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Dissertation to be submitted with one hard copy and soft copy on a flash labelled.

CANDIDATE NUMBER
AN ANALYSIS OF SUSTAINABILITY PRACTICES

PROJECT TITLE IN CUSTOMS CLEARING COMPANIES

KMI LOGISTICS

COLLEGE

SUPERVISOR

SIGNATURE

Chartered Institute of Logistics and Transport (Zimbabwe)

I certify that this project is all my own work. Any material quoted or paraphrased from

reference books, critical work etc. has been identified and duly acknowledged.

NAME MISHECK MACHIRIDZA

SIGNED

DATE

Chapter 1 introduction

1.1 Introduction

This research proposes questions to be addressed for beneficial regulations by reviewing

existing customs clearance service practices, particularly for customs clearing agents. These

Chartered Institute of Logistics and Transport (Zimbabwe)

questions will help to assess sustainability practices in customs clearance and identify

customs clearing organizations weaknesses and how they fall short of adequacy quality and

optimized performances for recourse. The identified core questions are on national port of

entry recognition of customs clearance business; an institutional arrangement with a

“practitioner organization”; an implementation arrangement with an enforcement mechanism

and with clear division of responsibility among stakeholders; and streamlined but flexible

regulations adapted to country context.

1.2 Background to the study

Sustainability is becoming more important for all companies, across all industries.

Sustainability is a business approach to creating long-term value by taking into consideration

how a given organization operates in the ecological, social and economic environment.

Sustainability is built on the assumption that developing such strategies fosters company

longevity. are recognizing the need to act on sustainability. Professional communications and

good intentions are no longer enough.

A growing number of companies worldwide have engaged in serious efforts to integrate

sustainability into their business practices). However, most firms have kept the question of

sustainability separate from considerations of business strategy and performance evaluation,

areas that are often dominated by purely economic performance indicators and more research

is needed to promote theoretical and practical advances in that management field. Although

corporate efforts to integrate sustainability into their business practices have begun to be

reported in a growing number of publications worldwide, little has been written on customs

and clearing agent.

Chartered Institute of Logistics and Transport (Zimbabwe)

Customs clearing agents have been recognized as essential service providers in a move set to

enhance regional and international trade facilitation amid the dreaded COVID -19 global

pandemic (Statutory Instrument 45 of 2021 (Public Health (COVID-19 Prevention,

Containment and Treatment (National Lockdown) (No.2) Amendment Order, 2021 (No.14)

in the Zimbabwean context. The work of customs clearing agents involves preparation and

submission of documents necessary for customs clearance, estimation and calculation of

duties and taxes using tariff coding systems and other books of reference, payment of the

applicable duties and taxes to the smallest figure as well as facilitates communication and

coordination between importers/exporters and the government agencies. Their role implies

that the agency applies are compliant. Transaparent,

Along the supply chain, several other stakeholders also work hand-in-hand with customs

clearing agents such as transporters, brokers, runners and many more with different interests,

roles and contracts. But, the regulations on customs they can not in isolation improve the

society, reduce the impeding matters such corruption in borders. On the hand an initiative by

agencies can success improve performance in areas pf environment, and social integration

ultimately, customs clearing agents are demanded to be proactive and incorporate

ustainability in the strategy. Customs and clearing agencies have long been seen as the

collective stewards of the nations’ trade and borders.

Today, however, these agencies are experiencing unprecedented pressure, with a s

imultaneous impact on many fronts. agencies are required to perform at the highest levels of

efficiency and effectiveness—to collect revenues due to the state, to protect the safety of the

community, to facilitate legitimate trade, and to encourage economic development.

Legal restrictions on logistics exist to contribute to sustainable development, e.g., enhanced

traceability and emission reduction regulations.

Chartered Institute of Logistics and Transport (Zimbabwe)

Stakeholders’ concerns on being more sustainable have been growing. They have started to

become more aware of how supply chain activities cause damage to the environment and

society, and they are increasingly interested in how companies are addressing sustainability

challenges in their operations. The growing awareness on the topic affects both purchase

decisions\like more environmentally friendly than the competitors. Business attitude has

been also changingrs. Some of these requirements are as follows: all workers are treated

equally and with respect and dignity; workers’ health and safety are protected at work;land

rights of communities, including indigenous peoples, will be protected and promoted;

business is conducted in a manner which embraces sustainability and reduces environmental

impact

business leaders are becoming aware of the fact that a sustainability era has already started,

and they have to search for opportunities to ensure their business excels in the new era.

Business leaders know thatsuccess in the sustainability era depends on strengthening the

commitment to sustainability principles. Logistics company UPS has a commitment on

sustainable development and leads other companies toward greater awareness and actions..

Being more environmentally friendly or socially responsible can be regarded among the

foremost important factors that have influence on customer perception and behavior. This

motivates companies to take further actions on environmental and social policies. There

exists a community called aims to inspire, engage, and equip its community to profitably

innovate for sustainability.

Leading organizations have seen the advantages of pursuing a sustainable business model for

both the environment and society by managing externalities of the supply chain operations.

Now, they would like to harness the associated benefits of being responsible organizations.

Chartered Institute of Logistics and Transport (Zimbabwe)

Sustainable Organizations are more aware of economic benefits of being sustainable; they

have started to realize that win-win situations can be attained, which means that reducing

externalities might provide economic benefits in the long run. For instance, reducing inputs,

waste, and emissions through innovative applications contributes both to economic and

environmental performance. Alignment with governmental regulations on environment and

society enables to avoid paying fines or penalties and therefore can also contribute to the

competitive advantage of companies. In respective of these changes cujstoms clearing

agencies lags behind

Today the trading community uses just-in-time supply chains to maximize competitive

advantage, and it demands that customs and clearing organisations do not disrupt those

chains. The internationapl trade stakeholders look to agencies to lower the cost of doing

business and to enable firms to compete globally. In an environment where lowering trader

costs can make the difference between success and failure, even the smallest process driven

ICT improvement can give traders a competitive edge over firms in other countries.

Sustainabilituy will enable to o fulfi ll their r roles and responsibilities in ways that are more

transparent and friendly to business

Yet, customs clearance at the centre of trade facilitation can be viewed as a bone of

contention, from personal level, organizational level, and governmental level all the way to

the global level. (Khan and Dong, 2017a) noted that in recent decades, global logistics has

been an area of interest for practitioners and academics due to its impact on social, economic

and environmental factors. Sustainable business is one that generates profit while improving

societal and environmental conditions, and generating strategies for company longevity.¹ This

includes what you do (your companies’ product or service) as well as how you do it (the way

your business operates). Beyond helping to combat global challenges, sustainability can drive

Chartered Institute of Logistics and Transport (Zimbabwe)

business success. . Sustainability in customs clearing embraces environmental, social and

economic dimensions and both refer to a long-term perspective based on meeting the needs of

the present with responsibility and without compromising the ability of future generations to

meet their needs. In light of this, managers have to take into consideration not only increased

sales and profits and/or decreased costs, but also the sustainable development of the business

itself and the surrounding context.

A growing number of companies worldwide have engaged in serious efforts to integrate

sustainability into their business practices). Improvements in the supply chains such .. A

sustainable enterprise genuinely contributes to sustainability by delivering economic, social

and environmental benefits simultaneously, i.e., achieving the triple bottom line (Dyllick &

Hockerts, 2002; Elkington, 1998). Triangulating with the state and civil society,

organizations have been developing new strategies, policies and arrangements and redefining

their respective roles, action domains and interdependency (Marrewijk, 2003). Sustainability

in customs clearing organisation involves multiple stakeholders specifically the employees,

shareholders, clients, suppliers, customs administration and government agencies, community

members,.

Consequently, managing sustainability seeking a balance between short- and long-term

considerations, and among the interests of a larger group of stakeholders than those addressed

by traditional management (Raynard & Forstarter, 2002). strategies, not only to respond to

rising pressure from consumers, employees and other stakeholders but also to explore

opportunities for creating competitive advantage (Bielak, Bonini, & Oppenheim, 2007;

Customs agencies are criticall element as international, regional an national orgnisations

works an extra mile in trade facilitation . trade facilitation is a trade competitivne factor. Iot

is strategic policy goal to reduce costs and to makeenvironment more predictable .therefo

Chartered Institute of Logistics and Transport (Zimbabwe)

The heat is felt by customs clearing agents who as a result find it very difficult to for them to

sustain. When customs clearing agents fail supply chain optimizations also fail and trade is

greatly hindered with all the gains that come with it. Customs administrations have tried their

level best to use their sustainability policies to empower customs clearing houses but their

effort has not reached its full potential yet. Conspiracy theories have played a cat-and-mouse

game with regards to the real issues behind the failure by customs clearing agents to

incorporate sustainability practices into their modus operandi. Customs clearing agents

saying ZIMRA and the regulatory systems is to blame, ZIMRA blaming customs clearing

agents and their structures. Some say it is multiple administrative agencies that do not interact

with each other has created duplication of regulations and resulted in overregulation (WB,

2013). Other studies suggest that that in the East Africa Community, due to insufficient

regulatory oversight, low-skilled operators easily enter the industry with the lack of

professionalism, quality, and efficiency of their services (Arnold, et al., 2011).

It is responsibility customs and clearing agencies to take initiatives in innovation. Corporate

governance in profitable business has since inspired turn-around in the corporate world at a

pace

Conspiracy theories have revealed that a weak regulatory framework has been the root of the

challenges that customs clearing agents are facing customs clearing service industry. For

example, in Zimbabwe, multiple administrative agencies that do not interact with each other

has created duplication of regulations and resulted in overregulation (WB, 2013). In the East

Africa Community, due to insufficient regulatory oversight, low-skilled operators easily enter

the industry with the lack of professionalism, quality, and efficiency of their services (Arnold,

et al., 2011). Customs clearing organizations have faced difficulty finding the issues that

hinder them from improving logistics competence. Since there has been a knowledge gap on

customs clearance regulations, it is difficult to identify policy options for more efficient and

Chartered Institute of Logistics and Transport (Zimbabwe)

competitive logistics services. Therefore, the need to understand how the customs clearance

service industry is regulated and what should be addressed in building a better regulatory

framework to improve logistics competence.

Statement of the problem

Customs clearing companies in Zimbabwe are struggling to incorporate sustainability

practices into their strategies, corporate governance and also management structures. This

unfortunate sustainability trends is exhibited by the statistics of new applications and those

who fails to renew every year, growth and expansion rate, and a considerable fraction of

some that are dying while in their infancy.

Aim of the study

Research Objectives

1. To identify the availability of sustainability practices in customs clearing

organizations

2. To ascertain the available sustainable practices and the extend of the application

3. To identify the hindrances to the application of sustainability practices and the actions

being taken to improve the situations

4. To ascertain whether customs clearing organizations understand the importance of

sustainability practices in modern day

5. To measure the level of awareness of sustainability practices and the impact it poses

to future performances

Research Questions

1. What are the sustainability practices available in customs clearing organizations?

Chartered Institute of Logistics and Transport (Zimbabwe)

 2. What is the extend of the application of sustainability practices available in customs

clearing organizations

3. What is hindering the application of sustainability practices in customs clearing

organizations and are there any actions being taken to improve the situation

4. What do customs clearing organizations understand is the importance of sustainability

practices in customs in modern day?

5. What is the impact of sustainability practices in customs clearing organizations and

the impact it is likely to pose to future performances?

Aim of the study

To establish the existence of sustainability practices in customs clearing organizations,

measure the extend of the application to route activities, dig out the real issues of concern

including hindrances impeding customs clearing organizations from adopting sustainability

practices, check the level of understanding of sustainability practices today and the likely

consequences tomorrow, suggest possible solutions to remedy the negative performances for

the betterment of customs clearing organizations themselves, dependants thereof and all the

surroundings.

Purpose of the study

Trade between nations is increasingly gaining momentum and movement of goods across

country borders is subject to customs clearance. But the current customs clearing business

operating environment is confronting immense pressures from a plethora of effects chief

amongst include technological advancements, unprecedented regulatory requirements and

growing customer needs. To that end, the call to sustainable operations is huge both to in the

face of both the industry and well as the academia due to the impact it poses to the people’s

Chartered Institute of Logistics and Transport (Zimbabwe)

lives, surrounding environments and prosperity and large. Now this research study aims to

unpack and analyse these issues

Significance of the study

The research will help reduce the knowledge gap persisting customs clearing organizations

by optimizing operations and ensure a hassle-free supply chain. It is the researchers’

viewpoint that the study will unpack insights that will add value to the already existing

literature regarding sustainability issues. The researcher would be keen to see the research

being used as yardstick or starting point of further possible sustainability researches

The industry – the study is crucial in that it underscores to customs clearing organizations

the importance of incorporating sustainability practices into their strategies, corporate

governance and management structures amid the increased trade flows driven by push factors

such as trade liberization, technological advancements, demographic shifts, to mention but a

few. At the centre of trade facilitation are customs clearing organizations whose expectation

is optimize customs clearance processes through customs administrations and ensure a

hassle-free supply chain. For that reason, periodic reviews are necessary to monitor

performance of customs clearing organizations and influence the necessary course of actions

– preventive or corrective actions.

The business world – the study can be an edition that will further place on record the

importance of sustainability practices. This will be an alert call to other enter

To help in the diagnosis of the real challenges concerning customs clearing organizations,

where are the lose bricks and where gaps exists, determine the nature of problems confronted

and their causes including underlying issues, help sweat out the solutions rather than sit out a

Chartered Institute of Logistics and Transport (Zimbabwe)

problem, heed to the sustainability calls and take initiatives towards sustainability

development.

1.1 Definition of key terms

 Sustainability

 Sustainability Practices

 People sustainability

 Planet sustainability

 Prosperity Sustainability

 Customs

 Customs Clearing

 Customs Clearing Organisations

1.2 Rationale of the study

1.3 Summary

Chartered Institute of Logistics and Transport (Zimbabwe)

In order to address sustainability appropriately companies need to bridge two critical gaps:

 “The knowing – doing gap”: A study that I participated in by BCG/MIT finds that

whereas 90% of executives find sustainability to be important, only 60% of companies

incorporate sustainability in their strategy, and merely 25% have sustainability

incorporated in their business model.

 “The compliance – competitive advantage gap”: More companies are seeing

sustainability as an area of competitive advantage, but it is still a minority – only 24%.

However, all companies need to be compliant. Management should address these topics

separately – not mesh them together. Compliance is holistic, a “must do”. For

competitive advantage, only a few material issues count.

o improve sustainability practices.

Government action in the area of trade facilitation comprises various elements such as

simplification of the regulatory framework, procedures and formalities; modern operations

and information and communication technologies (ICT); human resource training; agency

cooperation; cross-border cooperation; and private–public dialogue. A key element of

successful trade facilitation reforms is public–private dialogue. Trade facilitation involves

many different organizations which are interconnected and linked by formal or informal

relationships.

A trade facilitation strategy would, therefore, ideally build on a framework that allows for

participation and communication between the different organizations. Customs a AGencie s

The effective management of the interface between regional and multilateral trade facilitation

Chartered Institute of Logistics and Transport (Zimbabwe)

initiatives demands greater synergy between national development objectives and external

commitments at different integration levels. This, in turn, requires the development of a

national trade facilitation strategy, as part of a comprehensive development-oriented trade

policy. Such a national trade facilitation strategy needs to be synchronized with the

commitments of developing countries arising from the regional and multilateral trade

facilitation initiatives. At the same time, developing countries should ensure that the regional

and multilateral efforts are mutually supportive and coherent, while maximizing the

development gains from the implementation of trade facilitation measures.

To this end, prioritization and sequencing of the implementation of the multilateral and

regional commitments is vital, and must be supported by appropriate institutional and human

capacities. The implementation cost will also be an important factor to consider. 58.

Information and communications technologies (ICTs) open a wide range of options and

propose multiple solutions for dealing with the challenges faced in international trade. The

capacity of the technology to manage the information flows by normalizing data, documents

and messages, and implementing efficient procedures, has led to its adoption by customs

agencies worldwide. The biggest challenge for developing countries is not obtaining the

technology, but implementing proper procedures and building the capacity to apply this

technology in viable and responsive systems. Other challenges concern the physical

movement of the goods, or logistics; the formalities required to smoothly conduct this

movement, as addressed in trade facilitation; and the means and conditions to do it safely,

called supply-chain security. It was in the mid-1990s that UNCTAD identified the first signs

of the potential of global information networks and the benefits that these could have for

trade. The United Nations World Summit on Trade Efficiency (held in Columbus, Ohio in

1994) organized by UNCTAD looked at how to reduce transaction costs by applying

information technologies to every link of the trade transaction chain. The Columbus summit

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was a prelude to the incorporation in 1996 of Trade Facilitation into the WTO agenda. 59.

Logistics essentially relate to business-to-business (B2B) transactions where a client requests

services from providers in transport, handling or conditioning the goods. These services are

mainly provided by private companies, for which efficiency is a condition for

competitiveness and growth. ICTs have been in use in the logistics industry for quite some 16

WTO (2010). Aid for Trade and the WTO work programme. Available at

http://www.wto.org/english/tratop_e/dda_e/background_e.htm. TD/B/C.I/MEM.1/8 18 time.

ICTs allow online booking, billing, cargo space allocation, and tracking of cargo. They have

been instrumental in ensuring timely deliveries, supply-chain transparency, in bringing

accuracy, in the streamlining of processes and in cost reduction. They have also contributed

to supply-chain security and trade facilitation. 60. ICTs in the business-to-governments (B2G

or G2B) arena have only developed much more recently, and have actually shown significant

potential as key drivers for trade facilitation. Trade facilitation aims to optimize the

international trade environment by normalizing and simplifying data and documentary

requirements, by reducing formalities while globally increasing productivity. This objective

is reached by implementing efficient procedures capable of satisfying the requirements of

both the controlling agencies (including Customs) and the trade community. The move

toward a dematerialized environment and the use of digital multimedia documents, replacing

paper forms, is only possible in a computerized environment. Similarly, the implementation

of procedures such as Direct Trader Input (DTI) or Automated Selectivity Control must rely

on powerful and efficient computerized customs systems. 61. Security has, nowadays,

acquired paramount importance for the international transport of persons and goods, and

therefore new requirements have been imposed on the international supply chain. Border

crossing represents one of the crucial steps in the supply chain. Border protection involves

multiple controlling agencies, whose activities must be coordinated in order to streamline the

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controls (one-stop shop) and to reduce the burden on the transport community. New measures

and new procedures (such as those defined in the WCO Framework of Standards) have been

designed and are continuously being implemented to enhance security levels. ICTs allow new

types of controls, such as the nonintrusive inspection of cargoes (container scanning), the

provision of information prior to the arrival of goods (pre-arrival data), and enhanced

techniques of control based on risk analysis and automated selectivity. All of these solutions

make use of powerful ICT instruments. 62. Through its ASYCUDA programme, UNCTAD

has been involved in this process for more than 25 years. ASYCUDA assists beneficiary

countries in customs reform and modernization through the automation of procedures and

operations. ASYCUDA has been a major actor in this evolution in more than 90 developing

and transition-economy countries, by providing them with modern and highly reliable

integrated IT solutions, together with capacity-building and functional assistance.

ASYCUDA has worked with these countries’ customs administrations and trade communities

on data and document standardization, and on the simplification of procedures towards trade

facilitation in a secure environment.17 IV. The way forward 63. Against the backdrop of a

fragile and uncertain world economic recovery, the considerations raised in this note

highlight the breadth of issues facing international transportation systems, and underscore the

challenge of making headway on a wide range of transport and trade facilitation objectives

and priorities. Innovative thinking in transport and trade facilitation will be crucial if the

world transport and trade networks are to meet the ever-more sophisticated demands of the

twenty-first century.

details. TD/B/C.I/MEM.1/8 19 (a) What are the main challenges and opportunities in the field

of transport and trade facilitation presented by (i) the global financial and economic crisis; (ii)

supplychain security imperatives; (iii) concerns about the long-term sustainability of

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affordable energy supplies; and (iv) concerns about environmental sustainability and climate

change? How can these best be addressed at the national, regional and international level? (b)

What measures may be taken to control the level of transport costs, including in the light of

high oil-price levels? (c) What can be done to ensure that international instruments on

environmental regulation and sustainability in shipping are implemented widely? (d) What

has the impact been of the WTO trade facilitation negotiations on national and regional trade

facilitation reforms, and how can such reforms best be supported? How can trade facilitation

be streamlined into national development strategies and technical assistance programmes, and

how can the international community contribute to the corresponding capacity-building

programmes? (e) How best to capitalize on existing synergies and improve the common

interest of transit-developing countries and LLDCs, including in relation to supply-chain

security and trade facilitation? What are the main challenges facing SIDS in relation to

transport and trade facilitation, and what are the key determinants for successful policy

action? (f) Which measures are required in ICT to better implement

. Customs clearing agent is defined as, a person or organization who (a) for gain, acts for an

importer, exporter, manufacturer or the holder of a licence; or (b) holds himself out as

carrying on the business of acting for importers, exporters, manufacturers or holders of

licences; in performing any function under, or complying with any requirement of, Customs

and Excis

Sustainability practises has never been easy to implement in the field of customs clearing

since its inception. With conspiracy theories playing a cat-and-mouse game marring progress

needed to leapfrog the much needed sustainable development in terms of optimized customs

clearance processes to achieve optimized supply chains. The list of excuses regarding the

failure by transport and logistics services industry includes the following; weak regulatory

frameworks have been the root of the challenges that countries have faced. For instance, in

Chartered Institute of Logistics and Transport (Zimbabwe)

Greece, multiple administrative agencies that do not interact with each other has created

duplication of regulations and resulted in overregulation (WB, 2013).

This is the case with Zimbabwean port of entries, Beitbridge border post for example. Other

studies have revealed that in East Africa Community, due to insufficient regulatory oversight,

low-skilled operators easily enter the industry with lack of professionalism, quality, and

efficiency of their services (Arnold, et al., 2011). Apart from all this, the business world

today has been taken by technological advancements storms. These have changed the modus

operandi environment such as a paradigm shift from the manual environment to almost the

EDI and paperless environment.

In a nutshell, customs clearing agents have faced difficulties in finding the real issues that

hinder them from incorporating sustainability practices in their strategies, corporate

governance and management structures in order to sustain. Since there has been a knowledge

gap on these hindrances, it is difficult to identify sustainability practices for more efficient

and optimized customs clearing services. Therefore, the need to understand how customs

clearing agents fall short when sustainability practices matter is huge in building a better

sustainable framework to optimize customs processes and ensure seamless journeys. The

main motivations behind the desire for paying attention on the sustainability can be

summarized as follows [10]:

This research proposes questions to be addressed for beneficial regulations by reviewing

existing customs clearance service practices, particularly for customs clearing agents. These

questions will help to assess sustainability practices in customs clearance and identify

Chartered Institute of Logistics and Transport (Zimbabwe)

customs clearing organizations weaknesses and how they fall short of adequacy quality and

optimized performances for recourse. The identified core questions are on national port of

entry recognition of customs clearance business; an institutional arrangement with a

“practitioner organization”; an implementation arrangement with an enforcement mechanism

and with clear division of responsibility among stakeholders; and streamlined but flexible

regulations adapted to country context.

e Acts. For instance, Chapter 23:02 in the case of Zimbabwe.

Chartered Institute of Logistics and Transport (Zimbabwe)