
- We have completed the by-pass road for cargo
- We have completed the construction of the dedicated pedestrian facility and are now busy with final preparations to occupying it including the construction of fencing and pathways
- We have converted certain old facilities into offices
- We have identified a site where a residential complex will be built. Efforts are underway to secure this site and start design processes
Conclusion Honourable members, we are confident that with the support of this committee we will be able to proceed with the signing and ratification of the Bilateral Agreement and Annexes by the final quarter of this year. This will provide the legal framework and foundation for us to proceed with the phased implementation of the One Stop Border Post with Mozambique. Of course, much work remains. We must still incorporate the effects of the legal framework into the domestic legislation of the various departments and have these amendments approved by Parliament. We must then develop integrated processes with the various departments and with our Mozambican counterparts to give effect to this legislation and ensure all personnel are adequately trained and prepared for implementation.
- We are in the process of drafting the relevant standard operating procedures, policies and process integration
- We have modernised the Customs process at most of our land borders including Lebombo to facilitate enhanced movement of people and goods
- We currently modernising the immigration processes at our country’s border posts
- We are in the process of planning for systems connectivity to exchange data with Mozambique to facilitate seamless processing of goods
Some of this work and preparation is already underway in anticipation of moving forward with this important project. Honourable members, as I noted earlier it and an ‘has been a long road to get to this point. Since July 2010, SARS has been coordinating an inter-departmental process involving legal resources from various agencies and Departments that were mandated to finalise the Bilateral Legal Framework. The National Departments that participated in process have included the departments of Home Affairs, Health, Environmental Affairs, Transport, Public Works, Agriculture, Fisheries and Forestry, the South African Police Service, the State Security Agency and the South African Revenue Service. Other parties consulted during this process included the SA National Roads Agency Limited (SANRAL), the Cross-Border Road Transport Agency (CBRTA), Transnet, both Offices of the Chief State Law Adviser and the Directors General Cluster Committees on Justice, Crime Prevention and Security (JCPS) and International Cooperation, Trade and Security (ICTS). In terms of the bilateral consultations, a mandate was obtained from the inter-departmental process to work towards consensus text with Mozambique and to consult the inter-departmental process on significant changes. From October 2010, the primary departments i.e. the Department of Home Affairs, SAPS and SARS, together with other border agencies consulted extensively with Mozambique and the inter-departmental process, with final consensus text being obtained in June 2011. Much has been learned in the process not only about international cooperation but importantly about inter-departmental cooperation and collaboration.
The first time something is undertaken is always a learning experience and quite often takes longer than anticipated. But this Bilateral Agreement and its Annexes is a critical building block not only for our One Stop Border Post with Mozambique. It will form the foundation and framework for future agreements with Zimbabwe, Botswana, Namibia, Lesotho and Swaziland to implement one stop border posts with these neighbours. The hard work has been done and the foundation laid for an accelerated roll-out of enhancements to our land border posts which we believe will significantly enhance our ability as a country to not only secure our borders but simultaneously provide rapid access to international markets for our people and their goods in support of our national objective of economic growth, job creation and prosperity for South African and our region. In conclusion Chair we trust that you found the briefing informative and would appreciate feedback from the committee whether we can move forward with regard to the signature of the Annexures with Mozambique. These agreements and Annexures fall within the ambit of section 231(2) of the Constitution and will after signature require formal ratification by Parliament and incorporation into the domestic laws of South Africa before the Framework can take effect. I thank you. We look forward to your questions.
Issued by: South African Revenue Service
13 Jun 2012
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