Agenda Item 9.2Document 10

Agenda Item 9.2Document 10

18 April 2018

Agenda Item 9.2Document 10

18 April 2018

Disclaimer

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The Organization (i.e., IFC), using their best efforts in the time available, to provide high quality services hereunder and have relied on information provided to them by a wide range of other sources. However, it does not make any representations or warranties regarding the completeness or accuracy of the information included this report, or the results, which would be achieved by following its recommendations.

About the IPPC Secretariat

The Secretariat of the International Plant Protection Convention (IPPC) contributes by fulfilling a workplan set by its contracting parties which focuses on developing International Standards for Phytosanitary Measures (ISPMs) for safeguarding plant resource; providing a means for information exchange related to import and export requirements, pest status and regulated pest lists provided by member countries and supporting developing countries through technical assistance in implement the Convention and the ISPMs.

About the Investment Climate Advisory Services of the World Bank Group

The Investment Climate Advisory Services of the World Bank Group assists governments of developing and transitional countries in enhancing the environment in which businesses operate. We provide customized advice to improve and simplify regulations as well as to attract and retain investments, helping clients create jobs, foster growth, and reduce poverty. We rely on close collaboration with donors, in particular through the multi-donor FIAS platform, and World Bank Group partners—the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the World Bank (IBRD)—to leverage value and deliver tangible results for client governments.

Agenda Item 9.2Document 10

18 April 2018

Table of Contents

I.Background

Purpose

Purpose of Phytosanitary Certificates

What is ePhyto?

What is the ePhyto Solution

Establishing E-Phyto Implementation Team

II.Approach.

III.Benefits of ePhyto

IV.Definitions, terms and abbreviations

V.Blueprint for Exchanging ePhyto

Context

VI.Strategy for the Blueprint for Exchanging ePhyto

ePhyto Vision.

Governance

ePhyto Operational Model / Operator.

VII.Conclusion and Options

Executive Summary

The use of electronic phytosanitary certificates (ePhytos) provides significant benefits both for governments and for international traders. The secure transfer of electronic phytosanitary certificates directly from the national plant protection organization (NPPO) of the exporting country to the NPPO of the importing country ensures that the certificate information has not been altered and provides an important assurance on the integrity of the exporting countries phytosanitary system. Automation of NPPO documentary processes also brings significant efficiencies to the organization by reducing the time spent on manual tasks thereby also improving the effectiveness of the operation by allowing highly skilled staff to refocus activitieson addressing phytosanitary risks. The use of ePhytos also allows NPPOs to receive and analyze information well in advance of commodity arrival. Data collection, storage and accessibility for analysis allows NPPOs to better analyze risks over time and readjust activities to address risk priorities while allowing them to discontinue unimportant activities that may have been done on the basis of an absence of information.

In most cases, the transition from paper certificates to electronic certificates will not only impact on the resources, policies and operations of the NPPO, but also on the resources, policies and operations of its clients, partners and stakeholders. Countries implementing electronic certification will need to change their business processes including how information is transferred between traders and the NPPO, the NPPO and partner border agencies such as Customs, Food and Environment and other stakeholders such as banks. The NPPO will also need to review its legislation and authorities; those other national laws and regulations which govern the use and transfer of data electronically and also work with other national agencies to ensure that their authorities also support the use of electronic documents which may be used in the overall trade process.

With paper certification, information may be transferred several times between various agencies and organizations from the application for certification filled out by an exporter to the point of issuing the paper phytosanitary certificate. It may also be transferred several times between the NPPO of the importing country and the various agencies and organizations involved in the clearance of the goods. With the issuance of electronic certificates, the exporter should be able to provide the data associated with the application for certification which may be used in the issuance of the electronic certificate. Similarly the receipt of the electronic phytosanitary certificate in the destination country should allow for streamlined border clearances based upon data transfer.

The changes in the business operations associated with implementing electronic certification require new skills on the part of the client as well as the NPPO’s staff. How will these skills be obtained, what will the change cost and when should the changes be made should be carefully considered well in advance of implementing the change. Many well trained staff conducting paper phytosanitary certification will require new skills and this change should be carefully monitored to ensure that transition is effective and least impact on the resources of the organization or its clients.

The changes required in implementing systems for the exchange of ePhytos requires that NPPOs acquire financial resources to support the implementation of the systems and their long term operation including any required upgrades to software and hardware, training of staff, etc. Although, the IPPC Secretariat manages and operates the ePhyto Solution, NPPOs will need to consider whether initial investments are required. This may include: hardware such as laptops, desktops or tablets to access the systems;hardware to store data locally; software to address any interoperability between existing inspection, testing, fee collection, and other systems and the need to support client infrastructure to permit their access to data. Furthermore, once automation is established, countries need to maintain their infrastructure over the long term. Therefore the financial resources to routinely upgrade hardware and software will also be required.

Implementing E-Phyto

I.Background

Purpose

The intent of this guide is to provide decision-makers within national plant protection organizations (NPPO) with guidance on some of the factors and considerations in the planning and implementation of electronic phytosanitary certification. NPPOs should develop responses to the questions provided in the guide and in consultation with stakeholders develop an action plan for implementation.

Phytosanitary certification is used to attest that consignments meet phytosanitary import requirements and is applied to most plants, plant products and other regulated articles that are traded internationally. Phytosanitary certification contributes to the protection of plants, including cultivated and uncultivated/unmanaged plants and wild flora (including aquatic plants), habitats and ecosystems in the importing countries. Phytosanitary certification also facilitates international trade in plants, plant products and other regulated articles by providing an internationally agreed document and related procedures. [1]

Purpose of Phytosanitary Certificates

Phytosanitary certificates are issued to attest that plants, plant products or other regulated articles meet the phytosanitary import requirements of importing countries and are in conformity with the certifying statement. Phytosanitary certificates may also be issued to support re-export certification to other countries. Phytosanitary certificates should be issued only for these purposes. [2]

What is ePhyto?

An ePhyto is the electronic equivalent of a paper phytosanitary certificate. An ePhyto is not a digital image. A digital image such as a pdf, JPEG, or other image format provides very little benefits over the paper document as the information remains in a format that cannot be easily analyzed. An ePhyto contains the digital data of the paper certificate in a prescribed format which allows the information to be indexed and searched. In this way, the information provides significant benefits over paper documents allowing national plant protection organizations, other border authorities and traders to be able to store access and analyze information faster and more securely.

Appendix 1 of the International Standard for Phytosanitary Measures (ISPM) 12 Phytosanitary certificates prescribes the requirements for electronic phytosanitary certificates. Some of the requirements are:

-The message structure should be based upon a defined structure in eXtensible Markup Language (XML). XML stores data in plain text format. This provides a software- and hardware-independent way of storing, transporting, and sharing data. It also makes it easier to expand or upgrade to new operating systems, new applications, or new browsers, without losing data. With XML, data can be read easily by people, computers, voice machines, news feeds, etc.

-The phytosanitary XML message structure is based on the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) Sanitary and Phytosanitary (SPS) XML schema.

-To ensure that all NPPOs can understand the messages being exchanged, the phytosanitary certification data should follow standardized (harmonized) terms, codes and text for the data elements associated with the XML message. These have been defined on the international phytosanitary portal at:

-Transmission of data over the Internet from the NPPO of the exporting country to the NPPO of the importing country should be performed using Simple Object Access Protocol (SOAP).

ePhytos should only be used if accepted by the NPPO of the importing country. Countries should not obligate the use of ePhytos.

What is the ePhyto Solution

The ePhyto Solution is an international technological approach to facilitate the exchange of electronic certificates. The CPM 12 requested the IPPC Secretariat to pursue the development of the ePhyto Solution to advance the use of electronic certificates for plants and plant products moving in trade. The widespread use of ePhytos has been limited by the capacities of countries to develop the technological infrastructure to create the electronic message and the resources to conduct required bilateral engagements to work out specific the structure of the messages to be exchanged. A study conducted in 2012 noted that the adoption of electronic certificates by NPPOs could be facilitated by establishing an exchange mechanism referred to as a “hub” that transfers the electronic message from the NPPO of the exporting country to the NPPO of the importing country. The hub has been established andNPPOs send the certificate configured according to the requirements prescribed in Appendix 1 of ISPM 12 and further described in harmonized schema, codes and terms documents[3] to the hub in accordance with a specific communication protocol. The message is sent using secure protocols which protect the message from tampering. The hub transfers the message to the importing country.

To further facilitate the use of electronic certificates, the IPPC Secretariat has also developed a simple web based system to create, send and receive the ePhytos by way of the hub. The system is referred to as the generic ePhyto national system (GeNS) and is intended as an alternative to systems developed by the country to create and receive ePhyto messages. As the GeNS only offers a workflow for the creation and receipt of the electronic certificates based upon information supplied by an exporter or agent, the system does not replicate many of the systems that countries may already have developed independently to track inspection, testing and other phytosanitary activities. Therefore careful consideration must be taken in considering how the GeNS will be used nationally. A series of potential options are provided inFigure 1.

Figure 1: Potential implementations of the GeNS

Governance and Operation of the ePhyto Solution

The IPPC Secretariat has been charged with the governance of the ePhyto Solution by the Commission on Phytosanitary Measures (CPM). CPM11 (2016) “supported the implementation of the STDF project to pilot the hub and the generic national system to promote the use of ePhyto by CPs [Contracting Parties] worldwide including developing countries and requested the Secretariat report back to CPM12 on progress in implementation of the ePhyto project”. The IPPC Secretariat has contracted with the United Nations International Computing Centre (UNICC) to develop and operate the hub and GeNS. For those countries that choose to implement the GeNS, the system operation will be provided by UNICC, with little technical operation required in-country.

Establishing E-Phyto Implementation Team

Project Team

Groups and Agencies to be Consulted

Name and identify the function of the organizationsand/or group within an organization that have responsibilitiesor will be consulted in regard to development of the Blueprint.

II.Approach.

The guiding principles used to develop the recommendations in this report are:

1. Development of an sustainable, implementable information technology (IT) solution that suits the national economic and infrastructure environment;
2. Development of procedures that bring efficiency to government and traders;
3. Development of a national policy framework that supports the sustainable implementation of the solution;
4. Implement a smooth transition of staff, clients and cooperating agencies to the automated environment.

The outcomes sought through the ePhytoand the necessary data harmonization and information processes aligned to the guiding principles are to reduce organizational and cross border costs and to improve market access by:

-enabling exporters to submit all information through an automated system;

-discontinuing,as much as feasible, the practice of manual submissions of export information;

-implementing improved risk-based clearance procedures for imports;

-Increased coordination for the identification, management and response to risk.

III.Benefits of ePhyto

The establishment of electronic certificate exchanges can be an important component in supporting trade facilitation. In particular the implementation of electronic exchanges supports transparency and fairness in government processes; better governance and modernization of procedures including more efficient and effective border procedures. The establishment of electronic certificates in phytosanitary certification provides a number of direct and indirect benefits to both the government and private sector. These include:

1. Cost reduction elements:

-Reduction in the cost ofprinting and transferring paper certificates between government and its clients;

-Reduction in the costs associated with sorting, retrieving, and archiving paper documents;

-Improved service delivery for clients;

-Increased efficiency in the exchange of certificates between NPPOs

1. Transparency and operational efficiency elements:

-Increase in the security certificates including the elimination of fraudulent certificates;

-Increased ability to analyze and address documentary issues in advance of commodity arrival;

-Increased ability to effectively plan on addressing commodity risks;

-Increased ability to analyze and plan based upon real time and historical data analysis;

-Government wide integration of electronic initiatives.

1. Cost avoidance elements:

-Removal of the need to establish specific country by country bilateral for exchange of certificates;

-Reduction in the need to conduct auditing of certificate issuance processes

1. Risk reduction elements:

-Assessment of risk at the time the e-Phyto is received (generally in advance of commodity arrival)

-Ability to reassess commodity risk and tailor the operational response

-Improved traceability (electronic system)

Although many or more than likely all of the benefits identified here are likely to be achieved upon implementation of the use of ePhytos, NPPOs should review the costs and benefits of implementation. Many of the costs associated with infrastructure improvements, legislative changes, policy development, staff training, stakeholder consultation, outreach and transitioning are generally outweighed by the improvements in organizational efficiencies, risk management effectiveness and border system improvements. Guidance on conducting a cost/benefit analysis is provided in Section XX

IV.Definitions, terms and abbreviations

V.Blueprint for Exchanging ePhyto

Context

Describe the national context and current environment in which ePhyto will be used.