I NCHCAPE testing services (ITS) have fended off criticisms over their preshipment inspection contract with the Finance Ministry.

The General Manager of ITS in Cambodia William Fletcher, in an interview with the Post, said: "The ITS preshipment inspection program was contracted for the benefit of Cambodia. It is a temporary facility designed to assist the customs department in the collection of the correct revenue for government.

"We have examples like Nigeria where duty and tax collection have increased by three or four fold after ITS testing. In a developing country, business activities are often undermined by illegal importing."

"As to the independence of the Cambodian government from foreign companies, we are not here to replace the government inspection services. Camcontrol makes some selective inspection and we intend to be complementary.

"We will just give a temporary service. Our program will also be developing local skills and resources."

Some western companies have alleged ITS has a conflict of interest in being involved in inspection services because ITS's parent company Inchcape PLC was heavily involved in importing pharmaceuticals into the country.

The manager of a Western company, who requested anonymity, said: "When we know the Inchcape group runs a huge factory of pharmaceuticals in Singapore, we are not surprised to see ITS wants to be in charge of inspecting pharmaceuticals in Cambodia.

Fletcher said: "Western Companies pointed out that we are part of a big group which has interests in shipping and trading. Considering us as a kind of 'Big Brother' is quite naive.

"We cannot take the risk of ruining our reputation of being professional and ethical all over the world. Cambodia is quite a small market for us. In 1993 $229.5 million of goods were imported into Cambodia. ITS has contracts in over 40 countries where the value of goods imported is over $1 billion per year.

"Indeed, we are part of the International Federation of Inspection Agencies (IFIA) which confirms the truth of our total independence from Inchcape PLC trading company.

But the Western manager said: "ITS is part of the IFIA which should guarantee its integrity but we consider ITS to be the founder and sole member of this federation."

Fletcher said: "People complain of our one percent inspection fee, and our minimum inspection fee of $200. But the high cost of freight, $20,000 for an average shipment of pharmaceuticals, prevents traders bringing in low value shipments. Furthermore, there will be clear justification for the fee payment."

Roger Ottenheym, general manager of Shell in Cambodia said he approved of the contract and thought the one percent inspection fee was a good price so long as ITS provided a high quality service.

But he said there was a lack of precision in the contract and he wondered why other independent inspectors were not considered by the Ministry of Finance to ensure competitive inspection rates.

The Camcontrol inspection fee is 0.5 percent.

Fletcher estimated that import duty tax revenue should go up to about $98 million this year. Import duty revenue was $68 million in 1993. The Inchcape group has a turnover of $8.8 billion.