PREVENTION OF CORRUPTION BEHAVIOUR: A PRACTICE IN PT UNILEVER INDONESIA TBK

IACF- 11 June 2014

Yeni Fatmawati

Corporate Legal Director

WEDNESDAY, JUNE 11, 2014

UNILEVER INDONESIA Strong Local Roots with 80 Years of History

1933 Unilever was

established

under the name

Lever’s

Zeepfabrieken

N.V. in Angke,

Jakarta.

1936 Blue Band

margarine and

Lux soap are

marketed in

Indonesia.

1980 The Company is

renamed as PT

Unilever Indonesia.

Yamani Hasan

is the first Indonesian

citizen to

be appointed as the

Company’s

President Director.

1982 Unilever Indonesia

goes public, listing

15% of its shares on

the Indonesia

Stock Exchange.

1990 The Personal Care

factory is opened

in Rungkut,

Surabaya. The

Company

enters the tea

business with the

acquisition of

SariWangi.

1992 The Wall’s ice cream

factory opens

in Cikarang. Conello

and Paddle Pop

appear on the market

for the first time.

2000 The Company enters

the soy sauce

business, with Bango

acquisition.

2004 Knorr Indonesia is

acquired

from Unilever

Overseas Holding

Ltd and merged with

Unilever Indonesia.

The hair care factory

relocates from

Rungkut to Cikarang.

2008 Asia’s largest Skin

Care factory is built at

our Cikarang site.

The Company enters

the fruit juice

business by acquiring

the Buavita and Gogo

brands. SAP

is implemented

throughout Unilever

Indonesia.

2010 The Company enters

the water purification

business by

launching Pureit.

2012 Unilever Indonesia

succeeded in

doubling the business

within five years and

recorded a sales

more than 2 billion

euro.

2013 Unilever Indonesia

celebrate its 80-years

journey in Indonesia,

by launching “Project

Sunlight” to inspire

people to create a

brighter future not

only for our children,

but for future

generations as well.

UNILEVER INDONESIA Legal Structure

----- Indirect Ownership

UNILEVER INDONESIA Our Profile – Key Facts

80 Years of

Unilever in

Indonesia

40 Product

Brands

8 Owned

Factories

6719 Employee in

2013

UNILEVER INDONESIA Product Portfolio

Home and Personal Care, 73%

Foods and Refreshment, 27%

14 categories

40 brands

1000 SKUs

UNILEVER INDONESIA Wide Distribution Network as Competitive Advantage

Pekan Baru

Pontianak Manado

Banjarmasin

Palembang

Padang

Makassar

Jakarta East

Jakarta West Bandung

Yogya

Semarang Surabaya West

Surabaya East

Lampung

Papua

Jambi

Medan

Aceh

Samarinda

Denpasar

Balikpapan

Palangkaraya

Kepri

Bengkulu

8 Own Factories, 16 Third Party Manufacturers,

2 Central Distribution Centers (inc. 1 Mega DC)

10 Depot Warehouses

30 Sales Area Offices

641 Distributor /Sub Dist GT, MT, IC

Our products are available in 1 million stores…

…and every house use at least one Unilever products

BUSINESS ETHICS : THE COMPONENTS

Corporations have important roles to play

Good Governance

Good Corporate

Governance

Good Civil Society Governance

ANTI BRIBERY LAWS

• International bodies, national governments and legal authorities are all taking measures to combat bribery and corruption

• Compliance with our Code Policies will ensure that you stay on the right side of the law, wherever you work

• National Laws: Many national governments have reacted to international conventions by introducing or strengthening their own anti-bribery and corruption laws, often with severe sanctions for both companies and individuals.

• Cross border Laws: Laws introduced by some countries extend beyond their own national boundaries United Kingdom Bribery Act (UKBA) and Foreign Corrupt Practices Act (FCPA)

• You can be found guilty of a bribery offence even if you do something that is legal or acceptable in your local jurisdiction.

E.g. Freeport Indonesia offered money / bribes to Indonesia police, hence this was reported to US department of Justice.

UNILEVER STAND POINT

Unilever has earned a reputation for conducting its business with integrity and respect for others. This reputation is an asset, as valuable as Unilever’s people and brands. To maintain this reputation requires the highest standards of behaviour from all of its member.

Unilever’s Code of Business Principles (the ‘Code’), and the policies that support it (‘Code Policies’), set out the standards required from all employees and third parties acting on Unilever’s behalf. We also expect our business partners to adhere to principles consistent with our own.

Breaching the Code and/or Code Policies could have very serious consequences for Unilever and its employees. These could include significant fines for Unilever, imprisonment for individuals and significant damage to our reputation. Failure to comply with the Code and/or any of the Code Policies will be taken very seriously and could result in disciplinary action, including dismissal and legal action.

STAYING TRUE TO OUR VALUES

OUR CODE POLICIES RELATED TO FACILITATION PAYMENTS

CONTACT WITH GOVERNMENT, REGULATORS & NON-GOVERNMENTAL ORGANIZATIONS (NGO’S)

• Any contact made by Unilever employees (or agents), either directly or indirectly (through trade associations etc), with any government representatives, officials, employees, legislators and regulators or NGOs must be done with, integrity and openness and in compliance with any relevant local or international laws.

• These interactions must only be undertaken by individuals who are appropriately authorised.

GIFT & ENTERTAINMENT ONLINE SYSTEM

THE SUPPORT SYSTEM : CODE COMMITTEE

• Corporate Code Committee - Global

(CEO, Chief Legal Officer, Group Secretary, Chief Auditor, SVP HR & SVP Communications)

• Cluster Code Committee - Regional

(Cluster Head, Head of Finance, Head of HR, Head of Supply Chain, Head of Legal)

• Operating Country Committee – Indonesia

(Country Chairman, Finance Director, HR Director, External Relations Director & Corp Secretary, HR Business Partners, Head of Internal Audit, Head of Legal)

THE FUNCTION OF CODE COMMITTEE

• Reviewing significant reputational risks and overseeing risk mitigation

• Conducting an annual Code and Policy controls self-assessment

• Managing the quality and consistency of all local investigations into compliance breaches and signing off on completion

• Ensuring that individuals who report breaches of the Code or Policy are properly protected from retaliation

• Implementation of any Standards relating to Code of Business Principles and Code Policy compliance

• Supporting operations with any Code and Policy related queries or concerns

• Ensuring that any reportable items are escalated to the Cluster Code and Policy Committee

• Ensuring that individual countries within the MCO are properly supported, including the creation

360 DEGREES TOUCH POINTS

Code of Business Principles

Booklet for New

Employees

Mandatory E-Learning

Offline Classroom

Training

Annual Campaign

Online Resources

Code Committee –

Blue Umbrella

CAMPAIGN EXAMPLES

Promoting 4 code policies of :

Anti-Bribery, Gifts & Entertainment, Avoiding Conflicts of Interest and Contacts with government, regulators & NGO

CAMPAIGN EXECUTION

INTERNAL TRAINING: EXAMPLE

CHALLENGES

Internal : • Effectively and efficiently communicate the policy to a wide range of

employees

• Encouraging people to reports any mishaps

• Low level of reported code incidents, despite the complex business nature of Unilever Indonesia

External : • A crystal clear, transparent and easily accessible procedures from

government bodies

• Level of commitment from government bodies (from top management down to operational, from centre to areas)

• One roof coordinated service – avoiding inefficient multiple procedures

A THOUGHT : COMPONENTS OF SUCCESSFUL IMPLEMENTATION

Top Management Commitment

Clarity of Standards

Established Systems & Procedures

Easily accessible & simple

guidelines

Constant Campaign

Walk the Talk

THE SUPREME QUALITY FOR LEADERSHIP IS UNQUESTIONABLY INTEGRITY. (DWIGHT D. EISENHOWER)

THANK YOU