1. OPINION
CRASH COURSE
Logistics Firms Face Challenges in Northern Iraq By Omur Oztas
Kurdistan’s Taqtaq oil fi eld, at the site of TTOPCO (Taq Taq Operating Co.), owned
by Turkish GENEL Energy and Canadian Addax. / Credit: MAXPPP/Newscom
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My fi rst experience with the
Kurdistan Regional Govern-ment,
or KRG, the offi cial
ruling body in Northern
Iraq, was landing in the city of Erbil.
As soon as the plane touched the
ground, most of the passengers started
switching on their cell phones and some
of them got up and tried moving towards
the door, over the fl ight attendant’s
admonitions.
To understand how things work here,
I knew that I had to get a crash course in
adaptation.
In the KRG, the main logistics
operations are handled on behalf of
international oil and gas companies or to
the companies that are serving them.
Oil and gas companies have the high-est
expectations for quality as well as
Health Safety Security and Environment
standards, or HSSE. Before working
with any of them, you must prove that
you meet all their requirements, such as
quality standards, up-to-date documen-tation
and rigid ethics and health, safety
and security policies.
HSSE probably sounds very nice and
normal from whichever location you
are reading from. However, sit back and
imagine that you are planning to provide
such a service where alcohol tests do not
exist, where people drive their cars with
their babies on their lap, where truck
drivers drive their trucks with slippers
instead of shoes, where almost no one
has ever read a quality manual, and
where no one has ever used any safety
equipment such as coveralls, eye protec-tion
glasses, safety boots, safety vests,
high vision vests and safety hats.
Utilization of safety equipment has
to be forced upon them, and they only
accept its use so that they do not lose
their job. Therefore, safety equipment is
actually used not to protect the person
but to protect the person’s job. Indeed, it
is a very different logic.
Continuous training programs as
well as vivid examples of what happens
if no safety equipment is worn is the only
path to establishing a culture of HSSE
and of high standards. Therefore, even
before you contemplate working directly
with international oil companies, your
fi rst task is to train your local staff.
As you cannot hire all your staff from
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2. OPINION
expats, you have to work with the local
workforce and spend a lot of time teaching
them a culture and the techniques that are
able to get things built safely and securely.
It is important to make HSSE manu-als
easily available and understandable.
They should be in the local language as
well as being visually very explicit. Take
each person one on one and explain your
expectations.
Visual aids and practical demonstra-tions
also help drive home the importance
of having HSSE standards as well justify-ing
the use of protective equipment. This
whole process is very time consuming
and time is an expensive commodity.
Another important issue is law and
regulations for logistics operations for
regular market customers, or those who
are not directly associated with the oil
extractions.
Rules throughout the region lack
continuity and are changing almost daily.
You have to adapt, otherwise you will not
be able to compete against local competi-tion.
This puts your company’s reputation
as well as your customer’s at risk.
Customs regulations and import
regime are vital to know. Some rules are
quite different from the rest of the world.
For example, you have to mention the total
liters capacity for each refrigerator when
preparing your packing list. Failing to do
so will cause you to not be able to fi nal-ize
the import customs procedure. You
have to know this information prior to
the shipment and inform your customer
accordingly to take necessary action.
Another remarkable example is
for “split air conditioners,” which are
counted by the box. Therefore, one real
unit (one inner part and one outer part)
would actually account as two instead
of one. Therefore, if you do not mention
this in your packing list, it will cause you
a problem.
These peculiarities force you to take
action before your cargo reaches the bor-der.
It is also very important to study the
regulations, which takes time. Even if
you have your own customs broker, you
cannot depend on them.
There are new import customs regula-tion
and shippers have to cooperate with
Bureau VERITAS or SGS to get preliminary
inspection (Certifi cation of Conformity)
prior to shipment. This certifi cate indicates
the quality test of the products as well as
whether the goods are qualifi ed to enter the
Iraqi territory. This protects the importer
country, but also puts the shipper at a disad-vantage
cost-wise.
For professional logistics services in
Iraq, one needs patience, hard work and
dedication – more than any other region.
But with the newly educated generation,
and immigration with more advanced
countries, KRG and Iraq will continue
growing in the positive direction. BB
Omur Oztas is country manager of
Land Air Maritime LLC.
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