Who are you ? [Posted 4 Dec 2015, 120 views, 11 likes, 1 comment]

“The importance of due diligence” by Peter Coleman [peter@aegisinteraktifasia.com ] was the topic of an interactive seminar hosted by Ausminchamb in Jakarta on 3rd Dec 2015. Peter’s background emphasizes forensic research in the criminal and financial sectors, wherein this presentation focused on the business aspects of reviewing the credibility of potential business partners, suppliers and staff.

Foreign investors are making serious investments in Indonesia (particularly Japanese & Koreans) and some Indonesians are investing off shore. It is appropriate to undertake character investigations (often a month or more) to provide the investor with an understanding of the reputation of the potential joint venture parties, or the major contractors / consultants to be engaged on large investments. Note that a typical oil company may have 2,000 – 3,000 vendors. There is a growing trend for international companies to comply with foreign corruption practices acts (USA, Europe, and Australia) to avoid huge international fines, trade sanctions and forms of competition. The lower limit of corruption varies between countries, with USA at $200, UK at around $100 and Australia at just $20.  The USA has a program of “cash for comments” wherein whistleblowers can get 10% of an eventual fine imposed upon a corruption conviction, with the largest pay out being $30 million. In other cases managers are looking to rid corrupt practices from within their own companies. Note that fraud comprises about 6-7% of the global economy. Note that the USA has a similar population to Indonesia with around 200,000 law enforcement staff working directly on corruption & fraud, while Indonesia has only 220 such full time people.

The seminar was a mixture of informing presentation, amusing examples and some sharing amongst participants. The topics covered a number of practical areas for investigation, including background investigations for new employees, business partners & vendors plus suspected staff. The seminar outlined some lines of investigation we can all take, wherein professional consultants (like Peter) have a great interconnectivity and experience in conducting such surveys. Caution with regards to Indonesian privacy laws, electronic transfer of information (Law 11/2008) and banking information were discussed, wherein good procedures in investigations and reporting can be undertaken to comply with such laws.

The risks arising from poor selection of staff, business partners or vendors is both financial and reputation risk.