Container Examination Facility (CEF) Project

1. Container Examination Facility (CEF) Project Presentation to Industry PORT MORESBY Thursday 15th November 2012 Mr Ray Paul Commissioner PNG Customs Service

2. Project Background • PNG Customs has a requirement to facilitate legitimate trade and travel, collect revenue and perform vital border protection roles to protect the community from illegal and dangerous goods. • The World Customs Organization (WCO), of which PNG Customs is a member, advocates the use of x-ray equipment as a non intrusive method of examination. • To meet the challenges of globalised trade and to deliver a high service standard to business and legitimate trade while maintaining supply chain security, the acquisition of CEF’s was identified as a core element of the Customs Modernization Strategic Action Plan.

3. Current Project Status • CEF construction has commenced at the Old Lae Airport site with expected completion in 2014. • Two Container X-ray Units (CXU) are currently being assembled in China. • The CEF in Port Moresby will be located Motukea wharf. • The Port Moresby facility will be constructed by the landlord at their cost and leased to PNG Customs. • PNG Customs is committed to delivering this project to the Government and the people of Papua New Guinea by the end of 2014.

4. Current project status - CXU Diagram of the Container X-ray Units currently being assembled in China

5. Design Leverage from Australian Customs & Border Protection: • Experienced Australian CEF Customs officers are providing advice to the PNG Customs CEF Project and Steering Committees. • CEFs in PNG and Australia have similar design features allowing symmetry between safety standards and operational procedures.

6. Design - Facility The CEFs will look and operate similar to Australian CEFs

7. Design – X-ray Scan Hall A container being scanned

8. Design – Examination Hall Unpacked cargo inside an Examination Hall

9. CEF Process • Sea Cargo imports and exports through the Ports of Lae and Port Moresby will be risk assessed through profiling and intelligence. • Selected containers will be transported to the CEF scanning hall for x-ray inspection. • An x-ray scan of containers is a quick process taking only minutes. • The x-ray image will be assessed by trained Customs officers who will analyse the x-ray image. • Based on intelligence, profiling and analysis of the image, the container will be returned directly to the wharf (or container depot) or unloaded for physical examination.

10. CEF Process – X-ray • The image will be analyzed by trained Customs officers. • The Container X-ray Unit has material discrimination software • that can distinguish between organic and inorganic material.

11. CEF Process - Unloading Certain containers will be unloaded by Customs for examination

12. CEF Process - Examination • All containers will be tested for fumigants. • Containers will be partially or fully unpacked by contract labourers. • Cargo will be examined by Customs officers using a range of equipment, tools, x-ray and narcotic trace detection technology. • The cargo will be repacked into the container and be returned to the wharf or a Customs approved container depot.

13. Service Agreements Commercial contract arrangements (Service Level Agreements) will be necessary with: • Stevedores To load and unload targeted containers required for transport to/from CEF. • Transport To transport targeted containers to/from CEF. • Unpack/Repack Provide labour to professionally unpack and repack cargo from selected containers to allow Customs examination.

14. Container Imports TEU Year Source: PNG Ports

15. CEF Throughput • Approximately 2% of import containers will be selected for CEF inspection (container x-ray). A small percentage of export containers will be selected. • This equates to 4 - 5 containers being transported to each CEF daily, with 1000 containers to each CEF yearly. • It is expected around 10 - 50% of these containers will be unloaded for physical examination. • It is planned to x-ray more containers once the system is bedded in.

16. Costs • The PNG Government are funding initial start up costs including ongoing lease arrangements. • PNG Customs and the Importing industry will fund ongoing operational and maintenance costs. • PNG Customs will further consult with industry regarding the details of these ongoing costs. It is likely the CUSTA (import entry fee) will increase.

17. Customs Key Service Standards • We aim to assess most of your Customs entries within 2 days of lodgement. • We will inform stakeholders or their representatives that their cargo is available as soon as possible after the examination is completed. • We will advise you if there are any delays in releasing your cargoes after the inspection and explain the reasons for delay.

18. Hours of Operation • Week days • 0745 - 1606 hrs

19. Benefits • Minimal disruption to import and exports supply chain. • Increased levels of sea cargo examination than currently possible. • Increase detection rates of prohibited goods. • Increased detection rates of undeclared or misdescribed goods leading to increased revenue collection. • Enhanced community and industry confidence in Customs capability. • Deterrent factor for criminal entities and deliberate revenue evasion practices. • Improved compliance, timeliness and accuracy of sea cargo reporting by industry.

20. Questions PORT MORESBY CEF SITE - MOTUKEA