The latest revision of International Commercial Terms (Incoterms), due for launch within weeks, has attracted strong criticism over their relevance in South Africa and the sub-Saharan region’s trade landscape. Pat Corbin, SA director of the International Chamber of Commerce (ICC), the world body responsible for updating Incoterms every 10 years, believes they are out of sync with local conditions. “The cost implications of Incoterms are putting additional financial strain on South African importers,” he said. At the heart of the problem is the fact that the ICC’s Commercial Law and Practice Commission, the drafting group responsible for devising the Incoterms, “is not familiar with our trading landscape”, in Corbin’s view. “They don’t contend with the fact that sub-Saharan African has the most landlocked countries in the world.” With the exception of Mali, Niger, Chad and Burkina Faso, all of the remaining officially port-less countries in Africa, numbering 12 in total, are south of the Sahara. Add the Democratic Republic of the Congo into the equation, because its Atlantic sea port of Matadi is mainly a low-volume transhipment harbour, and technically speaking subSaharan intratrade has 13 countries that are landlocked. “It means the application of Incoterms in our region and import trade through our region is at a significant disadvantage because of the prescriptive nature of the terms.” Adding a finer point to the picture, he said on top of the insurance and incremental cost implications of the terms for traders in the region, sub-Saharan freight was already subjected to a variety of challenges, many being violently disruptive. “You know what it already costs to transport goods in South Africa and further afield, not to even mention all the other factors we have to contend with. It’s because logistics movement is so vital that we have to constantly consider trade costs and external factors that add to the expense of operating as a trader in this region.” Corbin said he had been talking to the ICC about the matter for years, that technical issues around cargo ownership between exporters and importers and how this affected southern African freight should have been addressed long ago. In a document he shared with FTW, Corbin showed that as far as the ICC was concerned, inbound cargo was the responsibility of an importer once goods had been delivered to a landside depot or terminal. “It is especially in this respect, and the additional costs it saddles importers with, that sub-Saharan Africa should be given due consideration,” he said. “But Incoterms are driven for the sake of exporters and when the ICC looks at the market they use Europe, which is a trade bloc without the issues we have, and they expect us to work according to terms that essentially suit their ports.” Corbin said it was high time that the ICC’s Incoterms drafting committee appointed more freight experts and fewer attorneys, particularly people familiar with southern Africa’s trade landscape, to accommodate subSaharan freight and the cost of trade in this part of the continent. As an example of how out of touch the ICC is with the situation here, Corbin said they wanted to send a trainer from Singapore to South Africa “to come and tell us about Incoterms”. “We don’t need someone from Singapore to come and tell us what the books say. I don’t agree with what Incoterms is saying, it’s irrelevant for us.” • Last Tuesday Paris advised that now ICCSA will be the only party authorised to accredit trainers on Incoterms in the name of the ICC. The process to qualify will involve satisfying ICCSA that the applicants will be competent to combine South Africa’s present trade practices and legal requirements with the relevant Incoterms.
I don’t agree with what the book is saying, it’s irrelevant for us. – Patrick Corbi
