Letters from a Private Investigator

The risk of fraud is faced by all organizations regardless of size. Unfortunately, many of these threats are internal and come from dishonest people who were recruited by the company they are defrauding. In addition whistleblowing policies in procedures might be insufficient.

According to a 2016 fraud survey conducted by the Association of Fraud Examiners (ACFE) Indonesia Chapter^[1][2]  “fraud is a latent danger that threatens the world. The results of the Global Association of Certified Fraud Examiners (ACFE) research show that each year an average of 5% of the organization’s revenue is a victim of fraud”. The report states that corruption was by far the most common form of occupational fraud in Indonesia, occurring in 67% cases, followed by asset misappropriation (31%), and financial statement fraud (2%). ACFE went on to claim that the total loss caused by corruption can reach up to 10 billion Indonesian Rupiah.  The loss caused by asset misappropriation can go beyond 10 billion Indonesian Rupiah. 

The survey indicated that the most common fraud detection method was by means of a whistleblowing hotline with internal employees as the main reporting source. A whistleblower is a person who exposes secretive information or activity that is deemed illegal, unethical, or not correct within a private or public organization. The information of alleged wrongdoing can be classified in many ways: violation of company policy/rules, law, regulation, or threat to public interest/national security, as well as fraud, and corruption. Those who become whistleblowers can choose to bring information or allegations to surface either internally or externally. Internally, a whistleblower can bring his/her accusations to the attention of other people within the accused organization such as an immediate supervisor. Externally, a whistleblower can bring allegations to light by contacting a third party outside of an accused organization such as the media, government, law enforcement, or those who are concerned. Whistleblowers, however, take the risk of facing stiff reprisal and retaliation from those who are accused or alleged of wrongdoing.

An organization that implements a whistleblowing system will promote a culture of transparency, honesty, and integrity. This culture will help the organization to detect and handle early signs of fraud. Some business industries which are more at risk of fraud, such as banking and financial services, as well as government and public administrations have enacted their own whistleblowing policies to provide a clear mechanism in handling reports and complaints.

The Indonesian law does not contain explicit provisions on whistleblowing, however, it provides protections for employees who have knowledge of criminal acts of the employer. Indonesian Employment Law No 13 of 2003 Article 169 stipulates that an employee may submit a request for termination of his/her employment in case the employer persuades and/or orders the worker/laborer to do a deed that is in conflict with laws and regulations. The terminating employee must be entitled to severance, reward, and compensation pay. Protections for whistleblowers (witnesses) are regulated in the Indonesian Witness and Victims Protection Law No. 13 of 2006.

Bali Eye Private Investigation Agency (BEPIA) along with our sister agency Indonesia Private Investigation Agency (IPIA) are  fully registered Private Investigation Agencies offering private detective and private investigator services to the Private and Business sectors throughout Indonesia and South East Asia.

For more focussed business due diligence work and analysis we would also refer you to Business Due Diligence Indonesia. 

^[1] https://acfe-indonesia.or.id

^[2] https://acfe-indonesia.or.id/wp-content/uploads/2017/07/SURVAI-FRAUD-INDONESIA-2016_Final.pdf

ISO 37001 Anti-Bribery Management Systems

Anti-bribery steps are becoming an important company need. Corruption raises the cost of business, undermines public trust and hampers growth. It disproportionately affects the poor and vulnerable by diverting resources from essential public services such as health care, education, transportation and water sanitation. 

Bribery is one of the world’s most destructive and challenging issues. According to the Organisation for Economic Co-operation and Developmentthere are over US$ 1 trillion paid in bribes each year. The consequences are catastrophic, reducing quality of life, increasing poverty and eroding public trust.

Yet despite efforts on national and international levels to tackle bribery, it remains a significant issue. Recognizing this, ISO developed a new standard to help organizations fight bribery and promote an ethical business culture. It is designed to help an organization implement an anti-bribery management system, or enhance any existing controls. It helps to reduce the risk of bribery occurring and can demonstrate to stakeholders that an organisation has put in place internationally recognized good-practice anti-bribery controls.

ISO 37001 can be used by any organization, large or small, whether it be in the public, private or voluntary sector, and in any country. It is a flexible tool, which can be adapted according to the size and nature of the organization and the bribery risk it faces. 

What is an anti-bribery management system? 

An anti-bribery management system is designed to instil an anti-bribery culture within an organization and implement appropriate controls, which will in turn increase the chance of detecting bribery and reduce its incidence in the first place. ISO 37001, Anti-bribery management systems – Requirements with guidance for use, gives the requirements and guidance for establishing, implementing, maintaining and improving an anti-bribery management system. The system can be independent of, or integrated into, an overall management system. 

It covers bribery in the public, private and not-for-profit sectors, including brib- ery by and against an organization or its staff, and bribes paid or received through or by a third party. The bribery can take place anywhere, be of any value and can involve financial or non-financial advan- tages or benefits. 

What benefits will it bring to my business or organization? 

ISO 37001 is designed to help your organization implement an anti-bribery management system or enhance the controls you currently have. It requires implementing a series of measures such as adopting an anti-bribery policy, appointing someone to oversee compliance with that policy, vetting and training employees, undertaking risk assessments on projects and business associates, implementing financial and commercial controls, and instituting reporting and investigation procedures. 

Implementing an anti-bribery management system requires leadership and input from top management, and the policy and programme must be communicated to all staff and external parties such as contractors, suppliers and joint- venture partners. 

In this way, it helps to reduce the risk of bribery occurring and can demonstrate to your management, employees, owners, funders, customers and other business associates that you have put in place internationally recognized good-practice anti-bribery controls. It can also provide evidence in the event of a criminal investigation that you have taken reasonable steps to prevent bribery. 

Bali Eye Private Investigation Agency (BEPIA) along with our sister agency Indonesia Private Investigation Agency (IPIA) are  fully registered Private Investigation Agencies offering private detective and private investigator services to the Private and Business sectors throughout Indonesia and South East Asia.

For more focussed business due diligence work and analysis we would also refer you to Business Due Diligence Indonesia. 

Sources

https://anticorruption-integrity.oecd.org

https://www.iso.org/iso-37001-anti-bribery-management.html

https://www.iso.org/files/live/sites/isoorg/files/store/en/PUB100396.pdf

What is Business Due Diligence?

Business due diligence is basically a process of in-depth investigation completed by a business or outsource to a professional company such as Business Due Diligence Indonesia (BDDI). The research is carried out prior to starting an ongoing business or employment relationship or signing a contract. The aim of due diligence is to identify any potential problems, unexpected liabilities and basically mitigate any risks. 

Advantages of Engaging Business Due Diligence Indonesia

BDDI have a proven track record of due diligence in Indonesia. We also have a unique network of sources that offer intelligence that just can’t be found online or n books.

Conducting due diligence is a valuable and key risk management tool used for buyers and businesses alike. BDDI’s thorough due diligence investigations will allow clients to make informed decisions and avoid surprises at the end of a transaction. It could save you thousands and thousands of dollars.

Due diligence investigations empower buyers through making them aware.  

Conducting Due Diligence

There are different ‘levels’ of due diligence (‘hard’ and ‘soft’). BDDI offers the full range from record retrieval and adverse media research to the more time consuming deep source interviews, regulatory and litigation checks and site location verification visits. The scope of due diligence is dependent on the type of transaction, any perceived risks, and the client’s needs.

The most common transactions that call for due diligence include:

• purchasing a business
• mergers and acquisitions 
• entering into a partnership
• entering into a major contract

Buyers have the right to look at the records, assets, and operations for a business before committing to purchasing or entering into a partnership. The result of a due diligence exercise should be a complete story of the target company (or partner). This story can include a range of information within the scope of the research such as financial, commercial, operational, reputational and legal position of the target business or partner.

Bali Eye Private Investigation Agency (BEPIA) along with our sister agency Indonesia Private Investigation Agency (IPIA) are  fully registered Private Investigation Agencies offering private detective and private investigator services to the Private and Business sectors throughout Indonesia and South East Asia.

For more focussed business due diligence work and analysis we would also refer you to Business Due Diligence Indonesia.