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 “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.