PVoC: A solution to imported substandard goods in Tanzania

Mwalimu K. Mbega
Senior Planning Officer

The high cost of quality and genuine products Tanzanians face in the market has created an insatiable demand for cheap products. No wonder the country has become a boom market for imported substandard goods and used goods which mingle with and often overwhelm the market for new and standards goods. This has generated a fertile ground under which substandard goods have gained popularity.

Substandard goods are mainly caused by high cost of genuine goods, grid importers who produce low quality products and sell them at higher market price, high demand of various products compared to supply and many other deliberate as well as non-deliberate factors.

Substandard and counterfeit goods have been a problem in the country, and according to the Confederation of Tanzania Industries (CTI) the government incurs losses of between 15 and 25 per cent of the total domestic revenue annually, and between Tanzania Shillings 540 billion and 900 billion (or $343 million and $566 million) annually in tax evasions related to counterfeits and substandard goods. Most of these counterfeit goods come from China, India, United Arab Emirates (UAE), Indonesia, Taiwan and Thailand.

To curb the influx of substandard imports, various countries worldwide have been taking different measures. One of such measures is the Pre-shipment (or Pre-export) Verification of Conformity to Standards (PVoC) – a conformity assessment process used to verify that imported products are in conformity with requirements of applicable standards before shipment to a destination country. The countries currently using PVoC include Angola, Bangladesh, Benin, Burkina Faso, Burundi, Cambodia, Cameroon, Central African Republic, Comoros, Republic of Congo (Brazzaville) and the Democratic Republic of Congo (Kinshasa). Others are Cote d’Ivoire, Ecuador, Ethiopia, Guinea, India, Indonesia, Iran, Kenya, Kuwait, Liberia, Madagascar, Malawi, Mali, Mauritania, Mexico, Mozambique, Niger, Senegal, Sierra Leone, Togo, Uzbekistan and many other countries including countries in the first world.

PVoC in Tanzania

Tanzania’s free market economy, globalization, capitalism and laxity on policy have fuelled the prevalence of substandard goods in the market. The problems of substandard goods in the market have been with us for a long time now. If left unattended, unsafe and unreliable products can cost our country billions of Tanzania Shillings each year through replacement costs for products that do not last as long as they should, and also in compensation due to injury, death or damage to property. As a result of this, Tanzania like many countries around the world is now implementing and enforcing robust safety standards to ensure that products imported, sold and used within our country are safe.

PVoC was introduced on February 1, 2012 in line with Section 36 of the Standards Act No.2 of 2009 as one of the major solutions to curb the importation of substandard goods which without doubt are detrimental to our health and the economy in general. Before PVoC application there was Destination Inspection (DI) which started in 1999 as a major means of verifying imports quality. This was done at the ports of entry. Shortfalls in the DI paved way for PVoC. 

Tanzania consumers have the right to consume quality products which they purchase with their money. This necessitated the introduction and implementation of PVoC so as to wipe out substandard products from the market.  PVoC is implemented through third party contractors working on behalf of TBS. The partners are Bureau Veritas of France, SGS of Switzerland, and Intertek International Ltd of United Kingdom.

Conducting PVoC does not mean abandoning the Destination Inspection (DI), though. DI is conducted where necessary either to verify the work of PVoC agents or to check the quality of the goods not covered by PVoC.  Application of these schemes goes together with utilization of laws governing quality of imported goods. The law provides that traders caught selling or off-loading substandard products should be severely punished, while such goods are confiscated and destroyed.

How the PVoC scheme operates

Pre-shipment inspection is inspection of goods being exported prior to the shipment by a mandated Pre-shipment Inspection Agency. A PSI agency carries out verification of quality, quantity, price (including currency exchange rate and financial terms in case of Revenue Authority) and customs classification for the destination country and then issues a certificate with these details. Also the scope of a PSI agency includes packaging and marking and supervision of loading for commodities and materials like metals, scraps of metals, papers, plastics, sugar, food grains, cashew, coal, ores, minerals, petroleum products, timber and many others. In international trade most of the countries today require pre-shipment inspection. It is virtually impossible to get customs clearance in a “member country” for goods without CoC. The term “member country” here implies any country which is party of WTO and other Multilateral Trade Agreements and is defined as “a Member of which the government mandates the use of PVoC.”

PVoC evaluation since its implementation

During the short period of PVoC implementation in Tanzania, there have been mixed feelings on whether the scheme fits the intended purpose or not. As a result, TBS decided to conduct a study to solicit information from various stakeholders on PVoC performance since its implementation.

The objective of the study was to assess the effectiveness of PVoC since it was introduced in Tanzania in February, 2012. The researchers looked on whether PVoC had helped to reduce or prevent substandard products from entering the Tanzanian market, the data collected in this study covered the period of only eight months.

A sample of respondents from Dar es Salaam, Mbeya, Moshi municipality, Tunduma, Arusha, Namanga, Sirari, Horohoro, Holili, Tanga Port and Tanga City was studied through questionnaires. The respondents of this study were stakeholders who are dealing with the importation of goods to Tanzania and more specifically those who are involved in the clearing chain as well as those who are conducting importation and the general public.

Generally, the research revealed that, 71.8% of importers agree that PVoC is necessary, while 65% of the interviewed importers recorded no complaints on the quality of their products sold since the programme started. The average monthly number of QBA to TBS laboratories has decreased by 72 samples, at the same time 1,619 CoCs have been recorded in each month on average. As destination inspected samples decrease, the number of CoCs increases.

The research has also revealed that, PVoC has enabled more products to be verified whether they are to the required standards and fit for intended use. Included in this category are products which could not be tested by TBS for various reasons including lack of machinery, standards, technology and other competences.

Recommendations from stakeholders

Respondents from the general public appeal to TBS to increase checks and control in every point of entry and ensure that all goods that have escaped PVoC are penalized. This is justified by the case of Sirari border where importers are redirecting their imports to Mtukula Port where TBS has no office. Stakeholders recommend that, TBS should establish offices in each entry point of this country.

Respondents and general public advise that, despite the fact that PVoC agencies are accredited organisations, TBS should from time to time randomly retest products with CoCs just to gratify that the PVoC agencies are conducting testing as required. Another advice is that the average time to verify CoCs in TBS office should be shortened; PVoC agencies claim that, TBS takes 3 to 4 days verifying documents from the day CoCs are collected by TBS.

Most of the interviewed people responded that the time spent by PVoC agencies to verify their products is between 1 and 60 days; the average time claimed by respondents is 11 days. However PVoC agencies claim to take about 4 days in case where the inspection requires just physical check, but if goods have to go to the laboratory it may take more days. Together with this it was noted that there is also a vivid delay caused by communication/transaction between exporter and PVoC agent in the exporting country. Possible areas of delay must be looked closely to reduce customer complaints which include loss of customers, keeping customers waiting for long and delays in supplies.

About 77.5% of respondents argue that, all products must be subjected to pre-shipment inspection without any exemption; other respondents mentioned specific products like raw materials (2.5%), food stuffs (5.0%), pharmaceuticals (12.5%) and electronics & electrical goods (2.5%) to be excluded from PVoC. Those who did not prefer PVoC on food stuffs, pharmaceuticals as well as electrical goods argue that these are very sensitive products and they should not be trusted with agencies.

Generally, the respondents gave out their observations and feelings on PVoC. Most recommended on improvement of PVoC scheme, while others suggested that DI and PVoC should go parallel. Education and awareness seminars were recommended for traders to ensure smoother operation, while others recommended that TBS staff should be committed to ensure that the programme becomes a success. Other recommendations include using online systems and employing a more participatory approach. Education was given more weight by many respondents. Many suggested that TBS should carry out more education to raise awareness on PVoC starting with importers and followed by all those in chain as far as PVoC is concerned.