NNPC Limited SCM Processes and Procedures PDF

NNPC Limited SCM Processes and Procedures 17.0 Clearing and Haulage This process refers to how NNPC Limited with the use of an approved clearing agent and freight forwarder clears merchandise through customs and pays the required duty or fees that are owed for imported or exported goods till they a...

NNPC Limited SCM Processes and Procedures 17.0 Clearing and Haulage This process refers to how NNPC Limited with the use of an approved clearing agent and freight forwarder clears merchandise through customs and pays the required duty or fees that are owed for imported or exported goods till they arrive at the relevant end point. Objectives The objective of Clearing and Haulage process is to: • • • • Ensure smooth and timely shipment of goods. Achieve optimal cost in transporting the goods, well within the delivery schedule. Ensure documentation of goods being transported are compliant with local and international regulations. Ensure all cargo transported are secure and arrive safely at the required destination. 17.1 Clearing and Haulage Policies S/N 1. Description Compliance with Logistics and Warehousing Policy a. SCM shall adopt the Door-to-Door Strategy/Delivered-Duty-Paid (DDP) incoterm for all Materials Procurement and Engineering, Procurement and Construction (EPC) Contracts company-wide. This is intended to mitigate the financial risks associated with the complicated nature of foreign procurements and customs clearance by transferring all procurement and logistics risks to the Seller/Contractor at a cost. b. The appropriate cost of materials acquisition will be guided by NNPC’s approved cost guideline. The guideline will stipulate appropriate allowable profit/ cost of doing business for each procurement. c. All foreign consignments shall be made in the Seller’s/Contractor’s name and not NNPC Ltd. SCM shall therefore ensure that the appropriate Contractor is selected who possesses the requisite financial and logistical capability to assume all risks associated with the execution of foreign procurement and EPC contracts on Delivered Duty Paid (DDP) incoterm basis. d. On exceptional circumstances when it is not practicable to implement the door-to-door policy, subject to the approval of the CEO/ MD, SCM may conduct material procurement or EPC contracts 131 NNPC Limited SCM Processes and Procedures 17.1 S/N Clearing and Haulage Policies Description through the establishment of Letter of Credit. This is an exception to the rule that requires adequate justification. e. SCM shall co-ordinate and monitor the freighting, clearing, and forwarding of imports in accordance with local and international regulations. f. SCM in collaboration with the User Departments shall carry out quality control inspection of all incoming materials and shall be undertaken before they are received into stock. g. SCM shall provide adequate materials handling equipment through purchase or hire, depending on the relative cost/benefit implications of the options for NNPC Limited. h. SCM shall ensure prompt clearing and forwarding of all NNPC Limited (SBUs/CSUs) materials through the nation ports to ensure minimum demurrage. i. SCM shall ensure the processing of Contractors. Vendors and Suppliers payment; after the process of authentication and quality control inspection. Vendors invoices shall be passed on to Finance and Accounts for payment. j. SCM shall co-ordinate the export of equipment or materials for repairs or regeneration with Original Equipment Manufacturers (OEMs). 17.2 Clearing and Haulage Procedures S/N Responsible Party Description Job Aid 1. SCM (N-3/4) Notify the Treasury Unit on the need to establish a Letter of Credit (LC) and Form M, attaching support documents containing contract terms, payment medium, beneficiary details etc. Email/ERP 2. SCM (N-3/4) After Form M and LC have been established (refer to letter of credit process in finance) Email Receive copies of Form M and established NNPC Limited Letters of Credit from Treasury (N-3/4) for record keeping. 132 NNPC Limited SCM Processes and Procedures 17.2 Clearing and Haulage Procedures Responsible Party SCM (N-3/4) Description 4. Finance (N-3/4) Receive Shipping Document from supplier through Authorized Dealer Bank (ADB) and forward to SCM (N-3/4) and SCM (N-5/6). 5. SCM Appoint Clearing Agent and handover the document to the Agent for SGD. 6. Clearing Agent Determine the Expected Date of Delivery, monitor and track for shipping document and consignment arrival. Monitoring Template 7. SCM Generate the SON-CAP activation code online and send to Authorized Dealer Bank (ADB) for the Pre-Arrival Assessment Report (PAAR). Standard Organizatio n of Nigeria (SON) platform 8. ADB Receive shipping document and SON EPermit Code from Treasury (N-3/4) and upload into Nigeria Customs Service (NCS) Server within 14 days of shipment for PAAR generation and revert with PAAR to Treasury (N-3/4). NCS Platform, Email, S/N 3. Send copies of the Form M and LC to the supplier. Job Aid Email, Form M, LC Email, Shipping Document PAAR 9. Treasury (N-3/4) Receive PAAR and forward to SCM (N-3/4). Email, PAAR, 10. SCM (N-3/4) Prepare Single Goods Declaration (SGD) on NCS platform, obtain the Duty Assessment Slip and forward to Treasury (N-3/4) for Customs Duty Payment. NCS platform, Duty Assessment Slip, Email 11. Treasury (N-3/4) Effect payment through ADB, obtain acknowledgement receipt and forward to SCM (N-3/4). ADB, Email, payment receipt 12. SCM (N-3/4) Receive payment receipt and forward to appointed clearing/haulage agent. Email, payment receipt 133 NNPC Limited SCM Processes and Procedures 17.2 Clearing and Haulage Procedures S/N Responsible Party Description 13. Agent Arrange for consignment loading under customs supervision & deliver to NNPC Fast Track Warehouse from Shipping and Terminal Operators for customs examination. 14. SCM 3/4)/Agent 15. SCM (N-5/6) (N- Job Aid Request for material examination and customs release for onward delivery to required destination. NCS platform Upon NCS release, prepare agent document and forward to Finance for agent payment. Email, agent document Go to payment process. 17.3 S/N Clearing and Haulage Input & Output Documents Document Description Type Input Frequency Source Recipient As required Treasury (N-3/4) SCM (N-3/4) 1. Form M & Letter of Credit 2. Shipping Document Input/Output As required Vendor Treasury (N3/4) 3. Pre-Arrival Assessment Report (PAAR) Input/Output As required ADB Treasury (N3/4) 4. SON-CAP certificate Input/Output As required SCM 3/4) 5. Duty Assessment Input/Output Notice Slip As required NCS SCM (N-3/4) 6. Custom Duty Payment receipt Input/Output As required ADB Treasury (N3/4) 7. Invoice Input/Output As required Agent F&A (N- Treasury 134 NNPC Limited SCM Processes and Procedures 17.4 Clearing and Indicators Haulage S/N Performance Measure Key Performance Basis of Measurement Timeframe Target 1. Accuracy of Form & LC Number of material errors, omissions, and misrepresentations in the form M & LC. As required Zero error 2. Accuracy of Shipping Document Number of material errors, omissions, and misrepresentations in the shipping document. As required Zero error 3. Timely activation of the SON-CAP certificate Timeliness for issuance of SON-CAP certificate upon receipt of request. As required Two days 4. Timely generation of the Pre-Arrival Assessment Report (PAAR). Timeliness in generating the PAAR. As required One week 5. Timely collection of Duty Assessment Slip Timeliness submission assessment Agent. in of by As required One week slip 6. Timeliness of Custom duty payment Elapsed time from due payment date to actual date of disbursement. As required One week 7. Accuracy of payment processing Erroneous payments (duplicate payments, over/under payments) as a percentage of total payments. As required Zero % 8. Timeliness of customs release process Latest date for completion of process. As required One week 9. Timelines of payment of Agent invoice Latest date for payment of invoice. As required Forty-five days 135 NNPC Limited SCM Processes and Procedures 136