ANTI BRIBERY

AND
CORRUPTION

F. HELIANTI SASTROSATOMO
 Overview: Our agenda items for today’s session

1. Anti-Bribery & Corruption: Its Global Impact

2. Understanding Anti Bribery and Corruption
3. Indonesian Anti-Corruption Law: Its Impact on Business
& Employees
4. Q & A session
Fight against Corruption – Background and
Perspective

What is this map? Any idea what colours might mean?

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Corruption: Is a Global Problem
Fight against Corruption –
Background and Perspective
How many bribes are paid each year?

More than USD 1 trillion, that‘s 1 million

times
1 million (USD 1,000,000,000,000)*

This means that 1 out of every 30 USD in

GDP in the world is being paid in bribes
each year.

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Potential Risks of ABC
• Ineligible for necessary
• Distrust within the ranks licenses or permits
• Company open to blackmail • Ban from doing
• Settlements business with
• Criminal Fines governmental entities
• Appointment of Compliance
• Debarment from
Monitor Costs to agency, World Bank, UN
• Prejudgment interest Continue and IMF activities
• Disgorgement of Profits Direct Costs
Doing • Prison sentences for
• Burden on company Business
(defense costs, executive individuals
time, lost resources)
• Asset forfeiture
Reputational
Collateral
• Lawsuits by harmed parties,
and Market
Costs • Loss of reputation or
such as competitors Costs goodwill
• Derivative Suits by • Detrimental effect on
Shareholders stock price
• Class Action lawsuits by • Impact on mergers &
investors acquisitions
• Tax law implications regarding
improper payments
Bribery & Corruption can have a massive
Financial Impact
"Small" upside – huge costs
Value Lost upside?
 Non-compliance with potential short-term business
up-side…
 … but often concealing underlying non-
competitiveness issues
1
Direct costs
 Significant internal and external costs due to
2 "firefighting mode"
 Nullification of contracts and permits
 Potential fines and disgorgement of profits
 Increased premiums of D&O and credit insurers
 Loss of reputation/de-motivation of employees
 Arrest of executives and employees
3
Indirect costs
 Loss of market position
 Significantly reduced access to talent
 External and internal investigations and monitoring
Time

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Example: The Siemens Case in Germany

The entire Siemens workforce of 400,000 people had to work 12

months to compensate for the costs of a corruption case.

Key figures
Continuing operations

(EUR m)
FY 2008 FY 2009
Financial impact of Corruption Case
Revenue 77,327 76,651 Disgorgements of profits, fines, fees, external
advisors (EUR m)
New orders 93,495 78,991
Income from
continuing 1,859 2,257 More than 2,000
operations
Employees 427,000 405,000

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Bribery & Corruption leads to severe
reputational damage
Recent Cases - US

Holcim ABCD measure_F.Helianti Sastrosatomo_LCA Director

Recent Cases - EUROPE
Recent Cases -ASIA

Holcim ABCD measure_F.Helianti Sastrosatomo_LCA Director 12

Corruption can kill the lives of innocent people

83% of all deaths from building collapse over the past

30 years occured in countries that are anomalously
corrupt.*

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 Overview: Our agenda items for today’s session

1. Anti-Bribery & Corruption: Its Global Impact

2. Understanding Anti Bribery and Corruption
3. Indonesian Anti-Corruption Law: Its Impact on Business
& Employees
4. Q & A session
What is Corruption and how is Bribery defined?

BRIBERY IS THE MOST COMMON

CORRUPTION FORM OF CURRUPTION.
IS THE ABUSE OF
ENTRUSTED POWER FOR A BRIBE IS TWO WAY – IT CAN BE
PRIVATE GAIN. GIVEN OR RECEIVED.

IT HURTS EVERYONE WHO MOST DEFINITIONS TALK ABOUT

DEPENDS ON THE GIVING OR TAKING AN
INTEGRITY OF PEOPLE IN A ‘ADVANTAGE’
POSITION OF AUTHORITY. OR ‘INDUCEMENT’ IN ORDER TO
PERFORM A FUNCTION
‘IMPROPERLY’.
Bribery can have many forms…

Bribes are not only about money

exhanged in brown envelopes or
wired to secret accounts.

A bribe can be anythin of value to the

person bribed, disguised as a gift,
hospitality or travel expenses, or it can
be a payment to an intermediary.
Common Examples of Bribery

Large Bribes
Facilitation (Grand Corruption) Use of Business
Payments Partners/
Intermediaries

Employing Common Forms Political Donations

of/granting benefits of Bribery
to relatives

Charitable Excessive Excessive Gifts

Contributions Hospitality
The common excuses don’t count…
Global enforcement is on the rise

Germany, Spain and other

EU countries are
increasing enforcement.

In the US, bigger financial

penalties; focus on
individuals, non-US
companies and alternative
legal strategies.

Brazil and Chile (and other LATAM

countries) processing tougher, new
anti‐corruption laws under high pressure
from OECD. China and the US are increasing
cooperation and begin establishing
a framework for information sharing
and enforcement; China enacted
its own foreign bribery law.

Holcim ABCD measure_F.Helianti Sastrosatomo_LCA Director

ABC Legislation Landscape – Trend
Overview: Our agenda items for today’s session

1. Anti-Bribery & Corruption: Its Global Impact

2. Understanding Anti Bribery and Corruption
3. Indonesian Anti-Corruption Law: Its Impact on Business & Employe
4. Q & A session

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Global enforcement is on the rise

Rekapitulasi Tindak Pidana Korupsi. Per 31 Mei 2018, di tahun 2018 KPK melakukan
penanganan tindak pidana korupsi dengan rincian: penyelidikan 76 perkara, penyidikan 85
perkara, penuntutan 50 perkara, inkracht 47 perkara, dan eksekusi 48 perkara.
Relevant anti-corruption laws and
regulations in Indonesia
1. Law No. 11 of 1980 on Bribery (Anti-Bribery Law)
2. Law No. 28 of 1999 on State Management that is Clean and Free from
Corruption, Collusion and Nepotism
3. Law No. 31 of 1999 on Corruption Eradication (last amended by Law No. 20
of 2001) (Anti-Corruption Law)
4. Law No. 30 of 2002 on the Corruption Eradication Commission (KPK)
5. Law No. 46 of 2009 on the Corruption Court
6. Law No. 8 of 2010 on the Prevention and Eradication of Money Laundering
7. Other regulations and codes of conduct applicable to state apparatus,
government officials or civil servants that prohibit the receiving or
requesting of gifts or payment for their personal benefit.

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Types Of Corruption Based On Indonesian
Law

Loosing State’s
Fund

Bribery
Unfair Actions and
Gratification

TYPES OF
CORRUPTIONS

Conflict of
Embezzlement
Interest

Extortion
Bribery

To perform/ Whether or
Has relation
not to not it has
with position
perform been done
Bribery: Has a connection/relation with a
position

The Subject that offers the bribe

anyone offering gifts/payment or promises to a civil servant with a view to abuse the power
or authority vested in the post or position, or by the provision of gifts of promises is
considered to have vested interest in the post or position shall be fined to a maximum of
sentenced 3 (three) years and/or fined to a maximum of IDR 150,000,000 (Article 13
Indonesian Corruption Law)

The Subject that receives the bribe

Sentenced to a minimum of 1 (one) year and to a maximum of 5 (five) years and or fined to
a minimum of IDR 50,000,000 and fined to a maximum of IDR 250,000,000, civil servant or
state apparatus which receives gifts or promised within their knowledge or should be
known that the gifts or promised given for their power or authority vested in the post or
position, or according to the contributor still has something to do with his/her position.
(Article 11 Indonesian Corruption Law)
Bribery

To perform/
not to perform
Bribery: to perform or not to perform
The Subject that offers the bribe

Sentenced to a minimum of 1 (one) year and maximum of 5 (five) year and or be fined a
minimum of IDR 50,000,000 and maximum of IDR 250,000,000 anyone that gives or
promised something to a state apparatus or civil servant with the aim of persuading
him/her to perform an action or not to perform an action because his/her position in
violation of his/her obligation. (Article 5 point 1 Indonesian Corruption Law)

The Subject that receives the bribe

A civil servant or state apparatus who receives prize or promise believed to have been
given to encourage him/her to do something or not to do anything because of his/her
position in violation of his/her obligation, shall be sentenced to life imprisonment or a
minimum of 4 (four) year's imprisonment and a maximum of 20 (twenty) year's
imprisonment and be fined minimum of Rp200,000,000 (two hundred million rupiahs) and
a maximum of Rp1,000,000,000 (one billion rupiahs).” Article 12 point a Law on Eradication
Corruption.
 civil servant
Government Official
(Pegawai Negeri)
Acoording to Law no. 31 of 1999:
1. Law no. 8 of 1974 and Law no. 43 of 1999:
a. Government Official (Pegawai Negeri Sipil);
b. Army (TNI); and
c. Police (POLRI);
2. Indonesian Criminal Code:
a. Who by virtue of regulation continuously or
temporarily charged with a public office;
b. Executive together with the sworn in
functionaries and servants of railway services;
3. People receiving salaries or wages from the state
or regional finance;
4. People receiving salaries from a corporation that
receives assistance from state or regional finance;
5. People receiving salaries or wages from other
corporation which use capital or facilities from the
state or from the public.
State Apparatus
(Penyelenggara Negara)
According to Law number 28 of 1999 on State
Administration Without Corruption, Collution and
Nepotism:
1. state apparatus on State’s Highest Institution;
2. state apparatus on State’s High Institution;
3. Minister;
4. Governor;
5. Judges in any level of courts;
6. Other state apparatus under the regulations and
legislations (Vice Governor, Ambasador);
7. Other functionaries having strategic function:
- Directors, Commissioners and other structural
officials in a State Owned Company and Region
State Owned Company;
- Chairman of Bank of Indonesia:
- Head of State Owned University;
- Official of 1st Eselon (or equal) in civil, military and
police institution;
- District Attorneys;
- Investigators;
- Court’s Bailiff; and
- Head and Treasury of Project.
Bribery

Whether the
action has
been
committed or
not yet
committed
Bribery: Whether the action has been
committed or not yet committed

The Subject that offers the bribe

Any person who gibes something to a public or state apparatus because of or in relation to something in
violation of his/her obligation whether or not it is done because of his/her position shall be sentenced to
a minimum of 1 (one) year imprisonment and a maximum of 5 (five) year’s imprisonment and a
maximum of IDR 250,000,000 (Article 5 point 1b Indonesia Corruption Law)

The Subject that receives the bribe

A civil servant or state apparatus who receive a payment believe to have been given due to the
fact that he/she has done something or has not done something in relation to his/her position
in violation of his/her obligation shall be sentenced to life imprisonment, or a minimum of 4
(four) years imprisonment and a maximum of 20 (twenty) years imprisonment and be fined
minimum of IDR 200,000,000 and a maximum of IDR 1,000,000,000 (Article 12b Indonesian
Corruption Law)
Gratification

A voluntarily given Payments/gifts given to

reward or recompense a civil servant beyond
for a service or benefit;
their regular salary.
a gratuity.
(Black’s Law Dictionary (Kamus Besar Bahasa
Seventh Edition) Indonesia/ third edition)
Gratification Definition

The term ”gratification” in this article is defined as”

Gratification is payments or gifts in broad sense, including money, goods, discount,

recompense, interest-tree loan, travel ticket, lodging, tour, free medicine, and other
facilities. The gratification includes the gratification received at home or from abroad and
the gratification done using electronic device or not using electronic devices. (Explanation
of Article 12 B UU TPK)
Gratification Offense
(Article 12B Indonesian Corruption Law)

Any gratification for a civil servant or state apparatus shall be consideres as a bribe when it
has something to do with his/her position and is against his/her obligation or task

A civil servant or state appparatus who is found guilty of the criminal offense as reffered to
in paragraph (1) shall be sentenced to life imprisonment or a minimum of 4 (four) years
imprisonment and a maximum of 20 (twenty) years imprisonment and be fined a minimum
of Rp. 200,000,000 and a maximum of Rp. 1,000,000,000
of Article 12 B UU TPK)
Gratification to a Civil Servant

• Money
• Object,
 Act of Giving in general • Discount
terms; • Commission,
• Loan without interest,
 Received inside or outside
• Airline Ticket,
of Country;
• Place to stay,
 By utilizing a media • tour,
electronic or others • Unnecessary medical
payment,
• Other Facilities.
Exception on Gratification

Gratification to a Judge
Gifts/payment given in a special occasions (wedding, birthday, religious events, traditional
ceremony, farewell or other commemoration) the value of the gifts must not exceed IDR
500,000 and not continuous within a certain period of time

(Joint Decision of Head of Indonesian Supreme Court and Judicial Commission No.
047/KMA/SKB/IV/ 2009 – No. 02/SKB/P.KY/IV/2009 on Ethical Code and Guidance and
Judge Code of Conduct)

Other civil servant

• Corruption Eradication Commission stipulate that gratification may be given with the
value of the gratification not exceeds the value of IDR 1,000,000
• The concerned gratification is given must be in a special occasion such as wedding and
religious activity)
Embezzlement
(art. 8 and 10 of Law 20/2001)

An Embezzlement if: (art. 8 and 10 of Law 20/2001)

Article 8:
Officials or other person receiving duty to exercise public position, intentionally embezzle
money or commercial paper deposited because of his/her position or allowing the money
or the commercial paper to be taken or embezzled by others.

Or
Article 10:
Officials or other person receiving duty to exercise public position embezzle, destroy, or
caused a property, deed, letter, or list to convince or prove before an authorized official
where the property, deed, letter or list is retained because of his/her position.
Forgery
A civil servant or non-civil servant who is assigned to take up a general post continuously or
temporarily, and intentionally falsifies books or register books specifically for administrative
audit, shall be sentenced to a minimum of 1 (one) year’s imprisonment and a maximum of
5 (five) years imprisonment and be fined a minimum of Rp.50.000.000 (fifty million rupiah)
and a maximum of Rp. 250.000.000 (two hundred and fifty million rupiah)

Extortion (art 12 para (e) (f) (g) of Law 20 /2001)

Paragraph (e):
A civil servant intentionally benefits himself/herself or other people in violation of law, or by
abusing his/her power forces a person to give something, pay, or receive discounted
payment, or to do something for himself/herself; or
Paragraph (f):
A civil servant who, at the time of performing task, asks, receives or cuts payment from
other civil servant or from the general treasurer as if the other civil servant or the general
treasurer owed him/her; or
Paragraph (g):
A civil servant who, at the time of performing task, asks or receives job or goods from other
party as if the latter owed him/her.