A Guide for Mid-Sized Companies in the Oil & Gas Industry ... · PDF fileA Guide for Mid-Sized...

A Guide for Mid-Sized Companies in the Oil & Gas Industry in Indonesia

Center for InternationalPrivateEnterprise

Disclaimer: This publication by the Center for International Private Enterprise (CIPE) and the Indonesia Business Links (IBL) provides general information related to anti-corruption compliance based on international best practices and is meant for informational purposes only. This publication does not provide legal advice of any kind and should not be used as a substitute for obtaining legal advice. Although CIPE and IBL have gone to great lengths to make sure the information in this guide is accurate, it cannot guarantee that the information is complete or up-to-date. CIPE and IBL strongly recommend that readers consult a licensed attorney if they require legal advice.

Copyright © 2015 by the Center for International Private Enterprise. All rights reserved.

The Center for International Private Enterprise (CIPE) strengthens democracy around the globe through private enterprise and market-oriented reform. CIPE is one of the four core institutes of the National Endowment for Democracy and an affiliate of the U.S. Chamber of Commerce. Since 1983, CIPE has worked with business leaders, policymakers, and civil society to build the institutions vital to a democratic society. CIPE’s key program areas include enterprise ecosystems, democratic governance, business advocacy, and anti-corruption & ethics.www.cipe.org

Indonesia Business Links (IBL) is a not-for-profit foundation, established in response to the Indonesian economic crisis of 1998. The organization aims to contribute towards the creation of sound and ethical business practices in the country. Since 1999, IBL has been actively promoting ethical business practices by organizing workshops and capacity building programs for mid-sized and medium sized companies. IBL’s scope of activities include advocacy, diffusion of information and knowledge about CSR, as well as actively promoting partnership between the private sector, government and NGOs to achieve sustainable development. www.ibl.or.id

Lead Authors:

Chrysanti Hasibuan-Sedyono, Vice Chair, Board of Management, IBL

Anna Nadgrodkiewicz, Director, Multiregional Programs, CIPE

Maiko Nakagaki, Global Program Officer, CIPE

Contributors:

Ninik Anissa, Research Manager, Public Interest Research and Advocacy Center

Mohamad Fahmi, Business Ethics Program Manager, IBL

Tjut Fidelia Sari, Business Ethics Program Officer, IBL

John Morrell, Regional Director, Asia, CIPE

CENTER FOR INTERNATIONAL PRIVATE ENTERPRISE (CIPE) / 1

CIPE and IBL greatly appreciate the following individuals for sharing their experiences for this guide:

• A Hamid Batubara, Chevron Pacific Indonesia

• Ahmad Taher, KPK

• Ahmad Yuniarto, Biru Peduli Foundation, former Schlumberger Group Indonesia

• Aldi, KPK

• Androngi, Star Energy

• Andy Purwana, KPK

• Azhar, Pertamina

• Budi Ibrahim, SKK Migas

• Cindy Meilani, BP Berau

• Djindar Rohani, Inpex Corporation

• Dwi Asianti, SKK Migas

• Dwijatno Judiharto, SKK Migas

• Edi Jarianto, Pertamina

• Giri Suprapdiono, KPK

• Irfan Setiadi, Pertamina

• Ius Oilianto, Star Energy

• Luki Ariwidianto, SKK Migas

• Maruli Tua, KPK

• Retno Sari Agustina, Vico Indonesia

• Ronny, SKK Migas

• Veronica Minotty, Vico Indonesia

• Waluyo, former KPK and former Pertamina

• Yudistira, Pertamina

ACKNOWLEDGEMENTS

2 / INDONESIA BUSINESS LINKS (IBL)

Introduction .................................................................................................. 5

The oil and gas sector in Indonesia ...................................................... 7

Evolution of contract patterns ............................................................................ 7

Relationship between central and local government ............................................ 8

Regulatory institutions in the Production Sharing Contract (PSC) Scheme ........ 8

New regulatory institutions ................................................................................ 8

The importance of anti-corruption compliance in the

oil and gas sector ...................................................................................... 10

Why third parties need to follow the same standards as the companies they do

business with .....................................................................................................12

Overview of anti-corruption compliance challenges in the

oil and gas sector .......................................................................................14

Typical corruption risk factors ..........................................................................14

Corruption risk factors for the oil and gas industry in Indonesia ........................15

Common ways in which third parties can endanger the compliance

of their partner companies .................................................................................19

TABLE OF CONTENTS


TABLE OF CONTENTS

TABLE OF CONTENTS

Designing and implementing a compliance program .....................21

What are multinational corporations expecting from their business partners? .....21

Key elements of compliance ..............................................................................22

Risk assessment .................................................................................................22

Standards of conduct/policies and procedures ..................................................23

Compliance oversight, commitment, and resources ..........................................24

Education and training .....................................................................................26

Monitoring and auditing ..................................................................................28

Reporting and investigating ..............................................................................28

Enforcement, discipline, and incentives .............................................................30

Response, prevention, and improvement ..........................................................30

Conclusion ....................................................................................................31

Appendices ..................................................................................................32

Resources and Bibliography ..................................................................35


Fighting corruption seems to be an uphill battle in Indonesia. While there is a broad global consensus that corruption suppresses competition and

innovation—thus hampering entrepreneurship and economic growth—countering it is a challenge due to corruption-tainted business environments.

Corruption, in the context of this guidebook, refers to both corruption involving public officials and commercial corruption occurring through improper dealings between companies.

In the case of Indonesia, while the situation has been improving, anti-corruption rules and regulations are still regarded to be weak or unevenly enforced, government-led steps to fight corruption remain insufficient or ineffective, and bribes are a widely accepted part of doing business.

This situation is especially true for mid-sized companies with limited resources. In emerging markets where corruption remains widespread, companies often struggle just to survive and must do business in the most cost-effective way, which may include bribery. Under such circumstances, meeting ethical standards can be a challenge. However, in today’s globalized world, where international value chains stretch across borders and continents, anti-corruption compliance provides a vital competitive advantage. Ethical companies are more attractive to potential investors and employees and are more likely to be engaged in long-term arrangements with business partners. A clear commitment to integrity and demonstrable steps taken toward anti-corruption compliance, therefore, presents significant opportunities.

The Center for International Private Enterprise (CIPE) recently published Anti-Corruption Compliance: A CIPE Guide for Mid-Sized Companies in Emerging Markets, which targets audiences largely underserved by existing resources on anti-

In emerging markets where corruption remains widespread, companies often struggle just to survive and must do business in the most cost-effective way, which may include bribery.

INTRODUCTION


INTRODUCTION

corruption. CIPE and Indonesia Business Links (IBL) subsequently identified a need to develop a supplemental guide for small to mid-size suppliers of national and multinational companies in the oil and gas sector given this sector’s particular exposure to corruption risk.

This guide aims to provide best practices for overcoming common challenges in adhering to anti-corruption compliance, making it easier for suppliers and distributors in the oil and gas industry to combat corruption in their operations.


Indonesia has long been an oil and natural gas producing country, and the industry has always been heavily regulated. Multinational companies (MNCs)

are typically the dominant player in the oil and natural gas sector, but lately a few Indonesian companies have been active in exploration and production as well. While there are companies doing business very responsibly and ethically, corruption is rampant in this sector, mainly due to contract patterns between oil companies, the central government, and local governments—making regulators extremely powerful.

While corruption involving government contracting may not directly affect large oil and gas company vendors and suppliers, it has an indirect effect through the operating environment created by these contracts and by the broader business conditions. Subsequently, vendors and suppliers encounter other corruption risks directly in their operations, specifically bribery.

Evolution of contract patterns

During the Dutch occupation of Indonesia, oil and gas resource management was under a concession system; for a certain amount of royalty and tax, the government gave the authority over assets to oil companies. In 1945, when Indonesia declared independence and created a new constitution1—which emphasized that strategic natural resources belong to the Government of Indonesia—the concession system was considered to be inappropriate, and therefore came under review. The system evolved into “contract of work arrangements” (kontrak karya) in 1961, whereby foreign oil companies were only allowed to be operators or contractors, and were required to sign a contract of work with one of the three state-owned oil companies: Permina, Pertamin, or Permigan. Under this agreement, foreign oil companies were expected to assume all the business risks and were given the authority of management and operations. While the contract of work arrangement system was an improvement over the concession system, it only lasted a few years.

The Government of Indonesia (GoI) then imposed a production sharing contract (PSC) system, a breakthrough in the industry at the time. Under the

_____________________________

1 Undang Undang Dasar 1945 (The 1945 Constitution of The State of The Republic of Indonesia). http://www.setneg.go.id/images/stories/kepmen/legal_product/uud_1945.pdf

THE OIL AND GAS SECTOR IN INDONESIA



PSC system, the GoI owned the oil fields and exploration installations, while the contractors carried the risks, including failure to discover oil. Contractors who successfully discovered oil gained the right to use part of the money earned from oil production for investment and operational expense cost recovery. However, this model was vulnerable to unethical and fraudulent practices due to the loosely defined cost recovery formula.

Relationship between the central government and local government

During President Suharto’s rule from 1967 to 1998, national oil revenues were almost entirely absorbed by the central government. After the fall of the Suharto government in 1998, local governments with oil fields demanded fair allocation of revenue. The request was eventually granted and policies were developed to ensure local communities enjoyed the monetary benefits of oil and gas drilling in their respective areas. Unfortunately, the new policies created complicated and lengthy licensing processes, leading to opportunities for bribery and corruption.

Regulatory institutions in the Production Sharing Contract (PSC) Scheme

Pertamina

Serving as both a regulator and operator, Pertamina became a very powerful entity. However, due to mismanagement and corruption, the company nearly collapsed and brought the country’s economy to the verge of bankruptcy. To save Pertamina, President Suharto formed a team that fired the CEO of the company in 1976. Later, the regulation UU Migas 22/20012 was passed to end Pertamina’s regulatory rights. In doing so, regulators set an expectation for the oil company to focus solely on being an operator.

New regulatory institutions

Following the abolition of Pertamina’s regulatory rights, the regulation of the oil and gas industry was eventually transferred to two newly created government entities: BP Migas and BPH Migas. Upstream sector regulation was delegated to BP Migas (Badan Pelaksana Kegiatan Usaha Hulu Migasor or Upstream Oil and Gas Regulatory Body) while the downstream sector was regulated by BPH Migas (Badan Pengatur Hilir Migas or Downstream Oil and Gas Regulatory Body).

_____________________________

2 Law of Republic of Indonesia, Number 22/2001 about Oil and Gas http://www.setneg.go.id/components/com_perundangan/docviewer.php?id=269&filename=UU_no_22_th_2001.pdf



In 2012, both BP Migas and BPH Migas were dismissed by the Constitution Court and the government formed SKK Migas (Upstream Oil and Gas Regulatory Special Task Force) through Presidential Decree 9/2013.3 SKK Migas was assigned management of upstream oil and gas business activities under a cooperation contract, with the expectation that the exploitation of state oil and gas natural resources would generate maximum benefit and revenue for the citizens.

Since its inception, SKK Migas has been making efforts to improve the environment of the oil and gas sector in Indonesia but has faced challenges. Infamously, Rudi Rubiandini, the head of SKK Migas who pledged to crack down on contractors that illegally traded or sold their exploration licenses, was himself involved in corrupt dealings and was arrested by the Corruption Eradication Commision (KPK) in August 2013 (Appendix 2).

_____________________________

3 Law of Republic of Indonesia, Number 9/2013 about Operation Management of Upstream Oil and Business Activities of Natural Gas http://www.skkmigas.go.id/wp-content/uploads/2013/01/Perpres0092013.pdf

“ Natural resources-based industries have been KPK’s priority... Why? Because the field is difficult and complex. We see that companies in the sector are mostly ethical, but sometimes practice unethical transactions in cost recovery, facilitation payments, etc. We sometimes see that when KPK enforces new rules, companies avoid them by using agents or intermediaries. KPK is currently expanding our focus on intermediaries and third party vendors.”

Giri Suprapdiono, Director, Directorate of Gratification—Indonesia Corruption Eradication Commission (KPK RI)


The World Economic Forum and the World Bank estimate that corruption costs more than 5 percent of global GDP (USD 2.6 trillion) each year with

over USD 1 trillion paid in bribes.4 In many parts of the world, corruption makes up 10 percent of the total cost of doing business and up to 25 percent of the cost of procurement contracts in developing countries. Opportunity costs associated with corruption can be even higher.

Corruption distorts market mechanisms, prevents fair competition, and deters investments, thus stifling growth and future business opportunities. It also exposes companies to legal risks and erodes public trust and confidence. MNCs in the oil and gas industry often publically declare their commitments to compliance and anti-bribery, including in their supply chains, which involve smaller local companies.

For example, Chevron stated, “…we comply fully with laws and regulations in all countries we do business in. We expect our suppliers and contractors to conduct their business in compliance with these requirements as well. Bribery of any government official in any country is strictly against company policy, even if refusal to make such payment would result in the loss of a business opportunity. Chevron complies with the US FCPA [Foreign Corrupt Practices Act] and other applicable international anti-corruption laws. We expect our suppliers and contractors to do the same.” (Appendix 1. Chevron)

Similarly, Schlumberger in its Business Ethics Policy clearly prohibits bribery by its suppliers and mandates reporting of misconduct: “Any Supplier doing business/entering into a contract with Schlumberger agrees and represents that they shall promote and strictly abide by the Schlumberger Code of Ethics. Any Supplier doing business/entering into a contract with Schlumberger has the obligation to inform Schlumberger of any act (or omission) of Schlumberger’s employees that is not in compliance with the foregoing. Failure to comply will be deemed a material breach hereunder, entitling Schlumberger to immediately terminate its agreement with Supplier, notwithstanding any of its other rights hereunder.” (Appendix 1. Schlumberger)

_____________________________

4 Organisation for Economic Co-operation and Development, The rationale for fighting corruption, 2014, http://www.oecd.org/cleangovbiz/49693613.pdf

THE IMPORTANCE OF ANTI-CORRUPTION COMPLIANCE IN THE OIL AND GAS SECTOR



Business integrity, including a clear anti-bribery and anti-corruption commitment, has been an integral part of the Shell General Business Principles for many years. They state, “We do not tolerate the direct or indirect offer, payment, soliciting or acceptance of bribes in any form. Facilitation payments are also prohibited.” (Appendix 1. Shell)

Increasingly, local companies have taken notice and made similar commitments to integrity in their businesses. Star Energy, a local oil and gas company founded in Indonesia in 2003, developed and published its own code of conduct and whistleblower program. In its code of conduct, Star Energy elaborates on fraud, kickbacks, gratuities, and bribery as prohibited practices. (Appendix 1. Star Energy)

In addition to ethical considerations, there is a strong business case for companies to prevent corruption. Corporations have much to gain from implementing anti-corruption compliance. By doing so, they can reduce corruption-related costs, improve product and service quality, better retain valuable employees, and maintain an honest reputation that attracts responsible business partners and/or investors. Strategically thinking companies should strive for integrity as a matter of risk management and sustainable business practice, especially in countries where bribery and corruption are rampant.

Many MNCs and local companies implement anti-corruption compliance programs in their operations, as well as anti-corruption collective action initiatives in countries where they operate. For example, Chevron is a co-founder of the Indonesia Integrity Initiative launched in 2014. The Indonesia Integrity Initiative is a private sector-led initiative coordinated by Indonesia Business Links that aims to support business leaders from diverse industrial sectors to promote clean and ethical conduct in doing business and ensure a level playing field among the members.

Moreover, regulators in many countries now mandate compliance policies for the oil and gas industry, including anti-corruption compliance. In Indonesia specifically, SKK Migas imposes a thorough Standard Operating Procedures (SOP) policy for upstream oil and gas companies. The SOP policy covers many areas including trade regulations, health safety and environment, assets management, project management, monitoring, and contractor appraisal.5 It also has a section on ethically managing supply chains, which outlines compliance in decision-making, operations, and bribery prevention measures that requires companies to refrain from asking for, offering, accepting, or promising something of value either directly or indirectly.

_____________________________

5 Pedoman Tata Kerja 007, 2nd revision, 2011



Why third parties need to follow the same standards as the companies they do business with

Under various legal frameworks around the world—such as the US Foreign Corrupt Practices Act and the UK Bribery Act—companies are held liable for acts of corruption by their third party vendors, (e.g., consultants, suppliers, and distributors). Moreover, conducting risk-based due diligence on third parties is a legal expectation in countries that have ratified the OECD Anti-Bribery Convention and/or the United Nations Convention against Corruption. Conducting adequate due diligence may help organizations reduce, and under some laws even avoid, the risk of criminal punishment for corrupt behavior of third party vendors. Therefore, to be attractive business partners for MNCs, mid-sized companies serving as suppliers, agents, and contractors in the oil and gas value chains should follow the same standards as the corporations with which they do business.

Such expectations are clearly spelled out by many MNCs. For instance, Chevron states in its guideline for third party vendors that “[s]uppliers and contractors play a vital role in our success and we rely heavily on them to help us deliver top tier business results. At Chevron it is not only about delivering business results; it is about delivering them the “right” way, The Chevron Way, in a sustainable manner. This document outlines the expectations we have for the suppliers and contractors we partner with. We do not make compromises in these areas and we expect Chevron employees, suppliers and contractors to always adhere to the letter, spirit and intent of these expectations and values.” (Appendix 1. Chevron)

Globalization, which continues to stretch the value chains of companies across international borders, makes compliance of vendors more important than ever to MNCs. The global legal constraints and the prospect of significant fines make MNCs particularly concerned about corruption committed by their local business partners. These same factors explain why local partners that can prove their serious commitment to anti-corruption compliance have a higher chance of engaging in a trusted, long-term business relationship with MNCs.



“ It is good that nowadays the business sector in Indonesia is seriously encouraging implementation of compliance programs. One mode is through a due diligence process of vendors, which should go beyond the basics like disclosing its Code of Conduct. Internally, to encourage employees’ compliance, Pertamina is currently developing an IT based reporting system comprising of the Code of Ethics, statement of conflicts of interest, and others. Such systems are still no guarantee for absolute compliance, but it is at least an attempt to minimize risks.”

Irfan Setiadi, Compliance—Pertamina


Typical corruption risk factors

Corruption has multiple roots, but generally can be attributed to the poor design of institutions. According to the CIPE reform toolkit, Combating Corruption: A Private Sector Approach,6 key corruption causes include:

1. Unclear, complex, and frequently changing laws and regulations: When laws are contradictory or require heavy interpretation, the discretionary power of officials is amplified, increasing the risk of arbitrary, self-serving decisions. When laws are unpredictable, companies do not know for sure their rights and obligations, so they have difficulty complying fully and defending themselves against unfair enforcement.

2. Lack of transparency and accountability: When deals are made behind closed doors it becomes impossible to assess the criteria behind decisions and whether they serve the public interest or respect the law. If violators from both the public and private sector conceal their transactions, they escape being held accountable.

3. Lack of competition: Companies producing in a monopolistic or cartel-dominated market have a strong incentive to win government favor for their narrow interests, especially if the monopolies are mandated by government. This situation is common in the oil and gas sector where government control is strong and often monopolistic.

4. Low public sector wage: When officials cannot meet their daily needs through their salaries, they often resort to corruption to supplement their inadequate income.

5. Inadequate, inconsistent, and unfair enforcement of laws and regulations: Even when laws to combat corruption exist, lack of enforcement can invite abuse of the system. A weak justice system, low penalties, and a high cost of compliance can render laws ineffective.

_____________________________

6 CIPE, Combating Corruption: A Private Sector Approach, 2011, http://www.cipe.org/publications/detail/combating-corruption-private-sector-approach

OVERVIEW OF ANTI-CORRUPTION COMPLIANCE CHALLENGES IN THE OIL AND GAS SECTOR



In Indonesia, all the above points (except a lack of competition) exist in varying degrees, creating rampant corruption throughout the country. The oil and gas sector is especially vulnerable to corruption due to the magnitude of money involved in the industry.

Corruption risk factors for the oil and gas industry in Indonesia

In April 2015, the leading newspaper Kompas co-hosted with the Indonesian Petrolem Association a discussion with stakeholders in the upstream sector of the Indonesian oil and gas industry about the licensing process in the country. Among other things, this discussion revealed an astounding number of steps involved in licensing and permits. For investors to obtain exploration permission, they were required to have 341 permits and licences from 17 different offices in both the central and local governments, and a processing time of 10 to 15 years.7 Other sources stated that the process involved 6000 sheets of documents.8 Such complicated licensing processes created an environment conducive to bribery, corruption, and extortion. It has been documented that contractors directly bribed officers from the Ministry of Energy and Mineral Resources (ESDM), SKKMigas, local government, and even members of the Parliament. (Appendix 2)

To address the licensing problem, the Director of Oil and Gas and Mineral Resources announced that ESDM would simplify the licensing procedure for the oil and gas sector from 51 steps to 42 steps starting May 2015, and that the entire process would be housed under one department: the Investment Coordinating Body. The new policy aims to make Indonesia more attractive for potential investors, and also reduce the corruption risk.9

Another potential risk of corruption, which was identified during a focus group led by IBL with stakeholders, occurs during the procurement process in the oil and gas industry. According to Dr. Waluyo, former Deputy of the Corruption Eradicaton Commission and Director of Pertamina, there are many areas that may lead to corruption during the procurement process in the oil and gas sector.

The following table is a summary based on a presentation Dr. Waluyo delivered in May 2014 during a training session for employees of the Corruption Eradicaton Commission.

_____________________________

7 “Tak Tahu Berapa Izin...” Kompas 29 April 2015. http://print.kompas.com/baca/2015/04/29/Tak-Tahu-Berapa-Izin

8 “Mulai Mei, Izin Migas Tidak Perlu ke Kementerian ESDM” Katada 30 April 2015 http://katadata.co.id/berita/2015/04/30/mulai-mei-izin-migas-tidak-perlu-ke-kementerian-esdm

9 Ibid



Procurement stages & potential for corruption

STAGES DESCRIPTION POTENTIAL FOR CORRUPTION

1 Procurement planning

Mark-up of budget

“Directed” plan toward one or a few companies

Unrealistic schedule

2 Selection of awards committee members

No transparency in committee setting

Committee has no integrity

Committee neither independent nor accountable

3 Prequalification of suppliers

Those with connection to the awards committee may not submit the right documents but are accepted by the committee members

“False but real” (aspal) administration documents (using a genuine form but with the name of a supplier that is not entitled to prequalification)

Evaluation not in line with criteria

4 Bidding document preparation

“Directed” bid specifications

Evaluation criteria biased to favor certain bidders

Non-standard bidding document

5 Bidding announcement

Announcement made in a way to favor certain bidders

Incomplete bidders

Short-turn around announcement

6 Bidding document distribution

Inconsistent bidding documents distributed

Limited time of distribution

7 Own estimate of pricing

Basis for pricing not standardized

Estimate price set not according to rules

Estimate pricing deliberately increased to facilitate collusion



STAGES DESCRIPTION POTENTIAL FOR CORRUPTION

8 Briefing to suppliers/bidders

Limited pre-bid meeting invitees

Information and description limited

Explanation given in such a way to confuse or misleead suppliers

9 Submission & opening of documents

Submission of fictitious documents

Submission of incomplete document

Acceptance of late bidding documents

10 Evaluation of quotations

Invalid evaluation criteria

Exchange of documents

Closed and hidden evaluation

11 Announcement of winners

Very limited announcement

Announcement day deliberately postponed

Winner announced without enough information on the justification

12 Challenge by non winners

Not all challenges are addressed

Pro forma challenges presented to avoid accusations of rigged winner selection

13 Decision on winners

Incomplete purchase order

Purchase order deliberately postponed

Purchase order issued in haste

Purchase order not legally binding

14 Contract signing Collution-based contract signing

Contract signing deliberately postponed

Contract signing in closed fashion

Contract signing not legally binding

15 Delivery of goods/services

Goods/service quality not following the specification

Volume delivered not in line with specifications

False warranty

Winners of the bid subcontract order to others

Procurement stages & potential for corruption (continued)



“ … [O]ne of the typical risk factors in the oil and gas sector is the large value of money involved in exploration, development, and production. But another risk factor in this highly regulated industry is related to permit and license. A company cannot start its activities without a permit or license, hence the institutions (whether the central government or the local government ) in charge of issuing them are extremely powerful. This power can be abused and may lead to bribery and corruption.”

Senior Manager, Asian multinational company operating in Indonesia

_____________________________

10 CIPE, TI-USA, TI-Indonesia, APEC Procurement Transparency Standards in Indonesia: A Work in Progress, 2011, http://www.cipe.org/publications/detail/apec-procurement-transparency-standards-indonesia-work-progress

Corruption risks in the law and implementation of public procurement rules are also further explored in a joint publication by CIPE, Transparency International USA, and Transparency International Indonesia, titled APEC Procurement Transparency Standards in Indonesia: A Work in Progress.10 This publication, available in English and Bahasa, analyzed Indonesia’s legal and practical implementation of the Asia Pacific Economic Cooperation (APEC) Transparency Standards on Government Procurement and whether the implementation has had an impact on reducing corruption. The project on which this publication was based reviewed Indonesia’s legal framework for public procurement and also carried out consultations with the private sector on whether those laws and regulations are implemented in practice.

It is worth noting that after the large corruption scandal involving the chairman of SKK Migas and a Singaporean oil trading company was revealed in August 2013, SKK Migas initiated a fraud risk assessment, initially among the SKK Migas management and later with the stakeholders. To make sure the assessment was objective, SKK Migas hired an outside consultant, Ernst & Young, to facilitate the process. The findings from both assessments confirmed that the highest risk of corruption was found among vendors and most commonly happened in cases related to permitting or licensing or during the procurement process.



Common ways in which third parties can endanger anti-corruption compliance of their partner companies in Indonesia

Oil companies as well as their third party vendors often face interventions by Indonesian government officials (e.g., ESDM, SKK Migas, local governments, or members of Parliament) who are very powerful in the procurement and licensing processes. Smaller suppliers of MNCs and large domestic oil companies often feel they have no choice but to accommodate these government officials, regardless of the known danger (Appendix 2).

Companies that are most susceptible to corruption are those that directly deal with third parties and face the temptation of bribery in their daily operations when dealing with local authorities. MNCs and other large companies may mitigate the corruption-prone situation by creating a system where their own staff as well as third parties have minimal face-to-face contact with government officials

“ Creating a level playing field should not mean exempting those who do not comply, and then treat them equally as those who comply. For instance, procurement process in upstream oil and gas sector is heavily regulated. If we are to encourage vendors’ compliance, the process must include business ethics compliance program as a critical (go/no go) requirement in pre-qualification phase.

We need to convince the vendors that “good business ethics means good business” and encourage them toward compliance. If we can provide a simple tool kit to implement, it will be very helpful. They will then think that implementing business ethics and practicing anti-corruption is not complicated. This is a positive approach toward compliance. Making it easy for many smaller companies to practice business ethics means we help evolve our business environment toward an ethical one.”

Ahmad Yuniarto, former Chairman, Schlumberger Group Indonesia



and require full transaction transparency. Moreover, beyond training their own employees, companies should also provide anti-corruption compliance training for third party vendors on a frequent basis and require the implementation of compliance programs by vendors.

However, oil and gas companies in Indonesia tend to face challenges when trying to mandate anti-corruption compliance programs for third party vendors. These challenges are presented in two extreme forms.

The first extreme is a general refusal of the vendors to comply with the due diligence process, particularly vendors that are politically well-connected. When an oil or gas company requires that a vendor has an anti-corruption program in place, it typically offers recognition, such as a certificate, to vendors who comply (see Appendix 1 Vico for an example). Problems may arise during the vendor audit. When the audit is related to the implementation of the assignment vendors usually agree to it, but vendors may refuse when the audit is related to ethics or bribery. In this case, the partner companies have difficulty enforcing meaningful audits.

The other extreme challenge is complaints from smaller vendors with little or no connection to political power. Powerless vendors, even when they are ethical and comply with rules, often cannot compete with those companies that refuse to comply (i.e., those working at lower operating costs). In order to survive, small vendors feel that they must accept the corrupt status quo and not follow compliance. However, it should be noted that this challenge is relatively easier to overcome by creating awareness of the business case for anti-corruption compliance programs through training workshops and technical assistance.

Many smaller companies fear that anti-corruption compliance is complicated and costly, but that is simply not the case. Even small companies can have effective compliance and ethics programs,11 provided that the program is tailored to their particular size and risks.

The following chapter provides an overview of the key elements of a robust compliance program. For more detailed information on each element please refer to CIPE’s Anti-Corruption Compliance: A Guide for Mid-Sized Companies in Emerging Markets.

_____________________________

11 Joseph E. Murphy, A Compliance & Ethics Program on a Dollar a Day: How Small Companies Can Have Effective Programs, Society of Corporate Compliance and Ethics, 2010, http://www.corporatecompliance.org/Portals/1/PDF/Resources/CEProgramDollarADay-Murphy.pdf


What are multinational corporations expecting from their business partners?

Mid-sized companies seeking to do business with major oil contractors should bear in mind that each major corporation has its own rules and procedures for selecting business partners abroad, but they all share some basic features that can be proactively addressed.

Not all third parties are subject to the same level of anti-corruption due diligence. To do so would be burdensome and costly given that corporations can have thousands of third-party business relationships; many of them pose little or no corruption risk due to the nature of the supplied product or service. However, as the perceived corruption risk of the contract increases (e.g., because it involves high-value contracts or more potential interaction with public officials) the due diligence process will be deeper and the expectation for a compliance program more pronounced. The due diligence process is likely to include requests for information about the expected compliance program and MNCs are likely to demand rights to audit it.

There is no one-size-fits-all solution for designing a compliance program since it needs to be based on each company’s unique business risks, size, etc. For smaller companies, copying directly elaborate—and often expensive—compliance systems of major corporations is typically not feasible or necessary. Regardless, in order to prevent, detect, and remediate violations, every robust compliance program must incorporate the following elements in some way:

There is no one-size-fits-all solution for designing a compliance program since it needs to be based on each company’s unique business risks, size, etc.

DESIGNING AND IMPLEMENTING A COMPLIANCE PROGRAM



Key elements of compliance

Risk assessment

In order to develop a strong compliance program, a company must first understand the risks associated with its operations and surrounding environment. A corruption risk is any process or scenario where the opportunity for corruption may arise. At its core, a risk assessment tends to involve some degree of evaluation of the likelihood of corruption occurring and/or the impact it would have should it occur. Risk management then looks at what could or should be done about these corruption risks.

However, corruption risk assessments for small or mid-sized companies do not need to be too resource intensive. Much of the data required for risk assessments can be collected from existing sources although some additional sources may be needed for the specific system/process under analysis. Business partners, especially those associated with MNCs, can be consulted about the process.

Risk assessments should be performed periodically. While there is no hard rule for what “periodically” means, international best practice suggests doing



risk assessments annually or every two years. Risk management plans should be updated based on the results of the assessments.

Standards of conduct/policies and procedures

Codes of conduct and ethics

A code is the grounding document for all policies and procedures of a company, a formal statement of the principles according to which the company wants to operate. Such statements may take three different forms: a code of ethics, a code of conduct, or a statement of values. A code of ethics is the most comprehensive and consists of general statements that serve as the basis for rules of conduct. A code of conduct may contain some inspirational statements but usually specifies acceptable and unaccepatble types of behavior. Statements of value (or value statements) serve the general public and also address distinct groups, such as stakeholders. Value statements are usually conceived by management and developed with input from major stakeholders.

These terms are often used interchangeably and they consist of a mixture of the different types of codes/value statements. For example, Pertamina’s Code of Conduct consists of: an Introduction (background, the objective of the code of conduct, the vision, mission, and values); Business Ethics Standards (i.e., dealing with employees, consumers, suppliers, government, etc.); Code of Conduct Standards (e.g., how to treat colleagues, confidentiality, gifts and entertainment); Implementation and Enforcement, and an Explanation of the Pledge made by the Employee. At the end of the document, there is a Pledge to Comply to be signed by each Pertamina employee along with another form for the managing officer. (Appendix 1. Pertamina)

BP states that “[our] values and behaviour are the foundation of our Code, and those are: safety, respect, excellence, courage, one team.” The new Code of Conduct—updated in July 2014—includes an inspiring statement from Bob Dudley, the Group Chief Executive, and specific guidance on 1) operating safely, responsibly, and reliably, 2) relationship with employees, 3) relationship with business partners, 4) working with the government and local communities, and 5) company assets and financial integrity. (Appendix 1. BP )

Chevron’s Business Conduct and Ethics Code includes a statement from John Watson, the Chairman and CEO, and reinforces “the Chevron Way” as the foundation of the Code. It emphasizes the company values: “Integrity, Trust, Diversity and Ingecnuity” and then provides specific guidance on 1) the company’s role and responsibility, 2) employees, 3) human rights, 4) company records and internal controls, and 5) avoiding conflict of interests. (Appendix 1. Chevron)



Codes of conduct are the ultimate expression of a company’s values and its “tone from the top.” While each should reflect the unique culture of the respective companies, they all must share the same basic principles of following the law and conducting business with integrity. Anti-corruption provisions can be a part of the code or a stand-alone document.

The code of conduct should be properly communicated throughout the company and made easily available to all employees. Employees affirm in writing that they have read and understand the code. It is also crucial to convey that the code of conduct applies equally to every person in the firm, from the CEO to the lowest-ranking employee. It should also extend to all third parties working for the company. Only then will it be a true resource with a shared sense of ownership and not an empty document.

Policies and procedures

Policies are principles, rules, and guidelines formulated or adopted by an organization to reach its long-term goals. Procedures, on the other hand, are the specific methods used to express policies in action in the day-to-day operations of the organization. Together, policies and procedures help ensure that the views and values held by the governing body of an organization are translated into steps resulting in outcomes compatible with that view.

Policies are formulated to address guiding principles for various areas of a company’s operations, such as anti-corruption, bribery, or privacy. While principles and policies remain the same for everybody in the company, anti-corruption procedures can be tailored to a particular business unit (e.g., sales and marketing) or company function (e.g., board of directors) to ensure maximum relevance, guidance, and clarity. Procedures translate the principles into actionable steps needed to implement a particular policy, including who is responsible for taking each particular action.

Compliance oversight, commitment, and resources

Meaningful compliance starts at the top with a company’s leadership. The board of directors (or equivalent) and senior executives are responsible for maintaining the highest ethical standards. They must oversee implementation through management of an effective compliance program and generally set the proper tone for the rest of the company. This includes putting in place compliance infrastructure—a compliance program led by a Chief Ethics and Compliance Officer (CECO), or an equally senior individual with a different title but a similar function.

The CECO should have deep knowledge of the company as well as an impeccable reputation for trust and integrity. To make the compliance function meaningful, the board must also dedicate appropriate financial and human



resources to it as a part of the company’s larger business plan, and devote sufficient time and attention to oversight of the compliance program.

Best practice recommends splitting compliance away from other functions within the company in order to provide a degree of internal independence. What matters most is how knowledgeable the responsible individual is about the company’s operations and the risks the company faces (corruption and otherwise). He or she must have a degree of confidence and assertiveness, and the ability to build a trusted rapport with management, employees, and the board to detect and effectively address risks and violations. Ethics and compliance officers play an important liaison function between different departments and success in their role is very much related to the “tone from the top.”

Depending on the size of the company, if necessary, the CECO would be assisted by one or more ethics and compliance officers. The team is usually responsible for: risk assessment, developing and distributing the Codes of Conduct, training programs for employees or vendors, establishing and maintaining a system

“ Regarding internal compliance, we have the BCEC (Business Code and Ethical Conduct) and COI (Conflict of Interest). All employees must comply with it. We give examples, quizzes, and regulation if they deal with known parties (for example, if my relatives work for Chevron, Chevron subsidiary, competitors, or suppliers/contractors, I have to declare it to Chevron). If the rule of the game is violated, further reviews and an investigation would be conducted and certain consequences will be applied. The consequence can vary—e.g., employees can get warning letters, salary reduction, demotion up to termination. These types of violations are regularly shared among the company using Ethics Alerts and Compliance Moments as a learning opportunity for employees to avoid similar violations.”

A. Hamid Batubara, President Commisssioner, PT Chevron Pacific Indonesia



to address employees’ concerns about ethical issues, making sure the company complies with government regulations, monitoring and auditing ethical conduct, taking action on possible violation of the Code of Conduct, and reviewing and updating the Code.

Compliance function in mid-sized companies

The size of the compliance program greatly depends on the size of the enterprise and its business risks. Smaller companies may have only one person in charge of compliance, or not even have the resources to hire a dedicated CECO—this is not unusual and there are ways in which mid-sized companies can structure their compliance programs to make them tailored and effective. In small companies the ethics and compliance function can even be executed on a part time basis by a staff member already already seving in another role, drawing on in-house and outside expertise as necessary. Therefore, for mid-sized companies wishing to become suppliers of MNCs in the oil and gas sector, size should never be a discouraging factor to establish a basic compliance program.

Education and training

For a company serious about implementing a compliance program, it is very worthwhile to strive to integrate ethics and compliance training throughout many “touch points” including: orientation, company meetings, technical trainings, employee newsletters, publications, and the company website. Regular education and training are crucial elements of any compliance program and are an important means of communicating applicable laws, company ethics and compliance policies, procedures, and resources to management, staff, and the board. Education and training empowers employees to ask tough questions and make sound ethical decisions.

Training is often also provided by MNCs for third parties, including vendors. This is typically true for companies that firmly declare they only work with partners with a similar code of ethics. Examples of such companies in the oil and gas sector include Chevron and BP.

If ethics training is to be effective, it must start with a strong foundation: a code of ethics, a procedure for airing ethical concerns, and a statement of top-level commitment to integrity communicated to all employees. The challenge is to avoid legal jargon or dry lecturing and instead make the information accessible to the audience and practical for their day-to-day duties.

To ensure training sessions are as effective as possible, companies should consider obtaining help from outside experts as facilitators.

An example of a successful training in Indonesia comes from Star Energy’s cooperation with Indonesia Business Links. In 2014, Star Energy and IBL jointly designed and facilitated a one-day workshop that covered topics such as



business ethics, ethical dilemmas, and the code of conduct. The training also included case studies on different ethical issues, such as conflicts of interest, sexual harassment, and bribery. It featured guest lecturers from the Corruption Eradication Commission and an ex-CEO of a reputable MNC. The workshop was conducted for employees in different groups (e.g., senior managers, middle managers, and the rest of the staff), and was therefore tailored to different levels and responsibilities.

Pertamina’s ethical training program from 2010, which reached nine Pertamina unit sites and close to 1,000 participants, is another noteworthy example of anti-corruption compliance training as part of a larger commitment to “cleaning up” the oil and gas sector. The main objective of the Pertamina Clean program was communicating the message that Pertamina was transforming into a world-class company free of corruption, collution, and nepotism. Pertamina felt a need to transform itself due to its poor image as a very corrupt company. The target audience of the program went beyond Pertamina employees, and included vendors, suppliers, local police officials, local government officials, and the media. IBL also facilitated the program and invited the Corruption Eradication Commission (KPK) to be involved, which was very well received.

Another example of effective compliance education is publishing an internal newsletter with case studies based on real-life incidents explaining what went wrong and how the problem was addressed.

For instance, Pertamina educates its staff about compliance through comics in its staff newsletters. The comics draw attention to key compliance issues and are an effective educational tool that have received many positive comments from employees.

“Our business ethics program, which started in 2012, has been very successful because of our President and CEO’s full support. His commitment to business ethics has indeed set the ‘tone from the top’ at Star Energy. And we are proud of our Code of Conduct, which we have developed ourselves with our corporate values. It is a thin and concise and down to earth document, and a meaningful guidance for us all.”

Ius Oilianto, Head of Business Ethics, Star Energy



Monitoring and auditing

Monitoring is an ongoing, constant assessment of the quality of the internal control system’s performance over time with the aim of continual improvement. It often involves observing and interviewing employees, typically in an informal setting such as during lunch or over coffee, to encourage frank conversation about the risks they face in their daily activities and if they believe the policies and processes in place are working. Periodic questionnaires or staff focus groups can serve as benchmarks in an ongoing assessment of ethical performance by surveying employees’ perception of their company, their superiors, coworkers, as well as perceptions of ethical or unethical practices within the company and industry. If unethical conduct appears to be increasing, management will have a better understanding of what may be happening. A change in the ethics training may then be necessary.

Auditing is a systematic evaluation of a company’s ethics program to determine if it is effective. The ethics audits include regular, complete, and documented measurement of compliance with the company’s published policies and procedures. Audits can be performed by independent parties in two ways: internally or externally. An internal audit, conducted by a dedicated unit within a company, is considered independent not of the organization but of the process it is reviewing. An external audit is performed by independent professionals from outside the company.

Monitoring and auditing are complex tasks and cannot be done alone. Leverage other department resources by engaging employee liaisons or groups to identify red flags or compliance needs. If possible, it is worthwhile to partner externally with consultants and professional organizations. Make sure risks are prioritized appropriately, focusing on the top ones first.

Reporting and investigating

Reporting system

The existence of an internal system by which employees can report misconduct is especially useful in evaluating ethical performance. Many companies set up assistance lines, also known as hotlines, to provide support and give employees the opportunity to ask questions or report concerns. The most effective ethics hotlines operate on an anonymous basis and are supported 24 hours a day, 365 days a year. The anonymity is important or else serious incidents may remain unreported. You should keep in mind, though, that evaluating the validity of anonymous reports can be difficult (e.g., the possibility of false reports, retaliation against a co-worker, etc.) and may hinder the company’s ability to address the reported issue. Nevertheless, an easy to use hotline can increase the chance of detecting and responding to unethical conduct.



Another system is reporting through an internal “whistleblower” program whereby reporting of wrongdoing within an organization by one of its employees is made possible through a specific operational procedure in which identity is required but confidentiality guaranteed. Employees must feel safe to speak out and that can only be achieved if they are not afraid of retaliation. It may take a while for a company new to the system to reach that stage. An example is Star Energy in Indonesia, which started the system in 2014, but is already receiving a steadily increasing number of reports to its Ethics Committee. If handled correctly, internal whistleblower programs give employees confidence that their concerns or complaints will be treated seriously.

It is important that a company’s culture emphasizes that reporting violations of the company’s policies—including anti-corruption—is an act of loyalty to the company and its values, not an act of disloyalty to colleagues who committed wrongdoings.

Investigations

Following the report of a violation, an investigation should aim to ascertain the facts of the case. First, the CECO must decide whether the report warrants full investigation or if the matter is minor and can be addressed in other ways. If an investigation is necessary, the CECO decides who will conduct it—the legal counsel, compliance staff, human resources, management, or a special interdepartmental team, if necessary. If a case may significantly affect the company’s reputation, an external investigation team might be invited to work with the internal team.

If an investigation is conducted internally, the most crucial matter—aside from observing the legal rules—is determining who in the company to interview. It should include: the person who filed the complaint (unless it was anonymous), all relevant witnesses, and the person or persons being investigated. It is best practice to interview the person being investigated while there is another person present to act as an objective observer and take detailed notes. The person being investigated should always be given a chance to explain his or her side of the story as mitigating circumstances may exist.

Based on the findings, the investigating team will decide to either close the case if there is no proof of wrongdoing, or escalate the issue if wrongdoing has been found, and give recommendations on next steps. In addition to mitigating any damage, next steps should include actions to correct any identified problem areas. Investigative files should be retained in all cases, even if the reported wrongdoing is not substantiated.



Enforcement, discipline, and incentives

Companies should incentivize employees who comply with company policies and standards and punish those who do not. Incentives may take the form of public recognition, bonuses, raises, or other similar positive means. Alternatively, when employees violate organizational standards, they should be reprimanded, transferred, suspended, and, in some cases, fired depending on the violation. If the firm fails to take corrective actions, inappropriate behavior is likely to continue. To help curb inappropriate behavior and promote ethical behavior, many companies are including ethical compliance in employees’ performance appraisals.

Consistent enforcement and disciplinary action are essential to a robust ethics/compliance program. Full information is a prerequisite to ensuring fair and consistent enforcement. Employees at all levels must know and understand what the rules are in order to be able to comply. Education and training, and enforcement and discipline, are two sides of the same coin.

In cases of larger transgressions, CECOs should coordinate with the in-house or external legal counsel and the HR department to ensure a proper course of action. Conversely remediation should be allowed as an adequate response in cases of minor infractions that may only require additional training.

Response, prevention, and improvement

Efforts to deter unethical behavior are important for companies’ long-term relationships with their employees, customers, and the community. Once a violation has been discovered and investigated, and the parties at fault properly disciplined, the key question is: how can reoccurrence be prevented? A company’s response to violations, and the implementation of preventive steps to avoid repetition of the same violations in the future, are crucial.

The goal is constant improvement; it is important to not only fix the immediate problem, but also the underlying causes. As the business environment keeps changing, compliance risks and challenges evolve, necessitating adjustments. Consequently, a company should regularly evaluate the design, implementation, and impact of its compliance program. Improvement is accomplished through periodic assessment of the program and having a good plan for addressing any identified shortcomings.


The business environment for the oil and gas sector in Indonesia is very prone to corruption due to the volume of regulations and the money involved in

the business. The central government (represented by the Ministry of Energy and Mineral Resources/ESDM and SKK Migas) and local governments play the most important roles in the industry due to its high regulation. While there are signs that the regulations are changing for the better (e.g. efforts to lower the number of licenses for exploration permission) the industry is still vulnerable to corruption.

Because MNCs and national oil companies are affected by the behavior of vendors in their supply chains, anti-corruption compliance among vendors—especially the mid-sized firms—is of utmost importance. Therefore, companies that wish to become suppliers or vendors to large gas or oil companies can greatly strengthen their value proposition by implementing anti-corruption compliance programs.

Many MNCs and national companies in the oil and gas sector are willing to help their vendors set up or strengthen their compliance programs. Current or potential vendors should seize such opportunities and learn how to properly implement good and ethical business practices from larger companies.

CONCLUSION


Appendix 1

BP

Ethics and Compliance in BP

http://www.cblf.org.cn/Uploads/%7BDE5E2F0B-4469-4B02-B724-5C6164917104%7D_Ethics%20&%20Compliance%20in%20BP.pdf

Code of Conduct

http://www.bp.com/en/global/corporate/about-bp/company-information/code-of-conduct.html

CHEVRON

Getting Results the Right Way: Chevron’s Business Conduct and Ethics

Expectations for Suppliers and Contractors

http://www.chevron.com/documents/pdf/SupplierExpectations.pdf

Business Conduct and Ethics Code

http://www.chevron.com/documents/pdf/chevronbusinessconductethicscode.pdf

SCHLUMBERGER

Business Ethics Policy

http://www.slb.com/resources/supply/supplierinfo/ethics_policy.aspx

SHELL

Code of Conduct: Shell General Business Principles

http://s03.static-shell.com/content/dam/shell-new/local/global-content-packages/corporate/sgbp-english-2014.pdf

APPENDICES


APPENDICES

Code of Ethics

http://www.shell.com/global/aboutshell/who-we-are/our-values/code-of-ethics.html

Business Integrity

http://www.shell.com/global/environment-society/society/business/business-integrity.html

Shell Supplier Principles

https://s01.static-shell.com/content/dam/shell/static/products-services/downloads/suppliers/supplier-principles.pdf

Supplier Code of Conduct

https://www.bsp.com.bn/main/about/files/Suppliers__Code_of_Conduct.pdf

PERTAMINA

Pedoman Perilaku

http://www.pertamina.com/company-profile/pedoman-tata-kelola-perusahaan/pedoman-perilaku/

Pedoman Etika Usahadan Tata Perilaku (Code of Conduct)

http://www.scribd.com/doc/134879168/Pertamina-Code-of-CONDUCT#scribd

STAR ENERGY

Code of Conduct

Whistleblowing Program

(Both available in PDF, not available on the web. For more information, contact [email protected]).

VICO

Certificate of Compliance given to a supplier

http://www.dahana.com/gcg/certificate-of-ethics-compliance/


APPENDICES

Appendix 2

PRESS CLIPPINGS

Guido, Bonie. “Corruption scandal shakes Indonesia’s oil and gas industry.” Business ethics and anti-corruption: Asia Pacific insights—Issue 2. Norton Rose Fulbright (2014). http://www.nortonrosefulbright.com/knowledge/publications/113978/corruption-scandal-shakes-indonesias-oil-and-gas-industry

Halim, Haeril, and Ina Parlina. “SKKMigas bribery scandal draws closer to Jero.” The Jakarta Post 17 January 2014. http://www.thejakartapost.com/news/2014/01/17/skkmigas-bribery-scandal-draws-closer-jero.html

“KPK Arrests Democrat Sutan Bhatoegana in Oil Graft Case.” Jakarta Post 2 February 2015. http://thejakartaglobe.beritasatu.com/news/kpk-arrests-democrat-sutan-bhatoegana-oil-graft-case/

Kwok, Yenni. “Shocking Arrest Underscores Endemic Corruption in Indonesia’s Energy Sector.” Time 15 August 2013. http://world.time.com/2013/08/15/shock-arrest-underscores-endemic-corruption-in-indonesias-energy-sector/

“Sutan Bhatoegana named suspect in corruption case.” Antara News 14 May 2014. http://www.antaranews.com/en/news/94051/sutan-bhatoegana-named-suspect-in-corruption-case

Tampubolon, Hans David, and Haeril Halim. “Pertamina ‘paid off’ politicians.” The Jakarta Post 28 January 2014. http://www.thejakartapost.com/news/2014/01/28/pertamina-paid-politicians.html


Center for International Private Enterprise (CIPE), “Combating corruption: A Private Sector Approach.” (2011). www.cipe.org/sites/default/files/publication-docs/Anti-CorruptionToolkit0308.pdf

CIPE, “Corporate Governance for Emerging Markets.” (2008). www.cipe.org/publications/detail/corporate-governance-emerging-markets

CIPE, World Bank Institute, et al. “Fighting Corruption through Collective Action—A Guide form Business” (2008). http://info.worldbank.org/etools/docs/antic/Whole_guide_Oct.pdf

CIPE, “Anti-Corruption Compliance: A Guide for Mid-sized Companies in Emerging Markets” (2014)

CIPE, Transparency International—USA, Transparency International-Indonesia, “APEC Procurement Transparency Standards in Indonesia: A Work in Progress”, 2011, http://cipe.org/publications/detail/apec-procurement-transparency-standards-indonesia-work-progress

Humboldt—Viadrina School of Governance, “Motivating Business to Counter Corruption” (2012)

Katadata Indonesia, “Wajah Baru Industri Migas Indonesia” (2013)

“Mulai Mei, Izin Migas Tidak Perlu ke Kementerian ESDM” Katada 30 April 2015, http://katadata.co.id/berita/2015/04/30/mulai-mei-izin-migas-tidak-perlu-ke-kementerian-esdm

Murphy, Joseph E. A Compliance & Ethics Program on a Dollar a Day: How Small Companies Can Have Effective Programs, Society of Corporate Compliance and Ethics, 2010, http://www.corporatecompliance.org/Portals/1/PDF/Resources/CEProgramDollarADay-Murphy.pdf

Organisation for Economic Co-operation and Development. “Good Practice Guidance on Internal Controls, Ethics, and Compliance” (2010) www.oecd.org/investment/anti-bribery/anti-briberyconvention/44884389.pdf

RESOURCES AND BIBLIOGRAPHY


RESOURCES AND BIBLIOGRAPHY

OECD. The rationale for fighting corruption, (2014) http://www.oecd.org/cleangovbiz/49693613.pdf

OECD—UNODC—The World Bank, “Anti-Corruption Ethics and Compliance Handbook for Business” (2013)

Partnering Against Corruption Initiative, “Good Practice Guidelines on Conducting Third-Party Due Diligence” (2013) www3.weforum.org/docs/WEF_PACI_ConductingThirdPartyDueDiligence_Guidelines_2013.pdf

Pieth, Mark. Harmonising Anti-Corruption Compliance: The OECD Good Practice Guidance (2010).

Society of Corporate Compliance and Ethics. “Basic Compliance and Ethics Academy” www.corporatecompliance.org/Events/AllEvents/Academies.aspx

Society of Corporate Compliance and Ethics. “Code of Professional Ethics for Compliance and Ethics Professionals” (2007). www.corporatecompliance.org/Resources/View/smid/940/ArticleID/675.aspx

“Tak Tahu Berapa Izin...” Kompas 29 April 2015. http://print.kompas.com/baca/2015/04/29/Tak-Tahu-Berapa-Izin

Transparency International. “Business Principles for Countering Bribery—Small and medium enterprise (SME) edition” (2008). www.transparency.org/whatwedo/tools/business_principles_for_ countering_bribery_sme_edition/1/

Transparency International Indonesia—KPK (Commision for Eradication of Corruption), “Indonesia against Facilitation Payment” (2014)

Transparency International USA. “Verification of Anti-Corruption Compliance Programs” (2014). www.transparency-usa.org/documents/TI-USA_2014_verificationreportfinal.pdf

United Nations Global Compact. “A Guide for Anti-Corruption Risk Assessment” (2013). www.unglobalcompact.org/docs/issues_doc/Anti-Corruption/RiskAssessmentGuide.pdf

Vincke, Francois and Julian Kassum, eds. ICC Ethics and Compliance Training Handbook. International Chamber of Commerce (Paris, France: 2013).

Center for International Private Enterprise

1211 Connecticut Avenue NW, Suite 700 Washington, DC 20036

www.cipe.org

Indonesia Business Links

Office Sahid Sudirman Residence 1st Floor, Suite 2 Jl. Jend. Sudirman Kav. 86 Komplek Hotel Sahid Jaya

Jakarta Pusat 10220 – Indonesia www.ibl.or.id

Date post:	03-Mar-2018
Category:	Documents
Upload:	nguyenlien
View:	219 times
Download:	1 times

A Guide for Mid-Sized Companies in the Oil & Gas Industry ... · PDF fileA Guide for Mid-Sized...

Documents