Customs faces huge payouts
The Australian - Simon Hayes
NOVEMBER 15, 2005

 

 

CUSTOMS could face a substantial compensation bill as it cleans up the mess left by the rollout of its Integrated Cargo System.

Brokers and freight forwarders estimate their industry alone has lost at least $78 million in the past month.

Customs is processing claims that it has received by email, but will not say how many have been received.

Last month it promised to compensate importers on a "case-by-case basis" for storage costs incurred while containers were sitting on the wharves.

A Customs spokesman refused to reveal the cost of "transitional arrangements" put in place to handle the fallout from the ICS debacle, including 200 additional call-centre staff and clearance teams at ports.

Industry representatives met with officials from the Department of Prime Minister and Cabinet last week, as well as with Customs minister Chris Ellison, discussing compensation and moves to fix the system.

It is understood Customs may consider calling on its insurers to finance the package, which could blow out to hundreds of millions of dollars if importers, wholesalers and retailers claim for lost sales and staff overtime.

"The Prime Minister's Department has taken an interest in this issue due to the abnormal amount of press," Customs Brokers and Forwarders Council of Australia executive director Stephen Morris said.

"They are looking holistically at its overall effect on the economy."

The compensation package could fall on the desk of Tax Commissioner Michael Carmody, who leaves the Tax Office in January to replace, Lionel Woodward , who is retiring, as chief executive of Customs.

Mr Morris, of the brokers' council, said the Government was still discussing the question of compensation.

"The Government has not signalled its final position on compensation," Mr Morris said.

"There are other issues such as loss of sales still on the agenda to be addressed.

"How high is this and how long is this, who knows."

Small brokers have been particularly hard hit.

"They have a cash-flow problem," Mr Morris said.

"You can't run a business for long like that."

Brokers say the situation on the wharves is worse than Customs has admitted, with substantial delays still being experienced.

Customs has trumpeted its success in clearing containers from the wharves, but brokers claim many have simply headed off-site.

"I flew over the Port of Brisbane , and the wharf looked fine," Mr Morris said.

"But the depot behind the wharf was full.

"Containers were block-stacked four high."

Australian Federation of International Forwarders executive director Brian Lovell said workarounds were keeping the system going.

"There haven't been any major systems improvements," he said. "Many of those will happen in the first week of December, but some are eight months away."

The Australian

COA Comment; If this project was in private industry – those responsible would have been sacked. No matter how often the Senior Manager swapped his staff round to muddy the ‘Responsibility Pool’ private industry would make sure that the Senior Manager the others responsible were identified and dealt with.

But not in the Public Service, and certainly not at the senior management ‘club’ level.  The only people who are seen to be capable of fault, are junior staff or a single manager who can be separated from the club and held to account.

The Customs administration has trolled through emails and phone records to see if they can identify and charge some junior officers who have tried to make sure that the public gets the truth about the functioning of the ACS . But yet upper management can lead the Agency from folly to folly, at enormous expense and inefficiencies and obscure the line of responsibility to avoid being held to account. By any view that must be administrative corruption, misuse of office and procedural deception. Yet nothing happens – no matter what it costs the public.