Anti-Corruption Compliance: A Guide for Mid-Sized Companies in the Oil & Gas Industry in Indonesia

Introduction

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, anticorruption 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-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.

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