Culture of integrity in the private sector
To continue working closely with business and civil society to curb corruption, promote a culture of integrity and support private sector anti-corruption initiatives.
The commitment targets a concrete and sufficiently narrow policy area or anti-corruption mechanism in the area of business integrity.
This commitment has identified indicators that can be used as a reference in strengthening business integrity in Indonesia.
Several private sector corruption prevention initiatives have been included in the Stranas PK, such as BO implementation and anti-bribery management.1 The KPK implements prevention programmes for the private sector and SOEs, called Professional Integrity, abbreviated to Profit. As of March 2019, 132 private companies and SOEs have been engaged in the Profit programme.2 In addition, the KPK published a technical guidebook on business sector corruption prevention in December 2018. All companies can use this guide as a minimum reference in building and implementing a corruption prevention system.3
For business communities, the KPK formed the Regional Advocacy Committee (Komite Advokasi Daerah/, KAD), an anti-corruption working group for the private sector, to report problems doing business in the regions where corruption is prevalent. Along with regulators, KAD is also preparing recommendations to improve the business climate in their respective sectors. Through KAD, all business actors can build a climate of fair and healthy competition.4
The KPK is also accelerating cooperation with the Ministry of Manpower to develop integrity development experts (API) through the SKKNI API (Indonesian National Work Competency Standards for Integrity Development Experts). The competency standard is intended for experts who work to build integrity within a company. The initiative is in line with supreme court regulation No.13 of 2016 concerning procedures for handling corruption cases by companies.5
Challenges to effective commitment implementation
The private sector must create a breakthrough to prevent corruption in its businesses. KPK data shows that, since 2004-2019, there were 297 perpetrators of corruption in the private sector.6 Businesspeople were the largest group of perpetrators in that time span. The situation reflects the stagnation in corruption prevention in the private sector.
There are still concerns that corporations will lose business opportunities if they do not pay bribes in the process of winning tenders or in the granting of business licences. However, this paradigm is misleading and makes the business environment uncompetitive. The private sector needs to understand that conducting a business with integrity will provide greater opportunities, which can be an incentive for companies.
On the other hand, much private sector corruption has not been regulated by law. There are dark areas in this sector because state institutions cannot take action if there is an act of corruption. It is essential to have legal sanctions related to corruption in the private sector.
Opportunities to accelerate commitment implementation
Companies need to comply with supreme court regulation No.13 of 20167 and several other rules to create healthy businesses. These integrity values and principles should be adopted in written commitments initiated by the top ranks of management, such as owners, directors and commissioners.
In addition, an adequate anti-corruption programme needs to be developed within each company with reference to international standards such as the Corruption Prevention Guide for the Business World from the KPK, ISO 37001 regarding the anti-bribery management system, or Transparency International’s Business Principles for Countering Bribery.
The government and the DPR need to immediately ratify articles 21 and 22 of UNCAC on corruption committed by the private sector in the corruption law.
Business groups, through their associations, consortiums and MSMEs, have to support business integrity and need to be actively involved in the entire cycle of formulating corruption prevention actions. Business groups need to collectively declare anti-corruption commitments and strengthen anti-corruption mechanisms in each business.
Separate from commitments from top management, companies must require all employees to sign an integrity pact that forbids fraud, corruption and money laundering. Business associations must also encourage commitment to anti-corruption policies to be implemented in the businesses they support.
- KPK, BO section in National Strategy on Corruption Prevention, https://aclc.kpk.go.id/wp-content/uploads/2019/09/Session6_Dedi-Haryadi_Beneficial-Ownership-in-National-Strategy-on-Corruption-Prevention.pdf2019
- Republika, With Profit, KPK Prevents Corruption in Private and BUMN, https://nasional.republika.co.id/berita/nasional/hukum/pou8mp430/dengan-profit-kpk-cegah-korupsi-di-swasta-dan-bumn24 March 2019
- Kompas, Preventing Corporate Corruption, KPK Launches Prevention Handbook, https://nasional.kompas.com/read/2018/12/05/16224341/cegah-korupsi-korporasi-kpk-luncurkan-buku-panduan-pencegahan?page=all5 December 2018
- Timlo.net, Preventing the Practice of Bribery, KPK Holds Dialogue with Local Government and Business World, https://timlo.net/baca/102288/cegah-praktik-suap-kpk-gelar-dialog-dengan-pemda-dan-dunia-usaha/4 July 2020
- Integrity Indonesia, KPK Efforts to Eradicate Corruption in the Private Sector, 2019,
- KPK, Preventing Corruption, the Private Sector Must Create a Breakthrough, https://www.kpk.go.id/id/berita/berita-kpk/1621-cegah-korupsi-sektor-swasta-harus-lakukan-terobosan12 May 2020
- Supreme Court Regulation 13/2016 on Procedures for Handling Criminal Action by the Corporate https://bawas.mahkamahagung.go.id/bawas_doc/doc/perma_13_2016_web_fix.pdf·