This is the first of a four-part article dealing with the realities and approach to setting up a Customs administration within a Revenue Authority. I hope others will find it of interest given the widespread restructuring of customs administrations across the world today.  In fact, it would seem that a Revenue Authority approach is old fashioned by comparison to how some customs administrations are nowadays being ‘tethered and feathered’ in the name of  Border Security and the combatting against International Terrorism.

My home country South Africa is no new entrant in the arena of ‘Customs Modernisation’. At least a decade of evolving developments and incremental improvements have realised an organisation which has a semblance of 1st world customs capability – particularly in its endeavours to automate processes and business interchanges with various traders, operators and government organizations. It has however experienced difficulties  in regard to organisational and management maturity and capability. A dearth in managerial skills and basic discipline have prevented the development of sufficient capacity to administer controls over the country’s vast land and sea borders spanning some 8000 kms.

What is abundently clear is that ‘modernisation’ of a customs administration is dependent upon its mandate and positioning within the government structure, as well as the drive and inspiration of those that are charged to lead it. Customs, here, is a component of the South African Revenue Service (SARS) – based on the World Bank’s ‘revenue authority’ model. From a technological perspective the ‘revenue authority model’ made it possible for Customs to leverage access to much needed funding which was non-existent while it was a stand-alone Department under the Finance Ministry. Furthermore, a bigger expenditure budget provided much relief to cash-strapped staff who, in within a relatively short period of time, realised a significant improvement in their salary packages and benefits. In some cases the result meant as much as a 100% increase.

However, once the novelty of a ‘semi-autonomous parastatal party’ dwained, managing such multi-facetted revenue authority and maintaining its initial fervour proved very challenging indeed. The first attempt at a single agency management structure consisted of existing managers, i.e. people with 20+ years of experience and more. Feverish attempts to forge integration resulted in the polarisation of the Tax and Customs disciplines. This state of affairs continued until an ‘outsider’ was appointed to lead the organisation and bring it in line with the desired objectives of the new democratic government. Thus the evolution of SARS was to witness a fundamental shift in direction where the term ‘modernisation’ gave way to ‘transformation’. The latter being more politically appealing in that it emphasized a human culture change – to redress the so-called social inequalities of the country’s past history –  ahead of business improvement and efficiency.

The die hard experienced Customs’ campaigners (managers) saw the writing on the wall and within 6 months only a single senior manager remained. Some 900-odd customs and excise officials were left leaderless and demoralised. Nonetheless, the survivors  battled along with an unwavreing hope that things would improve over time, in their time. South Africa was a country under change. SARS was not only part of this journey, but the leading public sector enforcement agency. Telecommunications (Telkom SA) and the state owned port, freight and logistics enterprise (Transnet) were likewise, at the time, running a similar path towards operational autonomy.

True to form, the international donor agencies made inroads with government and before long what seemed as a lucrative opportunity to re-structure SARS Customs turned out to be a 5-year consultant’s paradise. The British tax payers had been lobbied to sponsor a R100 million loan (grant, excuse me) towards Customs Modernisation. Instead it turned out to be little more than a job brokering exercise to enrich foreign companies and provide hours of fantastic sunshine to the fortunate UK customs officials assigned to ‘uplift’ the impoverished peoples of this land. Let it be noted that most of the visiting ‘experts’ were very well meaning, but the lack of real knowledge transfer and the ability to affect real improvement casts serious doubt on the abilities and effectiveness of international missions in developing countries. [Over the last 10 years, I can without doubt vouch for the fact that most foreign organisations are more intent on gleaning insight and knowledge from this administration as opposed to enlightening it.]