Top45 Award for Indonesia's Public Service Innovation Competition from The Ministry of Administrative and Bureaucratic Reform of Indonesia.
Indonesia Gateway (I-Gateway) as Hub for ASEAN Trading Document
The Indonesian Government has initiated “I-Gateway” as Hub for ASEAN Trading Document, enabling electronic data exchange such as certificates of origin to ensure authenticity, reduce paper work and eliminates redundancy. I-Gateway connects both domestically among national agencies and internationally with other countries. It validates and reconciles documents efficiently, to ensure its security as well as business process simplification and harmonization, aiming to higher ease of doing business.
Previously, conventional trade transactions required the submission of physical documents to various government agencies, which have an impact on the timing of the cargo clearance process. This issue raises the idea for ASEAN Member States to implement the ASEAN Single Window, which collaborates with the National Single Window of each country as a hub for to exchange the electronic trade documents. The Ministry of Finance of the Republic of Indonesia followed up on this by initiating the development of “I-Gateway” as a model for electronic data exchange within ASEAN. Domestically, I-Gateway also reconcile and validate trading documents from the Ministry of Trade and Customs and Excise in order to ensure data authentication and business process alignment.
In its implementation, I-Gateway has six main objectives, namely:
1. Procedure simplification to reduces process redundancy, in accelerating customs clearance and cargo clearance activities,
2. Reduce administration cost, postal service fees, and operation cost (third-party fee),
3. Risk profile management application in regards to reduce opportunity of fraud,
4. Eliminate data duplication and human-error in improving data validity and accuracy,
5. Eco-friendly procedure, through reducing reliance on paper-based documents, and
6. Optimizing state revenue
In previous conditions, exporters had to send trade documents to importing countries as a requirement of international trade. These trade documents are then manually validated by government agencies to ensure their authenticity. In this conventional process, there are potential risks such as delays in receiving physical documents in the importing country, which causes goods congestion at the port resulting in additional costs, and manual validation has the potential for human error and fraud.
In the I-Gateway implementation, exporters only need a “one time” data submission to be transmitted through I-Gateway inside the National Single Window System of the importing country. Then, the importing country system forward the electronic data to the related government agencies. Under this mechanism, physical documents are no longer required. In addition, cargo clearance and customs clearance process are faster and its data/information authentication can be guarantee.
Throughout 3 years of implementation, I-Gateway has benefited both parties from private and public sectors. Traders able to take advantage from trade cost efficiency, namely: administration cost, courier fees, and operation cost (third-party fee), with approximately IDR 66 billion savings from total export cost. Whereas, in manual transaction the cost for all of the above process need to be bare by traders in order to enjoy lower trade tariff. Since traders will no longer need to wait for the physical document arrived, I-Gateway utilization able to goods clearance timing for 2 days in average.
Meanwhile, for the Government officials, I-Gateway enables trade data consolidation and traceability under single platform. I-Gateway has successfully issued more than 1 million electronic trading documents, which being exchanged with 9 other ASEAN countries since 2018. The data repository also consider as invaluable assets for the nation in order to conduct evaluation and data analysis towards trade transaction. I-Gateway also proven to optimizing state revenue, by ensuring data/information quality and authenticity, which shown from the document rejection rate due to data errors had decline up to 80 percent.
I-Gateway can be seen as a very flexible mechanism and it is possible to replicate its methodology towards other electronic data exchange for other trade documents, such as: quarantine documents, logistics documents, and other certificates, both in domestic and international. Currently, this mechanism already applied for bilateral transaction between Indonesia and South Korea, China and Australia. Meanwhile, I-Gateway has also succeeded to become the B2G platform for logistics documents integration, in collaboration with other logistics partners in regards to expedite goods clearance from Port.
In the future, I-Gateway has great potency to be replicated in a wider scope as international electronic data exchange platforms, such as: logistics platform, transportation platform and many others.
What Makes Your Project Innovative?
I-Gateway has innovatively transform conventional trading ways in public sector because:
1. It is flexible document types and applicable (multi-format); having clear and standardized data-exchange methodology, that follow international guideline has made it very flexible to be apply internationally. It accommodates manual and semi-manual processes, which made it easy to be utilize by multi entities and platform.
2. It ensure security; I-Gateway applied public key infrastructure to covers its transaction and secured them based on agreed electronic data structure.
3. It emphasizes on transparency and accessibility, I-Gateway support its operational with clear Service Level Agreement, which give certainty towards business community and provide “document tracking” menu to allow stakeholders to access their document status. Moreover, I-Gateway has monitoring dashboard to record each transaction and document sending time with other countries.
What is the current status of your innovation?
As a multi-channel platform, I-Gateway is very flexible in terms of security access and transmission process. Its flexibility has made it possible to be easily replicate by other parties with considerably lower investment cost. In ASEAN, I-Gateway is most utilized gateway other than Thailand, with zero hardcopy documents. More than that, I-Gateway is also the pioneer in establishing bilateral data exchange with non-ASEAN countries.
I-Gateway has been replicate for G2G platform in bilateral data exchange for certificate of origin and customs declaration with South Korea, China and Australia. Moreover, it also facilitate B2G data integration platform to exchange logistics document (delivery order and container release document).
The key learning points are to have an agreement about data exchange term and condition with trading partners, which include agreed business process specification, electronic data structure, including data elements type and quantity as subject to be exchange.
Collaborations & Partnerships
• Partners: Ministry of Trade, Customs and Excise, ASEAN countries, ASEAN Secretariat, traders.
• Public sector, both domestically and internationally, develop interconnectivity from their local system to I-Gateway. They also set up legal framework and business process adjustment.
• ASEAN Secretariat facilitates regular coordination meeting among ASEAN countries to conduct operation evaluation and dispute settlement.
• Traders also actively participated in piloting and evaluation phase.
Users, Stakeholders & Beneficiaries
• Traders, can benefited from trade cost efficiency, to be mentioned administration cost, courier fees, and operation cost (third-party fee). It is multi-channel and flexible tracing access by all related parties.
• Government officials, can benefited from data integration to conduct evaluation and data analysis towards trade transaction. Furthermore, I-Gateway also proven to minimize document fraud by ensuring the data authenticity and accelerate goods clearance timing.
Results, Outcomes & Impacts
Outcome of I-Gateway implementation are:
1. Trade Cost reduction, which include administration cost, courier fees, and operation cost (third-party fee), with approximately IDR 66 billion savings from total trade cost. In ASEAN fora, we conduct regular operation review and survey towards traders to measures its utilization.
2. Goods clearance acceleration, electronic transaction no longer require physical document submission. Document can trace trough Dwelling Time dashboard and shown that goods clearance are faster 2 days in average.
3. Optimize state revenue, it prevent fraud by ensuring data/information quality and authenticity. For example, in textile import fraud case from Malaysia can secure up to IDR 80 million (the value will depend on tariff rate and goods value). The document rejection rate due to data errors also decline up to 80 percent.
In the future, I-Gateway can be apply in wider collaboration scope, which involved more any document type and other trade agreement.
Challenges and Failures
There are several challenges in I-Gateway implementation, they are:
1. Gap in knowledge and infrastructure readiness in each government agencies, both national and international, which then affected the implementation timing and technical issues occurred along the way. Therefore, domestically I-Gateway applied flexible data exchange tools to accommodate various necessity in internal systems from each entities. As well as to align business process among government agencies.
2. Bureaucratic procedure in regulation/rules adjustment that acquire certain period for the policy to be stipulate. In tackling this situation, we conduct High Level Meeting as forum for higher policy maker in order to bypass regulations making procedures, both in domestic and ASEAN forum.
Conditions for Success
o Gaining political will, in regards to have data integration support from higher-level policy maker are mandatory. Therefore, we involve each representative from national government agencies through the formation of Single Window Service Unit.
o National Legal adjustment, to ensure its technical implementation, setting up basic policy is crucial as operational guideline.
o Supporting system in national and ASEAN scope, in regards to harmonize business process and public service readiness among related parties, I-Gateway must have agreed electronic data exchange method, periodical coordination meeting, and sufficient capacity building to assist technical matters consultation by the Experts. Moreover, in ensuring I-Gateway sustainability, an organization must dedicate specific function to support its daily operational.
Currently I-Gateway method has been replicate for G2G platform to conduct data exchange to other countries bilaterally, such as: South Korea, China and Australia. Under this transaction, the type of trading document also expand not only for trade facility documents such as: Certificate of Origin, but also Customs Declaration documents, Quarantine documents and other certificates.
On the other hand, I-Gateway also replicated domestically for Business to Government (B2G) transactions. Specifically to accommodate logistics documents, such as: Delivery Order document and Container Release document, to do integration and validation in expediting goods clearance at Port. This replication collaborate public and private sector, from Customs and Excise, Cargo Owner, Shipping Line, Terminal Operator by utilizing Port System and Shipping Line System.
Out of this innovation we learn experience as follow:
1. It is sufficient to have an independent institution that has clear authority to accommodate aspiration or interests from relevant parties. By having a neutral position, the institution will inspire and encourage other entities to remove silo mentality and sectoral ego.
2. It is necessary to have a clear legal framework and operational guidelines for carrying out the trading activities under electronic data exchange platform, which comply with domestic rules and regulation to ensure the governance from each parties.
3. It is important to have a flexible and secure mechanism (multi-channel platform) to allow all parties to easily participated and be replicated in a wider scope in other trade agreement, which include more complete functions, such as: logistics platform, transportation platform and many others. As a result, through the flexibility, the investment cost can also be reduce.
In regards to further enhancement, National Single Window Agency is currently developing the 2nd Generation of Indonesia National Single Window (INSW) System. This improvement enables Tracking feature of I-Gateway to be accessed in mobile application format, which currently can be accessed through website only.