Private Bribery and Integrity in Doing Business

Taufik Rachman, Didik E. P. and Maradona, Kukuh Leksono

Department of Criminal Law Universitas Airlangga, Dharmawangsa Dalam Selatan, Surabaya-Indonesia,

Keywords: Private Bribery, Bribery, and Integrity.

Abstract: It is the fact that the Indonesian legal systems lack prohibition on private bribery. This situation leads to the

problem of what is called "null of normen" (lack of regulation) known by most of the Indonesian legal

scholars. Some argue that private bribery has been ruled within Indonesian Bribery Act, but some scholars

argue otherwise. The last-mentioned argument further argues that the Indonesian system had a regulation that

is sufficient to tackle bribery within the private sector. Anti-Monopoly and Business Competition Act often

cited as the umbrella act for keeping integrity in doing business. To what extent that those often cited

regulations match the standard of what so-called as private bribery "regulation"? Inevitably United Nations

Convention Against Corruption (UNCAC) become the norm to check whether the Indonesian system has such

regulation where according to their last report, the Indonesian lack of Anti Private bribery regulation. Using

doctrinal legal approach and socio-legal approach, more specifically political approach, this paper is designed

to answer whether the Indonesian need specific regulation on Private Bribery. In this paper, we argue that the

Indonesian system needs to have regulation on Private Bribery as a matter of urgency to meet the International

standard on combating corruption. The need to give healthier, conducive environment on doing business and

putting the bar of Integrity amongst business player are also underlined within this paper to support the

argument.

1 INTRODUCTION

Private bribery acts which suggested within UNCAC

still absent in the Indonesian legal system. The report

of UNCAC team stated so as the Indonesian system

also lacks other prohibited act such as trading in

influence and illicit enrichment. Arguably the

Indonesian legal reformer in crafting the Anti-

Corruption law believed that corruption domain is in

public law involving public official only. Thus

bribery between private to private is never considered

as a corruption act. In fact, some might question the

reason for private-to-private bribery, as there is no

victim in this sense. This kind of argument cannot be

accepted anymore, which explained in this paper.

In general, prohibition for bribery is ruled within

several regulations such as in the Indonesian Anti-

Corruption Law or Anti Bribery Law however private

bribery still what the Indonesian legal scholar call as

"null of normen." This situation disadvantaged

Indonesian system to eradicate corruption

systematically due to the norm within International

level believed that private bribery regulation is

strategic plans on nationally eradicate corruption. The

Indonesian law enforcer still put or acknowledged

"private bribery” as private entities who bribed public

official as we can see in their guidelines. This

situation can be understood as the Anti-Corruption

Law have not regulated "private to private" bribery.

In this part, Anti Bribery law and Anti-Monopoly

law is described. The last mention regulation is a

regulation that guarantees business process within

Indonesia exercised within integrity and fair.

More specifically, those two regulation is

considered, for some people can be used to prosecute

private bribery. For example, it is said “…eventhough

there are no sanctions for private bribery in the

Indonesian Anti-Corruption Act, it does not per se

mean that Indonesia does not have regulated criminal

sanction on private bribery in the Law Number 11

Years 1980 concerning Anti Bribery Act (Marbun,

MaPPI). However, some also argue that those

regulations are not sufficient to be considered as fit

with UNCAC standard. Those who argue that the

Indonesian system lack of private bribery regulation

mentioned that “…there isn't any corruption

regulation on private bribery" (Ginting, 2016).

Husodo (2016) has a similar argument that is argued:

Rachman, T., E. P., D., Maradona, . and Leksono, K.

Private Bribery and Integrity in Doing Business.

DOI: 10.5220/0009402002050213

In Proceedings of the 1st International Conference on Anti-Corruption and Integrity (ICOACI 2019), pages 205-213

ISBN: 978-989-758-461-9

205

"on the legal-formal perspective, we only have

regulation on public sector corruption…”

The element of private bribery in UNCAC is

explained in the following paragraph, discussed

simultaneously with those two previously mentioned

regulations.

Article 21 UNCAC mentioned as follow:

Each State Party shall consider adopting such

legislative and other measures as may be necessary to

establish as criminal offenses when committed

intentionally in the course of economic, financial or

commercial activities

The promise, offering or giving, directly or

indirectly, of an undue advantage to any person who

directs or works, in any capacity, for a private sector

entity, for the person himself or herself or for another

person, in order that he or she, in breach of his or her

duties, act or refrain from acting

The solicitation or acceptance, directly or

indirectly, of an undue advantage by any person who

directs or works, in any capacity, for a private sector

entity, for the person himself or herself or for another

person, in order that he or she, in breach of his or her

duties, act or refrain from acting.

From the above-mentioned regulation, the

concept of active and passive bribery is also used

within private bribery concept. The same thing also

applied that private bribery is also considered as an

intentional action (kesengajaan). By this, proofing

bribery is not an easy business.

Doctrinal legal research is considered beneficial

for this research because it can provide more internal

insights into the Indonesian legal system. The

importance of doctrinal research in law is recognized

by Bodig (2011) who has argued that: Doctrinal

scholarship has a crucial role in cultivating the

epistemic authority the legal profession lays claim to.

It provides a sort of academic validation

(authentication) to the claim that the legal profession

possesses distinctive expertise without which quality

governance is not possible.

The socio-legal research is used in this research to

give a better understanding of the phenomenon of

private bribery within Indonesian sociological

context. Several cases that are taken from mass media

report were highlighted, such as the MMC hospital

case. Two cases from Singapore that is considered as

private bribery also described in this research as for

giving better insight on how private bribery happen.

The last, it is important to understand that putting

private bribery within the Indonesian reformer

agenda is a matter of political will. Thus the political

approach to see this political will to regulate private

bribery is crucial to address.

2 BRIBE ON PRIVATE BRIBERY

2.1 Element of Any Person Who Directs

or Works, in Any Capacity, for a

Private Sector Entity

The perpetrator of private bribery might be a person

or corporation. As in general bribery cases, corporate

may also be liable if, for example, the briber acts for

the account or on behalf of a company. It can be

someone who works at a company (private entity), or

it might be someone who works outside of the

company but working at any company in any

capacity. Important note on article 21 UNCAC based

on Explanatory Report Council of Europe (1999)

described as follow:

“This provision prohibits bribing any persons who

"direct or work for, in any capacity, private sector

entities." Again, this a sweeping notion of being

interpreted broadly as it covers the employer-

employee relationship but also other types of

relationships such as partners, lawyer, and client and

others in which there is no contract of employment.

Within private enterprises, it should cover not only

employees but also the management from top to

bottom, including members of the board, but not the

shareholders. It would also include persons who do

not have the status of an employee or do not work

permanently for the company -for example,

consultants, commercial agents, etc.- but can engage

the responsibility of the company."

This broad definition definitely includes a person

who works within the company as an employee or

someone outside non-employee such as contractor,

sub-contractor, a consultant who works for the

company based on a contract basis.

It should be noted that private bribery is not only

for a high-rank person within the company, but this

also for the lower rank or every person within a

company. The company itself might be a company

that haven't been registered before, no matter big or

small. Thus what is important is emphasized on

private-to-private relation without involving any

public sector. It is considered as general/common

bribery if one of the perpetrators is a public official

who works on public administration.

The Indonesian Anti Bribery law, on the other

hand, may not reach the corporation as a subject

perpetrator of private bribery. The word "barang

siapa” (every person) still defined as a person only

(naturelijk person) which is the same as what the

Indonesian Penal code (KUHP) refers too. Section 3

on the law use the word “ia” (she/he) which refers to

a person as a subject.

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In the next section, passive and active bribery is

discussed within private bribery concept. Similar to

ordinary bribery, passive bribery includes someone

who solicited or accept bribe where active bribery

includes promising, offering, or giving a bribe. In the

context of trading in influence, the briber might be

called as the instigator while the bribed is called as

the influence peddler.

2.2 The Promise, Offering or Giving

Elements on Active Bribery

The prohibition on active bribery within private

bribery is similar to ordinary bribery which is

regulated in UNCAC. In Explanatory Report Council

of Europe 1999, active bribery explained as follows:

The three actions of the briber are slightly

different. "Promising" may, for example, cover

situations where the briber commits himself to give

an undue advantage later (in most cases only once the

public official has performed the action requested by

the briber) or where there is an agreement between

the briber and the bribee that the briber will give the

undue advantage later. "Offering" may cover

situations where the briber shows his readiness to

give the undue advantage at any moment. Finally,

"giving" may cover situations where the briber

transfers the undue advantage.

In the context of private bribery, only non-

officials carry out the act of promising, offering, and

giving. Emphasis as in promising does not have to be

given immediately also applies to the private sector.

The definition of the offer includes situations where

there is readiness in giving bribes if assisted as in

ordinary bribery which involving public official.

Also, the meaning of giving includes bribes made

through transfers of fund between private-to-private.

2.3 The Solicitation or Acceptance

Elements

As for passive private bribery, the same thing applies

for general passive bribery with the exception of only

those conducted by non-public official. The meaning

of the solicitation is “menawarkan untuk disuap”,

some literature refers to what is called as

"permohonan” where this is not a proper word

because “permohonan” is a more positive word while

"solicitation" means negative from the root of the

word. Some literature uses the word "requesting,"

which in Indonesian is interpreted as "meminta” or

“asking” and is not quite right also because the

negative nuance of the act is not visible. Note for

general bribery is as follow (Explanatory Report

Council of Europe 1999):

"Requesting" may, for example, refer to a

unilateral act whereby the public official lets another

person know, explicitly or implicitly, that he will

have to "pay" to have some official act done or

abstained from. It is immaterial whether the request

was actually acted upon, the request itself being the

core of the offense. Likewise, it does not matter

whether the public official requested the undue

advantage for himself or for anyone else.

So in private bribery, "menawarkan untuk disuap"

means a series of actions with the aim of informing

the other party either explicitly or implicitly if being

bribed will act on certain actions or not doing

anything as it was contrary with her/his obligation.

Whether the act actually happened does not become a

problem because the form of the offense formula is

"delik formil," which contrary with “delik materiil”

where the result is necessary to be proven. As for

"acceptance" is interpreted as "penerimaan" and some

literature refers to as "receiving." Private parties who

"receive" get the "actual benefits" even though they

do not have to get it directly. This signaled that

indirect benefit is acknowledged.

2.4 Direct or Indirectly Elements

Direct or indirect elements of private bribery indicate

the possibility of "intermediaries" or third persons.

There are two things that must be considered in the

case of indirect bribery where direct bribery is

considered to be no problem. Indirect can be mean

how perpetrators accepting their bribe (the first), and

the second is, who receives the benefits of the bribe.

In an indirect bribery case, the relationship between

the recipient and the third party must be proven. This

lead to proof "indirect bribery" is a difficult task

because in addition to proving the "bribe," law

enforcer also have to prove the involvement of third

parties as beneficiaries or as recipients of the bribes.

2.5 Undue Advantage Element

Undue advantage within Indonesian words literally

means “keuntungan yang tidak semestinya". It is said,

"tidak semestinya” / "improperly" due to it is contrary

to the laws and regulations or internal regulations of

the corporation or the values that exist in the

community. Undue advantage can be "tangible"

object or "intangible" object. The meaning is very

broad as prohibited within the Indonesian Anti-

Corruption Law. This includes sex gratification,

position offers, rebates/discounts, and vouchers.

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2.6 Element on “act or refrain from

acting."

This element is directly related to passive bribery

actors where passive actors can "do something"

(melakukan sesuatu) or "not doing anything" (tidak

melakukan sesuatu) in their position in a private

institution. In the context of common bribery where a

public official is one of the passive actors, R Wiyono

(2005) states that position (jabatan) of the public

official is determinant to measure breach of duties as

a public administrator. As in private bribery,

“position” covers not only employees but also the

management from top to bottom, including members

of the board, but not the shareholders (Explanatory

Report Council of Europe 1999).

Two important things that must be considered, the

first is that it is not important that the passive briber

actually does what the briber has asked. The

explanatory report also explained that "It is

immaterial whether the request was actually acted

upon, the request itself became the core of the

offense.". Second, "... it does not matter whether the

public official requested the undue advantage for

himself or for anyone else ". It means that the

acceptance of bribes by passive actors does not have

to be directed to him; it can be given to third parties.

Passive actors must be proven that he knows for

bribes given to third parties

2.7 Element of "in breach of his or her

duties."

Breach of duty in a private organization is necessary

because the word "duties" indicates the existence of

certain positions attached to active and / or passive

actors. If this element is not fulfilled, it cannot be said

that bribery is in the private sector, but it can also

meet another type of corruption called as "trading in

influence" as mention in article 18 UNCAC. Bribes

in the private sector, both active and passive, violate

the tasks inherent in job or positions in the private

sector. This element must be broadly interpreted not

only as positions are known in Indonesia as structural

positions, but it must be interpreted in every position

or position that does not belong to the structural, such

as private employees who control the entrance of

goods in a privately owned warehouse or private

employees who supervise other workers (see also

explanation on 2.6. Element on "act or refrain from

acting").

3 IN THE COURSE OF

ECONOMIC, FINANCIAL, OR

COMMERCIAL ACTIVITIES

This element is the character that distinguishes

between bribery in the private sector and the public

sector. Bribery in the private sector is a bribe in the

context of business activity as stated below

" Business activity "is to be interpreted in a broad

sense: it means any kind of commercial activity, in

particular trading in goods and delivering services,

including services to the public (transport,

telecommunication, etc.) (Explanatory Report

Council of Europe 1999)."

NGOs or other social institutions such

as"Yayasan"/ foundations may not be included in this

category. In the Indonesian context, this will be a

problem due to some of the Yayasan, to support their

funds, they do business. Likewise, with NGOs,

support their movements, sometimes they also do

trades that can be categorized as a business. So if

there is a bribe involving Yayasan or NGO during

their business activity, then it should be considered as

bribery in the private sector.

3.1 Cases and Matter of Urgency to

Regulate

This part discussed private bribery cases, overseas,

and within the Indonesian system. The overseas case

is taken from Singapore known as Dongah Geological

Engineering bribery case and private bribery case

known as a 1-dollar case. The case known as MMC

hospital is discussed to give a better picture of the

Indonesian situation. Those cases are chosen as a

clear example of private to private bribery.

3.1.1 Dongah Geological Engineering

In 2018, there were bribery cases in Singapore

involving several companies, namely Dongah

Geological Engineering Company Ltd. (hereafter

called as Dongah), based in Korea, Fasten Hardware

and Engineering Pte Ltd and Taka Hardware and

Engineering (S) Pte Ltd. The last two representatives

of the company gave some money to the Dongah

representative in Singapore. The purpose of the bribe

is to facilitate cooperation between companies. The

nominal bribes given and received were $ 3000

(Singapore dollars) and $ 4000 (Singapore dollars).

The three representatives of the company were

considered to have violated the Prevention of

Corruption Act (Singapore Act) with a 5-year

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criminal sentence and a $ 100,000 fine (Singapore

dollar). In total there are five suspects in the bribery

case, two from Dongah and three from

representatives of companies that gave the bribed.

There was no public official involved in the case.

3.1.2 Cogent Container Depot / I Dolar Case

Two forklift operators of Cogent Container Depot

employees were questioned for taking bribes from

truck drivers of 1 dollar per truck. They were accused

of one corruption charge for trying to get 1 Singapore

dollar from a truck driver so as not to delay the return

of containers to his vehicle. The action allegedly took

place between September 2014 and March 2018.

CPIB did not specify the total number of all alleged

bribes against two suspects. If convicted, they will

face jail for up to five years or a $ 100,000 fine

(Singapore dollars). Similar to Dongah case, there

was no public involvement in the case. Lower rank

workers within Cogent Container Depot are stressed

in this case as it shows that any position within private

entities can be subject to private bribery.

3.2 Bribery of PT. Interbat to MMC

Hospital

One of the alleged cases of private bribery in

Indonesia is the case of PT Interbat, which later

emerged through a journalism investigation

conducted by Tempo. PT Interbat allegedly

committed bribes to several hospitals and doctors.

One of the parties who received bribes was the

Metropolitan Medical Center (MMC) Hospital which

is a private hospital and a doctor who works at the

hospital. MMC Hospital has received money from PT

Interbat four times with a total amount of Rp. 253

million. The funds went through the account of

Robby Tandiari, President Director of PT Kosala

Agung Metropolitan, the company that owns MMC.

As written in PT Interbat's financial records obtained

by Tempo, the money was used to finance the

construction of hospital facilities. In return, MMC

promised to sell as many medicines as possible for the

pharmaceutical company during the year, from

August 2013 to September 2014.

Both PT Interbat and MMC hospital are private

entities that cannot be prosecuted using the

Indonesian Anti-Corruption Law. The evidence for

the allegation was solid, and at the end, the consumer

or patient becomes the one that loses. They have to

pay more for their medication.

3.3 Bribery of PT. Interbat to the

MMC Doctor

Two specialists doctors at MMC who received a total

of Rp. 318 million from PT Interbat is another

concern whether it should be considered as corrupt

conduct or merely unethical conduct. Under the

Medical Ethics Code, it is expressly stipulated that

doctors must not receive commission money from

pharmaceutical companies. The provisions stipulate

that doctors are prohibited from making medical

decisions under the influence of other parties and are

prohibited from receiving tribute from prescription

drugs. The possible punishment was clear, namely the

revocation of the practice permit. Penalties will be

more severe if the status of the doctor is PNS (Public

official) where they are threatened with crime with

the Minister of Health Regulation No. 14 of 2014

concerning Gratification Control in the Ministry of

Health and the Anti-Corruption Law. The problem is

as if the doctor is a private or working within private

hospitals such as in this MMC doctor case. The

ethical reaction may not enough to deter doctor who

keeps accepting gratification or bribe from

pharmacies.

3.4 State Own Enterprise (SOE) Son’s

Is Not State Own Enterprise (SOE)

It is decided that Badan Usaha Milik Negara / BUMN

or State Own Enterprise is more public than private.

However, this position may not be the same for their

"son" enterprises as it considered more private than

public. Corruption within SOE son’s in Indonesia is

out of the Indonesian anti-corruption radar. Bribery

between private-to-private is possible and prohibited

within International society. Thus it is possible that

between SOE son’s or SOE son's with other private

entities exercise corrupt conduct such as bribery.

4 ANTI BRIBERY LAW AND

ANTI-MONOPOLY AND

BUSINESS COMPETITION

LAW, CONFLICTING OR

SUPPLEMENTING?

As previously mentioned, the Indonesian

acknowledged prohibition for bribery within Law No.

11 of 1980 (Anti Bribery Law). It is ruled on the

prohibition of giving or receiving bribes. The

prohibition of bribery is set forth in Article 2 which

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209

prohibits each person giving or promising others to

do or not do something in his or her duty, contrary to

his authority or obligation in the public interest while

the prohibition on accepting bribes is set out in article

3 which prohibits everyone from accepting the offer

or promise as set forth in article 2.

According to article 2 and article 3 of Bribery

Law, basically bribes committed between private to

private may be subject to the Bribery Act as long as

in public interest. Therefore, in a contrario manner,

bribery between private parties that are not related to

the public interest cannot be reached by the Law.

Moreover, it is common amongst legal scholar to

believe that the Anti Bribery Law is made to tackle

issues related to sports integrity. In addition, as the

Bribery Act is not considered as a "corruption

matter," the Anti-Corruption Commission (KPK) lack

of jurisdiction to investigate the case. It is the

Indonesian police who has jurisdiction to investigate

it.

KPK is considered as an Independent state

institution with the power to coordinating with other

law enforcer agencies which are authorized to

eradicate corruption, supervision of agencies

authorized to eradicate corruption, carry out

investigations, prosecute corruption, take steps to

prevent corruption, and monitor the implementation

of state government. However, the KPK is not

authorized to carry out acts of eradication, prevention,

and monitoring of bribery in the private sector due to

it does not fall within the scope of corruption as

mentioned in Anti-Corruption Law. This indicates

that the criminal law policy regarding bribery in the

private sector in Indonesia is currently absent as part

of anti-corruption eradication campaign.

It can be concluded that the legislation in

Indonesia has not yet regulated the crime of private

bribery, as mentioned in Article 21 of UNCAC. The

bribery arrangement in the Anti-Corruption Law is

limited to bribery relating to the public official, state

administrators, judges, and advocates so that the act

of bribing someone who is not a state official cannot

be qualified as corruption in the Anti-Corruption

Law. While the Anti Bribery Law may ensnare the

private sector who commit bribery, but within the act

itself, there is an obstacle that is related to the phrase

"public interest" as a condition of the probition act.

Therefore all acts of bribery not related to the public

interest cannot be reached by the Law. Also, the KPK

is not authorized to take actions to eradicate, prevent,

and monitor bribery in the private sector because it

does not fall within the scope of criminal acts of

corruption.

Below tables are a comparison between section 21

UNCAC and section 2 and section 3 Anti Bribery

Law:

Active (private) bribery

UNCAC

Anti-Bribery Law

Subjet

Person and Corporate

Person

Actus reus

Giving, offering and

promising

Giving and

promising

Direct or indirectly

Directly

Undue advantage

Something

(advantage ?)

Person

capacity

who directs or works,

in any capacity, for a

private sector entity,

for the person himself

or herself or for

another person

Who have duties

and obligation to

serve the public

interest

A private sector entity

The entity to serve

the public interest

The briber

aim to the

bribed

breach of his or her

duties, act or refrain

from acting

Breach of his or

her duties and

obligation, act or

refrain from acting

Passive (private) bribery

UNCAC

Anti-Bribery Law

Subjet

Person and Corporate

Person

Actus reus

The solicitation or

acceptance

Acceptance

Direct or indirectly

Directly

Undue advantage

Something

(advantage ?)

Person

capacity

who directs or works,

in any capacity, for a

private sector entity,

for the person himself

or herself or for

another person

Who have duties

and obligation to

serve the public

interest

A private sector entity

The entity to serve

the public interest

The bribed

breach of his or her

duties, act or refrain

from acting

Breach of his or

her duties and

obligation, act or

refrain from

acting

Above table shows that the Indonesian Anti

Bribery Law lack of several significant elements of

private bribery as section 21 UNCAC ruled. The

absent of these elements might lead to problems in

eradicating corruption systematically. For example:

1. Problem on prosecuting corporate on bribing

other corporate

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2. Several acts which highlighted in both active

and passive bribery were missing, such as

"offers" and "solicitation."

3. The possibility of indirect bribery within the

private sector is still unruled.

4. The terms “undue advantage” definition

includes tangible and intangible

5. Debate on the meaning of public interest

instead of the private sector

Next paragraph discusses what is ruled within the

Anti-Monopoly and Business Competition Law. This

to understand whether the law, significantly effective

to curb corruption within private sectors.

4.1 Anti-Monopoly and Business

Competition Law

The Anti-Monopoly and Business Competition Law

(UNDANG-UNDANG NOMOR 5 TAHUN 1999

TENTANG LARANGAN PRAKTIK MONOPOLI

DAN PERSAINGAN USAHA TIDAK SEHAT) is

made to keep business in Indonesia accord with the

Indonesian regulations and to maintain integrity.

Bribery in the private sector means doing business

improperly or in a way that does not have integrity.

Conspiracy to get tenders in the world of business by

using bribery seems to escape the radar of law

enforcement because it is considered normal, and

there is no rule that prohibits it. Then what is

conspiracy is important to understand within the

Indonesian context.

“Persekongkolan” or Conspiracy according to

criminal perspective:

A combination or confederacy between two or

more persons formed for the purpose of committing,

by their joint efforts, some unlawful or criminal act,

or some act which is innocent in itself, but becomes

unlawful when done by the concerted action of

the conspirators, or for the purpose of using criminal

or unlawful means to the commission of an act not in

itself unlawful.

This definition might be slightly different from

the definition of conspiracy according to the

Indonesian Anti-Monopoly and Business

Competition Law where emphasized added on the

aims of the conspiracy is to occupied market. There

are two approaches used within Anti-Monopoly and

Business Competition Law known as “per se illegal”

dan “rule of reason."

The juridical approach is typical of the application

of the Anti-Monopoly and Business Competition Law

where the rule of reason approach is an approach used

by business competition authority institutions to

make an evaluation of the consequences of certain

agreements or business activities, to determine

whether an agreement or activity is inhibiting or

support competition. Conversely, the per se illegal

approach is to declare any agreement or certain

business activities illegal, without further proof of the

impact arising from the agreement or business

activity.

There are 3 types of “persekongkolan” conspiracy

within Anti-Monopoly Law:

a) Tender conspiracy

b) Conspiracy to get secret information from a

company

c) Conspiracy for slowing down production and

or market

The juridical approach used within Anti-

Monopoly Law is the rule of reason where the clause

in the article that reads "... can lead to unfair business

competition” means that agreements or actions

regulated in the Antimonopoly Law is not per se

prohibited, because on a contrario basis, if the act

does not have a negative impact or does not intend to

cause a condition of unfair competition, then the

agreement or the act cannot be penalized.

In relation to private bribery, conspiracy is often

the result of tacit collusion that sometimes involves

bribery of business actors who should be competitors.

The Anti-Monopoly and Business Competition Law

does not touch if a tender conspiracy, either in the

context of general conspiracy to gain trade secrets or

hindering production and / or marketing which is

involving bribery between them. The Law considers

bribery within business processes for the intention of

controlling the relevant market for the interests of

business actors who conspire to, only be a part that is

actually considered not prohibited. That is if there is

a bribe between business actors, but there is no

intention of controlling the market, then it is

considered permissible because it is not considered as

corruption. It is even not considered as breaching

Anti-Monopoly and Business Competition Law. Our

Anti-Corruption Law regime only touches if one of

the perpetrators is a public official, and it is related to

the public administration (the decision-maker).

Actually, in the business world itself, especially in

large corporations and transnational corporations,

they have internal regulations that prohibit corrupt

behavior, including in the case of bribery in

conducting business. This internal regulation is made

with at least two objectives, namely to meet

international standards which they must have this

internal regulation/ policy to meet the ISO, and

second, in the case where there is personnel who

commit corrupt acts as prohibited in their internal

rules, then the corporation cannot be held responsible.

Private Bribery and Integrity in Doing Business

211

In addition, awareness in the international business

world to jointly fighting corruption is also a reason,

because pragmatically, corruption is considered

detrimental to the business world.

5 EVALUATION WITH "IF."

This section specifically discusses the need for

private bribery prohibition. If we have special rules

related to private bribery, how will this affect the

business climate in Indonesia?

5.1 The Urgency to Prohibit Private

Bribery

In general, the prohibition of private bribery need to

be made as a matter of urgent due to the Indonesian

has ratified UNCAC where private bribery is one of

the recommended criminal acts although it is not

mandatory to be adopted. If we do not ban private

bribery, the evaluation result for the implementation

of UNCAC in Indonesia will always bring up findings

that Indonesia still does not comply with UNCAC.

This condition certainly raises the notion that the

climate of eradicating corruption in Indonesia is still

considered to be problematic because it is not in

accordance with UNCAC, which certainly affects the

business climate and investment from abroad. The

Indonesian regulations both regulating the Anti

Bribery Law and the Anti-Corruption Law cannot yet

reach the character of bribery in the private sector as

targeted by UNCAC. Even in the Anti-Monopoly and

Business Competition Law, it does not specifically

prohibit bribery in the private sector, although in

practice, conspiracy often involves bribery among

business actors.

More specifically, the reason to prohibit private

bribery according to the Explanatory Report Council

of Europe 1999 is as follows:

First of all, because corruption in the private

sphere undermines values like trust, confidence, or

loyalty, which are necessary for the maintenance and

development of social and economic relations. Even

in the absence of specific pecuniary damage to the

victim, private corruption causes damage to society

as a whole. In general, it can be said that there is an

increasing tendency towards limiting the differences

between the rules applicable to the public and private

sectors. This requires redesigning the rules that

protect the interests of the private sector and govern

its relations with its employees and the public at large.

Secondly, criminalization of private sector corruption

was necessary to ensure respect for fair competition.

Thirdly, it also has to do with the privatization

process.

It was also stated in the document that the old

approach to eradicating corruption/bribery in the

private sector using anti-monopoly regulations and

general criminal regulations was considered to be

sectoral. To eradicate corruption, a comprehensive

step is needed whereby banning bribes in the private

sector can contribute to such comprehensive efforts.

In addition, if a businessman in business sector says

“No” to bribery and uphold business integrity, a

healthy and conducive business climate in Indonesia

is formed so that more investment into the country,

opening up a lot of work opportunities and hopefully

it can increasing the country's economy. At least this

can be predicted as the domino effect of bribery

arrangements in the private sector. However, further

research is needed on different perspective such as

political, economic, social, cultural, defense, and

security to give more comprehensive information for

the legal reform in adopting private bribery

prohibition. Every effort to make National Business

Integrity guidelines is strongly supported in this

paper.

6 CONCLUSIONS

This paper argues that the Indonesian system needs to

have regulation on Private Bribery as a matter of

urgency to meet the International standard on

combating corruption. The need to give healthier,

conducive environment on doing business and putting

the bar of Integrity amongst business player are

manifold as clearly described. However, we further

suggest that comprehensive research still needed

within the aspect of political, economic, social,

cultural, defense, and security before transplanting

article 21 UNCAC into the Indonesian legal system.

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