Regional Workshop on Trade Facilitation &

Paperless Systems for Agrifood Products

UN Economic and Social Commission for Asia and the Pacific

Bangkok, Thailand, 15-17 December 2014

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STREAMLINING AND AUTOMATING PROCEDURES FOR AGRIFOOD TRADE

Francis Norman Lopez

Streamlining and Automating Procedures for AgriFood Trade

Agenda

• Import and Export Processes in AgriFood Trade

• SPS Exchange

• Facilitating Trade of AgriFood with the Single

Window

• Case Study: Philippines

Typical AgriFood Supply Chain*

* Information Management in AgriFood Chain: Towards an Integrated Paperless Framework for AgriFood Trade Facilitation

Collaboration in Trade • Identifiers: AEOs, Product

Codes • Compliance to import

requirements • Visibility across the Supply

Chain

Case Studies • India GrapeNet • Malaysia Food and

Traceability • Vietnam TraceVerified for

Fish Exports • New Zealand eCert for Meat

Products

Case Studies • US ITDS –GS1 • China eCert, GPS and RFID

Transport • Air, Sea and Land

Case Studies

• Export

– India GrapeNet

– Malaysia Food and Traceability

– Vietnam TraceVerified for Fish Exports

– New Zealand eCert for Meat Products

• Import

– China Tianjin eCert, GPS-RFID

– US ITDS

– Philippines

• Key Success Factors

– Identification of source and products

– Specific testing procedures – Export-Import collaboration to ensure

Certification for compliance to import

regulatory requirements – Accessibility of data for transparency,

monitoring and reports – Government support, possibly with

funding, for sustainability – Tangible benefits to government and

the private sector – Cost effective technical solution

Key Documents in AgriFood Trade

Exports

• Trade Documents

- Commodity clearance, e.g., palm/coconut oil, sugar

- SPS Certificate (Health, Veterinary, Phyto Certificate)

- Catch Certificates (EU IUU Regulations)

- Halal Certificate (Moslem countries)

- Fumigation Certificate

- Export Declaration

- Certificate of Origin

• Supply Chain Documents

- Invoice

- ASN/Packing List

• Transport Documents

- Advanced Manifest

- AWB/BL

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Imports

• Trade Documents

- Import Permit (eg SPS Import Clearance)

- SPS Certificate (Health, Veterinary, Phyto Certificate)

- MAV Import Certificate (Safeguard Measure)

- Request for Inspection

- Veterinary Quarantine, Meat Inspection and Laboratory Certificate

- Certificate of Meat Inspection

- Import Declaration

- Certificate of Origin

• Supply Chain Documents

- Purchase Order

- Invoice

- ASN/Packing List

• Transport Documents

- Advanced Manifest

- AWB/BL

SPS Certificate

• Sanitary and Phytosanitary Certificate

- WTO SPS Agreement

- International Plant Protection Council (IPPC) and the International Plant Sanitary Measures No.12 (IPSM)

- CODEX Alimentarius Commission/OIE

• Issuance of SPS Certificate

- Harmonise SPS measures, based on international standards, guidelines and recommendations

- Safeguard international trade of plants, animals and fisheries and products thereof

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SPS Certification Workflow

8

e-SPS Certification

• Definition - A secure exchange of SPS / eCert Messages from Issuing Authority

(Export) to Quarantine Authority/National Plant Protection

Organisation -NPPO (Import)

• Objectives - Ensure compliance to health, sanitary requirements of exporting and

importing country

- Facilitate compliance and control fraud

- Trade facilitation, cross border efficiencies with advanced

information, reusable data

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e-SPS Features

• Government-to-Government (G2G) Exchange

• Equivalent to paper SPS

• Prior Notice - available prior to arrival

• Initiate pre-clearance processes

• Verification of paper SPS Certificate

• Reusable SPS data - traders, products

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E-SPS Workflow

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E-SPS Initiatives

• IPPC IPSM No 12 - ePhyto Certificate

• AU DAFF e-CERT

• US ITDS GS1

• APEC ECSG SPS

• PAA e-SPS

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IPPC ISPM No.12 : e-Phyto

• Definition

- It is the electronic transmission of phytosanitary certificate

information (electronic equivalent of a paper phytosanitary

certificate), containing the same information and giving the

same guarantee.

• Key Elements

- Message format

- Data Harmonisation (as prescribed in ISPM12)

- Secure transmission

- Integrity, Authenticity of the message

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IPPC: International Plant Protection Convention

ISPM: International Standards for Phytosanitary Measures

IPPC ISPM No12 ePhyto Certificate

• E-Phyto is NOT a “copy” of the Phyto Certificate

• A secured data set conforming to the ISPM12, transmitted securely from exporting to importing National Plant

Protection Office (NPPO)

• Equivalent to a paper Phytosanitary Certificate, and may be

used only if accepted by the importing NPPO

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IPPS ISPM No 12 ePhyto

• Electronic Certificate may be issued where accepted by the

National Plant Protection Office (NPPO) of the importing country

• Specific required provisions

- The mode of issue, transmission and level of security is acceptable to the NPPO of the importing country

- Information provided is consistent with the IPPC Model Phytosanitary Certificates

- The purpose of the phytosanitary certification under the IPPC is realized

- The identity of the issuing NPPO can be adequately established and authenticated

• Available to the relevant NPPO upon consignment arrival

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e-Phyto Certification is NOT ..

• Text processing or other electronic generation of paper

forms (eg. SPS or Phyto Certificate)

• Transfer of electronic version of a paper certificate (e.g.

Certificate in pdf)

• On-line data entry [by exporting authority] in system of

importing country

• National electronic system to facilitate phytosanitary

certification

• National system to facilitate phytosanitary import process

through inspections

16

. . Nico Horn on behalf of the IPPC ePhyto Steering Committee

IPPC e-Phyto http://ephyto.ippc.int/

IPPC e-Phyto Work Groups

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• XML Schema - UN/CEFACT Standards, Schema, Codes

- Data mapping

- Handling mixed consignments

• Code List - Description of consignments

- Standards list: Country ISO Codes, Bayer

Codes, EPPO Codes : List of Plants and Plant Pest

- Botanical names

- Treatments

- Additional declarations

- Product descriptions: categories, sub-class

• Communication Protocols - Methods of transfer, security measures,

validation

• EWG Participants, Sept 2012 Paris

- Steering Committee - D Howell, IPPC Secretariat

- R Lee, NAPPO

- P Johnston, New Zealand

- Nico Horn, Netherlands

- WG1 Coordinator: M Boerma

- WG3 Coordinator: M Perry

- Invited Experts:

- B Cooper, Australia

- S Kirkpatrick, Canada

- M Chen, China

- D Frez, Chile

- K Kaminski, Germany

- L Moret, Netherlands

- L Venter-Wagner, New Zealand

- S Jun, S Korea

Agreed Principles and Recommendations for the e-Phyto Exchange

1. Agreement on definition of e-Phyto Certification

2. All elements for e-Phyto Certification exchange mechanism

will be derived from IPSM 12

3. Universally accepted standards for secure Certificate

exchange, message format and implementation of

procedures will be used

4. UN/CEFACT Schema (data elements, core components)

must be reviewed to ensure consistency with IPSM 12

requirements, and a user guide developed to include an

‘IPSM12 Overlay for the UN/CEFACT Schema’

19 . . 9 Points Summary on Key Agreements during the Plenary of the 3-day Workshop

Agreed Principles and Recommendations for the e-Phyto Exchange

5. During transition periods in implementation, current hard-copy

practices would still apply

6. Rely on IT experts to provide advise on methods for flexible and

secure electronic transfer

7. Initiate a multilateral standardization approach rather than a

bilateral approach with respect to country-to-country negotiations

for exchange

8. Engage developing countries through regional cooperation and

pilot projects and use IPPC for outreach activities, and

9. Develop simple-to-understand communication pieces such as

Background Paper and “Myth-busting” Question and Answers

20 . . 9 Points Summary on Key Agreements during the Plenary of the 3-day Workshop

IPPC e-Phyto Hub

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Current Point-to-Point Model

AU DAFF NZ MPI

NPPO NPPO

NPPO NPPO IPPC Proposal

• Multiple data standards used • Time and cost spent in

implementing bilateral connectivity and exchange of e-Phyto Certificates

HUB

Proposed e-Phyto Hub Model

AU DAFF NZ MPI

NPPO NPPO

NPPO NPPO

• Single data standard used and maintained, in sending and receiving e-Phyto Certificates

• One-time set up to connect to the e-Phyto Hub

Australia DAFF e-Cert

• E-Cert Website (https://apps.daff.gov.au/ecert/default/Welcome.aspx)

- DAFF Biosecurity Internet application for electronic certification of

traded food and agricultural commodities. This application currently

provides electronic certification for Australian exports of Meat, Skins,

Fish, Dairy, Horticulture, Grains, Wool, Eggs and Inedible Meat

- Online search/view of Export/SPS/Health Certificates

- Allows updates on Certificate status: Accepted, Detained or Request

for Replacement

- Allows download of Certificates in XML format (10k)

• Alternative Access Mode to E-Cert Data - Pull data from AQIS via interaction with SOAP interface

- Push data to Import/Quarantine Authority via SMTP and digital

certificates

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US ITDS GS1 Pilot E-Cert

• Toys, Cut flowers, Meat and Poultry

• Global eCommerce Product Catalog

- Granularity of product identification

- Product visibility across borders

- Consumer security

- Cost savings

• Compliance to unique country-by-country,

product-by-product requirements

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Use of GS1 Standards in SCM

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GS1 Standards

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• Global Location

Number (GLN)

• Global Trade

Identification

Number (GTIN)

• Global Data

Synchonization

Network (GDSN)

US ITDS GSW Pilot E-Cert Findings

• 100% of the 21 static attributes or characteristics

assigned to identify and classify meat and poultry

products could be downloaded from a GS1 GDSN-

compliant catalog

• No information technology or security obstacles,

enable re-use of supplier published product

information, with complex product characterisation

• Improved data accuracy and efficiencies (i.e. reduce

product characterisation errors)

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PAA eSPS Exchange Model

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PAA E-SPS Exchange

PAA e-SPS with Advanced Import Permit

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PAA e-SPS with One SP

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PAA E-SPS Exchange

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• e-SPS exchange, with Service Provider

• eSPS with advanced import permit

exchange, with Service Provider

• eSPS with advanced import permit

exchange, with Service Provider on one

country

Take Aways from e-SPS Initiatives

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• Initiatives on e-SPS aims to facilitate

exports, ensure compliance to import

requirements and mitigate fraud

• Evolving e-SPS data standards to

enhance risk management and

traceability, and workflows to facilitate e-

SPS Exchange

• Need to align new initiatives e.g., SWAT,

ASW e-SPS Exchange, e-Phyto Hub, etc.

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Group Exercise

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• What is the current state of SPS in each country ?

- Manual processes, paper-based application, approval and issuance of SPS Certificate; or, Automated or on-going project to automate the SPS

process

- Online access or receipt of e-SPS from issuing authority; Facilitate import quarantine clearance with the use of advanced e-SPS

• What are possible barriers to e-SPS Exchange ? - Management awareness or appreciation of global trends

- Legal or administrative restrictions, requiring enactment of laws, policy issuances and directives

- IT infrastructure (availability, reliability and cost)

- Internal IT capabilities

- Resistance to change

Challenges in Paper-based Processes

• Hardcopy documents

- Daily volume of documents submitted

- Accuracy, consistency of information

• Manual intervention in the review, processing and

approval

- Clerical errors in review

- Human intervention in the approval processes

- Data re-entry to generate reports

• Transparency

- Data visibility, documents in ‘filing cabinets’

- Accountability

- Limited data analysis

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Some prefer ‘IBM’ Systems

Rationale for Automation

• Volume of transactions being processed

manually

• Repetitive processes

• Need to reduce processing cycle time

• Incidence of clerical errors

• Cost savings

• Compliance to requirements - internal, external

• Accessibility of information, reports

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Methodologies

• Business process modelling - Understanding workflows and roles of stakeholders

- Eliminating ‘defects’ in the processes i.e. causing delays or cost

• Document/message and data standardisation - Adopting standards or harmonising data messages, specifications

- Enable interoperable systems

• Modular implementation - Designing the complete workflow/process

- Developing and implementing critical module to generate

impact on the complete process

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Challenges in Automation

• Largely manual SPS processes (export and import)

• Current automation focus on internal processes and

requirements, on the NSW (import)

• Receipt/access to e-SPS Certificate mainly to

authenticate paper SPS Certificate (control fraud)

• Compliance of SPS Certificate to import requirements

• Current legal, policy framework does not provide SPS

exchange

• Agency technical readiness, capabilities

• Multiple message standards used

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More Challenges

• Project Implementation

- Project Plan

- Technical experts

- Funding and substainability

• Infrastructure

- Administrative and legal issuances

- Data communication

- Power

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PH Agri Trade System: Background

• From 2002 to 2008, the Department of Agriculture (DA) had several attempts to

automate their processes;

• Executive Order no. 482 dated 27 December 2005, creating the National Single

Window Task Force

• In 2007, initial implementation of the PNSW using the Licensing and Clearance

System of ASYCUDA

• In 2008, the DA issued directive harmonizing the import procedures of 3

agencies i.e. the Bureau of Animal Industry (BAI), the Bureau of Fisheries and

Aquatic Resources (BFAR) and the Bureau of Plant Industry (BPI)

–The Proposal BIMP-EAGA Pilot electronic Cross Border Information Project led to the proposal to automate the SPS Import Clearance Precedures for the 3 DA Agencies

• In 2009, Pilot Implementation of the SPS Import Clearance

• In 2010, mandatory implementation of SPS Import Clearance and subsequently

followed by the MAV/MAV Import Certificate, Request for Inspection (1st Border)

and Veterinary Quarantine, Meat Inspection and Laboratory Certificate

PH Agri Import Procedures – before 2010

• Centralized manual processes done at Head Offices, in Metro

Manila

–Accreditation/registration of importers and cold storage warehouse

–Submission of application, processing and approval of SPS Import Clearance

(SPS/IC)

–Minimum Access Volume (MAV) allocation and issuance of MAV Import

Certificate

–Request for transfer of delivery of imported meat products to another cold

storage warehouse

–Manually accomplished (hand written) Request for Inspection and issuance of

the Veterinary Quarantine, Meat Inspection and Laboratory Certificate and

Inspection Report (including verification of SPS Certificates and other import

documents)

• Consider 3,400 importers of agri products, average 500 import

shipments daily in 57 international ports, with 200 cold storage

warehouses

Challenges in Manual Processes

• Qualifying importers, suppliers and exporters for accreditation and registration

• Identification and classification of commodities, products

• Document submission, verification, authentication and storage 1.Certificate of Product Registration

2.SPS Import Clearance

3.MAV Allocation and Import Certificate

4.SPS Certificates eg Health and Phyto Certificates

5.Commercial Invoice

6.AWB/BL

7.Import Declaration

8.Port Quarantine Inspection Report/VQMILC

9.Certificate of Meat Inspection

• Collection/payment of fees and issuance of receipts

• Monitoring transport and cargo handling

• Traceability from source to consumer

• Profiling and Risk Management

• Generating timely and accurate statistics

Dept of Agriculture

BAI BFAR BPI

Regional Ofcs

Regional Ofcs

Regional Ofcs

Quarantine Ofc at Ports

Quarantine Ofc at Ports

Quarantine Ofc at Ports

Regulated Commodities, Products

• Bureau of Animal Industry (BAI) – Live Animals, for breeding and as pets – Animal Product and By-Products, eg.

Beef, Port, Chicken and other Meat Products

– Feed and Feed ingredients, Supplements

– Veterinary Drugs, Additives, Supplements

• Bureau of Fisheries and Aquatic Resources (BFAR) – Live Fish – Fresh/Frozen Products

• National Meat Inspection Service

– Meat and Meat Products

• Bureau of Plant Industry (BPI)

– Plant, including ornamentals – Plant Products eg flowers, grains,

fruits and vegetables

– Planting Materials

Customs and Quarantine Clearance Invoice,

Packing List Pre-Alert

AWB/BL

SPS SAD

Lodge

Manual Assess

FAN

Auto Assess

AWB/BL

Start

VASP

AAB

NSW

PASS5 Examine

OLRS

Online Preparation

Electronic Submission

BAI Review, Payment,

Processing & Approval

Printing of Approved SPS

Import Clearance

Quarantine Inspection

RFI

• SPS Import Clearance •MAV Import Certificate • SPS/Phyto Certificate • Import Entry Declaration SAD • Commercial Invoice • Packing List • Bill of Lading/AWB

VQMILC NMIS Meat

Inspection End

Issues Encountered

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• Prior initiatives failed, agencies and IT team were skeptical of success; budget for the project was exhausted

• Engagement of a Service Provider, fee for service paid by

transacting parties • Limited IT infrastructure, proficiency and support • Initial scope was limited to import permit (SPS Import

Clearance); accounting/audit issues on e-payment of agency fees

• Delays in the approval, issuance of directives implementing guidelines

• Deferred implementation by agencies due to change management issues

Major Changes in the Processes

49

• ONLY accredited/registered importers in

database can apply for import permit.

• Import items of importers are pre-cleared, and

uploaded in database. Importers can submit

such items in the import permit; otherwise, they

have to submit new items for inclusion in the

database.

• To address reservations of agencies in the

epayment of agency fees, the advance

deposits (prepaid account) was introduced

wherein the fees would be autodebited from advances

Lessons Learned

50

• Top management support, and middle

management as project champions, is key to

successful implementation

• Importance of business process domain and ICT

knowledge, with flexibility to overcome business

process and technical barriers

• Substantial benefits (reduced cycle time,

availability, reliability, predictability and cost

savings) to garner industry/stakeholders support

• Public-private partnership - collaboration is possible

PH Import Workflow

51

Agriculture Trade System

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• Agriculture Single Window (Imports) adopting data pipeline

model where information added in subsequent processes

• The timing of the import permit (SPS Import Clearance) is critical; it

must be approved prior to loading of cargo at port of origin

• Phased approach, with strong support from the top management

Department of Agriculture

• Potential interface of the Request for Inspection (RFI) had

Customs system been capable

• Final phase, i.e.. Certificate of Meat Inspection/Local Transfer

Permit, enables import traceability from arrival to delivery to

consumer

• Improved risk management and enforcement of compliance to

regulatory measures

Import Processes and Traceability

Agriculture Trade System IOIS, Data Pipeline

AgriFood Supply Chain Primary

Producer

Retail

Permit Apln SPS IC SPS Cert RFI VQMILC COMI

LTP

ProForma

Invoice

PO

Comfirmattion

SPS

Certification Transport,

Customs Data

Quarantine

Inspection Delivery

Source Supplier

Products Quantity

Importer CSW

SPS IC No, Validity

Import Req

Exporter, Products

SPS Certification

Shipper, Consignee, Meat Est No., Shipping Data

(AWB/BL)), Invoice Data

Products/HSCode SPS Ref No

Port Quarantine Inspection

Report

Meat Inspection, Laboratory Certification

Meat Certification, Products Destination

Proposed PH E-SPS Exchange

• Issuance and transmission of SPS Certificates

• Receipt of SPS Certificate and ensuring compliance to import quarantine requirements

KR

NZ

AU SP/ TS

AU DAFF in 2007

BAI BFAR

BPI

BAI

DA Trade System 2014

Online Access to DAFF SPS eCert

PH E-SPS Exchange Model

55

Proposed PH E-SPS and the ASW

56

NPPO/QIA

Exporting

Country Importing

Country

NPPO/QIA SPS Certificate

Exporter Importer

SPS Import

Clearance

Application,

Approval

SPS Notice

SPS Import Clearance/Permit

SPS Status/Change Request

SPS

Certificate

Application,

Issuance

1

4

3

2

E-SPS Exchange Model*

* Pan Asian eCommerce Alliance Model

5

4

IPPC e-Phyto Hub

58

HUB

Current Point-to-Point Model Proposed e-Phyto Hub Model

AU DAFF AU DAFF NZ MPI

NPPO NPPO

NPPO NPPO IPPC Proposal

NZ MPI

NPPO NPPO

NPPO NPPO

• Multiple data standards used • Time and cost spent in

implementing bilateral connectivity and exchange of e-Phyto Certificates

• Single data standard used and maintained, in sending and receiving e-Phyto Certificates

• One-time set up to connect to the e-Phyto Hub

A S W Gateways

PH E-SPS and IPPC/ASW

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HUB

Point-to-Point Model Proposed e-Phyto Hub Model

BAI

BFAR

BPI

AU DAFF AU DAFF NZ MPI

NPPO NPPO

NPPO NPPO IPPC Proposal

NSW

NPPO

On-going tests with DAFF on the receipt of the SPS Cert

Proposed pilot test on the receipt of the SPS Cert from ID, MY, TH

PNSW

DA Trade System

Moving towards e-SPS

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1. Generate awareness and muster support from top

management, highlighting

- Need to comply to AgriFood Trade requirements

- Improved cycle time and reduced costs

- Access real-time information

2. Review of current policies, guidelines and procedures

- Applicable e-Commerce Law

- Amendment of current procedures to allow electronic submission

and processing of documents

- Harmonise forms, adopting standard message, data and codes

3. Assess technical and funding requirements, and internal IT

capabilities, competencies

- Development of an IT Plan, with implementation in stages to achieve

early success and change management

- Work with experts .. able to harness rapidly changing technology

Q & A