Importers, unlicensed wharves targeted in gov’t crackdown on the entry of illegal and unwanted goods into the country as the gov’t works to address severe revenue loss through lack of proper checking on unloaded imported goods at sufferance wharves
THE Government has trained its guns on importers and owners of unlicensed wharves in a major crackdown announced by the Minister of Finance and Treasury, Manasseh Sogavare.
Importers have been targeted for allegedly unloading consignments at undeclared seaport wharves. Operators of undeclared wharves have also been put on the radar in warning issued by Minister Sogavare on 8 August.
The Minister’s warning applies to “all business houses, licensed Customs Agents, NGOs, donor partners and individuals.”
“This means that goods imported from abroad and transported by ships into Solomon Islands will only be unloaded at any of the three declared international seaports, namely the two Solomon Islands Ports Authority (SIPA) ports in Honiara and at Noro (Western Province) and Leroy Wharf port at Ranadi, East Honiara,” Minister Sogavare warned in a press statement last Friday.
The Comptroller of Customs, Solomon Islands Ports Authority [SIPA] and Solfish Company which operates Leroy Wharf – the nation’s first privately owned and run wharf – have all been urged to enforce the Minister’s clean-up instruction.
The Ministry, not the Hon Minister, warned “it will closely monitor the implementation of the Minister’s instructions and will take appropriate measures to correct any willful deviations.”
Last Friday’s warning follows a similar directive given to the Comptroller of Customs on 29 July this year. In it, the Comptroller of Customs was told “not to allow the unloading of any imported goods from abroad, and transported by ships into Solomon Islands at any sufferance wharves either at Ranadi industrial area, or elsewhere in the country.
“While the Ministry of Finance and Treasury acknowledges the Comptroller’s powers under Section 2 of the Customs Act (CAP121, the Government for National Unity and Transformation (GNUT) is also conscious of the potential loss of government revenue through lack of proper checking of unloaded imported goods at sufferance wharves,” the statement said.
Both SIPA and Solfish Company Ltd that owns Leroy Wharf Port have also been informed of the Minister’s warning, which highlighted the need to ensure imported goods and items from abroad that are transported by ships are unloaded only at any of the country’s three international seaports.
“The Minister’s instructions are to ensure all imported items from abroad and shipped into the country are thoroughly monitored, checked and recorded. The action is also consistent with the Government of National Unity and Transformation (GNUT) policy objectives for the Ministry of Finance and Treasury.
The government was also concerned about the possibility of “illegal and unwanted items entering the country through such means.” But the government has turned a blind eye on what was going on.
As far back as April 2021, Solomon Ports warned authorities of what was going on.
“In terms of exports, the GNUT maintains the current practice of loading only round logs and mineral related products for exports at sufferance wharves as and when the need arises,” the statement said.
“The GNUT is aware that there are weaknesses in our system of checking the loading of round logs for exports at sufferance wharves in the country.
“The government is closely monitoring the use of sufferance wharves around the country for loading of round logs for exports and will take necessary actions to centralize the export of round logs from selected wharves as part of its revenue enhancement measures when required.
Minister Sogavare said the government is also concerned that some companies have built sufferance wharves at Ranadi and Henderson seafront areas without first obtaining an environmental impact assessment (EIA) report and formal development consent from responsible authorities.
“Wharf and port development and associated supporting infrastructures or facilities are ‘prescribed development’ in terms of Section 16 of the Environment Act 1998. Wharf or port development is also a category 9 development regarded as public works under the Act.
“Hence, it is statutory requirement under section 19(1)(b) of the Environment Act for a development consent to be obtained from the Director of Environment before such development started.
“While GNUT recognizes the importance of business development to grow the economy and provide employment opportunities for our growing populations, it is also important that companies wishing to engage in such development projects also comply with the country’s laws.
The Ministry is also aware that both the Honiara City and Guadalcanal Province Planning Board have not approved or issued proper business licenses for the operation of such facilities,” the statement said.
It also clarified how Leroy wharf came into existence. It was established by the Minister of Infrastructure Development (MID) by virtue of Section 4 of the Ports Act (CAP161) … “to provide international seaport services for the Honiara business community, and for the country as a whole to compliment the services provided by the SIPA Ports in Honiara and at Noro, Western Province.”
The declaration was published in Legal Notice No. 87 and Legal Notice No. 88 on 18 December 2023.
Leroy wharf has yet to issue a gazetted tariff notice – a requirement by the Ports Act under which Leroy jetty was established.
“This is a potential loophole for loss of government revenue as no one knows what the company collects in charges and fees from foreign bulk carriers using the port. It’s a pandora’s box,” observers told Solomon Star.
The problem that Minister Sogavare is tackling is not new.
In April 2021, SIPA, a State-Owned Enterprise (SOE) and a National Asset at that, warned it was losing Millions of dollars in revenue with what it described as “the ongoing deliberate actions of breakbulk ships using the Leeroy Jetty to avoid paying due port charges” to SIPA.
It was reported at the time that the Break Bulk Carrier ‘Ocean Great’ unloading cargoes at the Leeroy Jetty, resulted in “minimum of $1,045,671 loss to SIPA, and has deliberately avoided berthage, stevedoring, anchorage, and other essential port dues and fees.”
“The Jetty is within SIPA’s Pilotage District, as stipulated under the ‘Ports Act’, Cap 161, Section 5’, this specifies compulsory pilotage into Solomon waters. Vessels to Leroy jetty rarely take a pilot on board to bring the ship to position.
“How do these vessels and the agent breach the country’s Ports Act? Why doesn’t the Ports Act apply to Leeroy wharf and break-bulk carriers using their services? In cases which the vessels had a pilot on board, the agent disputed paying the pilotage dues after getting the services from SIPA.
“Has Leeroy jetty been declared as a sufferance jetty or an informal secondary international port to accommodate breakbulk carriers and carry out international trading? Who has given this approval to carry out international trade through a sufferance jetty? Where is ISPS clearance for this vessel and has this facility got an approved port facility security plan approved by the designated authority?
“SIPA questions why the relevant authorities continue to turn a blind eye and allow Leeroy Jetty to continue international operations which has the potential to destroy the future of a prominent state-owned enterprise employing more than 500 staff and help support more than 8,000 family members,” SIPA said in a statement published on 15 April 2021.
At the time, SIPA said that the vessel Ocean Great was discharging “breakbulk cargo for some of the prominent business houses, construction companies, hardware stores, and for some diplomatic agencies in Honiara.
“Such activities will continue to impact SIPA’s revenue, and the authority is concerned of its future sustainability which may result in seizure of all future investments on critical infrastructure upgrades both at international and domestic terminals, finally closure of port services.
“Therefore, SIPA is calling on relevant authorities to take actions on this activity, as it is not only in the interest of Solomon Ports, but the country’s economy in general” unless it is “the making of another silent takeover of the country’s oldest SOE,” SIPA warned.
By Alfred Sasako
